Market Forces

by Frank Paynter on August 22, 2022

It’s a free market system. So take your best shot…

Market Forces

The following essay was lifted in its entirety from Rand Review, Summer 2022.

Corporate Counterinsurgency

By William Rosenau, Peter Chalk, and Angel Rabasa

Historically, the American approach to counterinsurgency has concentrated almost exclusively on building up a threatened state’s ability to develop and marshal the resources required to contain and, if possible, prevent serious internal violence. Yet despite our best efforts, many states may never be able to build the needed capacity.

While building this indigenous capacity will always be an element of American counterinsurgency, a new trend is emerging — call it “corporate counterinsurgency” — that can help U.S. policymakers shape conflict environments in ways that support U.S. objectives.

In many violent regions, multinational corporations are the only institutions with the financial resources and technical expertise necessary to reduce armed conflict. In countries as diverse as Nigeria, Colombia, and the Philippines, such companies are working to diffuse [sic] violence by supporting community development, creating new security structures, and supplying social services.

To be sure, relatively few of these companies operate in highly violent environments. When serious conflict breaks out, most companies leave. But for firms in extractive sectors such as oil and mining, relocation is rarely an option. Not only are they compelled to remain where the natural resources are, long production cycles and expected returns on (extensive) investment frequently outweigh the costs of continuing to operate in a conflict-ridden area.

For the companies that remain, the endemic weaknesses of states across the developing world frequently preclude their reliance on local governments to restore order, promote stability, and reduce conflict. Therefore, in many cases, the task falls to the companies themselves.

Some firms operating in zones of violence choose to simply enhance the physical security of their facilities and personnel. Others act more strategically, offering micro-credit loans, building hospitals and schools, and providing job training in the hope of reducing at least some of the sources of conflict.

Certain companies have engaged in more ambitious efforts to shape their operating environments. Working in an essentially lawless region of Papua New Guinea, Placer Dome (now Barrick Gold), a major Canadian mining company, trained an indigenous police force that was widely hailed as responsive to local concerns and effective in controlling violent crime. And in Colombia’s oil-bearing Casanare region, where global energy group BP has major operations, the company helped establish a “House of Peace and Justice” to give the local community greater access to public-safety services.

Of course, not all activities by multinational corporations in conflict zones have produced positive results. On one level, corporate activities can unintentionally fuel war economies. In Colombia, for instance, revenue from oil company operations has become a target for predation by rebel groups, who view these funds as part of the legitimate spoils of war. On another level, grievances related to extraction — such as unfair land expropriation, the pollution of agricultural land, and the failure of central governments to share resources with oil- and gas-producing regions — have also helped fuel conflicts in Nigeria, Sudan, and Indonesia.

Appreciating how multinational corporations affect their environments and how their efforts can be harnessed to support U.S. counterinsurgency strategy should be a priority for national security policymakers. This effort will entail understanding how corporate counterinsurgency can shape conflict environments in positive ways as well as ways that can challenge U.S. interests. square

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