Kiwi isn't in the states, so I don't think OSHA has much bearing on his problem (although it is a good rule). I think his main problem is the site supervisor, and who's paying his wages. If your working directly for him, or he is the general contractors representitive, and he decides its a suspended load, then you better treat it as such, or find somewhere else to put your crane.
If the boom really is a suspended load, and you carry it to the extreme, then yes, everything in your entire swing radius would have to be evacuated, and I don't think they want to pay all the other nearby buildings occupants to leave, while you're building your building.
It becomes a touchy subject, and how far you want to push things. If you don't mind the antagonism, and want to push it, make him put his opinions on paper, in a set of written rules for you, then follow them. Sometimes bullies back off, because they don't want anything pointed towards them, or responsibility. They just want to be able to say "I told you so" afterwards.
About the time you put danger tape up around your entire swing radius, and demand that no one enter that area, because the crane might fall on them, then sometimes sanity enters the picture. The crane is held up by steel pins and hydro oil, so yes it can fall. You could say the same of the building, its just steel and bolts, and maybe they shouldn't be inside a uncompleted building either, because it might fall.
I have, many times, lifted loads over buildings that are occupied by people. Its not feasable to ask everyone to leave the sheriffs department building, or the local hospital, while I put a new hvac unit on the roof. Department stores, grocery stores and gas stations, all stay open while I'm working there. In a downtown setting, they don't evacuate a 15 story office building full of insurance workers, while they're working on the roof, its just not economically feasable to tell all those people to stay home for the day. That's reality, not some pie in the sky perfect world.
HVAC unit, 4' in the air, and I was in a hurry to get it set and get to the next job, and the worker on the ground couldn't get the shipping/ boards strapping out from under the unit. I hopped out of the crane, walked over, got under it and pulled out the boards. He looked at me in horror "THAT UNIT could FALL on you!" my reply-- "if I really thought that unit could fall, it wouldn't leave the ground". I'm all about safety, and I'm glad people are more concerned than they used to be about such things. Can a suspended item fall? yes, Is it likely? no. Do I have some death wish? no. But we do have a job to do.
I'm kind of a pain with lift plans. Some big general contractors (I'm sure its their ins. companys, or "saftey" providers idea), have started to require them for all lifts. I have my own version of a lift plan, but some make me use their own "version". One contractor has a 70% rule, anything over 70% of capacity becomes a "critical pick" and means more paperwork. I like to pull their chain a little, because the one supervisor is difficult, so I raised a fuss about what 70% is, before I would calculate the plan. Is it 70% of capacity of the crane, or 70% of the chart #? (which is already 85% of capacity). You want to make a saftey man get a deer in the headlights look, tell him HE has to decide which # it is, because they are totally different figures (it can be 70% of 100%, or 70% of 85%). He doesn't have any idea, just that he needs the paperwork filled out to put in his drawer, and check the box that he did his job today.