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IA-Forum Interview: James Cockayne

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International Affairs Forum: You have a new book, ‘Beyond Market Forces: Regulating the Global Security Industry.’ How do you define private military and security firms and how does your description differ from other definitions of the industry out there?

James Cockayne: The approach that I’ve taken in my work in the last few years, after working with a lot of academics and government people and people from the industry, is to think about the industry in terms of its potential use of lethal force or related services. For example, services that train people in that use of force or that provide very closely associated services like the intelligence that’s needed to target people for that kind of use of force. Many people, particularly in the United States, take a broader approach to the industry arguing, for example, that logistics contractors face some of the same kinds of challenges and regulatory conundrums that the kinds of companies that I’m talking about face. So the International Peace Operations Association (IPOA), an industry association based in Washington D.C., includes a number of logistics contractors and even medical support service providers in their membership. At the other end of the spectrum, some people argue that we shouldn’t focus just on the provision of lethal force, the real concern is the companies that provide military and quasi-military support services rather than lumping military and security services together, because obviously those involve quite different types of activities often provided by quite different types of people in quite different environments.


IA-Forum: The second question is on the global security industry. How do you define that?

Mr. Cockayne: I focus on the term “global” to make the point that although the newspaper headlines are created by Western-based companies like Blackwater, a lot of what is actually going on in places like Iraq, Afghanistan and throughout Africa, is security services provided on a commercial basis by local companies. Many of them have a close relationship with these companies that are based in the global north, based in the OECD (Organization for Economic Cooperation and Development), but the nature of these local companies is often quite different. They have different management cultures and business structures. The nature of their connections to local governments and military is often very important in thinking about the impact of their services are going to have on the ground. In Afghanistan, for example, a lot of the Western contractors subcontract to local militias that have been reorganized as private security companies. By subcontracting them, they’re having quite a specific impact on the balance of power in a local community. So I use the term “global” specifically to make the point that there are all these interconnected layers of different forms of service provision and when we’re thinking about regulating that industry, we need to make sure that we don’t just focus on what’s going on in London or Washington D.C. but also think about the impacts on the ground in the various countries where these services are actually being provided.


IA-Forum: Let me follow up regarding Afghanistan. Over 39 private military companies operate in Afghanistan now. On June 29th there was a battle in Kandahar that killed the Afghan Provincial Police Chief and six civilians. Apparently, Afghan private security personnel working for coalition forces were trying to free a fellow contractor from jail. My understanding is that ultimately 41 security contractors were arrested out of that incident. Relief Net reports that “up to 3,000 former Afghan militia fighters are directly employed by the U.S. military in Operation Enduring Freedom [OEF].” It also reports the coalition forces employ demobilized local militia men, as you say, to provide security. At the same time, reports are coming out that more and more Afghans are angered by the use of private security. Where does regulation come in with private security in Afghanistan as ISAF (International Security Assistance Force) beefs up its presence there?

Mr. Cockayne: It’s a great question and it’s a disturbing report, but I think we also have to be very careful about the labels that we use and how they condition our response. In that report you mentioned that there are something like 3,000 former Afghan militia men employed through private security companies. It’s hard to pin down the actual numbers. We could just as easily say that there are tens of thousands of former United States military employed in private security companies around the world.

The point that I’m trying to make is that all of these individuals have, as any individual does, multiple social networks that they’re embedded in and therefore multiple potentially conflicting loyalties. When you deal with these people on a commercial basis that may not be where their ultimate loyalty lies. When push comes to shove, as it does in a place like Afghanistan, ultimately it may be other loyalties that trump the commercial incentives that a contract offers. So there’s only so far that we can go with regulating these relationships through the tool of the contract. This is true particularly in a place like Afghanistan where contracts are not necessarily enforceable in the same way that Westerners are used to them being in a place where courts are highly effective, efficient, and transparent and operate according to universally applicable criteria rather than ties of kinship or indeed bribes. So the regulation of this commercial industry in Afghanistan is really quite important for thinking about the relationship between the use of the force in that country and the development of different social groups in the country. We know the trouble that Western forces had in Iraq as a result of relying heavily on commercially organized armed groups and how that led to them unwittingly channeling money and arms, in particular, to certain sectarian groups that they might not otherwise have chosen to channel money and arms to. The same result may easily occur and may already be occurring in parts of Afghanistan. Often what presents commercially as a private security company is in fact staffed through a particular strongman’s access to a certain labor pool, for example, a particular ethnic group or a local community. Giving contracts through those groups may give them increased economic, military and social or even political power within a particular local area. So it’s very important to think about the medium and long-term impact that dealing with those types of groups has and to factor that in to the procurement decisions that clients make in Afghanistan.

