Brisbane company paid $1.4bn to run offshore processing on Nauru despite no arrivals since 2014
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A single company running Australia’s offshore processing regime on Nauru has been paid more than than $1.4bn over the past five years, with an additional $221m added two months ago, despite no new asylum seeker arrivals on the island since 2014, and a steadily diminishing number of people it is responsible for.
The original contract awarded to Canstruct was worth just $8m in October 2017 but this was amended almost immediately – increased by 4,500% to $385m just a month after being signed.
Since then, government figures show, six further amendments have escalated the cost to taxpayers to $1.419bn, a total increase of more than 17,600%.
Related: Deported to danger and death: Australia returns people to violence and persecution
The latest amendment to the contract was in January this year, for another $221m, to continue to operate on the island until the middle of 2021.
It now costs Australian taxpayers a little over $10,000 every day for each one of the 115 people people held on Nauru.
Canstruct said it was contractually restricted from responding to a series of questions from the Guardian about the latest amendment. The Department of Home Affairs said Canstruct “continues to provide garrison and welfare services to the regional processing caseload”.
Canstruct had helped build the Nauru “regional processing centre”, and took over the running of the centre from Broadspectrum, which had endured years of negative publicity for its management of the centres, in 2017.
Canstruct, a Brisbane-based company and Liberal party donor, won the contract by limited tender, meaning there was not an open and competitive process to secure the initial contract. The auditor general criticised the process, saying “it is not clear why the department could not have secured a replacement supplier using a more competitive procurement method”.
Since the initial $8m commitment, the contract has been increased to $1.419bn through seven amendments, a process which allows contracts to be dramatically increased with little public scrutiny or competitive tender.
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The Nauru processing centre became an open centre since 2015, and all refugees and asylum seekers were physically moved out in 2019. About 115 refugees and asylum seekers sent by Australia remain on Nauru. They cannot leave the island.
The processing centre was plagued by controversy, including allegations of violence against asylum seekers and refugees, systemic sexual abuse of children, inadequate medical and psychiatric care, and a spate of suicides.
The Nauru files, a cache of leaked internal working documents written by staff, detailed reports of sexual violence against children as young as six, assaults, and systemic neglect. Separate statements from senior United Nations officials said the Nauru camp was “cruel and inhuman” and a violation of the convention against torture. Médecins Sans Frontières said the mental health suffering on Nauru was “among the most severe MSF has ever seen”.
Australia’s home affairs department said it remained committed to regional processing and was working with Nauru to establish an enduring regional processing capability in that country.
Nauru is one element of Australia’s offshore processing regime. In total, government figures show offshore processing cost Australian taxpayers more than $9.2bn between 2013 and 2020.
Paladin – a company headquartered in an island shack and with no experience with major contracts – received more than $500m of government money to provide garrison services at Australia’s processing centre on PNG’s Manus Island without the contract going to open tender. In a scathing report, the auditor general found the taxpayer did not get “value for money”.
The Manus centre was ruled illegal by the PNG supreme court, and the Australian government agreed to pay $70m in compensation to those held within it.
But the Australian experience, of increasingly large contracts being awarded – often with little oversight or public scrutiny – to private companies to discharge states’ responsibilities towards migrants is part of a broader global trend.
A new report from the Transnational Institute and Stop Wapenhandel, Financing Border Wars, argues an emerging global “border-industrial complex”, aided by increasingly tight relationships between government and the corporations outsourced to provide detention “services”.
The report finds border and surveillance industries have grown dramatically in recent decades, fuelled by escalating budgets for immigration control. The US budget for border security has increased by more than 6,000% since 1980.
Related: Australia’s offshore processing policy has made the world less safe, not more
And increasingly, defence companies and weapons manufacturers have become deeply embedded in the border industry, with deterrent measures being externalised beyond actual border controls through artificial intelligence, biometric technology, autonomous land and sea border surveillance robots, offshore incarceration, and physical turnbacks of asylum seekers.
Dr Sara Dehm, lecturer in the faculty of law at the University of Technology Sydney, argues the privatisation of Australia’s immigration network had had two key effects: the increasing use of public funds to generate profits for private companies, and the devolution from the state to private contractors of practical responsibility for “delivering … services” to asylum seekers.
Dehm said the trend towards privatisation, and the channelling of public money to for-profit companies, had “implications for public accountability”.
“And a border-industrial complex that sees detaining refugees, asylum seekers and criminalised non-citizens as a source of profit entrenches particular infrastructures and mentalities as to how these structures and centres are run. It treats people as commodities and their detention as a source of income.”