Multibillion dollar state government insurer the Victorian Managed Insurance Authority has blocked the release of a damning report laying bare the culture of bullying at the organisation that has led to a massive staff exodus and a tranche of unfair dismissal claims.

In a strongly-worded slapdown to a Crikey Freedom of Information request to access the September 2008 employee culture survey, VMIA “risk and compliance manager” Peter Heard states that because the study is an “internal working document” he was forced to keep it under wraps.

The report, penned by respected human resources consultant Simon Brown-Greaves, was based on a series of employee interviews and is understood to contain full and frank character assessments of the group’s executive team, led by CEO Steve Marshall. It has remained behind lock and key for close to three years.

In his response, Heard argues the document was obtained “in confidence” and that it “related to personal affairs” — both grounds for exemption under the act. He bizarrely suggests the testimony provided by employees is unreliable because it is “based on the views expressed by individuals … rather than factual information”.

Brown-Greaves declined to comment on the report’s contents this morning.  However it is understood to contain a raft of damaging statements that, if released, would force Finance Minister Robert Clark — who oversees the VMIA — to intervene.

While Heard states the document is a “draft”, contains “errors” and was “not circulated”, Crikey understands that in fact senior VMIA executives, including Marshall, and at least two board members were fully aware of its existence and did not request further revisions.

The response to Crikey‘s request was received 45 days after the request — the final day permitted under the FoI Act.

Earlier this year, following a number of reports into the carnage, Crikey revealed that 71 staff members had left the VMIA in the last four years from a floating headcount of about 140. Staff turnover was a massive 67% in the two years to 2009.

In response, the organisation launched a probe conducted by another survey outfit, InSync. As we reported last month, it revealed that 20% of employees were bullied while a further 20% witnessed bullying. Following its tabling at board level, VMIA chairman and ex-Labor Senator Robert Ray stepped down from his position. But to date, the full text of the findings remains suppressed.

A letter circulated to staff by acting chair Ian Gaudion in response to the InSync survey, and obtained by Crikey, admits that while there is “not a culture of fear and intimidation at the VMIA”, “there have been instances of bullying and counterproductive behaviour”.

Gaudion slates home blame to the VMIA’s “culture change process” that has resulted in a more “commercial” direction for the insurer, and concedes that the “impact of the changes has been disruptive and stressful for a number of staff”. In response to the report, the VMIA board will apparently implement a plan to improve workplace culture.

Monash University Freedom of Information expert Johan Lidberg slammed the obfuscation, noting the organisation draws substantial funding from the public purse.

“The report is of course in the highest public interest, as is the management culture at all agencies funded by public money and should be released. So this is yet another example of the fact that the Victorian FoI system needs thorough reform,” he said.

Lidberg says he’s not surprised that the application has been rejected, but encouraged Crikey to appeal the decision.

While source documents continue to remain suppressed, more witnesses have emerged to critique the organisation’s culture. Senior medico Jack Bergman worked for the VMIA for seven years, leaving after the current management team was installed in 2007. He rejected the terms of the InSync review and agreed with current staff that the probe had proven a “whitewash”.

“Only 27 out of an extensive number of past employees were interviewed. I understand that the majority of these had to chase InSync to request a hearing, rather than InSync actively contacting them. And quite frankly that kind of number doesn’t lend itself to a credible report.”

He recalled the poisonous environment as the cultural change program kicked off four years ago: “I spoke with my feet. I wasn’t prepared to put up with it so I left. I experienced some of this shocking behaviour from my immediate superiors but not as badly as most of the other people who subsequently left. I wasn’t prepared to wait around to let it continue.”

A spokesperson for Robert Clark told Crikey the reform process inside the VMIA was now under way.

“The VMIA has already started taking action to improve its workplace culture, as part of a longer-term plan agreed to by the board in response to the issues that emerged last year,” they said. “The government has asked the VMIA to provide updates on their progress, and these updates will be monitored by the government.

“The board and CEO continue to have the support of the Victorian Coalition government and recruitment of a new chair is underway.”

The broader issue of workplace bullying in Victoria continues to fester. Last week parliament passed legislation mandating jail sentences of up to 10 years for the worst offenders. And a State Services Authority bullying report issued in April revealed that Victorian public servants were 25% more likely to be harassed than their interstate counterparts.