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Security firms offer hope for Latin American businesses

Katherine Corcoran
Associated Press

Mexico City – — A panic alert flashed across Alberto Herrera’s computer screen. Men claiming to be with the notorious Gulf Cartel had stopped a convoy transporting chemicals through a lawless region of northeastern Mexico. They seized two drivers from an escort truck and demanded the valuable cargo in exchange for their release.

Giant flat-screen monitors blinked with the GPS locations of dozens of vehicles carrying cargo coveted by criminals. The phone chatter and chirping two-way radios sounded like a police dispatch center, but this was the emergency response room of International Private Security, a Mexico-based company that helps international clients like PepsiCo, Audi and BP do business in regions plagued by organized crime.

A direct line to Mexico’s federal police sat on Herrera’s desk, but he had orders from this client not to use it. Instead, the client’s crisis team negotiated the release of the drivers and their cargo.

“They didn’t want us to call the police,” said Herrera. “People don’t necessarily trust the cops.”

Distrust of police has made private security a big business in Latin America, where a majority of police forces are deemed incompetent or corrupt — or both. An army of nearly four million private security agents make up an industry growing 9 percent a year and projected to reach about $30 billion by 2016. That’s more than the economies of Paraguay or El Salvador.

IPS alone has doubled its employee ranks to 4,000 over the last five years. Across the region, private guards outnumber public officers beyond the global average of 2-to-1. In Brazil, it’s 4-to-1; in Guatemala, 5-to-1; and in Honduras, it’s close to 7-to-1.

While private security is growing worldwide, Latin America’s boom directly relates to rising rates of homicide, kidnapping and extortion.