SafeWork NSW has been referred to a corruption watchdog after a scathing auditor's report found it was not an effective work health and safety regulator.
Amid rising serious injuries in the state's workplaces, the regulator has failed to use data strategically to make risk-based decisions or tell the public if it was meeting its intended outcomes, a report by the NSW Auditor-General said.
Further internal issues meant a real-time silica monitoring device was promoted by the regulator, despite substantial concerns about its efficacy and failures to comply with the tender process.
That sparked a referral to NSW Independent Commission Against Corruption (ICAC).
Inhaling silica dust, produced when cutting engineered stone popularly used for kitchen benchtops, can cause fatal lung diseases more quickly than those caused by inhaling friable asbestos.
The bombshell report "shocked" the responsible minister, coming a week after the regulator was lashed for "excessively light touch" investigations by retired Supreme Court judge Robert McDougall QC.
"The audit office report, together with the release of the McDougall Review last week, supports what injured workers have been saying for years about the damage the former government inflicted upon the work health and safety regime in NSW," Work Health and Safety Minister Sophie Cotsis said.
The department overseeing SafeWork NSW said it would prioritise addressing all 10 recommendations from both reports.
"This starts with analysis currently under way to determine the institutional arrangements for SafeWork NSW to become a standalone regulator for work health and safety in NSW," a customer service department spokesperson said.
The audit report was particularly critical of SafeWork's management of the emerging occupational lung disease related to silica dust.
The dangers were known internationally by 2010 but, with 330 inspectors and an annual budget of about $160 million, SafeWork NSW did little for years as the use of the popular kitchen benchtop material accelerated.
In 2018, a substantial compliance and awareness campaign began and its research arm was nudged to find a device to monitor silica dust levels in workplaces.
But during the tender process, responses were scored incorrectly, people with known conflicts of interest were inappropriately involved in evaluation and documents on the making of key decisions could not be found, the audit said.
Despite substantial concerns about its efficacy, the regulator settled on the UK-developed Air XS, which cost $18,500 per device when it hit the market in 2022.
"Only as a result of the audit office raising these issues with the head of SafeWork NSW did SafeWork NSW undertake to enter into discussions with the CSIRO to conduct further testing of the real-time silica monitoring device," her report said.
Potential maladministration due to "significant flaws in procurement, project governance and risk management" led both the audit office and the customer service department to refer the matter to ICAC.
The device won a departmental award in December 2022.
The auditor also exposed the regulator's ageing information management system for being unable to efficiently extract and analyse data and being so poorly understood that extracted data could be misinterpreted.
The peak body for NSW unions described the auditor's report as "an indictment on the organisation's conduct for the last decade" and underlined the need to further reform the "ineffective regulator presiding over a broken system".