Now the complication there, of course, is that it’s ‘clients’ plural. It’s not just a question of the United States military, even if that was a monolith (which it’s not), there are many different coalition partners in the country. There are many private actors hiring private security companies, NGOs, investment partners and, of course, then it’s the Afghan government itself who will make procurement decisions in its own way. Now the encouraging thing is that Afghanistan is comparatively advanced in thinking through this issue at a legislative level compared to some other countries. It doesn’t yet have a law on the books for regulating its domestic private security industry, but it does have an administrative decree that one of the ministries has adopted. That decree has gone some distance to picking up international standards, which is an encouraging sign, but there’s a long way to go yet.


IA-Forum: When did that decree go into effect, and who initiated it?

Mr. Cockayne: It’s been on the books for a few months now, and it came really as a result of some interministerial rivalry. There are a number of different ministries that might potentially seek to regulate this industry in Afghanistan. Different ministries in Afghanistan are linked to different political and some would argue ethnic and geographical factions. Controlling this industry obviously is an important political and military opportunity and also a revenue-raising opportunity for these different ministries. I hear different reports about the extent to which it’s actually honored on the ground. So it’s really just a first step in starting a larger legislative dialogue in Afghanistan to develop a system that is widely respected and effective.


IA-Forum: In Iraq, ultimately, the U.S. Departments of Defense and State came to a formal understanding in December 2007 regarding their use and coordination of private security. As you know, this did not apply to non-governmental private security contractors. Do you think that’s a template that could transfer in any way to Afghanistan?

Mr. Cockayne: I think there are important lessons from Iraq for us in Afghanistan. The various actors in Afghanistan have been thinking about those for some time. Both Iraq and Afghanistan were involved in the development of the Montreux Document, which is an international document that sets out some good practices in this area. But there are also very significant differences, one of them being the very active presence of a large number of coalition and NATO forces on the ground, some of which take quite a different approach to private security companies as does the United States military. Indigenous solutions, reflected in Afghan legislation, are probably more likely to provide a lasting solution than a treaty-based or bilaterally-negotiated solution as we saw in Iraq.


IA-Forum: Let me ask you about the ‘Montreux Document.’ You were involved in helping produce this and it was finalized in September of 2008. Can you briefly describe what is it and why 17 states endorsed it?

Mr. Cockayne: The ‘Montreux Document’ does two things. First of all, it sets out pertinent legal obligations for states that already exist. In other words, what are states’ existing legal obligations when it comes to dealing with private military and security companies? Then in the second part of the document, it sets out good practices for discharging those legal obligations. So this is administrative practices dealing with things like vetting, training, how those companies should be identified on operations, accountability arrangements when something goes wrong, reporting arrangements when firearms are discharged – those kinds of things. There are 27 legal obligations and 73 “good practices” for a nice round total of 100 clauses ultimately. It was endorsed in September 2008 by 17 states, including the United States, the United Kingdom, Australia, Afghanistan, China, Iraq, and Sierra Leone. What is at the heart of the document that the idea is that this is a humanitarian document. It was developed by the Swiss Government in cooperation with the International Committee of the Red Cross (ICRC). The point is specifically not to legitimize or delegitimize the industry and its use. The point was to develop a document that recognized that at least for the moment it exists and to try and mitigate the negative impact on human rights and on humanitarian law that the industry might have. This is why it was developed by the Swiss and the ICRC. It follows in that respect the traditional approach of international humanitarian law to not seek to legitimize the use of force but to mitigate its humanitarian pact.


IA-Forum: Given that the ‘Montreux Document’ is not legally binding nor does it create new obligations under international law, how do states proceed? In other words, what’s the road map for regulation by each state and how much progress do you think has been made in a year on that issue?

Mr. Cockayne: I think quite a bit of progress has been made in a year. We are now up to 31 states that have formally indicated they support the document, which is quite an advance in less than a year. It’s really up to each state how it seeks to implement the standards that are in the document into its own domestic legislative, regulatory and contractual arrangements. What was important about the document is it lays down a baseline of quite detailed nitty-gritty standards about how to deal with these companies, and those standards provide a common frame of reference for a whole range of different kinds of regulatory arrangements, whether it’s the standards that go into contracts between governments and these companies, the companies own internal codes of conduct, its contracts between private clients and these companies or so on and so forth. There is also strong anecdotal evidence that the Montreux Document is gaining traction. I’ll give you three quick examples. The first is that the United States Congress has been considering a number of different bills in recent months to strengthen regulation of the U.S. industry and the U. S. Department of Defense recently released an interim final rule, which is a form of regulation for the United States governmental agencies dealing with these companies. And in both cases, the various bills that have been considered by Congress and this interim final rule, there are specific aspects of the language in those documents that bears strong resemblance to the language you find in the Montreux Document. In some of the bills, it has been picked up word for word and used in the U.S. language.

