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The NZ Security Industry: The Future

Hon Paul Swain

20 June, 2002 Speech Notes

The NZ Security Industry: The Future

When I attended your conference in July, 2000 I listened to your concerns and spoke about understanding the need for changes in the industry. As Association members will be aware, since that time the government has acted upon those concerns. Over the past year we have had officials carry out a review of the Private Investigators and Security Guards Act. The Act hasn’t undergone any major changes since it first became law in 1974 so the current overhaul is well overdue.

You will be pleased to know that the review is now well advanced. But it hasn’t been an easy exercise. The security industry is very diverse and there are many issues to deal with, not least of which are high compliance costs, the Act’s restricted coverage and poor levels of compliance with the licensing requirements.

I am pleased to tell you that the government has recently made some “in principle” decisions about the directions of the revised regulation. These will be subject to implementation details being worked out, including costs. Several other important matters remain to be determined. Nevertheless, the form of the new legislative regime is now taking shape. All going well I expect final decisions on the review to be made later this year.

The New Zealand Security Association has provided invaluable input to the review and careful consideration has been given to all of its suggested proposals for reform.

A number of the government’s “in principle’ decisions reflect the NZSA’s proposals. While there are other aspects of the proposed regime that do not reflect the NZSA’s preferred position, I think that in general both the NZSA’s leadership and its members will be satisfied with the direction in which we are heading.

Matters to be resolved

Usually when reviews of occupational regulation are carried out, the first thing to be asked is whether we need a licensing regime at all, or can licensing be dispensed with entirely? This was never really an issue with the security industry. The risks of de-licensing - risks to people, to property and to privacy - were simply too great.

The most important matters we identified as needing to be addressed were:

- Who should require a licence or certificate and on what basis should these be granted?

- How can enforcement of the Act be improved? In particular, how can we best respond to complaints about unlicensed and uncertificated persons working in the industry? What should be the penalties for non-compliance with the Act.

- And finally, how can the Act be administered more efficiently and/or cheaply? In particular:

„« Should responsibility for making decisions about licensing remain with an independent registrar? Or should it be transferred to a board with industry representatives? Or even the District Court?

„« Should licensees and certificate holders have to go through the full re-licensing process every year, as at present, or could the need for re-licensing be reduced?

„« Who should provide day-to-day administrative support to the body responsible for making licensing decisions? Currently this is the Department for Courts and the Registrar is serviced from the Auckland District Court. Should this continue to be the case?

Decisions to date

So, what are the “in principle’ decision taken by the government?

Who will need a licence or certificate?

To begin with, everyone who currently requires a licence under the Private Investigators and Security Guards Act will continue to require a licence.

Employees of private investigators and security guards will also continue to require a certificate of approval if performing work for which their employer requires a licence.

What is likely to be a new feature of the legislation is that persons carrying on the business of providing

- bodyguard services

- security consultancy

- confidential document destruction, and

- crowd control (for instance, at licensed premises or at a sports event)

will also require a licence.

In addition, all crowd controllers, whether employed by a licensee under the Act or not, will require a certificate of approval. In recommending this change, I have been influenced by the disquiet felt by many about the risks to person and property posed by unregulated crowd controllers. The definition of crowd controller will cover someone employed principally to keep order - a category that, in the case of licensed premises, is more-or-less synonymous with bouncers. Ordinary bar staff will not be covered.

I realise that this change will be controversial in some quarters. However, it is difficult to justify leaving those performing this role outside the ambit of the Act, given the potential for this work to both prevent and precipitate violent confrontation. Requiring certification of crowd controllers does no more than bring us into line with Australia.

Qualifications / disqualifications for a licence or certificate

Currently the Registrar of Private Investigators and Security Guards must be satisfied that any applicant for a licence or a certificate of approval is a “proper person” to hold the licence or certificate. In the case of a company, the Registrar must be satisfied as to the “personal character and fitness” of each officer of the company.

The government has decided in principle to drop this requirement. There has been a move in recent years in occupational licensing towards “objective’ criteria for granting, refusing or canceling licences. Such criteria can be readily verified, unlike the more subjective judgments required for the “proper person” test.

The use of objective criteria makes the process easier, less expensive to administer and more transparent. A number of objective criteria, for example the absence of relevant convictions in the previous five years, will be specified in the Act as a requirement for licensing.

I am conscious that rigid adherence to such criteria alone may result in unfairness in some cases. The government has therefore indicated that the licensing body will still retain some discretion to enable individual circumstances to be considered in appropriate cases

For example, this might mean that:

- A certificate may not be cancelled where the holder has been subject to a conviction where to do so would be out of all proportion to the gravity of the conviction; or

- an applicant might be granted a private investigator’s licence where he or she has not worked in the industry for the requisite period, but has acquired relevant experience working for the New Zealand Police.

While this change should aid administration of the Act, from the point of view of an applicant or licence or certificate holder, little is likely to change.


I am aware of the industry’s concern about the current lack of enforcement of the Act - in particular, about the small number of prosecutions of unlicensed operators.

