An open letter to Boral's Mike Kane

Mike,

I’ve just read your letter of July 7 to the Royal Commission into Trade Union Governance and Corruption.

Congratulations on your strong determination to stand up to attempts by the construction union, the CFMEU, to put Boral out of business. As you state, you are being targeted by the CFMEU because you continue to supply concrete to the CFMEU’s hated construction firm, Grocon. 

Congratulations also to your staff, management team, subcontractors and owner-drivers, whom you describe as all being under extreme pressure from intimidation by the CFMEU and loss of income caused by the union’s actions.

At least in this instance you are not on your own. You are standing with Grocon. Inevitably more firms and suppliers must also be required to support law and order in our community.

You describe the “illegal conduct” of the CFMEU and the direct threats made to Boral by CFMEU officials. You suggest that these threats should be investigated as potential breaches of the Crimes Act, as blackmail, as well as potential breaches of federal competition laws. Further, that you have taken every legal step you can to require the CFMEU to comply with the law but the CFMEU ignores legal directions against it.

What is of significant interest is your point that a ban by the CFMEU “… always involves a competitor being willing to benefit from the illegal ban, sometimes even assisting the CFMEU illegal ban in order to obtain benefit”. You say there should be legal consequences for competitors’ involvement with the CFMEU in these instances.

On this point you have exposed the ugly, unspoken truth of the Australian industrial relations system. The fact is that wherever union illegal activity, thuggery and intimidation exists against one business, there is inevitably collusive coordination by the union with a competitor.

On this point you might be interested in our submission to the 2014 Productivity Commission inquiry into public infrastructure. We detail the system of collusive behaviour that plagues Australian construction and include examples. Many of Australia’s supposedly most-respected industry associations are in direct collusion with unions, manipulating who wins and who loses in their industries. 

The further fact is that this situation will never be fixed while the focus remains exclusively on the illegal behaviour of unions. Equally, when such situations as yours occur, competitors must be put under the legal ‘gun’ of investigation. Executives in firms that collude with unions must face the likelihood of criminal sanction including jail. If this were to occur, we suggest that there are many construction executives in Australia who, on past and current behaviours, should be fearful of jail.

In this respect, the commission of inquiry to whom you direct your correspondence has the power, we believe, to undertake such investigations. The commission’s terms of reference include it considering “… activities of any other person or organisation in respect of which you consider that there are credible allegations of  involvement…”

What should occur in your current circumstance is a flood of subpoenas directed to the companies -- and their CEOs -- currently supplying concrete to the Melbourne construction sector. The subpoenas should require those concrete companies to fully explain their relationships with the CFMEU, with a view to investigating possible collusion. Those subpoenas should come from the commission of inquiry, Victoria Police and the ACCC, at least.

In addition, those concrete companies should be investigated for breaches of the Victorian Construction Code of Conduct. The Victorian government has an investigative team to undertake this task. If found to be in breach of the code, those companies should immediately be banned from supplying concrete to any Victorian government construction project now under way or into the future.

If banned in Victoria, those same companies should also face immediate bans in supplying concrete to government construction projects in NSW and Queensland, where similar codes of construction operate.

It’s no good for government and ordinary people to feel ‘sorry’ for the commercial pain your company, your employees and owner-drivers are suffering. We can praise you for your stand but ‘we’ are not suffering. The truth is that your competitors are financially benefiting from your pain.

It is only when your competitors also suffer pain that the control of the construction sector by this union mafia will cease.

We hope also that your bankers stand beside you. If your bankers pressure you and your owner-drivers, they are as (morally) guilty of union collusion as potentially are your competitors.

Warm regards,

Ken Phillips

Ken Phillips is executive director of Independent Contractors Australia and author of Independence and the Death of Employment.