I. Introduction
War and the economy are historically intertwined. Wars can stimulate different economic activities, both legitimate and illicit. Illicit business activities or organized criminal groups exploit the weak governance, violence and corruption of war to profit financially. Frequently, criminal groups emerge in the context of armed conflicts, committing both common crimes (smuggling, corruption, and extraction of valuable resources) and war-related criminality or state criminality (war crimes, crimes against humanity and genocide).Footnote 1 War also creates the opportunity for legitimate private military and security companies (‘PMSCs’) to earn massive profits – and sometimes, enter into criminal operations themselves. PMSCs exploit conflict zones around the world for recruitment, offering former combatants the opportunity to become ‘soldiers of fortune’ or ‘mercenaries’ both in their home conflict and abroad.Footnote 2 PMSCs also come to conflict zones to ‘market’ their services to warring factions.
This phenomenon is not new, but the international community has neither learned from former conflicts, nor adequately dealt with the past to prevent future conflicts, or similar conduct during conflict. Although PMSCs initially appeared alongside the African independence movements of the 1960s,Footnote 3 during the war in the former Yugoslavia, they explored the ‘market’ and proved valuable in providing various military and security services.Footnote 4 By the time PMSCs engaged in wars in Iraq and Afghanistan, it became obvious that their presence would be long-term and that regulation was required.Footnote 5 PMSCs have since expanded in terms of the nature of their activities, the contexts of their operations, and their clientele.Footnote 6
The legacy of the war was common to all three countries of the former Yugoslavia (Croatia, Serbia and Bosnia): many former combatants who engaged in criminal activities (organized crimes or crime committed during hostilities), transformed their illegal activities into legitimate private security companies after the war, as the article will demonstrate. Domestic PMSCs filled a security gap that was created by (a) years of fighting and insecurity coupled with (b) weak post-conflict institutions. At the same time, PMSCs provided jobs for former combatants. The United Nations (‘UN’) Working Group on the use of Mercenaries (‘WGM’) noted in 2020 that ‘[…] armed non-State actors may seek to establish legal entities, for example in the form of private security providers, in an effort to legitimize some of their activities and conceal the involvement of warlords and militia leaders’.Footnote 7
Recent reports on the recruitment of Syrian,Footnote 8 Ukrainian,Footnote 9 ChadianFootnote 10 and SudaneseFootnote 11 combatants demonstrate that armed conflicts continue to produce trained combatants who can be hired across conflicts and regions. This also demonstrates considerable changes and trends in the nature of the conduct of war, such as the increasing demand for mercenary-related actors in contemporary conflict, and the proliferation of armed non-state actors such as PMSCs.Footnote 12 Concurrently, the patterns of recruitment of actual or former combatants have not significantly changed since the war in the former Yugoslavia, and since the adoption of the Montreux Document and the Code of Conduct. If, post-conflict, combatants are not properly reintegrated into civil life, it is very likely that some of them will seek to profit from lucrative opportunities offering military and security services in their country or abroad.
Post-conflict processes that reintegrate former combatants into civil life through a set of inter-related measures around security sector reform and transitional justice, are critical to the consolidation of sustainable peace.Footnote 13 Stable institutions and democratic governance post-conflict societies require disarming former combatants, then establishing and maintaining security.Footnote 14 The process for building sustainable peace and stability in post-conflict Croatia, Serbia and Bosnia and Herzegovina, took place through different approaches and with varying levels of involvement by external actors.
The field of private military and security companies is a special branch of the more general field of business and human rights.Footnote 15At the international level, there are no legally binding instruments regulating PMSCs. The two main multi-stakeholder voluntary initiatives that address this gap in international law are the Montreux Document on Pertinent International Legal Obligations and Good Practices for States Related to Operations of Private Military and Security Companies during Armed Conflict (‘the Montreux Document’) (2008)Footnote 16 and International Code of Conduct for Private Security Service Providers (‘the Code of Conduct’) (2010).Footnote 17 The Montreux Document contains a compilation of international humanitarian law provisions pertaining to PMSC activities. It is primarily addressed to States, not to PMSCs themselves. Its effect is limited, because it only applies in armed conflict situations, despite the widespread use of PMSCs in non-conflict contexts.Footnote 18 The Code of Conduct sets responsibilities and standards relating to human rights and good governance principles. The Code of Conduct directly addresses member companies, regardless of the identity of their clients.Footnote 19 However, the Code of Conduct only refers to private security providers and excludes private military companies from its scope.Footnote 20
The UN Working Group on the use of Mercenaries is the only UN entity specifically tasked to monitor PMSCs and their human rights abuses globally.Footnote 21 The WGM defines a PMSC as ‘a corporate entity which provides on a compensatory basis military and/or security services by physical persons and/or legal entities’.Footnote 22 It defines military services as ‘specialized services related to military actions including strategic planning, intelligence, investigation, land, sea or air reconnaissance, flight operations of any type, manned or unmanned, satellite surveillance, any kind of knowledge transfer with military applications, material and technical support to armed forces and other related activities’, and security services as ‘armed guarding or protection of buildings, installations, property and people, any kind of knowledge transfer with security and policing applications, development and implementation of informational security measures and other related activities’.Footnote 23
Following the adoption of the Montreux Document and the Code of Conduct, the global consensus was that the industry was sufficiently regulated. However, the absence of any oversight mechanisms accompanying those initiatives meant that the PMSC industry continued to develop, enlarging their sectors of activities ranging from migration and border management to protection of extractive sites, and diversifying their clients among state and non-state actors. Although client needs and international security concerns transformed the PMSCs’ operations, some elements remain consistent across the industry; PMSCs regularly draw their work force from former combatants, who are experienced in armed conflict. In some instances, criminal groups can be contracted by parties to armed conflict or be transformed into paramilitary units. Increasingly, crime becomes interwoven with war economies in contemporary conflicts.
