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During the month of May we hosted a webinar on Green Crime and what the financial industry needs to be aware of. Mike Anane, an environmental journalist from Ghana joined us to share his experience. Due to some technical issues Mike couldn’t tell us his full story and how Green Crime affects Ghana. Below you can read Mike’s story and watch the webinar on demand.

Text by Mike Anane, environmental journalist from Ghana.

Green Crimes in Ghana – why improved international cooperation is a must

Environmental crime also known as Green Crime is increasingly decimating natural resources, accelerating climate change and posing a major threat to peace, public health, sustainable development and security particularly in developing countries.

In Ghana, green crimes are also endangering ecosystems, polluting the air, water and leading to biodiversity loss. This clearly undermines environmental governance in Ghana and poses a direct threat to sustainable development.

Illegal wildlife trade

It is no secret that hundreds of elephant tusks, pangolin scales, rhino horns and other wildlife products are illegally sent out of many African countries to feed the insatiable demand for traditional medicine, the illegal pet trade and fashion industry in Asia and other developed countries.

Huge volumes of wildlife are illegally harvested and trafficked from Nigeria, Cameroon, and Ghana in West Africa -and other biodiversity hotspots in Central Africa and Gabon.

In response to increasing demand and increased enforcement in recent times, this highly profitable illicit transnational trade has moved online, with traffickers selling live reptiles, big cats, birds and other wildlife products through online platforms. It is also known that the wild life criminals are now moving to parts of West Africa with weak law enforcement capacity and legislation to avoid detection.

According to the national Geographic, Singapore seized a 14-ton shipment of pangolin scales, from an estimated 72,000 pangolins, coming from Nigeria in April 2019.

To disrupt criminal networks involved in illegal wildlife trafficking tighter controls and law enforcement are needed, including financial investigations.

As the decomposing carcasses of slaughtered, endangered species litter landscapes and communities that once depended on wildlife for a range of biodiversity and economic services, including tourism, are left with empty wildlife habitats. Their livelihoods are disrupted by criminal networks and governance systems ripped apart by corruption. The need to combat illegal wildlife trade becomes urgent.

Going after the poachers and the couriers is fine but going after the money and probing the finances of wildlife traffickers can yield faster and more reliable results, and also prevent future public health emergencies.

This calls for stronger criminal justice systems and improved international cooperation and cross-border investigations, among other measures. But we cannot afford to ignore financial investigations.

Illegal mining

Ghana is one of Africa's largest producer of gold which accounts for almost half its export revenues. Gold represents about 49 per cent of the country’s exports, contributing $8.35 billion to Ghana’s $59 billion GDP.

With mud, mercury and heavy metals contaminating major water bodies, Ghana’s water utility company warns that illegal mining is raising water treatment costs and limiting access to scarce drinking water.

Farmlands are destroyed beyond productive use in some communities, sources of drinking water muddied and polluted with mercury and other harmful chemicals and forests destroyed, and spiraling poverty.

Ghana has for several years been attempting to combat the problem of illegal mining. At the beginning of April 2020, two hundred soldiers have been deployed by the President of Ghana to comb the country’s water bodies in all the regions to "remove all persons and logistics involved in mining".

The high value and price of gold on the world market has attracted many foreigners from the sub region and other parts of the world. With gold trading at over $1,274.15 an ounce in mid 2019, it represents a lucrative and easy source of revenue for illegal miners. Foreign nationals from Togo, Burkina Faso and Mali, Russia and Ukraine have been arrested for mining gold illegally in recent times.

Chinese involvement in illegal gold mining in Ghana goes back to 1998 and it is believed that since the 2000 over 50,000 Chinese nationals have been engaged in mining illegally in Ghana.

Illegal gold mining activities have significantly affected the production of cocoa, Ghana’s third-largest export as some of the land suitable for cocoa growing are devastated by illegal gold miners. Large tracts of cocoa plantations have been uprooted to make room for illegal gold mining.

Some of the country’s major rivers including the Pra, river Ankobra, Birim and Ofin which serve as sources of drinking water for countless communities have been polluted by illegal miners in search of alluvial deposits.
 

E-waste exports

Less than 40 precent of discarded electrical and electronic gadgets such as computers, printers, televisions, fridges, microwaves, cell phones and other electronic device generated in the developed countries are recycled in the countries where they were used.

In a bid to externalize costs of responsible recycling, a huge chunk of the e-waste meant for proper recycling or disposal are shipped illegally to Ghana and other countries that lack the infrastructure to properly recycle the exported e-waste.

