Tuesday, May 16, 2006

Anyone Home?

Bonjour Tana! Judging from my hitmap, no one from Madagascar has ever visited this site. I must admit, I know very little about the 'Red Isle,' other than that it was one of the locations considered by the Zionists for their homeland (they chose Israel. Hmmmm....). Since reading David Graeber's fascinating "Fragments of an Anarchist Anthropology," which largely chronicles his time in Madagascar (and for which he was fired from Yale), I have been fascinated by the place--but no visitors! Anyone home? I know they have internet... Peut-etre si j'ecris en Francais les Malagasy me lirent plus? Probably not since I'm pretty bad at that...

Anyway, I'll be on vacation for the next 2 weeks, so maybe by the time I get back there will be a nice red dot hovering over Antananarivo?

The Great Game

The global struggle for geopolitical domination never really stops, but it certainly has its periods of storm and calm. Historically, the storm never seems to develop quite where people are focused. Right now all eyes are turned towards a potential US confrontation with Iran—and as a result, virtually no one is watching the recent moves made by the Shanghai Cooperation Organization (SCO).

Founded (out of the Shanghai Five Mechanism) in 2001 between China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, the organization’s stated goal was to facilitate “cooperation in political affairs, economy and trade, scientific-technical, cultural, and educational spheres as well as in energy, transportation, tourism, and environment protection fields.” Recently, however, the SCO is beginning to look more like a modern-day Warsaw Pact, an energy-financial bloc in central Asia consciously constructed to serve as an anti-pole to US hegemony.

While no such intention is explicitly stated by the group, recent actions speak for themselves. So far in 2006, the SCO has extended de-facto offers of membership to India, Mongolia, Pakistan, and most importantly to Iran (who will officially be invited to become a full member at the SCO June 15th meeting). Beyond their expansion, the SCO member states are also taking steps to separate themselves from US-petrodollar imperialism: Russia has announced that it will open a Ruble-denominated oil and gas bourse in late 2006; China recently announced the intention to move its reserves away from the dollar and that it will use $40 billion in US dollars to purchase gold reserves; Russia’s state-owned, Vladimir Putin-controlled natural gas transport monopoly Transneft has further consolidated its pipeline control to become the sole exporter of Russian natural gas (by far the largest reserves in the world). With Iran, the SCO will control the vast majority of the world's natural gas reserves, as well as a significant portion of its oil reserves, not to mention potential control of the Strait of Hormuz.

These moves are significant because they amount to an act of energy encirclement. Central Asia, the greatest remaining promised land for oil and gas development, is completely enveloped within the SCO, limiting hydrocarbon access to non-SCO nations. China ensures the supply of energy that it will need to continue its amazing economic growth. Alternative supply sources of oil and gas to Europe now run exclusively through SCO-controlled export pipelines, allowing for a new OPEC-style cartel to bleed Europe at the optimal rate. And the ability to force the West to purchase energy in something other than dollars (to a greater extent than is currently the case) will help balance China’s export-driven surplus of foreign currency—at least until the rise of a consuming middle-class in India and China can become a self-sustaining market for their own economic production.

To the extent that this maneuvering is a move to encircle the energy supplies of central Asia, and to form an effective energy-cartel, the combined pincer maneuver is decidedly pointed at the trans-Caucus region: Georgia and Azerbaijan. With the addition of Pakistan and Iran to the SCO’s geostrategic alliance, the only remaining point of access to the riches of Central Asia are through those two nations—and the West’s “great white hope,” the Baku-Tbilisi-Ceyhan pipeline, runs precisely that route. So rather than looking towards conflict in Iran (which seems increasingly likely to be a unilateral exercise with Russia and China’s veto power firmly behind Iran at this point), perhaps we should be more carefully watching events in Georgia and Azerbaijan, as these nations represent the critical battleground between the SCO and the “West.” Russia has long been involved with fomenting problems among the Ossettians (South Ossettia in Georgia, North Ossettia in Russia), but Georgia is a traditionally Western-looking nation. More attractive to the SCO is the prize of Azerbaijan--an Asian nation with its own hydrocarbon reserves and a complete connection of the encirclement between Iran and Russia. Expect to see interesting developments regarding Azerbaijan after Iran is solidified as an SCO member on June 15th.

Thursday, May 11, 2006

The Private Law of War

Security will become a function of where you live and whom you work for, much as health care is allocated already.
- John Robb[1]

Ten years ago, a common perception was that military logistics firms did little more than provide cafeteria services or laundry outsourcing to US bases overseas. Mercenaries, on the other hand, were seen as pariah outfits operating in African backwaters, but not employed openly by major powers or respected corporations. While such perceptions were never entirely accurate, today these two worlds have very publicly merged and exploded onto the international scene in the form of the modern Private Military Corporation (PMC). While the first Gulf War had a ratio of government soldier to private contractor of over 100:1, the current conflict in Iraq has a ratio of less than 10:1.2 In fact, The Economist called this conflict “the first privatized war.”3 The awarding of multi-billion dollar logistics contracts to firms like Bechtel and Halliburton was highly publicized,4 but there was much less publicity about the direct combat role played by private contractors in today’s conflicts, or about the extensive use of PMCs beyond Iraq and Afghanistan. Despite the lack of publicity, this expanded role led to increased concerns by several observers that PMCs were increasingly committing human rights abuses, and that the lack of transparency, regulation, and clear rules on liability for their operations was facilitating such behavior.5 At present, the legal status of Private Military Corporations is largely ambiguous.6 The rapid pace of innovation and the huge profit potential within the industry has outpaced the development of legal norms and regulations, resulting in a dangerous legal vacuum where PMC operations proceed largely unchecked.

In this paper I will address the rapidly changing legal environment of Private Military Corporations. I will first provide an overview of developments within the industry. I will then address the problem of differentiating legal private military functions from prohibited mercenarism with an overview of the development of prohibitions on the use of mercenaries. I will discuss various attempts and plans for regulation of PMCs at both the international and national level, along with the difficulties of developing any such regulatory regime. Next I will cover problems of international liability within the private military industry and attempts by both PMCs and regulation advocates to shape the legal environment. I will conclude with future concerns and recommendations.

