PSIRA 2020/21 Annual Performance Plan;with Deputy Minister

Meeting report

The Chairperson welcomed everyone and said this was not a joint meeting with the National Council of Provinces (NCOP) and handed over to PSIRA for the presentation.

Briefing by Private Security Industry Regulatory Authority (PSIRA)
Mr Manabela Chauke, CEO, PSIRA, apologised that the delegation of PSIRA was without the board itself or its council. The Minister of Police was currently considering the appointment of the council.

Main Policy Focus Areas
Mr Chauke outlined PSIRA’s main policy areas of focus over the forthcoming five-year period.

PSIRA was focused on reviewing its funding model. Critical to this strategy was the Levies Act under consideration and the Guarantee Fund. PSIRA sought to implement an organisational redesign, particularly through its office devolution and decentralisation initiative. PSIRA was seeking to review training standard for the industry. PSIRA’s law enforcement capacitation programme aimed at reducing the inspector/security business ration from 1:127 to 1:120. Increasing continuous awareness of the PSIRA brand was another priority. Critical priority was given to the digitisation of PSIRA’s services.

Strategic Plan 2020/21 – 2024/25
Mr Stefan Badenhorst, COO, PSIRA, highlighted the industry’s impact statement of ensuring a “legitimate, transformed and competent private security industry which acts in the interest of the state, public and private security industry and contributes towards a safer South Africa”. PSIRA was considered a force multiplier to the state. Therefore, it was critical to ensure legislative competence and compliance with the constitution. PSIRA was to remain a valuable partner with SAPS in the fight against crime.

Outcomes
Priority five of social cohesion and safe communities sought to maintain financial sustainability, accountability, relevance and performance. PSIRA received no government funding and was self-reliant. This highlighted the importance of the digital business strategy. This would increase PSIRA’s ease of accessibility since it did not have a national footprint in all of South Africa.

PSIRA had received unqualified audit opinions for a number of consecutive years; it sought to maintain this.

PSIRA was prioritising implementation of the Guarantee Fund for the private security industry.  

Priority five of maintaining a professional, accountable and trustworthy private security industry sought to ensure a capable and trained private security industry. PSIRA was the custodian of training in the sector. It aimed to enhance collaboration relations with its stakeholders and ensure efficient registration in the industry.

Key Risks
Ensuring the liquidity of PSIRA was an important financial risk to mitigate. This was to be done through an increased collection rate. This would be enhanced by the speedy implementation of the Levies Act and the industry Guarantee Fund.

Registration efficiency risks were PSIRA’s inaccessibility and visibility to stakeholders as PSIRA could not have offices around the entirety of South Africa. This resulted in reputational damage. PSIRA sought to increase its footprint in terms of mitigations through vendors rendering some of PSIRA’s services across provinces. The digitalisation of services was key as well to removing PSIRA’s distance from clients.

In terms of ensuring robust brand management strategies, PSIRA targeted awareness campaigns. There had already been huge increases in the knowledge of PSIRA throughout the country due to aggressive stakeholder awareness campaigns that had been conducted.

Non-compliance by certain security providers was sought to be mitigated by intensifying law enforcement operations and continuous revisions of PSIRA’s compliance strategy.

In terms of ensuring a capable and trained industry, PSIRA targeted the lack of industry training and competence by intensifying efforts at building capacity. There were currently 600 accredited training providers nationally. An increase in this number was desirable. Increasing accessibility would be provided through strategic partnerships.

Annual Performance Plan (APP) – 2020/21
The APP had been developed prior to the outbreak of COVID-19. It had been reviewed, and PSIRA believed it could be achieved by confronting challenges presented by COVID-19 head on.

Programme 1: Administration

Sub-programmes included: Finance, Corporate, and Research and Development.

Finance had three output indicators. It sought to maintain financial sustainability, accountability, relevance and performance at PSIRA. This broadly involved progressive digitalisation of most of PSIRA’s services.

Research and Development targeted research report completion and consumer surveys.

Programme 2: Law Enforcement

Programme Two sought to ensure compliance with the statutory code of conduct for law enforcement. It had sub-programmes of compliance, enforcement, and prosecution.

Programme 3: Training & Communications

Programme Three had sub-programmes consisting of: communications and stakeholder management, and industry training.

In terms of industry training, PSIRA aimed to build capacity in training centre environments. This meant finalising instructor applications quicker to increase the capacity of accredited training centres. Training targets would be brought forward due to COVID-19, as PSIRA was better able to focus on the implementation of distance learning.

Communications and stakeholder relations, focussed on marketing. As physical gatherings were not allowed, PSIRA was focussing on digital awareness campaigns.

