The Private Security Industry Regulatory Authority (PSIRA) presented its cost estimates for the implementation of the Private Security Industry Regulation Amendment Bill. The four areas that required cost estimates were:
▪ the renewal of the registration process to register and reclassify security officers and companies,
▪ capacity building to expand the number of law enforcement units and prosecutors available,
▪ expanding the national footprint to ensure each province had service delivery points, and
▪ capital expenditure to supply units with equipment and vehicles.
Each of these areas was detailed with exact costs and number of new personnel needed. Expenditure was broken down by economic classification into compensation for employees, lease payments and goods and services and project expenditure for the renewal of registrations. The time periods for the renewal of registration processes were given with separate processes for security officers and security businesses. The cost implementation of the Enterprise Resource Planning (ERP) process was detailed with it involving many different costs including application, system development and customisation, testing, implementation and training, project management, hardware and business process alignment costs. The Committee did not accept the cost estimates for the implementation of the Bill and indicated that PSIRA would have to present it again after meeting with different departments. Members questioned why the cost of implementation was so high, particularly the ERP system and office furniture and questioned if the processes were the most cost effective. Members asked why PSIRA had not consulted other governmental departments which could have helped them with the process. Members questioned the capacity of PSIRA to be able to implement the Bill.
PSIRA presented its responses to comments on the Private Security Industry Regulation Amendment Bill. It attempted to respond to each submission and the issues it raised. Members felt that its responses seemed dismissive, lacked respect and showed that it was not ready to implement the Bill. One Member said: “The Bill is an embarrassment, it contradicts itself and it contradicts the Constitution and flouts international treaties. Why is the Committee continuing with this farce?” The Committee unanimously agreed that PSIRA would have to start from the beginning and redraft the Bill with the help of government departments.
Acting Chairperson’s Opening Remarks
The Acting Chairperson asked the Civilian Secretary of Police, Ms Jenni Irish-Qhobosheane, if she and her technical team had set up meetings in accordance with the requests from the previous meeting and when they would be taking place.
Ms Irish-Qhobosheane said that the team was meeting with Home Affairs today at lunchtime when this Committee broke, the meeting with the Department of Trade and Industry would be on Friday and the meeting with the Treasury was on Saturday morning.
The Acting Chairperson said that after these meetings, the Committee expected the technical team to sit and start making amendments if the meetings required amendments to be made and to have the outcomes in writing ready for the Committee next week and the suggested proposals around the three different areas.
PSIRA Cost Implementation Estimations for Private Security Industry Regulation Amendment Bill
Mr Nick Ligege, PSIRA Chief Financial Officer, presented its estimations for the cost implementation of the Bill. The cost of implementation took into account the renewal of registrations, in order to give effect to Clause 9 and Clause 11 of the Bill which dealt with the limitation of foreign ownership and control; capacity building in the law enforcement and compliance functions; expanding the national footprint by establishing provincial offices is the North-West, Free State and the Northern Cape; the design and implementation of an Enterprise Resource Planning (ERP) software and capital expenditure estimates with respect to the procurement of business tools such as vehicles. After its implementation, a registration renewal process would be required of both security officers and security service providers. Section 2 of the principal Act said the Minister may prescribe procedures and principles for periodic applications for renewal of registrations by registered security service providers, and conditions and requirements for the granting of such applications. PSIRA would use this to call for renewals and get information relating to shareholdings and whether people were citizens to have the necessary data to enforce the clauses. Capacity building, expanding the national footprint and capital expenditure would flow from the implementation of clauses 9 and 11.
He explained that PSIRA worked with a baseline expenditure figure, implementation expenditure figure and a total revenue figure that included annual fees from security officers and companies. The total expenditure was R173 million in the first year of implementation rising to R179 million in the second year, R188 million in the third and R205 million in the final year. The four programmes that contributed towards expenditure were law enforcement, finance and administration, communications and training and corporate services. Revenue figures included annual fees from security officers and companies as well as training income, registration fees and other sundry income. There was also an annual surplus which had been budgeted for to ensure positive balances on an actual basis. These were R4.9million in the first year, R1.8 million in the second and R1.5 in the third. It always kept a two-to-one ratio of what it owed in terms of current liabilities.
The Acting Chairperson noted that there were differences in the amounts of state funding required from the expenditure and asked why it was different.
