CHAPTER 2
The Cole Royal Commission
2.1
In submissions and public hearings, the Committee repeatedly heard that
evidence undermining the economic case for the re-establishment of the ABCC and
concerns about its limitations on civil and political rights can be swept aside
because the Cole Royal Commission into the Building and Construction Industry
found evidence of widespread unlawfulness and criminality in the industry.
According to the ABCC’s supporters, the findings of the Cole Royal Commission
into the building and construction industry trump every other consideration;
they are unimpeachable and the Royal Commission infallible.
2.2
Examples include the following, which are representative of the type of
submission made in this regard:
In connection with the regulatory structure, you might ask
why there is a need to restore an entity such as the ABCC with the powers
proposed in the legislation. You only need to briefly examine the reports of
the Giles Royal Commission and the Cole Royal Commission to see the reason for
this.[1]
2.3
From the Australian Mines and Metals Association:
Royal Commissions enjoy a unique and
influential status in our legal system with very good reason. The specific
remedial recommendations of any royal commission must inherently enjoy the
strongest presumptions towards being followed by our parliament and to be above
the vagaries of political fortune and change. There is no basis for this
parliament to continue to fail to properly implement the specific
remedial institutional recommendations the Cole Royal Commission handed down
to begin to fix the proven culture of lawlessness in this industry.[2]
2.4
This is a particularly interesting submission. For reasons that will
become clear in the consideration of the nature of Royal Commissions that
follows, the presumption that lies at the heart of it is the proposition that
the Parliament is subservient to the Executive. It is a submission which if
accepted would lead to a substantial undermining of the separation of powers.
2.5
Mr Barklamb from the Australian Mines and Metals Association proved in
his evidence to be an especially enthusiastic supporter of the proposition that
the Cole Royal Commission’s findings and recommendations ought to override all
other considerations:
Senator CAMERON: I just have a different view: I do not see that royal commissioners, even with all their investigative powers and all the coercive powers that are available to them, always get it right. That is the point. You say no-one can question Cole. Well,
I am questioning
Cole. It was done
in a
highly political environment.
Mr Barklamb: You are correct that our industrial relations system in debate is always inherently political. I
know of no basis to question the probity, accuracy or rigour of the Cole process, nor the findings that were made.
But the point we
would make
is that we
think
Cole—
Senator CAMERON: There are plenty of critiques out there, Mr Barklamb; you just may
not have seen them or you may have
been out of the country.[3]
2.6
In answer to a question from Senator Wright as to why people employed in
the building and construction industry should be treated differently to anyone
else, merely on the basis of the industry in which they are employed, Mr.
Calver on behalf of Master Builders Australia said:
The answer to that question is that the example to which you allude was not the subject of a royal
commission. The behaviour of all participants in the building and construction industry was the subject of a comprehensive royal commission—the
Cole royal commission. Before that, it was the subject of a comprehensive state based royal commission—the Gyles commission—in New South Wales. Each of those royal commission(s)
pointed to the fact that the industry needed different and separate regulation, and we rely on those findings, which are
continued into this
bill.[4]
2.7
The Minister for Education and Employment put his view quite succinctly:
The need for the Australian Building and Construction
Commission is clear. The Cole Royal Commission suggested it.[5]
2.8
The Committee takes a far more cautious approach. The parliament must
not interfere lightly with the human rights of people based on the industry in
which they work, even if a Royal Commissioner, more than a decade ago, formed
an opinion that particular incursions were somehow justified. The Cole Royal
Commission was a creature of its terms of reference. It was not required to
consider the implications of its recommendations on the civil rights of those
affected by them. The parliament however has higher obligations. It is required
to consider the civil and human rights of those affected by legislation and it
is the duty of inquiries such as this to do so. In this regard, the Committee
notes the report of the Parliamentary Joint Committee on Human Rights report on
the bills that would re-establish the ABCC. The report reads as a lengthy
catalogue of civil, legal political and human rights curtailed, conditioned and
removed by the proposed legislation.
