Archive | Security,police,defence

Debate on Nkandla to intensify

Facts on Nkandla with MPs…..

effIn an internal parliamentary question paper, M Khawula, an MP of the IFP-KZN, asked for a reply in writing from the minister of police to his question, “Which structures, buildings and/or areas have been declared national key points and, secondly, what qualifies such to be declared national key points.”

He was not to know that minister of police, Nkosinathi Nhleko, would be forced out of blustering and show that president Zuma’s country homestead in the hills of KwaZulu-Natal, Nkandla, was indeed a national key point whereas, as illustrated by a newspaper in the parliamentary recess, nuclear experimental station, Pelindaba, north of Johannesburg, was not.

The reply in writing from the minister in the parliamentary replies of 19 September, in response to Nhleko’s question, was as follows, “To publish or to make known a list of all national key points would to a large extent defeat the purpose of the National Key Points Act 102 of 1980, namely the protection of such NKP’s. It is therefore not policy to provide such a list for public knowledge.”

When is a key point not one?

The minister added to the written note, “In terms of the National Key Points Act, section 2 deals with the declaration by the Minister of Police and I quote; “Declaration of any place or area as a National Key Point.

(1)  If it appears to the Minister at any time that any place or area is so important that its loss, damage, disruption or immobilization may prejudice the Republic, or whenever he considers it necessary or expedient for the safety of the Republic or in the public interest, he may declare that place or area a national key point.

(2)The owner of any place or area so declared a national key point shall forthwith be notified by written notice of such declaration.

That was the full extent of the reply from the minister.      Meanwhile in the recess, the opposition has written to the Speaker of the House, requesting that President Zuma be forced to respect the Constitution and answer questions from MPs in the National Assembly orally on a regular basis.

Weight of the law

settlement_law_justice_In the meanwhile during the recess, Judge Roland Sutherland in the Johannesburg high court  ordered the minister to hand over the list of national key points and national key point complexes in “the next thirty days” to the parties complaining, who were the Right2Know Campaign and the South African History Archive. Such was finally acceded to.

It is now understood from a statement made at the proceedings by the Mail and Guardian, who joined the action as a friend of the court and who were represented by advocate Matseleng Lekoane, that according to the Act, security guards are allowed to search and seize peoples’ belongings if the people were in a national key point. “They were also allowed to use guns to do this”, she said.

Adv. Lekoane argued that if this was the type of reaction that people, including journalists, might face, then they had the right to be prepared for it. “You need to know the status of a place so you can inform your conduct,” she argued.

Just so we know

The advocate representing Right2Know campaigners, Steven Budlender, had earlier complained that his client was only asking for the names of the places not the addresses.

In any case, he added, it would not make a difference to the country’s security if places like OR Tambo International Airport were publicly known as national key points.  This is because, Budlender said, the “dark forces” that the minister’s counsel feared would inflict harm on the country do not need to be told that a place is important. They would already know.

He was responding to argument made by counsel for the minister of police who said that revealing which buildings and places were NKPs would place national security at risk. “This does not stand up to logical scrutiny”, said Budlender.

Judge Sutherland said minister Nhleko’s refusal to release the list was unlawful and unconstitutional, and ordered the ministry to pay the legal costs.   The matter will no doubt be tabled for discussion in the next parliamentary session by which time it will be even clearer what the realtionship  between President Zuma and Parliament will be after his State of Nation Address.

Maybe appeal

However, debate at parliamentary committee working level will now be at a different level in the new session . The facts are there and what was fog in a bucket is now in the open for proper debate.

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Energy gets war room status

Cabinet creates energy crisis committee…..


eskom logoIn retrospect, for the cabinet having had to resort to establishing an energy war room is probably a good thing inasmuch that a meeting of minds appears to have taken place at all levels of the ANC Alliance on energy matters. The situation is indeed serious.

The message from business and industry that the “energy crunch” is not only immensely threatening to the economy appears to have got through, accompanied probably by the realisation that so many regular failures, power or otherwise, are threatening to the ability of the ANC to stay in power.

Foggy outlook

Perceived at first as an issue mainly affecting the rural poor, the failure of Eskom to deliver on most of its promises; the bumbling of the department of energy on independent power producer parameters and the to-ing and fro-ing of cabinet on the adoption of nuclear energy into the energy mix, has been somewhat of a pantomime.

For months we have been reporting from Parliament on the ambivalence of Eskom and the reluctance of the department of energy and public enterprises to chart a course on energy.

The whole truth…

NA with carsHowever, what is a matter of concern is the fact that in all those lengthy power point presentations and detailed reports to parliamentary committees that we have witnessed or read, the ball has been completely dropped on the energy issue and badly so.   At the very least Parliament were not given the full facts, particularly in the case of Eskom, thus threatening the parliamentary oversight process.

Deputy President Ramaphosa has now been designated to oversee the turnaround of SAA, SAPO and Eskom. The cabinet statement says regarding this, “Working with the relevant ministries, SAA will be transferred from the department of public enterprises to national treasury. The presidency will closely monitor the implementation of the turnaround plans of these three critical SOCs that are drivers of the economy.”

Maybe next year

It is comforting therefore to some extent to know that such a “war office” has been established and that cabinet has adopted a five-point plan to address the electricity challenges facing the country but it just seems incorrect that a relatively empty, tired statement such as “more cross cutting meetings to meet the challenges facing  the country will be adopted” was all that could be added in the form of action before ministers disappeared for the Christmas recess, including, we understand, the contractor’s staff at Medupi.

elec gridIt seems that nobody is in charge over the same period nor interested enough to be there and nobody is really looking much beyond January 15, when South Africa starts switching on again.


Perhaps in 2015, some reality will return to South African politics and amongst the governing party. They may learn that there is a direct relationship between being in power and keeping the power on and we foresee many more direct confrontations on this issue and others in Parliament during the coming year.



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Home Affairs gives reasons for visa changes

Security paramount….

south_africa_home_affairsDuring a briefing to Parliament on the revised Immigration Act, the department of home affairs (DHA) said the new regulations calling for visitors applying for permits, visas and immigration applications to do this in their own country before leaving for South Africa was a necessary change in procedure in order to protect the interests of this country.

DHA reported that while it was committed to facilitating the entry and exit of legitimate travellers in an efficient and humane way, it had be remembered that the department had a constitutional mandate to defend the country’s sovereignty, security and public safety.

