Picture the scene: The head of a private military
company is appearing before the legislature. For years, his firm has prospered
from the occupation of a resource-rich Asian country, protected by its shareholders'
powerful political connections. Only now are years of long-ignored abuses coming
The setting is not Washington
2007, but London 1787. The occasion is the trial of Warren Hastings, the
first governor general of India and an employee of the British East India Company,
the government-backed private monopoly that had conquered Bengal in 1757.
The company ran Bengal as a business, tripling the land tax and ordering farmers
to plant cash crops instead of rice, a policy that contributed to the Bengal
famine of 1770, which killed 10 million people.
Its monopolies brought about Britain's Opium
Wars with China, and they were the immediate cause of the Boston
Tea Party, which sparked the American Revolutionary War.
The company's harshest critics included economist Adam Smith and the
father of modern conservatism, Edmund Burke.
Smith was particularly critical of the company's use of its political and military
power to repress its commercial competitors.
"A company of merchants are, it seems, incapable of considering themselves
as sovereigns, even after they have become such," he wrote in The
Wealth of Nations. "Trade, or buying in order to sell again, they
still consider as their principal business, and by a strange absurdity regard
the character of the sovereign as but an appendix to that of the merchant, as
something which ought to be made subservient to it, or by means of which they
may be enabled to buy cheaper in India, and thereby to sell with a better profit
Burke led the attempt to impeach Hastings in the House of Commons, arguing
that "there is no action which would pass for an act of extortion, of peculation,
of bribery, and oppression in England, that is not an act of extortion, of peculation,
of bribery, and oppression in Europe, Asia, Africa, and the world over."
The case dragged on for seven years before ending in Hastings' acquittal. Nevertheless,
the East India Company Act of 1784 marked the beginning of attempts to subordinate
the company's military power to the state, a process that would not be completed
until after the Indian Rebellion of 1857.
The history of the East India Company remains
relevant today, not least because it has been cited
as a precedent by Tim Spicer, whose company Aegis
Defense Services holds the largest private military contract in Iraq.
Spicer's own career illustrates the roots of the modern private military industry
in a business model that uses military power to distort markets.
According to his autobiography,
Spicer was approached in 1993 by Tony
Buckingham and Simon Mann to take part in their operations in Angola. Buckingham's
company, Heritage Oil, had interests
in the town of Soyo which had been overrun by UNITA rebels. To retake the town,
Buckingham hired Executive Outcomes (EO), a South African mercenary firm staffed
by apartheid-era veterans. After successfully gaining control of Soyo, EO helped
the Angolan Army take back the diamond fields of the northeast, where a concession
was granted to another Buckingham company, Diamondworks.
Spicer declined to take part on that occasion, as he was still serving in
the British Army, but was approached again by Buckingham and Mann in 1995. At
a meeting between the three men in the La Famiglia restaurant in Chelsea, West
London, the modern concept of the Private
Military Company (PMC) was born. The acronym was – ironically, in light
of later events – intended to contrast with what Spicer called "the headbanded
dogs of war" image.
Spicer was to head up Sandline International,
a new vehicle, established because, in his words, "it was becoming clear
that EO, however well-established, carried a lot of political baggage."
Sandline undertook its first major operation later that year, when it was hired
by the government of Papua New Guinea to subdue the rebel-held island of
Bougainville, home to one of the world's largest copper mines. The mission turned
into a fiasco when regular army troops rose up against the employment of Sandline's
rival mercenary force, which largely consisted of subcontracted EO troops.
In 1997, Sandline was hired
by the ousted president of Sierra Leone, Ahmed Tejan Kabbah, to fight rebels
in the war-torn West African state, a mission previously carried out by EO.
That episode also ended
in controversy when Sandline was found to be shipping
arms in contravention of an embargo. It later emerged that the operation
was funded in return for diamond concessions by Rakesh
Saxena, an Indian businessman wanted in Thailand for embezzlement.
