“The cost of climate change” from Story from Radio New Zealand by Radio New Zealand”.  (audio)

Here is a recent panel discussion at the University of Otago, chaired by Radio New Zealand’s Guyon Espiner, on the threats from climate change that coastal communities will face over coming decades.

It is remarkable for the fact that there is no mention of earthquake subsidence in eastern Canterbury, and the dramatic exacerbation of the threat from sea level rise for communities such as South New Brighton.
The panel does refer to the Flockton Basin and to property owners who have remained in the “Red Zone”, as well as to the responsibilities local government has towards them.

Adaptation strategies mentioned by the four academics include the obvious approach of raising the floors of new builds. In South New Brighton, as we know, the council took the opposite approach and reduced the floor height for new builds (an unfortunate error we were told), thereby leaving houses at vastly increased risk of flooding.

The disaster in Matatā in the Bay of Plenty is also mentioned as an example of “extinguishing existing use rights”. Regional Councils (such as Environment Canterbury) have the power to extinguish existing uses, especially in the context of hazard management. Once again, Canterbury witnessed the opposite approach – the widespread application of existing use rights, allowing insurance rebuilds to remain at the same height, even in coastal areas facing rising seas. The recently introduced “residential unit overlay” is continuing this practice, while at the same time absolving the Christchurch City Council of liability.

Mr Espiner argues that the failure on the part of the authorities to point out the risks for the future is tantamount to “setting people up for disaster”. This is precisely what we have seen in Christchurch.
Central and local government, along with insurance companies, have been fully aware of the future risks in the eastern suburbs of Christchurch, but, apart from the red zones, Sumner and Redcliffs, have done little to provide protection against them (by way of higher floor levels, flood protection measures or relocation), or to ensure the future insurability of properties. The risks have been systematically transferred to homeowners. A Productivity Commission query whether people might perhaps assume all of the risks relating to their property is dismissed by one panelist as a terrifying and ridiculous question.

The following reports from SCIRT dating back to 2011 are also available upon request. email: Hugo.k@empoweredchristchurch.com
Lower Avon Stopbanks Engineering Review Volume 1 Appendix E – Flood Maps.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix B – Ground Acceleration Plan.PDF Lower Avon Stopbanks Engineering Review -Volume 2 North – True Left Bank.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix J – Risk Assessment Maps.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix C – Lab Testing.PDF Lower Avon Stopbanks Engineering Review -Volume 2 South – True Right Bank.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix H – Stopbank Construction Form Drawings.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix I – Settlement Monitoring.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix A – Liquefaction Plan.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix K – Seepage and Stability.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix F – Risk Register.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix D – Condition Assessment.PDF Lower Avon Stopbanks Engineering Review.PDF Lower Avon Stopbanks Engineering Review Volume 1 Appendix G – Concept Design.PDF

Please note that since 2018, tidal measurements from council confirm tides to be substantially higher than when most the above reports were produced.

Ref: https://ccc.govt.nz/environment/water/coastal/2018-tidal-data/ 

 RESILIENT GREATER CHRISTCHURCH PLAN: 

Are you sick of hearing the word “resilience”? Has the word lost all meaning for you?
In June 2014, as part of the 100 Resilient Cities Network, a Chief Resilience Officer was appointed at council. For the following two years, the salary for the position was paid by the Rockefeller Foundation and almost nothing was heard of the activities the CRO was engaged in behind the scenes, despite the fact that the scheme purportedly “places people at the heart of a Resilient Greater Christchurch”. A further role of the position was to “address the needs of all city residents, and especially low-income and vulnerable populations, who were often hit hardest by shocks like natural disasters and chronic economic downturns.” Three years on, these groups are arguably in a worse position than they were in 2011 after the biggest natural disaster in New Zealand history, and council has repeatedly ignored pleas to help them (see below).

When interviewed on the subject of resilience in September 2016, for example, Mayor Dalziel was unable to give any concrete examples of what the CRO had actually achieved over the previous two years. Then, in September 2016, the mayor pledged 10% of funding in the 2017/2018 financial year for resilience projects, including the salary for the CRO. It is not clear what projects have been earmarked.
The following “Resilience Plan” from the Christchurch City Council has now become available, although, like the activities of the CRO, it has not been widely published. We believe it is an astonishing example of the total disconnect between theory, as trumpeted by the plan, and the actions and policies of the council in practice. 

[gview file=”http://greaterchristchurch.org.nz/assets/Documents/greaterchristchurch/Resilient/Resilient-Greater-Christchurch-overview.pdf”]

Alternative facts are on the march, so beware of the following terms as used in the document: resilience, vision, stakeholder, and engagement. These terms appear to be euphemisms for what the city council is actually planning, which, in many cases, is the exact opposite of the accepted meaning of the term (resilience = residents taking on and paying for risks; vision = plan to rid ourselves (councils) of liability; stakeholders/we/us = the authorities, not the ratepayers; engagement = spin and propaganda to convince people of alternative facts).

Click on the picture to read some of the key statements and statistics from the document, which has not been widely shared or publicised among the city’s worst affected communities. Empowered Christchurch comments are in italics following the excerpts.

“Resilience is a word we have heard a lot in Greater Christchurch over the past five years. No matter what extent to which [sic] we are familiar with this word in our day-to-day lives, it is important that we collectively understand the concept of resilience.

We know that we will encounter future challenges. This is not simply about preparing our infrastructure or our built environment and it’s not about bouncing back to the way things used to be. For us, resilience will be about understanding the risks and challenges we face and developing ways to adapt and co-create a new normal. The strength of our resilience lies in us, not just as individuals, but as communities and whānau.

The [gview file=”http://greaterchristchurch.org.nz/assets/Documents/greaterchristchurch/Resilient/Resilient-Greater-Christchurch-Plan.pdf”] [PDF 8.8MB] enables us as city and district leaders to work together to enable and empower our communities to face the future with confidence. As a group of leaders we were already working together before the earthquakes struck.

