Showing posts with label SOCA. Show all posts
Showing posts with label SOCA. Show all posts

Wednesday, June 09, 2010

Suspiciously inflated drug seizure 'street value' estimates (again)

The BBC reports today, in a news piece titled 'Two tonnes of cocaine seized in The Gambia' , that:

 
 'At least two tonnes of cocaine with a street value estimated at $1bn has been seized in The Gambia, bound for Europe.'

Similar reports have run in number of other outlets including AFP (Billion Dollar cocaine seizure in Gambia), Reuters , the Daily Mail, and numerous others. There is a  discrepancy in the reporting in the quantity seized,  which varies from 2 to 2.5 tonnes, but all report the 1 billion dollar street value estimate, with the exception of PA that does not mention any street value figure, and also puts the size of the seizure at 2100 kg.

It is not clear from the piece who made this estimate of street value - whether it was the Gambian authorities, the UK's Serious Organised Crime Agency (who were involved in the operation), although the AFP report suggests the latter.


Either way it immediately rang alarm bells; the number not only seems conveniently rounded - one of those dramatic sounding media-friendly numbers that we see so often in drug stories (see here and here for example) - but also it was suspiciously big. 

A couple of quick sums. Two tonnes of cocaine amounts to 2 million grams. To get a street value of $1 billion dollars would mean that each pure gram was selling for $500, or £344 at current exchange rates. That seems somewhat  high - given that UK 2009 cocaine prices are nearer £40 a gram, which would give a total street value of £80 million or $116 million.

But this would not account for the fact that the street drug is heavily cut. If we factor in lower end average purity levels of 25% (itself a SOCA stat) this would give you a figure $464million.

Even if we go with the higher 2.5 tonne figure (the 2.1 seems more likely, but anyway)- this would still take the street value to $580million - which remains some distance from 1 billion. Having exhausted all the available tricks: street value (at least x 10), purity (x4), convert to US dollars - even though its for sale in Europe (x 1.2), I'm still struggling to see how they could push the figure up to a juicy billion. Maybe the fact most 'grams' sold are a little under could nudge it up by 50 million or so, but the only way I can see they could have managed it is to base calculations on  a cherry picked example of fantastically expensive/rubbish cocaine from somewhere in Europe. Who knows? (but we are interested to hear btw, should those concerned care to illuminate us).

These sorts of (all too familiar) boastful statistical shenanigans can be seen to reflect the wider malaise in drug interdiction. In the face of their futile battle against an undefeatable enemy, there is a desperate need for enforcement agencies to demonstrate success, especially when the spending axe is hovering. Even if the street values are shown to be completely correct - there is still the relentless trumpeting of seizures to consider in the light of the rarely mentioned but relentless increases in availability and use that accompany them.

Whilst demand for cocaine remains, and cocaine remains prohibited, organised crime will always find away to exploit the lucrative opportunity that this creates. They are an endlessly flexible, innovative and ruthless enemy. Localised 'success' will only ever shift transit routes elsewhere - as the shift from Caribbean to West African transhipment routes demonstrates. These seizures are Pyrrhic victories; the enforcers are inadvertently part the problem they are simultaneously trying to stamp out.

There is a way to put the criminal drug traffickers out of business for good, but the key players in international drug control don't want to talk about it.

Wednesday, May 13, 2009

How cocaine markets have been hit by the financial crises

The following commentary on the recent SOCA report has been prepared for the Transform Blog by Axel Klein, Lecturer in the Study of Addictive Behaviour, Centre for Health Service Studies, University of Kent.

On May 12th a government agency reported that rising levels of dangerous adulterants including boric acid, an insecticide, and tetramisole hydrochloride used as worm powder are being added to cocaine sold in UK drug markets. This is alarming as the largest group of consumers in UK retail markets are 16-24 year olds. It seems extraordinary that the exposure of school children and students to toxic substances sold in an unregulated market, with minimal information about content or health risk is the direct result of government policy.

