Crime rates are suspected to spike as cut supply lines force up drug prices

A police officer takes a photo of the burning of US$839 million worth of seized drugs in Myanmar last year. Picture: EPA
A police officer takes a photo of the burning of US$839 million worth of seized drugs in Myanmar last year. Picture: EPA

Wastewater analysis revealed that last year, Australians collectively consumed a staggering 11.1 tonnes of methamphetamine, 5.6 tonnes of cocaine and 2.6 tonnes of ecstasy.

And the overwhelming majority was smuggled in through our borders by organised crime syndicates. The most recent data revealed Canberra, the Gold Coast and Sydney as Australia's biggest cocaine consumers.

The best estimates indicate that about 34 per cent of incoming illicit drugs are apprehended at the border. The rest, billions of dollars in value, hit the streets.

But that hugely lucrative, global and decades-long trade in human misery took a major hit this week.


Dr John Coyne, who has worked for over 25 years in intelligence and national security including a decade within the AFP's serious and transnational crime areas, described Ironside's clever underworld encryption hook as "unprecedented ", and one which has created a window of opportunity.

However, that window won't stay open for long.

AFP's lab tests devices for fingerprints. Picture: Supplied

AFP's lab tests devices for fingerprints. Picture: Supplied

The head of strategic policing at national think tank the Australian Strategic Policy Institute, Dr Coyne said that the next steps are the most important ones if Australia is to address the exposed weaknesses in our border security, and plug the holes where the drugs leak in.

Special Operation Ironside, the AFP arm of an FBI-led international crime-busting effort focused on illicit drug importation and hand-in-glove money-laundering, used the simple tool of an encrypted phone network, sold and spread organically through organised crime gangs, to crack the trade wide open.

Items seized as part of Operation Ironside. Pictures: Supplied

Items seized as part of Operation Ironside. Pictures: Supplied

The crooks didn't know was that at the "back end " of the encrypted app on their Pixel phones - which were thought to be trusted and fully secure - were police officers watching on in real time and recording everything.

The busts which have followed this week have been spectacular in their size and scale. By Thursday lunchtime, over 250 offenders across Australia had been charged, 971kg of illicit drugs uncovered, and $16.8 million in cash seized. The operation has also lifted the lid on major drug importation operations in the US, Germany, Holland, Finland and New Zealand.

It's a huge win for law enforcement and with it, says Dr Coyne, comes a "once-in-a-lifetime opportunity" to make a long-term difference within the broader drug strategy discussion.

"This [operation] has netted a windfall in intelligence, and a unique insight into how illicit drugs come into Australia and the points of vulnerability in our borders," he said. "This is where agencies need to come together and shut down those vulnerabilities and root out the corruption that goes with it."

Suitcase full of cash seized through Operation Ironside. Picture: AFP

Suitcase full of cash seized through Operation Ironside. Picture: AFP

He said Ironside also has bought some time that authorities need to use wisely.

The people that operate Australia's drug networks - from the top down - are highly exposed and ducking for cover.

"The mid-level [drug] dealers that are left are now running around with the gear they have and trying to dump it on the street-level dealers as quickly as possible to get the money, and not to get busted," he said.

"We won't see it for a couple of months but over the next about six months, the supply chain will really dry up and [drug] prices will rise. That's when we'll start to see other knock-on effects.

"The party drug market aside, there's this sort of mythology around that drugs are a bit like cigarettes; that someone who is addicted to methamphetamine and the price doubles from $50 a point to $100 a point, that somehow they'll just say: 'you're right, I should give it up now'. That won't happen.

"These addicts will go out and commit more crime, sell themselves more on the street, to feed their habit, no matter the cost. All in all, it will be a worse situation [for addicts on the street]."

Criminologist Dr Adam Masters said the supply side's manufacturing capability is unaffected so distribution networks which were "off the radar" of the Ironside investigation will move to fill that gap and explore different means of communication.

"Given this is the third network compromised by law enforcement globally in the past couple of years, groups may settle on older forms of encrypted communication, rather than looking for the newest and shiniest thing," Dr Masters said.

"It is a little Darwinian; some of the smarter players will learn, others will go for the next app."

For those at the top end of the supply chain, it's business as usual. Raw material producers, such as the opium poppy farmers of Myanmar and Laos, and the methamphetamine cooks "in the dark corners of Myanmar and other parts of Asia" will keep churning out product at an almost-industrial level.

"Modern drug networks are amorphous in nature," Dr Coyne said.

"Alliances are formed between groups to bring in shipments and manage the distribution. You remove those key players and yes, a vacuum is created in the supply system.

"But while the demand remains here and the prices are high, that vacuum will always be filled."

He described an effective drug strategy as "like a three legged stool", with demand reduction, supply reduction, and harm minimisation at each corner.

"For the strategy to work, you need to address all three at the same time," he said. "It can be done, but it takes a genuine national, concerted effort."

This story Ironside aftermath: drug price hikes and desperation on the streets first appeared on Mandurah Mail.