The Urban Development Strategy (UDS) has as its vision:

By the year 2041, Greater Christchurch has a vibrant inner city, and suburban centres surrounded by thriving rural communities and towns connected by efficient and sustainable infrastructure. There are a wealth of public spaces ranging from bustling inner city streets to expansive open spaces and parks, which embrace natural systems, landscape and heritage.
Innovative businesses are welcome and can thrive supported by a wide range of attractive facilities and opportunities.

Prosperous communities can enjoy a variety of lifestyles in good health and safety, enriched by the diversity of cultures and the beautiful environment of Greater Christchurch.

The vision has not only survived our experience; it has been enhanced. We see this resilience plan as enabling the review of the strategy to occur with a resilience lens and an ongoing commitment from each of us to visible collaborative leadership.

As we shift from recovery to regeneration, we can restate the importance of collaboration; between the city, the districts and the region, Central Government, the Canterbury District Health Board and most importantly with the many and varied communities that make up this special part of New Zealand.”

“Our plan places people at the heart of a Resilient Greater Christchurch.” (Presumably, that is why this document has not been publicised among the affected communities or the general public.)

“Being resilient relies on understanding, preparing, coping and adapting to the threats we face.”
(For example, by ignoring the threat from climate change for decades; by circumventing legislation after the earthquakes to increase the risks for residents; how did the Council understand, prepare, cope and adapt to create the chaos that followed the November 2016 tsunami alert? It did not have, and in all likelihood still does not have, an efficient communication system or tsunami evacuation plan in place; warnings and notifications about the various threats from community groups have been ignored.)

“Chronic stresses for Greater Christchurch include climate change, affordable quality housing, psychosocial well-being and an aging population.”

(According to the plan’s statistics, 43% of housing in the eastern suburbs is in an “as is” condition following the earthquakes. This situation is largely the responsibility of the EQC, the Christchurch City Council and private insurers. Canterbury had a record 83 suicides in the last year, almost certainly due in part to the chronic stresses mentioned, which have been actively added to by the City Council. Many of the most vulnerable victims to chronic stresses are members of our elderly population.)

Brighton beach and the Brighton Peninsula are featured on the cover pages of the Resilience Plan.

These are the areas that have been most shamefully neglected by the Council, where 80% of the most socially deprived in Christchurch live, and where, as mentioned above, “as is” properties now comprise 43% of the housing stock. Complaints, arguments and notifications from the residents of these areas have been consistently ignored, even while the Christchurch City Council was developing this ‘resilience’ plan.)

Resilience is the capacity of individuals, communities, businesses and systems to survive, adapt and grow, no matter what chronic stresses and acute shocks they experience.

(Most of the chronic stresses and acute shocks that Christchurch residents have experienced stem from the incompetence of its elected representatives and their response to the earthquakes.)

P10: “Embracing participatory planning and collaborative decision-making.

Statistics
8000 households permanently displaced by land damage, 90% of residential properties damaged in some way, and 80% of buildings in the CBD have had to be demolished.

1,628,429 m² of roadwork damaged

659 km of sewer pipes

69 km of water mains damaged

Approx. 168,000 dwellings with an insurance claim

1100 buildings in the CBD had to be demolished

Recovery work

Waste water
583 km of pipe (88%) repaired/replaced

73 pump stations (90%) repaired/replaced

98% of total design work is complete

Storm water

59 km of pipe (83%) repaired/replaced

For pump stations (74%) repaired/replaced

93% of total construction is complete

Fresh water

96 km of pipe (98%) repaired/replaced

22 pump stations and reservoirs (81%) repaired/replaced

97% of central city work is complete

Roading

1,300,000 m² of road (94%) repaired/replaced

142 bridges/culverts (99%) repaired/replaced

158 retaining walls (87%) repaired/replaced

94% of the whole SCIRT programme is complete”

(Figures from July 2016)

P16 “Black Map” (An early map showing the many areas of swamp in the city in 1850. This is often used as an argument to ignore the effect of land settlement after the earthquakes?)

P18 “Ground subsidence caused by the recent earthquakes has elevated the severity and frequency of flooding events.” (And nothing has been done to remediate the subsidence or compensate residents pursuant to the Earthquake Commission Act.)

“… in the future it is likely to be coastal flooding, storm surges and inundation that are the greatest threat.” (Threats that Empowered Christchurch has repeatedly pointed out to the council over recent years without any response and action being taken.)

“Housing and social equity

Loss and damage to homes as a result of the 2011 earthquakes drove up rental prices, left people sleeping in garages and cars and contributed to an exodus of people from the region. It took major releases of land and rapid investment in housing over four years to resolve these effects.”
(This ignores the chronic condition of “as is” properties, and the slumification of the eastern suburbs that has been actively promoted by the council. Infrastructure has been removed and not replaced; homes have been built below the Building Act requirement; existing use rights have been granted for insurance rebuilds; council has failed to allocate donations to their specified recipients.)

P36 “Residents want to be involved in the decisions that affect their neighbourhoods and communities….

the shift in focus to regeneration offers an opportunity for a more deliberate and collaborative approach to decision-making.”

(There has been little sign of this happening.)

 P49 “What outcomes do we expect to see?

Vulnerable people are well supported and participate in the community, which helps to decrease feelings of isolation and loneliness.”

(Up to now, it is the primarily the vulnerable members of society who have been targeted in the recovery: those with low incomes, older residents and the socially deprived.)

P51 “What outcomes do we expect to see?

Successful current examples other Activities include:

• Build Back Smarter

(Unfortunately, this initiative was not launched until February 2015 when most rebuilds/repairs had been completed. A total of 1400 homes received an assessment under the scheme, but only 53% made changes.)

“Ko te kai a te Rangatira he korero

Conversation is the food of chiefs”

(This clearly does not apply for the Mayor of Christchurch. Despite an assurance that we would receive a response, Empowered Christchurch is still waiting for a reply to our letter of 14 February 2017.)

P60 ” The challenge is to build more trusting relationships between communities and decision-makers in Greater Christchurch. Central to this is changing the way in which governance engages with people, as all too often their processes rely on rigid and formulaic methods that are set up to be adversarial… Transparent and participatory governance empowers the community.”

(Once again, we have seen no sea change in attitude in this regard. Council has adopted an adversarial attitude towards ratepayers.)

