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When Public Meets Private:
The Challenges and Opportunities for Outsourcing
External State Security Activities to Private Military and
Security Companies
Marsha van der Krabben
February 2014
University of Groningen
Supervised by Professor Jaap de Wilde Student S23153232
Tel: 0031-644789104 Zesde Buitenpepers 142
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Declaration by Candidate
I hereby declare that this thesis, “When Public Meets Private: The Challenges and Opportunities for Outsourcing State External Security Activities to Private Military and Security Companies”, is my own work and my own effort and that it has not been accepted anywhere else for the award of any other degree or diploma. Where sources of information have been used, they have been acknowledged.
Name: Marsha van der Krabben
Signature:
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Table of Content
Abbreviations
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Introduction
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Chapter One: Privatising Public Services
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1.1 Privatisation of Public Services and its Limits 8
1.2 Outsourcing Security Activities 14
Chapter Two: Challenges
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2.1 Political and Legal Challenges 22
2.2 Economic & Military and Operational Challenges 27
Chapter Three: Opportunities
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3.1 Political and Legal Opportunities 30
3.2 Economic Opportunities 33
3.3 Military and Operational Opportunities 36
Conclusion
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Abbreviations
BP British Petroleum
BT British Telecom
CBO Congressional Budget Office
CIA Central Intelligence Agency
DS Bureau of Diplomatic Security
GDP Gross Domestic Product
ICoC International Code of Conduct for Private Security Service Providers
ICRC International Committee of the Red Cross
IT Information Technology
NGO Non-Governmental Organisation
PMC Private Military Company
PMSC Private Military and Security Company
PSC Private Security Company
SAP Structural Adjustment Policies
SOE State Organised Enterprises
SSR Security Sector Reform
TCE Transactions-Cost Economics
UK United Kingdom
UN United Nations
UNGA United Nations General Assembly
US United States
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Introduction
Since the 1980s the privatisation of public services has become a widespread phenomenon. This thesis will focus on the privatisation of security services: namely the state outsourcing of external security activities to Private Military and Security Companies (PMSCs). The role of PMSCs has increased around the globe since the end of the Cold War. Not only in providing security for Multinational Corporations and NGOs, but increasingly so PMSCs are contracted by states. The scale of the use of PMSCs during Operation Iraqi Freedom and the scandals that have arisen from the involvement of PMSCs in Iraq has poured oil on the fire
surrounding outsourcing state security activities.
The literature involving the topic of private military and security companies already covers the critique on the concept of private security provision and partially also on the advantages and disadvantages of outsourcing state security activities to PMSCs. However, the debate on outsourcing security activities lacks a clear and critical outline of challenges and
opportunities. This thesis, therefore, will focus on the future of this phenomenon. This
research will not extensively discuss whether state security activities should be privatised, but takes this as a given fact, as it is an already existent concept that will not disappear easily in the near future. As a result, this research is able to analyse in-depth the challenges that exist for states, but also the opportunities that lie ahead for the concept of outsourcing external state security activities to PMSCs. In order to fill the gap in the debate, this thesis will answer the research question: What are the challenges and opportunities of state outsourcing of external
security activities to PMSCs for stable democracies?
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specific type of nation state. Most literature in this field of research is either based on
‘Western’ states outsourcing security activities to PMSCs or unstable, rogue states contracting out security services. To incorporate both perspectives would make it impossible to come to an accurate analysis of challenges and opportunities, as a great amount of factors and
circumstances differ. Therefore, this research will only use literature and other sources based on the perspective of ‘stable, democratic states’. This being a very general and debated concept, for the interest of this research only, ‘stable’ will mean not involved in military conflict for at least 25 years (excluding military operations outside of the national borders). States will be considered ‘democratic’, in case of a democratically elected government. Argument
This thesis argues that outsourcing external state security activities to private military and security companies can provide serious challenges for stable states, but as opportunities are rapidly developing, outsourcing state security activities can represent a (short-term) solution to economic, political and operational difficulties stable states could be confronted with. These challenges are mainly of a political and legal nature, but economic and military & operational challenges can be identified too. The most important challenges are the lack of transparency regarding accountability and responsibility; lack of regulation and oversight; and conflicts of interest between the state and the private contractor. Nevertheless, opportunities in regulation and accountability on national and international level are rapidly being
developed. The main developments in this field are the Montreux Document and the International Code of Conduct for Private Security Service Providers (ICoC), both multi-stakeholder treaties creating legal standards for the private security sector. Other opportunities for a state to outsource security activities to PMSCs are saving costs, increasing efficiency and increasing the military and operational flexibility.
Structure and methodology
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The presentation of the findings in Chapters Two and Three will be structured by dividing them into several dimensions. This method of analysis is partially adopted from the security sector framework presented in Security: A new Framework for Analysis by Barry Buzan, Ole Waever and Jaap de Wilde (1998). Buzan, Waever and De Wilde incorporate military, political, economic, environmental and societal sectors in their new framework of analysis, stepping away from the traditionalist’ view of security. This thesis will partially adopt this method, and divide its findings in three types of dimensions: political & legal, economic, and military & operational. These dimensions are most representative of the challenges and opportunities that states are confronted with when outsourcing external security activities to private contractors. These dimensions will help structure the research results and will make comparisons more feasible.
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Chapter One: Privatising Public Services
This chapter sets out a theoretical and academic context for this thesis. It not only focuses on the theories of privatisation and Neoliberalism, but also attempts to give a clear oversight of the main themes and pitfalls in the debate surrounding privatising public services. The chapter is divided in two parts. Part 1.1 will focus on the theory and the debate surrounding the
concept of privatising public services in general. Part 1.2 will then focus on the particular type of privatisation this research is looking into: outsourcing external state security activities. Part 1.1 commences by setting out the analytical methodology that will be used to structure the research results in this thesis. It elaborates further on the methodology adopted from the Copenhagen School as mentioned in the introduction. In order to set the right base for the debate, the chapter next defines the concept of privatisation of public services and the role Neoliberal theory played in the spread of the popularity of privatisation policies. This is followed by identifying the nine main types of privatisation, keeping in mind the different forms of privatisation of public services. Next, the chapter moves to the advantages of privatisation, by elaborating on the most prominent motivations for states to privatise public services. Part 1.1 of this chapter finishes by discussing the critique of privatising public services, by looking at the perceived role of the state and limits of privatisation.
1.1 Privatisation of Public Services and its Limits
Methodology
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identified security dimensions; military, political and economic security. Furthermore, in order to custom make this analytical framework to this specific research, the dimensions will be adjusted and a detailed focus will be added. The type of security dimensions that this research will be build upon are: 1) political and legal, 2) economic and 3) military and operational dimensions. These dimensions are most representative of the challenges and opportunities that states are confronted with when outsourcing security activities to private contractors. These dimensions will also help structure the research results and will make comparisons more feasible.
