Two Flawed Triumvirates Seek to Undermine Western Europe

Ultra Liberals Disguised as Capitalists

On one hand, we observe Obama peddling a socialist manifesto ignoring the reality of global sectarianism, energy imperialism and economic warfare while pretending to push a capitalist agenda to disguise his ultra-liberal policies. Obama’s arguments that he supports capitalism and democracy (the rule of the majority) are reductio ad absurdum if one accepts that capitalism is engineered for inequality and fails to function if it is expected to operate alongside a belief that within a system that rewards risk, innovation and merit that all people can be equal and all opinions accommodated. On his flanks are Merkel in Germany and the South American liberation theologian in the Vatican.

These three are not overtly aligned but each with a significant power base and influence are pushing the same concepts – all of which are detrimental to Western interests and influence and the ultimate outcome of whose policies, if allowed to succeed, can only place the West at the mercy of more martial and aggressive regimes.

Weakness Masquerading as Strength

Human nature does not change quickly – these alleged students of the human condition wish us to take a path that will only result in our demotion globally to mere slaves of external events and concepts, rather than masters of our destiny. It puts us on a path of inevitable identity and cultural destruction.

Our opponents do not struggle with such issues. They hold a set of beliefs which they pursue relentlessly with a vigour that leaves no room for dissent. How can one be expected to accept a compromised position that weakens our ability to defend our beliefs in the face of such ideologues and fanaticism.

On the other hand Obama et al. – like all of their persuasion – seek to rule by the consensus of the lowest common denominator. This results in the usual liberal conundrum – perpetual inaction or at the very least confused, misguided and misdirected action – generally too late to influence events.

The “Might is Right” Misfits 

The opposing trio, led in theory by the bully boy Putin cosy in his arrangements with Hassan Rouhani (Iran) and Xi Jinping (China), are resolutely opposed to a progressive agenda and firmly united in their anti-American sentiment. They possess a clear set of focussed short term objectives that play to all the basic human emotions – nationalism, aggression and a clearly identifiable common enemy to unite against – in this case two – ISIS a form of radical Islam (I do not denote it as “the” form of radical Islam as Iran is the Sh’ia version of the ISIS Sunni form) and of course the USA.

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The former are offering a loose set of vague promises of future peace, prosperity and universal brotherhood based on complete sacrifice by the most powerful and the most comfortable nations – financially and politically – all the while eroding the cultural identities and traditional values of those constituencies they allegedly represent.

The real power lies in the “Might is Right” alliance and it is that challenge that needs to be addressed by the next US administration, the Conservatives in the UK and the other realistic member states of the EU and Eastern Europe.

The Political Landscape in the West

Obama and the Democrats have 14 months left in office before a generation in the political wilderness. Merkel is riding a wave of nauseating self-applause regarding her disastrous refugee policies and in the spirit of classic Teutonic arrogance continues to use the very federal institutions that were created in the EU to protect against historical German aggression and bullying to push the German agenda and harass the weaker EU nations.

When the UK inevitably decides that enough is enough and leaves the EU it will create at last a second lever of power in Western Europe. The path is clear for the Conservatives to take the initiative on this long held wisdom as the only viable opposition – the Labour Party – is now led by the divisive Corbyn, a figure of contempt for many in his own party, a thinly disguised Marxist and terrorist apologist.

Papal Hand-Wringing Hides Classic Self-Interest

Pope Francis is simply a sideshow to fill a few minutes at the end of the news segments with his appeals that are attractive to the billions of Catholics in developing South America, Asia and Africa. The Catholic church having lost its foothold in its traditional power base after decades of financial and sexual abuse scandals must now do what it does best – pretend to champion the poor in order to maintain its relevance and more importantly its coffers.

Whether the Pope realises it or not, his rhetoric is only a tool to keep the institution relevant to its current flock of poverty stricken less educated members and contributors to whom religion is always a salve in their world with few comforts or allies.

Pathetic Justification of Obama’s Foreign Policy Free-Fall

Yesterday Obama delivered a “why can’t we all just get along” plea at the United Nations General Assembly in the spirit of the most self-deluded, self indulgent, unrealistic antics of the 60s “love and peace to all men, women and the gender neutral” movement. Obama imposed forty minutes of nonsensical rationalisation for inaction and justification, informed by hindsight, for the train wreck that is his administrations foreign policy outcomes.

He sees a world of “equals” albeit that some will be more “equal” than others. A world where a centrally based well armed unelected power – the United Nations – will “implement” policy at a global level despite its failure to do so on umpteen occasions in the past and without an awareness apparently of the veto that his main opponents possess at that forum.

Perpetual Flux & Cultural Abandon

He envisages the first world in a state of perpetual flux and cultural abandon – welcoming countless un-vetted refugees as “brothers and sisters” and granting every seemingly minority view a status equalling that of the majority. Regardless of the prevailing “mood” of the populace in our countries we are to be forced to allow every refugee, asylum seeker or economic migrant to choose our locale for their new start and to be pleased.

Many of these “travellers” are neither Syrian or from conflict zones. Those that are, have in the main, been created by US foreign policy disasters but the bill for these adventures is being picked up in general by Western Europe and in particular the populations of the United Kingdom, Germany and Sweden whose social structures and rampant political correctness are so attractive to these “travellers”.

However, Obama has saddled his own nation with a similar version of unbridled immigrant access from Mexico and South America.

Breathtaking Paradoxes

He notes that “democracy”, in his view, will and should take different forms in nations across the globe as it takes account of local “cultural” variations, religious preferences and regional ethnic themes. Failing it would seem to appreciate that his administration and he himself personally have done all they can to undermine these local variations in his own nation and in Western Europe.

Clearly, with a sideways glance at irony his speechwriters then ignored the juxtaposition of his comments regarding capitalism beside what amounted to a socialist policy document.

“The commitments we’ve made to the Sustainable Development Goals speak to this truth. I believe that capitalism has been the greatest creator of wealth and opportunity that the world has ever known. But from big cities to rural villages around the world, we also know that prosperity is still cruelly out of reach for too many. As His Holiness Pope Francis reminds us, we are stronger when we value the least among these, and see them as equal in dignity to ourselves and our sons and our daughters.”

A Legacy of Failure & Betrayal

Obama stands atop a pile of the corpses of US veterans, coalition partners and local militia’s whose past efforts he has squandered or current efforts left unsupported via his administrations stuttering hesitancy. Obama has presided over a foreign policy free-fall that has seen countless Middle Eastern and North African bombed-tortured-enslaved-persecuted-murdered-drowned civilians, led Europe to a state of cultural collapse in the face of unhindered economic migration, and seen factions across the globe create allegiances that are firmly polarised across religious and sectarian lines.

The lampoonish figure of this man who is responsible for these outcomes lecturing us like a Mandelaesque wannabe all the while waving a CND flag while allowing Iran access to the technologies for a nuclear weapon, clutching his pro-choice card and popping dandelions in the barrels of jihadi AK-47s is all the more aggravating as he has the audacity to look as smug as his co-conspirators while pontificating. Completely ignorant of his own legacy of failure.

Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity. At best this is what Obama and Merkel and Francis are guilty of.

Yesterday Obama delivered a “why can’t we all just get along” plea at the United Nations General Assembly in the spirit…
Posted by TMG Corporate Services on Tuesday, September 29, 2015


Misguided Faith in Failed Institutions

“It is this international order that has underwritten unparalleled advances in human liberty and prosperity. It is this collective endeavour that’s brought about diplomatic cooperation between the world’s major powers, and buttressed a global economy that has lifted more than a billion people from poverty. It is these international principles that helped constrain bigger countries from imposing our will on smaller ones, and advanced the emergence of democracy and development and individual liberty on every continent.”

Obama spoke these words as fact – the test however is “time” and to put forward this thesis as fact bears no witness to the truth that since 1945 the “institutions” which he refers to are just seventy years old and are not mature enough or tested enough to offer, as he does, as the undisputed “global solution” going forward.

In fact on countless occasions the economic, social and military concepts of co-operation and mutual self interest and “self-evident truths” – a phrase he borrowed from a Constitution which he has shamelessly trampled on since his inauguration – have crumbled in even the most minor of crises.

We are globally more unequal now than we have been at any point in the past and all the credible studies show this is to continue and not reverse.

Add to that climate change, population growth, failures in disease control, economic uncertainty and global regional conflicts and one wonders how Obama can expect those who have in the previous centuries suffered and dragged themselves from these deprivations are simply going to mortgage their nations and families futures to those who have either abandoned or destroyed theirs in their own countries.

A Race To The Lowest Common Denominator

These are facts and not ultra-liberal fiction – Obama views “equality” not as the improvement of the conditions of those who are already comfortable but a race to the lowest common denominator where those in the first world move downwards to joined those in the second and third world as they rise upwards.

It is a dreamers concept where the hodge-podge of argument and rationalisation for such a policy can only be realistic in the mind of a egocentric with a mood of entitlement.

Misquoting History

“The people of our United Nations are not as different as they are told. They can be made to fear; they can be taught to hate—but they can also respond to hope. History is littered with the failure of false prophets and fallen empires who believed that might always makes right, and that will continue to be the case. You can count on that. But we are called upon to offer a different type of leadership—leadership strong enough to recognize that nations share common interests and people share a common humanity, and, yes, there are certain ideas and principles that are universal.”

His reference to reasons for the failure of historical empires and the cherry picking of examples to support his argument makes assumption that while he is arguing against holding strong values and opinions that the number of empire’s that fell because they stuck rigidly to their beliefs is matched by those that fell by allowing the utter dilution of the very principles that made them great – most notably the greatest of them all – the Roman Empire. Obama is no student of history.

But Obama was never one for digging deep to rationalise his opinions – he after all represents a minority view of sweeping generalisations but considers himself above reproach with respect to minority affairs. A worn out notion but one which still seven years on he pulls out of his single bag of tricks to push down any opposition as radical, racist, extreme or all three preferably – completely undermining the very “message” that he purports to be the on-high appointed courier for – namely tolerance.

The Erosion of US Prestige

He has failed to grasp and those willing nodders around him have also left unobserved the awkward fact that US influence and prestige has eroded globally over the last seven years to a point where former stalwart allies and client states have sought or are seeking options elsewhere.

In May 2014 we paraphrased coverage of Obama’s whistle stop tour of the East that stated:

America’s allies are nervous. With Russia grabbing territory, China bullying its neighbours and Syria murdering its people, many are asking: where is Globocop? Under what circumstances will America act to deter troublemakers? What, ultimately, would America fight for?

In the intervening seventeen months we have been given the answer: America – under its current leadership will fight for nothing.

Filling the Vacuum

Russia is still grabbing territory but has now been joined by China and Iran who have observed – in the spirit of Chamberlain – Obama’s lack of firm intervention with respect to both the de-stabilisation of Eastern Ukraine and the annexation of the Crimea by Russia.

Obama offers the “success” of economic sanctions as the justification of not wielding a stronger stick. The uncomfortable fact is that economic sanctions have led Iran to negotiate a pro-Iranian nuclear deal which the misguided President still believes is verifiable. And pushed Russia to further expansion as a direct result of US actions. Clearly Putin is protecting Assad who has vehemently opposed the construction of the Qatari gas pipeline which actions protects Russia as the key supplier of that resource to Western Europe and the foreign currency he so badly needs.

To quote Global Research: “A battle has raged over whether pipelines will go toward Europe from east to west, from Iran and Iraq to the Mediterranean coast of Syria, or take a more northbound route from Qatar and Saudi Arabia via Syria and Turkey. Having realized that the stalled Nabucco pipeline, and indeed the entire Southern Corridor, are backed up only by Azerbaijan’s reserves and can never equal Russian supplies to Europe or thwart the construction of the South Stream, the West is in a hurry to replace them with resources from the Persian Gulf. Syria ends up being a key link in this chain, and it leaned in favour of Iran and Russia; thus it was decided in the Western capitals that its regime needs to change. The fight for democracy is a false flag thrown out to cover up totally different aims.”

In January 2015 in our post “Risks Ahead in the South China Sea” we noted that China continues to bully in the region around the Spratly and Paracel Islands.

Syria in the intervening period, along with Libya, is a failed state witness to destruction, genocide and a regional humanitarian crisis on a scale not seen since the 1940’s. The outcome of Obama inaction is that the isolated Assad and the vacuum created by lack of Western support for a lesser evil in the face of ISIS has meant that Russia, China and Iran have moved to a position of unassailable control in Syria, Iraq and Lebanon.

Iran has been allowed to position its Sh’ia militias all across non-KRG Iraq and embolden its proxy Hezbollah in Lebanon and Golan.

Putin’s Vision of the Middle East

Putin has a vision of a wall of Iranian-dominated, Russia-friendly, anti-American states stretching from western Afghanistan through Iran, Iraq, Syria and Lebanon to the Mediterranean Sea. And he’s well on his way to achieving it, thanks to the nuclear deal with Iran, US military hesitancy in the region and, now, an open alliance between Russia, China, Iran, Iraq’s Shia militias, Hezbollah and the forces of the Assad regime.

That wall would not only keep out the United States, it would isolate the Kurds and overshadow the last US clients in the region, including Israel who has already moved to improve relations with Moscow and receive assurances with respect to Moscow and Beijing’s intentions as they commence a military buildup based around the port of Tartus and the Assad heartland of Damascus.

At the time (May 2014) the following was noted of Obama’s questioning by the media:

The answer to this question matters. Rogue states will behave more roguishly if they doubt America’s will to stop them. As a former head of Saudi intelligence recently said of Vladimir Putin’s land grab in Ukraine: “While the wolf is eating the sheep, there is no shepherd to come to the rescue.” Small wonder that Barack Obama was asked, at every stop during his four-country swing through Asia, how exactly he plans to wield American power. How would the president respond if China sought to expand its maritime borders by force? How might he curb North Korea’s nuclear provocations? At every press conference he was also quizzed about Ukraine.

