Instutute for Security Studies on Prison Privatisation: briefing

CORRECTIONAL SERVICES PORTFOLIO COMMITTEE
12 March 2002
INSTITUTE FOR SECURITY STUDIES ON PRISON PRIVATISATION: BRIEFING

Chairperson: Mr N B Fihla

Documents Handed out:
Presentation summary of "Prison Privatisation in South Africa: Issues, Challenges and Opportunities" (Appendix)
Prison Privatisation in South Africa - Monograph by K C Goyer

SUMMARY
Institute for Security Studies presented research findings on prison privatization and highlighted the advantages and disadvantages between private and public prisons.

MINUTES
Ms K C Goyer and Ms P Gawushe from the Institute for Security Studies briefed the Committee.

Ms Goyer defined a private prison  which she explained as an arrangement whereby the state contracts with the private sector to provide correctional services. There were four levels of prison privatisation. The first one was contracting ancillary services such as laundry, maintenance and catering. The second one was management of prisons by private companies. The third one was the design and construction of prisons by private companies. The final level of privatisation was private financing whereby the private lenders own prison buildings and were rented out to the state.

She highlighted the debate on the choice between private and public prisons. The merits for privatisation were that it was efficient and expanded markets for entrepreneurs. Those who were against private prisons were unions opposed to job losses. Abolitionists were against prisons in general as they contended that prisons did not solve crime and there was no need to build them anyway.

The last part of her presentation was on twelve key issues regarding privatisation of prisons.
The first one was on propriety where one perspective argued that only the goyernment had the legitimacy to imprison a person. The other perspective argued that " it was one thing to believe that only the state had the right to imprison someone. It was another matter entirely to believe that only the state could run a prison in fair, humane, effective, and economical fashion.�

The second issue was on cost. Ms Goyer said that it was difficult to determine the cost of incarceration and that the goyernment formula of dividing the budget per prisoner was statistically unsound.

The third issue was on provision of quality service in prisons. She said that it was difficult to determine quality as it sometimes came to conflict with  costs.

The fourth issue was quantity of prisons. She said that often the demand for prisons  influenced private prison companies, politicians and unions rather than by public interests.

The fifth issue was flexibility. Goyernment tended to avoid risks whereas private sector was innovative. Moreover, private contracts could be terminated but goyernment agency was impossible to discard.

The sixth issue was on prison security. Private use of deadly force caused security risks. Strikes and bankruptcy affected private sector, not the goyernment.

The seventh key issue was that the goyernment was free from liability against the law but that it should act as a monitoring mechanism.
The eighth issue was private companies could be less accountable to the goyernment under the pretext of 'commercial confidentiality'. To counteract this perspective, others believe that private companies were more accountable because they had answer to stockholders and were cautious of bad publicity.

The ninth issue was that corruption was prevalent in both public and private prisons.

The tenth key issue was dependence. The argument was that as the private sector continued to provide correctional service the state would be dependent on them and this would reduce goyernment leverage in negotiating contracts.

The eleventh key issue was financing of private prisons. The issue was that if the private sector financed and automatically owned prisons it would create problems when contract are terminated because the goyernment would not be able to pay the loans and the facility would become property of banks. Consequently prisoners had to be sent elsewhere.

The final issue was on monitoring contracts. The problem was that monitoring was internal and this created problems of covering up and being sympathetic. Moreover the Department itself did not have regulatory capacity.

Ms Goyer concluded the presentation by suggesting that the best option was to pursue prison alternatives and criminal justice reform with the private sector and NGO's.  She pointed out that the debate between private and public prison was irrelevant and circular.

Discussion
The Chairperson commented that he thought the presentation would focus on the merits of prison privatisation rather than on the advantages and disadvantages of  both private and public prisons. He also said that after the presentation he was not sure if the review of private prison should be done at shorter intervals or continue with longer intervals of twenty five years.

Mr Mzizi (IFP) asked how it could be that private prisons were not accountable.

Ms Goyer replied that prisons in South Africa were not transparent and open and that they needed to be open.

Mr Mzizi commented that state could not provide efficient and human standards in prison because of bureaucratic constraints and he contended that it was not true that private prisons insulate goyernment from lawsuit.

