How does your garden grow? The Tuxtla Gutiérrez Cocaine Experiment

Originally Published by the Global Initiative Against Transnational Organized Crime, Available Here.

The find was unexpected and troubling. On September 9th, in the small Mexican town of Tuxtla Gutiérrez—located in Chiapas state—authorities uncovered the first evidence of large-scale efforts to grow coca in the country. Acting on the tip, members of the Mexican security services raided a property and found over 1,600 coca plants. The plantation was reportedly closely connected to a series of arrests in the nearby city of Tapachula, which involved the seizure of 180 kilos of coca leaf—the organic precursor for cocaine. The plantation in Tuxtla Gutiérrez is reportedly Mexico’s first evidence of coca growing in the country, and presents key questions: why in Mexico, why now, and where is this likely to lead?

The modern cocaine business is rooted in coca growth in South America—primarily in Colombia, Peru, and Bolivia. Once grown, coca is transformed—step-by-step—into cocaine. Several hundred tons of dried coca leaves are required for the production of a single ton of cocaine, requiring mass cultivation—and thus a large production area—to cater to the cocaine consumer markets in North America, Europe, and increasingly East Asia. In the modern era of cocaine, this cultivation has occurred almost exclusively in the South American nations listed above. However, this monopoly on production is rooted in social, political, and (illicit) economic rational, not horticultural necessities.

In the early 20th century the Dutch and Japanese developed thriving coca plantations in East Asia, while the British and French experimented with its growth in their African colonies and in other areas around the world. World War II and the gradual prohibition of cocaine that followed curtailed coca’s industrial-scale production in these disparate areas of the world. Only in South America—where the shrub was first domesticated and still home to a thriving indigenous market in coca (though not cocaine)—did growing continue. Efforts by South American states to eradicate production have had little success, and have more often than not resulted in alienated farmers and empowered insurgents. Until now, drug trafficking organizations have had little impetus to relocate production outside of the Andean region.

While only its creators know the rational for developing the plantation in Tuxtla Gutiérrez, an examination of the current situation in Central American transport countries and the Caribbean provide hints. First, violence and instability in Central America has worsened over the last several years. Drug trafficking organizations are popularly viewed as thriving in—and actively seeking to create—chaotic situations and failing states, however this is only true to a degree. For both licit and illicit businesses, societal chaos and the absence of state services impede financial and logistical planning, and generally increase the cost of doing business. While illicit businesses may have tools—such as paramilitary protection units—that enable them to weather chaotic situations better than most, such situations are far from ideal for them. In Central America street gangs, tumbadores (groups specializing in the theft of narcotic shipments), and local drug trafficking groups have gained power in recent years, increasing the risks—and hence the cost—that Mexican DTOs face in transporting narcotics through the area.

Apart from Central America, the other main route between South American cocaine production zones and North American markets is through the Caribbean—a route that was heavily favored in the 1970s and 1980s, before being largely abandoned due to aggressive U.S. maritime and air interdiction efforts. There have been some attempts to reinvigorate trafficking through this area, though U.S. military and law enforcement focus on the area make smuggling efforts complicated and risky. There are few easy—and economical—transport options for Mexican cocaine traffickers in the present day. Attempts to grow the drug in Mexico may thus be an experiment in shortening their supply chain, decreasing their exposure to chaos in Central America and U.S. interdiction efforts in the Caribbean. An additional benefit for Mexican cartels is that domestic production of coca cuts Colombian DTOs out of the equation, and increasing their own profits.

As an experiment, the Tuxtla Gutiérrez plantation may have succeeded even though it was uncovered. Over 1,600 plants were grown, existing long enough for at least 180 kilograms of coca leaf to be harvested. The problem with the Tuxtla Gutiérrez plantation was, mainly, that the effort took place in Tuxtla Gutiérez. While Mexico’s security services have been buffeted by the drug trafficking wars of the 2000s, they are far better trained, well equipped, and more numerous than their counterparts in Central America. Had the Tuxtla Gutiérrez plantation been created on the other side of the Mexico-Guatemala border—a few kilometers from the town—it is far less likely the endeavor would have been uncovered. This raises the question of whether other coca production experiments are occurring in Guatemala or other Central American countries? If so, already weakened Central American countries could face a significant new and extremely dangerous threat.