Mr Ligege said that there were small changes in the figures from PSIRA’s previous presentation as an infrastructure assessment had meant some expenditure figures had increased. There was an omission in the previous presentation not a mistake. Expenditure was also broken down by economic classification into compensation to employees, lease payments and goods and services and project expenditure for the renewal of registrations. The renewal of registrations had been taken out so that the Committee could see its cost, which was R50.2 million. Businesses would contribute the majority of revenue, with other revenue coming from security officers. The consolidated budget was compared to the baseline expenditure with the expenditure from the Bill (see document for full details).
Mr Ligege said that the implementation process was envisaged to take 24 months from when the Bill would be first put into operation. As of October 2012, PSIRA had 2.1 million registered security officers and 27 450 registered security businesses. Therefore due to the large number of renewals that would need to be undertaken, the period would be 24 months. Two approaches were looked at for the renewal of registration process. Firstly, registration would lapse on the month of birth of a security officer or secondly, it would lapse on the month which the security officer registered in the past. PSIRA wanted to spread out the registrations and avoid large influxes in particular months. The benefit of this renewal process was that it gave PSIRA an opportunity to classify security service providers and value the levies in terms of these different classifications. It would also improve the operational efficiencies with respect to monitoring and controlling the criminality of the industry, for instance biometric systems could be used for the fingerprint checking process.
He said that assuming that the Bill would be implemented in 2013, PSIRA would begin registration renewal of security officers in April 2014, with expected completion in September 2015. This period was longer than twelve months to provide for a grace period. PSIRA would then have an updated database of security officers. Business registration renewals would begin in April 2015 with the process set to be completed in March 2016. Although the database listed 27 450 businesses, currently there were 9 717 that said to PSIRA that they were actively operating. The active businesses were the ones that PSIRA dealt with on a monthly basis. The renewal process would allow it to pick up more businesses. On the assumption that fifty percent of security officers and business would respond, the estimated number of renewals of security officers was 1 056 318 and the number of businesses was 13 725. Currently, approximately 450 000 security officers were actively operating in the industry. The estimated costs for this project (which included registration personnel, software, additional inspectors and vehicles) were approximately R50 million in the first year, and R24.2 million in the second. The breakdown of this cost included issuing of cards, certificates, the criminal record verification process, travel and accommodation.
Mr Ligege said that capacity building was important because of a current lack of capacity. The ratio of inspectors to security officers was very high with approximately one inspector to 10 000 security officers, not including unregistered officers. Consequentially, very few businesses were able to be inspected annually, which increased the risk of non-compliance, exploitation of labour and criminality in the industry. The Bill proposed adding 126 inspectors over the three year period with 47 inspectors to be added in 2014/15, 41 in 2015/16 and 38 in 2016/17. The increase in inspectors would increase the number of non-compliance cases picked up, which would lead to investigative inquiries and therefore 17 additional prosecutors would also be added. The cost of compensation per programme was explained with these additional staff being included per year in addition to new support staff for new offices. The average cost was approximately R226 000 in the first year rising to R273 000 and R307 000 over the outer years.
He said that in the finance and administration department, 27 people would have to be added. Some of these people were in IT, some in finance and some in revenue collection. The average cost was approximately R220 000 in the first year rising to R238 000 and R257 000 in the following years. As the list was big, PSIRA would provide the Committee with a separate list detailing exactly what positions these 27 people would fill and how much they would earn.
The communications and training department required additional staff to drive the communication of the registration renewal process. The average cost was approximately R297 000 rising to R336 000. Corporate services involved human resources personnel, which required an increase in line with the increase of other staff numbers. There were four new people required in this area.
The expansion of the national footprint involved additional offices being created in the North-West, Free State and the Northern Cape, where there were currently no offices. Offices in Limpopo and Mpumalanga needed to be capacitated, as they did not currently offer fully fledged services and did not have the capacity to effectively perform these required services. Currently, these two offices only offered registration and had no inspectors and could not deal with complaints. This process would begin in September 2013 and be ready by March 2014. The costs of renting per province were given, using an estimate of R80 square metre. Offices ranged between 1500 and 2000 square metres. Rental costs were R6.5 million in the first year rising to R9.4 million in the last year.
