So far, I’ve made $634 just by doing surveys

Does anyone still question the fact that private security companies offer services that are in high demand? If so, a quick conversation with Abdinur Ahmed Darman, a Somali warlord, would clear the doubts! Darman, who presents himself as Somalia’s president, has decided to solve his security problems by contracting Asgaard Security Group, a German private company. Asgaard’s employees are, like most employees of the industry, former Bundeswehr special forces and elite police units and will be using their skills to protect and maybe train Darman’s forces, actively aiding him in his quest to challenge the UN-backed transitional government.

Without over-stretching the analysis, Asgaard will be basically operating against Germany’s national interest. However, the company’s actions are not bad in themselves. It is obviously that Darman is a stakeholder in Somalia and if Asgaard will provide more legitimacy to his claims, who can really argue that that is bad? However, as AQ has allied with Islamist Groups in Somalia, and has repeatedly asked Germany to leave Afghanistan, Asgaard activities in Somalia can impact German nation-wide security policies.

It is beyond the purpose of this blog entry to decide whether the company will be aiding or prolonging the conflict in Somalia. What is to be taken out of this incident is the fact that one, private security companies are here and they’re here to stay and two,  private security companies have to be included in the international law body so to provide clear expectations from these companies and the choices they make on whom to offer their services.

Considered an American-exclusive problem, private security companies have been largely ignored across the Atlantic. With the overwhelming exception of the Brits, other nations failed to even properly tackle the issues these companies bring about, despite the fact that a lot of such companies are headquartered in France, Spain, Italy and Germany. So far, the actions of poster-child Xe Services, former Blackwater, and the incidents it was involved in, have caused outrage in the old continent, with German newspapers criticizing at great length the Bush Administration for the general policy towards such companies.  Nevertheless, Xe/Blackwater was accussed of too much involvement with the US Government, not that it was operating against the interests of the American people. Doug Brooks of IPOA, the US trade association of the private security industry,  has repeatedly highlighted the fact that these companies and their employees are Americans working and representing US interests abroad.  Andrew Bearpark and The British Association of Private Security Companies have gone to a great length to promote transparent relations with the UK government and the profesionalization of the industry.  Even though  a signer of the Montreux Document, Germany and other European countries need to address the issue in a manner that not only offers guidelines, but determines the obligations, responsibilities and compliance rules for their private security companies . So Europeans, we have to quit claiming the moral high-ground and this fashionable anti- privatization attitude, as it is not matched by the reality. Private security companies have found a niche in the market and no, they are not mercenaries, but legitimate structures and governments worldwide have the responsibility to ensure the proper legal status. Ideally, the status of private security companies should be adressed at an international level, EU or NATO. Though an EU-level agreement is not likely, clear national legislation and especially supervising bodies are mandaory at least for all transatlantic NATO partners.

Lastly, rather than starting to throw fire at the German company in a Scahill style, I would just like to ask how their actions are worse than The Red Cross training the Talibans in first aid? As if the Talibans were not imune enough to the attrition strategy! But then again, the ICRC has to somehow maintain its image of independence. The bottom line is that non-state groups, private companies and NGOs alike, both interfere in the conduct of a conflict. Their behaviour has strategic and tactical consequences for all parties involved, especially as in “the war amongst the people”, it is very difficult to distinguish who are the regular forces, the contractors and the humanitarians.

The first months of 2010 proved extremely complicated for Raytheon’s PR staff, following it’s association and the subsequent  incidents with Xe’s Paravant. Though stirring up controversies in not a new thing for Xe, as it has become the poster child  for everything that’s wrong with the industry, the situation proved a little less easy for Raytheon, who found itself in the mist of an all-out PR nightmare.

What happened?

Raytheon Technical Services, Raytheon’s training Unit, has a large US Army program in Afghanistan, called Warfighter FOCUS (Field Operations Customer Support)  to consolidate operations for the Army’s live, virtual , and constructive training systems. The contract, valued at over $11 billion is overseen by the Army’s Program Executive Office for Simulation, Training and Instrumentation (PEO – STRI) and spans over a 10-year period.

