Assume America’s vital interests are threatened by a distributed network of tribal insurgents Country Orange. The American government needs to close with and engage the enemy. The Orange government agrees to either openly willingly allow or silently cooperate with American military actions in Orange.
American military planners can either send in uniformed military, or PMCs. Preferring to privatize this operation, the government hires (the fictitious) “Mercenaries ‘R Us” to handle the job. To maximize its profits, Mercenaries ‘R Us declines to armor its contractors’ wheeled vehicles or aircraft, obviates back-up communications devices, decides against individual body armor, and arms its mercenaries only with pistols and long guns. They keep a light footprint and send small teams out into known hostile territory. The inevitable happens, and the enemy successfully ambushes the contractors, with many killed and wounded.1
If the injured PMCs were instead American servicemembers, they would be given medical treatment and rehabilitation through military medicine. The VA, for all its flaws, would attempt to help the wounded recover and restart their life after their injuries. If the fallen were uniformed military, their survivors would be taken care of with survivor benefits. All of these benefits were enacted by Congress to support the men and women who go abroad to do the nation’s work in harm’s way.
In our example, Mercenaries ‘R Us sent its employees downrange to do America’s bidding. That is where the similarities to the uniformed military members end. PMCs are not entitled to use military medicine.2 There is no VA for contractors. Death benefits are limited to whatever Mercenaries ‘R Us has arranged for its employees and their survivors—likely very little.3 As long as the stock price stays high and the dividends keep coming, the shareholders are unlikely to have very much concern for the human toll of warfare.4 Battles fought in the name of the American people may not be watched particularly closely by a group of investors primarily concerned with the bottom line.
In other words, by hiring Mercenaries ‘R Us to fight its battles, America has externalized the cost of war, particularly caring for its combat wounded and the survivors of the fallen. No congressional committees to answer to, no pictures on the nightly news honoring the fallen, no unpleasant reminders of the horror of war. The policymakers get to conduct their military expedition, and the economic cost is borne by the shareholders of Mercenaries ‘R Us.
But even on the economic front, hiring PMCs may not be wise in the first place, as contractors may not cost any less overall than uniformed servicemembers.5 Nor does outsourcing insulate the government from responsibility for its actors, because when the government contracts out to private actors to perform public services, those actors become agents for the state.6 Moreover, contract warfare seems to skirt at least the spirit of mandatory Congressional oversight of the nation’s military.7 For all these reasons and as the hypothetical above shows, the inherent tension between public, military service and private ends is fraught with peril.
Private military contractors are one facet of the military-industrial-congressional complex that ought to be dismantled. The profit motive is out of American prize courts, and letters of marque have fallen into disuse. The modern renaissance of PMCs seems an anachronism, perilously like the “large Armies of foreign Mercenaries” that so offended the founders. As disparate personalities as Machiavelli and Washington well understood, mercenaries introduce a host of problems that outweigh their seeming availability as ready, armed manpower. America should get out of the mercenary business.
Tim Steigelman is a Visiting Scholar at the Center for Oceans and Coastal Law at the University of Maine School of Law in Portland, Maine. He practices business law and admiralty at the Portland firm Kelly, Remmel & Zimmerman, and is a reserve naval officer. The opinions above are solely his own, and do not purport to express the views of the Department of the Navy, Department of Defense, nor any agency or department of the United States, nor any other organization or client.
1. This hypothetical is drawn from Burke v. Air Serv. Intern., Inc., 685 F.3d 1102 (D.C.Cir. 2012).
2. Out of necessity, injured contractors do receive medical care from military doctors when in theater, which is both a cost driver to the government and a point of contention. Once stabilized and sent home, the gratis health care ends and the injured mercenary is left with private medical insurance.
3. Citing Jimmie I. Wise, Outsourcing Wars: Comparing Risk, Benefits and Motivation of Contractors and Military Personnel in Iraq and Afghanistan (2009–2011), MBA Professional Report, Naval Postgraduate School (2012), available here.
4. A private company is generally required to maximize return for its shareholders, and corporate officers who make decisions at the expense of shareholder returns may face liability. Corporate oversight, such as it is, is exercised by shareholders.