What lessons can we learn from the Yugoslav conflict in terms of preventing the former combatants from engaging with private military and security companies and how can we avoid the transformation of illegal economic activities into legitimate commercial PMSCs? What is required to effectively regulate PMSCs in future conflicts? This article uses the ‘Yugoslav example’ to highlight increasingly common problems posed by PMSCs in conflict environments, namely the predatory recruitment of combatants and the growth of PMSCs around the world. This article further emphasizes the need to adopt a comprehensive approach to security in post-conflict societies and calls for a multi-faceted approach to the transition process.
Four points are of note. First, the involvement of the international community has been impressive, ranging from military, diplomatic, economic and peacekeeping interventions, and yet, none of these interventions addressed the recruitment of active and past combatants, or their transformation into PMSCs. Second, it was during the Yugoslav conflicts that PMSCs inaugurated their first real transnational business activities and ‘tested’ the commercial opportunities that arose out of the conflict and war economy. Third, the UN Security Council established the first international criminal tribunal since the Nuremberg Tribunal, the International Criminal Tribunal for the former Yugoslavia (ICTY), and considerable efforts were invested in addressing the past and transitional justice. Yet, this was done without analysing the link between the combatants, organized armed groups and the war economy. Last, the context in the former Yugoslavia is often cited as the naissance of a new form of wars, where transnational and international crimes are inter-related. The lack of study and, consequently, the lack of a deeper understanding of the transformations of ex-combatants, mercenaries and criminal groups into ‘corporate warriors’ and legitimate PMSCs, allows for similar patterns to be repeated in other conflict and post-conflict contexts, such as Syria, Libya, Central African Republic, Nagorno Karabagh or Ukraine. While PMSCs have adapted to different crises and continuously expand their field of activities, doctrine and policy have not followed their rapid evolution.
Drawing on the Yugoslav example, the article argues that in order to address and prevent the growth and use of PMSCs in conflict and post-conflict societies, there is a need to adopt a set of measures across inter-related pillars of justice, rule of law and security sector reform. In Part II, the article provides a general overview of conflict dynamics. In Part III, the article studies the limits of international sanction regimes and their negative impacts, which stimulate the criminal networks among combatants and PMSCs around the world. Part IV explores the limits of international criminal prosecutions in addressing organized crime and private military and security contractors, in particular when transnational crimes and international crimes are intertwined. In Part V the article demonstrates that in order to avoid the transformation of criminal organizations and informal economies into legitimate for-profit companies, there is a need for a broader approach to security sector reform (‘SSR’). This should include the disarmament, demobilization and reintegration (‘DDR’) of all sorts of combatants, private or public, state or non-state and PMSC personnel. The article suggests that relevant and timely lessons can be learned to avoid further privatization of wars and to achieve longer-term peace and security. These lessons should be reflected by the broader doctrine around Business and Human Rights in Armed Conflicts and should be considered for discussion by the UN Open-ended Intergovernmental Working Group on PMSCs, which is currently developing a regulatory instrument for PMSCs.Footnote 24
II. The Yugoslav Conflict: The Context for Production of Combatants
The Yugoslav wars were among the bloodiest wars in Europe since World War IIFootnote 25 and a turning point in the transformation of modern conflicts globally.Footnote 26 As such, they provide important lessons for future regulation of PMSCs. The Yugoslav Federation embarked on a series of secessions of its former republics that declared independence and were subsequently recognized as sovereign States.Footnote 27 This process of dismemberment of the federal state was accompanied by the violent conflict that took place between 1991 and 1995 involving Croatia, Bosnia and Serbia, and again in 1999 involving Serbia and Kosovo.Footnote 28 The international engagement in the war was considerable, ranging from diplomatic initiatives, a full-scale embargo imposed by the EU and the UN, the implementation of a peacekeeping mission with a large mandate, the establishment of an international criminal tribunal through the Security Council resolution and lastly, the use of force by NATO in 1999 that is still debated today, making the Yugoslav wars an important case to study. Despite wide-ranging legal, military and diplomatic tools at their disposal, States have not managed to adequately address security sector governance because they have failed to successfully manage the post-conflict reintegration of former combatants into civilian life. Additionally, the conflict provided opportunity for international PMSCs to directly intervene, create partnerships with local PMSCs, recruit new employees and build new business activities.Footnote 29 This led to an increase in PMSCs in the region and worldwide.Footnote 30
It can be said that conflicts stimulate the ‘production of combatants’. In the Yugoslav example, the United Nations Commission of Experts’ final report identified various arrangements including ‘at least 83 identified paramilitary groups operating in the territories of the former Yugoslavia’, of which some 56 were working in support of the Federal Republic of Yugoslavia and the self-declared Serbian Republics; 13 were supporting the Republic of Croatia; and 14 were supporting Bosnia and Herzegovina (‘BiH’).Footnote 31 According to the Commission, the number of paramilitary groups and their size varied throughout the course of the conflict; in particular, the number grew when the conflict intensified. However, these were only ‘a rough approximation of paramilitary troop strength’.Footnote 32 The estimated number of people fighting in paramilitary groups ranged from 4,000 to 6,000 in support of BiH; between 12,000 and 20,000 supporting Croatia; and between 20,000 and 40,000 paramilitaries fighting on behalf of the self-declared Serb Republics.Footnote 33 In addition, there were groups consisting of people who had been drawn from outside the former Yugoslavia. According to the same report, ‘there were the Mujahedin groups (operating with the Bosnian Army), the Garibaldi Unit (an Italian unit operating alongside the Croats) and Russian Mercenaries (operating in conjunction with the Serbs).Footnote 34 There are also general reports of the presence of mercenaries from Denmark, Finland, Sweden, the United Kingdom, and the United States’.Footnote 35 There are no exact numbers of actively engaged combatants throughout the war years, only some scattered statistics from various sources.Footnote 36 No complete study has ever been conducted to understand the exact type of combatants, their subsequent dealings and their post-conflict reintegration outcomes.Footnote 37 Many of the former soldiers transformed into private ‘for-hire’ individuals and can still be found in the domestic and international markets.Footnote 38
