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Chapter 6 - Supply reduction: the adequacy of the response
Introduction
6.1
Chapter 5 outlined the national law enforcement environment and the
agencies responsible for the Australian Government's approach to policing
illicit drugs, as articulated in the National Drug Strategic Framework. Also
discussed was the recent legislative arrangements for dealing with the
importation, distribution and use of AOSD and their precursors in Australia.
6.2
This chapter will describe key Commonwealth strategies and programs that
target the supply of AOSD. The chapter concludes with suggestions for enhancing
the response of law enforcement agencies (LEAs) to the issue of AOSD.
Supply reduction
6.3
The effort to reduce the availability of AOSD depends upon law
enforcement agencies effectively targeting the importers, manufacturers and
distributors of AOSD and their precursors. International and domestic
strategies to reduce the supply of precursors both complement and are a distinct
element of the overall approach to reducing the production and thus supply of
AOSD.
6.4
The West Australian Police submission highlighted the importance of
supply-reduction strategies to an effective police response to the problem of
AOSD:
With the significant user demand for AOSD, the most effective
method of reducing the market is supply reduction. Ongoing national cooperation
and targeting, including participation by law enforcement, Government and
industry will generate the most effective mechanisms and strategies for
reducing the supply of AOSD to end users.[1]
6.5
In its submission, the Queensland Alcohol and Drug Research and
Education Centre (QADREC) proposed an outline of the priorities in law
enforcement regulation of illicit drug or AOSD markets. In QADREC's view, law
enforcement agencies should seek to regulate supply of AOSD through:
- disruption of supply chains and removal of suppliers of volume,
their financiers and infrastructure from the market through targeted policing
operations;
- containing access to precursors and laboratory equipment;
- detection of clandestine laboratories; and
- rehabilitation of incarcerated suppliers and consumers.[2]
6.6
Putting aside the issue of the rehabilitation of incarcerated suppliers
and consumers, the Committee observes that the law enforcement response to AOSD
in Australia largely follows the approach set out above.
6.7
The disruption of supply of AOSD through importers and manufacturers has
both international and domestic aspects. Trends in AOSD importation, production
and use suggest that, whereas ice, MDMA and their precursors have in the past
mainly been imported into Australia from overseas, domestic production in
clandestine laboratories is on the rise. This trend will potentially see
domestic supply strategies targeting precursors and clandestine laboratories
becoming more important into the future.
Strategic aspects of supply
reduction
6.8
The Committee notes that there are significant strategic aspects in
pursuing supply reduction under the overarching goal of harm minimisation,
which is established by the National Drug Strategy (NDS). Whilst interdiction
and interruption of supply lead to direct and obvious benefits in reducing
opportunities for harm and criminality arising from AOSD, LEAs must consider
the broader consequences of supply-reduction activities.
6.9
The AOSD industry is, by virtue of the vast profits that can be made,
dynamic in nature, and is capable of rapid and constant innovation in response
to commercial imperatives, market realities and law enforcement strategies.
Thus, successes in supply reduction, such as consistently large seizures and
interruption of criminal activities, must be judged not only by the direct
effect on supply but also by the perverse consequences that result from changes
in the market.
6.10
For example, supply reduction arising from the successful targeting of
backyard manufacturers can create an enforcement environment which favours
larger, more organised and efficient criminal enterprises.[3]
Similarly, the effects of supply reduction can have a complex effect on usage
trends. A recent position paper on methamphetamines, produced by the Australian
National Council on Drugs (ANCD), explains:
Efforts to control the supply of methamphetamine need to
consider their broader impact on patterns of drug use. Historically, there have
been remarkable shifts in patterns of drug use among injecting drug users in Australia
in the face of changing availability of drugs. For example, in the mid-1990s
methamphetamine injectors shifted to injecting heroin when it became relatively
cheap and available. Conversely, there was a strong up-take of methamphetamine
injection in the wake of the 2001 heroin shortage.[4]
6.11
The Committee therefore notes that the success or otherwise of supply
reduction may only be sensibly judged in the broader context, and against the
discrete aims, of the government's illicit drug policy.
Importation
6.12
Chapter 5 outlined the 2005 amendments to the Criminal Code introduced
by the Law and Justice Legislation Amendment (Serious Drug Offences and
Other Measures) Act 2005, (the SDO Act). The new provisions were directed
at broadening the range of AOSD-related offences and increasing and
standardising related penalties. The discussion noted that these provisions have
significantly improved the ability of LEAs to effectively charge offenders and
prosecute offences at the border or international level.
6.13
As discussed in chapter 5, the AFP is currently working with a range of international
partners to tackle international drug trafficking, particularly within our
region. The AFP submitted:
The effects of globalisation have meant that criminal groups
have greater access to markets for illicit drugs and increasingly drugs are
being shipped from producer countries to markets in other parts of the world.
This has enabled criminals to more extensively exploit commodity sources, transhipment
routes and networks. There is evidence that drug trafficking syndicates have
commenced using Pacific Islands for storage, production and transhipment
locations.[5]
6.14
The submission continued:
The AFP believes that there is significant benefit in taking the
fight against illicit drug and precursor trafficking offshore and will continue
to combat the importation of illicit drugs and precursors at their source.
