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The Code Is More What You'd Call 'Guidelines'

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You may recall that in the past I've not been what you would call enthused about the idea that industry codes of conduct are a particularly effective way of ensuring compliance with relevant laws and regulations and human rights norms when it comes to private military and security companies. Call me a cynic if it makes you feel better, but self-regulation in conflict zones has never struck me as a smart idea. As I've said before, codes of conduct are better than nothing, but lacking enforcement or the means to exact consequences, if the code is violated, not much more so. Let's just say that codes have a certain amount of elasticity. Or, as Captain Barbossa said in the Pirates of the Caribbean movie, "The code is more what you'd call 'guidelines' than actual rules."

But some people note that I am not a lawyer -- so what do I know? That's a fair criticism. So let's turn to a 2011 article in the Southern California Review by Stephanie M. Hurst.

In her article, "Trade in Force: The Need for Effective Regulation of Private Military and Security Companies" she looks at the Code of Conduct promulgated by the International Stability Operations Association, a leading PMSC trade association. She writes:

While the ISOA continues to improve its Code and welcomes criticism from organizations such as Amnesty International USA ("AIUSA"), it has not yet adequately implemented AIUSA's suggestions. AIUSA noted two key faults of the Code and its enforcement: (1) ISOA member companies have no duty to assist or provide information during a pending investigation into allegations of abuse and (2) there is a lack of outside, independent monitoring that could provide additional credibility. Currently, enforcement of the ISOA's Code "lacks transparency and appears highly partial, given that it leaves [its] enforcement ... to the unfettered discretion of its membership." Moreover, the Code does not define how human rights and IHL compliance can be implemented by PMSCs; therefore, it provides little guidance for its members to comply with these laws as well as to those seeking to ensure that members are in compliance. Also problematic, the ISOA's Code is "neither universal nor compulsory." Because PMSCs are not bound to follow the Code or even to join ISOA, they can strategically choose not to join to avoid publication and investigation of their alleged abuses and the potential corresponding reputational damages. In one instance, the then-IPOA refused membership to a British PMSC that was subsequently awarded a significant Coalition Provisional Authority contract in Iraq. The awarding of this contract to a PMSC that the ISOA viewed as unfit to be a member demonstrates that the ISOA lacks the authority and influence necessary to regulate the PMSC industry effectively.

Of course, there are commercial benefits to being a signatory to a code of conduct. Whether you are KBR or Duncan Hines cake mix, it gets you a marketplace seal of approval. As Ms. Hurst writes:

Despite these problems, the importance of the ISOA in the PMSC industry continues to grow. Representatives of PMSCs have indicated that, as members of the ISOA, they have gained a competitive advantage because potential clients see them as stable companies that respect human rights and IHL; therefore, potential clients are willing to grant contracts to them.

Codes might be more credible if they could be seen as actually changing anything but thus far the evidence for that is lacking. Hurst writes:

As with domestic regulation that may be only "law on the books," industry codes of conduct may be nothing more than mere statements on paper. If PMSC codes of conduct were effective, the stories of PMSC abuses of human rights and IHL [International Humanitarian Law] would be reduced; however, this reduction has not happened. PMSCs are not yet prepared to handle the task of enforcing compliance with human rights and IHL across all of their operations. Even if a PMSC possesses an adequate internal compliance mechanism, most PMSCs do not possess a third-party complaint mechanism that would satisfy the requirements detailed in a report by U.N. Special Representative John Ruggie. And like most other regulation, industry initiatives and self-initiatives are voluntary and, therefore, often lack sufficient influence to create universal compliance. These efforts are usually either ignored completely or result in punishment that is nothing more than a slap on the wrist.

However, even if you accept that codes are the way to go there is always room for improvement. Even ISOA implicitly acknowledges this since it revises its code every two years. Among Hurst's recommendations is this:

To improve the effectiveness of these codes, the following should be considered. First, as the statistics above show, there is a lack of consistency and uniformity among the various codes. While codes may vary in content due to the differing sizes and services provided by the individual PMSCs implementing them, a uniform set of human rights and IHL standards should be agreed on and adopted by all PMSCs to ensure industry-wide compliance with these standards. Uniformity would ensure that PMSCs operate on an even playing field by not unknowingly subjecting themselves to liability for implementing standards different from their competitors. To achieve this uniformity, PMSCs could work with international organizations and states to draft global standards.

To ensure that these codes are effective, incentives must be included to induce PMSCs to abide by the established standards. If a code is accepted by PMSCs industry wide, an informal market may be created in which only PMSCs that accept the code receive contracts and remain in business. If the code can affect the market in this way, it will be indirectly enforced because PMSCs will comply with it to avoid being forced out of the market. Also, even though uniformity may be achieved, a code is different from international regulation in that PMSCs may be given the freedom to structure compliance with industry standards to match their corporate cultures. This freedom could encourage PMSCs to adjust their behavior to meet a higher standard to gain a competitive advantage, which would, in the long run, increase overall industry standards. This system, however, has a fatal flaw: companies may need additional incentives, besides reputation, to join the system. Therefore, new incentives may need to be created to ensure that the industry's regulatory system becomes both universal and effective.