None of these legacy issues have been materially addressed by Obama and Co. in the intervening months and yesterdays speech suggests that will be the case until November 2016 – for that speech naively pleaded for reasonable actions from unreasonable people as the solution to these problems.

Indifference in the Audience

The sceptical faces of many at the Assembly was not just made up of the usual suspects but many formerly “standing ovation” members when any US President previously delivered a keynote address at a time of great import. The lack lustre applause at the appointed times throughout the cringe worthy oratory was also notable and telling.

Obama’s own rationale and metrics can equally be applied to the foreign policy failures that he has created and presided over. In trying to cater to everybody he caters to nobody and undermines not emboldens the principles that he allegedly finds so appealing. His removal from office by the expiry of his abused mandate (making his own laws via the Supreme Court / signing Executive Orders on a weekly basis / failure to consult the “Voice of the People” – Congress) or impeachment cannot happen too quickly for the West. An abrogation of responsibility, in favour of unproven and previously failed strategies, on the scale of Obama’s has not been witnessed before and hopefully will never be again.

The Geopolitics of the Yangtze River: Developing the Interior

Analysis

Editor’s Note: This is the first piece in a three-part series on the geopolitical implications of China’s move to transform the Yangtze River into a major internal economic corridor. Part one provides a broad overview of the geography and history of the Yangtze River region and its role in shaping Chinese politics and statecraft. Part two examines the strategic river city of Wuhan, and part three considers the political economy of Beijing’s push to develop the Yangtze River corridor. 

As the competitive advantage of low-cost, export-oriented manufacturing in China’s coastal industrial hubs wanes, Beijing will rely more heavily on the cities along the western and central stretches of the Yangtze River to drive the development of a supplemental industrial base throughout the country’s interior. Managing the migration of industrial activity from the coast to the interior — and the social, political and economic strains that migration will create — is a necessary precondition for the Communist Party’s long-term goal of rebalancing toward a more stable and sustainable growth model based on higher domestic consumption. In other words, it is critical to ensuring long-term regime security.
The concept of developing the interior is rooted in the dynastic struggle to establish and maintain China as a unified power against internal forces of regional competition and disintegration. Those forces arise from and reflect a simple fact: China is in many ways as geographically, culturally, ethnically and economically diverse as Europe. That regional diversity, which breeds inequality and in turn competition, makes unified China an inherently fragile entity. It must constantly balance between the interests of the center and those of regions with distinct and often contradictory economic and political interests.

Currently, the Party’s stated intent is eventually to achieve greater socio-economic parity between coastal and inland regions, as well as between cities and the rural hinterland. But Beijing also recognizes that underlying broad categories like “inland,” “central” and “western” China is a complex patchwork of regional differences and inequality. Mitigating these differences will require more varied and nuanced policies.
Against this backdrop, the central government has targeted the Yangtze River economic corridor — the urban industrial zones lining the Yangtze River from Chongqing to Shanghai — as a key area for investment, development and urbanization in the coming years. Ultimately, the Party hopes to transform the Yangtze’s main 2,800-kilometer-long (1,700-mile-long) navigable channel into a central superhighway for goods and people, better connecting China’s less developed interior provinces to the coast and to each other by way of water — a significantly cheaper form of transport than road or railway. By positioning this “second coastline” to become one of the nation’s new economic cores, Beijing seeks to build what no previous dynasty could: a truly unified Chinese economy.

The Yangtze as a Core

The Yangtze River is the key geographic, ecological, cultural and economic feature of China. Stretching 6,418 kilometers from its source in the Tibetan Plateau to its terminus in the East China Sea, the river both divides and connects the country. To its north lie the wheat fields and coal mines of the North China Plain and Loess Plateau, which unified China’s traditional political cores. Along its banks and to the south are the riverine wetlands and terraced mountain faces that historically supplied China with rice, tea, cotton and timber. The river passes through the highlands of the Yunnan-Guizhou Plateau, the fertile Sichuan Basin, the lakes and marshes of the Middle Yangtze and on to the trade hubs of the Yangtze River Delta. Its watershed touches 19 provinces and is central to the economic life of more people than the populations of Russia and the United States combined. The river’s dozens of tributaries reach from Xian, in the southern Shaanxi province, to northern Guangdong — a complex of capillaries without which China likely would never have coalesced into a single political entity.
The Yangtze, even more than the Yellow River, dictates the internal constraints on and strategic imperatives of China’s rulers. The Yellow River may be the origin of the Han Chinese civilization, but on its own it is far too weak to support the economic life of a great power. The Yellow River is China’s Hudson or Delaware. By contrast, the Yangtze is China’s Mississippi — the river that enabled China to become an empire.
Just as the Mississippi splits the United States into east and west, the Yangtze divides China into its two most basic geopolitical units: north and south. This division, more than any other, forms the basis of Chinese political history and provides China’s rulers with their most fundamental strategic imperative: unity of the lands above and below the river. Without both north and south, there is no China, only regional powers. Only after the Qin captured the Yangtze’s three primary regions — the Upper, Middle and Lower stretches — in 221 B.C., thereby gaining access to the southeast coast, did “China” as a single unit come into being. In the two millennia since, the Yangtze has continued to mark the boundary between kingdom and empire. The constant cycle between periods of unity (when one power takes the lands north and south of the Yangtze) and disunity (when that power breaks into its constituent regional parts) constitutes Chinese political history.
If the Yangtze did not exist, or if its route had veered downward into South and Southeast Asia (like most of the rivers that begin on the Tibetan Plateau), China would be an altogether different and much less significant place. Its population would be much smaller, isolated to the southeast coast, Loess Plateau and North China Plain — the only parts of Han China where economic life does not depend on the Yangtze. The provinces of central China, which today produce more rice than all of India, would be as barren as Central Asia. Regional commercial and political power bases like the Yangtze River Delta or the Sichuan Basin would never have emerged. The entire flow of Chinese history would be different.
Three regions in particular make up the bulk of the Yangtze River Basin: the Upper (encompassing present-day Sichuan and Chongqing), Middle (Hubei, Hunan and Jiangxi) and Lower Yangtze (Jiangsu and Zhejiang provinces, as well as Shanghai and parts of Anhui). Geography and time have made these regions into distinct and relatively autonomous units, each with its own history, culture and language. Each region has its own hubs — Chengdu and Chongqing for the Upper Yangtze; Wuhan, Changsha and Nanchang for the Middle Yangtze; and Suzhou, Hangzhou and Shanghai for the Lower Yangtze. Each region has its own internal market networks, and each historically is more interested in protecting its autonomy and prosperity than uniting under the north’s control. Conquering and integrating them from the outside therefore required not only overwhelming military power — historically, northern China’s advantage — but also complex bureaucratic and internal security apparatuses. Finally, it required a transport and communications infrastructure comprehensive enough to make the exercise of central authority over vast distances and diverse populations feasible.
Between 1949 and 1978, the Communist Party expanded those networks and laid that infrastructure with brutal efficiency. In many ways, China was more deeply united under Mao Zedong than under any emperor since Kangxi in the 18th century. After 1978, the foundations of internal cohesion began to shift and crack as the reform and opening process directed central government attention and investment away from the interior (Mao’s power base) and toward the coast. Today, faced with the political and social consequences of that process, the Party is once again working to reintegrate and recentralize — both in the sense of slowly reconsolidating central government control over key sectors of the economy and, more fundamentally, forcibly shifting the economy’s productive core inland. The first phase of this process will be driven in large part by urbanization along the Yangtze River corridor, especially in the provinces that make up China’s traditional Upper and Middle Yangtze regions.

