New Victoria criminal reporting rules ramp up pressure on contractors, warn experts

The Victorian government’s new policy on reporting criminal and unlawful conduct on public construction projects completes its transition period on 30 June, having been brought into effect at the start of the year.

The rules introduce mandatory reporting obligations on new public projects, and on existing projects not completed by the end of 2025 – with non-compliance with the new requirements potentially resulting in increased oversight, corrective action, removal from pre‑qualification schemes, and potential contract termination.

But James Morgan-Payler, a projects and infrastructure expert with Pinsent Masons in Melbourne, warned that the new requirements would materially shift risk management expectations for contractors undertaking work in Victoria.

“The most significant change is not simply the requirement to report criminal or unlawful conduct, but the breadth of conduct captured and the absence of a clear reporting threshold,” he added.

“Clients are now required to make judgment calls, likely based on incomplete or contested information, with potentially serious contractual and procurement consequences if they get it wrong.”

Under the new rules, state agencies, head contractors and subcontractors are required to take all reasonable steps to make sure public construction projects are inclusive, free from unlawful conduct, and comply with criminal and civil laws, including health and safety and workplace relations requirements.

The policy puts a requirement on them to proactively report allegations criminal or unlawful conduct to Workforce Inspectorate Victoria (WIV) with supporting evidence where possible.

For projects valued at less than A$20 million, there are fewer mandatory requirements, but they will still be required to report criminal conduct and cooperate with WIV.

Ben McKinley, an employment law expert with Pinsent Masons in Melbourne, said the new rules would mean a significant increase in exposure to contractors.

“From an organisational perspective, this elevates reporting and governance from an operational issue to an executive‑level risk,” he explained.

“Head contractors, in particular, face increased exposure through subcontractor compliance obligations and the need to balance timely reporting with privacy, confidentiality and procedural fairness.”

“Those who come within the scope of the policy should move quickly to tighten internal escalation protocols, clarify decision‑making authority, and ensure contractual and governance frameworks are fit for purpose.”

“Proactive preparation will be critical to managing compliance risk, protecting reputation, and maintaining eligibility for future public sector work.”