- Published on Sunday, 12 January 2014 10:59
KUALA LUMPUR: Security companies that lease out their licences to smaller companies are the real culprits in hiring illegals as guards, writes Shanti Gunaratnam.
WITH about 90,000 illegals masquerading as licensed security guards, the country's security services, which is worth RM4 billion, is a ticking time bomb.
Viewing the industry as nothing more than a business venture, some unscrupulous licensed security companies are leasing out their licences to all and sundry, including thugs.
"Some of the licences are leased out to gangsters, who in turn, hire illegals to work as security guards at a cheaper rate," said Security Services Association of Malaysia (SSAM) president Datuk Shaheen Mirza Habib.
He said about 10 per cent of the 751 security companies had leased out their licences to smaller companies that were the real culprits in hiring illegals as guards.
Shaheen said the problem arose because too many security company licences had been issued in recent years.
"There are too many companies fighting for a share of the pie, unlike in the 1980s and 1990s when there were fewer companies and the industry was better regulated."
The industry hired about 220,000 security guards compared with 112,000 in the police force, he added.
"Until 2000, the industry was carefully regulated. When the number of security companies grew, more problems cropped up."
Although the Security Service Act 1971 states that only Nepalese and Malaysians can be employed as security guards, the law is being openly flouted judging by the number of Indonesians, Bangladeshis, Indians and Pakistanis employed as security guards.
"There are unscrupulous members of the industry who had franchised their licences to make money. The franchisees charge between RM8.50 and RM9 per hour, per guard but many of them undercut to make money.
"When they pay less, it is only the illegals who will work for them. And many of them do not have overheads to worry about. When something happens, these guards are not on the Home Ministry's checklist. So they are, in effect, non-existent."
He said an operator with 200 illegal guards made about RM250,000 per month because he did not have overheads to worry about and his guards did not go through any vetting process.
By hiring illegals, he said, many security companies were giving these people "blank cheques to run riot".
"The association has been telling the Home Ministry not to issue so many licences. From 2006, the ministry has been issuing at least 10 to 20 licences monthly although a few would have been good enough annually."
Shaheen said the ministry should come down hard on the unscrupulous licensees by revoking their licences.
He said some condominium management companies and residents associations were also guilty of hiring illegal guards.
"Illegal guards are cheaper as they are happy with a RM1,200 or RM1,300 monthly salary. Legal guards get RM2,200 a month with overtime."
The association is urging the ministry to take Joint Management Boards, Joint Management Companies and property management companies to court for harbouring illegals if they are caught employing illegal guards.
He added that Malaysians would take up the job of security guards if they were paid the right wages.
Shanan Nadarajah of Golden Triangle Security Services said many foreigners, including Indonesians with fake identity cards, had been employed by security companies.
"The problem is created by companies that franchised out their licences to smaller companies. The smaller companies, not wanting to pay top dollars as required by the government, will pay RM5 per hour per guard to keep costs down.
"The smaller companies also do not not bother to check the guards they hire."
He said many security company licence holders were putting profit over security.
"Some of the licence holders are giving out their licences to as many as 10 companies.
For example, if one company is paying them RM20,000 per month, can you imagine how much they will be making a month?"
Shanan said when this practice stopped, the quality of guards hired by security companies would improve.
V. Murali, the operations director of a security company, said the major issue was there were too many security companies compared with six years ago when there were only 400.
Licence holders, he said, were hungry for business and instead of running the show themselves, they preferred to make money the easy way.
"Their priority is usually to franchise the business because by doing so, they will earn six per cent in service tax and five per cent in franchise fee, and collectively, it is 11 per cent income for them.
"Franchising is not a crime, but the principal should regulate the business by following the Home Ministry's guidelines. They should ensure the quality of guards and also their welfare."
Murali said the government's formula for hiring security guards was a good one but some licence holders just "close one eye" because of greed.
"Both the licence holder and franchisee should strictly abide by the ministry's rules and regulations."