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The Battle for control of security industry in South Africa continues…

admin September 7, 2013

The private security industry in South Africa is at a watershed. In the midst of unprecedented parliamentary and regulatory upheaval, the sprawling array of more than 1-million security guards, less than half of them registered, await the outcomes of battles being fought in Parliament and the courts over how the sector is to be controlled.

If South Africans were polled on the gravest threat they must contend with, crime would be among the leaders, if not the outright winner. How compromised is South Africa’s security? Crime statistics assimilated behind closed doors by the government, are up to 18 months out of date and, most believe, are fudged with manipulation that statistics are prone to. For most, the proliferation of the private security industry is the most articulate indicator of the wave of lawlessness, much of it violent, swamping town and countryside alike.

Just as the crime wave is worrying for the government, so is the growth of South Africa’s “army” of personnel, many armed, in the private security sector.

The ministers responsible for homeland security have launched a bill that will refine existing legislation into laws they hope will be more effective in taming the industry’s impetuous expansion.

At the same time the private security watchdog, the Private Security Industry Regulatory Authority (Psira) has announced greatly increased membership fees for South Africa’s more than 9,000 security firms and 450,000 registered personnel, most of them guards. Psira says it needs better funding to enforce regulations more effectively. Among other factors weighing in on the scrummage, are whether security costs should be tax deductible, financial pressure facing private security companies and participants’ identity crisis.

wh-africa-2The industry’s topsy-turvy growth has so alarmed the government that it is seeking to corral the entire sector under its control and hopes to do so with new legislation which, it says, is nothing more than the stronger formation of a partnership between state and private security.

The Private Security Industry Regulation Act Amendment Bill, 2012, has not had the smooth passage hoped for by Police Minister Nathi Mthethwa. It has twice been rejected by Parliament’s police portfolio committee and is in its third draft of 2012, with a hoped-for airing later this year. According to the committee’s acting chairman, Annalise van Wyk, the redrafting of the bill will make over some aspects of the amendment and seek further public opinion in new hearings.

wh-africa-3“Some shortcomings in earlier drafts were the result of insufficient public participation,” she says. “The broad issues the bill will address have not changed. They are being refined, being made less disjointed, and will avoid conflict with regulatory sections.”

Security Association of South Africa (Sasa) president Jenny Reid says while the government says it wants strong crime-prevention alliances between the private security industry and state law enforcement, “the partnership it envisages appears paradoxical and lop-sided. It is the iron fist in the velvet glove and reduces the proposed partnership to a control ratio heavily in favour of the government.”

What worries Ms Reid, and is probably why the bill was sent back twice for redrafting, is the near draconian control the minister appears to seek over the private security sector and the fact that he wants all security firms in South Africa to be majority-owned by South African citizens, regardless of companies’ global origins and proprietorship.

wh-africa-4Deputy Police Minister Makhotso Sotyu reiterated the government’s good intentions, promising a security conference that “the overhaul is intended not only to make the sector run more smoothly, but also to build strong crime-prevention partnerships between the private security industry and state law enforcement agencies” because by working efficiently together “we can achieve sustainable excellence in security technology and strategy”. But for the sector’s major players, the amending bill says something else.

Mr Mthethwa says the amendment bill aims to address gaps in the act caused by the lack of effective regulation, in particular the threat to national security posed by the participation of foreigners.
The Amendment Bill, 2012, is intended to:

  • Regulate foreign ownership and control of private security businesses in South Africa;
  • Regulate operations of security firms outside South Africa;
  • Provide for the role of the regulatory authority in promoting a crime-prevention partnership with organs of state;
  • Provide for accountability under a council or authority, including the formulation of regulations on the transportation of cash and other valuables;
  • Provide for a separate data-base on firearms issued to security service providers;
  • Provide for limitations on the participation of certain persons with scheduled criminal records; and
  • Provide for state funding of the regulatory authority.

But is the legislation governing South Africa’s private security sector really so broken that it needs such radical fixing?

wh-africa-5The Sasa chief maintains there is not much wrong with the Psira legislation as it stands and no amount of tinkering will solve the real problems. “No matter what laws are in place they are constantly flouted because the enforcement is not there. All that will happen when the amendment takes effect is that we will have changed laws, along with some new ones, and they will be ignored as well unless Psira gets tough. Psira is trying to squeeze more money out of the security community and the amendment will provide funding, but throwing money at the Psira problem will solve nothing unless the organisation is recreated with the skills and determination to make it work effectively,” Ms Reid says.

Psira concedes it has an inordinate flow of work, but maintains that it cannot fulfill its mandate because it lacks the financial resources to do so, and has not increased its fees in over 12 years. The amendment earmarks an undisclosed amount of state funding for Psira. The body attempted to raise its fees, some by 1,000%, two years ago, but was delayed by court action.

Proposed increases included a 40% jump in company fees from R 3,000 a year to R4,250 a year, while the monthly fee per guard would have risen 1,000%, from 70c to R7. For a company such as Fidelity, employing 26,000 guards, its monthly fee would soar from about R220,000 a month to more than R2m. The new fees would be a blow to the industry’s labour-related guarding sector. “The problem is the fly-by-night outfits do not pay fees and they are not regulated by Psira so they won’t be affected,” Ms Reid says. “The increase will ultimately be passed to the consumer.”

Dr Johan Burger, a senior researcher at the Institute for Security Studies, agrees.

“The problem with the private security industry in South Africa is the weaknesses in the enforcement of the regulations that govern it, so I support the state regulating the industry more efficiently.”

