**SSR Paper 13**

**Business and Security Sector Reform: The Case for Corporate Security Responsibility**

in governance of the security sector addressed upfront as problems of poor resource governance, and vice versa. This paper describes the grounds where SSR and BHR coincide in principles, actors and activities, and which synergies can be built on that base. It makes the *business case* for SSR, and the *SSR case* for business. The paper assesses how SSR can channel resources and know-how from business to address critical challenges related to ownership, capacity and sustainability of reform processes. Opportunities for bridging BHR and SSR are drawn from a broad range of policy and guidance, and by looking at lessons from case studies on Guinea, Colombia and Papua New Guinea. SSR and BHR should not collide; ideally, they should cohere. A variety of multistakeholder initiatives open new opportunities to bring this about, with particular relevance to SSR in extractive environments. The overall conclusion, supported by practical propositions for implementation, is that the existing policies and standards in SSR and BHR already allow, and call for, a less rigid approach to the challenges

**Pedro Rosa Mendes** is an SSR officer with DCAF's International Security Sector Advisory Team, supporting field advice, training and developing tools and guidance for SSR. He has reported and researched for over two decades on human security issues, with an emphasis on conflict resources, war economies and transitional justice. He is also an award-winning author, with reportage, fiction and essays published in several languages. Pedro Rosa Mendes holds a degree in law from the University of Coimbra, a master's in history from the EHESS in Paris and a CAS in civilian peacebuilding from the University of Basel and Swisspeace.

Challenges to security and human rights involving extractive and other industries gave rise to an evolving framework of policy, standards and good practice generally known as business and human rights (BHR). Problems with inefficient and unaccountable security institutions are addressed by security sector reform (SSR). From an empirical perspective – the view from the often mutual operating grounds of BHR and SSR – both approaches share many challenges, as well as end goals. It is thus striking that only on rare occasions are challenges

Pedro Rosa Mendes

addressed in both fields.

**Business and Security Sector Reform: The Case for Corporate Security Responsibility**

## **Business and Security Sector Reform: The Case for Corporate Security Responsibility**

Pedro Rosa Mendes

**SSR Paper 13**

**1** Business and Security Sector Reform

### **Business and Security Sector Reform: The Case for Corporate Security Responsibility**

Pedro Rosa Mendes

Published by Ubiquity Press Ltd. 6 Osborn Street, Unit 2N London E1 6TD www.ubiquitypress.com

Text © Pedro Rosa Mendes 2015

First published 2015 Transferred to Ubiquity Press 2018

Cover image © Simon Dawson / Bloomberg via Getty Images

Editors: Alan Bryden & Heiner Hänggi Editorial assistance: Kathrin Reed Copy editor: Cherry Ekins Design and layout: Pitch Black Graphic Design, Berlin/The Hague

ISBN (PDF): 978-1-911529-40-8 ISSN (online): 2571-9297

#### DOI: https://doi.org/10.5334/bbx

institutions in promoting good governance, and

for researchers, policymakers and practitioners involved in this field, the papers provide original and provocative analysis on topics that are directly linked to the challenges of a governance-driven

This work is licensed under the Creative Commons Attribution 4.0 International License (unless stated otherwise within the content of the work). To view a copy of this license, visit http://creativecommons.org/ licenses/by/4.0/ or send a letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA. This license allows for copying any part of the work for personal and commercial use, providing author attribution is clearly stated. The Geneva Centre for the Democratic Control of Armed Forces (DCAF) is an international foundation established on the initiative of the Swiss government. It is one of the world's leading This paper has been submitted to a double-blind peer review process. The editors would like to thank the anonymous reviewers for their valuable contribution.

**2** Pedro Rosa Mendes **3** Business and Security Sector Reform

This book was originally published by the Geneva Centre for the Democratic Control of Armed Forces (DCAF), an international foundation whose mission is to assist the international community in pursuing good governance and reform of the security sector. The title transferred to Ubiquity Press when the series moved to an open access platform. The full text of this book was peer reviewed according to the original publisher's policy at the time. The original ISBN for this title was 978-92-9222-378-6. focuses on a specific public sector niche – the security sector. DCAF's mission is to assist partner states and international actors supporting these states in improving the governance of their security The views expressed are those of the author(s) alone and do not in any way reflect the views of the institutions referred to or represented within this paper.

SSR Papers is a flagship DCAF publication series intended to contribute innovative thinking on important themes and approaches relating to security sector reform (SSR) in the broader context of security sector governance (SSG). Papers provide original and provocative analysis on topics that are directly linked to the challenges of a governance-driven security sector reform agenda. SSR Papers are intended for researchers, policy-makers and practitioners involved in this field. sectors through inclusive and participatory reforms based on international norms and good practices and in response to specific local contexts and challenges. ISBN 978-92-9222-378-6 © 2015 Geneva Centre for the Democratic Control of Armed Forces

The views expressed are those of the author(s) alone and do not in any way reflect the views of the institutions referred to or represented within this paper. *SSR Papers* is a flagship DCAF publication series intended to contribute innovative thinking on EDITORS Heiner Hänggi and Albrecht Schnabel EDITORIAL ASSISTANCE Kathrin Reed

COPY EDITOR Cherry Ekins

Getty Images

DESIGN AND LAYOUT Pitch Black Graphic Design,

#### Suggested citation: important themes and approaches relating to

SSR agenda.

Rosa Mendes, P. 2018. Business and Security Sector Reform: The Case for Corporate Security Responsibility. London: Ubiquity Press. DOI: https://doi.org/10.5334/bbx. License: CC-BY 4.0 security sector reform (SSR) in the broader context of security sector governance. Intended Berlin/The Hague COVER IMAGE Simon Dawson / Bloomberg via

# Contents


# Introduction

Companies make a significant contribution to creating jobs and generating economic growth, raising living standards and helping to lift people out of poverty. Most businesses manage in a responsible way their different roles in society – as producer, employer, marketer, customer, taxpayer and neighbour.1 Nonetheless, businesses are also sometimes associated with or linked to human rights violations – even if unwittingly. Many of the most serious abuses related to corporate operations occur in weak governance areas in relation to extractive industries – oil, mining and gas. Typically, such instances of abuse involve at some point the presence of security actors – public, private or non-statutory – given the importance of extractives to the political economy of natural-resource-rich countries. Many complaints against the extractive industries refer in fact to the conduct of government security personnel allegedly using inappropriate force in the name of protecting company staff or facilities.2

Challenges to security and human rights involving extractive and other industries gave rise to an evolving framework of policy, standards and good practice generally known as business and human rights (BHR). Problems with inefficient and unaccountable security institutions are addressed by security sector reform (SSR). Both frameworks have emerged as conceptual and normative areas on their own since the turn of this century. Both aim essentially at supporting fundamental rights of citizens and communities. Yet the two frameworks have

#### **4** Pedro Rosa Mendes **5** Business and Security Sector Reform

been largely evolving apart from each other for more than a decade, due to a largely "stove-piped" approach to their agendas and goals with little care for building synergies and linkages. Thus the realization of the imprint of extractives in the communities and societies with which they interact did not translate on the ground into activities that directly engage business in the transformation of the security sector, despite the fact that the industry is a major stakeholder in the security environment of the countries in which it operates.

This paper assesses and challenges the still-prevailing self-contained approach to BHR and SSR, proposing an appraisal of existing conditions and opportunities that are mutually beneficial. In other words, it makes the *business case* for SSR and the *SSR case* for business in terms of analysing potential benefits arising from action based on shared interests. The focus is on how to identify conceptual and practical common ground for BHR and SSR from which to address governance gaps and challenges. The paper considers how business can contribute to SSR while at the same time benefiting from overall improvements in the investment and operational environments, which are particularly relevant to extractive companies operating in complex and fragile contexts.

The paper also analyses how SSR can channel resources and know-how from business to address critical challenges related to ownership, capacity and sustainability of reform processes. These issues are particularly pressing in weak governance zones.3

There are striking overlaps of the geographies of extractive industries and SSR. The map of countries undergoing or having engaged in some form of what can be included under SSR (see next subsection) coincides to a great extent with the map of resource-rich *and* conflict-affected or fragile countries. In many cases natural endowments are part of the conflict equation; some 20 ongoing conflicts can be directly related to natural resources.4

In spite of this, only on rare occasions are challenges in governance of the security sector addressed upfront as problems of poor resource governance, and vice versa. Evidence nonetheless suggests that both fields are closely intertwined. Considering that the emergence of the concept of SSR is deeply rooted in development policy and debates, it is striking that links have not emerged in relation to multistakeholder initiatives addressing security issues that have evolved in recent years to meet binding international standards of human rights and fundamental freedoms.

The paper begins by providing a conceptual analysis of the relationship between the fields of SSR and BHR. It first reviews the relevant policy for SSR,

as well as the policy, standards and main initiatives defining the BHR approach. Among the references consulted is a broad range of documents that encompass different templates and initiatives in each of the two fields. For SSR this includes the UN framework for security reform, from early statements on human security and the fundamental nexus of security and development – a foundational concept for SSR – to the recent UN Security Council Resolution (SCR) 2151 on SSR.5 The UN framework for SSR is also approached based on several reports from the UN Secretary-General and existing guidance from the organization.6

Another substantial set of documents appraised comes from the Organization for Economic Co-operation and Development's Development Assistance Committee (OECD-DAC) framework, including the guidelines on *Helping Preventing Violent Conflict* and *Security System Reform and Governance* and the *Handbook on Security System Reform*. 7 These documents provide fundamental principles for SSR and recommendations and good practice that are still valid a decade after their publication. The EU framework for SSR is taken into consideration through its two main defining statements, the EU Concept for Common Security and Defence Policy (CSDP) Support to SSR and the EU Commission Concept for European Community Support for SSR.8 The African Union (AU) Policy Framework on SSR is also brought in, since Africa has taken a more prominent role in debates on how to support and implement SSR (as seen by the active engagement of several member states in the debates leading to Resolution 2151 in April 2014), with countries being both recipients of and providers of support to such activities.9

For the BHR appraisal, the paper draws on extensive policy statements, principles and guidance elaborated over the last 15 years. These include early documents from the OECD-DAC and the UN Global Compact on evolving notions of corporate social responsibility and the emergence of the model of "social licence to operate" (SLO).10 It draws also on the very comprehensive work under the mandate of UN Special Representative of the Secretary-General (SRSG) for Business and Human Rights John Ruggie, comprising policy statements and a wealth of analysis and background documents crucial to understand the "Protect, Respect, Remedy" framework and the long road leading to its acceptance by the Human Rights Council (HRC) in 2011.11 One particular multistakeholder initiative, from the early times of BHR as a distinct framework, is the Voluntary Principles on Security and Human Rights12 (VPs), considered here in terms of opening far-reaching opportunities for business and SSR. The principles are approached from the angle of extensive guidance tools elaborated under a joint project by

**6** Pedro Rosa Mendes **7** Business and Security Sector Reform

the Geneva Centre for the Democratic Control of Armed Forces (DCAF) and the International Committee of the Red Cross (ICRC), including a toolkit and a knowledge hub.13 Two more recent multistakeholder initiatives are also extensively analysed for the myriad of entry points for business and security reform: the Montreux Document and the International Code of Conduct for Private Security Service Providers (ICOC).14 Other reference documents contributed to source this paper, including several policy statements and guidance elaborated over the last decade by the International Finance Corporation (IFC).15

The extensive appraisal of existing policy and guidance in SSR and BHR in the second section of the paper is systematized according to three main categories: principles, actors and activities. These categories provide the foundation for the proposed comparative framework which serves as the methodological tool against which the three case studies in the third section are considered. Case Study 1 looks at a serious incident in Zogota, Republic of Guinea, in West Africa; Case Study 2 reassesses the crisis and war in Bougainville, Papua New Guinea, in the 1980s; and Case Study 3 analyses the evolving corporate agenda in Colombia in the last two decades. These cases offer a cross-sectoral (oil and mining) and cross-regional representation of contexts and situations where operational challenges in extractives can be related to broader challenges in the security sector, with serious consequences for communities and companies. Lessons are identified in each of the case studies, completed with a summary of findings and applied to the proposed framework.

The fourth section of the paper builds on findings from the case studies, subsuming lessons from the field into focus areas under the category of activities which operationalize linkages between SSR and BHR. The case for corporate security responsibility – in the sense of a direct input from business into security and justice reform – is then taken to a practical level in five areas of intervention and support: stakeholder engagement, risk assessment, training, monitoring, and oversight and accountability.

# Business and Security Sector Reform in Theory

### **Conceptualizing business and human rights (BHR) and security sector reform (SSR)**

This section reassesses the context and challenges that contributed to the emergence and mainstreaming of both SSR and BHR in relation to the post-Cold War security environment and the dynamics of globalization. It recalls the importance of the human security agenda and the centrality of governance issues in the SSR framework. It also puts in perspective the evolving standards of corporate social responsibility, and the way these influenced the momentum for BHR. The appraisal of policy results in a comparative framework anchored in principles, actors and activities.

#### *SSR: A people-centred approach to security*

SSR emerged as a policy-driven concept in the late 1990s, linked with debates on poverty alleviation, sustainable development, professionalization of the security services, democratic governance and conflict mitigation.16 These concurring streams to the DNA of SSR should be recalled today in the face of an identified – and persistent – implementation gap; they are also relevant when looking ahead for ways to reach out meaningfully to constituencies like businesses that have been at best peripheral to efforts aimed at transforming security institutions in many countries.

**8** Pedro Rosa Mendes **9** Business and Security Sector Reform

The concept of SSR evolved as a key component of the broader "human security" agenda described in *Human Security Now*, the report of the UN Commission on Human Security.17 After the turn of the century security became increasingly viewed as an all-encompassing condition, departing from the state-centred view of security which prevailed throughout the Cold War period. Under the new paradigm, the security of people and the security of states are understood as mutually reinforcing.18

The overall objective of SSR, as defined by the OECD-DAC, is to "create a secure environment that is conducive to development, poverty reduction and democracy".19 In the global North, in particular among developed nations represented in the OECD, SSR galvanized discussions about the nexus of security and development. Such debates were infused with (good and democratic) governance as a legitimate issue on the development agenda. In the global South the early SSR agenda was shaped by practical work aimed at educating security service personnel, civil authorities and members of civil society on their various roles and responsibilities in democratic societies, and carrying out research on ongoing political transition processes.20

With the attention shifting from the security of the state to the security of the people,21 the focus in SSR has been to strike the right balance between effectiveness and efficiency of core security providers *and* enhanced aspects of governance of the security sector, understood in this paper as security governance in the individual state. Security sector governance (SSG) thus implies the principles of good governance.22 Democratic decision-making requires transparency and accountability, including fiscal oversight23 – a crucial issue in countries or regions where weak security governance is related to the misappropriation or mismanagement of natural resources.

There are multiple definitions of what constitutes a good governance framework, according to different institutions and organizations that have adopted the concept. Three core elements emerge: accountability, transparency and participation.

SSR, as it was understood under the OECD-DAC framework and subsequent country frameworks,24 places governance at the heart of all activities undertaken, with an emphasis on democratic accountability, rule of law and internationally accepted human rights standards rather than on the transfer of operational training and equipment. While it is pertinent to recall the original agenda of SSR for the purpose of considering potential synergies between BHR and SSR, it is equally relevant to consider the main challenges to implementation and the shortcomings when translating SSR principles into practice. Such an exercise will help to identify areas where corporate due diligence, when purposely linked to a reform agenda, can actually produce or make way for tangible gains in SSR implementation. This appraisal of synergies should also take in consideration recent major policy developments, including the first stand-alone Security Council resolution on SSR, SCR 2151 (April 2014), and the first-ever resolution on the role of policing in UN peacekeeping and peacebuilding, SCR 2185 (November 2014).

Early critical assessments of results and impact25 identified three core challenges in turning SSR policy into effective practice: first, mainstreaming the OECD-DAC SSR concept and policy framework across relevant actors in the SSR community; second, achieving policy coherence between development and security policies; and third, the renewed emphasis on more traditional security approaches as a consequence of the "war on terror".26 Today, SSR's track record is not substantially better and remains underwhelming.27 A short list of challenges might include, among others:


The overall results on the ground are not proportionate to the importance of SSR in the international agenda. Bridging SSR with BHR can, ideally, contribute to solving some of the recurrent shortcomings of SSR; more pragmatically, at least a successful BHR agenda can limit the options for security actors to escape or delay change and to stall SSR – a matter elaborated further in this paper.

