Tshwete reverses plan to ban foreign investment in SA security companies
Business Day - Parliamentary Editor
Safety and Security Minister Steve Tshwete has reversed the proposal to ban all foreign investment in the security industry after a second urgent meeting with four UK companies, averting a major diplomatic row.
The African National Congress (ANC) in the parliamentary committee on safety and security sent shockwaves through the security industry and investor community two weeks ago when it said it intended to ban all foreign investment in the private security industry and force foreign-owned companies to sell to South Africans. The ban would have included all shareholdings.
Four British companies ADT, Chubb, Securicor and Group 4-Falke have invested R3bn in the industry in the past three years. The ban was deemed to be in conflict with an investment protection agreement signed with Britain in 1994 and the high commission in Pretoria expressed concern about the proposals, raising the possibility of a major diplomatic row.
Representatives of the four companies met Tshwete for the first time on Tuesday afternoon. Late that night they were asked to return for a second meeting yesterday. After the meeting Tshwete and the four executives addressed an impromptu news conference in Parliament Street.
Tshwete said the companies had maintained a progressive stance throughout, had acted with circumspection and responsibility and "there will be no bars on foreign investment".
But he explained the revised bill would not allow foreigners to be directors of security companies without special exemption from the minister. The companies also committed themselves to black empowerment.
Group 4-Falke vice-president Stephen Brown, speaking on behalf of the group, said they were grateful that agreement had been reached and were happy to be committed to SA. He said the investors recognised that black empowerment was a vital part of operating in SA and stressed the companies' commitment to it.
Tshwete rejected suggestions other ministries had put pressure on him, saying "the issue is a safety and security issue". On Tuesday Finance Minister Trevor Manuel called the proposal "sledgehammer legislation".
Democratic Alliance (DA) spokesman Andre Gaum said: "It is heart-warming to see Minister Steve Tshwete has come to his senses after sound arguments had been presented to him by the foreign investors and the DA.
"Today's development is testimony to what can be achieved through constructive and effective opposition."
He said the DA hoped that the damage that had been done to SA's credibility as an investment destination would be limited.
United Democratic Movement spokeswoman Annelize van Wyk also welcomed the decision to back down on the "excessive demands" on foreign investment.
"It is a vindication of our view that a compromise on the issue could be found without sacrificing complete control of this sensitive industry.
"We also welcome the fact that continued foreign involvement in the industry would be linked to empowerment initiatives. We are of the opinion that the bill in its current format provides enough checks and balances to ensure that the industry is run in the best interests of SA."
Tshwete said the required changes to the bill now before Parliament would be effected by the safety and security committee. The bill is expected to go before the National Assembly on October 23.
Source: Business Day.
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