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- Meeting Notes - UNCTAD/CITES Information session on initial findings on traceability system for reptiles

International Environment House I, Geneva - Switzerland, 12 June 2013

Contents 1. Background information

2. Organization of the session

3. Main issues discussed

4. Final notes and next steps

1. Background information The sixteenth meeting of the Conference of the Parties (CoP16) of the Convention on International Trade in Endangered Species (CITES) took place in Bangkok from 3 to 14 March 2013. The traceability of reptiles skins, within the context of a significant international snakes skin trade, has been an area of particular concern to the CITES Parties and Decisions have been adopted that instructed several CITES bodies to “ ...consider the conservation priorities and management and enforcement needs related to the trade of snakes in Asia….” and also requested information on reptile skin sourcing, marking and traceability systems. These decisions have to be implemented between now and the next meeting of the Conference of the Parties in 2016. UNCTAD and CITES signed an MOU in 2010 that provides the basis of their cooperation and the work on reptiles. In 2013, UNCTAD and CITES have co-commissioned a scoping study to identify options for the development of a traceability system for the international supply chain of snake skins, focusing on pythons from South-East Asia. In the margins of CoP16, a round table on traceability systems was jointly organized by CITES and UNCTAD on 12 March 2013 where an outline of the scoping study was presented. This was followed by a meeting with the range States and key stakeholders to define next steps. As part of the work undertaken, a field trip to the range States of Viet Nam, Malaysia and Indonesia and the regional transit hub of Singapore by the appointed consultant Mr. Don Ashley was organized in May 2013 to gather information from key actors and stakeholders in the trade of python skins in the region. On 12 June 2013, UNCTAD and CITES secretariats held an information session to present the initial findings of the field trip as well as to compile the opinions of all stakeholders, including private sector actors, Geneva-based missions and civil society. The event was held at the International Environment House I in Geneva under the Chairmanship of Mr. Mathias Lörtscher, Chair of the CITES Working Group on Snakes.

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The meeting was attended by 45 participants from Geneva-based missions, tanneries, trade, luxury goods brands, business associations and platforms, traceability experts, database managers, UN agencies and civil society. This report summarizes the main issues discussed. The agenda and list of participants are included in Annex 1.

2. Organization of the session The information session started with the opening remarks of Mr. John Scanlon, Secretary-General of CITES, and Mr. Bonapas Onguglo, Head, Trade, Environment, Climate Change and Sustainable Development Branch, UNCTAD. It was followed by a presentation of Mr. Lörtscher on the CITES Decision Process on Snake Trade and Conservation - Traceability. Afterwards, Mr. Don Ashley, UNCTAD/CITES consultant, shared the initial findings of his trip followed by a Q&A session. In plenary, discussions were also held between all participants considering the following topics: a. Traceability in the supply chain: i.e., from the harvester of snakes to the final consumer b. Information system for traceability c. Institutional framework of the traceability system d. Sustainability, livelihoods and cost sharing issues

3. Main issues discussed 3.1 Opening session Trade in snake skins is a key topic being considered with decisions obtained at the CITES CoP 15 in 2010 that deal with regulating trade that should be legal, sustainable and traceable. Parties needs to comply with the obligations established within the CITES process as well as importing and exporting actors throughout the supply chain. The study commissioned by UNCTAD and CITES secretariats is an opportunity to compile data and information available as well as obtain inputs directly from trade stakeholders so that the result would be a robust study that supports the CITES process for defining a traceability system and addressing illegal trade. The study addresses directly the CITES CoP16 Decision on snake skins. 3.2. CITES Decision Process on Snake Trade and Conservation - Traceability by Mr. Lörtscher The intervention highlighted the CITES decision making process to define a traceability system for snake skins, which is:

March 2013 - at Cop16 the CITES Secretariat informed its Parties, Animal Committee (AC) and Standing Committee (SC) to look at studies undertaken by ITC, UNCTAD and other information available.

April 2014 -AC will look at studies ITC, UNCTAD and any further information that will be available and make recommendations on the way forward, considering what has been done and what is most feasible to be implemented, particularly on the issues of (i) existing marking, tracing and certification systems, (ii) traceability systems to confirm legal origin of snake skins and (iii) economic feasibility to implement the systems. AC will also make recommendations to SC that will meet in July 2014.

