In early 2017 the Australian
Competition and Consumer Commission (ACCC) put the building and construction
industry on its priority list, which identifies industries where the ACCC believes
there are sufficient reasons for more intensive monitoring and investigation. As
with any regulator the ACCC has limited resources, so this list indicates where
those resources are being directed. In particular, unfair contract terms and
misconduct were targeted as part of the key
enforcement and compliance priorities for 2017.
The ACCC is an
independent Commonwealth statutory authority responsible for enforcing consumer
protection and fair trading laws and for promoting competition under the Competition
and Consumer Act 2010. The ACCC investigates and prosecutes cartels and
other types of anticompetitive conduct. Recent investigations by the ACCC
into the industry include a 2015 inquiry into price fixing and cartel conduct
in the Canberra
construction industry and proceedings against the Construction, Forestry,
Mining and Energy Union for secondary boycott conduct.
Whatever the ACCC has on the building and construction industry
led to the establishment of a Commercial Construction Unit, a 14-member
specialist unit to investigate alleged anti-competitive conduct in the
commercial construction sector.
In a press release ACCC chairman Rod Sims said the unit would allow the
watchdog to focus on conduct of construction industry participants that might
raise concerns under federal competition and consumer law: “The types of
construction industry participants that could potentially be investigated by
the unit include builders, subcontractors, unions and industry associations. The
ACCC is aware that conduct in this sector has raised serious allegations of
misconduct over a number of years. The unit enables a strategic focus to be
given to work in this sector.
In a speech
earlier this year, when the unit and its work was disclosed, Rod Sims said “We
have some continuing investigations and we will put additional resources into
some of those matters, and additional inquiries we have been scoping, to
investigate fully some serious allegations of anti-competitive conduct.” Over
2017 the number of people in the unit has increased.
There are as yet no details of
the work of the unit, led by Jane Lin, or any current investigations. However, the
unit has been funded as part of the Government’s response to the 2015 Royal Commission
into Trade Unions, whose report was covered in this post, which found serious
issues of illegal conduct by both unions and contractors, and involvement of
organized crime in the industry.
There has also been a Memorandum
of Understanding signed between the ACCC and the Australian Building and
Construction Commission (ABCC), another independent statutory authority, established after the royal
commission by the Building and Construction Industry (Improving
Productivity) Act 2016. The ABCC is primarily responsible for industrial
relations and has successfully prosecuted a number of construction union
officials.
The ACCC and the ABCC both have regulatory roles and
responsibilities in relation to building and construction, and the work of the agencies
is often complementary as they are both concerned with monitoring and reporting
on the industry. The MOU identified issues where they intend to work together
as:
(a) compliance with the CCA by building contractors and
subcontractors covered by the Code for the Tendering and Performance of
Building Work 2016 (Building Code)
(b) collusive tendering by building contractors and
subcontractors covered by the Building Code
(c) other restrictive anticompetitive agreements between
participants in the building and construction sectors
(d) unfair contract terms and security of payment compliance.
With the background of the Royal
Commission report and the ongoing ABCC cases
against the CFMEU and/or officials, the ACCC will also continue to pursue the
union. Nevertheless, the Royal Commission produced plentiful evidence of
illegal behaviour by contractors and developers, so the ACCC can be expected to pursue
those lines of inquiry too.
