Delta One and Operation Twist

Private security seems to be the only immediately available alternative to alleviate the widening security gap engendered by Delta One-like financial activity and Operations Twist.

Delta One finance
In terms of revenues, Delta One is perhaps the fastest growing segment of large financial institutions. Think of a small corner of a large financial institution where mathematical geeks and cowboy traders get together to engineer even more complex financial products that make disproportionably huge profits out of tiny deviations in indexes, for example those tracking the prices of commodities or values of currencies. Further layers of complexity are added to the already unstable mix and take the form of obscure derivative products, hedges, and securities, which, again, can be re-engineered and then sold and bought in the market. Hard to understand? Yes. Hard to explain? Yes, but that is the point. The CEOs of those financial institutions (and authorities) have no clue about what really goes on in Delta One. Hence, USB realized last week that it lost at least $2.3 billion from ‘unauthorized’ trading at its Delta One unit. No real capital is generated by Delta One, no backbone, just fat to feed the ever growing profits of those involved financial institutions (and the pockets of about 1% of their workforce), and fad to please and appease financial authorities.

Delta One imbalances
Have not Western governments learned about the risks that the merry-go-round of overly speculative finance such as Delta One pose to the global economy? The answer is simply no; they have not learned. Zillions and billions were poured into financial institutions when they brought the global economy to a standstill at the beginning of what will surely be a decade long financial downturn. A large proportion of those zillions and billions were supposed to filter down somehow to ordinary businesses and people, in order to kick start a return to economic growth. It never happened. The zillions and billions were used by financial institutions as the basis for a return to old days. If Western governments could print out money under the guise of “quantitative easing,” then they surely could have concocted something like “synergic (public-private) partnership finance,” whereby financial institutions could have been intervened and forced to lend the given public money to the ultimate desired beneficiaries. This action may have averted the crisis we seem to be sinking deeper by the day. Will the new round of $400 billion of quantitative easing in the U.S., called Operation Twist, make any difference with a government without teeth and synergic partnership finance? See similar initiatives launched throughout the G20 group of nations over the next few weeks and ponder the same question.

Delta One insecurity
The basic economic imbalances of the global economy brought about by overly speculative finance and the insatiable greed of financial institutions were never solved: no real capital (and jobs) created, just figures in balance sheets. Perhaps it is possible to think about the brotherhood of large financial institutions and its incestuous relationship with credit rating agencies as a new and unforeseen type of quasi-sovereign governance. Large financial institutions ultimately decide important aspects of your life and affect your well-being, but like governments now, they seem to be disconnected from what happens to ordinary people, in the real world. You are often hopeless if you want to bring banks to account. Large financial institutions are quasi-sovereign entities because in spite of national and international regulations, they seem to do as they please and governments are afraid of them. Nevertheless, the quasi-sovereign actions of these financial institutions are consequential and it is possible to argue that they have contributed to the climate of ongoing insecurity in which petty crime, civil disorder, and anarchism are fast becoming the order of the day.

Operation Twist law enforcement
As the economic outlook deteriorates, insecurity is on the rise. Indeed, the time might come when people start getting mugged for their supermarket shopping or a liter of milk. Under these circumstances, common sense would dictate a more robust approach to law enforcement. Really? While Operation Twist and other similar initiatives will hypothetically inject rejuvenating energy into the faltering global economy, none of the printed-out money is likely to impact law enforcement. The same situation happened during the previous rounds of quantitative easing and will happen again after whatever follows Operation Twist in the U.S.– probably a direct loan from China. In fact, in tandem with deteriorating public finances, law enforcement budgets have shrunk in real terms since 2008. Although only available for a price, private security is an available alternative for those newly concerned about their safety. Please do not think that Delta One-scale profits are being made in the domestic private security business (we are not talking here about homeland security and counter-terror), as rates have not experience a dramatic increase. Far from that, wages in the security sector have gone down in comparison to other areas of the economy due to an abundant labor supply, for example soldiers returning from Iraq and police officers made redundant to save public money.

