Part 2: Roles and responsibilities of public entities involved in the recovery

Roles, responsibilities, and funding of public entities after the Canterbury earthquakes.

2.1
In this Part, we first discuss aspects of the Canterbury Earthquake Recovery Act, then describe the roles and responsibilities of:

2.2
Canterbury will take a long time to recover. Most experts predict that it will take at least 10 years for Canterbury to fully recover and be rebuilt. This challenge requires more than just repairing damaged buildings and building new ones. It means rebuilding communities and creating a different Canterbury to the one that was there before the earthquakes.

2.3
The earthquakes have affected nearly all aspects of daily life in Christchurch. Schools, health care, infrastructure, leisure facilities, and many people's homes have all been badly damaged. Because of this, the recovery affects the work of many local and central government entities that are working with the private sector, non-governmental organisations, and communities to rebuild Canterbury.

The Canterbury Earthquake Recovery Act 2011

2.4
In April 2011, the Canterbury Earthquake Recovery Act repealed and replaced the Canterbury Earthquake Response and Recovery Act 2010.

2.5
The purposes of the Canterbury Earthquake Recovery Act are to:

  • provide appropriate measures to ensure that local authorities and communities in greater Christchurch respond to, and recover from, the Canterbury earthquakes;
  • allow a focused and timely recovery;
  • allow communities to help plan their recovery without impeding that focus and timeliness;
  • help the Minister for Canterbury Recovery (the Minister) and CERA to ensure that recovery;
  • make it easier to gather information about land, structures, and infrastructure affected by the Canterbury earthquakes;
  • help co-ordinate and direct planning, rebuilding, and recovery of affected communities, including repairing and rebuilding land, infrastructure, and other property;
  • restore the social, economic, cultural, and environmental well-being of communities in greater Christchurch; and
  • provide enough statutory power for the above purposes.6

2.6
The Canterbury Earthquake Recovery Act is subject to annual review. The first review was in July 2012.

2.7
Figure 1 shows the public entities and other organisations working for Canterbury's recovery, how their work is related, and how complex the public sector's role in the recovery is. The recovery involves private sector organisations, particularly insurance companies and construction companies, and many non-governmental organisations, including Te Rūnanga o Ngāi Tahu, the organisation that services the main South Island Māori tribe's statutory rights. At the centre of Figure 1 are the five tasks central to the recovery that we have used as case studies in this report.

2.8
The complexity of the recovery effort reflects the challenges of the task ahead and can bring opportunities for public entities to find better ways of providing public services. For example, the SSC is identifying innovations that public entities have taken in response to the earthquakes and is considering how some of these can be applied more widely.

2.9
The type of complexity we describe in this report is not unique. The United Nations Development Programme notes:

... the aftermath of a major disaster is frequently characterised by a multiplicity of actors, national and international, promoting and initiating recovery activities. Coordination and information sharing thus become even more essential to avoid duplications and gaps and to optimise the resources available for sustainable recovery.7

2.10
This complexity is typical of most recovery efforts from natural disasters. The challenge for governments and public entities is to manage this complexity effectively. International experience shows that it is important to properly co-ordinate and govern public sector responses to natural disasters. Lack of co-ordination can lead to duplicating effort and gaps in critical areas and confuse people who need support and guidance from public entities.8 With so many public entities working for Canterbury's recovery, this risk needs to be carefully managed.

2.11
In the rest of this Part, we describe the roles and responsibilities of public entities working for Canterbury's recovery and identify and describe the main risks and challenges that they face and must manage.

Figure 1
Relationships between public sector entities, private companies, Ngāi Tahu, and Canterbury earthquake recovery tasks

Figure 1: Relationships between public sector entities, private companies, Ngāi Tahu, and Canterbury earthquake recovery tasks.

The role of the Canterbury Earthquake Recovery Authority

2.12
In March 2011, CERA, a government department, was set up under the State Sector Act 1988 to lead a co-ordinated response to the Canterbury earthquakes.

2.13
The main aspects of CERA's role are:

  • leading the recovery, including overall monitoring of the recovery (see paragraph 5.42);
  • managing the Crown's buying of residential properties in the red zone;
  • leading, through the Christchurch Central Development Unit, the rebuilding of Christchurch's CBD;
  • co-funding and co-managing the repair and rebuilding of infrastructure (with CCC and the NZTA);
  • providing policy advice to the Minister about land zone decisions; and
  • working with insurers to monitor and encourage the timely settling of insurance claims.

2.14
CERA has a strategic leadership role. It is directly responsible for delivering programmes that are significant to the recovery. These include the ongoing demolition of dangerous buildings, managing the Crown's offer to buy properties in the residential red zone, and making decisions about land use in areas that the earthquakes have severely affected.

2.15
CERA has the lead role in co-ordinating the recovery and is responsible for delivering some of the main programmes in the recovery, such as overseeing planning and rebuilding the CBD, managing the residential red zone, and deciding the future status of land affected by the earthquakes.

2.16
The nature and scope of CERA's functions are set out in its Statement of Intent 2012-2016:

Our purpose is clear: to return greater Christchurch as quickly as possible to a prosperous and thriving place in which to work, live and play by leading and partnering with all of the region's communities.9

2.17
The Canterbury Earthquake Recovery Act says that the Minister must arrange for a community forum "to be held for the purpose of providing him or her with information or advice in relation to [the] Act".10 The community forum must have at least 20 members (it has 38) and should meet at least six times a year.

2.18
The Canterbury Earthquake Recovery Act also requires the Minister to set up a cross-party Parliamentary forum to give him information or advice about its operation.11 Members of Parliament whose primary residence is in greater Christchurch and members of Parliament elected to represent constituencies in greater Christchurch must be invited to the forum.

