Private Security Industry Regulator Authority on Activities of Private Security Industries: briefing

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10 September 2003
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Meeting Summary

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Meeting report


10 September 2003

Mr M George (ANC)

Relevant documents
Private Security Industry Regulation Act
Private Security Industry Regulator Authority Presentation: Statistical Aspects
Private Security Industry Regulator Authority Presentation: Regulatory Aspects Part 1
Private Security Industry Regulator Authority Presentation: Regulatory Aspects Part 2
Private Security Industry Regulator Authority Presentation: Human Resources Aspects
Private Security Industry Regulator Authority Presentation: Financial Aspects

The presentation by SIRA outlined statistical information on the private security industry; its regulatory and law enforcement component; its human resource aspects, and the financial activities of SIRA. During the discussion, Members sought clarity on the annual fees paid by private security companies and how SIRA had used the huge reserve fund accumulated; progress in registering locksmiths; reasons for the high number of upheld appeals against SIRA's refusal to register security companies, and SIRA's plans to visit security companies more than twice a year. Concern was raised with the low number of inspectors currently employed and SIRA's plans to appoint more; its efforts to provide better protection and life insurance to security officers (especially cash-in-transit guards); the extent to which SIRA has ensured that South African companies had equity ownership in large foreign-based firms; and whether SIRA knew exactly how many firearms were currently possessed by the private security companies.

Briefing by Private Security Industry Regulator Authority
Adv Eugene Vilakazi, Private Security Industry Regulator Authority (SIRA) Director, conducted the portion of the presentation (document attached) which outlined SIRA's statistical aspects, the numbers of various types of security service providers and their geographical spread.

Colonel Mike Hadebe, SIRA Deputy Director, dealt with regulatory aspects. He detailed the regulatory process of the enforcement of the Code of Conduct as well as statistics on the number of cases opened, pursued and finalised.

Mr Ryal Mahipath, SIRA Head: Finance, presented the human resources aspects of SIRA.

Mr Mahipath dealt with SIRA's financial aspects on how income was used in the administration and discharging of its legislative mandate.

The Chair sought clarity on the exact responsibilities of the SIRA Council and whether SIRA would also be responsible for inspectors. Secondly, he sought more clarity on SIRA's capacity problems in the regulatory field. Thirdly, he noted that the presentation indicated that 560 charge sheets had been issued from January 1999 to June 2003, yet only 494 summons had been issued during that period. What was the difference between the two?

Ms D Morobi (ANC) sought clarity on the annual fees paid by these companies.

Mr Mahipath replied that the annual registration fee of a security officer was currently R84,58. This included a registration fee of R56,08 plus one month in advance, as well as R28,50 for an ID Card displaying personal details and grading. A monthly fee of R7,98 also had to be paid to SIRA, which included the private security company's contribution of 80c. The fee for registration of private security companies was R4 560, which included a registration fee of R2 280, an infrastructure assessment fee of R1 710 and two months paid in advance of R570.

The Chair was not troubled by the breakdown of the fees, but rather by the principle that those who profited most did not bear the brunt of the fees. The presentation indicated that most of the income generated by SIRA was from annual fees paid by employees, whereas only 20% was generated by annual fees paid by private security companies.

Adv Swart asked SIRA to provide a breakdown of the 2002/2003 fees paid by both employees and private security companies, because the presentation only provided the 2000/2001 breakdown. This would be important to gauge the progress made since the introduction of the new Act.

Mr Mahipath responded that the 2002/2003 breakdown should have been included but seemed to have been omitted. He stated that the 68,3% of the annual fees indicated in the presentation was approximately the same as the 2000/2001 breakdown. Approximately 45% of the 2002/2003 annual fees have been paid by employees. This confirmed the point made by the Chair. Adv Vilakazi said this would be investigated.

The Chair sought clarity on what exactly SIRA would do with its accumulated reserves in 2002/2003 of R14,3m as it was not a private company that operated for profit.

Mr Mahipath responded that Section 4(v) of the Act allowed SIRA to invest money with any banking or financial institution, and this was being looked into.

