Al Bawaba Ltd.
It is statistically true that we are living in the most peaceful and stable era in human history. It just does not feel that way. And if you live in a part of the world which is still racked with instability, the saying ‘Lies, damn lies and statistics’ may leap to your mind.
Even regions that had begun to take their safety for granted, such as Europe, have been struck by acts of terrorism and, now in the grip of recession and harsh economic austerity measures, civil unrest.
Conventional security forces such as national armies find themselves overstretched with so many calls on their resources and cuts to their numbers. As a result, the privatisation of security and risk management has gained momentum in recent years.
The industry was given a boost with the US-led invasion of Iraq in 2003. The US quickly began outsourcing the protection of public buildings, foreign businesses and the securing of convoys. This proved controversial. Private security firms were not bound by the same rules as military personnel and a number of high-profile incidents led to the accusation they were a law unto themselves.
The demand slackened in Iraq and Afghanistan as local forces took over responsibility. The private firms had to look to other markets. Since the trend for private security had taken hold, and there was no shortage of trouble all over the world, far from slipping into recession, the sector has flourished.
Africa, as it is for so many industries, is a region of potential growth when it comes to private security. Whether it is protecting government or private premises in the uncertain aftermath of the Arab Spring, securing ships in the Indian ocean from piracy, looking after NGOs as they go about their aid work, protecting oil executives from being kidnapped or defending Western embassies from attacks, foreign and homegrown private-sector alternatives to security are on the rise.
Even more so now that the US government has turned special attention to Africa as part of its foreign policy. In 2008, the US established Africom, which coordinates all US military operations in the continent.
Set up ostensibly to promote democracy and fight terrorism, officials have spoken openly about its primary role of furthering US interests and, according to Vice Admiral Robert Moeller, writing in Foreign Policy magazine, the ‘free flow of natural resources from Africa to the global market’.
In the spring of this year, Academi (formerly Blackwater), through one of its companies, International Development Solutions, won part of a $10bn US State Department Worldwide Protective Services (WPS) contract for providing security for American diplomats and personnel.
Ted Wright, Academi’s CEO, has said that he sees Africa as one region where they intend to increase their operations. He also predicts a period of consolidation for the industry as smaller companies, no longer needed in Iraq and Afghanistan, are taken over by larger ones.
G4S, the largest of all private security firms and the world’s second biggest employer of any kind, is looking to expand into Africa. It employs approximately 600,000 people worldwide, a sixth of them in Africa, sourced from 29 countries, making it Africa’s largest private sector employer. Currently, G4S secures embassies and provides protection for banks, telecoms, transport and also provides expertise in clearing mine fields.
However,the rapidly growing market in natural resources, from oil and gas to mining, in Africa provides just the opportunity the company is looking for. Countries such as Nigeria and Angola are being targeted by the British company as it seeks to diversify from providing manned security to risk assessment of a vital and vulnerable industry.
Speaking to Reuters earlier this year, Martin Fuller, G4S’s development director for oil and gas in Africa said, “In Africa we are moving towards delivery of much broader, integrated and sustainable security solutions to meet all the security risks facing major projects.”
Privatising public security?
There are a large number of major natural resource projects in Africa and the world’s private security firms are lining up to bid to protect them. South Sudan has an estimated 7bn barrels of proven oil reserves. Its problem is getting it out of the landlocked country. It recently struck a deal with Sudan, after a long period of deadlock over fees, to transport it through its northern neighbour’s land.
To reduce its reliance on Khartoum, the South Sudanese government has announced a 2,000 km pipeline, at a cost of $3bn, through Kenya to its port of Lamu. G4S is one of the companies vying to help secure this vital source of South Sudanese revenue.
It is also looking to enter, for the first time, markets in Libya, Tunisia and Zimbabwe, though South Africa, Nigeria, Kenya and Mozambique are among the countries it intends to expand most aggressively in.
Mining, oil and gas, and telecoms, all industries projecting major growth, are areas that private security firms are looking to establish themselves in over the next few years. Such rapid economic expansion has forced various African governments to face up to problems of capacity and an insufficient skills and knowledge base. The tendency therefore is to look to the private sector.
There is a sense, however, that the encroachment of private security in the continent needs to be checked. The South African government figures show that in April 2011, there were more than 8,000 privately owned security firms employing over 1.5m officers in the country. This, they considered, was an unacceptable threat to national security and a bill is on its way to parliament which will require 51% of a local subsidiary’s shares to be owned by South Africans, which, if the bill is passed, firms will have five years to comply with. There are a number of options open to private security companies, among them leaving the country. The key for them would be to become minority shareholders of their South African subsidiaries while at the same time maintaining overall control.
