Urgent Debates — Serco—Decision to End Contract for Mt Eden Corrections FacilityText is incorporated into the Bound VolumeUrgent Debates — Serco—Decision to End Contract for Mt Eden Corrections Facility[Sitting date: 09 December 2015. Volume:710;Page:8698. Text is incorporated into the Bound Volume.]Urgent DebatesSerco—Decision to End Contract for Mt Eden Corrections FacilityMr SPEAKER: Honourable members—[Interruption] Order! I am on my feet. I have received a letter from Kelvin Davis seeking to debate under Standing Order 389 the decision not to renew Serco New Zealand’s contract to manage Mt Eden Corrections Facility. This is a particular case of recent occurrence involving ministerial responsibility. I acknowledge that the decision not to renew the contract is made by the chief executive of the Department of Corrections. However he is not answerable to this House. The Minister of Corrections is. It is absolutely critical that the public has confidence in our corrections system.The decision not to renew Serco’s contract is a significant development. Given that it has been announced on the final sitting day of the year there will be no reasonably foreseeable opportunity to debate the issue. I accept that the matter requires the urgent attention of the House and I therefore call on Kelvin Davis to move that the House take note of an urgent matter of public importance.Hon GERRY BROWNLEE (Leader of the House): I raise a point of order Mr Speaker. We obviously appreciate the time that you took to put that ruling together and your decision. There is no question about that but I would ask that you convey your decision to the State Services Commissioner in order that he might make some representations about the limitations of the State Sector Act when it comes to Ministers being able to direct the chief executives of departments who make decisions that Ministers cannot effect but then of course now by your decision are held accountable for in this House.Mr SPEAKER: I am sure that there is no doubt that Iain Rennie will be aware of my decision already.CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order Mr Speaker. I do not want to interrupt my colleague Kelvin Davis. I wanted to do this before this debate gets under way. In light of the fact that there will now be an urgent debate I seek leave for the House to continue sitting beyond 6 o’clock if the adjournment debate has not yet been completed by the time—Mr SPEAKER: Leave is sought for that course of action. Is there any objection from any member? There is none. That will be the course that may well be followed.KELVIN DAVIS (Labour—Te Tai Tokerau): I move That the House take note of a matter of urgent public importance. The decision not to renew Serco’s contract is an utter humiliation for the Government which is forcing through its privatisation of prisons agenda. This should have come as no surprise whatsoever to the Government in that it was warned many many years ago. In fact I remember walking down the main street of Kaikohe in about 2008 or 2009 with the corrections officers from Ngāwhā prison who were protesting against this very thing—the privatisation of prisons. They said to me at the time: “This is what’s going to happen. Any private company that gets hold of a prison contract is going to cut corners because the purpose of a private operator running a prison is to make money.” And I firmly believe that if a country or if a Government removes the liberty of somebody it should be the Government’s responsibility to rehabilitate those people and therefore the Government and the Department of Corrections should be running prisons. But this is what those men and women said to me. They said: “There are going to be staff cuts because that is the first way that a private company makes any money—by cutting the numbers of staff.” And when they cut the number of staff in a prison that means there are fewer staff to look over the prisoners and that is exactly what happened in Mt Eden Corrections Facility. That is the very reason that we have seen all the problems in Mt Eden prison from the very outset.Let me tell you a story: a prison guard from Serco in Mt Eden prison rang me anonymously when all this broke. This was after the fight clubs and everything came out. He rang me and he said: “Kelvin thank you very much for raising awareness with what you’re doing. I am a Serco prison guard.” He would not give me his name and his number did not show up on my phone. He said: “The reason all of these things are happening is because of the lack of staff numbers.” I said: “How do you get all this contraband? How do the prisoners get all this contraband into the prisons?”. He said: “Quite simply the guards bring it in.” I said: “Well how can that be? Because people when they visit the prison need to walk through the X-ray machine to check for contraband.” He said: “Well that’s fine. Visitors members of the public family members: when they come into the prison sure. We have staff there to watch them to make sure that we’re checking that they don’t bring contraband in such as cellphones and cigarettes and tobacco and all sorts such as weapons.” He said: “But because there are so few people we do not have the numbers to watch the staff members coming in.” So that is how—that is how—all the contraband gets into the prisons because of the low staff numbers.So I said to this guy: “What’s in it for a staff member to bring in contraband into a prison? What’s he or she going to get out of it?”. I said: “Why would they want to bring in a packet of cigarettes?”. He said: “Kelvin because a packet of cigarettes—a 20 pack of cigarettes—is worth $1000 on the inside.”—$1000. And if he or she is going to bring in one packet of cigarettes on their person into a prison and risk their job for $1000 they may as well risk it for $10000 and bring in 10 packets of cigarettes. That is the currency within the prison system and it was all enabled because of the staff cuts. The staff cuts are the biggest problem in Serco.I was not quite sure about this $1000 figure for a packet of cigarettes and I happened to speak to a former prisoner who had got out the very day before I spoke to him. I asked him: “Look I’ve heard an outrageous figure. The value of a packet of cigarettes—as far as you know what is the value of tobacco in prison?”. He said: “Well for a 50 gram packet of tobacco that’s worth $800.”—$800 for 50 grams of tobacco. I said: “How much is a cellphone worth?”. He said: “That is worth $1200.” I said: “Well how do these guards actually get reimbursed?”. Well it is quite simple. The inmates have the cellphones they just ring their gang associates outside and they say “Guard A he’s brought in 10 packets of cigarettes. Just drop a paper bag full of money off to his front door or under a park bench. We’ll arrange it.” That is how it happens. People say: “Well look these prisoners with cellphones—that’s outrageous.” But remember some people were arrested because they were organising a meth ring from inside Serco. That is how bad things got there—a meth ring was being organised from within Serco.But we should not be surprised because we knew about the reputation of Serco from the United Kingdom. I think it was some £60 million to £70 million it had to pay back to the United Kingdom Government in December 2012 I think it was because it had been charging the UK Government for work that it had not actually done. It was charging the UK Government for the monitoring of prisoners many of whom had already been returned back to prison and the rest or many of the others were in fact dead. So Serco was charging to monitor dead prisoners. That is the level of corruption that that company is guilty of—some £60 million to £70 million. That is the company that this Government has allowed into New Zealand to run Mt Eden and now Wiri prisons. But also we know about Serco’s reputation in terms of the running of detention centres in Australia. We all know that story about the abuses and about the mistreatment. I have seen it for myself and I have spoken face to face with people inside those detention centres. That is the same company that has mismanaged the Mt Eden Corrections Facility and now is mismanaging Wiri Prison.So we should not have been at all surprised that we got to where we are at but one thing that annoys me is that if it is so bad