The Chaos Company


2014-04-18 /

Wherever governments can’t—or won’t—maintain order, from oil fields in Africa to airports in Britain and nuclear facilities in America, the London-based “global security” behemoth G4S has been filling the void. It is the world’s third-largest private-sector employer and commands a force three times the size of the British military.
G4S is based near London and is traded on the stock exchange there. Though it remains generally unknown to the public, it has operations in 120 countries and more than 620,000 employees. In recent years it has become the third-largest private employer in the world, after Walmart and the Taiwanese manufacturing conglomerate Foxconn. The fact that such a huge private entity is a security company is a symptom of our times. Most G4S employees are lowly guards, but a growing number are military specialists dispatched by the company into what are delicately known as “complex environments” to take on jobs that national armies lack the skill or the will to do. …

Maps that show the world to be wholly divided among sovereign countries, each with meaningful boundaries and a central government, reflect an organizational model that has never been practical in many places and now seems increasingly obsolete. Globalization, communication, fast transportation, and the easy availability of destructive technologies have something to do with this, as does the fact that all systems eventually tire, and the future cannot be thought up in classrooms. For whatever reason, the world everywhere is getting harder to manage, and governments are increasingly unable to intervene.
Into the void left by governments’ retreat, private-security companies have naturally arrived. The size of the industry is impossible to know, given difficulties with definitions and the thousands of small companies entering the business, but in the United States alone security guards may now number two million, a force larger than all the police forces combined, and during the war in Iraq private military contractors sometimes outnumbered U.S. troops, as they do in Afghanistan today. Globally the private-security market is believed to exceed $200 billion annually, with higher numbers expected in the coming years. A conservative guess is that the industry currently employs about 15 million people. Critics worry about the divisive effects of an industry that isolates the rich from the consequences of greed and at the extreme allows certain multi-national companies, particularly in oil and mining, to run roughshod over the poor. People also object in principle to the industry’s for-profit intent, which does lead to abuses and seems to be an unworthy motivation when compared with the lofty goals ascribed to government. Nonetheless history has amply shown that national governments and aspirants to national power routinely commit abuses far greater than private security could. Furthermore, for the purpose of understanding the industry, the important point is this: the growth of private security is determinedly apolitical. These companies provide a service that people of whatever bent can buy.

G4S stands out primarily because of its size. To place it in perspective, the company fields a force three times larger than the British military (albeit mostly unarmed), and it generates revenues of $12 billion annually. That said, the head offices in England are impressively small. They occupy a boxy building in Crawley, a bland service town near Gatwick Airport, as well as the fifth floor of a modern multi-tenant building in central London, close to Victoria Station. Both locations are brightly lit and tightly controlled, with escorts required beyond the reception areas, apparently because of regular protests that some British activists manage to fit into their busy protest schedules. Currently the main point of contention seems to be the company’s role in Israel, where G4S supplies surveillance equipment to checkpoints and prisons, and in Palestine, where it provides security to supermarkets in the Jewish settlements.
…By 2002 , … the company had 140,000 employees and activities in more than 50 countries, with annual revenues of $2.5 billion. It continued to acquire businesses, such as the American private-prison-and-security company Wackenhut. Then, in July 2004, came the big one—a merger with a British giant named Securicor, which itself had started as a night-watch service in 1935. The resulting conglomerate, called Group 4 Securicor, leapt to the front of the industry, with 340,000 employees working in 108 countries, generating $7.3 billion in annual revenues. The youthful boss of Securicor, Nicholas Buckles, was brought in as the chief executive officer of the new concern. Buckles was 44 at the time—a charismatic man who came from a modest background and drove a Volkswagen bug to work. He had joined Securicor as a project accountant 20 years before and through force of personality had propelled himself to the top. In 2006, after two years of consolidation, and now firmly at the helm, he completed the rebranding of the company as G4S, and accelerated its expansion with no limits in sight: 400,000, 500,000—why not a million employees? Buckles wanted G4S to become the largest private employer in history.

