Royal Commission

CFMEU secretary John Setka accused of blackmail by Boral CEO Mike Kane. Read the allegations here

Mike Kane the CEO of Boral gave evidence today at the Royal Commission and he did not hold back with allegations of blackmail and other criminal offences against John Setka and the CFMEU (Construction Forestry Mining and Energy Union) of which Mr Setka is Victorian State Secretary. Mr Kane also alleged there was a conspiracy by certain parties that has allowed Mr Setka and the CFMEU to get away with criminal conduct.

Mike Kane’s allegations in the witness box were as per his written statement to the Trade Union Royal Commission. His statement is a must read for all voters as one of the biggest companies in Australia is being blackmailed by a Labor Party supported union and no one does anything. (Click here to read the full statement) How and why the police and others have not acted is disgraceful.

Some of the key elements of the statement as written by Mr Kane:

The CFMEU’s illegal conduct

For over a year and a half, the Victorian branch of the Construction & General Division of the CFMEU (the “CFMEU”) has run an orchestrated and very costly campaign against Boral for one simple reason: we have refused to give in to demands by the CFMEU that we stop doing business with one of our long-standing clients, the Grocon group, in Melbourne. In the early days of the campaign, the Secretary of the CFMEU in Victoria, Mr John Setka, clearly expressed to our management that the CFMEU were at war with Grocon and wanted to “cut the supply lines”, by stopping the flow of concrete to Grocon from Boral. Mr Setka made clear to our management that if we did not submit to the CFMEU’s demand to stop supplying concrete to Grocon, the CFMEU would block our supply through its control of construction sites throughout the metropolitan area. Further, he invited our management to join with the CFMEU and conspire to violate the Competition and Consumer Act 2010 (Cth) (the “Act”) by telling our own customers that we were prohibited from supplying them due to pickets and blockades of CFMEU members sent to our gates to further this conspiracy.

I respectfully suggest that there are also grounds for the Commission to consider whether to exercise its power under section 6P of the Royal Commissions Act 1902 (Cth) to furnish the evidence of Mr Setka’s conduct to the Commissioner of the Victorian Police Force or other relevant authority for further investigation as a potential breach of section 87 of the Crimes Act 1958 (Vic) (blackmail).

Those grounds are that Mr Setka:

  •  made a demand, that Boral stop supplying Grocon;
  •  the demand was unwarranted, in that Mr Setka had no right to make it;
  •      the demand was made with menaces, in terms of adverse consequences for Boral if it did not accede to the demand; and
  •      the demand was made with intent to cause loss to another, namely Boral and Grocon.

Over that time, our trucks have been stopped, our workers have been intimidated and harassed, and many of our clients in Victoria have had a “friendly visit” from union officials warning them, essentially, not to do business with us or face being cut off from the work flow the CFMEU controls. Small operators don’t feel they have the ability to stand up to the Construction & General Division of the CFMEU, and often  capitulate without realising that in doing so they may be violating the law. By this we mean sections 45D and 45E of the Act, including the following provision:

“In an acquisition situation, the first person must not make a contract or arrangement, or arrive at an understanding, with an organisation of employees, an officer of such an organisation or a person acting for and on behalf of such an officer or organisation, if the proposed contract, arrangement or understanding contains a provision included for the purpose, or for purposes including the purpose, of:

(a) preventing or hindering the first person from acquiring or continuing to acquire such goods or services from the second person;…”

The result is that our trucks have turned up at sites and have been hindered or barred from carrying on their lawful business by union heavies at the gates, supposedly on health and safety grounds. On many other occasions we have simply missed out on work because our customers don’t want to take on the CFMEU, or have acceded to a demand from a contractor above them not to take supply from Boral in order to keep peace with the CFMEU. A racket by any other measure designed to further the interests of the CFMEU through the control of construction worksites.

The Impact on Boral

Since the instigation of the secondary boycott, Boral estimates that the union’s ban has caused it to suffer a loss of Earnings Before Interest and Tax of approximately $8M to $10M to the end of June 2014 (including around $2M in legal costs). Attachment A to s illegal ban on Boral. This does not include the countless hours of management time and distraction for our business. The personal toll on our people is significant. When the tactics of the Construction & General Division of the CFMEU require Boral to engage security advisors to protect our people, the legal system has failed the Australian people.

Mike Kane - CEO - Boral - Graph

And later in the statement:

The statements of John Setka to my management that they would be at the table to divide up market share in Melbourne are chilling at the least. Parallels to the worst excesses of racketeering like behaviour and shady illegal enterprises are clear. What  will the Government do to stop this illegal design to compel obedience from the intended victim – the construction market – which means all law abiding Australians? What is the motive of the Construction & General Division of the CFMEU in its mission to gain control of the construction market – legitimate union purposes in the interests of its members or a desire to wield power and extract tribute?

