The effects of reducing heroin supply in the ACT

Transcription

1 REASEARCH REPORT The effects of reducing heroin supply in the ACT By Michael McFadden A study of heroin supply in the Australian Capital Territory concluded that reducing the supply of heroin to the community resulted in benefits to both dependent drug users and the wider community. Reductions in the supply of heroin were related to improved health outcomes in terms of fewer overdoses and increased enrolment in treatment programs, and a reduced incidence of property crime. The primary aim of this analysis was to establish whether changes in the supply of heroin, as measured by drug purity, are related to changes in drug-related health indicators, such as ambulance callouts to heroin overdoses and numbers participating in methadone treatment programs, and to changes in levels of property crime. Aim The National Drug Strategy is a cooperative arrangement between Commonwealth and State/Territory Governments to prevent the uptake of harmful drug use and to reduce the negative impact of drug abuse in Australia. Supply reduction is one of a number of strategies to achieve this aim. The implicit assumption behind supply reduction that reduced supply will result in positive health and social outcomes has seldom been tested in a scientific way. The current study was intended to contribute to the evidence base for a supply reduction approach. Data The heroin supply indicators were the average and range of heroin purity from January 1999 to March 2002, based upon ACT seizures. Purity is a direct indicator of supply because dealers tend to dilute or cut heroin in response to reduced supply. Health outcome indicators included the number of ambulance callouts for heroin-related and non-heroin related overdoses from July 1999 to April 2002, and methadone treatment program enrolments from December 1999 to April Crime indicators included the number of theft incidents from December 1998 to April 2002 and the number of burglaries and robberies from January 1993 to April The community law enforcement indicators were the number and weight of ACT heroin seizures and the number of ACT amphetamines seizures from July 1996 to April Time series analysis The data employed in this study were time series based on monthly statistics. An important aspect of time series analysis is diagnosing and accounting for autocorrelation. Autocorrelation refers to the tendency for one point in a time series to be similar to an adjacent point. For example, the weather today will tend to be like the weather yesterday. Despite this, the weather yesterday is not the cause of today s weather. Trends in two variables are more likely to be truly related when a change in one variable is related to a change in another. Results The study established that reductions in supply of heroin result in improved health outcomes for the community (Table 1). Over a period of three years, heroin purity in the ACT dropped from per cent to per cent, indicating a major reduction in supply (Figure 1). Over the same period, heroin-related ambulance callouts dropped from a peak of 55 in December 1999 to about eight in the months from June 2001 to March 2002 (Figure 2). The study also revealed that the number of overdoses is related to the variability in heroin purity in any month. There was little evidence on the limited data available to suggest that the improved health situation with respect to heroin was offset by a deteriorating situation with respect to other drugs. The number of ambulance callouts for non-heroin overdoses did not increase as a result of the decrease in heroin-related callouts. The results also suggested that reductions in supply were linked to increased enrolments in methadone treatment programs. Enrolments climbed from around 600 to 670 in January 2001 and then levelled at around 640. Declines in purity were related to increases in program enrolments five months later suggesting that supply must be reduced for some time before dependent users opt to transfer into treatment. One measure of community law enforcement, the weight of heroin seized in the ACT, was also predictive of methadone treatment enrolments. The study employed three measures of property crime and the results suggest that supply is related to two of these. A reduction in the supply of heroin was moderately associated with reductions in the incidence of robbery and burglary. Some commentators have suggested that an increase in price that attends a shortage of any drug would lead to increased crime to pay for the higher price. Figure 1: Changes in the purity level of heroin in the ACT 40 Platypus Magazine No September

