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Mishcon Academy: Purpose Matters - Environmental Crime – an increasingly important consideration for business?

Posted on 19 May 2021

As part of our Purpose Matters series, John E Scanlon AO, former Secretary-General of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), spoke with Alexander Rhodes, Head of Mishcon Purpose and Jo Rickards, Head of the White Collar Crime & Investigations Group. They discussed the impact on environmental crime which is becoming an increasingly important consideration for business.

John is the current Chief Executive of the Elephant Protection Initiative and Chair of the Global Alliance to End Wildlife Crime.

Jo regularly advises companies and individuals in a wide range of issues including corruption investigations, fraud, and money laundering.

Mishcon Academy: Digital Sessions are a series of online events, videos and podcasts looking at the biggest issues faced by businesses and individuals today.

Alex Rhodes

Welcome everyone, thank you for joining us this afternoon.  I’m Alex Rhodes, I’m Head of Mishcon Purpose.  Today we’re going to discuss environmental crime and explore its importance as a consideration for business.  The World Economic Forum’s 2021 Global Risk Report lists climate action failure, biodiversity loss and human environmental damage, together with infectious diseases as the greatest global risks both by impact and by likelihood.  The science indicates that this diminished diversity, together with increasing climatic stress is likely to have contributed to the emergence of the Covid-19 pandemic.  Consumers, investors and regulators are ramping up demands for greater accountability by business for a growing tide of new laws and regulations.  The existing law providing for criminal sanctions for environmental harms is well-established but it is limited. 

To unpack this today and what it means to business, from an international and a UK perspective, I’m delighted to be joined by John E Scanlon AO, former Secretary General of the Convention on the International Trade in Endangered Species of Wild Fauna or Flora or CITES.  John is the current chair of the global alliance to end wildlife crime and the chair of the UK’s, the UK Government’s illegal wildlife trade challenge fund and Jo Rickards, a Partner and Head of the White Collar Crime and Investigations Group at Mishcon de Reya. 

John, welcome and thank you for joining us.  I’ve asked you and you’ve kindly agreed to start us off with an introduction to Environmental Crime and a context and drawing out its pertinence for us today. 

John Scanlon

Thanks very much, Alex.  Good afternoon and hi to Jo as well.  Thanks for the invitation and Mishcon Purpose.  I’d perhaps like to start it by saying, business people like anyone else, they have kids, they have nieces, they have nephews.  They want to leave the next generation with a habitable planet and there are three interrelated crises that we’re confronting at the moment and we have to deal with them altogether.  We’ve got the biodiversity crisis, the climate crisis and the crisis we’re currently living through, this current pandemic, but the risk associated with future pandemics.  The business sector is probably pretty familiar now with the climate crisis but perhaps the biodiversity crisis and the risk of future pandemics are not well-known by the business sector.  We’re told that over the next few decades we’re at risk of having over a million species go extinct.  This degradation of biodiversity is directly impacting climate change.  Then we’ve got this issue of pandemics.  This current pandemic we’re living through – Covid-19 – most likely had its origins in wildlife and recent reports tell us that there’s thought to be 1.7 million undiscovered viruses in wildlife, about half of which could spill over to people.  These wild animals that can result in these viruses, they don’t pose a risk to us.  What’s risky is the way in which we interact with wildlife. 

So, we have these three interrelated crises.  Biodiversity, climate change and the risk of future pandemics - all interlinked and we have to find ways of dealing with them together.  Now, people generally, whether they be citizens, consumers, investors or politicians, are growing impatient with the progress we’re making in dealing with, in particular, the biodiversity and the climate crisis and it’s been put into acute focus by these wildlife-related pandemics.  Now, I think it’s recognised across the board that if we’re going to succeed in turning things around, be it biodiversity or climate or stopping future pandemics, we need all sectors on board and critical to success is the business sector.  And I think that’s been the big gap to date and why, in many respects, we’ve been failing.  So, that’s going to change.  Whether people like it or not, there’s going to have to be a shift. 

