PHILIPPINES 2006-2007 INTERNATIONAL NARCOTICS

UNCLAS SECTION 01 OF 06 MANILA 004568 SIPDIS SIPDIS STATE FOR INL, EAP/MTS, INR/TNC JUSTICE FOR OIA, AFMLS, AND NDDS TREASURY FOR FINCEN DEA FOR OILS AND OFFICE OF DIVERSION CONTROL E.O. 12958: N/A TAGS: SNAR PGOV RP SUBJECT: PHILIPPINES 2006-2007 INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT (INCSR) PART I, DRUGS AND CHEMICAL CONTROL REF: STATE 155088 ¶1. The following text is keyed to questions posed in the 2006-2007 International Narcotics Control Strategy Report, Part I, Drugs and Chemical Control (ref). ¶I. SUMMARY ¶2. Philippine law enforcement authorities continued to focus efforts on disrupting major trafficking organizations and dismantling large clandestine drug labs. The Government of the Philippines (GRP) reports that arrests and seizures declined in 2006, attributable to its strategy of focusing on key traffickers and producers rather than a larger number of less important targets. The Philippine government continues to build the capacity of the Philippine Drug Enforcement Agency (PDEA),established by the GRP in 2002, and its first 55 agents are scheduled to graduate in early 2007 from the PDEA Academy. Based on the quantity of seizures in 2006, the Philippines continues to be a producer of crystal methamphetamine. There is evidence that terrorist organizations use drug trafficking to fund their illicit activities. Philippine National Police (PNP) and Philippine Air Force officials express a desire to eradicate marijuana cultivation, but lack fuel for helicopters necessary to access remote sites in the mountains of Luzon and Mindanao. ¶3. The Philippines is a party to the 1988 UN Drug Convention. II. STATUS OF COUNTRY ¶4. Because of continued aggressive efforts to seize clandestine drug labs in Metro Manila, the supply of crystal methamphetamine, locally known as "shabu," has decreased. The Philippine Dangerous Drug Board reports that the current price of "shabu" has more than doubled since 2005. However, drug agents directly involved in narcotics investigations believe that methamphetamine production has moved to the provinces. They report methamphetamine can still be obtained at near 2005 prices in many areas; even less in areas where labs are located, such as central Mindanao. ¶5. Most of the precursor chemicals are smuggled into the Philippines (or illegally diverted after legal importation), from the People's Republic of China (PRC),including Hong Kong. However, ephedrine is also smuggled from India. There are seven identified transnational drug syndicates in the country. At least five foreign major drug lords from the PRC and Taiwan are in each group. The Philippines is a transshipment point for further export of methamphetamine of foreign manufacture to Australia, Canada, Japan, Korea, and the U.S. (including Guam and Saipan). According to law enforcement officials, intelligence exists indicating that other transnational drug groups may be planning to establish methamphetamine producing laboratories in the country. ¶6. Dealers sell methamphetamine in crystal form for smoking ("shabu"). No production or distribution of methamphetamine in tablet form ("yaba") has been reported in the Philippines. Producers typically make methamphetamine in clandestine labs through a hydrogenation process that uses palladium and hydrogen gas to refine the liquid chlorephedrine mixture into crystal form. However, an August 2006 clandestine lab seizure in Quezon Province, east of Metro Manila, showed that clandestine laboratory operators are also using another production variation using red phosphorous. ¶7. The Philippines produces, consumes, and exports marijuana. According to law enforcement sources, the shortage of shabu has increased the demand for marijuana, resulting in higher market prices. Marijuana grows naturally in mountainous areas inaccessible to vehicles. Philippine authorities continue to encounter difficulties stemming production. Although Philippine National Police and Philippine Air Force officials express a desire to eradicate marijuana cultivation, they lack fuel for helicopters necessary to access remote sites in the mountains of Luzon and Mindanao. Generally, insurgent groups, such as the New People's Army (NPA),control and protect most marijuana MANILA 00004568 002 OF 006 plantation sites. Most of the marijuana