Security personnel from a private company guard a factory gate. Supplied
Despite significant pre-pandemic growth, 26 private security service companies have declared bankruptcy and been removed from the Ministry of Interior’s registry.
Economists suggested the closures likely stemmed from compliance challenges, a decline in revenue, and the increased use of security cameras.
On January 27, Minister of Interior Sar Sokha informed the Ministry of Commerce that although the businesses had previously applied for business licenses, the interior ministry has determined that the companies are no longer trading.
This was in violation of Article 1 of Sub-Decree No. 289, which concerns the management of private security services. As a result, they were removed from the list of licensed private security service providers.
Hong Vanak, an economic researcher at the Royal Academy of Cambodia, told The Post on January 28 that the companies were removed because they were no longer able to operate.
He explained that they may have failed for a number of reasons, such as declining company revenues, a high number of competitors or internal issues.
Vanak also noted that many business owners who had previously hired numerous security personnel had opted to reduce staff numbers and instead turned to security cameras as a substitute.
“In the cycle of any company or business, growth and decline are natural occurrences. The closure of these companies might also be due to seeing others succeeding and deciding to enter the market, despite a lack of expertise,” he added.
Lor Vichet, vice-president of the Cambodia Chinese Commerce Association (CCCA), believed that the widespread use of security cameras so many locations, from public spaces to offices, factories and private residences, has made a major contribution to the decline of private security services.
He explained that the costs associated with installing cameras do not require ongoing monthly expenses, unlike hiring security personnel.
“Most business owners are trying to reduce costs. Therefore, wherever it’s possible to install cameras, they will do so, except in places where security personnel are needed for surveillance or tracking goods, which cameras cannot do. In these cases, they still need human security staff,” he said.
Vichet added that with fewer private security companies, now might be an excellent time for the authorities to strengthen the quality of the remaining ones.
