Suppliers of recycled mulch have been placed on notice after asbestos fragments were discovered at a public school, triggering an urgent review of work done at other NSW campuses.
An area has also been cordoned off at Campbelltown Hospital, in Sydney's southwest, the latest site potentially affected by the contaminated material since it was discovered near a playground at a new park in the inner city in mid-January.
NSW Premier Chris Minns warned unscrupulous suppliers would be driven from the industry if an ongoing investigation found any evidence of wrongdoing.
"If there are people who are going to breach the rules, there's no place for them in that industry," he said on Monday.
Bonded asbestos was discovered in mulch at Liverpool West Public School, in Sydney's southwest, over the weekend, forcing the school to close for at least two days while the material was removed.
Mr Minns said parents who wanted answers on how the material ended up on school grounds would be understandably frustrated, but the NSW Environmental Protection Agency was investigating.
Bonded asbestos, which is considered a low risk to public health, has been found at 13 sites across Sydney in mulch made up of recycled building material.
Mr Minns said the supply chain for the product was complicated, but stricter rules would be brought in if required.
NSW EPA chief executive Tony Chappel said officers were tracing the mulch in a similar way to health authorities' tracking of the spread of COVID-19.
He said supplying mulch contaminated with asbestos was a serious criminal offence and the agency has more than 70 staff investigating.
"The supply chain is under intense scrutiny," he said.
Education Minister Prue Car said the school will remain closed until at least Wednesday.
"This is obviously something that needed to be dealt with straight away," she said.
Ms Car said the supplier identified by the EPA had not provided recycled mulch to other public school sites.
"We understand at this stage that it is not in any other schools, but we are double and triple checking everything," she said.
Education Department secretary Murat Dizdar said it had been made very clear to suppliers they needed to test recycled mulch before it was laid.
Bonded asbestos is considered a lower risk to the public than friable asbestos, but it can weaken and have the potential to turn into powder as it ages and is exposed to the elements.
Australia banned the use, sale or import of asbestos in 2003.