Security Industry Regulation Bill: deliberations

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02 October 2001
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Meeting Summary

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Meeting report

2 October 2001

Chairperson: Mr M. E George

Relevant Documents
Security Industry Regulation Bill [B12 - 2001]

The ANC stood firm on its decision to exclude foreign investment from the industry. The Department was instructed to redraft the Bill to convey this position as well as drafting provisions relating to transitional arrangements applicable to foreign companies in the industry.

The DA said that the disinvestment of foreign interest in the security industry would jeopardise nearly 20,000 jobs. The security industry was the fastest growing direct foreign investment and attracted three billion rands in investment. This huge resource would be lost if the proposed Bill were not retracted.

The Committee felt it unfortunate that the new Authority would have to bear the past debts of the old Board. They would have preferred the Authority to start with a clean slate.

Security Industry Regulation Bill
Chapter 3: Registration As Security Service Provider
Clauses 20, 21 & 22

The Chair said that the bill as drafted does not clearly reflect the position taken by the ANC. The ANC wanted foreign interests stopped in the security company industry. The drafters were instructed to amend the bill so as to remove any ambiguity that was apparent regarding this position.

The Chair explained that the divestiture of foreigners from the industry would be a staggered process to allow them to sell out their interests to the local people through a managed transition period.

Mr Kgauwe (ANC) supported the Chair's remarks and said that the Bill should be tailor-made to benefit both the employees and the employers in the industry. It should also benefit both black and white investors.

Mr Gaum (NNP) stated that it was his Party's position that the bill is shortsighted. The effect of such a law would be unimaginable to the investment climate in the country. Foreign investors put on hold a sum of R150 million when this Bill was proposed. They are keenly awaiting the outcome of the Bill before they can invest their money in the country. If foreign investors were to be forced out of the security industry the country would loose the equivalent of R3 billion annually in investment only. About 20,000 jobs would, too, be lost.

Mr Gaum pointed out that the UK had a trade agreement with South Africa on investment issues and that the proposed Bill goes against the grain of that trade co-operation.
Had the Minister of trade and industry been consulted on the issue since he is now in Japan?

The Chair insisted that the ANC is firm and all relevant Ministers including the Minister of Trade and Industry had been adequately consulted. All had agreed to the proposed amendment. The ANC had even consulted the DA on this very matter and discussions had been exhausted.

Adv Swart (DP) pointed out that there was a huge foreign investment in the security industry and that the matter needs to be approached with caution. In the past the industry has been a major investment generator with future flow of investment guaranteed. The effect of the foreign divestiture needs to be looked at in broader terms. There were massive investment sub-sectors that are linked to the security industry.

Mr Gaum (NNP) suggested that the matter should be set aside until the Minister of Trade and Industry could be consulted.

The Chair said that any person is free to consult the Minister but that such consultations had nothing to do with the Committee's business. Some of the interest groups had sought for and would be granted an audience with the Committee on this issue. The Chair then ruled that debate on the Bill proceed.

Chapter 5: Monitoring and Investigation
Clause 33 - Powers of Inspectors relating to Other Persons

Adv Kok, the State law advisor informed the Committee that there had been some changes in Clause 33(1)(a) and that the words "and all other persons" have been inserted after 'security service providers'.

Mr Gaum (DP) suggested that the word 'reasonable' be inserted in subsections (iii) and (iv) of Clause 33(1)(b).

The Chair informed Mr Gaum that the addition of the word 'reasonableness' was disallowed in the last meeting due to its subjective nature. The Committee's position on the matter, he stated, still stands.

Adv Swart (NNP) said that the State law advisor's change would affect the rights of private persons who had nothing to do with the security industry.

Adv Kok explained that the Clause does not aim at private persons but that it targeted companies like Anglo who maintained in-house security machinery.

Mr Gaum (DP) suggested that a warrant be made compulsory before a search under subsection 2(a) of Clause 33 since the section will affect private citizens.

Mr Ferreira (IFP) supported Mr Gaum and asked how a warrant issued by the justice of the peace will affect private people's affairs.

Adv Kok said that he will verify the position but insisted that that was the way it is normally written and that the justice of the peace normally issues warrants in such cases.

Mr Gaum (DP) suggested that Clause 33 (3)(c) be removed all together unless the justice of the peace issues the warrants. Mr Ferreira supported Gaum and said that the section as drafted could be subject to abuse.

Adv Kok said that some concern had been raised before regarding the section. A strict test had been used to ensure that the inspectors do not work on their own whims but that they must apply their minds objectively and act only on sound and objective grounds.

He added that the guiding principle for the inspectors should be that the issuance of the warrant would otherwise defeat the ends of justice. Where the possibility of obtaining a warrant even remotely exists, then the inspectors are under a legal obligation to proceed by way of a warrant.

The Chair said that there are some urgent and instantaneous situations where it becomes incumbent for the inspectors to act without seeking a warrant from the justice of the peace.

Adv Swart (NNP) agreed with the Chair that in such situations a warrant can and should be dispensed with for the sake of the prevention of a criminal act. It was however, important that the rights of law-abiding people be balanced against the possible inherent abuse of power by law enforcers. These inspectors are more or less highly empowered auditors and not police officers. The need for safeguards against abuse was the greater in this case.