at Wiri Prison why is it that the Government is actually waiting some 14 months before it actually finally lets the axe fall on this company’s head? If it is that bad why should those prisoners still have to put up with Serco? Why does the axe not fall on its head right now right today? Well it is interesting that this is all coming up today on the last day of Parliament—very very interesting. Because the Minister of Corrections over there is going to say: “Look it’s not my problem anymore.” And the incoming Minister is going to say: “Well not on my watch.” But actually it was on her watch I have to say because Judith Collins was the Minister back in the day in 2009 who actually let the contract out for Serco to run Mt Eden prison. She is the one so she has to be brought in to sort the mess out that she started that she created. It is her problem. I feel sorry for Minister Lotu-Iiga. He was given a sentence of hard labour—he was given a sentence of hard labour. He was given the ministerial equivalent of breaking rocks with his forehead but he could not do anything—anything whatsoever—to fix the train wreck that was always going to happen that was Serco.Back on 24 June I think it was I said to the Minister: “Look I have heard these stories”—this was at the Law and Order Committee—“I have heard these stories about mistreatment about the people being thrown off balconies. I have heard all that.” His reply to me was: “You are hearing baseless misrepresentations.” Baseless representations—within 1 month we had the fight clubs coming out on video. It seems like nobody will believe anything a prisoner says until there is photographic evidence. It is almost like someone who is being thrown off a balcony has to take a selfie of themselves before they hit the ground before they will be believed. We actually have to be grateful to Serco for its lack of staffing because its lack of staffing meant that prisoners could get those cellphones in there and those cellphones are ultimately what brought Serco down. It actually shot itself in the foot. The thing is those walls that stop prisoners from escaping from prison actually stop scrutiny from going in and the only scrutiny we could get—the only way the prisoners’ stories could be believed—was by having that photographic and video evidence and we got it. And thank goodness for that. I was talking to that prisoner whom I spoke about before. He said to me that he was the bread monitor taking loaves of bread around to units in Mt Eden Corrections Facility. He said that the bread is brought in he takes it along on a trolley and one day one loaf happened to fall off the trolley. When it fell off it split open and what fell out was a cellphone. I said: “Crikey. What did you do with the cellphone?”. He goes: “Mate I just put it back in that loaf of bread put the loaf together put on it on the trolley and carried on and took it.” He said it was not worth his life to report the fact that people were getting the cellphones smuggled in through those loaves of bread.I will just talk about some of the deception around the whole Serco situation. Alex Littleton in February of this year was thrown off a balcony. We kicked up a bit of a stink about it and what happened was that the Department of Corrections came out with a press release saying that it was going to take the unusual step of speaking about this particular incident. It said that Alex Littleton fell down some steps after he was being chased by one prisoner. I have to ask: how does somebody fall down over a balcony especially a balcony that has been designed so that people do not fall over it? His story is completely different: he was not being chased by one person and he did not fall; he was being attacked by four people in his cell. When he saw one of these people pull out a shank—a shank is a homemade weapon; it could be a sharpened toothbrush; it could be a piece of metal that they have got from somewhere—he said he feared for his life. So he took off out of his cell and as he took off he was assaulted and he went flying over the balcony. He hit the ground some two or three metres below and he broke both his legs.Alex Littleton crawled to the guardhouse. That is a house with a glass window that the guard hides himself in basically. The guys who assaulted him ran down and started to kick him and beat him. It took some time before that guard eventually came out because that guard would have been fearful for his life as well. When there is only one guard on duty and he is looking over 40 to 50 prisoners. He is scared of getting out there and stopping a fight because he could be the person with the shank left inside of him at the end of the day. What annoys me and amazes me is the difference in the stories. The prisoner says four guys attacked him they had a shank they threw him over the balcony. Department of Corrections and Serco are saying: “No. No. He was chased by one guy and he fell down some steps.” I ask: where is the closed-circuit television footage? Here is an incident where closed-circuit television footage could actually clear up whose story was right but there is no closed-circuit television footage despite there being hundreds of closed-circuit televisions in a prison. Who is hiding what? It is outrageous to say that there is no closed-circuit television footage.I just want to finish with another story. This is from a father who visited his son. He said he had had to sit with his son that day looking at a guy at the next table with his arm in one of those metal frames with the pins into the bones above and below the elbow joint. “The psycho guy”—that he had spoken to his lawyer about the earlier Tuesday—“literally twisted his elbow joint until all the tendons popped because he would not do as he was told and fight another inmate in an in-house game called ‘contender’.” which we now know as fight clubs. He said: “This same guy has thrown two other inmates off an upper floor landing to the concrete below.” This email was dated 12 September 2014—long before I became the spokesperson for corrections long before I said to the Minister in select committee in June of this year that people were being thrown off balconies. The dropping and the throwing of people off balconies has been happening for quite some time and nobody has done anything about it whatsoever. We should not be surprised because we know that this is the track record of Serco. We know that it had a similar poor reputation in the United Kingdom we know that it has got a poor reputation in Australia we know now that it is hopeless here in New Zealand. Just because there are 10 kilometres separating Mt Eden from Wiri Prison it does not mean to say that the problems at Mt Eden are not just going to transfer themselves over to Wiri Prison. I am already hearing stories about things that are going wrong at Wiri Prison. This privatisation of prisons agenda has been an utter absolute shambles a fiasco and an embarrassment to the Government.Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Thank you Mr Deputy Speaker for the opportunity to respond to this debate. Today the Department of Corrections made a decision. It made a decision to not renew the contract with Serco to manage Mt Eden Corrections Facility and I fully support that decision as the Minister of Corrections. Before members opposite jump on their high horses and make ridiculous claims about sacking people and burning up contracts they should understand the nature of contract law first and foremost and understand that they should respect due process and the nature of contracts which we are bound to follow as a responsible Government.By way of background just to elaborate on what went on today the parties signed a 10-year agreement in 2011—not 2009 as the member Kelvin Davis said during his speech; but facts to him are a little bit elusive at times—and there is a 6-year break point.That break point occurs at the end of March 2017 and a year in advance of that break point the contract may be renewed by both parties or the break is exercised as a matter of default.Today’s decision is the Department of Corrections exercising its right not to renew the contract. Corrections in its wisdom has considered that any future contract will require changes to ensure Mt Eden prison is managed safely and effectively.I think that is the first point that