TED Case Studies


Colombia Coca Trade


Go to All TED Cases




          CASE NUMBER:          136 
          CASE MNEMONIC:      COLCOCA
          CASE NAME:          Colombian Cocoa Trade

A.        IDENTIFICATION

1.        The Issue

     The coca and poppy cultivation in the Andean jungle is
significantly damaging the environment in the region.  The main
threats to the environment are deforestation caused by clearing
the fields for cultivation, soil erosion caused by several
factors, and chemical pollution from insecticides and
fertilizers.  Additionally, the process of converting coca and
poppy into cocaine and heroine has adverse effects on the
environment as well.  These environmental issues are difficult to
address due to cocažs position as a traditional crop and trade
item, the influence and wealth of the drug traffickers opposing
restrictions, and the issue of national sovereignty.  Most
realize the social impact of the drug trade worldwide, but few
realize the environmental impact.  Hopefully, this case study
will help bring the situation to light. 

2.        Description

     Coca has been an important cultivated crop in the Andean
region for over 4,000 years and has been an integral component in
the trade between the highland areas and the coast for nearly as
long (see COCA case).  The cultural homogeneity of the regions
was first established and maintained through these trade
relationships which are still largely in effect today. 
Archaeologists have discovered numerous artifacts indicating that
the chewing of the coca leaf has been used by the inhabitants of
the region from as far south as Chile to northern Central America
since 2100 BC.  Traditionally, the coca leaf has been chewed to
relieve fatigue and hunger, as it is a mild stimulant. 
Additionally, it has the medical applications of helping relieve
altitude sickness and conserve body heat.  It also provides some
essential vitamins when consumed.  Obviously, these three
characteristics are particularly useful in the mountainous Andes. 
In the historical past the coca leaf has been integral to a
number of religious ceremonies, based on prehistoric use
patterns.  The use of coca has always figured prominently in
Andean cultural and religious daily life and continues to do so
even today.

     The coca leaf contains less than 1% cocaine and has much the
same effect as caffeine.  Therefore, even though cocaine is
processed from coca leaves, the two products are dramatically
different in effects and usage.  One of the challenges in
limiting coca growth is to satisfy this benign traditional demand
while eliminating the cash crop business that supplies the
cocaine producers.

     The evolution of coca into the cash crop of the Andes has
been occurring for the last century.  From the commercial (Coca
Cola is widely known for past usage of the drug in their product)
and medicinal (along with opium, cocaine was used to alleviate
pain in the injured during the Civil War and afterward) sales of
the early twentieth century to the multi-billion dollar drug
business that exists today, coca had and has a significant
influence upon economic life in the Andes.  Strategies to arrest
the drug problem can be separated into two distinct approaches: 
reduction of demand and reduction of supply.

     When considering the problems of the drug use, most of the
attention of scholars and professionals focuses on the social and
economic aspects of the situation.  Until recently very little
work has isolated the environmental consequences of the
increasing coca cultivation, which are considerable.  The Andean
region is among the most ecologically diverse and sensitive areas
of the Earth and it has been subjected to increasingly stressful
abuse in recent years as a result of drug crop cultivation. 
There are three primary environmental consequences of coca and
poppy cultivation: deforestation and the destruction of the
habitat, soil erosion, and pollution of both air and water. 
Additionally, the processing of the raw drug crops into their
refined forms also has a destructive environmental consequence.

     Easily the most visible environmentally destructive effect
of coca and poppy cultivation is deforestation.  During a fifteen
year period beginning in the 1970žs, 700,000 hectares of rain
forest in the Amazon basin was destroyed to clear land for coca
growth.  The immediate effect of deforestation is the reduction
of natural habitat and subsequent reduction in the bio-diversity
of the region.  A secondary effect of the deforestation derives
from the typical method of preparing an area for cultivation
through a slash and burn procedure.  This burning is the major
source of air pollution in the jungle.  Though these consequences
are significant, the most critical effect of deforestation is
that it leads to soil erosion.

