Friday, November 16, 2012
The business of private armies is not only growing, but changing shape
OVER the past decade the business of renting out private soldiers has grown from a specialised niche into a global trade, worth as much as $100 billion, according to the United Nations. When the American consulate in Benghazi, Libya, was torched in September, locals hired by Blue Mountain, a British firm, were on guard. When a few weeks later African Union forces kicked the Shabab, a terrorist group, out of Kismayo, Somalia, South African private soldiers gave them training and support. In Iraq and Afghanistan more than 20,000 private guards are employed by the American government.
The industry’s growth has been paid for by Western governments, keen to limit the political cost of military boots on the ground. Supply has also come mostly from the West: 70% of firms are British or American. As the big conflicts of the past decade come to an end, however, private armies are beginning to chase new business, according to Sean McFate of America’s National Defence University. Industrial firms, which are increasingly setting up shop in unstable places, are expected to be a growing chunk of the customer base.
One company, in particular, is preparing for the change: Academi, an American private military giant (which, before it was sued over the death of 17 civilians in Iraq in 2007, carried the less silly moniker of Blackwater and in 2009-11 was called Xe Services). More than 90% of the firm’s business to date has come from governments, but it thinks that in the future half of its customers could be corporate. Among the early adopters are energy firms and a hotel chain. By the end of the year Academi expects to have opened a new “several thousand acre” training site, probably in east Africa, to help meet the changing demand.
As the market opens up, non-Western firms want a piece of the action. When Chinese road workers were kidnapped in South Sudan in January, Chinese armed guards were enlisted to help secure their release. One firm based in Beijing, Shandong Huawei Security Group, says it has hired about 100 guards for overseas work, and is looking for jobs in Iraq. In Angola, where more than 260,000 Chinese live and work, private firms keep them safe from banditry.
Moreover, big firms keep spawning smaller, local outfits. Large companies entering a new area typically employ locals as subcontractors. Emboldened by their new training, “subs” can spin off when a job ends, as a pool of hardened guns for hire. In June a UN monitoring group found a private anti-piracy unit in Somalia to be among the best-equipped forces in the region; it had been started with the help of Erik Prince, the former boss of Blackwater.
Small, informal groups are a particular cause of concern. They might work for the highest bidder, whether an oil firm or a frustrated despot (Colonel Qaddafi hired mercenaries in the weeks before the Libyan revolution that killed him in October last year). Mr McFate worries about the long-term impact of these private armies. As in 16th-century Europe, he says, Africa’s rich may employ mercenaries to carve out regions of control, leaving those left outside to fend for themselves.
A more immediate issue is how to regulate the fragmented industry. Ted Wright, the boss of Academi, says that its leadership has been completely replaced since the Blackwater days, and now makes subcontractors sign a set of rules and work under observation. Several states, including China, have signed the Montreux Document, a voluntary code of conduct.
Yet self-regulation is unlikely to be sufficient in a business known for its cut-throat competition. Some say that private firms should be barred from jobs more suited to conventional armies, and governments should impose sanctions at home for infractions abroad. But making rules that apply internationally will be difficult, says Thomas Hammes of America’s Institute for National Strategic Studies. Corporate responsibility, however, might help. Customers need to ensure that those hired to protect their sites are qualified and accountable—with the UN, itself a customer, taking the lead. Otherwise, the market for private soldiers might spin out of control.