She is no stranger to tough questions on corporate governance, having spent all day Wednesday lecturing on the topic at the University of Western Australia, where she is an adjunct professor, going through a case study of Tyco International, the US conglomerate that used accounting tricks to inflate its earnings in the 1990s.

Smith-Gander likes dealing with questions from academics and students – who press her on how Transfield's board is addressing the allegations they read in the media – because it "pressure tests" her thinking, she says.

She is certainly a woman who understands crisis situations. "Going to the islands where the centres are is a very powerful experience. Refugees and asylum-seekers by their very nature are very vulnerable people and most of the people there have taken a very challenging journey to get there," she says.

It's about the business element

But Smith-Gander shies away from being drawn into a political debate, even though she says she is under "no pressure" from the government to keep quiet. "For us it's about the business element, and I see the business element as in very safe hands.

Transfield is the target of an aggressive social media campaign and some shareholders have dumped the company's stock. Supplied

"Graeme Hunt is a seasoned and more than competent CEO," she says of Transfield's chief. "It's the politicisation of the work that we're doing that is the challenge for us."

In reality, Transfield Services has no choice but to join what has become an intensely political campaign. It's no longer possible, it seems, for any company to just go about its lawful business as competently and fairly as it can, while ignoring a raging controversy over its activities.


Not when the line between the commercial and the political is becoming ever more blurred in an era where consumer power – and the power of social media – have changed so much so quickly.

When Transfield announced its new name, BroadSpectrum, a week ago, after losing its licence to the Transfield brand earlier in 2015, it was immediately attacked on Twitter by people opposed to the detention centres and the hashtag #BroadSpectrum started trending.

Smith-Gander says Transfield does not influence government policy ...so we think the activists' attention to us is misplaced." Eddie Jim

"#BroadSpectrum is quite a fitting new name for you @TransServices given your Broad Spectrum of human rights abuses towards #asylumseekers", one post said.

Add the ability to pressure large investors to divest, especially industry superannuation funds. Some of them are keen to show they are responding to member concerns, even if it is only a small minority of members who feel strongly on the issue. Industry funds like HESTA proudly announced their intention to divest from the company after pressure from some of their union members.

And if a company is targeted in this way, it has to respond to the accusations, no matter how unfair or inaccurate it believes them to be.

Rejects abuse claims

Transfield, for example, rejects claims that any of its employees have been involved in abuses or inappropriate behaviour against asylum seekers.


Heather Ridout: "If Transfield were to stop managing the detention centres, someone else would have to take that over and might not do as good a job." Luis Enrique Ascui

"There has not been one substantiated claim of an offence committed by a Transfield Services employee relating to an asylum seeker at Nauru or Manus Province," a spokesman says, adding that no charges have been laid either.

But the company declines to answer questions on specific allegations of abuse, referring queries to the Immigration Department, and Smith-Gander does not want to discuss whether unsubstantiated claims have been made against Transfield employees.

At base, the complaints are really about government policy rather than the company's work, she says.

For those who regard the detention of asylum seekers as an abuse of human rights per se, nothing Transfield can do will ever be enough to satisfy their concerns. They just want to end the policy however they can.

Yet it's a policy supported by the government and the Labor Party, with no change likely and little opportunity to wedge either party against the other.

So that makes the most vulnerable point of attack targeting the public company contracted to carry out the work and trying to home in on any complaints. The company's reputation, in that sense, is collateral damage, while a divestment campaign is a way of piling on the pressure.

Transfield's former chairman, Tony Shepherd, who signed off on the company's first detention centre contract on Nauru in September 2012, before handing over to Smith-Gander in October 2013, says Transfield has always had a culture of "great social responsibility" and the attacks on it are "completely unreasonable".


Needs to take responsibility

But human rights campaigners say Transfield needs to take responsibility for alleged human rights abuses at the detention centres on Nauru and Manus Island regardless of whether its staff participated directly in those abuses.