The Tuxtla Gutiérrez plantation also raises risks outside of Mexico and Central America. The increasing popularity of cocaine in Europe and East Asia have forced DTOs to develop long cocaine supply chains that stretch through often unstable areas of the world and are highly vulnerable to disruption and interdiction. If drug trafficking organizations are experimenting in growing coca closer to one consumption market, it raises the possibility they similarly may try to create plantations closer to their other major markets. As the coca producers of the early 20th century demonstrated, there is little horticultural bar to developing coca production in Asia and Africa. It remains to be seen whether the Tuxtla Gutiérrez experiment is the beginning of a new trend, and if so where it will focus and what the ramifications will be.

Petrol smuggling: oiling the wheels of organized crime

Originally Published by the Global Initiative Against Transnational Organized Crime, Available Here.

As night falls the petrol smugglers on the Algerian-Moroccan border get to work. Moroccan villages that are languid by day now buzz with activity, as old Peugeots and Renaults roar down the dusty access roads that parallel the frontier. Closer to the border, long lines of donkeys—each loaded with twenty 30-liter jerry cans—are arriving from Algeria. The commerce is brisk, with petrol exchanged for food, goods, and cash. For those willing to risk crossing the border, the profits are enormous. By morning, the border is again dusty and deserted, as the smugglers wait for the darkness of night to reengage in their lucrative trade.

The theft and illicit sale of petrol is widespread.  Worldwide, organized crime syndicates and petty traders profit off the differences in the price of petroleum, buying petrol where it is cheap—or stealing it—and selling it slightly below market rates in areas where it is more expensive. There is no shortage of customers. Apart from its profitability, petrol smuggling is attractive to organized crime groups due to the ease with which they can procure the product. For most smugglers, their petrol comes straight from the pump at a local service station.  For some the product is procured directly from wholesalers, while in other places —notably Nigeria and Mexico—the petrol is stolen in bulk from pipelines. The sale of the petrol is as easy, either sold at the roadside, or fenced through unscrupulous service station owners. While smuggled petrol usually stays within the region it has been pilfered from, stolen crude oil can go global, fed into refineries half a world away.

Those involved in petrol smuggling are a diverse and divergent lot. The most numerous are local crime networks. These men—and occasionally women—tend to operate in defined areas along international borders, buying and selling in local markets. While these groups are typically small and locally situated, they can have a complex internal organization. As one smuggler along the Tunisian-Algerian border explained “a bunch of different groups function within our network – the buyers, the loaders, the drivers, and the leaders.” The barriers to entry are low, with the same smuggling noting that the major hurdle for him was coming up with enough capital to buy a truck to smuggle with. While some within the local smuggling networks get wealthy off the trade, for most it offers a comfortable though hardly extravagant livelihood.

At the other end of the scale, there are also highly organized, transnational networks active in petrol smuggling. Many of these groups started as local smugglers and evolved—through opportunity or necessity—into highly organized, large-volume smuggling networks. Nigeria’s smuggling networks offer a stark example of just how powerful, large, and sophisticated smuggling networks can become. Operating in the country’s Niger Delta, the smuggling networks reportedly siphon 150,000 barrels a day from the region’s pipelines. The vast majority of the oil—roughly 120,000 barrels—is exported, transported throughout West Africa and onto the international market. In some cases, the networks employ oil tankers to move their ill-gotten gains.

A third type of actor involved in petrol smuggling involves existent transnational organized crime group looking for new opportunities. For these groups, petrol smuggling is usually not their primary illicit business. Rather, it represents an opportunistic expansion by the group into a new business area that presents minimal risk and high-profits. In Mexico, the Zetas and other Drug Trafficking Organization are expanding rapidly into petrol theft and smuggling. In an interesting derivation, the Zetas reportedly both smuggle petrol and levy taxes on any small-scale smugglers seeking to work in areas they control.

Governments and industry are aware that they face a challenge. A number of oil producing countries have begun to combat petrol smuggling. However, in many locations where smuggling is rife there is more official noise than action—petrol smuggling is rarely perceived as existentially threatening to the state, in the same way that drug and arms trafficking may be. Frequently, government officials themselves are believed to be either involved or complicit in the trade. Nonetheless, petrol trafficking can have serious ramifications for those states that it touches. One need look no further than Syria and Iraq, where oil smuggling have helped to bankroll the operations of the Islamic State militant group. As the price of oil edges of up inexorably over the coming decades, it is likely that petrol smuggling will become more profligate and more profitable for the groups involved. International actors need to act soon, creating new forums to coordinate actions against such groups and mechanisms for identify and deterring their operations in order to mitigate the threats they pose.