The business sector has to come on board and it’s either going to come on board voluntarily or Governments are going to increasingly oblige the business sector to come on board.  We are going to see, through legal reform and I think it’s going to happen right across the globe, increasing demands for disclosure on the parts of business and due diligence.  Now, if we turn to Environmental Crime and Wildlife Crime more specifically, Environmental Crime’s not yet a defined crime or set of crimes but Wildlife Crime is well-defined.  The reality is that all those three crises I referred to are all exacerbated by wildlife crime.  Now, we had a World Bank report released in 2019 and what it said is if you look at the full market impact of Wildlife Crime, they value it between $1-2 trillion a year.  The value of the contraband they say is about $200 billion.  The loss of Government revenue is about $7-12 billion.  But you look at the impact on ecosystems the full market value of that is $1-2 trillion a year.  Now, what does that mean for the business sector?  I think we’re going to see more and more emphasis placed on ensuring businesses are sourcing any product that is derived from wildlife, there’s going to be increasing demand that they can demonstrate legal origin and I think we’re going to see increasingly issues happen with biodiversity and climate that are going to demand boards that are literate in these issues, you have people sitting around the table that can provide the sort of good judgement calls that are needed as we go forward and businesses learn to deal with a far more robust regulatory regime to address them. 

Alex Rhodes

John’s set the scene for us in a really comprehensive way but I wanted to ask you Jo, what English Environmental Criminal Law is there, what does it extend to and what are its limitations?

Jo Rickards

I mean, we do have Environmental Criminal Law but it’s quite ancient and it’s a bit of a patchwork.  So, we know that Environmental Crime is actually growing at a rate of between 5-7% a year and the worrying thing is that it’s just as profitable as drug trafficking but harder to detect and the sanctions aren’t as great.  I think there’s an increased focus certainly not just because of the effects that John was talking about but actually organised crime has become very interested in this space.  For the main part, the Environmental Bill, when it becomes an Act, won’t really increase the criminal aspects.  We’ll still be falling back on our existing law which is law that was drafted in the 1980s and came into effect in the 1990s.  Some of it’s been updated but you know, I would say actually it’s not really fit for purpose in 2021. 

So, we do have law, Environmental Law, that prohibits harm or kind of otherwise regulates by way of licensing regimes, pollution, deforestation, land contamination, you know, waste, and we have the specific wildlife offences that provide for the protection of certain species.  Most of our Environmental Law is strict liability, which means that obviously all a prosecutor would need to prove is that the act itself happened, there is no need to show any mental elements such as intention or negligence or recklessness.  So, there’s really been a lack of robust enforcement I’d say but we have seen in the last year, the creation of a specialist unit.  So, there’s a sort of UK-centric response designed to target serious and organised crime where it relates to waste disposal.  So, that’s the joint unit for waste crime. 

Historically as well, there’s been a lack of sentencing deterrent.  This is changing but the Environment Agency’s got a range of options at its disposal which can range from sort of penalty notices, warnings to actually pursuing this to a Court and getting a finding and a fine against a company normally.  But I think the biggest problem that we have in our UK response to Environmental Crime is this lack of extraterritoriality.  So, it’s a principal of English Law that although the Law criminalises acts here, it generally doesn’t criminalise acts abroad.  So, say there’s an oil spillage on the Ivory Coast or some other environmental harm, they won’t necessarily face criminal liability here unless elements of the act took place here.  So, although the Environment Bill is coming into force, it doesn’t deal with the harm that can happen overseas and doesn’t introduce sort of robust criminal sanctions to tackle that, which I think is what we need. 

Alex Rhodes

John, with the Global Alliance to end Wildlife Crime which you’re chairing now, you’re encouraging states to fill gaps.  I know that that’s focused specifically in relation to Wildlife Crime.  Could you talk a little bit about how you’re going about proposing that, what proposals you’re making?

John Scanlon

We have an international regime that when you look at it today, in 2021, you have to say it’s not fit for purpose when it comes to addressing Environmental Crimes and Wildlife Crimes in particular.  We created this global initiative to end Wildlife Crime you’ve been familiar with it, Alex and supporting us from the start, recognising that there are some critical gaps in the system that need to be filled.  And what we saw was that we have a pandemic that has its origins in wildlife and yet when you look at the international agreement that has been in place for 50 years to regulate trade in wildlife known as CITES, it only looks at the conservation implications of that trade.  It doesn’t look at, what is the implication of that species being taken from there and put somewhere else? Now, these are high-risk activities for the spill-over of new viruses.  So, what we’re saying is that when we look at wildlife trade - this is regulated trade as well as unregulated trade – you have to take a one-health approach to trade, which means that you have to look at the environmental implications as well as the implications for public health and animal health.  So, you don’t authorise any trade until you’re satisfied, not only that it’s not going to threaten the survival of that species from where it’s coming from but it’s not going to pose any risk to us, as humans, or any risk to any other animals at its destination end.  At the moment, you only regulate trade where there’s a concern about the survival of that species at its source.  So, change our international regime so that you look at those aspects together. 