All immigration decisions were therefore based on an assessment of risk and South Africa faced a multitude of risks ranging from international criminal syndicates smuggling drugs or trafficking people to laundering money and the export of protected species, it was said.

Transparent borders

Mkuseli Apleni, DG of DHA and deputy DG of immigration Services, Jackie McKay, told members of the portfolio committee on home affairs that any country’s borders started at the exiting point of a foreign country and consequently there was a need to cross check that any person who applied was indeed the same person who entered the country.

Far too many persons were arriving in South Africa claiming asylum, they said, whereas they were already asylum seekers from another country or worse had arrived with their lawyers to fight a case for entry. Also too many people were extending their stay after visas and permits had expired and then applying for residence status.

A paradigm shift was necessary, Apleni said. “There is no intention of damaging the economy or hurting tourism or anything else. All changes had been researched and best practice immigration processes copied from other countries.”

SA presence abroad?

Consequently, in terms of South Africa’s presence in countries with investment opportunities, he said, “there was a move to extend the footprint of the department”. He quoted China, India and other BRICS countries as examples. He said the department issued some 600 000 passports annually to citizens who wanted to travel out and this year some 13.5m foreign nationals came in.

Abuse of the Refugees Act was also rife, Apleni said, “with over 90% of applicants only seeking economic survival”. The previous “tick-box approach to compliance” was not an effective way screening of applicants in having to contact the departure countries, especially if they were already in South Africa.

He said there was a flow of bogus asylum seekers who sought to acquire legal status through a marriage of convenience and many also acquired fraudulent identity documents after arrival in South Africa from an extensive network of domestic illegal suppliers.

The whole existing process as it stood had led to the extortion, abuse and exploitation of migrants, McKay said. Many who were found to hold fraudulent document obtained in SA or no documents at all could thus be coerced into crime.

Visa, by any name….

Apleni said mainly as a result of local and domestic demand from other state entities, the Immigration Act had been amended to refer to all categories of temporary residence permits as visas, thus making clearer the distinction between short stay visas and longer term or permanent residence permits.

All new applications for visas must be made at DHA missions abroad. These had to be in person, he said, and “biometric verification of credentials established prior to arrival in South Africa”.  He added that any changes in status or visa terms and conditions would also not be permitted from within SA and study visas would be issued for the duration of the studies, not year- by-year as had been in the case in the past.

As far as business visas were concerned, any “prospective business venture that enhanced the national interest and which was put forward as part of the application” would be processed by department of trade and industry (DTI) in terms of business feasibility, Apleni said.   Compliance with domestic labour laws, HDSA matters and the benefits to the SA economy would be looked into.

Minimum investment number

As far as new ventures were concerned, the investment minimum sum had been raised to R5m in consultation with DTI.   A list of undesirable businesses, not encouraged for business visas, had been published.    Intra-company transfer work visas were to be for four years instead of the current two.   Any person who overstayed their visit would be listed as an undesirable person and prevented from returning to SA for a certain period of time.

Apleni said that bearing in mind the new Employment Services Act, the quota and exceptional skills works permit system had been changed to a system of visas for needed critical skills. Critical skills had been published in June 2014.

Thorny issue

There were some major changes with youngsters on study tour for the duration of the degree only, he said, and persons travelling with a child must be in possession of an unabridged birth certificate and a consent affidavit from the parent or parents of the child authorising the person to travel with the child. There were about two million children travelling per annum, Apleni said.

(In recent weeks, a temporary relaxation on this demand has been given. Go to:

In response to opposition claims that the new regulations were affecting tourism adversely and severely, Apleni argued that horrors of child abduction could not be countenanced and the changes were part of worldwide practice which travellers were getting used to.

McKay also added the delays in obtaining unabridged birth certificates for SA citizens only applied to “past births” because, he said, the current law for some time was that births had to be registered within thirty days as distinct from the past when some births were not even registered at all.  Now, if the right certificates were produced, the necessary document was issued “on the spot”.  Delays if birth certificates were missing could not be avoided, he said.

Not liked

Opposition members disagreed with DHA on the raising of the minimum limit for business ventures as “counter-productive” and not in line with developmental targets.

They still maintained that the new regulations  regarding the necessity to obtain visas in countries of origin were bad for tourism.   DHA responded that, in the first case, the new system protected better local small business which was a government priority to encourage. In the second case the new rules were the same as many other countries and also avoided difficult situations arising at South Africa’s ports of entry.

Refugees and asylum

In explaining the “first country rule” in terms of the Refugees Act to parliamentarians, DHA said that when a person fled his or her own country it was assumed they would seek refuge in the first safe country in which they arrived.  In terms of humanitarian norms and in terms of the Act, this was acceptable as a condition of asylum being granted.

But DHA said that what was happening was that some potential immigrants were “making a beeline to South Africa” for asylum wherever they came from.  As South Africa did not have an encampment policy, “refugee camps further north were being emptied”, Apleni said and asylum seekers coming to South Africa in the light of this country’s liberal conditions at law.

Consequently it was now also a condition to establish whether the person concerned had refugee status in another country, he concluded.

ANC supported the regulations as they stood and urged early implementation but opposition members voiced the belief that the proposals needed to be re-studied because of unintended consequences as worded.


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Nkandla vs NDP: the argument rages


Has the emperor got clothes on?….

Whilst the nation focuses on the Nkandla issue, which has now involved to a lesser or greater extent the parliamentary process on the subject of who reports to who in terms of the Constitution, the largest elephant in the room still remains. This, of course,is how far the ANC will go to protect President Zuma in terms of the law, aside from the Constitution.

Accordingly, we have not monitored the issue further until the subject once again reaches the level of parliamentary committee debate.

Nevertheless, there still remains a smaller elephant in the room. Whilst this issue does not reach the media in the same way, it concerns business, manufacturing and industry to a far greater extent than the Nkandla issue.

Reality check

This smaller elephant concerns the ever-present issue of how to create more jobs in South Africa.  It also concerns the manner in which South Africa goes about achieving the noble aspirations of the National Development Plan (NDP).    Meanwhile, unemployment has now reached a record 45%.

