Poor Insulation

In the review of key Reports of the Week, McLeod Governance tries to steer clear of reports that could be seen as overtly political in output or those conceived to damage a particular constituency.

This week’s report could possibly fall within one or both of those categories but it’s underlying themes are universal and apolitical and hence worthy of review.

The Royal Commission into the Home Insulation Program is a Royal Commission established by the Australian government to inquire into the matters that may have arisen from the development and implementation of the (former) Australian government’s Home Insulation Program.

A measure, known as the “Energy Efficient Homes Package” was announced by the then Australian Prime Minister Kevin Rudd on 3 February 2009. A component of that Package was the “Homeowner Insulation Program”. The Home Insulation Program was administered by the Department of the Environment, Water, Heritage and the Arts.

The Program was part of the Rudd Government’s fiscal stimulus efforts to counter to impact of the global financial crisis.

As the program was delivered into communities, four men (aged 16 to 25 years) who worked as home insulation installers, died in four separate incidents between October 2009 and February 2010. Two workers died as a result of electrocution  installing foil lined insulation; one worker was electrocuted installing fibreglass “pink batts” (all three in Queensland);  and one worker died from hyperthermia , also installing “pink batts” (in New South Wales). On 9 February 2010, four days afters the fourth death, the Commonwealth Government suspended the use of foil insulation; and the entire Home Insulation Program was discontinued on 19 February 2010.

The Royal Commission found that:

The reality is that the Australian government conceived of, devised, designed and implemented a program that enabled very large number of inexperienced workers … often engaged by unscrupulous and avaricious employers or head contractors, who were themselves inexperienced in insulation installation – to undertake potentially dangerous work.  It should have done more to protect them.

This is report that nicely articulates several themes that should be always considered in the management of risks of any significant project:

The program was hurriedly conceived and hastily implemented.  It failed because of the insistence by (the Department of Prime Minister and Cabinet) of the need for undue speed in its implementation.

The Royal Commission found that there was an inherent conflict between the dual aims of the scheme – which were to insulate 2.2 million homes and to stimulate the economy.  This confusion relating to aims was compounded by inadequate training and competency requirements.

(The) decision to remove the need for installers to achieve the minimum level of competencies was imprudent.

Additionally it was found that those that could have influenced a more successful and safe outcome failed to do so.  The Royal Commission found that key public servants were advised of the

serious risk posed by reflective foil laminate insulation in conduction with electricity and did nothing to further investigate it.  They should have done so.

This situation was then compounded by the fact that briefings to the relevant Minister – who in an organisational sense could be seen as the Managing Director or Chief Executive Officer:

contained serious omissions and failed candid to state the real risks (of reflective foil laminating sheeting).

The scheme was also found to have been poorly audited.

The report concluded:

As with most serious failures of public administration, it is not possible to isolate one error or failure that caused all of the problems that emerged with the home insulation program.  The causes of failure of the home insulation program were multifactorial.

And that:

The failings of senior management assured the failure of the project.  There can be no substitute for the leadership, advice and decision making that senior managers can bring.

As the epitaph to those insulators that paid the ultimate price the day that they turned up for work, the report noted:

Overall, it was poorly planned and poorly implemented.

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