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Private Military and SecurityCompanies: A Framework forRegulation

MARCH 2009James Cockayne and Emily Speers Mears

I N T E R N AT I O N A L P E A C E I N S T I T U T E

Cover Photo: Members of a private

security company pose on the

rooftop of a house in Baghdad,

September 18, 2007. ©Patrick Baz/

AFP/Getty Images

The views expressed in this paper

represent those of the authors and

not necessarily those of IPI. IPI

welcomes consideration of a wide

range of perspectives in the pursuit

of a well-informed debate on critical

policies and issues in international

affairs.

IPI Publications

Adam Lupel, EditorEllie B. Hearne, Publications Officer

© by International Peace Institute,

2009

All Rights Reserved

www.ipinst.org

ABOUT THE AUTHORS

JAMES COCKAYNE is Senior Associate at the International

Peace Institute, where he co-manages the Coping with

Crisis research program. He has spoken and published

widely on the reorganization of global violence, focusing

on multilateral responses to commercial armed groups,

peace operations, and international humanitarian law.

EMILY SPEERS MEARS is a writer and researcher on

humanitarianism and security. In 2008 she completed an

MPhil in International Relations at the University of Oxford,

and acted as assistant coordinator of the European

Interagency Security Forum, a network of security focal

points for humanitarian NGOs.

ACKNOWLEDGEMENTS

The International Peace Institute (IPI) owes a great debt of

gratitude to its many donors to the program Coping with

Crisis, Conflict, and Change. In particular, IPI is grateful to

the governments of Belgium, Canada, Denmark, Finland,

Greece, Luxembourg, the Netherlands, Norway, Spain,

Sweden, Switzerland, and the United Kingdom. This policy

report is based on the book-length study, Beyond Market

Forces, by James Cockayne, Emily Speers Mears, Iveta

Cherneva, Alison Gurin, Sheila Oviedo, and Dylan Yaeger.

A special debt of gratitude is owed to Andrew Clapham

and Annyssa Bellal at the Geneva Academy of International

Humanitarian Law and Human Rights for their cooperation

and encouragement, and for making available the services

of Iveta Cherneva. We would also like to thank Graham

Baxter, Lucy Amis, and Birgit Errath at the International

Business Leaders Forum for generously hosting a

Troubleshooting Workshop in London on September 2,

2008.

Thanks are also due to the many interlocutors that assisted

with the preparation of specific sections of the book-length

study or commented on sections of earlier drafts: Christine

Bader, Andrew Bearpark, Penny Beels, Christopher Beese,

Amada Benevides, Jonathan Bonnitcha, Oliver Broad, Doug

Brooks, Rachel Davis, Rebecca DeWinter-Schmitt, Birgit

Errath, Ann Feltham, Richard Fenning, Jolyon Ford, J.L.

Gomez del Prado, Hugo Guerrero, Sabelo Gumedze, Canan

Gunduz, Kevin Lanigan, Mauricio Lazala, Sean McFate, J.J.

Messner, Kevin O’Brien, Gerald Pachoud, Erica Razook,

Caroline Rees, Timothy Reid, Jean S. Renouf, Nils

Rosemann, Chris Sanderson, Sabrina Schulz, Salil Tripathi,

Lee Van Arsdale, Eric Westropp, Scott Wilson.

CONTENTS

Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

The Limits of Existing Regulatory Effortsand How they Could be Supplemented . . . . . . . . . . . 3

STATE EFFORTS

INDUSTRY EFFORTS

INTERGOVERNMENTAL EFFORTS

CIVIL SOCIETY EFFORTS

Five Global Framework Blueprints. . . . . . . . . . . . . . . . 5

1. A GLOBAL WATCHDOG

2. AN ACCREDITATION REGIME

3. AN ARBITRAL TRIBUNAL

4. A HARMONIZATION SCHEME

5. A GLOBAL SECURITY INDUSTRY CLUB

What Next? Three Steps TowardRealizing a Global Framework. . . . . . . . . . . . . . . . . . . 15

Acronyms

BAPSC British Association of Private Security Companies

BHRRC Business and Human Rights Resource Centre

FATF Financial Action Task Force

GSI Global Security Industry—the industry made up of PMSCs

ICAS International Council of Arbitration for Sport

ICRC International Committee of the Red Cross

ICTI International Council of Toy Industries

IHL International Humanitarian Law

IPOA International Peace Operations Association

NGO Nongovernmental organization

OECD Organization for Economic Cooperation and Development

OPCW Organization for the Prohibition of Chemical Weapons

PMSC Private military and security company

PSCAI Private Security Company Association of Iraq

SIEF Standards implementation and enforcement framework—any framework addressedin this study.

UN United Nations

VPSHR Voluntary Principles on Security and Human Rights

WTO World Trade Organization

James Cockayne and Emily Speers Mears i

Executive SummaryIn late 2008, seventeen states, including the US, UK,China, Iraq, and Afghanistan, endorsed theMontreux Document on Pertinent InternationalLegal Obligations and Good Practices for StatesRelated to Operations of Private Military andSecurity Companies During Armed Conflict. Thisprovides important guidance to states in regulatingPrivate Military and Security Companies (PMSCs).But there is a need to do more, to provide increasedguidance to industry and ensure standards areenforced.

The arrival of a new administration in the UnitedStates offers a unique opportunity for rethinkingthe global regulation and accountability of privatemilitary and security companies. There are positivesigns that the Obama administration will step upefforts to improve regulation, both domesticallyand internationally. And there are signs that otherstates, such as Switzerland, the UK, and Canada, arewilling to do more. Yet domestic regulation is notenough, because the industry is increasingly global.Even many of the PMSCs employed by the USgovernment are incorporated offshore, and recruitthird-country nationals that they then deployoverseas without their ever having entered USjurisdiction.

What is needed is a roadmap toward effectiveinternational regulation. There are now adequatestandards in place to develop a global framework toguide implementation and enforcement.1 What islacking is an understanding of the options availablefor implementing and enforcing these standards.This policy report examines these options, andidentifies five blueprints for the development of aglobal framework.

During 2008, the International Peace Institute(IPI) reviewed thirty standards implementation andenforcement frameworks in a range of globalindustries, including the financial, extractive, textileand apparel, chemical, toy, toxic-waste disposal,sporting, and veterinary sectors, to identify howsuch a framework might be constructed for theglobal security industry (GSI). The result was a

nearly 200-page study, Beyond Market Forces:Regulating the Global Security Industry. A consulta-tion draft of the study was commented on by adiverse set of industry stakeholders (results availableat www.ipinst.org/gsi). This policy reportsummarizes the resulting key policy options.

Beyond Market Forces identifies five differenttypes of frameworks that could be applied to theGSI. These frameworks all go beyond reliance onmarket forces and unilateral national regulation,providing mechanisms that should assist states inregulating the GSI. The aim is not to compete witheffective national regulation—which is essential—but to facilitate and supplement it.

The study identifies four design principles thatcould shape effective standards implementationand enforcement in this industry. It argues that anyeffective global framework should 1) assist states to discharge their legal duty to

protect human rights; 2) involve all relevant GSI stakeholders, including

states; 3) use “smart incentives” to encourage

stakeholder involvement and influence theirconduct; and

4) improve PMSCs’ accountability to clients, thecommunities they operate in, and otherstakeholders.

