The objective of the audit was to assess the effectiveness of the Department of Veterans’ Affairs’ and the Department of Defence’s administration of the Australian Government’s $55 million support package announced in the May 2010 Budget for former F-111 fuel tank maintenance workers and their families. The audit examined the implementation of the 14 agreed recommendations in the Government Response to the 2009 Parliamentary Inquiry into the F-111 deseal/reseal issues, which formed the basis of the May 2010, F-111 support package.
1. The F-111 strike and reconnaissance aircraft was an important part of Australia’s strategic defence for almost 40 years due in part to its long-range capacity. To achieve greater flying distances, the F-111 maximised fuel storage differently to many other aircraft by storing fuel in numerous compartments instead of using fuel bladders.1
2. Throughout the aircraft’s life, the F-111’s fuel tanks required continuous maintenance to enable the aircraft to remain operational. Within three months of the delivery of 24 F-111 aircraft in 1973, the deterioration of the fuel tank sealant caused major fuel leak issues. The leaking fuel tanks, combined with the F-111’s unique fuel storage system, meant that maintenance workers undertook repair work in hazardous occupational settings not previously experienced with other Royal Australian Air Force (RAAF) aircraft types.
3. To address the fuel leaks, four formal deseal/reseal maintenance programs were conducted between 1977 and 2000 at the RAAF Base at Amberley in Queensland. In addition to the formal deseal/reseal programs, between 1973 and 2000, continual flight-line repairs, known as Sealant Rework, or ‘pick-and-patch’ repairs2 were conducted. The ‘pick and patch’ work involved the physical removal of the tank sealant, with workers entering the fuel tanks to use dental picks and other tools, and then resealing the area around the leak. The workers undertook the activity as one of a number of functions, and did not work in the fuel tanks as their primary task.3
4. In January 2000, the RAAF ceased F-111 fuel tank maintenance after concerns were raised at Amberley airbase about adverse health effects reported by workers, including: skin rashes, gastro-intestinal problems, headaches, fatigue and loss of memory. Concerns over the adverse health effects experienced by F-111 fuel tank maintenance workers and their families gave rise to a range of inquiries and support measures by the Australian Government, administered variously by Defence4 and the Department of Veterans’ Affairs (DVA). These included:
- a RAAF Board of Inquiry (BOI) which was commissioned in July 2000. It examined the four formal deseal/reseal programs and reported in September 2001;
- an Interim Health Care Scheme (IHCS) established by Defence in September 2001. The IHCS provided health care for F-111 fuel tank maintenance workers for specified conditions pending completion of the Study of Health Outcomes in Aircraft Maintenance Personnel (SHOAMP). The SHOAMP reported in 2004 and found an association between deseal/reseal work and a range of health conditions such as anxiety, depression, memory impairment, erectile dysfunction, and an increased risk of cancer;
- a new Health Care Scheme (the SHOAMP HCS) and Better Health Program, which commenced in August 2005 for workers who had worked on the four formal programs or related activities. The Government also provided access to counselling;
- the acceptance of 31 health conditions identified as related to F-111 fuel tank maintenance work, under subsection 7(2) of the Safety, Rehabilitation and Compensation Act 1988(SRCA). DVA accepted liability if it determined that a claimant was eligible, and was diagnosed with any of the 31 conditions; and
- payments of $10 000 and $40 000 have been available since August 2005 under the F-111 ex gratia payment scheme, to F-111 maintenance workers in the four formal deseal/reseal programs or associated duties.5
5. In response to ongoing concerns about the treatment of former fuel tank maintenance workers and their families, including those involved in ‘pick and patch work’, the Joint Standing Committee on Defence, Foreign Affairs and Trade (JSC) conducted an inquiry and tabled the report Sealing A Just Outcome: Report from the Inquiry into RAAF F-111 deseal/reseal workers and their families (the JSC report), in June 2009. The JSC report made findings relating to health and compensation issues surrounding F-111 fuel tank maintenance workers and their families. The report also commented on the support measures introduced by the Australian Government to that time, including the F‑111 ex gratia payment scheme.
