Drugs allegedly offered to managers of NBN delivery partners as kickbacks for work, inquiry told

<span>Photograph: Mick Tsikas/AAP</span>
Photograph: Mick Tsikas/AAP

The managers of companies contracted to build Australia’s national broadband network were allegedly offered illicit drugs and other kickbacks in exchange for jobs, a committee reviewing job security has heard.

The Communications, Electrical and Plumbing Union national secretary, Shane Murphy, told the committee he had been told tobacco and cocaine were offered as incentives to award NBN work to particular subcontractors, who he did not identify.

“I’ve passed this on, I’ve told the individuals it is a matter for the police,” he said on Tuesday.

Related: Telstra, Optus and TPG accused of charging for download speeds NBN could not provide

Murphy said he had grave concerns about the way work was being allocated.

“A project that was to be a source of pride has developed to hide a sinister underbelly of mistreatment and malfeasance that should be a source of shame,” he said.

NBN Co’s chief operating officer Kathrine Dyer told the inquiry that it did not sound like a good environment for subcontractors.

“If an illegal matter was raised with NBN, we would investigate that fully. We do also have a whistleblower programme, which is comprehensive and run by an external body, and if there was evidence that was brought up in relation to a matter like that we would investigate it fully.”

Subcontractors who work on the NBN have previously raised concerns about poor pay and conditions, leading to an extra $75 per job payment and a KPMG audit of subcontractor payments on NBN’s behalf.

The CEPU told the committee that in the past few years, the subcontracting market for the NBN had been flooded with inexperienced technicians, with some jobs even being advertised on sites such as Gumtree.

Murphy also alleged other workers from non-English-speaking backgrounds were being exploited by contractors.

“NBN Co has effectively outsourced the backbone of its workforce – the installation, repair technicians – which has allowed a series of companies to game the system and profit from a taxpayer-funded project,” he said.

“NBN Co management has completely failed to put in place any system to take accountability for its workforce or practices.”

Murphy said what was a living wage when the NBN first launched had not kept up with current living standards.

NBN Co&#x002019;s chief operating officer Kathrine Dyer spoke to the inquiry on Tuesday.
NBN Co’s chief operating officer Kathrine Dyer spoke to the inquiry on Tuesday. Photograph: Mike Bowers/The Guardian

One NBN subcontractor, Mohammed Yehia, told the committee they get anywhere up to three jobs a day, with the market being flooded with inexperienced and unqualified technicians.

“The point of flooding the industry with fresh technicians not qualified reflects on the quality of the internet customers get, and from my personal observation I see, NBN does not care about this internet quality to the end user. They just care about the [new connections] numbers.”

One subcontractor said, depending on the number of jobs in a day, the pay could be as low as $148 per day, excluding costs such as fuel.

“There is no collective bargaining,” Murphy said. “There is no protections for these people. They roll up every morning not knowing how much, how many jobs they’ve got, if they’re going to get any work or any work at all, or where they work … whether they’re going to make a living or not.

One NBN contractor, BSA, told the inquiry its technicians wanted to work as subcontractors, and it was a competitive industry, meaning rates of pay were higher.

BSA’s managing director Tim Harris told the inquiry that while the company paid per job, the rate of pay on average would be about double the award with an average of four to five jobs completed per day.

Related: NBN forced to replace almost 50,000 broadband devices damaged by lightning

“We will actively encourage the technicians to embrace doing other things with their business, that’s part of the model. Working for other delivery partners on the program as well as obviously balancing their personal lives and other things that they may have,” he said.

BSA was not the subject of any allegations at the inquiry.

NBN Co’s chief executive Stephen Rue told the committee the company was working on improvements to its scheduling system to give subcontractors enough work in the day and to better allocate jobs based on travel time, but said it was a “complex environment”.

“On a daily basis we need skills like traffic control, safety inspections, drillers, trench diggers, fibre splicers, cable haulers, copper mediation and machinery, operators and excavation crew. Many of these skills are in high demand, and are transferable across sectors.

“The competition is healthy for the contracting ecosystem.”

The KPMG report to NBN on subcontractor pay has been drafted, but NBN did not commit to releasing the report publicly.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting