Intimidation - I

The ALP (aka the Anti-labour Party) agrees with the Coalition that the construction industry still needs its very own Stasi to stamp out intimidation on building sites.

Viewed historically, such intimidation takes three forms: one, employers bully workers into violating safety regulations and into working for less than the award; two, workers pressure employers to stop breaking the law; three, employers intimidate each other through price-fixing and collusive tendering.

The unions claim that what their enemies call intimidation is no more than an effort to enforce laws about safety and to stop contractors shooting through without paying their workers. Indeed, the officials argue, if the Stasi prevented those crimes, then the union intimidation would disappear.

If history is any guide, the chance of achieving those outcomes is zero. The employers fought safety regulations every step of the way. For instance, builders and contractors in South Australia initiated their trade association to oppose an Employer’s Liability Bill in 1884. Their Victorian counterparts blocked laws to appoint State inspectors of scaffolding into the 1930s.

Labourers who refused to work on scaffolds that violated the regulations got the sack until activism on sites improved matters. Today, refusing to start until conditions comply with the law risks a criminal charge.

The construction unions embarrassed Commissioner Cole into excusing his neglect of safety violations. He claimed that that aspect had been widely investigated elsewhere. On that basis, intimidation by unions needed no inquiry at all, given the run of Royal Commissions into their behaviour across the previous 30 years.

On top of the perennial intimidation by dismissal for sticking up for one’s right not to be manslaughtered, the Stasi are now there to intimidate workers who cooperate to avoid putting their lives and limbs at risk.

In the past, the employers did a larger share of their own intimidation. Just before Christmas 1972, a Sydney contractor wrote the following to the NSW BLF Secretary, Jack Mundey:

Dear Sir,
I wish to apologise to Mr. Vince Ashton, organiser of the Builders’ Laborers’ Union, for an incident which occurred on Lipman’s job at Sutherland St., Cremorne.
Mr. Ashton had checked on a labourer’s financial position.
I asked Mr. Ashton if he was married and did he have any children? He replied, yes. I then told him that he had better watch out for his wife and children.
I wish to sincerely apologise to Mr Ashton for these threatening remarks.
Yours sincerely, etc  

18 June 2007

Intimidation - II

Employers in the construction industry have always heavied each other through price-fixing and collusive tendering, as Adam Smith said they must.

Contractors who offered to settle industrial disputes in defiance of the Employers’ Federation had their supplies cut off.

The pressure to toe the line extends beyond the building sector itself. In May 1971, the NSW unions struck for improved accident pay. An insurance firm withdrew its offer of coverage under advice from its industry peak body.

The history of the building industry is peppered with inquiries into price-fixing by suppliers. Labor governments set up State brickworks to break the price cartel. Brisbane’s Archibishop Duhig attacked the brick-makers in 1931 for driving up the costs of his churches.

The Inter-State Commission found in 1919 that, although there was “no formal agreement between the cement manufacturers, but there is an understanding between the principal manufacturers and they fix prices.”

In 1968, the three majors in ready-mix concrete launched a price-cutting war to force small competitors to sell-out. At the time, Consolidated Quarries had 30% of the Victorian Market. Its directors alleged:

The interstate companies are now implementing a price war and quoting predatory cuts at prices below cost of production. Current cartel price for 3000 psi strength was $15.80 but they offered it at $12-13 to win customers and bankrupt competitors.

The big three then dropped their price $9 a cubic yard. Consolidated fell to Pioneer.

Collusive tendering is the other strong-arm of employers belting up on their own kind. The 1990 NSW Royal Commission into the building industry came off the rails into a bog of bid-rigging around the Master Builders Association.

The Federal Coalition learnt from that debacle when it wrote the terms of reference for the Cole Royal Commission. Hence, Cole did not follow-up the convictions of ready-mix concrete companies for price-fixing throughout the early 1990s.

Current head of the Competition Commission, Graeme Samuel, describes such activities as “a silent extortion that in many instances do far more damage than many of worst consumer scams. They steal billions of dollars both here and abroad from business, tax payers and ultimately from you and me as consumers.” The concrete racket continues with the octopus in Germany paying a €700 fine in 2003, while four US suppliers pleaded guilty a few days back.

So, there is plenty of work for the Construction Stasi. They might start by seizing the “commercial-in-confidence” files of the law firms advising the Coalition on matters relating to the Property Council and the Master Builders. Armed with that information, the Stasi could turn their powers of interrogation against the officers of these organisations to confirm how history is repeating itself.

Who should be hand-picked to head a Royal Commission aimed at the intimidation of employers by employers? Forcibly retired Justice Jim Staples remains fighting fit.

19 June 2007