Operation Save Yourself private security
Operation(s) Twist and quantitative easing generally have been the answer by state governance to our economic woes so far. However, the connection between rising insecurity and the collective actions of financial institutions (the new type of governance), and between rising insecurity and the need to spend more on law enforcement and policing, evades state governance. Can you think of any other alternative than the private security and military industries to fill the security gap? Quite frankly, we can not. That is to say, unless you believe that vigilante squads and armed neighborhood patrols are a good idea. Private Security Companies (PSCs) and Private Military Companies (PMCs) are correspondingly expanding their footprint in the domestic front and tailoring services to cater for a variety of budgets and needs because more and more people are demanding their services. Given that traditional governance fails to address people’s concerns about the need for more security, and financial institutions couldn’t possible care about it, this is a positive development. It is time to embrace Operation Save Yourself and think more positively about this new bread of private security.

London riots: civilian and private security

Three short paragraphs to help us reflect on the riots in London and other parts of the United Kingdom over the last week. As the response of society and the private sector to the riots has shown, these citations illustrate three trends rapidly consolidating and converging on one another.


From Private Armed Forces and Global Security:

On a different level, through many parts of the world, particularly the West, programs have emerged that empower citizens to take on law enforcement roles. These programs vary from country to country, but often they involve community police officers dealing with minor offences, members of voluntary organizations trained to respond in case of natural or terrorist disasters, and varied forms of crime awareness reporting. While for the most part these programs are designed to add to state efforts and encourage citizens to be alert, they in effect form part of the broader reconfiguration of the monopoly of violence. As well as ordinary citizens becoming part-time police officers ...

Taken from Ortiz, Carlos. Private Armed Forces and Global Security. A Guide to the Issues. Santa Barbara CA, Praeger, 2010, p. 158.

From our previous blog post, The Coming Global Revolution and Private Security:

Government’s outdated initiative and the re-engineering of collective security

Government has lost the plot and more and more people are loosing patience worldwide. As people increasingly look for alternatives for the growing list of security issues government is not longer able or willing to address, security is likely to start incorporating a broader range of non-state suppliers. While for the most part we have in mind security contractors when we think about non-state security supply, the time is coming for civilianized forms of security (neighborhood groups and militias for example) to compete systematically with established public and private security supply. This is the further branching out of an already bifurcated public-private security structure, which remains and under-researched and under-regulated area.

From The Telegraph’s story ‘London riots: 'we can't cope', police admit:’

The Met [The Metropolitan Police of London] suggested that businesses take “precautionary measures”, including conducting regular checks of their buildings and patrolling the surrounding area, adding: “Where possible, retail premises should be suitably staffed with security guards.”

We will not connect the dots for you, but we are sure you can imagine the opposing poles here: active private and civilian security and law enforcement adopting a more ‘ceremonial’ role.

2 May 2011 - Osama bin Laden killed - a day to remember

Also known as Usama Bin Muhammad Bin Ladin, Shaykh Usama Bin Ladin, The Prince, The Emir, Abu Abdallah, Mujahid Shaykh, Hajj, The Director, >> Osama bin Laden was killed by US Special Forces on a compound in the city of Abbottabad, Pakistan:

May 2, 2011: a good day for freedom, a day to remember!

In memory of the victims of 9/11 and 7/7:
http://www.privatemilitary.org/911.html

Libya Uprising Update 2: The fear of mass migration into Europe

The administrations of Prime Minister David Cameron (U.K) and President Nicolas Sarkozy (France) wanted the protagonist role in Libya, and so France and the United Kingdom got the job to impose a so-called “no fly zone” on behalf of the fragmented NATO response to the Libyan crises. Off course the no-fly-zone mission keeps metamorphosing by the day and now also embeds regime change and the training of rebels (by the U.K. as of today, but France and Italy signaled their intention to participate in the training as well); the latter task effectively implying a third-party involvement in a civil war. Haven’t we learned about the risks attached not to establishing at the outset and clearly the extent and scope of foreign military interventions since Afghanistan and Iraq? The answer is probably no. Considering that Europe (Germany aside) is still in the initial stages of economic recovery after the global recession, the question remains: why the UK and France got involved in Libya in such a bold manner, particularly considering that they seem to broaden their parallel and some may say competing roles by the day?

