Rebuilding CFMEU a ‘mistake’ while probe ongoing, inquiry told

Senior staff for Queensland’s inquiry into the CFMEU have criticised departing federal government-appointed administrator Mark Irving’s suggestion that the union is moving to a new “rebuilding” phase.

The comments came as the inquiry heard more detail on Tuesday about the union’s efforts to influence Brisbane’s $9.8 billion Cross River Rail project, with the contractor estimating the impact at $830 million.

After this masthead broke news of his departure on Monday, Irving said in a statement that he would hand over to respected union boss Michael Crosby – most recently overseeing a clean-out of the NSW branch – for this work.

Giving brief opening remarks in Tuesday’s hearing, senior counsel assisting, Edward Gisonda SC, said work to investigate past wrongdoing in Queensland was “nowhere near complete”.

“It is a mistake, in my submission, to think that proper rebuilding can occur without the full understanding that only a commission of inquiry can deliver,” Gisonda said.

“We hope that Mr Irving’s replacement – Mr Crosby in the immediate term, and either Mr Crosby or someone else in the longer term – understands the importance of the work of this commission and demonstrates a cooperative approach to the commission, [and] where appropriate of course, protecting the legitimate interests of the union’s members.”

Earlier, as Commissioner Stuart Wood KC confirmed the legal representatives in attendance, there was laughter in the Brisbane courtroom as he asked Chris O’Grady KC, counsel for the CFMEU administrator, who he was there representing on Tuesday.

“I ask the same question,” O’Grady said. “I continue to appear for the administrator, who, at this point in time, remains Mr Irving.”

Irving will remain with the administration as a senior counsel. The federal government thanked him for his work, with frontbencher Jason Clare also pointing to his two recent heart attacks.

“Mr Irving has done a good job in very, very difficult circumstances,” Clare told reporters.

The inquiry heard last month of the CFMEU’s years-long campaign of pressure to try to have its way on the mammoth Cross River Rail project, involving kilometres of tunnels under the Brisbane River and CBD, and new or upgraded stations.

The former Labor government was also said to have “swayed the negotiating balance” in early stages of contract negotiations, according to evidence from both the Cross River Rail Delivery Authority boss and a former executive with major contractor CPB.

Another senior CPB figure, Queensland and Papua New Guinea general manager Vince Sanfilippo, told the inquiry on Tuesday about one incident during negotiations that did not “feel right”.

Contractors were given a letter that accepted CFMEU-led efforts to take ground from the Australian Workers’ Union and extend conditions to subcontractors, which they had advice breached federal codes.

It emerged this had been drafted by Scott Gartrell, an adviser to the delivery authority who was said to have been appointed on the suggestion of then deputy premier Jackie Trad, and sent to CPB through a Hotmail address.

On Tuesday, the inquiry was taken through a report prepared by Sanfilippo for the delivery authority, detailing the financial stress that the Cross River Rail project was experiencing.

Amid inflation and other pressures, the contractors sought to estimate the cost to the project of the CFMEU’s campaigns and the government’s introduction of the best practice industry conditions policy.

“The IR [industrial relations] component of this we calculated at $580 million at that point in time. And then there’s also a future-looking component to it, which we had to estimate in this report,” Sanfilippo said.

“We quantified [this] could be in a range of $100 million to $400 million, and we adopted a midpoint of that, which was $250 million. At the time of writing the report, we’re probably in the darkest days. We had strikes everywhere. We had no productivity. The administration had not come into effect.”

Wood attempted to use the figures to calculate the role of the CFMEU and BPICs in project budget escalations detailed by delivery authority boss Graeme Newton last month.

Gisonda said there was no evidence, and none would be given, that any part of the report or matters in it were accepted or agreed to by the state. A commercial-in-confidence resolution to the matter was reached last year.

After last week’s evidence that former Labor minister Grace Grace threatened to tear up a $1.5 billion contract on the Toowoomba Bypass project if contractors failed to make peace with the union, Grace has been granted formal legal representation before the inquiry.

The first former government figure to take such a step, Grace’s legal team includes Adrian Duffy KC and Kylie Hillard as counsel, with instruction from David Quinn of Thomson Geer.

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