On the basis of these design principles, andBeyond Market Forces’ review of thirty standardsimplementation and enforcement frameworks inother global industries, this policy report providesblueprints for five different frameworks that mightbe developed immediately for the GSI, on the basisof existing standards: 1) a global watchdog; 2) an accreditation regime; 3) an arbitral tribunal; 4) a harmonization scheme; and 5) a global security industry club.

The report describes how each of the blueprintswould add value to existing state, industry, and civil

James Cockayne and Emily Speers Mears 1

1 The Montreux Document should also be read in conjunction with other relevant standards: the Geneva Conventions (1949) and Additional Protocols (1977), theUniversal Declaration on Human Rights (1948), the UN Code of Conduct for Law Enforcement Officials (1979), the UN Basic Principles on the Use of Force (1990), andthe ILO Conventions and Recommendations. Other existing standards, such as the Voluntary Principles on Security and Human Rights and the Sarajevo Code ofConduct and Client Guidelines, may also be applicable to the activities of PMSCs in specific contexts.

www.ipinst.org/gsi

society regulatory efforts. It outlines thegovernance structure, financing, barriers todevelopment, and added value of each. And itsuggests that it may be necessary to combinedifferent blueprints to construct one overalleffective framework. A final section sets out thesteps that stakeholders need to take in order torealize such a comprehensive global framework forthe GSI on the basis of these blueprints.

IntroductionIn the last decade, commercially organized securitypersonnel have become an increasingly commonsight around the world, from protecting shoppingmalls in the American Midwest to providingconvoy security in the Middle East. They are theincreasingly visible side of an industry that providesa wide range of services related to the provision,training, coordination, and direction of securitypersonnel, and reform of their institutions.

In many cases, small local subcontractors andlarge multinational companies are connectedthrough subcontracting arrangements, jointventures, personnel movements, and subsidiarystructures. Together, they form a complex web ofcommercial providers of guarding and protectionservices; operational support in combat, intelli-gence, interrogation, and prisoner detentionservices; and advice to, training of, and reform oflocal forces and security personnel. They form, inother words, a global security industry.

The global security industry (GSI) has undergoneparticularly dramatic growth following the US-ledmilitary campaigns in Iraq and Afghanistan. In theensuing years, it has received particular attentionregarding its perceived lack of respect for humanrights and international humanitarian law (IHL), aswell as labor rights and other standards relating tocorporate responsibility. Evidence of industryviolations of these standards remains partial,disputed, and problematic. However, the persist-ence and plausibility of such allegations has notbeen effectively matched by improved regulationand accountability, either on the part of states,which bear the primary duty of regulation, or fromother stakeholders in the GSI. Indeed, existingregulation of the industry has received widespread

criticism for a lack of transparency and—in partic-ular—a lack of appropriate accountability forviolations of human rights and IHL by PMSCpersonnel.

These criticisms get to the heart of the regulatoryproblem: the lack of industry-wide standards toprotect human rights and ensure respect for IHL,and effective arrangements for their implementa-tion and enforcement. Collaborative regulatoryaction is clearly needed to secure the future of theindustry—or at least to secure the human rights ofthose it affects—so long as the industry continuesto thrive in a free market. And such collaborativeregulatory action is clearly in the interests of notonly those affected by the conduct of the industry,but those with financial, political, or personalstakes in it.

This report’s call to improve the implementationand enforcement of human rights and IHL, as wellas other standards in the global security industry,should therefore be understood not only as one partof a larger effort to mitigate the risk of furtherhuman rights violations by PMSCs, but also as anattempt to harness the potentially positive contri-bution to security, development, good governance,and even the enjoyment of human rights, that suchan industry—if effectively regulated—has thecapacity to offer.

As demonstrated below, national regulation,company codes, intergovernmental efforts, andcivil society initiatives have all, so far, fallen short inremedying these failings. And reliance on the“invisible hand” of market forces to achieveeffective regulation does not seem to have protectedall stakeholders’ interests. Among others, the UNSpecial Representative on Business and HumanRights, Professor John Ruggie, has pointed to theneed for the general lessons of “business andhuman rights” to be applied in considering thespecific question of how to improve the regulationof PMSCs, including through international andmultistakeholder arrangements.2 We need to gobeyond unilateral state regulation and beyondmarket forces.

This report argues for a global framework toidentify, implement, and enforce relevantstandards across the industry, assisting states to

2 PRIVATE MILITARY AND SECURITY COMPANIES

2 United Nations Secretary-General, Business and Human Rights: Mapping International Standards of Responsibility and Accountability for Corporate Acts, UN Doc.A/HRC/4/035, February 9, 2007, p. 18.

achieve effective regulation. Such a standardsimplementation and enforcement framework(SIEF) would have both a preventive and a remedialaspect: it would ensure behavior in compliance withnational and international legal norms, as well asensuring accountability in cases of noncompliance.Such a framework would thus assist both industryin discharging its responsibility to respect humanrights, and states in discharging their legal duty toprotect human rights, as well as help both state andindustry to remedy human rights violations. And itcould harness—and supplement—existing effortsin order to do so.

The Limits of ExistingRegulatory Efforts andHow they Could beSupplementedSTATE EFFORTS

There are two main problems with existing stateefforts to regulate the GSI. The first relates to theinadequate substantive and geographical reach ofexisting regulation. The second relates to the lack ofeffective enforcement of regulatory instrumentswhich are in place, particularly in the area ofhuman rights law and IHL. Given states’fundamental legal duty to protect, states shouldtake steps to overcome these shortcomings; butgiven the global nature of the industry, that issomething states may find they cannot do actingalone—or even together, absent support fromindustry and civil society.

At present, the most developed efforts toimplement and enforce standards within the GSIare occurring at the level of home and contractingstate regulation. However, home states often lackthe regulatory reach to effectively implement andenforce human rights and other standards in theirPMSCs’ offshore operations. And many of themajor home states for the GSI—such as the US andUK—are also themselves major contracting states.Contracting states are open to charges of conflict ofinterest in their dealings with the GSI, since theyare not only the watchdogs for, but also the clientsof, the industry. These states may have justifiedinterests in limiting industry transparency (such as

national security concerns). But in protecting theirown interests they may unhelpfully—ifunwittingly—limit transparency for other industryclients (such as extractive companies and humani-tarian organizations). This leads not only to a lackof effective enforcement of existing legal obliga-tions, but also to a weakening of the effectiveness ofmarket forces as a regulatory instrument in the GSI.

Most existing home and contracting state-basedregulation displays a bias toward “single-state”contracting arrangements, with little attention paidto the increasingly offshore nature of PMSCrecruiting, organization, and contract performance.Even where national regulatory frameworks arecomparatively developed—as in the US and SouthAfrica—states confront challenges in monitoring,oversight, and accountability for the industry’soffshore activities. Perhaps due to concerns abouthow to ensure any such regulation is actuallyeffective, the UK, another significant exporting hubwithin the GSI, has a notably light regulatoryframework.

