Prison Privatisation Report International

No. 54, April 2003

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

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














First to legislate against private prisons


The government of New Zealand is introducing legislation to prevent the private management of prisons (see PPRI # 53, 43, 34 & 32)). It is the first national government in the world to take such a step. However, the Corrections Bill, which had its first parliamentary reading on 2 April 2003, does not abolish private contracting for the provision of prisoner escort and courtroom custodial services. Neither does it limit private sector participation in the corrections system that does not involve the direct exercise of coercive powers, for example, the building of prisons or the provision of rehabilitative programmes for offenders. 


            New Zealand currently has one privately managed prison. The legislation allowing the contracting out of prison management was implemented in March 1995 by the National Government.  In mid-1999, the department of corrections contracted with Australasian Correctional Management (ACM) for the management of Auckland Central Remand Prison (ACRP). The prison became operational in mid-2000 and has been operated to contract specifications.


            The Labour Party, which leads the present coalition government, included in its 1999 election manifesto an undertaking to end the private management of prisons. In January 2000, New Zealand’s then minister for corrections stated: “there has been an experiment overseas - driven by ideology - to introduce private prisons and it hasn’t worked. The ideology driven belief that … private is better is not suited to our prisons, and this government won’t let New Zealanders become guinea pigs for an experiment here.” Then, in September 2001 the Cabinet decided that the Corrections Bill would not carry forward provisions for private contracting for the management of prisons. 


            New Zealand’s acting corrections minister, Mark Gosche, told PPRI: “The government is aware of overseas experience of private prison contracting.  However, the decision was based on the fact that prisons, by their very nature, involve the use of highly coercive powers against individuals 24 hours a day, seven days a week.  The government believes that such powers should not be wielded by private sector organisations. Rather, the government itself should be directly responsible for exercising these powers appropriately. The performance of ACM in managing ACRP has not been a factor in the decision to end private contracting for the management of prisons ... the government’s position on this issue was developed before ACRP opened.”


            The Bill makes provision for the contract with ACM to continue until its scheduled expiry date, 12 July 2005.  Although the current contract provides for a possible two year extension, this is at the government’s discretion.  It is not yet clear whether ACM will contest the government’s decision. According to ACM’s general manager at Auckland Central Remand Prison, Mr Dom Karauria, the company had intended to submit tenders to run one or two of the new prisons being built in New Zealand but would now focus on contracts to provide prison health services. “Whilst this is disappointing for us, it doesn’t mean the end of ACM in New Zealand,” he told the New Zealand Herald in March.


            The Bill, which also includes a range of other measures including the extension of prisoners’ minimum entitlements to meet international standards, is unlikely to become law before mid-2004.

More details of the Corrections Bill are available on the internet at and



Criminal justice system up for grabs to the US?


DynCorp International, a subsidiary of Computer Sciences Corporation, has won a contract worth up to $50m for the first year to provide up to 1,000 advisors to help organise Iraq’s law enforcement, judicial and correctional agencies. Dyncorp was one of a number of US companies secretly invited to bid for a long_term contract to rebuild Iraq's national police force, prisons and judiciary.


            A US government press spokesperson would not divulge the government’s specific plans for prisons but he told PPRI that, for the last “six to eight months” the state department had been involved in six task forces looking at the future of public infrastructure in Iraq.


            Dyncorp is a controversial company. One of the largest donors to GeorgeW.Bush’s 2000 election campaign, in November 2002 it was awarded a $31m contract by the Defense Threat Reduction Agency to assist governments in the former Soviet Union, Eastern European and Baltic countries to develop programmes to increase border security and detect weapons of mass destruction. It’s armed employees are the core of the police force in Bosnia where the company unfairly sacked Kathryn Bolkavac, a United Nations police officer, for whistle blowing on colleagues involved in an illegal sex ring. According to Corpwatch, in November 2002 an employment tribunal in England ordered the company to pay Ms Bolkavac £110,000 in compensation. Dyncorp police trainers were implicated in buying and selling prostitutes, including a girl of 13, and accused of videotaping the alleged rape of one of the women. A number of Dyncorp employees resigned as a result. Dyncorp also operates Plan Colombia for the US government, flying missions to eradicate Colombia’s coca fields. In Ecuador, the company is being sued by a group of peasants who allege that herbicides are drifting across the border killing children, crops and livestock.