Dr Burger says the growing number of fly-by-night operations “create more of a risk than they provide a security service” by exploiting weaknesses in the regulatory framework.

wh-africa-6“Some security companies deceptively sell their services, especially to government structures, on the basis that they are able to provide a security service,” he says. “In fact there is nothing but a paper company and they convince the departments to buy their services. Once they have the money they pick up a few people at random, kit them out with a basic uniform and then they have a security company. So there are many deficiencies in the legislation on private security companies and that situation needs to be improved while, of course, ensuring that there is not over-regulation.”

Despite the bill’s rocky start, Dr Burger is convinced it will become law, although substantially different in content. “As with most bills,” he says, “it starts as an over-eager attempt to achieve more than it could, but hopefully (will be) able to address those weaknesses that exist.

“We cannot allow that situation to continue. It is just creating more problems for us in terms of crime and security.” “The growth of the industry has been an avenue of employment,” Security Focus editor Andrea Muller says. The private security industry is the largest employer in the safety and security arena, eclipsing police, corrections, justice, defence, intelligence and legal service industries.

Two actions in the pipeline threaten to cut the employment opportunities the industry offers: Psira’s new members’ fee structure and pending legislation to ban foreign companies from holding more than 50% in security firms. The industry sees the move as a threat to new investment and it could lead to divestment by foreign firms.

The increases were resisted, with legal action in the high court in Pretoria. The industry was represented by the Security Industry Alliance, the sector’s umbrella body. It lost the case and was ordered to pay costs but has lodged an appeal.

But there are signs the industry is intent on healing the wounds and finding common ground with Psira. “We’re pleased to say that Sasa and other industry associations are making great strides in developing a mutually beneficial relationship with Psira,” Ms Reid says. “No doubt this will go a long way in driving greater compliance, integrity and unity.”

Challenges facing the security industry in SA

South Africa remains an extremely violent country, with more than two million serious crimes committed between 2010 and 2011; of these 30% were contact crimes, 25.8% property related crimes. For every 1,000 crimes committed, only 430 suspects or criminals are arrested, only 77 are convicted and only eight are sentenced to two or more years’ imprisonment. With South Africa’s population expected to rise to 50.5 million by the end of 2012 and a higher unemployment rate, we can expect the crime rate in South Africa to rise. The industry needs to work together and address the problems and challenges if it is to find solutions and, more importantly, improve the private security industry in this country.

Some of the problems and challenges facing South Africa include:

wh-africa-7Poor policing and border control
One of the problems is South Africa’s open borders. Poor border control means an influx of illegal immigrants into South Africa, including a spike in drug trafficking. Some three to seven million immigrants enter the country each year, it is maintained. Sadly, some unscrupulous security companies hire these illegal immigrants, which doesn’t help the image of the security industry. Furthermore, corruption within the police forms, including charges of brutality and criminal activity, is not helping to improve the crime statistics in South Africa. In fact, there are over 1 000 criminal investigations pending involving the SAPS. Obviously, with a weakened and unstable police force, the private security sector has filled in the gap.

Antagonistic government bodies and unions
It is often perceived that government bodies and unions are seen as being antagonistic towards the security industry, often citing poor working conditions and allegations of exploitation. Whether these perceptions hold any truth is open to debate, but what is clear is that relationships with the unions remains fractious. This is compounded by the fact that there are some 15 unions with which stakeholders must negotiate, which complicates negotiations and communications.

The fact remains that with security companies making little profit and working against tight margins, the wage increase demands made by unions are often unrealistic. These often lead to job losses – or to companies turning increasingly towards technology.

Challenges to the broader industry
There is a worrying trend in the industry. Since 2006, there has been a 53% growth in security companies, yet only a 26,8% growth in manpower. This could mean a greater shift towards companies using technology but it could also indicate that there are more fly-by-night operators out there, using unaccredited personnel. Non-compliant companies have lower operating costs and more often than not flout the industry rules. Needless to say, this is diminishing the reputation of the industry overall. In terms of governing bodies and structures, South Africa has PSIRA as a regulating body, but it isn’t always able to fulfil its mandate. Self-governing bodies, like the SIA, SASA and SAIS, are self-regulating bodies and try to get the industry to present a united front. Other challenges in the industry currently include a low barrier to entry, weak and ineffective regulation and enforcement, as well as ambiguous regulatory aspects. Sometimes, it would seem, that only the major players in the industry are targeted for inspections.

Problems faced by industry players
One of the major problems faced by security companies is that it often takes months to register a new security officer, long waiting periods for criminal checks for these individuals, not to mention inconsistent recruitment and selection standards.
Poor standards in training agencies are also a cause for concern. Too often these bodies push through security officers that have not received proper training or end up issuing fake certificates, sacrificing skills and education for the sake of profit.

wh-africa-8Clients need to be educated
Clients often don’t have enough liability cover and make unreasonable demands on their security providers to provide complete solutions. Clients must not only specify numbers and grades, but must also state the outcomes they expect from the security firm. Often clients don’t spend enough money and resources on training and skills development; there is also not enough education towards senior management. Most critically, some clients look at security as a commodity and fail to see the broader benefits security measures could bring to their business.

Suggestions going forward
As an industry, all the security players need to support and empower PSIRA to become more aggressive in its mandate; this demands the cooperation of all stakeholders. It may be beneficial to the industry as a whole to streamline industry policies and improve self-regulations. All the rules and regulations must be revisited periodically, to ensure that the potential service providers qualify. As always, clients need to be educated.

It would not hurt to look at establishing a bargaining council, as well as trying to improve relationships with the unions. If the industry does not stand together, there will be more fly-by-nights creeping into the industry. PSIRA, as a body, will become toothless and ineffective. Corruption will also, no doubt, increase and clients will be given substandard service delivery. In short, there will be a degraded image of the industry. The time has come for the industry to act together to make a difference in the industry.

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