Prison Privatisation Report International

No. 44, November 2001

Published by the Public Services International Research Unit (PSIRU), University of Greenwich, London, England. 

www.psiru.org/justice

This publication is supported by a grant from the Foundation Open Society Institute.

 

 

        IN THIS ISSUE

 

        FRANCE

        NETHERLANDS

        UNITED STATES

        UNITED KINGDOM

        AUSTRALIA

        CANADA

        RECENT REPORTS AND PUBLICATIONS

 

 

France: new programme announced

     The French government has announced a programme which will see 27 old prisons closed and replaced by 35 new facilities. The programme, which is due to be completed by 2006, is expected to cost  some FFr 10 billion ($1.3 billion).

    The announcement, made on 24 October 2001, comes in the build up to presidential and parliamentary elections in May 2002.

    One of the stated aims is to ensure that all prisoners have their own cells. “We must take care to respect human dignity and show that the prison world must be a world of security but also one that prepares inmates to rejoin society and prevents the risk that they will reoffend,” said minister of justice Marylise Lebranchu.

    In the first instance six new prisons will be ‘semi-private’ adding to the 21 that already exist. These are expected to open between the second half of 2002 and 2004. However, a government spokesperson told PPRI that there are no certainties about where  the rest of the facilities will be located or how they might be financed and operated.

    France’s semi-private prisons have correctional officers employed by the state but the facilities are built privately  with public finance. All non-custodial services are provided by the private sector.

    As a result of the recent retendering of contracts for the existing 21semi-private prisons, current operators will be switched from 1 January 2002. For example, Sodexho will no longer provide services at prisons in the western region but will take on the contracts in the north.  Two of the six new semi-private prisons will also be in the north (see PPRI #25 and 11).

n A group of more than one hundred immigrants’ rights and prison activists from several countries occupied a tour boat in Paris owned by Sodexho Alliance on 20 October 2001.

    The action, organised by Droit Devant!!, was in protest over the company’s involvement in the operation of private prisons, detention centres and voucher schemes for asylum seekers.

    According to Jean-Claude Amara, a spokesperson for Droit Devant!!, Sodexho was chosen as a target because the company “makes profits off marginalised groups [including] prisoners, asylum seekers and undocumented immigrants.”

    Sodexho has also been the target of a campaign by students in the US because of the company’s  involvement in the private prison industry (see PPRI # 37). The company has also come under fire in the UK because  it operates a controversial voucher system for  asylum seekers (see PPRI #34). A similar scheme in Germany has been criticized by the German immigrant rights organisation Kein Mensch Ist Illegal.

 

 

THE NETHERLANDS

 

Partnerships not dismissed

    It was stated in PPRI #43 that a report on public/private partnerships,  Public Private Comparator Gevangenissen by WS Atkins, Justice Solutions International (JSI) and NEI Kolpron Finance (NEI), was presented to the Dutch parliament in August 2001.

    PPRI has learned, however, that this report was not received by Parliament. On 24 August 2001 the minister of justice presented a letter of information based on a report Independence to a Certain Degree by the steering committee of the ministries of justice and finance which had commissioned the consultants’ work (see PPRI # 38).

    The Atkins/JSI/NEI report was used as the basis for the committee’s report to the minister although not all of its content and conclusions were conveyed. The reports dealt with how further autonomy within the Dutch prison administration might be achieved as well as the feasibility of public/private partnerships for new prisons.

    The steering committee concluded, however, that there were a number of tasks which should remain integral to the government’s core business:

n the decision to determine or recognise a provision or the organisation of an institution where sanctions are allowed to be executed;

n the decision to imprison or restrict freedom of an individual where basic rights are determined;

n agreeing to engage the management of an institution and to empower them with legal authority;

n preparing and determining rules in respect of the operation of an institution.

    In his letter the minister stated that he agreed with the committee’s conclusions that there should be further autonomy within the prison service as long as complete political responsibility and democratic control, particularly in the execution of sanctions and imprisonment, were maintained.

    The committee also suggested that there should be further investigation into  the potential for public/private sector co-operation for prisons.

    In response, the minister stated that there are differences of opinion about the use of  public/private partnerships and reiterated that he did not intend to reduce state control. But he did not reject the idea of public/private partnerships outright.

    In accepting the need for further efficiencies the minister also noted that the committee had recommended starting a project to develop new collective bargaining agreements for staff in the  prison service agency. The current system of national bargaining was regarded as a barrier to further autonomy within the service.

    He also said that the steering committee’s report provides a number of ideas to change the management relationships between the ministry, the corrections agency and the institutions and that these will be worked on in the coming  period. Although, due to other priorities, he would not be submitting any suggestions for change before next year. The next general election in the Netherlands is in May 2002.

