Prison Privatisation Report
International
No. 49, August/September 2002
Published by the Public
Services International Research Unit (PSIRU)
www.psiru.org/justice
This publication is
supported by a grant from the Foundation Open Society Institute.
IN
THIS ISSUE
THE GROUP 4/WACKENHUT ACQUISITION
Group 4 proposals to go ahead
A proposal to replace
Once cabinet has discussed the
proposal, parliament will have to approve it and also pass enabling
legislation. However, since the Lesotho Congress for Democracy (LCD) has 79 of
the 80 parliamentary seats, the proposal is expected to proceed smoothly.
Group 4's original proposal
was to finance, design, build and operate a 3,500 bed private prison at
Mounting opposition to
privatisation
There is mounting opposition to the proposed contract
between the government of Cost Rica and Management & Training Corporation
(MTC) for a privately financed, designed, built and operated prison (see PPRI
#48,47,46 &42). It is still not clear whether the
project will go ahead.
The president has stated
publicly that the 15 year contract is not affordable. MTC is proposing to
charge $29 per prisoner per day and would have to receive $27,840 per day,
amounting to more than half of the government’s $16.6 million annual budget for
the country’s entire prison system. Prisoners currently cost the government
between $20 and $22 each per day.
The government has until 19 October
to finalise terms with MTC, whose lawyer in
MTC was chosen as preferred
bidder by the previous administration over a Colombian consortium known as
Corrections Corporation Latin America (CCLA). CCLA failed in its appeal to
alter the government’s decision to negotiate with MTC.
nMonica Nagel, the former minister of justice
who implemented
Four private prisons are being commissioned by the
State of
Previously, the State’s
director of prisons said that the authority will maintain prison security while
the industry, maintenance and other non-custodial services will be privatised.
Officials have visited semi-private prisons in
Although the State of
Riot at MTC managed facility
in Ontario
A riot at Central North Correctional Centre, the
MTC stated that the riot
started after prisoners refused to return to their cells. According to the
police, prisoners were also armed with makeshift weapons and crude gas masks as
they attempted to storm the facility. The 1,200‑bed facility was
subsequently in lock down as OPP and corrections officials carried out an
investigation into the incident.
n Staff at the Central North Correctional Centre
have voted to join the Ontario Public Service Employees
Union (OPSEU) in a bid to improve wages and working conditions. OPSEU currently
represents the 5,000 correctional officers working in the province’s publicly
run prisons.
Announcing the outcome of a
vote by MTC staff on
OPSEU had hoped to sign the
full complement of 258 correctional officers, clerical, maintenance and
programming workers. On MTC’s insistence, however,
the union will only represent the correctional officers.
Sid Brown, a correctional
officer at the jail “For almost a year, we have tried to address with the
employer issues such as staffing levels and workload to no avail. Our people do
an excellent job, but the pressures are enormous. Now we can work to solve
these problems as a united group, with the resources of a union familiar with
the work we do.” OPSEU will eventually begin a collective bargaining process
with MTC.
Scottish prison figures reveal
poor performance
Premier Prison Services-run Kilmarnock prison has the
worst disciplinary record of all
In 2000/01 and 2001/02
/Kilmarnock outstripped other prisons in the number of prisoners caught in
possession of unauthorised articles and had the most incidents of arson with 24
in 2001/02. Meanwhile, at 142,
Disciplinary offences at
Total Offences
|
Prison |
1999‑2000 |
2000‑01 |
2001‑02 |
% increase 1999‑2002 |
|
Barlinnie |
1511 |
1509 |
1738 |
15% |
|
|
1020 |
1017 |
921 |
-10% |
|
|
1245 |
1154 |
1262 |
1% |
|
Glenochil 1 |
2238 |
1381 |
1695 |
-32% |
|
Glenochil 2 |
929 |
859 |
650 |
-42% |
|
|
410 |
741 |
524 |
28% |
|
|
322 |
328 |
316 |
-2% |
|
|
1682 |
1669 |
2159 |
28% |
|
|
2685 |
3499 |
3634 |
35% |
The increase comes largely from the items set out in