2.19
CERA is a central government agency with a local focus. It has powers to direct the work of many different public entities, and to make decisions that affect the traditional roles and mandates of many public entities. CERA's powers are extensive. They include powers to compulsorily buy land and demolish buildings and to work out future land-use planning.

The Christchurch Central Development Unit

2.20
In April 2012, the Minister announced a new unit within CERA, the Christchurch Central Development Unit (CCDU). CCDU is responsible for delivering the Christchurch Central Recovery Plan (the Recovery Plan)12 and leading the work of public entities to co-ordinate rebuilding the CBD, including working with private investors. CCDU is part of CERA but reports directly to the Minister. Staff from CCDU are preparing an investment strategy to encourage new investment in the CBD.

2.21
CCDU's structure and purpose reflect those of international redevelopment programmes, such as:

  • Solidere – The Lebanese Company for the Development and Reconstruction of Beirut Central District;
  • London Docklands Development Corporation; and
  • Lower Manhattan Development Corporation.

2.22
Setting up a statutory authority or lead agency to co-ordinate recovery from a natural disaster is common practice overseas. In Australia, the Queensland Reconstruction Authority was set up after the flood events and Cyclone Yasi in 2010/11.13 The Victorian Bushfire Reconstruction and Recovery Authority was set up after the bushfires in Victoria in 2009. Both have similar roles and mandates to CERA. In our view, it is important that CERA's leadership use the lessons that these and other recovery authorities have learned.

Risks and challenges for CERA

2.23
Through our discussions with staff at CERA and the many public entities involved in the recovery and with people living in Canterbury, we have identified that the main challenges for CERA were and are:

  • setting up a government department immediately after a national emergency;
  • managing and adapting to multiple and changing roles;
  • working with and through many organisations from different sectors; and
  • ensuring that recovery efforts remain effective after CERA is disestablished (an effective "exit strategy").

Setting up a government department immediately after a national emergency

2.24
CERA was set up weeks after the 22 February 2011 earthquake. At first, it was staffed by people seconded from other government departments, and it was forecast that CERA would have a full staffing complement of 55 full-time equivalents (FTEs). In May 2012, there were 147 FTEs and 112 other personnel on short-term contracts working at CERA.14 CERA employs some directly, others are contractors, and some are seconded from other agencies.

2.25
CERA inherited responsibility from the Civil Defence Controller for the cordon and the work to demolish CBD buildings and make the CBD safe. CERA took responsibility for assessing land damage in residential areas of greater Christchurch and began co-ordinating and preparing a recovery strategy.

2.26
In the meantime, CERA had to set up the effective policies, controls, and systems expected of a public entity under the Public Finance Act 1989. It took time to prepare adequate systems and controls, particularly to manage finances and operations.

2.27
During 2011/12, CERA improved its organisational capacity. CERA now has a leadership team of a chief executive and eight general managers. MSD provides many of CERA's "back office" functions, such as information and communications technology, payroll, and finance systems.

Managing and adapting to many changing roles

2.28
Since being set up, CERA has taken on further responsibilities, such as direct responsibility for delivering some of the programmes that are significant to the recovery. These include managing the Crown's offer to buy insured properties in the red zone (along with managing the acquired properties and submitting insurance claims) and a direct role in engaging with communities and community welfare. With the setting up of CCDU, CERA is responsible for leading the rebuilding of the CBD, including working with potential investors and developers. CERA also has responsibility for monitoring the recovery's overall progress.

2.29
This wide-ranging role means that CERA's leaders must balance operational roles in some aspects of the recovery with leading and helping the work of other public entities. In our view, a further challenge for CERA is ensuring that it has an effective plan for when it stops operating.

Working with and through many organisations

2.30
CERA cannot manage or deliver Canterbury's recovery alone. The recovery depends on the contributions of many public, private, and non-governmental organisations, and on the communities of greater Christchurch. This is evident in Figure 1.

2.31
The Canterbury Earthquake Recovery Act required CERA to prepare a recovery strategy. In May 2012, CERA published the Recovery Strategy for Greater Christchurch (the Recovery Strategy).15 The Recovery Strategy is meant to be used to help co-ordinate and integrate the many organisations involved in the recovery.

2.32
Under the Canterbury Earthquake Recovery Act, the Recovery Strategy has legal status and the power to amend other planning documents and instruments. The Recovery Strategy provides a framework for public entities to work with the private sector (including insurance companies), community organisations, iwi, and non-governmental organisations. It identifies six recovery components. Each component has goals and work programmes, with community well-being at the centre. These components are:

  • leadership and integration;
  • economic recovery;
  • social recovery;
  • cultural recovery;
  • built environment; and
  • natural environment.

2.33
CERA has five strategic partners – CCC, Waimakariri District Council, Selwyn District Council, Environment Canterbury, and Te Rūnanga o Ngāi Tahu. To deliver the Recovery Strategy, CERA engages with organisations from six sectors:

  • other government departments and agencies;
  • local and regional authorities;
  • private sector investors;
  • insurers;
  • non-governmental organisations; and
  • communities.

2.34
Managing interdependencies and conflicting priorities is an important challenge for CERA.

Working with other government departments and public entities

2.35
CERA has an important leadership and co-ordination role for the rest of government. As a government department based in Canterbury, CERA must influence and provide strategic direction to other public entities so that they make an effective contribution to the recovery through their normal work. For an effective recovery, public entities need to be well co-ordinated and work in line with and be operationally integrated with the Recovery Strategy. To this end, CERA must effectively bring together agencies and ensure that their work is mutually supportive and in line with the Recovery Strategy.

2.36
The further responsibilities that CERA has taken on have meant that its responsibilities and those of other public entities – especially about which should take the lead in preparing certain policies – have not always been distinguished clearly enough. This has been evident where CERA carries out work that government departments normally do or where the recovery has brought unprecedented challenges, such as in working out housing policies.