July 2014 - SC will consider the reports and the recommendations from AC and makes its own recommendations.

March/April 2015 - AC may consider new information available as well as the recommendations/outputs from the SC, and an expected output could be a proposed Resolution on how the trade of snake skins should be controlled by traceability, marketing, whichever the Parties should decide.

Summer 2015 - SC will provide the final recommendations to COP17, considering the progress made and further advise from AC.

2016 - At COP17, Parties will consider recommendations from SC and decide on a Resolution if Parties agree. The Resolution will be legally binding.

It is important to highlight that the above process does not exclude Parties and other initiatives from advancing and testing systems or studies being undertaken that could be fed into the CITES process. The presentation is enclosed in Annex 2.

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3.3 Initial findings of the field trip under the UNCTAD/CITES scoping traceability study by Don Ashley Background The study intends to be participatory and inclusive, matching CITES goal to guarantee that the specimens are legally acquired and its use is non-detrimental. It is a continuation of the process started in 2009 and is developed within the framework of the MOU signed by UNCTAD and CITES in 2010. The work undertaken aims to (i) develop a comprehensive study that compiles and synthesizes inputs from range States, industry members, civil society and other actors and (ii) reach a consensus on the development of a traceability system. (See Box 1 below for detailed scope on the study's Terms of Reference (TORs) and the topics discussed during the consultation process and field trip.) Background information was revised in order to provide the basis for the way forward in developing a traceability system, particularly considering the recommendations of the ITC study "The Trade in South-East Asia Python skins", UNCTAD study "Improving International Systems for Trade in Reptile Skins Based on Sustainable Use”, and Swiss FVO study "Expert Panel Report on Humane Killing Guidelines For Reptiles". The experience from the IUCN Boa & Python Specialists Group and the Yellow Anaconda Programme (YAMP) was also reviewed and shared throughout the field trip. The approach of the study aims to balance economic and commercial needs with conservation and livelihoods of local communities. The sustainable model which considers the conservation and the involvement and benefit throughout the supply chain, particularly communities, is called the "Marsh to Market story". Positive media campaign with stories of sustainable use, trade and livelihoods are examples of Marsh to Market stories, which can mitigate the buyer-beware approach.

Box 1. UNCTAD/CITES TORs and Objectives of the UNCTAD/CITES Traceability Study (March-August, 2013) A) Improve Traceability: (i) tagging or marking options (matrix ranking of type, design & cost); and (ii) Institutional frameworks and compliance standards

B) Compliment CITES Permitting Systems: (i) Licensing and reporting requirements; (ii) Shipment declarations and inspections; (iii) Permit clearinghouse reviews and inventories; and (iv) Shipping tags and export documentation

C) Improve Conservation and Sustainable Use Frameworks: (i) Protected areas and management units; (ii) Provincial quotas and harvest limitations; (iii) IUCN Boa & Python Specialists Group; and (iv) Yellow Anaconda Model

D) Enhance Compliance and Enforcement: (i) Designated ports and inspections; (ii) Training and ID manual; and (iii) Regional enforcement coordination (AESWEAN)

E) Improve Capacity Building: (i) Research and management; (ii) Enforcement and compliance; and (iii) Annual reports and trade monitoring

F) Encourage stakeholder engagement: (i) Supply chain participants (Harvesters and Dealers); (ii) Traders and Tanners; and (iii) Manufacturers and Luxury Brands

G) Recommend equitable cost and benefit sharing: (i) Supply side (raw skin); (ii) Value-added (crust and finish tanning); (iii) Manufacturing and retail; (iv) Dedicated funding sources; and (v) Determine applicability to other reptiles in trade such as snakes, lizards, turtles, etc. and by-products (meat, gallbladders, etc.)