Col Hadebe added that SIRA was fully self-funding in all aspects, including the payment of salaries.. This arrangement also served as a form of insurance for SIRA in the event that private security companies refused to pay registration fees, because it would be able to sustain itself without then requesting funding from government. SIRA's reserves would sustain the regulator for a few months in such a situation.

The Chair stated that the Committee agreed that SIRA should have reserves, but there should be limits. He requested SIRA to look into this.

Adv P Swart (DA) would have liked to see the councillors present because there was much concern in the industry about the Chairperson's closed-door policy. This should be placed on record and be discussed with the SIRA Council. Secondly, Adv Swart suggested that the figures "51-500" in the column on the "Analysis of security businesses - security officers employed" slide, should read "51-100". Adv Vilakazi agreed.

Adv Swart asked why there were still so many unregistered active security officers. These had also not received Authority accredited training, despite the marked decrease indicated in the presentation.

Adv Vilakazi replied that SIRA was investigating such infringements. The large number of unregistered security officers was being attended to and their numbers were decreasing.

Adv Swart reminded Members that locksmiths had been granted an extension from the deadline for registration with SIRA because their specific training requirements had not yet been fulfilled. Had any progress been made in registering them?

Mr Q Kgauwe (ANC) stated that the 260 security businesses that provide locksmiths were too few to service the country efficiently. He asked what SIRA was doing to remedy this.

Adv Vilakazi responded that he could not remember any undertakings in previous meetings to assist the locksmiths, but he was speaking under correction. Many locksmiths were registering with SIRA. He would have to consult his colleagues on current support mechanisms for locksmiths.

Adv Swart stated that the presentation indicated that 240 criminal cases were outstanding with the SAPS as at the end of July 2003. He asked how many criminal cases SIRA had opened with the SAPS since 2000 so that this figure could be put into context.

Mr Ntusi Mbodla, SIRA Head: Legal Services, replied that negotiations were underway between SIRA and government and the matter would be resolved before the end of the year. Certain cases had been outstanding for a number of years and these had been tabled before. He hoped this would be resolved.

Adv Swart asked why there was currently a greater withdrawal of training centres than instructors, as indicated in the presentation.

Mr Mahipath responded that training centres could have been withdrawn for not complying with infrastructural assessment or for instructors not having the relevant qualifications. Thus the instructor might have been functional, but not the classroom.

Adv Swart sought SIRA's opinion on the reasons for the high numbers of successful appeals against SIRA's refusal to register a security service provider.

Mr Mbodla replied that this was now rather an academic issue because new SIRA regulations dealing with exemptions and appeals had come into operation on 5 September 2003. The entire process had now been co-ordinated and there would be a substantial improvement.

Adv Vilakazi added that at one stage, one person was acting for the legal services department for the Director and the Deputy Director. Several replications that were not met were sent to the appeal committee, with the result that most of these appeals were upheld. This was the reason for the bulk of appeals indicated in the presentation. New staff in the legal department would hopefully ensure this did not happen in future.

Adv Swart complimented SIRA on its current employment equity ratio as 81 of SIRA's 148 staff were female. Unfortunately SIRA's senior management structure was all male, but perhaps this would also change. Secondly, Adv Swart stated that SIRA seemed to be operating on a sound financial base but these were early days, so the situation had to be monitored.

Mr R Zondo (ANC) asked SIRA to present any other problems for the attention of the Committee, such as the number of firearms used by private security companies or the reasons for the clearance withdrawal of the accreditation by the Tender Board.

Mr Kgauwe said service providers seemed to be satisfied with repeatedly failing to comply with SIRA's requirements and then pay the nominal fine. He asked whether this was because the SIRA regulatory system was unable to impose severe sanctions.

Mr Mbodla replied that SIRA looked at previous convictions of private security companies. If that company had a tendency to pay fines, it would not be allowed to get away easily. Their license could also be withdrawn. SIRA was really serious about offending companies.

