News & Media
15 May 2009
Formal Address to the National Press Club
Honourable members of the National Press Club; the CEO of the Security Industry Alliance, Directors and Senior Managers of G4S, Ladies and Gentlemen - Good EveningThe private security industry in South Africa is one of the fastest growing in the private sector with an ever growing number of new entrants into the market. This has facilitated the much needed provision of job opportunities for citizens.
There are presently over five thousand security companies employing at least 340 000 active registered employees that render guarding, integrated security solutions, armed response, and cash in transit services including various security and risk management services to customers. Of these companies, fewer than 300 are represented by the formal employer bodies.
The industry has a significant role to play in crime prevention and policing as a result of its resources, capacity, proactive and reactive policing strategies that it employs when rendering services to its customers.
However, as many of you are acutely aware from our notorious history; this business is not a bed of roses. We are in dire need of transformation. The onus is on various industry stakeholders that include employers, trade unions, the regulatory authority and consumers of security services to come together to ensure the sustainability of growth and employment in an economically viable security industry of the future.
The structure and composition of the industry which is the product of the current regulatory environment presents an emerging business entity with exceedingly low barriers to entry. Theoretically, this should at least facilitate a healthy platform for the development of SMME’s. The reality is that this has encouraged the mushrooming of a large number of small un-empowered and non compliant operators that have come to be known by the labour and organised business as the so called ìfly by nightsî.
Of the patently excessive number of industry participants, I need to reiterate that fewer than 300 are represented by formal employer bodies, which are themselves numerous and have traditionally lacked a common vision of the future. This challenge has led to a destructive level of fragmentation in the business community of this sector thereby substantially limiting effective regulation and invites the continued exploitation of the most vulnerable of our country’s human capital.
The ordinary employee in our sector faces relatively low levels of remuneration, is in critical need of education and skills development, is a soft target for criminal syndicates and is significantly challenged to remain motivated in the face of the negative social sentiment that is a reality of being employed as a security guard.
Despite their best efforts, organised labour, who are themselves fragmented into at least 15 trade unions that collectively represent fewer that 30% of those employed, have been unable to bring meaningful benefit to the lives of their members. Collective bargaining is unregulated and is traditionally antagonistic; often characterised by significant levels of violence and intimidation. A noteworthy distrust exists between organised labour and employers that has been cultivated over many years. As we prepare to enter yet another round of wage negotiations we are mindful of the regrettable events of the 2006 strike and the ever increasing economic uncertainty of our times.
The industry is regulated by the Private Security Industry Regulatory Authority (PSIRA). The regulator has over the recent past drawn sharp criticism from business and labour alike. The generally held view is that the structural and legislative absence of participation in regulatory oversight by stakeholders such as employers and unions renders its interventions into the industry to be misdirected and thus ineffective as larger predominantly compliant companies are zealously pursued by inspectors while the fly by nights go unchecked and unnoticed.
The saturation of the market environment is the principle cause for competition between companies to turn on price rather than the provision of that higher quality of service that can only be achieved through greater investment in skills development and well developed modern security techniques.
The simple rule of the game is that non compliant companies exploit workers by their utter disregard for labour laws that regulate minimum conditions of employment and shamelessly undercut the prices of the compliant, ethical operators who are often unsuccessful in tenders as a consequence. Many large business organisations, in their quest for greater economic efficiency, have funnelled the procurement of security services through a rigid process that considers cost to be paramount in the awarding of tenders. An unintended consequence of this is that tender processes have become highly effective tools that elicit a static traditional guarding service at the lowest possible price, but that fail to seek to obtain the best possible risk mitigating solution that can be provided by industry experts. Another stark reality is that it appears that government departments and parastatal organisations along with big business are at the forefront of this demand driven exploitative competition. The irony is that these non compliant companies often mask themselves as BEE companies and the organs of state are misled into the fallacy that they are promoting the empowerment of the historically disadvantaged.
