Private security companies operating in South Africa could be forced to transfer over half of their ownership into the hands of South African citizens if new legislation is passed.
The Private Security Industry Regulation Amendment bill has been heavily criticised for proposals that would mean all companies operating in the country would need to be 51%-owned by SA citizens.
Foreign-owned private security companies have been suggested to be a threat to the security of South Africa, but in the face of little evidence to support the claim the bill is currently being redrafted.
South African publication the Financial Mail, says that police minister Nathi Mthethwa believes there is an identified security threat associated with criminal elements infiltrating the security industry. The UN, he claims, has recognised the security threat posed by the international growth and globalisation of security companies.
Martin Hood, a lawyer representing some of the private security firms that would be affected, is quoted as saying this is “absolute rubbish” and has called for proof of a link.
The idea that globalisation could be leading to an increased threat level for nation states around the world isn’t completely ridiculous – when applied to terrorism that is.
However, equally the fight against crime and terror also requires a globalised approach in order to properly control it.
The purpose of the South African legislation seems to be more about building a protectionist economy that doesn’t rely on the fortunes of foreign companies than it is about protecting from a threat to security.
The most likely outcome of any such legislation is the formation of a hyper-local security industry that fails to keep up with global trends. Foreign investors will be put off and job losses likely.
Mr Mthethwa disagrees with my view though, apparently saying: “This argument has no basis. The provision of security services depends on supply and demand like any commodity in the market place. Change of ownership will not change demand. There’s no evidence that because there will be change in ownership, people will simply disinvest.
“Indications are that when the time comes they will sell the relevant shares to comply with the law, not closing down as we are led to believe. When foreigners bought a number of SA companies no job losses were experienced. Private security companies, like any business, are driven by profit, nothing else.”
The private security industry in South Africa is one of the biggest in the world with an estimated 1.7m registered security guards (the UK meanwhile has around 3-400,000 licensed guards).
However, estimates from the Private Security Industry Reegulatory Authority (PSIRA) South Africa suggest less than 500,000 are actually ‘active’ guards.
There is also recognised to be a significant level of unregistered security guards in work in the country.
Mr Hood has publically accused the PSIRA of not doing its job properly by failing to shut unregistered companies down.
He said, “[The PSIRA] concentrates on the established operators, because it is easier to victimise them than to go after the unregistered operators.”
Interesting that at a time when the UK is focusing on deregulation, South African authorities want more.
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