We live in a world where the vast majority of businesses espouses the free market mantra advocated by economists such as Milton Friedman. The Nobel laureate championed the idea that ethics in marketing should be confined to maximising profit for the shareholder. His philosophy took a bit of a buffeting recently as the greatest economic crisis of the post-war era threw up Bernard Madoff-type Ponzi schemes and corporate accounting scandals such as those of Enron and WorldCom. Nevertheless, the lust for profit still prevails over any notion that businesses should balance the interests of shareholders with employees, suppliers, customers, communities and others who have a “stake” in them.
It might seem surprising that a company like Serco should embrace Friedman’s theories so zealously, especially when its CEO, Chris Hyman, insists “Serco is a values-led company with a culture and ethos that is at the heart of everything we do …. We encourage social responsibility and try to treat people in the way we would wish to be treated”. Hyman, an evangelical Christian, attributes Serco’s success to “listening to God”. God’s work apparently includes profiting from the incarceration of refugees in conditions bordering on exploitative and cruel.
Serco is a British-based multinational outsourcing company, specialising in operating prisons and refugee camps. A 2008 Prison Inspectorate report revealed that at one UK prison, Serco management had placed beds in squalid shared toilets to “maximise efficiency”. Two years earlier they were slated for “institutional meanness” when inspectors discovered that many prisoners had no pillows, let alone toilet seats.
Accusations of exploitation have now surfaced at Yarl’s Wood immigration detention centre in Bedfordshire, where female detainees are apparently being paid 50p an hour for menial tasks such as serving food in the canteen and cleaning up after meals. Exempt from the minimum wage under immigration laws, these women often outnumber uniformed Serco staff in the canteen. “It’s really humiliating,” one of them recently told reporters. “It is like slavery in a modernised form. It doesn’t allow you to buy much, just a £5 phone card for a week’s work and maybe some noodles from the shop”. A former detainee has complained about the hypocrisy displayed by Serco and the UK Border Agency: “People who work without papers to try and feed their families are arrested for illegally working and detained. But once they get to Yarl’s Wood they can work for next to nothing. The UKBA and Serco are hypocrites. They are taking advantage of people’s situation.”
So much for Hyman’s claims to “put people first, then customers, then shareholders”. What Serco is engaged in is shamelessly exploiting human misery to enrich its owners.
In February 2010, around 80 women at Yarl’s Wood started a hunger strike, protesting at their prolonged detention and inhumane treatment. Serco officers responded by locking the hunger strikers in a corridor for 8 hours without access to water or toilet facilities. Some were allegedly handcuffed and dragged by guards. Others were subjected to racist abuse. The incident is now the subject of a court case.
Serco’s company slogan: “Bringing services to life” is darkly ironic, given their dismal record for deaths in custody. I could give many examples. I’ll settle for just two. In 2004, 14-year-old Adam Rickwood hanged himself shortly after Serco guards performed a “pain compliance technique” on him after he had refused to go to his locked cell. In the same year, Gareth Myatt, aged 15 and weighing just six and a half stone, was asphyxiated while being restrained at the Serco-run Rainsbrook Secure Training Centre.
Unfettered capitalism is not the answer to the failure of socialism. Friedman was wrong. We have to challenge the premise that companies acting in their own self interest can be kept in check purely by competition in the market and by laws and regulation. Laws are barely a sufficient mechanism for restraining the ruthless greed of companies like Serco. Laws are retroactive. A crime has to be committed before laws take effect. Laws presume the innocence of the accused until guilt is proved beyond reasonable doubt.
It may seem academic to debate the relative merits of shareholders and stakeholders. But we need that debate. We need a battle for the hearts and minds of the next generation of wealth producers. Can’t civilisation and profits go hand in hand? Is there no room for integrity in a market economy? Or are we to continue sleepwalking towards the tyranny of plutocracy?
As for Serco, we need to guard against the guards. The vulnerable need to be protected from the inhumanity of Serco’s profit-crazed practices. We need to guard against the hypocrisy of its CEO.