Ironically, the comparison with the East India Company was made by Tim Spicer, the head of Aegis, which holds the largest private military contract in Iraq, in a speech to the Royal United Services Institute. (audio link)
Just as the East India Company had its roots in the decline of the Mughal Empire, so the modern private military industry has it roots in the existence of weak resource-rich African states in the 1990s.
Spicer himself was recruited into the industry by Simon Mann and Tony Buckingham, the man who began the modern corporate mercenary era by engaging South Africa’s Executive Outcomes to secure Angolan oilfields for his firm Heritage Oil in 1993.
Buckingham’s business methods were best described by Canadian journalist Madelaine Drohan in her book, Making a Killing:
Tony Buckingham had been making a practice of introducing Executive Outcomes to weak and unstable governments in need of armed support. These governments often hired the mercenaries to retake prime resource areas in their countries – diamond mines in particular – from rebel forces. Once these areas were back in a government’s control, mineral concessions were awarded to multinational corporations. When it was revealed that some of these corporations were associated with Buckingham, he was accused of employing armed force to acquire mineral riches, much as the imperial chartered companies had done a century before.
I picked up some of the implications for Iraq in an antiwar.com article last year:
Buckingham is today a director of Heritage Oil, which holds an oil concession in Iraqi Kurdistan, certainly a prime resource area. This contract is one of a number of deals that are currently the subject of a dispute between the Kurdish regional government and the central authorities in Baghdad.
Significantly, Spicer has pointed to an increased role for private military companies in protecting the oil industry.
"I don’t subscribe to the view that there is a civil war going on, but if the coalition left it could very easily disintegrate into one," he told The Guardian recently. "The Iraqi security forces are not ready to
take control. And therefore there would be a very significant increased role for private security – protecting critical infrastructure like oil, power station
and water supplies, otherwise the insurgents will blow them up."
Spicer’s record suggests that there is a real danger that U.S. sponsorship
of his company may bring the methods of African resource wars to the new Iraq.
That prediction was brought closer this week, when Heritage received a production license from the Kurdish Regional Government.
A U.S. Embassy official on Thursday said the independent action by the Kurds was "not very helpful."
Kurds are basing the agreements on a regional Kurdish hydrocarbon law
and that law still needs to be married up with a federal hydrocarbon
law," said the official, who spoke on condition of anonymity because of
the sensitivity of the issue.
"The real question is why would any
company be willing to invest significant capital in a deal that would
likely be at some point subject to challenge within the Iraqi courts,"
the official added. (Canadian Press)
That question takes on a different complexion when the company involved is Heritage Oil, as the Financial Times report suggests:
Mr Buckingham was once instrumental in the hiring of Executive
Outcomes and Sandline, two private security companies, by the
governments of Sierra Leone and Angola, which defeated rebels in their
The Heritage founder has proved adept at making deals
in hostile environments. Heritage not only has interests in Russia and
Oman, but is also involved in exploration and development in the Great
Lakes region bordering Congo and Uganda.
Industry sources said
the status of Heritage in Iraq could be boosted because of Mr
Buckingham’s connection to Tim Spicer, who ran Sandline and whose
company Aegis provides security services to the US government in Iraq. (FT.com)
It’s worth noting that the Great Lakes oilfields have recently been the cause of border tensions between Uganda and the DR Congo.
On August 3, the Congolese army
killed British oil contractor Carl Nefdt in a pre-dawn raid on a barge
operated by Canada’s Heritage Oil Corp., one of two companies looking
to exploit oil in the wider Albertine Graben.
The Congolese claimed the barge was on their side of the lake. The Ugandans say that is not true. (Daily Monitor via MONUC.org)
Further incidents occured on September 24:
The UN mission in DR Congo, MONUC, said Tuesday that there had been
"two separate incidents" on Monday at Lake Albert, a region where oil
was recently discovered.
"There was a firefight on Monday
afternoon on Lake Albert in which six (Congolese) were killed and five
were wounded," said MONUC’s military spokesman Gabriel de Brosses.
De Brosses said the dead included a Congolese soldier, two other men, two women and a child.
to witnesses speaking to the UN-backed Okapi radio, eight Ugandan
soldiers on a motorised dinghy approached a civilian boat carrying
around 40 passengers and opened fire after two Congolese soldiers
aboard refused to give up their weapons.
A Ugandan army spokesman
said earlier that two Congolese soldiers and one Ugandan soldier had
died in a clash in Ugandan waters of the lake, involving a barge
belonging to Canada’s Heritage Oil Corp.
But Heritage said its vessel was not involved.
said its vessel was "within Ugandan waters in Lake Albert in the
process of lifting cables to mark the completion of a seismic survey"
when a UN patrol boat detained the ship and its crew.
"This was a
routine check, not hostile, and there was full cooperation. After a
short interview at shore, the vessel and crew were released and
returned to base in Uganda," a statement said.
The clash between
border forces was a "separate, unrelated, isolated incident," it added.
"No employees or sub-contractors of Heritage were involved."
company challenged a UN official, who told AFP the oil exploration
vessel was escorted out of "Congolese waters" to "avoid increasing
tensions" between the two nations and "to ensure the crew’s safety."
a second episode, according to the UN, Uruguayan soldiers belonging to
MONUC discovered the Heritage vessel on the DR Congo side of the lake
and escorted it to a Congolese border town, according to Michel
Bonnardeaux, MONUC spokesman for civilian affairs. (AFP)
Uganda’s Sunday Monitor had this to say about the situation in August:
After the Uganda-DRC standoff, Heritage appears to have
emerged stronger. Sources say it is now getting better cooperation from Joseph
Kabilaâ€™s government (in the face of threats by Uganda to re- enter). Before
this, Heritage had made it publicly known that Kinshasa was at best dilly
dallying about activating the exploration concession agreement it signed with
Kinshasa. Think about this. (Ocnus.net)
Could Iraq’s oil stand-off go the same way?