Governance or folly

October 2011 Associations

Proposed PSIRA fee increases to cripple industry.

The proposed increases in the fees of security officers contained in the Amendment to the Regulations made under the Security Officers Act (Act No. 92 Of1987) published in August 2011, are serious cause for concern. Hi-Tech Security Solutions spoke to CEO of the Security Industry Alliance (SIA), Steve Conradie about the economic implications for businesses should the amendment be passed by the Private Security Industry Regulatory Authority (PSIRA).

In April 2011, Conradie sent a letter to the new CEO of PSIRA, Sam Chauke, regarding the ‘Consultation Paper – Review of the Annual Fees for the Private Security Industry’. “It has to be said upfront that we understand that PSIRA has not imposed an increase on the fees for many years, but this proposed increase is not economically viable as it is a non-recoverable increase.”

Steve Conradie
Steve Conradie

Conradie was reacting to the following proposal:

“The prescribed amount contemplated in section 18 (1) of the Act was:

(a) the amount of R5250,00 per year; and

(c) the amount of R7,00 per calendar month or any part thereof, multiplied by the number of persons employed, used, deployed or made available to render a security service for a calendar month or any part thereof.”

Conradie further maintained that: “The Schedule is confusing when referring to annual and monthly contributions. In addition, the proposed increase is not CPI related and I believe that this will further stimulate non-compliant operators. Furthermore, there is no proposed improvement of service offering to the end user from PSIRA, which begs the question: “What am I getting for my money?”

“Because of the extremely high rotation rate of security officers, it is not practical to collect the contribution annually upfront. This in itself will create an administrative nightmare if one has to pro-rata be reimbursed should a guard leave the specific employer before the end of the 12 month period. Additionally, annual fees will result in a huge cash flow drain on smaller companies that they may not be able to afford. This will also discourage the entrepreneurial and small Black companies specifically during start up,” said Conradie.

He believes the only way a possible increase might be acceptable to the industry would be:

* Propose an ‘increase in service offering’.

* Have some form of SLA with the industry in terms of a PSIRA commitment.

* Link it to a percentage of security officers’ wages (to guarantee inflationary linked increases).

“SIA has many times in the past pleaded with Government to review its position and to change the concept that the Regulatory Authority should be funded by Government and not the persons and entities within the private security industry. This is the only industry in South Africa where funding is taken from the employees working in the industry,” commented Conradie.

“Considering that we are the second biggest industry in the country and the largest industry employer of entry level jobs, it seems ridiculous that our initiatives are not financially subsidised by Government,” he added.

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