Building on Bad Form

Australians rightly look with disdain and dismay at the endemic corruption in other countries.  But they need to start looking at home, for corruption is alive and flourishing.

The Report of the Cole Royal Commission, released last week, outlines in forensic detail both the nature and extent of the corruption in the building and construction industry.  The Report found:  violence to person and property to be common-place;  widespread misuse of money and property;  systematic flouting of the law;  violation of civil liberties;  and exploitation of positions of trust.

The cost of this lawlessness is enormous.  The building and construction sector has a turnover in excess of $40 billion nationwide ($9 billion in Victoria), a workforce in excess of 500,000 and links to all other sectors via the provision of essential capital services.  In Victoria -- where the lawlessness was found to be most rampant -- the cost, in terms of higher construction costs alone, is estimated to be around $3 billion per annum.  The problem, however, goes beyond the economy to very the fabric of society.

Unions play a pivotal role and, accordingly, were a central focus of the Inquiry.  The Inquiry, however, examined in detail all activities and players in the sector and found systemic failure.

It found that corruption, like a tango, requires cooperation or at least the acquiescence of other parties.  Employers and employer associations in the end agreed to most of the illegal and inappropriate dealings.  Moreover, they seldom pursued the many remedies available to them to bring the rule of law to the sector.  The Report makes clear that many employers and employer associations have benefited from the process.  In particular, in exchange for their capitulation, the unions help keep competitors at bay and sub-contractors in line.

The Inquiry found state governments, and in particular the Victorian Government, to be culpable.  The states have both an interest and a responsibility to maintain the rule of law in the sector.  They are the largest financiers of the sector and are largely responsible for the carriage of justice.  Yet the Inquiry found the states to have systematically failed to carry out their responsibilities and have, in effect, been the main underwriters and protectors of corrupt practices.  The Victorian Government not only refused to co-operate with the Inquiry but now refuses to accept its findings.  Given that the construction unions are some of the largest financial supporters of the ALP, the Bracks Government's actions raises concerns about its links to corrupt practices.

The unions readily admit that "virtually everything we do breaches part of the Act [Workplace Relations Act]".  They rationalise their actions by claiming that they "act in the name of workers against an unjust law".  This is both false and inadequate.  Generally, workers are not the beneficiaries of these actions but the losers.  The laws against assault and battery, destruction of property and misuse of trust funds are not unjust laws.

Moreover, as the Federal IR Minister recently stated:  "The rule of law is not a smorgasbord from which a few favoured items can be chosen and the rest ignored".

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