Country: United States

Responding to fresh data from the Stockholm International Peace Research Institute (SIPRI) demonstrating record global military spending, Transparency International Defence and Security Director, Josie Stewart, said:

New SIPRI data has revealed that the total global military expenditure increased by 3.7 per cent in real terms in 2022, reaching a new high of $2240 billion.

This increase in spending – coupled with our Government Defence Integrity index’s finding that nearly two-thirds of countries face a high to critical risk of corruption in their defence and security sectors – should be cause for concern for governments around the world.

To ensure that military expenditure is contributing to security rather than corruption and abuse, governments should strengthen transparency, accountability, and oversight in the defence sector, providing for adequate scrutiny from lawmakers, auditors, and civil society.

Transparency is the best way for states to ensure that military spending is used effectively to enhance security.

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A working group of the United Nations assembled in Geneva, Switzerland on April 17, 2023 to evaluate and negotiate regulation of private military and security security companies (PMSCs).

Transparency International Defence and Security Head of Advocacy Ara Marcen Naval joined and delivered the following statement:

Mr. Chairperson rapporteur, distinguished delegates,

I stand before you today at this crucial discussion to bring to your attention, and consideration, the corruption risks linked to the activities of Private Military and Security Companies (PMSCs) with a sense of urgency and resolve.  PMSCs can play an important role in government efforts to enhance security, but they often operate in secret and outside standard transparency and accountability structures.  This dynamic provides a permissive environment for corruption and conflict to thrive and deprives governments and its citizens of financial resources and security.

The Defence and Security Programme of Transparency International welcomes the progress made in the revised draft and the changes made to include references to the Convention Against Corruption and Convention against transnational crime. These references are important steps towards policy and legal coherence and to ensure that the efforts to regulate the activities of PMSCs align with the international legal obligations in relation to corruption and transnational organised crime.

Corruption and the unchecked actions of PMSCs have far-reaching consequences, eroding the rule of law, undermining human rights and security, and threatening the legitimacy of governments.  It corrodes public trust, undermines democratic institutions, and creates a culture of impunity that breeds more corruption. It can also weaken the fabric of societies, divert resources meant for development, and perpetuate inequality and injustice.

Transparency International has identified dozens of cases in which PMSCs are suspected of involvement in corruption and fraud.  Some of the most concerning cases involve PMSCs colluding with government officials to inflate threat perceptions to win or sustain contracts.  In one case, this action led to excessive use of force against protesters resulting in unnecessary injuries to civilians and security forces. 

Transparency International has also raised concerns about some of the practices of PMSCs failing to disclose conflict of interests that could undermine government decisions, or even threaten national security.

In some cases multinational PMSCs have fuelled corruption by requiring local partners to pay kickbacks for participating in government funded contracts. 

In these cases, the opaque arrangements prevalent in the sector make it extremely difficult to ascertain chains of command, responsibilities and levels of coordination among the different security actors, and undermine monitoring efforts and accountability. Furthermore, it is usually difficult to find public confirmation of the nature of the contract and the identity of subcontractors in the event that they are hired.

We hope that during the discussions on the potential instrument, the distinguished delegates will confront the implications corruption has and the abuses of PMSCs head-on and work together to prevent, detect, and punish corruption in all its forms. Transparency and reporting are the greatest steps that states can take to allow for effective monitoring and oversight of private military and security companies and other actors providing security services in order to effectively prevent, address and remedy any abuses committed.

Distinguished delegates, the stakes are high. The impact of corruption and the actions of PMSCs are felt by communities around the world, often with dire consequences for the most vulnerable among us. The fight against corruption and the responsible use of PMSCs requires our unwavering commitment and concerted and holistic action. Thank you.

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The victims of human rights abuses associated with private military companies (PMCs) are often left with no access to justice because of the lack of transparency in PMC contracts.

At the latest International Anti-Corruption Conference in Washington, the UN’s independent expert on mercenary groups, Dr Jelena Aparac, elaborated in this short video why action is needed.