I. Introduction to the Modern PMC

A recent Harvard Law Review symposium declared today the “Era of Privatization.”7 While the privatization of government functions has demonstrated its ability to save money,8 many draw the line at privatizing functions that are closely intertwined with fundamental human rights, arguing that fundamental principles must not be sacrificed to save money.9 Among traditional monopolies of the state, the functions of security and warfare have perhaps the greatest potential impact on basic human rights. Concern over this potential impact on human rights is driving increasing scrutiny of the role of privatization within the traditional state functions of military and security operations.10 While the United States has been a leader in the privatization of military logistics and support, it is just now catching up with many other nations in the more problematic outsourcing of combat support and direct combat operations.11 Are these private corporations merely extensions of traditional military contractors, or are they a new manifestation of the mercenary, shielded behind a veil of corporate legitimacy?

Mercenaries played a prominent role in modern history, proving to be influential and often decisive participants in the numerous post-colonial conflicts that rocked Sub-Saharan Africa after World War II.12 Today’s Private Military Corporation, however, is quite different from the loose groups of ex-patriot soldiers that once plied the Third-World. Today’s PMCs are often billion-dollar operations13 with respectable offices in Washington or London, and publicly traded stocks.14 Does this fa├žade really differentiate PMCs from mercenaries? Perhaps more importantly, how should they be treated amongst the broad spectrum of non-governmental organizations?

One traditional way to differentiate “acceptable” PMCs from mercenary firms is to classify the former as support and logistics providers, while reserving the label “mercenary” for those who actually participate in combat operations. Of the 20,000+ private contractors currently employed in Iraq,15 the majority are cooks, truck drivers, construction workers, maintenance technicians, and laundry operators. While these may be mundane jobs, they are of no mundane significance—Halliburton’s contracts alone in Iraq are estimated at more than $15 billion.16

Beyond the more publicized role of PMC contracts providing logistical support to military operations, PMCs are increasingly involved in more controversial combat support roles. The PMC DynCorp was awarded a contract to provide specialists to interrogate prisoners at Abu Ghraib prison.17 A Delaware-based PMC affected the extraordinary rendition of two Egyptian nationals from Sweden to the US under government contract.18 The Virginia-based company MPRI (Military Professional Resources International) was hired by the US government to help the Croatian military defeat Serbian forces, helping Croatia to acquire controlled and highly-sensitive radar technology from Russia in the process.19 Vinnel Corporation provides training to Saudi military forces.20 As the aggressive nature of these “support” contracts demonstrates, PMCs are increasingly blurring the boundary between combat support roles and direct combat operations. While direct combat roles have been a regular part of the business plan of outright mercenary firms such as South Africa’s Executive Outcomes,21 the United States also now regularly contracts with PMCs for direct combat operations. Firms such as Blackwater USA and Triple Canopy provide hundreds of combat personnel to serve as armed escorts to ground convoys in Iraq.22 Evidence suggests that PMCs are taking on more dangerous direct combat roles in Iraq than uniformed US personnel: there have been 330 combat fatalities among the roughly 20,000 PMC personnel but only 2428 fatalities among the roughly 150,000 uniformed personnel, representing a slightly higher fatality ratio for contractors than for uniformed personnel.23

While convoy-escort contracts in Iraq are the most blatant US use of PMC personnel in direct combat roles, they are by no means the only example. In Colombia, the deceptively-named American corporation Virginia Electronics conducts riverine combat operations as part of Plan Colombia, directly engaging both paramilitaries and FARC rebels.24 In Peru, the US PMC CACI is under contract with the DEA to identify and shoot down drug smuggling planes.25 Raytheon Corporation’s “Big Crow” program is another example of direct combat activity by PMCs. Big Crow, an airborne electronic jamming platform, was piloted and operated by Raytheon personnel during the recent Iraq War. The aircraft was fully integrated into the US Air Force ATO (Air Tasking Order), and directly engaged in offensive military operations against the Iraqi military while under non-government civilian control.26

The growth of privately-contracted military activity under the auspices of corporate respectability would not be so troubling if not for the continuation of the tradition of mercenary abuses. The adventurer-mercenaries of Post-Colonial Africa were noted for increasing “the violent and cruel nature of specific aspects of the conflict in which they are involved.”27 Unfortunately, the current record of Private Military Corporations is little better. Employees of the American firm CACI, under contract with the US government, acted as interrogators at Abu Ghraib and reportedly directed or participated in some of the horrendous abuses associated with that detention facility.28 Employees of the American PMC DynCorp stand accused of rape and running underage prostitution networks in association with their security duties under contract with the US military in Bosnia.29 Other PMCs have been recently accused of everything from killing Ecuadorian peasants by spraying their villages with toxic defoliants,30 to accidentally shooting down a missionary plane incorrectly suspected of drug trafficking,31 to numerous other significant violations of human rights. Perhaps most alarmingly, among the most publicized violations of human rights by PMCs, no firm or individual has recently been held accountable for their actions under either civil or criminal law.

II. Difficulties in Prohibiting Mercenarism through International Law

Following the Peace of Westphalia and the dissolution of Wallenstein’s 120,000-man militia,32 the state has been the traditional locus of military action in the international community.33 Since that time, and especially after World War II, there developed among the international community a broad perception of a prohibition against mercenarism. Unfortunately, the ground truth of state practice has not paralleled this theoretical development. While some types of mercenary activity are clearly and explicitly prohibited by international law, a careful analysis of international norms related to mercenarism reveals a de-facto endorsement, not prohibition, of such conduct. This apparent contradiction stems not from the lack of treaty law outlining mercenarism-in-theory, but rather from the difficulty in applying that law to the modern activity by Private Military Corporations. As P.W. Singer observes, “[w]hat little law exists has been rendered outdated by the new ways in which [PMCs] operate. In short, international law, as it stands now, is too primitive in this area to handle such a complex issue that has emerged just in the last decade.”34 Specifically, the existing prohibitions on mercenarism fail in their very definition of “mercenary,” rendering them largely inapplicable in practice (if not in theory) to modern PMC operations. This definition fails, not because it attempts to differentiate between support and combat roles, but because it grounds the definition of “mercenary” on several attributes of individual participants such as nationality and profit motive that are either inapplicable in today’s context or nearly impossible to prove.