Through effective collaboration with international partners, the APP disrupts
transnational syndicates offshore to ensure illicit drugs are seized at the
earliest opportunity and with the greatest law enforcement impact.[6]
6.15
The Australian Illicit Drug Intelligence Program (AIDIP) and the Law
Enforcement Cooperation Program (LECP) are critical to efforts directed at
international trafficking.
Domestic manufacture
6.16
One aspect of supply reduction in the domestic market targets reducing
the supply and diversion of precursors that are used in the local production of
AOSD. In recent years, a number of programs have been implemented that address this
by disrupting precursor chemical supplies and the establishment of clandestine
laboratories. The following strategies came to light during the course of the
inquiry.
The National Strategy to Prevent
the Diversion of Precursor Chemicals into Illicit Drug Manufacture
6.17
Under the Tough on Drugs initiative, the Australian Government has
allocated $5.4 million over five years for the National Drug Strategy to prevent
the diversion of precursor chemicals into illicit drug manufacture. This strategy
provides national leadership and coordination to better inform and target
efforts to prevent the diversion of precursor chemicals into illicit drug
manufacture. The national precursor strategy pursues a partnership-based approach
to policy development and implementation and engages all relevant stakeholders
from across the community. It allows and encourages pharmacists, industry, the
Australian Customs Service, police, intelligence officers and policy analysts
to improve their capacity to share information and intelligence on the
diversion of precursor chemicals.
6.18
The implementation of the national strategy is informed by the expertise
made available through the National Working Group on the Prevention of the
Diversion of Precursor Chemicals into Illicit Drug Manufacture, which was
established as an initiative of the Minister for Justice and Customs in
September 2002. The working group held its inaugural meeting on 4 December 2002, bringing together 44 members from relevant industry bodies and regulatory
agencies; law enforcement and health agencies at Commonwealth, state and
territory government level; and the Australian National Council on Drugs.[7]
6.19
The National Strategy to Prevent the Diversion of Precursor Chemicals
into Illicit Drug Manufacture is delivering a policy response to AOSD
manufacture under four broad outcomes:
- enhanced intelligence and information-sharing capacity among law
enforcement and regulatory agencies;
- enhanced law enforcement, forensic and judicial responses through
training;
- national regulatory approaches to control access to chemicals and
equipment while recognising the legitimate needs of business and the public;
and
- key stakeholders being aware of the problem of precursor
diversion.[8]
6.20
The national precursor strategy has resulted in a number of positive
outcomes, including new regulatory restrictions on the sale of
pseudoephedrine-based medications; the development and delivery of a number of
precursor-related training initiatives to Customs officers and forensic
chemists; awareness raising in the pharmaceutical and chemical industries,
which has led to initiatives such as Project STOP, discussed below; the
establishment of the annual National Chemical Diversion Congress; and the
development of new projects such as the National Clandestine Laboratory
Database, discussed below.[9]
Restricting the supply of pseudoephedrine
6.21
Pseudoephedrine is a key ingredient or precursor in the manufacture of
methamphetamine. To date, the most common source of pseudoephedrine has been
over-the-counter cold and flu preparations. As a result, pharmacies and
pharmacy wholesalers have in some instances been the victims of ram raids or
thefts targeting pseudoephedrine products. However, the most common method of
obtaining pseudoephedrine has been through the use of 'pseudo-runners'—buyers
who systematically attend pharmacies to effect purchases of pseudoephedrine
products, which are then diverted to illicit methamphetamine production. The
submission of the Pharmacy Guild of Australia (PGA) describes the practice in
the following way:
“Pseudo-runners” are individuals or groups who travel from
pharmacy to pharmacy sourcing a number of pseudoephedrine-containing products.
They are known to operate along pre-planned routes, visiting each pharmacy with
different buyers. This practice has become more refined with time and the 'runners'
have become more astute in obtaining the supplies from the pharmacy without
arousing suspicion. It has also been reported that organisers involved in PSE [pseudoephedrine]
diversion approach people on the street and pay them a fee to purchase PSE
products from pharmacies. As a result, the pharmacy customers for PSE for
illicit diversion are diverse and not from any particular background, age, race
or socio-economic group. As such, it is very difficult for pharmacy staff to
distinguish illicit customers from legitimate customers. So-called 'pseudo-runners'
would go from pharmacy to pharmacy purchasing quantities of these products
which would then be used in the manufacturing process.[10]
6.22
The PGA informed the Committee that since the late 1990s pharmacists
have been actively promoting a number of voluntary or industry approaches to
prevent the practice of pseudo-running. These include:
- reminders to pharmacists from their respective state and
territory pharmacy boards of their professional responsibilities in selling
drugs such as pseudoephedrine;
- providing professional advice on storage and supply of pseudoephedrine
products;
- monitoring of purchases of pseudoephedrine tablets, with
consequential disciplinary action against pharmacists supplying multiple packs
of pseudoephedrine tablets in excess of therapeutic standards;
- reformulation of pseudoephedrine to increase the difficulty of
the process of extracting it;
- discontinuation of larger-sized packs of pseudoephedrine tablets;
and
- creation of a pharmaceutical industry code of conduct to
establish a common system of practice for marketing pseudoephedrine products.[11]
6.23
The Committee received evidence that further encouraging steps have
recently been taken to prevent pseudo-running. Following a series of meetings
of the National Drugs and Poisons Schedule Committee in 2005, pseudoephedrine
was rescheduled under the NSW Poisons and Therapeutic Goods Act 1966 to
become a schedule 3 substance.[12]
The PGA submission states that this was to 'further reduce access of the
criminal element to this class of drugs.'[13]
The effect of the rescheduling has been to ensure that every sale of a
pseudoephedrine product is monitored by a pharmacist.[14]
Project STOP
6.24
The PGA's submission outlines a scheme to limit the diversion of
supplies of pseudoephedrine through pseudo-running. The scheme, Project STOP,
has recently been instituted and tested in Queensland, and was developed
jointly by the Queensland branch of the PGA, the Queensland Police and
Queensland Health.
