The US Justice Department has announced plans to phase out private prisons, but don't expect the same to happen here in New Zealand anytime soon.
More than 40,000 inmates are in prisons run by companies like GEO Group Inc and Corrections Corp of America.
States will still be free to use them, as will the Department of Homeland Security, but over time all federal prisons will be returned to the Government's control.
Deputy Attorney General Sally Yates's announcement follows a Justice Department report that criticised private prisons for failing to maintain the same safety and security standards as federal prisons.
Ms Yates also said private prisons weren't saving taxpayers any money.
"Private prisons served an important role during a difficult period, but time has shown that they compare poorly to our own bureau facilities," she said.
New Zealand private operator Serco's poor handling of the Auckland Central Remand Prison in Mt Eden saw management of the prison handed back to Corrections late last year.
The contract will not be renewed when it reaches a 'break point' in 2017. The original contract had been for 10 years.
Serco also runs the Auckland South Corrections Facility at Wiri.
Corrections Minister Judith Collins, who awarded Serco the contract, said no decisions have been made on Serco's future.
"Any future contracts for operating other privately run prisons will draw on what we learned from the success at Wiri as well as lessons from Mt Eden," a spokesperson for Ms Collins told Newshub.
She claims Corrections' contract with Serco "drives a rigorous performance management regime" and monitoring is "tight".
But Labour corrections spokesperson Kelvin Davis said the US decision was "just proof of what we've been saying".
"They've come to realise it doesn't save money, it doesn't help with rehabilitation, it doesn't make these people better people when they come out of prison. They learnt their lesson. They've had the courage to reverse their decision around private prisons."
But he doesn't expect the Government to follow in the United States' footsteps.
"They're just so arrogant - this would be a major slap in the face for Judith Collins. She was the architect of the private prison experiment here in New Zealand… she's just too proud and arrogant to accept she got it wrong."
Corrections here declined to comment on the US Justice Department's change in direction.
Contracts for the US federal government's private prisons won't be torn up immediately, but reviewed as they come up for renewal. They will either be allowed to expire, or scaled back as the prison population falls. According to the US Bureau of Justice Statistics, prison numbers have dropped about 1 percent a year since 2007.
It's the beginning of the end of a two-decade experiment in private prisons for the US. There are 13 of them currently, set up to alleviate overcrowding in publicly run federal prisons.
Shares in GEO Group Inc and Corrections Corp of America fell about 28 percent following the announcement. More than half of Corrections Corp's income comes from running federal prisons.
Green Party corrections spokesperson David Clendon said it's not surprising the US Justice Department said they didn't meet federal safety and security standards.
"Most of [private prisons'] costs are fixed… The only avenue to generate profit is to have a minimum staffing model, and that's exactly what generates problems.
"Understaffed prisons are dangerous prisons, both for the staff and the inmates. Until this government gets their head around that, then I'm afraid we're unlikely to see any shift."
Ex-Democratic presidential candidate Bernie Sanders praised Ms Yates' decision.
"Due in large part to private prisons, incarceration has been a source of major profits to private corporations," he said.