Prison Privatisation Report International

No. 70, Sep-Nov 2005

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.

ISRAEL
First prison contract awarded

Israel’s government has awarded a 22 year contract to a consortium of Africa-Israel Investments, Minrav Holdings Ltd and American firm Emerald Correctional Management to finance, design, build and operate the country’s first private prison at Be’er Sheva (see PPRI #69-67, 64, 62, 60, 59, 56, 52, etc).

The value of the contract for the 800-1,000 bed facility for low/medium risk prisoners is approximately $300 million. Construction costs are approximately $53 million although the government is providing a subsidy of $10 million by way of a set-up grant. The consortium expects an annual profit of 6 -10 per cent. Construction will begin in early 2006 and the prison should be completed by early 2008. Neither Africa-Israel, nor Minrav has previously built a prison. This is Emerald’s first contract outside of the US.

According to www.haaretz.com 16 November 2005 the government’s accountant general, Yaron Zelekha, claims that “in this tender alone we saved NIS 350 million. The entire potential savings stands at some NIS 5 billion for the economy.” However, he did not say how these figures were calculated or whether they took account of the fact that, by April 2005, the government had spent $1.5 million on the privatisation process (see PPRI #68).

In August 2005 Minrav’s managing director Avraham Koznitzki told Globes that “we employed 50 people for several weeks” to prepare the bid. “The cost of participating is NIS two million [approximately $425,000] at least.”

On 28 November 2005, Haaretz reported Israel’s prison service commander, Haim Glick, as saying: “For every deviation the franchisee will be fined by us …we have to maintain secrecy [about the level of fines] because if the prisoners know, for example, how much the fine is for breaking a window or many complaints about the food, they will be able to blackmail the management and take control of the whole prison.” But he also admitted that while supervision of the prison will be “extremely close” neither the size of the supervisory team nor its way of working has been decided.

According to the Louisiana-based Emerald’s website the company manages facilities in the US with more than 3,000 beds. The failed bidder for the contract was Solel Boneh Building and Infrastructure, Dankner Investments and French firm GEPSA.

Government ordered to define limits of privatisation

The government has been ordered by the Supreme Court to define the constitutional limits of the powers it plans to contract out to the private sector. The Government has 60 days to submit these details to the Court (see PPRI #69-67, 64, etc).

The interim decision on 27 October 2005 follows an application in March 2005 by human rights lawyers at the Ramat Gan Academic College of Law who argued that the government does not have the power to privatise the management or contract out the state’s power to use force against prisoners and visitors at the proposed prison to be privately financed, designed, built and run at Be’ersheva.

The court was dissatisfied with the government’s argument, that the ‘Basic Law: The Government’ allows the transfer of part of its authority to other entities under its supervision. The court did not, however, halt the prison tendering process.

Once the government makes its submission the appellants will have 30 days to respond. No date has been set for a further hearing. Although the final outcome has not yet been decided, Aviv Wasserman of the Academic College of Law told PPRI that this case is “unprecedented” and that “government decisions to privatise prisons can and should be legally challenged in other countries.” Case No: 2605/5 Supreme Court, http://elyoni.court.gov.il/Files/05/050/026/n04/05026050.n04.htm

GERMANY
PPP prison for Berlin?

Berlin’s parliament has been debating whether the cost of a new 650 bed prison at Grossbeeren should be included in the budget for 2006/07. The SPD has estimated the construction costs at €87 million. However, the CDU party is arguing that by using a public private partnership (PPP) the construction cost could be reduced to €60 million with further operational savings if the private sector was allowed to run non-custodial services. Three other PPP prison projects are under development in Hesse, North Rhine-Westphalia and Mecklenberg-Western Pomerania (see PPRI #67, 60, 55, 47, 37, 30 etc).

GREECE
Six new public prisons

Six new publicly financed, built and operated prisons with a total capacity of 2,400 beds will be built by 2007 as part of the Greek government’s plan to ease prison overcrowding. Although the government recently passed legislation, Law 3389/2005, to provide a framework for public private partnerships (PPPs) for certain infrastructure projects, prisons courts and police stations remain within the public domain as determined by the country’s constitution.

THAILAND
Private investment for jails

Dhanarak Asset Management, an agency of the Thai treasury, is planning to issue up to five billion baht in bonds to raise finance to improve the country’s prison system. The aim is to build or renovate 20 to 30 prisons. Kanit Sangsubhan, a Dhanarak director told the Bangkok Post, 29 November 2005, that the bonds could be issued “by the end of the year.” The move follows the recent successful completion of a bond financing scheme for a new civil service complex in Bangkok.

Meanwhile, the government’s wish for a prison built under a public private partnership has received a boost following the recommendations from Chulalongkorn University’s Social Research Institute that a pilot scheme should be implemented (see PPRI # 67). The Institute carried out a feasibility study and has suggested that, within three years, a 1,000 bed private prison could be built for 18-25 year olds serving sentences of less than 15 years. The government is considering the recommendations.

UNITED KINGDOM
Extended role for private sector

“In short I see no reason of principle or practicality why offender management should not be provided by the private or voluntary sector,” said Home Secretary Charles Clarke during his speech to the Prison Reform Trust in London on 19 September 2005. Mr Clarke also outlined his plan for a network of community prisons saying that he was “personally committed to the creation of a vibrant mixed economy” in the prisons and probation services.

“A very important part of the development of commissioning and contestability will be the ability to specify and contract for cross-cutting services, straddling the current silos of prison and probation, and making a reality of the end to-end management of offenders, “ he added.

“At present Probation Boards have a free-standing - and exclusive - statutory duty to provide probation services in their geographical areas. In future it will be those who commission who will have the responsibility for defining what services are necessary and ensuring that they are provided. Probation Boards will change into providers of whatever services are commissioned from them - this may be offender management or the delivery of interventions to reduce re-offending or a combination of the two. As time goes on, there will be no guarantee that they continue to be commissioned to deliver services in their area if another provider can do it better - just as there is no guarantee that the public sector Prison Service will continue to run a particular prison or group of prisons. I plan to publish shortly a consultation paper which will set out these proposals on the development of the Probation Service in more detail.”

The Financial Times 20 September 2005 reported that GSL welcomed the home secretary’s comments as “clear recognition that the private sector will continue to have an important part to play.”

This follows industry concerns about the government’s commitment to the private sector and uncertainty about future contracts following the suspension in May 2005 of a programme to market test three existing public sector prisons in south east England (see PPRI #68).

On 4 June 2005 The Mirror (www.mirror.co.uk) claimed it had seen leaked documents revealing government plans to develop five 2,000 bed ‘superprisons’. In answer to a subsequent Parliamentary Question asking what research had been carried out into the operational viability of such prisons, the minister replied: “As the options for the prison estate are considered, strategic need and operational viability are key criteria. Large multi-functional prisons are among the options, and would enable prisoners to progress through their sentences while remaining close to their families and community support, and provide better regimes to help rehabilitate prisoners and reduce re-offending. They would also be designed for purpose and efficiency.” The minister added: “No decision to proceed with any such prison has yet been made. If the decision is to be made, all factors, including the detailed operation of such a prison, will be considered. Broadly, we are satisfied that a large prison appropriately designed with separate sections and zoning is operationally viable,” (Hansard, 21 July 2005).

Immediate action required at GSL prison

“So great were the concerns that I immediately informed Ministers and urged the Chief Executive of the National Offender Management Service to take immediate and decisive action,” said the chief inspector of prisons for England and Wales, Anne Owers, in her latest inspection report on GSL UK Ltd-run Rye Hill prison (see PPRI #59)

Reporting on her April 2005 unannounced inspection, the chief inspector noted “very serious concerns about safety” and staff turnover was “around 40% a year.” She said: “The situation we found at Rye Hill raises some important questions. They include: whether contractually agreed staffing levels are sufficient for a prison of this kind; what systems and pay structures need to be in place to support staff retention; and the effectiveness both of internal management systems within the prison, and of external monitoring and management. These are all issues that were raised in last year’s National Audit Office report into contracted out prisons. It is clear that privately-run prisons can provide models of good practice; but it is equally clear that they can drift away from the basic tenets of good prison-craft. This had happened at Rye Hill, as it had at Ashfield, to an even greater extent, at the time of our 2002 inspection.”

