United Kingdom

Panama

South Africa

Australia

United States

Corporate Watch

 

 

Latvia's private prison salvation

Eastern Europe's first private prison is likely to be in Latvia and run by the International Foundation Salvation (IFS), a non-profit religious organisation. Founded specifically to create a network of private prisons across Eastern Europe, IFS claims that prisoners in its custody will be detained in accordance with international standards and their rehabilitation will take place according to Christian ethics, beginning with personal salvation.

IFS believes that private prisons, managed expertly in accordance with Christian principles, will result in changed lives and safer societies, both in Eastern Europe and worldwide. According to IFS, conditions in Eastern European prisons are "horrible" and do not meet  civilised standards.

The organisation's first project is to convert a former Soviet Army building in Riga into a prison for women. The Latvian government is understood to support the plan and will pay a fee for the use of the prison. If financing can be raised,  IFS claims that renovations to the facility can take place within six months, during which time, its staff can be trained.

The foundation's president is Mr Yuri Kapustin, the former deputy director of Latvia’s prison administration. He is now appealing to western charitable foundations and private businesses to help support IFS and has recently made a presentation to the Coalition of Prison Evangelists in Florida. In February 1997 he will be in Texas for a seminar of prison chaplains and a meeting of the Adventist Development and Relief Association.

Most recent available figures  show that in 1994 Latvia had around 12,950 prisoners in 13 facilities. The Ilguciema women's prison held 600 prisoners.  In mid-1994, the director general of the Latvian prison service reported that "financial and material conditions ... make it impossible to rebuild the old prisons ... only four meet international standards at present."

 

 

UNITED KINGDOM

US Churches go to prison

In the UK, the mainstream churches play a significant role in the pastoral care  of prisoners. Now, however, the Verne prison in the south of England is to experiment with a non-mainstream religious organisation financing its service provision and running one wing.

Two American organisations, the Kairos Prison Ministry Inc. and the Association for the Protection and Assistance of the Convicted (APAC) claim  significantly to reduce recidivism amongst prisoners. Kairos, based in Florida, is involved in some 150 prisons in the US, and is a ministry of people “drawn from a broad range of Christian churches”  whose volunteers “have experience in renewal movements within their churches”. APAC’s Christian volunteers currently manage an entire prison in the state of Sao Paulo, Brazil.

The scheme at the Verne will be run under the auspices of the prison governor and within prison rules. Volunteers, using religion as the platform, will help prisoners who choose to be involved to reconsider their attitudes. Prisoners will also be required to participate in the usual prison activities. According to the governor, Mr Tim Turner, “ it will not be a soft option.” Prison Service staff will not be involved in the scheme unless they choose to be. APAC is currently raising funds through charitable organisations and the scheme is expected to start by  Spring 1997. At a time when public sector prisons in England and Wales are having to make budget cuts of 13 per cent over three years, there is concern that such schemes could further threaten existing provision.

Market testing abandoned

The government has been forced to abandon its proposed programme of market testing at least 20 existing publicly run prisons in England and Wales. Lawyers have advised that  it would be unlawful for the Home Secretary to offer a lease on property he does not own and so private companies could not be asked to manage existing facilities.        At least two prison companies would have been happy with taking over the management of existing prisons. But Premier Prison Services thought that it was not an attractive proposition, particularly in the light of the TUPE regulations which safeguard conditions of employees transferring from the public to the private sector.

 

Pioneer’s rethink

UK Detention Services Ltd (UKDS), the company whose joint venture partners lobbied for the concept of private prisons and the enabling legislation to implement the practice in the UK in the 1980s, is considering its future position.

Despite its pioneering role and the fact that Corrections Corporation of America, the world’s largest prison company,  is involved in running it, UKDS has so far only won a single prison management contract. Its three main competitors Group 4, Premier Prison Services Ltd and Securicor however, each have 25 year contracts to finance, design, build and manage prisons as well as shorter term contracts to manage other prisons and/or to run prisoner escort services.

The government’s recent decision to abandon market testing and the political uncertainty over future private prisons in the event of a Labour victory in the 1997 general election has added to the company’s concerns. The company says it is considering its options.

 

First contract renewed

The Wolds prison in north east England was the first to be privately managed in the UK. The contract, won by Group 4 in 1991, has now been renewed, and increases the prisoner population from 320 to 400. Group 4 will be paid a higher fee but the company says that it has been able to reduce the cost per prisoner place per week by £50. Based on the renegotiated contract, it will cost £330 per prisoner per week. According to the company, under the new terms it could be fined up to £50,000 for allowing an escape from Wolds.

