Proceedings of the Special Committee on
Illegal Drugs

Issue 3 - Evidence for May 28 - Morning Session


OTTAWA, Monday, May 28, 2001

The Special Senate Committee on Illegal Drugs met this day at 9:10 a.m. to reassess Canada's anti-drug legislation and policies.

Senator Colin Kenny (Deputy Chairman) in the Chair.

[English]

The Deputy Chairman: Honourable senators, seeing a quorum, I call the meeting to order. The Chairman is unable to be here today as he is presiding over a meeting of the committee on science and technology at the NATO Parliamentary Assembly, in Vilnius. He sends his regrets to the witnesses and members of the committee.

Today we are continuing the work of this committee which was authorized by the Senate, and that is to study and report on Canadian policies concerning cannabis and its derivatives, the effectiveness of those policies, and alternative approaches. Further, the committee will be examining the international context of policies regarding cannabis, the health and social effects of cannabis, and the potential effects of those policies on other policies. The committee is aiming to table its report by August of 2002.

In the course of its deliberations in preparing to draft its report, the committee will consult with eminent experts in a variety of fields of study and professions, as well as the Canadian public.

Our first witness today is Dr. Peter Cohen. Dr. Cohen first entered the field of drug research in 1980 by way of a course in sociology on the history of social problems. In his view, human construction of cultures and societies can be partly understood by studying what a society defines as a problem and why. Since then, he has studied the so-called drug problem as one of the many social constructions of western culture, based on complex prejudice and ideology. His main interest is to conduct empirical research on typical drug myths such as those relating to addiction to cocaine or to cannabis as a stepping stone to more dangerous drugs. Large-scale epidemiological drug use research in the city of Amsterdam and later in the Netherlands as a whole has been conducted. Dr. Cohen is currently Director of the Centre for Drug Research at the School of Social Science, University of Amsterdam, doing research funded mostly by the Dutch Ministry of Health.

Among his numerous publications on drugs, which may be found at the CEDRO Web site - www.frw.uva.nl/cedro - are: Drugs as a social construct, (1990); Re-thinking drug control policy. Historical perspectives and conceptual tools (1994); The case of the two Dutch drug policy commissions. An exercise in harm reduction 1968-1976 (1994); Cannabis use, a stepping stone to other drugs? The case of Amsterdam (1996); Shifting the main purposes of drug control: From suppression to regulation of use. Reduction of risks as the new focus for drug policy (1998); and, Is the addiction doctor the voodoo priest of Western man? (2000).

Welcome to the Senate, Dr. Cohen. Please proceed with your presentation and we will follow with questions.

Professor Peter Cohen, Director, Centre for Drug Research, School of Social Science, University of Amsterdam: Honourable senators, I am pleased to be here. I hope to be able to answer your questions about the situation in the Netherlands.

The research into the use of drugs is complex because not only is the definition of drugs rather unclear, but also there is no standard for the way in which we describe the use of drugs. Therefore, the use of drugs is often described in qualitative terms and it is difficult to quantify the description of drug use.

Another complexity in drug use research is deciding which groups will form the basis of the research. It is easy to look at the alcohol use of people who live in the streets. You will find that the function and usage of alcohol in that group is different from the use of alcohol by people who have regular jobs and who drink wine with their meals. Different groups can use the same drug in so many different ways, and it can be functional within so many different lifestyles. It is easy to understand that among those who research drug use there is much misunderstanding about what actually happens and the effects of drugs.

Drugs are used for particular functions within particular contexts that are sometimes culturally defined and sometimes economically defined. For instance, cocaine use in poverty- stricken areas of American cities is completely different from cocaine use among rich stockbrokers. The functions and rules for the use of that substance are completely different. It is easy to understand that so much misunderstanding exists in the world about drugs; their effects both positive and negative.

In Amsterdam, from the beginning of our research, we have tried to construct representative samples of drug users. We did not go to the prisons to single out particular types of drug users who were prisoners; and we did not go to clinics to look at particular subgroups of people with drug problems. We did go into the population to try to construct large representative samples of drug users in order to be able to view how most users of drugs, whether cocaine, cannabis, alcohol or amphetamines, use those drugs, how they construct their rules of control around that, how they describe their own careers, and what they say about the advantages and disadvantages of the different substances. At the heart of good drug research is where you look, how you account for your sample, and how good your sample is.

It is possible to make a million different observations on the use of drugs depending on where you look. Always bear in mind that whenever people say something about the effects of the drug, they may be right, but the ability to generalize those observations may be very limited.

Today I would like to discuss with you the effects of the decriminalization of drug use on the general population. That is where my expertise lies and I believe it is extremely important to consider that area.

[Translation]

Senator Poulin: As you know, Mr. Cohen, the issue being studied by the Special Senate Committee on Illegal Drugs is the focus of attention throughout the world at the moment, and there are a number of reasons for that.

First of all, I would like you to take the time to summarize the policy currently in effect in your country so that we can properly understand your reference scheme.

[English]

Mr. Cohen: You asked me to give a short resumé of the present-day Dutch policies in the area of drugs. I will try to do that although it is a rather long and complicated history.

In the early 1960s, something quite new happened in Amsterdam. Young people started to smoke marijuana. Before the 1960s, that kind of habit was not observed except, perhaps, in the case of some musicians. It was not a fashionable fad until the early 1960s. The first reaction of the Dutch government was negative. In fact, they were quite alarmed.

The Amsterdam health system included doctors who were working for the Municipal Health Service, a kind of institution created in the 1920s in the Netherlands to cater for the health care of people who would not easily enter the primary health care system. These doctors were the first to observe this drug use among young people. They went to the parks where they had their little parties and played music. From the beginning we had experts who were looking with different eyes at the drug use of the young people; they took a less conservative view from the start. The doctors mixed with the young people and watched what was happening.

In the late 1960s, when the Dutch government decided to establish a commission to examine the drug use problem, medical people and sociologists were part of that commission. They were already knowledgeable about the drug use in certain groups. They had a far less fearful attitude toward drug use. They saw that many of the young users simply drifted out of marijuana use when they got older. We found that again later when we did systematic studies into cannabis-use careers.

At the first committee hearing, which was presided over by a criminologist, the general feeling was that most of these drug users would be extra-drug users quite soon. In the time that they would be using these drugs, it would be more harmful for them to be sucked into the legal system and penalized by fines or even prison sentences. They tried to come up with solutions that would keep these people out of the judicial system.

This was a rather revolutionary conclusion, but it was taken over and shared by the government commission which reported in 1972, just one year before the famous Le Dain commission reported in Canada. The Le Dain commission and the Baan committee in the Netherlands were similar in their conclusions: Try to decriminalize drug use during the short period that it happens so that these people will not be burdened with the heavy social consequences of a prison sentence or even worse.

In 1972, the Baan committee reported and there was already some public discussion going on about decriminalization. The Baan committee recommended that we decriminalize all personal drug use, not only cannabis, so that the usual period of drug use, being only a few years, would not be disadvantageous to the users.

Basically, that is the story of what happened in the Netherlands. Individual drug use and small-time dealing is never prosecuted. The decriminalization of cannabis has gone further than the decriminalization of other drug use because, under Dutch law, the distribution of cannabis-type drugs became more open, but also more controlled.

After the 1970s and the early 1980s, people started their small hashish and marijuana shops, which were called coffee shops for some reason. Now we have about 850 shops where the public can come in and buy a quantity of up to five grams of marijuana or hashish, which is an amount that most people will not use in a week or even a month. The amount used to be 30 grams, but that was diminished because of pressure from our powerful neigh bours. The shopkeeper is allowed to have a stock of 500 grams of these substances in the shop.

This has resulted in a kind of cannabis market which is very developed in the Netherlands. Many varieties are offered, from very mild to very high potency. It is somewhat like alcohol which varies from low-alcohol beers to whiskeys of 40 per cent alcohol or more. The whole gamut of marijuana-type drugs is sold in these shops.

The people who like this type of substance - which is only about 15 to 18 per cent of the Dutch population - go to these shops to buy their cannabis. The age at which people can enter these shops was raised in 1995 from 16 to 18. That was also as a result of pressure, mainly from France.

There is discussion about lowering the age again because people between 16 and 18 who use this substance - of which there are not so many - must now go to the streets and buy from non-regulated sources. That is not considered to be an advantage. Mayors in the Netherlands are asking the government to lower the age back to 16 which is what it was between the 1970s and 1995.

Would you like me to go into the treatment policies in the Netherlands?

Senator Poulin: I will leave that area for my colleagues.

You have already touched, Professor Cohen, on my second question. Here in North America we are hearing much good news about the strength of the new European Union. You spoke about the influence of certain of your neighbours. Could you speak to us about the relationship between the Dutch policy and practices and the policies and practices of other countries which are part of the European Union? Is there a gap? Is there a link? Are there common tables where the policies and practices are discussed?

Mr. Cohen: There is a big gap. The gap is becoming smaller, but it is still in existence. The acts of the Dutch government, and later all the municipalities, to put into place a system of rules within which people could buy and have completely open access to cannabis-type drugs have created a unique set of rules in the European Union. It does not exist in any other country.

Since the 1970s, the Dutch have often been accused, with periodical phases of intensity, of poisoning the youth of other countries. Some young people would come to the Netherlands to go to these shops to buy cannabis-type drugs. This was considered a very bad influence on the youth of other countries. Slowly now, however, the governments in other countries, mainly Spain, Italy, Greece, Germany and France are recognizing that their people between 15 and 50 will use cannabis-type drugs and that it is not so much dependent on the availability of them in the Netherlands. They recognize that it is an international phenomenon not caused by the existence of this system in the Netherlands.

The Belgians have now gone further than all of these others countries and are approaching the Dutch system.

In Germany, there is a split between the north and south. The northern states in federal Germany would like to go further in the direction that the Netherlands has taken, but they cannot find majority acceptance in the government because the southern states do not want to go in that direction. In the north of Germany, almost no cannabis-related arrests are made, but in the south there are many. Germany is not really an entity in this area of policy.

The French have moved quite considerably during the last five years from being the most active and negative criticizers of the Netherlands to being curious about it. Two official groups of observers have come to the Netherlands to look at the Dutch drug policy. There is now much contact between Dutch and French drug researchers, and that is which is all organized by the French government. The present French Minister of Health has asked for studies to be done in France to see how far Dutch-type policies could be realized within France. The sharp enmity between France and the Netherlands that caused some of the changes in the Dutch drug policy has changed completely, and with surprising speed.

No European countries are repeating the very sharp criticisms we have experienced over the last 15 years. Clearly, Europe is slowly, but in my mind certainly, going into a phase of decriminalization of cannabis-type drugs. The speed at which they do this, and also the type of development that they will choose for this, will be different because the cultures are so different.