#### *BHR: From guidelines to principles*

Two of the earliest initiatives defining an evolving approach to BHR were the UN Global Compact and the VPs, both established in 2000. In the same year the OECD Guidelines for Multinational Enterprises provided recommendations addressed by governments to multinational enterprises.28

Also in 2000 the UN General Assembly adopted a landmark resolution supporting the creation of an international certification scheme for rough diamonds, resulting in the creation of the Kimberley Process Certification Scheme in November 2002.29 In 2003 the Extractive Industries Transparency Initiative30 set a benchmark standard for revenue transparency in the extractive sector.

The fiercest debates along the way focused on human rights standards. The difficulty in agreeing on a common standard became apparent with the development by the Office of the UN High Commissioner for Human Rights of the "Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights".31 Most businesses opposed the framework; many if not most human rights groups welcomed it; and governments adopted the mandate of UN SRSG Professor John Ruggie as a means to move beyond the stalemate.32

Ruggie's mandate started in 2005, and in 2008 the UN HRC unanimously welcomed the "Protect, Respect and Remedy" framework proposed by Ruggie. In June 2011 the HRC endorsed a set of guiding principles33 – the first time that it had endorsed a normative text on business and human rights. In presenting the principles to the HRC in June 2011, Ruggie underlined that their normative contribution lay above all "in elaborating the implications of existing standards and practices for States and businesses".34

The UN framework rests on three pillars: the state duty to protect against human rights abuses by third parties, including businesses, through appropriate policies, regulations and adjudication; the corporate responsibility to respect human rights, which means that business enterprises should act with due diligence to avoid infringing the rights of others and to address adverse impacts

**10** Pedro Rosa Mendes **11** Business and Security Sector Reform

#### **12** Pedro Rosa Mendes **13** Business and Security Sector Reform

with which they are involved; and greater access by victims to effective remedy, judicial and non-judicial.35

Debates over human rights standards and violations were often linked to operational contexts in which private military and security companies (PMSCs) had an important stake, including in armed conflicts. The importance of PMSCs became a new phenomenon in many parts of the world and it was an expanding industry, but without a corresponding expansion in state control and regulation. BHR also gained traction from policy initiatives aiming to address the challenges posed by the PMSCs.36

Central to this debate are the core issues of capacity and legitimacy of states to provide security to their citizens and territories. A lack of capacity (and/or willingness) to secure people's lives and goods against internal and external threats will likely erode the legitimacy of public institutions, thus creating an element of fragility. Irresponsible or unregulated supply and use of military/ security assistance certainly acts as an exacerbating factor. Meanwhile, the growing use of PMSCs to supplement or replace state capacity in security service provision challenges the traditional notion of state monopoly on the use of force and poses significant questions for state legitimacy and accountability.

The OECD-DAC addressed these issues in key policy documents and guidance on the expected standards for business in such contexts. Some of this work was carried out under the OECD-DAC International Network on Conflict and Fragility (INCAF) project on "Global Factors Influencing the Risk of Conflict and Fragility".37 Several diplomatic initiatives were launched to clarify what the role of PMSCs in armed conflicts is and should be, resulting eventually in the signature of the Montreux Document in 2008.38 Two years later, also on the initiative of the Swiss government, a group of companies signed the ICOC.39

Industry initiatives can be mentioned as well, building synergies and linking to some of the earlier commitments of extractive companies on security and human rights. One such is the Bettercoal Initiative,40 which links guidance for coal-mining companies on dealing with public and private security providers with both the VPs and the UN Global Compact's guidance on responsible business in conflict-affected and high-risk areas.41 Some initiatives are sector-specific but offer other angles to look at similar challenges, like the comprehensive guidelines elaborated in recent years by the Global Reporting Initiative, a leading organization in the sustainability field.42 The IFC also worked extensively on developing and updating comprehensive guidance and tools, including performance standards. Again, the IFC directly linked relevant good practice for its clients

with other templates dealing with security and human rights, especially Ruggie's framework.43 These many initiatives, some of which will be dealt with in more detail later in the paper, are proof of the dynamics of collaborative arrangements evolving in the field of BHR.

Globalization broadened the potential for negative impacts associated with different industries (including finance), while at the same time the very nature of transnational corporations diluted responsibilities along the value chain.44 The transnational corporate sector, and businesses in general, thus attracted increased attention from other social actors, including civil society and states themselves. The 1990s saw a considerable increase in non-governmental organization (NGO) activism on corporate responsibility, as the power of transnational corporations became more apparent.45 The evolving BHR agenda has been shaped partly in direct relation with this increased scrutiny of business actions and impacts. As John Ruggie recognized early on his mandate, there is clearly a "negative symbiosis" between the worst corporate-related human rights abuses and host countries where conflict and fragility are compounded by weak or corrupt governance.46 The extractive sector operates in such contexts more often than other industries.

While these initiatives created a new momentum and an emerging framework, the "business case" for respecting human rights is not new. Efforts to strengthen the international legal and policy framework within which business is conducted go back to the work of the International Labour Organization in the early twentieth century.47 The UN adoption in 1948 of the Universal Declaration of Human Rights was another landmark event.

BHR as a policy area on its own is also the result of efforts to bridge the gap between the diverse and conflicting frameworks of business and human rights. Multistakeholder initiatives like the VPs and the ICOC in fact imply a transformation of the traditional binary nature of relations between conflicting constituencies, while reclaiming the centrality of the state in this renewed conversation among duty-bearers and right-holders. Stakeholder engagement rests in inclusive and participatory processes, as opposed to rigid normative approaches to human rights advocacy.

Several high-profile cases of alleged corporate collusion with, or involvement in, gross human rights violations in the 1990s greatly contributed to nourishing the debate over new standards of corporate responsibility. Equally important was the broadening of a discussion started in academic and policy circles around the "resource curse" by authors like Jeffrey Sachs,48 Joseph Stiglitz,49 Terry Lynn

#### **14** Pedro Rosa Mendes **15** Business and Security Sector Reform

Karl50 and Paul Collier,51 analysing how natural wealth stunts development, fosters corruption and aggravates conflict in fragile contexts.

A shift also occurred among business actors in various forms, including greater disclosure of non-financial performance by corporations in their means of reporting or certification, as well as the gradual uptake of such information by the finance and investment sectors; the emergence of voluntary proto-regulatory schemes, sometimes involving governments, intended to ensure better protection of human rights and other social standards; and a greater willingness by national courts to accept jurisdiction in cases alleging the most serious human-rights-related abuses involving companies abroad, of which the US Alien Tort Claims Act jurisprudence is the major but not sole instance.52

In addition to individual company policies and practices, an emerging architecture of collaborative arrangements involving firms and other social actors concurred with the evolving – and disputed – BHR framework. There is growing evidence that a large majority of leading executives today believe that business is an important player in respecting human rights,53 and that what their companies do – or fail to do – affects those rights. That was not the case at the turn of the century.

#### *Actors in SSR and BHR*

The broader notion of security encompasses military and non-military dimensions, and also state and human security. The security sector encompasses not only security-providing institutions but also management and oversight bodies, including both state and non-state actors.54 The security community can thus include:


In some SSR literature the business community is considered, even if with caution, to be among non-state actors that perform some oversight role.56 By contrast, the direct involvement of corporate actors in security governance, and their inevitable recognition as prominent stakeholders in the security sector, is dealt with upfront in BHR policy documents.

A more positive approach is emerging concerning the role of business in the security sector, and in SSR, by rethinking precisely what kind of security actor the business community represents. From an SSR governance perspective, business has a stake in management and oversight – *not* in security provision.

Many of the actors in SSR are also among the most relevant stakeholders for BHR. This is well illustrated by a list developed to assess the commitment of a company to consultation57 with the ministries of defence/armed forces, interior/ police and natural resources/energy, indigenous groups, community leaders and international agencies/governments.

 While SSR concepts and norms established a consensus on a broad, cross-sectoral range of actors, BHR adds depth to the holistic mapping of the security sector. A sound, community-focused strategy will potentially avoid issues degenerating into open conflict by considering all stakeholders at national and local levels. To this effect, it is considered "wise" as per the VPs to bring the local community into the risk assessment process. It is recommended that this is facilitated by addressing security across the spectrum, since the "best security asset is a strong community relations program".58

#### *Activities related to SSR and BHR*

SSR covers a broad set of activities that can be grouped in four main areas:59


In each set of activities there is a fairly large number of actions under SSR to which business can contribute while fulfilling corporate due diligence as per BHR standards and best practice. These include (numbered in reference to the areas listed above) the following:


#### **16** Pedro Rosa Mendes **17** Business and Security Sector Reform

behaviour of security forces in democratic societies (training on democratic accountability, human rights, international humanitarian law (IHL), ethnic sensitivity and gender issues); under certain very exceptional conditions, upgrading of military or police equipment; and strengthening the capacity of the police to ensure they are capable of providing and guaranteeing public security and law and order.


SSR-related activities at policy, strategic and programme levels would gain from adopting a more refined lens to stakeholder mapping – similar to that inherent in risk assessments fulfilling corporate due diligence requirements. One added note on the importance of such nuanced stakeholder engagement in SSR is given in the "UN SSR integrated technical guidance notes" (ITGNs), stressing the need to strengthen – and in some cases transform – the trust between security institutions and the public.60

#### *Core principles and objectives of SSR and BHR*

Human rights constitute the broad common denominator between SSR and BHR: both frameworks are ultimately – and explicitly – seeking to protect and fulfil fundamental rights and freedoms. It is a simple but far-reaching convergence of purpose: although through different paths and pursuing different priorities, SSR and BHR aim at the same end result, meaning that their strategies and processes should at least not collide. Ideally they should cohere, since governance "at all levels", including in the private sector, should aim at securing respect for human rights.61

Such an overall aspirational goal could be articulated in the formula of freedom from fear, freedom from want and freedom to live in dignity.62 Nuanced forms of this human security agenda are to be found in the reference documents for both SSR and BHR. A first, intuitive approach to both frameworks reveals also the apparent centrality of the state as the prime guarantor of those rights.

The interconnected dynamics of security, development and human rights and rule of law were appraised by the World Bank in 2011, in a report which fully acknowledged that repeated cycles of violence cripple development and have "enormous" costs in human suffering and social and economic consequences.63

The recent UN SCR 2151 (the first-ever SCR devoted specifically to SSR) reaffirmed that peace and sustainable development are predicated in respect for human rights and the rule of law.64 The same development-security-human rights nexus lies at the core of the critical challenges and norms involved in SSR.65

The obligation for business to respect human rights66 is no less binding in contexts where the state itself is unable or unwilling to respect its own (primary) responsibility to protect those rights. This is unequivocally expressed by the OECD Guidelines for Multinational Enterprises: a state's failure to enforce domestic or international laws does not diminish the expectation that enterprises should respect human rights.67

In specific, complex contexts, such expectations demand more than just a passive attitude from business. For companies signatory to the VPs, there is a voluntary commitment to constructive engagement with host states to clarify from the start what are understood as the accepted minimum standards.68

The revised 2011 edition of the OECD Guidelines for Multinational Enterprises went further than the original template produced in 2000, adding a chapter on human rights that explicitly draws on and fully aligns with the second pillar of the UN guiding principles – the corporate responsibility to respect rights. The OECD also added the provision that companies should carry out risk-based due diligence to identify and address their adverse impacts in all areas covered by the guidelines – not only human rights, and not only with regard to their own activities.69

An appraisal of a sample of instances of corporate abuse reported by NGOs, carried out by John Ruggie's team in 2005, corroborated empirical perceptions about the disproportionate impact of the extractive industry in comparison to other sectors.70 Extractives were also linked to the worst abuses alleged, including crimes against humanity, "typically for acts committed by public and private security forces".71

#### *Accountability as a common denominator*

SSR starts with a dysfunctional security sector. The transformative change to functional security demands that security institutions meet the common standards of good governance, by responding "to the same principles of accountability and transparency that apply across the public sector, in particular through greater civil oversight of security processes".72 A democratically governed security sector enhances the safety and security of individuals, and prevents abuses and violations by the sector's personnel. This can be achieved through effective checks and balances,73 transparency, accountability and effective disciplinary mechanisms built within and around the security sector.74

Any interactions of business enterprises with security forces, public or private, are bound to respect the rule of law and human rights. Therefore, according to the UN guiding principles, states should exercise adequate oversight in order to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights.75

Democratic governance requires that decisions about "size, structure and operations of security forces rest on solid legal foundations, exercised with political responsibility. Civil authorities need to be in control", as emphasized by the Human Development Report 2002.76 The budget process is the main instrument for transparency and accountability. Traditional secrecy around security institutions and policies is a major impediment to SSR. The lack of transparency and accountability is particularly problematic in budgeting, since it allows the military to have income sources outside the formal budget. In countries where extractives are an important source of revenue for the state, mismanagement, secret budgeting or off-budget payments pose serious threats to both citizens and companies. In such contexts, due diligence becomes an essential element of security sector accountability and transparency, and a precondition for sustainable SSR. The VPs set comprehensive guidance on how to handle financial transfers to public security forces.77

Rule of law is one of the factors to be considered in risk assessments carried out as corporate due diligence by companies signatory to the VPs. These assessments should take into account the actual capacity of the local prosecuting authority and judiciary to hold accountable those responsible for human rights abuses.78 The UN guiding principles recognize this challenge, accepting the role of non-judicial mechanisms alongside judicial processes.79 As an element of corporate due diligence, grievance mechanisms should be part of a broader stakeholder engagement policy, designed to involve affected communities in the process of identifying and managing risks and impacts.

Compliance and accountability in relation to human rights extend crucially to PMSCs, as seen above. The Montreux Document includes comprehensive guidance for home states on monitoring compliance and ensuring accountability. It is the first document of international significance to define how international law applies to the activities of PMSCs when they are operating in an armed conflict zone. Good practices include monitoring compliance with the terms of the PMSCs' authorization; imposing sanctions for companies operating without or in violation of an authorization; supporting territorial states in their efforts to establish effective monitoring of PMSCs; and providing for criminal jurisdiction in national legislation for crimes under international law.80

Equally relevant for complex SSR contexts is the coherent policy across multistakeholder initiatives, establishing an accountability overlap for the signatory states of the Montreux Document and the signatory companies of the ICOC. Such commitments offer broad entry points for SSR-related programmes focused on restoring the rule of law and oversight of the security sector, for instance by aligning corporate good practice in the sensitive question of transfer of equipment with current best practice for public and private security providers.81

#### *Stakeholder engagement*

Stakeholders are persons or groups who are directly or indirectly affected by a project, as well as those who may have interests in a project and/or the ability to influence its outcome, either positively or negatively. Stakeholder mapping, consultation and management are also an essential element of SSR. Thus an interest-based approach to bridging BHR and SSR inevitably starts by appraising gains and opportunities from each respective stakeholder engagement template.

In addition to board, management and shareholders, the scope of stakeholders in business has widened to include groups that exist throughout a company's supply chain and those bodies with which it interacts formally or informally.82 It is today accepted that the long-term viability of any business relies on dialogue and cooperation with all stakeholders involved.83 Support, or at least non-active opposition, will determine the sustainability of business operations. In relation to this broader understanding of the environment in which it operates, the global extractive industry has developed since the turn of this century the SLO model as part of its corporate social responsibility strategy. The concept of SLO is defined as "outside of the government or legally-granted right to operate a business".84

Ruggie's 2010 progress report to the HRC, citing a Goldman Sachs study of 190 projects operated by the major international oil companies, highlighted the high costs of stakeholder-related risks to companies.85 The typical business stakeholder matrix considers minimal or marginal engagement with communities or groups which suffer high impacts on their human rights but pose no threat to the company's activities – *et pour cause*. This is generally the case in many projects in the extractive sector. By contrast, a BHR approach to stakeholder engagement shifts the axis of assessment from influence to impact, since it takes primarily into consideration the effects that companies or a specific project might have on individuals and communities. BHR adds a category of stakeholders which companies should prioritize, thus bringing less influential groups to the same "engagement status" as those with power to affect business activities. This means that the effects *on* communities or individuals are no less important than the potential effects *from* communities on the business.