2 TOP: Figure 2: Ambulance callouts to heroin overdoses in the ACT RIGHT: Table 1: Statistically signifi cant results ( r row variable differenced c column variable differenced) This analysis is simplistic and fails to take into account market forces involved. In general, a reduction in supply will lead to a more modest increase in price, assuming a price elasticity of less than one. Thus, despite increased prices, the total value of the heroin available will, in fact, fall thereby removing at least some of the incentive to commit property crime. For example, assume a situation where all heroin purchases were funded through property crime and that a 50 per cent reduction in supply led to a 90 per cent increase in price. The total value of heroin available for purchase would decrease by 10 per cent. Thus, a large reduction in supply would be expected to lead to a modest reduction in property crime. This conclusion is consistent with the findings of the current study. Conclusion Australia s approach to illicit drugs has been built upon partnerships between the health, education and law enforcement sectors and the direction of its policy has been evidence-based. The current study contributes to this base of evidence by demonstrating that reductions in supply of heroin are related to significant health and social benefits to the drug-user population and the wider community. It should be noted that the reduction in supply of heroin that was the subject of this study followed enhanced federal efforts to stem the flow of illegal drugs into Australia. While it might be assumed that the overall level of illicit drug importations into Australia is significantly affected by federal law enforcement efforts, the study also provided evidence that community policing plays an important role in encouraging drug users into treatment programs. Heroin shortage - the cause By Federal Agent Michael Hawley Late in 2000 a new phenomenon was observed on the streets of Australia s largest cities. Heroin, which had increased in availability throughout the nineties, was much less accessible. Users reported that it took much longer to score, that heroin had doubled in price and purity had decreased. What the media came to refer to as the heroin drought had commenced. If the shortage can be referred to as a drought then what existed before December 2000 was very nearly a flood. The December 2000 Drug Trends Bulletin produced by the Illicit Drug Reporting System (IDRS), which is funded by the Commonwealth Department of Health and Aged Care, reported: 2000 is the third consecutive year in which the price of heroin in NSW has decreased...[t]he purity of heroin in all jurisdictions is high, and has stabilised at the purity levels previously only found in NSW...[a]s in 1999 heroin is easy to obtain in all jurisdictions. This heroin was the cause of major social and health consequences. Overdose deaths climbed throughout the nineties and reached levels comparable to those caused by motor vehicle accidents in some age groups. Heroin also played a large part in criminal activity, with 36 per cent of detainees in Parramatta and 48 per cent of those in Bankstown testing positive to opiates (Drug Use Monitoring in Australia 1999). While the number of heroin users is always difficult to assess accurately, the July 2000 Drug Trends Bulletin stated, There has been a sharp increase in the number of dependent heroin users in Australia during the 1990s, from an estimated 40,000 in 1990 to 74,000 in Non-dependent users are believed to have numbered between two to five times that number. The shortage, which was first noticed in late 2000 created a major change in drug-use patterns in Australia. One important indicator of drug use is the National Drug Strategy Household Survey. Commencing in 1985, and managed by the Australian Institute for Health and Welfare on behalf of the Commonwealth Department of Health and Aged Care, this survey asked a range of questions about the use and availability of a variety of drug types. The 2001 survey, which is the seventh to be conducted, stated that recently reported heroin use had dropped from.8 per cent in 1998 to only.2 per cent in This level of.2 per cent is equivalent to the level of recent heroin use reported in 1993 and is deemed by the researchers to be significantly different to the 1988 result. Heroin availability had also decreased with the percentage of persons who were offered or had opportunity to use heroin decreasing from 2.4 per cent in 1988 to 1.5 per cent in The price of heroin also increased, doubling in most areas. This dramatic and unprecedented situation stimulated a great deal of interest across a variety of fields ranging from the media to government. The two most frequently asked questions were: Is this situation unique to Australia? and, What is the cause? 42 Platypus Magazine No September

