AS AUSTRALIAN POLICE TRY TO STEM THE TRADE

The Australian Government has begun cooperating 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 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 Burma's far north.

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

As part of Canberra's new policy, the Australian military has stepped
up its contribution to wider intelligence gathering initiatives that
include the stationing of a Federal Police agent in Burma for the
first time. One immediate goal is to gather tip-offs on large-scale
heroin shipments from Burma to Sydney, Melbourne and the Gold Coast.

The same region is also generating a massive trafficking business of
speed-like methamphetamine into Thailand, further enhancing the power
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 only respond to concerted
international pressure and sanctions are cynical about the potential
for genuine collaboration with the country's military. The United
States, and more recently, upper echelons of the Thai military, have
accused Burma of tacitly allowing the development of mini
"narco-states". The Burmese junta has brokered various autonomy deals
with ethnic minority groups in the so-called "Golden Triangle" opium
producing region, ending decades of sporadic guerrilla warfare with
Rangoon.

The Australian Government, which has launched a diplomatic initiative
aimed at promoting 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
Australian Government is now pressing ahead with engagement.

The Foreign Minister, Mr Alexander Downer, told The Age yesterday
that: "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. Despite
his local knowledge of the region, however, the obstacles he faces are
formidable.

For a start, it was the powerful head of Burma's military intelligence
apparatus, General Khin Nyunt, who struck autonomy deals with various
ethnic groups and leaders of the former 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 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 today is Wei
Shia-kang, according to Thailand-based Golden Triangle expert Bertil
Lintner. Wei has been able to hold on to part of Khun Sa's territory
since entering an alliance with Rangoon, which Mr Lintner says was
clearly brokered by General Khin Nyunt.

Wei, along with several brothers, has shadowy connections to Taiwanese
and US intelligence agencies going back to the 1950s. They left
China's southern Yunnan Province after the communist takeover and
entered the opium trade. There are well-documented accounts of how Wei
established listening posts to spy on China for the American Central
Intelligence Agency, gaining useful protection for his drug smuggling
operations.

Other groups over the decades were given cart blanche by
administrations in Rangoon to engage in trafficking provided they
opposed anti-government insurgencies.

According to well-placed sources, 400kilograms of heroin that were
seized in the Port Macquarie area of New South Wales last October, the
biggest bust in Australia's history, came from three laboratories near
the Thai border under Wei's control.

The Australian Justice Minister, Senator Amanda Vanstone, said she
could not comment on "operational matters" when asked if Wei is now
considered the leading target for the Federal Police agents. 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 Wei Shia-kang have
major business interests acquired with drug profits. On the Thai side,
ethnic Chinese groups broker and finance big drug deals.

Senator Vanstone cites collaboration projects with Thailand and Burma,
particularly efforts to build mechanisms to tackle the laundering of
drugs profits. But, she deflects questions about the likelihood that
the Burmese military would ever risk renewed hostilities by
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
cooperation and that includes the sharing of intelligence," Senator
Vanstone told The Age 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 Federal Police agent is in Rangoon 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 to secure
Burmese action in response to information supplied.

Hopes rest partly on the potential to develop relationships with
individuals in Burma's anti-narcotics administration that lead to
shared information. 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 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 into Thailand this
year.

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

He said that a drug seizure was made in Perth several weeks ago, but
added that a central strategy was to target organisations rather than
specific substances. "We are about targeting criminal groups rather
than the commodity," he said. "It is really about the big players."

Thailand has had some success using new high-technology devices to
search motor vehicles for drugs. What tends to happen though is that
once detection measures are toughened on one part of the border, more
remote locations are chosen and larger bribes are paid. A tougher
attitude to drug smuggling by authorities in southern China has,
according to Thai anti-narcotics agents, led to an increased flow of
heroin through Thailand in recent months.

There is also evidence of a substantial increase in heroin being moved
through Laos and Cambodia. The senior Australian Federal Police agent
stationed in Bangkok returned to base earlier this week from a visit
to Laos as Thai sources confirmed that there have been several
significant interceptions.

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

There are still questions about the extent to which lower-quality
heroin from the so-called Golden Crescent, notably Afghanistan, is
being repacked and marketed as coming from Burma.

Only a small proportion of smuggled heroin will be intercepted before
it reaches Australia. One argument in the past has been that large
busts in Australia at least affect demand by raising the price. But
even with some large seizures in the last year, and the fall in opium
poppy production in Burma due to weather factors, the price has fallen
dramatically and purity is up.

Estimates of the amount of heroin now coming into Australian annually
from Burma vary from about 1.5tonnes to two or three times that
amount. The huge profits available from supplying methamphetamines
underwrite 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 influence. Australian law enforcers are attempting to
deal with the internecine links between these autonomous zones and the
military regime in Rangoon. The ultimate test of the strategy will be
whether the likes of Wei Shia-kang are put behind bars.