John Hume's proposed rhino horn auction

 

Credit Thomas Rasmussen @foto by tom

Introduction

John Hume, South Africa’s largest private rhino breeder, has announced his intention to hold an online auction next month of some of his amassed rhino horn stockpile, as well as a physical auction in September, both in partnership with Van’s auctioneers. This is the first such auction that has been advertised, although we expect others to rapidly follow suit if Hume’s ‘test case’ auction goes ahead and is financially successful.

The following discussion therefore focuses on Hume’s planned auctions, but would apply to any other auctions prior to the enactment of new legislation regulating the domestic trade in rhino horn within South Africa.

How will the proposed auctions work?

At the time of writing (27 July 2017), Hume is promoting two auctions of stockpiled rhino horn. Both auctions appear aimed at a global market, in that there are buttons for Mandarin and Vietnamese versions of the main English-language site. According to the auction website, Hume is sitting on more than six tons of horn, some of which will be made available to buy via these auctions.

The website says:

Online bidding opens at 12.00pm on 21 August 2017 and closes as 12.00pm on 24 August 2017. You will need to get a permit by 17 August 2017 if you want to participate in the auction. A physical auction will also take place on 19 September 2017 and 11.00am.

 

Although the details of auction lots are not present on the auction website, reports have circulated in the press about the amount of horn for sale and how pricing will be determined.

According to the Sunday Times, a South African publication:

Van’s Auctioneers spokesman Johan van Eyk said Hume would offer just over 500 kg of rhino horns for sale. The horns would be split into 250 separate lots, mainly sets of front and back horns and some larger individual front horns. A second, conventional auction would be held amid tight security in Gauteng on September 19. Van Eyk said he was not willing to speculate on expected prices, but noted that current domestic black-market prices were considerably lower than end-of-market prices in the Far East.

 

At the time of writing, certain logistics and key information around the auctions are as yet unclear, such as the exact weight of horns in each lot and their condition. It is unclear whether the auction will run for 24-hours per day for three days, or will take place within designated time slots.

There is no information on any limitations to be placed upon on bidders – e.g. in the number, weight or cost of horns that each may purchase. Although the auction website makes it clear that prospective buyers are required to hold a permit – presumably obtained from the Department of Environmental Affairs (DEA) – to buy horn, there is currently no mechanism for potential bidders to obtain these permits; the auction website simply says “Watch this space for more info”. Neither is there any information on whether and how the vendor and auctioneer intend to ‘vet’ potential bidders, though media coverage has speculated the buyers will have to be South African nationals or those with residency status in South Africa. Perhaps the vendor and auctioneer will simply rely on DEA to carry out checks as part of the permit application and approval process? 

 There is no information on how Hume and Van’s will prevent cartels from engaging in price fixing, and whether details of successful bids and bidders will be shared with South Africa’s DEA and law enforcement agencies.

Save the Rhino's understanding is that any horn sellers would also need a permit in order to trade, and that given no permits have been issued, or processes pertaining to acquiring a permit, there is no indication that Hume has a permit to sell.

Save the Rhino’s view on Hume’s proposed auctions

We believe that there are too many unresolved legal questions for the DEA to issue the permits that would allow these auctions to go ahead as planned.

According to Van’s website, it is “accredited and fully compliant with the legal obligations as stipulated by the SA Institute for Auctioneers, the Estate Agency Affairs Board and the Consumer Protection Act.” We are surprised that Van’s auctioneers would choose to take part in auctions that have the clear potential to facilitate laundering rhino horn in the guise of permitted sales.

The information we do have available leads us to oppose the holding of these auctions. At the time of writing, it seems highly unlikely that they will go ahead, given Minister Molewa’s comments at the press briefing on 24 July 2017 (see later).

To avoid further confusion, once the draft domestic trade regulations have been revised and appoved, the DEA should issue full regulatory guidance and clear procedures around the new legal domestic horn trade and permit process for potential horn traders.

Any future trader or auctioneers should endeavour to ensure that, as well as upholding the basic letter of the law, they are going above and beyond to ensure that they do not risk jeopardising CITES’ international ban on trade in rhino horn.

Furthermore, traders who highlight the potential benefits towards conservation from selling their horn stockpiles could benefit from being as transparent as possible about where their funds will be channelled and about the sale’s potential impact upon wild rhino populations throughout Africa and Asia and their threatened ecosystems.

Further information

Who is John Hume?

 John Hume has the largest number of privately owned rhinos in the world, with more than 1,500 animals living on his private ranch in South Africa. Most are white rhinos; a species currently listed as ‘Near Threatened’ by the International Union for the Conservation of Nature (IUCN).

Why does Hume want to auction horn?

