Who runs Australia’s gulag archipelago?

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From Crikey today, for your edification and action if you believe in ethical investment, here are some profiles in brief of the managers of Australia’s gulag archipelago.

G4s:

The London-based security giant had a $244.5 million contract from the Australian government to run the Manus Island camp (“operational and maintenance services”). It lost the contract a few months ago and will formally handover to Transfield in early March. G4S was in charge of the camp when Berati died, and has defended its staff and promised to co-operate with the government’s investigation.

G4S employs almost 625,000 people in 125 countries…It provides guards, watches over ATMs, and works in prisons, court escort and data protection. It’s a risky business; 18 staff died from “attacks” in 2012.

…The firm was placed under a criminal fraud investigation for overcharging the UK government for the cost of e-monitoring offenders.

Transfield

The large Sydney-based construction firm has just confirmed a $1.22 billion Australian government contract to run the centres on Nauru and Manus Island for 20 months. It will provide “garrison and welfare services” but not medical and counselling services, and it will contract out security to Wilson Security. Last February it was awarded a $175 million contract to run Nauru.

…The company employs 24,000 people in 11 countries, but much of its work remains in Australia, and it’s listed on the ASX. It works in the United States but is scaling back in Asia. It mostly works in construction and asset management in resources, energy, industry, property and defence. It’s doing a lot on coal seam gas in Queensland — installing wells and rigs — and works in iron ore, oil and gas (for Rio Tinto, Boral, Woodside, etc). Transfield has a $366 million contract with NBN Co…

Serco

…it runs the Christmas Island immigration centre (which is part of Australia) and onshore centres including Villawood in New South Wales, Curtin in Western Australia and the Darwin Airport Lodge. Note that the contract to do this expires late this year. Last year there were claims Serco had disciplined four staff on Christmas Island for having sex with detainees or drinking alcohol.

Serco is based in the United Kingdom — just over half its revenue is from Europe — although it’s active in the US and Asia. It employs more than 100,000 people in 30 countries. It’s a nebulous company, providing catch-all “services” to governments and private companies in many ways.

…Serco was accused of overcharging the UK government, had to repay 68.5 million pounds, and was subject to a critical government review and more allegations of poor performance. The UK government’s Serious Fraud Office is investigating.

It’s a charming business of which we can all be proud.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. It’s a tough job. Someone’s got to do it. Probably providing better conditions than those available to the hundreds of thousands of refugees stuck in some god forsaken treeless plain in Africa or on outskirts of some former eastern bloc industrial zone.

      • In 3d’s defence, I think he is overall just an upstanding member of society interested in pursuing sound conservative political policy that preserves a healthy status quo which takes proper account of the tangled web of vested interests. The political propaganda is just that of an amateur enthusiast.

      • Thanks Spleen. I am indeed an amateur when it comes to politics. My views are those of an impartial observer seeking that that is in the national interest.

        I am sure you concur that Australia’s response to refugee demands is aligned the various human rights protocols and always best endeavour made to ensure fair and humane conditions prevail.

        Where would these refugee peoples prefer to be – accommodated under the auspices of the Australian government or perhaps Dadaabb?

        …of course they would.

    • Let’s parse that reply first…and check 3d’s usual “two sets of rules”

      1. “Someone’s got to do it”

      Yes, but not on our tab in a foreign country, since we breach our international obligations they have to be processed here.

      2. “Probably providing better conditions…”

      Letting the natives attack camps and detainees is hardly “better”

      3. “A tough job”

      Yep, pretty tough work ripping off the governments they work for for many tens of millions of dollars (proven) and quite likely a whole lot more. Nothing quite like the gravy train to heaven that outsource providers get their teeth into

      And lastly, how is it that a 20 month contract is worth $61 a month? Man, that’s corporate welfare gone crazy.

      • Alex, Transfield was awarded the contract without tender….

        It’s nothing but a rort…

        (oh, and apparently they also have a former Sri Lankan army officer running the place – a place where Tamil refugees are arriving, to get away from such people)

        Scott Morrison has got to go… he’s doing more damage to this country than any of us could ever manage, even if we tried.

      • When I lived in Saudi Arabia there was a classic tale of the Saudis wanting to build a huge new desal plant. It went to tender…

        A French firm put in for US$200m, An German firm for $250m, an American firm for $280m and one Lebanese guy operating on his own tendered for $600m.

        He’s called into to explain his pricing by the royal family member in charge of the department.

        “Why yanni”, he’s asked. “Why $600m when even the Americanis are only asking for $280 million?”

        His reply was simple. “$200m for you, $200m for me and $200m for the stupid fucking French to build it.”

        Maybe you take bribes Alex, I don’t.

