# Royal Commission into the Building and Construction Industry

The Royal Commission into the Building and Construction Industry, or informally the Cole Royal Commission, was a Royal Commission established by the Australian government to inquire into and report upon alleged misconduct in the building and construction industry in Australia. The establishment of the Commission followed various unsuccessful attempts by the Federal Government to impose greater regulation upon the conduct of industrial relations in that industry.
The Royal Commission commenced on 29 August 2001 and was overseen by a sole Royal Commissioner, The Honourable Justice Terence Cole RFD QC. Justice Cole handed the commission's final report to the Governor-General on 24 February 2003; and the report was tabled in parliament on 26 and 27 March 2003.
Although the Commission found no evidence of organised criminal activity, it did articulate a case that the industry was characterised by lawlessness in the conduct of industrial relations. It recommended sweeping changes to industrial relations laws applicable to the industry. The government's attempts to implement those recommendations stalled in 2004, but were revived in 2005 after the Howard government secured control of the Senate. The Royal Commission led to the enactment of the Building and Construction Industry Improvement Act 2005 No. 113 (Cth) and the establishment of the Office of the Australian Building and Construction Commissioner (ABCC), an independent statutory authority responsible for monitoring and promoting workplace relations in the Australian building and construction industry. The ABCC was active between October 2005 and May 2012, when, following enactment of the Fair Work (Building Industry) Act 2012 (Cth), its functions were superseded by Fair Work Building and Construction, an agency of the Australian government. The agency was re-established in December 2016 as the Australian Building and Construction Commission.

## Background
### Federal government industry reform policy

In May 1997 the Federal Government, with agreement from the States, prepared a National Building Industry Code of Practice. The government supplemented the Code with Implementation Guidelines. Fundamentally, the Code and the Guidelines were an attempt to regulate the conduct of industrial relations on construction projects funded by government, through the medium of contract rather than legislation.
In July 1997 the (then) Department of Employment, Workplace Relations and Small Business formed a 'Workplace Reform Group' targeting four industries for reform: the meat processing industry, the coal mining industry, the building and construction industry and the waterfront industry. The Workplace Relations Act and the Trade Practices Act 1974 were to provide the legal tools to deliver reform. The 1998 waterfront dispute was a reflection of the focus placed on these important industries.

### Conflict within CFMEU

At about the time that the Royal Commission was announced, there had been, for some time, open conflict within the Construction and General Division of the CFMEU. On the one side, led by Divisional Secretary John Sutton and NSW Divisional Branch Secretary Andrew Ferguson, forces associated with the old Building Workers' Industrial Union were seeking to maintain their control over the Division. On the other side, led by Victorian and WA Divisional Branch Secretaries, Martin Kingham and Kevin Reynolds, forces associated with the old Builders Labourers Federation were seeking to exert greater influence within the union. The battle for control over the Divisional Conference led to a range of court cases. At one point, the Divisional Secretary, John Sutton, made allegations of organised criminal activity within the union. These allegations were aired on the ABC 4Corners program, and widely cited by government ministers as justifying the calling of a royal commission.

### Report of the Employment Advocate

In April 2001 the Minister for Workplace Relations, Tony Abbott, asked the Employment Advocate to provide a report "regarding behaviour in the building industry". In May 2001, the Employment Advocate provided a report which summarised statistics concerning complaints received by his office relating to alleged breaches of Freedom of Association provisions of the Workplace Relations Act; 'coercion' in agreement making, right of entry and strike pay provisions of the Act.
The report criticised other law enforcement agencies, alleging that complaints "will simply not be actioned with any priority, or at all".
This criticism mirrored certain criticisms levelled at the Victoria Police, after the 1998 waterfront dispute, to the effect that police should have been more aggressively involved in a picket-breaking role, rather than merely keeping the peace.
The report alleged that, "ill willed" people have ample opportunities to "cause major disruption to a site" by misuse of occupational health and safety procedures.
The report alleged misuse of various industry funds, including trust funds established to preserve employee entitlements such as leave pay and superannuation: "There have been allegations that senior union appointed trustees have sought to influence the investment decisions of at least one of these trusts for political and/or industrial purposes."
Most dramatically, the report alleged that union officials accepted secret commissions, engaged in bribery, and criminal corrupt conduct.
The report concluded that 'there certainly appears to be a case for a broader investigation of the industry', and that 'it would require special investigative powers to gather and elicit information beyond that normally available to a government authority'.
* Employment Advocate's report, 11 May 2001.

## Appointment of Commissioner

On 29 August 2001, the Governor-General issued Commonwealth Letters Patent pursuant to "the Constitution of the Commonwealth of Australia", the Royal Commissions Act 1902 (Cth) and other enabling powers" appointing The Honourable Justice Terence Cole RFD QC as the sole Commissioner and the commission's terms of reference. The commissioner was directed "...to inquire into certain matters relating to the building and construction industry..."
Subsequent to the Royal Commission, Cole was appointed as an Officer of the Order of Australia in 2005 for "service to the judiciary, particularly judicial administration, to reform of the building and construction industry, and to the community through the Australian Naval Reserve and conservation and arts organisations."

## Terms of Reference

The Commissioner was appointed to investigate certain matters in relation to the building and construction industry. Those matters were defined in the Letters Patent as follows:
    (a) the nature, extent and effect of any unlawful or otherwise inappropriate industrial or workplace practice or conduct, including, but not limited to:
       (i) any practice or conduct relating to the Workplace Relations Act 1996, occupational health and safety laws, or other laws relating to workplace relations; and
       (ii) fraud, corruption, collusion or anti-competitive behaviour, coercion, violence, or inappropriate payments, receipts or benefits; and
       (iii) 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;
    (b) the nature, extent and effect of any unlawful or otherwise inappropriate practice or conduct relating to:
       (i) failure to disclose or properly account for financial transactions undertaken by employee or employer organisations or their representatives or associates; or
       (ii) inappropriate management, use or operation of industry funds for training, long service leave, redundancy or superannuation;
    (c) 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.

## Powers

The powers of Royal Commissions in Australia are set out in the enabling legislation, the Royal Commissions Act 1902 (Cth).
Royal Commissions, appointed pursuant to the Royal Commissions Act or otherwise, have powers to issue a summons to a person to appear before the Commission at a hearing to give evidence or to produce documents specified in the summons; require witnesses to take an oath or give an affirmation; and require a person to deliver documents to the Commission at a specified place and time. A person served with a summons or a notice to produce documents must comply with that requirement, or face prosecution for an offence. The penalty for conviction upon such an offence is a fine of A$1,000 or six months imprisonment. A Royal Commission may authorise the Australian Federal Police to execute search warrants.