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21032016PrivatisationClick here to download the analysis. 

With NSW prisons overcrowding at a record high, the debate about the privatisation of prisons has resurfaced. NSW Prison population numbers have reached over 11 300 and NSW prisons are not equipped to deal with numbers this high.  As of March 2014, there were eight privately run prisons in Australia, two of which are in New South Wales (Green et. al 2014). These centres are Junee and Parklea Correctional Centres. In 2009, the NSW government announced that the GEO Group Inc. would take over Parklea Correctional Centre. Some advocate that privatization aids in solving prison overcrowding and results in a more cost efficient management of prisons (Martha & Frank , 2012).

See the Inspector’s Report on “Full House – the growth of the inmate populations in NSW” here.

Reasons Against Privatisation
The privatisation of Parklea Correctional Centre was opposed in 2009 and our stance has not changed. Drawing upon the experience across Australia, as well as in the United States, England, New Zealand we see an abundance of reasons to strongly oppose privatization.

Morally wrong
Privatisation is a fundamental attack on the democratic social compact between citizen and state. The use of coercion is monopolised by the state and cannot be delegated to private enterprise. Prison management is not ‘mere administrative or routine tasks’ it necessarily ‘involves the exercise of coercion’ (Brown 2008, p.105). Privatisation, by transferring this power, is a move from the Penal Colony to the Corporate Colony resulting in a loss of accountability and the assignment of judicial power to corporations.  There is an inherent indecency in the concept of corporations making money from the misery of others. Prisoners are human beings, not chattels to generate profits for shareholders.

For a history and analysis of prison privatisation in Australia: Jane Andrew in Critical Perspectives on Accounting, December 2007.

Increase in Incarceration
Another critique put forward by Harding (2002, p. 20) is that the existence of such a program propelled the tendency to produce more incarceration policies. He made this assertion while citing the most notable previous example of privatization, which was at the Sydney city Mission Wilderness program, which was operated at Tallong, NSW for about one year until 1985 (Harding 2002, p.21). To be viable, it ideally needed about 40 youths participating at each of the four stages of the year-long program. As 40 "graduated" from stage 4, another 40 should be entering at stage 1 (Harding 2002, p.21).
In America, CCA and GEO Group have had a hand in shaping and pushing for criminal justice policies such as mandatory minimum sentences that favour increased incarceration. In the past, they have supported laws like California’s three-strikes law, and policies aimed at continuing the War on Drugs (In the Public Interest 2013).
Lawmakers need to advance policies that protect their bottom line and keep pro-privatization lawmakers in office. The Centre for Responsive Politics reports that CCA spent $17.4 million in lobbying expenditures from 2002 through to 2012, while GEO Group spent $2.5 million from 2004 to 2012 (In the Public Interest 2013). There is a risk that similar political behaviour could be engaged in by private prisons in Australia to maintain and increase incarceration rates to ensure a future source of revenue.

No Transparency
There is concern that private contractors would not be subject to the same degree of scrutiny as public operators, in the absence of direct chains of accountability. There is a lack of incentives for privately run prisons to report incidents. Private prisons receive funding from the government on a bonus and penalty basis. Bonuses can be reduced for riots and deaths in custody, and penalties can be imposed for erroneous discharges, assaults and prisoner drug use, amongst other things. As such, there is a tendency towards covering up incidents in private prison facilities that could threaten performance bonuses worth up to $500,000 a year.

See Justice Action's 2005 Campaign against Prison Privatisation in Australia: Briefing about GEO.

This practice of covering up unfavourable information is also relevant in the means by which private prisons deal with employees. In one instance, when an officer breached their obligations, they were not taken care of appropriately. Rather, they were just told to resign from their positions, so that the private contractors did not attract media attention. This means the issue is not made public and the prison operators are not held accountable. This ensures that awareness would not undermine private enterprises’ continued receipt of publicly funded monetary benefits. (From Submission of Bart Birch etc., on Corrections (Contract Management of Prisons) Amendment Bill 4).