Spicer left Sandline in 2000. The company ultimately ceased operations in
2004, not long after Spicer
had been called into the Foreign Office to discuss a coup attempt that was
about to be launched by his former colleague Simon Mann in Equatorial Guinea.
to put in place a puppet government that would allow real power in the oil-rich
West African state to be exercised by the Bight of Benin Company, an entity
explicitly modeled on past British imperial ventures like the East India Company.
Instead, the attempt collapsed with Mann's arrest in Zimbabwe, where he remains
Researchers later discovered that Mann's plan closely resembled
an earlier attempt in 1973 involving acquaintances of the author Frederick
Forsyth, who presented a thinly fictionalized version of the episode in one
of his best known novels – The
Dogs of War.
Forsyth was himself an
investor in Spicer's new company, Aegis Defense Services, which by this
time had won one of the largest U.S. security contracts in Iraq.
Unlike the weak governments that previously employed PMCs, the U.S. does not
have to resort to paying off contractors with mineral concessions. Nevertheless,
there are signs that the older business model is reemerging in Iraq.
"I don't subscribe to the view that there is a civil war going on, but if
the coalition left it could very easily disintegrate into one," Spicer told
Guardian last year. "The Iraqi security forces are not ready to take
control. And therefore there would be a very significant increased role for
private security – protecting critical infrastructure like oil, power station
and water supplies, otherwise the insurgents will blow them up."
Tony Buckingham's Heritage Oil has been present
in Iraq for several years. Earlier this month, it was one of four
companies to receive production-sharing contracts from the Kurdish regional
government, in the face of opposition from the Iraqi central government and
the U.S. State
"The Kurds are basing the agreements on a regional Kurdish hydrocarbon law,
and that law still needs to be married up with a federal hydrocarbon law," one
U.S. embassy official told the Canadian
Press. "The real question is why would any company be willing to invest
significant capital in a deal that would likely be at some point subject to
challenge within the Iraqi courts."
Times report on the deal suggests one answer to that question: "Industry
sources said the status of Heritage in Iraq could be boosted because of Mr.
Buckingham's connection to Tim Spicer, who ran Sandline and whose company Aegis
provides security services to the U.S. government in Iraq."
Given the fault lines between the Iraqi government and the Kurds over the
oil law and possession of the
oil-rich city of Kirkuk, the perception that Tony Buckingham's business
comes with Tim Spicer's military muscle could prove a destabilizing factor.
The dangers are illustrated by the current situation in the Great Lakes region
of Africa, where Heritage Oil is a key player in oil exploration along the border
between Uganda and the
In recent months, the company has been embroiled in two border incidents that
have sparked new
fears of war in a region already devastated by conflict.
In August a British geologist, Carl
Nefdt, was killed aboard a Heritage Oil barge on Lake Albert, during a firefight
between Congolese and Ugandan troops.
Sunday Monitor later suggested that Heritage Oil had benefited from
the resulting military standoff: "Sources say it is now getting better
cooperation from Joseph Kabila's government (in the face of threats by Uganda
to reenter). Before this, Heritage had made it publicly known that Kinshasa
was at best dilly-dallying about activating the exploration concession agreement
it signed with Kinshasa."
A Heritage barge was also said to be involved in border
clashes last month.
Years of war have
left the resources of the eastern Congo open to plunder by neighboring powers.
Given its weak hold over the region, the Congolese central government is particularly
wary of Heritage's track record.
"Sources familiar with this matter say Kinshasa is unhappy about the
relationship Heritage might be enjoying with Executive Outcomes (EO) – a mercenary
outfit of ex-South Africa army commandos," the
Monitor of Kampala reported earlier this month. "They also see
EO's probable links with President Museveni's brother, Gen. Salim Saleh, through
his Saracen Guards company, as being potentially problematic."
By enlisting private military companies, the U.S. has turned to an industry
that has its roots in the struggle for the resources of weak African states.
In doing so, it may have unleashed forces that have little to gain from successful
state-building in Iraq.