The Rise of Environmental Crime: A Growing Threat to Natural Resources, Peace, Development and Security

These white collar crimes, including corporate crimes through a wide network of shell companies based in tax havens, involve serious crimes and vast sums of money that not only rob governments and developing countries of hard-needed reve- nues, but also undermine legal markets and businesses, even impacting stock markets. Organized crime also uses environ- mental crimes to launder money from drug trafficking. In Peru and Colombia – which currently have the largest cocaine production in the world – illegal mining is by some claimed to be a viable alternative to drugs and the easiest and most profitable way to launder money from the illegal drug trade in the history of Colombian drug trafficking. 160 Carbon trading is the world’s fastest growing commodities market. 161 The combined value of carbon pricing instruments were in 2015 just under USD 50 billion. Carbon taxes and

emission system trade sales generated over USD 15 billion in government revenues across the world. 162 The vulnerability to crime of this trade derives from the market’s immaturity and the intangible nature of the product, which is based on “the lack of delivery of an invisible substance to no one.” 163 Another market is the trade in forest certificates (CRAs), that essentially enables landowners to offset their restora- tion obligations by paying for maintaining native vegetation elsewhere. The potential market for this in Brazil alone is trading 4.2 Mha of CRAs with a gross value of USD 9.2 +/– 2.4 billion, possibly becoming the largest market for trading forests in the world. 164 Also this has vast risks for organized crime and fraud and it is imperative as these trading systems evolve that substantial resources are given to the national and international police community, including INTERPOL and UNODC to help develop systems for prevention of the misuse and monitoring. Individual cases have revealed scams on carbon credits from tens to hundreds of millions of USD in individual cases. 165-166 In 2009 a Brazilian federal prosecutor, Bruno Valente Soares, conducted an investigation into charges that illegal timber from the state of Pará was being laundered as “eco-certified” wood, and subsequently exported to markets in the United States, Europe, and Asia. International buyers often pay an extra tariff or premium for eco-certified timber, while the alleged operations also involved forgery and fraud. The scheme allegedly involved up to 3,000 companies across Pará’s timber sector. Laundering illegally logged wood through real planta- tions or illicit companies has sky-rocketed in Asia. In Indonesia, the amount of logs allegedly produced through plantations increased from an official 3.7 million m 3 in 2000 to 22.3 million m 3 in 2008, 167 although it is widely known that only a portion of these plantations were actually established. 168 At the same the number of illegal logging cases in Indonesian courts dropped from a high of 1,714 in 2006 to only 107 in 2009. 169 In 2011, UNODC quoted officials in Indonesia that the number of plantation estates actually producing timber may be less than half of the officially quoted figures. 170 World Bank analysts in Jakarta are even more sceptical and suggest the area of productive HTI plantations may be no more than one-third of the officially quoted numbers. 171 “White collar” environmental crimes include, like any other “white collar” crime, crimes such as corporate crimes, use of shell companies in tax havens, tax fraud, double counting, transfer mispricing, money laundering, internet crimes and hacking, phishing/identity theft, securities fraud, financial crimes, and fraudulently reclaim carbon credits, along with threat finance to terrorist and armed groups, to mention a few.

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Sinaloa (Mexico)

Sinaloa (Mexico)

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