the tables below:
Unauthorised absence from or presence in any part of
the establishment
|
Prison |
1999‑2000 |
2000‑01 |
2001‑02 |
|
Barlinnie |
18 |
11 |
13 |
|
|
30 |
32 |
22 |
|
|
39 |
44 |
26 |
|
Glenochil 1 |
6 |
1 |
3 |
|
Glenochil 2 |
15 |
18 |
22 |
|
|
4 |
2 |
7 |
|
|
1 |
1 |
0 |
|
|
125 |
63 |
108 |
|
|
172 |
1370 |
1545 |
Possession of an unauthorised article or quantity of
an article
|
Prison |
1999‑2000 |
2000‑01 |
2001‑02 |
|
Barlinnie |
109 |
149 |
111 |
|
|
111 |
86 |
66 |
|
|
143 |
139 |
218 |
|
Glenochil 1 |
72 |
32 |
38 |
|
Glenochil 2 |
40 |
29 |
28 |
|
|
162 |
162 |
121 |
|
|
35 |
46 |
50 |
|
|
116 |
89 |
102 |
|
|
134 |
196 |
273 |
Arson
|
Prison |
1999‑2000 |
2000‑01 |
2001‑02 |
|
Barlinnie |
3 |
5 |
10 |
|
|
7 |
0 |
8 |
|
|
7 |
5 |
8 |
|
Glenochil 1 |
6 |
6 |
3 |
|
Glenochil 2 |
12 |
6 |
4 |
|
|
0 |
3 |
3 |
|
|
1 |
1 |
1 |
|
|
13 |
3 |
11 |
|
|
12 |
7 |
24 |
Possession of an unauthorised article or quantity of
an article
|
Prison |
1999‑2000 |
2000‑01 |
2001‑02 |
|
Barlinnie |
109 |
149 |
111 |
|
|
111 |
86 |
66 |
|
|
143 |
139 |
218 |
|
Glenochil 1 |
72 |
32 |
38 |
|
Glenochil 2 |
40 |
29 |
28 |
|
|
162 |
162 |
121 |
|
|
35 |
46 |
50 |
|
|
116 |
89 |
102 |
|
|
134 |
196 |
273 |
Destroys or damages property
|
Prison |
1999‑2000 |
2000‑01 |
2001‑02 |
|
Barlinnie |
77 |
78 |
50 |
|
|
85 |
40 |
37 |
|
|
164 |
134 |
107 |
|
Glenochil 1 |
86 |
69 |
45 |
|
Glenochil 2 |
128 |
65 |
78 |
|
|
32 |
32 |
29 |
|
|
44 |
40 |
49 |
|
|
95 |
69 |
62 |
|
|
118 |
82 |
142 |
Source:
Scottish Parliamentary Reference Centre Document, bib.
no. 23024.
Note:
Glenlochil 2 denotes the Young Offenders Institution.
A new private prison is to be commissioned for the
central belt of
However, the minister has
challenged the Scottish Prison Service to compete for the contract for a second
new prison. The minister said: “I want the Scottish Prison Service (SPS) and
the trades unions to show that they have the chance to bridge the gap between
the private and the public sector on competitiveness. If they can produce for
me a robust and credible plan for the second new prison, one which is
competitive, offers value for money and delivers the places we need on time, I
am prepared to take that project forward in the public sector or as a privately‑built,
publicly‑operated prison.”
He also announced a £110
million programme over the next three years to upgrade existing public prisons.
Overall, the plans will create 1,100 new or refurbished prison places in the
public sector,700 new places in the private sector and
a further 700 at the second prison.
Private absences are secret
In a parliamentary question Andrew Turner MP asked the
home secretary for the level of staff absence through short term and long term
sickness in each prison in
Premier’s Ashfield criticised
again
As the prison service continues to manage the privately
financed, designed, built and - until 23 May 2002 - operated young offenders
institution in south west England, the Howard League for Penal Reform has
produced a critical report on the facility (see PPRI #47). Based on
visits in October 2001 and May 2002 and interviews with ten boys who had
recently been released from the facility, the organisation noted:
n the lack of staffing;
n high staff turnover;
n an unsafe
environment;
n the lack of training
and experience amongst staff group;
n there is no personal officer scheme;
n no offending
behaviour courses;
n insufficient places
in education and training;
n poor reception
facilities.
In a statement accompanying
publication of the report, the Howard League accused the operator, Premier
Prisons, of “putting profit before the welfare and safety of young people”. The
organisation claims that the inability to recruit and retain staff because of
the poor pay and conditions is at the root of Ashfield’s problems. Wing officers at Ashfield start on £15,250 rising
to £16,250 whereas officers in public sector jails start on £17,129 increasing
to a maximum of £24,497.
The Howard League also noted
that the resources which local authority secure units have at their disposal
vastly outstrip those available to the prison service and stated that the
report was a criticism of “a system which allows such inequalities to exist.”
