Part 1: Introduction

1.1
In this Part, we discuss:

• the purpose of our audit;
• factors leading to the establishment of the Canterbury Earthquake Recovery Authority;
• the role of the Canterbury Earthquake Recovery Authority;
• what we audited;
• what we did not audit;
• how we carried out our audit; and
• the structure of the report.

The purpose of our audit

1.2
The Canterbury earthquakes of 2010 and 2011 killed 185 people, injured about 5800 people, damaged more than 100,000 homes, destroyed much of Christchurch's central business district (CBD), and badly damaged infrastructure. There have been thousands of aftershocks since.

1.3
Recovery from a disaster as large and significant as the Canterbury earthquakes is a long and complex process. From international experience, we know that it can take more than 20 years for a region to fully recover. In Canterbury, many people are still experiencing ongoing effects of the earthquakes. Many households are still to resolve their insurance claims for damage to their properties. The effect of the disaster on mental health in the community, particularly among young people, is causing concern.

1.4
To lead and co-ordinate the complex task of recovery from the Canterbury earthquakes, the Government established the Canterbury Earthquake Recovery Authority (CERA) in March 2011.

1.5
In April 2016, CERA was disestablished, and its various roles and responsibilities were transferred to other government departments and agencies. Over five years, CERA spent $4 billion on a range of recovery programmes.

1.6
Disaster recovery authorities are not unique internationally, but with no major natural disasters in New Zealand since the 1931 Napier earthquake, the Government and CERA had no national experience or lessons to draw from.

1.7
Since the Canterbury earthquakes, we have published reports on several different aspects of the Canterbury recovery, as well as our annual audits on the public entities that are involved. We decided to review CERA's effectiveness and efficiency to:

• provide an independent and objective account to Parliament and the public; and
• identify lessons to inform the establishment and management of future recovery arrangements set up in response to major disasters.

Setting up the Canterbury Earthquake Recovery Authority

1.8
After the 4 September 2010 earthquake, the Government established the Canterbury Earthquake Recovery Commission (the Commission) under the Canterbury Earthquake Response and Recovery Act 2010.¹ The purpose of the Commission was to provide advice to Ministers on the Orders in Council that might be required to facilitate the response to the earthquake, and on the use of resources for the response to the earthquake. The Commission was to also provide a contact point between central and local government in the management of the response.

1.9
The Government decided after the earthquake on 22 February 2011 that the scale of the recovery effort was beyond the capability of the existing institutions. Drawing from international disaster recovery experience, a decision was made to establish a single authority with specific powers to focus on the recovery from the Canterbury earthquakes.

1.10
In March 2011, CERA was set up as a government department under the State Sector Act 1988. Cabinet considered setting up CERA as a Crown agent. However, Cabinet chose to set CERA as a government department since it allowed a high degree of central control, with a leadership structure that is able to act decisively and quickly, and is closely aligned with the Government's priorities. Figure 1 shows the differences between a Crown agent and a government department.

Figure 1
Summary of the differences between a Crown agent and a government department

1.11
The Commission was disestablished when the Canterbury Earthquake Recovery Act 2011 (the Act) repealed the Canterbury Response and Recovery Act 2010. CERA was the first dedicated recovery agency that New Zealand had established.

The role of the Canterbury Earthquake Recovery Authority

1.12
CERA was set up as a time-limited agency to lead a co-ordinated response to the Canterbury earthquakes. It served the area of "greater Christchurch", which was defined as the districts of Christchurch City Council, Selwyn District Council, Waimakariri District Council, and the adjoining coastal marine area. CERA's role included:

• providing leadership and co-ordination for the recovery effort;
• enabling an effective and timely recovery;
• monitoring the progress of the recovery; and
• administering the Act.

1.13
As well as a strategic leadership role, CERA was responsible for carrying out projects and programmes. It was directly responsible for delivering programmes of significance to the recovery. This included the demolition of dangerous buildings, managing the Crown's offer to buy properties in the residential red zones (Red Zones), and deciding the future status of land in areas severely affected by the earthquakes.

1.14
CERA also co-funded and co-managed the repair and rebuilding of infrastructure with the local authorities and the New Zealand Transport Agency. CERA's other roles included establishing recovery strategies, monitoring the recovery, facilitating commercial investment, and working with other agencies to create and support other programmes such as psychosocial recovery initiatives and managing the Residential Advisory Service.

1.15
There were four different but overlapping phases of the recovery that CERA worked in. Figure 2 shows the main phases and how they overlapped over time. The four phases were:

• Emergency response: the priorities were on saving lives, making buildings safe, and providing shelter. This phase was lengthy in Canterbury because of continuing earthquakes and aftershocks.
• Restoration: involves re-establishing basic services and initial repairs to infrastructure and building.
• Reconstruction: includes planning and carrying out the recovery and long-term development, and helping the community return to psychosocial well-being.
• Regeneration: focuses on long-term strategy and building resilience.

Figure 2
Overlapping recovery phases in Canterbury

Source: Canterbury Earthquake Recovery Authority (2016), Walking the Recovery Tightrope: Learning and insights from CERA, available at eqrecoverylearning.org.

