Friday, October 1, 2010
Tuesday, September 28, 2010
Maritime Security: Insurance Firms Plan Private Navy To Take On Somali Pirates
Sean Woollerson, a senior partner with JLT, told The Independent: “We are looking at setting up a private navy to escort vessels through the danger zones. We would have armed personnel with fast boats escorting ships and make it very clear to any Somali vessels in the vicinity that they are entering a protected area.
“At the moment there is a disconnect between the private security sector and the international naval force. We think we can help remedy that and place this force under the control of the multi-national force. We look after about 5,000 ships and have had 10 vessels taken in total, including a seizure where one crew member was shot and killed. Piracy is a serious problem, these are criminals basically extorting funds, so why not do something more proactive?”
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Jardine Lloyd Thompson Group (JLT), which insures 14 per cent of the world’s commercial shipping fleet, said the unprecedented “private navy” would work under the direct control of the military with clear rules of engagement valid under international law. Early discussions have also been held with the Ministry of Defence, the Department of Transport and the Foreign Office.
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I posted an article back in April that hinted at this private navy concept, and I had no idea that it would get to this level. This is fantastic news and I totally support such a thing. Mr. Woollerson is right and companies must do something more proactive.
Now on to the control mechanism for this force. Perhaps now would be a time for Britain to re-evaluate their position on the Letter of Marque and Reprisal? The Declaration of Paris might have been a nice concept at the time of ratification, but it removed a tool of the British government for dealing with non-state actors like pirates? They could actually license this private navy to do what it is doing.
Within the terms of the license, that is where they can define who the companies answer too and what legal mechanisms they are to abide by. They can also put fail safe measures on this private navy, like an expiration date or something similar. Because if this private navy ‘would work under the direct control of the military with clear rules of engagement valid under international law’, then you guys might as well go all the way and issue the LoM?
Another thing that I was thinking about here is that if JLT is successful with this insurance/private navy model, then will other insurance companies get the hint and be ‘proactive’ as well? I guess time will tell and if the action does equate to a cost savings and safer voyages for the shipping industry, I am sure it will catch on.
Finally, there is the cost factor. It is extremely costly for the navies of the world to continue these anti-piracy operations using these large vessels/expensive air assets to go after pirates armed with AK’s in little motor boats. How is this sustainable economically? Eventually, the work load would have to be shared in order for it to continue, and perhaps private industry is looking into the future here. They are also looking at the fact that boats are still being taken, and all these fancy high tech navies are not able to stop these pirates. Nor is there anything being done on land, and the profitable piracy industry has no where to go but up. Being proactive makes sense given the current state of things.
Interesting stuff and I would like to know what company JLT will go through for raising this private navy? If any readers, or even JLT can answer that one, that would be very cool. Hell, I will even post the recruitment ad for this ‘private navy’, and I will guarantee that JLT’s contractor will get a huge response. –Matt
Edit: 10/01/2010 -Be sure to check this show out in regards to the story. They discuss how the LoM could be used as a legal mechanism for this private navy.
Insurance firms plan private navy to take on Somali pirates
Somali Pirate Attacks Sink Premiums as Insurers Leap Aboard
Jardine Lloyd Thompson Group Plc
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Insurance firms plan private navy to take on Somali pirates
By Cahal Milmo
September 28, 2010
Patrol boats crewed by armed guards to protect valuable ships in Gulf of Aden
Insurers have drawn up plans for the world’s first private navy to try to turn the tide against Somali pirates who continue to plague the global shipping industry by hijacking vessels for ransoms of more than £100m a year, The Independent has learnt.
The new navy, which has the agreement in principle of several shipping groups and is being considered by the British Government, is the latest attempt to counter the increasingly sophisticated and aggressive piracy gangs who operate up to 1,200 miles from their bases in the Horn of Africa and are about to launch a new wave of seaborne attacks following the monsoon season.
A multi-national naval force, including an EU fleet currently commanded by a British officer, has dramatically reduced the number of assaults in the Gulf of Aden in recent months. But seizures continue with 16 ships and 354 sailors currently being held hostage. The Independent has seen Nato documents which show both ransom payments and the period that pirates are holding vessels have doubled in the last 12 months to an average $4m and 117 days respectively.
In response, a leading London insurer is pushing ahead with radical proposals to create a private fleet of about 20 patrol boats crewed by armed guards to bolster the international military presence off the Somali coast. They would act as escorts and fast-response vessels for shipping passing through the Suez Canal and the Indian Ocean.
Wednesday, September 15, 2010
PMC 2.0: Innovation Prizes For Private Military Companies
“I’m worth a million in prizes..” Iggy Pop
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Wow, I really liked this article at the Economist and I wanted to share. It kind of shows how desperate private industry and governments are for really good ideas. And as everyone here knows, I am all about new ideas or ‘building snowmobiles’ and I try to promote that process as much as I can.
