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TRANSCRIPT OF PROCEEDINGS

O/N H-368912

MR I. HANGER AM QC, Commissioner

ROYAL COMMISSION INTO THEHOME INSULATION PROGRAM

BRISBANE

9.30 AM, TUESDAY, 8 APRIL

Continued from 7.4.14

DAY 17

MR K.N. WILSON QC appears with MR J.R. HORTON as counsel assistingMR T. HOWE QC appears with MR D. O’DONOVAN for the Commonwealth of AustraliaMR R. PERRY QC appears with MR A. ANDERSON for family of Matthew Fuller and Rueben BarnesMR M. WINDSOR QC appears with MR M. HEATH for Peter Stewart and 72 othersMR T. BRADLEY QC appears with MS A.J. COULTHARD for the State of QueenslandMR S. KEIM QC appears for family of Mitchell SweeneyMR I. HARVEY appears for Mike MrdakMR D. BARROW appears with MS C. HUNTER for Jessica Wilson on behalf of family of Marcus WilsonMR W.M. POTTS appears with MR A. HANLON for Murray BarnesMR S. LLOYD SC appears for Robyn KrukMR TREFFERS appears for Margaret Coaldrake

Copyright in Transcript is owned by the Commonwealth of Australia. Apart from any use permitted under the Copyright Act 1968 you are not permitted to reproduce, adapt, re-transmit or distribute the Transcript material in any form or by any means without seeking prior written approval.

8.4.14 P-2219©Commonwealth of Australia

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MR HORTON: Commissioner, I call Gregory T. Rashleigh.

<GREGORY RASHLEIGH, SWORN [9.31 am]

<EXAMINATION-IN-CHIEF BY MR HORTON

MR HORTON: And you are Gregory T. Rashleigh, is that correct?

THE WITNESS: Yes.

MR HORTON: And you prepared a statement for the Commission dated 26 March 2014?

THE WITNESS: Yes.

MR HORTON: And you, for a time – actually 1976 and 2010 – ran a business called All Seasons Insulation. Is that right?

THE WITNESS: Yes. Yes, I did.

MR HORTON: And it was an accredited installer under the insulation program?

THE WITNESS: Yes.

MR HORTON: And that business was as member of ACIMA.

THE WITNESS: Yes. ACIMA.

MR HORTON: Yes. And what – you were both – I think you were a manufacturer of insulation as well?

THE WITNESS: Yes.

MR HORTON: And what kind of insulation?

THE WITNESS: Primarily polyurethane and cellulose fibre.

MR HORTON: Yes.

THE WITNESS: Under the scheme, only cellulose fibre.

MR HORTON: Yes. And in terms of installation?

THE WITNESS: Yes, we installed as well.

8.4.14 P-2220 G. RASHLEIGH XN©Commonwealth of Australia MR HORTON

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MR HORTON: Yes. What types of insulation did your company install?

THE WITNESS: Fibreglass, polyester, wool and cellulose fibre.

MR HORTON: Yes. No foil?

THE WITNESS: No. We didn’t do foil.

MR HORTON: Was there a reason for your company not installing foil?

THE WITNESS: It was just product that didn’t – didn’t come to us, really. We - - -

MR HORTON: Thank you. Now, before the Home Insulation Program, you say at paragraph 8 of your statement – do you have a copy of your statement there with you?

THE WITNESS: Yes.

MR HORTON: Thank you.

THE WITNESS: Yes.

MR HORTON: Yes. We will just have handed to you, Mr Rashleigh, a copy of your statement with the annexures neatly marked. Is that more convenient for you, do you think?

THE WITNESS: I – I think I’ve got them. That’s – yes.

MR HORTON: We will just give you one in case. We think - - -

THE WITNESS: Thank you.

MR HORTON: - - - ;you might not have all the annexures. You say at paragraph 8 of your statement that your business was profitable and stable before the Home Insulation Program?

THE WITNESS: Yes.

MR HORTON: And paragraph 10, you set out just in very brief summary that you had 20 installation agencies - - -

THE WITNESS: Yes.

MR HORTON: - - - under your umbrella - - -

THE WITNESS: Yes.


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MR HORTON: - - - and you were running the factory four days per week, eight hours a day.

THE WITNESS: That’s true.

MR HORTON: Yes. And the factory was – what – for the manufacture of cellulose?

THE WITNESS: Yes.

MR HORTON: I understand. If I can take you down, please, to paragraph 14. You say you were present at a meeting on 20 March 2009 - - -

THE WITNESS: Yes.

MR HORTON: - - - an industry consultation meeting about the HIP. Is that correct?

THE WITNESS: Yes.

MR HORTON: And the issue of training arose at that meeting?

THE WITNESS: Yes. Yes, it did.

MR HORTON: Yes. Now, Mr Herbert, I think, also attended from ACIMA. Is that right?

THE WITNESS: Yes.

MR HORTON: And I think you say, at least in other parts of your statements, you tended not to take a vocal role there because Mr Herbert was, in effect, in control of proceedings so far as the members were concerned.

THE WITNESS: Well, he was the secretary of ACIMA and if – I believe, if we had anything to say, it should go through him.

MR HORTON: Yes. You do, on occasion, though, say you spoke at these meetings as well as Mr - - -

THE WITNESS: Yes.

MR HORTON: Yes. Now, just explain generally, would you, what the context was in which training arose at the 20 March meeting.

THE WITNESS: I don’t have a lot of recollection of the – that particular area of the meeting at all – of any of the meeting but - - -


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MR HORTON: Yes.

THE WITNESS: - - - training came up on a number of occasions.

MR HORTON: Okay. Can I take you to the minutes of that meeting and just ask you a couple of questions because - - -

THE WITNESS: Yes.

MR HORTON: - - - you refer to them in your statement. The reference is AGS – it’s, I think, annexure 1 to your statement Mr Rashleigh. AGS.002.018.0150.

THE WITNESS: Yes.

MR HORTON: Now you say – I had better take you to it but paragraph 31 of your statement, you say at this meeting the effect of the discussion was there should be training course for all new installers and the Department of Environment was going to follow that through.

THE WITNESS: I believe so, yes.

MR HORTON: Yes. And can I just take you through the minutes to have an appreciation of that? On page 1 of the minutes – you just scroll down a little bit, operator. It’s the second last dot point you can see on the page, Mr Rashleigh. The third last now – second last.

Training emerged as an area for priority attention. Further discussion directed to a nominated session.

THE WITNESS: Yes.

MR HORTON: Is that something you recall occurring at the meeting?

THE WITNESS: I don’t recall it at that meeting but through the minutes it refreshes my mind.

MR HORTON: Certainly. Next page, please operator. And then at – I think you make reference to agenda item 4, installer training.

THE WITNESS: Yes.

MR HORTON: And then about halfway down those dot points, Mr Rashleigh, you said:

For existing operators, it’s important to enable recognition of prior learning.

THE WITNESS: Yes.


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MR HORTON: And what was the position regarding people who weren’t existing operators. Do you recall?

THE WITNESS: Can you - - -

MR HORTON: What was to be the – if you weren’t an existing operator, what was the view taken at this meeting about training?

THE WITNESS: Well, anybody just – walk in the industry fresh needed what I – wouldn’t say extensive training but they definitely needed – we needed to bring their competency up to a day-to-day working experience.

MR HORTON: Yes. And what did you say was proper training for someone installing insulation?

THE WITNESS: Well, I can only from our in-house training - - -

MR HORTON: Yes.

THE WITNESS: - - - and our in-house training went from three to five days, three days before the program started because most of the people had had experience, and after HIP we went to five because the quality of the applicant probably was unknown to us. So the first day, you would – it would be recognition of hazards or safety type of problems you would have in the ceiling actually on the job, and that would be done in the factory, and it covered everything from wiring to poor roofing, bad trusses, lights, that type of thing.

MR HORTON: And was that – that’s more an OHS style - - -

THE WITNESS: Yes, pretty much.

MR HORTON: - - - training.

THE WITNESS: Yes. It was a don’t get yourself into trouble on the job type day, and that was before the guys were taken out on site.

MR HORTON: And what were the other days about?

THE WITNESS: After that was completed or up to the competency of our supervisor, they would then be taken onto a job, an installer job, under the supervision of him, of course. And usually one or two people at a time on top of our normal crew and that gave them a chance to sit back and see what happened on site and, during that time, you could point out what they needed to do and what they needed to get their eyes out for. Because in our system, we went out to do a service, it was no good for us to come back with more problems than we took out.

MR HORTON: Yes.


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THE WITNESS: So – you know, it wasn’t – these guys weren’t highly trained but they were very competent at doing what they needed to do.

MR HORTON: So what portion of five days was directed to the technical competency, if you like, of actually installing insulation?

THE WITNESS: I would say two days.

MR HORTON: Yes.

THE WITNESS: Yes. Two on site days. Yes.

MR HORTON: Yes. And at these meetings that you attended were you asked to explain what your training regime was or what you thought the regime should be?

THE WITNESS: No.

MR HORTON: Now, you say about the meeting on 20 March at paragraph 18 of your statement, you formed a view that the Department of Environment representatives did not really understand the issues that the representatives were raising. What led you to that conclusion?

THE WITNESS: If – if a question or a query was asked from outside of the room, from the industry side of the room, it was like – my perception was it wasn’t understood at the other side. So the guys we were talking to either didn’t understand or weren’t informed of what – what we were needed – what we needed to ask and get answered. Yes. They didn’t have the experience.

MR HORTON: Did you notice between meetings though the knowledge increasing or the level of understanding increasing?

THE WITNESS: No.

MR HORTON: You say at paragraph 19 that Mr Keefe said to you, before the Minister joined, that the Minister would be there for 10 minutes, and said who would like to answer these certain questions. What did you take that to be doing?

THE WITNESS: In my opinion, Mr Garrett should have asked us the questions. And we were asked to answer questions in a way that made Mr Garrett feel good, not what our thoughts were. “This is what I think, you just tell me that it’s right”, you know.

MR HORTON: Was any opportunity given at the meeting for industry to do that, to raise with the Minister things that were of concern to them?

THE WITNESS: Please repeat the question.


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MR HORTON: Was any opportunity given to the industry members at this meeting, the 20 March meeting, to raise with the Minister or state to the Minister concerns that they had about the scheme?

THE WITNESS: No.

MR HORTON: You say at paragraph 25 of your statement that Mr Garrett said the scheme would run for the full term.

THE WITNESS: Yes.

MR HORTON: And was that your understanding at the time?

THE WITNESS: The full term or until the money ran out.

MR HORTON: Yes.

THE WITNESS: Yes.

MR HORTON: And what did you understand that to mean at the time? How long did you think you had left in the scheme?

THE WITNESS: About two and a half years at that stage, yes, to run.

MR HORTON: You return to the issue of training at paragraph 29 of your statement.

THE WITNESS: Yes.

MR HORTON: You were concerned, you say, that the HIP should require compulsory training for new installers. Now, what did you understand was the position that was going to be the case as at March or April 2009, from the meetings you had attended?

THE WITNESS: I thought they were going to put a company in charge of training. They were going to set up a program. All the trainers were going to go to this school and learn; pretty much like ours was. I knew that they had, like, in-house training but that’s something that needs to be done on – out of house training, that needs to be done on site. It would be difficult for that school to do that. And I understood all the new people would have to go through that. The previous people would go through a competency thing or a – you know, you’ve been doing it 15 years, that’s okay, sort of thing.

MR HORTON: Yes. So far as new people were concerned, were you ever consulted at these meetings, or was it suggested to you that it might be enough if a new person to the industry was supervised by someone who had the experience or had done the competencies themselves?


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THE WITNESS: I wouldn’t have agreed with that.

MR HORTON: Why not?

THE WITNESS: It wasn’t good enough that the supervisor can’t be – can’t cover the whole site in one go. If you have someone who was untrained, in his first two or three weeks a supervisor can’t keep an eye on two or three people on site.

MR HORTON: Was the suggestion ever made to you that this would be a way of approaching the competencies at any of the industry consultation meetings?

THE WITNESS: I don’t believe so, no.

MR HORTON: Now, you mentioned prior experience, in effect, being one way in which you could achieve the competencies. And you mention at paragraph 38 a disagreement with the position where some of the trades had that recognition.

THE WITNESS: Yes.

MR HORTON: The ones I think you mentioned, you say:

Perhaps a plasterer might be okay but not bricklayers or painters.

THE WITNESS: Yes.

MR HORTON: Why not bricklayers and painters?

THE WITNESS: Bricklayers and painters don’t crawl round a ceiling. They don’t get in tight areas. They don’t know how to lift a roof. They don’t know anything about – well, they have – through their experience, would have some knowledge of electrical, but a lot of it new and not old. A lot of houses, probably a third of the houses we dealt with were old houses. The wiring was old. It was in conduit. Especially in the country areas, it could have been mouse or rat affected. Those things needed to be looked at before we insulate it. These guys didn’t have that experience at all.

MR HORTON: Thank you. Now, you attended a meeting in May I think as well. Do you remember – I think you say in your statement you don’t remember attending a meeting in May.

THE WITNESS: Where was it?

MR HORTON: This was the meeting – just let me pull this up for you. I might ask you to be shown a document.



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MR HORTON: Can I ask the witness to be shown STA.001.001.0104. If you just scroll down, please, operator.

Now, this is one note of the meeting. I’m going to take you to the minutes in a moment. It’s a training work group, Friday, it occurred on 8 May. You say, I think, you can’t remember attending but some other minutes I will show you have you making comments. But is it possible you’re one of the three cellulose industry attendees there, mentioned at paragraph 1?

THE WITNESS: It’s possible.

MR HORTON: Yes. Can I just take you through this document and ask if any of this prompts a memory about what might have occurred? Could you just scroll down, please, under Training Content, paragraph 3:

There’s no established training course in the industry at present.

This, by the way, is a note prepared by Mr D’Arcy who was also at the meeting.

THE WITNESS: Yes.

MR HORTON: And the next sentence there:

The government program is not intending to provide a new gold standard for installation for the industry.

Do you remember this being spoken about?

THE WITNESS: No, I don’t.

MR HORTON: Okay. And then down to paragraph 8:

An OH&S white certificate will be mandatory, no exceptions, and will be required by all installers. Other training will be strongly encouraged but not mandatory.

THE WITNESS: No, I don’t remember that either.

MR HORTON: Don’t remember that.

THE WITNESS: No.

MR HORTON: Thank you. I might show you the minutes again, just for completeness. Could the witness please be shown AGS.002.040.0396. Now, these are the minutes of the meeting, Mr Rashleigh, from the same day. And you will see on this document the meeting was held at the John Gorton Building in Canberra.


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THE WITNESS: Yes.

COURT OFFICER: Mr Horton, we are unable to find a document ending in 0396.

MR HORTON: Right. Well, mine does but it might not be the first page then, might it. Let’s see what we can do. I will hand a copy up, this is the best way. Thank you. And just the first page, if you would, operator, for a moment, towards the bottom of it. Could you just visualise the document? I don’t need - - -

COMMISSIONER: We put it on the - - -

MR HORTON: I’m sorry. I don’t need to spend long on it, that’s all. So this is a training workshop – workshop summary, but they seem to take the form of minutes more than anything. If you just scroll down, operator, to the bottom of the page.

Now, the third last dot point, Mr Rashleigh, mentions your name. You actually stated:

His business has employed 86 installers over the last three months.

THE WITNESS: Yes, that’s true.

MR HORTON: Does that prompt a memory about being at this meeting?

THE WITNESS: Yes, it does. Yes.

MR HORTON: Good. And the second page, please, operator. It might be double-sided there. And the top dot point, Mr Rashleigh, an overview of the minimum entry requirements for the installer provider registered was provided.

Each person engaged in a business needs to complete the one-day OH&S induction training.

And then the next sentence I’m interested in: supervisors need that or that or that.

THE WITNESS: Yes.

MR HORTON: Now, do you remember this issue being discussed at the 8 May meeting?

THE WITNESS: Yes.

MR HORTON: And what do you recall of this topic?

THE WITNESS: I don’t – at that particular meeting, I don’t. I – there was a lot of discussion made about it. I don’t recall there ever being a decision on which way to – when it was going to be finished.


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MR HORTON: Was someone suggesting at this meeting that it might be enough for an installer, himself or herself, to do the OH&S white card only provided there was a supervisor who had done one of those three things that are mentioned?

THE WITNESS: I don’t know whether anyone suggested it, no.

MR HORTON: You don’t remember anyone suggesting that might be an alternative way to training every installer in each of the competencies?

THE WITNESS: No.

MR HORTON: And if it had been suggested at that meeting, what would have been your response?

THE WITNESS: My response?

MR HORTON: Yes.

THE WITNESS: “No, not good enough.”

MR HORTON: Could you just go to the bottom of the page, please. The last point I wish to raise with you. Just your name is mentioned at the bottom dot point again. Three to five days training is mentioned and you felt that once ..... access is included, it could take six months to two years to fully train. Is that correct?

THE WITNESS: That’s correct.

MR HORTON: And why that long?

THE WITNESS: It takes that long for the experience to become a qualified supervisor. There are heaps of reasons and heaps of different scenarios that will play out. Every roof is not the same and to be able to make qualified judgments, a five-day training course won’t do that. It will give you enough to work underneath the supervisor guy.

MR HORTON: Yes, I see.

THE WITNESS: Until you gain that experience.

MR HORTON: And what did you think a supervisor might need then? This longer period?

THE WITNESS: At least, yes. Yes.

MR HORTON: Thank you. Now, you say in paragraph 44 of your statement, if we can return to that. This, Mr Rashleigh – these questions concern the nature of your


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business during the HIP. You say you were running the manufacturing side 24 hours a day.

THE WITNESS: Yes, that’s correct.

MR HORTON: Seven days a week.

THE WITNESS: Yes.

MR HORTON: And you invested in a new manufacturing mill?


MR HORTON: When did you do that?

THE WITNESS: It’s – it started about April of ’09.

MR HORTON: Yes. And completed when?

THE WITNESS: Christmas of that year.

MR HORTON: Yes. And the total cost, do we add those three figures together that you’ve got in paragraph 46?

THE WITNESS: $2 million.

MR HORTON: Yes. And did the mill ever operate?

THE WITNESS: No.

MR HORTON: And why was that?

THE WITNESS: The program went into limp mode and that was about the time we were starting to turn it on. So it – we sort of got it to a certain stage and – and waited. We ran the other mill and filled up the factory and got it all ready for the next stage to proceed. It didn’t proceed.

MR HORTON: Now, you say that there was noncompliant material being sold that you saw?

THE WITNESS: Yes.

MR HORTON: And what do you mean by that and what kind was it?

THE WITNESS: Under the program, we had to install – most material was – had an ..... of 3.5. Previous to the – to the HIP program starting, all material was accredited under the Australian regulations at that time, both fibreglass, cellulose, polyester –


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everybody. After HIP, imported materials were being brought in and I don’t believe they were up to scratch.

MR HORTON: Yes. When you say “noncompliant”, how did you – how do you know they were noncompliant?

THE WITNESS: They weren’t thick enough. They were very fibrous, weren’t held together, very rough to handle. It – it – after 30 years, you just – you know.

MR HORTON: And you say the HIP was terminated without notice to you?

THE WITNESS: Yes.

MR HORTON: And you started laying off staff shortly afterwards?

THE WITNESS: Almost straightaway.

MR HORTON: Yes.

THE WITNESS: Yes.

MR HORTON: And then paragraph 71 of your statement, you say that in May 2010, you closed the doors of the business.

THE WITNESS: Yes.

MR HORTON: And what do you attribute that decision to?

THE WITNESS: No work. It just stopped. It was like someone turned the tap off. One – one day you were working 24/7. Everybody was. And then the next day, there was nothing. It was - - -

MR HORTON: A sudden end.

THE WITNESS: Yes.

MR HORTON: Now, you give us, I think, a summary in paragraph 20 – sorry – 76 of the value of unused stock that you had at the termination of the Home Insulation Program.

THE WITNESS: Yes. Yes.

MR HORTON: Did you sell any of that stock or were you able to sell any of the stock which you had as at the termination of the program?

THE WITNESS: There was so much – at this time, there was so much product that was not needed any more. We had an order a long time in advance, whereas we


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never had to do that previously. By this – we – we definitely knew our requirements because we were working – every day you used the same product, so you knew – same amount of product, so you knew – knew how much material you would need to continue for the next six months or eight months and our supply companies were making us order so far in advance that we – when it was turned off just like that, we had advanced orders nine months in front that nobody wanted and it’s still sitting around now. It will never get used. They just - - -

COMMISSIONER: So you said advanced orders nine months in front?

THE WITNESS: It – some of it, further than that.

COMMISSIONER: Is that right - - -

THE WITNESS: Some of the companies we were dealing with for 20 years, you would ring them up at the end of February and say, “At the end of March, we want 20 tonne of material – raw material to – to manufacture cellulose.” And it was there at the end of March, no troubles at all. As – as – it didn’t get too far down the track, whereas I – I knew I needed 20 tonne a week. These guys didn’t have it. It’s not – it’s comes from Chile or Argentina or – and so they had to forward order which meant that my – this opposition company had to forward – forward order. So it turned out to be first in best dressed, and whoever paid the biggest deposit got the order.

So when it was turned off overnight, I had nine months orders – forward orders and, of course, if these guys had it – had – had committed for it and personal guarantees – it’s a personal guarantee and that was the only way you could order but we knew we would use it. It was – was a given. It was, you know, you – to operate, to exist, you just had to have product and during the program, I – I know of times that my stock has just ran out, so it – the truck didn’t turn up or something like that, every excuse in the book. Supply and demand is an awful thing when you’re at the mercy of someone else and, of course, while this was happening, the prices were just going like this. So - - -

MR HORTON: You did receive some reimbursement, though, from the government for your unused stock.

THE WITNESS: We got 15 per cent.

MR HORTON: Yes.

THE WITNESS: Under a – a scheme I – I think in 2010, I think.

COMMISSIONER: 15 per cent of the stock.

THE WITNESS: Yes.


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COMMISSIONER: But nothing for the – any of the factory equipment that you put in or - - -

THE WITNESS: No, no. Our accountant worked out a – a figure and that’s where those figures in here have come from, straight off what he worked out.

MR HORTON: You say at paragraph 81 of your statement that the mill purchase was part of the business plane.

THE WITNESS: Yes.

MR HORTON: By which you would hope to recover investment in the plant.

THE WITNESS: Yes.

MR HORTON: Was that a realistic thing to achieve in the forthcoming 12 months?

THE WITNESS: Easily, yes. Yes.

MR HORTON: And how had you arrived at that view?[10.00 am]

THE WITNESS: We knew how much install work we could do and how much product we were selling out the door to – just to our guys, to people under our umbrella. So it was only maths to work out how much product you needed to – to continue over that period. Our existing plant was nowhere near it and that’s why we took on the decision to purchase the new plant to do that, to try and keep up. The milling figures that we were doing previous to the HIP were nothing that we needed to keep everybody going and before HIP, we would have 16,000 bags of product on the wall ready to go out the door. During the HIP, we had trucks literally waiting for it to come off the – off the conveyor belt. It was – everyone was screaming for stock. It just wasn’t available, and especially the reputable guys because the suspect product we knew was going to be audited in time. So if – if you were installing suspect product and an auditor come round and had a look at it and said, “This is no good. You’ve got to pull it all out.” you couldn’t do it. It just wouldn’t happen. So the reputable guys were really careful and the people who had been in the industry – really careful to do all the rights things because we knew an auditor was coming. So - - -

MR HORTON: Thank you. They’re my questions of Mr Rashleigh, Mr Commissioner.

COMMISSIONER: Yes.

MR ANDERSON: Good morning, Commissioner. Again, for the recond, Anderson, initial A. I appear this morning in Mr Perry’s absence.

COMMISSIONER: Thank you, Mr Anderson. Carry on.


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<EXAMINATION BY MR ANDERSON [10.01 am]

MR ANDERSON: Mr Rashleigh, at paragraph 2 of your statement, you say that being the owner and director of All Seasons Insulation for a period from 1976 through to 2010.

THE WITNESS: Yes.,

MR ANDERSON: By my calculation, that’s 34 years.

THE WITNESS: Yes.

MR ANDERSON: Is it fair to say during that period that you’ve entered many roof cavities?

THE WITNESS: Yes.

MR ANDERSON: And would you agree with me if I said to you that not all roof cavities are the same?

THE WITNESS: Yes, I would agree.

MR ANDERSON: In fact, quite the opposite, that roof cavities can be vastly different from one to the next.


MR ANDERSON: So if you’re doing work in the insulation industry and entering many roof cavities over a period of days or weeks or months then you will entering many different work places in terms of the hazards and risks that exist in those work places.

THE WITNESS: Yes.

MR ANDERSON: In terms of the hazards and risks, Mr Rashleigh, would you outline for the Commissioner what they are generally when you enter a roof cavity?

THE WITNESS: Probably access would be one of our major concerns, not only for the risk but the practicability of doing the job as well, and that increases – if it’s a very, very tight ceiling access is fairly important. Ventilation is – and light is probably the next thing you’re looking for and that – when you’ve got ventilation and light, that allows you to see everything else that’s there. So you would look at your wiring and recess lights, which is a big one, and then which material was to be put into the cavity that you’re looking at to be most effective.

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MR ANDERSON: Thank you. So then, in terms of the hazards and risks and the very nature of the types of work places that you go to when you enter a roof cavity, would you agree with me if I said that roof cavity can be inherently dangerous as a workplace?

THE WITNESS: It could be, yes.

MR ANDERSON: And you say at paragraph 15, second line:

If they were not properly trained they may put themselves at risk of injury.

THE WITNESS: Yes.

MR ANDERSON: And is that because people need training because of the dangers that can exist in a roof cavity?

THE WITNESS: Yes.

MR ANDERSON: And at paragraph 14, you say at the end of the second line:

The training should involve at least some on the job training.

THE WITNESS: Yes.

MR ANDERSON: Mr Rashleigh, if I can take you to minutes of 20 March 2009 meeting and the reference is AGS.002.018.0150. Page 2, please, about halfway down. Yes, stop there, thank you. Now, Mr Rashleigh, before I take you to a point Mr Horton asked you about whether you were asked questions at the meetings you attended and I understand your answer was “no”, that in fact you relied on Mr Herbert as the industry representative to put information forward at those meetings.

THE WITNESS: Most of the time, yes.

MR ANDERSON: But your evidence you have just told me is that installers need training and that training should include an on the job component. Okay. Could I get you to look at the document in front of you. The fourth bullet point up from the bottom says:

Feedback provided that competency needs to be assessed by watching someone install insulation correctly.

Do you see that, Mr Rashleigh?

THE WITNESS: Yes.

MR ANDERSON: Does that reflect your views that this training requires some form of on the job training?


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THE WITNESS: Yes.

MR ANDERSON: Thank you. And in terms of the nature of the training, Mr Rashleigh – I’m finished with that document. Thank you. In terms of the nature of the training, you give evidence about that in your statement at about paragraph 41. If I can go to that paragraph. The bottom line starts with:

This training would generally take five days with our experienced foreman for someone who did not have an existing trade qualification or any prior installation experience.

THE WITNESS: Yes.

MR ANDERSON: Mr Rashleigh, one of the families I act for is the siblings of Mr Rueben Barnes who was the second young worker to be fatally injured whilst performing work ..... program. Mr Barnes was aged 16 at the time of his death. He had no previous insulation experience and he had no trade qualification. Is he the sort of person that would fit within the category that you say is at least five days under an experienced foreman – that’s a minimum requirement to train for someone in Mr Barnes’ category?

THE WITNESS: Yes.

MR ANDERSON: Thank you. And then in terms of the – in terms of the training that’s provided to someone, you used the words – in terms of the way you conduct your business – that for those people it’s carried out by an experienced foreman.

THE WITNESS: Yes.

MR ANDERSON: Okay. So you discuss at paragraph 38 that you had concerns around some trades being able to carry out supervision and you talk about brick layers and painters, for example.

THE WITNESS: Yes.

MR ANDERSON: And that they might not necessarily have the competency to supervise.


MR ANDERSON: Okay. So is it your – is it the case, then, that in terms of carrying out this on the job training and supervision, that just because you have a trade doesn’t necessarily mean that you would be competent to perform that task?


MR ANDERSON: Thank you, witness. No further questions, Commissioner.


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COMMISSIONER: Thank you. Mr Keim.

MR KEIM: I’ve got no questions. Thank you, Commissioner.

COMMISSIONER: If you’re ready - - -

<EXAMINATION BY MR BRADLEY [10.07 am]

MR BRADLEY: I have a few questions. Mr Rashleigh, can you tell me in terms of – is there such a thing as a typical installation of home insulation?

THE WITNESS: No.

MR BRADLEY: Is there a number of people that would normally be on the job onsite installing insulation in a home?

THE WITNESS: The way we worked, there was three. A guy in the ceiling, a guy in the truck and I suppose you would call him the leading hand type person, the foreman type person. And he would just make sure everything ran smoothly and it was all happening.

MR BRADLEY: And before the Home Insulation Program commenced, how many people did you employ to do those three onsite jobs? What was your workforce on the installing side of the business?

THE WITNESS: Three. Three per team.

MR BRADLEY: And how many teams before the program began?

THE WITNESS: Three.

MR BRADLEY: And I think in your statement – you can have a look at it, if you like, it’s in paragraph 35 at the top of page 6. So it’s the second half of paragraph 35. You’re looking – you’re referring to something that’s stated in a document, some feedback - - -

THE WITNESS: Yes.

MR BRADLEY: - - - about how many new installers.

THE WITNESS: Yes.

MR BRADLEY: Is that correct?

THE WITNESS: Yes.

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MR BRADLEY: That you had employed 86 new installers - - -

THE WITNESS: Yes.

MR BRADLEY: - - - after the program commenced.

THE WITNESS: Yes.

MR BRADLEY: And did those new installers operate in teams the way that your - - -

THE WITNESS: Yes.

MR BRADLEY: - - - typical team operated?

THE WITNESS: Yes. No – no fewer than three to a team.

MR BRADLEY: And who played the role of the leading hand supervisor?

THE WITNESS: That choice would be done when the teams were put together.

MR BRADLEY: And presumably a number of those leading hand supervisors were what you’ve called here “new installers”.

THE WITNESS: Not – not normally, no. They – the leading hand would have more experience than everybody else.

MR BRADLEY: But if you had three teams – how many teams did you have?

THE WITNESS: Three teams.

MR BRADLEY: Three teams of three - - -

THE WITNESS: Yes.

MR BRADLEY: - - - before the program started.

THE WITNESS: Yes.

MR BRADLEY: That’s nine people.


MR BRADLEY: And then in the first three months you had 86 new ones?

THE WITNESS: 86, yes. Yes.

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MR BRADLEY: Where did you find the experienced ones to be the leading hands?