States where PMSCs operate (territorial states),such as Colombia, Afghanistan, and Iraq, have alsobegun to exercise their regulatory authority.However, given that many territorial states arewracked by insecurity or have weak governancearrangements, they lack enforcement power.

What all this makes clear is that PMSCs operatingtransnationally can easily escape domestic regula-tion. Numerous obstacles to effective regulationthrough and by states remain around issues such asextraterritorial jurisdiction, evidence collection,and adaptation of public norms to private businessrelationships. And the emergence of uncoordinatedregulatory frameworks at the national level may infact play into the hands of those PMSCs that seek toavoid effective oversight. In some parts of theworld, there is significant evidence of PMSCs beingclosely linked to organized crime3 and activitiesthat fuel violent conflict, such as trafficking inresources and arms. Given the mobility ofpersonnel within the industry, it is difficult—absenteffective international standards and a globalframework for their implementation and enforce-ment—to insulate some parts of the industry fromthe pernicious effects of such conduct in other partsof the industry.


3 This appears to be the case particularly in southeastern Europe and Latin America.

INDUSTRY EFFORTS

Some PMSCs have long recognized the importanceof guidance on what standards they are expected toabide by and how. They have, consequently,developed an array of internal managementsystems, ethics programs, and controls on the use offorce—both individually, and in cooperation, forexample, through the British Association of PrivateSecurity Companies (BAPSC), International PeaceOperations Association (IPOA), and PrivateSecurity Company Association of Iraq (PSCAI).4

Yet these efforts have gained only limited tractionand done little to ensure effective remedying ofhuman rights violations by industry actors. Theyare heavily criticized by civil society groups forfailing to provide effective and transparent enforce-ment arrangements. Indeed, the gravity of someallegations about PMSC conduct may make stateinvolvement necessary, if not inevitable—throughrecourse to criminal courts guaranteeing a right tofair trial and due process.

In Beyond Market Forces, IPI presents the resultsof a nonscientific examination of more than fortyPMSCs,5 which found that many PMSCs profess tosupport external ethical standards in their publicitymaterials and on their websites. Some also have inplace implementation frameworks for otherinternal standards, which are supervised and/ormanaged at the senior management level. Thesemay even include strict hiring and vetting policies,and guidelines on contracts requiring the provisionof armed security services, as well as on howpersonnel may use, and must report the use of,force.

However, the actual level of commitment to anyexternal standard (such as human rights or IHLstandards) is almost always highly ambiguous.PMSCs’ internal standards and enforcementarrangements also betray a number of weaknesses.For example, they rarely cover subcontractors. Andeven more importantly, no PMSC examined has aneffective and transparent grievance mechanism thatcould be accessed by third parties which wouldmeet the benchmarks identified by the UN SpecialRepresentative on Business and Human Rights.6

And none has provided transparent arrangementsfor referring allegations of serious human rights orIHL violations by their personnel to relevant stateauthorities.

Similar concerns arise in relation to PMSCindustry associations. Of the two largest, at present,the BAPSC provides only broad standards in theform of a charter, though it is currently workingwith its membership to develop more-detailedoperational guidance, in the form of a privateBAPSC standard. And BAPSC currently offers noformal grievance mechanism for dealing withcomplaints about its members’ conduct. IPOA doeshave a formal enforcement mechanism, but it lackstransparency and appears highly partial, given thatit leaves the enforcement of the IPOA Code ofConduct to the unfettered discretion of itsmembership. Nor does it give any formal role tostates or civil society in enforcing standards.

The global security industry cannot effectivelyimplement and enforce human rights and IHLstandards on its own: industry-only efforts will lackcredibility in the eyes of the broader public,especially if they do not lead to credible andimpartial enforcement action against PMSCpersonnel alleged to be involved in seriousviolations of human rights and IHL. But theinternal standards arrangements developed bysome PMSCs and industry associations couldprovide a starting point for supplementing stateregulation and preventing violations of humanrights and IHL being committed in the first place.They may, therefore, need to be connected to orfolded into a global framework if it is to add valuefor industry stakeholders.INTERGOVERNMENTAL EFFORTS

Intergovernmental efforts to regulate mercenaries,for example through the United Nations, have beenrife with political tensions resulting from the role ofmercenarism in colonial history. This legacy oftension has prevented formal intergovernmentalmechanisms from dealing effectively with thecomplex issue of regulation of the GSI.

The efforts of the UN Human Rights Council’s


4 A “Pan African Security Association” was also formed in 2008. However it remains in its early stages and has not been specifically addressed in this report or thelarger study.

5 See the book-length study, James Cockayne, Emily Speers Mears, Iveta Cherneva, Alison Gurin, Shiela Oviedo, and Dylan Yaeger, Beyond Market Forces: Regulatingthe Global Security Industry (New York: IPI, forthcoming 2009) for further details.

6 See John Ruggie, Protect, Respect, and Remedy: a Framework for Business and Human Rights, UN Doc. A/HRC/8/5, April 7, 2008, p. 24.

Working Group on mercenaries remain hamstrungby the baseline unwillingness of PMSCs and homestates to see PMSCs likened to mercenaries, andtreated as an inherent threat to human rights. TheWorking Group has made progress in some keyareas—especially in relation to recruiting and theimpact of personnel returning from working withPMSCs in conflict zones to their home communi-ties—and it could serve an important role indeveloping the kind of global frameworks discussedhere. But, acting alone, the Working Groupcurrently lacks the resources, as well as the access toPMSCs, territorial states, and exporting states—andtheir enforcement power—that it would need todevelop such a framework for consensual regula-tion of the industry at the multilateral level.

The Swiss Initiative provides the most significantcontemporary international effort to improvestandards implementation and enforcement withinthe GSI. In September 2008, its “MontreuxDocument” was agreed upon by seventeen states—notably including Afghanistan, China, France,Germany, Iraq, Sierra Leone, South Africa, the UK,and the US. It contains a reaffirmation of existinginternational law obligations and over seventy goodpractices for states in contracting and regulatingPMSCs. The Montreux Document is explicitlynonbinding and contains no new legal obligations.And it is also limited to states’ dealings with PMSCsin armed conflict. However, it is the most coherent,precise, and widely supported statement of “goodpractice” relating to the global security industry. Assuch, it could form the basis for standardsimplementation and enforcement in any of the fiveglobal framework blueprints put forward in thisreport.CIVIL SOCIETY EFFORTS

Civil society actors have been involved in efforts toimprove standards implementation within theindustry in a number of ways, predominantlythrough monitoring PMSC behavior. NGOs haveparticipated in single-country efforts to strengthenthe operational link between security and humanrights, including through the Sarajevo Process andthe Voluntary Principles on Security and HumanRights.7 Some have also assisted in industry effortsto raise standards or, in the case of the Business &

Human Rights Resource Centre (BHRRC),provided a public platform for engaging companiesdirectly when specific concerns arise relating toPMSC conduct.

But the sanctioning levers to which civil societysometimes has access—public sentiment andpurchasing power—will require significantmobilization before they have any real impact onthis industry. Most major industry clients (such asgovernments and extractive industries) are noteasily moved by public pressure, and informationabout standards violations (which often occuroffshore) is generally ambiguous and difficult toaccess. Civil society activism therefore has animportant role to play in raising public awareness ofviolations of human rights and IHL, and the failureto adequately remedy them.

