• Drugs and mobile phones were "freely available" and smuggled in by prisons guards
• Inmates were unsupervised for hours, and staff were caught playing table tennis and pool.
• Report makes 21 recommendations for prisons, all of which have been accepted by Govt
A damning report on Serco's management of Mt Eden Correctional Facility will not spell the end of privately run prisons or further contracts for Serco, the Government says.
Prime Minister John Key and Corrections Minister Judith Collins reiterated today that the British-based company's failings at the jail - which were laid bare today in a long-awaited report by the chief inspector - did not reflect badly on all privatised prisons.
Serco's 25-year contract to run another prison at Wiri in South Auckland will not be affected and the Government could not rule out rehiring Serco to run the Mt Eden jail again in future.
"I don't think you can say simply because one contractor has done a bad job somewhere you should end it," Key told reporters in Christchurch.
"Philosophically, I think there's a place both for private and public prisons and they hold each other to account."
Collins highlighted the chief inspector Andy Fitzharris' finding that violence had been observed at the Mt Eden jail before Serco took over, in 2009.
"These fights clubs ... were being run by the same prisoners who did the same when Corrections ran Mt Eden," she said.
As part of his investigation, Fitzharris also looked at eight publicly-run prisons but found no evidence of the organised fighting which was witnessed at Mt Eden.
In stark contrast to the Serco-run MECF, potentially violent incidents were detected, shut down quickly and reported, he said.
Collins suggested that the contrasting findings about private and public prisons could partly be the result of lack of evidence, rather than an absence of violence.
But she was highly critical of Serco for allowing the violence to take place, and said it was "very concerning" that the Corrections monitoring system was "not up to scratch".
Collins said she would ask the State Services Commission to give her greater ministerial oversight, which would give her access to draft investigations.
The report found that when Corrections officials uncovered organised fighting within the remand prison, a draft report was completed but was not brought to the attention of chief executive Ray Smith for eight months.
"That's totally unacceptable," Collins said.
Prison monitors, which were heavily criticised in the report, could also be given greater powers.
The Government's response, which included accepting all of Fitzharris' 21 recommendations, did not go far enough for Opposition parties.
Labour and Greens renewed their calls for an end to privately-run prisons and to Serco's contract at Wiri.
"The report just confirmed all of the failures that we said Serco would suffer," Green Party co-leader Metiria Turei said.
Labour MP Kelvin Davis said it was now clear that private prisons "had no place in New Zealand".
The report was "an appalling indictment" on privatisation, he said.
""The fact staff were the most likely suspects as the main source of contraband isn't surprising.
"What is surprising is the lack of security around staffing rosters where no staff were present or were playing pool or table tennis while inmates engaged in violent attacks."
Weekly fight clubs
The report, which Serco unsuccessfully challenged in court, reveals weekly "fight clubs", "freely available" drugs and cellphones smuggled in by prison staff, and negligent guards who may have missed violent behaviour because they were playing table tennis and pool within the jail.
It said inmates at the remand prison went unsupervised in unlocked cells for up to two and a half hours, partly because of a rostering system which wrongly said people were on duty when they were sometimes on leave or had resigned.
With no CCTV in prison cells, Fitzharris concluded that there was "ample opportunity" for organised fighting in the privately managed prison.
"The lack of an effective control environment ... including in particular insufficient staff on the floor provided prisoners with opportunities to participate in organised fighting and other illicit activities," he said.
"Senior gang members were able organise regular fighting in MECF cells without the knowledge of staff."
The report said it was "likely" that staff were the primary source of contraband at the jail and that it was "freely available".
"Prisoners talked freely about the availability of contraband at MECF and numerous prisoners gave statements to the effect that 'If you could fit it in an ice cream container it could be smuggled in'."
The report recommended widespread changes to the way the prison was run and monitored and to the way private contracts were monitored.
Serco apologises for performance
Serco's Asia Pacific chief executive Mark Irwin said this morning that the company had accepted all of the inspector's recommendations "in full".
He also apologised for the company's performance at the prison.
"In 2015 certain important areas of service delivery fell below levels which our customer, the Department of Corrections, the Minister of Corrections and the people of New Zealand had a right to expect, and for that, we are truly sorry."
"Important lessons have been learnt, and we have paid the Crown $8m recognising this and the costs incurred by the Department in taking over the management of the prison in July 2015."
Irwin said MECF was a "very challenging" prison to manage.
As the chief inspector observed in his report, the jail had a large proportion of high-risk prisoners, and high turnover as the result of its large remand population.
Serco said MECF had "performed well" from the beginning of its contract in 2010 until 2014, lowering the rates of self-harm and violence.
Corrections minister responds
Corrections chief executive Ray Smith said this morning that Serco had been held to account for its failings.
The department "stepped in" and began managing the prison in July, and confirmed in December that Serco's contract would not be renewed.
Its contract was for 10 years, but the department ended it at a break-point after six years.
Serco paid $8 million to cover the costs of Corrections stepping in and for failing to reach performance targets. It also missed out on performance bonuses worth $3.1m.
"From time to time the management of prisons can fail, be they public or privately operated," Smith said.
"It's important that we learn from these experiences to make the Corrections system stronger."
Smith said he had gone beyond the recommendations in the report by placing extra prison monitors at the other Serco-run prison, Auckland South Corrections Facility.
In all, the inspector identified 12 "sparring" incidents at the Mt Eden jail over a one-month window last June-July, and up to seven organised fights over a similar period.
"Some incidents of organised fighting were of significant duration, involving multiple 'rounds' of fighting between participants, and multiple consecutive fights," the report said.
"On occasions the victor of the first fight would immediately fight a subsequent challenger."
Prisoners who refused to participate were threatened or "pack attacked" by gang members including senior members of the Killer Beez, Head Hunters or Black Power.
Some inmates were so badly injured in the fighting they were hospitalised, for injuries ranging from brain damage to broken limbs.
The report was especially critical of Serco's staffing.
"A review of CCTV footage highlighted that there were instances where no staff could be seen in some units for extended periods, in one case of up to 2 hours and 34 minutes while prisoners were unlocked and left unsupervised.
"Because CCTV cameras do not operate in cells, this meant that organised fighting in cells could occur undetected.
"In some cases staff present in a unit were observed from CCTV footage failing to undertake an active role in supervising prisoners - for instance staff were observed playing pool or table tennis.
"This lack of active supervision may have allowed organised fighting to occur even while these staff members were present in the unit."
Despite some incidents meeting the threshold for serious assault, Serco reported them to Corrections as "accidents", or not at all, the report said.
Further incidents were likely but could not be observed because Serco deleted its CCTV footage after 14 days, which the report noted was standard practice.
A 'difficult' relationship
The report, which was delayed after a legal challenge by Serco, also slammed the Corrections Department for its failure to detect the incidents through its official monitors.
It described a "difficult" relationship between Corrections monitors and Serco, in which the company often "pushed back" at criticism until the monitors effectively gave up.
Serco's "push back" over issues such as graffiti in cells, homebrew, and disorderly behaviour ended up distracting monitors from core problems at the prison, the report said.
The report found no evidence of the "dropping" of prisoners from balconies - an allegation made in Parliament by Davis.
At the request of Corrections chief executive Ray Smith, the chief inspector broadened his inquiry to other prisons.
The inspector found no evidence of fight club activity at the eight prisons he inspected.