Corporate Watch : Sodexho : Corporate Crimes
A Corporate Profile
By Corporate Watch UK
Completed February 2004
A Corporate Profile
"Sodexho is committed to the Private Finance Initiative (PFI) and in developing Public Private Partnerships (PPP), both as an FM (facilities management) services provider and as an equity investor." Sodexho UK website58
Without British and American government policies over the last twenty years encouraging the privatisation of public services known as Public Private Partnerships, Sodexho would probably have stayed an inoffensive medium-sized catering company. 'Privatisation', and the lucrative contracts that go with it have turned Sodexho into a multinational giant.
Sodexho greatly benefited from the Conservative government policy for "Compulsory Competitive Tendering", under which a number of local government services, including school meals and cleaning services, had to be subjected to competition from the private sector. It was based on the idea that tendering council work in competition with the private sector would lead to better, more cost effective local services. Compulsory competitive tendering was a regulatory regime that extolled price over value, quantity over quality and generally disregarded health, well being and sustainable development. It was superseded in 2000, for local government, by the Best Value regime, which aims to overcome the more debilitating features of CCT, although still prioritising cost-cutting and league-tables.
The 'Private Finance Initiative' is another way in which Sodexho is making money out of the public sector. It is the main way of financing new public sector buildings. The private consortium behind the project is then contracted to run the building typically for 30 years paid for by the public purse. Introduced by the Tories in 1992, it has since been expanded by the Labour government, who claim that it is a way of completing new capital-intensive projects without increasing public spending. Its critics claim that it will end up costing the public more as the money flows into corporate pockets and quality of service provision drops.
From the outset of de-regulation and competitive tendering within the public sector it was clear that not all services delivered for decades to meet a basic need could be replaced for less money by a private contractor obliged to make a profit. Margins must, after all come from somewhere. As the unions have pointed out, 'efficiency savings' generally come through cutting staff wages and renegotiating contracts so that basic rights, such as sick and holiday pay, are excluded. Sodexho has found other ways of increasing efficiency and saving itself money, as illustrated throughout the 'Corporate Crimes' section.
Sodexhos attitude to privatisation ranges from being unduly modest (especially about its involvement in prisons) to evangelical about the wonders of Public/Private Partnerships.
Sodexho's website lists various projects that it involved with the UK such as:
- Hereford Hospital
- Wythenshawe Hospital
- King's Healthcare
- Fife Schools
It is also the preferred bidder in the following PFI projects:
- Havering NHS Trust
- Colchester Garrison
- Exeter Courts
- Conwy Schools
- Stoke Mandeville
- Queen Marys Hospital, Roehampton
- Manchester Royal Infirmary 59
Under the various headings below, Corporate Watch highlight why Sodexho, and maybe private companies in general, are not the best companies to handle the management of crucial and sensitive public services. Sodexho's record on sanitation, food safety and labour relations as well as running prisons and asylum seeker centres for profit and serving a highly unethical client list are symptomatic of some of the worst aspects of capitalism.
For a detailed critique of 'public private partnerships' check out the Public Services International Research Unit (PSIRU) at www.psiru.org and "Captive State: The corporate Takeover of Britain" by George Monbiot (MacMillan 2000). There are also a series of case studies looking at PFI in the health and education sector in the UK published by the Joseph Rowntree Foundation called 'PFI vs. Democracy?'.60
Sodexho's record on food safety and food quality
Sodexho is predominantly a food service provider feeding millions of people every day. It has a huge responsibility not only towards food safety, but also food quality and high nutritional levels. Sourcing such vast amounts of food, Sodexho also has a responsibility to its suppliers, and ultimately the impact it has on farming and the environment worldwide.
"Food-based school meal standards implemented since 2001 are failing to deliver adequate nutrition to our school children. Indeed, the evidence emerging shows that this policy needs to be replaced by quantified nutritional standards, tight menu guidance and adequate levels of free school meal subsidy. Nothing less will oblige caterers and schools to abandon a food and dining culture where in the name of 'giving children what they want' they spend the bare minimum on ingredients and shovel poor quality food on to children's plates".
"Food for Life". The Soil Association report (2003)
According to Unison, more than 20 companies have contracts to provide school meals to the 203 Local Education Authorities (LEAs) in England, Wales and Scotland, as well as to individual schools. The most prominent companies are: The Compass Group subsidiary, Scholarest, who are contracted by 37 authorities; Initial Catering Services who are contracted by 17 authorities; and Sodexho, who are contracted to 13 authorities. LEAs that use Sodexho either as sole contractor or as one of several are Bristol City, Bromley, Cardiff, Coventry, Cumbria, Gloucestershire, Hounslow, West Sussex, Warrington, Swindon, Rotherham, Plymouth City, Oxfordshire (2 schools).61
Evidence is mounting that we bear the cost of 'Best Value' in school meals not only in our pockets, with the cost of the average primary school meal rising above the rate of inflation,62 but also in our food quality. Out of an average meal price of around £1.56, the amount spent on ingredients in school meals averages between 31p - 36p per child a meal.63 These costs can be kept so low as school dinners are often "cheap ready prepared and heavily processed foods of poor nutritional quality (laced with additive and loaded with fat, sugar and salt) delivered for assembly or 'regeneration' from chilled, dried or frozen status by de-skilled kitchen staff paid minimum wages."64 Some of the rest of the money will be spent on administration costs and paying managers to manage the contracts. Most major school meal caterers source their food from the same big wholesale firms such as Brake Brothers, Green Gourmet and Bernard Matthews.65
Sodexho boasts on its website about the healthy fare it serves to students of all ages: Our reputation on serving good food our nutrition and dietectics team play a fundamental role .66 However, it is hard to see how it can possibly provide healthy nutritious food on such tight margins. Further, whilst Sodexho may well follow Government guidelines in offering a balanced diet, it still also offers unhealthy options. So whilst it does educational work with kids to encourage healthy eating, the kids can still ultimately choose to eat unhealthily.67
