United States foreign policy is underpinned by a three-pronged strategy of diplomacy, development and defence within an era of extremely tight US fiscal and budget constraints. As former US Defence Secretary, Robert Gates stated in 2011, “the overarching goal will be to preserve a US military capable of meeting crucial national security priorities, even if fiscal pressure requires reductions in the force’s size.” While not limited to, the focus of US foreign policy on denying safe havens for trans-national terrorists, geo-political stability, access to resources and commodities and working through bi-lateral security treaty obligations. This paper puts forward the concept that multi-national corporations, particularly those from the extractive sector, with 10-20 year project life cycles, their access to global capital funds and the attractive return on investment in unstable states, could act as a force multiplier for the US military and signal a new phase in civil-military operations.
Corporate Stability Operations a Post-Afghanistan Opportunity
In a recent Small Wars Journal paper, Irregular Warfare and the Two Minds of the Venture Capital Green Beret, EM Burlingame says that an economy can only be created and sustained through boundless energies and limitless creativity of the people living at the expansive, chaotic edge of a system, employing the Mind of the Disruptor to establish new assets and wealth. While the post-Afghanistan security environment may mean pulling back to core principles for Western armed forces, it is also an opportunity to engage disruptive thinkers so we can adapt as fast as our enemies.
Despite a war weary nation and as the United States and its coalition partners prepare to withdraw from Afghanistan insurgencies will continue to threaten the stability of many regions across the world. Post- 2014 Afghanistan will remain high on the US watch list of states teetering on the edge of failure along with a host of other nations with the potential to provide a new era of trans-national terrorists or an open door policy of influence to Iran.
At the same time it is imperative that the US maintains a strong and enduring strategic posture to insure against the consequences of instability and in the face of a rapacious China that is increasing its ownership of infrastructure of key commodities around the world. China’s current posturing in the South China Sea is a case in point. While the current application of counterinsurgency may be at the end of its military life this paper argues that the US military and its bilateral partners in other nations fighting insurgencies, such as the Philippines, could turn to the corporate sector and enter a new phase of counterinsurgency or what could be described as corporate stability operations.
In a 2009 Rand Corporation paper Corporations and Counterinsurgency, Rosenau et al emphasised lessons for the US military and how US policy makers often overlook the provision of security outside the state structure. This paper goes further and recommends a strategic partnership between multi-national corporations and the US military for future stability operations where the US has a foreign policy priority. The resource sector or extractive industries tend to have the financial capacity, long project time frames and deep footprints in a foreign country’s local and national political landscape required for a counterinsurgency or stability operation to be effective. Given the attractive return on investment from oil, gold, copper and other commodities, resource companies such as ExxonMobil, BHP Billiton, Rio Tinto, AngloGold Ashanti and Chevron are prepared to embark on major projects in conflict or post conflict environments.
Alignment of multi-national corporations and US Command Operations
The US Africa command mission statement stipulates that: "U.S. Africa Command protects and defends the national security interests of the United States by strengthening the defense capabilities of African states and regional organizations and, when directed, conducts military operations, in order to deter and defeat transnational threats and to provide a security environment conducive to good governance and development." With the exception of conducting military operations, resource companies operating in Africa such as Shell in Nigeria or AngloGold Ashanti in Mali or PETRONAS in South Sudan require the same secure environment and good governance to protect their people and assets. These resource companies embark on significant economic development projects requiring a careful study of the human terrain and HUMINT as well as building connections into community leaders, potentially complimenting the US mission in Africa.
As with US military operations in Africa, Asia or South America resource companies operate in complex environments requiring an in-depth analysis of areas, structures, capabilities, organizations, people, and events (ASCOPE), in order to understand the human terrain. This is not about corporate social responsibility where global companies feel compelled to support local communities in order to be positively perceived by growing numbers of politically-correct international monitoring organisations. While global corporations should adhere to the Voluntary Principles on Security and Human Rights, it should not lead to cultural and social engineering in an attempt to avoid being morally stigmatized into providing free social and community services. It is not about creating a corporate welfare trap. That is a blanket that became wrapped around much of our COIN efforts in Afghanistan, led by many Western political leaders with a deep confusion as to why troops are committed. One minute Western Governments state we are defeating terrorism and the next they declare we are using our military to drive a cultural agenda through a government or international NGO welfare scheme.