Initial findings of the field trip

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The field trip included Viet Nam, Malaysia and Indonesia, and the regional transit hub of Singapore where meetings were held with CITES management and scientific authorities, academia, catchers and breeders, tanneries, traders, reptile associations, and luxury brands. The aim of the trip was to capture the comments from the range countries' perspectives on traceability and sustainability issues. The trip included meetings with government and CITES authorities, as well as visits to tanneries, slaughter houses, breeding farms and research centers. Stockpiling and inventories were the major issues discussed, as well as captive breeding (e.g. in Vietnam), origin of skins, monitoring, trade bans and suspensions which can be addressed by traceability systems, euthanasia methods and animal welfare, stakeholders involvement and the supply chain and value addition processes. All visited countries provided the UNCTAD/CITES consultant with information on how CITES works, their legislation, enforcement, inspection and monitoring programmes as well as capacity building and awareness raising. For example in Singapore, government agencies provided information on how CITES works, their legislation, enforcement and

1 No recommendations on the traceability system are provided as information is being compiled; for example information from the three range

countries and Singapore is still being received by the consultant by 12 June 2013. The presentation highlighted som e of the issues discussed and further information on specific topics was obtained through Q&A and the plenary discussions afterwards.

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inspection programmes, as well as their penalties (e.g. Singapore's penalties per specimen have increased radically from USD5,000 to USD50,000), break-down trade information, and outreach and awareness campaigns. Essentially, there is engagement, support and need of range States, re-exporting States, trade and luxury brands in Europe to work together to increase the level of trade that is legal, sustainable and verifiable (traceable and independently monitored). The size of illegal trade as compared with the legal trade is difficult to determine but may be as much as 50%, which makes it not sustainable from regulatory, CITES and local communities' point of views. One of the ways to address this issue and achieve sustainability is through traceability. This is the core function of CITES that ensures that specimens in trade are legally acquired and that their commerce is not detrimental to the survival of the species. Key issues discussed can be summarized as follows:

Structures in place that can provide an initial basis for traceability system The legal framework varies from one country to the other, but there is a legal framework in place and additional regulations might be needed to enhance the framework for implementing a traceability system. The range countries are currently adopting special rules. For example in Viet Nam, there are technical regulations on breeding the Burmese and reticulated pythons (Ministerial Standards 04 TCN 86-2006) that define the requirements on licensing, reporting, tagging and transporting. Malaysia on the other hand, is reviewing and enhancing its system.

Among all the range countries visited, Indonesia could be said to have a more advanced system coupled with an institutional framework which is a pioneer system for the legal trade that works and can also be extended. It uses a sticker with a serial number (tagging) that is applied to the leather at the point of export which is also where the duties are obtained. For compliance, Indonesia requires transportation documents which do not include a tag number of the skins. However, if a tagging system is included in the existing transportation permit, it would help enforcement actions (transport is legal and the skins transported matches the tag number accompanying the permit). Indonesia expressed its interest in receiving further advice on this matter. If a consensus is achieved on a CITES traceability system, how long will it be before it is implemented? If it is simply a suggestion, implementation could take between two to three years. However, if there is a strong consensus with Management authorities, trade, CITES and other trade organizations, that process could be expedited, and it remains to be seen whether the range states can implement the system. In the experience of traceability of crocodile products, the range states started to implement the system even before the Resolution as a universal system was adopted by CITES.

Tagging Trade suggested considering crocodilian tags (preferably barcoded) as a starting point in the definition of a traceability system. Other systems that were also discussed were the tag from the Yellow Anaconda Programme (YAMP), button-style tags used in Colombia and the RESP chip. Testing is still needed as, for example, the YAMP tag could jiggle as there is too much space in between. However, there is interest from the trade side on a system that can quickly read a large number of skins (i.e. pallets, boxes, etc.).

Bottlenecks for defining and implementing a traceability system are: stockpiling, and transportation of skins between catchers, slaughter houses and tanneries.

Dedicated funding for a monitoring programme for the python Further information was provided on examples of dedicated funding with other species. For example, the Alligators programme in Louisiana is a public-private partnership (PPP), and the Alligator Advisory Council manages the resource. There are regulations in place and a USD4 per tag is set to fund the monitoring programme (research, management, compliance, enforcement, capacity-building activities, etc.), generating USD1.3 million annually (with USD35 million in a period of thirty-five years). The alligator's current raw value is USD 70 million and most benefits go to the involved coastal communities (which includes more than 2,500 catchers, 6,000 families, 30 farms and employees annually). The involvement of the local community is essential to ensure the sustainable use of the species which is part of their culture and a source of income. Another example is Papua New Guinea where the authorities dedicated funding for crocodiles that established 5% assessment against the export value of the skin, where 3% goes for monitoring of the population and 2% to duty to the government.