Raytheon has an extensive training business, however it lacks the specialists for the job and in 2008, it hired Paravant for about $25 million to provide weapons training for the Afghan Army. Paravant is a subsidiary of Blackwater that apparently was created for the sole purpose of this contract. While testifying before the Senate Armed Services Committee in February, Fred Roitz, an executive VP at Xe suggested that Raytheon wanted to do business with Blackwater, as long as it did not appear that is was actually doing business with the controversial firm. Roitz said that “the request for a company other than Blackwater came from Raytheon.” Here is a short chronology of the most notable events marking this contract:

September 2008

The controversial incident involved more than 200 assault rifles guns being signed out to a Paravant employee under the now-famous South-PArk character, Eric Cartman. The weapons, taken from a U.S. weapons facility near Kabul called Bunker 22, were meant for the Afghan National Police. Apparently, these guns were used by Paravant employees for both the Raytheon contract and a Lockheed Martin contract.  What can you say, Paravant/Xe was an efficient company, with a really good sense of humor. This would be really funny, if it wouldn’t be sad…

December 9th 2008

A Paravant Trainer accidentally shoot another one in the head during a practice session of firing assault rifles from moving vehicles. The injured victim was flown to Germany and is partially paralyzed. Paravant reported this incident with Raytheon in the same time and Raytheon filed a report using PEO-STRI system.  The Army never investigated it, and the incident was brought into questioning at the beginning of 2010 by the Senate Committee.

May 5th 2009

This was the incident that sparked the whole crisis, when two Paravant employees killed two Afghan civilians and injured a third. The Paravant employees said they felt threated by a vehicle moving towards them and opened fire. Amidst the layers of this story, we find entangled allegations of improper vetting, alcohol and drug abuse. The incident prompted an investigation led by Sen Carl Levin (D., Mich.), whose report concluded that Paravant employees carried unauthorized weapons and engaged in reckless behavior.

Implications for Xe and Raytheon

Notorious for its dubious businesses, Xe didn’t lose much in the whole affair, except for tarnishing its newly-acquired name. As shown with Paravant, I’m sure that the company has more logos and names in reserve, to put on the table for the next contract. In addition, the heat of the battle in unfairly taken only by the company. For example, the PEO STRI contracting officer overseeing Paravant’s work, Steven Ogaryensek, and the head of its contracting office, James Blake, testified that they did not know that Paravant was linked to Blackwater. Excuse me, they shared the same address and the same bank account!! Let’s be serious, what kind of oversight is that, when all they had to do was look at the address!

In terms of vetting its personnel, could Xe had done a better job? Following the May shootings, Raytheon sent a show notice to Paravant for failing to control, oversee their personnel, to which Paravant replied that if Rayhtheon wanted Paravant to control its personnel at all times, Paravant had to submit new claims for expenses to justify the new measures. In a way, they do make a point. The incident happened during night-time and the contractors were off-duty. What is not justified is them having unauthorized weapons. Common sense tells us that when you send men in a territory such as Afghanistan, they should be able to have weapons to protect themselves. The line is not ment to justify poor management on behalf of Paravant, but the situation is not as cut-clear as the media portrays it.

The consequences for Raytheon are substantial. The company let itself be dragged and associated with excessive use of force incidents. The claim that Paravant was not used to hide the fact that Raytheon was doing business with Xe is shady and lacks  solid grounds. Moreover, the “no comment” approach Raytheon has undertaken leaves room for serious questioning in regards to how it conducts its businesses. A defense contractor, providing mainly back-office system support, Raytheon has crossed an extra mile and landed in the heat of the fire. Inadequate preparations and the lack of PR crisis management planning has led to the improper handling of such situation. I mean, gee one would think that when you’re setting out to do business with Xe in Afghanistan, you’d be more prepared to handle the limelight and the negative publicity.