produced in the Philippines is for local consumption, with the remainder smuggled to Australia, Japan, Malaysia, and Taiwan. ¶8. Methyl-dioxy-methamphetamine (MDMA),commonly known as ecstasy, is slowly gaining popularity among the affluent members of the Philippine society, mainly in exclusive bars and clubs. There appeared to be no significant change in availability in 2006 and enforcement efforts remained constant. Since 2001, a total of 10,275 ecstasy tablets were seized. ¶9. The Philippine Dangerous Drug Board classified Ketamine as a "dangerous drug" on October 1, 2005. Ketamine, legally imported for use as a veterinary anesthetic, is converted to the illicit crystal form from its legal liquid form in the Philippines and exported to other countries in the region. There is little or no market for Ketamine in the Philippines. Since 2003, five Ketamine processing facilities have been seized in Metro Manila. This year, Philippine authorities seized approximately 10 kilograms of Ketamine destined for Taiwan at Manila International Airport, validating reports of drug traffickers using the Philippines for Ketamine conversion. A total of 28 kilograms of Ketamine were seized in 2006. III. COUNTRY ACTIONS AGAINST DRUGS ¶A. POLICY INITIATIVES ¶10. The administration of President Gloria Macapagal Arroyo continues to concentrate on the full and sustained implementation of counter-narcotics legislation and the development of the Philippine Drug Enforcement Administration (PDEA) as the lead counter-narcotics agency. ¶11. In 2002, President Arroyo created by executive order the Philippine National Police's (PNP) Anti-Illegal Drugs Special Operations Task Force (AIDSOTF). The AIDSOTF mission is to maintain law enforcement pressure on narcotics trafficking while PDEA becomes fully functional by 2007. In 2006, PDEA began training its first academy class, which will provide approximately 55 new newly-trained recruits as PDEA agents. ¶12. The GRP has developed and is implementing a counter-narcotics master plan known as the National Anti-Drug Strategy (NADS). The NADS is executed by the National Anti-Drug Program of Action (NADPA) and contains provisions for counter-narcotics law enforcement, drug treatment and prevention, and internal cooperation in counter-narcotics, all of which are objectives of the 1988 UN Drug Convention. In 2006, cities, towns, and barangays (neighborhoods) continued to utilize anti-drug law enforcement councils, as mandated by NADPA, to heighten community awareness. ¶13. An executive order requiring the Armed Forces of the Philippines (AFP),Philippine National Police (PNP),and Philippine Coast Guard (PCG) to partner with PDEA in the Maritime Drug Enforcement Coordination Center (MDECC) project was submitted to the Office of the President in February 2006 but has yet to be signed. The PNP Maritime Group, PDEA, Philippine Coast Guard, AFP Navy, and National Intelligence Coordinating Agency have nonetheless voluntarily assigned personnel to the MDECC at PDEA headquarters in Quezon City, but the outstations in Zamboanga and Poro Point have only PDEA officers assigned. The AFP has yet to assign any personnel to the MDECC, despite the fact that the Poro Point and Zamboanga facilities are located on Philippine Navy stations. ¶B. LAW ENFORCEMENT EFFORTS ¶14. Counter-narcotics law enforcement remains a high priority of the GRP, but lack of resources continues to hinder operations. However, law enforcement efforts are relatively effective given inadequate funding. PDEA officials believe ILEA and JIATF-West training for law enforcement and military personnel have helped make interdiction operations more efficient and effective. GRP law enforcement agencies continued to target major MANILA 00004568 003 OF 006 traffickers and clandestine drug labs in 2006, instead of going after a larger number of less important targets, as was the practice before 2005. Significant successes included the disruption by PNP's AIDSOTF of a flourishing drug market in a predominantly Muslim neighborhood in Pasig City (which operated within yards of the city hall and police station), and the seizure by the National Bureau of Investigation of a "shabu" laboratory being serviced by fishing vessels in the area of Dingalang, in Aurora Province. ¶15. Current Philippine laws regarding electronic surveillance and bank secrecy