Cablegate: Burma: 2005 Incsr Part I - Drugs and Chemical

This record is a partial extract of the original cable. The full text of the original cable is not available.

230541Z Dec 05




E.O. 12958: N/A

REF: A. STATE 209560


International Narcotics Control Strategy Report 2005
(Rangoon draft)


I. Summary

Burma is the world's second largest producer of illicit
opium, accounting for more than 90 percent of Southeast Asian
heroin, and a primary source of amphetamine-type stimulants
(ATS) produced in Asia. Annual production of opium, however,
has declined over the past ten years and is now at less than
20 percent of mid-1990 peak levels. In 2005, Burma produced
an estimated 380 metric tons of opium, less than eight
percent of the opium produced in Afghanistan. Burma's opium
poppy is grown predominantly in the "Golden Triangle" border
region of Shan State, in areas near the borders of China,
Laos, and Thailand controlled by former insurgent groups
(less than one percent of Burma's poppy crop is grown outside
of Shan State).

Ethnic Wa cultivators along the Chinese border account for 40
percent of Burma's total poppy crop, down from 55 percent in
2004. The decline reflected a resurgence in poppy
cultivation in southern and eastern Shan State. Nonetheless,
major Wa traffickers continue to operate with impunity and
the government has been unable to curb other Wa drug
activities. The United Wa State Army (UWSA) announced in
June a total ban on poppy cultivation and opium production
and trafficking, but Wa compliance and involvement in
methamphetamine production and trafficking remain serious
concerns. In January, the U.S. Attorney's Office for the
Eastern District of New York unsealed federal indictments
against seven UWSA leaders for conspiracy to possess,
manufacture, or distribute heroin and methamphetamines.

During the 2005 drug certification process, the USG
determined that Burma was one of only two countries in the
world (the other was Venezuela) that had "failed
demonstrably" to meet international counternarcotics

In addition to regular cooperation with the Drug Enforcement
Administration (DEA) and Australian Federal Police (AFP) on
narcotics investigations, the Government of Burma (GOB) has
increased law enforcement cooperation with Thai and Chinese
authorities, particularly through renditions, deportations,
and extraditions of wanted drug traffickers. Burma is a
party to the 1961 UN Single Convention on Narcotics Drugs
(and became a member of the 1972 Protocol to the Single
Convention in 2003), the 1971 UN Convention on Psychotropic
Substances, and the 1988 UN Convention Against Narcotic Drugs
and Psychotropic Substances.

II. Status of Country

Burma is the world's second largest producer of illicit
opium, but produces only a small fraction of the opium that
is now produced in Afghanistan. Eradication efforts and
enforcement of poppy-free zones combined to depress
cultivation levels from 2000 to 2004, especially in Wa
territory. A resurgence in 2005, however, of cultivation in
eastern and southern Shan State, where improved weather
conditions and new cultivation practices increased opium
production, led to a slight overall increase in cultivation
and production in Burma. According to the UNODC, a
persistent and strong demand in Asia for opiates and a
falling supply in the Golden Triangle region led to a 22
percent increase in Burmese village-level opium prices, from
$153 per kilo in 2004 to $187 in 2005. Opium price
increases, however, did little to alleviate the poverty of
poppy farmers, who are among the most impoverished
populations in Burma.

According to an annual U.S. opium yield estimate, in 2005 the
total land area under poppy cultivation was 40,000 hectares,
an 11 percent increase over the previous year. Estimated
opium production in Burma totaled approximately 380 metric
tons in 2005, a 14 percent increase over 2004. A UNODC
opium yield survey, using a different methodology, concluded
that cultivation had actually declined 26 percent and
production had declined 19 percent. Nonetheless, both
surveys estimated a yield average of 9.2. kilograms/hectare,
well below the peak level of 15.6 kg/ha recorded in 1996.
Both surveys also concluded that Burma had experienced a
significant downward trend over the past decade, with poppy
cultivation and opium production declining by roughly 80

Declining poppy cultivation has been matched by a sharp
increase in the production and export of synthetic drugs.
Burma plays a leading role in the regional traffic of ATS.
Drug gangs, many of them ethnic Chinese, based in the
Burma/China and Burma/Thailand border areas annually produce
several hundred million methamphetamine tablets for markets
in Thailand, China, and India using precursors imported from
those countries.

