A booming industry: Private Security Companies

Posted in Other | 30-Nov-06 | Author: Carsten Michels

Richard Galustian

Interview with Richard J.C.Galustian, Managing Director, ISI INTERNATIONAL LTD (www.isiiraq.com)

1. What has been ISI International’s role in Iraq?

ISI International was established in the spring of 2003 and it was one of the first few security contractors which assumed the role of security provision during the initial phases of Iraq campaign. Although there are over 100 private security companies (PSCs) currently operating in Iraq, what distinguished ISI International from other contractors was that it was the first company of its kind to foresee the need to integrate with the Iraqi population in order to provide a long term solution towards the reconstruction of Iraq. It now predominantly consists of local nationals who have been trained by experienced ex-pat U.K. /U.S. military personnel and caters for a wide range of services.

2. How may the current Iraqi situation in terms of security and stability be analysed?

The security and stability within Iraq can very simply be stated as being unstable and extremely volatile. One of the factors that may be used to support this statement would be that the situation inside Iraq has become too dangerous even for the security providers/contractors to operate in. The position is approaching untenable in particular for those PSCs who have been relying on purely ex-pat personnel.

3. What dictates the need for state dependence on hiring PSCs rather than utilisation of state run military structures?

4. What are the major differences between a state run military campaign and a system being operated by PSCs?

5. Would the demand for PSCs continue to grow in the light of a sharp increase in regional conflicts throughout the world after the end of Cold War?

I would like to answer questions 3, 4 and 5 with one lengthy answer. States have historically relied on mercenaries e.g. Casca, who nailed Christ to the cross was a mercenary. A wide range of political, economic and other factors may dictate the reliance on PSCs by any given state. Also, a change in the nature of how modern day warfare is being conducted and post-conflict resolution has also meant that a state may require more resources than before in order to fulfil its post-conflict commitment to a given region over a prolonged period of time. A disproportionate growth in the tail to tooth ratio on the battlefield in a post Cold War era has resulted in an increased number of support functions relative to actual combat power. Military hardware has become more technical in nature, usage and maintenance which has meant some states are now more so inclined to contract certain services to the private bidder. On the other hand, backhand dealings at strategic levels can also play a big part as to which PSC will secure what magnitude of a contract. It is not very difficult to see that only a handful of U.S. security providers have been granted a great deal of contracts in both Iraq and Afghanistan. Many of these companies have also had strong ties with prominent individuals though the offices of people like Dick Cheney, Donald Rumsfeld and other important figures such as Zalmay Khalilzad and Hamid Karzai to name a few.

Major differences between a state run military system and the PSCs would in many ways be dictated by their core values. Any nations military is usually an extended tool of its political structure, therefore it is usually driven by these and patriotic factors. On the other hand, a PSC will be driven by its profit margins and purely economic gains. Militaries are generally governed by Military law and are controlled under strict guidelines; although the phenomenon of PSCs is not a new one but only the recent conflicts have highlighted the need to place PSCs under some form of restrictive legal umbrella.

Yes, PSCs are here to stay due to the very reasons i.e. a growing number of regional conflicts. Although Iraq and Afghanistan have seen a boom in the private security industry, future conflicts may not offer the same level of opportunities but I feel the services provided by PSCs would equally be in demand in any other conflict. PSCs have engulfed a great deal of services and not just the hard core elements of warfare, therefore the need to hire private companies doing someone else’s dirty job will continue to exist.

6. PMCs are not governed by International law unlike traditional state maintained armies. This has been the cause of concern among many. What would be your response to this?

Considering the significant increase in the number and involvement of PSCs in world-wide conflicts, it is very important to have them tied to some form of national and more importantly International law and standards. European and U.S. governments should take the lead in resolving these issues because majority of the well-known PSCs are either Europe, notably British or U.S. based and run.

7. Who should be held responsible if a PSC fails to fulfil its obligations or meet International Standards?

First of all, an internal and external regulatory bodies should ensure that standards are maintained throughout for any given company. There should be some form of generic accreditation process in place which should be applicable to all PSCs worldwide. If any of the PSCs fails to fulfil its commitments then it should be blacklisted and barred from any future involvement within the security arena.

The Iraqi government now has the legal authority to arrest ex-pat security personnel for crimes committed under the laws of the land. Prior to this, such people were excluded from prosecution by a Coalition Provisional Authority (CPA) order.

8. Is it fair to say that conflict resolution lies not in the interest of a PSC because it would ultimately lead to the loss of the contract and loss of money?

I would say the obvious answer would be to say yes and yes, it may just be the case for a number of PSCs involved but on the other hand, if one is to look at the wider role and services provided by corporate level PSCs then it just may not be simple as that. Corporate level PSCs have not only been involved in providing physical elements of security but their services include corporate advisory restructuring, investigations, financial advisory and intelligence, corporate preparedness services including evacuation plans, background screening services, identity fraud solutions, security services and technology services to name a few. This range of services is being sought after throughout the world by clients representing all spectrums of business, finance, industry and government in hostile regions as well as non-hostile ones.

9. What kind of effects are likely to shape the American foreign policy towards Middle East given the news of US Congressional elections?

The results have indicated that a growing number of Americans would like to see a change in U.S. foreign policy towards the Middle East. Although, this change in policy is not expected to happen overnight I envisage the emphasis would be to move away from the string of policies which over the last five years have resulted in a growing level of mistrust and hatred towards the U.S. in the Middle East, as soon as practically possible. The Democratic gain for a loss of the 12-year old Republican majority in both Houses denotes that U.S. involvement in Afghanistan and Iraq is not as favourable as it may had been once and it certainly is not the vote winner at home that it used to be in the after world of 11th September 2001. The ever growing number of U.S. soldiers being killed in Iraq as well as in Afghanistan has made politicians reconsider their involvement and more so the kind of approach required towards the Middle East.

A shift in U.S. policy is likely to focus on the withdrawal of troops under a firmer schedule and mandate than ever before and both Iraqi and Afghan governments are likely to be expected to be more involved in solving their internal problems whilst Iraqi and Afghan national security elements assume more responsibility.

The U.S. may also reconsider becoming more involved with other regional players within the Middle East and open up new channels of dialogue, most notably with the Iranians. The Democrats will be inclined to sideline themselves from the failing policies of the Republicans and would want to show a greater degree of understanding of domestic and global politics.