Politics and Economy of the Yangtze

Today, the Yangtze River is by far the world’s busiest inland waterway for freight transport. In 2011, more than 1.6 billion metric tons of goods passed through it, representing 40 percent of the nation’s total inland waterborne cargo traffic and about 5 percent of all domestic goods transport that year — up 250 percent from 2004. Over the last decade, dramatic increases in waterway freight traffic have been seen in some provinces along the Yangtze River corridor, such as Anhui (840 percent, to 364 million tons), Chongqing (640 percent, to 117 million tons) and Hunan (500 percent, to 179 million tons). By 2011, the nine provincial capitals that sit along the Yangtze and its major tributaries had a combined gross domestic product of $1 trillion, up from $155 billion in 2001. That gives these cities a total wealth roughly comparable to the gross domestic products of South Korea and Mexico.
This growth, since roughly 2003, has been underpinned by a massive expansion in centrally allocated fixed-asset investment into the interior, and specifically to those parts of the interior Beijing considers most viable as potential alternative or supplemental industrial bases to the southeast coast. Unsurprisingly, areas with ready access to the Yangtze River system have been targeted as cores of future inland urbanization. In part, this is because cities like Chongqing and Wuhan already possess well-developed urban industrial infrastructures, the legacy of Mao’s intensive focus on inland industrialization. This legacy in turn gives these cities comparatively more influence and leverage than less developed parts of the interior when it comes to extracting central government financial support. Finally, cities along the Yangtze benefit from geography: Transport by road is roughly 30-35 times more expensive than transport by water, and rail is 3-3.5 times as expensive, meaning that cities without direct access to the Yangtze are inherently less viable as manufacturing and trade hubs.
Investment in further industrial development along the Yangtze River reflects not only an organic transformation in the structure of the Chinese economy but also the intersection of complex political forces. First, there is a clear shift in central government policy away from intensive focus on coastal manufacturing at the expense of the interior (the dominant approach throughout the 1990s and early 2000s) and toward better integrating China’s diverse regions into a coherent national economy. But how that policy shift plays out on regional, provincial and local levels is shaped less by dictates from Beijing than by the political maneuvering of local and provincial governments for central government favor. Access to navigable waterways enables the cities of the western and central stretches of the Yangtze River to lobby more effectively for credit and tax rebates that might otherwise have gone to less competitive, landlocked provinces.
Investment in the interior accelerated rapidly in the wake of the 2008-2009 financial crisis, when the sudden evaporation of external demand revealed just how fragile and imbalanced China’s economy had become. Thirty years of export-oriented manufacturing centered in a handful of coastal cities generated huge wealth and created hundreds of millions of jobs. But it also created an economy characterized by deep discrepancies in the geographic allocation of resources and by very little internal cohesion. By 2001, the economies of Shanghai and Shenzhen, for instance, were in many ways more connected to those of Tokyo, Seoul and Los Angeles than of the hinterlands of Sichuan and Shaanxi provinces. For most of the 1990s and 2000s, this lack of cohesion was viewed as an unfortunate but necessary and temporary byproduct of an economic model that was otherwise doing its job. After the 2008-2009 financial crisis, internal economic disunity — like the growth model it embodied — became a social and political liability.
The foundation of this model was an unending supply of cheap labor. In the 1980s, such workers came primarily from the coast. In the 1990s, when coastal labor pools had been largely exhausted, factories welcomed the influx of migrants from the interior. Soon, labor came to replace coal, iron ore and other raw materials as the interior’s most important export to coastal industrial hubs.

By the mid-2000s, between 250 million and 300 million migrant workers had fled from provinces like Henan, Anhui and Sichuan (where most people still lived on near-subsistence farming) in search of work in coastal cities.

This continual supply of cheap labor from the interior kept Chinese manufacturing cost-competitive throughout the 2000s — far longer than if Chinese factories had only had the existing coastal labor pool to rely on. But in doing so, it kept wages artificially low and, in turn, systematically undermined the development of a domestic consumer base. This was compounded by the fact that very little of the wealth generated by coastal manufacturing went to the workers. Instead, it went to the state in the form of savings deposits into state-owned banks, revenue from taxes and land sales, or profits for the state-owned and state-affiliated enterprises that controlled not only many of the major coastal factories but also the various inputs that made manufacturing possible: roads, rail and port construction; power generation; mining; and oil and natural gas. (Notably, state-owned enterprises continue to dominate heavy industrial manufacturing).
This dual process — accumulation of wealth by the state and systematic wage repression in low-end coastal manufacturing — significantly hampered the development of China’s domestic consumer base. But even more troubling was the effect of labor migration, coupled with the relative lack of central government attention to enhancing inland industry throughout the 1990s and early 2000s, on the economies of interior provinces.
Remittances from the coast kept families in the interior alive and paid for children of migrant workers to attend school, but they did little to improve the overall vitality of inland provincial economies. As a result, when the children of the first generation of migrant laborers reached working age, many of them followed their parents to the coast, where employment opportunities were far more abundant. However, unlike their parents, who had families to care for back in Henan and Sichuan, the new generation of migrants had far less incentive to one day return inland, let alone send money back. With the possible exception of a handful of inland cities (Hefei, Wuhan, Changsha and Chongqing, all of which saw marginal to moderate population growth between 2001 and 2011), the interior came to represent poverty and backwardness, a place to abandon rather than to develop.
Beijing has long understood that it will have to change that perception — and the economic and policy realities underlying it — before it can hope to address the growing structural imbalances of its current economic model. But in China, this is easier said than done. In trying to urbanize and industrialize the interior, Beijing is going against the grain of Chinese history — a multimillennia saga of failed attempts to overcome the radical constraints of geography, population, food supply and culture through ambitious central government development programs. Though its efforts thus far have yielded notable successes, such as rapid expansion of the country’s railway system and soaring economic growth rates among inland provinces, they have not yet addressed a number of pivotal questions. Before it can move forward, Beijing must address the reform of the hukou (or household registration) system and the continued reliance on centrally allocated investment, as opposed to consumption, as a driver of growth.