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The Yellow Anaconda Programme (YAMP) is an innovative PPP initiative of the Fundación Biodiversidad and the Argentinian Wildlife Authority that collects a 4.2% fee for the overall management of the programme (research, analysis, set quotas, monitoring and supports compliance with the requirements). Consequently, the programme has a fund to support its activities and uses a button-style tag as their traceability system (for exporting in small quantities at the moment). It uses minimum size limits for control, skinning instructions to differentiate between actual harvest from one year to the next and from export quota. Malaysia has a dedicated funding coming from python skins but it feeds the budget of local provinces and government. Similarly in Indonesia, resources are collected but these go to the central government budget and not to the specific management of the species. Viet Nam has a 5% fee on skins that are exported, but this proposal is being repealed by the Ministry of Agriculture and Rural Development. A dedicated funding for the python could be an issue to follow-up with governments and private sector with matching funds (combine range state fund and a python fund). It is essential to have annual funding dedicated to the management of the species in order to get the programme operational and functioning long-term.

Export of dry skins to crust leather There is a big demand for dry skins as tanneries can dye them with colors and manage the different crust quality that might result from tanning processes from different companies. It is important to mention that the export of dry skins from Indonesia is not allowed and this increases the pressure on neighboring countries to export dry skins. ITC estimated 50 tanneries, but 15 of those likely tan more than 75% of high end python leather, so they can be used as the bottle neck to discourage the export and import of illegal skins, such as those dry skins from Indonesia. The trade in Singapore stated their concern about the trade in skins with uneven/different crusts in terms of colors and which limits the possibility of producing finished products, similar to the difference between dry and crust skins. In general, the crusts meet international standards, but the concern could be their use to develop fancy final products. Discussions were also focused on inventories and on how long the skins can be stored. It is suggested that trade in python skins should be in single skins and not pieces. For management, NDFs (where the quota is based on harvest), the number and size of the skins are needed so that they can be monitored and assist in population assessment. There is limited data available on the snake trade and on the python trade in particular. However, an analysis by Mr. John Caldwell of the trade data of large CITES-listed snake skins for a 17 year period (1995-2011) shows a dramatic increase from 2009 (531,000 skins, mostly python) to 2011 (859,000) skins. Preliminary findings of an updated Python Trade Data report including,17 years through 2011, indicated the python trade increased more than 50% from 2010 to 2011 based on CITES Annual Reports. The extent to which these totals were based on "permits issued" rather than "actual shipments" is currently being cross-checked. The trade data results will be available in the draft final report.

Value adding Value adding processes are taking place in all countries, as the industry is not only engaged in obtaining dry skins and crust leather but also in developing finished leathers including colored ones. The industry is also beginning to manufacture final products such as purses, wallets, belts and uses every part of the skin available. In Indonesia, for example, a manufacturer has 15 employees that earn two to three times more than a skilled apprentice in a different profession. In Vietnam, the national industry is producing crust finished and is beginning to manufacture products, and the employees are paid better than other unskilled labourers. In Indonesia, the first stage of the tanning process must be done in the country with crusts only to be exported (the export of dry skins is forbidden) hence, creating added value. This is a challenge as there is a demand for dry skins that gives greater possibilities in developing the final products.

Price of dry skin, crust and finished products and other by-products The ITC study states the estimated average raw skin price for a three-meter python is USD100, and when exported as crust, it increases by 10 % (USD110). Based on initial discussions with tanneries, 60% of the cost represents taking the dry skin to the crust level, and value added is 10 % more. During the event, delegates from industry stated that the raw dry skin cost is roughly 50% of the total value of finished crocodilian leather. Also, it was highlighted that the quality of the crust is crucial to determining its value segment.

