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EXCLUSIVE: Questions over Serco’s “independent” monitors and it’s Contract with the Crown

By   /  July 30, 2015  /  19 Comments

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There are six questions that beg to be answered by the various inquiries currently under way;

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Questions have arisen regarding the  supposed “safe-guards” Monitors at Mt Eden Prison, and at least one aspect of the Serco-Corrections Dept Contract.

According to section 21.2 of the contract between Corrections and Serco, between two to three Monitors were tasked with;

(a) compliance with this agreement;

(b) the accuracy of the Contractor’s invoices or reports relating to the Services;

(c) processes and procedures of the Contractor or any subcontractor relevant to the provision of the Services;

(d) anything else relating to the Services.

Also according to the contract, the monitors were ostensibly appointed by Corrections, though whether they are paid by Corrections or Serco depended on “… if the Service Audit reveals that the Contractor has breached this agreement” (p21.3), in which case “then the Contractor must pay the Crown’s costs in relation to the Service Audit“.

However, on 2 May, TV3’s ‘The Nation’ interview between Lisa Owen and Corrections Minister Sam Lotu-Iiga had this interesting exchange;

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Corrections Minister Peseta Sam Lotu-Iiga on The Nation

Corrections Minister Peseta Sam Lotu-Iiga on TV3’s ‘The Nation‘, 2 May 2015

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Owen: Okay, well, who’s monitoring their performance? Who makes sure that they reach their targets and that they’re assessing themselves fairly?

Lotu-Iiga: Okay, they are actually more scrutinised than any public prison. They’ve got two monitors— there will be two prison monitors in each of the prisons.

Owen: Who employs those monitors? Who employs the monitor in the prison?

Lotu-Iiga: There will be— If I can just finish, there will be an ombudsman. They will be subject to complaints—

Owen: So the monitor in the prison, Minister, just to be clear, the monitor in the prison; who employs the monitor?

Lotu-Iiga: My understand is that the monitors are based in the prisons, but they report to the Department of Corrections.

Owen: Who employs the monitor and pays their wages, Minister?

Lotu-Iiga: Well, I don’t have those facts on me, but they do report—

Owen: Well, I do. The person who employs the monitor— the person who employs the monitor is the company, Serco. They employ the monitor, and pay their wages.

Lotu-Iiga: Okay, can I just finish—

Owen: So how is that an independent analysis?

Lotu-Iiga: Well, they’re reporting to the Department of Corrections. We have the ombudsman as well. We have the chief inspectorate, if I can say, the chief inspectorate is based in the Department of Corrections. They will be also subject to the scrutiny and the questioning and the examination through the chief inspectorate. That is no different, can I say, to any other prison.

Owen: But you’ve just told me that they’re going to have a higher level of assessment monitoring—

Lotu-Iiga: Well, they do.

Owen: —by saying that they’ve got this person in the prison. But they’re actually employed by the people who run the prison.

Lotu-Iiga: They’re employed by Serco, but they are reporting back to, as I’ve just said, someone in the Department of Corrections. So they’ve got not only two monitors, they’ve got the ombudsman, they’ve got the chief inspectorate and also the office of the Auditor General. That’s no different to any other prison in this country.

Whoever employs (employed?) the Monitors at Mt Eden, they do not appear to have forwarded Incident Reports of violence and other criminal activity taking place at the facility. The prompt forwarding of Incident Reports is also a prime feature of the contract between Serco and Corrections;

22.2 Incident reporting requirements:
If an Incident occurs, the Contractor must report the Incident in accordance with the requirements set out in Schedule 5.

[…]

Schedule 5
Appendix 1
Timecode1

Immediate notification to “Incident Line” (04) 473 1745 anytime day or night, followed by IOMS incident report (or in the event of IOMS being unavailable an E.08.01.F1 Notification of  incident form (which is contained in the Department PPM)) within 2 hours of the incident being advised.

The prevalence of violence (including “dropping”); injuries; at least one death; drug use; home-brew production*; contraband such as cell-phones; and now three prisoners arrested for involvement in gang-related drug activities – does not seem to have impacted on Mt Eden’s high ranking on Corrections’ Prison Performance Table – the most recent being for twelve months ending March this year;

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Mt Eden prison - prison performance table - corrections department - serco

(Hat-tip: Martyn Bradbury, for above chart)

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Since April 2014, Mt Eden has rated “Exceptional” in previous performance grades. It’s rehabilitation rates at 96.75% – which in itself is odd, as Mt Eden is also a Remand Prison, and 676 out of 952 prisoners (as at 31 December 2014) are on remand; awaiting trial;  and have not been convicted of any crime.

