Private Security Agencies (India)
The security market in India is estimated at around USD 1 billion in 2009 and expected to be USD 9.7 billion by 2016. The market can be broadly divided into two categories: the Manned Security Industry and the Electronic Security Services Industry (ESS). Of the two, manned security industry has witnessed an impressive growth of over 25 % CAGR in the past 5-7 years. The sector has received major boost in the demand owing to the poor police-citizen ratio. We have over 6-7 million private security guards available as compared to 3.2 million police officers. Around 15000 companies (both unorganized and registered) operate in the space.
However, with the introduction Private Security Agencies (Regulation) Act, while the much needed regulatory environment was established, the regulation suffered from some serious lacunae that consistently acted as impediments to the growth of the industry. Until the Act was formulated, private security agencies in India were functioning without any government control for almost 15 years. The central government drafted the law in 2005 and encouraged the states to enact & enforce it. Many States did enact it but enforcement has been inconsistent and incomplete. Some of the concerns stemming from the act include:
No clarity on carrying arms by the PSA’s
The private security agencies (PSAs) are involved in a variety of operations that essentially require armed security personnel. It is estimated that more than 6000 cash vans ply across 600 districts in the country transporting crores of cash every day for banks. Private sector banks have to rely upon thousands of private personnel security. Similarly, guarding of ATMs, jewellery stores, fuel stations, toll booths and bank branches requires armed guards. Even the hotel industry is witnessing a surge in its demand for armed guarding services after 26/11.
Ironically enough, the two main Acts pertaining to the private security agencies have a radically different provisioning for carrying arms. While the Private Security Agency (regulation) Act has nothing defined, the Arms Act, 1959, only allows individual applicants to hold arms licenses. As a result, private security agencies have been technically compelled to employ people who hold Arms License in individual capacity. Also note worthy fact is that the firearms issued to individuals have restrictions in terms of territories in which they can be used. The Arms act severely curtails the ability to pool armed guards in an efficient manner to service clients and can be particularly difficult in case of inter-state transfer of goods/personnel leading to hiring of personnel holding licenses from different states.
Since PSAs cannot have license in their name, they are forced to employ people who have arms license in their individual capacity / without proper background check, thus limiting the choice and quality of recruits. Due to limited number of availability of such people, which gets further restricted by the quality, private security agencies are unable to meet customers demand for armed security services. Besides, the authenticity of individual arm licenses is another issue. There is a need for a re-look into the PSAR Act and to explore the possibility of issuing arm licenses to PSAs. Appropriate notification could be issued under Arms Act, permitting PSAs to obtain arm license with certain compliance and audit clauses.
Directors of PSA directly responsible for any act/omission on part of security guards while rendering services.
In such scenarios, the concerned director is also summoned by the respective controlling authority. Some of the PSAs are present in multiple locations and are also offering pan India services. The director is generally stationed at the registered / corporate office, while the regional offices are headed by branch head / facility in-charge. The process in connection with such violations should involve branch head / facility in-charge as the first point of contact. The director should only be summoned in cases of serious breaches or in the absence of any such person in-charge being nominated by the PSA. The Act needs to be re-looked for suitable amendments.
There is an overlapping set of central and state regulations, leading to multiplicity of registrations to conduct business.
This acts as a barrier for PSAs in providing integrated professional services on a pan-India basis. There are difficulties due to varying conditions for operation in every state, eg. Police verification requirements and processing timelines for such applications are dissimilar for most states. It is therefore, required to establish a single licensing framework under the Act.
Training requirements and mapping
The current Act ignores the fact that there are varieties of services that are provided by the PSA’s. A man guard deployed for premises security will have a different level of training vis-à-vis personnel in charge for the CCTN monitoring. The act however places all at the same level of training, making them nothing more than a semi skilled laborer.
Zero rights to detain
At present there is no clause in the Act, which empowers private security officers with right to detention. In developed economies, the private security officers can detain a suspect till local authorities take charge of the situation. Government may like to consider this possibility if private security has to become extended arm of the authorities.
In the light of these and many other concerns of the industry, we at FICCI are in the process of drafting a white paper on the possible amendments in the Private Security Agency (Regulation) Act (PSAR) 2005 to be submitted to the Ministry of Home Affairs, Govt. of India for its kind consideration. We have initiated industry consultations and you may view a note on some of these pointers by private security industries on our Slideshare channel