2.9
This chapter will briefly examine the role and function of Royal Commissions
in general and the Cole Royal Commission in particular. With the passage of
more than a decade since the Cole Royal Commission produced its final report,
it is appropriate to revisit its findings and to assess them from a
contemporary perspective.
2.10
Commonwealth Royal Commissions are established under the Royal
Commissions Act 1902 in accordance with Letters Patent issued by the
Governor General on the advice of the Attorney General.[6]
The Letters Patent describe the terms of reference of the Royal Commission. The
Crown also has the power at common law to appoint a person to conduct inquiries
and make a report but such a person does not have any common law power to
coerce the attendance of witnesses and compel the giving of evidence.[7]
The Royal Commissions Act 1902 sets out the powers and procedures of
Royal Commissions including its powers of coercion to compel the giving of
evidence.
2.11
Royal Commissions are widely believed to be independent of the Executive
branch of government. They are not. They are an instrument of the Executive and
report to it. They derive their existence and authority from the Executive and
just as they can be established by the Executive, they may be dissolved,
altered or even completely ignored should the Executive find discomfort with
its conduct, progress, findings or recommendations.
2.12 A Royal Commission is not a Court and does not exercise judicial power.
The former Chief Justice of the High Court, Justice Gibbs described a Royal
Commission as being, “a mere inquiry which cannot lead to judgement.”[8]
Royal Commissions act “in a purely inquisitorial capacity.”[9]
2.13
A Royal Commission is an inquisition. An inquisition can be an
investigation or commission of inquiry. It can also be “a tribunal created to
enable judgements to be made against heretics, persons and institutions who are
opposed to or do not embrace the values, ideology and interests of whoever
constitutes the inquisition or brought the said inquisition into being.”[10]
2.14
The findings of Royal Commissions have no legal consequences. They are
the expression of the opinions of those who conduct them and guide their
processes. Like the Commissioner appointed by the Executive to conduct the
inquiry, counsel assisting the inquiry – usually one or more Senior Counsel –
are also appointed by the Executive. Unless the findings are taken further by
the Parliament in the form of legislation, or through the judicial system in
the form of prosecution of alleged wrong-doing, the findings of the Royal
Commission remain merely an expression of the opinions of the Commissioner;
albeit opinions reached at great expense and occasionally, with less than the
usual regard for procedural fairness, natural justice and judicial reasoning
found in the ordinary courts.
2.15
Such is the high regard with which Royal Commissions are held and the
mystique surrounding them so pervasive, that they are often believed to possess
greater powers and facility for dispensing justice than the ordinary courts.
They do not. Royal Commissions play an important role inquiring into issues
that are beyond the ordinary processes of politics and judicial inquiry. They
have helped the country come to grips with issues involving a complex
intersection of legal, political and moral dilemmas requiring special
attention.[11]
However, Royal Commissions can be and at times are used as a tool of the
Executive to provide a spur or more often, a fig leaf for political and
legislative action that the electorate may otherwise find unpalatable.
2.16
During the course of Royal Commissions, sensationalised media coverage,
uninformed commentary and the political motivations that occasionally lie
behind the establishment of Royal Commissions can lead to presumptions of guilt
becoming commonplace, reputations can be destroyed and possible future
prosecutions prejudiced. Justice Murphy described the features that distinguish
Royal Commissions from the normal course of criminal justice in his judgement
in Victoria v ABCEBLF:
Proceedings upon a Royal Commission such as this must be
sharply distinguished from committals for trial, which are based on a charge,
conducted by a regular course calculated to ensure proper protections for the
defendant and for witnesses for and against the defendant, in particular that
the defendant is not exposed to compulsory self-incrimination. Committal
procedures are also calculated to ensure that they are not used to unfairly
prejudice the defendant in any subsequent proceedings or for political
purposes. Such proceedings may be kept to a regular course by writs and orders
from the superior courts. The Royal Commission's functions must also be
distinguished from proceedings in which findings of guilt are arrived at after
a regular course of trial conducted with all protections which experience has
shown to be necessary, with trial by jury in those cases guaranteed by the
Constitution
...
