President Jacob Zuma should send the Private Security Industry Regulations Amendment Bill back to Parliament, the South African Chamber of Commerce and Industry (SACCI) said on Thursday.
The provision in the bill requiring 51-percent domestic ownership of security companies had to be removed, CEO Neren Rau said in a statement.
“SACCI calls on government to commit to regulatory impact assessments as a safeguard to prevent adverse and unintended consequences from legislative proposals.”
The chamber also sought a reversal of the regulatory trend of increasing interventionism in the business environment.
Rau said the chamber recently hosted a panel discussion on the 51 percent ownership provision, explaining why it was “significantly problematic”.
Peter Draper, CEO of policy and regulatory analysis firm Tutwa Consulting, told the panel the bill would violate a number of international commitments.
“The security bill will seriously annoy our trading partners like the UK, Switzerland and the US,” Draper said.
“If South Africa proceeds with the security bill, it is very likely that our trading partners may retaliate with higher import barriers.”
Rau said JB Cronje, policy analyst at the Trade Law Centre, noted how the bill would put South Africa at odds with the eligibility requirements for the African Growth and Opportunities Act (AGOA), a US non-reciprocal unilateral trade act.
“AGOA expires in 2015 unless the US Congress decides to extend or replace it with a new act, and South Africa stands to lose out on the substantial market for automotive exports if graduated out of AGOA,” Rau said.
The bill also contained several legal uncertainties, including a provision that allowed the police minister to unilaterally change the domestic ownership allocation of sub-sectors within the security industry.
Neither did it contain a transition mechanism, which meant security company owners would be forced to sell their shares immediately after the bill became law.
If the bill was not sent back to Parliament for review, it could be challenged in court, where it would most likely be struck down as unconstitutional, Rau said. - Sapa