Tuesday, 29 November 2011

The Untold Story: The ACCC’s role in the Waterfront Dispute - Part 6 - Easter 1998

Part 6 - Easter 1998


One of the most significant events in the entire dispute occurred on the Easter Weekend, which fell in early April 1998. The Australian Endeavour container ship, which was part of ANL, then a government owned shipping company, was to berth at Port Botany on Easter Saturday and be unloaded using non-union labour. This was to be the first time in over 50 years that an Australian container ship was to be unloaded by somebody other than the MUA. Indeed, Corrigan and Peter Reith were very publicly talking up this event as the decisive moment in the whole dispute. It was inevitable that the ACCC would be dragged in, whether we liked it or not.

We were obviously very busy trying to investigate simultaneous pickets in almost every container port in Australia, as well as trying to investigate the overseas conduct by the ITF in organising a global boycott. Accordingly, I had started work at 9am on Good Friday.

I had been working in my office for a few hours when I received a call from a senior manager who floated an idea by me. He explained that the Australian Endeavour was scheduled to arrive in Port Botany the next day, on Easter Saturday, 11 April 1998. He said Professor Fels wanted to get some ACCC officers onto the Australian Endeavour before it arrived at Port Botany so that he could announce that he had officers on the vessel who were safeguarding its passage into Port Botany. The idea was that the two officers would be put on the vessel – namely, me and my Assistant Director - via helicopter.

I carefully considered this proposal for about a nanosecond and politely but firmly refused the assignment. I decided to decline the assignment after carefully weighing up the following factors:
  • the very strong emotions that had been stirred up in the last few days;
  • the significance of the Australian Endeavour making it into Port Botany and being unloaded by non-union labour;
  • the fact that the Australian Endeavour was likely to be crewed by between 15 to 20 people, most of whom would be MUA members; and
  • (the decisive factor) the fact that I was not a very strong swimmer.
I was genuinely concerned that both I and my Assistant Director may end up going over the side of the Australian Endeavour either accidentally or on purpose. I thought our presence would be much too inflammatory for the dozen or so angry MUA crew members on board the vessel.

I subsequently discovered that the ship’s captain was also not very keen on the plan. In addition to having concerns about our safety, he was also concerned that the two ACCC landlubbers would end up getting seasick.

A while later I received another call from this same senior manager who suggested a different and marginally less hair-brained scheme – namely to “embed” both me and my Assistant Director inside the Patrick Port Botany container facility, behind the picket lines. This would allow Professor Fels to say that he had ACCC officers on the wharf. For some reason I agreed to this proposal, mainly because I though it was a much safer option that Plan A.

I started to regret my decision when I received my detailed instructions on how we were supposed to get to Port Botany. We had to meet two of Corrigan’s lawyers, from the Freehills law firm, at the Opera House wharf at midnight on Good Friday and then get on board a high speed charter vessel, which would take us to Port Botany. I seem to recall I may have been provided with a password to use when we met up with the Freehills lawyers. I cannot recall what the password was, but it was probably something like “Rosebud”.

Getting behind the picket lines

Accordingly, we made our way down to the Opera House and met up with the two Freehills lawyers at midnight. We went around behind the Opera House to the wharf and there boarded a high speed charter vessel which was to take us to Port Botany under cover of darkness.

Once we were aboard the charter boat, we met our fellow passengers in addition to the two Freehills lawyers:
  • the captain and his first mate who appeared to me to be quite terrified at the prospect of taking us to Port Botany; 
  • a former British SAS officer who had been hired by Corrigan to provide advice on security issues; and 
  • a cameraman whose role it was to capture video footage of the boycott activity.
We set sail for Port Botany. The former British SAS officer surprisingly decided to take a nap, presumably to prepare himself for the tasks ahead. The Freehills lawyers went up to the deck to keep an eye out for any MUA any vessels which may be trying to intercept us.

Meanwhile I, the cameraman, and the Assistant Director decided to avail ourselves of the hospitality on the charter vessel. After a couple of beers and bourbons, we were summoned onto the deck by the Freehills lawyers. They explained to us that the MUA had set up a makeshift flotilla of small vessels in Port Botany whose role it was to intercept any vessels seeking to get in behind the picket lines from the open sea. I admitted that I could not see any of these MUA vessels because it was so dark. The reason I could not see these vessels was because they had all turned off their lights so they would not be spotted by people like us.

However, the Freehills lawyers had come prepared – they had a pair of night vision binoculars. I was so excited at the prospect trying out a pair of night vision binoculars, that I grabbed the pair from the Freehills lawyer’s neck without first giving him an opportunity to take the strap off. After apologising for accidentally garrotting him, I was able to make out a few small MUA crewed vessels sailing around Port Botany looking for intruders.

I was curious why the people on these vessels appeared unable to see us. The captain explained to me that the reason they could not see us was because he had also decided to leave his lights off. He was worried that his vessel may be identified by the MUA, which may subsequently result in recriminations and reprisals.

Fortunately, the charter vessel we were in was much more powerful and manoeuvrable than the small MUA vessels which were trying to intercept us, so we were able to navigate our way through the flotilla without incident. One vessel was able to get quite close to us, but all the person on board could do was hurl a few insults at us before we left him in our wake.

Unfortunately, when we arrived at Port Botany the captain, in his haste to get away, dropped us off at the wrong location. Instead of letting us off on the Patrick’s wharf, he let us off on a small wharf which was not actually attached to the Patrick’s wharf. Accordingly, we had to get across a fairly large gap between the place where we had been dropped off and the Patrick wharf without falling into a dark hole which appeared to be four or five metres deep. What made our task more difficult was that it at about 1am in the morning and pitch dark.

One of the security guards on the Patrick’s wharf had been expecting us. When he realised we were stranded on the wrong side of the wharf, he went and retrieved a ladder which he put over the gap. The idea was that we would climb across the ladder to get to the correct side of the wharf.

I climbed across quite slowly. When I got to the other side, I thought I should assist the next person to come across by holding down the end of the ladder to make sure it was secure. Foolishly, rather than putting my foot on the ladder where it was resting on the wharf, I put my foot on the ladder at the point where it overhung the wharf. The result was that the ladder shot up in the air just as the former British SAS officer was seeking to cross the ladder. Unfortunately, it struck him between the legs.

Even though I immediately apologised, he did not look very impressed by what I had done. I thought for a moment whether it might be safer for me if he did not actually get across to the Patrick wharf. Accordingly, I gave a fleeting thought to pulling the ladder across to my side and leaving him stranded on the other side. I decided against this strategy as it would no doubt have just have antagonised him even more.

Embedded behind the picket lines

Once we had all made it over to the correct side of the wharf, we travelled to the main office to meet the manager in charge of security. On entering the main office, we noticed that all the offices had been trashed – papers were all over the floor and furniture had been smashed or pushed over. We asked what the Freehills lawyers what had happened. They told us that the MUA staff had trashed most of the offices when they were removed from the premises the previous Tuesday.

We met the manager in charge of security at Port Botany, who explained the safety rules. We were to go nowhere outside the main office without being escorted by at least one security guard and a guard dog. He also advised us that he could not be responsible for our safety if we did not follow this direction.

The site was occupied by about 15 security guards and about half a dozen Doberman or German shepherd guard dogs. I must admit they looked like a very tough lot. Contrary to what I had expected, they did not walk around with balaclavas.

We immediately asked to do a tour of the facility. We left the office with a couple of security guards and guard dog. It must have been about 2am by the time we started inspecting the facility.

The first thing we noticed was that there was a small group of protestors outside the facility. On seeing us, these protestors decided to follow us around the facility from the other side of the fence.

This small band of protesters initially hurled a variety of insults at us, which did not phase us very much. However, when we got a little bit too close to the perimeter fence a hail of rocks of various sizes rained down on us. We quickly retreated to a safer distance.

I noticed that my Assistant Director appeared to be picking up one of the recently launched projectiles. I worked out that it may have been his intent to send the projectile back to its source. I immediately stopped him and explained that while my knowledge of the Australian Public Service Code of Conduct was fairly sketchy, I was pretty sure it did not permit us to throw rocks at the picketers, even if they had thrown rocks at us first.

