STATE LABOR CAUGHT IN A TRAP

VICTORIA'S Minister for Corrections, Andre Haermeyer, this week found
himself something of a prisoner.

While his cabinet colleagues escaped from Labor's first budget with the
credibility of their election pledges intact, Haermeyer was held hostage to
his rhetoric in opposition after he announced a new 68-bed unit, to be built
and run by private operators.

The prison officers' union and inmate advocates had assumed, on the strength
of Haermeyer's unequivocal opposition to privately run jails, that any
substantial expansion of the system would be under government control.

They were stunned when Haermeyer's budget press release had as its
centrepiece a unit for young drug offenders to be built next to Fulham
private prison, near Sale.

They were further perplexed in the light of the most recent Justice
Department report on prison operations that showed Fulham had the
second-highest rate of positive drugs tests in the state.

The minister's justification for the move - it was the quickest and most
economical way to establish such a unit - pointed to a trap Haermeyer and
his cabinet colleagues have made for themselves. Steve Bracks has sold
Labor's new mantra - "economically conservative, socially progressive" - as
combining the best of both worlds. But as Haermeyer's predicament
illustrates, the two qualities are sometimes in direct conflict. The new
government will not be able to avoid making some uncomfortable choices
between them.

As the Transport Minister, Peter Batchelor, found with City Link, when the
choice comes down to carrying through the Kennett agenda or reigniting the
"Guilty Party" tag of financial irresponsibility, the former wins. The scale
and complexity of the toll-road network meant that no-one really expected
Labor to tear up the deal, but other ministers who have inherited privatised
agencies and services that have been contracted out will not escape so
easily.

For Haermeyer, it will require a Houdini-like performance. He and the
government remain of the "socially progressive" view: care and
rehabilitation of prisoners should not be in the hands of companies whose
main priority is profit.

But he is handcuffed by the Kennett government's contracts that set up the
three private prisons. The contracts have two distinct sections: one on
building and financing the jails and one on running them. The companies that
run Fulham, the Metropolitan Women's Prison and Port Phillip Prison either
own or have a large stake in the building and financing contracts. The
building deal goes for 20 years, but the management rights, which offer the
highest potential profits, are reviewed after five years.

The first opportunity Haermeyer will get to fulfil his commitment to
returning prison management to the public sector won't come until August
2001, at the women's prison in Deer Park. The contract allows for the
minister to call a new tender if negotiations for renewing the management
contract are unsuccessful. Haermeyer told The Age if a tender is called, he
will end the previous government's ban on the public prison system bidding.

Yet the contracts also say that if the incumbent prison manager loses its
contract, the new operator takes over the building and finance commitments
as well.

In other words, if the state prison arm, CORE, did take over running the
private prisons, it would have to make the loan repayments for the
buildings. Sure, the government already effectively pays the loans through
fees to the contractors to pay off the buildings. But assuming
responsibility for more than $100million in new debt would certainly test
its "financially conservative" budget credo against the "socially
progressive" aim of full public control over prisons.

As for the prison operators, there would be little incentive to hang around
if running the prisons was awarded to someone else. Peter Olszak, managing
director of Group 4 Corrections Australia, which runs Port Phillip, said
that although it had a 50per cent stake in the building contract, it had no
interest in just holding that contract if it lost the management rights.

The private operators make it clear they will keep an eagle eye on the
clause, saying the minister must negotiate with them in good faith before
calling a new tender. Having invested millions in establishing their
foothold in Victoria, they would pursue any move to oust them unfairly
through the courts.

Port Phillip's management contract does not come up until 2002, but it is
already under scrutiny after a riot and a string of suicides.

After coroner Graeme Johnstone last week found the prison operators and the
former government had contributed to the deaths of four inmates who hanged
themselves, Haermeyer announced an inquiry into private prison management.

In an interview on Thursday, he said the inquiry would be held under the
auspices of the Justice Department's Corrections Commissioner, and
preferably carried out by an outsider with prison management experience. The
review would cover prisoner safety, staffing and other management issues.
The latest row over staffing at Port Phillip led to prisoners being locked
down for almost three days this week after the stabbing of a prison officer.

The prison contracts have no minimum ratio of staff to prisoners. The prison
officers' union, which this week won agreement from Port Phillip for a
slight increase in staff, says this is one of the main weaknesses of the
contracts.

As well as the inquiry, Haermeyer has ordered a tightening of contract
monitoring. "In the past the problem was the previous government had its
credibility so closely tied into the private prison sector the
commissioner's office had its hands tied in performing that role," he says.
"I want the contract monitors to take a more pro-active role ... and there
will be no reluctance to default (fine) prisons if they are not delivering
what we expect of them." But he says the financial penalties tied to excess
positive drug tests tend to discourage the operators from reporting the
extent of the problem. He is worried that medication that masks illegal
drugs is being prescribed too freely.

Haermeyer says the budget announcements are designed to meet problems of
prison overcrowding inherited from the coalition. Sentenced prisoners are
being held in police cells for up to 28 days because there are no spare jail
beds.

Of the 357 permanent new prison places, 205 will go to the public system and
152 to the private. As the privately run Deer Park is the only high-security
jail for women, the 50 new high-security female beds have to go there.

The new Fulham unit will provide an Outward Bound-style program to help
inmates go back into the community. It will be built outside the walls of
Fulham, says Haermeyer, to isolate participants from prisoners responsible
for drug smuggling.

But why didn't Haermeyer place the new facility at Bendigo, the existing
public jail that specialises in drug rehabilitation? He says the new unit is
"not so much about detox as addressing self-esteem and personal factors. It
is a minimum-security, transitional unit targeted at young drug offenders
... basically giving them self-confidence, taking responsibility on
themselves, leadership skills. It's one that is urgently needed and it just
so happens that Fulham is the prison that has that prisoner profile."

The program was developed in consultation with Fulham. "I'm not going to
stand out there stomping my feet saying, 'I hate private prisons and
therefore we're going to abrogate our responsibility to young drug offenders
in Fulham prison'."

Another 40-bed facility, run by the public sector, will help prisoners
reintegrate into society.

Haermeyer says a cabinet sub-committee will report in September on a range
of alternative sentencing options, drug treatment facilities and
rehabilitation programs designed to reverse the steep growth in prisoner
numbers.

He has not seen any evidence it is cheaper to house a prisoner in a private
jail than a public one. "All the prisons have a different prisoner profile,
so you can't compare apples with apples."

Julian Kennelly, a spokesman for the Community and Public Sector Union,
which represents prison officers, is disappointed Labor has expanded the
private system. The new Fulham unit "looks like the private prison you have
when you're not having private prisons".

Kennelly thinks the monitoring of the private operators remains
under-resourced. Community legal service lawyer Amanda George agrees. She
says that despite assurances from Haermeyer and the commissioner, access to
prison monitor reports are no better under Labor than in the Kennett years.

She notes that five days after announcing the prison management inquiry,
Haermeyer awarded them 40 per cent of the new permanent places - about the
same ratio that applied under the Coalition. Given that, she says, private
operators "would hardly be quaking in their boots".