She added: “Ashfield has since improved dramatically. There is no reason why Rye Hill should not do the same. But, in order to do so, it will need to tackle the fundamental issues of staffing and management identified in our last report, and highlighted even more strongly in this one. At our next inspection, we expect to see significant and sustained improvement, and a staff group that is enabled to provide a positive, safe and supportive environment for the serious and long term offenders that Rye Hill holds.”

Rye Hill is a category B prison holding serious offenders serving sentences of over four years. It was opened in January 2001 and first inspected in June 2003. At that time the chief inspector said that: “staff treated prisoners with respect, but … most officers were fairly new and young, often with far less experience of prison than the long-term prisoners in their care; and there were relatively few of them. We were not clear, on all wings, that the appropriate boundaries had been drawn and were being maintained…… We believe that there is a need for more robust and visible management to support wing staff in ensuring safety and stability, without compromising positive and interactive staff–prisoner relations.”

In her new report Ms Owers said: “The prison undertook to put in place more effective management and support systems. However, this full unannounced follow-up inspection found that those key concerns had not been dealt with. Indeed, the prison had deteriorated to the extent that we considered that it was at that time an unsafe and unstable environment, both for prisoners and staff. It was by no means apparent to us that the inexperienced and poorly supported staff group, 30% of whom had been in post less than 6 months, were fully in control of the very lightly-staffed units.”

She also remarked that, in the period immediately before the inspection, “the prison had experienced an apparently self inflicted death, a hostage situation and concerted indiscipline; and positive drug test results had sharply risen. Over the preceding months, assaults on staff and adjudications had increased significantly. Several staff were under investigation. During the inspection, a death occurred which resulted in a murder investigation.”

Inspectors found “inexperienced staff, in twos and sometimes alone, on a wing of 70 prisoners, who were unlocked for most of the time. Staff were inadequately supported by managers and were sometimes surviving by ignoring misbehaviour or evidence of illicit possessions. Prisoners themselves told us that they wanted a more visible, and a more robust, staff presence. We were shown mobile phones, and prisoners reported the presence of drugs, alcohol and knives.” Ms Owers’s other comments included:

• “Prisoners also said that they themselves sorted out fights and bullying: and we saw evidence of staff being bullied by prisoners and withdrawing from, rather than confronting, intimidatory and aggressive behaviour.”
• “Managers were not a visible presence on the wings: we were told by prisoners and staff that they rarely made an appearance when prisoners were unlocked. There was a 40% staff attrition rate, and of those who remained many worked away from the harassed residential areas. This created a vicious circle: so that a significant number of residential staff remained inexperienced.”
• “We were impressed by the enthusiasm and keenness of these officers, and their positive approach to their task and to prisoners; but this alone did not equip them to set and enforce the proper boundaries. Nor did it enable them to answer questions and complaints from prisoners, many of whom knew the workings of a prison better than the staff. This in itself caused considerable frustration among prisoners and generated anger and abusive language towards staff. Moreover, it was evident that some critical systems, such as suicide prevention and personal officer work, were suffering because staff were unable, or did not know how, to engage with either prisoners or the appropriate systems.”
• “There were other important concerns that had not been dealt with. Race relations needed considerable development. As we have found in all privately-run prisons, racial monitoring was inadequate and not acted upon; our own monitoring showed disproportionate use of force against black prisoners. There was no Listeners scheme to support suicidal prisoners. None of the staff dealing with vulnerable prisoners had received the training recommended in our last report, and which the prison said had been actioned.”
• “However, there had been improvements in activity, and in resettlement. “More activity spaces were available for prisoners, but, in a training prison, too few offered the opportunity to acquire qualifications. Pay differentials continued to disadvantage those in education. Resettlement provision had progressed considerably, with effective sentence planning, though it needed continued management focus to progress further.”
• “Rye Hill has considerable potential. It is a new, well-maintained prison, where prisoners are able to spend considerable time out of their cells. Prisoners, serving lengthy sentences, had an investment in ensuring order and safety on the wings, particularly as they did not want to have to return to a less open and more restrictive establishment. It was clear that staff were striving to provide a good environment for prisoners, from a basis of mutual respect. But at the time of the inspection it was apparent that this was not enough. Staff lacked the experience or support to ensure that the proper boundaries were in place, take decisive action to challenge misbehaviour, or actively to support prisoners, including those who were vulnerable.”

Following the report’s publication, a GSL press release (28 July 2005, www.gslglobal.com/press_centre) stated that the company “had recognised that Rye Hill was not performing well and, prior to the inspection, had already taken steps to strengthen the prison management and had developed our improvement plan, which it had begun to implement.” The plan “takes account of all of the recommendations contained within the HMCIP report.”
Report on an unannounced inspection of HMP Rye Hill, 11-15 April 2005 by HM Chief Inspector of Prisons, 28 July 2005, http://inspectorates.homeoffice.gov.uk/hmiprisons/docs/Final_draft_Rye_Hill1.pdf?version=1

Money Go Round

Premier Custodial Group Ltd paid a dividend of £15.43 million for the year ended 31 December 2004. This compared with £1.72 million in 2003. The subsidiary of Serco Group plc is the holding company for 17 other companies that operate correctional services in the UK.

The directors of Premier Prison Services Ltd, which itself generated a dividend of £15.05 million in 2004, received £773,376 plus £140,247 towards a defined benefit pension scheme. This compares with £357,633 plus £39,256 respectively in 2003. In 2004 one director received remuneration of £207,427 plus £50,648 towards a defined benefit scheme (£133,541 plus £5,566 in 2003). The average number of persons employed by Premier Prisons during the year was 3,062. Turnover for the year was £94.05 million (2003 £79.87 million) and pre-tax profit was £13.7 million, (2003 £607,000) largely due to £14.16 million dividends ‘from shares in Group Undertakings’. Premier Prison Services Ltd holds 100% of the equity in Premier Geografix,Ltd, Premier Monitoring Services Ltd, Premier Training Services Ltd and Premier Detention Services Ltd.

UK Detention Services Ltd (UKDS) made a pre-tax profit of £2.63 million (2003, £1.95 million) from turnover of £39.1 million (2003, £30.3 million) for the financial year ended 31 August 2004. The company’s proposed dividend was £1.9 million (2003, £1.4 million). The company describes its principal activity as the operation of prisons, immigration centres and probation service hostels. The directors’ report notes that: “Both the level of business and the year end financial position were satisfactory and the directors expect that the present level of activity will be sustained for the foreseeable future.” The highest paid director earned £188,965 and the company’s contribution to his money purchase pension scheme was £33,942. UKDS is a wholly owned subsidiary of Sodexho Alliance SA of France.

Onley Prison Services Ltd has a 26 year contract signed on 23 July 1999 for the provision of design, construction and management services for Rye Hill prison (see above). Pre- tax profit for the year ended 31 December 2004 was £0.7 million (2003, £0.7 million) from turnover of £10.8 million (2003, £10.6 million). Under the terms of its contract the company is committed to pay fixed and variable fees to GSL UK Ltd based on the number of prisoner places for the remainder of the contract. Payments in the year ended 31 December 2004 were £9.6 million (2003, £9.5 million.) Global Solutions Ltd and GSL UK Ltd, companies related to GSL Joint Ventures Ltd, provided administrative and technical services to the company during the year at a cost of £16,000 (2003 £17,000) for Global Solutions Ltd and £27,000 (2003 £48,000) for GSL UK Ltd. Similar services were also provided by Carillion Construction Ltd at a cost of £27,000 (2003 £39,000). The company is a wholly owned subsidiary of GSL Carillion (Onley) Ltd, owned 50-50 by Carillion Private Finance Ltd and GSL Joint Ventures Ltd.

ECD Cookham Wood Ltd’s pre-tax profit was £1 million (2003, £1.1 million) from turnover of £10.1 million (£2003, £9.78 million) in the financial year ended 31 December 2004. The company has a 16 year contract signed on 3 March 1997 for the design, construction and management of Medway Secure Training Centre. The company is committed to paying fixed and variable fees to GSL UK Ltd based on the number of available trainee places at Medway. Payments in 2004 were £9.1 million (2003, £8.7 million).

As well as ECD Cookham Wood Ltd, GSL UK Ltd’s other related companies include Fazakerley Prison Services Ltd, Yarls Wood Immigration Ltd, UK Court Services (Manchester) Ltd and Cheshire Custody Services Ltd.