    The minister was also in favour of the recommendation that a system of  independent inspection should be created.

    For a public/private partnership prison to be established there would have to be enabling legislation and, before that,  a consultation process. As yet, no such process has been announced.

nThe prisoner population in the Netherlands has grown 300 per cent in the last 15 years from 4,000 to 14,000. But apart from one experiment where a new facility was privately financed (but publicly managed) the government has financed and managed new infrastructure to cope with this expansion. Having looked at privatisation in the UK, Australia and the United States, it was felt that the policy was not suited to the Dutch situation.

n Due to staff shortages in the western region in particular, prisons are taking on security staff employed by firms such as Group 4 and Random and training them for six weeks while they work alongside public employees. There are around 200 of these staff out of a total workforce of 8,000.

 

 

UNITED STATES

 

Industry subsidised: but in whose interest?

    Almost 75 per cent of  the large privately built and operated prisons in the US have received state, local and/or federal subsidies such as tax-advantaged financing, property tax abatements or reductions, and/or training grants or credits.

    The study covered 60 prisons with 500 beds or more located in 19 states. This comprised  half of  the private prison market.

    The findings included:

n at least 44 (73per cent) of the facilities received one or more development subsidy. The actual rate is very likely to be higher but cannot be determined because state corporate income tax credits are not disclosed;

n a total of $628m in tax-free bonds and other government-issued securities were used to finance 37 per cent of the prisons studied;

n 38 per cent received property tax abatements or other tax reductions;

n 23 per cent received infrastructure subsidies such as water, sewer or utility hook-ups, access roads and/or other publicly-paid improvements;

n subsidies were found in 17 of the 19 states in which the 60 facilities are located;

n facilities operated by the two largest companies, Corrections Corporation of America and Wackenhut Corrections Corporation, are frequently subsidised ... 78 per cent of CCA’s and 69 per cent of Wackenhut’s ... suggesting that these companies have been aggressive in seeking development subsidies;

n not one of the dozens of economic development officials interviewed - covering 83 per cent of the facilities, often with multiple sources - could cite any formal economic impact study or cost-benefit analysis related to the prisons.

    The authors noted that “the prison industry has not needed this extensive assistance from the public sector because of an inability to raise money from private capital markets.”

    “It could also be argued,” they say, “that the frequent failure of governments to hold private prison operators accountable for substandard conditions - including poorly trained guards, inadequate facilities, insufficient medical care, etc  - in effect subsidises the companies by freeing them of the cost of full contract compliance. These are legitimate issues but not the subject of the present study.”

     “We are surprised to find subsidies so prevalent. We also wonder why they are necessary, given that governments are also paying the prison companies to operate the facilities,” said Philip Mattera, primary author of the study.

     “We are struck by the uneven quality of information available from local development officials,” said Mafruza Khan, co-author.  “Many officials did not know all of the taxpayer investments that had been made in local facilities. And despite granting hundreds of millions of dollars in subsidies, not one public official could cite a cost-benefit analysis or impact study on their facility.”

    “Whatever the perceived development or contracting benefits of private prisons, they must now be balanced with a full accounting of their costs,” said Greg LeRoy, director of Good Jobs First. “These massive taxpayer investments should be held to the same standards as any other economic development expenditures.”

Jail Breaks: Economic Development Subsidies Given to Private Prisons, Good Jobs First, October 2001. The full report is on the internet at: www.goodjobsfirst.org/jbrelease.htm

 

n The Association of Private Correctional and Treatment Organizations (APCTO)  has rejected  the report’s findings. In a press release dated 25 October 2001APCTO’s chief executive, Steve Logan, stated that “two decades experience and a mountain of hard economic data prove these conclusions to be absolutely false.” APCTO, however, has yet to make this data available.

             APCTO is a trade association representing the interests of private corrections and treatment providers (see PPRI # 40 and 37). A co-chair of the organisation’s research committee is Charles Thomas.  Thomas was forced to resign as director of the Private Corrections Project at the University of Florida after conflict of interest complaints (see PPRI #32, 30, 29, 26, 25, 21 and 13). Thomas is also formerly a director of CCA’s Prison Realty Trust and is now a director of another private prison operator, Avalon.

 

 

CSC hit by downturn

    One of the great claims made by the private prison industry is that it is ‘recession proof.’ But proof that this might be yet another exaggeration is provided by the current fortunes of Florida - based Correctional Services Corporation (CSC) (see PPRI # 43, 42, 36, 30, 26, 24, 21, 14 and 3).

