From November 2017 onwards American forces in Afghanistan, with support from the Afghan government, have engaged in a campaign of strikes (mostly aerial) against drug labs. The campaign was predicated on the claim that the Taliban had been taking over the drugs trade and in particular heroin refining. By hitting at the drugs trade, therefore, Americans and Afghan government were hoping to stem the financial flows towards the Taliban, and slow their overall effort. As of end May 2018, they claimed to have hit around 100 of them, causing large-scale damage. The campaign elicited varying comments in the media and by analysts. The media were mostly positive, whereas analysts mostly critical. In particular David Mansfield pointed out how there was evidence of strikes hitting simple houses, where low level processing of opium might have been taking place in stead of heroin refining, and of significant civilian casualties.
This briefing paper is a fort attempt to assess the American-Afghan ‘campaign against the labs’ within the context of Taliban operations within the narcotics trade and based on sources among the Taliban and among drug smugglers. Of course, both these sources are biased, but so are other sources used so far in the on-going debate. As the reader will realise as he proceeds further, these sources made some startling admissions, which do not seem to be designed for propaganda purposes.
The Taliban’s campaign for the labs
Three different Taliban sources admitted that in the recent past the Taliban’s leadership decided to enter the heroin refining market in Afghanistan. One of these sources detailed that the decision was taken in 2015, as the Taliban struggled to raise enough taxes due to indiscipline among their commanders in the field, and had started seeing some of their donors in the Arab Gulf reducing their commitments. Initially the decision was taken with the aim of boosting the revenue of the Central Financial Commission of the Quetta Shura. Instead of simply taxing the profits of heroin refiners, the Taliban would take the whole profits of the new labs they were going to open, buy or seize.
And so they did. A source in the Central Financial Commission said in June 2018 that in the course of about three years the Taliban had managed to acquire control over about 26% of the heroin refining market in Afghanistan. This might be a far cry from claims by the US military of the Taliban having ‘taken over’ the drugs trade, but it is nonetheless a major development. By 2016-17, the Taliban’s labs were producing revenue in excess of $150 million a year, according to the source.
This development is important for at least two reasons, neither of which was the intended one (boosting the finances of the Quetta Shura).
For the first time since the Taliban Emirate the Taliban have been directly challenging the interests of many drug traffickers. Heroin refining traffickers are not pleased, although they cannot not move against the Taliban given that they were under even greater pressure from both the Afghan authorities and the Americans on one side and the Islamic State on the other (in eastern Afghanistan). Even those who are not directly involved in refining heroin might not be pleased to see the Taliban trying to assert growing control over the trade. The source in the Finance Commission estimated that 80% of the traffickers were upset with the Taliban. A Ishaqzai trafficker, contacted in June 2018, probably represented the view of many of his colleagues when he said that Haibatullah is suspected of being under pressure from the Iranian authorities (with whom he has close relations) to bring drug trafficking under control.
So Haibatullah risks alienating what used to be a key constituency of the insurgency, even if the traffickers have always hedged their bets between insurgent and pro-government actors, paying both sides. But perhaps the most important consequence of the Taliban’s move to become an direct actor in the drugs trade has been growing competition among the Taliban for drug revenue, which could also be described as ‘corruption’.
Different Taliban factions accuse each other of misappropriating the profits of the heroin labs. A source in the Financial Commission indicated that perhaps only 10-15% of those profits reach their originally intended target, the coffers of the Commission. The rest is appropriated along the way by labs operators, Taliban shadow governors, front commanders, and senior figures in the Quetta Shura. The opposition to Taliban leader Haibatullah within the Quetta Shura accuses him of having increased the powers of the shadow governors in controlling this flow of revenue, in order to make it easier for them to divert funds to Haibatullah himself and his allies. However, figures close to Haibatullah point out that the most powerful of all shadow governors (especially when it comes to drug revenue) is Abdul Manan in Helmand, who is now one of the leaders of the Ishaqzai faction opposed to Haibatullah’s leadership. Over 40% of Taliban heroin refineries, say the sources, are in Helmand under Abdul Manan’s control, and he has been transferring very little money of late to Quetta too. He has not been transferring it directly to Haibatullah either. One of the Ishaqzai smugglers openly admitted in June 2018 that most smugglers prefer Abdul Manan and the Ishaqzai faction, as opposed to Haibatullah. Abdul Manan in particular is reported to be lobbying the smugglers hard and to be very supportive of their interests. Another Taliban heavyweight in good terms with the traffickers and opposed to Haibatullah is Qari Baryal, the leader of the Shura of the North.
Whoever might have started diverting funds, the aims are clear. Personal enrichment probably plays a part and for sure there are rumours about all the main players in the Taliban’s heroin refining business (Abdul Manan, Haibatullah, Gul Agha Ishaqzai, Mullah Shireen), that they have been moving money to Dubai. But perhaps even more important is the lack of trust in the Quetta Shura’s budgeting process. Haibatullah dislikes the idea of the money making it to the central coffers of the Financial Commission, because then he would have to share it with some of his unappealing colleagues, like the prevaricating Serajuddin Haqqani. It is worth mentioning here that Haibatullah should be face a ‘party congress’ soon, where his leadership will be at stake, and that Serajuddin has made clear that he intends challenging Haibatullah for the top job. Haibatullah is therefore running his congressional campaign, trying to build up support. Not the most popular Taliban leader ever, Haibatullah is offering his constituents incentives for supporting him, instead of the committed jihadist Serajuddin, or of a candidate from the Ishaqzai faction, probably Obeidullah, cousin of deceased leader Akhtar Mohammad Mansur. Say sources that Haibatullah is closing not just one eye, but even both of them as his subordinates all dip their hands in the flow of drug revenue and take their cut, leaving little for the Taliban as an organisation. Not only individual leaders and commanders, but even whole fronts benefit from this largesse, while the Taliban’s shadow state machinery and military apparatus suffer. Although the Taliban have substantial funds accruing from donations of security agencies around the region and beyond, the missing hundreds of millions do hurt.
