Potential Cost of Private Military Companies

The recent AEGIS video possibly showing inappropriate behaviour (allegations until proven) is further opening the eyes of the public on private military companies. One proported reason for the expanded use of these companies is  that private enterprise can provide services quicker and at lower costthan public enterprises is rooted in the American corporate experience.
However, the “low-cost” advantages of private military forces fail to
provide net cost savings when the entire engagement is included in the
calculus. Consider the value of military procurement when the two
options are private firms or public agencies and the private pitch is
high efficiency at a lower face value than public agencies.

Not included in this first level of analysis is the loyalty and trust of the public agency, for example the US Marine Corps and soldiers on kitchen duty. Additionally, dollar for dollar comparisons oversimplify long-term costs of private markets which fail to be perfectly competitive with hidden and substantial transactional costs. Hidden costs of the private-public partnership include higher finance costs (the government can always can borrow money at lower rates), vendor incentives to skimp on quality or adhere to the letter of the contract not the spirit, future public costs to return outsourced skills in-house, and transactional costs of writing, enforcing, and monitoring contracts. Most important is a lack of committed loyalty to the project or consequences of under-performing. Further, the private business may seek contractually-allowed alternatives when uncertainty is likely in any war situation when other outcomes are desired by the client. This, along with unpredictability of warfare, results in expensive cost-plus contracts.

The cost of returning the outsourced task to the public agency is actually two-fold. The obvious expense of retraining aside, once the private sector has the ability to conduct war operations (especially large scale war) without the state it is likely to seek clients and projects for its skills, a dangerous situation as the larger the private firm grows, the more influence it wields and the more its is able to shape policy and further inoculate themselves from oversight. Military equipment and training has little value in alternative civilian uses, limited their marketability and companies must seek revenue streams to make a profit and diplomatic costs of this new private ability are likely to be very high in the long run.

While at least one private military company now requires an oath of allegiance of its employees for United States’ paid missions, the company is still for-profit, still outside of military control, a vendor to the civilian leadership, and more frequently, not wholly or even partially infused with US Armed Forces trained and indoctrinated professional soldiers. Missions may now be performed in the name of the state but short-staffed not because of tactical concerns, but because of contractual limits and profit motives. The four Fallujah contractors killed in March 2004 allegedly died in part because their employer did not provide a fifth man for rear cover to save money, did not provide adequate situational intelligence, and did not allow the contractors to become familiar with the territory. The decision of a private military force to withdraw from a combat zone because of rising interest rates, leverage for contract negotiations, or loss of the contract may seriously damage and reduce military capacity with virtual impunity. Outsourcing to private parties shortens the decision making horizon into immediate “commercial concerns and lobbying rather than real gains to the nation and citizens” that encourage the use of companies that “lack verification and mandatory evaluation safeguards to deliver promised results”.

As the accountability tests illustrates, an additional cost is lack of accountability through the military command structure, military legal system, or in-country legal system of the private military force. Hidden costs from the accountability issue includes the impact on moral of public troops, lack of steadfastness in time of need, and public diplomacy and image problems resulting from conduct.

That being said, there are valuable uses of private military companies. They simply should not be used willy-nilly but for specific purposes, with oversight and monitoring. The opportunity for abuse is too substantial but their value is too great to ignore.

Puzzle Pieces: HAFZA…Somalia…TopCat….intent? Goal?

The TopCat situation becomes ever the more fascinating as each day passes. More information from the blogosphere surfaces as amateur and not so amateur investigative reporters seek out details. Most of the speculation is most likely wildly off the mark either negatively (almost like the Black Helicopters that hover overhead) or positively (the world will be saved by one merc at a time). Still other commentary is not. It is simply restatements of "facts" and facts, as a quick review of Technorati will show, including some information found in posts on this website.

Background information I've posted on oil may be foundational or it may not. Time will tell if it goes to the motive of the TopCat debacle. I've made other comments wondering if the contract and insertion of Western military people and equipment might be related to a inadvertent payload ejection back on 3 Feb 1991, in other words a Project Jennifer II. That may not be accurate as there are some reports, valid or not, the payload was already recovered by somebody else.

Continue reading “Puzzle Pieces: HAFZA…Somalia…TopCat….intent? Goal?

Accountability of Non-State Force

The issue of private military companies, private security companies, or private military firms brings up the question of accountability. This question can be asked in different dimensions: moral, legal, ethical, and command and control. This is a brief draft on the legal accountability of private military forces, divorced from any profit motives. It is my belief that private military forces fall into the same "loophole" (really a misnomer, it is an intentional gap) in regulation in which non-governmental forces "approved" by the international community, namely Blue Helmets, are also found.