THE WITNESS: They would be ramped up as – as time went on, if someone was there for a month and showed promise, they would be nurtured into a team leader.

MR BRADLEY: Can I ask you a couple of questions about paragraph 46 of your statement. We might just call that up for you. You’re speaking here about the – a new cellulose insulation manufacturing mill.

THE WITNESS: Yes.

MR BRADLEY: Can I ask you this, the cost of machinery components you’ve got there of $1.5 million. Was that machinery manufactured in Australia?

THE WITNESS: Yes. Queensland, yes.

MR BRADLEY: And the electrical components that you purchased for 448,000, were they manufactured in Australia?

THE WITNESS: Yes. I don’t know whether some of the components were, but it was purchased in Australia. Nothing – we didn’t get anything from overseas, if that was your question.

MR BRADLEY: Commissioner, those are my questions.

COMMISSIONER: Is there anything - - -

<EXAMINATION BY MR HARVEY [10.11 am]

MR HARVEY: Two questions, I think. Mr Rashleigh, you were questioned about the meeting that you attended on 20 March and in that context, you described, with some level of detail, what it was that you gave to your installers by way of training. Do you remember that?

THE WITNESS: Yes.

MR HARVEY: And you set out some details of that. Did you inform the participants at the meeting on 20 March of those steps and the content of that training in the way that you’ve described it today?

THE WITNESS: No, I don’t believe so.

MR HARVEY: No. And just in relation to one question that my learned friend Mr Bradley asked of you about the new installers who were coming on board, did each of those 80 or so installers go through that process that you’ve just described to that?

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THE WITNESS: Yes.

MR HARVEY: Thank you.

COMMISSIONER: Yes, Mr Barrow.

<EXAMINATION BY MR BARROW [10.12 am]

MR BARROW: Mr Rashleigh, I’m also appearing for a family member, a young guy who died, but in New South Wales. I just wondered whether, when the scheme began on 1 July, were you aware that trained people were permitted under the scheme to work in roof cavities provided they were supervised. Did that become apparent to you?

THE WITNESS: I don’t believe that ever started. It never started in our scheme, in our umbrella of workers.

MR BARROW: So in your company that was not - - -

THE WITNESS: It would - - -

MR BARROW: - - - not an issue for you?

THE WITNESS: No.

MR BARROW: Because you provided training.

THE WITNESS: Yes.

MR BARROW: Were you aware that it was occurring outside of your business amongst other trade people?

THE WITNESS: No. I didn’t have any experience of that, no.

MR BARROW: So you were just focused on your activities?

THE WITNESS: Yes.

MR BARROW: You mentioned in your evidence that you anticipated there would be an auditing process at some point in the future.

THE WITNESS: Yes.

MR BARROW: Did you ever experience any aspect of auditing before the program was shut down?

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THE WITNESS: I don’t know whether it was before the program was shut down or after that but, yes, there was auditors put in place.

MR BARROW: The only other matter I wanted to ask you about was, and perhaps it’s a bit of a – it might not be something that you can answer. If you assume for a moment that there were large numbers of people who were engaged in the work, who were meant to be being supervised but here – just perhaps focusing in Queensland, I suppose, in your experience – or had you had any experience of any active policing of workplace safety by any state agency in the course of your work?

THE WITNESS: No, I haven’t had any experience of that.

MR BARROW: So you’ve never had a random inspection or anything like that?

THE WITNESS: No.

MR BARROW: And, again, you may not be able to express an opinion, but would that be something that was realistic?

THE WITNESS: For someone to – the way we work, for someone to police our installs, they would have to know where we were.

MR BARROW: Yes.

THE WITNESS: And our guys didn’t know where they were tomorrow.

MR BARROW: Yes.

THE WITNESS: Because they only knew where they were when they walked in and got their work sheets that morning.

MR BARROW: Yes.

THE WITNESS: So I expect it could be done, but I think it would be a difficult thing to set up.

MR BARROW: So perhaps one way in a reputable organised business like your own would be for a work safety organisation to come to you and say, “Well, where are people working today? We might go and conduct some inspections.”

THE WITNESS: Yes. We had – on a couple of occasions where workplace health and safety guys, not related to the home improvement program, not building inspectors but – and they call up and tell the guys their ladder wasn’t secure, or it wasn’t tied off, or check something like that. That happened on a couple of occasions, but not – not an audited type thing. It’s just a hearsay, but they would do that on any building site.

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MR BARROW: Yes. Okay. Thank you, Commissioner.

COMMISSIONER: Mr Potts.

<EXAMINATION BY MR POTTS [10.16 am]

MR POTTS: Thank you. My questions will be very brief. So in your 34 years in the trade, in the insulation business, you never had one incident where the work occ health safety or the electrical safety office came to a site where your workers were working?

THE WITNESS: No. Apart from what I just mentioned.

MR POTTS: Okay. So you were, no doubt, however, aware of work occ health safety rules and the safety of workers on site?

THE WITNESS: Yes, yes.

MR POTTS: And if I could have paragraph 38 of your statement pulled up, in the evidence you gave before, I think in relation to Mr Horton, was – you said that your concerns with perhaps bricklayers or painters of being – that they may not have sufficient electrical experience with old wiring. Is that one of the things you said?

THE WITNESS: No, not so much, but those guys didn’t crawl round ceilings. They had building knowledge because they’ve probably worked in the building industry all their life.

MR POTTS: Right.

THE WITNESS: But - - -

MR POTTS: Was it your intention, when you were training people, to make them aware of the dangers on site?

THE WITNESS: Yes, absolutely.

MR POTTS: Because one of the things you talked about was the necessary skills to work in enclosed spaces, quite often in heat, quite often in poor lighting, and quite often the difficulty of lifting works.

THE WITNESS: Yes.

MR POTTS: All right. Obviously, the Commission here is investigating the deaths of at least three people that died of electrocution injuries. Was electrocution something which you were acutely aware of as an installer?

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THE WITNESS: Yes.

MR POTTS: And to that end, in the training that you gave, firstly, the nine people you had to begin with and the 86 new people you had, did you focus – or any of your attention or training on the electrical safety – or, sorry, at least the way in which they could handle electrical safety issues in rooves?

THE WITNESS: Yes.

MR POTTS: And what would you focus on in that?

THE WITNESS: It would start with down-lights, because on an install job down-lights are one of our biggest headaches. So it would start with that, and then it would go back to whether the wiring was aged, if – and we put 1945 is when electrical products changed, the regulations changed. And in the area we worked a lot of the insulation around electrical was still conduit and metal conduit. A lot of that was damaged, and a lot of the wiring was rodent affected; rats and mice, that type of thing. To cover that up was a real no no. And if we had a problem, we just called an electrician in. He rectified it, and then we could continue.

MR POTTS: All right. Was there any training in relation to turning power off to houses before you worked in those places?

THE WITNESS: No.

MR POTTS: Not at all?

THE WITNESS: We needed power.

MR POTTS: You needed power. Right. One of the questions that I suppose has to be focused on, and this is – even in your own business you went from nine people, three crews, to 86. And that’s a very large number of new people to be trained.

THE WITNESS: Yes.

MR POTTS: And it was a very large number of people being exposed to risk in the roof tops.

THE WITNESS: Yes.

MR POTTS: Right. Whilst you had a training course, you, no doubt, have your ears to the ground about what other people competing in that industry, or this new industry were doing.

THE WITNESS: Not directly, no. It was – we seemed – we seemed to be in a bubble, you know, and I expect all the other companies were the same. They had their own things to do. And back to training 86 people, we had a 20 operators


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through Queensland and New South Wales that had been operating for many, many years in their own right using our product, and a lot of time under our name. So they would get two or three guys who were new, and send them to us. We would train them and send them back. So, you know, they weren’t really new, and they were always underneath the original company, the installer. So the supervisory side of things was pretty easy.

MR POTTS: Did you have some concern though with the number of new players in the industry, the demand for product, that people were not paying – other than your organisation, your group, were not paying attention to the training of installers?

THE WITNESS: Yes, every day.

MR POTTS: Did you do anything about that in the sense of, did you not provide product to people who were perhaps untrained?

THE WITNESS: We wouldn’t sell product to anybody who hadn’t had our training.

MR POTTS: Right.

THE WITNESS: And that was for two reasons. One was to bring them into the insulation umbrella of ours, and that was a business – a conscious business decision. And the other one was, we didn’t have enough product.

MR POTTS: Right.

THE WITNESS: We couldn’t sell to anybody else. At every meeting that we went to in Canberra installers were, if not the most important in the first three categories – that was one of our biggest concerns is controlling the install of the product.

MR POTTS: Okay. And, in particular, by inference, the safety of the installers, the people in the actual rooves?

THE WITNESS: Yes, and the client. Installed incorrectly, you’ve got a house fire. That’s the client, we’re back to the client again.

MR POTTS: And if untrained, a very real danger and consequence of death.

THE WITNESS: It could be.

MR POTTS: Thank you.

COMMISSIONER: Thanks, Mr Potts. Mr Rashleigh, one of these people who died seems to have died because of a fault that was in the roof, you know, something going through an electric wire that had been put there sort of 10 years earlier. Is there any kind of electrical safety check you do or would recommend before people


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actually get up into a roof to prevent that happening, you know? He completed the circuit which had been pre-existing for years.

THE WITNESS: Yes. Apart from sending an electrician in first, no. Our guys aren’t electricians but we can – with experience, you can identify a potential problem. And if we did that, you – you just call an electrician in. He would okay it or repair it for the customer and we would go again. And most of the time, the customer is fairly happy about that because they don’t crawl up in the ceiling.

COMMISSIONER: No, they would be grateful for it.

THE WITNESS: Yes, that’s right. And getting away from the personal concerns about the install and the safety of the installer, it’s the safety of the customer, because a lot of the problems on my side of things, they turned up six months, 12 months later, especially with the electrical downlight problem and that sort of thing. It was – that was really high on our list which is fire. So - - -

COMMISSIONER: But you were still looking at electrical safety by a visual inspection.

THE WITNESS: Yes.

COMMISSIONER: And that’s all.

THE WITNESS: That’s right.

COMMISSIONER: Okay. Thanks. Mr O’Donovan.

<EXAMINATION BY MR O'DONOVAN [10.23 am]

MR O’DONOVAN: Now, I appear for the Commonwealth. Just go back to the product that your company specialises in, although you do other products, the main product is cellulose insulation. Is that right?


MR O’DONOVAN: Okay. And there’s capital equipment involved in installing cellulose insulation?

THE WITNESS: Yes, there is.

MR O’DONOVAN: Okay. So it requires a truck out on the street.

THE WITNESS: Yes.

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MR O’DONOVAN: Which is capable of blowing the cellulose up into the roof of the house.

THE WITNESS: Yes.

MR O’DONOVAN: And you need someone in the roof of the house - - -

THE WITNESS: Yes.

MR O’DONOVAN: - - - to control the flow and direct it.

THE WITNESS: Yes.

MR O’DONOVAN: Okay. And is it the case that in every installation, you had to remove part of the roof in order to effect the installation?

THE WITNESS: Not in every one, no.

MR O’DONOVAN: So describe those ones where you don’t.

THE WITNESS: An – an extremely high ceiling. A high pitched ceiling.

MR O’DONOVAN: Yes.

THE WITNESS: Usually a metal roof early in the morning and if it has sufficient light up there. Some houses have got 50 downlights. It’s like as light as this room up in the ceiling. It’s easy. But ventilation is the other concern. So early in the morning, big roof, you can probably get away with it.

MR O’DONOVAN: Okay.

THE WITNESS: But by 9 o’clock, you couldn’t.

MR O’DONOVAN: Right. And so would it be fair to say that the vast bulk of the installations that you do involve raising the roof in some fashion?

THE WITNESS: Yes.

MR O’DONOVAN: Okay. All right. And so in terms of what – the training that’s required, you have to train people to be able to operate the machinery that’s out on the street.

THE WITNESS: Yes.

MR O’DONOVAN: To identify the particular hazards that are caused by spraying cellulose over electrical appliances.


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THE WITNESS: Yes.

MR O’DONOVAN: Getting the depth of the cellulose right.

THE WITNESS: Mmm.

MR O’DONOVAN: And then actually being able to lift a roof which, for example, if the - - -

THE WITNESS: And replace it, yes.

MR O’DONOVAN: Yes. And so, for example, if it’s a Colorbond roof, low pitched, on a hot day, that’s a difficult task?

THE WITNESS: Yes.

MR O’DONOVAN: All right. So in terms of the training that’s required, is it fair to say that the leading hand needs a lot of training because of the complexity of installing cellulose insulation?

THE WITNESS: He needs to be competent. He – one leading hand will pick things up reasonably quickly and – and act – act on them. Another one may be slower and doesn’t act experience wise as quickly. But that’s a personality thing.

MR O’DONOVAN: Yes. Sure.

THE WITNESS: Some are good. Some aren’t so good.

MR O’DONOVAN: But is it primarily your concern that the leading hand has the ability to identify a job, remove a roof safely, re-install that roof safely so it’s not leaking, it’s not going to cause problems for you, make sure that the cellulose is laid in a way that’s not going to cause house fires?

THE WITNESS: Yes.

MR O’DONOVAN: And that’s the responsibility of the leading hand?

THE WITNESS: Yes.

MR O’DONOVAN: And that’ - - -

THE WITNESS: The – the whole team, but the leading hand is the one who signs off on it.

MR O’DONOVAN: Sure. All right. And you would agree that in terms of batt insulation, there isn’t that level of complexity, is there?


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THE WITNESS: Same problems.

MR O’DONOVAN: Well, let’s step back. Firstly, when you’re installing batt insulation, you don’t have to operate a truck from the street. Do you agree with that proposition?

THE WITNESS: Well, it has got to get there.

MR O’DONOVAN: I think we can agree you have - - -

THE WITNESS: It’s – it’s a very – fibreglass is a very bulky material. It’s – you usually need a bigger truck to bring fibreglass to a job than you do to bring cellulose.

MR O’DONOVAN: Yes. But we’re not concerned here with driving the truck. There isn’t a separate piece of machinery that’s going to blow the batts into the ceiling, is there?

THE WITNESS: No.

MR O’DONOVAN: No. And that would be machinery that’s unfamiliar to people, whereas driving a truck is familiar to a lot of people.

THE WITNESS: Yes.

MR O’DONOVAN: You would agree with that proposition. Okay. And that in relation to installing batts, that you don’t always have to remove the roof. You can just climb up into the roof cavity directly?

THE WITNESS: No, that’s not the case. You would still need light. You would still need access. You’ve still got the heat problem. So the problems are the same. And with taking fibreglass up there, the – the physical fact that you’ve got to bring the product up and down is a – a more – more – more potential problems of guys falling off roofs and – and wrecking plaster in manholes. When you’re installing cellulose, you’ve got to – you take a hose up to one end, then you just walk the hose back. There’s no movement in the roof when you’re putting batts up there. You physically got to take the batts to the areas that are to be installed. So there’s a tremendous amount of movement when you’re installing a batt material, be it fibreglass wool or polyester. There’s a lot more physical labour involved than there is just getting a – a machine does all the work when you’re doing cellulose.

MR O’DONOVAN: But in terms of the proportion of installations that require roof removal and roof replacement, would you agree that there are significantly lower number of installations involving batts or foil that require the roof to be removed or replaced?

THE WITNESS: The same.


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MR O’DONOVAN: The same?

THE WITNESS: Same.

MR O’DONOVAN: Okay. So your understanding is the practice in the industry is that when someone is installing batts, they remove a roof just as often as they would remove a roof in cellulose?

THE WITNESS: Yes. In my – in our case, definitely. Yes.

MR O’DONOVAN: All right. But in terms of other operators?

THE WITNESS: I don’t know.

MR O’DONOVAN: You don’t know. All right. So then, on the – so on the question of training, as I understood your evidence, was that the first day was concerned with safety.

THE WITNESS: Yes, in-house.

MR O’DONOVAN: In-house.

THE WITNESS: Yes.

MR O’DONOVAN: And then at that point, the person went out under the supervision of someone from there – from your – who had been trained previously.

THE WITNESS: Yes.

MR O’DONOVAN: Okay. So their second day on the job, they could be out at a site.

THE WITNESS: Yes.

MR O’DONOVAN: Up in a roof, under supervision?

THE WITNESS: Possibly.

MR O’DONOVAN: Okay. And you didn’t regard that as an unsafe practice?

THE WITNESS: Absolutely not.

MR O’DONOVAN: No. All right. And you – so then in terms of your evidence about the leading hands in answer to some questions from Mr Bradley, I understood you to say that there were people who were identified as capable of being leading hands within a month of starting.


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THE WITNESS: They could have, yes.

MR O’DONOVAN: Okay. So during the HIP, were there people who were effectively the supervisor on the job who had been installing insulation for only above one month or a little bit more?

THE WITNESS: It has to be more. I can’t think of anybody that would go through only in four weeks.

[10.30 am]MR O’DONOVAN: Okay. Well - - -

THE WITNESS: You wouldn’t – you wouldn’t put that responsibility on the team member if he had only been there a month.

MR O’DONOVAN: Right. So what – during the HIP, to your recollection, what was the shortest period before anyone was leading hand and supervisor on the job?

THE WITNESS: I’m trying to think of that and I – four weeks is – in our industry, is a very, very short period of time.


THE WITNESS: Yes. It would be considerably longer than that. I can think of two guys just at the moment that will probably – on leading their own team quite quickly, probably eight weeks. Yes.

MR O’DONOVAN: Eight weeks.

THE WITNESS: Yes. But both of those were handymen type people.


THE WITNESS: Before they had come to us, they were already doing similar stuff in ceilings and – one guy was an electrician.

MR O’DONOVAN: Okay. All right. So there were people who, to your mind, had sufficient experience - - -

THE WITNESS: Yes.

MR O’DONOVAN: - - - to be made supervisor with previous qualifications or previous industry type experience.

THE WITNESS: Yes.

MR O’DONOVAN: They were able to supervise.


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THE WITNESS: Yes.

MR O’DONOVAN: Now then, just turning to the meeting of the – the meetings that you had with Minister Garrett because you say in your statement that you heard certain things from Minister Garrett. Okay. Now, you recall you attended a number of meetings that Mr Garrett spoke at. Do you remember that?

THE WITNESS: Two. One in Brisbane and one down in Canberra.

MR O’DONOVAN: One down in Canberra. All right. And is it your recollection that the one in Brisbane occurred after the one in Canberra?

THE WITNESS: After.

MR O’DONOVAN: So the one in Canberra was the first one that you went to.

THE WITNESS: Yes.

MR O’DONOVAN: And did you also attend one later in October?

THE WITNESS: Yes.

MR O’DONOVAN: And where was that?

THE WITNESS: I think it was a – a building close to the airport in Canberra.

MR O’DONOVAN: In Canberra. Okay. So you have recollections of being at three separate meetings at which the minister spoke. Is that right?

THE WITNESS: One of the – I – we saw him twice. Saw him in Brisbane and saw him at – at Old Parliament House and I think he hooked up – got hooked up by telephone at one of the other meetings.

MR O'DONOVAN: Okay. All right. So there’s three meetings at which the Minister spoke. Now, given that a long time has passed since you attended those meetings – but sorry, just to be clear. So the meeting in Brisbane was after the meeting in Canberra and what you recall about it is the Minister spoke – was physically present at both.


MR O'DONOVAN: Now, given that that – I mean, I think we’re dealing with a period of about five years ago. I suggest to you it’s possible that you – no, let’s go back a step. Now, you’ve given evidence that what – what the Minister said at the meeting of 20 March was – this is at paragraph 25 of your statement – that:


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The scheme will run for the full term or until the money runs out. You can take my word for that.

Okay. Now, what I want to suggest to you is that you may – given the lapse of time may have confused which meeting the Minister said – said anything to the effect about the running of the scheme. Would you agree that that’s possible?

THE WITNESS: No.

MR O'DONOVAN: You wouldn’t accept that that’s - - -

THE WITNESS: Not – not on that comment.

MR O'DONOVAN: Not on that comment?

THE WITNESS: No.

MR O'DONOVAN: Okay. All right. Now, the way you describe it in your statement, the Minister was gesturing emphatically and you say the words were very clear.

THE WITNESS: Yes. I – I can see him doing it right now. Yes. He’s got a – he’s got a hand three times as big as mine and he was going “You can” - - -

MR O'DONOVAN: All right. So would it be fair to say that anyone who was taking notes in relation to that meeting would have clearly heard the Minister and it would have been clear to them that what the Minister was saying was important.


MR O'DONOVAN: Okay. Now, you’re aware that there’s no reference to any comment like that in the minutes of the meeting.

THE WITNESS: No.

MR O'DONOVAN: All right. Have you met Matt Levey, the Minister’s advisor? Were you ever introduced to him?

THE WITNESS: I don’t remember.

MR O'DONOVAN: Okay. All right. The – so is it – so you haven’t read his statement about what occurred at the meeting of 20 March?

THE WITNESS: No.

MR O'DONOVAN: No. And you’re not aware that he doesn’t record any comments of those – of that kind.


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THE WITNESS: No.

MR O'DONOVAN: Okay. And in light of the fact that it’s not recorded in the formal minutes and it’s not recorded by Mr – sorry, Mr Levey, you’re not prepared to concede that it’s possible that you’re mistaken about the timing of the comment?

THE WITNESS: The – the timing of the comment?

MR O'DONOVAN: As in that there was no comment made on 20 March about the length of time that the scheme would run.

THE WITNESS: On the two occasions that Mr Garrett appeared in front of us, that question was asked both times, especially the first time when I went to Canberra. That was the only question I needed answering.

MR O'DONOVAN: So it remains your evidence that on 20 March those comments were made?

THE WITNESS: Yes.

MR O'DONOVAN: Right. And you don’t accept that it’s possible that you’re just simply mistaken about that?


MR O'DONOVAN: Okay. Now, at that time – let me approach it this way. Now, is it true to say that it’s important that in April you made certain decisions about the expansion of your business. Is that right? And you made an investment in relation to some machinery.

THE WITNESS: Yes.

MR O'DONOVAN: Okay. And in order – and as you presently sit here, are you a member of any association that’s trying to receive compensation from the Commonwealth?

THE WITNESS: I’ve got some lawyers representing me at this time, yes.

MR O'DONOVAN: Okay. So - - -

THE WITNESS: But I don’t know what’s happening with that.

MR O'DONOVAN: Right. But they’re still acting – well, sorry, just to be - - -

THE WITNESS: I’m not paying anybody. You could put it that way.

MR O'DONOVAN: Sorry?


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THE WITNESS: I’m not paying anybody.

MR O'DONOVAN: You’re not paying anybody.

THE WITNESS: To – on my – on my behalf, no.

MR O'DONOVAN: Okay. But no, the question I asked is are you a part of any association that has banded – a group of people who have banded together to seek compensation from the Commonwealth in relation to investments that they made as a consequence of the Home Insulation Program.

THE WITNESS: That’s why I’m here, I thought.

MR O'DONOVAN: If you would just – just answer the question I’ve asked. Are you a member of any association or group of people that has that purpose?

THE WITNESS: I don’t – I don’t know whether I’m a member of group. I – I’m sorry, I don’t know that. I - - -

MR O'DONOVAN: Well, can you describe what you do know about whether or not you have meetings with people or whether you’ve met with anyone for the purpose of - - -

THE WITNESS: I’ve – I’ve met with lawyers here.

MR O'DONOVAN: Yes.

THE WITNESS: Yes.

MR O'DONOVAN: And was that the first time and was it only in the context of the Royal Commission?

THE WITNESS: No, no. Previous to this, to bring a Royal Commission, I understood.

MR O'DONOVAN: Right. Okay.

THE WITNESS: To be part of this. Yes.

MR O'DONOVAN: Okay. So going back to the questions about – now, do you understand that your case for compensation and particularly in relation to the investments you made in April, is improved if you can establish the comments attributed to the Minister were made in March? Do you understand that?

THE WITNESS: That’s the reason we made the investment - - -

MR O'DONOVAN: Okay.


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THE WITNESS: - - - from the Minister’s comments.

MR O'DONOVAN: But if – can you please answer my question. I understand that you say that’s the reason that you made it. Do you also understand that your prospects of obtaining compensation depend to a degree on the Minister having made those comments before you making the investment in April?

THE WITNESS: I don’t know that.

MR O'DONOVAN: You don’t know that.

THE WITNESS: I’m sorry, I don’t know.

MR O'DONOVAN: No one has explained that to you previously?

THE WITNESS: No.

MR O'DONOVAN: No.

THE WITNESS: I never thought of it like that.

MR O'DONOVAN: All right. Now, when you attended the meeting in March, what shape was the program in at that point in terms of finalisation? Do you have any recollection of - - -

THE WITNESS: In March ’09.

MR O'DONOVAN: March of 2009.

THE WITNESS: It was chaotic. None of us sort of really knew what was going on. We had been given – chaotic, yes.

MR O'DONOVAN: Chaotic. All right. Do you remember that, at that stage, you were operating under what was described as the first or the early guidelines phase of the program?

THE WITNESS: Yes.

MR O'DONOVAN: Okay. And you understood that that phase was not going to last forever?

THE WITNESS: Yes. It was – things were going to change. We were told it would change into a normal run. It was like a trial.

MR O'DONOVAN: Yes. All right. And that that was going to change on 1 July.

THE WITNESS: Yes.


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MR O'DONOVAN: Okay. So you understood that?

THE WITNESS: Yes.

MR O'DONOVAN: Okay. And is it the case that the way in which it was going to change was, at that point, unclear?

THE WITNESS: At that meeting, everything was unclear. I – no one knew what was happening.

MR O'DONOVAN: Okay. And did you understand that at least one of the options on the table was that consumers would ring a 1800 number and the job – and a broker or a large company would perform the installation task for them?

THE WITNESS: No.

MR O'DONOVAN: You didn’t understand that?

THE WITNESS: No one told me that.

MR O'DONOVAN: No one told you that.

THE WITNESS: No.

MR O'DONOVAN: All right. Did you discuss the matter with Mr Herbert?

THE WITNESS: No.

MR O'DONOVAN: Now - - -

THE WITNESS: I – I don’t believe – I didn’t – didn’t discuss that particular matter, I don’t believe.

MR O'DONOVAN: Okay. So let’s be clear. So Mr Herbert is the ACIMA - - -

THE WITNESS: Yes.

MR O'DONOVAN: - - - representative - - -

THE WITNESS: Yes.

MR O'DONOVAN: - - - and you’re a member of ACIMA.


MR O'DONOVAN: And he’s there to represent your interests.


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THE WITNESS: On a lot of matters, yes.

MR O'DONOVAN: Yes. All right. And he goes to those meetings with a particular agenda?

THE WITNESS: He goes to the meetings, yes.

MR O'DONOVAN: Yes, but to represent the interests of ACIMA members.

THE WITNESS: Of the association, yes.

MR O'DONOVAN: Yes. And the – and to an extent, he needs to know from you what your issues are.

THE WITNESS: Yes.

MR O'DONOVAN: Okay. All right. And the – so when we read the submissions that Mr Herbert puts in, presumably he had spoken to his members about what their concerns are about the program?

THE WITNESS: I would say so, yes. But we – yes.

MR O'DONOVAN: Okay. And one of the submissions that was put in by Mr Herbert in March complains about the government’s proposal to have a 1800 number where people ring up and jobs are allocated.

THE WITNESS: Okay.

MR O'DONOVAN: But you were not aware of that until now?

THE WITNESS: I don’t recall that at all.

MR O'DONOVAN: Okay. So at the point at which you attend this meeting in March, the shape of the program is uncertain. You’ve already said it was - - -

THE WITNESS: Chaotic.

MR O'DONOVAN: Everything was unclear.

THE WITNESS: I didn’t think uncertain. I was told it was going to – well, I was under the impression it was going to go through.

MR O'DONOVAN: Well - - -

THE WITNESS: It was going to happen but things were going to change a little. But that was only the management of it, you know.


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MR O'DONOVAN: Well, your evidence was “everything is unclear”.

THE WITNESS: Yes. That’s true.

MR O'DONOVAN: You agree with that proposition? Everything was unclear.

THE WITNESS: About the management of it.

MR O'DONOVAN: Yes.

THE WITNESS: Yes.

MR O'DONOVAN: Okay. Which – so you would agree that one of the possibilities was that your company could be excluded entirely from participation in the program by the inclusion of a large company, that the Commonwealth deals directly with a large company instead of market participants?

THE WITNESS: No, I don’t know that.

MR O'DONOVAN: You don’t know that.

THE WITNESS: No.

MR O'DONOVAN: All right. But you never clarified that.

THE WITNESS: I never clarified it?

MR O'DONOVAN: Yes.

THE WITNESS: Who to?

MR O’DONOVAN: So as I understand your state of mind, everything about the program was unclear in March.

THE WITNESS: About the management of it, yes.


THE WITNESS: Okay.

MR O’DONOVAN: And in April you made investments.

THE WITNESS: Yes.

MR O’DONOVAN: And at that point you could not have known whether you were even eligible to participate in the program post 1 July.


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THE WITNESS: Possibly, yes.

COMMISSIONER: Mr O’Donovan, I hesitate to interrupt but it sounds to me like you’re conducting another case, and it sounds to me like you’re probably not addressing the term of – any of the terms of reference. I mean, this witness I think is here to give evidence about the effects on pre-existing businesses, and people who asked him questions asked him questions in relation to safety matters. But it sounds to me like you’re pursuing a defence of another action. But I’ve made my observation; you proceed.

MR O’DONOVAN: No, no, I – I mean, I thank you for the observation. I mean, these matters traversed in the statements with – and one would wonder, I guess, why they’re traversed in statements, if not for the purpose of laying the groundwork for a civil litigation.

COMMISSIONER: Well, I didn’t get that impression, but perhaps I’m naïve. I got the impression it was relevant to that term of reference, what effect does this have on the existing industry.


COMMISSIONER: But, anyway, carry on.

MR O’DONOVAN: No, no, I – I suppose what I was going to – I just wanted to test with you whether or not you were satisfied that that material was – that early material was relevant to the impact we – clearly the later material is. And I thought that one way of dealing with it, to avoid these kinds of questions having to be asked, was to simply remove the material as irrelevant. But if you still feel it is relevant, then perhaps we – I will go away and review how we’re approaching this – approaching this aspect of the matter, but for the time being anyway I’m pleased to leave that subject at this point.

COMMISSIONER: All right.

MR O’DONOVAN: Now, in relation to the – so your business continued to expand through March, April, May. And I suppose in early June do you recall the details if the details of the program then became clear for the 1 July launch?

THE WITNESS: I don’t recall the time, no, but the office – the office handled most of that.

MR O’DONOVAN: Right, okay. Now, the – at the – when the program I suppose began in earnest – well, surely you remember the point at which you stopped having to receive payment from the householder and a rebate from the Department of the Environment to getting just paid directly from Medicare. Do you remember that change?