SSR also convokes a broader set of stakeholders, bringing in issues of participation, legitimacy and ownership. By calling on groups and constituencies that were traditionally on the periphery of the security sector, or excluded outright from it, SSR redefines stakeholder interest primarily around the notion of impact and not of influence, even if the core and traditional security actors do keep being relevant and central. Both BHR and SSR thus address the need to bring into security governance (be it at national or local/community level) constituencies defined by potential impacts they can feel, rather than by potential influence they can exert. The end result in both frameworks is a bigger role for stakeholders that otherwise would be likely the most affected by violations of fundamental rights.

Existing policy and good practice in SSR and BHR already provide for a much greater level of synergies in stakeholder engagement than has actually been fulfilled to date. To some extent the common stove-piped approach to stakeholder engagement in SSR and corporate responsibility contradicts and infringes on what should otherwise be complementary levels of consultation and assessment processes, coupled with coherent systems of grievance and redress. Thus nothing impedes – on the contrary – community stakeholder engagement related to major business operations linking up to national consultations in the context of SSR. As a minimum, corporate stakeholder engagement should be a privileged channel to communicate clearly the rationale, principles and objectives of SSR work. BHR thus provides a relevant base to harness support of partner governments and stakeholders, in terms of them influencing the path of reform.

Interventions at ground level focusing on engagement and fostering capacity and ownership can have a positive impact on facilitating partner country-owned and country-led reform efforts. Furthermore, from the perspective of external support to SSR, corporate mechanisms of community engagement can provide participatory spaces for SSR which are impossible or difficult to obtain at upper levels, in particular for non-state actors.

This also means that SSR-BHR synergies through community engagement locally can open the option of balancing support for operational efficiency of the security sector with support to its democratic accountability and oversight. This balance can be carefully crafted by focusing support on the efficiency element

of SSR at national level and with statutory security providers, while channelling initial support to the accountability of SSR at local level and with stakeholders mapped through a BHR lens.

From an SSR perspective, it is useful to borrow from corporate social responsibility literature the model of SLO as the result of different levels of acceptability of a company project by a community.86 The challenge is for the project to climb up the ladder in what this model defines as boundaries: from legitimacy to credibility, and from credibility to trust. In this sense, SSR is a process predicated on what could be called a social licence to reform – participatory trust building.

#### **A comparative framework for BHR and SSR**

With a view to further analysis of areas of potential synergies between the two fields, it is now pertinent to define a comparative framework for SSR and BHR. This framework serves as a methodological tool to contrast the main conclusions of this section of the paper against the reality of specific security and human rights challenges in three different contexts involving extractive companies. The three case studies are analysed according to this framework in the next section, and the findings of this analysis inform the policy and operational recommendations presented in the fourth section of the paper.

The categories proposed for the framework are largely suggested by or implied in the relevant policy documents appraised above, guidance notes and good practice. The most relevant to the exercise of finding common ground between BHR and SSR are related to principles, actors and activities (see Table 1).

#### **Table 1: A comparative framework for SSR and BHR**


respect these rights; the rights of vulnerable groups or individuals are typically those more at risk.

#### **Accountability and oversight**

The same principles of accountability and transparency for the public sector apply to the security sector; the use of force has to be legitimate and accountable in all circumstances.

#### **Local ownership**

Reforms should be locally driven and pursue an inclusive vision for security of the state and its citizens; the provision of security and justice, either statutory or non-statutory, should meet the needs and expectations of local communities and groups.

### **Civil management and oversight bodies** Meaningful reform of the security sector will not

come about if the oversight institutions and civil society at large lack the capabilities to be informed stakeholders in the process.

#### **Civil society groups**

From religious constituencies to women's organizations, NGOs, youth groups, demobilized combatants and displaced persons, a broad range of civilian stakeholders has to be engaged in, and contribute to, security and conflict prevention.

#### **Justice and law enforcement institutions**

SSR encompasses both security and justice providers; some public security agencies, including the police, should be considered as part of the "justice family"; non-statutory – including corporate and/ or community-based grievance mechanisms – can complement or work in tandem with statutory institutions.

#### **Stakeholder engagement**

Regaining or building trust is at the core of both BHR and SSR; community engagement is crucial to avoid inflicting harm to those at risk.

#### **Capacity building**

The range of areas for potential support is vast, but process-based work should be privileged over operational effectiveness of the security forces; direct transfer of skills should not exclude capabilities relevant to any public function (e.g. audit, accounting, procurement, etc.) which might enhance SSG.

#### **Public expenditure management**

This is a crucial area for support, where accountability and transparency are inherently linked with legitimacy and sustainability of reform.

#### **Consensus building**

Mediation, consultation and other forms of structured dialogue are important to set a common vision on security while defusing conflicts and allowing for partnerships among stakeholders with different agendas.

A brief overview of these categories makes apparent the values-based approach to both SSR and BHR. One could argue that the foundation of both frameworks rests on fundamental human rights, albeit with different levels of responsibility expected from and asked for in each framework. The commonality of foundational values means that the end goals are not opposed or conflicting, and that potentially the two agendas might overlap in quite a significant number of activities and issues. The three case studies in this paper try to address this interrogation and confirm whether common core values can inspire, if not mandate, joint approaches to security and human rights challenges.

Another observation arises from the comparative framework outlined here: the line-up of analytical categories suggests two major interfaces where most gains can be expected from bridging SSR and BHR. One can be called the interface of integrity: areas of intervention that essentially build up the ethical fabric of the security sector. The other is the interface of service provision: areas that deal with the quality of security and justice provided to citizens. The former has essentially to do with good processes; the latter convokes upfront the best behaviours.

The third interrogation to challenge our case studies is whether there is a better context for building synergies between SSR and BHR. One strong hypothesis is that the subnational (including regional and local) level of intervention is the common implementation front line for SSR and human-responsible business. This locus might correspond to the complex dynamics usually called "community" in both frameworks.

# Business and Security Sector Reform in Practice

This section looks at three case studies that have BHR and SSR interconnectedness as the central element at play. The cases are set in the Republic of Guinea (West Africa), Papua New Guinea (PNG – Melanesia-Pacific) and Colombia (South America). The choice of these particular cases resulted from a combination of cumulative criteria. As a first element, the three case studies offer a cross-regional dimension, representative of different contexts in the global South where extractives are directly related to, or influenced by, social, political or military conflict. Another criterion was to use a cross-sectoral set of examples: major mining operations (Guinea and PNG) and oil (Colombia). The very broad choice of cases which match these two criteria was narrowed down, taking into account stakeholder diversity, the complexity of issues involved and relevance for the policy discussion put forward in this paper, using the broad categories outlined earlier – principles, actors and activities. This meant an initial screening of the cases in terms of their potential interest for bridging frameworks, going beyond the narratives of the three situations to focus on perceived learning potential for ways to link up SSR and BHR.

The Guinean case study provides an extensive illustration of the role played by major global actors in the mining industry in fragile developing countries. The story of the Panguna mine in Bougainville, PNG, provides a detailed *fresco* of the links between security, human rights, governance, statehood and peacebuilding.

The Panguna case offers ample grounds to identify entry points to SSR from a BHR perspective and vice versa, and the risks and costs of not using a joined-up approach to security and resource governance.

While addressing each of the three cases factually, it is not the intention of this analysis to try to assign responsibilities of any sort,87 or to establish a "what if" narrative around past events. The case studies serve as an appraisal of real-life situations to understand and propose linkages and entry points between BHR and SSR frameworks, as a basis for policy and practical suggestions given in the final section.

#### **Case Study 1: Extractive industry and SSR in Guinea**

This case study looks at the local and national dynamics at play in relation to a major mining development in Guinée Forestière in recent years. It first sets the historical context in which mineral wealth was linked to political violence and corruption for decades. It then focuses on the more recent period of military rule and the positive, crucial role of the extractive industry in providing the financial and economic basis for a sustained transition to, and consolidation of, democracy. In this setting, the events of August 2012 in a local mining community are revisited to gauge the interconnectedness of local grievances with potential global reputational costs for the Brazilian mining giant Vale. The overall purpose is to illustrate how stakeholder engagement should link up with broader issues of security and institutional reform, and also how poor SSG can have a negative impact on the investment environment.

#### *Mining and SSR in Guinea*

While gross violations of fundamental rights and freedoms are usually an immediate, visible consequence of military rule, poor SSG has an equally disruptive effect on the financial and economic fabric of a country. The reign of Captain Daddis Camara and the military junta in Guinea tragically illustrates how insecurity cripples development and aggravates poverty to critical levels. A corrupt military can be a major source of state fragility.88 This is a bigger risk in a country with massive natural endowments like Guinea, as the African Development Bank highlighted: "endemic corruption… became widespread during the crisis, particularly in the mining sector where the absence of clear regulations left the country in the grip of bad management, thereby depriving it of considerable financing resources".89 This state of affairs aggravated earlier governance deficits across the board that can be traced back to half a century of authoritarian rule. Widespread corruption and heavy-handed repression were from early on associated with a lack of transparency in the allocation of exploration rights and the management of revenues from mining.

The military regime's management during 2009–2010 led to a disastrous situation marked by severe macroeconomic instability, aggravated poverty and the weakening of governance.90 The economic record of the junta compounded the catastrophic toll of human rights violations by the security forces around Camara. One event stands out among recurrent incidents of brutality: the massacre of 28 September 2009, when the security forces, mostly from the Presidential Guard, sealed off and stormed the main stadium in Conakry, where the opposition was conducting a peaceful rally. The soldiers, police and gendarmes killed at least 150 people. The massacre was described by different human rights organizations as a crime against humanity.91

Such was the situation when Alpha Condé was elected to office. The new authorities delineated an ambitious plan of reform and recovery that again illustrates the validity of the development-security nexus. Developmental quick-wins resulted in crucial gains, allowing reforms to go forward and consolidate democratic institutions. At the forefront of the national strategy, the extractive sector plays a key role in providing the resources to sustain reform, while SSR is expected to contribute to transforming Guinea's business environment.

The main asset of the country is an exceptional mineral resource endowment. SSR is thus intrinsically linked to, and to some extent dependent on, the expected mining boom in Guinea, in terms of the financial sustainability of reform programmes and enhanced local ownership of the process that can result from the commitment of national resources to multiyear projects beyond donor engagement.

The Guinean medium-term macroeconomic framework is heavily influenced by mining sector megaprojects. At the same time, security and justice reform92 is expected to eliminate constraints and obstacles that have been holding back foreign investment. Good governance and SSR are clearly articulated as interconnected endeavours since the new authorities took office,93 with a reform agenda imbued with a strong commitment to transparency and accountability.94

Major investment projects to exploit iron ore and convert bauxite into alumina are in the execution phase or in advanced stages of preparation, including an investment framework agreement for the development of two blocks of the Simandou range.95 This will be the largest combined iron ore and infrastructure

project ever developed in Africa. It involves the government of Guinea, Australia-based miner Rio Tinto, China's largest metal producer, Aluminium Corp. of China (Chinalco), and the IFC, the financing arm of the World Bank.

"The outlook has both downside and upside risks", as the IMF analysed, adding that "the main risk is renewed political instability."96 SSR and political dialogue are meant to reduce these risks.97 The incidents around major mining operations in August 2012 illustrate the volatile dynamics of extractives and security in the country.

#### *Vale in Zogota: Local trouble, global damage*

On the night of Friday 3 August/Saturday 4 August 2012, at about 1am, "heavily armed, trigger happy soldiers invaded Zogota"98 district (N'Zérékoré) in southeastern Guinea. Five people were confirmed dead in the attack, allegedly carried out in retaliation for demonstrations demanding priority hiring for nationals within the mining project.99

The company in question was Vale,100 Brazil's leading industrial mining group and the world's main producer of iron ore. Vale is one of the main foreign investors in Guinea. The way Vale's name became associated with the "Zogota massacre" – as the incident became known – illustrates how local security problems can pose global reputational risks to companies. It is also a lesson in how poor security governance can have unpredictable, negative impacts for companies and communities alike. Zogota revealed broader security problems in the Guinée Forestière region and beyond.101

Vale found itself quickly associated with a massacre of civilians, regardless of the consistent denial by the company's public relations of any wrongdoing. Different perspectives emerged regarding the Zogota case. Media and NGO enquiries revealed that the conflict began a few days before the crimes, with protesters breaking into the company's facilities and destroying equipment while halting operations. Their motives: claims of breach by Vale of the exploration convention, in particular related to hiring quotas.102

On 3 August a delegation from the government headed by Minister of Mines Mohamed Lamine Fofana travelled to the region, using vehicles made available to them by Vale – which the company confirmed to the media – to try to broker an agreement. One district chief accused the company of having provided the vehicles for the attack at night and not only for the visit during the day – something Vale strongly denies. Community leaders, opposition leaders and NGOs accused the government of Guinea of acting on behalf of Vale. The Brazilian company, along with other multinationals, withdrew its staff from the region. Vale's media relations said that its vehicles were provided to the Guinean ministers, not to the local police. It also stated that 89 per cent of the more than 3,000 workers hired by Vale were Guinean nationals.103

In a similar incident, the urban community of Siguiri witnessed a violent invasion by government security personnel in the night of 6–7 August 2012.104 The security forces reacted violently to peaceful demonstrations of grievance from the local population, allegedly causing one death. The Open Society Initiative for West Africa called attention on that occasion to the massive circulation of small arms and light weapons in Guinea and, it claimed, "the continuous activities"105 of the uncontrolled former Liberian rebel factions of the United Liberation Movement of Liberia for Democracy (ULIMO) and Liberians United for Reconciliation and Democracy (LURD), still active in the border region with Côte d'Ivoire, Liberia and Sierra Leone. This situation was compounded by underlying and unresolved conflicts in Zogota district, including between natives and non-natives, and between the community of Saoro and the palm oil company Soguipah.106

Speaking to the press in a meeting convened to clarify events in Zogota, former Guinean prime minister Jean-Marie Doré declared107 that peasants from the village never received the compensation money promised to them for leaving the land where Vale settled its operations – the funds were allegedly retained by provincial officials.

#### *Bridging frameworks in practice*

From an SSR perspective, and checking the information available against the analytical framework proposed in the previous section, the attack on Zogota had root causes that seem almost incidentally related to business operations *per se*, and arise instead from a dysfunctional security sector in Guinea. The main elements of the Vale-Zogota crisis raise different issues of accountability, efficiency, impunity, transparency and ownership.

The elements outlined in Table 2 are consistent with the overall assessment of the Guinean security sector found in different official documents as part of the overarching SSR programme. The baseline assessment for SSR in Guinea was carried out by a joint mission of the Economic Community of West African States (ECOWAS), the AU and the UN.108 The mission considered the situation "alarming", finding that the Guinean security sector "is in a worrying condition, not meeting any of the accepted standards for many years".

#### **28** Pedro Rosa Mendes **29** Business and Security Sector Reform

guarantee the security of the state; the rule of law

is not respected.

#### **Table 2: Applying the comparative framework to Case Study 1**


disarmament, demobilization and reintegration


#### **Ownership**


(DDR) and transitional justice and/or nonjudicial mechanisms.

#### **Capacity building**


local and provincial levels; security does not follow developments in demography, internal and regional migration, important mining operations, etc.

• There is no coordination regarding security provision between the security forces, local authorities, civil society constituencies and the mining companies.

#### **Public expenditure management**


#### **Consensus building**

• Establish mechanisms for dialogue, reconcil iation and mediation; consider subregional and transnational dimensions for SSR and peacebuilding, ideally under the ECOWAS SSR framework.

#### *Lessons from Case Study 1*

From the perspective of foreign mining companies operating in the sensitive environment of Guinée Forestière, like Vale or Rio Tinto (both involved in the exploration of the Simandou range in separate but adjoining concession areas),122 there is a set of options provided by the focus areas and activities sequenced under the SSR programme outlined by the government. Such entry points are seen mostly among the categories of accountability and training, as further explained below.

These options illustrate an important feature of business engagement in SSR: the possibility of having a horizontal reach to communities and security providers in direct relation with the mining operations, combined with a vertical reach to stakeholders in national SSR processes.