P66 Eastern Vision and its website EVO SPACE

(This is one example of the many pseudo-community consultation schemes that have sprung up since the earthquakes.

When it began in 2014, it was run by a former city councillor and funded by the Canterbury Earthquake Recovery Authority – CERA. The website is extremely basic, with just two pages, one entitled HOME, and one entitled RESOURCES. The Resources page consists of a video, a “doodle map” – a map of eastern Christchurch – for visitors (or perhaps their pre-school children) to draw on (!), and a link to request a workshop, with absolutely no information on what expertise the group possesses or can offer.)

LinC Project
A further example of stage-managed community engagement: this programme has provided training for two batches of 40 and 45 so-called “community leaders”. It is heavily influenced and directed by government and the authorities – 10 of the second batch of 45 candidates “selected” came from government organisations and one of its “facilitators” is now employed by Regenerate Christchurch, the successor to CERA. It appears as if these candidates are being groomed for positions in further pseudo-community organizations with the task of countering the current criticism from community representatives.)

P85 “What outcomes do we expect to see?

Open and transparent engagement with people using understandable information to help them make decisions and balance the consequences of action or inaction in relation to risk management.

(It is inaction in relation to risk management on the part of the authorities, and the city council in particular, that has exacerbated the said risks of flooding, inadequate housing, psychosocial stresses, etc.)

Successful current examples of activities include:

Dudley Creek and Flockton Basin Flood Mitigation Schemes

(Despite implementation of a $48 million drainage project, the Flockton area flooded in the recent rain following Cyclone Cook.)

P88: Risk Transfer
“The New Zealand Earthquake Commission (EQC) scheme underpins the availability of affordable insurance for residential property and assets in New Zealand. … 70% of losses from the major earthquake events of the Canterbury Earthquake Sequence were covered.”

(The EQC is currently depending 199 earthquake litigation cases in the Christchurch High Court. It has been a signal failure in terms of its raison d’être – to protect the people of New Zealand against the effects of natural disasters and cover their losses.)

Risk acceptance is a state of being that influences the level of risk reduction and risk transfer, and ultimately the level of tiredness we are willing to investing and it can change as we use other responses.

(So are residents to be prepared to enter a “state of being” where they accept risks that the authorities have created and actually exacerbated?)

 P89 Securing our future in the eastern parts of Christchurch

6.3 km² red zoned and 7,300 homes purchased by government.

“Securing our future in the eastern parts of Christchurch will require a multi-party collaboration to resolve a range of different issues that include social and economic problems, future risk from climate change, particularly sea level rise, and the reuse of earthquake damaged land, and water management. Our response needs to consider the cost as well as the potential benefits for the community.

(There is no mention of the obligations to deal with the earthquake damage, provide flood protection and to try to undo the mistakes of the past, such as allowing brand new homes to be built 50cm below the Building Act minimum, failing to designate high flood hazard management areas until 97% of insurance claims had been setteled.)

“The future of Eastern Christchurch will be founded upon a clear understanding of the risks that the area faces and from there a participative process can best determine how hazards are managed, new prosperity is built and how existing and new communities are connected.”

(A participative process has been missing over the last six years. The process of endless discussions and engagement with communities purely for PR purposes has not been accompanied by any action on the said issues on the part of the authorities.)

P90 Land elevation map – Eastern Christchurch

(The red line indicates the statistical area of the quoted data. If this refers to the above statistics (and not just those following), the suburbs of South Brighton and Southshore have been excluded!)

Chief Resilience Officer statement
“Specific issues raised during the development of this plan recognized the need to build a more trusting relationship between communities and decision-makers, nurture existing community networks and support systems …

… underpinned by the need for strong and effective leadership.”

(Once again, all of the Council’s actions belie any serious interest in achieving this goal.)

***END

Christchurch High Court Earthquake Litigation List 
As of 30 September 2016

Click for interaction

Figure 1: Breakdown of insurers, claims amounts and areas
 (Interactive version can be viewed by clicking on the image above)

Here is a graphical analysis of the Christchurch High Court earthquake list as at 30 September 2016. Mouse over the insurers in the left-hand section to see how many High Court cases each one is involved in. Clicking on each rectangle activates the pie chart and map information for one insurer.

If you move the mouse over the pie chart in the centre, you can see the total dollar values for residential and commercial claims against the particular insurer. The “highlighted” figure shown is for the area of the chart the mouse is currently in.

In the block diagram showing active and inactive cases at the bottom right, you can grey out either category by clicking on the circle beside the other category (e.g. click on “active” to highlight these cases only, or click on “inactive” to highlight inactive cases). You can see that almost no cases are inactive for the months of 2016.

The map shows the number of High Court cases by location by insurer. So you can immediately see where the main geographic concentrations for the respective insurers are. For example, claimants against Lloyd’s of London (which will be predominantly commercial claims) are almost exclusively in the city centre. For the large rectangles like EQC and IAG, with heavy concentrations throughout the city, if you mouse slowly over each suburb, you can see the number of people in each who have sued the insurer in question in the High Court.

Figure 2: Dollar value of High Court earthquake claims

This graph shows the gradual accumulation of High Court earthquake insurance claims expressed in dollars, starting from the first earthquake in September 2010. The blue columns represent High Court cases that are inactive (i.e. have been discontinued, cash settled, withdrawn, etc., or where a decision has been delivered by the court). The green columns represent active cases that are still to be heard. The red line shows the accumulation of costs for active cases, while the black line shows the accumulation of active and completed cases combined. Note the spikes in the number in July and December 2013, and in August/September 2016 (end of the period of limitation). 25% of claims do not specify a dollar value for the claim. This means that the combined total of $752,685,873 is well short of the full amount that is being claimed. In all probability, the complete figure is over $1,000,000,000. It should also be remembered that these are only claimants who have decided to sue their insurer or EQC. We should not forget low-income and vulnerable claimants, people with mental and physical health problems, the elderly, and those who accepted cash settlements. These are the real victims of the recovery.
While every care has been taken in compiling the statistics, Empowered Christchurch assumes no responsibility for the accuracy of the information.