Responding to the recently published US Strategy to Prevent Conflict and Promote Stability, Josie Stewart, Director of Transparency International Defence and Security, said:

The new strategy suggests that American policymakers are increasingly recognising the importance of anti-corruption approaches in confronting conflicts around the world.

With the long history of corruption fuelling conflicts, US and global policymakers must treat corruption as an urgent and permeating concern.

The path to peace and stability can only be built on concrete foundations. These should begin with anti-corruption efforts in defence – the sector most fundamental to safeguarding security.

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+ 44 (0)20 3096 7695
Out of hours – Weekends; Weekdays (UK 17.30-21.30): +44 (0)79 6456 0340

Responding to the new US Conventional Arms Transfer Policy, Josie Stewart, Director of Transparency International Defence and Security, said:

America’s new arms transfer policy represents the first full acknowledgement of the role corruption plays in undermining US efforts to enhance partners’ military performance.

This is a significant step forward. The US has committed to assess both the accountability mechanisms of partner security sector institutions and the risk of US arms transfers fuelling corruption. The effectiveness of these new provisions will hinge on the steps the US takes to obtain and use information on corruption risks associated with arms transfers.

Transparency International’s Government Defence Integrity index should provide a starting point. We look forward to advising the US Government on implementation, supporting a safer America, and a safer world.

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+ 44 (0)20 3096 7695
Out of hours – Weekends; Weekdays (UK 17.30-21.30): +44 (0)79 6456 0340

We know that corruption can be gender-specific in both form and impact. We know that it can perpetuate sexual and gender-based violence and gender inequality, and we know that the risks of this are highest in conflict, defence and security realms.

Sexual forms of corruption – often labelled as ‘survival sex’ – are commonplace in conflict, peacekeeping missions and humanitarian crises, with security and humanitarian individuals and groups among the main perpetrators.

Women’s exclusion from peace processes also undermine efforts to promote anti-corruption.

In response, we are leading the development of new approaches to integrate a gender-perspective across our work and the work of others at the intersection of conflict, defence and security, and corruption.

#InternationalWomensDay 

Responding to reports of new security aid for Ukraine, Josie Stewart, Director of Transparency International Defence and Security, said:

Fresh security assistance for Ukraine is welcome, but history has taught us that aid packages of the size being pledged in recent weeks carry significant risk.

So far there is limited information about the defence companies delivering assistance to Ukraine, what influence they carry, and what measures they are taking to reduce corruption.

There is also always a risk that arms will end up in the wrong hands as the war continues.

Civilian oversight of military assistance is integral to robust defence governance and the strengthening of institutional resilience that is necessary to manage these risks.

This should be a shared responsibility between donor countries and Ukraine.

Regulatory oversight of the private military and security sector is failing to keep pace with the rapidly growing and diversifying industry, leading to heightened global risks of fraud, corruption and violence. Better regulation of the industry is urgently needed.

This three-page fact sheet defines Private Military and Security Companies and outlines the required response.

Private Military and Security Companies (PMSCs) are a growing presence globally. They act as ‘shadow armies’, operating without transparency and free from legal accountability for their actions in conflict zones around the world.

Since the US-led wars in Afghanistan and Iraq, the industry has expanded from an estimated value of US$100 billion in 2003 to US$224 billion in 2020.

Such is the power PMSCs wield, there is an urgent need for United Nations members states to collectively commit to regulate, investigate and prosecute misconduct by these firms.

It is against this backdrop that Transparency International Defence and Security is bringing policymakers together at a hybrid event, open for registration now, to highlight this issue and catalyse change.

Many of the largest PMSCs were founded in the United States and Europe. But sophisticated PMSCs are increasingly being established in a variety of countries ranging from Australia to China, India to Israel, and Turkey to the United Arab Emirates (UAE). The Russian Wagner Group is operating in many African countries and the network’s grip on matters of national security is tightening.

