Cape Town - Amendments to the Private Security Industry
Regulation Act could result in a flight of foreign capital from the country,
Parliament's police portfolio committee heard on Wednesday.
Martin Hood, a lawyer representing three private security
firms, told MPs they did not believe the amendments would lead to greater
regulation of the industry.
Hood represents SSG Operational Risk Services, Nicholls
Steyn and Associates, and Eventsafe Security Services.
Hood said currently the Private Security Industry Regulatory
Authority (Psira) was not doing its job, and the legislation would do little to
"It (Psira) regards the collection of fees (as) more
important than the regulation of the industry."
He accused Psira of not conducting proper enforcement,
specifically where "fly-by-night operators" were concerned.
"It concentrates on the established operators, because
it is easier to victimise them than to go after the unregistered
Hood said Psira needed greater capacity to regulate the
The Private Security Industry Regulation Amendment Bill, if
passed, will restrict foreign ownership of security companies. Hood said there
was no proof to support the government's view that foreign ownership of these
companies affected national security. He said established foreign owners would
take their money elsewhere.
"It would also send a message to other investors that
foreign capital is not welcome in this county."
Hood proposed that any reference to limiting of foreign
ownership be removed from the bill.
The bill gave Police Minister Nathi Mthethwa too much power
to determine the percentage of foreign ownership in the industry, he said.
"There is a fundamental problem, not only in these
proposals, but in most legislative proposals from government, that is sweeping
powers that are given to ministers or officials without public scrutiny or
On Tuesday Mthethwa threw his weight behind the amendments,
saying the growth of the private security industry in South Africa to the
largest in the world demanded greater regulation.
Mthethwa brushed aside criticism that limitations on foreign
ownership would lead to disinvestment.
"Indications are that when the time comes they (foreign
owners) will sell the relevant shares to comply with the law, not close down as
we are led to believe," he said.