Wednesday, March 9, 2011

When a fine for breach of contract is not a fine but an "abatement"

Tom Cowie on Crikey has published a longer piece today on the saga of Serco's $4.5 million fine for breaches of its multi- million dollar immigration detention centre contract with the Federal Government.

However, the real truth about Serco's contract breaches remains to be told. It appears that the $4.5 million in fines applies only to contract breaches that occurred at one of the Christmas Island facilities and does not reflect additional breaches that have occurred for contract breaches at other detention facilities on Christmas Island and the mainland.

As Pamela Curr from the Asylum Seeker Resource Centre points out the real victims of these fines are the detainees, who are being supervised by staff fearful of their company being sanctioned. Furthermore, we the wider public are denied access to any information about these publicly funded services and the expenditure of huge amounts of public money to a UK based multinational corporation with a history of constant contract breaches and a record in the UK of the use of illegal regimes of force.

Curr points out that:
"The government, in order to ensure they’re protected in the media from any escapes, impose punitive fines on the private contractor, who in turn impose punitive conditions on detainees".

Here is an extract from the Crikey piece
"A DIAC spokesperson told Crikey they couldn't confirm the fine, the amount or what it was for, because those details are "commercial in confidence". All Crikey could ascertain was that there is a provision in the contract for DIAC to sanction its partner: "The contract between the department and the detention services provider has provisions that allow Serco to be financially sanctioned for failure to meet agreed service delivery standards."
The minister's office was also less than forthcoming. Details of the fine and the figure fall under the contractual agreement, a spokesperson for Minister Chris Bowen said, and to provide any more information would breach "commercial-in-confidence".
Serco also would not provide any details on the fines. A spokesperson even took umbrage with that description -- "they're abatements, not fines" -- and said any sanctions issued were part of an ongoing review of Serco's performance.
"The contract between DIAC and Serco has provisions that allow Serco to be financially sanctioned for failure to meet agreed service delivery standards," the spokesperson told Crikey. "We cannot go into detail on the total amount of any fines imposed as this information is considered commercial-in-confidence.
The spokesperson said that the confidential contract between Serco and DIAC was "growing" and that it was "particularly complex": "This long-standing practice to not disclose such details has been in place over successive detention service providers, and covers governments over many years."

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