Inside the Royal Commission into Trade Union Governance and Corruption
It was a big news day in Melbourne’s courts on Tuesday. A TV star successfully appealed her indecent assault charges. A mother charged with murdering her three children by driving them into a lake faced a pre-trial hearing. But the reason the street had closed just outside the Magistrates’ Court – jammed with thousands of protesters – was because of a four-minute hearing inside.
That hearing was a result of the Royal Commission into Trade Union Governance and Corruption, after commissioner John Dyson Heydon recommended Victoria’s Construction, Forestry, Mining and Energy Union (CFMEU) secretary, John Setka, and his deputy, Shaun Reardon, “be charged with and prosecuted for blackmail”. This referral to prosecuting authorities was just one in a long list contained in the commission’s interim report, released late last year.
Fluoro-vested builders marched through the city and gathered in the court precinct. Before entering court, Setka took a microphone and told the crowd the story of his arrest – as he saw it, an example of police persecution. “We’re union officials and we know we’re gonna cop some shit now and then, but to be pulled over on a Sunday afternoon coming back from Vic Markets with your kids in the car in a side street in Melbourne by Heracles detectives–”
At this point, Setka was briefly interrupted by booing by those in the crowd aggravated by the reference to police. “Fucking pigs!” someone yelled. Setka continued. “I asked them if this was necessary? You know where we work. You can come in for an interview… the royal commission has been attacking all the construction unions for two years now. One of the reasons they hate us is because we’re so successful. We work in one of the most dangerous jobs in the world… They’re trying to turn us into Nazi Germany, this Coalition government.” More boos.
The commission found last year that Setka had threatened concrete company Boral with black bans if they continued to supply their product to construction giant – and CFMEU nemesis – Grocon. Dyson Heydon described the union as “militant”. Interpretations of the protest ran along the same lines as those of the commission – you were either with them or against them. Among the angry faces, tattooed arms and T-shirts bearing slogans such as “God forgives, the CFMEU doesn’t” you saw either class solidarity or a brigade of thugs. Talkback filled with fulminations about protest – was it intimidation or democratic expression? – and the whole thing was reduced to theatre. But like the commission itself, our popular interpretations are based upon preconceptions and they bury fascinating, specific issues.
Tim Lyons says the commission was haunted by politicisation from the start. Lyons is the former assistant secretary of the Australian Council of Trade Unions (ACTU), and now a research fellow at think tank Per Capita. “It’s reasonably difficult to think of royal commissions – even state ones – that didn’t have a broad political consensus. Pink batts might be one. But this was a very contested space,” Lyons tells me.
“I think the commission suffered from the conceit it went in with. None of these characters have any experience with industrial relations, or any sympathy or understanding of trade unions. Dyson Heydon came to this thing seeing monsters under every rock.”
Perceptions of politicisation began early, Paul Karp says. Karp has been reporting on the commission for Thomson Reuters. “The Coalition initially wanted a judicial inquiry into trade unions, with a focus on AWU Victoria and Julia Gillard’s involvement in the early ’90s,” he says. “Once the Coalition won government, there were some high-profile reports about alleged corruption and criminal connections in Victoria’s and NSW’s branches of the CFMEU – and it changed to a royal commission. It was exposed to accusations of politicisation from the start and much of the commission’s first year looked at AWU and it pulled Gillard into the box. But it didn’t add much to what we already knew. Then [Fairfax Media’s] Latika Bourke’s scoop [about Dyson Heydon’s agreement to speak at a Liberal fundraiser] kicked off claims of politicisation for young and old.”
One of the high-profile reports Karp mentioned was a joint investigation between the ABC’s 7.30 and Fairfax. It ran allegations from Andrew Zaf – a Melbourne builder – that he was forced to provide Setka with a free roof. After the stories ran, Zaf alleged that he had been stabbed outside his home in what he presumed was a retaliatory assault. The stories were explosive – and excitedly adopted by the Coalition as vindication.
The problem was that Zaf was far from credible. Under examination, his stories fell apart. He was also – bizarrely – accused of stabbing himself in order to frame the union.
“In the box he effectively had zero credibility,” Lyons says. “There were suggestions that he had injured himself deliberately – it was a mess.” Dyson Heydon stated that no adverse findings would be found against the CFMEU that were based upon Zaf’s allegations. It was another own goal.
But to consider the commission a failure is myopic. While it spent much of its first year almost fruitlessly pursuing the Gillard–AWU scandal, it turned its attention to other things in 2015. “I think the best work of the commission has been done this year,” Karp says. “It looked at things not already being investigated, for example new allegations of corruption in the CFMEU ACT and Queensland branches, and those were important things.”
The interim report was enormous, and contained a lengthy list of referrals. There was also a third, confidential volume, which was described by Heydon in fascinating terms. Speaking of the suppressed volume, the commissioner wrote: “The confidential volume deals with 29 threats to witnesses. It is necessary for that volume to be confidential in order to protect the physical wellbeing of those witnesses and their families. This is unfortunate, because the confidential volume reveals grave threats to the power and authority of the Australian state.”
