Foreign Policy Research Institute A Nation Must Think Before it Acts Private Military Companies and the Future of War

Private Military Companies and the Future of War

The topic “private military companies and the future of war” is a big one. Both parts of the title—“private military companies” and “the future of war”—are phrases that can be disputed. In my recent book, which examines the privatization of security and its impact on the control of force, I label these companies “private security companies” (PSCs) specifically because they provide a range of services, some of which are hard to categorize as military, per se. And while PSCs are integral to war efforts-more than 1 of every 10 people the U.S. deployed to the Gulf in the lead-up to Operation Iraqi Freedom were PSC employees-some of the more controversial uses of private security have been in the aftermath of the “war.”

While all might agree that infantry soldiers should not be contracted out, in the midst of the insurgency in Iraq some PSCs have provided services that are nearly indistinguishable from what an infantry soldier would do. So it is in the grey area between what we would all describe as war and other violent settings that we can find the most interesting grist for thinking about the role of PSCs in the future of security. Indeed, PSCs have been in the news of late not because of their activities in Iraq, but because of their activities in New Orleans. Below I will offer a brief description of the market, discuss some of the benefits and risks it poses and suggest that their impact on the future of war depends, in part, on the strategies the U.S. and others undertake to manage the risks. I will end with what I see as the best avenue for moving forward.

Description of the Market

We commonly associate security with the state and assume that security is a fundamental feature of government. Even those who write about the way globalization is undermining state authority in many areas generally assume that security is still the realm of governments. In the 1990s, though, PSCs became more and more involved in the delivery of services: providing logistics services, training, giving operational support, and staffing international police contingents. The private sector also increasingly financed security services: both international NGOs and transnational corporations used the financing of security to better achieve their goals.

To begin, consider a few examples. During the 1990s, Sierra Leone hired Executive Outcomes to help train and support its troops to counter the RUF insurgency. The Bosnians hired MPRI to advise and train their military after the Dayton Peace Accords. Every single international civilian police officer the U.S. sent abroad in the 1990s was a DynCorp employee. When WWF, faced with the possible extinction of a species of rhino in the Democratic Republic of Congo, solicited bid from PSCs to train and protect park guards. Global corporations like, BP, Exxon, DeBeers and others contracted with private security companies for site security, security force training, and security planning all over the globe.

The conflict in Iraq has thrown this all into sharper relief. I estimate that about 21,000 contractors were deployed with the 140,000 U.S. troops in that conflict. As the insurgency heated up and the demand for personal and site security services skyrocketed, a small “army” PSC flooded into the country-perhaps 20,000 additional employees to provide military and security services for the CPA and various private entities-making private forces the second largest member of the “coalition of the willing.” All of this became much more public when private security guards working for Blackwater, USA were killed and mutilated in March and then private interrogators were among those implicated in the abuse of prisoners at Abu Ghraib prison. Current private sector estimates suggest that global private security is a $100 billion industry.

As experience in Iraq demonstrates, the companies providing security are quite diverse in terms of experience, size, age, and nationality. There are established American Firms such as DynCorp, Vinnell (part of Northrup-Grumman), MPRI (part of L-3 communications), and Kroll. But there are also upstart American firms such as Custer Battles and Triple Canopy. Similarly, established British firms such as ArmorGroup and Control Risk join upstarts such as, Olive Security and Global Risk Strategies. Erinys-a company incorporated off-shore with South African as well as British leaders surprised many when it won the contract to guard oil facilities and train a private Iraqi “facilities protection service.”

PSCs in Iraq recruit from a wide array of countries. Erinys boasts employees that have served all over Africa, Global Risk Strategies brought in some 500 troops from Fiji that had served in East Timor or in the Middle East. Triple Canopy has deployed personnel from the Philippines and El Salvador. And many of these companies are recruiting Iraqis or joining with upstart security companies in Iraq. Typically companies have a small full time contingent and a large data base from which to recruit for particular contract. It is thus easy for companies to acquire new capacities-just hire different people-or even to melt and reappear or morph from one identity to another.


