Security Industry Regulation Bill: deliberations

Meeting report

SAFETY AND SECURITY PORTFOLIO COMMITTEE
9 October 2001
SECURITY INDUSTRY REGULATION BILL: INFORMAL CONSIDERATIONS

Chairperson: Mr M E George

Relevant Documents:
Security Industry Regulation Bill
Working Document on the Security Industry Regulation Bill

SUMMARY
The Department and the Safety and Security Secretariat presented the Committee with an amended version of the Bill. The Committee commenced checking the amendments against what had been proposed and agreed upon by the Committee.

The issue of the powers of inspectors of the Council in Clauses 32 and 33 remain unresolved. Much concern was expressed especially on Clause 32(3), which confers the powers of peace officers upon inspectors. It was decided to delay discussion on it.

The controversial issue of excluding foreign investment from the industry had been captured by the drafters in Clause 38A. However pleased the ANC was by the provisions in the clause, the DA raised a valid concern over the Clause 38A(3) that does not allow foreign banks to provide loans for investment in the security service industry. This concern was especially valid, as local banks would not have the required capacity to finance the proposed R5 billion buyout of foreign companies. The ANC agreed to look into the issue.

MINUTES
Security Industry Regulation Bill
The Chairperson, Mr George stated that the aim of the meeting was to check on the amendments that the Department had effected to the Bill. If in fact what had been incorporated in the Bill is what the Committee had decided on.
The Chair appealed to members only to raise questions on those issues that have not been previously exhaustively discussed by the Committee.

At the outset of the meeting, Ms A Van Wyk (UDM) stated that she wished to make a proposal on behalf of her party on the controversial issue of foreign investment in the industry.
The UDM suggested that a compromise be reached on the total exclusion of foreigners from the industry. Ms Van Wyk suggested that foreign investment in the industry be allowed but that it should be limited to a maximum of 20% in the industry as well as a maximum of 20% in a particular security company.

The ANC expressed their appreciation for the willingness of the UDM to find possible solutions to a difficult problem. Having said this, the ANC was adamant that foreign investment in the industry should not be allowed.

The DA expressed their disappointment at the reluctance of the ANC to accept any form of compromise.
Adv A Gaum (NNP) asked if the ANC had considered trade agreements between South Africa and foreign countries when making their decision to exclude foreign investment in the industry. In being signatories to such agreements, South Africa has committed themselves to honour investments made by foreign investors in South Africa.

The Chairperson became irritated by Adv Gaum's question and made a point of order that the discussion on foreign investment in the industry would not be opened up again.

The Chair proceeded to take the Committee through the working document thereby checking on whether the appropriate amendments have been made to the Bill.

Chapter 2: Private Security Industry Regulation Authority
Clause 8: Terms and conditions of office, vacation of office and payment of remuneration and allowances
The Chair asked why the Department had two possible alternatives for Clause 8(2).

The Department and the Secretariat had included the options so that the Committee could decide for themselves what the best possible option is.

The ANC proposed that the first option be accepted and that the latter option be removed.

The Committee agreed.

Clause 9: Functions of the Council
The Department had drafted provisions on what the possible functions of the chairperson of the Council should be. A new clause was thus introduced ie Clause 9(2).
The ANC proposed substantive changes to Clause 9(2)(a)-(g).

Adv Swart stated that he appreciated the drafters' efforts but asked why a provision that provides for the chairperson to be employed full-time had not been included.
He added that the provisions in Clause 9(2) seem to be standard functions of a chairperson. Adv Swart wished for the functions of the chairperson to be ratified by the Council of the Authority.

Mr Soman (Safety and Security Secretariat) stated that the provision relating to the full-time employment of the chairperson of the Council is provided for in Clause 8(1) of the amended version of the Bill. It states:
8 (1) " A councilor is, subject to this section, appointed for a period not exceeding three years, on such terms and conditions as the Minister may determine in a letter of appointment.
It is therefore apparent that the document in which the Minister appoints the chairperson could make provision for his appointment to be on a full-time basis.

Adv Swart felt the provision to be ambiguous, as it does not expressly provide for the chairperson to be employed on a full-time basis.

The Chairperson, Mr George agreed and consequently asked the Department and the Secretariat to draft a specific provision of the "full-time employment " of the chairperson of the Council.