needs to be raised here—that it is about safety and security not just of the staff but also of the prisoners who are contained within Mt Eden prison.The nature of the operations of Mt Eden prison is not fully reflected within the terms of the current contract 4½ years on.Corrections will be providing advice to Ministers early in the new year to determine the future of Mt Eden prison and all these options need to be carefully assessed in order to provide for that safety and security going forward.But let me be clear—let me be very clear—this decision does not prejudge the report of the Chief Inspector of Corrections into incidents at Mt Eden prison some of which Kelvin Davis the member who spoke previously referred to.It does not preclude any of the outcomes or the consequences that may stem from that particular report.I want to remind members opposite to respect the sub judice rules that we are all bound by as citizens of this country.They dictate that when legal challenges are made particularly around this report as responsible parliamentarians we should refrain from commenting on these matters.Hon Trevor Mallard: What? Someone brief him as to parliamentary rules. Someone brief him. Get him briefed.Hon Peseta SAM LOTU-IIGA: This decision also comes in the context of the Department of Corrections stepping in to manage the prison in late July. And Mr Mallard knows—Mr Mallard knows—that this was done for the safety and security of the prisoners and staff at Mt Eden prison.Members opposite again may be demanding that Serco cancel the contract both there and at Wiri Prison but that is just irresponsible.That is absolutely irresponsible. It shows a lack of understanding of contract law and it shows a real lack of understanding of due process—and I know Mr Clendon has called for these actions to happen as well. Those members might claim that the privatisation programme has failed but that is absolutely untrue. That is absolutely untrue. This has always been about safety and security and not about ideological viewpoints. It is just that the hatred of members opposite for this type of private provision of services—actually it disguises the huge contribution that they have provided to social services in this country. The absolutely huge contribution that—Hon Damien O’Connor: Oh sure—yeah right!Hon Peseta SAM LOTU-IIGA: They have. For example early childhood education—who provides some of the top-quality early childhood education in this country? What sorts of providers are they? Well often they are private providers. I hear members opposite actually wax lyrical about some of these providers because they are friends of theirs and they are people in our community who provide these services.What about residential aged care? What about the provision of residential care facilities in our communities? Private providers again provide some of the best services. It is some of the best provision of services in our community. Disability services—these are services that I would argue are given to vulnerable New Zealanders vulnerable people and it is funny that we do not hear crocodile tears from members opposite over these types of services. It is clear—it is really clear—that it is the unions that are driving this ideology.Hon Members: Oh come on!Hon Peseta SAM LOTU-IIGA: It is—it is absolutely clear. And the reason you also know is that when there are assaults on prison officers in public prisons we do not hear a peep out of the Corrections Association of New Zealand we do not hear a peep out of the Labour Party and we do not hear a peep out of the Green Party. That is right. When there was a riot at Spring Hill Corrections Facility did we hear any members opposite say that we should fire the Spring Hill Corrections Facility and close it down? Did we hear any of those statements being made in this House? We did not. We did not because this is driven by the ideological viewpoints of those members opposite who are backed by their union mates—absolutely backed by their union mates.Members also criticised Wiri Prison and that is not based on anything to do with performance. The facts are that Wiri Prison is working well and they ignore the differences—they ignore the differences—between Wiri Prison and Mt Eden Corrections Facility. Wiri Prison is not a remand facility. It has a different profile of prisoners. It does not have the risks inherent in a remand facility. Wiri Prison is also purpose-built and those members opposite who have been out to Wiri Prison will understand that its focus is on rehabilitation it is on working and it is on education.We cannot judge the performance of a prison based on someone’s observations on what someone whispered in his ear 10 years ago when he was walking down the street in Kaikohe. Wiri Prison is in fact a state-of-the-art prison that is about providing rehabilitation opportunities and there is nothing members opposite can actually advocate that brings that prison down. It should be based on its performance.Then Kelvin Davis talked about the track record of Serco overseas. Well I have got no responsibility for its record overseas and if we were to judge the performance—Hon Annette King: Of course you have. You should have looked at it.Hon Peseta SAM LOTU-IIGA: No I do not have responsibility. Annette King does not understand that but clearly I do not have performance responsibility for those firms and if we were to judge solely on performance overseas then many many providers who are foreign-based would not be operating in this country. Members opposite know that is just an absurd assertion.In terms of the contracting model this is an example of when contracts actually do work. They do work. In contracts we are able to either adjust the contract or use the break point in order to improve the way that services are provided in this country. You cannot do that with public services—you cannot. You merely socialise the cost and who pays for it in the end? Who pays for this? Well it is taxpayers who ultimately pay for public services that are inefficient and ineffective.Before I finish what is obviously my final speech as the Minister of Corrections I want to offer the following points. We stand by the decisions that were made today. We stand by the decisions that were made when these allegations of fight clubs came to bear; 3 days after those fight clubs came to the fore I ordered a review and that review is currently still pending subject to legal action. Secondly the Department of Corrections stepped in. After 8 days of seeing these allegations it stepped in and took over the management of Mt Eden Corrections Facility and now today corrections has stated quite clearly that the contract will not be renewed—it will not be renewed.I also want to pay tribute to the 8000 staff the men and women who every day on the front line across this country are doing the work of corrections to protect not just the members of Parliament in this Chamber but all New Zealanders—to protect all New Zealanders. The work that they do is often unsung often not fully represented in this House but I want to pay tribute to those people who go out there—some of them risk their lives every day—and do a very very good job. They work in our prisons they work in our community corrections facilities right around this country they work on rehabilitating people in order that they be reintegrated back into society and they also work primarily on the safety and security of New Zealanders. That is their primary function and that is what these decisions have always been about.Finally I want to pay tribute to the performance over the last 14 months of the Department of Corrections. We know that there are fewer victims because of the work that corrections staff do. We know that there is less reoffending. We know that there are more drug and alcohol programmes for rehabilitation than there ever have been in Government services. We also know that there are more opportunities for prisoners who come out of our prisons and need to be employed because we know that jobs matter that when they are working they are less likely to reoffend. But we also know that numeracy and literacy are issues and that is why we have rolled out numerous numeracy and literacy programmes across this country: in order to help rehabilitate those people who are within our prisons but also out there in our