A Framework for Regulation - Private Security Monitor

8 PRIVATE MILITARY AND SECURITY COMPANIESfrom electors of members of the board, andpossibly sales of its annual review. This reportestimates an annual operating budget of approximately$1.2 million (c. $600,000 personnel costs;$300,000 operating costs; and $300,000 overheadcosts). Specific investigations would need separatefinancing, which might call for the creation of aseparate strategic fund.What are the Barriers?The effectiveness of a watchdog will depend on (1)its access to information; and (2) remedial actionbased on the information it brings to light.Access to information will be facilitated byconnections to civil society networks, industryparticipation, and especially by state support. Statesupport might be facilitated by linking thewatchdog closely to standards they already support.A GSI watchdog could, for example, be establishedby states that endorse the Montreux Document, asan aid to assist them in implementing thatdocument. Access to information will also dependon stakeholders working with the secretariat toestablish careful protocols to protect nationalsecurity, contractual confidentiality, individualprivacy, and whistleblowers.Effective remedial action will depend on clients,investors, and regulators having access to thewatchdog’s findings about compliance withstandards, and taking appropriate action. Thewatchdog could also be mandated to monitor suchfollow-up.What are the Benefits?The GSI suffers from a chronic lack of markettransparency, and states find standards enforcementdifficult because of limited access to reliableinformation about industry performance. A GSIwatchdog would help fill these gaps, withoutjeopardizing state enforcement authority andexisting market arrangements. By clarifying thereality of PMSC performance, it would makeindustry underperformers accountable to clients,investors, and regulators, while rewarding goodperformers.Given that standards already exist, there are noreal barriers—beyond will and finance—to therelevant GSI stakeholders setting up a watchdog onthe earliest possible date.2. AN ACCREDITATION REGIMEAn accreditation regime that deliberately harnessesmarket-based incentives could be set up immediatelyon the basis of the Montreux Document andthe other existing standards listed above. 15 It couldbe set up by the GSI and its clients either on theirown, or with states’ backing. A credible accreditationregime would create demand for standardscompliantPMSCs, and drive up standards acrossthe GSI. And accreditation would operate as amarket signaling device, to turn demand into anincentive for compliance and accreditation.Precedents for such a regime exist in the globalapparel and manufacturing regimes, in thediamond and chemical industries, and in rudimentaryform in the British Association of PrivateSecurity Companies and the International PeaceOperations Association. No such regime exists atthe global level for the GSI, or with the involvementof clients, investors, and regulators.How Would it Work?An accreditation regime would have three linkedfunctions:a) Certification• To participate, PMSCs and their clients wouldsubmit a completed checklist of compliancewith the framework’s standards, particularlyrelating to vetting of PMSCs and personnel,field management, and reporting of humanrights and labor rights violations. Thischecklist and a preliminary desk and worksitecheck would serve as the basis for determiningcompliance with the framework standards.• Companies and clients that fulfill these certificationrequirements would be provided with acertificate, which they would be permitted touse in publicity and marketing. 16• PMSCs would be required to integrate twothirdsof their subcontractors into theframework within three years, to ensurecontinued certification. These subcontractorswould themselves have to undergo certification.1715 See note 1, above.16 As is the case with the Global Compact logo and ICTI.17 As is required by the Business Social Compliance Initiative and ICTI.