Modern international law dealing with mercenaries begins with the 1949 Geneva Convention, which afforded the convention’s prisoner of war treatment standards to anyone who was part of the legally defined armed force, but did not provide those protections to private groups operating outside the aegis of a state military.35 The next major step in the development of the international prohibition on mercenarism was the 1970 Declaration of Principles of International Law Concerning Friendly Relations and Cooperation Among States.36 The Declaration stated that all states have an obligation to prevent the organization of private armed groups for incursions into other countries, but did little to distinguish what was specifically prohibited, and left enforcement to the state in which such mercenaries were operating. As these subject states were normally nascent Sub-Saharan African nations, their prospects at effective enforcement were virtually nil. While the 1970 declaration had the intent to prevent one state from utilizing a mercenary force in support of rebels in a neighboring state, the real impact was to legitimize the use of mercenaries by governments against internal rebels.37

The Additional Protocols to the Geneva Convention of 1977 were significant because they provided for the first time a clear test for what qualified as a “mercenary,” and specifically denied Geneva Convention protections to this class.38 However, the 1977 Additional Protocols failed to explicitly outlaw mercenarism, and instead only denied certain protections to mercenaries. Additionally, the definition of mercenary provided by the Additional Protocols was highly problematic. The problematic portion of the definition of “mercenary” is the requirement that a mercenary be an individual who is motivated to take part in the conflict by private gain substantially in excess of that paid to the uniformed military participants and who is not a national of a party to the conflict or a resident of the territory of a party to the conflict.39 This definition was aimed at the individual, ex-patriot adventurer-mercenaries prevalent in post-colonial Sub-Saharan Africa, but is uniquely inapplicable to modern day PMC employees, who are often residents of one of the parties to the conflict and represent a corporate, not individual presence in the conflict. Even in those cases where the definition seems applicable, it may be impossible to prove the financial motivation of each individual, as individual motivation does not easily submit to an objective test and there are numerous plausible, alternative motivations: adventure, sympathy for the cause or plight of one party to the conflict, etc. A British government report on this definition of “mercenary” concluded that it was so flawed as to make mercenarism “not an offense under international law.”40

The most recent attempt at defining and outlawing mercenarism was the 1989 International Convention against the Recruitment, Use, Financing and Training of Mercenaries, more commonly known as the UN Mercenary Convention.41 The UN Mercenary Convention, while more clear on expressing an international prohibition on mercenarism, follows in the footsteps of its predecessors in failing to provide a workable definition of mercenary. It contains the same essential weaknesses as the 1977 Additional Protocols to the Geneva Convention; specifically, that a mercenary is an individual, that he is motivated by financial gain, and that he is not a resident of the territory of any party to the conflict.42 The perpetuation of such an unworkable “prohibition” was possibly the true intention of the African nations that were the driving force behind the UN Mercenary Convention. These nations were increasingly dependent on the services of a new breed of corporate mercenarism—embodied by the South African firm Executive Outcomes—and they were careful to not update the definition of mercenary in a way that might jeopardize the availability of these services. In the 1980s and 1990s, Executive Outcomes played an instrumental and often decisive role supporting African governments as a direct combat provider (but not meeting the UN Mercenary Convention definition of “mercenary”) in Angola, Sierra Leone, Uganda, Kenya, and Congo.43

Beyond definitional problems, the UN Mercenary Convention also fails to convince of a Customary International Law prohibition of mercenarism: it was not ratified by the 22 states necessary for it to come into effect until 2001, nearly 12 years after its signing, and it has not been ratified by any major power.44 This lack of endorsement by any major power, coupled with broad state practice to the contrary, actually supports the formation of Customary International Law legitimizing mercenarism, at least as practiced by modern PMCs: over 50 states currently serve as patron nations to PMC firms, offering them licensing in one form or another.45

Given this murky state of international law regarding mercenarism, it is tempting to observe that there is no law and all loophole. While some activities certainly remain prohibited, they are not the kind currently in practice, nor do these prohibitions seem applicable to any of the broad spectrum of current PMC activities. What international norms do apply to PMC conduct? An analysis of the various national plans for PMC regulation will demonstrate that few, if any, norms of conduct are sufficiently universal or enforceable as to create an obligation under international law.

III. National Regulation of PMCs

The prospect of developing an effective regulatory environment for PMC activity through individual nation regulation is problematic for two reasons: mobility and enforcement. While many PMCs, especially in the United States, are firmly linked to a single government sponsor, many are increasingly gaining their “sea legs” as multi-national corporations without inseverable ties to any one nation. This mobility creates the possibility that regulation will merely drive a PMC to a more permissive environment, much as tax havens or ship registry currently operates. Indeed, this phenomenon has already defeated the most ambitious regulatory schemes. When the South African firm Executive Outcomes (EO) officially closed due to a new regulatory environment, its subsidiary, Lifeguard, continued operations in Sierra Leone with many of the same executive staff.46 EO founder Eben Barlow noted, in response to the new South African regulations, that “three other African countries have offered us a home and a big European group has even proposed buying us out.”47

In addition to problems of corporate mobility, national regulations face the difficult prospect of effective enforcement. The majority of states that employ PMCs within their territory do so for the very reason that they do not have military capability possessed by the PMC, and therefore are unlikely to have the ability to hold that PMC directly accountable for their actions. This removes the possibility of enforcement to those states that can offer an effective forum. However, political considerations may prevent an otherwise effective judicial system from holding PMCs accountable, as was clearly demonstrated in the US in the Sarei case (discussed in detail below), as well as by Germany’s refusal to hear the claims of Abu Ghraib detainees due to the issue’s political sensitivity.48

Despite the problems with national regulation of PMCs, an overview of current regulatory schemes is necessary to establish the current extent of the legal vacuum. Most regulatory schemes operate under the patron-state concept that a PMC located in a given nation must receive some form of licensing from its host nation, and must have that nation’s approval for its international operations. The three principle PMC patron-states are the United States, the United Kingdom, and South Africa, each of which have, or are contemplating some type of a regulatory regime.