communities.In summary this decision is about the safety and security of Mt Eden Corrections Facility. I will never apologise for putting that up front as a priority. The chief executive has decided not to renew that contract. I fully support that and I fully support this department. It has been an honour being the Minister of Corrections. Merry Christmas.DAVID CLENDON (Green): I would have to begin by saying that if ever a Government has sat in this House on the last sitting day of a year with egg liberally smeared on its face this is the day and this is that Government. The announcement today that the contract with Serco would not be renewed at Mt Eden Corrections Facility is an admission of a failure. It is a failure that has been predicted and that was predictable. It has been glaringly obvious to everybody but the Minister of Corrections and the Government that Serco had failed at Mt Eden prison and the fact that we have delayed effectively 6 months to make this announcement to begin to terminate this contract has exacerbated that problem—made it worse.It is most unfortunate that the Minister and the Government took such a long time to concede that their privatisation model has failed. It has failed badly and we should learn from that and acknowledge it. The failure was predictable as I have said and I would like to quote briefly from the Hansard: “The Green Party remains absolutely opposed to this legislation. It is not evidence-based. It is ideological it is dangerous to the community to staff and to prisoners and it will increase costs to the public purse.” That was my colleague Metiria Turei in November 2009 speaking to the Corrections (Contract Management of Prisons) Amendment Bill. That was legislation ushered in by the once and future corrections Minister Collins that enabled this fiasco to emerge—that enabled the private management of New Zealand’s prisons. It has failed badly. That failure should be acknowledged.Unfortunately what we saw earlier today was I think indefensible excuses made on Serco’s behalf for why it has failed so badly. We were told that remand prisons are different; they are hard prisons to manage. We were told that there was an unexpectedly high muster that nobody anticipated when the contract was signed in 2010. We were told that it is a very difficult place to manage and of course Serco has been up against it so now we need to put the Department of Corrections in to clean up the mess. That language is remarkably at odds with the language we heard when the contract was announced and that we have continued to hear about Serco about its wonderful expertise and long experience in prison management about how it is an innovative world-class prison manager. About the only innovation we have seen at Mt Eden prison is a rather unfortunate innovation: effectively Serco has raised its hands and handed control of that prison over to the inmates. In terms of behaviour in terms of management it has simply relinquished its responsibilities. It has done its level best to disguise what has been going on there.Corrections unfortunately has also failed badly in that its monitoring of what was going on in that prison and the monitoring built into the contract conditions has also failed badly. The fact that young people teenagers were being locked down 23 out of 24 hours a day was not picked up by those monitors—there was something seriously amiss if the levels of violence of contraband and of drug use in the prison were not spotted by corrections. It has to bear some blame for this. The fact that Serco was able to carry on failing in its duty to operate a safe humane secure prison is evidence that there was a generic and overall failure in that place.There was an opportunity at least as long ago as July to accelerate the termination of this contract. We had what can only be described as an attempted tutorial in contract law from the Minister a few moments ago. Had he read that contract a little more closely he would have noticed that there were clear grounds for termination. We stood in this House in July and asked him why he had not issued a final warning to Serco. Another performance notice after that time would have enabled him to immediately terminate that contract. Instead we hear again this litany of excuses about why this appalling situation could emerge why it has been able to be dragged out for the last 6 months and why it is going to continue for another 14 months.We heard the Minister make some comments about the cost to the public purse. I have endeavoured through my office through written questions and the like to find out what has been the cost to the public purse of the step-in procedure. How much more is it costing New Zealanders to have corrections in there trying to clean up the mess while Serco continues to be paid out the amount determined in its contract? That additional cost has been borne in terms of people. How are those people being replaced in the Public Service? Is it because we are paying more overtime to the other hard-working prison officers? Those answers have not been forthcoming but we know that any costs that might have been reduced or any efficiencies allegedly that Serco has produced over the previous several years have long since been chewed up by the cost of cleaning up this mess and apparently we are to wait another 14 months before we see the back of it.Our colleague Kelvin Davis is to be congratulated I believe on his unrelenting attention to this issue on having revealed some of the worst abuses suffered by inmates and staff alike in that prison. He made the point about staffing. The private prison model will always fail to produce safe humane and secure prisons for one very simple reason: there is only one means by which a private operator can extract profit from a prison and that is to reduce the number of staff working in it and to reduce their wages and conditions. Mr Lotu-Iiga might rail at length about the inequities of unions and the like; the reality is that we need well-paid and ample numbers of staff in our prisons who have high morale in order that they can continue to do and to do well the very hard daily grinding work of being on the ground in the units engaging with inmates getting a sense when there is tension building up and seeking to diffuse that tension before it boils over into violence. This is what well-trained well-resourced and experienced prison officers can do when their morale is high and when they have good commitment to their task.None of those characteristics are present in a private prison typically. You will look at the average age profile the experience profile the payments made to them and inevitably you will see a reduction in quality of service that links directly to increased outbreaks of violence increased outbreaks of contraband and all of those negative things that we have seen at Mt Eden.I thought it most unfortunate that the Minister saw fit to denigrate and to speak ill of the unions. Between the Corrections Association of New Zealand and the New Zealand Public Service Association I think the majority of those 8000 employees he talked about in our prisons are actually for the most part union members and there is a very good reason why those sides should be unionised. It is to ensure that they are well-resourced that they are well-enough paid. I thought that it was very unfortunate that the Minister saw fit to denigrate those very hard-working men and women in our prisons who do actually put themselves at risk by intervening and by seeking to reduce outbreaks of violence. Ultimately they are on the front line and when things go wrong as they inevitably must because we are dealing with difficult people—I think it is most unfortunate that the Minister saw fit to speak ill of those employees and the organisations that represent them.I will not repeat again the litany of errors we have seen from Serco. I think we can only speculate. I had imagined that it would provide for the first several years of its contract a gold-plated service because that is the experience we have seen overseas. Private operators get into the public sector they over-deliver for a number of years get themselves thoroughly embedded and entrenched then they start winding back and then they start generating their profits. They do take a long view of that.In this instance as I say I can