The EQC leads the field with a total of 107 cases, while 79 of the Southern Response cases have been concluded. This means that government-controlled entities make up 186 (55%) of the total. Almost all of these will be under cap and “repair” cases – an unknown number of land cases are still to come.
Lumley is an IAG subsidiary, which means that the IAG Group accounts for close to one third (105) of the 336 concluded cases. Concluded cases do not actually go to court for one reason or another. They are frequently (cash) settled shortly before High Court proceedings commence, which is when serious legal costs accrue for the insurance companies.

Figure 3: Concluded cases by insurance company and solicitor/barrister – 30 September 2016

Here are the figures for the most proactive solicitors and barristers in High Court litigation. Grant Shand has the lion’s share in both categories, with no competitor in sight for concluded cases. In the active cases category, Jai Moss has a respectable 90, and Andrew Hooker, of Shine Lawyers, 38 cases. The former appears to be the only Christchurch lawyer* with any substantial number of cases, the other two being Auckland-based. It has been suggested that this is because local law firms rely heavily on banks and insurance companies for their bread-and-butter work. [*One Christchurch omission is S P Rennie, of Rhodes & Co., with 26 cases, but we will be updating the statistics as we receive more information.]

Figure 4:  Active cases by insurance company and solicitor/barrister – 30 September 2016

This figure shows the current High Court list of active cases.
Since our focus is on residential claims, companies writing mainly commercial business, such as QBE Insurance (13 cases), have been excluded. As with the statistics for concluded cases, the EQC is the clear leader, with 37% of the total of 402 active cases. The IAG Group (IAG + Lumley) account for 28%. IAG has still to settle approximately 60% of its total court cases (concluded and active), as does its subsidiary, Lumley. Vero, the number 2 in the private insurance market in New Zealand, has slightly more than 60% of its defence cases still to be heard (or cash settled). The EQC’s combined total of 310 High Court cases (to date) leaves it with roughly two thirds of the way to go. Most of the future claims for EQC land damage may be handled by the District Court (<$250,000) rather than the High Court. The smaller players (Tower and AA) have still to defend between 50% and 60% of their respective cases. Overall, therefore, the spread of remaining cases from best to worst is quite narrow, between 53% (Tower) and 66% (EQC).

Are you paying too much for your insurance premiums? This could be one reason.

The New Zealand insurance industry is dominated by two Australian groups, Sydney-based IAG (Insurance Australia Group) and Suncorp Group Limited, a Brisbane-based finance, banking and insurance corporation. IAG bought the AMI business in 2011 after the latter became insolvent, leaving the outstanding earthquake claims to be handled by the government through the new entity, Southern Response.

In December 2013, the IAG Group announced a A$1.845 billion deal to buy the underwriting businesses of Australia’s Wesfarmers, which included Lumley in New Zealand. At this point, IAG already owned NZI (its broker arm), State and AMI (non-quake related business), and was also behind cover provided by ASB, BNZ, and Cooperative Bank, and Warehouse Travel. The Lumley deal increased the group’s share of the overall New Zealand insurance market from 41.5% to around 50.5% and the new acquisition reportedly increased its share of the New Zealand home and motor insurance market from 60% to as much as 66%. In Germany and the USA, the market leader controls only around 10% of the overall market. In addition, since it owned three of the main four banking relationships, IAG was now in a position to ensure that price increases could occur across the majority of the bank channels.

Figure 5: Market shares of IAG plus Suncorp

This section looks at the market share of the second-biggest player.

The Suncorp Group owns Vero Insurance, (known until 2003 as Royal & SunAlliance), which is New Zealand’s second-largest insurer, as well as SIS Insurance, AMP General Insurance, Axiom Insurance and Asteron Life. Vero operates through a large stable of different companies, covering most classes of insurance (commercial, marine, liability, travel and motor, as well as specialist risks) and sells exclusively to the broker market. Vero also holds a 68% share in AA Insurance. After IAG’s purchase of Lumley, however, Suncorp’s total market share of 23.5% of the general insurance market paled into insignificance in comparison with its rival. When taken together, these two groups control just under 75% of the general insurance market in New Zealand. As pointed out earlier, this contrasts dramatically with other insurance markets such as Germany and the USA, where the market leader controls only around 10% of the overall market.

In a submission to the New Zealand Commerce Commission in 2014, Suncorp objected to IAG’s acquisition of Lumley on the grounds that it would seriously decrease competition, particularly in the home and contents market, and also in the motor insurance segment. It pointed out that, at the end of 2013, IAG had settled 51% of its earthquake claims, compared to Lumley’s 70%. Purchasing a better performing rival, it argued, would “decrease the competitive tension on IAG to improve its claims handling record”.

However, despite the virtual cartel situation that resulted, the Commerce Commission gave the OK for the Lumley purchase by IAG without demur. A press article on the subject led with a picture of a small dog representing the Commerce Commission, the presumed metaphor being the Commission as poodle, with the government’s firm hand on the leash.

Figure 6: IAG share of total

The EQC is, of course, the elephant in the room. With 203 cases before the High Court, and 10,492 remedial claims as at the end of June 2016, the Earthquake Commission, whose stated function when set up in 1993 was “to reduce distress, both in those immediately affected by the disaster, and in the New Zealand economy and society”, appears determined to reduce the distress to the New Zealand economy only. Adopting a similar strategy to IAG, the EQC has given homeowners until the end of October 2016 to decide to either take a cash settlement, or to remain in the organisation’s managed repair queue. The Commission’s series of 6 community information meetings on DoV (diminution of value) payments for “increased liquefaction vulnerability” was abruptly terminated without explanation in mid-October. There are indications that many homeowners will also be suing EQC for its volte face on land remediation, since it paid the full pre-earthquake land value to homeowners affected by the September 2010 earthquake and many homeowners now face much more serious land damage, for which they are scarcely being compensated.

Southern Response’s efforts to reduce its claims payments also seem likely to be the subject of litigation for quite some time. Southern Response is the defendant in roughly 88 active High Court cases, half of which are with EQC as its co-defendant. So far, it has received two Crown pledges of $500 million, with an additional $250 million dollars approved. Its figure for payouts and operating costs is $2.28bn, with the gross cost of claims estimated at $2.904bn. This contrasts sharply with the forecast Crown support figure of $1.132bn.