Because of the privacy of this volume – and the presumably explosive details it contains – it’s difficult to properly appraise the success of the commission. “It’s hard to judge the impact of the interim report – or to second-guess the final report – because [of the] third confidential volume of the interim report,” Karp says. “I think it’s gone to the attorney-general and prime minister, but it hasn’t been circulated widely. The most sensational parts of it are under wraps. These came from private hearings. Senator [Jacqui] Lambie has been trying to see the report all year. She says she needs to see it if she is to properly decide on legislation that would reinstate the ABCC [Australian Building and Construction Commission].”
Application of law
Among the political theatre, there is an often-overlooked matter of law. It lies at the heart of Setka’s charges – and the protests against them. The issue is the application of criminal law in matters of industrial dispute – normally the province of civil law.
John Setka wrote to union members: “The involvement of police in what is a purely industrial matter goes against a hundred years of industrial law in this country, and is nothing but an absolute disgrace. Johnny Lomax is being branded a criminal for negotiating a better deal for working people. That’s my job, too ... That’s what every union official in this country and all over the world does. His arrest is a vicious and direct attack on our ability to protect our wages and conditions.”
Lomax is a CFMEU official – and former Canberra Raiders rugby league star – who was charged in August with blackmailing a company into signing an enterprise bargaining agreement. Those charges were dropped two months later. “It was a farce,” says Lyons. “Lomax is saying to a company that they need to sign up to industry standard contracts. That’s absolutely standard practice. I’ve done that. Now, if that’s blackmail – well, then I’m guilty of blackmail.
“The Setka and Reardon charges sets an alarming precedent. I think NGOs should be alarmed, as well as unions. This will have a deadening effect on people’s capacity to organise. The use of criminal law in these circumstances is basically unprecedented in four or five decades.”
In public life, there are some issues that reliably arouse passion and intense certitude, if not a commensurate thoughtfulness. Taxation, debt and refugee policy are three. Unions are another. These issues serve as a proxy for our broader politics – just ask pollsters – and as such they are dependable wellsprings of political rhetoric. These things – complicated knots of history, culture and legislation – don’t need to be explained. Their mere invocation is enough to usefully stir the blood of the electorate.
Our opinions on unions have become shorthand for little analysed but ardently held beliefs on either collectivism or the individual. “I think generally, people’s ideas about unions are impressionistic,” Karp says. “There’s a lot of preconceptions.”
Unions are all good or all bad – ennobling or parasitic. It’s an inadequate base for debate, but it’s what we have. Debt, borders, unions – these are reduced to prize fights. Profligacy versus austerity; insecurity versus inhumanity; thugs versus labour rights. It’s a feedback loop of mutual contempt, and it’s been happily reinforced by Canberra’s tribal politics for years. Unsurprisingly, it’s a binary that has framed interpretations of this commission as either a political witch-hunt, or an overdue uncovering of union graft. But things, of course, are a little more complicated.
‘A PR problem’
Over the past decade, Australia’s building sites have averaged 36 deaths a year. Given this, you might think it frustrates builders that most of us know nothing about the material construction of our national obsession. We simply buy, rent and occupy property. We don’t know the deceased’s names. Know nothing about the dangers. Know nothing of Acrow props, or bony concrete, or the perils of occupying a floor beneath a concrete pour. But ask the family and colleagues of Nathan Park. We aren’t even aware of our ignorance – but the builders are.
On the eve of Good Friday 2013, a brick wall collapsed onto a busy Melbourne street. It was the remnant of an otherwise vanished brewery, and fronted a vast and vacant site owned by Grocon developers. An advertising hoarding – tacked onto the wall – had served as a sail in strong winds, and the wall collapsed fatally over a busy footpath. Three died.
The Victoria CFMEU offices are across the road. Bizarrely, this tragedy had braided the rivals – the union and the construction company. John Setka and Shaun Reardon were two of the first people on the scene, frantically pulling bricks off the victims. Grocon was fined $250,000 after pleading guilty to a workplace safety charge.
This is offered not to romanticise the union, but to suggest histories, cultures and grievances that elude our preconceptions. It is also true that Setka is combative, bellicose and given to gross hyperbole. He has a long string of violent convictions – including the assault of a police officer. He calls notorious underworld figure Mick Gatto a friend.
No one would suggest that corruption in the construction industry – globally, a place notorious for it – should not be properly investigated and prosecuted.
“There is a PR problem,” says Lyons. “The stuff that’s damaging and beyond the pale – violence. The price of wanting to be militant and acquiring power for the workers is that it means you have to be squeaky clean. That means that violence is completely unacceptable. Not only is it immoral, but it’s bad tactics. When you push for industrial relations reform in the unions, you get placed under a microscope. That said, building unions are under siege. In my lifetime they’ve been the No. 1 class enemy.”
Spectre of bias
The commission, hamstrung by the spectre of bias – and our own personal preconceptions – have blunted a finer appreciation of what is being investigated. “People pay small attention to the entirety of what TURC [the trade union royal commission] has done,” Karp says. “There’s valuable and less valuable stuff.”
Tim Lyons, meanwhile, wonders how the commission’s final report will feature in an election year. “Turnbull will be under a lot of pressure to announce industrial relations policy for the red-meat eaters. To go a bit WorkChoices. The question is whether the Coalition will use the report as a proxy to attack those things in the lead-up to an election.”
The commission’s report is due by December 31.
This article was first published in the print edition of The Saturday Paper on Dec 12, 2015 as "Talking TURC". Subscribe here.