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PrivateSecurityCompanies

TheCaseforRegulation
SIPRIPolicyPaperNo.9

CarolineHolmqvist

StockholmInternationalPeaceResearchInstitute

January2005

SIPRI,2005

Contents
Preface
Abbreviationsandacronyms

iv
vi

1.Introduction
Theemergenceofprivatesecuritycompanies
Thediversityoffirms,activitiesandclients
Privatesecurityservicesandthenewsecurityenvironment:problemor
opportunity?

1
1
3
8

2.Privatesecurityintheweakstate
Privatesecurityasasymptomofstateweakness
Thepromiseofprivatesecurityinweakstates?
Thestateatthecentre

11
11
17
21

3.Privatesecurityandtheefficientstate
Challengesinoutsourcingpolicyimplementation
Whopaysthepricefortheefficientstatesprivatesecurityfailures?

23
24
33

4.Theglobalwaronterrorismandprivatizationofsecurity
UScounter-terrorismstrategyandtheattractivenessoftheprivate
securitysector
Politicallegitimacyintheglobalwaronterrorism

35
35

5.International,regionalandnationalresponses
Issues,interestsandoptions
Theinadequacyofinternationallegalinstruments
UNapproachestoprivatesecuritycompaniesandprospectsforan
internationalregulatorybody
Self-regulation:theindustryanditsinternationalnon-stateclients
Costsandbenefitsofself-regulation
Existingnationallegislation:modelsforreplication?
Regulationattheregionallevel

42
42
44
45

6.Conclusions:thelimitsofregulation

58

Abouttheauthor

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38

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49
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55

Preface
TheprominentusemadeofprivatesecurityservicesbytheUnitedStatesduringits
Iraqcampaign,andthewayinwhichthisusehasbecomelinkedwithconcerns
aboutbothhumanrightsabusesandbusinessethics,hasuncoveredthetipofwhat
isinfactaverylargeicebergofaproblem.Theservicesprovidedbyprivatecompaniesinthesecuritysectortodaycoveranenormousrange,faroutstrippingand
arguablymakingredundantthetraditionaldefinitionofamercenary.Theyare
drawnuponbothbyweakstatesandbysomeoftheworldsmostpowerfulgovernments.Itishardtoseehowthistrendtowardstheprivatizationofsecuritycan
quicklybeblockedorreversed,giventheincreasingpreferenceforinterventionist
modesofsecurityaction,thegrowingscaleofambitionofpeace-buildingefforts,
and the lack of both money and men to increase or even maintain the levels of
state-owneddefenceandsecurityforces.
Buildingonthebestresearchavailable,CarolineHolmqvistinthisPolicyPaper
addressesthechallengesposedbythemanifoldactivitiesofprivatesecurityservicestodayfromanotablyobjectiveandbalancedperspective.Shegivesasmuch
attentiontothewaysuchservicesareusedbystrongstates,whosedemocraticcredentialsarenotgenerallyindoubt,astothemorecommonlyrecognizedproblem
ofweakstateswhereexcessiveresorttoprivateservicesbothmarksandaggravates
thefragmentationofauthority.Whilerecognizingtheshort-termappeal,andeven
thelogic,thatsuchsolutionsmayhaveinindividualcases,sherightlydrawsattentiontotheproblemsthatlieinwaitifeitherthelocal,orintervening,authorities
delegatethewrongfunctionstoprivateprovidersandfailtodefineandenforcethe
rightstandardsofperformance.Evenincaseswherethereisnoabuseoftrustby
privatecompanies,itishardtoavoidalossoftransparency,ofdemocraticcontrol
andoflocalownershipofsecurityprocessesinthebroadersense.
Havingidentifiedwherethepreciseproblemsandrequirementsforbetterregulationofprivatesecurityactivitieslie,thefinalchapterofthisPolicyPaperdiscussesawiderangeofpossibleapproachestothechallenge.Itsrecommendations
aredirectedat,anddeservecarefulattentionby,internationalorganizationsand
multinational companies as well as traditional nation states and their regional
groupings.Theproposalsoffered,inparticulartotheUnitedNations,theAfrican
Union and the European Union, recognize these organizations will to improve
boththequalityandquantityoftheirconflict-relatedworkambitionswhich,in
thegivenconditions,makeithardforthemtoavoidatleastshort-termrelianceon
privatesectorhelpthemselvesbutemphasizehowimportantitisforthemtoshow
leadershipindefining,andabidingby,theappropriatenorms.

P R EF AC E

Thanksforthiscompellingandthought-provokingstudyareduetotheauthor;to
DrRenataDwan,headoftheSIPRIArmedConflictsandConflictManagement
Programme, for her valuable contributions at all stages; and to Connie Wall,
SIPRIsPublicationsManager,whoeditedthetextforpublication.
AlysonJ.K.Bailes
Director,SIPRI
December2004

Abbreviations and acronyms


ACOTA
ACRI
AMIS
AU
BP
CFSP
CPA
CSC
CSDP
DDR
DFI
DFID
DOD
DRC
DSL
EC
ECOMIL
ECOMOG
ECOWAS
EO
ESDP
EU
EUPM
FARC
FMA
GAO
GWOT
HSPN
HUMINT
ICC
ICE
ICRC
IDIQ
IMF
IPOA

AfricanContingenciesOperationsTrainingandAssistanceProgram
AfricanCrisisResponseInitiative
AfricanUnionMissioninSudan
AfricanUnion
BritishPetroleum
CommonForeignandSecurityPolicy
CoalitionProvisionalAuthority
ComputerSciencesCorporation
CommonSecurityandDefencePolicy
demobilization,disarmamentandreintegration
DefenseForecastsIncorporated
DepartmentforInternationalDevelopment
(US)DepartmentofDefense
DemocraticRepublicoftheCongo
DefenceSystemsLimited
EuropeanCommunity
ECOWASMissioninLiberia
ECOWASMonitoringGroup
EconomicCommunityofWestAfricanStates
ExecutiveOutcomes
EuropeanSecurityandDefencePolicy
EuropeanUnion
EUPoliceMissioninBosniaandHerzegovina
FuerzasArmadasRevolucionariasdeColombia
ForeignMilitaryAssistance
GovernmentAccountabilityOffice
globalwaronterrorism
HumanitarianSecurityandProtectionNetwork
humanintelligence
InternationalCriminalCourt
ImmigrationandCustomsEnforcement
InternationalCommitteeoftheRedCross
infinite-delivery,infinite-quantity
InternationalMonetaryFund
InternationalPeaceOperationsAssociation

AB B R EVIATIONS AND AC R ONYM S

IT
ITAR
JHA
MDM
MNC
MPRI
MSF
MSS
NPRC
NEPAD
NGO
OAU
ODTC
OECD
PA&E
PMC
PSC
QDR
RUF
SAIC
SSR
TTIC
UCMJ
UN
UNHCR
UNITA
UNTAET

informationtechnology
InternationalTrafficinArmsRegulation
JusticeandHomeAffairs
MdcinsduMonde
multinationalcorporation
MilitaryProfessionalResourcesIncorporated
MdcinsSansFrontires
MedicalSupportSolutions
NationalProvisionalRulingCouncil
NewPartnershipforAfricasDevelopment
non-governmentalorganization
OrganizationofAfricanUnity
OfficeofDefenseTradeControls
OrganisationforEconomicCo-operationandDevelopment
PacificArchitectsandEngineering
privatemilitarycompany
privatesecuritycompany
QuadrennialDefenseReview
RevolutionaryUnitedFront
ScienceApplicationsInternationalCorporation
securitysectorreform
TerroristThreatIntegrationCenter
UniformCodeofMilitaryJustice
UnitedNations
UNHighCommissionerforRefugees
UnioNacionalparaaIndependnciaTotaldeAngola
UNTransitionalAdministrationinEastTimor

vii

1.Introduction
It was estimated in March 2003 that 1500020000 private security contractors
wereworkinginIraq,andtheconflicttherewasreferredtoasthefirstprivatised
war.1 Sincethen,boththenumberandthevisibilityofcontractpersonnelinIraq
haveincreased,triggeringabroaddebateontheroleofprivatecompanieswhich
providemilitaryandsecurityservicestostates,corporationsandnon-governmental
organizations(NGOs).However,thephenomenonisneithernewnorexclusiveto
theIraqiconflict.Thepastdecadehasseentheriseandconsolidationofaglobal
industryforprivatesecurityprovision,withover100companiesoperatinginas
manycountriesworldwide.2
Theprivateprovisionofsecurityandmilitaryserviceschallengesconventional
assumptionsabouttherolesofthenationstateasthemainprotagonistinmilitary
affairsandastheguarantorofphysicalsecurityforitscitizens.Intheabsenceof
effectivelegalorregulatorystructures,suchactivitiesraiseissuesoflegality,legitimacyandaccountabilityinthesphereofsecuritypolicy.Thisstudyassessesthe
impactoftheprivatizationofsecurityinvarioussecuritycontextsandexamines
some of the ways in which the international community might respond to this
development.
Theemergenceofprivatesecuritycompanies
AccordingtosociologistMaxWebersconceptionofthemodernnationstate,a
definingcharacteristicisthestatesmonopolyonthelegitimatemeansofviolence,
including the sanctioning, control and use of force.3 Although this view of the
nationstatecontinuestoinformandunderpinmostofthedebateoninternational
security,stateexclusivityinthemilitaryrealmis,infact,anexceptionhistorically.
Theincidenceofthesupplyofmilitaryservicesbyprivateactorsisasoldaswarfareitself.
Ancient armies, from the Chinese to the Greek and Roman, were to a large
extent dependent on contracted forces, as was Victorian Britain, the Italian
citystatesoftheRenaissanceperiodandmostoftheEuropeanforcesduringthe
Thirty Years War of 161848.4  Similarly, private actors have played a role
throughout US military history: contractors have supported the US military in
1 Military-industrialcomplexities,TheEconomist,29Mar.2003,p.56.
2 ForthemostcomprehensiveaccountoftheindustryseeSinger,P.W.,CorporateWarriors:The

RiseofthePrivatizedMilitaryIndustry(CornellUniversityPress:Ithaca,N.Y.,2004).
3 Weber,M.,ed.T.Parsons,TheTheoryofSocialandEconomicOrganization(FreePress:New
York,1964),p.154.
4 ForacomprehensiveoverviewofthehistoryofprivatemilitaryactorsseePrivatizedmilitary
history,Singer(note2),pp.1940;Shearer,D.,InternationalInstituteforStrategicStudies,Private
ArmiesandMilitaryIntervention,AdelphiPaper316(OxfordUniversityPress:Oxford,1998);and
Milliard,T.S.,Overcomingpost-colonialmyopia:acalltorecognizeandregulateprivatemilitary
companies,MilitaryLawReview,vol.176(June2003),pp.68.

2P R IVATE S EC UR ITY C OM P ANIES

everycontingencysincetheAmericanRevolutionaryWarof177583.5Characters
suchasMadMikeHoare,theformerBritishsoldierwhoduringthe1960sheaded
agroupintheBelgianCongocalledtheFifthCommando(commonlyknownas
Les Affreux, or The Horrible), and former French soldier Bob Denard, who
served alongside Hoare in the Congo and later independently in Biafra, Chad,
MoroccoandRhodesia,contributedtotheimageofthelonemercenaryinAfricas
post-colonialwars.6  However, instances of mercenary activity during the 1960s
weresporadicandlimited,withimmediatepersonalfinancialgainthemainmotivation.Althoughisolatedmercenaryactivityisstillcarriedouttoday,itisrelated
moretotherealmofcriminalactivitythantothebroaderdevelopmentoftheprivateprovisionofsecurityservices.7
Theriseofthecontemporaryinternationalprivatemilitaryandsecurityindustry
beganintheearly1990s,withtheemergenceofprivatesecurityproviderswith
clearcorporatestructures.Avarietyofbothdemand-andsupply-sidefactorshave
been associated with the rise of the current corporate security sphere, although
threefactorsaremostoftencited:(a)thedominanceofpost-coldwarfreemarket
modelsofthestate,propellingastrongtrendtowardstheoutsourcingoftraditional
governmentfunctions;(b)theglobaldownsizingofnationalmilitaries,providinga
vast pool of trained former military personnel for recruitment by private companies;and(c)thegradualdisengagementofthemajorpowersfrommanypartsof
thedevelopingworld.8Othercommentatorsviewtheemergenceofprivatesecurity
serviceprovidersasalogicalprogressionfromtheprivatizationofmilitarygoods
production(thearmamentsindustry)inEuropeandNorthAmerica.9
Whereas all these factors have played a part in the broader privatization of
security,theexplanationsfortheindustrysgrowthvarywiththespecificsecurity
contexts.Inweakorfailingstates,privatizationisessentiallyamisnomer,since
consumers have turned to the private sector because of the lack of functioning
5 Worden,L.,Downsizingandoutsourcing,wevesprungPandorasBox,TheSignal,27June
2004,URL<http://www.scvhistory.com/scvhistory/signal/iraq/sg062704.htm>.
6 DenardwasatonepointcontractedbytheUSCentralIntelligenceAgencytosendateamof
20men to support Jonas Savimbi and his UNITA army against the left-wing regime in Luanda,
Angola.Silverstein,K.,PrivateWarriors(Verso:London,2000),pp.14647.
7 Casesofthissortin2004includetheactivitiesofformerUSsoldierJonathanJackIdemain
Afghanistan and Pakistan and the alleged plot by mercenaries to carry out a coup in Equatorial
Guinea.Peele,M.,EquatorialGuineaseekscoupplotevidencefromThatcher,Financial Times,
30Aug.2004.TheIdemacaseillustratedhowthelinesmaystillbeblurredbetweenindependentand
state-hiredsecurityservices:evenNATOforcesbelievedthatIdemaliaisedwiththeUSGovernment
andon3occasionsrespondedtohiscallsforback-up.Smith,C.S.,AtoughnewfaceofUSabroad,
InternationalHeraldTribune,14Oct.2004.
8 Between1987and1996,thenumberofindividualsinnationalarmedforcesworldwidefellby
6million.Spearin,C.,Privatesecuritycompaniesandhumanitarians:acorporatesolutiontosecuringhumanitarianspaces?,International Peacekeeping, vol. 8, no. 1 (2001), pp. 2728. See also
Shearer(note4).
9 E.g.,firmssellingarmamentsmayincreasinglyofferaccompanyingservicessuchasmaintenance
ortrainingintheuseofweapons.Krahmann,E.,ThePrivatizationofSecurityGovernance:Developments,Problems,Solutions,ArbeitspapierezurInternationalenPolitikundAuenpolitik(AIPA),
AIPA1/2003(LehrstuhlInternationalePolitik,UniversityofCologne:Cologne,2003),pp.13and17,
URL<http://www.politik.uni-koeln.de/jaeger/downloads/aipa0103.pdf>.

INTR ODUC TION3

publicsectorsecurityinstitutions.Indeed,inmanycasestherewaslittletoprivatize.Thiscontrastswiththesituationinstrongorefficientstates,whereprivate
actorshavebeenusedtosupplementfunctioningstateinstitutions.10
Twoinstancesofprivatesecuritysectorengagementwereparticularlyinfluential
insettingthescenefortheinitialdebatesaboutprivatesecurityandmilitaryservices:theinvolvementoftheSouthAfricancompanyExecutiveOutcomes(EO)in
theconflictsinAngolaandSierraLeonein199597,andthatofSandlineInternational(aninternationalcompanyregisteredintheBahamasbutwithofficesin
London and Washington, DC) in Sierra Leone in 199798.11 Hired by national
governmentstoprovidedirectmilitaryassistanceandparticipateincombatagainst
rebelforces,EOandSandlineandtheiroperationswerewidelyviewedasrepresentingthereturnofmercenaryactivity,albeitinanewshape.12Thesepioneer
companiesmadenoefforttoconcealtheirprovisionofgunsforhire:indeed,itwas
emphasizedthattheirexistencecouldusherinanewerainthepoliticsofinternationalsecurityinwhichprivatecompanies,intheabsenceofinternationalintervention,couldhelpendconflictsinplaceslikeAfrica. 13
Inreality,therehavebeenfewinstancesofnationalgovernmentshiringprivate
companiestowagewars,andthetwomaincompaniesofferingready-to-goforces
forcombat,EOandSandline,arenowbothdefunct. 14Intheshadowoftherelativelyfewinstancesofgenuinecontractwars,awiderindustryofprivatesecurity
provisionhasproliferated.Castingthedebateasoneaboutthevirtuesandvicesof
mercenarieshasobscuredwhatisinfactamuchbroaderphenomenonandhas
precludedrealcriticalengagementwiththesubjectofsecurityprivatization.
Thediversityoffirms,activitiesandclients
Distinguishing contemporary private security actors from their mercenary forerunners is at once a complex and a straightforward task. Mercenary activity is
illegalunderboththe1989InternationalConventionAgainsttheRecruitment,Use,
FinancingandTrainingofMercenariesandthe1977OrganizationofAfricanUnity
(OAUnow the African Union, AU) Convention for the Elimination ofMer-

10Krahmann(note9).
11ForelaborateaccountsofEOandSandlineoperationsinAngolaandSierraLeoneseeShearer

(note4);Singer(note2);andMusah,A.-F.andFayemi,J.K.(eds),Mercenaries:AnAfricanSecurity
Dilemma(PlutoPress:London,2000).
12Brooks,D.,Mercenariesormessiahs?:thefutureofinternationalprivatemilitaryservices,
International Peacekeeping,vol.7,no.4(2000);foranearlycriticalaccountseeCilliers,J.and
Mason,P.(eds),Peace,ProfitorPlunder:ThePrivatisationofSecurityinWar-tornAfricanSocieties
(SouthAfricanInstituteforSecurityStudies:Johannesburg,1999),pp.3739,URL<http://www.iss.
co.za/Pubs/Books/Blurbppp.html>.
13 SeetheSandlineInternetsiteatURL<http://www.sandline.com/site/>.
14EOhasbeendefunctsince1999,whenanewlawtargetedatmercenaryactivitywaspassedin
SouthAfrica.SandlinecloseditsoperationsinApr.2004.However,itisgenerallyagreedbyindustry
commentators that the dissolution of these companies has been followed by the reformation and
establishmentofnewfirms.

4P R IVATE S EC UR ITY C OM P ANIES

cenarisminAfrica.15However,neitheroftheseinternationallegalinstrumentsis
applicable to the activities of private security companies.16 The United Nations
(UN)definitionofmercenaryactivityintheInternationalConventionhingesona
vague, restrictive criterion of individual motivation by financial gain, while the
OAU/AU convention specifically targets mercenary activity aimed at the overthrowofgovernmentsandofOAU/AU-recognizedliberationmovements.17This
leavesthelegalparametersforprivatesecurityprovisionlargelyunclear.Thelack
ofagreeddefinitionshasobstructedbothanalysisofthebroaderprivatizationof
securityandthedevelopmentofnewinternationallegalandregulatorystructures.
Mostprivatesecuritycompaniesarelikeanyotherprivatecompany:theyhave
conventionalcorporatestructures,operateaslegalentities,andmaintainInternet
sitesandcorporateties.Manyarepartoflargerindustrialconglomerates,someof
them included in the Fortune 500 list.18 Such companies are generally capitalintensive,benefitfromregularsystemsoffinancingandmoveeffortlesslyinthe
internationalarena.Theservicesofferedbyprivatesecurityandmilitarycompanies
range from the provision of operational support in combat, military advice and
training, and arms procurement and maintenance to logistical support, housing,
15TheInternationalConventionwasadoptedbytheUnitedNationsGeneralAssemblyinResolution44/34,4Dec.1989,andenteredintoforceon20Oct.2001.FortheInternationalConventionsee
URL<http://www.un.org/documents/ga/res/44/a44r034.htm>andforthelistofthe16signatoriesand
26partiesseeURL<http://untreaty.un.org/ENGLISH/bible/englishinternetbible/partI/chapterXVIII/
treaty6.asp>.FortheOAU/AUConventionandthelistof26signatoriesand25partiesseetheInternetsiteoftheAfricanUnionatURL<http://www.africa-union.org>.
16Ballesteros,E.,Internationalandregionalinstruments,PaperpresentedatWiltonParkConference on The Privatization of Security: Framing a Conflict Prevention and Peacebuilding Policy
Agenda,1921Nov.1999(thefullconferencereportisavailableontheInternationalAlertInternet
site, Privatization of security: briefings and conference papers, URL <http://www.internationalalert.org/publications.htm>);andSinger,P.W.,War,profitsandthevacuumoflaw:privatizedmilitaryfirmsandinternationallaw,Columbia Journal of Transnational Law, vol.42, no.2 (2004),
pp.52224, URL <http://www.columbia.edu/cu/jtl/Vol_42_2_files/singer.html>. For more on the
inapplicabilityofthe2conventionstocontemporaryprivatesecurityactivitysee,e.g.,Cleaver,G.,
Subcontractingmilitarypower:theprivatisationofsecurityincontemporarysub-SaharanAfrica,
Crime,LawandSocialChange,vol.33,no.12(2000),pp.13149.
17BothdefinitionsderivefromAdditionalProtocol1totheGenevaConventionsof12Aug.1949,
Article47,para.2,availableatURL<http://www.unhchr.ch/html/menu3/b/93.htm>.Sixcriteriamust
bemet:Amercenaryisanypersonwho:(a)Isspecificallyrecruitedlocallyorabroadinorderto
fightinanarmedconflict;(b)Does,infact,takeadirectpartinthehostilities;(c)Ismotivatedtotake
partinthehostilitiesessentiallybythedesireforprivategainand,infact,ispromised,byoronbehalf
ofaPartytotheconflict,materialcompensationsubstantiallyinexcessofthatpromisedorpaidto
combatantsofsimilarranksandfunctionsinthearmedforcesofthatParty;(d)Isneitheranationalof
aPartytotheconflictnoraresidentofaterritorycontrolledbyaPartytotheconflict;(e)Isnota
memberofthearmedforcesofaPartytotheconflict;and(f)Hasnotbeensentbyastatewhichisnot
aPartytotheconflictonofficialdutyasamemberofitsarmedforces.EnriqueBallesteros,former
SpecialRapporteuroftheUNCommissiononHumanRightsontheeffectsoftheuseofmercenaries,
has repeatedly argued that the UN definition needs to be amended to deal effectively with contemporaryprivatesecurityactivity.SeeSinger(note16),p.528.
18 On the basis of revenue for 2003, Northrop Grumman Corporation was ranked number 55,
HalliburtonCo.122andComputerSciencesCorporation175.AssociatedPress(AP),ListoftheFortune500, USAToday,22Mar.2004,URL<http://www.usatoday.com/money/companies/2004-0322-fortune-500-list_x.htm>.

INTR ODUC TION5

communicationsservices,securityservices,intelligencegatheringandcrimeprevention.
Attemptstosubdivideandcategorizeprivateactorsinthesecurityservicesector
more precisely have been much debated. A distinction is often made between
private military companies (PMCs) and private security companies (PSCs).
PMCsaredefinedasprivatecompaniesprovidingoffensiveservices,designedto
haveamilitaryimpact,whereasPSCistakentorefertocompaniesofferingdefensiveservices,intendedmainlytoprotectindividualsandproperty.Thisdistinction
isproblematicontwoaccounts.First,whatisperceivedasdefensiveunderone
setofcircumstancesmaywellturnouttohaveoffensiverepercussionsinanother.
Second, short-term situational demands as well as immediate or medium-term
businessopportunitiesleadcompaniestoappropriatenewtaskswithrelativespeed
andease,makingtheoffensivedefensiveoractivepassivedistinctionsirrelevantatbestandmisleadingatworst.19
The obfuscation of terminology is worsened by the frequent reference in the
mainstreammediasimplytocontractors.Inthemostcomprehensivecoverageof
the industry to date, Peter W. Singer suggests a classification system for firms,
basedonamilitarytipofthespearanalogyinbattlespacewherethetipindicatesthefrontline.Hedistinguishesbetweenthreetypesoffirm:militaryprovider
firms (type1), military consultant firms (type2) and military support firms
(type3).20Thisclassificationcategorizesfirmsbytherangeoftheirservicesand
thelevelofforceused:type1firmsprovideservicesatthefrontline,suchascommandofforcesandimplementation;type2firmsoffermainlyadvisoryandtrainingservices;andtype3firmsareusedforthecontractingoutofnon-lethalaidand
assistance, including logistic functions such as feeding and housing troops and
providingtransport.21
WhileSingersclassificationisusefulbecauseitprovidesamoredetailedpicture
thanthemilitaryversussecuritydichotomyandhelpstoschematizethebroad
trendswithinavastmarket,mostcompaniesdefysuchclearcategorization.Furthermore,thetemptationtocategorizefirmsaccordingtotheirrelativeproximityto
the front line is problematic because the impact on the security context may be
significantevenforlower-echelontasks.Inotherwords,thestrategicimpactof
providing,forexample,militaryadviceortraining(eveninaclassroomsetting)
maybeasgreatasthatofthedirectparticipationofaprivatecompanyincombat
indicatingthefutilityofbasinganalysisonahierarchyofservices.ThisPolicy
Papereschewsthedistinctionbetweenmilitaryandsecurityandemploysthe
19  The distinction between PMCs and PSCs and between offensive and defensive is used
widely.See,e.g.,Makki,S.etal.,Privatemilitarycompaniesandtheproliferationofsmallarms:
regulating the actors, International Alert Briefing 10 (2001), URL <http://www.internationalalert.org/pdf/pubsec/Btb_brf10.pdf>;andGenevaCentrefortheDemocraticControlofArmedForces
(DCAF),FactSheetfortheMeetingofthePFPConsortiumSecuritySectorReformGroup,Stockholm, 2526 Mar. 2004, URL <http://www.dcaf.ch/pfpc-ssr-wg/Meetings/Stockholm_03.04/
Papers/Private_Companies.pdf>.
20Singer(note2),pp.9193.
21Singer(note2),p.93.

