Johannesburg - The private security industry has come under intense scrutiny over the past few months because of the government’s push to sign the Private Security Industry Regulation Amendment Bill into law.
The amendment bill is controversial because it aims to force foreign-owned private security firms to sell at least 51 percent of their companies to South Africans. Some firms include ADT, Chubb and Securitas.
Former police minister Nathi Mthethwa told Parliament in February the amendment bill came about as a result of tremendous growth in the private sector security industry. There are more than 445 000 registered security guards, compared with little more than 270 000 armed statutory forces (the SAPS and the SANDF).
He said that South Africa had the largest private security industry in the world, with nearly 9 000 registered companies.
The bill aims to regulate foreign ownership and control private security businesses, regulate operations of security firms outside South Africa, provide for accountability and provide a separate database on firearms issued to security service providers.
DA police spokeswoman Dianne Kohler Barnard said the bill was awaiting President Jacob Zuma’s signature. She is calling on him not to sign it into law because of the foreign ownership issue.
“The bill is meant to regulate the industry, which is something we do need, but instead there is this bizarre clause that foreign companies must sell 51 percent to South Africans, or an amount determined by the minister, which could be 100 percent if he wants.”
She said it was the first time such a law had been proposed, and was similar to ownership laws in Zimbabwe promulgated by its president, Robert Mugabe.
“It will be devastating and it will breach global treaties, so we could be tied up in international courts for years.”
According to the Private Security Industry Regulatory Authority, it was estimated that between 15 000 and 20 000 new members joined the private security industry each month, reported defenceWeb. But many operated unlawfully and did not register with the organisation.
“The South African private security industry is increasingly performing functions which used to be the sole preserve of the police. This has, and will continue to have, a serious influence on the functioning of the criminal justice system as a whole.
“While it is true that private security does and can fill certain vacuums, private security can never replace the public police,” Mthethwa said.
He said the industry was vulnerable to criminal networks, citing the voluntary process in 2008 when 170 728 guards were vetted through the SAPS criminal records centre, 14 729 were flagged as being linked to possible criminal activities.
But, his remarks were unpopular. Commentators pointed out that police officers were also involved in criminal activity and that private security was a necessity in the country.
Leading black businessman and the chairman of the Free Market Foundation, Herman Mashaba, lambasted the amendment bill.
His company, Lephatsi Investments, owns 30 percent of the Swedish private security firm Securitas.
He said that South Africa’s ability to attract foreigners to fund and invest in the economy was an important mechanism to fuel growth.
“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 told Business Report in May.