The Illusion of Control

HONG KONG’S “LEGAL” IVORY TRADE

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ABOUT WILDAID WildAid’s mission is to end the illegal wildlife trade in our lifetimes by reducing demand through public awareness campaigns and providing comprehensive marine protection.

The illegal wildlife trade is estimated to be worth over $10 billion (USD) per year and has drastically reduced many wildlife populations around the world. Just like the drug trade, law and enforcement efforts have not been able to resolve the problem. Every year, hundreds of millions of dollars are spent protecting animals in the wild, yet little is spent on stemming the demand for wildlife parts and products. WildAid is the only organization focused on reducing the demand for these products, with the strong and simple message: W HEN THE BU Y ING S TOPS, THE KILLING CA N TOO. WildAid works with hundreds of Asian and Western political figures, celebrities and business leaders, including the Duke of Cambridge, Yao Ming, Jackie Chan, Li Bingbing and Sir Richard Branson, to dissuade people from purchasing endangered wildlife products. These public service messages and educational initiatives reach hundreds of millions of people per week in China alone through donated media space. www.wildaid.org

C ONTACT IN FO RMATION WILDAID 744 Montgomery St #300 San Francisco, CA 94111 Tel: 415.834.3174 Christina Vallianos vallianos@wildaid.org

AUTHO RS Peter Knights, Executive Director of Wildaid A. Hofford A. Andersson D. Cheng

C OLL A BO RATO RS Shannon Benson, Photographer Hugo Ugaz, Designer

EVERY YEAR UP TO 33,000 ELEPHANTS ARE KILLED FOR THEIR IVORY ACROSS AFRICA BETWEEN 2009 AND 2014, TANZANIA LOST 65,721 ELEPHANTS – MORE THAN 60% OF ITS POPULATION

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EXECUTIVE SUMMARY There is no better place in the world to buy, sell or smuggle elephant ivory than Hong Kong, a hub for the global ivory trade since its days of colonial rule by the British. Why the Hong Kong government continues to allow this toxic and deeply unpopular trade remains a mystery.

When the international commercial ivory trade was banned in 1989, Hong Kong held 670 tonnes of ivory. Rather than set a deadline for selling off this stock and closely monitoring its disbursement, Hong Kong’s Agriculture, Fisheries and Conservation Department (AFCD), the government agency charged with implementing the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), continues to allow sales, making no meaningful checks to ensure the ivory is from original stock and not from recently poached ivory. In international meetings, AFCD officials have defended — and even promoted — continued domestic trade, insisting that its system is watertight.

The evidence laid out in this report tells a different story. Though long-term sales trends indicate that the stockpile should have been exhausted around 2004, 111.3 tonnes remain unsold, a figure that has barely budged in recent years. During the same period, demand for ivory has skyrocketed in mainland China, which accounts for over three-fourths of all tourists visiting Hong Kong.

An investigation by WildAid and its partners found that traders routinely sell their existing ivory, then replenish stocks with newly poached ivory — all under legal cover. Tourists are coached on how to successfully smuggle purchased ivory back into mainland China. Nearly all of Hong Kong’s ivory vendors are flouting even superficial regulations by not displaying proper licenses in their stores.

The evidence shows that AFCD does not have the resources, capability or desire to monitor the ivory trade. In a recent poll, 96% of the public interviewed supported a ban on ivory sales. Hong Kong’s recalcitrance to an ivory sales ban is in marked contrast to Chinese policy, which calls for a phase out of its trade.

With an estimated 33,000 elephants killed each year for their ivory, WildAid recommends that Hong Kong take the following immediate actions: • Ban the Hong Kong domestic ivory trade immediately.

• Establish a dedicated wildlife crime unit.

• Allocate more resources to combating wildlife crime.

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INTRODUCTION

“IS ALL OF YOUR IVORY STOCK LEGAL?”

In February 2015, an undercover wildlife trade investigator posed this question to a licensed dealer in Hong Kong, long an international hub for the trade and mass laundering of elephant ivory.

