Feral Jundi

Monday, February 27, 2012

France: Regulation, Expansion Of French PMSC’s Urged By Members Of Parliament

“Global sales of the sector(security) are difficult to evaluate, but the specialists put it between $100 billion and $200 billion a year,” the report said, adding that the Foreign Ministry puts the figure as high as $400 billion for the total market for security and defense services.
Some 5,000 security firms operate in the world market, which is changing continuously and sometimes with a hazy line between security and military practices, hence the usefulness of calling them security and defense service companies.
Of the French firms, average annual sales is 3 million euros ($4 million). The largest is GEOS with 40 million euros followed by Risk & Co with 28 million euros, the report said.

Very interesting article and France is now joining China in this ‘re-evaluation’ of PMSC viability. I think what we are seeing here is a realization by France that it is missing out on a massive market, and by not having a vibrant and competitive PMSC industry, that they are missing out strategically.

That last part is the most important part because like most of Europe, France needs oil. In a world where oil producing countries are threatened by regional instability or the demand continues to push supply, countries are looking to all and any means of achieving strategic advantage for those resources. Having French companies on the ground, working day in and day out with these oil rich, war torn nations, or protecting the various key individuals and projects within these zones, is one way to ‘influence’ and grab a larger piece of the ‘oil pie’ in those regions.

To further emphasize this last part, here is the quote that perked me up.

A visit to Libya showed the significant presence of “Anglo-Saxon companies,” which have used the uncertain situation on the ground to develop their businesses.
“Their presence seems to favor British economic interests,” the report said. “It seems very desirable, within the framework of Libyan law, for our societies to form partnerships to set themselves up for the long term in this country, as there are strong expectations toward France,” the report said.

The other oil related indicator of need is maritime security. France does not want to depend upon other nation’s PMSC’s to protect their flagged vessels. And those flagged vessels transport commerce and oil/gas.  It is of national interest to ensure these vessels are protected and the economy of France is not negatively impacted by piracy. PMSC’s are a strategic asset that France can tap into to protect that interest.

 French Navy commandos aboard cargo ships. The daily cost of a Navy team is 2,000 euros, compared with 3,000 euros charged by a private company, the report said.
A Royal Dutch Navy team on a cargo ship costs 80,000 euros, reflecting the deployment of 18 personnel, including a nurse. But the demand for onboard protection outstrips supply of Navy teams, and a flourishing private market has sprung up.
Some French oil companies have asked for Navy teams but have had to go to the private sector because squads were unavailable, Betto said…British companies dominate this sector, including Triskel, APMSS and Solace, with a U.S. specialist, Advanfort. An estimated 170 companies specializing in armed maritime protection were set up in Britain from Jan. 1 to Sept. 30 last year, the report said.
The only French firm in this market is Gallice. With annual sales of 20 million euros, it offers armed protection through an Irish subsidiary in order to avoid tangling with French law, the report said.

So France is putting military details on private vessels, and because the need outstrips the supply, they are having to look to the private sector for security–which means using  British or other companies. I am sure that does not sit well with these French shipping companies. lol

Also, how is putting Naval commandos on private vessels  the best use of that resource? Shouldn’t they be doing more important missions, like hostage rescue? Using highly trained commandos for basic protective duties is not a wise choice for this particular mission, and especially when you only have a limited number of those commandos.

Some of the companies mentioned in this article are Argus and a Global X. I have not heard anything about these companies, but here are some quotes about them below.

The European Union uses Argus, a Hungarian-registered company, for building security in Libya. The firm is led by French nationals, and using diplomatic status, the personnel carry weapons…A group of French companies — Geodis, GIE Access, Sodexo and Thales — has formed the Global X company to bid for contracts in U.N. peacekeeping operations, which is seen as a huge market. Such contracts would provide jobs for former French service personnel and create a presence where active French soldiers are not deployed.

 UN peacekeeping operations?  Interesting. Global X would be a serious contender as well, just because having french speakers is a big plus for a few places in Africa. 

So there you have it. Libya and it’s oil, maritime security, and peacekeeping are the markets that France is looking at, and they estimate the global security and defense market to be a 400 billion dollar industry! Not only that, but PMSC’s are viewed as strategic assets, much how China is seeing this industry.

The US and Britain are already way ahead of most of the world when it comes to this industry thanks to ten years of constant war. But as more countries catch on, I imagine the market will evolve and become more interesting as time goes by.

The definition of the state and it’s monopoly on the use of force is changing as well. Countries are realizing that PMSC’s, if used properly, can be ‘real levers of influence’ to quote the report. If anyone has any info on these companies or the article below, feel free to comment. –Matt

 

Regulation, Expansion of French Private Security Firms Urged
Feb. 26, 2012
A bipartisan French parliamentary report is calling for recognition and regulation of private military companies, hoping to reverse the strong climate of rejection regarding security contractors.
The report, published Feb. 14 and co-authored by members Jean-Claude Viollet (Socialist) and Christian Menard (Union pour un Mouvement Populaire), points up the growth of business in private security and military activity over the last two decades, led by U.S. and British companies.
The sector has become so important, France can’t ignore it, the report said.