The parents of a boy at St John's Primary School, Warminster, refused to let their son return to school due to disgust at the quantity and quality of packed lunches supplied by Sodexho. The mother stated that the lunches were "totally inadequate. My son only gets a finger roll, a 10-pence bag of crisps, biscuit and a drink. During his last seven days at school, he had grated cheese in his roll five times. It is not a balanced diet and I'm fed up with him coming home hungry and in a bad mood."68
There are some good initiatives from The Soil Association and Cardiff University's Regeneration Institute to raise awareness about the generally poor quality of school meals in Britain today, and to encourage schools to opt out of 'corporate control' and source better quality fresh and organic produce locally. See 'Further Reading' section. On its website, Sodexho states that it is part of the Ethical Trading Initiative, an initiative that draws up voluntary codes of conduct for worker's rights in the Global South, that for its critics falls under the ineffectual 'corporate social responsibility' category.69
In response to a query in the Gloucestershire Citizen, school meals operations director, Colin Garnham-Edge said that Sodexho was actively working to find new ways to increase the amount of locally-produced food on its menus. But he said local authorities would need to look at their price stipulations if they wanted more British food served. And he called for farmers to take a leaf out of their Continental cousins' book and look at forming co-operatives to aid the buying process.70
Despite Sodexho trumpeting its pupil committees, it seems that some students in the UK have had a hard time trying to influence Sodexho's purchasing policy. The People & Planet group at Cotham School in Bristol hit upon a problem when they tried to start a Fairtrade Café. The school canteen is run by Sodexho. Under their current contract with the school, only Sodexho products can be sold on site, and Sodexho has told the school they cannot supply Fairtrade goods under this contract. The good news is the school's contract with Sodexho is due to be renegotiated (Summer 2003) and the group have asked to be part of the process. They will be asking the school to only renew the contract if Sodexho agrees to supply the schools with Fairtrade products.71
A quick look at the school and college catering in the US produces other examples of dodgy dishes. For example in Cape Cod, an automatic slicer that cut off part of a womans thumb was not dissembled and cleaned before a cafeteria worker used it to cut vegetables for hundreds of Barnstable High School student lunches. A small piece of the employees thumb was later found by a student in her sandwich.72 Another example was in Bethlehem, Pennsylvannia where more than 500 parents and residents of the Nazareth Area School district signed a petition calling for an end of contract with Sodexho for managing its five school cafeterias. Complaints range from expired freshness dates on bread and milk to lack of consistent management.73 In El Paso, Texas, a dietician who had stopped working for Sodexho five years previously claimed that Sodexho forged her signature to approve the nutritional quality of the menu.74
Sodexho USA seems far ahead in providing better quality school and college meals. In 2002, parental pressure led to Sodexho carrying out a pilot scheme to provide an organic food option in all 12 elementary schools, in Palo Alto, California. The organic lunches, which include organic applesauce and organic milk or apple juice, however, are not cheap, costing $4.50, amost twice as much as the other cafeteria meals.75
In 2003, Sodexho set up Herb 'n Farm, a natural and organic food dining concept, with Wild Sage Foods, Inc, of California. "Herb 'n Farm is a new fast casual organic dining concept...that combines fresh and natural foods prepared and presented in an urban setting, with eco-friendly flair." The first Herb 'n Farm resturant, called the Wild Sage, opened in Colorado College, in Colorado Springs in February 2003, and the concept looks set to expand. (Interestingly, Colorado College is one of the main college campuses pushing for better worker's rights for Sodexho's janitorial and foodservice staff on campus.)76 Sodexho are also sourcing products for all their canteens from United Natural Foods, Inc., an organic and natural food distributor.77
In April 2003, Sodexho USA announced that it would feature foods from farms and ranches endorsed by Food Alliance, a leading certifier of environmentally friendly and socially responsible agricultural practices. Certified foods will feature on its menus at selected college and university campuses in the Pacific Northwest and Midwest regions.78
It would not be impossible for Sodexho to serve better quality and even organic food in its public sector contracts in the UK as in 2001, Sodexho Prestige, which specialise in catering and corporate hospitality, teamed up with celebrity chef Steven Saunders (The Green Gourmet) to launch a new catering venture called Organica,79 which is listed in The Soil Association's annual review (2002) as one of their corporate donors.
"Extensive and robust research carried out over many years has identified that NHS patients made consistent comments on the standards of hospital food.
Patients said that menus were complicated and carried poor descriptions; there were also comments on the time that food was ordered and delivered; on the presentation and temperature of food; and on the size of portions. They also commented that help with feeding was sometimes necessary, and that the complaints procedure was onerous." 80
NHS "Better Hospital Food" website 81
Sodexho Healthcare sources much of its cook/chilled and frozen foods for patients from another Sodexho subsidiary, Tillery Valley foods. Situated in Abertillery, Gwent, its purpose designed production facility has the capacity to produce in excess of 420,000 meals a week. Hospital food is, in effect, manufactured in these facilities and then transported to hospitals around the country where it is 'regenerated' on the ward.
Tillery Valley Foods say that they have developed their product and service to meet the expectation of the "Better Hospital Food programme" which arose as part of the NHS plan. See Tillery Valley Foods website www.tvf-online.co.uk
Various projects are underway to encourage local and organic food sourcing in hospitals. Organic South West, based in Callington, are working on a partnership project with Cornwall NHS. A full time worker at London Food Link is working to facilitate getting the same in four London hospitals including the Royal Brompton Hospital, St Georges Hospital, Ealing General Hospital and the Lambeth Hospital.