6. The Australian Government accepted 14 of the 18 recommendations put forward by the JSC, and in the May 2010 Budget, the Government announced a further $55 million6 support package over four years in response to the JSC’s report. The package included:
- expansion of the definition of eligible workers used in the 2005 F-111 ex gratia payment scheme—enabling an estimated additional 2400 F‑111 ‘pick and patch’ fuel tank maintenance workers and other tradespeople to access compensation and healthcare under subsection 7(2) of the SRCA;
- the development of new guidelines which allowed the use of statutory declarations as proof of eligible service, in cases where records were inadequate or non-existent;
- a commitment to reviewing prior cases where a statutory declaration had been rejected in determining an ex gratia payment;
- measures to enable family members to receive additional counselling support;
- reopening the Study of Health Outcomes in Aircraft Maintenance Personnel Health Care Scheme (SHOAMP HCS) to new applicants, by abolishing the 20 September 2005 closing date for registering with the Scheme;
- removing the requirement which had excluded the estates of workers who died before 8 September 2001 from applying for the F-111 ex gratia payment;
- the development of a new DVA and Defence joint website which would provide information and assistance to potential claimants; and
- the appointment by DVA of a Senior Monitoring Officer (SMO) to, amongst other tasks, report to government on the implementation of the support package.
7. DVA has responsibility for implementing 10 recommendations from the Australian Government’s response to the JSC report, while Defence has responsibility for three recommendations. Responsibility for one recommendation is shared by the departments. DVA’s responsibilities relate to facilitating access to the package of support measures, including health care, counselling and access to simplified compensation arrangements. Defence has sole responsibility for a broader program of work addressing Australian Defence Force (ADF) workplace health and safety (WH&S) issues, intended to avoid a recurrence of the circumstances facing the F-111 sealant workers. Defence and DVA share responsibility for the development of a website targeting fuel tank workers and their families, and work together to process initial applications to determine eligibility for support under the package.
8. Implementation of the package began two months before the announcement of the Government’s response in May 2010, and is funded to June 2014. As at January 2013 overall direct expenditure has been $15.5 million, which is less than anticipated largely due to a lower than expected uptake of the program by potential beneficiaries.7
Audit objective and scope
9. The objective of the audit was to assess the effectiveness of DVA’s and Defence’s administration of the Australian Government’s $55 million support package announced in the May 2010 Budget for former F-111 fuel tank maintenance workers and their families. The audit examined the implementation of the 14 agreed recommendations in the Government Response to the 2009 Parliamentary Inquiry into the F-111 deseal/reseal issues (the government response), which formed the basis of the May 2010, F-111 support package.
10. The criteria used to assess DVA’s and Defence’s performance against the audit objective were:
- DVA and Defence have effectively progressed the implementation of the $55 million package of support for former F-111 fuel tank maintenance workers and their families;
- DVA has implemented effective processes to promote access to, and review eligibility for, the expanded F-111 support arrangements;
- DVA has implemented effective processes to support former F-111 fuel tank workers claiming health care services, compensation and other benefits; and
- DVA and Defence communicate with the F-111 fuel tank maintenance community, monitor claims for late onset conditions, conduct further research, and provide reports as required, in order to effectively administer the support package.
11. Over a service life of almost 40 years, the deterioration of sealants in the F-111 aircraft’s fuel tanks gave rise to a continuous resealing process which exposed workers to potentially hazardous working conditions, often within the fuel tanks themselves. Concerns over the health effects reported by workers and their families resulted in a variety of support measures by the Australian Government between 2000–2005, and an important parliamentary inquiry which made 18 recommendations on the way forward in 2009. To give effect to the 14 inquiry recommendations accepted by the Australian Government, a $55 million support package was announced in the May 2010 Budget, to be implemented over four years by DVA and Defence.
12. To date, DVA and Defence have made effective progress in implementing the Government’s 2010 package of support for F-111 fuel tank workers and their families. Eleven of the 14 recommendations, relating to enhanced access to support and compensation, and a review of training for DVA staff, have been implemented. Two further recommendations, relating to the provision of senior oversight and expert advice within DVA of its assessment process for claims eligibility, and Defence’s reporting to the JSC on the progress of litigation in F-111 common law cases—have been substantially implemented. However, there remains scope to strengthen the oversight of DVA’s claims processing and aspects of decision-making relating to claims, a process which DVA and Defence commenced during the course of the audit. A key threshold recommendation for Defence, relating to ADF capability in occupational medicine and a review of its workplace health and safety practices, remains partially implemented and is likely to take some time and additional resources to fully implement.