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Socio-economic conditions In relation to the socio-economic conditions of the communities/catchers, the process normally involves four python catchers. Once a week, a dealer will come and pick up the snakes and take them to slaughter houses. The group catches a few snakes a day, but they are also involved in agriculture activities with livestock and chickens. Contrary to the crocodiles, there is limited human-python conflict as the latter feed on livestock and chickens and not on humans, and this generates an economic incentive to conserve it. Furthermore, meat of python is also sold as a by-product. In Malaysia for instance, catchers can earn an additional USD20 to USD30 for meat and bladder per animal, which is representative considering the USD 100 average raw skin estimated in the ITC study. Issues related to access and cost-benefit sharing was raised by trade in Indonesia which recommended looking closely at the CBD's Nagoya Protocol and other similar on-going processes.

Python breeding In Viet Nam, python breeding farms were visited and they have significant breeding stocks. The egg shells are kept for monitoring purposes and determining how many pythons are raised each year as suggested by the IUCN Boas and Python Specialist Group. They are able to raise a python, which may reach 2.2 meters in one year but not the required 4 meters. Also satellite farms were visited with diversified breeding with python and crocodilians.

Python habitats Palm oil plantations with irrigation canals in Malaysia provide a good habitat for pythons and this helps in controlling rodents. In Indonesia, the government is promoting palm oil plantations (aiming to increase from 12 million to 16 million hectares), which can provide good habitat for pythons (balanced with protection of primary forests) and if sustainably managed, can become a good example that supports conservation, commerce and provides livelihood opportunities (an example of a Marsh to Market story). Some countries have areas that are protected and/or management units for pythons. Discussions were held for instance in Indonesia, on how to formally identify and define protected areas, and also identify habitats for pythons, making comparison between different habitats (e.g. difference between palm oil, rice, coconut, rubber, etc. plantations and the different dynamics these represent for pythons).

Initial conclusions The three main messages from the field trip are: 1. In Singapore and the three range countries, there is a high level of support for tagging all python skins in trade,

with a significant level of understanding of the urgency in moving forward in the tagging of pythons and improving existing frameworks.

2. Commitment to working towards an inventory of stockpiles, considering the specific views of the industry and management and scientific authorities. In general, there was a good consensus on the need to inventory stockpiles as a starting point for controlling all python skins in trade.

3. Recognition of the need for dedicated funding, particularly as it relates to a monitoring programme, including research, management, enforcement, compliance, trade monitoring, and conservation education. It was also discussed that some of the funding would also be dedicated to capacity-building and development of best management practices.

The presentation is enclosed in Annex 2.

3.4 Plenary discussions: a. Traceability in the supply chain: i.e., from the harvester of snakes to the final consumer Traceability is a tool for sustainable supply chains and is important to have clearly defined its objective. If it starts at export or even at the slaughter house, it is not useful as it does not tell whether the whole process is sustainable from the point of capture, slaughter, manufacturing and export. The industry would like the supply chain to tell them where the skins are coming from and whether they are legal, and ecologically and socially sustainable or not. Hence, the earlier a traceability system can be established the better it is, and the system has to be not only scientifically robust but also economically feasible. Until now, no single tag (tagging, ADN, RESP chip) can resist the entire production process as skins have to be retagged at different points, and the tagging/ID has to be invisible in the final product.

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Different traceability systems are available but it is important to take the cost factor into account along with the feasibility and reliability of the system. A key aspect in the system is the database in order to allow the tracing from the captured live snake to the final product to prevent illegal skins being used; and ideally with a single ID number to enable a product to be traced from marsh-to-market. Companies aim to be able to affirm the legal origin and sustainability of the skin used. For example, discussions were held on the traceability per skin or piece (per watch strap or per mobile phone cover for example) or a lot with full traceability. As for the crocodilian traceability example, tagging is done to the level of the finished leather as the tanneries bottle neck is a recognizable point of control (e.g. three major tanneries that handle more than 70% of all the skins) and on a risk assessment basis, it is estimated that at least 95% of classic crocodilian trade is legal. The problems of illegal skins being tagged as legal skins (laundering) , is an enforcement issue rather than a structural trade point. In the python trade on the other hand, there are structural difficulties in addition to enforcement issues. It is important also that this information is communicated to customers as they want to be informed before they purchase the goods. It is not only important how communication with consumers take place, but it is essential that it is trustworthy information. There are some examples of how brands are communicating with consumers such as certificates, passports (e.g. See box 2), among others.

