PMSCs and the Regulatory Environment in Iraq Post-2011

4 Jun 2015

How have tighter government regulations and corporate demands affected the private military and security companies (PMSCs) operating in Iraq? Jason Ireland and Caroline Varin believe that the modus operandi of these companies has changed from “proactive to reactive” – i.e., they have become less effective.

This is an excerpt of the external pageoriginal article, published in external pageVolume 9, Issue 1 (2015) of the external pageCentral European Journal of International and Security Studies (CEJISS).

Introduction

The operating environment for private military and security companies (PMSCs) in Iraq has changed dramatically since 2003. This turning point can be traced to the handover of security and the departure of the United States Forces in Iraq (USFI) in December 2011. The government of Iraq subsequently began regulating foreign PMSCs under Iraqi law, inevitably bringing up the costs of operations and reducing the margins of profit of these companies. In addition, Western commercial interests have transformed the culture of private security companies by setting operating standards that are restrictive considering the security environment in Iraq.

The combination of new security regulations imposed by the Iraqi government, and the corporate requirements of multinational clients, has affected how PMSCs carry out security services and bid for new business opportunities. An emphasis on the health and safety of local and foreign contractors and a high requirement for transparency and contract compliance render decision-making bureaucratic, which can be counter-productive in a threatening security environment. This is particularly salient considering the rising threat of the Islamic State (IS) across the country.

Personnel who have experienced the change in the security of the country, from the occupation by USFI to its current situation in 2014, observe that the modus operandi of contractors has gone from one of “proactive to reactive,” due to a change in threat levels, a more hostile host government and a shift in clients who demand a softer, more commercialised and ultimately more corporate approach. These measures may heighten the risk that a private security company will not be able to respond in a robust and competent manner to a threat, as it may have done in the past.

This work is organised as follows: it first outlines the methodology underlining the study. Next, it analyses the driving factors behind the changes in the private military and security industry, highlighting the role of clients, the demands made by the Iraqi government, and the shifting security market within the country. It assesses how these forces have transformed the identity of contractors, emphasising the role of the International Code of Conduct (ICoC) and the Montreux document. Finally, it considers the options for the industry in the near future.

Methodology

The purpose of this research is to investigate the changes in corporate values, practices and identities of private security and military companies (PMSCs) operating in Iraq between 2003 and 2014. Iraq was the playground where PMSCs where first legitimised, and arguably institutionalised, and therefore serves as an excellent study to trace the evolution of the industry countrywide and on a global scale. Despite a growing body of literature examining the experiences of the private security industry over the last decade,[1]1 there has been limited focus on the period since the handover to the Iraqi government, post-2011. Furthermore, there is a short supply of reliable qualitative data to evaluate the change in practices, values and identities of contractors over the last five years. This is largely due to the difficulties of carrying out primary research in Iraq at this time, and the sensitive nature of the security industry.

This project specifically targets armed contractors and PMSCs working in Iraq, and does not deal with unarmed support contractors due to the very different nature of the latter’s work. There are approximately ‘14,000 contractors, including 5,500 security guards,’ currently operating in Iraq,[2] down from a height of 48,000 in 2007.[3]3 Until 2011, government agencies were the primary clients for the security industry, whereas the trend has shifted towards the private sector, with large oil and gas companies now providing the bulk of security contracts in 2014. This work aims to verify whether the shift in clientele has also affected the contractual conditions and corporate value system of the hired security companies.

This study is conducted through an empirically based survey of security contractors in Iraq and civilian employees in Great Britain. A nine-month long immersion in Iraq enabled privileged access for researchers to conduct over thirty interviews with contractors during the time of employment by a PMSC. These semi-structured interviews targeted employees who had experienced the shift in security contracting before and after the Status of Forces Agreement (SOFA) in 2009, thereby lending a long-term perspective on how the security industry may have changed in Iraq. Interviewees held a variety of roles, ranging from Team Leader up to and including Director of Operations, thus offering a significant scope of experiences, opinions and exposures in their assessment of industry changes.

In addition, informal interviews were carried out with over a dozen employees of oil and gas companies, the primary clients of the aforementioned security contractors. This survey was undertaken with the objective of testing and contrasting the perceptions of the industry from both ends of the supply-and-demand chain. The interviews targeted staff with an engineering or project support background, several of whom were responsible for health, safety and the environment (HSE). The latter were particularly relevant to evaluate the requirements and efficacy of the health and safety regulations recently imposed on security companies, and in assessing whether this may have had an impact on the effectiveness of the services being carried out by the contractors.

Finally, recognising that the market for security is changing both on the supply and demand sides, interviews were carried out with contractors with either experience working for some of the 40+ Iraqi security companies, or who had provided security to non-Western clients, including Chinese engineering and construction companies. These interviews offered a novel perspective into the inner workings of locally owned PMSCs. All persons interviewed gave full consent for academic use of the data provided. However, many spoke under conditions of anonymity, which explains the omission of specific references to either people or events that could identify and compromise a survey participant.

Driving Change

According to data supplied by interviews of contractors in Iraq and in the United Kingdom, the private security industry has irrevocably changed since the government of Iraq has taken over the governance and rule of law of the country. This change has largely been driven by three factors:

First, the client base for private security has shifted. Government agencies, who were previously the principle client for the security industry, have shrunk since the height of the Iraqi war. Today, oil and gas companies make up the bulk of the demand for the services of PMSCs in Iraq. These corporations are generally accountable to a board of directors and to shareholders, and are concerned about reputational damage to their brand. This affects their requirements regarding the image and conduct of the private security companies they hire, thereby impacting, among other matters, the practices of PMSCs vis-à-vis the health and security of their own employees. The corporate values of the clients are now driving the practices of the industry.

Second, the transfer of power to the government of Iraq has transformed the regulatory environment. Red tape, bureaucratic complications, changing laws and corruption have contributed to a rise in operating costs and often cause time delays in carrying out operations. This has arguably reduced the effectiveness of certain private security companies which are dependent on the whims of (and their relations with) Iraqi government officials. Furthermore, the uncertain administrative environment has affected the employment stability of contractors.

Finally, market forces have reshaped the private security industry. Contractors with a background in the British and US armies are less in demand for now as salaries have shrunk along with the margins of profit of these companies. The rise of Iraqi-owned private security companies, and allegedly Chinese companies, has also changed the operating culture of PMSCs in the country.

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Endnotes

 [1] M. Dunigan (2010), Considerations for the Use of Private Security Contractors in Future US Military Deployments, Santa Monica, CA: RAND; Paul Higate (2012), ‘Cowboys and Professionals: The Politics of Identity Work in the Private and Military Security Company,’ Millennium - Journal of International Studies, 40, pp. 321-341; E. Krahmann (2010), States, Citizens and the Privatization of Security, New York: Cambridge UP.

[2] Anna Fifield (2013), ‘Contractors Reap $138bn from Iraq War,’ Financial Times, 18 March 2013.

[3] Jeremy Scahill (2007), Blackwater : The Rise of the World’s Most Powerful Mercenary Army, New York, NY: Nation Books.

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