Bill targets majority stake in security firms

South Africa on Tuesday passed a controversial new private security industry regulation amendment bill. The bill aims to limit foreign ownership in security companies. Foreign-owned private security companies would be compelled to sell 51% of their shares to South Africans. Police Minister Nathi Mthethwa told MPs this was necessary in the interests of state security. “It is necessary because the line between private security companies and private military companies is increasingly becoming blurred,” said Mthethwa. “Equally, private security companies are increasingly used in the field of intelligence.” South Africa was not alone in wanting to curb foreign ownership, as other countries had done the same, with some states even outlawing it. Mthethwa dismissed arguments that the bill would lead to job losses in the industry. “The provision of security service depends on supply and demand like any commodity in the market place. Change of ownership will not change demand,” he said. Claims that companies would disinvest were also brushed aside. “Indications are that when the time comes, they will sell the relevant shares to comply with the law, not closing down as we are led to believe,” Mthethwa told MPs. The Democratic Alliance did not accept Mthethwa’s assurances. The party believed the bill, specifically the expropriation clause, would be challenged in the Constitutional Court. “Jobs will be lost and our country’s unemployment rate will soar,” DA MP Dianne Kohler-Barnard said. “Massive private security companies will be under threat of closure as their majority shareholdings are taken and warehoused by the state, and job losses there mean more pressure on the SAPS (SA Police Service), and even less to deliver to those most under siege, our poorest of the poor.” The Freedom Front Plus opposed the bill on the basis that it would lead to security companies closing shop and jobs being lost in the sector. The proposed law was, however, pushed through by the ANC majority with 202 votes for the bill, 68 against, and five abstentions.