Box 2. Gucci passports

In 2012, Gucci put in place a traceability system certified by the Rainforest Alliance and they are communicating the origin of the skins through a passport (farmer, slaughter house, tanneries and finished products). This is a pilot system involving approximately 200 bags but it could be extended further. Crucial elements of the system are the clearly identified farms and the cattle which is tagged, and after the slaughter house another code number is used. Due to clearly identified processes inside the tannery traceability is also supported. The other element is in production that necessarily has to be taken into consideration as it is not possible to tag each single piece and as the final product is a mixed (e.g. cut and assembled from different skins) but if the process is in place it is possible to adequately certify the supply chain from the raw skin to the final retail product. Consequently, it is important that the basic information is solid and trustworthy.

The proliferation of traceability systems could raise problems and there is a need to identify commonalities and fundamental elements and also consider how to link them to the CITES permit process (paper permits and the future electronic permits that need to be implemented by exporting and importing countries). There is a need to standardize the information and link it to an international body like CITES. This is particularly important to bear in mind if every brand starts developing their own traceability systems with their own information. Information needs to be compatible and comparable. However, companies can define and enhance the information required based on their needs and strategies. The CITES Secretariat stated some of the challenges faced in managing and implementing different systems. For example, CITES issues paper permits and as countries are moving to electronic systems independently, there is a risk that these systems could not communicate with each other. Moreover, countries are involved in trade facilitation processes and developing a single system to be used for all trade documents (single-window). The CITES permit is one of the requirements needed to export reptiles and needs to be coherent and adhere to international standards and norms. CITES can make recommendations on best practices to be used by Parties in setting-up their own traceability systems that will be compatible with the international system, but cannot require a Party to adopt any standard at the national level. It was recommended to look at high level standards that Parties could use for the traceability system and comply with international requirements, which can also feed the CITES permit process. WCMC-UNEP has been a repository of CITES trade data for several decades and it would be possible to work with them to develop a data base of tag numbers. They are currently discussing with CITES Parties on their needs and moving to more electronic sharing of information. For example, further efforts are being implemented to facilitate generation of real-time data and foster sharing of information, as well as allowing the use of mobile phones to scan information, which could be linked to the WCMC-UNEP database. The importance of moving forward on the development and testing of a traceability system that would be acceptable to all stakeholders is generally recognized. Testing is already underway for one system and the Ashley report will certainly provide input that will lead to testing of other systems. The Decisions taken by the CITES Parties at CoP16,