There are many benefits associated with private security. First, it can provide surge and flexibility. As seen in Iraq, and also in New Orleans, PSCs can provide “surge” capacity to quickly field additional forces. Without the political and bureaucratic lead time required for mobilizing military forces, PSCs can move forces in to accomplish a wide variety of tasks. As quickly as these forces can appear, they can disappear. Once dangers pass or local forces are trained and deployed, contracts can lapse and these personnel can be quickly demobilized.

Second, it can provide specialized forces. PSCs can also more easily field the kind of forces most needed. These companies recruit from databases of mostly retired military and police personnel. This makes it easier for them to hire people with particular experience. So, for instance, a PSC can specifically recruit retired MPs, civil affairs officers and Special Forces personnel. PSCs can also recruit personnel with particular skills (in language or area expertise) or particular experience (establishing order after civil war). It is much harder for national military organizations to find those kinds of specific skills and experience, and deploy them to a particular arena.

PSCs can also recruit internationally. As I mentioned earlier, PSCs have been able to bring in representation from countries like Fiji, South Africa and elsewhere. As one U.S. Army staff sergeant put it, “We’re trying to get more international participation here and the contractors can hire internationally.”

Finally, it is politically less costly to field PSCs. Private contractors are seen to be working for profit, of their own choice, and sending them abroad is not held to the same standard that sending national troops, working for their country. Thus, in the wake of the Cold War’s end, when the size of US forces were cut to satisfy political demands, outsourcing tasks like logistics through the LOGCAP program was seen as a way of doing more with fewer troops. Similarly, for those who believe that a long-term commitment is crucial to successful nation building in Iraq and worried that the US cannot sustain such a long term commitment, the use of PSCs may be a tool to substitute for troops and encourage staying power. Thus there are some significant benefits to be had from involving the private sector in security.

Costs and Risks

The costs and risks can be divided into two categories: practical and political. Heading the practical list is cost. PSCs may be more expensive than military forces-particularly under circumstances when the US wants to provide the same level and quality of service as the military does or when there are high levels of danger. The latter issue came up in Iraq. Surge capacity comes at a high price. Recruiters must deal with supply and demand. The huge demand for security precipitated by the Iraqi situation created a seller’s market. People working for PSCs in Colombia, for instance, reported being offered three times their salary to move to Iraq. We have all heard the stories of the inflated salaries of PSC personnel working in Iraq-some two or three times what an equivalent soldier would make.

To determine the comparative cost, one must do more than simply compare salaries. Active-duty personnel receive benefits other than their salary that make them more expensive. But there are also additional costs for PSCs such as insurance. While insurance rates for military personnel are set, PSCs must pay a premium when they deploy personnel to risky areas. As the Iraqi context looked more dangerous than expected at the beginning of the war, insurance rates soared and these costs were passed on to the U.S. government.

Even in less dangerous situations, the reason privatization (or more accurately competition) sometimes saves money is that it inspires new ideas about how to deliver a service that requires fewer people or fewer or different materials. The more the U.S. wants PSCs to do exactly what the military does, the more it limits this flexibility. Without flexibility, the use of PSCs can actually increase costs. For instance, in its initial outsourcing of ROTC training, the Army required certain levels of fitness, training, and experience that produced trainers almost indistinguishable from active duty equivalents-but at an additional cost of about $10,000/trainer/year.

This is an area for more study. There are not yet many good studies of comparative cost in different kinds of settings. But one should not assume that privatizing saves money.

The second practical issue is reliability. If the government does try to minimize costs, it may forgo quality, hiring a company that will deploy fewer personnel or personnel with fewer skills or professionalism, both of which could exacerbate worries that there is nothing compel contractors to remain on the battlefield once bullets begin to fly. In Iraq, there were periodic reports that supply was inadequate, both during the conflict and particularly as the insurgency accelerated in the spring and summer of 2003, because civilian contractors failed to show up. According to Lt. General Charles S. Mahan Jr., the Army’s senior logistics officer, “We thought we could depend on industry to perform these kinds of functions.[but it got] harder and harder to get [them] to go in harm’s way.”