3 AFP agents supervise the destruction of drugs in Brisbane To answer these questions it is necessary to understand a little about the dynamics of the international heroin trade. Heroin is a derivative of the opium poppy. Depending upon the region, this flower is usually planted late in the calendar year and harvested between January and April the following year. Opium is a natural product, used for social and medicinal purposes for centuries. Heroin was first produced commercially in the early 1900s for medicinal purposes but was found to be addictive and has ceased to be widely used for this purpose. The heroin used in Australia is known as China White or Heroin Number 4. It is a white crystalline salt which principally comes from Burma. Most heroin used in Europe and the United Kingdom comes from Afghanistan, and that used in the United States is now mainly sourced from either Central or South America. The heroin shortage in Australia was found to be unique to this country. Even Canada, which is a similar market and also sources its heroin from Burma did not experience a shortage. In the United Kingdom, heroin was reported to be at all-time record levels with prices very low. If Australia s situation was unique, then what was the cause? Many possible scenarios have been advanced in an attempt to explain the heroin shortage in Australia. These range from well researched to quite simply ridiculous. Some of these tentative explanations were: the Chinese New Year. It was stated that Asian importers were delaying imports until the New Year for superstitious reasons; dealers holding back on supply in order to raise prices; climatic conditions in Burma; the Taliban ban on opium production; and increased use in Asia. As the shortage lengthened and supplies remained very scarce it became clear that the cause was not market manipulation by importers or dealers. So let us now look at the remaining propositions. Climatic conditions in Burma. This argument states that there was a physical drought in Burma which caused a reduction in the amount of opium produced and subsequently a reduction in supply to the market. The United Nations Drug Control Programme (UNDCP) produces estimates of opium production for Burma each year. Given that it takes time for the opium to be processed and to make its way through the supply chain it could reasonably be expected that the crop most likely to affect the supply of heroin to Australia late in 2000 would be processed from poppies harvested early in that year. UNDCP crop estimates for the 2000 season are 1087 tonnes of opium, which is capable of producing about 110 tonnes of heroin. Given that the crop estimates for the previous year were 895 tonnes of opium the 2000 crop represents an increase of almost 20 per cent. It is therefore very unlikely that climatic conditions in Burma affected supply of heroin to Australia. The Taliban ban on opium production. Afghanistan was formerly the world s largest producer of opium. The Taliban regime is believed to have used heroin as a means of supporting its war against the rival Northern Alliance. UNDCP figures for Afghanistan reveal that the average production for the 1990s was about 2500 tonnes per year. In 1999, however, there was a bumper year with 4574 tonnes produced. This was followed in 2000 by 3284 tonnes. While accepting that this was a large decrease from the previous year, it still represented a very large crop in comparison to recent averages. The Taliban edict banning opium production that some commentators credit with creating the heroin shortage in Australia only took effect for the 2001 season. This ban was strongly enforced and resulted in the harvesting of only 190 tonnes of opium. Even this large decrease in production did not produce a heroin shortage, as the oversupply created in the previous two years had been stockpiled and was available for supply to their main market of Europe and the United Kingdom. Increased consumption in the Asian region. A simple view of the rate of increase of registered drug users in China could indicate that consumption in that region was absorbing much of the heroin previously used in Australia. A more detailed examination reveals this not to be the case. Registered addicts in China increased from 148,000 in 1991 to about 900,000 by the end of the decade. Chinese authorities admit, however, that rather than representing an increase of this magnitude the figures are actually an indication of better recording systems. The 1999 Annual Report on Drug Control in China states that the increase was, Thanks to enhanced survey and registration in most provinces. Further, the disparity in the price able to be obtained in China compared to the price that heroin will bring in Australia means that this country remains an attractive market. Finally, if consumption in China had risen to a level which would have restricted supply, then other markets such as Canada would have been affected and, as stated earlier, this was not the case. What then was the cause of the heroin shortage? To best understand this we need to examine the issue from both sides that of law enforcement and the perspective of the transnational criminal syndicates. Law enforcement In 1997 the Commonwealth Government announced the National Illicit Drug Strategy (NIDS). Approved NIDS funding to June 30, 2006 for the AFP totals $185.4m. This funding has