 

Fresh evidence

The House of Commons Home Affairs Committee’s inquiry into the management of the Prison Service in England and Wales  took evidence from three private companies on 7 November 1996. Representatives  from UKDS, Group 4 and Premier Prison Services all said that their existing prisons were a great success but admitted that the hiring of inexperienced Prisoner Custody Officers had hampered performance during the first 18 months of their respective contracts.

The Committee of MPs obtained some information  which the Home Office and the companies had previously refused to divulge on the grounds of commercial confidentiality.  For example, Group 4 stated that the profit margin on its contracts was around 6 per cent; Premier Prisons stated theirs was between 6.5 and 7 per cent; and UKDS said theirs was 5 per cent but only 3.5 per cent after tax.

It has always been known that rates of pay for Prisoner Custody Officers (PCOs) are lower than their public sector counterparts, and that the companies also have regional variations compared with nationally bargained rates in the public sector. But starting salaries for PCOs with Group 4 are £15,600 at Wolds and £13,400 per annum at Buckley Hall. Escort service staff get £12,500. Premier Prison Services Ltd pays PCOs at Doncaster prison £14,000 per annum and UK Detention Services pays £14,400. Directors of private prisons however, receive much higher salaries than  governors of public sector prisons, although private prisons have fewer senior and middle managers. The director of Doncaster prison said that, when he joined Premier Prison Services, his salary was £55,000 per annum, around 10 per cent more than he previously earned with the Prison Service.

Both Premier Prison Services and UKDS said that they would like to see between 20 and 25 per cent of the entire prison estate (currently 137 facilities) shared among three to five companies in order to provide economies of scale and suitable career paths for staff.

The Committee is expected to report its findings in the first quarter of 1997.

 

 

PANAMA

 

Privatisation scheduled

The government of Panama intends to privatise the construction of new jail facilities in 1997 but enabling legislation has to be drawn up before the plans can be implemented. Both CCA and Wackenhut have described Panama as a potential market.

 

 

SOUTH AFRICA

 

Private financing approved

 Private financing of new prisons has been approved by the government, although private management has been ruled out. The government has also decided to build a ‘super-max’ prison.

Teething troubles at women’s prison

The state of Victoria’s new private prison for women opened in August and already the government is working with the operator, Corrections Corporation of Australia,  to resolve a number of undisclosed teething troubles. In addition,  local residents are complaining that firefighters have been called out to the prison almost every day since it opened, causing a great deal of disturbance to the community.  The Metropolitan Fire Brigade is attributing the high number of calls to false alarms due to  the prison being a new and technologically sophisticated facility - and the proximity of electric toasters and showers to smoke detectors!

 

Group 4 wins South Australia

      Group 4, which already manages the 110 place Mt. Gambier, the state’s only private prison, has won the contract to manage all in-court security and transportation of all adults and young offenders. From December 1996, the company will serve four state agencies: Correctional Services; Police; Family and Community Services; and the Courts Administration.

 

Code for prison industries

     The increasing employment  of prisoners by Australian companies is being seen as a double edged sword. On the one hand, prisoners are using their time constructively and earning wages. But on the other, companies using cheap labour are able to undercut their competitors. This is acceptable, say some manufacturers’ organisations, when it comes to beating off imports from other countries. But it is not so good when Australian businesses are undercut, causing lost contracts and unemployment.

Although a growing trend for some years, it was in 1993 that this issue came to a head. A cable manufacturing plant  employing 150 people was closed down after the company transferred the work to Junee prison in New South Wales. Junee is run by ACM (Wackenhut). As a result of the prisoners’ much cheaper wages, (between A$50 and A$60 per week compared with A$360 outside) the company was able to sell its products more competitively.

Now a number of Australian businesses have produced a code of practice which they want all state prison enterprises to  follow in order to  prevent adverse effects. Some states have policies to limit the impact of prison industry  schemes on industries within their own states but not on those across state borders.

As well as calling for prison industries to consult and agree criteria with business, the code states that prison industries should not reduce full-time employment or provide an organisation with a competitive advantage based only on labour cost. Prison industries should also be targeted on imported products or services that are unlikely to be produced locally.

 

 

UNITED STATES

Congress mandates

 The Federal Bureau of Prisons (FBoP) is going ahead with the privatisation of a new facility in Taft, California. Last summer, the FBoP decided against privatisation and advised Congress of its reservations. But in October, as part of its budget programme for 1996/97,  Congress added a mandate that the California facility had to be privatised as a demonstration project.

 

Tenders are now  being invited to manage the 1,536 bed low security  prison and 512 bed minimum security prison camp for men. Only companies with three years’ continuous experience of operating a secure corrections institution in the US will be considered.  The contract is for three years renewable up to ten. The issue of who will evaluate the performance of the facility  was not part of the mandate and has not yet been decided. Nor has it been agreed whether privatisation of other facilities will take place in subsequent financial years  before Taft is fully evaluated.

