Group 4 Securicor

Last edited by crocodyl on June 2, 2009 - 1:00pm
Company Snapshot: 

Group 4 Falck A/S is the world’s second largest security services provider and the industry's largest employer, with more than 230,000 employees in more than 85 countries. With its 2002 acquisition of the Wackenhut Corporation, Group 4 Falck has increased its profit margin by 40 %, almost doubled the number of its employees, and increased its market share dramatically. Securitas (www.securitas.com.) still claims to be the largest security company in the world.

Corporate accountability
Accountability overview: 

Some critics charge that Group 4 Falck’s role in privatization -- and the mismanagement of privatized sectors in itself -- be seen as a corporate crime. Wherever private companies can make a profit, Group 4 Falck is there: schools, prisons, prisoner transport, asylum detention, etc.

The ultimate holding company of Group 4 (before it merged with Falck) was based in the Dutch Antilles, a tax haven (The Guardian, 15/11/99). Some of Group 4 Falck’s plans for promoting the public good while privatizating public services are illustrated by a quote from its Annual Report:

"However, Group 4 Falck considers its most important social responsibility to be ensuring that the company has a good and sound financial position and preserves the ability to generate growth and create jobs.’

Environment and product safety: 

Facilitating environmental destruction
Group 4 [www.group4.co.uk/resources/pdf/kazakhstan.pdf guards] the oil and gas fields for various companies, including Exxon Mobil and British Gas in Kazakhstan, in the Caspian Region. The exploitation of these fields has already [www.eia.doe.gov/emeu/cabs/caspenv.html caused] massive environmental damage. Wackenhut is [www.wackenhut.com/services/wsi/contracts.htm responsible] for guarding the Nevada nuclear bomb test site.

Human rights: 

Asylum and racism
Campsfield House is the UK's largest immigrant detention center, holding around 200 detainees (more than 80% of whom are asylum seekers). The detainees are held without charge, time limit, or proper access to legal representation. The center operates like a high security prison for people coming to the UK seeking political asylum. Both activists and government officials have criticized the detention center repeatedly , both in principle, and for the way Group 4 is managing it.

Official reports on Campsfield in 1995 and 1998, by two different inspectors, found fear, boredom, and stress among the inmates. In 1994 rioting broke out in Campsfield during which six prisoners escaped. In May 1995, following consultation with the Home Office, Group 4 set up the UK’s first "private riot squads" to deal with future disorder at immigration detention centers.

In August 1997 the conditions of Campsfield erupted into a riot after detainees thought that an inmates was being strangled by a Group 4 employee. According to critics, the ensuing trial collapsed because of the lies of the Group 4 guards. Campsfield is due to close soon. The whole debacle is covered in Corporate Watch Issue 8. www.corporatewatch.org.uk/magazine/issue8/cw8g4.html In February 2002 a fire that broke out at the Yarls Wood Detention center in Bedfordshire destroyed half of the newly built center, causing around £35 million in damages. Group 4 had ignored the fire brigade's very strong warning that a sprinkler system should be installed before the center was opened. Group 4 blamed inmates but the cause could be established, at least in part because the Home Office deported many, if not all, of the witnesses who could have testified on the accused behalf. There have been many associated reports of staff brutality and allegations that guards prevented detainees from fleeing the fire. Group 4 refused liability for the fire and demanded that the Home Office (the taxpayer) foot the bill.

With Wackenhut, Group 4 further increased its market share of immigration-related services. Wackenhut runs the Tinsley House detention center at Gatwick Airport and Dungavel detention center in Lanarkshire, through its subsidiary Premier Detention Services. Wackenhut also holds the contract to transport immigration detainees between centers and refugees to dispersed housing, and is planning to build a secure transit camp at Great Gransden in Cambridgeshire. In 2002, 40 people imprisoned in Dungavel immigration detention center held a day of non-compliance to protest conditions in the center; two inmates have committed suicide. There are also complaints about inadequate medical care and the fact that children as young as six months old are held at the center.

Group 4 has also been accused of discrimination against job applicants. Harbhajan Birdi’s job application was at first rejected. When he resubmitted an identical application changing his name and nationality to John Smith, British, he was shortlisted for interview. Birdi accused Group 4 of racism. An Industrial tribunal later upheld his racial discrimination claims. Group 4 agreed to an out-of-court settlement.