According to GOB figures, during the first eleven months of
2005, ATS seizures totaled about 1.65 million tablets, a
significant decrease from previous years. Authorities,
however, seized over 280 kilograms of crystal methamphetamine
("ICE"). Aside from these important seizures, the government
did not destroy any ATS labs in 2005 or take any other
significant steps to stop ATS production and trafficking.
The GOB has, however, stepped up its dialogue with law
enforcement agencies and neighboring countries on the overall
ATS problem.

Opium, heroin, and ATS are produced predominantly in the
border regions of Shan State, areas controlled by former
insurgent groups. Between 1989 and 1997, the Burmese
government negotiated a series of individual cease-fire
agreements, allowing each of several ethnically distinct
peoples limited autonomy and continued narcotics production
and trafficking activities in return for peace.

Since the mid-1990s, however, the Burmese government has
elicited "opium-free" pledges from each cease-fire group and,
as these pledges have come due, has stepped up
law-enforcement activities against opium/heroin in the
respective cease-fire territories. In June, the UWSA
announced implementation of a long delayed ban on opium
production and trafficking in Wa territory. The Wa, however,
remain the country's leading poppy growers and opium
producers. According to many reports, the Wa leadership
facilitates the manufacture and trafficking of ATS pills in
Wa territory, predominantly by ethnic Chinese criminal gangs.
Although the government has not succeeded in convincing the
UWSA to stop illicit drug production or trafficking, Burmese
law enforcement entities stepped up pressure against Wa
traffickers in 2005.

Burma has a small, but growing domestic drug abuse problem.
UNODC estimated there are roughly 20,000 opium addicts in
Shan State, the country's largest poppy growing region.
Surveys conducted by UNODC, among others, suggest that the
overall drug addict population could be as high as 300,000,
plus an additional 15,000 regular ATS users.

III. Country Actions Against Drugs in 2005

Policy Initiatives: Burma's official 15-year counternarcotics
plan, launched in 1999, calls for the eradication of all
narcotics production and trafficking by 2014, one year ahead
of an ASEAN-wide plan of action that calls for the region to
be drug-free by 2015. The plan is to proceed in stages, with
eradication efforts coupled to alternative development
programs in individual townships, predominantly in Shan
State. The government initiated its second five-year phase in
2004. U Sai Lin's Special Region No. 4 around Mong La has
been declared opium-free since 1997; the Kokang Special
Region No. 1 banned poppy cultivation in 2003 after missing a
2000 deadline; and the Wa Special Region No. 2, after several
postponements, implemented a ban in June 2005. Despite
substantial gains in reducing the cultivation of poppy,
however, none of the regions are truly opium-free.

According to the 2005 U.S. opium yield estimate, poppy
cultivation within Wa territories represents 40 percent of
the total Burma crop, a decline from 55 percent in 2004 that
reflects a resurgence in cultivation in eastern and southern
Shan State.

The most significant multilateral effort in support of
Burma's counternarcotics efforts is the modest presence of
UNODC in northern Shan State. The UNODC's "Wa Project" was
initially a five-year, $12.1 million supply-reduction program
to encourage alternative development in territory controlled
by the UWSA. In order to meet basic human needs and ensure
the sustainability of a 2005 UWSA opium ban, the UNODC
extended the project until 2007, increased the total budget
to $16.8 million, and broadened the scope from 16 villages to
the entire Wa Special Region No. 2. Major donors that have
supported the Wa Project include the United States, Japan and
Germany, while the UK and Australia have recently made
additional contributions.

In 2003, the UNODC established a project in Wa and Kokang
areas ("KOWI") aimed at supporting the humanitarian needs of
farmers who have abandoned poppy cultivation and lost their
primary source of income. The project's principal objective
is to prevent any return to poppy cultivation and thus to
sustain drug control efforts in the long term. Altogether 18
partner organizations--including the WFP, the FAO, and
INGOs--are coordinating activities under the KOWI umbrella to
address basic human needs through the provision of food,
health services, and education. The goal of these
interventions, many of which commenced in 2004 and are
scheduled to continue until the UNDP assumes oversight in
2008, is to ensure the recovery and development of
communities through community-based initiatives.