     Due to the illegality of coca and poppy growth the farmers
place their fields on hillsides, which are more difficult for the
government agents to reach than fields located on the valley
floors.  Because the government does pursue an active eradication
campaign, the farmers rarely expect to enjoy long-term
cultivation of their fields and, consequently, rarely employ soil
conservation techniques.  The coca fields are planted along the
contours of the land with little terracing and the fields are
kept bare of plants except for the coca or poppy plants.  These
methods, in combination with the steep slopes, serve to strip
away topsoil with every strong wind and heavy rain, very quickly
making the fields infertile not only for further cultivation but
for jungle plant life as well.  Recent observers over-flying the
jungle describe it as a patchwork quilt of green broken by
patches of gray desolation.  In addition to causing soil
infertility, the topsoil runoff fills waterways and rivers with
sediment changing their courses, causing flooding, and killing
fish and aquatic plant life by lowering the oxygen content of the
water and smothering the river bottoms.  Locals who used to
depend on the large fish in the rivers for food, no longer find
any fish large enough to eat.

     Pollution is also a factor in the environmental
destructiveness of coca and poppy cultivation.  The pesticides
used by the growers travel through the soil into the ground water
and eventually into the rivers and streams.  Pesticides are
inherently toxic to the insects but they can also harm larger
animals and people in greater concentrations.  Fish and other
aquatic life are particularly susceptible to this contamination. 
Another source of pollution is the fertilizer used by the
growers, which also enters the water systems after chemically
"burning" the more sensitive vegetation of the region.  The
fertilizer in the water encourages the algae  to grow at
increased rates while killing the organisms that feed on it.  As
a result, the algae overwhelms other aquatic plant life and
restricts water flow.

     The processing of coca leaves into coca paste and cocaine
has its own environmentally damaging effects.  U.S. State
Department studies indicate that ž10 million liters of sulfuric
acid, 16 million liters of ethyl ether, 8 million liters of
acetone, and from 40-770 million liters of kerosenež are poured
directly into the ground by cocaine processors working in the
Andean region, mainly Colombia, yearly.  The consequences of this
pollution are quickly felt in the small rivers where the aquatic
life is devastated.  The primary growing area in southern
Colombia, the Caqueta river basin, is particularly polluted. 
There have also been increasing reports of sickness among the
people and livestock of these areas, who rely on the rivers and
well for water. 

     In addition to its standing as the worldžs premier cocaine
producer, Colombia now ranks as the worldžs third largest
producer of opium, the largest in the western hemisphere.  North
America has been receiving an increasing amount of heroin in
recent years as the Cali cartel has taken advantage of the land
less suitable for coca growth and planted it with poppies.  This
increase in heroin growth in Colombia appears to be unrelated to
the Opium Wars in Southeast Asia as the increase in U.S.
consumption came about only after increased exports from Colombia
had been established.  Thus, the Colombians seem to have
increased demand for their heroin in the U.S. through increased
supply at lower prices and not through supplanting the previous
supply from Southeast Asia.  Estimations place total area under
poppy cultivation at 20,000 hectares, which has ideal growing
conditions slightly hotter and dryer than coca requires.  Though
the effects of poppy growth in Colombia are largely unpublished,
the same farmers are growing both crops and it can be assumed
that similar damage is being committed in poppy cultivation as is
being done in coca cultivation.

     During the last several years drug traffickers have
increased their ownership of agriculturally suitable land four-
fold; they now control through direct or intermediary ownership
8%-11% of all agricultural land in Colombia.  This is extremely
alarming as this control gives the drug traffickers more direct
opportunity to utilize the land for drug crop cultivation, which,
as stated above, is extremely destructive to the jungle
environment.

     In 1992, Colombia only produced 13 percent of the worldžs
coca, but its cartels now have a strangle-hold on the worldžs
cocaine processing, at 70-80 percent of total production and
distribution world wide.  This concentration of business has had
an enormous effect in Colombia.  First, estimates place the total
of drug money repatriated into the Colombian economy to be as
high as $7 billion, this is almost as large as the total
legitimate exports for Colombia which were $7.6 billion in 1993. 
These huge profits exert an enormous influence over every aspect
of life in Colombia.  The trafficking organizations employ
thousands of people from the farmer in the field to irregular
troops and assassins to pilots, chemists, lawyers, and other
professionals.  These vast amounts of money give the traffickers
significant means to protect themselves from the law both local
and national.  Over $100 million is spent on bribes to Colombian
officials yearly according to estimates by U.S. law enforcement
officials.  This level of influence has led some to declare that
Colombia is the worldžs first "Narco-Democracy" which has turned
the corner from trying to contain the pockets of corruption into
a situation where honest officials are trying to do their job
while outnumbered by those who are working for the drug
traffickers.  Evidence of bribery has extended throughout the
Colombian government including the former president of the
national congress, congressmen, judges, army officers, and
policemen.  A comment by Cali cartel leader Gilberto Rodrigez
Orejuela illustrates this, "We donžt kill judges or ministers, we
buy them."  A former DEA officer states the situation just as
clearly when he says that he "cannot think of a single political
or judicial institution that has not been penetrated by the
narco-traffickers."  Even more importantly, the Colombian
constitution forbids the extradition of criminals.  This is a
direct influence of the drug traffickers, whose only fear when
arrested is that they might be subject to a justice system free
of their influence.

