Private Security

Publisher and Managing Editor IKRAM SEHGAL wrote this article for THE NATION which the DJ is re-producing with thanks.

The prime requisite of good governance in any society is the safety and well being of its citizens but peace and harmony cannot be imposed in isolation by law enforcement agencies alone. A sound economy, an equitable system of justice, affordable utilities, employment opportunities etc are only some of the factors directly contributing to good law and order. The security of the individual may be the general responsibility of the regime in power, personal security whether by guards or by electronic means, remains the responsibility of the individual, group, corporate body, establishment, etc in any country of the world. Increasingly government departments are turning to private security as a cost-effective means in the same manner as individuals and entities. In a historical sense, private security has come a full circle. In a feudal society the concept of private security has not changed in thousands of years, in today’s modern world the same principles apply. Tribal, clan chiefs, etc had private bodyguards paid out of their own pockets, it is the same today. The Swiss Guards at the Vatican were formerly called “mercenaries”, in fact they exist as a living model for private security through the ages. Most monarchs and absolute rulers preferred “mercenaries” from other countries to protect them against their own people. These mercenaries sometimes took control of the State itself, e.g. as recently as in Comoros Island in the Indian Ocean. To distinguish between private security and private armies, that fine line may be blurred. It is, therefore, understandable why any government would like to regulate the private security services industry, in the wrong hands a weapon designed for personal protection could well become a weapon for coercion or destruction. This business can be a double-edged sword for some entrepreneurs, more often than not those who have reasons to be afraid and/or jealous of will move Heaven and Earth to damage the success of the enterprise as well as the individual himself. Merit will always remain a disqualification in the eyes of the inferior and the incompetent.

Private security as an organized commercial entity came to Pakistan in the early 80s with a Joint Venture (JV) between a Pakistani and a US company, known primarily for its Cash-in-Transit (CIT) services. Between 1984 and 1986, there was a virtual monopoly of all private security in Pakistan by this one entity (divided into three companies for tax purposes). The absolute domination of one single person over private security in Pakistan faded and despite his underhand efforts, by 1987 other companies had started to come on-stream.  Over 130 companies having No Objection Certificates (NOCs) from the Federal and/or Provincial Governments are now functioning satisfactorily throughout the country.  In fact only 30% of the business that can be available in Pakistan has been tapped. About 45 large companies employ about 20,000 - 30,000 personnel while the balance 125 companies have about 160,000 - 170,000 personnel i.e. about 200,000 personnel work in security companies having NOCs, another 60,000 - 70,000 men work for companies not having NOCs, mainly in Karachi and Lahore. The personnel employed by companies having NOC (and those without NOC) can be doubled i.e. half a million personnel can be employed for private security purposes in Pakistan.

Take the 200,000 personnel working with the legitimate companies, the cash flow with an average salary of Rs.3,000 per month comes to Rs.600 million in salary disbursements alone (or Rs.7200 million a year i.e. Rs.7.20 billion).  On average 50% can be added for other expenditures i.e. Rs.3.6 billion.  At the very minimum there is Rs.10.8 billion in annual service revenues.  As compared to industry where we spend US$ 50000 (in foreign exchange) to create one job. What are the utilities being used by these companies in comparison to that being used by industry, electricity, gas, water, fuel, etc?  And the industry where less than US$ 200 (and that also in local currency) is necessary to create a job is not even tapped for economic potential as yet. Retired ex-Servicemen and ex-Policemen must be encouraged to invest in more private security companies, new companies are extremely necessary for the development of the industry. Similarly existing small companies must be aided to expand their services, that is the only way for the growth of this industry. As regards electronic security, a conservative estimate is that less than 3% of the market has been touched. The draft of an ordinance to regulate private security companies submitted by the Federal Interior Ministry before the Federal Cabinet for approval, has been approved for the Islamabad Capital Territory (ICT) and will serve as model to be adopted by all the Provincial Governments.  To the credit of the present government, facets of the Ordinance were repeatedly discussed at various levels. All Pakistan Security Agencies Association (APSAA) played a very critical role in the formulation of a workable document.  The Federal Interior Minister, the Interior Secretary, the Provincial Home Secretaries, etc all worked to fine-tune the draft ordinance to an acceptable compromise. APSAA’s worries about bureaucratic intercession affecting operational effectiveness, were positively addressed.

With the merging of the mostly Punjab-based SSWF with APSAA on October 2000, 110 of the 130 companies having NOCs have come together on a common platform in the only association recognized by the Director Trade Organisation (DTO) of the Ministry of Commerce.  Vested interest in the form of the original monopoly tried its best to scuttle the process because of “security reasons”. APSAA’s Managing Committee of 10 members chosen by direct vote of every member company every 2 years in turn chooses a Chairman for a year’s tenure (the Chairman cannot succeed himself). Over the eight years APSAA has been in existence all policy decisions are taken in General Body Meetings. A farce of a “pocket association” of less than 10 companies has the owner of the JV as the Chief Patron and his senior executives are office-bearers, in any case the other companies are quite unknown to the security services industry. The JV company vehemently opposed new companies from being incepted, supporting imposition of Rs.2 million as a first-time registration fee to discourage new entrants.  It was pointed out that smugglers could afford this exorbitant fee but genuine entrepreneurs in this business field (mostly retired ex-servicemen risking their commuted life pensions) could not. Lt Gen Moin Haider, the Federal Interior Minister brought the fees down to reasonable limits in line with APSAA stand. Whether one uniform for all companies,  procedure for issuing new weapon licences, inspection standards and procedures thereof, verification of personal, code of conduct etc were all debated frankly and consensus arrived at. Three matters are still agitating APSAA viz (1) the deliberate use of soft skin vehicles for Cash-in-Transit making these vehicles virtual death traps for the occupants (30 previous lives have been lost in the last 5 years, six as recently as six months ago) (2) inadequate compensation for the families of the men by those who used these soft skin (mostly Suzuki) death traps to get a paltry  Rs 300-400 per trip and (3) use of left hand drive armoured vehicles in utter violation of the country’s vehicle registration rules which govern route permits and do not allow such vehicles. Taking note of this, the government  gave strict instructions for not using soft skin vehicles for cash transit but as regards left hand drive vehicles, significant influence was used with the bureaucracy to block any enforcement of the rules. As regards compensation for those killed in the death traps, the widows and families do not have enough financial strength to obtain good legal assistance to pursue their claims, they have been given paltry sums as insurance. In this display of callousness they are not alone, when the banks were approached that such practice must stop, their usual answer was “the insurance covers the amount lost, how the cash is transferred is not our problem”. The question arises, do the insurance companies cover movement of cash in soft vehicles and what about the loss of precious human lives because of the callousness of those using soft-skin death-trap vehicles for their profit? For every man APSAA member companies lose, other than what the insurance claim pays and what the company also pays out, every member of APSAA voluntarily donates an amount to the widow in the form of an APSAA cheque.

With a large body of blue collar workers in the country, particularly ex-servicemen, it is the government’s interest that the private sector create jobs for this large workforce. It is also in the government’s interest to ensure that rules are imposed on everyone according to the same standards. Private security not only provides the citizens with additional individual safeguards but is a force-multiplier for the economy in creating jobs at very small cost.

(Ikram Sehgal is presently Chairman, All-Pakistan Security Agencies Association, APSAA, for the year 2000)