Prison Privatisation Report International
No. 61, March 2004
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
UNITED KINGDOM JAPAN AUSTRALIA CANADA SOUTH AFRICA UNITED STATES CHILE BRAZIL RECENT PUBLICATIONS
Open for business to more US companies
More US private prison companies are being invited to bid for contracts in England and Wales. The stated reasons include: the industry restructuring through the Group 4/Securicor deal leading to concerns about the lack of competition (see PPRI #60); the private sector’s need for more contracts to allow them better economies of scale; new prisons are to be built; and existing publicly run prisons as well as other services, especially probation, are to be market tested. Contracts to operate clusters of prisons may be offered.
In an interview with the Guardian, 10 March 2004, Martin Narey, chief executive of the new National Offender Management Service - the prisons and probation services under one organisation- said that he wants to see more providers. “Last summer I visited the US and spoke to two viable US private providers that are not yet operating in England and Wales. I have started a dialogue with them about the possibility of their bidding for future work.” He declined to name the companies.
There US companies that could be invited include Correctional Services Corporation (CSC), Cornell Companies Inc and Management & Training Corporation. However, Dominion Correctional Services is a short listed bidder for Israel’s first private prison and so also appears to have international inspirations. The GEO Group, whether or not it successfully completes a deal to buy Group 4's prison business (see PPRI #60), might also be considered. It remains to be seen whether Corrections Corporation of America - which sold the bulk of its international interests in 2000 and 2001 - is keen to re-enter the UK market.
In 1998 Correctional Services Corporation (CSC) formed a UK joint venture company. Since then, along with its various joint venture partners it has been unsuccessful in its bids to finance, design, build and operate several prisons and two secure training centres.
What they told the competition commission
When the UK’s competition commission investigated the possible implications of Group 4's acquisition of Wackenhut in 2002 (see PPRI # 51), the commission “asked UK and US security firms if they were planning to enter these [corrections] markets, and how attractive the markets were to them.”
The US firms were CSC and Cornell. The commission reported: “We noted that several firms have expressed an interest in entering these markets. Cornell Companies Inc told us that it was prepared and eager to expand its quality services and skills to other countries, particularly the United Kingdom. It said that was primarily interested in expanding into prisons, juvenile detention, secure training centre and immigration detention centre construction and management services. Cornell also commented that perceived advantages to incumbents would not deter it from submitting a bid in the UK. It said that increasing the number of UK private custodial contracts would make entry into the UK market more attractive to the company.”
Cornell said that it had expressed interest in bidding for future projects to the prison service contracts and competition group and the youth justice board “and had received responses from both organisations encouraging it to participate in future competitions.” To dat, Cornell has not bid for UK contracts.
Meanwhile, Correctional Services Corporation told the commission that it had bid on one contract “at the request of the UK government” and it “would be interested in providing transport services for immigrant detainees in the UK.” Although it had not competed for recent projects CSC “would consider bidding on future projects if it felt contracts would be awarded on a competitive basis.”
Wackenhut Corrections Corporation (as was) told the commission that the UK market was also attractive “because success in the UK would assist US-based companies to obtain similar contracts in South Africa and Australia. This was because the Private Finance Initiative (PFI) arrangements here for prison contracts were similar to those in South Africa and Australia, whereas the USA does not have this type of arrangement.”
A second project on the way?
The government of Japan only recently announced that it is going ahead with one public private partnership prison but the ministry of justice is to study a second project, according to multinational accounting and consultancy firm PricewaterhouseCoopers (PWC) (see PPRI # 57).
The firm has been advising Japan’s ministry of justice on the country’s first semi-private prison project, a 1,000 bed facility for male and female first offenders. It will be privately financed, designed and built with non-custodial services also provided by a company on a 20 year contract. Correctional services will be provided by the state. The prison will be built in Mine Techno Park and is expected to be ready by 2007. A spokesperson for the government of Japan told PPRI that the ministry of justice conducted research in the UK and US before deciding on a PFI prison project.
New South Wales: private management staved off
Private management of three new prisons being built in New South Wales has been staved off (see PPRI # 57, 55, 52, 46, 41, etc). The Public Services Association, which represents public sector prison officers, has agreed to flat rate overtime payments “as key” to keeping the prisons publicly managed. Other compromises involve different work practices to other state-run prisons. The details have not been disclosed. The Treasury had wanted private management if a comparative study concluded that privatisation was more viable. The state’s premier had said that his “first preference vote” was for a publicly run prison system.
