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CORPORATE CARVE UP: UK COMPANIES IN IRAQ : BODIES OF ARMED MEN

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Success for UK companies, in terms of scale of contracts and personnel deployed, has come in the private security industry, which is experiencing an unprecedented and possibly unrepeatable boom in Iraq. Ironically, the costs of providing security and insurance cover have drastically curtailed operating margins for companies, such as Amec, which are trying to do business in the country.

Financial Times, 14/04/05[1]

Attacks by insurgents; armed robbery; kidnapping. All of these factors have made it hard for foreign companies to operate in Iraq. And these self-same 'security issues' are what has led to the 'Baghdad boom' in private security work. While UK companies may be playing a very secondary fiddle to the US as far as main Iraq reconstruction contracts go, British private security companies (PSC) and private military companies (PMC) are easily neck and neck with their US counterparts.

The private security companies in Iraq perform a range of functions, from major operations that command thousands of armed operatives, to tiny outfits that provide hostile regions training, 'risk management' and bodyguarding for companies and governments. There are two main areas of employment for the PSCs: government contracts and as subcontractors to corporations. In total there seems to be 20-30,000 security contractors in Iraq[2]. The Erinys Oil Protection Force (2003-05) alone numbered 14,000.[3]

There is no accepted definition of a PSC or PMC. In general the term 'private military company'is redolant of freebooting outfits such as the now defunct Executive Outcomes and Sandline; hired for military operations in Africa during the 1990s.[4] However, the thread common to all these companies is their role in providing armed protection; other common themes include the employment of ex-military personnel. A definite PSC industry can also be identified, according to companies' common membership of various trade associations.

The Private Security Companies of Iraq grouping (www.pscai.org/) includes most PSCs operating in Iraq, including British, US, South African and Iraqi companies. UK member companies include Aegis, Armor Group, Control Risks Group (CRG), Hart, Olive and Janusian. This list indicates the solidarity that exists within the Iraq-based security industry. Aegis is run by a management team that includes Tim Spicer and other former members of the notorious Sandline.[5] It has been rejected once for membership of the International Peace Operations Association (IPOA), a trade association that prefers to style its sector the 'peace and stability industry'. [6] IPOA is run by a board including top members of Armor Group and Hart: companies that are happy to work wit, and work under, Aegis in Iraq[7]. Aegis is perhaps the biggest UK success story in Iraq, having won the $430m Pentagon contract to oversee all PSC operations.[8]

The UK Foreign Office has stated that there is nothing new about the use of armed subcontractors to protect diplomatic posts, 'Primary responsibility normally resides with local authorities augmented where necessary by the employment of specialist security contractors'[9]. Nevertheless the scope and extent of such use in Iraq is clearly unprecedented, and the department for international development (DfID) has diverted over £278m from its Iraq reconstruction budget to pay for increased security.[10]

The PMC/PSC industry worldwide has grown from $900m in 2003 to about $1.7bn in 2004, with similar growth expected in 2005 and with Iraq business accounting for at least one third of this total[11]. This development is mirrored in the growth of several of the biggest companies in Iraq - which have lept from tiny start-ups to major corporations in the course of the years 2003-2005. Several of them have been founded mainly to cash in on the Iraq situation.

Foreign Office guidlelines for dealing with PSCs in Iraq state that 'Many companies in this sector employ former members of the Armed Forces or of the Diplomatic Service. You should ensure that this does not give the companies privileged access beyond that available to other companies, or outside the terms of this guidance.'[12] This well meaning statement conceals, as the FCO must know, a wealth of contacts that PSCs have with the UK military. From a former minister of defence, all the way down to former SAS soldiers, there is a major public/private crossover between the armed men active in Iraq. Foreign Office guidelines also state that 'In the case of Iraq we have a real interest in helping PMCs/PSCs with legitimate operations'.[13]

A brief list of major ex-military/MoD figures now with a PSC includes:

Aegis Defence Services

  • Major-General Jeremy Phipps (retired), ex-SAS; former head of British special forces 1989-1993.[14] Formerly of Control Risks; now head of operations in Iraq.
  • Lieutenant Colonel Tim Spicer, OBE (retired), ex-Scots Guards, ex-SAS. Founder of Sandline, along with Simon Mann (now jailed for plotting a coup in Equatorial Guinea).[15] Chief Executive of Aegis.
  • Nicholas Soames MP (Conservative, Sussex Mid). Former Minister of state, ministry of defence (1994-1997), non-executive director.