In Ghana, the exported e-waste is manually dismantled and burned in the open by young people wearing no protective gear, who poison themselves in a bid to salvage metals such as copper.

These discarded electrical and electronic equipment exported illegally contain toxic materials including heavy metals such as lead, mercury, arsenic, brominated flame retardants and cadmium which are carcinogenic and bio accumulate and are extremely harmful to both public health and the environment.

These toxic constituents of the e-waste foul the air during open burning and also seep into soils and groundwater, poisoning rivers, lagoons and the sea and decimating aquatic life in the process as well as filling the oceans with micro plastics and destroying the livelihoods of thousands of fisher folk.

Waste trafficking originates mainly in developed countries with the European Union, the United States and Australia being commonly identified as the main exporters of illegal waste. Meanwhile, exporting end of life electronics is not only a serious public health and environmental hazard but it is also illegal and a violation of national and international environmental legislation including the Basel convention.

It must be mentioned that the illegal export of e-waste and the limited enforcement activities is also leading to the loss of vast amounts of valuable rare earth metals and other important minerals. This increasing illicit activity calls for the tightening of enforcement activities to deter exporters and ensure that toxic e-waste is recycled responsibly in the developed countries.

Financial investigations into the illicit financial flows of persons caught exporting e-waste will be instrumental in getting to the syndicates behind this criminal activity.

Illegal plastic waste trade

The wide variety of plastic polymers makes it difficult to manage plastic waste even in the developed countries.

The trade in plastic waste is also a huge pollution crime that has also resulted in the contamination of water systems including rivers, lagoons and the oceans with micro plastics threatening marine life and local ecosystems as well as public health.

Huge volumes of plastic waste are simply shipped illegally to developing countries under the guise of recycling. But these mixed wastes are simply dumped or burned. Toxic gases from open-air dumps cause a range of health issues including heart disease, cancer and other respiratory issues. The marine litter, mainly plastics deposited at beaches in Ghana, also denies communities of the much needed revenue from tourism.

To combat the illegal trade in waste, financial institutions and financial investigations will be key in unravelling those behind these illegal exports of plastic waste.

Green crimes and the links with the financial sector - using financial transactions to investigate green crimes

Environmental crimes decimate natural resources as well as deprive states of much needed revenues as a result of tax evasion, corruption and other financial crimes while filling the pockets of perpetrators with huge profits.

The global financial system unknowingly facilitates the movement of billions of monies generated from environmental crime committed around the world. Affected financial institutions might be held liable for their involvement in these illicit crimes and it can be difficult to absolve them even though these crimes were perpetrated on their blind side through the use of their facilities by criminals.

Investigating financial transactions will not only assist in tracing illicit financial flows in Green crimes but can also provide immense leads to the suspects involved in green crimes as well as their accomplices and social networks and even how the profits, which is usually the biggest motivator, is laundered. It is important to follow the money in a bid to unraveling and combating green crimes as well as subsequent arrest and prosecutions.

Environmental crime is becoming increasingly transnational, organized and complex with increasing use of new technologies.

Improved regional and international cooperation in information gathering also helps broaden investigations in view of the cross border nature of these crimes.

This calls for increased global cooperation and mentoring between developed and developing countries to improve global law enforcement’s capacity to detect, investigate and disrupt illicit financial flows and tackle green crimes. More so when Criminals often use legitimate businesses as fronts to hide their actual business. Sweden could assist Ghana and other can take this forward in terms of capacity building.

The nature of transnational environmental crime also indicates that it is facilitated by bribery and corruption and falsification of documents in a bid to weaken state authorities and other regulatory systems. Sadly the money aspect is largely ignored in cases where perpetrators are arrested.

Crime prevention is indeed multi-sectoral but I am of the view that financial institutions in particular have a crucial role to play through enhanced due diligence with the possibility of environmental crime in mind and transaction monitoring as well as screening of third parties and suppliers and also being proactive and assisting law enforcement agencies with financial intelligence.

Working with public and private actors to prevent and combat environmental crime and associated financial crimes is also crucial, this calls for the protection of activists and journalists who play a key role in exposing all forms of crime.

Environmental crime is oiled by bribery, forged documents, corruption and money laundering through the international financial systems. We cannot afford to take the money thing out of the equation.

Text by Mike Anane, environmental journalist from Ghana.

Kontakt

Joachim Rusz
Senior Manager, Financial Crime Prevention, KPMG Sverige, joachim.rusz@kpmg.se, +46 79 0663045.