2.37
In our view, if there is a risk of confusion about roles, CERA and the organisations it works with should agree and formalise which agency is responsible and will be accountable for what. In some situations, a memorandum of understanding might be appropriate.

How CERA works with local authorities

2.38
CERA is unusual in being a government department with a completely local focus. The Canterbury Earthquake Recovery Act allows CERA to oversee and help make decisions that are usually the preserve of local authorities. CERA works closely with strategic partners CCC, Waimakariri District Council, Selwyn District Council, and Environment Canterbury to:

  • plan policy to release land for housing, infrastructure repairs, and rebuilding;
  • prepare a regional approach to recovery planning and strategy; and
  • keep Cantabrians informed about the recovery.

2.39
It is important that CERA and local authorities have strong operational relationships, particularly because local authorities will be important to the longer-term recovery of greater Christchurch when CERA is wound up.

2.40
International examples of recovery efforts from natural disasters show the important role that local authorities can play in the recovery effort, particularly during the longer term and especially after the disestablishment of recovery authorities. For example, the Queensland Reconstruction Authority has supported local councils in pursuing their local recovery agenda under the framework of broader reconstruction policy. The World Bank has reported that this approach "does not only build the ownership of the local councils and their constituents, but it will also empower them to undertake future planning and investment decisions that incorporate resilience".16

2.41
Through CERA, central and local government are working together in new ways. For example, CCDU has led the design of the Recovery Plan for rebuilding the central city. The Recovery Plan, based on CCC's Central City Plan, identifies an overall vision for the city and 14 main projects for the city centre, including a new convention centre and stadium. CCC is likely to become responsible for managing these new assets.

2.42
Inevitably, disagreements about decisions and policies will arise. Managing these tensions is a challenging task. In our view, effectively addressing tensions between CERA and local authorities when they arise should be a priority for the leaders of these organisations.

CERA and the private sector

2.43
CERA is the government department with most responsibility for working with private sector investors to encourage investment, particularly in the new Christchurch CBD. CCDU has identified that it needs to work with private investors in the recovery of Christchurch city centre, and it has set up a special team to work with potential investors.

CERA and insurers

2.44
As described in the Recovery Strategy, "Timely settlement of insurance claims and the ability of households, businesses and government agencies to obtain insurance cover in [the] future are important factors in the recovery process."17 CERA staff are working with insurance companies to monitor and encourage timely settlements and help to create good conditions for the insurance market in greater Christchurch.

2.45
As a result of the Crown's offer to buy properties in the residential red zone, CERA is responsible for managing insurance claims for more than 7000 properties. CERA staff are working with insurers and EQC on the claims against these properties. Managing these claims effectively will be crucial to recovering some of the Crown's costs in offering to buy properties in the red zone.

2.46
Through our annual audit work, we will look at CERA's systems, processes, and controls for making insurance claims and for managing the land in the red zone.

CERA and non-governmental organisations

2.47
The earthquakes have severely affected the lives of many of the people of greater Christchurch. Many people are living in damaged homes, and severe damage has physically divided and displaced some communities. Others are uncertain about their future. CERA is the main agency responsible for telling affected communities about the outcomes of decisions about future land policy. It has the most responsibility for ensuring that the people of greater Christchurch are involved in designing the recovery.

2.48
International comparisons show that the non-government sector plays an important role in helping communities to be resilient and bounce back from natural disasters. Public entities and reconstruction authorities can often best engage with communities through non-governmental organisations. The World Bank describes the importance of involving communities:

Reconstruction begins at the community level. A good reconstruction strategy engages communities and helps people work together to rebuild their housing, their lives, and their livelihoods.18

2.49
CERA works with charities and community groups to engage the communities of greater Christchurch with the recovery. These range from large international organisations, such as the Red Cross, to smaller and local voluntary organisations.

The importance of an effective exit strategy

2.50
The setting up of CERA was linked to the Canterbury Earthquake Recovery Act. The Canterbury Earthquake Recovery Act will expire in April 2016 and the current plans are for CERA to stop operating in April 2016.19 Because of this, it is important that there is ownership of the recovery effort throughout the public sector.

The role of Canterbury's local authorities

2.51
The local authorities based closest to the largest earthquakes' epicentres are:

  • CCC;
  • Waimakariri District Council;
  • Selwyn District Council; and
  • Environment Canterbury.

2.52
These local authorities are dealing with significant damage to infrastructure, which has hindered the delivery of core services (for example, water supply and waste water collection and disposal). They are also dealing with damage to buildings, including community buildings (for example, libraries and community centres).

2.53
Local authorities were involved in the immediate response through their roles in civil defence and emergency management and through the return of core services to their communities as soon as practicable.

2.54
The main roles of Canterbury's local authorities are:

  • repairing horizontal infrastructure;
  • repairing amenities that they own and operate;
  • planning land use;
  • issuing building and planning consents;
  • supporting the community by providing information, advocacy, and other help;
  • being CERA's Recovery Plan strategic partner; and
  • for CCC, preparing the initial recovery plan for Christchurch's CBD.

2.55
The local authorities are critical to the recovery, largely because they own core infrastructure and community assets that need to be restored or replaced but also through legislation. Under the Canterbury Earthquake Recovery Act, CCC, Environment Canterbury, Waimakariri District Council, and Selwyn District Council are CERA's strategic partners in preparing the Recovery Strategy.

Christchurch City Council

Recovery Plan for the central business district

2.56
Section 17 of the Canterbury Earthquake Recovery Act specifies that CCC must consult with affected communities to prepare a recovery plan for the CBD within nine months of the Canterbury Earthquake Recovery Act coming into force. CERA, Environment Canterbury, and Te R nanga o Ngāi Tahu must have the opportunity to provide input into the recovery plan for the Christchurch CBD.