The Swiss government has come forward with a highly detailed proposal of law which I have just finished studying. The Swiss government's proposal goes much further than Dutch drug policy ever went. It not only decriminalizes consumption and access to the drug, but it also tries to create rules for the production of cannabis-type substances, their distribution, their stocking, et cetera. This type of legalization, which goes much further than decriminalization, is already starting in Europe. Actually, there has been very little negative comment about this proposal of law from the Swiss government, and I think it can act as an important model for other governments to consider.

Once again, over the last 20 years, the Dutch type of drug policy, which was mainly defined by no police intervention in individual drug use, has been criticized tremendously, and this has perhaps caused a kind of disinterest in the present Dutch government in going further, although I am sure that the population in the Netherlands is ready is go further into a direction of partial or even complete legalization, as well as the production and distribution aspects of cannabis-type drugs.

Senator Poulin: My last question, Professor Cohen, deals with the same issue as it relates to a North American perspective. When you spoke about the 1960s in the Netherlands, it reminded me of how Canada had its eyes on California at that time. They went through the same phenomenon of a subculture making use of marijuana, with the powers that be often closing their eyes to that practice. Moreover, the United States went through a period of prohibition to which Canada did not subscribe although, historically, Canada has been a very strong part of North America and has always looked south in terms of trade, culture and practices.

From a European perspective, how would you assess the influence of the United States on Canadian policy, and how do you see the closeness or the gap within the European Union countries having an impact on North America?

Mr. Cohen: We all have the problem with North America. In my private encounters with people, I always say that the Americans are the "Taliban" of drug policy. We must deal with them. They are a powerful ally. They try to exert quite a lot of influence on drug policy in the Netherlands. I have never seen much of a result from that, but they have always tried to do that. The American foreign ministry has invited me to visit a few times, and I have always experienced these visits as very well-organized propaganda tours. They do this with many other people. They invite hundreds of police people, judges, prosecutors, treatment people and doctors into the country and they try to convince them that their policies are the best on earth. Up until now, they have had very poor results in the Netherlands.

Canada did not take the same direction as the United States of America, for instance, in relation to alcohol. When the ideas about prohibition of alcohol and drugs were designed in the 19th century, they erupted into a full prohibition of alcohol and other drugs in the United States of America. For its own good reasons, Canada never followed that example of alcohol prohibition. Using the same logic one could say, "Let us stop following the example of the Americans in relation to the prohibition of other substances, because basically the same questions and the same solutions apply. "

The prohibition of the use of alcohol and drugs provedto be totally destructive during the prohibition between 1920 and 1933. When the Americans tried it, it resulted in the most atrocious social consequences for the country as a whole, and the United States has been forced to retreat from that strategy. More and more countries are recognizing that the prohibition of other drugs has the same disastrous consequences for their social system as the prohibition of alcohol during those times, and they are asking themselves the question, "What shall we do?"

I can see that your proximity to the United States of America introduces a particular problem that we do not have. However, we have other powerful neighbours that are five to ten times as big as the Netherlands and which have been quite aggressive in relation to Dutch drug policy. Defending the basic reasons for our drug policy against all these attacks has ultimately resulted in our neighbours changing more than we have. More and more, people are seeing that this strategy of prohibition is more negative in its effects.

In the international globalization of affairs, people buy not only American cars but also Japanese cars and Italian cars, and we have fruits from all over the world. By the same token, drugs from all over the world will enter lifestyles in our highly developed and very rich democracies, and it slowly becomes impossible to stop this process of renovation of how people want to live.

For many people in the Netherlands, the reasons to prohibit these drugs were created in the 19th century, in the same time that masturbation was seen as extremely negative and destructive. This is very old language and age-old thinking. These reasons have become obsolete for most people. Most people no longer know why these drugs were prohibited in first place. Experienced cocaine users in the city of Amsterdam use this drug with an ease and control that has nothing to do with the original stories that made people sensitive to its prohibition. Things have changed enormously.

Although exotic drugs will not become popular in the next 50 years, their use will increase. When you speak about millions of people transgressing a law that cannot be maintained, something must break or change.

Senator Rossiter: Thank you for coming, Professor Cohen. We appreciate your testimony. I would like to follow up on Senator Poulin's question about treatment policies in the Netherlands.

Mr. Cohen: Would you like me to explain some of these policies?

Senator Rossiter: Please do.

Mr. Cohen: The number of people who go into drug treatment in the Netherlands is rather low. It is estimated that somewhere between 25,000 and 35,000 need some type of drug treatment, of which some 15,000 have some treatment. The precise figures can be found on several Web sites in the Netherlands which I will be glad to give you.

The main treatment that was initiated in the 1970s was around the repetitive and frequent use of heroin. Heroin was introduced in 1972 by soldiers from Vietnam. They came to the Netherlands for their four weeks or six weeks of free time, and they brought heroin with them. At that time it was unknown in the Netherlands. Opium users in the Netherlands shifted to heroin in 1972, and most of this use was intravenously. This came as a new fad to the Netherlands. People did not know how to do this well, and it created all types of problems.

Treatment settings were designed to wean these people away from heroin. There was a drug-free treatment atmosphere in the design of treatment forms that had to be created from scratch because there was nothing available.

Senator Rossiter: Did people go into these programs of their own free will?

Mr. Cohen: Mostly they did, yes.

These treatment forms became unpopular because the kind of treatment ideology was so harsh on these people that they escaped. The first methadone treatment was experimented with in 1968 by a young doctor in Amsterdam. Over the 1970s, the availability of methadone increased somewhat until, in the early 1980s, it became the staple of drug treatment, trying not to get people off their opiates but to make it possible for them to live a life with opiates; taking them out of the criminal market, the heroin market, and giving them methadone. In the beginning, there was only low dosage methadone in the Dutch treatment system. Over time, it increased to include high dosage methadone. It is still the main treatment that is given to heavy drug users in the Netherlands, together with some economic and other support. For instance, mothers who have problems with the education of their kids will get assistance. Housing assistance is also available. All kind of social assistance is available to these people, although there are not many of them.

For the past two years, a new form of treatment called heroin maintenance has been made available. If people do not want to stop their heroin use, and methadone does provide give sufficient help, they can legally obtain heroin. Most heroin users in the Netherlands are now heroin smokers. The heroin available on the black market is the base form of heroin which can only be smoked. Little intravenous use is left. People in the heroin maintenance system can get both IV heroin and smokable heroin. Both varieties are prepared for these users. Currently 750 people use the heroin maintenance system. If it goes well, and it has been going well so far, then this system will be slowly expanded.

However, real life has changed. First, opiates have becomeless popular, even among this particular group. Second, the price of heroin in the Netherlands is now so low - between 30 and50 guilders per gram, or between Can. $20 and $30 per gram - that it is hard for treatment heroin to compete with street heroin. There is almost no threat to the dominance of particular circles in the Netherlands who own the heroin black market, so that market is stable in price and in quality. That means we do not see the kinds of accidents that result from highly variable levels ofheroin purity. The heroin is almost always the same purity at 30 to 40 per cent.

The average age of people in the Dutch treatment system is increasing by almost one year each year. That means that the marginalized lifestyle of drug users, living on the streets or with friends, is going down a lot. It was never a very popular lifestyle, but we do not see many new people going into it to replace the older ones. The oldest people now in the Dutch treatment system are approaching 60. The Minister of Health, together with some municipalities, is now preparing a policy paper, exploring whether special old-age homes should be provided for this particular group because they mix very poorly in the normal old-age homes in the Netherlands. Their lifestyles have been so different during their whole lives that it may be a good idea to give them their own old ages homes where they can be together. It is important to note that many of them have survived.

That is my brief summary of Dutch treatment.

Senator Rossiter: It is amazing to consider that the black market, as you say, is almost policing itself with the quality of its product. Does that happen anywhere else?

Mr. Cohen: I do not really know. I think the German drug market is dominated by the same groups as the Dutch drug market. It may happen there, but that is not one of my specialities. Perhaps the next witness will know more about that.

Senator Rossiter:You state in your treatise here:

A serious pre-condition for improving upon present drug controls has to be the loosening of the suffocating grip of international drug treaties. These treaties have to be reformed and probably ultimately abandoned to make room for local differentiation of drug policy.

How would that come about? What force would make the principal parties abandon their positions?

Mr. Cohen: I do not know. At the moment, in the Netherlands, people are speaking again of trying to change the Dutch participation in the global drug treaties so that it will be more possible that Dutch developments in drug policy will happen. You should not forget that there is almost no global treaty system that is so well guarded and so severe in its expulsion of any deviation as these drug treaties. As I said, they are a product ofthe 19th century. They were thought up and designed inthe 19th century and put into practice in the early 20th century. The bureaucracies that guard these treaties have grown and grown. The treaties are made more precise and more severe almost every year.

I consider these treaties part of a policy of suffocation for any deviation. There is almost no state or human behaviour which is governed by such severe global treaties as drug use and drug trafficking. Under these treaties, even local traditions such as the chewing of coca leaf is impossible, although people have been doing that for thousands of years.

We must abandon the idea that drug policy can come from one set of general rules. Nations should at least regain their autonomy in this area by saying, "Though this is a good set of rules to consider, some of the rules are impractical and costly for our population, so we must deviate from them." The Swiss, who never undersigned New York, 1961, have maximum freedom in doing so. They exercise this freedom now. Individual countries could consider saying, on all the rules about cannabis, "We will put a question mark next to them, and we will simply decide to deviate from this path for the next 10 or 20 or 30 years and see what happens."

If more countries go in that direction, then at a certain moment the UN must decide to relax its iron grip on global drug treaties to enable nations to escape their destructive force. I see these treaties as a real destructive force against local autonomy and against inventiveness and creativity in solving all these problems.

Senator Banks: Professor Cohen, thank you for coming.

You told us that our institutional attitudes in dealing with drugs in Canada, and with cannabis in particular, are based on mythology. Do you have an opinion on why that is so? You mentioned the 19th-century attitudes which helped to develop our drug policies. On what are those attitudes based? They must be based on something because many people have subscribed to them. In this country, most of us are still brought up with the mindset that drugs are bad, period, end of statement, no parentheses, no modification: Drugs are bad. Yet, examination reveals, as you said, that many cultures in the world have used drugs of one kind or another over centuries. That does not make drug use good, either. Many cultures used to settle differences by killing each other. That does not make it okay.

On what mythological or other foundation, is our tendency to prohibit drugs based?

Mr. Cohen: This is one of my hobbies and it is very dangerous to ask questions about this because, once I start talking about it, it is difficult to stop me. I will try to restrain myself.

I have just published an article that deals with this problem. The title of the publication is, Is the addiction doctor the voodoo priest of Western man? I try to answer this question. Why, suddenly, in the 17th and 18th centuries, did all these ideologies abound in the individual who must be free-governing, self-propel ling and self-navigating? Where do all these ideas come from? My thought up to now, although I changed when I researched the question further, was that the root of all these ideas about the individual are based in the Reformation.