5. See Isenberg, “Are Private Contractors Really Cheaper?”.
6. See, e.g.,West v. Atkins, 487 U.S. 42, nn. 14-15 (1988).
7. See U.S. Constitution, Article I § 8 (requiring biannual reauthorization for the raising and supporting of armies).
The National Intelligence Council’s report Global Trends 2030: Alternative Worlds released in December 2012 revealed trends, game-changers, and potential worlds that have relevance to maritime security. Two of the four mega-trends identified were individual empowerment and diffusion of power. Two game-changers will be a governance gap (or previously suggested maritime security shadow zones) and the potential for increased conflict. It suggests one potential future of a “Non-state World” in which non-state actors take the lead in confronting global challenges. If this is the future, where the power of traditional states erodes or collapses and individuals and illicit organizations are super-empowered, private maritime security companies could be far more employed than they have been in the past decade.
The quick rise of PMSCs in the past decade was due primarily to the threat of non-state actors—in this case Somali pirates operating off the Horn of Africa. Before the shipping industry responded to changes in its Best Management Practices and states began devoting more air and surface naval platforms to the region, individuals identified an opportunity in maritime security and formed companies. Whether they are mercenaries or entrepreneurs can be left to a discussion in the classroom or comments, but the reality is that the immediate threat to shipping was real and growing by 2006.
The companies themselves were analogous to dining in a large city. In the first category are the four and five star restaurants with superior ingredients and preparation, excellent service, but very costly. The second category includes standard restaurants. The third might be diners— affordable food, quick turn-around on service, and a dependable location. The last category is the street vendors. Because they have no infrastructure other than a mobile cart and they may not carry the best ingredients, their costs are extremely low. But there is a market for each of these categories.
The same has been true of PMSCs. Some are highly rated among the industry for the quality of their security personnel (such as former SAS and Navy SEALs), high-performance gear, and company infrastructure. These are the higher priced five-star restaurants. But as the industry emerged, it seemed anyone would join in if they had a cell-phone and an email address. Even experienced, qualified operators made attempts to form their own companies. Peter Cook, founder and director of the Security Association of the Maritime Industry (SAMI) suggested that this is one reason why the number of PMSCs has dropped in recent years as the number of piracy incidents off Somalia have declined. “New businesses fail at a high rate,” he said in a recent interview. “You have operators who might not have the business background necessary to administer all the paperwork that’s involved in setting up and operating a maritime security company.”
According to Cook, the number of PMSCs peaked in 2011 when eleven new PMSCs were applying every month for membership in SAMI. While there were an estimated thirty-five to fifty companies in 2010, SAMI now has about 160 members. The industry became highly competitive and very litigious. With some twenty to twenty-five percent of overcapacity in the shipping industry, shippers are trying to find ways to reduce costs and prices. When threats by Somali pirates resulted in far higher insurance rates, shipping companies reluctantly turned to protection from armed guards. At their height in 2008 to 2009, some PMSCs could charge $5,000 per day for a four-man team; today that price is down to about $3,500. Since, to date, not ship with an armed team has been taken by pirates, that investment more than offset the potential of paying hundreds of thousands to millions of dollars in ransom.
Although some in the industry argue that incidents of piracy remain unreported or underreported in order for companies to avoid higher insurance rates, the fact is that Somali piracy has dropped precipitously. As a result, Cook notes, there has been a major consolidation of PMSCs. That is not to say they will disappear or their work will not expand. To the contrary, they will likely be more necessary in the coming decades for several reasons.
First, long-time state navies with global projection (such as European nations or even the United States) are likely to diminish in size and projection capability due to increased domestic funding demands. Second, increasing competition for scarce resources and changing demographics will lead to greater instability among underdeveloped nations, particularly those along coastlines. Third, greater need for energy will result in more off-shore oil and gas platforms (currently twenty-five percent of all oil and gas platforms are off-shore such as those in the Gulf of Guinea.) Fourth, as one presenter at a recent Naval War College symposium suggested, a greater need for food sources will result in aqua-farming areas. Simply put, less maritime security capabilities by states and increased needs for security will lead to a greater reliance on PMSCs.