Continue reading “Accountability of Non-State Force

UPDATE 2 on The $50m contract to fight piracy, a primer on privatized force

The recent $50m deal between TopCat Marine Security and Somalia has apparently opened some eyes to the world of private military companies. Two leading experts / authors in the field today, Deborah Avant (The Market for Force: The Consequences of Privatizing Security) and P.W. Singer (Corporate Warriors: The Rise of the Privatized Military Industry (Cornell Studies in Security Affairs)), refer to these private enterprises as Private Military Companies and Private Military Firms, respectively (there are other authors and resources I’d recommend, see my reading list on the right). What many people do not understand, not through lack of caring but through a cloud of understandable and encouraged ignorance, is the private sector has long been involved in providing private tactical military force. Personally, I prefer to use the phrase "private military force" to separate legal and moral accountability and utilization questions away from for-profit motives and from other modes as logistics, training, and assistance. However, in the TopCat Marine Security and Somalia deal, money and service are inextricably linked.

Continue reading “UPDATE 2 on The $50m contract to fight piracy, a primer on privatized force

Consequences of privatization of security .:. in practice in Iraq

The details are clear on this one. Any security change, as the article notes, is scary and likely to result in problems. However, when it is the Green Zone and elections are coming up, are corporate concerns more important? Would this change happen if these were public force (i.e. US Military) units instead of private force units? Probably not. The hand off would be delayed or there would be a significant overlap, something that is simply not possible with these private companies. From Green zone security switch causes anxiety:

Though the entrances and perimeters of the zone are
patrolled by Iraqi forces and some coalition troops, much of the
interior — including the embassies and the 12-story Council of
Ministers building — is guarded by a private security company.

British-based Global Strategies Group lost the contract for the job in an open bidding process and handed over responsibility on Tuesday to Triple Canopy Inc., a Virginia-based company formed after the 2003 Iraq war by Delta Force veterans.

This is one of the most significant items:    

concern is that Triple Canopy employees have been recruited mainly in
Latin America and speak little English. Global Strategies relies
heavily on British-trained Nepalese Gurkhas and Sri Lankans, a majority
of whom speak at least some English and often speak it well.

wonder if the Latin American soldiers were details in the bidding
process and if said process including evaluation criteria on the
military impact of this. Generally, the ability of Private Military
Companies to interact with regular military is ignored. In this case,
it is clear that is not possible.

This and similar contracts are approved by the civilian leadership,
in this case the State Department, and not the military leadership.

Blackwater Oath: a pledge to the sovereign or a play to look more American?

A long time ago the prevailing military doctrine dictated a strong officer corps to lead men into battle. With the rise of nationalism, improvements in tactics and technology, and increasing institutionalization (or bureaucratization) of the state, new ways ofpositioning the military within civil society appeared. Instrumental to this was an advanced officer corps reinforcing and promulgating the
hierarchy of the civil authority over the military through the
enshrinement of professionalism and ethics. Pledges to the state and/or nation and/or tribe were exceptionally important in the field of honorable men (and now women, of course).

Continue reading “Blackwater Oath: a pledge to the sovereign or a play to look more American?

Alternative Taxonomy for PMCs?

R. Stanton Scott revisits Thomas Adams article in Parameters (Summer 1999) with his categorization of PMCs, but there is more to the taxonomy than services offered. In his foundational article, Adams describes three types of mercenaries.

Heavily weighted, the term of "mercenary" has come to be associated with Executive Outcomes and Sandline. Mercenaries are typically cast as individualistic, Rambo soldiers of fortune. With large corporations such as NorthrupGrumman (Vinnell) and CSC (DynCorp) behind some of the more prolific private military companies, another, more fluid taxonomy was required than Adams’ three baskets.

P.W. Singer, in Corporate Warriors, uses a spear analogy to describe how far or near the firms are from "implementation" in combat. Singer maintains the three general types of Adams with his own terms: Military Provider Firms, Military Consultant Firms, and Military Support Firms. His "tip of the spear" typology allows for granular shifting along an axis towards or away service offerings.

The singular x-axis plotting is inadequate, however. It ignore a substantial descriptor of the firms that I believe is crucial when understanding their participation in the state vs non-state structure: location of headquarters.

The institutionalized system of state and non-state relationships is interconnected with limitations on the civilian leadership of the private military company. The location of the HQ grants or prohibits legal action by legalist states, thereby promoting various actions by the principals of the PMC.

For example, an operation such as Tim Spicer’s Sandline (now defunct), based off-shore from the United Kingdom, provided relief from potential legal actions. When investigating Sandline in the Sri Leone affair, found that even if they could take action against his corporation, they were limited because of its location. (See Private Military Companies: Options for Regulations). This holds true when attempting to put pressure on the HQ host government (see Annex B of previous).