Japan and Italy were early donors to the UNODC's KOWI
project. Australia, Germany, the European Commission (and
ECHO), New Zealand, Sweden, Switzerland, and the United
Kingdom provided support to the project's NGO partners. UNODC
plans to phase out its participation by 2007.

Japan has undertaken a substantial effort to help the GOB
establish buckwheat as a cash crop for former poppy farmers
in the Kokang and Mong Ko regions of northeastern Shan State.

The Government of Burma, under a 1993 Narcotics Drugs and
Psychotropic Substances Law, has in the intervening years
issued notifications controlling 124 narcotic drugs, 113
psychotropic substances, and 25 precursor chemicals. Burma
enacted a "Mutual Assistance in Criminal Matters Law" in 2004
and, in support of a 2002 Control of Money Laundering Law,
enacted in 2003 specific "Rules for Control of Money
Laundering Law."

Law Enforcement Measures. The Central Committee for Drug
Abuse Control (CCDAC)--which is comprised of personnel from
the police, customs, military intelligence, and army--leads
drug-enforcement efforts in Burma. The CCDAC, effectively
under the control of the Ministry of Home Affairs, now
coordinates 25 drug-enforcement task forces around the
country, with most located in major cities and along key
transit routes near Burma's borders with China, India, and
Thailand. As is the case with most Burmese government
entities, the CCDAC suffers badly from a lack of adequate
resources to support its law-enforcement mission.

In 2005, CCDAC established two new anti-narcotic task forces
in Rangoon and Mandalay, complementing existing task forces
in those two cities. The GOB also established an additional
Financial Investigation Team (FIT), located in Mandalay, to
serve as a clearinghouse for northern Burma. This new team,
established with DEA and Australian Federal Police (AFP)
assistance, complements an existing FIT in Rangoon.

In January, the U.S. Attorney's Office for the Eastern
District of New York unsealed federal indictments against
seven UWSA leaders for conspiracy to possess, manufacture, or
distribute heroin and methamphetamines. Among those indicted
was Wei Hseuh-kang, whom the United States had previously
indicted in 1993 and designated a Kingpin trafficker in 2000.
The GOB has to date taken no direct action against any of
the seven indicted UWSA leaders, although authorities have
taken law enforcement action against other, lower ranking,
members of the UWSA syndicate.

Narcotics Seizures. Summary statistics provided by Burmese
drug officials indicate that during the first eleven months
of 2005, Burmese police, army, and the Customs Service
together seized approximately 1,000 kilograms of raw opium,
776 kilograms of heroin, 119 kilograms of marijuana, and just
over 1.6 million methamphetamine tablets. Heroin seizures
have more than doubled over the past three years. Opium,
heroin and morphine seizures, however, account for just a
fraction of Burma's yearly potential opium production.

For the second year in a row, Burmese authorities made a
massive heroin bust that disrupted international trafficking
syndicates. In September, officials seized a major shipment
of 496 kilos of heroin in eastern Shan State and arrested 49
UWSA soldiers, including a brigade commander. The law
enforcement operation, the first of its kind against UWSA
assets, was the result of close cooperation with Chinese
counterdrug officials. Related investigations that led to
additional seizures and arrests came about as a result of GOB
cooperation with Laos and Thailand, as well as with the U.S.
Drug Enforcement Administration (DEA).

In May, a joint operation among the GOB, DEA, and the
Australian Federal Police (AFP) led to the seizure in Rangoon
of 102 kilograms of ICE (crystal methamphetamine), disrupting
a syndicate that had smuggled over 800 kilos of ICE from
Burma to markets in China, Malaysia, the Philippines, and the
United States.

Through November 2005, according to official statistics,
Burma arrested 4,398 suspects on drug related charges.

The government's anti-narcotic task force in Lashio, northern
Shan State dismantled two heroin refineries in 2005.

The government eradicated 3,907 hectares of opium poppy in
2005, a 28 percent increase from the previous year, but less
than ten percent of the entire poppy crop. Nonetheless,
overall eradication accounts for over half of the reduction
in area under poppy cultivation since 2001.

Corruption: Burma signed the 2003 UN Convention Against
Corruption on December 2, 2005, with one reservation. At
year's end, a government panel was reviewing domestic
legislation and will recommend whether existing legislation
can be amended to meet the Convention's obligations, or if
new legislation is required.