2.57
CCC prepared a recovery plan for the CBD and, in December 2011, gave this to the Minister to consider. In April 2012, CCDU became responsible for the design of the Recovery Plan, which was released on 30 July 2012. The Recovery Plan is a statutory document that directs the CCC to change its District Plan to ensure that the objectives of the Recovery Plan are met.20

Rebuilding infrastructure and other assets

2.58
The earthquakes caused significant damage to infrastructure that CCC owns. This included damage to roads and water systems, as well as to many of the leisure and sports facilities that CCC manages. CCC is responsible for restoring this infrastructure to the community and has prepared a facilities rebuilding plan to provide a framework for deciding what work those damaged facilities require.

2.59
CCC still requires a lot of resources, time, and money to assess completely the damage to, and repair needed for, the infrastructure and facilities. In its 2012/13 annual plan, CCC estimated the net cost to repair infrastructure at $1.9 billion.21 With insurance and other government recoveries, the total cost to CCC is forecast to be $504 million.22

2.60
CCC facilities (such as libraries, and arts and sports facilities), parks, and stormwater systems are expected to cost $890 million to fix.23 The cost to CCC after insurance and other recoveries is forecast at $292 million.24 These forecasts are likely to change when CCC considers the implications of the Recovery Plan.

Regulatory consents and planning

2.61
The earthquakes have affected many of CCC's business-as-usual functions, such as its responsibilities for land-use planning, building consents, and resource consent applications. Orders in Council, through the Canterbury Earthquake Recovery Act, excluded CCC from having to perform certain functions and reduced the burden of some regulatory processes.

2.62
CCC has taken steps to manage regulatory tasks better. For example, processes under the Resource Management Act 1991 have been streamlined for businesses and householders relocating to temporary accommodation and CCC is employing more staff to help manage the anticipated increase in the number of building consents when the rebuilding phase gains momentum.

Waimakariri District Council

2.63
Waimakariri District Council is responsible for repairing significant damage to infrastructure and community assets.

2.64
In its 2012-22 long-term plan, Waimakariri District Council estimated the cost to repair infrastructure at $46 million. Taking into consideration insurance and other government recoveries, the total cost to Waimakariri District Council for the repair of infrastructure is forecast to be $7 million.25

2.65
Waimakariri District Council facilities and parks are expected to cost $26 million to fix. The gross cost to Waimakariri District Council (after insurance and other recoveries) is forecast to be $18 million.26 Waimakariri District Council faces the same pressures as CCC in land-use planning, building consents, and resource consents. Waimakariri District Council will have other earthquake-related costs of $4 million after insurance and other recoveries.

2.66
Recently, Waimakariri has grown consistently quickly. In the next 10 years, Waimakariri district is forecast to experience medium-to-high growth. Although estimates of future growth have become less certain, it is expected that much of the growth will be from people moving out of Christchurch and from the influx of workers needed to support the rebuild. Waimakariri District Council reports that the district's infrastructure is well placed to cope with the immediate growth.

Selwyn District Council

2.67
The earthquakes did not affect Selwyn District Council's assets as significantly as those in Christchurch and Waimakariri. However, Selwyn District Council has faced disruption and will need to spend to repair services.

2.68
Selwyn is growing quickly. As with Waimakariri, growth is likely to include people displaced from their homes by the earthquakes.

Environment Canterbury

2.69
At first, after the earthquake and for some time while CERA was being set up, Environment Canterbury provided staffing resources to CERA.

2.70
Environment Canterbury is the lead agency behind the Greater Christchurch Urban Growth Strategy. Parts of the strategy have been fast-tracked to bring forward available land for new residential areas to replace those that have been zoned red. Environment Canterbury is leading work on the Natural Environment Recovery Strategy on behalf of CERA.

2.71
Under the Resource Management Act, Environment Canterbury is responsible for repairing and maintaining stop banks and processing resource consents for earthworks, discharges to land and water, and disposal of waste and rubble to landfills. Environment Canterbury maintains river management and drainage schemes throughout the region for flood protection purposes. Two schemes next to Christchurch were damaged the Waimakariri scheme which protects the Christchurch, Waimakariri, and Selwyn districts from river flooding and the Halswell Drainage district next to Lake Ellesmere (Te Waihora). Repair costs totalling $6.9 million were funded from reserves.

2.72
Environment Canterbury has responsibility for public passenger transport. The February 2011 earthquake took the central city interchange depot out of service. This was replaced with a temporary facility in early 2012. The loss of the interchange, coupled with the destruction of the central city (which led to businesses moving to the outer suburbs) significantly changed commuter travel patterns, making many routes redundant. The downturn in patronage was significant. In June 2012, usage was 65% of what it was before the earthquakes. Environment Canterbury has designed more suitable routes and revised contracts to provide a public transport service that more closely matches the needs of Canterbury.

2.73
Environment Canterbury is working with CCC and CERA on supporting infrastructure.

Risks and challenges for local authorities

2.74
Because the condition of underground assets is not known in many instances and will not be known until the repair of the assets starts, there is a risk that local authorities' estimates of damage to their assets are too low.

2.75
The earthquakes significantly damaged local authorities' assets and the costs to repair the damage are high. One of the largest risks the Canterbury local authorities face is working out how to fund the repairs. CCC and Waimakariri District Council have borrowed, and will continue to borrow, money to fund the repairs. The debt is forecast to be in line with the councils' respective policies for managing liability.

2.76
Repairing critical infrastructure and community services is significant work. There will have to be strong procurement and project management principles to show that repairs are consistent with what the community needs and using public money efficiently. In 2012/13, we will carry out a performance audit on aspects of procurement for the recovery.