6P R IVATE S EC UR ITY C OM P ANIES

termprivatesecuritycompanytodenoteallcompanieswithintheindustry.While
itisarguablythecasethatsegmentsoftheindustrycovermilitaryactivity,there
canbenocleardividinglineinthefinalanalysis,makingthetermPSCmore
appropriateinthecumulativesense.22Whereverpossible,argumentsaresubstantiatedbyreferencetospecificcompanyactivitiesorcontractsratherthantothe
typeoffirm.23
Mostofthecompaniesintheprivatemilitaryandsecuritysectorhavelimited
infrastructure, are highly mobile and make use of a flexible workforce. Larger
companiesmaintainvastdatabasesofformermilitaryandlaw-enforcementpersonnel,allowingthemtokeepthesizeoftheirpermanentstaffataminimum. 24
Becausecompaniesprimarilyrecruitformermilitarypersonnel,theyseldomneed
to provide staff training, which helps to limit costs. They are able to quickly
assembleatailoredforceforeachmissionorcontract,drawingonindividualswith
theappropriateexperienceandtraining.Databasesaresometimessharedbetween
companies,andmorethanonefirmmayemploythesameindividual.Inaddition,
PSCscarrytheadvantagefortheclientofguaranteedconfidentialityandagenerallyapoliticalnature.
ThelinkbetweenPSCsandrelatedbutmoremainstreamindustrialundertakings
suchasgoodsandservicesfromthearmsproduction,construction,computer,electronicsandcommunicationsindustrieshasbeenstrengthenedinrecentyears,asa
varietyofmultinationalcorporations(MNCs)havemovedintothesecuritysector.
Forexample,theUSfirmMilitaryProfessionalResourcesIncorporated(MPRI)
was bought in 2003 by the communications giant L-3 Communications, while
NorthropGrummanCorporation,whichdealsnotonlyindefenceproductsbutalso
inelectronicsystemsandinformationtechnology,hasacquiredtheUScompany
VinnellCorporation.25InMarch2003DynCorp,oneofthekeyplayersontheprivate security market, was acquired by Computer Sciences Corporation (CSC).26
The provision of risk analysis, coupled with complete security solutions, is a
growingsegmentwithintheindustry;othernotableadditionstoprivatesecurity
activitiesareinterpretationandinterrogationservices.
Contrary to popular perceptions, not only governments (and not only African
governments)butalsointernationalorganizations,NGOs,humanitarianagencies,
membersoftheinternationalmediaandMNCscontractprivatesecurityservices.
22 PSC is also the favoured general term in i.a. Avant, D., The Market for Force: The ConsequencesofPrivatizingSecurity(CambridgeUniversityPress:Cambridge,forthcoming2005);and
Spearin,C.,EndsandMeans:AssessingtheHumanitarianImpactofCommercialisedSecurityonthe
OttawaConventionBanningAnti-PersonnelMines,YCISSOccasionalPaperno.69(YorkCentrefor
InternationalandSecurityStudies(YCISS),YorkUniversity:Toronto,Nov.2001),p.1,URL<http://
www.yorku.ca/yciss/publications/occasion_main.htm>.
23Avanthasdevelopedanotherversionofthetipofthespearanalogy,basedoncontractsrather
thantypeoffirm.Avant(note22),p.14.
24Avant,D.,Thinkagain:mercenaries,ForeignPolicy,July/Aug.2004,p.21.
25Employment, Military-Science.com, URL<http://www.military-science.com/employment.
shtml>.
26ComputerSciencesCorporation(CSC),ComputerSciencesCorporationcompletesacquisition
of DynCorp, CSC press release, 7Mar. 2004, URL <http://www.csc.com/newsandevents/news/
2025.shtml>.

INTR ODUC TION7

TheUNhascontractedprivatesecurityserviceprovidersinsupportofanumberof
peace operations. For example, two South African firms (KZN Security and
EmpowerLossControlServices)werecontractedtoprovidelocalintelligenceto
the UN Transitional Administration in East Timor (UNTAET) in 2001, while
DynCorpprovidedlogistics,transportandcommunicationsservices.27Similarly,
staffoftheBritishDepartmentforInternationalDevelopment(DFID)wereunder
privateprotectioninIraqin2004.28MNCssuchasShellandChevronhavecontractedprivatesecurityfirmsinNigeria,ashasBritishPetroleum(BP)inColombia.29ThediversityofclientsusingPSCscomplicatestheclearcategorizationof
theprivatesecurityindustryand,indeed,theassessmentofitseffects.
Anotherobstacletoanalysingtheprivatizationofsecurityprovisionliesinthe
intrinsic difficulty of finding reliable information. Despite operating in an open
marketandwithcompaniesoftenseekinglegitimacyandpromotingthemselvesas
professionalandreliableentities,theworldofprivatesecurityandmilitarycompaniesstillretainsanairofsecrecy.Thereisnoexhaustivelistofcompaniesoperatingwithintheprivatesecuritysector.30Onthebasisofananalysisofcontract
sizes, operating expenditure in military budgets and interviews with investors,
SingerestimatesthatthenumberofPSCsoperatingworldwideisinthehundreds
and that they account for combined annual global revenues of close to $100
billion.31 Earlier estimates of the scale of the industry indicated global annual
revenuesof$55.6billionin1990and,onthebasisofcompoundedannualgrowth
of7percent,projectedanincreaseto$202billionby2010.32
Inmanyrespects,itisthescopeandsizeoftheprivatesecurityindustrythat
makeitapotentforceinworldaffairs.Theconfusionoverwhichservices(and
companies) constitute the global private security industry, the secrecy that surroundsthiswork,andthepiecemealgrowthandconsolidationoftheindustryhelp
explain why both academic and policy circles have been slow to recognize and
respondtoitsdevelopment.

27Singer(note2),p.183.
28  Avant, D., The privatisation of security and change in the control of force, International

StudiesPerspectives,vol.5,no.2(2004),p.154.
29Avant(note28);andMandel,R.,ArmiesWithoutStates:ThePrivatisationofSecurity(Lynne
Rienner:London,2002),p.54.
30OnesourceofinformationonPSCcontractsisadatabasemaintainedbytheInternationalConsortiumofInvestigativeJournalists.SeetheInternetsiteoftheCenterforPublicIntegrity,Washington, DC, Windfalls of war: US contractors in Iraq and Afghanistan, URL <http://www.
publicintegrity.org/wow/>.
31Singer,P.W.,Personalcommunicationwiththeauthor,May2004.
32DatafromtheEquitableSecuritiesCorporation,EquitableSecuritiesResearch,27Aug.1997,
quoted in Vines, A., Mercenaries and the privatisation of security in Africa in the 1990s, eds
G.MillsandJ.Stremlau, ThePrivatisationofSecurityinAfrica(SouthAfricanInstituteofInternationalAffairs:Johannesburg,1999),p.47.

8P R IVATE S EC UR ITY C OM P ANIES

Privatesecurityservicesandthenewsecurityenvironment:problemor
opportunity?
ThefrequencywithwhichconcernsareraisedaboutthelegitimacyofPSCoperationssignalsaseeminglyinstinctivereluctancetorelinquishthestatesroleasthe
providerofsecurity.InthewordsofUNSecretary-GeneralKofiAnnan,theworld
may not yet be ready to privatise peace.33 The roots of that scepticism cannot,
however, simply be reduced to knee-jerk protectiveness about state power and
sovereignty.Apprehensivenessaboutaglobalindustryfortheprovisionofsecurity
servicesrelatesinprincipletotwolegitimateandinterrelatedconcerns.
First,althoughstatedominanceofsecurityrelationshasbeenchallengedbya
varietyofnon-stateactors,theimpactofprivatesecurityactorsonthestatesprimacy in the provision and guaranteeing of security raises newquestions. States
havecometorecognizeandincreasinglyacceptthattheyarenottheonlyactorsto
addressinternationalsecuritythreats;norisitperhapsfruitfulforthemtoretaina
monopoly in this realm. Efforts to tackle new threatssuch as transnational
crime, environmental hazards or the proliferation of weapons of mass
destructionrequirestatestoactlargelythroughorwithinternationalorregional
organizationsandNGOswithinabroaderstructureofsecuritygovernance.34This
has taken place without a fundamental redefinition of state capacity: states still
enjoytheleadingroleintheinternationalsystemandareseenasthesolesource(if
nolongerthesoleobject)oflegallybindinginternationalregulation.Certainlyin
therealmofmilitaryaffairs,statesstillclaimtheprerogativeofcreatingandjudging political legitimacy.35Ifthestateisundercutormarginalizedinthisrespect,
there is a risk that one of the traditional cores of security governancestates
collective as well as general control of the use of forcewill be destabilized,
affectingnotonlythestateactorbutalsotheinternationalsystemitself.36Forthe
roleofthestateinmilitaryaffairstobemaintainedinthefaceofaprivatizationof
security,theuseofprivatesecurityandmilitaryserviceprovidersneedstotake
placewithinagreedstructuresandprocessesdesignedtosafeguardlegitimacyand
accountabilityinmilitaryaffairs.Atpresentsuchstructuresarelacking.

33AnnansstatementreferredtothequestionthatwasposedtotheUNin1994ofwhethertocontractaprivatecompanytokeeprefugeesandfightersapartintheRwandacrisis.Fidler,S.andCatn,
T.,Privatemilitarycompaniespursuethepeacedividend,FinancialTimes,24July2003.
34Bailes,A.J.K.,Businessandsecurity:publicprivatesectorinterfaceandinterdependenceat
the turn of the 21st century, eds A. J. K. Bailes and I. Frommelt, SIPRI, BusinessandSecurity:
PublicPrivate Partnerships in a New Security Environment (Oxford University Press: Oxford,
2004),pp.123;andKrahmann,E.,Fromstatetonon-stateactors:theemergenceofsecuritygovernance,ed.E.Krahmann, NewThreatsandNewActorsinInternationalSecurity(Palgrave:New
York,forthcoming2005),p.9.
35  Guhenno, J.-M., The impact of globalisation on strategy, Survival, vol. 40, no. 4 (winter
1998/99).
36Ballesteros(note16),p.50.

INTR ODUC TION9

Second,theprivateprovisionofsecuritysectorfunctionsstrikesatthecoreof
thedebateaboutsecuritysectorreform(SSR). 37Instrivingtoupholdtheroleofthe
stateastheguarantorofsecurity,thequestionofwhatkindofstateistobeupheld
iscrucial.Theestablishmentoffunctioninglaw-and-orderandsecurityinstitutions
(military,policeandintelligence)isoftencitedasaminimumrequirementforstabilityinstates.However,whentheobjectiveisbroadenedtoensuringanequitable
distributionofsecurity,thedemocraticcredentialsofsecurityinstitutionsarecentral.Recognitionthatensuringsecurityisnotmerelyaquestionofprotectingthe
statebutalsoofprotectingitscitizensisthebasisfortheSSRagenda.Inthissense,
theuseofprivatesectoractorsforprovidingsecurityandmilitaryservicesrepresentsaparticularchallenge.PSCsareresponsibletoshareholdersratherthanto
voters,andmakingfundamentallyapoliticalactorscontributeconstructivelytothe
establishmentofdemocraticandaccountablesecurityinstitutionsisaparticularly
toughcircletosquare.
Itoftennotedthat,inmanycases,theuseofprivatesecurityservicesistheonly
option available. Deborah Avant has made the case that any evaluation of the
impactofprivatizationmustcompareprivatealternativesagainstacommonstandardmost suitably the other available alternatives rather than an unachievable
ideal.38 However, the choice of the standard against which to compare private
security providers does not simply constitute an analytical benchmark but also
indicatesanormativestandpoint.Theextenttowhichprivatesecurityproviders
canfitintonewformsofinternationalsecuritygovernancewillultimatelydepend
ontheextenttowhichtheircapacitiescanbedirectedtowardsahigher,long-term
goalonethatisgovernedbypoliticsandlawratherthansimpleeconomics.39
Thecruxoftheprivatesecuritysectorscapacitytobealegitimateactoronthe
internationalscenethusliesintherelativecapacityofstatestomanagetheuseof
privatecompaniesandtoensurethatitiscompatiblewiththepromotionofgood
governance,bothdomesticallyandinternationally.Inthecurrentstateofaffairs,
thescopeforinstitutionallyweakorunstablestatestoharnesstheactivitiesofthe
privatesectorinthiswayislimited.However,evenforthestrongorinstitutionally
soundstate,effectiveuseofprivatesecuritycompaniesremainspartiallyblocked
aslongasthischallengeisunresolved.Theneedtotakeaccountofthecontextin
whichprivatesecurityactorsoperatealsoarisesfromthebasic,significantpoint
that the ultimate consumers of the services in the end may not be the actual
contractholdersorclientsofprivatesecurityfirms,butratherthelocalpopulations.
Theconsequencesoftheprovisionofsecuritybytheprivatesectorareglobal
andinvolveareformulationofsomeofthebasicpremisesofinternationalsecurity
politics. In this respect, an analysis based on the perspectives of weak versus
37ThedefinitionofsecuritysectorreformwhichismostwidelyrecognizedisthatoftheOrganisationforEconomicCo-operationandDevelopment(OECD).SeeOECD,DevelopmentAssistance
Committee (DAC), Security Sector Reform and Governance: Policy and Good Practice, DAC
Guidelines and Reference Series (OECD: Paris, 2004), pp. 1618, URL <http://www.oecd.org/
dataoecd/8/39/31785288.pdf>.
38Avant(note22),p.6.
39Singer(note16),p.524.

10P R IVATE S EC UR ITY C OM P ANIES

efficientstatesmayhelptomakesenseofacomplexandmultifacetedissue.40In
almosteverycaseoftheuseofPSCs,bothweakandstrongstateshaveastake:the
companiesgenerallyoperateinaweakstatebutarebasedinastrongstate,paidfor
byastrongstateorusedbyastrongstatetohelpimplementitsexternalpolicy.
Therefore, the impact of reliance on the private sector can be considered from
eitherstate-basedperspectiveinvirtuallyallcases.However,byjuxtaposingthe
two contexts or perspectives, different dimensions of the private provision of
securitymaybehighlighted.Ultimately,anyattempttorespondtotheriseofa
globalindustryforsecurityandmilitaryserviceswillhavetotakefullaccountof
bothperspectives.

40Avantalsousestherelativecapacityofstatesasakeyvariableintheanalysisoftheprivatizationofsecurity.Avant(note24),p.7.

2.Privatesecurityintheweakstate
Privatesecurityasasymptomofstateweakness
Privatesecurityandmilitarycompaniesaremostimmediatelyassociatedwiththe
context of weak or conflict-prone states, particularly states on the African continent.Althoughthereisnoreliableinformationonthemagnitudeoftheactivityof
privatesecuritycompaniesinAfrica,itisgenerallyagreedthatPSCactivityisfarreaching,particularlyinsub-SaharanAfrica.41Onestudyshowstheinvolvementof
15privatemilitarycompaniesinconflictareasduringtheperiod195089andof
65companies in the period 199098.42 The direct involvement of international
PSCsinconflict,however,isonlythetipoftheiceberg.Thisexcludesthevast
number of domestic companies operating on a continuous basis to provide
protection of property, assets and individuals in relatively peaceful states. For
instance, some 2800 private security companies operate in South Africa, and
privatesecurityguardsoutnumberthepoliceforces.43
PrivatesectorinvolvementinAfricaistoagreatextentsymptomaticofstate
weaknessandthefailureofthestatetoprovidephysicalsecurityforitscitizens
throughtheestablishmentoffunctioninglaw-and-orderinstitutions.44Inthesame
wayascommentatorshavecharacterizedtheformationoflocalmilitiasasacheap
popular response to insecurity, private sector security provision may be seen to
representadictatedchoice,withexternalactorsincreasinglytakingonfunctions
conventionallyreservedforstateinstitutions.45OnesuchexampleistheIsraelifirm
Levdan, Limited: under a contract with the Congo-Brazzaville Government,
Levdantrainedthelocalarmyandpresidentialbodyguards.46
41MostoftheearlyresearchonprivatesecuritywasconductedbyAfricanresearchinstitutesand
universities.CilliersandMason(note12).
42MusahandFayemi(note11),appendix1,pp.26574.
43Leander,A.,GlobalUngovernance:Mercenaries,StatesandtheControloverViolence,COPRI
WorkingPaper4/2002(CopenhagenPeaceResearchInstitute(COPRI):Copenhagen,2002),p.6.In
theUnitedStates,domesticprivatesecuritycompaniesperformarangeofservicesfromtheestablishment of gated communities to the protection of cash transfers between banks. Duffield, M.,
GlobalGovernanceandtheNewWars(ZedBooks:London,2001),p.65.Forfurtherconsideration
of domestic private security see Dupont, B., Grabosky, P. and Shearing, C., The governance of
securityinweakandfailingstates,CriminalJustice,vol.3,no.4(2003),pp.33149.
44LundeandTaylorarguethattheexistenceofanextensiveprivatesecuritysector,especiallyifit
isindigenous,canserveasanimportantindicatorthatstatesecurityprovisionisinadequate.Lunde,
L.andTaylor,M.,withHuser,A.,Commerce or Crime? Regulating Economies of Conflict,Fafo
Report424(ForskningsstiftelsenFafo:Oslo,2003),URL<http://www.fafo.no/pub/rapp/424/index.
htm>.SeealsoVonTangenPage,M.andLilly,D.,Security Sector Reform: The Challenges and
OpportunitiesofthePrivatisationofSecurity(InternationalAlert:London,Sep.2002),p.7.
45ForfurtherdiscussionofthispointseeReno,W.,WarlordPoliticsandAfricanStates(Lynne
Rienner:Boulder,Colo.,1999);andEro,C.,Vigilantes,civildefenceforcesandmilitiagroups:the
othersideofprivatisationofsecurityinAfrica,ConflictTrends(AfricanCentrefortheConstructive
ResolutionofDisputes),vol.1(June2000),pp.2529,URL<http://www.accord.org.za/ct/2000-1.
htm>.
46 CilliersandMason(note12),p.5.

12P R IVATE S EC UR ITY C OM P ANIES

However,stateincapacityorfailureprovidesonlyapartofthestoryoftheprovisionofprivatesecurityservicesinthecontextofweakstates.Equallyimportant
forexplainingtheproliferationofPSCsistheestablishmentofparallelorshadow
structuresofpowerandauthority.47Politicalcronyismandthecorruptionofpolice
andmilitaryforcesareoftenlinkedwithandreinforcedbyeconomicstructuresof
exploitationandelitedomination,featuringaninequitabledistributionofresources.
PSCs often operate at the intersection of these structures and processes, by
accompanying MNCs in the extractive business and by protecting weak and
ineffectualdomesticrulers.Onecommentatorhasreferredtotheestablishmentof
suchstructuresasmortgagingpartsofthestateseconomy.48
The private security sector has contributed to maintaining the status quo of
inequitablesecuritydistributioninweakstatesapatternnotexclusivetoAfrica.
Colombia,Chechnya(Russia)andTajikistanareothercaseswhereeconomicinterestinaninsecureenvironmenthastranslatedintothegrowthoftheprivatesecurity
sector.49
Extensiverelianceonprivatesecurityrisksmakingweakstatesweakerinthree
ways: (a)by creating a false image of security in the short term, which distorts
proper assessment of security needs; (b)by leading to a skewed distribution of
security among populations; and (c)by crowding out the establishment of
legitimateandfunctioningstateinstitutions.Eachoftheseproblemsisexploredin
moredetailbelow.
PSCsinconflict:theshort-termimpact
TheoperationofPSCsinconflictsontheAfricancontinentisoftenexplainedwith
reference to the relative swiftness of deployment and operation which they can
offer.ThecaseofEO,hiredbytheNationalProvisionalRulingCouncil(NPRC)
governmentofSierraLeonePresidentValentineStrasserinMarch1995tocombat
therebelforcesoftheRevolutionaryUnitedFront(RUF),isperhapsthemostoften
citedexample.EOforceswerehighlyeffectiveinpushingbackRUFforcesand
retaking the diamond-rich Kono region. However, initial optimism about the
stabilitycreatedbyEOoperationswanedasthecompanyfailedinitsaimofclearingouttheRUFfromotherareasofthecountry.50ThewithdrawalofEOin1997
was followed by a coup which ousted the government and plunged the country
backintoconflict.51Inthesamevein,theoperationsofSandlineInternationalin
47  Reno (note 45), p.2. On the connection between weak government and war see also, e.g.,
Fearon,J.andLaitin,D.,Ethnicity,insurgencyandcivilwar,AmericanPoliticalScienceReview,
vol.97,no.1(Feb.2003).
48VonTangenPageandLilly(note44),p.23.Foradiscussionofwareconomiesandprivate
firmsseeTaylor,M.,Law-abidingornot,CanadianfirmsinCongocontributetowar,31Oct.2003,
URL<http://www.fafo.no/nsp/Globecomment311002.html>.
49SeeSinger(note2),pp.6466,foradiscussionofthecriminalizationofconflictandprivate
security.
50 Spear,J.,Market Forces: The Political Economy of Private Military Security (ForskningsstiftelsenFafo:Oslo,forthcoming2005),p.17.
51Spear(note50),p.18.

P R IVATE S EC UR ITY IN  THE WEAK S TATE13

Sierra Leone in 199798 were initially hailed as successful but, as the country
againdescendedintoviolencein1998,assessmentsoftheeffectivenessofPSCs
wererevised.
TheoperationsofEOandSandlineintheSierraLeoneconflictshowhowshorttermeffectivenessisoutweighedbyafailuretohaveanimpactonthemediumtolong-termevolutionofconflict.EnriqueBallesteros,thenSpecialRapporteurof
theUNCommissiononHumanRightsontheeffectsoftheuseofmercenaries,
arguedthatPSCscreatedanillusionofstability,butleftuntouchedsubstantive
problemsthatcouldneverbeaffectedbyaservicecompany.52Inthisrespect,the
contrast between the involvement of PSCs in the Sierra Leone conflict and the
Britishmilitaryinterventionin1999isinstructive:Britishmilitaryeffortswerenot
only sustained beyond the immediate term but also coupled with international
politicalanddiplomaticeffortsaswellassubstantialdevelopmentaid.Foraffected
governmentssuchasthatofSierraLeone,theattempttocapitalizeontheshorttermtacticalgainsofPSCinterventionmaybemadeattheexpenseofarealistic
assessmentofthestrategicsituationandbalanceofpower.Similarly,optimistic
claimsonthepartofoutsideobserversthatitispossibletowriteacheck,enda
warthroughtheadditionofhiredgunsaretemperedbythenecessarilystop-gap
qualityofPSCoperations.53
Furthermore,theweakstaterisksbeingfurtherweakenedbythehiringofPSCs
byrebelgroupsorothernon-stateactorspartytointra-stateconflicts.Rebelgroups
inAngola,theDemocraticRepublicoftheCongo(DRC)andSierraLeonehaveall
usedPSCstobolstercapacitythroughtrainingandassistanceintheuseofhightechnology weapons, and all sides of the conflict in Colombia have received
support from PSCs.5 4  The Serb military learned a valuable lesson in its
underestimationofCroatiancapabilitiesinthespringof1995,whentheCroatian
ArmylaunchedasurpriseattackinOperationStorm.TheCroatianArmyhadbeen
covertly transformed from a ragtag militia into a modern Western-style army
undertheaegisofMPRI.55
Insum,thedegreetowhichshort-termorstop-gapPSCintervention,whether
throughtheenhancementofmilitarycapabilitiesorthroughdirectparticipationin
combat,canhaveanimpactontheultimateresolutionofaconflictisquestionable.
DirectcombatparticipationonthepartofPSCsisinfactrareandcouldbeprohibited with the enforcement of existing national anti-mercenary laws. However, a
broader range of security services are not covered by current regulations, and
analysis of their impactin conflict and other situationsis considerably more
intricate.
52QuotedinVines(note32),p.54.
53Brooks,D.,Writeacheck,endawar:usingprivatemilitarycompaniestoendAfricancon-

flicts,ConflictTrends,vol.1(June2000),pp.3335,URL<http://www.accord.org.za/ct/2000-1.
htm>.
54Singer,P.W.,Corporatewarriors:theriseandramificationsoftheprivatizedmilitaryindustry,
InternationalSecurity,vol.26,no.3(winter2001/2002),p.32.
55Singer(note2),p.5,andforadetailedaccountofMPRIsactivitiespp.11936.