Time would show that he was perhaps overconfident, but the share prices responded to his ambition, making G4S a darling of the London exchange. The company kept growing. Primarily it provided guards—to businesses, government buildings, college campuses, hospitals, gated communities, condominiums, rock concerts, sporting events, factories, mines, oil fields and refineries, airports, shipping ports, nuclear power plants, and nuclear-weapons facilities. But it also provided back-office police support, roving patrols, fast-response squads, emergency medical services, disaster-relief services, intruder- and fire-alarm installation and monitoring, electronic-access control systems (including at the Pentagon), security-software integration, airport-security screening, bus- and train-system security (including fare-evasion monitoring), engineering and construction management, facilities management, prison management (from maximum-security through immigrant and juvenile detention), courtroom prisoner escort, prisoner transport, immigrant repatriation, and the electronic tagging and monitoring of people under house arrest and restraining orders. In addition, it had a global cash-management arm that serviced banks, stores, and automatic-teller machines, provided armored cars and secure buildings where the bills could be held and sorted, and offered international transport security for jewelry as well as cash.

All this, however, was not enough for Buckles. In his drive for expansion he strove to go not just wide but deep. He understood that G4S is in the business of handling risk, and that its low-value-added problem (those single watchman-nights) was due to the fact that it operated primarily in countries that were already tame. It was obvious that a higher-value product could be sold in places where the risks were greater—in Africa, for example, or in the war-torn countries of Southwest Asia and the Middle East. This can be summarized as a Rule  for the industry: A direct correlation exists between levels of risk and profit. By now the conflict in Afghanistan had been simmering for years, the one in Iraq was nearing its peak, and contractors were reaping fortunes from British and American funds. In 2008, Buckles plunged in with the $85 million purchase of a British enterprise called ArmorGroup, which had started as a high-end personal-security company and had gone early into Baghdad, where it had grown into a full-range armed force, pursuing not just its traditional functions but dangerous activities including convoy escort and base defense. Such companies have little to do with the cartoon image of mercenaries—bands of killer elites raising havoc and toppling regimes—but they have been heavily engaged in combat nonetheless. By the time of the G4S acquisition, 30 ArmorGroup employees had been killed in Iraq.

ArmorGroup had a de-mining and ordnance-disposal division. One of its specialists was a former British Army captain named Damian Walker, who is now a director of business development at G4S in London. …
In 2005 a peace agreement in Sudan brought the long civil war to an end, and the North began to withdraw its forces, ceding de facto independence to a new country, South Sudan. In 2006 the United Nations awarded a contract to ArmorGroup to go after unexploded ordnance there and start mapping and clearing the minefields. …
At G4S the men know they cannot return home as heroes, or even expect mention if they die. They will have taken equal risks at lower cost than their counterparts among conventional soldiers—the logic of the business requires it—but there will be no talk of their courage and sacrifice. Far from it: outside of their own little circles, they will be greeted with uncertainty and mistrust. They do not speak about this in South Sudan, but it is unmistakable in their culture. Similarly, though every explosive device they neutralize might otherwise have killed—and disposing of them provides satisfaction—they know that, beyond the job of battlefield clearance, they work in an era when, globally, mines are being planted faster than they can be found. The problem is not just that mines are durable and effective but that they are very good at hiding. In South Sudan alone, the combined efforts of G4S and other de-mining groups working under the U.N. have, after seven years, cleared merely 835 square miles of suspect land, with large tracts remaining to be done. …

