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Southeast Asia Organized Crime

Criminals are moving out of China and into ASEAN as Chinese law enforcement increases crackdowns. That has made ASEAN an attractive relocation venue for Chinese gangs as regulations are weaker, authorities more lax and pliable. There is also the added benefit of lower production costs. Remote locations in Southeast Asia where the reach of central governments are tenuous and borders are porous have allowed organized crime to flourish for decades.

Current public security and safety institutions, systems and safeguards in the region are reflective of a time when crime was local in nature, prior to when governments had to work on shared security challenges. Currently, the ASEAN institutional agenda for countering transnational crime is not moving at the same speed as the trade and migration side of the integration. Anticipating transnational organised crime and security risks should be an integral part of infrastructure and trade facilitation project plans.

Maritime Southeast Asia is generally an excellent environment for organised crime groups to exploit. The security threats they create undermine economic development and social stability, and cannot be contained by traditional national military capabilities or law enforcement agencies. Trading routes and ports in maritime Southeast Asia face increasing quantities of illicit shipping cargo destined for other regions, often passing through unchecked.

There have always been opportunities to trade illegal goods across borders in Southeast Asia and in recent years the growth of multinational criminal supply chains has been apparent. As the region increases connectivity creating and strengthening trade linkages, threats arising from trafficking and associated criminality are becoming truly integrated within the region and in connections to regions beyond. A conservative estimate of organised criminal revenues in East Asia and the Pacific is US$100 billion. This not only surpasses the GDP of several states in that region, including Lao PDR, Cambodia and Myanmar, but also surpasses their GDPs combined.

Rapid integration in Southeast Asia both internal to the ASEAN group and with near neighbors - is creating new economic and development opportunities but also some significant security challenges. Worryingly, data point to the fact organised crime and associated problems are expanding and diversifying as the region integrates.

Current public security and safety institutions, systems and safeguards in Southeast Asia are reflective of a time when crime was primarily local in nature, prior to when governments had to work on shared security challenges. To develop a more effective response, law enforcement and security agencies will need to work closely with regional and international counterparts, and with trade and infrastructure developers, particularly in economic hubs vulnerable to infiltration by organised crime. Anticipating transnational organised crime and security risks should be an integral part of infrastructure and trade facilitation project plans.

In recent years, it is apparent that transnational crime flows have been growing rapidly in the region. The security threats highlighted in this report show a predictable pattern, driven by organised crime groups adapting to seize opportunities. These threats require a coordinated response from governments, including by integrating public security issues more tightly into infrastructure, trade and migration programs, such as those supported by international financial institutions.

Of the 500 million containers that are shipped annually, less than 2% are inspected. This makes maritime trade particularly useful for actors trading in illegal bulk goods, such as drugs or counterfeits. In the trans-ASEAN transport network, there are 47 designated main ports.

Approximately two-thirds of the regions heroin supply comes from Myanmar and one third from Afghanistan via Pakistan. The majority of opium production in Southeast Asia is confined to parts of Myanmar, particularly Shan State. A smaller, yet significant, amount is also produced in Lao PDR. Myanmar and Lao PDR combined produced an estimated 762 tons of opium in 2014 alone.

Border officials have consistently rated synthetic drug trafficking as the most serious illicit trade issue in the region. Methamphetamine seizures tripled from less than 12 tons in 2008 to 36 tons in 2012. China, Myanmar, and India stand out as major producers for export. The annual income for drug traffickers in the region is estimated at over US$30 billion. The production and consumption of methamphetamine pills have also started to spill over from older markets into neighboring countries, such as Brunei, the Philippines, and Singapore.

According to border officials surveyed by UNODC, the second most frequently trafficked drug is heroin. Heroin is almost entirely sourced in Myanmar, but because heroin from Myanmar has sometimes been insufficient to meet regional demand, approximately one third of the market is supplied by Afghan heroin.

Making it easy for people to travel in Southeast Asia is important to business and social connections. Unfortunately, it also facilitates labor exploitation and migrant smuggling. For example, unskilled labour migrants moving to Thailand, Singapore, India and China mainly come from less developed such as the Cambodia, Lao PDR, Myanmar, and Viet Nam. They also come from labor-abundant countries such as Indonesia and the Philippines. There is ample evidence that some laborers are vulnerable to exploitation, ranging from illegal employment conditions to forced labor and physical abuse.

Maritime crime poses a serious threat to the safety of seafarers, international trade and regional stability. For some crime types, the maritime domain is a defining feature. For example, Southeast Asia suffers many incidents of ship hijacking and robbery. By some reports, there were 120 incidents reported in the Singapore Straight, and off the coast of Bangladesh and Viet Nam in the first half of 2015 alone. Maritime crimes such as piracy and robbery are not stand-alone issues they are just one consequence of the insecurity caused by a lack of control of economic sea corridors and the open sea. Developing stronger maritime trade routes is an important goal, but it will be undermined by insecurity for maritime traders.

There has been rapid growth in the trade of rare wildlife and illegal timber. Trade in illegal timber is the majority of an estimated USD $24 billion generated through environmental crimes in Southeast Asia and the Pacific each year. Experts estimate that 30-40% of wood-based products exported from Southeast Asia is illegal, due to poor regulation and monitoring of the legitimate wood trade. Port authorities in transit countries within the region frequently lack the capacity or incentive to inspect these shipments. As a result, free trade zones become consolidation hubs for environmental crimes.

Counterfeit products and medicine are widespread in the region, with the majority coming from China, despite stricter law enforcement. The transnational networks involved are proving to be flexible: if any supplier or assembler is removed, other partners can be found elsewhere. Due to increased regulatory pressure within China, key aspects of production are reportedly moved to other countries, such as Myanmar, Viet Nam, and Cambodia. Counterfeit medicines from China and India are found in markets throughout the region, and the trade thrives in less developed countries.

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Page last modified: 25-02-2016 20:39:35 ZULU