For these non-judicial inquiries to find facts which may
suggest guilt, or to find that there is evidence which would warrant
prosecution, is not inconsistent with the regular course of criminal justice,
but to find that particular persons have committed particular criminal offences
is inconsistent with that course.
The Royal Commission is a non-judicial body authorised to
conduct some sort of investigation and to find persons guilty of serious
offences without the protection afforded them in the regular exercise of
judicial power. The persons are deprived of trial by jury. Their reputations
may be destroyed, their chances of acquittal in any subsequent judicial
proceedings hopelessly prejudiced by an adverse finding.[12]
2.17
Pointing to the potential for Royal Commissions to whittle away civil
and political rights, Justice Murphy made this assessment:
The authority given to the Commissioner to exercise such an
important ingredient of judicial power as finding a person guilty of ordinary
crimes, is in itself an undermining of the separation of powers. It is a fine
point to answer that the finding is not binding and does not of itself make the
person liable to punitive consequences. It is by fine points such as this that
human freedom is whittled away. Many in governments throughout the world would
be satisfied if they could establish commissions with prestigious names and the
trappings of courts, staffed by persons selected by themselves but having no
independence (in particular not having the security of tenure deemed necessary
to preserve the independence of judges), assisted by government-selected
counsel who largely control the evidence presented by compulsory process,
overriding the traditional protections of the accused and witnesses, and
authorised to investigate persons selected by the government and to find them
guilty of criminal offences. The trial and finding of guilt of political
opponents and dissenters in such a way is a valuable instrument in the hands of
governments who have little regard for human rights. Experience in many
countries shows that persons may be effectively destroyed by this process. The
fact that punishment by fine or imprisonment does not automatically follow may
be of no importance; indeed a government can demonstrate its magnanimity by not
proceeding to prosecute in the ordinary way. If a government chooses not to
prosecute, the fact that the finding is not binding on any court is of little
comfort to the person found guilty; there is no legal proceeding which he can
institute to establish his innocence. If he is prosecuted, the investigation
and findings may have created ineradicable prejudice. This latter possibility
is not abstract or remote from the case. We were informed that the public conduct
of these proceedings was intended to have a "cleansing effect".[13]
2.18
From its inception, the Cole Royal Commission was controversial. It was
announced in July 2001 in the wake of a report by the Employment Advocate.[14]
The Employment Advocate had been asked by the Minister for Employment,
Workplace Relations and Small Business, the Hon Tony Abbott MP, to provide a
report on “behaviour in the building industry”. A mere 10 days later, the
Employment Advocate was able to produce a report riddled with unsubstantiated
allegations of the sort one might hear in a public bar; about which no evidence
was ever produced, no allegation verified and no investigation ever conducted
in either the subsequent Royal Commission or any court proceeding. But it was
never intended to be otherwise. Once the report was made public, the Employment
Advocate’s job and the accompanying damage was done. He never made any
subsequent attempt to establish the truth of any of his lurid allegations and
nor did he ever produce a shred of evidence to support them.
2.19
At the opening of the Cole Royal Commission public hearings in October
2001, the Commission published a practice note which would govern how parties
were to be granted leave to appear before it. The practice note required that
any party wishing to be represented before the Commission must, as a condition
of such grant of leave, provide the Commission with a statement setting out all
matters within that person's knowledge within the inquiry's terms of reference.
Robert Richter QC described the proposed practice note as requiring that
parties submit to a "Stalinist” obligation to inform in exchange for a
limited right to legal representation, that Commissioner Cole’s directive was
“outrageous, unprecedented and provocative”[15] and “requires any
person as a condition of their leave to appear to rat on anyone.”[16]
2.20
Commissioner Cole was also the subject of an application to stand down
on grounds that he had demonstrated bias against the NSW branch of the CFMEU by
making adverse findings against it in his interim report without allowing the
CFMEU to make submissions or produce evidence that would rebut the allegations
on which the Commissioner’s findings were based. Commissioner Cole heard the
application himself and dismissed it.
2.21
Criticism of the Cole Royal Commission wasn't only confined to the
construction unions and their legal representatives.