Much catering in the public sector is for vulnerable groups who deserve the highest quality food. However, food may not be as fresh and nutritious as it could be, as length of time between farm and plate can be many days. The vitamin C content of fruits and vegetables, for example, starts to decline immediately after harvest. So improving the freshness of food supplied to hospital wards and canteens is likely to affect the nutritional health of hospital staff as well as the people to whom they offer care. 82
Catering could so easily hugely benefit the local economy, with small local businesses, employing and skilling local people, as well as sourcing locally-produced and/or organic food. This is why many people find the idea of a couple of multinationals providing standardised factory-prepared meals in schools, hospitals, prisons, army messes, cafes in public buildings and corporate canteens and food courts worldwide problematic. The whole notion of cooking as a creative and skilled profession, where food quality is something to be valued, not only for its taste, but also for its health giving properties, is bound to be lost.
It is not suprising that the UK does not have a strong food culture when a huge proportion of the population eat in corporate canteens, where portions are tightly controlled and served by 'food service operatives' who are poorly paid and who couldn't really give a damn. This has certainly become the case in schools, where children develop their food culture.
The canteen culture doesn't encourage skilled and highly motivated cooks. Where they do cook, ingredients are of poor quality and questionable or unknown provenance. Some do virtually no fresh food preparation, many do little more than reheat 'cook-chill' dishes, add water to sauce powders or cake mixes, reheat frozen vegetables, reconstitute dried potatoes and 'assemble' other ready prepared ingredients made days previously and which have travelled miles to get there.
If you are interested in these issues you may want to fill in Sustain's 'How Green and Healthy is Your Canteen?' survey. See www.sustainweb.org/chain_survey.asp
The International Hotel Employees and Restaurant Employees International Union run a website dedicated to Sodexho's anti-union activities called EyeonSodexho www.eyeonsodexho.org. The website includes public information about Sodexho's food safety record, numerous examples of employment-related litigation and the company's controversial labour relations record.83 More information can also be found on www.hereunion.org.
EyesonSodexho claim that only around 12% of Sodexho staff are unionised. The company claim that in fact, 13.75% of its eligible staff are unionised. 'Eligible' excludes managers.
In 1998, HERE obtained a copy of the 'union aviodance manual used by Sodexho managers called Progressive approach to Labour : Union Avoidance.84
The key argument used to persuade senior managers to favour non-unionised staff is self-interested and financial. The manual illustrates that the 'manager: worker' wage ratio is much wider when staff are not members of a union, and there is less regulation.
Current (less regulation) Weekly Earnings (Median)
20 years ago (More Regulation) (Ratio CEO salary/Workers earnings)
- $35 to $1
1995 (Less Regulation) (Ratio CEO salary/Workers earnings)
- $120 to $1
The tactics suggested in the manual for union-busting are all legal. They are, however, not the tactics one would have ascribed to a company which boasts of award winning employer-employee relationships.85 The manual advocates banning union activity from company premises, encourages managers to talk on a one-to-one basis to try and dissuade employees from joining a union and informing a potentially striking employee that he (sic) can be replaced if he does strike. They also encourage managers to give opinions on unions, and unions leaders in derogatory terms86 and explain to employees that trade unions are linked to communism, racketeering and other undesirable elements 87
Sodexho used these measures to good effect in a dispute with hospital workers at the Glasgow Royal Infirmary in 2002. When early in 2002, UNISON helped exposed the unsanitary conditions there, the company responded with what branch secretary, Carolyn Leckie called 'a climate of fear' against union members. In August 2002, hospital services workers went on strike over the low wages they were being paid £4.20 - £4.67 an hour. This is much less than other staff working directly for the Health Authority. Sodexho attempted to break the strike by flying in scab workers from up to 400 miles away, paying £42.50 a night for accomodation and £10 pounds an hour. Despite this, in August 2002, around 300 staff won an increased pay and conditions package including £5 an hour minimum wage and three months full sick-pay.88
These concessions, however, did not come from the goodness of Sodexho's heart. As local UNISON branch secretary Caroline Leckie said, "the only reason we won was the strike - there was no way Sodexho would have conceded without that."89
Following Glasgow's success, 900 Sodexho employees at the Liverpool Royal Hospitals went on strike in November 2002 in pursuit of a pay claim of £5 / hour. Porters, catering, and housekeepers, earning £4.15 an hour, were involved in the action. During the strike, a Sodexho manager on £70,000 / year came forward as a volunteer, handing out tea to patients.
For more info on strike action taken against Sodexho in the UK, see www.labournet.net/default.asp#sodexho .
Students from universities and colleges across the USA have campaigned with Sodexho staff on campus to defend their right to unionise. Examples include a Plattsburg State university student campaign for union rights for Sodexho employees 90and a ground-breaking Colorado college report on the treatment of Sodexho workers on campus.91
Sodexho's anti-union stance and involvement with private prisons have led Xavier University, DePaul University, and the State University of New York at Albany amongst others, to end their relationships with Sodexho. Wesleyan College and Harvard have required janitorial contractors to raise wages and benefits to reasonable standards.
Both the National Health Service (NHS) and private healthcare have provided Sodexho with numerous contracts. Healthcare worldwide provides Sodexho with 18% of its revenue.92
In the UK, Sodexho operate at 130 hospital sites, with half of the contracts multiple with Sodexho providing more than one service. Typically the services they provide include housekeeping, vending, portering, non-emergency patient transport, car parking, security and grounds maintenance, reception and switchboard.93
In January 2002, Sodexhos healthcare subsidiary in the U.K. gained notoriety in Scotland after a joint union-management inspection team found filthy conditions at the Glasgow Royal Infirmary. According to reports in the Glasgow Evening Times,94 bloody surgical scrubs were found dumped in an elevator used to transport patient meals; piles of waste were stored in tunnels under the hospital making it a fire hazard; patients complained of dirty wards and staff members were reassigned directly from cleaning toilets to bringing patients meals. Hospital staff and their union, UNISON, attributed the problems to staff shortages brought about by the private contractor milking profits from an under-funded system. This accusation bought reprisals on the union, as noted by Carolyn Leckie in the section above.