Privatisation
The privatisation of public services can be generally defined as the phenomenon where a private entity partially or completely offers a service previously provided for by the state (Mota Prado, 2009, p. 109). Privatisation of public services is not new: the Icelandic Commonwealth in 930-1220 A.D. was a state where services such as fire-fighting, criminal prosecution and care for the poor were all private (Friedman, 1989, p. 37). Throughout the 20th century there are several post-war examples of what can now be classed as privatisation. Churchill’s denationalisation of the British steel industry for example. Other examples include the denationalisations of the Adenauer government in the Federal Republic of Germany, or even the Chilean political programmes under Pinochet’s regime (Megginson and Netter, 2003, p. 30). Privatisation of public services on a larger scale, however, became prominent in the 1980s during the United Kingdom (UK) Prime Minister Margaret Thatcher’s Conservative government.
This policy of privatisation of state companies was one of the policies promoted by Neoliberalism. Neoliberals argue for a minimal role for the state in the economy and the increased role for the market forces on economic life. Privatisation of government owned enterprises, amongst others, is one way to minimise the role of the state and increase the free market (Burchill, 2009, p. 74; 78). Keynesianism, on the contrary, supports the state
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see to allocate “all resources, whether physical, natural, human or financial with the greatest possible efficiency”(George, 1999). While Thatcher spread Neoliberalism as an economic policy through the United Kingdom, her colleague in the United States (US), President Reagan, did so in his economy.
The privatisation of British Telecom’s (BT) initial public offering in November 1984 put privatisation on the map as an economic policy in the United Kingdom (Megginson and Netter, 2003, p. 32). In 1979 state organised enterprises (SOEs) represented 10 per cent of the British Gross Domestic Product (GDP). Bby the end of Thatcher’s government in 1997, SOEs were seen to have barely played a role at all in the British economy (Megginson and Netter, 2003, p. 32). Contemporaneously, however, BT is now a booming part of the UK economy, and a critical part of its national infrastructure. In light of this, the Royal Mail (representing the British Post Office) has been seen to have remained one of the only large SOE in the UK. Other European countries followed the British example: between 1977 and 2000 there were 736 privatisations in Western Europe. This represented 55 per cent of all the world’s
privatisations in those years (Megginson and Netter, 2003, p. 32).
Factors related to the popularity of privatisation policies are the Maastricht Treaty and the World Bank. The Maastricht Treaty required serious fiscal changes to signatory states, such as the reduction of deficits. Privatising SOEs therefore was a way to raise money and meet these fiscal requirements (Megginson and Netter, 2003, p. 33). The World Bank suggested
11 Types of Privatisation
In order to create a comprehensive framework for discussing privatisation, it is of importance that the most basic types of privatisation policies are firstly identified. Barak-Erez (2000) offers a clear oversight of nine of these types of privatisation: 1) establishing companies for the purpose of promoting business activities; 2) selling government assets; 3) construction of public infrastructure by private investors; 4) licensing and concessions; 5) privatisation through omission: constricted governmental activity; 6) provision of services for a fee; 7) voucher systems; 8) cooperation with third-sector bodies; and finally 9) outsourcing
governmental activities to private contractors (p. 72-75). For the purpose of this research, this thesis will focus mainly on the latter type of privatisation as it is most relevant to privatising security activities.
Although this summary by Barak-Erez is not the most complete oversight of types of privatisation, it does include combining different forms of privatisation policies in order to outline the full picture for critical analysis, which other summaries of operationalisations of privatisation seem to miss. These forms of policies can be; the withdrawal of government from activities when market forces are considered more efficient; the shift from free provision of public services to a more costly (for citizens) provision which is market-oriented; and finally the policy of contracting out operational aspects of state activities. Barak-Erez combines these different forms of privatisation policies and creates a basic oversight of the nine commonly used types of privatisation of public services.
The outsourcing of governmental activities to private contractors exists in many forms. States may start with outsourcing technical or non-essential activities, such as rubbish collection and information technology (IT) services. This has been seen to be expanded then to more
12 State Motivations for Privatisation
Motivations for states to privatise public services are ample; but also diverse and complex. This section will discuss the five most prominent motivations within the scope of this research. Firstly, a motive for privatising public services can be part of a state’s ideological preference. When a state has adopted a neoliberal economic policy, privatising public services would inevitably be part of this philosophy. Second, privatising public services to save costs for a government. This can be due to many reasons, such as private actors potentially having lower running costs or more flexibility (Mota Prado, 2009, p. 110). This is where Neoliberal theory returns. It argues that minimising the role of the state (for example by privatising public services) the economy is opened up for free market forces, creating competition. Competition should on its turn decrease prices.
Third, privatisation could lead to a more efficient service, particularly due to the fact that governmental objectives can radically change after every election; “the inability of the government to commit itself credibly to a policy can significantly reduce the efficiency of a firm’s operations and governance” (Megginson and Netter, 2001, p. 330). Fourth, outsourcing a service might simply mean ‘less hassle’ for a government. For example, a public service might become more flexible in private hands, due to less bureaucracy and less procedural requirements (Mota Prado, 2009, p. 110). Fifth and finally, there might exist situations where a state is forced to privatise services due to a lack of choice. This lack of choice might be more prevalent in weak or failed states, where a government is not able to provide the correct technical or material capacities for a service (Mota Prado, 2009, p. 111). In light of the above however, the decision by a state to privatise public services is heavily underpinned and
13 Boundaries of Privatisation
The phenomenon of privatising public services has been the cause of heated debates over many years. Even in the 18th century, statesman and philosopher Edmund Burke recognised this issue: “One of the finest problems in legislation is namely to determine what the State ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual discretion” (Middleton, 1996, p. 41). Much of the privatisation debate is largely centred on the questions ‘what is the role of the state?’ and ‘are
there limits to the privatisation of public services?’. This chapter does not intend to seek an
answer to these questions, but merely provides a critical overview of the main arguments used in the debate about the privatisation of public services.
Regarding the role of the state and public services, Minow identifies three key types of arguments supporting the claim that essentially public services do exist: historical, symbolic and political arguments (Minow, 2003, p. 1234). Mota Prado however, agrees with Minow’s assessment, but also adds a fourth, consequentialist type argument: the utilitarian argument (2009, p. 120-122). ‘Historically’, many countries see tax collection as a core state activity. Criminal prosecution can be seen as a ‘symbolic’ state activity, “with the symbolic message that the government stands in for the community and private victims” (Minow, 2003, p. 1234). Operating prisons arguably is an essential public service—and therefore a core state activity—as politically the state in many parts of the world holds the monopoly to the legitimate use of force (Minow, 2003, p. 1234). The notion of the state having monopolistic power over the legitimate use of force is a key argument in the debate on outsourcing state security activities to private actors. This argument will be discussed in further detail in chapter 1.2 of this thesis.