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The Geopolitics of the Yangtze River: Developing the Interior

Risks Ahead in the South China Sea

by John-Clark Levin & Graham Penrose, TMG Corporate Services (Intelography), January.04, 2015

MADRID –- The past year has seen a bold new round of provocations in the South China Sea, where the People’s Republic of China is trying to expand its regional hegemony. The central issue is territorial. According to the United Nations Convention on the Law of the Sea, nations can claim exclusive economic rights in waters up to 200 nautical miles off their coastline. Where these zones would overlap, claims generally go to the nearest state.

According to these principles, most of the economically vital South China Sea is shared between Vietnam, China, Taiwan, Malaysia, Brunei, and the Philippines. But China claims the Spratly islands, a rocky and unpopulated archipelago deep inside the Philippines’ exclusive economic zone (EEZ)—and the Paracel islands, a group of reefs and islands close to Vietnam.


According to Beijing, its EEZ projects from both island chains, which puts almost the entire South China Sea in Chinese hands. At stake is strategic control of sea lanes that carry an estimated $5.3 trillion in annual trade, highly lucrative fishing stocks, and promising oil and gas resources. Although most of the South China Sea’s proven reserves lie in undisputed areas, the U.S. Geological Survey estimates that about 2.5 billion barrels of oil and 25.5 trillion cubic feet of natural gas may be available around the Spratlys.

In addition to these economic incentives, the dispute is also motivated by China’s aspirations to assert itself as the preeminent power in Asia. China’s latest tactics have serious security consequences for everyone with an interest in the South China Sea. Not content to pursue its dispute through lengthy lawsuits and international arbitration, Beijing is attempting to gain an advantage by changing the “facts on the ground.”


That is, by gaining effective control over disputed areas, China can strengthen its legal position in the sense of the old saying “possession is nine tenths of the law.” If it can actively exploit the disputed zones and convince world markets to accept its claims, other nations’ legal objections will be largely moot. China is working to establish such control by a combination of unilateral resource grabs and confrontational moves against rival militaries in the region.

On January 1 of last year, China instituted new rules requiring foreign fishing vessels to obtain permits in order to fish in much of the South China Sea. The move drew criticism from Vietnam, the Philippines, and the United States, but none were in a position to force the Chinese to back down. In an excellent analysisthe following month, analyst Robert Haddick called out Beijing for pursuing a policy of “salami-slicing”.

The metaphor contextualizes the new fishing restrictions as part of a larger pattern of incremental moves that included the sudden establishment of a Chinese city on Woody Island in the Paracels in July 2012, and the declaration of an Air Defense Identification Zone over the East China Sea in November 2013. In 2014, Chinese survey vessels have reportedly been operating discreetly in the Philippines’ EEZ, likely to gain a better sense of the petroleum resources that might be available there. Beijing was clearly betting that no single step would be enough for its neighbors to risk armed conflict—but that collectively, they would achieve China’s goal of controlling the South China Sea.

In the months that followed, the salami-slicing continued. In March 2014, Chinese Coast Guard vessels turned back a pair of ships sent by Manila to reprovision Filipino troops stationed on a disputed outpost in the Spratlys. Then in May, China set up a billion-dollar oil rig unannounced in disputed waters off Vietnam, surrounded by a flotilla of protective ships from the Chinese Maritime Police Bureau.


Vietnamese vessels went out to meet them, leading to several days of vigorous clashes between the two sides, using water cannons and ramming actions. In June, Hanoi released video of a Chinese vessel ramming a Vietnamese fishing boat that soon sank. China appears not to have suffered any comparable losses. In July, China unilaterally withdrew the rig— stating that it had completed its exploratory mission — but Vietnam would have been in no position to prevent it from staying.

Then, in August, a Chinese fighter intercepted an American reconnaissance plane over the South China Sea, performing abrupt manoeuvres perilously close to the U.S. aircraft. This risked a repeat of the 2001 incident off Hainan Island where such a mid-air collision led to a diplomatic crisis after the crew of the crippled American plane was interned on Chinese soil for 11 days. Instead of sober reflection, Chinese Rear Admiral Zhang Zhaozhong exhorted his pilots: “A knife at the throat is the only deterrence. From now on, we must fly even closer to U.S. surveillance aircraft”.

This combination of brinksmanship and salami-slicing by incremental and escalating actions is dangerous indeed. The worst-case scenario, of course, is a full-on armed confrontation—but both the Chinese and their opponents realize that war would be catastrophic. Much more likely is a steady drumbeat of small grabs that pose risk to those wishing to do business in the South China Sea.

In 2012, China National Offshore Oil Corp invited foreign companies to bid on nine oil exploration blocks within Vietnam’s internationally-recognized EEZ, apparently including some areas which had already been leased out by Vietnam. While major firms like Exxon Mobil have so far avoided wading into the disputed zones, and will likely continue to do so, smaller players with less to lose have expressed interest. In comparison, around the same time, the Philippines invited bidding on two oil blocks in disputed territory, but received rather little interest.


Going forward, how oil and gas companies invest their money will send a strong signal about who is winning the struggle for the South China Sea. Those who lease disputed blocks from Vietnam or the Philippines are betting that China will ultimately bow to pressure by the United States and its allies in the region. Those who lease from China are betting that Beijing’s grabs will prove irreversible.

Whatever firms bet, there will be more provocations. Survey ships and drilling platforms can expect to be harassed by the other side, and company personnel and equipment may be endangered by the struggle going on around them. Some firms will likely hire private security vessels for protection. Although such forces would be no match for Chinese warships in an armed confrontation, their presence would make it riskier and more difficult to drive away client assets. Armed guards aboard platforms could be employed as an additional deterrent.

This poses serious risks, though—untrained private security could instigate a clash by mistake, and even a small spark in the South China Sea has the potential to escalate to international conflict. Further, the 100 Series Rules for the Use of Force, which were developed in 2013 to provide broad guidance for private maritime security companies, are intended for actions against pirates, and would not provide sound guidance for potential standoffs with state actors. For companies wishing to hire security, then, retaining only the most experienced and professional private maritime security companies must be a priority.

About John-Clark Levin is an author and maritime security expert, currently pursuing his research at Harvard University. He has written for publications such as the Wall Street JournalSouthern Economic JournalPacific Maritime Magazine, and War on the Rocks. He has lectured on the subject of private maritime security at institutions such as Johns Hopkins University, Georgetown University, the Center for Security Policy, and the U.S. Naval War College.
About Graham Penroseis the owner of TMG Corporate Services, Intelography & JGE Kinetics: Established in 1994 TMG Corporate Services serves clients in Europe, the USA, Asia-Pac and Africa providing Private Maritime Security Services; Private Military Security Services; Global Asset Tracing & Recovery; Security & Risk Management; Specialist Surveillance Services; Counter & Anti Surveillance Services; Human Intelligence (HUMINT); Open Source Intelligence (OSINT); Close Protection Services; Digital Forensics, Image Enhancement & eDiscovery and HEAT (Hostile Environment Awareness Training). JGE Kinetics sources and supplies – under license / EUC – armaments, armoured vehicles, surveillance equipment, UAV drones and military communications equipment.