14P R IVATE S EC UR ITY C OM P ANIES

Localizingsecurity
Privatesecurityactivitiesalsoriskworseningtheconditionsforstabilityinweak
statesbycontributingtoalocalizedandskeweddistributionofsecurity.Contrary
to the notion of security as a public good, to which all state citizens should be
entitled, security from attack and physical abuse becomes conditioned on the
accesstofinancialresourcesandtowillingprivatepartners.
Theestablishmentofprivatelyguardedpremisesforcompanies,particularlyin
theextractivesector,leadsinmanycasestothecreationofunnaturalenclavesof
securitywithinanotherwiseunstableenvironment.Wheretheunequaldistribution
ofrevenuesfromnaturalresourceextractionfeaturesasagrievanceonthepartof
rebelgroups,thismayhaveparticularlydetrimentaleffects.Evidencesuggeststhat
adeep-rootedsenseofalienationandexclusiononthepartofciviliansgoesalong
waytowardsexplainingthereadinesstotakeuparmsandparticipateintheillicit
transferofassets,aprocessrecognizableincountriessuchastheDRC,Liberiaand
SierraLeone.56
TheprovisionofsecurityforcertainsegmentsofastatemaygivePSCsundue
leverageinweakstates.TheinfluentialpositiontakenbyPSCsundertheseconditionsisillustratedbyanincidentinNigeriainMay2003,whendozensofBritish
andUSoilworkersweretakenhostagebystrikingco-workers.PSCswerecalled
upon to intervene before the crisis could be resolved.57  The acting company,
NorthbridgeServices,aBritishPSC,statedthatthecontractfortheoperationwas
awardedbyanindependentcompany,actingonbehalfofoneofthegovernments
involved,butitdeclinedtospecifywhichcompanyorgovernment.58TheconfusionovertheNigerianaffairillustratesthewayinwhichsecurityisbecominga
project for outsiders in many African states, weakening national governments
effectiveauthority.ThecontractingbyBPofDefenceSystemsLimited(DSL),a
privateUScompany,totrainlocalforcesfortheprotectionofcompanyfacilitiesin
Colombia is another example of a PSC effectively undermining state authority
throughitsoperations.59
Thecapacityofaweakstatetouseprivateactorstofurthergoodsecuritygovernanceinthecountryislimitedmainlybyitslackofinfluenceoverwhocontracts
privateservices.Bycreatingsecureareasindependentlyofthestateinchronically
unstableareas,thepresenceofaPSCrisksexacerbatingthegrievancesthatledto
theconflictinthefirstplace.Furthermore,theuseofPSCsbyexternalactorsmay
56Thisisrecognizedbyavarietyofauthors:see,e.g.,Keen,D.Incentivesanddisincentivesfor
violenceandDuffield,M.,Globalization,transbordertradeandwareconomies,edsM.Berdaland
D.M.Malone,GreedandGrievance:EconomicAgendasinCivilWars(LynneRienner:Boulder,
Colo., 2000), pp. 1942 and 6990; and Bangura, Y., Understanding the political and cultural
dynamicsoftheSierraLeonewar:acritiqueofPaulRichardsFightingfortheRainForest,Africa
Development,SpecialIssueonSierraLeone,vol.22,nos2and3(1997).
57Vidal,J.,Oilrighostagesarefreedbystrikersasmercenariesflyout,TheGuardian(London),
3May2003,URL<http://www.guardian.co.uk/international/story/0,,948685,00.html>.
58Vidal(note57).
59Mandel(note29),p.54.

P R IVATE S EC UR ITY IN  THE WEAK S TATE15

offeraverypublicdemonstrationofthestatesincapacityinprovidingsecurityfor
itspopulation,therebyperpetuatingthoseverystructures.
Crowdingoutstateinstitutions?60
Thearrivalofinternationalprivatesecurityactorsinweakstatessignalstheavailabilityofanalternativetothepublicprovisionofsecurity.Financialconstraintson
state resources make the option of hiring private security services attractive to
many states precisely because of its temporary quality. Rather than burdening
governmentbudgetswithfundamentalrestructuringofstandingarmiesorpolice
forces,rootingoutcorruption,andensuringtheefficiencyandloyaltyofpublic
forces, governments may be tempted to resort to the quick fix of private sector
intervention.61
Engaging PSCs carries the advantage of receiving only the service that is
immediatelydemanded,whereaspublicforceshavetobepaidevenwhentheyare
notneeded.Furthermore,thereisperceivedbenefitinshiftingtheburdenofcosts
forprotectionfromthepublictotheprivatesector,asMNCs,aidagencies,NGOs
andinternationalorganizationsshoulderthecostofprovidingfortheirownprotection.62 Some countries, such as Angola, even make the entry of MNCs on the
domestic market conditional on their bringing their own means of protection.63
Thisshort-termrelianceontheprivatesectormayfurthergovernmentsimmediate
objectives,butthewayinwhichittendstocrowdoutthepublicsecurityapparatus
meansthatextensiverelianceonPSCsinthelongertermweakensstateauthority.
As against this, the role of PSCs in furthering security sector reform in weak
stateshasrecentlyreceivedattention.64AlthoughPSCsareabletoprovideaquick
boostintermsofcapacityandcapabilitiesofregularforces,extremecaremustbe
takentoensurethatthisisnotcarriedoutattheexpenseofdemocraticaccountabilityandtransparencyinthesecuritysector.Oneaspectofdonor-sponsoredSSRthat
hasseenahighdegreeofprivatesectorinvolvementistheprovisionofmilitary
traininginweakstates.US-basedPSCstrainedmilitariesinmorethan42countries

60 ThephrasecrowdingouthasalsobeenusedbyLeander(note43),p.10.
61  For a detailed discussion of national defence reform in Africa see Williams, R., National

defencereformandtheAfricanUnion,SIPRIYearbook2004:Armaments,DisarmamentandInternationalSecurity(OxfordUniversityPress:Oxford,2004),pp.23149.
62Leander,A.,DanishInstituteforInternationalStudies(DIIS),TheCommodificationofViolence,
Private Military Companies and African States,WorkingPaperno.11(2003),p.4,URL<http://
www.copri.dk/publications/workingpapers.htm>.
63 Isenberg,D., SoldiersofFortune:AProfileofTodaysPrivateSectorCorporateMercenary
Firms (Centre for Defense Information: Washington, DC, 1997), p. 4, available at URL <http://
www.cdi.org/issues/mercenaries/merc1.htm>.
64VonTangenPageandLilly(note44).ForanelaborationofsecuritysectorreformseeOrganisationforEconomicCo-operationandDevelopment(OECD),InformalDACTaskForceonConflict,
Peace and Development Co-operation, Security Sector Reform and Development Co-operation: A
ConceptualFrameworkforEnhancingPolicyCoherence(OECD:Paris,Feb.2000),URL<http://
www.oecd.org/document>.

16P R IVATE S EC UR ITY C OM P ANIES

duringthe1990s.65InAfrica,theUSStateDepartmentandtheUSDepartmentof
Defense(DOD)haveoutsourced(inwholeorinpart)militarytrainingtoScience
ApplicationsInternationalCorporation(SAIC),MPRI,DefenseForecastsIncorporated(DFI)andLogicon,amongothercompanies.66UndertheUSAsAfrican
CrisisResponseInitiative(ACRI),theprivatesecuritysectorwasusedforclassroomtrainingofseveralnationalmilitariesandcontinuestoplaythisroleunder
ACRIs successor scheme, the African Contingencies Operations Training and
AssistanceProgram(ACOTA).67Forexample,theACOTAtrainingprogrammein
Ghana, both field and classroom, has been conducted entirely by civilian
contractors.TheBritishDFIDisalsoincreasinglyrelyingonprivatesecurityactors
toimplementelementsofSSRprogrammesabroad. 68
WhetherPSCsarecontracteddirectlybyaweakstatetobolstersecuritycapabilities or by a donor government to carry out military training or increase other
capacitywithinsecuritysectorinstitutions,thecurrentdeficiencyofPSCsinterms
ofaccountabilityandlegitimacyposesaproblem.AmnestyInternationalUSAhas
pointedoutthattherearenorequirementsfortheinclusionofanyhumanrightsor
humanitarianlawcontent(norofarmsproliferation-relatedstandpoints)inmilitary,securityorpoliceforcetrainingconductedbyprivatesecurityactors. 69InJune
2004,MPRIconductedanassessmentofSaoTomesdefencerequirementsinthe
hopeofreceivingacontracttoprovidesecurityassistancetothecountrysdefence
establishment, despite the fact that doubts about the human rights record of the
SaoTomearmedforceshadbeenraised.70Thefactthatthetrainingofforceswith
poor human rights records may lend itself to misconduct on the part of private
actorsdoesnotseemtobeanunfoundedanxiety. 71
Theoutsourcingofmilitarytrainingmaybemostsuccessfulwhencompanies
supportregularforcesratherthanassumingfullresponsibilityforthemission.For
example,underOperationFocusedRelieftheUSAcontractedPacificArchitects
andEngineering(PA&E)fortrainingmissionsinGhana,NigeriaandSenegal.72
65  PSCshavetrainedforeignmilitariesinAngola,Bolivia,BosniaandHerzegovina,Colombia,
Croatia,Ecuador,Egypt,EquatorialGuinea,Ethiopia,Ghana,Haiti,Hungary,Kosovo(Serbiaand
Montenegro),Peru,Liberia,Malawi,Mali,Nigeria,Rwanda,SaudiArabia,Senegal,Sweden,Taiwan
andUganda(Sudaneseforces).Avant,D.,Privatizingmilitarytraining,ForeignPolicyinFocus,
vol.7,no.6(May2002),URL<http://www.fpif.org/briefs/vol7/v7n06miltrain_body.html>.Amnesty
International USA also collects information on US companies which train foreign militaries; see
AmnestyInternationalUSA,Internationaltradeinarmsandmilitarytraining,URL<http://www.
amnestyusa.org/arms_trade/ustraining/students.html>.
66Avant(note65).
67Wheelan,T.,DeputyAssistantSecretaryofDefenceforAfricanAffairs,RemarkstoIPOA
dinner,Washington,DC,19Nov.2003,URL<www.ipoaonline.org/content/Whelantranscript.pdf>.
68  Conference on Private Sector Approaches to Security Sector Reform, International Peace
Academy(IPA)andDemos,London,22Oct.2004.
69AmnestyInternationalUSA(note65).
70Belida,A.,PrivateUSsecurityfirmassessingSaoTommilitary,VoiceofAmericaNews
Online, 16June 2004, URL <http://www.globalsecurity.org/military/library/news/2004/06/mil040616-399df0bc.htm>.
71AlthoughUSembassiesinrecipientcountriesarechargedwithgeneraloversight,no one has
specificresponsibilityforthemonitoringofPSCactivities.Avant(note65).
72Wheelan(note67).

P R IVATE S EC UR ITY IN  THE WEAK S TATE17

PA&EthensupportedbothUStrainingstaffandtheAfricantroopswhoreceived
training, providing them with military and commercial equipment and general
support.73
Fortheweakstate,theuseofPSCscanprovideaboosttosecuritysectorcapabilitiesandprovideaquickavenuefordonorstatestochannelsupport.However,
theuseofPSCsinthiscontextmaybeattheexpenseoftheaimofincreasingstandards of democratic accountability within security sector institutions. From the
donor perspective, using private actors to implement SSR programmes in weak
statesinvolvescertainlossessuchasknowledgeoflocalconditionsandthefuture
interoperabilityofforces,bothwithdonorstatesandwiththeirownneighbours.In
thisway,theuseofPSCstocarryoutmilitarytrainingorotherSSRtasksrisks
depriving the relationship between donor and recipient of political content and
exacerbatingthedifficultyofsecuringlocalownershipinSSRprojectsbyintroducingathird,commercialratherthanpolitical,actorintotheequation.74
Thepromiseofprivatesecurityinweakstates?
PSCssupportingpeaceoperations
InitialdebatesaboutthenewmercenariestookplaceinthemidstofareassessmentofUNpeaceoperationsduringtheearly1990s. 75Disillusionmentbecauseof
thefailureofUNmemberstatestocommitsufficienttroopstoUNoperationswas
exploitedbyPSCadvocateswhoarguedthatanymoralqualmsaboutturningtothe
privatesectorwereunderminedbytheWestsunwillingnesstoriskanythingofits
own.76The1994genocideinRwanda,inparticular,strengthenedpro-PSCarguments:wasnotanyintervention,evenifitwasbyaprivatecompany,betterthan
theinternationalcommunityactingasabystandertotheunfoldinghorrors?The
ideaofprivatesecuritycompaniesprovidinganalternativetonationaltroopcontributionsinUNorothermultilateralpeaceoperationsstillcontinuestobecanvassed
insomecircles.77TheInternationalPeaceOperationsAssociation(IPOA),aUSbasednon-profitindustryorganizationformilitaryserviceproviders,hassinceits
inceptionarguedfortheuseoftheprivatesectortomitigatetheinternationalcommunitysreluctancetointervenemilitarilyandriskitsownsoldierslivesinconflicts.78
73The5NigerianbattalionstrainedunderOperationFocusedReliefremaincohesiveunits,and
1wasdeployedinLiberiain2003.Wheelan(note67).
74ForadetaileddiscussionofthelocalownershipproblemsthatariseeveninaEuropeancontext
seeCaparini,M.,SecuritysectorreformintheWesternBalkans,SIPRIYearbook2004 (note61),
pp.25185.
75Malan,M.,Thecrisisinexternalresponse,edsCilliersandMason(note12),pp.3739.
76Duffield,M.,Post-modernconflict:warlords,post-adjustmentstatesandprivateprotection,
CivilWars,vol.1,no.1(1998),p.95.
77Mrup,L.,StrengtheningAfricansecuritycapacities:abriefontheDIISconference16Aug.
2004,DanishInstituteforInternationalStudies(DIIS),Copenhagen,Oct.2004,URL<http://www.
diis.dk/sw2892.asp>.
78InternationalPeaceOperationsAssociation(IPOA)Newsletter,IPOAQuarterly,issue1(5Oct.
2004),URL<http://www.ipoaonline.org>.

18P R IVATE S EC UR ITY C OM P ANIES

Although the replacement of regular troop contributions to multilateral peace
operationsbyPSCforcesisbothunlikelyandundesirable,theuseofPSCsina
supporting capacity in such operations deserves consideration. In the transition
fromaconflicttoapost-conflictenvironmentinweakstates,enhancingsecurity
hasalreadybecomeataskforoutsidersthroughthecommitmentofmultilateral
peacemissions.Peaceoperationsincreasinglyoperateundermorecomprehensive
peace-buildingmandates,includingsuchtasksasthedemobilization,disarmament
andreintegration(DDR)offormercombatantsandSSR.79Inthiscontext,scepticismaboutusingprivateactorsforstatecapacity-buildingtasksinaweakstate
might be tempered by the degree of political legitimacy conferred on PSCs if
employedaspartofaUN-sanctionedmultilateraloperation.Indeed,asmentioned
above,theUNhasalreadymadesignificantuseofPSCsforlogisticalandother
supportinitsoperations.De-miningisanotherareawheretheUNhasonrepeated
occasionscontractedcompaniessuchasDSL.80
Africanregionalorganizationshavebeensimilarlyhamperedbythelackofcapabilitiesandadequateresourcesforaddressingpeacekeepingchallenges,andthey
havedrawnontheprivatesectorforsupportinpeaceoperations.TheEconomic
CommunityofWestAfricanStates(ECOWAS)MonitoringGroup(ECOMOG)in
SierraLeonein1998contractedSandlineforlogisticsandtransportationsupport. 81
PA&E, an international logistics company, supported ECOMOG forces in the
ECOWASMissioninLiberia(ECOMIL)in2003.82TheAfricanUnionMissionin
Sudan(AMIS)iscurrentlysupportedbytwoPSCsPA&EandMedicalSupport
Solutions (MSS)contracted to prepare bases, set up logistics systems, and
provide transport and communication services.83  Part of the funding for the
expansion of AMIS is provided by the US State Department, but new tasks are
outsourcedtoDynCorpandPA&E.84
Whencontractedtosupportmissionswithclearpoliticalsupport,authorityand
mandates,privatesecurityactorsareenlistedinabroaderpoliticalprocess.Inthis
respect,thedifferencebetweenPSCscontractedbyanindividualstatefacinginter79  For a detailed discussion of current peace-building missions see Wiharta, S. and Dwan, R.,
Multilateralpeaceoperations,SIPRIYearbook2005:Armaments,DisarmamentandInternational
Security(OxfordUniversityPress:Oxford,forthcoming2005).
80Spearin(note22),p.1.
81Fisher-Thompson,J.,PrivatefirmshaveroletoplayinpeaceoperationsinAfrica,AllAfrica,
22Oct.2003,URL<http://www.sandline.com/hotlinks/AllAfrica-PMCs_Africa.html>.
82Wheelan(note67).
83USStateDepartment,ImportantroleseenforprivatefirmsinAfricanpeacekeeping,15Oct.
2004, available on the IPOA Internet site at URL <http://www.ipoaonline.org/news_detailhtml.
asp?catID=3&docID=98>.
84ThePA&EandDynCorpcontractswiththeUSStateDepartmentarevaluedat$20.6million
and are part of a 5-year contract between the State Department and the 2 companies to support
peacekeepingandconflictmanagementsupport-relatedtasksthroughsub-SaharanAfrica.Underthis
infinite-delivery,infinite-quantity(IDIQ)contract(seechapter3),theStateDepartmenthasalso
purchasedservicesforbothBurundiandLiberia.Lynch,C.,3,200peacekeeperspledgedonmission
toDarfur,WashingtonPost,21Oct.2004;andChatterjee,P.,Darfurdiplomacy:enterthecontractors,CorpWatch,21Oct.2004,URL<http://www.corpwatch.org>.IDIQcontractshavealsobeen
awardedtoHalliburtonforoperationsinAfghanistanandIraq.

P R IVATE S EC UR ITY IN  THE WEAK S TATE19

naloppositionandcivilwarandcompaniesactinginsupportofmultilateralinstitutionscannotbeoveremphasized.Thedegreetowhichprivatesecurityservicescan
becontractedinanopenandaccountablewayincreaseswiththeamountofpoliticalcapitalinvested.Suchpoliticalcapitalislikelytobehigherinamultilateral
peaceoperationthanwhenstatesunilaterallycontractPSCsupport.
TheuseofPSCsinmultilateraloperationsstillindicatesarelinquishingofstate
control over the means of violence and in this sense represents a break with
principlesoftheUNCharterinthiscontext:thatmemberstatestakeresponsibility,
underUNauthority,forthemaintenanceofpeaceandsecurity.85Thecapacityof
multilateralinstitutionstomanagesuchatransferralofresponsibility(eveninthe
limitedcontextoftheimplementationofcorrectlymandatedactivities)willhavea
crucial impact on the legitimacy and effectiveness of private sector support for
multilateralpeaceoperations.Atpresent,theUNandregionalorganizationslack
adequatestructurestoensurehighstandardsofconductforPSCsand,aboveall,
thelong-termsustainabilityofoperations(seechapter5).
Privatesecurityandaidagencies
Anotherwayinwhichtheprivatesecuritysectorcouldactasaresourceforthe
populationsofweakstatesisincontractedsupportforthedeliveryofhumanitarian
aid.Atpresent,theadministrationanddeliveryofdirecthumanitarianaidinmany
countriesareseverelythreatenedbysecurityriskstointernationalaidworkers.The
United Nations High Commissioner for Refugees (UNHCR), the International
CommitteeoftheRedCross(ICRC),CAREUSA,theSavetheChildrenAlliance,
MdcinsduMonde(MDM)andMdcinsSansFrontires(MSF),forexample,
haveallbeentargetsofdeliberatephysicalattackinarangeofcountries.86The
withdrawalofMSFfromAfghanistaninJune2004,after24yearsofoperationin
the country, and the kidnapping and killing in late 2004 of Margaret Hassam,
directorofCAREInternationalinIraq(alsocausingtheorganizationtosuspend
operationsinthecountry),areillustrativeofthetargetingofhumanitarianworkers
inconflict-riddenandfailedstates.87
Aid agencies, both governmental and non-governmental, have contracted and
continuetocontractPSCsinanumberofcapacities:aboveallforthephysicalprotectionofstaffandpremises,butalsoforriskanalysis,staffsecuritytrainingand
crisismanagementadvice,forexample,onhowtobehaveincasesofkidnapping

85UNCharter,Article2,availableatURL<http://www.un.org/aboutun/charter/index.html>.
86FormoreonagenciesthathavebeenattackedseeSpearin(note8),p.24.
87Joyce, M.,Mdecins SansFrontirespullsoutofAfghanistan,29July2004,RUSINews,

URL <http://www.rusi.org/media/ref:N41091FB430BCC/>; and Agency halts aid operations in


Iraq,BBCNewsOnline,20Oct.2004,URL<http://news.bbc.co.uk/1/3758354.stm>.

20P R IVATE S EC UR ITY C OM P ANIES

andabduction.88Forinstance,theICRChashiredDSLforprotectioninKinshasa,
DRC.89
The relationship between the private security sector and the humanitarian aid
community is complicated by two much-debated dilemmas facing aid agencies.
First, attention has been drawn to a trade-off between upholding the traditional
principleofimpartialityindeliveringaid(setoutinthe1994CodeofConductfor
theInternationalRedCrossandRedCrescentMovementandNGOsinDisaster
Relief) and avoiding the risk of becoming and being seen as complicit in the
fuelling of conflict.90  Second, aid agencies face the difficulty of an increased
militarizationorpoliticizationofhumanitarianspace:asmilitariesbecomemore
involvedinthedeliveryofaid,thereisariskthataidagencieswillbesuspectedof
havinghiddenagendasandwillbeseenaspartialbylocalpopulations(whichin
turnmaymakeaidworkersevenmorelikelytargetsofattack).91PSCscannotof
coursebeequatedwithregularforces,butbyaddingtothearmedpresenceand
general militarization of the environment they may risk making populations
increasingly edgy and insecure and thereby raise the stakes in the conflict.9 2
Furthermore,thereistheriskthatPSCswillnotbeperceivedasneutralactorsin
thefirstplace.ThisisespeciallythecasewherethereisasignificantPSCpresence
tied to the MNCs operating in the extractive industry. As indicated above, in
conflicts where natural resources occupy a central role, protected extraction
facilitiesunderforeigncontrolarelikelytofurtherrebelgrievances.Itmaywell
be that the same PSC provides protection for both an MNC in the extractive
industryandaidagenciesinacountry:aspointedoutinonereport,itisnothardto
imagine this leading to accusations of hypocrisy and the spiralling distrust of
humanitarianactors.93
HowdoPSCsfitintothisdualbalancingact?Inthefirstinstance,thereisavery
realneedtoensurephysicalprotectionforhumanitarianstaff,ataskthatisgoingto
be sensitive regardless of whether it is carried out by regular forces or private
88Vaux,T.et al., Humanitarian Action and Private Security Companies: Opening the Debate
(InternationalAlert:London,Mar.2002),p.8,URL<http://www.international-alert.org/publications.
htm>.
89Vauxetal.(note88);andFisk,R.andCarrell,S.,Occupiersspendmillionsonprivatearmyof
securitymen,TheIndependent,28Mar.2004,reproducedatURL<http://www.commondreams.org/
headlines04/0328-02.htm>.
90 The Red CrescentRed Cross Code of Conduct is available at URL <http://www.ifrc.org/
publicat/conduct/code.asp>.OntheproblemsofaidfuellingconflictseeAnderson,M.B.,DoNo
Harm:HowAidCanSupportPeaceOrWar(LynneRienner:Boulder,Colo.,1999).
91KirstenZaat,aformerUNLiaisonOfficerinIraq,expressedthiscautioninanappealforthe
releaseofMargaretHassam.Viewpoint:MargaretHassanmustbereleased,BBCNewsOnline,
28Oct.2004,URL<http://news.bbc.co.uk/1/3955539.stm>.Onthepoliticizationofhumanitarianaid
seeLilly,D.,ThePeacebuildingDimensionsofCivilMilitaryRelations,InternationalAlertBriefing
Paper(InternationalAlert:London,Aug.2002),p.7;andStre,J.G.(SecretaryGeneraloftheNorwegianRedCross),Resolvingtheconflictbetweenprovidingsecurityandhumanitariansupport,
PaperpresentedattheDefenceAcademyFoodforThoughtLunch,Swindon,14Oct.2004.
92 Lilly, D., The Privatization of Security and Peacebuilding: A Framework for Action
(InternationalAlert:London,Sep.2000),URL<http://www.international-alert.org/publications.htm>,
p.25.
93Vauxetal.(note88),p.17.