The fourth argument supporting the claim that there do exist essentially public services is the utilitarian argument (Mota Prado, 2009, p. 120-122). This argument attempts to contextualise the costs and benefits of such action, and the main purpose of the service in question, rather than focusing on the more philosophical question what is the role of the state? Therefore, whether a service should remain public or is suitable for privatisation depends on the specifics of the service itself, according to this argument.
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in public hands, and therefore should not be privatised. This provides us with a balance against the earlier analysis of state motivations for privatising public services.
Leaving the role of the state aside—and assuming there are public services that should be allowed to be privatised—a great part of the privatisation debate is engulfed by whether or not there should be limits to the privatisation of public services. According to Barak-Erez (2009), the boundaries of privatisation can be addressed through two forms of analysis: an institution-based analysis and a rights-institution-based analysis (p.76). These two types of analysis are of key importance as they combine two inherently significant perspectives on the limits of privatisation: the interests of the population of a state and the role of the state. The rights-based analysis focuses on “whether the privatisation mechanism at hand includes safeguards against infringements of fundamental rights by those private actors vested with the
responsibility to execute functions formerly handled by public officials” (Barak-Erez, 2009, p. 77). The role of human rights is key in this analysis. Thus, the limits of privatising state activities is measured by the degree to which the consequences cause the infringement of fundamental rights, according to the rights-based analysis (Barak-Erez, 2009, p. 80). The institution-based analysis, quite differently, focuses on the limits of privatising certain state activities due to their role in being “an integral part of the state” (Barak-Erez, 2009, p. 77). However, subjectivity underpins this argument as the role of the state—and therefore its core activities—depends on one’s perspective. The concepts vary from the minimal function of the ‘night-watchman’, to the contrasting stance as playing an active role in a welfare state (Barak-Erez, 2009, p. 77).
This analysis of the debate surrounding privatising public services will form the theoretical basis of the following chapters of this thesis where the challenges and opportunities of outsourcing state security activities to PMSCs will be critically discussed.
1.2 Outsourcing Security Activities
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analysed. In order to form a comprehensive outline, this section first defines what is meant by a PMSC; clarifying its role and purpose. Secondly it identifies the most important state security activities and provides empirical examples of privatisation of these activities. In doing so, it allows for the discussion to identify potential gaps and explore possibilities for PMSCs to play a role in contemporary security for states. Finally, this section discusses the philosophical debate on the state as having the ultimate monopoly on the legitimate use of force. This allows the discussion to bring together the core arguments already discussed; taking into account the ‘art of the possible’ for PMSCs to play a role in security, and the reasoning for them to be considered as an important stakeholder within the field of international security.
Private Military and Security Companies
PMSC is a term which represents both private military companies (PMCs) and private security companies (PSCs). This thesis has chosen to group the two types of private
contractors, as often the tasks and activities of PMCs and PSCs overlap (Ortiz, 2007, p. 64). Interestingly, many scholars do not seem to be able to agree how to distinguish between PMCs and PSCs. In general PMCs are suggested to provide an active role in security services. Carlos Ortiz (2007), for example, defines PMCs as “legally established multinational
commercial enterprises offering services that involve the potential to exercise force in a systematic way and by military means and/or the transfer or enhancement of that potential to clients” (p. 60). This means that training and advice too can be part of the services offered (Chesterman and Lehnardt, 2007, p. 3). PSCs are often differentiated for their passive security services. However, in practice the security services offered by both PMCs and PSCs tend to overlap and the theoretical distinctions suggested by scholars are hard to maintain in practice (Liss, 2007, p. 135). Therefore, this thesis will define Private Military and Security
Companies as legally established multinational commercial enterprises offering passive and possibly active security services, such as logistical support, training, consultancy, technical support, personal security, maintenance of military equipment, procurement, brokering of military equipment, explosive ordnance disposal, logistical support for military operations and bases, and intelligence collection and analysis. The table below shows the distribution of the kind of tasks PSMCs mainly supply as presented by Branovic (2008) from the Freie
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humanitarian aid organisations. Critical note here, however, is that true global statistics on PMSCs do not exist. Therefore, all available data should be examined with caution.
Table 1:
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Source: Humanitarian Policy Group, 2009.
State Security Activities
Core to this research is the identification of state security activities and consideration towards the potential for PMSCs to play a role in supporting their delivery. This thesis will focus mainly on external security activities and to a lesser extent on a key internal security activity where PMSCs are gaining prevalence: prison operation. To focus on both internal and external security activities would involve a much larger research than this thesis can offer. Therefore, key security activities where PMSCs could potentially play a key role include:
Military operations. This includes supportive tasks such as logistics, but also engagement in
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PMSCs personnel than US troops were in Iraq at that time (Congressional Budget Office, 2008, p. 8). The involvement of PMSCs in military operations raises a magnitude of questions regarding the legitimate use of force and accountability. Chapter Two will analyse these issues further.
Peacekeeping operations. PMSCs are known to have been actively involved in peacekeeping
operations since the 1990s (Lehnardt, 2009, p. 205). The structural downsizing of state armed forces in the last decades and the ever tightening budgets of states due to the worldwide economic recession has the potential for PMSCs to take a more active role in United Nations peacekeeping operations. Although not without weaknesses, chapter 3 will further discuss this option as a possible opportunity for state outsourcing of external security activities to PMSCs.
Security Sector Reform (SSR). Security sector reform services can be labelled as both internal
(domestic) as well as external security activities. Domestically, a state can use private contractors to train public police and state armed forces. Externally, a state can hire private contractors to do this on their behalf in another country. A useful example to further clarify the role of such organisations here; PMSC DynCorp International was contracted in 2004 by the United States Department of State to establish and train a state army in Liberia (Buzatu and Buckland, 2010, p. 12).
Intelligence. Due to the very nature of intelligence as a capability within security, outsourcing
such a costly and risky service can be at the same time essential as well as potentially dangerous. Essential, as private involvement is most likely needed in the form of telecommunications and IT-sector cooperation to monitor communications (Buzatu and Buckland, 2010, p. 13). However, the involvement of private actors in intelligence gathering or analysis can bring risks due to conflict of interests (the pursuit of profit maximisation by private contractors can conflict with public policy goals [Mota Prado, 2009, p. 126]), and the levels of access that they may have unbounded by state sovereignty and diplomacy. For example, in 2007, the United States revealed it spends 70 per cent of the intelligence budget on private contractors (Chesterman, 2009, p. 184). Chapter Two will discuss such actions in more detail and the challenges posed due to possible conflicts of interests when outsourcing state security activities to PMSCs.
