Different Logics of Security Privatization: MNCs vs. the State as Financier

• In Event: Technology and Public-Private Relations

Abstract

In the developing world, who provides security for whom, in return for what, and with what level of accountability? This paper helps us answer these questions by systematically analyzing security choices of multinational corporations (MNCs), a critical actor in developing economies and “security assemblages” (Abrahamsen and Williams 2010). The paper develops and applies a new conceptual framework for approaching security choices, drawing on and adding to the literature on security privatization. It highlights the tradeoffs confronting MNCs as security financiers, thereby moving beyond the current paradigm that has been centered on one type of security privatization: states’ hiring private security companies. In fact, another important security privatization logic is the financing of public security forces by MNCs, a crucial security financier: MNCs consistently rely on and directly finance public security forces for the security of MNC infrastructure and operations, while also consistingly financing more private security than states.

Previous studies describe security for MNCs, but within the broader paradigm of state-financed private security (e.g., Avant 2007, Abrahamsen and Williams 2010, Haufler 2010, Avant and Haufler 2012). Some scholars have observed that public security forces financed by MNCs are less responsive to MNCs relative to private security companies (Perret 2012), but without analyzing the differences between MNC and state realities in the choice between public and private security providers.

Drawing on examples from Africa and Latin America, this paper developes a systematic framework for understanding the different tradeoffs confronting MNCs as opposed to states when choosing between public and private security providers. For both states and MNCs, relying on public forces enhances the breadth and legitimacy of the security functions performed. However, the rest of the cost-benefit equation differs across the two financiers. As already analyzed extensively in the security privatization literature, states balance the breadth and legitimacy of public forces against the efficiency of hiring private companies, largely due to the labor flexibility that comes with private security contracts.

In contrast, as this paper argues, for MNCs, labor flexibility is present regardless of whether a corporation hires private security or signs a “memorandum of understanding” (MOU)—that is, an agreement with domestic public security forces for security services in exchange for MNC financial and other material support. Instead, a central tradeoff for MNCs (and not for states) is that between responsiveness, on one hand, and reduced responsibility for abuses, on the other, as follows. Because public security forces answer not only to the MNC but also to the state, they may neglect or be slower to respond to MNC security needs (lower responsiveness). Yet public forces’ dual responsibility also can prove attractive for MNCs: abuses committed by domestic public forces during security operations are less directly attributed to the MNC relative to any abuses by a private security company hired by the MNC. This buffer can help protect MNCs’ human rights reputations. The paper examines how MNCs negotiate these tradeoffs, based on secondary research and data from the author’s interviews with public and private security personnel and representatives of MNCs with knowledge about security contracts and MOUs.

Author

• Maiah Jaskoski, Northern Arizona University