P R IVATE S EC UR ITY IN  THE WEAK S TATE21

securitypersonnel.Perhapsparadoxically,thePSCoptionmaybethelesssensitive
one:ratherthanbeingassociatedwithonepartyorsideintheconflict,PSCprotectioncouldbeseenastheenlistingofanimpartialactor.Insuchcases,thought
needs to go into the degree of distance (perceived and real) between PSCs and
nationalmilitaries,aswellasthenationalityofPSCemployees,toensurethatan
imageofpartisanshipisnotconveyed.Inthesecondinstance,thereistheneedto
take into account the sustainability of operations, in this case the aid agencies
stayingpower.Itiseasytoseetheshort-termrationaleforthecontractingofprivatesecurityservicesbyaidagenciestokeeptheirpersonnelsafeandallowthem
accesstorelief-dependentareas,butinthelongtermitmaymakethedeliveryof
aiddependentonanexternalvariablethemarket.94
ThemainproblemswithPSCsusedinsupportofaiddeliveryrelatetotheconductofthefirmitself.AreportpublishedbyInternationalAlertsetthegroundfor
debatetodetermineandoutlineappropriateethical,political,professionalandpublicaccountabilitystandardsthatPSCsneedtoupholdinordertobealegitimate
resourceforaidagencies.95Theseissueshaveyettobeaddressedinacomprehensivewaybytheinternationalaidcommunity(seechapter5).
Thestateatthecentre
BoththepromiseandtheperilofPSCactionintheweakstaterelatetothelackof
afunctioningpublicsecurityapparatusanddemocraticallyaccountablelaw-andorderinstitutions.IncaseswheretheweakstateitselfcontractsPSCswhetherto
interveneinaninternalconflictortobolsteritssecuritysectorcapacitiestherisk
is that it will do so with a view only to short-term hard security. The aim of
equitablesecuritygovernancerisksbeingdemotedtoasecondaryobjective,with
PSCseffectivelycolludingintheestablishmentandmaintenanceofasystemof
security for the few at the expense of the many. Similarly, what may appear as
collusion between MNCs, PSCs and weak regimes in resource extraction
risksthrowingtheprocessofdemocraticstatebuildingofftrackand,indeed,generatingfurthersourcesofpopulargrievance.
TheuseofPSCsinsupportofmultilateralpeacemissionsandaidagencyoperationsholdsatleastsomepromisefortheweakstate,althoughitisarguedabove
that great caution and sensitivityformalized under regulatory structuresis
requiredinordertocapitalizeonthisopportunity.However,usingPSCsengaged
by an external actor risks further marginalizing the host (weak) state, because
placingthesourceoflegitimacyandofdeliveryinoutsidershandsdistancesthe
statefromthenormalsystemofnationalandinternationalsecuritygovernance.In
buildingstructurestogoverntheinternationaluseofprivatesecurityservices,there
isaneedtoensurethatweakstateshavesomeleverageinthatprocessandthat
theymaintaininfluenceoverPSCoperationsontheirterritory.Aboveall,theuse
94Theeffectofmarketforcesisconsideredinmoredetailinchapter3,below.
95Vauxetal.(note88),p.8.

22P R IVATE S EC UR ITY C OM P ANIES

ofPSCsshouldbedirectedatbuildinguptheweakstate.Inthisrespect,successful
handlingofthelargepresenceofPSCsinweakstatesrequireselementsofboth
preventiveandresponsiveaction,includingthebuild-upofstateinstitutionstoprecludeover-relianceonprivateactors.Againstthebackgroundofwell-functioning
statelaw-and-orderinstitutions,theuseofprivatesecurityservicesislikelybothto
bemoreefficient,equitableandaccountableandtohelpcreatetheconditionsfor
itsownphasingout.

3.Privatesecurityandtheefficientstate
Theuseofprivatesecurityprovidersisnotassociatedexclusivelywiththeinability
ofweakstatestoeffectivelyfillasecurityvacuum.JustasmostinternationalPSCs
arebasedin(orhavegrownoutof)developedstates,soarestrong,orefficient,
statesamongthekeyemployersofprivatesecuritypersonnel.96Fortheefficient
state, outsourcing of health care, transport and other government functions has
effectively paved the way for the privatization of defence sector-related tasks.97
Although this process is starting to spread in many European states, it is most
apparent in the USA. In the UK, for instance, combined revenues for British
securityfirmshaverisenfivefoldsincethestartofthewarinIraqin2003,from
$350millionbeforethewartonearly$2billionasofApril2004.98 Thischapter
concentratesonexamplesoftheUSAsuseofPSCs,buttheobservationsapplyto
efficientstatesgenerally.
TheUSAstrendofcontractingoutitsmilitarytasksabroadgainedmomentum
overthepastdecade.Sincethe1991GulfWar,whentheratioofcontractorstoUS
active-dutypersonnelwas1:50,theratiohasconsistentlydiminished.Withthe
terroristattacksof11September2001andtheensuingUSreassessmentofinternationalsecuritythreats,abasicincompatibilityofaimsarose:loweringthenumber and exposure of US troops, while at the same time increasing the use and
impactofUSstrengthabroad. 99Theoutsourcingprocess,underwayformorethan
a decade, gained momentum with the military campaigns in Afghanistan
(OperationEnduringFreedom)andIraq(OperationIraqiFreedom).100 Theratioof
UStroopstoPSCpersonnelinthe2003warinIraqhasbeenestimatedat1:10,
andsincetheformalendingofthewarinMay2003thenumberofcontractorshas
increased.101AlthoughthereisnodefinitivewordonthenumberofPSCsactivein
Iraq, one analyst estimated in November 2004 that well over 20000 private

96Efficientisusedheretoindicatestatesthathavedemonstrablyfunctionalinstitutionsofgovernmentandaregenerallyabletoenforceacoercivemonopolyonforcewhileadheringtodemocratic
standards.
97Krahmann,E.,Privatefirmsandthenewsecuritygovernance,PaperpresentedtotheInternationalStudiesAssociation43rdAnnualConvention,2327Mar.2002,NewOrleans,availableat
URL<http://www.isanet.org/noarchive/krahmann.html>.
98 Murphy, C., Iraqs mercenaries: riches for risks, BBC News Online, 4 Apr. 2004, URL
<http://news.bbc.co.uk/1/3590887.stm>.
99OHanlon,M.RebuildingIraqandrebuildingtheUSArmy,MiddleEastMemo,no.3(4June
2004),URL<http://www.brook.edu/views/op-ed/ohanlon/20040604.htm>.
100 TheBritishGovernmenthascontractedwidelyinbothIraqandAfghanistan.E.g.,Babcock
InternationalprovideslogisiticssupporttoBritishtroopsinAfghanistanundera20millioncontract.
Krahmann(note9),p.18.
101 Isenberg,D.,AFistfulofContractors:TheCaseforaPragmaticAssessmentofPrivateMilitary Companies in Iraq, British American Security Information Council (BASIC) Research
Report2004.4 (BASIC: London, Sep. 2004), p. 7, URL <http://www.basicint.org/pubs/Research/
research.htm>.

24P R IVATE S EC UR ITY C OM P ANIES

personnel, employed by over 60 firms, were carrying out military functions.102
NeithertheUSDODnortheCoalitionProvisionalAuthority(CPA)inIraqkepta
completeregisterofallcontractsawardedtoPSCsinthecountry.103
Giventheelementofdeliberatepolicydesign,itwouldseemfairtoassumethat
the use of private security services by an efficient state is conducted in a more
regulatedorcontainedfashionthanwhenitisresortedtobyaweakstate.However, the efficient state also faces numerous problems in its contracting out of
security,althoughofasignificantlydifferentnaturefromtheproblemsfacedbyan
institutionallyweakstate.
Challengesinoutsourcingpolicyimplementation
Thetaskscarriedoutbyprivatesecuritycompanies(mainlyUSandBritish)inIraq
rangefromthefeedingandhousingoftroopsandthearmedprotectionofoilfacilities,powerlinesandaboveallhigh-levelofficials(bothcoalitionandIraqi),tothe
maintenanceofkeyweaponsystemssuchasM-1tanks,Apachehelicoptersand
B-2stealthbombers.TheoccupationofIraqalsobroughtattentiontonewareasof
privatesecuritysectoractivity,suchasinterpretationandinterrogationservices.
DuringhistenureinIraq,L.PaulBremer,PresidentialEnvoytoIraqandAdministratoroftheCPA,wasundertheprotectionofBlackwaterSecurityConsulting,a
US-basedcompany.Similarly,PresidentHamidKarzaiandotherhigh-levelofficials in Afghanistan continue to rely for their protection on DynCorp security
guards.104 VinnellCorporation,asubsidiaryofNorthropGrummanCorporation,
hasbeenawardeda$48millioncontracttotrainthenucleusofanewIraqiarmy,105
andDynCorphasbeencontractedtorecruitandtrainthenewIraqipoliceforce.
Theuseofprivatesecurityandmilitaryservicesbyanefficientstatecanatone
levelbeassessedaccordingtocriteriasimilartothoseappliedfortheoutsourcing
of other government functions. To what extent are the delivered services of the
same quality as when they are provided by the state? How do they compare in
termsofcost-effectiveness?Whatisthemeasureofcontrolexercisedoveroperations?Thesequestionsneedtobeaddressedinanyexaminationoftheimpactof
102 Singer,P.W., ThePrivateMilitaryIndustryandIraq:WhatHaveWeLearnedandWhereto
Next?,DCAFPolicyPaper(CentrefortheDemocraticControlofArmedForces(DCAF):Geneva,
Nov. 2004), URL <http://www.dcaf.ch/publications/Publications%20New/Policy%20Papers/PP4_
Singer.pdf>.
103 RaddenKeefe,P.,Iraq:Americasprivatearmies,NewYorkReviewofBooks,12Aug.2004.
TheCPAwasestablishedinJune2003toprovideforthetemporarygovernanceofIraq,untilthe
country gained sovereignty in July 2004. Although the CPA attempted to compile a list of PSCs
whichareactiveinIraq,thishasbeenoflimitedconsequence:only8ofthec.60companiespresent
inIraqatthetimewerelistedundercontractswiththeCPA.SeeLettertoUSSecretaryofDefense
DonaldH.RumsfeldfromIkeSkelton(Dem.),2Apr.2004,andResponsefromRumsfeldtoSkelton
withattachmentDiscussionpaper:privatesecuritycompaniesoperatinginIraq,4May2004,availableatURL<http://www.house.gov/skelton/pr040504a.htm>.
104 Isenberg,D.,SecurityforsaleinAfghanistan,AsiaTimesOnline,4Jan.2003,URL<http://
www.atimes.com>.
105 SeetheVinnellInternetsiteatURL<http://www.vinnell.com>.

P R IVATE S EC UR ITY AND  THE EF F IC IENT  S TATE25

privatesecurityservices.Aprobleminmuchofthedebate,however,isthatthe
issueshavebeensetasideortreatedasdistinctfromthebroaderissueofhowthe
useofprivateactorsaffectspoliticallegitimacy.
ItissignificantthatPSCactivityinthecasesofAfghanistanandIraqtakesplace
intandemwithalargeinternationalmilitaryforcepresence.TheUSGovernments
relationshipwiththeprivatesecuritysectorispremisedontheguidingprinciple
thatasmuchaspossibleshouldbeoutsourced,withtheexceptionofcoregovernmentormission-criticalfunctions. 106 Inthe2001QuadrennialDefenseReview
(QDR),corefunctionsaredefinedasthosedirectlyrelatedtowarfighting.107 This
distinctionisbasedonclassicalmodelsofthenatureofwarfare,however,andit
breaks down in a context where post-war reconstruction and enhancement of
economicandpoliticalstabilityareequallyimportantformilitarysuccess. 108
Fourcentralproblemsintheefficientstatesuseofprivatesecurityservicesare
consideredhere:(a) the problem of establishing clear mandates, (b)thelackof
PSCaccountability,(c)problemsofoversightandcontrolinaskewedmarket,and
(d)problems of basic and practical coordination of efforts both among private
actorsandbetweenPSCsandregularforces.
Unclearrulesofengagementandmandates
ThehighlyinsecureenvironmentinbothAfghanistanandIraqhasmeantthatcompanies operating there have had to respond to significantly more dangerous
situations than were initially envisaged. Because modern PSCs are malleable
entities and can take on new tasks at short notice, they can often meet such
situationaldemands.However,thiscanresultinanincreasinglackofcontrolover
theprecisenatureofPSCoperations.Althoughbasicstipulationsaremadefor
instance,whetherornotcontractorswillcarryarmsinitialmandatesforPSCsare
ofteninsufficientlydetailedorarenotappropriatelyupdated.Furthermore,rulesof
engagementandPSCmandatesarecloudedbybasicsubjectivityofinterpretation.
Theproblemofthelackofclearlyestablishedmandatesmanifestsitselfinwhat
canbecalledprivatesecuritymissioncreep.Therehavebeenfrequentreportsof
trigger-happiness on the part of security contractors ostensibly employed for
defensiveguardingtasks.AllegationshavealsobeenmadethatPSCemployees
inIraqhaveclaimedthattheyhaveauthoritytodetainpeople,erectcheckpoints
withoutauthorizationandconfiscateidentitycards.109Forexample,theUSprivate
securitycompanyDynCorpwasemployedundera$50millioncontractwiththe
StateDepartmenttoprovide1000adviserstohelporganizeIraqilawenforcement
andcriminaljusticesystems. 110 WhenitwasrevealedthatfourDynCorpemploy106 USDepartmentofDefense, Quadrennial Defense Review Report,30Sep.2001,p.53,URL
<http://www.defenselink.mil/pubs/qdr2001.pdf>.
107 USDepartmentofDefense(note106),p.53.
108 Schadlow,N.,Warandtheartofgovernance,Parameters,autumn2003,p.91.
109 Murphy(note98).
110 Merle,R.,DynCorptookpartinChalabiraid,WashingtonPost,4June2004,p.A17.

26P R IVATE S EC UR ITY C OM P ANIES

eeshadtakenpartinIraqipoliceraidsonthehomeandofficesofformerexile
leaderAhmedChalabiinJune2004,thepicturewasdrasticallyaltered.Thecontractors not only wore body armour and carried rifles but also were effectively
directingtheraidsataskthatmaywellbeconsideredbeyondtheirofficialmandate.111
Tosomeextent,investingPSCswithameasureofdiscretioninexecutingtheir
tasksisendemictothewayinwhichtheprivatesecurityindustryoperates.Itis
perhaps not surprising that private security contractors may take the liberty of
decidingforthemselveswhatactionisrequiredinorderforthemtofulfiltheircontractualobligations in an area of great physical insecurity; on this showing, the
blameassignedtoindividualcompaniesforactingbeyondtheirmandatemaybe
overstated.WhenHartGroupLimited,aLondon-basedPSC,washiredtoprovide
protectionforCPAstaff,thiswasintendedtobealimitedandpassivetask.If
they came under direct attack by Iraqi insurgents, company employees were
instructedtocallonmilitarysupportfromregularcoalitionforces.Themanaging
directorofHartGrouphastestifiedthatonseveraloccasionsthisassistancewas
notforthcoming,andcompanyemployeesconsequentlyfoundthemselvesobliged
to hold positions for considerable periods of time, effectively engaging in a
strategicallysensitivetask.112
AsensibleengagementofPSCsbytheefficientstatemustthusreasonablybegin
withclarityandagreementontheirmandateandscopeforaction.Clearlyestablished limits on what are and are not acceptable methods for carrying out, for
example, a guarding service, constitute the basic premise for holding PSCs
accountable.Inparticular,thequestionofwhatconstitutesmission-criticalactivities(requiringthattheybekeptunderthedirectcontrolofthestateorinternational
authorities)demandsrethinking.Inparticular,inthecontextofabattleforhearts
and minds, conventional assumptions about what constitutes mission-critical
activitiesarelessthanclear-cut.113Asonecommentatorremarkedonthesubjectof
protectingPresidentKarzaiandCPAAdministratorBremer,itdoesntgetmuch
moremission-criticalthanthat.114

111 SuchproblemsarenotexclusivetotheIraqiscene;officiallyemployedtoprovidepilottraining
andtechnicalsupportfortheColombianNationalPoliceseradicationofillicitplantsinthesouthof
the country, DynCorp personnel have several times been reported as being actively involved in
counterinsurgencyinareascontrolledbytheFARCmovement.Burton-Rose,D.andMadsen,W.,
Corporate soldiers: US privatizes the use of force, MultinationalMonitor, vol. 22, no. 3 (Mar.
1999).
112 BBCRadio4Fileon4programme,broadcastat20.00,25May2004,fulltranscriptavailable
atURL<http://news.bbc.co.uk/1/hi/programmes/file_on_4/3708232.stm>.
113 CombellesSiegel,P.,Adebacleinthebattleforheartsandminds,ForeignPolicyinFocus,
13May2004.
114 Priest,D.andFlaherty,M.P.,Underfire,securityfirmsformanalliance,WashingtonPost,
8Apr.2004,p.A01.

P R IVATE S EC UR ITY AND  THE EF F IC IENT  S TATE27

Accountabilityunderlaw
HoldingPSCsaccountableunderlawfortheiractionsinthecurrentstateofaffairs
is problematic even for the efficient state.115  The task of holding individuals
accountableformisconductorevenwarcrimesfallsonnationalgovernments
either in the state where the company is registered or in the state in which it
operates. In the case of Iraq, contractors are effectively granted immunity from
local prosecution under CPA Order 17 (issued in June 2003 and renewed on
27June2004toremaininforceforthedurationofthemandateauthorizingthe
MultinationalForce).116
Evenwhenthehomestateintheoryassumesresponsibilityforholdingcontractorsaccountableunderlaw,thishassofarbeenlargelyhypotheticaleveninthe
UnitedStates,whichintheorypossessesthecapacitytoestablishandenforcelegal
constraints on individuals employed to work abroad. Despite the fact that the
regulationofPSCsisbetterdevelopedintheUSAthaninmostothercountries,the
failuretoholdindividualcontractorsaccountableforcrimeshasmetwithsustained
criticism. The case of DynCorp employees implicated in sexual abuses in the
Balkansinthemid-1990sisoftencitedinthisrespect,buttheproblemiscommon
toUSPSCactivityelsewhere.117  DynCorp continues to be trusted as one of the
mainrecipientsofcontractsfromtheUSDOD.118
Thefailuretoholdindividualcontractors,muchlesscompanyentities,accountableformisconducthasbeenreplicatedinIraq,withPSCcomplicityintheabuse
ofIraqiprisonersattheAbuGhraibprisonacaseinpoint.Individualsworkingfor
theUScompaniesCACIInternationalandTitanIncorporatedprovidedinterpretationservicesandpartookintheinterrogationofIraqisatAbuGhraib.Theofficial
USinquirylaunchedbyMajorGeneralAntonioM.TabugainJanuary2004found
thatatleasttwoprivatecontractorswereeitherdirectlyorindirectlyresponsible
fortheabuses,butsofarnonehasbeenbroughttojustice.119 TheUSGovernment
struggled to locate the contract under which the individuals were serving at
AbuGhraib:initially,itwasthoughtthatCACIinterpreterswerehiredbythe US
DOD, only to later emerge that it was the National Business Center of the US
115 TheUSmodelofregulationisconsideredindepthinchapter5.
116 SeeCoalitionProvisionalAuthority(CPA),CoalitionProvisionalAuthorityOrdernumber17

(revised):statusoftheCoalitionProvisionalAuthority,MNFIraq,certainmissionsandpersonnelin
Iraq, CPA/ORD/27 June 2004/17, 27 June 2004, URL <http://www.iraqcoalition.org/regulations/
#Orders>.ImmunityforcontractorshasbeengrantedinColombia,attheinstigationoftheUSState
Department.
117 Smith,C.S.,AtoughnewfaceofUSabroad,InternationalHeraldTribune,14Oct.2004.
118 Ratnam,G.,SomeUSfirmswaryofsecurity,DefenceNews,24May2004.
119 Article15-6Investigationofthe800thMilitaryPoliceBrigade(TabugaReport),([USArmy:
Washington, DC], 2004), p. 44, available at URL <http://www.npr.org/iraq/2004/prison_abuse_
report.pdf>; and Von Hall, G., Vakter tar over soldaters roll [Guards take over soldiers role],
Svenska Dagbladet,31Aug.2004.However,DavidPassaro,accusedofhavingbeatenasuspected
TalibansympathizertodeathinaPakistaniprisoninJune2003,facedcriminalcharges.Chaffin,J.
andSevastopulo,D.,Contractworkerindictedoverdeathofdetainee, Financial Times,18June
2004.

28P R IVATE S EC UR ITY C OM P ANIES

Department of the Interior that had enlisted the companys services.120 Despite
allegationsofmisconduct,CACIInternationalwasawardedyetanothercontract,
valuedatanestimated$23million,toprovideinterrogationservicesinIraq.121
Legalloopholesinthecontrolofprivatesecuritysectoractivityneedtobeclosed
attheinternationallevel.Asafirststep,however,existinglawsgoverningPSC
employeesworkingabroadundergovernmentcontractsfromtheUSA,theUKor
other countries with relevant jurisdiction and regulatory instruments must be
enforced.
Accountabilityundercontract
Thedifficultyinholdingprivatefirmsaccountablewhentheyareundercontract
centresonthefactthattheyarenotpoliticallybutcommerciallymotivatedactors.
Asinanyinstanceofoutsourcingorcontractingforaservice,acertainlevelof
trustmustbeestablishedthatacontractwillbefulfilled.122
AfailureonthepartofPSCstodeliveroncontractscouldariseasaresultof
eitherthecompanyasawholedefectingorofindividualemployeesdoingso.In
the first instance, a change in the conditions for operation, whether related to
securityorfinancialconsiderations,mightleadtoachangeinacompanysability
orwillingnesstocarryoutthemissionforwhichitwascontracted.123Although
manyofthelargerandmoreestablishedPSCsaremindfuloftheirreputation,there
isultimatelynoguaranteethatacompanywilldeliveronacontract.WiththenumberofcontractorstargetedforattacksinIraqconsistentlyontheincrease,thelikelihoodishighthatsomePSCsmightsimplyfindthejobtooriskyandterminate
contracts. Indeed, such concerns are being expressed from within the industry
itself.124  In one instance of deliberate targeting, DynCorp offices in Kabul were
attackedinAugust2004,killingsevenpeople.125 USestimatesofthenumberof
contractors killed in Afghanistan and Iraq have varied greatly: according to a
memberoftheUScongressionalHouseArmedServicesCommittee,inJune2004
thenumberwasintherangeof5060deaths.126 ByNovembertheestimatehad
risento150killedandmorethan700woundedinIraq.127
120 RaddenKeefe(note103).
121 McCarthy,E.,CACIgetsnewinterrogationcontract,WashingtonPost,5Aug.2004.
122 Singer(note2),pp.15169.
123 Anotherproblemisthatcompaniesmayabandonacontractforfearthattheywillnotbepaid

fortheirservices.SandlineInternationalhadsignedupforacontractwiththePapuaNewGuinea
Governmentin1997,butthemissionwasnevercarriedoutbecausethecompanydoubtedtheclients
abilitytopay.Thistypeofconsideration,however,isobviouslylessofaproblemforPSCsworking
forarichstate.
124 Thismayfurtherthedebateabouttheregulationofcontractors.AspointedoutbyPierreChao,
defenceanalystattheCentreforStrategicandInternationalStudies,Washington,DC,theriskthat
companiesmightthinktwiceaboutbiddingforcontractsmightpromptgovernmentstothinkharder
aboutdefiningrolesandresponsibility.Ratnam(note119).
125 TheattackwaslaterclaimedbytheTaliban.Mayar,W.,BlasthitsUSfirminKabul,CNN
Online,30Aug.2004;andOtis,J.,Kabulblastkills2fromUS,HoustonChronicle,30Aug.2004.
126 Worden(note5).
127 Singer(note102).