It is fairly obvious that as more and more stories of violence and other criminal activity emerge, Serco’s statistics cannot be taken at face value.  As the Herald’s David Fisher reported on 27 July;

Serco had previously been rated at the highest levels of safety despite the allegations of violence inside Mt Eden prison. It was contracted to carry out its own performance management reviews – and was also responsible for telling the Department of Corrections when its pay should be docked.

One means by which assault figures could be ‘fudged’ by Serco was illustrated by Fisher in the same report;

Over the past week, cases have emerged of prisoners being transported from the Serco prison to other institutions arriving with serious injuries.

The Weekend Herald reported a case in March this year in which a prisoner sent to Manawatu prison was found to be needing urgent hospital care when he arrived.

There are  six questions that beg to be answered by the various inquiries currently under way;

1.

Why did the Monitors at Mt Eden not report incidences of violence – including one death – as well as other criminal activity? Monitors were tasked with reporting untoward events such as assaults to the Corrections Department. Why was this not done so?

2.

Considering the assaults, drug taking, and other other instances of illegal activity taking place at Mt Eden, how could that facility gain a high “Exceptional” rating on the Prison Performance Table? Do Corrections Dept officials, and the Corrections Minister have faith in the accuracy of Prison Performance data? And why did the Monitors not challenge those high rankings?

3.

Why did the Monitors not report that injured prisoners were being transferred out from Mt Eden to other correctional facilities? Why did they not advise the Chief Executive of Corrections (Ray Smith) that by transferring out injured prisoners, that this would inevitably result in favourable statistics for Mt Eden.

4.

Who were the Monitors directly responsible to; Serco or Corrections?

5.

Was there a deliberate, organised policy of silence, between Serco, Corrections Dept, and Minister Sam Lotu-Iiga’s office, to suppress reports of violence and other criminal activity at Mt Eden, because otherwise disclosure of the truth would damage the credibility of this government to pursue it’s agenda for further privatisation of services?

6.

There is provision in the contract between Serco and Corrections for a good faith relationship between the parties;

SCHEDULE 1
WORKING TOGETHER

2.1
In recognising the significance of the relationship between the Crown and the Contractor from an operational and contractual perspective, the parties agree to work cooperatively and collaboratively.

The parties will:

(a) ensure that their communications are open and honest;
(b) proactively raise, and respond to, issues with a view to prompt and efficient resolution;
(c) take a constructive and open minded approach to points of difference; and
(d) treat each other with respect at all times.

The degree to which Serco has with-held information from it’s partner – the Crown – should be seen by many as being far from “open and honest“; has failed to “proactively raise, and respond to, issues“; and certainly not treated the Crown “with respect at all times”.

So why is Schedule 1 not grounds to break the contract with Serco?

Not only has Serco apparently circumvented the spirit, as well as the intent, on their contract with Corrections, but it has apparently connived to suppress information, as Kim Vinnell reported for TV3 on 24 July;

There are fresh revelations private prison operator Serco went out of its way to make sure its squeaky clean record stayed that way.

In Mt Eden prison where inmates are king, are guards who say they’re understaffed and afraid.

“It’s about time we all spoke out and say what it’s actually like,” says one guard, who spoke to 3 News on the condition of anonymity.

He says when prisoners or guards break the rules, management would rather official reports tell a different story.

“You’re told to state the facts, but to leave all other things out of it.

“They go missing off the system several times, or they get edited and you’re not told that they’re edited.”

The Government says it didn’t know what was going on, despite the fact three prison monitors – who are Corrections employees – have been there since Serco’s first day.

Under the Corrections Act, prison monitors must report to the chief executive at least every four months. The sole purpose of their job is to report on prison management and any concerns they may have about the prison’s running.

The government claims “it didn’t know what was going on“.

In which case, not only was the Correction Minister’s office kept in the dark – but also the entire Corrections Department. Is this feasible?

It is inconceivable that National Ministers did not know the depth of problems afflicting Mt Eden and Serco.

In which case, this government was actively complicit in a cover-up, to protect it’s credibility with voters – and to  safeguard it’s privatisation agenda.

