South Africa’s parliamentary committee has recently signed off on the Private Security Industry Regulation Amendment Bill, which, if approved by the president, will require foreign-owned private security services in the country to sell at least 51 per cent of ownership to local firms or withdraw from the market.
“It’s undesirable to have legislation which on the face of it is unconstitutional. What you want in those situations is for the legislature to realise it, and not pass it,” Mark Oppenheimer, constitutional law expert from the Bridge Group, told CNBC Africa.
“President Zuma has this golden opportunity at the moment: the bill has been passed by parliament, it’s sitting on his desk, and he can refer it back.”
Some of South Africa's main private security firms, including ADT, Chubb South Africa and Top Security, are foreign-owned firms.
The first troubling clause within the bill, according to Oppenheimer, is the 51 per cent sale of ownership and control to South African citizens.
“Note that the term ‘citizen’ is a bit of a problem, because a company is not a citizen. Already there is some ambiguity there about how you would end up doing this. You also have a situation where let’s say you have a listed company that can be freely-traded around the world, how do you ensure that only South African citizens are buying those shares? You can’t,” Oppenheimer explained.
He added that a second problem is that while the legislation declares that the minister of security has discretion to change the ownership percentage up or down, depending on the particular security sector, a number of other different sectors are highly vulnerable to the change.
These include security guards, locksmiths, and other firms that manufacture, distribute and import certain kinds of security equipment.
“You’re taking away the power from the law and you’re providing it to a minister and a small committee. That’s very dangerous,” said Oppenheimer.
He added that in the event that security firms decide to legally dispute the bill, the requirement of going through a number of prior courts first before landing at the Constitutional Court would create massive bill of legal fees for the firms.
“The first question we have to ask ourselves is what the rationale that government has given us for putting this in place in the first place is. It’s a reason that’s given by states all around the world, it’s a reason that’s given for the Secrecy Bill: It's national security,” said Oppenheimer.
(READ MORE: SIA slams S.Africa's proposed Security Services Bill)
South Africa’s equality clause within its Constitution, according to Oppenheimer, could also be up for infringement if the bill is passed.
“We have an equality clause which lists that you cannot unfairly discriminate against a particular set of individuals. The Constitutional Court has already looked at something like citizenship in a prior case and said that you can’t unfairly strip non-citizens of their rights arbitrarily. This is exactly what’s happening here. We’re saying to people because you happen to be a foreigner, you will not have the same rights. We’re going to strip you of your property,” Oppenheimer explained.
Similarly, South Africa’s Constitution also has the property clause that states that no individual may be arbitrarily deprived of their rights to property.
“You may have someone rush into the high court to say ‘we can’t comply with this, we think it’s unconstitutional’. The High Court can make some kind of declaratory order, which will then have to be confirmed by the Constitutional Court. That may happen. All is not lost,” said Oppenheimer.
“It does place a massive burden on those that want to raise that challenge because of the costs involved, the time and the uncertainty involved. It’s a security sector now but I think this is government testing the waters. Other industries are going to be affected. If they’re successful here, there’s no reason why they won’t stop with other sectors.”