Children in Prison, provision
and practice at Ashfield, Howard League for Penal Reform, August 2002.
n The number of assaults on staff, prisoners and
others expressed as a proportion of the population at Ashfield was 74.1 per
cent for the year 2001/2, according to the Prison Service Annual Report and
Accounts. The 279 assaults recorded meant that Ashfield had the worst
record of the four male juvenile prisons. The prison service spent £14.43
million on Ashfield during the year at a cost per prisoner place of £35,447 and
cost per prisoner of £38,318.
Sodexho’s accounting disaster
Shares in Sodexho Alliance,
whose subsidiary UK Detention Services Ltd runs prisons and immigration
detention centres in
Sodexho has dismissed senior
executives from its
Money go
round
Accounts for eight months ended 31 August 2001 - the
most recent published in the UK - show that UK Detention Services Ltd (UKDS)
had revenues of £17.96 million (£23.1m for the full year 2000) and made a loss
of £241,300 (profit of £1.28m for the year 2000). The directors noted that the
company’s contracts for Blakenhurst and Forest Bank
prisons performed satisfactorily although the contract for Blakenhurst
ended on
Directors’ fees for the period
amounted to £260,858 and, on average, the company
employed 15 management staff, 671 prison/detention officers, 83 administrators
and 27 maintenance staff. The company had made a provision of £170,000 relating
to a claim brought by a former employee but the accounts noted that the case
had been settled satisfactorily after the accounting period.
During the period the company
had financial transactions with Agecroft Prison Management Ltd (in respect of
Forest Bank) and Harmondsworth Detention Services
Ltd. The company’s immediate parent, Sodexho Alliance
SA, has a 50 per cent and 51 per cent equity share interest in the companies
respectively. Under the detention centre contract for Forest Bank, UKDS
received £7.98 million. UKDS also received £632,250 from Harmondsworth
Detention Services Ltd for liquidated damages arising from the delay in
completing the construction of the facility.
n Securicor Custodial
Services Ltd delivered a £5 million dividend for its shareholders for the year
ended
During the year
the average weekly number of people employed (including directors) was 55
office and management and 1,441 operational. Directors received a total of
£602,273 including pension contributions and benefits in kind. The highest paid
director earned £136,631. The company is ultimately owned by Securicor plc. Securicor
Custodial Services Ltd owns 40 per cent of the shares of Bridgend Custodial
Services Ltd, the operator of Parc prison.
More on the acquisition
Group 4 Falck
will sell its 57 per cent stake in Wackenhut
Corrections Corporation within the next six months as long as the price is
right (see PPRI # 47). On
In the
On
Behavioural measures were
suggested in order to address any possible adverse effects on competition in
the provision of custodial and transport services. Measures to be put in place
might include: a public demonstration of the independence of, and the
competition between, Premier and the remainder of Group 4 in bidding for
contracts and the provision of written undertakings which will guarantee Group
4's disposal of assets to meet public interest concerns.
The commission noted that it
had not yet reached any conclusions on the matter, in particular, as to whether
Group 4's acquisition of Wackenhut operates, or might
be expected to operate, against the public interest.
The home office - which
contracts with Premier for a range of custodial and other services - has not
yet approved the acquisition as required under many of Premier’s contracts. It
is awaiting the decision from the competition commission and the department of
trade and industry. However, as WCC notes in its 10Q
Until May 2002, Serco and Wackenhut Corrections
Corporation were joint owners of Premier Custodial Group Ltd and its
subsidiaries. As a result of Group 4's acquisition, Premier is now owned
jointly by Group 4 and Serco. However, Serco argues that it has the legal right to full ownership
of Premier and the matter is now in the hands of lawyers. WCC notes in its 10Q
that “Group 4 Falck has agreed that in the event
the company is ordered by a court of competent jurisdiction to sell its
interest in PCG to Serco at a price below fair market
value, Group 4 Falck will reimburse the company for
the amount by which the sale is below fair market value, up to a maximum of 10
per cent of the fair market value of the interest.”
n Serco Group plc
regards itself as ‘a leading global outsourcing company’ aiming to ‘capitalise
on the worldwide trend for governments to seek private sector support in
improving the quality and efficiency of public services.’ The company employs
34,000 staff in 36 countries. Outside of the
In the half year to
n Wackenhut
Corrections Corporation is still 43 per cent owned by investors other than
Group 4 Falck and is still publicly traded. According to WCC’s 10Q,
n The insurance
problems that have befallen prison operators in the
The government of
The government’s position is
that although it is ‘locked in’ to 20 year contracts with the companies, “the
contracts provide for regular reviews of the prison services agreement,” said
corrections minister Andre Haermeyer in a media
release, 12 September 2002.
