Stunning evidence given today to a Parliamentary Inquiry revealed that the Chief Executive of a major company believed the WorkCover expression of interest process seemed "smelly” and “improper".
Mr Paul Serong, Chief Executive of Cambridge Integrated Services, made the comments to the Legislative Council Statutory Authorities Review Committee about eventual successful bidder Employers Mutual Limited's application being lodged two months after the closing date for expressions of interest for the WorkCover claims management contract.
Hon R Lucas: “Does that then raise the perception of potential unfairness?
Mr P Serong: “…Quite clearly it does. Yes, it does raise unfairness. It also could be a consideration, maybe, that information might have been gleaned to that tenderer. To me it smacks of something smelly.
Hon T Stephens: “Improper.
Mr P Serong: “Yes, it is improper.”
(SARC, Hansard, 3 November 2008)
“There was, according to Mr Serong, a perception of unfairness and the process seemed “smelly” and “improper.” He also wasn't aware that another bidder had been included after the closing date until today's meeting of the SARC,” Liberal MLC Rob Lucas said today.
“Mr Serong also made reference to public surveys about workers' and employers' satisfaction which highlighted a decline in both areas since EML had taken over and also highlighted that, in the same period, unfunded liabilities had increased.
“Mr Serong’s comments today followed previous evidence to the SARC by two bidders, Allianz and QBE Insurance, and a former WorkCover Board member, Janet Giles.”
David Krawitz, Allianz Chief General Manager Workers’ Compensation, stated in a letter to the SARC dated 28 September 2008:
“Allianz was not aware that EML had submitted a late EOI. Had we been aware, we would have raised this as a matter of concern with WorkCover.”
Colin Fagen, QBE Insurance Executive General Manager Intermediary Distribution, and Jason Hammond, National Manager Workers’ Compensation, told the SARC that:
Mr C Fagen: “We were not aware [that EML had submitted a late EOI] at all at the time…”
Mr J Hammond: “If we were aware of it at the time, of course we would have expressed interest in that…Interest and concern…”
(SARC, Hansard, 20 October 2008)
“Similarly, WorkCover Board member Ms Giles indicated her concerns to the SARC:
Hon R Lucas: “As a Board Member were you aware that EML did not lodge an expression of interest within the required time frame and was allowed to lodge a late expression of interest?
Ms J Giles: “That is not my understanding. That is the first time I have heard of that. My understanding was that it did do it within the required time frame.
Hon R Lucas: “If it was subsequently proven to be the case that they did not, would you as a Board Member have had concerns about that?
Ms J Giles: “Of course.”
(SARC, Hansard, 22 September 2008)
“It is clear from Mr Serong’s evidence, and others, that serious concerns about the tendering process for claims management conducted by WorkCover have now been raised, and WorkCover and the Rann Labor Government must respond to these claims.
“At the very least it would appear that other bidders should have been advised that EML had lodged a late EOI, so that other companies could consider what action they wanted to take,” Mr Lucas said.
“After today’s sensational evidence, there are still many unanswered questions about WorkCover which will need to be considered by the SARC at future meetings.”