13. By way of background, DVA and Defence acted quickly after the May 2010 Budget announcement, to communicate with potential applicants on accessing the enhanced support package. The departments launched a dedicated website on the evening of the government announcement and followed-up with a range of other communication activities.8 The departments had undertaken effective planning in the months preceding the announcement, and were also in a position, within a relatively short period after the announcement, to begin the review of previously unsuccessful claims9 and to accept new applications under the enhanced arrangements for support and compensation.10
14. Under the previous ex gratia payment scheme for F-111 workers, which had operated from 2005 to 201011, DVA had determined that 762 people were eligible for health care and compensation. Since the May 2010 government response, DVA has applied an expanded definition of eligibility which has resulted in a further 747 people becoming eligible for health care and compensation.12 The process, known as Tier classification13, was intended to enhance workers’ access to health care, counselling and compensation. DVA established a generally effective process to assess new claims and to review previously unsuccessful claims, facilitated by a dedicated F-111 processing team of experienced staff who were involved in the 2005–2007 support measures.
15. In examining the processing of claims, the ANAO identified deficiencies in aspects of decision-making in 23 per cent of its sample of 47 new and reviewed cases assessed by DVA and the RAAF, relating to: the recording of evidence, the consideration and weighing of evidence, and general record keeping. While such shortcomings do not necessarily invalidate DVA’s decision-making in particular cases, DVA and the RAAF acknowledged, after these matters were drawn to their attention by the ANAO, the need to address the identified shortcomings in the decision-making process and will amend the relevant practices and program guidelines. However, while this approach would improve decision-making for future cases, it does not directly address potential weaknesses in decision-making relating to previously assessed cases. Accordingly, DVA has agreed to re-examine, in consultation with the RAAF, some of the decisions where the application was unsuccessful—such as those involving ‘usual place of duty’ (discussed further in paragraph 17) or where significant inferences were drawn from the evidentiary material available—and if the evidence supports a change of decision, DVA has advised it will remake the decision.
16. The ANAO also identified scope for improvement in DVA’s approach to the reconsideration of decisions. Since May 2010, DVA has progressively improved its approach to the reconsideration of decisions, and now offers reconsideration where the applicant is dissatisfied with the decision. While this approach is consistent with better practice, until recently DVA had not communicated this option to applicants.
17. Further, the ANAO observed a lack of clarity in the key technical definition used to determine certain workers’ ‘usual place of duty’ for claims purposes—specifically those who had not entered fuel tanks but who had nonetheless worked in locations which may have exposed them to hazardous conditions. There would be merit, given the importance of the definition in the claims process, in DVA seeking advice from the Military Rehabilitation and Compensation Commission (MRCC) to obtain a more precise definition of ‘usual place of duty’.
18. The Australian Government’s response to the JSC report acknowledged that implementation of the enhanced package would be facilitated by a review of DVA staff training to raise the standard of client service, the provision of expert advice within DVA by a Senior Monitoring Officer (SMO), and formal oversight of implementation by the SMO. DVA has undertaken a review of training and has rolled out a revised training program which includes training in decision-making and client support. However, a significant aspect of the SMO role intended to support staff and improve client service—the provision of expert assistance to DVA processing staff as a means of quality assurance—was undertaken as a minor part of the role. This represents a missed opportunity as the bulk of the application assessment process has now been completed.
19. For Defence and the ADF in particular, a threshold issue—considered in the 2001 BOI report on the sealing programs and the 2009 JSC report—was how to avoid a recurrence of the circumstances faced by the F-111 fuel tank workers. The Government accepted the JSC’s recommendation that: the ADF expand its internal capability in occupational medicine as a matter of some urgency; and that a review of practices in handling occupational health and safety (now known as workplace health and safety) matters within the ADF be conducted to respond to a range of ‘structural and cultural issues’ identified in the JSC report and the earlier BOI report.14 While Defence has acknowledged the importance of addressing certain cultural attitudes which can impact on WH&S—including a pervasive ‘can-do’ attitude within the ADF15—and has implemented a range of specific initiatives, the recommendation remains partially implemented. Defence has appointed an additional senior physician in occupational medicine, but a further ADF position remains vacant and Defence has recognised internally that there is scope to further develop this capability. Defence is also in the process of employing 19 additional specialist staff in its central WH&S Branch to undertake WH&S audits, incident investigations and to augment its advice and support role; and the senior Defence WH&S committee has expressed the intention that Defence adopt a more proactive approach to WH&S. While Defence has continued to make investments in WH&S since 2010, fully addressing the acknowledged capability gap would require a further investment in WH&S workforce and skilling—a matter for decision by Defence, and potentially the Government.
