Business was brisk one day last July at Voraphot Harnsawat's private zoo near Bangkok. The South Korean tourists that had just alighted weren't there to look at exotic animals, though: They planned to eat them. Lunch fell through when the police showed up. They liberated two tigers, six leopards, and 67 deer of various types--all endangered species awaiting slaughter--and seized a refrigerator of paws from rare Asiatic black bears.
The bust was part of a campaign to end Thailand's role as the world hub of illegal wildlife trade. In the 1980s, with help from their government, Thai dealers laundered shipments of everything from rare orchids to South American caimans and Indonesian orangutans. They got papers for these in Bangkok, then sent them to zoos and traders in Japan, Europe, and South America. But last year, foreign governments and environmentalists took a stand.
`KAPUT.' The U.S. and three European countries threatened to ban $1 billion in legitimate imports of Thai flora and fauna, while British activists vowed to boycott Thailand's $3 billion tourism industry. Soon after, the Thai government said it would outlaw commerce in the 1,000 species covered by the 112-nation Convention on International Trade in Endangered Species (CITES). The Thai legislature passed the ban in January and has arrested hundreds of alleged traffickers. "For now," says Kurt Schaefer, a former Bangkok bird trader, "Thailand is kaput as a trading place."
Around the globe, setbacks have been dealt recently to the $5 billion annual trade in exotic plants and wildlife, one of the most lucrative and loathsome of businesses. A 1990 worldwide ban on ivory imports has slowed the slaughter of African elephants, whose number had dwindled by 53%, to 610,000, in just five years. In 1991, Japan banned imports of shells from endangered hawksbill sea turtles, which were used for eyeglass frames and jewelry boxes. Taiwan, a major user of exotic animal parts for traditional medicines, has begun enforcing a ban on rhinoceros horns. And Congress may soon limit trade in exotic birds. The U.S., the world's No. 1 importer, brings in $10 million worth annually.
Such measures face a tough test this month in Japan. The members of CITES have gathered in Kyoto to review the treaty in a meeting that will last until Mar. 14. Some countries will push for stiffer measures against the black-market trade. But several African nations will argue that the elephant population is now at a safe level, and they'll demand a revocation of the ban on ivory. Opponents contend that if any trade is allowed, the price of ivory will soar, stimulating a resurgence of poaching. An equally contentious issue will be bear gall bladders. Demand for the organs has precipitated poaching of U.S. bears.
Some CITES members dismiss trade bans because they don't always cut demand. Even though CITES prohibits trade in endangered orangutans, for instance, a pet orangutan is a status symbol in affluent Taiwan. Eastern European zoos, which can't afford primates bred in captivity, buy them from smugglers. And in Chinese and Korean communities worldwide, remedies using bear gall bladders, tiger penises, rhino horns, and oil from Himalayan musk deer are often preferred to modern drugs. "This trade has gone underground," says Keith Highley, Taiwan director of environmental group Earthtrust in Honolulu.
The business is resilient because it's so lucrative. Consider the Senegalese parrot. A trapper gets $1 for this bird from an African wholesaler, who sells it for $6 to a European wholesaler. The European sells it for $60 to a retailer, who charges $150. Similarly, the skin of a caiman, bought from a Venezuelan poacher for about $2, fetches $400 in Japan, where it's used to make leather goods such as handbags. Last year, CITES investigators uncovered a smuggling ring in Thailand that brought in more than $60 million a year from skins. In China, a live bear can fetch $1,200. But sell its parts, and the profits multiply: Bear gall bladders, used to treat fever and chronic liver illness, can fetch $15,000 a pound in Asia.
QUOTA SYSTEM. Several schemes are being tried to blunt the profit motive. They include breeding exotic animals in captivity and developing substitutes for Oriental medicines. Controlled harvesting also has been successful in parts of Africa, where native populations rely on wildlife for meat and hides. For instance, the Zambian government works with tribes in the Kafue Flats region to prevent poaching of antelope. Local hunters have an annual quota and also run hunting and sightseeing concessions for tourists and foreign hunters. This gives the locals a vested interest in the survival of the species. Indonesia and Thailand, meanwhile, want to restrict trading in crocodiles, bears, monkeys, and parrots to those raised on monitored farms. Indonesia has licensed three monkey breeders and 20 crocodile farms.
Still, each approach has drawbacks. Take controlled harvesting. Indonesia lets traders capture 20,000 wild cockatoos of a particular variety each year, a low enough figure, theoretically, to sustain the population. Trouble is, for every cockatoo that reaches market under the legal quota, four others die in the process. "The legal trade is as bad as the illegal trade," says Schaefer. And Indonesian enforcement is woeful. "There are too many ports, too many islands, and too few people watching," says Russell Betts, manager of the Indonesian office of the World Wildlife Fund (WWF).
