Serco eyes rail opportunities

Lisa Owen: Now, they used to be the biggest company no one had ever heard of, but it’s fair to say that’s no longer true for troubled outsourcing giant Serco. It’s being investigated over a raft of allegations at Mt Eden Prison, including fight clubs, contraband and underreporting of prisoner violence, and last week we revealed their interest in providing back-room services to those buying state houses. Now, we have repeatedly asked Serco for an interview this year, and each time we’ve been turned down, so hearing that the global CEO, Rupert Soames, was in New Zealand, we decided to track him down instead. Now, Mr Soames had a very busy day yesterday. He told me he met with Corrections Minister Sam Lotu-Iiga, Corrections boss Ray Smith and that he visited both Mt Eden and the new Serco-run prison at Wiri.
Rupert Soames: Clearly this is a major issue for Serco and for Mt Eden Prison, so I want to make that we are cooperating fully with all the investigations and making sure that people are getting all the information that they need. Some of the allegations are very serious and need to be taken very seriously.
What makes you think you should keep your contract?
Well, that will not be for us to decide. It’s going to be— clearly, there’s an investigation going on at the moment. There are, it has to be said, many good things that have happened at Mt Eden over the last four years. If you go and look at the rate of drug dependency, it is far lower—
But, Mr Soames, with the greatest of respect, there is video circulating showing serious fight clubs at that prison. A number of officers have been stood down in recent times for inappropriate behaviour. What is going on there?
Well, there is a full-scale investigation going on, being led independently by the Chief Inspector, overseen by the Ombudsman, with which we are cooperating in ourselves. We also have our own investigation going on, and we take these very seriously.
How can the New Zealand taxpayer trust your company?
I suggest what should happen is that we let the investigation run its course.
Given the breadth and volume of allegations – serious allegations – involving Mt Eden Prison, it’s got to be one of two things, doesn’t it? It’s got to be that there is incompetence in that prison on the part of your company, or you’re being wilfully blind and your employees have been wilfully blind?
I don’t think either of those two conclusions are the case. What I do know is the case is that as is entirely appropriate when serious allegations which we care about very much, let me just— just remind ourselves of the facts, okay, is that Mt Eden Prison under our ownership— sorry, ownership is the wrong word – under our direction of managing the prison has gone from being one of the worst-rated prisons in New Zealand to being one of the best.
It’s certainly not one of the best.
No, no, no, no, no. Okay, so there are now questions saying what’s going on? There’s serious allegations which we take really seriously, which is one of the reasons that I’m here, and there is a proper investigation going on.
So how does your staff—?
And there are—
Sorry to interrupt you, but this is really important.
Of course it’s important.
How could your staff not know what was going on there when prisoners seem to have been willy-nilly filming themselves in fight clubs, dealing in contraband, smoking and drinking? How could this happen under the nose of your staff?
Well, it shouldn’t happen. There is contraband in prisons. I have to say that the rate of contraband in prisons in Mt Eden is actually pretty low.
You’re trying to justify the videos that we’ve seen…
I’m not trying to justify—
…or minimise? Because that sort of sounds like that.
I’m not trying to minimise it in the slightest at all. That's one of the reasons why I've come here — to make sure that the investigations that the Chief Inspector and the Ombudsman are doing; that we are fully cooperating with them. We have our own investigations going on. We take it very seriously. Can I just say that we don't fire people on the basis of allegations. You know, I don't know which bit of the Magna Carta says that you go and fire people. You properly investigate. There's a professional investigation going on to sort those which are wild allegations from those which are truthful allegations.
The mere existence of the video shows…
It's shocking.
Yeah. How would you describe it?
Oh, shocking. Two things are shocking. It is shocking that fighting is going on inside the prison. It is also shocking that there are mobile phones in the prison. I have to say I don't believe that Mt Eden is the only prison in New Zealand or, indeed, in the world where mobile phones are.
But that in of itself, the existence of the video, in and of itself, shows that you've failed in your duties to properly manage that prison, doesn't it?
But I have to say that we live in a real world here in which, let me tell you, that you are going to put a lot of often very violent men together, there is fighting. I don't justify it. I don't condone it. I think that the idea... I'm very worried about the idea of the existence of fight clubs, and, clearly, there is too much violence. In fact, in Mt Eden the level of violence has in the past few years it has dropped a lot. It has now picked up, and one of our issues there is to find out why and what we can do, and more importantly, what we should be doing better to run that prison. You ask who is responsible. I am responsible. I am the chief executive of Serco, therefore, the buck stops with me. But I would say to the taxpayers of New Zealand is that what the facts that we know show, and it may turn out that the reporting has been wrong, that there is something going on, if the reporting has been correct, that what the taxpayers had in New Zealand is a situation where one of the worst-rated prisons has become one of the best-rated prisons. It's been rated exceptional. Now, there may questions about that. And it has also been done at a cost that is substantially lower...
I think the thing is, also, opposition politicians have said you're at the top of the league table because you are cooking the books. What is your response to that allegation, because it's a serious one?
It's an incredibly serious allegation. Incredibly serious. I mean, the citizens of New Zealand and our customers have the right to expect that the numbers and the issues that we are reporting to them are correct. When I say correct, I don’t mean completely error-free, but we have been properly reporting. Can I remind you also that since we’ve had this contract, we’ve been closely monitored by the Department of Corrections. There are four monitors on site. This is not something that’s operating in an island in itself. I personally—that’s why I want to get to the bottom of these allegations. Either Mt Eden has improved greatly under our ownership, or it hasn’t. If it has, okay, then I think Serco should be should praised and say, ‘Well done, Serco.’ If it hasn’t, then we will have to bear the consequences of it. I’m completely clear about this, and people have to be able trust that we are reporting what is actually going on.
What level of confidence can you express in your senior staff at the prison? Can you say you are 100% confident that the senior staff in your prison have behaved appropriately and administered the contract as they should?
Look, I think what we need to see is to see the results of the investigations. Staff are experienced. They have been working very closely with the Department of Corrections. These are serious allegations. Saying that I have confidence or no confidence doesn’t actually help anything.
You can’t express confidence in your own senior staff—your own senior management at the prison?
I have confidence in the way they have been running the prison, subject to—we need to see the results of these serious allegations. I have to say, prison are places that allegations get made about, and quite rightly, they should be investigated properly, but it is not necessarily the case that each one of them is true.
Serco runs a lot of services overseas outside of prison services. So what interest do you have in expanding the services that you offer in New Zealand? Because I understand that you have been looking at the state housing situation.
Yes, and other opportunities here. We are committed to New Zealand. We wish to be good citizens here. We are often—We are active in the area of government services, and part of what—the reason I want to be here is to make sure that we are dealing and responding appropriately here so that if the Government, at the end, is going to go, ‘actually, we think you’ve done  it okay’—can I just say one thing that’s absolutely certain is that whatever comes out of this report, they are going to show up failings; things that we could have done better. I absolutely know that. We are working already to go and improve what we do.
Are you looking at youth justice?
No. We are look—we are looking at rail services in particular, and also other opportunities, but we’ll see. Let’s just get through this thing, because there is an issue of trust, and we have to go and satisfy people that we have responded correctly.
Okay.
Okay, so, thank you.
I really do appreciate your frankness and your time.