I also noticed a small red light flickering around on our head and torsos. We were quite puzzled at what this red light was. The security guard explained to us that it was the infrared light from a laser pointer. He said that the picketers had brought some of these laser pointers to the docks to try to scare the guards at night into believed that the light was in fact the infrared sight on a high powered rifle.

I had decided before heading to Port Botany not to bother carrying a note book as in pitch darkness and being on the move it would have been impossible to take written notes. Rather I brought a small hand held tape recorder, which I could use to make audio recordings of any observations or potential witness interviews. I decided to tape a few examples of the abuse being hurled at us by protestors so that I would be able to give the staff back at the ACCC some idea of what it was like at the facility.

After doing our tour, we spent some time thinking about the likely course of events later that day when the Australian Endeavour arrived. We knew that there were three possible places where the MUA could take action to impede the Australian Endeavour arriving and being unloaded- either:
(a) the MUA staff on the Australian Endeavour may do something to prevent that vessel coming into Port Botany; 
(b) the MUA staff on the tugboats may refuse to bring the Australian Endeavour into Port Botany; and/or 
(c) the picket line may prevent the buses of non-union labour from getting through the picket lines.
Given that we knew that the Australian Endeavour was owned by the Commonwealth Government, we doubted that the MUA would be able to do much to stop the vessel from coming into the port.

We thought the main risk was that the MUA may withdraw towage services. It was for this reason that we had sent the MUA yet another warning letter the day before cautioning them against withdrawing towage services to the Australian Endeavour.

As morning approached, there was a great degree of anticipation. The picket line at the entrance to the facility had grown so that it was now more than 1000 picketers. The picketers started chanting and hurling insults at anybody they could see inside the facility, including us. It was apparent to us that the picket line was getting to such a size that the few police outside the facility would not be able to do anything to restrain its actions. That was assuming that they had been of a mind to do so, which they clearly were not.

Word got to us that the MUA crews on the tugboats had refused to bring the Australian Endeavour into port. The MUA’s alleged concern had been with safety – namely, that the tugboat crews were at risk from the security guards and guard dogs. Accordingly, the Australian Endeavour had to wait off the coast for a number of hours until a solution could be worked out.

I remember the Managing Director of Adsteam, which owned the tugboats, arriving at the MUA office to try to convince the MUA to change their decision about providing towage services. After a number of hours, he had brokered a deal with the MUA, whereby they agreed to provide the towage services. The MUA would provide towage services on condition that the security personnel and dogs were placed in a secure area well away from the tugboat crew prior to the tugs arriving.

We went out to the loading area of the wharf to await the arrival of the Australian Endeavour. By this time, I had been working for more than 24 hours straight and I was incredibly tired. I had been sitting on the wharf for a short time, when I closed my eyes for a couple of seconds. Before I knew it, I was fast asleep on the middle of the wharf near one of the large cranes. I was woken up by the sound of helicopters above me. I quickly realised that the helicopters were from various televisions networks and that a number of them had cameramen hanging out of the helicopters to film activity (and potentially inactivity) on the wharf.

I realised that it would have been very embarrassing not only for me but also for the ACCC and for Professor Fels if the evening news had featured images of one of the ACCC’s apparently fearless and intrepid investigators lying flat on his back asleep on the wharf. Accordingly, I quickly woke myself up and tried to look as fearless and intrepid as I could.

Friday, 25 November 2011

The Untold Story: The ACCC’s role in the Waterfront Dispute - Part 5 - First Moves

Part 5: First moves

Office of Employment Advocate

As stated in Part 3 of the Untold Story, the Howard Government had very high expectations of the OEA in the event of a dispute with the MUA. However, these expectations were not met. Very soon after the dispute broke out, the OEA expressed the view that it did not have jurisdiction to get involved in the dispute. In other words, the OEA ended up vacating the field and leaving the entire enforcement effort to the ACCC.

As I understood the OEA's reasons at the time, they claimed that as the MUA staff had been sacked by Corrigan they were no longer technicially employees and as such the OEA did not have jurisdiction.

However, one can understand OEA’s position. The expectation prior to the sacking had been that Corrigan may seek to use non-union labour at some of his stevedoring facilities. Clearly if the MUA had sought to impede non-union workers getting to their workplaces, the OEA would have been expected to assure the safe passage of these non-union workers through picket lines. Indeed, there were reports in relation to other disputes, that OEA officers had boarded trains and trucks to assist non-union workers employed in other industries to get though picket lines

The problem which the OEA faced in the current case was that Corrigan’s actions in sacking his entire MUA workforce looked very much like a clear breach of the Freedom of Association provisions of the WRA – ie the MUA workers had been sacked for the sole reason that they belonged to a union. There was a very strong argument that the OEA’s priority should have been to investigate Corrigan for breaching the WRA, rather than helping Corrigan to get non-union workers through the picket lines.

Despite the dilemma which the OEA faced, the way it chose to get out of this dilemma was highly unprincipled. It decided not to assist either party to the dispute – ie it did not help Corrigan get non-union labour through picket lines nor did it investigate Corrigan for a Freedom of Association breach for sacking his entire MUA workforce. Ultimately, the OEA’s decision to do nothing during the Waterfront Dispute severely damaged it’s credibility as an organisation.

At the ACCC we were very disappointed by the OEA’s decision to stay out of the dispute - this meant we would have to do the whole job ourselves.

MUA’s first moves

The MUA was very quick to move after the sackings. Indeed, it was very impressive to see just how fast they were able to pursue so many different strategies simultaneously.

First, the MUA were able to mobilise a great number of protestors to get down to the wharves by skilfully playing the media. Having said that, it was not too hard for the MUA to get the media’s sympathy given the extreme nature of Corrigan’s actions. The MUA clearly had a flare for dealing with the media, particularly John Coombs who was very articulate and flamboyant. Corrigan on the other hand was very poor at dealing with the media because he came across as he was, namely cold and unsympathetic.

Second, the MUA went to the Federal Court to get interim injunctions preventing Corrigan from:
  • sacking his MUA workforce;
  • disposing of any assets or 
  • using alternative workers. 
The MUA were very fortunate to get Justice North as the judge on their matter. He was probably the best federal Court judge for the MUA as he was clearly quite sympathetic to the union movement. Indeed, he made his name as a silk by representing unions in various in high profile boycott cases.

In particular, Justice North had been the counsel for the Australasian Meat Industry Employees Union (AMIEU) which had been taken to court on a number of occasions for allegedly contravening the boycott provisions of the TPA.

Justice North granted the interim injunctions sought by the MUA.

Third, the MUA appeared to have already approached the ITF to try to get them involved in the dispute. Mr Kees Marges, the ITF Docker’s Section Secretary was quoted as saying the day after the dispute:
Shipping lines should be aware that if their ships use Patrick in the future they will be targeted in ports around the world.[1]
Fourth, the Australian Workers Union (AWU) announced that it was contemplating taking boycott action to close down the whole Australian oil industry in support of the MUA.

Mood within the ACCC

It is fair to say that virtually nobody in ACCC enforcement wanted to work on the Waterfront Investigation, particularly in Sydney.

The main reason enforcement staff did not want to assist was because many of them had a philosophical objection to doing the work. Most enforcement staff, particularly in Sydney sympathised with the MUA and believed that Patrick had done the wrong thing. Ironically, the entire Waterfront Team also believed that Corrigan had done the wrong thing. However, we also knew that because Corrigan had not breached the TPA in sacking his MUA staff, there was nothing the ACCC could do about his conduct.

The Waterfront team was of the view that if Corrigan had breached the Workplace Relations by sacking his MUA staff that it was up to the OEA to pursue him for that conduct. By the same token, if Corrigan had engaged in any illegal corporate activities, such as asset stripping it was up to ASIC and the ATO to look into that conduct.

Another reason why some Sydney enforcement staff did not want to help was because they were concerned about the violence which was a daily occurrence on the picket lines. This was an entirely legitimate concern.

Nobody in senior management wanted to force anybody to assist in the waterfront investigations against their will. Unfortunately, the consequence of this was that the ACCC’s Waterfront Team remained very small – ie three officers for the duration of the dispute. Occasionally, we would get some assistance from a Regional Director for a specific task but that was quite rare. Accordingly, the small ACCC team and the external legal team ended up working enormously long hours.

