Chapter 4

International Experiences

Private involvement in the prison system is not a recent development. During the 18th century, most jails were operated by private individuals who managed the sale of prison labour and debited each inmate for the costs of his incarceration. Modern prison privatisation is very different from these earlier forms of contracting out prison services, but it has developed differently in the three countries which have pioneered the use of the private sector in their prison systems. The United States, the United Kingdom, and Australia have implemented prison privatisation programmes in different manners with varying degrees of success.

United States

In the US in the 1800s prison was a combination of labour and punishment. Inmates earned their keep through trades such as shoemaking, weaving, tailoring, and chopping wood. Entrepreneurs owned and operated prisons where labour was sold and prisoners charged for their subsistence costs. The practice of solitary confinement was eventually discarded as the production needs of the age brought about the assembly line. In California, the Prison Act of 1851 outlined a system in which private contractors would clothe, feed, and detain prisoners in exchange for their labour. Prisons in many states were self-sufficient private enterprises, and some even became profitable.

The Civil War hurt the prison-labour industry and most men were away fighting and there was no market for the goods manufactured by prisoners. During the Reconstruction era in the South, Jim Crow laws allowed the police to arrest able bodied men for ‘vagrancy’, or the crime of being unemployed. Land-owners would then pay the fine or bail involved and the prisoner would be ‘freed’ but required to work off his debt. In 1871 the Virginia Supreme Court ruled that the use of prison labour was essentially equivalent to slave labour, and declared the practice illegal. In New Jersey in 1877, unions recognized the threat which cheap prison labour posed to the prospects of ‘free’ labour and rallied to outlaw prison labour. In 1887, Congress restricted the interstate movement of prison-made goods and effectively put an end to the use of prison labour.

During the 1900s, the involvement of non-profit agencies increased and eventually the rehabilitation ideal became the standard mode of operation for prisons. By the 1970s, however, the declaration that ‘nothing works’ started the movement away from rehabilitation programmes as wasteful and ineffective. The development of contracting with private prison companies coincided with the rise to power of the conservative Republican Party in the 1980s. The emphasis in the Reagan era was on smaller government and less spending, which was translated into less federal involvement and increased use of the private sector to provide public services. The call was for the government to function as an agency of oversight rather than provider of services in order to harness the efficiency of the private sector.

Privatisation in general gained popularity during the 1980s, when the prevailing mood was that, "Society has come to depend upon private industry to advance this country’s economic position by relying on competition to induce innovation, research, technological changes, and managerial and entrepreneurial advances."1

The criminal justice system turned to the private sector at first by contracting for programs and services, and then later for the provision of cell space and general prison management services. In particular, the growing public disdain for government spending resulted in considerable restrictions on the ability of state governments to raise capital. Some believe that it was the ability to obtain capital funds that contributed most to the emergence of the ‘design, construction, finance and management’ (DCFM) contract.

Ohio wished to build its own prisons, but was struggling to raise the necessary funds because of statutory limits on the extent of the bond indebtedness permitted. The state government did not seek a fully privatised prison but turned to private financing mechanisms to build public-operated prisons. Through lease purchase financing, the state was able to circumvent voter-approved spending limits. A similar mechanism was used in New York, where a $7 billion bond referendum to build prisons failed and the governor turned to private financing arrangements to see that the desired prison facilities were built. These instances illustrate the point made by Harding when he notes that:

"A primary factor during the initial development of privatisation had been the political reluctance or the constitutional or statutory inability of state government to raise capital to build new prisons at a rate sufficient to keep pace with the exponentially increasing inmate populations held in state or federal prisons and local or county jails."2

The need for additional prisons to accommodate burgeoning prison populations has been central to the development of private prisons. In the United States the number of citizens behind bars has increased eightfold in the last 30 years.3 Today, the United States has more than 2 million prisoners and has just surpassed Russia as the most highly incarcerated country in the world. According to The Economist, "The scale of imprisonment in America is now unmatched in any democracy, and is greater than even most totalitarian governments have ever attempted."4 Mauer, writing for The Sentencing Project in Washington, DC, observes, "No other society in human history has ever imprisoned so many of its own citizens for the purpose of crime control."5

The increase in the prison population is not, however, directly related to crime levels. There are myriad factors which impact on the amount of crime which occurs in a society, in addition to many variables in the criminal justice system as to how many of those crimes result in a sentence of incarceration. The boom in the US prison population has continued steadily since the mid-1970s, yet crime levels have consistently dropped for the past ten years. Arrests for violent crimes, such as murder, rape and robbery, declined sharply from 1990 to 1996, yet the prison population still doubled by the end of 1999.6 Prison populations have not swelled because of increasing crime or because more criminals are being caught, but because of longer and harsher sentences and a reduced use of probation and other prison alternatives.7 Most of these stricter sentencing laws have been directed at non-violent offenders, particularly those convicted of drug-related offences.