2.22
Journalist Jim Marr published a book[17]
on the Cole Royal Commission which was launched in Sydney on 24th
February 2003 with a speech by the radio broadcaster Alan Jones. Mr Jones gave
an eloquent address on the contribution of construction workers to the success
of the 2000 Sydney Olympic Games, the redefinition of collective bargaining as
corruption by the Royal Commissioner, the dignity of the labouring class and
the difficulties encountered by those who have only their labour to sell. He
said of the Royal Commission:
I've had difficulty with this Royal Commission from day one.
I certainly have difficulty with $60 million being spent when it's almost impossible
to get appropriate services for the disabled and the mentally ill. At times you
have to wonder just what the priorities are and that people do things for
political reasons. From day one this Commission seemed to have lost its way. [18]
2.23
Elsewhere in his address, Mr Jones noted that the Royal Commission had
overlooked the opportunity presented to it to investigate tax avoidance,
phoenix companies, insolvent trading, underpayment and non-payment of employee
entitlements and breaches of occupational health and safety laws that resulted
in death and injury. He concluded with these remarks:
So I'm delighted to launch it (the book). It simply confirms
in my view, opinions that I have expressed over the last 18 months and you're
dead right John (Sutton), $60 million is a lot of dough and we can't get into
the business in this country, there's enough of 'them and us'. It's hard enough
for battling people to make a quid here. It’s hard for a worker and all you've
got is your labour and your skill and there has to be a recognition that in the
balance that must exist between modern society, the role of the employer, it’s
an important role, he takes risks. He's gotta put the capital up. But we can't
have the odds balancing entirely in his favour at the exclusion of people like
you and I just think the best thing the Government should do with Mr. Cole's
report, even though it cost $60 million, is to use it for a door stop on one of
those Commonwealth garages down there and let’s get on with the business of making
Australia more productive.[19]
2.24
An aspect of the Cole Royal Commission’s proceedings that remains the
subject of myth-making and controversy today is the subject of productivity in
the construction industry. This is dealt with in more detail elsewhere in this
report, but the genesis of the myth and controversy around productivity in the
industry lies in the Cole Royal Commission and the flaws in the Commission’s
methods.
2.25
As is the case with many of the Royal Commission’s methods and
conclusions, its approach to the issue of productivity has been the subject of
criticism.
2.26
Commissioner Cole claimed in his report that the legislative changes he
recommended, including the establishment of the ABCC and its coercive powers
would improve what he considered lacklustre productivity in the industry which
he in turn believed was the result of what he called “inappropriate” behaviour
in the sector.
2.27
Based on a discussion paper prepared for the Royal Commission by Tasman
Economics,[20]
Commissioner Cole estimated that an additional $12 billion of accumulated GDP
might be generated between 2003 and 2010 if productivity growth in the
construction industry could be “unlocked” through radical industrial relations
“reform”. Commissioner Cole was not the first and he almost certainly will not
be the last to assume the productivity benefits of punitive industrial
relations laws. Indeed, national labour productivity fell off a cliff under the
former WorkChoices regime. If punitive industrial relations laws boosted
productivity, we would have expected that Australia’s productivity would have
soared in the period 2006-2009. But the opposite is true. In the WorkChoices
era, labour productivity growth rates were lower than any 3-year period in
recent times.[21]
Indeed, Tasman Economics, the authors of the Royal Commission discussion paper
were more cautious than Commissioner Cole about ascribing productivity
improvements to the wonders of industrial relations “reform”, noting a number
of times in the paper that the determinants of productivity are “complex”.
2.28
Tasman said in their paper:
Reversing the high level of industrial disputes is not of
itself a panacea for improving productivity. There is a poor direct correlation
between the average number of days lost to industrial disputes and changes in
the three productivity measures. For example, the period with relatively few
days lost to industrial disputes in the early 1990s had relatively flat MFP.
