THE NARCOTICS GAMBLE

Facing formidable obstacles in its bid to stem the tide of Burmese
drugs flowing into the country, Australia has turned to a risky
strategy, reports Herald Correspondent Craig Skehan, who ventured into
the Golden Triangle.

The Australian Government has begun co-operating with Burma's military
rulers to challenge drug lords who are dumping cheap heroin on
Australia's east coast, despite claims that elements of the military
regime are themselves linked to major traffickers.

The politically sensitive policy gamble is aimed at encouraging the
Burmese Government to tackle, or at least inform on, the shadowy heads
of drug empires, based in the opium growing region of the far north.

Despite a recent drop in opium production in Burma, due to poor
climatic conditions, the price of heroin has continued to drop
worldwide, and purity has increased, probably because Mexican and
Colombian producers have flooded the major United States market.

As part of Canberra's new policy, the Australian military has stepped
up its contribution to wider intelligence-gathering initiatives, which
include stationing a Federal Police agent in Burma for the first time.

One immediate goal is to gather tip-offs on large heroin shipments en
route from Burma to Sydney, Melbourne and the Gold Coast.

But the same region is also generating a massive trafficking business
in "speed", such as methamphetamine, into Thailand, further enhancing
the power and funding the infrastructure of the heroin drug lords.

In the longer term, there are concerns that these drug producers will
also target Australia with new generations of synthetic drugs.

Critics who still believe Burma will respond only to concerted
international pressure and sanctions are cynical about the potential
for genuine collaboration with the country's military.

The US, and more recently upper echelons of the Thai military, have
accused Burma of tacitly allowing the development of mini
"narco-states".

The Burmese Government has brokered various autonomy deals with ethnic
minority groups in the Golden Triangle opium-producing region, ending
decades of sporadic guerilla warfare between most minority armies and
Rangoon.

The Australian Government, which has launched a diplomatic initiative
aimed at promoting a human rights dialogue with Burma, is less willing
to attack the regime's policies.

Having resisted pressure to boycott an Interpol conference in Burma
last year on trafficking, the Canberra is now pressing ahead with engagement.

The Foreign Minister, Mr Downer, said yesterday: "With Burma being the
source of 80 to 90 per cent of the heroin entering Australia, the
Australian Government believes it is important to support domestic and
international anti-narcotics efforts there. We need to work with the
Burmese authorities on this.

"There are suggestions of some links between public officials and the
drug trade, but it is also true that the Burmese Government has taken
positive steps in drug crop eradication."

The Federal Police officer stationed in Rangoon in January was based
in the Thai sector of the Golden Triangle in the early 1990s.

However, despite his local knowledge of the region, the obstacles he
faces are formidable. For a start, it was the powerful head of Burma's
pervasive military intelligence apparatus, General Khin Nyunt, who
struck autonomy deals with various ethnic groups and leaders of the
former Burmese Communist Party.

In return for helping drive drug kingpin Khun Sa from his outposts
along the Burma-Thai border, a mixed bag of ethnic Wa and ethnic
Chinese drug traffickers were allowed to occupy his former territory.

Khun Sa's family remains in the trafficking business on a diminished
scale.

Arguably the most powerful drug trafficker in Burma now is Wei
Shia-kang, according to a Thailand-based Golden Triangle expert,
Bertil Lintner. Wei has been able to hold onto part of Khun Sa's
former territory since entering into an alliance with Rangoon which Mr
Lintner says was clearly brokered by Khin Nyunt.

Wei and several brothers have shadowy connections to Taiwanese and US
intelligence agencies going back to the 1950s. They left China's
southern Yunnan province after the Communist takeover in China and
entered the opium trade.

Other groups over the decades were given carte blanche by governments
in Rangoon to engage in trafficking so long as they opposed
anti-government insurgencies.

According to well-placed sources, the 400 kilograms of heroin seized
in the Port Macquarie area of NSW in October - the biggest seizure in
Australian history - came from three laboratories near the Thai border
under Wei's control.

