1 SUBMISSION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON POLICE “THE PRIVATE SECURITY INDUSTRY REGULATION AMENDMENT BILL, 2012” PRESENTED BY: C LOUW 1 NOVEMBER 2012

2 INTRODUCTION  ADT is a market leader in safety and security solutions to residential and commercial customers in South Africa, with more personnel, vehicles and resources than any other security company;  Tyco International, of which ADT is a subsidiary is Head Quartered in Princeton, New Jersey, USA;  ADT appreciates the opportunity to present to the Parliamentary Portfolio Committee on Police on the PSIRA Amendment Bill “the Bill”;  ADT supports the strengthening of certain provisions of the PSIRA Act, namely the promotion of crime prevention partnerships, a separate database on firearms for security service providers and the provision relating to funding of PSIRA;  ADT is however, against the limitation of foreign ownership as provided in section 20 (c) of the Bill, and proposes that this provision be withdrawn from the Bill.

3 DEFINITIONS Substitution for paragraph (h) of the definition of ‘‘security service’’: ‘‘(h) installing, servicing, [or] repairing, distributing or transporting security equipment;’’  Definition extends regulation in terms of the Bill, to IT companies, distributors, resellers, freight forwarders and similar transportation agencies, and it is inconceivable that this was the intention, given the number of the entities in these industries;  The Bill does not provide clear guidance to entities in these industries about when to comply and be registered as “security service providers”;  It does not appear that entities in these industries have been engaged on the possibility of being regulated by PSIRA;  The foreign owned entities in these industries that will be affected by the limitation on foreign ownership, appear to be unaware of this Bill.

4 LIMITATION OF FOREIGN OWNERSHIP  It is unclear what the rationale behind the proposed amendments limiting foreign ownership is;  The PSIRA Act currently restricts registration as a security officer to citizens; it is therefore inconceivable that citizens would place foreign interests before local interests;  The provisions of the Bill limiting foreign ownership will in our view potentially have the effect of limiting foreign direct investment in South Africa;  Section 20(6)(a) prescribing a period of 5 years for security service providers to divest their shareholding can be construed as a forced sale of shares, and quite possibly falls foul of section 25(1) of the Constitution.  The determination by the Minister in section 20 (2A) of different percentages of ownership and control of foreign owned security providers, does not support fair treatment of industry participants.  The exclusion of persons with permanent residence in the Republic from participating in the security industry, may also be in conflict with the Constitutional requirement for equality of treatment of foreign nationals  The limitation of foreign ownership violates a number of existing trade treaties and agreements.

5 CONCLUSION  The Bill is obstructive to foreign investment, and appears to be in conflict with South Africa’s international trade relations, and the Constitution;  The Bill will have the effect of sending negative signals to foreign investors not only in this industry, but also others;  Non-compliance with legislation and regulations by many multinational companies in the countries in which they operate is not negotiable, these companies invest in professional staff and enabling technology to curtail the risk of non-compliance;  The Bill should therefore be withdrawn and re-assessed with due consideration to possible impacts on the industry and the economy, alternatively the provisions aimed at limiting foreign ownership in the industry should be withdrawn.

6 QUESTIONS Contact Person: Charlene Louw 1 Charles Crescent Ext. 8 Sandton Tel: