The Recourse to Private Military and Security Companies by Foreign Investors in Conflict-Affected Countries: Dangers, Opportunities and the Need to Regulate

Political and economic contexts characterized by armed conflicts are not conducive to economic growth and do not attract foreign investments. This reality is ultimately being detrimental to host States and investors alike. Accordingly, to answer risks associated with armed conflicts, private investors increasingly have recourse to Private Military and Security Companies (PMSCs) in order to undertake economic operations in contexts characterized by a weak rule of law. From an economic standpoint, the rise of PMSCs seems to be beneficial for host States seeking inward flows of Foreign Direct Investment (FDI) and for foreign investors willing to invest in countries affected by armed conflicts that are rich in natural resources, for example. However, the use of PMSCs leads to other issues pertaining, for example, to human rights law, and the laconic regulatory framework for PMSCs and their activities leads to a global state of uncertainty. Therefore, while allowing PMSCs to blossom in conflict-affected countries could benefit the interests of foreign investors and the economic interests of the host State, it could also severely impede with the latter’s other international obligations if PMSCs commit abuses. Although efforts should focus on crafting and enforcing a specific regulatory framework for the activities of PMSCs, international investment law constitutes a promising avenue to contribute to the regulation of the use of PMSCs by foreign investors and complement other international instruments.