Statistics bear this concern out. It is clear that there are many unlicensed operators in the industry. Yet over the five-year period from 1997 to 2001 there were just 10 prosecutions nation-wide by the police for offences under the Act. A very low figure by anyone’s estimation.

The reason is simple. While the police have responsibility for enforcement, it is understandable that chasing down unlicensed security guards and private investigators, or enforcing other aspects of the Act, slips down the list of priorities, especially when confronted with crimes such as assault, murder and burglary.

While the present lack of enforcement is understandable, it should not continue. The government is looking at ways of improving enforcement. One option being given serious consideration is to fund enforcement through a levy on licence and certificate holders paid for by certificate and license fees.

The money raised would be allocated to an enforcement unit charged specifically with enforcing the Act, possibly along with other occupational regulation statutes. Any prosecution of unlicensed operators, is likely to be in response to complaints received. It would simply be too costly to provide for any form of more active monitoring.

Any sum levied would reflect the extent of enforcement activity expected to be associated with this Act only. It would not go towards other purposes.

Final decisions on the most appropriate placement of this enforcement unit have yet to be made, as have the maximum level of financial penalties for breach of the Act. Current penalties are out of line with those imposed in similar legislation. It is likely that they will be increased and set with deterrence in mind.

Administration of the Act

In thinking about administrative arrangements, two considerations have taken priority. They are:

- The need for a licensing authority that is independent, and seen to be independent, from interests within the industry. This is necessary in order for the licensing authority to have public credibility; and

- Cost. The more cost effective the administrative arrangements, the lower the fees for licensing and certification. I know that the issue of compliance costs has been a pressing one for the industry over recent years.

Among the matters we have considered is who should make licensing decisions. Various options have been canvassed, including having a board consisting of industry representatives perform this function. This option would go some way towards meeting the industry’s desire to have its own representatives involved in the licensing process. However, the government is concerned that this would not ensure independent decision-making. Public credibility depends on this. It would also be more cumbersome and costly than having just one decision-maker. We have therefore decided in principle to keep the existing arrangement, with a Registrar having responsibility for issuing, declining, suspending and cancelling licences, subject to appeal to the District Court.

However, we consider that licenses and certificates should only have to be renewed every five years, not annually as at present. This should impact positively on fees, as the advertising and checks that must be carried out prior to re-licensing need also only be carried out every five years. There will be a requirement for annual “updates’ - letting the Registrar know of changed business or personal details - but at a minimal cost. There will also need to be arrangements to ensure the Registrar is aware of any offending by a licensee or certificate holder during the licensing period

I am aware that there has been much criticism of the Department for Courts’ servicing of the Registrar in the past. Among other things, there have been complaints that the Department’s manual recording system prevents industry members from ascertaining whether their competitors ,and their competitors’ employees, are licensed or certified. Industry members have also voiced a suspicion that fees are pitched far beyond a sum that can be justified in terms of the service provided.

Officials are working to address these concerns and to ensure that fees paid directly relate to the services provided. This will involve further thought about which agency is best placed to service the Registrar.

Other Matters

In addition to the work that remains to be done on improving enforcement and administration, the government has asked officials to report back with further information on standards development and training for industry members. Both the Security Association and the government are keen to ensure the high quality of services provided by the security industry. However, I am also conscious of the fact that training and standards development can be expensive. It is important that the industry gets value for any additional fees that may be charged for this purpose and that any training required is both relevant and accessible.

One possibility officials are looking at is whether now, or at some time in the future, a condition of licensing or certification for crowd controllers should be the completion of an approved training course, and/or perhaps compliance with a particular code of conduct. It is unlikely that such training would be onerous - the current thinking is perhaps a one-day course covering the basic requirements and responsibilities of the job.

While decisions made to date indicate that the industry is not going to be left to regulate itself, it can nevertheless play an important role in improving and maintaining quality standards. One likely option is that an industry committee will be established to look at the whole matter of training. We will be discussing further the implications of this with industry representatives over the coming months.

Officials have also been asked to report back on the vexed section 52 issue. As many of you will be aware, there are currently quite strict legal restrictions on a private investigator’s ability to tape or film people without their written consent, even where the investigation is into possible criminal offending. Due to ongoing privacy concerns, it now seems that it may not be possible to repeal section 52 in its entirety. I know this will not please all of you. However, work is continuing on this matter and it looks as if it will be possible to amend this provision in such a way that private investigators can carry out their work more effectively, without compromising an individual’s right to privacy.

Next Steps and Conclusion

So, where do we go to from here?

All going well I hope to make further announcements about regulation of the industry later this year. By that time officials should have completed work on implementation issues and the government should be in a position to make final decisions.

Once the new bill is drafted and introduced into Parliament, it will go through the usual process, including consideration by a select committee. At this point, you, your association, or anybody else, will have the opportunity to have your say and help influence the final shape of the legislation. I invite you to take the opportunity to do so.

While there is a way to go, we are now well down the track towards reform of the security industry. I’m very pleased to be part of this reform process and look forward to a piece of legislation that meets the needs of the industry and continues to encourage the maintenance of high standards within it.


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