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Private security bill ‘will harm SA’

Johannesburg - Leading black businessman and chairman of the Free Market Foundation Herman Mashaba yesterday lambasted the government for rushing through controversial bills that would harm the economy irreparably.

He specifically chose the Private Security Industry Regulation Amendment Bill, which aims to force foreign-owned private security firms to sell 51 percent of their companies to South Africans.

Herman Mashaba lambastes the government for rushing through controversial bills that he says will harm the economy irreparably. Photo: Timothy Bernard. Credit: Independent Newspapers

The proposed requirement is similar to that of Zimbabwe’s indigenisation laws, which demand that 51 percent of foreign-owned firms be held by black locals.

The bill is with President Jacob Zuma for his signature.

It was one of the bills that went through a marathon session of the National Assembly late in February before a lengthy pre-election recess from mid-March.

Foreign-owned private security firms include ADT, Chubb, Securitas and Panasonic.

Mashaba’s company, Lephatsi Investments, owns 30 percent of Swedish private security firm Securitas. He said South Africa’s ability to attract foreigners to fund and invest in the economy was an important mechanism to fuel growth.

He said the amendment was a benchmark framework that, if implemented, could open the door for the government to apply the same principles of nationalisation to other industries.

“As a black investor and businessman, I believe it is unfair to expect our partners to relinquish 51 percent or more of their business,” he said.

Police Minister Nathi Mthethwa told Parliament in February that the amendment came about as a result of tremendous growth in the private sector security industry since the promulgation of the principal act in 2001.

He said there were more than 445 000 registered security guards compared with a little more than 270 000 armed statutory forces, namely the SAPS and the SANDF.

Mthethwa said: “The growth of the private security industry is not unique to South Africa. Internationally, the private security industry has grown significantly over the last two decades. However, the growth of the South African private security industry has out-stripped other countries.”

He said the bill was necessary because the line between private security companies and private military companies was becoming increasingly blurred.

Mthethwa said private security companies were increasingly used in the field of intelligence.

“Let me lay to rest the arguments by opponents of this bill, that it will lead to job losses in the industry. This argument has no basis. The provision of security service depends on supply and demand like any commodity in the market place. Change of ownership will not change demand,” he said.

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