US prison operator begins $750,000-a-day contract for Nauru offshore regime

Previously accused of ‘egregious’ security failures, MTC will be paid $47.3m to oversee detention of 111 refugees and asylum seekers for two months

The private prison operator now in charge of Australia’s offshore processing regime on Nauru will be paid more than three-quarters of a million dollars every day to provide “garrison and welfare services” for a little over 100 people.

The US-based Management and Training Corporation – a company previously accused in US courts of “gross negligence’’ and “egregious” security failures – has been awarded a contract for $47.3m covering just 62 days of work on the Pacific island.

The latest government figures show 111 refugees and asylum seekers are now on Nauru as part of Australia’s offshore regime.

MTC will be paid $425,000 for each person it keeps on the island over the next two months.

It was a controversial choice to take over the Nauru contract, which has previously attracted parliamentary scrutiny over its tenaciously high running costs, despite a dramatically reduced cohort of refugees and asylum seekers held on the island.

The previous contract holder, Canstruct International, won a series of cascading, uncompetitive contract tenders from 2017, with the total cost exceeding $1.82bn over five years.

During Canstruct’s tenure, the cost of running the Nauru offshore regime remained consistent at between $35m and $40m a month, even when the number of people within the system fell by more than 90% from more than 1,100 people to just over 100. The contracts have been the subject of extensive parliamentary scrutiny.

MTC has previously been accused of “gross negligence” and “egregious” security failures in the US that allegedly led to the gang-rape of a woman in detention, the murder of two retirees by escaped prisoners, and the months-long solitary confinement of a US citizen wrongfully held in immigration detention.

MTC is the third-largest US operator of private prisons, running 21 corrections and immigration detention centres. But an investigation by the Guardian uncovered a litany of security breaches and custodial failures within MTC-run places of detention.

MTC remains before the courts over its allegedly unlawful detention of a US citizen for more than 14 months – the vast majority in solitary confinement. And it paid more than $8m (US$5m) to settle a bribery case filed by the state of Mississippi, over a scheme that allegedly involved MTC paying bribes to state officials in exchange for contracts with the department of corrections.

Government sources have confirmed to the Guardian the scope of work required under MTC’s new contract is significantly reduced from previous iterations, including a reduction in welfare services for refugees in the community. The number of staff on the island has also been reduced dramatically.

The Guardian understands Canstruct submitted a bid for the new tender – at a significantly reduced figure – but the government chose MTC’s more expensive bid.

The refugees on Nauru are eligible to apply for resettlement in New Zealand. So far 16 have expressed an interest in being resettled. But reports from the island suggest many are battling chronic physical and mental health conditions that have made even applying for resettlement difficult.

Those held on the island do not live in the detention centre – which is empty, but on standby to receive any further asylum seekers sent to the island. Rather, they live in housing in the community on Nauru.

A spokesperson for the Department of Home Affairs said the two-month contract with MTC was a letter of intent to deliver services “while contract negotiations are ongoing”.

The spokesperson said “transitioning-in a new service provider to a remote environment with limited supply and transport options, under foreign laws, incurs costs [but that] there is no degradation of services to transitory persons in Nauru during contract transition”.

“Transitory persons continue to receive health, welfare and accommodation support.”

The spokesperson said “value for money has been achieved in selecting MTC as the preferred tenderer, noting price is not the only factor when assessing value for money”. The spokesperson said the department also considers the quantum and quantity of services proposed, and the complexity of service delivery in the regional processing environment.

A spokesperson for MTC Australia declined to comment on the new contract or answer questions about whether the terms of the contract would be altered if the number of people under the aegis of MTC on Nauru was reduced.

Nauru remains Australia’s sole offshore processing centre, after the detention centre on PNG’s Manus Island was ruled unlawful and ordered to be shut down by the country’s supreme court. Australia was forced to pay more than $70m in compensation to more than 1,900 people it had illegally detained on the island.

Nauru and Australia signed a memorandum of understanding in 2021, committing to an “enduring form of offshore processing” on the Pacific island state, and the new Labor government has committed to maintaining offshore processing as a policy.

The 2016 Nauru files – a cache of leaked internal working documents written by staff inside the detention centre – detailed sexual violence against children as young as six, violent assaults against detainees and systemic neglect. Senior United Nations officials said the Nauru camp was “cruel and inhuman” and a violation of the convention against torture.

Médecins Sans Frontières said the mental health suffering on Nauru was “among the most severe MSF has ever seen”.


Ben Doherty

The GuardianTramp

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