Raytheon has just named David Jensen as vice president of communications for its Intelligence and Information System (IIS) business, whose main responsibility will be leading internal and external communication programs in support of IIS’s growth strategy. A lot of programs under IIS, such as the National Polar-orbiting Operational Environmental Satellite Systems(NPOESS) and the Advanced weather Interactive Processing Systems, are open to positioning Raytheon as a leader in environmental solutions, but before building a brand image focused on environmental-stewardship, Mr. Jensen should make sure he coordinates with the other divisions in the company. Environment and guns don’t precisely go hand in hand.

Conclusion

The whole incident has cast a doubt on defense contractor’s ability to take responsibility for the contracts they are bidding on. As the main contractor, Raytheon was directly responsible for Paravant’s work in Afghanistan and it should have had the necessary mechanisms to ensure oversight and control. The worrying thing is that if Raytheon, who has so far maintained a pretty high standard of professionalism, doesn’t get things right, then who will?

This was a busy week for the private security industry. With the new legislation that Rep Jan Schakowsky (D-Ill.) and Sen. Bernie Sanders (I-Vt.)  introduced, private security contractors would be phased out from war zones.

The Stop Outsourcing Security Act is intended to restore the military as the main provider of training services, weapon repairing, service maintenance, and intelligence gathering.  The act also demands more congressional oversight for contracts exceeding $5 million, while in the same time asking contractors to disclose their costs and make public any disciplinary action against their employees. The reasons invoked for the need of such legislation include the usual complaints against contractors in conflict and post-conflict environments: their excessive use of force that strains relationship with local governments, their lack of accountability, their high-pays and low returns and so forth.

What is behind this legislation? Two things mostly, I would say: the economic crisis and political demagogy. About 17% (real number) of unemployment is lurking  in the mind of each US politician. This is the main concern on his priority list. And when he tries to look for job opportunities, the military seems like the perfect place. Big  projects/toys, that employ American citizens and make the US army look good on paper…that’s what every politician wants to see. They don’t want to see these jobs outsourced to private companies, engaging in “smaller”, “softer” things.

What’s worse is that the QDR has no mentioning of irregular warfare and the threats that the US military forces are actually facing. It is preposterous to not learn and acknowledge how war is fought in Afghanistan after you’ve been engaged in it for 9 years. Politicians though like big, tough, scary numbers that will put the US military above any other in the world! How many tanks does Russia have? We have more! How many ships  does China have? We’re way ahead! I don’t care what they say about the “yellow fever” or “Chinese miracle”, in a conventional warfare, no other military force has a stance against the US war machine. Unfortunately, conventional warfare is not what the US in engaged in. The war fought in Afghanistan is a war you fight with contractors, unless that is you want to make it another Vietnam. When a contractor is injured or dies in battle, who cares? Sometimes, it is YouTube-material (remember Fallujah), but most of the times, it passes unnoticed. Try the same thing with a 20-year old Marine! The commender who sent him in combat would get sacked, the political leadership will get sacked…

To all the Sanders, and Schakowskys out there: Afghanistan is not a war of regular military forces! It’s a long-term engagement, a war of contractors, logistics and patience. Your legislation is politically radioactive and it will not and should not pass!

Which brings me to the second point, of political demagogy. From the title of your legislation, to the grossly avoidance of any benefit that contractors bring to a combat zone, both of you indulge in building on the taxpayer’s legitimate frustrations with the state of the economy and on the extensive media coverage of contractor wrongdoings in order to build up your popularity.  And you are not the only ones. Back from Afghanistan, where she was escorted by Xe Services (former Blackwater), U.S. Sen Claire McCaskill took a hard stance at the company, complaining about the double standard in the combat zone, one for contractors, and the other for regular military forces. Gee, Senator, first of all I’m glad you came back safe!  And Gee, Senator I’m glad this occurred to you just now. Cuz the US military was never associated with engaging in criminal activities, and when it was, the chain of culpability was always disclosed!

Politicians appear very righteous when they criticize what is really easy to criticize.  The fact that they’re not doing the US taxpayer’s a real service is a different story.