Four new prisons are to be commissioned in South Africa. Meanwhile, the department of correctional services is continuing its quest to reduce the cost of the contracts for the two private prisons that are operating (see PPRI # 52, 51, 46, 42, 38, 36, 34, 30, 23, 20, etc).


            A task team comprising correctional services, the national treasury and public works was set up in November 2002 to review the contracts. The team recommended that there should be negotiations with the contractors to improve value for money by reviewing standards, amending fee payment structures, accommodating additional prisoners and renegotiating debt financing.


            The treasury also recommended that feasibility studies should be carried out before any new prisons are commissioned. During a discussion at the correctional services portfolio committee on18 March 2003, the department of corrections would not be drawn on how the new prisons would be commissioned. However, a department representative stated that the wish was to have a 50-50 sharing with the private sector, ie, the private sector would provide the structure of the prisons but the department would run the operations. The committee said that “no decisions would be made just yet.”

 The Adam Smith Institute hopes to reschedule its ‘high level training course’ to encourage prison privatisation in Africa for 2004 (see PPRI #52 & 51).



Private management on the way?


The government of Fiji is tendering for a review of its prison service with the aim of moving from a system of confinement and containment to changing prison management practices and the overall organisation of the service to comply with international standards. Fiji’s prison service currently operates 14 prisons.



Call for prison privatisation as an export


“There is a property business in Singapore with an annual operating budget of more than $200m, with more than 13,000 captive tenants, steady demand and good growth prospect. And if Singapore follows the trend in the US, it could soon be up for grabs.”


            So began an article in The Business Times, Singapore, of 4 February 2003. The writer, Lee Han Shih called for the management of the Changi Prison complex, currently under construction and due to open in 2004, to be contracted out or “in fancy American terms, this business is called outsourced correctional services.”


            The article concludes with the suggestion to “find a local firm with enough security rating to take over the job, allow it to gain experience in managing Changi and, in time, it could go overseas and run prisons in other Asian countries. Properly conducted, this could be yet another export business for Singapore



New public prison opens with Group 4's help


The private sector has played a major role in the development of St Lucia’s new public prison, the Bordelais Correctional Facility which opened in January 2003. The facility cost $48.2 m to design and construct. A substantial but undisclosed proportion of that has gone to Copenhagen-based Group 4 Falck which, in recent years, played host in England to two of St Lucia’s home affairs ministers.


            Group 4 was involved in the design of Bordelais as well as the recruitment and training of staff, drawing on expertise from its prison in Bloemfontein, South Africa. However, a spokesperson for the company told PPRI that a management contract for Bordelais had not been an option.


            The prison project was handled for the government of St Lucia by the National Insurance Property Development Company (NIPDEC), a Trinidad - based development agency, which contracted with Group 4. According to Group 4, NIPDEC also approached other prison companies but was “not aware” of any bidding process for the contract.


            Bordelais is a new concept for the government as well as being the first of its kind in the Caribbean.  Its strategy will be the rehabilitation of prisoners rather than simply warehousing them.  Its capacity is 500 although the island’s current prison population is around 400. It will replace the overcrowded and antiquated Royal Gaol built in 1827. Bordelais’ superintendent is Hilary Herman who has spent the last 27 years in the US military.

Group 4 “responds to opportunities”, the prison business is “not marketing led” and the company “has no marketing strategy for the Caribbean” a company spokesperson told PPRI.



40 year concessions


The government of Peru has based its programme for three new prisons on Chile - which based its own programme on French semi-private prisons (see PPRI #48). However, unlike Chile - or anywhere else to date - the concessions being offered will last 40 years and will include a programme for prisoners to manufacture, amongst other items,  military uniforms and school desks which the government will purchase.