Whatever the unintended consequences, SOCA, the agency that is responsible for stopping the inflow of cocaine into the UK, is celebrating the success of its undercover work manifest in the ‘wholesale’ cocaine price rise. Retail prices have, alas, not changed, but SOCA points to decreases in purity which are attributed to rises in overall prices and concomitantly, a stipulated reduction in overall inflows. Both these trends are apparently a direct result of SOCA activity in the UK, and Europe wide operations, with or without SOCA. This follows from the reported increase in overall seizures and an even sharper rise in overall arrests related to drug trafficking.



So what are the consequences of this 'success'? One is already noted, the increasing adulteration of street cocaine – the substance that people snort up their noses or smoke in rocks of crack. Where these adulterants are toxic they increase the health harm to users whose continuation of use is not affected by the supply cuts up the supply chain. Retail markets remain unaffected and continue to respond to consumer demand. What is sold is a more dangerous, diluted product which will first cause health damages to some users, and may secondly well increase the incidence of use, as consumers compensate through stepping up episodes of consumption. Most affected will be the consumption of dependent users outside of effective treatment, who will increase their dosage to riskier levels in compensation of diminishing potency. The minority of intensive and chaotic users with no legitimate means of income to fund their habit will resort to illegal alternatives to meet rising costs. More crime will produce more arrests and a diversion of some perpetrators of acquisition crime into prison where treatment can be offered part of the new Integrated Drug Treatment System. Repressive drug policies thereby generate crime to produce an opportunity for arrest. If it works all the crime generators are taken out of the drug / crime cycle through rehabilitation, and a portion of overall crime eliminated. Casual cocaine users on the other hand will be driven away from cocaine, and reduce overall prevalence in the mid term. Whatever the calculation of law enforcement agencies in meeting their objectives of eliminating cocaine from the UK, the dynamic of the illicit market has to be factored in. According to the assumptions – search for profit, willingness to break the law, - it is also predictable.


The rise in ‘wholesale’ prices in cocaine markets is going to set an incentive for organised crime groups to redouble their efforts. Where profits are rising and other forms of enterprise are as affected by global downturn as the licit economy organisations will respond that have hitherto been outside the cocaine trade in the UK. In a situation of overall contraction across the economy cocaine importation, according to SOCA, makes for an attractive business proposition. The National Criminal Intelligence Service, predecessor of SOCA, was alarmed by criminal groups committing violent crime to collect start up capital for entering the drug trade as early as 2003.

If this phenomenon is known, then why is it sensible for a government crime prevention agency broadcast the opening of a criminal opportunity? Most potential perpetrators, it may be said, already know this and SOCA would not give away information unless it had been carefully assessed. Yet information on ‘wholesale’ prices was precisely what the Matrix analysis based on interviews of 222 drug traffickers found was difficult to come by (Matrix Knowledge Group, 2007, The illicit drug trade in the UK, Home Office Online Report 20/07). The cocaine business is extremely opaque, with no overall information on the movements of goods, leaving each trader to operate through networks. Prices are determined and assessed through personal information, and the weighing of risk and profit. An earlier Home Office study characterised the drugs market as fragmented (Pearson et al, 2001, Middle Market Drug Distribution, Home Office Research Study 227)

Cocaine transactions are cash based, and take place in marginal settings, outside the protective framework of the law. They are fuelled by fear of violence from partners or police and the loss of wealth or freedom. Prices are dictated by security as much as by market demand and exponential increases after importation. The number of people involved at buyer and seller level is far smaller than at the retail level.

At street market level research can establish overall prices as informants are easy to identify and liable to give truthful answers. Surveys can establish relatively easily what drug buyers buy as work of the Independent Drug Monitoring Unit has demonstrated. It has historic data on price trends collated from questionnaires distributed at festivals and web surveys. The police, by contrast, have been relying on undercover purchases. Over the years, the respective drug price information has been variance. Notwithstanding shortcomings, the police approximations of price levels have been methodologically far more robust at the simpler retail market than elsewhere. The claims to price trends in the secretive, opaque and volatile ‘wholesale’ market requires a ‘conceptual explanation of methods. All we have at the moment is a reported fall in purity for which there could be a multitude of causes.