3.        Related Cases

     COCA case
     BOLCOCA case
     PLANT case
     COLDEFOR case

     Keyword Clusters

     (1): Trade Product            = COCA
     (2): Bio-geography            = TROPical
     (3): Environmental Problem    = DEFORestation

4.        Draft Author:  Brett D. Schaefer

B.        LEGAL Clusters

5.        Discourse and Status:  DISagreement and INPROGress

     Coca growth has been a part of the Andean economy for
thousands of years, but its growth has never been wide spread as
a cash crop until as recently as the 1970žs when the first large
scale demand for cocaine occurred in the United States.  Largely
through pressure from the United States, Colombia has adopted
U.S. counter-narcotics techniques to compliment their outlawing
of the growth of coca and the production of cocaine.  Though
Colombia is the largest producer and trafficker in cocaine, Peru
is largest grower of coca.  Therefore, Colombian efforts towards
narcotics control and eradication have focused on the processing
and trafficking elements of the drug trade.

     Despite its efforts, Colombia has not constrained the flow
of cocaine.  Indeed, Colombia seems to have lost ground to the
drug traffickers in several key areas.  The traffickers have
exerted their influence over the new constitution in two ways. 
First,  the constitution forbids the extradition of drug
traffickers to the United States where they would receive
legitimate trials and severe sentencing if convicted.  The same
document places a maximum of 12 years incarceration on drug
trafficking convictions.  The large amounts of money available
to the drug traffickers ensures that they will be able to afford
the best lawyers for their defense, many of whom are former
prosecutors.  This premium defense makes convictions difficult in
the United States and even more so in the corruptible courts of
Colombia.

     Though domestic law indisputably classifies coca growth and
cocaine processing as illegal, there has been pervasive popular
resistance towards its actual implementation.  This resistance
resulted in a provincial agreement by the government not to
destroy coca fields smaller than 3 hectares.  This agreement was
broken by the government due to pressure from the United
States.  A second attack on government eradication policies
came from environmentalist groups, allegedly in the pay of the
drug cartels,  which objected to the governmentžs spraying of the
herbicide glyphosate on the grounds that it destroys the
environment and is harmful to the health of the people living in
the region.  The accusations of these groups are weakened by the
fact that this herbicide is fully approved by the USEPA, is used
in over 100 nations world wide, and has received no similar
charges elsewhere.

     Thus, the legal standing of coca growth and cocaine
production is clear, but it meets considerable resistance from
the population who value it for its traditional uses (discussed
under the cultural sub-section), see it as their most
economically profitable crop, by drug traffickers trying to
preserve their livelihood, and by environmentalists who oppose
the pollution of herbicide spraying.

6.        Forum and Scope:  COLOMbia and REGIONal

     The illegality of coca growth and cocaine production is
officially a strictly internal matter of the Colombian
determination, which has decided to comply with the 1988 United
Nations Convention Against Illicit Traffic in Narcotic Drugs and
Psycotropic Substances.  However, the reality of the situation is
quite different.  The United States has considerable influence
over the drug policies pursued by Colombia, just as it has
considerable influence through out the Western Hemisphere,
through the distribution of aid and economic agreements.  The
United States has also used limited military action to aid the
DEA in crop destruction and drug seizures, but has withheld full
military action because of the diplomatic complications. 
Colombia is not willing to give permission to the U.S. for an all
out effort to eradicate the drug business.