Of the smaller insurance companies involved in the High Court litigation, the most noteworthy is Tower, a New Zealand insurer that claimed to have 10.5% of the house insurance market at the end of 2013. However, the company had a disproportionately large share of over cap claims transferred to it by the EQC (11,070 claims or approx. 35%). And with 45 or so active High Court cases, it accounts for roughly 11% of the total. Tower’s share price has been falling for much of this year and according to press reports, it is expected to face a $75m bill, as its reinsurance cover for the February 2011 event has already run out.

Source and more information: https://www.lawsociety.org.nz/law-library/news-archive/high-court-earthquake-list-case-summaries

Disclaimer: This information here has been compiled to the best of our knowledge for informational purposes only from publicly available sources, including the lists published by the Courts. Empowered Christchurch assumes no responsibility for the use of, or the accuracy of, the information.

Incorporated

Empowered Christchurch has been extremely active since the protest rally on 21 February 2016. Following on from the submission made to the Local Government and Environment Committee on the Regenerate Christchurch Bill back in December 2015, further submissions were made on the Replacement Christchurch District Plan at the end of February this year. A hearing panel of judges listened to submissions from community groups and individuals. One of the chapters covered was on coastal environment and the other on natural hazards. On 3 March, based on the evidence provided, the independent hearings panel asked the council to provide supplementary information on 1) sea level rise, 2) flood ponding management areas, and 3) permitted activities in rural areas. Most of this was duly submitted on 21 March 2016. However, on 20 April 2016, Council requested an extension for providing evidence on further high flood hazard modeling to Friday, 20 May 2016. The extension was granted the next day.

Submission

The earthquakes and their aftermath have hit the eastern suburbs hardest, so we feel that it is essential to have relevant community representatives’ involvement in the transition process to “Regenerate Christchurch”. Many members of our community face serious day-to-day challenges, such as substandard living conditions and uncertainty about the future of their homes. Many of the services and infrastructure in the area have disappeared or been withdrawn, and for “Regenerate Christchurch” to be successful, resident input is vital. We therefore hope that the Empowered Christchurch can look forward to productive cooperation between central and local authority bodies, on the one hand, and tax- and ratepayers on the other, over the coming years.

The Christchurch recovery is now at a crossroads, where we need to look for a way forward and reach some difficult decisions. We also need to look back, since although the past cannot be changed we can all learn from it. In hindsight, it is clear that some decisions taken over the last five years could have been better. We need to make sustainable decisions at this juncture, so that generations to come can learn from our mistakes. Let us remember that our city of the future will be their city of the present.

Context and background
It is important to look in detail at how the recovery has been handled.

We have been dissatisfied with the manner in which communication has been handled by the recovery authorities and also with the provision of and access to information.

We feel that genuine community representation is lacking to a large extent: agencies are dependent for funding on local bodies, territorial authorities and even in some cases insurance companies. As a community group, we have frequently been stonewalled when asking questions or raising concerns.

The missing stakeholder
A series of decisions have been made over the recovery up to now where “all the stakeholders” are consulted but one. The stakeholder excluded from almost every decision has been the homeowner.

If political planning is prepared to sacrifice sustainability in the interest of short-term cost savings, the consequences can be devastating for the people affected. Our main concern is that people who were fully insured may end up homeless, facing a lifetime of poverty after 2-3 political cycles.

CERA made zoning decisions based on the assumption that individual solutions were available. In fact, individual solutions are not available in some coastal areas. The temporary stop banks in along the coastal areas are rapidly eroding. Some properties have been left below high tide mark on land that has a limited future life. The New Zealand Insurance Council has stated that they would like hazard notices attached to all properties with risks, so that people know exactly what they are buying. Certain coastal areas of land have been identified as high hazard and may disappear as the result of erosion within the next 50 years. The likelihood is that properties on such land will quickly become uninsurable in the years to come, and will not be accepted as security for a mortgage.

Unlike insurance companies, banks are not risk takers and will foreclose on any mortgaged property that loses its insurance cover once hazards have been identified.
The potential scenario residents face was highlighted recently on Radio NZ, when Westpac gave farmers in Northland 30 days’ notice to refinance, with the alternative of foreclosure on their farms.

The 6.2 earthquake under the eastern suburbs on 23 December 2011, after which Lianne Dalziel, Bob Parker, John Key and Roger Sutton all indicated that new zoning decisions might be made, now appears to have been a mysterious event, since the ground shaking measurements for this earthquake have disappeared.

This is one example of the lack of open and accurate communication from the authorities referred to above. There is also a reason to point out the New Brighton Earthquake that struck in 1869.

Seismic risk
One thing we can learn from the past is that seismic risk in Canterbury had been underestimated before the earthquakes struck. This is confirmed in a report for EQC in 1991. It is also the conclusion of the Royal Commission in the CTV report. A number of recommendations have been made but not followed. For example, neither the AS/NZS 1170.5 standard nor the New Zealand Geotechnical Society guidelines have been updated. Yet another recovery instrument is the Earthquake Prone Building Act, which is still to be passed by Parliament. As the emergency response part of the recovery is now behind us, we need to ensure sustainability for what lies ahead.

Risk acceptance
It is the role of insurance companies, the EQC included, to accept the risks covered under their terms of reference/policies and compensate policyholders when such risks eventuate. However, many policyholders in Christchurch have not been compensated for the damage to their homes and lives. These responsibilities need to be faced by the entities responsible. An equitable solution needs to be found for properties with hazards such as flooding that are a direct result of the earthquakes. In tandem with this, every effort must be made to protect residents from the risks posed by climate change.

Future insurability
Recommendations to the Department of the Prime Minister and Cabinet (DPMC) from ICNZ include taking a long-view – and requiring local authorities to deny consent applications where a long-term perspective risks from natural hazards will increase. It also recommended the issue of hazard notices for all properties affected.
We welcome the long-view but we are concerned that due to the increased risk caused by the earthquakes, future insurance cover will not be available. When the District Plan is made operative the hazards will finally be mapped. Despite the fact that hazards have still not been mapped, we have examples of insurance cover being withdrawn, offered on a monthly basis, and fire insurance being refused.