But imagine adding incentive to the ‘building snowmobiles’ theme? That is what makes innovation prizes such an interesting and potentially lethal concept for our industry and the war effort. Perhaps I should consider raising prize money for the best construction of a Letter of Marque concept for modern warfare use? How about an innovation prize for low cost, high return warfare ideas? Really open it up to the public, or just offer the contests within the boundaries of an organization. How about an innovation prize for new types of war or business strategies? Or how about for a company logo? To really put it out there, how about using mobile cash as a means to reward locals as a means of gaining ideas for COIN and reconstruction in Afghanistan?
Companies could also offer innovation prizes to those who can come up with the best cost saving ideas, or to new directions in business? There are many complex problems a company could try to solve by putting it out there for their employees to solve through a prize system. It is just one more way to create that unique situation that would allow for your employees to create something important to the company or ‘people will support what they help to create’.
Now the one thing that is most valuable and truly the prize, is business success or victory in war. A company would be smart to not only offer prizes for innovations, but to reward their company as a whole by increasing salaries because they are more profitable. Or offer the benefit in one way or another, which would reward your employees for participating in this innovation prize concept in the first place.
The articles below indicate that this is a major theme throughout the world, and it sounds like most of the experts agree that it works. For companies reading this, InnoCentive is the company that the Economist identified as a platform for innovation prizes. Or you could just start your our prize initiatives. If the US government is jumping all over this stuff with their Challenge.gov site, then our industry could probably stand to benefit from it as well. I would even post it here on the blog if it was open to the industry and public?
As for the problem solvers out there, there are plenty of prizes to go after if you have some big ideas. Thousands of dollars are available and it sounds like these prizes are only increasing in size and number. Just check out the chart below. –Matt
Challenge.gov looking for great ideas
For Corporations (from InnoCentive website)
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Offering a cash prize to encourage innovation is all the rage. Sometimes it works rather well
Aug 5th 2010
A CURIOUS cabal gathered recently in a converted warehouse in San Francisco for a private conference. Among them were some of the world’s leading experts in fields ranging from astrophysics and nanotechnology to health and energy. Also attending were entrepreneurs and captains of industry, including Larry Page, the co-founder of Google, and Ratan Tata, the head of India’s Tata Group. They were brought together to dream up more challenges for the X Prize Foundation, a charitable group which rewards innovation with cash. On July 29th a new challenge was announced: a $1.4m prize for anyone who can come up with a faster way to clean oil spills from the ocean.
The foundation began with the Ansari X Prize: $10m to the first private-sector group able to fly a reusable spacecraft 100km (62 miles) into space twice within two weeks. It was won in 2004 by a team led by Burt Rutan, a pioneering aerospace engineer, and Paul Allen, a co-founder of Microsoft. Other prizes have followed, including the $10m Progressive Automotive X Prize, for green cars that are capable of achieving at least 100mpg, or its equivalent. Peter Diamandis, the entrepreneur who runs the foundation, says he has become convinced that “focused and talented teams in pursuit of a prize and acclaim can change the world.”
Wednesday, September 1, 2010
Industry Talk: Policing Foreign Subcontractors And Contractors Is A Problem For NGO’s, PMC’s And The UN
And, sir, we fired him, we fined him, but we as a private organization can’t do any more. We can’t flog him, we can’t incarcerate him. That’s up to the Justice Department. We are not empowered to enforce U.S. law. -Erik Prince Testimony Before Congress, 2007
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This is an excellent little article below, and the quote up top kind of sets the stage for the problem that needs solving. I should note that this is not just a problem for PMC’s in Iraq and Afghanistan, but for NGO’s and the UN as well. So while reading this, understand that the lessons learned here could also apply to those other organizations out there that work in foreign lands and depend upon contractors and their subcontractors to get work done. Governments that depend on the services of these organizations need to figure this stuff out as well, because they stand to lose much if their mission is hindered or threatened by the actions of contractors and subcontractors.
As you can see with Erik Prince’s famous testimony, that pretty much says it all. I have yet to work for a company that had it’s own prison or set of laws to abide by. The laws we were to follow were that of our host nation, or the laws applied by whatever nation the customer we worked for belonged to. Each contractor’s country has laws that could also be brought into the mix. But when it comes to actually applying the rule of law to contractors who do wrong, that is when things get all screwed up. It gets really screwed up, when a contracting company uses ‘subcontractors’, because that adds even more confusion.
