Outsourcing of Correctional Services

Introduction

                        This paper depicts Hong Kong experience in the outsourcing of correctional services.

                        Outsourcing can be defined as the management or operation of parts or all of an organisation by an external source.  From a government department’s perspective, outsourcing is an arrangement where the department contracts with an external service provider for a continuous period for the provision of services specified and paid for by the department.  The external service providers can be another government departments, public agencies, NGOs and organisations in the private sector, etc.

Outsourcing in Hong Kong corrections

                        Outsourcing of public services is nothing new in Hong Kong.  The management and maintenance of government office buildings and the provision of a full range of Information Technology (IT) services to the Judiciary by private firms are two examples out of many. The Financial Secretary in his 2000-01 budget speech confirmed once again the Administration’s ongoing commitment to involving the private sector in the delivery of public services, including the outsourcing of services by the civil service.  At present, two-thirds of the government departments have engaged in some form of outsourcing, ranging from purchaser/provider agreements, public-private partnerships and private sector management.[2]

                        As an integral part of the Hong Kong criminal justice system, the Correctional Services Department (CSD) is committed to delivering high quality and cost effective custodial and rehabilitative services.  To this end, outsourcing has been used by CSD as a viable means to save costs, improve service quality, increase resource flexibility, gain access to specialised expertise and technology and enable the Department to concentrate on its core business. Some examples are given below to illustrate how the Department benefits from outsourcing.

Provision of healthcare services

                        CSD has long been working in collaboration with the Department of Health and the Hospital Authority[3] to provide comprehensive medical and mental health services for all persons detained in CSD custody.  All Medical Officers working in our penal institutions are seconded from the Department of Health.  They make diagnosis and prescribe medications for the treatment of sick prisoners, and admit those in need of continuous nursing care and observation into in-centre hospitals, which are manned by correctional officers with nursing qualifications. Inmates requiring specialist treatment and serious cases will be referred to specialist clinics and public hospitals respectively.  Such mode of service provision minimises the healthcare cost of the Department since we need not run full scale hospitals in our institutions, yet enable our inmates to receive the same level of professional healthcare as do law‑abiding citizens in the community.

Organisation re-engineering

                        In recent years, a number of projects have been conducted and new initiatives introduced to re-engineer the way we do our job in order to meet the rising expectations of the public and the challenges brought about by our fast‑changing environment.  For this purpose, external consultants were employed at various stages to tap their expertise in specific tasks.  For example, dating back to 1997, the Department opted to lay down its Vision, Mission and Values in order to provide its staff and the public a clear picture of the Department’s purpose and direction. The task was contracted out to a local consultant, which having conducted a systematic review of the Department, produced the Department’s first VMV statement.

                        In early 2000, CSD launched a corporate cultural change project in order to develop a result-driven culture that is sensitive and responsive to changes.  The post‑project evaluation study was contracted out to an external private consultant with expert knowledge in the area.  As a continuation of the corporate cultural change, a further consultancy study on quality services and cultivation of a customer-focused culture was conducted. Again, an external private consultant was hired to produce high-quality training kits and videos to promote quality correctional services and customer-oriented corporate culture among out staff.

Human resource management

                        Another example of utilising external expertise is the engagement of the Hong Kong Productivity Council (HKPC)[4] in April 2000 to carry out a project to identify the core competencies to be required for our correctional officers and develop a competency-based performance appraisal system for CSD. Having carried out extensive studies and staff consultation at all levels, HKPC developed the core and functional competency models with 60 core competencies identified and grouped into eight clusters, namely competencies supporting VMV, custodial skills, systematic and procedural skills, mental orientation, leadership, continuous improvement, communication and personal qualities.  Based on the competency models, HKPC established a competency-based performance appraisal system which now serves as a single operating platform for the implementation of our human resources strategies.

Provision of staff training

                        Outsourcing is also implemented in the area of staff training whereby organisations in both public and private sectors are engaged in the provision of tailor‑made professional and generic courses for correctional staff of different ranks.  For instance, certificate/diploma courses in social work for correctional officers have been offered by the School of Professional and Continuing Education of the University of Hong Kong for over 10 years. On the other hand, the Outward Bound School of Hong Kong is arranged to offer its expertise and experience in the provision of team building and leadership training courses for our staff.  CSD also collaborates with the Civil Service Training and Development Institute of the HKSAR Government in the provision of generic courses like English and Chinese language, and computer courses.  Some of the training courses organised by external bodies were previously run by our Staff Training Institute. Through outsourcing, the Department can deploy its correctional officers from the Staff Training Institute back to the frontline to address institutional manpower shortage.