Unfortunately, some senior enforcement staff could not help but share their opinions about the ACCC’s role in the Waterfront Dispute with the Waterfront team. On one occasion, a senior ACCC enforcement colleague called me a “Nazi” and "a collaborator” to my face and in front of some junior staff because of my role in the ACCC’s Waterfront investigation.

I responded by saying that the ACCC could not concern itself with whether Corrigan had done the wrong thing. Rather the ACCC had to fulfil its statutory function and enforce the TPA. The important principle was that for the ACCC to respect and uphold the rule of law. This was particularly important in circumstances where every other party involved in the dispute was breaking or ignoring laws with impunity and every other regulator was just sitting on the sidelines and doing nothing.

I added that the ACCC could not simply choose which laws it wanted to enforce. If the ACCC turned a blind eye to the blatant and premeditated breaches of the TPA by the MUA, the ACCC would lose its integrity and credibility as an enforcement body.

Unfortunately, my arguments did not convince my senior colleague of our bona fides. Accordingly, it was with some frustration that I facetiously asked him whether there were any other particular sections of the TPA that he was philosophically opposed to enforcing. I suggested that ACCC management could circulate a questionnaire to all enforcement staff asking them to identify which sections of the TPA they were happy to enforce and which they did not want to enforce!

Later, another fairly senior enforcement staff member decided to organise a collection in the office to raise money to support the MUA financially. I kept this information to myself as I doubt more senior ACCC management would have been very impressed with his actions in collecting money for the MUA. Indeed, it would have been a major media coup for the MUA if they had been able to say that even ACCC staff were contributing to the MUA cause.

ACCC’s response

As stated in Part 3 of the Untold Story, the ACCC had been investigating the ITF for some time prior to the sackings. Accordingly, the ACCC was quite advanced in its understanding of the way the ITF operated, how it was structured and where it possessed true industrial power.

Accordingly, Professor Fels was in a good position to make the following statement as soon as the ITF started making threats against Australian shipping:
We are focusing quite closely on the ITF threat – we are investigating that matter both in marketplace and legal terms at the moment…The ITF and any person in Australia associated with it, directly or indirectly would more than likely be in breach of the act if they attempt to apply boycotts in support of the MUA.
Even at this early stage, we believed we had an effective legal strategy for dealing with ITF threats to Australia shipping. The starting point was section 5 of the TPA which states:
Parts IV, IVA and V (other than Division 1AA) extend to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia or by Australian citizens or persons ordinarily resident within Australia.
Part IV of the TPA contained the relevant boycott provisions – sections 45D, 45DB, 45DA, 45E and 45EA.

Section 76 of the TPA created accessorial liability – namely a person would be liable for aiding, abetting, counselling, procuring, inducing or attempting to induce, being knowingly concerned, or conspiring with others to engage in a breach of the TPA.

The MUA was also a body corporate incorporated in Australia.

Therefore, we believed that we would be able to take action against the MUA in Australia for aiding, abetting, counselling, procuring, inducing or attempting to induce, being knowingly concerned, or conspiring with the ITF or any overseas unions or entities to engage in a boycott of ships which had been loaded in Australia by non-union labour.

The ACCC also believed that it could take legal action against MUA and ITF officials who aided, abetted, counselled, procured, induced or attempted to induce, or were knowingly concerned in, or conspired with the ITF or any overseas unions or entities to engage in a boycott of ships which had been loaded in Australia by non-union labour if these individuals were Australian citizens or persons ordinarily resident in Australia. 

I remember doing nationality checks on a number of senior officials of the ITF and other overseas unions to find out whether, just by chance, any of them were Australian citizens. For example, I discovered that until 1977 the head of the International Longshore and Warehouse Union (ILWU), based on the West Coast of the US, was an Australian, namely the legendary Harry Bridges.

We did not believe that we could take legal proceedings against the ITF directly as it was not engaging in conduct in Australia nor did it satisfy the other elements of section 5. We also did not believe there would be much point taking action against the ITF in Australia under the boycott laws if we would be unable to enforce our orders overseas where the ITF was based.

While the ACCC had a good legal theory about how to prove the MUA’s liability, it did not yet have the evidence to prove its legal theory or even know how to go about getting this evidence. Getting evidence that the MUA was conspiring with the ITF to organise a global boycott of Australian shipping was not going to be an easy task.

I am also sure that most of the unions who supported the MUA by joining picket lines during the Waterfront dispute never understood how easy it would have been for the ACCC to take action against them under the TPA for their conduct.

Under section 45DC(1), if two or more persons who were members or officials of the same union were involved in a picket line, the union would be automatically deemed to be involved in the picket line. The union would then have to prove that they were not involved in the picket line because, for example, it had been an independent decision of the two members or officials to get involved.

Section 45DC(2) also provided that any loss or damage caused by the conduct of two or more members or officials of the union would be automatically deemed to have been caused by the union. Again the union had the onus of proof in relation to displacing this presumption.

I doubt the MUA or ACTU ever explained these legal technicalities to these other unions.

Despite the ease with which the ACCC could have taken action against these other unions, it decided to focus its attentions exclusively on the MUA because it appeared to be the party which was orchestrating all of the boycott conduct.

ACCC’s Investigation

Investigating the MUA’s conduct during the Waterfront Dispute was a unique experience.

A significant amount of the evidence which the ACCC used in its cases came from media reports. Senior officials of the MUA would often hold press conferences in which they would brag about how they had engaged in illegal boycott activity or had encouraged other groups to engage in such conduct. Indeed, it got to the stage where the ACCC’s evidence collection often involved no more than putting a blank video cassette in the video recorder, turning on the TV and pressing record every time a MUA official, usually John Coombs, appeared on television to make admissions about the MUA’s latest boycott.

I always thought that my mum should have been put on the ACCC payroll at that time, as she was remarkably diligent in recording any such televised admissions by the MUA at that time and then sending me copies of her videos. Given how few ACCC staff were involved in the investigation, I was grateful for any investigatory assistance I could get.

What was more difficult was actually obtaining witness statements from industry players. We would generally try to get statements from individuals who had been the victim of boycott action or who had witnessed such a boycott. Unfortunately, most industry players did not want to give evidence to the ACCC for fear of reprisals from the MUA or other unions in the future.

Another problem we faced were the time frames in which we had to obtain evidence. It was simply taking us too long to get detailed statements from the few industry witnesses who were willing to give evidence.

Accordingly, we knew we had to work out a better way of obtaining and presenting evidence if we were going to be able to commence urgent litigation to try to stop the boycotts.

First ACCC action

The first major action by the ACCC related to the threats by the AWU to go on strike in support of the MUA. As stated above, the AWU had threatened to close down the Australian oil industry by going on strike in all refineries and off shore oil rigs.

The ACCC responded to the threat from the AWU by writing a very threatening letter advising them that the ACCC would take immediate legal action against the union if it went ahead with its threat. Indeed, we explained to the AWU that their conduct would have been a clear contravention of section 45DA which prohibits secondary boycotts which substantially lessen competition. Section 45DA carried a maximum penalty of $10 million per contravention. 

We told the AWU in no uncertain terms that if they went ahead with their threat the ACCC would commence legal proceedings against them seeking the maximum penalties available under the TPA.

The AWU backed down very quickly. Indeed, I think AWU wanted to save face by stating publicly that they would make good their threat if they were asked to by either the MUA or the ACTU. In reality, the AWU must have realised that if the ACCC had taken legal proceedings against them we would have won the case and the financial costs arising from the case would have most probably have destroyed the union.

We were fairly happy with ourselves for having averted the threatened closure of the Australian oil industry by the AWU. Indeed, this became a major focus of the ACCC’s activities over the next few weeks – trying to prevent the dispute from spreading by stopping other unions from taking sympathy action in other industries in support of the MUA.

[1] “International action may see ships boycotted”, Australian Financial Review, 9 April 1998, p. 7.