            According to Trade Partners UK, Peru’s director general of infrastructure “called on the embassy specially to explain his needs. He has heard of the UK’s initiatives in private prison management and thought that British companies would be well qualified to help Peru address its chronic overcrowding problems.”



Premier’s latest win


Premier Detention Services Ltd has been awarded another immigration detention centre contract. The £48m 326 bed facility at Harmondsworth, near Heathrow Airport, is being publicly financed and will be constructed by Skanska. The eight year operating contract will generate revenues of around £18m per year once it opens in the summer of 2004. Premier is owned by Serco and Wackenhut Corrections Corporation (WCC). Since May 2002, WCC has been 57 per cent owned by Group 4. Premier also has a five year contract to operate the Dungavel detention centre at South Lanarkshire, Scotland.

 Serco’s legal battle with Wackenhut over the right to own Premier outright continues. A Serco spokesperson told PPRI that a high court hearing is schedule for the summer.


More problems at child jails


Up to and including 31 March 2003, financial penalties reflecting contract failures at the UK’s three privately financed, designed, built and operated Secure Training Centres were: Medway £910,874; Rainsbrook £155,152 and Hassockfield £74,572 (see PPRI # 48, 43, 40 & 37).  The figures were released by the home office in an answer to a parliamentary question.


            The Centres, which hold persistent offenders aged between 12 and 17, were inspected by the social services inspectorate in 2002. Group 4 subsidiary Rebound ECD-run Medway’s inspection took place between 9-11 April 2002 and Premier’s Hassockfield was inspected between 7-16 May 2002. Both reports were published in December 2002.  Rebound-run Rainsbrook STC was inspected in November 2002 and the report is due to be published in May 2003.



This was Medway’s fourth annual inspection. It took place following “a period during which the normal life of Medway was disrupted by a management investigation, disciplinary process and resignations. As a result there has been a complete change in personnel in senior management posts... the effect of the instability was to put on hold or bring to a stop many of the positive aspects mentioned in the previous report.” Staff turnover was “exceptionally high” at 42 per cent.


            The report set out some positive features but the inspectors made twenty four recommendations for improvements. Their findings included:

systematic and focused crime avoidance work has almost entirely slipped from the agenda and timetable;

equal opportunities and anti racism policies were not firmly embedded into the day to day practices ... the whole way in which valuing diversity was addressed needed considerable attention. “We overheard conversations between staff ...some of the language used to describe young people of differing ethnic and cultural backgrounds could be construed as offensive and racist.”

the lack of strategic management was identified as a major cause of the difficulties experienced at the centre since its opening (in );

staff shortages caused staff to regularly work extra hours. The three week rolling rota was not popular with all staff. Rota changes led to staff working mor weekends each month. The level of staff sickness had also been high. “The lack of staff from black and ethnic minority groups has been raised in each of the inspection reports since the centre opened. This continues to be an issue...”

very little had been done to create individual targets that could be measured and linked to the assessed needs of the young person. Information was not always shared effectively between departments. There were a number of inconsistencies in the way in which information was stored on the files;

some young people had complained about some of the distraction techniques used by some staff members ... the use of physical control was now being systematically monitored and information contained in records was analysed. “It is important that this oversight is maintained.” The sue of single separation “was being used as a means of control more widely than was acceptable under national guidance and regulations.”There were three practices which appeared to contravene good practice understandings in relation to single separation;

progress reported in the last inspection report relating to the use of structured activities had not been sustained.. The use of organised purposeful activities, geared to helping the trainees to develop skills and interests and linked to reduce offending was patchy;

challenging targets to promote a good practice of learning were not always set. On occasion teaching materials were inappropriate and this resulted in little work being completed..There was too little feedback on what happened to young people moving on to the community part of the sentence to allow the centre to assess the relevance of their work in preparing students for the next stage;

 “Most of the young people we spoke with were not familiar with the concept of crime avoidance work.”