Human rights violations? Yes, that’s part of the reason. A little about oil reserves within close proximity of Europe? OK, probably that is part of the reason too. Moreover, there are also psychological connotations attached to the behavior of PM Cameron and President Sarkozy. PM Cameron was parading the Middles East on a business mission (together with key British defense contractors) when the Libyan conflict erupted - 10 Downing Street responded with amateurish PR. What followed was the debacle of the failed SAS mission to contact the rebels in which SAS personnel and British ‘diplomats’ got captured by the rebels and their sophisticated laptops with passwords practically next to them were seized (whoops again!). Leaving aside the fact that probably a good Private Military Company with their seasoned Special Forces personnel could do a better job for half the price, the debacle forced a more personal approach. Thereafter, once PM Cameron had a taste of military leadership for the first time in his premiership, which probably feels like a drug, it seems he got hooked on it. He is now in a moral as well as a military mission to heal Libya –let’s forget for a moment the fact that there is no money to sustain a long military campaign and hardly any sympathy from the British taxpayers who will ultimately pay for it. As for President Sarkozy, there is a nearly-messianic desire to be seen as a world leader.

We have already a potent mix behind the military intervention in Libya. For the time being, it looks like PM Cameron and President Sarkozy found their Iraq. In the background, however, there is a powerful issue that might help to explain better (and continue to guide) the European response to the Libyan crisis: the fear and longer term implications of mass emigration of Libyans, and Northern Africans broadly, into Europe. In this light, it seems prudent to ground empirically the issue. The figures below have been recorded by the United Nations High Commissioner for Refugees (UNHCR):

• Over 500,000 fled Libya during the first month of the conflict; about 80% of them foreign workers. There are no figures available on how many Libyans were outside the country when the crisis erupted, but these expatriates are unlikely to return to the country for a long time if ever.
• As of April 12, about 500,000 Libyans had left the country by land and crossed the border into adjacent countries; about 200,000 went to Egypt, 236,000 to Tunisia, 36,000 to Niger, 14,000 to Algeria, 6,200 to Chad, and 2,800 to Sudan.
• There has also been a continuous influx of Libyans into Italy (particularly Lampedusa Island) and Malta by sea. For example, between March 26 and April 12, 3,358 people reached Italy and over 1,100 Malta from Libya.
• The growing influx of Africans into Europe by sea is not restricted to Libyans. For example, on the weekend 9-10 April, three boats carrying 1,008 mainly Somalis and Nigerians arrived on Lampedusa Island (Italy). Between January 15 and February 15, about 5,200 Tunisians reached Italian territory; the media reports that the total since January is at least 25,000.
• Libyans want to go to Italy and Tunisians to France, their respective former colonial masters. Last week, Italy granted temporary permanent residence to about 25,000 Tunisians in Italy, so that they could transit freely within Europe and reach France. France denied entry to the first train carrying them in mass. If France eventually grants Tunisians entry, probably the French will be happy for them to reach the ferry terminal in the west coast so that they can head to the U.K.
• Europe is the prime destination word-wide for potential refugees. According to UNHCR, of about 358,800 asylum applications in the industrialized world in 2010, Europe received 269,900 of them (about 75%).

The reader can fill in the gaps and feel free to add other countries in transition such as Syria, Egypt, and perhaps Lebanon in the near future to the equation. The social and economic costs of a North African exodus into Europe would be astronomical and, we adventure to suggest, might have become the chief issue underpinning the growing role of Europe in the Libyan conflict. We do not need the next round of Wikileaks to make this point.

