Cape Town - The Private Security Industry Regulatory Association will next week head to court where it will defend its controversial annual fee increases.
The association, which appeared before Parliament’s portfolio committee on police on Thursday, indicated that it would go to the North Gauteng High Court on Monday in the matter between itself and the Security Industry Alliance (SIA).
In November 2011, the beleaguered PSIRA published a new fee structure, hiking its annual membership fees, in some instances by up to 1 000 percent.
The increases mean that companies will now pay annual fees of R4 250 instead of R3 000. The fees companies pay for each of their security officers have, however, soared by 1 000 percent from 70 cents per officer per month, to R7 per officer.
In heads of argument, the SIA, an umbrella body representing 749 companies in the industry, sets out six reasons why it is opposed to the fees, including that there had been inadequate consultation, the increases were “irrationally large” and that they did not correspond to improved services.
In the papers, the SIA uses South Africa’s biggest security firm Fidelity Guards as an example of the impact the fees will have on companies. Fidelity employs more than 26 000 security personnel. Under the old fee structure of 70c per guard, they paid approximately R219 000 in fees. Under the new structure, they will be paying in excess of R2-million – eating significantly into their five percent profit margin.
In its heads of argument, the PSIRA indicates that it has been “plagued by bad management, lack of resources and the inability to efficiently regulate the private security industry” since its inception.
The association argues that to combat this and prevent a “crisis situation”, it was forced to hike the fees.
But despite the court case concerning the fees, and an interdict already in place to stop the fees being charged until the court matter is settled, the PSIRA presented figures based on the hiked fees to Parliament on Thursday,.
Members of the committee were not impressed. Acting committee chair Annelize van Wyk questioned why the figures reflected the increases when the matter was still in court.
“You’re basing this on the assumption that the court goes in your favour. What is your contingency plan if the court rules against you?” she asked.
The DA’s Dianne Kohler- Barnard said the hikes had been made “despite the fact that you looked incapable of actually collecting the tariffs”.
The Auditor-general has expressed reservations about the PSIRA’s ability to continue operating as a going concern, and it has posted deficits four years in a row, mostly due to bad debts, and unpaid tariffs and fees.
This was not the only thing that upset the committee as it set about tearing into the PSIRA, which it said presented contradictory financial statements and “sloppy reports” which didn’t even get the basics such as page numbering and grammar right.
PSIRA officials bumbled and apologised their way through the meeting, which took over three hours to just deal with the first of their programmes, law enforcement.
Van Wyk also questioned why the mistakes made in the association’s annual report had not been corrected as advised by the committee previously.
“You were told to table erratums to Parliament and this has not yet been done. This is a serious concern, and I know you are aware of it,” she said.
She also hammered the association because the figures in its annual performance plan did not match those presented in the estimates of expenditure.
The IFP’s Velaphi Ndlovu asked how much money was needed by the body to function properly, and while an exact figure was not indicated, director Manabele Chauke said the body last year had 52 inspectors who were supposed to inspect an industry with over 6 000 businesses and hundreds of thousands of individual security guards.
In a statement issued after the meeting, Van Wyk said the committee was “disappointed” by the PSIRA’s presentation.
“The committee is concerned about the fact that the authority was unable to supply the exact number of registered security companies, or the number of firearms in the industry.
“This is hugely concerning as this is the core objective of the authority and as such they should know,” her statement said.
Weekend Argus