Private Security Industry Regulation Amendment Bill [B27-2012]: South African Police Service & Secretariat briefing

NCOP Security and Justice

05 February 2014
Chairperson: Mr T Mofokeng (ANC, Free State)
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Meeting Summary

The South African Police Service briefed the Committee on the Private Security Industry Regulation Amendment Bill. It was noted that the main reasons behind the Bill included the exponential growth in the private security industry over the past years, the challenges in the Regulatory Authority (PSIRA) itself, which included the need for more effective regulation, funding, the need to address more complex scenarios and changes, the potential for elements of that industry to misuse firearms or threaten national security, and the risks perceived by foreign ownership of security firms. Inadequate resources compromised effective regulation. There was a need to deal with security services served outside the country and address criminality within the industry. Finally a tighter framework would tie in with the government’s strategic plan to build a development state to ensure that all citizens were and felt safe.

The legal drafters took the Members through the Bill, firstly explaining very briefly what each clause sought to do and then reading out, verbatim, each of the amendments. For this purpose a document was presented that contained the current wording of the Act, showing the deletions and additions, as well as highlighting the new sections. Particular emphasis was placed on the fact that the PSIRA would in future have to comply fully with the Public Finance Management Act and attendant financial responsibilities, reporting requirements and accountability to the Minister, and thence to Parliament. There were more stringent requirements of the Council of PSIRA, including its composition, eligibility of members for appointment, the appointment process, the possibility of replacing the council should it not function properly, a new requirement that only citizens could be councillors, and an increase in the period of service for greater effectiveness. The Council would appoint the director and deputy, but in consultation with the Minister. Members of any ad hoc committees would need to be reported upon. A number of matters were required to be in quarterly and annual reports, including lists of firearms in the possession of companies, and those disqualified. There would be closer liaison with the Civilian Secretariat of Police, and with the Firearms Registry. No security business would be able to make use of unregistered persons. One of the clauses of greatest contention in the portfolio committee process was the new section 20, which placed limitation on foreign ownership by requiring that at least 51% ownership of a security company must vest in South African citizens. Whilst there was a window period for correction for existing firms, in the transitional provisions, any new business would have to comply with this immediately. An Exemption Advisory Committee was being established. Businesses would be registered in specific categories and the Minister had the power to determine other categories. There were prohibitions upon registering people with certain criminal offences committed within the past ten years, and the offences and penalties were being strengthened. Duties may be performed by security personnel outside South Africa but PSIRA must report on this to SAPS. It was intended that PSIRA largely be funded by regional fees and levies accruing to it but there was also provision for it to request Parliament for additional money. Members indicated that they would need to ensure consistency of wording, questioned the distinction between security business and service provider. Some Members said that he had concerns that the Minister seemed to have quite extensive powers, and was also not happy with the 51% local ownership requirement. 

Meeting report

Private Security Industry Regulation Amendment Bill: South African Police Service & Secretariat briefing
Maj Gen Philip Jacobs, Legal Services, South African Police Service (SAPS), noted the Private Security Regulatory Industry had grown over the past years. Given the challenges of growth the Private Security Regulatory Industry Authority (PSIRA), government and civil society had received concerns about the effective regulation of the industry, given the challenges of growth in the industry. The PSIRA itself also raised concerns around its funding, at the moment derived from contributions of the industry.

Further problems were cited as the complex security challenges after 2001, the changing nature of the private security industry globally and development that could impact on the security of state, and the potential for elements in the private security sphere to access sensitive information or threaten national security, by having access to firearms and information technology. AS a developmental state, South Africa had to look at national security in the long term, and needed a legislative framework that could address the problems, including a limitation to the extent of foreign ownership. Control by South African citizens of security companies was considered necessary and it would also advance empowerment of South Africans in this industry.

The particular challenges of the industry included lack of adequate resources, which compromised effective regulation. There was insufficient accountability for firearms in the possession of members of the private security industry. There was a need to deal with security services served outside (including the mercenary legislation), and to address criminality within the industry. All of these required a tighter legislative framework. The call for review of the Act was also supported by government’s strategic plan to build a development state to ensure that all citizens were and felt safe. The Bill had been approved for introduction to Parliament in 2012, an in addition to consultations prior to that, the Portfolio Committee on Policy invited public comment on the Bill and initiated further inter-departmental consultations. He said that a summary of the proposals made to the Committee were circulated.