The fact that Taliban leaders are busy chasing the drug revenue flow comes to the detriment of the cause of jihad and in part contributes to explain why this year too the Taliban’s campaign is falling for now short of expectations. The desire to accumulate funds for one own’s combat group (moreover given that the Finance Commission might in the future be that good at providing) is only beaten in terms of negative impact on the Taliban’s fighting morale of allegations of personal enrichment.
The impact of the American/Afghan campaign for the labs
So while the Americans and the Afghan government might have inflated claims of the Taliban taking over the drugs trade and might have over-estimated the positive impact of it on the Taliban’s military effort, they were not entirely wrong. But what has been the impact of their campaign against the labs so far?
A Taliban source admitted that 16 of their own labs were hit during the campaign until mid-June, in the provinces of Helmand, Farah and Badakhshan. More than 100 strikes were carried out, so if these figures are right, the intended target was reached in about 15% of the cases. The remaining targets were either private labs, lesser processing facilities, owned by local families or private entrepreneurs, or simply wrong targets, as investigated by Mansfield. Is this source saying the truth? Hard to be certain, but the source could have denied it all after all; that is the official line of the Taliban, and any evidence of the contrary is safely locked up in intelligence files. Importantly some similar estimates were provided earlier by another Taliban source, contacted through separate networks in March 2018. This second source admitted three months before the other did that out of around 20 strikes in Helmand up to that point, two had hit Taliban labs and one a private lab, with the rest again being lesser processing facilities and wrong targets. This seems to point towards a roughly similar success rate.
Estimating the financial damage inflicted is a bit more complicated. Clearly claims made by the US military were exaggerated, as they estimated the damage on the basis of the street value of heroin in Europe. For the Taliban the real financial damage is:
The cost of setting up the labs, which is very modest compared to the revenue.
The lost drugs and processing ingredients, which are not known and would depend on how much opium and heroin was stored at the labs. A smuggler linked to the Ishaqzai faction of the Taliban claimed in June 2018 that the initial strikes in Helmand destroyed big stockpiles of opium and heroin, worth according to him up to $85 million at the Afghan market value. But these drugs were not necessarily the Taliban’s, so the Taliban’s loss would be significantly lower than the total amount. Then inevitably the Taliban started storing as much drugs as possible away from the labs.
The lost profits until a replacement lab is ready to go.
It is not known how long it takes on average for the Taliban to replace destroyed labs, but given that they have now set-up a whole industry of making heroin labs, probably not long. So if we say that on average the revenue flow out of the destroyed labs was curtailed by a few months we are probably not too far from a fair estimate. The Taliban source in the financial Commission puts the yearly profit of the Taliban labs at $183 million for the last year, and the labs destroyed at 10% of the total. So the damage could be estimated at somewhere around $9 million of lost profit plus any drugs and precursors lost. Incidentally the same source noted that despite the campaign against the labs, profits from the labs rose by around 7-8% during the last year.
Now the Taliban have been moving their labs to more remote areas and tightening security measures. In 2015-17 they indulged in self-confidence, placing the labs in heavily populated areas, close to the poppy fields, but also easy to stop and for the intelligence to duly note their position down. The Ishaqzai smuggler mentioned above commented confidently that the American/Afghan campaign against the labs is just for show, and that it will never succeed in eradicating or seriously reducing drug smuggling in Afghanistan.
Tough choices for the traffickers
The traffickers have been foraging both Taliban and Afghan government actors after 2001, but since 2016 they have been facing a new situation. The American/Afghan campaign against the labs together with the pressure exercised by the Islamic State on drug traffickers in eastern Afghanistan (at least until recently) and with the detention of several high profile traffickers in 2016, has placed drug traffickers in Afghanistan under the strongest pressure since the Taliban ban of 2000. The traffickers regard the Karzai presidencies as their golden age. Even now they are not on the verge of extinction for sure, but despite ever more opium being produced in Afghanistan smuggling operations are no longer as smooth as they used to be. The Taliban for now still consider this constituency essential to their aims and have recently offered tax discounts to the traffickers to help them recover their losses.
Views within the ranks of the traffickers vary concerning the intent of the NUG, whether it is out to favour some traffickers over others, or whether it is out to smash them all regardless. In any case there are enough drug traffickers feeling threatened by the campaign carried jointly by the Americans and Kabul, as to generate a wave of support for the Taliban, as the only defence available against both IS and the Afghan/US campaign. Both the gangs of Haji Watan (eastern Afghanistan) and of Haji Lala (southern Afghanistan), which were heavily targeted by the Afghan authorities in 2016, have for example increased their funding for the Taliban, according to the source in the Financial Commission. These traffickers who are increasing their support to Haibatullah’s Taliban are however a minority. At the same time more and more traffickers fear Taliban efforts to increase their control over the drug trade, and to turn into direct actors within it. Discretely (as claimed by the Ishaqzai smuggler mentioned above) many drug traffickers have tried to boost ties to government officials and anti-Haibatullah Taliban in the last year or so, in order to evade both Taliban pressure and US/Afghan government targeting.  David Mansfield, ‘Bombing Heroin Labs in Afghanistan’, London : LSE, January 2018.