Private enterprises are also less accountable to the public. Whilst they may be required to report to government as part of funding contracts, there is no requirement to report to the public and are protected by “commercial in confidence” clauses (Green et. al 2014). They also distance themselves from government by sub-contracting (Green et. al 2014).

A Lack of Concern for Welfare for Prisoners and Staff
In New Zealand there are large amounts of work conducted by casual employees under the private contractor. Due to their casual position, they did not work as frequently or consistently, meaning they were inexperienced, not trained well, and did not know the operations of the prison (From Submission of Bart Birch etc., on Corrections (Contract Management of Prisons) Amendment Bill 5).
In a US prison, staff turnover was found to be rampant, leaving inexperienced guards to manage a tough population (Kirkham 2013).
Green et. al (2014) highlights that the ‘profit imperative’ arguably creates tension ‘between profits and the responsibility of corrections to effectively rehabilitate prisoners and support their re-entry into the community”. This drive for profit materialized when the Victorian Government reclaimed the Metropolitan Women’s Correctional Centre from the private operator, Corrections Corporation of Australia, due to ‘persistent and continuing’ contractual defaults as the safety of staff, prisoners and visitors were not guaranteed, and there was a lack of staff experience.

Low Standards of Care
Privatisation of prisons has been shown to provide unacceptable outcomes in the management of offenders. Stephen Nathan (2008, 24), a leading prison privatization expert, disclosed in the March 2008 edition of the Independent Monitor that a recently leaked report placed 10 of the 11 private prisons in the UK in the bottom quarter of the performance register of all UK prisons, and showed they are consistently worse than their publicly run equivalents.

Read the full edition of Independent Monitor and Nathan's article here. 

The Tendency to adhere to Minimum Standards
Corporations, generally motivated by profit, will only spend as much as they have to when running prisons. That means they will not have the necessary regard to moral considerations of human decency, which are important in a prison system. A study conducted by Biles and Dalton found that Port Phillip prison, Deer Park and Arthur Gorrie all have higher rates for all deaths and suicides than the Australian average (Andrew p. 886)

ACM was caught taking clothes from charities to avoid purchasing them for prisoners, until St Vincent de Paul discovered the scam. Then they tried souring clothes from the Uniting Church who refused when they realised what was happening (Andrew p 891).

Not in the Public Interest
In the corporate world, business needs to grow to survive. Stephen Nathan says that this means privatizing prisons requires more people in the criminal justice system for longer to profit. This is squarely at odds with the public good (Nathan 2008, 26).

In the US it has led to prison corporations being accused of joining with and funding right wing media shock jocks to ramp up the law and order debate so that they can have more people jailed to grow their profits. The more frightened the public is, the more they will pay.

Financially Ineffective
A key argument drawn on to support privatization is financial efficacy as it is perceived that ‘contestability’, where the state no longer monopolises the industry, forces both the Government and private sector  ‘to compete on the grounds of economic efficiencies and service deliveries’ (Green et. al, 2014). The decision by the NSW government to privatize the Parklea and Cessnock prisons was based on a 2005 report of the Legislative Assembly Value for Money from NSW Correctional Centres.

Jane Andrew of the School of Accounting and Finance, University of Wollongong and Damiel Cahill from the University of Sydney attacked the reports that concluded that the privatized model of prison management delivered superior value for money. Their paper, ‘Value for Money? Neoliberalism in NSW Prisons’ (2008, 3, 24) concluded that the report is fundamentally flawed on its own terms and is driven by concepts of ideology rather than, say, evidence of financial savings.

Interestingly, the paper attacks the report form an economic perspective (since they are both accountants) rather than a moral perspective, which we believe has just as much authority. 

Potential Benefits of Privatisation

A solution for overcrowding
In the UK and the US, the growth of private prisons has been a result of overcrowding. (Roth 2004) There are also arguments that under the private sector, construction is more efficient and cheaper. However, these ideals became less clear-cut. (Harding 1992,12).

Inclusion of rehabilitative measures 
Due to private funding, it is more viable for a variety of rehabilitative measures to be included into the prison curriculum. However, prison officers who worked under GEO in New Zealand could not recall any inclusion of rehabilitative measures (From Submission of Bart Birch etc., on Corrections (Contract Management of Prisons) Amendment Bill, 2).