allowed for major developments both domestically and internationally. Within Australia the NIDS funding allowed for the formation of mobile strike teams and provided for the employment of specialist intelligence analysts. It also paid for additional equipment for both the AFP and the Australian Customs Service. Internationally, the NIDS funding allowed for the creation of the Law Enforcement Cooperation Program (LECP), which sponsored: capacity building for our regional partners. This included the provision of both training and equipment; engagement with cooperating law enforcement agencies. This funding allowed for the development of initiatives aimed at advancing law enforcement cooperation such as the deploy- Total domestic heroin seizures in kgs by fi nancial year. National Illicit Drug Strategy funding commenced in fi nancial year Platypus Magazine No September

4 A heroin haul is displayed before destruction ment of additional international liaison officers and the participation in international fora. This contributed greatly to the sharing of criminal intelligence in relation to the heroin importation syndicates; and, Operational deployment. This funding allowed for Australian Federal Police officers to be deployed internationally to assist our regional partners with law enforcement intelligence and operational issues. Transnational criminal syndicates As the initiatives sponsored by the NIDS funding began to mature, the AFP was able to develop a much greater understanding of the dynamics of the transnational illicit drug syndicates. We learned: that syndicates are not established on strictly hierarchal lines, but rather, they are amorphous they form, expand, merge and dissolve on a needs basis. Individual investors may cooperate in a series of importations but then join others independent of the initial syndicate; that heroin imports are funded by a group of investors in order to lessen the risk to individual investors; that syndicates engage the services of specialist contractors who provide transport, concealment and financial services; that importations require structural elements, such as a legitimising cargo stream, front businesses and concealment methodologies which take time to establish; and finally, there are a limited number of people who have the network of contacts within the criminal underworld, and more importantly, the level of trust that enables them to bring together the suppliers, investors, contractors, customers and the structural elements to conduct a successful importation. These people are referred to as the facilitators. Our understanding of these dynamics led us to the development of what we refer to as the Facilitation Model of Illicit Drug Importation. In this model the facilitators are the main vulnerability in the importation process, because without them, suppliers are unable to identify customers, investors cannot locate other investors and contractors have no one to whom they can deliver their services. Under this model, the amount of drugs seized from a syndicate becomes less important than the disruption caused to their importation process. The increased funding allocated under the NIDS allowed the AFP and our law enforcement partners to cooperate internationally to attack this area of vulnerability. Practical application Does this model explain the heroin shortage in Australia? A critical examination of successful law enforcement operations in the two years before the commencement of the heroin shortage tends to support the view that sufficient disruption was caused to major syndicates to prevent, or at least discourage, their attempts to import large quantities of heroin to Australia. We have observed that several groups had established almost a production-line approach to drug importations. They had refined their methods to a point where containers were being despatched from Asia before previous containers were unloaded. Case study - Operation Logrunner In October 2000, approximately 357kg of heroin was seized in Suva, Fiji, and three people were arrested by Fiji Police (FP). This operation should not be viewed alone, but rather as the culmination of a series of investigations which successfully dismantled a major transnational crime syndicate. AFP intelligence had indicated for some time that transnational crime syndicates may be using Pacific island nations to stockpile and distribute illicit drug shipments. NIDS funding allowed increased intelligence cooperation between relevant agencies, in particular the US Drug Enforcement Administration (DEA), Royal Canadian Mounted Police (RCMP) and the Royal Thai Police (RTP). As a result, two males were arrested at the Bangkok Airport in January 2000 when they were found to be in possession of 126kg of heroin. Both of these men held Canadian passports. A search warrant conducted on the home of one of the facilitators of this shipment led to the discovery of documents related to a company known as Prime Success Enterprises in