Another example is that the United Kingdom is currently conducting a policy review of how it regulates the United Kingdom-based aspects of this industry, and it has specifically in its public documents stated that the Montreux Document is the starting point for its approach to implementation and enforcement of standards in and by that industry. Thirdly, a slightly more personal anecdote: I was sitting in my office a couple of months ago when an old friend, who’s now an ambassador of an unnamed country in Pakistan, rang me up to give me a hard time because that country had been in the process of hiring a private security company in Pakistan to provide close protection to its diplomats, and it had to essentially, I was told, start the whole hiring process all over again because their legal department had said, “hang on, you need to follow this thing called Montreux Document.” So I asked this person, “well, what did you think; what was the net outcome of following that process?” They said, “look, we ended up hiring the same company that we thought we were going to hire anyway, but the due diligence that we forced to conduct as a result actually gave us a much higher degree of confidence about the nature of the services this company was providing, its background history, and the types of individuals it was likely to hire and deploy on the ground. So we ended up with a much higher degree of confidence about the contract than we would otherwise have had.” And that’s exactly how this document is supposed to work. So that was very encouraging to hear.


IA-Forum: So the ‘Montreux Document’ sets out to establish “good practices” in terms of vetting and training contractors, acquisition of weapons, visas, identification markers of personnel and vehicles, and reparations to victims of misconduct. Why only “good” practices and not “best” practices or even recommendations?

Mr. Cockayne: Right. That is simply a result of three years of hard diplomatic negotiation. There were some countries that felt that it was premature in this area to recommend best practices simply because they felt that there wasn’t sufficient knowledge and understanding of the impact of a sufficient range of practices to be able to identify certain practices as best practices. Also, it was felt that given the legislative and constitutional tradition of the range of states that was involved in the discussions, it was inappropriate to identify certain types of regulatory approaches as best or even better. The diplomatic solution was to try to identify these practices as good practices rather than best practices.


IA-Forum: The ‘Montreux Document’ focuses on states’ responsibilities. What about the non-governmental organizations or private corporations that hire private military or security contractors, what’s the regulatory regime for them?

Mr. Cockayne: The regulatory regime for them is essentially the existing law that they’re already subject to wherever they’re operating or headquartered, which is to say incredibly patchy, often extremely weak on this issue. There’s nothing stopping any of them from picking up some of the standards in the Montreux Document and dropping them into their own contractual arrangements with these companies, but to be frank, we haven’t seen a lot of that happening yet. Many of the humanitarian NGOs in particular are increasingly aware of the regulatory complexity of dealing with these companies, and the potential reputational risks that they carry by dealing with them without sufficiently strong contractual arrangements in place. So we see a strong discussion emerging now in that community of how to deal with these companies, and it’s only a matter of time until we see standards like those in the Montreux Document finding their way into those relationships. In terms though of the private companies that hire these types of security providers, that discussion is at an even earlier stage than it is in the humanitarian sector. There is great potential for certain groups of companies, particularly I would argue in the extractive industry, that have long-standing relationships with private security providers to make quite an impact on the way the industry carries out its business if they are prepared to consider incorporating some of these standards into their procurement decision-making.


IA-Forum: The largest U.S. association of private military and security firms, the IPOA, has enthusiastically endorses the Montreux Document. However, its President, Doug Brooks, has said that standards in it would require governmental involvement and leadership, but isn’t that what the contract between the government and the private firm is for?

Mr. Cockayne: It’s exactly what the contract is for, but we also know that the mere contract is not enough to bring a level playing field to the market essentially. There are various reasons for that. One of them is simply that the United States government’s contract oversight workforce is vastly depleted. That’s been well documented by the Government Accountability Office (GAO) amongst other sources. So relying on the contract is not the full solution there. Another important aspect of that is that there are strong reasons why those contractual relationships are kept out of the public domain, reasons of national security and commercial confidentiality. Ultimately creating a level playing field for the market will require putting in place effective oversight that operates with greater transparency and that means creating some kind of marketplace oversight mechanism that has a more public face, whether through the creation of the government regulator or through public-private partnership between the government and industry association to standardize the regulatory arrangements for the market as a whole. The other thing, of course, is that in the United States most of the discussion is focused very much on this strong relationship between the government and the client and the industry as a provider. In many other parts of the world, it’s not governments that are the major client. Private companies are the major client. So there the government’s role as a regulator is not to fashion the contract but to set certain baseline standards in the market that any private contract must adhere to.