In a Guardian newspaper report issued in April 2001, Sodexho was identified as the cleaning sub-contractor at Broadgreen University Hospital in Liverpool, cited as one of the ten filthiest hospitals in the National Health Service.95 Incidently, four out of the five 'filthiest' hospitals were cleaned by private contractors.
In June 2002, South Manchester Community Health Council found stains and debris on the floor of an acute ward and stained toilet seats, dusty ventilation areas, debris under beds and open waste bins used to wedge open fire doors in a high observation ward just after it had been cleaned.96
This is not just in the UK. Sodexho was reported by the nursing division of Stanford Hospital, California to be using linen contaminated with faecal smears, blood, hair, dirt and tape.97
In Hamilton, in the Canadian province of Ontario, Sodexho had a contract for all housekeeping at Chedoke hospital and 40 per cent of McMaster University Medical Centre. Mike Walters, a Union Rep., who represented hospital cleaners in Hamilton said Sodexho doesnt do a good job of cleaning the areas theyre supposed to. They prioritise what gets cleaned and what doesnt. In practice that means Sodexho cleaners are directed away from cleaning corridors, stairways and doctors offices, because they are not a priority. Sometimes public employees are called in to clean up areas the private contractor has left behind. Theyve found blood and urine left on the walls in areas that Sodexho was supposed to have cleaned." 98
In April 2003, UNISON reported that patients had launched a £1m legal action against Scottish hospital officials, alleging negligence for cutting back cleaning contracts and allowing bugs to flourish in dirty wards. The action is being led by Robert Cuthbert, who may lose his leg after contracting MRSA following major surgery at Glasgow's Victoria Infirmary. Commenting on the state of the hospital, where cleaning was carried out by Sodexho, he said: "The walls and floor were covered in a thick film of dirt and dust. If you rubbed the walls or floor with your finger, you literally lifted the filth and grime off, leaving a clean mark."99
Other than their involvement in the inherently discriminatory asylum and prison industries, Sodexho regularly find themselves facing accusations of racial discrimination at employment tribunals. One high profile case, being brought in the US, is a billion dollar class-action racial discrimination lawsuit being filed by ten current and former Sodexho managers. The class action they seek would include all African Americans (around 2,600) who are or were salaried employees at any of Sodexho's various divisions and locations from March 9, 1998 to the present, and who have held or sought to obtain an upper- level managerial, supervisory, or professional position; or who have held a job that would lead to such a position. The allegations include that the company-wide promotion process is uncontrolled and entirely subjective, virtually guaranteeing racial bias. Also that promotion decisions are based on the decision makers' own personal preferences rather than validated selection criteria.
"Sodexho has known for years that its white managers discriminate against blacks in promotions but has chosen not to stop it." 100
Despite the fact that the US Supreme Court rejected Sodexho's request to have the case blocked, Sodexho commented in The Financial Times, that it "firmly denies the allegations and considers the case without merit".
Worries about the lawsuit's eventual cost coupled with disappointment over modest sales forecasts have, however, undoubtedly affected Sodexho's share price during the latter half of 2003.101
Whether as a response to the allegations in the lawsuit or otherwise, Sodexho USA does support an almost overwhelming amount of minority groups in the USA today, from the Black Culinary Alliance, Congressional Black Caucus Foundation, United Negro College Fund and other groups supporting single mothers, Asian Americans etc.102
Sodexhos main involvement with the asylum industry in the UK is through its subsidiary, UK Detention Services, which runs Harmondsworth Detention centre, near Heathrow Airport. Thankfully, the hugely controversial voucher scheme for asylum-seekers which was run by Sodexho during 2000-2001, was abandoned after huge public pressure.
Harmondsworth Detention Centre.
Sodexho has an eight year £180 million contract from the British Government to build and run Harmondsworth.103
Harmondsworth Detention centre, which opened in October 2001, holds 550 people including children as young as 4 years old. There are several independent reports which attest to the psychological damage that can occur to children in incarceration.104
In one of the most shocking potential corporate abuses of power Corporate Watch has heard of, it was alleged at the time of its opening that Sodexho planned for asylum-seekers at Harmondsworth to become virtually 'slave labour' so that the company could cut its operating costs.
A Home Office document obtained by the National Coalition of Anti-Deportation Campaigns, showed that the Government intended to suspend the minimum wage at Harmondsworth so that Sodexho could pay asylum seekers £12 a week, which works out at 34p an hour (92% below the minimum wage) to do the work of painters, cleaners and caterers. If they refused work but complied with an 'agreed activity programme', they would be paid £6. If they refused to cooperate at all, they would be given £4 for cleaning their rooms.105
Thankfully this scheme did not happen and Sodexho, although highlighting that the terms of its contract meant that asylum seekers could be offered jobs at the facility under terms to be defined by the UK immigration services, denied that that it ever actually happened. It never, however, denied that it might have been planning such a scheme.106
The latest inspection of Harmondsworth made by the Chief Inspector of Prisons in September 2003 said that:
"There were increasing levels of disorder, damage and escape attempts, with an average of seven assaults a week. In spite of an average of one self-harm incident a week, suicide, self-harm and anti-bullying procedures were not effectively managed. Nor was there sufficient mental health support for detainees held in the in-patient ward. 107
In conclusion, the report stated: Harmondsworth, when we inspected it, did not meet three of our four tests for a healthy custodial environment.108
In a report that came out in March 2003, the prison inspectors expressed deep concern109 about detainees with mental health problems being held at Harmondsworth. Other problems highlighted include the lack of uptake of education and the fact that there is no fresh air in the building.110
On February 22, 2002, The London Times reported that nine detainees escaped from Harmondsworth, breaking a window, scaling a 15 fence and using towels to get over the razor wire surrounding the facility. It seems that they did not feel Sodexho was improving their quality of life, as the company has claimed in the past. 111
The Voucher Scheme
"The whole voucher system is demeaning and discriminatory and will have an extremely damaging impact on survivors of torture and persecution who seek protection in the UK.
