BUILDING unions have warned an industry superannuation fund it must reconsider its links with builder Grocon or risk members deserting it for more "worker friendly" schemes.
The warning stems from the fall-out over the unresolved dispute between Grocon and the Construction, Forestry, Mining and Energy Union, which paralysed part of central Melbourne in August and September. That dispute is before the courts.
But building unions are widening the campaign against Grocon to target the $18 billion Cbus Super and its chairman, former Labor Premier Steve Bracks, saying if they did not respond adequately to their concerns it would "be at their peril". Cbus is the default fund for building workers. It has almost 700,000 members and substantial investments in the construction sector.
The unions' tactics resemble the campaign by environmentalists against Gunns timber group, where they pressured the company's investors and financiers over its corporate practices.
Electrical Trades Union assistant state secretary Troy Gray said the building unions had been unhappy with the response from Cbus after union members raised concerns their super was being used to fund Grocon projects.
"We're less than impressed by the response of Cbus," he said. "If they don't address it, it'll be at their peril."
Cbus invests in a range of funds including Colonial First State, which has a strong relationship with Grocon and is using it for building work on a $430 million redevelopment of 5 Martin Place in Sydney. Last year Grocon built a 29-level tower in Sydney for Cbus and another fund.
Mr Gray said Cbus needed to respect its commitments to ethical investments and labour rights. Cbus is a signatory to the United Nations Principles for Responsible Investment which requires environmental, social and corporate governance issues be considered in investments.
Bill Oliver, state secretary of the CFMEU, also said his members were unhappy with the Cbus response. "They're disappointed Cbus would give a job (5 Martin Place) to a builder that is suing the union. If Cbus don't start hearing and listening to the membership, anything is possible."
Cbus chief executive David Atkin said it was in regular talks with "stakeholders, including unions" and its door is always open.
Mr Atkin said it required its fund managers to assess risks around environmental, social and governance risks, such as workplace safety, as "part of every investment decision they make." But he would not comment directly on the union comments about switching funds.
The union campaign is politically delicate with nearly half the members of the Cbus board being current union officials including ACTU president Ged Kearney and building union leaders Dave Noonan and Cesar Melhem.
The remainder are employer representatives as well as the independent director former federal Labor treasurer John Dawkins and Mr Bracks, who is appointed by the ACTU.
A source close to the Cbus board dismissed the push and said it would be irresponsible to allow it.
The ETU's Mr Gray said Cbus must call in its investment managers to make sure "their investments meet minimum requirements around workplace rights and freedom of association".
The CFMEU dispute with Grocon was sparked by disagreement over the appointment of shop stewards and the right to display union paraphernalia at the company's sites.
Grocon has repeatedly rejected union claims about its safety record or attitude towards worker rights.
Grocon is now suing the union for $10.5 million, and told the Supreme Court the picket line was a deliberate attempt to intimidate its staff.
Frequently Asked Questions about this Article…
What is the Grocon dispute and how did it start?
The dispute between builder Grocon and the Construction, Forestry, Mining and Energy Union (CFMEU) began over shop steward appointments and the right to display union paraphernalia on Grocon sites. The conflict led to pickets that disrupted parts of central Melbourne and is now before the courts, with Grocon suing the union for $10.5 million.
Why are building unions targeting Cbus Super over its ties to Grocon?
Building unions say Cbus Super, the $18 billion default fund for building workers, has links to Grocon through investments and contractors. Unions are concerned members' super may be used to fund Grocon projects and are pressuring Cbus to reconsider those links or risk members deserting for more 'worker friendly' schemes.
Does Cbus Super directly invest in Grocon projects?
The article says Cbus invests through a range of fund managers, and some of those managers have strong relationships with Grocon. For example, Colonial First State — one manager used by Cbus — is using Grocon for work on the $430 million 5 Martin Place redevelopment, and Grocon built a 29‑level tower last year for Cbus and another fund.
How has Cbus responded to union concerns about ethical investing and labour rights?
Cbus chief executive David Atkin said the fund is in regular talks with stakeholders, including unions, and that its door is always open. He also stated that Cbus requires its fund managers to assess environmental, social and governance (ESG) risks — such as workplace safety — as part of investment decisions. The fund is a signatory to the UN Principles for Responsible Investment.
Could Cbus members actually switch funds because of the Grocon controversy?
Building unions have warned that members might desert Cbus for more 'worker friendly' schemes if their concerns aren't addressed. The article reports the warning but does not provide details on any mass switching or the mechanics of switching funds.
What governance issues at Cbus are relevant to this campaign?
The article notes nearly half the Cbus board are current union officials — including ACTU president Ged Kearney and building union leaders — while the rest are employer representatives and independent directors such as former federal treasurer John Dawkins and chairman Steve Bracks. That board composition makes the campaign politically sensitive.
What legal actions are being taken in the Grocon–union dispute?
Grocon is suing the union for $10.5 million, and in court has argued the picket line was a deliberate attempt to intimidate its staff. The broader dispute remains unresolved and is before the Supreme Court, according to the article.
What should everyday investors watch regarding super funds and construction-sector exposures?
Everyday investors should watch how super funds disclose and manage construction‑sector exposures and ESG risks. In this case, unions are calling on Cbus to ensure investments meet minimum standards on workplace rights and freedom of association. Investors can look for fund statements on engagement, ESG risk assessments, and whether funds are signatories to initiatives like the UN Principles for Responsible Investment.
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