20. The ANAO has made one recommendation to DVA about seeking advice from the MRCC on refining the existing definition of ‘usual place of duty’ as employed in the claims determination process.
Key findings by chapter
Agency implementation and communication arrangements (Chapter 2)
21. Implementation of the four-year F-111 support package is in its third year. Direct expenditure from 2010 to January 2013 has been $15.5 million, $3.5 million of which was departmental expenditure. DVA and Defence advised that the expenditure on compensation and health care was lower than anticipated, due to a lower than expected client take-up. However, DVA has projected that expenditure will increase as outstanding Tier applications and compensation claims are determined.
22. DVA has put in place the key elements necessary to support effective implementation of the F-111 support package. The department effectively planned for implementation by developing and documenting a Project Plan, and established governance arrangements to guide its internal administration and co-ordinate its activities with Defence—including the development and later refinement of the relevant F-111 Schedule of the Memorandum of Understanding (MoU) between the departments. The MoU sets out the departments’ respective responsibilities and communication arrangements.
23. DVA established a dedicated F-111 Tier and claims processing team; a specially tailored approach which was adopted to facilitate the processing of applications for F-111 Tier classification, and for compensation claims and benefits. The team consisted of experienced staff who were involved in the 2005–2007 F-111 support measures. There was however a delay, until January 2012, in developing comprehensive Program Guidelines to direct staff in processing applications for Tier classification, the department instead relying on various instructions from May 2010. The delay occurred notwithstanding concerns expressed by the Commonwealth Ombudsman in 2009, that DVA did not have in place documented policies for assessing and determining F-111 claims.
24. The DVA Project Plan identified a risk that RAAF staff may not be adequately trained to assess applications under the expanded package, potentially leading to incorrect or inconsistent decisions. The action identified to ameliorate the risk was to provide appropriate staff training. However, formal training in areas such as administrative decision-making, evidence handling and record keeping has not been provided until recently.
25. The JSC recommended, and the Government agreed in its response, to appoint a senior person—the SMO—to oversee the implementation of all the recommendations and to provide expert assistance to DVA in processing claims for Tier classification. However, due to the allocation of duties between a DVA Assistant Secretary and the SMO, the SMO provided only limited oversight and expert advice to the Tier processing teams. The SMO role was restricted to coordinating the reporting to government and monitoring claims for emerging trends in health conditions related to F-111 fuel tank maintenance. As a consequence, an opportunity has been missed for the SMO to provide quality assurance for the investigation and evidence-handling work undertaken by Tier processing teams.
Client access to support and compensation (Chapter 3)
26. The ANAO’s analysis of 47 Tier classification cases and eight reviewed cases identified a lack of clarity and subsequent difficulty in the interpretation of a key term used to assess eligibility for some of those who did not enter F‑111 fuel tanks—the ‘usual place of duty’—and there would be merit in DVA seeking further guidance from the MRCC on the definition and application of this term.
27. The ANAO also observed examples of cases that showed inadequate consideration of evidence, documentation of reasons for decisions, and record keeping. DVA and the RAAF acknowledged that there have been some shortcomings with documentation of evidence gathering, evidence weighing, drawing of inferences from facts, and referencing technical information where used. While such shortcomings do not necessarily invalidate decision-making in particular cases, and DVA and the RAAF have advised that the incomplete implementation of these processes has not affected the individual Tier decisions, DVA will review certain classes of the unsuccessful Tier classification cases, and has also agreed to further improve relevant processes and documentation, including the Program Guidelines.