• On 12 July 2004 Group 4 Falck/AS sold Global Solutions Ltd to De Facto 1121 Ltd, whose ultimate parent company is De Facto 1119 Ltd, which in turn is controlled by venture capital funds associated with Englefield Capital and Electra Partners Europe Ltd. A total of £218.2 million was raised by De Facto 1119 Ltd and its subsidiaries De Facto 1120 Ltd and De Facto 1121 Ltd to fund the acquisition of GSL, to cover the purchase price of £202.5 million and related transaction costs of £15.7 million. HBoS plc (Halifax Bank of Scotland) provided £110 million of the finance. Global Solutions Ltd’s PFI/PPP operations include prisons and immigration detention centres in the UK and abroad as well as health and education services.
  
  De Facto 1119 Ltd’s venture capital shareholders include: The Englefield Fund LP; The Englefield Affiliates Fund LP; The Englefield Institutional Affiliates Fund LP; Electra European Fund GmbH & Co KG; Electra European Fund LP; Ogier Employee Benefit Trustee Ltd as Trustee of the De Facto 1119 Ltd Employee Benefit Trust; and Ogier Employee Benefit Trustee Ltd (Nom).
• Private prison companies in England and Wales received £180.9 million for the operation of nine prisons in financial year 2004-05, according to pre-audited figures contained in a report published in July 2005. However, this figure excludes payments for two new prisons opened by UK Detention Services Ltd (UKDS) during the period. Office for Contracted Prisons, Statement of Performance and Financial Information, April 2004 to March 2005, National Offender Management Service.
• The private companies running three secure training centres for children aged between 12 and 17 received a total of £75.85 million for the three financial years 2002-2005. Securicor Justice Services, which opened Oakhill at Milton Keynes, its first and England’s fourth centre in August 2004, had received £7.24 million as at 31 March 2005, (Hansard, 11 July 2005).
• In 2004 Securicor was penalised £311,995 for the late opening of Oakhill Secure Training Centre and a further £572,120 for the non-availability of places. GSL, the operator of Medway STC was fined £54,000 in 2003/04 and £37,085 in 2004/05 for failure to deliver specific services, (Hansard, 11 July 2005).
• Asked in a Parliamentary Question what estimate has been made of the without-profit cost of one bed for one night in a secure training centre; and what cost, including VAT, is charged by contractors, the minister replied that: “Letting contracts for secure training centres involves an extensive competitive process to ensure value for money. Costs are benchmarked against a public sector comparator. The information requested relates to contracts with the secure training centre operators and is confidential, (Hansard, 12 July 2005).
  

Research on prisoners’ well-being

Research into the well-being of prisoners in private prisons compared with public sector prisons in England and Wales has been commissioned by the government. The Institute of Criminology at the University of Cambridge will carry out the study, (Hansard, 11 October 2005). The fieldwork focusing on eight prisons will start in 2006.

Serco’s market

As well its projected expansion in the UK, British firm Serco’s justice services strategy includes “specific opportunities identified” in Germany, Australia, Ireland, Hong Kong and the Czech Republic, according to the company’s recent interim results presentation (www.serco.com).

In the UK, Serco has combined its Serco Justice and Premier Custodial Group operations. Home affairs contracts contributed nine per cent of its first half year’s turnover of £1,075 million. As part of its presentation of half year results to 30 June 2005, Serco noted that: “the [UK government’s] decision to defer market testing of three publicly run prisons on the Isle of Sheppey was a less encouraging development. Instead, the public sector has been invited to submit proposals on how it would manage the prisons. Separately, the government is expected to announce how it plans to progress its prison contestability agenda. A forum to be chaired by the Home Secretary will be held in October and we remain confident of further opportunities in this area….” and that … “elsewhere, Serco continues to foster strong links with law enforcement agencies across the UK, engaging new audiences in the debate over the value of private sector provision of essential support services.” (Serco Group plc, Business Review).

Serco estimates its “addressable market” for UK home affairs at £2.8 billion comprising offender management, homeland defence, immigration control and law enforcement. According to the company “only Serco has an established contract base across all four segments” and it has identified opportunities in the offender management market alone of more than £0.7 billion through new build custodial establishments, public prison contestability, resettlement, the market testing of probation services and community punishment/unpaid work. (Serco Group plc defence and home affairs presentation, 2 November 2005, www.serco.com) The company’s existing contract portfolio and revenues include: court escorting - £40 million per annum; four adult prisons - £53 million; Ashfield Young Offenders Institution-£14 million; Hassockfield Secure Training Centre - £4m; and electronic monitoring in England, Wales and Scotland - £26 million.

New contracts in Scotland

UK Detention Services Ltd (UKDS) in partnership with Interserve and Royal Bank of Scotland (RBS) has been chosen as preferred bidder for a new PFI prison at Addiewell, West Lothian in Scotland. UKDS runs Forest Bank, Bronzefield and Ashford prisons in England. Meanwhile, Serco subsidiary Premier Monitoring Services has been awarded Scotland’s £30million electronic tagging contract. Premier will take over from the existing contractor, Reliance, in April 2006. The contract will run for five years. Another Serco subsidiary runs Kilmarnock Prison (see PPRI #68, 67, 63, 60, 56, 55, 52, 51, etc).

AUSTRALIA
Junee monitor’s report

Victoria: Costs are secret

“Information relating to the cost per prisoner for private prisons - Fulham Correctional Centre/Port Philip Prison - is commercial in confidence and therefore not specified.” That was Victoria’s minister of corrections’ answer to a Parliamentary Question asking the average cost of keeping a prisoner between 1 January 2004 and 30 April 2004 (Victoria Hansard, 14 September 2005). The minister also refused to divulge staff numbers for the two private prisons: these were “not available,” he said.

New lobby group formed

A new think tank promoting public private partnerships for new infrastructure in Australia has been formed. Infrastructure Partnerships Australia’s (IPA) 36 members include MacQuarie Bank, Ernst & Young, Thiess, Leighton Holdings, Babcock & Brown and Bilfinger Berger. A former minister for major projects with the Kennet government in Victoria, Mark Birrell, is IPA’s chairman. The Kennet administration implemented prison privatisation in Victoria (see PPRI #3 onwards). Mr Birrell told the Financial Review, 26 September 2005, that: “The aim is to have a forum that brings the key players in one room and which recognises that great new capital projects only occur if you have the partnerships right. We will unashamedly support PPPs, but also traditionally funded capital works where that is suitable.”

Junee contract extended

The GEO Group has been awarded an extension of its contract to run Junee Correctional Centre in New South Wales for a further three years until March 2009 (see PPRI #69-67, 64, 61, 57, 55, etc). However, GEO has had to review its security after a prisoner who was serving eight years for armed robbery escaped on 28 October 2005 by walking out Junee’s front entrance.

• New South Wales’ Public Accounts Committee has tabled its report on value for money from correctional centres (see PPRI #69). Full coverage will appear in the next issue of PPRI.

NSW privatising police stations

The private sector is being invited to manage the New South Wales Government’s A$600 million police property portfolio. Twelve hundred police properties will be offered under a five year contract. The private sector will also help buy new police stations, refurbish existing facilities and sell older properties in prime locations. Surplus funds will be used to finance new developments. The government has a budget of A$200 million over five years for spending on police stations but that is deemed to be inadequate.

GEO’s employee survey

The majority of GEO employees like their work and find their jobs interesting and challenging, according to the results of the 2005 GEO Employee Survey in Australia. GEO’s recent in-house newsletter reports that: “Nearly 500 employees participated…and it is pleasing that many of our employees have not only identified areas for change but are willing to be part of the improvement process.” The need for improved communications between employees, centre management and head office “was identified as important in order to enhance work environments and increase job satisfaction….” and that “recognition, training and job evaluation are also high priorities for employees.” GEO Australia’s managing director, Peter Bezuidenhout said: “Armed with feedback on these and other important issues we will further address the strategic direction for the next three years to make GEO Australia the employer of choice and a company with whom we will all be extremely proud to be associated. It will also ensure that we are seen by our clients as the supplier of choice and the best in the country.” GEO Group Australia Pty Ltd Newsletter Issue 6: October 2005.