For example, in the United Kingdom, 90% of revenues are thought to come in this industry, not from governmental sources but from private clients. This is why I mentioned extractive companies because they are one of the major sources of private revenues for the industry around the world. So although in their contractual relationships, extractive industries could have quite an impact on the way that private security and the global security industry does its business, it will really be incumbent on government to create incentives in the marketplace by regulating the industry before we can necessarily expect to see private clients like the extractive industry to make a move in that direction.


IA-Forum: You discuss “smart incentives” in your book. What are they and how would they apply to the global security industry?

Mr. Cockayne: “Smart incentives” – this means thinking about what the economic and other incentives of the various private actors involved in this industry are and trying to align them with the public interest. The problem right now is that the costs of the industry are easily externalized by the industry because it operates far away from people like you and me. It operates in war zones where the true costs of their activities are hard to pin down and where the victims of negative behavior (for example, people driving along the street who may be sprayed with bullets by trigger-happy operators) have little access to remedy so they can’t reimpose the true cost of bad behavior on the people committing that bad behavior. This is a classic problem of the externalization of costs in an industry. The only way that you can insure that the industry operates efficiently is to make sure that the people who bear the costs, the true costs of bad behavior, are able to push those costs back onto the people who are committing that behavior in the first place. There’s really two main things I guess we can do. The first is to link market access to good behavior in the first place. There are various ways that this is done in a number of other global industries. It might involve, for example, certification of specific companies against globally-agreed standards if those companies want to contract with governments or with private actors. Now that might seem a long way away, but with the ‘Montreux Document,’ we have what looks like a prototype for the types of the standards that they would have to abide by. There’s nothing stopping even private clients saying, “we simply won’t hire a company that doesn’t effectively live up to the standards of conduct that are implied by the ‘Montreux Document.’” They could do that tomorrow if they wanted to.

The second kind of smart incentive is actually perhaps surprisingly linked to grievance mechanisms, and that means giving the people who are affected by the activities of these companies an opportunity to have their grievances heard so that the companies can be exposed through costs of their bad behavior. Now this is something frankly that a number of companies themselves are calling for because they appreciate that the sustainability of their industry going forward depends on them being able to demonstrate that they are offering a safe and reliable product and not a product that in fact leads to increased insecurity rather than increased security.


IA-Forum: In Operation Iraqi Freedom the set of rules and requirements that prime contractors operated under weren’t often passed onto their subcontractors. This was a major loophole in the use of contractors in Iraq where there were many subcontractors. Does the ‘Montreux Document’ address this?

Mr. Cockayne: It does. The ‘Montreux Document’ requires essentially that subcontractors be held to the same standards as contractors. Now, the problem is always going to be one of the enforcement. There have been various regulations or rules imposed by the U. S. Department of Defense that do require what is called “flow on” of the application of rules from the prime contractor to subcontractors, but the challenge is always ensuring that that actually occurs on the ground given the places where these guys operate. And until there are improved oversight mechanisms in place, that will remain a problem.


IA-Forum: Why do you think that strong democratic states such as the United States and the U.K. employ private military actors? It seems counterintuitive.

Mr. Cockayne: That’s a very important and significant question. Much of the academic and policy analysis community argues that the simple reason for that is that by moving the provision of base services into the private sector government executives are able to escape certain limitations that they might otherwise face. They can, for example, circumvent troop caps that might be imposed by Congress. They can escape some of the domestic media scrutiny that might be forthcoming if military personnel were used for the same jobs. So in a way they are escaping some of the forms of democratic oversight that might otherwise constrain their behavior. A second line of argument is simply that it’s cheaper to do these activities through the private sector, that they can deliver better, more reliable outcomes for less money. I think that line of argument has lost some traction in recent years simply because it’s increasingly appreciated that the poor contractual oversight that has been in place, particularly in the United States for the last few years, has actually created opportunities for a number of badly behaved contractors to inflate their profit margins or even in the worst cases engage in outright fraud.

Ultimately, what my answers come back to every time is effective oversight in regulation. The real question here is not one of whether services are provided by a private or public employee, but whether that employee is effectively regulated and their conduct is effectively managed and held accountable, whether it’s through a public system or through a system of oversight of a private provider.


IA-Forum: Let’s leave it there. Thank you


James Cockayne is an international lawyer and policy analyst who has worked closely with governments, international organizations, civil society and industry on security, justice and human rights issues. As Senior Associate at the International Peace Institute (IPI), James oversees research and policy development projects on the United Nations Security Council, private security, organized crime, peace and justice and other issues. He was a principal NGO adviser in the preparation of the Montreux Document on private military and security companies. His book ‘Beyond Market Forces: Regulating the Global Security Industry’ was published by IPI in July 2009.

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