So really, like Mr. Prince said, all companies can do is fire that individual, fine that individual, and notify the customer that contracted their services that this happened. Companies in Iraq and Afghanistan also have a difficult choice between wether or not they should tell the police of those countries. Especially during the different phases of the war or if that country is a failed state.
In the early phases of the wars, most companies would not hand over their employees to weak or failing governments for prosecution. In a way, that would be a worse crime than whatever that contractor did. It does happen though. An example of that is the corrupt justice system in Afghanistan that is currently holding contractors and giving them punishments that are far more extreme than the supposed crime they committed. Or falsely arresting contractors and extorting them. With that kind of twisted legal system, why would a company hand over a contractor or subcontractor to such a system? (unless forced to because of some political mess created by the customer a company is serving)
Which goes back to the customer. In today’s war, the customer has usually been the US government. So why haven’t DoD, DoS, or USAID applied any kind of rule of law or punishment to contractors and subcontractors in the course of the war? That is a great question, and I haven’t a clue why the media and critics continue to blame companies for the lack of action on the part of these customers. It’s as if government has no responsibility in this matter, and the companies continue to be the fall guy. But companies continue to take contracts because no one wants to solve the problem or accept responsibility for any criminal outcomes do to a lack of rules/laws. See how the cycle works? lol
But of course NGO’s and the UN are in the same boat as PMC’s. They too operate in foreign lands, and they hire contractors and their subcontractors and have to face the same legal issues as well. But they are the ‘good guys’ and they get no mention at all by the critics? Pfftt. That is why all parties in this discussion could learn from each other as to the best way forward.
One solution is for countries to start issuing licenses or letters of marque again. I look at these documents as a connection between the law makers of a country, and the private industry or organizations that want to do work for those countries either locally or abroad. For this to properly work, two licenses would be needed–one from the host nation, and one from the parent nation of that company or organization. If the host nation is a failed state or in the middle of a war, then all that would be required is one license from the country paying the bills. And really, one license is all that is needed, but hey, if the customer wants you to have a license from the other country you are operating in (depending on the state of said country), then so be it.
For NGO’s, they would be issued licenses by the countries they wish to help. It would be a similar to a SOFA that is signed between two nations for militaries. Call it a SONA or status of NGO’s agreement if you will. I just call it a license to operate in that country, or letter of marque. This license would be a set of rules and laws that an NGO could look to as guidance, and it would also be something they could pass on to their workforce (contractors/subcontractors) as to what the deal is. Of course in this system of operation, all who are involved must know what they are getting themselves into when they sign on as a contractor. That means the local national, expat, or third country national work force would have to know the rules and laws that apply to them directly. For each type of contractor, the license should also state what applies to them as well. Of course a local national already falls under the laws of that country, but the license can dictate what the company or organization has to do in the case of contractor wrong doing.
As for the UN, perhaps they could be the issuer of a LoM as well? If they are truly representative of nations throughout the world, then a LoM from this type of organization should come from the blessings of all of these nations. Perhaps the security council would be the issuing authority, and before any contractor could be used by the UN, they must have this license (and a license from the host nation if the council deems necessary)? Of course within the language of the license would be the outline as to what would be done to a contractor or subcontractor if they committed minor offenses, all the way up to murder or rape?
The other reason why I like this licensing system, is that this is a direct connection between the law makers of countries, and private industries/organizations. I envision lawyers from both a company/organization and a government going into a room, and hashing out exactly the terms of the license. A logical outcome from that discussion would be a set of laws that would satisfy the requirements of that country and allow companies/organizations to provide a service.
I would also put expiration dates on a license or mechanisms that would automatically expire the license, just as a means of control. This was crucial to early usage of privateers when the Letter of Marque was used back in the day. The modern use of such a thing should also have contract limits and other stop gaps so things can be reevaluated and adjusted as conflicts and missions change.
What is interesting about this system, is that at least some rule of law can be decided upon between two parties and the contractors and subcontractors that are hired under such a system would know exactly what would happen to them if they broke the laws outlined within the license. The license negotiations could also have military lawyers involved as well, so that the strategies used by military planners will not be hindered by the terms of the license. Get all the legal guys in a room, and get it done. Millions if not billions of dollars are at stake, the reputation and objectives of all involved are on the line, and the safety and health of all involved could all depend upon the rules and laws laid down by such licenses. Other than that, I don’t know of much else that countries and companies/organizations could agree upon to get the job done and insure some rule of law is applied to the process?
Another component of the license that would be very important, is verification. A trust by verify system that ensures companies and organizations are actually abiding by the terms of the license/laws. That would require monitors, which seems to be what everyone is screaming about for much of today’s contracting issues already. So the party issuing the license, would have it in their best interest to insure monitors are available per contract/subcontract to insure everything is done right.