P R IVATE S EC UR ITY AND  THE EF F IC IENT  S TATE29

TheriskofindividualemployeesdefectingfrommissionsaggravatestheproblemofensuringtheaccountabilityofPSCs.Securitypersonneldonotfallunderthe
1951UniformCodeofMilitaryJustice(UCMJ)unlesstheUSCongresshasmade
a formal declaration of war, meaning that there is effectively no guarantee that
privatecontractorswillstayinahostileenvironment.128Afterinsurgentsnorthof
BaghdadkilledtwoSouthKoreansubcontractorsinDecember2003,60oftheir
colleagueslefttheirpositionsforfearofsufferingsimilarfates.129  Herein lies a
dilemma over relying on contractors even for seemingly uncontroversial tasks,
suchasfeedingtroops:ifacorporateactordecidestowithdrawstafftokeepitsafe
fromattack,regulartroopsfindthemselvesindifficultyandhavelittleleverage
over the situation. Concerns about the growing use of PSCs among national
militariesoftencentreonthelikelihoodorriskofthistypeofsituationarising.
Finally,PSCaccountabilityisseverelycompromisedbyinadequatevettingof
personnel.InIraq,USandBritishfirmsturnedtolocalandotherforeignnationals
tofillthedemandforpersonnel,andtheinfluxofthird-countrypersonnelhasbeen
high. Private security personnel in Iraq currently include individuals from Fiji,
Nepal(Gurkhas),SerbiaandMontenegro,andBosniaandHerzegovina,tonamea
few.ThislessenstheaccountabilityofPSCsintworespects:(a)employingstaff
from a third country complicates procedures for prosecution in the event of
misconduct; and (b)the gold-mine mentality associated with the Iraqi private
security market also attracts individuals with less than perfect human rights
records.130  Concerns about the quality of recruitment are not voiced merely by
outsideobserversbutarealsobeingraisedfromwithintheindustry.131 Blackwater
Security Consulting, a strategic division of Blackwater USA, exemplifies this
trend:asthecompanyhasgrownby300percentovereachofthepastthreeyears,
highdemandhastranslatedintoslackproceduresofrecruitment.Thecompanys
chiefexecutive,GaryJackson,hasconfirmedthatcommandoshavebeenrecruited,
forexample,fromformerforcesloyaltoChileanPresidentAugustoPinochetfor
workinIraq.132

128 Zamparelli,S.J.,Contractors on the Battlefield: What Have We Signed Up For?, Air War
College Research Report (Air University, Air War College: Maxwell Air Force Base, Ala., Mar.
1999).FortheUCMJseeURL<http://www.au.af.mil/au/awc/awcgate/ucmj.htm>.In2000theUS
CongressattemptedtorectifythisoversightbyinvokingtheMilitaryExtraterritorialJurisdictionAct,
intendedtoextendfederalUSlawtopeopleemployedbyoraccompanyingthearmedforcesoutside
theUnitedStates.PublicLaw106-523,22Nov.2000,URL<http://www.pubklaw.com/hi/pl106523.pdf>.However,thisextensionappliesonlytocontractorshiredbytheDOD.
129 Surowiecki,J.,ArmyInc.,NewYorker,12Jan.2004.
130 ThishasalsobeenaproblemwithPSCsoperatinginColombia,whereUSPSCshavemadethe
hiring of personnel from other Latin American countries a common practice, thereby evading
congressionalcontrol,whichappliesonlytoUScitizensworkinginthecountry.
131 KennKurtz,chiefexecutiveofSteeleFoundation,amultinationalPSCwithasignificantpresenceinIraq,hasstatedthatheseriouslydoubtsthegeneralqualityofindividualsemployedinthe
country.Leyne,J.,ThebusinessofwarinIraq,BBCNewsOnline,25May2004,URL<http://
news.bbc.co.uk/2/hi/americas/3744489.stm>.
132 Arun,N.,Outsourcingthewar,BBCNewsOnline,2Apr.2004,URL<http://news.bbc.co.uk/
2/hi/middle_east/3591701.stm>.

30P R IVATE S EC UR ITY C OM P ANIES

Problemsoftransparencyandoversightonanunlevelplayingfield
Oneofthemostfrequentlyvoicedargumentsinfavourofoutsourcingsecurityand
militaryservicesisthatprivatesecurityprovisionisalwaysthecheaperoption.133
However,theeffectivenessofmarketforcesinensuringthatcostsarekeptdownin
thesecurityindustryisdisputable.Formarketforcestoleadtocostdepression,
thereneedstobeeffectivecompetition.134Theprivatesecuritymarket,however,
suffersfromseveralimpedimentstoperfectmarketconditionsandassuchmore
resemblesaskewedmarketorunlevelplayingfield.
Oneimpedimenttoperfectmarketconditionsisfoundinthehighlypersonalized
nature of relations within the industry. PSC executives, often with high-level
experience from national militaries, are often well connected both with governmentsandamongthemselves.AmongUSPSCsoperatinginIraq,seniordirectors
of Diligence LLC, the Steele Foundation and CACI all enjoy such positions.135
Furthermore,significantlobbyingandpoliticalcampaigndonationsonthepartof
PSCs have been shown to have a bearing on the awarding of contracts.136  One
source estimates that only 40 per cent of US DOD contracts between financial
years1998and2003wereawardedonthebasisoffullandopencompetition.
Thisfiguredropsto36percentifthosefullandopencontractsthatattractedonly
onebidderarededucted.137
In an example of questionable tendering processes,in June 2004 one of the
largestcompaniesintheindustry,DynCorp,lostouttoasmallandrelativelynew
British company, Aegis Defence Services, in the bid for the then largest Iraqi
securitycontract.Thecontract,valuedat$293million,stipulatedthecoordination
ofworkandintelligencesharingbetweenupto50otherPSCsinthecountry,as
wellastheprovisionofsecurityteamsfortheUSProjectManagementOffice.138 In
response,inJuly2004DynCorpsubmittedaformalprotesttotheUSGovernment
Accountability Office (GAO). 139  Similarly, the formidable dominance of the
HalliburtonconglomerateinIraqhasprompteddebateandaccusationsofcronyism
intheGeorgeW.BushAdministration,fuelledbythemultipleinvestigationsofthe

133 Brooks(note12);andShearer(note4).
134 Markussen,A.,Thecaseagainstprivatizingnationalsecurity,Paperpresentedatthe2001

MeetingoftheInternationalPoliticalStudiesAssociation,UniversityofOklahoma,20Mar.2001;
andKrahmann(note4),pp.2021.
135 Isenberg(note104),p.8.
136 Isenberg(note104).TheInternationalConsortiumofInvestigativeJournalists(ICIJ)estimates
thatprivatecontractorsinIraqdonatedmorethan$500000toGeorgeW.Bushs2004presidential
campaign.SeeWindfallsofwar,URL<http://www.publicintegrity.org/icij>.
137 Makinson,L.,OutsourcingthePentagon:whobenefitsfromthepoliticsandeconomicsof
nationalsecurity?,29Sep.2004(InternationalConsortiumofInvestigativeJournalists,ICIJ),availableatURL<http://www.publicintegrity.org/pns/report.aspx?aid=385>.
138  Griffin, T., IrishAmericans target Iraq contract, Asia Times, 30 July 2004, URL <http://
www.atimes.com/atimes/Middle_East/FG30Ak03.html>; see also Aegis latest information, URL
<http://www.aegisdef.com>.
139 Griffin(note138).

P R IVATE S EC UR ITY AND  THE EF F IC IENT  S TATE31

companyoverallegationsrangingfromoverchargingtheUSGovernmentinIraq
andKuwaittopayingbribesinNigeria.140
Competition between firms in the private security sector makes transparency
within the industry difficult to achieve, both during tendering processes and in
termsofoversightonceacontractisgranted.Theindustryischaracterizedbya
climateofconfidentiality,andfirmsfrequentlyretaintheirrighttokeeptheconsideration of contracts secret. In a further complication, there is a general trend
towardsawardingso-calledinfinite-delivery,infinite-quantity(IDIQ)contracts,
alsoknownasumbrellacontracts,whereapriceisfixedinadvancetocoveran
unspecifiednumberandnatureoftasksforacertainperiod.141 Kellogg,Brownand
RootaUSengineeringandconstructioncompany,privatemilitarycontractorand
a subsidiary of Halliburtonhas been operating under an IDIQ contract in the
Balkanssince1995.Thecontractwasextendedtwice,in1997and1999,andnow
runsuntil2004;itcontainsonlyverybroadworkdescriptions,suchasfreedomto
use latest commercial practices and techniques to meet requirements successfully.142AnIDIQcontracthasalsobeenawardedtoDynCorpforthetrainingand
equippingofthenewIraqiarmy.143 IDIQcontractshavebeencriticizedforbeing
particularlyopentoabuseandover-charging,loweringtheleveloftransparencyin
thecontractingofPSCs.
OversightofthecontractingprocessisfurthercomplicatedbytheextentofsubcontractingbetweenPSCs.Accordingtooneestimate,theUSAhasawardedsome
2800contractsinIraq,valuedatmorethan$11.7billion,buthasverylittleinfluenceoverthesubcontractingprocess.144 Mark Whyte, of Pilgrims Security Services,aUK-basedPSCoperatinginIraq,testifiesthatlargenumbersofsecurity
staff are not recruited directly by the companies active in the country but are
employedasfreelanceconsultants.145Subcontractingleadstoafurtherdispersal
ofauthorityinpolicyimplementationandleavestheoriginalclientwithlimited
meansofoversight.
Finally,problemsofoversightunderskewedmarketconditionscanalsomanifest
themselvesinadepletionofstateresources.Giventhatthestatehasnoinfluence
over salaries or other conditions of employment in the private sector, it has no
leverageovertheabilityoftheprivatesectortoenticeawayhighlytrainedindivid140 Catan,T.,HalliburtonemergesasthebiggestrecipientofIraqioilmoney,FinancialTimes,
16July2004;andCatan,T.,KerryvowstotargetBushoverHalliburton,FinancialTimes,12Aug.
2004.
141 Chatterjee(note84).TheincidenceofIDIQcontractshasincreasedintheUSA,asopposedto
theUK,wheretherehasbeenanincreasingemphasisonfixedcontracts.E.Krahmann,Conversation
withtheauthor,25Nov.2004.
142  US General Accounting Office (GAO), Contingency Operations: Army Should do More to
ControlContractCostintheBalkans,ReporttotheChairman,SubcommitteeonReadinessandManagementSupport,CommitteeonArmedServices,USSenate(GAO:Washington,DC,2000),p.7,
citedinKrahmann(note9),p.22.
143 Iraqreconstructioncontractsforfirmsfromsupportingnations,memofromDeputySecretary
of Defense Paul Wolfowitz, Determination and Findings, 5 Dec. 2003, available at URL
<http://www.acronym.org.uk/docs/0312/doc07.htm>.
144 Worden(note5).
145 Arun(note132).

32P R IVATE S EC UR ITY C OM P ANIES

ualsfromstateservice,especiallyinspecialoperationsforces.146 Concernsabouta
braindrainofspecialoperationsforcesasrecruitsbegintodeserttoprivatecompanieshavebeenvoicedbymembersoftheUScongressionalHouse ArmedServicesSubcommitteeonTerrorism,whowarnedthattheUSmilitarymaybelosing
covertforcesfasterthantheycanbereplaced.147 Suchisthelevelofexodusfrom
both US and British special forces that military commanders are finding themselvesobligated to formulate new financial and educational incentives to retain
personnel. 148
Lackofcoordinationandpracticalstumblingblocks
OversightofPSCoperationsisfurthercomplicatedbybasicpracticalobstaclesto
effectivepublicprivatepartnership.Tosomeextent,theproblemofintegrating
diverse resources and interests in long-term strategic planning is of course a
generalone,evenwithinregularforces.149However,coordinationbetweenregular
forcesandPSCsoperatinginthesametheatreisfurthercomplicatedbyadisparity
inorganizationalcultureandevenmutualsuspicion.
Oneobstacleforpracticalcoordinationarisesfromthesimpleissueofidentification.Manysecurityguardsprefertokeepalowprofilebytravellinginunmarked
vehiclesanddressingincivilianclothes.Thelackofestablishedpracticeonidentificationinthefieldposesobviousproblems,especiallywhencontractorsaredrawn
fromdifferentnationalitiesandthereisnoimmediatewayofidentifyingsomeone
asonthecoalitionside,forexample.Inextremecasesthishasledtoanexchange
offriendlyfire:anemployeeoftheHartGrouprecallshowcolleaguestravelling
throughthecountryonaninspectionmissionweremistakenforadversariesbyUS
troops.Thetroopsopenedfireontheconvoy,killingtwopeople.150
Moreover,PSCssometimescometothefieldill-equipped.Reportsofcompany
employeeslackingeventhebasictoolsofthetrade,suchasmapsorfunctioning
long-rangeradiodevices,compoundproblemsofcommunicationandimpedePSC
operations. 151 Thecurrentpractice,wherebycontractorsrelyoninformalcontacts
withmembersoftheregularforcesforaccesstobothmaterialsupport(suchas
maps)andinformation,isuntenable.Thereisaclearneedtodevelopformaland
established procedures for the practical interaction between private and public
forces as well as other actors in the field, especially in post-conflict situations.
146 Theproblemofretainingqualifiedstaffwithinthemilitary,withprivatesectorcompetitionfor
personnel,wasacknowledgedinUSDepartmentofDefense(note106),pp.810.
147 Jelinek,P.,AssociatedPress,Manyelitesoldiersleaveforbetterpay,20July2004,URL
<http://webserve.govst.edu/users/ghrank/Political/Not-So-Great%20Expectations/civilian.htm>;and
Mullen,R.,Specialopsretentionaproblem,witnesssay,DefenseToday,21July2004.
148 Isenberg(note101),p.8.
149 Isenberg(note101),p.10.
150 The2individualskilledhappenedtobeIraqis,contractedbyHartasinterpreterandchauffeur.
BBCRadio4(note112);andWilson,J.,Privatesecurityfirmscallformorefirepowerincombat
zone,TheGuardian,17Apr.2004,URL<http://www.guardian.co.uk/international/story/0,,1193718,
00.html>.
151 BBCRadio4(note112).

P R IVATE S EC UR ITY AND  THE EF F IC IENT  S TATE33

Suchprocedureswillhavetobecarefullyconsideredandwillultimatelyendup
being a balancing act between the different interests and working philosophies
involved.
Whopaysthepricefortheefficientstatesprivatesecurityfailures?
Whenthestatefailstocarryoutitshoped-forroleintheimplementationofpolicy,
thepriceforextensiverelianceontheprivatesectorishighinpracticalandpoliticalterms.Thecostoffailureiscompoundedwhentheefficientstatespolicyis
beingexercisedinaforeigncountry.Insuchcasesitisnotsimplythegovernment,
asthecontractingparty,thatistheconsumerofPSCservices:localpopulationsare
alsoaffected.AlthoughtheaimofthischapteristoconsiderPSCreliancefromthe
point of view of the efficient state, two further reflections are made about the
effectsofastrongstateimposingalargeprivatesecuritypresenceonforeignpopulations.
The missions in Afghanistan and Iraq can be conceived as attempts to
re-establishthefundamentalsocialcontractusinglargelyprivatemeans.Thelongtermeffectsontheattitudesoflocalpopulationscanatthispointintimeonlybe
guessedat,giventheunprecedenteddegreeofPSCactivity.However,itisclear
thattheUS-ledcoalitionsdegreeofsuccessinmanagingitsprivatepartnersin
bothcountrieswillprovideabasisforlessonstobediscussedandlearnedinthe
future.
Inthewordsofonecommentator,theoutsourcingofsomanyresponsibilities
risksbeingseenasanattempttocreateadistancebetweenthecoalitionsactions
andtheconsequencesofitsactions,betweenitsphysicaloccupationandthepolitical ramifications of the occupation.152  Concerns that the USA is seen to lack
rigour in its practice of outsourcing have been voiced even from within the US
Congress.153  Although PSC conduct necessarily varies, there is a risk that a job
half-donewillprovokesignificantresentmentamonglocalpeople.Inthisrespect,
criticism that the new Iraqi police and army have been sold short as a result of
trainingunderPSCauspicesmayproveparticularlycompromising.154
TheinfluxoftensofthousandsofforeignworkersintoIraqwillhaveanimpact
onconditionsintheemerginglabourmarket.AsinternationalPSCshaverealized
theadvantagesofhiringlocalstaff,inparticularbecauseofthelocalknowledge
andlowersalarydemands,therehasbeenasurgeintheiremploymentofIraqis.
One international security services and risk consultancycompany,ErinysInternational, now employs 14000 Iraqis throughout the country.155  As international
PSCshavebecomeincreasinglywaryoftherisingcostsanddifficultyinretaining
152  Isenberg (note 101); and ONeill, B., A new kind of private war, Spiked Online, 16 Apr.
2004,URL<http://www.spiked-online.com>.
153 Isenberg(note104).
154  Calbreath, D., Iraqi army, police fall short on training, San Diego UnionTribune,4July
2004,URL<http://www.signonsandiego.com/uniontrib/20040704/news_mz1b4iraqi.html>.
155 SeetheErinysInternationalInternetsiteatURL<http://www.erinysinternational.com>;and
Isenberg(note101),p.7.

34P R IVATE S EC UR ITY C OM P ANIES

stafffromtheircountriesoforigin,PSCinfluxisalreadycreatingatwo-tierworkforceinthelocalsecuritysector,dividedbetweenhighlypaidrecruitsfromWesternspecialservicesandcheaperechelonsdrawnfromlocalpopulations.156 Even
thelatter,however,normallyearnconsiderablymorethanthoseinthestatesecurity
services,letalonetheirfellowcitizensinotherbranchesofwork.
Finally,asdiscussedinchapter2,PSCpresencedetractsfromthelocalinputinto
andownershipofinstitutionbuilding.InbothAfghanistanandIraqithasbeendifficulttorecruitcompetentpersonnelforthenewnationalarmiesandpoliceforces,
aslocalpeopleprefertakingupemploymentwithforeignPSCs.157
Responsible for the implementation of a large share of US policy in Iraq and
elsewhere,PSCsneedtobeheldaccountableunderbothlawandcontract.Failure
todosowillhaveasignificantimpactontheimplementationofpolicy,givingthe
phrasemissionfailureawholenewcontent. 158 Thefollowingchapterconsiders
anotherfacetoftheUSAsuseoftheprivatesecuritysector,whereitisnotdrawn
upontocomplementregularforcesbutrathertoreplacetheapplicationofpublic
resourcesonanongoingbasisandinnon-conflict-relatedspheres.

156 Cha,A.E.,UnderclassofworkerscreatedinIraq,WashingtonPost,1July2004,p.A01.
157 Vendrell,F.,EUSpecialRepresentativeinAfghanistan,Personalconversationwiththeauthor,

14June2004.
158 Campbell,G.L.,Contractorsonthebattlefield:theethicsofpayingcivilianstoenterharms
wayandrequiringsoldierstodependonthem,PaperpresentedtotheJointServicesConferenceon
ProfessionalEthics,Springfield,Va.,Jan.2000,URL<http://www.usafa.af.mil/jscope/JSCOPE00/
Campbell00.html>.

4.Theglobalwaronterrorismand
privatizationofsecurity
UScounter-terrorismstrategyandtheattractivenessoftheprivatesecurity
sector
Althoughindustrycommentatorsgenerallyagreethattheglobalwaronterrorism,
(GWOT)hasledtoanincreaseduseofprivatesecuritycompanies,littleanalysis
hassofarbeendevotedtothespecificnatureofthesetasksortotheireffects.159
Whileexpertsdisagreeonwhetherterrorisminthe21stcenturyisqualitativelyor
evenquantitativelynew,itisclearthattheissuewillremainatthetopoftheinternational agenda for the foreseeable future.160  While the US operations in
AfghanistanandIraqaredeclaredtobepartofthewiderGWOT,intheforegoing
chapterstheyareconsideredascasesofmilitaryinterventionandoccupation.This
chapterexaminestheincreaseduseoftheprivatesectorinthemoreelusive(lowprofile and covert) aspects of the GWOT.161  Again, the focus is on the United
Statesanditsstrategicoutlook,butthefindingshavegenericrelevanceforefficient
statesgenerally.
ThemaindocumentsettingouttheUSapproachtotheGWOTtheQuadrennial
DefenseReviewof30September2001listssevenstrategictenetsforachieving
defencepolicygoals,threeofwhichhaveadirectbearingontheroleoftheprivate
sectorintheGWOT:(a)thefocusonriskmanagement,(b)thedevelopmentofa
capabilities-based approach, and (c) the transformation of the US military and
defenceestablishment.162
Risk management starts from the assumption that challenges are constantly
changing.Thisplaysoutasafundamentaltensionbetweenpreparingfortherisks
ofthefutureandaddressingthethreatsofthepresent.Therecognitionthatsome
risksarelessthanwellunderstoodisfundamentaltoariskmanagementapproach
tosecuritypoliticsandclearlysetsitapartfromearlierthreat-basedapproaches,
whichwerebuiltonavailableintelligenceaboutaparticularandidentifiableadver-

159  Hasham, M., Public wars, private profit, World Today, June 2004, URL <http://www.
theworldtoday.org>.
160  On problems in accurately charting the global incidence of terrorist activities, including a
critiqueoftheUSStateDepartments2003PatternsofGlobalTerrorismreport,seeKrueger,A.B.
andLaitin,D.,Misunderestimatingterrorism,ForeignAffairs,Sep./Oct.2004,pp.814.Onthe
effectoftheSep.2001attacksonUSstrategicconsciousnessseeMorgan,M.J.,Theoriginsofthe
newterrorism,Parameters,spring2004,p.41.
161  The activities of these [private companies] follow the traditional logic of covert action.
Guhenno(note35),p.12.
162  The other US strategic tenets are: defending the United States and projecting US military
power,strengtheningalliancesandpartnerships,maintainingfavourableregionalbalancesanddevelopingabroadportfolioofmilitarycapabilities.USDepartmentofDefense(note106),pp.1314and
5765.

36P R IVATE S EC UR ITY C OM P ANIES

sary.163  Risk management is amenable to private sector use precisely because it
requiresrespondingto(orpre-empting)risksatshortnoticeandwithlittleinstitutionalpreparation.
Acapabilities-basedapproachtostrategyreinforcestheattractivenessofprivatesectorsecurityserviceprovision.Underpinningthisapproachistheviewthat
theUSAcannotknowwithconfidencewhichactor(stateornon-state)willposea
threattovitalinterests.Accordingly,thefocusshiftstohowanadversarymight
fightratherthantheidentityoftheadversaryorthelocationwhereconfrontation
mightoccur.164 Thisapproachreliesonsurprise,deceptionandasymmetricwarfareinthefaceofanunknownadversaryanddemandsarefocusingofthearmed
forcesmission.165 Iftheprivatesectornotonlytakesoverthemanybasictasksof
operationbutalsoshouldersalargepartofthecostsforthedevelopmentofnew
technologies,resourcesarefreedupforamorestreamlineddefencesector.166
Third,theQDRsetsoutthetransformationoftheUSmilitaryanddefenceestablishment itself as involving experimentation with new approaches to warfare,
operationalconceptsandcapabilities,andorganisationalconstructsandgeneral
innovationinDepartmentofDefense(DoD)processes.167  The view that only
thosefunctionsthatneedbeperformedbytheDoDshouldbekeptbytheDoDhas
alreadyledtoasignificantincreaseinoutsourcingandwillcontinuetodosointhe
conceivablefuture.168
AlthoughthethreetenetsdescribedabovedonotdojusticetoUSdefencestrategyasawhole,theyareimportantinindicatingreasonsforanincreasedprivatizationinthecontextoftheGWOT.Whilethenewthreatperceptionhasopenedup
andhighlightednumerousrolesfortheprivatesectorandforpublicprivateinteractionforexample,inthecontrolofterroristfinancingandmovement,technologyleakageandtheprotectionofcriticalinfrastructurethisdiscussionfocuseson
theparticularroleofprivateprovisionofintelligenceinsupportofcounter-terrorist
policy.169

163 Gormley,D.M.,Thelimitsofintelligence:Iraqslessons,Survival,vol.46,no.3(autumn
2004),p.8.USSecretaryofDefenseDonaldRumsfeldsassessmentofthecurrentsecurityclimate
demonstratestheUSAsincreasedriskaversityinthewakeofthe2001attacks:thereareknown
knowns;therearethingsweknowweknow.Wealsoknowthatthereareknownunknowns;thatisto
sayweknowtherearesomethingswedonotknow.Buttherearealsounknownunknownstheones
wedontknowwedontknow.QuotedinRumremarkwinsRumsfeldaward,BBCNewsOnline,
2Dec.2003,URL<http://news.bbc.co.uk/2/hi/americas/3254852.stm>.
164 USDepartmentofDefense(note106),pp.1314.
165 USDepartmentofDefense(note106),p.14.
166 ForadetaileddiscussionseeHagelin,B.,Science-andtechnology-basedmilitaryinnovation:
theUnitedStatesandEurope,SIPRIYearbook2004(note61),pp.285304.
167 USDepartmentofDefense(note106),p.32.
168 USDepartmentofDefense(note106),pp.5354.
169 Counter-terrorismisdistinctfromanti-terrorism,whichcoversawiderrangeofactivities.Fora
comprehensivecoverageofwaysinwhichtheprivatesectorisincreasinglyengagedinanti-terrorist
activityseeedsBailesandFrommelt(note34).

