Why this controversial prison firm's $69 million Nauru asylum seeker deal is under scrutiny

The auditor-general may investigate a government contract given to a private prison company facing serious allegations overseas.

A resettlement camp on Nauru, pictured in 2018. Source: Getty / Mike Leyral/Getty

KEY POINTS:

• The Auditor-General may investigate the government's $69m Nauru contract.
• The US prison company granted the contract is being investigated overseas.
• MTC has faced accusations of 'gross negligence'.

A deal between the government and the Australian branch of a controversial prison company could be investigated by the nation's chief auditor.

The auditor-general is considering an investigation into a $69 million four-month contract granted to MTC Australia, to run "garrison and welfare services" for asylum seekers in Nauru.

Its parent company has been accused of fraud, and has settled multiple cases where it was accused of being responsible for deaths.

There are currently fewer than 100 asylum seekers on Nauru. Credit: ARM Climate Research Facility

The possible investigation comes as four refugees from Nauru were newly resettled in New Zealand on Friday, according to a report from Radio New Zealand.

The resettlement was part of an offer by the New Zealand government accepted by Australia to resettle 150 refugees annually for three years.

Since April last year when the agreement was made, only ten refugees in Australia's detention facilities have arrived in New Zealand, the first group of six arriving in November.

There are fewer than 100 asylum seekers currently in Nauru, and the MTC's contract, signed in October, does not involve any detention.

But the Greens are pushing for more detail on what due diligence the Home Affairs department undertook before striking the agreement.

What is MTC?

A private prison company with facilities across the globe.

The Management & Training Corporation describes itself as a "global leader in corrections", claiming to offer education and "secure rehabilitation and transition services" to prisoners.

The Department of Home Affairs office in Melbourne. Source: AAP / JOEL CARRETT/AAPIMAGE

It's the third largest prison operator in the US, where it can house over 31,000 inmates and runs 21 facilities.

MTC Australia has previously been involved in running two correctional centres: Queensland's Borallon Correctional Centre in the 2000s, and NSW's Parklea in 2019.

Why is it controversial?

MTC's parent company has faced a series of allegations in the US over the standards of its care.

An investigation by The Guardian found it was accused of "gross negligence" and security failures which allegedly led to the gang-rape of a female detainee, a case it settled in 2007.

Greens Senator Nick McKim wants the contract looked into. Source: AAP

Three years later, two retirees were murdered by a pair of violent offenders who had escaped an MTC-run facility. Court documents suggested the site was understaffed, while false alarms on its perimeter were so common guards ignored them. That case was also settled.

The company also paid out $7.5 million to settle a bribery case in Mississippi, where it was accused of a range of misconduct, including money laundering.

It's also being investigated by Texas for allegedly collecting millions of dollars for a prisoner therapeutic and counselling program it stopped delivering during COVID-19, local media reported.

What's being said?

Greens senator Nick McKim wrote to the auditor-general's office asking it to investigate Home Affairs' decision and what due diligence the department had done checking MTC's parent company.

He also asked it to investigate if MTC was an appropriate company to engage given the previous issues, and if Commonwealth procurement guidelines were followed.

"Some or all of these allegations were known to, or should have been known to, the Department of Home Affairs at the time it decided to enter into or extend arrangements with MTC Australia," Senator McKim wrote.

Senator McKim said offshore detention was a "decade-long humanitarian calamity which has wasted billions of dollars of public money".

"The Department of Home Affairs has an abject record on transparency, probity and good governance, and there is a very strong case for the auditor-general to investigate how this company came to be engaged given the seriousness of the allegations its parent company is facing," he told AAP.

"We should be offering immediate resettlement in Australia to everyone still stranded on Nauru and in Papua New Guinea."

A Home Affairs spokesperson said all procurement rules were followed when awarding MTC the deal.

"Transitory persons under regional processing arrangements in Nauru are managed by the government of Nauru, with support from Australia through the provision of contracted service providers," they said in a statement to AAP.

"The department is finalising procurement processes for regional processing capability services to support the government of Nauru."

MTC Australia referred SBS World News' inquiry to Home Affairs.

'Dire conditions'

Daniel Ghezelbash, Deputy Director of the Kaldor Centre for International Refugee Law at UNSW Sydney, told SBS News that refugees and asylum seekers in Nauru have lived in "dire conditions".

"They have endured more than a decade of neglect and hopelessness, with inadequate medical care and other support services," he said.

Dr Ghezelbash said many are "critically ill" and are in urgent need of evacuation.

"This neglect has been widely documented over the years," he said.

The UN special rapporteur on migrant human rights has labelled conditions on Nauru as "cruel, inhuman and degrading", while Medecins Sans Frontieres has stated that the mental health suffering on Nauru is amongst the worst it has ever seen.