28. DVA considers that the Tier classification decision is a decision under the F-111 ex gratia payment scheme and that no formal review rights exist for applicants. Notwithstanding this position, DVA has over time developed an approach which allows for the review or reconsideration of a Tier classification decision. In May 2010, DVA advised unsuccessful Tier applicants that they could seek review of the decision-making process via the Commonwealth Ombudsman, albeit not a review of the decision itself. In June 2011, DVA revised its position and began advising unsuccessful Tier applicants that DVA would reconsider the claim if the claimant could provide additional evidence. In January 2013, DVA again revised its approach and now offers a reconsideration upon request. While DVA’s approach has evolved, the department has not, until recently, clearly informed applicants that it will reconsider a decision upon request by the applicant, and there would be merit in doing so.
Further support for F-111 fuel tank workers and their families (Chapter 4)
29. DVA has published and promulgated to its staff a Protocol for Dealing with Clients at Risk. DVA has also redeveloped its approach to, and provision of, staff training through a revised Learning and Development Framework. The framework includes online training and new courses on: administrative law, decision-making, and managing clients with mental health issues, which were rolled out in 2012 and 2013.
30. Since the introduction of the F-111 support package, DVA has provided a significant range of further support services to former F-111 maintenance workers. Through the Veterans and Veterans Families Counselling Service (VVCS), DVA has developed and delivered a specific F-111 Lifestyle Management Program for F-111 fuel tank workers and their partners, and has increased their utilisation of other VVCS counselling services. The F-111 Lifestyle Management Program has been well received by course participants.
31. DVA has sensitively managed the relationship with key stakeholder groups, in particular the Deseal/Reseal Support Group. The key stakeholder groups consulted by the ANAO reported an effective and collaborative relationship with the DVA and RAAF specialist Tier classification and compensation teams, and advised that they have not received complaints from their members about the implementation of the Government’s response.
Implementing the broader Defence recommendations and overall outcomes (Chapter 5)
32. Defence continues to grapple with the issue of how to avoid a recurrence of the circumstances faced by the F-111 fuel tank workers; an issue considered by the 2001 BOI and the 2009 JSC report. The senior Defence WH&S committee has stated an intention to improve Defence’s WH&S capability so that it can address WH&S issues proactively, rather than reactively—which is Defence’s current (self-assessed) situation.16 Achievement of a proactive WH&S stance across Defence’s Services and Groups is dependent upon further and significant investment in staff training, additional specialist staff, and a focus on the cultural change proposed by the BOI and JSC.
33. Defence has undertaken significant developmental and preparatory work as part of the Occupational Medicine Occupational Hygiene Project (OMOH Project), and has begun to take some steps under a Shared Services model to deliver a centralised WH&S audit function and strengthen its ability to provide advice to command. However, as Defence WH&S delivery transfers from the central OMOH Project to Business as Usual in Defence Groups and Services, the risk remains that WH&S capability, sufficient to bridge that gap, will not be developed.
34. Defence continues to support research through the Jet Fuel Exposure Syndrome Study which is being undertaken by Professor Bowling of the Mater Medical Research Institute. This study aims to determine if there is a relationship between exposure to jet fuel/solvents during F-111 fuel tank maintenance work and mitochondrial genetic changes. Should this work identify effective prevention measures to protect people exposed to such fuels, it would have potential benefits outside of Defence.
35. As DVA and Defence enter the fourth year of implementing the enhanced package of support for F-111 workers and their families, there would be merit in DVA conducting a post implementation review in cooperation with Defence, to understand the components of the package and implementation approach that have worked well and those aspects where there was scope for improvement.
Summary of agency responses
Department of Veterans’ Affairs
36. DVA agrees with the recommendation made in the ANAO report, acknowledging that clarification of the terms `usual place of duty' and `direct support' would assist with the interpretation of some of the Tier categories. DVA will work with the Royal Australian Air Force to further clarify these terms for the Military Rehabilitation and Compensation Commission's consideration.
37. DVA appreciates the ANAO's recognition that, overall, the implementation of the F-111 support package has been administered effectively. DVA is committed to providing a quality service for F-111 fuel tank maintenance workers and their families and welcomes the ANAO's review of its services to this cohort. Several of the ANAO's suggested improvements have already been made, with other suggested improvements in progress. These will help ensure that DVA continues to meet best practice procedures in the administration of the F-111 programs.