The role of the Earthquake Commission

2.77
EQC is a Crown entity as defined by the Crown Entities Act 2004. EQC's functions are set out in section 5 of the Earthquake Commission Act 1993 and all these functions are relevant to the Canterbury earthquakes. The main objectives of EQC are to:

  • administer the insurance against natural disaster damage provided for under the Earthquake Commission Act (EQC handles residential claims, not commercial claims);
  • help research and educate about matters relevant to natural disaster damage; and
  • manage the Natural Disaster Fund, including arranging reinsurance.

2.78
The nature of the earthquakes, and the Government's response to them, has meant that EQC's workload has increased considerably. Having taken on new functions and with its role changed in a range of ways, EQC:

  • manages more land damage assessments than ever before;
  • oversees the design and supervision of further land remediation work that the Crown funded separately;
  • delivers a winter heating programme; and
  • manages a repair programme for about 100,000 houses.

2.79
The main responsibilities of EQC in the Canterbury recovery are:

  • managing the assessing and processing of residential contents, building, and land claims;
  • overseeing the home repair programme, through a contract with The Fletcher Construction Company Limited (Fletchers);
  • delivering the winter heating programme; and
  • funding Geonet's participation in the Engineering Advisory Group.

2.80
After the earthquakes, EQC's workforce increased substantially from 22 to a peak of 1568 in October 2011. At the end of August 2012, the workforce included:

  • 225 field staff;
  • 562 staff to process claims; and
  • 219 support staff.

2.81
To contain inflation in the cost of repairs and to ensure that the quality of repairs is consistent, EQC decided to deliver the home repair programme through a contract with Fletchers.27

2.82
About one-third of the estimated 100,000 home repairs are under way or have been completed.28 EQC expects that the home repair programme will be completed by December 2015.

Significant risks and challenges for the Earthquake Commission

2.83
Because of the multiple damaging earthquakes, the associated volume of claims, and the unique attributes of the land damage (such as widespread and extreme liquefaction), the duration of the required response by EQC greatly exceeds what it planned for.

2.84
The anticipated shortage of suitably skilled trades people (particularly carpenters, painters, bricklayers, and plasterers) is a significant risk to completing the repair programme throughout Canterbury. The many rebuilding projects throughout Canterbury will mean that insurers, EQC, and private developers are, at some point, likely to compete for labour. EQC is working with insurers and with CERA to prepare plans for dealing with labour shortages.

2.85
The probable large migration of trades people to Canterbury will put pressure on available accommodation. We understand that EQC, alongside insurance and construction companies, is planning to provide additional accommodation to meet this demand.

2.86
On 18 September 2012, the Government announced that the Treasury would lead a review of the Earthquake Commission Act.

2.87
In 2012/13, we will carry out a performance audit on procurement by public entities involved in the recovery. We will look at the managing of the home repair programme that EQC is carrying out with Fletchers.

Costs to the Earthquake Commission

2.88
The total costs of EQC's earthquake liabilities remain uncertain. Actuarial reports have calculated the outstanding claims liability and associated reinsurance recoveries to be about $10.5 billion.29 This means that EQC's claims liabilities, net of reinsurance, exceed its assets. The Crown has confirmed its intention to meet its obligation under section 16 of the Canterbury Earthquake Recovery Act to ensure that the Commission can meet all its liabilities.30 This acts as a Government guarantee and ensures that EQC will be able to meet its obligations, regardless of the circumstances.

The role of the New Zealand Transport Agency

2.89
NZTA has a significant role in rebuilding transport infrastructure. It owns damaged state highway networks in greater Christchurch and invests in local roads.

2.90
NZTA's main responsibilities in the Canterbury recovery are repairing and rebuilding national highways through SCIRT, in partnership with CERA and CCC.

2.91
The full cost to NZTA of repairing the damage to transport infrastructure is being worked out, but it will be about $400 million during the next five or more years. This cost will be met through the National Land Transport Programme and will change NZTA's investment priorities in this region. As mentioned in paragraph 1.15, NZTA has helped CCC and CERA to prepare the SCIRT alliance delivery model to rebuild Christchurch's infrastructure.

The role of the Department of Building and Housing

2.92
The Department of Building and Housing is now part of MBIE.

2.93
MBIE's main responsibilities for building and housing for the Canterbury recovery are:

  • policy advice on housing;
  • publishing revised building standards;
  • testing solutions to land remediation and foundation designs;
  • technical guidance on building in earthquake-prone areas;
  • providing a sector education and training programme to help a quality rebuild;
  • providing the Canterbury Earthquake Temporary Accommodation Service (CETAS), in partnership with MSD; and
  • reporting on the structural performance of buildings in Christchurch.

2.94
Since the earthquakes, MBIE has issued a revised building code for all commercial and residential buildings. It has released guidelines for the design of foundations for buildings on land where the risk of liquefaction is high. These guidelines will affect the way in which houses with foundation damage in TC3 areas will be repaired or rebuilt (see Case Study 4 in Part 5).

2.95
MBIE has responsibility for housing policy in greater Christchurch. In this role, it contributes wide-ranging policy advice to CERA and the local authorities on the main recovery plans and strategies. This advice includes technical and general housing policy advice covering six main matters:

  • how to rebuild in greater Christchurch;
  • housing supply and market response;
  • consenting systems and process – how to build on land in Canterbury;
  • information and monitoring – how to measure rebuilding;
  • the national effects of the Canterbury earthquakes on earthquake-prone buildings; and
  • the Canterbury Earthquakes Royal Commission.

