Dr Emerson asked the Minister for Industry, Tourism and Resources, upon notice, on 4 February 2003:

(1) Has his attention been drawn to a recent case where a member of the public alleged that a private testing laboratory altered the results of tests carried out on engineering equipment and also alleged that the National Association of Testing Authorities (NATA) failed to adequately investigate those complaints.

(2) What investigations or reviews has NATA undertaken in that particular case.

(3) What were the results of those reviews or investigations.

(4) What involvement has he had in addressing complaints concerning NATA's independence in investigating such allegations.

(5) What role has his Department had in these matters.

(6) Is he satisfied with the reviews carried out by NATA.

(7) What measures are in place to ensure that NATA maintains sufficient independence from the companies it accredits, monitors and investigates.

(8) Does the use of a private, non-profit body like NATA to monitor Australia's testing and laboratory facilities compromise the quality and safety of Australia's standards and conformance regime; if not, why not.

(9) Is he able to say whether in one case an executive of a company being investigated by NATA was also a member of the NATA Board and had access to correspondence concerning complaints about the company and NATA.

(10) Did that executive attend NATA Board meetings when the complaints against the executive's company and NATA were discussed.

(11) Did this person take part in NATA Board discussions on these matters and was the person involved in NATA's decisions on these matters.

(12) Under the Memorandum of Understanding between the Commonwealth and NATA, what powers does the Commonwealth have to monitor and supervise NATA's role and activities.

(13) Is the Government aware of any other cases where testing companies have failed to meet the standards set by NATA.

(14) What action has been taken by NATA on these occasions.

(15) How many such cases have there been.

(16) Is he able to say how widespread is non-compliance with NATA standards by testing laboratories and companies; if not, are there plans to assess testing companies' compliance with NATA standards.

(17) Has the Commonwealth conducted evaluations of NATA's effectiveness in monitoring Australia's testing standards; if so, what were the results of those evaluations.

(18) What powers are available to NATA to enforce its testing standards, and what disciplinary options are available to NATA against non-compliant companies.

(19) How often have these powers been used.

Mr Ian Macfarlane (Minister for Industry, Tourism and Resources) —The answer to the honourable member's question is as follows:

(1) Yes.

(2) I am advised that NATA has undertaken four investigations or reviews in this case. The first was undertaken on receipt of the complaint by the relevant NATA technical staff. The second review was undertaken by a senior NATA staff Manager, independent from the field of testing involved, instigated by the Chief Executive when the complainant expressed dissatisfaction with NATA's initial findings. A third review was initiated by the Chief Executive on receipt of a further complaint of dissatisfaction referred to NATA by my Department. This extended the complaint to cover both the laboratory concerned and NATA itself. A fourth review was established by NATA's Board through a two person sub-committee of the Board.

(3) As a result of the first investigation, NATA confirmed (and the laboratory acknowledged) that a number of unsatisfactory reporting and recording practices had been identified. The second NATA internal review of the processing of the complaint considered that the original handling of the complaint had been appropriate and suggested that additional information would be needed to warrant further investigation. For the third NATA review, the Chief Executive directed the investigators to pursue in more depth continuing assertions of the complainant. That investigation essentially confirmed the initial findings of deficiencies in the laboratory and the results of that review were tabled for consideration by NATA Board members (apart from one Board member whose laboratory had been the subject of the complaint, as he had declared a conflict of interest). The Board, from its own investigation of the complaint, concluded that NATA's earlier investigations should have been more rigorous and its complaint handling procedures for these types of complaint should be reviewed. It also concluded that accreditation of the laboratory under investigation should continue, noting the corrective actions it had instituted, but that it be sanctioned by being subject to increased surveillance of its continuing compliance with accreditation criteria.

(4) I asked my Department to investigate these matters.

(5) A senior officer of the Department was a member of the NATA Board at the time these matters were raised with me. He participated in the Board decision to form a sub-committee to review the matter, and was a member of that sub-committee. In December 2002, the Secretary of my Department delegated a senior officer to make an assessment of whether the process followed in this case was appropriate and whether there remained any outstanding issues of significance. That officer was senior to the officer who was a NATA Board member and separate from him in the structure of the Department.

(6) Yes.

(7) NATA's Constitution (embodied in its Rules) establishes as its peak governing body a Council which has a balance of interested stakeholders, including six representatives of the Commonwealth government, representatives of all State and Territory governments, representatives of various professional institutions, CSIRO, consumers, other standards and conformance bodies and elected representatives of accredited laboratories. This body, therefore, spans the full range of interests including laboratories and their users. NATA's Board of Directors is elected from the Council and the Board's deliberations, including complaints handling, are fully transparent to the Council, which receives the minutes of Board meetings. None of NATA's full time staff have any association with the laboratories subject to NATA accreditation. I understand also that NATA, in October 2001, appointed a Manager, Corporate Diligence, who monitors corporate governance issues and provides independent supervision for investigation of complaints.

(8) No. NATA is audited to an international standard at regular intervals by its international peers in the International Laboratory Accreditation Cooperation and this evaluation process includes proficiency testing of NATA-accredited laboratories. The position of NATA in Australia's standards and conformance infrastructure was examined during a full public inquiry by an independent Committee headed by Mr Bruce Kean AM in 1994, which agreed with the Committee's recommendations concerning NATA's status. The former government's response to those recommendations was reaffirmed in 1996 by the incoming Coalition government.

(9) Yes to both parts of the question. A Board Member was an executive of a company against which a complaint was made. In his capacity as principal of a company against which allegations had been made, he received copies of correspondence containing those allegations.

(10) Yes. He attended the Board meetings but was not present for any of the Board deliberations on this matter.

(11) No, see 10.

(12) Article 4.22 of the Memorandum of Understanding provides that NATA will respond to concerns raised by Commonwealth agencies with respect to the performance or competence of NATA accredited laboratories and will provide timely feedback to the relevant agency on actions taken to address those concerns.

(13) Yes.

(14) In some of the cases I am aware of NATA withdrew accreditation and, in some, laboratories were placed under increased surveillance through more frequent on-site reassessments.

(15) I am not aware of the total number of such cases since NATA's inception in 1947.

(16) Yes, see 19.

(17) Yes. There have been four Commonwealth public inquiries which have included NATA's roles and performance as part of their remit or investigation - the Ross Inquiry of 1983, the Foley Inquiry of 1987, the Kean Inquiry of 1994 and the 2002 Corrs review of pathology accreditation arrangements. All have been supportive of NATA's activities and achievements.

(18) NATA-accredited laboratories are subject to compliance with NATA's Rules and accreditation criteria. NATA's major sanctions are cancellation of accreditation, suspension of accreditation and imposition of more frequent on-site assessment regimes. All of these approaches are potentially to the financial disadvantage of the laboratory.

(19) Suspensions of accreditation (or part of the scope of accreditation) are commonly applied when a laboratory exhibits serious, uncorrected departures from accreditation criteria or is temporarily unable to meet criteria. At 30 June 2002, there were 2565 NATA-accredited facilities. I am advised that, at present, there are 42 laboratories whose NATA accreditations are suspended in full, with a further 9 laboratories with a partial suspension for relevant tests. Cancellations, which result in total termination of accreditation, have totalled 6 in the past three years. Various other laboratories are currently placed on more frequent reassessment regimes ranging from 6 monthly to 18 monthly cycles.