About Intelography: Intelography offers subscription based access to risk profiling, threat assessments and security trends for Europe, the Middle East and Africa. Providing content and insights that allow organizations to inform the process of reacquiring, recommissioning, maintaining and protecting (physical and human) assets in conflict, post conflict or high risk areas. Content and analysis includes contributions from staff analysts, internationally recognized subject matter experts, guest contributors, content syndication from established industry observers and service providers, thought leaders, complimented by an extensive network of in country contributors (Israel, Libya, Egypt, Syria, Iraq, Afghanistan, Pakistan, India, CIS, Ukraine, Russia, the Balkans, West Africa). Subscription pricing varies according to access requirements and is offered on an ad-hoc, region specific or global access basis. Additional services include one-to-one analyst Q&A’s, workshops, consulting, and re-publication rights.

References
1. http://www.cfr.org/world/armed-clash-south-china-sea/p27883
2. http://www.eia.gov/countries/regions-topics.cfm?fips=scs
3. http://www.reuters.com/article/2014/03/06/us-china-parliament-seas-idUSBREA2512I20140306
4. http://warontherocks.com/2014/02/america-has-no-answer-to-chinas-salami-slicing/#_
5. http://world.time.com/2012/07/24/chinas-newest-city-raises-threat-of-conflict-in-the-south-china-sea/
6. http://www.nationmultimedia.com/opinion/Energy-competition-in-South-China-Sea-A-front-burn-30243078.html
7. http://globalnation.inquirer.net/100159/dnd-confirms-report-on-expulsion-of-ph-vessels-by-chinese-ships
8. http://www.nytimes.com/2014/05/10/world/asia/in-high-seas-china-moves-unilaterally.html? module=Search&mabReward=relbias%3Ar%2C%7B%221%22%3A%22RI%3A11%22%7D&_r=0
9. http://www.bloomberg.com/news/2014-06-05/vietnam-says-china-still-harassing-boats-shows-video-of-sinking.html 10. http://www.nytimes.com/2014/07/16/world/asia/chinese-oil-rig-near-vietnam-to-be-moved.html
11. http://www.bbc.com/news/world-asia-china-28905504
12. http://fas.org/sgp/crs/row/RL30946.pdf
13. http://uk.reuters.com/article/2014/08/28/uk-china-usa-military-idUKKBN0GS2M920140828
14. http://www.bloomberg.com/news/2012-06-27/vietnam-calls-on-cnooc-to-scrap-bid-to-explore-oil-off-coast-1-.html 

Thailand’s coup – a serious threat to stability in Myanmar and Cambodia

In late May 2014 the Thai military seized power in a widely anticipated coup by the hawks who have been hinting at same for some time now. This is the twelfth coup in Thailand since the end of the absolute monarchy in 1932 (BBC, 2014) and the army justified their intervention on this occasion for the need to stabilize the volatile political situation.

Thailand has been in turmoil during recent years and the already tense situation – where two sides kept rallying against or for the government – began to escalate in November 2013 when MPs approved a controversial bill which would help former Prime minister Thaksin Shinawatra avoid prison on corruption charges. The situation worsened in May 2014 when the Constitutional Court removed PM Yingluck Shinawatra from power. (BBC, 2014)

Thaksin Shinawatra & Yingluck Shinawatra
Shortly afterwards, the army stepped in and started clamping down on intellectuals and opposition, limited the freedom of speech and imposed a curfew. Western leaders criticized the coup and are closely watching what impact the situation will have on the South-East Asian region. Of particular interest is the impact on the Kingdom of Cambodia which is struggling with an influx of its citizens from Thailand, and on Myanmar, itself a former military regime. Can these emerging democracies and key players in the “sphere of influence” stand-off between China and the USA in the region, withstand the Thai crisis?

Struggling Thailand

Leader of the Thai coup, General Prayuth Chan-ocha, announced in late June that Thailand will not have free elections until October 2015. The reason why was given as “We want to see an election that will take place under the new constitution… Today, if we go ahead and hold a general election, it will lead to a situation that will return to the old cycle of conflict, violence, corruption by influential groups in politics, terrorism and the use of war weapons.” (BBC, 2014)


General Prayuth Chan-ocha

Thailand is divided internally and its economy has been struggling with slowing growth and outflows of capital (The Irrawaddy, 2014). Prior to the current political unrest, there was a need for Thailand to take action to stay competitive in the Asian market, given the emergence of other countries such as Myanmar, Indonesia and the Philippines as attractive alternative places to invest. The country, once a symbol of democracy and prosperity in the region, is now in turmoil, its intellectual elite and media live in fear and the political upheavals are impacting Thailand´s neighbors.

Exodus to Cambodia

Cambodia was hit by a huge wave of returnees. Almost 200,000 Cambodian workers in Thailand started moving eastwards once the rumor spread that the Thai junta would clamp down on illegal migrants. This led to a row between the two countries as thousands of desperate Cambodians headed for the border.

Cambodian Interior Minister Sar Kheng blamed the Thai army for the exodus and said it “must be held responsible”. (BBC, 2014) The generals defended themselves and issued a statement saying that only illegals would be targeted. The issue is not helping the already tense relations, given the legacy border issues over the area around the Preah Vihear temple in the Dangrek Mountains which led to riots and armed conflict in 2003.


Cambodian Interior Minister Sar Kheng

The fragile Cambodian democracy and the country’s economic potential are at stake. The return of ex-pat Cambodians may harm the local economy and affect border security in the disputed region.

In addition, Thai intellectuals seeking exile in Cambodia – something unimaginable a few decades ago – and who may plan to organize resistance from there against the junta places Phnom Penh in an “awkward position” (New York Times, 2014).

Economic Windfall for Myanmar

In Myanmar the government is struggling to come to terms with events in Bangkok. Myanmar which only a few years ago was home to a ruthless regime is a delicate balance of democratic aspirations assisted by foreign direct investment by China and the USA in particular in an attempt to nurture and preserve the new political climate. Events in Thailand are familiar to the Burmese in particular dictat’s curtailing the freedom of speech and the regular announcements of names of detained citizens on Thai TV.

And there are fears in Myanmar that the Thai coup will threaten their emerging freedom and destabilize the region. These fears come, interalia, from the National League for Democracy (NLD) opposition party. “I am sad to learn about the coup, it could give the government an idea,” Win Htein, a MP for NLD said (Bangkok Post, 2014). “The lessons in all this for Myanmar are plain to see. … And for whatever reason, we must not let our guards down,“ Burmese Professor Aung Naing Oo teaching in Thailand warned (ibid).


Professor Aung Naing Oo

But others are not that fearful, government MPs are generally condemning the coup saying that Myanmar – as current ASEAN chairman – will “respond soon” and “see how soon the power goes back to people”. Historically, coups in Thailand and Myanmar / Burma are different, in Thailand the army always gave back the power, while in Burma the coup of 1962 meant decades of tyranny.

