CITES: CHINESE SEEN AS WILLING TO PAY MORE AT IVORY AUCTION

UNCLAS SECTION 01 OF 02 TOKYO 002886 SENSITIVE SIPDIS STATE FOR E, G, OES, OES/ENRC - CDAWSON, and EAP/J - VMURRAY USDOC FOR NOAA - NDAVES and CYATES INTERIOR FOR US FISH AND WILDLIFE SERVICE (USFWS) GENEVA FOR USUN E.O. 12958: N/A TAGS: SENV KSCA ETRD CITES JA SUBJECT: CITES: CHINESE SEEN AS WILLING TO PAY MORE AT IVORY AUCTION THAN JAPANESE BIDDERS REF: A) 04 TOKYO 5751 B) 06 TOKYO 5194 TOKYO 00002886 001.2 OF 002 SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY ¶1. (SBU) Summary: A total of 108 tons of stockpiled ivory in four southern African states (Botswana, Namibia, South Africa, and Zimbabwe) will be auctioned to Japan and China from late October to early November 2008. The auction was approved by the CITES Standing Committee in July 2008. Japan's Ministry of Economy, Trade and Industry (METI) recruited ivory traders and sent a list of auction participant candidates to the four countries in late September. An NGO reports, however, that potential Japanese buyers are afraid of losing out to Chinese bidders. End Summary. Auctions Set for Late October to Early November -------------- -- ¶2. (U) At the July 2008 CITES Standing Committee in Geneva, members approved a one-off sale of 108 tons of ivory stocks from Botswana, Namibia, South Africa, and Zimbabwe to Japan and China. METI, which is organizing the auction for Japanese enterprises, posted a notice on its Website September 11 announcing the four African countries will hold ivory auctions from late October to early November 2008 (see www.meti.go.jp/press/20080911002/ 20080911002.html -- Japanese only). It also published the four countries' notices with details of the auction. According to the METI website, the auctions will be held as follows: Namibia - October 28, Botswana - October 31, Zimbabwe - November 3, and South Africa - November 6. See more at www.meti.go.jp/policy/paper_consumergoods/ ivory_auction_condition.pdf (in English). METI Advertises on Website for Auction Participants -------------- -------------- ¶3. (SBU) METI also recruited Japanese vendors for the auction and published application procedures on its website (applications were due September 19). Deputy Director for METI's Paper Industry, Consumer and Recreational Goods Division, Manufacturing Industries Bureau, Mr. Masaki Fujita told Post METI used the following criteria when evaluating applicants: 1) history of compliance with CITES rules and Japan's domestic law (Law for the Conservation of Endangered Species of Wild Fauna and Flora); 2) agreement not to re-export imported ivory; and 3) registration as "Particular International Species Vendors" under the Law for the Conservation of Endangered Species of Wild Fauna and Flora. Fujita said the four African countries are reviewing the list and checking information of each candidate for the auction. The four African governments will make a final decision on who will participate. Each country's conditions are available at www.meti.go.jp/policy/paper_consumergoods/ ivory_auction_condition.pdf (in English). According to Fujita, the GOJ is considering whether GOJ officials will attend the auctions. ¶4. (SBU) According to Mr. Masayuki Sakamoto, Secretary-General for the Japan Wildlife Conservation Society (JWCS) and a long-time ivory trade watcher, METI did not advertise for potential bidders before the previous one-off sale in 1999 when Japan purchased 50 tons of ivory from Botswana, Namibia, and Zimbabwe. At that time, METI used a closed process conducted by the Japan Federation of Ivory Art and Craftwork Unions to choose 13-14 enterprises to participate in the auction. Sakamoto said METI maintained the bidders were chosen "at the request of the southern African countries," but parties excluded from the auction were dissatisfied with the process. Sakamoto stated METI had changed the system this year to improve transparency. Still, METI's Fujita declined to tell Post how many bidders were on the list. Japanese Fear Chinese Will Outbid at Auction TOKYO 00002886 002.2 OF 002 -------------- ¶5. (SBU) Sakamoto said Japanese buyers are afraid of losing out in the auction, as Chinese competitors are willing to pay higher prices. In Japan, most ivory is used to manufacture "hanko" (the small cylindrical-shaped Japanese signature stamps or seals). Meanwhile, the Chinese make sculptures such as Seven Deities of Good Fortune, which sell with much higher prices than hanko. He said Japanese auction participants would be able to pay USD 476 to 571 per kilogram, whereas the Chinese could pay USD 666 to 761 for the same weight. -------------- Japanese NGOs: Elephants Lose -------------- ¶6. (SBU) Japanese environmental NGOs assert the threat of increased poaching exists regardless of whether the ivory at auction ends up in Japan or China. They argue one-off sales, even if legal, directly contribute to increased poaching. Environmental NGOs also assert the loopholes in Japan's ivory distribution system (Ref B) make ivory smuggling viable. SCHIEFFER