The regulator for workplace safety in New South Wales has been slammed in a damming new report.

And the regulator has been referred to the Independent Commission Against Corruption (ICAC) over its handling of a $1.34 million contact.

Last week, the NSW Audit Office released its final report arising out of its performance audit into the effectiveness of SafeWork NSW in exercising its compliance functions.

The report found that in several respects, the organisation is not able to demonstrate that it is an effective regulator.

In particular, the report found that:

• There is a lack of transparency about SafeWork’s effectiveness as a regulator, with the limited performance information that is available being either subsumed within reporting of the Department of Customer Service (or other sources) and being focused on activity rather than outcomes.
• SafeWork NSW does not have an effective approach to respond to emerging risks in work, health and safety.
• The regulator was slow to respond to the risk of respirable crystalline silica posed by engineering stone products.
• Only 9 percent of administrative response letters which are issued to employers are followed up to ensure these have been received and that the relevant employers have taken action to improve safety outcomes in response to the letters.
• The regulator’s information management system is more than 20 years old and is no longer effective or useful.
• Whilst some effort has been made to ensure that regulatory decisions are consistent, the regulator still needs to ensure a comprehensive approach to quality assurance on an ongoing basis.
• There are significant concerns about the regulator’s engagement of a commercial partner to develop a real-time silica monitoring device, with practices of engagement failing to comply with key procurement obligations (see below).
• Governance process to address important concerns about the accuracy of the aforementioned device were ignored (see below).

Established in 2015 following the abolition of WorkCover NSW, SafeWork NSW sits within the Department of Customer Service and reports to the Minister for Work, Health and Safety.

Its responsibilities include monitoring and enforcing compliance with the Work Health and Safety Act 2011 and the Work Health and Safety Regulation 2017 as well as to provide advice and education on important matters relating to work, health and safety.

Last week’s Audit Office report followed the release of an earlier report on February 22 from a separate inquiry into the regulator that was conducted by former judge Robert McDougall KC.

That report made 46 recommendations to improve: the regulator’s triaging process; management of its Investigation Decision Making Portal; staff training; structure and governance; handling of complaints; and interaction with workers as well as worker representatives and families.

In response, the NSW Government has announced that the regulator will be transformed into a stand-alone regulator.

In its report, the Audit Office raised particular concerns about the award by SafeWork NSW of a contract to UK safety equipment supplier Trolex in 2019.

That contact saw Trolex work as a partner to develop a device that would detect the presence of respirable crystalline silica in workplaces in real time.

Trolex subsequently developed a device known as the Air XS, which sells on the market for around $18,500.

At the time the request for tender was issued in May 2019, the cost of procuring the research partner was estimated at $200,000.

Just three months later in August of that year, the final contract was executed at $1.34 million.

In its investigation, the Audit Office uncovered significant concerns about the development of this device in two areas.

First, there were concerns about both the accuracy of the device and the level of rigour around which it had been tested.

These were raised by technical staff within SafeWork NSW on multiple occasions before and after the product’s launch.

However, they were not shared with executive-level staff including with relevant directors.

In addition, the audit uncovered multiple cases of non-compliance with procurement obligations as well as inadequate record keeping in relation to the procurement of Trolex as a research partner.

These included:

• having an approving delegate also evaluate tender responses
• approval of the engagement of Trolex being granted by the Director, Research and Evaluation despite the amount of the contract ($1.34 million) being well above the Director’s financial delegation to approve
• an evaluation of submitted tenders being provided by a party who had a declared conflict of interest
• a lack of documentation relating to how an objection to the preferred provider was managed
• a scoring report which did not comply with the scoring approach set out in the tender evaluation plan; and
• Safe Work being unable to provide copies important documents including various approvals and a signed tender evaluation report.

In response to these findings, SafeWork NSW has now been referred to the NSW Independent Commission Against Corruption.

