Global Support for Reconstruction Eric Westropp RUSI Presentation 31 st October 2006

Control Risks Mission “To enable our clients to succeed in complex or hostile business environments.”

Fundamentals What is inherently governmental or public sector and why ? With demand outstripping supply, where best to utilize scarce public sector resources ? Roles exist for risk management related private sector. Stability and development are part of a single agenda to create an enabling environment. Public sector contracting to risk management consultancies and the related private sector is growing but in what context ? What is it ethical, cost effective and professional to hand over to the private sector ? How best to retain oversight and public scrutiny ? How best to partner with other stakeholders? What can public and private sectors learn from each other?

Risk Management and State Building State-building and the private sector are intertwined. This slide referring to the broader private sector such as energy, construction, communications, finance and health care. Important not to miss the ‘goodwill window’. Ambassador Paul Bremer: “Eric it is illegal to invest in Iraq.” - Baghdad July 2003 In fragile/vulnerable states and failed states investment both internal & external is vital but creating the ecosystem requires reform measures, and anti-corruption both early and continuously. International companies are venturing further and more deeply into unstable regions but conflict sensitivity is required so that commercial activity alleviates and does not contribute to conflict. Collective initiatives are required to keep predatory companies at bay and create a positive ecosystem. Where these conditions begin to apply and citizens gain confidence the economy starts to flourish. A current example is the Kurdistan region of Iraq.

Risk Management Related Private Sector Integration Climate is changing to enable the already organized and managed resources of risk management consultancies such as CR to be utilized as a national resource. Some areas for expansion include: Greater use of their ability to put together and manage long term programmes. These programmes not just downstream services such as training. Consultancies with implementation capabilities can provide services both up and down. Possible to coincide programmes of public sector reform and anti corruption with threat analysis & security programmes for international and local business. Algeria is a good example where consultants are helping with both public and private sectors. Risk management companies can assist in the creation of an ecosystem where private sector commercial investors can not only do no harm but do good in a coordinated manner

What the Risk Management Sector can Contribute (1) Public Sector Reform programmes. Including the consultancy and implementation in partnership. Anti-corruption programmes. Cross departmental and holistic government crisis management programmes. Support to bring in energy, communications, construction, health care and finance etc. Longevity, desk officers have to return, officials turn over every 18 months. Companies can manage holistic projects for a number of years from concept to implementation under donor oversight and with measurable deliverables. Transfer of skills gleaned advising commercial clients in hostile environments. Assistance in bringing these skills speedily to local businesses. Officials and NGO’s can be hesitant in their involvement with and understanding of local businesses. Private sector companies will often have been working in the local business environment for years.

What the Risk Management Sector can Contribute (2) Conflict sensitive analysis and cultural sensitivity training. Apolitical or arms length agenda from donor’s overt political objectives where helpful Speed of reaction post conflict/disasters – for example post Katrina CR provided information, communications, security of properties, location of relatives very quickly, similarly post Tsunami. Surge capacity of managed resources not officials plucked from desk jobs or retirees from home. Logistics and facilities management In the case of failed or post-conflict states, the already constituted international private sector resources can help provide capacity and skills which will help utilize the only too brief ‘goodwill window’ before the citizens lose confidence.

Conclusions The UK based risk management and security sector is a large and flexible resource, respected abroad and available to work in a managed, accountable and cost effective way with governments and international agencies in post conflict situations. It also provides additional capacity to support The UK’s policy objectives to assist in fragile states. It can help integrate the global companies and their activities with public programmes. It can help broaden the concept of private sector Corporate & Social Responsibility from fragmented and often short term local programmes and assist in creating a sustainable ecosystem.. It can bring experience from working with indigenous companies, often for many years. Globally it is still necessary to reach agreement on what is inherently governmental. However, even in areas agreed as governmental, such as the rule of law, expertise can still be sought from the private sector and utilized under strict oversight and audit. One impediment in the UK to greater usage of this wide sector is the attitude to and classification of companies as so called PMSCs. This is historic in nature. The self regulation epitomised by BAPSC and the increasing diversity and capacity of the industry indicates that a review would be useful. This would then allow the public sector to more easily utilize a major resource and enable a more trusting partnership environment.