‘Crocodile Cartel’ Controls Cambodian Trade

Small-scale reptile breeders hope new plan will break oligopoly

siem reap city – Just over a month ago, Prime Minister Hun Sen an­nounced plans to expand Cam­bodia’s crocodile industry. Pro­vin­cial authorities were in­structed to set up bureaus so that local crocodile breeders could, for the first time, apply for permits to transport their animals between provinces without having to travel to Phnom Penh. These one-stop shops, which have yet to be established, are also meant to provide information to local farmers on how to ap­ply for export licenses.

Prior to the prime minister’s an­nouncement, crocodile farmers were not only prevented from ex­porting their own hatchlings to buyers in Vietnam, Thailand and China, but could not even transport them between provinces here.

The directive to free up the crocodile industry came shortly after a group of small-scale crocodile farmers sent him a letter of complaint in May, alleging that six breeding farms in Siem Reap and Kompong Chhnang pro­vinces maintained an iron grip on the export of all crocodiles from Cambodia.

The alleged cartel was made up of six farms (one of which has ceased to function) that are the country’s only crocodile farms registered with the Convention on In­ternational Trade in Endangered Species of Wild Fauna and Flora (Cites) in Geneva, an international agreement between governments enacted to ensure that the international trade in wild animals and plants does not threaten their survival.

The crocodile cartel do rear some of their own reptiles, but they are probably better known for being the central buyers of all baby crocodiles bred in Cambodia by hundreds of small farmers.

Thanks to their Cites status, the big six are the only farmers who can legally export Cambodian crocodiles to overseas markets, primarily Vietnam and China.

The small crocodile farmers who complained to the prime minister said that, under the current system, they were being forced to sell their hatchlings at low prices to the Cites-registered farms, which in turn sold them on to international markets, reaping a tidy profit in the process.

And there is good money to be made.

Outside of six Cites-registered farms, over 900 small-scale producers breed around 200,000 baby crocodiles every year in Cambodia. Crocodile prices have risen sharply over the past year. The price of one baby crocodile is currently selling for between $18 and $21 in Cambodia, but the price fluctuates and earlier this year hatchlings were selling for up to $30 each. There are varying figures as to how much is marked up when those thousands of reptiles are sold to international buyers.

Cambodia’s crocodile industry is worth $4 million at a conservative estimate.

The global market for crocodile skins is worth $200 million in international sales annually, according to the IUCN, which estimates that the high fashion leather goods made from those skins earn 10 times that amount in retail sales.

Australia and South Africa are among of the world’s leading crocodile leather producers, and some of the biggest tanneries are in France and Italy- and owned by fashion houses such as Gucci.

With so much money at stake, it may come as no surprise that the Cites-registered farms have powerful connections in the government, and particularly in the Ministry of Agriculture’s fisheries department – which regulates the crocodile trade.

Meas Sithan, the wife of Nao Thuok, director general of the Fisheries Administration, owned one of the Cites-registered farms, but has since moved her crocodiles to a sprawling non-registered farm owned by Mr Thuok’s cousin, Nao Khoeu.

And despite their enviable market position, the six Cites farms are not even adhering to the rules of the agreement that has underpinned their reptile empire for the past 13 years.

According to Suon Phalla, a representative of Cites in Cambodia, there is little oversight to ensure the farms comply with Cites standards.

“We call them and advise them to write reports but they never give me any information,” Mr Phalla said. “We don’t want to shut them down, because it will affect everybody’s interest.”

Mr Phalla was forthright, saying there was a lack of cooperation between the six Cites-registered farms, the Fisheries Administration, and his Phnom Penh-based office, the Cites Management Authority, which is headed by Uk Sokhonn, secretary of state at the Ministry of Agriculture, Forestry and Fisheries.

Cites is heavily bureaucratic and its rules on conservation are difficult to follow. Some conservationists have suggested that it is not well suited to the Cambodian context, where a small-scale indigenous crocodile farming industry had been in operation for at least 60 years before the country acceded to the convention in 1997.