Asylum seekers are already being forced to live at a level of support below the rest of the population. We are appalled that they will face impoverishment through not being able to receive their change when they spend the vouchers."
-Zoe Harper of the charity Asylum Aid
The Sodexho-Pass voucher scheme has provided Sodexho with its most unwelcome publicity yet in the UK. This scheme, which began in April 2000, saw the already extremely low state benefits provision for asylum-seekers (equal to 70% of income support rates) paid to them in the form of vouchers, rather than cash. The idea behind the vouchers was to deter asylum seekers from thinking that the UK system for claiming asylum is a soft touch. In practice, this led to asylum seekers becoming further impoverished and stigmatized.
'Impoverished' because when the vouchers were presented at participating supermarkets, asylum-seekers could not receive change, so they either got less than the face value of the vouchers, or were encouraged by supermarket staff to make any up shortfall in often useless goods. In their attempts to attract shops to join up to the scheme, Sodexho even encouraged the stores to keep the change and to see it as a 'revenue-making opportunity.112
When asylum-seekers were dispersed out of inner city areas, they often had to travel to get to a participating supermarket, which meant that the token amount of benefit they received in cash soon would disappear. Asylum-seekers were further 'stigmatised' as voucher users were often made to stand in a separate queue from the rest of the customers. For more details see 'Token Gestures', a report by OXFAM, The Refugee Council and the Transport and General Worker's Union, which illustrated the damage the scheme was causing.113
Sodexho was paid around £3.1 million by the UK government for running the scheme and company accounts reveal that it earned £1.1m in its first year of operation.114
Unsurprisingly, the voucher scheme created a massive ground swell of opposition. An alliance of anti-racist and anti-deportation groups, churches, trade unions and NGO's eventually put enough pressure on the government so that in October 2001, David Blunkett announced that the scheme would be scrapped by April 2002.115 Although at the same time, the Government announced that it was expanding its plans to build detention centres.116
The campaign also included direct action against Sodexho including the occupation of a Marriott Hotel in Bristol (Marriott Hotels is not actually part of Sodexho Inc., or Sodexho Marriott Services, as it was previously known), and an action at Sodexho's European Management Centre in Croydon, London. See Schnews editions 299 and 334 for more info.
The prison industry accounts for 1% of Sodexho's total revenue. In addition to providing ancillary services (food, grounds keeping, etc.) to a number of prisons throughout continental Europe, Sodexho Alliance owns for-profit private prison companies in the U.K. and Australia. Sodexho's subsidiaries?Australian Integrated Management Systems and United Kingdom Detention Services?not only privately operate prisons and refugee detention centers, but also work with governments to design, build and finance new prisons.117
Overall, Sodexho have some involvement with ninety-one prison facilities in the UK, Australia, France, Spain, Italy, Portugal and the Netherlands. Sodexho is also part of a consortium which, in 2002, won two contracts to operate five prison facilities in Chile.118 See www.sodexho.com/dcs/en/p_1.htm for more information from Sodexho on their approach to the prison industry.
In an extraordinary statement in May 2001, Pierre Bellon stated that Sodexho were pulling out of Corrrections Corporation of America. In June 1994, we acquired an 8% stake in CCA... we have now determined that our CCA investment is no longer in line with our strategic objectives and is in conflict with our policy." 119
However, this did not end Sodexho's involvement with the prison industry. "Sodexho will provide services to prisons only in those countries, which are, established democracies, where death penalty is illegal and which do have rehabilitative policies for inmates. 120 They did however, concede that they would only be providing services at prisons, and not owning them. Sodexho will not own any prison or jail facility.121
Sodexho's statement and the sale of its stake in CCA was a response to widespread criticism and an extensive campus-based campaign in the USA with support worldwide which were aimed at ending Sodexho's relationship with the private prison industry.
This was a huge victory for campaigners. In a campaign launched in April 2000, the Prison Moratorium Group (www.nomoreprisons.org) and student and community activist group, Not With Our Money (www.notwithourmoney.org), were (and are still) key in helping to co-ordinate students in around 60 campuses across the US to organise boycotts, persuade colleges to sever contracts, write letters and take direct action against Sodexho. Around six contracts were not renewed on the basis of Sodexho's prison industry involvement (See also section on 'Anti-Unionism). There are numerous US student campaign websites targetting Sodexho for its involvement in the prison industry. Solidarity actions happened in France where the French Union, the CNT, targetted Bateaux Parisiens, another company owned by Sodexho.122
However, some sneaky deals were going on behind closed doors between CCA and Sodexho over the UK prison company, UK Detention Services. CCA held a 50% stake in UK Detention Services, which it sold in November 2000 to none other than...Sodexho, who already owned the other 50% of the company, leaving them the sole owner.
UKDS was formed in 1987 by a consortium of two construction companies, McAlpine and Mowlem, together with CCA. Mowlem sold its share to CCA and in 1997, McAlpine sold its 50% share to Sodexho.
In effect, through this acquisition and the acquisition of Corrections Corporations of Australia (now renamed Australian Integrated Management Services) also from CCA, Sodexho has expanded its direct involvement in the industry.
