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South Africa: Stalling on security providers bill could harm AGOA benefits

South Africa: Stalling on security providers bill could harm AGOA benefits
US ambassador to SA Patrick Gaspard
Published date:
Friday, 19 June 2015
Linda Ensor

US ambassador to SA Patrick Gaspard has been given repeated assurances by the government that the controversial Private Security Industry Regulation Amendment Bill will be sent back to Parliament for amendments.

The bill has been with the Presidency for about a year since its adoption by the National Assembly and National Council of Provinces, and presidential spokesman Harold Maloka said on Thursday it was "still under consideration".

The danger, however, is that SA’s position under the African Growth and Opportunity Extension Bill (Agoa) — adopted by the US Congress this week — could be jeopardised if the indecision continues indefinitely.

Police Minister Nathi Nhleko’s spokesman, Musa Zondi, said discussions were ongoing between Mr Nhleko and Trade and Industry Minister Rob Davies. They were prolonged because the issues were complicated, Mr Zondi said.

The bill proposes that foreign-owned security companies and their suppliers dispose of 51% of their shares to South Africans.

It has elicited widespread criticism, including from the US government, for being unconstitutional as it would allow for enforced expropriation.

Opponents have also noted that, if enacted, the proposals would be in violation of SA’s international trade obligations, including those under the World Trade Organisation’s General Agreement on Trade in Services.

The Security Industry Association in the US has suggested pressure be put on SA through Agoa. Chubb, ADT and G4S are all American-owned companies.

Mr Gaspard said in an interview on Thursday the US had "received assurance after assurance from Minister Davies and others that there is a reconsideration, that the concerns that have been aired by the industry and a number of governments have been heard, and at some point we will see another iteration of the bill".

The extension of Agoa for 10 years contains a provision for an automatic out-of-cycle review of SA’s trade and investment policies, which must commence within 30 days of its coming into law.

Mr Gaspard said this provision was intended to underpin the resolution of the outstanding technical issues to allow for US imports of poultry, beef and pork into SA. The review period was likely to proceed without problems.

However, it is possible the US security industry could use the review to push for a revision of the Private Security Industry Regulation Amendment Bill.

Democratic Alliance trade and industry spokesman Geordin Hill-Lewis said he had gathered from US congressmen that the bill would be the focal point of the review. "The security industry bill seems to be the biggest concern at the moment and could determine whether SA retains Agoa access."

In terms of a deal reached earlier this month between the South African and American poultry associations, SA’s anti-dumping duties would not apply to 65,000 tonnes of bone-in chicken imports annually from the US. Mr Davies said in the National Assembly on Wednesday that "this quota only remains in place for as long as SA is part of Agoa".

The poultry industry has been led to believe that by sacrificing about R900m of annual industry turnover it has guaranteed SA’s continued access to US markets under Agoa.

But Mr Gaspard insisted this was not the case, stressing an agreement between industry associations could not impose conditionalities on a law passed by the US Congress. The Agoa document did not contain any reference to such an agreement, he said.

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