On the y-axis would be three marks, just like the x-axis. These three would indicate the nature of the state and indicate the personality of the firm. The first mark would be a Western industrialized state such as the United States, Britain, Germany, etc. These states have deeply ingrained civil-military relationships (or civil-society-military, but that’s a different discussion) and institutionalized legal and financial systems (sticks and carrots).

The second bucket would be weak states without the distinct civil-military relations and more permiable institutions. These would include Belarus, Israel, or others. Israel is an interesting inclusion mostly because of its military with too much control of the political process and willingness to provide services to those who will pay (also known as the "biting the hand that feds syndrome").

The last mark would be HQ’s in the outlaw states such as Afghanistan or North Korea. This is not to say NK has a PMC, but such a "corporate" entity would be by definition not independent and would be the tool of the state. These would either be better classified as pirates or state

This two dimensional plotting lends itself to the accountability question, to be discussed soon.


What happens when you put two military forces within close proximity with each other, do not integrate C2, or otherwise share IFF resources? Is it called friendly fire when a US military force fires upon a US corporate force?

The Marine Corps Times, Boston.com, and NPR have raised the profile of an incident last month where US Marines halted a private military force comprised of US and Iraqi citizens…

Marines with Regimental Combat Team 8 detained 19 civilian contract
workers in Fallujah, Iraq, in late May after the contractors were seen
firing from their vehicles on Marine positions and Iraqi vehicles,
according to a Corps press release.

The Marine Corps times is the only news outlet I reviewd that included
the reference the governing rule of law for private security forces, Memorandum 17 issued by the Coalition Provisional Authority in its last days (also stored here since the CPA website may be offline after 30 June 2005).

Private security companies in Iraq are regulated under Memorandum 17, a rule enacted
under the Coalition Provisional Authority that requires them to
register with the Iraqi Ministry of Interior and Ministry of Trade and
be free of a criminal record or terrorist ties. The memorandum also
spells out a “code of conduct” that stipulates that when contractors
use their weapons, they must “fire only aimed shots, fire with due
regard to innocent bystanders [and] immediately report [the] incident
and request assistance.”

The company involved, Zapata Engineering, put out a statement on 9 June 2005 disagreeing with the Marine’s account of being fired upon or witnessing Zapata’s men firing from their vehicles.

On Saturday, May 28, 2005, Zapata Engeineering employees were engaged in a routine convoy in Northern Iraq. Marine Corps personnel in a nearby outpost intercepted the convoy team. Citing
security concerns, the Marines escorted the convoy without incident to
Camp Fallujah for questioning. Convoy personnel cooperated fully with
the Marines’ requests. Prior to this date, we had safely completed
hundreds of similar convoy missions in Iraq.

The fact Zapata Engineering was engaged on a US Army Corps of Engineers contract is important in how this could play out. Memo 17 requires registration and provides certain limitations ("primary role of PMC is deterrence") and constraints ("liable under applicable criminal and civil codes") but enforcement requires the backing of the US government.

The UK House of Commons issued a report in 2002 identifying the US as having the most
extensive regulatory regime, partially as a result of attempts to control weapons
technology and partially as a result of the American legalist tradition. The International Traffic in Arms Regulations (ITAR) of 1986 has a significantly high threshold and limited functional oversight. A functioning bilateral Status of Forces agreement (CPA’s Order 91, also available here, is a related problem here)  would be indicative of a functioning government capable of upholding its contractual obligations.

The US Military Extraterritorial Jurisdiction Act (MEJA) of 2000, along with the Uniform Code of Military Justice (UCMJ), apply to persons who are employed by or accompanying the armed forces outside the
United States or who are members of the armed forces and subject to UCMJ and
who are not a national or resident of the nation in which the crime occurred.
The punishment for committing the new crime is that which would have been
imposed under federal law had the crime been committed in the United States. However, Zapata’s forces were not accompanying US armed forces and MEJA has no teeth and has never been used.

There is always the humanitarian law bucket. The Alien Tort Claims Act (ATCA) of 1789 and the Torture Victims Protection Act (TVPA) of 1991 rely heavily on expensive prosecutions within the US. Zapata, if they were to press charges, would likely not have the financial resources or the strong case.

The most likely resolution of this situation is the US government threatening (with the potential to follow through) to terminate the contract with Zapata.

This incident is clearly a harbinger of things to come. What happens when things go more wrong? See a detailed timeline of the Belarus mercenaries conducting (possibly) extracurricular services for the Ivory Coast / Cote d’Ivorie November 2004. The retaliation by the French was severe and then promptly silenced by the same. This was likely due to their desire to limit foreign interest in their (re)colonial intervention.