Last week, I started a series entitled Critical Thinking, as a response to a general proliferation of buzzwords in reference to private security companies(PSC): mercenaries, (lack of) accountability, oversight, incentives, cost-effectiveness, vetting procedures, contracting issues  and many others.

Today’s post discusses the financial value that contractors bring to a conflict or post-conflict environment.  Because of the financial strains for any organization – be it a nation-state, international organization, business firm, news agency, NGO and so forth- to develop internal security capabilities on a long term-basis, money-wise it may make more sense to seek options in the private market. Thus, cost-effectiveness is one of the big-cards the industry is relying on. However, as more contractors have been involved in scandals regarding overcharging practices, bribery and bid rigging, this cost-effectiveness claim has been disputed by many. There are several reports trying to asses the validity of the claim and depending on who is writing it, the results vary.  It seems common sense that when a news agency goes in a conflict area, it is cheaper to hire a private security company for protection and later write an article on how bad the industry is  rather than start training security officers yourself.

The “Let’s” section

Honestly,  let’s cut them some slack. Any company that operates under similar contracts has incentive to cheat. This problem is inherent to the business sector since the beginning of trade. Just because they are PSCs, it doesn’t mean that the problem is in any way less or worse of a problem. But in the business world, this risk is mitigated by proper oversight and right drafting of contracts. So who is it then actually to be blamed for, the contractor or the beneficiary?

Let’s go on even further with our critical thinking. Is this the proper question we have to ask ourselves? Is cost the ultimate concern when operating in such a touch, challenging area? I say it is not. I say that value is the ultimate concern. Value is a function of cost, availability, quality and speediness.  The easy deployment of private security companies (PSCs), the high  professionalism  of their employees (MPRI is boasting that it has more Generals per square meter than the Pentagon), the updated technologies and services they can provide, make the matter of cost almost irrelevant. Not to mention, the value added by their low political cost.

Let’s look at some additional variables, like insurance premiums that PSCs pay. What do you think happens when PSCs encounter more and more casualties? Their premiums go up, decreasing their expected rate of return and lowering their profits. Let’s go even deeper…what do you think happens when for example, PSC’s employees don’t benefit from immunity from the laws of the host country? Yes, insurance premiums go so high, that the PSC has two options only: either doesn’t bid for a contract, or it charges more. Who ends up paying the bill? The tax-payer!

Let’s also talk  about risk mitigation in conflict-affected areas. Now, it is almost a cliche to say that investments in post-conflict environments are mandatory for reconstruction. But how do you attract FDI? Here is a little finance lesson about companies and the way they decide which projects to undertake. When capital budgeting, companies care about two things: the expected future cash-flows from the project, and the cost of capital to finance that project. The cost of capital is a function of different variables, one of which is risk. The presence and availability of services that PSCs provide significantly decrease business risk, making projects much more attractive to investors and increasing the opportunities for attracting the much needed capital. Furthermore, by partnering with the private sector, public risk insurance mechanisms like OPIC and MIGA, can help spread out this risk even further.

And lastly, next time we do a project on the cost-effectiveness of contractors, let’s add these variables in.

2 teams: War-Poverty and Security-Development

There is little doubt today that war and poverty are special friends, bound by an inextricable link. Two thirds of the world’s bottom billion are home to two thirds of the world’s armed conflict. Collier, and other World Bank scholars have done a more than sufficient job in proving this.

Thus, security and development have to go hand in hand as well. The holy trinity I am referring to are the private, the public, and the non-profit sector. The institutional model for nation-building – the approach that large international institutions can undertake all operations involved in nation building – has failed. The interplay between the three sectors needs to be rethought if we want to come up with ideas and solutions to the world’s most pressing issues.

The long plan

Nation-building is a long-term engagement. Its solutions are not micro-finance, aid, military presence, trade, nation-branding or any other for that matter. Nation-building is all of the above and many more. Once we understand that, we realize what our expectations should be and how we plan and budget our actions.

Rethinking the holy trinity is about leveraging each of the sector’s strengths, while avoiding their downsides. It is about creating a system of checks and balances between the three, while they’re engaged in Nation Building activities.

