- Created: Tuesday, 02 August 2016 14:23
- Written by Ashley Wilkinson
The Robocop movie franchise is set in a dystopia where a megacorporation (OCP or Omnicorp) forces through the privatisation of virtually every aspect of government. We have another case of life imitating art: G4S.
G4S seem to be repeatedly in the press for one debacle after another. In 2011 keys capable of opening every door at Birmingham Prison were lost. In the US, G4S guards allowed an 82-year-old nun and two accomplices to break into a nuclear weapons facility (ground zero for the Manhattan Project and the sole facility in the USA for storing enriched uranium) and wander around for two hours daubing walls with slogans and blood. Numerous other incidents include two G4S armoured vehicles hijacked on an inside job in Kenya; an ex-guard robbing cash machines with codes he learned at the company; and a member of a five-man armoured-car crew shooting the other four and making off with the cash in Canada.
Chatting about the Australian market with City analysts, former G4S Chief Executive Nick Buckles (whose hero is Margaret Thatcher) gave a glimpse into the mechanics of their success: ‘we haven’t had a good run recently on care and justice’, but, crucially, ‘there are only two or three major players, typically sometimes only two people bidding for care and justice. And with… our global expertise, in time we will become a winner in that market because there are a lot of outsourcing opportunities and not many competitors operating down there’.
The Public Accounts Committee (the House of Commons spending watchdog) warned that a small number of ‘quasi-monopoly’ private contractors dominate public services: G4S, Serco, Atos. Their size allows them to weather the upfront demands of the procurement process, which forces out small- to medium-sized companies; so much for free competition.
Buckles was popular with the City after the merger of Securicor and Group 4 Falck in 2004: they had six consecutive years of revenue, profit and dividend growth. But Buckles suffered from Icarus syndrome. In 2011 his attempt to buy a giant European/Danish cleaning and facilities management firm, ISS in a £5.3bn takeover, fell apart. Had it been completed, it would have increased G4S’s leverage to more than three-times earnings and reduced security revenues from 82% to 42% of total revenues. Not to mention the challenge of integrating 1.2 million staff across 100 countries, with ISS having made about 600 acquisitions of its own over the previous decade. Investors sunk the deal, and felt ‘genuine hurt’ that Buckles had trusted investment bankers rather than them.
Buckles survived (the chair Alf Duch-Pedersen was sacrificed instead), but continued to be ebullient. G4S had taken on the London Olympics job in 2010 to provide 2,000 guards. By the end of 2011 the government realised they’d need over 10,000 guards, and with a contract value of £284m, Buckles and G4S accepted the challenge. Finally, 16 days before the Games opening ceremony, they had to admit that 7,000 would be their limit, and the government had to plug the gaps with 3,500 soldiers. Buckles had to stand before Westminster politicians and accept on camera that it was ‘a humiliating shambles’. They even donated £2.5m to the armed forces as a gift.
He’d upset the shareholders and politicians, but ultimately it was City financiers who brought about his downfall - he’d promised a 7% margin, then later admitted it would be lower. This sent shares plummeting by almost 15%. It was three strikes and out for Buckles. He stood down in 2013.
In his final year the 52-year-old was paid £1.1m, plus £830,000 in lieu of notice, plus £48,000 for ‘outplacement advice and services’. G4S even gave him a leaving present valued at £12,890. Then there is his £10m pension, the £5.5m shares, and the £19m shares in a tax avoidance device (legally sanctioned). In the 12 months after sacking him, G4S continued to line Buckles’ pockets with approximately £70,000 a month in ‘basic pay’, and a ‘cash allowance in lieu of pension’ taking the total to almost £100,000 a month, plus car allowance and private medical insurance. Private Eye pointed out that while G4S paid out £215,000 to families of employees killed or injured on the job in 2011, the same year they gave Nick Buckles £13.7m.
This tale of incompetence only shows one aspect of G4S, however. There are in fact some things they excel at; the most obvious being institutional racism.
According to immigration barrister Frances Webber, Britain has a ‘system of institutionalised inhumanity’ designed as a deterrence, not assistance, for those fleeing conflicts (conflicts that Britain or its privatised armies are usually involved in). She describes ‘a monstrous regime of bare subsistence and a deterrent system of coercion, control and stigmatisation’. G4S is increasingly in charge of administering this system.
A 2008 medical justice report detailed numerous cases of mistreatment and abuse of immigration detainees. Guards deporting asylum seekers and foreign national prisoners were witnessed by government inspectors talking about their detainees in ‘a shamefully unprofessional and derogatory’ manner using ‘offensive and sometimes racist language’ such as referring to ‘gypos’, ‘pikeys’, and ‘typical Asians’. Handcuffs and restraints were used inappropriately, for example on detainees who were simply upset or were moving too slowly for the guard’s liking, as well as use of techniques called ‘Goose Neck’ and ‘Nose Control’. There were allegations that a criminal record was no bar to employment and one immigration detention centre was caught falsifying documents to repatriate a man who had a perfectly legitimate claim to political asylum. It makes you wonder how many times they didn’t get caught.