The United States has a minimal regulatory regime. While the Neutrality Act prohibits the recruitment of mercenaries within the United States, it does not prohibit US firms from conducting military operations abroad.49 Similarly, the Uniform Code of Military Justice (UCMJ) regulates the behavior of uniformed personnel abroad, but not that of civilian contractors.50 The Military Extraterritorial Jurisdiction Act was intended to extend UCMJ jurisdiction to contractors as well, but it only covers those contractors working directly for the Department of Defense51—not, for example, the CACI contractors implicated in abuses at Abu Ghraib, who were actually under contract with the Department of the Interior.52 Additionally, liability for actions under the UCMJ only permits criminal charges to be brought at the discretion of the US government, but does not provide a mechanism for foreign victims to seek civil compensation for damages caused by PMCs. This focus on the individual actor represents a systemic failure to impose sufficient costs on the PMC as a corporation to provide an economic disincentive to human rights abuses. Beyond this limited accountability under the UCMJ, there is also a limited licensing process under the International Traffic in Arms Regulations (ITAR).53 Under ITAR, the State Department and Defense Department both have some inputs into licensing of PMC operations, but “neither the companies nor independent observers are exactly clear about how the process works.”54 Furthermore, once a license is granted there are no follow-up requirements, and there is no requirement to inform Congress of licensing for contracts of less than $50 million.55

In South Africa, the 1997 passage of the Regulation of Foreign Military Assistance Bill signaled a sea-change in their regulatory regime.56 Prior to this time, South Africa had hosted the most notorious of PMCs, Executive Outcomes. Under the provisions of the 1997 bill, the South African government must approve each contract signed by any PMC operating from its territory.57 This requirement alone was enough to cause Executive Outcomes to dissolve into numerous subsidiary PMCs that continue global operations from bases outside South Africa.58

The United Kingdom, another major international hub for PMCs, has virtually no regulations governing their operations.59 The UK is actively considering how to regulate PMCs, and has produced a “Green Paper” that outlines potential regulatory options.60 The proposal immediately came under fire from Parliament,61 and one minister noted that the attempt to create a regulatory scheme has been “nightmarishly complex.”62

While no nation has managed to untie this Gordian Knot with an effective regulatory scheme, some commentators have suggested that the problem can be solved through transparent contracts and an type of Lex Mercata for mercenaries.63 Such a proposal would create a normative scheme of language that should be included in PMC contracts, and that would guarantee liability for misbehavior. However, the powerful political and financial incentives to maintain the status quo may be an insurmountable obstacle to the creation of such a normative environment. Additionally, the entire process depends on a level of contractual transparency that does not currently exist. Within the United States, the Freedom of Information Act (FOIA) does not apply to the actions of private contractors because while the terms of the contract are subject to public release under FOIA, contractors are granted an essentially limitless loophole to deny the release of any information which they determine to contain “trade secrets and commercial or financial information.”64 Additionally, there are many valid national-security justifications to limit PMC contract transparency such as the need to maintain confidentiality of intelligence sources and methods, sensitive military capabilities, and the desire to control access to information about military force structure and order of battle. Secrecy seems likely to be a persistent feature of PMC contracts, yet without a dramatic increase in transparency there is little chance for the successful regulation of PMCs through contractual norms.

IV. PMC Regulation Through Civil Liability

In the absence of effective regulatory regimes, there may seem to be little chance of holding PMCs accountable for their actions. Many NGOs and PMC victims are attempting, however, to cobble together a de-facto international regulatory regime out of a diverse mix of existing statutes from various judicial systems. Thus far, the majority of these efforts have attempted to leverage existing US statutes such as the Alien Tort Claims Act (ATCA) and the Racketeering Influenced Corrupt Organizations Act. While these plaintiffs have had limited or no success to date, there are cases currently pending that may lay the groundwork for holding PMCs accountable for violations of international norms within the US judicial system—or that may carve out generous immunity from such liability.

To date, the Alien Tort Claims Act has been the most popular vehicle to attempt to hold PMCs liable for human rights violations. These attempts stem from the holding in the Sosa case that the US court system is available for tort claims that are founded upon violations of a narrow class of offenses that are clearly in violation of established international law.65 While Sosa did open the door for actions against PMCs, the vague and unclear prohibition of mercenarism under international law certainly does not provide a cause of action under the Supreme Court’s narrow acceptance of ATCA claims. As a result, victims and advocate groups hoping to take PMCs to court have been faced with the much more difficult challenge of proving one of the “very limited category”66 of violations recognized in Sosa such as rape, torture, murder, or forced labor. While the holding in Sosa clarifies the scope of the ATCA as a tool to hold PMCs accountable, the Political Question Doctrine also creates serious problems for those who would use the ATCA in actions that may harm US foreign policy considerations.

The case of Sarei, et al. v. Rio Tinto, et al. is illustrative of the political problems of using the Alien Tort Claims Act as a means of holding PMCs accountable.67 In Sarei, residents of Papua New Guinea sued the international mining consortium Rio Tinto and other defendants on several grounds, including alleged war crimes committed by a spin-off of the South African PMC Executive Outcomes, Sandline International.68 In July, 2001, the Court denied Rio Tinto’s motions to dismiss on grounds of forum non conveniens and failure to state a claim.69 However, the Court made the possibility of judiciability conditional pending an evaluation by the US State Department of the potential effects of this action on US foreign policy interests. In July, 2002, the Court dismissed all claims under the Political Question Doctrine following the State Department’s reply that continuation of the case would “risk a potentially serious adverse impact on the [Papua New Guinea] peace process, and hence on the conduct of United States foreign relations.”70 Opponents may claim that the State Department’s response was motivated more by financial and political concerns than by the desire to protect human rights against PMC operations. However, one issue is clear: if every ATCA case permits transient political considerations to trump principles of international law, then surely the ATCA is not a valid mechanism for the broader regulation of PMCs according to those international legal principles. While the ATCA may be a valid tool for enforcing clear violations of human rights in the absence of foreign policy concerns, as was demonstrated by Doe v. Unocal,71 it is not a panacea to address the closely linked political and human rights considerations presented by most PMC operations.