Libya Uprising: Update 1

[This comment was originally posted on our Facebook page. But as we have had 3 private messages already about the issue, we thought about sharing it here]

In reply to the private messages sent last week, we went ahead on our previous blog post and stated that the operation in Libya was NATO led before it was actually NATO. This is because in our opinion there was no other way it could have been organized. For the reasons stated on our previous blog post, the no-fly zone rationality was poorly sold to, in addition to the citizens of the countries enforcing it, the Arab nations the international coalition wanted to get involved as well. Without Arabs getting involved in the way ‘dreamed’ by France, the UK et al, NATO was the only alternative immediately available. Wise for the US to play only a marginal role, as this will go on now for a very long while and will cost dearly. We would be silly not to assume that foreign investment in Libyan hydrocarbons was one of the key reasons (important gas supply already prospected for Europe) to intervene. But even with Gaddafi gone, oil and gas production costs will increase importantly as foreign workers willing to go to Libya will be more expensive, so as insurance premiums. In addition, oil and gas production will need external private security, which is also expensive, and the risk of terrorist attacks will increase manifold in the Western world (and Qatar). Would that continue to make Libyan oil and gas that attractive? Wait one year to see the struggle to attract peacekeepers to secure Libya if rebels win. If the ragtag rebellion does not win, perhaps Brazil, Russia, India, and China will prove in the longer term wise to have abstained during the UNSC resolution vote.

In the next update we shall comment about the big elephant in the room, i.e. with reference to the decision of the Europeans to get involved pronto in spite of the precarious financial situation in many European countries: the fear of mass migration and a tidal wave of refugees, which have already started.

Who will pay for Libya’s military campaign?

In our previous post, we commented that one of the issues that concern us is the eroding connection between government and people. The onset of the military campaign in Libya appears to corroborate the issue. Critically, in addition to Libya itself, the obvious example here, the “no-fly-zone” military campaign is a multilateral example bringing together many leading governments. For some of us who read United Nations Security Council resolutions, we are aware that actions on the ground tend to differ from the grand and economic language adorning UN resolutions. However, the majority of people understood that the enforcement of a “no-fly-zone” would probably mean a very limited military campaign and not the broader military operation under way and just in its infancy. Appearances can be deceiving. Yet the failure of NATO to explain people coherently what exactly was meant by a non-fly zone, or to be more precise to explain the extent and scope of the military operation in Libya, only shows poor communication between government and people. Just a few days after the onset of the operation people are starting to think that what is unfolding is not exactly what they had in mind. Please note that we are not arguing about the rights or wrongs of imposing a no-fly-zone, but using this example simply to illustrate the growing gulf separating government and people. This issue will be amplified now that NATO has opened a new Pandora’s Box. With the dire economic situation across NATO countries (a noteworthy exception is Germany, which is not currently participating in the operation due to disagreements about the scope of the operation), who will pay for what is likely to be a lengthy military intervention? Democracy is a political system and not a natural virtue. It will take many years for Libya to make a transition to a fully fledged democratic system, i.e. after whichever Libyan armed faction wins on the ground with NATO assistance. Have we learned from Afghanistan and Iraq? Can ordinary people stomach further tightening their belts to pay for a new military campaign? Some explanations are in order. Sadly, it appears that the nations leading the military campaign cannot agree between themselves about what are the longer-term goals to be achieved in Libya, let alone communicating those goals to their citizens. People across the Arab world will understand the premises behind the NATO-led military campaign in Libya even less. It seems that Brazil, Russia, India and China, which abstained from giving their yes vote for a military intervention, are more in tune with people -even if they abstained for different political and economic reasons altogether. Oh yes, expect the private military industry to participate in the reconstruction of the country, but discussing this role belongs to a blog post a few months down the road.

The Coming Global Revolution and Private Security

Early in 2010, we were at one of those gathering in which people from all sectors discuss global politics and the private military industry. We commented that we saw all the elements in place for what can be referred to as the early stages of a global revolution. We did not suggest Armageddon, but that levels of violence and social unrest across the world would significantly and systematically increase. From new insurgencies to mass protests and anarchy and from the U.S. to the corners of the world, we are talking here about a broad spectrum of evens and places. In the highly interconnected world we live in, there is no precedent (or strategy) to deal with a problem of this magnitude.
All these issues are part of the Coming Global Revolution and Private Security, which was originally the theme we wanted to develop during 2010. However, we thought it was just not right to talk about more doom and gloom given the protracted financial downturn we had just entered. Things have change dramatically over the last few weeks though. The events unfolding in the Middle East and more demonstrations and social unrest spreading throughout the developed and developing world show some of the trends that make a global revolution, more than an academic idea, an unfolding reality. Throughout the rest of the year, we will elaborate on some of the issues that worry us. Meanwhile, the following bullet point ideas can give you an idea of what we want to write about.