Prison operation. The privatisation of prisons appears to be a mainly Anglo-Saxon
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questions of accountability, conflicts of interests and doubts regarding the monopoly to the legitimate use of force. This thesis will focus on the first four security activities mentioned. However, challenges that private prison operation can be confronted with do overlap with the challenges of the external security activities at the heart of this research. All these different types of challenges will be critically analysed in chapter Two of this thesis.
Monopoly on Legitimate use of Force
The idea that the state holds the monopoly on legitimate use of force comes from the idea of sovereignty, as established in the Treaty of Westphalia of 1648. Hans Morgenthau explains sovereignty as a “centralized power that exercised its law making and law-enforcing authority within a certain territory” (Morgenthau, 1973, p. 306). Max Weber states that this created a modern state that “is a human community that claims the monopoly of the legitimate use of physical force within a given territory” (Weber, [1918]1999, p. 111). However, in recent times—especially since the end of the Cold War—the notion of an undisputed and almighty nation-state is fading. This change away from an undisputed nation-state is not only
occurring due to globalisation, but a magnitude of factors coming together to contribute. These factors include key issues such as international interventions, fragile and failing
statehood, and most importantly for this research, privatisation of violence and security (Wulf, 2007, p. 19).
The privatisation of violence and security leading to the degradation of the state’s monopoly of legitimate use of force, takes place in a top-down manner as well as bottom-up. Bottom-up through militias, rebels, gangs, organised crime and other private actors. Top-down through outsourcing of security activities by political and security leadership, as discussed earlier (Wulf, 2007, p. 19). This entire process reverses the century-old effort to disarm citizens in order to establish the legitimate state monopoly of use of force (Wulf, 2007, p. 19).
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To conclude, when a private entity partially or completely offers a service previously
provided for by the state this is also known as the privatisation of public services. Driven by Neoliberal ideology, privatisation gained prominence in the 1980s due to the UK economic policy to privatise SOEs on a large scale. Neoliberal theory, arguing for a minimal role for the state in the economy and the increased role for the market forces on economic life gained more and more popularity and many European countries soon followed and privatising public services was generally accepted in Europe in the 1990s and early 2000s. The advantages of privatisation can be found when discussing the main motivations for states to privatise public services. Not only do political ideologies (such as Neoliberalism) play a role, economic and efficiency arguments are also prevalent. Privatising public services can reduce costs, as market forces are supposed to create competition, and competition on its turn—in theory, that is—reduces price. Furthermore, privatising could lead to a more efficient service, losing the ever-changing objectives of government. Increasing flexibility could be another effect, as bureaucracy and procedural requirements are likely to be reduced in private hands. Privatising government services also raises questions and critique. Not unimportant is the debate concerning the role of the state, in order to be able to decide where the limits lie for privatising public services. Part of this debate is the discussion on what—if any—are
‘essentially public services’. As with the role of the state, the answer to this question is reliant on one’s perspective. Should the state provide a welfare society for its citizens, or rather solely interfere as a ‘night-watchman’? The institution-based analysis, as presented by Barak-Erez (2009, p.77) bases the answer to whether there are limits to privatising public services on the role of the state. This chapter, however, has found that the answer to this question can be separated from the role of the state. Solely based on legal arguments, one could argue that the boundaries of privatising public services should be drawn by the degree to which the
consequences cause infringement of fundamental rights of the state’s citizens. These forms of analysis are crucial to this research, as they can be utilised as a way to weigh the challenges and opportunities of outsourcing security activities to PMSCs.
Although this chapter has identified nine types of privatisation, this research will focus on outsourcing governmental activities to private contractors. One form of this type of
privatisation is outsourcing state security activities to private military and security companies. This thesis has chosen to group the two types of private contractors (private military
companies and private security companies), as often the tasks and activities of these
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Chapter Two: Challenges
This chapter identifies and critically discusses the challenges that confront state outsourcing of external security activities to private military and security companies. The chapter is divided into two parts each discussing different challenges. Although this chapter attempts to divide these challenges into sections to ensure clarity and structure in the discussion, many of these challenges are interlinked; meaning they can often overlap. Therefore, it is impossible to fully discuss each challenge independently, but rather take a holistic view of the challenges and structure them appropriately. As a result, the three dimensions that form the methodology of this thesis (political and legal; economic; military and operational) will be altered due to the overlapping features of the challenges presented in this chapter. The sections of this chapter therefore include: 2.1: Political and Legal challenges and 2.2 Economic & Military and Operational challenges.
Part 1.1 highlights the challenges regarding political and legal issues. This includes first of all accountability and responsibility. It critically assesses some empirical examples of private contractors providing state security activities and critically elicits and discusses the legal issues of accountability and responsibility that are evident. Subsequently, the challenges regarding regulation and oversight shall then be discussed. This section features mainly legal arguments, but these will alternate with empirical examples.
Part 2.2 discusses economic as well as military and operational challenges. This section will discuss the conflicts of interest that many scholars are concerned about when discussing outsourcing state security activities. As this challenge has both economic, and military and operational consequences, the two dimensions will be grouped. The security activities identified in chapter One will be used to further explore this issue.
2.1 Political and Legal Challenges
Accountability & Responsibility
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responsibility for violations against important benchmark topics such as human rights by PMSCs, there are several stakeholder groups that can be linked to the PMSC and its
accountability. The main difference can be made between a home-state and a host-state. The home-state is the state from where a PMSC operates and is registered (De Schutter, 2009, p. 35). The host-state is the state on which’ territory a PMSC is active, thus where it is
performing security activities (De Schutter, 2009, p. 34). The other two common parties involved are of course the victims of the violation and the PMSCs themselves.
Corporate responsibility for grievances caused by PMSC personnel initially depends on regulation and control by the host-state. A host-state has the legal power to prosecute offenders on its territory. Therefore, if PMSC personnel violate human rights it is first and foremost the task of the host-state to hold the perpetrators responsible. However, PMSCs tend to operate in states with weak governments and in conflict zones. This makes it often
impossible for the host-state to hold violators fully to account. “As most ‘hard law’ depends upon a state’s ability to enforce it within its territory, the ease which private actors cross borders and can escape territorial reach undermines the enforcement of both national and international law” (Buzatu and Buckland, 2010, p. 18).