Australia's Justice Minister, Senator Vanstone, said she could not
comment on operational matters when asked if Wei was now regarded as
the major target for the Australian Federal Police agents under her
portfolio responsibility.

However, the fact that Senator Vanstone made a little-publicised visit
late last month to the northern Thai town of Mae Sai, located right on
the Burmese border, reflects frustration at the continuing flow of
cut-price heroin to Australia.

Senator Vanstone was able to look across the narrow Sai River to the
Burmese town of Tachilek, where traffickers such as We Shia-kang have
major business interests acquired with drug profits.

On the Thai side, ethnic Chinese-controlled groups broker and finance
many major drug deals.

Senator Vanstone said there were collaboration projects with Thailand
and Burma, particularly efforts to build mechanisms to tackle the
laundering of drug profits.

But she deflects questions over whether the Burmese military would
ever risk renewed hostilities by directly challenging the drug
business in areas where autonomy arrangements protect men such as Wei.

"It is not Hollywood brawn and firepower that is needed but
co-operation, and that includes the sharing of intelligence," Senator
Vanstone said this week.

"There is a need to build your relations with other people so you can
pick up a phone and say: 'What do you know about such and such?'"

The Australian Federal Police agent in Rangoon is on a six-month
trial. Burma's military regime will weigh up whether to accept his
presence on a permanent basis. Australian authorities will need to
consider the cost-effectiveness of information gleaned and the scope,
or a lack of it, to secure Burmese action in response to information
supplied. Hopes rest partly on the potential to develop personal
information-sharing with individuals in Burma's anti-narcotics
administration.

However, a central problem is that major trafficking organisations now
have big investments in Burma's mainstream economy, from transport to
hotels and pig farming, which help to insulate them from thorough
investigation.

The scale of methamphetamine production in Burma is staggering. Thai
authorities estimate that more than 600 million tablets of the drug,
which is taken orally or smoked, will be smuggled onto Thailand this
year.

The international and operations director of the Australian Federal
Police, Andy Hughes, said: "I don't think we can afford to be
complacent ... that the existing networks used to import heroin will
not be used to import methamphetamines."

A seizure of the drug was made in Perth several weeks ago, he said,
but a central strategy was to target organisations rather than
specific substances.

"We are about targeting criminal groups rather than the commodity. It
is really about the big players."

Thailand has had some success using new high-tech devices to search
motor vehicles for secreted drugs.

What tends to happen, though, is that if there is a toughening of
detection measures on one part of the border, more remote locations
are chosen and larger bribes are paid to protect onward movement.

A tougher attitude to drug smuggling by authorities in southern China
has, according to Thai anti-narcotics agents, led to an increased
passage of heroin through Thailand in recent months. There is also
evidence of a substantial increase in the amount of heroin being moved
through Laos and Cambodia.

Vietnam and southern Burmese sea ports remain major transit points to
Australia, and there are new smuggling routes through Bangladesh and
India.

It is unclear how much lower-quality heroin from the so-called Golden
Crescent, notably Afghanistan, is being re-packed and marketed as
coming from Burma.

The big picture is that only a small proportion of smuggled heroin
will be intercepted before it reaches Australia. One argument has been
that large drug busts in Australia at least affect demand by raising
the price.

However, even with some very big seizures in the past year or so, and
the fall in opium poppy production in Burma due to weather changes,
the price has fallen dramatically and purity is up.

Estimates of the amount of heroin now coming into Australia annually
from Burma vary from about 1.5 tonnes to two or three times that.

As well as the price-deflating impact of Latin American heroin
supplies to the US, it is likely that the huge profits available from
supplying methamphetamines is underwriting heroin deals.

This includes an ability to buy political connections and bribe
officials along smuggling routes.

Much of the cash flowing to the operators of remote jungle drug
laboratories is being reinvested at home in Burma and used to maintain
their regional hegemonies.

Australian law enforcers are attempting to deal with the internecine
links between these autonomous zones and the military regime in
Rangoon. Even if gains are made in making individual seizures, the
ultimate test of the strategy is whether the co-operation leads to the
arrests of senior drug figures and a disruption of the drug pipeline.