Corrections chief executive Ray Smith says the proposed restructure is about improving rehabilitation, while shifting away from older facilities. He says that the “really important thing here is that we’ve got to turn around the recidivism rate that we’ve got in New Zealand” (Henry 2015). 

Positive effects upon Queensland’s penal system 
Molly Mahlouzarides in “Private Prisons, Public Fears” (2012) notes that operation and management practices of the public sector have been enhanced by the introduction of private prisons to the field of corrective services. However, in order for private providers to be accountable, there would need to be vigilant supervision, appropriate monitoring and proper funding (Mahlouzarides 2012, p.5).

References

Andrew, J & D Cahill (2008). ‘Value for money? neoliberalism in NSW prisons’. Australian Accounting Review.

Brown, A. (2008). ‘Economic aspects of prison privatization: the Queensland experience’.The issues corrections, 104-117.

Green, B, M Inch, H Kitamura & A Kospic (2014). ‘Privatisation of prisons: key issues’.Catholic Prison Ministry, 1-10.


Henry, P (2015). ‘Corrections Association: prison privatization ‘will not work’’.3 News NZ.

In the Public Interest (2013).Criminal: how lockup quotas and ‘low-crime taxes’ guarantee profits for private prison corporations.

Kirkham, C (2013). ‘Private prison empire rises despite startling record of juvenile abuse’. Huff Post.

Mahlouzarides, M (2012). ‘Private prisons, public fears’.Government of Queensland Summer Scholar Journal.

Mason, C (2013).International growth trends in prison privatization. Research and advocacy for reform, 2-18.

Menendez, M E & F C Newman (2012). Prison privatization and prison labour: the human rights implications.Human Rights Advocates, 1-5.

Nathan, S (2008). ‘Blind faith in private prisons’.Independent Mirror, 24-26.

NSW Government (2012). Corrective Services.Productive Commission, 1-177.

Roth, L (2004). 'Privatisation of Prisons'.NSW Parliamentary Library Reseach, 1-105.

21032016PrivatisationClick here to download the analysis. 

With NSW prisons overcrowding at a record high, the debate about the privatisation of prisons has resurfaced. NSW Prison population numbers have reached over 11 300 and NSW prisons are not equipped to deal with numbers this high.  As of March 2014, there were eight privately run prisons in Australia, two of which are in New South Wales (Green et. al 2014). These centres are Junee and Parklea Correctional Centres. In 2009, the NSW government announced that the GEO Group Inc. would take over Parklea Correctional Centre. Some advocate that privatization aids in solving prison overcrowding and results in a more cost efficient management of prisons (Martha & Frank , 2012).

See the Inspector’s Report on “Full House – the growth of the inmate populations in NSW” here.

Reasons Against Privatisation
The privatisation of Parklea Correctional Centre was opposed in 2009 and our stance has not changed. Drawing upon the experience across Australia, as well as in the United States, England, New Zealand we see an abundance of reasons to strongly oppose privatization.

Morally wrong
Privatisation is a fundamental attack on the democratic social compact between citizen and state. The use of coercion is monopolised by the state and cannot be delegated to private enterprise. Prison management is not ‘mere administrative or routine tasks’ it necessarily ‘involves the exercise of coercion’ (Brown 2008, p.105). Privatisation, by transferring this power, is a move from the Penal Colony to the Corporate Colony resulting in a loss of accountability and the assignment of judicial power to corporations.  There is an inherent indecency in the concept of corporations making money from the misery of others. Prisoners are human beings, not chattels to generate profits for shareholders.

For a history and analysis of prison privatisation in Australia: Jane Andrew in Critical Perspectives on Accounting, December 2007.