The Yugoslav wars also created further opportunities for armed groups to expand their capacities into criminal enterprises. The embargo imposed by the European Union (‘EU’) and the UN from 1991 to 1995 in Croatia, Serbia and Bosnia created a space for various illegal economies and organized crime, allowing parties to sustain their military capacities.Footnote 39 These criminal groups operated through various factions such as paramilitary groups, formal combatants integrated into the armed forces of States involved in the hostilities, and underground criminal networks. Their networks were active across the region and across economic sectors, e.g., trafficking of oil, people, cigarettes, oak, and vehicles.Footnote 40
Establishing truth and addressing conflict-related criminal conduct is a fundamental aspect of the transition to peace and dealing with the past.Footnote 41 Demobilization can often be hindered by fear of prosecution and, conversely, a lack of prosecution and amnesty laws can facilitate the transformation of formerly illegal economic/criminal actors into powerful legitimate companies. Furthermore, both international and domestic justice proceedings have primarily focused on individual criminal responsibility and the role of the individuals in international crimes, rather than corporate or economic crimes. Even in cases where funding and other financial aspects were examined during trial (including examination of economic dynamics in the commission of mass crimes), neither domestic courts nor the International Criminal Tribunal for the former Yugoslavia (‘ICTY’) prosecuted economic crimes (ICTY had very limited jurisdiction over those crimes). It is a disturbing reality that criminal groups profit economically from armed conflicts around the world. Their financial interests can prompt direct engagement in combat activities to preserve illicit business activities or interests, thus creating inter-relations between organized crime and international crime.Footnote 42
III. The International Sanctions Regime as a Catalyst for Organized and Economic Crime and the Expansion of Private Military and Security Companies
From the outset of the ‘Yugoslav crisis’, blocked by various alliances,Footnote 43 States failed to implement effective military, economic and diplomatic policies to support a sustainable peacebuilding process. Instead, the international community began by imposing a sanctions regime, which stimulated organized crime, rooted in political and (para)military and (para)police networks, which would subsequently flourish during the war years. This not only generated all sorts of war-related business, but also helped underground business networks to grow into legitimate economic actors post-conflict, as will be demonstrated further on.
Since the end of the Cold War, the UN Security Council and General Assembly have made increasing use of economic sanctions to protect international peace and security.Footnote 44 These sanctions are collective enforcement measures and one tool under international law for the resolution of non-judicial disputes. Once the Security Council determines that there is a threat to international peace and security in accordance with article 39Footnote 45 of the UN Charter,Footnote 46 it may declare an embargo as a retaliatory measure against one or more States.Footnote 47 These measures may be broad in scope or more targeted. The purpose of an embargo is to restrict, or even completely interrupt, trade on the territory of a State.Footnote 48 While mainly directed against States,Footnote 49 the Security Council resolution can also affect non-state actors directly, including criminal and/or paramilitary groups, or companies.Footnote 50
During the 1990s, the Security Council adopted an unprecedented set of measuresFootnote 51 that completely disrupted the legal economic relations with and within Yugoslavia. Sanctions were accompanied by the establishment of sanctions committee to monitor compliance.Footnote 52 In this case, on 25 September 1991, the UN Security Council Resolution 713 established an arms embargo on all the territory of the former Yugoslavia after declaring the situation as a threat to peace and security.Footnote 53 The Security Council also established a sanctions committee for the resolution 724.Footnote 54
Following the recognition of Bosnia and Herzegovina in April 1992, the conflict intensified significantly. This prompted the Security Council to adopt Resolution 752 (15 May 1992) demanding that all military interferences stop immediately and that all irregular military forces in Bosnia and Herzegovina be disbanded and disarmed.Footnote 55 Subsequently, the Security Council adopted Resolution 757 (30 May 1992) which expanded sanctions by banning all international trade, scientific and technical cooperation, sports and cultural exchanges, air travel, and the travel of government officials from the Federal Republic of Yugoslavia.Footnote 56 On 16 November 1992, the Security Council continued the extension of the embargo by adopting Resolution 787, imposing a widespread ban on shipments to and from Yugoslavia (at this time, consisting of the current territories of Serbia and Montenegro), followed by a series of naval blockades. In the final sequence of embargo enlargement, the Security Council reaffirmed all previous sanctions in its Resolution 820 (17 April 1993) and introduced a whole list of new sanctions to be implemented within nine days.Footnote 57
The embargo provoked economic disruption and hyperinflation that triggered the eruption of civil conflict.Footnote 58 According to Pavle Petrovic and Zorica Vujosevic ‘[t]he Yugoslav hyperinflation of 1991–1993 is one of the highest and longest episodes ever recorded’.Footnote 59 As a result of the embargo, a ‘black market’ was effectively established, including for essential supplies and vital resources. In this context, the sanctions targeting Yugoslavia triggered an extremely well-organized underground economy that was subsequently normalized and legalised post-conflict.Footnote 60 In practice, sanctions have the unintended consequence of facilitating the expansion of PMSCs – many criminal groups transformed into legally registered private security companies.
