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Public-Private Sector Relationships in a New Security Environment BUSINESS AND SECURITY PUBLIC–PRIVATE SECTOR RELATIONSHIPS IN A NEW SECURITY ENVIRONMENT EDITED BY ALYSON J. K. BAILES AND ISABEL FROMMELT Business and Security Public–Private Sector Relationships in a New Security Environment Stockholm International Peace Research Institute SIPRI is an independent international institute for research into problems of peace and conflict, especially those of arms control and disarmament. It was established in 1966 to commemorate Sweden’s 150 years of unbroken peace. The Institute is financed mainly by a grant proposed by the Swedish Government and subsequently approved by the Swedish Parliament. The staff and the Governing Board are international. The Institute also has an Advisory Committee as an international consultative body. The Governing Board is not responsible for the views expressed in the publications of the Institute. Governing Board Ambassador Rolf Ekéus, Chairman (Sweden) Sir Marrack Goulding, Vice-Chairman (United Kingdom) Dr Alexei G. Arbatov (Russia) Dr Willem F. van Eekelen (Netherlands) Dr Nabil Elaraby (Egypt) Professor Helga Haftendorn (Germany) Professor Ronald G. Sutherland (Canada) The Director Director Alyson J. K. Bailes (United Kingdom) Stockholm International Peace Research Institute Signalistgatan 9, SE-169 70 Solna, Sweden Telephone: 46 8/655 97 00 Telefax: 46 8/655 97 33 Email: [email protected] Internet URL: http://www.sipri.org Business and Security Public–Private Sector Relationships in a New Security Environment Edited by Alyson J. K. Bailes and Isabel Frommelt OXFORD UNIVERSITY PRESS 2004 OXFORD UNIVERSITY PRESS Great Clarendon Street, Oxford OX2 6DP Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Bangkok Buenos Aires Cape Town Chennai Dar es Salaam Delhi Hong Kong Istanbul Karachi Kolkata Kuala Lumpur Madrid Melbourne Mexico City Mumbai Nairobi São Paulo Shanghai Taipei Tokyo Toronto Oxford is a registered trade mark of Oxford University Press in the UK and certain other countries Published in the United States by Oxford University Press Inc., New York © SIPRI 2004 First published 2004 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of SIPRI or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organizations. Enquiries concerning reproduction outside the scope of the above should be sent to SIPRI, Signalistgatan 9, SE-169 70 Solna, Sweden You must not circulate this book in any other binding or cover and you must impose the same condition on any acquirer British Library Cataloguing in Publication Data Data available Library of Congress Cataloguing in Publication Data Data available ISBN 0-19-927450-9 Typeset and originated by Stockholm International Peace Research Institute Printed in Great Britain on acid-free paper by Biddles Ltd., King’s Lynn, Norfolk Contents Preface xi Acronyms xiii Introduction 1 Business and security: public–private sector interface and interdependence at the turn of the 21st century Alyson J. K. Bailes I. Introduction: interdependence old and new 1 II. 11 September 2001 as catalyst 5 III. Two years on: new agenda items, second thoughts? 8 IV. Other players, other interests 18 V. This book 23 Part I. The general framework: goals and norms Editors’ remarks 1. Security and the responsibilities of the public and private sectors 27 István Gyarmati I. Introduction 27 II. New threats, new thinking 28 III. The new role of the private sector 30 IV. Conclusions 31 2. Public–private sector cooperation 33 Erik Belfrage I. Introduction: the development of modern terrorism 33 II. The role of private corporations in the provision of security 34 3. What price values? 37 Daniel Tarschys I. The ambivalence of value and the obscurity of price 37 II. Values in public policy and in the European institutions 38 III. Envoi 44 Part II. Cutting off resources for terrorism and crime: the global and European dimensions Editors’ remarks 4. An international response to terrorism 47 Claes Norgren I. Introduction 47 II. Terrorism: a threat to the international community 48 vi BUSINESS AND SECURITY III. Countering terrorism 51 IV. Measures to counter terrorist financing 52 V. Success or failure? 54 VI. The way forward 56 VII. Conclusions 58 5. Counter-terrorism measures undertaken under UN Security 59 Council auspices Thomas J. Biersteker I. Introduction 59 II. The role of the UN Security Council in efforts to counter 60 terrorist financing after 11 September 2001 III. An assessment of the effectiveness of UN Security Council 63 measures IV. Legal issues, problems and challenges 67 V. Conclusions 73 6. Strategic export controls and the private sector 76 Evan R. Berlack I. Introduction 76 II. The US approach 76 III. The evolution of international approaches to export controls 78 after 1945 IV. Characteristics and limitations of existing regimes 79 V. The impact of new priorities: non-proliferation and terrorism 81 VI. Conclusions 82 7. The European Union: new threats and the problem of coherence 