One of the most troubling episodes of recent PMC misconduct is that of DynCorp in Bosnia. Several DynCorp employees allegedly participated in trafficking women for prostitution, ran an underage prostitution network, and participated in other illegal activities while in working under contract for the Department of Defense in 1999.72 While no DynCorp employee was ever held criminally liable for these actions, despite several employees confessing to the behavior in a US Army CID investigation,73 Kathryn Bolkovac and Ben Johnston were fired after reporting the offenses to superiors.74 Both Bolkovac and Johnston brought suit for wrongful termination; Bolkovac won her suit with DynCorp in a UK court and was awarded £110,000. Johnston brought suit in a Texas court under the Racketeer Influenced and Corrupt Organizations Act (RICO). Johnston’s suit was settled out of court after Bolkovac won her case.75 The novel issue presented here is the potential to use the RICO statute to impose a peripheral liability on PMCs that commit violations abroad. However, despite the importance of protecting whistleblowers as part of a larger scheme to use normative pressures to govern PMC activity, the RICO approach does not address the core of the problem—no liability has been imposed for the actual violations allegedly committed by DynCorp employees, and no restitution has been paid to foreign victims. This failure to impose liability is particularly concerning considering DynCorp’s subsequent record of abuses: DynCorp employees have been implicated in abuses in Afghanistan, Iraq, and Ecuador, all stemming from contracts awarded after the Bosnia affair was exposed.76 The Deputy Commander of the Third Infantry Division in Iraq summarized the behavior of DynCorp employees, saying that "These guys run loose in this country and do stupid stuff. There's no authority over them, so you can't come down on them hard when they escalate force... They shoot people, and someone else has to deal with the aftermath. It happens all over the place."77 Clearly, attempts at imposing peripheral liability through RICO have failed to reign in PMC behavior.

Many PMC firms are not, however, waiting for a test case to establish a means of securing liability for violations committed overseas. Instead, they are actively working to eliminate their liability under the Defense Base Act of 1941.78 General Counsel for the PMC Blackwater USA laid out an affirmative defense to potential liability problems, utilizing the liability provisions within the Defense Base Act to say “look—we can do anything we want and not be held accountable.”79 This strategy is currently being tested, as the families of the four Blackwater employees killed in Faluja on March 31, 2004, have brought a wrongful death lawsuit against the firm. 80 While this lawsuit alleges that Blackwater’s misconduct led to the employees death, Blackwater’s law firm, Greenberg Traurig, hopes to use this case as a vehicle to dramatically limit Blackwater’s overall liability for its actions overseas.81 Their legal theory is that the Defense Base Act, which requires that all government contractors purchase a fixed liability insurance plan for their activities, also has the effect of limiting their total liability to those claims covered under this mandatory insurance program.82 If this strategy is successful, the case may create a blanket liability shield for PMC activity.

While the potential to hold PMCs liable under US law looks slim, the prospects appear no brighter overseas. The few nations that retain some form of viable universal jurisdiction statute to bring international crimes into their judicial system have proven very reluctant to step into the politically-charged minefield of PMC liability. Most recently, German courts have refused to hear the claims of Abu Ghraib victims against the US PMCs Titan and CACI in their courts despite the potential under Germany’s universal jurisdiction statute.83 While the risk-reward calculation may continue to compel some nations to try individual defendants under such universal jurisdiction statutes, the prospects for bringing well connected and financed PMCs into court on such grounds look slim.

V. Conclusion & Future Concerns

Today’s rapidly growing marketplace for private military and security functions is essentially unregulated. While there are numerous theories of how to resolve this problem ranging from instilling a sense of corporate social responsibility in PMCs to holding them liable for their misconduct under a variety of national statutes, none of them seem at all likely to succeed. Furthermore, the escalating record of abuses and misconduct by PMCs highlights that this is not a problem that can simply be ignored. If anything, it has the potential to become far more serious. While some commentators have suggested that privatization of security and military functions will help to create a more peaceful world,84 recent history suggests otherwise. Security as a commodity that is provided as a function of the market will create the situation in which derivatives of security—fundamental human rights and freedoms—also become market commodities. Such a situation is clearly and directly in contradiction with the goals and aspirations of the international legal community, for a right cannot be fundamental and universal and at the same time available only to those who can afford to pay. While privatization of security functions may be an inevitable result of globalization and free trade, this privatization does not have to lead to the commodification of fundamental rights. Controlled privatization within a comprehensive and rigorous international regulatory regime, coupled with an effective enforcement capability, could capture the potential cost-savings of privatization while safeguarding our fundamental rights. Today, however, we have put the cart well before the horse, with privatized security and military functions racing far ahead of the meager efforts to regulate them. The consequences of this failure are already echoing around the world, creating impacts far outside the Western security paradigm. Where security has already become a commodity, owing to the failed promises of national and international programs, alternative security providers such as the Taliban in Afghanistan, the Moro Islamic Liberation Front in the Philippines, and the private paramilitary groups in Colombia are demonstrating that a world with freely privatized security is also a world without fundamental rights and freedoms.

We stand now at a fork in the road: the world is rapidly but almost imperceptibly moving towards security as a market function. If we hope to uphold a set of supra-market standards in areas like human rights, privacy, and freedom, then the world community must act to bring security functions back within the publicly regulated realm. Whatever the solution, there is a critical need for better regulation of private military and security functions of all types—hopefully awareness of this legal vacuum will be the first step in the path to a collective, international solution.