 


Private security contractors also evoke controversial mercenary operations in years past, especially those in Africa.
Any moves to grant legal recognition must overcome a resistance against the idea of private military companies, which has been fed by the violence of contractor Blackwater in Fallujah, Iraq, and a 2003 law banning mercenary activities. Blackwater has since rebadged as Academi.
The 2003 legislation would have outlawed the four decades of controversial mercenary operations led by French operator Bob Denard across Africa.
The report draws a distinction between private security companies that guard buildings, deliver money and provide bodyguards, and private military companies that offer consulting and logistical support for army bases and deployed forces.
French companies work in these areas, but their operations are not as expansive as British and U.S. firms, whose activities can extend to the use of force, the report noted.
The government has conducted confidential reports on these activities since 2010, given the strategic interests involved, and uses the term “security and defense service companies.”
Libya is seen as the new promising market after the withdrawal of allied troops in Iraq, and the forthcoming retreat from Afghanistan.
The European Union uses Argus, a Hungarian-registered company, for building security in Libya. The firm is led by French nationals, and using diplomatic status, the personnel carry weapons.
The market for such firms includes protecting premises in town and oil fields, escorting Libyan officials and foreign investors, consulting and security updates for foreign companies looking to invest in the country, and training for armed forces and police.
French political and commercial interests are at stake, the authors said.
A visit to Libya showed the significant presence of “Anglo-Saxon companies,” which have used the uncertain situation on the ground to develop their businesses.
“Their presence seems to favor British economic interests,” the report said. “It seems very desirable, within the framework of Libyan law, for our societies to form partnerships to set themselves up for the long term in this country, as there are strong expectations toward France,” the report said.
A recognition and regulation of private military companies is a good idea, said Jean-Georges Betto, partner at law firm Hogan Lovells.
“This is a market for French companies which have the competences,” he said. “France can’t be one of the rare countries which lacks a legal framework to allow such activities.”
Private military companies are closely linked to their home governments and their operations tend to reflect foreign policy to such an extent that they can be “real levers of influence,” the report said.
“The activities of security and defense services abroad has particularly grown in the last 20 years,” the report said. “Three large areas of activity can be identified: companies offering services to the state, providing an indispensable accompaniment to large companies, and more specifically, developing an offer for maritime security, notably in protecting commercial shipping against acts of piracy at sea.”
There are about 1,500 private military companies worldwide, of which only 30 to 40 are French, employing about 1 million staff, boosted with the occasional extra hiring, Viollet told the parliamentary defense committee. U.S. and British companies dominate the sector, benefiting by winning outsourcing contracts and obtaining large markets, the report said.
“Global sales of the sector are difficult to evaluate, but the specialists put it between $100 billion and $200 billion a year,” the report said, adding that the Foreign Ministry puts the figure as high as $400 billion for the total market for security and defense services.
Some 5,000 security firms operate in the world market, which is changing continuously and sometimes with a hazy line between security and military practices, hence the usefulness of calling them security and defense service companies.
Of the French firms, average annual sales is 3 million euros ($4 million). The largest is GEOS with 40 million euros followed by Risk & Co with 28 million euros, the report said.
Menard told the defense committee he believed in the state’s monopoly role over armed force, but the anti-piracy needs convinced him of the rightness of legal reform that recognized and regulated French firms. Otherwise, French companies would put their ships under foreign flags of convenience to obtain the protection provided by “Anglo-Saxon” private military companies.
A group of French companies — Geodis, GIE Access, Sodexo and Thales — has formed the Global X company to bid for contracts in U.N. peacekeeping operations, which is seen as a huge market. Such contracts would provide jobs for former French service personnel and create a presence where active French soldiers are not deployed.
Private Security at Sea
Piracy off the Somali coast and in the Gulf of Guinea has led to the stationing of French Navy commandos aboard cargo ships. The daily cost of a Navy team is 2,000 euros, compared with 3,000 euros charged by a private company, the report said.
A Royal Dutch Navy team on a cargo ship costs 80,000 euros, reflecting the deployment of 18 personnel, including a nurse. But the demand for onboard protection outstrips supply of Navy teams, and a flourishing private market has sprung up.
Some French oil companies have asked for Navy teams but have had to go to the private sector because squads were unavailable, Betto said.
The risk of opening fire is seen to be low because much of the mission is deterrence, Betto said. The teams patrol on deck in full view.
The latest trend is to provide an escort vessel with armed teams on board, which avoids making the captain of the commercial ship legally responsible in case the teams open fire on pirates, he said.
British companies dominate this sector, including Triskel, APMSS and Solace, with a U.S. specialist, Advanfort. An estimated 170 companies specializing in armed maritime protection were set up in Britain from Jan. 1 to Sept. 30 last year, the report said.
The only French firm in this market is Gallice. With annual sales of 20 million euros, it offers armed protection through an Irish subsidiary in order to avoid tangling with French law, the report said.
“To have a solid network of security and defense service companies is an asset,” the report said. “Beyond the supply of classic services, they are a guarantee of sovereignty for the states and tools for conquering markets.“
Story here.

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