NSW Ombudsman recommends SafeWork apologise to Blue Mountains council and pay compensation over handling of asbestos compliance

In a report published late on Friday afternoon, the Ombudsman, Michael Barnes, found SafeWork NSW issued six notices to the council in 2017 and 2018 that were either unlawful or unreasonable.

He has recommended the organisation make an ex-gratia payment to the council to compensate it "for the unnecessary expenses they incurred in conducting additional testing" at sites in Wentworth Falls and Lawson.

In a letter attached to the final report Mr Barnes wrote: "In my investigation... I identified a number of occasions where SafeWork's compliance notices were issued contrary to law. In particular, on a number of occasions SafeWork Inspectors issued notices without holding the reasonable belief that is required under the legislation. Instead, they issued the notices because they were directed to do so."

Blue Mountains mayor Mark Greenhill said the findings show Blue Mountains City Council was the "victim of a politically motivated and prolonged attack in which the state's safety regulator was weaponised for political ends".

"Those politicians whose involvement created an environment where these things could happen, should consider their positions very carefully," he said.

"This government actually looked at suspending our council twice over all this. Now their government agency is being called upon to apologise and pay the council an amount of money. This is extraordinary."

The Ombudsman's report states in part: "The then Minister for Local Government [Gabrielle Upton] and the then Minister for Better Regulation [Matt Kean] maintained close and direct involvement in the events culminating in a public inquiry into BMCC, which is still ongoing. These factors created a complex and emotionally charged environment that presented unique challenges for both BMCC and SafeWork and placed significant pressures on the staff of both organisations."

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One senior SafeWork executive, the report states, said the investigations "were being undertaken in a climate of unrelenting media, public, ministerial and executive pressure... In many ways we were caught in the middle of historical matters not of our own making and agendas that had little to do with the safety of workers or the community."

The Ombudsman's investigation centred on four testing sites: Wentworth Falls Preschool; Heatherbrae House; Springwood council depot and the Lawson Mechanics Institute car park.

The report states the testing carried out at the Springwood depot, in particular, followed sustained pressure by 2GB radio host Ray Hadley.

"SafeWork and its Inspectors were under pressure particularly because of media broadcasts by the radio program. Its host had referred to allegations about BMCC's asbestos management over 30 times in the three months prior to Inspector B's issue of the Springwood Depot Prohibition notices," the report states.

The Ombudsman found these notices were issued unreasonably.

The report also found that the level of testing at the Lawson car park site - which cost $74,841 - was unreasonable because it exceeded applicable guidelines. This had a "detrimental financial and practical impact on BMCC and consequently on its ratepayers".

In response to the report, a Department of Customer Service spokesperson said: "SafeWork NSW is reviewing the findings of the NSW Ombudsman in relation to the workplace regulator's investigation of the management of asbestos at Blue Mountains City Council in late 2017 and early 2018.

"SafeWork NSW is developing its response to the recommendations but acknowledges some processes were not up to the standard that should be expected of the regulator.

"The NSW Ombudsman's report recognised SafeWork's vital role in regulating how asbestos is managed by workplaces.

"SafeWork NSW will always respond to credible reports of workplaces not meeting safety obligations in the handling of potentially deadly asbestos," said the spokesperson.

The Ombudsman's formal investigation began after council complained about SafeWork's actions in January 2018.

"We were concerned that SafeWork NSW, which should act as an independent regulatory agency, was being politicised and driven by media pressure, and had been inappropriately directed in its interactions with council," said Blue Mountains City Council CEO, Dr Rosemary Dillon.

"Council has acknowledged since early 2018 that there had been failures in asbestos management practices and the organisation has been diligent in addressing these matters, and continues to strengthen and improve its asbestos management," she said.

"The Ombudman's report notes the statements of witnesses that BMCC's systems and processes were not substantially different to similar organisations. Yet the council was singled out for special treatment, with all the consequences that followed for the organisation, staff and the community."

Council has spent more than $10 million in relation to asbestos management since November 2017. It told the Ombudsman that it believed "a significant portion of this expenditure has been in response to disproportionate regulatory action taken by SafeWork".

The mayor said he hoped the findings would give council staff and former staff "a sense of relief".

"I acknowledge our CEO, Dr Rosemary Dillon, for her leadership and integrity in incredibly difficult times. To those of my councillor colleagues who sought evidence and truth, I express my gratitude," he said.

"I would also like to thank the community of the Blue Mountains for standing by us throughout."

Read the Ombudsman's full report here.