State Security Minister David Mahlobo raised eyebrows when he delivered his budget in parliament on Tuesday, stating that “there were agents of regime change implementing other countries’ nefarious agendas operating in the country”.

However it was the brief mention of controversial private security laws that are of greater concern, according to political and legal analysts.

This year could see the Private Security Industry Regulation Amendment Bill signed into law, if its brief return to the spotlight yesterday in State Security Minister David Mahlobo’s 2017/18 budget vote speech is any indication, notes Legalbrief’s Pam Saxby.

The bill, which was originally assented to in parliament in 2014, disappeared from the spotlight for a number of months after its proposed controversial reforms were met with significant resistance by the private security industry.

“Reiterating government concerns about depending on foreign-owned private security companies to protect the country’s ‘national key points and strategic installations’, the Minister told National Assembly MPs that – once in force – the Bill will be used ‘as a means to ‘secure’ SA’s ‘sovereignty’ and to ‘assist’ in addressing ‘some of the challenges’ entailed,” said Saxby.

Legal issues

According to an analysis by the Daily Maverick, the chief criticism of the new bill centres on the power given to the minister of police to expropriate up to 100% of a foreign-owned security company, and limit foreign ownership of local private security companies to 49%.

In addition, there are concerns that the bill is focused less on legislating the companies and more on regulating them as businesses. This would mean that the sector would be subject to government’s “transformation” strategies and discouraging foreign investment in favour of South African ownership.

Importantly, these clauses would be in violation of South Africa’s commitments under the World Trade Organisation’s (WTOs) General Agreement on Trade in Services (GATS) and wold likely see the country’s economy affected elsewhere.

Similar to Mahlobo’s statements on Tuesday, the DM analyst cited then-police minister Nkosinathi Nhleko, who noted that the bill was purely in the interests of national security.

“We are aware that this industry increasingly gathers intelligence which sometimes can compromise national security,” said Nhleko in March 2015.

“Some of these companies have strong links outside the country and it would really be unrealistic not to guard against these potential dangers.

Economic implications

South Africa’s private security industry is massive, with registered security officials outnumbering sworn-in police officers and active soldiers in the army.

According to the Private Security Industry Regulatory Authority (Psira), there are over 1.87 million registered security officers in South Africa – 490,000 of whom are classified as active.

In comparison, a 2015 study by the IRR found that South Africa’s private security force had quadrupled between 1997 and 2015, from 115,331 registered security officials, to just under 487,000.

The South African police force, meanwhile, has around 153,000 sworn in police officers, while the South African army has only 89,000 active personnel – about half as many people as the private security force.

The introduction of this new bill would see these numbers almost halve, according to Sacci economist Roelof Botha.

Estimating the effects of the bill in the City Press in 2015, Botha highlighted that more than 800,000 jobs across various sectors would be lost, as well as about R133-billion of the country’s GDP.

Botha directly attributed this to a hypothetical 10% drop in South Africa’s exports to the US and to Europe and the assumption that the Americans will kick South Africa out of the African Growth and Opportunity Act (Agoa) because of the security bill.

Political implications

The private security industry in South Africa is believed to be the largest in the world, highlighted the DA’s Dianne Kohler Barnard upon the shelving of the bill in 2015.

“The Private Security Industry Regulation Amendment Bill aims to regulate the industry by addressing the lack of adequate resources; proper accountability for firearms in possession of its members; security services rendered outside the Republic by South African security companies; and criminality within the private security industry,” she said.

“The previous Minister of Police determined that foreigners working in this industry could rise up like an army and, without a shred of research or evidence, claimed they were a threat to national security.”

“The last minute reintroduction of a clause that restricted foreign ownership of security companies to 49%, also gave full power to the Minister to determine the percentage of expropriation (up to 100%) and control in respect of different categories of the security business

“It is a self-defeating attack on our economy using unproven and unjustified claims against private security companies, especially as the nationalisation debate is being watched by global investors.”

Read: R2 billion merger deal shows just how big private security is in South Africa