Thinking Pinoy: Death and the PH Drug Industry: from China to the Streets

August 28, 2016

Death and the PH Drug Industry: from China to the Streets

This is the story of how Filipinos get “shabulized”, from start to finish.

The debate over Philippine President Rodrigo Duterte’s war on drugs has been raging for at least two months now, with proponents of each side saying their approach is better than the other. The problem, however, is that no one has, so far, provided anyone a clear an comprehensive explanation about how the illegal shabu (meth) industry works.

Thus, in this article, ThinkingPinoy will explain the Shabu Business Process from supply, to manufacture, to distribution, to retail, and finally, to consumption, with the Philippine Shabu Market in mind.

The shabu business is just like any other manufacturing business that follows this basic process:

Almost everybody knows this. However, what many still don’t understand is HOW EXACTLY this process works in the context of Philippine shabu, and explaining this process is what I will do.

Let’s go.

Step 1: Supply

There are many ways to cook shabu, with the basic method using several nondescript ingredients, ethyl phenyl acetate, whose legality in the Philippines is still unclear to me, and one key precursor chemical: ephedrine.
Ephedrine is a controlled substance in the Philippines [PDEA]. One kilogram of ephedrine, after combining with other ingredients, can be converted into 750 grams of shabu [Inq].

Large-scale shabu cooking operations are usually the domain of drug cartels. When I wrote “Duterte’s Drug War, where is the logic in 400 Deaths?”, I said there are at least 11 key players in the Philippine Shabu Industry:
  • The Sinaloa Drug Cartel, hailing from Mexico [MT]
  • Nine Chinese Drug Cartels, hailing from Mainland China [Star]
  • The African Drug Cartel, hailing from the Western African Continent [MT]

In 2014, it was discovered that the Hong Kong-based 14K and Sun Yee On triads (Chinese Cartel) supply raw materials for use in the Sinaloa cartel’s shabu laboratories in the Philippines [SCMP].

Hong Kong is part of China, and China is the No. 1 source of drugs in the Philippines [Inq]. Chinese cartels find it easy to smuggle shabu precursors into the country because the Philippines’ archipelagic nature provides lots of points of entry, and law enforcement was lax.

The government has identified three key persons who facilitate this process:
  • Wu Tuan, aka Peter Co
  • Peter Lim, aka Jaguar, protected by Ret. PNP Gen. Marcelo Garbo
  • Herbert Colangco, bilibid inmate and PMPC Star Awardee (LOL)
Bilibid Prison has own Music Studio
LOL: Herbert Colangco, the convicted kidnapping gang leader who owns the fully-equipped music studio at the New Bilibid Prison, won the “New Male Recording Artist” award at the 2014 PMPC Star Awards for Music for his platinum-selling debut album titled “Herbert C: Kinabukasan”. Colangco shared the award with actor Richard Yap.

(Huwag lang i-like, i-share mo na rin!)

#DaangMatuwid #RoxasRobredo2016 #Duterte2016 #MIriam2016 #binay2016 #LabanPoe2016
Posted by Thinking Pinoy on Saturday, February 27, 2016
Yes, Colangco won the award WHILE IN PRISON.

Step 2: Manufacture

As long as you have ephedrine, manufacturing shabu is very easy: it does not require advanced training and all you need are household items that you can legally purchase from a supermarket, with the only major challenge being the ingredients’ flammability: a poorly-constructed, do-it-yourself shabu lab can explode [Inq].
Because cooking shabu is not very high-tech, setting up shabu labs is relatively easy. Hence, shabu labs have been found in many places in the Philippines, including:
  • Boats, e.g. the “floating shabu lab” found in Subic Bay [ABS]
  • Dug-up tunnels, e.g. the ones underneath the New Bilibid Prison [ABS. MT]
  • Abandoned houses, e.g. in Quezon City [Inq] or a posh village in Alabang [Inq]
Let’s recap:
  1. Chinese Cartels smuggle ingredients into the Philippines.
  2. Various local shabu labs, including those owned by the Mexican Sinaloa cartel, cook shabu.
Alright, the shabu is ready, what comes next?

Step 3: Distribution

The shabu final product is ready, so how does it reach the streets? This is where the second step comes in: shabu’s movement from the shabu labs to the hands of retailers.