Burma has consistently performed poorly in studies on
corruption, ranking third from the bottom among all countries
listed on Transparency International's 2005 index, behind
only Bangladesh and Chad.

There is no reliable evidence that senior officials in the
Burmese Government are directly involved in the drug trade.
However, lower level officials, particularly army and police
personnel posted in border areas, are widely believed to be
involved in facilitating the drug trade; and some officials
have been prosecuted for drug abuse and/or narcotics-related
corruption. According to the Burmese government, over 200
police officials and 48 Burmese Army personnel were punished
for narcotics-related corruption or drug abuse between 1995
and 2003. Of the 200 police officers, 130 were imprisoned, 16
were dismissed from the service, 7 were forced to retire, and
47 were demoted. In 2004, the military junta ousted Prime
Minister General Khin Nyunt, accusing him and hundreds of his
military intelligence subordinates of corruption, including
illegal activities conducted in northern Shan State.
Authorities have not, however, charged any of these officials
with drug-related offenses and no Burma Army officer over the
rank of full colonel has ever been prosecuted for drug

Government authorities, acting on the results on a joint
investigation with DEA and AFP, closed the Myanmar Universal
Bank (MUB) in 2005, including 38 branch offices throughout
the country, and seized MUB assets of over $18 million.
Police arrested the bank Chairman, Tin Sein, and several of
his associates, and charged them for money laundering and
drug trafficking offenses. The GOB, also acting on results
of DEA and AFP information, revoked operating licenses for
the Asia Wealth Bank and Mayflower Bank due to irregularities
associated with money laundering.

Agreements and Treaties: Burma is a party to the 1961 UN
Single Convention on Narcotic Drugs (and became a member of
the 1972 Protocol to the Single Convention in 2003), the 1971
UN Convention on Psychotropic Substances (ratified in 1991
and took effect in 2003), and the 1988 UN Convention Against
Narcotic Drugs and Psychotropic Substances. In addition,
Burma is also one of six nations (Burma, Cambodia, China,
Laos, Thailand, Vietnam) that are parties to UNODC's
sub-regional action plan for controlling precursor chemicals
and reducing illicit narcotics production and trafficking in
the highlands of Southeast Asia.

Over the past several years, the Burmese government has
extended its regional counternarcotics cooperation, including
the signing in 2001 of Memoranda of Understanding (MOUs) with
both China and Thailand; the opening, with UNODC support, of
liaison offices on the Chinese and Thai borders over the past
four years to facilitate the sharing of intelligence; annual
joint operations with China that have destroyed several major
drug trafficking rings; and the establishment with Thailand
of three joint "narcotics suppression coordination stations."
According to the GOB, Thailand has contributed over $1.6
million to support an opium crop substitution and
infrastructure project in southeastern Shan State. While not
formally funding alternative development programs, the
Chinese government has encouraged investment in many projects
in the Wa area, particularly in commercial enterprises such
as tea plantations and pig farms and has assisted in
marketing those products in China through relaxation of
duties and taxes.

In addition to regular cooperation with DEA and AFP on
narcotics investigations, the GOB increased law enforcement
cooperation with Thai and Chinese authorities, particularly
through renditions, deportations, and extraditions of wanted
drug traffickers. Among several important cases, Burmese
authorities in January arrested trafficker Ma Shun-su, one of
China's five most-wanted drug kingpins, and rendered him to
China in connection with the seizure of 21 kilos of heroin.
Also in January, Burmese authorities took custody of Ko Naing
Lin, whom Thailand had deported in connection with a 2004
seizure in Burma of 581 kilos of heroin. In March, Burma
took custody of two individuals from China who had been
deported in connection with the same 2004 heroin seizure.

In July, Burma and Thailand signed an MOU to address
financial proceeds from transnational organized crime. In
October, Burma and India, during a joint meeting of senior
Home Ministry officials, agreed to increase cooperation
against drug trafficking.

Cultivation and Production: According to the annual U.S.
opium yield estimate, in 2005 the total land area under poppy
cultivation was 40,000 hectares, an 11 percent increase from
the previous year. Estimated opium production in Burma
totaled approximately 380 metric tons in 2005, a 14 percent
increase from 2004.