“We have used this review to set new prison
standards which were recommended by the auditor-general and the Kirby inquiry
into private prisons. This has provided us with the opportunity to set tough,
more qualitative standards and to achieve some continuity of standards so we
can have one prison system and not three. Whilst the government believes the
ideologically driven prison privatisation policies of the [former] Liberal and
National parties were against the public interests, I have always been emphatic
that we would not tear up legal contracts. We will honour our contractual
obligations and will hold the private operators to theirs. We are determined to
ensure taxpayers get the best deal from private prison agreements by improving
these inflexible ... contracts and
adapting delivery outputs to reflect good prison practice,” said Mr Haermeyer.
Among the new standards that
contractors will have to provide are:
n a significant
expansion of urine analysis testing for drugs;
n a more rigorous
approach to public safety and prison security tor
educe the number of escapes and walk offs from work gangs;
n 100 per cent compliance with minimum staffing
rosters with qualified staff;
n better procedures for
detecting weapons and contraband;
n a heightened focus on
security intelligence to prevent incidents;
n a greater focus on
rehabilitation and repatriation of prisoners;
n more management
planning to reduce prisoners’ self-harm;
n a holistic approach
to health services, including better detection and treatment of prisoners with
chronic health problems.
Victoria’s PFI County Court
The government of
n The government of
Detention centres will remain
private
The Australian Protective Service (APS) has withdrawn
from the bidding process to operate
This leaves just Australasian
Correctional Management (ACM) which currently holds the contract, Group 4 Falck Global Solutions Ltd - both owned by Group 4 Falck - and Management & Training Corporation (MTC).
The three companies are bidding for an initial three year contract worth more
than A$104 million per year. The contract could be
extended for a further four years.
More escort contract conflict
“The relationship between AIMS
and the department of justice over this contract has reached very low levels
and there is now a lack of trust and confidence in the contract,” the attorney
general told the West Australian on
However, John Cooper, managing
director of AIMS Corporation issued a statement on
Australasian Correctional Management (ACM) has been
chosen by Queensland department of corrective services as preferred bidder in
its attempt to renew the contract to operate the 710 bed Arthur Gorrie Correctional Centre in Brisbane (see PPRI
#46-43 &41). If negotiations are finalised the new five year contract will
commence in December 2002 and will be worth some US$13.3 million per year in
revenues. There will also be an option for a further five year extension. ACM
has managed the facility since it opened in 1992. The other bidders for the new contract were
Management & Training Corporation (MTC), AIMS Corporation (Sodexho) and Group 4.
UNITED STATES
New coalition formed
A new coalition opposed to prison privatisation has
been formed in the
Ken Kopczynski
of the Florida Police Benevolent Association (FPBA) is CAPP’s
chairperson. Announcing CAPP’s launch on
Federal concerns about private
prisons
The Federal Bureau of Prisons is concerned about the
ability of the private sector to accommodate medium and high security prisoners
as well as the comparative costs of operating private versus FBOP-run
prisons. These, and other concerns, were
expressed in a letter from the FBOP to Senator Don Nickles
earlier this year. Set out below is the FBOP’s
letter.
Federal Bureau of Prisons
The Honorable Don Nickles
Dear Senator Nickles:
This is in response to your request for the
Bureau of Prisons (BOP) to reply to a letter you received from Richard Loud,
President, Corrections
The Bureau has contracted with the private
sector for the confinement of
certain Federal inmates for decades. The BOP started contracting
with the private sector for space in non‑secure, community‑based
halfway houses in the 1960's. In the mid‑1980's, we began contracting for
bed space to confine low‑security, non?
With the ongoing growth of the Federal inmate
population, the Bureau's utilization of private sources for secure bed space
has grown significantly in the recent past. We contract for private corrections
beds to complement the facilities owned and operated by our agency.
Currently, the Bureau has approximately 13,500
inmates in secure adult facilities operated by private corrections firms
(through direct contracts with the private prison or through intergovernmental
agreements in which the local government contracts with a private prison
company).
We have had success in contracting with the
private sector for the confinement of minimum‑security and low‑security
inmates (populations for which the private sector has established an acceptable
record). We have concerns with privatization for the confinement of inmates
classified as medium‑security or high‑security, in accordance with
Federal classification standards.