We have learnt from the heroin drought in Australia in 2000, celebrated by law enforcement as a seizure breakthrough, that market changes are often the result of supply shifts. Serious organised crime groups can switch their exports to more lucrative markets, wherein currency ratios play a part. In the late 1990s Burma based drug trafficking groups redirected heroin flows from Australia to China while increasing the supply of methamphetamine (Bush, William, Marcus Roberts and Mike Trace, 2005 Upheavals in the Australian drug market: heroin drought, stimulant flood, Beckley Foundation, briefing paper 4). In the UK the stipulated fall in cocaine may be a function of sterling depreciation, or a corollary of overall drop in imports. Bitten by recession, UK consumers are spending less on imported luxuries, cocaine included. Among celebrities the new austerity chic may even trigger an abstinence trend.

In the streets though a different process, of cocaine normalisation may have been at play. The prevailing culture of psychoactive experimentation has seen a rapid widening of occasional to regular cocaine consumers. With this ‘social extensification’ cocaine has been transformed from luxury to chemical fix, and quality dropped to the standards of a mass market.

Low grade cocaine, ironically, is consequence of the same repressive drug supply policy that delivered high grade cannabis. In both cases changes in the product have not responded to consumer demand, but are market adaptations to the constraints of enforcement. Young people are left to celebrate the end of exams with 'killer skunk' and insecticide courtesy of the UK Drug Strategy.

There are increasing demands for closer scrutiny of the consequences of drug policy enforcement. Instead of explaining hard data on reducing cocaine availability, SOCA produces soft targets, hard to verify, and of indirect value. According Trevor Pearce,[1] project Kitley has netted some 15 tonnes of chemicals used to bulk up cocaine and led to 72 arrests. But how this impacts on the overall availability of cocaine and raises the levels of safety for cocaine users remains mysterious. It is best read as an activity report demonstrating that the agency has been active and successful, therefore justifying ongoing support. ‘We are on the right track, let us not give up fighting now’ is the motto.

What happens when we get there is not clear. But the concern is shared by senior officers at SOCA itself, one of whom lamented that:

We may have to say at some stage that taking heavily adulterated cocaine is more physically harmful to the user than taking cocaine that’s less adulterated. That is not the case at the moment. But we’ve got to keep asking the question. I’m aware that the health equation could one day say: Stop trying to stop cocaine coming in.”

It leaves the drug policy watcher wondering what exactly the point is?

Tuesday, May 12, 2009

Clutching at Straws - SOCA Claims it is Winning the War on Cocaine

In a report released today the Serious Organised Crime Agency, (SOCA) claims that it has increased the wholesale price of cocaine and that street purity has fallen.

As the evidence has shown over the long term, illegal drugs have become increasingly cheap and available. However, short term reversals in these trends are often proclaimed by prohibitionist governments and the enforcement agencies charged with fighting the war on drugs, and this is a prime case in point. Taken at face value, these reversals in fortune will be used to signal imminent victory in the wider war.




For those of us who have seen entire enforcement agencies come and go, this is more of the same in the propaganda war. Cherry picking statistics is bread and butter for those who have to show success in an ocean of failure. President Obama is on the record in 2005 describing the war on drugs as an "utter failure".

The global war on drugs has gifted a trade to organised criminals, valued at £4-6 billion a year in the UK alone and £160 billion globally. One has to ask who benefits from hiking the price and lowering the purity of cocaine - even if this can be achieved or is the result of enforcement efforts? The answer is twofold:
  1. Governments and agencies who want to dupe the public into maintaining support for the futile and counterproductive war on drugs and,
  2. Organised criminals who can take advantage of rising demand and absorb the price hike by making up weights by adding adulterants at retail level, sure in the knowledge that the illegal market will be theirs to exploit for years to come.
One of the more pertinent policy outcomes that SOCA have not been trumpeting is that cocaine use has more than doubled in the last ten years (and is still rising) and part of this phenomenon has been the disastrous emergence of widespread crack cocaine use over the same period. It is likely that this explosion in demand is driving any recent decrease in cocaine purity rather than supply side enforcement impacts. Clearly there is considerably more cocaine entering the country than their was when SOCA was set up. And this has nothing to do with how effectively SOCA do their duties; the economics of a totally unregulated multi-billion pound market (in which demand is high and rising) controlled by flexible, cunning and often violent criminal profiteers make SOCAs task one that is doomed from the outset.


