GENEVA (Reuters) - Private security companies operate without supervision or accountability in war zones, including Iraq and Afghanistan, and represent a new form of mercenary activity, a United Nations report said on Tuesday.

Personnel from U.S. security contractor Blackwater are seen at U.S. Army 82nd Airborne Division headquarters in Ramadi in this March 11, 2004 file photo. Private security companies operate without supervision or accountability in war zones, including Iraq and Afghanistan, and represent a new form of mercenary activity, a United Nations report said on Tuesday. Private U.S. security firms have come under scrutiny since a shooting in September in which Blackwater guards working for the State Department were accused of killing 17 Iraqis in Baghdad. REUTERS/Peter Andrews/Files

The United States’ reliance on private contractors has fuelled a growing demand for former police and military personnel in developing countries to be recruited as “security guards” who in fact serve as private armed soldiers, it said.

These forces enjoy de facto impunity under national laws that grant immunity to private military and private security company personnel, according to the U.N. working group on the use of mercenaries. Its report will be presented to the General Assembly on Wednesday.

“The trend towards outsourcing and privatizing various military functions by a number of member states in the past 10 years has resulted in the mushrooming of private military and security companies,” the report said.

Many companies have contracts with the Pentagon or U.S. State Department, it said, citing a “tremendous increase in the number of private military and private security companies connected with the conflict situations in Afghanistan and Iraq”.

Private security guards are considered by some governments to be neither civilians nor combatants, though they are heavily armed, the report said.

“They are new modalities of mercenarism,” it said, likening them to the notion of “irregular combatants”.

“In many instances, these ‘private security guards’ have encountered contractual irregularities, poor working conditions, a failure to satisfy basic needs and problems in obtaining financial compensation for injuries received,” it added.

Private U.S. security firms have come under scrutiny since a shooting in September in which Blackwater guards working for the State Department were accused of killing 17 Iraqis in Baghdad. The North Carolina-based firm employs 1,000 people in Iraq who protect U.S. diplomats and other officials.

The incident led the Iraqi government to approve a draft law to scrap a decree issued by the U.S.-led Coalition Provisional Authority in 2004, before it handed over control to Iraqis, which granted foreign contractors immunity from prosecution.

The five-member U.N. panel, set up two years ago, carried out investigations in countries including Chile, Fiji and Peru, where many contracted guards in Iraq and Afghanistan come from.

It encouraged countries whose nationals work as private security employees to avoid granting immunity to military contracting firms and their personnel.

In Chile, for example, “although contracted as security guards, the recruits were allegedly provided with military training by private companies in the United States, Jordan or Iraq and eventually performed military functions,” it said.

The panel called for more countries to sign up to the International Convention against the Recruitment, Use, Financing and Training of Mercenaries, which only 30 have ratified.