6.25
The scheme involves recording pseudoephedrine purchaser information on a
pharmacy database called Epothecary, which tracks purchases of pseudoephedrine
products. The system allows pharmacists to identify persons who may be pseudo-running,
using the products illegally or operating a clandestine laboratory, and to
refuse sale where a transaction arouses suspicions. Mr Timothy Logan, President
of the Queensland branch and National Vice-President of the PGA, told the
Committee:
The Queensland legislation, in particular among the states,
authorises and requires pharmacists not only to request, or even require,
photographic identification for someone coming in and requesting a
pseudoephedrine containing medication but also to record the nature of the
identification if you do not know the person...[If they] ask for a medication
containing pseudoephedrine, we request a driver's licence, typically; it can be
an 18-plus card or it can be a passport. We enter the serial number of that
particular identity document into the software; it is a web based tool and goes
via the internet to a central database. If you have purchased that product in
the last three days, it will show up on the computer.[15]
6.26
The submission from the PGA indicates that, since the pilot program for
Project STOP commenced in November 2005, over 40,000 entries have been put
through the system and there have been over 2,500 refusals of sale by
pharmacists.[16]
Further, the submission states that, between January and March 2006, Project
STOP resulted in:
- the generation of more than 100 police investigative files;
- 12 offenders being arrested on 114 drug related charges together
with six counts of trafficking;
- three illicit laboratories being detected; and
- a number of suspected pseudo-runners being summonsed to attend Australian
Crime Commission (ACC) coercive hearings.[17]
6.27
At the Anex 2006 Australasian Amphetamines Conference, held on 28 and 29 September 2006, Mr Shaun Singleton, from the PGA, updated the above figures, telling
the conference that overall the project has resulted in the detection and
closure of seven clandestine amphetamine laboratories and 195 charges being
laid.[18]
6.28
The Committee heard that the scheme holds attraction as a model for a
national scheme. Evidence was presented of support and enthusiasm from
pharmacists in other states, notably NSW, for the adoption of Project STOP. Mr Peter
McBeath, Vice-President of the New South Wales branch of the PGA, explained:
The Pharmacy Guild in New South Wales would be very keen to
introduce Project STOP...one of our real concerns is that there is lack of
consistency of legislation across the states, which is causing us all concerns
and always has been a concern.[19]
6.29
The Committee was informed that the major impediment to expanding Project
STOP as a national scheme is the issue of maintenance of privacy. Mr McBeath
explained:
In New South Wales currently we are having difficulty convincing
the regulators that Project STOP is not in breach of privacy legislation.[20]
6.30
The issue of maintenance of privacy was also referred to in the PGA
submission, which says:
Current Queensland and NSW legislations require pharmacists to
collect personal details prior to the sale of PSE [pseudoephedrine] products
however, in other jurisdictions there is uncertainty. The Guild believes that
each State or Territory jurisdiction should have nationally consistent
provisions in their legislations to enable pharmacists to perform their duties
without contravening any privacy guidelines with regard to the supply of
pseudoephedrine containing products.[21]
6.31
The PGA submission notes that the issue of privacy was perhaps connected
to, or complicated by, issues of consumer convenience and expectations:
Pharmacies have reported receiving some objections from
consumers who have expressed frustration of being asked questions and are
reluctant or are refusing to give their details/identification when buying
common 'cold and flu' products. The Guild has received similar calls from
consumers as well as pharmacist members advising of the consumer reaction
regarding the new regulations surrounding pseudoephedrine. Reports within the
media have also been critical about the red tape and additional personal
information required of customers in order to purchase 'cold and flu'
medication.[22]
6.32
Beyond what might be matters of mere convenience, Mr Logan suggested
that the privacy concerns raised are misplaced, and described the way in which
the Queensland trial of Project STOP had recognised and sought to allay privacy
concerns:
The Pharmacy Guild developed a software support tool that linked
in to a database that was accessible by the health
department and the police department, so all the requirements were being met in
that they had quite stringent requirements with regard to access and security
of the data.[23]
6.33
As a further protection against unwanted intrusions into or breaches of
privacy, Mr Logan pointed out that pharmacies using the database could view
only information they had themselves put into the Project STOP database. The
submission of the PGA indicated that approaches are under way to address this
issue:
It is the understanding of the Guild that that the Attorney
General's Department is approaching the National Privacy Commissioner with a
view to being granted a public interest determination to allow pharmacists
nationally to request relevant patient identification prior to the sale of
pseudoephedrine products.[24]
6.34
The Committee acknowledges the trial's success and commends the recent
announcement by the Minister for Justice and Customs, the Hon. Chris Ellison,
that the federal government, in collaboration with state and territory
governments and pharmacists, will implement Project STOP at the beginning of
2007.[25]
Recommendation 12
6.35
The Committee recommends that the Commonwealth government, in
collaboration with state and territory governments and pharmacists, continue to
implement Project STOP nationally.