If SOCA are so sure that this recent evidence is supportive of their work, I'm sure that they will back Transform's call for an independent impact assessment of the current regime of prohibition and a genuine exploration of alternatives, including the legal regulation of currently prohibited drugs. David Cameron supported a call as a backbencher, for the UK to initiate just such a debate at the UN in 2002.

So, what should we believe? Decades of history, or the agency that has to show that its work isn't futile and counterproductive? You decide...

Media coverage:


See also previous Transform blog:

Playing SOCA with drugs policy (Jan 2007)


Tuesday, May 06, 2008

SOCA, Organising crime

It was brought to my attention recently that the Serious Organised Crime Agency (SOCA) has, ostensibly at least, a remit essentially based upon harm reduction.

The following is from the ‘About us’ section of the SOCA website:

“SOCA is an intelligence-led agency with law enforcement powers and harm reduction responsibilities. Harm in this context is the damage caused to people and communities by serious organised crime.”

Now, according to the State of the Future survey by the World Federation of United Nations Associations, 2007, the drug trade is the second biggest earner for organised crime, with an estimated $320bn in annual takings.

In 2003 the Prime Minister’s Strategy Unit produced a report that showed how supply side enforcement of the drug laws gifts the trade to organised crime.

Again, according to the SOCA website:

“The SOCA Board has determined that SOCA should aim to apportion its operational effort broadly as follows against the main threat sectors:

  • drugs trafficking, primarily Class A - 40%...”

So, if SOCA is genuinely intelligence-led, the main thrust of 40% of its operational effort against drug trafficking ought to be in explaining to policy makers that prohibition creates huge opportunities for organised crime and that it should be stopped forthwith and replaced with a legal distribution network for currently illegal drugs.

My guess is that it isn’t doing that; that SOCA is colluding with prohibition’s supporters in what amounts effectively to a ‘protection racket’; not reducing harm, but actually supporting its increase to create a raison d’etre for itself.

I leave it to you to decide if that is intelligent or not…

Friday, April 13, 2007

Unhappy birthday for SOCA

SOCA's annus horriblis must be even more dispiriting for all concerned given that the agency is only 1 year old. They really have had a shoca.

In January the blog discussed how the historic failure of supply side drug inteventions combined with populist 'get-tough' law and order politics provided the backdrop for the emergence of the the new Serious Organised Crime Agency - and also suggested why it was reportedly running into problems. A recent report in the Guardian to mark the agencies 1st birthday details the ongoing problems.



To the good folks at SOCA, just so you in the future you don't say we didn't warn you, to spell it out again: supply side drug control is doomed to fail because of high demand for drugs combined with the brutal economics of unregulated markets run by criminal profiteers (aka prohibition). No10 knows it, The Home Office knows it, in fact anyone who has even glanced at the evidence (that would be the trillions of pounds/dollars spent on interdiction whilst drug production, supply and availablity have increased consistently for 40 years) know it too. Its OBVIOUS: really, theres no more evidence required.

see also Massive drug seizures solve world crisis
.

Tuesday, January 30, 2007

Playing SOCA with drug policy?

SOCA, the new Serious Organised Crime Agency, launched by Tony Blair with some considerable fanfare in April last year seems to be running into problems even before it's first year is up. At the launch The prime minister told us that from now on life would be "hell" for "criminal Mr Bigs", and the previous Home Secretary announced that he was “sending the organised criminal underworld a clear message: be afraid". (Telegraph comment piece)



Blair launches SOCA, promising 'Hell' for 'Mr Big'


But two reports on Channel Four News last week suggested that any honeymoon period is well and truly over, and that Mr Big may not be quite as afraid as was hoped. So what's it all about and why have things apparently gone pear shaped so quickly? The news reports, which included interviews with disgruntled SOCA staff and various leaked emails, suggested bureaucracy and management issues, low morale and 'loopholes' that meant large numbers of drug seizures were not being followed up, attracting the ire of Police Federation amongst others.

But the problem with SOCA (I am only talking about the drugs side of their work here) is not primarily and internal one of incompetence or organisational strategy. The real problem is because of the terrible truth: the better SOCA do their job, the worse things will get. Supply side drug controls do not and cannot prevent drugs from reaching markets where sufficient demand exists. The best they can achieve is to further inflate drug prices, driving low income problematic users into ever larger volumes of offending to support their habits and attracting ever more violent criminals to control the profits offered up by prohbition. As we shall see, this is no secret to ministers.

