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Puerto Rico’s Private Army


March 18, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

Security is a big industry in Puerto Rico. Surprisingly, it’s the private sector that handles the bulk of it.

The private security industry alone is reported to employ some 60,000 guards, a force roughly three times the size of the state police, representing annual expenditures of $844 million, including payroll and equipment.

Those figures don’t include private detectives (some 1,200), investments by some large institutions that maintain in-house private security forces–some banks, for example, have their own–or purchases of hardware, software, and electronic devices for private homes, industrial and commercial buildings, and other entities.

When you add to that the state’s public security forces, the numbers become more staggering. There are approximately 21,000 state police and 4,750 municipal police officers, representing a combined annual expenditure (payroll and equipment) of some $794 million.

In total, the security industry, both private and public, employs at least 86,000 people and pumps into the economy no less than $1.6 billion every year. Those numbers don’t include state and federal prison guards or other federal-agency security forces.

That’s big business in any league. But it’s nothing to be proud of. The staggering growth of the security industry on the island is the direct result of the increase in crime in the past few decades. A casual visitor from the U.S. mainland in the ’70s would have remarked on the fact that virtually every home on the island had wrought-iron gates and bars on the windows.

In the early ’80s, a spike in crime brought along the first closings of formerly open housing communities. First it was the high- and middle-income neighborhoods; later, even the public housing developments were closed to outsiders. Today, no real-estate developer would dream of designing a new subdivision without controlled access. It just wouldn’t sell. The controlled-access guard post has become the rule in virtually every neighborhood in communities across the island. Guard posts need guards, sometimes 24 hours a day, seven days a week. You do the math.

The phenomenal growth of the private security industry in Puerto Rico is also an indictment of the state’s inability to provide adequate protection to its citizenry. The problem crosses party lines. Although some recent administrations have been demonstrably more effective than others at curbing crime and providing a more secure environment, the fact remains that the private security force in Puerto Rico is three times the size of the state police. If all that private security weren’t in place, how much more crime would we have in our neighborhoods and in our businesses?

Admittedly, not all private security companies are the same. They don’t necessarily train their guards to the same level or offer the same quality of service. In fact, one of the big complaints by legitimate private security companies is that they are being undercut by illegitimate fly-by-nights that don’t even obtain the required licenses from the Police and Labor departments for some or all of their guards. By skipping the licensing requirement, these companies avoid posting the required bond, which amounts to 10% of payroll, and save on liability insurance. Of the 60,000 private security guards on the island, only half have the required licenses.

The roughly 30,000 unlicensed private security guards do provide a presence that helps to dissuade criminals. Yet, legitimate private security companies complain that it is difficult to compete for contracts when there’s so much price undercutting by unqualified companies with hardly any overhead.

They’re right. Government enforcement agencies must do their job and crack down on the unlawful practices of private security companies that may be operating without the required licenses, and not just because it may be hurting the business of those who abide by the law. What’s at stake is the adequate protection of citizens’ lives and property. If the government can’t provide the level of security we need with state and municipal police, the least it can do is effectively regulate and supervise the private security companies that have had to step up to do the job.

This Caribbean Business article appears courtesy of Casiano Communications.
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