South Africa’s crime statistics have recently made good reading and the worry is that this change in the law may impact on that trend adversely. Addressing these concerns, an initiative convened by the Swiss government, the International Code of Conduct for Private Security Service Providers, lays out a set of guidelines based on human rights law, which covers such matters as a ban on torture, forced labour and human trafficking, and policies for the vetting, and training of employees. There are now more than 500 signatories to the code, but critics of the code point to the fact it is voluntary and that it means the industry is self-regulating. This perceived weakness, the ambiguity between private and public security and the need for clear guidelines is perhaps most obvious in Nigeria.
Nigeria is a country that is growing, in more ways than one, more quickly than it can keep up with. Crime is a particular problem there and, subsequently, the private security sector has boomed. In Nigeria, private security companies are sometimes given use of the police, which suggests at least a partial and informal privatisation of the police service. The military has also been used to protect the oil industry, paid for by the private sector.
A leaked report reveals that Shell spent, between 2007 and 2008, $383m securing just its Nigeria operations alone – one third of the oil giant’s total worldwide expenditure on security. The payments were split between those to the government for use of military forces and those to private firms and individuals.
Shell defends its spending on the grounds that it is working in a very dangerous region. In 2008, 62 of Shell’s employees were kidnapped and three killed. It suffers vandalism to pipelines and well heads and, it estimates, up to 20% of its oil is stolen by criminal gangs. But critics argue it is unethical to syphon so many millions of dollars into military groups for their alleged corruption and human rights abuses. What is really striking about the amount spent is that, despite it all, high levels of criminality continue.
With the parts of the world where the US traditionally gets its oil from unstable for a variety of reasons, it is turning its attention to West Africa as a steadier source. With Sierra Leone and Liberia coming on stream with their own deposits, securing the waters there has become a top priority. One is left to wonder at the prospect of a private or semi-private navy patrolling the west coast of Africa.
More infamous, the shipping lanes off the coast of East Africa, apart from being among the most important and busiest in the world, are the most dangerous. Somalibased piracy has been responsible for the hijacking of around 170 ships since 2008. Not only has this resulted in the taking and often subsequent murder of hostages, but the cost to the world’s economy is an estimated $12bn per year.
National navies began patrolling the lanes but with such a vast area to cover, their effectiveness against tiny speed boats was limited. Shipping companies began hiring private security firms or Privately Contracted Armed Security Personnel (PCASP) to protect their crews and cargoes. And it is a fact that not a single ship protected by a private security contractor has ever been successfully hijacked.
2011 saw a reduction in the number of successful hijackings over the previous year, down to 28 from 49. Moreover, the number of hijacking attempts, successful or otherwise, fell by more than half over the same period.
Information about clients is difficult to come by as companies are reluctant to admit to employing lethal force. A leaked video which showed contractors employed by maritime security firm Trident Group Inc on board Eagle Bulk Shipping’s Avocet opening fire on suspected pirates highlighted the lack of rules of engagement at sea and drew criticism from some.
Trident’s president, a former US Navy Seal, Thomas Rothrauff, insisted the action was justified, but the industry itself is split on the matter. Some companies are squeamish about a shoot to kill policy while others are concerned equally with the possible damage to reputation. The UN’s International Maritime Organisation has issued guidelines but they are non-binding. The private contractors themselves are relied upon to enforce their own rules, but some reports suggest the rigour of this enforcement is varied.
Both the shipping and private security industries would benefit from a set of binding rules, but such a thing would be difficult to agree among so many jurisdictions. The lack of a code means there is a danger that less expensive, but also less skilled contractors will begin guarding ships, with inevitable consequences. Despite the legal difficulties and ethical controversies, the industry is only likely to grow. For the shipping companies it makes economic sense.
According to the Independent Maritime Security Association, the average cost of armed guards for a single transit is $50,000. However, bypassing the most risky waters would add 3,000 miles to each journey at a cost of $3.5m a year extra in fuel costs for a tanker and more for liners. Insurance premiums have skyrocketed from only $500 per voyage five years ago to $20,000 today. Not to mention the cost of paying out ransoms and the incalculable cost of human life.
Maritime traffic is set to increase in the coming years while navies are projected to shrink in size at a similar rate. In the short term, hiring private guards appears to be the only guaranteed solution to a far broader geopolitical mess.
Whether on land or sea, vast global interests in natural resources and shipping are opening up opportunities for private security firms all over Africa. The culture change which is seeing the private sector take over roles traditionally served by the state, such as policing, the running of prisons and, indeed, waging war, means that as the state steps back from its responsibilities the private security industry will continue to grow.
The South African government figures show that in April 2011, there were more than 8,000 privately owned security firms employing over 1.5m officers in the country
Shell spent, between 2007 and 2008, $383m securing just its Nigeria operations alone – one third of the oil giant’s total worldwide expenditure on security