Increase in Incarceration
Another critique put forward by Harding (2002, p. 20) is that the existence of such a program propelled the tendency to produce more incarceration policies. He made this assertion while citing the most notable previous example of privatization, which was at the Sydney city Mission Wilderness program, which was operated at Tallong, NSW for about one year until 1985 (Harding 2002, p.21). To be viable, it ideally needed about 40 youths participating at each of the four stages of the year-long program. As 40 "graduated" from stage 4, another 40 should be entering at stage 1 (Harding 2002, p.21).
In America, CCA and GEO Group have had a hand in shaping and pushing for criminal justice policies such as mandatory minimum sentences that favour increased incarceration. In the past, they have supported laws like California’s three-strikes law, and policies aimed at continuing the War on Drugs (In the Public Interest 2013).
Lawmakers need to advance policies that protect their bottom line and keep pro-privatization lawmakers in office. The Centre for Responsive Politics reports that CCA spent $17.4 million in lobbying expenditures from 2002 through to 2012, while GEO Group spent $2.5 million from 2004 to 2012 (In the Public Interest 2013). There is a risk that similar political behaviour could be engaged in by private prisons in Australia to maintain and increase incarceration rates to ensure a future source of revenue.

No Transparency
There is concern that private contractors would not be subject to the same degree of scrutiny as public operators, in the absence of direct chains of accountability. There is a lack of incentives for privately run prisons to report incidents. Private prisons receive funding from the government on a bonus and penalty basis. Bonuses can be reduced for riots and deaths in custody, and penalties can be imposed for erroneous discharges, assaults and prisoner drug use, amongst other things. As such, there is a tendency towards covering up incidents in private prison facilities that could threaten performance bonuses worth up to $500,000 a year.

See Justice Action's 2005 Campaign against Prison Privatisation in Australia: Briefing about GEO.

This practice of covering up unfavourable information is also relevant in the means by which private prisons deal with employees. In one instance, when an officer breached their obligations, they were not taken care of appropriately. Rather, they were just told to resign from their positions, so that the private contractors did not attract media attention. This means the issue is not made public and the prison operators are not held accountable. This ensures that awareness would not undermine private enterprises’ continued receipt of publicly funded monetary benefits. (From Submission of Bart Birch etc., on Corrections (Contract Management of Prisons) Amendment Bill 4).

Private enterprises are also less accountable to the public. Whilst they may be required to report to government as part of funding contracts, there is no requirement to report to the public and are protected by “commercial in confidence” clauses (Green et. al 2014). They also distance themselves from government by sub-contracting (Green et. al 2014).

A Lack of Concern for Welfare for Prisoners and Staff
In New Zealand there are large amounts of work conducted by casual employees under the private contractor. Due to their casual position, they did not work as frequently or consistently, meaning they were inexperienced, not trained well, and did not know the operations of the prison (From Submission of Bart Birch etc., on Corrections (Contract Management of Prisons) Amendment Bill 5).
In a US prison, staff turnover was found to be rampant, leaving inexperienced guards to manage a tough population (Kirkham 2013).
Green et. al (2014) highlights that the ‘profit imperative’ arguably creates tension ‘between profits and the responsibility of corrections to effectively rehabilitate prisoners and support their re-entry into the community”. This drive for profit materialized when the Victorian Government reclaimed the Metropolitan Women’s Correctional Centre from the private operator, Corrections Corporation of Australia, due to ‘persistent and continuing’ contractual defaults as the safety of staff, prisoners and visitors were not guaranteed, and there was a lack of staff experience.

Low Standards of Care
Privatisation of prisons has been shown to provide unacceptable outcomes in the management of offenders. Stephen Nathan (2008, 24), a leading prison privatization expert, disclosed in the March 2008 edition of the Independent Monitor that a recently leaked report placed 10 of the 11 private prisons in the UK in the bottom quarter of the performance register of all UK prisons, and showed they are consistently worse than their publicly run equivalents.

Read the full edition of Independent Monitor and Nathan's article here. 

The Tendency to adhere to Minimum Standards
Corporations, generally motivated by profit, will only spend as much as they have to when running prisons. That means they will not have the necessary regard to moral considerations of human decency, which are important in a prison system. A study conducted by Biles and Dalton found that Port Phillip prison, Deer Park and Arthur Gorrie all have higher rates for all deaths and suicides than the Australian average (Andrew p. 886)

ACM was caught taking clothes from charities to avoid purchasing them for prisoners, until St Vincent de Paul discovered the scam. Then they tried souring clothes from the Uniting Church who refused when they realised what was happening (Andrew p 891).

