Security Industry Booms as Peru Lawlessness Grows : Violence: It is estimated that companies spend more than $150 million annually on security to protect themselves.

Gone are the days when an attractive receptionist greeted you at a business in Lima. Today you’re met by a gun-toting security guard in a bullet-proof vest who searches you for explosives.

Metal bars cover grocery store windows, and barricades are set in front of banks. Businessmen train to handle firearms and employ 24-hour bodyguards to protect against the kidnapers, robbers and terrorist violence rife in Peru.

Amid the country’s economic and political chaos, the security business is one of Peru’s few growth industries. And no businessman knows the need for protection here better than Julio Favre.

Maoist Shining Path rebels sacked his farmhouse in Huacho, 90 miles north of Lima, four years ago and publicly targeted him for death. In June, 1990, they burned his canning factory to the ground.

“Right after this I made the decision that I had to keep working in Huacho. I had to arm myself. I had to defend myself. It was going to be them or me,” said Favre, who now hires guards and a private army to defend his factory.

President Alberto Fujimori is counting on free enterprise and foreign investment to rescue Peru’s shattered economy. But the Shining Path--10,000 militants strong, whose tactics are designed to ensure the economy’s destruction as a step to seizing power--poses a serious obstacle.

Nearly 25,000 people have died in political violence since the Shining Path took up arms in 1980.

Business Risks International, a security consulting firm in Nashville, Tenn., last year ranked Peru as the riskiest country for business, ahead of El Salvador, India, Turkey and Colombia. The Confederation of Peruvian Industrialists estimates that companies spend more than $150 million annually on security to protect themselves in Peru.

The growth of Peru’s security industry mirrors the country’s decline into lawlessness. No business is safe, and the police can’t be counted on for protection.

In 1980, there were 41 security companies in all of Peru. After a rash of kidnapings between 1985 and 1990, the number grew to 233. In 1991, as guerrilla violence spread, 90 new security agencies opened.

“The way things are going, it would seem that security guard is the career of the future,” weekly newsmagazine Caretas noted in an issue last November.

Most security businesses simply provide guards to protect entrances. But some Lima companies are very sophisticated and highly secretive.

A company owned by Israeli security experts specializes in comprehensive security studies. Javier Santa Cruz, the company’s project manager who spoke on condition that the firm not be identified, said he normally performs background checks on a client’s employees and associates.

“There are infiltrators in all of the large unions and the factories,” he said. “They already know who your wife is, who your lover is, where your son goes, if you have horses, what you do on Sundays, if you have a house in the country. They have all the information.”

Hiring professional protection can keep the militants away, but it also costs a family much of its independence. Parents are often resigned to the new restrictions, but their children find it hard to adjust, Santa Cruz said.

“It’s worst for the children between 16 and 22 years old, kids who usually go out to discos, to the movies, who have boyfriends or girlfriends,” Santa Cruz said.

Other businessmen pay protection money to guerrillas, but not Favre, who’s become a symbol of defiance for Peru’s business sector. “Frankly, to pay protection money is a cowardice on the part of businessmen,” he said.

One month after his factory was destroyed, Favre built a new plant surrounded by walls and watch towers and raised a private army of 70 men to defend it.

When the Peruvian military needed to fight guerrillas in the area, but lacked resources to establish a base, Favre turned his farm over to a detachment of 150 soldiers. He helps pay for their provisions.

He also hired guards to protect himself and his family and installed an iron fence in front of his office in Lima’s fashionable Miraflores neighborhood. A guard with a metal detector searches visitors.

Favre doesn’t give details about the bullet-proof cars or the bodyguards who protect his home and his family. The semiautomatic pistol on his desk is always within reach as he talks.

Now he says he feels safer, but he’s also paying the price. The earnings from his farm export businesses are consumed by the cost of the training and equipment he provides for the men who guard his factory.

“I’m practically working only to pay my security and that of my workers,” he said. “It would be 10 times cheaper for me to leave and live in Europe.”