Special Taskforce to Look at Construction Corruption

Special Taskforce to Look at Construction Corruption

Victoria’s construction industry will be targeted by a new Joint Police Taskforce, announced by Prime Minister Tony Abbott and Premier Denis Napthine last week.

Source: Herald Sun front page, 31 October 2014

The Herald Sun reports the taskforce will focus on union officials, debt collectors, mediators and employers engaged in blackmail, cartel behaviour, boycotts, extortion, kickbacks and intimidation while the Prime Minister described building sites as “places of violence and lawlessness”.

The taskforce is being set up in response to requests from the head of the Royal Commission into Trade Union Governance and Corruption. It is expected that up to 30 police officers will hunt for evidence of corruption and criminality exposed throughout the Royal Commission’s inquiry.

“The Royal Commission has received significant evidence of criminal conduct which includes widespread instances of physical and verbal violence, cartel conduct, secondary boycotts, contempt of court and other institutional orders,” said Mr Abbott.

“There is no place for standover tactics, violence or intimidation in Australian workplaces.

“To generate jobs and grow businesses, workplace must be safe, productive and law-abiding.”

Reports indicate the taskforce will investigate violations of state-based laws, like assault, along with action covered by federal laws, including building site boycotts.

“The evidence of corrupt behaviour, unlawful kickbacks and standover tactics in the construction industry has made it clear that there is a need for a Joint Police Taskforce to fully investigate this criminal activity,” Premier Denis Napthine said.

The Premier also stated that his government’s submission to the Royal Commission asked whether recommendations should be made in relation to deregistering the CFMEU.

“We’ve made a submission to the Royal Commission suggesting the Royal Commission examine this matter, particularly in light of the behaviour of the CFMEU on the Myer Emporium issue and a number of other issues across the building and construction sites in Victoria,” said Dr Napthine.

Master Builders says action is required to address disturbing and constant media stories that threaten to undermine the construction sector.

“Unfortunately, this is far from the first time we’ve seen our industry’s name in the headlines for the wrong reasons,” said Chief Executive Officer, Radley de Silva.

“The reputation of our trade is tainted by those who believe they are above the law.

“In recent years, we have seen a conga line of salacious stories like unlawful union blockades, underworld crime links, bikie standover tactics, confrontations with police and countless allegations of thuggery, intimidation or coercion.

“The Herald Sun has now labelled Melbourne as the ‘epicentre of union corruption within the building and construction industry’.

“Enough is enough. Now is the time to weed out these practices and restore the public’s faith in our line of work.”

Cleaning up debt collection

Moves to set up the taskforce follow recent actions by the State Government to clean up the debt collection industry.

The new plan will see debt collectors, both businesses and individuals, to be registered with Victoria Policy and listed on a database that is open to the public.

It will not only prevent people collecting debts without a fit and proper person test but will also make it an offence for anyone to use an unregistered debt collector to recover money on their behalf.

“Evidence given recently by Victoria Police to the Royal Commission… has highlighted the fact that members of outlaw motorcycle gangs have become heavily involved in debt collecting in the building industry, using standover tactics to intimidate alleged debtors and bypassing lawful debt recovery processes,” said Attorney-General, Robert Clark.

“These powers will enable Victoria Police to exclude criminals, thugs and dodgy operators from the Victorian debt collection industry. Those who breach these laws will face tougher penalties than ever before.”

In particular, the reforms aim to cut out outlaw motorcycle gangs, other crime gangs, people who have committed drugs offences, fraud or violent crimes and anyone who has used physical force, undue harassment or coercion while collecting debts.

Master Builders has previously called for action on this matter, particularly after bikie club members stormed the home of Master Builders’ current National President.

Court rejects CFMEU contempt appeal

The CFMEU’s attempt to overturn criminal contempt convictions against it for unlawfully blockading construction sites has been rejected by the Victorian Court of Appeal.

Last week, the Court upheld Justice Cavanough’s previous finding against the union for the blockades of the Grocon’s Emporium site in the Melbourne CBD and the McNab site in Footscray.

On 31 March 2014, Justice Cavanough ordered the CFMEU to pay a penalty of $1.25 million for contempt of the Supreme Court in relation to the CFMEU’s interference with access to Grocon sites in 2012 and two related contempt matters in 2013.

