The criminals making millions from illegal wildlife trafficking

Exclusive: Investigation uncovers the ringleaders profiting from $23bn annual trade in illicit animals after more than a decade of undercover surveillance
Oliver Holmes in Bangkok and Nick Davies The Guardian 26 Sep 16;

A major investigation into global wildlife crime today names for the first time key traffickers and links their illegal trade to corrupt officials at the highest levels of one Asian country.

The investigation, published by the Guardian, exposes the central role of international organised crime groups in mutilating and killing tens of thousands of animals and threatening to eliminate endangered species including tigers, elephants and rhinos.

The in-depth reporting identifies suspected traders across several continents, from South Africa to Thailand and in the markets of China, where animal parts are used in traditional medicines.

For the past year, the Guardian has worked with independent investigators at Freeland, an anti-trafficking organisation that has been providing information and analytical support to a Thai government surveillance team.

In the absence of effective international attempts to block the business, Freeland has agreed to give exclusive access to intelligence it has accumulated over 14 years that identifies primary traffickers.

It points to two Vietnamese siblings, the Bach brothers, as key suspects who control a primary smuggling route for endangered animals.

Separately, the Guardian will on Tuesday report on evidence it has that suggests the industry has political support across several countries, and that one state even collects a 2% cut from the gross value of illegal wildlife imports.

The series is published during a crucial conference in Johannesburg, which opened on Saturday. The 182 nations who have signed the Convention on International Trade in Endangered Species (Cites) are debating the future of animals that are being wiped out by a criminal industry.

The global body is tasked with regulating international wildlife trade, but has no enforcement powers, meaning the slaughter of endangered species and their sale for profit continues unabated.

Worth $23bn (£17.5bn) a year, animal trafficking is the fourth most lucrative black market industry after drugs, people and arms smuggling. But in contrast to those industries, international law enforcement has proven inadequate.

Many iconic animals are heading toward extinction: only 30,000 rhinos are alive today, 5% of the number four decades ago. About 1,000 are killed by poachers annually – and that figure has risen each year in the last six.

Elephants are being killed in even greater numbers: 20,000 for their tusks last year alone. Tigers, currently numbering 3,500 in the wild, are also in imminent danger.

But smaller animals, too, are facing extinction. Scaly anteaters, called pangolins, are shipped live in fishnet bags across borders for their scales, which are believed by some to help mothers breastfeed. Several vulnerable sub-species of turtles, pythons, antelopes and birds are also in sharp decline.

Freeland’s findings, together with police documents and interviews as well as surveillance footage and bank transfer statements, show the Bach brothers have dramatically scaled up their operations in smuggling these animals during the past three years.

Until today, international attention had been focused almost solely on a Lao man called Vixay Keosavang, who was assumed to be the kingpin of the trade and known as the Pablo Escobar of wildlife trafficking.

But this week’s investigation reveals how Keosavang appears to have removed himself from the trade in 2014 after the US government put up a $1m reward to end his operations, the only monetary reward ever offered for a wildlife trader.

Meanwhile, the role of the Bach brothers has, until now, remained unexposed. And while running their operations discreetly from a Thai town on the border with Laos, they are gathering huge profits from the deadly trade.

Well-known locally for their criminal activities, which also include vehicle smuggling, the Bachs run legitimate businesses in wholesale agriculture and forest products, construction materials, electrical equipment, hotels, and food services.

The siblings base their operations in Nakhon Phanom, a rural region on the Thai side of the Mekong river that marks the border with Laos. They own multiple properties, including warehouses, apartment buildings, and a fleet of expensive vehicles. Their suspected headquarters is built like a fort, covered almost entirely in a cage of metal bars.

Their cars, which have their licence plates routinely changed, are moved across the border. One vehicle was filmed with a bespoke deep-set trunk that investigators believe provides hidden storage.


Revealed: how senior Laos officials cut deals with animal traffickers
Evidence obtained by the Guardian shows how treasury coffers swelled with 2% tax on trades worth up to $45m including tigers, rhinos and elephants
Nick Davies and Oliver Holmes The Guardian 27 Sep 16;

Officials at the highest level of an Asian government have been helping wildlife criminals smuggle millions of dollars worth of endangered species through their territory, the Guardian can reveal.

In an apparent breach of current national and international law, for more than a decade the office of the prime minister of Laos has cut deals with three leading traffickers to move hundreds of tonnes of wildlife through selected border crossings.

In 2014 alone, these deals covered $45m (£35m) worth of animal body parts and included agreed quotas requiring the disabling or killing of 165 tigers, more than 650 rhinos and more than 16,000 elephants.

Trading in all three of those species is prohibited by Lao law and the Convention on International Trade in Endangered Species(Cites) which came into force in Laos in 2004. The Lao government has publicly paraded its commitment to the convention.

The Guardian’s evidence indicates that the agreements have yielded a profit of hundreds of thousands of dollars for the Lao government treasury. The extent of the knowledge of the prime ministers is not known.

The Guardian contacted the Lao government three times last week detailing the findings and attempted to obtain comment for the story. A member of the foreign ministry’s media team confirmed the request, sent in English and Lao, had been received. However, no response to the allegations was provided.