Mr Ferreira (IFP) revisited the issue of the justice of the peace saying that this regime encompassed a broad spectrum of people. The affected persons need to be defined clearly.

Mr Gaum agreed with the State law advisor that the test was strict but noted that it will still impact negatively on small companies who do not have resources to engage in repeat litigation.

Adv Swart (DP) supported the view that a warrant should be made compulsory in this case to avoid the possibility of abuse.

The Chair said that the Committee's interpretation of Clause 33(1) was that it is subject to Clause 31(1) but the State law advisor seemed to think otherwise.

Adv Kok explained that the section is not an open-ended provision. He added that it did not relate to all persons as such. The Clause first applied, for purposes of inspecting, to persons who are subject to inspection in terms of the Act. He said that subsection (a), on the other hand, targeted all persons with links to people in the security service industry in which case it justifies an inspection in that respect.

Mr Swart (DP) said he agreed with the Chair that the section as drafted should be struck out.

The Chair ruled that the view of the Committee is that Clause 33 is subject to Clause 31 and directed the State law advisor to effect the necessary changes.

Mr Scott (ANC) said that the person referred to as the justice of the peace was not clear in the Act. The category referred to should be specified in the Bill.

The Chair asked the State law advisor to look at the issue of the justice of the peace again with a view to clarifying the position.

Chapter 6 General Provisions
Clause 34 - Regulations
Mr Gaum lamented the immense powers given to the Minister under Clause 34.

Mr Swart said that only Clause 34(1)(a) and (t) was relevant the other subsections are a matter of interpretation by the Courts of Law.

Mr Kok said that it is difficult to predict what the Court's interpretation would be in such a provision as suggested by Mr Swart. The best option is to give to the Minister wide powers for the effective administration of the Law.

Gaum said that Clause 34 (h)-(m) falls outside the mandate of the Minister.

Adv Swart said that the section would clash with other Acts that regulate arms procurement.

Ms Van Wyk (UDM) suggested that the section be made subject to the Fire- arms Control Act to avoid a possible clash.

Mr Booi (ANC) noted that there is a rapid change in weapon manufacture and assembling such that it is imperative that the Minister keeps close control over the circulation of firearms within the security industry.

Mr Ferreira agreed with Mr Booi that the firearms sector is growing fast and that it needs close supervision but noted that the section should be in harmony with other Acts of parliament.

Mr Kok said that the Firearms Control Act would supply the basic provisions and the Minister would make rules within the Act. The security industry keeps large amounts of firearms and it is important that there be strict control hence the need for a specific provision under this Act.

The Chair agreed with the legal advisor that the Clause remain the way it is.

Clause 36 - Preservation of Confidentiality
Mr Kgauwe (ANC) said that Clause 36 (d) infringes on individual personal liberties.

The Chair said that inspectors must carry out their work and only where people feel that they would incriminate themselves would they have a right to keep silent.

Mr Booi(ANC) said that he sees the rationale for the section but that it needs to be improved upon.

Ms Van Wyk (IFP) said that Clause 36(c) (d) and (e) must apply to those under Clause 31 only - that is people in the security industry and not any other persons.

The Chair agreed with Ms Wyk that Clause 36 (c)(d) and (e) should apply to those in the security industry only. The others subsections (a) and (b) under Clause 36 can apply to any other persons.

Clause 37- Offences and Penalties
The Committee increased the term of imprisonment at Clause 37 (2)(j), (ii) and (iii) to 5 years, 10 years and 2 years respectively. As for Clause 37(3) a term not exceeding 3 years was imposed in place of six months.

Chapter 6: General Provisions
Clause 40: Delegation of powers by the Minister
Adv Kok pointed out that the clause is a standard delegation clause. It provides for the delegation of the Minister's powers except those relating to regulations and exemptions.

Mr M Pheko (PAC) asked what happens in the event that both the Minister and the delegatee excercises the power simultaneously or if there is conflict between the Minister and delegatee.

Adv Kok stated that in both instances the normal rules of law would apply.

The Committee agreed to the clause.

Clause 43: Transitional Arrangements
The Chair asked what safeguards have been provided for in the clause to protect the new Authority against past liabilities and debts of the old Board.

Ms D Rasegatle (Safety and Security Secretariat) replied that unfortunately the new Authority would have to take over the past liabilities of the Board.

The Chair stated that it was unfortunate and asked if there was a means to limit the current activities of the Board so as to prevent further debts from being incurred.

It appeared that there was no way to limit the normal functioning of the Board.

Memorandum and Objects
The committee agreed that consequential changes would have to be made to it.

The Chair asked the Department to make the required changes to the Bill as soon as possible and to make the amended version available to the Committee.

Adv Kok agreed to effect the changes to the Bill by the end of the week.

Adv P Swart (DP) stated that if the ANC is adamant about excluding foreign investment in the Bill, transitional arrangements should be discussed.

The ANC agreed that transitional arrangements should be discussed.

The Chair instructed the Department and the Safety and Security Secretariat to draft provisions addressing the transitional period.

Ms A Van Wyk (UDM) cautioned that the transitional period provisions should stipulate a time frame within which ownership should change. Enough time should however be allowed for foreigners to sell off their current shareholdings in the industry to South African companies.

The meeting was adjourned.


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