Bill targets majority stake in security firms

Bill targets majority stake in security firms

2014-02-25 22:39

Cape Town - A controversial private security industry regulation amendment bill was passed in parliament on Tuesday afternoon.

The bill aims to limit foreign ownership in security companies. Foreign owned private security companies would be compelled to sell 51% of their shares to South Africans.

Police Minister Nathi Mthethwa told MPs this was necessary in the interests of state security.

"It is necessary because the line between private security companies and private military companies is increasingly becoming blurred," said Mthethwa.

"Equally, private security companies are increasingly used in the field of intelligence."

South Africa was not alone in wanting to curb foreign ownership, as other countries had done the same, with some states even outlawing it.

'No job cuts'

Mthethwa dismissed arguments that the bill would lead to job losses in the industry.

"The provision of security service depends on supply and demand like any commodity in the market place. Change of ownership will not change demand," he said.

Claims that companies would disinvest were also brushed aside.

"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," Mthethwa told MPs.

The Democratic Alliance did not accept Mthethwa's assurances. The party believed the bill, specifically the expropriation clause, would be challenged in the Constitutional Court.

'Unemployment will soar'

"Jobs will be lost and our country’s unemployment rate will soar," DA MP Dianne Kohler-Barnard said.

"Massive private security companies will be under threat of closure as their majority shareholdings are taken and warehoused by the state, and job losses there mean more pressure on the SAPS (SA Police Service), and even less to deliver to those most under siege, our poorest of the poor."

The Freedom Front Plus opposed the bill on the basis that it would lead to security companies closing shop and jobs being lost in the sector.

The proposed law was, however, pushed through by the ANC majority with 202 votes for the bill, 68 against, and five abstentions.

  • lacrimosewolf - 2014-02-25 23:01

    N. It's because we now have a privatised police force and who wants to miss out on that. Pay tax, pay armed response plus 14% vat. Yay! Nom nom nom we can gobble this up too. Be warned - Your 3-450 a month you pay now could easily soar to R1000 if the govt gets their mitts into it. Of course far easier a problem to solve than providing a functional police force.

  • Louise Cook - 2014-02-26 00:08

    Private security has only flourished due to police lack of performance.But since it's there and not likely to go away, something must be done to keep some of these overseas security companies in check: for instance, there is a foreign security company that operates exclusively to protect Isrealies (Jews) is SA. Who knows what type of intelligence a foreign company like that uses while we don't need Isreal's issues here. So something must be done to prevent foreign security companies to use SA as a smokescreen for their hidden agendas.

  • Sentle Innocent - 2014-02-26 00:32

    If it is possible with security companies i guess we shud also try it in the mining industry...

  • Michael Farrell - 2014-02-26 02:04

    Each of foreign owned firms, should go on record tomorrow that IF and or WHEN they are forced to sell half their interest in their own company to some ANC connect suitor that they will close their doors in South Africa never to return. Would it simply not be better for a South African to start a new company and compete in the marketplace? It's a total red herring to suggest this has anything to do with National Security. It's a contrivance to for a form of nationalization onto these businesses. And certainly smacks of another Goldfields where they will be given a list of ANC 'approved' purchasers that they MUST do business with. This will not be any form of willing buyer willing seller.

  • Paul Ryan - 2014-02-26 03:07

    Just another example of the state trying to take control over everything. The idea that you can just forcibly take ownership of foreign owned assets and that future foreign investors, in any industry, wont take any notice, is laughable. The theme for the next 5 years under the ANC is "expropriation", mark my words. No industry and no company is safe. The ANC last year began terminating long standing Bilateral Investment Treaties with countries all around the world. Now you see why, this is just the beginning. South Africas hard won international reputation as a country that protects foreign investment from being stolen by the state is crumbling.

  • Altus Kirsten - 2014-02-26 03:25

    God help South Africa.

  • Altus Kirsten - 2014-02-26 03:32

    Zim tried it and failed. SA will regret this stupid decision. I find it astonishing how stupid government really are for thinking this will have no affect. Good luck in getting foreign investment for anything goin forward.

  • Michel Konings - 2014-02-26 05:38

    Public security is the responsibility of the state not a private organization foreign or non foreign.

  • Wayne Anthony Faulds - 2014-02-26 05:48

    Is this not just a tad Zimbo-esque? "In the interests of state security" he says. Since when have foreign owned security firms represented a threat to state security? Now I wonder what Nathi would say if a South African security firm, operating in a foreign country, owned by, say, a chap named Zuma, or something similar, was faced with a similar predicament in that country?

  • Janeil Davis - 2014-02-26 05:58

    Off the mark but still relevant....If the ANC has 2/3 majority of seats in Parliament, how can the voting which takes place in Parliament for all these bills to be passed be fair, if the other parties together have only 1/3 of the seats in Parliament?

  • Nathi Cunukele - 2014-02-26 06:41

    I do not care if its foreign or local ownership as long as the owners treat and pay their security officers decent salaries. Their salaries are laughable and they are not appreciated in South Africa.

  • Christo Boshoff - 2014-02-26 06:52

    cANCer at work! Free to do business in SA means nothing!

  • BLUESILVER2012 - 2014-02-26 06:57

    You mean, ANC CADRE 51% ownership....

  • Ludi Van Der Nest - 2014-02-26 06:57


  • Edward Radingoana - 2014-02-26 07:17

    I am not used to support ANC in these bills because of their majority abuse in parliament but with this I am 100% behind them. The foreign owners do not comply with the country legislations and when they realized that they are investigated they pack and go. So what is the use of fearing possible job losses because they are just time bombs in waiting.

      Gerald Craig Steyn - 2014-02-26 08:52

      Please provide a substantiated example of this.

  • Bryan McCloy - 2014-02-26 07:45

    Echo's of Zim........

  • Brian Simpson - 2014-02-26 08:15

    Looks like the ANC gravy train has run dry so they are looking for other options!

  • Blatherwick Ashburner - 2014-02-26 09:49

    Viva! Viva Zimbabwe! You show us the way! To hell.....and beyond!

  • shaun.terbruggen - 2014-02-26 12:02

    Link between private security companies and private armies? Sounds to me like the cANCer bigwigs are becoming increasingly paranoid about being toppled! Now why would that be? Not unlike the controls on ownership of firearms by private individuals (including wanting to know exactly where in your house the safe in which your gun is kept is located).

  • Ludi Van Der Nest - 2014-02-26 18:27

    Time to get the FUc& out of here!!!

  • Zahir - 2014-02-26 20:16

    If it works destroy it the anc slogan

  • Robinne Southwell - 2014-02-26 22:26

    Just provide a decent police force and we wont need private security that costs a fortune each month, everyone will be happy. However the government sticking their thieving fingers in this pot implies there will be no improvement in the police. What will be next? Private Hospitals, Private Ambulances, Private Schools? thinking about it the only things that work are private!!

  • Neithern Van der Maseney - 2014-02-27 02:31

    The idea was not a good one, will we end up with any investors in South Africa in the next 10 years? #i doubt. Some of us are young people and we want to start our own businesses and with what is happening to SA i doubt if we'll ever get a chance to sit with investors and convince them to partnership. #Masenye NT

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