It's ironic that Australia - colonized 200 years ago to serve as one big British prison - is now a showroom for the world's private prison corporations: giants like Securicor, Group 4 Falck (formerly Wackenhut) and the Corrections Corporation of America. Governments from Victoria to Western Australia have handed more prisons to private operators than anywhere else in the world. Even the country's seven immigration detention centres have been contracted out - the infamous Woomera camp in the South Australian desert is run by a Group 4 Falck affiliate.

Privatization started in Australia in the late 1980s and was in full swing by the early 1990s. Publicly run hospitals, bus lines, water companies, energy utilities and prisons were all put on the block. Given that 80 per cent of the cost of running a prison is labour, private companies promised a cheaper system based on fewer workers and more electronic surveillance.

The policy was pursued most aggressively in the southern state of Victoria: soon 80 per cent of women and half of all male prisoners were in corporate-run institutions. But Victoria was also the site of prison privatization's most vigorous and successful opposition.

Even before private operators, Victoria had a strong prison activist culture - particularly around women's prisons. For two decades I helped organize regular demonstrations outside the state women's prison where sometimes more than a thousand people would hold hands and encircle the building. Our strategy was simple: to get our message about the stark reality of prison life into the media.

So when the first private women's prison outside of the US - the Metropolitan Women's Correctional Centre - opened in 1996 (run by the Australian subsidiary of Corrections Corporation of America) we were ready.

Women prisoners themselves were central to the new battle. In the first week all of them held a sit-in over the cancellation of visits from children. Management said the visits required too many staff. The women won.

The company's use of electronic surveillance meant there was little human contact between staff and inmates. The prison relied on drugs to keep control - more than 90 per cent were on medication, mostly anti-psychotics and tranquillizers. The combination led to an explosion of self-mutilation and unprecedented levels of violence.

In addition, staff were poorly trained and paid. And turnover was huge: there were five general managers in four years. Consequently the rules kept changing - instability was the only constant.

The Government justified privatization by saying that for-profit prisons would be cheaper, better run and more accountable. All three arguments turned out to be false. Using 'freedom of information' requests we discovered that the cost-saving claim was nonsense. There had never even been a cost-benefit analysis. We also found that the 'better services' that were supposed to result from competitive tender turned out to be an illusion. The bidders for the women's prison all tendered below what the Government set as the benchmark for minimum standards - so the corporations were asked to up their bids.

We also asked for the prison contracts and standards so we'd know, for example, how many 'attempted suicides' were permitted under the contract. The Government and the company refused, claiming that the prison was now a commercial venture so the contract was 'commercially confidential'. The fact that 'commercial reputations' were at stake also meant that defamation threats were used against both activists and the media in an attempt to gag public debate.

It didn't work. Four years later the contract was terminated and the women's prison was returned to state control. The community eventually understood that there is something morally repugnant about punishment being a source of profit awarded to the lowest bidder.

Our greatest asset in the campaign was the prisoners themselves. Their stories - the slashed arms, the bashings, the strip searches - not only galvanized public opinion. They also revealed the duplicity of the company and the complicity of the Government.