The reluctance to make complaints because of fear of reprisal is the obvious headline grab from the Interim Report into Victorian Government Bodies’ Engagement with Construction Companies and Construction Unions released recently. The more alarming observation of the Interim report is the apparent failure of the 20 State and Commonwealth governmental agencies to act on reports concerning alleged corruption. It took a group of journalists to bell the cat on an industry riddled with unsatisfactory behaviour. Call me naive, but the Eureka flag flying over Victorian building sites provides a clue to who actually controls the industry.
The proper management and oversight of daily operations and public expenditure on major projects would appear, to the disinterested observer, fundamental to good public policy. However, the disjointed contours of authority responsible for elements of the management and oversight of construction projects in Victoria, reveals the reason this behaviour has apparently flourished. No single agency or entity exercises responsibility and therefore nobody is accountable.
As long as a project is eventually completed it seems no one in authority is accountable to what happened behind the scenes regarding the alleged treatment of sub-contractors and others involved in the process. Instead, the show rolls on to another building project conceived and designed by the current government for a photo opportunity for the next election. Welcome to Victoria.
The Interim Report describes the respective roles and relationships of agencies, organisations, contractors, and the statutory and contractual arrangements that comprise the Victorian building industry. However, the report details some initial observations and sets out four areas or themes in which the Review will inquire for the purpose of the final report. Nevertheless, it is not unreasonable to suggest at this stage, the Review will disappoint unless it seriously addresses the failure of the Victorian government to directly manage the construction projects it funds, recommends a single point of authority accountable for all aspects of the projects, and articulates a code of conduct with ethical criteria expected of contractors, persons with a financial interest, or who may exercise a degree of control or influence over the building projects.
The four broad themes of the Interim Report identified as worthy of further inquiry: integrity, complaints, procurement and contracting, and the regulatory scheme, could provide a useful platform to explore these measures to restore civility and accountability to the management and oversight of major building projects.
It goes without saying, any alleged thugs and criminals should be banished permanently from the industry. Strong policing powers are important, but are little use if complainants are unwilling to risk the reprisals mentioned in the introduction of the Interim Report. The Australian Building and Construction Commission was successful in part but politics led to its demise and the Victorian Labor government will not establish its own version.
The current practice of outsourcing the management of building projects should cease. The inevitable financial overruns are reason enough, but additionally agencies entrusted to manage the contract obligations and oversee project operations have consistently failed to enforce ethical behaviour, particularly where the CFMEU represents building workers on a project. Private contractors simply do not have the capability or incentive to enforce civility, let alone enforce good public policy and the general law onsite.
The answer may lay in commonplace measures rooted in old-fashioned contract management backed up with serious regulatory authority to exclude persons that are not considered fit and proper to manage, have a financial interest or exercise a degree of control or influence over the management or direction of the building project. The Report should look to the contractual rights and obligations designed by the Commonwealth and imposed mostly via deeds, on non-government entities delivering government-funded programs.
Employees engaged in the provision of vocational education, social and community services, and childcare are required amongst other things, to undertake police record checks to ascertain suitability for employment and persons may be disqualified from holding an office or employment if unable to satisfy the criteria prescribed in regulations for a fit and proper person. There is no feasible reason that building contractors, managers, health and safety representatives, and union representatives, all of whom exercise a degree of control or influence over the direction of a building project, should not be subjected to similar fit and proper person checks.
The criteria includes whether the person or entity has been convicted of an offence against a law of the Commonwealth or of a State or Territory and if so, the seriousness of the offence, whether the person or entity has ever become bankrupt, applied to take the benefit of a law for the benefit of bankrupt or insolvent debtors, compounded with his or her creditors or assigned their remuneration for the benefit of creditors, or has ever been disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001 (Cth).
Finally, Parliamentary oversight via the Public Accounts or similar standing committee scrutinising performance against the financial and integrity conditions in all major project contracts would enable genuine accountability of the agencies responsible for managing the contract during the operative period, not after the fact. Public hearings requiring responsible Ministers and senior officials to personally attend to answer questions under oath should provide a sobering experience for even the most slippery public official.
I look forward to the findings and recommendations of the final report of the Review. It is an opportunity to implement genuine reform to a broken system. However, I am not holding my breath. I have been disappointed too many times.
Paul Maguire is an Australian lawyer practicing in Victoria specialising in employment and workplace relations law