Persistent inequalities and “imaginary capitalism”
In the private military and security industries, companies come and go, some giants emerge and some dwindle, and some corporations do much better some years than others. Wages also fluctuate according to offer and demand. Real services or products are delivered too, but they generate profit margins that fluctuate in synchronization with real world variable. However, for many other commercial sectors there seems to be an unrealistic notion that profits need to grow exponentially on a yearly basis, regardless of anything happening in the world that would strongly indicate otherwise; the hedge fund and derivative finance industries are paramount examples here. If major economies are contracting, people working under the premises of “imaginary capitalism” continue to make record multi-billion profits, year on year. How and why? It is a hot air balloon that will crash again, but will hit us even harder given interlinked financial and global security issues.

Finite commodity supply and spiraling inflation
The day of cheap food and basic commodities prices are long gone. Add to this all the semi precious and rare minerals and metals needed to make all the technological gadgets essential for everyday life. Standards of living are also rising in large segments of the developing world, which incidentally are contributing positively to raise the economic outlook of an otherwise seriously depressed global economy. There are also security concerns affecting the continuous supply of commodities as well as their transport across the globe. While some of us are simply learning to accept this as perhaps the new status quo, for segments of the world population higher prices could easily translate into, for example, widespread hunger and social strife. Further add to this already unstable equation the capricious pressures speculators operating under imaginary capitalism principles exert on supply and consumption prices. No easy solution here. However, broader private security solution will be needed at every level of the production-to-consumption cycle. The structure of international security is being irreversibly changed by these issues alone.

Government’s outdated initiative and the reengineering of collective security
Government has lost the plot and more and more people are loosing patience worldwide. As people increasingly look for alternatives for the growing list of security issues government is not longer able or willing to address, security is likely to start incorporating a broader range of non-state suppliers. While for the most part we have in mind security contractors when we think about non-state security supply, the time is coming for civilianized forms of security (neighborhood groups and militias for example) to compete systematically with established public and private security supply. This is the further branching out of an already bifurcated public-private security structure, which remains and under-researched and under-regulated area.

Non-state and non-private security suppliers
In light of the emerging security supply dynamic in which the public and private sectors cease to be the chief suppliers of security, the affected people would be less likely to wait endlessly for multilateral and foreign players to intervene in conflicts or to look for the alternatives on offer by private military and security companies. As noted above, security supply would simply bifurcate into a process whereby the alternatives are formal public or private supply (perhaps openly competing with one another in parts of the word) and a variable and unstable array of civilianized forms of security. Security supply interlinked to international criminal organizations and local mafia groups will inevitably become a readily available alternative to many communities to consider.

The virtual domino effect in the absence of a an alternative future
Perhaps in a few years time people might say that the global revolution started in North Africa, maybe in Tunisia. However, this has been going on for a long while. Social movements are increasingly amplified and propagated through online means and the instantaneous news cycle. Are the people in North Africa and the Arab world the only ones dissatisfied with government? If you listen to the conversations, it is not simply that they have been ruled by dictators and autocrats for generations, it is generalized dissatisfaction with government on any form. Hence, the same underlining narrative is detectable in conversations taking place in many democratic and so far secure domains. It is concerning!

Maybe within the next decade we might see large scale and sudden mobilizations of people across borders while escaping natural or social disasters. This is likely to meet with the militarization of borders, airports, ports, and other travel hubs, whether involving public, private, or non-state and non-private security suppliers. It is just a matter of who is willing to satisfy immediate security demands. Henceforth, the selling price of this security supply becomes a market variable that is not necessarily adjusted upwards or downwards in accordance to risk factors, as it is the case now; thus, traditional public or private security supply alternatives can be easily displaced by non-state alternatives.

