Bills Digests

Content provider
Parliamentary Library
24 March 2009
Note: The above document(s) are provided as an Adobe PDF (PortableDocument Format) file. you can download a free viewer for PDF files from Adobe's web site.
Related documents
Contact details
Parliamentary Library
Parliament Buildings

Digest No. 1668

Corrections (Contract Management of Prisons) Amendment Bill 2009

Date of Introduction: 12 March 2009
Portfolio: Corrections
Select Committee: As at 24 March, 1st Reading not held.
Published: 24 March 2009Prepared by John McSoriley BA LL.B, BarristerLegislative AnalystP: (04) 471-9626 (Ext. 9626)F: (04) 471-1250 Caution: This Digest was prepared to assist consideration of the Bill by members of Parliament. It has no official status.Although every effort has been made to ensure accuracy, it should not be taken as a complete or authoritative guide to the Bill. Other sources should be consulted to determine the subsequent official status of the Bill.


The aim of this Bill is to amend the Corrections Act 2004 (the Act) to allow competitive tendering for contracts by private sector organisations to manage prisons.


The reason for the Bill

"Opening up prison management to contractors provides an opportunity for innovation and change in the way in which prisons in New Zealand are operated. Providing for prisons to be run effectively and efficiently by contract managers also enables the Government to look for cost savings in the overall delivery of prison services.

"New Zealand already has some experience of contract managed prisons. Auckland Central Remand Prison (ACRP) was managed under contract from 2000 to 2005. During that time ACRP made a number of improvements that were subsequently adopted by the Department of Corrections (the department), and the experience is generally regarded as having been positive" [1]   .

Situation in Australia and the United Kingdom

The New South Wales Parliamentary Library Research Service's March 2009 E-Brief "Privatisation of Prisons" backgrounds private prisons in New South Wales and Australia generally, including numbers of private prisons in Australia, the proportion of prisoners in "privately and publicly prisons, and cost per prisoner per day:$File/E%20brief%20Privatisation%20of%20prisons%20update.pdf

The NSW paper refers to the Productivity Commission's Report on Government Services, (Chapter 8): The tables show the proportion of prisoners in publicly and privately managed prisons for each Australian state.

The Australian Institute of Criminology lists Australia's privately run prisons (including security level and prisoner numbers)

In 2005 the NSW Public Accounts Committee produced the report, Value for Money from NSW Correctional Facilties:$FILE/Value%20for%20Money%20from%20NSW%20Correctional%20Centres%20Report.pdf

The National Audit Office (UK) 2003 report, The Operational Performance of PFI Prisons, Executive Summary lists the privately managed prisons in the UK, including prisoner numbers:

The full report shows performance rating comparisons between publicly and privately managed prisons, pay and condition comparisons, prisoner/staff ratios, but not a cost comparison.

The House of Commons Committee of Public Accounts 2003 report, also called The Operational Performance of PFI prisons,

Main Provisions

Contract management

The Bill provides that the chief executive, with the prior written consent of the Minister responsible for the legislation, may enter into a contract with any person for the management of a "corrections prison" (i.e. broadly, a prison operated by the department responsible for the administration of the Act (including a temporary prison) and a contract prison, but not a police jail). The Bill also provides that the only persons who may manage prisons are the Crown and any person who has entered into a prison management contract (Part 1, Clause 5, inserting New Section 198).

What a prison management contract must cover

The Bill provides that every prison management contract must contain:

  • objectives and performance standards (not lower than those applying to the department) for the management of the prison and the care of prisoners; and
  • provisions for the appointment or engagement of a suitable prison manager (with the agreement of the chief executive), and for the appointment or engagement of suitable staff; and
  • the training to be provided to prison staff; and
  • provision for the co-ordination of prison services and processes with the rest of the prison service; and
  • the insurance to be maintained by the contractor; and
  • conflicts of interest avoidance provisions; and
  • the provision of programmes designed to determine and address the causes of prisoners' offending and to assist their reintegration into society; and
  • obligations to any voluntary organisations that work in the prison; and
  • how the prison will be managed pending the resolution of any dispute between the chief executive and the contractor; and
  • provision for the contract to be terminated for breach of contract; and
  • the contractor's obligation to co-operate with the chief executive to ensure a smooth handover of prison management when the contract expires or is terminated; and
  • a duty to comply with the requirements of the Act, regulations made under the Act, the New Zealand Bill of Rights Act 1990, relevant international instruments, and those parts of the State Sector Act 1988 that relate to equal opportunities and being a good employer (Part 1, Clause 5, inserting New Section 199 into the Corrections Act 2004).

