Pink batts scheme 'poorly planned, implemented': commission

By Jason Whittaker

September 1, 2014

The department responsible for the rollout of the home insulation program was ill-equipped to manage the process, the royal commission examining the scheme has found. And public servants who were advised of the risk of injury and death neglected to act.

Ian Hanger’s final report into Labor’s “poorly planned and poorly implemented” economic stimulus program is damning of both government and the bureaucracy. It’s also critical of the lack of co-operation from the Commonwealth in providing evidence to the royal commission — with a few exceptions among exemplary public servants.

The report, tabled in Parliament this morning, says the government relaxed health and safety regulations and allowed the use of dangerous foil sheeting in the program, which resulted in the deaths of four installers in 2009 and 2010. Hanger says there was an “inherent” conflict in ramping up the installation of pink batts 15-fold in an effort to stimulate the economy, and the government failed to manage the risk to installers.

He is highly critical of the speed of the decision-making, with a “practically unachievable commencement date … unrealistically adhered to”. Workers were exposed to an “unacceptably high risk of injury or death”:

“It ought to have been obvious, to any competent administration, that such an exponential increase in work to be undertaken would require a similarly huge increase in the workforce to do it …

“It ought also to have been obvious to any competent administration that the injection of a large amount of money into an industry that was largely ‘unregulated’ would carry with it the risk of rorting and other unscrupulous behaviour.”

Hanger found seven “significant failings” in the design and implementation of the program:

  • An “inevitable and predictable conflict or tension” between the independent aims of installing insulation and stimulating the economy;
  • The Department of the Environment, Water, Heritage and the Arts, which was allocated the program, was “ill-equipped to deal with a program of its size and complexity”;
  • A “failure” by the government to identify and manage the risk to installers of injury and death;
  • Using reflective foil sheeting was “manifestly unsuitable and dangerous”;
  • Relaxing training and competency requirements in favour of “supervision” of insulation-specific training “without the nature of it ever being specified or clarified”;
  • Commencing a phase 2 without a “robust audit and compliance regime”, and;
  • Relying on states, territories and employers to “regulate, monitor, police and enforce” occupational health and safety arrangements.

The report says the government knew regulations were lax in the industry and chose it as a result:

“It was observed, by more than one witness who gave evidence before me, that the insulation industry was chosen as being suitable for the HIP, as a stimulus measure, because it was largely ‘unregulated’ and therefore businesses could move quickly into the industry. With the exception of South Australia, which had a licensing regime for insulation installers, there was no insulation-industry specific regulation beyond the generally applicable occupational health and safety regulation. There was a desire by some of those making decisions under the HIP to keep barriers to entry low. That viewpoint serves as an illustration of the preference given to the stimulus nature of the policy over factors such as safety.”

Three installers — Matthew Fuller, Rueben Barnes and Marcus Wilson — died in late 2009, while a fourth — Mitchell Sweeney — was killed on the job in February 2010. Hanger wrote:

“In my view each death would, and should, not have occurred had the HIP been properly designed and implemented. The decision to permit the use of reflective foil sheeting as ceiling insulation was, in my view, fundamentally flawed. It directly contributed to the deaths of Mr Fuller and Mr Sweeney.

“Further, despite knowing that installers were installing reflective foil sheeting across ceiling joists — and attaching it with metal staples — well prior to 14 October 2009, nothing was done to stop that practice.”

Public sector workings exposed

The report exposes the work in government and the public sector to establish the scheme from late 2008, from an early “taskings” document from the Department of Prime Minister and Cabinet to a direction from then-PM Kevin Rudd to the office of then-environment minister Peter Garrett for a “big idea on energy efficiency policy” which was then conveyed to the department.

The report notes development of the program occurred “mainly” in PM&C, which co-opted officers from other departments. Requests made of those officers — specifically Environment Department assistant secretary Mary Wiley-Smith and Beth Brunoro, a former director in the Home Energy Branch — allowed them:

“… little time properly to consider a proposal of this magnitude focused, for the first time, solely upon insulation. They worked hard to meet the tight deadline. Necessarily, their assessment of the risks attending the proposal in particular, could not have been fulsome.”

Of Kevin Keefe, who was given responsibility for the program in February 2009, the commissioner noted he “did not have any particular experience with insulation, but nor did his superiors, or those working for him”.

Crucially, Hanger says Brunoro, Keefe and other members of the department were advised of the serious risk posed by installing reflective foil but “did nothing to further investigate it. They should have done so.”

Hanger also notes that while there were a great many ministers involved, three on a single program, there was also competing overlap in the departments. That is perhaps explanatory of some of what went wrong,” he wrote.

Public servants involved in the program were independently represented during public hearings and interviews. Hanger notes the Commonwealth, which was granted leave to appear on each term of reference, did:

“… not challenge or even test any of the evidence of current public servants, and often took objections to evidence (which the witness’ own counsel did not) that gave the appearance of trying to protect, as best it could, those public servants. This can be contrasted with the approach that the Commonwealth took to those witnesses from ‘outside’ who criticised Commonwealth public servants or the Commonwealth more generally — they were subjected to a much more robust examination.

“I query whether, in future commissions of inquiry, a body politic such as the Commonwealth, which does not represent any of the witnesses being called, ought to be afforded the privilege of being granted leave to appear. The Commonwealth did not suggest one witness that ought to be called. It did not generally volunteer documents that were not the subject of a summons to produce. It did not elicit any evidence of its own volition. All of this is despite the fact that it was the repository of the critical documents and the corporate knowledge of what had transpired.”

Robyn Kruk became secretary of DEWHA in March 2009, but had no involvement in the development of the program, Hanger says. Nonetheless, she inherited the demanding program and tasked the department with adapting to implementing it in the timeframes set by others before her commencement in the role. Hanger says Kruk was forthcoming to the commission, “without hesitation or any sense of defensiveness”.

But Hanger says the Commonwealth “hampered” the commission in the way documents were produced, “piecemeal and haphazardly in 147 separate tranches”. Towards the end of the inquiry, a drive with over 1 terabyte of data (over 100,000 documents) was provided by the Department of Industry, which was the repository of documents for the Department of Environment:

“First, one might ask how 100,000 documents could fall outside of an established filing system. Secondly, one might ask why these documents were not produced much earlier …”

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