The new facilities at Kempsey, on the mid-north coast; South Windsor, north-west Sydney; and Wellington in the state’s central-west will hold a total of 1,200 prisoners. Kempsey is due to be completed mid 2004. The Wellington facility has yet to be built.
New South Wales has the largest prison system in Australia and still only has one privately managed prison, Junee Correctional Centre, which has been run by the GEO Group (formerly Australasian Correctional Management) since April 1993.
Junee fails to fully meet performance obligations again
“ACM failed to fully meet their performance obligations with respect to compliance with the management specifications to the contract. The department will be working collaboratively with ACM to ensure that they fully comply with their performance requirements,” said the government’s monitor in his performance report on Junee Correctional Centre for 2002/03 (see PPRI #57, 55, 52, 46, 41, 40, 38 & 35). Compliance issues have also been raised in previous years.
Issues of concern in the latest report revolved around case management: the six monthly case plan reviews of all prisoners; the completion of the initial case plan and classification within 72 hours; and the reviewing of case plans of prisoners received from other centres.
The contract with the government requires that the case plan of each prisoner is to be reviewed at least on a six monthly basis. A review found that “local management had failed to comply with this requirement.” The inspector noted that: “departmental intervention was necessary to ensure that case plan reviews were brought up to date.”
A random audit of files of newly received prisoners “revealed that recognised screening protocols were not being adhered to. A follow up audit ... found that Junee ... was not adhering to the department’s screening procedures and protocols as required ...” The inspector added that “local management at Junee were informed of the audit findings but, as at the end of the financial year, they had not introduced protocols to ensure they complied with their performance obligations.”
Prisoner employment was also an issue. The inspector noted that the company had been attempting to maintain a commitment to providing employment opportunities for 65 per cent of sentenced prisoners but this has “proved a difficult task.” The department altered the prisoner mix and the Tyco electrical cable manufacturer, which provided employment to a significant number of prisoners, withdrew from Junee.
The government approved extra finance for upgrading the prison in order to solve some of the building and maintenance shortcomings. The company responded to case plan failures by providing supplementary training to staff.
The company could face reductions in their performance-linked fee for the performance breaches but it was “not possible” for the inspector to provide a final report on ACM’s performance for the purposes of the performance linked fee as “a final position had not been determined.” New South Wales Department of Corrections Annual Report 2002-03, Appendix 22, Junee Correctional Centre 2002/03 Performance Report
* The auditor general for New South Wales has reported that, in 2002-03, Junee operated at 95.9 per cent of its capacity (94 per cent in 2001-02). The cost to the department of corrective services was A$22.9 million (A$21.5 million 2001-02) which consisted of a management fee of A$21 million (A$19.4 million 2001-02) payable to Australasian Correctional Management Pty Ltd and A$1.9 million (A$2.1 million 2001-02) in other direct and indirect costs. The management fee is based on providing accommodation for 750 prisoners.
Auditor General’s Report to Parliament 2003, Volume Six, Tabled 4 December 2003. www.audit.nsw.gov.au/agrep03v6/contents.htm
Death at safety award winning GEO-run prison
An investigation has been launched into the death of a 45 year old remand prisoner who was found hanging in his cell at the GEO Group-run Arthur Gorrie Correctional Centre on 1 December 2003 (see PPRI # 59, 56, 55, etc). The incident follows the Queensland facility being awarded a five star rating by the National Safety Council of Australia.
Meanwhile, two managers at the prison have been suspended after they allegedly directed prison officers not to report that prisoners had been found with home-made alcohol. Under ther terms of the company’s contract with the department of corrective services, such finding should be reported within 24 hours. However, according to the Brisbane Courier, 25 February 2004, the report was delayed. The Queensland Prison Officers Association said that a failure to report such a serious breach was “unforgivable” and has called for “a full and thorough investigation.”
Labor and PPPs
In a compromise, opposing factions the Australian Labor Party (ALP) have agreed to hold a formal inquiry into the role of private financing in public sector projects such as prisons and courts. The inquiry will examine the financial worthiness of public-private partnerships (PPPs) and their long term costs to governments and taxpayers. A spokesperson for the ALP said: “We believe that we should consider public-private partnerships but we also recognise that their use would be dependent on minimising taxpayers’ exposure to risk.