The National Clandestine Laboratory
Database
6.36
As discussed in chapter 2, trends in AOSD importation, production and
use suggest that, whereas ice, MDMA and their precursors have in the past
mainly been imported into Australia, domestic production in clandestine
laboratories is on the rise. This trend will potentially see domestic supply
strategies aimed at precursors and clandestine laboratories becoming more
important into the future.
6.37
The Committee was informed that Australia presently does not have the
capability to undertake national trend analysis of illicit drugs produced
domestically, including issues relating to production methods, precursors,
equipment, and persons of interest, as well as important information relating
to clandestine laboratories.[26]
The New South Wales Crime Commission highlighted the difficulties that this
causes:
A key problem for law enforcement agencies lies in the adaptability
of the manufactures—there are many ways to produce amphetamines, using many
different chemicals and reactions. By controlling one chemical, as has been
done with pseudo-ephedrine, we simply force the manufacturers to use a
different methodology. For example, in NSW there have been recent laboratories
found using methcathinone, which is not controlled and can easily be converted
to ephedrine and then to amphetamine. This flexibility makes it very hard to prevent
manufacture through stricter controls on chemicals, because most of the
chemicals do have legitimate uses in industry. Generic offences may need to be
created.[27]
6.38
The ACC informed the Committee that it is currently involved in the
development of a National Clandestine Laboratory Database (NCLD). This national
database will track new trends in AOSD manufacture and related chemical use and
provide detailed information assisting in the location of clandestine
laboratories throughout Australia.[28]
6.39
The New South Wales Crime Commission submission drew attention to the
desirability and value of such a database. It said:
This will be an invaluable resource for law enforcement
agencies. Enhanced communication between the
various agencies involved in this area would allow a more efficient and
effective law enforcement response.[29]
6.40
As discussed in chapter 2, the fluidity of AOSD manufacture and use in Australia
makes the establishment of the NCLD an important goal in tackling AOSD. The
Committee commends the initiative of the ACC and other bodies in pursuing the
NCLD, and recognises the great advantages that its establishment will bring to
the efforts of law enforcement agencies in combating AOSD production and supply
in Australia. The Committee acknowledges the need to establish the NCLD to
capture and disseminate information on activities conducted in clandestine
laboratories, and concurs with the assessment of the Minister for Justice and
Customs, the Hon. Chris Ellison, as expressed in a recent media release:
...[the NCLD] will assist police to better target their drug
investigations by storing and sharing national data on seized laboratories and
precursor chemicals used in illicit drug production. It will help to identify
trends in illicit drug manufacture and 'cooks' and persons of interest moving
across state borders by signature chemicals, equipment, recipes and
manufacturing methods.[30]
Monitoring tablet presses
6.41
Although the Committee did not receive a great deal of evidence concerning
equipment used in the manufacture of AOSD, a small number of submitters made
reference to the lack of oversight and regulation of tablet presses in Australia.
The Queensland Alcohol and Drug Research and Education Centre observed:
There may be a case for better regulation of tabletting machines,
or pill presses, used in the pharmaceutical and patent medicine industries.
This may reduce the use of such equipment in the local manufacture of drugs
sold as ecstasy.[31]
6.42
Similarly, the ACC argued:
...the Australasian Police Ministers Council (APMC) has recently
agreed that diversion of tablet presses is a problem of national significance
and that current domestic and border controls to prevent the diversion of
tablet presses into illicit drug manufacture should be enhanced.[32]
6.43
The Committee was informed that the Commonwealth will fund further
research to determine the nature and scope of the legitimate tablet-press
market, regulatory options to control tablet presses and the impact of controls
on business and government under the auspices of the National Strategy to
Prevent the Diversion of Precursor Chemicals into Illicit Drug Manufacture. It
is anticipated the National Precursor Working Group, chaired by Senator the Hon.
Chris Ellison, will provide recommendations on a proposed course of action to
the Australasian Police Ministers Council.[33]
6.44
The Committee commends the range of national and international
strategies to reduce the supply of AOSD within Australia.
