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.

After the London G20 Summit

Old, new, and quantitatively eased

So the US and the UK wanted the world to replicate their strategy of printing money (called ‘quantitative easing’ when it is not done by Third World countries) at the touch of a computer key and old Europe to push for new standards of global financial regulation.

At world summits, heads of state always win. The strategy is simple: argue loudly that you want to achieve A; have your teams working on the sidelines on plan B; but always the ultimate goal is to get to C.

The US and the UK wanted other central banks to create money out of nothing at all (plan A). The American and British governments are worried that without a global leveling effect their economies might sink deeper. This is because they might have triggered an inflationary bomb by printing money. B teams were busy repackaging yesterday’s policies and reinterpreting the plans of global financial institutions. The overall result of the exercise, the backup plan, was to present what has been done and said anew. Meanwhile, plan C was achieved. The IMF has been charged with the task of printing $250 billions of new money. The ‘whole world’ will ‘benefit’ from it, as the money will be proportionally disbursed according to voting rights at the IMF –Google the IMF voting share.

France and Germany wanted tighter financial regulation in order to prevent any similar financial crisis repeating. Really? Now that the world is being reorganized, plan A has always been to curtail a decade of expansion (and bust) of Anglo-American financial dominance. Plan B, the backup plan, was to agree to nothing and theatrically justify it. Meanwhile, plan C was achieved. By raising the profile of the IMF, traditionally dominated by old Europe, France and Germany are likely to play a leading role forging the new global financial architecture.

In short, the summit was a success and for a couple of weeks financial markets will be happy. Thereafter, we go back to the burning topic G8 heads of state failed to address, the elephant in the G20 summit room: how to deal with the toxic assets hidden in American and European banks’ balance sheets, of which we have only seen the tip of the iceberg. Therefore, a deteriorating world security prognosis remains.

The UK police authorities left certain building, the branch of a financial institution that is the current focus of popular outrage, partially exposed. The crowds smashed windows, destroyed some equipment, and ventilated their frustration. The crowd-control strategy worked for the time being. However, we repeat: available public and private security means are insufficient to deal with a sudden escalation of civil disorder in a global scale. This is the real world; there is no plan B or C here.