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South Africa: Proposal to Tighten Rules on Private Security Industry

(Aug. 2, 2012) It was reported on June 21, 2012, that the Private Security Industry Regulation Amendment Bill, aimed at, among other objectives, restricting foreign ownership of private security firms in South Africa, has come under heavy criticism from the Democratic Alliance (DA), the major political party in opposition to South Africa's ruling party, the African National Alliance (ANC). (Wyndham Hartley, Private Security Bill Under Fire, BUSINESS DAY (June 21, 2012).)

The proposed legislation, if adopted, will amend the Private Security Industry Regulation Act (No. 56 of 2001, 439 GOVERNMENT GAZETTE: REPUBLIC OF SOUTH AFRICA [GG] 2-50 (Jan. 25, 2002), available at South Africa Government Online). It was approved by the Cabinet at the end of May for submission to the Parliament. (Hartley, supra.) The government's rationale for drafting the legislation is that imposing stricter rules on the private security industry is crucial to national security. According to the Police Minister, Nathi Mthethwa, the fact that there are well-armed private security officers in South Africa whose number is greater than the country's army and police force combined is cause for alarm. (Id.)

The DA maintains that the proposed legislation will have a detrimental effect, on multiple levels. DA police spokeswoman, Dianne Kohler Barnard, argues that the adoption of the legislation would discourage investment and endanger the safety as well as the livelihood of many people in the country. (Id.) She contends that South Africa's high crime rate makes private security firms vital and that there would not be a need for their existence if the government had not failed “to adequately protect citizens.” (Id.)

Key Provisions of the Amending Legislation

One of the key provisions in the legislation makes local ownership of security firms a condition for their licensing. The provision stipulates that in order for a security firm to be licensed, South African citizens must have majority ownership and control of the firm. (Private Security Industry Regulation Amendment Bill, § 9, JUTA LAW (last visited July 31, 2012).) This rule is not fixed, however; the legislation gives the Minister of Police unfettered discretionary power to prescribe a different percentage of ownership and control requirements for different security businesses. (Id.) If the legislation is enacted in its current form, existing security firms would have five years to comply with the requirement. (Id.)

Another provision in the legislation seeks to regulate the operations of security firms beyond South Africa's borders. A security firm that recruits, trains, or hires in South Africa for the purpose of providing security services abroad will be required to provide periodic information to the government regarding the firm's recruitment, hiring, training, and deployment practices. (Id. § 16.)

Such firms must also adhere to requirements prescribed in other provisions of the Private Security Industrial Regulation Act, as well as in the Prohibition of Mercenary Activities and Regulations of Certain Activities in Country of Armed Conflict Act (No. 27 of 2006, 509 GG 2-14 (Nov. 16, 2007), available at South Africa Government Online) and the Regulation of Foreign Military Assistance Act (No. 15 of 1998, 395 GG 2-8 (May 20, 1998), available at South Africa Government Online). Violation of its provisions is a serious offense, punishable by up to ten years' imprisonment and/or a fine; second or additional convictions would push the maximum prison term to 15 years. (Private Security Industry Regulation Amendment Bill, § 15.)

In addition, the proposed legislation provides for the establishment of a separate database on firearms issued to security service providers. The relevant provision requires the Police Service to “keep a separate updated database, in the prescribed form, of the details of every firearm issued to a security service provider” and to make the information available to the concerned authorities upon request. (Id. § 14.)

The Private Security Industry in South Africa

Private security is one of the fastest growing industries in South Africa. In 2007, the industry had estimated annual earnings of about US$4.25 billion, with a growth rate of 13% per annum. (Anthony Minnaar, Oversight and Monitoring of Non-State/Private Policing: The Private Security Practitioners in South Africa, in PRIVATE SECURITY IN AFRICA: MANIFESTATION, CHALLENGES AND REGULATION 125, 129 (Sabelo Gumedze ed. 2007).) In that same year, there were an estimated 900,000 registered private security providers in the country. (Id. at 130.) Today, this number has increased to 1.7 million. (Hartley, supra.)