From hierarchies to networks: The organizational evolution of the international drug trade

Abstract

The evolution of the transnational drug trade has precipitated an organizational and operational restructuring of organized crime groups (OCGs). This restructuring has produced a move away from formerly hierarchical and tightly controlled organizations, to more loosely coupled and decentralized network forms. But what has motivated the OCGs to restructure into more loosely coupled networks? Through an examination of the activities and strategies of Latin American OCGs, this article identifies market considerations, network responses to law enforcement pressure, and centrifugal forces within OCG networks as the key drivers of these changes. Despite this, OCGs still require some sort of organizational glue that connects and facilitates the activities of these decentralized networks. This is precisely why brokers are becoming vital actors in criminal networks. The data presented in this article suggests that brokers have assumed great significance in networks especially in relation to the ongoing linkages occurring between Latin American OCGs and with those in the Asia-Pacific.

Introduction

In 2010, Antonio Maria Costa, the Executive Director of the United Nations Office on Drugs and Crime (UNODC) stated that: ‘Organized crime has globalized and turned into one of the world's foremost economic and armed powers’ (UNODC, 2010, p.1) Two years later, the United States government reaffirmed the need to understand modern organized crime as a ‘significant and growing threat to national and international security, with dire implications for public safety, public health, democratic institutions, and economic stability across the globe’ (National Security Council, 2012, p.1). The changing nature of organized crime has meant that it now presents such a serious threat to the national security of nations around the world that its impact is considered by some to be greater than traditional threats such as terrorism. For example, in November 2018, Director General of the United Kingdom (UK) Crime Agency, Lynne Owens said, ‘Each year it [organized crime] kills more of our citizens than terrorism, war and natural disasters combined’ (BBC, 2018, p.1) The scale of the problem facing governments in combatting organized crime is significant because in a global context transnational organized crime (TOC) is ‘big business.’ In 2019, the UNODC estimated the activities of organized crime to be worth between US$900 billion and US$1.1 trillion (UNODC, 2019).

Rising affluence in the Asia Pacific has meant that countries such as Australia and New Zealand now pay some of the highest prices in the world for illicit drugs such as cocaine, fentanyl and methylamphetamine (UNODC, 2019). Despite this, there has been limited research that looks at how different criminal groups across the Pacific littoral work in collaboration to traffic illicit drugs to these distant but lucrative markets in Oceania. This article seeks to address this gap in the literature through an examination of Latin American organized crime groups (OCGs) and their growing relationships with the Asia Pacific region. Of particular concern is how these OCGs have adapted their organizational structures to enter new markets and to avoid the efforts of law enforcement agencies to close them down.

We begin by reviewing recent literature on the organizational and operational aspects of criminal groups with a focus on network explanations. Within this literature we concentrate on the changing nature of networks characterizing TOC and the role that ‘brokers’ play in these networks and argue that the presence of these brokers is particularly salient to explaining how and why these networks have rapidly and successfully connected across Pacific. The article then turns to Latin American OCGs to show how these groups have changed in terms of their organizational arrangements at home and in the neighbourhood. These changes have contributed to the rise of Latin American OCGs in the supply and delivery of organic and synthetic illicit drugs in complex criminal networks that span the Pacific.

Our research draws on data collected from sources that span a 30 year period. This time period has been selected because it coincides with the unparalleled expansion of Latin American OCGs' power and influence. During this period these OCGs moved beyond business dealings in nearby markets to become truly transnational in their activities by accessing global markets, particularly in the Asia Pacific. We adopted a qualitative content analysis to toto focus on data that dealt with the organizational changes of Latin American OCGs and their impact on the Asia Pacific. This included collecting a variety of information from academic, government and media sources. Official documents from institutions such as the Australian Criminal Intelligence Commission, the Australian Transaction and Reports and Analysis Centre (AUSTRAC), Asia Pacific Group on Money Laundering and the United Nations Office on Drugs and Crime were used to inform this research. This was then supplemented by reports from English and Spanish language newspapers as well as tertiary sources by academics working in Latin America, the Asia Pacific and further abroad. According to Burnham et al. (2004, p. 165) a simple timescale categorization can be used to distinguish the different types of sources used to inform research. This categorization stipulates that ‘primary sources’ consist only of evidence that was part of or produced by the event being studied. ‘Secondary sources’ relate to other evidence produced soon after the event, and finally ‘tertiary sources’ refers to work written after the event to reconstruct the event. Most sources used for this article can be classified as being secondary and tertiary sources. As a result of this analysis, we argue that brokers operate as important actors in these illicit networks by facilitating opportunities for new players to rapidly target markets well beyond their traditional geographical influence. In 2019, the growing influence of Latin American crime groups in the Asia Pacific has been felt most acutely in the Australian and New Zealand markets which have both experienced record-breaking seizures of Mexican produced methamphetamine and other narcotics originating from Latin America. The article also addresses the impact of methods used by large-scale sophisticated money-laundering networks which work in tandem with drug trafficking networks to move vast amounts of money across the Asia Pacific.