Research and policy institutions in the US andEurope have also conducted important research onthe issue of PMSC regulation. But in order for theirfull import to be effectively realized, these effortsneed to feed into a regulatory process. And atpresent, there is no broad process working withstakeholders to think through the practical issuesaround different regulatory options and build acoherent global framework of improved standardsimplementation and enforcement. This report’sblueprints advance a number of different ideas forhow civil society might be involved in the develop-ment and operation of such a global framework.

Five Global FrameworkBlueprintsAny effective Standards Implementation andEnforcement Framework will need to be based onthe state’s fundamental legal duty to protect humanrights, the corporate responsibility to respect theserights, and the shared obligation to provide accessto a remedy in the case of violations.8 While nosingle stakeholder group is in a position to providecredible, effective standards implementation andenforcement for the industry on its own, eachstakeholder group—states, industry, the industry’sclients, and civil society groups—brings somethingto the table. Together or separately, they may needto develop different components of a larger global


7 For further details see Cockayne, Mears, et al., the book-length Beyond Market Forces.8 See Ruggie, Protect, Respect, and Remedy.

framework that, over time, fosters convergencetoward effective implementation and enforcementof shared standards. This report fleshes out fiveblueprints for what such a global framework—orcomponents of such a framework—might look like.

The five blueprints are based on four designprinciples, which the study Beyond Market Forcesidentifies as the basis for effective standardsimplementation and enforcement in the industry:1. Any global framework should assist states to

discharge their legal duty to protect humanrights.

2. It should also involve all relevant GSI stake-holders, including states.

3. It will need to use “smart incentives” toencourage stakeholder involvement and toinfluence their conduct.

4. And it will need to improve PMSCs’ accounta-bility to clients, the communities they operatein, and other stakeholders. It could do sothrough reporting, consultation, improvingclients’, regulators’, and other stakeholders’access to information about PMSC performancein the field, and possibly also through dispute-resolution arrangements.

Some of the following blueprints correspondmore fully to these principles than others.Accordingly, it may be necessary to combinedifferent blueprints to construct one overalleffective framework that discharges all of therequirements of these principles.

However, the nature of some PMSC miscon-duct—specifically relating to serious human rightsviolations—also makes clear that any suchframework should be able to “plug into” stateenforcement mechanisms. Many PMSC human-rights violations may need to be adjudicated instate courts through fair trial subject to dueprocess. Any global framework ought to assisteffective judicial determination of human rightsviolations, even if that leaves room for moreinformal dispute resolution and remedial arrange-ments in relation to labor and contract disputes.

Existing arrangements such as the OECD’s NationalContact Points for implementation of theGuidelines for Multinational Enterprises, may servesuch a purpose, but may not prove adequate to dealwith allegations of serious violations of humanrights (such as violations of the right to life) thatrecur in relation to the GSI.

Finally, this report notes that while adequatestandards now exist for effective transnationalstandards implementation and enforcement,further elaboration and operationalization of thesestandards may still be useful. In particular, a globalcode of conduct would amplify the standards in theMontreux Document (which addresses only statesand situations of armed conflict). It could helpcreate greater market transparency and perform-ance accountability, and is therefore likely to bewelcomed by many parts of the industry, theirclients, civil society, and states.9

1. A GLOBAL WATCHDOG

A global GSI watchdog would monitor PMSCcompliance with globally applicable industrystandards.10 Where it found reasonable evidencethat these standards had been violated, it wouldrefer matters to the relevant state authority and/orpublicize the matter. It could take the form of eithera states-backed global GSI ombudsman or—shortof that—be established by the collective action ofnongovernmental organizations (NGOs) andindustry, without state participation. Precedents forsuch a mechanism include the UN framework onChildren and Armed Conflict, the landmine NGOGeneva Call, and the International Committee ofthe Red Cross (ICRC).11

How Would it Work?Whether a states-backed global ombudsman or acreation of NGOs and industry, a global GSIwatchdog would do the following: a) Act as a “guardian” of global GSI standards,12 by

• monitoring compliance by PMSCs (and/ortheir clients, and/or state regulators) withthese standards;

• providing desk and field monitoring of areas


9 For a draft code of conduct limited to human rights and IHL, and a consideration of how such a code of conduct might be developed, see Nils Rosemann, “Code ofConduct: Tool for Self-Regulation for Private Military and Security Companies,” Occasional Paper No. 15 (Geneva: Geneva Centre for the Democratic Control ofArmed Forces, 2008).

10 See documents referred to in note 1, above. 11 For analysis of these and other frameworks referred to throughout the report, please refer to Part IV of Cockayne, Mears, et al., Beyond Market Forces.12 In the style of the UN Framework on Children and Armed Conflict, Geneva Call, and the ICRC.

of particular concern in which PMSCsoperate, with specific investigations intoviolations conducted by panels of expertsassembled from standing lists drawn fromgovernment officials, industry, clients, andcivil society;

• providing a complaints hotline13 for whistle-blowers, whose allegations could then triggeran investigation by the watchdog; and by

• publishing an annual review of industry-widetrends in compliance with the standards, and adigest of good practices in implementing andenforcing them.14

b) Encourage implementation of the global GSIstandards, through • publicizing findings about compliance with

GSI standards in specific cases, for examplethrough a website; and

• passing on any serious concerns or grievancesregarding illegal activity, and relevantinformation, to the appropriate state enforce-ment mechanisms.

Any watchdog would have minimal standardsenforcement capacity. Were states to explicitlydelegate monitoring power to it, in a similar way tothe ICRC’s monitoring of state and armed groups’compliance with IHL, it might be useful also toendow it with the capacity to engage in confidentialdispute resolution. Governance StructureThe watchdog would consist of a secretariat and aboard. The secretariat would be responsible for theday-to-day monitoring and review functions of thewatchdog. In specific cases it would assemble apanel of experts to undertake field inspections.These experts could be drawn from standing listsnominated by different stakeholder groups (states,industry, affected communities, clients, andinvestors) according to a pre-agreed formula. Thesecretariat would require a small permanent staff ofsix to eight, managed by a secretary-general.

The secretary-general would be responsible foroverseeing the direction and daily operation of the

secretariat and guiding its relations with industrystakeholders, including the board. He or she wouldbe a senior, respected figure with an extensivebackground in corporate social responsibility,international security, or human rights advocacy,and would promote the watchdog internationallyand raise both diplomatic and financial support forits activities. He or she would be assisted by threestaff. The director for monitoring would haveprimary responsibility for coordinating andrunning the watchdog’s monitoring activities,including the complaints hotline and organizationof panels of experts. The director for good practicewould be responsible for developing and editing theannual review of industry compliance and goodpractice, and for developing related outreach activi-ties. These officers would be backstopped by anadministrative officer, one or two researchassistants, and two or three clerical and administra-tive staff.