      • KeenEyeKen, if Transfield got the contract without a tender process, that is a clear breach of government purchasing guidelines. I agree that is disgraceful.

        mdsee, if you have any evidence that bribery was involved, I and many others would like to see it. Jokes about the Saudi government don’t really cut it.

      • And Morrison is another of those holier than thou fundamentalist god-botherers and luddites the liberals seem to dredge up in spades, the worst kind of christian, the one who spews out his supposedly divine morality yet never shows any to those below him. So much for the teachings of Christ eh Scott? Not when you can get your corporatist agenda through and line up a super cushy number with your paymasters when you leave parliament.

        And don’t you love the latest hypocritical call for transparency on home insulation cabinet papers, but god forbid we can know about boat arrivals and deaths in detention. What’s sauce for the goose lads, it ain’t sauce for the gander. Where’s Edward Snowden when you need him?

      • Alex…

        Since you don’t care to read and instead only push your barrow I’ll quote the article above to enlighten you.

        “Serco was accused of overcharging the UK government, had to repay 68.5 million pounds, and was subject to a critical government review and more allegations of poor performance. The UK government’s Serious Fraud Office is investigating.”

        “G4S was placed under a criminal fraud investigation for overcharging the UK government”

        And note I never said Transfield has been accused of bribery, so pull your head in.

      • mdsee, if you did not mean to imply bribery I fail to see the point of your post entirely. Serco and G4S are under investigation overseas – so what? They didn’t get the contract. Maybe that is why.

        Rudeness is not a substitute for argument. It’s usually a sign that you are losing.

      • No offense Alex but there was no rudeness in the retorts, they were perfectly civil, cordial even.

      • Losing what, Alex? You haven’t even put forward an argument yet. Saying Serco and G4S didn’t get the contract wins you a PhD in stating the obvious and bugger all else.
        The issue has been raised that huge outsourcing contracts in this particular sector have seen seriously dodgy corporate behaviour. Why are we to expect that Transfield will be any different? Simply because they’re Australian? Just last week we’ve just had UGL/DTZ, a major local competitor of Transfield accused of fiddling the books, so your benign hope doesn’t fill me with confidence. If Ken is correct then where does that leave us? A rort at best and corruption at worst? So your argument, if and when we see one, is?

      • My argument, mdsee, is simply that at the moment there doesn’t seem to be a big field of candidates for this contract. This suggests that either it is not as lucrative as you seem to think or that the list of possible candidates is extremely small. If it is the latter, which seems likely, then they have the government over a barrel. But you can’t blame the government for that. Giving them the contract, even at a price you deem unreasonable, is not “corporate welfare” in any sense. It is just the government taking the best offer available.

        migtronix, I realize you youngsters have different standards when it comes to civilized discourse. But I object to gratuitous suggestions that I might not be averse to taking bribes, that I might be pushing my barrow (God knows what barrow mdsee thinks I am pushing) and to being told to “pull my head in” out of the blue. Yes, I am probably too old and cultured for present company.

      • Ok Alex, so the root of your so called “barrow pushing” is we should suck it up just because that’s the way it is and if the thing turns to shit then that’s just the price we pay.

        Or in other words, good old laissez faire capitalism at its finest.

        Are you seriously suggesting it costs $2m a day to keep several hundred people locked up in Manus and Nauru? Two Million?? These companies work on about 10% net so, let”s be kind and say it really costs $1.8m a day. That’s ludicrous in the extreme (except when you’re a government determined to sweep these people under the rug at any cost).

        You’re right in a sense that the field is slim, but sure as hell it wasn’t a field of one unless something dodgy has gone on.

        I never said you took bribes Alex. Spot the difference.

      • I agree, you never said I took bribes. Just suggested in a sly way that I might, or might approve of those who do.

        I am completely in agreement with you that it is pretty poor that this contract wasn’t put out to tender and the government (ie us) are paying an excessive price. However, I put this down to a normal level of government incompetence in contract management. Probably the investigations of Serco and G4S caught them on the hop. My baseline for considering all such matters is “in the particular circumstances, what were the alternatives?”

        $2m a day is probably cheap compared with the welfare bill if we let them all in.

      • Ok Alex, I’ll buy that. Serco and G4S have both been shitful. But the point remains we are in breach of our international obligations re offshore processing and detention.

        As for $2m a day on welfare, well how about a cogent plan to drive employment using their skills, instead of consigning them to the dustbin of a western sydney ghetto?

        I’m never sly. Who knows, you might or might not take or approve of bribes and going by your “when in Rome” style comment of “in the particular circumstances” one is led to question this…But let’s let that slide. We all know if we’re crooked and the rest of the world will find out if we are (albeit usually far too late). So let’s shake hands and agree we have a terrible problem with no good answers from politicians with agendas that aren’t often enough aligned with our best interests.

