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Security industry in call to Zuma

April 7, 2014

 

SECURITY Industry Alliance CEO Steve Conradie on Monday called on President Jacob Zuma to return the Private Security Industry Regulation Amendment Bill to Parliament, echoing a similar call by the South African Chamber of Commerce and Industry (Sacci) last week.

The industry says the 51% ownership requirement for security equipment suppliers — most of them multinationals — and security firms to be 51% locally owned was introduced "without prior notice or discussion".

Mr Conradie said the security industry was South Africa’s biggest creator of entry-level jobs. There are about 450,000 active, registered security guards in South Africa. Mr Conradie said jobs would be lost because of the onerous requirements of the proposed new law.

"It will definitely scare away investment to this country."

Former president of the Security Association SA Jenny Reid, who runs security employee screening and verification business iFacts, said the bill was "frightening. I believe it is a threat to any business if legislation can just be pushed through. I have problem with the ethics of it.

"It is expensive to run a security company legally. Many fly-by-nights do it illegally and you won’t control them by doing this. There are thousands of security companies that are illegal," she said.

Sacci‚ the largest business chamber in South Africa with a membership base of close to 20‚000 businesses‚ said the broad definition of a security company in the proposed bill could even force multinational electronic companies such as Apple‚ Sony‚ Samsung and Panasonic to sell 51% of their ownership to domestic shareholders.

Mr Conradie explained that the definition of private security service provider has been extended, and a wide scope of companies importing and supplying equipment to the industry in South Africa, such as Sony or Bosch, are included. "It is a totally incorrect message for foreign investment when a government is busy with an industrial plan to supply jobs.

"We appreciate the objective of the bill to improve regulation of the security industry‚ but believe the 51% domestic ownership requirement and wide scope of application will significantly undermine investor confidence‚" said Sacci CEO Neren Rau.

Sacci says less than 10% of South Africa’s typical security firms are owned by multinationals that provide services across the world‚ but the ownership requirement sets a "dangerous precedent".

A Cabinet statement last year said tighter regulation was necessary to counter "the threat to national security posed by participation of foreigners".

But the Security Industry Alliance said the concerns over national security had not been substantiated.

With Bloomberg

 
 

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