The plan, in a nut-shell:

1. The public sector – nation-states, IGOs, public institutions, privatizes all nation-building activities and is acting as the beneficiary, providing funding and oversight.

2. The private-sector is the contractor, in charge of coming up with the nation-building plan, under the guidance of the beneficiary, implementing it, and executing it.

3. The non-profit sector is the independent auditor and occasional donor, in charge of oversight, guidance and advice on proper implementation of the project.

Detailing the project

The need for Security

I have argued in other occasions that security is the foundation on which all nation-building efforts have to rely on. Let’s put it like this, if you want to build a house, security is the equipment you need to clear the lot and start the job. Security is the insurance you buy against bad weather, to make sure that regardless of what happens, you are safe and can go on with your work. Shortly put, security is the sine-qua-non condition of nation-building. Without achieving security, things like, trade, aid, health, energy or government reforms, are doomed to failure.

Can governments do security? Somalia, Sierra Leone, Zimbabwe, and others are more than sufficient reasons that questions a government’s efficiency to bring security, when they lack proper incentive. Governments wage war and they are good at that. Most have a very capable Department of War, but they don’t have a “Department of Everything Else”. The UN, the EU don’t even have that.That’s where the private sector comes in.

The Capitalist Model

By privatizing the “everything else” activities, one ensures the existence of all the necessary capabilities needed in nation-building, with the added values of private sector incentives for efficiency. Private security companies (PSC), but not only, are the natural choice for these activities. When you have to transport a good from one place to another and make sure it  gets to its destination, regardless how far or dangerous it is, who can do it better than a PSC? No one! If implemented, congratulations! A PSC just designed an effective postal system.  The examples could go on.

The NGO sector has longed argued that the private sector is not accountable, and its motivations are shallow. However, I ask the NGOs this: whom are you accountable to? I can also say that NGO’s are operating like in a food-chain: competing with each other for resources, rather than cooperating. I can also say that self-preservation and giving in to short-term silly donor-demands has made their motivations equally shallow. In this light, they seem to be doing the same exact (bad) things the private sector could do.

But that’s not the proper line of thinking. That’s just emerging in prejudice and extreme-oriented line of thinking. I say that each sector should focus on what it does best. There is no better role for an NGO, as it represents the civil society, than to provide oversight on our elected representatives and how they decide to spend our money. Working in DC or Brussels, Kenya or Afghanistan, it is the NGO sector who has the whistle and can signal when the train goes on the wrong path.

Round-up

Much has been said about cooperation and inter-agency coordination, about dialog and communication among various stakeholders involved in nation-building. It’s just not that simple to have three different cultures in the same room and expect that if you build a 3-fold institution, these actors will suddenly collaborate, streamline their operations and provide results.

The plan outlined above follows a capitalistic model based on division of labor based on competitive advantage, privatization, and globalization.

Big ideas are scary, but not more scarier than the problems we face.

By now, the “tabloid” media has had enough time to digest the results of the trial against Blackwater’s former employees accused of manslaughter for the incidents in the Nisoor Square.  While at home, “the mercenaries walk free”, abroad Joe Biden is making dangerous, but not so unexpected statements.

The US District Judge, Ricardo Urbina, dismissed all accusations against the contractors, on the ground that the prosecutors had built their case on sworn statements given under the promise of immunity. Urbina said that violated the guards’ constitutional rights.  What basically happened is that after the shootings, the State Department ordered the guards to explain what happened.  After being promised limited immunity that these statements will not be used against them in court, the guards offered their explanations.  The lead prosecutors in the Justice Department mismanaged the case, by using the information provided by the guards in those statements, thus violating their constitutional rights.

The decision does not solve the shootings itself, but in the current legislative context, that doesn’t matter. Well, I guess Mr Biden does not agree.  During his meeting with the Iraqi President, Jalal Talabani, Biden declared that the US will appeal Urbina’s decision, and highlighted  just how sensitive the matter is.

Is Biden’s approach outrageous? It is!

Is it unexpected? No!