This scandal may yet engulf the government and bring it down, forcing an early election.

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* Note: Home-brew involves fermentation to produce alcohol. The process creates carbon dioxide and strong odours. How is it that staff at Mt Eden could not smell fermentation processes within the facility?

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Addendum1

Email to Corrections Minister, Peseta Sam Lotu-Iiga, on 28 July;

Kia ora Minister  Lotu-Iiga,

I am querying the appointment on Monitors for Mt Eden Prison, which up till yesterday (27 July), was managed by Serco.

Can you please advise  regarding the following;

1. Who employs the Monitors? Is it Serco or the Corrections Department?

2. Who do they report to; Serco or the Corrections Department?

3. Who pays their salaries; Serco or the Corrections Department?

4. Are the Monitors responsible for providing information to Corrections, which forms the Prison Performance Table? If not, who provides that information?

5. Are the Monitors still employed at Mt Eden? If not, why not?

6. Have the monitors made any Incident Reports to Corrections, as required Prison under the Management Contract for Mt Eden Corrections Facility (para 22.2). If so, what Incidents were reported and when?

Please respond asap to this OIA request, as this is a matter of some urgency.

A response from  Minister  Lotu-Iiga’s Private Secretary acknowledged  my email on the 29th, advising;

As the information you have requested is held by the Department of Corrections, I have transferred your request to the Department. This decision is in accordance with section 14 of the Official Information Act 1982.

The Department is required to provide you with a response within 20 working days of receipt of my transfer letter.

It is likely that Corrections Dept will use a provision within the Official Information Act to request an extension to the 20 Working Day time-limit.

Addendum2

Schedule 11 (Information Requests) of the Serco-Corrections Dept Contract, stipulates;

Official Information Act (OIA) requests

These can often be requested by journalists wishing to probe deeper into issues they believe the public may be interested in. Requests under the OIA are managed within the statutory timeframes described in the legislation – this is generally 20 Working Days for a response.

OIA requests, by law, must be facilitated as soon as possible. The “20 Working Days” option is a maximum – not a target response time to work to.

Part 2, Section 15 of the Act clearly and explicitly states that responses to OIA requests “shall, as soon as reasonably practicable, and in any case not later than 20 working days after the day on which the request is received” be “given or posted to the person who made the request notice of the decision on the request“.

It is unclear how the Serco-Corrections Dept Contract complies with requirements contained within the Official Information Act to provide responses “ as soon as reasonably practicable“.

Addendum3

Considering that the Schedule 11 (Information Requests) of the Serco-Corrections Dept Contract, appears to contravene the spirit, intent,  and letter of the Official Information Act (Part 2, Section 15), I wrote to the Office of the Ombudsman to seek their advice;

Kia ora,

I understand that your Office has been looking into a possible actions by various government Ministers to willfully and deliberately delay replying to OIA requests. Part 2, Section 15 of the Official Information Act states that responses to OIA requests;

“…shall, as soon as reasonably practicable, and in any case not later than 20 working days after the day on which the request is received” be “given or posted to the person who made the request notice of the decision on the request“.

I have recently been looking into the Prison Management Contract for Mt Eden Corrections Facility   that applies between the Corrections Dept (acting on behalf of The Crown) and a private company, Serco.

Schedule 11 (Information Requests) of the Serco-Corrections Dept Contract, stipulates;

Official Information Act (OIA) requests

These can often be requested by journalists wishing to probe deeper into issues they believe the public may be interested in. Requests under the OIA are managed within the statutory timeframes described in the legislation – this is generally 20 Working Days for a response.

It is my contention that the Contract’s reference to “Requests under the OIA are managed within the statutory timeframes described in the legislation – this is generally 20 Working Days for a responseis counter  to the spirit, intent, and letter of the Official Information Act.
The Act clearly states that OIA requests should be actioned “as soon as reasonably practicable” and that “20 working days” is a maximum time limit, not a target time-frame to work toward.
In your view, is the Contract accurately reflecting the Official Information  Act?
If not, how does that impact on the legality of the Contract itself?
I would welcome your advice on this matter.
This blogger will keep readers advised on further developments.