only speculate but I think it is fair to speculate that given the parlous financial state of the UK-based parent company Serco the message has gone out to New Zealand and indeed to Australia: “We need the cash. Get the cash out of that investment as soon as you possibly can.” I believe this is a direct result of that imperative to generate as much money as possible in the shortest amount of time. Understaffing failure to get replacement staff when Serco staff have gone ill or have taken leave—we have very credible reports that this has been commonplace. Serco already operates on a much lower staff-to-inmate ratio than the public service. When people take leave when they are ill—and often it is stress-related—those people have not been replaced. Serco has not succeeded in running a safe secure humane prison nor can it. The sooner this Government accepts that and turns its back on this flawed ideologically driven privatisation model the sooner we can return to sanity and to safety. Thank you.MAHESH BINDRA (NZ First): We have come round full circle. The Minister who is now interested in cleaning this mess is the one who created this mess in the first place. When Serco was invited to take over Mt Eden prison I was personally affected—my career was affected—because I was a custodial officer in the old Mt Eden Prison the only real jail in the country in those days. We took a lot of pride in our work and we took a lot of pride in making a difference in people’s lives and we actually did that on the floor. We did not watch people on cameras and sit in a glass bowl seeing prisoners fighting and doing nothing about it. We actually went inside those yards whenever there was trouble because we were sure that our backs were being watched.The other reason was that we had something called staff to prisoner ratios there. The staff to prisoner ratio in the Department of Corrections - run jails are three officers to a maximum-security prisoner. We have only one maximum-security prison in the country now which is Pāremoremo. Three officers to one prisoner—that is the ratio for maximum-security prisoners. It is one officer to 15 prisoners when it comes to the high-security prisoners and one officer to 30 prisoners when it comes to the minimum-security prisoners because they have been observed over a long period of time and their classification has been processed in a way that their risk of assault their risk of escape and their risk of reoffending are minimal.When Serco walked in I walked out. I was encouraged to apply for a job with Serco and I asked a few questions. The questions were: is the staff to prisoner ratio going to be the same as the Department of Corrections’? The answer was: “Actually we are going to go for a dynamic rostering system.” What does that mean? That means you will not get the same staff to prisoner ratio your life will be put at risk your life will be endangered and there will be risks to your personal safety because a certain company called Serco wants to make profits out of public money. So that was one question that was unanswered.The other question was: are my working conditions going to be the same? I was told that Serco is an international company a very reputable company. I came to know about the reputation or the lack of it later on. I was told: “Yes Serco is a very reputable company.” Well that reputation is shredded this morning I believe. I refused the job with Serco and I chose to stay with the Department of Corrections because at least I knew that my safety was not being compromised there and so did some others.The other question I asked was: is there a lack of good prison managers in the country so that you are importing foreigners to run our prisons? Is there a lack of experienced efficient dedicated committed prison officers in the country so that you are going all over the world to recruit mercenary prison officers? The answer that I got was that Serco is again a really reputable employer. I would like to make a special mention of one of the most experienced prison managers in the country namely Matua Kelly Pūohotaua. He was the most experienced prison manager in the North Island when Serco took over Mt Eden prison. He took a wise decision just like myself. He chose to stay with the Department of Corrections and not join Serco in spite of all the lollies being shown there.The other name that comes to my mind is the then superintendent of Mt Eden prison. The name is Deborah Bradley. She took a lot of pride in her job. She took a lot of pride in the work that she did. When she walked into a prison yard the prisoners respected her because she was a thorough professional. She was very fair but very firm. She has a track record of rehabilitating a large number of prisoners—hardened criminals. I had the privilege of working with such bright people such dedicated people such proud New Zealanders.So I walked out of the Serco deal and I chose to stay with corrections. I knew from the beginning that this day was coming. It is just sad that it has taken the Government 5½ years to get here. This should not have happened in the first place. Serco should never have come into our prisons. Serco should never have got that contract. One thing is for sure—I am not getting a job with Serco because of the way that we have been taking shots at it me and my colleagues Kelvin Davis and David Clendon.Hon Member: And you don’t want a job with them.MAHESH BINDRA: Yes and I do not want a job with it either.Coming back to Serco it has a bad track record overseas. It has a worse track record over here in Mt Eden prison. When the safety of prisoners is compromised when the safety of staff is compromised when there is no focus on the rehabilitation of prisoners—there is focus only on profits—there is no way that that company is going to succeed in our prisons. There is no way that our prisons are going to benefit from the so-called reputation and the so-called experience of such companies. We actually think that stopping here is not good enough. The promise of not renewing Serco’s contract in Mt Eden prison is not good enough. We want Serco to go from this country altogether. We want the Wiri Prison contract to also be gone next because whatever has happened in Mt Eden prison nobody can guarantee that it is not going to happen in Wiri Prison because the staff ratio is the same as it was in Mt Eden prison.Just the other day I had a phone call from an officer working in Wiri Prison and he described an incident where a group of low-security prisoners were walking from the medical centre to their own unit unescorted. Why? Because of a shortage of staff. Why is there a shortage of staff? Because Serco wants to make a profit on staff. So a particular prisoner was targeted by a high-security prisoner from the other unit. He was beaten up badly and he had to be taken back to the medical centre for further treatment. Later on that prisoner was shifted to the hospital because of the seriousness of the injuries. What Serco did just to show the number of prisoners on medication is lower was convince that prisoner to come back to the corrections facility so that the expense of the hospital could be minimised. So the safety of that prisoner was compromised and that is a worry. I would not be surprised if there are similar incidents taking place in Wiri Prison as have taken place in Mt Eden prison. I think we should not take a chance and we should get rid of Serco all together. Thank you.Hon AMY ADAMS (Minister of Justice): I am very pleased to come and take a call in this afternoon’s urgent debate on the decision of the chief executive of the Department of Corrections to not renew the contract with Serco for the management of the Mt Eden Corrections Facility. I just want to start my contribution this afternoon by first of all taking the opportunity to commend my colleague the Hon Peseta Sam Lotu-Iiga. I think Sam has done an excellent job in his time in the portfolio over an incredibly difficult period faced with some very real issues that most members in this House would find challenging. Sam has kept a level calm approach to it and has every single day put what is best for the prisoners and the system at the forefront of his decision making. I know that Sam has thoroughly enjoyed his time in the corrections portfolio. I know that he will go on to be a strong and