Boral ‘black banned’ by union because of Grocon link

The country’s biggest construction union is engaging in cartel behaviour and masterminded a “criminal conspiracy” to blackmail concrete company Boral into not supplying a major developer, according to evidence before a royal commission.

The Construction, Forestry, Mining and Energy Union was said to be running Melbourne construction sites to a point where the “law doesn’t apply”.

“The law is applied by the CFMEU,” Boral chief executive Michael Kane said.

Mr Kane told the royal commission into trade unions that Boral had been frozen out of almost all high-rise work in Melbourne’s CBD  after the union imposed a “black ban” –  a secondary boycott of its products.

The commission was told the boycott  started in February last year, fuelled by the CFMEU’s feud with one of the Boral’s key developer clients, Grocon.

Mr Kane alleged that after he refused to stop supplying concrete to Grocon, Boral was prevented from supplying about 70 other union-controlled sites. It is alleged to have sparked a massive slump in market share and losses of more than $8 million.

“This is a criminal conspiracy to interfere in the marketplace and to stop our ability to supply our customers,” Mr Kane said.

“It’s blackmail by any other definition that I’ve ever heard of and it’s been effective.”

Despite winning a Supreme Court injunction against the alleged ban last year, Mr Kane said Boral trucks were still being turned away from work sites and customers had stopped approaching Boral for quotes.

“We have complained to every federal and state government agency that would listen to us, [but] as we sit here today in the Melbourne CBD it is in full force and effect.”

Mr Kane said there seemed to be no legal recourse against the CFMEU’s “cartel behaviour”.

Commissioner Dyson Heydon said Mr Kane’s evidence that the court injunctions had been powerless to lift the boycott was “very disturbing”. Mr Kane also wrote a letter to the commission arguing that Mr Setka and the CFMEU should be criminally investigated for blackmail, which carries a maximum penalty of 15 years’ jail.

In sworn witness statements, Boral executives Paul Dalton and Peter Head recounted a meeting with union boss John Setka  in April last year in which he allegedly admitted Boral was caught in the crossfire of the CFMEU’s spat with Grocon.

“We are at war with Grocon, and in a war you cut the supply line,” Mr Setka is claimed to have said.

“All wars end and once peace is established, the CFMEU will be at the table to divide the spoils. The CFMEU decides who gets what and what market share Boral will get.”

Boral did not agree to ceasing supply to Grocon, and several of Boral’s major long-term customers continue to be unwilling to order concrete from Boral for use on union sites, according to the statements.

Mr Dalton said customers would not breach the union boycott on Boral products for fear of industrial problems including work stoppages.

Speaking outside the commission, CFMEU national secretary Dave Noonan said he would not comment directly on Mr Kane’s accusations on the grounds matters between the union and Boral were being dealt with in “real courts” rather than the commission’s “show trial”.

He said he would “like to thank the royal commission for providing Mr Kane from Boral with a platform to make a political speech … that’s what you’ve heard today, a lecture in how to make Australia more like America, how to reform our legal system in the interest of big business”.

Counsel assisting the royal commission, Jeremy Stoljar, SC, stressed during the hearing that the allegations had not yet been tested.

“At this stage no Boral customer has given evidence,” he said. “The CFMEU has not had the opportunity to present its evidence, test the evidence of Boral, nor propound any defence.”

The royal commission appears to now be building a potential case against the CFMEU and Mr Setka by using multiple witnesses to claim he or his union have been involved in underhanded or potentially illegal dealing, intimidation and the abuse of the union’s industrial muscle.

The Boral allegations are potentially the most damaging because the concrete company’s staff allegedly recorded extensive contemporaneous notes detailing interactions with Mr Setka which could implicate the union boss in serious breaches of anti-cartel and competition laws or, as Mr Kane alleged, blackmail.

The union has sought to brush off the allegations made by previous witnesses about Mr Setka, including claims he demanded the employment of his associates and he or his union intimidated non-union workers, by pointing to workplace safety breaches involving Mr Setka’s accusers.

Developers of an $800 million housing project at the old Pentridge prison site in Coburg, where a worker was killed in 2009, has provided evidence of threats and standover tactics in the union’s campaign to control the worksite. Allegations have also implicated the union in links to underwold associations turned “union fixers”.

Melbourne builder Andrew Zaf also said in a statement that he provided a free roof to Mr Setka during the 1990s as a bribe to avoid industrial problems on a building site in Sunshine that the CFMEU was plaguing with work stoppages.

But Boral will require a different defence from the union because the firm was not involved in safety incidents.

Meanwhile, the Napthine government is continuing its relentless campaign against Opposition Leader Daniel Andrew over th Labor Party’s continuing association with the CFMEU, which is a significant ALP donor.

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