Armor Group

  • Sir Malcolm Rifkind MP (Conservative, Kensington and Chelsea); former Secretary of State for defence. Non-executive director and chairman.

Control Risks Group

  • General Sir Michael Rose (retired), KCB, CBE. Commander of the 22nd SAS regiment, 1979-1982. Commandant of school of infantry, of staff college, Camberley, and first Director special forces, 1988-89; commander of the UK protection force, Bosnia-Hertzegovina, 1994-95. Non-executive director.[16]

Hart Group

  • Richard Bethell, Lord Westbury, former SAS officer. Founder.

Janusian Security Risk Management

  • Major General Walter Courage (retired). Former commander of 4 Armoured Brigade, Munich (1984-87) and Chief of Staff of UN force in Cyprus (1987-90). Director, Business Development, Risk Advisory Group (parent company of Janusian).[17]

Olive Security

  • Harry Legge-Bourke, ex-Welsh Guards captain. Former aide-de-camp to chief of defence staff Sir Charles Guthrie. Operations chief.[18]

With such a wealth of senior military and MoD political figures part of PSCs, it is extremely unlikely that this has not paid off. Contacts between the former military men and those currently serving will be maintained through informal mechanisms, such as shared membership of London clubs like the Special Forces Club[19]; university, staff college and public school alumni societies and a network of shared friends.

There have been a number of scandals around the activities of private security contractors in Iraq. Aegis personnel have filmed themselves shooting at Iraqis' cars[20]; Erinys employees have alledgedly brutally interrogated suspected thieves[21] and Hart and Armor Group have both employed confirmed terrorists (from South Africa[22] and Northern Ireland[23], respectively). Plus over 120 PSC employees have been killed in Iraq[24]. Issues such as this are causing the UK PSC industry to move towards creating a trade body and moving towards voluntary regulation. The British Association of Private Security Companies (BAPSC) charter states that 'it is only through effective self-regulation that the Members will enhance their position and be able to achieve differentiation from non Members in the same industry sector'[25]. The BAPSC head, Andy Bearpark, says that 'Some eighteen British Companies including all the major players supported us during the formulation phase', which seems to indicate that Aegis is on board, in contrast to its black-balling from the IPOA.

A report by the IPOA-linked linked British-American Security Information Council has advocated government-controlled auditing of PSCs, plus outside vetting of personnel and independent observer teams.[26] This is a form of the more stringent control that voluntary initiatives such as BAPSC are designed to head off. In 1999 the Sandline arms to Africa case prompted a government Green Paper, published 2002. This recommended a new international convention to regulate PMCs, but also concluded that 'an outright ban on all military activity abroad by private military companies would be counterproductive'[27]. Jack Straw said that that legislation would need to follow 'wide debate'.[28] In 1995 Home Office minister David Maclean stated that 'the private security industry is very important. It is also a large industry which is important to Britain's export needs.'[29] In the Iraq of today this is even more the case. Any future regulations proposed by the UK government will take very seriously the important role of the PSC industry in protecting British corporate interests - and as a major corporate sector in its own right.