Resource companies are focused on stability in order to reduce the threats to their people and assets. The US and host nation security forces are focused on stability in so called ‘grey-areas’ of some countries to prevent them from becoming breading and training grounds for regional or global terrorism. It also advances US foreign policy interests by building a stronger and more reliable regional partner for trade or mutual defence obligations. Taken together we are presented with an opportunity to shape the operating or project environment in order to reduce corporate security risks and establish local relationships that allow foreign investment and US foreign policy to co-exist. The Guiding Principles for Stabilization and Reconstruction published by the United States Institute of Peace and the US Army Peacekeeping and Stability Operations Institute, asserts that security is a the platform for development and stable governance. The authors acknowledge that while progress has been made by the US to leverage and coordinate civilian and military assets it still lags behind the adaptive abilities of the enemies of peace. Where there is not a direct war, the human security imperative cannot be delegated only to peacekeepers or military intervention forces. Even in Afghanistan, a focus on getting the full productive operation of the Mes Aynak copper mine Logar Province, may have been far more effective in delivering stability and assisting in the war effort, than any Western government aid program. Here is an example where a unity of effort between the US military the Afghan Government and multi-national corporations could have been tested to deliver and sustain a military objective. This does not overlook the enormous challenge in reducing large scale violence, restoring public order, physical security, territorial security and improving the legitimacy of the host government in an environment influenced by insurgencies.
Corporate Foreign Investment and US Military
In Rethinking Insurgency, Steven Metz suggests different ways of thinking are required to defeat contemporary insurgencies. Insurgencies can destabilise regions, adversely affect resource flows, and markets; the create avenues for transnational crime; humanitarian disasters and transnational terrorism. Metz argues that given this, the U.S. goal should not automatically be the defeat of the insurgents by the regime (which may be impossible and which the regime may not even want), but the most rapid conflict resolution possible. It may be difficult to find examples where a rapid end to conflict involving insurgencies has actually been achieved. However, given the time it takes to eliminate the seeds of an insurgency, coordinating with resource companies with their generationally long project operating timeframes, along the focus on economic development could contribute towards village stability at the local level and build a stronger regional partner at the national level.
The areas of operations for US Command and the location of hydrocarbons and mineral resources often overlap. Minerals are in fixed locations and companies must invest significant funds to develop and operate their mining projects. Resource companies require the same environmental factors to establish a more predictable area of operation as US foreign policy for some of its important regional strategic partners. This includes protecting and separating the population from the insurgents, training and advising the host government’s security forces, restoring law and order, reconstruction of basic services and functioning infrastructure. In Nigeria Shell not only supports the police force but also provides what the military would describe as a range of non-kinetic support in healthcare, education and agricultural services. At the same time US AFRICOM is concerned with Islamic extremism and terrorist havens while ensuring Nigeria has adequate military training and support to defend itself against anti-government forces. Could US AFRICOM military planners benefit from working more closely with corporations such as Shell?
This proposal is not without political and public challenges and politically correct reasons why such a partnership should not be considered. Shell has learnt the hard way in Nigeria with human rights organisations quick to point the finger. Shell’s stability and community approach has more to do with reducing security risks than being socially responsible corporate citizens. Similarly, in seeking to address hot-spots of instability, defeating insurgencies and removing the conditions that support trans-national threat organisations, the US military is never going to receive praise from well-meaning international monitoring organisations who take their own freedom for granted.
The Philippines is another example where multi-national corporations could be seen as potential partners in delivering benefits to US foreign policy and military objectives. Given the US foreign policy interests are ‘pivoting’ back to the Asia-Pacific region, the US requires the Philippines to be a stable and economically strong regional partner. The Philippines has also been at the forefront of the global war on terror, with a specific focus of US military advisors in Basilan and Zamboanga, Southern Mindanao. Philippines has large deposits of gold, copper and other extractable mineral wealth, especially in Southern Mindanao. At the same time many areas of the Philippines provide the right conditions for criminal banditry, terrorists and insurgent groups not only to destabilise the Philippines but also to plan, train and prepare terrorist operations in other countries. Joint Special Operations Task Force (JSOTF-P) has been active since 2002 and consists of rotating units of US military advisors focused on to targeting the Abu Sayyaf Group, which has ties to al Qaeda and Jemaah Islamiyah.
