Valentina Pasquali

On December 10th 2008, the United States Congress passed a legislation establishing that governments involved in the use of children as soldiers may no longer be eligible for major U.S. military assistance programs. The legislation was passed unanimously by both the Senate and the House as part of the Trafficking Victims Protection Reauthorization Act. Sponsored by Senators Richard Durbin (D-IL) and Sam Brownback (R-KS), the legislation restricts the provision of International Military Education and Training (IMET), Foreign Military Financing, Excess Defense Articles, Foreign Military Sales, and Direct Commercial Sales to governments using child soldiers directly in their own armed forces or that support paramilitaries or militias that do so. Center for Defense Information’s Rachel Stohl, an expert on small arms proliferation and children in armed conflict,, is among the people that over a ten year period conducted research and later provided briefings and reports to the U.S. legislators which helped them drafting and passing the bill. The Center for Defense Information (CDI) is a division of the World Security Institute. In her interview with Washington Prism, Stohl talks about the legislation, what it means for the United States and for child soldiers around the world, and the steps ahead.

Valentina Pasquali (VP): Can you explain to us some of the core mandates of the legislation passed by Congress last week?

Rachel Stohl (RS): The legislation limits certain categories of military assistance to governments that are either using child soldiers or that are supporting paramilitary or militia groups that employ child soldiers. This means that the legislation applies even when a certain country’s armed forces might not specifically be using child soldiers, but we might have knowledge that a militia group allied with the government does. The underlying principle is that any military assistance that you give to the government would filter to that militia group.

The countries that are on this list now, are the ones that are receiving U.S. military assistance at the moment and are known to employ child soldiers. As of today, the legislation could affect: Afghanistan, Chad, the Democratic Republic of Congo, Sri Lanka, Sudan, and Uganda. There are two other countries that use child soldiers in their armed forces; Somalia and Burma. But the U.S. doesn’t provide military assistance to them, at least in the way with which the legislation is concerned.

VP: Does this legislation only affect military assistance? Or is there any other form of economic assistance that is also taken into account?

RS: No, it only concerns military assistance. More specifically, it only comprises five specific categories: IMET, Foreign Military Financing, Excess Defense Articles, Foreign Military Sales, and Direct Commercial Sales. The truth is that there are numerous other military aid programs, which the legislation does not affect. Moreover, the bill allows for a waiver for countries that are working to professionalize their militaries. This means that those that are already trying to stop using child soldiers will not be affected.

This legislation is not designed to be a form of punishment. It is an incentive. So it’s a carrot, not a stick. We are trying to get governments to make sure that they are not employing children in their militaries or supporting groups that are. A military of that sort is not a professional military. And it is certainly not a military that the U.S. would want to work in close contact with. I have talked with many in the U.S. Marines and learned that it is very common for them, particularly in Afghanistan, to have to guard a check point with a Afghan soldier who might be fifteen year-old. Many of our Marines have fifteen-year-old children at home.

VP: What do you think is the most immediate and practical implication of the legislation?

RS: Well, for U.S. taxpayers, this means that their money is not going anymore to governments that support the use of child soldiers. It is important because tax payers want to make sure that their money is used according to the values that we uphold in the U.S. I think this is a huge achievement for the legislation.

VP: Do you believe that the law has enough teeth to have an impact on the foreign governments and militaries as well?

RS: As in all legislations, in this one too there are several loopholes and there still exist many ways in which military assistance can be provided in spite of this law. In that sense, this is a very symbolic victory, rather than a final resolution of the problem. However, it is also another tool that the U.S. Government has when encouraging governments like Uganda or Afghanistan to conduct itself in accordance to U.

S. desires. It definitely isn’t the end of it all. One law by itself will not make these governments completely change behavior. But it gives the U.S. one more tool to encourage them to stop this practice.

VP: While conducting the research that supported legislators in their aim to write and pass the bill, did you work with people and organizations from the countries involved?

RS: It depended on the country. We have done significant amount of work with people in Uganda and many organizations I have worked with in the United States have programs there as well. We spoke to many child soldiers and to people that work to rehabilitate them. Afghanistan is a different story.