Not in the Public Interest
In the corporate world, business needs to grow to survive. Stephen Nathan says that this means privatizing prisons requires more people in the criminal justice system for longer to profit. This is squarely at odds with the public good (Nathan 2008, 26).

In the US it has led to prison corporations being accused of joining with and funding right wing media shock jocks to ramp up the law and order debate so that they can have more people jailed to grow their profits. The more frightened the public is, the more they will pay.

Financially Ineffective
A key argument drawn on to support privatization is financial efficacy as it is perceived that ‘contestability’, where the state no longer monopolises the industry, forces both the Government and private sector  ‘to compete on the grounds of economic efficiencies and service deliveries’ (Green et. al, 2014). The decision by the NSW government to privatize the Parklea and Cessnock prisons was based on a 2005 report of the Legislative Assembly Value for Money from NSW Correctional Centres.

Jane Andrew of the School of Accounting and Finance, University of Wollongong and Damiel Cahill from the University of Sydney attacked the reports that concluded that the privatized model of prison management delivered superior value for money. Their paper, ‘Value for Money? Neoliberalism in NSW Prisons’ (2008, 3, 24) concluded that the report is fundamentally flawed on its own terms and is driven by concepts of ideology rather than, say, evidence of financial savings.

Interestingly, the paper attacks the report form an economic perspective (since they are both accountants) rather than a moral perspective, which we believe has just as much authority. 

Potential Benefits of Privatisation

A solution for overcrowding
In the UK and the US, the growth of private prisons has been a result of overcrowding. (Roth 2004) There are also arguments that under the private sector, construction is more efficient and cheaper. However, these ideals became less clear-cut. (Harding 1992,12).

Inclusion of rehabilitative measures 
Due to private funding, it is more viable for a variety of rehabilitative measures to be included into the prison curriculum. However, prison officers who worked under GEO in New Zealand could not recall any inclusion of rehabilitative measures (From Submission of Bart Birch etc., on Corrections (Contract Management of Prisons) Amendment Bill, 2).

Corrections chief executive Ray Smith says the proposed restructure is about improving rehabilitation, while shifting away from older facilities. He says that the “really important thing here is that we’ve got to turn around the recidivism rate that we’ve got in New Zealand” (Henry 2015). 

Positive effects upon Queensland’s penal system 
Molly Mahlouzarides in “Private Prisons, Public Fears” (2012) notes that operation and management practices of the public sector have been enhanced by the introduction of private prisons to the field of corrective services. However, in order for private providers to be accountable, there would need to be vigilant supervision, appropriate monitoring and proper funding (Mahlouzarides 2012, p.5).

References

Andrew, J & D Cahill (2008). ‘Value for money? neoliberalism in NSW prisons’. Australian Accounting Review.

Brown, A. (2008). ‘Economic aspects of prison privatization: the Queensland experience’.The issues corrections, 104-117.

Green, B, M Inch, H Kitamura & A Kospic (2014). ‘Privatisation of prisons: key issues’.Catholic Prison Ministry, 1-10.


Henry, P (2015). ‘Corrections Association: prison privatization ‘will not work’’.3 News NZ.

In the Public Interest (2013).Criminal: how lockup quotas and ‘low-crime taxes’ guarantee profits for private prison corporations.

Kirkham, C (2013). ‘Private prison empire rises despite startling record of juvenile abuse’. Huff Post.

Mahlouzarides, M (2012). ‘Private prisons, public fears’.Government of Queensland Summer Scholar Journal.

Mason, C (2013).International growth trends in prison privatization. Research and advocacy for reform, 2-18.

Menendez, M E & F C Newman (2012). Prison privatization and prison labour: the human rights implications.Human Rights Advocates, 1-5.

Nathan, S (2008). ‘Blind faith in private prisons’.Independent Mirror, 24-26.

NSW Government (2012). Corrective Services.Productive Commission, 1-177.

Roth, L (2004). 'Privatisation of Prisons'.NSW Parliamentary Library Reseach, 1-105.

 

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