PMSCs are not merely providing ‘bodies’ and direct combat services. They sell services such as intelligence, surveillance and cyber security. This expansion in services has elevated corruption and conflict risks in many countries with critically weak protection to guard against defence and security sector corruption.

Required response

In response to these trends, a United Nations Intergovernmental Working Group on PMSCs is debating an international framework to regulate their activities.

Currently the internationally supported but non-binding Montreux Document encourages countries to refrain from hiring PMSCs that have a record of engaging in bribery and corruption, among other crimes. While it is a step in the right direction, it lacks teeth.

Some countries, such as the United States, Australia and New Zealand are also exploring new regulations and laws at national level.

These are positive moves. However, until international and national legislation is formally agreed upon, the kind of law-breaking carried out by PMSCs such as land grabs facilitated through corruption and violence against civilians,  documented in our latest research paper, will continue.

In Washington this month Transparency International Defence and Security will be convening a workshop to galvanise international support for anti-corruption standards for PMSCs. Chaired by Transparency International co-founder Peter Conze, the event is being held as part of the influential International Anti-Corruption Conference.

We will be making the case for the UN to establish:

• Clear complaint mechanisms and standards to protect whistle blowers
• A requirement of reporting on beneficial ownership of PMSCs and subcontracting by PMSCs
• Increased transparency of contracts and enhanced reporting on exports of PMSC services to enable external oversight and accountability, including procurement and transfers of weapons and equipment in line with arms control requirements
• Heightened oversight at the higher level of states institutions. For example, the State and Defense Department should establish accessible whistleblowing channels and regularly monitor their use, at a minimum

As the event is being held in Washington, we will also share a roadmap for progressing US legislation, highlighting the need for:

• The definition of defence services to be expanded to include combat activities and potentially intelligence services, so that US companies and individuals must obtain US government authorisation (or a licence) to export such services
• More detailed reporting to Congress on defence service exports, including listing the specific types of authorised defence service and associated dollar value for each country
• Enhanced policy guidance for the State Department to assess the risks of corruption before approving a contract or license for PMSC services abroad

It’s time for PMSCs to be brought out of the shadows. Join us.

By Dr Jelena Aparac, the UN’s Independent Expert on its Working Group on the Use of Mercenaries and Ara Marcen Naval, Head of Advocacy at Transparency International Defence and Security.

The Russian network Wagner, which has spawned shadowy mercenary groups operating in conflict zones around the word, has just opened its first headquarters in Saint Petersburg.

From the battlefields of Ukraine to the ongoing conflicts in South Sudan and the war in Yemen, private military security companies and their corporate partners are flourishing from conflict. Despite the deadly force they fuel, these firms remain subject to scant regulation and accountability.

Next week [December 1 – December 2], the United Nations will stage talks on the dangers posed by the Wagner network and other private military and security companies. Governments recognised and began talking about the need to better regulate the activities of non-state security outfits back in 2008. Well over a decade on, they’re still talking.

In that time, the industry has grown to be worth US$224 billion. That figure is expected to double by 2030. New groups are proliferating, seizing on opportunities to make money from conflict hotspots.

Russian contractors, subject this summer to gold smuggling investigations in Sudan. Wagner, perhaps the world’s most notorious network operating in this sector – often through elusive and locally-registered companies that use an alphabet soup of opaque brand names – has meanwhile been accused of murdering civilians in Central African Republic, in Libya, and more recently in Ukraine.

Latest research from Transparency International Defence and Security underscores the myriad threats that leaving this growing sector unregulated pose on a global level.

Contractors are expanding their sales of surveillance, armed security and military training to many countries around the world, often including nations that have critically weak protections against defence sector corruption.

This growing industry, while sometimes providing necessary or benign support to the keeping of security and safeguarding of rights, has the potential to infringe international law, and insufficient oversight and regulation risks personnel engaging in corrupt conduct or human rights abuses.

Recent reports point to firms perpetrating suspected war crimes in Mozambique. In Libya and Yemen, claims have been made that groups are engaging in cyber-attacks against political opponents, human rights activists, and journalists, and almost always linked to the exploitation of natural resources.