Some of these countries don’t have a civil society and as a result, they don’t have NGOs that operate on the ground, or in the case they do, they are not free to come to the U.S.

VP: As far as the hope of stopping the use of child soldiers all together, albeit maybe in a distant future, which countries do you consider as the toughest challenges and which ones seem more prone to implement the reforms needed?

RS: Burma has the most child soldiers than any country in the world. There are over 70,000 in the government army. That is an incredibly difficult challenge. Countries like Uganda where conflicts have been raging for over 20 years have developed a culture of this kind, whether it’s on the side of the Lord’s Resistance Army (LRA) or the local militias. Child soldiers have become part of the conflict now. So the challenge is not just stopping the use of child soldiers. It really becomes a matter of changing the context in which these children are living so that the use of child soldiers no longer is a viable option.

In the end, I believe it will vary on a country-by-country basis. In Colombia, for example, the government itself changed its national policies so as to stop using children under eighteen in its military. Yet at first it still supported the paramilitaries that were doing so. However, in the longer term the Colombian government also interrupted its support for these paramilitaries. This is a good example of how things evolve over a long time, that it is definitely not a short term process.

VP: You worked on providing research material for this legislation for ten years. Having followed it for this long, is there anything you wish for that is missing in the bill?

RS: Yes, definitely, there are many things! There is a national security waiver. And a five year waiver that applies to those countries that pledge to professionalize their militaries. The problem with this is, of course, that in the legislation there is no metric to determine whether this ongoing professionalization is actually taking place or if it is only an empty claim. With the latest additions to the bill, it appears now that the U.S. Secretary of State has the authority to determine which countries go on the list of those ineligible to receive military assistance. But we are still unsure about exactly how the process works. It would also be nice if the law applied to some more categories than just those five. Those are indeed the five biggest. But there is a trend now in U.S. military assistance not to provide assistance through those traditional accounts and instead to open new accounts that are not bound by those restrictions.

VP: Where do you go from here; are you going to keep working on this same project or do you consider it over with the passing of the legislation?

RS: No, the program is not over. There are a few things to be done in the near future. We have to decide what those metrics are. We have a meeting scheduled at the State Department for January to discuss precisely that. Then we need to figure out what process will be used to implement this bill. In the longer term, we are going to have to develop new legislations to close some of these loopholes that were snuck in at the last minute, particularly by the Republicans. Although this was a bipartisan bill, in the final moments when people were trying to compromise and get things done, there were changes made.

In short, I believe this is a huge victory. We are only the second country in the world (the only other one is Belgium) that has a legislation of this kind. But there are still many things to do to improve it.

VP: Personally, when and how did you start working on this issue and what have you learned from this 10-year-long process?

RS: I started working on child soldiers when I first came to CDI in 1998 because there had already been an established child soldiers program here. But I didn’t want to work on it from the perspective of children’s rights, because there are already many people that do this. It is a children rights issue, I don’t mean to suggest that it is not, but there are many organizations working on this side of it. So I simply asked myself; what personal contribution can I make to this field? What expertise can I bring to the table that can help improve the situation for the children? The answer was in the weapons connection. Child soldiers are not caused by small arms proliferation, but certainly arms proliferation contributes to the lethality of child soldiers, because it is very easy for them to become effective killing machines with a gun. This legislation was a long term goal that the campaign established back in 1998.

Originally reported and written for Washington Prism

Washington D.C. — On July 26 the House and the Senate passed bills meant to reform the process regulating the Committee on Foreign Investment in the US (CFIUS), an inter-agency committee of the Executive branch in charge of evaluating foreign investments in the United States or foreign acquisitions of US companies that might interfere with the country’s security.  The Congress’ effort to implement changes to this legislation was mainly prompted by the Dubai Ports incident of this past spring.

In March 2006 Dubai Ports World (DP World), a company owned by the government of Dubai in the United Arab Emirates (UAE), purchased the Peninsular and Oriental Steam Navigation Company (P&O) of the United Kingdom, which was then the fourth largest ports operator in the world. P&O managed major U.S. facilities in New York, New Jersey, Philadelphia, Baltimore, New Orleans, and Miami. Because the transaction involved what can be considered as infrastructures critical to the US national security, such as ports, it was chosen to be reviewed by CFIUS.