Importantly the level of MFP in this period was lower than estimated in the
1980s when industrial disputation was much higher. The weak relationship is
also evident in more recent times. For example, MFP and working days lost per
thousand employees both increased in 1997-98. However, in the following two
years working days lost decreased while MFP increased.[22]
2.29
Perhaps dissatisfied with Tasman Economics’ cautious views about the
productivity benefits of radical industrial relations reform, just two weeks
after the release of the Cole Royal Commission’s final report, the Minister for
Employment and Workplace Relations released the first of what over the years
has become a seemingly endless stream of reports prepared by Econtech and its
successor, Independent Economics, claiming a direct causal relationship between
the existence of the ABCC, its coercive powers and improved productivity.
2.30
As Commissioner Cole boiled it down, 'To unlock these benefits,
productivity must increase. To achieve these greater benefits by increasing
productivity, structural and cultural reform is necessary.'[23]
Since then, a veritable cottage industry, led by Independent Economics and its
predecessors has emerged, whose principal function is to prop up the central
myth of the Cole Royal Commission and the rationale for the wholesale
undermining of civil rights by the ABCC – that the productivity performance of
the construction industry would only improve with radical “reform” of the
sector’s industrial relations institutions, including the establishment of an
agency with unsupervised coercive powers of a kind usually reserved for
criminal law enforcement and national security agencies.
2.31
In a 2006 paper that examined the Cole Royal Commission’s findings on
productivity and the Commissioner’s expectations that productivity would
improve under a more punitive industrial relations regime[24],
L.J. Perry concluded:
One of the central foundations of the Cole Report is that
productivity growth has been substandard in the construction sector. This note
has illustrated that when the data are extended to the most recent estimates,
multifactor productivity is on a par with the rest of the market sector. The
issue has, in a sense, evaporated.
...
The second issue relates to the contention that the
construction sector’s supposed substandard productivity is linked to
disputatious unions. Again, the evidence simply does not support that
contention.[25]
2.32
In another paper highly critical of Commissioner Cole’s approach to
productivity in the construction sector, Dabscheck noted that the Commission’s
own reports; the Tasman Economics report and a further report prepared by the School
of the Built Environment, per Unisearch Limited of the University of New South
Wales, did not support Commissioner Cole’s findings on construction industry
productivity.[26]
2.33
The Unisearch report found that in terms of both cost and productivity,
the Australian industry performed well. The report said:
In terms of cost performance, Australia’s building and
construction industry has been rated highly in international research
comparisons and published series in construction costs. The most common ranking
for Australia was second place ... In two studies Australia was ranked highest ...
Australia fell within the group of countries with a clear competitive advantage
in the majority of studies described.
...
In terms of productivity, international research comparisons
indicate that Australia is on a par with Japan and Germany in value added per
hour, performing slightly better than France and the UK, but lagging behind the
US, Canada and Singapore. In value added per employee the picture is similar
with Australia on a par with Japan, performing slightly better than the UK,
Germany and France. The US, Canada and Singapore have a clear competitive
advantage in both cases, and the small differences between the other countries
may not be statistically significant. Both indicators show an upwards trend in
Australia over the ten year period shown.[27]
2.34
In terms of the causal relationship between specific reform initiatives
and improved construction industry performance, the Unisearch report noted:
Attempting to establish a direct causal relationship between
construction reform initiatives and industry performance is problematic. Not
only have these issues remained largely un-researched in any rigorous sense,
but there are many concurrent factors that influence productivity and
efficiency at any one point in time. This is not to say that the impact of
reform strategies cannot be identified, but that quantifying the outcome of
initiatives is fraught with difficulty.[28]
2.35
As Dabscheck points out, Commissioner Cole acknowledged the findings of
the Unisearch report saying, 'It is true that a number of international studies
have concluded that the Australian building and construction industry is among
the better performers internationally'.[29]
But, 'he then indulges in the lawyer’s trick of finding an alternative term for
productivity, and using this distinction to deny the evidence of research that
he in fact commissioned.'[30]
2.36
Without offering much in the way of reasoning for reaching his
conclusion on this, Commissioner Cole said:
It is true that a number of international studies have
concluded that the Australian building and construction industry is among the
better performers internationally (see annexure 4, volume 4, National
Perspective Part 2, of this report). But using this as an excuse not to act is
short-sighted. The studies do not show that the industry is operating
efficiently. Indeed, the fact that on various productivity measures, the
industry has fallen behind the market average in Australian industry indicates
that significant inefficiencies remain.[31]
2.37
So faced with the inconvenience of studies finding that productivity in
the Australian building and construction industry are at least “on a par” with
comparable countries and ahead of many others, Commissioner Cole invented a new
and highly subjective standard almost beyond measurement by which to judge the
industry – efficiency. Efficiency and productivity are not the same things.