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THE WITNESS: I remember the change. I don’t know the time but I remember it happening.

MR O’DONOVAN: Okay. Do you also remember that around about that time that you were approached by Mr Herbert to assist with the launch of the program for the Minister?

THE WITNESS: No.

MR O’DONOVAN: No. Sorry, you will need to say your answer for the transcript.

THE WITNESS: No, no. How do you mean, the launch of the program? The launch of the HIP program?

MR O’DONOVAN: Yes, the new – in its new form where – with the Medicare claims?

THE WITNESS: I don’t understand how you’ve asked the question, I’m sorry.

MR O’DONOVAN: Perhaps I should provide you with some more details. And perhaps if this document might assist. It’s AGS.002.010.1570. Okay, if we can just take – perhaps go down to the bottom of the email. Yes. Okay. Now, this is – now, we might start there, and it says – now, as I understand it, this is an email from you to Kevin Herbert and it says – sent around June 2009, the end of June 2009:

I’ve arranged a job in Brisbane at 33 Marshall Lane, Kenmore. We were installing insulation in the ceiling during the visit. 10 ..... agents. What else do you think? Let me know time and any other feedback.

Does that prompt any recollection?

THE WITNESS: No.

MR O’DONOVAN: All right. Well, perhaps let’s move up a little more to the email starting:

Greg, you get first chop at this great, once only media opportunity.

So again we’re in early June. So keep going. Okay. Now, it’s stopped there. So this is Monday, the 22nd, in 2009:

Greg, get first chop at this great once only media opportunity. Can you nominate someone to fill the bill? Read the bits I’ve highlighted in blue below and let me have your suggestions by 9.30 tomorrow.

And it seems to be a launch by the Government of phase 2 of the program, and they’re trying to get some – a media opportunity to announce the launch, and get


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some assistance from industry to provide to the media file footage of some cellulose installation being installed.

THE WITNESS: Okay.

MR O’DONOVAN: Do you have any recollection of that?

THE WITNESS: No, but the office might have handled all that, too.

MR O’DONOVAN: Okay. Notwithstanding that there are some emails which you’ve signed?

THE WITNESS: Yes, I – I couldn’t use the computer in those days anyway so I’m sure – at that time I’m sure the office has sent the email. And if I – I don’t remember directing them to do that but - - -


THE WITNESS: Our office guy would have been doing most of what you’re just talking about.

MR O’DONOVAN: All right. Now, you seem to suggest in your statement that, in your assessment, that the representatives from the Department of the Environment at the meeting of 20 March didn’t understand the technical aspects of what was going on. Is that your assessment?

THE WITNESS: That’s my impression, yes.

MR O’DONOVAN: Okay. But at that point in time had you read the early – the first version of the early installation guidelines?

THE WITNESS: Of the booklet?

MR O’DONOVAN: Well, I think – well, they’re called – they’re described as guidelines under which you were going to be installing insulation, and set out the requirements to participate in the program.

THE WITNESS: Yes.

MR O’DONOVAN: Okay. Now, and you’re aware that – and, as I understand it, one of the criticisms in your statement is that the staff didn’t appear to understand R values.

THE WITNESS: Yes.

MR O’DONOVAN: Okay. And are you aware that during the course of February to March, that a second version of the guidelines was released?


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THE WITNESS: No.

MR O’DONOVAN: So you never saw the second version of the guidelines?

THE WITNESS: The guidelines or the booklet? Because there was a booklet that was brought out.

MR O’DONOVAN: And there was – and to your recollection, there was only one?

MR WINDSOR: I stand to object because there seems to be confusion here.

COMMISSIONER: Confusion, yes.

MR WINDSOR: We’re talking about February, March of 2009, and I understand my learned friend’s question is directed to guidelines issued in that date, whereas the witness is talking about a booklet. I think that needs clarification.

COMMISSIONER: Yes, I wondered if he was talking about the CPSISC.

MR WINDSOR: That’s right. Yes, I think so.

COMMISSIONER: Yes, if you could clarify it. It’s probably best to show him. Can we show him the guidelines?

THE WITNESS: Yes, I don’t recall the guidelines.

COMMISSIONER: Mr Horton, you haven’t got a reference to the guidelines there?

MR HORTON: Yes, your Honour. It depends whether the first guidelines or the second guidelines are called for.

COMMISSIONER: Well, either for a start.

MR HORTON: Yes.

MR KEIM: Commissioner, I’ve got a reference to AGS.002.008.2019, Homeowner Insulation Program, early installation guidelines, version 1.

COMMISSIONER: Thanks, Mr Keim. Thanks.

MR O'DONOVAN: Okay. So have you ever seen that document, the Energy Efficient Homes Package Early Installation Guidelines? Just scroll through, and just ask the operator to stop anytime you want to - - -

THE WITNESS: Just stop on the first page. That will be all right. Yes.

MR O'DONOVAN: Yes, you’ve seen that before?


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THE WITNESS: Yes.

MR O'DONOVAN: Okay. And do you - - -

THE WITNESS: It’s been a long time ago I’ve seen it.

MR O'DONOVAN: I’m sure that’s right. And do you recall that that document specified the R ratings which products had to have in order to be eligible for inclusion in the scheme?

THE WITNESS: I don’t recall whether it was that document but if I’ve read it all the way through I – it would refresh me but - - -

MR O'DONOVAN: Okay. But you knew that there – that initially the products had to have a certain R rating?


MR O'DONOVAN: Okay. And that those – and do you recall that the guidelines were subsequently changed to allow whole systems to – I suppose, total system R ratings?

THE WITNESS: Yes.

MR O'DONOVAN: Okay. And that was a change that was made by the Department of the Environment?

THE WITNESS: Yes.

MR O'DONOVAN: Okay. So would you agree that that demonstrates that the Department of the Environment at least, at that level, understood relevant aspects of the R ratings?

THE WITNESS: No.

MR O'DONOVAN: No?

THE WITNESS: Somebody did.

MR O'DONOVAN: Somebody did. All right. And – so you wouldn’t accept the criticisms of them – well, you understood that the process the Department was going through was to consult with industry in order to get information about what should be in the guidelines. You understood that was a process they engaged in?

THE WITNESS: I – I thought that was the process.


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MR O'DONOVAN: Okay. And it would appear from these outward changes that were made that that consultation was meaningful?

THE WITNESS: No.

MR O'DONOVAN: You wouldn’t agree that that was - - -

THE WITNESS: No.

MR O'DONOVAN: No. So the addition of the whole of roof system R rating, you don’t accept that that - - -

THE WITNESS: I disagreed with that anyway.

MR O'DONOVAN: Right.

THE WITNESS: Whoever did that didn’t think the same as I did.

MR O'DONOVAN: Okay. But notwithstanding that you disagreed with it, doesn’t that suggest to you that the officers within the Department of Environment were listening to industry, taking on their knowledge and adapting the program in response to what industry was telling them?

THE WITNESS: Not at the meetings I was at, no.

MR O'DONOVAN: Those are my questions.

COMMISSIONER: Thank you. Mr - - -

<EXAMINATION BY MR WINDSOR [10.55 am]

MR WINDSOR: Excuse me, Commissioner. ..... a few questions. The Commissioner asked you some questions in relation to – which resulted in you giving an answer concerning observation of electrical conduits and the like. Were there occasions when you were able to call upon an electrician to go into a worksite during the HIP?

THE WITNESS: All our guys had an electrician number in – quick call in their phones.

MR WINDSOR: All right. And was that electrician available at short notice to attend on jobs at your request or the request of your installers?

THE WITNESS: Yes. And if he wasn’t, we had a backup.

8.4.14 P-2265 G. RASHLEIGH XN©Commonwealth of Australia MR WINDSOR

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MR WINDSOR: All right. And able to attend expeditiously, in the sense that whilst the fellows were on the job - - -

THE WITNESS: Yes.

MR WINDSOR: - - - to do that – to do the work and do the electrical inspection and/or work required?

THE WITNESS: Yes.

MR WINDSOR: Thank you. You were asked some questions about paragraph 25 of your statement. Could you just go to that please?

THE WITNESS: Yes.

MR WINDSOR: You said in response to some of the questions that you were asked in relation to paragraph 25:

That was the only question I needing answering.

Do you recall giving that evidence?

THE WITNESS: Yes.

MR WINDSOR: What did you mean by that, Mr Rashleigh?

THE WITNESS: Well, Mr Garrett was the Minister at the time and he was the one who was going to tell us whether we could ramp up or not, increase our production. And hearing it from him, especially face-to-face, was sufficient for me to say we need to get going to catch up this program.

MR WINDSOR: Thank you. Did your organization use metal staples?

THE WITNESS: No.

MR WINDSOR: And it didn’t use foil – rollout foil as well?

THE WITNESS: No.

MR WINDSOR: Thank you. You appreciate that during various periods of time, the amount of money available for the – from the federal government in respect of jobs changed from $1600 to $1200 - - -

THE WITNESS: Yes.


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MR WINDSOR: - - - per job. Was your quoting system based on those amounts being paid or was it based on your assessment of the costs and profit margins for doing particular jobs?

THE WITNESS: We priced by the square metre.

MR WINDSOR: Thank you.

THE WITNESS: So a larger house got charged more and a smaller house got charged less. And if there was an element of problems in the roof or challenges on the roof area, it was a time thing, it was adjusted accordingly.

MR WINDSOR: Thank you. Could I go to paragraph 34 of your statement, please. Have you read that?

THE WITNESS: Yes.

MR WINDSOR: You speak there, towards the end of the statement, about a brand or reputation to maintain. What was it that you were meaning to - - -

THE WITNESS: All Seasons started 30 years previous to HIP and over that period we had invested a lot of time, effort and money into trying to be the biggest and best around. We pretty much achieved that over that period of time and the fact that we had a number of agents working directly under our name, it was to keep an eye on them as well. They – any problems that they had reflected straight back on us as a manufacturer so it was very important to us just – have minimal problems.

MR WINDSOR: Thank you. Could you please go to paragraph 39 of your statement. The last three lines in paragraph 39, you make reference to a percentage. Do you see that?

THE WITNESS: Make reference to?

MR WINDSOR: The percentage.

THE WITNESS: Yes.

MR WINDSOR: The 30 per cent.

THE WITNESS: Yes.

MR WINDSOR: What was the basis for that information or bases. That is, where did you get that information from?

THE WITNESS: Over our years, around about a third of every house had older wiring in it so it needed a little extra. The boys knew to – what to look for and how to check that.


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MR WINDSOR: Thank you. Could you go to paragraph 47, please. Have you read that?

[11.00 am]THE WITNESS: Yes.

MR WINDSOR: You refer “it” at the commencement of paragraph 47. What were you meaning to refer to when using that word?

THE WITNESS: The new mill.

MR WINDSOR: Thank you. Could I go to paragraph 59, please. You’ve read that?

THE WITNESS: Yes.

MR WINDSOR: You make reference to the book being copied from or based on an overseas book. Who told you that?

THE WITNESS: I can’t remember – it came up in conversation, I think as an ACIMA member.

MR WINDSOR: And from what country or countries did you understand the - - -

THE WITNESS: The UK.

MR WINDSOR: Thank you very much. Could I ask you to go to paragraph 60, then. You make reference in line 4 to “supply and I would receive”. I just want to clarify the word “would”. Did you personally receive responses?

THE WITNESS: We would receive emails on a regular basis and they all were similar, all the same sort of email – do you want fiberglass, do you want insulation – and we would answer – for the first little while we answered them “Yes, whatever you’ve got” and they would answer back and say, “We’ve got whatever you like and we can put whatever R rating on the packet you wanted”.

MR WINDSOR: You’ve made reference earlier on today to getting product from Chile or Argentina.

THE WITNESS: Yes.

MR WINDSOR: What was that product you needed to get or you acquired from those countries?

THE WITNESS: The additive that goes into paper to make cellulose. It’s borax and boric acid. There are – it’s a mineral – they’re both mineral salts. They just look like salt or sugar, and they’re blended into the paper to stop it from burning.


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MR WINDSOR: And you understand that those countries are two of the few countries that actually had this particular product. Is that right?


MR WINDSOR: And has it always been the case that you source that material from those countries?

THE WITNESS: We source it from an Australian company but they get it from – most of the packets come with “Chile” or “Argentina” written on it.

MR WINDSOR: Thank you very much. You understand that following the early termination of the scheme, there were many houses in Australia which had not been insulated as part of the scheme?

THE WITNESS: Yes.

MR WINDSOR: That, in one sense, leaves an untapped part of the market still there.

THE WITNESS: Yes.

MR WINDSOR: What has been your experience so far as attempting to tap into the uninsulated domestic refit market?

THE WITNESS: “Insulation” is a dirty word. Is – basically, if no one wants to know it, they’re not sure of what material they’re getting. There’s just no work there. It – you can’t generate it – couldn’t generate it. After the scheme, it stopped.

MR WINDSOR: Could I ask you to go to paragraph 75. You make reference there to some waste disposal. Do you see that?

THE WITNESS: Yes.

MR WINDSOR: First of all, in response to a question from the commissioner, is this Commission to understand that it was 15 per cent of the cost value of the stock which you received by way of payment from the Commonwealth Government?

THE WITNESS: Yes.

MR WINDSOR: All right. Now, this $35,000 for waste disposal, that was waste disposal of what products?

THE WITNESS: Mostly cellulose.

MR WINDSOR: And that was paid by a contractor?


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THE WITNESS: Yes.

MR WINDSOR: And then subsequently, you paid the contractor for the waste disposal. Is that right?

THE WITNESS: Yes.

MR WINDSOR: 76 and thereabouts, you make reference to the losses suffered by your company. What about your own personal life, Mr Rashleigh, how has that been affected and perhaps also your wife who I understand was closely involved in the company?

THE WITNESS: Yes. Well – well, our long term plan just wasn’t. It stopped straightaway. If the – if the – if the program had gone full length, it – it would have been no material, no stock, no – nothing on hand. We would have – it would have – the factory would have been empty and then insulation, of course, would have been finished and we would go and do another venture. That all finished. We – we’ve got bills now. We should have had bills. You didn’t have a business to sell. You couldn’t give anything away. It was just – it changed everything.

MR WINDSOR: With yourself personally?

THE WITNESS: It’s not how it’s supposed to be.

MR WINDSOR: Could I ask you to go to – I’m nearly finished, Commissioner – ACI.002.001.0184. You were asked by Mr Horton – the first barrister that asked you questions – Mr Rashleigh, about the meeting of 8 May. Do you remember that series of questions?

THE WITNESS: Yes.

MR WINDSOR: Could I ask you to go to paragraph numbered 4 on that document. Does that assist – and that is the content of paragraph 4 – assist you with your further recollection of that meeting?

THE WITNESS: Yes.

MR WINDSOR: What further assistance does it provide you with?

THE WITNESS: Well, met a lot of people at the meeting which I’m – we refer to as “suits” and they – they’ve never, you know – they’ve never handled insulation. They’ve never done anything. These sort of people were making decisions on how to make the scheme better. It just seemed like what – what I was bringing up and – and Matthew Hannam – we were the only two people in the room that had ever done it. No one was listening to us, or that’s the impression I got.

MR WINDSOR: Thank you, Commissioner.


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COMMISSIONER: Thank you. Mr Horton?

MR HORTON: No questions, Commissioner. Might Mr Rashleigh be excused?

COMMISSIONER: Yes. Mr Rashleigh, thank you very much for coming and giving your time to us.


COMMISSIONER: It’s appreciated. We will adjourn now for morning tea.

<THE WITNESS WITHDREW [11.07 am]

ADJOURNED [11.07 am]

RESUMED [11.26 am]

<MARGARET COALDRAKE, CONTINUING

<EXAMINATION BY MR KEIM

COMMISSIONER: Mr Keim, you’re examining Ms Coaldrake.

MR KEIM: Thank you, Commissioner.

Ms Coaldrake, I wanted to ask you a question about a document you had been taken to. It’s exhibit NN to your statement, document COA.002.001.0301. It’s that series of emails where there was some sort of angst in a meeting, and there was some sort of apology to you about that. But I just wanted to ask you with regard to Mr Hughes’ email at the bottom of that first page. If you could just read the paragraphs where he starts:

I would like to elaborate on the reasons for the workshop.

Particularly starting in the fourth line:

However, it has been clear that whenever I ask for information –

now, this is not a document that came to you, but I just want to ask you about this phenomenon when you’ve read it.

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THE WITNESS: Yes, I’ve read that.

MR KEIM: And what Mr Hughes seems to be asking about is the inability to have information recorded in an easily accessible way, sort of loss of corporate knowledge without losing the actual people who have the corporate knowledge. Presumably, in your role as a consultant, you would have to had to seek information from various employees of the Department of Environment, is that correct?

THE WITNESS: Yes.

MR KEIM: Did you also observe this type of problem, that you might have to go back to the beginning in finding out information?

THE WITNESS: Not in the risk area that I was dealing with.

MR KEIM: Yes.

THE WITNESS: I was dealing only with a couple of people on a sort of regular basis, and the systems were quite well set up and they – they were the ones dealing with the rest of the program in terms of what was happening.

MR KEIM: Yes.

THE WITNESS: So if there was an issue, they would have had that issue, not me.

MR KEIM: Okay. And, I mean, you did do marginally different roles as well. But in any of the other roles that you carried out did you have that problem? I mean, you produced that review.

THE WITNESS: I don’t recall a particular problem. I remember having to ask a couple of times for documents that weren’t actually documents that I needed for my work but I had heard about it, the PCG, and I wanted to see.

MR KEIM: Yes.

THE WITNESS: And that may have been because they weren’t cleared for me to see or – I don’t know, but that’s the only recollection I have.

MR KEIM: Yes. Now, I wanted to ask you a question about – you will recall that the reference to the risk of injury to installers, having been in the documents which documented the risk workshop that took place on 26 March.

THE WITNESS: The 23rd.

MR KEIM: 23 March, was it? And then it was established, I think through questions by my learned friend Mr Wilson, that that was missing – that was no longer in there in the first risk register that was produced and dated 9 April.


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THE WITNESS: Correct.

MR KEIM: And I think your discussion – your answers to those questions, as to who was responsible for that and why it happened, was that you couldn’t recall it. Is that correct?

THE WITNESS: That was my answer yesterday. And, in fact, overnight my lawyer and I have tracked through the documents, and we will cover that later.

MR KEIM: And it remains to be answered.

THE WITNESS: Well, we have some further information on that in the - - -

MR KEIM: Okay. Well, can you share it with me now?

THE WITNESS: It’s quite complex. We found a series of emails where the documents were going backwards and forwards into the department, one of which was an email from me on – I think on 26 March which still had installer injury in it.

MR KEIM: Yes.

THE WITNESS: It was a Word document. I sent it to the department, and there’s an email back the next morning, on the morning of the 27th when you recall there are some meetings.

MR KEIM: Yes.

THE WITNESS: It comes back as an Excel document with changes made by the department, and that’s not in there. So we’ve pinpointed at the point at which it falls out and all the documents around that.

MR KEIM: Okay.

COMMISSIONER: That was on 27 March it fell - - -


MR KEIM: I will ask you – the relevance of these questions may be slightly diminished, but it might be worthwhile to ask you anyway. I want you to have a look at a series of emails which are AGS.002.029.0929, and you were taken to this document as well. This relates to a meeting on 3 April to – a technical advisory group meeting, you can see that from Mr Kimber’s email in the middle of the page, Tuesday, 31 March.

THE WITNESS: Yes.


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MR KEIM: And then if we go up to – well, just, firstly, you can see that the participants in that meeting, or the people to whom that is sent is a Mr Ashe, Mr Cox Smith, Mr Marker and Mr Fricker and a Mr Mark Jones, all of whom are either consultants or members of industry groups; and then it’s copied to a number of department people. Do you see that?

THE WITNESS: Yes, I see it.

MR KEIM: And then the results of those discussions are in the email above that, and there’s a whole list of safety issues including the second dot point to which you were taken I think:

Highly likely it would have catastrophic consequence, death or serious injury.

Do you see the second dot point under the heading Safety Issues – sorry, above. Yes, keep on going up. Do you see the second dot point under Safety Issues?

THE WITNESS: Yes, I see that.

MR KEIM: Okay. Now, this, 3 April is after that exchange of emails that you just told the Commissioner about, between you and the Department of the Environment.

THE WITNESS: Yes.

MR KEIM: And my question is whether, in terms of – when did you actually leave? It was 9 April that you left, wasn’t it?

THE WITNESS: I think I flew out on the 10th but, yes.

MR KEIM: Yes, yes. So in that period leading up to the presentation of the risk register on 9 April, did you have any conversations with any of the people who are the addresses of that last email? That is Mr Keefe - - -

THE WITNESS: No, I’ve never heard of any of them, and I didn’t see this document.

MR KEIM: Ms Kaminski?

THE WITNESS: I would have been dealing with Ms Kaminiski, not the – you mentioned the addresses. No, so - - -

MR KEIM: Well, just, sorry, if we can go up. It’s this email. Just stop there for a moment. You can see those same outside people - - -

THE WITNESS: Yes.


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MR KEIM: - - - listed as participants in the meeting, or at least as members of the technical advisory group so, presumably, they were at the meeting. But then if we look at the addressees of this email, you’ve got Mr Keefe, Ms Kaminski, Ms Spence.

THE WITNESS: So - - -

MR KEIM: And then Mr Kimber, himself, who I think is the author of the email. Did you have any discussions with them between 3 April and 9 April as part of your work in preparing – finalising the risk register?

THE WITNESS: I can’t remember the exact details but I would have been dealing with Sascha Kaminski, who I think replaced Juliana Marconi.

MR KEIM: Yes.

THE WITNESS: At around that time. I don’t know the exact date. So I would have been dealing with her. I don’t recall James Spence.

MR KEIM: Yes.

THE WITNESS: And I may have met with Mr Keefe, but I – we didn’t meet on a regular basis so I can’t recall – it was – it may have been in meetings with other people there. I can’t recall exact meetings.

MR KEIM: So none of those people – I think your evidence to the Commission was in answer to questions by my learned friend, Mr Windsor, was that you haven’t heard of these guys, Marker, Fricker, Cox, Smith and others. Is that right?

THE WITNESS: Correct. Correct.

MR KEIM: Yes. But in terms of – you’re working with Mr Kaminski, really, on a day to day basis?

THE WITNESS: Yes.

MR KEIM: Okay. And none of Mr Keefe, Ms Kaminski or Ms Spence – none of those raised with you any of the safety issues that the technical advisory group had obviously raised?

THE WITNESS: Not to my recollection.

MR KEIM: Okay. And, I mean, the – I suppose just to make sure you understand that question, what I’m suggesting is that somebody who received that email might have thought, “Well, I wonder if Margaret knows about those sorts of issues. I will just flick the email to her or I will tell her about those safety issues.” Nothing like that happened?


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THE WITNESS: So it was not sent to me. I don’t – I don’t think I saw it and I imagine that at that stage where the risk register and management plan was already in draft and they were seeing it on a regular basis – that is, it’s going backwards and forwards for them to finalise the content in a way that matched their understanding, that they would have – they should have been putting that in themselves.

MR KEIM: And they - - -

THE WITNESS: They are the ones who were in – in charge of the risk assessment. I was given the process so I would expect that they would be feeding that in.

MR KEIM: So certainly no one asked you the “what about this” question in terms of the safety issues?

THE WITNESS: I don’t recall that discussion at all.

MR KEIM: Okay. Thank you, Commissioner. Thank you, Ms Coaldrake.

COMMISSIONER: Thank you. Are you ready to go, Mr Barrow?

<EXAMINATION BY MR BARROW [11.38 am]

MR BARROW: Thank you. I just wanted to ask you initially about your experience prior to becoming involved in this program. Had you had any experience in a program of the magnitude of the Home Insulation Scheme?

THE WITNESS: In “magnitude”, do you mean length, size, dollars – all of the above?

MR BARROW: Size, complexity, dollars.

THE WITNESS: Yes. I was an assistant director at the – it’s not relevant at all, but the Powerhouse Museum in Sydney and we were running all the exhibitions in the lead-up to the opening of the Powerhouse. So a very large program. A lot – 400 staff. I’ve been acting director there where we had a short timeframe to deliver a high profile product. Obviously, a very different product. I had also been a senior executive in the National Museum of Australia as a statutory officer for four years, so I was familiar with large programs, had been running projects and programs through most of my career.

MR BARROW: This particular program is very different to those two example you’ve given. Would you agree?

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THE WITNESS: In – in the sense of the subject matter. But in the sense of project management, risk management requirement, political profile, media profile, there are a lot of similarities.

MR BARROW: I just wanted to ask you about annexure B to your statement which is AGS.002.023.1012. You’ve got a hard copy there, have you? It doesn’t matter. I think it will come up on the screen.

THE WITNESS: Sorry - - -

MR BARROW: Yes, it’s this document. It’s just point 2 of the service requirements. This was the document that you addressed when you were submitting a quote on behalf of Minter Ellison.


MR BARROW: I just wanted to ask you about point 2 which says:

Elicitation of the risks from the insulation teams that may not yet be fully articulated or written down and documented.

What did you understand your role to be in relation to that particular requirement?

THE WITNESS: That particular one. That’s why I ran the risk identification workshop. So it’s about setting up – making sure there’s an understanding on the part of a team of what risk is and how they should be identifying it and then getting them to identify them and rate them. So that’s – that workshop which I always run at the beginning of an exercise of this nature is about getting as many of the client team members into the room and drawing from them what they know.

MR BARROW: So you’re referring to the meeting of 23 March?


MR BARROW: Did you have any part in selecting the participants who came to that meeting?

THE WITNESS: I would have at the project initiation meeting which was on 16 March. There would have been a – an agenda and there was a consultation strategy. I can’t recall whether we discussed that at the meeting or whether I sent a – probably – usually I would take a draft consultation strategy to that project initiation meeting and discuss it with the project manager and the steering committee for the project and that would include, “We’re going to have this workshop on this date. Let’s confirm the date. Let’s confirm who’s going to that.”

MR BARROW: So in this instance, do you recall whether you had any part to play in selecting the people that came?


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THE WITNESS: I would have certainly discussed the attendance at that meeting – at that meeting on 16 March, but I would have to look at the documents to remember whether I – in the stakeholder consultation strategy, whether I suggested having anybody outside the immediate team.

MR BARROW: You said, I think, earlier or yesterday that you have no experience with occupational health and safety.

THE WITNESS: I think I said I wasn’t a – a WH&S inspector. I’ve done a lot of work in statutory compliance and advising clients on what programs they need in place to meet their obligations, and a lot of work in governance and risk, so I’m very aware of the WH&S compliance requirements and I actually identified trip risks here as I walked in, so I do have that experience but I .....

MR BARROW: I understood – and correct me if I’m mistaken, but I understood you weren’t holding yourself out as an expert on OH&S?

THE WITNESS: No, not at all. And I wouldn’t do that.

MR BARROW: And I think you also said you had no experience in insulation industry.


MR BARROW: The people that came to the consultation on 23 March were members of the department.


MR BARROW: And were you aware whether anybody who came to the meeting had either expertise in OH&S or in the insulation industry?

THE WITNESS: No. I assumed – well, I’m sure they told me that they were having meetings with industry and that would be the way that that expertise would feed into the process.

MR BARROW: You said that occasions, you would initiate contact with external stakeholders but you didn’t in this case.


MR BARROW: Why didn’t you?

THE WITNESS: I – I imagine, although I would have to go back and look at the – the notes and things, but the – the timeframe was so tight. Normally, we would have a project initiation meeting – in this case, on 16 March – and if you want external stakeholders in an identification workshop, either the same one or a separate one, it


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would take three to four weeks to organise. The whole project had to be finished in early-April so there – there – I imagine that would be why that happened.

MR BARROW: Did you have access – I know you weren’t engaged in this task at the time of the first industry consultation which I think was 18 February.


MR BARROW: But did you have access to any of the document from that meeting or subsequent meetings?

THE WITNESS: Not that I recall. I – not to that meeting. I – I imagine that I – it would have been in the PCG meetings later when – but I would have seen some notes of those meetings.

MR BARROW: But that postdates 9 April, doesn’t it?

THE WITNESS: But that was – yes, that’s right. That’s right.

MR BARROW: And I’m really just focused on that period.

THE WITNESS: Yes, I – I don’t recall seeing it.

MR BARROW: When you engaged in this risk identification process with those people that came to this meeting, you were asking – is this right? You were asking that group who had perhaps no experience in the industry and no expertise in OH&S to identify the risks?

THE WITNESS: Correct. But I – as I said, they had been talking to industry so I expected that they would have that information at their fingertips.

MR BARROW: Did you pose as a – or did you consider posing as a question for the group, “How might we better inform ourselves of risk given that the program is going to be targeting a large group of people who are under-skilled who are going to be entering into the workforce”?

THE WITNESS: They considered that in the process. I mean, the question to the group was: “What risks might occur to interfere with you achieving your objectives?” So it wasn’t always turned that way and after that, I leave it very open, especially where people don’t have a lot of experience in identifying risk, they tend to have trouble distinguishing risks and sources and consequences, and I never worry too much about that because that hinders people’s expressing the things that are worrying them. So I will say, you know, “What keeps you awake at night?” “What will stop you achieving what you’re trying to do?” “What may happen?” “What – what do you not understand?” “What’s uncertain?” All of those sorts of questions.


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MR BARROW: Yes. But I guess the issue that I’m just you to consider is given that the group and yourself possibly lacked any real understanding of the nuances of the industry, did you turn your mind to asking the group, “Well, how could we better inform ourselves”? THE WITNESS: I – I assumed – well, no, I would expect that the people in the room would have the knowledge, they wouldn’t be working on that program otherwise and if they didn’t themselves have that knowledge that they would have access, as I understood they did, to industry to give them that knowledge.

MR BARROW: See, one of the issues that I think appeared in the risk register was political risk. Something that seems to have been a feature of the evidence of a number of the witnesses is public servants - - -

THE WITNESS: Yes.

MR BARROW: - - - did not apprehend the problem that was going to emerge of non-compliance by companies engaged in the practice. That was one thing that has emerged from some of the evidence.

THE WITNESS: I would have to go back to that initial outcomes of the workshop to – we certainly – they certainly dealt with the problems of poor quality installation and to early entrants and all of those sorts of things. We would have to - - -

MR BARROW: What I wanted to ask you was this: Department people who have given evidence have said, “Well, we didn’t anticipate this, this problem”.

THE WITNESS: I can’t - - -

MR BARROW: If you could just wait for a moment.

THE WITNESS: I’m sorry.

MR BARROW: Private – people involved in the industry have given evidence that they foresaw these sorts of risks and problems emerging from an early point. And so my question is looking back at this, do you consider that your engagement in this identification of risk would have been enhanced had there been the opportunity to consult with external stakeholders - - -

THE WITNESS: It would have been - - -

MR BARROW: - - - at that early stage?