Mr Kgauwe stated that SIRA would not achieve its desired results if its administrative or staff component exceeded its law enforcement component. He asked the reason for the large administrative component.

Adv Swart asked SIRA to explain why it had only managed to visit 2 876 of the total 4 271 private security companies in the first half of this year, when SIRA aimed to visit each company twice a year.

Col Hadebe responded that SIRA's inspector component was too small to meet its current demands. Inspectors had to conduct a minimum of twenty inspections per month, and were assessed on performance. The inspectors also performed the new firearms audit, as well as any investigations of private security companies needed. They then wrote reports on any improper conduct and handed over matters to SIRA's in-house prosecution department. They thus had an extensive workload.

He stated that SIRA was considering expanding the current number of inspectors but had not yet decided on exact numbers or levels. Employing full-time inspectors was costly so the introduction of lower-paid assistant inspectors was being considered. SIRA was currently not meeting its target of two inspections per year.

Adv Vilakazi added that this was a concern, because the spirit of the Act was geared around being vigilant, establishing control and regulating the industry. This objective could not be met with such a small number of inspectors. In fact, the administration figures should actually be swapped with the law enforcement component figures. He reiterated that SIRA was currently looking into this.

The Chair stated that Section 30(1)(a) of the Act clearly authorised the Council to appoint inspectors, and sought clarity as to why it was not making sufficient appointments.

Adv Vilakazi replied that SIRA conceded to this shortcoming and was currently looking at its entire organogram.

Mr Kgauwe asked how often SIRA visited the private security companies because the kinds of problems raised indicated that SIRA was not doing so.

Adv Vilakazi responded that inspectors currently conducted two inspections per year, which was not sufficient. Routine inspections meant that each inspector was given a list of twenty private security companies to evaluate per month. Others were triggered by information received on the quality of performance or operations of a specific private security company. SIRA did not have the necessary inspecting capacity and would be looking into this matter.

Mr Kgauwe asked SIRA to explain the steps taken to ensure that the security guards or cash-in-transit guards were provided with adequate insurance cover. They were not employed by SIRA but, as stated earlier by Mr Mahipath, they did pay a minimal fee directly to SIRA.

Adv Vilakazi responded that SIRA did not have any policy on the provision of insurance cover to security officers. Each private security company had to ensure that it covered its employees. It would be very difficult for SIRA to manage this process because private security companies did not inform SIRA of changes in officer complements. A policy decision could be taken which required private companies to provide cover for their security officers.

The Chair agreed that it would be very difficult for SIRA to provide this cover. SIRA did however have the responsibility to ensure that the private security companies provided cover.

Mr Zondo asked whether SIRA was taking any steps to improve the quality of transportation used by security officers. There were far too many incidences of cash-in-transit vehicles being hijacked and security officers being murdered. This had to be addressed.

Adv Vilakazi replied that SIRA was responsible for ensuring that the security officers had safe and reliable transportation and uniforms, and Mr Zondo's concern has been noted. SIRA had applied its mind to this matter and would be engaging cash-in-transit companies to consider the quality of vehicles. SIRA had discovered that certain private security companies maximised profits by using very cheap material for uniforms. SIRA would not be able to assist in remedying the motives for the attacks, but it could definitely play a role in ensuring that the uniforms and transportation was improved.

The Chair stated that SIRA had to act on this as a matter of urgency. These kinds of companies were not only endangering human lives, but monies stolen had a negative effect on the national economy.

Adv Swart proposed that a compulsory death benefit could perhaps be introduced where the security officers paid a fee and the private security company contributed. It might be difficult to implement this because many security officers had moved between security companies. It would also be difficult to require the private security company to carry the cost of providing adequate transportation and uniforms for cash-in-transit security officers, because the clients ultimately had to bear the costs. Perhaps the banking industry should also be included in discussions on this matter.

Mr Mahipath responded that part of the duties of the inspectors was to ensure that private companies complied with the proper wage payment, UIF and providence fund requirements. Death benefits were inherent in the provident fund and so this could be the starting point.