effective Minister of Local Government.I do think it is worth reflecting though on the fact that we are talking here about some of the most dangerous environments in New Zealand. We are talking about the most dangerous people who are confined against their will in prisons where frankly bad things have always happened and will always happen. Corrections staff whether in private or public prisons actually go in every day and face situations that I would be surprised if anyone in this House has had to face. They do incredibly well. But if we are going to judge the success of the prison service by whether there are zero incidents then frankly we are living in la-la land. These are very dangerous people. In fact I can tell you that the crime statistics tell us that over recent years what we have seen is a hardening almost of the people in the prisons as we have worked very hard to get low-level offenders out of the prison system and into community-based sentences. What you are left with in prison frankly are the most serious people serving longer sentences for serious crimes. They are dangerous and violent. These debates have to be had in that context. Actually when reviews are done into the system that point is made clear.The work done in prisons is very very good. It is of a very high standard. Where incidents do happen of course they have to be looked at and considered and reported on. The Minister has done absolutely the right thing in seeking assurances about the various issues that have come up. But the fact remains that we cannot magic ourselves into thinking that these are preschools and tea parties. They are not. They are dangerous places and incidents do occur.I have to kind of just comment for a moment on that sort of slightly xenophobic rant from the New Zealand First member Mahesh Bindra who was saying that it is all about the fact that they are foreigners. Frankly that is a load of rot. We have never taken a view of saying only New Zealanders can do anything well. Our approach has always been asking what will provide the most efficient and effective service for prisoners in New Zealand and therefore for the wider public. It is about making sure that the public is safe and that when people are in prisons they have the best chance of returning to productive lives. Frankly if New Zealand First is going to take an approach of saying that anyone who is a foreigner should just go home that is something that it can take to the polls. I do not think that that is what New Zealanders would want.Let me talk about the contract that has been the subject of this debate. This contract was signed in 2011 with a well-renowned international firm that is a specialist in this area and that is also working with us at the Auckland South Corrections Facility and doing very well. At the time the contract was put together Mt Eden prison was a very different place. It was a very different place. At the time the facility had predominantly sentenced prisoners with a small number of remandees in the facility. What has happened over time is that the operational reality of that prison has changed considerably to the point where it is now almost entirely remand prisoners. For anyone who is not involved in the sector why does that matter? It is because with remand prisoners you have people in prison who are there for very short periods of time they are not adapted to the prison system they are at their most angry and often their most violent and often they are going through withdrawal symptoms. There is not the time to put them through treatment programmes and recidivism reduction programmes. Anyone who knows the sector will tell you that remand prisoners are the most difficult to manage for those reasons.Of course we have to deal with remand prisoners and Mt Eden has become our primary remand facility certainly in the North Island. But what that has meant is that the contract that was written in 2011 for what was fundamentally a sentenced prison facility now that we look at it in 2015 and what is likely to be needed in Mt Eden over the next 4 years we know that actually we would want the contract framed differently. Actually at the time the contract was written the department had the foresight to know that although the contract provided for up to 10 years in actual fact we might need to change how the system worked so this break point was provided for exactly this reason—so we could sit here in 2015 and ask “Actually is Mt Eden prison still operating the way it was in 2011?”. If not there is an opportunity to stop that contract come out rethink how it works and take it back out for another solution. That is exactly what the chief executive today has determined. I think it is absolutely the right decision. I think it is a decision frankly that would have been highly likely to have happened regardless of the issues we have seen around fight clubs and the like in some of the allegations because the nature of this prison has changed. The whole reason for having a term like this in contracts is so you can say “Now that the prison is a different beast let’s write the contract for those terms.” That is exactly what is happening.I just want to make one closing comment because a lot of the debate has been on some sort of vilification of any sort of private involvement in prisons. Actually I absolutely support the concept of public-private partnerships in our prisons. I think it is a very good concept. The interesting thing is that assaults fights criminal behaviour happen in every prison in our system—in every prison in our system. There was a serious assault at Rimutaka Prison just the other day. What is the difference with a private prison? With a private prison we can hold them to account terminate the contract and give them financial penalties. There is better accountability in a privately run prison than in any other prison in the system. Actually that is a good thing. It means that now when there is a serious issue there is someone to hold to account. If they are not delivering they can be moved on. That is working through its way with the chief inspector’s report. Those decisions are for the chief inspector to comment on.But this issue of accountability is one that applies right across the prison estate and for the first time because of this Government because of this private provider system we have the ability to hold them to account which today the chief executive is doing which is the right thing. It shows us that the system does provide for greater accountability does provide for opportunities to change if things are not working and allows us to renegotiate the terms when the system of the prison changes. I can understand that these are issues of serious interest to the public as they must be. But these are dangerous places. They are dangerous right across the system. Mt Eden Corrections Facility is no different from any other prison in that regard. But with the foresight of the contract drafters in 2011 they have done exactly what we needed them to do which is provide us with an opportunity at this point to assess whether it was still what we needed going forward for this prison. It is not so the contract has been ended. I think it is absolutely the right decision.ANDREW LITTLE (Leader of the Opposition): That speech from Amy Adams illustrates why even with the sacking of Serco and even with the sacking of Serco with 14 months’ notice New Zealanders have no reason to feel assured that this Government is actually going to do anything to prevent the disaster that happened at the Mt Eden Corrections Facility happening again. That speech was just another defence of the ideology that led to the letting of a private contract for the management of incarcerated prisoners yet again. That is why New Zealanders should continue to be worried.They should be worried anyway because the Minister who is about to take over next Monday Judith Collins is the author of this shambles. Here is what she said at the time when she happily and merrily—and no doubt coquettishly—signed the agreement that led to Serco picking up the contract.Fletcher Tabuteau: I can’t picture it. I just can’t see it.ANDREW LITTLE: She was certainly coquettish yesterday on television. We will see how coquettish she is once she takes up the job. She said when defending the contract going to Serco: “Serco has a strong