In 2003 the Australian Council of Trade Unions called for governments to issue development bonds to finance projects. Trade unions in Queensland have called PPPs a waste of time and money even though a re-elected Labor administration is pushing ahead with a PPP programme that includes a A$400m development of the Boggo Road jail. The Queensland Council of Unions argues for more publicly owned assets financed by a reduced holding of financial assets.
Meanwhile, the ABN Ambro Bank has teamed up the Development Australia Fund (DAF) to create a A$250 million fund to invest in PPPs. DAF is owned by four superannuation funds which have trade union representation on their boards.
Group 4 recruiting casuals
Group 4 has been recruiting casual staff to work in Port Phillip Prison and on the company operated prisoner transport service in Victoria (see PPRI # 59, 57, 56,51-49, 45, 42, 37-34 & 28-15).
Recruitment advertisements placed by the company state that ‘Group 4 is an equal opportunity employer and provides a smoke free environment’. However, at Port Phillip, the Community and Public Sector Union (CPSU), which represents prison staff, have warned that they may take action over the risk of the effects of passive smoking. In state-run prisons the union recently introduced work bans including preventing staff from handling tobacco products until smoking by prisoners is restricted. At Port Phillip prisoners are permitted to smoke in the exercise yards and in their cells, which are separated into smoking and non-smoking areas.
GEO’s Australian figures
The GEO Group Australia Pty Ltd (formerly Australasian Correctional Management) has a turnover of A$120 million and a workforce of 1,000 people according to a recent recruitment advertisement. The company is a subsidiary of the US firm GEO Group. Australian operations include managing Junee Correctional Centre in New South Wales, Arthur Gorrie Remand and Reception Centre in Queensland and Fulham Correctional Centre and Melbourne Custody Centre in Victoria. It also provides health services to Victoria’s prisons. In December 2003 the company was trying to recruit a new managing director, offering a salary package of A$340,000 plus bonuses.
Victoria’s new semi-private prisons
Work has started on the development of two semi-private prisons in Victoria (see PPRI # 51 & 50). The 600 bed remand centre and 300 bed correctional programs centre are being financed, designed, built and maintained on 25 year contracts by Victorian Correctional Infrastructure Partnership Consortium comprising Bilfinger Berger BOT GmbH with Australian subsidiary Baulderstone Hornibrook as the design and construction company and United KG in conjunction with Baulderstone Services as facility maintenance manager. The state will operate the facilities and provide all correctional services. Construction of the correctional programs centre will be completed in June 2005 and the Remand Centre in October 2005. The contracts are worth A$275 million.
EM suppliers for Western Australia
The electronic monitoring industry has another new market. The government of Western Australia is to electronically tag 250 juvenile offenders. Police minister Michelle Roberts announced in February 2004 that it is a toughening up approach to repeat offenders based on a system used in Britain.
However, children’s rights advocates, lawyers and the state Opposition have condemned the plan. George Davies of the Juvenile Justice Network said that “it’s treating kids like dogs.”
Industrial action at MTC prison
Prison officers at the Management & Training Corporation (MTC)-run Borallon Correctional Centre at Ipswich, Queensland, are taking industrial action in a bid to improve their wages and conditions (see PPRI # 48, 46 & 38-36). The Liquor, Hospitality and Miscellaneous Workers Union (LHMU) which represents some 150 staff is arguing for a six per cent pay rise over two years. MTC has offered just 1.9 per cent a year and is attempting to cut sick leave entitlement from eight to six days a year. Staff work 12 hour shifts and the union is concerned about stress affecting both the health of the workforce and the services they provide. The union’s action includes escalating work stoppages and an overtime ban. MTC won the Borallon contract in 2000 after it outbid the incumbent, Corrections Corporation of Australia.
Battle for wages and conditions at MTC’s Ontario prison
Correctional officers at the Management & Training Corporation (MTC)-run Central North Correctional Centre, Penetanguishene, Ontario, are considering an offer from the company to settle a dispute about improved wages and conditions (see PPRI #58, 49, 44, 38, 37, 35, 34 & 32).
The Ontario Public Service Employees Union (OPSEU) has been negotiating for salary parity with public sector staff. MTC offered to match that rate but refused to implement it until 15 November 2004. The union argued that parity should begin immediately. MTC had offered a slight improvement on vacation time but did not want to implement that until 2006. But the company refused to negotiate on shift premiums, pregnancy and parental top-up allowances or improvements to holiday pay.