Major operational sites, administrative centres, new supply hubs and new urban settlements are a magnet for social, economic and cultural imbalances that can degenerate into security challenges and crisis. Supporting accountable and efficient security provision in such an environment is thus to engage in the public good, while strictly not neglecting the private interest of companies. Seen from the perspective of the main stakeholders in SSR, there should be no valid reason – practical, political or conceptual – why the wish-list of related reform activities cannot be linked to the developmental dynamics along the so-called Growth Corridor of Simandou.123 Immediate attention should therefore be given to the potential of this world-class mineral reserve to be the catalyst of SSR in Guinea.

#### *Summary of findings*

The lessons identified in Case Study 1 can be further systematized as key findings which will inform the policy proposals in the final section, along with findings from the other two case studies. From a broad set of findings from the Zogota incidents and context, the list can be narrowed down to lessons pertinent to other situations and environments.

**a) Principles.** The events in Zogota exposed a deeper and broader crisis involving inefficient and unaccountable public security forces. The breakdown of public forces and agencies further alienates local communities, which increasingly seek and rely on non-state security and justice providers, including vigilantism and militias. The situation undermines the potential for development and sustainable peace in the region and beyond. As clearly illustrated, local grievances in extractive environments have a particular potential to escalate and affect the national and sometimes transnational political economy. Such grievances over corruption, mismanagement or abuse by the authorities can trigger violence against company assets and staff. Real or perceived impunity only amplifies these issues. Major extractive operations can galvanize reconstruction and development, but where law does not rule, opportunities for material and social gain create opportunities for trouble and unrest.

	- **b) Actors.** Major operational sites galvanize complex dynamics involving a broad set of actors and stakeholders whose interests have to be carefully mapped. Weak rule of law, poor security provision and limited justice mechanisms shift the focus of different actors away from the state and its structures to the company, which carries both dangers and opportunities. A company can hardly operate without a social licence from the communities affected or impacted by its activities, and community engagement should therefore be at the centre of a company's strategy throughout the lifetime of its investment.
	- **c) Activities.** The institutional challenges facing state security and justice providers typically play out at "ground level" and relate to behavioural dysfunctions in their relation with communities, and indeed with the company; behavioural change and personnel improvement should then be the focus of support to SSR. A policy of no interaction with public security forces is often not an option for a company; the best way to minimize operational risks from poorly trained or unaccountable forces is therefore to contribute to raising the standards of these elements. Crucially, whatever use public security forces make of equipment or facilities provided by a company, it will always be shaped by and related to the technical capabilities and ethical fabric of such forces. No transfer should thus be considered without accompanying efforts to raise their capacity and set up monitoring mechanisms. Structured dialogue and consultation can link bottom-up conflict prevention with top-down SSR in situations of great polarization, and companies have a role in such endeavours. In certain circumstances companies might be actually the stakeholder in the best position to facilitate such dynamics, having a combination of resources, know-how and cross-level access. Cross-cutting issues (e.g. gender, human rights, dealing with the past) can provide relevant entry points to synergize SSR with corporate best practice, with a view to improving service delivery on security and justice.

#### **Case Study 2: Mining and SSR in Papua New Guinea**

The case of Bougainville's civil unrest was an extreme situation where social and economic grievances around a mining operation, left unchecked, degenerated into open violence and eventually into war. Revisiting the story of Panguna copper mine is thus pertinent to analyse the disruptive potential of major extractive sites in the light of frameworks that were not conceptualized when the events unfolded: the underlying principles offer an interesting perspective into issues that generally play out, today as in the past, at a major operational site.

#### **34** Pedro Rosa Mendes **35** Business and Security Sector Reform

#### *Mining and secessionism in Bougainville*

Bougainville124 is an island east of mainland PNG, and was the site of a violent secessionist conflict that took place from 1988 to 1997, before a peace process led to the Bougainville Peace Agreement in August 2001. The secessionist Bougainville Revolutionary Army (BRA) engaged the police and PNG Defence Force (PNGDF) in a guerrilla struggle. The conflict was precipitated largely by disagreements over distribution of revenues from a giant open-cut copper mine at Panguna that operated from 1972 until its indefinite closure in 1989, which caused major fiscal problems for PNG.125

In August 2014 Bougainville Copper Limited (BCL)126 confirmed that the government of Bougainville had given final legal approval for operations to resume in Panguna.127 Regardless of what will happen with this new mining enterprise, Panguna remains a rather singular case in the history of corporate social responsibility.

In November 1988 a former BCL employee at Panguna, Francis Ona, launched a campaign against the mine and its operating company.128 Claiming to speak for all the Bougainvilleans affected by the copper mine, Ona created the New Panguna Landowners' Association.129 In its 16 years of operation the mine had become a major source of income to the PNG government, second only to Australian aid, and taxes from BCL alone accounted for 16 per cent of PNG's state budget. The company refused to abide by Ona's ultimatum: to pay the equivalent to A\$14.7 billion (1989 value) in compensation for the impact of the mine, or face reprisals.130

The crisis had been building up for years along two different lines. One stream of grievance originated in differing models of land ownership.131 This led to the other main stream of anger and dissatisfaction: alleged unequal payment for "natives" and "immigrants" – named as "wage apartheid" by Ona's movement – which compounded a growing sense of disadvantage and exclusion for Bougainvilleans. The Panguna project impacted heavily on the economy and social fabric of the island, and imbalances between locals and outsiders widened fast.

Different accounts concur on the fact that, before the crisis degenerated into war, "genuine and honest efforts of the PNG government to prevent the conflict were undermined by its own law enforcement body".132

Throughout the Bougainville conflict it is hard to distinguish the grievances directly related to the Panguna operations from the divisive issue of secession and independence of Bougainville. A higher form of autonomy might have allowed Bougainville's administration to address the disputes over land, environmental damage, mining, forestry, economy and fiscal self-reliance, squatter settlements and unemployment. Importantly, the North Solomons provincial government had also asked for a review of the Bougainville Copper Agreement of 1976 between the PNG government and BCL. This would have allowed the provincial authorities to deal directly with BCL in relation to the Panguna landowners' problem.

Events went a different way. With operations at Panguna mine already halted by militant activity,133 and BRA insisting on secession and withdrawal of state security forces, the PNG government imposed a state of emergency on Bougainville in April 1990. Human rights abuses had allegedly been committed since the beginning of the crisis by state security forces. The occupation of Bougainville by the PNGDF worsened the situation and caused, in turn, a violent campaign by BRA of politically motivated attacks along with purely criminal violence in the footsteps of previous "Rambos" gangs. The Catholic Archbishop of Bougainville, Gregory Singkai, spoke out against the counterinsurgency methods and behaviour of the PNGDF.134

During the early months of 1990 Bougainville slipped from Port Moresby's control. Panguna mine operations were officially halted on 7 January 1990. In March that year negotiations led to a ceasefire and the retreat of the army, but then a decision by the commissioner of police and controller of the state of emergency to withdraw the last thin line of ordinary officers on the ground left PNG without a single government official, politician or member of the security forces on the island. On 17 May 1990 the Independent Republic of Bougainville was declared, with Francis Ona as its self-proclaimed president. The central authorities imposed a military embargo on Bougainville, which alone led to thousands of civilian casualties.135

In the years that followed the conflict spread to the entire island, in a descent into anarchy that involved all communities, clans and language groups. Murder, rape and robbery by BRA militants became routine practice. This led to the appearance of resistance militias, armed by the PNGDF.

The PNGDF had failed to quell the insurgency in spite of its "wild unrestrained violence" and lack of discipline and training.136 The force conducted what some authors describe as a "terror campaign", starting in 1989, with helicopters loaned by BCL to the riot police. The campaign worsened later with the use of four ancient Iroquois helicopters, given by Australia to the PNGDF on condition that they would not be used in the offensive.137 The army, though, strapped machine guns into the helicopters. Later, the Bougainville war also briefly involved the hiring of "mercenaries" secretly contracted by the PNG government in what became **36** Pedro Rosa Mendes **37** Business and Security Sector Reform

known as the Sandline Affair. This London-based PMSC was contracted to mount an operation against BRA and other militant factions, but the deal was exposed by Australian media138 and the PNGDF reacted by staging a coup and forcing the expulsion of the mercenaries.139

#### *Panguna: From grievance to open conflict*

The first reason to revisit the Panguna case through the two lenses of SSR and BHR is the scale of the impact caused by one mine alone. Panguna was once the largest copper mine in the world.140 For some, it stands to this day as arguably the most relevant case of how "resource nationalism" can cause the unravelling of legitimate and crucial investments in extractives.141 To others, it is a no less notorious example of gross human rights abuses related to the extractive sector142 and the environmental consequences of major mining operations.143

The Bougainville crisis, insurgency and civil war were intrinsically linked to the opening and operation of the Panguna mine. It is not possible to assert that the whole crisis would not have happened, or would have been less brutal, if the mine had never opened in the first place. Many underlying conflicts existed from early colonial times in Bougainville society – some along lineages, clans and language groups, but most related to land. These fault-lines run deep and played out violently, in particular between opposing Bougainville factions in the 1990s. It is also a fact that the worst of the war happened *after* the closing of the mine and the expulsion of non-native workers from Bougainville.

Tension between local communities and BCL really never abated from the time the geological surveys were conducted in Panguna in the mid-1960s. In 1975 labour unrest and interethnic hostilities culminated in a violent protest against BCL in which infrastructure and production facilities were damaged. On that occasion the PNG administration punitively withheld Bougainville's investment royalties; Bougainville officially seceded only days before PNG became a new state. Bougainvillean affiliation to the state was attained when its royalties were restored, and it was granted status as North Solomons Province.144 Local grievances over the mining operation were locked with the fate of the new state.

The conflict had a huge cost in lost public revenue. The closure of the Panguna mine meant more than three decades of idleness for PNG's single most important budget contributor in the 1970s and 1980s.145 It therefore had a negative impact on the overall development trajectory of PNG. Panguna's inactivity led to a lost decade in the 1990s in terms of human development for PNG – the years

between the closure of Panguna and the momentum of the extractive boom in PNG over the last decade.

Applied to the Bougainville context, the lens of SSR captures the different perceptions of (in)security that played a role in the conflict – and that are common to disputed mining operations elsewhere in the Melanesian region. The PNG government, BCL and the Panguna traditional landowners had a shared vision of mutually reinforcing development and security: securing international investments would secure local livelihoods, which in turn would secure national (i.e. Papuan) cohesion. The crisis started to breed instead among a wider constituency of Bouganvilleans, including educated youth and women's associations. The 1980s "saw the BCL compensation money, which the Panguna Landowners' Association had received for family heads and for the RMTL Trust Fund, as a growing source of dispute among landowners.146 In August 1987 a new PLA emerged, led by younger, more educated Nasioi men and women who opposed the BCL mining operation."147

The fight – and the grievance – of Bougainvillean women who opposed the mine from the very beginning concerned the loss of land not to just one generation but to all the generations to come and all those in the past. It was this that "the miners did not seem to comprehend".148 Neither, for that matter, did the PNG government, nor the landowners who received compensation and allowed the mine to open. The Bougainville civil war went on between fractious non-state groups under the umbrella of the three main armed movements in the province (including Buka Island): BRA, the Buka Liberation Front and the Bougainville Resistance Forces.

From both an SSR and a BHR perspective, it is relevant to consider how the dynamics of non-state armed groups and militias evolved in relation to the Panguna mine. As early as 1991, an external observer suggested that BRA was a successful fourth world resistance movement founded on the unity of Bougainvilleans as a people around the appropriation of their land and natural resources by the state and BCL. The war was thus "not an insurgency to overthrow the Papua New Guinea national government".149

To some authors, dealing with the Panguna mining project in fact created Bougainvillean identity and nationalism.150 In retrospect, neither security nor business actors understood that security provision had to meet the challenges of locally owned and locally driven processes. Ideally, in Bougainville the escalation of grievances into open conflict and war could have been avoided by strategies of sustainable development from the perspective of indigenous resource managers practising kinship modes of production. It is also relevant to note that the Panguna mine inadvertently produced a collective ethos that allowed for very effective, albeit disruptive, non-accountable and non-democratic, forms of "collective cooperative efforts" – including the troublesome non-state armed groups that post-conflict Bougainville and PNG had to deal with.

#### *Bridging frameworks in practice*

Against the comparative framework defined in this paper, the Bougainville crisis reveals a combination of issues, challenges and conflict dynamics associated with major mining operations. These can be found at present elsewhere in different parts of the world, and the underlying elements of conflict have not changed essentially since the Panguna events unfolded. The Bougainville case is thus of interest today when considering the implementation of principles and guidance that did not exist at the time of the Panguna crisis. While SSR and BHR at that time were still not articulated as comprehensive frameworks to address security challenges from new perspectives, the fundamental rights and liberties that are the foundation of both approaches to security and human rights issues were clearly already translated into international law.

#### **Table 3: Applying the comparative framework to Case Study 2**


overall security system of a country. This governance aspect is of particular concern to the development community, as is civilian capacity within the government and civil society to oversee and control these 'security' • International human rights organizations. • Foreign political stakeholders. • International mediators. • Youth groups.

actors."152 • For the population, the price of the conflict was very high. The gross human rights abuses during the war compounded broader impacts of the Panguna mine from before the armed conflict, including on the social fabric and the environment.153 The war brought with it almost a decade of brutality, anarchy and the absence of rule of law in a fractured political and social landscape.


(a) Enforce laws that are aimed at, or have the effect of, requiring business enterprises to respect human rights, and periodically to assess the adequacy of such laws and address any gaps..."159

#### **Stakeholder engagement**


in the structural forms of aggression against Bougainville culture and traditions. Different approaches to different entitlements (e.g. cultural rights) are often a source of conflict and disagreement when contractual exploration rights for extractives are disputed by indigenous communities, as in Latin America and Southeast Asia – indeed, as in Bougainville and PNG. Business has fundamentally a formal and normative approach defining property and the licence to operate; in contrast, the human rights community tends to accept the legitimacy of traditional, customary or ancestral entitlements to land and natural resources belonging to the community.

• The Panguna crisis confirmed the vulnerability of disadvantaged people, including women and children, as well as of indigenous groups and ethnic minorities – whose exposure to aggression and violation is of particular concern.155


#### **Capacity building**

• "If the business enterprise has leverage to prevent or mitigate the adverse impact, it should exercise [this] by, for example, offering capacity-building or other incentives to the related entity, or collaborating with other actors." 166 The literature available on the Panguna crisis does not offer any evidence that such an approach from the company was ever consistent.

#### **Public expenditure management**

• "Business…, in particular at local level, can help to provide an impetus to make governments more accountable to their own citizens. A focus on improving public governance and capacity building is particularly relevant."167

#### **Accountability**


#### **Ownership**

• Effective agreements between companies and communities in large-scale extractive projects like Panguna depend, first and foremost, on both parties having a thorough understanding of each other's objectives and needs. This requires that the "risks as well as the opportunities associated with the project must be understood by all to avoid unreasonable expectations".157

#### **Consensus building**

• Throughout the crisis – and even in the years when tensions were building up – all the stakeholders that could resort to direct violence did so; the only exception being, at an early stage, the PNG government. Lasting peace only came about through dialogue and reconciliation fostered by grassroots and community-based groups (including women and churches).

#### *Lessons from Case Study 2*

Issues of negotiation and consent, and the absence of a stakeholder engagement strategy, as they are understood in a BHR framework were crucial triggers of the Bougainville conflict. The Panguna mining enterprise was seen by the Australian and PNG governing authorities as a state matter. The same approach was followed in terms of security policy. The impact of the mining operations on the local community and native Bougainvillean population seemed not to be relevant to or even known by Port Moresby and BCL. The community was not a stakeholder to be involved. It is striking, though, that these early issues, unaddressed for two decades, were the main cause of the crisis escalating and violence erupting later on. The short political "programme" of BRA in fact outlined the extent to which corporate actions were viewed as a security issue from a local perspective.168

The lack of accountability and effectiveness of the public security forces played an important part in deepening and aggravating the conflict. The negative role of the state security agencies169 had a huge cost and lasting consequences, considering the loss of human lives, the disruption of Bougainville's and PNG's economies and the legacy of complex post-conflict problems that still persists.

In retrospect, it is striking to observe how much the linking of SSR and BHR frameworks through consultation applies to the context in which Panguna mine was developed. The Bougainville conflict also illustrates the damaging and long-lasting consequences of failing to engage communities in security provision. The Bougainville war actually originated from an overlap of failures in stakeholder engagement from a security and a business perspective. The double failure had a backlash for BCL and the state, as well as for the community.