How about strategic! Yes! Excellent!

What is happening here is that we have to remember that the US is trying to build a country in Iraq. Building a country requires strong institutions, meaning the Iraqi government has to be, or appear strong. When American citizens can kill Iraqi citizens and get away unpunished, that undermines the nation-building activities the US is engaged in. So at Biden’s narrow-minded diplomatic level of focus, his action makes total sense.

But somehow, he is failing miserably.  He, and the cabinet of the President he represents, are acting out as if they’re in desperate need of an escape goat, building diplomatic leverage at the expense of US Citizens’ rights.

Biden also chose to announce the decision in Iraq, sending a strong message that political considerations are more important than the life of an American citizen.  The selective sense of justice the VP displays is simply amazing. For example, wouldn’t one be more inclined to look into the poor performance of the lead prosecutors?

Mr Biden, it’s your institutions that are flawed!!! They messed it up. Stop punishing others for these institution’s  amateurism.  You  put on fire the airline companies with your reckless comments, you disagreed with the McChrystal Report and now this?

Seriously, I’m thinking more and more that you Mr. Biden, are a  threat to national security.

I can not even count the many times I have been questioned here at the Fletcher School on the idea that Private Security Companies (PSCs) are a value added in the conflict environment.  Though some comments are to the point and raise interesting  aspects  that  characterize the private security industry, there is no excuse for perpetuating opinions that limit one’s horizons to media buzzwords and newspaper culture.

I am thus launching a series of blog entries – The Critical Thinking Series – where I question the prejudice against the industry.   Critical thinking, the ability to distinguish the truth from the myth, the spin-off, the drama, and the interests is perhaps one of the most important skills one has to nurture in this ever complicated world of information-excess. The ability to discern between real concerns and bla-bla is paramount when claiming the right to perpetuate an opinion.

Entry 1 –  Private Security Companies and Mercenaries : Are they identical?

Aaaa, this is my favorite: the good old spicy merc story. The media has fallen in love with this buzzword and it has relentlessly  used it whenever given the chance.

Now I can answer this is two ways.  Firstly, I can keep blaming it on the media and on the desire of a general human trend to repeat what one’s being told. There’s a Romanian saying that states  ”Good is discrete, evil is scandalous.” One way is to sell an article titled “Contractor wrong-doings” and you get a total new marketing game with an article such as “Our mercenaries in Iraq: Blackwater Inc and Bush’s undeclared surge”. Can you sense the difference?

The other way I can answer this question is a more simpler, theoretical approach. Labeling PSCs and their employees as mercenaries is both unjust and wrong. In it unjust because it disregards the role private sector plays in peace and stability operations and it is incorrect because PSCs personnel don’t comply with the universally-accepted definition of “mercenary” from the Geneva Conventions. Accordingly, a mercenary is someone who is:

a. Specially recruited locally or abroad in order to fight in an armed conflict

b. Does in fact take part in the hostilities

c. Is essentially motivated for the desire of private gain

d. Is neither a national of a party to the conflict nor a resident of territory controlled by a party to the conflict

e. Is not a member of the armed forces of a party to the conflict

f. Has not been sent by a state that is not a party to the conflict on official duty as a member of its armed forces.

It is obviously that PSC personnel do not meet these criteria. Of the approximately 120,000 contractors in Iraq as of June 2009, 31,500 were U.S. citizens, 32,000 were local nationals, and 56,000 were third-country nationals. Thus, 50% of the contractors are American and Iraqi nationals and as such are nationals of a party to the conflict. Second of all, not all contractors take part in the hostilities. In addition, these companies have been sent in Iraq on official duty and often work under the authority of regular armed forces.

