NBN’s major delivery partners have defended working with subcontractors, saying that this works well in the main. They also claimed that the allegations of dodgy practices are the exception and not the norm.

Recently, the CEPU made allegations that subcontractors were winning work through the offer of kickbacks, including cash, cigarettes, and cocaine, to name a few. In addition, there are instances wherein prime subcontractors exploit end-workers as they deduct 40% from their pay as a commission. 

Nevertheless, the NBN major partners reaffirmed to the senators that their contracting practices are compliant with the law.

According to Downer: “A majority of construction and service partners engaged by Downer have continued an operating model established for earlier packages of work on other projects in the industry. Downer does not engage any sole traders to perform work on its NBN contracts. Downer only enters into services contracts with legitimate, independent businesses.”

In addition to this, it is also stated in the submission that: “Downer requires its construction and service partners to submit evidence (either in the form of a warranty at the time progress claims are made, or by a monthly statutory declaration) that all employee entitlements (including superannuation) have been paid in accordance with applicable industrial instruments and that the business has complied with all payroll tax and workers compensation obligations as well as carrying the necessary insurances to cover their business and employees.”

Ventia expressed similar sentiments. Telecom group executive, Tim Harwood, said: “We ensure our subcontractor resource base is paid in accordance with the agreed commercial subcontracts and processes. These are at least in line with the Security of Payment legislative requirements on a state-by-state basis. Any secondary subcontractors may seek support from Ventia to redress a situation if they are not getting paid by their primary contractor. Ventia pays its contractors regardless of liquidity flow from its own contracts with our head clients, such as NBN Co.”

Neil Barnes, the Ventia general manager for network operations and assurance for NBN, confirmed that Ventia had “parted company” with one of its primes. This was after a union

said that payments weren’t flowing through to contractors. “As an outcome of that, we ensured that those secondary subcontractors were paid...and we picked up a number of those contractors direct.”