Mr Ligege said that the majority of capital expenditure came from purchasing motor vehicles and the design and implementation of the ERP software. Motor vehicles would cost approximately R6.2 million in 2013/14 which meant buying 29 vehicles. This would result in having one vehicle for two inspectors. Additional vehicles would be bought in the following years according to the number of inspectors in operation. Additional expenses came from IT infrastructure, computer hardware, office equipment and office furniture which itself would cost approximately R3.5 million. The total capital expenditure was approximately R21,8 million in the first year, R21.3 million in the second year and R11 million in the third. The numbers may look large, but needed to be, given the large headcount.
He explained the costs of the ERP software development and implementation in detail. PSIRA was currently doing business process reengineering to have a good architecture of how processes must flow from registration to finance and other areas. This process would form how the ERP would look. PSIRA had looked at different companies and systems before taking the averages of the proposed costs. The projected cost was approximately R7 million. There were many different costs involved including application, system development and customisation, testing, implementation and training, project management, hardware and business process alignment costs. The license costs were not included. When the business process reengineering was complete, it would know the exact costs.
Ms M Molebatsi (ANC) asked why PSIRA needed a surplus and why there was huge fluctuation between years.
Mr Ligege said that as public entity, PSIRA had prepared its budget on an accrual basis of accounting. The surplus was there to include depreciation and provision for bad debts. It was not a cash surplus. It worked on a ratio of having R2 for every R1 owed. It had to ensure a surplus was available for expenses that were not on the budget.
The Acting Chairperson asked why such expenses were not on the budget.
Mr Ligege said that PSIRA generated income that was not guaranteed. Such provision allowed a surplus as they budgeted for possible bad debt and was needed to monitor expenses and cash flow.
Ms Molebasti asked how PSIRA hoped to control criminality.
Mr Manabela Chauke, CEO of PSIRA, said that when registration took place, fingerprints were supplied and verified with the criminal record centre. The renewal of registration process would assist with picking up corruption and criminals.
Mr Ligege said that the renewal process included enhancing encryption through this process. The cost would be R15 per card and R48.45 for each verification process for potential criminals.
Ms Molebatsi said that PSIRA had said that some companies only said that they were active and asked whether PSIRA thought they were active.
Ms D Sibisi (ANC) asked how PSIRA kept a record of retired or deceased officers if the company was not registered.
Mr Chauke said that the current database showed if officers and businesses were registered and operating. Their status would be changed through processes including checks and inspections.
Ms Molebatsi asked PSIRA to explain the rental costs and the huge costs for office furniture.
Mr Ligege said the rental costs were paid per province and the furniture costs included customer units, front offices and cashiers.
Ms Molebatsi asked why the buying of software costs was so high at R7 million. She asked if PSIRA had other software that it used currently and if it needed new software.
Mr Chauke said that the ERP referred to the database of security officers. PSIRA currently had one but it had many shortcomings as it was built without the financial basing in terms of officers being billed. The two systems were completely separate and the old one did not support case management and one had to manually link the law enforcement department and the legal services department. Business processes were also not linked to the current system and PSIRA had looked into whether it could be enhanced and customised. However, PSIRA was advised that costs to do so would be higher than a new ERP as it was not able to integrate many new features. The new system would cater for classifications, foreign-owned companies and other features that were needed.
Mr G Lekgetho (ANC) asked how PSIRA planned to overcome the large ratio of inspectors to officers and businesses in the long run if the security industry was growing so rapidly.
Mr Lekgetho asked if the 29 new vehicles were going to be subsidised to each employee or if a pool system would be used as he felt that the pool system could be abused.
Mr Ligege said that PSIRA would use a pool system for the vehicles.
Mr M George (COPE) asked how PSIRA expected the Bill to pass if the business process reengineering was incomplete and why it did not address these issues before the Bill was proposed. The report mentioned that PSIRA was not ready to implement the Bill because of a lack of capacity.
Mr Ligege said that PSIRA had started the process in this financial year and had planned in advance to be ready for the ERP.
Mr George asked how it would affect PSIRA’s daily operations if the registration renewal process took 24 months. He asked why PSIRA was questioning the Committee. PSIRA was showing disrespect to the Committee if it showed disrespect to the Acting Chairperson.
Ms D Kohler-Barnard (DA) said that the private security industry said that PSIRA was dysfunctional. She was shocked that it still could not answer who had helped it to draft the Bill and asked how PSIRA would have the capacity to operate under the new legislation if it did not have for the current legislation.
