Victorian Premier Jacinta Allan called for immediate suspension of the Forestry, Maritime, Mining and Energy Union (CFMEU) construction division.
The decision was made after reports from Nine newspapers that alleged underworld figures and bikie gang members had infiltrated major construction projects.
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Ms Allan has referred these serious allegations to Victoria Police and the Independent Broad-based Anti-corruption Commission (IBAC).
“This is a rotten culture that must be pulled out by its roots,” Ms Allan said.
“Anyone who has any association with any criminal behaviour, they shouldn’t be there in the first place,” she said.
On Monday, IBAC confirmed they had received the referral and would assess the complaint by the Independent Broad-based Anti-corruption Act 2011 to determine the next steps.
CFMEU national secretary Zach Smith responded by announcing that the Victorian branch would be placed into administration, with the national office assuming senior executive powers.
An independent investigation led by a prominent legal figure will be established to probe the allegations.
“The CFMEU has zero tolerance for criminality,” Mr Smith said.
“People are entitled to procedural fairness … I can’t, and I won’t, just hang people on mere media speculation alone.”
Australian Council of Trade Unions (ACTU) secretary Sally McManus expressed shock and horror at the allegations.
She called for those subject to criminal allegations to be stood down during investigations but did not support the deregistration of the union.
The Victorian government has also confirmed the matter has been referred to Victoria Police.
CFMEU Victorian branch secretary John Setka resigned on Friday before the reports were published by Nine, claiming he had been targeted by “ongoing false allegations” that led to “malicious attacks” on the organisation.
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