As firms seek to expand opportunities, they are increasingly taking on activities in new areas, such as security around border controls and for mining industries. These often require technical and logistical support, opening the door to bribes to politically connected sub-contractors.

This outsourcing of one of the primary responsibilities of the state, the provision of security, is worrying. And efforts to respond to the risks are falling flat.

Initiatives such as the publication of the Montreux Document, which outlines the theoretical and non-legally binding responsibilities of states, have proven out of step with the risks posed, largely due to the non-binding nature. Similarly, the industry’s Code of Conduct only encourages voluntary standards to be upheld by the companies it audits and certifies.

With the ever-accelerating rise of Wagner, the time to move from words to the establishment of robust international rules and regulation that provide transparency and accountability for victims around the globe has surely arrived.

Our latest research catalogues conflict and corruption around the word – harm caused by leaving the privatisation of national security to grow and operate without proper regulation.

Post-Afghanistan, exploitation of global conflicts is big business. Most private military and security firms are registered in the US, so we are calling on Congress to take a leading role in pushing through meaningful reforms under its jurisdiction. The time has also come for accreditation standards to be enforced rather than only encouraged, at both a national and international level.

Michael Ofori-Mensah, Head of Research at Transparency International Defence and Security, describes some of the dangers documented in our latest research paper.

Unaccountable private military and security companies continue to pursue partnerships that in recent years have led indirectly to the assassination of presidents and journalists, land grabs in conflict zones, and even suspected war crimes.

From Haiti to Saudi Arabia to Nigeria, US-based organisations – the firms that dominate the market – have found themselves associated with a string of tragedies, all while their sector has grown ever-more lucrative.

Transparency International Defence and Security’s latest research – ‘Hidden Costs: US private military and security companies and the risks of corruption and conflict – catalogues the harm playing out internationally as countries increasingly seek to outsource national security concerns to soldiers of fortune.

Hidden costs from the trade in national security

While the US and other governments have left the national security industry to grow and operate without proper regulation, the risks of conflict being exploited for monetary gain are growing all the time.

Hidden Costs documents how the former CEO of one major US private military and security company was convicted – following a guilty plea – of bribing Nigerian officials for a US$6bn land grab in the long-plundered Niger Delta.

Our research also highlights that the Saudi operatives responsible for Jamal Khashoggi’s savage murder received combat training from the US security company Tier One Group.

Arguably most damning are the accounts from Haiti, where the country’s president was killed last year by a squad of mercenaries thought to have been trained in the US and Colombia.

Pressing priority

Many governments around the world argue that critical security capability gaps are being filled quickly and with relatively minimal costs through the growing practise of outsourcing.

Spurred on by the US government’s normalisation of the trade, US firms are growing both their services and the number of fragile countries in which they operate.

The private military and security sector has swelled to be worth US$224 billion. That figure is expected to double by 2030.

The value of US services exported is predicted to grow to more than $80 billion in the near future, but the industry and the challenge faced is global.

The risks of corruption and conflict in the pursuit of profits are plain.

These risks are as old as time. But their modern manifestations in warzones must not be left to spill over. The 20-year war in Afghanistan cultivated dynamics that threaten further damage, more than a decade after governments first expressed their concerns.

Required response

International rules and robust regulation are urgently needed. We need measures that ensure mandatory reporting of private military and security company activities. The Montreux Document lacks teeth, operating as it does as guidance that is not legally binding. Code of conduct standards must also become mandatory for accreditation, rather than purely voluntary.

Most private military and security firms are registered in the US. So Transparency International Defence and Security is also calling on Congress to take a leading role in pushing through meaningful reforms under its jurisdiction. There is an opportunity arriving in September, when draft legislation faces review.

Policymakers have long been aware of the corruption risks and the related threats to peace and prosperity posed by this sector. The time for action is well overdue. No more Hidden Costs.