Efforts to detect, pursue and disrupt environmental crimes have not been proportionate to the cost of $281 billion per year that society pays for these offenses, according to Lisa McCormick, a citizen activist who has called for better law enforcement, international cooperation, and other reforms to take away financial benefits from such behavior.
“Money laundering enables a significant number of environmental crimes — the most profitable being forestry offenses, illegal mining and waste trafficking — to generate up to $281 billion of dark money each year,” said McCormick. “Since more than 70 percent of the murders, rapes, and robberies that are reported to New Jersey police each year go unsolved, we must recognize that complex environmental offenses need a much better response.”
McCormick cited a report released in July by The Financial Action Task Force (FATF), an independent inter-governmental body that promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.
The 66-page report is compiled from case studies and best practices submitted by over 40 countries, with input from international organizations like the International Monetary Fund and World Bank.
The report found limited cooperation among authorities investigating money laundering or countering the financing of terrorists and those going after environmental crime in most countries, which presents a significant barrier to effectively tackling money laundering from environmental crimes.
In other words, anti-money laundering experts and government environmental law enforcement agents don’t understand each other’s area of expertise and often don’t communicate with each other, resulting in missed enforcement opportunities.
With global environmental crimes generating up to $281 billion per year, the report suggests that government interventions are not proportionate to the severity of this problem.
McCormick hopes to raise awareness of the scope and scale of harm caused by ecological crimes and related money laundering, in order to stimulate collaboration among financial and environmental law enforcement officials.
The scientific complexity of environmental crime makes it notoriously difficult to identify and prosecute.
“A tax paid at the source of pollution will discourage excessive packaging, improve recycling, and eliminate the financial incentives from illegal disposal,” said McCormick.
McCormick has previously proposed making manufacturers responsible for waste disposal costs by requiring producers to pay for recycling or waste management but she added that is not enough to solve the entire problem.
“Early in the supply chain, illegally obtained products such as logs, stones or waste can be strategically mixed in with their legal counterparts,” said McCormick. “Without serious investigations and cross-border coordination, those illegal products appear can benign so they often go unnoticed. Buyers or sellers of comingled goods later in the supply chain may have no clue if they were obtained illegally.”
McCormick said a strategy for tackling environmental crime must include a component that prevents or catches money laundering.