SOCA was established last April following a merger of the National Crime Squad, the National Criminal Intelligence Service, and sections of HM Revenue and Customs (HMRC) and the Immigration Service. The new entity has a £400+ million a year budget, and organised crime involvement with the drugs is the most significant focus of their work. According the SOCA website:

Trafficking in heroin and cocaine, particularly crack cocaine, poses the greatest single threat to the UK in terms of the scale of serious organised criminal involvement, the illegal proceeds secured and the overall harm caused.

Home Office estimates put the harm caused by Class A drugs at around £13bn a year. This largely arises from the profits from sales, the crimes addicts commit to fund their habit, and the damage caused to family life and communities, as well as from costs to addicts' health
.

As a brief aside, the above isn't a summary of the information of the SOCA's drug related activities on their website – that's all of it.

Anyway, if the organisation seems to be running into trouble this certainly isn't the fault of its core staff – many of whom, according to the Times, are apparently now trying to leave because of the organisational malaise and a desire to do some real hands on police work. I have met SOCA staff at various conferences and seminars and their professionalism and commitment to tackling organised crime isn't in question.

No, if there is a problem it is primarily the politics behind the organisation, that casts a shadow over everything it does. The backdrop to the establishment of SOCA is a 10 year drug strategy that, as it approaches its end, has failed in quite spectacular style to achieve its targets on reducing Class A drug supply and use (remember that 50% reduction in class A drug use/availability by 2008?). This failure is combined with a political climate of macho law and order posturing and one-up-manship between the major political parties, characterised by tough talking rhetoric that is heavily dictated by a tabloid agenda.

Drug policy under this Government (and to be fair, previous ones aswell) has been dominated by politics, remaining, for the most part, resolutely un-bothered by rational evidence based policy making. As drug supply, drug use, drug crime, and overall drug harm have continued to rise, the Government, rather than consider a change of approach or progressive policy alternatives, has defaulted to tough talking spin and bluster:

'Tough' new targets are announced as the old ones are missed and quietly retired, usually made as part of an updated strategy, from a newly re-named Drug Strategy Unit/Directorate/Wotsit, after a relocation to a new ministry, or by a tough new 'bruiser' Home Secretary – because obviously that's going to make a massive difference.

'Tough' new legislation is passed, like 2005's ill-thought out Drugs Act, which no-one in the drugs field wanted or asked for (the only welcome clause being the repeal of reforms to section 8 of the MDA, from the Government's previous ill thought out get-tough (sp)initiative). Much of it – like clause 2 of the Drugs Act – is never likely to be commenced because it is frankly a load of rubbish. I use the term advisedly as the biggest Drugs Act nerd on the planet outside of the poor unfortunates at the Home Office who had to draft it.

'Tough' announcements that grab a few headlines but never actually come to fruition because they are impractical, unethical, or occasionally illegal. Consider for example random drug testing in schools (announced in a Tony Blair exclusive interview in the News of the World), or the equally idiotic drugs sniffer dogs in schools, both going the same way (nowhere) as mandatory minimums, three strikes you're out, and all that other disastrous US-style 'war on drugs' nonsense.

'Tough' new appointments are made – The Drug Czar, a tough cop who looks a bit like Jack Palance, modelled on his ass-kickin' US counterpart, who is then unceremoniously dumped a couple of years later - a straw man for a doomed enforcement-led drug strategy he had no hope of salvaging.

And on and on it goes. There's a pattern here. Drug policy has been all about the big announcements, the new stuff – the process. Its all about the future, about turning the corner, about the upcoming breakthrough, about being tough. Its never about the outcomes.

For the simple reason – obvious to anyone not in a sensory deprivation tank for the past decade - that the outcomes are all dreadful.

Worse than dreadful – they are the opposite of what they were supposed to be. Class A drug use, (in particular the problematic kind that we should genuinely be concerned about), has gone up since 1997. A lot – including the crack 'epidemic' that all that toughness manifestly failed to prevent. Drugs are cheaper and more available than they have ever been. By a considerable margin. Attempts to control drug supply are a joke, and a pretty poor return on the £20 billion or so that has been hosed into drug policy enforcement over the past decade. And let us not forget that of the £13 billion a year of drug related harm that SOCA mentions on its otherwise totally un-infomative website, 88% of which is crime costs, and 95% of that being crime committed by addicts to support their habits. ie created by enforcement. ie costs of prohibition.