Ms Goyer agreed and said that often the goyernment was the co-defender in a lawsuit against private prisons. On the question of efficiency and humane conditions she pointed out that the Constitution protected prisoners to live in humane conditions.

Mr Mzizi asked if bringing NGO's was not going to cause more bureaucratic problems.

Ms Goyer said that evidence from elsewhere showed that it worked.

One member asked Ms Goyer's view on private prisons.

Ms Goyer said the issue for her was not public versus private prisons, but that prison was an outdated penal system. However, she said that in the context of South Africa, private prisons were better in terms of efficiency and humane conditions than public prisons.

The same member asked what could be done with the crime rate if the prison was an outdated penal mode.

Ms Goyer argued that prisons alone could never decrease crime rates. Rather, the entire complex of law and order needed to be reviewed and that there were other socio-economic factors contributing to crime. Incarceration was becoming extremely expensive and that there was need for alternative options.

One member asked if prison transparency would not compromise prison security. Ms Goyer explained that by transparency and openness she meant that researchers should have access to prisons. She added that it took eight months for her to be permitted to undertake her first research in a South African prison as compared to three day in the United Kingdom.

Mr Mzizi asked how possible it was to rehabilitate a "hardened criminal".

 Ms Goyer said that it was a difficult to give an answer for South Africa because there was little research on that area. She said that much progress had been done in developed countries but that the context for rehabilitation was different and therefore not wise to import rehabilitation strategies.

One member asked what was the basic cause of crime.

Ms Goyer said that question still baffled sociologists and criminologists.

One member asked about the incarceration rate in South Africa.

Ms Goyer said that it was six per capita and probably the highest in Africa. She added that the United States of America had the highest rate in history and that private prisons were a booming industry.

One member asked if there was any difference in costs between the private and public prisons.

Ms Goyer said that she had no idea.

Another member asked if it would be cheaper for goyernment to use mine dumps to build new prisons.

Ms Goyer said the issue was not economies of scale but rather effective, efficient and small prisons.

The Chairperson asked Ms Goyer how the prison  population could be reduced.

Ms Goyer said  that prisons should not be the first option and that many prisoners should not be awaiting trial.

Mr Mzizi asked if the goyernment was not providing too much provision for prisoners as compared to South America where relatives provide basic needs for prisoners.

Ms Goyer did not think that South Africa should follow that route and she added that the prison system in South America was one of the worst in the world.

One member asked if Ms Goyer had undertaken a study on restorative justice. Ms Goyer said that she had not undertaken such a study but was impressed by South Africa's system as it was indigenous and not using isolation.

One member of the Institute for Security Studies said that such a study was in progress and would be completed soon.

The meeting was adjourned.

Appendix

Prison Privatisation in South Africa:
Issues, Challenges and Opportunities

A Presentation by KC Goyer
for the Institute for Security Studies (ISS) to the
Parliamentary Portfolio Committee on Correctional Services

Definition
The state contracts with the private sector to provide correctional services.  There is no such thing as a fully privatised prison. 

There are four levels of privatisation
            Ancillary Services: maintenance, laundry, etc
            Management:  security, personnel, rehabilitation
            Design & Construction:  building contractors, architects
            Finance: private lender owns building, rented to the state

A 'private prison' usually refers to one which has a DCFM contract: Design, Construct, Finance, and Manage.

The Debate
FOR Private Prisons
Gov't - looks to the private sector to provide a service more efficiently and effectively than it can provide on its own.

Private Sector - interested in securing government contracts in an expanding 'growth' market; profits to be made

AGAINST Private Prisons
Unions - in general, opposed to prison privatisation because of the attendant loss of public sector jobs.  This depletes the power of public employee unions, and reduces their revenue through loss of membership dues.  In Australia and the United States, correctional services employee's unions have opposed  various prison reforms, including alternatives to incarceration and community corrections initiatives, because their interest is in job security and higher wages and job security, NOT the rehabilitation of offenders.

            Prison Abolitionists - those who point out that prisons do not work, thus, why build more?  This group is opposed to prison construction and mass incarceration, whether public or private, because it is an outdated and ineffective option.  Specifically in the case of private prisons, the concern is that profit seeking by private firms will make the abolition of this institution all the more difficult.  Privatisation further entrenches the 'Prison Industrial Complex' although it has not invented it.

