The Working Group on Mercenaries, one of the special procedures of the UN Human Rights Council, has been entrusted to monitor the impact of the activities of private military and security companies (PMSCs) on the enjoyment of human rights and to prepare draft international basic principles that encourage respect for human rights on the part of those companies. The number of private security and military companies which operate domestically and internationally is increasing due largely to the outsourcing of governmental functions. They have been operating without proper supervision and accountability in countries with ongoing conflicts, such as Afghanistan, Colombia and Iraq. They recruit former policemen and soldiers from developing countries as 'security guards', but in fact they are 'militarily armed private soldiers', or mercenaries. Employees of PMSCs have committed serious human rights violations, but have also been subject to abuse by their employers. Member states of the United Nations should identify those military and security functions that cannot be privatised, contracted out or 'outsourced' and should remain a prerogative of the state. New international regulations, most likely in the form of a new UN Convention with an accompanying Model Law, are needed in order to bring PMSCs fully out of the legal 'grey zone' in which they have been operating.