Inadequacy of existing legal remedies in light of CFMEU’s disregard for the law

Boral has spent considerable time and resources exploring all available legal avenues to obtain appropriate redress for the CFMEU’s illegal conduct, and, most importantly, to bring an end to the CFMEU’s illegal black ban. Boral obtained an injunction against the CFMEU to stop giving effect to the illegal ban on 28 February 2013. Shortly after the CFMEU imposed the illegal ban on 14 February 2013. That injunction was confirmed and extended on 7 March 2013, and again on 5 April 2013.

Despite those injunctions the CFMEU continues to implement its illegal ban to this day, in defiance of the law and with impunity.

Boral brought the CFMEU’s illegal conduct to the ACCC’s attention in April 2013. The ACCC is now conducting a formal investigation, with which Boral is co-operating fully. Nevertheless the CFMEU continues to implement its illegal ban with impunity.

Boral have engaged with the FWBC in relation to the CFMEU’s illegal conduct since June 2013. The FWBC is also conducting an investigation, with which Boral is co-operating fully. Nevertheless the CFMEU continues to implement its illegal ban with impunity.

I used to believe that this type of racketeering could only flourish in the shadows. But apparently, in Melbourne, on high rise construction projects, the law as it stands is largely an impotent observer to the behaviour of these thugs, cowards and bullies.

Mike Kane (Click here to read the full statement)

Other evidence in relation to John Setka that was raised at the Royal Commission over the last 2 days include Mr Setka threatening to kill someone: “I’m going to come down there rip his head off” and “bury his head next to Ned Kelly’s.””. And leaving a nasty voicemail for a builder which was played at the Royal Commission: “Leigh, its John Setka, can you please give me a ring about this f—ing dog Turkish f—ing painting piece of s— on your job.” (Click here to read more)

How does a fool like Setka get to his position in the first place one has to wonder. As an official of an organisation he should never use the language he did in the voicemail and should be sacked for that alone. I can’t see John Setka surviving the Royal Commission as a CFMEU official as he has to many enemies and they have a lot of dirt on him. The CFMEU should ditch Setka now before he does more damage to the union’s reputation and if Setka had any self respect he would resign.

It is from unions like the CFMEU that Labor Party politicians come from and if the unions are run in a corrupt manner so will the Labor Party which as we know it does. Ultimately our government are run by the same people (when Labor are in power whether that be state or federal) so we all should take an interest in what happens at the unions even if we are not members as it gives us a guide of what will happen if the Labor Party wins government.

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11 replies »

  1. Shane I must agree with you and commend you on your excellent reporting, one of my greatest fears is that even though we go though these Royal Commissions and see the criminality that is exposed by them, but we often never see Criminal Charges being laid because of what I now call “Political Interference”. We can not afford another Australian Wheat Board/AWB – Saddam Hussein Bribery Style Scandal, without anyone being charged for their crimes again, my personal view is that these Royal Commissions should be allowed to lay their own Criminal Charges and remove the Politics from them.

    The next Royal Commission should be into Australia’s Banking and Financial Services Industry , if this was at all a level playing field and as I said I just fear that Politics will get in the way of a true and equal Justice System with back door deals, with the
    CFMEU Royal Commission, a Banking and Financial Services Industry Royal Commission and any others that might follow unless it is Depoliticized..!!

  2. Can the RC stop this corruption? How Setka get away with this year after year after year without criminal charges being laid? Just ruins people’s lives that man – he should be locked up and the key thrown away! Where is Daniel Andrews standing in all of this? Another labor BLIND EYE???

  3. The simple way to fix it, is to charge the other concrete companies, who are complicit with the CFMEU to ‘freeze out’ Boral, with knowingly being involved in an illegal cartel.

    The trouble is most of larger companies (and the ‘wimpy employer associations) in this field are already so compromised they will not back-up Boral and neither will the corrupted and totally ineffectual ACCC .

    What we need is an anti-racketeering law and a Govt and a judiciary with enough ‘spine’ to ensure that both unions and employers comply.

    If this obscene racketeering is not attended to forthwith, just imagine the havoc,blackmail and union engineered ‘cost overruns’ that taxpayers will have to fund with all the Fed and State infrastructure projects in the pipeline !

  4. Shane, It is time that all Unions where brought under the Clubs and Companies Act, or some sort of control and audit method. Organizers and management of these criminal groups must be accountable to the laws of the land. These stand-over tactics are what got the B.L.F. deregistered a few years ago. Apart from that any Organizer for a union should be qualified in Industrial Law. I feel that would assist to keep the grubs out of the loops. I can’t believe that all the members of these unions are brain dead and support these corrupt officials in their respective unions.

  5. I believe that the Commissioner should require that the heads of those organisations that are dragging their feet in bringing the CFMEU to book appear as witnesses before the Commission. Ken Lay should be first. How can a Commission into Union corruption neglect to interrogate the gatekeepers?

  6. Union thuggery in the construction industry has been happening for years in Melbourne, add to this many years ago on a regular basis, train strikes, tram strikes, electricity strikes, wharf strikes and other industry strikes.
    The wharves around Australia were always in the spotlight for regular strikes, and who was the union dockers /labourers leader at one time, William Shorten, father of the current Labor leader.
    The history is written on the following site :-

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