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Index
(1) Introduction
(2) Coca-growing and cocaine traffic to Europe
(2.1) Coca growing in the Andean region
(2.2) Cocaine-trafficking routes
(3) The route of weakest governance: cocaine trafficking shifts to West Africa
(3.1) The magnitude of the shift
(3.2) Division of labour in transatlantic drug trafficking
(3.3) Weak governance as a lure
(4) The rise in cocaine consumption in Europe: controlling supply as opposed to reducing demand
(4.1) The rise in cocaine consumption in Europe
(4.2) Controlling supply: management of prices
Elasticity of demand for narcotics
How the price of cocaine is set
The risk of displacement
(4.3) Managing consumption directly: reducing demand
(5) Political options I: controlling supply in drug-producing countries
(5.1) Option I: crop eradication
Aerial fumigation and manual eradication in the Andean region
Precarious results
(5.2) Option 2: alternative development
The paradigm of alternative development
The difficulty of defining goals
(5.3) Option 3: controlling chemical precursors
(6) Political options II: international control of supply in transit countries and
areas
(6.1) Transit control near producer countries
(6.2) Transit control near the final consumer
The effectiveness of seizures near the consumer
How Europe controls transit
Organised criminals’ ability to evade
(7)The end of Europe’s passivity
(7.1) Controlling transit in a strict sense
(7.2) Controlling transit in a broad sense
(8) Conclusions: Europe’s options for controlling supply
Abbreviations
(1) Introduction
The 52nd session of UN Commission on Narcotic Drugs
(CND) ended on 20 March 2009 in Vienna. The experts who took part
agreed on the future pillars of international drug control policy for
the next decade. At the same time, they assessed the results and
implementation of the agreements adopted at the 20th United Nations
General Assembly Special Session on the drug problem (UNGASS) in 1998.
The declaration of 2009 called for a significant reduction in the
growing of opium and coca over the next 10 years. The goal was not
achieved. Today, drug trafficking is the most lucrative branch of
organised crime, and within in it cocaine yields the most profits. In
2007, according to UN estimates, in the Andean region approximately
180,000 hectares of coca were grown, and nearly 1,000 tons of pure
cocaine were produced. Nearly 250 tonnes were exported to Europe that
year. In 2006, in Spain alone, the authorities seized 50 tonnes of this
drug. Twelve million Europeans have consumed cocaine at least once in
their lifetime. In 2007, in Europe there were 3.5 million young and
adolescent consumers. In Spain, 3% of the population regularly consumes
cocaine. This group accounts for about 20% of all those in Europe who
use the drug.
There is a new dimension to the cocaine trafficking
bound for Europe, and this requires more attention. After a significant
rise in recent years, it is now estimated that nearly 50 tonnes of
cocaine pass through West Africa each year before reaching European
soil; in other words, one fifth of the cocaine that makes its way into
Europe. The fragile States of West Africa are not in a position to take
on Latin American organised crime gangs, which are much stronger in
terms of resources. The establishment of the illegal drug market in
those weak States goes hand in hand with a rise in instability, growing
levels of
corruption, possible financing of non-governmental armed groups and
high incidence of cocaine use.
Drug consumption follows the market laws of supply and
demand: the higher the price of the drug, the lower the demand, and
consumption drops. Cocaine’s price is high even though its production
costs are very low. What keeps prices high are penalisation of
trafficking in and consumption of drugs and the control of supply. This
system poses high risks for those working in this illegal market, who
make up for this through charging high prices. At the same time, the
control regime involves frequent drug seizures, which makes the product
more scarce and that also contributes to raising prices. Therefore, any
intervention in the chain of creation of added value must be evaluated
in terms of the impact it has on prices. Embracing this logic has
imminent implications for drug control policy: all measures to control
supply, be they repressive, penal or linked to development policy, must
be
evaluated in light of the effect they have on the final price of
cocaine.
Cocaine’s production and marketing chain follows an
exponential price curve: the further the cocaine is from the producing
country in the commercial chain, the higher its market price will be.
For instance, a kilo of high-purity cocaine has a street value of
nearly €80,000 in Spain, and that is a conservative estimate. The same
kilo in Colombia is worth about €1,200. However, the coca-growing
farmer gets no more than €250 for the coca leaves needed to produce
that kilo of the drug. Because of this exponential increase in value,
potential situations of a shortage of coca leaves or cocaine in the
Andean region would not have visible effects on the final price in
Europe or on consumption levels. As far as controlling supply is
concerned, it is better to intervene in the chain of creation of
cocaine’s added value only when the price of the drug is high
enough for the shortage to have an effect on that price –far from the
producing countries and close to the final consumer–.
For traffickers, the risk of getting caught increases
with the amount of levels of control they must dodge. This increase in
risk is reflected in the price of the drug. At the international level,
there tends to be intervention at each point in the chain of
production, using both penal and legal tools as well as political ones
and others based on development: control of chemical precursors, forced
eradication of coca crops, alternative development measures and transit
control. This Working Paper aims to analyse the intervention measures
recently reaffirmed by the CND. Using drug prices as a starting point,
we analyse the problem of drug trafficking and assess the efficiency of
policies to control supply. But no drug control policy can be based
solely on limiting supply. It must also feature measures to reduce
demand. However, the goal of this study is to review European foreign
policy tools involved in controlling supply, leaving aside domestic
policy measures designed to cut demand, the efficiency of which is
widely
recognised in most countries of the EU.
(2) Coca-growing and cocaine traffic to Europe
(2.1) Coca-growing in the Andean region
The three main coca-growing countries –Bolivia, Peru and Colombia–
produced 994 tonnes of pure cocaine
in 2007, according to estimates by the United Nations Office on Drugs
and Crime (UNODC). The 181,600 hectares used to grow coca leaves in
those countries correspond to a surface area nearly three times the
size of the city of Madrid. Total coca crops have been growing non-stop
since 2003. In 2007, 27% more crops were planted than in 2003; in
Bolivia the increase was 5% and in Peru it was 4%. However, the total
area was 20% below the record posted in 2000 (Figure 1). Right now the
main coca producer is Colombia, with nearly 100,000 hectares. In Peru,
the country that was the main producer until 1997, 50,000 hectares are
being used to grow coca and in Bolivia the figure
is 30.000. In Ecuador and Venezuela, only small patches of coca-growing land have been detected and they tend not to surpass 100 hectares.
Figure 1. Coca growing in Bolivia, Colombia and Peru, 1997-2007 (hectares)
Source: UNODC,World Drug Report 2008, Vienna, 2008.
Even though the amount of land used to grow coca is
smaller than the estimate for 2001, cocaine production is higher. This
is because growing methods are more efficient, and the processes for
extracting the drug and refining cocaine are more powerful. This has
allowed for higher production even though Colombian growers, faced with
campaigns of massive eradication of coca, are forced to move their
crops around constantly, parcel them up or even use land that yields
less.
Pressure to do away with coca is so great that today in Colombia coca
is grown in 23 of the country’s 32 provinces, and in many of these
there was not a coca-growing tradition. As in many other regions where
organic drugs are grown, in Colombia coca-growing is concentrated in
areas of conflict or post-conflict, where sovereignty and the State’s
territorial control are limited or non-existent. The Revolutionary
Armed Forces of Colombia (FARC), recidivist paramilitary groups, new
armed groups (or emerging gangs)
and an endless number of criminal organisations large and small take
part in the production chain. Each actor tries to obtain part of the
value added, either by oversight of the crops, through direct control
of production or by taking part in the internal or overseas trafficking
of cocaine. In Peru, for a long time the coca-growing areas were also
the areas where the Shining Path rebel group was active; it is now
re-emerging as a narco-guerrilla organisation.
As in Peru and Bolivia the law allows the growing of coca up to a
certain amount, there is not the same close relationship between
armed groups, organised crime and coca farming as exists in Colombia.
Given the semi-legal status of coca-growing in Bolivia
and Peru and the lack of massive eradication campaigns, the growing of
it in those countries has not proliferated as much as it has in
Colombia and is concentrated in certain regions. Legal growing meets the demand for the coca used for traditional
purposes –chewing it, making coca-leaf tea, medicinal purposes and rituals– which, unlike in Colombia, are widespread in
Bolivia and Peru. In January 2009, the government of Evo Morales literally incorporated the phrase ‘Coca yes, Cocaine no’
into the country’s new constitution.
As coca-growing is partially legal in Bolivia and Peru, but the areas
used for this are not easy to detect or control, it is practically
inevitable that surplus crops are diverted to producing cocaine.
Despite legal problems, Morales recently announced he would increase
the amount of coca that can be grown legally in his country. Alluding
to the Single Convention on Narcotic Drugs of 1961, the fundamental
charter of international drug control efforts, which bans the growing
and consumption of coca leaves, the International Narcotics Control
Board (INCB) tends to criticise the government of Bolivia vehemently
over this policy.
In an impassioned speech on 11 March 2009, President Morales sought to
persuade the members of the CND and the international community to
remove coca leaves from the list of narcotics declared illegal by the
Single Convention and to depenalise it.
The EU, acknowledging the legitimacy of coca growing
for medicinal and traditional uses, has been considering for years now
the possibility of carrying out a study of legal demand for coca in
Bolivia. The idea of such a study is to define how many hectares are
needed to meet demand for legitimate purposes, thus avoiding excess
production for
illegal uses. But no such project has been devised so far, perhaps
because the Bolivian government has no interest in its being carried
out.
