The Illegal Trade in Chemicals

Economic impacts

bans of agricultural products due to the use of illicit pesticides could cripple the food industry, and the farmers’ potential losses, and the health impacts, could be devastating. The use of illegal pesticides at the 25 per cent level by volume in India implies projected losses of about 10.6 million tonnes of food for a single year. The illegal and informal mercury trade serves primarily the ASGM market. Data available through the Artisanal Gold Council and the United Nations International Trade Statistics Database (Comtrade) suggest that about half of all mercury used in ASGM is traded illegally or informally, and for many of the individual countries involved, the rate reaches nearly 100 per cent. Even the mercury imports that are properly documented often subsequently follow illegal pathways to the mining areas where the mercury is used. Much of the mercury that is documented when it is imported into Togo or South Africa, for example, is not documented when it is re- exported to ASGM areas in neighbouring countries. Research carried out in sub-Saharan Africa by the World Bank (2016) estimates the cost of mercury to ASGM operators in that region at about US $150,000–200,000 per tonne – some two to three times higher than the value of bulk mercury sold by major traders. Based on the estimate that half of all mercury supplied to ASGM operations worldwide is illegally or informally traded, the on-site value of the illicit mercury trade is likely in the range of US $100–215 million annually, but since the ASGM use of mercury is merely an intermediate step in the production of gold, this US $100–215 million of mercury is directly responsible for the production of gold with a market value of some US $20-30 billion.

Estimating the global figures associated with the illegal trade in chemicals is challenging, but some regional and national examples can shed light on the scale of economic losses. A recent European Union Intellectual Property Office study (2017) states that, “Legitimate industry loses approximately €1.3 billion of revenue annually due to the presence of counterfeit pesticides in the EU marketplace, corresponding to 13.8 per cent of the sector’s sales. […] If the knock-on effects on other industries and on government revenue are added, when both the direct and indirect effects are considered, counterfeiting in this sector causes approximately €2.8 billion of lost sales to the EU economy, which in turns leads to employment losses of about 11,700 jobs and a loss of €238 million in government revenues.” Another study from India provides insight into the scale and economic risks associated with the illegal trade in pesticides. It reports a value of US $525 million for illegal pesticides – both imported and produced domestically – for India in 2013 (FICCI 2015). This dollar figure represents about 25 per cent of the value of pesticides used in the country that year, and about 30 per cent of the volume of the domestic pesticide industry. The agricultural sector represents about 20 per cent of India’s gross domestic product, and the economic risks to the country and the industry are considerable. The study anticipates potential growth in the illicit market of approximately 20 per cent per year in value terms, and a roughly 40 per cent share in the pesticide industry by value by financial year 2019 if the federal and State authorities in India fail to address the situation effectively. This eventuality could threaten the entire Indian agricultural sector. Potential

The Illegal Trade in Chemicals


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