Programme 4: Registration

Programme Four was core to regulation of the industry by ensuring that service providers were licensed. PSIRA sought to finalise private security business and officer applications as soon as possible. It was implementing online registrations. However, PSIRA was reliant on SAPS to conduct the verifications of criminal records prior to accreditation. There was a partnership with the Department of Home Affairs under -formation that would hopefully make the process quicker.

Budget Growth over MTEF
Ms Mmatlou Sebogodi, CFO, PSIRA, said that budget growth over the MTEF was expected to increase. There was a trend of budget growth versus an expenditure disparity of nine percent versus 12% respectively. This required the funding model amendment, such as through the Levies Act.

MTEF Budget Allocations – Revenue

Main sources of revenue were through annual fees paid to PSIRA. These were expected to increase by 12%.

“Other income” referred to the sale of goods (such as ID cards and certificates), fines, and interest income accrued from PSIRA’s cash management system of investment, or the receipt of late payment of annual fees (big companies were given one month’s grace, smaller companies were given three months to pay).

Budget per Province

Gauteng comprised 79% of PSIRA’s budget. The head office support functions housed here had not yet been decentralised. PSIRA had conducted an organisational design initiative to decentralise these operations.

As a self-funding organisation, PSIRA conducted cost benefit analysis prior to opening offices in new regions. This was to ensure the new offices would be able to fund themselves. This was a key consideration as it meant that PSIRA could sustain itself, but also meant it was unable to reach certain areas due to cost concerns. however, mobile offices were implemented so as not to compromise on service delivery in lower viability provinces. Another cost saving measure to minimise rent was partnership with the South African Post Office (SAPO) or to pursue the Department of Home Affairs’ ‘vendor system’ of saving in operational and installation costs.

Budget  per Programme

Administration and Law Enforcement were PSIRA’s largest budget programmes. The digitalisation system was under the “BIT” (information and computer technology) project, which fell under Administration (explaining its high costs). In 2020/21, Administration was projected to be the highest budget programme again.

Budget per Economic Classification

Compensation of employees took the lead. In 2020/21 it was projected to be the largest again due to the nature of PSIRA’s work.

Top 5 Cost Drivers

Personnel expenditure was identified as the most important cost driver, as PSIRA was service-orientated.

2021 Capital Budget

Important to capital expenditure was computer hardware and software. As part of the digitalisation scheme, it required procurement to automate and refresh PSIRA’s hardware to increase its capacity for the digitisation of its offices. These included measures such as remote office monitoring.

Cost Containment Measures

Previous cost containment measures that had been implemented over the years had been working. PSIRA undertook skills analyses of external consultants prior to hiring them. This had led to the use of internal skills more effectively in many cases.

COVID-19 Impact on PSIRA

PSIRA’s losses of revenue due to being unable to interact with the security industry as a result of COVID-19 had meant it lost R70 million. It had intensified operations and law enforcement. Automation had been pursued as part of COVID-19 regulations for distancing, while still allowing PSIRA to perform its duties.

COVID-19 had meant there needed to be a review of the APP targets. PSIRA had limited available resources. Automation initiatives had originally been planned for Quarter Four; these would now be implemented earlier to allow PSIRA to continue rendering services under COVID-19 imposed conditions. Procurement of digital fingerprint systems had also been pursued to support social distancing.

The Chairperson asked if Deputy Minister Mathale wished to conclude the presentation.

Deputy Minster Mathale opened for questions from the Committee members.

Discussion
Mr H Shembeni (EFF) asked about the so-called statutory minimum wages of security companies. What steps had been taken to address the non-compliance of security service providers with the provision of basic conditions of employment in terms of payment of statutory minimum wages? Exploitation of security guards was an ongoing issue.

About the establishment of compliance forums to address unfair labour practises, could PSIRA explain the composition of these forums? He asked PSIRA to indicate whether the forums had had any successes in preventing exploitation of workers in the private security sector.

What security companies received tenders, especially those based in the Nkomazi municipality in Mpumalanga? What had happened to the previous and present security companies that had been providing municipal security to properties in the province? What rates were being paid by the company in question to security officials? It had been brought to his attention that people had been chased from work for not wanting to sign a R14 rate with the new company that had taken over security work. A number of retrenchments had followed. Companies had been employing people without PSIRA certificates to work in place of those who were unwilling to be paid R14 an hour. What would be done about this by PSIRA?

The Chairperson said detailed complaints could be sent in writing to PSIRA for more detailed responses.

