The author argues that the theory of social contract provides the most useful way to justify a distinction between the allocation and administration of punishment. Significant, relevant writings from Australia, the United Kingdom, and continental Europe are evaluated. This provides a more sophisticated understanding of the historical development of this distinction and groundwork for a jurisdictional approach. The paper maintains that an Australian understanding can only be based on an analysis of its nature and scope in other Anglo-Saxon jurisdictions. Identification of the proper limits for the delegation of powers to private companies must be formulated in each place in accordance with the local history of that place and in accordance with the political demands of that time. This is illustrated by highlighting how disciplinary decisions and classification decisions raise sociopolitical and legal issues in Queensland. The key issue is whether allowing private companies to be involved in sociopolitical and legal delegations in the way identified empirically in this paper is appropriate. When the process of decision making was closely recorded, especially regarding the use of discretion, it was clear that employees of the private corrections company allowed commercial interests to influence them. A regulatory arrangement that enables a State-appointed controller to perform all the elements of decision making that involve discretion would solve many of the problems identified in this paper. This would approximate the British approach, although that model should be subjected to careful empirical evaluation. 2 figures, a list of 10 court cases, and 28 references