Furthermore, I will go on and argue in a more unorthodox manner, that if the for-profit motive is the main thing that distinguishes mercenaries from standing forces, even these regular armed forces sometimes join because they are motivated by private gains. The benefits of joining the military are a long known asset of the employment package. Even more, apparently Robert Gates has been having most problems reforming the Pentagon’s ways because of…job concerns.  In line with Rupert Smith and his analysis, Gates is trying to shift the focus in the Pentagon from preparations for large, conventional wars to small, strategic units. In the context of proper budgetary adjustments, his actions have caused in the job market. Thomas Barnett, former Pentagon analyst, Esquire Columnist and renowned security consultant,   raises an excellent question: “Is the Pentagon in the job of making Americans safe? Or is it a government job-creation scheme? “

In the same unorthodox manner, I will venture on and say that if one were to lable PSCs as mercenaries, what are UN peacekeepers then? Many third-world countries supply peacekeepers to keep the money flow coming, money which is not always used to train and equip these peace keepers, but for other more pressing, national needs.

Few more ways in which PSCs distinguish themselves from Mercenaries

- Mercenaries operate in small, independent units, bound by no other regulations and commitments than their contracts. PSCs operate mostly under a corporate structure, in a legislated business environment, and have various stakeholders and claimants on the company’s assets, acting like a limit to the activities they engage in.

- Mercenaries offer combat services to one customer at a time. The vast array of services PSCs offer far exceed those of direct combat and such companies are able to serve multiple customers at a time. In doing so, their job is regulated by the contracts they sign and the laws of the countries in which they originate and operate.

- Recruiting practices differ. As the mercenary activity is outlawed, mercenaries are recruited with dubious practices. PSCs recruit openly and their employment contracts are sometimes made public.

Ending thoughts

PSCs are not mercenaries. The term is flamboyant and it is used as if to somehow discredit the industry in comparison to regular armed forces. When this comparison is made, and somehow PSCs end up in the bad light, one must ask, how about regular standing forces and the abuses they commit? How is Nisoor Square worse than Haditha? It wasn’t PSCs, nor mercenaries for that fact, who invented concentration camps or who fire-bombed cities from the air (read: Belgrade 1999).  The carnage of the world wars did not happen because of PSCs.

PSCs are an industry servicing a niche segment. The industry does have severe regulation problems and I am the first one to argue for a stronger intervention of the state in this matter in order to ensure legitimacy and accountability. But we have to do that without losing objectivity and falling in either extremes.

Trying to define a private military company is not an easy task, most notably because of the vast array of services that these companies perform.  Juan Carlos Zarate argued that “the panoply of services defies classification, but they all involve the export of private military expertise in some fashion.”

There are generally three types of private military companies: the ones that directly engage in combat – military combatant companies- (DynCorp, Blackwater, the defunct Executive Outcomes), the ones that provide back-office support and military technology – military consulting and support firms- (Raytheon, MPRI, BAE Systems) and the ones that provide military logistics and supply.

Eeben Barlow,  a Lycan of the industry, portrayed himself as an innovative entrepreneur at the end of 1989, when he discovered a niche in the security market and decided to service it,  founding Executive Outcomes.  In his blog, he asks a rethoric question “Can PMCs make a difference”? and he comes up with a very impressive list of roles PMCs can play:

• End conflicts faster and cheaper than some standing armies
• Safeguard foreign investments/assets in a conflict zone
• Provide protection to humanitarian groups and locals caught up in the conflict
• Provide support to the armed forces on and off the battlefield
• Provide training and advice in specialist fields
• Intelligence gathering  and operations in high-risk areas
• Deniable operations
• Counter Terrorist, piracy, narco-terrorism operations
• Communications, logical and medical support

Now, all of the above are and continue to be fields where PMCs have developed extraordinary capabilities. The low-cost, political advantage of hiring PMCs to do dangerous operations is also a striking reason why governments hire PMCs.

However, here’s my problem with these capabilities. In today’s security environment, these capabilities, though important, do not offer a clear cut competitive advantage over regular armed forces.  The revolution in military affairs has enabled traditional armies to win conventional battles  in little amount of time and with few casualties (see the initial periods in Afghanistan and Iraq). With the questionable status of PMCs in international law, with their disputed cost-effectiveness claim, and with the excessive-violence concerns raised by Blackwater’s actions, playing on the same card as Mr.  Barlow proposes is a financial suicide. The kind of capabilities expressed above require mass involvements or regular armies in long-term conflicts, and compromises over legitimacy and professionalism. The kind of engagement like the one in Iraq is not very likely in the near future, and a PMC’s reputation and strong ethics might be just the most important asset it has.