It is worth noting that there were multiple peacekeeping missions accompanying the sanctions regimes in the early 1990s. Some of the peacekeeping missions,Footnote 61 as well as the ICTYFootnote 62 acknowledged the problematic relationship between the armed conflict, organized crime, and the role of private security personnel. This relationship has been stimulated by international sanctions, in turn, sustaining and even reinforcing organized crime. While this has been identified as a concern, it has only been marginally addressed by the United Nations.Footnote 63
In evaluating the effectiveness of the sanctions regime in the former Yugoslavia, the members of the Copenhagen Round Table noted that:
[t]he economic sanctions in particular were considered to be remarkably effective. They had clearly modified the behaviour of the Serbian party to the conflict in the former Yugoslavia and may have been the single most important reason for the Government in Belgrade accepting a negotiated peace agreement in Dayton, ending more than four years of terrible war in the former Yugoslavia.Footnote 64
While recognizing the role of a neighbouring country, in particular, in economic trade, and its impact on sanctions, the members of the Copenhagen Round Table continued:
This unique and unprecedented formula of coordinated inter-institutional, international cooperation at the regional level in support of national Governments in their endeavour to observe the mandatory measures taken by the Security Council was identified as the main reason for the effectiveness of sanctions in the case of the former Yugoslavia.Footnote 65
However, according to Paul Szasz, neither the infrastructure of the UN Secretariat nor that of the Security Council was sufficiently equipped for the tremendous expansion of its sanctions-peacekeeping approach.Footnote 66 According to Szasz, ‘peacekeeping operations were launched and economic sanctions imposed without any significant studies of their objectives, means for accomplishing them, collateral harms that might result, or exit strategies. By the mid-1990s these flaws became evident’.Footnote 67 The literature on sanctions generally agrees that sanctions regimes lack efficiency. While the sanctions mainly target regimes and often one side to a conflict,Footnote 68 they have devastating consequences on civilian populations. The examples of Iraq,Footnote 69 IranFootnote 70 and Russia for the invasion of Ukraine further illustrate this.Footnote 71
Some studies have demonstrated a relationship between conflict activities, organized crime and the role of for-profit combatants, mercenaries, in some cases even PMSCs. For example, examining the situation in the former Yugoslavia, Mary Kaldor introduced the idea of ‘new wars’, noting that armed conflicts increasingly show an absence of clear boundaries between war (considered as violence between States or organized groups for political reasons), organized crime (private organizations using violence for personal profits) and large-scale human rights violations (the use of violence against civilian populations by state or politically organized groups).Footnote 72 According to Kaldor, the motivation of paramilitary groups became largely economic, notwithstanding the presence of nationalist fanatics within these groups.Footnote 73 Finding that ‘fanatic nationalism is not good for business’, Kaldor notes that only 20 per cent of paramilitary personnel in the Balkans were motivated by nationalist ideologies, while 80 per cent were ‘common criminals’ involved in systematic looting, racketeering, black markets, and trafficking of goods. Criminal groups cooperated with each other across the territories and confrontation lines to profit from the conflict.Footnote 74 In such contexts, companies such as PMSCs can serve as a backbone to illegal activities in a wide range of organized transnational crimesFootnote 75 – this was often the case in the former Yugoslavia. Indeed, in the absence of a legally organized economy during wartime, the parties often use illegal means to sustain their war capabilities.Footnote 76 Organized criminal groups may use legal entities such as corporations or government agencies to commit crime.Footnote 77 This disguises individual involvement in criminal offences through complex corporate structures where transactions and clients can be hidden, and the individuals involved are shielded from liability.Footnote 78
The ‘dual-purpose violence’ between organized crime and international crimes is considered to be the dominant element in contemporary armed conflicts.Footnote 79 One author recently wrote ‘[t]he more that sanctions bite, the more willingly their targets will turn to other means, including military aggression, to retaliate’.Footnote 80 War and the economy have always been closely inter-related, as parties to the conflict need economic support to sustain the capacity to maintain operations.Footnote 81 The relationship between ‘[m]oney, power and political influence are opening the door for crime bosses and making security firms more powerful’Footnote 82 in the post-conflict period. According to the Global Initiative Against Transnational Organised Crime:
Leftover armaments and the associations formed during the Yugoslav Wars have contributed to the Western Balkans’ prominence in arms trafficking, and firearm murder rates in the region are among the highest in Europe. […] All of these crimes and networks are facilitated by the region’s endemic corruption, and serve to further underscore the ways in which corruption and state penetration by organized crime produce detrimental effects for institutions and citizens alike.Footnote 83
The operations of the accused war criminal Zeljko Raznatovic, otherwise known as ‘Arkan’, provide an important example of the correlation between the implementation of sanctions and organized crime. As a result of the oil and gas restrictions imposed by sanctions, there was a shortage of those commodities in the country. The smuggling and underground economy quickly developed,Footnote 84 in particular when the State began selling public companies in an attempt to circumvent the sanctions on fuel.Footnote 85 Several gas stations were sold to Arkan, who, during the war, became the notorious leader of one of the biggest paramilitary units, named Serbian Volunteers Guard (SVG) or ‘Arkanovci’ (Arkan’s men).Footnote 86 Arkan’s ‘security company [was] used to run drugs, gambling houses and kill rivals in the 1990s. […] The government routinely gives gun permits to security companies run by mobsters […]. Money, power and political influence are opening the door for crime bosses and making security firms more powerful.’Footnote 87
By the time the conflict in Croatia and Bosnia and Herzegovina ended in 1995, the networks between paramilitary units, criminal organizations and the state security apparatus were well established.Footnote 88 This allowed for private security companies to flourish in a context where the need for security was high and where the State was too weak to respond to the demand. Similar patterns can be observed in other contexts where international sanctions were imposed. For instance, several UN organs expressed concerns about the relationship between PMSCs, extractive industries and organized crime in the Central African RepublicFootnote 89 and Libya.Footnote 90 In both contexts, where the state authority has collapsed or is considered a ‘failed State’, conflict activities are stimulating the proliferation of mercenaries, PMSCs and organized crime. These relationships further create factual and legal complexity in determining whether there is an intervening State behind those actors, whether it can be classified as a party to the conflict and who can be responsible for crimes.Footnote 91
IV. From Illegal to Legal Activities: The Limits of Transitional Justice in Addressing Organized and Economic Crimes
Processes associated with traditional justice have historical roots, but transitional justice emerged as an autonomous concept following the end of the Cold War.Footnote 92 There is no legal definition of transitional justice, but some characteristics can be identified such as a ‘legalistic outlook, a state-centric approach, a preference for gradual change, support for liberal capitalism and a reliance on international governance institutions’.Footnote 93 Within the UN, the notion of transitional justice:
Comprises the full range of processes and mechanisms associated with a society’s attempts to come to terms with a legacy of large-scale past abuses, in order to ensure accountability, serve justice and achieve reconciliation. These may include both judicial and non-judicial mechanisms, with differing levels of international involvement (or none at all) and individual prosecutions, reparations, truth-seeking, institutional reform, vetting and dismissals, or a combination thereof.Footnote 94