Captive breeding is controversial, too. Some experts fear that it could legitimize trade in exotic animals--and boost demand. It is economically impossible to breed animals such as giant pandas, rhinos, and gorillas. It also costs less to grab a tiger cub from the wild. "The only way to make poaching uneconomic is to flood the market with tigers and drive down the price," says David Melville, director of the WWF's Hong Kong office.
Policing the farms is tough. How do you tell a farm-bred animal from a captured one? One way, genetic testing, is too expensive to use. Already, Thai authorities have found that some farms are laundries for traffickers: Thai farms raised some 6,000 caimans in 1988--but exported 750,000 skins.
MIXED GRILL. The bust of Voraphot Harnsawat's operation revealed the farm/trafficker link. Voraphot, who didn't respond to BUSINESS WEEK inquiries, claimed in Thai newspaper reports that his 10-building enclave near Bangkok was a wildlife refuge. Police say it was a slaughterhouse. Animals were smuggled in by trawler from Cambodia and Myanmar, according to the Bangkok Post. After they were killed, usually by strangulation or drowning, their parts were processed for Chinese medicines.
Because of the raids, some Thai dealers have moved to Cambodia and Vietnam, which don't belong to CITES. And dealers still find supplies of animals in Indonesia and China, where enforcement is lax. When investigators from the British-based wildlife protection group TRAFFIC recently visited a village in coastal Fujian Province posing as Taiwanese buyers, they were led to a chicken farm. Its stock included pelts of a Manchurian tiger, of which only 20 are left in the wild, and of two giant pandas. In China, killing either is a capital offense. Yet dealers seem undeterred.
The Asian preference for ancient cures and aphrodisiacs is partly to blame. Most tiger species are near extinction, but tiger penises are available, for up to $25,000 a pound, in markets such as Taipei's Di Hua Street. Men soak them in brandy and take a slug before sex in hopes of harnessing the animal's libido. For such buyers, "you will never price a tiger penis out of the market," says Chris Brent-Kelly, a Hong Kong animal-parts broker who says he doesn't deal in endangered species.
The same can be said for rhino horn. Most of the 11,000 remaining rhinos are protected in Africa and Asia. Yet poachers kill hundreds annually for their horns, which sell for $1,500 a pound. Most go to Chinese pharmacists, who grind them into pills to treat fever and congestion. Rhino horns are still legal in South Korea and Vietnam. They're also available on the black market in Taiwan and China, where they are banned.
SUBSTITUTES. If Asian devotees won't abandon ancient remedies, the WWF hopes they'll accept substitutes. A 1991 study at Chinese University of Hong Kong concluded rhino horn pills are as effective as aspirin in controlling fever. But so are pills from cow and water buffalo horns. The WWF hopes Chinese doctors and consumers will take heed.
But for now, the most effective strategy is pressure on countries involved in animal trafficking. The global ivory ban has been so successful just 55 elephants were poached in Kenya last year, vs. 5,000 in 1990 alone. The reason is simple economics: With no market for finished products, the wholesale price of ivory has plunged from $23 a pound to $1.35. To achieve the same protection for other species, activists say, inter-national development agencies and the World Bank should finance the preservation of animal habitats. But even if CITES continues to support restrictions orbans on trade, endangered wildlife face a precarious future. As long as humans insist on using them for pets or dinner entrees, for medicine or for pelts, none of these species is safe.
THE FATE OF EXOTIC WILDLIFE Each year, several million animals from some 1,000 threatened species are trapped or killed for the following markets: ASIAN MEDICINE Millions of Asians rely on bears' paws and gall bladders, tiger penises, rhinoceros horns, and dozens of other animal parts for everything from treating the flu to enhancing their libidos FOOD At restaurants in Asia and Europe, gourmet dishes include bear-paw soup, monkey brains, and steaks from endangered deer PETS AND DISPLAY Exotic species, especially primates, birds, and cats, are prized as pets around the globe. The U.S. annually imports an estimated $10 million worth of exotic birds, while in Taiwan orangutans are a status symbol. Especially in Eastern Europe and Latin America, zoos that can't afford to buy animals bred in captivity often turn to smugglers SKINS Each year, millions of endangered mammals and reptiles are killed to supply pelts for clothing and skins for shoes and purses DATA: CONVENTION ON INTERNATIONAL TRADE IN ENDANGERED SPECIES, BW ALBERTO MENA/BW