A UNODC opium yield survey concluded that cultivation in 2005
had declined 26 percent from the previous year, and by over
70 percent since 1996. UNODC also determined that
production had declined 16 percent, from 370 metric tons in
2004 to 312 metric tons in 2005.

Despite a variance in 2005 results, both the U.S. estimate
and the UNODC survey estimated a yield average of 9.2.
kilograms/hectare, well below the peak level of 15.6 kg/ha
recorded in 1996. Both surveys also concluded that Burma had
experienced a significant downward trend over the past
decade, with poppy cultivation and opium production declining
by roughly 80 percent.

Drug Flow/Transit: Most ATS and heroin in Burma is produced
in small, mobile labs located in the Burma/China and
Burma/Thailand border areas, primarily in territories
controlled by active or former insurgent groups. A growing
amount of methamphetamine is reportedly produced in labs
co-located with heroin refineries in areas controlled by the
United Wa State Army (UWSA), the ethnic Chinese Kokang, and
the Shan State Army-South (SSA-S). Ethnic Chinese criminal
gangs dominate the drug syndicates operating in these areas.

Heroin and methamphetamine produced by these groups are
trafficked overland (or via the Mekong River) primarily
through China, Thailand, India, and, to a lesser extent,
Laos, Bangladesh, and Burma itself. Heroin seizures in 2004
and 2005, and subsequent investigations, revealed the
increased use by international syndicates of the Rangoon
international airport and port for trafficking of drugs to
the global narcotics market.

Demand Reduction: The overall level of drug abuse is low in
Burma compared with neighboring countries, in part because
many Burmese are too poor to afford a drug habit.
Traditionally, some farmers use opium as a painkiller and an
anti-depressant because they lack access to adequate health
facilities. There has been a growing shift away from opium
smoking toward injecting heroin, a habit that is more
addictive and that poses greater public health risks.
Deteriorating economic conditions will likely stifle
substantial growth in overall drug consumption, but the trend
toward injecting narcotics is a significant concern.

The government maintains that there are only about 70,000
registered addicts in Burma, but surveys conducted by UNODC,
among others, suggest that the addict population could be as
high as 300,000. NGOs and community leaders report
increasing use of heroin and synthetic drugs, particularly
among disaffected youth in urban areas and workers in ethnic
minority mining communities. The UNODC estimated that in
2003 there were at least 15,000 regular ATS users in Burma
and a joint UNODC/UNAIDS/WHO study estimated that there are
between 30,000 and 130,000 injecting drug users. There is
also a growing HIV/AIDS epidemic, linked in part to
intravenous drug use. According to a UNODC regional center,
an estimated 26 to 30 percent of officially reported HIV
cases are attributed to intravenous drug use, one of the
highest rates in the world. Infection rates are highest in
Burma's ethnic regions, and specifically among mining
communities in those areas, where opium, heroin, and ATS are
readily available.

Burmese demand reduction programs are in part coercive and in
part voluntary. Addicts are required to register with the GOB
and can be prosecuted if they fail to register and accept
treatment. Altogether, more than 21,000 addicts were
prosecuted for failing to register between 1994 and 2002. The
GOB has not provided data since 2002. Demand reduction
programs and facilities are strictly limited, however. There
are six major drug treatment centers under the Ministry of
Health, 49 other smaller detox centers, and eight
rehabilitation centers which, together, have reportedly
provided treatment to about 55,000 addicts over the past

As a pilot model, in 2003 UNODC established community-based
treatment in Northern Shan State as an alternative to
official treatment centers. About 1,600 addicts have
participated in this treatment over the past three years.
Since 2004, an additional 6,900 addicts have sought medical
treatment and support from UNODC-sponsored drop-in centers
and outreach workers active throughout northeastern Shan

There are also a variety of narcotics awareness programs
conducted through the public school system. In addition, the
government has established demand reduction programs in
cooperation with NGOs. These include programs with CARE
Myanmar, World Concern, and Population Services International
(PSI), all of which focus on injecting drug use as a factor
in the spread of HIV/AIDS.

IV. U.S. Policy Initiatives and Programs

Policy and Programs: The USG suspended direct
counternarcotics assistance to Burma in 1988 after the
Burmese military junta seized power and violently suppressed
pro-democracy activists, continuing repression of the
pro-democracy movement begun under former dictator Ne Win.
The USG now engages the Burmese government in regard to
narcotics control only on a very limited level. DEA, through
the U.S. Embassy in Rangoon, shares drug-related intelligence
with the GOB and conducts joint drug-enforcement
investigations with Burmese counternarcotics authorities. In
2005, these joint investigations led to significant seizures,
arrests, and convictions of drug traffickers and producers.