THE WAR  ON TER R OR IS M  AND S EC UR ITY P R IVATIZATION 37

Privatesecurityandintelligencegathering
Preventive counter-terrorist strategies place emphasis on intelligence functions.
Thiswasofcoursethecasebeforetheattacksof11September2001,butsincethen
theissuehasmovedswiftlyuptheUSforeignpolicyagenda.Therecognitionof
intelligencefailuresbothinpredictingtheattacksandinthelead-uptothewarin
Iraqpromptedreneweddebateonintelligenceneedsandorganization.170 Although
theprimestrategicimportanceofhumanintelligence(HUMINT)inthecontextof
theGWOThasbeenestablishedbothinnumerousUSgovernmentdocumentsand
in independent analysis, the means by which an adequate, agile and reliable
HUMINTforcecanbegeneratedhavebeenwidelycontested. 171 Somearguethat
the traditional shape of intelligence agencies, exhibited through formal,
hierarchical and compartmentalized information strategies, needs to be replaced
withflexible,decentralizednetworksofpublicandprivateinformationproviders,
analystsandusers.172Thistrendisreflectedinthemorespecializedintelligence
activityofPSCs.
FrequentlinksbetweenPSCsandcompanieswithintheinformationtechnology
(IT) and electronic systems industries make private security actors seem well
placedforthetechnology-intensiveaspectsofintelligencegathering.Indeed,many
oftheimportantactorswithintheintelligencebranchoftheprivatesecuritysectorhaveoriginatedasITortelecommunicationscompanies,onlytothendiversify
theirportfoliostocoversecurity-relatedservices.
PSCsaretodayusedforawidevarietyofintelligencetasks:fromthegathering
of intelligence from satellites and sophisticated sensors, to interpreting and
analysingresultsanddistributinginformationamongrelevantgovernmentbodies.
AirScan,aFlorida-basedcompany,hasprovidedaerialintelligence-gatheringservicesinAngola,theBalkans,ColombiaandSudan.173 TheUSStateDepartment
hired PSCs to provide intelligence on rebels of Unio Nacional para a
IndependnciaTotaldeAngola(UNITA,NationalUnionfortheTotalIndependenceofAngola)inAngolaandtoinvestigatetheguns-for-gemstradeinAfrica;
eventheInternationalMonetaryFund(IMF)hascontractedprivatefirmsforintelligence. 174 DynCorpisanotherUSPSCinvolvedinintelligenceprovision,inthis
caseworkingfortheColombianMinistryofDefencetoprovideintelligenceon
170 See,e.g.,The9/11CommissionReport:FinalReportoftheNationalCommissiononTerrorist
Attacks Upon the United States (US Government Printing Office: Washington, DC, 2004), URL
<http://www.gpoaccess.gov/911/>; and Review of Intelligence on Weapons of Mass Destruction
(Butler Committee Report), HC898 (Stationery Office: London, 2004), URL <http://www.
butlerreview.org.uk/>.
171 USDepartmentofDefense(note118),p.38;andSteinberg,J.B.,Graham,M.andEggers,A.,
BuildingIntelligencetoFightTerrorism,BrookingsInstitutionPolicyBriefno.125(BrookingsInstitution:Washington,DC,Sep.2003).TheUS9/11CommissionbroughtabouttheresignationofCIA
DirectorGeorgeTenetandsetthestageforamajorrestructuringoftheintelligencecommunity.See
alsoBlack,C.,Thesecurityofbusiness:aviewfromthesecurityindustry,edsBailesandFrommelt
(note34),pp.17382.
172 Steinberg,GrahamandEggers(note171),p.2.
173 Singer(note2),p.16.
174 Singer(note2),p.182.

38P R IVATE S EC UR ITY C OM P ANIES

rebelsofFuerzasArmadasRevolucionariasdeColombia(FARC,Revolutionary
ArmedForcesofColombia).175 ThechieffinancialofficerofCACIInternational
statedinJanuary1998thattheintelligencecommunitywouldbeagreatmarketplaceforus;oneacquisitionand10monthslater,thecompanyproclaimedasignificantboostinrevenueowingtoitslandingintelligencecontractsworthatotalof
$29million. 176  Since then the company has continued to expand its intelligence
servicescapacityand,despiteembroilmentinthescandaloverabuseattheAbu
GhraibprisoninIraq,isoneofthekeyplayersinthisnewsegmentofthemarket
forprivatesecurity.
PSCs are also increasingly used in the realm of human intelligence. This
involves primarily smaller companies supplying former intelligence agents as
actualbodiesonthegroundinsensitivelocations,notablyinPakistan,whichUS
soldiershavebeenforbiddentoenterintheirsearchforal-QaedaleaderUsamabin
Laden.177Theprivatesectorhasalsobeenawardedcontractsintherealmofcyber
terrorism, setting up businesses to monitor suspicious Internet siteswhat US
DeputyDefenseSecretaryPaulWolfowitzcallscybersanctuaries.178Anexample
ofthisistheSearchforInternationalTerroristEntitiesInstitute,operatingoutof
(undisclosed)locationsintheUSAandIsrael. 179
In further testimony to the proliferation of private sector intelligence, private
placementcompaniesthatspecializeinsupplyingtalenttointernationalPSCshave
sprung up in recent years, and the US Department of Homeland Security has
announcedthatitmightseekaprivatevendortoprovideintelligenceresearchand
operations specialists for its Immigration and Customs Enforcement (ICE)
agency.180
Politicallegitimacyintheglobalwaronterrorism
Strong emotional reactions worldwide to the attacks of September 2001 set the
stageforwidespreadcontentionoverwhatthestrategicgoalsoftheGWOTshould
be.TheUSAhasinvariousofficialdocumentsaffirmedacommitmenttodealing
withtherootcausesofterrorism,identifyinginparticulartheproblemoffailed
175 Quintanilla,J.,TheinvisibleUSwarinColombia,ScoopMediaOnline,1July2004,URL
<http://www.scoop.co.nz/mason/stories/WO0407/S00009.htm>.
176 McCarthy,E.,IntelligenceworkcomestoCACIviaacquisitions,Washington Post,8July
2004,URL<http://www.globalsecurity.org/org/news/2004/040708-caci-intell-work.htm>.
177 Chaffin,J.,USturnstoprivatesectorforspies,FinancialTimes,17May2004;USdeepening
of counter-terrorist cooperation (primarily intelligence) with the Philippines is set out in the US
National Security Strategy (NSS), published in Sep. 2002. See URL <http://www.whitehouse.
gov/nsc/nss.html>,p.26.SeealsoUSconcernedaboutgroupinPhilippineslinkedtoal-Qaeda,
ReutersandAP,publishedinTaipeiTimes,28June2004.
178 Lipton,E.andLichtblau,E.,Evennearhome,anewfrontisopeningintheterrorbattle,New
YorkTimes,23Sep.2004.
179 LiptonandLichtblau(note178).
180 Chaffin,J.,USturnstoprivatesectorforspies,FinancialTimes,17May2004;Dizzard,W.
P.,DHSeyesoutsourcingintelligencework,GovernmentComputerNews,GCN.Com,5Oct.2004,
URL<http://www.gcn.com/vol1_no1/homeland-security/27527-1.html>.FormoreontheICEseethe
agencysInternetsiteatURL<http://www.ice.gov>.

THE WAR  ON TER R OR IS M  AND S EC UR ITY P R IVATIZATION 39

statesandlaunchinganumberofinitiativestothiseffect,suchastheEastAfrica
CounterterrorismInitiative.181 Atthestrategiclevel,counter-terrorismpolicycannotbereducedtoresponsiveactionorevendeterrenceofterroristactionbutultimatelyboilsdowntoaconvertingofopinions.Inacontestthatisbyitsverynature
acontestforheartsandminds,thewayinwhichpolicyisimplementedcarries
significantpoliticalweight.
Theuseoftheprivatesecuritysectorcan,byitsverynature,onlyfocusonshorttomedium-termcounter-terroristmeasures.Over-concentrationonthisshort-term
aspectoftheproblemcancombinewithexcessiverelianceoncommercialsector
actors to convey an image of disengagement and disinterest in addressing root
causesofterrorismonthepartoftheUSA.182 Thereis,inthewordsofonecommentator,ariskthatstrategysgoalbecomesnotidentifyingthebestpossibleoutcomeandfindingthemeanstoattainit,butkeepingasmanyoptionsopenforas
longaspossibletomaximisetacticalflexibility.183  If the GWOT is to be conceivedofinthecontextofglobalsecuritygovernance,wherestateandnon-state
actorsacttogether,theuseofPSCsneedstobemuchmorevisiblyincorporated
intoapoliticalstrategythatalsoinvokesandexploresthecapacityoftheprivate
sectorasawholetoplaymorecreativeandnon-zero-sumrolesinsecuritybuilding,withinastrongnormativeframework. 184
Moreactors,moreproblems?
The inadequacy of inter-agency communication has been pointed out in recent
investigationsintotheperformanceofbothUSandBritishintelligenceagencies.185
Clearly, the proliferation of private actors within the intelligence world further
complicatesthepicture,andensuringthattherightinformationreachesallrelevant
partiesandisputtotherightusebecomesincreasinglydifficult.Theclassicproblemsofintelligencegatheringandinterpretationalsorequirereconsiderationinthe
light of the use of PSCs: infiltration,methodsproliferationandhumanresource
181 Shinn,D.H.,FightingterrorisminEastAfricaandtheHorn.ForeignServiceJournal,Sep.
2004,p.42.OnsimilaritiesofrootcausesofinternalconflictandrootcausesofterrorismseeRichmond,O.P.,Realizinghegemony?:symbolicterrorismandtherootsofconflict,StudiesinConflict
and Terrorism, vol. 26, no. 4 (July/Aug. 2003), pp. 289309, available at URL <http://www.
polisci.taylorandfrancis.com/ter_content.html>. The US National Security Strategy establishes the
securitythreatsposedbyfailedstates(seenote177).ForacritiqueofthelackofstrategytoimplementthisfocusseeRice,S.,TheNewNationalSecurityStrategy:FocusonFailedStates,Brookings
Institution Policy Brief no. 116 (Brookings Institution: Washington, DC, Feb. 2003), URL
<http://www.brookings.edu/comm/policybriefs/pb116.htm>.
182 ThereisusuallynoquestionaboutthelevelofUSresolveandinterestifthereareUStroops
ontheground.Ifweonlyprovidecontractors,whiletheymightbereallyeffectiveintermsofmission
accomplishment,theycanleadtochargesofUSambivalenceorlackofinterest.Wheelan(note67).
183 Guhenno(note35),p.14.
184  Bailes, A. J. K., Business and the security agenda: victim, accomplice or ally?, Opinion,
Centre for Transatlantic Relations, Oct. 2004, URL <http://transatlantic.sais.jhu.edu/Publications/
opinions>.
185  CIA slated over Iraq intelligence, BBC News Online, 9 July 2004, URL <http://news.
bbc.co.uk/2/hi/americas/3878969.stm>;seealsoQuintanilla(note175).

40P R IVATE S EC UR ITY C OM P ANIES

mismanagementapplytopublicandprivatesectorsalike.186  The Tabuga Report


pointedoutthatthehiringofthird-countrynationalsforintelligencecollectionwas
particularlyproblematic.187  There are no guarantees that individual employees
hiredbyaPSCtoperformintelligencetaskswillbefavourablydisposedtowards
theclientsbroaderagendas.
Asearlyas26December2000,theUSArmyindicateditsawarenessoftherisks
associated with outsourcing intelligence in a memorandum issued by Patrick T.
Henry,AssistantSecretaryoftheArmy.188Thememorandumarguesthat,atthe
operational, strategic and tactical levels, the intelligence function should be
exemptedfromprivatesectorperformanceonthebasisofrisktonationalsecurity.189 Specifically,thememorandumcautionsthatcontractorsmaybeacquired
byforeigninterests,acquireormaintaininterestsinforeigncountriesorprovide
supporttoforeigncustomers.190  PSCs frequently operate on a global basis and
provideservicestoanumberofclientsatatime,varyinginnationalityandincludingotherinterestgroups,suchasthecorporatesectoritself.Inanexampleofdubiousintelligenceprovision,severalIslamicgroupsandcharitiessuedtheSearchfor
InternationalTerroristEntitiesInstitute,acompanyworkingoncyberterrorism,for
defamation.191
Fundamentally,theuseofPSCsintheintelligencesectormeanstheintroduction
of a new protagonist in security politics. All aspects of intelligence gathering
requireinterpretation,andwhenactorswhosemainresponsibilityisnottovoters
and democratic institutions but to shareholders perform this, there is reason for
concern.
Losingcompetence?
The repercussions of losing competence in the realm of intelligence gathering
vastlyoutweighthepotentialdetrimentofprivatesectordependenceintheareaof,
forexample,logisticsupport,giventhecentralroleoccupiedbyintelligenceservicesinthecurrentsecurityclimate.Fromtheperspectiveofthefirmsthemselves,
the temptation to recruit directly fromgovernment agencies is easily explained:
such individuals have been thoroughly trained, are knowledgeable about the
functioningofpublicintelligenceagenciesandpossesstheadditionaladvantageof
possessingrelevantsecurityclearances.192

186 Sorel,M.,Wholetthedogsout?:theintelligencerisksofUnitedStatesprivatemilitaryfirms,
Unpublishedpaper,YaleUniversity,NewHaven,Conn.,8May2004,marc.sorel@yale.edu.
187 Worden(note5);andtheTabugaReport(note119).
188 USDepartmentoftheArmy,OfficeoftheAssistantSecretary,ManpowerandReserveAffairs,
MemorandumThruAdministrativeAssistanttotheSecretaryoftheArmy,DirectorofArmyStaff,
availableontheInternetsiteoftheCenterforPublicIntegrity,URL<http://www.publicintegrity.
org/wow/report.aspx?aid=328>.
189 USDepartmentoftheArmy(note188).
190 USDepartmentoftheArmy(note188).
191 LiptonandLichtblau(note178).
192 Bamford,J.,Thisspyforrent,NewYorkTimes,13June2004.

THE WAR  ON TER R OR IS M  AND S EC UR ITY P R IVATIZATION 41

Interestingly,however,privatesectoractivityintheareaofintelligencegatheringalsoprovidespositiveopportunitiesinthecontextofriskmanagement.With
limitedresourcesandademonstratedlackofcompetenceinforeignlanguages,the
intelligenceworldneedstoquicklyfindwaysofboostingcapacity.Privateactors
ingeneral(includingcompaniesnotinthebusinessofsecurity)operatinginpoliticallysensitiveorunstableareasoftenpossessawealthofinformationaboutlocal
conditionsandeventsonthegroundwhichcouldbeveryusefulforgovernments.
Asitstands,theprivateintelligencesectoroperateslargelyinavacuum,withthe
associatedrisksbothofintelligencemisuseandofintelligencenotreachingrelevantparties.Anew,clearstructureforpublicprivateinteractioninthisfieldwould
beneededtodrawoutthispotentialinawaythatavoidsoroffsetstheproblems
mentionedabove.193 Innovationintermsofpublicprivatepartnershipmodelswas
madeapriorityfortheUnitedStatesinthe2001QDRbutsofarhasyieldedlittle
practicalresult.Oneinteresting,butlargelyuntried,initiativeinthisrespectisthe
US Terrorist Threat Integration Center (TTIC), whose purported purpose is to
closetheseamsinintelligenceanalysis.194
Ifintelligenceisnotproperlyintegratedorfallsintothewronghands,theeffects
willbehugelydetrimentaltosecurity.ThecasefordrawingPSCsintoaclearer
andmorerobuststructureofsecuritygovernancedemandsthattheiruseisconductedinanopen,transparentwayandthatproperaccountabilityisensured.Each
decisiononpossibleoutsourcingshouldcarefullybalancethepotentialvalueadded
byusingPSCsagainsttheriskofvaluebeinglost.Asonecommentatorpointed
out,justbecausewecanprivatisedoesntmeanweshould. 195

193 Black(note171).
194 Chaffin,J.,USturnstoprivatesectorforspies,FinancialTimes,17May2004.
195 Singer(note2),p.242.

5.International,regionalandnational
responses
Somecriticsoftheprovisionofsecuritybyprivatefirmshavearguedthatregulatingtheindustrywouldconferunduelegitimacyonwhatareinherentlyillegitimate
actors.196 ThesecriticsadvocateatotalbanonPSCsandtherenationalizationof
securityandmilitaryserviceprovision.Theextentofthedemandforandsupplyof
privatesecurityservicesaroundtheworldindicates,however,thatabanisunrealistic:itwouldbeimpossibletoenforceand,importantly,wouldworkagainstthe
aimofgreatertransparencyandaccountabilityinthesecuritysectorbyincreasing
thelikelihoodthattheindustrywouldbepushedunderground.Furthermore,most
would agree that, even if it were practically possible, entirely banning PSCs is
undesirable. The establishment of a global private security industry is a fait
accompliandtoeschewanyengagementwithitwouldmeanthewasteofapotentiallyusefulresource.
Attheotherendofthespectrum,afewcommentatorshavearguedthatthemarketsinvisiblehandwillultimatelyensureaninformalpunishmentofbadprivate
securitybehaviourandthatforthisreasonregulationisunnecessary.Thislineof
argumentisequallyuntenable:theputativemagicofthemarkethassofarnotbeen
sufficienttodiscourageroguebehaviourbyindividualfirmsand,evenifitwere,
thismarketwouldnotbecapableofaddressingthewiderquestionsofaccountabilityoutlinedabove.197
Realistic responses to the growth of the private security industry need to be
foundatintermediatelevels.ThepushforregulationofPSCactivityhasacceleratedwiththewarinIraq.Theinternationalcommunityshouldthereforeseizethe
opportunitytocapitalizeonthismomentum. 198
Issues,interestsandoptions
Theeffectsofrelianceontheprivatesecuritysectordependonthenatureofthe
statethatcontractsPSCsandthestrategicenvironmentinwhichtheyareused.If
PSCsaretobeconstructivelyengagedinabroadersystemofsecuritygovernance
bystateandnon-stateactors,threemainissuesneedtobeaddressed.First,thereis
196 TheviewwasexpressedinedsMusahandFayemi(note11),whereitwasarguedthatPSCs
stemmeddirectlyfromold-stylemercenariesandhavenoplaceinconflictmanagementandpeacebuilding. See also Adejumbi, S., A view from Africa, eds Bailes and Frommelt (note34),
pp.24253.
197  Nossal, K. R., Global governance and national interests: Regulating transnational securitycorporations in the post-cold war era, Melbourne Journal of International Law, vol. 2, no.2
(2001),p.459.
198  Evans, S., Privatised wars need new laws, BBC News Online, 10 May 2004, URL
<http://news.bbc.co.uk/2/hi/middle_east/3699957.stm>;andLovell,J.,Iraqmakesitaboomtimefor
former dogs of war, Reuters, 22Sep. 2004, URL <http://in.news.yahoo.com/0409222/137/
2g71g.html>.

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 43

thequestionofaccountability.Withoutlegalaccountabilityofindividualcontractors, the use of PSCs will continue to be viewed with suspicion. Second is the
widerquestionoflegitimacy.IfPSCsaretotakeanactivepartintheconstruction
ofsecuritygovernance,theyneedtobeviewedaslegitimateactorsbyotherstate
andnon-stateactors,aswellasbythepeoplewhoaretheultimateobjectsofthe
systemsandservicessupplied.Morethanjusttheoreticallegalaccountabilityis
neededtoensurethatappropriatePSCactionisperceivedaslegitimatewhether
throughthesanctioningofoperationsbystatesorbyotheractors.Thelegitimacy
ofPSCswillalsodependonhavingadequatelevelsoftransparencyanddemocratic
standards in terms of the companies operations, finances and conduct. Third,
practicalimpedimentstoeffectivePSCactionneedtobeaddressed,andsystems
forpublicprivateinteractionontheinternationallevelneedtobedeveloped.This
willrequirePSCsincreasinglytoworkwithstates,ratherthanattheexpenseof
states, aswell asinconcertwith other actorssuch asinternational and regional
organizations,NGOsandothernon-stateactors.
Avarietyofinterestsmustbebalancedinorderforprivatesecurityusetobe
botheffectiveandequitable.199 Firstandforemost,theinterestsofthehoststate
(thestatewherePSCsoperate)anditspopulationmustbetakenintoaccount.This
applies particularlytoweakstates,wherePSCsarelikelyto be operatingunder
contractsfromexternalactors.Second,thehomestate(thestateoforiginofa
particularcompany)needstohaveinfluenceoverwhere,howandforwhomaPSC
operates.Third,industryactorsthemselvesneedtoseethebenefitofregulatoryand
legislative measures guiding their use as a means of ensuring that good PSC
behaviourisrewardedandrogueconductpenalized. 200 Onlybytakingintoaccount
theinterestsofallpartiescanregulationhavebothpracticalandnormativeeffect.
Twomaintypesofresponsetotheprivatizationofsecurityareconceivable:legal
andregulatory.Boththeseframeworksare,intheoryatleast,amenabletooperatingatthreedifferentlevels:national,regionalandinternational.Legalframeworks
areadvantageousgiventheircapacityforretribution.Inaddition,legalframeworks
havebeenshowntohaveadeterrenteffect.201 Regulatoryframeworks,incontrast,
havesofarbeenlargelynon-enforceableandcanbesaidtobeprimarilypreventive,takinganinclusiveapproachtotheindustryandencouraginggoodpractice
generally.202 InformulatingresponsestoPSCactivity,considerationneedstobe
giventothecontinuumbetweenhardversussoftlawandthedevelopmentof
normsandcodesinrelationtomultinationalcorporationsmorebroadly.203 Differ199 Lilly,D.,GreenPapersubmission:privatemilitarycompanies:optionsforregulation,InternationalAlert,July2002,p.3,availableatURL<http://www.international-alert.org/publications>.
200 Thisisalludedtoin,e.g.,Kinsey,C.,Regulationandcontrolofprivatemilitarycompanies:
thelegislativedimension,ContemporarySecurityPolicy(forthcoming2005).
201 Akhavan,P.Beyondimpunity:caninternationalcriminaljusticepreventfutureatrocities,
AmericanJournalofLaw,vol.95,no.1(2001).
202 UNSecurityCouncilResolution1540,28Apr.2004,onthenon-proliferationofweaponsof
mass destruction, indicates an important new direction here. For the resolution see URL
<http://www.un.org/documents/scres.htm>.
203 Vagts,D.F.,TheUNnormsfortransnationalcorporations,LeidenJournalofInternational
Law,vol.16(2003),pp.800802;andChinkin,C.,Normativedevelopmentintheinternationallegal