restrict Philippine enforcement agencies from using electronic surveillance and obtaining bank information on suspected drug lords. The 1965 anti-Wiretapping Act prohibits the use of wiretapping as well as consensual monitoring of conversations and interrogations as evidence in court. Additionally, there are no provisions to seal court records to protect confidential sources and methods. Most drug busts are results of information from disgruntled insiders who voluntarily give leads to the Philippine authorities. ¶16. The most crippling operational weakness of PDEA is the lack of a functioning laboratory. Dismissals, arrests, and resignations have robbed the laboratory of experienced staff. In addition, the lab is inadequate and lacks basic equipment. Lab chemists can only perform field tests, normally conducted by arresting officers at a crime scene in the US. The Japanese International Cooperation Agency has donated a sophisticated gas chromatograph mass spectrometer scanner to PDEA, but PDEA uses the device for training and research, rather than evidence analysis. In addition, the lack of a functioning lab means there is no adequate storage facility for evidence. ¶17. Pervasive problems in the law enforcement and criminal justice system such as corruption, low morale, inadequate salaries, and lack of cooperation between police and prosecutors also hamper narcotic prosecutions. The slow process of prosecuting narcotics cases not only demoralizes law enforcement personnel but also permits drug dealers to continue their drug business while awaiting court dates. By the time a case gets to trial, witnesses often have disappeared or been persuaded through extortion or bribery to change their testimony. The Comprehensive Dangerous Drug Act prohibits plea-bargaining in exchange for testimony, once they have been charged. There is therefore no incentive for a defendant to plead guilty and offer testimony against superiors in the drug trafficking organization, thus stifling investigations. ¶18. A severe lack of experienced investigators in PDEA further inhibits investigations. PNP detectives had been seconded to PDEA since its inception in 2002. In 2006, however, they began to return to PNP, as the formal de-link of PNP and PDEA approaches in 2007. ¶19. The Philippines has a long history of insurgent/terrorist involvement in drug trafficking activity. The communist New People's Army (NPA) has reportedly been involved in large-scale marijuana cultivation in the Cordilleras Region of Northern Luzon since the mid-1980's. The NPA has generated funding from the drug trade from a variety of means, including extortion of traffickers in the form of a "revolutionary" tax for providing security of marijuana plantation, and direct participation in marijuana cultivation, processing, and operations. Current information from PNP and AFP sources indicates that NPA involvement in the marijuana trade continues in North Luzon and Southern Mindanao. ¶20. The terrorist Abu Sayyaf Group (ASG) is linked to drug trafficking activity. PNP officials believe elements of the ASG are engaged in providing security for marijuana cultivation, protection for drug trafficking organization (DTO) operations, and local drug distribution operations, particularly in Jolo and Tawi-Tawi. Recent information from Philippine police and military officials suggests that the ASG continues to provide protection for major drug trafficking groups operating in the Sulu Archipelago as well MANILA 00004568 004 OF 006 as local drug trafficking activity, in exchange for cash payments that help fund their own operations. ¶21. In July 2005, the DEA Manila Country Office and Joint Inter-Agency Task Force-West (JIATF-W) developed a network of information fusion centers in the Philippines. The primary facility, the Maritime Drug Enforcement Coordination Center (MDECC) is located at PDEA Headquarters in Metro Manila. There are two satellite centers, called Maritime Information Coordination Centers (MICCs): one is located at the headquarters of the Naval Forces Western Mindanao, Zamboanga Del Sur (Southern Mindanao) and another at Poro Point, San Fernando, La Union (Northern Luzon). These centers gather information about maritime drug trafficking and other forms of smuggling, and provide actionable target information that law enforcement agencies can use to