In March 2004, four American guards were attacked and killed in the Iraqi town of Fallujah. Their charred bodies were beaten and dragged through the streets in front of television cameras, and two of the corpses were hung from a bridge over the river Euphrates.

The following month, eight commandos engaged in an intense firefight with Iraqi militia during an attack on the US government headquarters in Najaf, calling in their own helicopter support to supply ammunition and take away the wounded.

In November 2005, a ’trophy video’ was published on the internet showing soldiers randomly shooting civilian cars from out of the back of their vehicle on the road to Baghdad airport.

The ’soldiers’ involved in each of these incidents are not part of any national armed forces; they are employed by global corporations. They are paid to provide a wide range of services, from acting as armed guards for convoys and oil installations to running border patrols and training of local police and military forces, and they are regularly involved in direct combat with Iraqi militia fighters. More than 48,000 are employed by corporations as mercenaries in Iraq - a force six times larger than the official UK armed forces presence in the country. As pressure mounts for UK and US troops to be withdrawn, it is to mercenaries like these that governments increasingly look to fight the war for them.

While Iraq represents bloodshed and death on a massive scale to most people, to Private Military and Security Companies (PMSCs) it has brought a boom time, boosting the revenues of British-based PMSCs alone from £320 million in 2003 to more than £1.8 billion in 2004. In the same year income for the industry worldwide reached $100 billion.

In addition to fostering a gold rush mentality for corporate mercenaries, the situation in Iraq has also created a lawless place for them to operate. It is this attitude which has led to things like the infamous ’trophy video’ of a former Aegis employee showing corporate mercenaries randomly shooting automatic weapons at civilian cars in Baghdad. The video is only one of hundreds of reported incidents of contractors firing indiscriminately at civilians.

At Abu Ghraib prison, employees of two PMSCs were implicated in the prisoner abuse scandal, including allegedly raping a male juvenile detainee, directing the use of dogs and other forms of torture during interrogations, ordering a prisoner not to receive his prescription pain killers, and forcing a male prisoner to wear women’s underwear.

Despite these cases and many more, no private military contractor has been prosecuted throughout the war in Iraq because their actions are not governed by any laws. Under Coalition Provisional Authority Order 17, all foreign contractors have immunity from prosecution in Iraq.

The pattern is reflected in other conflicts around the world. In Colombia a subsidiary of British PMSC giant ArmorGroup has been implicated in providing detailed intelligence about community leaders protesting against an oil pipeline project to the the Colombian Army, which has been linked to executions and disappearances.

Several DynCorp employees in Bosnia were accused of running a prostitution ring that used under-age girls, as well as purchasing illegal weapons and forging passports. The firm’s site supervisor was accused of videotaping himself raping two young women. Employees were dismissed, but did not face criminal prosecution.

PMSCs have also played a role in many African conflicts, including Sierra Leone where the current Chief Executive of Aegis Defence, Tim Spicer, who today coordinates all PMSC activity in Iraq thank to an American contract, contravened a UN arms embargo by delivering weapons to the Sierra Leonean government. Spicer, who had already been jailed in Papua New Guinea, claimed both the knowledge and approval of the UK government.

This is just the tip of the iceberg. PMSCs are also involved in stockpiling and transporting weapons into conflict zones and assisting weak governments and rebel groups, especially in Africa, to shift the balance of war. De Beers, Texaco, Chevron, British Gas, Amoco, Exxon, Mobil, Ranger Oil, BP, American Airlines and Shell have all contracted DSL (now part of UK PMSC ArmorGroup). Halliburton specialises in energy exploration and construction, but also provides logistical support to the US military.

PMSCs are a dangerous and lawless outgrowth of our military industry. But the government has sat back and allowed them to spiral out of control because they play an increasingly large part in our war planning.

PMSCs allow governments to maintain a global reach while avoiding the need to send troops and thereby evading accountability from a public increasingly unwilling to pay the costs of war. Indeed it is believed that the UK and US would now struggle to wage war without PMSCs operating as their paramilitary partners.

Given how fast the industry has already expanded, it is essential that legislation ends these fantasies before they get any more concrete. But this will not be achieved simply by outlawing the right of corporations to have troops on the ground.

A binding international framework of rules under the auspices of the UN remains the long-term goal in regaining control over mercenary operations. But in the meantime national legislation in countries at the forefront of the industry, like the UK, is essential and long overdue.

There is broad agreement that PMSCs must not be allowed to take part in direct combat operations, but there is considerable resistance within the Labour government to outlawing the use of PMSCs, partly because of their strategic usefulness but partly also due to their economic value to the UK.

The government must not allow warfare to be privatised. PMSCs must not be involved in combat or combat support, as defined in their widest senses, and must be subject to the strictest form of regulation for all other services they provide.