The Law and Order Committee has examined the Corrections (Contract Management of Prisons) Amendment Bill and recommends by majority that it be passed with the amendments shown.

The bill amends the Corrections Act 2004 to allow competitive tendering for contracts by private-sector organisations to manage prisons. The bill also specifies what a prison management contract must contain, the delegations, liabilities, and powers of the contractor to subcontract, and the reporting requirements of the contractors, and provides for the appointment of monitors to be responsible for assessing and reviewing the management of the prison.

This bill would require contractors to comply with the Bill of Rights Act 1990 and with international standards on the treatment and welfare of prisoners. It would also require them to fulfil any reporting responsibilities as determined by the chief executive of the Department of Corrections.

We note that section 199I contains provisions for prison management contracts to be presented to the House of Representatives within 12 sitting days after a contract is entered into, or varied or renewed.

This commentary covers the key amendments that the majority of us recommend to the bill. It does not cover minor or technical amendments.

A majority of us make recommendations to amend only clause 5 of the bill. This clause includes the management of prisons under contract, the requirements of prison management contracts, reporting responsibilities, and the use of prison monitors.

Labour members do not support the Corrections (Contract Management of Prisons) Amendment Bill.

Labour members are of the view that the incarceration of citizens is a core Crown responsibility and as such should be under the direct control of the Crown through the Department of Corrections.

Public prisons are morally and fiscally accountable to the taxpayers, whereas private prisons are accountable to their shareholders, with a binding obligation to maximise profits. There is a risk that the pressure to show profit for a private company may lead to compromised service quality, such as lower staff-to-inmate ratios, fewer rehabilitative services, reduced range of services, cuts in staff pay and conditions, cuts in staff quality, or all of the above.

There is also the potential for abuse when a profit-making company has authority to restrict basic civil liberties. Profit motives may supersede the safety of the public, staff, and inmates.

We are also concerned that the passage of this bill will weaken the ability of members of Parliament, the media, and the general public to hold the private contractor to account in respect of corrections outcomes. At the present time members of Parliament can directly question the department and hold it accountable through the use of select committee inquiries, the Official Information Act 1982, and the use of Parliamentary written and oral questions. These avenues are not available for a private company.

The Auditor-General presently has unfettered access to Government departments and agencies, and can inquire into any matter he or she feels appropriate. It is our belief that under this legislation the Auditor-General’s power and ability to inquire directly into matters pertaining to the private-sector contractor will be limited. The Office of the Auditor-General reported to the committee that under this bill it would not have the power to audit a private company and provide an opinion on the performance of that company.

The lack of independence of the people employed to monitor these privately-managed prisons is also a concern. These prison monitors will be employees of the Department of Corrections rather than having an independent status. We also note with concern that there is no compulsory provision to require 24-hour, seven-days-a-week monitoring.

We do not believe that a good explanation has been given for why there is a need for private management of prisons. In relation to costs and efficiency, there is no evidence to suggest that the privatisation of prisons would be more cost-effective and efficient than the current Department of Corrections model. The committee received advice from the department that comparing the per-prisoner cost at the privately-managed Auckland Central Remand Prison (ACRP) with the per-prisoner cost for remand prisoners held in public prisons at the same time; and then the per-prisoner costs at ACRP the next year when it was managed by the department. In both cases, the privately-managed ACRP was more expensive per-prisoner than the public sector comparisons:²

Nor have we seen any evidence that private management of prisons would bring new, innovative ideas to our corrections system. Public prisons already exhibit a huge amount of innovative ideas. They are only limited by resources and will.

The bill, as drafted, requires contracted prisons to have “sufficient suitable staff members”. During consideration the committee considered a language change to be specific on this requirement by writing “including the minimum number of staff members, or the minimum ratio of staff members to prisoners, that the contractor must maintain.” By majority, the committee has adopted the original wording in the belief that the word “sufficient” in conjunction with the obligations of the contract provided for in clause 5, section 199(1)(a) places a sufficient obligation on the chief executive in letting a contract. Labour members were unconvinced and were firmly of the view that the legislation should be specific in its requirements setting out its expectations that the chief executive should set clear minimum staff numbers and a clear minimum ratio of staff to prisoners in any contract to ensure, among other things, staff safety and prisoner security.

Finally, Labour members have serious concerns about the Government members using their majority on this committee to block our access to Ministry of Justice officials. The Ministry of Justice had input into the departmental report and we believe that the committee would have benefited from hearing the views and insight of the Ministry. We question the motive for not allowing the committee access to these officials, and we are disappointed that this opportunity has been denied when we are considering such a significant shift in our justice system.