Mr O Terblanche (DA) thanked the PSIRA delegation for the presentation. He asked a question about page four’s reference to transformation. In terms of implementation of an organisational redesign, what was the difference between the two? How far had PSIRA progressed with the implementation of the organisational redesign? Was it a “pipe dream”? However, if PSIRA was in the process of implementation, what was the time frame on it?

PSIRA was playing an important role as mediator of the security industry. What was the input of or to what extent was there planning and consultation with SAPS and the CSP, if at all?

About training and standards, was there compliance with the Act?

The Chairperson interjected and said the members could not hear Mr Terblanche; she said the Committee would move to Ms Z Majozi (IFP) and take her questions.

Ms Majozi welcomed the presentation. She asked for clarity on Programme Three regarding accredited training centres. The presentation had only shown the number of days for the turnaround time for training centres. How many training centres and instructors were there in South Africa? The presentation said there were two training assessment centres in South Africa, did this mean there were only two training centres or was there a difference?

The targets for Programme Three had identified provision of awareness campaigns in communities. Which communities were these? Were these registered companies or what communities did PSIRA mean?

She welcomed Programme Four’s turnaround time for registrations to eight days. She wished to see the number continue decreasing to two or one day(s) in order to get registrations on time.

About the interest income on PSIRA’s budget from big and small businesses, how would this be affected by COVID-19? Businesses that had been delaying payments prior to COVID-19 would now be delayed even more in their payments. How would this be address? What was PSIRA’s strategy for small businesses that were unable to pay their fees on time?

Ms Majozi concurred with Mr Shembeni regarding the exploitation of security workers. There were serious issues in terms of their salaries and working hours.

What were PSIRA’s strategic ways to attract business in other provinces, seeing as they only existed in Gauteng and other two provinces? What means were used to attract businesses?

Ms Majozi asked Deputy Minister Mathale why PSIRA was not being subsidised and assisted by Government despite their audit performance.

Mr E Maphatsoe (ANC) welcomed the presentation. Taking into cognisance that PSIRA was a self-funding institution; its performance had been sustainable and commendable. An example was PSIRA receiving successive unqualified audits. PSIRA was doing better than many institutions that received 100% of their funding form government. PSIRA was self-sustainable whilst still managing to maintain unqualified audit reports. He urged PSIRA to keep this up.

About PSIRA’s role as a force multiplier to SAPS, he wished to check about the level of training that was going to be done to members of the private security industry. The two were linked to a certain extent (whilst private security officers were not police officers). Was the training linked, whilst the jobs were not necessarily the same?

At the previous Committee meeting, the National Police Commissioner had explained there was a forum where SAPS met with security companies to discuss how they could work together. Inspectors were not enough for PSIRA. The country was large. PSIRA had situations whereby it was unable to be all over the country. How would it be able to determine whether companies were correctly paying their workers? Most companies made money by employing foreign nationals due to the lack of workforce capacity from PSIRA.

About the UIF and COVID-19, private security companies also had to retrench due to there being no more customers. Were private security workers paid their UIFs?

Dr P Groenewald (FF+) hoped he could be heard as it seemed that the network was not working.

The Chairperson said Dr Groenewald could be seen and heard.

Dr Groenewald asked in terms of law enforcement, how many security providers’ cases had PSIRA handled? From these cases, could the Committee be given an indication of how many cases had not complied with the Basic Conditions of Employment (BCE) Act? Security guards were not always getting the correct remuneration from private security providers.

Mr Terblanche asked about training and training standards. He was aware of training compliance with the PSIRA Act. Apart from other people and organisations that had input in the training and standards, to what extent was it necessary to discuss with the National Commissioner of Police and organisations such as the CSP? They were playing in the same arena – this required some synergy.

The Chairperson said Mr Chauke had 15 minutes to respond.

Mr Chauke said that Mr Badenhorst would respond.

Mr Badenhorst said there had been a lot of questions dealing with minimum wages and exploitation. PSIRA did not set the wage standard and employment standards – this was approved by the Department of Employment and Labour. A recent Bargaining Council for the sector had been approved at Ministerial level, coming into being in 2020. Most of the aspects on minimum wages and exploitation issues would be dealt with by the Bargaining Council. As a regulator, PSIRA was always concerned about potential exploitation and it took action against cases of severe exploitation in terms of its code of conduct. The APP had highlighted the number of cases and businesses that had been investigated. These were, for example, cases of non-contribution to the UIF.

Compliance forums had been established around eight years ago. They involved the Department of Employment and Labour, the Department of Home Affairs, and SAPS. The purpose was to assist the bodies in working together towards their compliance agenda. This had been well-supported and had been productive in general. There remained some unsuccessful areas as certain stakeholders did not pull in the same direction. PSIRA was working to improve compliance in this regard.