In an article in the New Zealand Herald of 5 November 2014, the CEO of IAG refers to cooperation with the NZ Government on a strategic intent in 2011 to avoid depopulation of Christchurch. Now that the ICNZ has signalled its intention to withdraw from high-risk areas and the CCC also plans to redefine the boundaries of the city so as to exclude properties below the Mean High Water Springs. We ask whether a “recovery” involves abandoning people once the insurance and bank sectors have managed a retreat.
The EQC does not cover flooding events, which will represent the largest uninsured risk exposure for those Christchurch residents in the future.

Homeowners have not had a fair representation in this recovery.

The declaratory judgment was a one-sided decision, and in the middle of the proceedings CCC took the side of the EQC. The concerns of the community were not addressed in that judgement. EQC stated that it had not paid for subsidence of land before. In fact, EQC made compensation payments for subsidence after the Waihi ground subsidence in 2001.
EQC and CCC reached an agreement to evaluate area-wide solutions for the Avon Estuary, knowing that the current solutions (temporary stop banks) would not suffice. The solution, which is currently being evaluated, is tidal barriers. This solution was previously rejected by the Ministry of the Environment in 2007, and identified as posing the risk of an ecological disaster. This has been done without consultation with the affected people. Meanwhile insurance companies have been settling insurance claims when it is known that the land has a very limited future. The EQC has still not communicated the known land damage to homeowners.

NZCPS (New Zealand Coastal Policy Statement)
CERA did not consider the NZCPS when they conducted their planning/zoning.
Likewise, the statutory obligations of planning for coastal risk were not considered.

Access to information
Homeowners have been denied access to land information on the basis that the information is commercially sensitive. In fact, they have been presented with out-dated information that excludes over 100 earthquakes. These facts have been brought to the attention of CanCERN, EQC, MBIE and Council. There is still no explanation for why these documents have not been updated and are still being presented as current. The EQC stage 3 land report dates the last earthquake as occurring in June 2011. Yet we experienced over 100 earthquakes of magnitude 4-6.2 after that, most of which struck under the eastern suburbs.

CERA, Briefing to the incoming minister
The CERA Briefing to the incoming Minister, October 2014, states the following:

“As reconstruction continues over the next 10 years, a greater focus on developing and realising the vision for greater Christchurch is needed to ensure that long-term recovery is self-sustaining.”

“The eastern suburbs of Christchurch city, which suffered the greatest housing and land damage in the earthquakes, are now experiencing greater rebuild and insurance complexities. The residents of these areas, many of whom have pre-existing vulnerabilities such as low incomes and/or a disability, are experiencing a more challenging recovery than those in other areas of greater Christchurch.

Other issues may complicate claim resolution, such as where owners have cash settled and will therefore have to manage potentially complex rebuilds or repairs themselves in a period of cost inflation. Under-insurance and/or deferred maintenance may mean some owners face funding shortfalls and need to make additional contributions to complete rebuild or repair. Helping owners understand their insurance policies, rights and obligations relating to property ownership and technical aspects of their repair or rebuild is the preferred approach to resolving claims and reaching flexible solutions that meet the individual needs of the parties. CERA will therefore continue to support owners to facilitate faster resolution of insurance claims through supporting the Residential Advisory Service to provide independent information, technical advice and facilitation.”

The residents in the Eastern suburbs were no less insured than anyone else in the city. In fact it has been identified that there was more underinsurance in the western part of the city.

Indemnity/accountability
Indemnity insurance is a priority for the recovery authorities. The only problem is that with full indemnity cover there is no accountability.

Without accountability unsustainable practices can take place.

CERA Community Forum
The CERA community forum is one of the administrative structures whereby the Minister is expected to receive input from the community.
However, our experience is that when serious matters are brought to the table of this organization, they are brushed aside or deferred. The minutes from the forum were not published until an OIA request was lodged six months later. The issues brought up were written off as a misunderstanding. The concerns pointed out to the forum are reflected in the results of a recent MBIE inspection of 14 properties, where 13 of them failed.
The root of this problem was presented to the CERA forum in June 2013.
Large sections of the minutes of the forum have been blanked out, which does not instil confidence. In short, we do not see that the forum is serving its intended purpose.

Written Comments

1. Do you have any views on the powers and provisions that will be needed in the new legislation to support regeneration?

Future insurance is a crucial element for the residents of Christchurch. As current legislation stands, large parts of the coastal areas in Christchurch face a future without any insurance cover or mortgages. The legislation powers should be used to enforce minimal low-cost insurance availability. If that cannot be achieved, rezoning needs to be considered.
The EQC does not provide cover for flooding unless it is caused by another disaster. It may also decline cover for a hazard that already attaches to a property (Section 72 notification). In turn, insurance companies may reject a claim for hazard damage that has already been rejected by the EQC. This leaves property owners totally exposed to natural hazard risks.
A recovery that leaves fully insured people in this position cannot be considered a successful recovery. Legislative powers need to focus on sustainability and consider that people’s lives are being planned for. Planning and decision-making that only takes the perspective of a political cycle can be very damaging for the city.
The community will always elect representatives for long-term planning. However, politicians focus on 3-year planning cycles, since they cannot be sure they will be in office after the next election, Council, on the other hand, can take both approaches. The more consultation there is between the Council and community leaders the better the balance will be between short- and long-term approaches to issues.
Legislation should not be allowed to delay sustainability simply in order to reduce costs. Christchurch hazards have been mapped by both ECan and CCC. According to the RMA 86(B) (3)(a), any notified hazard relating to water in coastal areas must be implemented upon notification, including the increase in the finished floor level (FFL) to 12.3 m above the Christchurch City datum.
Council has informed homeowners that the hazard maps have not become operative because the district plan was passed by an Order in Council. As a result of this, residents have been denied sustainable planning and left at risk. It appears in this case that the legislation is obstructing sustainability, and any future legislation needs to consider this danger.
We suggest that homeowners be provided with financial subsidies, including legal assistance. We propose the independent election of 5 individuals by the communities who would have the role of assisting with negotiations, submissions on laws, bylaws, plans and other instruments of the recovery.
We agree with the CCC that any powers retained under section 27 should be exercised only at the request, and for the benefit, of affected local authorities, for a purpose that complies with the new Act.

