How are modern private military companies founded?

June 12, 2014 0 Comments Bloggies by Graham Penrose

Do they need to have any particular registrations? Are they tracked globally? What concerns face a private military company founder? These are very expansive questions.

1. How are modern private military companies founded?

In any number of different ways as is the case with any type of venture. Founders vary widely in the PMC sector and include civilian entrepreneurs, ex-military SOF specialists (SPECOPS), ex-law enforcement professionals, ex-employees of defunct PMSC's, security analysts, ex-government employees with applicable experience - as many permutations as you can shake a stick at.

The registration process and the administration issues associated with setting up a PMC are the same as any other body corporate in terms of compliance with company law and obligations with respect to governance as they apply in the jurisdiction in which the entity is registered. The motivation to start a new business in this area is often derived from the need to crystallize a structure to allow a group of loosely associated professionals to act as a single entity in pursuing an immediate business opportunity and the brand name / reputation develops from there or the business is wound down in an orderly fashion when the specific contract is completed.

2. Do they need to have any particular registrations?

No, not necessarily but the reputable firm is aware of and complies with the expectations set by a number of external bodies. It is a highly emotive subject and there are entrenched views on both sides of the debate with respect to the use of and need for deployment (especially by governments in Western democracies) of PMC / PSC / PMSC in conflict zones acting as proxies for sovereign forces.

On one side of the debate and anti-PMSC or "mercenaries", as he prefers to refer to the industry as, is former chairperson of the UN Working Group on the use of mercenaries Mr. José L. Gómez del Prado. See Mr. Del Prado's interview with a group called GlobalResearchTV to understand that side of the debate.

A counter weight to that point of view is the association called The International Code of Conduct for Private Security Service Providers (ICoC) a Swiss government convened, multi-stakeholder initiative that aims to both clarify international standards for the private security industry operating in complex environments, as well as to improve oversight and accountability of these companies. See About ICoC for more information.

Montreux Document

The Montreux Document on pertinent international legal obligations and good practices for States related to the operations of Private Military and Security Companies during armed conflict reaffirms the obligation on States to ensure that PMSC's comply with international humanitarian and human rights law. The document is the product of an initiative launched cooperatively by the Swiss government and the International Committee of the Red Cross. See the full document at The Montreux Document on Private Military and Security Companies.


In addition all reputable firms comply with the restrictions as imposed by OFAC, EAR & ITAR - Embargoed Countries, Entities and Persons - see OFAC, EAR & ITAR - Embargoed Countries, Entities and Persons for an understanding of how certain organizations and individuals are subject to trade sanctions, embargoes, and other restrictions under US law.

3. Are they tracked globally?

Yes - by any number of UN bodies, governments, human rights advocates, investigative journalists and so on. By their nature firms of this kind are of interest to any number of government agencies due the potential impact they can have - in the hands of the unscrupulous - in terms of undermining the sovereignty of nations.

4. What concerns face a private military company founder?

Personal security, adverse media coverage, compliance, governance, command & control and so on - the complexity of operating in this domain is only touched on briefly in this answer to your question - it is not an industry for the faint hearted and at every turn motivations can and are misinterpreted and manipulated to the agenda of any number of externals.

Original answer supplied by Graham Penrose, TMG Corporate Services on the 4th June 2014 on QUORA.