     The U.S. has passed judgment on drug producing nations since
1986, essentially determining whether the country is contributing
sufficient efforts towards counter-narcotics programs.  A failing
rating strips the country of its foreign aid eligibility and
preferred trade status, both of these being strong deterrents to
drug policy rebellion.

7.        Decision Breadth:  Colombia and MANY

     The effects of limiting coca and poppy growth have both
local and global consequences.  Local consequences are the
deforestation, pollution, and soil erosion which would be averted
through the elimination of the harmful cultivation techniques
utilized by farmers specializing in drug crops.  The world would
directly benefit from the preservation of the tropical jungle
that provides oxygen and a large portion of the worldžs bio-
diversity.  

8.        Legal Standing:  LAW and TREATY

     It is against the law in Colombia to grow coca (since
1947) and poppy or to produce cocaine or heroine, however this
law is mostly enforced due to pressure induced by U.S. treaties
requiring full compliance with the 1988 United Nations Convention
Against Illicit Traffic in Narcotic Drugs and Psycotropic
Substances.  The punishment for non-compliance with U.S. efforts
or the UN Convention is the retraction of foreign aid and, for
the Andean Region, expulsion from the Andean Trade Preferences
Act (essentially an agreement allowing barrier free access to
U.S. markets, for products made by industries not considered
threatened by foreign trade or vital to U.S. interests, in return
for full compliance with the UN Convention).

C.        GEOGRAPHIC Clusters

9.        Geographic Locations

     a.   Geographic Domain   :  South America [SAMER]
     b.   Geographic Site     :  ANDES
     c.   Geographic Impact   :  COLOMbia

     This case study is concerned with Colombia, but other
principal coca growers are Peru and Bolivia and the environmental
damage expressed in this study as a result of cultivating these
crops can be reasonably extended to these regions.  Indeed, the
damage in Peru is estimated to be higher than that in Colombia,
as it is the worldžs major producer of coca (see COCA case on
this).

10.       Sub-National Factors:  No

     A provincial agreement had been reached protecting fields of
drug crops below a certain size from herbicidal spraying, but
this agreement was withdrawn. 

11.       Type of Habitat:  TROPical

D.        TRADE Clusters

12.       Type of Measure:  Export Ban [EXBAN]

     Cocaine and heroin are controlled substances world-wide and
any trafficking in them other than for specific medical purposes
is strictly forbidden.

13.       Direct vs. Indirect Impacts:  DIRect

14.       Relation of Measure to Environmental Impact

     a.   Directly Related    :  YES  COCA
     b.   Indirectly Related  :  YES  FOOD
     c.   Not Related         :  NO
     d.   Process Related     :  YES  DEFORestation 

     The coca and poppy fields are not directly destructive to
the environment, it is the methods utilized in their cultivation
that result in the destruction.  The deforestation committed in
clearing the fields, the chemical pollution from insecticides and
fertilizers, and the soil erosion are inevitable with the current
method of cultivation.  Additionally, the chemicals used in
processing the raw crop into the narcotic are environmentally
harmful as well.

     Indirectly related to the problem is the situation of food
crops.  The farmers often have switched to growing drug crops for
economic reasons, placing a greater stress on the environment as
the farmers hunt to supplement their diets.  If the farmers do
grow subsistence crops in addition to their drug crops, both
crops are generally destroyed by drug enforcement officers
through indiscriminate aerial spraying because the two fields are
either overlapping or adjacent to one another.

15.       Trade Product Identification:  COCA and products 

16.       Economic Data

     In 1993 total legal exports from Colombia were $7.6
billion, During that same year the DEA estimated that Colombian
drug traffickers repatriated up to $7 billion in laundered drug
money into the Colombian economy.  Essentially, the drug trade
is returning as great a profit as the total exports of the
country - with no recipients but the drug cartels who use that
wealth to sustain their enterprise.  Is it any wonder that the
Government has difficulty handling the situation?   In 1993, coca
returned a greater profit than any legally cultivated crop in
Colombia by 15%.  In fact, the only crop to return a greater
profit than coca was poppy, which returned a profit 22 percent
higher than coca.

17.       Impact of Measure on Trade Competitiveness: MEDium

     There are two arguments for the actual effects of the ban. 
First, that the ban raises the demand of the product to the
extent that growing coca is too profitable for the farmer and
trafficker to forgo.  The opposing view believes that, without
the ban, demand for the product would skyrocket and, thus, its
removal would have little effect on driving prices down.