    The company announced on 26 October 2001 that it was restructuring as a result of a weakened economy.

     "As we announced in August, the company has been impacted by various factors affecting its occupancy rates. These have been further affected by the recent economic downturn impacting several of our state clients. Many of the key states in which the company does business are now expected to show significant budget deficits and are formulating  plans to reduce costs, including those related to corrections,” said James Slattery, who is being replaced as chairman of CSC by Stuart M Gerson,  a director of CSC since 1995 and a former acting US attorney general.

    The company stated that Mr Gerson’s lengthy experience with government contracts “will enable him to assist in the monitoring of the company’s relationships with the agencies that are its clients.

    Occupancy rates have been falling at the company’s 34 facilities, which hold 8,600 inmates in 17 states and Puerto Rico. Through its Youth Services International (YSI) subsidiary CSC  describes itself as the nation’s leading provider of juvenile programmes with 23 facilities and over 3,700 juveniles in its care. Its other 11 facilities are for adults.

    CSC’s other restructuring plans include:

n closing “as soon as practicable” six juvenile and one adult facilities totalling 528 beds. Those facilities had combined losses of $600,000 in the third quarter of financial year 2001;

n saving $2m in costs through a 25 per cent cut in non-facility personnel and reductions in travel and business development budgets;

n selling one prison for $8m and realising assets worth a further $23m, as well as what it describes as selling “raw land”.  The company sold a 479-bed jail in Dickens, Texas, in August for $10.6m.

    But Mr Slattery believes the decline in prison occupancy levels is a short-term trend. “Increases in parole rates combined with economic slowdowns traditionally lead to increased need for correctional services,” he said.

    Most of the restructuring, which is estimated to cost $8m, will be completed by the end of 2001. In the first nine months of 2001, CSC lost $6.28m on revenues of $131.8m compared  with a profit of $4.71m and revenues of  $158.3 million in 2000.

    PPRI  made several attempts to discuss the impact on CSC’s aspirations outside of the US but, unfortunately, the company would not comment. So far, CSC has failed in its bids for contracts in the UK and Australia.

 

Lehman Brothers targeted

    Not With Our Money! (NWOM), a New York-based network of student and community activists campaigning against private prisons in the US, is targeting Wall Street financial institutions which support the private prison industry.

    NWOM is currently lobbying Lehman Brothers to halt two major financial deals: a new stock offering for Cornell Companies Inc and a debt refinancing for Corrections Corporation of America ( see PPRI # 42 -40 and 37).

    NWOM wants to convince Wall Street not to give the private prison industry what it calls “a blank cheque” and that financial support for the private prison industry is unacceptable.

    According to NWOM, in the last decade Lehman Brothers has become the most important ally of the private prison industry by managing major financial deals, including credit agreements, bond issues and stock offers.

    Most recently, Lehman was the lead underwriter for an offering of three million shares in Cornell Companies Inc. that was expected to raise an estimated $50m. The finance was needed by Cornell for expansion. Lehman is also the managing agent for Corrections Corporation of America’s $1 billion credit agreement, which must be renegotiated by 1 January 2002.

    NWOM is encouraging those concerned with Wall Street’s support for the prison industry to express their concerns by contacting Richard Fuld, chairman and CEO of Lehman Brothers. Mr Fuld can be contacted at: Tel: ++ 201 524 2000 (switchboard - ask for Richard Fuld’s office);  Fax: ++ 212  526  3317 or email: rfuld@lehman.com

Contact Not With Our Money, Tel: ++ 646 486 6715. Email: nwom@nomoreprisons.org

 

Lehman Brothers - A snapshot of their recent involvement in private prisons

nIn 1988, Lehman Brothers (then known as Shearson Lehman) was involved in a joint venture with American Correctional Systems, Bechtel and Daewoo to develop a $40m  medium security private prison in Colorado.

nIn 1997, Lehman was one of the underwriters of the initial public offering of stock made by CCA Prison Realty Trust, the real estate investment trust spinoff of Corrections Corporation of America.

            Also in 1997 Lehman was the underwriter for a $34.5m offering of certificates of participation to finance the East Mississippi Correctional Facility that was to be run by Wackenhut Corrections Corporation.

n In 1998 Lehman was the underwriter for $59m of revenue bonds issued by the Idaho State Building Authority to finance a private prison to be operated by CCA.

n In May 1999 Lehman served as the lead arranger for a $1 billion credit facility for Prison Realty Corp. (the new name of the CCA real estate investment trust).

nIn June 1999, Lehman served as the underwriter for a $100m offering of Senior Notes by Prison Realty.

v In August 2001 Lehman helped Cornell Companies Inc. carry out a sale/leaseback deal under which ownership of a group of its correctional facilities was transferred to an entity called Municipal Corrections Finance LP, generating $173m in cash for Cornell.