As the Bougainville crisis deteriorated, none of the core interests of each stakeholder involved was accomplished. The Panguna case also strongly suggests that supporting the interests of security forces in terms of enhanced capabilities and professionalism translates into a positive contribution to the fulfilment of other stakeholders' interests, including those pursued by companies and by communities affected by their operations.

#### *Summary of findings*

The Panguna mine was the catalyst for secessionism, armed struggle and years of brutality and anarchy. The Bougainville crisis from the 1980s and 1990s provides key indications today on why governance aspects are central to SSR and BHR alike; how both frameworks should cohere in building a balanced approach to

#### resource devolution; and the centrality of community engagement to synergize security reform with extractive-fuelled development strategies.


**c) Activities.** Different forms of structured consultation with communities should be the basis for any new engagement in security and justice reform, as well as for the consideration of strategic investments like those involved in extractive industries. Such a continuum of dialogue can take different forms at different moments according to the intended results of SSR and BHR, but the requirements of such consultations should converge on actually gauging the broad security needs and aspirations of the communities involved. Major investment interventions, and those by extractives in particular, inevitably affect the nature of power relations in a given country or region, much in the same way as SSR does; a continuum of conflict and stakeholder analysis should thus exist throughout the programme or investment cycle, as both a risk mitigation strategy and a conflict prevention mechanism. When security forces do not meet minimum standards on the use of force and respect for human rights, one way to have a direct positive influence on their operational behaviour is to facilitate training on those specific areas, in particular when such agencies operate inside or around strategic and sensitive sites. Local solutions for security and justice provision, built on dialogue and consultation, have the potential to address and redress more effectively, and to create a more conducive environment for negotiating peaceful outcomes for underlying or emerging issues. These include corporate and traditional grievance mechanisms in and around sites of extractive operations.

#### **Case Study 3: Oil and SSR in Colombia**

Case Study 3 looks at Colombia, the first participant from the global South in the VPs initiative. Businesses, notably extractives, were for long a driver of conflict in some areas and an important element of regional/subnational war economies. The implementation of the VPs in Colombia is studied here for relevant lessons on the potential gains of bridging BHR and SSR approaches through public-private partnerships, looking at how extractives have in fact been directly involved in and contributed to reform in the security sector.

#### *Extractives and conflict in Colombia*

More than half a century of war in Colombia caused massive human suffering, social disruption, institutional dysfunctions and economic strains.170 From 1958 to 2012, 220,000 people died in the armed conflict there. Yet this number does not fully account for the human toll of the war: "these appalling figures do not render the full picture, since one of the features and one of the legacies of the conflict is the anonymity, the invisibility and the fact that it is not possible to acknowledge all the victims".171 Colombia's internal displacement crisis stands as the world's worst after Sudan, with almost 4 million persons displaced since 1985.172 Colombia also

reports the largest annual number of new landmine victims in the world.

The Colombian conflict itself is not the subject of this case study; the focus is on the implementation of the VPs in Colombia at national and project levels, aiming at identifying links and lessons relevant to SSR. The case study looks in particular at Caño Limón in Arauca province, and the extractive industry in that region.

Extractives started – albeit indirectly – to be one important element of the broader picture in the conflict in the early 1980s. The National Liberation Army (ELN) started to strengthen its militant base, in particular by reinforcing its links to the trade union groups of the oil industry in Barrancabermeja, Magdalena Medio region. The oil industry was ELN's conduit for political, economic and military strength, and the discoveries at Caño Limón resulted in Occidental Petroleum Company (Oxy) and other oil companies having to acknowledge ELN as a power broker in Arauca.173

ELN then consolidated its presence along the Canõ Limón-Coveñas pipeline, as well as in the regions of Valle del Cauca and Southern of Cesar. The intensification of kidnappings, extortion and attacks against oil-industry infrastructure cast ELN against businesspeople, cattle ranchers and drug traffickers.

The territorial expansion of the guerrillas, the left's political momentum and the heightened paramilitary violence were not only possible because of political factors but also due to economic factors. Colombia underwent enormous social and economic changes in the 1980s that created an opportunity for the actors in the armed conflict. The process had mostly to do with Colombia's transition from being a coffee-producing country to being a mining country and a cocaine producer. This transition was accelerated by the discovery of oil in Caño Limón, and consolidated in the 1990s with further finds in Cusiana and Cupiagua. The extractive boom was also sustained by the exploration of coal deposits in La Guajira and changes in the price of gold in the international market. Another focus of development was the emerald mines of Boyacá.

A second mining boom in Colombia gave new impetus to the process initiated in the 1980s. According to official data, the extractive sector grew consistently over the 1990s and 2000s, accounting for 5 per cent of gross domestic product (GDP). A breakthrough occurred in 2004, and by 2008 extractives accounted for **46** Pedro Rosa Mendes **47** Business and Security Sector Reform

8 per cent of GDP.174 The mining boom meant an increasing overlap between the geography of mining and the geography of the armed conflict, pointing at mining as a driver of conflict.175

In a particularly violent period of the conflict in the mid-1990s, and in times of political uncertainty, extractive companies resorted to public security forces to secure their staff, assets and operations. Attacks against oil exploration and production sites and company staff became the norm for the guerrillas, and contracting the best units of the Colombian security forces was openly recognized as the best option for the multinationals. Media reports of that period quoted military intelligence experts in Colombia saying that the Revolutionary Armed Forces of Colombia (FARC) and ELN collected an estimated \$140 million a year from oil companies. The companies also had to pay a special war tax in regions heavily affected by the war, introduced in 1992 but still applying a few years later. The tax cost the industry \$250 million in 1995, though Ministry of Defence officials said the money never reached them.176 International media reported that British Petroleum (BP) signed an agreement with the Ministry of Defence valued at \$54–\$60 million to create a battalion of 150 officers and 500 soldiers to protect expansion and construction of new production sites.177

Caño Limón was among the hardest-hit regions at the time. Until the BP discovery of reserves near Yopal in 1993, it had the richest oil reserves in Colombia. Violence against the site, owned jointly by Oxy Colombia, Shell and Ecopetrol, averaged one pipeline attack every eight days in 1996. So companies defended the contracting of public security forces, although this move stirred debate in Colombia. Colombian military intelligence experts were on record blaming the companies themselves for the attacks. They contended that the companies surrendered to extortion and guerrilla infiltration through their subcontractors, essentially financing guerrilla activities in the troubled areas and fuelling the cycle of extortion, kidnapping and violence. The process, they added, started with guerrillas demanding quotas of workers in the exploration phase. They would threaten kidnappings or pipeline explosions unless they were paid off in advance, or blow up pipelines and then collect money from the companies hired to repair the damage. From the mid-1980s to mid-1990s some 1.4 million barrels of crude oil were spilled because of pipeline sabotage.178

"Everybody believes that the oil companies pay off the guerrillas, but that doesn't make sense", Alejandro Martinez, president of the Colombian Oil Association (ACP – Colombia's oil industry association with 34 member companies), declared in an interview at the time.179 "Oil is a long-term investment", said Martinez,

questioning the claims that companies were making such payments. "If the company from the start accepts paying blackmail, they would be accepting it for 25 to 30 years."180

#### *Oil and the VPs in Colombia*

The situation in Colombia was such that, as described by one retired oil company executive: "If you're not threatened by the guerrillas, it's by common delinquents, or by the authorities. Many times the companies prefer to pay them off. To denounce is to die."181 So, in short, "everybody pays, and they pay a lot", according to a Colombian specialist in military intelligence.182

Companies would confirm that they contracted public security forces, but details of such agreements rarely emerged. The interaction with public security forces was also politically sensitive, with criticism of "BP's mercenaries" and accusations about "the privatization of the Colombian Army".183 The different arguments converged on a basic set of accusations, as exemplified by one report looking at the impact of Canadian mining companies in Colombia:184


The years of heightened conflict in the 1990s corresponded to the most serious reputational risks for extractive companies.185 Global NGOs highlighted particular cases of alleged human rights violations in communities in the oil-rich provinces of Colombia.186 One such criticism came in 1999 when five British development agencies commented that "BPXC [BP Exploration Colombia] has seriously underestimated the implications that its investments in a region of violent conflict would have for the security of the poor in the region."187

Leafing through the abundance of cases and detailed information on alleged corporate complicity in human rights violations in Colombia, it is striking to note that in many of them a few issues are recurrent and cross-cutting. Among these are the presence in "oil battalions" of actual or retired officers from the Colombian Army with appalling human rights track records; a policy of intimidation and elimination of trade union delegates, community leaders and people suspected of being opposed to extractive operations; and the training of these security forces, under some form of company sponsorship, in military tactics and counterinsurgency.188

Multinationals were accused of collusion or complicity in actions of poorly trained forces. Such problematic association raised the question of complicity and interest, with suggestions that companies were putting their "profits above human rights abuses and people's lives".189

It was in this highly sensitive context that, in October 2003, a first meeting for the in-country VPs process was initiated in Colombia by the US embassy in Bogotá.190 This meeting resulted in the decision to form a working group, which was first called the National Committee on the VPs and then the Mining and Energy Committee for Human Rights (CME),191 to address the implementation of the VPs and review broader security issues. Companies and the government tasked the ACP with convening and leading the committee.

In 2009, by a decision of Vice-President Francisco Santos and with the support of the Ministry of Foreign Affairs, the government of Colombia applied to be an "engaged government" in the VPs initiative.192 The CME working group today comprises several multinational energy companies, Colombian companies, the ACP and various members of the Colombian government. The group reached a milestone when the Colombian Ministry of Defence agreed to include language on human rights protection and a commitment to the VPs in an agreement that Ecopetrol signed with the Colombian armed forces to provide protection for oil operations. The VPs have a chapter dedicated to the Ministry of Defence Reference Manual for Cooperation and Coordination for Security and Defence.193

One relevant project for the implementation of the VPs in Colombia was the development of performance indicators by the London-based NGO International Alert in partnership with Fundación Ideas para la Paz (FIP).194 The indicators were built upon International Alert's experience of piloting conflict-sensitive business risk and impact methodologies with several members of the CME in Colombia. It built as well on FIP's survey of multinational oil and mining company security and human rights practices within the country. Companies in Colombia began to test these indicators in 2008 in consultation with other members of the CME, including the Presidential Programme on Human Rights, the Ministries of Foreign Affairs and Defence and the ACP.

Oxy established a new security standard including VPs as a required framework for security. The company also collaborated with International Alert and FIP to test a conflict-sensitive business practices risk assessment toolkit. This was applied to a new project in a highly conflictive region. In Colombia, BP employs public security relationship advisers who are accountable for promoting compliance with the VPs in the implementation of a security agreement with the Colombian government. BP has also supported training for security providers in Colombia (as in other key locations where the company operates). BP maintains ongoing support for educating public security forces in IHL, through sponsorship of the IHL military training track in Cupiagua. Training at the facility combines classroom time and re-enactment of situations through role play.195

From the start of the conflict in Colombia until the late 1990s, "the private sector was generally absent from the politics of peace".196 This coincided with a period when the conflict was relatively contained and largely manifested itself in remote rural areas where few businesses had a presence. The conflict had little or no impact on growth and foreign investment, and the private sector was able to develop, along with industry, manufacturing and the services sector. Consequently, as many business leaders admit today, the private sector had no compelling reason to mobilize in favour of ending the conflict, whether through a peace agreement involving fundamental social reforms or a strong military campaign. Peace was seen as a strictly state affair.197

#### *Bridging frameworks in practice*

The VPs implementation in Colombia, arguably among the most far-reaching SSR initiatives in the country – albeit not directly under this name – was triggered in the first place by a small but robust group of companies from one sector (extractives) with the support of a core group of donor countries. This first step had the clear purpose of changing the nature of problematic interactions between extractive businesses and public as well as private security providers.

Thus momentum for reform emerged from an unlikely coalition of non-state actors, but convincingly enough to engage the core protagonists of the security sector. In other words, SSR was triggered by actors lying at best at the periphery of prevailing SSR policy and practice. One should underline that the VPs process in Colombia managed to link up with the agenda for peace of the Colombian government in ways that did not undermine, but rather strengthened, state security actors during a particularly sensitive period of transition and consolidation.

uses business interactions with security forces to create an accountability loop. Transparency and effectiveness of corporate due diligence are

#### **Table 4: Applying the comparative framework to Case Study 3**


#### **Human rights due**  • *Monitoring.* The level of scrutiny for corporate due diligence, as piloted in Colombia for projects implementing the VPs, links up policy and normative standards with credible monitoring mechanisms on the ground. Such a model offers SSR an example of less prescriptive and more collaborative implemen tation approaches that strengthen monitoring as an important function

• *Monitoring*. The core mechanism for the VPs in Colombia, mirroring the managing body of the VPs initiative, is the CME, which has several working groups charged with producing recommendations based on the needs of its members. For instance, the CME has a working group for the verification mechanism, which worked to produce a mechanism that allows it to determine if and how its members are implementing its recom mendations.

#### **50** Pedro Rosa Mendes **51** Business and Security Sector Reform

geared to behavioural transformation of the public and private security forces.

#### **Local ownership**

• *Consultation.* Whereas in SSR standard programming, consultation informs design, in Colombia's VPs approach consultation defines and adapts implementation. It is in this respect a relevant example of evolving consensus through dialogue among stakeholders, and it can show a way to solve SSR's much-debated stiffness in programming. The CME mechanism allows for a participatory definition of issues and activities that in fact understand ownership more as a process than as a concept. The CME's *modus operandi* relies less on assumptions and predefined goals, instead providing for refined contextual awareness in design, review of progress and nuanced evaluation of results.


#### **Stakeholder engagement**

• *Training*. The CME Working Group on Contractors has developed practical tools for companies in managing private security, through the translation of the VPs into concrete on-the-ground actions that are specific to the Colombia context.<sup>200</sup>

#### *Lessons from Case Study 3*

The case of the VPs in Colombia provides valuable insights into how business can be at the forefront of new approaches to peacebuilding, development and indeed state building. From a SSR perspective, the Colombian case illustrates how more inclusive and participatory processes can contribute to substantial gains in effectiveness and accountability, while also offering new tools for monitoring and evaluation. The VPs process in Colombia confirms the validity of public-private partnerships as useful forums to gather momentum for reform in very complex political and security environments. The innovative initiatives from the CME's different working groups provide further opportunities for bridging BHR and SSR. The recent contribution of the CME to the DCAF-ICRC toolkit addressing security and human rights challenges in complex environments201 indicates some progress in closing the gap between business and SSR. In concept and in practice, there are several lessons worth learning for SSR in the Colombian VPs case.

The first lesson is about actors and roles. In theory, SSR is a holistic process involving a broad range of stakeholders and essentially geared towards the transformation of SSG. In practice, SSR is predicated on the centrality of state institutions, functions and officials, and on political will and leadership; furthermore, programming has often been bound by a narrow train-and-equip approach. This state-centred approach answers in part for the underwhelming track record of SSR to date. In reality, SSR has been dominated by unchallenged assumptions embodying a resilient peacebuilding paradigm: that peace agreements offer the possibility for accelerated change, sustained by high levels of local ownership and support from local elites.202 This is a classic example of the possibilities of SSR being constrained by not understanding the relevant issues and actors from a wide enough perspective. By ignoring the extractives sector as an SSR issue, a key lever is lost to exert potentially positive change.

The Colombian VPs process further illustrates how, to some extent, implementation evolves before programming and how design and evaluation are embedded in implementation via stakeholder engagement. Several companies were already applying the VPs in their operations and others were conducting operational due diligence that corresponds to the VPs standards prior to Colombia formally joining the international initiative.

A third lesson relates to nuanced and robust mechanisms for monitoring and evaluation, setting a higher evidence-based benchmark and what in fact is a continuum of scrutiny, both often lacking in typical SSR programming. The pilot project for VPs performance indicators showed that all companies had tools, methodologies and systems to analyse, record and monitor their risks and impacts, and that companies were identifying risks jointly with stakeholders. The indicator for strategic responsiveness,203 as well as other VPs performance indicators, provides valuable entry points to SSR in terms of accountability of the security sector and evaluation of interventions taking place.