“All my things are legal,” the dealer responded. Surrounded by shrinkwrapped carvings, figurines and bangles, he then offered a key caveat: When [the international commercial ivory trade] was outlawed in 1989, we registered our stocks with the Hong Kong government ... all materials were registered, but the record was not in detail. They only record the weight of my raw materials and finished products. So I can simply exchange with anything. After I sell an [ivory] item, I can use illegal ivory to make another item to top up my stock again. The government officials have no idea on how to govern. * Translated from Mandarin

In recent years, countless Hong Kong residents have taken to the streets to denounce these unscrupulous vendors who peddle ivory trinkets and other worthless items. Strong majorities support banning the trade — a critical move underway in mainland China and the United States, two of the world’s primary ivory markets.

In fact, just about everyone in Hong Kong wants a ban — apart from the ivory traders and, for reasons we do not understand, the Hong Kong government that has chosen to back them.

This report is an indictment of Hong Kong’s “legal” ivory trade, one that has provided cover for smuggling, profit for criminal syndicates and incentive for poachers to kill as many elephants as they can.

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HONG KONG AND THE IVORY WARS With lax regulations and an extensive network of retail outlets, Hong Kong historically has been a major player in the international ivory trade. During the 1970s and 1980s, tusks from an estimated 700,000 African elephants were smuggled out of Africa — much of it bound for Hong Kong.

In 1976, the African elephant was listed under Appendix II of the UN Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), designed to control and limit trade. However, the CITES regulatory system was subject to widespread abuse, which accelerated poaching levels. For example, CITES permitted international trade in “worked ivory,” but had failed to define the term. This meant that huge quantities of freshly poached tusks, smuggled out of East Africa and into the United Arab Emirates, could be imported into Hong Kong with minimal “working” — sometimes just roughly chopped.1 Faced with this poaching epidemic, CITES uplisted the African elephant to Appendix I in 1989, thereby prohibiting all international commercial trade in ivory. This emergency measure had a profound effect: Prices plummeted, markets across the globe shuttered and poaching rates fell, allowing elephant populations to recover.

However, new markets emerged by 2008, when CITES authorized a sale of 70 tonnes of ivory to China. Business ties between Asia and Africa were strengthening, while rapid economic growth in countries such as China had created a class of newly affluent consumers eager to own ivory. To these buyers, Hong Kong is a destination par excellence.

1. Thornton, Allan and Currey, Dave (1991) To Save An Elephant, p.13. Doubleday. ISBN 0-385-40111-6

Hong Kong traders held some 670 tonnes of ivory at the time of the 1989 ban, 570 tonnes of which came from illegal sources, according to the Environmental Investigation Agency. Under British colonial governance at the time, Hong Kong was allowed by the United Kingdom to continue trading this ivory until its stockpile was exhausted. Twenty-five years later, this has yet to happen. Instead, industry players launder illegal ivory and replenish their inventories in order to satisfy the growing demand for their illicit goods.

THE PRESENT DAY TRADE Today, many retail outlets continue to sell elephant ivory under a legal regime administered by the Hong Kong government’s Agriculture, Fisheries and Conservation Department (AFCD).

During a market survey from October 2014 to August 2015, WildAid found: • 94 confirmed retail outlets for ivory • 10 additional outlets suspected of selling ivory, for a possible total of 104 outlets • 11 confirmed ivory carving factories in Hong Kong.

• 13 suspected ivory carving factories, for a possible total of 24 factories • At least one confirmed dealer in raw ivory tusks, legality unknown.

According to Hong Kong government figures released in September 2015, there are 26 ivory traders in Hong Kong who hold at least 1 tonne each of so-called “legally acquired” pre-1989 ban ivory. Five of those traders are holding between four to six tonnes each. In light of investigator footage provided to WWF-Hong Kong, the true quantities of ivory being held by the city’s ivory traders is much higher.

In our market survey, WildAid found that raw and worked ivory items continue to command high prices. Sample prices are as follows in Hong Kong and U.S. dollars: • Dice HK$300.00 (US$38.70) • 25-bead bracelet: HK$350.00 (US$45) • Comb: HK$400 (US$52) • 9 ½” chopsticks: HK$750 (US$97) • 108-bead necklace: HK$2,700 (US$348) • Snowy landscape pen by Zhu You: HK$13,000 (US$1,677)

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• Raw ivory: HK$16,275 per kg (US$2,100) • Polished ivory: HK$17,8725 per kg (US$2,300) • Bonsai scenery carving: HK$68,000 (US$8,774) The most expensive piece found during the survey was a large ivory scene allegedly carved in the 1960s entitled “Birthday Party,” which had a price tag of HK$8.6 million (US$1.1 million) at Yee Hing Loong on Hong Kong island’s Hollywood Road, in December 2014.