Illegal economic activity taking place during armed conflict may violate (and be prosecuted through) domestic or international criminal law, but a notable gap appears with regard to transnational conduct. International crimes – such as war crimes, crimes against humanity or genocide – are serious violations of international law by state and non-state actors involved in armed conflict. They must be distinguished from transnational crimes,Footnote 95 the latter of which are cross-border conduct prohibited by domestic criminal laws. Transnational crime violates the domestic laws in at least two distinct internal legal orders. Notable examples include corruption,Footnote 96 money laundering, production and transportation of dangerous products, human trafficking and piracy. They require sophisticated and systematic forms of illicit organization, distinct from conventional criminality, and sometimes qualified as organized or economic crime. States internationalize organized crimes through the multiplication of international instruments on transnational economic crimes.Footnote 97 Although less high-profile than international crimes, transnational crimes often continue to thrive in local markets in post-conflict contexts.Footnote 98
Although legal definitions distinguish between international crime and transnational crime, in practice, there is often overlap between these two categories of crimes. According to Robert Kolb, there is a distinction between private and public crime: a company can support the war effort (public aspect) and simultaneously benefit from the crime in a private capacity,Footnote 99 by obtaining concession contracts and/or security contracts through criminal means. Some authors suggest that ‘the destruction of a population results from a dynamic of mutual benefit between players in both the central and the peripheral powers’.Footnote 100 Contemporary conflict dynamics increasingly lead to the conflation of transnational and international crimes. However, only the latter can ordinarily be prosecuted by international courts, thus leaving acts that fall under transnational or organized crime (but which do not meet the relevant elements of an international crime) unpunished at the international levels. This is particularly the case for the ad hoc courts that have context specific mandates and narrower jurisdiction.Footnote 101 The Security Council established the ICTY through resolution 827 of 25 March 1993, the first international criminal tribunal since the Nuremberg trials.Footnote 102 The ICTY had jurisdiction over traditional international crimes, excluding transnational crimes, based on the reports of the Commission of Experts for the former Yugoslavia, which provided evidence of mass atrocities, including rape, torture, mass displacement and ethnic cleansings, forced disappearances.Footnote 103
Very few cases at the ICTY considered organized crime and the role of private military and security companies. In the Prosecutor v Slobodan Milosevic, the prosecutor raised the role of the accused in relation to organized crime and the role of private security actors.Footnote 104 In the 2002 Amended Indictment ‘Bosnia and Herzegovina’,Footnote 105 the Office of the Prosecutor (OTP) found that the accused Slobodan Milosevic ‘worked in concert with or through other individuals in a joint criminal enterprise. Each participant or co-perpetrator […] played his or her own role or roles that significantly contributed to achieving the objective of the enterprise’.Footnote 106 Among others, Milosevic co-perpetrated crimes against humanity, genocide and war crimesFootnote 107 with Zeljko Raznatovic (‘Arkan’).Footnote 108 The OTP also identified that MilosevicFootnote 109 and Arkan committed similar crimes within the territory of Croatia.Footnote 110 At trial, testimony showed direct links between the war, organized crime and private security. In addition to Arkan’s men, a group named the Skorpions operated as military unit and as private security company during the Milosevic regime.Footnote 111 In his testimony from October 2003, Milan Milanovic, chief of the branch of Serbian State Security in Novi Sad, testified that he ‘proposed to the director of the oil company [Naftna Industrija Republike Srpske Krajina] that they secure the oil fields that were on the separation lines’.Footnote 112 The oil company was guarded by Skorpions acting on orders from the Serbian military as well as from the director of the oil company, creating confusion between their paramilitary role and private security role.Footnote 113 Their services were compensated by material and financial resources from the company:
Having toured the area, I realized that the oil fields were in jeopardy as they were along the very confrontation line. And it is common knowledge that if a shell were to fall, this would cause an ecological disaster. I toured the area. I met this young man [Slobodan Medic] for the first time. He was proposed to me by several people. And I even remember that I asked Badza [head of the Serbian police] even whether he had anything against this, and he said he didn’t …Footnote 114
From this and other testimony, the court found that ‘Skorpions’, headquartered in Đeletovci, were part of ‘[…] a special unit of the SDB, formed as a satellite unit of the Red Berets to secure the oil fields of the Serbian national oil company, and to guard the RSK border with Croatia’.Footnote 115
In a different case, Prosecutor v Jovica Stanisic and Franko Simatovic,Footnote 116 which is currently waiting for an appeal judgment to be rendered, contains detailed findings on the role of Arkan’s unit, as well as their funding and training in Croatia and Bosnia. Witnesses testified that it was a subsidiary of the military, not the police,Footnote 117 but after the fall of Vukovar, Croatia, it became a ‘regular military force of the “SAO Krajina” in charge of security for the area’.Footnote 118 This shows how the political and economic reality of war contexts allow these groups to sit at the intersection of private security, armed conflict, and crime.Footnote 119
According to some authors, ‘everyone involved got a share and, once the central players – the Serbian state and local businessmen – were “rewarded”, the profit was sufficiently high that Medic and his men became wealthy. […] In fact, Milan Milanovic, who in the meantime had become deputy minister of defence of the Serbian Republic of Croatia [Republika Srpska Krajina] guaranteed the “legality” of such operations, thereby facilitating the transit of goods across the Bosnian and Croatian borders’.Footnote 120 The group had strong connections with people from political parties.Footnote 121 Similar patterns continue to be observed across some of the conflicts today where the roles and legal status of combatants can be qualified between paramilitary units, private security or mercenaries, as the case of the Wagner Group demonstrates.Footnote 122
In establishing international courts and tribunals, States establish limitations to jurisdiction to keep certain acts and crimes that are more domestic in nature within the jurisdiction of national courts. This, combined with an apparent lack of interest by both national and international courts in the interplay between international and transnational crimes, has paved the way for the transformation of criminal actors into legitimate private security companies. This is demonstrated through the indictment (by the ICTY) and criminal conviction by a Croatian court of former Croatian general Mirko Norac. Norac was indicted by the ICTY in 2004 for crimes against humanity (article 5 of the ICTY Statute) and violations of laws and customs of wars (article 3 of the ICTY Statute).Footnote 123 The same year, his conviction for war crimes and violations of wars and customs of wars was confirmed by the Croatian Supreme Court with the sentence for imprisonment of 12 years.Footnote 124 His ICTY case was subsequently transferred to a domestic prosecutorFootnote 125 who led the case against Norac for war crimes, leading to an additional sentence of 6 years.Footnote 126 After serving 10 years of this sentence, he was released on probation in 2011. In December 2015, Norac founded a private security company Noky Security.Footnote 127 During this time he was ‘prokurist’ with the power to represent the company from 1 January 2016 until 20 May 2020, according to the official court register of the Republic of Croatia.Footnote 128 His company was considered among one of the most profitable companies in Croatia,Footnote 129 mostly because it obtained many lucrative contracts with the State of Croatia.Footnote 130 This is not unique to Norac: Josip Klemm, former president of Special Police Forces during the war, founded Klemm Security Company in 2003, which employs many former combatants and provides private security services. He was later convicted for money laundering through his company between 2005 and 2007. However, his company remains registered as one of the most successful in private security in Croatia.