The adequacy of the response
6.45
Since recognising the emerging AOSD problem, the law enforcement response
to the importation, manufacture and use of AOSD in Australia by the ACC and
LEAs may be described as a coordinated approach, involving legislative measures
and cooperative administrative, investigative and enforcement arrangements.[34]
6.46
A key aim of the ACC's approach has been to seek to establish
collaborative arrangements with key stakeholders, and evidence was presented to
the Committee to suggest that cooperative arrangements between LEAs, under the
ACC Special Intelligence Operation determination on AOSD and through
information-sharing and joint operations, are flexible and currently sufficient
to allow the effective pursuit of supply-reduction activities and operations.[35]
6.47
The West Australian Police gave an assessment of the ACC, and of current
arrangements, that was typical of LEAs:
...WA Police have derived significant benefits from participation
in National AOSD initiatives and cooperative law enforcement strategies. ACC
coercive hearings and initiatives emanating from the National working group to prevent
the diversion of precursor chemicals into illicit drug manufacture have been of
particular benefit.[36]
6.48
In discussing the suitability of the arrangements allowing
cross-jurisdictional cooperation between LEAs, Federal Agent Michael Phelan,
National Manager, Border Intelligence Network, Australian Federal Police, told
the Committee:
...in my experience there is very little demarcation. There is a
clear area of responsibility but, where those cross from one jurisdiction to
another, it is very much seamless because of the joint task force and the
arrangements that we all work on...Very much we work together.[37]
6.49
Deputy Commissioner Simon Overland, of the Victoria Police, indicated
that the Victoria Police had worked closely with the ACC.
...we have worked very closely with the Australian Crime
Commission, particularly around Purana [the task force investigating organised
crime in Victoria]. They have provided an invaluable tool to assist us in that
investigation and in fact there is a significant number of people now facing
charges out of appearances in front of the Crime Commission around the giving
of false evidence. [38]
6.50
Deputy Commissioner Overland drew
particular attention to the value of the ACC's information and
information-sharing practices:
They are also very good at sharing intelligence with us and we
think the quality of the intelligence coming out of that body has improved
quite significantly and that is obviously very useful to us. We continue to
work quite closely with them as opportunities present themselves.[39]
6.51
Federal Agent Phelan observed that the development of the intelligence
networks had been and would continue to be important to maintaining the success
of the information and intelligence-gathering processes of the ACC and LEAs. He
said:
The job of intelligence networks is to try to keep ahead of the
game in...developing our intelligence networks, working with our partners to try
to stem the flow [of criminal enterprise]...I think we have been relatively
successful at that over recent years.[40]
6.52
However, outside of collaboration arrangements for the ACC and LEAs,
some concern was expressed by submitters and witnesses about the divisions
between the Commonwealth and state agencies around drugs policy generally.
6.53
Pointing to the ability of drug markets to change rapidly and thereby
challenge the appropriate targeting and delivery of the enforcement response,
Deputy Commissioner Overland suggested that the relationship between LEAs and
health, research and community support organisations is complex, unclear and likely
to be generating inefficient and confusing drug policies:
It is the arrangements that are in place between the
Commonwealth-state around drugs policy generally. There are key players: there
are health players, there are law enforcement players, there is a range of
committees...If you actually map it out, you get to understand that it is very,
very complex and confused and it suggests that it is probably not the most
efficient or most effective way to go about dealing with it.[41]
Enhancing the response to AOSD
6.54
In recognition of the importance of the underlying policy settings, the Committee
sees the following issues as having a bearing on the formulation of considered
and effective AOSD policy in Australia.
Measuring success
6.55
In the area of drug law enforcement, the measure of success is usually
interdiction, which is measured by the amounts and types of drugs seized; the
number of arrests and charges; the number of successful prosecutions; and,
possibly, the amount of property and assets confiscated. However, it has long
been acknowledged that such measures of performance are simplistic and of
limited value as they are unable to provide a wider picture of the value of
current supply-reduction efforts:
In keeping with their overseas counterparts, Australian drug law
enforcement agencies have used seizure and arrest data to measure the
effectiveness of their work performance for many years. While such measures are
simple, visible and well-understood measures of law enforcement effort, they
are in many cases ambiguous measures of law enforcement performance. These
measures essentially demonstrate the extent to which law enforcement agencies 'engage'
in certain types of activities rather than demonstrating the broader 'impacts'
of law enforcement work.[42]
6.56
The Committee notes that the ACC is not a law enforcement organisation
but an information-gathering and intelligence-gathering one in which the
information and intelligence gathered may or may not lead to convictions or to
a reduction in the availability of certain drugs. The Committee is aware of the
difficulties of measuring outcomes in the light of these circumstances.
6.57
The AFP indicated in its submission that in recent years it has 'further
developed existing and identified new methods of measuring law enforcement outcomes
in relation to illicit drug investigations'.[43]
The AFP submission notes:
The AFP undertakes benchmarking of its drug law enforcement
activities both nationally and internally. In general, this analysis is
completed every second year. The most recently available international data was
used (2003) for international comparisons and the most comparable national data
(2003/04) for national comparisons.[44]
6.58
Concerns were raised over using quantity-of-seizure figures as a measure
of efficiency. The Committee was informed that the AFP assesses the benefits of
seizures through the Drug Harm Index (DHI):
The Drug Harm Index, which measures the economic benefit to the
Australian community of AFP drug seizures, increased from $427m in 2003-04 to
$680m 2004-05. It represents the dollar value of harm if the drugs had reached
the community. It does not estimate the deterrent effect of AFP investigations.[45]
6.59
The AFP submission reports that 'the AFP returns over $5 for every one
dollar invested in economic and illicit drug investigations'.[46]
In evidence, Federal Agent Phelan explained that the DHI measures only the potential
harm or cost to the community, had the seized drugs become available on the street.