THE WITNESS: It would have been different. I don’t know about enhanced. I was not required to do that technical assessment. My understanding – clear understanding was that that was being done elsewhere outside of this process.


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MR BARROW: Yes, thank you. Thank you, Commissioner.

COMMISSIONER: Mr Potts?

MR POTTS: I have no questions, Mr Commissioner.

MR BRADLEY: Commissioner, I have a few questions.

COMMISSIONER: Mr Bradley.

<EXAMINATION BY MR BRADLEY [11.48 am]

MR BRADLEY: Ms Coaldrake, I just want to make sure I understand your statement correctly. Could I ask you to have a look at page 12 of the statement, paragraph 117 through to 121, and I’m just going to ask you some questions about that. Can we start at 117. Do I understand from that that your interest in the process was predominantly on risks to the Commonwealth?

THE WITNESS: It wasn’t an interest. The brief was quite clear. The brief is always unless the client asks you to assess the risk to stakeholders – in which case it would be a different process – it’s the risk to the client achieving their objectives.

MR BRADLEY: And then, if I understand correctly paragraph 120 – if I could ask you to have a look at that.

THE WITNESS: Yes.

MR BRADLEY: Is it correct, then, to say that so far as you can recall the discussions, the discussions about safety were safety relating to house fires?

THE WITNESS: Yes, and I recall very clearly in the PCG that that was the discussion – the early PCGs.

MR BRADLEY: And you don’t recall discussion about the safety of installers?


MR BRADLEY: And then in paragraph 121 you some things about what the Department of Environment was doing. Is it fair to say those are strategies to mitigate this safety risk in relation to house fires?

THE WITNESS: I think that’s right, yes.

MR BRADLEY: So then, with that understanding, could I ask you then to turn to page 10 of your statement and if we could start at paragraph 93. And you might just

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have to begin with a little bit of decoding. There’s a risk category that has an owner. That’s correct?


MR BRADLEY: And then something called an individual risk treatment - - -

THE WITNESS: Yes.

MR BRADLEY: - - - and there’s an owner for each of those.

THE WITNESS: Yes.

MR BRADLEY: And then, when we come down to paragraph 95 which is talking about attachment II – I don’t know whether you have a hard copy of that but we can get that up on the screen for you if you like but let’s stay with paragraph 95 for the moment.

THE WITNESS: Okay.

MR BRADLEY: Is it correct to say what your evidence is is that Mr Keefe was the owner of that risk treatment or is he also the owner of the risk category?

THE WITNESS: Well, I would have to look at the document.

MR BRADLEY: All right.

THE WITNESS: So is it - - -

MR BRADLEY: It’s attachment II to your statement and the ringtail reference is COA.002.001.1711.

THE WITNESS: So now I’ve lost – so we can see that but now I’ve lost what the question was.

MR BRADLEY: Yes. I don’t suppose we could get you a hard copy of the statement.

THE WITNESS: I don’t have mine here but it must be – I’ve got it here. Sorry, it was paragraph 95.

MR BRADLEY: Paragraph 95. So I’m just trying to identify what Mr Keefe’s role is.

THE WITNESS: So – well, it’s quite clear here. You’re correct. He was with Tracey Bell, was the person responsible for completing that risk treatment. The overall risk owner for compliance and risk is actually not noted on this so I can’t


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confirm it but Kevin was – Mr Keefe was above that. He was the assistant secretary and one of the first things I did – and I think there was reference to this yesterday – was suggest that he not own the categories because he had an oversight role. He needed to sit above the category owners to monitor how the risk management was going. So I recommended – one of the first things I recommended when I – I think, when I came back from overseas was that he not be a risk category owner but that he sit above that. So the risk category owners were at director level or EL2 level.

As to who owned this one, I – Sue Taylor, I think, was in charge of compliance.

MR BRADLEY: And sorry, just so we’re clear about that, the risk category, is that the description in the second column, the column that’s headed “the risk”?

THE WITNESS: No. It’s – it’s the one – it sits just above the table where it says “1, compliance risk”.

MR BRADLEY: So compliance risk is the risk - - -

THE WITNESS: Yes.

MR BRADLEY: - - - category?

THE WITNESS: Yes, correct. And then the risks are 1.1 and so on.

MR BRADLEY: So is 1.5 – what do you call that?

THE WITNESS: That’s the risk - - -

MR BRADLEY: So there’s a risk category and then a risk and then - - -

THE WITNESS: And then the treatments.

MR BRADLEY: - - - if we go to column 8, they are the risk treatments.


MR BRADLEY: So you have an owner for the risk category - - -

THE WITNESS: Yes.

MR BRADLEY: - - - and you have an owner for the risk treatment.

THE WITNESS: Yes. And sometimes you will have an owner for the risks as well. I don’t think – I can’t recall whether they did that. They may have done that. I don’t think it was recorded on the risk register.


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MR BRADLEY: Right. And just so that I understand, we’ve identified in your statement Mr Keefe as a risk owner for that risk treatment.

THE WITNESS: He’s the owner for the treatment, yes.

MR BRADLEY: But there’s also Tracey Bell’s name there.

THE WITNESS: Yes. I don’t really recall her role, I’m sorry.

MR BRADLEY: Do you know anything about what her position was or where she came from?

THE WITNESS: No. There were – I – I think it was communications, some PR type role but I may be completely wrong about that. I’m sorry. There were a lot of people.

MR BRADLEY: Well, let’s leave Ms Bell to one side. So far as Mr Keefe as the risk – as the owner of that risk treatment which is described as:

All companies to be responsible for ensuring supervision of their staff in their employ.

How does – what does a person who is the owner for that risk treatment – what do they do?

THE WITNESS: I would expect them to have a plan as to how they would meet that. So depending on what the risk treatment is and how big it is, it might need its own – well, it should have its own plan. If it’s something that requires a single action, you would expect them to carry that out and then report back that they’ve carried it out. If it’s something that requires planning and a series of actions, then if it were me, I would have a plan to actually deliver on that. And I would be reporting on that.

MR BRADLEY: And does it make sense within the language of risk management to say that what that plans means is a way to achieve the risk treatment?


MR BRADLEY: Is that – because they’re words used in that paragraph 95 of your statement.


MR BRADLEY: So the things to achieve the risk treatment, they’re the things that Mr Keefe was responsible for.


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THE WITNESS: Correct. And so the person given the ownership of the treatment is the person most appropriate and able to carry out those activities.

MR BRADLEY: And the things you’ve set out in paragraph 95 – I’m sorry, I remember you’ve got a hard copy of that. Do you see the sentence starting on the third line:

To achieve this risk treatment –

and then you’ve got a list – you’ve got a number of things there.

THE WITNESS: Yes.

MR BRADLEY: They don’t appear in the document we looked at, your attachment II. Are they things that you just recall.

THE WITNESS: Yes, I think – that’s correct. The compliance program was a very large compliance program with a lot of people involved, and I wasn’t closely involved in that but I was aware that there was a fraud and compliance management plan which, in fact, covered off many of the safety – the risk analysis and assessment and management for the safety aspects of the program.

MR BRADLEY: And then your paragraph 95. after referring to the compliance program, you then also refer to a dedicated communications officer and a developed – and a communications strategy.

THE WITNESS: Yes.

MR BRADLEY: Is that also part of the risk treatment or is it - - -

THE WITNESS: Yes, and that may have been Tracey Valance – sort of my memory what her role was. Because in the treatment it has got the word “liaison” in brackets as part of that treatment, and that’s why I think that was the – you see, I had those sort of program – project management side, but then you’ve got the communication side.

MR BRADLEY: And then at the end of that you speak about a compliance team that was checking and spot-checking the compliance program.

THE WITNESS: Yes, and they – from memory, that was – I don’t know whether – PricewaterhouseCoopers was involved as a contractor but there may have been other contractors as well doing the actual spot-checking.

MR BRADLEY: And just so that I understand this correctly, is that spot-checking the compliance program, or is that actually part of the compliance program that you’re spot-checking compliance by installers?


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THE WITNESS: My memory of that was that they – there was a compliance program and it was being spot-checked so they were – yes, that’s my - - -

MR BRADLEY: So it is correct?

THE WITNESS: That’s my recollection.

MR BRADLEY: That that’s a – that that is guarding the guardian, that is something - - -

THE WITNESS: So it’s all auditing the process.

MR BRADLEY: Auditing the auditors as - - -

THE WITNESS: That’s my recollection.

MR BRADLEY: Can I then just finally ask you about paragraphs 96 and 97. Have a look at 96 to begin with. You speak about your understanding.

THE WITNESS: Yes.

MR BRADLEY: Does that come from any particular source, or that’s just your general knowledge?

THE WITNESS: That was my understanding, gleaned from the discussions at the PCG.

MR BRADLEY: And I think you don’t recall any discussions of the PCG installer safety. That’s what your evidence was in respect of - - -

THE WITNESS: They were – I knew that they were managing the training of installers and the licensing of them, which means that they would cover installer safety.

MR BRADLEY: I don’t want to make – suggest anything you don’t recall.

THE WITNESS: No.[12.00 pm]

MR BRADLEY: But in terms of that “handling the licensing of installers” do you remember anything about that?

THE WITNESS: All I recall was the fact that there was different standards. So I recall some discussion around – I think it was South Australia had something called a five star or a gold star standard, and that that was different to what other States and Territories – but I don’t remember anything more than that.


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MR BRADLEY: Do you think your knowledge about that South Australian program, does that come from your attendance at the PCG?


MR BRADLEY: And is your recollection that that was – that was different, the South Australian system was different from what might be in other States or Territories?

THE WITNESS: That was my – that’s my recollection.

MR BRADLEY: And do you think that is what you refer to when you speak about a “ore rigorous system” in paragraph 96?


MR BRADLEY: So it’s the licensing arrangement.

THE WITNESS: Yes.

MR BRADLEY: Then can I ask you about the first sentence in paragraph 97. Is that your general view?

THE WITNESS: Yes.

MR BRADLEY: And then, I’m sorry to rake over an area but you gave some evidence yesterday in response to questioning about these memoranda of understanding arrangements - - -

THE WITNESS: Yes.

MR BRADLEY: Was it your understanding that the memorandums entered into between the Commonwealth and the States, state agencies, that it covered this in some way?

THE WITNESS: I don’t recall the detail of the MOUs. But I certainly do recall that the idea was to make sure that the States and Territories and the Commonwealth were aligned in having the program progress appropriately.

MR BRADLEY: And if I suggest to you that that is about this concern with house fires, safety and quality with insulation, do you have any recollection as to - - -

THE WITNESS: I would have said it was broader than that, that would be my recollection.

MR BRADLEY: But did you see any of the memoranda of understanding?


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THE WITNESS: I don’t recall seeing the MOUs.

MR BRADLEY: But you recall just reports going back to say some have been signed and some haven’t.

THE WITNESS: By – yes. There was a report from Mr Hoitink each week and I just recall a table that listed the States and Territories; and then a sort of, yes, this one is aligned, and this one is not, and this one is now. I don’t recall more than that.

MR BRADLEY: And that’s something Mr Hoitink was looking after?


MR BRADLEY: For some particular reason? Was he – was he assigned - - -

THE WITNESS: He was in charge of the legal risk for the program at that time.

MR BRADLEY: And would we find that in your attachment II?

THE WITNESS: He’s – yes, he will be there as owners, he – under 1.4 I can see his name. Now, that’s compliance and audit.

MR BRADLEY: So 1.4 is:

The risk is compliance and audit, framework is not flexible to deliver the programming objectives.

THE WITNESS: Yes, that’s that one there. So this is in July.

MR BRADLEY: Yes.

THE WITNESS: Yes. He also had the – put in place insurance mechanism, reinstall and insurance. Under 1.5 - - -

MR BRADLEY: So insurance, again that has the – it has the appearance of being something concerned about house fires, damage to property.

THE WITNESS: Correct. Training, competency checking and administration audits was also his – you see him appear there.

MR BRADLEY: So he is the owner of those risk treatments.


MR BRADLEY: And in that same area, 1.4, if you could have a look at column 3. Am I correct in saying that those are the things that are how the risk arises?


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THE WITNESS: Column 3? Yes, the sources of that risk; correct.

MR BRADLEY: And so here the three sources are:

Compliance funding may not support a broader compliance framework.

THE WITNESS: Yes.

MR BRADLEY: So it’s just a financial position.

THE WITNESS: Yes, basically.

MR BRADLEY: Two:

Reliance on upper penalty frameworks rather than legislative enforcement.

THE WITNESS: Yes, that would relate to the regulatory frameworks that sit under the legislation.

MR BRADLEY: So they’re treating – relying upon deterrents, or penalising somebody who breaches - - -

THE WITNESS: Well, the certification and the regulatory framework, rather than the legislation itself.

MR BRADLEY: So is that to do with the cancellation of someone’s registration as an installer?

THE WITNESS: Look, I wouldn’t have written that so I imagine that’s what that’s about.

MR BRADLEY: And then you’ve got at the bottom:

View of front end fraud controls.

Do you remember anything about that?

THE WITNESS: Again, I wouldn’t have written that and this one is a source amongst many, but it looks the fraud controls being predicted as coming in – once the actions have been completed and – so it’s not front-end fraud control - - -

MR BRADLEY: So it’s an after ward - - -

THE WITNESS: That’s right. It’s a reaction – reactive fraud control.

MR BRADLEY: Do you have any recollection about discussions of police checks of people to register?


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THE WITNESS: Police checks?

MR BRADLEY: Or anything like that that might happen about fraud at the beginning of the process?

THE WITNESS: No. I recall the insurance discussion. I don’t recall police checks.

MR BRADLEY: Thank you very much, Commissioner. Those are my questions.

COMMISSIONER: Thank you very much.

MR BRADLEY: Sorry, just on the – sorry, Commissioner. Can I just consider for a moment your question. You made some comments about item 1.4 in that document - - -

THE WITNESS: Yes.

MR BRADLEY: - - - and the role of Mr Hoitink as an owner of the risk treatments which he has nominated.


MR BRADLEY: And was Mr Hoitink someone who attended the PCG meetings?

THE WITNESS: Yes.

MR BRADLEY: And in – do you know he reported to the PCG meetings about his management of those risks?


MR BRADLEY: Do you know whether he – did he undertake any other role at the PCG meetings?

THE WITNESS: Well, he was – he would have been there in his capacity as the running the legal end of the process, if you like. So he would have reported on – that’s why he covered off the MOUs and things as well. He may not have reported on those risks specifically unless they were picked up during the PCG as – as lagging or something like that.

MR BRADLEY: But did you – was he at the PCG meeting in order to ..... provide legal advice to the PCG?

THE WITNESS: I think that’s a – a question for the department, but I would expect that that’s where that would come from. He was a lawyer - - -


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MR BRADLEY: And without – I don’t want you to reveal anything about anything he might have said on that subject, but - - -

THE WITNESS: Well, that’s what I would expect.

MR BRADLEY: But - - -

THE WITNESS: He was a lawyer so I imagine he would have been required to provide legal - - -

MR BRADLEY: I see. But without revealing anything, could I ask you this: do you recall attending a PCG meeting at which he provided legal advice?

THE WITNESS: It depends on your – your definition of “legal advice”. So I can’t – I can’t recall him providing legal advice per se in those meetings.

MR BRADLEY: Thank you, Commissioner.

COMMISSIONER: Mr Harvey.

<EXAMINATION BY MR HARVEY [12.08 pm]

MR HARVEY: Thank you, Commissioner. Ms Coaldrake, can I take you first to paragraph 46 of your statement which deals with the draft risk register and the meeting on 27 March and do I take it from this that you prepared a draft risk register before 27 March? Is that right?


MR HARVEY: And then at the meeting of 27 March, was it the case that that particular draft was then discussed at the meeting?

THE WITNESS: Yes.

MR HARVEY: And the meeting – and you produced some further documentation in support of the draft risk register at the meeting. Is that right?

THE WITNESS: I – I don’t recall very detailed discussion. Like, I don’t think we discussed actual risks. We talked about the recommendations for the treatment of those with extreme residual ratings. So they were – there were three of those and I had tabled some suggestions on how they might be – how they might be addressed.

MR HARVEY: All right. So there was an evolving process of developing the risk register?

8.4.14 P-2291 M. COALDRAKE XN©Commonwealth of Australia MR HARVEY

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THE WITNESS: Yes, absolutely.

MR HARVEY: And do I take it that Mr Mrdak from the Office of the Coordinator-General was not at that meeting?

THE WITNESS: Look, there were – two people arrived slightly late to the meeting, like, just a couple of minutes who I don’t recall being introduced to. I – I suppose I knew they weren’t departmental officers and I knew they were from the Office of the Coordinator-General. I don’t know who they were. It may – may have been Mr Hoffman and somebody else.

MR HARVEY: All right. But in terms of your recollection, you don’t recollect Mr Mrdak being at the meeting?

THE WITNESS: I’m not sure I ever met him so - - -

MR HARVEY: Thank you. Was it your understanding that the draft risk register and any supporting documents from that meeting were to be forwarded to Mr Mrdak?

THE WITNESS: I remember discussion about them being used in a briefing for Mr Arbib the next day.

MR HARVEY: All right. And apart from any use of the documents for the briefing of the minister or parliamentary secretary, was it your understanding that Mr Mrdak would be interested in them because they would show the progress to a point in the work system?

THE WITNESS: I – I don’t recall any discussion about who else they might go to. I – but the fact that the Coordinator-General’s office had sent people to the meeting, yes, I would hope that they would be interested.

MR HARVEY: But it would ..... with you that the interest of the Office of the Coordinator-General was to look at progress that was being made at a point in the work stream?

THE WITNESS: Yes.

MR HARVEY: And were you aware that there was some concern by the Office of Coordinator-General prior to this meeting, perhaps generated particularly by a minute of Mr Keefe of the day before as to the state of preparedness and the focus that was being applied?

THE WITNESS: No, I wasn’t aware of that.


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MR HARVEY: All right. Do I take it that you did appreciate, though, that the development of the risk register and the development of the business model were sympathetic parts of the process, that is, they were integrated aspects of the process?

THE WITNESS: We would hope so, yes.

MR HARVEY: You would hope so. But was it your understanding that that – that they were, to use an expression, critical path processors?

THE WITNESS: Yes.

MR HARVEY: Thank you. I think you were taken yesterday to a document which I have as QIC.006.001.0217 and you will recognise this document, I’m sure, which is headed Department of the Environment, Water, Heritage and the Arts Risk Assessment of the Insulation Components under the Energy Efficient Homes Package with Minter Ellison Consulting at the top. Do you recognise that document?

THE WITNESS: Yes, I do.

MR HARVEY: And do you know that that was tabled out of session by the Minister for Environment on 19 February 2010?

THE WITNESS: I don’t know what he tabled that day.

MR HARVEY: All right. Can I take you to part 4 of that document, section 4. And just – thank you. Just at the top there, you will see the particular issues, four dot points. Who identified those issues?

THE WITNESS: From memory, they have come out of the – the workshop process and the consultations that followed the workshop backwards and forwards with the department.

MR HARVEY: And do I take it that these are, in a sense, a summation of certain issues that you gleaned from that particular workshop process?

THE WITNESS: Not just the workshop. After the workshop, these documents went backwards and forwards and – so they would have come from that and, you know, they were basically the – it’s the – because it’s taken – it’s not in the register, it’s hard to tell whether they’re sources or consequences but, to me, they – they read like consequences of that poor quality – the risk of poor quality installation.

MR HARVEY: We will come to that distinction that you’ve drawn before in a moment, but in terms of just simple – simply identification at this stage, you were identifying them as issues to be addressed in the recommended management plan and the current activities - - -

THE WITNESS: The department was identifying them.


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MR HARVEY: All right. But you accepted that the department was identifying them.

THE WITNESS: Yes.

MR HARVEY: You’ve collated them in some way and it has been summarised in that dot point form at the commencement of that page.


MR HARVEY: And if I can go to the first dot point under Recommended Management Plan:

Consider these issues in developing the business model.

And you will see therefore that those issues at least were being integrated into the consideration of the evolvement or the revolution of the business plan - - -

THE WITNESS: That was recommended, yes. Yes.

MR HARVEY: You agree with that?

THE WITNESS: Yes.

MR HARVEY: And go down to the last dot point:

Review mitigation strategies in light of the agreed business model.

Do you see that?

THE WITNESS: Yes.

MR HARVEY: And do I – was it your understanding that any residual or escalation risks or factors that resulted from a final determination of the ministerially approved business plan would require some level of review?

THE WITNESS: Yes.

MR HARVEY: And what would require review would be mitigation strategies or control factors.

THE WITNESS: Everything.

MR HARVEY: Is that right? In the – just let me finish the question.

THE WITNESS: Sorry.


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MR HARVEY: Mitigation strategies or control factors in the overall context of risk evaluation. Is that not right?

THE WITNESS: The whole of the risk plan would need to be reviewed.

MR HARVEY: Yes. The whole of the risk plan would need to be reviewed.

THE WITNESS: If the business model changed fundamentally, then the risks as well as the sources, the consequences, and the risk treatments would need – and the ratings – the whole thing would need to be reviewed.

MR HARVEY: Yes. And at the end of the day, one of the reasons for reviewing the whole thing – to use your expression – would be to ensure that any mitigation or control measures in relation to identified risks, however they were evolving at that time, had been adequately – are covered.


MR HARVEY: And so in terms of process, that was a process motion or idea that you were injecting into this particular system?

THE WITNESS: Well, yes. Yes.

MR HARVEY: Thank you. Can I go to paragraph 17 and this is where you do distinguish between sources of risk, I think – let me just go to it – and actual risks. You see at the top, you say:

The fact that there would be new entrants to the market was not itself a risk, rather it was a source of a risk.

Do you see that?

THE WITNESS: Yes.

MR HARVEY: Is the distinction that you’re drawing here between sources of risk and the actual risks arising from identified sources of risk a distinction that you were advising DEWHA officers about?

THE WITNESS: Yes.

MR HARVEY: So in March 2009 - - -

THE WITNESS: I’m sorry. Sorry, who was I advising?

MR HARVEY: DEWHA officers - - -

THE WITNESS: DEWHA officers, yes.


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MR HARVEY: - - - the Department of Environment officers. Is that right?

THE WITNESS: Yes.

MR HARVEY: And as at March 2009 you considered that new entrants to the market would be a source of risk. Is that right?

THE WITNESS: It could only be a source of risk.

MR HARVEY: Only a source of risk.

THE WITNESS: Yes. It’s a – it’s a fact.

MR HARVEY: Yes. And that was a fact or a factual premise - - -


MR HARVEY: - - - underpinning the whole of the risk evaluation processes that you were involved in.

THE WITNESS: Yes.

MR HARVEY: And so I think what you were doing was drawing a distinction between sources of risk and the actual risks. That is, that the new entrants to the market would be the source of the risk – correct?


MR HARVEY: But the nature of the risk was something else.

THE WITNESS: Yes.

MR HARVEY: And the nature of the risk – I think, if I’m reading your paragraph 17 correctly – is lack of experience or lack of qualifications. Is that what you’re identifying?


MR HARVEY: And do I take it that your evidence is that you were primarily accepting the relevant risks that were to be factored into your risk matrix and your risk register and they were being presented to you primarily by DEWHA officers. Is that right?


MR HARVEY: You weren’t going independently re-examining or analysing those risks. Is that right?


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THE WITNESS: No, I was just making sure they were actual risks and phrased as that.

MR HARVEY: And that they were risks to the client, I think you were saying.

THE WITNESS: Risks to achievement of the objectives of the program.

MR HARVEY: But you were concerned yourself with – I think you said in opening today – risks – or an answer to one of the questions asked of you today – that they were risks to the Commonwealth as a client.


MR HARVEY: And – but you were accepting that one of those risks was in respect of new entrants. Is that right?

THE WITNESS: Yes.

MR HARVEY: And what was the mitigator or control for that risk?

THE WITNESS: The – no, the new entrants weren’t the risk. So it’s the poor quality installation risk, I believe, that that relates to. I would have to go back and look.

MR HARVEY: Well, no, we’re talking about new entrants and you - - -

THE WITNESS: As a source.

MR HARVEY: - - - have drawn a distinction between new entrants to the market being the source of the risk - - -


MR HARVEY: - - - but the nature of the risk being something else.


MR HARVEY: Lack of experience, lack of qualifications.

THE WITNESS: Yes.

MR HARVEY: Do you remember just embracing that dichotomy just a moment ago?

THE WITNESS: Yes.

MR HARVEY: And so what’s the mitigator?


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THE WITNESS: So the – well, it would depend what’s in the plan. Are you asking me what I would expect the mitigators to be?

MR HARVEY: Yes, let me put it that way. What would you expect to be the mitigator for that identified source of risk and nature of risk?

THE WITNESS: I know it’s in there but the training programs, the certification, the registration, having the right insurance, etcetera, etcetera.

MR HARVEY: I see. So training is an essential aspect of that equation, is that right?

THE WITNESS: I would expect that would be the best mitigator.

MR HARVEY: And would you accept for me that training is a means to an end, not an end in itself?

THE WITNESS: It’s a mitigator, yes.

MR HARVEY: But the fundamental objective of training is to enable someone to obtain a particular qualification, by and large, is it not?

THE WITNESS: Yes, it depends on the training but, yes.

MR HARVEY: So you might be trained, for example, as a lawyer to get an admission or you might be trained as a doctor to be admitted to a particular practice.

THE WITNESS: And – and one hopes that that training has been effective, yes.

MR HARVEY: Training has been effective to obtain the qualification - - -


MR HARVEY: - - - to entry into that particular profession or that particular line of work.

THE WITNESS: Yes.

MR HARVEY: Take a pilot, for example. Has ..... skills of a pilot to get him a pilot – or her a pilot license but that – that obtains the qualification.


MR HARVEY: And I’m suggesting to you that that doesn’t say very much or doesn’t tell you very much about the system under which that particular person, once having obtained that qualification, has to – has to work, does it?


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THE WITNESS: About the system or about their ability to operate in the system? I’m not sure.

MR HARVEY: It may not say too much about that but it might – it says nothing to you, does it, about the risks that the person who is now qualified will face in the work place, does it?

THE WITNESS: No, but it would not be the only mitigator.

MR HARVEY: All right. But from a risk management point of view, do you agree with me that there is then a need to drill down into whatever that particular – I call it a system but you can call it a context or a workplace or whatever you like, but there’s a need to drill down into that, essentially, to identify hazards that that qualified person may encounter?

THE WITNESS: Yes.

MR HARVEY: And do I take it that hazard identification was an aspect of the risk evaluation process that you were involved in or not?

THE WITNESS: Hazard identification in relation to - - -

MR HARVEY: I’m sorry, in relation to installers.

THE WITNESS: Okay. No.

MR HARVEY: All right. But do you agree with me that until you do that as an essential element of a risk evaluation process, you really won’t know whether training alone or at all will accommodate or provide for the necessary mitigator or control measure? Do you agree with that?

THE WITNESS: Yes, but had I been asked that at the time, I would have said that that was being done elsewhere.

MR HARVEY: And – I see, and so was it your understanding at the time that that element that we’ve just described was an important aspect of the risk evaluation process. Is that right?

THE WITNESS: I – I didn’t - - -

MR HARVEY: No, no. Just your understanding - - -

THE WITNESS: Yes. Yes. Okay.

MR HARVEY: - - - as to whether that particular element – not that you had to do anything about it - - -


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THE WITNESS: No. Yes.

MR HARVEY: - - - but that you appreciated that that particular element – hazard identification, drilling down – was an aspect of the risk evaluation process.

THE WITNESS: Yes.

MR HARVEY: And that your understanding at the time was that that was being done - - -

THE WITNESS: Elsewhere.

MR HARVEY: - - - elsewhere.


MR HARVEY: And the elsewhere was primarily where?

THE WITNESS: I understood it to be happening in the states and territories.

MR HARVEY: Did you understand it also, though, as part of the episodic rollout of the program to commence on 1 July, being done by consultations between the Department of Education and Workplace, and the Department of Environment?

THE WITNESS: I was – well, I was aware that DEWHA were responsible for the training programs. I should – can I add, too, that I would expect the installer companies, that is, the people responsible for the installers, to also carry that primary responsibility.

MR HARVEY: Yes, well, we will come to that.

THE WITNESS: Okay.

MR HARVEY: That is also in terms of integrating all of what I would call the mitigators or control features of an evaluation process, the need to integrate all mitigators that might have been identified including that by the employers themselves in the context of installer safety. Is that right?


MR HARVEY: But just to focus in on what the Commonwealth was doing, were you aware that as of at least May of 2009 there was a construction industry pocketbook being develop in consultative arrangements between DEWHA and the Skills Council, I think it is?


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THE WITNESS: I don’t know the parties it was between. I knew it was being developed because it appears as a risk treatment so I would have seen it in the register and it was mentioned in the PCG meetings.

MR HARVEY: All right. So – and I take it that you never read or had access to the construction industry pocketbook for the purposes of any task that you were doing. Is that right?

THE WITNESS: I don’t recall. I certainly was never asked to review it.

MR HARVEY: Okay. And you were never a shown a copy of the construction industry pocketbook as it was being drafted and as it evolved with different versions - - -

THE WITNESS: No.

MR HARVEY: - - - episodically?

THE WITNESS: No.

MR HARVEY: Did you not really, though – even in the limited – I understand your confinement of your role, particularly in that early period, but did you not really feel that you needed to get to know or at least have an appreciation of work practices in the industry in which at least some of the risk evaluation process to be directed?

THE WITNESS: No.

MR HARVEY: So you didn’t do that, then, because you didn’t feel that was incumbent upon you to go to that level - - -

THE WITNESS: I – I would not have done - - -

MR HARVEY: - - - of research and understanding?

THE WITNESS: I would never have gone to do that job had that been required of me.

MR HARVEY: All right. But did you advise the Department in your advisory role that, look, when we have a risk evaluation process of a fairly complex kind, that one of the real elements to do is to get a real understanding of the information at least at a level that enables the Department to place in context the theoretical or structural processes you were involved with?

THE WITNESS: We – we’ve – we’ve mixed up the two roles. My comment about I wouldn’t have done the job had I been expected to do that refers to that first period, and that was partly because I wasn’t qualified to go out and do that and make an assessment of industry activity in any way, shape or form and never am with my


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consultancies. And it was an extremely tight timeframe and extremely tight budget so there wouldn’t have been time and I would never have said I could do it in the time. So that’s that. In my advisor role – now I’ve forgotten the question.

MR HARVEY: Yes, the question was really looking at your role at the early stage of being in relation to what I call the theoretical or structural processes that resulted in a completion of or developed of a risk matrix and a risk register. They’re more structural, presentational - - -

THE WITNESS: My understanding was that - - -

MR HARVEY: - - - process – yes.

THE WITNESS: - - - all that information, they were getting from their industry consultations.

