After a decade of campaigning by Australians who wish to see an end to the detention of asylum seeker children, neither of the two main political parties has renounced their support for the policy. The Department of Immigration and Border Protection continues to detain children on Nauru and in mainland Australian centres.  According to recent statistics, there are 127 children in immigration detention facilities in Australia[1], and 88 on Nauru.

As a result, refugee advocates are shifting their focus to the private service providers that enable and profit from the suffering of innocent children. Just as occurred with tobacco and fossil fuels, activists under the banner of the No Business in Abuse campaign are urging superannuation funds to abandon their stake in companies that support or profit from the detention of people seeking asylum.[2] 

Four companies in particular (three of which are ASX-listed[3]) are cashing in on the detention of children in Australia and on Nauru – Serco, Transfield Services, Wilson Security and OTOC. 

About Serco

The British outsourcing company Serco has a long and chequered history of profiting from asylum seeker detention and border security, internationally and in Australia. In 2004, Serco contracted with the Australian Government to lease 14 patrol boats to intercept asylum seekers’ boats bound for Australia[4] and the company has run mainland and offshore detention centres since 2009.[5] 

Serco’s immigration work and its treatment of children deprived of their liberty has long been a source of scandal. In 2009, the Children's Commissioner for England found that children held in Serco Yarl's Wood immigration detention centre in the UK were being denied urgent medical assistance, handled violently and left at risk of serious harm.[6]

Last year the Australian Human Rights Commission heard evidence that Serco employees on Christmas Island had used wrist-locks and choke holds on unaccompanied children to force them to relocate to another section of the Christmas Island detention centre.[7] The Commission found that these children “were not being treated with humanity.”[8] This year, a guard from the Serco-run Wickham Point Detention Centre in Darwin was fired after it was alleged he had coerced female detainees into having sex with him.[9]

In 2011, The Australian newspaper reported that high school leavers and British backpackers were being hired as subcontractors to work alongside Serco staff.[10]

Transfield Services and Wilson Security

In 2014, Transfield Services was awarded a $1.2 billion contract to provide welfare services over a 20-month period at Australia's offshore refugee processing centres on Nauru and Manus Island in Papua New Guinea.[11] Transfield Services outsources its security work on Nauru to Wilson Security, who in turn subcontracts a portion of its work to local security providers.[12]

This is big business. On the day Transfield Services announced it had signed a contract with the Department of Immigration, its share price skyrocketed as high as 17 percent above its opening value, lifting the market capitalisation of the company by about $80 million. 

Like Serco, Transfield Services and its subcontractors on Nauru have become embroiled in serious claims of mistreatment of asylum seekers. The 2015 Moss review investigated allegations that Transfield Services security and its subcontractors had: committed physical and sexual assault (including on children), traded access to longer showers (during water shortages) or cigarettes in exchange for sexual favours from detainees, and requested to see children shower naked.[13] While the Moss Review found there was insufficient evidence to make findings about these allegations, they highlight the potential vulnerability of detainee children to serious abuse in an environment where there is insufficient independent oversight of their welfare.

Asylum Insight’s explainer on the Moss review is online here.

Serco staff may themselves fall victim to Australia’s cruel asylum seeker detention system and leave severely traumatised by the experience.[14] Bound by confidentiality agreements and new laws criminalising speaking out about conditions within detention centres, it is difficult for former employees to tell their stories.[15]

OTOC

OTOC are an Australian infrastructure and surveying company. In 2012, OTOC won a contract to build the Nauru processing centre and since then have garnered $55 million in contracts to build the centre and other facilities on the island.[16]

Divesting from children’s detention

The decision by Australia’s sixth-largest superannuation fund, HESTA, to sell its stake in Transfield Services this month was seen by some as a turning point, a sign that investors were starting to take account of so-called “human rights risk”.[17]

HESTA’s CEO Debby Blakey said:

"We believe it is highly likely that the social governance issues associated with its detention centre contracts will have a negative impact on Transfield Services’ business and share price, so have concluded it was in the best financial interests of our members to divest the stake."[18] 

Following HESTA’s decision, Unisuper and Telstra Super were quick to follow suit and end their exposure to Transfield Services.[19]

The focus on the businesses and organisations profiting from detention of children offers a new way for concerned Australians to take action. No Business in Abuse’s campaign has the potential to both reframe the refugee debate in Australia as a corporate social responsibility issue, and exert significant influence over the practices of companies dealing with children in detention.

 

The following super and investment funds hold a stake in either Transfield Services, Serco, Wilson Security or OTOC:

Organisation Footnote
Investment funds and banks with holdings in Transfield Services Allan Gray Management Australia Pty Ltd -
Superannuation funds with holdings in Transfield Services CareSuper
-
United Super 20
VicSuper 21
Investment funds and banks with holdings in Wilson Security Deutsche Bank 22
Perpetual Limited 23
Investment funds with holdings in Serco Acorn Capital Limited 24
Paradice Investment Management 25
Superannuation funds with holdings in OTOC Auscoal Superannuation Fund -
Commonwealth Super Corporation -
Commonwealth Bank Officers' Superannuation Fund -
Queensland Local Government Superannuation -
UniSuper 26
Sunsuper Fund 27

Super funds with holdings in Serco

Many super companies own shares in Serco (and OTOC, Transfield Services, Wilson Security) through international index tracking funds - these funds track the components of a market index (i.e. the ASX200) by investing in all companies listed on that index. Most super funds will let members know if they own shares in Serco if they contact them directly.[28]

 

Mark Evenhuis has volunteered and worked in Bougainville and PNG as a juvenile justice advocate, human rights advisor and consultant over the last four years.  He currently works at Plan International Australia as a Policy and Advocacy Advisor.  The views expressed in this article are his own.  He wishes to thank Natalie Young and Laura Vines for their input into this piece.