Federal Agent Phelan expanded on the limitations of the index:
One of the weaknesses of the Drug Harm Index is that it does not
pick up the deterrent effect of the AFP on operations. That is a theoretical
figure that would be difficult for us to do in any sort of quantitative
analysis...[for example] we might be able to say that if we closed down a
syndicate that had been producing 100 kilos per month of a particular drug or
importation, we could say that we reduced the potential for 100 kilos a month
right into the future. We do not do that because that is something that is theoretical
and we are unable to quantify. What we do work on is the actual amount of
seizure and the ability to stop that hitting the streets of Australia.[47]
6.60
The Committee notes that the AFP acknowledges the limits of the analyses
based upon the DHI for predicting the deterrent effect of seizures.[48]
In light of the rising trends in the importation, manufacture and use of AOSD,
particularly the more potent forms of base and ice, the Committee is concerned
that there is an apparent inability to assess seizures against supply-reduction
and public health outcomes and to provide an understanding of the true effect
of what are in many cases successful policing efforts.
6.61
The National Drug Law Enforcement Research Fund (NDLERF), articulated
this concern in Developing and implementing a performance measurement
framework for drug law enforcement in Australia:
...there is now general agreement in Australia and elsewhere that
the traditional supply-side indicators of DLE [drug law enforcement] activity
should at the very least be complemented by demand-side indicators (public
health and amenity indicators).[49]
6.62
The Committee acknowledges that it is not an easy task to measure the wider
community value of interdiction. Evidence of submitters highlighted a
difference of emphasis as to the measure of success for interdiction. Families
and Friends for Drug Law Reform and the Australia Institute strongly questioned
the worth or meaning of seizures as an indication of policing effectiveness.[50]
Mr Andrew Macintosh, Deputy Director of the Australia Institute, argued there
is a need for a better measure of effectiveness than interdiction of supply:
But the problem is that if you catch more
drugs they just supply more. By taking drugs out of the market we lose, say,
three per cent of the drug market for the year. They increase supply. That
three per cent does not have a notable impact on the market...the only time in
history that anyone has ever found a statistically significant effect or
relationship between the seizure of drugs and actual ground level supply and
prices was the heroin drought in 2001.[51]
6.63
The Committee notes the NDLERF research in the area of performance
measurement for drug law enforcement and suggests that law enforcement agencies
should consider developing better methods of measuring effectiveness to ensure
that they are meaningfully related to the three NDS policy aims of supply
reduction, demand reduction and harm reduction.[52]
Recommendation 13
6.64
The Committee recommends that the Australian Crime Commission collaborate
with the Australian Federal Police, the Australian Customs Service and the relevant state and territory law
enforcement agencies to improve performance measurements for drug law
enforcement under the National Drug Strategy.
6.65
The Committee acknowledges that prosecutions are also used as an
indicator of success. On this issue, the Committee was concerned at statistics
showing some 80 per cent of those charged with drug related offences by the AFP
are charged with user-related crimes, despite claims that most of the AFP's work
has been targeted at the high end of the supply chain.[53]
In response, Federal Agent Phelan said:
If we were to excise the ACT
policing component from the AFP stats, and you were talking about AFP
national/international operations, then the arrests and charging of users is
extremely limited. The vast majority, certainly in my time doing this job in
the last 2½ years—well over 95 per cent, if not even more—would be those that
were involved in either the importation or the direct manufacture and not the
users...I can categorically say that our resources are being pitched at the
higher end, and I would be extremely surprised if we were putting any resources
at all towards low-level trafficking.[54]
6.66
The Committee believes that the reporting of AFP statistics should show
separately the AFP's ACT and federal policing outcomes in order to give clear
and separate pictures of illicit drug supply-reduction outcomes for each
jurisdiction.
Recommendation 14
6.67
The Committee recommends that the reporting of Australian Federal Police
statistics show separately the drug law enforcement policing outcomes for the
ACT and federal jurisdictions.
Allocation of resources
6.68
Concerns were raised over whether the AFP's emphasis on counter-terrorism
had compromised its activities in the area of drug law enforcement. Federal
Agent Phelan explained:
...there is a high priority placed on counter-terrorism
activities both here and offshore but, having said that, the AFP also delivers
its resources towards drug interdiction, and there we have to focus on what we
believe are the most important areas of responsibility that get the best result
for us here in Australia. There has been a shift in priorities, but it does not
necessarily mean that there is a total move away from other areas of
interdiction. In recent times we have had some great successes in drug and in
particular precursor seizures both here and, most importantly, offshore before
they even get anywhere near our shores.[55]
6.69
The Committee considers that the AFP's response is somewhat equivocal.
Whilst acknowledging the paramount importance of counter-terrorism measures to
national security, the Committee suggests that the escalating availability and
use of AOSD require a discrete, sufficient and appropriate allocation of
resources.
6.70
Although the Committee does not criticise the AFP's allocation of
priorities, the Committee is concerned that the AFP does not compromise its
efforts to reduce either the supply of drugs or the threat of terrorism by
being forced into invidious choices in the allocation of funding and resources.
The Committee considers that the seriousness of AOSD trafficking and
manufacture requires that drug interdiction remains a high priority area for the
AFP.