MR HARVEY: But what I’m suggesting to you is that did you not have an appreciation that you really needed to advise the Department to do some more work, at least to enable that theory – that structure that you were developing to be efficacious in the long run?

THE WITNESS: I didn’t need to do that because my understanding was that they were doing that.

MR HARVEY: No, no. But it’s a matter of you ensuring that the structural elements to what you were presenting – were the theoretical premises you were basing it on, and I will come to that in a moment – were going to be efficacious in terms of giving to the client what the client needed?

THE WITNESS: But they – they were doing that so I had seen evidence. I knew that they had industry consultations in place. I knew the Minister was going to those. I knew that they were doing all that. There was no need for me to say “go and do it” - - -

MR HARVEY: All right.

THE WITNESS: - - - because they were doing it.

MR HARVEY: So you observed something and, as a result of that, you refrained from making any further entreaty to the Department - - -


MR HARVEY: - - - to do anything further. All right. Now, you developed a blended risk matrix, I think you said.

THE WITNESS: Yes.


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MR HARVEY: What does exactly that mean?

THE WITNESS: I had provided with my proposal a sample of a risk matrix I like to use. Now, it’s quite different to – it’s actually quite commonly used now – I won’t take any credit for that – but at that time and many organizations still produce risk assessment tables, anything up to five or six of them that have the elements that on my matrix is on one page. So it’s got what has to happen with particular ratings and what you should consider to give you a consistent likelihood and consequence, and all those things that are on that piece of paper. That was the one I like to use and the international standard doesn’t set – at the time it was the Australian standard for risk management which became effectively the international standard. It doesn’t actually set out what those risk assessment matrixes look like so you will find different ones in different places.

MR HARVEY: Indeed.

THE WITNESS: The Department – I always send one of those with my proposals and say “this is what I like to use”. You know, “Let’s have a look at yours and I will use yours if I have to but I actually would prefer to use it this way.” Their boxes, their likelihood and consequence conclusions in terms of rating are different and I think I made the comment, from memory, the bottom right-hand box which is still like a catastrophic consequence but a rare likelihood in the Department’s one I think was low. And I – I would never – and said this to the client at the time – I would never leave that as a low rating on my sample. It’s a medium rating which is the absolute minimum if you’ve got a catastrophic consequence even - - -

MR HARVEY: But it does - - -

THE WITNESS: It’s rare.

MR HARVEY: But that doesn’t mean if you are allocating a particularly different kind of priority or level that you are needing to have some real understanding of this industry, does it not?

THE WITNESS: Not me. I wasn’t rating them. I was not rating the risks. The Department was rating the risks.

MR HARVEY: But you were giving some differing views about what level those ratings should be at.

THE WITNESS: No, no. I was – just – just the theory of whether a catastrophic consequence and a rare likelihood should be rated as a medium or a low risk. So I was – a very theoretical principle. So we went with their – we went with theirs – their ratings.

MR HARVEY: Did this process that you’ve just relayed enable the identification of the level of accepted or acceptable risk?


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[12.30 pm]THE WITNESS: No. The acceptability of risk or the risk appetite or risk tolerance or whatever you want to call it, that needs to be set by the client. That is, are we happy to continue to pursue our objectives with this level of risk.

MR HARVEY: Well, just going to paragraph 53 of your statement and, in particular, the second sentence of paragraph 53:

No organisation can entirely eliminate risk.


MR HARVEY:

It’s all about managing the risk and deciding the level of which it can be managed and whether that is tolerable.

Do you accept that tolerable risk is another name for accepted or acceptable risk?

THE WITNESS: Yes.

MR HARVEY: And did you – how did you go about assisting the Department, if at all, to decide the level at which the identified or tolerable risks could be managed?

THE WITNESS: On that meeting of 27 March, I walked in there and said, “This is the reddest risk register I have ever seen. I have put a copy on my contract file. You have extreme” – I think all the – from memory, all of the risks were inherently extreme and so – and three remained extreme after residual. So I was crystal clear and very strong saying, “You have too much risk. You need to do things to your program to ameliorate this risk.”

MR HARVEY: Well, that’s going beyond advice about process, isn’t it? If you’re advising them that they need to do something to ameliorate the risk.

THE WITNESS: I was making sure they understood what was on the piece of paper.

MR HARVEY: All right. But to be in a position to determine, or to assist the department to determine tolerable or acceptable risk, you would really need to be in a position to know what the existing state of play with actual risk was, wouldn’t you?

THE WITNESS: There’s no such thing as – well, actual risk becomes an issue so - - -

MR HARVEY: All right. The materialisation of risk has been – and let me just put this into context, and I know you have reservations about the extent to which you say you were involved and your mind was being focused on installer safety as a risk. But


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I think we took you yesterday to a document which asterisked installer safety. And do I take it that overnight you’ve realised that, yes, that was an element of the program that was being considered, to your knowledge?

THE WITNESS: That installer injury was – yes, came out of the workshop, yes.

MR HARVEY: And so, again, to go back to my fundamental point that in order to reach a level of acceptable or tolerable risk, you really needed to understand the extent to which events or conditions in the past had materialised flowing from the particular hazards or risks that had been identified, didn’t you?

THE WITNESS: I didn’t need to do any of that.

MR HARVEY: I see.

THE WITNESS: I was not setting the tolerance level.

MR HARVEY: But you needed to advise the department about process, and what I’m suggesting to you is the inquiry about what had gone on in the past is an essential aspect that the department needed to know about in order to understand what the tolerable risk would be.

THE WITNESS: And I understood – and I understood that they had done that.

MR HARVEY: You understood they had done – they had done exactly that?

THE WITNESS: Yes, I had understood that they were talking to industry so I assumed that – if I had thought about it, that they would have got all that information.

MR HARVEY: And did they come back to you then and say, “Look, we’ve looked at the rate of injury in this business - - -

THE WITNESS: No.

MR HARVEY: Let me finish the question - the rate of injury in this business from, say, 2005 to 2008 and there were X numbers of deaths or injury in that period of time?

THE WITNESS: No.

MR HARVEY: So what was the basis upon which you assumed that the department was drilling down into that particular historical context in order to enable them to develop a level of tolerable or acceptable risk?


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THE WITNESS: Later on – at that time they – I knew they were meeting with industry. I wasn’t at those consultations. I don’t know what they covered. So I assumed that they were covering whatever they needed.

MR HARVEY: All right. Okay. So just to get this clear, you didn’t consider it was your role or position or responsibility - - -

THE WITNESS: No.

MR HARVEY: - - - to do any research on accident injury rates in the insulation industry pre – up to 2009?

THE WITNESS: No.

MR HARVEY: You didn’t have anyone from the department actually informing you that they had done that particular exercise. Is that right?

THE WITNESS: No.

MR HARVEY: But you assumed that, as part of the process that you had been involved in and had been assisting the department to evolve towards a risk evaluation, a risk management system, that they would take on board that element?

THE WITNESS: That they had been, and that they would continue. As they ran the risk process, they would continue that industry consultation and would continue to get whatever they needed to actually manage the risk.

MR HARVEY: All right. And yesterday, I think, it was Mr Perry who asked – no, I withdraw that. It wasn’t Mr Perry. It was my learned friend Mr Wilson who asked you a particular question, and this is at page 2109 of the transcript. It was actually page 38 of the document, and I’m looking at lines 38 to 40, and you say:

I don’t know whether there were deaths in the insulation industry before the program.


MR HARVEY: And so we’ve gone through that. You didn’t research that issue, and you weren’t given any information from DEEWR or anybody else about that issue.


MR HARVEY: And do I take it that – no, I withdraw that. If you could just go to that part of the – is it possible to obtain that part of the transcript?


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COURT OFFICER: The transcript is just coming up, Mr Harvey. Can you give me the page number, please?

MR HARVEY: It’s page 2109 of the transcript. It’s actually page 38, I don’t know how quickly you – or how easily you pick up the pages, but – excellent. Thank you.

You say – do you see at lines 38, 39 or so:

I don’t know whether you were guessing – I don’t know. That would be a question I would ask if –

and then Mr Wilson broke in on you – being fair to you, but broke in on you. And I’m wondering, before Mr Wilson cut you off, do you recall what you were intending to say, the question “If I would ask” is? What’s the question? What’s the rest of that sentence?

THE WITNESS: Sorry, I can’t recall what the thought was.

MR HARVEY: All right. So there was – I thought you might, but it has gone now. Is that right?

THE WITNESS: Gone, all gone.

MR HARVEY: Okay. Look, do I take it that your role – thank you for that. Your role was to make recommendations about risk management to the PCG. Is that right?

THE WITNESS: About the process that they had in place. So the risk management framework and their role in it and – yes.

MR HARVEY: And in developing the risk matrix and the risk register, you relied on some data or some information from the Australian Standards. Is that right?

THE WITNESS: The approach is in line with the Australian Standard on risk management.

MR HARVEY: All right. But what – and we touched on the question of theory before, but what risk evaluation method or measure did you seek to apply?

THE WITNESS: You mean assessment? I’m not sure - - -

MR HARVEY: I mean your - - -

THE WITNESS: When you’ve identified the risk, you’re talking about how you then assess them. And you assess them by likelihood and consequence using the information – or we used the information that was in the matrix.


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MR HARVEY: But you’re aware of different models of approaches to risk evaluation, aren’t you?

THE WITNESS: Sure, sure.

MR HARVEY: Logic trees, fault trees - - -

THE WITNESS: Yes.

MR HARVEY: Bow-tie, are you up with bow-tie?

THE WITNESS: Yes, I know. Yes. I don’t use those.

MR HARVEY: You don’t use those at all?

THE WITNESS: No.

MR HARVEY: Bow-tie was a methodology that was used and brought into existence, following some catastrophic events, weren’t they? We can rattle them off. Three Mile Island, Bow Fault, Chernobyl, Kings Cross Underground Fire, and so forth. In the late 1970s and 1980s there were a series of catastrophes in various industries, oil and gas, nuclear energy and so forth, and that produced an absolute explosion, if I may suggest, of theoretical constructs about how you go about risk evaluation. And bow-tie was one of the methods that grew out of that. Are you aware of any of those?

THE WITNESS: I’ve not used that method. I’m aware of them, yes.

MR HARVEY: You’ve not used that method so you have never studied that particular method?

THE WITNESS: I’ve not used it.

MR HARVEY: Two sides of the bow-tie, you look – take a top event, work through on the left-hand side, through the assessment side, and then the right-hand side, essentially working out the control measures needed to control the particular risks that are being assessed, following the identification of a hazard.

THE WITNESS: Yes, but the methods that I used I think work just as well as a methodology, which was to use the matrix – which was the department’s risk management framework. That was what they were used to so if they had been managing risk elsewhere in the department, the only change I made was actually in the ratings of the risk to, and the way it all set together. The ability of people who aren’t trained in risk management to understand anything other than that basic likelihood and consequence which they could actually get their head around, I find in dealing with clients is the best way.


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MR HARVEY: All right. So you didn’t see the need to draw up on any of the learning that I’m suggesting is out there to draw on a more sophisticated model of risk assessment and, in particular, to identify hazards and – I will call it priority the hazards so as to know which hazards needed to be drilled down into? Is that right?

THE WITNESS: In terms of hazards, I would call them sources. Yes, we were looking at sources. Remember also that PricewaterhouseCooper, PWC was working on risk. The fraud and compliance management plan which was done by Ernst & Young was working on risk. I don’t know what methodologies they used. There was a legal risk plan. I don’t know what methodology they used.

MR HARVEY: Your background, if I may say so, was in the arts and in museums. Is that right?

THE WITNESS: Yes, and in the public sector generally.

MR HARVEY: Public sector. In your former qualifications, you weren’t involved in having to study any of the theory of risk evaluation. Is that right?

THE WITNESS: No.

MR HARVEY: Is that right?


MR HARVEY: But you had some experience as a program manager?

THE WITNESS: Yes, as a program manager, a board member, a board director, auditor, committee of directors, and then as a consultant for now – since 1996.

MR HARVEY: But did you appreciate that the department, and anyone who the department was reporting to, was looking at you in your role, particularly having regard to the way in which your consultancy responded to the tender for the department, as being quite proactive in the whole area of risk evaluation?

THE WITNESS: I’m sorry, I lost the question in there.

MR HARVEY: Yes. Did you appreciate that the department, and at least all those who have been – to whom the department was reporting, was considering your role in this whole process of a risk evaluation as being quite a significant one?

THE WITNESS: Yes, and I had a – I recall I had a colleague working alongside me who had many years experience in the insurance and WorkCover industry. He had very strong risk management experience as well.

MR HARVEY: All right. Did you see any of the briefs that were going put to the Minister, and Minister Garrett in particular?


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THE WITNESS: No.

MR HARVEY: No. You weren’t factored in on those briefs?

THE WITNESS: No.

MR HARVEY: No. All right. And do I take it also that neither you nor your partner had a role in determining what the level of integration should be between the training that had been identified and risk management systems of installers that I think we touched on right at the outset?

THE WITNESS: No.

MR HARVEY: But you appreciate that there’s a real need to integrate at least - - -

THE WITNESS: Yes.

MR HARVEY: Well, I withdraw that. There’s a real need for an installer to integrate whatever training, whether it’s in-house training, out-house training, external training, with whatever risk management system that installer has in place.

THE WITNESS: Yes.

MR HARVEY: So that there’s a sympathy, a marriage between the technical training, how do I put a pink batt in a roof, and the assessment of risk before I even get to the job.

THE WITNESS: That’s what I would expect.

MR HARVEY: And you assumed, did you not, that installers would have in place that kind of matrix. Is that right?

THE WITNESS: Yes.

MR HARVEY: Now, can I just take you briefly to the email that appears at annexure RR to your statement, which is STA.001.002.0197. And this is the email from you to Ms Riordan and others, and you will see about the middle of the email:

Lastly, there are two additional risks we would like to list at this point.

Do I take it you, nonetheless, as of March 2009 felt able to contribute to risk identification?

THE WITNESS: It’s possible that those risks were discussed without being articulated, if that makes sense. So it might not have come through the actual – what was written, but there was a lot of discussion in the workshop. I mean, the workshop


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went for several hours, and I would have gone round and sat with the groups. And it may be that those – I’m not sure, I can’t recall - - -

MR HARVEY: All right. So you - - -

THE WITNESS: - - - and I don’t know what they are, but that would be the sort of basis on which I would do that.

MR HARVEY: And I think you were taken to – I think it’s - I’m not quite sure what the document was but I think in answer to a question that related to that particular document – that asterisk to installer injury. Do you remember that?

THE WITNESS: Yes.

MR HARVEY: Yesterday, you were taken to that and it was box 15 of that particular document but you had no recollection of it.

THE WITNESS: No.

MR HARVEY: And just to be clear on what you’ve discovered overnight, am I right or wrong in understanding your evidence that you’ve - - -

THE WITNESS: I believe the document - - -

MR HARVEY: You’ve come to a different view or you’ve confirmed a view?

THE WITNESS: I believe the document that I sent – there was no asterisk on that installer injury so I don’t know now where that asterisk came from or what it was.

MR HARVEY: But yesterday you had no recollection of that particular entry in box 15.

THE WITNESS: No.

MR HARVEY: Is that still the case?

THE WITNESS: Well, I – I still don’t recall the detail of it. It’s there so I can see that I handled the document but it’s – I don’t recall.

MR HARVEY: Yes, all right. I’m just trying to take you back to your mindset as of March 2009 so that if it’s the case that you didn’t comprehend that the risk assessment process that the department was going through included as an element – let’s put it no higher than that at this stage – installer injury, does it follow as a matter of logic that therefore you didn’t assist and couldn’t have assisted the department to come up with any plans or measures for controlling a risk of which you were not aware?


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THE WITNESS: I was not – I don’t recall discussion around installer injury at any time. I have seen that that’s in the document so I must have known about it at the time. I have – I don’t recall that. We’ve now found that that was taken out by the department. I don’t recall – there was no discussion around that. It was all done very, very quickly, as we will see later, and if it was taken out, then – when I came back to work on that again, it – it was put back in the registers quite quickly so it – it came and went along with many other sources and consequences. I think it was listed there as a “consequence”.

MR HARVEY: Do I take it that the answer is that it would logically follow that if you didn’t appreciate the existence of installer injury as a risk, then you couldn’t have assisted the department to come up with plans or controls for dealing with it?


MR HARVEY: Can I – my final question. Can I take you to the transcript from yesterday again, page 2185. This was at the outset of Mr Perry’s questions of you where he ..... took you to some evidence that he elicited from you at the coronial inquest in Queensland, that the commonwealth’s risk assessment seemed to contemplate consideration of only those risks that have a consequence for commonwealth financial or reputation risk and not installer. Can you remember that question that was raised and it was almost the first question by Mr Perry?

THE WITNESS: Yes.

MR HARVEY: If we have it on the – have access to the transcript. It’s at page 2185 or page 46 of the actual transcript document. 2185 or – here we go. And he took you to that part of the transcript from the Queensland coronial inquest and then asked you to, in a sense, confirm – can I simply say to you that in terms of the way in which that was presented to you, having regard to your further evidence, should we really understand your evidence as a perception of your role rather than an opinion about the commonwealth’s understanding of what the whole risk evaluation exercise as a significant aspect of the HIP entailed?

THE WITNESS: I’m sorry, I don’t know what you mean.

MR HARVEY: Yes, it’s a complicated question. I - - -

THE WITNESS: No, no. I just don’t understand what you mean by “perception of my role”.

MR HARVEY: Yes. This was a perception of your role, that is, that your role was to look at financial or reputational risk primarily and that any advice or input to the process by which these risks were being assessed you subsumed under the context of financial or reputational risk.


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THE WITNESS: So, yes, my role was to assess with the client to work with the client to assess the risks to a successful achievement of the development and implementation of the program that happened to include financial and reputational risk that ..... but the role was to assess the – the objective of the risk assessment, if you like, was to assess the level of risk to successful development and achievement of that program.

MR HARVEY: Yes. But plainly, if you tweet to installer safety as being an element or a hazard within the whole risk evaluation process, that might have been something that went beyond the characterisation of financial or reputational, would it not?

THE WITNESS: It would be – it would be either. It could be a source of reputational and financial risk to the commonwealth.

MR HARVEY: All right. And what I’m suggesting is that that reflects your perception of your role rather than your opinion as to what the commonwealth was actually understanding by what it was doing as a significant part of the HIP.

THE WITNESS: Yes. I’m – I’m not sure I would separate it.

MR HARVEY: You can’t - - -

THE WITNESS: It’s hard to separate them like that.

MR HARVEY: You can’t follow - - -

THE WITNESS: Sorry. Well, I can but - - -

MR HARVEY: And you’re not going back to finish your PhD, are you?

THE WITNESS: No.

MR HARVEY: Thank you .....

COMMISSIONER: Mr Howe?

<EXAMINATION BY MR HOWE [12.50 pm]

MR HOWE: You made reference to a colleague who you describe as having very strong risk management experience and expertise. Do you recall that evidence?

THE WITNESS: Yes.

8.4.14 P-2313 M. COALDRAKE XN©Commonwealth of Australia MR HOWE

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MR HOWE: Was that experience and expertise similarly limited to process matters, or did he possess substantive experience and expertise in the risk management area?

THE WITNESS: I would have to go back and – and look at his CV to answer that exactly, but he had strong experience in the insurance industry and in – as a – a senior manager in WorkCover in Victoria.

MR HOWE: All right. So was it your understanding that he possessed sufficient experience and expertise to actually identify risks?

THE WITNESS: Yes. He – he certainly had stronger risk management experience than me and in a different sort of context.

MR HOWE: Yes. Did he have experience and expertise to assess risk?

THE WITNESS: Yes, I think so.

MR HOWE: And did he have experience and expertise to advise upon risk mitigation strategies?

THE WITNESS: Not – I wouldn’t have said in relation to this industry, no. To - - -

MR HOWE: I’m not asking you about this industry.

THE WITNESS: Just generally?

MR HOWE: Yes.

THE WITNESS: Yes.

MR HOWE: So he did have that sort of experience and expertise?


MR HOWE: Not limited to mere facilitation of process with clients but of a kind that would allow him to have hard, substantive input into the content of a risk management plan.

THE WITNESS: I don’t know that I can actually answer that. I think that would be a question for Mr Chalmers. He – he certainly had a different set of experience to me.

MR HOWE: All right. Well, can I suggest it’s somewhat extraordinary that you can’t answer that question in circumstances where you badged yourself and him as a team in the material that you submitted to the department in order to obtain this work.


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THE WITNESS: But the work didn’t require us to identify and assess and do all that on our own. It’s not like we had to go off and do that on our own. It was in discussion with the department and facilitating the department to do that process.

MR HOWE: Yes. Just listen to what I’m putting you. You badged yourself with this gentleman as a team with an overall skill set for the purpose of winning this work from the department, didn’t you?

THE WITNESS: Yes.

MR HOWE: And I want to suggest to you that it’s a little bit extraordinary that you’re unable to assist the commissioner with a very profound understanding of exactly what he brought to the table as part of that team.

THE WITNESS: It was in relation to whether he could assist with the assessment. That was the point at which I wasn’t sure about exactly how much experience he had on assessing those particular risks.

MR HOWE: All right. Now, you’ve told the commissioner by reference to paragraphs 120 and 121 that you actually don’t recall any discussion about safety risks to actual installers themselves; rather, your recollection is of discussions concerning safety risks referrable to house fires. Do you recall giving that evidence?

THE WITNESS: Correct. Yes.

MR HOWE: Now, house fires – I want to suggest – would more likely present a risk of injury or death to householders rather than to installers. Would you agree with that?

THE WITNESS: Yes.

MR HOWE: And we know that installer injury and death was still in the document that you say your researchers overnight led you to discover and which you submitted to the Department on 27 March 2009. That’s right, isn’t it?

THE WITNESS: Sorry, I – lost in the middle of that. Yes, the installer injury was in the documents submitted by me to the Department on 26 March.

MR HOWE: All right. Well, what did that risk relate to, bearing in mind that you’ve now confirmed house fires presented a risk to householders rather than to the installers. So in your document of 26 and 27 March, what did installer injury or death relate to?

THE WITNESS: It was no there as a risk. It’s there as a consequence and - - -

MR HOWE: I’m asking you what it related to. Put aside characterization as a source or consequence. What did it relate to?


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THE WITNESS: I’m sorry, I don’t know what you’re asking. It related to the – it was a consequence of poor quality installation. That’s how it appears in that document. It’s under the poor quality installation risk.

MR HOWE: All right. So poor quality installation might lead to installer injury or death, as you understood it when you submitted that document on 26 or 27 March. Is that right?

THE WITNESS: I don’t recall what I understood at that time.

MR HOWE: Well, madam, it’s your document and the concept appears in your document and what I am trying to establish is what your state of mind was when you sent that document with that reference in it to the Department bearing in mind that it must have had some significance.

THE WITNESS: So that document was developed – the content of that document came from the Department. I pulled it together - - -

MR HOWE: I’m not asking about its providence, madam, or its history. I am asking what your state of mind was in relation to the inclusion of those words in the document that you sent on 26 or 27 March.

THE WITNESS: I don’t recall.

MR HOWE: Now, that’s pretty extraordinary, isn’t it?

THE WITNESS: It’s five years. I don’t remember. I’m sorry. It was very rapid. There was a lot going on. I don’t remember. Can’t - - -

MR HOWE: Now - - -

THE WITNESS: Yes. I don’t remember.

MR HOWE: Ms Coaldrake, a number of Commonwealth officials have attended the hearings of this Commission and given evidence on oath that they were aware of installer lives and limbs being at risk but thought that the risks were adequately dealt with as at 1 July 2009. Now, did you see that evidence in the transcript?

THE WITNESS: I haven’t read all the transcripts.

MR HOWE: I didn’t ask you that. I asked you whether you had seen references along the lines I described in the transcript.

THE WITNESS: Not those precise words. No, I don’t think so.

MR HOWE: So that comes as a surprise to you, does it, that various Commonwealth officials have told the Commissioner that they were aware that the


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process of installing insulation did present risks to the lives and limbs of the installers but they thought that the risks were adequately dealt with as at 1 July 2009.

THE WITNESS: It’s not a surprise. I – I read some of those bits. I think Mr Keefe’s transcript on that matter – I didn’t read anything else. I just read last week’s.

MR HOWE: But by way of contrast, you as a risk consultant can’t recall what your state of mind was about that topic at all and indeed you can’t recall a single conversation referable to it. Is that the position?

THE WITNESS: You were asking before about March. No, I don’t recall the discussion in March. I don’t recall discussions about it later and I remember being – as I think I’ve said in my statement – I was shocked at the first fatality.

MR HOWE: Yes, well, I don’t dispute that it would have come as a dreadful shock to you because apparently you can’t even assist the Commissioner with what the content of your own inclusion in the document was that described installer injury or death.

[1.00 pm]THE WITNESS: I can’t. They – they were not my words. It was in there. I don’t recall anything about that. I’m sorry.

MR HOWE: Now, in asserting that they were not your words, are you styling yourself as, in effect, a note taker?

THE WITNESS: No, a facilitator.

MR HOWE: Well, what were you seeking to facilitate being addressed when you included reference to that topic in this document in late March?

THE WITNESS: I don’t recall.

MR HOWE: Now, you also told the Commissioner that you didn’t think at the time that you needed to understand work practices in the industry. Do you recall giving that evidence?

THE WITNESS: Yes.

MR HOWE: And indeed you developed it and said you would never have taken on the job if you thought that this was required of you.


MR HOWE: Do you recall that?

THE WITNESS: Yes.


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MR HOWE: And then you went on to say that that’s because you weren’t in a position to undertake industry consultations on the topic of safe work practices because it was beyond your expertise.

THE WITNESS: Yes.

MR HOWE: Well, in the light of that, why on earth did you assume that public servants in the Department of Environment would, after industry consultation, have at their fingertips a profound understanding of risk identification?

THE WITNESS: They told me that they had had industry consultations and that they were getting advice from industry.

MR HOWE: Madam, you told the Commissioner that you didn’t believe you possessed the necessary experience and expertise to properly carry out industry consultations with a view to identifying risks, so I’m asking you on the basis of that, having regard to your own professional antecedence, why you blithely assume that public servants in the Department of Environment would be differently placed?

THE WITNESS: I don’t think I assumed that. I was making assumptions around what they understood from their industry consultations. I don’t know what their backgrounds were. I assumed, I suppose, that those people were put there because they had the expertise necessary to develop and implement a large, complex, high profile program.

MR HOWE: Madam, you’ve said several times that you assumed that the Department would have gained a sufficiently involved understanding of risks by virtue of its engagement with industry stakeholders.

THE WITNESS: Yes.

MR HOWE: And you operated on that assumption.

THE WITNESS: Yes.

MR HOWE: But you told the Commissioner that you didn’t think you possessed sufficient expertise and experience to properly engage in that exercise.

THE WITNESS: I – I don’t know if I said I couldn’t do the consultation but, yes. Basically, yes.

MR HOWE: Well, you couldn’t have done the risk identification - - -

THE WITNESS: Yes.


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MR HOWE: - - - and yet you assumed that public servants working in a largely policy department of the Commonwealth somehow would possess the experience and expertise to properly identify risks as a result of industry consultations.

THE WITNESS: No. To – to take from – to get that information from industry – yes, they did. I mean, they were doing that consultation. I assume that they were putting that job with the wherewithal to actually have effective consultation with industry and to ask industry what those risks were. I don’t think that’s an unfair assumption.

MR HOWE: I see. It’s not something you would have taken on yourself but you were content to make an assumption about it, were you?

THE WITNESS: I assumed, based on what they told me, that they were having effective consultation with industry.

MR HOWE: One final question. I won’t finish before lunch. But madam, you said that you didn’t identify risks and you said that on a large number of occasions. Do you recall that evidence?

THE WITNESS: Yes.

MR HOWE: You’ve told the Commissioner you didn’t rate the risks - - -

THE WITNESS: Yes.

MR HOWE: - - - and you’ve given that evidence on a number of occasions.

THE WITNESS: Yes.

MR HOWE: You’ve said that you didn’t set the tolerance levels - - -

THE WITNESS: Yes.

MR HOWE: - - - and you’ve given that evidence on a number of occasions.

THE WITNESS: Yes.

MR HOWE: And you emphasised that your meagre or modest role at all times was to make recommendations about process.

THE WITNESS: Yes.

MR HOWE: Do you recall giving that evidence?

THE WITNESS: Yes.


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MR HOWE: So is it your evidence that throughout the entire course of your engagement, you did not contribute tittle of hard substantive input into the Department’s risk assessment and risk management planning?

THE WITNESS: Yes.

MR HOWE: Might that be a convenient time.

COMMISSIONER: 2.15.

ADJOURNED [1.05 pm]

RESUMED [2.15 pm]

MR HOWE: Thank you, Commissioner. Ms Coaldrake, do you recall telling the Commissioner that you ultimately ended up using the department’s risk management matrix?

THE WITNESS: We used a blended risk matrix.

MR HOWE: Yes. And in utilising any aspect of the department’s risk management matrix, did you give any thought to how adaptable that matrix may have been to this particular program?

THE WITNESS: So the risk assessment matrix, yes, which was why I recommended using a blend of the department’s risk ratings, the way they worked out as ratings, with my format, because my – the format that I normally use was easier for people to use to carry out the risk assessment process.

MR HOWE: All right. Were you aware at the start of your involvement of the extent to which the Department of Environment had prior experience in the large scale funding of a direct access delivery model of this type?

THE WITNESS: My understanding was that they did not have experience of that nature.

MR HOWE: Let alone when the delivery was to potentially ill-informed or unaware householders by potentially unskilled workforce.

THE WITNESS: I’m not sure about the householders. I wasn’t sure about that. I don’t think I gave that any particular thought. I was aware of the issues with the new entrants and the workforce because of the briefing from the department.


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MR HOWE: So did you not give consideration to the fact that this was funding, in effect, of the full cost of home insulation that would be arranged by the householder with particular installer providers?

THE WITNESS: I did in the context of the discussion with the project team when they briefed me at the beginning of the project, yes.

MR HOWE: Yes. So this is householders making decisions to engage people to get up in their roof space?


MR HOWE: And householders could be sophisticated, but they could all - - -

THE WITNESS: Yes.

MR HOWE: Or a number of them could be very ignorant and ill-informed.


MR HOWE: And you knew that the program involved, in effect, the almost artificial creation of a new workforce.

THE WITNESS: I knew that was the intent of the program.

MR HOWE: Yes, which might consist of people who, up to that point in time, had no particular skills or experience in installing insulation; correct?

THE WITNESS: I didn’t know whether it would take people who had never done that before, as opposed to the existing industry.

MR HOWE: Well, what did you think “new entrants” meant?

THE WITNESS: Well, they might have been people who had had experience previously, or had related experience, but they – I think that that would have meant new companies. So, yes, that may have meant that.