National regulations vary widely across the world. Both in scope and complexity states differentiate themselves on their national regulations regarding private security and military contractors. Only a few states have specialised regulatory systems in place aimed at PMSCs. The United States is an example of this. The other states require licensing, and vetting procedure, while there are also other states where the “commercial provision of these
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International Convention for the Protection of All Persons from Enforced Disappearance Draft Articles on Responsibility of States for Internationally Wrongful Acts
Rome Statute of the International Criminal Court
Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction
International Convention against the Recruitment, Use, Financing and Training of Mercenaries
Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment
International Covenant on Civil and Political Rights
The Geneva Conventions of 1949 and their Additional Protocols
Universal Declaration of Human Rights Hague Convention (V) Respecting the Rights and Duties of Neutral Powers and Persons in Case of War on Land
As PMSCs oftentimes operate in regions or states that are conflict-prone and where weak governance zones exist, some argue that in those situations the home-state should be held responsible for a large part of the PMSC’s activities, as the host-state often is unable to do so (De Schutter, 2009, p. 24). José Luis Gómez del Prado, President of the Working Group on the Use of Mercenaries as Means of Violating Human Rights and Impeding the Rights of Peoples to Self-determination, made an appeal in 2008 on the responsibility of states to regulate PMSCs:
“We therefore call upon States where exporting companies are registered to regulate and oversee private military and security companies; not to grant immunity to their personnel; and to investigate and bring to justice those security guards who may have committed crimes and human rights violations in Iraq or in other places” (Gómez del Prado, 2008, p. 10).
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From a strictly legal perspective however, there are only few situations where a home state can be held accountable for PMSC personnel violations. De Schutter (2009) explains that there are four situations in which the acts of PMSCs may be imputed to a state. The first and the most obvious scenario is when a PMSC is so closely integrated to the armed forces that they can be identified as agents of that state (p. 43). A second situation is where one can prove that the PMSC “constitutes a mere fiction which the state uses in order to pursue its interests”, and that therefore a PMSC does act under control of that state (p. 43). Third, if a state decides to delegate powers or activities to private actors (PMSCs in this situation), it is responsible for the manner in which these powers or activities are exercised (p. 43). Fourth, a state could be held responsible for the actions of PMSC personnel if the PMSC “is in fact acting on the instructions of, or under the direction or control of, that state in carrying out the conduct” (p. 43).
In situations where PMSCs are hired by private corporations such as multinational corporations in the extractive industry—instead of by a government—holding a state responsible seems extremely unlikely (De Schutter, 2009, p. 44). Without a doubt, these conditions are very limiting to the victims of human rights violations. PMSCs often use several subcontractors during their operational activities, ultimately making it impossible to create a clear link between the core PMSC as an organisation, and the state itself (Fisher, 2009, p. 59). Even if it appears obvious that a PMSC is acting for a particular state, states are able to deny accountability. A clear example of this was in 1997, when both the US and the UK supported PMSC Sandline International in Sierra Leone to overthrow the Koroma regime. Both states denied association as soon as it was condemned to be a violation of UN arms embargos (Singer, 2003, p. 209).
A complicating factor in the question of home-state accountability is the determination of the ‘nationality’ of a corporation (De Schutter, 2009, p. 39). Such actions are not fully
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state, in order to avoid possible accountability issues. This could be regarded as the PMSC version of vessels flying ‘flags of convenience’ where vessels choose under which flag they register, and can therefore simply choose the regulatory framework that is most convenient to them (De Schutter, 2009, p. 40).
The sometimes apparent ‘untouchable’ status of PMSCs and its personnel can prove frustrating to those seeking justice and the question whether a private company is legally accountable for those it harms seems far from settled (Fisher, 2009, p. 52). An empirical example of the unsolved issues of accountability is the case of Blackwater in Iraq.
Blackwater, a PMSC active in Iraq for the US, was involved in a scandal, after revelations linking Blackwater to involvement in torture in the form of waterboarding. However, this did not seem sufficient to start any debate of importance in the United States. Instead of being pushed by these revelations, the few reforms that did follow this event seemed “most likely to come because each of those torturers cost the US taxpayer double the salary of a Federal employee” (Chesterman, 2009, p. 204).
However, there are ways in which a home-state can regulate the PMSCs registered on its territory and help to create more clarity on who is accountable in case of human rights violations by these contractors. Such opportunities will be discussed in chapter Three. Regulation & Oversight
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go unpunished and that their effective prosecution must be ensured by taking measures at the national level and by enhancing international cooperation (…) it is the duty of every State to exercise its criminal jurisdiction over those responsible for international crimes”
(International Criminal Court, 1998).
Thus, based on international agreements, states have a dutiful obligation to not only prevent crimes against humanity by any actor, but to cooperate and exercise their capabilities to ensure all violators are brought to justice.
However, as these documents do not specifically take into account the complicated situations of security activities by PMSCs and the relations between a PMSC and a home-state, it is still unclear whether the home-state has an obligation to act on PMSC-personnel violations
committed outside their national territory, and thus regulating and effectively controlling the PMSCs incorporated under its laws. Nevertheless, there are possibilities for (more) effective regulation and oversight. Chapter Three will discuss these opportunities in further detail.
2.2 Economic & Military and Operational Challenges
Conflicts of Interest
Another challenge that confronts states when outsourcing security activities to PMSCs is the issue of conflict of interest. The pursuit of profit maximisation by private contractors can conflict with public policy goals (Mota Prado, 2009, p. 126). This can be defined as “when commercial and operational interests collide” (Buzatu and Buckland, 2010, p. 14). Profit maximisation does not equal maximising a state’s security. A profit motive might lead to comparing costs and benefits and putting things into perspective for private corporations. Some argue that this means that state security activities are no longer aimed at defending the state at all costs motivated by goodwill or honour, but “instead it becomes a matter of
defending the state as long as it is profitable” (Mota Prado, 2009, p. 127). Mota Prado (2009) even argues that the risks and the consequences from this are very high, as PMSCs can
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Intelligence services present another particularly sensitivity for conflicts of interest between a state and private contractors. The former head of the CIA’s Clandestine Service stated that “There is a commercial side to it that I frankly don’t like…I would much prefer to see staff case officers who are in the chain of command and making a day-in and day-out conscious decision as civil servants in the intelligence business” (Chesterman, 2009, p. 197). However, one can impossibly argue that all full-time government employees are patriotic and competent in such a way that they only serve the state’s interests and not their own. Nevertheless, the commercial interest of a PMSC does offer a reason to be weary of privatising intelligence services. An example of the abuse of information by a private contractor is the 2006 case of PMSC Boeing Corporation. Due to illegal information provision by an engineer in the Department of Defence (who was formerly employed by a private contractor) Boeing Corporation was able to get sensitive bid information leading to a 565 million US dollar contract for rocket launches (Chesterman, 2009, p. 197).