MPs across party lines are of two minds on this. There are two distinct camps of thought developing on these subjects and attitudes are hardening on which approach should be taken.  Firstly, to put it in question form, are the state utilities really the controllers of our destiny and will a massive infrastructure spend by state institutions alone, with emphasis on black procurement, turn the economic corner as far as jobs are concerned?

Or, is the answer to create a very much more enlightened environment for investors on the basis that we need their money and is this sufficient excuse to play down some more investor-unfriendly legislation and regulatory red tape and a place less emphasis on BEE with its sad and long history of black non-empowerment?

Problems, problems

In every parliamentary committee meeting one can sense this philosophical and ideological problem.   Indeed, if this is not the commercial and industrial elephant in the room, it is the dichotomy that ANC whips have to handle on a daily basis and work hard with every party MP involving strong messages coming down from Lithuli House.

Witness the confusion of the power of African traditional leaders, which clearly emanates from the President himself; the necessity to bulldoze through certain unworkable legislation on transformation which then gets returned to Parliament on good legal advice; and the fight between finance minister Nene to suck in more for the fiscus to finance social welfare and health budgets with ridiculous customs and excise tariffs at the expense of the national deficit.

Stay positive

mantasheWe cannot comment, only observe, but somehow we believe that many of Gwede Mantashe’s more obtuse observations do not represent all of ANC parliamentary thought patterns.   We sincerely believe that within the governing party machine and with added well-tuned opposition, there will follow a sensible compromise in order to survive.

We also believe that it may be discovered by adherents that the emperor may not have clothes on, despite what the praise singers say, and that also, and more importantly, a good investment climate can be balanced with social imperatives.

Hof Communications

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Private Security Industry Bill gets more criticism

Private Security Bill awaits assent…

Bill is like scoring an SA own goal, say many…

security industryThe Private Security Industry Regulations Amendment Bill, tabled in last year’s parliamentary sessions by former Minister of Police Nathi Mthethwa and now sitting with the President Zuma for enactment, has been the subject of an outcry from a number of sources including legal experts.

When the Bill went to a vote in the National Assembly, the main opposition voted against the Bill, not on the basis of short comings in the security industry but that the Bill, in itself, with its call for the state to be able to fall back on law enabling it to acquire majority holding in a private business, sent the wrong kind of message to the investment world.  They said, “the smell of expropriation was in the air”.

Offending clause

American Chamber of Commerce in SA (Amcham) has now also urged government to remove the clause in the Bill that requires that 51% of foreign owned security companies be handed to South African citizens.

Who the South Africans are that will receive this largesse remains vague, they say.

amcham logoSays Carol O’Brien, Amcham’s Executive Director, “This Bill has sent a chill through those investing and future investors. The line given out by the authorities is that these companies collect intellectual information which can be used against the South African government is hard to believe since the  law as it exists demands that the leadership of security companies must be South Africans.”  Also, she adds,  the vast majority of employees are also South Africans.

Investor damage

O’Brien points out that the foreign owned portion of the security industry only makes up 10% of the security industry as a whole in South Africa.   “Our concern goes further; this clause will violate important international trade treaties (GATT and GSP) and may put the renewal of AGOA for South Africa at risk.  We urge government to withdraw this clause before it does any further damage to investor perception of South Africa” .

Minister Mthethwa told Parliament when he tabled the Bill last year that a review of past anchor legislation for the industry was undertaken to “address gaps that are caused by the lack of effective regulation of the private security industry and added to the surprise of opposition members, “in particular, the threat to national security posed by the participation of foreigners”. He went no further, nor would his department under questioning by opposition members.

Bill hammered through

The controversial clause in the bill proposed was the result, he said.  Opposition members were convinced the offending clauses would be overturned before the Bill was voted through in the National Assembly.   This was not to be the case.  The ANC used their hefty majority to push the Bill through at the last minute before Parliament closed.

Minister Mthethwa never amplified on his remarks whilst in office and new minister of police, Nkosinathi Nhleko, has remained silent on the issue.

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No moves on new Private Security Industry law

President’s signature still needed….

The Private Security Industry Regulations Amendment Bill, tabled in last year’s parliamentary sessions by former Minister of Police Nathi Mthethwa and now sitting with the President Zuma for enactment, has been the subject of an outcry from a number of sources including legal experts.

Now the Security Association of SA (Sasa) itself has again voiced its dissatisfaction should the Bill be signed into law.

When the Bill went to a vote in the National Assembly, the main opposition voted against the Bill, not on the basis of short comings in the security industry but that the Bill, in itself, with its call for the state to be able to fall back on law enabling it to acquire majority holding in a private business, sent the wrong kind of message to the investment world.  They said, “the smell of expropriation was in the air”.

Industry needs more regulation

Sasa itself told the parliamentary portfolio on police in hearings last year that many of the regulations as proposed were acceptable, since the industry in many instances was in dire need of compliance standards and rules.   However, forcing foreign owned or part owned security companies, whether they comprise only 10% of the security industry or not, to sell 51% of their shares to South Africans was not acceptable, they said.

Mthethwa told Parliament that a review of past anchor legislation for the industry was undertaken to “address gaps that are caused by the lack of effective regulation of the private security industry, in particular, the threat to national security posed by the participation of foreigners”. He went no further, nor would his department under questioning by opposition members.

No foreign majority control

The controversial clause in the bill proposed was the result.  Opposition members were convinced the offending clauses would be overturned before the Bill was voted through in the National Assembly.   This was not to be the case.  The ANC used their hefty majority to push the Bill through at the last minute before Parliament closed.

Minister Mthethwa has never amplified on his remarks about the foreign owned portion of industry “posing a national threat to security”, it being pointed out at the time that the total number of persons employed in the private security industry probably exceeded by double the number of those employed by government in defence and police.

Industry representatives at the time shrugged this off as being the result of growth in the industry exponentially as a result of the the failure by government to police the country satisfactorily.

Still objecting

Sasa has now made its voice heard once again, calling on the President to return the Bill to Parliament for amendment on this subject; the reason again being stated that such a law would find itself in contravention of South Africa’s international obligations at law.

They have also pointed out that South Africa’s ratio of 2.57 private security guards for every one police office is not unusual and is comparable to the US and Australia.

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Private Security Industry Regulation Bill seen as unconstitutional

State call for Bill to counter “threat” not explained…….

It was during the parliamentary briefing on the Private Security Industry Regulation Bill and also in the police budget vote in Parliament, that past minister of police, Nathi Mthethwa, made the controversial remarks that foreign-owned private security companies were a threat to national security.