Win Htein (right)

The Thai coup is likely to lead to Myanmar competing for foreign direct investments previously ear marked for Thailand before the uncertainty. Myanmar has potential in gas and oil development and investors will prefer projects there if Thailand remains unstable – the additional capital investment in addressing the infrastructural challenges in Myanmar may seem more palatable than an all or nothing bet on Thailand not descending into serious civil unrest.

International Response

Criticism of the coup by Western governments and Australia is not helping Bangkok. (The Irrawaddy, 2014). Elsewhere the response has been muted and benign, most Western governments are focused on events in the Middle East and Eastern Europe.  

In Myanmar politicians are not worried about regional instability. “I am more worried about people sabotaging the peace process (between the government and ethnic groups),” Burmese MP Ye Myint told Bangkok Post. (Bangkok Post, 2014)

In Cambodia, the government is taking as diplomatic a stance as it can, without seeming weak, and hoping that the more sinister predictions regarding the Thai military and their designs on the disputed border regions, are avoided

Sentiment in Thailand is mixed but most is negative “I think there will be problems in this country for a generation or two,” a business owner in Bangkok was quoted as saying “I would like to get out of the country safely,“ he added. (New York Times, 2014)

Is this the end game for Thai democracy, a potential spark to ignite a wider Thai / Cambodian conflict to allow the Thai military divert attention from internal issues or a motivator for similar minds in Myanmar to return that nation to a military administration? Or is it just another intermezzo in the decades of peculiar Thai democracy and South East Asian politics in general.
Sources

BBC NEWS. (2014) Thai army promises elections in October 2015. [Online] Available from:
[Accessed: 29th September 2014].

BBC NEWS. (2014) Cambodia ramps up criticism of Thailand´s junta. [Online] Available from: http://www.bbc.com/news/world-asia-27898652
[Accessed: 29th September 2014].

BBC NEWS. (2014) Why is Thailand under military rule? [Online] Available from: http://www.bbc.com/news/world-asia-25149484
[Accessed: 29th September 2014].

BOOT, W. (2014) Thailand´s Coup May Affect Burma´s Oil and Gas Sector. The Irrawaddy [Online] 6th June. Available from: http://www.irrawaddy.org/business/thailands-coup-may-affect-burmas-oil-gas-sector.html [Accessed: 29th September 2014].

CNN (2014) Cambodian migrant workers flee Thailand [Online] Available from: http://edition.cnn.com/2014/06/18/world/cambodia-thailand-migrants-border/index.html
[Accessed: 29th September 2014].

FULLER, T. (2014) In Thailand, growing intolerance for dissent drives many to more authoritarian nations. New York Times. [Online] 6th June. Available from: http://www.nytimes.com/2014/06/07/world/asia/in-thailand-a-growing-intolerance-for-dissent.html?_r=0 [Accessed: 29th September 2014].

VERBROGGEN, Y (2014) Myanmar stunned by coup, and they should know. Bangkok Post. [Online] 1st June. Available from: http://www.bangkokpost.com/news/investigation/412921/myanmar-stunned-by-coup-and-they-should-know [Accessed: 29th September 2014].

Dispelling the "WILD WEST" myth surrounding Private Military Companies

Graham PenroseGraham PenroseOwner at TMG Corporate Service… (more) 

The challenges in setting up a Private Military Company or when a firm is being employed as Privately Contracted Armed Security Personnel are more associated with the international compliance requirements rather than national ones, as the expectations are set and monitored by international bodies rather than by sovereign states – in order to avoid problematic local interpretations with respect to human rights and IHL (International Humanitarian Law) compliance. 

Dispelling the “Creation Myths” of the PMSC

Typically modern private military companies are founded in any number of different ways as is the case with any type of venture. Founders vary widely in the PMC sector and include civilian entrepreneurs, ex-military SOF specialists, ex-law enforcement professionals, ex-employees of defunct PMSC’s, security analysts, ex-government employees with applicable experience – as many permutations as you can shake a stick at. 



The Body Corporate 

The registration process and the administration issues associated with setting up a PMC are the same as any other body corporate in terms of compliance with company law and obligations with respect to governance as they apply in the jurisdiction in which the entity is registered. 

Motivations

The motivation to start a new business in this area is often derived from the need to crystallize a structure to allow a group of loosely associated professionals to act as a single entity in pursuing an immediate business opportunity and the brand name / reputation develops from there or the business is wound down in an orderly fashion when the specific contract is completed. 

The Rules 

There are several international standard setting organizations that have, after consulting international forums and determining global consensus, crystallized certain expectations that the international community has when it comes to PSMC’s, PMC’c and PSC’s and how they are deployed and their behavior while “on mission”. 

The International Code of Conduct for Private Security Service Providers

The International Code of Conduct for Private Security Service Providers (ICoC) is a Swiss government convened, multi-stakeholder initiative that aims to both clarify international standards for the private security industry operating in complex environments, as well as to improve oversight and accountability of these companies. Based on international humanitarian and human rights law, the Code was developed through a transparent and inclusive multi-stakeholder process. Full details on the process are available in the ICoC Timeline.

The Code sets-out human rights based principles for the responsible provision of private security services. These include rules for the use of force, prohibitions on torture, human trafficking and other human rights abuses, and specific commitments regarding the management and governance of companies, including how they vet personnel and subcontractors, manage weapons and handle grievances internally.

The ICoC was signed by 58 private security companies from fifteen countries at a signing ceremony in Geneva on 9 November 2010. By signing, the companies publicly affirm their responsibility to respect the human rights of, and fulfill humanitarian responsibilities towards, all those affected by their business activities. They also commit to operate in accordance with the code. The ICoC has remained open for signature since the initial signing, and by 1 February 2013, the number of Signatory Companies had risen to 708 from 70 countries. The current list of Signatory Companies is available on the ICoC Signatory Companies page.

The signing of the ICoC also set the foundation for a second phase of standard-setting, implementation and institution building, including the establishing of external independent mechanisms for effective governance and oversight of the ICoC. As required by the code, a multi-stakeholder Steering Committee was established, responsible for developing a proposal for the independent governance and oversight mechanism. Full details of the ongoing work are available on the Steering Committee and Working Groups page.

Aside from this institution building process, as a statement of the good principles that private security companies should be striving towards, the ICoC is having impacts in the better regulation of the industry. It is frequently referred to in national and international fora discussing these issues and has also become an important source document, used by a wide range of organizations, governments and associations as they set national and international standards, formulate procurement policies or draft legislation.

The 100 Series Rules™

The 100 Series rules have been developed for the benefit of the entire maritime industry and under-pinned by a thorough public international and criminal law legal review using an objective international law test of what is “reasonable and necessary” when force is used, as a lawful last resort, in self-defense.

This objective international legal test is deemed to be of a higher legal standard than that of subjective national legislative provisions for self-defense. The 100 Series Rules™ will not bind flag States as to their use, but instead provide a choice for their potential incorporation into national guidance as determined by respective governments and competent authorities.

In 2011 the International Maritime Organization (IMO) changed its stance on Shipping Companies employing Privately Contracted Armed Security Personnel (PCASP) onboard Merchant Vessels and reported that it was a matter for Flag State Approval. The Oxford University Small Arms Survey of 2012 indicated that the percentage of ships employing armed guards rose from 10% to 50%.