The U.S. also conducted opium yield surveys in the
mountainous regions of Shan State in 1993 and 1995 and
annually from 1997 through 2004 with assistance provided by
Burmese counterparts. These surveys gave both governments an
accurate understanding of the scope, magnitude, and changing
geographic distribution of Burma's opium crop.

In 2005, the GOB regrettably did not provide sufficient
cooperation for a joint opium yield survey. The United
States, therefore, conducted a unilateral yield estimate,
primarily on the basis of comprehensive satellite imagery.
The United States also supported an annual crop survey
carried out by the UNODC that, using a different methodology
to determine yields, corroborates U.S. conclusions that poppy
cultivation and opium production in Burma have been declining
for nearly a decade.

The United States supported the UNODC's Wa project for
several years as the largest international donor,
contributing a total over $8 million. In January, following
the unsealing of indictments against seven UWSA leaders, the
United States reallocated unspent funds from the Wa project
to UNODC projects outside of Wa territory.

Bilateral counternarcotics projects are limited to a small,
U.S.-financed crop substitution project in northern Shan
State (Project Old Soldier). No U.S. counternarcotics
funding directly benefits or passes through the GOB.

The Road Ahead: The Burmese government has in recent years
made significant gains in reducing opium poppy cultivation
and opium production and cooperated with UNODC and major
regional allies (particularly China and Thailand) in this
fight. Although large-scale and long-term international
aid--including development assistance and law-enforcement
aid--is necessary to help curb drug production and
trafficking in Burma, the military regime's ongoing political
repression has limited international support of all kinds,
including support for Burma's law enforcement efforts.

Furthermore, a true opium replacement strategy must undertake
an extensive range of counternarcotics actions, including
crop eradication, effective law enforcement, alternative
development, and support for former poppy farmers to ensure
sustainability. The Government of Burma must foster
cooperation between itself and the ethnic groups involved in
drug production and trafficking, especially the Wa, and
enforce counternarcotics laws to eliminate poppy cultivation
and opium production.

The USG believes that the Government of Burma must eliminate
poppy cultivation and opium production; prosecute
drug-related corruption, especially corrupt government and
military officials who facilitate or condone drug trafficking
and money laundering; take action against high-level drug
traffickers and their organizations; enforce its
money-laundering legislation; and expand demand-reduction,
prevention, and drug-treatment programs to reduce drug use
and control the spread of HIV/AIDS. The GOB must also address
the explosion of ATS that has flooded the region by gaining
support and cooperation from the ethnic groups, especially
the Wa, who facilitate the manufacture and distribution of
ATS, primarily by ethnic Chinese drug gangs. The GOB must
also close production labs and prevent the illicit import of
precursor chemicals needed to produce synthetic drugs. The
USG also urges the GOB to stem the troubling growth of a
domestic market for the consumption of ATS.

V. Burma Statistics (1999-2005)

Statistical table e-mailed separately to INL and EAP.

VI. Chemical control

Burma does not have a significant chemical industry and does
not produce ephedrine, acetic anhydride, or any of the other
chemicals required for ATS or heroin production.

In 1998, Burma established a Precursor Chemical Control
Committee, responsible for monitoring, supervising, and
coordinating the sale, use, production, and transportation of
imported chemicals. In 2002 the Committee identified 25
chemical substances as precursor chemicals, including two
(caffeine and thionyl chloride) not prescribed by the 1988 UN
Drug Convention, and prohibited their import, sale, or use in

In 2003, Burma held its first trilateral conference with
India and China on precursor chemicals and in 2004 expanded
to include Laos and Thailand. As a result, India and China
have taken steps to divert precursor chemicals away from
Burma's border areas and India has added ephedrine to a
100-mile wide exclusion zone for acetic anhydride along its
border with Burma.

During the first 11 months of 2005, seizures of precursor
chemicals remained on par with seizures in 2004. Authorities
seized 112 kilos of ephedrine and 14,143 liters of other
precursor chemicals.

© Scoop Media

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