So, that’s one strand of it.  The other strand is that, I talked before about the impacts of Wildlife Crime.  Jo was talking about the involvement of transnational organised criminal groups, they’re all over this yet believe it or not, there is no international agreement on either preventing or combating Wildlife Crime and we’ve relied upon CITES to date.  CITES is a trade-related – not a crime-related – convention.  It only relates to 38,000 of the world’s 8 million species and it only obliges countries to penalise not criminalise transgressions of that convention.  So, what we’re saying there is that if we’re going to seriously tackle Wildlife Crime, we need a dedicated agreement to prevent and combat.  And you can do that by creating a new protocol under the UN Convention against transnational organised crime.  If we can do that it’ll have massive implications in terms of the global collective effort to address these crimes and all the consequences they have. 

Alex Rhodes

Of course, English Criminal Law has developed ways of addressing extraterritorial acts that we feel are particularly harmful.  And I’m sort of thinking about the Bribery Act, Anti-Money Laundering, Terrorist Financing Provisions.  Could you talk a little bit about how those work and give us a view as to how they could work in an Environmental Crime context?

Jo Rickards

I mean, well in the last decade obviously the UK’s really experienced a fundamental shift in its approach to corporate criminal liability for some serious financial crime.  And it’s had a huge impact actually; I’d say an existential impact on how corporates and their staff regard bribery for example and what used to be something that was just part of business is totally outlawed now.  It’s like smoking in public places, there’s just been a massive shift in relation to the perception around this.  But the reason why the Bribery Act and the Criminal Finances Act are just so powerful is that any business that carries on business in the UK can be held criminally liable here for an act of bribery that takes place anywhere in the world.  I think that the Government’s kind of missed a bit of a trick there by not including that or even consulting on that in respect of the Environment Bill. 

Alex Rhodes

Are there developed ideas on how to get the business sector engaged with illicit trafficking?  What are the initiatives for business to get involved in trafficking?

John Scanlon

There’s been some really fantastic initiatives underway to engage with the business sector, in particular through the Duke of Cambridge in United for Wildlife.  I was involved in one right from the outset, the United for Wildlife Transport Task Force.  Also, there was the United for Wildlife Finance Task Force and then there’s a wonderful initiative as well by the World Travel and Tourism Council called the Buenos Aires Declaration which was the declaration by the peak industry body for Travel and Tourism.  All of these initiatives have been, I think, very well received and well picked up by the business sector.  Again not universally, it tends to be the industry leaders that get involved. 

Alex Rhodes

There’s currently a group of lawyers drafting a legal definition of ecocide with the hope that it would support bringing ecocide into international criminal legislation alongside genocide.  I’d be interested to hear the views of the panel on making ecocide an international crime by amending the Rome Statute.  What kind of crimes would the panel like to see caught by that provision?

John Scanlon

So, ecocide, certainly there’s a group of lawyers, a number of academic institutions that have been promoting this for some time.  It’s getting pick up in certain places.  It’s not getting at this stage, the same traction that we see with the issue of crimes having an effect on the environment, that’s the terminology that has been negotiated out.  Ecocide I don’t see embedded in the international discourse in terms of inter-governmental platforms at this stage. 

Jo Rickards

Yeah, ecocide Alex, I mean 10 jurisdictions have ecocide in their domestic law and I know it’s got a lot of momentum at the moment and I hope it’s successful.  But until it’s sort of drilled down into domestic law, you know, we’ve got quite a long way to go on it really. 

Alex Rhodes

How can our fishing in our international waters be better managed and cases against unlawful fishing in protected waters be upheld?

John Scanlon

I think when you look at the law of the sea and everything to do with territorial waters and high seas, in particular high seas, it becomes one of the more challenging issues to talk about in one to two minutes because the governance around high seas in particular is complex, it’s full of holes and all sorts of problems.  In terms of the protocol we’ve been proposing for illicit wildlife trafficking, we say it should cover all wildlife; all fauna and flora, including timber and fish species.  So that if you are illegally taking any fish, you ought to be subject to criminal sanction when you try and bring it into your destination state.  You might have sourced it illegally and think you’ll get away with it but what this protocol would oblige a country to do is criminalise the act of bringing it into the United Kingdom without having sourced it legally in the first place.  It’s a really complex issue.  There are all sorts of challenges with how we’re dealing with high seas in particular. 

Alex Rhodes

Jo, John, thank you very much and look forward to speaking again soon. 

The Mishcon Academy Digital Sessions.  To access advice for businesses that is regularly updated, please visit mishcon.com. 

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