OPSEU is recommending that its members accept the company’s latest offer. However, the details will not be made public until after a staff vote on11 March. If ratified, the terms and conditions will form the basis of a one year contract, the first negotiated by OPSEU with the company.
New prisons: future undecided
“While it is early days to assess the rehabilitative impact of the PPP [public private partnership] correctional centres, it is imperative that the practice in the PPP correctional facilities be constantly aligned with the spirit of this White Paper on Corrections, and the strategic direction of the DCS.”
“The Department’s view is that all future design, procurement and building of correctional facilities in South Africa, should exclusively be based on the South African realities. This demands an approach to decision-making premised on continuous and extensive appraisal of societal factors such as levels of overcrowding, offender profiles, crime trends, etc.”
“Policy on the financing models for Correctional Services infrastructure development must be developed to align feasibility studies and public sector comparators in line with National Treasury guidelines. It is argued that the correctional system in democratic South Africa is not sufficiently consolidated and codified to ensure that there is no possibility for divergent approaches to be learnt and for a genuine partnership to be developed.”
“The development of a cost-effective prototype based on economical and practical design solutions, should take into account our unique situation as a developing country. This will ensure a balance between value for money and rehabilitation-friendly facilities and will expedite capitalization and delivery. “
These references to South Africa’s existing privately financed, designed, built and run prisons and the future use of public private partnerships are contained in the government’s draft White Paper on corrections in South Africa. NGOs, individuals and representatives of the companies operating prisons were invited to contribute comments. The correctional services portfolio committee held discussions on 3 and 4 February 2004 (see PPRI # 58, 56, 54, 52, 51, 42, 38, 36, etc).
The companies took the opportunity to promote themselves: for example, the submission by Stephen Korabie of South African Custodial Services was used to introduce SACS and Kensani Corrections “to all other role players and stakeholders.” He reminded the committee that “the minister of finance has continuously urged government departments to engage the private sector to enable them to support and deliver the types and quality services required by the public.” Allowing further private sector provision would “enable the department of corrections to focus on its core business and spend the budget on those services it is required to deliver by legislation while leaving the non-core business to the private sector.”
Mr Korabie also promoted the use of electronic monitoring, arguing that: “there are private operators who have the capacity and the competency to manage the system effectively as demonstrated worldwide. It would be a fruitless exercise for the department to do it alone while the expertise is available in the marketplace to be utilised to ease the burden.”
Kensani Corrections Management suggested that the private sector has the capacity to assist with “... training and monitoring, inmate program development, and evaluation, health issues, bulging prison population, infrastructure and other areas of need. This list is not exhaustive.” The failure to implement electronic monitoring had an “adverse impact on foreign investment and local companies.”
Bloemfontein Correctional Contracts (Pty) Ltd - in which GSL Solutions SA (formerly Group 4) has a 20 per cent equity stake - maintained that “Global Solutions, as a leader in the field of unit management, can render a valuable service to the department ... by giving training to their staff and sharing our expertise.”
The company also said that it was “worth noting” that should the American Correctional Association norm to define overcrowding be applied to its Manguang prison “an additional 500 inmates could be accommodated in the current cells without any capital expenditure.” However, the company did not suggest what the additional operating costs to the government might be.
The company also urged the government to speed up the feasibility study for the procurement of new prisons.
Discussions on the government’s
draft White Paper will continue. The Paper is available at:
www.pmg.org.za/bills/031201draftwhitepaper.htm
* Cost estimates for South Africa’s four proposed new prisons should be available by June 2004. At the government’s correctional services portfolio committee on 17 February 2004 there was some discussion about the merits of private versus public construction costs but it was stated that previous inefficiencies within the department of public works’ tendering processes had been resolved. The extent of private sector involvement in the next four prisons has yet to be determined.
Also at that meeting it was revealed that the projected costs of South Africa’s existing two private prisons will be R532.4 million, R579.9 million and R602.9 million for 2004/5, 2005/6 and 2006/7 respectively. The projected combined prisoner population of the two prisons will remains unchanged at 5,952.
New campaign group launched
The Private Corrections Institute (PCI) is a new not-for-profit organisation established in the US to educate the public, media and elected officials about the dangers of for-profit private prisons, jails and detention centres.
“The time has come to meet this issue head on. PCI is ready, willing and able to help communities looking for resources about for-profit prison companies that the industry doesn’t want the public to know,” said PCI president Dee Hubbard. The PCI board includes activists from the Colorado Criminal Justice Reform Coalition, Florida Police Benevolent Association and National Association of Sentencing Advocates, as well as a former prisoner of a Corrections Corporation of America facility who successfully sued the company.