Despite Bellon's statement that Sodexho would not own prisons, a statement from Herb Dehapiet, the head of UKDS, who is also known as 'Sodexhos Worldwide Correctional Services Champion' proves that he has other ideas about how the prison service should be run and what Sodexho's role could be in the future:
"PFI (Private Finance Initiative) in prisons has proven that it works better when the whole service is given over to the private sector, with none of the usual boundaries between the public and private sectors. Ill oppose any plans by the government to move just towards service management contracts. 123
For more information on Sodexho's continued involvement in the prison industry see "Locking Up Profits: A report on Sodexho Alliance and the Private Prison Industry". www.notwithourmoney.org/05_sodexho/prison_op.html
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Prisons run by UKDS
HMP and YOI (Young Offender Institution) Forest Bank
HM Forest Bank, located in Salford, England, opened in January of 2000 as a privately financed/privately operated prison. Sodexho has been directly involved in the design, construction, management and financing of the facility since 1998, when UKDS signed a contract to develop the prison.
According to data from the 2000-2001 Annual Report of HM Prison Service,124 Forest Bank is amongst the worst prisons in England in terms of such measures as violence and drug use. Out of the forty male local prisons (MLPs) in the UK, Forest Bank had the highest number and rate of assaults, with around 123 assaults that year. The rate of assaults, 17.7%, is more than twice the MLP average, which is 8.4%, and well above the target of 9% set by the Prison Service. Forest Bank also had the 6th highest rate (22.7%) of positive drug tests. That rate is 50% higher than the MLP median (15.25%) and well above the target of 16% set by the Prison Service. Note: Sodexho representatives have recently asserted that the high number of assaults and Positive Drug Tests at Forest Bank is due to the age of the prisoners housed in the facility. 125
The report on a full announced inspection of HMP Forest Bank, by HM Chief Inspector of Prisons, released in December 2002 highlights some serious failings. The report states that ...a major weakness was that there was insufficient purposeful activity, with fewer than half the prisoners engaged in meaningful work or education...The Inspectorate was also concerned that the general atmosphere of respect did not extend to the visits room, where prisoners and their visitors were separated by dividers and there was excessive use of closed visits. 126 Further detailed criticisms included lack of decent education facilities and low staff-prisoner ratios.
HM Blakenhurst, located near Redditch, England, opened in May of 1993 as a publicly owned/privately operated prison. The facility was managed by United Kingdom Detention Services from May 1993 until 2001, when the facility was turned over to the public sector
During this period it has to be said that the Prison Inspectors reports were sometimes positive, however HM Prison Inspectors Report (2001) stated ...of more immediate concern is the clear evidence that treatment of and conditions for prisoners at Blakenhurst had, at best, stood still since our previous inspection and in some respects have become worse. It was disappointing to find so many recommendations still not actioned, and so many promising innovations stalled until it had become clear whether the contract was won or lost. 127 Ramsbotham goes on to describe serious problems with health care, race relations, overcrowding, and limited educational programs.
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The Death of Alton Manning
In 1995, Alton Manning, an inmate at HMP Blakenhurst, died after being restrained by a UKDS prison officer. According to evidence given at the coroners' inquest,
"Mr Manning was brought down on to the floor and held prone, face down, with officers putting his arms in locks and restraining his head and legs. Prison Officer Reynolds testified that he put a knee at the base of the spine on the right hand side for 2 to 3 seconds. This was in direct contravention to Home Office directives on Control and Restraint. Home Office, 3 August 1992: Paragraph 4. `At no time after an inmate has been taken to the floor should any body-weight be applied to an inmate's head, neck, chest or abdomen.' Reynolds, unlike other more junior officers, claimed he did not know of this Home Office guidance and could not remember whether he had been trained on it. 128
Inquest, who campaign against deaths in custody and for changes in the Coroner's court system (www.inquest.gn.apc.org), conclude that:
"The evidence and information available to the jury has called into question the following:
Although Sodexho had no direct management role in HMP Blakenhurst at the time, as it was managed by a UKDS which was owned by CCA, Mowlem and McAlpine, it was still happy to acquire a stake in CCA and UKDS.
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UKDS, in a consortium with Interserve plc (formerly Tilbury Douglas), Royal Bank Project Investments Ltd and the Royal Bank of Scotland, have won PFI contracts to build two new prisons.
HMP Shortwood, which is in Ashford in Middlesex is a 450 capacity womens prison due to open in early 2005. This is the first new women's prison to be built in the UK since Holloway in 1971. Interserve Project Services will design and build the prison, which has a capital value of £47m. UKDS will then provide operational management over a period of 25 years. Interserve Investments plc is taking an equity stake in the project with other consortium members Sodexho Alliance SA (UKDS's parent company) and Royal Bank Project Investments Ltd. The senior funding package of £60m was arranged and underwritten by the Royal Bank of Scotland.130 The site where HMP Shortwood is being built was the subject of a protest in March 2003 as part of an International Women's Day solidarity action with women prisoners.131
The second contract is to build and run an 840 capacity Category B prison, for both men and women in Peterborough, Cambridgeshire.
This will be the first purpose-built prison in England and Wales to accommodate both men and women, and in the press release from HM prisons, UKDS are praised on their attention to gender issues. The prison is due to take its first prisoners in April 2004.
The value of the contract is worth approximately £60 million in capital and £265 million in total. It will be located on the old Baker Perkins site in Peterborough.132
In February 2003, the Government announced that under a new pilot scheme, Prospects, short term prisoners could be moved to temporary premises designed to help them stay off drugs. UKDS won two contracts to run such premises in the Bristol area.133
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Prisons run by Australian Integrated Management Services (AIMS)134
In 2001, Sodexho-Alliance acquired CCA's share in Corrections Corporation of Australia, renaming it Australian Integrated Management Services (AIMS).
Acacia Prison, Western Australia
The 750-bed Acacia mens prison in Western Australia was opened in May 2001. AIMS has a 20 year contract.