The board would oversee the watchdog’s strategicdirection, and comprise a maximum of fifteenmembers, all serving elected two-year terms. In astates-backed watchdog, states would hold sevenseats on the board, and chair the meetings on arotating basis. These seven seats would be distrib-uted among contracting, territorial, and homestates. A further three seats would be held by localand international human rights NGOs and laborunions, three by representatives of the industryitself (drawn from specific PMSCs or from tradeassociations), and two by representatives of clientand investor groups (such as extractive-industryclients, humanitarian organizations, and theinsurance industry). These seats would be filled byelections within each group (with voting rightsperhaps being tied to payment of scaled subscrip-tion fees). If states did not participate in thewatchdog, the board would operate without them.In either case, the secretary-general would alsoserve as ex officio deputy chair of the board. FinanceThe GSI watchdog would be funded by states,private foundations, retail donations, subscriptions


13 Like those established by the International Council of Toy Industries (ICTI) CARE Process, and Clear Voice.14 In promoting good practices it would resemble another “watchdog,” the NGO Transparency International. TI works with governments, businesses, civil society

groups, and other stakeholders to promote transparency in elections, public administration, procurement, and business. However, unlike the GSI watchdogproposed here, Transparency International does not investigate allegations of corruption or expose individual cases. For further information, see the organization’swebsite, available at www.transparency.org.

www.transparency.org

from electors of members of the board, andpossibly sales of its annual review. This reportestimates an annual operating budget of approxi-mately $1.2 million (c. $600,000 personnel costs;$300,000 operating costs; and $300,000 overheadcosts). Specific investigations would need separatefinancing, which might call for the creation of aseparate strategic fund. What are the Barriers?The effectiveness of a watchdog will depend on (1)its access to information; and (2) remedial actionbased on the information it brings to light.

Access to information will be facilitated byconnections to civil society networks, industryparticipation, and especially by state support. Statesupport might be facilitated by linking thewatchdog closely to standards they already support.A GSI watchdog could, for example, be establishedby states that endorse the Montreux Document, asan aid to assist them in implementing thatdocument. Access to information will also dependon stakeholders working with the secretariat toestablish careful protocols to protect nationalsecurity, contractual confidentiality, individualprivacy, and whistleblowers.

Effective remedial action will depend on clients,investors, and regulators having access to thewatchdog’s findings about compliance withstandards, and taking appropriate action. Thewatchdog could also be mandated to monitor suchfollow-up. What are the Benefits?The GSI suffers from a chronic lack of markettransparency, and states find standards enforce-ment difficult because of limited access to reliableinformation about industry performance. A GSIwatchdog would help fill these gaps, withoutjeopardizing state enforcement authority andexisting market arrangements. By clarifying thereality of PMSC performance, it would makeindustry underperformers accountable to clients,investors, and regulators, while rewarding goodperformers.

Given that standards already exist, there are noreal barriers—beyond will and finance—to the

relevant GSI stakeholders setting up a watchdog onthe earliest possible date. 2. AN ACCREDITATION REGIME

An accreditation regime that deliberately harnessesmarket-based incentives could be set up immedi-ately on the basis of the Montreux Document andthe other existing standards listed above.15 It couldbe set up by the GSI and its clients either on theirown, or with states’ backing. A credible accredita-tion regime would create demand for standards-compliant PMSCs, and drive up standards acrossthe GSI. And accreditation would operate as amarket signaling device, to turn demand into anincentive for compliance and accreditation.

Precedents for such a regime exist in the globalapparel and manufacturing regimes, in thediamond and chemical industries, and in rudimen-tary form in the British Association of PrivateSecurity Companies and the International PeaceOperations Association. No such regime exists atthe global level for the GSI, or with the involvementof clients, investors, and regulators.How Would it Work?An accreditation regime would have three linkedfunctions:a) Certification

• To participate, PMSCs and their clients wouldsubmit a completed checklist of compliancewith the framework’s standards, particularlyrelating to vetting of PMSCs and personnel,field management, and reporting of humanrights and labor rights violations. Thischecklist and a preliminary desk and worksitecheck would serve as the basis for determiningcompliance with the framework standards.

• Companies and clients that fulfill these certifi-cation requirements would be provided with acertificate, which they would be permitted touse in publicity and marketing.16

• PMSCs would be required to integrate two-thirds of their subcontractors into theframework within three years, to ensurecontinued certification. These subcontractorswould themselves have to undergo certifica-tion.17


15 See note 1, above.16 As is the case with the Global Compact logo and ICTI.17 As is required by the Business Social Compliance Initiative and ICTI.

b) Auditing• An auditing team (either supplied by the

secretariat, or assembled by participatingNGOs) would conduct workplace andheadquarters audits to evaluate participants’implementation and enforcement of agreedframework standards. These audits would beunannounced,18 and the auditing team wouldseek the input of third-party stakeholders andaffected communities.

• Audits would rate participants’ performanceagainst agreed standards.

• PMSCs found to be falling below agreedratings thresholds (on specific key standards,or on average across a range of standards)would be prescribed steps for remediation. Ifthey had not carried out these steps after sixmonths (as assessed by a follow-up audit),their accreditation and certification would besubject to revocation by the board.

c) Ratings• The ratings produced by the auditing process

would be published on the regime’s websiteand/or provided to other regime participants.This would greatly increase markettransparency, and allow clients, regulators,and investors to link future contracting,regulatory, and investment decisions to theseratings.

Governance StructureThe accreditation regime would consist of a board,secretariat, and auditing teams. The secretariatwould be responsible for the framework’s day-to-day operations, and answerable to the board. Itwould promote the framework and its standards, toensure that they became internationally recognized.It would conduct the primary certification process,and also manage the activities of auditing teams.Doing so would require a full-time staff of ten,including a secretary-general, senior and associatecertification officers, senior and associate auditingofficers, finance, administrative, clerical, IT, andoutreach staff.

The certification officers would be responsiblefor processing PMSC applications for certification,including the desk and worksite check, and, at the

outset, some outreach activities promoting theframework and its standards. The auditing officerswould assemble, coordinate, and manage the activi-ties of the auditing teams, including arranging theworkplace and headquarters audits and coordi-nating the follow-up audits. All of their work wouldbe backstopped by finance, administrative, clerical,IT, and outreach staff, under the direction of asecretary-general. The secretary-general would alsobe responsible for the overall direction of theregime, relations with participants and the board,and fundraising.

Auditing teams would be assembled from lists ofexperts approved by the board, or assembled bylocal NGOs according to prescribed criteria andthen approved by the secretariat.