Manufacturer-to-dealer logistics is pretty straightforward. What’s complicated however, are two things:
  1. Communication, i.e. coordination of their activities
  2. Law Enforcement

Just like regular citizens, drug syndicates communicate through mobile phones and the internet. This is the same reason why the government was in shock when it raided the New Bilibid Prison a few years ago and discovered cellular signal boosters inside the jail compound [GMA].It would have been easy for law enforcement agents to track the movements of these syndicates by tapping on their phone phone calls, but they are fraught with three key problems:

FIRST, wiretapped conversations are inadmissible as evidence in court per local laws [PCIJ]. This is the same reason why the Duterte cannot use as evidence the wiretapped conversation between Senator de Lima and her alleged driver-bodyguard-lover-bagman Ronnie Dayan, that was provided to him by foreign intelligence agents [GMA].

SECOND, SIM card registration is not required in the country [Inq], so drug dealers can simply toss an old SIM card, get a new one, and law enforcement agents who tap for leads will have to start all over.

THIRD, law enforcement agents themselves are involved in the drug trade [TP: PNP Generals; TP: Ooh… Ronnie; TP: 400 Deaths]. LGU officials are also involved in it, making manufacturer-to-dealer logistics a lot, lot easier [TP: Mayors].

Alright, so the shabu is now in the local wholesale drug dealer’s hands, so what happens next?

Step 4: Retail

Wholesale drug dealers then hand over shabu to smaller scale drug pushers (retailer, “tulak”), similar to the relationship between a large insurance company and a lowly insurance agent.

But there’s a major difference.

According to the US Justice Department’s Bureau of Justice Statistics (BJS) [BJS 1992]:

A reputation for violence is the dealer’s best guarantee that his business transactions will be accomplished as agreed upon… Those who do not pay what they owe can expect to be disciplined violently or killed… Dealers often fail to pay because they were cheated or robbed or the drugs and/or money was confiscated by law enforcement.

When drug lords give a drug pusher shabu to sell on the streets, they expect that shabu to be sold entirely. Drug lords expect to be paid after a certain period and they do not accept returns. Drug lords kill street pushers who fail to meet their sales quota to strike fear on other street pushers. The fear motivates the surviving pushers.

You sell, or you die [ViceNews].

The fight against drugs is one of Duterte’s core campaign platforms, and his well-publicized crackdown on shabu caused demand to go down.

For example, in June 2016, demand for narcotics dropped in Naga City in anticipation of the Duterte’s 30 June 2016 inauguration [ABS].

A similar incident was report in the Cordilleras a month later, where Philippine Drug Enforcement Agency (PDEA Regional Director Juvenal Azurin said in Filipino:
“There may be fewer people who want to buy (shabu), or the dealers want the trade to be faster to avoid being caught and for some other reasons. [Star]”

Again, what happens if a lowly drug pusher fails to meet his sales quota? He dies.

Step 5: Consumption

After a certain point, many shabu consumers or adiks (addicts) run out of personal funds to sustain their habit. This is when they resort to two things:
  1. Stealing, which we are all-too-familiar with, or worse,
  2. Becoming a drug pusher themselves.

Again, what happens when an addict-turned-pusher fails to meet his sales quota? He dies.

At this point, you now have a working idea about how large-scale shabu business works, but there’s one more thing that we haven’t discussed yet: Expansion and Stabilization.

Step 6: Expansion-Stabilization 

Shabu is a business. And just like any other business, they seek to expand operations as soon as they have established their core operations (i.e. Steps 1 to 5).

So how do drug syndicates do this?

FIRST, by expanding overseas.

Sinaloa is the most powerful and influential drug syndicate in Mexico today.

Established in the mid-1990s, the Mexican Sinaloa Cartel first gained control of the Mexican state of Sinaloa, then expanded to five other Mexican States. Afterwards, it established operations across the United States. After dominating North America, it set up operations in South America, West Africa, and Europe [Chalk 2012].

After North America, South America, Africa, and Europe, where else would it go? Asia.

But where in Asia?
  • Alcohol in the Middle East (West Asia) is largely banned [Matthee 2014], so just imagine the penalties for shabu. 
  • North Asia is sparsely populated and the logistics is messy because of the lack of viable sea routes.
  • East Asia (Japan, China, and South Korea) have well-developed and draconian policies.
  •  South Asia has weaker governments, but the general population is too poor to afford shabu.

What's left? Southeast Asia, where law enforcement is lax and the economies are booming.

Drug smuggling in Southeast Asia has been on the rise in as early as 2012 [Globe].

In 2013, authorities confirmed that the dreaded Mexican Sinaloa Drug Cartel has arrived in the Philippines [ABS]. Just last year, PDEA operatives arrested Horacio Hernandez in Makati City. Hernandez is third in command to the Sinaloa Drug Cartel [Vice].

