POLICY DOSSIER

Summer 2007

by Andy Bearpark

PSCs are the controversial “private armies” that play a growing role in Iraq and Afghanistan. Andy Bearpark discusses their origins and their future

The “outsourcing of war” to private contractors is often pointed to as one of the most striking features of armed conflict in the 21st century, yet there is little understanding of the operations that these private security companies (PSCs) conduct. They have become major players in Afghanistan and Iraq, and in high risk environments ranging from Nigeria to parts of Latin America.

The private security industry now offers services that defy any single label. National industries differ in terms of services and in terms of cultural characteristics. Of course, they largely reflect the military culture of the armed forces from which they usually recruit, and also their respective governments’ policies on the legal status of PSCs. In the United States, for instance, they are happy to label themselves Private Military Companies (PMCs) because their main client is the US government and they provide services that were previously the prerogative of the armed forces. Outsourcing to PSCs has been happening on an unprecedented scale in the US, and is likely to continue.

In Europe, the private security industry is far less developed, and the only country that exports armed security services on a noteworthy scale is the UK. The UK industry is worth €1.5bn and there are currently about 25 serious players offering specialised services. Internationally, the sector divides into roughly four broad areas, with some companies trying to cover them all and others looking for niche markets.

First, PSCs offer security and risk management services for other private businesses. In the UK, PSCs get 90% of their contracts from other businesses as they sell security and risk management services to companies running operations or planning investments in unstable environments. This rarely involves the use of armed force.

Second, PSCs take over tasks that have been outsourced from national militaries, such as technical support and maintenance, military advice and training and personal and site security. The majority of European states are still highly cautious about major outsourcing, but many governments outside Europe are keen to hire professional private services to boost their armed forces or improve cost effectiveness in military spending.

Third, PSCs support post-war reconstruction and stabilisation efforts, such as in Iraq and Afghanistan. Non-military actors like humanitarian aid agencies, international organisations and NGOs increasingly seek the advice and services of PSCs to make their operations safer for their staff on the ground.

Fourth, PSCs are trying to open up business opportunities by moving into new fields like state-building, security sector reform (SSR), decommissioning, disarmament and reintegration (DDR) in support of humanitarian and disaster relief and development aid. They are particularly involved in infrastructure redevelopment, which includes logistics, communications and energy services.

The emergence of the last two areas as growth markets has to do with many factors, the most important being – unsurprisingly – the instability following the 2003 invasion of Iraq.

For almost 20 years, armed forces in Europe and elsewhere have been progressively downsized as governments sought to benefit from the post-Cold War “peace dividend”. But even in the 1990s it became clear that this thinking was a serious miscalculation, for it was a decade when military and humanitarian interventions revealed capability shortcomings when western armed forces were deployed in conflict zones. PSCs seemed to offer a convenient stop-gap to overcome temporary overstretch of the military, not least because governments’ downsizing efforts had left a vast pool of specialised personnel that could be employed.

PSCs first emerged in the UK back in the 1970s, when former British Special Forces personnel started to offer professional protection, military training and risk advisory services. But it was only when they started to operate in post-invasion Iraq that they entered public consciousness. Iraq has frequently been described as a “big cash machine” for unaccountable western PSCs operating in a lawless environment and wielding force without control. For a minority of PSCs, most of which have now discontinued their operations, this portrayal was very close to the truth, and unfortunately reputable companies are still suffering the consequences of their competitors’ corrupt or criminal behaviour.

It has therefore become one of their key concerns to demand an appropriate regulatory framework for their activities in overseas territories, not least to prove their own legitimacy and respectability.

The introduction of regulation must primarily be the task of national governments. They are the most credible actors to ensure that regulation is comprehensive, compatible with regulatory frameworks in other countries, and most important of all, that it is enforceable. But many governments on whose territories PSCs are registered or operating have so far been unwilling or unable to regulate appropriately. At present, very few countries have any regulatory schemes at all, and the existing ones − notably in South Africa and the United States − may need further amendment as the international environment changes and the industry develops. There is therefore hardly any best practice to follow, not least because both nationally and internationally the industry is still in the process of diversifying and also consolidating.

The UK government produced a Green Paper on the regulation of PSCs in 2002, but no action has followed since. In the absence of government regulation, the development, implementation, and enforcement of any standards is left to the industry itself. Industry self-regulation is being pursued by the British Association of Private Security Companies (BAPSC), which was launched a year ago to represent the UK industry. The association is the main interlocutor for the Ministry of Defence and the Foreign and Commonwealth Office and for civil society actors with an interest in regulatory issues. Its main concern is to control the delivery of services that imply the use of armed force. Although the Rules for the Use of Force (RUF) for a specific contract may give precise guidelines for the use of firearms in, say, Afghanistan and Iraq, they are not law. A wide range of issues needs to be regulated on a broader basis as standards for PSC operators’ qualifications are fundamental. Contractors need operational training, of course, but they also have to be given thorough instruction regarding their rights and duties under international humanitarian law (IHL). They are in any case as accountable as professional soldiers are who are subject to the chain of command and military jurisdiction.

Standards in a transnational industry like the PSCs will only be effective through an international dimension. The International Committee of the Red Cross (ICRC) and the Swiss Government have launched an initiative to promote respect for IHL and human rights law, and governments and PSCs are now working on voluntary standards. Their initiative shows that both the opportunities and risks of the emerging PSC industry are being taken seriously by policymakers. The reality is that states, as the major beneficiaries of privatised security services, carry the main responsibility to control and regulate PSCs, but have so far met this responsibility poorly at best.