Sunday, 20 November 2011

The Untold Story: The ACCC’s role in the Waterfront Dispute - Part 4 - The Sacking

Part 4: The Sacking

Industry Warning

One thing I almost forgot to mention was that a few months prior to Corrigan sacking his MUA workers, the ACCC issued a general warning to the entire industry to abide by the TPA. In the ACCC’s media release, dated 5 February 1998, it stated[1]:
ACCC waterfront investigations

The Australian Competition and Consumer Commission has warned all participants in the waterfront and shipping industries of their obligations to comply with the provisions of the Trade Practices Act.
"The ACCC is monitoring behaviour in these sectors", ACCC Chairman Professor Allan Fels said today, speaking at an industry conference on compliance with the law in Sydney.
"The ACCC is ready to act in the public interest to enforce the primary and secondary boycott provisions of the Trade Practices Act, if necessary.
"Section 45D of the Act prohibits boycotts which have the purpose, and would have or be likely to have the effect of, causing substantial loss or damage, a substantial lessening of competition or preventing or substantially hindering trade or commerce," he said. "Section 45E prohibits contracts, arrangements or understandings which have the purpose of preventing or hindering the supply or acquisition of goods or services. Section 45 prohibits anti-competitive agreements generally.
"The ACCC has been monitoring events at Webb Dock and has had contact with major players. In the current circumstances there is potential for persons or organisations involved in the industry to engage in activity, especially boycott activity, which may breach the Act.
"In particular, members of the industry should be aware of the law, especially the above provisions, and, for example, avoid: involving themselves in the unlawful withdrawal of services to a ship or stevedore; unlawfully inducing other persons or organisations not to supply goods or services to a ship or stevedore; or unlawfully hindering the transport of goods to and from ports where any of these actions are in breach of sections 45D and E or any other provisions of the Act.
"The ACCC will enforce the boycott provisions of the Act in the same manner as it would enforce the Act against other anti-competitive practices.
"The ACCC is continuing its investigations of other waterfront issues including hold-cleaning demands, the existence of alleged exclusionary agreements between shippers, terminal operators and employee organisations, and some other matters.
"Whilst the ACCC investigates complaints from industry, it is worth noting that whether or not it receives complaints the ACCC can independently initiate investigations into breaches of the Act. A prerequisite for legal action, however, is market information and evidence. Industry participants who are concerned at breaches of the Act can bring forward such information and evidence to the ACCC on a confidential basis or any other basis, and the ACCC will consider whether it provides grounds for legal action.
"The ACCC also has power under Section 155 of the Act to require, where it believes that there may have been a contravention of the Act, persons or organisations to provide documents or other evidence or to answer questions that would assist the ACCC in determining whether there have been any breaches of the law."
The idea behind this media release had been to make it clear to all participants that the ACCC would not hesitate to enforce the relevant laws if there was a contravention. We also wanted to make it clear that we were looking at the conduct of both businesses and unions.

The media release was also aimed at letting potential witnesses know that the ACCC could compel them to provide evidence in the event there were reluctant to do so voluntarily. Even at this early stage, it was apparent to us that many potential witnesses did not want to be seen to be assisting the ACCC. However, if we served them with a section 155 Notice they could claim they had been forced to assist the ACCC against their will.

The ACCC was criticised by a number of groups for this media release, including the Labor opposition, which saw the media release as an attempt to intimidate the MUA. In reality, the media release was a naïve and misguided attempt by the ACCC to keep a lid on tensions on the waterfront.

The Sacking

At 11pm on Tuesday, 7 April 1998, Chris Corrigan sacked his 1400 MUA employees.

When I came into work on the Wednesday morning, the general feeling was one of considerable surprise. Nobody that I was working with on waterfront matters had any idea that Corrigan was going to take this extreme step.

In hindsight, there certainly were many warning signs that this action was about to take place. I immediately recalled an article which had appeared in The Age only a few days before. This article had quoted a PCS trainee, Mr Jamie Meek, who claimed that his Webb Dock instructors had told him that Patrick was going to sack its workforce on Easter Tuesday.[2] Admittedly, his prediction had been out by a week, but it turned out to be surprisingly accurate.

During the course of the day, more details of what had happened the night before emerged.

First, there were reports that Corrigan had given Peter Reith advance warning of his decision to sack his MUA workforce.

Second, it also became apparent that there had been a great deal of forward planning by Corrigan. The logistics of coordinating a lockout of 1400 MUA employees simultaneously at 17 different locations around Australia was not something that anybody could have organised overnight. Furthermore, Chubb Security had been hired to facilitate the removal of the MUA and to secure the worksites. This would have required considerable lead-times.

It was apparent that Corrigan had been planning the sacking for many weeks.

ACCC’s first actions

The ACCC realised that it had to work out what we should do in response to the sacking. It was obvious that the waterfront was going to explode and that would need to be in a position to take action.

The first thing the ACCC did was make my waterfront team the full time waterfront investigation team. My three-person waterfront /mergers and asset sales team was now officially the full time waterfront investigation team!

The second thing we did was organise selected ACCC staff around the country to observe the picket lines. We decided to do this by nominating two ACCC staff members from each ACCC office whose role it would be to observe local developments, namely the conduct of the picket lines. In most cases, we selected the regional director in each office and one other person.

However, these officers were not to become part of the Waterfront team – ie they were not called on to collect evidence or assist in the preparation of the any potential litigation in the longer term. Rather their role was to assist the Waterfront team on an ad hoc basis, which turned out to be limited to the first couple of weeks after the sacking. The role of carrying out the investigation and preparing any potential litigation remained the responsibility of three-person Waterfront Team and its legal team. Indeed, the core Waterfront Team throughout the entire dispute never got larger than three people.

However, a key decision maker during the Waterfront Dispute was Luke Woodward, the General Counsel of the ACCC at that time.

The third thing we did was increase the size of our legal team. The ACCC decided to use the Australian Government Solicitor as its lawyers on the case. The members of the Waterfront team had enjoyed a very good relationship with a number of the AGS lawyers, so they seemed like the logical choice. 

We also immediately retained a number of barristers to assist in the matter. Prior to the sackings, the ACCC had been using one barrister to assist it on the hold cleaning case, namely a Queensland silk by the name of George Brandis QC. However, staff were never entirely comfortable with Mr Brandis as they had not selected him in the first place and had never worked with him before.

When the sackings happened, the team decided that it would not be appropriate to continue using Mr Brandis because of his lengthy and apparently quite close relationship with the Liberal Party. The Waterfront team wanted to avoid any perception that the ACCC was involved with the Howard Government in any way. Accordingly, even though I am sure Mr Brandis would have done a competent job, the ACCC never used him on the waterfront case again.

The ACCC decided to retain a brilliant barrister, Mr Peter Comans, as the key legal advisor in the investigation and in any future litigation. The ACCC had used Peter quite extensively in the past and we had a very high opinion of his legal knowledge and technical skills. However, the quality which I liked most about Peter was his creativity. Given that the ACCC was now embroiled in a unique situation and dealing with legislation which was largely untested (or in the case of section 45DB entirely untested) we knew that we needed a barrister who was highly creative. We knew that in the circumstances we would not be able to rely on traditional investigation and litigation strategies, particularly traditional approaches to evidence gathering.

We also retained a junior barrister, David Godwin, because of his extensive knowledge and experience in industrial relations laws. We did not want to make the mistake of only using lawyers who knew a great deal about the TPA but were ignorant of industrial laws and the way the Workplace Relations Act worked. David proved invaluable in explaining to the team the industrial relations issues which arose in relation to Corrigan’s conduct in sacking his MUA workforce.

Over the course of the dispute, we hired a number of other barristers to assist us including:
  • John Trew QC (an industrial relations silk); 
  • Richard Tracey QC (now Justice Tracey of the Federal Court); 
  • Stephen Gaegler, SC (the current Commonwealth Solicitor General); and
  • Simon White.
Observing the picket lines

The initial role of our handpicked ACCC observers was to attend various waterfront locations and simply observe what was happening. These staff then were to prepare reports which formed the basis of briefings for the Chairman, Commissioners and senior management.

Being typical investigators, these ACCC staff could not just simply attend the picket lines and anonymously observe events. Rather most of them could not resist the temptation of getting heavily involved. Most of them, on arriving at the picket line, immediately sought out the person in charge of the picket line, introduced themselves as an ACCC officer and explained that they were there to observe the picket lines. In the circumstances, this was a very audacious thing to do, as ACCC were highly unpopular with the MUA.