44P R IVATE S EC UR ITY C OM P ANIES

entresponsemeasureswilltargettheprivatizationofsecurityfromdifferentdirectionsfromthetargetingofthecompaniesthemselvesandtheiremployees,tothat
ofprospectiveoractualclientsofcompanies.Thesetwostrandsarenecessarily
complementary: companies need to behave according to certain standards, but
considerationmustalsobegiventothecircumstancesandconditionsunderwhich
PSCsshouldbecontracted.Thefragmentednatureoftheindustryandthediversity
ofitsclientsmakeitisunlikelythatanyoneinstrumentwillcaptureallactivitiesof
theprivatesecuritysector.Acombinationofmutuallyreinforcingincentivemechanismscouldprovideanetworkofoverlappingstructuresofregulationthatstand
somechanceofcapturingalargepartofprivatesecurityandmilitaryserviceprovision.
Theinadequacyofinternationallegalinstruments
Thebenefitsofaddressingtheprivatizationofsecurityattheinternationallevelare
clear,giventhetransnationalnatureofcompaniesthemselves,theirfieldsofoperation,theidentityofclientsandtheeffectsofsecurityprivatization.Themostfrequentlycitedinternationallegaldocumentsintheliteratureonprivatesecurityare
theUNandOAU/AUconventionsonmercenaryactivity.204 Neitherconventionis
ultimately applicable to the activities of contemporary PSCs, even where PSCs
havebeenhiredforcombatservicesinthecontextofarmedconflict.205 Thelackof
practical applicability of the International Convention Against the Recruitment,
Use, Financing and Training of Mercenaries is reflected in the fact that it took
12yearsforittoberatifiedbytherequiredminimumof22countriesandtoenter
intoforce.NoneofthemajorWesternpowersaresignatories.
Amendingthesetwoconventionsbyredefiningmercenariestoincludeprivate
contractorsisunlikelytobeparticularlyeffectiveinmitigatingthewiderconsequencesofprivatesecurityprovision.206First,thereareinherentdefinitionalproblems.Thedistinctionbetweencombatandnon-combattasksistenuous,anda
banonclear-cutmercenaryactivitymightbeseenasnotonlyinconsistentbut
alsohypocriticalsinceitwouldleaveunaddressedsuchtasksastraining,strategic
adviceandoperationalsupportallofwhicharecentraltomilitarymissionsand
canbeinstrumentalintheoutcomeofconflict.207 Furthermore,directparticipation
systemincommitmentandcompliance:theroleofnon-bindingnormsed.D.Shelton,Commitment
andCompliance:TheRoleofNon-BindingNormsintheInternationalLegalSystem(OxfordUniversityPress:Oxford,2003).
204 Seechapter1andnote15.
205 Singer(note16),pp.53032.
206 TheAUisreportedlyconsideringthepossibilityofupdatingtheConventionfortheElimination
ofMercenarisminAfrica(seenote15)tomakeitmorerelevanttopresent-daycircumstances.However,therehavebeennoresultssofar.Boshoff,H.,InstituteforSecurityStudies,Pretoria,South
Africa,Personalconversationwiththeauthor,Nov.2004.
207 ThedefinitionalproblemsarealsoconsideredinBritishForeignandCommonwealthOffice
(FCO), Annex A: Mercenaries: Africas experience 1950s1990s, Private Military Companies:
Options for Regulation, HC577 (Stationery Office: London, Feb. 2002), URL <http://www.fco.
gov.uk/Files/KFile/mercenaries,0.pdf>,p.23.Furthermore,theDiplockCommittee,inits1976report

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 45

incombatortheeffectivereplacementofregulartroopswithPSCsisnowcomparativelyrareandsuchabanwouldaddressonlyaverysmallsegmentofprivate
securityactivity.Second,agreementbetweenstatesonamendinginternationallegislationisslow,asindicatedbytheslowpaceofratificationoftheexistingInternationalConvention.Third,evenwhenenacted,internationallegislationisnotoriouslydifficulttoenforce.
AlthoughitispossibletotryindividualcontractorswhohavetransgressedinternationalhumanitarianorhumanrightslawininternationalcourtssuchastheInternationalCriminalCourt(ICC),effectiveresponsestoprivatesecuritycompanies
must also be directed at the company level. 208  Some scholars have suggested
wideningthescopeforprosecutingcorporateentitiesininternationalcourts,but
thisissofaruntried.209
ThefailuretoestablishthepreciselegalstatusofPSCsininternationallaw,as
well as the meagre prospects for fruitfully amending (and implementing) internationallegaldefinitions,makesnationallegislationamoreeffectivemeansinthe
near term. However, instruments that are regulatory rather than legally binding
shouldalsobeconsideredattheinternationallevel.
UNapproachestoprivatesecuritycompaniesandprospectsforan
internationalregulatorybody
TheUnitedNationsistheprimaryactorresponsibleforthemaintenanceofinternationalpeaceandsecurity.AclearUNstanceontheissueofPSCsandtheirconductwouldcarryimportantnormativeweight,evenifitwouldnotcarrytheforce
oflaw.Asthehighestinternationalauthority,theUNsroleasapromoterofnorms
cannotbeoverstated.Moreover,theorganizationhasaclearneedtorespondtothe
newrealityandextentofinternationalprivatesecurity.
Asastartingpoint,theUNcouldaddresstheissueofitsownuseofPSCs.As
pointedoutabove,theUNhasmadeextensiveuseofPSCsinsupportof peace
operations,andthisPolicyPaperarguesthatsuchusebyalegitimateinternational
organizationmaybeoneofthemostfruitfulwaysofcapitalizingonprivatesector
resources.210However,thesignificanceofaccountabilityandlegitimacystandards
inpeaceoperationsrunsbothways:justasthegeneralpoliticallegitimacyofUN
effortsconferslegitimacyonprivatesecurityactors,alackofPSCaccountability
mayreflectbadlyontheUNitself.

following the involvement of British mercenaries in Angola, took the view that a blanket ban on
privatemilitaryactivityabroadwouldbeanunwarrantedinterferencewithindividualliberty.British
FCO(note232),p.23;andSinger(note16),p.532.
208  On developments in the ICC see Wiharta, S., Post-conflict justice: developments in internationalcourts,SIPRIYearbook2004(note61),pp.191206.
209 See,e.g.,Kamminga,M.T.andZia-Zarifi,S.(eds.),LiabilityofMultinationalCorporations
underInternationalLaw(KluwerLawInternational:TheHague,2000).
210 Thisisnottosuggestanyreplacementofnationaltroopsforpeaceoperations,whichisboth
undesirableandhighlyunlikely.Lilly(note199),p.7.

46P R IVATE S EC UR ITY C OM P ANIES

TheUNneedstodevelopandmakepublicstandardsforPSCswhichtheymust
observe in order to qualify for contracts with the organization. PSC support of
peaceoperationsneedstobemadeopenandtransparent.Afirststepwouldbeto
maintainapubliclyaccessiblelistofcompaniescontractedbytheUN,specifying
theirtasksandmandates,rulesofengagement,contractsizeandareaofdeployment.Thiswouldpermitpublicscrutinyofcompaniesengagedinsupportofpeace
operationsandwouldchallengethegeneralacceptanceofclientconfidentiality
thatcurrentlyprevailswithintheindustryandwhichblocksdiscussionofcompany
conductandoperation.Standardsforcontractingcompaniesshouldbeconsidered
carefullybutshouldataminimumincludecompliancewithinternationalhumanitarianlaw,unconditionalrespectforhumanrights,theensuringoftransparencyand
accountabilityofindividualcontractors,sufficientvettingandtrainingofstaff,and
the exclusive use of companies with established track records in these regards.
ContractingofPSCsinconjunctionwithpeaceoperationscouldthusprovideafirst
avenue for drawing private security actors closer into a system of international
securitygovernancepremisedoninter-sectoralcriteriaforlegitimacy.
AUNreviewofthePSCsusedforinternationalpeaceoperationscouldalsobe
seenasabasisfordevelopinginternationalregulationofPSCswhentheyarecontractedbypartiesotherthantheUNitself.211Suggestionshavebeenmadefora
regulatorybodyforinternationalcontractingofprivatesecurityservicestobeset
upeitherundertheauspicesoftheUNSecretary-GeneralsSpecialRapporteuron
Mercenarism212 orunderaseparatebody,replacingtheroleoftheSpecialRapporteurratherthanenhancingit.AbodysetupundertheUNcouldkeeparegisterof
PSCsthatconformtoagreedstandardsofoperationandtherebyaccreditsuch
companieswithacertaindegreeoflegitimacy,thusallowinginternationalstateand
non-state clients to make a better-informed choice among suppliers before contracting.AnotherpossibilitywouldbefortheUNtoactinanauditcapacityby,for
example,sendingindependentagentstoverifythestandardsofconductofindividualcompaniesandcontracts.However,thisislikelytobecostly,itwouldrunup
againstdifferencesinthegenerallegalenvironmentforcompanyregulationindifferentjurisdictions,anditwouldbereliantonstateactionforenforcementinthe
caseofrevealedabuses.
Self-regulation:theindustryanditsinternationalnon-stateclients
Anotherpotentialwayofregulatingtheoperationoftheprivatesecurityindustryat
theinternationallevelmightbethroughinternationalvoluntaryagreements.Such
mechanismswouldnotcarrytheforceoflaw,andcompliancewouldessentiallybe
voluntary;theycouldbetargetedateithertheindustryitselforatclientsofthe
industry.

211 Milliard(note4);andSinger(note16),pp.54547.
212 Singer(note16),p.545.

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 47

Self-regulationoftheprivatesecurityindustrywouldentailtheformulationof
codesofconduct,settingstandardstowhichcompanieswouldhavetoconformin
carrying out contracts. Clients would then be able to make an informed choice
aboutthegeneralconductandbehaviourofaspecificcompanybeforedecidingon
whetherornottohireitforthedeliveryofaparticularservice.213
Industrymembersthemselvescould,inaconcertedeffort,drawupsuchcodesof
conduct.TheparticipationofindividualPSCsinthisprocesscouldbemotivatedby
suchfactorsasprestigeandreputationconcernsaswellaspeerpressurewithin
theindustry.SuchaninitiativehasbeentakenbytheIPOA,whichcurrentlyhasa
membership of 12PSCs. The draft IPOA Principles of Conduct, while vague,
addresssomeofthemostimportantissuesofPSCactionsuchasstandardsregarding human rights, transparency, accountability, acceptable clients, safety and
employee protection, rules of engagement, arms control (weapons only to be
obtained legally), and the health and quality of employees. Furthermore, the
organizationhasdraftedminimumstandardsandtrainingrequirementsforprivate
securityprofessionals.214AlthoughthedraftIPOAPrinciplesneedtobesubjectto
muchwiderdebateaswellasconsiderablerefinement,theyarecommendableasa
firststeptowardsself-regulationoftheindustry.Specificattentionmustbegivento
theriskofPSCscontributingtothespreadofarms;thesensitivitiesofparticular
areasofoperations;andthedefinitionofacceptableclients(currentlydefinedinthe
IPOA draft as legitimate, recognised governments, international organisations,
NGOsandlawfulprivatecompanies).
For companies to be motivated to participate in voluntary self-regulation, the
normativestandingconveyedbytheschememustbeconsiderable.Theendorsementofvoluntarycodesforprivatesecurityindustrybehaviourbyactorsexternal
to the industry itself is likely to increase the prestige associated with company
compliance. This is one of the most important shortcomings of the IPOA Principles:unlesstheyaresanctionedbystatesorinternationalorganizations,theyare
likelytobeaveryweakinstrument.215Itisworthnotingthatafewcompanieshave
drawnupcodesofconductorcodesofethics,buttheyareoftenunhelpfullyvague
andsufferfrombeingdirectedattheindividualcompanyratherthantheindustry
level.
A more comprehensive way of approaching self-regulation of the private
securityindustryisthroughmodelsthattargetindustryactorsbutarebindingatthe
statelevel,suchastheOrganisationforEconomicCo-operationandDevelopment
(OECD)GuidelinesforMultinationalEnterprises(generaltoallcorporateactors)
213 Thiswouldmeananinstrumentakintotheenvironmentalcertificationschemedrawnupunder
theInternationalOrganizationforStandardization(ISO).
214  The IPOA membership, Principles of Conduct and Standards are all available at URL
<ipoaonline-iraq.org/>.
215 Inthisrespect,self-regulationwithinaframeworksuchastheUNGlobalCompact(whichalso
stipulatesstandardsforcorporatebehaviourbutisdrawnupbyactorsexternaltotheindustryitself)is
likelytobemoreeffectiveinconferringlegitimacyontheIPOAPrinciplesandtherebyencouraging
compliance.TheGlobalCompacthasnotsofarexplicitlydealtwithitsmembersresponsibilitiesin
thesecurityfield,eitherwhendirectlycarryingoutsecuritytasksorthroughindirectimpact.Seethe
GlobalCompactInternetsiteatURL<http://www.un.org/Depts/ptd/global.htm>.

48P R IVATE S EC UR ITY C OM P ANIES

andtheKimberleyCertificationProcess(dealingspecificallywithoneindustry,in
this case the international trade in rough diamonds).216  Regulating the private
securityindustrythroughthevoluntarycomplianceofstatesimplementingnational
legislationorregulationwouldcarrytheadditionaladvantageofincludingmore
actorsandtherebyincreasingtheprestigegainsassociatedwithcompliance.The
KimberleyProcessisparticularlyinstructiveinthatguidelinesweredrawnupafter
several international meetings where government officials worked together with
representativesfromtheindustryandNGOsandbecauseitissubjecttoperiodic
reviews,includingobserversfromavarietyofgroups. 217
Self-regulationcouldalsobecarriedoutbyinternationalclientsofPSCs,notably
MNCsandNGOs.Sofar,therehasonlybeenoneattemptatregulatingindustry
clients:aninitiativebytheUS,BritishandDutchgovernmentsforagreementona
setofprinciplestogoverntheuseofPSCsbyMNCsintheextractiveandenergy
sectorsunderthe2000VoluntaryPrinciplesforSecurityandHumanRights.218 The
VoluntaryPrinciplesreceivedhigh-levelendorsement,notonlyfromgovernments
butalsofromMNCsandNGOsengagedintheprocess,andaresignificantasa
firstattemptatregulationoftheindustrybytargetingasegmentofitsclients.219
PSCs were excluded from the process, however. The principles call for the
observanceofthe1990BasicPrinciplesontheUseofForceandFirearmsbyLaw
EnforcementOfficials; 220 consultationsonandthemonitoringofprivatesecurity
providers;andthehiringonlyofcompaniesthatdonotattempttoreplacestate
militaryandlawauthorities.221
However, the Voluntary Principles are weakened by the permissive language
usedtodefinethecircumstancesandconditionsforprivatesecurityusebyMNCs
andbyalackofmonitoringmechanisms.222TheeffectsoftheVoluntaryPrinciples
have not been chartered, and the conspicuous infrequency with which they are
mentionedintheliteratureonprivatesecurityregulationindicatesboththatthey
havesofarhadafeebleimpactandthegenerallycompartmentalizednatureofthe
216 FortheOECDGuidelinesseeURL<http://www.oecd.org/department/0,2688,en_2649_34889_
1_1_1_1_1,00.html. On the Kimberley Process see URL <http://www.kimberleyprocess.com:
8080/site/?name=home>.
217 Bone,A.,Conflictdiamonds:theDeBeersGroupandtheKimberleyProcess,edsBailesand
Frommelt(note34),pp.12939,explicitlyadvocateswideruseofthismethod.SeealsoLeBillion,
P.,Internationalinstrumentsofenforcement,GovernanceofNaturalResourcesRevenuesProject,
Paperno.5,UniversityofBritishColumbia(unpublished,n.d.),pp.3738.
218  Voluntary Principles on Security and Human Rights, Statement by the Governments of the
United States of America and the United Kingdom, 2000, URL <http://www.state.gov/www/
global/human_rights/001220_fsdrl_principles.html>.
219 Gagnon,G.,Macklin,A.andSimons,P.,DeconstructingEngagement:CorporateSelf-RegulationinConflictZones:ImplicationsforHumanRightsandCanadianPublicPolicy,Universityof
Toronto, Public Law Research Paper no. 04-07, Jan. 2003, p. 81, URL <http://papers.
ssrn.com/sol3/papers.cfm?abstract_id=557002>.
220 TheBasicPrinciples,adoptedbytheEighthUnitedNationsCongressonthePreventionof
CrimeandtheTreatmentofOffenders,Havana,Cuba,27Aug.7Sep.1990,areavailableatURL
<http://www.unhchr.ch/html/menu3/b/h_comp43.htm>.
221 Lilly(note199),p.13.SeealsoMaze,K.,Regulatingtheprivatesecurityindustry:zonesof
accountability,Unpublishedthesis,McGillUniversity,Montreal,Canada,2003,p.30.
222 Maze(note221).

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 49

debate. However, if sharpened, refined and picked up by a wider audience, the
VoluntaryPrincipleswouldprovideagoodmeansforaddressingtheuseofPSCs
byaspecificsegmentofusersmultinationalcorporations.BoththeNorwegian
Fafo Institute for Applied Social Science and the International Peace Academy
have suggested that the Voluntary Principles should be included as a standing
clauseincontractswithPSCs.223
Afinalvariantofself-regulationoftheprivatesecurityindustrywouldbethe
designofcodesforthehumanitarianaidsectorinthehiringofPSCsbyNGOs.
AlthoughtherehasbeenareluctanceonthepartofNGOsandthehumanitarianaid
communitytobeinvolvedintheissueofprivatesecurity,manyactorsarenow
wakinguptoit,andsomeofthestigmathathassurroundedthedebatehasworn
off. 224 Forexample,theICRChasindicatedthatitwantstoengagewiththeprivate
sector to ensure that acceptable humanitarian standards are met.225 International
Alert has suggested setting up an information-sharing database between
humanitarianaidagenciestoinformtheirchoiceofPSCsforprotection. 226  Two
networkforumsweresuggested:theUSInterActionSecurityWorkingGroup;and
theHumanitarianSecurityandProtectionNetwork(HSPN)hostedbyVOICEin
Europe. 227 Sofar,however,thereappearstohavebeenlittlepracticalprogress.
Costsandbenefitsofself-regulation
Thevariousmechanismsandbodiesthroughwhichself-regulationcouldbeconceivedshouldnotbeseenasmutuallyexclusive.Therewouldbevirtueinestablishing overlapping forms of regulation, targeting the proliferation of the internationalprivatesecurityindustryfromdifferentdirections:thebehaviourofPSCs
themselves;andthechoicesmadeandconditionsimposedbyinternational,nonstateandgovernmentalcustomersofsecurityservices.However,suchmechanisms
shouldbemutuallyreinforcingratherthanconflictingorduplicating,sothatdifferentregimescanworktowardsabroadinternationalconsensusontheuseandoperationofprivatesecurityactors.
Thereareclearupsidestoself-regulation,whethertargetedatPSCsdirectlyor
throughtheirclients.Underidealcircumstances,self-regulationwouldmeanthat
PSCsthatdonotconformtotheacceptedbehaviourwouldeventuallygooutof
businessandthatclientsofPSCswhohiredisreputablefirms,ininappropriatecircumstances, would be shunned internationally. Although self-regulation leaves
223 Spear(note50),p.54.
224 NGOshavebeenreluctanttoengagewiththisissueinasystematicwaybecausetheyshun

associationwiththeuseofweaponryingeneral,whichstrikesatthenormativedistinctiontheysee
betweenthemselvesandotheractors.Vauxetal.(note88),p.27.
225 InternationalCommitteeoftheRedCross(ICRC),TheICRCtoexpandcontactswithprivate
militaryandsecuritycompanies,Pressrelease,4Aug.2004.
226 Vauxetal.(note88),p19.
227 InternationalAlertandFeinsteinInternationalFamineCenter,TuftsUniversity,ThePoliticisationofHumanitarianActionandStaffSecurity:TheUseofPrivateSecurityCompaniesbyHumanitarianAgencies, International Workshop Summary Report (Tufts University: Boston, Mass., Apr.
2001),p.5,URL<http://www.international-alert.org/pdf/pubsec/Tuftrep.pdf>.

50P R IVATE S EC UR ITY C OM P ANIES

legal accountability aside, it may serve to increase the legitimacy of PSCs and
thereby serve to draw them into an emerging web of international governance
withinthesecuritysector.
However,focusingontheconductofNGOsandMNCsinthehiringofprivate
security actors or on PSCs themselves can arguably be seen as accepting the
growing marginalization of the state as the primary security actortaking for
grantedthatnon-stateactorsontheinternationalsceneshouldhavetoprovidetheir
ownsecurityinonewayoranother.Thereareinherentlimitstothisapproachand,
likeregulationunderUNauspices,itneedsbecomplementedbystateactionand
legislation.Furthermore,itplacesahighburdenofcostforregulationontheactors
themselves.Finally,thesamegeneralconcernapplieshereaswithmanyotherselfregulation schemes: that such instruments will become (or be perceived as) an
alternativetothedevelopmentofenforceable(legal)instruments.
Existingnationallegislation:modelsforreplication?
The reasons for addressing the issue of regulation of PSCs through national
legislationaretwofold.First,thisperspectiveaffirmsthecentralityofstateactors
within international security relations. If countries that are home to the largest
numberofPSCs,theUSAandotherWesternstates(efficientstates),takeresponsibility for the export of security services, this would go some way towards
ensuringtheaccountabilityofPSCoperationsalsoattheinternationallevel.As
indicated,PSCsareoftenperceivedasanextensionofastatesforeignpolicyeven
whennotoperatingundercontractwiththeirhomestate,anditisthereforeinthe
interest of the state to regulate firms operating from its territory.228  Second,
nationallegislationstandsthebestchanceofbeingenforced.
However,withfewexceptions,nationallawsignoretheexistenceoftheprivate
securityindustry.229  The USA and South Africa are two of the few countriesto
haveinplacenationallegislationontheindustry,andtheirmodelsthereforemerit
consideration.ThesetwocountriesareamongthebiggestproducersofPSCssoitis
perhapsnotsurprisingthattheyhavecomethefarthestinregulatingtheindustry.
TheUKinitiatedapolicydiscussionin2002withaGreenPaper230buthassofar
failedtofollowupwithlegislation.WhenitrecentlyemergedthataSwedishcompany,DynamicSolutions,wasrecruitingandtrainingformermilitarypersonnelfor
228 AclearexampleisthearmstoAfricaaffairin1997when,despiteaUNembargo,Sandline
InternationalwasfoundtohavesoldarmstotheSierraLeoneGovernment,reflectingbadlyonthe
BritishGovernment.ThenotionoftheuseofPSCsamountingtoforeignpolicybyproxyisdiscussedinSilverstein,K.,Privatizingwar:howaffairsofstatesareoutsourcedtocorporationsbeyond
public control, The Nation, 28 Aug. 1997, available at URL <http://www.
mtholyoke.edu/acad/intrel/silver.htm>;andWhyte,D.,Lethalregulation:state-corporatecrimeand
the United Kingdoms new mercenaries, Journal of Law and Society, vol. 30, no. 4 (2003),
pp.59091.
229 Singer(note16),p.524.Theissueofregulatingprivatesecurityandmilitaryserviceproviders
wasraisedrecentlyintheGermanBundestag,indicatingthatnewthoughtisbeginningtobegivento
theissueatthenationallevel.Krahmann,E.,Personalcommunicationwiththeauthor,25Nov.2004.
230 BritishFCO(note207).