(2.2) Cocaine-trafficking routes
How is cocaine reaching Europe from the Andean region? In 2007, 121
tonnes of cocaine were seized in Europe in a total of 72,700 raids.
Aside from air routes, EUROPOL has identified three main maritime paths
for
sending cocaine to Europe, within which there are many variations and
modes of transport. All of them lead to the Iberian Peninsula, or at
least pass through it:
-
The northern route: Caribbean-Azores-Portugal/Spain.
-
The middle route: South America-Cape Verde Islands/Madeira/Canary Islands-Western Europe.
-
The African route: South America-West Africa-Portugal/Spain.
In the first two, the northern and middle routes, when
the cocaine reaches the Atlantic archipelagos (the Canary Islands or
the Azores, for instance) in it usually transferred to fishing vessels
or speed boats for shipment to the European continent. Increasingly,
the final transit countries for the cocaine before it reaches Europe
are Venezuela and Brazil, followed by Argentina, Ecuador, Suriname and
the former colonies and overseas territories of France, the UK and the
Netherlands. Other countries of the Caribbean, and, more and more,
Mexico, are also cited as stopover countries for South American cocaine
bound for
Europe.
In recent years, Venezuela has become a major staging
ground for cocaine trafficking from Colombia. From Venezuela the drug
is distributed, supplying the US and European markets. As the
government of President Hugo Chávez has refused to undertake greater
levels of cooperation with US anti-drug agencies and legal institutions
–it does not extradite people to the US– Venezuela has become a
relatively safe haven for Colombian traffickers.
Compared to Colombia, Venezuela offers big advantages for cocaine
traffickers, thanks to corrupt security forces, a highly permeable and
practically uncontrollable jungle border spanning more than 2,000 km,
and patchy efforts at crime-fighting. Cocaine is shipped from Venezuela
in speedboats and ‘semi-submersible’ vessels to the Lesser Antilles and
from there to the US and European markets. An
ever-growing amount is shipped directly from Venezuela to West Africa.
Brazil shares with the three main coca-producing countries 7,000 km of border in the
Amazon basin, which, because of its topography and vegetation, makes effective control of drug trafficking more difficult.
Drug-trafficking rings take advantage of the porous nature of the
Amazon region and ship cocaine to Brazil along rivers that are
traditional routes for contraband. In this way they dodge stricter
controls that are in place at ports and airports in the three
coca-producing countries.
Map 1. The main routes for Europe-bound cocaine trafficking
Source: © Can&Able, 2009.
The wholesale cocaine trade with Europe is dominated
mainly by Colombian organisations that generally work with Spanish
distribution networks, although lately they do it more often with
Nigerian and Moroccan gangs.
Colombian traffickers have shown little interest in the retail trade
and street-level dealing. Although in Spain Colombians are frequently
identified as drug peddlers, one can assume they have little to do
with the wholesale networks operating out of South America.
(2.3) Entry points
The main entry points include Spain, Portugal and the Netherlands, although Germany,
Belgium, France and the UK also serve this purpose.
EUROPOL distinguishes between two main entry and redistribution points:
the north-western and south-western regions. The south-west region,
featuring Spain, Portugal and the Atlantic archipelagos, are the main
point of arrival for Andean cocaine. The Iberian Peninsula is an ideal
entry and redistribution point because of abundant trade links with the
cocaine-producing region and transit countries, an historical affinity
with former Spanish- and Portuguese-speaking colonies, large and
well-established networks of emigrants, closeness to Africa and
extensive coastlines. The north-west region, which includes the north
of France, Belgium, Germany, the Netherlands and the UK, is the second
most important conduit for cocaine arrivals. The factors that lure
organised criminals there are highly developed infrastructure, close
relations and numerous links with certain transit countries, the
largest ports and airports in all of Europe,
access to trans-European corridors, and also emigrant colonies.
Other, smaller amounts of cocaine are brought in regularly by ‘mules’ travelling on airlines from all the countries of South America to Europe. The US
State Department considers all the countries of the region to be transit nations, with the exception of Uruguay.
These so-called ‘mules’ swallow cocaine in small packets and transport
it inside their digestive tract, or conceal it in their clothes or
their luggage. Frequent points of departure for these human couriers
are the former colonies and overseas territories of France, the UK and
the Netherlands in the Caribbean, and French and British Guyana.
Lately, Mexico –generally cited as a staging ground for drug
trafficking to the US– is emerging more and more as a point of
departure for ‘mules’ bound for Europe. A direct air courier route has also been identified running from
Brazil to West Africa.
For some time the authorities in the Netherlands reacted to the
increase in drug trafficking on planes by imposing a policy of 100%
control at Schiphol airport in Amsterdam. That meant that the
authorities checked every passenger on flights from countries
considered to be high-risk for cocaine trafficking (the Dutch
Antilles, Suriname and Venezuela). These inspections, which have since
been reduced, landed an average of 175 arrests per month in 2005.
(3) The route of weakest governance: cocaine trafficking shifts to West Africa
(3.1) The magnitude of the shift
‘West Africa is under attack from Latin American drug traffickers’:
Antonio María Costa, secretary general of the UNODC, tends to use
strong words to draw attention to the sharp rise in the cocaine
business in West Africa. In 2008, a report from the secretary general
of the UN called on the Security Council to consider taking sanctions
against Guinea-Bissau to force the small coastal country to fight
harder against cocaine trafficking in its territory and maritime zones.
Since 2005 more evidence has emerged that Colombian and Venezuelan
gangs were setting up shop in West Africa as a safe haven, turning the
region into a beachhead for shipping cocaine to Europe. There are many
reasons that explain why the drug business is taking root in the
region. In general, a mix of push and pull factors are at play: growing
demand for cocaine in EU countries, tighter controls on traditional
direct routes between South America and Europe, a declining cocaine
market in the US and excellent conditions for setting up markets and
undertaking illegal activities in West Africa. For the UE, the establishment of drug trafficking ante
portas
posed a major challenge for EU security and public health. If a cocaine
emporium is established on Europe’s outskirts, one can expect not only
growing demand for cocaine but also the emergence or worsening of a
series of secondary factors that can become serious security problems
for the EU and its member countries. Whereas until recently the
authorities in Africa did not tend to seize even one tonne of cocaine a
year, in the period 2005-08 alone they confiscated 48 tonnes in Western
Africa. (Figure 2).
Figure 2. Cocaine seizures in central and western Europe and in central and western Africa, 2001-06 (tonnes)
Source: UNODC,World Drug Report 2008, Vienna, 2008.
Given the shortfalls in the security forces and rule
of law in that region, which is home to some of the world’s poorest
countries, the amount of cocaine that is seized is not as
representative as in other parts of the globe. One can presume that the
real amount of cocaine that is trafficked in the region is a multiple
of the volume that is actually seized. The UNODC’s conservative
estimate is that every year nearly 50 tonnes of the drug move through
West Africa; in other words, one-fifth of the cocaine bound for Europe
goes through the region. That is more or less a quarter of the
wholesale trade, is worth about US$450 million and ends up in the hands
of African
middlemen and helpers.
There is some evidence that in particular Ghana,
Guinea-Bissau (which has earned a reputation as Africa’s first
narco-state), Guinea, Cape Verde and Senegal have become staging
grounds for the largest flows of cocaine headed for Europe. However,
the true magnitude of drug trafficking in other countries in the region
cannot yet be ascertained, because of the lack of verifiable
information on illegal activities and high levels of corruption
associated with such activities.
The region’s geographical location, with countless uninhabited islands,
un-monitored coastlines and thick vegetation, offer a wide range of
potential trafficking routes. Drug trafficking-related activities have
been reported in most countries, although lately it is happening most
frequently in Sierra Leone, Benin and Togo.
There has been a significant increase recently in investments by South
Americans in some countries of West Africa, such as purchases of real
estate or fish- or wood-processing plants. One might assume that the
acquisition of this property, possibly designed to mask illegal
activities, points to the establishment of lasting structures in the
region. This would allow for expansion of drug trafficking in
the future.
(3.2) Division of labour in transatlantic drug-trafficking
It is not easy to analyse how the division of labour works between
South Americans, Europeans and Africans, due to scant reliable
information. However, according to international drug control agencies,
one can discern two different procedures. In the first of these,
African middlemen are paid –similar to the interaction between
Colombian drug cartels and Mexican associates in the 1980s and 90s– in
small amounts of cocaine for their transport, merchandise-delivery and
transfer services. These small amounts of what one might call ‘cocaine
currency’ tend to be sent to Europe, either through human couriers
travelling on commercial flights or through the mail. Most of the African ‘mules’ arrested in European airports come from Guinea, Nigeria, Mali and Senegal. More than half of the
airborne drug traffickers are of Nigerian origin, even on flights that do not originate in Nigeria.
Nigerian gangs often control street-level drug dealing in Europe. In
France, most of the foreigners arrested for offenses related to drug
trafficking are Nigerian. Compared to other ethnic groups, they stand
out because of their flexibility and strong ties among members of their
ethnic groups. ‘Mules’ are not normally members of criminal gangs, but
rather used by organised traffickers as a ‘means of transport’ in the
literal sense: they are loaded up at their point of departure and
unloaded when they arrive at their
destination.
In the second procedure, which involves wholesale
trafficking, large cargos of cocaine from South America are transferred
on the high seas to fishing vessels or speedboats, which have an
African crew generally accompanied by a South American supervisor. They
take the drugs to a temporary storage facility on the African
continent. There, the cocaine is repackaged and sent to Europe aboard
yachts, freighters, again fishing vessels or speed boats, mainly to
Galicia and the northern coast of Portugal.