Consequently, said the minister at the time, the Bill before the House then being tabled made provision for the fact that all registered security companies had to be majority owned by South Africans.

private securityMinister Mthethwa, now minister of Arts and Culture, said “the growth of the private security industry in South Africa has outstripped other countries” and it was because of this sudden growth, he said, that the industry was not either properly regulated nor was it properly monitored.    The Bill outlined the kind of regulations that were to be imposed if it were passed amending the principal act accordingly.

The ministry in question has now passed to a new minister in the fifth government, Nkosinathi Nhleko.

More regulations on weapons

Subsequently, the department of police in presenting the Bill in detail to Parliament, said that because of the large number of people that the private security industry employs – many of whom are armed – it was important that the industry should be well regulated.

The Bill clearly made provision for the fact that “foreign control” of security companies could not be allowed and that majority of shares must be in the hands of South African citizens.

Consequently the issue mainly debated by parliamentarians was on the subject of regulations, particularly on firearm controls and registration of companies, since the subject of the industry being a “threat” was outside of their mandate without a proper briefing.    Repeated requests for this were ignored.

Nobody listening

Attention was drawn by opposition members of the other “threat”, the threat to investment in South Africa.    As far as the department of police was concerned and the ANC, matters regarding FDI fell on deaf ears.

When the Bill went to a vote in the National Assembly, the main opposition voted against the Bill, not on the basis of its short comings in the security industry but that the Bill in itself sent the wrong kind of message to the investment world.  They said “the smell of expropriation was in the air”.

Too many former military

In 2012, the Green Paper on Policing also referred to this threat when it expressed concerns about the private security industry’s “ability to destabilise any security situation”.  It quoted the involvement of “former military and police officers at management level” and the deployment of “highly trained, legally armed operatives” in the industry.

As pointed out by industry representatives, the Green Paper also contradicts itself by stating it was difficult to see how these companies can be seen to undermine the state’s law enforcement power. The Paper also stated that the private security industry was “increasingly performing functions which used to be the sole preserve of the police.”    This maybe is where the problem lies.

During hearings on the Private Industry Security Regulation Amendment Bill, it emerged that there are 445 400 registered active private security ‘guards’ in South Africa, which, as the Pretoria News pointed out, meant that private security members far outnumbered the 270,000 public servants in security. This is the number that includes those working for the South African Police Service and the South African National Defence Force, the newspaper said.

Minister makes an assumption

Meanwhile the minister also argued in his parliamentary presentation that the growth of the private security industry in South Africa “had outstripped other countries”.  It has subsequently emerged that this is not the case, according to reports in the media and that less than 10% of the local private security industry is foreign owned.

In response to the tabling of the Bill, members of the private security industry pointed out in parliamentary hearings, before any debate commenced, that the growth of their industry was directly linked to high levels of crime and violence, pointing out that private security companies have no special powers beyond those of private citizens.

Conflicting argument for Bill

In fact, on the issue of state security, the South African White Paper on Defence, in 1996, stated that one of the greatest threats to South Africa were socio-economic problems leading to a high level of crime and violence.

On the issue of “foreign control” it is now left to the new government and specifically new minister of police Nkosinathi Nhleko orNkosinathi-Nhleko deputy minister Maggie Sotyu, to explain the real reason behind the controversial clause in the Private Security Industry Regulation Amendment Bill and then to enforce regulatory changes.

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DA’s Crucial Infrastructure Bill tabled on security

Crucial infrastructure points re-interpreted….

Lindiwe Mazibuko A draft Bill known as the Protection of Crucial Infrastructure Bill, has been tabled by DA opposition leader, Lindiwe Mazibuko, and presented to the Speaker of the House for debate.   It deals with the issue of key points, which emerged during the Nkandla scandal.

Whilst the Bill lists some ten issues it wishes to set as objectives, including the establishment of an independent crucial infrastructure board to create a register of areas declared as “crucial infrastructure”, the main point of the Bill becomes amplified by the final objective which states “to repeal of the National Key Points Act, no 102 of 1980 and related legislation.”

It is this legislation which the minister of public works and the minister of police both quoted when asked questions on the construction of the state president’s private home in Nkandla, Kwa-Zulu Natal.

A Private Members Bill may be introduced by any bona fide MP after submission to the Speaker for permission without reference to cabinet, Nedlac or any government department and may be tabled without a minister being involved.

Such a Bill would be subject to public hearings called for by Parliament before being debated by the relevant parliamentary portfolio committee.
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Private Security Industry Bill gets through Parliament

Minister of Police bulldozes Private Security Industry Bill....

adtThe highly controversial Private Security Industry Regulation Amendment Bill was passed in Parliament in a surprise vote in the National Assembly, despite the assurances of many that the governing party would accede to the suggestion that the Bill was neither in the interests of a South African investment profile or from the aspect of constitutionality.

The Bill, as passed, 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. Whether this will be challenged at constitutional level remains to be seen.

Police Minister Nathi Mthethwa told MPs earlier this was necessary in the interests of state security because “the line betweennatie mthethwa security investments and military establishments is blurred. Equally, private security companies are increasingly used in the field of intelligence”, he said. He said the need for the Bill rested entirely on this issue and the need exceeded any issue regarding possible disinvestment. He dismissed the possibility of complaints for disregard of a constitutional balance between commercial and security needs.

Threats to national security

A police “technical” team of intelligence experts reported on matters relating to foreign ownership, which had been, since the Bill was first tabled, the area hotly contested. The report read out raised the question once that despite the fact that no information could be handed out or could be reported upon, there were threats to national security and de-stabilisation of states by the private security industry which also involved intelligence activities and specific incidents.

Opposition DA shadow minister of Police, Dianne Kohler Barnard, was shocked at the vote saying that she had expected the minster to withdraw the Bill in the light of legal opinion and public sentiment.

Damaging to SA profile

She said that she had heard that as a result of the passing of the Bill, constitutional opposition had to be expected from the private sector because not only was the Bill damaging to South Africa’s profile as a country, which was supposed to be trying to encourage foreign direct investment, but that “it also reflected unclear thinking on the part of the ANC on how to treat its own marketplace.”