There are also risks that contractors will impede integrated responses to dangerous situations. There is not the same information sharing between troops and contractors or among contractors. Contractor rules of engagement in Iraq were also often unclear, at least to soldiers on the ground. And difficulties arose with the contract instrument, both because changes require a contracting officer rather than flowing through the typical chain of command and because contracting for a particular outcome does not always fit into general plans for success.

Finally, an important practical risk is the lack of legal clarity. The laws of war have been designed for traditional militaries. The legal status of personnel deployed by PSCs is often unclear as are the mechanisms by which their rights and responsibilities are meted out. This poses problems for both private security personnel and those they operate around. For private security personnel, their legal status is unclear. Unless they are commissioned by a government, they are neither combatants nor noncombatants. This can pose serious risks for individuals. They may not be accorded POW status if captured by the enemy and can be executed as an illegal combatant or charged with murder if they kill another.

This legal limbo also introduces more risks from security personnel. Again, unless they are commissioned by governments, private security personnel are not governed by military justice systems. When private security personnel break laws, it is not clear how to hold them accountable, particularly where there are weak local institutions. DynCorp employees working in the Balkans implicated in sex trafficking and prostitution rings were simply fired. Congress has since passed legislation enabling cases like these to be tried in American courts, but just how this will work is not clear.

The second category of risks are longer term and political. They have more to do with the nature of public institutions and the relationship between war and the public good. The political process works differently when the U.S. hires contractors. It is less transparent, it advantages the executive branch over the legislature, and sometimes it gives influence to the foreign government or private corporation that pays for the service. All of this can lead to the use of private security for goals the U.S. public may not support.

PSCs also pose some risks to public military institutions. In the immediate term they may recruit away soldiers and dampen retention rates. In the longer term, when PSCs begin to take over some tasks, the tasks lose some of their exclusive public character. Using PSCs may undermine the connection between military professionalism and public service.

The Future of War

How does all this bode for the future of war? There are two views. The worst-case scenario sees the use of PSCs as an unleashing of the dogs of war that will undermine democratic control of force and security as a public good. Security will become a private good leading to less public order and more anarchy. This vision of the future is similar to the portrait Martin Van Creveld painted in The Transformation of War. The best-case scenario, though, suggests that PSCs may be the beginnings of a class of global private professionals. PSCs will be a tool for spreading order and the potential for stability and economic growth to less ordered parts of the world.

There are, of course, many possibilities in between these two scenarios, but I contend what will determine which path private security lead toward is how private security is managed. PSCs respond to market incentives. A purely free market is most likely to lead to a “race to the bottom” like the worst case scenario predicts. States may be tempted to use PSCs to enhance their security vis-à-vis others, but in a global market individual state action cannot solve risks on its own. Individual state policy will only have influence if the state is also a consumer and unilateral reliance on PSCs may tempt states to take actions that their citizens view as illegitimate. The path toward international private professionals will require some level of cooperation among consumers (states, private companies, NGOs, etc.) at the global level. This kind of cooperation will be most likely to generate professional, ethical, and legal standards that both inform PSCs of proper behavior and reward those that behave properly.

Many in the private-security industry claim to welcome such standards and suggest that they can enhance the legitimacy of reputable firms, reduce risk, and ease the operational inefficiencies associated with a market of multiple standards. There are some efforts to move forward on discussions about this kind of framework. At present, however, the U.S. (the single largest consumer) is missing from there discussions, partly due to U.S. government worries that global standards may impinge on the flexibility that PSCs can offer to the U.S. Other states, international organizations and NGOs also refuse to engage in such discussions, citing moral or ethical reasons.

In my view, U.S. efforts to regulate and use private security unilaterally, as well as the other approaches that shun PSCs in the hope that they will go away, are short-sighted. Instead, the U.S. and other consumers should support efforts to create private professionals. Global regulatory standards are only one step in a long process, but at least promise movement forward in the efforts to leash what could otherwise be the dogs of war.