Collection of data on illicit drugs
6.71
The development of effective drug policy begins with a soundly-based
assessment of the problem, which cannot occur without accurate data. The
Committee heard from a number of organisations that produce research and data
in this field.[56]
6.72
The Queensland Alcohol and Drug Research and Education Centre (QADREC) noted
that modelling the size and value of illegal drug markets provides both a
strategic intelligence function and benchmarks against which to assess the
effectiveness of market regulation. However, this type of modelling requires
the systematic collection of quality data on both consumption and seizures.[57]
6.73
Data on the consumption of illicit drugs is available from the following
sources:
- National Drug Strategy Household Survey;
- Illicit Drug Reporting System and Party Drugs Initiative;
- Drug Use Monitoring in Australia;
- Australian School Students on Alcohol and Drug survey;
- National Mental Health Survey; and
- National Drug Law Enforcement Research Fund studies of the extent
and nature of organised crime involvement in MDMA and methamphetamine markets.
6.74
Data on the supply of illicit drugs is gathered by various law
enforcement agencies. The primary data sources are:
- Australian Customs Service drug and precursor seizures;
- AFP seizures made independently, with Customs and with other police
services;
- state police clandestine laboratory detections and drug and
precursor seizures; and
- arrest data pertaining to offences of possession, use, supply and
manufacture.[58]
6.75
The Committee heard that there are a number of limitations in the current
methods of collection. QADREC identified the following weaknesses in the
arrangements for the collection and availability of data on illicit drugs:
- inadequate data collection on drug seizures and clandestine laboratory
detections by some state and federal agencies;
- unknown degree of overlap in federal seizure data;
- poor and inconsistent record-keeping at a state level;
- lengthy delays in drug seizure and clandestine laboratory
analysis as well as limited information on clandestine laboratory capacity in
this data;
- failure to separate data on MDMA from data on methamphetamines;
- limited use of open source intelligence on the demand side of the
market and on consumer behaviour in retail transactions;
- delays in building research partnerships for strategic
intelligence; and
- inadequate information sharing among agencies and with the
research community.[59]
6.76
In particular, the accuracy of data was questioned. Mr Greg Fowler, from
QADREC, explained that there is a danger of double counting. Mr Fowler said:
Sometimes for a joint operation between AFP and the state police
force the seizure amount may be reported in the state government system and the
AFP system, and those amounts then get rolled up again into reports that go to
ACC. So that same amount collected by two organisations can be counted twice.[60]
6.77
Dr Andreas Schloenhardt, from the University of Queensland, observed that
while there is significant research done on the demand and consumption of
illicit drugs:
...there is a lack of in-depth research. I do not know if the
agencies should do that themselves, but even independent research on this
particular nexus between organised crime and drugs is completely lacking. The
most substantive recent report is that produced by this committee when it was
the NCA committee in 1995.[61]
6.78
QADREC also commented upon what it perceives as the decline in the
quality of the ACC's principal public domain intelligence product, the Illicit
Drug Data Report (IDDR), due, at least in part, to major internal restructuring
and the loss of experienced intelligence officers. Mr Fowler told the
Committee:
The publications of the ACC and one of its previous
organisations have been some of the best public domain intelligence about the
supply side of drug markets. In the past those publications have systematically
provided the best available summary of seizure data in particular, sometimes
some case scenarios and quite often international supply chain intelligence
which would not be relatively accessible to other people who have ongoing work
in the illicit drug field. However, the document itself has undergone a couple
of title and format changes, and for the last two levels of publication the
data contained within the report has been less detailed and perhaps more what
I, as a social scientist, would call anecdotal, in the sense that you are using
case studies to describe successful operations.[62]
6.79
Mr Fowler went on to acknowledge the difficulties faced by the ACC in
gathering reliable information. He said:
The ACC is in a difficult position. It relies upon state police
forces to supply a lot of this information. It relies upon the Australian
Federal Police and the Australian Customs Service. It can only produce as good
an intelligence document as the data which is provided to it. Some of those
agencies do an excellent job. Australian Customs would be a good example.
Perhaps the data some other agencies provide is of a poorer quality, less
consistent or not described in the same way.[63]
6.80
In response to QADREC's comments, the ACC accepted that the current
version of the IDDR may give rise to expressions of concern about its reporting
methodology, but rejected the criticism. In a supplementary submission the ACC
said:
The ACC inherited the report from the ABCI. The Australian
Illicit Drug Report (AIDR) was a substantially larger volume than the IDDR,
containing more generalised information about illicit drug markets as well as
illicit drug data...the ACC...strongly rejects the ill-informed assertions that
this is a consequence of restructuring or a loss of skilled intelligence
officers...The change in nomenclature to IDDR reflects the ACC's view that while
there remains a niche for a report aggregating law enforcement data on illicit
drug seizures, its primary responsibility is to provide a flow of strategic and
tactical intelligence to partner agencies in a way not previously undertaken by
any of the ACC's predecessor agencies.[64]
6.81
The ACC went on to argue that the IDDR exists because there is a 'commitment
to information sharing on this issue'.[65]
The ACC commits considerable resources and a high degree of collaboration to
the report, and the collated and synthesised data is shared with research
bodies without charge. The commission concluded:
The ACC does accept that there is scope for more collaborative
work with research bodies and has work in hand to improve partnerships in this
area.[66]
6.82
The ACC's acceptance of the need for a collaborative approach is pivotal
to the resolution of the problems of data relevance and data quality. QADREC
made some suggestions as to how this might be improved across the board.