18.       Industrial Sector:  PHARMaceutical

     Coca and poppy growth is agricultural in nature, while the
processing of the raw material into the final products is done in
what is essentially a light chemical manufacturing process.

19.       Exporter and Importers: COLOMbia and USA

     Up to 20 percent of the Andean region is suitable for coca
production with the primary producers of raw coca being Bolivia,
Colombia, and Peru.  However, the primary exporter of processed
cocaine products is Colombia.  Primary importers of processed
cocaine are the United States, Western Europe, Japan, and more
recently Eastern Europe.

E.        ENVIRONMENT Clusters

20.       Environmental Problem Type:  DEFORestation

     Deforestation is occurring at a staggering pace in Colombia
as coca and poppy growers increase the number of fields under
cultivation and move from depleted land no longer able to support
the crop.  The effects of the crop field expansion are compounded
by the fact that every planted hectare of coca or poppy requires
two and one-half hectares of forest to be cut.  "At the present
rate of destruction... Colombia will lose a third of its
remaining forests and jungles by the end of the century."

     The habitat loss resulting from the coca and poppy
cultivation stems from two characteristics of the farmeržs
cultivation techniques.  Because the drug crops return a greater
profit than most legitimate crops, the farmers can purchase
fertilizer that is not economical for legal crops.   Because the
fertilizers create a greater yield, the farmers are not as
concerned about preserving the soil.  Also, the crop eradication
by the Colombian government and the DEA does not allow the farmer
the luxury of anticipating a long term occupation of his field,
therefore the farmer is more concerned about short-term growth
than about sustainability.  To make access more difficult, the
farmeržs plant their crops on freshly cleared hillsides aiding
heavy soil erosion from wind and rain.

     Nitrates used by coca and poppy growers as fertilizers
pollute the water ways causing fish deaths and spurring abnormal
algae growth.  The chemicals used in processing the raw products
into the drugs range from sulfuric acid to gasoline to sevin
(which has been used to create poison gas in Iraq).  Estimates of
chemical wastes dumped into the ground and streams are in excess
of 200,000 tons per year.  

21.       Name, Type, and Diversity of Species 

     Name:          Coca
     Type:          Plant
     Diversity:     51,220 higher plants
                    per 10,000 km/sq
                    (Colombia)

     The damage comes from the effects of the deforestation and
chemical pollutants introduced into the environment from these
activities.  The waterways have been clogged with silt running
off of the stripped hills and contaminated by the toxic chemicals
being dumped into streams by drug processing plants.  As a
result, the fish population and aquatic plants have been
decimated to the point that Dr. Urrelo, an environmentalist
working in the area for the past 20 years, has declared the
"small rivers dead." 

     The deforestation and cultivation of drug crops is also
having an effect on the wildlife of the area, particularly birds. 
The lack of appropriate habitat has cut the diversity of the bird
population dramatically according to environmentalist Dr. Hern,
who estimates it as low as 1 percent of its level 30 years ago. 
Compounding the reduction in habitat, the farmers of drug crops
often do not grow subsistence crops and hunt the birds and other
animals as food.  Plant diversity is also suffering severely
with estimates stating that 1/3 of Colombiažs total remaining
forestry will be gone within the next five years.

22.       Resource Impact and Effect: High and SCALE

     Even at the current rate of deforestation over 1/3 of all of
Colombiažs forest will be gone in 5 years, much of the cleared
land being abandoned after two or three seasons due to flagging
fertility.  Little wildlife exists in the rivers or the forests
near populated areas making life more difficult for those not
participating in the drug trade to prosper or even survive.  The
soils in the tropical region of Colombia are sand and poor for
plant growth underneath the thin topsoil.  The deforestation
caused by coca and poppy producers and non-existent soil
conservation techniques they practice have led several experts to
theorize that the region could end up in a situation similar to
that of Ethiopia or Somalia within 50 years, i.e. a fast growing
population that is larger than the food production can support
due to poor agricultural soils or techniques.