    • Probably providing better conditions than those available to the hundreds of thousands of refugees stuck in some god forsaken treeless plain in Africa or on outskirts of some former eastern bloc industrial zone.

      Oh, come on minebot, surely you can do better than “honey, you shouldn’t complain about how much I beat you – some pimps kill people”.

  2. Ask your comrades Julia and Kevin.
    It is their child.
    Comparing this to GULAG is disrespectful to people who spend time or died in actual GULAG.
    But would else would you expect from comrades?

    Lets say that all our prisons are GULAG and leave all criminals alone.

    • What on Earth? The Gulags were filled with political dissidents not criminals. In fact Stalin released a whole bunch of criminals to server as his KVMD.

      The refugees look a lot like political prisoners to me.

      • I am sure they looks like political prisoners for you.
        They are illegal entrants, breaking the low.
        It means by local low they are criminals.

        And do not teach me about GULAG, because you know nothing except propaganda.

      • Don’t waste your breath Mig, like trying to tell religious folk to quit their blinkered faith and start thinking for themselves.

        Softak’s position reminds me of Python’s cracking scene “The Peoples Front of Judea”. All rampant ideology and no vision.

        …and thanks for the gentle backhander to Alex 🙂 Is he 3D1k by another name?

      • @mdsee, interesting suggestion, but no. There is actually more than one person who reads articles here regularly and is not a lefty.

      • “They are illegal entrants, breaking the low.
        It means by local low they are criminals.”

        Actually they are NOT illegal entrants and they are NOT breaking the law.

        It is perfectly legal for a refugee to enter Australia to ask for asylum.

        It is not legal for people who are not refugees (and not Australian citizens) to enter Australia without valid visas.

        Perhaps you should educate yourself about the ‘low’ before you spout off about it.

    • OK, in you words I am not going ” to tell religious folk to quit their blinkered faith and start thinking for themselves.”
      What is the name of your religion?

    • Ok I think that’s a reasonably fair comment, the suggestion is certainly too strong – perhaps ‘Who Rorts Australias Dubious Asylum Seeker Offshoring Policy” is better?

      Remembering that what characterized the Gulags were their remoteness.

    • Ok, it’s a little dramatic. But it’s not stretching it that far. You basically can’t get into Nauru anymore, These are prison camps. We’re talking to the tyrant in Cambodia about taking refugees.

      The vast majority of these people are genuine refugees held captive for political reasons.

      It may be uncomfortable but I’m standing by the title.

  3. Conspiracy theory: I wouldn’t be surprised if the people smuggling syndicates also have relations with these government services agencies.

  4. Lots of feelings running high here. At the risk of being shot before completing my piece, H&H maintains most of the people in the gulag (and I don’t for one minute condone bad treatment or disagree that security companies are gouging) are genuine refugees.
    Now what?
    If we take Afghan people as an example, only about 9% subsequently get jobs here. I know what the Taliban intend to do with the Hazara once they blast their way into power. I know what the Iranian Mullahs are doing to religious minorities, I’ve a fair idea about what can happen to Tamils in Sri Lanka. I understand the huge whirlpool of violence between Sunnis and Shiites which will only get worse.

    So, only two questions – how many people SHOULD we allow to come here? And, if we set a figure, should we permit people not coming in through due process to displace others who try to?

    Let’s hear it…

  5. I don’t understand the argument? Resources In will only ever equal resources Out. Profit and growth will only ever be a price misconception on the other side of the ledger to human toll and suffering. Put aside the political alignment of the refugees; the cash cow contracts paid by a subdued public, that are entered into by incompetent public servants, and paid to an unproductive private sector; any perceived ignorance, or not, of the writer and commentators to the article and all that is left are productive resources being used to stop other productive resources from making a real contribution, with 10% skimmed off the top (which is probably closer to 30-50%, to account for the unproductive contracts being managed elsewhere in these firms).

    Lets get real about calculating the true economic cost to such ventures and not be so afraid of the socialist argument.

  6. rob barratt – Interesting. Last time I looked at the figures – kiwis were coming into this country 10 times more than these refugees (last time I looked). I’ve got plenty of kiwi relations (so this isn’t a kiwi bash and funnily enough the majority live in Australia now). They are economic migrants – not escaping persecution or civil war.

    If you’re talking a numbers game – displacement is a real concern, but we are then operating under an assumption that if someone legally seeks asylum then they are stopping someone else from coming here. I think this is incorrect.

    To me – how many should we let come – as many that need to. Its a question of humanity not economics – as we can see with the numbers above the money used for stopping the boats and imprisoning these people would be better off providing them with freedom and opportunity.

    Scrap NG and bring in the refugees 😀

    RR