 A Question of Control

a final rule about the private-security business: If your company is spread all over the world with hundreds of thousands of employees, and it has grown rapidly through multiple acquisitions, and you are in the business of risk, and you’ve been trying to increase profits by going after high-value jobs with even greater risk, and many of your field operations are remote—well, you will have challenges maintaining control.
In 2010, G4S had signed on to provide 2,000 guards for the upcoming 2012 London Olympics—a doable proposition and potentially a boost for the brand. At the end of 2011, however, the British government decided that a greater force would be required, and G4S lunged for it—now on very short notice—by signing a $439 million contract to provide 10,400 guards for the Games. It went without saying that these people would be crisply uniformed, well groomed, well trained, non-discriminatory, upbeat, clean, courteous, healthy, strong, heroic if necessary, ethnically diverse, English-speaking, drug-free, sober, timely, obedient, and possibly churchgoing. How exactly G4S planned to find such people, willing and able to work full-time for only the short duration of the Olympics, was unclear even to G4S. The result was a public spectacle just weeks before the Games, when G4S had to admit that it could provide at most 7,000 guards in time, and the British government responded by bringing in 3,500 soldiers to supplement the security-all this amid howls of outrage in Parliament and the tabloid press. Buckles found himself in the wrong sort of glare, standing before the House of Commons, forced to absorb the insults of grandstanding politicians, to apologize abjectly, and to agree on camera that his security program had turned into “a humiliating shambles.” Between penalties, payouts, and the inability to collect, G4S lost $135 million on the deal.
There have been other failures. Most are simple events, though they have sometimes resulted in death: In Kenya, two G4S armored cars are hijacked with the collaboration of company insiders. In Canada, a recently fired G4S guard robs A.T.M.’s using codes he learned on the job. In Papua New Guinea, off-duty G4S guards at an immigration detention center are accused of getting drunk and harassing local women… On numerous other occasions G4S guards throughout the world are caught sleeping. In Britain, G4S staff at an immigration detention center falsify documents to repatriate a man who had a legitimate claim to political asylum. At Heathrow, a man being deported to Angola dies after being restrained by G4S guards on an airliner. And so on.
Other incidents, however, raise serious questions about inherent limits of control, particularly for a company that fulfills public functions and by its nature invites skepticism and distrust. In Canada, a member of a five-man G4S armored-car crew shoots the other four, killing three, and runs off with the money. In Scotland, a G4S guard on duty at a medical conference kills a delegate by beating her with a fire extinguisher after she complains about having to present her security pass. Even more significant are the incidents that occur within the high-risk areas of private prisons and military operations, because these are precisely the areas where one could presume that operational management would be the tightest.
One of the more worrisome cases occurred in 2009, a year after the company acquired ArmorGroup, when a G4S employee in Baghdad sent an anonymous e-mail to the London office, warning about a former British soldier and civilian contractor named Daniel Fitzsimons, who had just been hired to work in Iraq. The informant wrote that Fitzsimons was unstable, had been fired from a previous job in Iraq after punching a client, was facing firearms and assault charges in Britain, and posed a threat to people around him. It turned out that he had been diagnosed with post-traumatic-stress disorder. According to the BBC, the concerned employee wrote, “I am alarmed that he will shortly be allowed to handle a weapon and be exposed to members of the public. I am speaking out because I feel that people should not be put at risk.” No one at G4S wrote back. On the eve of Fitzsimons’s arrival, the employee sent another e-mail, writing, “Having made you aware of the issues regarding the violent criminal Danny Fitzsimons, it has been noted that you have not taken my advice and still choose to employ him in a position of trust. I have told you that he remains a threat and you have done nothing.” Again he received no reply.
Soon afterward, Fitzsimons got to Baghdad and to the G4S compound, where he was issued a weapon. The next day, after drinking and arguing, he shot and killed two G4S soldiers, a Scotsman and an Australian, and also went after an Iraqi, whom he wounded. Fitzsimons was arrested, tried, convicted, and sentenced to 20 years in an Iraqi prison, where he is now. With the mother of the dead Scotsman calling for accountability, G4S provided a maladroit response. A spokesman claimed that the vetting of Fitzsimons “was not completed in line with the company’s procedures,” but then added somewhat contradictorily that the procedures had since been tightened. As for the e-mails, the company was aware of the allegations but said that “no such emails were received by any member of our HR department.” The response seemed to have been crafted by lawyers worried mostly about the consequences in court of statements made in public. But many felt that in this case the company had lost control.
Venturing into war zones is by definition a high-stakes gamble. One of the company’s diciest undertakings is its work for Chevron Oil in Nigeria, in the Niger Delta. Chevron operates there cheek by jowl with rebellious villagers who live amid pollution as the company exports oil and wealth while paying royalties to a corrupt Nigerian government. After the occupation of a refinery by 600 women in 2002, Chevron hired a South African security company called Gray to tighten things up. Gray had previously been acquired by Securicor, which then merged with Group 4 to create G4S. Eventually the contract, which has been lucrative, evolved into a counter-insurgency operation. Today, G4S deploys fast-response patrol boats armed with mounted machine guns, crewed by expatriates, and carrying Nigerian naval personnel to do whatever shooting might be required. Similar arrangements for rapid-reaction squads exist on land. The Nigerian forces involved are technically under government command, but their salaries are paid by G4S.