TNAG-0414-FCO40-460-Review-of-narcotics-problem-in-Hong-Kong-1973 — Page 169

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Lao law prior to November 1971, was based upon an old French law which did not prohibit poppy cultivation and sale of opium in Luang Prabang and other northern provinces of Sam Neua, Xieng Khoung, Houa Khong, and Phong Saly primarily because the law could not be enforced and second because tribal peoples needed the cash which opium netted. The Government did not proscribe the cultivation and sale of opium in Vientiane and the southern provinces. It did, however, attempt to control and monopolize the trade as a source of state revenue for financing the Lao Armed Forces.

In October 1963 Deputy Prime Minister and Minister of Finance Phoumi Nosovan officially directed Gen. Ouan Rathikoun to take responsibility for negotiating the sale and traffic of opium as a Gov- ernment monopoly. Accordingly, a contract was signed with the Sacda Co. as the sole agency responsible for regulating the sale of opium.5 Lao Government enforcement agencies were directed to arrest any other merchants dealing in the opium trade not sanctioned by the Sacda Co. Thus while the sale of and trafficking in opium was not illegal by law, it was made subject to Government regulation and viola- tions were liable to arrest and fine.

When Quan assumed responsibility for regulating opium traffic in 1963 he was permitted to keep a portion of what he collected "for his efforts." Ouan claims that the amount collected never exceeded more than $800 per month.

While Ouan had a legal responsibility to control opium in Laos there have been countless reports that he was also implicated in illicit narcotics activities. According to several U.S. officials in Southeast Asia, Quan provided the transportation and protection to the refin- eries. These same officials indicated that Lao soldiers guarded the laboratory at Ban Houei Tap which was reportedly owned by General Quan.

In 1964, 5 months after Ouan assumed control of the effort to con- trol opium, he recommended that that effort be abolished. In a letter to Prime Minister Souvanna Phouma, dated April 10, 1972, Ouan said.

After being ordered to do so in 1963, I learned about those who traded in opium and about the quantity of opium produced in Laos and sent from Burma. I also learned of the number of opium addiets in Vientiane.

After having controlled opium for five months, I saw that it was not good to continue to control it because such control was criticized by foreigners. I then sent my report to General Phoumi, informing him that it was not good to control opium because all merchants were transacting their sales and purchases outside the established channels, since they were losing money by remaining in channels.

General Phoumi then issued an official order for stopping the control of opium on 2 May 1964.

In spite of this order, Onan continued his efforts to gain control of opium transactions in Laos. He told the Survey Team on August 27, 1972, that it "took him until 1967 to get it under control." He did this by concentrating on the "big entrepreneurs. As a result some small

5 The former head of the Sacda Co. is a quaint character. His name is believed to be Ts'ai Kuang-jung. His known aliases are Sakda, Savang Chaman, and Jua Luong-jung. He was born in Thailand around 1925. He left that country in 1958 and after a short stay In Kunming China went to Laos in 1959. During his stay in Laos he was reported closely associated with the Chinese Communists, was identified as head of Air Vientiane and an administrator for General Ouan's opium affairs. He is now believed to be living in Chleang Mal, having returned to Thailand in 1971.