US prison provider is paid $900k a day to take over Nauru offshore processing

The federal government is paying a US private prison provider more than $900,000 a day over two months to take over running Australia’s refugee offshore processing on Nauru.

Management and Training Corporation (MTC) has been selected by the Albanese Labor government to run regional processing services on Nauru, taking over from Queensland company Canstruct, which has run the centre since 2017 on a contract now worth $1.82 billion.

There were 111 asylum seekers on Nauru as at the end of August. They live in community accommodation, not in the detention centre. Over the next two months, MTC will be paid the equivalent of more than $425,000 for each asylum seeker.

MTC runs 21 prisons and immigration detention centres across the US and also operates the Parklea Correctional Centre in NSW. Its new $47 million contract is running from September 29 to November 30 for “facilities, garrison, reception services in Nauru” and was awarded after a limited tender process.

This is on top of a $4.7 million contract handed to MTC from August 9 to September 30 for the same services. The government was also still paying Canstruct across this entire contract with MTC.

In total, MTC will be paid $52 million over four months to begin taking over the Nauru operations, with the new contract to run for 57 working days.

The Department of Home Affairs confirmed MTC was selected as the preferred tenderer for the “delivery of services to support the implementation of enduring regional processing services in Nauru”.

A letter of intent had been signed with MTC to enable it to begin the transition process, and contract negotiations are ongoing to ensure there is “no degradation of services to transitory persons in Nauru during contract transition”.

Asylum Seeker Resource Centre director of advocacy and campaigns Jana Favero says a new contract with any private company should not be necessary — asylum seekers on Nauru should be taken to Australia.

“We have grave concerns with any company coming in to take over the contract on Nauru,” she says. “The whole past nine years of offshore processing have been a complete financial and moral policy failure. It’s only going to continue if we give companies such as MTC contracts and keep people there.”

The department said MTC’s contract “does not involve detention” as no refugees are in the detention centre, and the company also has “extensive experience in running training and education programs for vulnerable people”. The procurement process involved “multiple layers of due diligence and governance”.

MTC has been accused of “gross negligence” and “egregious security” failures in civil lawsuits in the US, and a report from the NSW prison inspector recently found “concerning” rates of incidents and a “deficit” in mental health services at Parklea prison.

From April 2019 to March 2021, MTC and its previous partner, Broadspectrum, incurred fines worth $2.4 million for a number of “charge events” at Parklea, and three MTC officers were recently charged over the alleged assault of a man held at there earlier this year.

MTC Australia referred all questions about the Nauru contract to the Home Affairs Department, and declined to comment on the US lawsuits, saying many of the recommendations from the Parklea report were implemented before it was tabled, and other initiatives have been introduced to reduce assaults at the prison.

The recommendations from the Parklea report included MTC improve staff rostering, increase psychology services on offer, and expand the structured induction for new inmates.

“MTC Australia works closely with Corrective Services NSW to ensure we provide a safe, decent and secure facility for our staff and inmates while they are in our care,” it said.

MTC runs a number of Immigration and Customs Enforcement (ICE) detention centres in the US. A lawsuit filed by a range of legal and human rights groups on behalf of Carlos Murillo in California last year alleged Murillo was incarcerated at an MTC-run detention facility in solitary confinement for 23 hours a day over 14 months. This was in a cell “so small he could almost touch both walls”, the suit claimed. 

The lawsuit labelled MTC as a company that “traffics in human captivity for profit” and that “purposefully under-resource[s] detention facilities, creating cesspools of suffering that generates millions of dollars in profit with little accountability or oversight”.

Several migrants recently claimed they were placed into solitary confinement at an MTC-run detention facility after they spoke out about the conditions there. They alleged staff falsified charges to send them to solitary confinement after they lodged complaints about staff behaviour and facility conditions.

MTC has denied the claims of retaliation against the migrants.