Delegations, liability and power to subcontract

The Bill provides that contractors may delegate statutory powers under Sections 41 and 42 of the State Sector Act 1988 as if the contractor were the chief executive of the department or each staff member of the prison were an employee of the department. However, this right of delegation is subject to Section 10 of the Corrections Act 2004 which lists the powers which the chief executive may not delegate. The Bill also provides for the indemnification of the Crown by the contractor. The contractor may subcontract with the permission of the chief executive of the department (Part 1, Clause 5, inserting New Sections 199A-199C into the Corrections Act 2004).


Sections 41 and 42 of the State Sector Act 1988 provide for the delegation of powers by chief executives and for the revocation of those delegations. In particular, Section 41(1) provides, generally, that the chief executive of a Department may delegate to any other person (being a chief executive or an employee) any of the functions or powers of the chief executive under the State Sector Act or any other Act, including functions or powers delegated to the chief executive under any Act. Section 10 of the Corrections Act 2004 lists the powers that may not be delegated. These are (the sections relate to the Corrections Act except for the first two):

  • the power to make an application under Section 60(1) of the Parole Act 2002 (which relates to the recall of offenders); or
  • the power to make an application under Section 107 of the Parole Act 2002 (which relates to orders that offenders not be released); or
  • the power to designate employees as hearing adjudicators under Section 15; or
  • the power to appoint inspectors of corrections under Section 28; or
  • the power to authorise extended periods of detention in a police jail under Section 34(5); or
  • the powers conferred by Section 58 or Section 59(1)(b) (which relate to the segregation of prisoners on the grounds of security, good order, or safety; or for the purpose of protective custody); or
  • the power to grant approvals under Section 66(5)(a) (which relates to the types and conditions of work to be provided for prisoners); or
  • the power to appoint security monitors under Section 172; or
  • the power to issue guidelines or instructions under Section 196; or
  • the power to appoint monitors under Section 215; or
  • any power, function, or duty conferred or imposed on the chief executive by or under the Corrections Act 2004 or any other enactment where the power, function, or duty relates to the review of any act or omission of any staff member of a contract prison.

Reporting requirements

The Bill provides that a contractor must report on training, prisoner complaints, acts of violence or self-harm in the prison, programmes provided and attendance at those programmes, the use of force, the exercise of search powers, disciplinary proceedings and their results, the operation of random-testing programmes, matters relating to financial management, and any other matters the chief executive considers necessary. Contractors must also promptly provide written reports after escapes or attempted escapes by prisoners, and any deaths of prisoners (Part 1, Clause 5, inserting New Section 199D into the Corrections Act 2004).


The Bill requires the chief executive of the department to appoint monitors to be responsible for assessing and reviewing the management of the prison. Contractors are required to ensure that suitable accommodation is provided for monitors at the prison, and to ensure that monitors have access to every part of the prison, all prison records (except medical records without consent), all prisoners, and all persons who work at the prison while they are at work. Reporting requirements are placed on monitors (Part 1, Clause 5, inserting New Sections 199E-199G into the Corrections Act 2004).


The Bill provides for the control of a contract prison to revert to the chief executive if he or she believes, on reasonable grounds:

  • that either
  • there exists in respect of any contract prison an emergency affecting the safety or health of the prisoners or any class or group of prisoners, or the security of the prison; or
  • there is an imminent threat of such an emergency; and
  • that the contractor responsible for the management of that prison is unwilling or unable to immediately deal with that emergency or, as the case requires, that threat to the satisfaction of the chief executive (Part 1, Clause 5, inserting New Section 199H into the Corrections Act 2004) .


The Bill requires all prison management contracts to be presented to the House of Representatives within twelve sitting days after they are entered into or varied. Staff of contract prisons are permitted to have access to information held by the department relating to prisoners for the purposes of enabling the staff member to exercise or perform his or her powers, duties, or functions. Prison staff may transfer to the employment of a contracted prison manager without ceasing to be members of the Government Superannuation Fund (Part 1, Clause 5, inserting New Sections 199I-199K into the Corrections Act 2004).

Copyright: © NZ Parliamentary Library, 2009
Except for educational purposes permitted under the Copyright Act 1994, no part of this document may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, other than by Members of Parliament in the course of their official duties, without the consent of the Parliamentary Librarian, Parliament Buildings, Wellington, New Zealand.This document may also be available through commercial online services and may be viewed and reproduced in accordance with the conditions applicable to those services.

  1. Corrections (Contract Management of Prisons) Amendment Bill, 2009 No 20-1, Explanatory note, General policy statement, p. 1.   [back]