The acquisition was approved by the committee, but it spurred a heated debate in Congress. Republicans and Democrats alike raised concerns over the transaction based upon the 9/11 Commission report, which stated that two of the hijackers were UAE nationals, and upon the belief that the UAE was a financial base for al Qaeda.

President George W. Bush, a supporter of the acquisition, threatened to veto any legislation by Congress that would have blocked the deal. In February, Bush claimed, “It would send a terrible signal to friends and allies not to let this transaction go through.”

In March, as a way to cool off the controversy, DP World said that it would have transferred its operations in the US to an American entity. As of the summer, however, DP World still owns and controls operations at 22 ports in this country.

The Dubai Ports incident brought to public attention the otherwise obscure role of CFIUS.  The Committee was instituted in the 1970s as a mean to assess security risks associated with Foreign Direct Investments (FDIs). It is a twelve-agency committee, with 6 departments (State, Defense, Commerce, Homeland Security, Justice and Treasury) and 6 inter-offices of the President, like the US Trade Representative. It is chaired by the Secretary of Treasury, while the Secretaries of the other departments are the sitting members. CFIUS now operates under the Exon-Florio Amendment to the Defense Production Act, enacted in 1988, which empowers the President to block mergers and acquisitions of American companies by foreign firms in the case that such transactions are judged as a possible threat to national security. In reaction to the DP World acquisition of P&O, two bills were recently passed putting forward measures to correct the review process’ supposed flaws.

The Senate bill (S. 3549) is called the Foreign Investment and National Security Act of 2006. It was sponsored by Senators Shelby (R-AL) and Sarbanes (D-MD). The House bill is H.R. 5337, the National Security FIRST (Foreign Investment Reform and Strengthened Transparency) Act of 2006, sponsored by House Majority Leader Whip Roy Blunt (R-MO). “The Dubai Ports World fiasco exposed serious flaws with the CFIUS process,” Blunt told reporters right after his bill cleared. “The bill the House passed is a common-sense fix to the problem that protects Americans first without hindering job growth and economic expansion.”

The Treasury chair of CFIUS is one of the points that came under the heaviest criticism. In the eyes of many such set up puts an unbalanced focus on the purely economic side of FDIs reviewed and does not take into sufficient account national security concerns. The two bills also address a supposed lack of transparency in CFIUS proceedings. The Committee is criticized for having resisted requests by members of Congress to brief them on the details of transactions, although its members defend such approach as an effort to protect the confidentiality of the process. Finally the proposed reforms aim at extending the timelines for the reviews, as the current thirty-day period is deemed insufficient for proper investigation to be carried out.

The two bills have different approaches as to the ways CFIUS supposed shortcomings can be solved. Now that they both cleared the floors of House and Senate, the two sides will have to come together and compromise in order to come up with a document that can be then signed into law by the President.

Even before the bills were passed, however, some observers expressed doubts over the approach of Congress in trying to reform the CFIUS review process. The Council on Foreign Relations (CFR), a think tank based in New York City, published a report on the topic. “Foreign Investments and national security – Getting the Balance Right” was released on July 18th and co-authored by Alan Larson and David Marchick, of Covington and Burling, a consulting firm in Washington DC.

The two analysts review CFIUS and its mechanisms as they are implemented now, critique its shortcomings and offer recommendations for changes. The study also addresses the reforms under consideration in Congress and openly raises reservations over how the Senate bill especially puts forward proposals that could have a chilling effect on Foreign Investments in the US.

Alan Larson told Washington Prism in a phone interview; “As the report underscores, we found scope for improving transparency and clarifying the role of Congress in the process. But a number of other criticisms missed the mark and we believe that the CFIUS review process has worked better than it is given credit for.”