What does this mean for the United State? Most importantly, the nation will have to work with the industry in ensuring it is regulated and accountable. With Somali piracy, the country – like many European countries – was opposed to the use of PMSCs or at least did not recognize them. Public officials and senior military now recognize the partial role they have played off the Horn of Africa. The industry has already begun to self-regulate internationally. Operators quickly share information with each other on the reputation of firms and which ones should be avoided. In addition, organizations like SAMI provide standards such as certifications as a vetting conduit between PMSCs and the shipping industry.
In the coming decades, maritime security will be far more complex. Absent sufficient state navies and coast guard forces, PMSCs may well be the only alternative to ensuring platforms and regions have some semblance of security.
Claude Berube teaches naval history at the United Stated Naval Academy and is the author or co-author of several books including “Maritime Private Security” and his debut novel “The Aden Effect.” In December 2013, CIMSEC published his article and interview regarding “Civilian Warriors”. He is the immediate past chair of the editorial board of U.S. Naval Institute Proceedings.
The report received some additional publicity when it formed the meat of a 7 September Washington Post story, with discussion especially devoted towards the report’s analysis of Automatic Identification System (AIS) data, claiming that vessels likely carrying arms from the Ukrainian port of Oktyabrsk were turning off AIS when traveling to Syria.
The analysis conducted by Tom Wallace and Farley Mesko is certainly interesting and provides an in-depth look at commercial maritime networks and practices not generally seen outside of specialist literature on the shipping industry. The work does leave some questions unanswered and makes unwarranted conclusions based on the available data, however:
The piece goes into great detail to lay out the various networks that Russia uses to ship arms, composed of interlocking companies headed and/or controlled by individuals with links to the state. What’s unclear is why that should be considered unusual or bad. Shell companies, convoluted ownership, and Flags of Convenience are commonplace for a variety reasons (many business-related) in the maritime industry. It is not much of a “So What” to reveal that cronies in the maritime industry would be the facilitators used by Putin’s Russia to ship weapons to a pariah state. (Of note for those interested in topics like Flags of Convenience, Rodney Carlisle’s Sovereignty for Sale is a good read which explains the creation of the famous Panamanian and Liberian registries and provides context on why ship “ownership” is rarely straightforward in the maritime industry).
Russian arms shipments to Assad’s forces in Syria are clearly “bad,” but the implication in the Odessa Network study is that not only is Russia doing something bad, but that they are also doing it in a particularly devious and underhanded way. The data provided by Wallace and Mesko only proves, however, that Russia is choosing to use “discreet” means to ship weapons to Syria. It’s not clear that the Odessa Network’s ties to the Russian state or its business practices are that particularly egregious or unusual within the maritime industry.
The authors look at both publicly available data regarding Russian arms shipments as well as AIS data. According to available data for ships/shipments, they note that “publicly known maritime weapons shipments from Russia to Syria” departed from “northern Russian ports of St. Petersburg or Kaliningrad.” They then claim, however, based on the curious absence of AIS data for Russian ships in the eastern Mediterranean originating in Oktyabrsk, that there is “a strong circumstantial case that these ships and companies are moving weapons or other sensitive cargo to the Assad regime.” The argument is inconsistent. On one hand they make a case that operational security concerns or potential EU pressure on the Ukrainian government is stopping the use of Oktyabrsk as a transshipment site for Syria-bound arms, while on the other hand claiming that nefarious Russian intent is demonstrated by ships originating in Oktyabrsk deliberately not broadcasting AIS data when traveling to Syria. Can both these assertions be true at the same time?
