Private military and security companies (PMSCs) are expanding like wildfire across the world, diversifying clients and operations. They offer services ranging from protection and training to direct participation in hostilities, arms dealing, and humanitarian evacuations. Their impact on human rights—particularly on civilians, women, children, and migrants—as well as on the environment, has been widely reported as devastating. In some cases, their actions have even fallen within definitions of international crimes, such as in the Abu Ghraib case. Despite their growing influence, only two non-legally binding documents of an international nature have addressed the regulation of PMSCs: the Montreux Document (2008) and the International Code of Conduct (ICoC) (2010). This month, states will convene again under the auspices of the United Nations to discuss the Revised Fourth Draft of the proposed international legal regulation of PMSCs, a process fundamental for international peace and security at a time when militarization is a central topic in public debates. However, many states still question the relevance of this issue to their national interests and wonder why they should prioritize this process amid ongoing multilateral crises.
Here’s why.
States should respond to the adverse economic effects of Private Military and Security Company (PMSC) operations.
In modern international affairs and conflicts, crime is increasingly intertwined with war economies. Some PMSCs are involved in various economic crimes with the objective to finance their operations through global sources, including resource exploitation, drug and arms trafficking, online fraud, and intelligence services. These activities involve multiple States, corporations, and individuals through global complex criminal networks.
Illicit weapons transfer is one of the crimes that impacts domestic and international markets, bypassing national borders. Typically, mercenaries, but to some extent PMSCs, finance operations through arms trafficking, including darknet sales and illicit grey and black-market transfers. While most PMSCs avoid illegal markets to protect their reputation, some engage in trafficking, with states also playing a central role in arms proliferation. The limitations of current arms control frameworks exacerbate these risks. The Firearms Protocol and Organized Crime Convention acknowledge transnational criminal networks in arms trafficking but overlook mercenary and PMSCs involvement in illicit weapons transfers, leaving a critical gap in international regulation. Frameworks like the Montreux Document and International Code of Conduct Association (ICoCA) fail to address PMSCs as arms suppliers, focusing instead on their role as recipients.
The UN Panel of Experts on Libya, established by the UN Security Council under Resolution 1973 (2011), reported (para. 63) that mercenaries, mercenary-related actors, and PMSCs from various regions were involved in arms transfers. PMSCs may supply weapons or military technology to clients, including states and conflict participants, as outlined in their contracts.
While many States regulate the legal acquisition and possession of weapons by PMSCs, only a few address illegal procurement and impose penalties. Information on illicit transfers remains difficult to obtain, with UN expert panels (see here for an example) playing a crucial oversight role in sanction-hit regions.
As some States face financial isolation, mercenaries, and to some extent PMSCs, play a key role in facilitating smuggling and money laundering. The Working Group on the use of mercenaries noted (para 49) in 2024 that “[c]omplex corporate arrangements, including international networks of shell companies, are used to facilitate and enable the transfer of proceeds from the exploitation of natural resources by mercenaries and related actors.” The same report explains the ways funds are moved through traditional banking, cash payments, cryptocurrencies, and crowdfunding, which often overlap with illicit financial flows linked to terrorism, organized crime, human trafficking, and piracy. The secrecy involving international financial systems coupled with the globalization of economic market relations and rapid development of technologies contributes to the impunity of all actors involved including PMSCs.
UN bodies have, for example, highlighted links between PMSCs, extractive industries, and organized crime in the Central African Republic (see also allegation letter AL CAF 1/2021) and Libya (paras 24-31, 82-87). The extractive sector’s economic interests make security central to resource exploitation, while in return PMSCs are used to circumvent international sanctions. Thus, both extractive industries and PMSCs avoid their legal responsibilities. The lack of transparency is worsened by the presence of both formal PMSCs and informal security providers, some with criminal ties.
Increasingly, PMSCs obtain access to natural resources (see here and here) as payment or seek control over them for economic gain. High-value commodities like gold and diamonds are particularly attractive due to their traceability challenges, with resource exploitation often following interregional routes, primarily along a North-South exploitation trend (para 21).
Finally, it is worth noting that PMSC actors often receive in-kind compensation (para 30) for their services, such as aircraft in exchange for satellite communications or mining concessions for helping local armed groups register as PMSCs. This enables easier access to logistics, vehicle registrations, equipment, and security support. In-kind payments are particularly valued as they can bypass formal checks and regulations.
Relying solely on the ICoCA for PMSC regulation, without a legally binding international framework, risks creating an oligopoly or monopoly, stifling competition. Such oversight activities cannot be left to near-self-regulation alone, as per the ‘mechanism’ of the ICoC, which is largely managed by the security industry (a follow-up to the Montreux Document). The self-regulatory mechanism of the International Code of Conduct would eliminate a number of competitors among PMSCs, due to the high barriers to entry to the ICoCA. As the former member of the UN working group José L. Gómez del Prado highlights (p. 278), the security industry ultimately would be comprised of a core of multinational PMSCs (those with sufficient resources) that would become a ‘de facto’ oligopoly or monopoly without any control whatsoever by national authorities.”
By enacting binding regulation of PMSCs, States would have a legal basis to effectively control the financial and economic crimes that PMSCs and related actors often commit which, for the most part, fall outside of the definitions of traditional international crimes and the mechanisms that exist to prevent and punish them.