The Spanish and Portuguese authorities seized 69% of all the cocaine
confiscated in Europe in 2006. Whereas Colombian groups have been all
but overtaken by Mexican competitors in trafficking to the US, it is
Colombians and also Venezuelans that dominate wholesale cocaine
trafficking to Africa. The governments of Brazil and Colombia recently
sent police and investigative units to West Africa, hoping for an
improvement in cooperation between security and legal
authorities in the two regions.
A rise in seizures by the Portuguese coast guard seems to suggest the
formation of a trafficking route that starts off from Brazil, goes
through Guinea-Bissau and Cape Verde and ends up in Portugal.
It is possible that ships carrying containers are also
used to camouflage cocaine. As part of a series of spot checks during
one month in 2007, evidence was gathered from 50 containers carrying
wood from South America to West Africa. For two regions with abundant
cheap wood, these amounts could generate suspicion and doubt, not just
among government security forces –it seems obvious that wood is used as
a cheap cover for concealing cocaine–. At the same time, every month
thousands of containers are shipped from West Africa to north-western
Europe, and many are registered as empty and thus not closely
monitored. Aside from maritime traffic, South American drug traffickers
use small planes or light aircraft that are re-fitted to endure
transatlantic flights that start in Colombia, Brazil, Venezuela or
Suriname and end up in illegal airstrips in West Africa.
But the spot where the cocaine-laden planes land in West Africa is not
always clear, as it is just a moving point for the transfer of the
drugs for later maritime shipment. There is some evidence that smaller
amounts of cocaine are moved through the interior of coastal states to
neighbouring countries, often those which have direct, regular flights
to European capitals. There have also been cases, probably rare ones,
in which drugs were shipped from the beaches of the Gulf of Guinea over
land to Morocco and from there to Europe, following the classic routes
for sneaking in marijuana and contraband. For this reason the capital
of Mali, Bamako, has been cited as a major transit point for South
American cocaine even though
the city is 1,000 km from the coast.
(3.3) Weak governance as a lure
Aside from Nigeria, Ghana and Senegal, probably no State in West Africa
is capable of confronting successfully and on its own the organised
crime gangs that are settling on their territory. One hundred kilos of
pure cocaine, dumped on a beach in Guinea-Bissau, would have a market
value in Europe that is equivalent to all the development aid that the
country receives in a year. Several hundred kilos of cocaine allegedly
arrive weekly to Guinea-Bissau.
The US$450 million in drug profits that UNODC estimates stay in the
hands of African intermediaries each year are equal to all the foreign
direct investment made in Ghana, Guinea-Bissau, Guinea, Mali and
Senegal in 2005.
Barring three countries, all the members of the Economic Community of
West African States (ECOWAS) are among the least developed countries of
the world, according to the United Nations’ ranking. And
five of them are the world’s least developed countries.
The fragile or failed States of West Africa conduct in a very limited fashion the
functions of governance in the areas of security, social policy and legitimacy/rule of law.
Their exercise of the monopoly on legitimate use of force against
organised crime and in controlling the country’s territory is deficient
at best. As an example illustrating the consequences of the decay of a
State and its governance functions in the area of security, it is often
noted that these days Guinea-Bissau has no jail on its territory. In
West Africa, cocaine trafficking rings find ideal conditions. It is a
perfect geographical prolongation of the coca-producing countries; weak
state structures are the norm, with limited territorial control and
legal systems with limited scope. Both regions offer certain
‘comparative advantages’
for criminal elements, which encourages the establishment of
trans-national black markets and easy creation of illegal added-value.
Due to growing pressure from government anti-drug agencies along
traditional smuggling routes, West Africa attracts people involved in
the cocaine trade because of the favourable operating conditions it
offers. The result of this is a rise in organised crime activities in
the region. As the drug trade takes root, consumption of drugs also
increases. This has been observed in many transit countries, where
higher demand is fuelled by more abundant supply. This happens in
Central America and Brazil, but also in Guinea-Bissau. In many cases
the rise in consumption stems from the distribution of ‘cocaine
currency’.
Besides this, along with drug trafficking what is also expanding is a
series of secondary effects such as corruption, violence, money
laundering, and trafficking in light and small weapons. The most
visible example of this effect has been observed in Mexico, where the
conflict with and among drug cartels claimed more than 6,000 lives in
2008, according to official figures.
In the drug trade, violence plays the same role that
trade legislation and arbitration bodies perform in markets that are
legal. The absence of these institutions in illegal sectors leads to
pockets of self-regulation by criminals in the illegal market.
According to some estimates, more than 80% of drug-related violent acts
stem from the resolution of economic conflicts or criminal elements
competing for leadership. Contrary to what one might presume, only a
small percentage of drug-related violence stems from people being high
on drugs or crimes involving people seeking money to buy them.
In West Africa, all it takes is a moderate bribe to neutralise the
already weak control that authorities have on their territory, or the
police. There have been rumours of bribes being paid to Cabinet members
and senior military officials with money from drug trafficking in some
countries of the region, and it comes as no surprise that this has been
linked mainly to Guinea-Bissau. The establishment of trans-national black markets is accentuating the
region’s development problems and encouraging a tendency toward illegal activities within these societies.
Aside from simple bribes paid with money from drug trafficking, there are security
concerns that go beyond corruption. The UNODC and security forces in
several European countries worry about links developing between
cocaine traffickers and certain political movements or insurgent
groups. The fear is that such groups could take in large amounts of
money with drug trafficking. There is ample evidence that drug money
was used in coups which were carried out or attempted in August and
December of 2008 in Guinea-Bissau and Guinea. The cocaine trade has
also been linked to growing political violence in Guinea-Bissau in
2009, including the assassinations of President Vieira and the
commander-in-chief of the armed forces in March, and of several
ex-ministers and a presidential candidate in June.
The fear is that drug money could be used to finance more corps, prop
up pliant politicians or prolong armed conflicts that have been
simmering for years in some countries of West Africa. Along the Sahel
belt, an area of limited if not totally absent governability, there is
concern over possible collaboration between Tuareg rebels, the North
African branch of al-Qaeda and drug traffickers. Were a
cocaine-trafficking conduit running from West Africa toward Libya and
Egypt to be established along traditional routes for smuggling
marijuana, terrorists operating in the region could reap huge
profits. This is a recurring worry for the US Government.
(4) The rise in cocaine consumption in Europe: controlling supply as opposed to reducing demand
(4.1) The rise in cocaine consumption in Europe
The first anti-drug strategy that the EU adopted for the period 2000-04 was aimed mainly
at achieving a ‘considerable reduction’ in consumption and availability of drugs in Europe. This goal has not been met. Consumption of narcotics increased in almost every category of drugs, including cocaine. It is estimated that 12 million Europeans have tried cocaine at least
once in their life; in 2007 alone, an estimated 3.5 million adolescents and young adults used the drug.
Altogether, nearly 4.5 million Europeans sniff cocaine regularly.
According to some estimates, 250 tonnes of cocaine are smuggled to
Europe from South America each year. While cocaine consumption among US
adults has dropped by 50% compared to 20 years ago, consumption in
Europe has been on the rise since the mid-1990s.
Although the US remains the largest market for cocaine, with an annual
import volume of around 450 tonnes, Europe is catching up quickly:
whereas the amount of cocaine seized in the US has been on the decline
since 1990, at the same time there has been a significant rise in
seizures in Europe and West Africa. This is a clear indication of the
growing volume of cocaine making its way into Europe. In the EU,
cocaine-related crimes rose 62% between 2000 and 2005. Meanwhile, the
increase in Europe is not distributed evenly among EU countries. In
Spain, 16,799 cocaine-related crimes were recorded in 2000; but the
number soared to 46,200 in 2006.
In Spain, Italy and France, cocaine consumption has trebled in recent
years and in the UK it has quadrupled. Britain accounts for 26% of
Europe’s cocaine consumers, followed by Spain with 24% and Italy with
22%. With 3% of the adult population consuming cocaine in 2008, Spain
leads the countries of the EU. At the same time, consumption has grown
significantly in Spain and Britain among
adolescents: 6% of Spanish adolescents aged 15 and 16 have consumed
cocaine at least once in their life.
(4.2) Controlling supply: Management of prices
In the war on narcotics there are two fundamental strategies: (1)
controlling the supply of drugs; (2) reducing demand. Tools for
controlling supply can be applied in each phase of the production and
commercial chain
involving cocaine, from the growing of the raw material, coca leaves,
to sale of the drug to the final consumer. These strategies include:
-
Controlling chemical pre-cursors.
-
Eradicating coca crops.
-
Alternative development measures (AD).
-
Enforcement measures along transit routes and at borders.
-
Prosecution in producing, transit and consumer nations.
Elasticity of demand for narcotics. Tools for
limiting supply seek to have an impact on prices as a lever for cutting
consumption. The implementation of tools for controlling supply is
based on the idea that prosecution of drug offenses, eradication of
coca crops, seizure of chemical pre-cursors and cocaine or its base
products(coca leaves, coca paste or cocaine base) make the drug harder
to obtain and thus raise its price. At the same time, when the price
rises, both at the wholesale and street-dealing level, demand for
cocaine supposedly falls. In order for demand and consumption to be
manipulated through price, consumers must react to price changes by
adapting their consumption habits: reducing it when prices go up, and
increasing it when they go down. In economics this mechanism is defined
as elasticity of demand. It was once believed that narcotics,
especially alkaloids, had very rigid elasticity that was close to zero.