It is against this bleak backdrop that we at G4S Security Services have embarked upon a visionary programme of action that will seek to bring a wave of change to the industry. G4S is the largest global security solutions company operating in 110 countries and employing over half a million people. We are a values driven organisation and it is our stated intention that we are market leaders in all countries in which we operate. We always take care to employ the best people, develop their competence, provide opportunity and inspire them to live our values. It is also our fundamental objective to positively and proactively involve ourselves in our market environment by constantly striving towards entrenching higher standards of professionalism for the benefit of our staff and customers.
To this end, we have for some time now, scaled up our participation in industry initiatives that seek to redress the manifestations of our past.
In the pursuit of the consolidation of compliant employers and the development of the industry, we are founding members in the formation of the Security Industry Alliance (SIA), where in 2003 key players in the security sector, including individual companies, employer bodies, members of the big business fraternity came together under one umbrella to provide a single voice for the profession in order to interface with government and other stakeholders. This has created a platform for the industry to elevate its status and become an influential and unified voice.
In conjunction with its members and partners; SIA is proactively involved in making submissions on aspects of proposed regulations which have a direct impact on the security industry and consumers. One of the SIA’s main objectives is the need to enhance relationships with all stakeholders including government to ensure that accurate information is received and the dynamics of the industry are understood. Through the Alliance activities, we have been able to launch a campaign that aims at creating awareness, informing and educating the public and consumers on the issues facing the industry.
The work of the alliance has opened a necessary dialogue between the industry and various government stakeholders including the Ministry of Safety and Security, the PSIRA, the SAPS and the SASSETA. The result of this dialogue is that representatives of the Ministers office and the Deputy Commissioner of the SAPS, Andre Pruis have been appointed to the board of the Alliance. This is certainly a step in the right direction.
The reconstruction of the regulatory environment in the industry is a predominant agenda item for SIA. Our aim is to achieve greater direct stakeholder participation in the PSIRA in pursuit of the principle that there should be greater self regulation by industry players. The success of this model is vividly demonstrated in the Private Security Sector Provident Fund which is governed by a board of trustees composed of equal numbers of employer and labour representatives and has repeatedly been hailed by the Financial Services Board as a shining example of good governance. The fund, which was established some four years ago as a compulsory scheme for all security officers has established its own compliance mechanisms that have been enormously successful pursuing fly by night companies and has even gone so far as to ensure the successful prosecution and imprisonment of company owners who have fraudulently benefited through worker exploitation.
G4S are leaders in the development of a new collective bargaining framework for the industry. Working through our employer organisation, we have since the end of the 2006 strike worked tirelessly with the CCMA and organised labour to bring about a new more structured environment in which parties can engage and negotiate wages and conditions of employment. We have taken the opportunity in the process, to forge good relations with trade unions, to mend and build the trust that is needed to conduct the next round of wage negotiations in a manner that seeks to circumvent the plainly absurd circumstances surrounding the 2006 process. Paradoxically, it is this engagement that has led us to the principle understanding that many of the inherent challenges in our sector can only be resolved through joint initiatives between business and labour. To this end, and under the auspices of NEDLAC, we are engaged in the development of an Industry Charter.
At a company level, we have developed our product offering in a manner that shifts away from the traditional guarding service that is offered by our competitors to a more integrated solutions approach that incorporates our guarding activities with the deployment of the latest technologies in order to gain competitive advantage. This shifts the focus from a price driven product to a value proposition of quality and effectiveness, where the risks faced by consumers are truly minimised. Aside from the clear commercial advantages that this will bring us, we will by necessity be ploughing a large investment into our skills development and training programmes that will create in our staff the ability to engage in the more skilled work that is needed, and the opportunity to fulfil higher paying jobs. Our strategy will see the gradual phasing out of minimum wage earners thus providing vast development and career opportunities for our current staff and positioning us to attract the best talent available.
As a company we will continue in pursuit of our vision for a reformed industry and we will enlist the help of all who are willing and able to assist us to achieve this.
On behalf of the Directors and Senior Management of G4S, I thank you sincerely for the opportunity to address you and looking forward to some informal interaction with you shortly.
Enquiries:
Sindi Soko, 082 881 7760
For any media enquiries please contact Sindi Soko at G4S Head Office at (+27)12 431 3700 or email 