Leaked confidential briefing notes from Western Australias inspector general of custodial services, make some serious allegations about AIMS running of Acacia Prison.135 According to documents seen by the West Australian, the prisons' inspector general, Professor Harding, states:
A recurrent message from prison staff working in the blocks was that they were too thin on the ground to feel safe at all times. The whole management system, from top to bottom, is under tremendous stress. Staff felt under so much stress that they went on strike during March, not for pay, but for 30 extra staff." 136
The report questioned whether the prison could cope with a major incident or, less dramatically, whether it would quietly collapse as morale eroded. There was no doubt that a tangible amount of violence was either going unreported or unsanctioned. Prisoner safety at Acacia was also a concern. Many long term prisoners told the inspectors that quantities of food seemed to have diminished as the population increased, as if the same sized cake were being divided more times.137
The inspector general also noted that there was a high level of grievances amongst prisoners and evidence that some had been locked in their cells and electricity cut off as a form of punishment. The prisons cultural area was not used by Aboriginal prisoners as they felt it was irrelevant and inappropriate.
Acacia is now on the inspector generals alert list of prisons at real risk of significant failure. In his briefing notes, Professor Harding wrote that, "we will be keeping it [Acacia] under close review during the next six months to a year - a period which could be crucial to its future. 138
A decision is likely to be made on the report's official publication in September 2003.139
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Prison Services run by the AIMS Corporation
"The safety, care and well-being of prisoners must always constitute the primary consideration. The Inspection has given rise to questions as to whether this has always been the case...The reality of transportation for prisoners is that they are often dehumanised and subjected to sub-standard conditions...In summary, the serious issues raised in this Report regarding the performance of the Contract cast doubt on the claim that the objectives of the out-sourcing of prisoner transport services has been achieved."140
Report of an Announced Inspection of Adult Prisoner Services. Professor Richard Harding, Inspector General of prisons, Western Australia. November 2001
AIMS provides custodial transportation for Western Australia's prison service. This includes: police lock-up to prison; prison to prison by way of transfer or for inter-prison visits; prison to court and vice-versa; prison to hospital or to some other medical centre and vice versa; prison to mental hospital and back etc. In Western Australia, the distances can be enormous - for example, from Kununurra to Broome, which is over 1,000 km by road - and the locations sometimes inaccessible by standard road transport.
The inspector general, Richard Harding, described his first encounter with the AIMS Corporation's transportation system thus:
a Mazda van was about to be loaded with prisoners for medical escorts. The locked compartment contained two inward-facing metal benches with no restraints or grab handles to prevent passengers from sliding around as the vehicle braked. There was no natural airflow and very little natural light, for the back window was very closely grilled. The compartment was claustrophobic and cramped. An elderly Aboriginal prisoner ... told me that he had been ill on his last journey because of the shaking and discomfort of the van and, more particularly, because he had no sense of where he was or what land he was passing through ... it was evident from such a brief encounter that safety, comfort and duty of care issues were taking second place to security - an impression that was fortified when it emerged that even minimum security prisoners were handcuffed at all times when not in the vehicle."141
Further points made by the Inspector's report included:
Of the eight complaints received by the Ombudsmans office over an eight month period, five have been upheld and the results of the other three are [then] still pending;
Evidence gathered from prisoners and prison managers is that many prisoners are fearful of travelling in the vehicles. Some even decline other necessary services - for example, medical escorts - rather than be transported in these vehicles;
An earlier report by the consultants, KPMG, found that there were significant failures to adhere to the contract by AIMS, including an increase in costs and fraudulent reporting of hours worked.143 For its part, AIMS challenges the accuracy of many of the KMPG findings.
Professor Harding cast doubt on whether AIMS Corporation should have been awarded the contract in the first place,
"Nevertheless, in retrospect, some suspicion arises that the successful bidder - AIMS Corporation - may either have been "low-balling" to obtain the contract or had simply under-estimated the scope of the contracted tasks...Whether due to low-balling or genuine under-estimate or a composite of these factors, a contract that does not carry within it a viable commercial margin will be under stress from the outset, with consequential impact upon services." 144
Low-balling is a recognised phenomenon in dealings between the public and the private sector. There are well-documented cases of a contractor putting in a low bid and 'negotiating' a hefty price hike once the public sector enterprise has become dependent on it for the continuation of an essential service.145
Metropolitan Womens Correctional Centre at Deer Park, Victoria
The Metropolitan Womens Correctional Centre was a privately owned/privately operated womens prison that was commissioned in 1996 and developed by Corrections Corporation of America. Deer Park became operational in 1997 under the management of Corrections Corporation of Australia.
Metropolitan Womens Correctional Centre was so badly run by the then Corrections Corporation of Australia, that the Government of Victoria, after issuing three Default Notices without seeing any progress, took over control of the prison and arranged to purchase the facility from CCAus for A$20.2 million.
For more information on the Metropolitan Women's Correctional Centre, Borallon Correctional Centre (CCAus1990 - 2000), see the fantastic 'Not with our money' report entitled, 'Locking Up Profits: A Report on Sodexho Alliance and the Private Prison Industry' (2002) at www.notwithourmoney.org/05_sodexho/prison_op.html
On 10th June 2003, AIMS Corporation won its latest contract to provide security services for the next three years at both the Magistrates and Children's Courts in Melbourne.146
Apart from helping Multinationals exploit natural resources, Sodexhos Remote Site Management also help pave the way for the military. In this area, the U.S. Military are their biggest customer. The Center for Public Integrity reveals that Sodexho won a $324,000 contract to provide food and equipment in Afghanistan during 2002.147
In 2001, the US Marine Corps also awarded Sodexho Inc. an $850 million contract to serve meals at 55 Marine Corps mess halls. After an investigation, however, the General Accounting Office (GAO) questioned how Sodexho's proposed price for the contract would cover its cost while still maintaining quality food and service levels. The GAO told the Marines to reopen discussions for the contract. The GAO investigation caused Sodexho's share price to drop 3 percent. Despite the setback, the Marine Corps eventually approved the contract with Sodexho.148
Sodexho also 60 contracts with the UK military.149 See Products/Projects section.