The board would oversee the regime’s strategicdirection, and comprise a maximum of fifteenmembers, all serving elected two-year terms. In astates-backed regime, states would hold seven seatson the board, and chair the meetings on a rotatingbasis. These seven seats would be distributedamong contracting, territorial, and home states. Afurther three seats would be held by local andinternational human rights NGOs and laborunions, three by representatives of the industryitself (drawn from specific PMSCs or from tradeassociations), and two by representatives of clientand investor groups (such as extractive-industryclients, humanitarian organizations, and theinsurance industry). These seats would be filled byelections within each group. If states did not partic-ipate in the watchdog, the board would operatewithout them. In either case, the secretary-generalwould also serve as deputy chair of the board. Theboard would meet every six months to review thecertification, auditing, and ratings process, and todecide how to deal with noncompliant participantsthat had not undertaken prescribed remedialmeasures. FinanceThe accreditation regime would levy a fee for allparts of the accreditation process. It would need tomake sure that this fee was not a deterrent tosmaller PMSCs—so it might use a graduated feeschedule, levying fees calibrated to the current andforecasted revenues of the applicant. Subsidy by


18 Like those of the Fair Labor Association.

clients and states would balance out industrymembership fees, enabling the framework tomaintain its independence. This report estimatesthat the secretariat would cost c. $1.5 million perannum (c. $900,000 personnel costs, $300,000operating costs, and $300,000 overhead), notincluding the costs of auditing teams. These wouldbe separately budgeted and should be covered byservice fees. What are the Barriers?The Montreux Document provides importantguidance on how states should expect PMSCs to vettheir personnel, manage them, and deal with allega-tions of misconduct.19 These might provide thebasis for an accreditation regime. However, someindustry actors may seek greater specificity in thesestandards before they are willing to participate inan accreditation regime that creates markettransparency and market signaling mechanisms.Accordingly, it may be useful—though it may notbe necessary—to supplement existing standardswith a code of conduct, as the basis of an accredita-tion regime.

Effective auditing will depend on substantial buy-in from both industry and from clients, since it mayraise significant issues of national security, clientconfidentiality, and privacy. Yet precedents likethose in the diamond and chemical industriesdemonstrate that with sufficient industry buy-in,certification, auditing, and inspection protocols canbe developed that satisfy such concerns.

An accreditation regime would need to functionquickly as well as effectively. It could use a tieredcertification scheme, with PMSCs’ compliance withthe most important standards of human rights andIHL assessed first, providing a preliminary certifi-cation allowing PMSCs to bid for contracts whilestill applying for complete certification. What are the Benefits?Even a voluntary GSI accreditation regime, if robustand credible, would begin to institutionalize theconnection between standards implementation,market access, and performance incentives. Itsratings could be picked up and used as the basis of

contracting and regulating decisions by GSI clients,regulators, financiers, and civil society. And it couldbe set up now on the basis of existing standards. 3. AN ARBITRAL TRIBUNAL

A GSI arbitral tribunal would provide an industry-tailored forum for dealing with the labor, contrac-tual, and other disputes—not including serioushuman rights violations—that occur in thisindustry across multiple jurisdictions every day. Itwould help create a level global playing-field for theindustry, reducing administrative costs and regula-tory arbitrage, encouraging cross-border profes-sionalization, and facilitating enforcement cooper-ation by different states. It could also generate anacquis of practice encouraging rising managerialstandards within PMSCs around the world. Themajor precedent for such a forum is the Court ofArbitration for Sport, but it could also draw on theInterpretation Procedure of the InternationalLabour Organization’s Tripartite Declaration.20

Such an arbitral tribunal could be set up immedi-ately, on the basis of existing law and standards.Once the infrastructure and personnel were inplace, the arbitral tribunal would be “activated” bystakeholders granting it jurisdiction over casesthrough references in their contracts, regulations,and investment agreements. How Would it Work?A GSI arbitral tribunal would serve as a forum inwhich contractual parties could enforce the termsof their contract, or from which state regulatorscould seek advisory opinions or decisions inspecific cases.• PMSCs and their clients, and PMSCs and their

personnel, would specifically consent to submitto the arbitral tribunal’s jurisdiction in theircontracts.

• States could mandate the jurisdiction of thearbitral tribunal over certain types of labor orcontractual disputes relating to the industry,regardless of such inclusion by private parties.

• These contractual and regulatory referenceswould also give binding force to the standards—


19 Montreux Document on Pertinent International Legal Obligations and Good Practices for States Related to the Operations of Private Military and Security CompaniesDuring Armed Conflict, Part II: Procedure for the Selection and Contracting of PMSCs, available at www.eda.admin.ch/psc.

20 The Declaration is a set of voluntary principles to guide multinational enterprises, governments, and employers’ and workers’ organizations in adopting socialpolicies and developing good practices. The Interpretation Procedure can be activated by any of these stakeholders in the instance of a dispute regarding theapplication of the Declaration. For more detail, see Part IV of Cockayne, Mears, et al., Beyond Market Forces.

www.eda.admin.ch/psc

such as the relevant provisions of the MontreuxDocument, the ILO Conventions and relevantRecommendations, and relevant internationallaw—compliance with which the arbitral tribunalwould assess.

• Rather than conducting its own investigations,signatories and complainants would be requiredto provide information to the arbitral tribunalupon request. This information would remainconfidential, unless both parties agreed to itsrelease. The outcome of the tribunal processwould be made public, though written decisionsmight be made available only to the parties.

• The tribunal would provide needs-basedassistance for those bringing claims, which wouldbe particularly important for PMSC employeesand smaller PMSCs.

• The decisions of a GSI arbitral tribunal would beenforced through states’ domestic jurisdiction, aswith other international arbitration arrange-ments.

• An annual digest of the decisions of the tribunalcould be prepared by the secretariat, as the sourceof an acquis to provide guidance to industrystakeholders.

Governance StructureArbitrators would be chosen for either their arbitralexperience, or their GSI-related legal experience,and appointed for a renewable term of four years.They would be entered into a database by a smallsecretariat, which would receive and processcomplaints. Both parties to the dispute would selectone arbitrator from the database, and agree collec-tively on a third independent arbitrator, or have thethird panel member appointed by the framework’ssecretary-general.

The secretariat would be staffed by a secretary-general overseeing the secretariat’s daily operations,engaging in strategic outreach with stakeholders,and representing the regime to the broader interna-tional community; one full-time administrator toprovide administrative support to the arbitralprocess, maintain its database of arbitrators, andreceive and process complaints and requests forneeds-based assistance; one outreach officercharged with developing the tribunal’s website andoutreach materials and dealing with the media, aswell as working with the administrator to oversee

assistance to parties; one counselor, with dualresponsibility for providing legal advice to thesecretary-general and administrator, particularly toensure respect for the arbitral regime, and forpreparing an annual digest of arbitral decisions andnotes on the developing acquis. These four substan-tive positions would be supported by a director offinance and administration and two clerical staff,for a total of seven staff.FinanceMost of the expenses related to a GSI arbitraltribunal would be borne by the parties. However,states and industry actors might be required toprovide voluntary contributions to a fund to coverthe costs of PMSC personnel complainants, and/orsmall PMSCs. These contributions would also needto cover the operating costs of a small secretariat, topublicize the arbitral tribunal and encourageprivate parties to incorporate references to it andthe standards it enforces in their private legalarrangements; maintain the lists of potentialarbitrators; serve as administrative support to thearbitral process; manage the provision of assistanceto claimants; and prepare an annual digest ofarbitral decisions and acquis. This report estimatesthe annual costs of such an enterprise to be approx-imately $900,000 per annum ($600,000 personnelcosts, $150,000 operating costs, and $150,000overhead). What are the Barriers?A GSI arbitral tribunal would not deal directly withthe key regulatory problem for the GSI: preventingand remedying PMSC violations of human rightsand IHL. It may not, therefore, receive muchsupport from civil society. But its encouragement ofcross-border harmonization in labor managementpractices and facilitation of sanctioning of contrac-tual underperformance might indirectly assist withimproving respect for other standards in the GSI.What are the Benefits?The tribunal would offer industry-sensitive, timeefficient, and cross-border harmonized resolutionof complaints regarding adherence to labor andcontractual standards. It would significantly reducetransaction and dispute-resolution costs for allindustry stakeholders, assist states by supple-menting their domestic enforcement options, andencourage improved respect for other standards in


the industry. It seems likely that any such arbitraltribunal might deal with disputes about occupa-tional health and safety, and workplace personnelmanagement, which could have a significant effecton the upstream and downstream impacts ofPMSCs. 4. A HARMONIZATION SCHEME