Mr V Ndlovu (IFP) asked how the Committee could pass the Bill if there was not a proper custodian to take it through at the end and implement it.
The Acting Chairperson said that PSIRA’s meeting with the Treasury would help clear matters up. PSIRA lacked understanding of the budget process, as it said needed to ask for State funding for the 2013/14 year of R28 million, but that budget process had passed. Departments had already received their budgets and PSIRA had missed this deadline. The motivation from PSIRA that if it did not get the money, it would not be able to implement sections 9 and 11 was wrong as Treasury would not respond to such a threat.
The Acting Chairperson asked why the Levies Act had not been implemented before as it would have covered many of the issues raised.
Mr Chauke said that he did not have an answer. It was not operational when the current board arrived and PSIRA had since then attempted to put it into operation itself.
Mr George asked if it was because of the manner of the law in the Act, that it was not operational.
Mr Chauke said that this was not a legal issue and that there were financial conflicts and category and classification issues.
The Acting Chairperson asked if the legal challenge on levies being charged was the reason that the Levies Act had not yet been implemented.
Mr Chauke said that this was not reason, as the charge was because of a lack of consultation. The previous PSIRA Act allowed it to review the fees, so the court charges did not relate to the Levies Act.
The Acting Chairperson said that if it was not a legal issue, it should have been sorted out by PSIRA.
Mr Ligege said that the implementation of the Bill would help to make it operational.
The Acting Chairperson asked what type of vehicles PSIRA was buying, if they currently had no vehicles and if it was aware that there was a transversal contract for government to purchase vehicles as the given amounts were too high.
Mr Ligege said that PSIRA was aware of transversal agreements, but not on vehicles and would look into it. It looked at standard 1.6 engine vehicles that were economical. It did not have a current vehicle fleet as inspectors used their own vehicles and claimed money back per kilometre at a rate that was lower than the state rate on 1.6 engine vehicles.
The Acting Chairperson asked what the current rate for security officers and businesses was per year.
Mr Ligege said that it was R154.20 for security officers to register and R84 per year, and businesses had to pay R4 200 to register and R4 250 per year, in addition to R7 per security officer.
The Acting Chairperson asked how PSIRA determined the R74 million process to be the most cost-effective way to register companies and if they had considered other processes that would involve other departments such as SAPS or Home Affairs.
Mr Ligege said that PSIRA had participated with the Department of Science and Technology and looked at biometrics. It was aware of other government entities and had approached Home Affairs to look into registration at post offices to ensure cost-effectiveness. This process also involved costs and it would continue to look at which processes would be most cost effective.
The Chairperson said that this had not been mentioned in the report and that cost-effectiveness plans should have been done before the report was done.
The Acting Chairperson asked how many times a year PSIRA currently inspected businesses and if it currently had any computer equipment.
Mr Ligege said that the laptop and printer costs were only those budgeted for new people.
The Acting Chairperson asked where the estimated savings were after the project had been concluded after the consolidated budgets were given for each year.
The Acting Chairperson asked if there was a tender process regarding the ERP software and if the State Information Technology Agency (SITA) was involved. She said that there was no way that Treasury would fund the ERP with such high costs involved and the Committee could not put pressure on it to fund it.
Mr Chauke said that the estimates were based on quotes and that a tendering process had not yet begun. SITA would be involved at a later stage when implementation would begin.
The Acting Chairperson said that many Members of the Committee were involved in the passing of the Principal Act. The financial calculations were done properly to ensure PSIRA would be funded properly. There was also a strategy to have a reserve fund to rely on and the fund was R3 million a few years back. The presentation said it was now R2 million but not available in cash.
The Acting Chairperson asked why PSIRA was not focusing on its problem companies instead of inspecting ones that complied.
The Acting Chairperson said that PSIRA wanted one vehicle for every two inspectors, but that SAPS detectives were still not on this ratio despite asking for it years ago. There was not a bottomless pit of money available.
The Acting Chairperson noted 27 people were to be appointed to the finance section but the Committee needed to see exactly what positions they were appointing to. She asked about the structure for PSIRA, the levels, numbers and costs per unit.
Mr Ligege said that PSIRA would provide the details of the financial structure to the Committee.
The Acting Chairperson asked the Secretariat of Police how much it paid for furniture for its 40 new offices.
Ms Irish-Qhobosheane said that it paid approximately R230 000 for 40 new offices.