On the question of transformation and implementation of the organisational design at PSIRA, these were two different aspects. The Transformation Charter was to be developed for the private security industry to improve its accessibility to all people of South Africa. The organisational design was a PSIRA-driven initiative to investigate where to change and improve the organisation over the next five years. This was, for example, the move towards decentralisation from head office. The organisational design had been approved by the previous PSIRA Council in 2019. It would proceed over the next two years in terms of implementation. PSIRA was mindful of the cost implications of the vision in terms of the organisational design, and this could mean it stretched to 2021.

About liaison with the CSP and SAPS, PSIRA engaged and discussed regularly with them. PSIRA sat with them on the National Joint structures to discuss security-related issues. There were partnerships and engagements.

About Mr Shembeni’s references to complaints, Mr Badenhorst did not have the details of specific actions that had been taken. But he had taken note of the specific cases in Mpumalanga and PSIRA would respond to them.

About the questions on the training and which stakeholders training standards were discussed with, this had been reviewed in 2019 in consultation with industry players. This had accompanied the development of new training standards that was focussed on areas that did not have specific statutory training standards for them. One example was that of lock smiths. These were specialised categories of security providers.

PSIRA was in liaison with industry role players such as the safety and security sector, as well as the education authority, for skills development.

On Ms Majozi’s request for explanation on Programme Three, PSIRA facilitated accredited training centres. PSIRA set the minimum training centre standards and curriculum but did not deliver on the accreditation. This was done in partnership with the private sector. There were 600 accredited training implementors in South Africa. PSIRA quality assured the standard of these implementors. PSIRA had targeted the building of capacity in this regard and the targets had been achieved. The new APP wished to accredit training centres as efficiently as possible by processing the applications for new centres and instructors as quickly as possible.

A number of awareness campaigns had been conducted by PSIRA. These ranged from consumer targeted, to the security industry, unions, and the general community, in order to spread the message of PSIRA.

Mr Badenhorst noted the comment on the eight-day registration time made by Ms Majozi.

The Chairperson asked Mr Badenhorst to be brief.

On Programme Three, the target to reduce the registration time was 72 hours.

On the private security sector as a force multiplier for SAPS, Mr Badenhorst said the sector was valuable. They hoped to play an even more constructive role. PSIRA wished SAPS to look at a more national policy position for private security partnerships.

On the shortages of inspector, non-compliance was addressed at PSIRA through its law enforcement strategy. This was a risk-based approach to non-compliance to ensure maximum efficiency. PSIRA focused on areas of non-compliance, sending resources to these areas. A self-evaluation mechanism for private security businesses had also been implemented.

The UIF was focused on as part of PSIRA’s business inspection programme. Those companies that had registered with the UIF and made contributions would be paid.

Mr Badenhorst said those were all the questions he felt he needed to address.

Mr Chauke said Ms Sebogodi would answer questions also.

Ms Sebogodi addressed the question of interest income from the private security industry and whether PSIRA would be paid what it was due, The PSIRA gazette that had been released had given smaller companies five months to pay. It also allowed for a debtor’s policy to be arranged with PSIRA.

Ms Sebogodi said that was the only question she needed to answer.

Mr Chauke said those were all the questions that needed answering.

The Chairperson asked if Deputy Minister Mathale wished to conclude with any input.

Deputy Minister Mathale said he appreciated the opportunity to appear with the Committee. He wished to comment on Ms Majozi’s query on whether to subsidise PSIRA. The discussion was currently ongoing. PSIRA was interacting with National Treasury on the matter. The long-term solution was the signing of the Act (Levies Act?) that was sitting on President Ramaphosa’s desk. The Act would allow PSIRA to maximise on the collection of fees from the security industry to help it to sustain itself. He noted Ms Majozi’s recommendations.

He said it was a pleasure to interact with members of Parliament and the advice given assisted the executive to become better.

The Chairperson thanked Deputy Minister Mathale and the presenters. She said that the Committee would not have a meeting the following Wednesday, but the following Friday. The meeting would be the extended Independent Police Investigative Directorate (IPID) meeting, where outstanding questions and answers would be dealt with, along with another round of questions to end the IPID budget hearings. Adoption of the IPID budget process would take place the week after that meeting.

The Chairperson thanked Deputy Minster Mathale, the Committee’s administrative staff, content advisors and researchers for their input. She thanked the Ministry for making all the Parliamentary staff available for the Committee to do its work.

The meeting was adjourned.