The NSW work health and safety regulator has been referred to the state’s anti-corruption commission in relation to the procurement of a silica monitoring device.

SafeWork NSW, which is part of the customer service department (DCS), was responsible for managing the project to develop a real-time device to monitor for potentially deadly airborne silica in the workplace.

Both the Audit office and DCS have made separate referrals to the NSW Independent Commission Against Corruption (ICAC) regarding the procurement process, Auditor General Margaret Crawford said.

Her report released on Wednesday found the engagement of a commercial partner to develop the device did not comply with key procurement obligations.

It also found SafeWork NSW failed to adequately address serious concerns about the accuracy of the device, known as Air XS, which in 2022 won a DCS Secretary’s award.

The department and the Audit Office have made separate referrals to the NSW Independent Commission Against Corruption regarding the procurement process for the Air XS.

NSW Auditor General Margaret Crawford

Ms Crawford said SafeWork NSW and DCS promoted the use of the device, known as the Air XS, even though the process to develop it was ‘significantly flawed’, and there were ‘known concerns’ about how effective it was.

The report identifies potential maladministration and significant flaws in procurement, project governance and risk management.

It also notes that “SafeWork NSW and the broader department took around eight years to actively and sufficiently respond to the emerging work health and safety risk of silica in manufactured stone.”

Not an effective regulator

The report is scathing about SafeWork NSW’s effectiveness as a regulator, saying it lacks an effective strategic and data-driven approach to respond to emerging WHS risks.

SafeWork NSW is also “constrained by an information management system that is over 20 years old and has passed its effective useful life”, the report says.

‘An effective work health and safety regulator would, among other things, have a comprehensive performance measurement and reporting framework, and would use data strategically to inform risk-based decisions,” the report says.

“SafeWork NSW does not demonstrate either of these.”

Shakeup foreshadowed

The report was released just days after the NSW government announced it would transform SafeWork into a standalone regulator, following a separate inquiry by former judge Robert McDougall KC.

Recommendations in Justice McDougall’s report included  reviewing SafeWork’s capabilities in triaging of incidents, improving the responsiveness of contact centre staff and pulling together SafeWork staff previously spread across the Department of Customer Service.

Commenting on the McDougall report, work health and safety minister Sophie Cotsis said “detailed options are being developed on the possible design of the standalone regulator for the government’s consideration”.

The government would never allow the health and safety regulator to be compromised so badly again, she said.

“Worker safety is not red tape, it is not a tick a box function, it is not a cost of doing business,” the minster said.

“We are committing to ensuring fthat SafeWork will create improved processes to ensure they are informed at all steps of an investigation and that SafeWork’s inspectors will get the support they need to do their vital work.”

In his response to Ms Crawford DCS secretary Graeme Head said the audit together with the McDougall report would provide a strong evidence base for improvement.