The Acting Chairperson said that the report included office furniture costs of approximately R3.5 million and asked why it was so high and what the priority was on expenditure. She asked how many offices would be covered with this amount.
Mr Ligege said that the furniture was for 121 people and not only for offices, but also for customer units, front offices and cashiers. An expensive portion came from bulk filing units that filled whole rooms.
The Acting Chairperson said that it was ridiculous that each person had an average of R28 000 spent on them on furniture.
The Acting Chairperson asked why PSIRA wanted mobile registration points and why it did not ask Home Affairs who already had such facilities.
She asked who the consultants were for the ERP that cost R1 500 per hour, if PSIRA did not have an IT department, and if it had consulted the Department of Public Service and Administration (DPSA).
Mr Ligege said that there had been no consultations yet as the figures were quotes as no one had been appointed yet. The DPSA had not been consulted.
The Acting Chairperson said that the DPSA needed to sign off on structures and this could take up to a year.
Mr Chauke said that they were in the process of speaking with the DPSA.
Mr Ndlovu said that the DPSA was there to help them and should have been consulted at the beginning of the process, and that PSIRA was working backwards
The Acting Chairperson asked if there any public education plans budgeted to let the industry know how they should register.
Mr Ligege said that there was a communication drive planned that included print media and radio, and was included in the goods and services section of the budget.
The Chairperson said that the Committee was not accepting the cost estimates for implementation of the Bill and that another round of presentations would occur after the technical team had met with Treasury, as well as consultations with other departments.
PSIRA Response to Comments on the Private Security Industry Regulation Amendment Bill
Adv Howard Thwane, PSIRA Legal Services Senior Manager, presented PSIRA’s response to public comments on the Bill.
First of all, he provided 17 examples of listed companies that had headquarters in South Africa and operated or had links outside South Africa followed by 9 examples of companies with headquarters outside South Africa but with links in South Africa.
The SSG Operation Risk Services submission commented that there was distrust between PSIRA and the private security industry. PSIRA replied that, historically, members of the industry were part of the Board which proved ineffective due to conflicts of interest and members of the Council should be independent from the industry with no financial interest in those companies. The submission said that PSIRA was dysfunctional and did not effectively communicate with the industry. PSIRA said this statement was false and unsubstantiated, referring to stakeholder agreements, lists of entities consulted in the Memorandum of the Bill and notices on its website. The submission said that the Bill constituted a bar to entry into the industry. PSIRA denies this and said the Bill aimed at regulating foreign ownership in the security interest of South Africa. The submission said that the use of regulations should be minimised. PSIRA said that the industry had to be regulated and that the principle of legality required that there was a statute to regulate. The submission said that security officers’ powers should be expanded to arrest, search and seizure. PSIRA said that public and private policing should be distinguished. The submission said that the ‘security officer’ definition may have resulted in incorporating car guards. PSIRA said that car guards have always been regulated and that the definition included car guarding. The submission said that the ‘security service’ definition incorporated transporters of security equipment. PSIRA said that this would be revised and the Bill sought to include the protection or safeguarding of cash or other valuables during transportation.
The submission continued that there needed to be specific content on the type of crime prevention partnerships and the Bill did not define the object of the partnership. PSIRA said that the provision aimed at supporting the Civilian Secretariat for Police and SAPS and the role of PSIRA was to promote partnerships, but the clause would be revised in accordance with the submissions to strengthen it. The submission said the Minister had unfettered powers to prescribe which was in conflict with section 23 of the Constitution. PSIRA said that the Minister’s power was not unfettered as he or she was guided by clause 11(g) of the Bill and the guidelines were that good cause must be shown, and grounds must not be in conflict with the purpose of the Act and the objects of the Authority. The submission said that the limitation of foreign ownership and control was unjustifiable. PSIRA said that it was justifiable in accordance with the security interests of South Africa, as security interests were paramount to incoming foreign investments. Foreign companies did not have vested interests in security as they were motivated by maximising profits and any investment that could make South Africa vulnerable must be guarded against in a proactive manner. However, limitations were tempered by the right to apply for exemptions to the Minister and this was not the first time a state had sought to regulate foreign ownership with countries such as the USA, Botswana and Nigeria having done so.