WHO’S BUYING Hong Kong is a major tourist destination, and was visited by over 61 million people in 2014 — of which 47 million, or 78%, came from Mainland China.2 This represents an increase of 106% Mainland tourists between 2008 3 and 2014. According to a recent Save The Elephants report, Hong 2. Zhao, S. After bumper year of incoming tourism, Hong Kong expects slower growth in 2015, South China Morning Post, http://www.scmp.com/news/hong-kong/ article/1708876/growth-touristnumbers-slow 3. http://partnernet.hktb.com/filemanager/intranet/ PRESS/EnglishPress/CCPR2009-E/2008_WholeYear_ release-e_0_0.html

Kong ivory vendors say that over 90% of ivory buyers are Chinese and visiting from the mainland.4 It’s clear that commercial outlets selling so-called “legal” ivory are targeting tourists. Many ivory shops can be found in the major tourist areas, such as Tsim Sha Tsui, Central, Sheung Wan, the Peak and Stanley.

These areas are popular with mainland Chinese tour groups, who arrive in large groups by coach.

4. Martin and Vigne. Hong Kong’s Ivory: More Items for Sale than in any Other City in the World. Save The Elephants, Kenya. 2015. Pp. 35-36

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Other nationalities are also encouraged to buy ivory. Some ivory traders in the established tourist district of Tsim Sha Tsui openly advertise to foreign tourists in their own languages.

Though it’s illegal to take purchased ivory out of Hong Kong without government-issued permits, ivory sellers routinely coach tourist customers how to circumvent re-export laws. In 2014, employees at two established ivory retailers were filmed advising people on how to smuggle ivory across borders.5 5 . Hong Kong craft shop staff secretly filmed advising

A salesman at an ivory shop called Yue Hwa Chinese Products Emporium admitted to undercover journalists that taking ivory out of Hong Kong is illegal, but advised them that it is “easy to take out, even if you go through the metal [detector], there’s no sign. You [just] hide it somewhere”.

A senior sales consultant at Chinese Arts and Crafts told the journalists about a customers how to smuggle ivory across border.

South China Morning Post 12 February 2014. http:// www.scmp.com/news/hong-kong/article/1426537/ hong-kong-craft-shop-staff-secretly-filmed-advisingcustomers-how

customer who bought two-dozen ivory chopsticks and smuggled them to Singapore, hidden among four-dozen plastic chopsticks. The customer returned two or three weeks later, wanting to buy more.

The salesperson also spoke of customers smuggling ivory to North America hidden in socks, and about how others avoid checks on the mainland side of the Shenzhen border by leveraging their contacts at customs there, advising that “[It] depends on the class of your friends.”

THE ILLUSION OF CONTROL WildAid’s long-term investigation of the Hong Kong ivory market has found a systemic failure of a system touted by officials as adequate and effective. These shortcomings include:

I NEFFECTIVE LICE N SING C ONT R OL S According to Hong Kong’s AFCD, a license to possess ivory “shall be kept and displayed in a conspicuous position in the keeping premises specified in the license.”6 6 . Agriculture, Fisheries and Conservation Department,

Of the 94 shops physically surveyed by WildAid investigators from October 2014 to August 2015, only one shop, located in Hong Kong’s Prince Edward district of Kowloon, was found to be displaying its possession license in full accordance with Hong Kong law. In this shop, the license was fully visible, unfolded and unaltered.

The vast majority of the shops visited were disorganized and appeared unlikely to be able to produce an accurate inventory. Of those that were displaying a license, often it was partially hidden, damaged, out-ofdate or tampered with by redacting the supplier’s name and maximum weight of licensed inventory. This commonplace and brazen flouting of the law should be investigated by the AFCD and the violators punished.

Assuming that the ivory shops found to be displaying incorrect or out-of-date licenses are in fact actually legal ivory licenseholders, this leaves about 300 of the 413 AFCD-issued licenses in 2014 unaccounted for. These licensees likely comprise shadowy figures of the ivory trade who conduct business in much larger volumes, such as middlemen, carvers, factories and speculative investors.