An additional barrier to prosecution, is the status of PMSCs as corporate actors. International criminal tribunals may be restricted to the prosecution of those with individual criminal responsibility, rather than corporate entities perpetrating criminal conduct. It must be underscored that a lack of criminal prosecution does not mean that an international crime did not occur. The exclusion of corporate criminal conduct from the jurisdiction of international criminal tribunals is an additional obstacle for the Business and Human Rights doctrine.Footnote 131
In relation to corporate liability, conventional and customary international humanitarian laws may be of particular relevance for international prosecutions, as the role of the state or state actors has no bearing on criminal responsibility – individual criminal responsibility for violations of international humanitarian law does not depend on the participation of the state and, conversely, the state’s participation in a crime does not excuse the perpetrator.Footnote 132 Moreover, international humanitarian law claims to apply equally to all parties to armed conflict and to bind them all expressly, whereas human rights law generally applies to only one party, namely the State concerned and its agents. Footnote 133 Thus, a corporate director can be prosecuted for the crimes that their company has contributed to, regardless of the nature of the business activities.
Nevertheless, international humanitarian law has limits in the context of organized, transnational crime. It is only relevant insofar as to identify if and to what extent a criminal group could qualify as a party to the conflict, and whether their members could be considered as directly participating in hostilities. It is now commonly accepted that providing financial support to parties to an armed conflict through criminal activities does not constitute direct participation in hostilities and does not call for the application of the relevant paradigm.Footnote 134 The contemporary challenge lies with cases such as Arkan’s men and the Skorpions, where separate units can be attached to a party to the conflict by participating in the hostilities, while also supporting the war efforts through criminal organization and corporate entities.Footnote 135 This raises the question of whether a new legal category of crimes is needed to better reflect contemporary challenges. Doctrine often refers to economic crimes, but these are not legally definedFootnote 136 and can contain an array of transnational crimes (trafficking of people, corruption) and international crimes (pillage), which can lead to confusion and impunity.
Securing accountability of these criminal actors is vital. Transitional justice is based on inter-related pillars of truth, justice, reparation and guarantees of non-recurrence. It can empower and transform societies,Footnote 137 so long as it has a tailored approach to each situation and addresses key concerns. In addition to reducing the justice gap and addressing the needs of victims, transitional justice is also composed of a set of measures to prevent the recurrence of conflict and human rights violations. According to the UN Office of the High Commissioner for Human Rights, some of the traditional measures include inter alia DDR as well as reinforcing internal accountability, Footnote 138 all of which are critical to the consolidation of sustainable peace, and to control the expansion and use of PMSCs locally or worldwide.
V. Combatants for Hire: Limits of Peacebuilding and Security Sector Reforms in Preventing the Expansion of Private Military and Security Companies
In the contemporary international order, the UN is responsible for maintaining international peace and security.Footnote 139 International security is based on the idea of collective security, which must be sought through peaceful means by settling disputes.Footnote 140 This concept of collective security, based on the victors of the Second World War,Footnote 141 proved inefficient during the whole period of the Cold War, but was convenient in the context of peacekeeping operations.Footnote 142 However, protection of international peace and security is an enduring challenge for the UN as well as for States. Indeed, evolving trends of conflict and violence continue to pose threat to the security of people around the globe.
As part of the peacebuilding process, the United Nations deploys a strategy of disarmament, demilitarization and reintegration, the so-called DDR process, which ordinarily allows the former combatants to successfully reintegrate into the society as civilian actors.
There is no unanimously accepted definition on what DDR constitutes. In its report to the Security Council, the UN Secretary General provided the following definitions for the activities of DDR:
(a) Disarmament is the collection of small arms and light and heavy weapons within a conflict zone. […] (b) Demobilization refers to the process by which parties to a conflict begin to disband their military structures and combatants begin the transformation into civilian life. […] (c) Reintegration refers to the process which allows ex-combatants and their families to adapt, economically and socially, to productive civilian life. […].Footnote 143
The mission of DDR is, thus, to contribute to creating a space for long-term peace and security.Footnote 144 Demobilizing former combatants is one of the components of larger security sector reform (‘SSR’) and it can be initiated in different periods.
SSR is the political and technical process of improving State and human security and it can be initiated once former combatants have been fully demobilized, otherwise, security reform policies can eventually prepare the process of demobilization. The UN has progressively integrated SSR into sustainable peace building, where SSR is also understood as a preventive measure and long-term development goal. Indeed, the nexus between security sector governance and the socio-economic well-being of groups in the society is key for sustainable development. In 2007, the Security Council noted ‘that reforming the security sector in post-conflict environments is critical to the consolidation of peace and stability (…) and preventing countries from relapsing into conflict’.Footnote 145
Whichever way security reform is designed, it should be complementary to DDR.Footnote 146 This is fundamental because critical factors, such as the size of armed forces or police, the stockpiling and destruction of small and light weapons and oversight mechanisms can embolden former combatants to move into the private security sector. Given the centrality of disarmament to peace and stability, related efforts to this end have progressively been included in peacekeeping missions.Footnote 147 Additionally, establishing and advancing effective security reform must be combined with socio-economic factors to be long-lasting, sustainable and effective.