Mr Kgauwe asked whether SIRA inspected the private security company's premises and plans before they were authorised. This did not seem to be the case.

Adv Vilakazi replied that this was a capacity problem that SIRA definitely had to look into. He was confident that it would be able to provide an acceptable response when SIRA next met with this Committee.

Security officers applied for registration for training, and before SIRA considered the matter it sent inspectors to evaluate the training centre, for instance surrounding safety, how many students could be accommodated in one session, what grade would be instructed etc. The certificate granted was thus very specific. When SIRA followed up on infrastructure after registration, it would be able to detect areas in which the private security company was not complying with requirements.

Mr Kgauwe asked how SIRA could spend so much each year on travelling costs of its Board and Council members. He asked whether their travel claims were properly checked.

Col Hadebe responded that the presiding officers were independent from SIRA. Contracts had been concluded with some of them, and their mandate required them to travel extensively to all provinces to do prosecutions. SIRA paid for their travel, accommodation and fees as many worked independently.

Adv Vilakazi added that a few months ago SIRA advertised nationally to cut down on travelling costs. SIRA would now be seeing a decrease in its travelling expenses. Consultants' services need to be retained because it was in the interests of justice and fairness that independent persons look at the case.

Mr Kgauwe stated that it was problematic that security officers still worked after being trained at those training centres that fell outside SIRA jurisdiction.

Ms J Sosibo (ANC) asked about the highest training grade.

Adv Vilakazi replied that the training centres were independent. They were required to register with SIRA like any other company. SIRA insisted that that the owners and instructors of training centres had to have a Grade B licence which dealt with the management. Should SIRA find that one of the stated requirements was missing, that training centre would be penalised. The inspectors were also not allowed to "mix the grades" by lecturing all three at the same time or their registration could be withdrawn.

Ms M Molebatsi (ANC) asked whether the security companies were responsible for paying car guards.

Adv Vilakazi replied that he had recently requested the SIRA Deputy Director to ensure that the law enforcement department visit car guards. A number of shopping malls were visited and the impression received was that guards paid the company and were then allowed to guard cars. This was contrary to the spirit of the Act. Fortunately those car guards investigated were registered and were paid. This required sensitive questioning because SIRA suspected most car guards were foreigners and had been instructed by their employers not to disclose any information. He was awaiting an extensive report from the Deputy Director on this matter. The aim was also to expose companies exploiting these employees.

Ms Sosibo requested the Members be provided with a list of the 4 271 private security companies currently registered with SIRA.

Adv Vilakazi responded by stating that this data was up to date and was available, and could be provided to Members. The decrease in the number of registered companies could be attributed to the mergers taking place between various private security companies.

The Chair asked SIRA to indicate exactly who the "20 big companies" were, how many of them were South African and also how many were owned by non-South Africould companies..

Adv Vilakazi replied that the "20 big companies", especially those that were foreign-based, were not registered as they were with SIRA. Instead they entered the South African private security industry, they would find a willing partner or South African individuals who then become their MD's, CEO's and Directors, yet their shareholding remained in the hands of the foreign company. The management requirements of the operationals such as Securicor, ADT and Chubb, were fulfilled, because those senior management officials were South African citizens and did take up permanent residence in South Africa. SIRA had not really looked into how many of these big private security companies do have South African equity shareholding, and the extent of such ownership.

The Chair stated that the issue here was ownership, and this Committee would be calling the SIRA Chairperson as well as the councilors to account on this matter.

Dr S Pheko (PAC) asked SIRA to provide examples of the "improper conduct" and instances of false information provided by security companies.

Adv Swart stated that SIRA had previously indicated that the average processing time for the taking of fingerprints for registration application SIRA was 4-8 weeks, yet SAPS stated that this would take only 3 weeks. He asked whether this had been resolved?