Separately, Lao agriculture inspectors have submitted official reports about farms run by two of the traffickers, clearly stating that their own government has given approval for the farms to illegally kill captive tigers to be sold for their bones, skin and claws.

The Lao government failed to act on these reports until last week, when it announced it was planning to shut down all commercial tiger farms in its territory. Its announcement did not acknowledge its own historic role in approving them.

The involvement of a national leader’s office is one particularly big link in a global chain of exploitation that binds the supply lines of illegal wildlife trafficking.

Steve Galster, executive director of the anti-trafficking campaign group Freeland, said: “This is a public-private partnership with law enforcement agencies acting as partners to crime syndicates.”

‘Nobody can arrest him in Laos’

Laos is a key country in the global wildlife trade. Its wild areas and farms are home to animals that are supposed to be protected from commerce. And it is a crucial transit country for animal goods travelling illegally along well-trodden smuggling routes from Africa and other parts of Asia.

The Guardian has already exposed the role of the Bach crime family in running a gateway for the smuggling of animal products from Thailand through Laos into the lucrative markets of Vietnam and China. Three Lao companies who were also named yesterday by the Guardian have been deeply involved in the traffic, both legal and illegal. Our evidence shows that each of them has been supported by deals with the Lao government.

The earliest deal that we have seen involved the Xaysavang Trading Company, which was established in October 2002 by a Lao businessman, Vixay Keosavang. He is “so well protected that nobody can arrest him in Laos”, according to a source who has worked closely with Keosavang.

A report by Thai intelligence, seen by the Guardian, shows Keosavang signed formal agreements with the finance department of the Lao government that allowed his company during 2003, its first year of business, to traffic more than $11m worth of animals through the country into Vietnam and China to be eaten in restaurants, displayed as decoration or blended into supposedly medicinal tonics.

These agreements granted Keosavang permission to trade twelve different species including crocodiles, monkeys and pangolin anteaters; the skins of 100,000 pythons; 250 tonnes of soft-shelled turtles (which would mean killing about 45,000 of them); 100 tonnes of dogs, which are commonly cooked in Vietnamese restaurants; 1,000 magpies; and 20 tonnes of animal bones, which are used in supposedly medicinal wine.

The agreements called for Keosavang to pay a tax of 2% of the value of the transactions – 4% in the case of the python skins – yielding $246,550 for the Lao treasury. These 2003 agreements appear not to have broken Lao or international law, which came into effect soon afterwards. However, they set a precedent for future animal trades.

Keosavang’s business survived and thrived for 12 years in spite of a torrent of evidence that should have led to his arrest. Nobody in Laos lifted a finger when Kenyan police, in July 2009, seized 280kg of ivory from Mozambique that was clearly labelled with his company’s name as its destination; nor when other illegal consignments were intercepted in Bangkok on their way to him in November 2010 and February 2011; nor when his right-hand man in Africa, Chumlong Lemongthai, was arrested in June 2011 and later sentenced to 40 years in prison, despite a welter of evidence that Keosavang was his biggest customer.

Freeland, an anti-trafficking campaign group, passed detailed information about Keosavang to authorities in Thailand, Vietnam and Laos variously in 2003, 2006, 2009, 2011 and 2012, and also to Interpol and the CITES secretariat in Geneva.

Finally, in March 2013, they passed it to the New York Times, which exposed him on their front page, quoting Freeland’s executive director Steve Galster as saying Keosavang was “the Pablo Escobar of wildlife trafficking”. That finally provoked the Thai police into denouncing him as “the big boss” and, a few months later in November 2013, the US government offered a $1m reward for information that led to the dismantling of his syndicate.

Yet still the Lao authorities did not arrest Keosavang, who continued to bring in animal parts from southern Africa. Finally, in January 2014, the Lao government revoked his licence to trade wildlife. By that time, however, the Lao prime minister’s office had silently snubbed the international community by signing off on more agreements to help two other companies replace him.

The Guardian has had access to compelling evidence that in December 2013 the then Lao prime minister’s office ordered four government ministries and two provincial governors to help these companies traffic wildlife with huge annual quotas. The agreements were worth a fortune – up to $30m in a single month for one company – with the government once again taking its 2%. Unlike the original deal with Keosavang, these agreements specifically sanctioned the sale of the three iconic species that are closest to extinction as a result of this trade: tigers, rhinos and elephants. And in vast quantities.

One company, Vinasakhone Trading, was authorised for the calendar year 2014 to traffic $16.9m of animal products through Laos. This included 20 tonnes of ivory, valued at $5m – a straightforward breach of international law. The Environmental Investigation Agency in London estimates that one elephant yields an average of 6.7kg of ivory, meaning that the Lao government that year was allowing Vinasakhone to trade on the criminal death of 2,985 dead elephants. The quotas also included 10 tonnes of lion bone, which is used in tonic wine; and 1,300 tonnes of live turtles, snakes, lizards and pangolin ant-eaters whose scales are used in traditional medicine – all of it potentially illegal by breaching CITES quotas.