In contrast however, a commercial motive might also lead to positive outcomes, as PMSC seem to be attempting to professionalise themselves by creating industry associations such as the British Association of Private Security Companies and the International Peace Operations Association, so that they can eventually charge higher fees (Chesterman, 2009, p. 198). These industry associations tend to differentiate themselves by creating higher standards and norms for the corporations they include.
Most negative side effects from conflicts of interest can be prevented by states through proper regulations and imposing requirements as part of the contracts. These opportunities for
effective regulation and control in order to prevent conflict of interests and human rights violations will be discussed further in chapter Three.
To conclude, for stable and democratic states, the political and legal dimension appears to dominate the challenges regarding outsourcing external security activities to private
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when looked at from the economic and military & operational perspective. Commercial and operational interests are prone to collide and a state should be aware that cutting costs and profit maximisation driven motivation do not always align with the maximisation of effective security provision. Now that the most important challenges have been identified and
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Chapter Three: Opportunities
This chapter identifies and discusses the possible opportunities for outsourcing external state security activities to private military and security companies, focusing on the perspective of a democratic, stable state. Although the challenges discussed in the previous chapter should not be underestimated, opportunities too can be found. Continuing the methodology used in chapter two, this chapter discusses the possible opportunities for states through several dimensions. First, 3.1 discusses the opportunities in the political and legal dimension. Not only can outsourcing security activities be less troublesome bureaucratically for a state, there are also opportunities at the regulatory level through international initiatives in the form of multi-stakeholder treaties. Part 3.2 analyses the economic advantages and opportunities for contracting out security activities. This includes cost savings and efficiency arguments. However, the question remains whether cost saving as a coherent argument will remain applicable in the longer term. In part 3.3 the third and final dimension of this chapter is the military and operational perspective. Opportunities here include increased flexibility, particularly in the context of decreasing defence budgets and shrinking armed forces and wider security apparatus. This section will also look at possible opportunities on the
international stage such as contracted technical support in international missions. This option for potential deeper involvement in UN missions, however, does not seem a clear-cut
opportunity for states and has been centre of much debate.
3.1 Political and Legal Opportunities
The political and legal advantages of outsourcing state security activities can be found in being less troublesome and more flexible due to less bureaucracy and procedural
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regulation should also take place in the form of direct application of constitutional duties and statutory regulation (2009, p. 83). In cases where PMSCs are acting as direct substitutes for the government, PMSCs “should be subject to duties similar to those that would have applied to the government had it conducted the same action” (Barak-Erez, 2009, p. 83). Although this suggestion by Barak-Erez appears logical to apply on contracts given out by government to private contractors, somehow this demand is still necessary, as in practice PMSC contracts do not always apply these standards. Thus, scholars seem to agree that regulation should be achieved through supervising mechanisms on different levels: on the state level (i.e. constitutional regulation), and on a ‘contract-level’ where regulatory provisions should be made in the contract between state and PMSC.
What appears to be missing here is the regulatory endorsement at the international level. However, several initiatives on this level already exist. These are in the form of promising multi-stakeholder regulatory initiatives, such as the Voluntary Principles on Business and Human Rights (2000). The Voluntary Principles on Business and Human Rights were
founded in 2000 and are “designed to guide companies in maintaining the safety and security of their operations within an operating framework that encourages respect for human rights” (n.d., Voluntary Principles website). British Petroleum (BP), is an example of one of the leading extractive industry companies that is signatory to these Voluntary Principles. In their Implementation Guideline (BP, 2008), BP explains their strategy for implementing this treaty. As a leading international extractive company, BP is a good example of how treaties like these can influence corporate strategy. Although one should be critical to its actual implementation, the influence this treaty has had on BP’s security management planning process appears large (Voluntary Principles, 2008).
In 2011 the ‘Guiding Principles on Business and Human Rights implementing the United Nations Project Protect, Respect and Remedy Framework’ by Professor John G. Ruggie was endorsed (2011, Guiding Principles). This framework was developed to create concrete and practical recommendations on how to protect human rights from transnational corporations and other business enterprises. The framework consists of three pillars:
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2. The corporate responsibility to respect human rights, which means to act with due diligence to avoid infringing the rights of others and to address adverse impacts that occur;
3. Increased access for victims to effective remedies, both judicial and
non-judicial.”(Buzatu and Buckland, 2010, p. 21-22).
Whereas the Voluntary Principles on Business and Human Rights focuses on the extractive industry and the Protect, Respect and Remedy framework on the general relation between enterprises and human rights, there are also international initiatives designed especially with private security contractors in mind. The Montreux Document is one of these
multi-stakeholder initiatives. Initiated by the Swiss government and the International Committee of the Red Cross (ICRC) in 2008, the Montreux Document aims at addressing the gaps in international humanitarian law as it applies to PMSCs operating in areas of armed conflict (Buzatu and Buckland, 2010, p. 22). The objectives were designed to “1) clarify the existing obligations of states and other actors under international law; and 2) to develop good
practices, regulatory options and other measures at the national and possibly international level” (Buzatu and Buckland, 2010, p. 22). Although the Montreux Document has been praised widely on quality, content and inclusive approach (47 states currently officially support the document), it does not provide the answer to heated debates on the legitimacy and advisability of outsourcing state security activities. As a concept it does however clarify legal and practical points in international law regarding the use and obligations of PMSCs and states involved (Buzatu and Buckland, 2010, p. 22). For this reason alone the Montreux Document can prove valuable for states looking to outsource external security activities to PMSCs or states that are already involved in this, as it clarifies legal and practical issues that can prove complicated for states involved.
As a reaction to the positive response that the Montreux initiative received from the security sector, the Swiss government created the International Code of Conduct for Private Security Service Providers, also called the ICoC (International Code, 2010). It aims to design
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societies. At this present time, 708 companies worldwide are signatory to the ICoC (2013, ICoC website).
The Montreux Document and the ICoC initiative are both very promising developments in the private security sector. It shows that it is not only the human rights organisations that are worried about regulating PMSC’s activities, and that initiatives are being developed to ensure consistency in the use of PMSCs internationally. The sheer fact that these initiatives are developed through a multi-stakeholder approach makes them more promising and credible to make a difference in the future of the private security sector. If the ICoC monitoring system is able to develop to a high standard , one can expect the contractual mechanisms it uses to impose human-rights compliant standards directly on the PMSCs will be effective (regardless of where they are operating). However, PMSCs are not legally obligated to become a
signatory to the ICoC and thus private contractors who deliberately do not become part of this initiative cannot be legally hold to account through the mechanism it offers. It does offer states another filter when it comes to choosing a PMSC for outsourcing external security activities.