The combination of sentencing trends, increasing prison populations, and generally flawed criminal justice policies has been attributed to a collection of political and economic interests referred to as the prison industrial complex. In psychology, the term complex refers to an overreaction to a perceived threat. The prison industrial complex describes the misguided and ineffective reaction of using imprisonment in response to crime. The plain truth is that American voters are easily misled to believe that prisons are the answer to crime, and politicians at both ends of the spectrum have used, or even falsely generated, a fear of crime to gain votes.8

The motivation for the perpetuation and propagation of the prison industrial complex is both political and economic. A political candidate can win an entire election simply by providing evidence that portrays an opponent as ‘soft on crime’. Few politicians will risk speaking out on the behalf of drug addicts and criminals, preferring a Clint Eastwood image to the challenge of explaining basic tenets of penology to the voting public. Equally important to politicians is the provision of jobs and economic growth, and the provision of correctional services is an attractive growth industry. Prisons are labor intensive, and are often located in rural areas where they provide jobs in otherwise depressed economies.

Building a prison is expensive, and private contractors are not unaware of the US$35 billion spent each year on prison construction.9 Prisons are big business, and at least two private prison companies are listed on the stock exchange in the United States. It is not hard to imagine that the convergence of interests which benefit from increased spending on imprisonment can be powerful enough to have an immeasurable, if not overt, impact on criminal justice policy.

Just as powerful business and political interests are in favor of prison privatisation, there are equally powerful groups who are opposed to it, most notably the labour unions. Unions were a major force behind legislation in Pennsylvania which imposed a one year moratorium on new privatisation of prisons or jails. The American Federal, State, County, and Municipal Employees union (AFSCME) got involved and provided support to two candidates for county commission who ran on a ‘take back the jail’ platform. The result was a non-renewal of a jail management contract in the state.

Public employee unions and organisations have consistently supported the campaigns of those who promise to halt prison privatisation, and often accuse the private companies involved of greedily promoting their own self-interest. However it should be noted that public employee unions are also promoting their self-interest in opposing prison privatisation in that increasing privatisation results in a loss of membership dues and bargaining power. There have even been charges that correctional employee organizations in several states have blocked any attempt at penal reform, including the use of prison alternatives or community based corrections. Clearly the interests of those employed by the public prison sector are just as much aligned with the increasing use of prison sentences in criminal justice policy–an accusation often aimed at private prison companies. The unions have charged that private prison companies seek out profit by cost cutting and exploitation of labour, including lower wages, lower pensions, and less employee benefits.

Unions are not the only powerful organisations which are opposed to prison privatisation. The American Bar Association (ABA) is also against prison privatisation. In February 1986, the House of Delegates of the ABA passed a resolution recommending that "jurisdictions that are considering the privatisation of prisons and jails not proceed... until the complex constitutional, statutory and contractual issues are satisfactorily developed and resolved."10

The American Civil Liberties Union (ACLU) has gained a reputation for championing the rights of individuals against encroachment by the state. The concern of the ACLU is that prisoners’ due process rights are more likely to be jeopardized in privately-run prisons than in public-sector prisons. A substantial part of the ACLU’s position against private prisons, however, is based on its position against prisons in general. The ACLU has long charged that there is too much incarceration and the fear is that privatisation will only lead to more.

The United States remains at the forefront of prison privatisation. As of 2000, at least 223,000 adult inmates are in private prisons: more than 10% of the prison population. The number of prisoners in private prisons is increasing at four times the rate of the increase in inmates in public sector prisons.11 The two largest private prison companies in the world are based in the US: Corrections Corporation of America (CCA) and Wackenhut Corrections Corporation (WCC). CCA is the largest provider of prison services in the world, and currently holds 42,000 prisoners in 52 prisons.