It’s Always Sunny in Sinaloa

Originally Published by the Global Initiative Against Transnational Organized Crime, Available Here.

On Saturday, February 22nd, an elite force of Marines in the Mexican city of Mazatlan arrested El Chapo. Joaquin Guzmán-Loera, AKA El Chapo, is a key leader within the Sinaloa Federation, the largest and most entrepreneurially innovative drug trafficking organizations currently operating in Mexico. His arrest is a major coup for the Mexican and US law enforcement against one of the most powerful non-state armed groups in Latin America. Guzmán’s arrest is also a coup for President Enrique Peña Nieto’s administration, and will likely mute recent criticism of the President’s record in combatting drug trafficking organizations (DTOs).

Joaquin “Chapo” Guzmán was born in the rural town of Badiraguato, in the Mexican state of Sinaloa. Like many in the older generation of Mexican drug traffickers, Chapo was introduced to the trade through family connections. He started with the Guadalajara cartel in the 1980s, acting mainly as a logistician and manager. With the breakup of the cartel in 1989, Chapo gained control over a small smuggling plaza in the northern state of Sonora. Chapo proved to be both a charming yet brutal tactician. Partnering with traffickers such as Ignacio Coronel Villareal and Ismael Zambada Garcia, Chapo created the organization that would come to be known as the Sinaloa Federation. Also during this time he engaged in a bloody conflict with Tijuana’s Arellano Félix cartel. In one of the most notorious and bloody spasms of the conflict, a Catholic Cardinal was gunned down at the Guadalajara airport, after reportedly being mistaken for El Chapo. The assassination proved too much for the Mexican government to ignore, and after a short but intense manhunt El Chapo was taken into custody in Guatemala. He spent the next eight years managing his organization from prison, before escaping in 2001.

For the last decade, El Chapo has played an intimate role Mexico’s drug war. His forces initiated the conflict in 2005, when they invaded the border city of Nuevo Laredo, aiming to eject the weakened Gulf Cartel. The multi-year battle that followed was far more violent and paramilitarized than previous drug trafficking disputes in Mexico, with hundreds of gunmen deployed by both sides. While Chapo’s Sinaloa Federation is widely seen has having lost the battle for Nuevo Laredo, it did not dent his expansionist tendencies. In 2008 his forces invaded Ciudad Juarez, another border city that served as a vital conduit for drugs heading north. Chapo’s battle with the Carrillo-Fuentes DTO was bloody, with 3,115 murders in 2010 alone, and barbaric, defined by torture, decapitation, and group massacres. The Sinaloa Federation won the battle for Ciudad Juarez, positioning the cartel as one of the most powerful in Mexico. El Chapo also sought to expand his territory outside of Mexico, dispatching operatives to Central and South America, Europe, Africa, and East Asia. Despite his lack of formal education, Joaquin Guzmán-Loera oversaw the creation of a sprawling multinational illicit organization, with financial interests in a host of illicit and licit activities.

Chapo Guzmán’s arrest is clearly a major victory for President Peña Nieto. The President came to office promising to lessen the drug violence, and roll back the highly militarized strategies of his predecessor. Unsurprisingly, these promises have proven difficult to achieve. While violence has abated in some areas of the country, other areas, such as Michoacán, have become far more complex and dangerous. El Chapo’s capture is an important symbolic win for the President, squelching concerns raised by some in the U.S. and Mexico that Peña Nieto’s strategy is weak on organized crime. It will also squash persistent rumors that the Mexican Government has been purposefully soft on the Sinaloa Federation, instead targeting groups such as the Gulf Cartel and the Zetas DTOs.

However, while Chapo Guzmán’s arrest is a win for the President, it is unlikely to be a game changer for the country for several reasons. First, it is unlikely to significantly hobble the Sinaloa Federation. Mexican drug trafficking organizations in general, and the Sinaloa Federation specifically, are resilient and adaptive entities. The elimination of a leader rarely leads to the disintegration of the organization, though it may prompt a violent contention for power amongst key lieutenants. Occasionally these schisms have lead to one or more factions breaking away from the original cartel, and forming their own drug trafficking organization. Chapo was one of several key leaders in the loose confederation of drug cartels that constitute the Sinaloa Federation. It is likely that one of the remaining leaders in the group, such as Ismael Zambada Garcia, will either directly take over Chapo’s faction or intercede in the succession process to minimize violence and instability. Second, Mexico’s drug conflict is a multi-sided fight between DTOs, and is not predominately a fight between individual DTOs and the Government. In Mexico, successes by the Government against a cartel often prompt more violence, as rival cartels seek to capitalize on the momentary weakness of their adversary. The coming months are likely to be bloody.