The above is by no means a comprehensive overview of Group 4 Falck’s worldwide involvement in practices surrounding racism and asylum issues. In Belgium, for example, Group 4 Securitas searches for immigrants hidden in lorries bound for England.

Outsourcing Education

The outsourced education market is worth more than £2.5bn.30 Group 4 Falck is mostly cashing in on the privatization of education through Ensign, a joint venture with Tribal Group. Tribal group provides support services and training to the education sector. It owns SfE, an online education provider that covers around 70% of secondary schools, and provides online training to some 20,000 teachers.

Ensign bids for contracts to intervene in poorly performing local authorities. Ensign withdrew its bid for a contract in Waltham Forest after it was alleged to have offered to pay two consultants working for PPI £5,000 if the bid was successful. PPI is owned by Tribal and provided management support to Waltham Forest.

When Henry Pitman of Tribal Group was asked about the suitability of its partner in Ensign, he told the Financial Times that its experience with young offenders would be useful. “They have a lot of experience in dealing with difficult pupils” (Financial Times, 16/5/01).

In education, Group 4 won a £12 million contract in 1996 to administer the inspection of up to 20,000 nursery schools and playgroups participating in the then Conservative government’s controversial nursery voucher scheme. The NUT and teachers groups were skeptical about Group 4’s suitability. Group 4 Managed Services now does the annual inspection of and reporting on educational provision at more than 8,000 nurseries on behalf of Ofsted.

Group 4 Falck had a £12 million PFI contract with Wiltshire County Council to build and operate a secondary school in Chippenham, including support services such as catering and sports facilities, and extensions to two other secondary schools.

Prisons and prisoner transport
Group 4 Falck runs three prisons in the UK on behalf of the Prison Service: HM Prison Wolds in East Yorkshire, HM Prison Altcourse in Liverpool, and HM Prison Rye Hill on the Warwickshire/Northamptonshire border. It also runs two juvenile prisons: Medway Centre and Onley. In 1999 Group 4 Falck's prison and escort services earned £86m a year. When Group 4 became the first company to take on private prison escort in the UK, it lost seven prisoners in one week.

Juvenile Prisons (The Medway Centre and Onley) Britain’s first child prison (12-17 year olds), The Medway Centre, is run by Rebound ECD (Education Care and Discipline), a subsidiary of Group 4 Falck. Rebound also runs a child prison (12-14 year olds) at Onley, Northamptonshire.

A report on the Medway Center, published in 1999 by the Social Service Inspectorate (SSI), found that in up to 150 incidents per month, staff were using unauthorized methods to restrain the inmates. The unauthorized neck and wrist locks used by the staff are against medical advice and the center's own rules. Social services has also criticized Medway Centre for using excessive force when trying to contain a riot.

The special education programs were reported to have "simply failed," and it was concluded that the center was more likely to strengthen criminal behavior than to lessen it. A fine of £68,000 was imposed at Medway for failure of service and £ 638,000 was withheld for services not provided at Medway and Wolds.

HM Prison Lectors (Liverpool): The Altcourse prison in Fazakerley, built under the PFI, recovered all its costs within two years for the Group 4 Securitas and Tarmac Construction lead consortium, and will provide 23 years of profit from running the prison. The huge profitability is largely owing to a refinancing deal that increased the expected return on capital from 13% to 39%. The high profits are not reflected in the level of services. The company has received £28,000 in fines for failure of service at Altcourse.

HM Prison Buckley Hall: The prison Buckley Hall was returned to the public sector after five years of management by Group 4. The reason was said to be that the prison service bid was more cost effective and provided higher standards of safety and security. In the early days of Group 4 running the prison, the company was criticized by the Prison Reform Trust for staff shortages and inexperience. Group 4 managers form Buckley Hall were offered new jobs at the child prison at Onley.

Prisoner Transport: In May 1993 drunk prisoner, Ernest Hogg, choked on his own vomit while in the care of Group 4 Court Services. Hogg lay unconscious and unnoticed in the back of a prison van for several hours before he died. The Home Office suspended the operating certificates for six Group 4 staff who were later found guilty of “lack of care."

