Cleanup for Australian construction

By GREG ANSLEY in Canberra

In the coming weeks, as the political fury over the Iraq war dies down and the dust from next Tuesday's federal Budget settles, Workplace Relations Minister Tony Abbot will take another timebomb into the Australian Parliament.

Abbot has already lobbed a bagful into both Houses on Capital Hill, most notably the unfair dismissal bill and other industrial reforms that have been blasted out of the water in the Senate and given the Government any number of potential triggers for the dissolution of Parliament and a new election.

Abbot's latest proposal is a new, powerful regulator for the nation's corruption-riddled construction industry, dragged through the coals over the past two years by a royal commission.

The commission's key recommendation was the creation of an Australian Building and Construction Commission with power to investigate, root out and prosecute corruption in the A$35 billion ($39 billion) sector.

It would be accompanied by a national commissioner for occupational health and safety and legal penalties including fines of up to A$20,000 for individuals and A$100,000 for organisations.

Employees would be required to vote in secret ballots before striking, union bargaining power would be diluted by outlawing pattern bargaining - under which different industrial agreements expire on the same day - and union and employer associations would be made responsible for the action of their officials, employees and organisers.

To top it off would be a crackdown on tax avoidance in the industry.

Some of these functions are already performed by an interim taskforce set up after commissioner Terry Cole's mid-way report last year, operating from Melbourne with 25 staff and working closely with the Australian Federal Police, the Taxation Office and the Competition and Consumer Commission.

Backed by initial funding of A$6.5 million, the taskforce investigates and recommends prosecution for breaches of federal criminal and civil laws under Abbot's "zero tolerance" policy.

How "interim" the taskforce remains is highly problematic. To replace it with the new commission, Abbott has to win the agreement of the state Governments, all of which are Labor and oppose the present form of the proposals.

They are heartily supported by the union movement, which has bitterly opposed the commission from the start, regarding it as a biased attack on unionism and a product, among other epithets, of "Stalinist witch-hunts".

Unions point out that employers spent only eight hours in the dock; unionists were grilled for 580 hours.

The Australian Council of Trade Unions is mounting a determined campaign against the Cole recommendations, warning the proposed measures will inevitably flow out of construction into the unions of every sector in Australia.

And Abbot faces a hostile Senate that routinely casts Government legislation back to the Lower House and has little stomach for most of his reforms.

But there is widespread acceptance that construction is in need of a clean-up.

The commission was set up after a long history of violence and corruption in the industry - leading to deregulation of the notorious Builders Labourers Federation in the 1980s - and a damning report by the Government's Employment Advocate.

This alleged "significant corrupt and coercive and collusive practices" by unions, including misuse of funds, abuse of authority, threats, intimidation and standover tactics, tax evasion and breaches of company law.

In July 2001, retired New South Wales Justice Cole, an expert in commercial law who specialised in construction, was appointed to head a commission that would sit for two years and produce a 23-volume report.

He himself became a figure of controversy when his remuneration became public - A$660,000 a year, with an additional allowance of A$300 a week, accommodation of A$3250 a month, and a travel allowance of up to A$230 a day.

His commission's tinder was set from the start.

The Victorian branch of the key sector union, the Construction, Forestry, Mining and Energy Union (CFMEU), refused to take part, defied commission orders, and saw its secretary, Martin Kingham, charged with contempt.

From day one, commission hearings were besieged by thousands of protesters, and even with federal promises of places in the national witness protection programme for whistleblowers, Justice Cole after six months complained lack of co-operation from all sides threatened its work.

Further outrage erupted when a Senate committee learned the commission was being fed transcripts of union conversations obtained through phone taps.

But the evidence gathered by Justice Cole was deeply disturbing.

The proceedings were populated by thugs such as Gary Carter, a convicted armed robber and union enforcer turned state's evidence who claimed to have "sorted out" 200 Melbourne industrial disputes and achieved 100 per cent union membership on his sites.

Carter's methods were simple: Threats to break limbs or, in the case of one recalcitrant sewage contractor, to hurl him into one of his own pits.

In WA, major construction firm John Holland allegedly routed more than A$700,000 through a scaffolding contractor as secret payments to specialist workers to hide the fact they were being paid more than other employees.

Justice Cole heard repeated claims of union officials threatening violence or industrial action to shut down sites unless they were covered by union-sponsored workplace agreements.

In WA, Multiplex Constructions was alleged to have paid the CFMEU A$250,000 for phantom workers in return for industrial peace and other firms spent at least A$350,000 over three years in illegal strike payments.

In Melbourne, workers rampaged through the National Gallery renovation site, causing A$150,000 damage in a demarcation dispute between the CFMEU and the rival Australian Workers Union, later prompting the State Government to delay the awarding of another large contract for fear of similar trouble.

Unions later got a A$250,000 payoff from National Gallery contractor Bauldistone Hornibrook for peace on the site.

Across Bass Strait, a Tasmanian Communications, Electrical and Plumbing Union official threatened to use thugs, secondary boycotts and barricades to enforce a new pay deal.

And in Sydney, CFMEU officials allegedly threatened harm to the children of one construction site administrator if she did not sign an agreement with the union, and to break the arms of another employer.

According to other evidence to the commission, CFMEU officials were also involved in money laundering, corrupt payments, providing free prostitutes to complaisant subcontractors, and even illegally selling Viagra on building sites.

In his final report, Justice Cole said Australia's construction sites were marked by a "culture of disregard for the law" that in WA had made threatening and intimidatory conduct by the CFMEU a hallmark of the industry.

In Victoria, he said, the rule of law "has long since ceased to have any significant application" on sites.

Justice Cole recommended charges against 23 union officials and eight employers, and listed more than 390 lesser offences by unionists, firms and individuals. But while almost 70 cases have already been referred to prosecutors, the major thrust of Justice Cole's report - a new, tough and legally well-armed regulator - remains for the moment in political no man's land.