This was the largest fine ever imposed in Australia for a contempt of court in an industrial context, and the first time that contempts of court committed in an industrial context have been explicitly found to be criminal.

It is worth noting that a number of the CFMEU (Construction and General Division) officials found to have been involved, continue to hold senior executive positions within the union.

Given its demonstrable contempt for the rule of law within its senior leadership, it is hardly surprising that the CFMEU continues to be an outspoken critic of the Royal Commission into Union Corruption and Governance, the recent move to establish a joint federal / state police taskforce and calls to re-establish the ABCC.

Master Builders is concerned, however, by the level of support the CFMEU continues to receive from the broader union movement, including its peak body the ACTU and its political arm, the Labor Party (and in a less formal sense, the Australian Greens). Whilst the CFMEU’s position can be clearly understood by its contempt for the rule of law, its apparent support from the broader union movement within Australia is disappointing to say the least.

RC Update – Counsel Assisting submissions

The Royal Commission’s own lawyer has called for wide ranging reforms to laws covering union governance and the conduct of union officials.

Counsel Assisting the Royal Commission, Jeremy Stoljar QC, provided written submissions on 31 October 2014. The submissions reveal that the Royal Commission will call for wide ranging reforms to the laws covering union governance and the conduct of union officials, as well as recommending that the relevant authorities in Victoria consider whether John Setka and Shaun Reardon ought to be charged with blackmail.

The potential blackmail charges arise from the alleged threats made against Boral to cease concrete supply as part of the CFMEU’s ‘war’ with Grocon, resulting in the secondary boycott ‘black bans’ that are currently the subject of contempt of court proceedings by Boral against the CFMEU. These ‘black bans’ appear to also put the CFMEU in contravention of both the Competition and Consumer Act 2010 (Cth) and the Competition Policy Reform (Victoria) Act 1995 (Vic).

More broadly, the submissions argue that the evidence is suggestive of “… a pervasive and unhealthy culture within the CFMEU.” It found (p. 557):

(a) the law is to be deliberately avoided, and is to be regarded as an irrelevance, where it stands in the way of achieving the union’s objectives

(b) members of the organisation prefer to lie rather than reveal the truth and betray the union

(c) those who speak out about union wrongdoing are vilified by the union, and their reputations become the subject of subject of baseless slurs.

Specific reference is also made to the demonstrated “… criminal, unlawful and unprofessional conduct undertaken by officers of the CFMEU…”, which has allegedly included (p. 557-558):

(a) blackmail and extortion perpetrated by officers of the CFMEU in Victoria and Queensland;

(b) boycotts, cartel and other anti-competitive behaviour by officers of the CFMEU in Victoria and Queensland;

(c) covert action undertaken by the New South Wales State Secretary of the CFMEU to convince senior employees of Cbus secretly to hand over to the CFMEU the private information of Cbus’ members in breach of the Privacy Act and other legislation, contracts and professional standards, and the subsequent misuse of that information by the Secretary;

(d) the making of a death threat by one CFMEU New South Wales organiser to a fellow organiser (Mr Fitzpatrick), the failure on the part of senior officials to undertake any proper and considered investigation into the incident, and the subsequent victimisation of the complainant by those same officials;

(e) organising and engaging in industrial action in deliberate defiance of orders made by the Fair Work Commission and the Federal Circuit Court of Australia;

(f) obstructing Fair Work Building inspectors in the performance of their statutory duties through intimidation, insults and generally threatening behaviour.

Master Builders strongly supports the Royal Commission in its efforts to ensure that no one is above the law.

Samuel to review Cbus

Former chairman of the ACCC, Graeme Samuel, will review governance arrangements at superannuation fund Cbus.

This has arisen after the leaking of members’ private details to the CFMEU was exposed as part of evidence before the Royal Commission into Trade Union Governance and Corruption.

The move comes amidst damaging claims that the two Cbus employees allegedly involved had also committed perjury by providing deliberately false information to the Royal Commission.

Executive Manager Maria Butera’s evidence was labelled “farcical” by Royal Commissioner Dyson Heydon QC, whilst (now former) Senior Co-ordinator Lisa Zanata admitted to providing false testimony.

Master Builders strong supports efforts to improve the corporate governance of industry funds such as Cbus. It is expected that Mr Samuel’s review will be completed by the end of the year.

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