Construction companies who witnessed first-hand the cost of corruption and criminal involvement on Victoria’s Big Build sites are pushing for the Allan government to outlaw coercive industrial practices that enabled the CFMEU to control the flow of billions of dollars of public funds.
Construction giants including John Holland, Lendlease, CPB Contractors and Acciona met on Thursday night to discuss the latest fallout from the Building Bad scandal, which this week intensified pressure on Victorian Premier Jacinta Allan to strengthen her government’s response to endemic corruption on major projects.
The meeting came as the founding chief executive of Victoria’s Independent Broad-based Anti-corruption Commission, Alistair Maclean, called out the government, the public service and integrity agencies for failing to act on growing evidence that something was seriously wrong. Writing for this masthead, Maclean urged the government to “come clean” on its failure to stop the rot.
“For years, principally due to the investigation by The Age, there has been strong evidence of serious corruption and crime on significant publicly funded infrastructure projects,” Maclean writes.
“The inaction of the government, and the institutional failure of the public service and integrity agencies to respond, is cause for independent inquiry. But an inquiry shouldn’t be cause for (post-election) delay.
“The government needs to come clean on its failures. Parliament needs to consider and pass amendments to relevant legislation. The public service – particularly those agencies charged with project management – need their practices and performance reviewed. And integrity agencies need to assert their independence and use their powers.
“The lack of resolve, in the face of seriously bad behaviour, has been shocking.”
Every Big Build project has its own, government-appointed authority and is additionally managed or regulated by the Victorian Infrastructure Delivery Authority, Industrial Relations Victoria, WorkSafe Victoria and the Workforce Inspectorate Victoria.
“What were heads of departments advising their ministers?” Maclean asked. “Where were the internal reviews when the cost blow-outs on these sites became clear. If you have got bikies working on site as CFMEU health and safety reps, doesn’t that compromise safety?”
The rare public intervention of Maclean, a career diplomat and public servant who ran IBAC from its establishment in 2013 to 2020, follows the refusal of the Allan government to support proposed law changes introduced by the Greens to give the anti-corruption agency “follow-the-money” powers to investigate the misuse of public funds by private entities.
While the government’s refusal to give the watchdog more powers was attacked by the opposition, which supports the Greens proposal, Labor frontbencher Ingrid Stitt accused the Greens of a stunt and said the government was developing its own IBAC reform bill. A parliamentary inquiry last year recommended the agency be given a broader jurisdiction and greater powers, including a “follow-the-money” remit.
Allan referred allegations of serious corruption on Big Build sites reported by The Age, 60 Minutes and the Australian Financial Review to IBAC in July 2024, but the watchdog assessed the matters raised as outside its jurisdiction.
Inaugural IBAC commissioner Stephen O’Bryan said that even if the agency wanted to investigate the matters raised by the premier, it would have required substantial, additional resources from the government. “Sadly for Victoria, calls for improved IBAC jurisdiction and resourcing for major cases like this have been consistently ignored, deflected or rejected,” he said.
Maclean joined the Centre for Public Integrity, former IBAC commissioner Robert Redlich, the Business Council of Australia, the Victorian opposition and all crossbench MPs in parliament’s upper house in calling for a royal commission or similar inquiry into the Building Bad scandal.
The scale and estimated $15 billion cost of corruption on government-funded construction sites was documented by Geoffrey Watson, SC, a barrister and anti-corruption campaigner commissioned by CFMEU administrator Mark Irving to investigate allegations the union had been infiltrated by organised crime.
Premier Allan, while agreeing a “rotten culture” had taken root at Big Build sites, has ruled out a royal commission. She said the government had already taken steps to fix the problem, including tougher labour hire laws, mandatory reporting requirements and greater information sharing between Victoria Police, the Australian Federal Police and building and construction regulators.
The bosses of the big construction firms gathered at a board meeting of the Australian Constructors Association (ACA) to develop their response. The meeting was addressed by Fair Work Commission chief Murray Furlong, who sheeted blame back to the construction companies for not doing enough to stop corrupt practices at their work sites.
“We all recognise that we have a role to play,” association chief executive Jon Davies said. “That is certainly what Murray was keen to discuss.” Furlong declined to comment when contacted by this masthead.
Davies said ACA members were not convinced a royal commission was needed but would push for the government to introduce a statewide construction code to prevent the CFMEU from controlling through enterprise agreements which subcontractors were given government-funded work.
The ACA also wants a fit-and-proper-person test introduced for union health safety delegates. The Watson report detailed how the CFMEU under former state branch secretary John Setka used criminal associates, including convicted and alleged killers, as health and safety delegates.
Davies said “weaponising” workplace safety concerns and strong-arming the choice of subcontractors were tactics used by the CFMEU to wield disproportionate influence on building sites. He said while the ACA backed steps taken by Irving to clean up the union, it was concerned that the CFMEU would revert to type once it comes out of administration in August next year.
The ACA has also warned that CFMEU-style tactics were being adopted by other unions.
“Our view is there has to be legislative change and increased governance to prevent this happening again,” Davies said. “We can’t just rely on people doing the right thing and having the right people lead the union.
“We don’t have a strong view on the need for a royal commission. We think there is more than sufficient evidence out there already to take action. We do have a strong view on the need for further substantive reforms to ensure we don’t end up back where we started.”
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Chip Le Grand leads our state politics reporting team. He previously served as the paper’s chief reporter and is a journalist of 30 years’ experience.Connect via email.