As highlighted in a 2006 Military Review article by COL Gregory Wilson, Anatomy of a Successful COIN Operation, the US modus operandi in the Philippines is to work “by, with and through” the indigenous forces. US military planners of Operation Enduring Freedom – Philippines developed their strategy by adopting Gordon McCormick’s Diamond Model. The principles of the Diamond Model of targeting insurgent safe havens, infrastructure and support, developing an indigenous security force, enhancing government legitimacy and control, focusing on the people’s needs and security are precisely what a resource company looks to manage in order to reduce their exposure to risk. The Philippines Armed Forces (AFP) Commander of Eastern Mindanao believes the New People’s Army (a Communist insurgent group) is the military’s biggest problem with more than half of the NPA’s force in Mindanao – twenty-seven NPA fronts. They pose a massive threat to Philippine stability, distract the AFP from fighting Abu Sayyaf and regularly target mining operations with grenades, RPGs and high powered weapons.
US military assistance also aims to support the Armed Forces of the Philippines (AFP) transition away from being a domestic focused defence force to an outward one, and to help the country establish a credible maritime security presence and capability. The Philippines has one of the largest undeveloped copper-gold projects in the world located in Southern Mindanao. The Tampakan Copper Gold project is enormous and requires USD5.9 billion of capital investment. If it proceeds, the project could be a ‘game changer’ for Southern Mindanao and Philippine, providing a strong economic growth platform for strengthening US/Philippine strategic objectives. There is an overlap between the need for stability in an area of the Philippines that has suffered from insurgent groups and the US need for a stronger regional partner with an outward focused defence force who can contain and eliminate trans-national terrorist organisations. US military planners could look to develop a civil-military operations partnership with the right multi-national corporate in the defeat threats that undermine stability in the Philippines and generates the revenue to modernise its armed forces. This is in the interests of US foreign policy in Asia-Pacific. It may be all a matter of how far military leaders and foreign policy planners believe it is in their interests to explore a new strategic arrangement.
This paper argues that multi-national corporations, particularly those from the extractive sector could act as a force multiplier for US military and foreign policy planners. The social, economic development and security activities required by a resource company provide an opportunity for civil-military operations or a new phase of counterinsurgency that may be unconventional, but proves highly effective. It does not require more boots on the ground, therefore appealing to fiscal constraints and working around increasingly strict rules of engagement or the need for US troops in sensitive conflict environments.
No doubt such a proposal is not without fault and pitfalls requiring further exploration. It does not mean the militarisation of corporations or a new COIN fad. But if we can hold back the legal and political affairs departments, who are an anathema to disruptive thinking, then we may enable the US military to recalibrate their own efforts and resources across a wider AO. Given the US military is one of the most adaptable in the world, with an entrepreneurial mindset there may be merit in factoring this new partnership into current or future stability operations.
About the Author(s)
In many countries today "security" is measured -- not so much in terms of how the economy of one's own individual country alone is doing -- but also in terms of how the economy of other countries and the global economy as a whole are doing. Given this reality, how then should we:
a. View multinational corporations generally? And
b. View the MNC/military partnership being suggested here?
There are three thoughts that spring immediately, almost instinctively, to mind when I read this article.
First - altruism may be a by-product, but very, very rarely the cause of any particular action - most especially with an organization. This applies even to charitable organizations who, like any other group of people, may produce an altruistic product, but eventually find themselves acting for the organization's best interest.
Second - there is a reason why MNCs are considered non-state actors. For our purposes here, one of the reasons is that the interests of the organization are served over an above the interests of state. Shell may fly a Dutch flag and have its main office in the UK, but it hardly takes into consideration the interests of either of those countries when making corporate decisions.
Third - the track record to active partnering between the government and private sectors vis-a-vis foreign endeavors falls into one of two camps...either purely exploitative and extractive or a mother country focused mercantilism.