2.96
Figure 2 shows MBIE's work programme and partners for the Canterbury recovery.

Figure 2
The Ministry of Business, Innovation and Employment's work programme and partners for the Canterbury recovery

Matter Work programme Partner agencies
How to rebuild in greater Christchurch Contributing to the recovery strategy and plans for the central business district

Providing urban design guidance

Guidance on foundations for areas prone to earthquake damage (Technical Category 3)		 Christchurch City Council

CERA
Housing supply and market response Considering the implications of the rebuilding for the wider Canterbury housing market

Preparing advice about affordable housing in Canterbury

Temporary housing supply for people whose homes are being repaired

Accommodation for temporary workers		 Christchurch City Council

CERA

Stronger Christchurch Infrastructure Rebuild Team
Consenting systems and process how to build on land in Canterbury Preparing legislation to support the recovery

Contributing to land zoning decisions

Providing technical advice to the repair and rebuilding		 Christchurch City Council

CERA
Information and monitoring how to measure rebuilding Producing a monthly earthquake indicators report

Monitoring the pace of the recovery		 CERA
Earthquake-prone buildings the national effects of the Canterbury earthquakes Engineering assessments of earthquake-prone buildings in Canterbury

Leading the review of earthquake-prone buildings policy		 Christchurch City Council

CERA
Canterbury Earthquakes Royal Commission Preparing evidence for hearings

Drawing up changes to the Building Act 2004, the Building Code, and Building Standards in response to the Commission's findings		 Department of Internal Affairs

Ministry of Civil Defence and Emergency Management

Source: The Department of Building and Housing.

2.97
MBIE has helped CCC to draw up a streamlined consenting strategy. This involved a review of building consent management and organisational structures, including supporting an information technology upgrade, and creating a model for outsourcing consents. MBIE has agreed measures with CCC to measure progress on the consenting strategy. MBIE is investigating the potential for a "risk based" consenting system (specifically for commercial consents) for the peak construction period. MBIE also:

  • administers the Licensed Building Practitioners regime, and has created strategies particular to Canterbury to ensure that there are suitably qualified trades people available to take part in the rebuild; and
  • provides regulatory guidance and advice on the rebuild to insurers, architects and designers, engineers, project management offices and their contractors, and Canterbury local authorities.

Canterbury Earthquake Temporary Accommodation Service

2.98
MBIE works with MSD to provide CETAS. CETAS provides accommodation matching and placing, financial help to home owners (through Temporary Accommodation Assistance), and information and advice through Earthquake Support Co-ordinators. MBIE also manages three temporary villages: Kaiapoi Domain, Linwood Park, and Rawhiti Domain, providing 83 accommodation units.

Risks and challenges for the Ministry of Business, Innovation and Employment

2.99
Figure 2 shows that MBIE has wide-ranging responsibilities for housing. MBIE does a lot of work with many different public, private, and non-government agencies.

2.100
Effective housing policy is essential to successful recovery. In our view, MBIE must work closely with CERA to ensure that housing policy advice to Ministers is consistent and aligned with the Recovery Strategy, the Recovery Plan, and other rebuilding plans.

Funding the Ministry of Business, Innovation and Employment's recovery work in greater Christchurch

2.101
In the 2011 Budget, $12.7 million was appropriated for the former Department of Building and Housing's recovery work in greater Christchurch. The 2012 Budget has appropriations of $11.8 million. Of this, $10 million will be used to fund technical investigations in 2012/13.31

The role of the Ministry of Social Development

2.102
MSD is the lead agency providing welfare and employment support.

2.103
MSD provides CERA with the infrastructure for its finance and information technology functions under a shared service agreement. MSD has provided corporate services staff to CERA to help enhance CERA's organisational capacity.

2.104
MSD's main responsibilities in the Canterbury recovery are:

  • leading the public sector welfare response;
  • managing Earthquake Employment Support (now ended); and
  • overseeing funding to the non-government sector.

2.105
MSD works with MBIE and CERA to provide CETAS (see paragraph 2.98). CETAS has a helpline for people who need advice about housing. It provides money for rent and motel costs to home owners whose homes are uninhabitable and whose insurance cover for temporary housing help has run out. MSD runs a website for this scheme, www.quakeaccommodation.govt.nz.

2.106
MSD and the Inland Revenue Department provided immediate financial support to employers and employees who experienced income loss as a direct result of the Canterbury earthquakes. The Christchurch Earthquake Employment Support Scheme provided a subsidy to companies (up to $3,000 gross to cover six weeks for each employee or $1,800 gross to cover part-time staff for six weeks) and a subsidy for people who were unable to contact their employer or whose place of employment had closed. This subsidy provided $400 net a week for six weeks for full-time employees and $240 net for part-time employees. To the end of June 2011, $202 million was paid out under the Christchurch Earthquake Employment Support Scheme to about 20,000 employers and 50,000 employees.

2.107
MSD and MBIE, through CETAS, co-ordinate the Earthquake Support Co-ordinators, who provide information and put people in touch with the agencies best suited to help with financial, insurance, legal, and health matters.

2.108
MSD has a leading role in the wider public sector response to the welfare and support needs of residents in greater Christchurch, particularly in providing support to people suffering from psychological and social problems. MSD is aware that some families are experiencing particularly challenging circumstances and that other groups, especially the elderly, are vulnerable and will need help and support from welfare organisations.

Funding for the Ministry of Social Development's Canterbury recovery work

2.109
Additional funding as a result of the Canterbury earthquakes in Vote Social Development in the 2012 Budget includes Non-Governmental Organisation Funding and Christchurch Support of $13 million over two years. This funding is provided for:

  • trauma counselling services;
  • co-ordination and case management for families and individuals facing multiple and/or complex issues;
  • capability building and training for volunteer community-level responses; and
  • a contestable critical community-based social services fund.