The CFR Report points out to the importance of FDIs for the economic health of the United States. In 2003, the report notes, US affiliates of foreign investors employed 5.3 million workers in the United States, about 5% of the American workforce. On average, these affiliates pay higher annual wages. Foreign investors also spend consistently on Research and Development, creating high-skill, high-wage jobs that would not otherwise exist. Continued inflows of foreign capital are important to the US economy for another reason as well; US savings is insufficient to finance domestic investment, as shown by the current account deficit.

By benefiting economic health, FDIs also become a key factor in safeguarding national security.  “For example,” the report underlines, “foreign investments can contribute to infrastructure modernization and development of technologies in the United States.”  As such the main preoccupation of Larson and Marchick is that “the new legislation should not create the presumption that Foreign Investments in critical infrastructure automatically represent a threat to national security. They can actually help enhance it” Larson told us. Furthermore Larson and Marchick fear that unnecessarily restrictive approach to FDIs may simply encourage other countries to retaliate and take actions to limit the opportunities for American investors.

The recommendations offered by the CFR report seem to go the opposite directions to those that Congress is seeking to implement. Larson and Marchick believe that the Exon-Florio Amendment does not need major changes and that with a few minor corrections problems of transparency and accountability could easily be solved. If any, the CFIUS process could use reforms that make it easier for foreign investors to operate in this country, not harder.  “First of all, our opinion is that the majority of FDIs don’t raise security concerns” Alan Larson told Washington Prism.  This is immediately clear if one looks at the number of transactions that are actually reviewed by CFIUS. Out of over a thousand that go through annually, the Committee is called to evaluate only between forty and sixty-five. Furthermore, since 1997 only one acquisition was blocked and thirteen offers were withdrew before the CFIUS assessment because it was made clear to the foreign investor that the transaction would have not been allowed. Secondly, even in those cases that present security concerns “Exon-Florio already offers ways to address such issues,” for example through the negotiating opportunities embedded in the Amendment that give the two sides a chance of compromising and resolving contentions within individual deals.

The CFR report seems to conclude that CFIUS is already equipped with the tools it needs to carry out its job and that reforms must be careful.

The Administration, while showing willingness to work with Congress in updating the legislative framework of CFIUS, also warns of the consequences that excessive changes could trigger. In a testimony before the House Financial Services Subcommittee, Assistant Secretary for International Affairs Clay Lowery said “Reforms to the CFIUS process should send a signal that the United States is serious about national security and welcomes legitimate FDI. The Committee must examine each transaction thoroughly, but the timeframes for examination should not be unnecessarily long”. Lowery also emphasized the importance of preserving the attractiveness of the United States to overseas investors. “If foreign companies were to reduce their spending in the U.S. as a result of perceptions that the United States was less welcoming of FDI,” he stated “lower investment would cost American workers good jobs, reduce innovation, and lower the growth of the U.S. economy.”

The determination of Congress to reform CFIUS almost appears to have been prompted by concerns other than actual problems in the Exon-Florio mechanism. Partially, the complaints coming from both the House and the Senate over a supposed lack of transparency in the review process point out to the power struggle that exists between the Executive and the Legislative branches and underscore a track record of people in Congress wanting a larger role that they have.  Secondly, the decision of the Executive to approve the DP World acquisition of P&O, which seemed reasonable from the outside, nevertheless struck many in Congress as a surprise and as such contributed triggering a reaction. Finally, the Dubai Ports case followed closely another transaction that became quite controversial last year. In June 2005 China National Offshore Oil Corporation (CNOOC) made an $18.5 billion offer to buy the American oil company Unocal Corporation. A broad group of Democrats and Republicans reacted negatively to the offer and used a variety of arguments to help ensure that the Chinese bid failed. Despite the hands-off approach of the US administration and despite the fact that there was no direct block of the purchase, Congressional delays undermined the transaction. On August 2, in fact, CNOOC announced that it had withdrawn its bid, citing political tension inside the United States as the reason for such decision. The CNOOC case symbolized the rise of China as a world power and as such raised very delicate political issues, which likely also contributed to the desire that grew in Congress to reform the CFIUS process and to make the standards stricter for foreign investors wanting to operate in the United States.

Originally reported and written for Washington Prism