Private Security Bill: Zuma's ANC pushes xenophobic agenda that will result in job losses
Today, the plan to expropriate at least 51% of ownership of foreign-owned security service providers was pushed through by the ANC majority of the Portfolio Committee on Police.
Despite letters from various international embassies condemning the expropriation clause and vehement opposition by the DA, all issues of concern were brushed aside and the Private Security Industry Regulation Amendment (PSIRA) Bill was adopted.
The reintroduction of this xenophobic clause - at a time when our rand is in a sustained weakness against major global currencies and when analysts are stating that ours is one of the hardest-hit currencies in the emerging market - will have catastrophic consequences for our economy and investor confidence.
Ultimately, jobs will be lost and our country's unemployment rate will soar.
There are huge concerns that provisions that limit foreign ownership of private security companies under the World Trade Organisation (WTO) General Agreement on Trade in Services (GATS) are being breached. South Africa has undertaken full market access and national treatment commitments with respect to ‘investigation and security' services - so WTO organisations must be able to provide these services without restrictions.
The expropriation clause that forces Private Security (PS) firms to sell at least 51% of their shares to South Africans appears to violate these GATS undertakings. This Amendment additionally allows the Minister free-reign to expropriate any percentage of any foreign-owned security-related company in South Africa. Indeed, the South African Police Service (SAPS) Law Advisor confirmed that the law would allow the Minister to expropriate 100% of any foreign-owned security serviced provider. This opens the door wide open for further corrupt activities enriching the lives of an elite few.
This limiting of foreign ownership today sends negative signals to other foreign investors. For example, most security technology, from alarm systems to CCTV systems are manufactured and distributed by international companies. Additionally, there are PS companies on the
The DA believes that this Bill will constitute an unlawful expropriation under section 25 of the Constitution. Additionally, we believe it may also place the government in breach of its obligations under the SA-UK bilateral treaty and the other 45 bilateral investment treaties (BIT). This insertion will, we have no doubt, ensure there will be numerous BIT claims and we may be subject to arbitral proceedings before international arbitral tribunals.
No justification at all was given for the 51% insistence on nationalisation of these companies. No research or proof has ever been presented before this Committee showing that private security firms are a threat to national security, despite numerous requests by the DA.
This self-defeating attack on our economy using unproven and unjustified claims against private security companies cannot be viewed lightly, especially as the nationalisation debate is being watched by global investors. The DA will speak out from the podium and vote against this Bill. We have already been informed that it will indeed be taken to court and have no doubt that it will be sent back - like many others - to the National Assembly to correct.
This Bill is a disaster of national and international proportions - it deters foreign investment, decreases job opportunities, and increases the capacity for corruption as companies are forced to hand over majority shareholdings of both one man and multi-national companies alike.
It is yet another indication that Zuma's ANC is not serious about growing the economy, creating jobs, and fighting crime.
Statement issued by Dianne Kohler Barnard MP, DA Shadow Minister of Police, January 28 2014
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