According to the auction website, he spends more than $170,000 on security every month caring for and protecting rhinos on his ranch, including security measures such as planned dehorning operations, carried out under a nationally controlled permit system.

Hume has been a long-standing supporter of an international and domestic legal trade in South Africa, and has significant support from other private rhino owners. He has often publicly stated that he believes a legal trade is the only way to stop the poaching crisis and argues that the escalating security costs for rhino owners, and wild rhinos, are unsustainable. He further states that a renewable source horn could one day meet demand from Asia, that a permit system and RhODIS rhino DNA database will prevent leakage of legal horns into the black market, that better law enforcement is unlikely to end the trade alone – especially when throughout history there are examples of prohibition not working – and that the failure of a regulated ivory market is not comparable to the situation with rhino horn, as ivory cannot be harvested without killing elephants.

Moreover, Hume refutes the notion that his and other breeders’ primary aim is to make money from a legal trade, arguing that the costs of rhino protection are currently shouldered by private owners and that funds generated from his horn sale will go back into conservation. Hume has previously made a public offer to train local communities in poor, rural areas to breed rhinos.

South Africa’s complicated position on domestic horn trade

Whereas the international trade in certain wildlife products is regulated by CITES, CITES’ signatories are able to determine whether or not they allow internal, domestic trade according to the laws of the country. Until 2009, South Africa had allowed a domestic trade in rhino horn, even though the international trade had been banned in 1977.

But, following the dramatic increase in rhino poaching in South Africa from 2007, in 2009 the Department of Environmental Affairs placed a moratorium on domestic sales of horn, in part due to concerns about sales of horns from private sector then entering the black international market. Not everyone was pleased, and John Hume and Johan Kruger brought a test case against the moratorium.

On 26 November 2015, a judge lifted the moratorium on the domestic trade in rhino horn in South Africa, after finding that the state had not followed due process regarding public consultation before imposing the moratorium. The ruling was delivered in the Pretoria High Court after two South African game breeders had fought a legal battle to try to overturn the moratorium. John Hume and Johan Kruger, who had launched the legal action, argued that it was their constitutional right to sell rhino horn, which they describe as a renewable resource. Shortly after the ruling was made public, the South African Minister of Environmental Affairs announced that the government would appeal the court's decision. This meant that the judgement was suspended and the ban would remain in place until the appeal was heard.

On 20 January 2016, the South African High Court dismissed the government’s application to appeal the earlier ruling lifting the moratorium on the domestic sale of rhino horns. The Environmental Affairs Minister, Edna Molewa, appealed the ruling at the Supreme Court of Appeal, and then the Constitutional Court. As a result, the ban was temporarily, upheld.

However, on 5 April 2017, the Constitutional Court formally dismissed the appeal by the Department of Environmental Affairs to keep the domestic ban in place, effectively legalising South Africa's domestic trade in rhino horn.

Prior to that, and in recongition that there would need to be a Plan B if Plan A (upholding the moratorium failed), on 8 February 2017, the Republic of South Africa had published Draft Regulations for the Domestic Trade in Rhinoceros Horn, or a Party, Product or Derivative of Rhinoceros Horn, with a window for comments ending 9 March 2017. At a press briefing on 24 July, the Department of Environmental Affairs’ (DEA) Honourable Minister Molewa confirmed that the draft regulations were still being reviewed by the DEA:

“The draft regulations contained a number of specific provisions relating to the export of rhino horn for non-commercial purposes, such as personal use, hunting trophies, research or education as training as provided for the Convention on the International Trade in Endangered Species of Wild Fauna and Flora (CITES).”

She further underscored that in order to be in possession of a rhino horn a permit is needed, in keeping with the National Environmental Management: Biodiversity Act 2004 (NEMBA) as well as applicable provincial conservation legislation. Minister Molewa further drew attention to the fact that the requirements for the legal export of rhino horn will include inter alia:

  • The horn must have been subjected to DNA profiling
  • The horn must be marked by means of a microchip and a ZA-serial number (as prescribed in the TOPS Regulations
  • The information of the owner of the rhino horn, and information relating to the marking of the rhino horn, must have been recorded in the national database
  • A CITES export permit, which also needs to make provision for the export as a Threatened or Protected Species (TOPS) specimen, that has to be endorsed at the port of exit prior to exportation

Minister Molewa further emphasised that to facilitate the national coordination of permits for the domestic trade in rhino horn:

I personally will be the issuing authority for permit applications relating to the selling and buying of rhino horn within the border of this country. However, this arrangement is dependent on the written agreement of the MEC’s responsible for the conservation of biodiversity in the nine provinces… This cannot be emphasized enough – the commercial international trade in rhino horn remains strictly prohibited in terms of CITES. That is correct, Ladies and Gentlemen, prohibited. South Africa is a signatory to CITES. The draft regulations published for public comment relate to a proposed domestic trade. We sincerely hope that in our reporting you will do a service to your readership and listenership and emphasize this distinction so that we do not sow confusion.