Clause 11: Ministerial supervision of Authority
Clause 11(c) gives the Minister the discretion to dissolve the Council and to appoint a new Council.

Adv Gaum asked what the test would be in order for the Minister to dissolve the Council. It was felt that the sanction by the Minister to dissolve the Council was a serious one and that it should only be used in exceptional cases.
Adv Swart shared the concern as to what would keep the Minister in check on the exercise of such a far-reaching power.

Mr Kgauwe reacted that the Minister would not make an irrational decision in the exercise of such a power.

The Department and the Secretariat pointed out that the words," the Minister may intervene by taking any appropriate step" in Clause 11 ensures that the Minister does not make an irrational decision.

Clause 13: Committees to assist Council
Adv Swart was concerned about Clause 13(2), which places discretion on the Council to appoint Committees representing the interests of the industry. He therefore proposed that the word, "may" in Clause 13(2) be replaced by the "must".

The Chair stated that he understands Adv Swart's concern but added that if a positive obligation is placed on the Council to establish Committees, what happens in those instances when the need for such Committees no longer exists. The Council would then not be fulfilling its mandate. Mr George felt it best to leave it up to the discretion of the Council to decide on the establishment of required Committees.

The Committee agreed.

Chapter 5: Monitoring and investigation
Clause 30A: Code of conduct for inspectors
The Committee agreed to the provisions that the Department had drafted in this regard.

Adv Gaum however had concerns over the possible abuse of power by inspectors.

The Chair allayed concerns by stating that the provisions on the code of conduct that the Council is required to draft would keep the inspectors in check.

Clause 32: Powers of inspectors relating to security service providers
Mr A Maziya referred to Clause 32(3), which gives inspectors the powers of officers of police. He felt that conferring these powers upon inspectors would be over-empowering them. Mr Maziya suggested that Clause 32(3) be removed.

The DA supported the suggestion of Mr Maziya as the conferring of peace officer powers on inspectors would be giving them powers that are beyond the Bill.

The Chair noted that the suggestion does not reflect the views of the ANC as the issue is still under discussion.
Mr R Zondo (ANC) proposed that the matter be discussed at a later time.

The Committee agreed.

Clause 33:Powers of inspectors relating to other persons
The Committee agreed to delay discussion on the clause as it relates directly to Clause 32.

Chapter 6: General provisions
Clause 34: Regulations
The Chair referred to Clause 34(1)(section A) which was a new provision relating to the Minister making regulations on the use of consultants by the Authority.
Mr George stated that the concern had been over the abuse of the use of consultants by the old Board. How was the concern going to be addressed in the Regulations?

Adv Kok stated that if the Minister is allowed to make regulations on the use of consultants it be much easier to regulate their use by the Authority.

The Chair insisted that provision be made for the limited use of consultants by the Authority.

Adv Gaum remarked that eventually the DA and the ANC agreed on an issue.

Adv Kok agreed to draft a provision relating to the limited use of consultants by the Authority.

Clause 38A: Prohibition of foreign involvement in a South African security business
The Department had drafted the clause as was requested of them by the Committee.

Adv Gaum once again took the stance that the DA is totally against the decision of the ANC on excluding foreign investment in its entirety from the industry. He went to the extent to say that it might even be unconstitutional.

The ANC reiterated that the concern was not per se the investment of foreigners in the industry but rather the risks that it could pose to the security of the country.

Adv Gaum challenged the ANC to present proof to the Committee of how foreign investors could pose a security threat to South Africa.

The Chair stated it is not the responsibility of the ANC to provide evidence or proof in this regard. He also congratulated the drafters in capturing exactly what was expected to be in the clause on prohibiting foreign investment in the industry.

Adv Swart referred to Clause 38A(3) and asked if the provision prohibits foreign banks from financing purchases of shareholding in the industry.

Adv Kok confirmed that it was.

The Chair stated that the reasoning behind the provision is that in the event that a consumer defaults on payments on his loan to the foreign bank, the bank would be entitled to attach the security business as it would have been provided as security in lieu of receiving the loan.

Adv Swart was concerned that South African banks do not have the required capacity to provide the financing to local security companies for the R5bn buyout of foreigners.
Adv Gaum reacted that it would be virtually impossible for foreigners to be bought out at market value.

The Chair noted the concern and stated that the ANC would discuss the matter.

The meeting was adjourned.