Anti-competitive and consumer protection: 

Group 4 was at the center of a corruption scandal at the European Commission in Brussels. It was alleged that because Group 4 was allowed to change its bid after the submissions deadline, was it able beat the 12 other companies competing for the contract to run the commission’s security. The commission's investigation into the matter found "strong circumstantial evidence" that the bid had been manipulated. After Group 4 had secured the contract, it changed the terms and conditions to increase profits. It later admitted to overcharging inadvertently.

The Group 4 spokesperson tried to blame the managers of the security services at the commission, saying they were a bunch "nasty and very right-wing Belgians." For example, they made Group 4 put ghost workers on its payroll (something Group 4 does not deny). In this way retired Belgian police officers were given second careers in the European security services. In response to these allegations, a Group 4 spokesperson stated that "we were told to hire these people by the managers of the security service, so we did."

Political influence (national and international): 

The Wackenhut subsidiary was formed by a former FBI agent, and the company’s middle and upper management is packed with former members of the CIA, FBI, and US military. The company has many high profile contracts with the US government, including contracts with NASA.

History

Group 4 Falck is better known in the UK as Group 4, a name which some associate with incompetence and failure. Group 4 Falck was created in 2000 by the merger of Group 4 Securitas (International) B.V. and Falck A/S. The companies were both formed in the beginning of the 20th century in Denmark, when Philip Sørensen and Marius Hogrefe founded the guarding company København Fredriksberg Nattevagt (1901), and Sophus Falck established Redningskorpet for København og Fredriksberg A/S (1906).

Redningskorpet for København og Fredriksberg A/S, which later changed its name to Falck, started off providing guarding, ambulance and fire engine services. In 1988 the Falck family sold the company to Baltica, a Danish insurance company, that went on to sell off 55% of Falck to a number of other major insurance companies. During the 90s Falck expanded in Europe by acquiring several companies (Patena Security in Sweden, Falken in Norway, SIMIS in Germany, Sezam Sp. z o.o. of Poland, AS ESS, a security operator with companies in all Baltic states, and Nederlandse Veiligheidsdienst (NVD), the largest security operator in the Netherlands).

In 1950 the Sørensen family established itself in the UK. At this time, all its companies were managed under the name ‘Securitas International’. In 1963, Store Detectives Ltd and Securitas Alarms Ltd, were set up by the family in the UK. Jørgen Philip Sørensen was appointed managing director of the UK part of the group in 1965. The UK part of the business was organised under the name Group 4 from 1968 onwards.

In 1981 the activities of the Sørensen family were split up into Securitas AB (the Swedish activities) and the Group 4 group (the rest of the European activities). Group 4 moved on to expand to several countries all over the world (India, United Arab Emirates, Ukraine, Turkey, etc). In 1990 the group acquired American Magnetics Corporation which specialises in access control systems. This helped Group 4 Falck to win the highly prestigious contract to handle security at the Pentagon.

Group 4 has been one of the benefactors of the UK privatisation policy during the 90s. In 1991, it got the first contract to manage the UK’s first privatised prison, Wolds in Humberside. British Gas also started a joint venture with Group 4 to provide meter reading to more than 19 million customers (they work together under the name Accuread).

After the merger of Group 4 and Falck in 2000, the expansion continued with several acquisitions (ADS (Germany), SOS (Austria), SPAC (Finland), BOS (Czech Republic), Unikey (Norway) and Banktech (Hungary)). The year 2001 was a good one for Group 4 Falck with an increased turnover and a 20% increase in profits. This was thanks to the growth in the markets in Indonesia, Kazakhstan and the republics in Central Asia (especially in the oil and gas sector). It also acquired the security company Euroguard (France). In 2002 Group 4 acquired the Wackenhut Corporation (US) and increased its profits further still.

Its acquisition of the Wackenhut Corporation adds a new and disturbing section to Group4 Falck’s corporate history. Formed in 1954 by former FBI agent George Wackenhut, its first major coup was the collection of two million files of US citizens implicated in the McCarthyite witch hunts of the 1950s. In the 1970s the company was implicated in supplying chemicals for weapons to Iraq Since then it has diversified into incarceration and other areas of security. The resale of part of the Wackenhut Corp. - Wackenhut Corrections - appears to signal a move out of incarceration and back to the company's ‘core’ security and safety business. Given the company's record in private prisons, campaigners will certainly hope this is part of a wider trend.