While certainly suspicious, is it actually illegal to turn off AIS as these Russia ships have allegedly done? The authors point out that there is the possibility that data may not be available in certain locations due to a lack of receivers, but also note that the eastern Mediterranean is not exactly an isolated area, and that AIS on these ships seems to work quite well everywhere else in the world. According to the UN’s International Maritime Organization (IMO), “all ships of 300 gross tonnage and upwards engaged on international voyages, cargo ships of 500 gross tonnage and upwards not engaged on international voyages and all passenger ships irrespective of size” shall “maintain AIS in operation at all times except where international agreements, rules or standards provide for the protection of navigational information.” These rules were implemented as part of the International Ship and Port Facility Security (ISPS) Code, as part of the International Convention for the Safety of Life at Sea (SOLAS). Although there is no real chance that these rules could be enforced against Russian ships since they are adopted and enforced by IMO member states themselves, are these ships doing something illegal by not using AIS properly? Could operators of these vessels be subject to penalties? Could enforcement of these rules be a round-about way to stop Russian arms shipments to Syria?
Despite my minor criticism above, this sort of analysis is welcome and could be applied to a variety of other maritime issues. More publicly available detailed network analysis of the commercial networks benefiting from oil theft in West Africa or Somali piracy could provide new, non-kinetic policy or law enforcement options in the fight against these illicit activities afloat. Similarly, the methods toward which Iran has been driven by sanctions to facilitate its oil exports could be a useful subject of interest to analysts and policy-makers alike.
Lieutenant Commander Mark Munson is a Naval Intelligence officer currently serving on the OPNAV staff. He has previously served at Naval Special Warfare Group FOUR, the Office of Naval Intelligence, and onboard USS ESSEX (LHD 2). The views expressed are solely those of the author and do not reflect the official viewpoints or policies of the Department of Defense or the US Government.
The following article is special to our International Maritime Shipping Week. While we often discuss the threats to maritime shipping, this week looks at dangers arising from such global trade, and possible mitigations.
“Where the carcase is, there will the eagles be gathered together.”
Julian S. Corbett, Some Principles of Maritime Strategy (1911)
In a global system marked above all by its complexity and interconnectedness, dependence on international shipping is universal. Yet some nations are far more vulnerable than others. As students of naval history well know, such vulnerability is often turned into a source of strategic leverage. To what extent can this leverage actually be exploited under 21st century conditions?
The globalized economy is, in a very real sense, a system of maritime exchange. As Thomas Friedman points out, as much as any other recent innovation, it was the shipping container that shaped our daily lives by making the economic transformation of the late 20th Century possible. In the past two decades alone, the volume of sea-borne commerce has more than doubled, from 4 billion tons in 1990 to 8.7 billion tons in 2011. According to the International Maritime Organization, if the overall trend of trade growth observed over the last one and a half centuries continues, the figure will be 23 billion tons in 2060. And, while the exact share of global trade in goods that is moved by is a matter of some debate, it is sea well in excess of 75 percent by most reckonings. Further, it is clear that only cheap and plentiful shipping in a secure maritime environment can sustain this transformation. As a result, the stakes in international shipping are widespread.
But while any nation that wishes to prosper in the current global environment shares in the global dependency on shipping, the vulnerabilities that arise from it are distributed unevenly. This is mainly for two reasons: First, the degree to which specific nations sustain themselves by means of ship-borne imports, and to which they found their prosperity upon maritime exports, varies greatly. Secondly, depending inter alia on a country’s geopolitical setting, it will be more or less able to manipulate the degree to which it has to rely on shipping for its economic security. A resource-rich, continental-size state with landward access to sizeable markets – like Russia – has serious alternatives to maritime transportation. A small island nation with an export-oriented economy that runs on imported hydrocarbons – such as Taiwan – does not. It is where dependency gives rise to vulnerability that it turns into a potential source of leverage for outside powers.
Targeting Shipping for Strategic Effect
In what ways can vulnerabilities in the area of maritime transportation be exploited for strategic effect? There is, of course, a whole spectrum of options available to would-be-predators. Unilateral or multilateral sanctions have been a mechanism of choice since the end of the Cold War. But historically, it has been direct military action against the opponent´s shipping that has had the greatest impact on trade. Two main methods of waging war on commercial shipping can be distinguished, at least at an analytical level: (1) the blockade, and (2) guerre de course, or commerce raiding. The blockade relies on concentration and persistence to choke off the flow of sea-borne goods into enemy harbors, and as such will usually require some form of command of the sea. Commerce raiding, on the other hand, relies on dispersed, attritional attacks by individual vessels (or small groups of vessels), which makes it an attractive option for navies that find themselves in a position of inferiority. Both methods leverage the disruption of shipping to impose a cumulative toll on the adversary’s economy, which is expected to have a significant indirect impact on the war effort and/or erode the opponent´s will to resist.
