For World Wildlife Day, 2024, CITES hosted an event with the theme, “Connecting People and Planet: Exploring Digital Innovation in Wildlife Conservation“. The event profiled some of the latest applications of digital technologies in wildlife conservation and ecosystems mapping and monitoring.
Just over an hour into the event, Ivonne Higuero, CITES Secretary-General, introduced the ASYCUDA eCITES system, saying, “In our next segment we are going to look into the future. I would like to introduce you to yet another one of CITES digital efforts. The electronic CITES permitting system or eCITES. Something close to my heart. When I started working with CITES some six years ago, I thought we need to move into the future, and I think this is one way in which we could make CITES move into the future.”.
I think it is important to know that modernising CITES from its current paper-based permit system was first discussed in 2002. A working group on electronic permits was first established in 2005. In 2010 the group published the CITES e-permitting toolkit, which advised signatory countries what they would need to do to move to electronic permits. This was of little help and only two countries had implemented electronic permits by 2018, Switzerland and France.
To its credit, CITES joined forces with UNCTAD to develop ASYCUDA eCITES, an off-the-shelf system that works with the ASYCUDA customs system, used by more than 100 countries, including most low-income countries. This system is based on the humble QR code. Invented in 1994, the QR code was designed to allow high-speed component scanning in the automotive industry. But it quickly expanded to be used in many commercial tracking applications. Despite ASYCUDA eCITES having been available for several years, less than a handful of countries have implemented it. This centralised system incorporates species names, appendix listings, units and classifications in accordance with CITES rules and can be centrally updated, ensuring consistency in global electronic permit exchange. Any nation – and it is normally the wealthy countries – who want to build a customised single window system, incorporating electronic CITES permits, must commit to covering the costs of interoperability with this central system.
In September 2023, Ivonne Higuero acknowledged the failings of the paper permit system, saying, “Unfortunately, problems can arise with the use of paper documentation, including fraudulent use. Complications in keeping track of documents during issuance, transportation, and verification could result in forged paper documents. This may involve declaring false information, altering documents, reusing them, or even theft. There also have been cases where lost paper permits were used illegally due to delays in reporting and the extended duration of subsequent notifications among Parties.”.
Promoting this as something to aspire to in the future, when it should have been implemented long ago, is questionable. What is worse is that the previous Secretary-General for some reason used this event to promote his prior attempt to push blockchain as the technology to use to digitise the CITES permitting system. So, let’s be clear about how the 2015-16 hype on the ‘potential’ of blockchain has translated into ‘real-world’ projects.
When Scanlon introduced the ‘Block Chain Challenge’ in 2017, the global hype about blockchain’s potential was similar to what we are reading today regarding AI. Enterprise blockchain was in its early days in 2015/16, so CITES pushing blockchain in 2017, while unnecessary overengineered for the permitting job, was sort of OK. After all, CITES and other conservation organisations know that you must make things sexy for donors in wealthy countries. But there is no excuse to try to put blockchain back on the table now.
There is a litany of failed blockchain projects that have tried to use crypto ledger technology in corporate settings that have found blockchain doesn’t scale. Just recently, two major blockchain projects were shelved. A blockchain system built by IBM for shipping giant Maersk, has shut down. Also gone is the Australian Stock Exchange much delayed blockchain system, first announced in 2016, that was meant to replace the clearing and settlement system that powers the equities market.
That we don’t need blockchain to create a high-trust and high-security trade systems should be obvious to everyone now that the Australian Stock Exchange scrapped its blockchain project to replace the existing stock trading system after 7 years and AUD$250 million being spent with nothing to show for it.
AUD$250 million would have been enough to roll out ASYCUDA eCITES to all 183 signatory countries of CITES five times over!
Blockchain’s crash from its early hype is nicely summarised in “I Looked Into 34 Top Real-World Blockchain Projects So You Don’t Have To”, which says, “The top #1 Google result for “blockchain production users” (and related queries) lists 34 individual “real world blockchain” projects. One would expect some actual functioning projects that have an impact on every-day consumers — outside of cryptocurrency & NFTs. Looking into all 34, I found that 13 are already dead, 6 are only useful within the crypto & NFT ecosystems and not in the “real world” and 14 use Blockchain in a way where removing the blockchain would not impact functionality at all, or make the product better. Only one remained, Chainalysis, which has real-world impact by helping law enforcement de-anonymizing blockchain users.
Given that the hype about blockchain started more than 8 years ago, but no major project has come to fruition, it should be clear to anyone that the hype was just that, hype.
That the hype didn’t translate into real-world adoption comes down to the usual confusion about what is actually different in a (decentralised) blockchain compared to a centralised database. Using access rights and hash codes to prevent alteration of database entries can be done in a centralised system just as well. The ‘trusted actor’, that is the entity allowed to make or alter entries, is the same in both cases – for CITES it is the national Management Authority (MA). The big difference in a (decentralised) blockchain system for CITES permits and tracking is that every MA in every signatory country would need to keep a full copy of the complete permit and tracking database.
That means tiny countries, for example Samoa, must install the massive IT infrastructure that will be needed to keep not just its own trade and permit data, but the millions of records created world-wide every year. Given low income countries struggle to come up with US$150,000 to install and run ASYCUDA eCITES, where are the millions for the new datacenter going to come from?
Scanlon is uniquely familiar with the inequity inherent in the CITES trade, where the countries of the Global South provide most of the exports but derive the least benefits (compare the price of a raw python skin to a Hermès handbag made from those skins), blockchain is not a useful solution to peddle. It would be much more equitable and feasible to provide a centralised system for electronic permits and traceability, and implement the required security and access rights on a central platform.
Even worse, a CITES permit and traceability blockchain system ONLY works if ALL countries adopt it. The touted security and trust benefits only come to pass if every single country uses the blockchain. Apart from the excessive cost, this constraint alone means that it will never happen. Particularly now that 19 CITES signatory countries have modernised to an electronic permit system and other countries are not too far away.
ASYCUDA eCITES is pragmatic and cost effective. It’s QR code basis provides a simple and effective system for instant, real-time verification and traceability, using just a smart phone. This low-cost hurdle is critical for global adoption.
By July 2025, CITES will have been in force for 50 years. A goal would be to roll out ASYCUDA eCITES system to all the countries who use the ASYCUDA customs system, which include the most low-income signatory countries, by CITES 50th anniversary of enforcement. This could and should have been done already, given how long the ASYCUDA eCITES system has been available. Better late than never it is gathering some momentum, even to the point of recently winning Asia-Pacific Trade Innovation Award.
In July 2023, Scanlon said on Boston’s News Station, WBUR, “We have a paper permitting system which is a 50-year-old permitting system that’s open to fraudulent use and corruption, whereas in 2023 we should have a fully automated system.”.
So why hawk a blockchain solution that DELAYS the adoption of electronic permits, even to the point it may never happen, when you are supposedly saying fully automated system should have happened already? Most companies have stopped pursuing real-world blockchain projects. The few that are left are just starting live tests and still in the proof of concept stage.
Modernising the CITES permit system has been discussed for over 20 years, it doesn’t need to be further postponed unnecessarily. The ASYCUDA eCITES system could be rolled out quickly to over 100 countries, if donor countries that are CITES signatories where willing to cover the cost. It is time to get the job done, let’s keep it simple stupid!