One of the first advantages cited in favour of prison privatisation is cost savings. However, the General Accounting Office (GAO) examined five studies which compared cost savings at public and private prisons in the United States. The GAO report, "could not draw any conclusions about cost savings or quality of service, since the four studies that assessed operations costs indicated little difference or mixed results, and the two studies that addressed quality of life reported either equivocal findings or no differences between private and public facilities."12

A faster and more decisive response to mistreatment and maladministration in private than in public prisons? In March 2000, The US Justice Department filed a lawsuit against both the State of Louisiana and Wackenhut Corrections Corporation after reports of excessive force and appalling conditions in the Jena Juvenile Justice Centre. After negotiations and a court injunction were unsuccessful, the US District Judge ordered that the state assume control of the facility. When the contract was officially terminated on 30 June 2000, the facility remained the property of Wackenhut and the state relocated the juveniles to other state-owned facilities. Understandably, State Corrections Secretary Richard Stalder commented that contracting with Wackenhut, "was an experiment that I will not characterise as a success". This incident could be construed as evidence of the poor quality of private prisons. However, this is not simply about a private prison which failed so dismally that it had to be seized by the state. When newspapers covered the story, they invariably failed to mention that the lawsuit filed in March 2000 was not a new case. In 1998, the Justice Department filed a lawsuit against four state juvenile facilities in Louisiana for failure to provide adequate care. When the Jena facility opened shortly afterwards, it was immediately subjected to close scrutiny from the Justice Department. As a result of a monitoring visit in January 2000, the Justice Department submitted a report which found that conditions at Jena were equally appalling and recommended that the original 1998 complaint be amended to include the Jena facility as well. Within three months of the amendment to the suit, the management of Jena was terminated and the state assumed control. Nearly three years after the original suit was filed against the public facilities, very little has changed. Thus, the Jena incident should read as an example of the viability of private prison contracts rather than an indictment of them. The Jena facility could be reverted back to the state, but such an option does not exist for the state-run facilities. The juvenile justice system in Louisiana is in need of reform. However, this problem would exist regardless of its decision to contract out a private prison with the Wackenhut Corrections Corporation.

While it is difficult to determine the cost savings, if any, to be had from contracting out prison services, it is almost impossible to make comparisons of the quality of those services. In Louisiana, a juvenile facility run by WCC was seized by the state at the order of a Federal judge because of the mistreatment of the inmates. However, each of the publicly run facilities were also under Federal review as juvenile justice in the state of Louisiana in general was known to be in a deplorable condition. Only the private facility could be sued and turned over to the state because the other facilities were already run by the state. This could be used as proof that private facilities offer sub-standard services but it also proves that the government has more recourse to correct the situation with a private contractor than with a public agency.

Incidents of mistreatment and maladministration can be found in both public and private prisons and as yet there is no reliable evidence that private prisons are any better or worse than their public counterparts. The interests of the inmates are equally failed by private as well as public prisons in the United States where recidivism rates have remained shameful since long before the private contracting experiment began. The growth of the prison-industrial complex is the greatest threat to the public interest in terms of US criminal justice policy but this again is not the product of the private sector involvement in the field of correctional services.

Australia

Although the United States has the highest number of prisoners in private prisons, Australia has the highest proportion of its inmates in private prisons with 28% in contract-managed facilities. The development of private prisons in Australia was similar to that of the United States in that the prison population was increasing while the public sector willingness or ability to pay for prison expansion was decreasing.

The first private prisons in Australia were operated by American-based companies which formed consortia with Australian companies. In 1990, Queensland embarked on the first private prison in the country. The contract was with a consortium that included CCA, which would provide management, administration, instructors and health care staff. Stan Macionis, Deputy Director General of the Queensland Corrective Services Commission (QCSC), gave four reasons for the introduction of private management in Queensland’s prison service:

The benefits of competition and the stimulus for improved performance by the public sector.



Perceived cost savings and improved efficiency.



The need for cultural and attitudinal change in the management and operation of prisons, including a greater emphasis on rehabilitation and offender programmes.