A fourth lesson highlights that due diligence and transformation of security forces are mutually reinforcing and interconnected mechanisms. This process dimension also has normative implications: CME stakeholders have the clear notion – and intention – to carve out an integrative function for the VPs as a platform for dialogue among different initiatives.

The VPs consider and imply implementation at three levels – international, national and project – that have to cohere.204 At project level the VPs require, *inter alia*, risk assessments conducted according to the principles; contacts with security forces; grievance mechanisms and incident reporting; and training of private security providers. At national level implementation includes training of security forces and advocacy and outreach focused on the VPs. At international level the VPs include, *inter alia*, development of implementation guidance, reporting and oversight.

While all three tiers are important, the national level is crucial to build a robust process to improve the situation of human rights in a given country. This creates a credible framework allowing each company to address issues that otherwise would prove too challenging – like training of public security forces. As proven in practice in Colombia, projects emerging in one province can become the basis for a broader consensus at the national level. The possibility of an integrative framework that coheres vertically, with different stakeholders involved in different contexts and linking operational responses with strategic and political decisions, is of particular relevance for SSR.

The VPs process in Colombia is an illustration of how business can be crucial in fostering peace and development. The BHR approach owes a lot to the "principled pragmatism" of corporate actors, as articulated by John Ruggie in his proposal for the UN guiding principles. Unity of purpose and common interest should make business a more important stakeholder in SSR and SSG. That corresponds in reality to the fulfilment of the existing policy.

#### *Summary of findings*

The case of the VPs in Colombia illustrates the transformative potential of committed corporate engagement with a broad agenda for peace. On the ground, where policy meets the challenge of implementation, the Colombian process shows a way forward in bringing a set of corporate monitoring and evaluation (M&E) tools and practices to SSR programming to monitor risks and impacts. Beyond M&E, key findings of Case Study 3 suggest options for businesses to support changes in the culture and behaviour of the security forces.


**54** Pedro Rosa Mendes **55** Business and Security Sector Reform

**c) Activities.** In conflict and post-conflict contexts, a clear insertion of SSR processes into a broader peacebuilding agenda will enhance buy-in and ownership. A corollary of this is that under certain conditions, as seen in Colombia, social peace can prove an interest-based entry point for business to engage in essentially values-based processes like SSR; or, to put it pragmatically, business can find interest in sharing the peace dividend, buying into SSR-related activities, e.g. transitional justice or DDR. Corporate M&E mechanisms developed around sensitive interactions with security forces, mostly in assessing risk, tracking compliance and evaluating impact (e.g. of training), can be used in the context of SSR. Collaborative monitoring mechanisms make monitoring effectively a function of accountability and ownership, crucial to SSR, and activities entailed by SSR (e.g. vetting and certification as part of police reform) are central to corporate due diligence in complex environments.

# The Case for Corporate Security Responsibility

This section develops the case for a broader acknowledgement that respect for fundamental human rights is one common end goal of SSR and BHR. It does so in two steps: first translating lessons into guidance, and then translating guidance into practice.

It first builds on findings from the case studies to suggest an operational matrix of focus areas, guiding the appraisal of categories to be considered in a joined-up approach to security reform and corporate social responsibility. These focus areas are entry points for implementation and support to reform, and are considered at this stage in order to link our methodological framework more explicitly with the operational proposals at the conclusion of the paper. Those suggestions are presented as activities listed under the subcategories outlined in the comparative framework and applied throughout this paper. The prior appraisal of focus areas is justified here for reasons of programmatic validity and strategic referral to specific activities bridging SSR and BHR. A set of recommendations is formulated at the end of this section on the basis of the appraisal of the five intervention areas.

#### **Translating lessons into guidance**

This section assesses five programming areas where business seems to have a role to play in supporting SSR and have something to gain from that engagement. Having already identified the conceptual and policy common ground between SSR and BHR, here we consider focus areas where a meaningful impact can realistically be expected on the ground. Such focus areas are not picked at random, and nor should they seen as prescriptive and binding. They result instead from carefully considering how conclusions presented thus far reveal entry points to guide implementation, with a view to addressing crucial issues while pursuing fundamental principles, all of which were also explained earlier in detail. Moreover, in proposing such focus areas, there is an underlying preference for an approach that avoids piecemeal interventions; that aims at sustainable impact over shorttermism; that fosters respect for human rights in seeking to avoid violations, not merely seeking *ex-post* mitigation and redress; and that understands investment in capacity as a fundamental pillar of institutional transformation. Five focus areas emerge from considering these cumulative criteria:


The choice of these focus areas, from many others possible and with merit, is also anchored in the underlying purpose of advancing linkages between the security sector and business where it matters most: to communities and individuals on the receiving end of dysfunctional security forces. The focus, moreover, is on fragile operating contexts where extractive industries have a significant presence and thus a significant impact – either positive or negative. Finally, the five focus areas should be considered holistically, given their interconnectedness.

Albeit not excluding other relevant frameworks and initiatives, attention is primarily given here to the VPs, the Montreux Document and the ICOC, with a view to enhancing their implementation by different stakeholders in connection with SSR programming. The three initiatives strongly underline the importance

#### **58** Pedro Rosa Mendes **59** Business and Security Sector Reform

of opening the way for new relations to emerge and consolidate, and how existing relations can unfold on a new level playing field. This appraisal of available policy and guidance is seen primarily from the perspective of SSR. Thus this section looks for entry points in BHR potentially serving the general objectives of security reform – not on how SSR can enhance the goals of business. The case studies analysed earlier suggest nonetheless that synergies run both ways.

#### *Stakeholder engagement*

Stakeholder engagement provides an initial platform from which synergies can be developed between SSR and corporate due diligence. Conceptual and policy opportunities for bridging SSR and BHR through stakeholder engagement were analysed in detail in the second section. The paper looks now at how to operationalize such linkages and appraises gains for each side.

The main opportunity for business to contribute to SSR is also companies' first responsibility: to respect human rights. This entails, as a minimum standard of corporate due diligence, engaging with communities on which the company can have an impact. On a voluntary basis, companies also have an interest in engaging with stakeholders at national and international levels. As pointed out by the International Organisation of Employers, businesses acting collectively through their representative organizations can help to provide impetus to make governments more accountable to their own citizens – "in particular at local level".205 A focus on improving public governance and capacity building is therefore particularly relevant.206

Companies should consult with other companies operating in the host country to identify the relevant host-government actors with which to establish the first contact. As a matter of non-prescriptive good practice, companies should initiate a stakeholder mapping exercise of key actors working on security and human rights issues in the host state.207 From an SSR perspective, this opens entry points to operationalize some of the core principles of SSR: the mapping of social and economic agendas provides clear indications of interests at play and potential contributions to reform-related projects, which are crucial elements of local ownership. The relevance of this opening should not be underestimated – nor overlooked. Linking natural endowments with SSR, by allocating a share of royalties, taxes, revenues, etc., has far-reaching impacts in terms of both direct funding of related projects and the longer-term sustainability of change interventions. The bridging of frameworks is particularly relevant when the crossover involves corporate entities reaching out to security actors in countries where governments are less willing to engage in SSR. It is likely that there will nonetheless be some government actors willing to engage with companies to address security and human rights challenges, which increases the importance of good stakeholder mapping and analysis.

Companies should engage with both government and local communities with the purpose of building confidence and personal trust, using interpersonal relations as much as possible. As analysed in the second section, trust is crucial from a business perspective – but no less so from the point of view of SSR. Beyond technical proficiency and regular exchange of information, the ability to build effective partnerships based on mutual trust is key to facilitating and enhancing national ownership and sustainability of SSR processes.208

Early engagement with host governments is also the right way and the right moment to clarify a company's policy in relation to the VPs. This in turn can be the traction for government acceptance, or at least discussion, of fundamental principles and core activities implied by the VPs that are relevant to SSR (as seen earlier in this paper). Again, the value of indirect or informal discussions on cross-cutting matters of SSR and BHR, beyond or outside the umbrella of any formal SSR activity, should not be underestimated. Contacts at different levels with the host government should promote coordinated approaches across ministries (defence, interior, mining, etc.) and other host-government agencies through organizing joint meetings, which can enhance a whole-of-government approach to reform.

Another front of engagement is the regional or provincial government – often the stakeholder with most direct impact on a company's SLO, as seen in the case of Vale in Guinea. Existing guidance suggests that companies seek to establish a protocol agreement with the regional or provincial government "to clarify expectations". The reasoning is also interesting from an SSR angle: attracting investment from other competing locations requires infrastructure, trained local labour and security, and international companies can help with all of these, in collaboration with the local provincial authorities.209

Particularly relevant to ownership and accountability of SSR through multistakeholder initiatives like the VPs is the possibility of companies setting up a security working group to promote coordinated, bottom-up approaches to addressing security and human rights challenges at site level. Security consultations with the community are fundamental to a strong security system. Two methods suggested in relation to implementation of the VPs are a small **60** Pedro Rosa Mendes **61** Business and Security Sector Reform

security working group for problem solving and a larger community security forum for information sharing.

Due diligence is also about credible and robust methodologies that have a place in SSR programming, starting with stakeholder identification and characterization. Valuable guidance in this matter is included in the implementation guidance tools (IGTs) for the VPs. The tools dealing with the most relevant stakeholders from a business perspective – host governments, NGOs and communities – are particularly useful. Among other "sub-tools" (as they are identified in the IGTs210), SSR can find valuable entry points in careful corporate action planning when working with home governments. The core group of donors supporting SSR worldwide overlaps to a great extent with the home states of some of the most important players in the extractive industry.

Home-country governments can assist in providing information about the country and region that can give key inputs into the risk assessment process. They can help with human rights abuse allegations, serving as important interlocutors between the company and the host government. And, perhaps more importantly, they can serve as effective interlocutors in cases where there are risks of inappropriate use of equipment transferred to public security providers by the company (e.g. by bringing pressure to minimize such risks). External support to SSR, in turn, can use each of these instances to channel positive influence over host governments and corporate actors, and rely on companies as interested partners in-country.

Companies operating in challenging environments also have to consider how to engage with public security forces. The option of *not* doing so is barely under the control of companies in most cases, as underlined earlier. While the focus of state security forces is mainly only on early warning and preventive actions, the security requirements of the company's site will dictate their deployment and responsibilities. Therefore, they have to be consulted.211

Equally important is engagement with public forces and the immediate local authorities that might have political or operational responsibility for them. Tangible results might be obtained from a positive consideration of police limitations and opportunities – an intersection of national SSR programming with local projects that draw on corporate stakeholder engagement is in the interest of all actors.212

#### *Risk assessment*

Assessing and monitoring human rights form one of the pillars of the "duty to respect" which business enterprises are expected to fulfil. As such, they represent one of the core principles of the VPs and are also in line with the terms defined by Ruggie's framework.213 Assessment and monitoring of human rights can serve as an entry point from corporate due diligence to SSR programmes. Monitoring should identify those more at risk among particularly vulnerable groups, always considering that "vulnerability can depend on context".214

The corporate responsibility to respect human rights can be directly linked to the imperative for SSR to be "based on an assessment of the security needs of the people and the state"215 and to "address both external and internal threats to people's safety".216 One important corollary is that assessments carried out in the context of SSR programmes or project cycles can, and indeed should, identify potential risks or issues associated with business operations.

A cautionary note concerning the risk of misunderstanding the proposed uses of corporate risk assessments in SSR-related projects should make clear that the purpose of such linkages with BHR is not about disclosure of information or breach of confidentiality. What is sought is, first, an involvement of companies in informing SSR design through their contextual knowledge; and, second, to create and seek opportunities to draw on corporate know-how in risk assessments and facilitate their mainstreaming into groups that often lack such competencies.

Business can play a pivotal role in SSR, from early risk assessment and conflict mapping at the design phase of SSR programmes to monitoring and evaluation later on. At a policy level, such an approach allows for synergies between corporate due diligence and SSR-related strategic security assessments.

While strengthening the technical quality of SSR design, implementation and evaluation, corporate risk assessments as per the VPs standard potentially enhance local (or national, in the terminology of the UN framework for SSR217) ownership of those processes. Ownership, inherently linked to capacity, is a *sine qua non* element for sustainability of SSR.218 In many fragile contexts, poor capacity can limit ownership of SSR at different levels, affecting one or several components of national ownership:219


Business are often ahead of both the state and civil society in terms of capacities essential for an accountable and efficient security sector – capacities that are usually lacking in the broader public sector of many developing countries. Such capacities are not specific to SSG: they involve financial management, budgeting, project design, implementation and evaluation, legal and technical expertise, etc. Considering the four components of national ownership outlined above, business can have a positive impact across the board; but it requires corporate human capital and assets to be used to benefit and support the accountability dimension of security governance, shifting away from supporting the (operational) effectiveness dimension of SSG. Commitment of resources – the fourth component of local ownership as outlined in the UN SSR ITGNs – is as significant to the sustainability of SSR as it is traditionally overlooked as an entry point for a positive business contribution to security reform.

Due diligence can be a relevant entry point from the early stages of building a common national security vision. Due diligence mechanisms can inform the national assessment of security and justice needs, a crucial part of the visioning process at both national and subnational levels. The process of developing a common vision to guide reforms involves not only knowledge gathering but importantly also consensus building, and business has a role to play in supporting such endeavours.220

In contexts where SSR is often conducted, tapping into context and stakeholder knowledge built over time by extractive companies can help in fulfilling two priorities regarding programming challenges in SSR. The first priority is to develop a better understanding of how governments in developing and transition societies actually perceive and define their security problems, minimizing the risk that the peculiarities of local perceptions of security will be downplayed or ignored. A second priority is to enhance understanding of how populations respond to security problems where the reach of the state security system is weak, or states themselves are the cause of insecurity.221 Communal violence can be an example of relevant problems that a serious risk assessment should identify at a local level but which might elude assessments focusing on the broader national security environment.222

Synergies can also work in the opposite direction. Private military and security services constitute a complex interface between SSR and BHR, and an area where legal obligations and good practice by states can, in turn, enhance the corporate duty to respect human rights. The Montreux Document opens several instances for bridging risk assessment in the context of SSR on the one side and assessment, monitoring and reporting as part of corporate due diligence, for instance in relation to PMSC certification, on the other.223

**62** Pedro Rosa Mendes **63** Business and Security Sector Reform

#### *Training*

States are the first guarantors of respect for human rights by protecting such rights against whatever violation. It might be the case, though, that aggression and abuse come from state institutions and actors, or that such institutions lack the capacity or the will to prevent abuse or act against violators. As acknowledged by the signatories to the VPs, companies have an interest in ensuring that actions taken by governments, particularly by public security providers, are consistent with the protection and promotion of human rights.224

Training is one of the areas where companies can directly impact the effectiveness and professionalism of security forces and institutions, when confronted with the fact that such forces received inadequate or incomplete training from their own governments. Examples of competencies that should be enhanced include diffusing techniques such as unarmed combat or use of non-lethal weapons. Capacity building can act as an effective proxy for leverage: a company might consider increasing its leverage by offering training or other incentives, or collaborating with other actors.225

Training should also serve a broader SSR agenda, as an opportunity to bring corporate actors into the realm of reform and coordinate contributions with other stakeholders. In the first place it is about making sure "that all parties use the same language and share the same understanding of a holistic approach to SSR", enabling sustainable change.226 On another level, assisting security forces (public or private) with training on human rights standards and corporate best practice is in itself a powerful policy commitment if used as a mechanism to clarify a company's guiding commitments, values and norms.227 In this regard, policy commitment will also ensure policy coherence.