The Locksmiths Association of South Africa submission said that the definition of a ‘locksmith’ was incorrect as it excluded key cutters. PSIRA said that the definition of a locksmith did not include key cutters, however key cutting would be included as a security service and would require registration.
The African Policing Civilian Oversight Forum submission said that the Bill had an oversight deficit in relation to the conduct of private security officers. PSIRA said that oversight was provided for in the Code of Conduct and that private security officers did not have any powers over and above what ordinary citizens had. The submission said that PSIRA could not criminally prosecute cases. PSIRA said that the mandate to institute criminal proceedings rested with the National Prosecuting Authority. The submission said that PSIRA lacked the capacity in conducting inspections and investigations. PSIRA said that this was incorrect as its Annual Report showed that they did have the capacity. The submission said that regulating security services outside South Africa confused the functions between PSIRA and SAPS. PSIRA said that Section 39 of the Principal Act allowed for the extra-territorial application of the Act.
The Salus Protection Services submission also said that regulating security services outside South Africa confused the functions between PSIRA and SAPS. PSIRA had dealt with this issue.
The South African Intruder Detection Services Association submission said that the object of the crime prevention partnership was not defined. PSIRA had addressed this issue. The submission asked who funded the private security involved in crime prevention partnerships. PSIRA said that it envisaged no funding being involved and that the Authority’s mandate was to promote, but that the recommendation would be considered to better the application of the cause. The submission said that the Act was not clear if the partnerships were compulsory or voluntary. PSIRA said that the aim was to promote and not impose obligations. It created a basis upon which PSIRA could initiate or facilitate necessary programs. The submission said that the PSIRA director should have delegated his or her power and duties to a suitable and experienced person. PSIRA said that the aim was to provide for delegations of powers subject to approval by the Council. The submission said that the proposed amendment of section 25(5)(b) was contrary to the Constitution and the Promotion of Administrative Justice Act. PSIRA said that administrative justice was catered for in section 5(3) of the Principal Act.
The Control Risk SA submission said that Clause 9 violated the property rights of companies and was in violation with Section 25 of the Constitution. PSIRA said that the use of the word ‘expropriation’ was misplaced and misleading and that the right to property was subject to the Constitution’s limitation clause and it was in line with a legitimate government purpose. The submission said that Clause 9 read together with Clause 11 in effect required that 100% ownership must be controlled by South African citizens. PSIRA said that this was inaccurate as there was a provision for exemption by the Minister in each of the referred clauses. The submission said that the discretion afforded to the Minister was too vague. PSIRA said that this was incorrect as Clause 11(g) of the Bill provided a clear guideline on what exemptions may be granted. The submission said that Clause 9 would violate the SA-UK BIT (bilateral investment treaty). PSIRA said that the aim of the Bill was not to violate any international treaty and if there was any contradiction with treaties, the exemption process would be used. The submission said that the clause would have implications for a range of international companies especially in the electronic and IT industry. PSIRA said that the definition of a ‘security service’ did not include the manufacturing of security equipment except for those classified under section 1 of the Interception and Monitoring Prohibition Act, 1992 and the Regulation of Interception of Communication and Provision of Communication-related Information Act, 2002. It said that the Bill would not affect the manufacturing of Playstations. The submission said that there would be a loss of skills, capacity and would result in technical support gaps. PSIRA said that this was unfounded as South Africans were exporting security services beyond the country and the exemption could allow up to 100% ownership. The submission said that there was no transitional provision in Clause 11. PSIRA said that legal drafters were attending to this in order to allow for a transitional provision to be included under Clause 11.
The Security Industry Alliance submission said that there was no engagement with the industry during the drafting of the Bill. PSIRA said that there was a list of industry associations consulted in the Memorandum of the Bill. The submission said that the definition of ‘security service’ extended to distributors and transportation. PSIRA said this would be revised in accordance with the submission. The submission said valuables must be defined so that they did not conflict with the legislation of the South African Reserve Bank (SARB). PSIRA said that the provision was not intended to be in violation with the SARB and the context within which it was phrased was intended to only cover the protection and safeguarding of such valuables. The submission said that there was no legal basis for precluding a person that is a permanent resident from participating in employment opportunities. PSIRA said that South African citizens and permanent residents did not have the same rights and privileges and Section 22 of the Constitution addressed the question of freedom of trade, occupation and profession. The submission said that Clause 12 may result in possible arbitrary suspensions related to payment of levies. This issue had already been addressed.