In fact, the ACCC had the unfortunate distinction of being unpopular with all of the major protagonists in the dispute. The union movement did not like the ACCC because they believed that the ACCC should stay out of the dispute. Corrigan and the Howard Government did not like the ACCC because they believed we did not intervene in the dispute quickly enough. I had a feeling we must be doing our job right if both sides were unhappy with our approach.

Emotions running high

It is important, in order to fully appreciate later events, to have some understanding of how high emotions were running during the Waterfront Dispute.

A good example of how inflammatory the situation was can be gained from the following incident. Jennie George, the then President of the ACTU, was addressing a few hundred sacked MUA workers at Port Botany the day after the sacking. She reportedly shouted the following “fighting words” to the assembled audience:
I couldn’t believe it, when I woke at 5am, to hear that blackshirts, dogs on chains, had been used (to clear workers off the docks). Is this Australia or is it Nazi Germany?
These statements were quite representative of the way that many people in the union movement, including senior members of the ACTU, spoke about Corrigan’s actions at the time. There were many references to “Nazi Germany”, “Hitler”, “storm troopers” and “the blackshirts”.

I found such comments to be reprehensible at the time and I still do. These comments had the inevitable effect of whipping up MUA members and their supporters into an absolute frenzy of hatred towards anybody behind the picket line or anybody trying to get through the picket line. This hatred often spilled over to anybody who was not clearly “with the picketers”, including ACCC staff.

The popular image presented in the media about the Waterfront Dispute was generally that Corrigan’s security personal were violent thugs and that the MUA and its supporters were the peaceful and innocent victims. I cannot agree with this characterisation.

I witnessed the wholesale destruction of buses full of non-union labour in Port Botany by out of control picket lines while the police stood idly by. I also had to dodge rocks thrown at me by MUA supporters simply because I was on the wrong side of a picket line. I had to escape from Port Botany by helicopter because it was simply too dangerous to try to leave the port by the public road because of rampaging picket lines. Indeed, on one occasion I, an AGS lawyer and a poor unfortunate taxi driver came within seconds of being set upon by a few hundred picketers in Melbourne when we were again caught on the wrong side of a picket line.

The reality is that in most of the ports, Corrigan had between 15 – 30 staff behind the picket lines consisting almost entirely of security personnel. On the other hand, the picket lines had often more than 1000 picketers shouting insults, throwing stones at anybody behind the picket, and trying to push over perimeter fences to try to get at those inside.

The picketers also had a practice of trying to take photos of the people inside the picket lines and then trying to identify these people by name. If they were successful in identifying one of the people behind the picket line, they would shout out the following threats the next time they saw that person:
“We know who you are and where you live.”
Picketers shouted this threat at me on a few occasions. However, I was not too worried, as I strongly doubted they did in fact know who I was or where I lived.

There is a very simple reason why the security guards wore balaclavas - it was because they were terrified that the MUA may identify them and subsequently take reprisal action against them.

I do not blame the individual MUA picketers or their supporters for all the violence, fear and destruction. Rather, I blame the leadership on both sides of the dispute for cynically using the events to pursue their own selfish aims. By doing so these leaders put the safety of thousands of people at risk, including unionists, non-union workers, security personnel, members of the general public, police officers as well as a handful of ACCC staff.

[1] “ACCC waterfront investigations” ACCC News Release, dated 5 February 1998 - http://www.accc.gov.au/content/index.phtml/itemId/87384/fromItemId/378006
[2] “Young and rural, is this the wharves’ new face?”, The Age, News Extra, 4 April 1998, p. 5.

Wednesday, 16 November 2011

The Untold Story: The ACCC’s role in the Waterfront Dispute - Part 3 - Prelude to the Sacking

Part 3: Prelude to the Sacking


Prior to discussing the events of April 1998, it is necessary to provide some relevant background.

There was great deal happening on the waterfront in late 1997 and early 1998. The general feel at the time was that the Howard Government was trying to encourage the two major stevedores to take on the MUA.

Prior to the decision by Chris Corrigan to sack his entire MUA labour force in April 1998, there had been three significant events which I will discuss in some detail – the Cairns dispute, the Dubai trainees incident and the Webb Dock hand over. The combined effect of these three events was to create a strong presentiment that something major was going to happen very soon.

Cairns dispute

The first skirmish started in Cairns on 13 September 1997. This dispute involved the decision by a small shipping agent, International Purveyors, to terminate its stevedoring contract with the MUA and to use non-union labour instead. The stevedoring contract was very small in the scheme of things – namely, to load one vessel, the MV Java Sea, with supplies for Freeport in Irian Jaya or West Papua.

The MUA responded to this decision by setting up a picket line with the intention of stopping the MV Java Sea from berthing.

On seeing the media reports, the ACCC’s Waterfront Team immediately commenced an investigation of the conduct. These media reports were the first that the ACCC had heard about the dispute. After looking at the matter, we formed the view that any breach of the TPA would only occur once the MV Java Sea actually berthed and was prevented from loading supplies. We believed that this conduct would breach section 45DB of the TPA. Prior to that event, the picket would not have interfered with international trade and as such would not have constituted a breach of section 45DB.

The Waterfront Team worked extensively with the Chairman, Commissioners and General Counsel on drafting a letter to the MUA. The aim of our letter was to warn the MUA not to do what it was proposing to do – namely, to boycott the MV Java Sea when it berthed. I doubt I have ever spent as much time in my entire career in trying to finalise a simple two-page letter. However, the length of time we spent on this letter was an indication that we recognised, even at this early stage, that the MUA was not the type of organisation to whom the ACCC could make idle threats. We knew that if we were going to make any threats to the MUA about their proposed conduct our threat had to be credible.

Unbeknown to the ACCC, the MUA had decided to take an entirely different approach to this dispute than just organising a traditional domestic boycott. As explaining in detail in Helen Trinca and Anne Davies’ book Waterfront: The Battle that Changed Australia (Waterfront), the MUA had been focused on trying to reverse the decision made by International Purveyors to cease using MUA labour. The MUA sought to do this by placing pressure on International Shipholding Inc., the owner of the MV Java Sea.

Waterfront recounts how Mr Trevor Charles the local representative of the International Transport Workers Federation had been trying to contact International Shipholding Inc to convince the company to intervene in the matter. It has subsequently been reported that the MUA and ITF made it clear to International Shipholding Inc. that unless it did its best to convince the relevant parties to rehire the MUA stevedores in Cairns its entire fleet could become the target of a global boycott.

Apparently, the ship owner agreed to intervene by contacting Freeport, the ultimate customer, to convince them to reverse their agent’s decision to use non-MUA labour.

The ACCC did not know all these details. All the ACCC knew was that the owner of the MV Java had intervened in some way and that the MUA stevedoring contract had been reinstated.

It is quite embarrassing to admit that the ACCC was entirely unaware of what was happening in the background to this dispute.

In addition, we had not anticipated that the MUA would go off shore to try to influence the course of the dispute. We had expected that they would have continued their domestic boycott until the MV Java Sea arrived.

After this matter resolved on 18 September 1997 (a mere five days after it had started) the Waterfront team carefully considered what had just occurred. We realised that while we had not done anything of any significance, except spend an enormous amount of time on a two-page letter, we had learnt a number of important things, including a number of important things about the way the MUA operated.

First, it seemed to us that everybody else knew a lot more about what was happening on the waterfront than we did. It was clear to us that Peter Reith’s office knew a great deal more than the ACCC about this particular dispute. However, we were not actually able to confirm our suspicions about Peter Reith’s role, until we read about what had happened in the Waterfront book a few years later.

Second, we realised that we needed a strategy in the future to deal with any MUA conduct which occurred overseas. We needed to know whether the ACCC could take action against the MUA under the TPA for offshore conduct. We also had to work out a strategy as to how to get the evidence to prove such an “offshore” breach.

Third, time was going to be a more significant problem than we had anticipated. This entire dispute had only lasted five days. To collect evidence and launch a case in this time frame was almost impossible unless we took a radically different approach to our investigation and litigation.

Dubai trainees incident

The Dubai dispute was a very strange event. In early December 1997, stories started appearing in the Australian media that a band of former Australian soldiers were being trained in Dubai as part of a plot to take over the Australian waterfront and oust the MUA. As you can imagine, we did not believe these reports when they first appeared as the entire scenario seemed much too farfetched.