In other words, consumers would put up with price increases and pay any
price to obtain drugs, because of high levels of addiction. But now
most experts believe that drugs’ elasticity of demand is relatively
high, and that consumption patterns do react to changes in price. In the case of cocaine, the demand elasticity is said to be between
-0.5 and -1. That means that if the price of the drug goes up 10%, demand will go down between 5% and 10%.
An alternative mechanism is cross elasticity of demand: a rise in the
price of one drug causes more consumption of another drug as an
alternative. But with drugs it is hard to ascertain the relationship
between different kinds. Because of simultaneous and frequent use of different drugs –a habit that is common among addicts– one does not know for sure
if some drugs are substitutes or complements.
Given the uncertainty surrounding drug consumption, control measures
should not be limited to one class of drug, but rather address all
similar narcotics in order to avoid potential substitution mechanisms,
ensuring that price levels remain comparably high.
On one hand, the high price of drugs reflects the
risks taken by those participating in the drug trade, such as being
prosecuted by law enforcement authorities or falling victim to the
violence that is endemic in illegal markets. At the same time, drugs
and their precursors that are lost in seizures and checkpoints keep
prices high or even push them higher still, a phenomenon that can be
seen of late in Mexico. Cocaine and heroine are products that come from
the earth, with low production, growing and refining costs in countries
with very low wages and abundant land for sowing crops. Under normal
circumstances, the price of a dose of cocaine or heroin would have the
same commercial value as a tablet of aspirin.
The risks stemming from the illegality of drugs and the costs that
result from losses in frequent seizures are responsible for their high
prices. In that sense, drugs are no different from other banned
substances. This is one of the main arguments of those who oppose legalisation, calls for which reappear with a certain regularity:
in fact, it is assumed that legalisation of drugs would trigger a fall
in their commercial value, as prices would be freed from the risks and
costs of illegality. If a drug is cheaper, consumption of it would go
up quickly, assuming that drugs’ elasticity of
demand is as acute as it is said to be.
Drug consumption continues to be based on the logic of
prices, and that is what supply-control mechanisms are based on.
Intervention in the commercial chain of a drug is justified when it
affects its final price. The real effect depends on the value that is
added to the drug by the threat of criminal prosecution or seizures,
which works as a
royalty tax on illicit goods. The following calculation serves as an
example of this logic.
How the price of cocaine is set.
For the amount of coca leaves needed to produce a kilo of cocaine, an Andean grower receives about €250. That kilo has a commercial value of nearly €1,200 for a middleman in the producer country. That same kilo, while in transit,
has a wholesale price of between €12,000 and €15,000.
This kilo of relatively pure cocaine, later mixed with additives, sells
on the streets of Madrid for €80,000, depending on the purity and the
number of doses. Figure 3 illustrates the multiplication of value
throughout the production chain. Rather conservative estimates are that
fluctuations in the prices of coca leaves in producer countries would
have no effect on the final price of the drug.
Figure 3. Multiplication of cocaine’s value in the commercial chain
The value of the raw material, that of the coca leaves, is too low and accounts for a
tiny, almost invisible part of the wholesale price or the final price.
In the hypothetical case in which the price of the leaves needed to
make a kilo of cocaine were to multiply by 10 and reach €2,500,
a gram of pure cocaine sold on the street would cost only €2.5 more.
Keeping in mind that in Spain in 2006 cocaine had an average purity of
50%, multiplying the price of coca leaves by 10 would mean added cost
for the final consumer of just over €1 per gram.
Considering that the average price in Spain is between €50-60
per gram, one euro more –the dealer probably would not even charge it –
would have no influence on a person’s decision on whether to consume.
The risk of displacement. Efforts to control the
supply of drugs always run the risk of being negated by the ‘balloon’
effect: when you squeeze a balloon hard, the air inside moves and
bulges out somewhere else. The balloon metaphor is a vivid illustration
of a problem that simply shifts somewhere else, rather than
disappearing when it is resolved. In the war on drugs, we frequently
observe displacement effects in the eradication of crops, alternative
development programmes –illicit crops being replaced by others which
are legal– and controls on transit routes. An increase in government
surveillance of a region or a transit route, generally just over the
short term, causes a drop in supply and raises prices, or leads to more
additives in the final product. If there is a margin for finding
alternatives, thanks to weak or limited governance structures, in a
short span of time the aforementioned balloon effect occurs. This is
true for growing and refining, as well as transport routes. If a
product is illegal, then limited governance, especially in the realm of
security, offers comparative advantages to its sellers.
Many countries have the right weather and geographical
conditions for growing coca leaves and opium. However, just four of
them (Afghanistan, Bolivia, Colombia and Peru) account for 90% of all
coca and opium crops.
There are also few countries that attract massive flows of drug
trafficking. Therefore, it should be a central goal of international
drug enforcement agencies to raise the costs of illegal activities in
those countries.
4.3. Managing consumption directly: reducing demand
Drug-producing countries tend to stress that consuming nations are
equally responsible in the international war on drug trafficking.
‘Without demand, there is no supply’ is their ceterum censeo in
multilateral anti-drug forums. As opposed to controlling supply, the
idea is that it is up to consuming nations to reduce demand as their
share of the job in the battle against narcotics. Strategies for
cutting demand do not address the price of illegal drugs, which is a
tool for controlling supply, but rather go directly to managing
consumption. These measures, which have proven to be successful in some
countries of the EU, are based on prevention, therapy and
harm-reduction. The goal is to warn potential consumers of the dangers
of using drugs, treat addicts in a reactive fashion and reduce harm
associated with drug addiction, such as being infected with AIDS and
the worst kinds of hepatitis. These tools, long applied in Europe,
include public awareness campaigns, arrangements for drug consumption
under medical supervision, supplying addicts with clean syringes and a
wide variety of therapeutic approaches. But they also feature
penalisation of consumption and criminal prosecution for it, which,
along with the social stigma associated with drug use, has a strong
dissuasive and preventive effect. At the same time, the incarceration
of consumers and small-time dealers, who are often drug addicts
themselves, are ways to control demand. It is hard for addicts to
consume drugs in jail. Statistically speaking,
incarceration of drug consumers reduces demand for narcotics.
As international anti-drug policy encompasses a wide
range of foreign and domestic policy, many governments have a hard time
establishing the right balance between controlling supply and reducing
demand. Tools for controlling demand are intensely debated because they
seek to administer consumption but not repress it. In almost all
international conventions and statements on the world’s drug problems
we find a balanced
approach between policies to control
supply and demand. That means producing and consuming countries should
be obliged to work together to fight the problem. The European Council
reconfirmed this concept of shared responsibility in its European Drug
Strategy (2005-12) as a
foundation of EU anti-drug policy.
At the same time, producing and transit countries have
been forced to acknowledge the need to adopt and implement policies for
cutting demand, as they have been hit by growing levels of consumption.
Some statistical analyses of the drug market in the US show that tools
for controlling demand are more efficient than those aimed at
controlling supply.
However, the anti-drug efforts of many governments concentrate on
mechanisms for cutting supply. The CND, in a reflection of the position
of many its member countries, considers supply-side tools to be
fundamental in the international effort against drugs. They confirmed
this in the political declaration and plan of action adopted at the
52nd session. European states failed in their effort to seek a fundamental change in international anti-drug policy.
They did not manage to impose an approach more focused on public
health, harm-reduction and controlling demand. The hoped-for change was
not achieved despite strong international support for Europe’s
positions, such as the manifest from the Commission on Drugs and
Democracy, made up of the former Presidents of Brazil, Colombia and
Mexico (Fernando Henrique Cardoso, César Gaviria and Ernesto Zedillo).
It declared the war on drugs to be a failure, and called for a revision
of policies based on repression and instead an
approach based on public health.
(5) Political options I: controlling supply in drug-producing countries
How should one design an efficient international
supply-control policy that would be a conceptually appropriate
companion to domestic policies for reducing demand? What political
options do the EU and its member states have for effectively
controlling the supply of cocaine and its final price, and consumption
within the EU? Here will analyse three supply-control tools for
drug-producing countries, looking at their efficiency in relation to
costs and how they function: (1) crop eradication; (2) alternative
development; and (3) controlling chemical precursors.
5.1. Option I: crop eradication
Aerial fumigation and manual eradication in the Andean region. Over the
past three decades, US governments have pursued coca crop eradication
programmes as an adequate measure in the international battle against
narcotics. The State Department says crops are the weakest link in the
cocaine production chain because of their high visibility.
Since the 1980s, US governments have either supported eradication
programmes in Latin America or carried them out themselves. Many times
US representatives have called for cooperation from their European
colleagues. European refusal to get directly involved in eradication
efforts has irritated the US on more than one occasion.
The EU and its member states have an ambivalent position on
eradication. The EU drug strategy does not rule out eradication
altogether, and says it is important when associated with alternative
development programmes. But the European Monitoring Centre for Drugs
and Drug Addiction (EMCDDA), based in Lisbon, questions whether
eradication is effective.
How does eradication work? Under its Andean
Counterdrug Initiative, the US State Department provides financing and
technical support for supply-control programmes in seven Latin American
countries. The basic pillar of the initiative is Plan Colombia,
initially developed by President Andrés Pastrana in 1999. At first it
proposed an overall approach addressing the war-torn country’s peace
process and the drug problem. During the two presidential terms of
George W. Bush, the US Government provided more than US$6 billion to
the Colombian government under Plan Colombia. Recently, and
unexpectedly, the Obama Administration confirmed the US commitment to
the Plan Colombia and contributed nearly US$500 million from the budget
for the new fiscal year.