track record in managing prisons. I’m confident that the company will bring the high standards of professionalism safety rehabilitation and security expected by the Government to Mt Eden …” That was from the Minister who let the contract. And then after that she was let off the hook of course because of her superior performance. She went on to do the job that the last speaker now does the Minister of Justice and she mucked that up too. She then found herself on the backbenches for the last 12 months. Now she is going to go back into the very post that led to the letting of the contract to Serco.It is interesting to hear her comments from just the last couple of days. She said of the situation at the Mt Eden Corrections Facility and the contract with Serco that she is going to go into that relationship with an open mind. She is going to ask some questions. According to Judith Collins the putative Minister of Corrections there are two sides to every story. Apparently the video images we have seen of fight clubs the stories we have heard of prisoners being thrown over balconies the affidavits we have read of contraband being smuggled in—these apparently are just one side of the story. She is going to go and find out what the other side is. It will be interesting to see whether indeed she now does that and sees what the other side of that story is.Well we know what the other side of the story is. The other side of that story is ideologically driven blinkered Ministers. It was a pity to see the Minister of Justice just now defending that. Perhaps that is just the normal course of events. But she is a good Minister of Justice who has started doing some good things. Why she would find the need as indeed Peseta Sam Lotu-Iiga had difficulty doing to defend an ideological position about privatising prisons—it frankly beggars belief.Judith Collins started it but she now no longer has the responsibility to finish the disaster that is Serco and the Mt Eden Corrections Facility. But we must all now be alert to the possibility that she remains unshaken in her ideology and she just thinks that it can all happen all over again. That would be a great pity for the New Zealand taxpayers who in addition to having contracted a lemon to run the Mt Eden Corrections Facility now find they are paying for it for another 14 months. When I was an employment lawyer I used to deal with workers who had underperformed—sometimes disastrously in fact. The idea that they might get 14 months’ notice when they got dismissed for poor performance—I mean that would be manna from heaven. If it is good enough for workers to be subject to summary dismissal it must be good enough for poor-performing underperforming disastrously performing private contractors to face the same fate.There is an important principle here. It is a basic constitutional principle. One aspect of the rule of law in a democratic tradition is that Parliament as a democratic institution can make laws that can deprive citizens of their liberty and do it for good reason. When citizens offend against their own to such a level of moral opprobrium it is right that they be deprived of their liberty and withdrawn from society hopefully with the idea that their conduct is corrected and that they have the support or the help or the intervention they need to get them back on the straight and narrow. That is what we ask of a corrections facility. It is about taking citizens who offend against the rest of us and putting them in a facility that means they can return to society as healthier and better citizens. That is why we have a prison system. It is a question of the democratic State making that decision—that we can and we will take people from society and withdraw from them the privileges that go with living in a free and democratic society so that they learn a different path learn a better way. That is why we do it. We should never ever contract that out.Hon Anne Tolley: Labour never funded that.ANDREW LITTLE: I am not surprised that Miss Tolley speaks up. She has overseen it. She is driven by the same poor ideology the same failure of thinking the same intellectual bankruptcy that leads them to turn a blind eye to the realities of privatisation and say that when it comes to citizenship responsibility and depriving citizens of citizenship we should just blindly hand it out to the private sector.The private sector is not motivated by returning citizens who have been deprived of their liberty back to society as better citizens. It is primarily motivated by one thing—it has to be motivated by it because it says so in the Companies Act—and that is profit. It has got to maximise profit. The reality is that when it comes to dealing with people who are sentenced or remanded in prison they do not fit a commercial model. The commercial model is about dealing with similar products; dealing with a process that has great similarities so you can manage it and you can make it efficient so you can make a profit from it.Dealing with people from the vast array of backgrounds and health difficulties that they have in a correctional facility is not the same as managing a commercial service with a level of homogeneity. It is not the same as managing a production process and making a product on a mass basis that has a level of sameness. That is not what you are doing when you are managing a correctional facility. You are dealing with people who maybe come from extraordinarily deprived backgrounds—sometimes actually from a privileged background but they are just silly people and they are doing it again and again. You are dealing with people with health issues with addictions with all sorts of manner of behavioural problems that need to be managed as if they are individuals. And all along the way you are making sure that they are still safe that they are secure that the rest of the community is secure and most important that the right steps are being taken to put them in a fit state either to return to court to plead to their charges or for their conduct to be corrected. That is what we have it for.The idea—the ideological purity of the National Party—that we just hand that over to the private sector to do has now been shown up for what that is because Serco has been brought to book and shown up for what it is. It cannot manage a correctional facility. It cannot manage the range of difficult hard-to-manage and hard-to-deal-with personalities in a correctional facility.Hon Anne Tolley: Go and have a look at some.ANDREW LITTLE: They say: “Look at Wiri. Look at Wiri.” Serco has not been doing it for that long. It has not been doing it for that long. We look at Serco’s track record in the UK and it has been a disaster. I am sorry Miss Tolley. You may have your blinkers on but the rest of us do not. We have seen it for what it is. This Government if it is truly going to be responsive and responsible to the taxpayers of New Zealand if it truly wants to be in touch with New Zealanders will say: “We’ve done the experiment. It doesn’t work. We’re not going to do it anymore. We will not be privatising our prisons anymore.” Nothing less will do.The ASSISTANT SPEAKER (Lindsay Tisch): I call Kanwaljit Singh Bakshi—5 minutes.KANWALJIT SINGH BAKSHI (National): Thank you Mr Assistant Speaker for the opportunity to speak in this snap debate. There is no doubt that the events at Mt Eden Corrections Facility were totally unacceptable to this Government. When these allegations were made the Chief Executive of the Department of Corrections initiated the step-in clauses available to him under the provision of the contract of Serco. The chief executive does not have to provide a reason to break a contract as per the provision of the agreement.We need to understand what prison is. Prison is a facility in which inmates are forcibly confined and denied a variety of freedoms under the authority of the State as a form of punishment. To run such a facility is a complex task and we need to understand that when the convicts are dealt with it is a challenge for the prison officers to deal with that.The safety of the staff and the prisoners is paramount for this Government. The Government is acting to ensure the best outcome for Mt Eden Corrections Facility and the wider prison system. This decision not only reviews Serco’s contract it will also allow the Government to move forward