Security firms on edge

They protect thousands of homes, businesses and even government buildings but foreign-owned security companies such as ADT, G4S and Chubb feel threatened.

A clause in the Private Security Industry Regulation Amendment Bill - passed in parliament late last month - requires that at least 51% of foreign-owned security companies be held by South Africans.

But the industry has called on President Jacob Zuma to "reconsider" this section of the bill, saying foreign companies might pull out of the country if it is enacted.

The Security Industry Alliance said the proposed regulations would have an adverse effect on investor confidence.

"Many international companies have invested substantially in the sector and the advent of these limitations will threaten investor value," said alliance boss Steve Conradie. He said it would affect the companies' ability to create jobs.

"The scope and the application of the clause is unclear. The definition of security 'services' is extremely wide, and so . it could include firms that manufacture security equipment such as Honeywell, Bosch, Samsung and Panasonic," Conradie said.

The bill's approval by the ANC majority in parliament sparked heated debate.

Police Minister Nathi Mthethwa said the growth of the multimillion-rand industry has led to private security guards outnumbering the police and the military. The line between private security and the public sector was being blurred, he said.

The DA's Dianne Kohler Barnard said last month that private security companies reduce the demands on police manpower, releasing officers to focus on areas where the incidence of violent crime is highest.

"If private security firms leave, and some will after this bill is passed, there will be more demand on an already over-stretched SAPS. It will be the communities with the highest rates of crime that will feel the brunt," said Kohler Barnard.

The alliance said the bill would contravene bilateral investment treaties. It said that foreign-owned security companies are managed by South Africans and have BEE shareholders.