Ivory sales by Zimbabwe and Namibia could ‘create demand spike’

7th June 2016 By: South African Institute of International Affairs

 Ivory sales by Zimbabwe and Namibia could ‘create demand spike’

In early May, the governments of Zimbabwe and Namibia took the unusual step of petitioning the Convention on the International Trade of Endangered Species (CITES) to remove their elephants from CITES protection, which currently prohibits them from selling elephant ivory. Arguing that the international ban – imposed in 1989 - of selling ivory has been a costly and unsuccessful 26-year ‘experiment’, officials from the two Southern African countries are trying to make a case for releasing their ivory stockpiles onto the global market and thereby turn a profit.

They argue that the CITES Appendix II listing, which allows only limited trade – subject to particular conditions – has not allowed them to realise the asset value of their well managed elephant populations, numbering around 84,000 in Zimbabwe and 24,000 in Namibia. The removal of these elephants from CITES protection would allow the countries to auction elephant products to any willing buyers, built on the rationale that open trade is the only means by which to overcome the current poaching epidemic.

This rationale relies on a theoretical possibility that open auctions would satiate demand and drive down the price of ivory, thereby reducing the incentive to poach. But shutting down the trade entirely would also reduce the value of ivory to zero, and the incentive to poach elephants would no longer exist.

Whether Zimbabwe and Namibia’s arguments hold water requires further interrogation.

Selling ivory will keep markets for ivory open

First, markets for ivory are fast closing, largely as a result of pressure from elephant range states and the international conservation community. While new demand coming out of Asia in recent years has fuelled a dramatic increase in elephant poaching across Central, East and West Africa, this trend is being short-circuited.

China, once a reliable source of demand for ivory, announced in May 2015 that it would close its domestic market to the trade and shut down its carving industry. The US, another – if often less recognised – market for ivory has followed suit, with the Chinese and US governments making a joint announcement to this effect in September 2015. The combination of the two largest markets working together to block the trade will help to close the circle of illegal and legal trade in ivory. Legal domestic markets, particularly in East Asia, have until now provided a convenient cover for illegal ivory, undermining the efficacy of the international ban.

If Zimbabwe and Namibia are successful in their proposals, Chinese authorities may choose to limit the duration of their impending ban in response to the signal that there are willing sellers available. This would limit the ban’s efficacy, as it would incentivise speculators to stockpile ivory until the ban is terminated, thereby driving up elephant poaching. For domestic trade bans to drive the ivory price to zero, they should be implemented indefinitely. But this requires all the supply signals to be consistent, which requires all elephant range states to be on the same page.

Selling ivory may increase demand for poaching

Second, the relative success that both Zimbabwe and Namibia have enjoyed in managing their elephant populations, which has produced large herds (and sometimes large headaches), is by no means guaranteed. Spurred on by unexploited opportunities further south, evidence shows that the poaching pandemic is moving into southern Zambia and Zimbabwe.

Indeed, the once healthy elephant populations in Kenya, Tanzania, Mozambique and Gabon have been devastated over the last several years as demand for ivory has escalated. Zimbabwe and Namibia contend, however, that poaching has escalated precisely because ivory has not been available through open auctions on a regular basis. They reckon that the two one-off sales in 1999 and 2008 failed precisely because they sold too small a volume onto the market to satiate demand; this created an artificial sense of scarcity of supply, which drove up prices and fuelled poaching.

But being allowed to sell ivory by open auction may well fuel a further explosion of demand, and there is insufficient data on which to assess whether supply would be able to keep pace with potentially expanding demand. Moreover, whatever stigma effects currently exist through a combination of demand reduction campaign efficacy and an impending domestic trade ban, are likely to be undermined if supply is made legal. Evidence from China shows that the price of raw ivory in China has fallen by 50% since May 2015 in the wake of the official announcement to close the domestic market. The new proposals threaten these gains. It also curious that these countries blame the 1989 CITES ban for the poaching pandemic, and yet have also experienced elephant population growth.

Selling ivory undermines collective action to conserve elephants

Finally, alarmed by the poaching trend, most African governments of elephant range states are themselves taking collective action through the Elephant Protection Initiative to cut off the trade within their countries. They also insist on maintaining the highest level of protection under CITES – an Appendix I listing that allows no trade. Zimbabwe and Namibia argue, on the contrary, that the prevention of trade in elephant products under CITES has produced a perverse incentive for local communities not to value elephants. This allegedly accounts for the poaching threat, for instance, in two regions in Zimbabwe where elephant numbers are rapidly declining. But it is hard to see how preventing the trade in ivory constitutes a perverse incentive. A truly perverse incentive would exist if communities and parks perceived that they could make more money from selling elephant products than conserving living elephants.

Zimbabwe and Namibia have introduced explicit division between African range states at a time when being of one mind is crucial to turning the tide against elephant poaching. Though the proposals are likely to fail at the CITES COP in September, they have the potential to create a spike in demand for ivory, especially if these countries chose to abandon or ignore CITES regulations after the convention meeting.

This initiative is a step backwards at a time when a growing coalition of countries from China and the US to Tanzania and Gabon are finally recognising the need to end the ivory trade altogether.

Written by Chris Alden, professor at the London School of Economics and Politics, and Ross Harvey, senior researcher at SAIIA.