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have given added impetus to ensuring that a reliable and economically viable traceability system will be ready within the CITES timetable to be presented to the Parties at CoP17 in 2016. b. Institutional framework In relation to inspection points, discussions held refer to the shipping points (not designated point of entry yet) to assess the availability of inspections in a selection of shipments. For example, central shipping points can be designated in Indonesia as well as in Malaysia with three designated ports. The attachment of the tag number list with transportation and export permits could be a refinement of the requirements currently implemented in Indonesia, and was suggested that Viet Nam and Malaysia could also consider this experience. It would also be helpful for implementing enforcement, and if the tag numbers for pythons in trade also include the size of the skins, it can be used for adaptive management and for NDFs. Mr. Ashley suggested considering reporting systems in almost real time. Indonesia has a system in place that requires reports quarterly. So if a tag number is available, then it can be electronically input to provide almost real time data. It was suggested that this could also be interesting for Vietnam and Malaysia. Malaysia already collects the data on weight and a length ratio could be developed to provide trends and relationship with size classes could be defined. Singapore is moving already in that direction based on CITES resolution on retagging with barcode tags. For example, it is retagging crocodiles to obtain an electronic system by batch and/or shipment to enhance their inventory systems. Tags have information on the country of origin and the species, which allows Singapore to begin building their database. Enforcement will be a different challenge as it needs to address the challenge of dry skins in trade. Government and industry are key players in encouraging python trade to be more legal, sustainable and traceable as well as promote value added in SEA countries. In relation to the initial point of tagging, discussions centered on whether it should be at tanning, dealer and collector/slaughter house level, but there was a consensus that it should not be at the hunting/capture level. The reason for the latter is that local communities participate in the hunting whenever they want and the process should not impact their livelihoods. Instead, communities could take it to a point of tagging which could be (i) at slaughter houses where the hunters will take their catch, or (ii) when the skin is dried, or (iii) by the dealer who collects them before delivering to the tanneries (Indonesia), or (iv) at the delivery point to the tanneries done by tanners before the skin is converted to crust. There was no consensus on the most ideal starting point but only that it could be one of the options stated above. The risk of counterfeit tags was discussed during the meeting. CITES has a mechanism to handle this and the tag manufacturer should be taken from a list of CITES approved tag manufacturing companies that report to CITES on tags used and by whom. Reporting can also provide information to identify illegal trade as for example if two tags are used twice. Estimated illegal trade is significant (based on the ITC report of 50%) and efforts are needed to combat it. For example, if major tanneries collaborate and no dry skins are bought from Indonesia, no skins could be diverted from an illegal source to a legal source. Also, cooperation and participation from trade as well as feedback on how to overcome illegal trade is essential. Options to address illegal trade include stronger enforcement measures and by the legal trade adopting tagging. The inventorying of stockpiles could be a way forward to combat illegal trade, and if this is combined with funding for capacity building on best management practices, this will be a significant progress. Range countries and Singapore are very interested in this process and are willing to inventory their stockpiles with certain conditions (e.g. management authorities verifies and maintain the records which is confidential information and does not allow the identification of individual companies, including the size of the existing stockpiles to be recorded). The traceability system could be a two tier system, as the actors involved have different needs; for example, the origin of the skins in range countries to the tanneries, and then from finished leather to finished product. However, there are also a range of different finished products, as for instance tanner and manufactures from range countries would have a different capacity to absorb costs in an end-to-end system favored by some luxury brands. The needs, requirements and capacities of different value chain actors are also being considered in the study. Within each country, the responsibilities of the different stakeholders were also discussed. Who would implement the traceability system and who would manage and monitor it? This could be done by the management authority but

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there would be a further control at the local level (e.g. provinces, districts). For example, in Malaysia the quota system was discussed and the need for the origin to be more detailed. Similarly in Indonesia, as skins are coming from different islands. The Indonesian sticker could be differentiated per location depending on the origin (e.g. specific sticker per island). Indonesia licenses collectors and requires reports, and is able to identify to whom a tag number was issued. This helps to build a framework for the python skin trade. Indonesia’s system is good and it can be enhanced to further eliminate illegal trade which is an important loss of value to the country. c. Sustainability, livelihoods and cost sharing Implementing a traceability system should entail a share in its costs, including allocating funding to implement best practices for enforcement and compliance. However, the need for the most cost effective, viable system was generally agreed as the stretched resources of the range states would not permit the selection of a system that would be expensive to implement. A quota is voluntary and not an obligation for Annex II species and this may result in a difference in the management of species between countries. It is therefore essential to monitor populations to ensure the sustainability of the species and if a risk is identified, measures need to be quickly implemented. Additionally, specific considerations need to be discussed. For example, Malaysia defined an export quota of 200,000 skins; however it can be improved by defining a more specific quota per location (e.g. percentage for islands and percentage provincial) for the rest of the country).

It is essential to ensure the involvement of the local communities where the livelihoods are involved and strengthen their organization, support efforts in defining the quotas for all actors, establish prices that involve all the associated costs in the organization of the supply chain and address other issues which could include gender issues (e.g. could women be further engaged in the process?).

The importance of a cost-effective tag was generally recognized. For example, Indonesia has a sticker for export but not earlier in the supply chain (e.g. hunting). A two-tier system could be envisaged as the implementation of an end-to-end system would not be easy for the range states.

To develop a traceability system it is important to be organized from the beginning, otherwise it will be difficult to implement. Cooperation is needed between all stakeholders to ensure a strong foundation for the development of a framework for the python skin trade. Tagging from the source is challenging to achieve and it needs time to be implemented. However, with the engagement of all partners, an agreement can be attained to find the most suitable system which is viable and acceptable to all.