6.83
QADREC emphasised the importance of developing a research agenda that
gathers and analyses all relevant intelligence from seizure, detection and
arrest data sources. The Committee heard that there was a need for greater
consistency across jurisdictions, and for the compilation of a standard data
dictionary. The QADREC submission argued:
These data sources require the development of a data dictionary
for consistent description of drugs and drug related events. Such data should
be updated in a timely fashion, to allow analysis of dynamic market trends.
This is not currently the case where, for example some State jurisdictions do
not distinguish ecstasy seizures and arrests, from those involving
methamphetamines. Also some joint state police and AFP seizures may be counted
twice in national seizure estimates.[67]
6.84
QADREC also recommended expanding the sample size and response rate of
key surveys, particularly the National Drug Strategy Household Survey, which
would improve the validity of drug consumption estimates. Significantly, it was
suggested that the over-sampling of young urban males, with more innovative
data collection methods, would contribute to improvements in data quality.[68]
6.85
The discrepancies in quality and quantity of information sharing are
matters that were canvassed in the Parliamentary Joint Committee on the
Australian Crime Commission report on the review of the Australian Crime
Commission Act 2002. In that report, the Committee recommended:
...that the ACC in consultation with the Attorney General's
Department identify barriers to information sharing, and where regulatory or
legislative remedies are necessary [that] these be developed and implemented.[69]
6.86
The Committee acknowledges that the ACC itself recognises the
limitations of the data on which it relies to produce the IDDR. These limitations
range from the comparability of law enforcement data across states and
territories to the recording, storage and quality of data across law
enforcement agencies.[70]
6.87
The Committee notes that some of these shortcomings are the inevitable
result of a system that focuses on regions—that is, the states—in order to
respond to local needs, but which depends on the federal government for integrated
intelligence and, to an extent, funding. The Committee considers that an
overarching body to coordinate data collection at the federal level would go
some way to addressing the issues canvassed above. The functions of this body would
include setting standards for the material to be collected and the methodology
for doing so, and would enhance the interoperability of state and territory law
enforcement databases. Unless governments, LEAs and research institutions have
reliable and accurate data on which to base drug policy and strategies,
attempts to address the problem of AOSD will be less effective.
6.88
The Committee acknowledges that there are several initiatives that would
assist this process. First, there is a clear need for a standard data dictionary.
This would ensure that data contributors would be doing so according to the
same set of definitions. Second, in a federal system the risk of double counting
is always present. The Committee believes that the ACC should carefully review
its current sources of information so that the potential for double counting is
minimised. Such a review should be published so that stakeholders have a clear
understanding of the basis and accuracy of supply data.
6.89
Evidence to the inquiry suggests that the IDDR in its current form
appears to have limited value. Although it presents facts, there is limited analysis
of what those facts actually mean for Australia. The Committee acknowledges the
ACC's work on the IDDR; however, there are opportunities to enhance the quality
of this important intelligence product.
Recommendation 15
6.90
The Committee recommends that the Australian Crime Commission and other
Commonwealth law enforcement agencies, in conjunction with the relevant state
and territory agencies, develop a standard data dictionary to ensure that
information shared is as accurate as possible.
Recommendation 16
6.91
The Committee recommends that the Australian Crime Commission review its
current sources of information so that the potential for double counting
between state, territory and Commonwealth agencies is minimised. Such a review
should be published so stakeholders have a clear understanding of the basis and
accuracy of supply data.
Recommendation 17
6.92
The Committee recommends that the Australian Crime Commission work with
the state and territory law enforcement agencies to increase their participation
in data provision to the Australian Crime Commission's databases.
Recommendation 18
6.93
The Committee recommends that the Australian Crime Commission work to
include the data provided by the state and territory law enforcement agencies
to further develop the Illicit Drug Data Report.
Conclusion
6.94
This inquiry has highlighted that, while the use of AOSD in Australia is
increasing, governments and LEAs have increased their efforts to meet this
challenge. The Committee has heard that current supply-reduction strategies
have proved to be effective in limiting the availability of AOSD. However, as
discussed in this chapter, it is extremely difficult to quantify and get a true
picture of the effects of current strategies on the AOSD market.
6.95
Despite the successes of the response to the AOSD problem to date, the
question of how this is resolved by policy makers must be reviewed often to
keep in step with trends in drug use, and to remain relevant to the experiences
and needs of LEAs and the health, research and community support organisations that
deal at the coalface with the consequences of the illicit drug market.
6.96
As acknowledged in this report, the illicit drug market is a dynamic
one. The potential for large economic gains ensures that those involved with
AOSD are innovative and well resourced and will seek to stay ahead of drug law
enforcement efforts. The Committee finds that the response of the ACC and
Australian LEAs through collaborative arrangements and coordinated operations
has been adequate, and continues to improve with the addition of policy
responses and new legislation and the targeting of operations towards
identified trends in and areas of the AOSD market. The Committee commends the drug
law enforcement efforts of the ACC, the AFP, the ACS and the relevant state and
territory LEAs, and encourages them to continue to work collaboratively and
proactively in this difficult task.
Senator the Hon Ian Macdonald
Chair
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