The need for comparative information with which to make future decisions.13

Queensland had been operating the cheapest prison service in Australia but wished to involve the private sector in order to undermine the power of the Prison Officers Union, which had been blocking attempts to change working practices. Harding observes that, "The various unions representing uniformed staff had, in all states, progressively throttled management control over budgets through restrictive employment conditions and work practices."14 The prison service was struggling to cope with inflated rosters, abuse of sick leave, and unnecessary use of overtime. In an attempt to reduce wage bills, the state turned to privatisation. In other territories, senior management began to explore privatisation options but then backed away when the unions conceded staffing and employment conditions which saved money and also had an impact on the programmes which could then be offered.15

The first private prison in Queensland, Borallon, became a pilot project and it was obvious that the government wished to see the project succeed. Although Borallon was designed and designated as a medium/maximum security facility the QCSC sent inmates who were classified as medium/minimum security. In fact, the operators were permitted to refuse to accept certain classifications of prisoners which might be higher risk or more difficult or expensive to incarcerate. The contract allowed the management to refuse to accept HIV positive, special protection, or suicidal prisoners.

In order to ensure proper competition, the QCSC has become responsible only for the regulation, policy-making, and purchasing of correctional services. The public prisons in Queensland are now operated by a separate government corporation, which now competes with the private companies for management contracts of correctional facilities. Since the involvement of private contractors, Queensland has achieved a substantial reduction in its incarceration rate. This has been cited as proof that discredits the prediction of private companies further building the prison-industrial complex. It should be noted, however, that the Queensland privatisation model does not involve private financing. The government financed the building of the prisons and contracted out the management services only.

The state with the highest percentage of inmates in private facilities in Australia is Victoria. Victoria has 13 prisons with a total capacity of 2,875, although the prison population currently stands at more than 3,000. The Department of Justice is responsible for correctional services, but the actual public provider is set up as a separate government corporation – the Public Correctional Enterprise (CORE). CORE manages ten prisons which house 55% of the prisoner population; the other three prisons are run by private consortia and contain the remaining 45% of the prisoner population.

The Port Phillip prison in Melbourne, contracted to Group 4 Services (a UK company), experienced a number of problems, which led the government to threaten with termination of the contract. In the first ten months that the facility was open, there were four suicides, ten attempted suicides, at least 40 self-mutilations, and two riots. The prison was locked down after one incident where two prison officers were attacked and beaten by prisoners. After a letter of warning was sent by the government, the company responded with a ‘cure plan’ and promises to address the problems. A few months later the prison was locked down again as a result of fights amongst prisoners and the incidents of assaults seemed to be increasing. From the time that it was opened in September 1997, several riots, assaults, deaths, and suicides characterised the poor performance of the prison.

The Port Phillip Prison attracted the attention of the Brunswick Community Legal Service who filed a suit to gain access to the three private prison contracts under the Australian Freedom of Information Act. After several years, the case was won, and the contracts were eventually made available on the government website. In addition, a management audit of the private prisons in Victoria was published in October 2000, referred to as the Kirby report after the invesigation’s chairperson, Mr. Peter Kirby. One of the most important points to note from examining the contracts and the audit report is the hidden inflexibility of the arrangements. The state owns the land, but the buildings are leased for as long as 40 years. The legal and financial complexities involved with terminating a contract in this form make it extremely inflexible. The independent auditor’s report concluded, "In the case of private prisons, the contractual model can actually impede resolution because the operator and the Government can become locked in contractual enforcement mechanisms, rather than the Government simply directing that the problem be resolved."16

The management audit found that the contracts actually negated many of the purported benefits of prison privatisation. In addition to the lack of flexibility which defines any contract, the Kirby report found that the government was restricted in its ability to respond to poor performance by the contractors because, "the contracts effectively require the Government to tolerate significant shortfalls in performance."17 The report goes on to note, "It is difficult if not impractical to enforce adherence to qualitative outcomes in a contractual agreement. This is a major problem inherent in using contracts as the preferred method of service delivery."18

United Kingdom

In the United Kingdom, the juvenile justice system has a long tradition of involvement with the private sector. Reform schools were inspired and created by the private sector in the mid-1800s, and the role of the voluntary sector has remained. In the UK, much like the US, it was the pragmatic appeal of private sector contracting which gained popularity. In the mid-1980s, the Thatcher era saw an almost pathological aversion to public sector spending and programmes. This was accompanied by a belief that the market system brought better efficiency in any field. Attracted by the ideology and faced with overcrowding, the UK followed Australia into the privatisation field with the opening of The Wolds prison in Yorkshire. Management of the 320-bed medium security remand prison was contracted to Group 4 Services.