Following the Renaissance in Europe we had the Reformation, wherein the new ideology was that people had an individual relationship to God. They were now able to seek salvation for themselves, rather than through the church as an instrument for salvation. An individual relationship between man and God would be possible. This gave birth to theories of the individual as a self-controlled, autonomous and self-responsible person that we have until now. As well, there were diagnosed forces that would take people away from their individual relationship with God, or with the world around them, in the sense that they were autonomous.

During the Victorian period, the basic force that would deviate people from their course would be sexuality. We have emerged from of a period of sexual phobia that lingered for a long time, in which sexuality was seen as a force that would take people in its grip and make them bad people. Therefore, we had to protect youngsters, certainly, and older people from the seductions of sexuality. Pornography became prohibited, intercourse outside marriage became something looked down upon - a taboo. Sexuality was seen as a significant enemy of the Western individual. At the same time, ideas started to be born about alcohol as an enormous force that would take people's individuality away, as well as their own willpower, their own possibility to be himself or herself.

Senator Banks: It does that.

Mr. Cohen: It does it to a certain degree in some people, but for most people it does not. Most people drink alcohol in a way that is recreational, which emphasizes pleasures they already enjoy. Only under certain circumstances can they take in so much alcohol that they liberate themselves - and I see it as a kind of liberation - of individual constraint.

Drugs and alcohol were viewed, like sexuality, as forces that would threaten the autonomy of the individual, and had to be banned. This attribution of the enormous power of alcohol and drugs is a product of the 18th century and certainly
the 19th century.

When you look at this phenomenon with an empirical eye, when you look at drug users and alcohol users as they exist, you can see that for most people the use of alcohol and drugs is not at all this terrible force that takes away their individuality. On the contrary, it is one of their adaptations that makes it more possible for them to live the type of lifestyle that they choose for themselves.

You can look at drugs from two different perspectives. You can look at the worst case of the alcoholic in the street who does not seem to have a useful life, and you can say, "Look at what alcohol does." However, you can also look at the fact that there are far more alcohol users who do not show this pattern of use, and this functionality of use, and use alcohol in a completely integrated lifestyle. The same is true of drugs.

An empirical examination of the theory that the force of drugs and alcohol takes away the individual power of autonomy and self-determination reveals that most people simply do not behave that way when they use these drugs.

Senator Banks: We have heard from detractors and critics of the system in the Netherlands that among its effects is a considerably increased use by a larger proportion of the population of cannabis in particular and what we call illegal drugs in general. In your experience, is that true?

Mr. Cohen: In my experience, it is not true. The data from Germany and France indicates the national levels are somewhat similar, which is around 16 per cent of lifetime experience with cannabis. That applies to Germany, France and the Netherlands.

One problem is that you need costly national surveys to measure drug use in a meaningful way. The other problem is that within a country there can exist considerable differences. In a city like Amsterdam, where many artists, actors, financial people and people who work in publicity live, the proportion of people who have been using cannabis is approximately 40 per cent. That is about three times the national average. In the rural areas of the Netherlands about 10 to 12 per cent of people have used cannabis.

We have designed a way of looking at cannabis use and drug use in the Netherlands by defining seven different samples of the population. We not only look in big cities, but we also construct samples of municipalities of lower address density. Therefore, we are able examine cannabis use in the stratum of lowest density municipalities in the Netherlands, and we then continue up the scale until we reach the highest density areas in the country - areas with more than 2500 addresses per square kilometre. We find that the denser the area, the higher the probability that people will have used drugs.

In terms of our national averages, we are in the same league as Germany and France. We are considerably lower than the U.K. or Denmark, and much lower than the U.S.A. The U.S.A. has levels of drug use that are double to triple the levels in the Netherlands. I do not say that this is because of drug policy, because it is my firm opinion that drug policy in itself has very little influence on the number of people who use drugs or who do not use drugs.

The incredibly easy availability of cannabis type drugs in the Netherlands has not at all changed the number of people who want to use it, because the decision to use it is based on the cultural composition of the population, who your friends are, the image of drugs and the economic situation of individuals. It does not matter what the government thinks about these drugs.

I do not see any epidemiological evidence at all for the general observation that drug policy in the Netherlands has increased the number of people using drugs.

Senator Banks: As a corollary to that, we have also been told by many witnesses that cannabis is a gateway drug, that use of cannabis may be because it simply leads to the next drug up the scale, or maybe, because of associations with people who provide it who are mostly in the criminal element, the use of cannabis leads to the use of harder drugs.

Do you personally believe that cannabis is addictive? Do you find in the Dutch experience that the ease of access to cannabis has led to those people who have that access using progressively harder drugs?

Mr. Cohen: Your question about whether cannabis use is addictive is difficult for me to answer because the definition of "addiction" is so vague.

Senator Banks: Physiologically addictive.

Mr. Cohen: Physiologically, it is not addictive.

On the second question, we have done precise computations to see if this gateway theory applies to Amsterdam. Amsterdam is the city in the Netherlands where drugs are most easily available, their prices are lowest, and it has the culture in which drugs are most accepted. As we say, drugs are most "inculturated" in the city of Amsterdam. We have examined our large samples of population to determine whether those who have ever used cannabis also use the other drugs.

We have several different definitions of what a gateway is because, if you want to research it, you must quantify what you mean by "gateway." We have said we would simply make the hypothesis that if cannabis really is a gateway drug, at least50 per cent or 75 per cent of the people who use it or have used it must also have at least a minimum experience with other drugs.

We found that of all lifetime cannabis users in the city of Amsterdam, just a little over 20 per cent also have lifetime experience with cocaine, which is the next most popular drug on the scale of popularity. Almost 80 per cent of all lifetime users of cannabis have no experience with cocaine at all, although cocaine is easily available in the city and not very expensive. Most users of cannabis do not, for some reason or another, decide to also be curious about cocaine.

Heroin use in the city of Amsterdam has always been very low. It is almost immeasurably low among cannabis users, but we can measure a few per cent.

The nice thing about the gateway theory is that at least it is a theory that is testable. You can say, "If there is a gateway phenomenon, we should be able to observe this in users of cannabis." In the city of Amsterdam, where access to cannabis is as easy as access to bread in Ottawa, we do not find this gateway phenomenon to a high level, but we find some level of it.

As I said, of all cannabis users, 22 per cent have ever used cocaine. However, when you start to analyze their cocaine experience, most of this experience is floating. People want to have tried it. They have heard about it, and they want to try it, but nine out of ten cocaine users never use more than an experimental amount of it.

I do not know if a gateway phenomenon would exist in Canada, but it is perfectly possible to check on this because, in Canada, epidemiological data is collected about drug use in the population. It should be easy for your committee to ask, for instance, the Addiction Research Foundation in Toronto to look into this phenomenon and to find out to what degree and how it exists.

Senator Kinsella: Is there literature on the relationship of public taxation to the use of leisure drugs? Are those legal drugs that are available in the coffee shops subject to tax in the Netherlands?

Mr. Cohen: The Dutch government wanted to put value-added tax on all sales of cannabis-type drugs in the coffee shops, but some sellers said that they found that to be unjust. They said that they wanted to pay value-added tax, but they also wanted to have a fully legal status. They said that, as long as they do not have a fully legal status, which has all kind of disadvantages for them as sellers, they would not be willing to pay VAT. One seller took his complaint against the Dutch state to a EU judge in Strasbourg, to the court where you can make a complaint against states. The Dutch authorities lost that action. From that moment on, the coffee shop owners have paid only personal income tax on the gains from their shops. There is no value-added tax, or a special tax, as we know it, for instance, in the Netherlands on alcohol. You pay special taxes on that substance.

Senator Kinsella: Is there anything in the literature that examines this question from a public policy standpoint? We know the cost of dealing with the leisure use of drugs from the standpoint of public education. You mentioned counselling. Of course, there is a cost attached to counselling, et cetera. Has anyone considered imposing an excise tax or a special tax on the sale of these substances, together with the GST or a VAT?

Our chairman introduced in Parliament - and it was passed by the Senate - the innovative idea of raising revenue on tobacco sales for the development of educational programs. A special foundation will be established. As a sociologist, I take it your hypothesis is that drugs are here to stay, and that we have not been very successful in trying to understand the nature or the essence of drugs and the psychology and sociology of the human behaviours that relate to drugs. What if we change the paradigm? If there are social costs associated with usage, then the product itself ought to generate the revenue to deal with that, and that means t some form of taxation. Has there been reflection on this?

Mr. Cohen: The Australians are now working on a proposal for taxation on cannabis-type drugs. Once you take the course of normalizing the consumption of cannabis-type drugs - the view that there are types of behaviours that we want to put legal constraints around but no longer prohibit - I think that there is no reason to treat them differently from the way you treat tobacco or alcohol.

The taxation systems that various countries have on tobacco and alcohol are different. When Canada decides that cannabis is no longer prohibited, it may use as a model for the taxation of cannabis the taxation regime it uses on tobacco pharmaceutical drugs. However, there are many options.

If you want to use tax as an instrument to limit use, that is a whole different story. Up to a certain level, that may be successful, but over a certain level you invite all types of secondary distribution systems to develop, with all their costs. Taxation to a certain level would be considered normal and natural; over a certain level, the population would certainly try to dive underneath and find other supplies.

Senator Banks: Professor Cohen, you said earlier that the United States policy, which has sort of crystallized in everyone's mind as "the war on drugs," is known as the "Taliban" of drug policies. I gather that the present American system does not contain the realism which you believe ought to attend national drug policies, and that it does not abjure the use of myths as a basis for those polices. Would you expand on that for a moment? Do you think that United States drug policy, which is to a degree a hemispheric drug policy, is based on myth?

Mr. Cohen: To a large degree, it is. It is also, to a large degree, based on a particular notion of the function of the state. The application of general principles or ideas about the prohibition of drugs is varies from country to country.

The global treaties are of one text. They make it impossible for individual states to deviate in their legislation from that general set of rules. What actually happens in those countries that are signatories to those treaties is very different. Although many people in the U.K. use cannabis-type drugs, the police there insist on making a certain number of arrests for the possession of cannabis. Every year, approximately 70,000 to 80,000 arrests are made on the basis of that prohibition. In the north of Germany, such arrests are not seen at all, although they have the same legislation which is based on New York, 1961.

In the United States of America, an even more fundamentalist application of this legislation is seen. The American police will send in undercover police to provoke small dealings in cannabis-type drugs. They will send in police dressed as people of a certain culture to act as drug sellers. If a person agrees to buy, that person is then arrested. That kind of application of legislation goes further in the U.S. than in any other country I know of.

The application of the law is one thing. Big differences can exist between countries. The myth at the basis of this action is that cannabis leads to other drug use which is much more dangerous, that it leads to particular cultural behaviours that are considered undesirable, or that it leads to a particular type of personality that is not wanted. There is a whole series of so-called justifications for treating cannabis as if it were something extremely dangerous or destructive for human kind. Those justifications escape me completely, but the American powers seem to think that is the right way to go.

Senator Banks: From time to time you must have pondered why that is so. If the empirical information and even statistical information is available to disprove the myths to which you just referred, what is the constituency that resists that irrefutable logic?

