Around the world, criminals are profiting from environmental destruction, driving climate change, and getting away with it.
Industrial-scale illegal gold mining by Chinese syndicates is destroying biodiversity and displacing communities from Ghana to French Guiana.
Major producers in Indonesia of palm oil, pulp and paper products have committed to ending deforestation, but continue cutting down swathes of forests on the sly.
And the illegal trafficking of wildlife is putting endangered species at risk of extinction.
All told, environmental crime – often fuelled by corruption – is now the third most profitable criminal sector in the world, generating illicit annual gains of up to $281 billion and growing by 5-7% a year.
The UK could do much more to stop this by creating a new sanctions regime to target environmental harms.
The UK’s role in environmental harm
Deforestation in the Amazon may feel far removed from the skyscrapers of London, but the reality is that the UK too often enables environmental destruction and those who profit from it. In fact, illicit financial flows from these activities are frequently laundered here and likely account for some of the £100 billion the National Crime Agency assesses could be washed through the UK each year.
Meanwhile, criminals exploit the financial and corporate secrecy available in the UK’s offshore territories to place their profits from environmental harm beyond the reach of law enforcement, as revealed in this brilliant investigation by our friends at The Gecko Project.
UK business also plays a role in environmental harms. The UK financial sector is the world’s third-largest investor in deforestation projects, and UK-based companies’ engagement in environmental destructive activities overseas is well-documented.
The accountability gap for environmental crime
Current levels of enforcement are far from commensurate with the scale of the problem, leaving a major accountability gap.
In 2020, just £2,455 was recovered by UK law enforcement in criminal proceeds from illicit wildlife trading, and the National Wildlife Crime Unit has just 12 members of staff.
Due to the new ‘growth duty’ the Environmental Agency agency must now consider whether enforcement takes account of and balances the impact on economic growth. Criminal prosecution by the agency (to which the growth duty does not apply) is only used “as a last resort” and there are restrictions on how UK environmental laws apply to UK companies operating overseas. This seems unlikely to leave environmental criminals quaking in their boots.
And while the Serious Fraud Office may take on some cases which involve environmental harm overseas if it relates to serious fraud or corruption, it has no specific mandate to do so.
Why we need sanctions for environmental harms
Targeted sanctions would help close this accountability gap.
While existing sanctions regimes on anti-corruption or human rights could be used in cases of environmental harms, these would be mostly limited to situations where public officials are bribed to overlook environmental crime, or where the environmental harm encompasses serious human rights abuses. Clearly these regimes should be used much more frequently to target both.
However, a much broader ‘environmental harms’ sanctions regime, could be used against all manner of targets, from the criminal networks involved in the illegal trade of wildlife, fish and timber, to companies which defraud carbon offsetting schemes.
There are three main reasons why a new sanctions regime on environmental harms could be a powerful and useful tool:
- First, sanctions are one of the few ways the UK can target criminal and corrupt networks operating overseas but whose actions are enabled by their financial links to the UK. In addition, since UK sanctions automatically apply in its overseas territories and crown dependencies, they could be particularly potent in cases where companies based in these places are implicated in environmental harms but would otherwise sit beyond the reach of the UK enforcement.
- Second, sanctions would incentivise divestment from businesses associated with environmentally destructive activities and help change the current calculus that environmental crimes are a ‘free ticket’ and ‘low risk, high reward’.
- Third, if developed jointly with governments and civil society in the global south, such a sanctions regime would also be a clear demonstration of the UK government’s new and very welcome approach to equal partnerships, helping support countries which suffer the most from climate change and the illegal exploitation of their natural resources but are less able to disrupt the illicit financial flows they create.
Ultimately, the government could leverage its sanctions on environmental harms to help achieve its mission to be a “clean energy superpower” and the “sustainable finance capital of the world”. Criminals around the world exploiting the UK to profit from environmental crime are actively undermining this important mission. Any such regime will need to be combined with wider measures to beef up environmental crime enforcement, so that together the UK could be a global leader in raising the costs of committing, and ending impunity for, environmental harm.