Even though Plan Colombia was initially an all-encompassing initiative,
most of the resources have gone to military purposes such as
strengthening and training the Colombian army, buying new equipment and
weaponry, and waging campaigns of mass eradication of coca crops. In
Colombia, coca and opium poppy plants are either uprooted manually or
fumigated from planes with the herbicide glyphosate. In the latter
case, US contractors work with the Colombian national police. In 2007
alone, nearly 160,000 hectares were eradicated, according to the UN.
According to the US Justice
Department, 2007 was the sixth straight record year for eradication.]
Because of probable environmental damage from aerial
fumigation and improved territorial control by Colombian security
forces, manual eradication of coca crops is used more and more. In
2008, for the first time more crops were eradicated manually than from
the air. In the 1990s the US had financed manual eradication programmes in Bolivia and Perú. The so-called Plan Dignidad, launched under the Presidency of Hugo Banzer in 1997 with US assistance,
temporarily achieved a huge reduction in illegal crops in Chaparé,
one of Bolivia’s main coca-growing regions. But the success was
short-lived, and the coca-growing industry simply moved to other
areas, mainly to Yungas.
In Bolivia, the coca-growers are very well organised and tend to put up
fierce resistance to campaigns of forced eradication –which
have been implemented even by President Evo Morales, who was a coca
grower himself– to reduce crops used to make cocaine.
Precarious results. The growing amount of crops
eradicated in Colombia only appears to be a success. Many of the
effects of eradication can be neutralised with more efficient growing
and refining methods, by replanting or by shifting crops to areas that
are less accessible and visible. These evasive strategies are reflected
at the price level: even though prices of coca leaves in the three
producer countries are above the average seen in the 1990s, the
commercial value of cocaine in Europe and the US has been falling since
the 1980s. This casts serious doubts on the effects of eradication. If
eradication campaigns helped limit the availability of cocaine for
consumers, they would be seen in a different light. However, in illegal
markets in Europe and the US cocaine has always been available to
consumers.
The argument that each coca leaf harvest that is destroyed means less
cocaine for consumers is simplistic and inaccurate: coca-growing and
its refining into cocaine are governed by the laws of supply and
demand. Their production is in determined by demand. A given amount of
coca leaf or cocaine that is destroyed or seized is replaced, with no
effect on the market. Major variations in the commercial value of coca
leaves would not have a significant effect on the final price of
cocaine or on the habits of consumers, as we showed earlier. From a
commercial and price-level standpoint, eradication of crops does not
achieve the desired result, so long as there is a margin for the
balloon effect. As there are abundant areas in the Andes region with
limited governance, neither the price nor consumption levels of cocaine
are influenced by eradication programs, no matter how strict they are.
Aerial fumigation and displacement of crops has negative side effects. The potentially
harmful effects of glyphosate on persons, flora and fauna have been
the subject of intense debate.
The displacement of crops to increasingly far-flung and previously
untouched regions is hurting sensitive ecosystems. Deforestation and
the use of fertilisers and other chemicals destroy the tropical jungle
and threaten biodiversity.
In October 2008, the Government Accountability Office, the investigative branch of the US Congress, released an
evaluation of Plan Colombia that
concluded that the eradication campaigns had had only modest results.
The improvement in the security situation received a positive
assessment, as did progress in reducing opium crops, although these are
less visible than those of coca leaves. However, the report said the
central goal of Plan Colombia –reducing the growing of coca leaves and
production of cocaine by one-half between 2000 and 2006– had not been
achieved. In fact, the GAO said that in 2006 the volume of coca grown
surpassed that of 2000 by 15% and that cocaine production had risen 6%
since the launch of Plan Colombia. In the same period, cocaine trafficking to the US rose even though
since 2000 and with help from the US more than 1 million hectares of illicit crops were eradicated.
The scarcity of cocaine in the US market between 2007 and 2009, the
dramatic rise in the price of the drug and its lower grade of purity in
the same stretch of time apparently stem from the situation in Mexico
and not from eradication drives in producer countries, as argued by
government officials. This reading of the data is the most logical one,
as cocaine production during this same period remained steady at nearly
1,000 tonnes a year. So the complications in the US market were the
result of logistical and supply problems, not a drop in production. The
GAO report shows that, as impressive as the numbers might be, the
eradication programmes undertaken as part of Plan Colombia had no
effect on production levels, final prices or consumption habits. The
argument that were it not for the eradication the production of
narcotics would have multiplied, cannot be verified because of theex post and hypothetical nature of that assertion. The commercial logic driving the drug trade casts doubt on the idea that cocaine
production can soar regardless of what the level of demand is.
5.2. Option 2: alternative development
The paradigm of alternative development.
The goal of alternative development programmes is to turn areas where
illicit crops are grown into plantations for legitimate agricultural
goods and to integrate them into the formal economy, allowing farmers
to earn their livelihood legally. The EMCDDA says the EU and its member
states are financing 37 alternative development projects in South
America to the tune of more than €140 million.
At the same time, the EU supports producer countries in their efforts
to market alternative crops through preferential trade agreements. The
EU has also signed preferential treatment agreements with the Andean
countries and those of Central America, which can export nearly 90% of
their goods duty-free to the EU. For the EU and most of its member
states, alternative development programmes are the central pillar of
their international anti-drug policy. However, European governments are
not the only ones that implement alternative development projects or
programmes as a way to control drug supplies. Since the 1970s the US
has supported many such programmes in Latin America. Between 2000 and
2005 alone, USAID administered US$1.6 billion in alternative
development projects. Just as the Colombian government is doing with its “Familia Guardabosques” programme, which combines AD and crop eradication, the US government
is using AD projects as an incentive for farmers to stop growing coca, opium poppies or marijuana. Here, we see the main difference between these initiatives and European DA programmes, which do not have strings attached.
In the past a series of problems has arisen when alternative development projects are
implemented.]
-
Areas where illicit crops are grown are marginal and lack infrastructure, so it is hard
for alternative crops to reach formal markets, both at the national and international levels.
-
Crops are simply shifted to another area, rather than undergo substitution (this is the so-called balloon effect).
-
Coordination is difficult between eradication of illicit crops and the availability of alternative development measures.
-
Resistance from armed non-government groups and the precarious security situation in many areas where illicit crops are raised.
-
A lack of legal security and clearly defined deeds to property, which makes long-term investment risky.
-
The comparative disadvantages of alternative products compared to coca leaves and cocaine.
In order to overcome or avoid these difficulties, these days aid agencies from the
countries of the OECD offer all-encompassing alternative development
programmes that go beyond simply replacing illicit crops.
In addition to this, measures are taken to improve infrastructure in
crop-growing areas and open access to formal markets, support community
development, institute training programmes for children and adults,
establish legal security for peasants, encourage peaceful resolution of
conflicts, etc. This broader focus seeks to overcome the problems
inherent in alternative development programs and create a series of
incentives that makes it more appealing and more secure over the long
term for farmers to give up growing illegal crops. Other preventive
measures aim to discourage migration to areas where such crops are
raised. These measures attempt to encourage local
development in regions where people might be tempted to move to areas
where drug-destined crops are grown.
The difficulty of defining goals.
Alternative development projects tend to be assessed in terms of the
results they achieve in replacing illegal crops with legal ones and whether
this substitution is sustainable or not; for this reason, the
evaluation does not centre on resolving the difficulties we discussed
earlier. The fundamental question is not whether the day-to-day
problems that might arise by implementing an alternative development
project are resolved. Rather, it is whether alternative development
tools are adequate for achieving the main goal of controlling the
supply of drugs, their price and availability and, therefore,
consumption of them. The question is not usually posed by donor
governments nor the ones receiving aid, even though alternative
development, at least among member states of the EU, is seen as the
backbone of international anti-drug policy. Each measure for
controlling supply should be analysed in terms of a drug’s price and
availability for final consumers. It is noteworthy that this question
is not debated in the corresponding alternative development forums. As
we already stated, even major rises in the commercial value of coca
leaves in producer countries will not have a visible effect on the
final price of cocaine in the last link of its commercial chain.
This is true both for eradication and alternative
development projects; in the end, both methods share the same logic.
Therefore, the central goal of controlling international supplies of
drugs –making them more expensive– cannot be achieved through
alternative development projects. Even supposing that crops were
effectively transformed, they would only be displaced, not replaced,
beyond what happens at the local level. This is very similar to the
consequences of massive eradication. For this reason, the GAO could not
state that the more than US$500 million invested in alternative
development projects as part of Plan Colombia since 2000 had had
observable effects on crops. Rather, it is likely that crop
displacement reduced the potential success of local DA projects to zero.
A true substitution of illicit crops beyond the local level could be
attained if the alternative crops drew a price higher than that of
coca, if there were sufficient infrastructure to market them and if
farmers had more legal and financial security. However, the middlemen
in the cocaine business –the ones who buy the raw material from the
coca growers– can pay more, offsetting the possible commercial
advantages of the alternative products. Taking into account the wide
margins present in the cocaine trade, there will be no shortage of
resources, and even less so because of the
possibility of price rises being passed on to the next stages in the
production and commercial chain.
From a political standpoint, alternative development
projects are more attractive for Europe than crop eradication or other
more repressive measures. They have a reputation as being more humane
and socially-oriented, while crop eradication methods strip farmers of
their livelihood and harm the environment, and perhaps even people.