Adv Vilakazi responded to these two questions by stating that this license was a shortcut, because they would go to a police station and take the necessary fingerprints and be given a temporal clearance. They would then be registered with this authority on the proof of this clearance. It was only afterwards, when SIRA received their proper record, that it would be discovered that the person was actually a convict of a very serious nature, for example. The license would then again be withdrawn and they would be deregistered. The current status was to no longer take this into account, despite the initial intention to provide this clearance so as to provide employment at a much quicker rate. All applicants now had to go through the SIRA process at the SIRA offices, so that all the relevant information on them could be assessed before granting the license. There were many kinds of activities that could be regarded as Improper conduct, and this could be one example of such a contravention. It could include instances in which employers did not pay their employees properly.

Adv Swart stated that his question had not really been answered. He would like to know what the average processing time was for this registration.

Adv Vilakazi replied that there was a SAPS backlog here, and they then bought equipment in an attempt to speed up the process. Matters operated smoothly for about a month or so when that equipment fell into disuse, and SAPS now reverted to its manual system. It was for this reason that the turnaround process had returned to square one.

The Chair asked SIRA to explain how many weapons the 248 025 active registered security officers and the 4 271 active registered security businesses were using. He asked what had happened to the facilities, weapons etc of those service providers whose registration was withdrawn by SIRA.

Ms Sosibo asked whether SIRA reconsidered the new application for registration of those private security companies who had withdrawn their applications on a previous occasion. If not, what happened to the equipment of those companies after their withdrawal?

Adv Vilakazi replied to these two questions by stating that this was a major problem facing SIRA, and it had a specific impact on the safety of the public and national safety. There were certain steps that SIRA took to address the improper conduct, and the private security company was then engaged in order resolve the issue. There were a number of issues that constitute improper conduct, but the serious contraventions included: the utilisation of the services of unregistered employees, underpaying of employees and private security companies themselves that operated without the necessary registration. SIRA was very harsh on these contraventions, and the penalties imposed were also harsh.

He stated that these private security companies were then granted some space, and if they then complied with the registration requirements thereafter, they would then continue operating. SIRA then became more vigilant by checking up on them to ensure they did not repeat their offences. Those private security companies that were either not willing or had no capacity to come back and address their shortcomings would be suspended by SIRA. They would then be granted a 30 day period within which to evaluate and improve their operations, and then reply to SIRA. If there had been no other feasible remedy beyond suspension, SIRA would have no option but to withdraw its authorisation. There were private security companies that would withdraw before SIRA could suspend them, and this depended on the nature of the offence committed.

Adv Vilakazi stated that concern did become apparent with withdrawals, because SIRA would then lose track of those private security companies. SIRA was currently working with SAPS to investigate whether these private security companies have the right to possess equipment, especially firearms. In the past SIRA did not have the necessary infrastructure to locate these types of private security companies, but this infrastructure had now been made possible by the new Act. There were also those private security companies that SIRA was totally unaware of before. This was frightening especially if one looked at the huge amounts of firearms acquired by those private security companies, and there was thus no way for SIRA to keep track of these firearms. SAPS was thus being engaged to ensure that either their registration system or SIRA's was able to limit the ownership of the firearm to the person in whose name it had been registered.

He stated that those private security companies that came for voluntary suspension were also a cause of concern of SIRA. They registered with SIRA, existed for a few months and then informed SIRA that they were no longer able to operate, for whatever reason. They then requested a voluntary suspension, and then disappeared. There were those private security companies that were established merely with the intention of purshasing firearms, and they then disappeared. This was thus a matter which SIRA was busy looking into in consultation with SAPS and other State agencies to jointly address this problem.

SIRA did send in inspectors to check up on those firearms that it was currently able to locate. It was hoped that with time, when annual or even bi-annual renewals became possible, this issue could then be addressed in one go. Adv Vilakazi stated that he had recently requested SAPS to provide SIRA with a list of all the firearms possessed by each and every private security company, so that SIRA could have a clearer picture of the volumes per company. SIRA was currently looking into this.

The Chair asked whether Adv Vilakazi was saying that SIRA did not know how many firearms were possessed by private security company, and that it was SAPS that has this information.

Adv Vilakazi answered in the affirmative.