Maj-Gen Philips noted that the objects of the Bill were to strengthen control over the regulation, including security services rendered by South Africa to other countries. He read out the Long Title. (see attached presentation for details). A number of definitions were outlined, which were also being aligned with new developments and there was also insertion new definitions (see slide 7)

He took Members through a description of the clauses, briefly summarising which sections of the present PSIRA Act (the Act) they would amend, and what they contained. He took particular note of the following points:

- a new section 5(2A) would make the Public Finance Management Act (PFMA) apply to the PSIRA Council. The PSIRA thus changed its status. A mediation process was provided when the Council could not agree on contentious issues
- clause 6 set out the requirements that the Minster must consider when appointing members of the Council. This required the requirement of “fit and proper” which would take account of their experience, conscientiousness and integrity to be entrusted with the responsibilities of the office concerned. Collectively, the Council should be persons suited to serve by reason of their qualifications, experience and expertise in the fields of finance, law and governance. The Minister must report on their appointment.
- clause 7 deleted the reference to permanent resident, so that only citizens could be appointed as councillors
- clause 8 would increase the maximum period of service, from three to five years, and allow members to serve part time. The Minister of Police must be told if a member became subject to a disqualification, or were absent from more than three consecutive meetings of the Council.
- clause 9 required the Council to cooperate with the Civilian Secretariat on Police and provided for the appointment and functions of the Council Secretariat.
- clause 10 dealt with accountability of the PSIRA Council, which was accountable to the Minister of Police, and it would have to report quarterly
- The Minister was empowered, under clause 11, to take corrective measures, should there not be a council, or where the Council could not or did not maintain an acceptable standard for the fulfilment of its functions, in terms of the PSIRA Act, the Levies Act or the PFMA. Interim appointments could be made, if necessary, to ensure continuity
- Clause 13 allowed the appointment of ad hoc committees, and provided for their appointment, remuneration and other matters. The Minister must be told about the committees and who they comprised
- Clause14 made it clear that the Council must now appoint the director, and deputy directors, in consultation with the Minister. The Director would be required to perform PFMA functions. Disqualifications of directors and deputy directors were being dealt with under a new section 14A.
- clause 17 dealt with the funding. The PSIRA would be financed from levies or monies accruing under previous Acts or laws, and there was provision for money to be appropriated by Parliament.
- the new section 16A (inserted by clause 18) set requirements around the tabling of an annual report to the Minister, who must table a copy of the Annual Report, financial statements and audit report to Parliament.
- clause 20 now provided that a security business may not use the services of a person not registered in terms of the principal Act to render a security service
- the new section 20(2)(c) dealt with foreign ownership, providing for a limitation of 49% to be imposed on the extent of foreign ownership in the private security businesses, with 51% to be held by South African citizens.  However, item 15 of the transitional provisions would protect existing rights for a transitional period. In future, all new registrants for security service provision would have to comply with this clause.
- clause 21 established an Exemption Advisory Committee
- clause 22 set out new requirements for registration of the security service provider, and this included a valid South African ID document.
- a new section 21A was inserted by clause 23 and this set out the categories under which security businesses may be registered. The Minister could also determine additional categories
- clause 25 amended section 23, significantly by stating that in addition to training, a the person could not be registered if found guilty of a criminal offence specified in the schedule. Security businesses must provide information on relevant categories.
- clause 26 amended the requirements around registration of security businesses
- clause 28 set up appeal committees for which the Minister would make regulations
- clause 30 said that PSIRA must report on any penalties imposed, in its Annual Report
- clause 31 allowed for inspections of private dwellings, with a warrant issued by the competent court.
- the maximum terms of imprisonment for contravention of regulations was increased from 24 months to five years
- clause 33 amended section 36 of the Act, and PSIRA was required to inform the Registrar of Firearms in respect of changes in the holding of firearms under any names. This was to address the problem when ownership of security companies might have changed. A list must be provided of firearms registered to a security service provider and PSIRA would have to report on this to Parliament
- a new section 36A provided that a person may perform duties outside South Africa but PSIRA was obliged to inform the SAPS of this
-clause 35 provided for additional offences and penalties and increased sentences. Maj-Gen Philips noted that penalties were provided for natural and juristic persons
- clause 36 deleted section 39, which had dealt with extra-territorial application of the Act
- a new section 44A dealt with the transitional provisions.
- schedules and tables of offences were amended

The list of bodies consulted when preparing this legislation was summarised on slide 24. It was noted again that there had been extensive public hearings, including consultation with the Department of Trade and Industry (dti) about the limitation of foreign ownership.