1.16
CERA's role was made more complex by the ongoing nature of the disaster. Between 4 September 2010 and the establishment of CERA on 29 March 2011, there were about 7500 earthquakes and aftershocks in the Canterbury region. There have been over 17,000 aftershocks to date.

1.17
Another complicating factor was the uncertain environment CERA was operating in. The extent and severity of damage caused by the earthquakes and aftershocks was still largely unknown when CERA was established just 35 days after the February 2011 earthquake. To put this in context, there were 21 earthquakes greater than magnitude 5 between 22 February 2011 and CERA's disestablishment in April 2016. All of these had an effect on the flow of the recovery and created delays.

1.18
Although CERA was established to provide leadership for the recovery, it was never intended to manage or deliver Canterbury's recovery alone. CERA had to work closely with its strategic partners and other stakeholders. Its strategic partners were Christchurch City Council, Waimakariri District Council, Selwyn District Council, Environment Canterbury, and Te Rūnanga o Ngāi Tahu.

Canterbury Earthquake Recovery Act 2011

1.19
Parliament passed the Act in April 2011, with an expiry date of April 2016. Although not stated in the Act, it was considered at the time that CERA would cease its role in the Canterbury recovery at the same time the Act expired. The purposes of the Act included:

• providing appropriate measures to ensure that greater Christchurch, the councils, and their communities can respond to, and recover from, the effects of the Canterbury earthquakes;
• enabling community participation in the planning of the recovery of affected communities without impeding a focused, timely, and expedited recovery;
• providing for the Minister and CERA to ensure recovery;
• enabling a focused, timely, and expedited recovery;
• enabling information to be gathered about any land, structure, or infrastructure affected by the Canterbury earthquakes;
• facilitating, co-ordinating, and directing the planning, rebuilding, and recovery of affected communities, including the repair and rebuilding of land, infrastructure, and other property; and
• restoring the social, economic, cultural, and environmental well-being of greater Christchurch communities.

1.20
The Act gave the Minister and the Chief Executive of CERA extensive powers to achieve these purposes. The powers included amending or revoking Resource Management Act documents and city plans (the Minister), closing or restricting access to roads and other areas, and demolishing buildings (the Chief Executive). Further powers could be created by an Order in Council. Under the Act, all draft Orders in Council had to be reviewed by a review panel consisting of four appointed people.

1.21
The Act required the Chief Executive of CERA to prepare an overarching, long-term recovery strategy for the reconstruction, rebuilding, and recovery of greater Christchurch. In May 2012, CERA published the Recovery Strategy for Greater Christchurch. The Act also allowed the Minister to direct entities to establish recovery plans for any aspect of the recovery. These recovery plans had to be consistent with the recovery strategy. Some examples of recovery plans include the Christchurch Central Recovery Plan prepared by CERA, published in July 2012, and the Land Use Recovery Plan prepared by Environment Canterbury, published in December 2013.

1.22
The Act set up a community forum and a cross-party Parliamentary forum. Both forums were established to provide the Minister with information and advice about the operation of the Act. The community forum needed to have at least 20 members and had to meet at least six times a year. The cross-party Parliamentary forum consisted of members of Parliament who lived in or represented a constituency in greater Christchurch.

What we audited

1.23
We looked at the effectiveness and efficiency of CERA in leading and co-ordinating the recovery from the Canterbury earthquakes from when it was established in March 2011 until it was disestablished in April 2016. We examined:

• CERA's effectiveness in achieving its intended outputs and outcomes;
• CERA's efficiency in delivering its intended outputs and outcomes; and
• how CERA compared with other disaster recovery agencies.

1.24
Where relevant, we have drawn on lessons from international recovery agencies. However, we concluded that making direct comparisons between CERA and other disaster recovery agencies was problematic because of the varying nature of the disasters and their recovery, and the different administrative arrangements and functions of other recovery agencies.

What we did not audit

1.25
We did not review:

• policy decisions made by the Minister or CERA about the recovery from the Canterbury earthquakes;
• the performance of other entities involved in the recovery from the Canterbury earthquakes;
• the whole-of-government response to the Canterbury earthquakes; or
• the performance of projects or programmes not led by CERA.

How we carried out our audit

1.26
To carry out our audit, we:

• interviewed former CERA staff, staff and representatives from CERA's stakeholders, and community groups;
• reviewed and analysed relevant documents from CERA, including management reports, briefings to Ministers, and its learning and legacy work;
• reviewed and analysed the reports and information from our annual and performance audits of CERA;
• reviewed and analysed relevant external reports about CERA and other disaster recovery agencies; and
• analysed CERA's financial data and other relevant data.

1.27
We carried out our fieldwork and analysis in mid- to late 2016.

Structure of this report

1.28
In Part 2, we assess how CERA was established and how efficiently it was run.

1.29
In Part 3, we discuss the effectiveness of CERA in its leadership and co-ordination role.

1.30
In Part 4, we discuss how effectively CERA delivered some of the main projects and programmes it was responsible for.

1.31
In Part 5, we discuss what can be learned about the effectiveness of CERA from its performance reporting over five years.

1: The Commission consisted of seven commissioners. The commissioners were the mayors of Christchurch City Council, Selwyn District Council, Waimakariri District Council, and four appointed persons, including one of the Environment Canterbury commissioners.