So what does this mean? Primarily, we can't trust corporations to act in any interest other than their own, and not surprisingly, yoking ourselves to them invites great risk. Better to create, foster, and support a locally created environment of business than to impose one.
While I agree that MNC's can offer a cheaper way to spur development and act as a force multiplier for the COIN operator, I have reservations with its overall compatibility with political COIN goals. The presence of American oil companies in Iraq offered a perfect propaganda opportunity for insurgent forces that played to the narrative that the US was only there because of oil. Not to mention, issues stemming from the resource curse in countries plagued by corrupt or non-existent governance.
(First sentence of this article.)
"United States foreign policy is underpinned by a three-pronged strategy of diplomacy, development and defense within an era of extremely tight US fiscal and budget constraints."
The question then becomes: US foreign policy -- and diplomacy, development and defense -- to what end?
Herein, let us say that the "end" that is sought is greater global economic growth.
Thus, our foreign policy goal being, more specifically, to remove, via diplomacy, development and defense, obstacles -- present in other countries -- which tend to preclude the world-wide free movement of goods, capital, ideas and people.
"Stability operations," accordingly and henceforth, to be understood from this "remove obstacles" perspective.
And "obstacles," themselves, to be understood as those less-market-oriented attitudes, values and beliefs of certain population groups, and the correspondingly different (and, therefore, often market-hindering) ways of life and ways of governance of these population groups.
Within this context, success to be achieved via this proposed military/multinational corporation partnership if we believe that this relationship will -- in these times of fiscal and economic constraint -- enhance our ability to cause the subject "hindering" population groups to, specifically:
1. Abandon their less-market-oriented attitudes, values and beliefs and
2. Abandon their less-market-oriented ways of life and ways of governance based on these less-market-oriented attitudes, values and beliefs and
3. Adopt our more-market-friendly attitudes, values and beliefs and
4. Adopt our more-market-friendly ways of life and ways of governance based on these more-market-friendly attitudes, values and beliefs.
Our foreign policy objective (greater global economic growth), thereby, being better achieved via this proposed partnership.
One issue with building corporate cooperation into military or strategic plans is that the corporations don't always get in the door:
<i>Philippines puts Xstrata mine on hold</i>
<i>A $5.9-billion mining project by Swiss giant Xstrata in the Philippines may not begin operations in 2016 as scheduled owing to delays in getting environmental clearance, the government said Wednesday.</i>
<i>Environment Secretary Ramon Paje said the clearance permit for the project would only be considered after a planned new mining reform law took effect, but there was no guarantee that parliament would pass the legislation in time.</i>
<i>"We can not commit, of course, because we do not have control over Congress," Paje told reporters when asked if the government could ensure the law was passed in time for the Tampakan project to go ahead... </i>
I am in agreement with those below who see these proposed arrangements as being much more likely to lead to additional and/or more-aggravated levels of violence and insurgency and, thus -- from an overall standpoint -- less, rather than more, stability.
Accordingly, should we come to see these type of activities for what they really are, to wit: not "stability operations" but, rather, "instability operations?"
This, allowing us to understand that the employment of more -- rather than less -- military, police and intelligence forces -- "ours" and "theirs" -- will be required?
Possibly repeating previous comments, but I suspect that military/multinational cooperation is not much discussed because it is recognized as an extremely sensitive and potentially inflammatory issue: even the slightest hint that the US military is working in concert with extractive multinationals is likely to generate a huge wave of protest and a propaganda windfall for antagonists. The belief that the US military acts as an enforcer and door-opener for oil and mining companies is widespread enough already, I don't see what can be gained by reinforcing it.
Given that the payoff of this proposed cooperation is hypothetical at best and the inherent risks and liabilities are all too clear, I'm really not sure it's a great idea to pursue this sort of cooperation.
