Illegal Trade in Ozone Depleting Substances

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The final phase-out dates are in sight for CFCs and other substances that harm the ozone layer – but smuggling operations threaten the continued recovery of the Earth’s atmosphere. When worldwide trade restrictions or bans are placed on any commodity – drugs, guns, endangered species or whatever – a black market soon emerges. ODS are no exception.

In the mid-1990s, when CFCs were phased-out in industrialized countries (non-Article 5 countries), illegal trade in those chemicals emerged. By 1996 this trade had reached alarming proportions, accounting for as much as 12-20% of global trade in ODS. It was once quoted in the US as being second in value only to cocaine. A 2006 estimate indicated that CFCs alone accounted for 7,000 to 14,000 tonnes of this trade, valued at US$ 25 to US$ 60 million. Alternatives can often be no more expensive than ODS, but the problem arises because equipment must often be retrofitted, sometimes even completely replaced, to use the new chemicals. This maintains the incentive for illegal trade, and it will most likely remain attractive until all ODS using equipment is finally replaced with newer technology that works with ODS alternatives.

Green customs initiative

Much effort has been devoted to training custom officers. The complexities surrounding the movement of illegal imports, as well as the scientific nature of ODS chemicals make it all the easier to deceive ill informed customs officers or Ozone Officers. At room temperature, most ODS are colourless, odourless gases, so chemical analysis is needed to determine precisely what substances are present. Smugglers have taken advantage of this fact and devised highly effective schemes, involving false labels on containers and misdeclarations on documents, diverting ODS to other countries, concealing illegal canisters behind legal ones and disguising virgin DS to appear recycled.

The importance of skilled customs officers has become apparent not just for the Montreal Protocol, but also in the context of other Multilateral Environmental Agreements such as the Basel Convention (hazardous waste) and CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora).

Protocol patching needed?

By the early 1990s it was clear that businesses and consumers would have to replace or adapt millions of appliances and pieces of equipment. Many measures could, at least in theory, have reduced the likelihood of illegal trade. Though unintentional, some aspects of the Montreal Protocol contribute to illegal trade. One obvious point is that the Protocol does not require all countries to follow the same phase-out schedule. The Montreal Protocol allows continued production of CFCs in developing countries for up to 10 years after production ceased in developed countries. This creates considerable potential for illegal trade. Demand for CFCs for continued in developed countries after the phase-out in 1995 due to the need to service existing CFC-based equipment.

Critics have also claimed that the Protocol was slow to respond when the problem of illegal trade became apparent, and that the actions taken were insufficient to fully address the problem. Illegal imports to developing countries continue to be a problem. The phase-out of ODS is about to become more crucial for developing countries as the date they have pledged for completion in 2010 approaches. Illegal trade in CFCs and other ODS is expected to grow as a complete ban approaches. By mapping the holes in the Montreal Protocol, we may learn lessons on how to deal with this and other environmental challenges.

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