From what we could understand at the time, various parties had funded a band of former Australian soldiers to go to Dubai to receive training on the operation of stevedoring equipment. We also understood that these individuals would be returning to Australia once they had received their training to become stevedores. Everyone suspected that Corrigan would end up employing these individuals.

On becoming aware of this latest plan, the MUA immediately moved offshore. The MUA effectively sought to put pressure on the Dubai government to prevent these individuals from getting training in Dubai. It was also reported that the MUA had involved the head of the ITF, Mr David Cockcroft in its discussions with the Dubai government.

In mid-December 1997, the ACCC heard that the Dubai government had withdrawn the visas for these individuals so that they had to leave the without getting any stevedoring training.

The ACCC’s Waterfront team did not really know what to make of this entire event. One thing we did know at the time was that the MUA’s activities in Dubai did not contravene the TPA. The MUA and ITF had pressured the Dubai government to cancel these individuals’ visas so they could not receive training in Dubai. This conduct did not breach either section 45D or 45DB of the TPA.

Accordingly, the ACCC never wrote a letter to the MUA about this particular incident. However, we again learnt a number of valuable lessons from having been a passive witness to these strange events.

First, we understood that the MUA was likely to call on the ITF in any dispute. This was a significant development, as it suggested to us that the MUA might be able to protect itself from the TPA by seeking to mobilise overseas groups to act on its behalf.

Second, I remember being very impressed by way the MUA had dealt with this issue. Not only had they moved with lightening speed but they had also been able to identify and exploit the weakest spot in the strategy being employed against them. The MUA immediately saw that their best approach was to target the Dubai government and put maximum pressure on them to stay out of the dispute.

Finally, we now focused a great deal of our research on finding out more about the ITF. We discovered that the ITF was an international trade union body which represented the interests of a large number of local trade union organisations in the transport area. One of its most active members was the MUA.

The aims of the ITW were set out in its Constitution as follows:
  • to promote respect for trade union and human rights worldwide
  • to work for peace based on social justice and economic progress
  • to help its affiliated unions defend the interests of their members
  • to provide research and information services to its affiliates
  • to provide general assistance to transport workers in difficulty
However, another significant activity of the ITF was to coordinate “protest messages, demonstrations and political pressure, to direct industrial action in the form of strikes, boycotts etc” in relation to local labour disputes.

After looking into the ITF organisation in more detail at a later stage we were able to establish that it had structured itself in such a way that it would be effectively immune from liability to pay penalties or damages in the event it was sued for breaching or facilitating a breach of boycott laws.

Having said this we were also able to establish that the ITF’s power was derived entirely from the power of its local union affiliates in their home countries. For example, the ITF had a great deal of power in Australia because the MUA had a great deal of power here. The only other place where it appeared that the ITF had considerable industrial power on the waterfront was on the West Coast of United States due to the industrial power of the International Longshore and Warehouse Union (ILWU).

Finally, we came to the clear realisation that nobody was keeping the ACCC in the loop on developments. We were not being told anything by the Department of Workplace Relations about what was going on, nor was Chris Corrigan providing us with any information. The irony was that when we went to interview potential witnesses, they seemed to think we knew all the details of the broader “plan” and that we were a part of this “plan”.

In hindsight, it was much better that we did not know about the broader “plan”. While it was quite embarrassing to be regularly unaware of the behind-the-scenes machinations of the Government and Corrigan, the ACCC would have been placed in a very difficult position had it know about this plan. In fact, the MUA would have probably joined the ACCC in its conspiracy action against Corrigan and the Howard Government had we actually been in the loop.

Webb Dock handover

The third and final event relates to the decision by Patrick in January 1998 to lease Webb Dock No 5 in Melbourne to a new company called Producers and Consumers Stevedores (PCS). Like the Dubai fiasco, details of this plan were again leaked to the MUA and the media before the actual handover of the site had been carried out.

When details emerged about PCS, it became apparent that it had been set up by the National Farmers Federation and Don McGauchie. Also, included in its ranks were a number of the individuals who had been part of the failed Dubai training exercise.

After looking into the matter, the Waterfront team formed the view that the PCS operation appeared to be little more than a training operation. In other words, PCS was planning to train various non-MUA individuals to be stevedores. We fully expected that the MUA would be focusing on preventing these individuals from getting employment as stevedores after they have been trained. However, for the moment it appeared that the MUA intended to maintain only a watching brief.

It also seemed to us that the MUA were desperately trying not to engage in any conduct which may constitute a boycott. Even though the MUA did have a picket line at Webb Dock, it did not actually prevent the passage of individuals or vehicles onto the premises, although some buses got pretty smashed up on the occasions that they drove through the picket lines. We were satisfied that while there was the occasional stoush between the MUA and the PCS employees as vehicles went through the picket line, that generally the MUA were doing their best to avoid engaging in an illegal boycott.

Office of Employment Advocate

The final issue which is relevant to understanding subsequent events relates to the anticipated role of the Office of the Employment Advocate (OEA).

The OEA was set up by Peter Reith in 1997 to enforce the Workplace Relations Act 1997 (WRA). The OEA had jurisdiction to enforce a range of the provisions of the WRA, including the Freedom of Association provisions. These provisions made it an offence for an employer to dismiss an employee because he or she was, or was not, a member of a union.

I remember attending a talk given by Peter Reith prior to the Waterfront Dispute (we were given some free tickets). In his talk, Mr Reith made no secret of the fact that something had to change on the waterfront. He also made it abundantly clear that any attempt by the MUA to prevent such a change would most likely lead to the union having problems under the Freedom of Association provisions of the WRA. In other words, if the MUA tried to take action to prevent somebody using non-MUA union labour on the wharves, the OEA's role was to ensure that that didn't happen. Furthermore, he made it clear that the Commonwealth Government agency which would be keeping the MUA on the straight and narrow would be the OEA. I do not recall Reith referring to the ACCC once during his talk.

I came away from Reith’s talk with the distinct (and pleasing) impression that it would be the OEA, rather than the ACCC, who would be at the forefront of any action against the MUA in what seemed to be the inevitable dispute. I also got the strong impression that the ACCC was not seen by the government as the agency which was feted to take the lead role in any action against the MUA. This probably explained why the ACCC seemed to know so little about what was going on in relation to Cairns, Dubai and Webb Dock.

I was very relieved after hearing Reith’s speech. While I did not like some of the MUA’s conduct, particularly hold cleaning, I empathized with other MUA campaigns such as their campaign against flags of convenience vessels. I had also seen enough of the MUA in action to respect their skills in dealing with disputes and to acknowledge their consummate ability to play the media. While the MUA was not the largest union, it seemed to me to be the smartest and most disciplined union, with a very strong leader in John Coombs.

However, I was also not entirely convinced that the OEA, as such a new agency, would be up to the challenge of “taking on” the MUA. This is precisely what happened when the dispute broke out - the OEA immediately jumped ship, leaving the enforcement field entirely to the ACCC.

Sunday, 13 November 2011

The Untold Story: The ACCC’s role in the Waterfront Dispute - Part 2 - Hold Cleaning

Part 2: Hold Cleaning


The practice of cleaning out the holds of vessels had been around for a very long time. The practice started in Sydney’s Balmain in 1900 with the establishment of the Balmain Labourers Union whose members were engaged primarily in painting, cleaning, docking and undocking of vessels.

In 1916, the Balmain Labourers became the Federated Ship Painters and Dockers Union (Painters and Dockers).

The Painters and Dockers came to prominence in 1980 when it became the subject of the Royal Commission on the Activities of the Federated Ship Painters and Dockers Union, better known as the Costigan Royal Commission.

In the course of the Royal Commission, the Royal Commissioner Mr Frank Costigan, concluded that the Painters and Dockers union was in actual fact an organised criminal organisation.

Mr Costigan summarised the activities of the Painter and Dockers in the following way in his Report:
I became satisfied that the union, at least in Victoria, Newcastle, Queensland and South Australia (if not in Sydney as well), was an organised criminal group following criminal pursuits. At least in Victoria, those in charge of the union recruit exclusively those who have serious criminal convictions. The union gives active assistance to those criminals, be it in the selection of criminal activity, or in harbouring and protecting the criminals from the consequences of their crimes.