23.       Urgency and Lifetime:  MEDium and 100s of years

     Tropical jungles are one of the most delicate ecosystems on
the planet, easily disrupted and extremely difficult to restore
once harmed.  The jungle is being destroyed at a rapid rate and
in a manner which makes recovery extremely difficult.  The soil
erosion and destruction of soil microbes necessary for plant
growth make this recovery process even longer and more
difficult.

24.       Substitutes:  REHABilitation

     In this case study there are two aspects to be addressed for
substitutional products.  The first environmental effect of the
coca and poppy growth deals with deforestation, soil erosion, and
reductions in bio-diversity.  The jungle environment of South
America contributes significant supplies of the worldžs oxygen
and includes a large proportion of the worldžs species of both
plants and animals, neither of these can be substituted for. 
They can be nurtured back to health if given enough care and
active cooperation by the farmers and general industry that use
the forest land, including the coca and poppy growers.  The
second possibility is finding a substitute for cocaine, heroine,
poppy or coca.  The substitution of the drug crops or the
processed drugs would solve some of the environmental
degradation, however, most would find this solution unacceptable
because it would not solve the social problems related to drug
abuse.  Rehabilitation has proven to be a problematic solution as
most of the patients require multiple sessions of treatment. 
Even though they do become "clean" for a time, upon leaving the
confines of the treatment center the circumstances which
encourage them to  abuse drugs remain unchanged.

F.        OTHER FACTORS

25.       Culture:  Yes

     The traditional coca leaf use extends back at least to 2,100
BC in the Andes, according to archaeological finds.  During the
past 4,000 years coca has established a solid niche in the
everyday life of rural Andean people, both Indian and those
Europeans living there for centuries.  The coca leaf contains
less than 1% cocaine and has much the same effect as caffeine,
therefore, even though cocaine is processed from coca leaves the
two products are dramatically different in effects and usage. 
The use of the coca leaf may be mildly addictive, an effect such
as caffeine addiction, but not to the damaging level of cocaine
or heroine consumption.  Traditionally, the coca leaf has been
chewed to relieve fatigue and hunger, as it is a mild stimulant. 
It also has medical applications through helping to relieve
altitude sickness and conserve body heat.  It also provides some
essential vitamins when consumed.  These three characteristics
are particularly useful in the mountainous Andes.  The coca leaf
is also integral to a number of religious and cultural
ceremonies. 

     A key problem of illuminating the coca cultivation is the
fact that most growers regard the crop as traditional and
necessary to their lives, therefore they resist government
efforts to restrict growth.  The challenge is to provide for this
traditional demand while destroying the commercial cultivation of
coca for cocaine.

26.       Trans-Boundary:  Yes

     The drug trade is an international problem of both supply
and demand.  Cocaine and heroine permeates nearly every nation on
the globe, either as a grower, a consumer, or a routing nexus
between the two.  It is a multi-billion dollar industry involving
all levels of commerce from individual purchases to Wall Street
investments of profits. 

27.       Human Rights:  Yes

     There is a basic freedom issue between the consumption of
drugs and their growth or the protection of society as a
responsibility of the government to its citizens.

28.       Relevant Literature      

Alternative Coca Reduction Strategies in the Andean Region. 
Office
     of Technology Assessment, Congress of the United
     States.  U.S. Government Printing Office, Washington,
     D.C.  July 1993, 41-3.
BNA International Environment Daily, December 8, 1994.
BNA International Environment Daily, January 25, 1995.
Clawson, Patrick and Rensselaer Lee, Consequences of the Illegal
     Drug Trade.  USAID. Washington, D.C., 16-7.
Clawson, Patrick and Rensselaer Lee. "Crop Substitution in the 
     Andes," Office of National Drug Control Policy, 41.
"Colombian Economic Reform: The Impact of Drug Money Laundering
     within the Colombian Economy," DEA-94072 Drug
     Intelligence Report, Intelligence Division, Drug
     Enforcement Administration, U.S. Department of Justice,
     September, 1994.
Lee, Rensselaer, "Global Reach: The Threat of International Drug
     Trafficking."  Current History, May, 1995, 207-211.
San Francisco Chronicle, March 20, 1995.
Sweeney, John, "Colombiažs Narco-Democracy Threatens Hemispheric
     Security."  The Heritage Foundation, 1-2.
Trends in Developing Economies, The World Bank.  1994.  Pp 112.
Washington Times, July 17,1994.

                       


Go to Super Page

1/11/97