The Modern Mercenary: Private Armies and What They Mean for World Order (26 page)

Comparing these cases shows two possible futures for the industry. The first is Liberia, where security actors operate in a mediated market for force, and the main market actors are military enterprisers that build rather than use military force. The second is Somalia, where a free market for force exists, and market actors are mercenaries that engage in contract warfare. Liberia is more secure than Somalia, implying that PMCs functioning as military enterprisers in a mediated market can have a positive security benefit, while PMCs operating in a free market will likely worsen security conditions.

Military enterprisers represent the median point between a free market for force versus one monopolized by states, since military enterprisers are a hybrid of both: military public-private partnerships. Just as military enterprisers such as Wallenstein were symptomatic of states’ gradual monopolization of force, it is not surprising that modern military enterprisers such as DynCorp suggest the current undoing of this monopoly, as the pendulum swings back to a premodern world order.

In a world where the private military industry will likely remain, a mediated market of military enterprisers is preferable to a free market of mercenaries, which can cause war and promote warlordism. However, military enterprisers are not without risks. As shown above, some military enterprisers unwittingly create a local free market for force, giving rise to a new breed of indigenous
condottieri
. Some of them are former subcontractors of larger PMCs, while others are entrepreneurial warlords who have adopted the private military model to win business from those needing security. Some are both. This new kind of mercenary PMC can plague the countryside as their medieval ancestors did.

The unraveling of the state’s monopoly of force has begun, not over centuries but over decades. The market for force’s trajectory is uncertain; it could develop into a mediated market, which is safer, or a free market, which is dangerous. The market’s future depends on what is done now.

The world may be at a crossroads with the private military industry. Left on autopilot, the industry may morph into a situation similar to medieval Italy’s perpetual contract war. However, other options exist. One response to this conundrum is categorically outlawing private military actors, although this seems unlikely, because the time for such sweeping action is past. A decade of war in Iraq and Afghanistan by the world’s superpower has cemented this multibillion-dollar industry onto the international landscape. Efforts to proscribe or heavily regulate big PMCs will simply drive them offshore, while the smaller ones, such as those native to Afghanistan, will go underground. Therefore, it is unlikely that banning the industry will accomplish much.

Another approach is self-regulation. Efforts already exist that aspire to do this, some with the support of the industry, since major PMCs do not wish their brand to be besmirched by roguish companies. One example is the ISOA’s voluntary code of conduct, which requires member companies to operate in a responsible manner akin to corporate social responsibility. Industry critics find such self-regulation encouraging but ultimately lacking the transparency and enforcement mechanisms needed to hold PMCs accountable.

An alternative solution would be to regulate the industry. In the United States, every single Defense Authorization Act passed by Congress since 2005 has contained efforts to manage this market. Yet Congress still has not passed comprehensive legislation regarding this industry, despite the multitude of congressional hearings, reports, and cries from civil society groups. Some legislation has been proposed, such as the “Stop Outsourcing Security Act” by Representative Jan Schakowsky (Democrat, Illinois), but these efforts have not mustered enough votes to become law. One reason for this, as demonstrated earlier, is the utility of on-demand force, making PMCs an attractive option even for a military superpower, although the near-term benefits of PMCs may be eclipsed by their long-term liabilities.

Attempts to apply existing laws to the industry have failed because of problems of extraterritorial jurisdiction. The Special Maritime and Territorial Jurisdiction Act (SMTJ) and the Patriot Act both contain provisions that allow the application of federal law to crimes committed by contractors overseas in areas reserved exclusively for the United States’ use. This effectively gives the United States extraterritorial jurisdiction to try crimes that are committed by or against American citizens within specific US properties or territories abroad, such as military bases, consulates, and embassies. However, this does not apply to war zones. Can occupied territories in foreign lands truly be called US property? The answer is no, as demonstrated by the so-called Triple Canopy case. On July 8, 2006, PMC employee Jacob Washbourne shot multiple rounds into two
Iraqi civilian cars, unprovoked, according to witnesses. Washbourne was terminated from the company but never faced criminal charges.
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Foreign war zones are not US territory, limiting the efficacy of the SMTJ and the Patriot Act as tools for PMC transparency and accountability.

Others have tried to use the Military Extraterritorial Jurisdiction Act (MEJA) to impose PMC accountability. The MEJA was passed in 2000 in response to crimes committed by civilians accompanying the military overseas. It establishes a legal framework for trying contractors abroad in US federal courts for felonies that are punishable by more than one year in prison. But the MEJA is not robust enough to enforce accountability and has only been used a few times since 2000, all for non-PMC-related issues.

Another attempt at stopgap accountability is applying military law, known as the Uniform Code of Military Justice (UCMJ), to PMC personnel. While such ideas brief well in Washington, D.C. they do not work in practice. The UCMJ has no jurisdiction over civilians and is not fully compatible with civilian code, leaving lawyers bewildered about how it applies to multinational corporations. For example, can a CEO be thrown into the brig for “conduct unbecoming an officer and a gentleman” (Article 133 of the UCMJ)? What is required is new legislation—both domestic and international—to regulate this industry. Yet in ten years of war, the United States has not taken such action, and the chances of a timely Geneva Protocol that deals with this issue seem slim.

International efforts are equally frustrated. In 2005, the United Nations established a working group on the use of mercenaries to “monitor and study the effects of the activities of private companies … on the enjoyment of human rights.”
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After five years, it concluded that there is a regulatory legal vacuum covering the activities of the industry. The group recommended to the UN Human Rights Council and the General Assembly text for a possible international convention that regulates private military force. It also promotes the Westphalian notion that only states should have the monopoly of force and cannot outsource this privilege to the private sector. Furthermore, it envisaged the development of a national regime of licensing, regulation, and oversight of the industry on a worldwide scale. States would be compelled to collect and provide this information to the United Nations, which would maintain an international register of private military actors.
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However, the proposal has received a cool reception from member states. In another sign of neomedievalism, many find a binding instrument with regulatory and oversight mechanisms regarding the use of force premature and an encroachment on their sovereignty.