The criminal activities of the members of the union were not restricted to any particular sphere of crime. In my reports, I referred to crimes of violence, theft, extortion, intimidation, fraud, illegal gambling and trafficking in drugs. There was evidence of wide-scale racketeering, loan sharking and active participation in organised prostitution. I doubt whether there were any forms of criminal activity in which there was not some active participation. In this respect, the union presented no different picture to that found on the eastern seaboard of the United States of America, where longshoreman were found to be engaging in similar widespread criminality.
The Painters and Dockers were also surprisingly implicated in tax evasion – namely, the aptly named Bottom of the Harbour tax evasion schemes.

The Costigan Royal Commission was probably best known for the Goanna controversy – namely, an unsubstantiated rumour that the late Mr Kerry Packer was involved in a range of criminal activities.

Another practice which the Royal Commission highlighted in its report were the extortionate practices by the Painters and Dockers in relation to the provision of hold cleaning services to ship owners.

Historically, the Painters and Dockers had been the relevant union responsible for cleaning out the holds of a vessel whenever a ship owner required that service. Such cleaning was necessary if, for example, a bulk vessel came to Australia to discharge fertiliser and was proposing to load a different cargo. The risk was the residue from the discharged cargo would contaminate the new cargo. The level of cleaning which was required depended on what the nature of the cargoes; for example, if the second cargo was food, such as grain, the holds would have to be cleaned very thoroughly before loading that cargo.

Shipowners did not have to use the Painters and Dockers to do such work. In fact, many shipowners did not like to hire the Painter and Dockers because they claimed that they were very expensive and did not do the work properly.

To the extent that members of the Painters and Dockers Union simply approached a ship owner and offered to carry out the hold cleaning work, there was obviously no breach of the TPA.

However, the problem arose when the Painters and Dockers Union demanded the work and the vessel owner refused. In these circumstances, the Painters and Dockers would often organise a “picket line” (of sorts) of the vessel to prevent it from sailing from the port until its holds had been cleaned by members of the Painters and Dockers Union.

The way the “picket” was organised was quite novel. Usually a number of unidentified persons, most probably Painters and Dockers union members, would simply turn up at the vessel at the scheduled sailing time and sit on the bollards which held the line tying the vessel to the wharf. The linesmen (who were also members of the Painters and Dockers) would then arrive at the vessel to release the lines. However, when the linesmen arrived at the bollard, they would see the unidentified men sitting on the bollards and refuse to release the line on the basis that to do so would cause a safety issue. The linesmen claimed that if they tried to move the men sitting on the bollards, the men may be injured in some way, for example by falling off the wharf.

After the vessel had missed its scheduled time window to sail from the port, the men who had been sitting on the bollards would simply wander off, only to mysteriously reappear on the next occasion that the vessel would be scheduled to sail.

Such conduct had significant financial consequences for the shipowner and/or the charterer. The costs of delaying a bulk cargo vessel for even one day could be as much as $10,000 a day in charter fees alone. The ship owner or charterer would also incur demurrage costs and the costs of the linesmen, towboats, and pilots who had not been able to do their work due to the picket.

This conduct would continue for many days until the shipowner relented and agreed to use the Painters and Dockers for the cleaning work.

In some situations, the Painters and Dockers would demand to clean the holds and receive payment even if cleaning was not even required.

However, the most serious conduct related to cases where the Painters and Dockers either:
  • demanded payment for hold cleaning in situations where the cleaning work had already been completed by another cleaning company or 
  • demanded payment for hold cleaning where the vessel had left Australian waters without being cleaned at all. 
In the latter case, the Painters and Dockers would take reprisal action against the shipowner’s next vessel to Australia to punish the shipowner for not having paid the Painters and Dockers for the hold cleaning work on the earlier occasion.

The Painters and Dockers union was deregistered in 1993. It was deregistered under the Hawke union reforms because it had less than 1000 members and not because it had been found by Costigan to be a criminal organisation. Members of the Painters and Dockers joined either the MUA or the Australian Manufacturing Workers Union.

The ACCC’s Waterfront investigation team was very surprised to discover that this illegal practice, which had been exposed by the Costigan Royal Commission in 1984, was still continuing unabated in 1997 in a number of Australian ports. The practice of either forcing vessel owners to use MUA labour to carry out required or unnecessary hold cleaning work or demanding payment for hold cleaning work already carried by another cleaning company was occurring quite regularly in the bulk cargo ports in Western Australia, South Australia, Newcastle and Port Kembla.

Although some of the allegations from the Costigan Royal Commission about hold cleaning had been referred to various police agencies, including the NSW State Crime Commission, the practice had not been stamped out. What was even more surprising was that some of the particular individuals named during the Costigan Royal Commission were still engaging in the same conduct almost 20 years later.

ACCC’s investigation

The first stage in the ACCC’s investigation of the hold cleaning conduct involved trying to gain the trust of the major bulk shipping companies operating in Australia. We needed their assistance if we were going to obtain the evidence to establish the contraventions. However, the major problem which the ACCC faced was a lack of credibility.

The industry did not have a high opinion of the ACCC as an effective and fearless regulator. The industry was also sceptical that the ACCC could clean up hold cleaning when the Costigan Royal Commission itself had failed to stop the conduct. Accordingly, we spent a great deal of time and effort trying to convince the industry that we were willing and able to stamp out the practice. We did this a number of ways.

First, we sought to present ourselves to the industry as uncompromising, no nonsense investigators who were up to the task of stamping out illegal hold cleaning. This meant we talked very tough with everybody we interviewed, sometimes to the point of being quite belligerent.

By way of example, on one occasion we were interviewing a number of staff from a large European owned shipping company when the Managing Director of the company walked into the interview and started to tell us that the ACCC would never succeed in its hold cleaning case and that we were wasting his staff’s time. I immediately turned to the Managing Director, looked him straight in the eye and said in the most serious sounding voice I could muster that he was wasting our time and that it would be better if he left so we could get on with our investigation. He immediately walked out of the room looking decidedly sheepish.

Incidentally, this company continued to assist us throughout the investigation and provided the ACCC with valuable evidence which we used in our legal proceedings.

We also nonchalantly dismissed the concerns raised by industry participants that there may be a risk of violence if we sought to tackle the hold cleaning issue.

Second, we spent a great deal of time explaining to the industry the way we were proposing to approach our investigation and what outcomes we would be seeking to achieve. One advantage that we had was that section 45DB had recently been introduced into the TPA which made it much easier for us to establish a contravention of the TPA. Providing such detailed explanations to the industry was an important element in winning the industry’s trust. The industry would only trust us if they believed that we knew what we were doing and that we were confident of being successful.

Third, we had to convince the industry we were not part of some broader Howard Government plot to destroy the MUA. We quickly realised that while the industry was quite reluctant to get involved in litigation against the MUA, it was even more reluctant to get involved in the political machinations of the government.

This final issue proved to be the most difficult aspect of the investigation due to the interference of two Howard Government consultants in our investigation. Shortly after we had commenced our investigation, it came to our attention that two individuals were seeking to reinterview the same people we had been interviewing. We soon discovered that these individuals were Dr David Trebeck and Mr Stephen Webster, who had been hired as consultants to the Howard Government to investigate various strategies in relation to the MUA. These individuals had heard about our investigation and were trying to find out more.

We were very concerned that the actions of these individuals would seriously jeopardise our investigation by blurring the fact that the ACCC was an independent statutory body which was enforcing the TPA and not an organisation which was simply doing the government’s bidding.

Industry participants started to ask us whether we were working with “Dr Trebeck and his people.” We were very direct in our response to the industry stating in no uncertain terms (and in the toughest sounding way we could) that:
  • we had nothing to do with “Dr Trebeck and his people”;
  • we did not know what “Dr Trebeck and his people” were doing;
  • we did not appreciate “Dr Trebeck and his people” interfering in our investigation; and
  • “Dr Trebeck and his people” better stay well away from our investigation.
Ultimately, we were successful in gaining the trust of a large part of the industry. Based on our preliminary investigation we were able to issue a number of section 155 notices to ship owners and shipping agencies to obtain information and documents. We then started the chore of reading and analysing thousands of pages of documents about hold cleaning incidents going back over ten years to work out how many potential contraventions of the TPA we may be looking at.