Hassockfield was opened in September 1999 and this was the centre’s third annual report. Remarkably, the inspectors did not mention that the centre is run by a subsidiary of Premier Custodial Group Ltd. However, they noted that “the establishment had a very difficult two years of operations with high levels of staff turnover including two changes at director level which caused major disruption to the development of adequate standards of care and control of the young people.” The inspectors noted that since May 2001 Hassockfield “has been more settled with the result that improved performance has been seen on a number of fronts.” However, there were 23 improvements recommended. Included in the findings were:

the May 2001 inspection report had recommended that the statement of purpose be updated and extended. Work had taken place although “the revised statement fails to reflects the aims of the STC and the services which are available to support the achievement of them.”

”the central thesis of our last report, namely that there was a shortfall in child care expertise remains fundamentally unaltered....”

 it was intended that staff in the admissions unit carried out a comprehensive social skills assessment with young people, “we found little evidence to suggest that these happened as a matter of routine”

“there were still no fully effective quality assessment and evaluation systems in place and this remains central to the STC’s development.”

Incident recording procedures had been revised as recommended during the last inspection “however, the procedures were inadequate and further work was needed ... procedures for recording incidents of physical restraint, periods of single separation and use of sanctions particularly needed to be revised.”

 “there was clearly insufficient awareness of the diversity agenda ... and this was an area that needed attention as a matter of priority.”

 the teachers were qualified for their planned teaching roles. “Some 18 lessons were observed: half were good but almost a third were unsatisfactory or poor.” Classroom accommodation was “poor”. Rooms lacked storage space, were poorly ventilated and, because of their size, lacked flexibility. Facilities for teachers were cramped. The staff room was too small and storage arrangements for student records and teaching materials in a narrow corridor were unsatisfactory. The library is a stark room which sometimes doubled as a storage area.

The health care team “had been very short staffed in the early part of this year and the manager had needed to take part in the duty nurse rota in order to ensure adequate nursing cover ... a review of the terms and conditions of the nursing staff had been undertaken and this had resulted in improved pay and conditions. These ... had made it easier to recruit nursing staff.”

 “previous inspection reports have drawn attention to the inadequacy of the buildings in this establishment which complicates the task of achieving an environment conducive to practice which will positively impact upon young people’s lives. High ceilings, reverberating noise and echoes nd large areas of featureless wall space combine to potentially give the effect of a soulless encampment. We noted the significant attempts to treat these structure and design defects by a refurbishment programme introducing new furniture and different colours

Social Services Inspectorate, Inspection of Medway Secure Training Centre, Kent, April 2002 and Hassockfield Secure Training Centre, May 2002. SSI, 6th Floor, Eileen House, 80-94 Newington Causeway, London SE1 6EF, England.

 The Youth Justice Board has a four year plan to build STCs to provide another 400 places.


Public prisons face contracting out


Two failing publicly run prisons in England have been given six months to produce proposals for an improved level or service. Failure to implement a plan to achieve real improvements will result in a decision to contract out. Dartmoor in the south west and Liverpool in north west England now face performance testing.


            Two further prisons will be performance tested in June 2003. Over the next seven years all publicly run prisons in England and Wales will be performance tested. Private prisons will be benchmarked under a separate process. The last attempt by the prison service to contract out the management of an existing prison, Brixton, south London, failed after no companies expressed an interest in bidding.


According to UKDS...


“PFI (Private Finance Initiative) in prisons has proven that it works better when the whole service is given over to the private sector, with none of the usual boundaries between the public and private sectors. I’ll oppose any plans by the government to move just towards service management contracts.”  According to publicprivatefinance, March 2003, that was the response of Mr Herb Nahapiet, managing director of Sodexho-owned UK Detention Services Ltd, to the possibility that the prison service in England and Wales might consider commissioning semi-private prisons in the future. Mr Nahapiet is also Sodexho’s Worldwide Correctional Services Champion.



Identifying the potential


A growing number of security firms, research companies and consultancies are trying to identify new criminal justice markets for themselves and/or their clients. As well, in June, a conference in London will discuss the international market for private prisons and other emergency services (see PPRI # 50, 42, 40, 38 & 7).

