THE Department of Immigration is investigating claims that hundreds of Chinese workers on a massive iron ore project in Western Australia are being paid half what Australian workers on the site earn.



The Chinese workers on the Sino Iron project in the Pilbara are believed to be getting $70,000 to $80,000 for jobs for which Australian workers would be paid about $150,000.



It is the first investigation by the department into alleged underpayment at the site — despite repeated assurances by Canberra since September 2010 that any attempt to underpay foreign workers on the $5.4 billion project would be stamped out immediately.



Fury is growing in unions and the Labor Party over the approval on Friday by the Gillard government for 1700 foreign workers to be brought in to work on Gina Rinehart’s $7billion-plus Roy Hill iron ore mine in the Pilbara.



The Sino Iron project, at Cape Preston near Karratha, 1500 kilometres north of Perth, is the largest magnetite mining and processing operation under construction in Australia, and is being built by Hong Kong’s CITIC Pacific.



Department investigators went to the Sino Iron mine two weeks ago, 18 months after the Construction, Forestry, Mining and Energy Union first raised concerns about underpayment of between 250 and 300 Chinese workers.

The Fair Work Ombudsman last year audited the project, following up on the initial claims made by the union in 2010, but did not find any instance of underpayment of workers’ lawful entitlements.

The Sino Iron project in Western Australia. Credit:Rob Homer

Attempts to contact CITIC Pacific last night about the allegations were unsuccessful.



A spokeswoman for the department last night said: ‘‘The department takes any alleged breach of ... 457 sponsorship conditions very seriously.’’



Employers who bring in workers on 457 visas are required by law to pay them the same market rate as Australians. But the union alleges Chinese workers are being brought in as skilled tradespeople, then given labouring work at cheaper rates.



CFMEU national construction division secretary Dave Noonan said if overseas workers were allowed to be brought in en masse for projects like Cape Preston, wages would be driven down and Australians would find it harder to get jobs in the resources sector.



‘‘Already we see a situation where a lot of Australian workers are telling us they are applying for jobs on these projects and don’t even get a call back,’’ Mr Noonan said.



He said the Chinese workers who were brought out under the 457 visa program were meant to be skilled tradesmen, such as boilermakers. ‘‘This is a rort; they are being used as labourers,’’ he said. He said union officials had been unsuccessful in attempts to independently interview Chinese workers on the site.



The mine is on land owned by Queensland businessman Clive Palmer, who leases it to CITIC in return for millions of dollars of royalties once production is further advanced.



Mr Palmer said last night he did not believe the claims by the CFMEU.



‘‘Most certainly they are not working for us — everyone who is working for us is getting top dollar,’’ he said.



‘‘The critical point is whether these people are full-time 457 visa holders, which means they’d be resident here and entitled to be paid award wages.’’

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