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Wednesday, October 4, 2017

Strategic CSR - Rhino horns

The article in the url below explores an interesting discussion around the economics of the illegal trade in rhino horns:
 
"South Africa is in the throes of a poaching epidemic. Official figures show poachers killed 1,054 rhinos in 2016, up from just 13 in 2007. In Kruger National Park, home to the world's largest rhino population, numbers are dropping despite a fall in recorded poaching incidents. Tom Milliken of TRAFFIC, a wildlife-trade monitoring network, worries that poachers have become better at hiding the carcasses."
 
In short, given that the status quo is not working, what would be the best response? Should we institute more laws and greater enforcement of existing laws, or should we legalize the trade? On the one hand:
 
"... some argue the trade ban might actually be making the problem worse. Restricted supply pushes up prices and pulls in poachers. Private rhino-ranchers argue that if they could sell their stocks of horn, they could undercut the illegal trade. Some already chop off their rhinos' horns to make them worthless to poachers. Unlike elephant ivory, rhino horn grows back after a few years."
 
But, on the other hand:
 
"… by seeking to normalize rhino use, legislation might boost demand along with supply. Prohibitionists worry that any attempt to lower prices would both bring in more customers, leaving incentives to poach unchanged, and make it far easier to launder illegal, poached horn."
 
This is a challenging problem that brings to mind the debate around the legalization of drugs due to the failure of the 'war on drugs':
 
"But if legalization is risky, so is maintaining the ban. [Research] finds a hard-core user base of around 30% of rhino-horn users, who want the stuff regardless of the penalties. So long as doctors prescribe it demand will be difficult to eradicate."
 
South Africa has recently embarked on a step towards legalization:
 
"On March 30th South Africa's constitutional court overturned the ban on domestic trade. Now, if they have the right permit, people can trade rhino horn, but not export it."
 
The concern of NGOs is that this halfway house is "the worst of all worlds":
 
"Allowing some legal trade while the authorities are not properly enforcing the ban on illegal trade will muddy the already murky waters. Once out of the country, legal and illegal horn will be all but indistinguishable; the illegal dealers still in control of the export trade will pocket the profits; and rhinos will keep falling to the poachers' bullets."
 
Take care
David
 
 
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On the horns
May 6, 2017
The Economist
Late Edition – Final
69