Over the years, the private sector has had
significant problems with the incarceration and management of medium‑security
and high‑security offenders. In particular, the private sector has not
demonstrated the ability to manage high‑security sentenced inmates for
long‑term confinement, though they have held such offenders as short‑term
detention cases.
The Bureau carefully evaluates past performance
prior to making a contract award for private secure corrections services.
Likewise, the Bureau has implemented a comprehensive oversight process to
monitor contractor performance after award. The Bureau also assesses a
contractor's financial condition, including a routine review of financial
information, as a way to determine responsibility prior to contract award and
the exercise of each contract option. Contracts also include a bankruptcy
clause which requires the contractor to notify the Bureau within 5 days of
initiating bankruptcy proceedings.
With regard to cost efficiencies, a recently‑completed
comparison of the cost of the privately‑operated prison in
I trust this information will be useful as you
continue to examine prison privatization. Please contact me if I can provide
more detailed information or be of any further assistance.
Sincerely,
Thomas R. Kane, Assistant Director for
Information, Policy, and Public Affairs
El Programa de Concesiones de
Infraestructura Penitenciara, Javier Peirano Novoa and Verónica Cáceres
Cortés; La Arquitectura
Penitenciaria de Nueva Generación,
Carlos Alejo Garcia Basalo, Revista de Estudios Criminológicos y
Pentienciarios, Ministerio de Justicia, Gendarmeria de Chile, Numero 4, Mayo
2002.
Two articles dealing with current developments with
Tales of a private prison: Writ in Women’s Lives,
Amanda George, in HECATE, Vol 28, no1, 2002 PO Box
6099, St Lucia, Brisbane, Queensland 4067, Australia.
Briefly outlines the experience of women prisoners at
the Metropolitan Women’s Correctional Centre (MWCC) in
Administrative Accountability in Prisons, Kathy Bagot, Australian Journal of Administrative Law, Vol 9, May 2002.
“Court based remedies are inadequate mechanisms to
keep contractors accountable because of
... legal difficulties and, even
more importantly, because of the financial and practical obstacles for prisoners. Governmental action to
establish administrative mechanisms to make contracting out more open and
accountable is essential.”
Protection of prisoners’ Rights in Australian Private
prisons, John Rynne, in Prisoners as Citizens, Brown
& Wilkie, eds,
The Federation Press, 2002.
A discussion identifying the various options prisoners
have to ensure that their basic rights are protected.
Acacia Prison, Annual Report 2001/2002, Australian
Integration Management Services Corporation Pty Ltd, (AIMS Corporation), June
2002, www.aimscorp.com.au
This is not a government of
CSC: Merchant of Misery and Misfortune by Roger
Hummel, Prison Legal News, Vol. 13 No. 8, August 2002.
A profile of Correctional
Services Corporation (CSC) from the company’s early history through to recent
financial problems.
How Many Immigrants Must You Imprison Too Turn A
Profit? May La Vor, A Globe
of Witnesses, August 2002, www.thewitness.org/agw
This article analyses the
Locking away profits: capitalising on immigrant
detentions has turned into a booming business for Lehman Brothers, Karen
Juanita Carillo, Color
Lines, Fall 2002, www.arc.org/C_Lines/ArcColorLines
This article describes current developments in the
“Investment banks like Lehman and others in Wall
Street have been facilitating the flow of private capital into prisons for decades now- and nobody holds them accountable.”
Punishment & Society, The
International Journal of Penology, Vol 4, No.3, July
2002, Sage.
This is a special issue on privatisation that includes
five articles and two book reviews. “ ...the flow of
essays and polemics has slowed and the early passions aroused on either side of
that [public/private] debate appear to have cooled.” assert the editors.
“The current climate seems to
favour continued efforts directed at the development of rehabilitative regimes
through the proliferation of offender treatment programmes, and possibly the
designation of further therapeutic community units within the prison estate. It
is likely that the private sector will play an increasingly important role in
the provision of such regimes. If this really is the case the current system of
accountability must be radically reassessed and the question of legitimacy must
be addressed.”
That is the conclusion reached
by Elaine Genders, reader in criminology, University College London, in her
discussion of the development of Dovegate prison run by Premier Custodial Group
Ltd in the UK and “what residual problems remain for the private contracting of
a therapeutic community prison like Dovegate in particular, and for the private
management of a rehabilitative system more generally.”
ENDS
Prison Privatisation Report International
Public Services International Research Unit (PSIRU)
School of Computing and Mathematical Sciences
30 Park Row,
Internet:www.psiru.org/justice
Email: Stephen Nathan, stephennathan@compuserve.com