Department of Defence
38. Defence acknowledges the findings contained in the audit report on Compensating F-111 Fuel Tank Workers, and notes there are no Recommendations for Defence. Defence appreciates the value of the audit process and continually seeks opportunities for improvement.
39. Defence welcomes the ANAO’s observations on its progress in increasing Defence’s Work Health and Safety capability, and particularly in regards to Occupational Medicine and Occupational Hygiene. Defence has learned from the F-111 Deseal/Reseal experience and is continually building its safety culture; and, through leadership and individual commitment, Defence aims to ensure no person will suffer a serious preventable work related injury or illness.
Recommendation No. 1
The ANAO recommends that DVA seek advice from the Military Rehabilitation and Compensation Commission in order to obtain a more precise meaning of the terms: ‘usual place of duty’ and ‘direct support’, which are employed in the Tier definitions for Categories 7 and 8, and are used to determine the eligibility for support for people who worked in the hangars where F-111 fuel tank maintenance was performed.
DVA response: Agreed
 Joint Standing Committee on Foreign Affairs, Defence and Trade, Sealing a just outcome: Report from the Inquiry into RAAF F-111 deseal/reseal workers and their families, Canberra, June 2009, p. 5.
 ibid., p. 16.
 As well as workers directly engaged in fuel tank repairs, others were exposed to the chemicals used. They were involved in handling and incinerating sealants, solvents and contaminated fuel; and worked within or disassembled the Amberley ‘rag hangar’—a canvas hangar where deseal/reseal activities occurred.
 The Defence portfolio consists primarily of three organisations: the Department of Defence (headed by the Secretary of Defence), the Defence Materiel Organisation (headed by its Chief Executive Officer), and the Australian Defence Force (which consists of the Navy, Army and Air Force, and is headed by the Chief of the Defence Force). These organisations work together and are known as Defence (or the Defence organisation).
 Workers who had performed ‘pick and patch’ work in F-111 maintenance squadrons were not entitled to the ex gratia payment and compensation arrangements outlined in paragraph four.
 The actual Budget measure was $56 872 000, with $2.2 million allocated for the year 2009-10: Australian Government, Portfolio Budget Statements 2010–11, Department of Veterans’ Affairs, Budget Related Paper No. 1.5B, pp. 22–24.
 Department of Veterans’ Affairs, ‘Fifth progress brief on the implementation of the Government response to the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) Parliamentary Inquiry into RAAF F-111 Deseal/Reseal workers and their families’, 6 February 2013, p. 3.
 In doing so Defence and DVA implemented Recommendation 15.
 Relating to Recommendation 7.
 Relating to Recommendations: 1,2,8,9,10 & 12.
 DVA advised that a very small number of cases continued to be determined from 2007 until 2010.
 This doubles the number of people eligible for health care and compensation: in total since 2005, approximately 1500 fuel tank workers have achieved Tier classification. This represents 48 per cent of the estimated 3100 potentially affected people.
 DVA, with the support of the RAAF, determines eligibility for health care, compensation and the ex gratia payment through a Tier classification process which examines and considers the applicant’s F-111 fuel tank maintenance claims and history.
 Recommendation 17 of the JSC report stated: ‘That the ADF expand its internal capability in occupational medicine as a matter of some urgency. That a review of current practices in handling OH&S matters within the ADF be conducted to amongst other things, respond to the structural and cultural issues identified in the BOI and by Professor Hopkins’.
 The JSC drew attention to several structural and cultural issues which were identified by the BOI as arising in the F-111 context: the reliance on contracted medical personnel; the relative powerlessness of the aircraft maintenance workers; the overreliance on, and the problems with, inadequate personal protective equipment; the RAAF’s ‘can-do’ attitude; and the relative importance of military platforms over workers’ safety (see paragraph 5.10).
 The Defence Occupational Health and Safety Maturity Model is a road map for the improvement of Defence’s safety performance and was endorsed by the Defence WH&S Committee in 2009. The model has five levels with ‘Reactive’ as the lowest level and ‘Leading’ as the highest level. Defence aims to achieve the Proactive Level—Level 3. Department of Defence, Defence Occupational Health and Safety Management System: DOHSMS Maturity Model—Guide for commanders and managers, November 2006.