Minister Mthethwa seemed to exude confidence when he told parliamentarians that “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.   He brushed aside claims that companies would disinvest aside and said. “Indications are that when the time comes, they will comply with the law and not close down.”

tycoThe DA and the FF+ objected to and voted against the Bill on the grounds that it represented a signal to the investment world that expropriation of majority shares in a public entity by the state was possible.

The Bill, having now been passed by the National Assembly, went to the National Council of Provinces for concurrence, where public interception is not possible, and then for assent by President Zuma when it will become signed into law on a date published by gazette.
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Customs Duty Bill cuts out inland ports

Customs Duty Bill allows only for coastal ports…..

city deepIn dealing with the Customs Duty Bill, and its two tandem enabling Bills,  and talking to representatives of SARS and those advising them, there can be no doubt that SARS is working on the basis that current losses to the fiscus due to fraud and avoidance on matters regarding customs duty must be in the region of R4bn to R5bn, based on conservative estimating.  A weak link in the customs collection chain is cited as the line to City Deep and the terminal itself.

No official statement on an estimated figure however can be given, such issues are unproven and unquantifiable, they said, but if current SARS customs revenue is estimated this year at R50bn then a simple loss of 10% will produce such figures.

The massive Bill, drafted purely by SARS, clearly defines that the customs system in South Africa will change and customs clearance will have to be at a coastal port and that the present system of allowing uncleared goods moving to an inland port will cease.

Treasury going ahead

In responding to all the points made during public hearings, Kosi Louw, chief legal advisor, SARS, stated that it will proceed with its tabling on the basis that clear procedures for all stages of the supply chain are set out, monitoring of all stages are more easily monitored by SARS and that the increase in penalties are necessary.

A major concession allowed made by SARS is to include a “fallback” clause; in other words, if the new system imposed by SARS is found not to work or should fail in practice, then SARS would allow automatic reversal to the original situation; i.e. to allow inland ports. Kosi Louw said, however, that he was convinced that the new system would not only work but save the country a lot of money.

BUSA,JCCI opinions rejected

Most of the points raised by BUSA and JCCI were rejected by SARS in the light of the fact that the national interests that arose simply because of the vast amounts of revenue that were being lost to the fiscus. The new Bill brought about few changes in the trading positions of both importer and exporter, they said. 

SARS is insistent that it does not wish to close inland ports, stop container flow, congest the ports or discourage the use of rail or disrupt legitimate trade. However, now that so much digital flow of information is in the form of electronic transmissions rather than paperwork, it is time for SARS to undertake better risk assessments, Louw said, asking for more information that can be easily provided and to provide earlier information to traders and stakeholders so as to plan their supply chains, working on a basis of 1-2% interventions representing investigations.

Goods cannot continue to move purely on the basis of a manifest to an inland port, such manifest not containing tariff, value and origin to determine risk, they said. Thus with no manifest, the goods must in future be cleared by the importer at coastal locations and goods imported by them, not the supplier. Liability therefore becomes an importer’s issue as the ship docks.

Importers will have to pay from port

On the JCCI issues raised that traders will have to change their contracts of sale; sellers will be reluctant to sell goods under the new terms; importers will be badly affected and that delays and congestion will occur at ports, SARS has rejected all these points.

On the issue of CIF determinations, supply contracts and bills of lading, SARS confirmed that they had taken legal advice from Prof, Eiselen, a trade law expert; a maritime law expert, Adv Pammenter SC and Adv, Joubert SC, a customs law expert and no process of importation will be affected at law, they were advised.

A problem was ‘grouping” where say five parties shared a container to import goods where they could not fill a container alone. All five must submit customs clearance forms at coastal points and if one member of the grouping had a problem, then the whole container would be stopped, said Kosie Louw but this only represented 1% of all containers used, they noted.

WTO isues raised

On the issue that JCCI raised that the new Bill was in contravention of World Trade Organisation (WTO) treaties, SARS disagreed, They were party to the discussions with WTO and it is quite clear, they said, that any importation was subjected to national regulations imposed.

The moves in South Africa followed similar moves in Canada, the UK and Russia where specific information is now obtained. Where long distances by road and rail to inland bond points occur, enormous losses to the fiscus in those countries were occurring. The losses at City Deep, Johannesburg, are as high as 26%.

Penalties after three days

Three days are required for a clearance of goods that arrive by ship and penalties will arise after three days.

The implementation of such changes will be delayed by 12 months once the Bill is passed and “a clause will be inserted to allow for consideration of unintended consequences”. Freight forwarding associations and ship operators and their agents also supported the Bill, SARS said, as did Transnet.

In conclusion SARS said that they cannot allow the movement of goods to such a points as City Deep without proper information, such systems now being purely electronic moving from any manual paperwork.

In answer to questions, Louw said that customs control officers at the port no longer would make the decision whether or not to allow through a container. The containers themselves would be cleared or would not be cleared by the new electronic system that received the importer’s information, even interventions would be instructed by the system.

Under questioning, SARS repeated that the seller’s risk ceases at the point of loading the ship in a foreign port after CIF is paid. The only thing that will change is that there is no manifest to clear goods required but a new customs clearance procedure at point of landing by ship at the SA coast or at a border. The first stage of clearance will be in advance, or provisional, and a final release then issued.

SARS convinced that fiscus losses paramount

Finally, in answer to the question as to whether SARS felt that the Bill would damage in any way South Africa’s trade relations or trade figures, SARS denied that it would. It was “just a question of SARS getting better and smarter in the fight to raise more for the fiscus”. The whole system was predictable for all parties, Kosi Louw said, and all carriers have said it will make no difference to trade.

There was no change to the legal status of inland ports, SARS, said. Final rules and regulations can only be issued once the Bill under debate was passed but at this stage the Bill looks set for final approval. Refer previous article in this report.

There is no doubt that all three linked Custom Duty Bills will be passed before Parliament closes
Earlier articles on this subject:

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Equity quotas court ruling affects BEE legislation

Employment equity quotas as numbers only struck down….

On equity quotas, the Employment Equity Act, as anchor legislation, and thus the recently approved Employment Equity Amendment Bill, has come under query as a result of a recent case heard in the Supreme Court which has found the Act is in default where numerical formulas only are applied to racial quotas in order to comply with regulations.

In fact numerical quotas are illegal, said the Court. In dealing with case before it, the Court found that this had been applied, the appellant failing to achieve an appointment based the fact that racial quota targets had been applied in terms of black empowerment legislation.  The defendant was the minister of police.