This includes the lobby group No Business in Abuse, which is conducting a vigorous public campaign while trying to persuade investors to sell their holdings. It argues mandatory detention is automatically an abuse of human rights.

Shen Narayanasamy, who is the executive director of NBIA and the human rights campaign director for GetUp!, says if there are human rights abuses in a system, companies that engage in a business relationship with that system can be "contributing to those abuses and complicit in those abuses" without being involved directly.

She points to the United Nations' interpretive guide on the corporate responsibility to respect human rights, which cites "performing construction and maintenance on a detention camp where inmates were allegedly subject to inhumane treatment" as one example of a situation where a business might cause "adverse human rights impact".

Smith-Gander says she understands NBIA's view, but Transfield has "a different perspective". Transfield has not signed up to any UN principles on human rights, but signed its own human rights statement in June 2015.

The statement says the company recognises the importance of upholding and respecting human rights in the course of operating its business, but adds this commitment "is limited to what is within its reasonable capability and requirements of law and government policy".

Smith-Gander visited the detention centres most recently in August and is planning another trip before the end of 2015.


"When I was there, the strongest emotion I had was a real sense of pride in the work that the company and the individual Transfield employees are doing," she says.

Delivering a safe environment

"Because in that very challenging and complex setting, they're delivering a safe environment, and they're delivering care and welfare to these people.

"So I came away with a very strong commitment that I would make sure that the board and senior management did all things that the company needed to continue to do to have the settings in place, the monitoring, the checking, so that I would never have to go to those places and not feel pride in what we were doing."

Immigration Minister Peter Dutton says superannuation funds and fund managers and other investors should make it clear that political activism "has no place" in the Australian marketplace.

"This sort of activism has no end," he says, arguing the targets can range across the political spectrum on any number of issues and will only increase in ferocity unless challenged. That is already obvious in the activist campaigns against coal mining.

"The most important next step is for the fund managers and peak bodies of superannuation funds in this country to condemn the activities of this extreme element," Dutton says.

"That would send the clear message this political witch hunt won't succeed, won't achieve the desired outcome and that they won't divest from a company involved in lawful activity."


Yet that sentiment is unlikely to help Transfield much in today's market. Few fund managers are prone to taking up political cudgels on behalf of a company. A public defence of a company under attack is also relatively rare when most people in business increasingly try to avoid provoking activists. Instead, the growth industry in investment is known as ethical, social and governance (ESG) investing.

Heather Ridout, the chairwoman of the country's largest industry fund, AustralianSuper, has strongly supported Transfield – its record and its management.

Transparent and responsive

Ridout says AustralianSuper takes the issue of ethical investing very seriously but Transfield has been transparent and responsive to any issues raised.

"Transfield Services is a great Australian company with a great history and a strong board and very good management," she says. "If Transfield were to stop managing the detention centres, someone else would have to take that over and might not do as good a job."

The head of one of Transfield's biggest institutional investors, who says he meets the company regularly to ask questions about conditions in the detention centres, says it is "extremely naive" for activists to think that if Transfield walks away from the contracts the government policy is "dead and buried".

"You're basically asking Transfield to do one of the least professional things a professional services company can do – to turn its back on a client," the fund manager says.

But there is no doubt the activists' campaign is taking a toll, as evidenced by a protest vote against Transfield chief executive Hunt's re-election to energy group AGL's board as a non-executive director at the energy group's annual meeting this week.


One AGL investor asked the meeting: "Am I right in thinking that he is the managing director of Transfield services [and] that company makes money out of Nauru and Manus Island? If the answer is yes, should he be on the board of what hopes to be a reputable company?"

And human rights issues are becoming a more important part of corporate governance for investors, making it essential for Transfield to get on the front foot.

Investment group AMP Capital, which says it has had private discussions with Transfield over the detention centres, highlighted shifting "societal expectations" in its September corporate governance update and stressed it was in shareholders' interest that the "companies they invest in uphold and facilitate basic human rights within their sphere of influence". It also recommended they check whether companies they invested in were guided by the UN's principles on business and human rights.