States should take into consideration the effects of PMSCs on international peace and security
In compliance with the UN Charter, States assume responsibility individually and through various organs to preserve international peace and security. The commercialization of security raises concerns about private actors’ use of force, political influence, and the transfer of technical expertise away from host States, reducing State accountability. Ambiguities in command structures further obscure responsibility as growing States’ reliance on PMSCs allows these entities to shape security policies and influence humanitarian interventions, combining State forces and private businesses.
The use of PMSCs and related actors has contributed to the intensification and prolongation of hostilities and therefore to the human suffering borne by civilian populations. In fact conflict is likely to last longer if there are non-State actors, such as PMSCs, involved.
PMSCs stimulate legal and black markets of combatants around the world. They frequently recruit former combatants with extensive conflict experience, sometimes hiring criminal groups that evolve into paramilitary units. These combatants move from one conflict to another without being integrated into civil life. The UN security sector reform (SSR) and disarmament, demobilization and reintegration (DDR) programs do not consider mercenaries or PMSCs personnel and they do not address the transfer from military life to private military contractors.
The example of the former Yugoslavia demonstrates that DDR suffered from an unfortunate combination of lack of political will and a lack of a strategic, holistic vision for the demobilization and reintegration of former combatants, which undermined the process. These inadequate approaches to DDR and SSR in the former Yugoslavia shaped a space in which PMSCs mushroomed as many former combatants became private security contractors for local and foreign companies. Similar patterns can be observed with combatants from Syria and other conflict-affected places (see here and here).
Furthermore, when DDR and SSR are poorly designed, they can create a space for powerful security companies to serve as a shield for ‘crime bosses’ and those who have perpetrated war crimes newly operating under the impression of ‘legal corporate structures’ with no oversight. While the UN Secretary General recognized the general trend of growing PMSCs, he also noted that the ‘UN does not know how best to engage them’ (para 11).
Recruitment typically occurs through internal databases, allowing contractors to move seamlessly between jobs and working independently. Today, most PMSCs prioritize personal connections over large permanent workforces, hiring specialists for specific contracts. Their expertise makes them valuable “force multipliers,” where a small, highly skilled team can have a significant impact. Some also practice predatory recruitment. They often target young men from low-income and conflict-affected backgrounds (para 39) and offer them a perceived escape from extreme poverty (para 29). These practices are exploitative and coercive, frequently conducted without formal contracts but relying instead on verbal agreements. There are reports of PMSCs recruiting directly from prisons, persuading inmates to enlist for combat. Additionally, recruiters may use “pressure tactics” (para 30) which suggests that participation is less than voluntary.
If the UN is to properly address international peace and security, States should consider the role of PMSCs in the global security and armed conflicts around the world and address them through effective international regulation to complement the gaps in existing DDR and SSR programs.
States should consider their existing obligations under international law and uphold the international rule of law
PMSCs operate both in and outside the context of armed conflict. The commercial activities of PMSCs and related actors undermine human rights as the illicit exploitation, export, and laundering of natural resources deprive local communities of opportunities for development. This directly violates the inalienable right to development. Additionally, these activities contribute to environmental degradation, harming communities’ rights to health, cultural practices, clean water, and food. The use of substandard technologies and harmful practices further exacerbates these negative impacts.
Over recent years, the Working Group on the use of Mercenaries has identified diverse PMSC clients that challenge traditional State responsibility. The extractive industry, a major client, has been linked to serious human rights violations, yet accountability remains elusive. This powerful partnership between multinational extractive industry corporations and PMSCs fosters impunity for such violations.
When operating in armed conflict contexts, PMSCs and States have obligations to comply with International Humanitarian Law. International Humanitarian Law requires States to “respect and ensure respect” for the Geneva Conventions and to take all necessary measures to suppress acts contrary to the Conventions, including to put on trial or extradite for trial those who commit grave breaches of the Geneva Conventions. Yet, regulation under domestic legal frameworks is a patchwork of different approaches, lacking harmonization in addressing PMSC licensing, vetting, training, carrying weapons and accountability.
According to the Swiss Initiative in Cooperation with the ICRC to Promote Respect for International Humanitarian Law and Human Rights by Private Military and Security Companies Operating in Conflict Situations, States are required to search for persons, including personnel of PMSCs, who are alleged to have committed or, to have ordered to be committed, grave breaches of the Geneva Conventions and to bring such persons, regardless of their nationality, before their national courts or to hand such persons over to another State for trial in another State. However, States do not have the obligation under IHL to enact domestic legislation providing for universal jurisdiction, i.e. jurisdiction which allows to search for and prosecute persons who are not their nationals and have not committed any violations on their territory.
Conclusion
We have highlighted the numerous and increasing ways in which PMSCs harm the economic and financial stability of States, threaten international peace and security, and violate obligations under International Humanitarian Law and Human Rights Law. We have also noted the sources of States’ international legal obligations to regulate and supress the harmful consequences of PMSC activities. For several years, States have been discussing the utility of enacting measures to fill the regulatory gaps in existing international law that allow PMSCs to operate with relative impunity. It is now time to move forward with measures of international legal regulation designed to address the dangers and harms presented by this industry.
*The authors are each former Chairs of the UN Working Group on the use of Mercenaries.
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