2. Do you think that the proposed new arrangements for the central city will create the ‘step-change’ needed to drive business confidence and investment in the central city?

We fully support the idea of a Christchurch City Council-led recovery approach, with the Crown in a role of close cooperation. With the active engagement of community leaders, we believe this is the best solution, and the only way to restore the trust required to re-unite the city and move it forward. We cannot change the past but we can plan for a better future. Community engagement, sustainability and transparency are key components for success. Without these, there is the potential for the city to fragment and for serious conflicts to develop.
The “too-hard basket” is overflowing and needs to be dealt with to avoid public unrest.

We believe many aspects, such as a one-stop shop for resource consents and building consents, would help simplify processes.

The long-running disputes over insurance claims must be resolved, and homeowners’ rights honoured. After nearly five years, a duty of care is owed to those affected and still suffering.

One-sided arguments at the expense of the homeowner must stop.

We are extremely concerned about the potential for “regulatory capture”. This concern also extends to the well-funded central and local government training of selected “leaders in the community”, and to other agencies such as RAS, which are mainly funded by the insurance industry. In far too many cases, there has been an absence of open and transparent communication. Independent and unbiased actions in the interests of the communities affected are required from all such bodies and entities.
Neither South Brighton Residents’ Association nor Empowered Christchurch has a representative in this selected leaders group.

5.5
We are in favour of CCC endeavouring to attract private investors with the support of central government. We suggest that successful businesses in Christchurch should also be given an opportunity for input here, or encouraged to open up their networks. Investment by supporting industries could strengthen local successes. The business connections are already in place.

3. Are there any other changes needed to build confidence and encourage investment in the central city rebuild?

If the intention is to attract foreign investment to the city, added facilities are needed. For example, there is a serious lack of swimming pools and saunas in Christchurch. This is a fundamental facility in most cultures, Christchurch can excel in this field and utilise the unique greenery and natural attraction of the red zones. We fully support tourist and visitor attractions such as the Eden Project. “Christchurch – unique – green and clean”.

4. What are your views on the proposal for regular monitoring and public reporting on priority areas in order to hold agencies accountable for addressing recovery issues?

Independence on the part of recovery agencies and the honouring of the provisions and specifications in insurance contracts is a vital part of the recovery (cf. regulatory capture risk mentioned above). The briefing to the incoming minister illustrates how these aspects have failed.

In December 2012, CERA published the TC3 Residential Rebuild Booklet.
This is an extract from page17:

“Home owners should note the fact that most insurance policies in place at the time of the earthquakes will cover the cost of building consent requirements to raise finished floor levels to meet standards set in the Building Act.

Insurers will continue to work productively with the Council, EQC and other agencies to provide best outcomes for policyholders.

EQC and Insurers are working to prioritise the claims of vulnerable groups in the community.”

Considering the number of properties still sitting below high tide after the earthquakes, this indicates that something has gone wrong in the recovery and that original principles have been abandoned.

Empowered Christchurch has reached an agreement with Council on a letter that protects the rights of vulnerable people. We suggest that issue of this letter is made mandatory for anyone seeking assistance from the RAS service. http://empoweredchristchurch.co.nz/ccc-notification-email/ 

5. In your opinion, is there a better way to report on these recovery issues?

We believe that, as regards residential recovery, monitoring should extend to code compliance certificates.
According to figures published in 2014, only fractions of repairs/rebuilds are completed with the issue of a code compliance certificate. To conclude the work to the required standard, someone must pay for the code compliance.

Leaving things as they are could have serious negative consequences for the recovery and for the city as a whole. We suggest an investigation of number of outstanding code compliance certificates and that responsible parties are made to address this outstanding work.
We recommend that following this process structural EQC repairs are to be listed on LIM reports and form a final part of the insurance claim settlement with consultation with the homeowner.

Looking at the recovery from the perspective of the eastern suburbs, it is impossible to avoid thinking of a phenomenon referred to as “disaster capitalism” and considering the aspects that have already become evident in the recovery process. Loss of equity and quality of life, risk transfer and other substantial shifts are taking place. We suggest that a regular mini-census should be conducted throughout the remainder of the recovery at intervals of 6-12 months to monitor deprivation, insurance cover (or lack of it), mortgage, home equity, and rental status. If unexpected changes identified, investigation and correction measures should be implemented.

Any other comments: (Also see “context and background”.)
At the beginning of the recovery, the city’s residents trusted blindly in the authorities. People had learned to expect government and the authorities to do the right thing for them and treat them with care and consideration.

Some people of Christchurch have now lost this blind trust, and frustration is building up; it will take significant efforts to reverse this erosion of confidence and stem the build-up of anger. To achieve this, there needs to be access to complete and accurate information, transparency, engagement, sustainability, fairness and care.

Let us remember the much-quoted assurance from the Prime Minister in 2011: “On behalf of the Government, let me be clear that no one will be left to walk this journey alone.
New Zealand will walk this journey with you. We will be there every step of the way.
Christchurch; this is not your test; this is New Zealand’s test.
I promise we will meet this test.”

Empowered Christchurch calls on the authorities to live up to this promise.

After nearly five years of “Emergency Response”, where sustainability has been sacrificed in the interests of speed, we can assume that this phase is now behind us. We see no reason why this period should be extended until April 2016. Lessons must be learned from the past.

It is time to move into the “Restoration Phase”. Once seismic and building standards are corrected, and risks are notified, mapped and accepted, sustainability will be ensured.

We need a city that is driven by the people that live in it, and enabled by a bureaucracy that accepts and mitigates risks, rather than transferring them to the most vulnerable of its residents.

Submission

Contact:
Empowered Christchurch
Hugo Kristinsson,

+64 (0) 3 3535 640

hugo@absolute-proof.com

About Empowered Christchurch.
Empowered Christchurch is an apolitical community group with over 2000 members set up to support victims of the Canterbury earthquakes, to find answers to their questions and to help achieve fair settlements for homeowners.
www.empoweredchristchurch.co.nz

Christchurch, 16 November 2014.

Subject: Concerns of residents in the Eastern suburbs.

Briefing for a meeting with Poto Williams MP. on Monday, 17 November 2014.