Mr. Cohen: I think it is a type of moral indignation. Let us take another example, that of divorce. The Italians struggled against divorce, guided by the Papal State, well into the 1960s when in other countries divorce had been available for a long time. The Roman Catholic ideology that opposes divorce was so much part of the local Italian political system that it was very hard to escape it. All kinds of quasi-scientific objections can be made to divorce but, in the end, it is the moral conviction that makes it right or wrong. Even if you could see in Italy that many people were separated and that there were enormous costs related to the legal impossibility of a normal divorce, the power of the moral conviction that divorce is something bad was so strong that all the other were aspects dwarfed in relation to that moral conviction.

In the western world, many quasi-scientific problems exist around the legalization or even the decriminalization of drugs. It is the guise taken for what is actually a moral conviction that any drug use is wrong. In order to amplify that conviction, you can take a few observations and hold them as the general truth about drug use. They are illustrations of a basic moral conviction. One cannot discuss moral convictions on the basis of statistics. A moral conviction is a moral conviction.

The Deputy Chairman: Mr. Cohen, at the beginning you commented that the marijuana-selling coffee shops in Amsterdam are entitled to hold, at any given time, 500 grams of stock. How do they obtain their stock? What distribution system is used to stock these coffee shops?

Mr. Cohen: This is evolving. It is now different from what it was five or ten years ago. When the coffee shops started, most cannabis sold in coffee shops was imported hashish from Morocco, Lebanon, Pakistan or Afghanistan, but the quality of the hashish was so variable that some Dutch entrepreneurs started to grow marijuana. Slowly, Dutch marijuana has become the main article inside the Dutch coffee shops. There is still some imported hashish from Morocco, from Columbia or other Latin American countries, but most of the present-day stock in Dutch coffee shops is Dutch-grown marijuana with an incredible variety, as I already said, from the very mild varieties to the very high-potency varieties.

In our own research on cannabis-use careers, we find that more than half of all experienced users prefer the milder qualities of marijuana.

To answer your question, most present-day stock comes from Dutch soil. It is either grown outside or it is grown inside in very high-tech growing outfits inside houses.

The Deputy Chairman: Are growers licensed? How are they protected from prosecution? How is the transportation of the product from the growers to the coffee shops handled?

Mr. Cohen: About a year ago, 60 mayors of municipalities asked the Minister of Justice to design a system that would license growers, so that the entire growing and transportation system could also be regulated. The Minister of Justice refused to do so in spite of quite formidable support for such regulation within the country, because he refers to international treaties and also the possibility of foreign pressure on the Netherlands in this area. It is not regulated.

Once in a while growers are arrested. Transport is almost not interfered with. We know that the owners of coffee shops have stocks that are much larger than 500 grams because they must have stock of all the varieties, and they must store those in stashes that are secret. There is a kind of schizophrenia in the Dutch system that I deplore, which makes cannabis-type drugs fully and openly available in little shops. However, the provisioning of these shops is not yet regulated or caught in a system of rules that specifies which growers are licensed, under what kind of conditions, and how much they can produce. This is what the Swiss are now doing. That is why I like the Swiss proposal of law so much. It tries to find a solution for the entire area, not only distribution but also production.

The Deputy Chairman: Dr. Cohen, you said that the limit an individual could purchase is now five grams, whereas it used to be 30 grams. You indicated that the change was as a result of international pressure. Could you elaborate on that?

Mr. Cohen: In 1995-96, the mayor of Lille, a large city in the north of France, came with a complaint that youth of this city would travel to the Netherlands, buy a lot of marijuana and hashish, and then sell it in Lille. This was undeniably true. Some people would come to the Netherlands, stock up and sell it in France. In order to respond to that problem, the Dutch government said they would make it impossible for all people to do that. This applied not only to foreigners, but also to the Dutch because you cannot have different rules for foreigners. The Dutch government decided to lower the amount of cannabis-type drugs that a person can buy in a coffee shop in order to deal with the problem of people coming to coffee shops and buying so much that they would have enough to sell in their home country.

We know from our research that for most users of cannabis who are not reselling - and why would they because there is enough cannabis in the Netherlands to go to the shop every week or every month, whenever you want - five grams is a stock that lasts them for at least three to four weeks. The Dutch consumer was not really bothered by this change in regulation because he or she could still buy enough. The regulation focused on foreign buyers who would come to the coffee shops.

The Deputy Chairman: I understood that. My question was really how was the pressure applied?

Mr. Cohen: The pressure was applied through the prime ministers, the ministers of health and the ministers of finance. It was discussed in EU agreements. How do governments relate to each other? In all the institutes of communication, the French made it an issue and pressured the Dutch to change the accessibility.

The Deputy Chairman: Could you tell the committee how the police in the Netherlands react to this schizophrenia that you talked about in terms of drug policy? A drug appears to be legal in certain locations. However, it is not legal to grow, transport or possess when you have more than five grams. How do your police react to that and how do they enforce the law? What is their understanding of the law?

Mr. Cohen: This may be different in different areas. In Amsterdam a special group of police people is specially focused on guarding the rules around production and distribution. They frequently arrest people producing marijuana, or they check the coffee shops and, if the stock is higher than 500 grams, they will give the owner a warning. After three warnings, the coffee shop will be shut.

In other municipalities, the police are much more lax and easy going. When people grow cannabis in houses and they do not purify the air in those areas where it is grown, there is such an incredible stench of marijuana growing that people in the neighbourhood start to complain. Under those circumstances, the police will come and shut the outfit.

The Deputy Chairman: Would that be under a clean air act?

Mr. Cohen: No, they act on the basis of what is in the books. If there are no complaints, and if people do not make themselves conspicuous, the police in the Netherlands will not do anything. However, they are expected to suppress everything: growing, possession and transporting. This is highly impractical because access to the population is decriminalized. They see that this is schizophrenia to its max. The police, therefore, have trouble because the situation for them is unclear. I would never say that this should be repeated in other countries because it is one of the bad and illogical aspects of Dutch drug policy.

The Deputy Chairman: Is that because it is incomplete?

Mr. Cohen: Yes, it is incomplete. It is mainly incomplete because of the lack of courage and because of pressure from other countries. If the Dutch were to transgress international rules on the level of growing and transporting, the fear is that this would have repercussions beyond what the system can deal with. The official policy in the Netherlands at the moment is that we have done our share of demonstrating how you can decriminalize distribution. Let other people reach our level and then we may go somewhere together. Many politicians are sick and tired of the guiding role of the Netherlands in this area,.

The Deputy Chairman: Some might describe the Canadian policy as reducing demand and supply through prevention, education, enforcement and rehabilitation. Would you care to comment on that as an approach towards marijuana?

Mr. Cohen: That is a theoretical approach. It contains all the buzzwords that you must use, but there is no evidence at all that prevention has any impact on levels of drug use. There is also lack of clarity about what prevention actually means. What is prevention? Is it secondary prevention, primary or tertiary? What do you mean? How do you keep people from drugs by official guidelines when drug use is something that is decided amidst cultural developments that have nothing to do with what the government thinks. There is a great lack of clarity here about what it really means to prevent drug use.

However, if you take the route of harm reduction, you could try to define a certain number of harms. Such harms have to do with use, purchase, production, or other types of drug use where you deal with injection. If people continue to inject, at least try to make them inject in a sterile way. Harm reduction is easier to define than fighting drug use or preventing drug use. Those terms are, for a policy-maker, quite vague and difficult to fill in with real activity.

These words, more or less, are symbolic for a certain type of lip service to the global treaties. The content of these things is usually very low, vague and variable between the different regions of a country.

The Deputy Chairman: Thank you, Professor Cohen. Your interesting testimony has held the attention of the committee. You have given us valuable information and a perspective that the committee will find most useful. We appreciate you taking the time to come here and share your experience with us.

Our next witness is Mr. Alain Labrousse. He completed a dissertation on the sociology of development at the Institut d'Étude du Développement Économique et Social, IEDES, in Paris in 1996, and a doctoral dissertation in French studies at the Université de Bordeaux in 1974.In 1990, he founded the Observatoire géopolitique des drogues in Paris. For the last 10 years, this organization has produced studies and reports on the international situation with respect to drug production and trafficking. He is currently a chargé de mission at the Observatoire français des drogues et des toxicomanies, a French monitoring centre for drugs and drug addiction in Paris, where he is organizing an assessment mission on the cannabis crop situation in Morocco this June, and an assessment on the anti-drug cooperation in Bolivia and Peru this July, amongst other things. He has led similar missions in countries around the world, including Afghanistan, Vietnam, Senegal, Central and Western Africa.

His principal publications include: 2000, Les drogues, un marché de dupes, Paris, Éditions Alternatives; 1996, Géopolitique et Géostratégies des drogues, Paris: Économisa, in collaboration with Michel Koutoutsiz; 1991, La drogue, l'argent, et les armes, Paris: Fayard; and 1985, Coca Coke, Paris: La Découverte, in collaboration with Alain Delpirou.

Welcome to our committee, Mr. Labrousse. The floor is yours.

[Translation]

Mr. Alain Labrousse, chargé de mission, Observatoire français des drogues et des toxicomanies: Mr. Chairman, most of the presentations made to your committee have focussed chiefly on the problems involved in drug use and the policies that should be implemented to deal with them. These essential issues cannot cause us to overlook another aspect of the problem, the one linked to drug supply, that is the production and trafficking of drugs, the criminal organizations involved, and to the corruption and conflicts they generate.

Thus the purpose of my presentation is to assess the effects and results of the tremendous effort made by the international community in the last 15 or 20 years, particularly by the rich countries, to combat illegal activities linked to the supply of drugs.

The first area of observation is drug production. There are three major families of drugs that are grown. These are therefore drugs that are of natural origin - and the fourth group is synthetic drugs. We have some relatively reliable observations and the figures that I will be using were provided by the United Nations International Drug Control Program, the United States and the governments involved.

There are two ways of combatting the cultivation of illegal drugs: one is economic and involves funding alternative development programs. The other is the repressive approach which involves manually pulling out the plants. In most cases this is done by spreading chemicals, which are used massively in Columbia in particular, but not elsewhere.

What are the results of these policies that have been in place for 15 or 20 years? In the case of coca leaves, in Peru and Bolivia, the area under cultivation in 1995 was 150,000 hectares. Today that figure is 50,000 hectares. So this would seem to be a success. However, at the same time, the figure in Columbia went from 30,000 to 180,000 hectares. So, as you can see, the gains made in two countries were largely offset by the increase in production in a third country. Columbia's productivity is much higher: between 800 and 1,000 tons a year, or twice what it was determined to be 10 years ago.

In the case of opiates, the situation is quite ironic. I will take the example of Afghanistan, which is far from being the largest world producer. Production has practically doubled between 1998 and 2000. Under the almost total government of the Talibans, production went from 2,500 tons to 4,000 tons, which is enough to make 400 tons of pure heroin. This year, 2001, there will be no crop at all. The production under the pressure of the Talibans has disappeared. This fact has been confirmed by all the sources. Hence, this is apparently a great victory, even though it was self-generated. All the information shows as well that the Central Asia and Pakistani mafia paid the Talibans to stop producing for two or three years, because record crops in the preceding years meant that they had accumulated such large stockpiles that they could not sell them on the market without causing the prices to collapse. It is quite interesting to know that what the international community was not able to obtain in Latin America with respect to cocaine, the mafia was able to obtain for reasons linked to their economic interests. That phenomenon deserves some reflection.

The third type of natural drugs are cannabis derivatives, which I know are of particular interest to this committee. It is difficult to get as accurate an idea about cannabis as about the other plants, because cannabis grows everywhere, sometimes completely spontaneously. It is therefore difficult to get figures that are as accurate. However, it can be said that in Latin America and the Caribbean, production has been relatively stable for several years. The major producers are Mexico, Columbia, and Trinidad and Tobago, the latter country having replaced Jamaica. There are some changes in the producers, but generally speaking, the production has remained relatively stable. However, it is exploding more or less everywhere else throughout the world. Production is increasing tremendously in Southeast Asia, particularly in Cambodia. The production of hashish, which is still very substantial, even though it has not been measured in Pakistan and Afghanistan, has increased a great deal in Nepal, which has become a major exporting country. Production is exploding in Morocco in particular. I am just back from a seminar in Valencia, Spain, where Moroccan technicians told us that production had practically doubled in five years. They said that they were unable to say or write such things publicly, because their government had imposed a sort of taboo. There are 120,000 hectares in production in Morocco at the moment, with a less repressive regime than that of Hassan II. Very poor peasants, generally speaking, felt free to grow these crops, and this is causing some huge ecological problems and food self-sufficiency difficulties, because at the moment, they are no longer growing these crops in the Rif mountains, but rather on the country's agricultural plains.

I know that Moroccan hashish has been seized in Canada in the past, and in the years ahead, it is likely that this source of supply will increase significantly.

Synthetic drugs, which by definition do not use primary vegetable material, cause fewer geopolitical problems, because they are manufactured in laboratories very close to the places where they are used, generally speaking. There are laboratories in Canada and the Americans have some in Mexico. Holland is one of the main sources of supply for Europe. This involves classic police repression.

The statistics show that production increased during the 1990s, speeded up in 1997-98, and now seems to have reached a plateau. Apparently, these results were not achieved because of an attempt to repress production activities, but rather because there was a change in fashion or because the market was saturated. It is more a case of self-regulation on the part of traffickers in light of the market demand than an effort on the part of the international community.

After reviewing the issue of drug production, we must try to assess the success of efforts to combat criminal organizations. In 1994 and 1995, the Columbian cartels were dismantled. Their main leaders surrendered or were killed. The mafia and the Italian criminal organizations were weakened because of the courage and sacrifices made by many judges, police officers and politicians.

At first glance, we might say that the success is undeniable. However, if we look at the Columbian situation - and everyone acknowledges this - in 1994, there were four or five big cartels, and today it is estimated that there are 40 to 80 medium-sized organizations.

In Italy, with respect to the Neapolitan Camorra, there were six major families, whereas today, there are 100 small organizations. This pattern is repeated pretty well throughout the world and, as a result of the impact and success of the repression, these organizations have become decentralized.

In practice, this means that police repression is much more difficult, because when an organization is destroyed in Columbia, only one organization out of 40 or 80 is destroyed. Of course, the local police in the United States publicized the dismantling of one of the largest Columbian cartels, and, six months later, another of these cartels was dismantled.

At best, each time it is one of the 40 or 80 organizations that supply drugs to the American and European markets and that are able to distribute them very widely.

The second consequence of this change in criminal organization is that they are now decentralized. Of course, the Italian mafia has always counted on families in Canada, the United States and Australia, but today, the organization has an export policy.

Specifically, the Italian mafia is located in Eastern Europe and in South Africa, where Vito Pallazolo, one of the big leaders, has almost hung up his shingle openly and has worked with the two successive governments, the Apartheid government and the Mandela government, and its successor, because Mr. Pallazolo is very wealthy and has provided many services, and there is no question of extraditing him.

It can be said that despite the very costly effort, and the success that has been achieved and the battles won, the war is not over, quite the contrary. The criminal organizations are doing very well. In addition, of course, some have never been the target of this offensive I was referring to, in particular the Mexican cartels. For political reasons and because of their ties to the Mexican government and the party in power, they were never targeted in the same way as the Colombian cartels.

A third factor that makes it quite difficult, if not impossible, to win these wars on drug production and marketing is the existence of local conflicts. At the time of the Cold War, the nuclear peril deterred the two major powers from direct conflict. They came into conflict through their allies in the third world, in Afghanistan with Russian intervention and in Angola, with Cuban intervention.

After the fall of the Berlin Wall, we thought we were returning to an era of peace. Unfortunately, we have found that underlying these local conflicts were factors other than ideological factors: they involved identity, religion and nationalism. Yugoslavia is the classic example. Hence, conflicts broke out throughout the world, and this time, they were no longer supported by the major powers. So the war infractions had to find independent ways of financing these conflicts.

What happened in Kosovo is a good example in this regard. The creation of the KLA was financed by intense heroin trafficking from Istanbul. The heroin was sold in Switzerland to buy Kalashnikovs and handguns. They were more or less freely available and were stored in the Albanian part of Macedonia.

This was not the only means used, because there was income tax on the Kosovar diaspora, racketeering, and so on. However, drugs did play an important role - we demonstrated that at the Observatoire géopolitique des drogues - in preparing the uprising. Now that the war is over and the major powers are trying to disarm the war factions that did not the join the paramilitary forces, the KLA, in order to continue to grow, is involved in a great deal of drugs and labour trafficking in Italy. The Italian police and courts have often pointed out that the leaders of the Albanian KLA were involved very closely with Italian criminal organizations.

Of course, this phenomenon occurs in Colombia, where the conflict and drug use had been in existence much longer. However, since the Colombia guerillas have lost their ideological tie with the "Big Russian Brother," they have been left to their own devices and have increased their trafficking activities, which are just as significant, if not more significant, than that of the paramilitary groups opposing them, which are supported by the army, and some times by the CIA. There is a drug war in Colombia, that is not the only reason for the conflict, but which is a very important part of the funding for it.

Another reason why it is difficult to combat drug trafficking is that while for most governments throughout the world and the major powers, the war on drugs is something important, it is never given priority over major strategic and economic interests.

Look at the situation in Morocco I was describing. Why have France, Spain and Europe not done something about this situation before now? The reason is that they did not want to embarrass King Hassan II, an ally of the West, against the rise of Islamism. Asking him to do something about the drug problem, in which his entourage was very widely involved, would have created a real problem and would have weakened his power.

Europe - France in particular - has long closed its eyes to cannabis trafficking activities, activities which are very protected in Morocco. Today, we have inherited this situation with a young king, who is rather in favour of combatting corruption, but the problem has become so large that once again countries prefer to close their eyes and wait for things to develop on their own. If countries were to ask the king to undertake a war on drugs, that would definitely cause him additional problems. Other countries prefer not to talk about it, and in all the bilateral meetings between France and Morocco, cannabis is not on the agenda. Although our president believes in the "slippery slope" theory and is adamantly opposed to any liberalization of cannabis, he is at the same time a very close ally of Moroccan authorities and would not want to embarrass them with this problem.

Another key point and one that is discussed a great deal, is the war on money laundering. Here again, there is an international financial action group, supported particularly by the OECD countries, and a great deal of legislation has been put forward. Most countries have signed framework legislation to combat money laundering. Everyone recognizes that this effort is largely ineffective. I will quote Mr. Calaman, the head of the Interpol organization specialized in combatting money laundering, which is called FOPAC. At a conference in 1997, he said that it was estimated that drug interdiction activities resulted in the seizure of 10 per cent of the products at best, it is clear that in the case of money laundering interdiction activities, less than 1 per cent of the dirty money is seized.

Here again, priority is given to the interest of governments. An incident occurred and was reported by the media when the international financial action group drew up a list of countries suspected of being involved in money laundering and it did not mention either the Anglo-Norman Island of Jersey nor the Principality of Monaco. This surprised everyone. It was learned later that there had been negotiations between France and England so that they could each avoid putting their country on this relatively infamous list.

In this regard, I think the Bush administration can at least be said to be sincere. About two weeks ago, it removed its support from the efforts to control tax havens. In the name of the free circulation of capital, it said that these countries should not be subjected to too much monitoring, because this could interfere with their role in the world economy. It was phrased in more or less these terms. The administration did not say that we should not be working against money laundering, but simply that we should not be doing anything to impede the flow of capital in these countries. The fact is that the 32 countries on the list of tax havens, that is, which provide tax advantages and everything related thereto are much the same ones as provide money laundering for dirty money and drug money. If we do not show an interest in their non-criminal activities, we are obviously leaving the door open to criminal activities. There is a major disagreement between the United States and the OECD countries on this, because there has been a major effort to combat money laundering activities.

Given this situation, in which most of the resources available to fight international trafficking are not working, are there some different policies that could be introduced? I would like to say a word about the famous Colombia Plan developed by the Colombian government with the United States. This plan has a $7 billion budget, $4 billion of which was provided by the Colombian government - we might wonder were it got that money - $1.3 billion by the United States and the rest from the European Union or countries such as Japan. It should be noted that the United States will be providing $1.3 million for this plan, $1 billion of which will be used to purchase sophisticated military equipment, including 17 Black Hawk helicopters to be used by the Colombian army in its drug interdiction activities.

At the moment, the government of Colombia is involved in extremely difficult negotiations with the guerillas, in what is called the peace process. There is no doubt that this huge amount of financing for the weapons of the forces of repression during a period of negotiation with the rebels linked to drug trafficking and the allies of the United States is sabotaging the peace negotiations. In fact, all the Latin-American countries have taken a stand against the Colombia Plan, because they are afraid the war in Colombia will be exported outside its borders to their countries. Consequently, Brazil, Venezuela, Ecuador, Panama and the European Union are opposed to the Colombia Plan. That is why I say there are several distinctions in the policies of the major countries. The European Union will give Colombia money to strengthen the rule of law, to promote alternative crops rather than illegal crops, and for social development plans. However, the European Union has very clearly specified that between $500 million and $800 million will be provided in several stages. Not only will they not be providing money for activities related to the military component, but this will have to be done outside the Colombia Plan. The reason is that providing funding for the civil component of the Colombia Plan implies acceptance of the military component. And the fact is that Europe - and France played a fairly significant role in this - does not want to give its approval to the military component. Thus, in the context of drug interdiction activities and international co-operation, it is possible for countries to have nuanced, different positions. And I think the Colombia Plan is an example where the approach of Europe and the United States are very distinctly different.