            PPRI has learned that one company is “specifically researching the presence of the private sector engaged in the justice and public safety sector in a number of possible areas, such as: police ... prosecution service ... courts ...custody and rehabilitation ... community programmes ... immigration ... to identify to what extent the private companies are providing or could provide services more efficiently at a lower cost ... looking at the international justice and public safety markets in ... the UK, South Africa, China, Hong Kong, Indonesia or any other countries ...”


            Another is reviewing “privatised justice opportunities in a number of international markets outside of the UK and US.”


            A third is “currently researching PFI (Private Finance Initiative), specifically in the custodial sector”. A fourth is “a consortium actively involved in the PFI process operating in the health, education and law and order sectors ... seeking to bid for a central detention centre project...” Yet another is “conducting detailed research into developments in the global privatised justice markets.”


PFI Conference

“Identify the challenges faced by the home office and the prison service... discover where next in the emergency services sector for PPP/PFI ... compare PFI versus conventional prisons ... evaluate PPP/PFI in overseas prisons and network with leading industry players ...”.


            These are some of the benefits of attending described in the brochure for a PPP/PFI in prisons and emergency services conference on 11 and 12 June 2003. The event, organised by SMI, publishers of the PFI Intelligence Bulletin, will include sessions on the experience of UK private prisons to date, a case study of Group 4's prison in South Africa, a  perspective on Chile’s programme of semi private prisons as well as ‘exciting innovations and developments in Australia’ described by PricewaterhouseCoopers of Australia. The conference will also consider PPP/PFI in police and court services as well as fire authorities. There will also be an executive briefing provided by Currie & Brown Consulting on output specifications, prison specifics, a prison case study and a discussion on sector differences.

Private sector more efficient? The SMI conference on prisons and emergency services clashes with another major event in London promoting privatisation and the PFI.. The Public Private Finance Congress on 10-11 June will be ‘ the biggest networking and educational event in the PPP calendar ... over 1,000 industry professionals will enter into debate with other experts on key issues ...”claim the organisers, the publishers of publicprivatefinance magazine. It will, they say, “bring together those that have moulded the PFI/PPP process and created what is now a diverse but truly progressive industry.” Day two promises a session on ‘global expansion, emerging markets’: country specific talks will be followed by a discussion of issues such as: is PFI improving public services? Can the private sector make savings without the power to cut staff terms? Will the PFI model give way to other PPP models in the future? Where else can the private sector be involved - where are the limits? Will high bidding costs lead to the end of the PFI/PPP market?


How they see it #1: “Like patching pot holes ...”


On 8 April 2003 BBC Radio 4 aired a programme entitled Capitalist Punishment. The programme examined the recent history of private prisons in the US and UK and asked why, in the light of continued failures, private prisons are still being commissioned in the UK. Amongst those interviewed were Harold Brubaker, a member of the American Legislative Exchange Council (ALEC, see Texas article above) and former leader of the house in North Carolina; and Paul Doucette, spokesperson for the Association of Private Correctional and Treatment Organisations (APCTO, see above). The  following are brief extracts from the programme.


BBC presenter: [talking about the US] All these tough on crime measures were sponsored by a little known right wing think tank. Most Americans have never heard of the American Legislative Exchange Council or ALEC for short. But behind the scenes ALEC has changed the way the country deals with crime and punishment, perhaps more than any other organisation. Every year, working with politicians at state level it helps to pass hundreds of laws from tax cuts to longer prison sentences. The private prison companies sit on the Council and pay thousands of dollars a year for the privilege. Harold Brubaker says this sort of lobbying is nothing out of the ordinary, nothing to get excited about. And he has no qualms about the private sector helping to shape criminal justice policies.

Harold Brubaker: I think it’s important to hear their viewpoints.

BBC: But you will concede, won’t you, that the more people that are locked up, the better business it is for private prison companies?

HB: Oh yes, but they’re only about five or ten per cent. If it ever be at 50, 60, 70 per cent then what you say would hold some air but until then it’s just a small pea in the pond.