Nevertheless, promising developments have been made on this front too. The Bureau of Diplomatic Security (DS) which is part of the United States Department of State, have spoken of their anticipation to incorporate membership to the ICoC as a requirement in the bidding process for the new contracts in the Worldwide Protective Services (WPS) program, which in total is worth billions of US dollars (US Department of State, 2013). If more states are to follow this example, PMSCs that would want to be considered in bidding processes will be pushed towards membership to the ICoC. This would make the ICoC in turn a more serious and powerful control mechanism in the security sector, if states show a clear preference for ICoC aligned PMSCs.
3.2 Economic Opportunities
One of the more clear-cut advantages of outsourcing state security activities to PMSCs can be found with the economic opportunities it can offer. Economic arguments often weight
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compared to state-run prisons. However, this study does not show whether the quality of security provision in these prisons improved or not. Also, in addition to cost there is a
magnitude of other issues to consider such as quality, reliability and the uncertainty and risks created. Therefore, a critical approach is essential, as reducing costs does not always
necessarily mean an improvement of security provision. However, lower costs—especially in times where budget cuts are prevalent—do offer a state reason to investigate the possibility. Whether this cost-saving opportunity will continue to be cheaper when relied upon in the long term, remains a question. In the short term however, especially considering the dominance of budget cuts in the defence sector the past decades, outsourcing security activities to PMSCs are likely to offer an economically interesting opportunity for a states’ allocation of security budgets.
Outsourcing state security activities to PMSCs can be a cost saving policy. As military forces are expensive and the need for them is irregular while forces still continuously need to be trained and equipment and weapons kept up to date, a state could save most of these expenses by hiring forces only when necessary (Fredland, 2004, p. 212). Furthermore, contracting out under specific circumstances could save costs based on scale economies. A PMSC might have specific specialty forces and/or equipment available that a state does not possess. Simply buying this and training forces for these specialised conditions is time consuming and very expensive. Outsourcing these specific services and therefore ‘renting’ the specialty
temporarily may represent considerable cost savings.
Another way to approach the cost-efficiency arguments of outsourcing state security activities is through transactions-cost economics (TCE). Originally used to determine the boundaries of an organisation: whether to outsource activities or not, Williamson (1999) used this theory to consider why public bureaucracies contract out certain activities, while other activities remain within the organisation or business. As with private firms, TCE argues that public
bureaucracies contract out some of their services to reduce transaction costs inherent in markets, comparable to the Neoliberal theory discussed in chapter One. However, the
consideration towards cost effectiveness in contrast to business necessity with organisations is difficult to fully analyse.
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However, these characteristics should not be seen as mutually exclusive. Mainly focusing on sovereign transactions (these are transactions with necessary public authority, for which loyalty of the state is fundamental and with implications for the state’s security [Fredland, 2004, p. 209]), Williamson argues that public bureaucracy is the most efficient organisation of delivering sovereign transactions (Fredland, 2004, p. 209). However, while assessing
sovereign transactions, another critical hazard; often termed ‘probity’, is of particular importance. Probity is “the loyalty and rectitude with which the transaction is discharged” (Williamson, 1999). Probity processes are characterised by loyalty to the leader and the mission (policy goals for example), are long term and necessitate process integrity. Circumstances where these characteristics are influenced negatively—such as a situation where the contractor may be non-compliant with the leader’s objectives—will influence the efficiency and efficacy of the system (Fredland, 2004, p. 210).
Theoretically, this TCE construct can be applied to help explain why the cost-saving argument of outsourcing state security activities to PMSCs is such a prevalent one.
Contractual hazards, for the majority of outsourced security activities to PMSCs (non-combat military input) are low, when following the TCE theory, especially compared to combat military input activities. The uncertainty factor is also lower with non-combat activities such as training or logistical support (as these can be planned quite well without much risk that circumstances will change dramatically) than with combat activities, reducing the likelihood of high re-negotiation costs. As timeliness is likely to be of less importance with non-combat activities than for combat-activities, and because the amount of PMSCs offering non-combat services is much higher than PMSCs offering combat services, asset specificity forms a lower hazard. Finally, the probity factor is also lessened, “because it is the loyalty and
responsiveness of the national force being trained and supplied, not the loyalty and responsiveness of the trainers, that is of most importance” (Fredland, 2004, p. 214). This would mean that non-combat activities are arguably suitable for private provision on the basis that they are economically more interesting.
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influence over the PMSC’ contracts). And second, in such a way that executive members of the home state’s government may use the PMSC to undermine the state’s foreign policy (if one assumes that the government effectively controls the PMSC). In either of these two cases there exists a threat to the political processes and therefore the sovereignty of the home-state (Fredland, 2004, p. 213). For these reasons, it is reasonable to expect that developed, stable democracies—the type of state this thesis focuses on and that are the home states of many PMSCs—will ban or severely limit private contracts to engage in direct combat military input. Outsourcing non-combat security activities, however, does remain an attractive possibility for states, especially as outsourcing can be cost-saving.
3.3 Military and Operational Opportunities
Outsourcing external state security activities to PMSCs can also offer states military and operational opportunities. Due to budget cuts in the defence sector in the past decade(s), armed forces are not ‘on all fronts’ as able as they once were. Decreasing personnel and equipment have pushed some armed forces to specialise. While this is definitely a good development in some areas, a number of states may no longer be able to offer certain services or fulfil specific security tasks. In addition, they may not see any value in doing so with a lack of an immediate threat requiring them to do so. Being able to contract a PMSC to fill this gap temporarily offers a state flexibility and therefore a vast advantage operationally. Although outsourcing might be a serious opportunity for states to deal with smaller budgets, this seems only to be a short-term solution. On the long term, being dependent on contractors to provide security tasks and security related services would almost certainly make a state less flexible and the cost-efficiency argument might no longer be applicable either.
Another possible opportunity—both for states and for the operational ability of the United Nations—is more and deeper involvement of PMSCs in UN peace missions. The fundamental problem of the UN peace operations is one of demand and supply (Lehnardt, 2009, p. 206). The operational demand is simply much greater than the willingness of the member states to supply recourses (including security personnel) (Lehnardt, 2009, p. 206).
Unfortunately, the solution to this problem is not as clear-cut as merely filling this gap with contracted PMSCs. Resistance to the idea of PMSCs as the answer to the lack of sufficient deployable resources is first of all met by the UN Working Group on Mercenaries. In The
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analysing the shifting position of the UN towards mercenarism, Ghebali argues that two main barriers are in the way of the UN outsourcing parts of its peacekeeping operations to PMSCs. The first obstacle according to Ghebali is the lack of domestic and international legislation for PMSC regulation and accountability, “depriving them of the infamous label of mercenarism and recognizing their legitimacy” (2006, p. 226). Secondly, outsourcing of peacekeeping missions would go in against Article 42 of the Charter, giving the Security Council the monopoly of the legitimate use of force “for the maintenance of international peace and security” (Ghebali, 2006, p. 226).