In the context of the former Yugoslavia, DDR was deployed in a limited way or with no regard to the SSR efforts that started to develop in the early 2000s. The DDR processes in Croatia, Bosnia and Herzegovina and Serbia were poorly designed and implemented, leaving many former combatants deficiently integrated into civilian life. These combatants were not disarmed and, because of the lack of economic reform, were driven to do the only thing familiar to them to earn a living: war.
Lessons from past DDR processes indicate that governments and other key players are not prepared for sudden or rapid demobilization and reintegration activities.Footnote 148 In the countries of the former Yugoslavia, DDR was limited, not least because the mission was established immediately in the post-Cold War era. Additionally, DDR reforms were expected to reduce multiple forms of violence.Footnote 149 The reforms took place in two phases: first, during the active hostilities of the war in Croatia and Bosnia and Herzegovina, and second, in the post-conflict transition in the latter. The integration of DDR into the peacekeeping mandate further led to a gap in its application in Serbia.
The UN peacekeeping mission for the former Yugoslavia was mandated to create suitable conditions to negotiate peace and security in the region.Footnote 150 The UN Peace PlanFootnote 151 contained several key provisions, including the demilitarization of the UN Protected Areas in Croatian territory and the withdrawal of the Yugoslav army from the Croatian territory.Footnote 152 The demilitarization process in Croatia was not defined as either completeFootnote 153 or partial.Footnote 154 However, by design, it gave the appearance that it was only partial.Footnote 155 Furthermore, the UN adopted a selective approach to demilitarization as only the Serbian population, but not the Croatian military, was part of the demilitarization process.Footnote 156 On 31 March 1995, the Security Council decided to restructure the UN Protection Force (‘UNPROFOR’), replacing it with three separate but interlinked peacekeeping operations. Subsequent missions such as the United Nations Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium (‘UNTAES’), had an explicit mandate to initiate a 30-day demilitarization from 21 May 1996 to 20 June 1996.Footnote 157 As a key requirement under the Basic Agreement from 12 November 1995 signed by the government of Croatia and local Serb authorities in Eastern Slavonia, the demilitarization process required local Serbs to either remove all heavy weapons within the region or to hand them over to UNTAES for disposal. Demilitarization included the disarmament and demobilization of all military, paramilitary and police forces, units and personnel, and the breakdown of the command and control structuresFootnote 158 of any Serb units.Footnote 159
A similar approach was adopted in Bosnia and Herzegovina, where in reaction to the clashes, the Secretary General accelerated the presence of the UNPROFOR starting 30 April 1992. The UN Security Council deployed considerable efforts to appeal to all parties for a ceasefire, and through a series of resolutions demanded inter alia that all local irregular forces be disbanded and disarmed. Following the adoption of the resolution 819, UNPROFOR’s Force Commander, the Commander of the Serb forces and the Commander of the ‘Bosnian Muslim forces’Footnote 160 signed the Agreement for the demilitarization of Srebrenica on 18 April 1993, while active hostilities were still ongoing. Civil society was not consulted throughout the negotiation of this agreement, which set forth provisions on the disarmament of Bosnian forces only in exchange of their protection by the UNPROFOR.Footnote 161 On 21 April 1995, UNPROFOR’s Force Commander reported that 170 UNPROFOR troops, civilian police and military observers had been deployed in Srebrenica to collect weapons, ammunition, mines, explosives and combat supplies and that by noon that day they had ‘successfully demilitarized the town’Footnote 162 which ultimately led to the genocide of the Bosnian Muslims three months later.Footnote 163
The DDR program in Bosnia and Herzegovina was established in three phases during the post-conflict period:Footnote 164 emergency demobilization following the Dayton Peace Agreement (1995−1996), intermediate professionalization of services (1997−1998), and the continuing professionalization process (1999−2000). In this context, many former combatants became involved in organized crime, black markets and human trafficking, motivating the World Bank to establish an Emergency Demobilization and Reintegration Project.Footnote 165 In Bosnia, the Dayton Agreement did not establish relevant leadership for DDR, which led to a chaotic disintegration of armed forces. The World Bank estimated that ‘almost 300,000 soldiers or combatants had left the armed forces: 100,000 from Bosnian units, 45,000 from the Croat Defence Council (HVO) and 150,000 from the army of the Republika Srpska’.Footnote 166 These forces should have been reintegrated into society.