2.38
Commissioner Cole was appointed to conduct a Royal Commission into the
building and construction industry, excluding the domestic housing sector, by
Letter Patent on 29th August 2001 to investigate:
- the nature, extent and effect of
any unlawful or otherwise inappropriate industrial or workplace practice or
conduct, including, but not limited to: (emphasis added)
- any practice or conduct relating to the Workplace
Relations Act 1996, occupational health and safety laws, or other laws relating
to workplace relations; and
- fraud, corruption, collusion or anti-competitive
behaviour, coercion, violence, or inappropriate payments, receipts or benefits;
and
- dictating, limiting or interfering with decisions
whether or not to employ or engage persons, or relating to the terms on which
they be employed or engaged;
- the nature, extent and effect of
any unlawful or otherwise inappropriate practice or conduct
relating to: (emphasis
added)
- failure to disclose or properly account for financial
transactions undertaken by employee or employer organisations or their
representatives or associates; or
- inappropriate management, use or operation of industry
funds for training, long service leave, redundancy or superannuation;
- taking into account your findings
in relation to the matters referred to in the preceding paragraphs and other
relevant matters, any measures, including legislative and administrative
changes, to improve practices or conduct in the building and construction
industry or to deter unlawful or inappropriate practices or conduct in relation
to that industry.[32]
2.39
Commissioner Cole produced a 23 volume report delivered in February 2003.
Twenty two of these volumes are publicly available. The twenty third volume,
said to comprise findings of concerning 'unlawful' or 'criminal' conduct was
not made public and is said to have been referred to appropriate prosecutory
bodies for their consideration.
2.40
Volume one of the report provides a summary of Commissioner Cole's
findings concerning 'inappropriate' behaviour. He lists 88 'types of
inappropriate conduct which exist throughout the building and construction
industry'.[33]
2.41
Many of these acts amount to little more than industrial jaywalking. The
vast majority were alleged to be committed by unions, a small number by
government departments or agencies “due to 'inappropriate' pressure being
placed on them by unions” and a mere handful involved employers not observing
their legal obligations.
2.42
Some even included employers actually complying with agreements by
paying wages and allowances meant to be paid under the agreement. In the world
of the Cole Royal Commission, actually complying with the law could be deemed
“inappropriate”.
2.43
In his 2005 paper, Dabscheck tried to make sense of this peculiar turn
of events. Dabscheck noted that apart from finding only four examples of
employers breaching occupational health and safety obligations, Commissioner
Cole found no evidence of 'inappropriate' behaviour on the part of employers
concerning phoenix companies, non-payment and underpayment of employees'
entitlements, tax evasion and avoidance, the use of illegal migrant labour or
where migrants were employed legally, their gross exploitation.[34]
2.44
Apart from finding actions that were not only not unlawful but necessary
for compliance with relevant industrial relations laws 'inappropriate',
Commissioner Cole also saw fit to criticise the way the law was interpreted and
applied by the Full Court of the Federal Court. Commissioner Cole found that
the Full Court judgement in Electrolux No. 2[35]
- that sanctioned the lawful payment of bargaining fees by non-union
members to unions, to be “damaging”.[36]
It was surely no coincidence that the Howard government subsequently amended
the Workplace Relations Act to outlaw the practice.
2.45
In the conduct of the Cole Royal Commission and the methods it employed
to come to its findings, behaviour which was not 'unlawful', or was not only
lawful but essential for compliance with the law, such as employers complying
with industrial agreements, became 'inappropriate' because Commissioner Cole
deemed it so.
2.46
By this process, legislative changes can be recommended to transform
that which is lawful but deemed 'inappropriate' into that which is 'unlawful'.
