17/07/2012 05:54 BST | Updated 15/09/2012 06:12 BST

G4S and the Privatisation of War

The world's biggest private security corporationG4S, has been having a bad week. But the company has been enjoying a great decade. While the Olympics scandal is putting G4S in the spotlight, its extraordinary global reach and controversial track record are making for some uncomfortable reading.

The transferring of policing, detention and deportation to profit-driven private companies needs to be properly scrutinised. The same goes for G4S complicity in Israel's occupation of Palestine through the supply of security equipment and services for use at checkpoints, illegal settlements in the occupied West Bank, and Israeli prisons. Less well known is that G4S is an unaccountable and unregulated private military and security company.

Four years ago G4S bought ArmorGroup, and in doing so joined the shadowy world of privatised war. The last decade has seen a boom in private military and security companies (PMSCs) that perform operations previously carried out by national military services. The industry has made a killing from contracts worth over $100 billion.

These companies work for governments and corporations in war zones around the world, providing security, as well as taking part in reconstruction, direct combat surveillance and intelligence gathering. Such PMSCs have a track record in profiting from war, conflict, and political instability at the expense of security and human rights. Yet, despite facing hundreds of accusations of human rights abuses in conflict situations around the world, they remain unaccountable and unregulated.

The British government has already played a large role in the growth of this industry by endorsing its widespread use in Iraq and Afghanistan. In the three years 2007-2009 the industry earned £62.8 million in contrasts from the UK government. Almost all of the Foreign Office's money has gone to ArmorGroup, now part of G4S. ArmorGroup was the focus of a US Senate inquiry in 2010, alleging the company "relied on a series of warlords to provide armed men" who were engaged in murder and bribery and "threatened to attack Afghan Ministry of Defence personnel."

In June the British defence secretary Philip Hammond announced that Army numbers would shrink from 102,000 to 82,000 within eight years. Mr Hammond said the Army would need to use "more systematically the skills available in the reserve and from our contractors". The move will widen the role already played by contractors working for private military and security companies. But the decision to put outsourced contractors at the heart of defence policy is a recipe for disaster.

The extractives sector represent other profitable future markets for the private military and security industry. As Iraq's oil attracts multinationals, PMSCs stand to make massive profits from security contracts guarding oil installations. Nick Buckles, the G4S chief executive officer, has said that such high-risk environments offered "big opportunities" and confirmed in 2009 that the corporation had conducted "preparatory work" with oil and gas companies for contracts in Iraq.

Nonetheless, amid urgent calls on the UK government to ensure decisive controls over this deadly industry, ministers believe PMSCs are best left to police themselves through trade associations and voluntary codes of conduct. National standards, overseen by an industry body and an international code of conduct, will be launched in a matter of months.

But these measures represent the lightest of light touch voluntary regulation. There will be no real sanction powers or democratic oversight. Such moves will not enable governments or communities to hold these companies to account. It is crucial to act now to rein in the power of this murky industry. Rather than leading the way in outsourcing wars to companies like G4S, the British government must end the privatisation of war and hold these companies to account.