Logan’s view

Steve Logan is chief executive officer of Cornell Companies Inc and The Association of Private Correctional and Treatment Organizations (APCTO). Set out below is the text of Mr Logan’s response to a question about the impact of 11 September on the company.  The conversation took place during an analysts’ conference call dealing with Cornell Companies’ financial results for the third quarter of 2001.

The full text is available on the internet at: www.corporate-ir.net/ireye/ir_site.zhtml?ticker=CRN&script=1100.

 

Caller: “... Can you give me a little colour in terms of post September 11 what is going on in terms of activities of the borders that you’re picking up, anecdotally with the INS.  And then how many illegal aliens are in your prisons currently and what the normal length of stay has been.

Steve Logan: “Yeah.  Gosh, it’s always tough when you ask three questions at once.”

Caller: “You’ve got to, you have to write them down.”

Steve Logan: “I think it’s clear that with the events of September 11 there’s a heightened focus on detention, both on the borders and within the US.  I think what we are seeing is an increased scrutiny of, of tightening up the borders, which, some of it means that some people don’t get through, but the other side of that is more people get caught.  So I would say that’s positive.  And if anything, the federal system, that is already over-burdened is, is indicating to us that they need even more help as a result of September 11.  So that’s a positive for our business.”

“The other thing that you’re seeing that to be honest with you I have no idea how this is going to impact us but it’s not bad  it can only be good  is with, with the focus on people that are illegal and also from Mid Eastern descent, um, in the United states there are over 900,000 undocumented individuals from Middle Eastern descent.  That’s, keep in mind, that’s half of our entire prison population.  That’s a huge number.  Um, and that is a, a population for, for lot’s a reasons that is being targeted.  So I would say the events of September 11, um, let me back up.  The federal business is the best business for us.  It’s the most consistent business for us, and the events of September 11 is increasing that level of business.”

“It’s clear that since September 11 there’s a heightened focus on detention…  more people are gonna get caught.  So I would say that’s positive…  it’s not bad  it can only be good  is with the focus on people that are illegal and also from Middle Eastern decent in the United States there are over 900,000 undocumented individuals from middle eastern decent... That’s a huge number, and that is a population, for lots of reasons that is being targeted.”

 

Ohio cuts: public or private?

    The need for corrections budget cuts in Ohio have created a classic dilemma of the privatisation era.

    The state wants to make cuts which could mean the closure of three prisons. Currently the state has contracts with Management and Training Corporation (MTC) to operate two facilities.     

    But since MTC’s prisons are deemed to be saving the state $3.5m a year they are not being targeted for closure. The more likely option is that state-run prisons will face the axe and, while prisoners will be transferred to other facilities,  up to 800 people could lose their jobs. Some 48 staff in the department of rehabilitation’s headquarters and training centre have already  been laid off.  The State says that staff with seniority would be able to ‘bump’ those with less.

    The state governor has also said that the union which represents most public sector corrections staff should make concessions.

     But the Ohio Civil Service Employees Association is arguing that the state should close the privately operated prisons and has proposed an alternative strategy for cost savings that includes reducing the number of accreditation inspections, cutting the number of state cars used by prison administrators and analysing the use of mandatory overtime. The union has also suggested limiting hot meals for prisoners to one per day.

 

UNITED KINGDOM

 

 

Sodexho set to expand

    UK Detention Services Ltd (UKDS) has been chosen by the prison service as preferred bidder for a new 450 place women’s prison at Ashford, south east England and joint preferred bidder with Premier Custodial Group Ltd for the 840 place men and women’s facility at Peterborough in Cambridgeshire.

    Both prisons will be Category B and privately financed, designed, built and run. Negotiations will continue before final contract announcements about both prisons are made. Ashford is expected to open in July 2003 and Peterborough in 2004.

    According to the prison service,  the Ashford contract is worth about £43m in capital project costs and £213 million overall. Neither UKDS nor Premier  has experience of working with women prisoners in the UK. 

    Failed bidders were Group 4 for Ashford and Peterborough and Citadel (a consortium comprising Securicor, WS Atkins, Skanska, Costain and BNP Paribas) also for Ashford. Securicor, Skanska and Costain are involved in Parc prison at Bridgend in Wales (see PPRI # 42, 38, 34, 30, 29, 23 and 21-18).

