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.
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 (Stalinist) 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 (Maoist) Builders Labourers Federation were seeking to exert greater influence with in 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.
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 elicity information beyond that normally available to a government authority'.
By Letters Patent dated 29 August 2001, the Honourable Terence Rhoderic Hudson Cole RFD QC was appointed a Royal Commissioner to inquire into certain matters relating to the building and construction industry.
The Letters Patent identified "the Constitution of the Commonwealth of Australia, the Royal Commissions Act 1902 and other enabling powers" as sources of the power of the Governor-General to make the appointment.
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:
Royal Commissions, appointed pursuant to the Royal Commissions Act or otherwise, have powers to summon 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: see section 2 of the Royal Commissions Act 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 $1,000.00 or six months imprisonment: see section 3 A Royal Commission may authorise Federal Police to execute search warrants: see section 4
At the opening of public hearings in October 2001, the Commission published a proposed '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 and to appear 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 as to the subject matter of the inquiry. Robert Richter QC (appearing on behalf of a WA official of the CFMEU) described the proposed practice notes as requiring that parties submit to a "stalinist obligation to inform".
There were two legal proceedings brought against the Cole Commission during 2002. The first, brought in the name of Martin Kingham and others, was conducted on behalf of the Victorian Building Unions Divisional Branch of the Construction and General Division of the CFMEU. The second, brought in the name of Andrew Ferguson and others, was conducted on behalf of the NSW Divisional Branch of the Construction and General Division of the CFMEU. Neither of these challenges were successful.
The applicants sought administrative law relief to prevent the Commissioner conducting the Royal Commission in accordance with the provisions of pars 12 to 15 of the Commission's Practice Note 2 His decision to do so was challenged under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth)
The Practice note sought to impose conditions on a person's right to cross-examine witnesses appearing before the Royal Commission. Justice Heely summarised the applicant's argument this way:
These arguments were rejected:
The applicants filed an appeal to the Full Court of the Federal Court of Australia, but this appeal was abandoned shortly afterwards.
On 29 August 2002 the applicants made an application to the Commissioner that he disqualify himself from, in effect, making findings of fact or recommendations in relation to New South Wales which may have an adverse impact on the applicants. On 6 September 2002 the Commissioner published reasons for his decision to dismiss the application made to him.
In this proceeding the applicants claimed that the Commissioner has shown actual bias towards them or, alternatively, by his conduct has given rise to a reasonable apprehension that he is biased towards them. They also asserted that they have been denied procedural fairness by reason of the process of inquiry adopted by the Royal Commission.
The Court dismissed the application. The Court rejected the contention that the Commissioner by the First Report made findings which directly and adversely affected the interests of the applicants. The Court also rejected the contention that the First Report shows that the Commissioner was, or could reasonably be apprehended to be, so committed to conclusions which he had already formed that he would be incapable of altering those conclusions.
Interim Building Industry Taskforce
The Royal Commissioner presented his final report to the Governor-General on 24 February 2003.
The Final Report was tabled in Parliament on 26 and 27 March 2003.
Colin Thatcher appointed as a member of the Australian Industrial Relations Commission
On 2 April 2003, Federal Cabinet decided to extend the operation of the Building Industry Task Force, pending the establishment of the proposed Australian Building and Construction Commission ('ABCC'). Cabinet also supported separate legislation to regulate the construction industry. On 25 March 2004, the Minister announced that the taskforce would become a permanent body, and would 'continue to operate until the Building and Construction Industry Improvement Bill (and the establishment of the ABCC) is passed by this Parliament'.
Building and Construction Industry Improvement Bill 2003
In October 2003 the Senate referred the Building Industry Improvement Bill 2003 to the Employment, Workplace Relations and Education References Committee for inquiry and report. The Committee received submissions, conducted hearings, and tabled its Report on 21 June 2004. The Committee, by a majority composed of Senators from the Australian Democrats and the Australian Labor Party, recommended that the Senate oppose the government's legislation. Government senators on the Committee, in minority, recommended that the legislation be passed.
The Coalition government was returned at the 2004 federal election and, unexpectedly, secured control of the Senate with effect from July 2005.
The Commission's own estimate of its expenditures, as at the date of publishing its report, was that it had spent approximately $60 million. This figure makes the Royal Commission one of the most expensive in Australia's history.