Industrial action at GEO prison

Staff at GEO Group’s Fulham Correctional Centre in Victoria had to take industrial action before being awarded a 12% pay rise over three years, lump sum back pay of up to A$1,827, increases in special leave days and other improvements. The company is also prevented from offering individual contracts to staff. The Community and Public Sector Union (CPSU) had argued that guards in Victoria’s private prisons earn up to A$20,000 less and receive three weeks less annual holiday than their public sector counterparts.

The company’s response was that comparisons with state-run prisons were not valid. “We don’t draw comparisons, we never have,” John Myers, GEO’s general manager at Fulham told the Gippsland Times, 13 September 2005. The dispute was referred to the Australian Industrial Relations Commission which recommended the terms of the settlement in September.

GEO’s regional outlook

As well as being interested in bidding for the contract to manage Acacia Prison in Western Australia (see below) GEO Group Australia has expressed an interest in providing services to the Solomon Islands Prison Service under Australia’s federal aid programme AusAID. AusAID is tendering for management and implementation arrangements for the second phase in its Law and Justice Programme through which assistance is provided to the Solomon Islands for justice sector agencies and the corrections system.

AIMS prison contract market tested

AIMS Corporation’s contract to manage Acacia Prison in Western Australia is being market tested against bids from other private companies as well as the public sector (see PPRI #66, 64, 62, 59, 57, 55, 52, 48,37, 36, etc). AIMS Corporation, Sodexho’s Australian subsidiary, is being invited to re-bid.

Western Australia’s justice minister, John D’Orazio, said that the decision will ensure better service quality at the prison. “The market is much more competitive than it was four years ago when the tender was originally let,” he said in a media statement released 19 July 2005. He added that: “AIMS performance had been mixed, with the corporation docked more than A$600,000 for not meeting performance measures in the past four years. The government originally intended a new private arrangement to set the benchmark in management and innovative correctional operations in Western Australia, but that has not occurred.” The current A$25.5 million contract expires in May 2006.

• The Government of Western Australia has renewed AIMS Corporation’s security and custodial services contract for 19 courts until 2008 (see PPRI #66, 64, 62, 59, 57, etc). In response to previous criticisms the company has had to hire an additional 80 staff, upgrade training and improve risk management. The Inspector of Custodial Services will review the operation after 18 months.
  

Federal immigration contract under scrutiny

Since 1997 the provision of detention services at the federal government’s detention facilities has been outsourced (see PPRI #66, 63, 57-55, 52, 51, 49, 46-44 & 42-36, etc). Between November 1997 and February 2004 Australasian Correctional Management (ACM, subsequently GEO Group) operated the contract. In August 2003 the government signed a new contract with Group 4 Falck (subsequently Global Solutions Ltd, GSL). Between 1 December 2003 and 29 February 2004 the provision of services was transitioned from GEO to GSL.

According to a recent report by the auditor general, in the year ended 30 June 2005 payments for operations under the contract were A$90 million while administration costs were projected to be A$30 million.

The Australian National Audit Office (ANAO) assessed how the Department of Multicultural and Indigenous Affairs (DIMIA) managed detention centres through the contract, including the transition period and the implementation of lessons learned from operating the first contract with ACM. The ANAO found that: “When it signed this contract [with GSL] DIMIA had more than six years of experience in contracting out detention services. Lessons learned from the previous arrangements are apparent in the general structure of the contract and it contains more information about detention services, but this has not provided the expected benefits. In particular, the contract does not establish clear expectations for the level and quality of services to be delivered; mechanisms to protect the Commonwealth’s interests are not clear; and there is insufficient information about the quality of services being delivered and their costs to allow a value for money calculation.” Other findings included:

• “…observations made in the transition report that GSL had not been adequately prepared for the transfer of some centres...”
• “DIMIA’s monitoring of GSL’s performance focuses on incidents (with considerable discretion on reporting and what is an incident) and, as a consequence, DIMIA is not able to provide assurance that all its standards are being met as expected.”
• “…the terms of the liability, indemnity and insurance regime in the Contract are unclear to the point that it is not possible for the Commonwealth to know with any certainty what insurances are effected, what risks are covered, and to what extent the insurance cover that has been obtained is limited or quantified.”
• “Although DIMIA has publicly stated the need to report on ‘efficient’ detention, the cost and productivity data available indicate that contract administration costs have risen appreciably over the life of the Contract, against a falling detainee population. However, DIMIA does not have sufficient relevant and credible information about the quality of services being delivered and their costs, to determine whether the delivery of detention services is improving over time, or other factors are resulting in increased costs.”

The ANAO also noted that the judgement in the Federal Court of Australia (FCA) case of S versus Secretary, Department of Immigration and Multicultural and Indigenous Affairs [2005] FCA 549 (5 May 2005, see Recent Publications below) “contains a discussion of outsourced arrangements and the provision of certain aspects of detention services, which are relevant to the findings and conclusions of this audit.”

On 10 August 2005 the Joint Standing Committee on Migration agreed to review the audit report. A public hearing was held in October 2005. A separate audit of the tender, evaluation and contract negotiation processes has been carried out and is expected to be presented to the government later in 2005. Management of the Detention Centre Contracts - Part B, Department of Immigration and Multicultural and Indigenous Affairs, The Auditor general Audit Report No.1 2005-06, Performance Audit, Australian National Audit Office, July 2005, www.anao.gov.au See also Audit Report No.54 on the first contract tabled in Parliament on 18 June 2004. The audit found, amongst other things, that the previous detention agreements described the services and service outputs only in very general terms, PPRI #63).

“Significant sanctions” for GSL

GSL Australia Pty Ltd has been fined an undisclosed sum for using unregistered psychologists in breach of its contract with the Federal Government as well as state laws. In answer to a Parliamentary Question, acting immigration minister John Cobb said: “On 7 July 2005 the detention services provider (GSL Australia) advised my department of a total of 15 instances in which visiting psychologists providing services at the Christmas Island Immigration Reception and Processing Centre and Baxter IDF had failed to comply with state mutual recognition registration requirements while providing short term relief or visiting services.” The acting minister added that: “significant sanctions were imposed on GSL as a result of the breaches.”

UNITED STATES
3.3% increase in private prisoners in 2004

The number of prisoners in private facilities in the US increased 3.3% during 2004, according to a new report from the US Department of Justice. There were 98,901 at year end 2004 compared with 95,707 at year end 2003. Overall, the nation’s prison population grew 1.9% which was less than the average annual growth of 3.2% since year end 1995.

At the end of 2004, 34 states and the Federal system reported 98,901 prisoners in privately operated facilities. Private facilities held 5.6% of all state prisoners and 13.7% of Federal prisoners. The largest private prison populations were Texas with 16,668 and Oklahoma with 5,905 held in private prisons. Six states had at least 25% of their prison population housed in private prisons, led by New Mexico (42%), Alaska (31%), Montana (30%), Wyoming and Hawaii (both 28%) and Oklahoma (25%). Some 8.1% of State prisoners in the South and 6.4% in the West were in privately run facilities, compared to 2% in the Northeast and 1.4% in the Midwest.

Since 2000, the number of Federal prisoners in private facilities has increased 60% while the number held in State facilities has decreased 1.3%. As a percentage of all prisoners under State and Federal jurisdiction, the number held in private facilities has remained stable at 6.6% compared with 6.5% for the years 2000-2003.

The following states reported having no prisoners held privately: Connecticut, Massachusetts, New Hampshire, New York, Rhode Island, Illinois, Iowa, Kansas, Missouri, Nebraska, Arkansas, Delaware, West Virginia, Nevada, Oregon and Utah.
Bureau of Justice Statistics Bulletin, Prisoners in 2004, October 2005, NCJ 210677, US Department of Justice, Office of Justice Programs

GEO completes acquisition of US rival

GEO Group Inc has completed the acquisition of rival US firm Correctional Services Corporation (CSC) as well as the sale of CSC’s youth services subsidiary, Youth Services International (see PPRI #69, 61, 58, 55, 45-42, 36, etc).

CSC operated 16 adult facilities with 8,000 beds in six states. With this acquisition announced on 7 November 2005 GEO has contracts to manage 58 facilities with a total design capacity of 48,000 beds in the US, Australia and South Africa. GEO also has a maintenance contract for a youth facility in New Brunswick, Canada. YSI was sold to former CSC chief executive James Slattery for $3.75 million.