P R OVI D I N G C OV E R F O R I L L E GA L T R A D E Each year, licensed vendors in Hong Kong must report the weight of ivory in their possession to the AFCD. In 2013, retailers reported a cumulative 117.9 tonnes — a figure that had remained virtually unchanged for three years. In 2014, the number dipped slightly to 111.3 tonnes. This implies that only 6.6 tonnes had been sold during that calendar year, widely recognized as a boom period for ivory sales. By way of comparison, ivory sales between 1994 and 1995 totaled 38 tonnes.

Circular No.: ES 01/14 (February 28, 2014) https:// www.afcd.gov.hk/english/conservation/con_end/con_ end_info/con_end_info_cir/files/ES0114_e.pdf

If ivory sales rates from most of the previous years are taken as accurate, Hong Kong’s stockpile of legal, licensed, pre1989 ivory would have sold out by 2005.

Instead, it has remained at a dubiously “healthy” level, indicating that freshly poached ivory from African elephants is being laundered into the legal market and sold as pre-1989 stock.

F R AU D U LE N T I N VO I C E S Shopkeepers readily write fake invoices for elephant ivory items, identifying the product as mammoth so it can be transported across international borders. Should a discerning customs officer identify the item as elephant ivory, the purchaser can plead innocence. In this scenario, both buyer and seller are usually complicit in the fraudulent activity. On October 31, 2014, investigators recorded a shopkeeper in Tsim Sha Tsui East who offered to produce fake receipts for the potential customer: Trader: “Some customers asked me to issue an invoice stating that it is a mammoth, then they can bring it out of HK. But in fact, it is not mammoth.”

Investigator: “So you can do the same for me if I buy?”

Trader: “Yes. I can give you two invoices, one stating it is mammoth.”

W E A K PE N A LT I E S F O R W ILD LIFE CR IM E Hong Kong’s maximum penalties for ivory trafficking remain at extremely low levels compared to those meted out in mainland China. Gambling on the chance of a six-month jail sentence or low fine in Hong Kong compared with life imprisonment in China, traffickers have been choosing Hong Kong as a “soft touch,” in case smuggled ivory is intercepted by customs in the ports of Shanghai or Shenzhen.

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PERSONAL P O SSE SSION LOOP HOL ES Ineffective regulation of the “legal” ivory stockpile has created a confused picture of the extent of ivory trading in Hong Kong.

AFCD authorities allow ivory stocks to be de-registered and re-registered from commercial to “inactive,” or “personal,” and back again. However, once the ivory is de-registered, it’s no longer subject to a license, and is essentially taken off the AFCD books. The government does not have figures for the amount of “inactive” stock held by the traders, thereby creating another mechanism for laundering illegal ivory.

I NA DEQUATE E N FO RCEM ENT I NFRAS TRU CTU RE With trade in numerous other species to monitor and regulate, Hong Kong’s AFCD lacks manpower and resources, such as sniffer dogs and carbon dating equipment to “age” ivory and identify items from recently poached elephants. As Save the Elephants noted in a recent report, AFCD only has eight inspectors tasked with policing ivory retailers, among many other official duties.

WildAid is encouraged to note that on February 11, 2015, Hong Kong Secretary for the Environment Wong Kam-sing said that the Hong Kong government is open to exploring the feasibility of using new technology:7 In collaboration with an overseas forensic laboratory, the AFCD has provided samples of ivory from ivory seizures to the laboratory for DNA testing to trace the origin of the ivory. We have also recently started exploring the feasibility of using new technology (e.g. carbon dating for testing the “age” of ivory) to assist in our inspection and enforcement work.

7. http://www.info.gov.hk/gia/general/201502/11/ P201502110477.htm

FORCES IN FAVOR OF AN IVORY BAN The people of Hong Kong increasingly understand the terrible impacts of its domestic ivory trade on elephant populations. Over the past year, citizens have taken a number of positive steps toward ending the trade in ivory, but the Hong Kong government remains unwilling to ban the trade — and is now lagging far behind influential counterparts.