More importantly, there are constitutional issues on this. The Government members, using their majority vote, have blocked opposition members from making legitimate inquiries of a Government ministry that has specialist knowledge of the matters being considered. Just as members have rights to free speech, we believe members must have rights, as select committee Members, of access to officials and information.

The Green Party is opposed to this legislation because it is contrary to good penal public policy by risking significant abuses of human rights, and imposing greater costs on the public than public provision, and will not alleviate the filters that have lead to a disproportionately high rate of Māori imprisonment.

Prison operates as the harshest possible penalty for crimes against the community. It is, as the Howard League for Penal reform described, among the most explicitly coercive instruments of the State. Such instruments should be used exclusively by the State, accountable to the public.

Prison officers exercise an extraordinary power over the lives of inmates. They are also in a very intense and often dangerous working environment. It is critical that both the officers and the prisoners are subject to the highest quality of oversight and management in order to prevent violence against staff and abuse of prisoners. The select committee heard submissions from staff that reinforced the necessity for the greatest levels of transparency and caution in managing such an intensive environment in a privately-managed prison—for example, claims of 80 percent higher prisoner-to-prisoner violence and 60 percent higher levels of prisoner-to-staff violence.

The Green Party is extremely concerned by reports from human rights organisations who have shown that privately-run prisons and detention centres in the US, UK, and Australia have been the subject of legal action for human rights abuses and staff harassment. There are reports of higher levels of violence in such prisons and in some cases deliberate attempts to mislead Government officials to avoid scrutiny and legal action. In the US two judges were convicted of corruption for unjustifiably jailing up to 5,000 young people for kickbacks from the builders and owners of the private prisons.

It would be very difficult for such an extreme case to occur in Aotearoa; however, the Green Party believes that this bill and the contractual arrangements between the department and the private managers provides insufficient protection against any such corrupt influence. Penal policy is too important to leave any room for such influences.

It is the Green Party’s view that this responsibility is of such importance to the safety of our communities and the principle of good governance that it can only rest with the State as the State agencies are only accountable to the public, through the machinery of Government.

Privately-run prisons, by contrast, are accountable to the Department of Corrections through a contract to manage services, but their primary responsibility is to the owners of the business. We heard from staff who had worked in privately-run prisons how conditions and contractual obligations had been massaged to reduce costs and avoid financial penalties imposed through the contract. These issues do not arise in the public provision of prisons, and where issues are raised, they are quickly the subject of public scrutiny through the process of Government.

Private prisons will not be subject to the same level of scrutiny by the public. Much of the financial information about the running of a private prison will be subject to confidentiality clauses in the contracts. This means that the public are unable to identify issues of importance to them before the contract is signed off.

Therefore the public will not access all the relevant information they need to hold the managers of these prisons to account as can be done currently.

Contrary to the views of some, privately-run prisons are not cheaper than public provision. We were told by officials that the cost of the private Auckland Central Remand Prison was $57,280 whereas the cost of public remand prisons was $52,280, inclusive of property overheads. There is no justification then for the claim that privately-run prisons are cheaper than public prisons. We were also told by submitters who had worked in private prisons that money was saved through the use of improperly trained casual staff, the moving of prisoners at risk in order to reduce staffing costs, and the constraining of career structures in order to reduce wages and conditions. The policy of providing for privately-run prisons has no economic benefit to the public and indeed may decrease the conditions and safety of staff and inmates.

This bill does not in any way provide for the involvement of iwi and hapū in the management of prisons or in the delivery of tikanga programs. The disproportionately high rate of Māori imprisonment is a disgrace and this does not address the causes nor prevent the high rate of recidivism. In the end such a policy lacuna leaves our communities less safe. The Green Party believes that the free market solution inherent in this bill simply provides a perverse incentive to encourage repeat customers. While that may not be the intent of the private managers or of the Government, this perverse incentive nonetheless exists and there is no policy solution to it. It is the Green Party’s fear that such a perverse incentive will simply exacerbate the existing filters in the legal system that already lead to a disproportionate Māori imprisonment rate. Māori communities need support not further perversities that may lead to an increase in the imprisonment of rangatahi.

Aotearoa/New Zealand has one of the highest rates of imprisonment per capita in the world, and it is growing fast. Despite spending millions of dollars each year locking up offenders, we also have a high rate of recidivism, showing a strong correlation between rates of imprisonment and re-offending. If we are to create a genuinely safer society, prisons need to focus more on rehabilitation and re-integration of inmates into society. We need to provide additional support, including opportunities in education, meaningful work, and community participation, and to help people to avoid a life of crime. This bill moves Aotearoa a significant step further away from this goal, by handing to the private sector a core public function upon which rests, in the most real way possible, the lives and safety of the community.