In Serbia, there was no UN presence during the conflict or post-conflict eras. The combination of mass privatization, foreign investment, and transfer of armed forces and police agents into the private sector, stimulated the unregulated rapid growth of private security companies in Serbia.Footnote 167 After years of resistance by the military, the first reform of the Armed Forces of Serbia and Montenegro (‘AFSM’) finally took place in 2003. This reform focused on restructuring and reducing the AFSM through the Resettlement and Retraining Project (PRISMA), which addressed social issues in relation to war veterans and military pensioners but also other categories of former military personnel.Footnote 168
It is necessary to integrate DDR into the political process while at the same time providing technical solutions to integrate former combatants into a civil life.Footnote 169 Failure to do so leads to gaps, which can lead to criminality, as evidenced by the oil field example cited above. In his 1996 report, the Secretary-General identified the link between the poor economic conditions of the local administration (i.e., authorities) since the closure of Djeletovci oil field and the presence of significant numbers of demobilized and unemployed ex-combatants undermining the public confidence in UNTAES.Footnote 170
If we consider that the objective of SSR should be to create conditions for a safe societyFootnote 171 then a few considerations should guide the approach. First, enhanced accountability of security institutions should be guaranteed by placing them under civilian control within a framework of the rule of law and human rights.Footnote 172 Civil society and local NGOs should play a fundamental role in SSR and DDR and the peace-building process. Their roles should include the planning and implementation of DDR and the inclusion of ex-combatants into civilian life, something that has not been applied in the context of the former Yugoslavia.Footnote 173 Secondly, DDR should be applied through regional operations.Footnote 174 Armed conflicts are increasingly transnational. The Yugoslav example demonstrated the extent and size of criminal networks where the transfer of weapons and other products defied national borders. These risk multipliers can be observed in many modern conflicts.Footnote 175 In responding to this, DDR should consider a cross-border approach. Third, from a Business and Human Rights standpoint, it was observed that ‘cooperation with small private companies was more efficient than with large state-owned companies. Those companies trained a smaller number of demobilized soldiers and employed only half of the trained individuals, but these employments were sustainable’.Footnote 176
In Croatia as well as Bosnia and Herzegovina, the DDR program adopted during the hostilities proved unable to prevent future violence, including crimes such as genocide. In the post-conflict phase, DDR implementation in Bosnia suffered from an unfortunate combination of lack of political willFootnote 177 and a lack of a strategic, holistic vision for the demobilization and reintegration of former combatants, which undermined the process.Footnote 178 These inadequate approaches to DDR and SSR in the former YugoslaviaFootnote 179 shaped a space in which PMSCs mushroomed as many former combatants became private security contractors for local and foreign companies.
The social and economic consequences of armed conflict are dramatic and leave all groups of society in different forms and degrees of trauma. In a war-torn country, many former combatants find it difficult to find a job and successfully integrate into peaceful society. This creates risks of returning to violence ‘[w]ith weapons still at hand and no economic or social perspective for the future, ex-soldiers can go back to the only “job” they know’.Footnote 180 Furthermore, in modern conflicts where organized crime nourishes dangerous links to corrupt political actors (in some cases, elites), poorly designed DDR and SSR 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’.Footnote 181 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’.Footnote 182
As SSR is directly linked to international peace and security, it may come as a surprise that the UN has adopted a much-delayed strategy of pursuing a coordinated and comprehensive approach to SSR assistanceFootnote 183 across the spectrum of peacekeeping, peacebuilding and development settings. It should be further noted that the Security Council, the body explicitly tasked with maintaining international peace and security, adopted its first resolution specifically referring to SSR as late as 2012, followed by resolution 2151 (2014) which was the first ever stand-alone resolution on SSR, and by resolution 2553 (2020) as a second thematic resolution on SSR.Footnote 184
The next generation of DDR must be more inclusive, encapsulating entities that are not traditionally included in peace agreements, such as PMSCs.Footnote 185 States should reinvigorate discussions on the systematic inclusion of the SSR in their conflict prevention agenda and should consider SSR as one tool for curtailing the expansion of PMSCs through the recruitment of current or former combatants, as documented in Syria and Libya.Footnote 186 Moreover, future DDR should take place prior to reaching a peace agreement. Finally, according to the World Bank, ‘economy, security and justice institutions should operate conjointly to prevent violence and sustaining peace’.Footnote 187 Adopting the relevant legal frameworks enables States to complete SSR and DDR.Footnote 188
VI. Conclusion
The doctrine on Business and Human Rights in Armed Conflicts is in its inception stage and many aspects necessary to understand the root causes of conflicts remain under-analysed. The situation in the former Yugoslavia exhibits patterns that continue to this day, including the creation of PMSCs by former combatants and the recruitment of current and former combatants. Such patterns contribute to the intensity and length of armed conflicts and crimes perpetrated therein. Three decades later, similar trends can be observed in Libya, the Central African Republic, Syria, Mozambique, Ukraine and in other conflict and post-conflict societies.
States have the obligation to uphold the fundamental principles contained in the UN Charter, notably, ‘to maintain international peace and security, and to that end: to take effective collective measures for the prevention and removal of threats to the peace’.Footnote 189 To achieve this, it is critical to adopt integrated and interdisciplinary approaches that facilitate a sustainable peace process by addressing the socio-economic aspects of contemporary asymmetric armed conflicts and preventing the multiplication of PMSCs, which contribute to conflicts and human rights abuses. It is therefore urgent to address the root causes of the privatization of wars and adopt relevant measures, starting by questioning the efficiency of the international sanction regime. Indeed, as the Secretary General noted in 2000, ‘the existence of a sanctions regime almost inevitably transforms an entire society for the worse’;Footnote 190 and yet, in recent years the use of all types of international sanctions have proliferated, often reportedly leading to high-levels of corruptionFootnote 191 and producing the perverse effect that those targeted by the sanctions often profit from them through black market activities. Therefore, sanctions regimes must be re-defined to better target those who have power and those who rise to the top of the socio-economic ladder as a result of sanctions.
Furthermore, neither domestic nor international law has been able to adequately address the exploitation or monopolization of resources by non-State and/or corporate actors operating in armed conflict. These (frequently transnational) crimes can generate considerable negative impacts on democratic institutions and the financial resources of affected States and their societies. It is therefore necessary to reflect upon whether (international) law needs to adapt to address the new forms of criminal activities and actors, and whether a clear legal definition of economic crimes would be timely.
Additionally, in securing peace or transitioning from conflict, there is often a perceived tension between justice and security on the one hand, and measures (such as amnesties) that facilitate DDR and SSR and arguably strengthen or secure peace itself, on the other. While this is a political dilemma,Footnote 192 the role and negative impacts of external actors such as foreign or newly legitimized PMSCs must be considered and addressed as part of peace negotiations and, ultimately, of transitional justice processes.Footnote 193
The UN Open-ended Intergovernmental Working Group on PMSCs must consider these factors in developing its regulatory instrument for PMSCs. If the IGWG is to produce an international legal framework, it must address the root causes of the privatization of conflicts and the patterns of ‘producing and recruiting’ former combatants as PMSC employees. It must also address the transformation of criminal actors operating in armed conflict into legitimate private military and security companies – the legal vacuum that perpetuates armed conflict cannot continue.
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