A GSI harmonization scheme would encourageharmonization of national regulatory arrangementsand/or PMSC management arrangements aroundthe standards codified in the Montreux Document,and other agreed international standards. Such ascheme could operate on a decentralized butcoordinated basis, with different states (or PMSCs)taking responsibility for championing harmoniza-tion of different aspects of state regulatory practiceand PMSC performance. Partial precedents forsuch an approach include the UN Global Compact,the Financial Action Task Force (FATF), theOrganization for the Prohibition of ChemicalWeapons (OPCW), and the Toxic WasteConvention.How Would it Work?• A small secretariat would track and assist with

the implementation of the Montreux Documentby states, the industry, and its clients.

• States and industry participating in theharmonization scheme would assist in this byreporting to the secretariat and through it toother scheme participants. Reports could, forexample, be posted on a secretariat-hostedwebsite.

• The secretariat would also have a minimalcapacity to identify and provide technicalassistance for newcomers to the scheme, forexample drawing on expertise in other partici-pating states and/or PMSCs.

• Different states would volunteer to “champion”harmonization in specific areas of practice,leading working groups on topics such as vettingpersonnel; training of PMSC personnel; dealingwith third-party complaints; managing use offorce and firearms; and remedying violations ofhuman rights and IHL.Two further elements could be added to a

harmonization scheme once it has been established.

The first would involve a more formalized peerreview process,21 which would greatly accelerate theprocess of national harmonization. This mutualevaluation process would be coordinated by thesecretariat, and could, for example, draw on theexpertise and independent assessments of the UNWorking Group on Mercenaries.

The second add-on would be a mutual recogni-tion scheme, in which participating states agreed to(1) allow only PMSCs incorporated in, or subject tothe laws of, another participating state to operate ontheir territory, or to operate alongside governmentagencies operating overseas; and (2) allow PMSCsoperating from their territory only to contract withor operate on the territory of other participatingstates. Governance StructureThe secretariat would consist of four full-time staff.The executive director would oversee thesecretariat and engage in strategic outreach withstakeholders, including where a need for assistanceto improve implementation is identified. Theexecutive director would also be responsible for theharmonization scheme’s fundraising and financialmanagement, as well as managing the voluntarytrust fund detailed below. A senior adviser wouldengage in more routine monitoring of implementa-tion of the Montreux Document by those states thathad endorsed it and other stakeholders that hadexpressed support for it, and identify emergingissues for the attention of the executive director. Heor she would advise the executive director onstrategic engagement to assist in its implementa-tion. The executive director and senior adviserwould, in turn, be assisted by an adviser, who wouldprovide legal analysis to the secretariat andimplementation assistance to stakeholders. Thesethree officers would be supported by one adminis-trator, responsible for overseeing the secretariat’sbudget, general administration, and website. Werethe harmonization scheme expanded to incorpo-rate a peer-review process and a mutual recognitionscheme, the secretariat would need to be expandedaccordingly to provide the required administrativesupport.

In addition to this central secretariat, theharmonization scheme could also be advanced in a


21 Such as that developed by the FATF.

decentralized manner, and informally, with statesvolunteering to chair “Working Groups” focusingon specific issue areas for harmonization. Thisflexible approach could also allow the participationof nonstate actors in the scheme.

Alternatively, a more formal membershipassembly could be established, comprising onlystates that have recognized each other as havingadequately harmonized their domestic implemen-tation arrangements around the agreed standards.Associate membership would be proffered to thosestates that aspire to drive up their standards, butneed help to do so. Each state would nominate anational authority dedicated to upholding thestandards, which would send a delegate to theassembly to report on the progress of implementa-tion.22

FinanceMember states would fund the secretariat withcontributions graded according to their GDP.23 Thesecretariat would also receive funding from civilsociety. This report estimates the cost of thesecretariat at roughly $800,000 per annum. Thiswould cover four full-time staff, travel, and officeand administration costs (c. $500,000 personnelcosts, $150,000 operating costs, $150,000overhead).

A voluntary trust fund would provide assistanceto countries with weak regulatory capacity wishingto participate in the framework. A mechanismmight also be devised for making small contribu-tions to assist PMSCs with their implementation ofthe standards. The secretariat would engage infundraising, and help states identify donors forspecific capacity-building projects relating tostandards implementation through its matchingfunction. What are the Barriers?States would have to follow due domestic procedurein changing any legislation in order to bring it inline with the agreed standards. And appropriateassistance would have to be made available to stateswith weak regulatory capacity, to ensure that thisscheme did not create problematic barriers to trade.The participation of such states should be a centralconcern of such a scheme, since more effective

territorial state regulation of PMSCs will greatlyreduce costs for home and contracting states, andimprove GSI accountability. What are the Benefits?The Montreux Document has already been agreedupon by seventeen states. As a result, nationalregulatory harmonization among these states couldbegin immediately. A harmonization scheme wouldalso provide a nonpunitive means for encouragingimproved practice in regulation of the industry.This global framework blueprint offers a confiden-tial forum for states to encourage each others’improved regulation of the global security industry,as well as a platform for negotiating solutions tospecific regulatory and coordination problems. Theflexibility and informality of this approach will alsoallow international regulation to develop atdifferent speeds on different tracks, depending onthe specific needs and interests of different statesand GSI stakeholders. 5. A GLOBAL SECURITY INDUSTRYCLUB

A GSI club would provide a framework for states,PMSCs (and their trade association representa-tives), and clients to develop and implement ashared professional culture or ethic, through collec-tively wielded peer pressure. It would start byencouraging its members’ compliance with existingstandards, such as those implied by the MontreuxDocument, and eventually expand to includebroader industry standards (as its membersagreed). It could feasibly be set up by the relevantstakeholder groups immediately.How Would it Work?The club would• have a mixed membership, divided into members

(clients, industry, and states) and participantobservers (civil society, affected communities,GSI financiers);

• require members to report on their own regula-tory and accountability arrangements;

• require PMSC members to incorporate agreedstandards into their internal managementsystems and contracts, and to establish internalmonitoring and reporting mechanisms;


22 Like the OPCW.23 This funding structure is modeled on that of the Toxic Waste Convention.

• deal with specific instances of noncompliancethrough a “mixed commission,” drawing decisionmakers from each of the three membershipgroups (clients, industry, and states);

• provide guidance for members on how toimplement standards and also monitor develop-ments in the global security industry generally;and

• work with existing regulatory bodies—fromindustry associations to regulatory mechanisms,such as the Voluntary Principles on Security andHuman Rights (VPSHR)—to improve standardsand standards implementation.24

Governance StructureThe club would consist of a members’ assembly, aboard, a mixed commission, and a secretariat. Themembers’ assembly would meet semiannually to setthe strategic direction of the framework andconsider reporting from members and the mixedcommission (discussed below). To become amember or a participant observer would requireunanimous agreement among existing participants.Both members and participant observers would beexpected to promote the club, implement or assistin the implementation of its standards, attend themembers assembly, report annually on their effortsto implement the standards at the members’assembly, and participate in dialogue with otherclub participants, including on specific implemen-tation issues.25 Participant observers could offer toassist members in their reporting. The secretariatshould manage a small voluntary trust fund to bedisbursed to smaller PMSCs and/or smaller statesto facilitate their participation in assemblymeetings.