• On 21 October 2005 CSC settled the lawsuits arising from the death of prisoner Bryan Alexander at the company-run Tarrant County Community Correctional Facility, a boot camp in Texas (see PPRI #62). The full financial details of the settlement agreement have not been divulged but CSC is obliged to contribute $2.7 million towards the settlement.
  

GEO – how it works

“As President Bush was fond of saying during the campaign last year: ‘It’s not easy: It’s hard work.’ We haven’t been complacent. Our regional vice presidents, our contract compliance vice president, our corporate counsel, and many others who don’t have the term ‘government relations’ in their titles or job descriptions, were tireless in their efforts to advance our company’s agenda through local, state and federal legislation. We achieved much this past year and we are going to succeed even more in the coming 12 months.” Excerpt from vice chairman and president Wayne Calabrese’s presentation to GEO’s National leadership Conference, Orlando, May 2005, reported in GEO World, Third Quarter 2005, Vol. X1, Number 3.

Changing the terms of the debate?

“The real question is not whether the management structure of our penal facilities should be public or private. It is instead why all our prisons, public and private alike, fall so far short of satisfying our obligations to those we incarcerate,” according to Professor Sharon Dolovich of UCLA Law School. Speaking at a public hearing held by the Commission on Safety and Abuse in America’s Prisons in November 2005 Professor Dolovich noted that “the danger posed by the state’s use of private prisons to the possibility of safe and humane prison conditions stems from three identifiable practices.”

She concluded: “The debate over private prisons has largely been framed as a choice between public prisons and private ones…. This is the wrong way to think about the issue. Exploring the problems with private prisons does not vindicate the public system. It instead raises questions about a range of penal practices operative in the prison system in general, practices that we have long taken for granted and thus no longer question. The challenge is to get past the false opposition between public and private. Only then will we recognise the way the study of private prisons operates as a ‘miner’s canary’, warning us that not just the structure of private prisons but also that of our punishment practices in general may need serious reconsideration.”
Changing the Terms of the Debate over Private Prisons, Testimony of Professor Sharon Dolovich, Commission on Safety and Abuse in America’s Prisons, Public Hearing – St. Louis Missouri, 1-2 November 2005, www.prisoncommission.org
See also State Punishment and Private Prisons, Sharon Dolovich, Duke Law Journal, forthcoming December 2005.

• As well as contributions to the other issues discussed at the hearing, www.prisoncommission.org includes other contributions to the public/private debate: Frank Smith of the Private Corrections Institute detailed how cost cutting leads to failures and abuses and how monitoring of private prisons is virtually meaningless; and Corrections Corporation of America’s executive vice president, Richard P. Seiter, argued that “by introducing competition and innovation, privately run prisons have helped create a modern and efficient criminal justice system…”

State oversight:critical audits

1. Colorado
Colorado’s state auditor has reviewed the oversight of private prisons as the state “currently houses 2,800 of its 18,000 inmates (16%) in six private prisons. The department paid more than $53 million to incarcerate inmates in private prisons in Fiscal 2004.” The department of corrections has contracts with six local governments for the confinement of state inmates in private prisons in their jurisdictions: the local governments subcontract with the private prisons. Five private prisons operate within the state. Corrections Corporation of America runs four of the Colorado prisons. The state also houses 100 inmates in a private prison in Tallahatchie County, Mississippi. The auditor’s report was published in June 2005. The findings included:

• the department of corrections is not adequately overseeing the medical clinics operated by private prisons;
• inmates with serious mental illnesses are not being seen by mental health staff at the private prisons within required time frames;
• the private prisons are not consistently following the department’s master menu as required by contracts;
• the department does not adequately oversee the staffing levels maintained by the private prisons where Colorado inmates are housed;
• private prisons have hired some applicants with questionable backgrounds;
• visitors to private prisons are not screened as frequently as visitors to state-run prisons;
• the department’s audit process is inadequate and ineffective in identifying and documenting areas of non-compliance at the private prisons;
• the department has documented continued contract violations by the private prisons yet it has failed to take action to enforce the terms of the contracts;
• the department does not use a competitive bidding process to procure private correctional services;
• department management was not fully aware of the problems identified in our audit or the contract violations occurring at the private prisons as identified by the Monitoring Unit.

State of Colorado, Report of the State Auditor, Private Prisons Department of Corrections, Performance Audit, April 2005, published June 2005 http://www.leg.state.co.us/OSA/coauditor1.nsf/ReportPublicRelease?OpenForm&Start=1&Count=900&Expand=1.5&Seq=2

2. Florida
This review was carried out after the responsibility for contracting for and managing privately operated correctional facilities was transferred from the now defunct correctional privatisation commission (CPC) to the department of management services (DMS). It was revealed that Florida overpaid nearly $13 million to two private prison operators over an eight year period. The inspector general noted that: “The majority of issues discussed in this report stem from a lack of oversight by the state organisation formerly charged with reviewing, directing and monitoring the operations of privately operated correctional facilities, the CPC.” Three of the facilities in question were run by Corrections Corporation of America and two by the GEO Group (formerly Wackenhut Corrections Corporation). The inspector general’s findings included:

• the CPC failed to enforce contract provisions relating to the reporting of vacancies in staff positions. The CPC did not require the vendors to report vacancies during the major portion of the time the contracts were in effect and when vendors did report vacancies, the CPC did not reduce vendors’ monthly per diem payments in accordance with contract provisions. This resulted in vendors at the five facilities receiving payments of about $4.5 million to which they were not entitled;
• the CPC allowed vendors to waive required staffing patterns for non-correctional positions and did not reduce vendors’ monthly per diem payments. As a result, the State overpaid vendors about $290,000 for vacant positions during the period from July 1, 2001 through December 31, 2004;
• the vendor at the South Bay Correctional Facility received questionable payments of about $3.4 million during the period of January 1, 1999 through December 31, 2004, for salary additives referred to as Competitive Area Differential (CAD) payments. The $3.4 million in questionable payments included $1.86 million in overpayment errors, which, when discovered, the CPC made no effort to recover. Moreover, although State Competitive Area Differential rates were reduced during the contract period, the CPC arbitrarily increased the vendor’s contracted per diem rates to cover the difference between the higher differential pay and the reduced differential pay. As a result, the vendor received an additional $1.54 million in per diem payments in lieu of direct CAD payments and contract per diem rates were artificially inflated. The State was charged a “burden” or overhead on the Competitive Area Differential payments the South Bay vendor received during the contract period. These burden payments amounted to about $1.57 million. We could find no justification or authorisation for a vendor to receive such payments. Moreover, our review showed that not only were burden payments not authorised but they were greatly overstated by the vendor;
• in a November 2001 special session, the Legislature zerobudgeted CPC salaries and expense funds. Subsequently, the CPC authorised a per diem increase to the vendors who in turn remitted the per diem increase back to the CPC’s Grants and Donations Trust Fund. These funds were then used to pay CPC staff salaries and expenses. This action caused per diem rates to be artificially inflated. Also, because the Department was unaware of this transaction it could have resulted in loss of salary dollars for current Department employees when new contracts were negotiated. We could not determine whether legislative leaders knew of and condoned the actions by the CPC. This was brought to the attention of Department management during the review. Gadsden Correctional Facility receives an additional per diem rate of $2.30 per inmate (up to 768 inmates) or about $645,000 per year for routine and major maintenance and repair of the facility under the terms of its contract. However, records show that Gadsden Correctional Facility expends an average of only $170,000 annually for facility maintenance and repair. As a result, the State paid about $2.85 million more for maintenance and repair than the vendor expended for calendar years 1999 through 2004.
• The Inmate Welfare Trust Fund is used to supplement the cost of contractually required programs and services. This understates actual per diem rates and should be considered when evaluating compliance with statutory cost savings requirements. During Fiscal Year (FY) 2003-04, vendors expended about $988,000 from the Trust Fund for contractually required programmes and services.

Department of Management Services, Internal Audit report Number 2005-61, Office of Inspector General, Contract Management of Private Correctional Facilities, 30 June 2005, published July 2005, www.MyFlorida.com

ECUADOR
Privatisation to be expedited

“The other area requiring a solution is the privatisation of prisons administration, which should be expedited,” said Ecuador’s interior minister Mauricio Gandara. In an interview with El Comercio, 27 June 2005, Mr Gandara added: “That doesn’t mean that the state would stop meeting its obligation for control and security.”