The models and mechanisms, and allocated responsibilities, for training security forces in human rights and international standards are always context-specific. One of the most common and potentially effective ways to address gaps identified in competencies and capabilities of public security providers is for a company to encourage the government to develop an adequate training programme, and possibly assist it in doing so if necessary. The VPs IGTs suggest a number of steps that should be considered in facilitating a training programme for public security providers.228

The training should link up with monitoring mechanisms (discussed in a later subsection) and be followed through, so that those individuals who have received training are subsequently in a position to apply that training (for example, by ensuring that former trainees are involved in the provision of security services

#### **64** Pedro Rosa Mendes **65** Business and Security Sector Reform

to the company). The company may even wish to consider a review of training periodically.229

In many fragile and conflict scenarios, companies, including multinationals, are often not in a position to refuse having public security forces deployed inside their operating areas. In reality, companies might have to resort to public forces to protect staff, facilities and assets. What companies can and should do is to ensure that those public forces assigned in the area of operations have adequate training. Minimum expected standards should be clarified and included in a specific clause in the memorandum of understanding providing for such deployment; the clause should provide for the obligation for pre-deployment training.230

There may be other partners (e.g. donors, home governments) offering training under the auspices of technical assistance programmes such as SSR. Local partners (e.g. local NGOs, academic institutions and national human rights bodies) can also ensure that the training is specific to the local context. As a matter of enhanced coherence, coordination and impact, training provided or supported by one private company should be linked with similar programmes run or supported by other stakeholders. Companies can:


Training programmes aimed at NGOs and civil society can help them understand the framework of rights and remedies available for vulnerable groups. "Train the trainer" programmes can build and disseminate knowledge even more effectively.233 The support to CSOs in training security forces was emphasized by the OECD-DAC when considering mechanisms to enhance civilian capacity for oversight of the security sector, a key principle of SSR: "Experience shows that cascade training, in which representatives of leading CSOs are provided with the capacity to train others in turn, can be very effective."234

Such linking of SSR and BHR serves long-term goals, for instance justice reform and police reform. Sustainable training and mentoring have equally the potential to produce quick behavioural impacts that matter most when judicial

institutions and procedures are barely in place, or when police lack positive leadership examples within their own ranks to emulate.235 Training for private security providers used by companies should follow the same principles outlined above.**<sup>236</sup>**

Training of public and private security providers also represents an important entry point to gender and other cross-cutting issues. This is particularly relevant in contexts where conflict and multiple forms of gender-based violence and discrimination occur in and around extractive operations – as is typically the case within and around large mining projects.237 Support to SSR should thus consider business-facilitated training of security forces in gender, building their capacity for investigating sexual and gender-based violence cases and furnishing witness protection, as suggested in the UN approach to SSR.238

If training is to produce the desired impact on behaviour and professional performance, it should be supported by and linked to corresponding policies and rules. It should also be part of a comprehensive capacity development strategy that includes proper resource allocation and accountability mechanisms. "Quick-impact projects have their place", reminds the UN Office on Drugs and Crime, but any training must consider the long-term development of a culture that respects and seeks to protect the rights of vulnerable groups.239

#### *Monitoring*

Operating without infringing on human rights is one of society's baseline expectations of business. Meeting this expectation is not just an ethical imperative but also makes business sense.240 A human rights impact assessment is part of every company's responsibility to treat all human beings with respect and dignity while addressing the company's own interests.241 Monitoring of human rights is an essential element of corporate due diligence throughout the operating life of a project, not only when considering impacts or preparing the early stages of an enterprise. Companies know that community relations are hardly reparable once they go sour.

Monitoring focuses on both impacts and remedy. Companies, as per the UN guiding principles, should establish human rights due diligence processes to identify, prevent, mitigate and account for how they address their impacts on human rights; and processes to enable the remediation of any adverse human rights impacts they cause or to which they contribute.242

This in turn implies that companies track the effectiveness of their own response, to verify whether adverse human rights impacts are being addressed. **66** Pedro Rosa Mendes **67** Business and Security Sector Reform

Tracking should be based on appropriate qualitative and quantitative indicators.243 Human rights monitoring by the company also fulfils a function of continuous learning from grievances. This can be a powerful tool for identifying emerging issues – a "heat map" analysis – and highlighting broader opportunities for improvement.

One other feature of due diligence monitoring significant to SSR resides in the creation of control mechanisms for equipment transferred to public security forces. A company should seek to monitor the use of transferred equipment.244 Such a mechanism offers an additional instance for assessing if equipment supplied by the company is being used in a way that infringes on the rights of citizens and communities.

Lastly, effective corporate monitoring mechanisms can feed into the process of needs assessment that should inform any intervention aiming at institutional transformation.

#### *Accountability and oversight*

From an SSR perspective, a crucial contribution from business is its support to strategies and programmes under the framework of democratic governance of the security sector. Business support to civilian oversight of the security sector can foster respect and create synergies with companies' own duties in corporate due diligence. This is relevant in operating contexts where gross human rights abuses can occur inside or in relation to corporate activities. Operating sites should not be areas detached from the surrounding environment. Instead, operating areas (mining sites, for instance) could be (as suggested earlier) the ideal grounds for piloting SSR programmes addressing impunity and poor capacity of security providers. Company support for training of public security forces can go alongside, and build synergies with, programmes directly building civilian capacity to oversee security actors.

As described in the second section, companies have a role in contributing to sound and transparent management of resources, in particular when these are directly linked to or result from business operations. Such is the case in regions with a wealth of natural endowments but a record of weak governance. Questions of governance and transparency should therefore be included in corporate due diligence risk assessments. Companies should engage constructively in multistakeholder processes that provide forums for business-government engagement on transparency and accountability, such as the Extractive Industries Transparency Initiative.

Such practices can have a lasting impact on SSG, not least because dysfunctional security institutions often see in extractives a reason and a means to keep abusing power for their own gain. It is not in the interest of business to be or be perceived as being associated with such behaviour. A clear and unequivocal commitment to transparency in all revenue flows to governments, including a policy of non-payment of bribes, is part of expected good practice from companies. Business should also support the "development and enforcement of relevant national legislative frameworks to ensure transparency and oversight of the financial process".245 This should go along with an engagement with parliamentary committees to understand their roles and responsibilities with regard to oversight of resource management.

Synergies can be built between SSR and BHR if enterprises consider investing in building capacity in management of human and financial resources in the security sector. Adequate management practices should be in place to ensure internal accountability mechanisms, clear reporting lines, transparency and professional conduct for accountable and efficient security institutions. Companies have such capacities, and have an interest in supporting programmes of skills and knowledge transfer at local and national levels.

Financial resource management should be based on the premise that the security sector is subject to common, cross-sectoral principles of public sector management. In the context of SSR, specific know-how on financial management can be linked (through support to training, logistics or other areas) to back political commitment to resource management in line with international good practice. Support to enhance financial planning and management within ministries by donors or other stakeholders, for instance, could go alongside programmes focusing on enhancing management units of security sector actors themselves.246 These programmes can be used as a leverage point by companies interacting with public security forces.

Business engagement in SSR can also be integrated in donor support from "host" countries. Building business-donor partnerships is a new and challenging area for development cooperation. An "enlightened economic self-interest" is part of the incentive for firms to engage as corporate citizens working to help solve local problems, including threats of violent conflict, and to avoid exacerbating situations or taking advantage of "chaos" to further business interests. In that measure, donors and business enterprises should consider giving support to government capacities to define or enforce national legal frameworks and corporate governance regimes in line with international laws/norms, in order to ensure accountability.247

As seen in the examples of the case studies, grievance248 left unaddressed can escalate to the point of becoming a security issue, or being expressed and perceived as such. It is primarily a state responsibility to ensure access to remedy for business-related human rights abuses. For that purpose, states should provide effective and appropriate non-judicial grievance mechanisms, alongside judicial mechanisms, as part of a comprehensive state-based system. Within such a system, operational-level grievance mechanisms can provide early-stage recourse and resolution. State-based and operational-level mechanisms can be supplemented or enhanced by the remedial functions of collaborative initiatives as well as those of international and regional human rights mechanisms.249 This entails states facilitating public awareness and understanding of these mechanisms, how they can be accessed and any support (financial or expert) for doing so. This is especially important in fragile contexts or during conflict, where judicial mechanisms can be weak, ineffective or non-existent. The UN guiding principles establish eight effectiveness criteria for non-judicial grievance mechanisms: legitimacy, accessibility, predictability, equity, transparency, rights compatibility, continuous learning, and stakeholder engagement and dialogue.

From a process perspective, bridging BHR standards of grievance mechanisms (as adopted in the UN guiding principles) with justice reform programmes has far-reaching implications if articulated with justice reform. Gaps in the provision of remedy for business-related human rights abuses could be filled, where appropriate, by expanding the mandates of existing non-judicial mechanisms and/or by adding new mechanisms. These may be mediation-based, adjudicative or follow other culturally appropriate and rights-compatible processes, or involve some combination of these.

Non-state-based grievance mechanisms dealing with business-related human rights offences can be administered by a company, alone or with stakeholders, by an industry association or by a multistakeholder group. They are non-judicial, but may use adjudicative, dialogue-based or other culturally appropriate and rights-compatible processes. These mechanisms may offer particular benefits, such as speed of access and remediation, reduced costs and/or transnational reach.250

#### **Translating guidance into practice**

SSR and BHR serve overarching, and to some extent overlapping, fundamental end goals, as seen throughout this paper. Conceptual and policy similarities between the two frameworks, not least the strong insertion in the peacebuilding and development agendas, can have important implications in relation to implementation on the ground. Potential gains of linking SSR and BHR, in particular in environments where extractives have an imprint in the political economy, are predicated in a more pragmatic and purposed approach to the complex relations of security and human rights. A way forward in making this link in practice, as suggested in this section, will strongly depend on context and situation, but should not lose sight of elements central to the pertinence of this agenda, highlighted earlier in this paper. These generic orientations include the following upfront:


SSR and BHR are predicated in similar paradigm shifts, (re)claiming the person as the focus of security – and not, or not only, the state or the corporation. In SSR this shift takes place in favour of the citizen. In BHR the shift is oriented towards the community, understood as the immediate group(s) directly impacted by a company's operation or business. If SSR focuses on the citizenry, it is in fulfilment of a duty from the state. The evolving focus of BHR in the community primarily results from corporate interest (with negative and positive incentives).251 This nuance under the similarity of new approaches to security is important when further unpacking the ten "commandments" outlined above. In spite of fundamental differences in motives, BHR and SSR have a significant overlap of intent which relates to the end goal of both frameworks: to safeguard the fundamental rights inherent to human beings. Linking SSR and BHR in practice should therefore be guided by this coherence of purpose.

The proposals that operationalize the overall lessons identified in this paper are organized along the same analytical framework, specifically unpacking activities in the subcategories utilized throughout the paper. The list presented here seeks some level of detail and nuance, but it is by no means exhaustive. Many other interventions could be suggested and inferred. To keep focus and coherence, therefore, the potential programming suggestions were narrowed down by keeping those which more directly factor in the security and justice needs of citizens and communities in extractive contexts, and ways to enhance them through sustained support. Such is, after all, the common *raison d'*ê*tre* of both SSR and BHR.

	- **•** Activities entailed by SSR (e.g. vetting and certification as part of SSR) are central to corporate due diligence in complex environments and should cohere at some point: for instance, it does not make ethical or practical sense to have a former soldier or officer vetted out from public security forces just to have that person engaged in providing security to a company in a highly volatile civilian environment.
	- **•** Corporate due diligence mechanisms can play a fundamental role in providing a credible process of investigation in the absence of state mechanisms; depending on the scale and gravity of the offences, it can lead to an intervention via a home government, NGOs or other stakeholder(s).
	- **•** In policing, companies can decide to set up a security working group to

promote coordinated, bottom-up approaches to addressing security and human rights challenges at site level. This can take the form of a small security working group for problem solving and a larger community security forum for information sharing. Both structures can and should interact with the public security forces.

#### 2. Stakeholder engagement.


security and justice needs might be related to a significant extent to the presence or impact of extractive industries. The overall purpose of such consultations should be to gauge effectively the needs and aspirations of the community.


3. Capacity building.

	- **•** *Finance and revenue management*
	- Revenue management is an area where companies can meaningfully support local stakeholders, including public administration at provincial and local levels.254 Direct transfer of skills should *not* exclude capabilities relevant to any public function (e.g. audit, accounting, procurement, etc.) which will enhance SSG, as in other public sectors.255 All stakeholders in SSR processes – from host governments to donor countries and agencies, and

crucially including business – should make a commitment to transparency and accountability in the allocation and management of defence/security resources as part of sound financial management of the security sector. This entails a commitment at all levels to national interests and objectives as a dimension of local ownership of SSR, and the development of – and support for – clear and transparent planning, programming and budgeting processes and systems to implement national objectives.


5. Consensus building.


**74** Pedro Rosa Mendes **75** Business and Security Sector Reform

# Conclusion

This paper makes the case for bridging frameworks and building synergies by identifying entry points and overlaps, showing that SSR and BHR share some crucial principles and objectives besides the obvious recurrent coincidence of operating contexts. The paper also appraises the extent to which BHR can enhance or directly contribute to the core principles of SSR as defined by the UN: the centrality of national ownership; the need for flexible and tailored support and gender-responsive approaches; the centrality of integrity of motive, accountability and resources for the effectiveness of international support and coordination; and the importance of monitoring and evaluation against specific benchmarks. Business can, indeed it should, be called upon to contribute to each of them.

The comparative analysis between the approaches of SSR and BHR started by identifying a set of conceptual linkages and overlaps, and potential practical entry points for bridging the two fields with a view to synergizing and enhancing implementation. The appraisal of linkages followed a comparative methodology using a framework based on relevant conceptual and policy documents for SSR and BHR, supplemented by other guidance and best practice.

The comparative framework is organized along principles, actors and activities. In turn, each of these categories was broken down into issues and focus areas that emerge as having the most potential for yielding results in a concerted approach to SSR and BHR. From 12 such focus areas, three stand out as primary areas of concern to which stakeholder commitment should be geared, given their centrality to the overall end goals of BHR and SSR. Moreover, two of the focus areas (human rights and rule of law; accountability and oversight) refer to *sine qua non* principles of any intervention addressing security and human rights, and to their fundamental relation with underlying values of a democratic society; the third area (stakeholder engagement) operationalizes and influences the complex dynamics of actors and activities. Each of the three areas opens specific opportunities for bringing business to security reform:


This suggests two main areas for operationalizing links between SSR and BHR. One can be called the interface of integrity: areas of intervention that essentially build up the ethical fabric of the security sector (the way it is governed, and how it interacts internally and externally). The other is the interface of service provision: areas that deal with the quality of security and justice provided to citizens and

#### **78** Pedro Rosa Mendes **79** Business and Security Sector Reform

communities. The former has essentially to do with good processes; the latter convokes upfront the best behaviours.

The validity and pertinence of these proposals are first tested against a set of real scenarios representative of cross-cutting issues in relevant contexts. For that purpose, three case studies are presented in which challenges to security and human rights provide a broad canvas to appraise the relevance of SSR and BHR in complex environments, and the comparative advantage of linking the two approaches. Analysis of the three situations yielded important lessons for synergizing efforts aimed at transforming dysfunctional security sectors with the imperative of corporate respect for human rights.

The rather conservative and narrow approach to stakeholder engagement in SSR and corporate responsibility contradicts what should be complementary levels of consultation and assessment processes, linked to coherent systems of grievance and redress. Meaningful stakeholder engagement through combining interests from SSR and BHR brings in a wealth of perspectives on security that should inform community consultation at local and operational level, and donor coherence of intent at strategic and policy level.

New initiatives, and new momentum in older ones, are bound to break the wall separating the fields of SSR and BHR. The Montreux Document, the ICOC, the VPs and the UN guiding principles provide a vast framework for BHR that essentially addresses issues arising from security engagements or interactions by business – including the business of security provision. Human-rights-related standards are increasingly reflected in commitments undertaken by industry bodies and multistakeholder and other collaborative initiatives, through codes of conduct, performance standards, global framework agreements between trade unions and transnational corporations, and similar undertakings.

In the field of SSR, a growing interest in a BHR approach might be explained by the emergence of new security challenges related to natural resources. To a certain extent it was inevitable that SSR, rooted in development policy and discourse, should understand a broader role for business in sustained development. From another angle, corporate actors are often important stakeholders in SSR contexts. Their contribution can be negative or positive – but cannot be eluded.

The bridging of BHR and SSR will likely be pushed further by realities on the ground, be they economic, geopolitical or environmental. Increased pressures, increased risks and increased demand also highlight increasing interest in tackling issues and challenges in collaborative ways between business and security reform. For the next two decades at least, global demand for raw minerals

and hydrocarbons will not abate. Extractive companies will venture further into frontier territories where political risks are higher, and exploration costs for mining, for instance, have reached a historic new high in global prices in recent years.259 It is expected that in the next 20 years 90 per cent of oil reserves will come from frontier countries and developing economies, compared to 60 per cent just three decades ago. Analysts estimate a threefold increase in the cost of discovering each new barrel of oil and gas over the last decade.