External accreditation and quality assurance

                        The Correctional Services Industries (CSI) is dedicated to providing quality products and services so as to achieve customers’ satisfaction and secure from them more suitable work for inmates.  To this end, the Correctional Services Industries (CSI) successfully obtained ISO 9002 certification in sign making business after going through certification auditing conducted by the Hong Kong Quality Assurance Agency in 1999.  It was the first time a section of the Department obtained such privileged certification.  CSI actively worked with a local external consultant, which offered its expertise in guiding our CSI staff through the accreditation process. With the knowledge gained from the accreditation process, CSI gained its second ISO accreditation in late 2001 for the provision of laundry services to local hospitals and clinics.

                        Similarly, in May 2000 the Complaints Investigation Unit (CIU) of the Department employed a local university as its external consultant to work up an internationally renowned and recognised quality management system for the provision of complaints handling service.  The consultant provided internal audit training for all CIU staff and offered expert advice to the Unit in setting plans towards compliance with ISO requirements.  The Unit successfully gained accreditation from the Hong Kong Quality Assurance Agency in August the same year, becoming the first ISO9002:1994 certified local complaints investigating agency.  The Unit is now striving for the renewal of its certification towards ISO1990:2002 with its own efforts. This is another example in which the Department internalises external expertise via outsourcing to increase its own quality assurance capacity and saves further consultancy costs when undertaking projects of similar nature.

                        The use of outsourcing as a means to assure service quality and standards is further illustrated by external quality inspection of CSI’s products. Among various CSI trades, quality audit has been conducted on book lamination, bookbinding, leatherwork, fiberglass, metal work, pre-cast concrete, carpentry, and laundry services for over 10 years.  External local quality surveyors are contracted to carry out neutral, professional and objective quality inspection to ensure that the end products produced are of market acceptable standards.

Research and development

                        Another area of utilising expertise of external source is research and development. In pursuance of the Memorandum of Understanding signed between CSD and the Correctional Service of Canada (CSC) in March 2001, a joint research project on “Risk and Needs Evaluation and Management of offenders” has been launched.  The project aims to improve existing risks and needs evaluation of offenders with a view to enhancing their management and rehabilitation.  CSC’s research experts are invited to give advice and work with CSD staff on the project.  Also, a research team comprising experts and scholars from a local university was hired to undertake part of the project pertaining to the development of validated clinical tools for psychological assessment. This helps to address the limited research capacity of CSD.

Application of IT in correctional administration

                        There is a saying that nowadays information technology advances at a pace faster than people can keep up with. This holds true even to the IT professionals. While the Department is keen to make greater use of latest IT in correctional administration, obviously it is not economical for the Department to hire individual IT experts as permanent staff each time we want to develop a new IT application. Hence, we involve experts from the Information Technology Services Department and the private sector to provide IT support and solutions, largely on project basis. They work closely with our experienced correctional officers of the Department’s Information Technology Service Unit to ensure that the IT applications developed can meet our needs. Under such arrangement, a number of computerised systems and IT applications have been or are being developed to enhance penal operations, human resources management, staff training and the delivery of rehabilitative services.  Outsourcing helps exploit the strengths of the IT professionals in the wider IT community, minimise the recurrent staff cost and increase the IT options available to the Department for the improvement of administrative and operational efficiency.

Provision of rehabilitative services

                        Outsourcing is also used in the provision of rehabilitative services to offenders. For instance, An independent office under the name of “Telephone Hotline Service for Rehabilitated Offenders” was established in late 2001 to render timely guidance, crisis intervention and apt referral services to discharged prisoners and their families. The operation of the hotline service is contracted out to a local NGO – The Society of Rehabilitation and Crime Prevention, which is experienced in working with discharged offenders.  Apart from advice giving on the telephone, the Society of Rehabilitation and Crime Prevention can provide longer-term aftercare to those callers on a need basis. This helps to fill the service gap in the provision of aftercare support to those discharged offenders to whom the Department has difficulties in extending its mandatory aftercare services.^[5]

                        To increase programme diversity and meet the changing needs of the inmates, the Department also plans to engage external social welfare agencies and adult education institutions to run hobby classes and cultural activities for inmates.  This enables the Department to test out the strategy as well as inmates’ responses before the Department decides whether further resources should be committed for the activities.  This also lets our staff focus on their core duties of custodial supervision.

Transportation of CSI materials, products & industrial refuse

                        At present, over 50% of the transportation work for the delivery of CSI materials, products and industrial refues are contracted out to a local transportation company, which provides drivers and various types of vehicles to cater the transportation needs of CSI.  By doing so, more correctional officers and Department’s vehicles are freed up for core custodial and escort duties.