Through the interplay of the words 'unlawful' and 'inappropriate' in the Royal
Commission's terms of reference, lawful conduct becomes unlawful.
2.47
Dabscheck’s conclusion provides a damning appraisal of the processes of
the Cole Royal Commission and the reasoning, or lack of it, behind its
findings.
The Cole Royal Commission into the building and construction
industry was an inquisition into the heresy of unionism. The Letters Patent
asked Commissioner Cole to investigate ‘unlawful’ and ‘inappropriate’ practices
in the industry. He made findings that ‘lawful’ behaviour, even a decision of
an appeal court, was ‘inappropriate’; and recommended, at times, extensive
legislative changes to make such behaviour ‘unlawful’. In terms of doublethink
that which is lawful is unlawful. Commissioner Cole kept from the ‘public gaze,
and devoted little time, energy and resources of the Royal Commission – one
report out of twenty three – to an issue which, he claimed was most important
to the Royal Commission, namely occupational health and safety. On the other
hand, he devoted most of his time, energy and resources of the Commission – in
terms of hearing days, gathering and presentation of material, twenty two of
twenty three volumes – to an issue of less importance – that of unions and
associated ‘poor’ industrial relations. That which is important is unimportant.
Moreover, the inferences and conclusions Commissioner Cole ‘derived’ from
publicly available material, much of which he commissioned himself, does not
engender confidence in his findings, which have not been subject to ‘normal’
standards of natural justice and procedural fairness.[37]
2.48
Submissions made to this inquiry and many public statements by
supporters of the re-establishment of the ABCC, advance the proposition that
the ABCC and its extraordinary coercive powers are necessary. When in the face
of a crumbling economic, legal and human rights case for the ABCC they are
asked why, the answer can be simply summarised as “the Cole Royal Commission”.
2.49
The Committee is mindful of the words of William Pitt in a speech to the
House of Commons on 18th November 1783, 'Necessity is the plea for
every infringement of human freedom. It is the argument of tyrants; it is the
creed of slaves.' In assessing whether the ABCC is necessary to industrial
relations in the building and construction industry, it is as well to examine
the record of prosecutions over the decade since the Cole Royal Commission.
2.50
Apart from the instances of “inappropriate” conduct set out in Volume
One of his final report, Commissioner Cole issued a confidential volume[38]
which was said to comprise findings of 392 instances of unlawful and criminal
conduct, of which 98[39]
were referred by the then Attorney-General to law enforcement bodies for their
consideration. That volume remains secret and the precise nature of its
contents is unknown to the Committee.
2.51
Whatever the contents of Volume 23, the evidence to this inquiry is that
there has been just a single successful prosecution arising from the Cole Royal
Commission for an offence related to conduct as a building industry
participant; that of a company prosecuted for the payment of strike pay. The
only other successful prosecution arising from the Cole Royal Commission was
that of a union officer found guilty of perjury during the course of the Royal
Commission.[40]
2.52
At the public hearing in Canberra on 17th March 2014, the law
enforcement agencies appearing were asked about the fate of criminal matters
contained in Volume 23 and referred to them from the Cole Royal Commission.
2.53
The representative of the Australian Federal Police was able to confirm
that a total of seven matters arising from allegations of criminal conduct were
referred to them from the Cole Royal Commission. Of these, five matters were
not proceeded with, two prosecutions were launched, one of which led to an
acquittal and the other the perjury conviction mentioned above.
Senator CAMERON: Deputy Commissioner Phelan, what about the issues that came to you?
Mr Phelan: Out of the seven matters that came to us,
two of them resulted in prosecutions. One was the conviction that you have
already referred to and another was an acquittal. Four of the matters that came
to us we evaluated and determined that no further action should be taken. One
of the other matters was referred to another agency, and I do not know the
result of that one.[41]
2.54
The Australian Crime Commission officer who gave evidence to the
Committee understood that no referrals from the Cole Royal Commission had been
received by the Australian Crime Commission.
Senator CAMERON: Thank you, Deputy Commissioner Phelan. Mr Jevtovic, did the Crime Commission receive
any?