So, before we go to your questions, what should be done? As long as the current interdiction policy is in place, and the debate about legalization is a whole debate into which I will not enter and which is not part of my expertise - here too we have to reduce risks through international co-operation. I believe that is what Europe is doing with respect to Colombia. It is risk reduction. It is not certain that this will have a very significant impact on the peace process. But at least, we are not throwing oil on the fire.

Moreover, in this context, if we cannot do a great deal through repression, we must nevertheless prosecute criminals and criminal organizations. However, in the area of drugs, we must focus on the other aspect, that is prevention, reception and care. There are some American studies including one by Peter Reuter, although I'm not absolutely certain of this, which says that one dollar spent to control demand is seven times more effective than one dollar spent on repression. There is a whole scientific model whose worth may be questioned, but the general impression is that drug supply is not the most important factor, even if it plays a role.

I was telling some of you informally that at the moment in France, the current trend among high school students is strangulation or hanging which is stopped at the last minute to produce a high. There is a physical high in cutting the rope or stopping the strangulation at the last minute. There have been a number of fatal accidents, and that is why this has been brought to public attention in France. A few days ago, I was talking to the children of some friends who were telling me that everyone does this, that it is common. This thrill-seeking tends to be similar to that involved with drugs, but it is not the supply that creates the addiction, because the issue here is in addictive attitude. What we need to look at are the problems facing young people and society, and there are many experts who will provide you with information on that.

[English]

Senator Banks: Overall, you seem to say that the international war on drugs has never been very effective in stemming drug supply. In fact, early on you said that the only effective reduction in supply was when the Mafia paid the Afghan growers not to grow. It reminds me of the United States' agricultural policy which sometimes pays farmers not to grow in order to maintain the price. It is rather like OPEC turning off the taps in order to maintain the price of oil.

Based on your obviously extensive knowledge of the worldwide situation, do you think that the conventional war on drugs - that is to say state and interstate impositions on growers, suppliers, traffickers, the Mafia and the states that are involved - has any chance of success in the long run?

[Translation]

Mr. Labrousse: I think my presentation answered this question to some extent. In the middle of the 1980s, there was a 15-year war on drugs which mobilized budgets and important forces. The results were relatively unimpressive. For example, I spoke about the reduction in Peru and Bolivia that was offset by an increase in Colombia. How did that happen? Peru and Bolivia are traditionally producers of raw materials, that is coca leaves, and of the first intermediary processing phase, the cocaine paste that Colombian traffickers came to pick up in small planes that landed on airstrips in the jungle in Peru or Bolivia. The United States thought that if it cut the Colombians off from their source of supply, there would be a significant reduction. They built a chain of radars all along the border with Peru, and a few in Ecuador and Brazil. So when a plane appeared, a Peruvian military plane took off and demanded that the plane identify itself and land. This is how an unfortunate incident occurred recently, in which 12 American ministers of the cloth were killed because they had been identified incorrectly. This strategy worked. The Colombians stopped or almost stopped coming to obtain supplies in Bolivia and Peru. The prices collapsed, and the government was able to conduct some eradication campaigns. However, at the same time, the Colombian traffickers had the capacity to develop their production considerably. Even if all the coca plantations in Latin American were eradicated, the traffickers will find or have already found other areas where they can grow the crop.

As you know, crops have officially been discovered in Georgia, in the Independent Republic of Abkhazia, and these were run by traffickers. Drugs were found growing in the Solomon Islands last year, and there are some very similar reports to the effect that in Kinshasa, Congo, crops are already been produced and there are processing laboratories as well. So, it is very likely that the traffickers are already preparing an alternate plan in case the attempts to eradicate drugs in Latin America should succeed.

I would like to add that in this war on illegal production, there is a very powerful, very underused weapon, which is the economic weapon. We will not change what people grow through little alternative development projects worth $20 million here and there: you spoke about the failure in the United States in this regard. However, better policies involving the producing countries may have an impact.

General Banzer was elected President of Bolivia in 1997 and had put in place the cocaine system in his country under the dictatorship during the 1970s. He almost eradicated35,000 hectares of coca that remained in his country. All the economists said that the country would lose close to $500,000 annually. This is a country that exports a little over $1 million. So this would be 50 per cent of the value of the country's exports, which is huge for Bolivia. They asked the United States to offset this loss by removing a tax on the import of Bolivian textiles into the United States. This would have produced $250,000 for Bolivia. The United States refused, so as not to establish a precedent that Colombia could use.

However, Europe - and I would not want to act like a European nationalist here, I am critical about many things regarding Europe - since the beginning of the 1990s, has tax-exempted 600 products from the countries in the Andes and from Colombia. The results are not better in the war on drugs, but at least, there was a fairer attempt to adopt an economic support policy, rather than a purely repressive policy.

[English]

Senator Banks: Let me ask a question based on an assumption. The assumption is that, looking way down the road, many countries which now have a large illicit-drug market will decriminalize or legalize those drugs. One would assume that, with that control and perhaps with some kind of domestic production, the price would go down significantly. What would be the result in countries which now have as an important part of their GDP the export of what we consider illegal drugs?

[Translation]

Mr. Labrousse: It depends on the country and the situation. That is similar to what Peter Cohen was saying with respect to drug use and international trafficking. We must also look at the very unique situation of each country. In the case of Morocco, if cannabis were legalized in Europe, there would be a collapse of this production in Morocco and a terrible economic crisis. It is starting to be legalized in Switzerland, and as you have been told, the growing of cannabis by farmers will be tolerated. It is estimated that one million and a half people in Morocco live chiefly off cannabis. This would probably result in a new, very significant migration toward Europe. In addition, it is estimated that each year, $1 billion is sent back to Morocco by traffickers or small dealers. For Morocco, cannabis is really a source of employment and a source of financing this activity. If this market were to close down, the situation would be very serious. Someone in favour of legalization was telling our Moroccan friends to create a quality label in order to be competitive on the market. If the market is legalized, there must be a high-quality product developed, but it is likely that that will have certain consequences.

However, in Colombia, most economists argue that although the drug economy has short-term beneficial effects - an influx of dollars with which to pay down the foreign debt, among other things - in strict economic terms, it has very negative effects, such as inflation and higher prices for imported goods.

Colombia is a country with a relatively diversified economy, with mineral resources like gold and coal, emeralds and agricultural resources like coffee and sugar cane. So the Colombian economy should do better without drugs, according to the experts. What's more, this whole conflict would be easier to resolve if the warring parties were not heavily funded by drugs. As a general rule, legalization would definitely deal a blow to rural employment in some countries and would not be very good news for them.

[English]

Senator Banks: We can assume, looking at the situation broadly, that criminal elements would be opposed to drug legalization because it would be bad for them. However, we can also assume that there are states in the world, national governments, which some criminal organizations have infiltrated which would be opposed to any legalization of drugs, not for moral reasons but economic reasons. Is that the case?

[Translation]

Mr. Labrousse: The problem is that complicity with drug trafficking is something that stigmatizes countries much more than human rights violations. It is quite strange, but you can be forgiven for slaughtering entire populations. And yet a drug trafficking allegation against a head of State or minister is unshakable. So those governments will not make any official attempt to oppose legalization. They will try to get economic compensation for stepping up their efforts. They will demand something in exchange for going along with this process. Morocco will demand money from Europe. The situation is quite ironic; they are supposed to stamp out drugs, but when they do, they are going to say they can no longer survive and they need more financial assistance.

Moroccans, for whom the subject was completely taboo, are starting to try to figure out what is going to happen. When the Swiss experiment was announced, it was like a wake-up call to Moroccans. They are going to organize a seminar in northern Morocco with consumer countries and themselves, as a producing country, to discuss these issues. Because they are quite alarmed, in fact, by the idea that the Swiss are going to grow their own. There is no way they will object, but they are going to try to make the most of the situation before legalization becomes more widespread. It will still be a number of years before the Swiss process spreads to the rest of Europe. So during this transition period, the producing countries are going to try to make deals in exchange for supporting this policy. They may be more inclined to wipe out production in their countries. But once again, it will depend on the situation. Cannabis and poppies, and therefore heroin, can be grown in Europe, but not coca leaves. The coca plant has a fairly limited ecological range and could be produced elsewhere in the world, but not in the major consumer countries. Perhaps if legalization were to occur, there would be a policy of quotas for traditional producers, but that would not be too consistent with the current globalization policy of free competition.

Thus the tea growing countries of Asia could quite easily become coca growing countries. The Bolivians and Peruvians are probably going to ask for a market supply quota, which they may hypothetically get.

[English]

Senator Rossiter: In view of the fact that these growing operations are secret, hidden and illegal, how can there be any estimate of how much there is?

[Translation]

Mr. Labrousse: There are quite reliable satellite observation methods, and there are also field investigations. In Afghanistan, the United Nations International Drug Control Program and the European Union have developed a field investigation methodology with 20 teams of two Afghans, who visit every suspect province and town. They are of course of the same ethnic group as the town they visit, and they go to record crops. They have created quite an accurate model. Obviously, they do not tell people they are there to record illegal poppy crops, but to record all agricultural production. Farmers are therefore more willing to talk, and thus we have managed to obtain extremely accurate data, with which, using a model that was developed in 1994, we can keep track of the changing situation.

However, in the case of synthetic drugs, seizures are the only indicator. That is why we have no statistics on production volumes. We know that in the Netherlands, about two tons are seized every year. Roughly the same amount is seized in England, but the British say it mostly comes from the Netherlands, it is not produced domestically. No one can say for sure. So for synthetic drugs, it is a big question mark, because only seizures provide any indication.

[English]

Senator Rossiter: Would there not be as much ambiguity in the estimates all over the world with the natural products as there would be with the manufactured?

[Translation]

Mr. Labrousse: We can visually observe and monitor areas of land. For example, tropical forests must be cleared to plant coca. The clearings are plain to see. Obviously, the farmers try to hide their crops under forest cover, but it is basically impossible to fool the agricultural satellites. Satellite records of agricultural production provide estimates that have to be confirmed by field investigations. The problem you rightly raised is that the major producing countries are often countries at war: Burma, Afghanistan, Colombia, and Peru, not so long ago, with the Shining Path. For field observers, it is sometimes difficult to reach the sites and consequently to confirm satellite data with field data.

There is also the volume of seizures. For example, opiates from Afghanistan are moved either through Iran - and the Iranians are cracking down on drug-running through Iran - or through North Central Asian countries, where the resolve is much less firm. However, there are also corresponding levels of seizures. Take, for example, the rumoured stockpiles of the Central Asian and Pakistani mafias; the level of seizures in Iran and Tadjikistan is going to be very significant, starting in August, whether or not this theory is correct. If seizures remain at roughly the same level, then there were in fact stockpiles. If there is a significant drop in seizures, then the theory and information were incorrect. There is actually a whole range of indicators that make it possible to quantify these phenomena, but not with the same degree of certainty you would have in a survey of the number of drug addicts in the general populace. There is a greater degree of uncertainty in this area. We do, however, manage to ascertain production levels using a number of indicators.