investigate and prosecute drug trafficking organizations. Officers from the Philippine Navy, Coast Guard, PNP-Maritime Group, and PDEA staff these facilities. ¶22. The Philippine authorities dismantled three clandestine methamphetamine mega-laboratories and one warehouse in 2006, compared to seven smaller laboratories in 2005. A mega-lab is defined as a clandestine laboratory capable of producing 1,000 kilograms or more in one production cycle. GRP law enforcement officials cite three factors behind the existence of domestic labs: a. The simplicity of the process in which ephedrine can be converted into methamphetamine on a near one-to-one conversion ratio; b. The crackdown on drug production facilities in other methamphetamine-producing countries in the region; c. The relative ease, increased profit, and lesser danger of importing precursor chemicals for methamphetamine production (ephedrine/pseudoephedrine),compared to importing the finished product. ¶23. PDEA reports that in 2006, authorities seized 1,436 kilograms of methamphetamine, which they valued at US$143,518,183 (at US$100 per gram),27.89 kilograms of Ketamine, which they valued at US$2,789,328 (at US$100 per gram),and 11,675 kilograms of marijuana leaves, which they valued at US$5,837,684 (at US$0.50 per gram). Philippine authorities claimed to have seized total narcotics worth approximately U$158,092,142, arrested 8,616 people for drug related offenses, and filed 3,834 criminal cases for drug crimes in 2006. By comparison, 15,268 individuals were arrested in 2005, but most of these were lower level offenders. Data on convictions was not available. PRC- and Taiwan-based traffickers remain the most influential foreign groups operating in the Philippines. Philippine authorities had previously reduced transnational drug syndicates in the country from 181 to 156; in 2006, they disrupted the operations of two additional drug syndicates. ¶C. CORRUPTION ¶24. Corruption among the police, judiciary, and elected officials continues to be a significant impediment to Philippine law enforcement efforts. The GRP has criminalized public corruption in narcotic law enforcement through its Dangerous Drug Act (DDA),which clearly prohibits GRP officials from laundering proceeds of illegal drug actions. Four PDEA employees were arrested in 2006 for the theft of seven kilograms of seized methamphetamine from PDEA headquarters. These personnel have been detained and charges have been filed against them. Ten PDEA and PNP AIDSOTF officers were arrested in October 2006 for conducting illegal (warrantless) drug raids, and for kidnapping the subjects of those raids. Both the PNP and PDEA have begun internal policing for corruption. There are also indications that drug money may be funding illicit aspects of provincial and local political campaigns, such as vote buying, bribery of election officials, ballot theft, and voter intimidation. ¶25. As a matter of government policy, the Philippines does not encourage or facilitate illicit production or MANILA 00004568 005 OF 006 distribution of narcotic or psychotropic drug or other controlled substances, or the laundering of proceeds from illegal drug transactions. ¶26. No known senior official of the GRP engages in, encourages, or facilitates the illicit production or distribution of narcotic or psychotropic drug or other controlled substances, or the laundering of proceeds from illegal drug transactions. ¶D. AGREEMENTS AND TREATIES ¶27. The Philippines is a party to the 1988 UN Drug Convention, as well as to the 1971 UN Convention on Psychotropic Substances, the 1961 UN Single Convention on Narcotic Drugs, and the 1972 Protocol Amending the Single Convention. The Philippines is a party to the UN Convention against Transnational Organized Crime and its protocols against trafficking in persons and migrants smuggling. The U.S. and the GRP continue to cooperate in law enforcement matters through a bilateral extradition treaty and Mutaual Legal Assistance Treaty. The Philippines has signed the UN Convention Against Corruption. ¶E. CULTIVATION/PRODUCTION ¶28. There are at least 120 marijuana cultivation sites spread throughout the mountainous areas of nine regions of the Philippines. In 2006, Philippine law enforcement performed 36 marijuana eradication operations. Using manual techniques to eradicate marijuana, government