 

Top two’s revenues grow

 Both Corrections Corporation of America (CCA) and Wackenhut Corrections Corp. have reported record levels of  business for the third quarter of 1996.  CCA’s revenues were $75.2m for the three months ended 30 September 1996 compared with $49.5m for the corresponding period in 1995.  For the nine months ended 30 September 1996, revenues were $205.9m and net income after tax $21.2m (compared with $144.9m and $9.2m respectively).

By 5 November 1996, CCA had 38,801 prison beds under contract, either existing or in development, at 57 facilities in the US, Puerto Rico, Australia and the UK. In October, the District of Columbia, which is on course to privatise threequarters of its corrections system,  agreed to CCA’s unsolicited bid to purchase the 898 bed Correctional Treatment Facility  for $52m. The legal formalities have to be resolved before this deal for the main substance abuse programme can be finalised.

Wackenhut Corrections Corp. reported third quarter revenues had increased 43 per cent to $36.8m from $25.8m for the corresponding period in 1995. For the nine months to 29 September 1996, revenues were $99.6m compared with $71.8m in 1995. At 29 September 1996, the company had 24,282 beds, either existing or in development, at 34 facilities in the US, Australia and the UK, as well as  prisoner transportation contracts. Another Wackenhut company also provides food services to prisons in the US.

 

US exports electronic monitoring

      First used in the early 1980s in the US, electronic tagging is a controversial freedom-restricting, home confinement alternative to prison used to monitor, control and/or modify the behaviour of an accused person or sentenced offender. The companies which manufacture the equipment and design programmes regard corrections authorities worldwide as the potential market, and hope that electronic monitoring will become an integral part of  corrections provision.

Currently, and with varying degrees of success,  programmes are operating in the US, Canada, Sweden, Singapore and Australia. Trials are also taking place in the UK and the Netherlands. There are, apparently,  early signs of interest in Italy, France, Spain, Norway and Ireland. However, a pilot project due to start in South Africa has recently been delayed.

Companies are heavily promoting their products as the financially responsible solution to increasing crime rates and rising prison populations.

 

CORPORATE WATCH

BI Incorporated

    There are around 25 companies which manufacture and/or monitor electronic tagging  equipment,  although new companies are springing up as technology is developed. But perhaps the best known of the companies involved in electronic monitoring is BI Inc.

    Based at headquarters in the aptly-named Lookout Road, in Boulder, Colorado,  BI designs, manufactures, markets and supports electronic monitoring systems.   The company also provides 24‑hour monitoring services of its equipment to community corrections agencies who choose to contract out their electronic home arrest programmes.

In the last 11 years, BI has developed four generations of electronic home arrest products, and has grown significantly  by  acquiring competitors, such as Controlled Activities Corp. in 1988, Correctional Resources Inc. (CRI)  in 1990, TrakTek  Security Research, Inc. (SRI) in 1991 and Guardian Technologies, Inc. (GTI)  in 1992.  In December 1995, BI bought JurisMonitor, Inc. to address the needs of programmes designed to reduce risk in domestic violence cases.

In September 1996, BI announced its intention to merge Community  Corrections Corporation (CCC) with the company.  CCC provides probation services in Georgia and Tennessee.  It also announced its intention to acquire Peregrine Corrections, Inc. (PCI) of Denver, Colorado.  PCI is an industry leader in day‑reporting, a non‑residential sanction for people on probation.

The company claims that its products provide viable, cost‑effective solutions to the problem of prison overcrowding, as well as additional innovative tools for corrections agencies and jails to manage more efficiently.

BI also says that its monitoring services enable corrections agencies to effectively manage probation and parole populations for less than one‑half the daily rate of incarceration, particularly if offenders are made to pay towards the cost of their monitoring.

BI’s total revenues increased 31.3 per cent to $39.2m in 1996 from $29.8m in 1995 and the company is encouraged by the trend towards contracting out. Some government agencies purchase equipment and run their own monitoring programmes. Others use both BI’s monitoring equipment and services or purchase equipment from the company and then contract with it for the service portion of monitoring.  Twenty‑six per cent of 1996 net sales revenue was generated from service provider companies and distributors who buy BI’s equipment and provide monitoring services to government agencies.

In 1996, BI sold its equipment to distributors in  the Netherlands and South Africa. But it has found the UK market elusive, where Securicor and Geografix, which operate trial programmes, use equipment from other sources.

BI is currently involved in three legal cases: two  alleging negligence in monitoring and detention and one alleging wrongful termination of a distributor contract. One claimant is seeking damages up to $3m and another up to $2.7m. BI believes, however, that even if it loses, the cases will have no long term adverse effect on the company.