The court further found the Act in contradiction of itself by being unfair if it regulated itself to achieve employment equity with just numbers, as distinct from “preferential treatment and numerical goals” being applied, as has been applied in government circles elsewhere.

A whole host of applications applied by many government departments would therefore seem to be in contravention of the Act, since many departments rigidly use number quotas to achieve equity targets across a wide range of the public service.

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SAPS still trying to computerise

SAPS still on the edge of IT development…..

The South African Police Service (SAPS) reported to Parliament that slow progress is still being made towards electronic police dockets in police stations but cabling and bandwidth still remain major problems. This was said by Lieutenant General Schutte, deputy National Commissioner for finance, who told members of the relevant portfolio committee that SAPS had badly under-spent their budget so far this year.

He and the commissioner of police, General Mangwashi Riah Phiyega, were reporting on the first financial quarter of 2013/2014 and General Schutte said the hope was to eventually roll out “e-docs” as a public process at police stations in conjunction with interface with the whole process of the criminal justice system in IT terms.

Budgets awry

However, Annelize van Wyk, chairperson of the committee, told both the commissioner and the general that this had been envisaged for some twelve years and it was time something actually happened with regard computerisation of the police force. She noted that that the SAPS report reflected under-spending in last year, where more than half a billion rand was returned to Treasury and that the use of consultancies was 140% over budget.

Commissioner Phiyega responded that this had already been partially corrected in the first quarter under review and the question of e-dockets was her primary concern. She said that the contract to start the process in the form of pilots, training and research into system possibilities had only been awarded half way through the last quarter.

Lawyers eating up consultancy fees

General Schutte clarified the extraordinary figure of R204m for legal claims against SAPS of R204m by explaining that in police accounting terms, the expression “legal claims” included all legal costs where legal advice and action was sought including the cost of state legal officials, the main expenditure being with the state law service who charged for their services. The issue of liabilities for claims outstanding was not raised or discussed.

Commissioner Phiyega said she was now receiving a monthly report on litigation matters on a monthly basis and said that “whilst police actions will always be accompanied by a certain amount of litigation against the service” she admitted that there were concerns at top level on the behaviour of some officers in the field and that she was conducting an ongoing campaign to reduce this fault including better training.

Out of control

Parliamentarians called on the minister for comment on the whole issue of unlawful arrests which appeared to be out of control. The commissioner said she was aware of the figures but she also said that at the same time SAPS themselves were conducting an investigation and starting a register of certain legal services where cases in particular were occurring with the same legal practioners, in the same provinces and towns on the same type of cases and where the same legal outcome was continually occurring.

On the R17.4m bill that SAPS had incurred over the Jackie Selebi case, the commissioner said she had referred this matter once again for legal advice on the issue of payment by SAPS and she would make a decision in the months to come. She had been asked by MPs whether SAPS were to “write this sum off”.

Public works at variance

The commissioner reported on the poor relationships with the department of public works who were responsible for the building of police stations and major maintenance issues. She said that the impossible situation had arisen where a police station in a poor state of repair had to work its way through a lengthy government process with public works before it could even be re-painted.   SAPS in some cases, she said, had taken to building its own police stations.

General Schutte gave figures on expenditure to date on administration, visible policing, detective services, crime intelligence and protection and security services and told parliamentarians that the current strategy of SAPS was to reduce serious crime; to install a more effective criminal justice system; to reduce corruption; to improve the public’s perception of SAPS; to ensure the safety of South Africa’s borders and combat cyber crime.

Spend on salaries big

The biggest spend remained salaries and wages, comprising 70% of total budgeted spending with the biggest variable remaining goods and services; which included fuel, oil, small tools and equipment, travel, subsistence, communication equipment and uniforms.

Office accommodation, the commissioner reported, was now in line with normal trends and the two main projects, the “revamps” of the criminal justice system (CJS) and the integrated justice system (IJS), were now monitored by national treasury, the minister reported.

Chairperson van Wyk noted that SAPS sometimes had to build their own police stations in order to provide service delivery to some areas but it “was common knowledge”, she said, “that in this case it cost three times more that the public works cost and three times as long”. She said the relationship between the department of public works and SAPS had to be improved and concluded that Parliament was to look into this.

Refer previous articles in this category

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Business Interests Bill to control corruption

Bill exposes level of state corruption…..

Lindiwe MazibukoA Private Member’s Bill has been tabled in Parliament in an attempt to control state tendering corruption by Lindiwe Mazibuko, leader of the opposition, entitled the Business Interests of Government Employees Bill; a private members bill being an unusual procedure but perfectly acceptable in terms of the Constitution. The Bill gives as its background the seedy position in a number of government departments regarding government tendering processes.

The Bill, emanating from an MP and not the minister of a particular department as is usual, will have public parliamentary hearings in the course of public procedure but no departmental call for comment, although in this case the Bill is very much in the sphere of Lindiwe Sisulu, the public service and administration minister.

Going for the kernel

The Bill is hard hitting both in its language and its intentions and does not disguise the fact that it is specifically aimed at corruption and cronyism in the public service. In fact, it is so lacking in subtlety of wording one wonders if Lindiwe Mazibuko took it upon herself, in conjunction with the Speaker of the House (who has to be consulted before any private member’s Bill is accepted) to do something that the minister could not do without a palace revolution in her own department.

The minister, Lindiwe Sisulu, has been saying for some time that legislation might be one of the courses of action to be undertaken to fight corruption in public administration.

Lighting a fuse

The truth of the degree to which co-operation has been employed in the tabling of this Bill will no doubt come out in the portfolio committee debates during the passage of the Bill when the level of opposition can be measured, added to which there maybe, who knows, some submission from government departments in the hearings and from submissions, which have been called for since 13 June.

However, nobody will be able to disagree that something like this Bill is badly needed to stop the slippery slope of corruption that has become embedded in the South African public service. To stand against this Bill would be a difficult posture to adopt.

Govt employees only 5% interest

Basically the Bill demands a prohibition on any public servant or member of his or her family to hold more than a 5% interest in any entity that does business with the administration. Unfortunately, the Bill cannot be applied in retrogression as these are grounds found unacceptable constitutionally but public service employees around the country could be obliged to sign affidavits disclosing the extent that any members that they or their families have in an entity that conducts business with government, such affidavits having to be signed at prescribed intervals.