(Note: the audit did not examine the activities of Trolex as the commercial partner. No adverse findings nor allegations have been made or are suggested in relation to Trolex or any of its related companies. There is no suggestion that either Trolex or anyone associated with the company acted improperly.)

Beyond the Trolex contract, the Audit Office found that problems existed across several other areas.

First, it raised concerns that SafeWork NSW was too slow to respond to the safety risks that were associated with growing use of engineers stone projects.

According to the report, use of engineered stone in kitchen and bathroom applications had become increasingly common since the early 2000s.

Meanwhile, the heightened degree of health risk from respirable crystalline silica that was associated with this product has been known internationally since at least 2010.

Despite this, SafeWork NSW did not have a substantial program to promote active compliance and awareness of risks in this area until 2018/19.

A further area of potential concern involves a growing trend to assign lower risk ratings to health and safety complaints which the regulator receives under the triage process which is used to manage and prioritise complaints.

Over the ten years from 2013 until 2023, the proportion of complaints that were assessed as being in the ‘High’ risk category (triage category 2) decreased from 29 percent of all complaints which the regulator received to 14 percent of all complaints received.

Over that same period, the portion of complaints that were assessed as being in the ‘Standard’ category (triage category 4) and warranting only a limited response such as a letter increased from 25 percent to 38 percent.

The report noted that the precise reason for the trend toward lower-risk assessments was not clear.

Nevertheless, it noted that over same period, data from Safe Work Australia indicates that there has been an increase in the number of serious workplace injuries that were recorded.

This indicates that reasons for the tendency toward lower category triaging are unlikely to correspond with any reduction in the prevalence of high risk incidents.

Indeed, the report noted that some categories of seemingly serious incidents are increasingly being triaged into lower risk categories.

Between 2013 and 2023, the proportion of complaints relating to falls from height that were assessed as being high risk fell from almost 70 percent in 2013 to less than 40 percent in 2023.

Over that same period, the portion of complaints that related to asbestos that were assessed as high risk fell from almost 80 percent to just over 50 percent.

Finally, the report raised concern about a lack of transparency in terms of the regulator’s reporting of its financial and operational performance.

On this score, the report noted that SafeWork does report activity-based performance information across multiple sources.

However, it does not provide a single collated report which is available in a single source.

At any rate, much of the performance reporting that the regulator does publish relates to activities more so than outcomes.

In response to the findings, the report made ten recommendations.

These included that the Department of Customer Service should (in respect of Safe Work NSW):

• ensure there is an independent investigation into the procurement of the research partner for the real-time silica detector
• embed a formal process to review and set its annual regulatory priorities
• publish a consolidated performance report
• set long-term priorities, including for workforce planning and technology uplift
• improve its use of data, and start work to replace its existing complaints handling system
• review its risk culture and its risk management framework
• review the quality assurance measures that support consistent regulatory decisions.

Darren Greenfield, NSW State Secretary of the Construction, Forestry, Mining and Energy Union (CFMEU), said that the report demonstrated that SafeWork NSW had not been an effective regulator.

“This shocking report confirms exactly what our union has been saying for a decade now – SafeWork NSW is taking an incredibly lazy and hands-off approach to workplace safety,” Greenfield said.

“I don’t think it’s any coincidence at all that SafeWork’s increasingly casual attitude to safety has corresponded with a rise in serious injuries.

“The Auditor General’s report finds SafeWork is basically asleep at the wheel most of the time, with less than 10 per cent of letters (sent to employers in regard to safety complaints) getting a follow up.

“I note that SafeWork NSW took eight years to respond to the emerging risk of silica dust in manufactured stone despite abundant reports about the dangers. It was only our union’s heavy media push that appeared to provide impetus to SafeWork NSW’s regulatory actions.

“The state government needs to put a broom through SafeWork and make sure it starts doing its job.

“In the meantime, our union won’t be taking a backward step when it comes to protecting worker safety on site. Given the regulator has been found to be incompetent, our union has to be extra vigilant on workplace health and safety.”

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