The lucrative private contracts to help rebuild Iraq have meant big pay checks for even relatively unskilled workers. But as the reports of civilians being attacked, kidnapped, mutilated and murdered grow more frequent, are companies reconsidering their decision to participate in the reconstruction process?

"I don't think anybody predicted early on that the situation following the war was going to be as dangerous as it's become," said Bill Cobb, director of human resources for Vinnell Corporation, a Northrop Grumman Company that has several hundred employees in Iraq training new Iraqi soldiers. "I suspect more and more people [and companies] will bail out and more and more will decide not to go over there."

No firms have pulled entirely out of Iraq and representatives for most private military firms insist their companies will finish the job they started. But there are indications that some companies are scaling back their work.

It was reported in April that Siemens AG, the German engineering company, and United States-based General Electric Co. and Bechtel suspended their work, at least temporarily. Employees for Siemens stopped repair on an electrical plant in southern Baghdad while the American firms also halted some of their work, particularly in central and southern Iraq.

"We have had delays in some of our work in Iraq because of the security measures that have been put in place," GE spokesman Gary Sheffer told the Associated Press. "Work is continuing in some cases. In some other cases the work has been delayed."

Halliburton and its subsidiary KBR have had 34 employees die in Iraq-Kuwait in the last year and there were some news reports that top Halliburton executives were considering a withdraw from Iraq. Halliburton officials emphasized to Expatica HR that they are committed to completing their contracts.

"Our employees and subcontractors understand the danger in Iraq, and — with very few exceptions — they are steadfast in their dedication to complete the job in Iraq," said Patrice Mingo, a spokesperson for KBR. "KBR is monitoring the security environment in Iraq, and we will continue to work with coalition authorities regarding the safety and security of all personnel in the region."

Though companies are typically tight-lipped about employee safety as well as compensation packages, some acknowledged that the situation is more dangerous than initially predicted. "We expected a more permissive work environment," said Francis Canavan, a Bechtel spokesman.

Some firms with personnel on the ground in Iraq have extensive experience with putting employees into dangerous, even deadly, locations and situations. Vinnell has been sending people to Saudi Arabia for the last 30 years to train the Saudi Arabian National Guard. Ten of its employees were killed last May 12 in a bombing thought to have been committed by Al-Qaida.

Despite incidents such as that and the dangerous situation in Iraq, Human Resources Director Cobb said he hasn't noticed a decline in the number of applicants for jobs with Vinnell. With salaries of USD 200,000 a year, people are willing to take risks. Personnel staffing warehouses reportedly make up to USD 100,000 while engineers are taking home over USD 350,000.

At Vinnell, employees receive a base salary plus a danger bonus of 25 percent and a location bonus of 25 percent. Location bonuses are granted when the work site is not necessarily dangerous but inhospitable.

At Bechtel, employees on international assignment do receive a bonus but Canavan declined to be specific. Published reports have put the figure at 15-20 percent on top of basic salary.

As the situation becomes increasingly dangerous, compensation packages can be adjusted if an employee has a contract that permits re-negotiation, said P.W. Singer, author of "Corporate Warriors," a study of the private military industry. Alternatively, employees can also go somewhere else. Personnel already on the ground are a precious commodity to firms in Iraq, saving HR staff from recruiting, hiring and training.

"They'll pay a premium to a person [in Iraq] because they can be at work in two weeks," Cobb said.

But at what cost? Because private firms are not under the same disclosure obligations as the military, it remains unclear just how many civilian workers have been killed in Iraq. Between 30 and 50 deaths have been confirmed, according to one article.

When asked whether any Bechtel employees had been killed in Iraq due to attacks, Canavan said, "We do not publicly discuss safety or security issues, including whether not Bechtel employees have been involved in security-related incidents." But, according to at least one published report, a Bechtel employee was killed in March in a mortar shell attack. [Bechtel later informed Expatica that the employee was working for one of Bechtel's sub-contractors at the time - although this does not lessen the tragedy.]

"Assuming the rough ratio of killed versus wounded that has held among U.S. troop casualties (1 to 6), this means that upward of 200 to 300 private casualties have gone unreported on the public ledger," Singer wrote.

The growing number of civilian employees has brought to light a number of other issues. They range from ethical questions related to the degree of responsibility an employer has to keep his employee safe to practical matters regarding the interplay between public and private entities.

"Speaking generally, one of the dilemmas these days is that the military is very dependent on the contractors, and many contractors are embedded in the military, diffusing the difference between the two," said Cobb. "The military can't throw up their hands and say, this is too hard, we are retreating. What do the contractors do?"

Some 15,000 civilian contractors are involved with "mission-critical" military roles, according to Singer, who is also a fellow at the Brookings Institution.

As the situation unfolds in Iraq, these issues are unlikely to disappear. According to Singer, it is estimated that after Iraq is granted sovereignty at the end of June, the number of private military contractors could rise to 30,000.

May 2004

Jennifer Hamm is a freelance journalist based in the Netherlands.