So come 2002 and Tony Blair is looking down the barrel of a drug policy disaster, a ten year strategy dramatically not doing what is was supposed to, and various groups including the Police Foundation and the Home Affairs Select Committee pointing out this fact very eloquently and publicly. At this point he called upon the top boys from his personal policy think tank – the Number Ten Strategy Unit – and they produced a devastating 114 page analysis of UK drug policy that shows with crystal clarity that supply side enforcement cannot ever work and actually creates huge collateral damage in the form of that £13billion or so a year in crime costs (they actually put it at £16 billion).

The No 10 report (presented to ministers and then supressed until FOI pressure and leaks brought it into the public domain) notes that:

“UK importers and suppliers make enough profit to absorb the modest cost of drug seizures” (p.82)

“The long term decline in the real price of drugs, against a backdrop of rising consumption, indicates that an ample supply of heroin and cocaine has been reaching the UK market”(p.80)

“Despite seizures, real prices for heroin and cocaine in the UK have halved over the last ten years”(p.91)

“Over the past 10-15 years, despite interventions at every point in the supply chain, cocaine and heroin consumption has been rising, prices falling and drugs have continued to reach users. Government interventions against the drug business are a cost of business, rather than a substantive threat to the industry's viability.” (p.94)


The report goes on to demonstrate how this crime will always be created by the underlying economics of the completely deregulated illegal drug market. When increasing numbers of users have to pay street prices grossly inflated by prohibition, the exploding levels of crime described in the report are inevitable:

“The high profitability of the drugs business is derived from a premium for taking on risk, as well as from the willingness of drug users to pay high prices” (p.66)

“profit margins for traffickers can be even higher than those of luxury goods companies” – (cites Gucci as an example) (p.69)


The report then shows that even if supply side interventions (exactly what SOCA are now involved in) were more successful, the result would be increased prices that could force addicts to commit more crime to support their habits.

“There is no evidence to suggest that law enforcement can create such droughts” (p.102)


[but even if they could…..]

“price increases may even increase overall harm, as determined users commit more crime to fund their habit and more than offset the reduction in crime from lapsed users”(p.99)

John Birt, 'blue skies' thinker and drug policy non-expert, then took that analysis and, in phase two of the Strategy Unit report, tried to come up with some sensible policy responses. Ignoring the analysis that enforcement was counter-productive and creating many of the very problems it was intended to eliminate (presumably because to not ignore it took policy in a direction he found politically unpalatable), he instead devised a repressive programme for shovelling ever greater numbers of drug using offenders into enforced abstinence-based 'treatment' as a way of reducing drug related crime (which formed the basis of the non-sensible Drugs Act 2005).

But no one really thought this was going to be the magic bullet, not even Birt, and besides, treatment isn't much of political crowd pleaser. And so it seemed the stage was set for some more tough new initiatives – yet more process announcements that would delay the reckoning a bit longer. This time though they needed something really big and seriously tough: we obviously needed our very own FBI. And that was what we got, £400million a year's worth, complete with its own futuristic new logo, featuring a big scary cat with mean looking claws striding the globe.



SOCA logo



The Eye of Thundera - Thundercats insignia

So whether SOCA is functioning better or worse than the various agencies it replaces isn't really the point (that really is just a process consideration). If anything the worse they perform the better. But even if SOCA was running like a well oiled military machine, arresting baddies like there was no tommorow (and the 'Mr Bigs' thought the daft thundercats logo was really intimidating), it still wouldn't save them from inevitable failure because however you dress it up, supply enforcement doesn't work, it just makes things worse. Drug seizures, however dramatic, don't stop drugs reaching their markets and arresting violent drug dealing hoodlums and smashing drug crime syndicates just creates a vacancy for the next generation of gangsters, all to keen to make a killing from prohibition. SOCA is an organisation whose drugs brief is set up to fail, and that must be pretty demoralising.