MR HOWE: It may have meant large numbers of completely unskilled and inexperienced workforce members.

THE WITNESS: That was one of the risks that was presented to me, yes.

MR HOWE: Now, having regard to those features, did you entertain the idea that the Department of Environment, as a largely policy rather than service delivery department, was really being trusted with an extraordinarily difficult and complex exercise, to be undertaken in a short period of time and, in all likelihood, involving the need for a skill set and expertise beyond their reach?


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THE WITNESS: Yes.

MR HOWE: Now, you thought all of that could be satisfactorily addressed by you merely facilitating process matters, did you?

THE WITNESS: No, no.

MR HOWE: So what hard advice did you give in and around March and April to address the features that we’ve just been discussing?

THE WITNESS: In the risk management – in the risk register, tabled in the meeting with senior executives on 27 March, in one of the right-hand columns – and we could look at it – there was some additional treatments suggested to try and manage those things.

MR HOWE: Yes. Well, what were they?

THE WITNESS: Well, let’s find it. So I’m looking at the – it’s 002.001.7548, tab 1 in the risk register document. I’m looking at the column, it’s the third column from the right, “Additional action plan” which was – has three entries against those risks that at the time were carrying residual, extreme ratings. So are you with me? Risks 2, 3 and 7. Have you got that?

MR HOWE: Yes.

THE WITNESS: Yes. So that additional action plan where it says:

Extend rebate scheme to 30 September 2009 - - -

MR HOWE: Yes.

THE WITNESS: Next one:

Extend rebate scheme to 30 September 2009.

And the other one:

High level political coordination agreement.

They were the three suggested additional action plans for discussion at that meeting on the 27th.

MR HOWE: So that’s the sum total of your contribution - - -

THE WITNESS: No.


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MR HOWE: - - - to the scenario that I painted for you in terms of the department’s level of sophistication in this particular space, and what was required of it?

THE WITNESS: I would need to look at my speaking notes for that day as well. I’m not sure where they are, but certainly I had talked with departmental officers about the mitigation strategies when they were developing them, and talked about the need – the way to, as I think I said in my evidence yesterday, the way to reduce the consequence – not the consequence, the likelihood, and the consequence was to off-shore or outsource some of the work to third parties that did have that experience.

MR HOWE: Well, what about outsourcing some of the work to risk assessment, risk managers whose job it was to provide hard, substantial input to assist the department to address the scenario we’ve just been discussing? Did that not occur to you to recommend since you weren’t going to be fulfilling that role, yourself?

THE WITNESS: They were already getting it, to my understanding. They were getting that from industry. They then later brought in PWC and Ernst & Young and people to provide risk assessments on compliance. And they continued to bring in other people to provide that assistance to them in that area.

MR HOWE: All right. Well, let’s just take industry. That’s the group that was to largely benefit from this massive injection of funds, isn’t it?

THE WITNESS: That’s my understanding, yes.

MR HOWE: And it’s also the group that was going to be subject to whatever regulatory regime was going to apply. That’s right, isn’t it?

THE WITNESS: That’s my understanding, yes.

MR HOWE: Well, do you seriously suggest that the department should have taken its hard, substantive risk assessment, risk management advice from industry?

THE WITNESS: That’s what – my understanding was where they were getting their advice from.

MR HOWE: Well - - -

THE WITNESS: From industry, and I assumed from training organisations, from the States and Territories that were managing the regulatory advice. They were consulting with all of those people.

MR HOWE: Now, do you know that for a fact, or are you assuming it?

THE WITNESS: I know that they were consulting with all those people, yes.


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MR HOWE: Well, who were they consulting with that you knew, as a fact, possessed the sort of hard experience and expertise that would place that person in a position to give real, substantive advice about how to identify risks, how to assess them, and exactly what steps to take to mitigate them?

THE WITNESS: I’ve seen here documents with names of people that they were going to. I don’t know what the backgrounds of those people were. That’s a question for the department, I think.

MR HOWE: So you – the answer to my question is, you simply don’t know of any such person?

THE WITNESS: I don’t know the qualifications of the people they were going to, no.

MR HOWE: Well, you don’t know the identity of someone who you thought possessed such qualifications, and you don’t know - - -

THE WITNESS: I was shown - - -

MR HOWE: - - - whether such a person even existed. Is that right?

THE WITNESS: I was shown documents this morning with people who were providing that advice for them, and asked if I knew who they were. So I know that now. I didn’t know that then. Is that what you - - -

MR HOWE: I see.

THE WITNESS: Yes.

MR HOWE: I see. So you think you know that now, do you, on the basis of the documents you’ve been shown?

THE WITNESS: I was shown a document this morning that had names in it.

MR HOWE: Yes. Well, that might be right. In relation to paragraph 118 of your statement, in the documents you provided to the Department you made reference to your own long experience in risk related matters in the public sector. That’s true, isn’t it?

THE WITNESS: Yes.

MR HOWE: And in paragraph 118, you draw a distinction between reputational risk on the one hand and operational risk on the other hand. Do you see that?

THE WITNESS: I see the reference to reputational risk. I’m sorry, where’s the reference to operational risk?


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MR HOWE: I’m sorry, I think it will be in a document that I will take you to in a little while. But you are – you did, in fact, draw a distinction, didn’t you, between reputational risk and operational risk?

THE WITNESS: No, I don’t – I don’t recall making that distinction. I mean, there’s a whole lot of different risks. There are operational risks and reputational risks and a whole lot of other risks. So yes, they’re all categorised differently in this risk register.

MR HOWE: Right.

THE WITNESS: Yes.

MR HOWE: In the context of a program like this, what worth is the drawing of any significant distinction between a reputational risk to government and an operational risk to government?

THE WITNESS: It goes to then how you treat them. So once you’ve identified what type of risk they are and the sources for that risk and go through a process to do that, then you can set the right treatments. So that’s the worth of breaking it down like that.

MR HOWE: Now, in paragraphs 7, 8 and 9 of your statement you distance yourself from responsibility of a hard kind in relation to risk assessment and risk management in connection with the HIP, don’t you?

THE WITNESS: Yes.

MR HOWE:

The subject matter expertise comes from the client.

That’s paragraph 8.


MR HOWE: Your role wouldn’t extend to determining what the risks were, in paragraph 9.


MR HOWE: You just give the client the tools and process and guidance on how to do that.

THE WITNESS: Yes.


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MR HOWE: Now, is that how it was explained, do you think, to the innocent reader in the material that you submitted to the Department in order to win the job?

THE WITNESS: Yes, I believe so because the project plan quite clearly works through exactly every step that I would go through with them and then that was discussed with them at the project initiation meeting and they understood and accepted that was how it was going to work.

MR HOWE: Yes. Well, I’m talking about the documentation that you submitted - - -

THE WITNESS: Yes, which has the project - - -

MR HOWE: - - - in order to win the work.

THE WITNESS: Which has a project plan and methodology in there which is a key part of winning the work.

MR HOWE: Yes. Well, the key part of the work was the undertaking a risk assessment, wasn’t it?

THE WITNESS: With the client.

MR HOWE: A key part of the work was undertaking a risk assessment, wasn’t it?

THE WITNESS: Yes, with the client.

MR HOWE: I see. You want to add those words.

THE WITNESS: Yes.

MR HOWE: Is that right?

THE WITNESS: Yes.[2.30 pm]

MR HOWE: All right. Well, go to, please, AGS.002.023.1012. Do you recognise that document?

THE WITNESS: Yes.

MR HOWE: There’s a heading “background”.

THE WITNESS: Yes.

MR HOWE: And then what does the next heading say?


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THE WITNESS: Service – service requirements something – it’s gone away – for risk assessment.

MR HOWE: Now, doesn’t that not convey to the innocent reader that the Commonwealth is wishing to purchase some expertise in relation to risk assessment?

THE WITNESS: I would never - - -

MR WILSON: Well, I think that question is unfair. I think that question is unfair because you’ve got to read it in context.

THE WITNESS: Yes. I was just going to say, I would never just read the header – the heading. And two, I think, is very clear:

Elicitation of risks from the insulation teams.

It was about working with them to draw that out.

MR HOWE: I see. What about consolidation of risks referred to in point 3?

THE WITNESS: Yes. Drawing on what they give me, bringing it together and putting into the risk register.

MR HOWE: Just reflecting it back.

THE WITNESS: Yes.

MR HOWE: Just synthesising. No more than that.

THE WITNESS: There was a conversation going on, so it went on through the – through – starting from the project initiation meeting, through the workshop, through all the toing and froing where I am - - -

MR HOWE: I’m sorry, I’m taking you to the document only.

THE WITNESS: Okay.

MR HOWE: Number 4, vulnerability analysis. Do you think that was directed to some analytical input from you?

THE WITNESS: Yes, and we provided an assessment of the – I can’t remember what it’s called – the dollars.

MR HOWE: Yes. What about five, assessment of risk acceptability. Do you think that was seeking some risk assessment from you?


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THE WITNESS: Correlation is the key word there so pulling together what the risk might be and then – then having that discussion, as I had on the 27th, with the issues around the extreme nature of the residual risk on that – and the inherent extreme nature in that register. That’s exactly what we did have, that discussion with them.

MR HOWE: Well, why is correlation such a key word?

THE WITNESS: Well, because it doesn’t just say assessment of risk, etcetera. It’s pulling together everything the Department and I worked on with my colleague and then going, as I did, I think this risk profile is too high and you need to do some other things to deal with it. You need to take longer, you need to outsource it. That conversation did happen.

MR HOWE: Yes. Well, it doesn’t just say correlation of risk acceptability, does it?

THE WITNESS: No. It’s the two together.

MR HOWE: Well, I suggest to you that that expression naturally informs the person who’s interested in doing the work that some risk assessment expertise is being sought. Do you refute that, do you?

THE WITNESS: No, I don’t refute that. I’m saying that it’s a combination of facilitation, discussion, correlation of what the assessment was and how that then translates into risk tolerance. And the message I gave was, “You have a very high risk profile and - - -

MR HOWE: Yes, there’s no need to go onto the advice that you gave. I’m now asking - - -

THE WITNESS: I’m sorry. I thought that’s what you were asking about.

MR HOWE: - - - you about a document. Do you see? It’s frozen in point of time and it’s the meaning of the words on the page - - -

THE WITNESS: I didn’t write that.

MR HOWE: - - - and what your understanding was.

THE WITNESS: I didn’t write - - -

MR HOWE: You responded to them.

THE WITNESS: Yes, but as to what they meant, you would have to go to the person that wrote them.

MR HOWE: All right. Well, I’m exploring your understanding. Do you see number 7, documentation of risk assessment? Do you think that may have been


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intended to convey to the respondent that the Department was seeking to have a risk assessment by an expert documented?

THE WITNESS: Number 7 is about documenting it the report format explicitly in the context of blah, blah, blah. It’s about the format. That’s how I read number 7.

MR HOWE: So again, just synthesis.

THE WITNESS: Yes.

MR HOWE: Format.

THE WITNESS: Yes.

MR HOWE: All form, no substance.

THE WITNESS: It’s not an easy thing to take the raw product of what a large group of people give you and actually turn it into a risk register that makes sense, so it’s not quite as simple as that but, yes, that’s about the documentation in the format explicitly blah, blah, blah.

MR HOWE: All right. Well, if we could go over the page or down the page, I think, to the heading “Information to suppliers”. Now, this is asking the respondent to ensure that the quotation includes details of various matters which are listed. Do you see that?

THE WITNESS: Yes, I do.

MR HOWE: The first is how you will go about analysing the information.

THE WITNESS: Yes.

MR HOWE: Now, that’s something that the Commonwealth is wanting to have done, isn’t it?

THE WITNESS: And - - -

MR HOWE: Analysis.

THE WITNESS: And we did analyse the documentation that they provide – the information they provided in a – in a form of a list of potential areas of risk that was provided by Mr Chalmers at the workshop on the 23rd as a discussion starter.

MR HOWE: So it did want analysis?

THE WITNESS: Analysis of the information, yes.


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MR HOWE: Yes. And then the methodologies that you will draw upon to undertake the analysis. Now, that is making is pretty clear that they’re wanting you to undertake an analysis.

THE WITNESS: Analysis, not assessment.

MR HOWE: All right:

And why they will be fit for purpose to analyse and document our risks.

Do you see that?

THE WITNESS: Yes.

MR HOWE: And you suggest that that’s just all about process, not about any substance?

THE WITNESS: It’s about analysing and documenting the risks that they told us about, yes.

MR HOWE: Do you say that is about process and not about substance?

THE WITNESS: It is largely about process.

MR HOWE: All right. And the next one:

The tools you will use to explore and assess the project’s risks.

Now, look at those words.

THE WITNESS: So that’s of a - - -

MR HOWE: Firstly, it’s directing your attention to something that you will use for a purpose, and the purpose is for you to explore and for you to assess the project’s risks. Do you see those words?

THE WITNESS: I do see those words.

MR HOWE: Now, is that largely about process and not about substance?

THE WITNESS: I still think that’s about the tools, so it’s about the process that you’re going to use. And the assessment was with the department. It was – it’s not something that I would ever undertake in isolation of my client, ever.

MR HOWE: I’m not suggesting to you that you were meant to do anything other than work with your client in relation to these matters. I am exploring with you whether or not the nature of the work expected of you was wholly of a process kind


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that didn’t involve an expectation of any substantive input of expertise on your part. You appreciate that’s what I’m exploring with you, isn’t it?


MR HOWE: So I’m not suggesting that any of these things indicate that you were meant to ignore your client or work independently of them. You understand that?

THE WITNESS: Okay.

MR HOWE: And what I’m suggesting to you is that the plain meaning of the words on the page is that you were expected to utilise tools in order to explore and assess the project’s risks, and that is something that the Commonwealth was expecting of you as a matter of substance. That’s right, isn’t it?

THE WITNESS: I can’t answer for what the Commonwealth was expecting. I can only answer for what I responded with in my methodologies which said, this is how I will work with you to do these things. And that was an acceptable methodology to the Commonwealth. They accepted that proposal and they worked with me in that way.

MR HOWE: Well, we will come to that in a moment. But do you accept, as you sit there, with the benefit of hindsight, that the Commonwealth may well have been expecting more of you than you were intending to proffer?

THE WITNESS: If they had, they would have not accepted the proposal.

MR HOWE: I see. And go to point 2 down, your experience in risk analysis in a government context. Now, that rather suggests that the department is looking for some hard run risk analysis from you, doesn’t it?

THE WITNESS: Risk analysis as opposed to – well, they wanted me to have that experience, yes.

MR HOWE: Yes. To what end? Just to hold their hand as they underwent a conversation amongst themselves, and wandered around the risk planning, risk management landscape. Is that what you think you were doing?

THE WITNESS: I can’t – I can’t answer for what they were expecting.

MR HOWE: All right. Well, let’s have a look at what you said you would do. If you could go, please, to 002.001.1886. It has got an MIN in front of it. Do you need the MIN? Yes, sorry. Do you need the first page, 1884?

COURT OFFICER: Yes, thank you, Mr Howe.


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MR HOWE: Now, if we go to the heading Introduction, and you will see the fifth paragraph beneath that heading. It refers to you having held key management roles, including in government.

THE WITNESS: Yes.

MR HOWE: And then there’s reference to you being supported by Eric Chalmers.

THE WITNESS: Yes.

MR HOWE:

A highly experienced consultant with extensive risk management, experience across many sectors.

Do you see that?


MR HOWE: Continuing:

Available to begin work on 16 March. By offering you two senior consultants with similar skills and experience, we can ensure it receives an optimum outcome.

Now, you will agree that the natural meaning of those words is to convey to the innocent reader that you and Mr Chalmers both possess risk management experience and expertise.

THE WITNESS: Yes.

MR HOWE: And then if you go down to the next heading, Response to Service Requirements, and the heading Minter Ellison Consulting – sorry, the paragraph commencing with those words.

THE WITNESS: Yes.

MR HOWE: There’s reference to:

Any problem will be very visible.

THE WITNESS: Yes, will be – yes.


The Department of Environment will, therefore, need to know all the areas of the project that might go wrong, the nature of each risk and have in place the


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capacity to cover these risks, and to mitigate exposure to the full extent possible.

THE WITNESS: Yes.

MR HOWE: Now, don’t you think that the innocent reader of that paragraph would be led to believe that you would have substantive input into the department identifying areas of the project that might go wrong, the nature of the risks and what mitigation strategies to deploy?

THE WITNESS: Well, it doesn’t say that so I don’t know what the innocent reader might draw from that. It says that DEWHA needs to know that and, yes, we will help them come to that knowledge. That’s how I read that. That’s how I wrote that.

MR HOWE: And do you say that that properly conveys to the fair minded reader that your role was limited to matters of process and not substance?

MR WILSON: Can I just object to the framing of the questions, Commissioner; the innocent reader, the fair minded reader. This isn’t an exercise in objective construction. This is a witness who is dealing with a department who has commissioned her, and who has a knowledge - - -

COMMISSIONER: I think we can skip the innocent reader part.

MR HOWE: I’m happy to do that. So do you say, do you, that that would or should have conveyed to the department that your contribution would be limited to matters of process, and not substance?

THE WITNESS: No, that sentence says DEWHA needs to know these things, and this is what we understand. So it’s showing our understanding of their requirement. It doesn’t say what our role is in that. That comes with the project plan and methodology which outlines how we would go about helping them come to that knowledge.

MR HOWE: Right. And, likewise, with the second paragraph - - -

THE WITNESS: Third.

MR HOWE: I want to suggest to you that it conveys to the department that you were well-placed to have input of a substantial kind - - -

THE WITNESS: Sorry, which paragraph?

MR HOWE: The paragraph beginning:

The task for this consultancy is thus - - -


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MR HOWE: And then it goes on.


MR HOWE: The task for this consultancy, you are suggesting, is basically to identify risks and to help with their mitigation.

THE WITNESS:

To review the policy and then develop the realistic risk management plan –

brackets, with them –

including a set of strategies.

Yes. That’s the deliverable.

MR HOWE: So you’re saying that what’s described there is input of a process kind, is it?

THE WITNESS: Yes.

MR HOWE: All right.

THE WITNESS: Of a consulting kind. This process thing worries me.

MR HOWE: Then we go over:

The successful consultants need to bring a combination of –

and the first is, demonstrated project management skills.

THE WITNESS: Yes.


In particular, to know where a project is stressed, poorly thought out or inadequately managed.

Do you see that?

THE WITNESS: Yes.

MR HOWE: Now, isn’t that, in effect, telling the department that the successful consultants will need to be able to identify risks?


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THE WITNESS: In relation to the project management, yes. And we did that by saying, you need longer to do this or you need to get part of it off-shore. So, yes, in relation to project management. Yes.

MR HOWE: All right. So it was part of your job then, was it?

THE WITNESS: In relation to - - -

MR HOWE: To identify risks that might arise in the course of managing a project.

THE WITNESS: Yes, in project management.

MR HOWE: And then the next bullet dot point:

A deep understanding of risk, and a capacity to identify where the policy and project both have inherent risks.

Now, that’s pretty unambiguous, isn’t it?

THE WITNESS: Yes.

MR HOWE: It’s not talking about mere matters of process, is it?

THE WITNESS: No.

MR HOWE: And then it goes on:

This requires a combination of research and facilitation skills.

Now, do you see the reference to “research”?

THE WITNESS: Yes.

MR HOWE: Now, that’s indicating that the consultants who were responding to this request should be able to undertake research with a view to the identification of risks that might not otherwise be apparent to the client. That’s right, isn’t it?

THE WITNESS: We did research of the documentation they provided to us in the time available to us, as outlined in the project plan and then we facilitated the development of the initial risk register and risk management plan as outlined.

MR HOWE: All right. Well, look at the next one:

The capacity to develop mitigation strategies in consultation with departmental staff.

Now, you will agree that it’s there talking about your capacity, isn’t it?


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THE WITNESS: Yes.

MR HOWE: And your capacity to do what? To develop mitigation strategies?

THE WITNESS: In consultation with etcetera, etcetera.

MR HOWE: Yes. Not simply to act as a mirror and reflect back to the department what might already be known to it.

THE WITNESS: We – we’ve just looked at where we made additional suggestions. We would – in conversation with them all the time about the sorts of things they were putting in, but it was generated from them. It’s – it’s – as a consultant, I wasn’t just sitting there soaking up. You’re having a conversation with them throughout. Lots of meetings, lots of versions of the documents but, essentially, the department had to come up with things that it could do. We couldn’t tell them what they could do.

MR HOWE: Well, that was a long answer by reference to a static document and words on a page.

THE WITNESS: I’m trying – trying to explain it so it’s clear to everybody how it worked.

MR HOWE: All right. And then you will see the depiction of the methodology. It includes things like identify risk, analyse risk, likelihood and consequence, evaluate the risk, treat the risks. Now, do you accept that the department would not necessarily have understood from what’s depicted there that you would simply be holding their hand on process type matters?

THE WITNESS: That diagram is from the Australian Standard and the sentence says:

Our proposed methodology is closely aligned to that.

But the actual methodology is what’s in the project plan and this was - - -

MR HOWE: Yes, I know that. I’m asking you if you look the figure that’s depicted there - - -

THE WITNESS: But you refer to this as our methodology. This is not our methodology. This was the Australian Standards standard methodology and I - - -

MR HOWE: All right.

THE WITNESS: Okay.


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MR HOWE: Well, now that you’ve got that established, if you look at the methodology, it’s referring to identifying risks, analysing risks, evaluating risks, treating risks. Now, what I’m asking you to accept is that when you reflected this to the department in your response to the RFT, they would have understood that you were asserting that you had expertise to perform these tasks.

THE WITNESS: Yes.

MR HOWE: That’s right, isn’t it?

THE WITNESS: Yes. But not the – I had the expertise but the methodology was doing every single one of those bits with them. It wouldn’t have – we couldn’t have worked it any other way.

MR HOWE: Yes. And then if we go to the proposed project plan which is later on the document, you will see there’s, “1 Analysis of Existing Materials”.

THE WITNESS: Yes.

MR HOWE: I think it’s up.

THE WITNESS: I think it’s – yes, it’s further up.

MR HOWE: Yes. And then if you go down, you will see the third bullet dot point in that section which refers to documentation of risks already identified. Do you see that?

THE WITNESS: The third last dot point, yes.

MR HOWE: And then you had the risk identification workshop.

THE WITNESS: Yes.

MR HOWE: And the purpose of that is to discuss risks already identified by the project team.

THE WITNESS: Yes.

MR HOWE: And to identify, analyse, and assess other risks.

THE WITNESS: Yes.

MR HOWE: Now, I want to suggest to you that when you were proposing that project plan, you were representing to the department that you had experience and expertise of a kind which would permit you to render substantial input into the identification, analysis and assessment of risks.


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THE WITNESS: I don’t see the word “substantial” there and I don’t think it says that.

MR HOWE: All right. And then when it comes to the next topic Risk Analysis.

For each identified risk, conduct an analysis.

Who is there being spoken of in terms of conducting an analysis?

THE WITNESS: It actually was done partially in the workshop and then - - -

MR HOWE: No, I’m not asking you what in fact happened. I’m asking you what you intended to convey when you put those words on the page in response to the RFT. Now, who was to conduct the analysis in question?

THE WITNESS: The consultants with the department in a process that took from the 19th to the 27th via the workshop and sort of backwards and forwards on emails and meetings and that’s in fact what happened.

MR HOWE: All right. And if you could go down the page, please, Operator. So this is still under the heading Risk Analysis. You will see:

Review the inclusion and detailing of risks.

Now, who was to do that?

THE WITNESS: Now, that was me to make sure that we had risks versus sources versus consequences, so it’s around just the wording, the – the sort of allocation of what came out of the workshop into the right bit of the register.

MR HOWE: Please, could you limit yourself to the meaning of these words on the page and not what subsequently happen.

MR WILSON: Well, what utility is that?

MR HOWE: Now, you will see the next bullet dot point - - -

MR WILSON: Sorry, I should have stood up. What utility is that to this Commission inquiry?

COMMISSIONER: What’s that? What – that last - - -

MR WILSON: “Limit yourself to the words on the page and don’t give any evidence about what happened subsequently.”

COMMISSIONER: Yes. Mr Howe, for a start, these documents that we’ve looked at – the last two – the invitation and the tender document, one may say – one may


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argue they speak for themselves but if they don’t, you’re asking her, you know, about the meaning of it and what she thinks the department would have understood by it. But has this been raised with the witnesses that have given evidence? You see, you’re saying to her the department would have understood this but I don’t think any person in the department has said “I understood it” in the way that you, Mr Howe, are putting it.

MR HOWE: Well - - -

COMMISSIONER: Am I wrong?

MR HOWE: Well, I think you are, Commissioner, and we can review the transcript and give you references but - - -

COMMISSIONER: I will take your word for it.

MR HOWE: - - - my understanding is that the overall burden of the evidence from departmental officers is that they were purchasing, in effect, substantive expertise in terms of risk identification, analysis and mitigation.

COMMISSIONER: But those matters need to be defined and that’s what we’re arguing about with her.

MR HOWE: Yes, yes.

COMMISSIONER: But none of them, as I recall, are complaining of the quality of her work or her interpretation of the contract that she’s now putting up, do they?

MR HOWE: I don’t think they understood, though, with respect, that she was limiting herself to matters of process rather than substance and, in effect, withholding substantive input because it wasn’t part of what she says she wanted to do.

COMMISSIONER: But no one has asked those earlier witnesses about that, have they?

MR HOWE: Well, I think they were asked.

COMMISSIONER: Okay.

MR HOWE: A lot of them.

COMMISSIONER: All right. Is that your recollection, Mr Wilson?

MR WILSON: I was going to invite the Commonwealth to give us those transcript references, Commissioner.


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COMMISSIONER: Well, it would take some time to find and I don’t want to waste time now.

MR WILSON: Because it’s clearly being put on a basis that has just been identified that the departmental officers thought they were buying something different to what they were getting.

COMMISSIONER: Yes. And I don’t think that they have said that, and Mr Howe thinks that they have said that.

MR WILSON: And nor do I think they were asked that.

MR HOWE: It’s in various documents .....

COMMISSIONER: No. Anyway, that’s my recollection, Mr Howe, but it’s probably quicker for you to continue rather than look it up at this stage.

MR HOWE: Yes. Yes. Could you look at the next bullet dot point, Ms Coaldrake:

Confirm our initial analysis of risk and evaluation of existing controls.

Now, who does the “our” refer to?

THE WITNESS: To Minter Ellison Consulting.

MR HOWE: Yes. Now, do you say that what you were representing there was input of a process kind only?

THE WITNESS: Yes, because I think that refers to the analysis of risks already identified by the department, which was referred to further up.

MR HOWE: I see. And go down two dot points:

Identify and cover other potential issues.

THE WITNESS: Yes.

MR HOWE: Now, who was going to be identifying and covering other potential issues - - -

THE WITNESS: Us in - - -

MR HOWE: - - - which may need to be included?

THE WITNESS: Us in discussion with the department. All of this is in discussion with the department.


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MR HOWE: Well, do you say that was limited to process type input?

THE WITNESS: “Process” is a difficult work – difficult word. It was consultation and facilitation. I – I prefer those words to “process”.

MR HOWE: Yes. Well, look at the next dot point:

Consider risk management processes.

Now, that rather suggests that the foregoing, we’re dealing with something other than - - -

THE WITNESS: No.

MR HOWE: - - - mere procedural matters.

THE WITNESS: No. That from – from memory, that relates to what – how they were managing their risk and then feeds into task 4 below which is drafting the risk management plan which was part of the project plan, so to do number 4 and number 3, I had to look at how they were managing their risk or not.

MR HOWE: All right. Could the operator go down to a large heading with the number 4 beside it Response to Information for Suppliers. Now, the subheading is:

How you will go about analysing the information we will provide.

Do you see that?

THE WITNESS: Yes.

MR HOWE: And then it’s stated, “We will review the documents - - -

THE WITNESS: Yes.

MR HOWE: - - - to gain a full understanding”, etcetera. Next one, “Identify drivers, risk areas and vulnerabilities”.

THE WITNESS: Yes.

MR HOWE: And then, “Discern existing and potential mitigation strategies”. Now, do you say that that describes something of a process kind only?

THE WITNESS: Well, yes. You read the documentation that they gave us and – as we did or as Eric did. As a team we did that, I guess. And then went into the workshop with a view – and it was written down – of where potential risk areas might come from. We later provided – sorry, I’m just losing the word – the dollar


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estimate on what the impact of those risks might be. That happened later but this – this was part of reviewing the documentation given to us from the Department.

MR HOWE: Yes.

THE WITNESS: Yes.

MR HOWE: I suggest to you that you’re seeking to distance yourself in terms of the level of input that you had into risk identification, risk planning, risk management and risk mitigation.

THE WITNESS: I’m not seeking to distance myself from anybody. I’m – or anything. I’m trying to explain exactly how it worked. Risk management we could never do. Risk management was absolutely and must always be the Department’s issue. We could not manage risk. We weren’t managing the project so risk management is not something we could do. I’m trying to explain how the process works to and from a client, and this is not an unusual situation. This is a standard – this is how we run every consultancy. You work with the client, with their expertise, drawing it out in a way as an objective observer to allow you to reflect it back to them, and then they can decide.

MR HOWE: All right. If we could go down to 4.7 under this heading. You will see there the opening paragraph, halfway through it:

You need consultants who are confident about the advice they are giving you.

[3.00 pm]THE WITNESS: Yes.

MR HOWE: And:

Who can give you that and who can give you that advice on the spot -

THE WITNESS: Yes.

MR HOWE:

…without seeking clearance by supervisors.

THE WITNESS: Yes.

MR HOWE: Now, do you say that’s a mere matter of synthesizing and reflection back - - -

THE WITNESS: No.

MR HOWE: - - - or does it comprehend something a bit more substantive?


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THE WITNESS: Yes. Skilled facilitation and consultation.

MR HOWE: I see. And then, in relation to the description of your experience and expertise – if the operator scrolls down a little bit.

THE WITNESS: Yes.

MR HOWE:

Margaret now specialises in corporate governance advice, compliance review and development, risk assessment –

THE WITNESS: Yes.

MR HOWE: Comma, “facilitation”.

THE WITNESS: Yes.

MR HOWE: Now, you were advancing yourself to the Department as someone who had expertise in risk assessment.

THE WITNESS: Yes.

MR HOWE: Not just facilitating the Department in a conversation with it in order to reflect back to it what it already knew.

THE WITNESS: I had that expertise. That expertise involved working, in this case, with them closely to draw out from them the identification of risks and helping them carry out that risk assessment. In other words, when I walked into the workshop probably half the people in that or more had never used a risk matrix. They had never – never stood in front of a risk on a wall and gone, “What’s the likelihood of this happening? What is the consequence of this happening? This is how it works.” It was as basic as that in some instances. That had to be explained to a lot of people involved in the program, including very senior people. So - - -

COMMISSIONER: Really, you don’t stop at facilitation, do you? You actually then take - - -

THE WITNESS: You’re training, though. Trying to give them the skills.