entities claim to have successfully uprooted and destroyed 564,562 plants and seedlings in 2006 compared to 9,677,852 plants and seedlings in 2005. They also confiscated 103 kilograms of seeds in 2006 compared to 264 kilograms of seeds in 2005. ¶29. The PNP Special Action Force (SAF, an air-mobile, anti-insurgency police unit, approximately brigade strength), have been ordered by President Arroyo to deploy from their headquarters in Bicutan, Metro Manila, to several rural areas troubled by NPA cadres. In advance of the deployment, a senior SAF officer approached DEA Manila and offered to use SAF personnel in the mountainous regions to eradicate marijuana, with the goal of disrupting NPA financing. The officer requested DEA assistance in obtaining and providing overhead imagery of the marijuana cultivation sites in several provinces, and in securing fuel for Philippine Air Force (PAF) helicopters that would be used to carry the troops to the remote marijuana fields. In a separate conversation, a senior PAF officer informed DEA Manila that the PAF would readily support marijuana eradication operations with PAF helicopters, but they lacked fuel for the missions. DEA Manila informed these officers that it would raise the issue with appropriate USG agencies. ¶F. DRUG FLOW/TRANSIT ¶30. The Philippines is a narcotics source and transshipment country. Illegal drugs enter the country through seaports, economic zones, and airports. The Philippines has over 36,200 kilometers of coastlines and 7,000 islands. Vast stretches of the Philippine coast are virtually unpatrolled and sparsely inhabited. Traffickers use shipping containers, fishing boats, and cargo ships (which off-load to smaller boats) to transport multi-hundred kilogram quantities of methamphetamine and precursor chemicals. AFP and law enforcement marine interdiction efforts are hamstrung by deficits in equipment, training, and intelligence sharing. The Philippines is also a transshipment point for further export of crystal methamphetamine to Japan, Australia, Canada, Korea, and the U.S. (including Guam and Saipan). Commercial air carriers and express mail services remain the primary means of shipment to Guam and to the mainland U.S., with a typical shipment size of one to four kilograms. There has been no notable increase or decrease in transshipment activities in 2006. ¶G. DOMESTIC PROGRAMS/DEMAND REDUCTION ¶31. The Comprehensive Dangerous Drug Act of 2002 includes MANILA 00004568 006 OF 006 provisions that mandate drug abuse education in schools, the establishment of provincial drug education centers, development of drug-free workplace programs, and other demand reduction classes. Abusers who voluntarily enroll in treatment and rehabilitation centers are exempt from prosecution for illegal drug use. Statistics from rehabilitation centers will be submitted later. IV. U.S. POLICY INITIATIVES AND PROGRAMS. ¶A. U.S. POLICY INITIATIVES ¶32. The USG's main counter-narcotics policy goals in the Philippines are to: a. Work with local counterparts to provide an effective response to counter the burgeoning clandestine production of methamphetamine; b. Cooperate with local authorities to prevent the Philippines from being used as a transit point by trafficking organizations affecting U.S.; c. Promote the development of PDEA as the focus for effective counter-narcotics enforcement effort in the Philippines; d. Provide ILEA, JIATF-West, and other drug-related training for law enforcement and military personnel; e. Develop an improved statutory framework for control of drug and precursor chemicals. ¶B. BILATERAL COOPERATION ¶33. The U.S. assists the Philippine counter-narcotics efforts with training, intelligence gathering and fusion, and infrastructure development. ¶C. ROAD AHEAD: ¶34. The USG plans to continue work with the GRP to promote law-enforcement institution building and encourage anti-corruption mechanism via JIATF-West presence as well as ongoing programs funded by the Department of State (INL and S/CT, and USAID). Strengthening the bilateral counter-narcotics relationship serves the national interest of both the U.S. and the Philippines. ¶V. STATISTICAL TABLES ¶35. The Philippines is not a "Majors List" country. VI. CHEMICAL CONTROL ISSUES ¶36. As per INL instructions, this new section to be submitted septel at a later time. KENNEY