Nevertheless, contracting out more security activities to PMSCs as part of peacekeeping missions will not be the solution to the problems the United Nations copes with. Neither is it the intention of this thesis to provide a solution. However, the possibility for a deeper
involvement of PMSCs in UN peace missions should be central to more research, as it could be an opportunity for state outsourcing extended security activities to PMSCs in the future.
To conclude, political and legal opportunities can be found in improving accountability and responsibility on the contract-level, the national level and the international level. On the contract level, where regulatory provisions should be made in the contract between state and PMSC and on the national level through constitutional regulation. The possibilities on the international level, however, seem the most promising. There are multi-stakeholder treaties developed that are particularly aimed at the private security sector. The Montreux Document and the International Code of Conduct for Private Security Service Providers (ICoC) are very promising examples of this. By addressing the gaps in international humanitarian law as it applies to PMSCs operating in areas of armed conflict, and designing principles and standards for the private security sector based on this humanitarian law, the initiatives offer a practical guide for states looking at outsourcing external security activities to PMSCs at the very least. The sheer fact that these initiatives are developed through a multi-stakeholder approach makes them more promising and credible to make a difference in the future of the private security sector.
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(TCE) theory explained in this chapter also suggests that especially non-combat services outsourced to PMSCs are economically interesting. Contractual hazards and the uncertainty factor are lower, timeliness is likely to be of less importance with non-combat activities than for combat-activities, and because the amount of PMSCs offering non-combat services is much higher than PMSCs offering combat services, asset specificity forms a lower hazard. However, outsourcing external security activities that involve PMSCs in direct combat activities are not necessarily economically interesting and have the ability to influence political processes in both home and host states. Therefore, contracting out combat tasks is not only very unpopular; it is also likely that an increasing amount of countries will forbid these types of commercial services.
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Conclusion
This thesis has attempted to clearly and critically outline the challenges and opportunities presented to stable democratic states when outsourcing external security activities to private military and security companies. As such, the main research question entailed: What are the
challenges and opportunities of state outsourcing of external security activities to PMSCs for stable democracies? Although the scale of this research was limited due to the lack of primary
engagement possible, this thesis has been able to provide a concise overview of challenges and opportunities and possibly a platform for further research into this topic through secondary data.
Privatisation
When a private entity partially or completely offers a service previously provided for by the state, this is generally known as the privatisation of public services. Privatisation gained prominence in the 1980s due to Neoliberal economic policy in the United Kingdom, privatising SOEs on a large scale. Many European countries soon followed and privatising public services was generally accepted as a norm in Europe in the 1990s and early 2000s. Motivations for states to privatise public services are diverse and complex. The most prominent motivations are (Neoliberal) ideology; cost savings; increasing efficiency; more flexibility due to less bureaucracy and less procedural requirements. However, one cannot also ignore situations where a state is forced to privatise due to lack of choice. This thesis identified nine types of privatisation: 1) establishing companies for the purpose of promoting business activities; 2) selling government assets; 3) construction of public infrastructure by private investors; 4) licensing and concessions; 5) privatisation through omission: constricted governmental activity; 6) provision of services for a fee; 7) voucher systems; 8) cooperation with third-sector bodies; and finally 9) outsourcing governmental activities to private contractors. Of which, the latter (9) was the focus of this research, as outsourcing state
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support, personal security, maintenance of military equipment, procurement, brokering of military equipment, explosive ordnance disposal, logistical support for military operations and bases, and intelligence collection and analysis. Types of security activities identified are military operations; peacekeeping operations; security sector reform; intelligence; and prison operations. As this thesis research primarily focussed on stable, democratic states and external security activities, prison operation was not included in the further analysis of challenges and opportunities as this is an internal security activity.
Challenges
Outsourcing state security activities to private military and security companies can provide serious challenges for states. Three main challenges have been identified: 1) Accountability and Responsibility, 2) Regulations and Oversight and 3) Conflicts of Interest.
For stable, democratic states the political and legal dimension appears to dominate the challenges regarding outsourcing security activities to private contractors. More specifically however, the questions around accountability and responsibility in case of human rights violations by PMSCs remain a challenge. Especially if regulation and oversight are not considered and planned appropriately by the state outsourcing the security activities, this can lead to injustice for many civilians.
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Regulation is particularly important for states outsourcing security activities to private
contractors, to prevent the abuse of trust, information and / or abuse of power. The challenges of regulation and oversight have common characteristics with the challenges of accountability and responsibility, as regulation and oversight also depends on the capabilities of the host-state and its judiciary. Although general international law does exist and in theory is applicable to PMSCs, effective regulation and oversight on the local, national and
international level is not yet fully capable of dealing with the ever complicated circumstances of contracted PMSCs.
Conflicts of interest are the main challenge when viewed from both economic and militaristic perspectives. As such, commercial and operational interests are prone to collide. A state should be aware that cutting costs and a profit maximisation driven motivation do not always coincide effectively with maximising security. More research is necessary to provide answers to how this collision of commercial and operational interests can be made less destructive.
Opportunities
Opportunities for states willing to outsource security activities to private military and security companies are rapidly developing; many of which appear promising to particular
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initiatives are developed through a multi-stakeholder approach makes them more promising and credible to make a difference in the future of the private security sector.
The second opportunity identified by this thesis is a short-term cost-saving opportunity due to the downsizing of allocated defence budgets and armed forces. For this reason, outsourcing state security activities to PMSCs can be a cost saving policy. Maintaining a standing military force is costly due to the standing commitments that go along with it. The irregular
requirement for their services and the continuous need to be trained and equipment and weapons kept up to date, means that a state could potentially save such an expense by hiring forces only when necessary.
Finally, military and operational opportunities offer more flexibility when necessary, by being able to fill capability gaps by contracting PMSCs based on need. This solution however, is only viable on the short-term, when a state needs specific troops/services for specific missions. It is unclear if this resolution is feasible on the long term, as dependency on contracting PMSCs and increasing costs will need to be taken into account. In this line, the possibility for deeper involvement of PMSCs in United Nations peace missions has been mentioned. Although a fundamental problem of these missions is one of demand and supply, the solution is not as clear cut as simply contracting PMSCs. More research is necessary into the possible deeper involvement of PMSCs in UN peace missions, and the critical capabilities they can enable.