84 Niall Burgess and David Spence I. Introduction 84 II. The EU’s policy responses to the September 2001 attacks 87 III. Remaining challenges for the EU 95 IV. Conclusions 100 8. Banking in an international and European framework: 102 the case of Liechtenstein Georges S. Baur I. Introduction 102 II. International initiatives 103 III. New developments in international law 103 IV. Liechtenstein as an example 104 V. The private sector 107 VI. Future developments 109 9. The resources and tactics of terrorism: a view from Russia 111 Vadim Volkov I. Introduction 111 II. The dual role of states 112 C ONTENTS vii III. Asymmetric warfare 113 IV. The social resources of terrorism 115 V. Conclusions 118 Part III. Business and conflict Editors’ remarks 10. Business investment, humanitarian problems and conflict 121 John J. Maresca I. Introduction 121 II. Conflict as the multiplier of humanitarian problems 122 III. Differentiating legitimate business from criminal activity 122 IV. Why invest in conflict-torn areas? 123 V. The business–humanitarian relationship 123 VI. The special role of resource companies 124 VII. Meeting security requirements 125 VIII. Respect for human rights 125 IX. The role of sanctions 127 X. The need for business–humanitarian dialogue and 128 cooperation 11. Conflict diamonds: the De Beers Group and the Kimberley 129 Process Andrew Bone I. Introduction 129 II. The Kimberley Process 133 III. An example well set? 135 Annex 11A. The Kimberley Process Certification Scheme 140 12. Oil and conflict: Lundin Petroleum’s experience in Sudan 148 Christine Batruch I. Introduction 148 II. Sudan’s war 148 III. Lundin in Sudan 150 IV. Lessons learned 160 13. The role of humanitarian organizations: the case of the 161 International Committee of the Red Cross Gilles Carbonnier I. Introduction 161 II. Business and the economy in conflict prevention 162 III. Challenges for business in conflict areas 164 IV. Dialogue between companies and the ICRC 166 V. Conclusions 169 viii BUS INES S AND SECURITY Part IV. Preserving the legitimate economy and critical infrastructure Editors’ remarks 14. The security of business: a view from the security industry 173 Crispin Black I. Introduction 173 II. The services available 174 III. Survival planning: never a state monopoly? 175 IV. Terrorism and intelligence 177 V. Conclusions 181 15. Survival planning for business: a view from Nokia 183 Urho Ilmonen I. Current threat assessment 183 II. What has changed after 11 September 2001? 183 III. Why is security needed and what is the focus? 184 IV. Vulnerabilities and attacks increase 184 V. Emergency response and business planning 185 VI. Partnership with the authorities? 185 VII. Conclusions 186 16. Defending against cyber terrorism: preserving the legitimate 187 economy Olivia Bosch I. Introduction 187 II. Cyber terrorism 187 III. Attribution and business continuity planning 191 IV. Globalization and the role of business in cyber security 193 V. Conclusions 195 17. The concept of critical infrastructure protection 197 Jan Metzger I. Introduction 197 II. CIP from an operational perspective 197 III. CIP from a conceptual perspective 200 IV. Criticality 201 V. Conclusions and recommendations 207 18. Critical energy system infrastructure protection in Europe and 210 the legitimate economy Kevin Rosner I. Introduction 210 II. Implications of the new European security framework 211 III. Developing CESI protection models and strategies 214 IV. Conclusions 216 CONTENTS ix Part V. The economic consequences of terrorism: can we afford to be safe? Editors’ remarks 19. The economic consequences of terrorism 219 Patrick Lenain I. Introduction: the shock of the new 219 II. A less safe world 220 III. Is the private sector spending more on security? 222 IV. The insurance problem 223 V. Tighter border controls and their costs 225 VI. The impact of growing security and military spending: has 227 the ‘peace dividend’ been reversed? VII. Conclusions 230 Box 19.1 New cargo-inspection procedures 226 Table 19.1. US Government spending on national defence, fiscal years 228 2000–2003 Part VI. The security–economy linkage in a global perspective Editors’ remarks 20. A view from the League of Arab States 235 Saad Alfarargi I. Introduction 235 II. Obstacles to a just system of collective global security and 236 governance III. Rich men’s and poor men’s agendas 237 IV. The way to a common agenda? 239 21. A view from Africa 242 Said Adejumobi I. Introduction 242 II. Terrorism: the political and economic dimensions 243 III. ‘Business as terror’ in Africa 245 IV. Prioritizing security in Africa 250 V. Conclusions 252 Annex. A comment on immigration controls and education in the 255 United States Phyllis O. Bonanno x BUSINESS AND SECURITY Appendices Isabel Frommelt 1. Institutions in the field of security, active or interested in the 261 public–private sector interface: government and international institutions, academic and research bodies, and non-governmental organizations 2.
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