The report, by the Prison Reform Trust, will be presented to Michael Howard, the Home Secretary, next month in an attempt to make him reverse his free market penal policy.
It examines the history of US security companies in Australia and finds privatisation has brought secrecy, death and riots. American firms moved into Australia in 1990, two years before the same companies were allowed to begin taking over British jails.
Queensland was the first Australian state to privatise jails. It gave the management contract for the Arthur Gorrie Remand Centre, near Brisbane, to a consortium which included the Florida-based Wackenhut Corporation.
Since privatisation in Queensland, Wackenhut managers have seen five deaths in custody, 'riots, fires, a drug overdose and allegations of serious assaults and rapes,' the trust says.
The most serious riot was in May 1993, when prisoners in the 380-bed jail caused hundreds of thousands of pounds worth of damage. Laurie Gillespie, spokesman for the Queensland Public Services Federation, said at the time that the riot followed 'a beating, a pack rape, a burning and two suicides' in the jail. Managers have admitted that their staff have been forced to use tear gas to maintain order.
Mr Gillespie claimed that the old state prison the Wackenhut jail replaced had been far calmer and seen far fewer deaths. This summer Mr Howard gave Wackenhut the pounds 10m contract to manage Doncaster jail in Yorkshire. There have been two deaths and several mini-riots since.
The trust was particularly concerned by the secrecy surrounding Wackenhut's operations in Australia. At the inquest into the death of Michael McNeil, the first prisoner to die in the Queensland jail, the coroner ruled that questions could not be asked about the secret contract between the state government and the private company because they were commercial confidences.
Labour MPs in Britain have complained repeatedly about the difficulty of getting Parliamentary answers about the behaviour of private prison companies in Britain.
They have said that privatisation and the decision to turn the Prison Service into a 'next step' agency at arm's length from the Government have made ministers less accountable for the state of British prisons.
A second US company which is also involved in Britain - Corrections Corporation of America (CCA) - was part of a consortium awarded the contract to run prisoner escort duties in the Australian state of Victoria in April 1994.
The CCA guards were meant to be armed, but only two of its 54 officers passed the local police's firearms test.
There have been several scandals. One officer walked away from a prisoner he was meant to be guarding in a witness box. 'I am now leaving. My eight hours are up,' he told the court. Another allowed himself to be handcuffed to the railing in an lift while the prisoner rode the elevator up and down until police officers overpowered him.
CCA is part manager of the Blackenhurst private jail near Redditch in the the West Midlands, a prison which has one of the worst records of disorder in Britain.
'The be haviour of private companies in the growing global prison market shows that there is little this country can gain from privatisation,' said Stephen Shaw, director of the Prison Reform Trust.
'Their appalling record should persuade Mr Howard to abandon his free market dogmas and reverse the privatisation of British jails.'
Mr Howard wants to give 12 British jails to private security companies to run by 1996.
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