2.110
There is an expense transfer of $1 million from 2011/12 to 2012/13 for Canterbury Employment Assistance.

The role of the Department of Internal Affairs

2.111
DIA is the lead agency for reducing risk and building community readiness for emergencies.

2.112
DIA's main responsibilities in Canterbury's recovery are:

  • being the lead agency for reducing risk, and building community readiness nationally;
  • overseeing reviews of the civil defence response to the earthquakes;
  • administering the Canterbury Earthquake Appeal Trust; and
  • providing policy advice.

2.113
Through the Ministry of Civil Defence and Emergency Management (MCDEM), DIA has overall responsibility for the Civil Defence and Emergency Management Act 2002 and the Guide to the National Civil Defence Emergency Plan (the Guide), which includes government financial support guidelines.32 MCDEM was the lead agency in responding to the earthquakes, with responsibility for controlling and co-ordinating the response during the state of national emergency, which lasted for 10 weeks.

2.114
MCDEM commissioned an independent review of the response to the earthquakes. DIA also commissioned a review of the Fire Service. MCDEM and DIA will use what has been learned from these reviews to strengthen the strategic framework for civil defence emergency management throughout the country, including the role of the Fire Service and the Police.

2.115
The Civil Defence Emergency Management Plan and section 26 of the Guide provide details on government financial support during and after a civil defence emergency. The Crown, through appropriations administered by DIA, has been liable for 60% of the response costs and the recovery costs for the essential water infrastructure assets (freshwater, stormwater, wastewater, and river management systems). The Crown has accepted liability for all eligible costs from the Canterbury earthquakes. Costs that are not eligible under the Guide are subject to case-by-case decisions by Cabinet before the Crown accepts any liability. In 2012/13, responsibility for managing this liability for recovery was transferred to CERA. The total amount of this provision is being worked out.

2.116
DIA contributes to the longer-term recovery by providing policy advice on local government and administering the Christchurch Earthquake Appeal Trust. To date, more than $100 million has been raised, and $40 million has been allocated. The Canterbury Earthquake Appeal Trust is an independent charity, registered under the Charities Act 2005. The Trust is required to file with the Charities Commission an annual return detailing its financial statements.

2.117
The total cost to the Crown through appropriations administered by DIA for earthquake response and recovery activities in 2010/11 was $155.6 million, including $133 million in Canterbury Local Authorities' Response and Recovery Expenses.33

The roles of the Treasury, the Department of the Prime Minister and Cabinet, and the State Services Commission

The Treasury

2.118
In the immediate aftermath of the earthquakes, the Treasury oversaw policy advice to ensure that it was co-ordinated and that policy included assessing how the earthquakes would affect the Crown's fiscal position. The Treasury also monitors EQC's performance.

2.119
The Treasury provides advice on the implications of policy decisions about the recovery and on insurance, business recovery, and regulations. The Treasury is working with CERA and the CCC on how to share the costs of rebuilding infrastructure between central and local government.

The Department of the Prime Minister and Cabinet

2.120
DPMC had a lead role in co-ordinating the national emergency response in support of the MCDEM. DPMC's Policy Advisory Group and the Cabinet Office supported the setting up of a new Cabinet committee. DPMC supports CERA, mainly through providing staff to CERA.

The State Services Commission

2.121
The SSC is monitoring and assessing case studies to understand and promote innovations emerging from the responses to, and recovery from, the earthquakes and to support their wider use.

2.122
Innovations in delivering public services after the earthquakes include:

  • designing services to centre on people and businesses to eliminate multiple interactions with different agencies and ensure that services are delivered more effectively;
  • working with private and community organisations to tap into the best available capability;
  • public entities co-locating and collaborating to be more efficient; and
  • sharing information and technology to provide better services.

2.123
The SSC is working with CERA and the Canterbury Government Leaders Group to support CERA's Effective Central Government Services work. That includes encouraging agencies to make the most of opportunities for further innovation in greater Christchurch, including trialling options for achieving Better Public Services Results.

2.124
SSC is monitoring and reviewing three main CERA programmes (demolition, horizontal infrastructure, and the red zone), the Greater Christchurch Education Renewal programme, and the Justice Sector Canterbury recovery programme (Emergency services hub).

The roles of the Ministry of Education and the Tertiary Education Commission

2.125
The Ministry of Education is overseeing the rebuilding of damaged schools and colleges, and planning for education in greater Christchurch. After the Government's decisions about future land use, such as in the residential red zone, the demand for schools in greater Christchurch has changed.

2.126
Along with the Tertiary Education Commission, the Ministry has produced a draft Education Renewal Recovery Programme that includes planning for early childhood education, schooling, and tertiary education.34 The Tertiary Education Commission is funding Christchurch tertiary education organisations to deliver more training to help meet the demand for trades people.

The role of the Canterbury District Health Board

2.127
The Canterbury DHB has introduced a transition plan for delivering health services after the earthquakes, which damaged most of the DHB's 200 buildings and badly affected health services throughout Canterbury. Immediately after the earthquake, there were 106 fewer hospital beds,35 635 fewer rest home beds, 15 fewer pharmacies, five fewer general practices, and health organisations without facilities in the CBD.

2.128
The transition plan builds on plans that were in place before the earthquakes, but accepts that changes in demand mean that health services will be delivered differently.

2.129
The Canterbury DHB has worked with CERA and the Red Cross to help identify vulnerable people and has used its access to the Public Health Organisation register and its experience analysing populations to contribute to the Recovery Strategy.

The roles of other public entities

2.130
Other public entities with roles in the recovery include the Commission for Financial Literacy and Retirement Income (formerly the Retirement Commission), the Ministry of Pacific Island Affairs, and Te Puni Kōkiri.

The Commission for Financial Literacy and Retirement Income

2.131
The Commission for Financial Literacy and Retirement Income has set up a financial advice service for owners of residential properties in the red zone. The service provides access to free one-on-one advice from qualified, professional financial advisors.

