Private security companies struggle to go abroad due to legal restrictions

By Liu Xin Source:Global Times Published: 2015-12-23 20:58:01

A female trainee from a Beijing-based bodyguard training camp practices her skills on November 17, 2013. Photo: CFP

 Chinese enterprises' demand for security overseas is rapidly increasing, but the efforts of private security companies (PSCs) to go abroad are being hindered by insufficient policy support.

According to a report issued by the non-governmental Chahar Institute think tank, the number of Chinese companies going abroad exceeds 40,000 and over 1 million Chinese nationals are working overseas for those companies.

Huge market

The task of protecting Chinese enterprises overseas is daunting, especially as the current sources of security - such as seeking consular protection and the authorities taking military action - are insufficient, read the Chahar report.

Zhai Leiming, deputy director-general of the Department of Consular Affairs of the Ministry of Foreign Affairs, said in April that Chinese consulates are understaffed. "Each employee is responsible for protecting 200,000 citizens. No nation in the world has ever dealt with such a huge task," Zhai said.

"Chinese embassies in high-risk areas could offer limited help and sometimes State support may come at a high political cost. It is necessary that private companies fill the gap, organizing rescue operations and providing everyday security," Zhang Yan, deputy general manager from Zhongjun Yingji Management of Risk GmbH, a PSC, told the Global Times. Chinese enterprises spent $8 billion on overseas security in 2014 based on conservative estimates, according to the report, which added that many Chinese PSCs want to tackle this huge market.

"The demand is huge especially as more Chinese enterprises will go abroad inspired by the Belt and Road initiative. We are now trying to expand our business to more countries, including Pakistan and Bhutan," Tao Dexi, a manager from the Beijing-based Ding Tai An Yuan Security Technology Research Institute, a PSC, told the Global Times on Tuesday.

According to Tao, their major clients are firms working in Iraq involved with construction, railways, petroleum and chemical industries and they usually offer risk assessment services to these enterprises, provide security training advisers and organize counter-terrorism training.

Staff shortage

"Although the market is promising, domestic PSCs need to do more if they want a slice of the cake," Tao said.

"Our company has been doing business in Nigeria for more than 10 years, and usually hire Western PSCs," an anonymous employee from a Chinese enterprise based in the West African country told the Global Times.

Compared with Western PSCs, Chinese companies started late and have not built a standard operating procedure for their overseas business, said Zhang, adding that employees of PSCs in developed countries may also have language and experience advantages.

According to Tao, Chinese PSCs usually recruit ex-special forces soldiers. The companies give them language training before deploying them abroad. "Chinese PSCs also need more management staff with a good command of English and knowledge of security. These people could communicate better with different circles in local countries, clients and employees, and promote the business," said Tao.

Policy barriers

But the biggest obstacle to Chinese PSCs going abroad is the fact that the government does not support their efforts, said Zhang.

According to China's Criminal Law, those who possess weapons overseas - even if they are doing so according to a foreign nation's laws - may face a maximum sentence of seven years in prison. As Chinese PSCs are banned from sending staff abroad, PSCs' security guards are technically employees of clients, rather than PSCs, once they are sent abroad, according to the report.

 "These regulations force us to hire local security guards who can use weapons to patrol outside the enterprises and the Chinese PSC takes responsibility for the inside area. This makes security management harder," said Zhang.

Zhang Dongfang, who worked as a security guard on an oilfield in Iraq for four years, was quoted by Southern Weekly newspaper as saying that if he saw a potential threat he could only report it to police. There is also a trust issue between local and Chinese PSCs. According to Zhang, foreign employees may run away when there is an emergency, and Chinese enterprises prefer domestic PSCs.

Han Mingfang, deputy director of the Foreign Affairs Committee of Chinese People's Political Consultative Conference National Committee said in an article on the news portal that Chinese PSCs should be allowed to be armed as this could better protect Chinese interests abroad.

Han said that China should make security guards applying for visas easier, open shooting ranges for PSCs to train their employees and encourage cooperation between the military and PSCs.

Kou Liyan, deputy research fellow with the China Center for Contemporary World Studies, said that most of the countries that attract Chinese investment have immature legal systems, and many issues have to be dealt with via non-institutional channels.
Newspaper headline: Hamstrung defenders

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