Private Armed Forces and Global Security

In the preface to the first edition of Private Armed Forces and Global Security, Ortiz writes that when he started researching the subject of his book, back in the mid 1990s, people sometimes thought of him as perhaps an arms dealer disguised as an academic. Times have changed and now nearly everyone has an opinion about the growing use and proliferation of Private Military Companies (PMCs). PMCs take center stage on this book. However, the narrative also covers the main types of adverse private forces, such as terrorist networks, insurgents, rebels, mercenaries, pirates, and the paramilitary wings maintained by drug cartels.

Private armed forces are nothing new. The estimated ratio of contractor to military personnel during the American Revolution was about 1 to 6. However, the use of PMCs has proliferated exponentially since the 1990s, and today, they are sometimes seen as a threat to global security. But are PMCs dangerous or a necessary adjunct to U.S. forces and international peace and stability missions?

A common misconception about what PMCs are and do originates in a tendency to equate PMCs with the types of adverse private forces noted above, particularly mercenaries. Far from it, Ortiz disentangles all these types of actors an situates PMCs opposite them, as entities ultimately hired to counteract the advances of adverse private forces and in the process to enhance global security.

Indeed, this fresh approach makes Private Armed Forces and Global Security to go beyond conventional knowledge, offering both a theoretical approach and a new, practical perspective of the ongoing climate of global instability and relevant players within it. Moreover, numerous examples and appendixes (including extracts from key security regulation documents, profiles of international terrorist organizations and drug cartels, and lists of PMCs) help the reader grasp the full range of real-world challenges and conceptual facets surrounding this fascinating, yet highly polarizing topic. We at PrivateMilitary.org are happy to introduce a book that addresses complex issues in an accessible manner and introduces a fresh and original approach towards the understanding of PMCs. B r a v o!


ABOUT THE AUTHOR: click here

TABLE OF CONTENTS: click here

GREENWOOD CATALOG
http://www.greenwood.com/catalog/C35592.aspx

LIBRARY OF CONGRESS LCCN Permalink
http://lccn.loc.gov/2009046663

Lost: advanced preview of series six

Security contractors in the final series of Lost? Well, when commercial interests meet risk, we will always find security contractors. Not just now, as the use of contractors has been a constant throughout modern history. However, we are not talking here about Lost, the popular TV series in which security contractors have featured. We are talking about the new “lost generation” because of the global financial downturn. There have been previous similar lost generations. Let’s recap some of the outcomes of having lost generations with relation to issues of war and peace, and contractors.

Lost (generations), the historical series

Series 1: the lost generation after the Great Depression. Growing up in the interim period between the First and the Second World Wars, this generation learned to love the idea of peace while always been aware that another great war could happen. The suspicion was confirmed when the United States entered the Second World War.

Series 2: the lost generation after the Second World War. This generation respected the notion of the president taking the country to war when he judged it necessary. There was little awareness that contractors have become part of the machinery of war by then. After all, defense was a matter for the state and people had to obey the call to arms when raised by the president.

Series 3: the lost generation as a result of the Vietnam War. Please remember that there was conscription for this war and enormous casualties. This lost generation learned of activism. There were an escalating number of protests as it became clear there was no foreseeable horizon to bring this war to a successful conclusion. The lesson learned by this generation was that the president could take the country to war, but he had to take people’s concerns into consideration when making such decision.

Series 4: the lost generation after the depression of the early nineties. The Cold War was over and conscription seemed to be a practice belonging to previous eras. Government learned that military undertakings abroad had to rely on the professional and voluntary army. However, the killing of soldiers in Mogadishu, Somalia’s capital (the so-called Black Hawk incident), prompted a rethink of the involvement of soldiers in distant conflicts. In simple terms, people were not comfortable with the idea of casualties anymore. The rise of Private Military Companies (PMCs) was in full force by then. Yet people did not have the faintest idea that force could not be deployed anymore without massive help from contractors.

