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A new report says that a lack of regulation of private security companies in Latin America is having negative impacts on security and at times facilitates criminal activities, underscoring how the region’s booming private security industry can contribute to already high levels of crime and violence.

The report, published on March 27 by the Washington, DC-based Inter-American Dialogue, explores how a booming and unregulated private security industry is bringing a “new set of challenges to citizen security” in the region.

According to the report, an estimated 2.4 million people are employed by more than 16,000 private military and security companies (PMSCs) across Latin America and the Caribbean.

In many countries, private security forces outnumber public ones. In Brazil, there are four private security officers for every one public officer. The ratio is five to one in Guatemala and almost seven to one in Honduras, the report found.

The prevalence of private security companies has increased in parallel with the rise of violence and crime in Latin America, in part as a response to the absence of efficient and accountable public security forces.

For example, while violence is spiraling out of control in Mexico, where police forces are notoriously corrupt and ineffective, the private security industry has grown 180 percent since 2012 and is now worth $1.5 billion.

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Authors Sarah Kinosian and James Bosworth highlight several key issues and challenges regarding the use of private security companies in Latin America.

According to the report, there are “few or outdated regulations and weak regulatory bodies that could not keep up with the rapid rise” of the industry. Because of this, private security companies have been able to operate without properly registering their services or complying with regulations, which has paved the way for criminality within the sector.

Indeed, the report found that the thousands of weapons imported to Latin America each year for use by private security firms has made the industry a “major supplier” of weapons to criminal groups. According to the report, 40 percent of illegal firearms in El Salvador are linked to the country’s roughly 500 private security companies.

According to the report, the rise in private security firms throughout the region has also corresponded with increased violence against land and environmental activists.

Latin America’s “extractive industries, natural resource projects and agribusiness” are some of the region’s biggest markets for private security services, and the report found that companies have often been used to violently repress citizens protesting these types of projects in collaboration with public security forces.

For example, the report highlights the Bajo Aguán region near Honduras’ northern coast as an area where private security firms have been hired by land owners and allegedly involved in killings, disappearances and forced evictions of local farmers. Private security companies have been implicated in a number of the 123 killings of land and environmental activists in Honduras since 2009, according to the report.

In addition, the report notes that the rapid growth of the loosely-regulated private security industry has contributed to an “inequality of security” in the region.

“Wealthy businesses and individuals spend on their individual security while often paying little in taxes that would fund the collective security that would benefit society at large. Meanwhile, the industry takes qualified personnel from government security forces, leaving them understaffed and forced to hire and train less experienced personnel,” Kinosian and Bosworth write.

InSight Crime Analysis

The Inter-American Dialogue report highlights how a lack of regulation of private security firms in Latin America has contributed to persistent insecurity in the region and has even facilitated criminal activities carried out by these companies.

In Rio de Janeiro, Brazil’s second-largest city, authorities have estimated that some 30 percent of weapons belonging to private security companies are “diverted or stolen” and end up in the hands of criminals, making these firms a huge source of weapons for criminal groups. Private security firms have also been infiltrated by gangs in El Salvador and accused of committing extrajudicial killings in Guatemala, underscoring how lax oversight and regulation can fuel criminality.

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In order to tackle problems related to the private security industry, the report recommends that governments in the region adopt the principles of the Montreux Document, an agreement that lays out relevant international legal responsibilities and best practices for the use of private security forces.

According to the report, the Montreux Document “contains detailed guidelines on issues such as the criteria and procedures for authorization of PMSCs, regulation of their possession of weapons, monitoring of their compliance with applicable regulations, training of PMSC personnel, and accountability for PMSC misconduct.”

Currently, just four countries in Latin America — Uruguay, Ecuador, Chile and Costa Rica — have officially supported the document. But Kinonsian and Bosworth argue that more countries should adhere to its principles in order to avoid the problems linked to poor regulation and oversight of private security firms.

Eric Tardif, a legal advisor at the International Committee of the Red Cross, emphasized this point at the report’s launch event.

“We believe that it is fundamentally important for states to ensure that whatever private, military or security companies are permitted to operate, the states take all necessary measures to ensure that these companies actually improve and do not negatively affect the security of the communities where they work,” he said.