Nonetheless, President Peña Nieto and those in the Mexican and U.S. Law Enforcement communities should be commended for finding and arresting Chapo Guzmán. While his detention may not be a game changer for Mexico, it is a demonstration that drug trafficking and murder have repercussions, even for one of the world’s richest men.

Dirty cash for dirty trash

Originally Published by the Global Initiative Against Transnational Organized Crime, Available Here. 

 

“We’re polluting our own house and our own land. What are we going to drink?”

“You idiot. We’ll drink mineral water.”

Camorra Members discussing the dumping of toxic waste outside of Naples

A public health crisis is brewing in southern Italy. In the countryside around Naples, cancer rates have spiked, while in the city, the U.S. Navy has warned its personnel to avoid drinking the water. For decades the region’s Camorra organized crime group has engaged in a lucrative trash-for-cash racket, disposing of toxic waste for European industry at a fraction of the legal price. Burying the waste in the Neapolitan countryside has earned the clans billions of dollars. However, the Camorra is not alone in its involvement in the illicit disposal of toxic waste. As regulation have grown more stringent, and the cost of legal disposal have mounted, otherwise reputable firms have increasingly become entangled with organized crime groups throughout the world. As the situation in southern Italy shows, it is often innocent residents of the dumping zones who suffer most from the noxious trade.

The trade in toxic waste has existed for decades, with the industrial effluent from the developed world often exported to developing nations. However, two trends have driven the growth of illicit trade in toxic waste, and the involvement of organized crime groups. First, regulations and the cost of disposing of toxic waste have continued to mount. By and large this is a positive development, spurred by civil society and government concerns over the health and environmental impact of toxic waste disposal. However, regulations and the cost of toxic waste disposal differ dramatically between states. Some businesses have sought to financially profit from the regulatory heterogeneity, by shipping their waste to the least regulated, and thus most inexpensive, countries for processing. The second trend, efforts by the international community to restrict the legal trade in toxic waste, has emerged in response to business efforts to dispose of toxic waste on the cheap. However, despite international efforts the global trade in toxic waste continues. Efforts to restrict the legal trade have opened up a vast opportunity for global organized crime groups, who are able and all too willing to smuggle and dispose of the toxic effluent.

Camorra clans in Naples seem to have been early and enthusiastic adopters of the toxic waste business. In 1997, one Camorra member testified that millions of tons of waste were regularly moved to the areas outside of Naples and buried. The financial stakes of the market are huge. One NGO estimated the yearly value of illicit waste disposal in Italy at 16 billion Euros. Reportedly, the Camorra has begun to expand it waste disposal activities abroad, via shipments to Eastern Europe and East Asia.

The illicit trade is toxic waste is not a victimless crime. The toxicity of the products involved pose grave threats to both those involved in the trade, and the public at large. Over 100,000 were sickened in Côte d’Ivoire in 2006, when oil byproducts were dumped in Abidjan. A spectacular photo essay recently published on the largest e-waste dump in Ghana highlights the huge health risks for local workers and resident populations. In Italy, the illicit dumps outside of Naples are believed to have propelled a cancer epidemic. Wiretaps show that Camorra members involved in burying the waste knew the dangers it posed to the local community, yet they buried it anyway. While the Italian government has initiated efforts to clean up the waste, the public health challenge posed by the buried toxins is likely to endure.

Unfortunately, the illicit trade in toxic waste is likely to grow. The financial stakes are too high for international companies, the financial gains for organized crime groups too large to pass up, and the laws to soft to deter either the businessmen or the crime groups from engaging in the activity. As polities in Europe, North America, and East Asia buttress their regulations against toxic waste disposal, it is likely that the illicit trade will be routed to developing countries, posing grave health threats to the populations there. While there is no obvious panacea to the problem, the transnational nature of the illicit trade in toxic waste necessitates the strengthening of laws against illicit dumping in both exporting and importing countries, as well as robust international cooperation to identify what waste is being moved, to where, and who is responsible. Though such steps are only a preliminary effort, they will have a tangible and positive impact on public health for those who would otherwise be victimized by the greed of organized crime groups and their industrial partners.