Do not allow the illegal trade of “ivory” to be the funding source of international terrorism: how Japan should address the issue.


Takuya Nakaizumi: Kanto Gakuin University Professor, Department of Economics

Date Published
Illegal trade in ivory has become a problem all over the world. The wild African elephant population has declined 30%–or 10,000 individuals–in the last seven years. Poaching for ivory has become a source of funding for terrorists. They kill elephants to fund terrorist activities in which they kill human beings. 
The need for further regulation of ivory markets was discussed at the Conference of the Parties to CITES, which was held in Johannesburg, South Africa. Although CITES has been ratified, the closure of the markets of consumer countries, such as Japan and China, where there is an existing domestic market for ivory has become one of the considerations. China was condemned for smuggled ivory being available on the domestic market, and President Obama directly appealed Xi Jinping to abolish China’s domestic trade in ivory products. In response, China has committed to the closure of its domestic market of ivory. 
On the other hand, Japanese representatives took the opposite position with regards to banning its existing domestic ivory market, asserting that it is sufficiently managed. I am very concerned that gave an extremely negative impression, but since the international commercial trade ban in ivory in 1990, two legal imports were allowed under the treaty as exceptions and no formal import of ivory has taken place. 
According to the spring 2016 report of the wildlife trade monitoring NGO TRAFFIC, the scale of the domestic market for ivory was about 200 billion yen in 1989, and declined to about 20 billion yen in 2014. The number of ivory dealers decline year by year: 76 companies in 1989 had fallen by half with 37 companies in 2014. 
Market closure will not lead to the prevention of illegal trade 
With regard to the import ban of ivory, in addition to ivory no longer being used in piano keys, it seems that there has been a significant drop in the use of ivory seals even in companies and public institutions. Therefore, the demand for ornamental ivory pieces other than name seals also plummeted. The demand for ivory for use other than for name seals was up to 45% of the domestic market share in 1989, but that has fallen to 20% currently. From this, one can see that 80% of the demand is for name seals. In that sense, one will be able to fully evaluate efforts to prevent Japan from contributing to ivory poaching. 
2000 tons of ivory were imported prior to 1989. This is more than 10 times the current consumption. The importance of the domestic market for distributing this stockpiled ivory cannot be denied. Even if the market were to be eliminated, if there is demand in the first place, there will still exist incentive to carry out trade. Therefore, by simply closing the domestic market, the black market is activated, and there is a concern that trafficking of ivory would be promoted. Conversely, if the market is managed, and traceability is ensured, it would create an environment in which it is easier to catch illegal trade. 
Ahead of the meeting of CITES, in the IUCN WCC, which was held in September, conservation organizations insisted on the immediate closure of the domestic ivory markets of Japan and China. This can be interpreted to mean that it will be more effective to reduce the poaching incentive by closing the markets and eliminating the powerful signal that is the market price. However, in this world of the Internet, if there is demand, it should be natural to assume that the information would be propagated all over the world. 
Above all, measures to reduce demand 
So, what kind of measures are necessary? If regulations were simply strengthened, because it would inhibit the amount of supply, even if it reduces the volume in trade, it will increase the price. I show this in the movement of a simple supply and demand curve. 
By strengthening regulations, the supply curve is shifted to the left, causing volume in trade to decrease. Price will be elevated. This means that despite smuggling being difficult, there would be a huge payoff for any success. It would also lead to concerns of sending distorted signals of a rise in price to smugglers. 
To prevent poaching, one must not only decrease the volume in trade, but also reduce the price and the attractiveness of the ivory trade. To do so, it is first essential to reduce the demand. Figure 2 below shows that by using a strategy to suppress the demand, the demand curve will shift to the left. As a result, not only will the amount of ivory in trade be reduced, but the price will also fall, and to poachers, this will in effect diminish the attractiveness of the ivory trade. 
As noted above, 80% of the current ivory demand is the demand for ivory as a material for name seals. Therefore, if you can reduce the amount of ivory used to make name seals, demand for ivory will be reduced dramatically. To reduce demand for these name seals is the most effective measure. 
There are also fundamental ways to review the Japanese business practice to using name seals. Even new regulations such as ivory name seals not being approved in new seal registration would be effective. Of course, the promotion of the development of alternative materials to replace ivory would also be influential. 
Ensure the reliability of the secondary market 
In addition, the health of the domestic market is important along with the measures to curb demand. Recently, it has been identified that there is a possibility that ivory is being smuggled to destination countries via Japan. There is a great concern that illegal trade has not been eliminated completely. In addition to the reduction of demand, in the form of a prohibition on ivory name seals, further efforts to eliminate the illegal trade will rebuild the trust of the market and contribute to the prevention of illegal trade in ivory. 
Although the past rampant over exploitation of elephants has decreased, the poaching of elephants continues. Global consumption of ivory is decreasing, but is still a problem in the world. Wild African elephant populations have decreased 30% in seven years, and the new problem that elephants have become a source of funding for terrorists cannot be overlooked. 
I want to expect a commitment to soundness of Japan’s ivory trade through the suppression of demand for name seals, restoring confidence in the market through the improvement of traceability and the prevention of illegal trade in ivory. In fact WWF has also ultimately called for the closure of the domestic market, but have first recommended reforms and strengthening monitoring to make Japan’s current ivory market more sound. 
Along with the measures to curb demand, the elimination of illegal ivory in the market, if there is further positive action to seize ivory attempted to be smuggled out of the country, Japan also should be able to contribute to both the eradication of the funding sources of terrorists and the protection of wild elephants.