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Federal

Nov 2, 2010

No transparency in Serco dealings with contractors

Alongside the PR games, there are potential legal benefits for Serco by outsourcing security personnel services, write Paul Farrell and Antony Loewenstein.

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As we reported yesterday, private company Serco contracts out some of its security personnel to MSS Security, a company owned by an Indian security company with links to Lehmann Brothers. By outsourcing to other companies, it’s possible for Serco to distance itself from criticism and in turn, the Government can blame Serco for mismanagement and fine them accordingly (that provision is written into the contract).

Equally, that provision means that Serco isn’t necessarily compelled to report all perceived infractions due to its avoidance of financial penalties.

Alongside the PR games, there are potential legal benefits for Serco by outsourcing these services further. When Crikey visited Villawood recently, MSS Security guards were patrolling the visitors’ area.  The guards were clearly identified as MSS staff, not Serco officers, wearing an MSS uniform and ID card. One guard also said he only worked occasionally at Villawood and worked at several different places in NSW with MSS.

This degree of flexibility in employment, as well as the identification as MSS guards rather than Serco staff, may mean that the relationship between Serco and MSS staff could be deemed as that of an independent contractor rather than employees.

This is an important legal distinction. If the MSS staff were indeed held by a court to be contractors in this instance, it limits Serco’s vicarious liability for its actions if MSS staff were involved in conduct that resulted in tortuous legal action.

Of course, it’s impossible to be certain about the exact nature of the agreement with Serco and MSS and what’s required of subcontractors under the detention centres contract because documents relating to it are deemed commercial in confidence.

It also raises issues about the training of security staff. In July an MSS Security guard was caught in bed with an asylum seeker in a Darwin residential complex.

At the time, a Serco Asia spokesperson said that MSS security guards had to have a minimum of Certificate II in Security Operations.

But a Certificate II is the bare minimum entry-level requirement for unarmed guards and crowd controllers.

These are by no means local issues and the accountability of private companies running prisons and detention centres is a global concern. Recently an Angolan man, who was being deported home from the UK, died on a plane at Heathrow Airport and security company G4S guards have been accused over his death.

Now another related incident has come to light, with G4S being accused of mistreating a Colombian man as he was being deported from the UK.

As a result of these recent controversies, G4S lost its deportation contract with the British government last week but the company is being embraced elsewhere by the Tory-led administration, renting out custody cells to police forces that “will cut costs by centralising facilities”.

G4S formerly held the Australian detention centre contract before Serco took over in 2009.

Serco itself has also been criticised over its treatment of prisoners in the UK in a recent report into the Yarl’s Wood Prison and excessive violence in other privatised institutions in the UK.

The detention business is a multibillion dollar industry and Serco and G4S have proven in the UK, under Labour and the current Tory-led Coalition, that privatising detention is a profitable enterprise.

There is no evidence of this trend reversing; if anything, under David Cameron’s radical cost-cutting exercise, outsourcing will only increase, with the private sector relied upon to fill the gaps with a dwindling public service.

The Gillard government’s recent announcement of an expansion of current detention centres around the country and opening of new ones means now more than ever Serco’s role, and the role of outsourcing, must be questioned as tax-payer money is being spent with no transparency.

*Paul Farrell is a Sydney-based freelance journalist. Antony Loewenstein is an independent journalist and author.

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