Demanding more accountability

"Just as companies move to capture the business opportunities of becoming more global, some in society are also demanding companies be far more accountable for their actions," AMP Capital said. "Increasingly, investors expect companies to understand and manage the human rights risks they are exposed to, whether these risks reside in their business relationships and supply chain or their own operations."

Transfield's job of defending its role and reputation is only going to become tougher as NBIA prepares to release a report that it says will detail "Transfield's complicity in human rights abuses" and Greens Senator Sarah Hanson-Young – who predictably wants the government to strip Transfield of its contracts – plans a campaign that will target some of the company's key customers, like BHP Billiton.

This comes at a tricky time for Transfield, because it is in final negotiations to renew its contract on Nauru and Manus Island for another five years. It desperately needs the contract, worth an estimated $2.7 billion, because other parts of its business are struggling, partially because of falling demand for its maintenance services from the resources industry. Its stock price has slumped 45 per cent over the past 12 months.

Transfield's current contract expires at the end of October, and while it has been told it is the preferred tender for a new contract, it has not signed yet with the government.


NBIA has not visited the detention centres, and has not done its own investigation into alleged abuses. It still says independent investigations, such as the Moss Review initiated by former immigration minister Scott Morrison into claims of alleged sexual and other physical assaults on Nauru, have found that abuses have occurred.

The Moss Review, which covered the period between July 2013 and October 2014, found that contractors working on Nauru – which include Save the Children, Wilson Security, and International Health and Medical Services, as well as Transfield – had not been reporting incidents quickly enough. It said this had hurt the ability of contractors or the Nauru police to investigate allegations, especially sexual assault allegations.

Another 207-page report, released in September by a Senate committee investigating alleged human rights abuses on Nauru, said the performance of Wilson Security and Transfield needed to be more closely scrutinised by the Immigration Department.

"The department has effectively outsourced its accountability to Transfield Services and through them, to Wilson Security, with no penalty for non-compliance," the report said. Transfield hired Wilson Security in 2012 to provide security services on Nauru.

The Senate report, which looked at allegations since offshore processing began on Nauru in September 2012 – when Transfield started providing services – found that 30 formal allegations of child abuse had been made against contractors working on Nauru, as well as 15 allegations of sexual assault or rape and four allegations related to the exchange of sexual favours for contraband. It also said Wilson Security had released details of 11 cases in which its staff were sacked for misconduct, including alleged sexual assault and excessive uses of force.

The Liberals, who held two seats on the Senate inquiry committee, compared to three seats held by Labor and the Greens, issued a dissenting report, saying the majority of members of the committee had accepted "untested and unsubstantiated" submissions as fact.

Smith-Gander acknowledges that some of Transfield's staff working at the centres "have not met expectations" but says they have been dealt with. Several hundred staff have been terminated from Nauru since September 2012 for various reasons.

"The controls we have in place today, the controls the client has, are very different to at the start of this contract," she says.


Still, Narayanasamy, who has given presentations outlining her views of companies' responsibilities on human rights to dozens of banks and financial institutions, says Transfield is in danger of losing its "social licence to operate".

"When you have major Australian banks and global banks saying that in their credit financing risk assessment they take into account human rights abuses and complicity in those abuses, when you have corporate entities like BHP and Rio Tinto publicly saying things like human rights is hard-wired into our business, complicity in abuses is not just a moral and ethical question, it becomes a serious question for business, for access to finance and contractual partners and in terms of the intangible value of business," she says.

Dutton says "political gripes" of all kinds – from genetically modified food to the live cattle trade to Indonesia, to what medical services should be available – belong in the political arena, not the business arena.

"These issues should be left to regulators and legislators, rather than trying to force changes through the back door," he says.

But for Transfield and Smith-Gander, those attempting to force change are trying to batter down the company's front door. That's politics.

With Ben Potter