However, neither method has been shown to be an efficient tool in
controlling drug supplies. Alternative development projects make sense
when they break the feedback relationship between development and drug
trafficking. They also make sense when they do away with war economies
that fuel combatants in endemic internal conflicts in several producer
countries.
In this way one can contribute in a sustainable way to solving
structural problems, which in turn have made it easier for drug
trafficking and related businesses to take root. Furthermore, one can
consider the important contribution that alternative development makes
to supporting the establishment of structures of good governance. This
can be encouraged by an integrated approach, the one we described
earlier, which over the long term could curb the displacement and
extension of crops used to make drugs. Alternative development projects
make no sense if the goal is to control the supply of drugs or
intervene in the drug-consumption habits of people in Europe or the US.
So, alternative development should not be considered a pillar or
stand-alone contribution to Europe’s international drug control
efforts. Prolonging this belief would encourage false expectations,
freeze resources that can be used more efficiently elsewhere and hinder
a re-working of the approach. DA programmes can no longer be evaluated
in terms of their performance in reducing crops used to make of illegal
drugs, which is a goal which they cannot fulfil. What can be assessed
is the extent to which DA tools alleviate the
structural problems that contributed to the drug economy taking root in
certain areas.
The alternative approach must go hand in hand with
systematic control of the international transit system. Only by
interrupting the commercial chain of cocaine or other drugs can one
achieve a sustainable transformation of areas where illicit crops are
grown into ones with legal alternatives. Farmers who grow coca leaves
would stop growing them, or opium poppies, for the same reason that it
is so difficult to grow alternative crops: without access to global
markets, there is
no way to sell them and thus no crops.
(5.3) Option 3: controlling chemical precursors
Chemical precursors are crucial for producing cocaine and many other
narcotics. They are needed to convert organic material into a drug,
refine it and purify it. Controlling trade in these substances is an
important tool in controlling supply, as these precursors are a weak
link in drug production. Controlling chemical precursors is not limited
just to producing countries; it also seeks to restrict their
availability, and for this reason there is debate over the usefulness
of this as a tool in controlling supply in or near the producer
countries. The United Nations Convention against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances, of 1998 (also known as the
Vienna Convention), regulates trade in precursors and it is implemented
by the INCB. There are now 23 listed chemicals which can only be bought
and sold in a restricted fashion. Most of these substances have more
than one use and tend to be obtained through legal trade channels.
In its strictest dimension, the control of chemicals agents used to made cocaine is
limited to potassium permanganate (KMnO4).
It is key to making cocaine but also has a wide range of legal
industrial uses. This chemical is the only cocaine precursor that is
listed on schedule 1 of the annex to the Vienna Convention of 1998,
which imposes stricter international rules on trade in this substance.
To enhance the control process, the EU has signed special accords with
all the Andean countries, except Venezuela, on trade in chemical
precursors.
These agreements facilitate the certification of the end recipient in
precursor export deal originating in Europe. However, the amount of KMnO4 required to refine and purify cocaine are
relatively small compared to that of other chemical substances needed
for this process, such as sulphuric acid, sodium carbonate and acetone.
In 2007 and 2008, 26 countries reported legal exports of KMnO4, with volume totalling 2,400 tonnes.
Despite the EU’s strict regime of control and certification of end
users, it cannot be ruled out that small amounts of precursors were
diverted for illegal purposes. In 2006 the Colombian authorities alone
seized nearly 100 tonnes of KMnO4 and destroyed 15 illegal laboratories used to produce it. This shows that no all precursors are of foreign origin.
It seems practically impossible to shut down all conduits through which
this chemical reaches labs where cocaine is made. Imports of larger
amounts of precursors for industrial purposes by some countries
(Argentina, Brazil and Chile) that border on cocaine-producing nations
are legitimate. But this sets up a mechanism for small amounts of
multiple-use chemicals to be diverted. The strict control regime that
exists within the EU has limited reach in producer countries and their
neighbours. Although the control mechanisms need constant verification
and
updating to curb this illegal diversion, options for intensifying
control on these chemicals seem to be fewer than with other tools.
(6) Political options II: international control of supply in transit countries and areas
As we have shown earlier, as far as having an impact
on the setting of the final price of cocaine, neither eradication
campaigns nor alternative development projects are effective tools for
controlling supply. The options for intensifying control of chemical
precursors seem to have been exhausted. Since systematic control of
supply in the Andean region began 30 years ago, volumes of coca crops
and availability of cocaine for the world’s consumers have remained
practically unchanged. Furthermore, the price of cocaine has fallen
steadily, reaching very low levels. If one considers the rather modest
results achieved so far by policies to control supply in producer
countries, how effective has this control been in transit countries and
areas? Depending on how close they are to producer and
final-destination countries, we can distinguish several tools of
control, which we will analyse here.
(6.1) Transit control near producer countries
Along with crop eradication, the governments of the producer countries
and the US try to interfere with drug trafficking within the region and
in nearby transit countries. One well-known example of these policies
was the interdiction of air traffic in Peruvian territory near its
north-eastern limits, a practice carried out by the Lima government in
the 1980s and 90s in close collaboration with US forces. The
interdiction regime was imposed to eliminate drug-related flights
between the countries that grew coca leaves –then just Bolivia and
Peru– and Colombia, the main cocaine-producing nation. Intense air
traffic in light planes supplied Colombian laboratories with cocaine
base from Bolivia and Peru. In the 1980s there was not yet much coca
being grown in Colombia, but cocaine refining labs were concentrated
there. The enforcement of interdiction –the idea was to intercept
forcibly non-identified planes– reduced illegal traffic considerably
along this route. But Colombian drug traffickers reacted by
establishing alternative routes, for instance through Brazil, where the
current regime of strict air traffic control did not yet exist. What is
more, and this was even more serious, the Colombian cartels started to
encourage coca-growing in their own country. While coca production in
Bolivia and Peru declined because of the closure of the commercial
chain and simultaneous eradication campaigns, it rose significantly in
Colombia. The total surface area of illicit crops in the three
countries remained virtually unchanged between 1992 and 2002. Within
them, crops were just moved from one place to another.
Not just the US got involved in controlling regional transit, but also
the EU, and some of its member states sought greater control over
transit in the Caribbean. Between 1997 and 2001, the EU worked with the
US and Canada under the Barbados Action Plan. Under this initiative,
the small countries of the Caribbean and the secretariat of CARICOM
received support and training to improve their systems for controlling
their land and maritime borders and broaden cooperation by the security
agencies.
The control regime in Latin America has proven to be
very efficient, as seen in the numbers: 56% of drug seizures around the
world in 2006 took place in South and Central America. The Colombian
authorities alone accounted for a quarter of the confiscations. More
than half of the cocaine seized in 2006, almost 400 tonnes, was
confiscated in an early phase of the commercial chain. First of all, in
this early stage the commercial price of the drug is still very low.
Secondly, early seizures can be replaced easily, given the proximity of
places where coca is grown and refined. Thirdly, the loss of drugs that
are seized cannot only be offset by cocaine that is in storage, but
also with cocaine that is in transit: it is simply cut with higher
percentages of additives in later phases. Therefore, control of transit
in or near producer countries, as efficient as it may seem in light of
the high numbers of seizures, has only a limited effect on the final
price and availability of cocaine for consumers.
(6.2) Transit control near the final consumer
The effectiveness of seizures near the consumer.
However, seizures that take place late in the commercial chain, closer
to the consumer than to the producer, have a higher probability of
being effective and affecting the final price of the drug. Near urban
markets in European countries or the US, the price of the drug is
higher: 10 tonnes of cocaine seized in the port of Santa Marta,
Colombia, have nearly the same commercial value of one ton that is
seized the territorial waters of Ghana.
Border control agencies and monitoring of maritime routes are what make
the price of illegal goods rise, such as drugs. Production and
logistical costs account for only a tiny part of the final price. It is
obvious that transit control measures only make sense if they are
carried out near the final consumer; in the case of the EU, very close
to the common external border.
Only there will an effect on price and possibly the availability of the
drug be noticed. The impact on drug trafficking networks is greater
when the drug is seized in the later phases of the commercial chain. In
this case it is harder to replace confiscated drugs because the
original source is so far away. Furthermore, there tend to be losses at
earlier control points, as well. So the damage is greater for the
traffickers, who will probably pass on the cost of these losses to the
final consumer.
An empirical example of this logic was the doubling of
the price of cocaine between January 2007 and September 2008 in the US
and the temporary scarcity of cocaine in some major US cities, along
with an increase in additives detected in regular checks of cocaine.
These developments coincided with the intense police and military
campaign that the government of Mexican President Felipe Calderón had
been waging against drug cartels since 2007, along with an escalation
of the war between the cartels themselves. The fight among and against the cartels interrupts the commercial chain most frequently close to US consumers. The Mérida
Initiative (2008-10), with funding of US$1.4 billion to fight drug trafficking in Mexico and Central America,
is supposed to have a similar effect on cocaine availability and price
in the US, Mexico and Central America. The Obama Administration’s
strategy of boosting control of its southern border with a greater
police and military presence, re-equipping Mexican security forces and
controlling the flow of small arms to Mexico will enhance the effects
of the Mexican Government’s drive against drug trafficking. It is
likely that over the medium term the price of cocaine will remain high,
as supplies are disrupted fairly often. But this will depend on the
Mexican cartels’ ability to shift their activities to Central America,
a trend that is already emerging and a source of great concern for the
region’s small and vulnerable States.
