Regulating Security Sector

Private Security Sector

BOTH PUBLIC AND PRIVATE authorities agree that, over the past decade, Mexico’s private security sector has grown exponentially, with ever-increasing demand for private security guards. However, a lack of formality […]

BOTH PUBLIC AND PRIVATE authorities agree that, over the past decade, Mexico’s private security sector has grown exponentially, with ever-increasing demand for private security guards. However, a lack of formality and regulation in the sector has made it difficult to properly measure growth statistics. Official numbers from the Consejo Nacional de Seguridad Privada estimate that the private security sector is growing at around 8-12% annually, compared to around 2-3% growth in the overall economy. However, unofficially, many industry leaders have claimed that demand for private security services is growing at a rate between 40-60% per year.

The authorities estimate around 8,000 private security companies operate in Mexico, and that around 75% of these are informal companies that are not registered with the government and do not pay taxes. The National Security Commission (CNS) is the government organization charged with regulating the sector on a federal level. In an interview with TBY, Juan Antonio Arambula Martinez, Director General of Private Security of CNS, explained that one of the challenges is the different levels of regulation that exist for private security companies. Security companies must register with the government of the state in which they operate, and are only required to register with the federal government if they plan to operate in more than one state, which includes transport services that cross state lines.
In 2010, the federal Private Security Law was updated to include more stringent requirements for companies wishing to register with the federal government and to increase penalties for companies operating without permission. However, the law resulted in many companies registering themselves in different states using different company names, rather than dealing with the bureaucracy required to register on a national level. This has further complicated efforts to understand the true growth of the sector, as many companies are registered under different names in different states.
Arambula explained to TBY that the CNS is now working to develop a new law that will apply the same regulations across all states. The government is not the only organization working to improve regulation in the sector. In 2013, the largest companies in the private security sector came together to form the Asociación Mexican de Empresas de Seguridad Privada (AMESP), which raises awareness about the dangers of working with informal security companies and lobbies the government to improve the regulatory environment.
There have been debates as to what has driven the increase in the private security sector over the past decade. While the sector began its recent growth trajectory in conjunction with the increase in security problems Mexico experienced around 2008-2010, there are different perspectives on the drivers of its current growth. Most representatives of the private security industry point to an increased perception of insecurity in the country. This coincides with the results of the National Urban Public Security Survey run by the National Institute for Statistics and Geography, which shows that the perception of insecurity in urban areas has increased to its highest level in years.
Regardless of its cause, increased insecurity—real or imagined—has economic consequences. According to the Mexican Association of Private Security, Tracking, Information, and Intelligence, the sector generates around MXN160 billion (USD9 billion) annually, or around 1% of the country’s GDP. A new report by the Banco de México, Mexico’s central bank, shows that according to surveys of economists and businesspeople, insecurity is now seen as the number-one impediment to increased GDP growth in Mexico. However, other figures, particularly representatives of the government, have argued that the growth in the sector is actually the result of a positive trend, namely an increase in GDP, and, therefore, an increase in both the disposable income of individual homes and in the ability of companies to purchase non-essential services like security. œ–

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