COMMISSIONER: But you take what results from the facilitation and embody it into a complex document.

THE WITNESS: Yes, but it pretty much came across as is. It’s just about getting it – getting it correctly into the register and making sure that the sources and consequences on the risks are appropriately phrased so that they can be managed. And that’s – yes.


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MR HOWE: Well, if the Department or officers thereof come along and say they thought that they were getting risk assessment expertise from you, you would say, would you, that it’s not to be found represented in this document?

THE WITNESS: I would have expected them to say that to me at the time.

MR HOWE: So, you did provide a service in terms of risk assessment?

THE WITNESS: I provided the service they asked for which included working with them on the risk assessment.

MR HOWE: And which included you exercising your own expert mind and judgment - - -

THE WITNESS: Yes.

MR HOWE: - - - for the purposes of advising the Department.

THE WITNESS: Of – of taking what they gave me and putting it into their format in their framework and giving it to them to manage.

MR HOWE: Yes. Do you - - -

THE WITNESS: That was the role.

MR HOWE: Do you still say to the Commissioner that you didn’t undertake risk assessment in the course of your - - -

THE WITNESS: The – the - - -

MR HOWE: - - - engagement with the Department?

THE WITNESS: The assessment bit – the assessment bit is the likelihood and the consequence of each risk. No, I did not do that. The Department did that.

MR HOWE: And do you still say that it wasn’t part of your job to identify risks?

THE WITNESS: No, except from the documentation they gave us and the discussion with them and then reflecting it back into the thing. So any – any distilling of the words was done with them.

MR HOWE: I see. And if we go under Eric Chalmers as a heading in the second paragraph: “Eric has extensive experience” - - -

THE WITNESS: Yes.

MR HOWE: - - - in various things, one of which is risk assessment.


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THE WITNESS: Yes.

MR HOWE: Do you see that?

THE WITNESS: Yes.

MR HOWE: “Research and advisory roles”. Do you see that?

THE WITNESS: Yes.

MR HOWE: “Extensive experience in achieving practical improvements”, etcetera.

THE WITNESS: Yes.

MR HOWE: Now, you think that just contemplates, do you, assistance with matters of process?

THE WITNESS: Taking what they tell us and reflecting it back to them in the formats that they gave us, yes.

MR HOWE: Yes. So you recite that as a mantra, I suggest, because you’re concerned to distance yourself from the risk identification, risk assessment and risk mitigation that the Department ultimately adopted including partly on the basis of your input. That’s right, isn’t it?

THE WITNESS: No, I’m not seeking to distance myself from anything. I’m trying to reflect exactly how I work with every client, not just this client. This is how I’ve worked as a consultant since 1996. You work with the client to draw on their expertise, to share the skills so that when you walk out the door they know what they’re doing.

MR HOWE: I see. Now, in paragraph 19 and 20 of your statement, you’ve devoted two whole paragraphs to describing other people, their roles and what you understood to be their experience but you make no mention of yourself performing a similar sort of exercise. Can you explain that?

THE WITNESS: I was responding to – this statement was drafted following an informal interview with Mr Wilson and I had been asked those questions as part of that and so that’s why it was still in there, because I was asked about the expertise of Ms Griffiths and Ms O’Brien.

MR HOWE: Yes. And if we could go to document AGS.002.007.1563. Now, who drew up that document?

THE WITNESS: That would have been me.


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MR HOWE: And at 11.20, we have risk identification, review of risks already identified and then identify other risks.

THE WITNESS: Sorry. Yes, okay. Yes.

MR HOWE: And some of them are operational. Do you see that?

THE WITNESS: Yes.

MR HOWE: And external.

THE WITNESS: Yes.

MR HOWE: You will agree that death or injury to installers in the context of this program pretty much belongs naturally as one of the other risks which might arise?

THE WITNESS: It’s as a consequence of probably the operational and external risks. So – yes.

MR HOWE: And then, if we could go, please, to MIN.002.001.7097 and it’s the second page. Now, do you recognise that document?

THE WITNESS: I’m sorry, what was the first page? So it’s an email from Eric to me with an attachment so – okay.

MR HOWE: It’s really the next document that I want to ask you about.

THE WITNESS: So that – it looks like it would have been a draft from Eric to me.

MR HOWE: Yes. Well - - -

THE WITNESS: Anyway, it - - -

MR HOWE: So this is a document being worked on by Minters Consulting, isn’t it?

THE WITNESS: Yes.

MR HOWE: As indicated by the heading up the top.

THE WITNESS: Yes.

MR HOWE: And you’ve got Purpose and Background.

THE WITNESS: Yes.

MR HOWE: You were asked questions about this yesterday. Do you see under Background:


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Minter Ellison Consulting has worked closely with the HIP team to identify and analyse risk.

THE WITNESS: Yes.

MR HOWE: Do you see that?

THE WITNESS: Yes.

MR HOWE: And you told the Commissioner I think that that’s just looseness in language to the extent it suggests substantive input?

THE WITNESS: Well, it says quite clearly “worked closely” so making sure that the risk was identified and analysed in line with the methodologies, and put into the register appropriately. So, yes.

MR HOWE: Well, with respect, madam, it’s suggesting that your company exercised a substantive role in relation to identification and analysis of risk, isn’t it?

THE WITNESS: Well, I don’t think it says that but that may be - - -

MR HOWE: Does it convey that?

THE WITNESS: I don’t think it does, but - - -

MR HOWE: All right.

COMMISSIONER: Mr Howe, this point, I understand it. All right. And she doesn’t agree with it, and she said that probably 20 times now.

MR HOWE: Yes.

COMMISSIONER: All right. I don’t think going over it again and again with different documents is going to take it any further.

MR HOWE: Yes. Could I just explore one further aspect of this document, under the heading Issues, and then I will leave the document:

The consultants have identified the source and scope of the risks.

Do you see that?

THE WITNESS: Yes.

MR HOWE: Pure looseness of language, is it?


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THE WITNESS: Again, based on the information given to us from the department, yes.

MR HOWE: Yes. Could I then, Commissioner, just abbreviate the further questioning of this witness by identifying some documents that we think are relevant - - -

COMMISSIONER: To this, yes.

MR HOWE: - - - to the task performed. And then they will be on the transcript.

COMMISSIONER: Yes.

MR HOWE: And that might be of assistance to us when we’re down the track, and perhaps the Commissioner - - -

THE COMMISSIONER: Yes, by all means, that’s a shorter way of doing it.

MR HOWE: Yes. So it’s MIN.002.001.7103, MIN.002.001.0698, MIN.002.001.7447, and the following documents 7448, and MIN.002.001.5877 and the following two pages 5878 and 5879, and also 5880. And if we could just bring up this document. There’s an unrelated question I wanted to ask, Commissioner, and I’ve nearly finished. If we could bring up – the first page of the document is, I think, MIN.002.001.5875, if we could bring that up. So that’s an email, and if you could go down to the second page – or the third page, just so the witness can identify the document. Just there, you will see what that document is.

THE WITNESS: Yes.

MR HOWE: And then if could scroll down four or five pages to page 5881 at the top. Now, just pausing there, item 9 – and I understand it, this is as at 25 March. Is that right?

THE WITNESS: I believe that was the date of the meeting, yes. So I’m not sure whether this was the day before, anyway – but I will take it as that date.

MR HOWE: And in relation to item 9, it says:

Procurements, substantial procurement needs (scope is new to department) may not be fulfilled by 1 July 2009.

And then there’s a soft dot point, Procurement processes timeframes.

THE WITNESS: Yes.

MR HOWE: The likelihood of that is rated as “almost certain”. Do you see that?


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THE WITNESS: Yes.

MR HOWE: Now, that’s pretty emphatic.

THE WITNESS: Yes.

MR HOWE: Does that prompt any recollection on your part that as at 25 March 2009 there was a view held within the department that it was almost certain that procurement couldn’t be fulfilled by 1 July 2009?

THE WITNESS: Well, that’s what it says there so I take as a given. I do remember concern about the timing generally. So that - - -

MR HOWE: All right. Do you recall who you might have discussed that topic with so as to account for its inclusion in this document in those terms?

THE WITNESS: Well, it’s – no, I’m sorry, I can’t.

MR HOWE: No, if you can’t, that’s fine.

COMMISSIONER: What’s the date of that, Mr Howe? That was 26 March, was it?

MR HOWE: The 25th I think.

THE WITNESS: Yes. So it probably came out of the workshop on the 23rd and discussions that followed on the 24th and 25th .

MR HOWE: And this is the same document, just for the Commissioner’s benefit. If you scroll down, operator, to item 15, at this point it’s apparent that installer injury has the asterisk which is the subject of specific inclusion.

COMMISSIONER: Yes. The one we’ve looked at a few times.

MR HOWE: Yes. And, likewise, 19.

COMMISSIONER: When we talk about procurement in that one, Ms Coaldrake, is that in relation to installers or in relation to the materials in that?

THE WITNESS: From the way that was written, it would have been procurement generally.

COMMISSIONER: Both.

THE WITNESS: There was a big procurement program, and you would expect a large procurement plan to be in place and specific procurement officers, which, in fact, there were at some point. I don’t know. Some - - -


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MR HOWE: Yes. And if you could go down, operator, to the last page in that document. I think it must be – it’s 5885 up the top. All right. Now, just pausing there, there’s a reference to “How do we deliver best-practice regulatory framework?” And then it looks as though it’s “NA,” not applicable. Can you explain that?

THE WITNESS: Can I see the page before, because there’s no heading on the top of that column. So it’s a reference to above. So that suggests it’s just not in the above risk table. So it would have come out of the consultation following the preparation of that risk table. So that confirms my supposition that that risk table come out of the workshop, and then there are a couple of other things that have come up since then.

MR HOWE: Yes. And I’m asking you whether you have any recollection of why that topic attracted the annotation “NA,” which I take to mean not applicable.

THE WITNESS: Because it came – I would say it has come after the workshop. So it has come out of the consultation between the workshop and this date, which was only a day, but there were meetings all the time.

MR HOWE: But why the words “not applicable”?

THE WITNESS: Because - - -

MR HOWE: Why would that not be applicable?

THE WITNESS: It was only not applicable because if you go back to the top of the column, reference to the above risk table – so it wasn’t in the above risk table.

MR HOWE: I see. So - - -

THE WITNESS: Feedback from the branch head – so I would say the branch head has said these are extra risks, and they weren’t identified in the workshop. The branch head must not have been in that workshop.

MR HOWE: I see. And so the next row - - -

THE WITNESS: It’s Mr Keefe.

MR HOWE: - - - if you could scroll down a bit, operator, which is in bold – a bit further:

Regulation. The existing regulatory framework may not adequately support the program’s goals.

Do you see that?


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THE WITNESS: Yes.

MR HOWE: So that hasn’t attracted any annotation in the right column, but it is emboldened. Are you able to recollect anything about that entry?

THE WITNESS: No. It looks to me like it relates to the line above it. I – as I said, this – this is headed – this table is headed Feedback From the Branch Head. I may not have even – I might have been sent this or – yes, I’m – I’m sorry. I can’t provide any more light on that except that it seems to relate to the one above, and it was a new area of risk.

MR HOWE: Nothing further. Thank you, Commissioner.

COMMISSIONER: Thanks, Mr Howe. Mr Treffers.

<EXAMINATION BY MR TREFFERS [3.20 pm]

MR TREFFERS: Ms Coaldrake, I want to take you to the period after your tender was successful. That’s the period that started the project on 16 March and completed on 9 April, and firstly I would like to take you to document MIN.002.001.2144. Now, this is an email that you sent to Juliana Marconi in the department, and I think this related to the first meeting that you had with her on 16 March 2009.

THE WITNESS: Yes.

MR TREFFERS: Was that the first occasion that you had met her?

THE WITNESS: Yes. I don’t recall that I met her before I put the proposal in.

MR TREFFERS: Okay. If we scroll down to the next page. The document, then, would be MIN.002.001.2145. Now, this was attached to that email, and this is an agenda that you had prepared for that first discussion/meeting with Ms Marconi?

THE WITNESS: Yes.

MR TREFFERS: And I think you were asked earlier this morning in relation to attendees at the workshop – you will see from the agenda item there at 5.10 you were proposing a discussion with her in relation to who were the attendees for that workshop proposed for - - -

THE WITNESS: Yes.

MR TREFFERS: - - - 23 March; is that right?

THE WITNESS: Yes.

8.4.14 P-2351 M. COALDRAKE XN©Commonwealth of Australia MR TREFFERS

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MR TREFFERS: And then if we scroll to the next page. Now, that’s the revised project plan, and you saw that a few moments ago in the sense of the project plan that was attached to your response to the RFT.

THE WITNESS: Yes. And the revision would have been to dates.

MR TREFFERS: And revision appears to dates. And if you scroll down, you will probably see some of those changes there - - -

THE WITNESS: Yes.

MR TREFFERS: - - - in red to the dates, and that flows through into to the next page. Now, in relation to the project plan, that was your outline to the department of the work that you would perform under the consultancy?

THE WITNESS: Yes.

MR TREFFERS: And at any time, did Ms Marconi or anyone else in the department say to you that that project plan did not accord with their expectation of the work that you would perform?

THE WITNESS: No.

MR TREFFERS: And you also attached to that document, as you scroll down, your risk assessment matrix- - -

THE WITNESS: Yes.

MR TREFFERS: - - - in draft, and that was, again, for the purposes of giving Ms Marconi - - -

THE WITNESS: Discussion.

MR TREFFERS: - - - an understanding and for discussion.

THE WITNESS: Yes.

MR TREFFERS: As well as document – if you go down further – which is headed Draft. Keep going. Yes, which sets out the objectives of the consultation.

THE WITNESS: Yes.

MR TREFFERS: The consultation – how it will all be performed.

THE WITNESS: Yes.


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MR TREFFERS: You were giving a clear indication to the department that there was a lot of consultation associated with this project, and that was your understanding of how it would proceed.

THE WITNESS: Yes.

MR TREFFERS: Thank you. Now, you then had the workshop that we’ve heard about on 23 March.

THE WITNESS: Yes.

MR TREFFERS: I want you to go now to document MIN.002.001.2469. Now, that’s an email that you sent the day after the workshop - - -

THE WITNESS: Yes.

MR TREFFERS: - - - on 24 March to Ms Marconi, attaching the raw outcomes of the workshop.

THE WITNESS: Yes.

MR TREFFERS: The next document is attached to that, which is the attachment. Yes. Now, if you would scroll down. Keep going down. Now, you were asked some questions a short moment ago by Mr Howe about procurement processes ..... certain, and you will see that this is the outcome from the workshop meeting of the 23rd, and I think he was referring to a document on 25 March. So this confirms that that was raised at the workshop - - -

THE WITNESS: Yes.

MR TREFFERS: - - - by the attendees at that workshop. If you would scroll down to the next page, and down further. Yes. That box, there, industry – sorry, down further:

And shonky quality installations, dodgy installers, businesses, injury to installers, poor quality installation, installer injury, installations of poor quality -

All items identified at the workshop. Thank you. Now, I would just like to go to document MIN.002.001.3600. And yesterday you were asked some questions about the meeting that took place on 27 March.

THE WITNESS: Yes.

MR TREFFERS: And if you scroll down there, the email from Ms Marconi to you dated 24 March. You saw that email yesterday with a list of participants - - -


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THE WITNESS: Yes.

MR TREFFERS: - - - indicating that the meeting was between 1 and 2 pm on 25 March.

THE WITNESS: Yes.

MR TREFFERS: In the course of your evidence yesterday, your understanding was that there was a meeting later in the day.

THE WITNESS: Yes.

MR TREFFERS: And if you would go to document MIN.002.001.3604.

COURT OFFICER: Mr Treffers, ..... three six – what were the last - - -

MR TREFFERS: 3604.

COURT OFFICER: Zero four.

MR TREFFERS: Keep going down. Yes. You will see there there’s an email from Ms Marconi to you on 27 March which changes the time of the meeting to 5.15 to 6 pm.

THE WITNESS: Yes, and also it tells me about a change in the – in the register.

MR TREFFERS: So does that indicate to you that there was only one meeting on that day at 5.15 rather than - - -

THE WITNESS: I recall it being very late, yes. It was a Friday.

MR TREFFERS: Thank you. Now, if you go to document MIN.002.001.2110. Now, this is an email on 26 March 2009 from Eric Chalmers to Ms Marconi. This refers to a meeting on the previous day, on 25 March.

THE WITNESS: It’s actually from my secretary, Elly Simpson.

MR TREFFERS: And – but it’s signed by Eric?

THE WITNESS: Yes. He must have been somewhere else.[3.30 pm]

MR TREFFERS: Scroll down. Just the email. Now attached to that email, if you go to document MIN.002.001.2111. This is the attachment to that email which, again, is the outcomes of the risk identification workshop held on 23 March.

THE WITNESS: Yes.


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MR TREFFERS: Adjusted following discussions with the Department - - -

THE WITNESS: Yes.

MR TREFFERS: - - - on 25 March. And if we go to – scroll down to the bottom of the second page. At 11 we have installer quality. Going on to the next page and the document still has in there “Poor quality installation, installer injury”.

THE WITNESS: Yes.

MR TREFFERS: That remained in the documentation as at 26 March 2009.

THE WITNESS: Yes.

MR TREFFERS: If we go to document MIN.002.001.2461. Go down.

THE WITNESS: It’s not the right document.

MR TREFFERS: It seems to be a different one to the one I’ve got.

COMMISSIONER: Mr Treffers, while that is put up, this is directed towards showing precisely when installer safety got dropping out. Is that right?

MR TREFFERS: Correct. Yes. So this is an email that you sent on the morning of 27 March - - -

THE WITNESS: Yes.

MR TREFFERS: - - - 9.54 am, in which you forwarded a number of documents for the purposes of the meeting to be held that afternoon?

THE WITNESS: Yes.

MR TREFFERS: And if we could go to document MIN.002.001.2646 which is the document that was attached to that email. Yes. And if you scroll to the second page. I just want to draw your attention to item 5, the reference to time, and you will see the last dot point there:

Inadequate delivery within timeframe.

THE WITNESS: Yes.

MR TREFFERS: And then the next section, section 6, installation quality, and you will see that refers to poor quality installation, installer injury - - -

THE WITNESS: Yes.


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MR TREFFERS: - - - etcetera. It’s part of the document that you sent to Ms Marconi on the morning of 27 March.

THE WITNESS: Yes.

MR TREFFERS: Now, if you go to document MIN.002.001.0117. Now, this is an email that’s sent from Ms Marconi to you on the morning of 27 March 2009. The time said there is 11.13 am. The document that I have before me, which is a copy of the email, the time on it is 10.13 am. That’s important because if you scroll down to the next document which is the previous email that you had sent to Ms Marconi that we just referred to - - -

THE WITNESS: Yes.

MR TREFFERS: - - - and the time there is 10.54 am which is one hour later on that copy than the earlier email that I showed to you. Yes?

THE WITNESS: Yes.

MR TREFFERS: Thank you. So just scrolling back up again. So on that morning after your email to Ms Marconi, she sent to you an email that says:

Please find attached amended version of the draft risk register containing the directors’ input.

Can you explain to me who the directors are?

THE WITNESS: Directors are section heads so EL2s. I don’t know which directors she would have gone to but I’m assuming they were ones listed – or some of them listed in the cc there, so David Hoitink was at that level. I think Beth Riordan was at that level. I’m not sure about the other two.

MR TREFFERS: Okay. Now, I want to go to the document that’s referred to as the enclosure or the attachment risk register. That document is MIN.002.001.0119. Okay. Now, is this a document that you created?

THE WITNESS: No.

MR TREFFERS: Okay. Go to box 3 and you will see the reference there to the section “time” and there is one dot point.

THE WITNESS: Yes.

MR TREFFERS: I refer to you – in the document that you had previously prepared, which was document MIN.002.001.2646, in the section “time” there was a reference dot point that stated, “Inadequate delivery within timeframe” and you will see that that has been deleted from that document.


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THE WITNESS: Yes.

MR TREFFERS: If you go down to the next section, section 4, Installer Quality and Compliance, and you will see there there is no reference to installer injury.

THE WITNESS: No.

MR TREFFERS: Do you know who created this document?

THE WITNESS: It’s an Excel document in the style of the department’s risk template of the time and so I’m assuming it was taken from my Word document and put in Excel. I don’t usually use Excel because you can’t track the changes and some of these changes are tracked here but they’ve been done with the sort of strike through as opposed to having tracking on because you can’t track in Excel. So you can’t really see that those things were dropped out. It’s not visible unless you have the time to sit and look at both.

COMMISSIONER: Well, a person has dropped it out without marking it in red with a line through it.

THE WITNESS: That’s how it appears, yes.

MR TREFFERS: Okay. And you received that document that morning?

THE WITNESS: Yes.

MR TREFFERS: For the purposes of the afternoon meeting, did you send an email to Ms Marconi on 27 March in document MIN.002.001.0105?

THE WITNESS: I would have been turning this around because I think it had to be sent out before the meeting at 5 o’clock. Yes. So an hour and – an hour later or something.

MR TREFFERS: And that document refers to a number of attachments. One of those attachments being the risk register.

THE WITNESS: Yes.

MR TREFFERS: DEWHA HIP risk register, 27 March, and that document – that attachment, if we call that up, is MIN.002.001.0111. And that’s the document that you had received from Ms Marconi that you returned to her for the purposes of the meeting that afternoon.


MR TREFFERS: Thank you.


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COMMISSIONER: So that alteration – the leaving out the installer injury just sort of slipped by you because it hadn’t been marked in red as having been deleted?

THE WITNESS: There were a number of other changes in that document. I had an hour to turn it around and, yes, it wasn’t clear. I finally looked at that document which I probably did in the timeframe.

COMMISSIONER: You assumed that the changes that had been made were marked in red.

THE WITNESS: And – and even - - -

COMMISSIONER: Am I right in that?

THE WITNESS: Yes.

COMMISSIONER: Yes.

THE WITNESS: I believe so.

COMMISSIONER: Yes. No, go on. You were going to add something.

THE WITNESS: Yes. I was just going to say this signified how the whole thing was developed. This was about me saying, “This is what you’ve told me. This is how it looks. Do you agree with it?” And – and it appears that at that stage, a whole lot of people who may not have been in the workshop have finally – had input to this and that’s what kept going and, in fact, it kept going after I wasn’t involved on 9 April.

COMMISSIONER: But it sounds like it’s input without actually pointing out to you the input that they had.

THE WITNESS: Yes.

COMMISSIONER: Yes.

MR TREFFERS: If we could go to document MIN.002.001.1478. Now, this is an email from Ms Marconi to you, described as “for your information”. The email is sent from – or attaches an email which Ms Marconi sent presumably after the meeting on 27 March.

THE WITNESS: Yes.

MR TREFFERS: To Mr Keefe and cc’d to a number of other persons and it reads:

As requested, I’m grateful if you would send these to Andrew Wilson and Mike Mrdak.


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THE WITNESS: Yes.

MR TREFFERS: And those two gentlemen are from - - -

THE WITNESS: Office of the Coordinator-General.

MR TREFFERS: - - - what area, do you know? Office of the Coordinator-General. And if we could call up the document which was attached to that email, MIN.002.001.1479. Yes. And scrolling down in that document to the draft risk register and management plan. Keep going down. Keep going down. And further. Yes, keep going down, sorry.

COURT OFFICER: That’s the end document .....

MR TREFFERS: Is it? I have a document that should be attached which is a copy of the draft risk register and management plan. ..... Yes, thank you. And we go down and see box 3 and 4 as I just identified for you and some changes to it. That was the document following that meeting sent to those two gentlemen.

THE WITNESS: Yes. Okay.

MR TREFFERS: And if we could go to document – just to complete that sequence, go to document MIN.002.001.2103. And that’s an email that you sent on Monday – sorry – on Monday, 30 March, following the meeting that occurred on 27 March.

THE WITNESS: Yes.

MR TREFFERS: And that attached the outcomes of the executive meeting.

THE WITNESS: Yes.

MR TREFFERS: And the attachment to that document is MIN.002.001.2104 and that’s a document that you prepared following that meeting.

THE WITNESS: It says that so, yes. I don’t remember doing that but - - -

MR TREFFERS: Okay. And following that meeting, there were some further meetings with the department?

THE WITNESS: Yes.

MR TREFFERS: Which ultimately led to the creation of the final risk register and management plan which was dated 9 April 2009.

THE WITNESS: Yes.

MR TREFFERS: And that’s when your role under that contract came to an end.


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THE WITNESS: Yes.

MR TREFFERS: And just one further aspect in relation to that. Document MIN.002.001.2090 which is an email from Ms Marconi to you on 27 March which indicated that she was going on leave for two weeks which was the remaining period under your contract.

THE WITNESS: Yes.

MR TREFFERS: And advised you that there was another officer appointed to manage the risk assessment work in her absence.

THE WITNESS: Yes.

MR TREFFERS: That was Sasha Kaminski.

THE WITNESS: Yes.

MR TREFFERS: Had you met Ms Kaminski before that time?

THE WITNESS: I – I don’t recall, sorry.

MR TREFFERS: But you communicated and dealt with her after that time up until the presentation of the final risk assessment plan.

THE WITNESS: Yes.

MR TREFFERS: Okay. Now, you were asked by Mr Howe about the expectation of some hard and substantial input. If we could go to document that was actually put this morning – I don’t actually have the prefix. It’s 002.029.0929. It’s an email of 3 April 2009. One of my friends at the back could identify that.

COMMISSIONER: It’s probably “MIN”.

MR TREFFERS: MIN. It wouldn’t be an “MIN” document.

COMMISSIONER: No.

MR WILSON: Try “AGS”.

MR TREFFERS: AGS.

COMMISSIONER: AGS is a safe bet.

COURT OFFICER: What were the last four digits, Mr Treffers?

MR TREFFERS: 0929.


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MS E. COSTELLO: It’s AGS.002 .....

COMMISSIONER: Ms Costello, what is it?

MS COSTELLO: AGS.002.029.0929.

MR TREFFERS: Do you recall – whilst we’re waiting for that document – that was an email which had a number of names of industry representatives on it that you haven’t - - -

THE WITNESS: That I was shown this morning?

MR TREFFERS: You were shown this morning.

THE WITNESS: Yes.

MR TREFFERS: And you hadn’t identified that.

THE WITNESS: Yes.

MR TREFFERS: And there was a dot point in that document that referred to installer safety and injury. Yes. Scroll down, please. Keep going, please. Yes. High likelihood of catastrophic consequence, death or serious injury. Is that the hard, substantial input you would have expected in terms of preparation for the risk register?

THE WITNESS: From – from the technical industry consultations, yes.

MR TREFFERS: And did you receive anything of that nature from the department?

THE WITNESS: No. No.

MR TREFFERS: Now, yesterday, you were asked some questions in relation to policy changes and the impact that that had on the risk register.

THE WITNESS: Yes.

MR TREFFERS: Do you recall those questions?

THE WITNESS: Yes.

MR TREFFERS: And overnight, have you been able to give some more thought to the sort of policy changes that impacted on the register?

THE WITNESS: I was able to go through the pack of information I brought with me and find some reference to those.


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MR TREFFERS: And what were the policy changes that you recall?

THE WITNESS: So the – the first, of course, was the – the expected introduction of the HIP program on 1 July. On 1 September, two months later, the previous program, the Low Emissions Assistance Program for Renters was discontinued. I think that was always intended to be discontinued. I’m not sure about the timing. And there was a single rate applied to the insulation of $1600, I think, per job. Two months later, that $1600, on 1 November was dropped to $1200 and then a month later on 1 December there were training requirements and a two quote system introduced. So those rolled through very short intervals through that 6 month period.

MR TREFFERS: Okay. And all of those had an impact on the risk register?

THE WITNESS: Yes.

MR TREFFERS: And yesterday you were also asked some questions about the priority, the number one priority after the first death in October. And you were shown an email that there was some discussion about whether it was 10 October or – sorry – 11 October of 10 November, which we determined was 11 November. And you were asked some questions about whether there was any action taken by the PCG in response to that email which arose following the first risk sub committee - - -

THE WITNESS: Yes.

MR TREFFERS: - - - meeting. Now, if we could just call up document AGS.002.013.1887. Now, this is a document that is dated 21 October 2009 which is the risk register following a meeting on 22 October 2009. If you scroll down to the bottom of that page, the section there on the third column underneath customer complaints:

Unsafe or incorrectly installed product leads to fire damage, injury or death.

And I think those words had appeared in previous risk registers from as far back as July or August?

THE WITNESS: July. Yes.

MR TREFFERS: And then if you go across to the right-hand side to the column next to the red. And there’s a number of entries in there. There’s four entries in there. If you could just keep that document close by and go to document AGS.002.015.1471. And this is the risk register, similar document ..... pages because this starts at part A4 as opposed to part A1. This looks like it’s just part of the register.

THE WITNESS: It’s the 16 November one. This is the one that we found yesterday that doesn’t have the whole – it’s not the whole thing.


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MR TREFFERS: If you could just go back to the previous document.

THE WITNESS: It doesn’t have it.

MR TREFFERS: It appears that the document on the screen is just a part of the original - - -

COMMISSIONER: Yes. Part of what – what date of the risk register is it?

MR TREFFERS: Well, it’s dated 16 November 2009.

COMMISSIONER: I’m sorry. It’s not in these, I'm told?

MR TREFFERS: No. So it was after – actually, the previous pages to that document. Perhaps I will do it this way: Ms Coaldrake, could you please look at this document?

THE WITNESS: Yes.

MR TREFFERS: Is that a document that you hold?

THE WITNESS: Yes.

MR TREFFERS: Okay.

THE WITNESS: Yes.

MR TREFFERS: Can you put it up on the screen?

MR PERRY: Mr Commissioner, could I just raise a matter about that document just from when I look at it. The section we just went to seems to have a whited-out section. Is that right?

COMMISSIONER: I haven’t got the document you're talking about. Is this the one we’re about to put up on the screen?

MR PERRY: It’s the one that my learned friend was asking questions about ..... my instructor has just turned it up and just ..... there seems to be a whited-out section. I may be entirely wrong. So I apologise. But that’s just the way it looks.

THE WITNESS: That will be a question for the risk manager running the register. But they were printed off documents so it would be surprising if it had that in. It may be a printed issue or something.

MR PERRY: What ..... is it?


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MR TREFFERS: It is section 1.5 on that – just down the bottom of that first page, I think – yes. On the right. Right there, I think. 26. Sorry, tab 26, thank you. Do you see above Mandatory Training Competency in that column immediately to the right of the red. Yes. Right where the cursor is.

THE WITNESS: It’s an electronic – well, on my version, there’s an electronic document that I found on a USB.