CANADA
Ontario contracts out evaluation

Management & Training Corporation’s (MTC) contract to manage the Central North Correctional Centre (CNCC) at Penetanguishene is due to expire in 2006 (see PPRI #64, 61, 58, 49, 44, 38, 37, 35, etc). However, rather than evaluate the company’s performance itself, the Ontario government has commissioned multinational consultancy firm and privatisation experts PricewaterhouseCoopers to do the work. The company will be assessed for effectiveness, efficiency, sustainability and viability into the future, and relevance to the community. Under the terms of MTC’s contract, the government has to make a decision by May 2006 and give notice of its intentions to the company. The options are to hand the prison over to the ministry of corrections, extend the company’s contract for one or five years, or re-tender the contract.

GLOBAL MARKET
Public Private Partnership (PPP) Summits

Gary Sturgess, executive director of the Serco Institute (see PPRI #68), spoke about “staff concerns in transition from public to private sector-PPP prison” at the UN Economic and Social Council’s Fourth Public-Private Partnership Alliance Meeting on 25 October 2005 in London. The event, held under the auspices of the Committee for Trade, Industry and Enterprise Development’s Working Party on International Legal and Commercial Practice, also included a conference, “How do governments turn PPP service delivery into a reality” with sessions based on “the UK’s success in PPPs”, “learning from and adapting UK experience” and “Russian Federation and PPPs”.

The 6th Annual PPP Global Summit took place in Copenhagen 15 -17 November 2005. Focusing on “key global regions” Europe, the US, “Asia Pacific as part of the global market for PPPs”, Australia and Latin America the £1,045 (plus tax) per head event included a workshop on ‘The Challenges Facing PPPs in the Prison Sector’ with discussions on the inclusion of operational services for PPP projects and the development of France’s first PPP prison. Speakers included Gary Sturgess of the Serco Institute and Richard Payne of Currie & Brown. The event was organised by City & Financial and sponsors included ABN-AMRO, Currie & Brown, DLA Piper Rudnick Gray Cary and PricewaterhouseCoopers.

Washington is the venue for The 2nd Annual PPP/P3 Americas Summit 5-7 December 2005. Again organised by City & Financial with sponsorship from ABN-AMRO, Currie & Brown and PricewaterhouseCoopers, official supporters include The Reason Foundation, IFSL (International Financial Services London), Partnerships UK, Business News Americas and Project Finance International. Noting Chile’s prison projects as an example (see PPRI #61, 45, 38 & 36) the brochure states that: “This important multinational event provides a forum for the government and private sector participants to share ideas on the development of PPP throughout the Americas.”

• PricewaterhouseCoopers has recently published a report ‘Delivering the PPP Promise’ outlining recommendations for streamlining the Public Private Partnership procurement process needed to transform public infrastructure and services across Europe.
  

RECENT PUBLICATIONS

A Study of Best Practice in Prison Governance, Chris Tapscott, Civil Society Prison Reform Initiative, Community Law Centre, University of the Western Cape, Research Paper No. 9, 2005, www.communitylawcentre.org.za/cspri/index.php
The investigation “set out to establish those elements of private prison management which could be introduced into state prisons without excessive costs…” and “… to discover best practices in the governance of five state prisons designated as centres of excellence, together with the two privately managed institutions. The investigation found that there is a range of best practices evident in the management and administration of both private and state prisons. Some of those practices relate to the effective way in which national policies are being implemented, while others reflected innovation on the part of the individual prisons and their managers.”

The author notes that: “in assessing practices in the two private prisons, cognisance was taken of the fact that the contractual arrangements under which these institutions operate provide them with distinct advantages over state prisons. Amongst the most obvious …is the fact that the prisons accommodate the precise number of offenders for which they were designed and their staff-to-prisoner ratios remain constant and appropriate.” Meanwhile “the physical amenities and resources available to private prisons render direct comparisons with state prisons meaningless, it is evident that much of the success of the private prisons may be attributed to the management regimes under which they operate.”

Tapscott also found that medical, educational and training facilities as well as food preparation were generally better in the private prisons as was the use of new technology that allowed best practices in gang management and information systems.

Prisoners leave the private prisons for the state sector six months before their release and “there are no best practices in tracking recidivism in either the state or private prisons.”

In the state prisons examined, overcrowding varied from 13% in one facility to 116% in another which, the author noted, “tends to have a multiplier effect, aggravating staff shortages and resource constraints and exposing weaknesses in administrative practice.” Overcrowding led to staff shortages “from the fact that their staff establishment is based on the number off offenders which the prisons are built to accommodate, rather than the number which they actually accommodate.”

Several of the prisons visited “were not being used for the specific purposes for which they were designed …as a consequence neither the layout of the prison nor the facilities available facilitate the processes of rehabilitation. In contrast, the design and occupancy levels of the two private prisons themselves lend themselves directly to the objectives of both rehabilitation and security.”

• The findings, presented to seminar at the Institute of Security Studies in Pretoria on 14 November 2005, attracted media coverage for some the private sector’s advantages. For example, under the headline ‘Private Prisons doing a better job’ Business Day 15 November 2005 highlighted some of the good practices identified in the report but failed to explain the context. (See also PPRI #69, 68, 64, 63, 61, 58, 56, 54, 52, 51, etc)

Carcel de Pococi, Sala Constitucionale de la Corte Suprema de Justicia, 2004-10492, available in Spanish from PPRI.
The decision of Costa Rica’s constitutional court in the case brought by the ombudsman against the government’s proposal to privately finance, design, build and operate a new prison at Pococi, (see PPRI #68, 62, 52, 51, 49-46 & 42).

Inspecting Private Prisons: An evidence-based critique of the Prison Inspector’s call to introduce private prisons in Ireland, Irish Penal Reform Trust, August 2005, www.iprt.ie
“Citing the most recent research from both Government and independent sources in the UK, US Australia and elsewhere, the IPRT report shows the international evidence of prison privatisation does not support the Inspector’s recommendations or [Justice] minister McDowell’s plans …catalogues a series of false or unsubstantiated claims about the experience of private prisons made in the Inspector’s Annual Report,” (see PPRI #69-67 & 60-58).

Thematic Review, The joint inspection of prisoner escort and court custody in England and Wales undertaken by MCSI Inspection of Court Services (HM MCSI) and HM Inspectorate of Prisons (HMI Prisons), June 2005, published August 2005.
www.hmica.gov.uk/files/ Custody_and_enforcement_draft_5.pdf
In August 2004, a new generation of contracts for the delivery of prisoner escort and court custody services came into effect in England and Wales. Three companies, GSL, Premier Custodial Group and Reliance Custodial Services, collect prisoners from prisons and police stations and escort them to court. At court, the contractors operate the court custody facility and supervise the prisoners. They also transfer prisoners to and from courtrooms, supervise them whilst in the dock and escort prisoners back to designated locations after the hearing.

“We are pleased to report that our inspection has confirmed previous impressions that staff employed by all the custody contractors are generally caring, compassionate and respectful towards the prisoners in their care. There have been improvements in the provision of food and information, and an end to the appearance of prisoners in paper suits. However, the attention given to meeting the diverse needs of prisoners is limited and variable.” The inspectors also noted that:

• safety and security is generally well managed although the communication of risks is not always effective … the standard of custody facilities is improving and most are acceptable. However, the gap between the best and the worst is too wide. Poor joint working between the agencies involved compromises the management and maintenance of some facilities;
• poor implementation of the new contracts, and less than effective joint working, have also characterised the period following the introduction of new contracts for escort and custody in August 2004. Performance under the new contracts has been very disappointing, with prisoner welfare and court business suffering due to late arrivals at court and late returns to prison;
• much of the attention has rightly been on the activity of the contractors and it is clear there is still much work to be done by them to improve performance. However, the prisons and courts need to recognise the role they too have to play in improving performance;
• we are concerned that unless the National Offender Management Service (NOMS), the contractors and Her Majesty’s Courts Service (HMCS) work together to identify and implement system-wide improvements to escort and custody, the levels of performance that could be achieved under the new contracts will not be realised. The signs of improvements that have been observable since last autumn are likely to plateau without more joint working. Contractors will continue to be unable to meet all their obligations, but will successfully plead mitigation against any penalties imposed if the reason for poor performance lies outside their control.
• The Times, 3 August 2005, reported that: “fines of £295,000 have been imposed because of up to 25 escapes from contractors between 1 September last year and 14 June this year.”