The American Chamber of Commerce submission said that all sectors were included in the companies that should comply with the 51% local ownership requirement including manufacturers of electronic equipment. PSIRA said that the Bill did not intend to include all sectors and this had already been addressed. The submission said that the vagueness of the Bill lent itself to different interpretations and the exemptions would have no detail on who would qualify or not. PSIRA said that the provision was clear and had been addressed. The submission said that there was no clarity regarding existing investments. PSIRA said that transitional provisions would be inserted to give clarity. The submission said that it was not clear who would benefit if ownership was sold pursuant to the Bill. PSIRA said that the intention was not to benefit any particular individual and the security interest of South Africa was paramount. The submission said that foreign sources of electronics were cut off by the Bill. PSIRA said this comment had been addressed. The submission said that it was not clear on ownership requirements for companies dealing with IT. PSIRA said that the comment had been addressed and the Bill provided what a ‘security service’ was and not all companies dealing with IT would be covered. The submission said that the Bill might contravene the provision of WTO General Agreement on Trade in Services (GATS). PSIRA said that this provision had been addressed but that GATS provided that member states could take any action it considered necessary for the protection of its essential security interests. The submission said that the Bill presented negative signals for foreign investors. PSIRA said that the security interests of South Africa were paramount to foreign investment and it provided for exemptions to ownership and control. The submission said that the Bill may result in oligopolies, as the number of companies decreases. PSIRA said that this assertion was misleading and South African laws controlled competition and trading in terms of the Competition Act (No 89 of 1998).
ADT Security Limited said that the definition of ‘security service’ was too broad. PSIRA said this had already been addressed. The submission said that the insertion of paragraph 20(2)(c) was contrary to a commitment that South Africa had to maintain an open environment for investment. PSIRA said that the security interest of South Africa was the primary consideration to any foreign investment. The submission said that there was an absence of percentages to be determined by the Minister. PSIRA said that the Minister may exempt on good cause shown and that the percentage may be between 50% and 100% subject to the Minister’s discretion. The submission said that Clause 9’s five-year period requirement was too restrictive. PSIRA said that the period was reasonable considering the need to address the security interests of South Africa. The submission said that Clause 9’s 51% requirement constituted a forced sale. PSIRA said that South Africa’s security interests dictated that ownership be limited. The submission said the discretion of the Minister to exempt did not support fair treatment of industry participants. PSIRA said that this was inaccurate and application for exemptions would be dealt with on a case-by-case basis. The submission said that the Bill would violate GATS. This had already been addressed. The submission said that the Bill would violate European Union and South African trade agreements. This had already been addressed. The submission said that the Bill would violate the Bilateral Trade Agreement between the UK and South Africa. This comment had already been addressed. The submission said that the discretion given to the Minister should be qualified and all shareholders must be involved in developing guidelines. PSIRA said that it did not propose any amendments relating to the comment but the Committee could look into this suggestion. The submission said that Clause 14 may be impractical given the challenged faced by the Central Firearms Register. PSIRA noted the submission and welcomed any revisions that could strengthen the cause. The submission said that Clause 15 of the Bill did not specify the information required and the prescribed limits. PSIRA said that this was inaccurate as the information was specified in the clause. The submission said that Clause 15 of the Bill added an additional administrative burden to the industry. PSIRA said that the nature of regulation required monitoring.
The Gun Free South Africa submission said that regulations must specify the information to be included in the quarterly reports provided to the Minister. PSIRA said that this recommendation was welcome and will be factored into the regulations giving effect to the Bill. The submission said that the Act and regulations should spell out the exact responsibilities of PSIRA in overseeing the industry. PSIRA said the Act stated clearly what its mandate was in section 4 of the Principal Act. The submission said that a body to oversee PSIRA must be established. PSIRA said that the reporting mechanism was clearly provided in the Principal Act and had a number of oversight bodies. The submission said that the contents of the Annual Report must be spelled out and the additional information in line with recommendations for the quarterly reports. PSIRA welcomed this recommendation and would implement it. The submission said that the Firearms Control Act should be specifically listed in the schedule and Clause 18 must be expanded to include the Firearms Control Act. PSIRA said that this recommendation was welcomed and would be implemented accordingly. The submission said that PSIRA must be responsible to reporting information on the keeping of firearms by private security officers both in the quarterly and annual reports. PSIRA welcomed this recommendation and would implement it. The submission said that the client-level responsibility must be included in the Act. PSIRA said that it was catered for by section 38(g) of the Principal Act and that responsibility of security service providers are catered for by the Code of Conduct. It would welcome any proposals to strengthen the provision. The submission said that the Act and the regulations must be aligned with the Firearms Control Act regulations. PSIRA said that the Act was aligned with the Firearms Control Act. The submission said that training practices and qualifications needed to be aligned and standardised. PSIRA said that they had already been aligned with the National Qualifications Framework (NQF). The submission said that there should be an increase in monitoring of policing functions undertaken by private security companies. PSIRA welcomed the submission and would consider it.
