In an explosive campaign last year, the Islamic State in Iraq and Syria (ISIS), which also known as the Islamic State, captured much of northern Iraq. The spoils of their conquest included several large oilfields, which had been run by major multinational oil producers like Exxon, BP, and MobileChina, as well as smaller producers like the Angolan firm Sonangol.
These oil firms responded to the advancing chaos by curtailing their projects in the north and evacuating their employees from the region. In some cases, they even evacuated nonessential employees from elsewhere in Iraq.
Among the firms’ employees were private military contractors (PMCs) hired to provide security for the oil field’s civilian employees. This raises a question: if multinationals were willing to hire PMCs to protect their employees, why did they not use these PMCs to defend their oil fields from ISIS militarily, preventing the fields from falling in the first place?
ISIS’s onslaught was not entirely unexpected. Iraqi defense officials and U.S. intelligence had been warning of ISIS’s growth since late 2013, so firms had time to determine some kind of response. Lots of money was on the line, in terms of both fixed infrastructure investment and future revenue. Why then did the collective response of the oil firms to the Iraqi army’s capitulation seem so timid?
By way of comparison, in Nigeria, oil firm Royal Dutch Shell apparently provided tens of millions of dollars and law enforcement training to units of the Nigerian military and police in exchange for security provision around their drilling sites; such units are popularly called “Shell Police.” Exxon Mobile has done similarly around the world. Both companies have come under considerable criticism for doing so, yet continue to defend their policies.. Multinational firms are generally not shy of hiring outside force when necessary, particularly in dangerous neighborhoods.
Nor is there a shortage of private military actors willing to fight in Iraq. Major PMCs have announced their eagerness to bring the fight directly to ISIS. In October 2014, former Blackwater CEO Erik Prince publicly advocated for the U.S. to hire a multibrigade-sized force of contractors (roughly 10,000 troops or more) to destroy ISIS in combat.
There are already thousands of military contractors in Iraq, working for the U.S. and the Iraqi government as well as for private parties. Hiring a PMC force for combat operations would be cheap, compared to the lucrative oil development at risk. For example, Executive Outcomes, a South African contractor, was paid just $35 million by the government of Sierra Leone for its combat services in successfully repelling the assault of the rebel force known as the Revolutionary United Front in 1993.
So why, if major multinationals were willing to hire PMCs for combat operations elsewhere in the world, does it seem that they were unwilling to do so in Iraq?
It is hard to say for certain, but we can speculate as follows: the politics around military contractors in Iraq are too toxic for both the U.S. and the Iraqi governments, for either side to tolerate PMCs engaging in combat operations to benefit foreign multinationals. For a PMC to train Iraqi troops is acceptable; even if the troops fail miserably in the field, at least the principle of Iraqi sovereignty is upheld if not its reality. But for a PMC to fight on behalf of a corporation would seemingly herald the breakdown of political authority, especially given the challenge to a unified Iraq posed by the Kurdish Regional Government’s ambitions and the recurring Sunni insurgencies. And for better or worse, Iraqi sovereignty is a key goal of American foreign policy.
Given the political sensitivities, the oil firms in Iraq likely decided that keeping a low profile was best. Still, “letting the authorities handle it” assumes that the authorities can indeed handle it. In this case, the Iraqi government has largely abdicated its role, turning the field over to Iran-backed Shiite militias that are eager to do some ethnic cleansing of their own, while U.S. policy in the region could be charitably described as “indecisive.”
Ultimately, the oil firms’ keeping a low profile meant yielding not to the proper authorities, but to chaos, mass murder, and the region’s domination by whichever band of thugs comes out on top.
Given the alternatives, for PMCs to enter combat on behalf of the multinational firms seems far more attractive, even if the Iraqi government objects. Such firms are subject to the legal systems of several countries and can be held liable for wrongdoing (at least to some degree, realistically speaking), in ways that Iranian special forces cannot be. PMCs are far more disciplined than your average Shiite militia; the innocent lives taken by the infamous Blackwater during all their years in Iraq number in the scoresat most, compared to at least several hundred Sunnis who were murdered during the recent Shiite counteroffensive alone.
When the situation quiets down, the multinationals can surely be trusted to cede control to the Iraqi government since they have strong financial incentives to play nice (the oil fields in the Basra region are far more valuable than those to the north). Can we say the same about Iran? Given that Iraq has apparently chosen to cede control to Iran-backed militias, it really has no grounds to object to PMCs on a corporate payroll.
Some will object that corporations are not supposed to be geopolitical actors. For Exxon or BP to pay for combat operations against major armed adversaries risks undermining national sovereignty and upsetting the international order of states. First, this objection neglects the degree to which even state armies already hire their units out to corporate employers. Second, waiting for Iraq to turn into another Syria seems far more destabilizing than a few thousand mercenaries would be.
If governments fail in their duties, then corporations with enough resources ought to have the courage to step up, even in unpopular ways. If the multinationals had defended their oil fields against ISIS using PMC armies, they could have contained ISIS’s advance, denied them hundreds of millions of dollars of revenue that only made the threat more dangerous, saved billions of dollars of their own losses and thousands of lives. And they still likely can.
This article was originally posted on the Foreign Policy Association’s blog network, ForeignPolicyBlogs.com. You can find the original article here.
Oren Litwin is a Political Risk Fellow at Young Professionals in Foreign Policy. He is an expert in non-state actors and Just War Theory, and he has extensive professional experience in financial advising, investing, and alternative finance such as crowdfunding.