Empowered Christchurch is concerned about recently published documents and the media coverage of the land damage in the Eastern suburbs.

On the 5 November an article with the title, “How Christchurch avoided depopulation”, was published in the NZ Herald.

The statements in the article included the following by Jacki Johnson, CEO of IAG.

“But she also told of moves by her sector to curtail any exodus: “We worked with Government and asked what it would take for us to avoid depopulation and Canterbury didn’t have that as much as we saw with Hurricane Katrina in the US. It was a strategic intent in 2011.”

On the 4 November ICNZ published the following recommendation to decision-makers in NZ:

The first statement came from Tim Grafton, CEO of ICNZ.

“Without risk reduction measures, the cost from natural disasters will increase.”

Recommendations from ICNZ include amongst others, to:

• “take the long-view – require local authorities to deny consent applications where taking the long view shows risks from natural hazards will increase.
• high-quality data – establish a high quality, national natural hazard database to inform decision-making such as the cost-benefit trade-offs around risk reduction.
• a hazard risk on every property – ensure there is publicly accessible information on the natural hazard risks every property in New Zealand faces.”

An editorial with the following headline was published in The Press on 11 November 2014:

“Shortcuts on plan a mistake”.

This included such statements as:

“Southern Response, the Government-owned entity that took over AMI’s earthquake liabilities, and Tower Insurance have both complained about council proposals aimed at reducing the risk of flooding in low-lying areas.”….

“Worse than that, some of the greatest damage in the eastern suburbs occurred where a hazard was known but was underestimated and not adequately prepared for. The companies’ idea that they should be allowed to go ahead and rebuild and repair where there may be greater risks suggests they have learnt none of the lessons of the earthquakes.”

In a document published by the Central Otago District Council the following is confirmed by the Earthquake Commission and ICNZ.

“The Earthquake Commission Act 1993 gives the Earthquake Commission discretion to decline, or meet part only of a claim, where the certificate of title for the affected property contains such an entry. Whether the Earthquake Commission will actually decline part or all of a claim on this ground depends in part on the nature of the natural disaster that may occur.

If it is determined by EQC that a claim for natural disaster damage will not be met due to the presence of a Section 73 covenant, then your general insurer will not be able to pay a claim under the top-up cover.”

No such document has been published for Christchurch.

The Briefing to the incoming Minister, October 2014, states the following:

“As reconstruction continues over the next 10 years, a greater focus on developing and realising the vision for greater Christchurch is needed to ensure that long-term recovery is self-sustaining.”

“The eastern suburbs of Christchurch city, which suffered the greatest housing and land damage in the earthquakes, are now experiencing greater rebuild and insurance complexities. The residents of these areas, many of whom have pre-existing vulnerabilities such as low incomes and/or a disability, are experiencing a more challenging recovery than those in other areas of greater Christchurch.

Other issues may complicate claim resolution, such as where owners have cash settled and will therefore have to manage potentially complex rebuilds or repairs themselves in a period of cost inflation. Under-insurance and/or deferred maintenance may mean some owners face funding shortfalls and need to make additional contributions to complete rebuild or repair. Helping owners understand their insurance policies, rights and obligations relating to property ownership and technical aspects of their repair or rebuild is the preferred approach to resolving claims and reaching flexible solutions that meet the individual needs of the parties. CERA will therefore continue to support owners to facilitate faster resolution of insurance claims through supporting the Residential Advisory Service to provide independent information, technical advice and facilitation.”

Further supplementary material provided:

Map generated from information from the Orbit Geotechnical Database.
This shows that South Brighton had some of the most significant lateral spreading in Christchurch.

Elevation map of the lowest lying areas of South Brighton that face the highest risk.
Source: University of Canterbury.

Erosion Risk Map of Christchurch: Map B –C10 Christchurch Map Series.
Source: Environment Canterbury.

Several photographs showing the actual land damage, subsidence caused by lateral spreading. Comparison before and after the earthquakes.
Images show actual subsidence and give estimation of increased relative rise of groundwater and consequential loss of ground bearing.

In conclusion, it appears that recognising the high risks in some of the Eastern suburbs following the earthquakes has been delayed for the purpose of avoiding depopulation.
As identified in the briefing to the incoming minister, the area’s residents frequently have pre-existing vulnerabilities such as low incomes and/or disabilities. Their homes represent their life savings.
It is also clear that many residents have cash settled.

Because of this approach to managing the recovery, vulnerable people have been severely disadvantaged, and according to statements from EQC and ICNZ, are unlikely to be covered by insurance if a natural disaster occurs in the future.
The residents affected were not underinsured.

The risks that have been identified for South Brighton for example are extensive and could all be added on the LIM reports for the affected properties when the district plan is updated.

They include erosion, subsidence, liquefaction, flash flooding, tsunami and flooding.

All these hazards may be excluded from insurance cover for the residents affected in the future.

An insurance contract is a transfer of risk. You purchase an insurance policy, and the insurance company assumes the risk. Policyholders should not be left disadvantaged after a government-managed recovery that involves excluding the main stakeholders and jeopardises their life savings. The decisions taken to avoid depopulation mean that people have been incorrectly led to believe that their land is safe when it is not.

On behalf of Empowered Christchurch we ask that you take our concerns and present our case to parliament.
Contact:
Empowered Christchurch
Hugo Kristinsson,

About Empowered Christchurch.
Empowered Christchurch is an apolitical community group set up to support victims of the Canterbury earthquakes, to find answers to their questions and to help achieve fair settlements for homeowners.
www.empoweredchristchurch.co.nz

Here find our first Newsletter. This is a very useful resource for all insurance claimants. The forces we are up against are incredible. It is a challenge to sort out an insurance claim that involves your life savings. When you also have to face new legislation, outdated standards, MBIE Guides, inappropriate code of conduct the task becomes monstrous. We hope that this Newsletter helps people understand how this recovery is constructed and the pitfalls to be aware of.

[gview file=”http://empoweredchristchurch.co.nz/wp-content/uploads/2014/09/Empowered_Christchurch-issue-1.pdf”]

http://issuu.com/brightsidepublishing/docs/empowered_christchurch_issue_1/1