Series 5: the first lost generation of the 21st century. Our generation has been exposed to something bewildering: the unexpected inability of many people to find a job even after attaining a university degree or when well-qualified. Questions are also increasingly asked about the previous unquestionable presidential prerogative to take the country to war without sound justification for it. These are the echoes of the Iraq war, which will be heard for a generation or two.

Series 6: The Afpak lost generation. Young people are increasingly asking government, do you really need to spend all those billions over the next decade in the wars in the Middle East. Here, we are not debating the rights or wrongs of the wars in Iraq, Afghanistan, the broader engagement in the Afpak theater (involving Afghanistan and Iraq), and who knows where else in the future (maybe Yemen or Iran). We are simply highlighting an issue that is in the mind of the soon to emerge lost generation, the ones who will be running the world when some of us are old.

This is a particularly lost generation. On top of the people that make it suffering from an early realization about the future struggle to find a dreamed job or any job at all upon entering working age, these young people do not hear answers to their questions about the reasons behind military deployment and do not take no answers as the status quo of things for granted anymore. There is also a broader realization not fully identifiable in previous generations about the costs incurred by the taxpayer during wars, and their future implications for the national economy. Series six of the lost generation promises to be full of surprises and we can only hint some of the issues involved here.

UK calls for private military code of conduct

The British Foreign and Commonwealth Office (FCO), headed by David Miliband, announced last Friday the endorsement of the establishment of a Code of Conduct for UK-based Private Military and Security Companies. Some analysts were excited to hear something was finally happening since the release of the Green Paper “Private Military Companies: Options for Regulation” in February 2002. Think twice this is good news.

In the UK, regulation dossiers have been collecting dust in a small and not well lit office for some time now. We should remind you that the Green Paper put forward three options for regulation: a ban, self-regulation, or the establishment of a licensing system. Anyone who has been following the debate longer than after Iraq converged to the same conclusion: while codes of conduct are desirable, a licensing system is necessary. To be more specific, a licensing system inspired by the one used by the US to regulate its international defense and security sectors. This just means clearer rules to the game and a balanced ascription of responsibilities between the public and private sectors. Why then self-regulation, read code of conduct, has been suddenly moved to the top of the agenda?

The reasons appear to be threefold. Firstly, the growing importance of the Montreux Document; secondly, the personal ambitions of David Miliband; and thirdly, it is cheap.

The “Montreux Document on Pertinent International Legal Obligations and Good Practices for States Related to Operations of Private Military and Security Companies During Armed Conflict”, an initiative led by the government of Switzerland and the International Committee of the Red Cross, has proved to be the first constructive attempt to update international humanitarian law in a decade. The UK and the US endorse it. To implement it, however, there is no need of new public consultation, as the FCO announced. After the Green Paper, there was extensive consultation, even a conference, and the stage moved to the executive exercise. That is to say, unless you want to ignore the previous trajectory in order to further your political career, which is sad and ultimately undermines the spirit of the Montreux Document.

The government of Gordon Brown is deeply unpopular, and sinking fast. Miliband is widely touted as a potential new leader of the Labour Party. He appears to be recasting the debate as a way to get some limelight. Parliament goes on recess between July 21 and October 12. This issue can linger nicely throughout the summer, grab some headlines leading to the Labour Party Conference in the fall, and probably beyond, if the debate is hijacked by far-left activists and MPs.

It is cheap too. For the time being, it liberates the British government from the need to create the British versions of AECA, ITAR, and USML, as well as their reengineering into a program that also acknowledges the rights of rare species of ants and elephants 3,000 years from now, as the British government increasingly requires. However, we bet you that any associated costs, which surely would include new duties, fees, and taxes, will be passed to the industry, together with some unrealistic and costly oversight measures as a result of the new consultation.

We are therefore a little skeptical this is a positive development. It is inevitable the Labour government will be replaced by mid-2010. Thus, why not leave the issue to the incoming government rather than rushing to pass half-cooked measures? Please ask David Miliband.