SWEDEN Trends and Developments Contributed by: Erik Olsson, Christian Hybbinette and Daniel Lundqvist, Kahn Pedersen
For the vast majority of companies, establishing the domestic capacity required for security of supply pre - sents a major challenge. Companies whose operating models rely on “just-in-time” deliveries and “follow- the-sun” support are being forced to reconsider their strategies and establish a stronger local presence and capability. The rebuilding of Sweden’s total defence now under way is, in this respect, a disruptive force across society. For companies seeking to retain a more traditional, global operating model, the concept of total defence presents a genuine challenge. For companies able to adapt their organisation and establish a stronger local presence, however, Sweden’s total defence structure offers the kinds of commercial opportunities associ - ated with major economic paradigm shifts. Cold War-Era Legislation, Revamped The concept of total defence has deep roots, and Sweden has organised its defence on this basis since at least the Second World War. The concept assumes that Russia is the principal adversary, and is designed to prepare Sweden for the kind of protracted invasion war now being fought in Ukraine. Between the fall of the Berlin Wall and Russia’s annex - ation of Crimea, however, the concept of total defence lay dormant. The legislation governing total defence remained on the books but was not applied in practice for nearly 25 years. Now that this legislation is being reactivated, much of it appears outdated and poorly suited to the activi - ties that constitute modern total defence. Much has changed since 1989. Firstly, tasks relevant to total defence are now car - ried out to a far greater extent by private companies. Secondly, those companies are far more likely to be international or global businesses. Thirdly, the servic - es they provide are significantly more complex and increasingly dependent on highly specialised interna - tional expertise. Cold War-era total defence legislation is plainly insuffi - cient to address the complexities of modern business, and intensive legislative work is under way across all
sectors to modernise the existing rules. At the same time, there is a reluctance to begin again from a blank sheet of paper. Russia’s full-scale invasion of Ukraine has under - scored the urgency of rebuilding Sweden’s total defence capabilities, and there is simply no time to reconstruct the entire system from the ground up. The approach has therefore been to preserve as much as possible of the legal structures inherited from the Cold War, while updating them where necessary to reflect the present-day defence policy and economic envi - ronment. One of the principal challenges in this modernisation effort is to develop a contemporary equivalent of what was known as the “K-company”. Agreements Come First Although a legislative framework exists, Sweden’s concept of total defence has always relied heavily on voluntary participation. At its height, the Swedish total defence system included – in addition to public- sector actors – an estimated 11,000 private compa - nies that had voluntarily committed themselves to total defence planning. These companies, known as “K-companies”, had entered into agreements under which they undertook to make their resources avail - able to the defence effort in various ways in the event of heightened readiness or war. The voluntary nature of these arrangements is, of course, open to debate. As is often the case in the Swedish legal tradition, the State will generally first seek to reach an agreement. If no agreement can be reached, however, it will not hesitate to legislate. The same approach is being followed today. Each sector-responsible authority first considers whether the desired total defence capability can be secured through a so-called preparedness agreement, or “F-agreement”. Only if this route proves insufficient may legislation be used to impose obligations on the companies concerned. There are several reasons for preferring this approach. A negotiated agreement defining how a particular company is to contribute to total defence can take
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