The Perrie Lectures: The Price of Everything, the Value of Nothing? Managerialism, in the Prison Service, Prison Service Journal September 2005, No. 161, c/o Print Shop, HMP Leyhill, Wotton-under-Edge, Gloucestershire, GL12 8BT, UK.
Four lectures given in June 2005 and published, as the Journal’s editor states, “as the final decision on whether to reinstate the [market testing of three prisons] competition is made. This has significant implication for the future direction of prison reform: will it be based on efficiency and competition or distinctive public service values?”

In his lecture, Imprisonment: The Four Blair Principles, Dr Andrew Coyle, professor of Prison Studies, Kings College, London, referred back to 1993 when, in opposition, Tony Blair was firmly against privatisation. He recalled one of Blair’s arguments that: “there is a danger that if you build up an industrial vested interest into the penal system … there is a risk that that distorts the penal policy that otherwise you would introduce.”

Coyle said: “…I would like to suggest that the real issue is not about whether private prisons are managed more effectively and efficiently than public ones, or vice versa. The fundamental change which has come about with the introduction of privatisation is the concept of prison as a marketplace and a business which will inevitably expand. This is epitomised in the press release issued by GEO Group Inc on 1 December 2004 … announced that GEO had established a head office in the United Kingdom to vigorously pursue new business opportunities in England, Scotland and Wales, which currently represents the second largest private correctional market in the world.”

Coyle also noted: …”the requirement that all new prisons should be provided by the private sector has meant that the financial and social costs of an increasing use of imprisonment have not been subject to public scrutiny … importantly in social terms the government has not encouraged public debate about why so many additional prison places are needed, being content to argue that it will provide as many places as are necessary to protect the public. This, I assume, is exactly what Mr Blair had in mind when he pointed out that the introduction of private prisons would distort penal policy.”

In another lecture, Prison and Public Policy, journalist Jon Silverman remarked: “I think the artificial polarisation between public and private prisons throughout most of the ‘90s was a smokescreen behind which prison still signally failed to connect with the rest of society.”

The Future of Probation, written submission to the Home Affairs Committee on the Home Office document ‘Restructuring probation to reduce re-offending’. Probation Boards’ Association Critique of ‘the NOMS Partial Regulatory Impact Assessment (RIA)’, The Probation Boards Association, www.probationboards.co.uk
These documents outline the organisation’s arguments against the government’s plans for the service (which include market testing and privatisation, see above). The PBA calls for “a Royal Commission to explore in depth the issues facing the criminal justice system as a whole…”

Inquiry into allegations of racism and mistreatment of detainees at Oakington immigration reception centre and while under escort, Report by the Prisons and Probation Ombudsman for England and Wales July 2005, www.ppo.gov.uk/othereps.htm
This is the report of an investigation commissioned by the then minister for citizenship and immigration, in response to the BBC documentary Detention Undercover: The Real Story aired on 2 March 2005. The programme reported the alleged findings of two undercover researchers whilst employed by the contractor, GSL, at Oakington reception centre and on in-country escorting.

The Ombudsman, Stephen Shaw, concluded that:

“The BBC programme … showed only one incident of physical abuse of a detainee. However, what it demonstrated beyond doubt was the existence of a sub-culture at both Oakington and amongst escort staff of contempt for foreigners, managers, and the Immigration Service. That sub-culture also evidenced a casual acceptance of violence and abuse. Although I am certain that many GSL staff and managers were disgusted and ashamed by what was what revealed - and for that reason the scale of the problem should not be exaggerated by tarring everyone with the same brush - the nature of the problem was appalling.”

He added: “Nor is this a problem for the one company, GSL, alone. GSL only took over the escort contract in January 2003 when its then parent company acquired Wackenhut and took over the staff, uniforms, vehicles and existing ethos. Moreover, amongst the BBC’s un-transmitted material was footage relating to a Securicor employee, and some of my witnesses referred to difficulties at removal centres run by other firms. It is also noteworthy that, had it not been for the BBC film, Officer A would today be working with prisoners at HMP Peterborough having passed the contractor’s (UKDS’s) vetting procedures.”

Shaw also said that “To try to rid the system of such a sub-culture, I believe action is needed to strengthen management (especially front-line management), to increase monitoring, and to encourage moral integrity and resilience on the part of staff.” The Ombudsman made 54 recommendations.

The Evolution of Immigration detention in the UK: The Involvement of Private Prison Companies, Christine Bacon, Working Paper No. 27, Refugee Studies Centre, Despertment of International Development, University of Oxford, UK, September 2005, www.rsc.ox.ac.uk/PDFs/RSCworkingpaper27.pdf
“Despite the government’s assurance that detention is used only as a ‘last resort’, a growing number of asylum seekers, who are not suspected of or charged with any offence, are routinely detained in purpose-built detention centres and criminal prisons throughout the UK. This use of detention has expanded rapidly, from a capacity of 250 places in 1993 to the present capacity for 2,644 persons.

“This thesis looks at how the privatisation of immigration detention centres has affected the evolution of the immigration detention regime in the UK. The thesis is that the privatisation of immigration detention centres is open to criticism on a number of levels, and can be directly linked to the growth of the detention estate, the willingness to detain despite clear principles and rules limiting its use, the secrecy and lack of accountability inherent in immigration detention, and in some respects, the move towards increasingly harsh detention policy and practice. It concludes that the implications of privatisation of immigration detention centres are of grave concern and that at the very least, boundaries as to the extent of private involvement and the capacity of detention space, should be clearly defined. This is especially significant when considering the detention of asylum seekers, who should be detained only as a ‘last resort’.

Women in Immigration Detention: More Questions than Answers, by Eva Cox and Terry Priest, University of Technology, Sydney, August 2005.
“The … paper details some of the ways in which immigration detention facilities are administered and how the system can cover up abuses of the basic rights and needs of detainees.” The authors argue that: “There is ample material that supports the dysfunction of the immigration detention system, much of which emerged before recent official highlighting that the system is out of order, and is in fact seriously damaging to many detainees.” One recommendation is “an urgent review by the Australian National Audit Office of the appropriateness of contracting out the management … to the private sector.”

Findings and Recommendations from Report of Investigation on behalf of the Department of Immigration and Multiculural and Indigenous Affairs, Knowledge Consulting, 2005.
This report finds that the transfer of five detainees from Maribyrnong Immigration Detention Centre (MIDC) to Baxter Immigration Detention Facility (BIDF) on the 17 and 18 September 2004 was “poorly planned and executed.” The Detention Services Provider, GSL (Australia) Pty Ltd (GSL), had in place a generally sound Operational Procedure that had been approved by DIMIA to govern the conduct of the External Transport and Escort of detainees between detention centres. The GSL (Australia) officers who planned and executed the escort failed to follow this approved procedure.

This failure “resulted in serious violations of the Immigration Detention Standards and of GSL’s External Transport and Escort Services Generic Operational Procedure No. 12.5, as follows:

• failure to provide medical assessment and/or treatment for detainees upon whom force had been used and who may have been injured prior to them being placed in the escort van;
• inadequate provision of basic amenities including food and fluids;
• sensory deprivation;
• denial of access to toilet facilities resulting in detainees having no option but to urinate in their compartments;
• denial of rest and exercise;
• failure to meet the special needs of detainees, that is, detainees who could not understand or speak English, by non provision of interpreter services during the escort;
• disregard of appeals for assistance from detainees in obvious distress;
• treating detainees in an inhumane and undignified manner;
• not affording detainees as much personal privacy as is practicable;
• humiliation of detainees; and
• Placing the health and safety of detainees at risk.

The investigation also “found deficiencies in the training of officers in certain areas”. The report contains a number of recommendations.

S v Secretary, Department of Immigration and Multicultural and Indigenous Affairs [2005] FCA 549 (5 May 2005) www.austlii.edu.au/au/cases/cth/federal_ct/2005/549.html
Two detainees at Baxter Detention Centre in Australia had been diagnosed with major depression and sought an injunction to restrain the government from detaining them to prevent their assessment for admission to a mental health facility. The court held that the government had a non-delegable duty of care to the applicants who, by reason of their detention, could not take care of themselves. The court also observed that: “The service provision was so structured that there was a clear and obvious need for regular and systematic auditing of the psychological and psychiatric services provided … there has to date been no such audit.”