1 John Robb, Security: Power to the People, FAST COMPANY, Mar. 2006, at 120, available online at http://www.fastcompany.com/magazine/103/essay-security.html.
2 Kenneth Bredemeier, Thousands of Private Contractors Support U.S. Forces in Persian Gulf, WASH. POST, Mar. 3, 2003, at E01.
3 Military Industrial Complexities, ECONOMIST, Mar. 29, 2003, at 56.
4 Mike Gongloff, Bechtel Wins Iraq Contract, CNN, Apr. 17, 2003, available onlin at http://money.cnn.com/2003/04/17/news/com.
5 See, e.g., James R. Coleman, Constraining Modern Mercenarism, 55 HASTINGS L.J.1493, and Mark W. Bina, Private Military Contractor Liability and Accountability After Abu Ghraib, 38 J. MARSHALL L. REV. 1237.
6 Juan Carlos Zarate, The Emergence of a New Dog of War: Private International Security Companies, International Law, and the New World Order, 34 STAN. J. INT’L L. 75 (1998).
7 See Symposium, Public Values in an Era of Privatization, 116 HARV. L. REV. 1211 (2003).
8 See, e.g., Simon Domberger & Paul Jensen, Contracting Out by the Public Sector: Theory, Evidence, Prospects, 13 OXFORD REV. ECON. POL’Y 67, 72-75 (1997).
9 See Sharon Dolovich, State Punishment and Private Prisons, 55 DUKE L.J. 23-24 (2005).
11 See Rosa Ehrenreich Brooks, Failed States, or the State as Failure?, 72 U. CHI. L. REV. 3 (2005)
12 See Singer, infra note 34, at 522.
13 Id., at 524.
14 MPRI was recently purchased by the publicly traded Fortune 500 company L-3, a stock held by many public employee retirement funds. See P.W. Singer, Corporate Warriors, 26 INT’L SECURITY 186, 199 (2001).
15 Jonathan Turley, Soldier of Fortune – At What Price?, L.A. TIMES, Sept. 16, 2004, at B11.
16 See Felix Rohatyn & Alison Stanger, The Profit Motive Goes to War, FIN. TIMES, Nov. 17, 2004, at 19.
17 Chaffin, infra note 62, at 7.
19 See R. Craig Nation, War in the Balkans, STRATEGIC STUDIES INSTITUTE, August, 2003, available online at http://www.strategicstudiesinstitute.army.mil/pdffiles/00117.pdf.
20 See http://www.vinnell.com/militytraining.html (last visited May 10, 2006).
21 See Guards and Gumshoes, ECONOMIST, 17 April 1997, available online at http://economist.com/displaystory.cfm?story_id=86154.
22 See Daniel Bergner, The Other Army, N.Y. TIMES, August 14, 2005, available online at http://www.nytimes.com/2005/08/14/magazine/14PRIVATI.html.
23 See Iraq Coalition Casualty Count, available online at http://icasualties.org/oif/ (last visited May 10, 2006).
24 See Peter Gorman, Plan Colombia’s Mercenaries, NARCONEWS, http://www.narconews.com/iquitos1.html.
25 See S. Leon Felkins, Outsourced Tyranny: The Use of Private Companies to do Government’s Dirty Work, Antiwar, May 10, 2001, http://www.antiwar.com/orig/felkins2.html.
26 Information about Big Crow employment provided here is unclassified and based on personal experience. General information on the Big Crow aircraft is available online at http://www.edwards.af.mil/brochure/docs_htm/aircraft/ac_html/nkc135eb.htm.
27 Elizabeth Rubin, An Army of One’s Own, HARPERS, Feb. 1997, at 48.
29 See O’Meara, supra note 73.
30 See Peter Gorman, Scorched Earth Policy, FORT WORTH WKLY, Mar. 13, 2003, available online at http://www.fwweekly.com/content.asp?article=2387.
31 See Lisa Croke, Iraq Torture Investigations Reveal Scores of New Cases, NEW STANDARD, Dec. 31, 2004, available online at http://newstandardnews.net/content/index.cfm/items/1359.
32 See Peter W. Singer, The Ultimate Military Entrepreneur, Q.J. MIL. HIST., Spring 2003, at 6.
34 P.W. Singer, War, Profits, and the Vacuum of Law: Privatized Military Firms and International Law, 42 COLUM. J. TRANSNAT’L L. 521, at 525-26.
36 Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations, G.A. Res. 2625, U.N. GAOR, 25th Sess., Supp. No. 28, at 121, 124, U.N. Doc. A/8028 (1970).
37 Abraham, supra note 35, at 92.
38 Protocol Additional to the Geneva Conventions of 12 Aug. 1949, and Relating to the Protection of Victims of International Armed Conflicts, Jun. 8, 1977, 1125 U.N.T.S. 3.
39 Id.
40 Report of the Committee of Privy Counsellors Appointed to Inquire into the Recruitment of Mercenaries, 1976, Cmnd. 6569, at 10.
41 International Convention against the Recruitment, Use, Financing, and Training of Mercenaries, Dec. 4, 1989, U.N. GAOR, 72nd plen. mtg., U.N. Doc A/Res/44/34 (1989).
42 Id.
43 See We’re the Good Guys These Days, ECONOMIST, July 29, 1995, at 32.
44 Singer, supra note 32, at 531
45 Id., at 533.
46 Zarate, supra note 6.
47 Id.
48 See Reuters, German Prosecutor Rejects Investigation of Rumsfeld, L.A. TIMES, Feb. 11, 2005, at A9.
49 See Neutrality Act of 1937, ch. 146, 50 Stat. at 122.
50 Uniform Code of Military Justice, 10 U.S.C. 801-946 (2000).
51 The Military Extraterritorial Jurisdiction Act of 2000, 18 U.S.C. 3261-67 (2000).
52 See Agreement Between the Department of the Interior and CACI Premier Technology, Inc., No. NBCHA010005 (2000), available at http://www.publicintegrity.org/docs/wow/CACI_ordersAll.pdf.
53 22 C.F.R. § 120.1 (1995).
54 Deborah D. Avant, Privatizing Military Training, FOREIGN POL’Y IN FOCUS, May 2000, available at http://www.foreignpolicy-infocus.org/briefs/vol5/v5n17mil.html.
55 See Bruce D. Grant, U.S. Military Expertise for Sale: Military Consultants as a Tool of Foreign Policy, NAT’L DEF. U., Essays 1998, at 89 (1998).
56 Regulation of Foreign Military Assistance Bill, 1997, Bill 54D-97 (GG), available at http://www.gov.za/gazette/bills/197.pdf.
57 Id.
58 Id.
59 Victoria Burnett et al., From Building Camps to Gathering Intelligence, FIN. TIMES, Aug. 11, 2003, at 13.
60 U.K. FOREIGN & COMMW. OFF., PRIVATE MILITARY COMPANIES: OPTIONS FOR REGULATION (2002), available at http://www.fco.gov.uk/Files/kFile/ mercenaries,0.pdf.
61 Paul Waugh, “Mercenaries as Peacekeepers” Plan Under Fire, INDEPENDENT, Feb. 14, 2002, at 8.
62 Joshua Chaffin et al., Foreign Office Faces Opposition to Regulation, FIN. TIMES, Apr. 18, 2001, at 4.
63 See Laura A. Dickinson, Government for Hire: Privatizing Foreign Affairs and the Problem of Accountability Under International Law, 47 WM AND MARY L. REV. 135, 199-206 (2005).
64 5 U.S.C. § 552(b)(4) (2000).
65 Sosa v. Alvarez-MacHain, et al., 542 U.S. 1 (2004).
66 Id.
67 Sarei, et al. v. Rio Tinto, et al., 221 F. Supp.2d 1116 (C.D. Cal. 2002) (in June 2002 the conditional was removed and the dismissal made final. Plaintiffs have appealed the dismissal to the 9th Circuit Court of Appeals).
68 Id.
69 Id.
70 Id.
71 Doe v. Unocal, 110 F. Supp. 2d. 1294 (C.D. Cal. 2000) (Unocal settled out of court after a three judge panel of the 9th Circuit Court of Appeals affirmed that Unocal was liable under the Alien Tort Claims Act).
72 See Kelly Patricia O’Meara, DynCorp Disgrace, INSIGHT, 14 January, 2002, available at http://www.corpwatch.org/article.php?id=11119.
73 Id.
74 Id.
75 See http://www.publicintegrity.org/wow/bio.aspx?act=pro&ddlC=17, last visited May 11, 2006.
76 Id.
77 See Rene Merle, Storm-Racked Parish Considers Hired Guns, WASHINGTON POST, Mar. 14, 2006, at A01, available at http://www.washingtonpost.com/wp-dyn/content/article/2006/03/13/AR2006031301777_pf.html. 78 Defense Base Act, 42 U.S.C. §§ 1651-1654 (1988).
79 Jeremy Scahill, Blood is Thicker than Blackwater, THE NATION, Apr. 20, 2006, available at http://www.commondreams.org/views06/0420-22.htm.
80 Id.
81 See Id.
82 See http://www.cpa-iraq.org/PSD/insurance.pdf (last visited Mar. 11, 2006).
83 See Reuters, supra note 48.
84 See Robb, supra note 1.