See www.correctionsinstitute.org
Three more contracts go to France
Vinci Construction Grand Projets has won a 20 year contract worth some Euros 75 million to finance, design and build three prisons and operate non custodial services (see PPRI # 45, 38 & 36). The prisons will be built in Santiago, Puerto Montt and Valdivia and hold a total of 5,000 prisoners. Construction is due to take 33 months. In line with the rest of Chile’s new prison programme, custodial services will be provided by state employees.
Vinci Construction is part of a multinational construction, civil engineering and facilities management company involved in numerous private and public infrastructure projects including airports, tunnels, roads, bridges and hospitals.
Paraná’s mixed model to end in June?
The governor of the state of Paraná has said that six prisons in which the state has appointed the prison director and chief of security but a company provides the services will not have contracts renewed when they expire in June 2004 (see PPRI # 43). Operation will revert to the state. The Penitenciaria de Guarapuave was the first in the state and the first in Brazil. When it opened it was hailed as a model as the prisoner were employed making furniture in factory within the prison. However, since the collapse of that business no prisoners have been employed. There are still three similarly operated prisons in the state of Ceará.
Prison Privatisation and Neo-Liberalism: Ill-effects for the Poor and Minority? By Curtis R. Blakely, Southern Illinois University, Prison Service Journal, No. 151, January 2004. PSJ, c/o Print Shop Manager, HMPrison Leyhill, Wotton-under-Edge, Gloucestershire, GL12 8HL, England.
“It is certain that correctional privatisation and other neo-liberal practices will continue to gain momentum ...as such, scholars and correctional practitioners should remain concerned about the potential abuses that might result from the mix of corporate business practice with the application of rehabilitation and punishment.” This is the second part of the paper ‘The US Government’s Deregulation of the Prison’, published in the May 2003 edition of the Journal.
A Second Look at the Private Prison Debate, James Austin and Garry Coventry, The Criminologist, Vol.28, #5, September/October 2003, American Society of Criminology, www.asc41.com/publications.html
“In the final analysis, the so-called privatisation debate has served as a diversion from the more basic and fundamental question of why this society imprisons so many of its people. Rather than trying to build a better mousetrap, we should ask why we need so many traps, whether they be public or private.”
Resolution Calling for the Abolition of For-Profit Prisons, Presbyterian Church (USA). Approved by the 215th General Assembly (2003) Denver, Colorado, developed by The Advisory Committee on Social Witness Policy of the General Assembly Council. www.pcusa.org/oga/publications/private-prisons.pdf
“Since the goal of for-profit private prisons is earning a profit for their shareholders, there is a basic and fundamental conflict with the concept of rehabilitation as the ultimate goal of the prison system. We believe that this is a glaring and significant flaw in our justice system and that for-profit private prisons should be abolished.” The recently published pamphlet includes a study and action guide designed for personal and class use.
Prison Privatisation Update #10, January-June 2003, Corrections USA, www.cusa.org
The most recent compilation of press coverage of issues related to private prisons.
Prison Privatisation: International Trends
and Implications for South Africa. Report of an Open Society Foundation for
South Africa seminar, Cape Town, August 2003.
www.osf.org.za/Publications/Default.asp#
The seminar was timed to coincide with current developments in South Africa. This document includes the presentation and a report of the question and answer session that followed.
“I know where you live!”: Electronic Monitoring and Penal Policy in England and Wales 1999-2003, Dr. Mike Nellis, University of Birmingham, England, British Journal of Community Justice, Volume 2, No: 3, Spring 2004, Research Centre for Community Justice, Sheffield Hallam University. Details from www.cjp.org.uk
The paper argues that the emerging EM technologies being used with offenders in England Wales “constitute the beginnings of a significant transformation of the way in which community supervision will be understood and undertaken in the early decades of the 21st century.” Although the author has not “dwelt here on the private sector dimension” he notes that the increasing use of contracting out is a further aspect of the transformation process and that the increasing use of commercial organisations “is likely to give increased momentum to surveillant approaches and to further displace humanistic ones.”
ENDS
Prison Privatisation Report International
Public Services International Research Unit (PSIRU)
Business School, University of Greenwich
Park Row, London SE10 9LS, England
Internet: www.psiru.org/justice
Email: Stephen Nathan, stephennathan@compuserve.com