The $90 billion question: transnational organised crime in our region
19 Apr 2013|

Cocaine hidden in machineryThis week I was part of a group launching the United Nations Office on Drugs and Crime (UNODC) threat assessment on Transnational Organized Crime in East Asia and the Pacific. Alongside writers of the report from the UNODC, and John Lawler of the Australian Crime Commission, I was asked to assist in providing an independent viewpoint of what’s a dynamic and complex phenomenon, and remains a threat to security and prosperity across the region.

It’s difficult to establish common agreement on the scope, size, nature and main geographic origin of the threat posed by transnational crime. Comprehensive data is hard to come by, is often opaque and requires extensive analysis in order to create a picture which policymakers and practitioners can use to make informed decisions and take action. This is where the UNODC’s report is so important, in that it’s one of the first attempts to create a common understanding of the threat in our region.

The contraband markets established by transnational crime networks are worth some US$90 billion in the East Asia Pacific region to those groups. This isn’t an insignificant sum, and is arrived at by examining 12 selected contraband markets and the financial flows they enable. The report examined four key areas: people (human trafficking and the smuggling of migrants); narcotic drugs (heroin and methamphetamine); environment (wildlife, wood-based products, e-waste and ozone-depleting substances); and goods (counterfeit goods and fraudulent medicines).

The groups that perpetrate these acts have benefited from the globalisation process, and the technologies it provides, to operate across borders, creating new linkages between groups to maximise financial profit, while minimising the risks of being caught. They’re often formed like agile businesses, have no desire to become involved in the use of physical force just for the sake of it, and are highly adept at reshaping themselves to fit the illicit economies that they’re servicing. The groups are highly mobile, flexible and operate in multiple jurisdictions and criminal sectors, exploiting legislative loopholes where they exist, and are aided by the illicit use of the internet.

When breaking down some of the data in the document, there are two areas which standout and should be highlighted for two reasons. First, they’re the areas which have the greatest financial worth to the criminals and second, they’re the areas where members of the public are most likely to come into contact and have an ‘interaction’ with transnational crime even without realising.

The first is the production and marketing of counterfeit goods—perhaps not the most headline grabbing issue, but the most significantly financially, as it’s frequently the means by which many criminal organisations fund other parts of the their operations, and it’s the crime likely to affect the greatest number of people. The report estimates that the value of counter-fit goods imported from East Asia to the US and EU in 2010 would be worth in the region of US $24.4 billion. 

The seriousness of this issue isn’t to be sniffed at, some of us may think of potentially buying a counterfeit DVD as being the most likely way we’ll come into contact with it. But when pharmaceutical drugs (worth $5 billion) are part of this production line, as well as reports in the USA of suspect counterfeit electronic parts being used in both civilian and military aircraft, the orders of magnitude of potential harm and risks to public safety change dramatically.

The other type of highly significant crime is, perhaps less surprisingly, drug trafficking. Again looking at the economic implications of the issue, the consumption of heroin amounts to some 65 tonnes in 2011, with a retail price of about US $16.3 billion. Methamphetamine and crystal methamphetamine markets in East Asia and the Pacific generated about US$15 billion in 2010 alone. This is hugely concerning, especially the growth in meth and crystal meth due to the synthetic nature of the drug, the ease of production, low unit cost and high levels of addictiveness. This is a highly dangerous recipe for further growth in this market—and for more harm and spin-off crime.

It was interesting to note that the ‘Golden Triangle’ (eastern Myanmar, northwestern Lao PDR, and nothern Thailand, along the Mekong River), which was the key opium production region of the world 30 years ago, is once again rising in its production levels, with Myanmar becoming one of the centres of production. With the political changes that are taking place in that country it will be interesting to see if this impacts positively or negatively upon the production levels.

Despite the threat assessment being highly detailed, there appeared to be some clear shortfalls in its analysis which require further attention to achieve a more granulated picture for policymakers. Firstly, in terms of the nature of and interrelation of the criminal groups, it’s vital to understand the ‘enemy’ before forming strategies to beat them. There wasn’t much discussion of what the structure and shape of the criminal groups operating in the region are, what types of crime they’re involved in and how they create partnerships to ‘carve’ up illicit markets for their own gain. These groups create networks rapidly and creatively and, in order to break them down, authorities need to have a more detailed understanding of the structure of the networks and how they are formed.

The second weakness was the lack of focus on the technology of transnational crime, most importantly how the internet has become both a key enabler and source of crime. Without a description of this enabling component the assessment is incomplete. Other recent threat assessments in other parts of the world show a clear understanding of the vital role that the cyber domain has. For example, the European Union’s recent Organised Crime Threat Assessment says that:

The continued expansion of the internet, combined with a lack of security awareness, puts citizens and their personal data increasingly at risk of exploitation by cybercriminals. OCGs [Organised Criminal Groups] can already access a large pool of potential victims via social networking, spamming and phishing websites, and shopping or auction facilities.

The Australian National Security Strategy discusses the threat from transnational crime frequently, including the need for innovative responses to keep up with the technological advancements that are being used in this area. There’s a growing sense in government that the time has come to revitalise efforts to respond to transnational organised crime. To counter the threat, government requires a clear intelligence picture to work from, organisations which are sufficiently funded to deal with the problem, and international partnerships which are as proactive as the ones they’re trying to counter.

Tobias Feakin is a senior analyst at ASPI. Image courtesy of Flickr user ukhomeoffice.