    In making the announcement on 5 November 2001, the director general of the prison service, Martin Narey, said: “These awards will provide modern prisons quickly and at a cost that represents good value for money for the taxpayer. They will help to relieve the pressure on existing prisons in the London and Eastern areas and provide much needed additional places, particularly for women.”

 

Private money go round

A round up of some of the most recently filed accounts of British companies operating prisons, prisoner escort services, electronic monitoring and immigration detention centres (see PPRI # 38 and 25). NB: Not all companies are listed here.

 

nPremier Custodial Group Ltd, the UK’s largest private prison service operator, had a pre tax  profit of £12.4m for the period 28 September 1999 to 31 December 2000. Revenues were £160.9m. The group had an average of 2,851 employees during the period. The directors reported that they were “optimistic about the long term prospects for Group continued growth,” pursuing custodial services opportunities in the UK and the supply of electronic monitoring equipment around the world.

    The following UK companies are owned by Premier Custodial Group Ltd (itself owned 50 per cent each by Wackenhut Corrections Corporation and Serco PLC):

 

  • Premier Prison Services Ltd - provides custodial management services to the Home Office

  • Premier Training Services Ltd - manages Hassockfield Secure Training Centre

  • Premier Geografix Ltd - manufactures and leases electronic tagging equipment

  • Premier Monitoring Services Ltd - electronic monitoring services to the Home Office Premier Custodial Investments Ltd - holding company

  • Lowdham Grange Prison Services Ltd - design, construction, management and finance of HMP Lowdham Grange

  • Pucklechurch Custodial (Holdings) Ltd - holding company

  • Pucklechurch Custodial Services Ltd - design, construction, management and finance of  HMP & YOI Ashfield

  • Medomsley Holdings Ltd - holding company

  • Medomsley Training Services Ltd - design, construction, management and finance of Hassockfield Secure Training Centre

  • Moreton Prison (Holdings) Ltd - holding company

  • Moreton Prison Services Ltd -  design, construction, management and finance of HMP Dovegate

  • Kilmarnock Prison (Holdings) Ltd - holding company

  • Kilmarnock Prison Services Ltd - design, construction, management and finance of HMP Kilmarnock

  • Ashford Prison Services Ltd - non trading company formed in connection with bid for new prison contract

  • Cambridgeshire Custodial Services Ltd - non trading company formed in connection with bid for new prison contract

 

n Wackenhut (UK) Ltd, which used to run the prison industries at HMP Coldingley, manages Tinsley House immigration detention centre. The company’s revenues for the year ended 31 December 2000 were £22.56m (£13.05m in 1999) and pre tax profit was £0.76m (£0.16m in 1999).

     The company is owned by The Wackenhut Corporation in the US, which also owns 57 per cent of Wackenhut Corrections Corporation.

n Group 4 Prison Services Ltd is involved in the design and operation of remand centres, prisons and similar institutions and the provision of associated security services.  For the year ended 31 December 2000 the company made a pre-tax profit of £2.68m (£1.96m in 1999) on revenues of £27.25m (£28.05m in 1999). The company paid a dividend of £1.2m (£0.7m in 1999).

n Group 4 Carillion (Fazakerley) Ltd managed to pay dividends of £3.8m to shareholders during the year ended 31 December 2000. Revenues were £21.48m (£19.46m in 1999) and pre tax profit was £4.94m (£5.02m in 1999). The company is the holding company for Fazakerley Prison Services Ltd (FPSL) which has a 28 year contract for the finance, design, construction and management of HMP Altcourse in Liverpool.

n Rebound ECD Ltd is a subsidiary of Group 4 Falck and the management subcontractor for the two secure training centres, Medway and Rainsbrook, which are run by ECD (Cookham Wood) Ltd and ECD (Onley) Ltd. Turnover for the year ended 31 December 2000 was £8.66m (£6.89m in 1999). The company made a pre tax loss of £253,000 compared to a pre tax loss of £1.7m in 1999.

    The company participates in two joint ventures, Education Care and Discipline Ltd and Education Care Discipline Three Ltd with Carillion Private Finance Ltd in relation to the design, construct, manage and finance contracts for Medway and Rainsbrook. The shares in these companies are held by Prison and Court Services Ltd.

n Group 4 Falck Global Solutions UK Ltd (formerly known as Group 4 Management Services Ltd) manages outsourced contracts including facilities management, maintenance and other services in partnership with other third party service providers and  develops new contractual service opportunities. In October 2000, the company acquired the immigration detention centre trade and assets from Group 4 Total Security Ltd.