Unfortunately, an unexpected and very significant event occurred which forced us to put our hold cleaning investigation on hold – namely the 1998 Waterfront Dispute.

Despite putting the hold cleaning investigation on the back burner, we were always determined to run this case once things returned to normal. However, it would be one year before we could recommence our hold cleaning investigation and two years before we were able to commence legal proceedings against the MUA for its hold cleaning activities.

Wednesday, 9 November 2011

The Untold Story: The ACCC’s role in the Waterfront Dispute - Part 1 - Beginnings

Part 1: Beginnings


The Waterfront Dispute which erupted in 1998 has been the subject of a book, Waterfront: The Battle that Changed Australia by Helen Trinca and Anne Davies and a mini-series, Bastard Boys. Both the book and the mini-series dealt in considerable detail with the respective roles of the MUA, the ACTU, Patrick Stevedores and the Howard Government in the Waterfront Dispute. However, the role of another significant actor in these events has not been dealt with in any detailed manner – namely, the involvement of the Australian Competition and Consumer Commission (ACCC).

The ACCC played a much more active and important role in the Waterfront Dispute than most people know. The ACCC was heavily involved in the Waterfront Dispute from the very beginning. In this series of articles, I will be discussing the role of the ACCC in the Waterfront Dispute based on my own first hand experience as the ACCC officer in charge of the ACCC’s investigation and litigation on a day to day basis.

I will also be discussing some of the more misguided if not downright foolhardy ideas which the ACCC both contemplated and ended up pursuing during its waterfront investigations. For example, I will outline the foolhardy (and fortunately aborted) plan to drop a number of ACCC officers, including myself, onto the Australian Endeavour via helicopter so that the ACCC could claim that it had safeguarded the passage of the vessel into Port Botany. I will also describe the misguided plan which the ACCC ultimately did pursue – namely, to “embed” two ACCC officers behind the picket lines at Botany Bay at the very height of the dispute.

Setting up the Waterfront Investigation Team

In late 1997, it was apparent that trouble was brewing on the Australian waterfront. News stories were appearing regularly in the newspapers about alleged rorts by the Maritime Union of Australia (MUA). Peter Reith, the then Minister for Workplace Relations, was making inflammatory speeches about the union movement, with particular emphasis on the alleged rorts of the MUA. It was against this background of impending trouble on the waterfront that then CEO of the ACCC decided to establish the ACCC’s own waterfront investigation team. The CEO knew there was going to be trouble and he wanted the ACCC to be prepared.

Unfortunately, it was not very easy for the then CEO find an ACCC staff member to lead this new team. The first two candidates he asked to take on the role turned down the assignment, so the CEO was forced to look for somebody else who would be willing to do the work.

The CEO approached me and my team with a proposal that we become the new Waterfront Investigation Team. This was a surprising decision given that, at that time, my team was in fact the Sydney Mergers and Assets Sales Branch – we were not even part of the enforcement branch.

Our proposed brief was to investigate any conduct in breach of the TPA by any of the major participants on the waterfront, including the various unions, stevedores, towage companies and port authorities.

After considering the CEO’s request and discussing it with my team, we agreed to accept the assignment to head up the new ACCC Waterfront investigation team. At the initial stages, my team was not required to work on waterfront matters exclusively – rather we continued to operate as the Sydney Mergers and Asset Sales Branch whilst also conducting our waterfront investigations. Our part time waterfront investigation role ended in April 1998 when Chris Corrigan sacked his entire MUA workforce.

The main reasons why I believe the ACCC’s Sydney Mergers and Asset Sales team were well placed to head up the ACCC’s waterfront investigations was because of our particular skill set.

First, it became apparent that unions often engaged in quick, strategic and opportunistic boycotts of various businesses to achieve their goals. Accordingly, any investigation team charged with investigating such conduct would have to be able to prepare a case very rapidly. Indeed, in most instances, the ACCC would be seeking urgent interlocutory injunctions to try to stop a particular union from engaging in such conduct in the short term. The ACCC’s mergers branch had more experience than the enforcement branch in terms of being able to both conduct investigations rapidly and to prepare litigation in very short time frames. The mergers branch also had more experience than enforcement in preparing urgent interlocutory proceedings.

Second, it was likely that any illegal conduct by non-union industry players, such as the stevedoring companies, towage operators or port authorities, would raise issues under the competition provisions of the TPA. Therefore, the team tasked with investigating such conduct needed to have the skills to be able to analyse and define relevant markets and obtain market evidence.

It became apparent to the Waterfront Team almost immediately that the entire competitive structure of the waterfront had major problems. The ports, which were generally owned and operated by state governments, were in most cases natural monopolies. Add to this the fact that there were only two major stevedores (Patrick Stevedores and P&O), a monopoly supplier of towage services in most ports (Adsteam), a monopoly supplier of labour (MUA) and state sanctioned cartels for liner shipping companies (Part X of the TPA), and it was quite clear to us that the whole industry needed a complete overhaul.

Almost immediately after my team became the Waterfront Investigation Team, it was inundated with complaints about the MUA. The vast majority of these complaints were given to the ACCC by representatives of Peter Reith’s Department – the Department of Workplace Relations. Later on in our role we received complaints about other industry players, such as port corporations and the two major stevedores, which we also investigated.

The complaints we received from Workplace Relations about the MUA, related to such varied issues as:
  • the MUA’s conduct in relation to off shore oil rigs;
  • the MUA’s alleged actions in seeking to prevent the granting of coastal vessel permits;
  • the conduct of cruise line baggage handlers, and
  • concerns about the way that seaman’s engagement system operated. 
The main provisions that we had reference to in assessing these complaints were sections 45D and 45DB, which provided:

Section 45D
(1) In the circumstances specified in subsection (3) or (4), a person must not, in concert with a second person, engage in conduct:
(a) that hinders or prevents:
(i) a third person supplying goods or services to a fourth person (who is not an employer of the first person or the second person); or
(ii) a third person acquiring goods or services from a fourth person (who is not an employer of the first person or the second person); and
(b) that is engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the business of the fourth person.
Section 45DB
(1) A person must not, in concert with another person, engage in conduct for the purpose, and having or likely to have the effect, of preventing or substantially hindering a third person (who is not an employer of the first person) from engaging in trade or commerce involving the movement of goods between Australia and places outside Australia.
Section 45D was the traditional provision used to combat secondary boycotts. This section was designed to prevent unions from engaging in sympathy strikes – ie one union taking action against a business to assist another union in an employment related dispute with that business.

We quickly discovered that section 45D was very complicated and very difficult to apply in practice. Accordingly, we decided to focus our attention on section 45DB. This provision only required two persons to act in concert for the purpose or with the effect of preventing or hindering a third person from engaging in international trade. Therefore, any act by two persons to prevent the loading or unloading of a vessel which had come from overseas or was headed overseas would constitute a breach of section 45DB, subject to the ACCC being able to prove purpose or effect.

Most of the complaints which we received from Workplace Relations did not raise any issues under the TPA. Indeed, the issues were simply industrial disputes between the MUA and their employers which involved no boycotts at all.

The ACCC also declined to pursue some of the other matters referred to it by Workplace Relations because we believed that there were strong public interest arguments in support of the MUA’s conduct. For example, the MUA had been involved in a long running campaign against “flag of convenience” vessels. The MUA would often boycott these vessels because the owners were paying their employees very low wages and requiring them to work in appalling conditions.

While the MUA’s conduct against such vessels (which usually involved picketing the vessel so that it was unable to sail until the shipowner agreed to pay their workers higher wages, including back wages) was likely to constitute a breach of section 45DB of the TPA, we were very reluctant to take enforcement action. The ACCC did not want to be effectively protecting businesses which appeared to be engaging in exploitative labour practices in relation to workers from developing countries.

Unfortunately, Workplace Relations did not take very kindly to our decision to decline to pursue a large number of their complaints.

However, amongst all the complaints received by the ACCC from various sources, there was one particular complaint which stood out from all the rest. This conduct appeared to the team to constitute not only a clear breach of the TPA but highly reprehensible conduct – namely, the practice of demanding money from ship owners for hold cleaning. Accordingly, the Waterfront Team decided to make the practice of hold cleaning the focus of its first major waterfront investigation.