Mr Jevtovic: To my understanding we did
not. However, I cannot
be categoric. It is something that I will take on notice
as well.[42]
2.55
Victoria Police were unable to confirm at the Committee hearing in
Canberra that it had received any matters referred to them by the Cole Royal
Commission.[43]
2.56
However, in relation to referrals of alleged criminal conduct from the
former ABCC, Victoria Police confirmed that it received 15 matters in the
period from 2005 to 2012; around two per year. Of these, one matter was the
subject of a prosecution at the conclusion of which a diversionary sentence was
imposed and no conviction recorded against the offender. The remaining fourteen
referrals were not proceeded with.[44]
2.57
Since 2012, Victoria Police have received four referrals of alleged
criminal conduct from Fair Work Building and Construction, none of which have
been proceeded with.[45]
2.58
The Australian Federal Police indicated that they would take on notice
the question as to whether they had received any referrals of alleged
criminality from either the former ABCC or FWBC.[46]
2.59
The Australian Crime Commission told the Committee that it did not
believe it had received referrals of alleged criminal conduct per se
from the former ABCC, but would check and took on notice the question of
whether it may have received intelligence from the former ABCC.[47]
2.60
The picture to emerge from the record of prosecutions, successful or
otherwise, arising from what are said to be Commissioner Cole’s findings of
widespread unlawful and criminal conduct is that the claims have been
over-stated. It is the Committee’s view that had the Cole Royal Commission’s
“findings” of unlawful and criminal conduct been borne out, there would be a
reasonably lengthy catalogue of successful prosecutions arising from the Royal
Commission to which the proponents of the re-establishment of the ABCC could
point. That there is no such catalogue of successful prosecutions leads the
Committee to the view that the case for the “necessity” of the ABCC to deal
with widespread unlawfulness, including criminal conduct, has not been made
out.
2.61
On the contrary, the evidence to this inquiry from the law enforcement
agencies who gave evidence is that criminal behaviour is not endemic in the
building and construction industry. In relation to Victoria, where supporters
of the re-establishment of the ABCC claim criminal conduct is endemic, the
following exchange in the hearing of 17 March 2014 in relation to referrals to
Victoria Police from FWBC and its predecessor, the former ABCC, indicates that
such claims are grossly over-stated:
Senator CAMERON: I
am happy for that. Did
these
allegations result in
further investigations?
Mr Ashton: Certainly from the Victoria Police, yes. I know that they did follow up with investigations from
our end, yes.
Senator CAMERON:
I will keep with
you, then. Did they result in any prosecutions?
Mr Ashton: I do not have a record here of any prosecutions. There was one matter where we have a
prosecution afoot from February
2013, but I do not think that came as a result of a referral. I do not have a record
here of any convictions.
Senator CAMERON: So the referrals from the ABCC and the allegations that have been made are not resulting
in a flood of allegations
or a flood of convictions
in the
building and construction industry, are
they?
Mr Ashton: To put a term like 'flood' around it requires me, I guess, to form some opinion about it. But I can
certainly tell you: they are the facts. We certainly receive information from other areas and we have had other investigations
and convictions, but
not specifically from those bodies.
Senator CAMERON:
Mr Jevtovic?
Mr Jevtovic: We
are in a not dissimilar
situation: we collect intelligence
nationally and we would receive
intelligence
relevant to a range of criminal entities, groups and targets. But in relation to those two specific bodies, I have taken that on notice, Senator, and
I will get back
to you.
Senator CAMERON: Deputy Commissioner Phelan?
Mr Phelan: Yes,
I would have to
take on notice too the matters that were referred,
as to
where
they
ended up.[48]
Committee View
2.62
With the passage of time and the ability it affords to take a
dispassionate view of the Cole Royal Commission in the light of subsequent
events, the Committee takes the view that Commissioner Cole’s findings and
recommendations do not provide a sufficient basis on which the Parliament, over
a decade later, ought to consider passing legislation that empowers the
exercise by a Commonwealth agency of extraordinary coercive powers, without
adequate oversight, that involve substantial limitations and extinguishment of
a range of civil, political and legal rights of people solely on the basis of
their employment in the building and construction industry.
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