 

Save the Rhino’s position on potential international trade in rhino horn

All international trade in live rhinos and rhino horn is regulated by CITES. At present, no international trade in rhino horn is allowed apart from certain provisions around the export and import of trophy horns.

In principle, Save the Rhino supports sustainable use. This means that we are not ethically opposed to the use or sale of animals in a sustainable way – as long as this does not negatively impact on the population as a whole or cause pain or suffering to the animal.

 We are not, therefore, ethically opposed to the horn trade, as horns can be removed without harming rhinos (though this is not to say that dehorning is simple). Our concerns, however, are based on whether the horn trade could be put into practice without threatening rhino populations in Africa and Asia. As such, Save the Rhino has not yet reached a conclusion on whether an international trade is workable or not long-term. We are considering the factors influencing this and the circumstances that would need to be in place to ensure that international trade would be beneficial to rhino conservation.

However, we currently do not believe, based on the evidence available, that the required checks and balances are in place now, or are likely to be in the near future, for a legal horn trade to be regulated successfully and without leakage into a black market – potentially fuelling further demand.

Save the Rhino’s position on domestic trade in rhino horn

Given the number of interceptions of illegal rhino horn that have been smuggled out from South Africa (which can only be a fraction of the total figure), the question of whether South Africa could effectively regulate a domestic trade that does not impact on efforts to curb the illegal international trade is very much a moot point. It is recognised that enforcement agencies are already over-stretched without having to try to manage parallel legal and illegal trades.

Anyone caught in possession of rhino horn could, for example, claim it had been legally purchased via auction and that they had simply misplaced their permit. It is unlikely that South Africa’s legal system, with its existing case backlog, would have many options except releasing the suspect on bail to await presentation of the correct paperwork and DNA testing, rather than being held in custody for suspected rhino poaching. A related and critical question is whether RhODIS has capacity and is sufficiently funded to respond to the increased needs generated if domestic sales become routine now that the moratorium on domestic trade has been lifted. It could be the case that costs are pushed further onto already-stretched enforcement agencies.

According to draft legislation published by the DEA, a loophole will allow a foreign national with relevant paperwork to export two rhino horns across South Africa’s borders as long as the rhino horn is intended for “personal use”. Allowing export of horn for personal use implicitly lends credibility to the idea that rhino horn has a medicinal or status value, which is not supported by sound science and undermines demand reduction work in Asia. Vietnamese and Chinese law enforcement agencies’ jobs will be made significantly more difficult if they must distinguish between horn exported from South Africa under the guidelines in the draft domestic trade regulations, and horn being illegally transported to consumer countries.

In summary, Save the Rhino cannot see how a domestic trade within South Africa could be managed without enabling further leakage into the Asian black market for rhino horn.

27 July 2017

(5) Comments

  • Laura Savill
    28 July 2017, 10:54

    I am appalled to read about this auction. It should not happen it will only encourage the slaughter of more rhino. It will never be contained just within South Africa and there does not appear to be correct legislation to stop this horn going into the Asian market.

  • Chris Dunford
    28 July 2017, 11:48

    I can't believe anybody with even a moderate IQ can actually believe that these proposed regulations will help stop the rhino poaching business. It will be like putting coals on the embers of the fire, as it was when the 'one off' ivory sales were made in 1999, 2002, and 2008. Oh yeah there were three of them. Look where they got us.

    My plan for selling a rhino horn to the black market will go like this: I buy one legally at auction 'to display on my mantlepiece at home'. I give it a few months and then report it stolen. Once the police have taken statements etc, I have a late night visitor at my back door and it's 'thank you Mr Chan, pleasure doing business with you'.

    Regulations will only deter law abiding citizens. Others do not care whether it's registered, DNA tested or painted in candy stripes. There is a market out there.

    But the mighty $$$ always wins against conservation. I wonder how much of Mr Hume's money will go towards rhino conservation in other countries, all of which will suffer the ill effects of this auction. Perhaps the government should take 50% conservation tax, if it must go ahead. A sad day for rhinos.

  • Michael 't Sas-Rolfes
    28 July 2017, 13:07

    Thank you for that detailed and interesting account of your views. This is certainly a challenging topic. However, there is one aspect of your posting that puzzles me and it relates to your final point that domestic legal trade within South Africa will most likely enable further leakage of horn into the Asian black market. My question to you is this: if our ultimate objective is to reduce the poaching of wild rhinos, then why would this matter? Rhino horn trade is illegal within China and Vietnam and will most likely remain so. Imports to those countries will also remain illegal unless either country issues CITES import permits for purposes of personal use, which they are most unlikely to do (and certainly not on any meaningful scale). So I can't see how law enforcement in Asian countries would be compromised in any way. Therefore, the only 'problem' I could see here is that additional sustainably harvested horn reaches Asian end users via illegal channels. But how and why would this specifically be a bad thing for wild rhinos? I'm curious to know your thinking on this. Please note that I am not trying to be provocative or start a heated debate, nor arguing in favour of what is currently happening in South Africa, but merely trying to understand your view on this one very specific point. Thank you!