Midas Conway and GSL Custodial Services Pty Ltd (U2005/106) Australian Industrial Relations Commission, Decision by Commissioner Whelan, Melbourne 12 September 2005.
Midas Conway, a prisoner held at GSL Custodial Services Ltd’s Port Phillip Prison in Victoria, Australia, had his work in the prison laundry terminated by the company in April 2005. The laundry, part of the prison industry programme, provides a commercial business providing services to airlines, oil rigs, restaurants and nursing homes. Remand and sentenced prisoners are encouraged to enter into a work programme.

The Commissioner decided that “the provision of work to Mr Conway was a condition of [GSL’s] contractual relationship with the State. While they owed Mr Conway a duty of care by virtue of the fact that he was in their care and control, they did not merely by providing him with the opportunity to work become his employer.” Consequently, Mr Conway’s application under the Workplace Relations Act 1996 was not allowed.

Ombudsman Victoria Annual Report 30 June 2005, PP No. 169, Session 2003-2005, 30 June 2005, Edition 32, www.ombudsman.vic.gov.au
The report of the Justice Unit notes that: “The largest number of complaints has been from prisoners in the [GSL-run] Port Phillip Prison, which also has the greatest number of prisoners and the highest turnover. Port Philip deals with 2,500 prisoners per month.” There were 192 allegations about Port Philip Prison and 84 allegations about [GEO-run] Fulham Correctional Centre.

The Fox In The Henhouse How Privatization Threatens Democracy, Si Kahn and Elizabeth Minnich, Berrett-Koehler Publishers, Inc. San Francisco, 2005, www.bkcurrents.com
“Privatisation has been on the right wing agenda for years. Health care, schools, Social Security, public lands, the military, prisons –all are considered fair game.” In this book the authors argue that “the market is not the measure of all things, and that a vital public sector is an indispensable component of a healthy democracy.” Chapter 5, ‘A Worst Case Scenario: For-Profit Private Prisons, concludes: “…Education, not incarceration! is a slogan used by anti-private prison activists and prison reformers. It is a slogan that takes on historical resonance when we remember the struggle to desegregate schools – a struggle that has lessons to teach us about privatisation, then and now.”

Crime Pays: A Look At Who’s Getting Rich From The Prison Boom, www.grassrootsleadership.org/documentary2005.html
“A one-hour radio documentary that explores the extent to which the US prison system has been privatised….” and which “… takes an in-depth look at the corporations that have profited greatly …”

Endowing Justice, Yale University’s Investment In Corrections Corporation of America, A report by the Graduate Employees & Students Organization at Yale (GESO), www.geso.org
“This report provides details of Yale’s approximately $1.5million investment (through its investment manager, Farallon Capital Management) in Corrections Corporation of America (CCA) the largest private prison company in the United States.” It “calls on Yale University to divest its holdings in CCA and to mitigate the effects of prisons on the New Haven community…” The report also notes that “at least 25 other public and private colleges and universities invest in Farallon, which owns 5.5% of CCA.”

Exploring the Determinants of Decisions to Privatise State Prisons by Byron E. Price and Norma M. Riccucci, The American Review of Public Administration, Vol.35, No.3, 223-235 (2005) Sage Publications.
This study examines the potential determinants of state governments to privatise their prisons. The authors argue that “although the polemics of prison privatisation continue to run high, and governments consistently maintain it is cost effective, few studies have empirically examined the actual determinants of contracting out.” This study relies on prison and related data from the calendar year 1990. This base year was selected because it represents a period when states were aggressively privatising their correctional facilities. Moreover, it is 1990 for which we have full data on all variables.” The research “shows that the more plausible explanations for the decision to privatise revolve around political and ideological factors such as the overall political and ideological culture of the state. And it is important to note that due to a host of factors such as budgetary constraints and prison overcrowding, even those states that have Democrat-controlled legislatures are forced to privatise their prison.”

• Byron E. Price is the author of Merchandising Prisoners, Who Really Pays for Prison Privatisation? to be published in March 2006 by Praeger Publishers, www.greenwood.com The book “illustrates that fiscal issues are often trumped by political factors when it comes to the decision to privatise … and considers the financial and political aspects in depth.” He concludes that “the desire to save costs is not the primary reason for state prison privatisation…. This work sets the record straight … revealing the political bias that often drives these policy choices.”

Considering A Private Jail, Prison, Or Detention Center? A Resource Packet For Public Officials, South Texans Opposing Private Prisons and Grassroots Leadership, November 2005, www.grassrootsleadership.org and www.stoppcoalition.org/resources/considering_a_private_jail.pdf
“This resource packet outlines voluminous evidence that privatisation of prisons, jails, and detention centres has correlated with decreased security, inadequate staff training and equipment, inadequate protection of human rights, degrading prison conditions, and poor employment standards.” As well as Case Studies of Jail Expansion Scandals in Texas it also includes a review of The Prison Industry: Carceral Expansion and Employment in US Counties 1969-1994, Hooks, Mosher, Rotolo & Lobao, Social Science Quarterly, March 2004, (see PPRI #63) and a new piece, Rent-To-Own Jails: Public Financing of Private Prisons in Texas by Dr Sean Chadwell, Texas A&M International University, Laredo, who concludes: “In sum, as with any kind of business proposal there are risks, some quite significant, to financing jails and detention centres. At the very least, local government officials should always bear in mind that the financiers, engineers, lawyers and operators who back these kinds of projects are salespeople, there to profit from construction and operation of such facilities.”

Sexual Violence Reported by Correctional Authorities, 2004, Bureau of Justice Statistics, July 2005, NCJ 210333, www.ojp.usdoj.gov/bjs
This “first ever national survey” selected more than 2,700 US correctional facilities holding 79% of all adults and juveniles in custody and reveals statistics from public, military, ICE, Indian country and 32 private facilities. However, the authors note that: “the absence of uniform reporting and tracking procedures necessitates caution when interpreting the 2004 results.”

Electronic monitoring, satellite tracking, and the new punitiveness in England and Wales, Mike Nellis in The New Punitiveness, Trends theories, perspectives, edited by John Pratt, David Brown, Mark Brown, Simon Hallsworth an Wayne Morrison, Willan Publishing, 2005, www.willanpublishing.co.uk
“The aim of this chapter is to explore and explain the significance of the electronic monitoring (EM) of offenders as it has developed in England and Wales, in the context of the well documented shift towards increased punishment that has occurred there.” The author concludes “… even while the managerial surveillant discourse remains ascendant, it is likely that the ‘punitive weight’ of EM will eventually be increased…”

GPS Tracking: What America and England Might Learn From Each Other, Mike Nellis and J. Robert Lilly, Journal of Offender Monitoring, Summer/Fall 2004, www.civicresearchinstitute.com
“In different ways, both countries [The USA and UK] can now claim to be world leaders in the use of EM - America’s usage is far larger, but England’s is far more systematic and strategic.”

Prison Privatisation: Some Recent Developments and Issues, Stephen Nathan, Panel Presentation at Penal Reform International’s Ancillary Meeting, Eleventh United Nations Congress on Crime Prevention and Criminal Justice, Bangkok, Thailand, April 2005. Available from PPRI.
The author “dispels some myths about public private partnerships” and calls on the UN to “reconsider the call – first made in the 1980s – for a study of prison privatisation to be commissioned.”

The Private Finance Initiative: A Policy Built On Sand, Prof. Allyson Pollock, David Price and Stewart Player, Public Health Policy Unit, University College London, October 2005 www.unison.org.uk
“An examination of the UK Treasury’s evidence base for cost and time overrun data in UK value for money policy and appraisal.” The authors conclude that: “Although 677 PFI projects have been approved or completed since 1992, the Treasury has not fulfilled its objective of ‘a sound evidence base’ for a ‘rigorous investigation’ of PFI. There is no evidence to support the Treasury’s chief justification for the policy, namely, that PFI generates value for money savings by improving the efficiency of construction procurement. Government policy guidance on optimism is flawed and misleading.”

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: ppri@dsl.pipex.com

From issue 70 onwards PPRI will be published four times a year.