4. Final notes and next steps

All participants from the private and government sector agreed that it would probably be best to have a two-tier system with a simple cheap tag in the first phase until the finished leather. From that stage onwards, each brand could come up with a more sophisticated level of traceability if they wished to do so. Consequently, the CITES process would mainly be concerned with the first level of tagging. Actors are encouraged to share information and comments so that they can be further included in the UNCTAD-CITES report. Furthermore, the next steps in the development of the UNCTAD-CITES scooping study are:

A first draft of the report will be available for peer review by August 2013.

An event to present the result is being planned for autumn 2013.

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ANNEX 1a: Agenda 09h20 - 09h40 Welcome remarks John Scanlon, CITES Bonapas Onguglo, UNCTAD

09h40 - 09h50 CITES Decision Process on Snake Trade and Conservation - Traceability Mathias Lörtscher, CITES Working Group on Snakes

09h50 - 11h00 Presentation of the traceability study findings Don Ashley, UNCTAD/CITES consultant

Q&A

11h00 - 11h15 Coffee Break

11h15 - 13h30 Discussions covering the following topics:

a) Traceability in the supply chain: i.e., from the harvester of snakes to the final consumer

b) Information system for traceability c) Institutional framework of the traceability system d) Sustainability, livelihoods and cost sharing issues

13h30 - 13h45 Closing remarks

13h45 - Light lunch (sandwiches and drinks)

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ANNEX 1b. List of Participants

Title First Name Last Name Company/Mission/Organization

1 Mr. Aaban Butt ITC 2 Ms. Anouchka Didier Cartier

3 Mr. Alessio Cecchi

Permanent Mission of Italy to the United Nations Office and other international organizations in Geneva

4 Mr. Bob Moore Swatch Group 5 Mr. Bonapas Onguglo UNCTAD 6 Mr. Christopher H. Cordey Futuratinow.com/Sustainable Luxury Forum 7 Mr. Claude Walthert CFI S.A.

8 Mr. Colman O'Criodain WWF

9 Mr. David Damian

Permanent Mission of Mexico to the United Nations Office and other international organizations in Geneva

10 Mr. David Morgan CITES 11 Mr. David Prosser CITES 12 Mr. Don Ashley UNCTAD/CITES consultant

13 Mr. Eduardo Escobedo RESP/CSCP

14 Ms. Elizabeth Te

Permanent Mission of the Republic of the Philippines to the United Nations in Geneva

15 Ms. Elsa Miranda

Permanent Mission of the Republic of Indonesia to the United Nations, WTO and other International organizations in Geneva

16 Mr. Filippo Nishino Gucci 17 Mr. Frederic Albinyana SICPA Products Security S.A.

18 Mr. Guy Morgan BSR Paris 19 Ms. Helen Crowley Kering 20 Mr. Herve Loubert Gordon Choisy

21 Ms. Holly Dublin Expert* 22 Mr. Ian Gregory VCC

23 Mr. John Scalon CITES 24 Mr. Juan Carlos Vasquez CITES

25 Ms. Katarina Nossal ITC

26 Mr. Leonardo Buratti Gucci - CH 27 Ms. Lorena Laino Gucci - CH 28 Ms. Lorena Jaramillo UNCTAD 29 Mr. Malick Kane UNCTAD

30 Mr. Marcos Silva CITES

31 Ms. María Durleva UNCTAD

32 Mr. Mark Auliya Helmholtz Centre for Environmental Research GmbH - UFZ* 33 Mr. Mathias Lörtscher CITES MA 34

Ms. Nurhana Iknal Permanent Mission of the Republic of Malaysia to the United Nations Office and other international organizations in Geneva

35 Mr. Pablo Sinovas UNEP-WCMC

36 Ms. Pamela Ashley UNCTAD/CITES consultant

37 Mr. Phillipe Vieira Fédération Horlogère 38 Ms. Pia Jonsson CITES 39 Mr. Pierre Ruggiero All4Retail

40 Mr. Ralph Arbeid Expert*

41 Ms. Rosella Ravagli Gucci

42 Mr. Sergio Lizzola SICPA Products Security S.A. 43 Mr. Stéphane Küpfer Küpfer Cuirs

44 Mr. Tom De Meulenaer CITES

45 Ms. Xenya Cherny-Scanlon IUCN

* participated via Webinar

12

Annex 3: Presentations can be downloaded from www.biotrade.org