Other considerations in outsourcing

                        Up to present, private sector involvement in Hong Kong corrections exists in the form of purchaser/provider agreement and public-private partnership.  Although outsourcing can bring benefits to the Department, we are aware of the danger of oversimplifying solutions by resorting to outsourcing. For example, we had examined the feasibility of total outsourcing prisoners’ canteen purchase[6] but concluded that this was not a viable move due to security considerations and price implications. Given the nature of our work, cost-containment should not be the only concern. 

                        The operation of CSI further illustrates the point. The present operation mode of CSI workshops is a governmental use model, under which the products produced are mainly supplied to government departments. CSI has ventured into the private sector market to look for suitable business opportunities that would create jobs to get inmates gainfully employed.  The running of prison workshops by a private sector firm as some overseas jurisdictions do, however, is not feasible in our context because Hong Kong is obliged by the Forced Labour Convention, 1930 (No.29) to suppress the use of forced labour.  According to Article 2 of the Convention, any work or service exacted from any person as a consequence of a conviction in a court of law is not regarded as “forced or compulsory labour” provided that the said work or service is carried out under the supervision and control of a public authority and that the said person is not hired to or placed at the disposal of private individuals, companies or associations.  In other words, we have to ensure that all work or service exerted by prisoners must be carried out under the direct control and supervision of correctional officers and no private individuals, companies or associations should be allowed to operate any workshops in Hong Kong prisons.

                        In a nutshell, there are other important practical issues other than cost saving that must be addressed before we opt for outsourcing of correctional services.

Privatisation of prison management

                        The management of prison facilities by a private contractor is a controversial issue fraught with unresolved legal, managerial, political and ethical problems. Proponents and opponents both offer various arguments and evidence to support their respective positions and no incontrovertible conclusion could be drawn so far given the difficulties of establishing true ‘like with like’ conditions for private vs. public prison cost-effectiveness comparisons. Notwithstanding this, the trend of privatising prison management has continued in some overseas jurisdictions.  On top of the prime motivation for cost saving, using private prisons as a strategy to raise the service quality of public prisons, e.g., through benchmarking, and tender competition with private operators to provide prison services, has been noted. 

                        In Hong Kong, although our correctional system is operating within a climate characterised by government downsizing and rising penal population, the idea of privatisation of prison management and operation is unlikely to have public support. Despite Hong Kongers are becoming more aware of and involved in public affairs, the population at large tends to be conservative on having criminal sanctions administered by private agencies. Most firmly believe that the responsibility lies with the government.  Besides, most people are satisfied with and confident in CSD’s performance in the provision of quality custodial and rehabilitative services and there is no imminent perceived need for privatisation. In fact, last year we have only one prisoner escaped from our custody and no suicidal death, the figures being relatively low when compared with most parts of the world. Also, a report on our prison conditions published in 1997 by Human Rights Watch and the Hong Kong Human Rights Monitor, which is considered still valid today by the public, say this:

“While showing the strains of overcrowding and, in some facilities, understaffing, the Hong Kong prison system has much to recommend. To begin with, the territory’s prisons are administered by an extremely competent and professional corps of correctional officers.  Under their vigilance, the prisons are relatively safe and secure, and serious physical violence is a rare occurrence..… The Prison Rules that regulate the operation of the prison….. reflect a healthy concern for prisoners’ fundamental rights….The filth, corruption, extreme violence, lack of adequate food and medical care, and corporal punishments that afflict the great majority of the world’s prisoners are not an issue in the Hong Kong prison system.”

                        From CSD’s viewpoint, well-managed public prisons are not necessarily inferior to private prisons. Some times, quality control may be more difficult when we have to deal with independent private contractors, not to mention the hidden cost of initiating, negotiating and managing contracts, and monitoring contractor performance.

Conclusion

                        There is no doubt that outsourcing is a prevailing strategy to meet today’s needs in transforming important but non-core business processes and ensuring that maximum value from resources is focused on core processes. In doing so, however, we have to assess critically the risks and costs involved. For example, what will be the negative impact in case a private food caterer goes bankrupt and stops providing food to prisoners? Concerning privatisation of prison management, what if a private company deliberately submits low bids to obtain contracts to get into market and to wait until the government depends so much on its services that it has no other choices but to pay higher prices in subsequent contracts?  As the initial investment in private prisons is so great, it is impractical to turn contracts over frequently to maintain a competitive market environment.

                        We have heard both discrete successful and failure cases in prison privatisation.  Privatisation is not implemented in a vacuum and its desirability and feasibility should be assessed within the broader context of socio-economic and political climate of the respective countries where it takes place. While other parts of the world do it for reasons of their own, for the time being Hong Kong is unlikely to take this option.  Although we are committed to achieving better value for money, we do not think the administration of criminal justice should be solely based on economic considerations. Nonetheless, we will keep an open mind and we will continue to make reference to overseas experience in prison privatisation for the purpose of benchmarking and best practice development.