Madhu, Thanks for the feedback. The challenge here is that while there are good examples of improved coordination between resource companies, government and local community partners, there is very little empirical evidence on the potential coordination with the military (or in this case the US military) to augment its strategic objectives across an AO. I guess, because this is a relatively new concept. Unless, someone can provide an example that I may have overlooked. There are of course examples of unsavoury coordination between extractive players and indigenous military and paramilitary - Freeport in Indonesia is a well known case. This is a relatively good paper on civil partnerships: http://www.odi.org.uk/work/projects/98-02-bpd-natural-resources-cluster…
For some reason NGOs consider themselves to have a monopoly on social and economic development and intervention in conflict zones of fragile states. Understandably they are reluctant or completely opposed to working or coordinating with the military. We should respect their principles and idealism at times for taking this approach. However, the corporate sector is potentially a far more formidable implementing partner for the US military. Both are mission focused, appreciate efficient use of resources, constantly measure effectiveness and find themselves operating in similar regions where a coordinated effort may benefit foreign policy.
I would trust the mining companies to assess the issues of CAPEX and return on investment; that's their business. Assessment of any potential security benefit (or risk) is a totally different matter.
Much of the discussion of economic development and stability, whether the proposed development is to be delivered by multinationals, NGOs, or small scale investment, rests on the assumption that instability is at root an economic problem. It's not: it's a political problem. Instability and economic underdevelopment are, in many developing nation environments, twin consequences of a single cause: bad governance. Trying to solve economic problems without addressing governance deficits is pointless, counterproductive, and expensive, whatever the chosen method of intervention.
The thought that stability can be achieved and insurgency prevented by "delivering" economic development is attractive but ultimately a mirage, because economic development cannot be delivered: It can be promoted, most effectively by identifying and removing the political obstacles to development, but this really needs to be done by the host country government, not by meddling (and generally clueless) outsiders.
Primarily, simple Supply and Demand further qualified by market pricing, Return on Investment and CAPEX requirements determines when and where resources are extracted. This means that though supply may exist in the form of natural resource deposits, demand may not exist (e.g., current reduction in global consumption of finished end goods does not necessitate introduction of new sources of x raw material – the introduction of which would only further depress the market for x raw material already experiencing a reduction in value). All of this must be further qualified by the strategy variable (a complex formula of tangible and intangible values and variables) which determines when it is best for a nation/people to commit to spending some of their natural resource Principal (this word is used the same as in finance and banking). I have spoken with more than a few here in Afghanistan who have demonstrated an understanding of the real value of the natural resources contained in the soil of their country (I have heard it called the ‘National Bank’ on more than one occasion). And they have without exception demonstrated an understanding of what it means to the local people and nation when a foreign company/government comes in and buys a portion of that national bank’s Principal at a Net Present Value (discounted) rate.
Though I agree with the author, Jason Thomas, in that multinationals play a major role (as evidenced by China’s heavy emphasis on investing in infrastructure projects, years or even decades before actively pursuing extraction of raw materials in places yet unstable and insecure), it is not as simple as identifying resources and setting to extracting them. At the end of the day consumer demand and commodities markets and investors almost solely determine when such heavy CAPEX investments are made (though marginally impacted by national security formulas). That is not to say there isn’t great value in these untapped assets (natural resource deposits) which cannot or should not be exercised or from which present value cannot be derived, however we have to use the thinking of the locals (conceptualize unextracted natural resources as Principal in the bank or even more precisely as cash reserves in a corporation).
Though at a much reduced rate and slower pace, improvements in local security, stability and the underlying standard of living can be derived from’ borrowing’ small amounts against this Principal in the Bank (rates smaller than the ‘interest’ derived as increase in asset value of the raw materials derived over time as demand improves and supply reduces elsewhere). An active entrepreneurial community empowered by a local investor class could use the much smaller borrowing amount and turn it over several times such that substantial returns are realized. All the while this small scale investing and reinvesting would provide for the development of necessary infrastructure, security and quality of life improvement which would in turn greatly reduce the mulitnational’s CAPEX requirements when they do eventually move to extract the raw materials (and thereby also increase the value of the untapped resources themselves). This model would allow for the Author’s intent of employing the multinationals as partners in national defense, while not requiring immediate extraction commitments. These are just some thoughts which have been bouncing around while here in Afghanistan when thinking about the state of development, natural resources and security in the area and region.