How Europe controls transit. The European Drugs
Strategy(2005-12) and the second EU Drugs Action Plan (2009-12)
highlight support for controlling supply in transit countries and near
the EU’s common external border as tools for its anti-drug policy. The
EU is also considering using funds from its Instrument for Stability,
which are budgeted for the period 2009-11, in projects to fight against
trafficking in cocaine and heroin. It is a stated goal of the European Commission to interrupt, in concentric circles, the flow of drug trafficking toward Europe.
As a method for controlling supply, this strategy makes sense, and it
will be effective if it is implemented in a systematic way. So long as
there are territories for traffickers to evade control –often
territories in countries with very fragile structures of governance–
organised crime gangs can seek alternative routes and avoid seizures
and criminal prosecution. From a European perspective, the rule that
should govern transit control should be the following: the smaller the
radius of the circle of enhanced monitoring, the easier it will be to
control a maximum number of possible transit routes. Given the
empirical fact that the price of drugs tends to rise gradually when
they get closer to the external borders of Europe, it seems a good
idea to establish a rather small control circle around the EU.
So far the most important operational measure within the EU has been the creation of
the Maritime Analysis and Operation Centre-Narcotics, based in
Lisbon. It features active participation from seven EU member states,
including Spain.
EUROPOL, the European Commission and some member states have observer
status in this organisation. The centre has an operational mandate, and
coordinates tasks of monitoring and enforcing maritime areas and air
space over European waters. This job of keeping watch over the Atlantic
is made necessary by the rise in cocaine trafficking to Europe in
recent years and the growing importance of West Africa as a staging
ground for trafficking into Europe. In its first year of operations,
this anti-drug agency coordinated the seizure of nearly 30 tonnes of
cocaine. In September 2008, the French government focused on the
Mediterranean by founding the Centre de Coordination pour la Lutte
Anti-Drogue en Mediteranée, based in Toulon. EUROPOL’s COLA project
coordinates the efforts of anti-drug agencies of member states and
contributes to improving transit control along the EU’s external
frontiers.
Organised criminals’ ability to evade.
Europe’s tools for controlling narcotics are adequate, but it
is not clear that they are based on a consistent strategy to block
drug trafficking to Europe in a systematic way. Seizures that are just occasional –as opposed to systematic–
only contribute to causing drug lords to move their current
trafficking routes, and not to cutting them off or decreasing their
number over the mid- and long term. Drug trafficking rings learn
quickly, and are flexible enough to adjust their strategies in
response to those of government authorities. Traffickers’ most
common way to rebuff increased government efforts is simply to move
geographically. They have sufficient resources, means and networks to shift to alternative routes, with different means of transport and new
middlemen. The rise in the commercial value of cocaine in the US, which is
highly volatile and does not tend to last more than just a few
months, shows the ability of drug rings to adapt to the temporary
strategies of government authorities.
With the fall off the Cali and Medellin cartels in Colombia in the 1990s, the
hierarchical, pyramid-style structure in drug trafficking is now more
the exception than the rule, although it seems this model has
re-emerged in Mexico in a big way. The common structure in
transatlantic drug trafficking is similar to horizontal networks,
with smaller groups that interact autonomously and lack a vertical
command structure. Each group tends to handle transactions in one or
two of the links in the drug’s production and commercial
chain. It is believed that, at most, current drug lords run a coordinating
body, as is thought to be the case with the Norte del Valle cartel in
Colombia. These organisational structures are more like a holding
company than the legendary figure of an all-powerful overseer. The
advantage of this for organised criminals is that these decentralised
structures cannot be wiped out with one definitive blow, as happened
with Medellin cartel after the death of Pablo Escobar. The individual
components of these organisations tend to interact without actually
knowing their counterparts or possible bosses. The organisations can
easily replace lower-level links, quickly filling holes left by
arrests or violence waged by other groups.
The constant interaction between law enforcement agencies and organised crime is
similar to an arms race. The costs for both sides rise constantly,
while neither can take advantage of their largest investments, which
are swiftly neutralised. Unlike legal trade, trafficking in illicit
goods does not tend to get more efficient over the long term. Rather,
it becomes less economical and more costly.
Conventional means of transport must yield to more complex ones, and
direct transport routes are replaced by more circuitous ones. Covering
greater distances and crossing new borders raises costs for
traffickers, but this is still cheaper than losing product and human
resources. An arms race ends when the resources of one of the
adversaries are depleted and it can no longer neutralise the enemy’s
investments. This is not what is expected for the member states of the
OECD, nor for drug trafficking networks, which tend to have abundant
resources. However, many of the fragile states of West
Africa which are affected by cocaine trafficking are very close to such
a situation, if they have not already reached it.
(7) The end of Europe’s passivity
For a long time, the EU and its member states have limited their activities in the effort
to control the supply of drugs mainly to political dialogue and
implementing alternative development programmes. Since the US
cooperated with drug-producing and transit countries in Latin
America, it was easy for Europe to let the Americans take the lead.
As most cocaine-smuggling routes were the traditional ones –before
the new African path to Europe was established– there were not
many reasons either for the Europeans to react autonomously. These
days, the African route, the growing consumption of cocaine in Europe
and the amount of cocaine flooding the continent are forcing European
countries to reconsider EU drug policy. Over the mid-term, the EU
will have to make a greater effort of its own to control not just
demand for but also the supply of cocaine. Countries such as Spain,
the UK and Italy, which are suffering from a veritable epidemic of
cocaine, will have to exert pressure within the EU for a repositioning of drug control policy. The US has done very little on
drugs in West Africa. The resources that the US had budgeted for this
area are insignificant compared with the money aimed at Latin
America, is limited to just a few countries and tends to be linked to
the fight against Islamic terrorism. But at the same time, in West
Africa a safe haven has been set up for drug trafficking, relatively
close to the European continent. How will the EU and its member states react effectively to this challenge?
7.1. Controlling transit in a strict sense
In the first place, it will be necessary to intensify control over the
transit of drugs around Europe. Some steps to this effect are being
developed. However, what has prevailed so far have been occasional
measures with no perceivable strategic underpinning. These measures
will probably be neutralised quickly by the flexible responses of drug
traffickers. For this reason, a systematic and planned procedure is
needed urgently. One can expect an increase in cocaine trafficking
through West Africa and growing involvement by West African networks,
going beyond simply acting as intermediaries and helpers. It is likely
that African groups will take over segments of the commercial chain
that are in the hands of South Americans who still dominate the
transatlantic trade. The growing use of cocaine as currency, something
similar to what used to happen with Mexican middlemen whom Colombian
cartels paid in cocaine, establishes a second source of cocaine flow to
Europe. Measures like the creation of MAOC-N are a step in the right
direction. When these measures are applied in a more systematic and
consistent fashion, the EU’s international anti-drug policy will have a
chance at being more successful. Conditions are more favourable for the
EU than for the US in the fight against cocaine trafficking. The
analogy between Mexico and West Africa as transit areas is inaccurate.
In the first place, Europe does not share a land border with Africa.
Secondly, the volume of legal commerce and transit of persons between
Africa and Europe is minimal compared to the goods and people that
cross the US-Mexican border every day. Every month, nearly 9 million
vehicles cross that land border spanning more than 3,000 km, and to
this one must add intense air and maritime traffic. Mexico is the
third-largest importer of goods from the US.
Looking for cocaine there is like looking for a needle in a haystack.
The 10,000 containers that arrive in European ports every month from
West Africa are few compared to the US-Mexico case. Furthermore,
regular air and maritime traffic is much more limited between Europe
and its neighbours to the south. This raises the chances of
successfully implementing systematic transit controls.
The time has come to take a qualitative step forward in EU policy on controlling common
borders. Controlling transit routes for drug trafficking should
feature as a fundamental element of EU border cooperation, as in the
case of FRONTEX in the fight against illegal immigration. Trafficking
routes to Europe should be monitored around the EU. Progress can be
made against international organised crime groups only when their
ability to establish alternative routes and territories is cut off.
Anti-drug cooperation should be based on a broad concept of what a
border is, similar to the operations staged by FRONTEX, which include
member states carrying out maritime patrols off the coast of West
Africa. A systematic approach to controlling the transit of drugs should not
limit itself just to air and sea routes over the Atlantic, as is now
the case with MAOC-N. If there is only a strengthening of controls
over Atlantic routes, flows of cocaine from West Africa might shift
to North Africa, taking advantage of abundant traditional routes used
for smuggling marijuana. From there, just like marijuana, cocaine can
reach southern Europe across the Mediterranean. In order to avoid
these shifts and keep European law enforcement authorities from
having to play a game of cat and mouse with drug traffickers, it
would be a good idea to coordinate external control of the fight
against drug trafficking under the umbrella of FRONTEX or an EU body based within MAOC-N.
For now, FRONTEX is not in a position to take on the fight against drug trafficking. Its
organisational structure is not designed for such operations and does
not have sufficient capabilities, nor are the foundations of its
activities clearly defined in legal terms. A central European agency
for controlling drug trafficking, based on an enlarged MAOC-N centre
or a reformed FRONTEX, should work closely with the EUROPOL
department that coordinates efforts to control cocaine supply. In
this way, the information gathered by national agencies could be
centralized and made available to that potential European agency.