The members’ assembly would also deal withboth specific cases and general recommendations,through the establishment of a subsidiary “mixedcommission.” This would consist of representativeselected from each membership and observer group(states, industry, clients, affected communities, civilsociety actors, investors), to investigate specificallegations of serious violations of the club’sstandards, and make recommendations to themembers’ assembly, as well as to the relevant stateauthorities in the case of any violation of legal

standards. Participation in the club would requirecooperation with this mixed commission. Themixed commission could issue “general comments”on an annual basis, drawing on the practice of clubmembers, its investigations in specific cases andreporting prepared by the secretariat. This wouldhelp the club to develop an acquis of good practicedriving up standards across the industry.

The board would consist of six members (twostate representatives, two industry representatives,two client representatives) and three participantobservers (one civil society, one affectedcommunity and one GSI financier representative),with participation rotated every year, throughelection from the members’ assembly.

The secretariat would have at least four full-timestaff: a secretary-general, a reporting officer, acompliance officer, and an administrator. As well asdeveloping guidance for implementing standardsand crafting reporting guidelines, the secretariatwould monitor and report on developments in theGSI, and be responsible for producing an annualreview of the club’s activities. All of its recommen-dations would be subject to the review and approvalof the members’ assembly.

The secretary-general would work with clubmembers to oversee its activities, improvestandards and implementation, and represent theframework internationally. He or she would beresponsible for fundraising for the framework’sactivities and the voluntary trust fund. This wouldbe a senior position and require extensive interna-tional experience in the management of securityand/or a relevant nonprofit organization.

The reporting officer would receive the members’reports and work with them to craft reportingguidelines, as well as providing periodicmonitoring and reporting on developments in theGSI. The reporting officer would also assist in theproduction of the mixed commission’s annual“general comments,” and prepare the secretariat’sown annual review.

The compliance officer would work in coordina-tion with the secretary-general to provide guidanceon standards implementation and monitoring andreporting mechanisms, in specific cases. He or she


24 As does the BAPSC. 25 The club’s membership application structure and participation requirements draw on those of the VPSHR.

would also coordinate the mixed commission andhandle any specific complaints relating to memberconduct.

The administrator would coordinate the semi-annual members’ assembly and manage the club’sfinances and general administration. Finance The club would be financed by membership fees,according to a graduated scale to ensure that partic-ipation costs were not prohibitive for any GSIstakeholders. It would cost around $1 million perannum ($500,000 personnel costs; $300,000operating costs; $200,000 overhead). This wouldenable it to carry out significant research, handlereporting, manage the mixed commission andsemiannual members’ assembly meetings, andcover the cost of staffing and running thesecretariat. A separate voluntary trust fund wouldcover participation for smaller members in themembers’ assembly. What are the Barriers?There are no legal barriers to the establishment of aGSI club. It is a soft tool for standards implementa-tion only, one that would have no enforcementpower other than peer pressure. As a result, it couldeasily become a means for stakeholders to arguethat they were involved in a process of improvingstandards implementation and enforcement, whileeffectively doing neither. Existing clubs, such as theVoluntary Principles on Security and HumanRights, already suffer similar criticisms.26 Given thevery diverse nature of the likely membership of aGSI, a club would also be vulnerable to a weakeningof the common “ethic” and system of peer pressurethat provides a club’s only real power to enforceparticular standards.27

What are the Benefits?Its participatory nature would be the key addedvalue of a multistakeholder GSI club. And the clubcould also provide a forum for coordinating anddeveloping the various functions discussed inprevious blueprints, including information collec-tion, dispute resolution, and accreditation, as partof an interlocking umbrella framework.

What Next? Three StepsToward Realizing a GlobalFrameworkA global framework to assist states in regulating theglobal security industry could be put in placequickly, based on the standards that already exist.The blueprints above are intended as discussion-starters for how this might come about. All threemain stakeholder groups—states, industry, and civilsociety—have an interest in considering whether itmay be possible to develop a comprehensive GSIframework. As one PMSC noted in its commentson a draft of Beyond Market Forces:

responsible industry players welcome … improvedregulation of the industry, more closely definedlegal status for companies and staff working in thefield, and effective mechanisms for company andindividual accountability… Aside from the clearethical imperative … we are also mindful of thebusiness benefits of differentiation and improvedperception of the sector.28

IPI recommends that stakeholders in the GSI takethree steps to develop a comprehensive globalframework based on the blueprints detailed above:(1) consult within stakeholder groups onframework options; (2) agree upon the negotiationprocess; (3) negotiate. These steps are based on areading of what is politically feasible, as well asnormative guidance drawn from the InternationalOrganization for Standardization, the WTOTechnical Barriers to Trade Agreement, and othersources on how such standards frameworksimpacting global business ought be developed.29

States should work with their civil society andindustry partners to convene a series of consulta-tions for each stakeholder group, and specific clientsegments, to consider what kind of frameworksmight be feasible. These consultations should eachproduce a simple statement of what the respectivestakeholder group considers feasible, and what“scope” any framework should have—ie., what itshould actually seek to regulate. These statementswill help to clarify whether subsequent effortsshould be channeled toward one shared framework,


26 See Part IV of Cockayne, Mears, et al., Beyond Market Forces.27 As is evident in the case of the VPSHR.28 Comments of Control Risks Group, September 30, 2008, available at www.ipinst.org/gsi. 29 For a detailed breakdown of what each step would entail, see Part V, Beyond Market Forces.

www.ipinst.org/gsi

or toward separate components, fashioned bydifferent groups of stakeholders, which might at alater date converge or become interlocking. Thediscussions will also establish which stakeholdersshould be at the table in the development of such aframework or its components.

Given the fundamental responsibility of states forensuring the effective implementation and enforce-ment of standards—particularly human rights andIHL—across the GSI, states should take a leadingrole in driving this process forward. But the

industry also has a responsibility to respect humanrights, and should do whatever it can to dischargethat responsibility. Civil society actors, clients, andGSI financiers also have important roles to play inidentifying those standards to which the industryought to be held, and constructing a frameworkwithin which implementation and enforcement ofthese standards can more effectively occur.Ultimately, only creative collaboration among allstakeholders will lead to improved practice acrossthe industry.


The INTERNATIONAL PEACE INSTITUTE (IPI) is an independent,

international institution dedicated to promoting the prevention and

settlement of armed conflicts between and within states through policy

research and development.

777 United Nations Plaza New York, NY 10017-3521 USA

TEL +1-212 687-4300 FAX +1-212 983-8246

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