Private security firms in the Balkans harbor corruption, observers say

A hopeless battle?

The Office of the High Representative (OHR) in Bosnia and Herzegovina has been making efforts to battle the power structures held by security firms in the region. The EU-dominated OHR is responsible for implementing the 1995 Dayton agreement that ended the Bosnian war.

Raffi Gregorian, the OHR's principle deputy, has expressed concern about security companies in Republika Srpska, the Serb-dominated entity of Bosnia and Herzegovina. He said those companies belonged to the support network of fugitive war crimes suspect Ratko Mladic.

Mladic has yet to be captured

The Bosnian Serb military leader is being sought by the International Criminal Tribunal for the former Yugoslavia on charges of genocide in the Srebrenica massacre of 8,000 Muslim men and the 43-month siege of Sarajevo. The EU has made his arrest a key condition for further progress in joining the bloc.

In June 2009, Gregorian banned four Bosnian Serb private security companies from operating in Brcko, an autonomous region that spans the boundary between Republika Srpska and Bosnia. The ban was issued after EUFOR, the European military force in Bosnia, and the EU's Police Mission in Bosnia (EUPM) rejected requests to regulate the country's private security industry and crackdown on dubious companies. EUFOR and EUPM reportedly argued that private security was either a local issue or did not fall within their mandate.

"This is a glaring omission," a well-placed source in Sarajevo said. "The EU is not interested at all. They are not pushing it."

EUFOR spokesman Bruce Foster was evasive on the OHR concerns. But he told Deutsche Welle EUFOR had "a very clear UN mandate to contribute to the safe and secure environment for all of the people of Bosnia and Herzegovina." The force monitored "any activity" which could threaten this, Foster said.

EUPM spokeswoman Sladjana Lizdek said the European police mission was monitoring and advising the police in Bosnia and Herzegovina to support the fight against organized crime and corruption.

"The mission has established that the regulation of the private security sector needs to be enhanced and legislation harmonized across cantons, entities and the state," Lizdek told Deutsche Welle.

Before Gregorian banned the companies, OHR unsuccessfully urged Republika Srpska's Prime Minister Milorad Dodik to crack down on the company Alpha Security. It was founded by former Mladic bodyguard Velibor Sota. OHR said Alpha employed members of a Bosnian Serb military unit disbanded by NATO in 2003. It constituted a "clear and present danger … to the rule of law."

Dodik's separatist tendencies are considered a threat to peace in the region

Dodik has granted Alpha contracts for the security of state-owned entities, such as the Banja Luka Tobacco Factory. Local newspaper reports said that Dodik's support of Alpha was part of an effort to create his own counter-intelligence and security service independent of that of Bosnia and Herzegovina. Well-placed sources said Western officials were concerned that Dodik was preparing to unilaterally declare Republika Srpska independent of Bosnia.

But the power of security companies in Serbia was also great. OCCRP said Serbia is the potential EU candidate with the least regulation of the security sector. An estimated 60,000 privately employed security personnel operate in Serbia. This trend began in the early 1990s through Serbia's most notorious paramilitary leader Zeljko Raznatovic, widely known as Arkan. At that time, he founded a security company that trafficked drugs, ran casinos and arranged assassinations.

Can global players help clean up?

Analysts hope that acquisitions by international firms may help clean up the security sector. So far, global players like Prosegur, Securitas and G4S have focused on Romania, where they together hold a 50 percent market share. G4S has also acquired a major Serb security company.

"Romania is the test case," one analyst said. Nevertheless, analysts concede that corruption and close ties between local firms, law enforcement and politicians have effectively excluded foreign companies from winning government contracts.

"The reason is simple," one analyst said. "Local bribery still works best."

Author: James M. Dorsey
Editor: Sabina Casagrande