Wolds was designed by Her Majesty’s Prison Service (HMPS) with the original intention that it would be managed by the prison service. It was contracted to Group 4 in the hope that the private sector could improve prison conditions, as the prison service had seen its share of bad publicity in recent years. The tender documents for the contract reflect this optimistic faith in the superior service delivery capabilities of the private sector:

"The contracting out of the remand prison offers a unique opportunity to establish this fresh look and approach to the way in which prisoners on remand are treated."19

The performance standards for Wolds were much higher than those expected of the public sector, including a provision that prisoners have 15 hours out of cell time. As a result, the staff at Wolds were presented with both an opportunity and a challenge in that they were asked to provide a level of service which had never been offered in the prison service before.

When Wolds opened on April 6, 1992, it was thought of as the "penal experiment of the century."20 The pressure for the great experiment of Wolds to succeed was intense, as then Prisons Minister Angela Rumbold declared, "If, and only if, the contracted remand centre proves a success might we move towards privatisation of other parts of the Prison Service."21 This led to intense scrutiny and monitoring by both the public and private sector.

The research team which studied Wolds throughout its early stages noted that none of the anticipated ‘punishment for profit’ ideology permeated the management structure. Rather, the senior management team was united behind a vision of providing high quality correctional services. The Wolds’ regime was guided by five principles:

The legal presumption of innocence in relation to remand prisoners meant that only those restrictions, the imposition of which were essential in order to hold remand prisoners securely, were justified.



Since Wolds’ prisoners were presumed to be innocent, prisoners should be provided with an environment which was as normal as possible.



Control grounded in constructive relationships between staff and prisoners was more efficient and effective than control by coercion, a principle which they hoped to achieve partly through the recruitment of staff who had no previous prison experience.



The frustrations of prison life should be reduced through the development of administrative procedures, of which both staff and prisoners need to be aware, which facilitated the smooth daily running of the prison.



Wherever possible, the regime provided would exceed the minimum standards specified in the contract below which Group 4 could not operate without incurring financial penalties, particularly in relation to areas such as the provision of visits, which was regarded as a key component in reflecting the first four principles.22

The existence of ‘guiding principles’ is an encouraging development in the management of prisons. In particular, the specific mention of exceeding the requirements of the contract indicates that the private sector is committed to providing quality and not simply through cost cutting.

Unlike in Victoria, the interpretation of the contract was taken as a positive tool in the monitoring of the private prison’s operations. Researchers at Wolds commented:

"By providing an outline of the regime intended for Wolds, the contract provided management at Wolds with a clear foundation on which to base their efforts to achieve their goals, as well as a degree of protection. Because of the contract, it was argued, it would be more difficult to erode any aspect of the regime at Wolds than at a non-contract-out prison, putting the management in a stronger position to resist the vagaries of the criminal justice system, such as sudden increases in the numbers of prisoners being remanded to custody, since any changes would require the Home Office to renegotiate the contract."23

A critical element of the management approach at Wolds was the employment of personnel who had not previously worked for HMPS. Some may argue this is to avoid the hiring of anyone previously involved with the public employee’s union, as union antagonisms towards prison privatisation has been clearly displayed. The rationale offered by Wolds’ management was that hiring of ‘external’ staff meant that the new approach could be more easily conveyed. One member of senior management explained that their hiring practices were employed in an effort to avoid the, "negative bits of the prison service, the negative attitudes of staff to prisoners, negative attitudes of staff to management and negative attitudes of management to staff."24

The experience of this first private prison in the UK was determined a success and shortly afterwards several other existing prisons were privatised and additional private prisons were planned. The private prisons in the UK have not been without problems, and the conditions in many prisons remain substandard. Recently, HMPS won a contract in competition with the private prison companies. The increasing use of the system, such as with CORE and QCORR in Australia, where the public actually competes with the private sector for the contracts will hopefully allow for better understanding of the challenges of providing prison services and ultimately, better service delivery.