The Victorian government’s security firm of choice for guarding hotel quarantine guests was caught using unauthorised subcontractors in the lead-up to the first COVID-19 outbreak but was kept as a supplier to the program anyway.

Unified Security, recruited by Jobs Minister Martin Pakula’s department as one of three private security companies with contracts to guard hotels, had only 39 permanent staff in Victoria and hired almost all of its 1754 guards through subcontracting arrangements without the formal approval of Jobs Department officials.

The Rydges on Swanston hotel in Carlton – Melbourne’s first ‘hot hotel’.Credit:Penny Stephens

The apparent poor behaviour of the security companies was tolerated in the program even though Jobs Department officials given the task of hiring them to do the sensitive work had been wary from the start of what they knew to be a "cowboy industry," with “heaps of cash work”.

In WhatsApp messages exchanged between departmental officials as they were setting up the private security arrangement, the staff said they did not want “rogue” operators "prowling the corridors" of hotels.

Also revealed in the inquiry on Tuesday was a recording of a meeting held to set up hotel quarantine in which Victoria’s Emergency Management Commissioner Andrew Crisp speculated about using ADF troops to set up a “Navy blockade” off Melbourne to prevent cruise ships landing in Victoria.

After days of grilling senior bureaucrats, the inquiry this week will question Mr Pakula and police minister Lisa Neville on Wednesday, followed by Health Minister Jenny Mikakos on Thursday and Premier Daniel Andrews on Friday.

Evidence presented to Jobs Department secretary Simon Phemister in the inquiry on Tuesday showed Unified Security had subcontracted work to another firm, Elite Protection Services, for the Rydges on Swanston, before the hotel became the centre of the quarantine outbreaks in late May.

A policy officer for the department said no action was taken against the company after Unified dumped the subcontractor and hired a new one. Six of its subcontracted guards caught coronavirus from returned travellers in the hotel before the virus spread into the community and drove the state’s second wave.

COVID quarantine hotel inquiryDepartment of Jobs, Precincts and Regions Secretary Simon Phemister.

In his statement to the inquiry on Tuesday, Mr Phemister said he did not think the department had "considered … the possibility of them subcontracting their obligations”.

Rachel Ellyard, the lawyer asking questions of Mr Phemister on behalf of the inquiry, also pressed him on infection control, asking why the department had put “primary responsibility on private companies rather than retaining that responsibility within government”.

Mr Phemister replied: “I can’t comment on that matter. It’s beyond my area of expertise.”

On Tuesday Victoria’s top health bureaucrat, Kym Peake, became one of a series of officials to be unable to explain to the inquiry who was in charge of the hotel quarantine system. Ms Peake, the secretary of the Department of Health and Human Services, refused to take overall responsibility for a scheme that she said shared “accountability” between myriad departments and agencies involved.

With mounting frustration during his questioning of Ms Peake, counsel assisting the inquiry, Ben Ihle, invoked Premier Daniel Andrews who had “said repeatedly, ‘We’re here to find answers’”. Instead, “in respect of the questions that we’re asking, we’re being told, 'Well, no one knows who made these important decisions because it’s a model of shared accountability'.”

Kym Peake.Credit:Hotel Quarantine Inquiry

Ms Peake, the secretary of the Department of Health and Human Services, responded that her department was the control agency that oversaw Operation Soteria, the taskforce behind hotel quarantine, “but my view is that there was a joint operation on the ground.”

“I know it would be – what’s the right word – straightforward, if there was an ability to say today there was a single point of accountability … but I do think the whole weight of evolution of public administration and public service delivery has been that people are not carved up into portfolios,” she said.

Ms Peake also told the inquiry that, prior to the hotel program being announced by National Cabinet, she had assumed quarantine would be a federal responsibility. Victoria had no plans for wholesale quarantine prior to March 27, when National Cabinet made the decision and announced it.

Ms Peake said she “hadn’t contemplated there would be mass quarantining at all” but “under the Constitution” if it was to happen, she expected it would be led through the Federal government.

More details also emerged about the first hotel quarantine program meeting on March 27, two days before the first international arrivals were detained, during which the system was set up, and which was overseen by Emergency Management Commission Andrew Crisp.

Mr Phemister said he believed his department had been directed during this meeting to use private security guards as the first line of security. Victoria Police say they expressed a preference, not a direction, in the meeting that private security should be used.

Transcripts of the meeting also reveal Mr Crisp speculated that extra Australian Defence Forces troops might be required to set up a naval blockade of Victoria's ports to keep out cruise ships.

In a conversation about the imminent arrival of two cruise ships to Victoria, Mr Crisp said that, if that was going to happen, "we might need a bit more help from the ADF. We need a Navy blockade so the ships can't get close to Victoria," according to a recording of the meeting. The comment was followed by nervous laughter.

Mr Crisp' was quickly reassured by another attendee, whose identity has been redacted, that the two ships were only coming to resupply and take on two passengers, with nobody getting off.

"That’s very useful," Mr Crisp replied.

Earlier in the same meeting, Mr Crisp had told the ADF there were enough resources for the quarantine program and "we don't see a need for boots on the ground".

Mr Crisp has since issued a statement saying: "I did not seek nor did representatives of the ADF offer assistance as part of the hotel quarantine program."

Premier Daniel Andrews relied on that statement to justify his own comment that "hundreds of ADF staff" were not offered to Victoria.

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