Violations of the laws and rules within the license, would also be defined by the license itself. If a contractor or subcontractor wants to work for that NGO, PMC, etc., then they are also falling under the terms of that license. That means you could now be a criminal to whomever issued the license, if you violate the law you in signed on to follow. Letters of Marque are mechanisms that other countries would have to recognize, much like countries recognize each other’s borders or governments, and basically these companies and organizations would be flying the flag of customers, and abiding by the laws/rules set forth in the license. As a contractor, you play under those laws until you are done with the contract. If the license was set up properly, the scenario spelled out by Mr. Prince would then have one more element, and that is the requirement of the company to abide by the license/laws.
But like I have said before, these issues of the rule of law would be decided upon by the law makers of countries and the lawyers of companies and organizations through meetings and negotiations. Just some food for thought, and I am sure there are other ideas of the way forward as well.
By the way, it is funny how I continue to go back to this very simplistic licensing system that nations used to use for hundreds of years. I laugh because we are expending so much energy in trying to ‘reinvent the wheel’ when it comes to this stuff, and all we have to do is look to the past for the lessons learned. –Matt
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The Struggle to Police Foreign Subcontractors in Iraq and Afghanistan
Billions at Stake, but U.S. Investigators Stymied by Murky Rules, Enforcement Obstacles
By Nick Schwellenbach and Lagan Sebert
August 29, 2010
To win hearts and minds in Afghanistan and Iraq, military experts want U.S. companies to contract with local firms for a variety of tasks like trucking, feeding troops, and providing security. The U.S. government’s “Afghan First” and “Iraqi First” initiatives increasingly seek to rely on local contractors, often through subcontracts, in part to stimulate their local economies.
Monday, August 9, 2010
Mexico: ‘Plomo O Plata’, Lead Or Silver For Law Enforcement In Mexico
This stuff always sucks to hear about, but is the reality of this drug war. In the market of force, the police are every bit a part of that mechanism. If the states or government cannot pay more than the cartels, or at least provide a living wage to their police force, well then the decision for poorly paid cops is pretty simple.
Couple that with this Plomo O Plata concept. The cartels do pose a threat to these officers and their families, and I am sure the cartel’s intelligence apparatus is able to find out where the cops live no problem. And when they get a hold of them, the cartels usually torture them, kill them, and mutilate the body to send a message. Some message, huh?
I will say this again, the way to deal with these cartels is to create an industry out of capturing or killing them (preferably capture them, so you can find more of the scum and their loot through interrogations). The government could start issuing Letters of Marque (LoM) to companies and individuals world wide (or just North America) who could profit off the destruction of cartels. They would allow these companies and individuals to capture folks for the bounty (Mexico would fund this and possibly tap into Rewards For Justice) , and take their assets through a Prize Court system.
The state would also get their cut, and if any of the companies and individuals who were issued an LoM steps out of line based on the terms of that LoM, you put them on the list of most wanted and turn the industry on them. lol With any luck the industry would dry up within a couple of years, and LoM’s would then reach their expiration date, just like how it worked for hundreds of years pre-Declaration of Paris. –Matt
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Aug. 7: Federal police officers beat fellow police inspector Salomón Alarcón Olvera, aka “El Chaman” after accusing him of being linked to drug cartels and having participated in kidnappings, executions and extortions in Ciudad Juarez, northern Mexico.
4 Mexican federal police commanders suspended following complaints of corruption, drug links
August 07, 2010
MEXICO CITY (AP) — Four federal police commanders have been suspended from their posts in a violent Mexican border city following allegations from subordinates that they have links to drug traffickers.
The action by the Public Safety Department comes just hours after 200 federal police officers detained one of their superiors at gunpoint, alleging that he had connections to drug cartels and had participated in kidnappings, killings and extortion.
The Department said in a statement late Saturday that the commander held by officers earlier in the day was transferred to Mexico City along with three other officials. All will be investigated for “possible irregular conduct.”
The four worked in Ciudad Juarez, a city across from El Paso, Texas, plagued by drug-related violence.
Story here.
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Mexico: Cartels Pay Corrupt Cops $100 Million a Month
August 9, 2010
PUERTO VALLARTA, Mexico – Mexican authorities said at a forum that drug-trafficking gangs pay around 1.27 billion pesos (some $100 million) a month in bribes to municipal police officers nationwide
Public Safety Secretary Genaro Garcia Luna said that figure was calculated based on perceptions of municipal officers themselves and an analysis of a list of cops recruited by the cartels that was found during a police operation.
“Organized crime pays some 1.27 billion pesos a month to municipal police, because that’s the portion of the salary the government does not pay the officers so they can live with dignity,” the high-ranking official said Friday.