12 Key Issues
Propriety
Cost
Quality
Quantity
Flexibility
Security
Liability
Accountability
Corruption
Dependence
Finance
Monitoring

Propriety
philosophical objections to privatisation of correctional services
provision of order is the fundamental duty of the state
“It is not government's obligation to provide services, but to see that they are provided�  (Mario Cuomo, as gov. of NY)
“It is one thing to believe that only the state has the right to imprison someone.  It is another matter entirely to believe that only the state can run a prison in a fair, humane, effective, and economical fashion.� (Logan, C.)
Discipline
Use of deadly force
Parole hearings
Marketing tactics, impact on criminal justice policy

Cost
Cost comparisons are extremely difficult: size, location, type
Cost capture is difficult: public sector uses budgets, do not account for all costs.
Variable vs Fixed: public sector appears to save money through overcrowding, private sector contractually prohibited
Impossible to compare in South Africa because the standard of service is entirely unmatched in the public sector

Quality
pvt prisons will cut costs in order to improve bottom line, but will this result in less quality or better value
difficult to determine performance standards of prisons
performance objectives relate to security, reduced 'incidents'
hours spent in job training or education, not the success rate
 “The era of the development of private prisons has coincided with the decline of the 'rehabilitation ideal' within prisons�

Quantity
demand for prison affected by desire of private prison companies to expand markets, not by public interest
demand already affected by politicians, unions

Flexibility
private sector more likely to innovate, bring in new technology
gov't more likely to be cautious, avoid risks, spend budget
private prison company can be fired; contract terminated
government agency is all but impossible to discard
terms of contract can eliminate this benefit

Security
cost cutting leads to understaffing and breaches in security
strike, bankruptcy affects private sector, not the government
propriety over the use of deadly force causes security risks

Liability
private prison company insulates government against law suits
or, attracts additional suits because of substandard quality
or, acts as monitoring mechanism because a private company can be litigated out of business while a government cannot
Accountability
private prison companies less accountable to the state; can hide behind 'commercial confidentiality'
private prison companies more accountable, must answer to stockholders; restricted by financial impact of bad publicity.

Corruption
large gov't contracts are prone to bribes, kickbacks
has more to do with procurement process in any government

Dependence
if private sector excels at providing correctional services, the state will no longer be able provide services itself
dependence on private sector for a fundamental role of government will reduce leverage in negotiating contracts

Finance
structure of finance contracts determines the amount of leverage, monitoring control of the state
private consortium of banks, construction firm, design firm, and management company.
Short term contract with mgmt company; long term lease w/ consortium
Gov't guarantees cash flow, thus bank lends at reduced rate
Interest income from government loan is tax free for bank
Terminating contract w/ mgmt company could backfire as bank calls in loan.  Gov't can't pay, entire facility becomes property of the bank and gov't must send prisoners elsewhere
Monitoring
risk of 'capture' as the contract monitors are correctional services officers/managers themselves; may sympathize
DCS is not a regulatory agency; has no experience in monitoring, independent reviews, etc
Private prisons part of the same department as the monitors; a mistake or incident at a private prison reflects on the department, thus incentive to cover up and avoid bad press

Conclusion
If you are going to stick with prison, then be prepared to pay for it.  Public or private, prisons are expensive.  Think of them as a top-class boarding school, for they must have similar facilities plus the added cost of security as well.  In fact, prisons are the boarding schools of the underclass, where no investment in human capital has been made (such as providing top-class education for the elites), the state will eventually be provided to make up for it (in the form of expensive incarceration)
You can build prisons or schools, but if you invest properly in the latter you will need much fewer of the former.
Other alternative is to stick with warehousing people in subhuman conditions, which is in violation of constitutional rights, in addition to perpetuating the crime problem.
Best option: pursue prison alternatives and criminal justice reform in partnership with the private sector, both for-profit entities and not-for-profit organisations.

Contracts for food services could go to the private sector;
Funding for rehabilitation may be better served by NGOs;
Provision of health services best provided by DOH, not DCS;