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References

Corrections Dept: Prison Management Contract for Mt Eden Corrections Facility

Scoop  media:  The Nation – Corrections Minister Sam Lotu-Iiga

NZ Herald: Head Hunters raids – Police investigating former Mt Eden prison guard

Corrections Dept: Prison Performance Table

NZ Herald: Serco docked $565k over violence in prisons

Corrections Dept:  Prison facts and statistics – December 2014

TV3: Mt Eden prison guards ‘understaffed, afraid’

Legislation.govt.nz: Official Information Act 1982

Previous related blogposts

The closure of three prisons and loss of 262 jobs – five issues for the National govt

“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga

Letter to the editor – If Serco was the answer, what was the question?

On private prisons

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corrections - serco - private prisons

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19 Comments

  1. XRAY says:

    Based on what you’ve detailed here it’s hard to say where the line is between Serco wilfully supressing incident information and a government going along with the illusion knowingly or by design, blindly, ends. Of course to hide its flawed ideology results from the public. But there is a line and to me both are up to their eyeballs in the fraud that said this jails performance was exceptional.

    And what makes me think this even more and it is quite apparent in that interview is Lotu Iiga’s hamfisted attempts to mislead Owens.

    Having worked in a privatly run public service of quite a different nature I can vouch for the reality that corners will be cut and “things” swept under the rug to meet performance expectations and bonus targets. So none of this privatised public service behaviour surprise me!

    Sadly I have no faith that this will ever show Nationals involvement and or their pure ineptitude in any so called “inquiry”!

    • elle says:

      National government never knows anything about problems under their watch,but knows everything about ruining the country.
      Where is the Governor General,what use is he apart from cutting ribbons etc.
      He appears to be a holeogram of little use.
      This government is clearly a criminal enterprise who believe if they deny knowledge they are in the clear.

      They are responsible for Serco, they sold the prisons.This government is allowing NZ prisoners to be treated badly and allowing gangs to rule,maybe to save money on staff.
      More and more prisoners are being incarcerated,but that’s the nature of privitisation, make as much profit as possible by any means possible.Some staff are afraid to work in Serco prisons, the job of employers is to keep staff safe as is reasonably possible,with some less than decent guards colluding with gangs to make prisoners lives a misery Serco must be put out of prison contracts.
      Of course Key dosnt want his privatisation system to be scrutinised,hes not interested in law and order but his own agenda.
      For these faults Key and his government are well outside the law and must be brought to account,but by who?Key owns all law and order outfits.
      We may as well be living in Zimbabwe,the leader there is grim ,but never gets USA deciding its not “democracy” and trying to remove a bad president and taking over the country because they own Mcabe and he is compliant with USA ideology.
      Same can be said of Key, do as he likes because hes obeying USA law,
      we are in princible owned by USA and corporates.
      Who has the answer ?

      • mary_a says:

        Good post ELLE – Absolutely agree with your comments here.

        Re the governor general.

        FJK pulled Jerry Matepere from state security Chief, after only holding the job for a very short time and put him into the vice regal position, possibly to have someone in that role who will be malleable and compliant to NatzKEY’s deceitful and corrupt influence.

        In other words, someone to conveniently turn a blind eye to the corruption and criminal activities, strong in FJK’s sordid little game of cesspit politics, making the GG part of the rotten play!

        Hence very likely the reason NatzKEY is still in business and the likes of Serco is still managing Mt Eden corrections facility.

        Another GG worth their sort, would have sacked NatzKEY, ordering the opposition to form a government, opening the way for FJK, English, Joyce, Brownlee,Collins et al to have been charged with crimes against the people, which would not be too difficult to prove!

    • Kingi says:

      Yup. They are more slippery than a bucketful of eels.

  2. Lara says:

    Frank, I’m so impressed with your journalism and tenacity.

    Thank you so very much for keeping at it, trying to hold those in power to account.

    As you say, a large number of people in Mt Eden prison are on remand. A core concept of our democracy should still be “innocent until proven guilty”. For an innocent man to be dumped into that hell hole, run by gangs, should chill every single person living in New Zealand.

    And NZ needs to move away from this nasty desire for revenge. We need more humanity, to try and rehabilitate prisoners, so that when they’re let out to live amongst us we are all safer. And just because for Gods sake, it’s the right thing to do!

  3. Kingi says:

    Well done Frank again for another clear and insightful analysis. Keep shaking the tree! I can’t wait to see what falls out….. (shouts loudly….Yoohoo, mainstream media! Look! Over here! A journalist!!!!)

