Nearly a year after the tragic shooting of 17 Iraqis by Blackwater security contractors, the Department of Justice is close to indicting six of the guards involved in the horrific events. This is a long overdue step toward holding contractors legally responsible for their actions in Iraq and Afghanistan.

But this positive move risks being overshadowed by a more destabilizing development: the apparent agreement, as part of U.S.-Iraqi Status of Forces Agreement negotiations, to revoke the immunity from Iraqi law that private security contractors have enjoyed since 2003. This decision could place diplomats, Iraqi civilians and PSCs at greater risk, and undermine the U.S. mission in Iraq. More must be done to hold security contractors accountable for their actions -- but this is not the way to do it.

The U.S. dependence on PSCs is well-known; Gen. David Petraeus testified recently that he could not complete his mission in Iraq without them. Even Sen. Barack Obama had to rely on Blackwater guards during his recent trip to Afghanistan.

Though PSCs have generally performed admirably, legal or even contractual accountability for contractors has been scandalously deficient. Under Coalition Provisional Authority Order 17, PSCs in Iraq were made largely immune from Iraqi law. The Pentagon and Justice Department abdicated responsibility as well; only a handful of contractors in Iraq and Afghanistan have ever been prosecuted for criminal acts.

However, placing contractors at the mercy of an underdeveloped Iraqi legal system is not a solution. Greater liability for PSCs will also bring a higher price tag. Furthermore, PSC ranks will become deprofessionalized, as many of the most experienced contractors may decide that the risks of being thrown in an Iraqi prison are not worth a paycheck.

A greater risk, however, will be the resulting reliance on third-country or local-country nationals, who often lack proper experience and training. In Afghanistan, a Canadian solder was recently killed by an Afghan PSC. The Canadian Press wire service described the low standards for local contractors: "They are often a ragtag band of locally hired guns. Many are known to have a drug problem. The vast majority of them are illiterate and slap on a uniform after receiving what can only charitably be described as cursory instruction in military tactics and the handling of an assault rifle. In Afghanistan, they are called private security contractors."

Even with a drawdown of U.S. troops in Iraq, American diplomats will need protective security for the foreseeable future -- a capability that currently does not exist in the State Department's Bureau of Diplomatic Security.

There are better ways to ensure accountability. In 2006, Congress extended the Uniform Code of Military Justice to cover Pentagon contractors. Legislation in Congress now would place State Department contractors under the jurisdiction of the Military Extraterritorial Jurisdiction Act. The bill, which would also create an office of enforcement in the FBI to investigate alleged contractor offences, is opposed by the Bush administration. But its eventual enactment would go a long way toward clearing up much of the legal confusion surrounding contractors.

More steps should be taken, including the establishment of an extraterritorial U.S. attorney to prosecute potential criminal violations. We need improved vetting, training standards and third-party certification for PSCs. Finally, the Departments of State and Defense should consider developing their own capability for providing personal security, rather than relying so heavily on the private sector.

What has been sorely lacking on the contractor front is the political will to prosecute criminal offences. That is why Congress and the Iraqi Government have been demanding action -- and the recent announcement of possible indictments is such an important and long overdue development.

Unfortunately, at the exact moment that contractor-related accountability issues are being taken more seriously, the Bush administration is negotiating an agreement with the Iraqi government that would weaken protections for PSCs, and risk undermining the professionalization of the private contractors protecting U.S. diplomats.