Monday, May 08, 2006


Will rising oil prices bring stagflation? Stagflation is the combination of high inflation and high unemployment/recession, a phenomenon that Keynesian economists long thought to be impossible—until it happened in the UK and the US in the ‘60s and ‘70s. According to Wikipedia, it is caused by a shock to a nation’s aggregate supply curve—such as what happens when oil prices rise significantly, although in reality nothing in macroeconomics is quite that simple. It’s particularly problematic because central banks can only address either the inflation or the unemployment, and which ever they work to reduce, they must do so by exacerbating the other. Not pretty.

So will the current spike in oil prices bring about another bout of stagflation? It is certainly possible. First, we must answer two questions: is the current oil price rise inflationary, and is it a drain on our economy that will cause recession and the accompanying unemployment? If both answers are yes, then a continuing rise in oil will bring stagflation.

Is the current rise in the price of oil inflationary? Simply put, inflation is a rise in the general price level. If oil is more expensive, then everything that is made from oil also becomes more expensive. And everything that is transported using oil. And that has any constituent component or process that utilizes oil. So everything becomes more expensive. So yes, a rise in the price of oil does cause inflation. It may take some time to trickle down to the end consumer across all processes, but it will happen. Back up…now it gets more complicated. A rise in general price level is measured in currency, and that currency’s relative purchasing power (its price) fluctuates with its supply and demand. So an oil price rise is not inflationary as long as the rise in the price of oil is paced by a gain in the value of the dollar. But, that’s not happening, with the US dollar on a dive lately—the Canadian Loonie is at $0.90! So, in the end, the answer is still YES: this rise in the price of oil IS inflationary.

Is the rise in the price of oil a drain on the economy that will cause a recession and increase unemployment? That may seem obvious, but let’s work through it. You pay more for oil, but someone gets that money. What do they do with it? Do they spend it back in the economy, buying goods and services that drive economic growth? If so, then it isn’t a drain, just an inflationary re-distribution that has some loss due to inefficiency of unplanned transition—that is, investments made in the past in reliance on low oil prices don’t pay off so well. This can still be recessionary if it is a sufficiently sharp shock caused by enough of an increase in oil prices. What if the money isn’t cycled back into the economy in the classic petrodollar recycling scheme? What if it is spent in the economy of an overseas exporter of oil—say to build the world’s tallest building in Dubai. That is definitely a drain on the domestic economy, but on the international scale it is really still just a re-distribution among nations that has some loss due to transaction cost inefficiency. So, in the end, the answer to “is the rise in oil price recessionary” is simply that IF the rise is sharp enough to cause re-distribution inefficiency losses, then YES. It’s anyone’s call whether or not we are at that point yet, but I think that we are already well on the recession path.