    Revenues for the year ended 31 December 2000 were £10.9m and the company made a pre-tax loss of £232,000.

n UK Detention Services Ltd (UKDS) operates and manages prisons but also tenders for contracts for the deign, construction, management and financing of other similar projects. During the financial year ended 31 December 2000 the company continued to run HM Prison Blakenhurst, held the contract to finance, design build and run HM Prison Forest bank and was awarded a contract to manage the Harmondsworth immigration detention centre at Heathrow Airport. For the financial year, the company made a pre-tax profit of £1.89m (££0.75m in 1999) on revenues of £23.12m (£11.91 in 1999).

    The average monthly number of prison officers employed by UKDS was 542 compared with 271 in 1999. The company also employed 13 management, 81 administrators and 24 maintenance personnel (10, 25 and 12 respectively in 1999).

    The company paid directors fees and pension contributions of £171,000 (£218,000 in 1999) and also paid £80,000 in fees to Nicholas Hopkins Associates (£77,000 in 1999) for public relations services. Mr Hopkins is a director of UKDS.

    During the year Sodexho SA charged the company £96,000 for technical services. Similarly, Corrections Corporation of America Inc. charged £90,188. UKDS passed on £1.38m of costs to Agecroft Prison Management Ltd (APM, see PPRI #40) relating to the start-up of HM Prison Forest Bank. These costs had been incurred on behalf of APM.

    A note to the company’s accounts refers to a provision of £170,000 for legal proceedings which “relates to claims from former employees. Subsequent to the year end, two cases have been settled.”

    CCA (UK) Ltd and Sodexho SA were the controlling parties in UKDS as each owned 50 per cent of the capital until 13 November 2000 when Sodexho became the 100 per cent owner.

n Securicor Custodial Services Ltd’s principal activities are prisoner escort, court custody services and prison management operations. The company also has an electronic monitoring contract. The accounts for the year ended 30 September 2000 noted that “concerns regarding the increasing application of performance penalties outside of contract terms and conditions have been resolved, however, there is continuous customer pressure to deliver improving standards of service in all contract areas.” 

The company’s revenues for the year were £36.7m (£36.38m in 1999). Pre tax profit was £238,484 (£1.21m in 1999).

The company’s highest paid director received £148,695 while the total of directors’ remuneration was £673,068 excluding pension contributions.

 n Bridgend Custodial Services Ltd,  a Securicor subsidiary, had revenues of £23.92m for the year ended 30 September 2000 (£22.62m in 1999) and made a pre-tax profit of £0.6m (£1.7m in 1999). The company also paid a £1.6m dividend to shareholders.

    During the year, the company paid for services from the following related companies:

  • Securicor Custodial Services Ltd £13.12m

  • Securicor Security Services Ltd £20,000

  • WS Atkins Investments Ltd £10,000

  • WS Atkins Planning & Management Consultants Ltd £1,000

  • WS Atkins Facilities Management Ltd 315,000

  • WS Atkins Consultants Ltd £31,000

  • WS Atkins Management Consultants Ltd £43,000

  • Skanska BOT AB £10,000

  • Costain Engineering & Construction Ltd £130,000

    A note to the accounts stated that Securicor Security Services Ltd were to receive additional finance charges of £937,000 in respect of their subordinated loan.

n The cost of bidding for contracts under the private finance initiative (PFI) range typically “from six figures to around £12m for a complex military or large engineering project” according to Keith Clarke, chief executive of construction firm Skanska. However, an interview in the PFI Report, November 2001, did not reveal how the firm recovered its costs.

 

Scotland’s inspector speaks out

    As the Scottish Executive moves towards further privatisation (see PPRI # 43,40, 37 and 36) Scotland’s chief inspector of prisons, Clive Fairweather, has publicly stated his position on the issue.

    In an interview with the Sunday Herald, 14 October 2001, Mr Fairweather said: “Running a private prison is about making a profit, which is not necessarily the same as running a good prison. Prisons should be about reducing future offending and therefore reducing the number of future victims of crime. Anyone who is serious about the correctional or rehabilitation agenda surely has to look where the experience and expertise currently lies - and concentrate on outcomes rather than pure costs.”

“It has taken me a long time for me to make up my mind about private prisons in Scotland. The private sector may be currently more suited to containing prisoners in decent conditions where rehabilitating or challenging individuals is less of as priority, such as with remands or petty offenders. Prisons are not just about buildings, locks and keys and prison staff are not just turnkeys. You need experienced professionals ... 91 per cent of staff at Kilmarnock have not worked in a prison before.”

    “Profit-driven private prisons would minimise the number of staff and pay them less. Staff at Kilmarnock have told me they love their jobs, but will not be there in two years time because they cannot afford to stay.”