C HI NA Presiding over an ivory destruction ceremony in Beijing, China’s Minister of State Forestry Administration Zhao Shucong made international headlines this past May when he pledged that China will “strictly control ivory processing and trade until the commercial processing and sale of ivory and its products are eventually halted.” This pledge forms part of China’s “Decree on Accelerating the Development of Ecological Civilization,” which was jointly issued by the Central Committee of the Chinese Communist Party and the State Council on April 25, 2015.

Mainland China’s decision to phase out domestic trade in ivory has given new impetus to the global effort to stop the mass slaughter of elephants for their ivory.

If Hong Kong does not follow suit, there will be a ban in one part of China but not in another. Given that over 90% of people purchasing ivory in Hong Kong are from the mainland, it makes not only moral, but practical sense for Hong Kong to ban the trade as well.

Such a move would make enforcement on the mainland considerably easier and would enable Hong Kong to make a significant contribution towards closing down the trade in what is currently the world’s biggest ivory market.

U N I T E D S TAT E S Movement is afoot on federal and state levels to eradicate ivory sales in the US. Under current U.S. law, ivory can be sold legally across state lines if it was imported prior to January 18, 1990, the date when African elephants were officially listed under CITES Appendix I. President Barack Obama, on the occasion of his first official visit to East Africa in July, pledged to close this interstate trade loophole with very limited exceptions.

State level legislation is critical to local ivory sales. Two states, New York and New Jersey, have enacted their own bans against commercial ivory sales, while the nation’s most populous state, California, is on the verge of passing its own (as of press time, the bill, known as AB 96, was awaiting Governor Jerry Brown’s likely signature).

Bills in Washington and other states recently have been killed by strong opposition from the influential and well-funded gun rights lobby, which objects to any legislation that would restrict trophy hunting imports or antique firearm sales. Wildlife activists have not been deterred, however.

After Washington’s bill failed in the state senate, advocates led by Microsoft co-founder Paul Allen backed a voter referendum campaign to pass tough restrictions on sales of wildlife parts (including ivory).

A strong majority of state voters support the ballot initiative, which could be used as a model for other states that also have an initiative process.

T H E H O N G KO N G PE O PL E The Hong Kong government has repeatedly stated that it is unwilling to take any “bold” action, such as banning “legal” ivory, as it is a signatory of CITES and intends to follow the stipulations of the Convention unless otherwise instructed:

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“Hong Kong’s control over domestic trading of ivory is comparable to other countries. We will continue our efforts on enforcing the CITES requirements and public education. There is currently no plan to ban all ivory trade.” 8 — Wong Kam-sing, Hong Kong Secretary for the Environment However, this statement is not in line with the opinions of the people of Hong Kong.

In recent years there have been numerous occasions on which Hong Kong people have expressed outrage over the continued sale of ivory in the territory. A petition asking the Hong Kong government to ban ivory sales has garnered over 8,000 signatures 9 (and continues to grow), while a South China Morning Post opinion poll conducted on January 5, 2015 found that 98% of the over 1,000 poll respondents agreed that Hong Kong should adopt a complete ban on the sale of all ivory products.10

8. http://www.info.gov.hk/gia/general/201502/11/ P201502110477.htm 9 . https://secure.avaaz.org/en/petition/The_Hong_ Kong_Government_Ban_Ivory_Sales_in_Hong_Kong 10. http://www.scmp.com/comment/polls/ poll/1674093/should-hong-kong-adopt-complete-bansale-all-ivory-products

In December 2014, a University of Hong Kong random telephone survey of 1,021 Cantonese-speaking respondents 18 years or older above found that 75.4% support or strongly support a ban on selling ivory in Hong Kong.11 Over the past year, campaign initiatives and protests organized by local NGOs Hong Kong for Elephants and WildLifeRisk led to a voluntary decision to cease ivory sales by Hong Kong’s four major ivory retailers – Chinese Arts & Crafts (Hong Kong) Ltd, Wing On Department Store, Yue Hwa Chinese Products Emporium and Chinese Goods Centre Limited.

Most recently, on March 14, 2015, over 100 people marched through the main ivory selling stronghold of Hollywood Road and Queen’s Road Central to protest the city’s ivory trade.

The positive response from retailers such as Chinese Goods Centre Limited demonstrates that some elements within the industry are willing to adapt, and that some commercial establishments are prepared to respond to the feelings of the public.

