The Australian Prudential Regulation Authority implemented stricter licensing requirements on United Super and BUSS (Queensland) on August 14, driven by concerns over board competency, management practices, and fund allocation, amid allegations of corruption and biker gang infiltration within the CFMEU.
United Super, partly owned by the CFMEU, oversees the $92 billion Cbus fund and includes three union-appointed directors. Conversely, BUSSQ, which manages $6.7 billion, is partially owned by CFMEU Queensland and has four of its board members appointed from the union, including three officers.
To ensure compliance, APRA mandated both super funds to engage independent experts to review their operations and provide reports to the regulator before making any changes. However, BUSSQ questioned APRA's authority, escalating the matter to the Federal Court.
In a brief federal hearing, BUSSQ's legal representative, Margaret Allars SC, insisted APRA overstepped its bounds by delegating powers to external experts and utilizing incorrect legal provisions. Allars accused APRA of sidestepping procedural fairness from July 26’s show-cause notice to the final decision on August 14.
Allars also contested the actions of APRA Deputy Chair Margaret Cole, who publicized the stricter measures on APRA's website and newsletter. This move, now part of the case, allegedly impaired BUSSQ’s reputation, leading to an uptick in members wishing to exit the fund or questioning its solidity.
Drawing attention to the ongoing reputational damage and operational prejudice, Allars requested a swift resolution. Amidst the legal dispute, APRA has pledged to temporarily suspend new conditions pending a full hearing, scheduled for October 15 over two days.
Adding complexity, in late August, Attorney-General Mark Dreyfus placed the CFMEU’s construction arm under administration, affecting state branches and dismissing over 200 officials, a move ratified by new federal laws allowing ministerial intervention and life bans on CFMEU officers.
In response to perceived disregard for due process and members' rights, the union contested these laws in the High Court earlier this week. The Financial Standard, serving as the source for this development, reported the ongoing courtroom drama as being highly anticipated.
Overall, the tug-of-war between financial oversight and union operations continues to unfold, shedding light on significant governance and regulatory practices within Australia’s superannuation sector.