  • Cathy Dean
    31 July 2017, 14:22

    Mike, thanks for your question.

    Your comment doesn't mention the immediate challenge facing South African law enforcement agencies of dealing with the likely increased movement of legal rhino horn within the country and distinguishing that from illegal horn. (Who'll pay for the associated cost of the additional police / permitting resources required?)

    Secondly, we're surprised that the pro-trade lobby is not bending over backwards to ensure that any form of domestic trade does not allow leakage into the illegal market; instead there seems to be tacit acceptance that this will happen, together with a denial of responsibility.

    (For example, see Bryan Christie's article in NatGeo, which includes the following quote from Dawie Groenewald on the likely buyers of rhino horn: "“Who cares what they do with it? If they want to take it illegally out of the country, it’s their problem.” http://www.nationalgeographic.com/magazine/2016/10/dark-world-of-the-rhino-horn-trade/)

    Presumably, for the pro-traders, the pot of gold at the end of the rainbow is the hope that, one day, CITES will approve a South African proposal to legalise the international trade in rhino horn: cut out the middle men and sell direct for bigger bucks. Doesn't the likelihood of CITES ever approving such a move recede with every seizure of illegal horn made via a poorly managed and policed domestic trade? Why aren't the pro-traders working more proactively to prevent every possible risk of leakage via domestic trade in order to support their longer-term goal of international trade?

    And lastly, we don't understand your implied point that leakage will reduce the poaching of wild rhinos. Given the mark-ups applied at different points along the illegal supply chain, the criminal syndicates must have some flex with their pricing and be in a position to undercut the prices charged via domestic sales. Unless the private rhino owners are planning to cap the maximum price per kg of horn they sell, in order to closely match current poaching-payment levels and re-calibrate the risk / reward equation of poaching vs auction purchases?

  • Michael 't Sas-Rolfes
    31 July 2017, 22:27

    Cathy, thanks for your response to my question.

    I did not intend to delve into the other issues that you raise, but rather focus on the question of whether horn leakage threatens wild rhinos. However, I do think they are relevant and this discussion is useful, and so here is my response to each of your points.

    First, yes, South African law enforcement agencies will be challenged, but they are already severely challenged under current circumstances and this may be an opportunity to test whether traceability measures such as DNA profiling and micro-chipping work effectively for supply chain monitoring and management at a domestic level.

    Second, I don’t think the pro-trade lobby speaks with one voice. Some are certainly keen to ensure there is no leakage; others might believe that leakage is not such a bad thing, as it might deflect some of the demand for freshly poached horn. Also, I doubt that they all deny responsibility, but many probably feel that the government ought to take the lead on enforcement (as does the government itself). Dawie Groenewald can hardly be regarded as a credible leading spokesperson for the pro-trade lobby.

    Regarding your third point, I think pro-traders might have mixed views on the relevance of CITES. I suspect that some have simply written CITES off, skeptical that it 1) is an effective and credible mechanism for conserving certain types of high value endangered species, and 2) that the parties will ever agree to international legal trade. This is unfortunate for those who wish to follow all the right procedures and play by the CITES rules, but there are clearly others who have no faith in, or patience with, extensive international regulatory bureaucracy.

    But these three points above detract from the issue on which my original question was focused. To be clear, I did not intend to imply that leakage would reduce the poaching of wild rhinos (although others certainly believe that it would). I was simply questioning whether the reverse is necessarily true – i.e. that leakage further threatens wild rhinos. This is a general proposition I encounter frequently regarding endangered species, e.g. ivory stockpile leakages threaten wild elephants, tiger farms threaten wild tigers, commercial captive lion breeding threatens wild lions and tigers, etc. These arguments, implying that any form of supply somehow further stimulates demand, are currently very popular, but there doesn’t appear to be much solid empirical evidence to support them. Hence my interest in understanding the motivations for this world view.

    I regret that I do not quite understand your final point either. There has been much speculation about the market power of criminal syndicates – again, with limited empirical evidence to support or refute it. This is also an interesting issue, but I am not quite sure how it relates to my question about supply allegedly stimulating demand.

Add a comment

Your email address will not appear on the site
(Tick to hide your name when this comment appears on the site)
Save the Rhino have recently received a large amount of spam. To check you are a real person, we have had to introduce a human-ness question.
Please wait...