Similarly, those wishing to do business with government will have to sign a similar affidavit disclosing any interest that a government employee, a member of their family, may have in the entity tendering. Failure to comply will result in cancellation and a claim for damages and discipline against the family member concerned in public service.

Who is “family”?

The objects of the Bill state that the purpose is to stop the undermining of the quality service from government by public servants who are “inappropriately benefiting from government tenders”. In the definitions portion of Bill, which is no longer a draft as described in the media,  a “family” goes no further than siblings but all forms of marriages and unions are described.

Unusual listings

The background to Bill is most revealing and puts the facts up front for any debate on the Bill:-

*50% of Free State government contracts had been awarded to government employees or their immediate families, with 191 government employees benefiting from contracts worth R133m.

*In 2010, it is estimated that R624m of state money went to persons with direct links to public servants, to public servants families or persons with links to a spouse.

*R45m has been lost by the Easter Cape Health department due to irregular contracts with public servant family members.*A Special Investing Unit probe has revealed that close on 9,000 department of health officials are directors of a company and 1,000 of these openly to do business with the department, the report showing that R42.8 m had been paid to 235 employees.

*Over 3,314 employees of the department of education had engaged in business with the department in the past two financial years earning a combined R152m. Of these employees, 2,438 were teachers.

Only the brave…

The litany of horror continues and consequently, to object to the Bill would be to deny the facts. However, the implementation of such a Bill and to ensure its application at all levels will be the test and no doubt this is where the Bill may flounder.

The minister, it is proposed, may waive the 5% limit after considering an application by an employee. Consideration will also be given to the nature of the goods, adverse effects to the state if the tender or contract refused and possible adverse effects to the employee under certain conditions, but again such decisions must be taken by the minister.

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Justice changing face of small claims courts

Small claims courts doubled…..

legalDeputy Minister of Justice and Constitutional Development, Mr Andries Nel, in his budget vote speech, gave an update on small claims courts in the country, stating that there were now 277 such courts as distinct from 120 in 1994 mostly in white and urban areas.

He told parliamentarians in the portfolio committee on justice that this meant his department was now more than half way in achieving the objective of having one in each of South Africa’s 393 magisterial districts countrywide.

These courts, he said, eliminate time-consuming adversarial procedures before and during the trial thereby providing speedy and cost effective justice, especially for the poor, he said, and a further nine had been established in June 2013.

Judgements made vastly increased

The number of people enjoying the benefits of access to justice through small claims courts “has increased steadily from a period in 2008 when 95,569 new cases were registered, 47,168 summons were issued resulting in 38,257 trials and 22,397 judgments and 9,405 out of court settlements”, he said.

“Meanwhile, the number of summons issued has increased by more than 21,137 to 68,305 and the number of trials also increased by more than 11,788 to 50,045.  Most significantly, the number of judgments jumped by 62,3% to 36,368 and the number of out of court settlements by 102,9% to 19,087.”

What is also notable, said deputy minister Nel, is the number of commissioners presiding over small claims courts and these have almost doubled in the past four years from 811 in 2009 to 1,546 currently. “However, this comprises 1,314 men and 232 women” and he added that serious attention is being given to the gender imbalance.

Equality court system running well

He also mentioned equality courts dealing with racism, sexism, xenophobia and related intolerance under the Promotion of Equality and Prevention of Unfair Discrimination Act, every high Court and magistrates court being designated as an equality court, 619 matters being dealt with for the 2012/13 financial year.

Deputy minister Nel also noted a “dramatic story of transformation” in the sheriff’s profession. In 1994 there were 475 sheriffs. An overwhelming majority of 400 were white men and there were only 40 African men who were located mainly in the so-called homelands

“In 2012 this picture started to change significantly with the appointment of 124 new sheriffs, 64 who were African. A further 120 vacant sheriffs posts will be filled by the end of June this year”, he said.    He thanked the South African Board for Sheriffs under the leadership of Mrs Charmaine Mabuza “for their good work”.

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All not well in the trucking industry

Call that corruption exists

trucksIn answer to a call made by the portfolio committee on transport on the state of the trucking industry in South Africa, it became evident from responses by the department of transport (DoT); from the Road Freight Association (RFA) and examples given by an independent small operator, that large truckers dominated in an industry in an unfair manner that was rife with corruption.

Mawethu Vilana, deputy director-general DoT, said that going back to 2002/3, the department had begun an exercise to look at how to provide opportunities and also broaden the space for participation by smaller operators in the road freight sector. It became clear that smaller entrants lacked finance; that an “unscrupulous broking sector was part of the industry” and generally there was a lack of skills and know-how in the trucking industry generally due to poor provision of training facilities and an industry which was undercapitalised except but a few large operators.

DOT not playing proper role

Vilana admitted that when it came to black empowerment opportunities, the main player was the department of trade and industrydot logo (DTI) and not DoT, DTI having the BEE verification control system in their court, DoT playing virtually no part in either reform of the industry or the development of SMME’s.

On the subject of crime, little could be done about bribery and corruption, Vilana admitted under questioning by parliamentarians, unless legislation was beefed up with proper powers and a full, properly constituted investigation carried out into the industry.

Road users must pay

roadsHe also admitted that permit fees were high because of the principle of “user pays” which had been adopted by government “since road truckers caused great damage to the road system.”

Gavin Kelly, RFA said his association had 385 members, with 109 affiliates and 40 associates representing different levels of possible enforcement and ability to develop skills and training but complained of massive permit fees (the last being 412%); large levels of corruption amongst government officers and no value being added by the government’s road agency to the industry in general.

RFA also stated that there appeared to be no proper government road freight strategy and single government officials determined policy without ministerial approval.    Kelly said “no real consultation exists between the state road agency and the industry” and it was the RFA view that DoT “was just going through the motions.”

Trucking group says market closed

One medium sized operator, Tramarco, said that despite heavy investment in trucks and bearing in mind the “ever rising price of

tramarco site

tramarco site

fuel”, it was almost impossible to break into the transport business to obtain long-term “tangible” contracts from major mining groups and state utilities.   They appeared to feel “safer” using old contacts and larger companies and quite clearly favours were being granted, they said.

Their spokesman said that the entire industry was dominated by a number of large trucking groups and smaller entrants were effectively “locked out” of the industry because the industry was either not regulated properly.