In the wake of the collapse of Enron and World Com., creative accounting seems to be widespread amongst Multinationals.
"We have found serious errors of management as well as accounting anomalies."150
Sodexho's UK and Ireland division encountered problems during 2002, when evidence surfaced of accounting irregularities in its Land Technology division. Sodexho's chief financial officer Sian Herbert Jones told the BBC that the shortfall related to unpaid bills from clients, money which the company had already accounted for but never received. Ms Herbert Jones said this had been found through an internal audit, and would cost the group 22m euros (£13.9m). A profit warning was issued which immediately wiped 30% off the value of its shares.151
Perhaps fittingly, Sodexho ran the Deli Market Emporium, a "1,000 square-foot money maker" at Enron's HQ in Houston. UN Energy giant, Enron collapsed in a sea of "accounting anomalies" at the end of 2001.152
Meanwhile in France in June 2001, the French Competition Council fined Sodexho Cheques, the French subsidiary of Sodexho Alliance, for forming an anti-competitive alliance with two other companies, Accor and Cheque Dejeuner. Together the three companies control 94% of the food services market in France. The Competition Council ruled that the three companies attempted to maintain their respective market shares by "responding to calls for tenders in an irregular or incomplete fashion."15
Sodexhos Environment Policy:
Sodexho recognises its responsibility to respect the environment and will strive to achieve environmental best practice throughout its business activity. We believe that everyone has a duty of care for the environment and to seek ways to conserve natural resources. We are conscious of environmental issues and we believe that the pursuit of economic growth can be linked to ecological protection.154
Sodexho has contracts with numerous natural resource exploiting companies such as BP Amoco, Chevron, ExxonMobil, Occidental Petroleum, Shell, Texaco, Bechtel, Daewoo, Hyundai, Caspian Drilling, Rio Tinto and Halliburton. For a full list of Sodexho Universal's clients see www.universalsodexho.com/ .
One of Sodexho Universal's notably un-environmental projects includes collaborating with the destruction of mangrove swamps on Bonny Kingdom, at the southern edge of Rivers State in the Niger Delta of Nigeria. The Federal Government of Nigeria, with its international partners, has cleared thirty five hectares of virgin mangrove forest putting the indigenous Ijaw community under severe threat.155
Another Sodexho Universal supported project is the exploitation of oil and gas reserves on Sakhalin Island, Russia.156 Located in Russia's Far East, it is seen by regional politicians as the ticket to economic prosperity for the area because of huge deposits of oil and natural gas off the northern coast.
Since President Vladimir Putin abolished the State Committee on Ecology and Forest Service, environmental protection regulations governing oil and timber exploitation have not been enforced, according to Sakhalin Environment Watch. Furthermore, little attention has been paid to increasing the island's capacity to prevent and respond to oil spills that could threaten productive fisheries in the Okhotsk Sea. In September 1999, the residents of the island learned that oil had spilled from the Vityaz Marine Terminal, part of the Sakhalin II project, a joint oil-drilling venture of Sakhalin Energy Investment Company and Royal Dutch Shell.
Sodexho are a very wily company, ready to expand into any business they can see as potentially profitable. This 'farsightedness', especially when it comes to contracts with the public sector, has made them into the multimillion pound company they are today. They are totally integral to the government's 'privatisation of public services' drive, happily taking on unpopular sectors with gusto. After all, these contracts provide rich pickings.
Whilst it may seem that Sodexho operate in many disparate sectors, its success relies on:
- Effectively managing a large and unskilled workforce;
- Keeping the costs of its raw materials down through economies of scale;
- Managing very large contracts, or at least gaining the confidence of multinational companies, the military and governments around the world it they can 'come up with the goods', as well as convincing them that it is actually far less effort to put the contracts into Sodexho's capable hands than to do it 'in-house'.
Sustained campaigning in the US has won some concessions on labour rights, food quality and food sourcing. The campus organising to kick Sodexho out of privatised prisons in the States has certainly been inspirational. However, Sodexho has not budged so easily in the UK where its prison and detention centre investment is much bigger. There may well be potential for similar campaigning here with students targetting schools and university catering over prison investment, food quality/food sourcing and labour rights.
In recent years, Sodexho-Alliance has been rocked by scandals, been downgraded by analysts, and it about to see its founder and inspiration, Pierre Bellon, standing down. It remains to be seen how it will weather these storms.
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58www.sodexho.co.uk/segments/pfi.htm viewed 10/11/03
60Published in 2002 by the Menard Press. Edited by Professor Colin Leys
61Unison - School Meals in the 21st Century. Unison Education Services, London 2002 viewed 20/1/04
63Kevin Morgan - School Meals - Healthy eating and sustainable food chains. Regeneration Institute Cardiff University. September 2003 viewed 20/1/04
64Food for Life - The Soil Association (2003) See www.soilassociation.org for more info. viewed 20/1/04
65"Food for Life" Report The Soil Association. 2003
66 www.sodexho.co.uk/segments/nutrition.htm viewed 30/09/03
67Which! Magazine. School Meals. March 2003
68 www.unison.org.uk/bargaining/doc_view.asp?did=649 viewed 20/09/03
70www.britishfoodfortnight.co.uk/News2.htm viewed 25/1/04
71www.peopleandplanet.org/news/news.php?story=309. viewed 25/1/04
72 Slicer not cleaned after worker cut her thumb Cape Cod Times, 02/03/01.
73 The Morning Call, 2/23/00 Petition asks ouster of food service agency
74 The Associated Press State and Local Wire, 8/19/01 Sodexho Marriott forges dietitians signature
75"Organic food trial expands" by Nicol