For example, breeders must have adequate facilities for their animals, including breeding and rearing enclosures and security measures to prevent theft or escape. They must also have an adequate food supply, egg incubation capacity and veterinary services as well as strict record-keeping procedures.

Tom Dacey, executive officer of the Crocodile Specialist Group, a crocodile conservation organization, said that Cambodia has a long history of noncompliance with Cites regulations.

“Because the Cites recommendations…appear to have been drafted in the Convention with a view to very small numbers of establishments investing in the often difficult task of captive breeding…it was not draft with a view to what has become more of a standard agricultural production system, which has been operating for decades,” said Mr Dacey, who is based in Melbourne.

“The CSG has long been concerned about non-compliance with Cites,” Mr Dacey said, pointing to a report released by the Crocodile Specialist Group in 2005 which found that in Cambodia “the levels of farms that are unlicensed suggests that the Department of Fisheries may not have the capacity to monitor the farms.”

While “to date no Party to Cites has seen fit to propose a trade ban on Cambodia until compliance improves…this is of course possible at any time,” he added.

Juan Carlos Vasquez, a Cites spokesperson in Geneva, said that if the Crocodile Specialist Group found the Cites breeders in Cambodia to be violating their conditions, they could face consequences.

“[B]ased on their responses, we can discuss if there is a violation of the Convention and what are the potential consequences,” he said in an email, without elaborating.

When further questions were put to him about the Cites-registered farms operating as clearing houses for the international export of hatchlings from all other small breeders in Cambodia – farms who certainly don’t follow Cites strict regulations and are in no way party to its rules -, Mr Vasquez said he was not authorized to comment.

When The Cambodia Daily visited the large Siem Reap crocodile farm owned by Nao Khoeu, the cousin of Mr Thuok, director of the Fisheries Department, who does not have Cites registration, reptiles could be seen inside a concrete enclosure along with crocodiles belonging to Mr Thuok’s wife, Meas Sithan, who does have Cites accreditation.

The joint facility hardly seemed up to Cites’ purported high standards.

Crocodiles dozed in pools of murky green water with barely space to move, they were so packed in–pools of about 3 by 6 meters contained around 35 crocodiles each. Baby crocodiles squirmed on top of each other in pens covered by rusty wire, and there did not appear to be any security measures in the large concrete pens that contained the animals.

The farm manager, Leum Ly, said the owners often brought baby crocodiles from small-scale farmers as they wanted to help them financially. Mr Khoeu confirmed that he bought baby crocodiles from other farmers, paying around $20 per animal, and selling them on to Vietnam at a profit of, he said, just $1.50 per crocodile.

“This year I sold 5,000 baby crocodiles over a few days to Vietnam,” Mr Khoeu said. “But that was a peak, I usually sell between 1,000 and 2,000 a week.”

Even at the claimed $1.50 profit, that is not a bad mark-up for doing essentially nothing.

Mr Khoeu said no Cites authorities had ever been to his farm.

“Nao Thuok’s wife’s farm used to be checked by Cites, but now she’s transferred her crocodiles to my farm, so I don’t know when they’ll come,” he said.

Luon Nam, another Cites-registered farmer in Siem Reap, claimed he never purchased baby crocodiles from small farmers, despite being named in the complaint letter that was sent to Mr Hun Sen.

Mr Nam, however, is head of a group of about 20 crocodile farmers called the Crocodile Farming Development Association of Cambodia, and it is from those members that he buys his crocodiles for export.

“There is no monopoly here. We never buy small crocodiles, only breed our own,” said Mr Nam, adding that the members of his organization had the right to export even though they were not Cites-registered.

“I use my Cites rights to represent 20 people…I can use my Cites rights to buy crocodiles from these people for export,” Mr Nam said.            However, according to Mr Dacey, while non Cites-registered farms could legally trade domestically–including selling their animals to Cites-registered farms–should those reptiles then be exported, they could be violating Cites regulations.