Historical examples of shipping being turned into a strategic lever are abundant. In the age of sail, preying on adversaries’ commerce was an integral part of most naval campaigns, including those of the Dutch Wars, the Seven Years’ War, and the Wars of the French Revolution. While it was seldom decisive, it was often “exceedingly painful,” as Colin Gray observes. During the late 19th and early 20th centuries, innovations in naval technology all but brought to its termination the “close blockade” of enemy harbors while also providing means – the submarine, torpedo, and naval mine – that would transform guerre de course into a method of total warfare. Much ink has been spilled on Germany’s failed – and strategically counterproductive – attempts subdue Britain by way of Handelskrieg (the German variation of commerce raiding), while a slightly more specialized literature focuses on the “distant blockades” of Germany that were a key feature of British naval operations in both World Wars. However the case of Japan is most the instructive for the purposes at hand.
An island nation with an extremely circumscribed resource base, Japan was utterly dependent on ship-borne imports of a range of raw (and precursor) materials. In a very real sense, the Empire´s huge naval modernization program during the 1930s was based on its maritime commerce with the United States. Among other things, the U.S. covered 80 percent of Japanese liquid fuel needs. Given its political and military trajectory, Japan´s demand for key commodities was highly inelastic. The only alternative to trade with the United States and other potential adversaries was the unilateral extraction of resources from Japan´s near abroad – which could decrease its dependence on this particular foreign power, but (crucially) not on maritime transportation. When war came, the U.S. was able to exploit this vulnerability to devastating effect. Despite the many operational and technical inadequacies revealed by its initial operations in 1941-42, the U.S. Navy´s all-out war on Japanese shipping eventually came as close to strategically decisive as can reasonably be expected from any indirect use of military power. Aided by the dire lack of defensive measures on the part of the Imperial Japanese armed forces, U.S. submarines alone sent more than 1,100 Japanese merchantmen to the bottom, and nearly as many were sunk by aircraft and mines. By the spring of 1945, Japanese sea-borne logistics had virtually ceased to exist, and so had Japan´s ability to sustain its war effort.
It has been suggested that other attempts throughout history at disrupting shipping flows might well have been equally successful in exploiting strategic vulnerabilities, had it not been for the predators´ “technical incapacity, operational ineptitude, and policy incompetence […] in the conduct of commerce raiding.” Whether this assessment is accurate or not, there is little doubt that – despite the moral opprobrium that has often accompanied attacks on civilian vessels – the vulnerable dependence on sea-borne trade can be exploited to considerable effect. What relevance this finding might possess in an era of global economic integration is, however, much less clear.
Execute against China?
Until very recently, the explosion of maritime trade supporting economic globalization has not resulted in a resurgence of military strategies based on the (selective) disruption of international shipping. An important exception has been Iran´s focus on the Strait of Hormuz, which has played a critical role in Iranian strategic thinking since the 1980s. But it is the rise of China that has reignited naval strategists´ interest in shipping as a source of strategic vulnerability.
One set of scenarios that has been debated in detail involves Chinese offensive operations against Taiwan´s economic lifeline. Given the island´s vulnerable dependency on shipping and the enduring limitations of the People´s Liberation Army with regard to a full-scale invasion, it is hardly surprising that the imposition of a coercive blockade should hold some appeal in PLA planning circles.
Considerably greater attention has been attracted, however, by the possibility that the People´s Republic might itself become the target of offensive military action against the sea-borne commerce on which the integrity of its economic model stamds. After all, 90 percent of China’s exports and 90 percent of its liquid fuel imports – which, as Sean Mirski observes are “functionally irreplaceable” – are transported by sea. The oft-cited ‘Malacca dilemma’ is but one expression of a suspicion that now unites an increasing number of strategic thinkers, both Chinese and foreign: namely, that its dependence on maritime transportation may prove to be China´s Achilles’ heel on its way to greatness.