 

[1] https://www.humanrights.gov.au/immigration-detention-statistics

[2] http://www.smh.com.au/business/melbourne-mum-taking-on-transfield-over-children-in-detention-20150918-gjppk1.html?utm_source=twitter&utm_medium=social&utm_campaign=nc&eid=socialn%3Atwi-13omn1677-edtrl-other%3Annn-17%2F02%2F2014-edtrs_socialshare-all-nnn-nnn-vars-o%26sa%3DD%26usg%3DALhdy28zsr6qiq

[3] Serco is listed in the UK.

[4] http://www.theguardian.com/business/2015/jul/02/serco-rupert-soames-outsourcing-privatisation

[5] http://www.crikey.com.au/2009/07/01/private-contractor-serco-to-run-detention-centres/

[6] http://www.independent.co.uk/news/uk/home-news/inside-yarls-wood-britains-shame-over-child-detainees-1674380.html

[7] https://newmatilda.com/2014/08/22/children-detention-put-wrist-locks-choke-holds-inquiry-hears

[8] https://www.humanrights.gov.au/sites/default/files/document/publication/forgotten_children_2014.pdf  Forgotten Children, 35.

[9] http://www.perthnow.com.au/news/wickham-point-detention-centre-guard-fired-over-sex-claims/story-fnk1w5xw-1227472133028

[10] http://www.theaustralian.com.au/national-affairs/barely-trained-casual-workers-in-detention-centres/story-fn59niix-1226162503766

[11] http://www.smh.com.au/business/transfield-soars-as-12b-detention-contract-win-gives-shares-80m-lift-20140224-33bkf.html

[12] https://www.documentcloud.org/documents/1689988-moss-report-review-conditions-circumstances-nauru.html 21.

[13] https://www.documentcloud.org/documents/1689988-moss-report-review-conditions-circumstances-nauru.html

[14] http://tgm-serco.patarmstrong.net.au/; and http://insidestory.org.au/a-hidden-harm-of-australias-asylum-system

[15] The Border Force Act 2015 makes it a crime (with limited exceptions) for non-Department of Immigration contractors working in Australia’s offshore detention centres to disclose any information obtained by them while doing that work: http://www.abc.net.au/news/2015-07-16/bradley-border-force-act-why-do-we-need-these-laws/6623376

[16] http://www.asx.com.au/asxpdf/20121022/pdf/429jyh4cfg4wvx.pdfhttp://www.asx.com.au/asxpdf/20130523/pdf/42g1vx4lnzrsn0.pdfhttp://www.asx.com.au/asxpdf/20121129/pdf/42bl91mzcdt3fw.pdfhttp://www.asx.com.au/asxpdf/20131004/pdf/42jtrgy44nhywd.pdfhttp://www.asx.com.au/asxpdf/20150805/pdf/4309l0fl5q3773.pdf

[17] http://www.afr.com/news/politics/national/hesta-decision-to-dump-transfield-marks-turning-point-for-shareholder-activism-20150821-gj4li6

[18] http://www.smh.com.au/business/banking-and-finance/hesta-dumps-transfield-citing-detention-centre-abuses-20150818-gj218u.html

[19] http://www.smh.com.au/business/melbourne-mum-taking-on-transfield-over-children-in-detention-20150918-gjppk1.html ; and email correspondence with the author from Telstra super dated 21 September 2015.

[20] Shares are held and managed by Allan Gray Management Australia Pty Ltd on behalf of these superannuation funds (http://www.asx.com.au/asxpdf/20140117/pdf/42m5jq3lsmqldp.pdf)).  Cbus’s investment in Transfield, represents around 0.3 percent of its Australian equities portfolio. Cbus states they “are continuing to monitor the situation, through discussions with our external investment managers and the Australian Council of Superannuation Investors (ACSI)” and that they have “also been directly engaging with the company and intend to continue this engagement.” (email correspondence with the author dated 21 September 2015).

[21] VicSuper confirmed by email with the author that while Allan Gray does not hold Transfield shares on their behalf, they own shares through an index fund.

[22] http://www.asx.com.au/asxpdf/20150326/pdf/42xjl3pbp0f5k2.pdf

[23] http://www.asx.com.au/asxpdf/20150504/pdf/42ybvbf6p1vjhb.pdf.  Perpetual refused to confirm or deny this when contact by email by the Author.

[24] http://www.asx.com.au/asxpdf/20140401/pdf/42nr9112dftmzf.pdf

[25] http://www.asx.com.au/asxpdf/20141127/pdf/42v2q77z73gwcx.pdf

[26] Unisuper advises this portfolio is currently being sold down (email correspondence with the author dated 22 September 2015).

[27]http://www.asx.com.au/asxpdf/20140401/pdf/42nr9112dftmzf.pdf.

[28] For example, Sunsuper in email correspondence with the author stated that “Sunsuper has a very small investment (less than 0.001% of the portfolio) in Serco via one passively managed mandate. This equates to less than $200,000, which is not substantial under any definition.”