So does that mean that Stagflation is on the horizon? I think it’s quite possible. When the Fed (US central bank) is faced with this problem, how will they react? They can stimulate the economy (combat recession and unemployment) by lowering interest rates—and in the process spur further inflation, or they can try to combat inflation by raising interest rates—and in the process hurt economic growth by making credit more expensive. Today’s economy is largely financed by home-equity loans that provide money to consumers as their house values “rise” (which is itself a function of how low interest rates are because it makes more people qualified for larger mortgages). Higher rates will make people’s adjustable rate mortgage payments go up, and will hurt their ability to earn money to make these higher payments. Lower rates will stimulate inflation, which will actually make our housing payments lower (especially if wage growth paces inflation—though that’s not likely), and will keep inflating the property bubble, increasing our ability to borrow against our home “value” and spend, spend, spend. This has the added benefit of “inflating away” our debt (both personal and national). It is a dangerous game—and it is exactly what we have played to “recover” from 9/11. So what path will the Fed choose? It is stuck between a rock and a hard place, forced to choose between keeping the party going a little longer (at the risk of a sharp hangover) and imposing harsh austerity measures. What will Bernanke do on May 10th when the Fed next meets? I think he’s smart enough to know that he should raise rates. And I think he will actually do that this time—although timidly. A quarter point, maybe. If he "takes a pause" in the rate hikes, then it's a virtual confirmation that the Fed has chosen to try to not think about the coming hangover. As soon as it starts to “hurt,” which is exactly the POINT of raising rates, they will start to come back down. I don’t think that problems will boil over this summer, but we might just have a Weimar Winter.

Sunday, May 07, 2006

Valuing Elegance: Annoyances and Annualized Geo-Solar

This is perhaps the scariest thing that I have seen in recent memory: My Super Sweet 16” on cable network MTV. The reality show chronicles the 16th birthday parties of American teenagers. Even in the ‘80s, I’m not sure that people actually exclaimed “it’s supposed to be all about me!” the way one recent birthday-girl did on the show. This show, unwittingly but unerringly, documents the conspicuous-consumption attitude of today’s youth, facilitated by both pop-culture marketing and their credit-happy parents. One girl was actually picked up from her comparatively-dumpy suburban condo in a stretch Range Rover and dropped off at the red carpet to her $30,000 birthday party. We—and by that I mean humanity—are so screwed.

From my not-far-removed vantage point, this seems pretty pathetic. While conspicuous consumption may be de rigueur among the young and hip, it strikes me as falling short. If American youth—and their parents—really want to distinguish themselves, they should consider conspicuous simplicity. Elegance—not the elegance that has been spun by the media-marketing establishment, but the original notion of elegance: seemingly effortless beauty in form, proportion, or design. Along those lines, I’ve recently been captivated by the concept of Annualized Geo-Solar design.

Solar power is the root of most of our energy: it is captured by carbon-based plant life and available for our later use as firewood or ethanol or oil, it causes the wind to blow. It powers Photovoltaic Cells—high technology, low efficiency means of converting solar energy into electricity, and a notably poor example of elegance. PV is really more of a brute-technology approach. A much more elegant design use of solar energy is passive solar. I’ve long been an advocate of the superiority of passive solar over active (PV) solar—owing largely to its use of vernacular technology. PV creates a dependent power-relationship for the individual—not very elegant. But passive solar, despite its ability to effectively heat our homes, our water, cook our food, is not perfect. One issue is that many climates have cold and cloudy winters, so heating that depends on passive solar will also require a backup system. But thanks to the work of architect Don Stephens, the possibility of Annualized Geo Solar (AGS) is a tantalizing solution to these problems. Basically, the AGS approach stores heat in a huge bank of thermal mass under a house all summer long, and harvests that heat throughout the winter to maintain a comfortable 70 temperature year-round. Here's the basic concept:

Figure 1: Don Stephen's diagram of an AGS structure (see .pdf for details).

The design is brilliant: entirely passive, superior, utilizing only simple, vernacular technology, and adaptable to many different regimes of climate, materials, etc. It could even be inverted, using a passive solar chimney that I have outlined previously, to draw cold winter air to cool an insulated bank of earth under a house in, say, Phoenix, to provide lasting cooling all summer long. Overall, it is extremely elegant. Perhaps most importantly, it shows that achieving elegant simplicity really only requires looking for it: Stephens just wasn't satisfied with the techno-utopian approach of using PV to drive a heater, nor with the day-to-day passive solar heating systems, so he found something both better and simpler. I wonder what that kind of 16th birthday party would look like?

Thursday, May 04, 2006

Small-Scale Integrated Farmstead

I was doing a little research on sheep as a component of a sustainable and resilient system when I stumbled upon Northand Sheep Dairy. Karl North has written a number of fascinating articles, but I particularly recommend reading "Small Scale Integrated Farmstead: A Model for Sustainable Agriculture." Particularly impressive because he is successfully implementing the very theory that he discusses. Here are a few excerpts from the article, but definitely go read the whole thing"

"The colonial economy subverts and eventually destroys the economy of local self-sufficiency, replacing it everywhere with an exploitation based on export of cheap raw materials and cheap labor, and import of expensive manufactures. This process, far from being an exclusively Third World disease, is actually more advanced in Nebraska than in Namibia."

Discussing the same kind of "hill-town" topology that I recently wrote about:

"In the last fifty years, while in North America the small diversified farm and all its support system have declined and are considered outdated, many West European and Japanese farmers have become expert at producing high yields on small acreages for local markets... ...To American travelers from bigger-is-better land, a first visit to old Europe can be like entering a fairy tale. The permanence of stone and the human scale of the architecture offer a cozy, comforting security. Narrow, winding streets of old quarters broken by attractive little squares, and whole villages nestled naturally into the countryside are a consequence of a long process of adaptation whereby human habitat finds its best "fit" both to the lay of' the land and to the aesthetic needs of the inhabitants."

And on the importance of network:

"In Dundee, N.Y. the Amish had managed to grow to perhaps a dozen horse-powered farms, an enviable community from my point of view. But when I visited I was told they were leaving one by one. For although there was plenty of cheap good land, their population had not been able to reach the critical mass necessary to support the smithy, the sawyer, the schoolmaster and the other institutions and cottage industries they considered essential to a viable agricultural community."

Full article HERE.