There should be no surprise insurgencies tend to exist where there are untapped or undertapped natural resources to be exploited, places such as Afghanistan and the Southern PI. The solutions to which, when coupled with natural resources and national reserves, are highly complex and involved. I applaud the author for attempting to find solutions to COIN in these areas, particularly with the reduction in budgets and Conventional Forces and I would encourge Jason to keep researching and working on the subject.
Terms like "responsible extraction" and "equitable redistribution" are easy to type, but translating them into actual practice in the field can be extremely complicated. Developing nation governments rarely have the capacity to monitor or regulate effectively, and in the absence of effective external monitoring and regulation, corners will get cut. In environments where government, both national and (especially) local/regional, are dominated by rapacious and self-serving elites, equitable distribution generally doesn't happen. Even if the companies have the best of intentions (and they sometimes don't), they generally don't have the ability to prevent local elites from manipulating circumstances to their own benefit. Most often they haven't a clue about what really goes on outside the stage-manged consultations and meetings.
I'm not at all clear on how you propose to combine private sector capacity with US military stability operations, either in the generic sense or in the specific sense of Tampakan, and it seems to me that the elephant in the drawing room - the absolutely horrendous perception/PR problem presented by any visible cooperation between the US military and multinational corporations, especially in the extractive industries - is to be mitigated.
Extractive industry can funnel a good deal of money to national governments and local elites. Whether this benefits the people and whether it's conucive to stability is a different question altogether. The "resource curse" is well documented and is a real problem. The ability to derive revenue from a foreign extractive partner can lead to a situation where government, national and local, feels more accountable to that industry than to its populace, and can actually decrease the incentive to develop a bottom-up local economy.
Dayuhan, You are right. Unfortunately many parts of the Philippines have been let down by combination of resource exploitation and environmental destruction as well as weak state institutions and patronage politics.
There is the risk that insurgents benefit from greater economic investment. However, there are good examples of tri-sector partnerships between the resource company, the state and local communities, that responsiblity extract the commodity, while equitably redistributing the benefits. Partnerships such as this are common place across the extractive sector and fully endorsed by the United Nations, internationally recognised academic institutions and international NGOs such as The Prince of Wales Business Leaders Forum and the Business Partners for Development. These collaborative efforts are being implemented in Colombia, Chad-Cameroon, Nigeria, Peru and Azerbaijan.
The Natural Resources Cluster of Business Partners for Development provides excellent examples of these partnerships in action from Rio Tinto, BHP, Shell, BP and ExxonMobil.
That said the underlying argument in this paper was to look at a different way of combining private sector capacity with US military stability operations into the future. Coordination could prove advantageous in some states.
Living in a part of the Philippines that is both a perennial target of mining companies and a focal point for popular resistance to mining companies may have left me with some bias, but I suspect that foreign extractive industry will not be generating stability in much of the rural Philippines. I suspect in fact that the NPA will be among the major beneficiaries of these projects. Have you looked into what actually happens to rural communities and residents in the Philippines when large-scale resource extraction projects come to town? Not the shiny list of wonderful that's described by project proponents, but what actually happens?
If the Philippines wants a lasting solution to insurgency, banditry, and instability it needs to bring its own governing elites within the rule of law, and neither military assistance nor multinational corporations are going to bring that any closer.
I suspect that visible links between the US military and multinational corporations, particularly those engaged in resource extraction, would be a horrible mistake, in the Philippines and in most other places. Whatever the actual intent, the perception that the military is being used to pave the way for the entry of extractive corporations is inevitable. Whether or not these industries fully deserve their reputation can be debated, but for better or worse they have that reputation, and it's not an appealing one. Not many communities in the developing world are going top click their heels and jump for joy at the news that Shell or Rio Tinto is coming to town. If they come to town in my neighborhood the only clicking going on is going to come from magazines being inserted into rifles. That would not be something I'd want to see, so I hope they don't come to town.
With all due respect to Dr. McCormick and his "Mystic Diamond model" (and my good friend Greg Wilson) the strategy for Operation Enduring Freedom Philippines developed during the strategic assessment conducted in October 2001 was based on the application of fundamental Special Forces doctrine for how to assist a friend, partner or ally to defend itself against lawlessness, subversion, insurgency, and terrorism.