There is one field where PMCs can develop a unique value proposition, that would differentiate them from anyone else in the security industry, and in the same time offer a valuable, much needed product: post-conflict reconstruction.

Post-conflict reconstruction is the next niche of the industry. PMCs can provide the logistics that will assure peace maintenance, and in the same time learn the soft-skills on nation-building:  inter-agency cooperation, institutional building, infrastructure development.  PMCs can achieve strategic partnerships with NGO world not just to provide security services and then be denied their contribution, but also in setting up institutions such as postal services, sewage systems, health clinics. PMCs can partner up with International Instutions to offer cheap political risk insurance, and thus foster foreign direct investments.

From disarming to school building, PMCs have what it takes to give rise to the new peaceful corporate warrior.

The implications? Many!

The challenges? Even greater

The possible outcome? Millions!

The exact description of the private sector…

Clausewitz considered war to be a „social activity…[]…a continuation of politics by other means” and his views have embodied the way we understand war and security. For the last years though, scholars and academicians alike have tried to analyze the impact technology, globalization and recent events have had on military affairs and the way war is carried out. The rise of armed groups, the nature of terrorism, and the increasing number of weak and failing states unable to control and enforce rule of law on their territory develop new conditions and perils that the old paradigm cannot explain. War is no longer fought between armies for a known political scope and for a short period of time. Protracted conflicts are fought in the name of vague notions, to kill leaders or ideas, to replace regimes, to serve the economic purposes of criminal organizations or to project both terror and power and increasingly involving the direct or indirect participation of civilians.

Just like Rupert Smith argues in his Utility of Force, war is happening amongst the people and in the same time, the people are the ones that have to be won over. These developments induce new questions about the validity of our security system, challenge state legitimacy, broaden the spectrum of security-related issues and alter the traditional relations between state, military and citizens.

Perhaps nowhere else are these new changes better observed than in the heavily increase of importance of the private military sector. The war in Iraq has brought into public light a silent yet persistent non-state actor: the private military company (PMC). The privatization of the military industry challenges the most standard conception of international security, the fact that states are the central, if not the only truly relevant actors in world politics. The rise of non state groups in the last years has showed that on the international arena, states share power with interdependent players caught in a myriad of transnational connections.

The private security industry has lost a lot of credibility following the various accusations concerting contracting procedures, vetting, overcharging, and most importantly, concerns about over-aggression and human-rights abuses. Blackwater is the company that due to its size and prominence, has become the poster-child for everything that is wrong with the industry. However, thinking in these terms endangers one into taking the exception and making it the rule.  And even more, it makes one disregard the tremendous importance that these companies can play in a world where enemies can no longer be pinpointed, deterred nor coerced.

I am somehow sick of hearing the common questions raised against the industry. “They can not be held accountable!” “They are mercenaries!” “They are not cheaper!” and many many others, which I plan on responding in this blog.  The private security industry has without a doubt  serious drawbacks, but one can not deny the value-added they bring in conflict environment. It is my personal belief that due to the capabilities these companies have, their ability to mobilize and the easiness with which they adapt, they should not only play a part in providing private security services, but also in areas such as post-conflict reconstruction, nation-building, humanitarian aid, crisis management and others.

The solution lies not in banning these companies, nor throwing stones at them.  On the states side, it lies in lobbying for and designing a system that will accommodate these companies in international law, that will provide for regulatory and oversight capacities and that will allow for proper prosecution of abuses.  On the side of the industry itself, the solution lies for these companies to understand that ethical concerns are tied up to their bottom line. If they want to maintain or increase their stream of cash-flows, those are not going to come from large military commitments such as in Afghanistan and Iraq, but from work with the non-profit world, the IGOs and private actors, and where reputation and legitimacy are sine-qua-non conditions.