[English]

Senator Rossiter: In areas where there is complicity between governments or law enforcers or police and the merchants of the illegal drugs, there is little incentive to try to stop the transaction. Is that correct?

[Translation]

Mr. Labrousse: There are major political problems. I referred to the situation in Mexico. It is now an established fact that for the past 15 years, all Mexican presidents have entered into agreements with criminal organizations. Currently, the Mexican police and army secret service even have reports that deal with this. If there were only one report, it could be assumed there was a plot to undermine democracy or a given party, but when there is a whole series of reports with consistent information, like the reports on Salinas' deposits with City Bank, there is no way this could be a fabrication. Raoul Salinas, the very brother of the Mexican President, was laundering money.

There are a significant number of indications that the Mexican government under the PRI, in power for 70 years, had entered into agreements. Some of those agreements were for economic reasons. Apparently, in order to meet NAFTA membership requirements, $5 billion to $10 billion in annual drug money enabled the Mexican government to meet a certain number of conditions with respect to its reserves, economic reforms and so on. So the United States initially turned a blind eye to avoid undermining the trade deal. When the agreement was finalized in 1994, it was the most conservative Republicans who attacked the deal. The Clinton administration could not expose the connection between drug traffickers and the Mexican government, even if it wanted to, because that would call into question its involvement in the trade deal.

Surely you find it interesting to know that a major economic deal, in which Canada is a full participant, clearly benefited from drug trafficking run by the Mexican mafias. In fact, the Mexican mafias are much richer than the Colombian mafias because their operations are much more diversified. They bring Colombian cocaine across the border in exchange for over 50 per cent of the proceeds. They grow poppies and export heroine to the United States and maybe even Canada, I do not know. They have huge cannabis crops. They have amphetamine factories that mainly supply the American West, where there is heavy consumption of that drug. So Mexican criminal organizations are very rich and powerful, and for these economic and political reasons, no one goes after them.

That is the great shortcoming of the film Traffic, which is otherwise a good documentary. The film does not show the political side of the problem. It exposes police and military corruption, but not political corruption, particularly the "well-intentioned" brand of political corruption practised in the United States for economic reasons. But Europe does the same thing with Morocco. In the early 1990s, when France sold arms to Pakistan, it did not ask any questions about where the money came from.

All governments take the same approach. No contract has ever been cancelled on suspicion that it would involve questionable money. That does not happen. Yet there are companies that have cancelled contracts to avoid tarnishing their image. For example, Carlsberg breweries, in Denmark, cancelled a huge brewery project in Central Asia on the strength on an article quoting an OGD investigation, which revealed that the owner was a mafia member. Overnight and without further verification, although it may have had other information we don't know about, Carlsberg cancelled the contract.

Governments, however, do not cancel contracts; nor does the IMF or the World Bank. Colombia has always been the best and most reliable country when it comes to paying down foreign debt. Obviously, part of Colombia's foreign debt over the past 20 years has been paid with drug money. Never has the IMF said it would not accept that money because it might be dirty. There is a contradiction, and it goes for a number of countries in the world.

[English]

The Deputy Chairman: Could you compare for us the methods of calculation used by the United Nations and those from the Observatory of Drugs? How do they differ?

[Translation]

Mr. Labrousse: The Observatoire géopolitique des drogues, the former organization to which I belonged, did not do quantitative studies. It did not have the means to conduct its own studies. So it used studies done by various organizations and highlighted any shortcomings or contradictions in them. The Observatoire mainly did political analyses and investigation of all these phenomena I have discussed. It highlighted the contradictions in international policies. For example, we were struck by the fact that Iran has made great efforts to halt the drug traffic coming from Afghanistan. That may be for ideological reasons and not just to fight drugs; the majority of Afghans are Sunni, whereas Iranians are Shi'ite. Their war on drugs may just be a war against the enemies of their Islam. That may be a factor.

There are Shi'ites in Afghanistan, but they are not at all involved in drugs. If Afghan Shi'ites had been involved in this business, I wonder whether Iran would have taken such drastic action. We can only speculate. Iran built a wall 800 kilometres long to block entry via the valleys of Pakistan and Afghanistan. In the past 20 years, 3,000 men have died in the struggle against smugglers and traffickers. Serious battles have been waged, and United Nations observers have witnessed those clashes, which have led to several deaths. Throughout the 1990s, the United States had placed Iran on the list of four or five decertified countries, countries subject to economic sanctions by the United States and international organizations for insufficient effort in the war on drugs.

I have privately asked officials from the State Department why they included Iran on that list, given that Iran was not one of the five trafficking countries of the world. The reason they gave me was that Iran was considered a terrorist State. Iran was punished for being a terrorist State and an enemy of the United States by also being put on the list of drug traffickers. That is also a very significant aspect of international relations. Many governments use drugs as a weapon to discredit their political opponents or people who are not sufficiently supportive of the government position. The most unfortunate part is that producing states, third world states, have followed this example. In other words, if an ethnic minority is not supportive of the central government, the government sets up a campaign against drugs to oppress that community. As a bonus, the government gets the support of the international community for its efforts.

Two examples; first, the Bejas, an animist tribe from Sudan, are small-scale traditional growers of cannabis and are generally opposed to the Karthoum regime; the United Nations has funded very aggressive eradication campaigns, which in fact were a way for the government to retake control over those areas.

Second example; Aceh, Sumatra. There has been a great deal of talk about Timor, but there is another area of conflict with radical Muslim groups. It all started in 1990 with cannabis eradication campaigns supported by the United States. The central government said it had to intervene because the people were traffickers. Without taking a very close look, the troops were sent in. There was some extortion and abuse, and the first truly violent guerilla movements rose up to resist the eradication, which was regarded as interference by Jakarta in their business. Today, the situation has deteriorated. People have forgotten that cannabis was at the root of this revolt that threatens to be extremely harsh and bloody. In international politics, governments have to be very careful about their allies' rather convenient use of drugs as a weapon against their opponents. This is something that we have observed and that has now spread to many parts of the world.

I gave you only two examples, but there are many others where the mere allegation that a politician or government was involved in drugs was enough to convince everyone it was true. Noriega is a prime example. He was alleged to be a trafficker. The invasion by the United States was condoned by almost all Latin American countries, jealous though they are of their independence. Simply pointing the finger at someone less powerful is enough to cast the stigma of drugs over that person.

[English]

The Deputy Chairman: The question was whether you could compare your system of measurement with that of the UN. Might I stay on that line of discussion with you? It is clearly very difficult to calculate production levels and demand levels. However, we do hear figures respecting the calculation of profits. How reliable are those? Are we just talking about orders of magnitude here?

[Translation]

Mr. Labrousse: I think it can be done in certain limited and very specific cases. For example, Colombian economists have discussed at length the role of drugs in their economy and the percentage of gross domestic product they represent. Latin American banks always have an "errors and omissions" section. At one time in Bolivia, the Central Bank's "errors and omissions" fund amounted to $360,000 million, or approximately one-third of Bolivia's reserves at the time. There was reason to think that "errors and omissions" came partially from illegal activities. And since the main illegal activity in Bolivia was drugs, that was the basis for the calculations. The margin of error in Colombia ranged from 1 to 6 per cent of GDP, among economists with relatively solid data. It is very hard to estimate profits when trafficking involves a number of countries and flows of money that do not necessarily come back to the producing country, but we can make calculations. We have calculated the wholesale value of Colombian cocaine. If in fact there are 140,000 hectares of production in Colombia, we estimate that they can produce560 tons of pure cocaine, which is worth $40 billion on the U.S. wholesale market. We can say that much. However, it is virtually certain that no more than one or two billion dollars per year makes its way back to Colombia. That is the kind of information we have to work with.

As for overall figures for the drug trade in the world economy, the $300 billion or $500 billion amount has no scientific or economic basis. Someone simply came out with that figure one day. I have looked for the source many times, and it is someone who came up with that amount off-the-cuff. A French economist, specializing in drugs, Mr. Pierre Kopp, estimated that the international drug trade represents only $100 billion. I feel that he is perhaps underestimating the situation, but he is a scientist who has conducted very serious studies. In my opinion, it is impossible to calculate the amount very precisely.

Figures were provided on the drug trade in Canada, in Montreal, in September 1998, during a conference on money laundering where a member of the RCMP said that dirty money in the Canadian economy represented CN$17 billion. He is quoted, but we can really say if this figure is scientifically sound or if it is a guesstimate? I do not think it is possible to put an accurate figure on the drug trade, even in a broad range.

[English]

The Deputy Chairman: In the course of your studies, have any economists given you the factors that would be of importance in altering the retail price of drugs? I am thinking specifically of where drugs were legal in one place and not legal in another place. What impact would that likely have on the price of drugs? You gave us the example of the acreage produced in Colombia. If you could imagine a scenario where that particular drug were decriminalized, what would happen to the price of that drug?

[Translation]

Mr. Labrousse: To the best of my knowledge, there have not been any prospective studies in that area. There are very few studies on the effect of economic and anti-drug policies on the retail price of drugs. The only ones I am aware of were conducted by Mr. Pierre Kopp and Mr. Peter Reuter. As for the impact of legalization on the retail price, I do not know if any studies exist.

[English]

Mr. Cohen: It is very difficult to know what would happen. Much would depend on the economic parties that would play a role in the legalization of drugs.

At the moment, in the Netherlands, the price of cannabis-type products, which is more or less legal from the point of view of the public, is slightly higher than it is now in the United States. It depends, of course, on the quantity and the type of cannabis-type products, but this supports my view that, once you legalize these drugs and they become part of the normal, economic traffic, they might become very much more expensive than they are now, in spite of the lowering of the costs that are now paid out by criminals. They have to deal with buying police people and buying customs people. They also have to deal with all types of illicit modes of transportation, and those are very costly.

However, you would have all types of legal production, legal taxation and extra taxation that might ultimately lift prices well beyond the level at which they are now. For instance, if you look at normal benzyl diazepines that are for sale in Amsterdam under medical prescription, their usual gram price is far higher than a gram of cocaine on the illicit market of Amsterdam. This is not true for the non-branded benzyl diazepines. You can buy benzyl diazepines straight from the Roche factory in Switzerland and they are immensely expensive. If you buy them from producers who can produce these pharmaceutical drugs because their patent has expired, these products are much cheaper. It depends on many variables. Local and national regulations influence how prices develop after legalization. No simple estimate can be made about this.

The Deputy Chairman: It seems that if there is a possibility of drug prices going up if they are legalized, as you indicated earlier, there is the danger of other routes developing. We were talking about taxation, if you recall, and if you overtax the product grey markets would come in to provide the product more cheaply. The underlying assumption of legalization has always been, in my mind at least, that you would do away with the criminality. You would do away with the need for someone to go out and rob a home in order to get enough money to buy drugs. If you are coming to the committee and telling us that by legalizing drugs the price will go up, our inevitable conclusion will be, "Goodness, with a higher price we will see more violence, more crime." There is no sense in following the process of legalization.

