Muirhead and Jones on SCEG

Oona Muirhead: In terms of where we are now, some of the thinking around SCEG goes back to 2002, when the UK and US were collaborating to try and encourage the industry to develop voluntary principles on human rights, and clearly there’s been developments since then and some less than appropriate actions being taken in countries like Iraq and Afghanistan by private security contractors (PSCs) and all of that has built up steam among companies themselves, to demonstrate their reputation and their quality, because they’re very conscious, all the companies that belong to SCEG, that it’s easy for the industry to lose its reputation and that there can therefore be no room for cowboys.

Sometimes you’re being compared to government armed forces so your reputation needs to be good otherwise your company goes under. So there’s a real drive from all sorts of angles to improve standards and ensure there’s a bar that’s set, and to make sure that all companies have to jump over it and demonstrate their professionalism.

That push is coming from the industry itself, and it’s also coming from governments who employ private sec contractors, and from other clients such as the shipping industry and oil and gas. The USA and UK governments are the largest employers of PSCs. There’s also a drive from human rights organisations quite rightly, thinking about the rights of communities where PSCs are operating.

In 2009, the UK government issued a consultation document about conduct by PMCs internationally, and David Milliband concluded that this was a turning point in policy terms – he concluded that PCSs are essential.

Then in 2010, to take this forward, the Swiss government launched an international code of conduct for PSCs. Around 300 companies have signed up to this and it’s growing by the day.

Then in January 2011, the UK industry, under the auspices of ADS, decided to set up a special interest group, which is the SCEG group, to take forward the regulation aspect and to operate with and alongside government to show the industry as being a reputable one, and that’s really critical for all the companies in SCEG that they should be seen as a reputable industry. The government, meanwhile, at the start of last year, tendered for an industry partner to take forward these specific issues around regulation – to develop standards that the UK government would feel comfortable with, that were robust enough to ensure high quality service provision.

In June last year, following this tendering process, the UK government appointed SCEG. Since then we’ve set up a number of working groups, one of which is the Maritime Security Working Group.

At the moment there’s no intention that there should be legislation that would require all UK companies to be accredited, and part of the reason is that it’s a very international sector. The work that UK companies do is all overseas, so it’s a really massive trade issue and benefit for the UK’s economy.

SCEG is all about British industry, being the best, making sure this is a really highly professional industry, very reputable. There’s no room for maverick or incompetent companies who can’t deliver the required standards.

Simon Jones: The Maritime PSC sector is very new, it’s very young and expanding, exploding rapidly, and the majority of the entities within the maritime sector are UK security companies. There’s a critical requirement to have a framework in place for legitimate operators, not only for commercial reasons but to allow companies to present themselves to the client sector in a safe, credible and reputable way.

One of the unique aspects is the fact that all UK companies are operating outside the UK; as opposed to the land side where you’re operating within a single country with a single jurisdiction, the maritime environment is very different, you’ve got an international, multi level client base, with immigration, passports to think about.  You’re working with a ship owner that has flag interests, you’re in international waters and transiting between a number of port states each with their own jurisdictions.

It is a hugely complex operational and logistical environment; you have to take into account a number of international regulations, insurance, maritime law, international law, UNCLOS (the United Nations Convention on the Law of the Sea), human rights, multiple nationalities working together in international waters.

So, there’s a requirement internally in the industry and externally, to stop mavericks operating in these fields. The pressure for this has been more internal within the industry than from outside, although of course flag states want only legitimate entities, working under a framework.

SJ: There’s nothing to stop them from doing that, but the crux of the question would be, if they do so, and then ply their trade to the client base, what is the client’s liability cover should anything go wrong?

A big concern in the insurance sector and the shipping sector is, what if we have one these companies and something goes wrong, what if they’re over aggressive for example, or what if there’s an accident and someone is injured or killed, where do ship owners and insurers stand?  We want to generate a standard that’s there for people.

OM: Simon’s right, the clients as well as the government and the industry are driving this. They are commercial entities, so we have to make sure it’s the clients that are driving this, reducing the risks of injury and death.

SJ: To add, the implementation of standards like this in the security industry has led to an understanding.

OM: We’re already seeing that legitimate companies reduce the risk factor, and therefore reduce premiums.  That’s’ exactly why it’s become more important to have regulation. We want to get processes and standards in place, and see a continuing improvement trend by learning from good practices.

SJ: It’s also about voluntary accountability – legitimate transparent companies which are absolutely 100 per cent prepared to record all actions and be responsible for them. It’s all about transparency, accountability and honesty in the industry. These companies are very professional people – they’ve been trained by the best military in the world where the environment is accountable and transparent.

OM: This transparency weeds out the mavericks.

SJ: As the sector has expanded, the individuals that have the specific skills that it needs are British. For example, your average Royal Marine has been doing this type of work for king and country for years; therefore the skills lend themselves very readily.

Also, the UK is a very central hub for the maritime industry. Most shipping companies have a presence in London; a lot of these other companies have a direct commercial relationship with the UK. So the development of this service has been through London.

OM: Also think about what the British armed forces have been doing for the past few decades: peacekeeping, supporting the police, and keeping law and order. I’ve been involved with the UK military now for over 30 years, and the reputation they have for peacekeeping operations is enormously high. A lot of these private military contractors are set up because youngish men come out of the forces, they’re entrepreneurial. They have business sense, but also the professionalism that comes from a military background. I think that’s critical and it demonstrates the importance of professionalism and reputation.

SJ: They understand inherently the balance of judgement, what measures to implement for these kinds of peacekeeping, policing, humanitarian missions.

OM: Let’s not give the impression that we’re complacent because we’re absolutely not, and that’s why we want to raise a standard, get a standard that’s approved by the UK government. Not the industry regulating itself, but verifiable, transparent regulation, to make sure that that those standards of professionalism are maintained and enhanced.

OM: We have to be careful when we’re writing a standard that we don’t get into these kinds of operational issues, because there are different ways of carrying out operations and tactics. You’re not telling a company how to do its business, you’re telling them what you expect. It’s got to be for the management of that company to be taking those decisions. That’s part of it – does the company have decision making processes, risk processes, management processes? Are they applying these on a day to day basis? Are they learning lessons and thinking forward?

The company needs to ensure that it will do the right thing in the circumstances. Because you can’t determine the circumstances in advance, something will always pop up as a surprise. The response you dictate might be wrong from that situation.

OM: Take the example of Rules of Engagement: I’ve written them on many an occasion. What you don’t do is tell a soldier; “if someone over there has a gun you can shoot them” because actually they may not be able to. What we say to a soldier or Royal Marine is, your response has to be proportionate, taking account of threat, etc. It’s about being trained to make the right decision on the day.