The Chair asked whether SIRA took stock of all the firearms possessed by the private security company before it withdrew its authorisation, because this would allow SIRA to keep better track of the firearms.

Adv Vilakazi conceded that this was not the current practice followed by SIRA. This process was being introduced.

Mr Kgauwe asked whether SIRA's application forms required the private security companies to state exactly how many firearms were needed, or was this simply left open-ended. This was a problem.

Col Hadebe replied that the following process was usually followed by SIRA: once the private security company acquired firearms they would then apply to the SAPS central firearm registry, which would in turn forward to SIRA the name and particulars of that private security company as well as its request for clearance. This was done because SIRA had to check whether this particular business was registered. Unfortunately the form that the SAPS forwarded to SIRA did not include a breakdown of the types of weapons the private security company was requesting, but did indicate the number of firearms required. Once SIRA had cleared the private security company, the information was sent back to the central firearm registry and the company was then issued with a certificate to purchase those firearms.

Adv Vilakazi added that SIRA was currently engaged in discussions with the SAPS. The clearance form provided by the SAPS only indicated whether the private security company owed SIRA any outstanding fees or whether the private security company was already registered with SIRA. It was on record that he had requested the SAPS to inform SIRA of the nature of the firearms applied for by the private security company, how many firearms the private security company had in its possession at the time of application, and why it needed additional firearms. SAPS had responded positively in this regard.

The Chair asked whether the SIRA delegation was saying that it did not know how many firearms were currently in operation in the private security industry.

Adv Vilakazi and Col Hadebe answered in the affirmative.

Adv Swart proposed that the clearance form should also include other information, such as the number of employees etc. This would be in line with this Committee's discussions on the Firearm Control Amendments Bill which was dealing with the possible inclusion of such information on the forms.

Ms Sosibo asked whether member companies of SIRA were allowed to join unions.

Adv Vilakazi responded that SIRA's legal team was currently engaged in negotiations with unions and some member companies were unionised. SIRA had not taken a definite policy stance for or against this.

Ms Morobi asked why the SIRA regional offices were not geographically located, as this might hinder SIRA's performance.

Adv Vilakazi replied that SIRA was currently undertaking a feasibility study for another office in the Johannesburg area. The aim was to identify means to improve access because many people currently travelled the far distance to Pretoria. East London was also being considered. The feasibility studies on these two offices should be finalised soon. This was an ongoing process, which took into account the geographical spread of the members. The progress made thus far could be provided to Members.

Ms Morobi asked whether the 946 security businesses that provided bodyguarding, as indicated in the presentation, included those businesses that provided VIP protection for Ministers etc.

Col Hadebe replied that SIRA did not handle this at all. These persons were not registered with SIRA and their services were provided by the State security system.

The Chair stated that this Committee had requested Mr Josiah Jele, the SIRA Chairperson, to be present today but he had failed to appear. Perhaps this Committee should invoke Section 10(1)(c) of the Act, because that provision required the SIRA Chairperson to "table a copy of the annual report contemplated in paragraph (b)(i) in Parliament and present such further reports to Parliament as Parliament may request." Mr Jele had to be called in to appear before this Committee to discuss very important matters that had to be considered, such as granting a stake to South African companies in foreign security industries and improving the conditions of service of employees in the South African private security industry.

Adv Vilakazi replied that conditions of service was a concern shared by SIRA, and this issue did therefore fall within the ambit of "improper conduct". SIRA had inspected the wages of employees and any deviation by the employer would result in a charge of improper conduct. SIRA therefore picked up on harassment and exploitation of employees. Instead of visiting the private security company, SIRA inspectors now consulted the employees themselves. This information was then presented to the private security company. SIRA did not have any concrete data on this at present because it was a new initiative. It was hoped that SIRA would at some stage be able to address the relationship with foreign security companies.

The Chair thanked SIRA and expressed the Committee's hope that the delegation would have settled into their new posts by the next meeting. The SIRA Chairperson had to attend the next meeting.

The meeting was adjourned.


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