Responsibility for controlling drug trafficking has been divided
between directorates of the European Commission and the European
Council on one hand, and member states on the other, and this has led
to fragmentation of EU drug policies. At the same time, the
abandonment of a single European anti-drug budget allocation and the
financing of relevant projects through regional or national budgets
have contributed to this counterproductive fragmentation. And this
makes it practically impossible to establish a European policy for
curtailing the supply of drugs. So the conditions for developing and
adopting a consistent and systematic European policy for international control of narcotics are not currently optimal.
7.2. Controlling transit in a broad sense
As organised crime gangs are skilled at evasion and at finding alternative transit
territories and routes in countries with limited or non-existent
governance structures, the model for enhanced control of drug
trafficking might soon reach its limit. As part of a two-pronged
strategy, the focus on systematic control and interdiction of drug
trafficking must be complemented by measures that discourage illegal
activities in regions with fragile government. In other words, one
must close the loopholes organised criminals resort to and this
should be done by raising the cost of engaging in illegal activities
in those countries. A dissuasive capacity should be constructed in
fragile states so that they can impose high costs for those who take
advantage of the weaknesses of governance in West Africa, but also in
Latin America. Intervention is needed in order to make structural
transformations of these loopholes. One must operate with tools of
state-building, aiming for stabilisation or creation of state
functions of governance in the area of security in those fragile
States which have attracted flows of illicit goods and witnesses the
establishment of organised crime. We must keep organised crime from taking over entire States.
Cape Verde is usually mentioned as an example of a country which in just a few
years has improved its ability to monitor its land and sea borders.
The State has recovered a certain ability to fight organised crime
and impose a high cost for future illegal dealings. The EU and some
of its member states have implemented a set of cooperation projects,
facilitating material support and technical consulting for Cape
Verde. Nor does it seem right to impose sanctions on some countries,
such as Guinea-Bissau, for not acting firmly against drug
trafficking. Guinea-Bissau and many of its neighbours do not have the
resources necessary for controlling their territory. Sanctions cannot
change that, and will only make the situation worse. It is
state-building measures, especially in the area of security, which
over the medium and long term could ease Europe’s problems in
that region: the destabilisation of fragile States in West Africa,
corruption among their armed forces and political ruling classes, and
the possible convergence of drug trafficking with non-government
armed elements and terrorists.
The EU and its
member states have realized the gravity of the situation in West
Africa and its growing health and public order problems because of
cocaine abuse. The European Commission has undertaken a series of
measures to battle drug trafficking in a structural way. The projects
are financed partially with resources from the Instrument for
Stability for the period 2009-11, which for the first time, and in an
explicit way, alludes to cocaine trafficking in West Africa. The Portuguese Presidency of the European Council, in the second half
of 2007, placed drug trafficking high on the EU’s foreign
policy agenda. Beyond the problems linked to drug trafficking, there
exist a series of secondary threats stemming from the drug trade in
West Africa which have been acknowledged by the different agencies of
the EU. In a European resolution presented at the 51st session of the
CND in March 2008, the EU announced greater levels of assistance and
cooperation with the countries of West Africa to fight against drug
trafficking. From a bi-regional perspective, Brussels is trying to
incorporate the issue of drug trafficking into the agenda of its
dialogue with ECOWAS. France, during its Presidency of the European Council in the second
half of 2008, highlighted in the EU’s interaction with ECOWAS
the potential emerging threats in the Sahel region with the
convergence of Tuareg rebels, the North African branch of al-Qaeda
and drug traffickers.
Since 2006 the
European Commission has financed a project to establish a network
linking police and judicial authorities in coca-producing countries
and transit countries of West Africa. This network should provide for
better transatlantic flow of information that is relevant for law
enforcement and prosecution. The project is being carried out by the
UNODC, and is complemented with a programme to train African police
and gendarmes. The member states of ECOWAS adopted a Regional Action Plan to fight
against drug trafficking. At the bilateral level, the EU uses its
European Development Fund to finance some individual projects to halt
the spread of organised crime in the region. One of the most
prominent involves aid to the Government of Guinea-Bissau through the
Common Foreign and Security Policy mission since 2008, the goal being
to prepare a reform of its security sector. The Joint EU-Cape Verde
action plan of 2007 calls for intensifying bilateral cooperation in
the fight against drug trafficking. Other governments in the region refuse to engage in more integrated
cooperation, even at the technical level. It is a complex task to
station more European officials to work with African authorities.
Here, too, one notes the lack of a strategic-systematic focus. If
only occasional improvements are achieved, such as with Cape Verde,
this progress will end up being neutralised yet again as the problems
just move somewhere else, rather than be resolved with lasting and
extensive dissuasion of organised crime.
(8) Conclusions: Europe’s options for controlling supply
The Political Declaration and Plan of Action adopted at the 52nd session of the
United Nations Commission on Narcotic Drugs in March 2009 continue to
mention eradication tools and alternative development as central
elements of overall control of drugs. The fact that these tools were
not questioned is a step in the wrong direction, as shown in this
study. Measures to control supply in producer countries have no
effect whatsoever because of the low price of coca leaves and the
effects of crop displacement. The fact that supply in producer
countries is once again the foundation of the fight against drug
trafficking raises expectations that cannot be realised. The
prolongation of policies to control supply in coca-growing and
refining nations excludes more appropriate mechanisms and diverts
resources that be invested in a more useful way. Systematic control
of transit near the external borders of the EU would be the most
efficient instrument in EU anti-drug policy on the supply side.
Effective implementation of transit control would allow for
establishing an adequate complement to national programs to reduce
demand for drugs. A strong and consistent European policy to control
the supply of drugs should take into account the following
recommendations:
-
Europe’s
institutions and member states should reconsider their international
anti-drug policy. The main goal should be controlling transit near
the EU’s common external border, rather than alternative
development projects. Systematic controls of drug trafficking routes
near Europe would have an effect on the final price of cocaine and
on consumption over the medium and long term. This EU strategy of
transit control must be coordinated by a central European agency.
Occasional measures such as those applied by MAOC-N in the Atlantic
only cause drug trafficking routes to shift somewhere else.
Organised criminals can react flexibly and do not mind incurring the
costs of shifting routes and using alternative means of
transportation. So long as there are available territories and
routes in countries with limited structures of governance in terms
of security, drug traffickers will not hesitate to use them.
Promoting governability in the affected countries and international
assistance in consolidating functions of state governance in the
realm of security are a fundamental tasks for eliminating or
drastically reducing loop-hole effects for traffickers. In West
Africa there are many areas with fragile governance that provides
many opportunities for organised criminals.
-
Alternative development projects and programmes do allow for the structural
transformation of drug economies in producer countries. Continuous
encouragement of alternative development in producer countries is
important as part of development aid. However, alternative
development should no longer be considered an effective tool in
controlling supply. These projects do not influence drug supplies
and have no ability to do it.
-
The experience of the Andean region and other regions of the world that produce drugs
shows that one cannot manage the availability, price, or consumption
levels of drugs through campaigns to eradicate crops. Therefore, it
is recommended that in the future the EU and its member states not
participate in eradication programmes in producer countries.
Daniel Brombacher and Günther Maihold
Stiftung Wissenschaft und Politik, German Institute for International and Security Affairs, Berlin
Abbreviations
ACI |
Andean Counterdrug Initiative |
AUC |
United
Self-Defense Forces of Colombia |
CND |
Commission
on Narcotic Drugs |
CRS |
Congressional
Research Service (EEUU) |
AD |
Alternative
Development |
DEA |
Drug
Enforcement Administration (US) |
ECOWAS |
Economic
Community of West African States |
EMCDDA |
European
Monitoring Centre for Drugs and Drug Addiction (based in Lisbon) |
EOD |
Development-oriented
Drug Control (sector-based plan by the GTZ) |
ESDP |
European
Security and Defence Policy |
EUROPOL |
European
Police office |
FARC |
Revolutionary
ArmedForces
of Colombia |
FRONTEX |
European
Agency for the Management of Operational Cooperation at the
External Borders of the Member States of the European Union |
GAO |
Government
Accountability Office (US) |
GTZ |
Gesellschaft
für Technische Zusammenarbeit (German Society for Technical
Cooperation) |
IBMP |
Institut
für Biomedizinische und Pharmazeutische Forschung (Institute
for Biomedical and Pharmaceutical Research) |
ICG |
International
Crisis Group |
INCB |
International
Narcotics Control Board |
INCSR |
International
Narcotics Control Strategy Report (US Department of State) |
INTERPOL |
International
Criminal Police Organization |
IRIN |
Integrated
Regional Information Networks (Information Service of the OCHA) |
LDC |
Least
Developed Countries |
MAOC-N |
Maritime
Analysis and Operations Centre – Narcotics |
NRC |
National
Research Council (US) |
OCHA |
United
Nations Office for the Coordination of Humanitarian Affairs |
OCTA |
Organized
Crime Threat Assessment (EUROPOL) |
ODA |
Official
Development Assistance |
OCDE |
Organisation
for Economic Cooperation and Development |
RAND |
Research
and Development Corporation |
RELEX |
Directorate
General of External Relations of the European Commission |
TNI |
Transnational
Institute (Amsterdam) |
UNGASS |
United
Nations General Assembly Special Session |
UNODC |
United
Nations Office on Drugs and Crime |
UN-OHRLLS |
United
Nations Office of the High Representative for the Least Developed
Countries, Landlocked Developing Countries and the Small Island
Developing States |
WCO |
World
Customs Organization |
WHO |
World
Health Organization |
WOLA |
Washington
Office on Latin America |
|