SECOND, by taking over “territories”.
When a drug syndicate enters a geographic area, its operations may encounter resistance from other drug syndicates who are already operating in the same territory. Overlapping operations of rival drug syndicates bring rise to “turf wars”, where rival syndicates kill each other off to gain new territory or to protect their own.
Drug lords kill each other to gain territory
Reporter: "And you're ready to kill to protect your business?"

Pusher: "Yes, that has been happening."

Posted by Thinking Pinoy on Saturday, August 27, 2016
Let’s see how the the Sinaloa Cartel works [DailyMail].

In 2015, Israel Hinosa revealed he killed members of rival drug cartels under orders from the top honchos of the Sinaloa Drug Cartel, for as little as $30 (Php 1,500) per assignment. He was addicted to heroin and crystal meth, and he would indulge in these drugs to numb post-assassination psychological trauma.

Hinosa was a “sicario”, a desperate individual who became ruthless killers for the narcotrafficking industry and in his case, for the Sinaloa Cartel. Sicarios were an integral part of the mass murders ensuing from the Sinaloa Cartel’s declaration war on the Juarez Cartel in 2007, where more than 20,000 people in Ciudad Juarez, Mexico lost their lives in the next five years.

Hence, we ask: Do we have sicarios in the Philippines?

Yes, we do [MB].

Let’s watch the video clip shown below:
Drug Pushers and Turf Wars
Drug Pusher: If they want to take over our territory, we can't just allow them to get it as easy as that.

Original Source: Vice News;
Posted by Thinking Pinoy on Saturday, August 27, 2016

THIRD, they connive with law enforcement.
We all know this.

If you want to know more, you can read the following articles I previously wrote:

And what happens when a lowly drug dealer wants to surrender or possibly become a state witness against a powerful government official? He dies.

Duterte's War on Drugs

Duterte previously asserted that most of the shabu in the Philippines come from Chinese Cartels whose base is, obviously, in China [SCMP]. Because he has zero authority over the China, he has to cooperate with the Chinese government in this regard. As to how the Chinese government will deal with is, is a totally different story.

This is the same reason why Duterte said, ““Hey, I have to invade a country to arrest the drug lords [Inq]”.

Given these, what can Duterte do?

Looking at Steps 1 to 5, we can see that while Step 1 might be out of the government’s hands, the remaining steps are done within the country, i.e. within the government’s jurisdiction.

This is the same “drug apparatus” that Duterte has been referring to [MB].

That is, even if the government exercises no power over the supply of raw materials, it still has power to destroy manufacturing plants, distribution facilities, retail networks and most importantly, the corrupt public officials who make all of them possible.

However, the disruption of shabu’s business process means death. As I have explained in the previous sections:
  • If a drug dealers fails to meets his quota, someone dies.
  • If a drug dealer wants to gain new territory, someone dies.
  • If he wants to protect his own territory, someone dies.
  • If he wants to turn himself in or become a state witness, someone dies.
No amount of government regulation will prevent drug dealers from killing other, precisely because they operate outside government control. And what's the only way to prevent them from killing each other? By stopping the drug war, but that also means we will be letting them kill the rest of the population instead.

Legalization of shabu? Of course not. The oft-cited Portuguese drug decriminalization is about cocaine and heroin, which work VERY DIFFERENTLY from shabu.

No, shabu decriminalization will not work either.

Besides, if decriminalization was even feasible, is that the executive's problem? It's the legislature who should be doing that. It is DE LIMA who should be doing that.

ThinkingPinoy's Takeaways

Duterte’s war on drugs has been encountering opposition from local and international media, with the latter blaming the alleged drug-related deaths – even all of the vigilante killings – solely on the administration. The problem, however, is that mainstream media’s reasoning is too simplistic, as it totally ignore the gruesome reality that I have just explained.

The recently concluded Senate Hearing on Extrajudicial Killings is a testament to that. We saw two days’ worth of grandstanding on the part of Senator Leila de Lima and CHR Chairman Chito Gascon, but not a single testimony or piece of evidence showing that the State itself sanctioned extrajudicial killings or even tolerated it [TP: Gascon; TP: Leni Robredo].

Mainstream media wants the killings to stop, but they provide no viable alternatives.

I guess mainstream media's oligarch owners simply cannot bear the idea that a common man with a heart for the people is now the most powerful Filipino... or are our mainstream journalists on the payroll of drug lords themselves? [ThinkingPinoy]



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