References

[1] 'THE PITFALLS AND PERILS OF IRAQ'S RECONSTRUCTION CONTRACTS', Financial Times, 14/04/05, http://news.ft.com/cms/s/d33fb60a-ac81-11d9-bb67-00000e2511c8.html

[2] 'From Mercenaries to Peacemakers?', CorpWatch, 29/11/05, www.corpwatch.org/article.php?id=12829

[3] A Fistful of Contractors, BRITISH AMERICAN SECURITY INFORMATION COUNCIL, September 2004, ch1, p.7

[4] 'Mercenaries in Africa's conflicts', 15/04/05, BBC, http://news.bbc.co.uk/1/hi/world/africa/3501632.stm

[5] 'Controversial Commando Wins Iraq Contract', CorpWatch, 9/06/04 www.corpwatch.org/article.php?id=11350

[6] 'From Mercenaries to Peacemakers?', CorpWatch, 29/11/05, www.corpwatch.org/article.php?id=12829

[7] IPOA board, www.ipoaonline.org/about/board/

[8] 'From Mercenaries to Peacemakers?', CorpWatch, 29/11/05, www.corpwatch.org/article.php?id=12829

[9] Freedom of Information Release: The role of Private military companies and security companies in Iraq Released 14th July 2005 ('Contacts...' and 'PMCs...')

[10] 'Occupiers Spend Millions on Private Army of Security Men', Independent, 28/03/0, www.globalexchange.org/countries/mideast/iraq/1672.html

[11] 'Markets', Armour Group, www.armorgroup.com/ir_markets.asp

[12] 'DEALING WITH PRIVATE MILITARY AND SECURITY COMPANIES IN IRAQ', Foreign and Commonwealth Office, 30 April 2004, FOI request, 20/06/05

[13] 'DEALING WITH PRIVATE MILITARY AND SECURITY COMPANIES IN IRAQ', Foreign and Commonwealth Office, 30 April 2004, FOI request, 20/06/05

[14] 'From Embassy Hero to Racing Disgrace', CorpWatch, 9/06/04 www.corpwatch.org/article.php?id=11357; BBC, Panorama, 2002, http://news.bbc.co.uk/1/hi/programmes/panorama/2253105.stm

[15] 'Give War a Chance: the Life and Times of Tim Spicer', CorpWatch, www.corpwatch.org/article.php?id=11361

[16] Wikipedia entry 'Hugh Michael Rose', viewed 06/03/06, http://en.wikipedia.org/wiki/Hugh_Michael_Rose

[17] 'Who are we', Risk Advisory Group, www.riskadvisory.net/index.php?id=7

[18] 'UK security guard killed in Iraq', Scotsman, 29/04/04, http://news.scotsman.com/topics.cfm?tid=404&id=359432004

[19] 'Marketing the New 'Dogs of War', Duncan Campbell, www.public-i.org/bow/report.aspx?aid=149

[20] 'From Mercenaries to Peacemakers?', CorpWatch, 29/11/05, www.corpwatch.org/article.php?id=12829

[21] 'British guard firm "abused scared Iraqi shepherd boy"' , Guardian, 14/11/06, www.guardian.co.uk/Iraq/Story/0,2763,1350866,00.html

[22] 'Dirty Warriors', Mother Jones, November 2004, www.motherjones.com/commentary/notebook/2004/11/11_200.html

[23] 'File on Four', BBC, 25/05/04, http://news.bbc.co.uk/nol/shared/bsp/hi/pdfs/fileon4_20040525_iraq.pdf

[24] 'Iraq Coalition Casualty Count', icasualties.org/oif/Civ.aspx

[25] CHARTER: BRITISH ASSOCIATION OF PRIVATE SECURITY COMPANIES (BAPSC), released 04/03/06

[26] A Fistful of Contractors, BRITISH AMERICAN SECURITY INFORMATION COUNCIL, September 2004 ch6, p.2

[28] HC 577 Private Military Companies: Options for Regulation 2001-02, Forewaord www.fco.gov.uk/Files/kfile/mercenaries,0.pdf

[29] 'Private Security Industry', 19/10/95, www.publications.parliament.uk/pa/cm199495/cmhansrd/1995-10-19/Orals-1.html