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 51

USandotherPSCsoperatinginIraq,expertsdifferedonthelegalstatusofsuch
activity.231
TheUnitedStates
Under the US model, the key piece of legislation is based on the connection
between arms exports and the export of security and military services. The US
StateDepartmentissueslicencesforassistance(includingtraining)toforeignpersons,whetherintheUnitedStatesorabroad,intheuseofarmsunderthesame
exportguidelinesasfortheexportofarmaments.TheInternationalTrafficinArms
Regulations(ITAR)constitutethekeypieceoflegislationandrequiretheapplicationforlicencesbycompaniesprovidingknowledge,servicesorgoodswithinthe
militaryrealmwiththeDepartmentofStatesOfficeofDefenseTradeControls
(ODTC).232 Applicationsarethensubjecttoaninternalreviewinvolvingvarious
offices. Commentators generally agree that the ITAR licensing scheme is
inadequate or even idiosyncratic: contracts are administered by various departmentsandofficeswithoutproceduralconsistency. 233
Intermsofoversightandcontrol,onceacontractisgranted,theprovisionsof
USlegislation(whilefullerthanmost)aremeagre.TheUSGAOprovidessome
oversight of the awarding and implementation of PSC contracts, but this is
limited.234  Congress is notified of contracts valued at more than $50 million, a
thresholdgenerallyconsideredtoolowtoensuresufficientdemocraticaccountability.Contractsarefrequentlysplituporpartiallysubcontractedtoavoidcongressionaloversight.235
AnewformofregulationwasproposedbytheUSDODandpublishedintheUS
Federal Register in March 2004.236 It would give military commanders more
powerovercontractorsusedinconjunctionwithnationalforcedeployment.For
example,itwouldbanprivatepersonnelfromcarryingprivatelyownedweapons
unlessauthorizedbyamilitarycommander,anditwouldauthorizethecombatant
commandertoissueweaponsandammunitiontoPSCemployees.
Despiteitsomissions,theUSsystemoflicensingexportsofmilitaryandsecurity
servicesalongthesamelinesastheexportofgoodsprovidesarelevantmodelfor
nationallegislationelsewhere.Lessonsshouldbelearnedprimarilyfromtheproblems of ensuring oversight once a contract is granted and from the limits to
231 Letmark,P.,SvenskabeflvrvassomlivvakteriIrak[SwedishofficersrecruitedasbodyguardsinIraq],DagensNyheter,12Dec.2004.Inparticular,concernswereraisedaboutthepolitical
consequencesofapresenceofSwedishformermilitarypersonnelinIraq,giventhatSwedendidnot
jointheUS-ledcoalitioninthewar.
232 Maze(note221),p.24;Nossal(note199),p.467;andIsenberg(note103),p.40.ITARcanbe
foundontheODTCsInternetsiteatURL<http://www.pmdtc.org/reference.htm>.
233 Avant(note65).
234 E.g.,GeneralAccountingOffice(GAO),RebuildingIraq:FiscalYear2003ContractAward
ProceduresandManagementChallenges,GAO-04-605,URL<http://www.gao.gov/cgi-bin/getrpt?
gao-04-605>.
235 Isenberg(note101),p.11;andAvant(note65).
236  Contractors accompanying a force deployed, Federal Register, vol. 69, no. 56 (23 Mar.
2004),availableatURL<http://www.access.gpo.gov/su_docs/fedreg/a040323c.html>.

52P R IVATE S EC UR ITY C OM P ANIES

accountabilitywhenaforeignclientratherthanaUSgovernmentdepartmentcontractsaUSPSCdirectly.
SouthAfrica
InthewakeofthecontroversysurroundingtheoperationsofExecutiveOutcomes
in the mid-1990s, in May 1998 South Africa passed the Regulation of Foreign
MilitaryAssistance(FMA)Acttoclampdownonprivatesecurityactivity.237The
purpose of the act was twofold: to ban mercenary activity, defined as direct
participation as a combatant in armed conflict for private gain; and to regulate
militaryassistanceabroad.Takingawidesweepattheprivatesecurityindustry,
the FMA Act stipulates that any sort of military assistance (including advice,
training, personnel, logistics, finance, operations, recruitment, procurement of
equipmentandanyotheractionthathastheresultoffurtheringthemilitaryinterestsofapartytothearmedconflict)requirescompaniestoobtainpermissionfrom
theNationalConventionalArmsControlCommitteebeforeacceptingacontract. 238
Althoughthisrepresentsthestrictestexistingformofnationallegislationonprivatesecurityserviceexports,theSouthAfricanGovernmentiscurrentlyconsideringextendingtheFMAActtocoverallwar-zoneworkbyitsnationals.239 This
wouldineffectentailabanonexportsofprivatesecurityservicestowarzones.
However,therecordforenforcementoftheexistinglegislationisextremelypoor.
Anextensionofthiskindfacesproblemsbothwithregardtotheconstitutional
rightofSouthAfricanstofreelychoosetheirtrade,occupationorprofession,and
in terms of practical enforceability.240 Furthermore, most would agree that a
completebanonworkinwarzonesisundesirable.However,theSouthAfrican
discussionsonprivatesecurityregulationareinstructiveinthattheyrecognizethe
indivisibilityoftheprivatesecuritysectorandthefutilityofdrawingclearlines
between controversial and non-controversial services or between defensive
andoffensiveservices.241
Britishsuggestionsandotheroptionsfornationalcontrol
The UK does not currently have legislation that effectively covers the private
securityandmilitaryservicesector.Inrecognitionofthis,in2002theBritishGovernmentpublishedaGreenPaperoutliningtheoptionsforregulatingtheindustry.
Althoughgivingrisetosubstantialdebateatthetime,includingsubmissionsfrom

237 FortheactseeURL<http://www.up.ac.za/publications/gov-acts/1998/act15.pdf>.
238 Nossal(note197),p.466.
239  Reed, J., South Africa considers block on all war zone work under anti-mercenary law,

FinancialTimes,10Sep.2004.
240 Reed(note239).
241 Isenbergrecognizesthegreyzonebetweentheformalroleof,e.g.,privatebodyguardsinIraq
andtherealitiesofoperatinginadefactocombatzone.Isenberg(note101),p.48.

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 53

variousNGOs,industrymembersandtheForeignAffairsCommittee,theGreen
Paperhassofarnotledtoanychangesinexistingnationallegislation.242
TheGreenPapersuggestswaysinwhichregulationofBritishPSCscouldbe
addressed,includingamendingexistinglegislationbanningmilitaryactivityabroad
(andrecruitmentformilitaryactivityabroad),toincludetheactivitiesofcontemporaryPSCs. 243 Italsoconsidersself-regulationoftheindustry.BanningPSCsatthe
nationallevelisnotlikelytohaveanyrealeffectsincecompanieswouldsimply
shiftbasesandregisterabroad.Betweenthesetwoallornothingapproachesthe
GreenPapersetsoutthreedifferenttypesoflicensingschemesfortheexportof
privatesecurityservices.244 ThereappearstobeabroadconsensusintheBritish
debatethatsomeformoflicensingschemeisbestsuitedfornationallegislationfor
PSCs. 245
Oneoptionistheintroductionofalicensingregimefortheexportofmilitary
serviceswherebyactivitiesforwhichlicenceswererequiredwouldbedefinedin
legislationandcriteriafortheexportofserviceswouldbeestablishedalongthe
samelinesasforthoseforexportsofarms.246Thiswouldmeanasystemwithclose
affinitiestothelicensingregimeoperatingintheUSA.Asecondoptionoutlinedis
legislationrequiringBritishcompanieswhichwanttotakeupcontractsabroadto
registerandnotifythegovernmentofcontractsforwhichtheywerebidding.This
would mean a less intrusive intervention by the state in the functioning of the
industry:thegovernmentwouldonlyintervenetopreventBritishPSCsfromtaking
upcontractsthatruncountertoBritishinterestsorforeignpolicy.247 Athirdoption
suggestedintheGreenPaperforthelicensingofBritishPSCssuggestedthecreation of a general licence for companies themselves. Rather than considering
privatesecurityprovisiononthebasisofindividualcontracts,companieswould
applyforagenerallicencetoprovidealistofspecifiedactivitiesundersubsequent
contracts.Thisoptionisanalogoustotheabove-mentionedUSIDIQcontractsand
posesthesameprimafacieproblems.
OfthethreelicensingoptionssuggestedintheGreenPaper,thefirstislikelyto
haveboththegreatesteffectivenessandthewidestpurchase.Basingregulationon
the export of military and security services on models governing the export of
armamentscapitalizesonexistingmechanisms,understandingandexperience(e.g.,
regardinglikelyeffectsinthereceivingcountryorproblemsofend-userdefinition)
andallowsforcontract-by-contractassessment.Importantly,suchaschemewould
takeintoaccountthefactthattheimpactofprivatesecurityservicesvarieswiththe
contextinwhichitisused.AlthoughmanyoftheprovisionsgoverningtheBritish
GovernmentsguidelinesapplydirectlytoPSCservicelicensing(e.g.,relatingto
242 BritishFCO(note207).Therehave,however,beenadhocdecisions,e.g.,thedecisionbythe
BritishGovernmentinOct.2003tograntpermissionfortheexportofsub-machinegunsandpistols
fortheusebyprivatesecurityfirmsinIraq.Isenberg(note103),p.48.
243 SeeBritishFCO(note207),pp.2223.
244 BritishFCO(note207),pp.2426.
245 Kinsey(note200),p.13.
246 BritishFCO(note207),p.24.
247 BritishFCO(note207),p.25.

54P R IVATE S EC UR ITY C OM P ANIES

embargoeddestinationsandrespectforhumanrights),additionalconcernsabout
theparticularcircumstancesinwhichPSCoperationmightbeappropriatewould
alsohavetobeaddressed.
Alloftheaboveoptionsfacesignificantproblemsintermsofoversightandcontrol,inmuchthesamewayastheregulatorysystemsthatareinplaceintheUSA
andSouthAfrica.Thequestionofmonitoringwouldalsohavetobeaddressedat
thenationallevel,whichislikelytobebothcostlyandcumbersome. 248  The US
GAOisinauniquepositionintermsofitsavailableresources,buteventhisbody
haslimitedcapacitiesandtendstofocusonthelargestcontracts.
Nevertheless,adecisiontakenbytheBritishGovernmentontheissueoflegislationislikelytobeinfluentialasthefirstsystematicengagementwiththeissueon
thepartofaEuropeangovernment.Itcouldactasaprecedentfordeliberationsin
otherEuropeancountriesandintheinstitutionalcontextoftheEuropeanUnion
(see below). In an analogy to the linkage between export controls on arms and
controlsonsecurityandmilitaryservices,oneanalysthasalsoproposedthatexistinglawsonprivatepolicing(regulatingthedomesticuseofprivatesecuritycompanies) could be extended to cover the export of these same services.249  This
approachhasmeritinthatitalsodrawsonexistinglegislationandwouldbeparticularly informative when it comes to standards for the vetting and training of
staff.However,theissuesraisedbytheinternationaluseofPSCs,particularlyby
clientsotherthanthehomestate,areconsiderablymorecomplex:privatepolicing
lawsalonecouldonlyprovideaverythinbaselineforlegislationgoverningthe
conductandimpactofinternationalPSCsandtheirwiderangeofactivities.
Shortcomingsofnationallegislation
Legislationonprivatesecurityactivityatthenationallevelisundoubtedlythemost
effectiveandmosteasilyenforced,butitisinsufficienttoaddressprivatesecurity
activityforthreemainreasons:(a)becauseoftheabilityofPSCstoadaptinorder
tocircumventorevadelegislation;(b)becauseoftheproblemofextraterritorial
enforcement;and(c)becauseofthelackofadequatemechanismsforoversightof
companiesoperatingabroad.250 Thecompaniestransnationalnatureandoperations
meanthattheyareabletoshiftlocationtoastatewithlessornocontrolovertheir
activitieswith relative ease. Indeed, Sandline International was registered in
Bahamas,allowingthecompanytobenefitfromtaxadvantagesaswellastoevade
existingBritishlegislationandpublicscrutiny.

248 Krahmann,E.,Conversationwiththeauthor,25Nov.2004.
249 Krahmann,E.,Regulatingtheprivatesecuritysector:whatrolefortheEU?, Contemporary

SecurityPolicy,vol.26,no.1(forthcoming2005).TheestablishmentoftheSecurityIndustryAuthority(SIA)intheUKinApr.2003providesaninterestingcasestudyinthisrespect.TheSIAwasset
uptomanagethelicensingofthedomesticprivatesecurityindustryinEnglandandWalesandto
promoteprofessionalismandspreadbestpracticeintheindustry.SeetheSIAInternetsiteatURL
<http://www.the-sia.gov.uk>.
250 Singer(note16),pp.53536.

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 55

Furthermore,aninherentproblemwithregulatingtheindustryfromanexporters
perspectiveisthedifficultyofensuringthatsufficientaccountistakenoftheeffect
oftheservicesontherecipientorhoststate.Thiswillrequireintimateknowledge
of,andsensitivityto,localconditions.Asanecessary,butnotonitsownsufficient,
measure,nationallegislationneedstobecomplementedbyothermeasures,suchas
self-regulation along the lines described above. Another way of addressing the
inherently limited reach of national legislation is through the harmonization of
nationallawsattheregionallevel,effectivelycreatingaprivatesecurityregime
fornationsthatshareasinglemarketforthedevelopmentofprivatesectoractivity
in general or have common policies and activity plans in the field of external
security.
Regulationattheregionallevel
Short of a global enforceable regime covering the activities of private security
companies,regulationbyandthroughregionalorganizationscanofferwiderscope
andpurchasethanregulationatthenationallevelalone.Tworegionalorganizationsstandoutinthisrespect:theAfricanUnionandtheEuropeanUnion.
TheAUcouldprovideausefulframeworkforrespondingtothedevelopmentof
theinternationalprivatesecurityindustryforanumberofreasons.First,thesheer
extent of PSC activity in Africa makes the issue impossible to ignore. Second,
muchPSCdeploymentinAfricatakesplaceundercontractswithexternalactors
suchasforeigngovernmentsorMNCs.TheAUneedstoworkinthiscontextto
safeguardtheinterestsoftheweakstateinthefaceofPSCproliferation.Thisis
especially important given the extensive use of PSCs within the framework of
securitysectorreform,anaimwhichisendorsedbytheAU.Third,forthesame
reasonsasindicatedwithrespecttoPSCuseinsupportofUNpeaceoperations,the
AUneedstoreviewitsownuseofPSCswhenorganizingpeacemissions.
TheAUcurrentlyhasalimitedinstitutionalcapacitytoaddresstheuseofPSCs.
However,afirststepwouldbetoworkwiththeinternationalcommunityindrawingupminimumstandardsforPSCstobeconsideredforcontractswiththeAU
itselfandpossiblywithsub-regionalactorstowhichitdelegatestasks(alongthe
linesdescribedabove.DeliberationswithintheAUwouldprovidethenecessary
weakstateperspectiveand,eventhoughsuchregulatorymechanismswouldnot
carrylegalforce,theywouldbeendowedwithadditionallegitimacyifapprovedby
African states or sub-regional groups. The Peer Review Mechanism established
undertheNewPartnershipforAfricasDevelopment(NEPAD)isanotherforumin
whichtheuseofPSCsonthecontinentshouldbediscussed.251AlthoughthePeer
ReviewMechanismisvoluntary,largelyuntriedandnotlikelytobecomeparticularlyeffectiveintheimmediatefuture,itcouldprovideasuitableforumfortheairingofexperiencesandconcernsandlaythegroundworkforfurtherinternational
debate.
251 Williams(note61).

56P R IVATE S EC UR ITY C OM P ANIES

Bycomparisonwithotherregionalbodies,theEuropeanUnion(EU)hasavery
stronginstitutionalcapacity.Forthisreason,besidesthepresenceoftheUKand
otherlesserEuropeanPSCproviderswithintheEUsmembership,addressingthe
questionofPSCregulationinanEUcontextprovidesaninterestingavenue.252 The
EUsuniqueintegrativemodelmakestheregulationofitsmemberseconomies
andgovernancesystems,notexcludingprivatesectorelements,apartofitscore
competence. EU enlargement and the increasing emphasis placed on the EUs
externalpolicyandcrisis-managementoperations,interaliaindirectsupportofthe
UNandinpartnershipwithotherregionalgroups,indicatethattheEUhasbothan
incentive and imperative to address the issue. If the EU could successfully
implementaregulatoryschemeforPSCservicesemanatingfromitsterritory,this
wouldaddressalargeportionoftheinternationalprivatesecurityindustrythatis
currentlynotcoveredundereithernationalorinternationallegislation,aswellas
settingausefulprecedentforregulationofPSCactivityelsewhere.
Althoughthetradeinsecurity-relatedservicesisnotexplicitlymentionedinthe
1957TreatyEstablishingtheEuropeanCommunity(ECTreaty),thereareseveral
ways in which the EU could address the question.253  First, following from the
discussionofnationallegislation,theEUcouldaddressPSCactivityintermsof
exportcontrols.Expandingthe1998EuropeanUnionCodeofConductonArms
Exportstoincludetheexportofsecurityandmilitaryservicesisalogicalextension
of the discussion of national legislation (and is indeed mentioned in the British
GreenPaper).254  The control over arms brokering indicates that the EU already
regulatesserviceswhichoverlapwiththoseofferedbyPSCs.255 Theexportofdualuse goods (goods that have both civilian and military use) is also regulated to
ensure that civilian trade does not undermine the security interests of member
states;thereisnoreasonwhythisthinkingshouldnotbeextendedtoconsiderthe
export of privatesecurityservices.256 Second, PSC activities could be regulated
separatelyundertheCommonForeignandSecurityPolicy(CFSP),throughJoint
Actions,CommonPositionsorDecisions,althoughsuchregulationwouldbead
252 ForthesepointstheauthorisindebtedtoKrahmann(note249).However,theEUframework
hasbeenalludedtobyafewothercommentators,e.g.,Lilly(note17).FortheapplicationoftheEUs
multi-level and multi-sector competence to another new challenge, transnational terrorism, see
Burgess,N.andSpence,D.,TheEuropeanUnion:newthreatsandtheproblemofcoherence,eds
BailesandFrommelt(note34),pp.84102.
253 BritishFCO(note207),p.27.Article296oftheECTreatyallowsmemberstotakemeasures
necessaryfortheproductionofessentialinterestsofitssecuritybutrefersonlytotheproductionof
andtradeinarms,munitionsandwarmaterial;servicesarenotincluded.
254 ForadiscussionofrecentdevelopmentsintheEUCodeofConductandforthetextofthe
documentseeBauer,S.andBromley,M.,TheEuropeanUnionCodeofConductonArmsExports:
Improving the Annual Report, SIPRI Policy Paper no. 8 (SIPRI: Stockholm, Nov. 2004), URL
<http://editors.sipri.se/recpubs.html>.
255 ForadiscussionofEUcontrolsonarmsbrokeringseeAnthony,I.andBauer,S.,Transfer
controlsanddestructionprogrammes,SIPRIYearbook2004(note61),pp.73762;foradetaileddiscussionofthepossibilitiesforstrengtheningtheCodeseeSaferworld,TakingControl:TheCasefora
MoreEffectiveEuropeanUnionCodeofConductonArmsExports(Saferworld:London,Sep.2004).
256  Council Regulation (EC) no. 1334/2000 setting up a Community regime for the control of
exportsofdual-useitemsandtechnology,22June2000,OfficialJournaloftheEuropeanCommunities,L159/1(30June2000),URL<http://trade-info.cec.eu.int/doclib/html/111418.htm>.

INTER NATIONAL ,  R EGIONAL ,  NATIONAL R ES P ONS ES 57

hoc,temporaryandcountry-specific.257Third,theEUcouldaddresstheissueof
PSCs through the harmonization of national laws on privatepolicing,regulated
undertheInternalMarket.258
Furthermore,asarguedwithregardtotheUNandtheAU,theEUneedstobe
clearaboutthecircumstancesandconditionsunderwhichitmightconsidercontracting private security services, and it needs to ensure that this is done to the
highest standards of accountability, transparency, respect for human rights and
generalmindfulnessofthedelicatenatureofinternationalsecurityrelations.There
arelikelytobeseveralsituationsinwhichtheEUmightconsidertheuseofPSCs:
insupportofcrisismanagementorotherEuropeanSecurityandDefencePolicy
(ESDP)operations(wheretheissuewillariseevenifsubstantialuseistobemade
of PSCs by individual contributing nations) in the context of the delivery of
humanitarianaidininsecureareasandfortheprotectionofdiplomaticrepresentativesanddelegationsabroad.Indeed,theEUhascontractedPSCsforcloseprotectionandbodyguardservices,forexample,forofficialsservingundertheEUPolice
Mission in Bosnia and Herzegovina (EUPM).259  Finally, any prospects for EU
legislationorextensionoftheEUCodeofConductonArmsExportsshouldbe
cross-referencedwiththemeasuresforcontrolusedintheUSA,asasteptowards
theestablishmentofaninternationalconsensusontheuseofPSCs.Moreover,they
should be discussed with the AU in the context of EU support for local
peacekeepingandsecurity-buildingprocessesinAfricaaswellaswiththeEUs
othernationalandregionalCFSPdialogueprocessesasappropriate.
TheprospectsforregulatingPSCactivitieswithintheEUframeworkhavesofar
receivedinsufficientattention.Thisshouldberedressed:theformidablecapacityof
theEuropeanUnionaswellasitsroleasaninternationalnormpromotermakesit
wellplacedtoinstigatethecreationofamodelregional,best-practiceregime.The
regulationofPSCswithinanEUframeworkcouldbeseentounderlinetheneed
for dialogue and coordination between the EU Justice and Home Affairs (JHA)
DepartmentandtheCFSPmoregenerally.

257 Krahmann(note256),pp.1416.SeealsoAnthony,I.,EuropeanUnionapproachestoarms
control,non-proliferationanddisarmament, SIPRIYearbook2001:Armaments,Disarmamentand
InternationalSecurity(OxfordUniversityPress:Oxford,2001),pp.599614,onmechanismsofEU
decisionmaking.
258 Krahmann(note249),pp.1314.
259  Officials of the Secretariat of the Council of the European Union, Conversations with the
author,Nov.2004.

6.Conclusions:thelimitsofregulation
The starting point of this Policy Paper is a recognition of the existence of the
industryandtheimplausibilityofdoingawaywithit.Fromthispremise,itcallsfor
morecoherentanddirectedthinkingontheissueandsetsoutoptionsforregulation
asthepragmaticnextstep.
Substantive issues are raised by the use of private security actors that simply
cannotbeaddressedthroughregulation.Eveniftheprocessesbywhichcompanies
arehiredwereformalized(e.g.,inopenandcleartenderingprocesses)andifit
were possible to regulate who hires them to operate and where, and how firms
delivertheirservices(withadequatevettingofpersonnel,humanrightsstandards
and punishment for individual wrongdoers), there still remain significant losses
whenaprivatecompanyperformsservicesinthissensitiveareaofpolicy.These
lossesareforthemostpartintangiblelossofknowledgeoflocalconditionsby
the primary donor and of personal relationships between donor and recipient
(especiallyincasesofforeignmilitarytraining);lossofvisibleauthorityandprestige;and,aboveall,aweakeningoflong-termcommitmentandsustainabilityof
securityandmilitaryrelationships.Long-standingrelationshipsbetweendonorand
recipient states need to be political as well as personal, and they can never be
replaced by an anonymous private actor or be reduced to questions of
management.Privatesecuritycompaniescanonlycontributetothefurtheringof
suchrelationshipsiftheyarebroughtintosuchcloseandformalrelationshipwith
governments as to effectively make them quasi-governmental bodies. This is
unlikely to occur on any significant scale as it would compromise the independenceandflexibilityofthecompanies,andtheverypointofusingtheprivate
sectorwouldbelost.
Theseproblemsareendemictoanystyleofactionbyprivateratherthanpublic
actorsinthesecuritysphereandjeopardizecontroloverthepoliticaldimensionin
securityrelations.Asarguedinthisstudy,short-termgainsfromtheuseofPSCs
needtobebalancedagainstpossiblelong-termlossesateveryinstanceofoutsourcing.Theprobleminthisrespectisthatisolateddecisionsaretakenwithoutawide
perspectiveonthecumulativeeffectsofprivatizingsecurity.
Theefficientstateshaveaparticularresponsibilitytoshoulderandshouldtake
theleadindiscussionsaboutthelong-termchangestotheinternationalsystemand
internationalsecurityrelations.NorthAmericanandEuropeanstatescanaffordto
choosewhetherornottooutsource,whethertoaidSSRprojectsinweakerstates
andwhethertosustaineffortstocreatesecureenvironments(e.g.,inAfghanistan
andIraq)aftermilitaryinterventions.260 Iftheytaketheirresponsibilityseriouslyin
theserespects,thehiringofPSCsneednotbeseenasdictatedbynecessity.

260 OHanlon,M.E.andSinger,P.W.,InAfghanistan,ajobhalfdone,BostonGlobe,15Sep.
2002,availableatURL<http://www.brookings.edu/views/op-ed/ohanlon/20020915.htm>.

C ONC LUS IONS 59

Fortheweakstate,theriskthatprivatizationwillleadtoadisenfranchisingof
the state remains. Every effort must be made to encourage the establishment of
functioning and democratic state security institutions in the first place. Only by
escapingfromtheshort-termtyrannyofthemarketcanweakandstrongstates
alike harness the burgeoning international security industry with the aim of
counteringthreatsandpromotingequitablesecuritygovernance.

Abouttheauthor
CarolineHolmqvist(Sweden)isaResearchAssistantintheSIPRIArmedConflict and Conflict Management Programme. She holds degrees in International
RelationsfromtheLondonSchoolofEconomicsandPoliticalScience(LSE)and
haspreviouslyheldaninternshipwiththeRiskandSecurityProgrammeattheForeignPolicyCentre,London.Sheisacontributortothechapteronarmedconflicts
in SIPRI Yearbook 2005: Armaments, Disarmament and International Security
(forthcoming 2005). Her research interests include questions of international
governanceandthedynamicsofconflict.

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