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Last Updated: Sunday, 4 April, 2004, 06:21 GMT 07:21 UK
Iraq's mercenaries: Riches for risks
By Clare Murphy
BBC News Online

The severe lack of security in Iraq has opened up a highly profitable market for private security contractors.

Fijian security guards
Security guards are hired from around the world
The brutal murders of four American security men in Falluja on Wednesday 31 March is unlikely to deter the many would-be mercenaries willing to accept the risks involved in providing security amid the instability of post-war Iraq, according to one security firm.

The US has so far spent $20bn on reconstruction in Iraq. The companies which have won these contracts currently expect to spend about 10% of their budgets on providing personal security planning and protection for their workers.

Iraq is something of a goldmine at present. The profit margin is incredibly high, way in excess of the risk factor
Duncan Bullivant
Henderson Risk
Hence a highly lucrative market has sprung up.

Industry insiders say the war has proven a godsend for British security firms - which have picked up much of the work. Their revenues are estimated to have risen fivefold, from around $350m before the invasion to nearly $2bn.

Tidy rewards

The firms themselves offer handsome sums to attract the personnel, with an average daily wage of $550.

"Doing this kind of work for a year means some people have enough to retire on," says Duncan Bullivant, head of the small British firm Henderson Risk, which has around 40 employees operating in the country.

"Iraq is something of a goldmine at present. The profit margin is incredibly high, way in excess of the risk factor. I wouldn't give it more than another year at this level, the bubble will burst, but there's an immense drive to cash in while it lasts."

Iraqis surround burnt-out car in Falluja
Iraqis surround burnt-out car in Falluja which had been carrying four American security men
With the wages on offer, there is no shortage of potential recruits. Even a company as small as Henderson's says it receives five inquires a day. A company as large as Control Risks - which provides security to Britain's Department of International Development - is unable to put a figure to the number of applications it receives each week.

In the UK, controversy has erupted over the suggestion that companies are recruiting straight from the army - particularly the renowned Special Air Services, or SAS. This has fuelled newspaper headlines that the defence of the "homeland" is being jeopardised by soldiers' greed.

The allegations are strenuously denied by the firms, who in any case note that they recruit not just from Britain, but around the world - and particularly in Iraq itself.

But this raises problems of its own. Many Iraqis considering a career as a security officer are shunning the meagre wages of their country's own police force in favour of the greater salaries on offer from one of the private foreign armies.

"For the companies it makes sense at a number of levels to hire Iraqis," says David Claridge of Jansusian, which primarily employs local people.

"They have immense local knowledge, they often have advance warnings, they can gauge the local mood. It's also cost-effective - the wages of Westerners are higher, the costs of getting them there greater.

"But at the end of the day, Iraq belongs to the Iraqis. It's absolutely right that they should be involved in securing it - and ultimately all companies will be employing them."

'Cowboy operators'

The field of private security is unregulated, and alongside the more reputable companies, gun-slinging, cowboy contractors - whether foreign or Iraqi - are reported to be setting up shop Iraq.

Established companies dislike competition from smaller entrepreneurs, but also worry that their reputations may be damaged by the gung-ho approach of some of the newer firms.

The lack of regulation means mercenaries can often act with impunity.

Stories abound of heavy handed and trigger-happy behaviour. There are reports that some private security companies claim powers to detain people, erect checkpoints without authorisation and confiscate identity cards.

The BBC's Caroline Hawley reports
"There's never been an attack as brutal as this"

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