It was noted, on the cost implications, that some investment of revenue might be needed. PSIRA was financed from regional fees and levies as accruing in terms of this Act, the Levies Act or other laws. The Levies Act was passed in 2002 but had never been put into operation and the idea was that it should come into operation in tandem with the Bill. He repeated that if necessary, PSIRA could request Parliament for an allocation. The major cost drivers would be the funding of the PSIRA, capacity building of the Exemption Committee and the renewal of registration.

Version of Bill highlighting wording of new sections
Maj-Gen Philips took the Committee through the second document, a comparison of the original and new wording, with the new wording highlighted. Additions were underlined and wording deleted was marked with square brackets.

After he had taken the Committee through for around half an hour, reading out each of the changes, Members interrupted.

Mr D Bekker (DA, Western Cape) asked whether it was really useful for SAPS to simply read out the new wording to the Committee.

Mr J Gunda (ID, Northern Cape) agreed, and thought it would be more useful for the critical issues to be explained. That would include anything raised in the Portfolio Committee. Members would study the Bill themselves.

Mr L Nzimande (ANC, KwaZulu Natal) said that Members had agreed to this process earlier. He agreed that Members would have to work through the sections themselves and hoped that, if this process was stopped now, Members would do their work, and ensure that they had read it properly by the next meeting.

The Chairperson asked SAPS to continue to take Members through the changes, clause by clause, which was done to the end of the Bill.

Maj-Gen Jacobs explained the references to the Department of Trade and Industry, noting that there was a need to ensure that international obligations were complied with. He also specifically pointed to the references to the other legislation in the schedules. Issues on the Memorandum of Objects had been covered in the first presentation.

Mr Nzimande was grateful that the process had carried on, even though it was quite tedious. He noted that the regulations would affect commandos and neighbourhood watch and similar bodies. This Bill was quite comprehensive. Some issues needed to be clarified – for instance some of the terminology. He said that there were references to both “Parliament” and the “National Assembly”. He also commented on the use of the phrases “security business” and “service provider” and said that Members would need to look at the consistency. The distinction between the “Authority” and “Council” would need to be considered. It should be easy to interpret the Bill. He was not sure if a security officer was a service provider.

Mr Nzimande said that there were some technical questions to be put the State Law Advisers. He said that he had heard that the Portfolio Committee had not yet passed the Bill.

Mr Bekker said that time was not a factor if used economically and this was why he had asked that the presentation be shut short. He was worried about the powers of the Minister. He was not sure how practicable this was, nor whether it would result in good relationships. He was also concerned about the requirement for 51% South African ownership.

Mr Gunda said that he would reserve his questions for the debate; he had a number of issues that he wanted to raise.

Ms H Boshoff (COPE, Mpumalanga) wanted to know about the rationale for the 51%, which had not been stated clearly.

Maj-Gen Jacobs said that many of the amendments were technical. When PSIRA became a public entity this would require many changes and that was why so many of the definitions, for instance, had changed.

Maj-Gen Jacobs said that private ownership issues were discussed extensively in the Portfolio Committee, and the briefing note circulated had set out, in some detail, the position in other countries and he suggested that Members should read it in detail. This had been prepared after the Bill had been referred back to the Portfolio Committee and shortly before that Committee had voted on the Bill.

Other smaller matters related to appointment of deputy director and the like. On the Minister’s role, he pointed out that the Minister was accountable on a political level. SAPS was not involved in PSIRA. There must be mechanisms to ensure that the Minister was able to exercise control, and be involved in, for instance, appointments. The Minister had powers already. Many of the changes related to reporting. The reason it was done through the Council to the Minister was that the Council was the accounting authority for PSIRA, being in charge on the management level. He repeated that the technical amendments would need to be checked. He said again that the main issues related to appointments and ownership. SAPS had asked for provisions to be inserted around uniforms, and the abuse of uniforms that might be confused with those of the police or defence force. Another pertinent point was deployment of South Africans, as security people were being deployed from South Africa to deal with piracy in the Horn of Africa, with firearms.

Mr Manabela Chauke, Director, PSIRA, wanted to clarify the use of the wording. A security service provider was both an officer and a business. Where the provisions related to an individual, the word “officer” would be used. However, for regulatory purposes over the entity, the word “provider” was used.

The meeting was adjourned.


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