Fiji. In late January 2000 AFP agents visited Fiji and assisted the FP in the execution of search warrants on Prime Success Enterprises and the home of its manager. Further information was located and analysed. In August 2000 there was a seizure of 93kg of heroin in Vancouver, Canada and subsequent investigations revealed connections to Prime Success Enterprises in Fiji. Tao Chuk-fong, the onshore facilitator, and six others were arrested. This group had a long history of high-level drug trafficking to Canada. The person responsible for the concealment and unpacking of the drugs had made 11 trips to Australia in the preceding three years, most probably for the purpose of supervising heroin importations. An AFP Strike Team was formed and deployed to Fiji in September The AFP coordinated liaison between the DEA, RCMP, FP, the New Zealand Police Service, Australian Customs and the National Crime Authority. AFP agents greatly enhanced the capabilities of the FP by the introduction of telephone interception equipment, surveillance, investigational and analytical skills. NIDS funding devoted to this operation amounted to almost half a million dollars. The full cost of Logrunner was $0.918m. The investigation revealed: the syndicate had sponsored trusted members to move to the region to establish legitimate businesses which could later be used as fronts for the illegal trafficking of drugs; a sophisticated methodology had been developed which involved the concealment of the drugs in specially designed plastic boxes which were hidden within the structural members of a particular type of shipping container; the syndicate was involved in a variety of criminal activity including people smuggling, Shipping movements of all sizes come under AFP scrutiny. Australia s island geography means that only the air or sea routes are open to drug traffi ckers. 46 Platypus Magazine No September

5 Drugs from the Golden Triangle are examined after seizure fraud and counterfeiting. In addition to heroin, the group also trafficked methamphetamine; Fijian-Chinese restaurateur, Bill Hao Tak-sang, was in possession of very large quantities of heroin. Hao s role was to store the heroin and to facilitate the distribution; Kam Hong Wong and Kam Chung Wong had been sent to Fiji as the onshore facilitators; a specialist transporter had been engaged for the transport of the drugs from Fiji to Australia; an agreement had been made between Hao and the specialist transporter for drugs to be delivered to a yacht moored in Suva, Fiji. Kam Hong Wong was arrested in the carpark of the Suva Yacht Club in possession of 35kg of heroin. Hao was subsequently arrested and a further 322kg of heroin seized. The heroin had been imported to Fiji in boxes containing undergarments. This operation spanned three continents, resulted in the arrest of 11 people and the seizure of 576kg of heroin. More importantly, the operation rendered ineffective a sophisticated concealment methodology, identified a legitimising cargo stream and removed some very important facilitators. Operation Logrunner is but one of the important international investigations successfully conducted in the years between the initiation of the NIDS and the commencement of the heroin shortage. Total heroin seizures for the financial years commencing 1994 to 1997 equalled 808kg whereas for the four years from 1998 to 2001 heroin seized totalled more than 1700kg. If the Logrunner seizure is added to this then the amount seized during this period is in excess of 2 tonnes. Heroin importation syndicates were hit very hard and police intelligence received by the AFP indicated that some investors had incurred losses which prevented them from continuing in the business and some syndicates had decided to avoid Australia altogether and look towards safer markets. The heroin shortage which commenced in late 2000 is a unique event. That it evolved largely as a result of the law enforcement intervention has been recognised internationally. In reference to the consequences of the shortage the UNDCP Global Illicit Drug Trends 2002 states, A preliminary analysis of the consequences of the heroin drought that has been affecting Australia since December 2000 (largely the result of successful law enforcement interventions which dismantled international trafficking rings supplying the Australian market with heroin from South-East Asia via Hong Kong), point in this direction. Australia remains a very attractive market to transnational drug importation syndicates. We are a comparatively wealthy nation that has traditionally had a large market for Number 4 heroin. Trafficking syndicates will need to develop new methodologies, create apparently legitimate front businesses and, most importantly, new facilitators will need to be developed. The AFP and our national and international law enforcement partners remain vigilant and will continue to cooperate in the pursuit of these trans-national crime groups. 48 Platypus Magazine