  4. Pete says:

    serco

    serCORRUPTION

  5. wanafli says:

    Frank, great article.
    Re: “This scandal may yet engulf the government and bring it down, forcing an early election,” we can only hope.

    Sometimes I feel that the only way to rid ourselves of this travesty of a government, is to stage a revolution. But then, would the average Kiwi sheeple get off their arses to do anything?

    Keep up the good work.

  6. phillip ure says:

    brian rudman has also done a decent piece – noting that our real prison problem/’scandal’..

    ..is the ‘penal populism’ practised by politicians of most stripes..that has led to our gobsmackingly high rates of incarceration..

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11488264

  7. Helena says:

    Another firecracker up the proverbial.
    Good one, Frank!

  8. Maama says:

    Another excellent evaluation Frank.

    Has anyone thought to compare the current Serco statistics under Lotu-Iiga’s watch with the previous Serco reports under the Collins and Tolley terms of ministerial supervision?

    I am wondering just how long this debacle has been going on.

  9. J S Bark J S Bark says:

    Good research there Frank. I’m almost tempted to say “as usual” but that sounds a bit like minimizing what you’ve done. Good research.

    And yes, it definitely has the punch and sting to bring down a government but I have to say I am very very cynical in my dotage.

    It would have once brought down a government but we no longer have honourable statesmen.

    This is more like trying to bring down Al Capone than Harold Macmillan…

    But I DO wish, I DO wish…

  10. kiwiburger says:

    Maybe 7 questions Frank- who owns serco and what relationship do they have with kee

  11. Sam W says:

    Were Corrections and the Minister’s office in the loop over Serco fudging the stats? You bet they were.

    If the enquiries are honest and probing, they’ll uncover what went on. But I doubt it’ll happen. Too many vested interests. Also this government would fall if the truth came out.

    I don’t think people understand that this is NZ’s “Watergate” moment.

  12. Nick says:

    Yes, interesting.
    I would like to know, based on your info, why Serco was even allowed to pay and therefore control the monitors. It appears the Govt was supposed to. The money source creates an untenable conflict of interests.

    Secondly the very slightest attention would immediately have raised massive questions when a remand prison declared over 96% rehabilitation. Who came up with that figure and who was it reported to? 10% better results than even the best facility who were actually trying to rehabilitate, rather than, as a remand prison, just to hold prisoners awaiting placement or trial. It is such a brilliant result that one suspects that North Korea would have blushed to declare it even if they had the Dear Leader running their correctional facility.

    It sounds like the instructions to Corrections to look the other way came from the very top and began at the very beginning. No professional public servant would have taken such an irresponsible course without express instruction from his political masters. This implies that the outcomes of the private prison experiment were preconceived (with an ill-fitting, cookie-cutter ovation for their splendid rehabilitation results already planted in the system). Remember, this was the clinching argument used by the government to justify bringing the private sector into the prison service.

    Although they will initially try to ride it out, it looks likely that Lotu-Iiga will eventually be instructed to fall on his sword to protect the cadre, although he is probably the least responsible. This kind of arrogant make-it-happen suggests either Judith Collins or Steven Joyce is the likely early architect. My money is on Joyce.

    How far will they go to protect themselves as this fiasco unravels?

    • Blake says:

      Steven Joyce is like the U.S. version of Dick Cheney. Evil behind the curtain with much more power and authority than most are aware of. I feel he calls more shots and has much more dominating control over our PM than we know. He is another “corporation in disguise of a man” and is such a slick talker and grossly rude and elitist.

      I have never heard or witnessed a more condescending and arrogant politician than Joyce and I trust him about as much as I trust the fox to watch the hen house.

  13. Blake says:

    Thanks ! ! again Frank for another brilliantly organized and well thought out piece of journalism. I really appreciate your efforts ! !

    Privatization has been proven to be a disaster in most countries and now we are diving more into the cesspool of greedy corporations taking control for profit with their huge lack of ethics. Our PM needs to go before he sinks our ship completely. We deserve so much better. Send these crooks and banksters to court and / or ===>>> out to pasture.

    Again, our P.M. is a —- ” corporation in disguise of a man “.

  14. […] and misguided investment. To add another level of ridiculousness to the overall negligence, Serco is empowered to carry out its own performance reviews and charged (and trusted) to report to Corrections when they have failed to achieve the defined […]

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