on deciding the best future for Mt Eden Corrections Facility. The decision does not prejudge the chief inspector’s report into the events at Mt Eden Corrections Facility—its outcome of any consequence that might come from it.We need to understand that when these allegations were made immediately an inquiry was set up and we are waiting for that inquiry’s result. As the chief executive mentioned in his statement because Serco has gone for a judicial review of its report it is not possible to talk about that. Currently the Department of Corrections is managing Mt Eden Corrections Facility after invoking the step-in clause in the contract in July this year. This followed the serious allegations surrounding the safety of the staff and the prisoners and the emergence of video showing the fight club and the use of contraband.These allegations were very serious. That is why the chief executive immediately took over the management of Mt Eden Corrections Facility. We have to understand these things in the context of how these facilities are managed. I think it is the right decision that the Minister is supporting the decision of the chief executive and we hope in the new year on his recommendation that the Government will consider how to manage the private prisons and we look forward to that. Thank you.GRANT ROBERTSON (Labour—Wellington Central): How fitting it is to end the year in this Parliament on one of the National Party’s great ideological crusades that has turned sour because that is what this is. The National Party was warned. It was warned in the 1990s when it went down the private prison pathway and the Labour Government had to come in and wind that back. It goes down that pathway again in this Government solely for ideological reasons. Let us be absolutely crystal clear: the taking away of someone’s liberty is a responsibility of the State. It should be held by the State as a responsibility to manage that in accordance with the kinds of norms and rules that the public of New Zealand would expect and when a private operator is brought into this it brings with it the profit motive—that is the point of the operation of a company like Serco. It will cut corners. We knew that from day one. The Government was warned that staffing levels would be cut and they were.I want to pay tribute to Kelvin Davis who has led this campaign fantastically well and highlighted what has happened in Mt Eden. As Kelvin Davis pointed out the moment those staffing levels went down the pressure goes on the staff the trouble rises and we have seen the appalling situation of violence within Mt Eden and the contraband that has come into Mt Eden. So the Government was warned about this and it proceeded anyway.But look at the contract that was signed by Judith Collins who stood there and said that Serco has a strong track record in managing prisons. She said: “I am confident that the company will bring the high standards of professionalism safety rehabilitation and security expected by the Government to Mt Eden.” Well they came with their track record from the UK and in fact what happened in Mt Edenwas what had happened in the UK. There was poor performance and the taxpayers of New Zealand and the people of New Zealand were ripped off. On this side of the House what we say is: what kind of contract is it that the Government has signed? The Government has signed up to a contract that means that the taxpayer will be paying for another 14 months of Serco doing nothing—14 months’ more payment to Serco for their poor performance.What economic geniuses on the other side of the House sign up to contracts when time after time the Government gets done in by commercial operators? Be it Skycity be it Tīwai Point be it Chorus or be it Warner Bros time after time this Government gets done over in commercial negotiations. So here is the Government saying that it has a private provider who is hopeless and is not doing the job but it is going to pay them for another 14 months. It is useless. It is useless at negotiating commercial contracts and Government members come into this House and lecture every other party. Well that is the party that has lost millions and millions of dollars for New Zealanders because of its blind ideological approach to public services. It has put ideology before public safety. It has put ideology before the rehabilitation of prisoners. That is what this Government has done.What makes it worse is that although Serco might have lost a contract at Mt Eden it has still got the contract for Wiri Prison. It still has a 25-year contract there. It is like taking a box of matches off a pyromaniac and saying: “But you can keep the big can of petrol for 25 years and pour that around the place.” That is what the Government has done by extending the contract at Wiri. Now Judith Collins is back in charge—the very person. “Countess Homogenised” arrives on her white horse and says: “I’m back. I created this shambles and I’m back.” Well here is my challenge to Judith Collins. Today John Key has said that Serco could re-tender for the contract in 2017.Dr David Clark: What?GRANT ROBERTSON: That is what he said this afternoon. My challenge to the National Party is: for once listen look at the evidence and realise what you have done and step away from this ideological approach. Reassure New Zealanders that the correctional system is safe that it is protecting New Zealanders and actually doing what it is meant to do to rehabilitate prisoners. If they bring Serco back mark my words this will happen again. This ideological nonsense has to stop.JACQUI DEAN (National—Waitaki): The Department of Corrections has decided not to renew the contract for Serco to manage Mt Eden Corrections Facility. That decision was made and staff were informed of that decision this morning. I want to acknowledge those staff whether they are Department of Corrections staff or Serco staff. I want to acknowledge the hard work that they have done over many years in Mt Eden prison including under the time of the Serco contract.I want to acknowledge the work of Peseta Sam Lotu-Iiga as well as the Minister of Corrections who has done a very good job over a couple of years—Hon Trevor Mallard: Sounds like a eulogy.JACQUI DEAN: The member rudely calls across the House that it sounds like a eulogy. Actually it is me acknowledging that the Minister of Corrections oversees a portfolio that has inherent difficulties within it and those difficulties are the fact that the incarceration of those people is something that is not welcomed by them and a number of them will do anything within their limited powers to make life difficult for those warders and corrections staff who look over them. They are extremely unhappy angry disturbed and violent people and that is something that the Opposition would do well to remember as they are flinging overheated insults around the House about the Minister and about the Department of Corrections itself.We are dealing with a population who simply do not wish to be incarcerated and will take every opportunity to display their anger. So the very fact that the Minister has welcomed the move by the Chief Executive of the Department of Corrections to invoke the step-in power with this contract should be welcomed by this House. It should be welcomed because it proves the point that this contract with Serco provides an additional level of accountability within our prison system. That is something that should be welcomed around this House because there is and will continue to be a full investigation into the events that have happened in Mt Eden prison.One of the Opposition members noted that Serco is primarily motivated by profit. I would dispute that. Of course they are motived partly by profit—this is a public-private partnership and they have entered into a contract—but primarily it is the point I will dispute. I have been to the new Wiri Prison unfortunately before that facility was opened but the very set-up of that modern prison with its focus on rehabilitation and reintegration into the New Zealand population is done by Serco. It is not motivated purely by profit. It is motivated by and aligned very closely with what the Minister of Corrections is also trying to achieve for those New Zealanders who are incarcerated in New Zealand prisons. Thank you.The debate having concluded the motion lapsed.