While the vulnerability of the PRC’s sea lines of communications has become an official justification for naval expansion and a rallying cry for naval nationalists, it is also a focal point for U.S. strategizing in the context of increasing access challenges in the Western Pacific. Thus, a blockade of Chinese (or rather China-bound) shipping has been debated both as an element of, and as an alternative to, the AirSea Battle Concept that is designed to enable operations in the face of an anti-access/area-denial challenge, such as U.S. military planners anticipate in case of conflict along the Chinese periphery.
While Western treatments of the subject tend to agree that a blockade would be militarily feasible – given an adequate investment of resources – and could have a very considerable impact on the Chinese economy, the assumptions under which they arrive at these conclusions are extremely restrictive. For example, Mirski assumes that (1) the U.S.-China conflict in question would not be limited in scope, yet would stop well short of nuclear use, (2) the U.S. would find itself in the position of defender of the status quo against a blatantly aggressive China, (3) the U.S. would be able to build a coalition that includes Russia, India, and Japan; and (4) under these conditions, a ‘sink-on-sight’ policy towards civilian vessels in China’s near seas would be politically viable. Even with these preconditions, he concludes that despite the American blockade “China would be able to meet its military needs indefinitely.”
Recent publications also points to changes in the nature of international shipping itself as potential complicating factors: in a prospective blockade scenario, few – if any – civilian vessels would fly the Chinese flag and, given the practice of selling and reselling cargo on spot markets, a ship´s final destination might not be known until it actually enters port. But while Mirski’s proposal of instituting a system of digital navigational certification is ingenious, he dodges the broader question of how the United States and the nations of the Asia-Pacific would deal with the myriad repercussions of what would amount to a major disruption of the globalized economic sphere for an extended period of time.
Conclusion: Return of the commerce raiders?
If nothing else, the current debate about a U.S. naval blockade of China reveals that – much like their predecessors in past centuries – strategists in a globalized era see shipping as a repository of strategic vulnerability, particularly in cases of high-intensity conflict between great or medium-size powers. But while the potential leverage to be gained from nations’ dependence on international shipping is perhaps greater than ever before, the actual leverage might not correspond to planners’ expectations. The sources of this disconnect lie primarily in the political and economic context in which any concerted military action against sea-borne trade would be embedded. Given the U.S. Navy’s determined stewardship of freedom of navigation, the U.S. in particular would find itself on the wrong side of the norms it has been upholding for the past 60 years. And while the economic fall-out of any great power war is likely to be significant, the willful disruption of trade flows for strategic effect would only serve to accentuate the costs to regional allies and global trading partners.
As a result, unrestricted commerce warfare of the type pursued by the U.S. Navy against Japan in 1941-45 is just not in the cards. On the other hand, anything short of a strategically counterproductive ‘sink-on-sight’ policy might not produce sufficient strategic impact to justify the cost of embarking on such a risky course of action in the first place. Finally, once we move beyond the context of open interstate warfare, multilateral economic sanctions offer the possibility of causing many of the same effects at markedly lower cost to the attacker’s international standing.
Overall, the recent surge of interest in economic warfare strategies does little to encourage faith in the potential decisiveness of military actions against globalized trade, and serves to underline the practical and political challenges presented by any attempt at leveraging the vulnerabilities of a major trading power under 21st-century conditions. While the dependence on international shipping poses many risks, the strategic leverage it provides as a direct result of its crucial contribution to the prosperity of nations is now more apparent than real.
Michael Haas is a researcher with the Global Security Team at the Center for Security Studies, ETH Zurich. The views presented above are his alone. Michael tweets @the_final_stand.
 Thomas L. Friedman (2006), The World Is Flat: The Globalised World in the Twenty-first Century (London: Penguin), 468.
 Colin S. Gray (1992), The Leverage of Sea Power: The Strategic Advantage of Navies in War (New York: Free Press), 13.
 Robert A. Pape (1996), Bombing to Win: Air Power and Coercion in War (Ithaca, NY: Cornell UP), 100-01.