Manus Island puts Australia at the forefront of outsourcing

Grant AUD 1.22 billion contract The transfer of management of the Manus Island and Nauru detention centres to Transfield Services is another example of the government handing over responsibility for what has long been a core national activity.

A growing number of large for-profit companies, sometimes based in Tax havensIncreasingly complex and politically sensitive Providing services on behalf of the government, This includes everything from court security, prison and paramilitary services to the nearest detention centre services.

Large global contractors have emerged in these markets. G4S until recently held the contract for services on Manus Island. operations The company has offices in 125 countries, employs approximately 625,000 people and provides a range of services to governments around the world. According to its website, these services include Patient transfer In Victoria Patrolling the US-Mexico borderwhich runs the world’s second largest private prison South Africa.

this AusTender Database show Forwarding service A range of services have been (or are) provided to the Australian Government, from floor coverings to the operation and maintenance of the Nauru Detention Centre (Valued at over $3.2 million Just over a year).

Its competitors Serco It provides everything from New Zealand prisons to Australian courts and custody, but also costs the government a lot of money by providing onshore detention centres. Senate Legal and Constitutional Affairs Legislative Estimates Committee Between 2009 and 2014, contracts awarded to Serco were worth A$2.14 billion for detention centres and A$195.4 million for migrant housing (page 89).

Lessons from the United States

In the United States, the concentration of companies providing such services is Wartime Contracting Commission The 2011 report estimated that total contracts and grants for the wars in Iraq and Afghanistan totaled more than $200 billion, with the top 22 contractors receiving nearly $140 billion (2002-2011). As a result, the report found that the U.S. government was in a very risky and expensive position for many emergency support functions.

in his In-depth Articles Writing in the New York Times in 2011, Nick Bernstein takes us inside the world of large multinational corporations that have turned what he calls an immigration crackdown into a booming business opportunity. He argues that Australia is an international leader in handing over the operational aspects of its increasingly complex immigration policy to outside agencies. The CEOs of several large outsourcing companies cited by Bernstein openly discuss the judicial market, the business opportunities presented by political crises, and the declining level of competition in a field of growing demand.

Make the situation confusing

The situation in Australia is complicated by the fact that successive governments have viewed immigration as something to be outsourced not only to large for-profit security companies but also to other countries, blurring the lines and making the responsibilities and liabilities of various parts of this operation unclear.

Despite the Commonwealth having a commercial contract with G4S, Immigration and Border Protection Minister Scott Morrison has said the government is working on a new contract with G4S. Press Conference February 21:

Under arrangements under the previous government, the control and management of the centre rests with the Government of Papua New Guinea, in line with its sovereign responsibilities.

He also pointed out that the current government fully endorsed this approach. Senate EstimatesHowever, it is clearly stated that the department can exercise influence over the centre’s employees through contracts (p. 71). Mixed messages and complex arrangements can lead to confusion in practice; who is really in charge?

Making sure the contract is “correct”

In appointing Transfield Services, the Minister explain He sought a more “integrated” approach to offshoring. In practice, this would see a number of Transfield Services operations consolidated, thereby increasing its market power. According to the minister, this was done in part to address the quality of service provided by the multinational provider, G4S:

… One of the things we think we need to do overseas, and I think recent events have clearly confirmed this, is … a more integrated contract management and system that operates across both islands.

He claimed that the previous government had taken a “rather ad hoc approach” to these contractual arrangements. Therefore, the sloppy and loose contracts had to be addressed by cleaning up the arrangements; these factors appear to have influenced the decision announced in December not to renew the G4S contract.

However, during questioning by the Senate Budget Committee, Department Secretary Martin Bowles said the transition from G4S to Transfield Services was less about performance and more about the “synergies” that came with having one contractor across multiple locations (page 55). However, on further questioning, Bowles pointed out that Transfield Services did not provide “welfare” services on Nauru, these activities had previously been provided by the Salvation Army on Manus Island, so this was not simply an expansion of existing services, but work they had never tendered for in either location (pages 86-87).

This argument leads us to believe that having the “right” contract in place will help prevent such problems from arising in the future.

When asked how asylum seekers could be kept safe, Scott Morrison said it could be done:

Through safety standards and contracts for lawful conduct… by suppliers and I think also strong management by the people who support the government of Papua New Guinea.

contract A list of services provided by G4S and the Australian federal government on Manus Island, published online by the New Matilda newspaper in response to a Freedom of Information request, shows that these services mainly include cleaning, gardening and security services. It is full of talk about cooperation, the health, well-being and dignity of “transferred persons”, and many details are yet to be worked out (such as a performance framework).

While activities such as cleaning, security and gardening are an important part of the provision of detention services, are they really so? Can the government really specify what it wants to buy here? Can it establish the accountability mechanisms and measures we should demand in these extremely sensitive areas of government activity?

This is no ordinary contract

In theory at least, the strength of a contract comes from the ability of the purchaser (in this case, the government) to enforce standards, sue for breach of contract, collect damages, and punish contractors who fail to deliver.

In practice, however, how willing are governments to do this? Do they have the resources and skills to carry it out?

When we combine the power of contracts with vigorous competition in the supplier market, the government should emerge as the big winner with lower prices and higher quality. But the reality is much more complicated, with huge challenges in service designation, unwillingness or inability of procurement parties to wield a big stick, and highly distorted supplier markets in some areas. As Bernstein points out in his article, companies in a “fair market” rarely lose contracts.

exist Our work We have found that the most complex and potentially risky areas of outsourcing are inevitably those where the government hands over its monopoly on legal power to outside parties, or engages them in sensitive areas, as highlighted in the report of the Commission on Wartime Contracting in the United States.

There are three different types of benefits and costs that governments need to weigh when making outsourcing decisions.

The first is value for money – which is difficult to analyse in the Manus Island case because Senate Estimates On the one hand, there are synergies, streamlining and efficiency, but on the other hand there is the implication that offshore processing is more expensive than onshore processing (p. 88). The second is relationships. In the case of Manus Island, the political relationship between the Australian and Papua New Guinean governments is tied into the wider service delivery story, complicating this issue.

Then there are the strategic costs and benefits – reputational impact, loss of core competencies and a lack of control over the situation. Even if we knew that the Manus Island incident had value for money and relational benefits (which we do not), the strategic costs borne by the Australian government in this incident are enormous politically, ethically and morally.

Signing multi-billion dollar contracts with large multinational companies to process asylum seekers is not only strategically risky for the government, but certainly exceeds our tolerance for outsourcing.