11 . http://www.wildaid.org/sites/default/files/ resources/WildAid-Hong%20Kong%20Ivory%20 Survey%2C05.26.15.pdf

LE G I S L AT I V E S U PPO R T Following a trip to Kenya in September 2014, and with WildAid’s support, Hong Kong legislator Dr. Elizabeth Quat has spearheaded a movement lobbying the Hong Kong and China governments to ban commercial ivory sales in Hong Kong, and her campaign is gaining momentum.

In February 2015, five lawmakers from Elizabeth Quat’s party, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) announced at the party’s annual Chinese New Year press conference that they would submit a suggestion to ban the domestic sale and transportation of elephant ivory in China for discussion by the Standing Committee of the National People’s Congress in Beijing.

Elizabeth Quat successfully lobbied 32 out of a maximum of 36 Hong Kong NPC lawmakers to support her bid to end the ivory trade in China. “Hong Kong would be the first consumer nation to ban ivory sales,” Quat said during her Kenyan visit in 2014.

“We’d be taking a strong stand with our brothers and sisters in Africa and setting an example for the rest of the world.”

Led by DAB chairman Tam Yiu-chung, the group of lawmakers recommended that

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China also increase public awareness and support for efforts to persuade the public not to buy or sell ivory. The DAB forms the backbone of the 36-strong bloc of delegates from Hong Kong.

RECOMMENDATIONS TO END THE TRADE 1. Hong Kong should follow the example provided by the mainland and announce a ban on all domestic trade in ivory and on imports of “pre-Convention” ivory.

Mainland China’s recent decision to phase out domestic trade in ivory has given new impetus to the global effort to stop the mass slaughter of elephants for their ivory.

Given that over 90% of ivory purchasers in Hong Kong are from the mainland, it makes not only moral, but practical sense for Hong Kong to ban the trade as well.

Such a move would make enforcement on the mainland considerably easier and would make a significant contribution to closing down the trade in what is currently the world’s biggest ivory market.

Suggested steps towards a Hong Kong ivory sales ban: The Hong Kong Government should: • Ban the import and sale of pre-Convention ivory and enforce the ban.

• Increase transparency by releasing official list of ivory traders to the public.

• Develop a mandatory registration system for antique ivory.

• Increase the maximum penalties for ivory trafficking.

• Step up public education and awareness raising, in partnership with NGOs and the private sector generally.

2. Hong Kong should establish a dedicated wildlife crime unit. AFCD is a bureaucratic operation checking paperwork only for legal trade.

Meeting for just half a day, once a year, a representative from Hong Kong Customs and Excise, a representative from AFCD and a representative from the Hong Kong Police meet to discuss wildlife crime issues. The group is known as the Endangered Species Protection Liaison Group (ESPLG).

This ESPLG nucleus should be expanded into a fully operational unit with

officers trained in the use of firearms and equipped with expertise in CITES issues. One of the main recommendations of a 1994 EIA report entitled ‘Enforcement not Extinction’ was for the Hong Kong government to set up a wildlife crime unit. On May 6, 2015, at a meeting of the main green groups in Hong Kong a call for a wildlife crime unit to be set up echoed the demands of the 1994 EIA report. In over twenty years, nothing had changed.

3. Hong Kong should allocate more resources to combating wildlife crime.

We recommend a significant increase in the budget for Hong Kong Financial Secretary John Tsang in 2016. The Hong Kong government must do its part to prevent harmful speculation by disclosing the official list of ivory license possession holders. ###

WOR L D R AW I VO RY C O N S U MPTI O N , 1 9 8 7

12% OTHERS 10% CHINA

36% HONG KONG

• Ban the sale of whole and cut raw ivory tusks and enforce the ban.

• Ban the sale of worked ivory in any form.

• Increase intelligence-led enforcement, including carrying out controlled deliveries, monitoring retail outlets, employing staff to work undercover and deploying sniffer dog teams at exit points such as Lo Wu boundary control point and Hong Kong International Airport.

20% TAIWAN 22% JAPAN SOURCE: TED CASE STUDIES: ELEPHANT IVORY TRADE BAN. AMERICAN UNIVERSITY, WASHINGTON DC. THE ILLUSION OF CONTROL

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