In 2010 there were over 770 complaints from immigration detainees. A Zimbabwean asylum seeker had his wrist broken by G4S while being flown out of the country. He claims to have been punched and kicked by guards while he was restrained by handcuffs and leg-locks, then had his wrist twisted behind his back to breaking point. He said ‘these escorts are evil, they are really evil. They do these things to you and then the whole thing is covered up so that they get away with it’.
In 2011 G4S was involved in the death of a detainee in Australia. This time they were found culpable. The magistrate said they could have easily implemented simple safety changes that could have prevented the death of this Aboriginal elder, Mr Ward. The following year, guards used ‘substantial force with significant risk to the unborn child’: a pregnant woman in a wheelchair was tipped up and had her feet held as she was forcibly removed from the UK.
In 2014 it was found that detainees were paid as little as £1 an hour to cook and clean. Home Office figures showed in one month detainees in centres run by G4S, Serco and other contractors worked nearly 45,000 hours for a total of nearly £45,500. The detainees are not allowed to have proper jobs at the minimum wage, but must pay for essential goods such as toiletries.
That same year three guards were cleared of wrong-doing in the death of Angolan Jimmy Mubenga after a six-week trial. He had arrived in the UK with his wife in 1996. In 2006 he was jailed for a nightclub brawl and faced deportation, which was due in 2010. Mubenga became agitated on the flight after a phone call. Guards cuffed his hands behind his back and forced him down in his seat leaning forward. Four passengers witnessed the guards keep him like this for over half-an-hour while Mubenga continually complained he was unable to breathe, and shouted at the passengers ‘what kind of people are you that you do nothing?’. He passed out shortly after shouting ‘I can’t breathe’, and suffered a fatal heart attack. The guards were arrested but denied pinning him down in a position which affected his ability to breathe. They also insisted they never heard him shout that he was struggling to breathe. An inquest jury concluded in 2011 that this was an unlawful killing, and the three men were prosecuted.
Racist, homophobic and misogynist texts were found to have been exchanged between the guards, as well as reference to ‘carpet karaoke’ - the very practice of forcing down a detainee’s head and restricting their breathing. There was a series of racist jokes targeting blacks, Pakistanis and Muslims. One of the texts said ‘fuck off and go home you freeloading, benefit-grabbing, kid-producing, violent, non-English speaking cocksuckers and take those hairy-faced, sandal-wearing, bomb-making, goat-fucking, smelly raghead bastards with you’.
The coroner commented that ‘the potential impact on detainees of a racist culture, is that detainees and deportees are not “personalised”. This may, self-evidently, result in a lack of empathy and respect for their dignity and humanity potentially putting their safety at risk’.
The judge refused to allow evidence of ‘reprehensible conduct’ arguing that this would ‘release an unpredictable cloud of prejudice on the trial’. Showing off his deductive powers, the judge added that the texts could not be admitted because they would offend and affect the judgement of women and gay people in the jury. No, it doesn’t make sense to me either.
- 1901 A cloth merchant in Denmark founded a 20-man guard company called Copenhagen-Fredriksberg Nattevagt (Nightwatch). The company accountant, Julius Philip-Sorensen, acquired the business. Denmark kept out of the First World War and profited from dealing with both sides.
- 1950 The Sorensen family consolidated its businesses as Securitas International. Julius Philip-Sorensen died a wealthy man in 1956, as the family moved into the British market.
- 1965 Jorgen Sorensen appointed managing director of the UK business.
- 1968 Four British businesses merged into Group 4 under Jorgen Philip-Sorensen (third generation). Acquired armoured-car and cash-management businesses.
- 1980s Moved into South Asian markets and the Americas
- 1990 Acquired American Magnetics Corporation, which specialised in access control systems, helping Group 4 Falck win the contract to handle Pentagon security. The firm pioneered private prison and prisoner escort business.
- 2002 Group 4 Falck had 140,000 employees working in 50 countries, generating annual revenues of $2.5bn.
- 2004 Merged with Securicor, barging its way to the top of the industry: 340,000 employees in 108 countries with $7.3bn annual revenues. Rebranded as G4S; share prices rose.
- 2007 Entered FTSE 100 and since then have made at least £1bn worth of acquisitions, including Cotswold Group (UK market leader in surveillance, fraud, analytics, intelligence and investigations services) and Chubb Emergency Response (UK’s leading key-holding and response services).
- 2011 Shareholders blocked an attempt by G4S directors to acquire Danish cleaning giant ISS for £5.2bn that would have made G4S the largest employer in human history but entailed borrowing £3.7bn.
- 2014 worth £3.8bn
- 2016 G4S has 623,000 staff in 110 countries, revenues of £6,683m from the previous year and is now planning to open high street banking units in the UK, Netherlands, Cyprus, Greece, Belgium and Ireland.