The 100 Series Rules™ are a model set and example of best practice for maritime RUF. They complement current industry RUF guidance on the drafting of RUF, as well as supporting the requirements of ISO PAS 28007 as a Publicly Available Specification and international standard. 

The 100 Series Rules™ will go to providing an international model set of RUF as against which, Privately Contracted Armed Security Personnel (PCASP) may be professionally trained, Private Maritime Security Companies (PMSCs) may be audited and operator actions both measured and judged by competent authorities. The 100 Series Rules™ will not, however, provide any form of defence, indemnity or immunity whatsoever against civil or criminal liability when force has been used unlawfully.

  • RULE 100 In the event of any actual, perceived or threatened attack by third parties the Team Leader (TL) or, in the TL’s absence, other PCASP, shall advise the Master or (in the Master’s absence) the Officer of the Watch that he intends to invoke these Rules for the Use of Force.
  • RULE 101 Non-kinetic warnings may be used where there is a reasonable belief that a craft is displaying behavior(s) assessed to be similar to those of a potential attacker.
  • RULE 102 Firearms may be used to fire aimed Warning Shots when it is assessed by the TL or in the TL’s absence, other PCASP, that Warning Shots may deter an actual, perceived or threatened attack.
  • RULE 103 When under attack or when an attack is imminent, reasonable and necessary use of force may be used in self-defence, including, as a last resort, lethal force.


National Standards ISO PAS 28007

National Standards ISO Publicly Available Specification (PAS) 28007 (ISO/PAS 28007:2012) provides a set of guidelines that includes sector-specific recommendations. The guidelines have been put in place to allow organizations that provide Privately Contracted Armed Security Personnel (PCASP) on board ships to demonstrate compliance with internationally accepted and recognized Standard Operating Procedures (SOP), in particular those with respect to the Rules for the Use of Force (RUF) – a highly emotive issue and a source of ongoing negative PR for the industry – as a result of the actions of a small number of unscrupulous operators.

To claim compliance with these guidelines, all recommendations (“should’s”) should be complied with. Compliance with ISO/PAS 28007:2012 can be by first, second and third party (certification). Where certification is used, it is recommended the certificate contains the words:

“This certification has been prepared using the full guidelines of ISO PAS 28007 as a Private Maritime Security Company providing Privately Contracted Armed Security Personnel”. (Extract ISO Web Site)

The standard was specifically developed for organizations operating in the High Risk Area (ITF IBF HRA Designations 2012)  off the Horn of Africa providing security transits from Suez to South East Asia and the Indian subcontinent. However, many of the certified or soon to be certified Private Maritime Security Companies equally apply the practices to operations in other parts of the world. The guidelines were developed via an abbreviated ISO process and will have to be reviewed before it becomes a full-fledged ISO Standard. ISO/PAS 28007 does not adopt the International Code of Conduct principles, which were developed for the land rather than maritime environment.

The United Kingdom Accreditation Service (“UKAS”) is the only national accreditation body that accredits auditing companies to certify to the standard. As of May 2014 only two certification bodies were actively certifying to ISO/PAS 28007: LRQA and MSS Global.

The introduction of the ISO/PAS 28007 is a welcome introduction to the industry as it lays out clear guidelines to PMSCs and PCASPs as to what the minimum standards are, as required by shipping companies and their respective Flags employing armed security on their vessels.

ANSI/ASIS 2012 & PSC.4-2013

ANSI/ASIS PSC.4-2013 is guidance for Quality Assurance and Security Management for Private Security Companies Operating at Sea. The guidance document explains how to implement ANSI/ASIS PSC.1-2012 within the maritime environment. ANSI/ASIS PSC.1-2012 contains four documents published in the ANSI/ASIS series that apply to Private Security Companies. ANSI/ASIS PSC.4-2013 is one of these documents.

The standard seeks to operationalize the International Code of Conduct (ICoC) for Private Security Service Providers within a formal structure familiar to businesses. That structure, with national and international supervision, provides auditable procedures for the development of the standard, certification to it, and monitoring of ongoing compliance. It incorporates elements of the Montreux Document.

Civilian Expectations 

The reputable firm is aware of and complies with the expectations set by a number of external bodies. It is a highly emotive subject and there are entrenched views on both sides of the debate with respect to the use of and need for deployment (especially by governments in Western democracies) of PMC / PSC / PMSC in conflict zones acting as proxies for sovereign forces. 

On one side of the debate and anti-PMSC, or “mercenaries” as he prefers to refer to the industry as, is former chairperson of the UN Working Group on the use of mercenaries Mr. José L. Gómez del Prado. See Mr. Del Prado’s interview with a group called GlobalResearchTV to understand that side of the debate: https://www.youtube.com/watch?v=TQiT_Pf0Qzo


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A counter weight to that point of view is the association called The International Code of Conduct for Private Security Service Providers (ICoC) a Swiss government convened, multi-stakeholder initiative that aims to both clarify international standards for the private security industry operating in complex environments, as well as to improve oversight and accountability of these companies. See About ICoC – for more information. 

The Montreux Document

The Montreux Document reaffirms the obligation on States to ensure that private military and security companies operating in armed conflicts comply with international humanitarian and human rights law. The document also lists some 70 recommendations, derived from good State practice. These include verifying the track record of companies and examining the procedures they use to vet their staff. States should also take concrete measures to ensure that the personnel of private military and security companies can be prosecuted when serious breaches of the law occur. This document is the product of an initiative launched cooperatively by the Swiss government and the International Committee of the Red Cross.

It was developed with the participation of governmental experts from Afghanistan, Angola, Australia, Austria, Canada, China, France, Germany, Iraq, Poland, Sierra Leone, South Africa, Sweden, Switzerland, the United Kingdom, Ukraine, and the United States, in meetings convened in January and November 2006, November 2007, and April and September 2008. Representatives of civil society and of the private military and security industry were consulted. See the full document at The Montreux Document on Private Military and Security Companies.

OFAC, EAR & ITAR 

In addition all reputable firms comply with the restrictions as imposed by OFAC, EAR & ITAR – Embargoed Countries, Entities and Persons – see OFAC, EAR & ITAR – Embargoed Countries, Entities and Persons for an understanding of how certain organizations and individuals are subject to trade sanctions, embargoes, and other restrictions under US law.

How will your firm be tracked globally?

By any number of UN bodies, governments, human rights advocates, investigative journalists and so on. By their nature firms of this kind are of interest to any number of government agencies due the potential impact they can have – in the hands of the unscrupulous – in terms of undermining the sovereignty of nations.

What concerns face a private military company founder?

Personal security, adverse media coverage, compliance, governance, command & control and so on – the complexity of operating in this domain is only touched on briefly in this answer to your question – it is not an industry for the faint hearted and at every turn motivations can and are misinterpreted and manipulated to the agenda of any number of externals. 

ENDS.