Global Policy Forum

“We’re not sure we want to participate in a process that legitimizes something we are not sure should be legitimate.”

That was the response of a top NATO government official a couple of years ago when I asked him whether his government would consider participating in the Montreux process, a Swiss government-led initiative to create standards for private military and security companies (PSCs).

It was a fair point. Any initiatives – even well well-intentioned ones – that contributed to green-lighting the transformation of old-style mercenary ‘companies’ into modern corporate entities needed close examination.

Then there were the concerns about process: how would a multi-stakeholder approach commonly used in corporate social responsibility (CSR) initiatives succeed in grappling with an industry serving the national security of member states? With the state’s monopoly over the use of force at issue, wouldn’t it be better to just push for national regulation instead of a voluntary global code?

Fast forward a few years to 2010 and the Swiss government’s multi-stakeholder approach delivered an International Code of Conduct (ICoC) for Private Security Service Providers. The ICoC does not create new law, but it does a remarkably good job of laying down the minimum standards for PSC behavior. It sets out standards for PSC compliance with International Humanitarian and Criminal Law, and international human rights standards for the use of force. It explicitly prohibits killings and sets a higher standard against torture, forced labour and child labour for private companies than those adhered to by many of their state agency clients.

Perhaps most important, the Code provides the normative principles necessary to reduce or eliminate the legal grey areas in which the industry has grown. It makes crystal clear the obligations of PSCs to abide by existing national and international laws, report crimes to – and cooperate with – national and international authorities, respect local communities and its own employees and so on. The Code explicitly prepares the ground for additional national regulation, while at the same time deploying international human rights standards for business entities to ensure businesses respect human rights in the absence of national laws. It is explicit in its reference to legal norms for regulating business, such as due diligence, and negligence standards, such as reasonable steps to avoid harm. The Code consistently uses words such as compliance, accountability and certification.

There are gaps in the Code: it mentions privacy, but it does not really deal with the growing phenomenon of privatized surveillance, both as corporate espionage but also of citizens on behalf of state or corporate clients. Still, it is fair to say that the ICoC does an exemplary job of laying the foundation for closing the jurisdictional loop-holes (not least over legal entities operating across borders) in which the more militarized elements of the sector have been operating since the end of the Cold War.

But will it succeed in putting the private security genie back into some sort of regulatory bottle?

The start of an answer to that question will be decided this week, when industry, governments and civil society gather again in Montreux for a final round of negotiations on the Charter of the Oversight Mechanism (OM) of the ICoC. At issue this week is whether, in the process of institutionalizing, the parties can agree to establish the OM as independent enough to be effective.

Much of the Charter text, or Articles of Association (the OM will be established under Swiss law as not-for-profit organization), has been agreed. But the areas of disagreement in the latest draft betray real nervousness among the stakeholders about creating an independent and effective secretariat.

For example; as it presently stands, the charter empowers the OM to receive complaints about violations of the Code from third parties, including victims, but not to adjudicate these or to recommend remedies. Complaints will be a key source upon which to assess compliance with the Code and de-certification is possible in the present draft. And the OM is not powerless when it comes to remedies: through referral powers, the OM can help find effective remedies appropriate for a particular case and in effect veto ineffective remedies.

But, as it presently stands, the text of the Articles means the OM itself is unlikely to be able to assess reparations to the affected parties. The power to do so would be an important gain for victims, many of whom will face closed doors in their attempt to get access to domestic remedies, like the courts. The Code is clear that it cannot replace domestic judicial remedies, whether civil or criminal, but the Articles should be equally clear that it offers an alternative non-judicial option with teeth.

Similarly, there seems to be doubt as to whether to allow a secretariat to the OM powers to independently monitor, or launch field missions. There is a desire among some to locate that authority with the board, rather than a secretariat.

That would be a mistake. A Board’s job is to govern, for example to approve membership applications, de-certify violators of codes of conduct, etc. Final decisions or actions approved by the Board should be based on recommendations of a secretariat. But to make that function effective means empowering a secretariat to do its job independently, which is to be operational, to monitor and to service the decision-making of the board with information and recommendations.

A secretariat reports to its board, but its functional independence gives the Board a certain amount of plausible deniability with the members it must to some extent police. Placing basic operational decisions to a multi-stakeholder board is just asking for conflict and paralysis. And a secretariat without basic executive independence with respect to its core functions – monitoring, remedy procedures, certification procedures – is a recipe for ineffectiveness and rapidly decreasing levels of legitimacy for the whole project, both from within and without industry.  

The issue of legitimacy is central, both for whatever institution is established to govern the ICoC as well as for the industry as a whole. For an industry with a very serious deficit in that department, keeping civil society on board will be vital. Doing so will likely require this week’s deliberations in Montreux to succeed in crafting an OM that in effect adds an important element to the emerging regulatory mix that may one day govern the private security industry.

If that fails to materialize, the risk is that ICoC will quickly evolve into little more than a ‘Global Compact for Mercenaries’ – a place where there is a lot of emphasis on learning, but very little evidence of change, little scope for assessing compliance and no contribution to ending impunity more broadly. Participants at this week’s meeting in Switzerland would do well to avoid that outcome.