The other company, Vannaseng Trading, was authorised to traffic even more. In ivory alone, according to our evidence, the government agreed that during 2014 they could traffic 90 tonnes of ivory with an estimated value of $22.5m. That equates to 13,432 elephants lying dead in the African bush; also 4 tonnes of rhino horn that was valued at only $240,000; and 20 tonnes of tiger skin and bone and claws worth $1.2m. All of that trade in all three of those species is illegal.

Also agreed was potentially illegal trade in live turtles, water monitors, pangolins and exotic birds; 6 tonnes of python skin and 120 tonnes of dead and frozen pangolin. The total package agreed with Vannaseng for 2014 was worth $28.2m – all to be officially taxed at 2% for the government’s treasury.

Both Vinaskhone and Vannaseng have a track record of wildlife crime. Until last week, the Lao government had failed to take action against them even though some of this crime has been recorded in internal government reports.

When inspectors from the Ministry of Agriculture checked the companies’ farm records in October 2014, they found that so far that year, they had traded a combined total of 7.7 tonnes of lion and tiger bone. At least some of that trade must have been illegal. All international trade in tiger bone is illegal under Cites; trade in lion bone is allowed only if it is covered by Cites permits. Even if the entire 7.7 tonnes was lion bone, at an average weight of 10kg per skeleton that would represent 770 dead lions. But Cites records show that during the whole calendar year of 2014, Laos had permits to import the skeletons of only 360 lions.

If there was any doubt, the inspector’s report explicitly accused both farms of breaching Cites by importing and exporting endangered species without having any paperwork to show that it was within legal limits. Crucially, the inspectors added that the law could not be enforced against them “because they have got approval from government”.

In March this year, inspectors from the Ministry of Natural Resources went to the farm run by Vinasakhone since 2002 near the town of Thakek in central Laos. According to the report, seen by the Guardian, the farm, which houses about 400 tigers in pens, is involved in speed-breeding – using females as young as two years old to produce cubs twice each year. The inspectors note that this is regarded as bad practice. But their report goes on to make a much more serious allegation: that Vinasakhone has been killing its tigers to order for sale to Vietnam and China – a brazen breach of the law.

The report says: “Traders usually come to the farm to select the animal they want, take pictures and record an identity. The selection is whether that animal is pretty, pretty teeth, paws and tail, basically no scar on its body. The animal is killed at the farm by injection, all intestines are removed so they keep only the body with skin, bones and meat, covered with plastic sheet for shipment.”

The report adds that Vinasakhone managers admitted selling a hundred tigers to the notorious Golden Triangle on Laos’s borders with Myanmar and Thailand. A 2015 investigation by the Environmental Investigation Agency described this area as “a playground catering to the desires of visiting Chinese” where “a combination of weak laws, poor enforcement and official complicity allows the illegal wildlife trade to flourish”. The EIA found traders openly selling tiger skins and stuffed tigers while restaurants sold bottles of tiger bone wine and ”sauteed tiger meat”. All are illegal.

The inspectors noted that Vinasakhone’s farm had originally been given a permit to breed tigers for scientific research but that it was “exactly not” being used for that purpose; and that the commercial sale of tigers, including those bred in captivity, is “illegal according to international law (CITES) and also to the law of Laos”. And yet in a further act of criminal collusion, it also recorded that the Lao government had granted the farm permission to sell up to 100 tigers a year.

By contrast, in its public pose, the Lao government in 2010 solemnly reported to Cites that “the potential threat to wild tigers caused by tiger farms is very high” and warned that they must not legalise any trade in the products of tiger farms because this might “allow smugglers to exploit loopholes and take opportunities to sell wild tiger products”. Last week, at the international Cites meeting in Johannesburg, the Lao delegation announced a significant change of approach, saying that its government would close down any facility that kept and bred tigers for any commercial purpose.

Vannaseng Trading has run its tiger farm since 2002, outside the town of Thaphabat, 80km (50 miles) east of the capital, Vientiane, where it is believed to keep about 200 tigers, as well as turtles and bears. In March this year the company successfully refused to allow the inspectors to visit to check on their compliance with the law.

However, Vannaseng did give the inspectors access to a second farm where they found some 6,000 macaque monkeys waiting to be sold to China or the US for medical experiments. In their report, the inspectors said they suspected the farm had been involved in the illegal purchase of monkeys captured in the wild. This echoed a 2010 report by the the British Union for the Abolition of Vivisection, which published emails in which the manager of the farm said that the business had been started with monkeys caught in the wild in Cambodia and smuggled into Laos, adding that he was planning to apparently break the law again by bringing in more wild monkeys in the near future.

Laos remains a full member of Cites, although it was briefly suspended early in 2015 for failing to to deliver a national plan to deal with the ivory trade. It then delivered the report and was re-instated only to be suspended again in January this year for failing to submit a second report on implementing the ivory plan. A special CITES mission, led by their chief of compliance, visited the country in June. At that time, a source who has been closely involved with the two companies told us: “The government has told them to lie low, to start work again in a few months.”

The Guardian’s evidence does not establish the extent to which any individual prime minister may have known about the actions taken in his name by some of his officials. The office of the Lao prime minister failed to respond to a request for comment.

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