2.132
The Commission for Financial Literacy and Retirement Income also produced the Red Zone Financial Decision Guide for Residential Red Zone Property Owners. This booklet, funded by the Christchurch Earthquake Appeal Trust, includes information on what owners of residential properties in the red zone should consider when deciding what to do with the Government payment, and where to go for advice.

2.133
The Commission for Financial Literacy and Retirement Income and qualified professional financial advisors provide a free financial advice service for residential red zone property owners.

The Ministry of Pacific Island Affairs

2.134
The earthquakes have badly affected many Pacific people who live in Christchurch's eastern suburbs. The role of the Ministry of Pacific Island Affairs after the earthquakes has been to help Pacific people access services and to work with mainstream agencies to prepare ways to reach Pacific people. Until December 2011, the Ministry ran a one-stop shop in the eastern Christchurch suburb of Aranui for Pacific people to access services and information.

Te Puni Kōkiri

2.135
Te Puni Kōkiri is working with Te Rūnanga o Ngāi Tahu, other Māori leaders, CERA and Government agencies to ensure that iwi and Māori are benefiting from and taking part in planning for and rebuilding Canterbury. This work includes seeking opportunities to support Māori to access further education, training, and employment opportunities, with particular emphasis on partnering with other organisations such as Infratrain and Fletchers. For example, the He Toki 2.0 model builds off work Te Puni Kōkiri did with the He Toki ki te Reka consortium. Through this model, Te Puni Kōkiri is working with He Oranga Pounamu, Hawkins Construction, Te Tapuae o Rehua, the BETA Alliance, the Ministry of Social Development, and the Tertiary Education Commission to support 300 Māori get training and employment.

2.136
Te Puni Kōkiri recognises that many psychosocial issues will affect whānau during the rebuild. Therefore, it supports the Canterbury Earthquake Support Co-ordinators programme by contracting He Oranga Pounamu and its Whānau Ora Collective to support whānau affected by the rebuild. This includes employing 11 Kaitoko Whānau/Whānau Ora Navigators to work directly with whānau to:

  • support them to access broader government and non-government services;
  • ensure that Māori children access quality early childhood and compulsory education programmes;
  • ensure that Māori children's vaccinations are up to date;
  • support them to access quality housing solutions; and
  • where necessary, provide access to quality professional support and advice.

2.137
Access to quality housing solutions will be a major matter for Māori in the immediate future. Te Puni Kōkiri is prioritising this matter by supporting significant Māori housing initiatives such as:

  • new accommodation units at Ngā Hau e Wha Marae;
  • land remediation, kaumātua housing, and insurance support at Rapaki;
  • the rezoning of Māori Reserve MR873 in Rangiora; and
  • unlocking the potential of the Te Kaihanga Development Cooperative.

The roles of other parties

2.138
Other parties involved in the recovery include Te Rūnanga o Ngāi Tahu, Fletchers, Southern Response Earthquake Services Ltd (Southern Response),36 and alliances such as SCIRT.

6: See section 3 of the Canterbury Earthquake Recovery Act 2011.

7: United Nations Development Programme, Bureau for Crisis Prevention and Recovery, Post-Disaster Recovery Guidelines (Version 1), New York, page 5.

8: See United Nations Development Programme, Bureau for Crisis Prevention and Recovery, Post-Disaster Recovery Guidelines (Version 1), New York.

9: Canterbury Earthquake Recovery Authority (2012), Statement of Intent 2012-2016, page 6.

10: Section 6 of the Canterbury Earthquake Recovery Act 2011.

11: Section 7 of the Canterbury Earthquake Recovery Act 2011.

12: See Case Study 2 in Part 5.

13: World Bank (2011), Queensland Recovery and Reconstruction in the Aftermath of the 2010/2011 Flood Events and Cyclone Yasi, Washington.

14" Standard Estimates Questionnaire 2012/13, Vote: Canterbury Earthquake Recovery, page 3.

15: See Recovery Strategy at www.cera.govt.nz.

16: World Bank (2011), Queensland Recovery and Reconstruction in the Aftermath of the 2010/2011 Flood Events and Cyclone Yasi, Washington.

17: Recovery Strategy for Greater Christchurch, page 19.

18: World Bank (2010), Safer Homes, Stronger Communities: A Handbook for Reconstructing after Natural Disasters, page 183, Washington.

19: Canterbury Earthquake Recovery Authority (2012), Statement of Intent 2012-2016.

20: See the Christchurch Central Development Unit website at www.ccdu.govt.nz.

21: Christchurch City Council (2012), Annual Plan 2012-13, page 18.

22: Christchurch City Council (2012), Annual Plan 2012-13, page 18.

23: Christchurch City Council (2012), Annual Plan 2012-13, page 18.

24: Christchurch City Council (2012), Annual Plan 2012-13, page 18.

25: Waimakariri District Council (2012), Ten Year Plan 2012–2022, page 28.

26: Waimakariri District Council (2012), Ten Year Plan 2012–2022, page 28.

27: Earthquake Commission (2011), Briefing to the Incoming Minister, page 18.

28: Earthquake Commission (2011), Briefing to the Incoming Minister, page 19.

29: The Treasury (2012), Budget Economic and Fiscal Update 2012, Wellington, page 108.

30: Earthquake Commission (2011), Annual Report 2010/11, page 29 (see Note 1, Notes to the Financial Statements).

31: See the Treasury's website, www.treasury.govt.nz.

32: See the Guide to the National Civil Defence Emergency Plan at www.civildefence.govt.nz.

33: Department of Internal Affairs (2011), Annual Report 2010/11, page 141.

34: See the Ministry of Education website at www.shapingeducation.minedu.govt.nz.

35: See the Canterbury District Health Board's website at www.cdhb.govt.nz.

36: For more about Southern Response, see paragraph 3.32.

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