    “The solution is not dogmatic, or purely financial, but what’s best for the public in crime prevention terms,” he said.

 

AUSTRALIA

 

Gorrie contract up for tender

    Australasian Correctional Management Ltd (ACM)’s contract to manage the 710 bed Arthur Gorrie Correctional Centre at Wacol, Queensland is due for renewal. The government has launched a tendering process for a five year contract. The prison has been run by ACM since it opened in 1992. Thirteen prisoners have died from unnatural causes at the prison since it opened in 1992 (see PPRI #43 and 41).

 

Damages of A$432,000 awarded

    Australasian Correctional Management Ltd (ACM)  and the Government of New South Wales have been ordered to pay compensation of A$432,000 to a former ACM employee at Junee Correctional Centre.

    In 1997 Robert Napier was working as the manager of the prison factory when prisoners threatened his life. As a result, he suffered nervous shock and psychiatric illness. The amount of compensation was set by the judge at Wagga District Court on 17 September 2001 after she found that neither the government nor the company had provided adequate security to protect Mr Napier. ACM has run the prison since 1992 (see PPRI # 41, 40, 38 and 35).

n The New South Wales corrections department has negotiated with ACM to increase the number of prisoners held at Junee from 600 to 750. Improvements to the facility will needed in order to cater for the increase.

 

New construction in NSW

The New South Wales government has approved guidelines for privately financing around A$5 billion worth of  new infrastructure over the next four years. One of the projects could be a new A$70m prison and a $20m facility with six courts.

    The government’s private finance model is based on the State of Victoria’s which in turn was based on the UK’s private finance initiative (see PPRI #42 and 40).

    According tot he government, the New South Wales model of public/private partnerships should not be regarded as privatisation. Under the guidelines, contract summaries for privately financed schemes would be audited by the auditor general and tabled before Parliament. Wider public interests would also be considered before a project is offered for private finance.

    The policy document Working with Government: Guidelines for Privately Financed Projects was published on 5 November 2001

 

Assault victims settle with ACM

    Australasian Correctional Management (ACM) has settled out of court a damages claim brought by eight detainees who were allegedly assaulted by ACM staff at the Villawood Detention Centre at Sydney in April 2001 (see PPRI #42 and 41-36).

    The terms of the settlement were not disclosed after a Federal Court hearing lasting several days was concluded on 22 October.  The court was still due to hear the detainees’ claim against the minister for immigration arising from the same incidents.

    The detainees’s claimed that both ACM and the minister breached their duty of care by allowing a group of ACM guards in riot gear to allegedly punch, kick and beat them with batons.

 

Federal government unchanged

    The ruling Liberal/National coalition has won a third term of office as the Federal government of Australia. The coalition, which is responsible for contracting out the country’s immigration detention centres to Australasian Correctional Management (ACM), based its campaign on denying asylum seekers the right to enter Australia to apply for refugee status.

    The government is currently negotiating with ACM to expand its operations by 3,000 beds.

n Detainees who work in the kitchen for up to A$10 per day at ACM-run Port Hedland immigration detention centre went on strike on 1 November 2001. Their aim was to try and get more assistance and, within an hour of taking action, ACM managers agreed a settlement. Ironically, ACM staff had been unsuccessful in their attempt to negotiate with ACM over annual wage agreements.

n The department of immigration and multicultural affairs (DIMA) which oversees immigration detention centres, has advertised for staff for its detention task force. The advertisement states that the task force is responsible for reception and processing of unauthorised boat arrivals, detainee management and removal, liaising with and monitoring outsourced service provision of detention, legislative and policy enhancement on detention issues, the management and administration of the task force as well as  managing community perceptions.

 

CANADA

 

Ontario considers the cost

    An anti-privatisation forum is being held at Metro Hall, Toronto on 26 November 2001. A range of labour and community organisations opposed to private prisons, health, electricity, water, education, municipal and other services have formed a new grouping known as the Consider the Cost Coalition to  try and roll back the provincial government’s privatisation programme.

    The coalition includes: Ontario Public Service Employees Union, Canadian Environmental Law Association, Canadian Federation of Students, Canadian Health Coalition, Canadian Union of Public Employees, Canadian Union of Postal Workers, CAW Canada, Concerned Citizens of Walkerton, Ontario Coalition for Social Justice, Ontario Confederation of University Faculty Associations, Ontario Electricity Coalition, Ontario Liquor Boards Employees Union, Ontario Secondary School Teachers Federation, National Union of Public and General Employees,  Public Service Alliance of Canada, Service Employees International Union and the United Steelworkers (District 6).

    The November event has been timed to coincide with a meeting of the Canadian Council for Public Private Partnerships, an organisation set up to promote privatisation.