“There are many other satellite farms in Cambodia that are permitted to trade domestically under Cambodian legislation/regulations. However, they are not legally permitted to trade internationally. … We know some crocodiles from these domestic farms find their way into Cites-registered farms and are then traded internationally,” Mr Dacey said.

“It is the Cites registered farms that would be operating illegally if they export other than captive-bred crocodiles. However, they don’t have a system of being able to identify captive-bred crocodiles from wild taken animals,” he added.

Officials deny the existence of a cartel monopolizing the industry.

“Farmers got confused…anyone has the right to export as long as they have registered with Cites,” said Mr Thuok, director general of the Fisheries Department, adding that the department was encouraging smaller farms to register.

Mr Thuok also denied that it is in contravention of Cites rules for the six Cites-registered farms to export animals they had brought off smaller farms, saying as long as the small farms breed their crocodiles according to Cites regulations it was not illegal.

“Small farms act as satellite farms and not a violation to Cites regulations as long as…they breed them following Cites regulation,” Mr Thuok said by e-mail.

Lim Veasna, who has a small crocodile farm of about 300 animals in Siem Reap, disagreed strongly with Mr Thouk. Mr Veasna said it was impossible for him and other small breeders to even find out about becoming registered by Cites.

“I’ve wanted to apply to Cites for several years, but we don’t know where to get the documents and we asked Mr Luon Nam (owner of one of the six Cites-registered farms in Siem Reap) to help us get the documents but he said he didn’t have them yet. We don’t know where to apply because there is not enough information.”

Although Mr Veasna says he believes the situation will improve due to Mr Hun Sen’s order, the one-stop shops are not yet open. In the meantime, Mr Veasna said small farmers are still selling baby crocodiles to the big six because they cannot find any other market and still have no knowledge of how to apply to register with Cites.

“These six people still buy baby crocodiles once a week from small farmers, the small farmers don’t have a market, only these six,” said he said. “I sell my baby crocodiles to these six people. Yesterday they called me to ask if I have any.”

Ea Chou, another crocodile farmer in Siem Reap province, concurred. “We can’t do anything without these six farms,” she said.

“It’s up to them to fix the price.”

Technically, at least, it should have been possible for more small farms to apply for Cites credentials.

“It would be possible for a number of these domestic farms to apply for Cites registration…providing that they can prove that they meet the requirements for registration…. The major difficulty most would experience would be justifying the legal status of their breeding stock,” Mr Dacey said.

Cites has a number of criteria that must be met by any farm that wishes to register, including “evidence that the parental stock has been obtained in accordance with…the convention (eg dated capture permits or receipts.)”

Mr Dacey said that smaller farms may not be able to provide such documentation. But, a 2008 report by wildlife trade monitoring network Traffic entitled “Captive Breeding of Selected Taxa in Cambodia and Vietnam: A Reference Manual for Farm Operators and Cites Authorities,” said that large farms are not complying with the convention either.

“There has been ongoing concern voiced by non-governmental organizations that wild crocodiles in Cambodia continue to be illegally harvested and sold to farms. Moreover, an illegal trade occurs in live animals to Vietnam and Thailand,” the Traffic report said. “In 2005, farms were not operating as closed-cycle systems.

“Hatchlings are regularly sold to ‘middlemen’ traders or to larger Cites-registered farms, which may finally export these animals together with their own farm-raise stock to Cites parties,” according to Traffic.

It remains to be seen whether or not Cites will take any action against farms found to be running dubious operations. It is also uncertain that small-scale farmers will be any more capable of meeting international breeding standards for export despite Mr Hun Sen’s plan to make life easier for crocodile breeders.

Nevertheless, farmers are hopeful the prime minister’s plan to grow the industry will pay off.

“It was very difficult before,” said Seng Rith, a crocodile breeder in Siem Reap with plans to avoid the big six and start directly exporting some of his 1,000 crocodiles soon.

“We have demanded a good thing for our interest and now we have received what we wanted.”

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