Mr. Cohen: The relation between the illegality of drugs and the types of crime they provoke is quite complicated. At the moment in the Netherlands illicit heroin is between CAN $10 and $20 per gram. Most heroin users use from 1 gram to 2.5 grams a week, which they are well able to sustain either on their state income or on the jobs that they have. Under the present system in the Netherlands these drugs have fallen to a level below which they cannot fall much more. They no longer entail criminality.

Much depends on the base level prices. I do not know how those compare to prices of drugs in this country. However, if it costs a few hundred francs per gram of heroin in France, of course legalization will make those prices lower. I talked about the long period of competition between methadone and heroin in Germany and in the Netherlands. When heroin reaches a certain price level, legalization will probably make it a little more expensive. However, you would have pure qualities, and more secure and more stable supplies. There are many trade-offs that are difficult for me to go into now. I really do not know how legalization would effect pricing in this country. It might very well be that prices would drop under a system of legalization.

[Translation]

Mr. Labrousse: In France - and yet we are quite close - a gram of cocaine or heroin costs 400 francs, or US$70. It is clear that in Pakistan, where there is a huge market of 2 million heroin addicts - an estimated 80 to 100 tons of heroin from Afghanistan is sold in the Pakistani market - a gram of heroin costs about $2. By moving production into European countries, drug traffickers can make money, probably about $5 or $6 a gram. The problem would be for European governments to not be tempted to impose taxes that are too high, which would encourage the development of a parallel market as in the case of cigarettes. There is a huge market for smuggled cigarettes in Europe, which varies according to the countries. In Italy, it represents 25 per cent to 30 per cent of the tobacco market, because taxes are relatively high and contraband exists. If the retail price for illegal drugs that become legal is not low, a very active parallel market might well develop.

[English]

The Deputy Chairman: You have told us what will happen if the prices are not kept low. My question is: What will the market do to the prices? The assumption that has been implicit in the room up until now is that legalization will cause the supply of drugs to increase to match demand. Therefore, the economic incentive would be removed for illegal suppliers. When the thought is introduced that, in fact, economic forces may drive the price of drugs up if they are legalized, the message, again, comes back to the committee that we will still see the violence and criminality associated with the drug trade for which we assumed legalization was the cure.

[Translation]

Mr. Labrousse: In Holland, where there is widespread legalization, prices are low and there is very little violence. And in countries with relatively high repression, the classical model exists. Holland is an example of what we believe implicitly, although we're not talking about true legalization, the effects are somewhat similar to those of legalization. I do not think there is a contradiction because the practice in Holland, not the law but the practice, is obviously very different from in France.

[English]

Senator Banks: You have considered trade on a global scale, which has, I am sure, included our country. The conventional wisdom in Canada is to attach motorcycle gangs to the drug trade and to assume - I think most of us assume by reading newspapers - that much, if not most, of the illegal drug trade is done at the retail and distribution level by motorcycle gangs. Is that a reasonable attribution, or is that just a bit of show business? Is there someone bigger behind it, or are they the perpetrators of the drug trade in Canada?

[Translation]

Mr. Labrousse: You clearly said "at the retail and distribution level." It is clear that motorcycle gangs are not importers, they are the distributors. So they play a role at the retail level, but they are not the main players.

I have read in police reports that they do in fact manufacture synthetic drugs like amphetamines and that they also organize cannabis-growing in some cases. They play an important role in these areas, but as far as hashish, heroin and cocaine go, their role is simply one of an intermediary. A much more important role is played by Chinese organizations for heroin, Colombian organizations for cocaine and Pakistani organizations for hashish. Motorcycle gangs are simply subcontractors for these organizations. I am not an expert on the situation in Canada, but this is the impression I have from what I have read.

Senator Stollery: I have been to Colombia 19 times and I know the country very well. I have a fairly good grasp of the cocaine problem. In France and in Europe, if I understand correctly, heroin is the major problem today, whereas here, the problem is cocaine. Heroin is also a problem, but to a much lesser extent.

Mr. Labrousse: That needs to be qualified.

Senator Stollery: I am from Toronto, and in the 1940s and 1950s, there was much more talk about heroin than there is now. When I talked to my friends in Miami, everyone said that it was the world capital for funding the drug trade. I would say that they lost the war against drugs 20 years ago. The money is now everywhere, but no one talks about it. They talk about biker gangs, but who are the people behind these gangs? The New York Times, ten years ago, talked about billions of dollars. I think anti-drug policies have made criminals, who do not pay taxes, richer. No one ever talks about the people behind these organizations. Is it because it is too dangerous?

For example, if I arrive in Miami from Colombia with 5 kilos of cocaine, what am I going to do with the drug if I do not speak English and if I do not know anyone? Someone will have to be there to receive it, won't they? Where are the people who are funding this trade and who are in charge in North America? Why doesn't anyone talk about these huge sums of money and the people who are behind this trade?

Mr. Labrousse: In response to your first comment, heroin has long been the main problem for European countries and France. We are currently seeing a sharp decline, and this is probably because of substitution programs, methadone, fear of AIDS, and so on. All indications in France, for example, show that fewer users and small traffickers are being arrested and less heroin is being seized. Heroin addicts who have been treated are getting older and the number of deaths due to overdose is on the decline. I think that is true in a number of European countries, not all of them, because Great Britain, for example, still has a very serious heroin problem. However, there is an undeniable decrease in problems caused by heroin. However, the presence of cocaine in Europe is on the rise, both behind the scene, in well-integrated circles like the stock market and entertainment, and, for the past two or three years in France, on the streets in the suburbs, where it has become a multi-use drug that is combined with other drugs. To clarify your vision, heroin use is on the decline and cocaine use is on the rise, even if it is heroin that continues to pose a problem.

In the situation you have outlined, I do not much believe in the idea of a "big boss" with a white collar, who may be a political figure in our countries, in the United States, France or Europe, and who would be behind these operations. It may sometimes exist, of course. In my opinion, the situation is very simple: organized crime has people in Cartels like Pablo Escobar who carry out the operations, and its white collar money launderers include accountants, professionals, and lawyers, who are very well prepared and do not have a criminal background. These people place the money in respectable banks where their reception is problem-free and where a blind eye is turned to the situation. Instead of a "big boss"-

Senator Stollery: There are several "bosses."

Mr. Labrousse: Yes. I think it is more a situation where mobsters have employees who are very competent and present able people who are not being monitored by the banks.

In the case of Raoul Salinas, the President of Mexico's brother, the City Bank accepted major sums of money without any verification. What is even more serious is that there are still no trials. The case will extinguish itself by prescription. So the American government is acting in complicity because the City Bank is very important. Those are four situations where there is no deus ex machina behind them. It can be explained quite easily. In many cases, these lawyers and accountants, et cetera, have been tried.

Some times people do have a tendency to fantasize. If drug money were removed from the world economy, would it not collapse? That is an exaggeration. The weight of the drug trade on the world economy, even if it is $500 billion per year, must not be exaggerated. Are there countries where the economy would collapse if drugs were removed? Maybe not countries, but some states in large countries, and Florida would in fact be one of them. In the early 1990s, a report by a conservative American senator stated that Florida's economy was based in part on the deposits made by Colombians. There are still just as many Colombian banks and just as much excess money and bills in banks in Miami. That also occurred to some extent in Texas. There is an excellent American magazine entitled Money Laundering Alert that analyzes this situation and explains all of these trends in Miami.

It is clear that Colombian and Mexican deposits play an important role today in the economy of this State, which is the fourth most populated in the United States. If these deposits were withdrawn overnight, it could cause Florida's economy to collapse. This shows that the United States is also benefiting to some extent. The American economy could do very well without money from drugs and other illicit activities. Some American banks might have trouble. Remember the Russian funds that the Bank of America had received - a sum of $13 billion - that went undetected. A rival bank had to denounce this export of Russian funds coming from the IMS for the matter to be raised. All of the large states have a very lax attitude toward suspicious funds.

[English]

The Deputy Chairman: I would just ask you one last question by way of wrapping up of our morning's hearing and as a teaser for our witnesses this afternoon. I have here a release from the Canadian Police Association. I will ask you for your views on this comment. The Canadian Police Association sates in this release:

"The social experiment of countries with drug liberalization policies demonstrates that crime, violence and drug use, go hand in hand", said Orban. "When illicit drugs are legalized, drug usage increases; the demand for chemical drugs increases, and crime increases. The costs of drug liberalization will be astronomical, not only in terms of health care and social services, but in true human terms. Sweden learned from its permissive policies of the sixties and seventies, and has since moved to a drug eradication strategy that has proven to be far more successful. Canada should learn from the mistakes of others."

Would you care to comment?

[Translation]

Mr. Labrousse: It is true that Sweden has once again started taking a more liberal stand. The last Minister of Justice, for example, stated several times that he had smoked cannabis; the argument can in fact be turned around. As for increased consumption due to legalization, there is no scientific data to prove it.

Italy changed its policy three or four times. No significant change was noted, in the more liberal or repressive phases. Government policies do not seem to have much influence on users' attitudes. These statements have no real basis, I would even say they are not scientific, they have not been observed.

[English]

Mr. Cohen: Each year, the European Monitoring Centre for Drugs and Drug Addiction, the EMCDDA, which is based in Lisbon, publishes a report in which it tries to compare different indicator data coming from the different EU member states. According to that data, almost nothing, which is what I also see in this piece of text, can be verified as being true. Actually, Sweden, which has embarked on a very strong fight against drugs, has the highest level of drug-related deaths in all of Europe. How much higher than the rest of Europe, I do not know, but it can be very easily found in the yearly reports of EMCDDA. Perhaps those reports would be interesting literature for you because they give the data available in Europe in a compact format which is easy for you to survey and to determine which of these claims may be true.

We see in Europe very different rates of drug use which usually have nothing to do with local or national drug policies.

I read here, "countries that have legalized drugs." There is no such thing. There is no drug legalization in Europe. For instance, Holland has done something that looks a little bit like it, but only in a small aspect of the whole thing.

"Countries that have legalized drugs have highest rates of illicit drug use and death by overdose per capita in Europe." In Europe, the highest drug use levels are in the U.K. and in Denmark. These countries have not legalized drugs at all. The lowest levels are in the periphery of Europe, which includes Sweden and Portugal.

I cannot see that there is data that would support this type of observation. Fortunately, we slowly have more and more data available for Europe, and it is not really difficult for you to check on as many aspects as you can on these types of allegations.

In the area of epidemiology, we are better equipped with data than other areas that are more or less cultural or moral pronunciations, and that should be taken with a grain of salt for what they are, moral expressions.

The Deputy Chairman: I would thank both witnesses for taking the time and effort to appear before us today. The information that you have given us will be put to good use.

To those of you at home following our work, please visit our Web site by going to www.parl.gc.ca and follow the links to Senate committees. We post witness briefs, testimony and research work relevant to this study, as well as confirmed hearing schedules. Otherwise, you may contact the clerk of the committee by calling (613) 990-0088 for further information or assistance in contacting members of the committee.

The committee adjourned.