MR TREFFERS: It may not be a matter of importance, one way or another, but I just wanted - - -

COMMISSIONER: All right. Let’s make sure we’re on the same page.

MR TREFFERS: Yes.

COMMISSIONER: You are referring to document 26 - - -

MR TREFFERS: Where the cursor is - - -

COMMISSIONER: - - - in the folder?

MR TREFFERS: That's right. Tab 26. And it’s AGS.002.013.1887

COMMISSIONER: Yes.

MR TREFFERS: 22 October Meeting is on the top. The top left.

COMMISSIONER: Yes.

MR TREFFERS: Then on that first column, part A1, Analysing Compliance and Audit Risks. Section 1.5 down the bottom of that first page where the cursor is – go left. Right. Right where the cursor is now. Now, this may not be a matter of any significance, but just ..... looking through it.

COMMISSIONER: Isn’t that – all right. Well, we will ask the witness to deal with it. But I thought that was just because it related to the section that was to the left of that in the document.

MR TREFFERS: Well, as I said, I’m not sure. It may be right. But there was concern - - -

COMMISSIONER: Can you help us there?

MR TREFFERS: - - - raised but it might be - - -

THE WITNESS: I would have said there should be something there because there are names there.


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MR TREFFERS: Yes. There are names inside it.

THE WITNESS: So I can’t account for that. I think, by this stage, because there were so many completed actions – completed actions were being taken off the register. Like, they were there in the background. But if they were completed, the treatments weren’t necessarily there so – or I can speculate that, possibly, those treatments were complete and they were just pulled – the treatments were pulled off without anything else being off. But I don't know.

COMMISSIONER: Ms Coaldrake, but it actually – yes. As Mr Perry says, if you look at it, you will some remnants of typing there. It looks like there has been a white marker put over it.

THE WITNESS: Yes. I know nothing.

COMMISSIONER: You know nothing?

THE WITNESS: It’s not my register at this point.

COMMISSIONER: All right. Where were we?

MR TREFFERS: We’re at a document that I just wanted to show – a risk register of the – dated 25 November 2009 and if we go to the second page of that where the asterisk is. If you scroll along to the right, the section there:

Unsafe or incorrectly installed product.

Etcetera. And we go along again to the next columns to the right and stop there. And, Ms Coaldrake, this section includes other items under this heading. What’s – do you recall the heading there?

THE WITNESS: So can I explain too that the red annotations I put on yesterday morning earlier when I was preparing for the appearance. And the colour coding within the – under the heavy bold line, so against that risk of ..... the black ones would have been completed. The red ones would have been uncompleted because I had insisted that they go to the PCG each week as uncompleted risks and the blue ones were new – new treatments and you can track those back to some minutes on the outcomes of the – I think it might be the PCG paper that talks about what the risk committee was doing. So the risk committee sub committee had asked that they be added.

MR TREFFERS: So - - -

COMMISSIONER: What’s the date of this – date of this - - -

MR TREFFERS: This is dated 25 November 2009. So this indicates following the first risk sub committee meeting and the email that we were talking about yesterday


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of 10 November that there was action taken in relation to this particular source of risk by the Department following that meeting and this indicates some of the actions that were taken.

THE WITNESS: Yes. I can’t recall if it was the first or the second. But that’s – this is the process that went through from the risk committee as it met the three or four times that it did meet before it was disbanded.

MR TREFFERS: Okay.

COMMISSIONER: Ms Coaldrake, just having a – to the left of that, off the screen, if we shift it back. I see in – I see there we talk about unsafe or incorrect ..... products ..... electrical hazards, injury or death.

THE WITNESS: Yes.

COMMISSIONER: That doesn’t seem to be referring to safety to installers as distinct from safety to the household. Am I right or wrong on that?

THE WITNESS: Well, that’s the same consequence that was there, like, from very early. So I – it doesn’t look like that was changed. But I was reminded yesterday morning when I was asked a question about wasn’t it the highest priority to deal with this risk and I made a comment early in the morning that the safety risks were in the fraud and control management plan. That’s where they sat. Yesterday afternoon when I was being asked about it, I was tired and I had neglected or I had forgotten that that’s where they were and that’s why they weren’t sitting in this register. I talked about the legal register. There was a legal risk plan. There was a big fraud and compliance management plan which, I think, was originally done for the Department by Ernst Young and then taken over and run by that section. That had, according to a piece of paper I read again this morning, which was an assessment of risk management across the task force, as it had – was becoming at this time, that the detail safety analysis and management was covered in the fraud and compliance management plan. Which I didn’t have any control over. That was being run by the compliance people.

[4.00 pm]COMMISSIONER: But you don’t resile from the fact that you said yesterday and, I think, in the Coroner’s inquest that the issue of safety of installers is not - - -

THE WITNESS: A matter for the Commonwealth.

COMMISSIONER: - - - a problem for the Commonwealth; it’s a matter for others – for the states.


MR TREFFERS: And just finally, in terms of the priority of dealing with risks, where does the responsibility for determining priority rest?


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THE WITNESS: It rests with the – the hierarchy of people involved with the program and the risk management. So they look at, or they should look at, the rating of the risk as it sits from week to week. So if there has been a policy change, they should be looking and saying, “Yes, it’s still at this rating. The treatments for this risk,” which is an extreme, residual or high residual – “this is a higher priority than this one”. So if we’re sharing resources out, it will go to the one with the higher risk. Then the priority of the treatments go to the people that hold them, and most of the people held more than one treatment. Many of them held many treatments, and they had to juggle those priorities with their normal workload.

MR TREFFERS: And a good example of the owners for various risks and treatments appears on tab 16 of the risk registers. And if you turn to tab 16. I think you were asked this morning about a document that was before the PCG early in July. Tab 16 is the risk register, and part A1 refers to analysing compliance and audit risks, and the risk owner for that document is described in the box at the top – the fourth box along.

THE WITNESS: Yes. David Hoitink.

MR TREFFERS: Yes. So he has responsibility for all of A1.

THE WITNESS: Yes.

MR TREFFERS: And then down the document, at the sixth column from the right, headed By Who.

THE WITNESS: Yes.

MR TREFFERS: Identifies who has risk responsibility.

THE WITNESS: For the risk treatments, yes.

MR TREFFERS: The risk treatments all the way through.

THE WITNESS: Yes.

MR TREFFERS: And there was discussion about some legal risk, and Mr Hoitink has responsibility for the legal risk there.

THE WITNESS: Yes.

MR TREFFERS: Various other people have responsibilities for other items, and he also had responsibility for a number of others himself.

THE WITNESS: Yes.

MR TREFFERS: And that’s the general way that this process proceeded through.


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THE WITNESS: Correct. And – and the – the allocation of who would manage which treatment – it’s – it’s quite interesting to look back now because it’s – the levels go from assistant secretary down through the directors. They’re generally directors, but it was about – they would have been choosing who was the absolute best person rather than going, “It’s at this level or this level.” So that’s the appropriate thing to do.

MR TREFFERS: Thank you.

COMMISSIONER: Mr Wilson.

<EXAMINATION BY MR WILSON [4.03 pm]

MR WILSON: Ms Coaldrake, you were asked some questions yesterday by Mr Perry, and you just said in one of your answers – or you made reference to a legal risk register.

THE WITNESS: A legal risk plan, I think, yes.

MR WILSON: Risk plan. Can I just have document MIN.002.001.14, and I think it’s 64, brought up, please. And if we just scroll down a bit, you will see that Ms Kent on 13 May writes to Mr Hoitink about the revised risk management plan.

THE WITNESS: Sorry. Which email are we looking – the one from Mr - - -

MR WILSON: The one right at the bottom of the screen there.

THE WITNESS: Okay. Yes.

MR WILSON: Okay. If we go to the one above that, Mr Hoitink writes back to Ms Kent. He says, “I’ve made a few changes to the document.” He attaches two documents. One is the risk register as at 30 May, and the other is the legal risk assessment document.

THE WITNESS: Yes.

MR WILSON: And if we go up to the top of the page, you will see that - - -

THE WITNESS: This is sent to me.

MR WILSON: - - - Ms Kent sends that on to you – those documents on to you on 15 May.

THE WITNESS: Yes.

8.4.14 P-2368 M. COALDRAKE XN©Commonwealth of Australia MR WILSON

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MR WILSON: Could I then bring up onto the screen MIN.002.001.1467, please. And is that the legal risk plan that you were referring to, that is, the attachment to that email?

THE WITNESS: I don’t recall seeing that now, but yes, I thought there was a bigger document, but - - -

MR WILSON: It’s two pages.

THE WITNESS: No. Some reason I thought there was a substantive document. It may be that that followed possibly from this, but yes, this is clearly a legal risk plan.

MR WILSON: You will see that the document that’s on the screen now – if we scroll across, it has seven columns.

THE WITNESS: Yes.

MR WILSON: And if we go down to the next page.

THE WITNESS: It will be the second half, yes.

MR WILSON: It’s the second half, which goes across to column 12.

THE WITNESS: Yes. And this is the department’s format, as opposed to the one I suggested, which puts the two onto an A3 page so you can go all the way across.

MR WILSON: Yes. But that’s what’s being - - -

THE WITNESS: Yes.

MR WILSON: - - - referred to.

THE WITNESS: Yes.

MR WILSON: Thank you. You were asked some questions by Mr Perry, and my note of part of your answer was that it wasn’t in the risks protocol document, and I was wondering what you were referring to by that.

THE WITNESS: Okay. I think – bit surprised that hasn’t come up. On 20 May, I put to the PCG a proposed – a table of proposed risk management escalation – I think it’s risk management thresholds and escalation protocols. It basically – it lists the responsibilities, the roles in the team and the point at which – what their responsibility is vis-à-vis risk management and at what point they should go up and escalate a risk if it either is emerging or – or they can’t handle it. And it very clearly spells out – and the PCG adopted it – the varied level of roles and responsibilities from contractors through to the PCG in relation to risk management.


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MR WILSON: So there’s a document dated in May of two thousand and - - -

THE WITNESS: 20 May. It’s a single page. I don’t have it with me, unfortunately. It’s a single-page landscape table.

MR WILSON: So if the commission contacts your solicitor, we can identify that document?

THE WITNESS: I thought it was attached to my statement.

MR WILSON: And it may have already been provided, yes.

THE WITNESS: Yes.

MR WILSON: That’s okay.

THE WITNESS: The department would have been in the PCG papers, if nothing else.

MR WILSON: Yes. Now, you were asked a number of questions, I think, including by Mr Howe, about Mr Chalmers.


MR WILSON: Were there any matters upon which Mr Chalmers worked on his own and did not report to you about, to your knowledge?

THE WITNESS: He – he did undertake a couple of the meetings with the department, following up the workshop, and – but he was very good at reporting to me, so I think anything substantive I would have – well, I would have seen anything in writing, or he would have briefed me.

MR WILSON: Did he provide any advice to you that any further steps needed to be taken to identify or assess any particular risks?

THE WITNESS: Not to my recollection.

MR WILSON: What was his role in the assignment, as compared to your role?

THE WITNESS: That’s actually covered in the proposal. I noticed it when we were going through earlier, where it said something about me having oversight and facilitation, and he would do some of the review meetings and the documentation review. So - - -

MR WILSON: So you had the primary carriage - - -

THE WITNESS: Sure.


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MR WILSON: - - - of the assignment.

THE WITNESS: Yes.

MR WILSON: You were taken through a number of emails by Mr Treffers, explaining the drop-out of the - - -

THE WITNESS: Yes.

MR WILSON: - - - installer injury specific line. That then carried through a number of versions of the risk register.

THE WITNESS: Which – the lack of that line?

MR WILSON: The fact that it wasn’t there. Is that something you ever noticed?

THE WITNESS: Well, I wasn’t – remember, I wasn’t there from 9 April, and when I came - - -

MR WILSON: But it wasn’t in the one of 9 April.


MR WILSON: And then you came back, and then there were a number of PCG meetings.

THE WITNESS: It had been very changed, yes.

MR WILSON: You would have noticed that it was never again there.

THE WITNESS: Well, I didn’t notice – didn’t notice.

MR WILSON: I just wanted to ask it from a couple of different aspects, that is, (1) did you notice it wasn’t there? Your answer is no.

THE WITNESS: No.

MR WILSON: But as I understood from an answer to the Commissioner that you gave a little while ago, it would have been appropriate for it not to be there on the evidence that you gave both to the coronial inquiry and to this commission.

THE WITNESS: Yes, in the sense that it was a consequence of other things that were risks to the Commonwealth. So it could have stayed there as a consequence but had been taken out and – and clearly slipped past me because it wasn’t clear that it had been taken out, and by the time I came back a number of weeks later, it obviously was no longer – I had any consciousness of it at all.


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MR WILSON: Now, we saw the email traffic on 26 and 27 March.

THE WITNESS: Yes.

MR WILSON: To your recollection, did anyone from the Department tell you why it had been taken out?

THE WITNESS: No.

MR WILSON: Mr Bradley asked you some questions - - -

THE WITNESS: Sorry. Who is Mr Bradley?

MR WILSON: Counsel for the State of Queensland. Along the lines of your focus being on house fires as opposed to installer injuries; do you recall those series of questions?

THE WITNESS: Vaguely. MR WILSON: I just wanted to examine that a little bit. You did think it was appropriate for the risk of house fire to be included in the register.

THE WITNESS: That’s – I knew about that. Yes. That had been discussed by the department.

MR WILSON: And house fire itself is not a risk, is it?

THE WITNESS: No.

MR WILSON: That’s a consequence.

THE WITNESS: Again, it was consequence of that poor quality installation I think it was a – if I can say it was a particular focus of the Secretary of the Department and it had come through to the PCG in that way.

MR WILSON: So house fire is a consequence. The risk is poor installation.

THE WITNESS: Yes.

MR WILSON: And another consequence of poor installation can be injury or death.

THE WITNESS: As I now know.

MR WILSON: But as you would have appreciated at the time and I’m wondering whether there was a conscious decision to include one consequence and not the other.


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THE WITNESS: Not that I – certainly not from me.

MR WILSON: Could I ask you then perhaps some more theoretical questions and see whether you agree with these propositions. That risk assessment itself is part of risk management.

THE WITNESS: No. No risk assessment is part of – I mean, the bits are identification, analysis, assessment, which gives you that first ratings – the sense of ratings, and then comes the management through a series of either existing controls or further treatments and it’s that combination of - - -

MR WILSON: So you say it’s a precursor to risk management.

THE WITNESS: Correct. Except – sorry – except that you keep assessing as you go.

MR WILSON: Yes.

THE WITNESS: Yes. It’s an iterative cycle.

MR WILSON: And the assessment of risk itself is a process.

THE WITNESS: Yes.

MR WILSON: Would you accept this definition. A risk is an uncertain event or set of events which, should they occur, will have an effect on the achievement of objectives.

THE WITNESS: Yes.

MR WILSON: Do you accept that risk management is an essential part of implementation planning and provides a structured way to identify, mitigate, accept and assign responsibility to the risks that might effect successful implementation.

THE WITNESS: Responsibility for managing the risks, yes.

MR WILSON: And would you agree with this proposition. Good risk management ensures that decision makers are able to make accurate and well informed judgments.

THE WITNESS: Not just able, they do make those.

MR WILSON: And in this case, the decision makers were the officer in the Department - - -



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MR WILSON: - - - of Environment or, from a technical sense, the Minister of the department.


MR WILSON: You were not a decision maker.

THE WITNESS: No.

MR WILSON: Yes. Thank you. Those are the questions I have.

COMMISSIONER: Thank you. Thank you for giving your evidence over a long period of time. We’re grateful.


COMMISSIONER: And you’re – excused or stood down?

MR WILSON: Excused.

COMMISSIONER: You’re excused.

<THE WITNESS WITHDREW [4.14 pm]

MR WILSON: Make a start on Ms Kent?

COMMISSIONER: Yes, I think so.

MR WILSON: Avril Kent.

MR ..........: If I could be excused, Commissioner.

COMMISSIONER: Yes. Thank you for your attendance.

MR S.R. McLEOD: Commissioner, my name is McLeod, initials S.R. I appear on behalf of

COMMISSIONER: Sorry. Your name was, did you say - - -

MR McLEOD: McLeod. COMMISSIONER: McLeod, sorry. Thanks.

<AVRIL SHIRLEY KENT, SWORN [4.15 pm]

8.4.14 P-2374 A.S. KENT ©Commonwealth of Australia

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<EXAMINATION BY MR WILSON

MR WILSON: Is your name Avril Shirley Kent?

THE WITNESS: Yes, it is.

MR WILSON: Have you prepared, for the purpose of this, prepared and signed for the purposes of this Commission, a statement dated 21 March 2014?

THE WITNESS: Yes, I have.

MR WILSON: Have you had an opportunity to re-read that statement recently?

THE WITNESS: Yes.

MR WILSON: Are there any changes or ..... that you would like to make to it?

THE WITNESS: Not at the moment, no.

MR WILSON: Do you have a copy of the statement with you?

THE WITNESS: Yes.

MR WILSON: Could I ask you to go first to paragraph 2 and I simply want to inquire from you, when you achieved a diploma of project management in 2009, that is, was it at the start middle or the end?

THE WITNESS: It was before I started with home insulation. MR WILSON: So you had the diploma before you took up the position? Could I take you to paragraph 5 of the statement. I just wanted to understand this. We’ve heard evidence about the REED silo, if you like.

THE WITNESS: Yes. MR WILSON: And there are other divisions in the Department of Environment. Where did the central project management office sit?

THE WITNESS: They sat in the central corporate area. So that was the part of the Department that looked after payroll and personal and all the corporate activities.

MR WILSON: And that section looked after projects that the Department managed?

THE WITNESS: No, they didn’t look after projects themselves. What they did was generate standards and templates and give advice to try and achieve some consistency across the Department about the way we approach project management.

8.4.14 P-2375 A.S. KENT XN©Commonwealth of Australia MR WILSON

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MR WILSON: Now, you came – I’m sorry. You came into the HIP in April?

THE WITNESS: Yes.

MR WILSON: Are you aware whether prior to that date, the project management office had been involved in any way in the HIP?

THE WITNESS: I don’t know. Although I think the templates that I saw were based on the Departmental templates and standards. But how – to the extent that the PMO was involved, I don’t know.

MR WILSON: When you became involved in the HIP, was that as part of the project management office or did you effectively transfer over to the REED?

THE WITNESS: I came from the water group across to HIP.

MR WILSON: Within the REED; is that right?

THE WITNESS: Yes. That’s right. Yes.

MR WILSON: And to your knowledge, from that time onward, did the HIP team liaise in any way with the project management office of the department?

THE WITNESS: I remember talking to them about the departmental risk matrix to making sure that we understood what it was and that it was – we were using it consistently. Other than that, I think informally but not as a structured ongoing way.

MR WILSON: Did you have any liaison with the project management office because you had effectively come from there?

THE WITNESS: Well, actually I had come from the project management office in water group which was a different - - -

MR WILSON: I see.

THE WITNESS: Yes. So because water group had so many major infrastructure and other projects that they were looking after, they actually set up their own little team within water group which I was leading and in that context I had a lot of dealings with the central PMO to make sure that we were aligning with the Department. But the role I played was very focused on water group and the particular projects and supporting the project managers there.

MR WILSON: Then coming back to my question, once you joined the HIP team, did you have any liaison with - - -

THE WITNESS: I had less involved with the PMO then. Yes.


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MR WILSON: And what sort of issues would you talk to them about?

THE WITNESS: Well, in lots of ways they were the same issues that I was talking to Ms Leake and Ms Coaldrake about. So if I was providing support to a project manager and I want to know what – I wanted to verify what an international standard was or what the departmental requirements were or making sure that I was approaching things in a way that was consistent with the department, then I talked to them about that. But within HIP, of course, I had access to project management expertise within the project so I probably would have asked them for some full on specialist input.

MR WILSON: And then in paragraph 6 of your statement in the second section of it, you say your expertise in project management was developed from, and we can read that. What experience would you get in project management from being an advisor in the cabinet implementation unit?

THE WITNESS: Well, I worked in the cabinet implementation unit when Prime Minister Howard – I was one of the early members of the unit. Dr Shergol was the secretary ..... and what they were after was getting some – closing the loop back to cabinet. So when they agreed to fund a particular project or initiative, they would – the cabinet – the advisors, like myself, would liaise with the department that was implementing and monitor the way the project, whether they were using the right project management methodology or they were staying on track, were there risks appearing, policy issues that needed to go back, and basically supporting them until they reached the project outcome and delivery.

MR WILSON: That was a role you fulfilled within the Office of Prime – within the Department of Prime Minister - - -

THE WITNESS: Yes.

MR WILSON: - - - and Cabinet - - -

THE WITNESS: Yes.

MR WILSON: - - - in the Cabinet Implementation Office.

THE WITNESS: Yes.

MR WILSON: Do you know whether there was a similar person to that role that was involved with the HIP?

THE WITNESS: Yes, I think it was similar to the role Mr Hoffmann played.

MR WILSON: Could I take you, then, to paragraph 13(f) of your statement.

THE WITNESS: Yes.


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MR WILSON: And I think you’ve said elsewhere what – who the members were of that compliance committee. What practical – sorry, what was your role, firstly, in the compliance committee?

THE WITNESS: Well, I was basically the project manager that set it up, so - - -

MR WILSON: That’s Ms Leake?

THE WITNESS: Sorry – no. I was the project manager - - -

MR WILSON: I’m sorry. Yes.

THE WITNESS: - - - that set up the compliance committee.

MR WILSON: Yes.

THE WITNESS: That was basically my role so - - -

MR WILSON: Yes.

THE WITNESS: - - - in about June – sometime, and I can’t tell you exactly – when it became apparent that we were launching on 1 July and we weren’t going to have time to bring in the full complement of expertise that we might need to manage compliance, Mr Keefe asked me to set about establishing some capability within HIP, within the branch, that would at least provide an interim solution and to also come up with some longer term solutions. So – so I had – even though I had no expertise in compliance, I was asked to do that because he thought of me a good project manager that would pull the right people together, design a governance framework, get the procurement going for PWC and basically getting the thing going and a database, of course, on 1 July.

MR WILSON: So what steps did you put in place? You’ve mentioned procurement which ultimately involved PWC - - -

THE WITNESS: PWC.

MR WILSON: What else did you do?

THE WITNESS: Well, we – we had a section of Environment that was working on regulatory activity around mandatory environment laws. We had – as a department, we weren’t doing administrative compliance or, you know, financial fraud compliance and so on with external customers but there was this capability. So we asked them to lend us one of their EL2s with some specialist expertise, and he and I and Mr Hoitink and Mr Hughes met together and talked about what a governance framework might look like and we put a proposal to Mr Keefe, and I think possibly Mr Forbes, to – to set up a compliance committee as the central governance and we talked about the need to bring in some – some directors with specialist compliance


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expertise so Mr Keefe went to the ATO and asked them if they could provide a couple of specialists that would be come over as a secondment.

We set up a team within the branch that started to look at monitoring claims as they came in, and we also set up – we engaged Protiviti, who were our internal auditors, and they helped us out with a temporary support until we could engage PWC or whoever we took on. So we gathered together specialist resource from a few different places.

MR WILSON: Just having mentioned it, can I bring up PRO.002.001.0009 please. Now, you’ve mentioned Protiviti.

THE WITNESS: Yes.

MR WILSON: Just scroll down a little. Do you recognise this document – you can keep scrolling down if you would like, keep going – of the work that Protiviti was going to do for the Department?

THE WITNESS: I don’t recognise the document but it was Mr Hughes that negotiated directly with Protiviti so - - -

MR WILSON: So you didn’t play any part in that?

THE WITNESS: We agreed that we would approach Protiviti for the role that they would play - - -

MR WILSON: But Mr Hughes - - -

THE WITNESS: Mr Hughes did the hands-on negotiation.

MR WILSON: But what was the role that Protiviti was going to do?

THE WITNESS: Well, it was mainly focussed, I think, about looking at full compliance at that point. So when the compliance committee met and every day we would have a list of claims that would come from Medicare, so there would be a sheet of claims that would come in and Protiviti would look at those claims and do some analysis on it for us and then we would meet in the compliance committee and they would say things like “This, this and this installer have all claimed this many installs in a day but we think that’s outside of the norm”. And then we might look at – they might – they had set up Google Earth so we could look at Google Earth and say, well, if this house that they’re claiming they installed here and this house is 200 metres – miles apart and they’re claiming they did them on the same morning well then that’s clearly suspicious. So it was very much that analysis of the – of the claims that were coming in.

MR WILSON: So from the compliance team’s viewpoint, is it a fair summary to say that the number 1 concern at the outset was fraud?


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THE WITNESS: Yes.

MR WILSON: So the department expected that people would not behave honourably under the scheme.

THE WITNESS: Yes.

MR WILSON: Apart from accessing the scheme for financial gain, did you also consider that it was a risk that people might not behave properly in terms of the work that they did under the scheme?

THE WITNESS: We did talk about that within the project team as part of – so in the lead-up to 1 July I used to have 9 o’clock project team meetings where all the project team and all the risk owners would get together and we would talk about developing risks or issues or the schedule and so on. And in that context, we talked about – I remember a couple of occasions where we discussed the risk that people would not comply with OH&S or other mandatory requirements and it was discussed in a group and agreed that OH&S – regulation of those issues was the state and territory responsibility not a commonwealth responsibility. And so therefore the decision was made not to include it in the risks that we were managing or that we owned and – so then it didn’t appear necessarily in the compliance regime either because I think there was a – a management decision that it didn’t – purview – the purview of that didn’t sit with us.

MR WILSON: I just want to understand what you’ve just said.

THE WITNESS: Sorry if I’ve been unclear.

MR WILSON: Prior to 1 July, officers of the department met together - - -

THE WITNESS: Yes.

MR WILSON: - - - and discussed that people performing work under the scheme, either themselves or with their employees or subcontractors, would not observe OH&S laws.

THE WITNESS: Well, no. I think we – we said they might not.

MR WILSON: Might not.

THE WITNESS: Yes.

MR WILSON: And a considered decision was then taken by the group that although that there was that possibility, that was a problem for the states or territories.

THE WITNESS: It was the responsibility for the states and territories, yes.


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MR WILSON: Yes. They would have to manage that problem.

THE WITNESS: I think – I think the view was that they were already managing those issues as part of their business as usual.

MR WILSON: Did you have any involvement in liaising with the states and territories?

THE WITNESS: No, that’s not true. When I was acting for Mr Keefe briefly, it was – the first of the fires was reported that thought – they thought might have been linked to the Home Insulation Program - - -

MR WILSON: That was in August, wasn’t it?

THE WITNESS: That was – yes, I think September maybe even.

MR WILSON: August/September.

THE WITNESS: Yes. And I was acting in his role at that time, so I wrote to the senior fire officer in each of the jurisdictions and asked them to - - -

MR WILSON: We will come to those letters in the morning.

THE WITNESS: Yes, okay. Yes.

MR WILSON: But I’m thinking before 1 July.

THE WITNESS: Right. No.

MR WILSON: Who was in this meeting that you’ve just given evidence about?

THE WITNESS: Mr Hoitink was in the meeting and he was tasked on the risk register with the liaison with the jurisdictions.

MR WILSON: And did he lead the discussion about the fact that this was the responsibility of the states and territories?

[4.30 pm]THE WITNESS: Well, he was certainly part of the discussion and I think there was consensus in the group that that was the position.

MR WILSON: Who was the group?

THE WITNESS: In the compliance committee or in the project team? In the compliance committee was myself, Mr Pink from the regulatory area in the department, Mr Hoitink and Mr Huges.


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MR WILSON: And the consensus of that group was although there was knowledge of a potential behaviour, if we put it as neutral as that, that was something that the Commonwealth would not deal with as part of its compliance.

THE WITNESS: I think that position was reached not in the compliance of ..... but in the project team.

MR WILSON: Yes.

THE WITNESS: And then when there was a decision made by management and by Mr Keefe and the PCG, although I don’t know if it was documented in the minutes but I was certainly – discussions where it was agreed. Then that – in a sense, that set the parameters for how the compliance committee went about its work. So - - -

MR WILSON: And are you speaking there of discussion in the project control group?

THE WITNESS: Well, I remember it being discussed a couple of times in the 9 o'clock project team meetings.

MR WILSON: I’m just wanting to - - -

THE WITNESS: But I don't know if it was formalised in the PCG or not.

MR WILSON: I just want to make clear where this was discussed.

THE WITNESS: Yes.

MR WILSON: Now, just working down the hierarchy, if you like.

THE WITNESS: Yes.

MR WILSON: About the Project Control Group. So we deal with that first.

THE WITNESS: Yes.

MR WILSON: Is this issue of compliance, in terms of OH&S, to your knowledge discussed at PCG group meetings that you were present – at which you were present?

THE WITNESS: I remember a couple of times where the issue came up and my memory is that people around the table said, “Well, we won't discuss that because that’s a State and Territory matter”. I don't remember a time where it was formally put on the agenda as an item and discussed per se. I remember it being discussed sort of around the edges, if you know what I mean, as we went through other items. The place I have the clearest memory of it being discussed is in those 9 o'clock meetings that I ran.


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MR WILSON: We might come to those first up tomorrow morning. But can I just ask you to conclude, was it your evidence – did you understand your evidence correctly that if those matters were discussed at the PCG group meetings, they weren’t – that discussion wasn’t necessarily recorded in the minutes?

THE WITNESS: It wasn’t necessarily recorded. No.

MR WILSON: Thank you. Is that a convenient time, Commissioner?

COMMISSIONER: Adjourn until 9.30.

MATTER ADJOURNED at 4.32 pm UNTIL WEDNESDAY, 9 APRIL 2014


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Index of Witness Events

GREGORY RASHLEIGH, SWORN P-2220EXAMINATION-IN-CHIEF BY MR HORTON P-2220EXAMINATION BY MR ANDERSON P-2235EXAMINATION BY MR BRADLEY P-2238EXAMINATION BY MR HARVEY P-2240EXAMINATION BY MR BARROW P-2241EXAMINATION BY MR POTTS P-2243EXAMINATION BY MR O'DONOVAN P-2246EXAMINATION BY MR WINDSOR P-2265

THE WITNESS WITHDREW P-2271

MARGARET COALDRAKE, CONTINUING P-2271EXAMINATION BY MR KEIM P-2271EXAMINATION BY MR BARROW P-2276EXAMINATION BY MR BRADLEY P-2281EXAMINATION BY MR HARVEY P-2291EXAMINATION BY MR HOWE P-2313EXAMINATION BY MR TREFFERS P-2351EXAMINATION BY MR WILSON P-2368

THE WITNESS WITHDREW P-2374

AVRIL SHIRLEY KENT, SWORN P-2374EXAMINATION BY MR WILSON P-2375

Index of Exhibits and MFIs

8.4.14 P-2384©Commonwealth of Australia

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Documents

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