More information from the Centre for Social Justice. Tel ++ 416-927-0777. Email:coalition@socialjustice.org

n Canada’s first privately operated prison for adults opened in November 2001. The Central North Correctional Centre at Penetanguishene in Ontario is run by Management & Training Corporation (see PPRI # 40, 38, 37, 35, 34 and 32). Within days of opening the Liberal Opposition corrections critic, Dave Levac, alleged that the company was cutting corners after it was revealed that prisoners could not receive telephone messages. Citizens Against Private Prisons (CAPP) also criticised the government for appointing a six person voluntary prison monitoring committee which would report only to the minister for corrections rather than the community as a whole.

 

RECENT PUBLICATIONS

 

The Canberra Bulletin of Public Administration, No.101, September 2001.

Includes a report of the April 2001 seminar, Implementation of Public Policy, Issues of Theory and Practice. One contributor, John Hargreaves MLA, describes the flawed process by which the ACT government decided on the financing and operating model for its new prison (see PPRI # 41, 38, 35, 30 and 25).

 

Framed, Issue 41, Justice Action, 19 Buckland St , Chippendale NSW 2008, Australia. Tel:++ 9281 5100. Fax: ++ 9281 5303

This issue focuses on policing and includes updates on  campaigns in New South Wales.

 

Victoria Legal Aid, Sixth Statutory Annual Report 2000/2001, http://203.89.220.54/main1.cfm?CategoryID=9&TopicID=77

Includes details of a federal Supreme Court case in which Australasian Correctional Management (ACM, owned by Wackenhut Corrections Corporation) was found  to have exceeded its powers, denied natural justice to a prisoner and failed to comply with regulations. ACM is appealing the decision.

 

Contracting Culture: from CCT to PPPs, the private provision of public services and its impact on employment relations, by Sanjiv Sachdev, Kingston University, for UNISON, 1 Mabledon Place, London, NW1H  9AJ, England.

A report which examines the effect of  public/private partnerships and describes the impact on conditions as “enormous”. It identifies key trends and issues for public services.

 

Socio-Legal Newsletter No. 35, November 2001 published by Cardiff Law School, Cardiff University, P O Box 427, Cardiff CF10 3XJ,Wales, UK.

Includes articles on international prison privatisation and refugee and asylum policy in Australia.

 

Making Crime Pay: Private Prisons Arrive in Canada, by Patti Ryan in The Lawyer, October 2001,journal of the Canadian Bar Association,  www.cba.org/national/main/coverOct01.asp

An article profiling Ontario’s prison privatisation policy and the contracting out of Canada’s first  correctional facility for adults.                         

 

Privatization Update and Profile of Wackenhut Corrections Corporation, Corrections USA (CUSA) PO Box 394, Newton, NH 03858, USA. Internet: www.cusa.org

The latest editions in CUSA’s series of reports based on press coverage of ‘what the prison privatisation industry doesn’t want you to know.’

                                                                                   

Prison Legal News Vol.12 No.11, November 2001 2400 NW 80th St,.PMB 148, Seattle WA 98117. Internet: www.prisonlegalnews.org

Latest edition reporting legal issues affecting prisoners, predominantly in the US. Includes an article on how Mississippi taxpayers fund payments to private prisons for ‘ghost inmates’.

 

Our Communities Are Not For Sale! Local-Global links in the fight against privatisation, United for a Fair Economy (UFE), Institute for Policy Studies, October 2001. UFE 37 Temple Place, Boston, MA 02111. Email, info@FairEconomy.org. Internet:www.FairEconomy.org

A pamphlet focussing on service sectors in the US but providing a framework for international co-operation amongst activists in the US, Africa, Latin America and Asia.  Includes a section of prisons.

 

Guide to The Prison Industrial Complex, Mennonite Central Committee, Fall 2001. MCC, 110 Maryland Avenue NE, #502, Washington DC 20002, USA. Email: mccwash@mcc.org

A pamphlet describing current facts, trends and issues in the US, the private sector’s role  and a guide to resources.

 

CCA Back from the brink by Joseph T Hallinan in the Wall Street Journal, 6 November 2001

A major article detailing the federal government’s contracting out strategy which is helping to maintain  the fortunes of the leading private prison operators in the US (see PPRI # 38).

 

 

 

Prison Privatisation Report International

Public Services International Research Unit (PSIRU)

School of Computing and Mathematical Sciences

University of Greenwich

30 Park Row, London SE10 9LS, England

Internet:www.psiru.org/justice

Email: Stephen Nathan,  stephennathan@compuserve.com