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Pieter Steenkamp
 
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How to trade in rhino horn and make lemonade

24 February 2014, 09:13

When life gives you lemons, make lemonade.

“There is a high demand for rhino horn in the Oriental world.” This leads to bad things, like our rhinos getting killed. But, for us, there is a good thing about it too.

We have tonnes of rhino horn stockpiled. It should really be a waste of space. It has no intrinsic worth to a human being and it is worthless to us. But here comes the lemonade, a gift out of the heavens, falling in our laps and completely undeservedly. “There is a high demand for rhino horn in the Oriental world.” The Oriental world will give us a billion US dollars for our worthless rhino horn. We spend our time trying to convince them that there are no medicinal properties to rhino horn, but what if they finally believe us? Our entire rhino horn stockpile: worthless. A free billion dollars: chucked away.

It is so difficult to get one over on another country these days. So difficult to negotiate favourable trade agreements, to sweat and haggle for months to wrest away one dollar of trade surplus. We find ourselves on the economic losing side to the East so often. When a bit of respite offers itself up, let us take it. As for the individuals who use rhino horn, even though they know they are causing the extinction of rhinos: Let us take their money. Let us take a billion US dollars off them. Let them have that punishment.

Selling our stockpile of rhino horn will not will not stop poaching. That is a battle that will stay with us. But let us reward our selves for our struggles, with a billion dollars. Let us not take only the bad lemons and deny our selves the good lemonade that comes with it.

The problem with trading legally in rhino horn is that it can increase poaching. There is a way to trade without increasing poaching, it has just not been found yet. Here is my suggestion on how to avoid the major traps. Have a read through, and point out traps that have not been avoided.

1.     Identify each individual rhino horn to be traded uniquely. DNA tests exist, but it is very difficult and time consuming for a normal conservation official to extract and match the DNA of a rhino horn he encounters to a list of legal horn DNA. I suggest one quicker identification method: Since each rhino horn is unique, like a human fingerprint, publish standardised characteristics about each legal horn’s shape in a list for legal horns. The characteristics, like: height, angle of tip, width of base and weight would most likely convert to an easy to use serial number, which can be determined by an official by just measuring the characteristics in the correct order again.

2.     One needs to make sure that no rhino gets poached to take advantage of the legal trading. If private owners of rhino are allowed to trade horns in their possession, some of them will quickly poach an additional few rhino to pass the horns off as coming from their own, previously deceased, rhinos. Perhaps there is a system already in place to determine whether a rhino horn in private possession has been legally acquired, but for now only state owned rhino horn are to be auctioned. Since one rogue state official’s endeavour to add to the state’s rhino horn stockpile by poaching is unlikely to benefit that individual significantly in a financial sense, poaching by state officials for the legal trading is less likely to happen.

3.     To ship the rhino horn out to the buyers will be difficult, because it will raise red flags at each border post and post office. It will be best to choose only a few countries, containing the most potential buyers, and negotiate an agreement with their officials to let one shipment of rhino horn through. Preferably more than one country needs to be chosen, because it is more difficult for buyers from different countries, speaking different languages to form a cartel to keep the buying price low.

4.     Create one eBay sellers account, where all the horns are listed.

a.     To list rhino horn, buy-in from eBay needs to be obtained first. If the sell-off has broad public approval, it may deliver great kudus to eBay’s image, and they may very well forego the usual % they take from sales, to increase the money going to conversation.

b.     To increase security for the bidders from other bidders (they are all black market criminals, remember), the usual username information of the bidders should be completely removed by eBay

c.      Let the auction run for 3 months, to allow the bidders enough time to collect the financing they need, so that more bidders can bid against each other for the same horn in the latter stages of the auction, so attaining the highest possible price.

d.     The minimum reserve price shall be set to be the black market price to the end user, minus a reasonable couple of percentages. This will avoid losing the stock of rhino horn cheaply, due to unforeseen inefficiencies - like a cartel fixing the bidding to stay low, or only one bidder having enough money to buy that much horn so that no one bids against him to raise the price.

5.     As is normally the case with eBay auctions, the selling price obtained for each horn will be clearly visible to the general public. The public can tally up the combined income, and that should correspond to final figure that goes into state coffers. Any discrepancy will flag officials diverting some of the money into their own pockets.

6.     After the auction has ended, the horns for each destination country will leave South African customs in one special shipment, and not many, just to make the administration of this special (normally illegal) cargo through customs easier.

a.     The entire shipment for a destination country will land at one port-of-call only. Again, just to ease the administration for the local customs authority by accepting the (normally illegal) rhino horn into their country only once, at one place.

b.     The arrived rhino horn will be kept in a single area in the receiving country. To this area the winning bidders of the auction will send their couriers/cousins/usual black market mules, with proof of their purchase, to collect their horns. The horns are then out of the hands of the authorities and all tracking of the horns by them stop completely.

7.     The rhino horn traders shall be given a month-long window period to move the horns within the borders of their country, to allow them time to get them to the location from where they trade them. During this time, if a horn is intercepted by authorities, the trader can point to the horn’s serial number and visual identification profile, to prove it’s legality.

a.     If the horn is powdered up within the month-long window period, the serial number and visual profile is destroyed and therefore the powder is illegal. This is because it is now too much administration for officials to determine whether the powder comes from legally bought horn or not.

b.     After the month window period, the legally purchased rhino horn becomes illegal again. No matter whether it is still whole with serial number intact. This is to ease the administration expected of the local authorities compared to the situation where they were to perpetually keep a database of legal horns as well as teach new officials about it.

c.      More importantly, if given too much time for a horn to stay legal, a practice amongst traders can develop where they insert a legal horn serial number onto illegally purchased horn and scrape the shape of that horn to resemble the shape of the legal horn, to make their illegal horns seem legal.

8.     It is important for the legally purchased horn to eventually become illegal merchandise again. This is so that the user base for rhino horn does not increase. Currently, many potential users are scared away from rhino horn by its illegal status and we want to keep them abstaining, instead of allowing them to become habitual users and eventually demanding illegal horn too.

a.     Perpetually legal horn will be able to fetch a higher price, but it will change the market in some uncertain way. Will demand skyrocket? Will powdered illegal horns be more difficult to tell apart from powdered legal ones? It is this uncertainty that has stood in the way of any stockpile sell-off thus far. Therefore it is much preferable to stick to the certainty of the market we know: the illegal market.

So that is how one makes lemonade. Have I missed an ingredient? Point it out.

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