Cole Royal Commission could simply
have produced yet another list of corrupt
practices and persons in the construction
industry. But the recommendations of Terrence
Cole have gone much further and exposed
what no-one in the industry wants to publicly
state, namely that key institutions that
regulate the industry have failed.
All industries in a market economy are
regulated by laws administered and enforced
by government funded institutions. The
system of industrial relations tribunals
in conjunction with the consumer watchdog,
backed by the courts and ultimately the
police, are supposed to ensure that all
people have fair and equitable opportunities
to work, earn a living and engage in business.
This underpins a free, civilised society
and should have been operating in the
But what Cole has documented is a pattern
of unlawful activity so widespread and
so accepted as a normal way of doing business,
that the unlawfulness must be defined
as systemic. The institutions that were
supposed to ensure equity and fairness
have failed on such a scale that Cole
has recommended overriding their powers
and creating a new body charged to succeed
where they have failed.
Cole does not specifically accuse the
institutions of failure but his key recommendation
leaves no other conclusion. The lynch
pin recommendation is for the establishment
of an industry specific watchdog, the
Australian Building and Construction Commission
(ABCC) modelled along the lines of, and
with powers similar to, the Australian
Consumer and Competition Commission. Along
with a new body to monitor compliance
with occupational health and safety requirements,
the ABCC will be charged to ensure that
players in the industry cannot rort the
game to achieve unfair advantage over
The ABCC is recommended to have powers
to stop activities that are already illegal
under one of Federal and State industrial
relations legislation, the Trades Practices
Act, the States Fair Trading Acts and
criminal law. This includes the prevention
of pattern bargaining, stopping of unregistered
and/or secret agreements, the restriction
of industrial agreements to employment
matters, ensuring freedom of association,
stopping the illegal removal of money
from employee benefit funds and the prevention
of intimidation, harassment and violence.
If the industrial relations commissions,
the ACCC, appropriate government bureaucracies,
the police, unions and employer associations
had been doing or capable of doing their
jobs, it should have been expected that
Cole would have recommended fine-tuning
of their powers. But no!
Cole details how even police have stood
by and watched unlawful behaviour and
by their submissiveness condoned unlawfulness.
Nothing could be more telling of a system
gone rotten! Even further, Cole's list
of individuals who have committed unlawful
behaviour, come mostly from within the
ranks of the institutions that were supposed
to ensure fairness.
The only institutions with a tick from
Cole are the Australian Tax Office and
the immigration department. Apparently
both these authorities robustly enforce
their responsibilities in the construction
All other institutions are found wanting.
Employer associations and unions receive
special attention with recommendations
that their officials be trained in the
requirements of the law, pass tests to
demonstrate they understand the law and
be deregistered as officials if they fail
to comply with or endeavour to ensure
others comply with the law.
Ultimately the failure that Cole details
is not that of market failure, but rather
failure of the market regulators.
Cole recommends establishing a new regulator
that is dedicated to the construction
industry and with the powers, skills and
resources to undertake its tasks. This
is to be created via amendments to the
Federal Industrial Relations Act but realising
these amendments is where the next level
of debate will be telling.
Unions have, with a predictability that
is damaging their cause, announced vehement
opposition to the creation of the ABCC.
However it is not unions who threaten
implementation of Cole's recommendations.
Systemic unlawfulness only becomes systemic
because people in positions to move against
unlawfulness either turn a blind eye or,
for example, quietly damage the career
of an official who tries to do something.
The real threat to Cole's recommendations
will come quietly and insidiously from
behind closed doors, from elements within
the current institutions that fear losing
their existing power to the new regulator.