BBC: But you can see that there may be some sort of vested interest in companies like Wackenhut and CCA  pushing for harder, tougher legislation.

HB: Absolutely. Yes I can visualise the point.

BBC: As speaker of the house in the state congress Brubaker pushed through legislation that opened the door to the prison companies. And he is still convinced that privatisation is the magic panacea.

HB: I was driving down the road one day and I saw the state trucks out there with a state tractor patching a pot hole. And I counted seven people. Four were standing there holding shovels while one guy was on the tractor working. And then the other two were just looking. I picked up the phone and I called a local contractor. I said if you were patching a pot hole, and I gave them the basic dimensions, how many people would you send out to do it? And he said two. I said that’s what I thought. Private can do it cheaper. Privatisation’s the absolute way to go.

BBC: But isn’t the business of running a prison slightly more complicated than patching holes in the road?

HB: I would disagree.


How they see it #2: “enormous increase in juvenile crime over the next 15 years...”


BBC: ...their spokesman in the US, Paul Doucette, says the industry has a great future.

Paul Doucette, APCTO: “ We are extremely optimistic about the growth potential for this business. Right now today in the US we have fewer juveniles in the age of criminality between 14 and 21 than we’ve had in a long time. Over the next 15 years that number increases to record numbers. As the baby boom echo the kids of the baby boomers’ kids reach that age, so there will be an enormous increase in the incidence of juvenile crime over the next 15 years that society will have to respond to and with economic downturn, unemployment is up, and so when people are concerned about their economic future, can’t find a job, the statistics are that crime goes up during those periods. The market demand is there.”



Private numbers dropped in 2002


The number of prisoners held in privately operated facilities in the US dropped from 91,953 to 86,626 in the first six months of 2002. According to the US department of justice the drop was mainly due to the decline in prisoners held in private facilities for Texas authorities. Overall, private facilities held 6.1 % of all state and federal prisoners, down from 6.8 % at 30 June 2001. The federal system held 12.6 % and the states 5.2% of its prisoners in private facilities at 30 June 2002.


            As at 30 June 2002, the Federal system (20,293), Texas (10,764) and Oklahoma (6,773) reported the largest number of prisoners in private facilities. Five states - New Mexico (43 %), Montana (31 %), Alaska (29 %), Oklahoma (29 %), and Wyoming (28 %) had at least a quarter of their prisoners in private facilities. The District of Columbia had 27.4 % of its prisoners in private facilities. Other states: New Jersey 8.7 %; Pennsylvania 1.3 %; Indiana 4.4 %; Michigan 0.9 %; North Dakota 3.4 %; Ohio 4.3 %; South Dakota 1.3 %; Wisconsin 15 %;Florida 5.6 %;Georgia 9.9 %; Kentucky 10.1 %; Louisiana 8.3 %; Maryland 0.5 %; Mississippi 16.5 %; North Carolina 0.6 %; South Carolina 0.1 %; Tennessee 15.3%; Texas 6.8%; Virginia 4.8 %; Arizona 5.7 %; California 2.1 %;Colorado 13.1 %;  Hawaii 22.2%; Idaho 21.5 %; and Nevada 5 %. The figures show that the greatest concentration of private prisoners is in the south and west.

Source: Bureau of Justice Statistics Bulletin, April 2003, NCJ 1988877


APCTO activities update


The private prison industry’s lobby group, the Association of Private Correctional & Treatment Organisations (APCTO, see PPRI # 50, 46-44, 40 & 37) has established a new bi-partisan congressional caucus on public-private partnerships (PPPs) with the aim of protecting and expanding privately run prisons used by federal, state and local governments. The caucus will eventually seek to expand the privatisation of other government services.

In April 2003 APCTO released a study which claimed that, between 1999 and 2001, states without private prisons saw corrections costs increase by an average of 18.9 per cent while states with at least some private prisons or jails saw costs increase only 10.8 per cent.






Prison Privatisation Report International

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