The Safer South Africa Foundation First submission said that Clause 2 on crime prevention partnerships must be amended to ensure that it was not open to a number of interpretations. PSIRA said that this submission was welcomed. The submission said that there should be accreditation of private security organisations whose operatives provided policing type function in public places. PSIRA said that the industry had not matured enough to provide policing type functions and the idea was not to blur the existing lines between public and private policing.
Ms Molebatsi took over as Acting Chairperson in Ms van Wyk’s absence.
Mr George said he was not sure if he should ask questions. The responses indicated that PSIRA did not take the presentations seriously. The answers seemed dismissive and excluded the main arguments from submissions. Its response to the submission that said that there was distrust between PSIRA and the industry deviated away from issues where they said they would take PSIRA to court. PSIRA denied that it was dysfunctional but it was clear that it was. PSIRA had demonstrated beyond reasonable doubt that it was not ready. It still argued about who drafted the Bill. It said it did not care about foreign investment and was only concerned with national security. They should join the Defence Force if that was the case. There was no such thing as a national threat in South Africa from foreign owned companies and PSIRA should have used a better term for this. The answers given by PSIRA’s members did not give the impression that they applied their minds to what they said and seemed very dismissive.
Mr Chauke said that the submission said that there was distrust because of a lack of communication and because it did not have a say on the Council and PSIRA not communicating with them. The answer that PSRIA provided was that previously the industry was represented on a board, before there was a policy change due to the fact people who were sitting on the board had companies in the industry itself. Therefore, it would not have been fair to other players because of conflicts of interest. The Principal Act made provisions to enhance independence.
Ms Kohler-Barnard said that the Committee had agreed unanimously that PSIRA needed to start again and was unsure why it was going through the presentation. Its responses were embarrassing and included petty sarcasm and unprofessionalism towards a highly respected lawyer that represented an international firm. Important points that were brought up were swept aside as irrelevant. It was xenophobic to say that permanent residents were a national threat and it contradicted the Constitution. She asked why they were allowed into the country if they were a national threat. They were brought here because they had skills to give to the country. PSIRA needed to go back to the beginning and get the Bill redrafted. The Bill was an embarrassment, it contradicted itself and she believed it contradicted the Constitution and flouted international treaties. She asked why the Committee was continuing with this farce.
The Acting Chairperson said that the Committee had agreed unanimously that PSIRA had to start again but it also agreed to hear PSIRA’s responses so that it knew exactly what it needed to go and correct.
Mr George said that PSIRA had listed companies that had headquarters in South Africa and companies that had headquarters outside of South Africa. He asked what it was trying to say in terms of ownership, what the differences were between the two and how they would be affected.
Mr Chauke said that the difference between companies was that one list showed companies that operated outside the country and one showed foreign companies with headquarters inside the country. The Act sought to regulate companies operating outside, so it wanted to show examples of which countries would be regulated that had headquarters inside South Africa and operated outside.
Mr George asks if PSIRA would like international countries to not operate in South Africa.
Mr Chauke said the list demonstrated that there were countries operating outside South Africa and foreign companies operating in South Africa and PSIRA did not say it did not want them to operate in South Africa.
Mr George asked how PSIRA would deal with companies that did not operate in South Africa but had headquarters in the country and foreign companies who operated in South Africa.
Ms Molebatsi asked who determined the security interests of SA.
Mr Chauke said that he did not have the answer to who determined security interests.
Ms Sibiya said the Committee had said that it was not satisfied with PSIRA’s response but it was continuing to ask questions and asked if it could adjourn.
The Acting Chairperson asked PSIRA to attend all the issues asked of them before the next meeting.
The meeting was adjourned.
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