In 2006, Switzerland and the International Committee of the Red Cross launched the “Swiss Initiative” to harmonize industry practices with human rights norms. The process was consultative in nature and included governments, PMCs, and civil society groups. The governments of the United States
and the United Kingdom underwrote this initiative, which is important, since they employed most of the industry at the time. By 2008, this effort had produced a common understanding regarding the industry’s human rights obligations in war zones, which was ratified in Montreux, Switzerland, and known as the Montreux Document. There were 58 original signatory companies, and as of September 1, 2013, there were 708.
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A parallel effort of the Swiss Initiative is the International Code of Conduct for Private Security Service Providers, which articulates standards for the industry to ensure compliance with international law.

However, the efficacy of the Montreux Document and the International Code of Conduct is questionable, because they are voluntary agreements, not a binding international treaty. Transparency is largely dependent on companies’ self-reporting of problems, which is unlikely to happen, because it is bad for business, and enforcement mechanisms are weak. Also, these agreements are limited to trigger-pulling PMCs, while trainers, such as DynCorp in Liberia, and security support companies are excluded. Missing and urgently needed are oversight tools that move beyond the outmoded Westphalian norms inherent in international law such as the Montreux Document and recognize the neomedieval nature of the early twenty-first century.

The private military industry is not going away, and therefore actions should be taken to harness the good while limiting the bad effects it produces. Instead of relying on weak laws, aspirational codes of conduct, or the forlorn hope of a new Geneva Protocol that deals with these new armed actors, a more practical solution involves fostering a mediated market for force that shuns mercenaries and works only with qualified military enterprisers in public-private partnerships. This would prevent devolution to a free market. A market approach instead of a regulatory one may prove more effective, because in a neomedieval world, no single group of actors, such as states, can collectively impose their will through international law, and consequentially, other methods, like market approaches, must be sought to control this dangerous industry.

A market approach seeks to incentivize desirable practices by making them profitable. A hefty consumer with market power, such as the United States, can drive the market to produce good behavior, or at least acceptable conduct, by manipulating the industry’s own profit motive. Market power is the amount of influence that a firm, or in this case a country, has on the industry in which it operates. Firms with market power are said to be “price makers,” as they are able to set the price for a good or service while maintaining market share.

The logic is as compelling as it is simple. A customer with market power sets performance standards for the industry, holds companies accountable to those standards, and maintains an index of firms based on performance. Companies that excel get rehired, while those that underperform get replaced, encouraging best practices in the industry through what economist Adam Smith called the “invisible hand” of the marketplace, a metaphor describing the self-regulating behavior of a free market when good behavior is rewarded and bad is expelled.

In the case of the private military industry, the United States had market power, since it was the only significant buyer in the marketplace. This monopsony meant that the country could reasonably dictate prices and standards to PMCs and hold them accountable. Unfortunately, it failed to do so, despite the fact that half its force structure in Iraq and Afghanistan was contracted. There were no unifying performance standards, methods of accountability differed depending on which government office issued the contract, contracts varied widely among companies, they were inconsistently enforced, and there was no government index of company performance. Contracts were frequently renewed for incumbent companies regardless of their competence, as documented in the Gansler report, the Commission on Wartime Contracting, the Special Inspector General for Iraq Reconstruction, the Special Inspector General for Afghanistan Reconstruction, and other government inquiries. Had this megaconsumer used its market power to shape professional norms, set performance standards, and reward best practices when the industry was in its infancy, then things might look very different today. Instead, the industry grew in a haphazard way.

The United Nations may now have the opportunity to shape industry best practices if it decides to outsource some of its peacekeeping. Peacekeeping could become the largest market for private military force in the near future, giving the United Nations market power. The organization will have the opportunity to choose PMC winners and losers for peacekeeping missions, allowing it to determine standards and drive industry behavior, as only a large consumer can do.

This does not suggest that peacekeeping should go onto the auction block or be wholly outsourced to the private sector. Just like “smart sanctions,” the world needs “smart privatized peacekeeping” that addresses issues of capability and accountability. To accomplish this, the United Nations must establish a licensing and registration regime that all industry members must observe in order to prequalify for contracts with the organization. This would entail clear standards and policies regulating all industry activities, plus transparent mechanisms of oversight and accountability. As a minimum, this regime should include the following elements: registration criteria, ethical code of conduct, employee vetting standards, mechanisms of transparency and accountability, permissible clients (e.g., sanctioned by the UN Security Council), training and safety standards, contractual standards, and compliance enforcement mechanisms such as audits.
Contract instruments must be in place to ensure swift deployment of PMCs, should a humanitarian catastrophe arise. It would be impermissible to lose a key advantage of PMCs’ rapid response and surge capacity to bureaucratic dithering.

The potential benefits that this industry could provide to the United Nations are substantial. Military enterprisers could augment thinning UN peacekeeping forces, either ad hoc or on a more permanent basis. More controversially, strong PMCs with force projection capabilities could also deploy rapidly to arrest tragic situations like genocide, as Executive Outcomes possibly could have done in Rwanda. These PMCs could establish safe havens for civilians and buy precious time for the United Nations to muster a large peacekeeping force from donor countries, which often takes weeks or months. The industry could also provide the United Nations with a quasi-permanent or “on call” military capacity originally envisaged in its inception.