Cheap Chinese workers have been exploited to build the new Royal Children's Hospital and the Docklands headquarters of Medibank Private, which have received more than $1.4billion in government and union superannuation funding.
THE AGE, 16 March 2014
Both projects have also engaged a rogue subcontractor who has failed to pay millions of dollars in tax after collapsing four times in the past five years.
Two of Australia's largest construction firms, Brookfield Multiplex and Bovis Lend Lease, are implicated in the scandal and appear to have flouted contractual obligations and enterprise bargaining agreements on the sites.
The Victorian Government appointed Bovis Lend Lease to build the $1 billion publicly funded Royal Children's Hospital, while construction superannuation fund Cbus has financed the $400 million Docklands headquarters of government-backed insurer Medibank.
Fairfax Media can reveal that both building companies have used low-paid Chinese workers provided by one of Victoria's largest plastering subcontractors, Expoconti, and another firm, BVM. Brookfield Multiplex is believed to be under investigation by Fair Work Building and Construction, which has interviewed several senior managers.
Building industry sources have provided details of an elaborate rort involving ''job sharing'', where Chinese plasterers swap documentation to enter sites and receive half the award rate of $35. One source referred to it as a ''two-for-one deal''. Other Chinese workers are required to work more than 60 hours a week, but receive payment for a standard 36-hour week.
Serious concerns have also been raised about how a subcontracting business that has failed four times in five years is repeatedly given government and corporate jobs despite stringent probity guidelines. Since 2009, a string of companies owned and operated by the family owned BVM group have collapsed with debts of more than $4.8million, most of which is owed to the Australian Taxation Office.
Following the collapses, a new BVM-branded company has stepped in to buy its assets, rehire employees and take over any outstanding contracts, leaving the bad debts behind.
Brookfield Multiplex and Bovis Lend Lease have continued to employ the related companies despite being aware of the collapses and concerns about these activities being raised by the ATO, CFMEU and corporate liquidators.
Fairfax Media understands liquidator RJM is investigating the the most recent insolvency, which saw BVM Building Force collapse last August with debts of more than $1.3million.
''The business was sold as there was no income stream thereafter there was no other choice but to appoint a liquidator,'' director Massimo Carnevale wrote in an email to RJM.
But a new incarnation, BVM Construction Group - run by Mr Carnevale's relative, Maria Diakokolios - continued to hold lucrative contracts at the Royal Children's Hospital and Medibank House.
Ms Diakokolios, who has been a director and/or shareholder in all four failed businesses, initially said no company associated with the family had ever collapsed. ''This is none of your business, champ. You should be covering real news like the plane crash,'' she said.
After claiming she had ''the right to use whoever I want to'', Ms Diakokolios also denied the BVM group had ever hired illegal or undocumented labourers. ''I have a contract with the RCH and I have been abiding by that contract,'' she said.
Nick Lee, director of Expoconti, also denied providing illegal workers on the Royal Children's Hospital site.
A spokesman for Health Minister David Davis said the government had received no information that Lend Lease had breached its contractual or legal obligations and noted the deal had been signed by the previous Labor government. ''If the contract signed by [former health minister] Daniel Andrews was deficient, that is a matter the government is prepared to investigate,'' he said.
Brookfield Multiplex declined to answer a series of questions about its commercial relationship with BVM, allegations that illegal labour has been employed on the CBus project and what measures, if any, the company had taken to halt or prevent the practice.
''We would be concerned if there were illegal workers on any sites. Brookfield Multiplex has a risk management process for selection of all subcontractors,'' a Brookfield Multiplex spokesman said in response.
Bovis Lend Lease has denied the allegations it had employed illegal labour. ''Lend Lease is not aware of any such behaviour by any of its subcontractors,'' a spokeswoman said. The group has declined to comment on its relationship with BVM, citing ''commercial-in-confidence'' rules.
Fairfax Media recently revealed that organised crime gangs have been supplying local subcontractors with Chinese labourers, who often enter Australia on student, spouse or 457 visas and have no plastering experience. Illegal Afghan workers employed as tilers are also being exploited on commercial building sites.
CFMEU national construction secretary Dave Noonan confirmed he was aware of widespread exploitation of Chinese plasterers in the Victorian construction industry. ''The CFMEU has encountered numerous instances of Chinese plasterers, both lawful and unlawful, being employed by unscrupulous employers taking advantage of the workers' visa status, lack of knowledge of their rights, their pay and conditions,'' he said.
But several industry insiders have accused the union of ignoring the practice on several big commercial projects in the CBD.
''The subcontractors usually pay the union fees on behalf of the Chinese [workers], and the [CMFEU] shop stewards can't figure out who's who [on site]. It's been going on for years,'' a CMFEU source said.
The Association of Wall and Ceiling Industries has called on the state to introduce a licensing and registration system for plasterers.
The AWCI spoke recently with a software company, iProLive specialising in document verification.
According to an iProLive spokesman, the software was tested on a large building firm appointed to build a $6 billion dollar project.
''[In] a trial of 50 contractors, 48 of these contractors failed the compliance due to them not having any licence, licences were fraudulent, they used other people's licences or didn't have insurance,'' he said.