AARTO somewhat dubious

They also said the licensing AARTO system was not working properly; there was a lack of legislative enforcement; too many corrupt officials had too much power and there appeared a lack of interest by large companies generally to uplift smaller operators, little interest in encouraging training and building the trucking job market.

Tramarco said that no favours or finance was called for by the medium and small sized companies but merely a fair chance to compete for tenders.   They called on government to provide leverage within its own government departments, state utilities and with industry to break up monopolistic habits and encourage more black empowerment opportunities.

“Large groups and utilities make lots of statements on freeing up the market but nothing happens”, Tramarco said.

MPs demand better skills development

MPs demanded of DoT that concrete steps be taken to assist small entrepreneurs and to provide proof of a record in the area of skills development. “It was clear that little had been done by the DoT in this area”, said one ANC member.

Opposition members said they were convinced that DoT “had no meaningful understanding of what the situation was on the ground.” One MP said the City of Cape Town had provided a solution by cutting the bigger contracts into smaller parts, supplying smaller quantities and increasing the number of entrants slowly. He called on DoT to start thinking of similar solutions on a national scale.

Roads to nowhere

Ruth BhenguChairperson Ruth Bhengu told DoT that the meeting had been called because an examples had been given to parliamentarians whereby “large companies gave small companies short-term contracts and rates that would not take them anywhere and businesses that were desperate could not only pay for their trucks but could not maintain them, the business going ‘broke’ as a result”.

There was also an immoral business broking sector emerging, she felt.

Vilana of DoT said there was nothing government could do to protect such entrepreneurs and that this was the nature of the industry which was high capital risk with a road system that was deteriorating.

The committee found this all very unsatisfactory and called for further meetings with DoT stating that these matters had to be resolved and that the challenges facing the trucking industry were to be investigated further. Also cross-parliamentary meetings with public enterprises and trade and industry committees were to be called. DoT was told it would be re-called for further reports.

Further archived references

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A more confident Denel reports to Parliament

Coming right….

Riaaz SaloojeeIn a report to parliamentary portfolio committee on public enterprises, Denel’s chief executive, Riaz Saloojee, gave a clear indication that Denel’s fortunes were changing for the better as a result of a R1.85bn guarantee from government; a continued contract with Airbus to construct aircraft sections and all of this despite the cancellation of a long-standing SAAF maintenance contract due to state budget restraints.

Denel says it has been through significant restructuring processes and the result is now a more coherent situation, he said. “There were recently seven Denel boards, there is now one.”

Product line-up

Saloojee said a “sustainable profit picture was emerging in the long term “and good progress was being made on the Hoefyster a darter(armoured vehicle transporter) project, ground to air defence systems and the A-Darter air-to-air missile project was now starting, all of which represented great future possibilities.”

Vehicles for de-mining purposes play a large part in the development plans at Denel, parliamentarians were told. Saloojee said that Denel had a Malaysian contract, which was a three to five year programme and also a long term contract with the UN for de-mining, both of these with the participation of a high level of Denel personnel and staffing.

airbusIn general he said, “80% of the losses on the past were as a result of the aero structures business of Denel“but clearly there is a turnaround here after the arrangements with Airbus.”


BRICS helps

Saloojee commented on aspects regarding arrangements with the Brazilian armed forces “which were most successful” and that “helicopter maintenance with the Russians is going well”, bearing in mind that in both cases, transfer of skills to South African employees is effective.

Staffing issues were difficult, Natasha Davies for Denel’s HR division, admitted. It was difficult to retain highly skilled aero engineers and trained staff in a highly competitive industry “but the labour turnover rate is 6.7%, which is within Denel’s target range of 5% to 7%.”

Skills back up improving

Young engineers, particularly females, were being supported through various initiatives. Staff retention was improving, she said. In terms of outreach to youngsters and schools programmes, Denel had met and talked to 1200 learners from grade 8 to 12 in Gauteng and North West and 3000 books on mathematics given out to schools.

The Denel board chairperson, Zoli Kunene, said “there was light at the end of the tunnel on outreach into Africa and significant new business in the Middle East and the Africa continent had taken place.” The board of Denel was confident that “interventions of the last 12 months has placed Denel in a position to take advantage of current market opportunities”.

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Transport to get one transport regulator

Transport legislation to be revised.

In a written reply to a parliamentary question on the subject, the minister of transport, Ben Martins, says that his department of transport is considering setting up a single transport regulator to consider all matters relating to tariffs; the protection of the public as far as transport matters are concerned and to consider the revision of a number of regulations.

He emphasised that lessons learnt from the energy and communications sectors showed that regulators should be incorporated into the transport process itself and the “the new model might entail merging several economic regulators currently operating in the transport industry into one”.

According to the minister, he will now have an investigation commenced which will look at regulation of tariffs across the transport sector; regulations regarding quality of service  and matters regarding the protection of the public interest.

“Predictable tariff structures had to be put in place”, he said.

Minister Martins reply included the fact that necessary regulatory and legislative framework would be in place by 2014 to allow for the setting up of a single transport regulator, who would then be responsible for all transport infrastructure pricing including roads, aviation, rail and maritime matters.

The proposed regulator would be created via legislation and a position paper was to be drawn up by the end of the first quarter next year and draft legislation to follow.

He concluded that the idea was also to provide a better climate for investors.

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More tightening up in security industry

New Bill comes before Parliament

The portfolio committee on  police has arranged public hearings on the Private Security Industry Regulation Amendment Bill, the Bill itself already having been tabled.   In a recent cabinet statement a review of past anchor legislation for the industry was undertaken to “address gaps that are caused by the lack of effective regulation of the private security industry, in particular, the threat to national security posed by the participation of foreigners”.

The aim of the Bill now before Parliament is to tighten up existing law as far as foreign ownership of private security firms operating in South Africa is concerned and to provide further regulations for the Private Security Industry Regulatory Authority (PSIRA) to enforce on the subject of firearms control and transit issues.

Other than to regulate foreign ownership and control of private security businesses, the Bill aims to provide regulations on the transportation of cash and other valuables; to allow for the setting up of a separate database on firearms issued to security service providers and provide limitations as far as services obtained from employees with a past criminal record.

If the Bill becomes law, the regulatory body PSIRA will be eligible for state funding.


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