Evidence shows that resource nationalism is on the rise. Companies are usually the losing stakeholders when opposed by local constituencies: companies' long-term financial objectives can be cut short by immediate, short-term political/ electoral needs of ruling elites. Businesses therefore have an interest in stable, democratic environments where conflicts can be avoided by dialogue and security providers are both efficient and accountable.

On the other hand, SSR needs business as a crucial stakeholder in many weak governance zones, both for supporting transformation of the core security actors and to enhance the capacity of communities and groups to participate in their own security arrangements. In many countries undergoing SSR, extractives provide crucial resources on which the sustainability of reform and the conditions for democratic consolidation depend. Corporate actors are also among the stakeholders staying longer on the ground, typically for decades, providing a breadth of time for engagement in reform unmatched by most developmental agencies and partners. In more pragmatic parlance, while business must afford support to security governance, SSR cannot afford dispensing with the powerful contribution companies can make to security sector transformation.

Global pressures and new obligations for companies to disclose information concerning their overseas investments are also accelerating. In today's international markets, a company's reputation and the quality of its human capital have overtaken plant, equipment and property as its most valuable assets. For companies listed on the stock exchange, reputation accounts for at least 50 per cent of total value. One study suggests that customer boycotts of demonized companies cost around £2.6 billion a year.260

From an empirical perspective – the view from the common operating grounds of SSR and BHR – it is striking to confirm how both approaches share many, and many of the greatest, challenges. This paper also assessed to what extent the gains are many and the opportunities are still mostly not fulfilled for bridging the two frameworks.

The challenge ahead is to define a common template for greater collaboration and unity of effort. Linking BHR with SSR is a lot about integrating what is voluntary with what is mandatory. It also demands acknowledging that governance of the security sector might be the conceptual and operational ground where the social licence to operate meets the social licence to reform.

**80** Pedro Rosa Mendes **81** Business and Security Sector Reform

#### **Notes**

	- 32 See "The UN Guiding Principles on Business and Human Rights: A report from the Kenan Institute for Ethics" (Durham, NC: Duke University, 2012), p. 4.
	- 33 See Ruggie, note 31 above, p. 13.
	- 34 John Ruggie, "Statement to UN Human Rights Council", Geneva, 30 May 2011, http://business-humanrights.org/sites/default/files/media/documents/ruggie-statement-to-un-human-rights-council-30 may-2011.pdf.
	- 35 John Ruggie, "Keynote remarks", Extraordinary Plenary, Voluntary Principles on Security & Human Rights, Department of Foreign Affairs & International Trade, Ottawa, 15 September 2011.
	- 36 See Roy Isbister and Tom Donnelly, "International markets for security and military assistance", Saferworld (Paris: OECD, 2012)*.*
	- 37 Isbister and Donnelly, ibid., is one of eight thematic papers under the OECD-DAC INCAF project. Each paper explores a specific global factor. The synthesis report is OECD-DAC, "Think global, act global: Confronting global factors influencing conflict and fragility", 2012, www.oecd.org/dac/conflictandfragility/globalfactors.htm. See also OECD-DAC, "Service delivery in fragile situations: Key concepts, findings and learning", off-print of *Journal on Development*, Vol. 9, No. 3 (2008).
	- 38 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" is the fruit of a joint initiative by the Swiss government and the ICRC. The document recalls existing legal obligations of states and PMSCs and their personnel, and provides states with good practices to promote compliance with IHL and human rights law during armed conflict. It is available at www.icrc.org/eng/assets/ files/other/icrc\_002\_0996.pdf and www.eda.admin.ch/psc.
	- 39 The ICOC, note 14 above, is a multistakeholder initiative convened by the Swiss government. It aims to set private security industry principles and standards based on international human rights and humanitarian law, and to improve accountability of the industry by establishing an external independent oversight mechanism. See www.icoc-psp.org/.
	- 40 Bettercoal was established in 2012 by a group of major coal buyers with the aim of promoting continuous improvement of corporate responsibility in the coal supply chain. See http://bettercoal.org/index. aspx.
	- 41 UN Global Compact and PRI, "Guidance on responsible business in conflict-affected and high-risk areas: A resource for companies and investors" (New York: UNGC Office and PRI, 2010), www. unglobalcompact.org/docs/issues\_doc/Peace\_and\_Business/Guidance\_RB.pdf.
	- 42 Global Reporting Initiative, "Sustainability reporting guidelines & mining and metals sector supplement" (Amsterdam: GRI, 2011), www.globalreporting.org/resourcelibrary/G3-English-Mining-and-Metals-Sector-Supplement.pdf. The initiative promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development. There is more on the initiative at www.globalreporting.org/Pages/default.aspx.
	- 43 See, among other documents by the IFC, the comparative analysis in IFC, "The UN Guiding Principles on Business and Human Rights and IFC Sustainability Framework" (Washington, DC: IFC, n/d), www.ifc.org/wps/wcm/connect/c3dedb0049c51e71886d99da80c2ddf3/UNGPsandIFC-SF-DRAFT. pdf?MOD=AJPERES; IFC, "The International Bill of Human Rights and IFC Sustainability Framework" (Washington, DC: IFC, n/d), www.ifc.org/wps/wcm/connect/dc3e948049800ad7ac6afe336b93d75f/ IBHR\_and\_IFC\_Policies%2BPS-DRAFT.pdf?MOD=AJPERES.
	- 44 Ruggie, note 31 above, p. 5.
	- 45 UNDP, *Deepening Democracy in a Fragmented World*, Human Development Report 2002 (Nairobi: UNDP, 2002), p. 125, Box 5.4.
	- 46 Ruggie, note 31 above, p. 9, para. 30.
	- 47 The ILO has had responsibility for labour standards since 1919. See Ruggie, note 31 above, p. 11, para. 42.
	- 48 Jeffrey Sachs, *The End of Poverty* (New York: Penguin Press, 2005); Jeffrey Sachs, *Common Wealth* (New York: Penguin Press, 2008); Jeffrey Sachs, *The Price of Civilization* (New York: Random House, 2011).
	- 49 Joseph Stiglitz, *Globalization and Its Discontents* (New York: W. W. Norton, 2002); Joseph Stiglitz, *Making Globalization Work* (New York: W. W. Norton. 2006); Joseph Stiglitz, Jean-Paul Fitoussi and Paris

Group, *The G20 and Recovery and Beyond: An Agenda for Global Governance for the Twenty-First Century*, PDF/e-book (Rome: OFCS and LUISS Guido Carli University, 2011).

	- 70 "The extractive sector oil, gas and mining utterly dominates this sample of reported abuses with two-thirds of the total." Ruggie, note 31 above, p. 8, para. 25.
	- 71 Ibid.
	- 72 Ibid., Principle 4, p. 23.
	- 73 United Nations (2008), note 64 above, p. 6.
	- 74 United Nations, note 60 above, p. 92.
	- 75 United Nations, *Guiding Principles on Business and Human Rights* (New York and Geneva: United Nations, 2011), Principle 5. Available at: http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR\_EN.pdf.
	- 76 UNDP, note 45 above.
	- 77 MIGA and World Bank, note 58 above, p. III-17.
	- 78 Ibid., p. A-2.
	- 79 John Ruggie, "Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development", UN Doc. A/HRC/8/5, April 2008, p. 22, para. 84, http://daccess-dds-ny.un.org/doc/UNDOC/GEN/G08/128/61/PDF/G0812861.pdf?OpenElement.
	- 80 Montreux Document, note 38 above, p. 27, para. 68 et seq.
	- 81 Isbister and Donnelly, note 36 above, p. 22.
	- 82 IFC, *Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in Emerging Markets* (Washington, DC: IFC, 2007), p. 10.
	- 83 BSR, *Guide to Engaging with NGOs* (New York: RayDesign, 2001), pp. 6 et seq.
	- 84 Ethical Funds, Glossary, www.ethicalfunds.com/Pages/SRI/Glossary.aspx.
	- 85 John Ruggie, "Business and human rights: Further steps toward the operationalization of the 'Protect, Respect and Remedy' framework", UN Doc. A/HRC/14/27, 9 April 2010, p. 15, www2.ohchr.org/english/issues/trans\_corporations/docs/A-HRC-14-27.pdf.
	- 86 Robert G. Boutilier and Ian Thomson, *Modelling and Measuring the Social License to Operate: Fruits of a Dialogue Between Theory and Practice*, paper for the International Mine Management Conference in Queensland (2011), p. 2. http://socialicense.com/publications/Modelling%20and%20Measuring%20 the%20SLO.pdf.
	- 87 The three case studies are based on desk research and public references and material. Previous knowledge and work of the author of this paper in Guinea and West Africa, as an academic researcher and independent consultant, were *not* used, except as an element against which to check the reliability of open-sourced information.
	- 88 On Guinea as a fragile country see African Development Bank, "Republic of Guinea country strategy paper 2012–2016" (Abidjan: African Development Bank and African Development Fund, 2011), www. afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Guinea%20-%20CSP%202012- 16.pdf.
	- 89 Ibid., p. 8.
	- 90 IMF*,* "Guinea: 2011 Article IV consultation and requests for a three-year arrangement under the extended credit facility and for additional Interim assistance under the enhanced initiative for heavily indebted poor countries", IMF Country Report No. 12/63 (Washington, DC: IMF, 2012), Attachment I, p. 47, www.imf.org/external/pubs/ft/survey/so/2012/car040612a.htm.
	- 91 Human Rights Watch, "Un lundi sanglant: Le massacre et les viols commis par les forces de sécurité en Guinée le 28 septembre" (New York: HRW, December 2009).
	- 92 The reform of the justice and security services sectors was launched in 2011. For the expected impact of SSR in the economy see IMF, note 90 above, p. 55.
	- 93 Government of the Republic of Guinea, "Priority action plan" (Conakry: Government of the Republic of Guinea, 2012); African Development Bank, note 88 above, p. 7.
	- 94 IMF, note 90 above, Attachment I, p. 58
	- 95 Ibid., Attachment I, p. 48.
	- 96 Ibid., p. 12.
	- 97 Ibid.

**86** Pedro Rosa Mendes **87** Business and Security Sector Reform


**88** Pedro Rosa Mendes **89** Business and Security Sector Reform

	- OECD-DAC (2008), note 7 above, p. 230.
	- UNODC-USIP, note 234 above, p. 34.
	- Ibid., p. 54.
	- A comprehensive assessment of negative impacts on women and children is included in Oxfam Community Aid Abroad (Australia), *Tunnel Vision: Women, Mining and Communities* (Victoria: Oxfam Community Aid Abroad, 2002), pp. 5–7.
	- United Nations, note 161 above, p. 46.
	- UNODC-USIP, note 234 above, p. 35.
	- BSR, "Conducting an effective human rights impact assessment", 2013, p. 6, www.bsr.org/reports/ BSR\_Human\_Rights\_Impact\_Assessments.pdf.
	- Ibid.
	- Ruggie, note 11 above, Guiding Principle 15.
	- Ruggie, note 11 above, commentary to Guiding Principle 20.
	- ICMM, note 211 above, p. 43.
	- United Nations, note 161 above, p. 22.
	- Ibid., p. 106.
	- OECD-DAC (2001), note 7 above, p. 70.
	- "[A] grievance is understood to be a perceived injustice evoking an individual's or a group's sense of entitlement, which may be based on law, contract, explicit or implicit promises, customary practice, or general notions of fairness of aggrieved communities." Ruggie, note 11 above, commentary to Guiding Principle 25.
	- Ibid.
	- Ibid., commentary to Guiding Principle 28.
	- It should be recognized, on a cautious note, that "Internationally, there is no consensus as to the basic definition of 'community safety', much less how to achieve governance goals related to community safety." C. Whitzman, R. Zhang, J. Steinborner, S. Petris, A. Smith and C. Luong, "Community safety indicator project" (Melbourne: University of Melbourne and Australian Institute of Urban Studies, 2006), p. 6.
	- Local policing partnership boards were for instance rolled out in each police division by the Sierra Leone Police in 2002–2003 with the support of the UK's DFID. See Peter Alexander Albrecht, *Transforming Internal Security in Sierra Leone: Sierra Leone Police and Broader Justice Sector Reform* (Copenhagen: Danish Institute for International Studies, 2010).
	- See for instance OSCE, *Good Practices in Basic Police Training Curricula Aspects* (Vienna: OSCE, 2008), pp. 12–18; OSCE-DCAF, *Guidebook on Democratic Policing* (Geneva: OSCE-DCAF, 2009).
	- See for instance the interesting cases setting good examples in mining regions in Peru and other countries, compiled by the ICMM. See: Dave Prescott, *Mapping in-country partnerships* (London: ICMM, 2010), available at: https://www.icmm.com/document/783.
	- On the case for breaking up the exceptionality of the security sector in relation to good governance standards and principles of public services in general, see Nicole Ball and J. Kayode Fayemi (eds), *Security-Sector Governance in Africa: A Handbook* (Ikeja: Centre for Democracy & Development, 2004).
	- A case in point has been happening since 2010 in Guinea, with the dynamics of SSR and development feeding into an agenda of public and private integrity involving the extractive sector through various donor-supported programmes, for instance with a discrete but far-reaching project of the Revenue Watch Institute.
	- Ruggie, note 11 above, commentary to Guiding Principle 28.
	- Ibid.
	- An in-depth analysis of production costs at Anglo American's copper division, Rio Tinto's iron ore division, Xstrata's coal division and BHP Billiton's Escondida copper mine (one of the world's largest) shows that in all cases production costs rose by at least 50 per cent between 2007 and 2011. Recent investments are bigger, more expensive and more risky. Citi estimated in 2012 that capital expenditure in the mining industry globally quadrupled from \$20 billion in 2004 to an estimated \$88 billion in

**92** Pedro Rosa Mendes

2012. Paul Stevens et al., *Conflict and Coexistence in the Extractive Industries* (London: Royal Institute of International Affairs Chatham House, 2013), p. 7.

260 Lucy Amis, Peter Brew, and Caroline Ersmarker, *"Human rights: it is your business"* (London: The Prince of Wales International Business Leaders Forum, 2005), quoting *The Independent*, 21 May 2005.

**Business and Security Sector Reform: The Case for Corporate Security Responsibility** Pedro Rosa Mendes

Challenges to security and human rights involving extractive and other industries gave rise to an evolving framework of policy, standards and good practice generally known as business and human rights (BHR). Problems with inefficient and unaccountable security institutions are addressed by security sector reform (SSR). From an empirical perspective – the view from the often mutual operating grounds of BHR and SSR – both approaches share many challenges, as well as end goals. It is thus striking that only on rare occasions are challenges in governance of the security sector addressed upfront as problems of poor resource governance, and vice versa. This paper describes the grounds where SSR and BHR coincide in principles, actors and activities, and which synergies can be built on that base. It makes the *business case* for SSR, and the *SSR case* for business. The paper assesses how SSR can channel resources and know-how from business to address critical challenges related to ownership, capacity and sustainability of reform processes. Opportunities for bridging BHR and SSR are drawn from a broad range of policy and guidance, and by looking at lessons from case studies on Guinea, Colombia and Papua New Guinea. SSR and BHR should not collide; ideally, they should cohere. A variety of multistakeholder initiatives open new opportunities to bring this about, with particular relevance to SSR in extractive environments. The overall conclusion, supported by practical propositions for implementation, is that the existing policies and standards in SSR and BHR already allow, and call for, a less rigid approach to the challenges addressed in both fields.

**Pedro Rosa Mendes** is an SSR officer with DCAF's International Security Sector Advisory Team, supporting field advice, training and developing tools and guidance for SSR. He has reported and researched for over two decades on human security issues, with an emphasis on conflict resources, war economies and transitional justice. He is also an award-winning author, with reportage, fiction and essays published in several languages. Pedro Rosa Mendes holds a degree in law from the University of Coimbra, a master's in history from the EHESS in Paris and a CAS in civilian peacebuilding from the University of Basel and Swisspeace.

**SSR Paper 13** **SSR Paper 13**

**Business and Security Sector Reform: The Case for Corporate Security Responsibility**

**Business and Security** 

**The Case for Corporate** 

**Security Responsibility**

**Sector Reform:** 

Pedro Rosa Mendes