We are now in the sixth year post-earthquakes. We are told that EQC have reduced their staff significantly, which must mean that there is no longer the pressure of work that there was. (See http://www.stuff.co.nz/the-press/business/the-rebuild/67998762/Contractor-numbers-cut-as-EQC-home-repair-programme-downsizes). However, some investigation reveals that EQC have established the scope data and costed a large number of claims which they could easily have paid out, but have not done so. Many of these costings go back several years, notably, (but not only), land claims. Nor is EQC actually carrying out this outstanding, costed work. If they have cut staff numbers, then it seems a reasonable assumption that they have no intention of actually doing this outstanding work anytime soon.
S29. (4) Earthquake Commission Act 1993 requires: Subject to any regulations made under this Act and without limiting the liability of the Commission under this Act, any payments or expenditure for which the Commission may be liable under this section shall be made as soon as reasonably practicable, and in any event not later than 1 year after the amount of the damage has been duly determined (which determination shall be made as soon as reasonably practicable).
The government ‘removed’ the 1 year requirement, without a whimper from the opposition, but could not remove the ‘reasonably practicable’ requirement.
So, if they have had the costings for some years, yet not paid the claims, nor done the work, EQC is clearly in breach of the Act, as ‘not reasonably practicable’ is clearly not available as an excuse for non-payment after (up to) five and a half years of waiting for payment, for many people. I can find no indication that the Act has been changed in this respect. Looked at another way, can EQC really be that inefficient that they will plead ‘it was not reasonably practicable’ to settle these claims after five years?
Which brings me to the point of this piece – EQC has been the subject of more than 23,000 complaints by the public by mid 2015, has been the subject of rumours of scandal and illegal operation internally, has spawned a huge raft of secondary claims related to repairs incorrectly or poorly carried out and has/is withholding payments which have been quantified and could have been paid. http://www.radionz.co.nz/news/regional/279908/more-than-23,000-eqc-complaints-lodged . Furthermore, after five years of operation, we know little or nothing about the size of the liabilities accrued by EQC and still to be paid, including the value of work which will have to be re-done to a more expensive standard. How many quantified liabilities are in a position to be paid? At what point were they technically able to be paid? Who instructed that they would not be paid? Just how big is the forward liability of EQC? I suspect that the Government only has a ‘surplus’ at the expense of the people that EQC is not paying and plans to continue to not pay.
Anyone who has worked in Government will tell you that all government departments are subject to periodic audit of their operations. Their Ministers are required to ensure that this happens. So why has there been no public audit of the EQC operation for more than five years? Surveyor Adrian Cowie called for audit in 2013 (http://www.stuff.co.nz/the-press/news/christchurch-earthquake-2011/9054065/Surveyor-calls-for-EQC-audit) but was ignored and we can hardly rely on Minister Brownlee’s assurances that ‘it’s all OK and going to plan.’ Going to his plan, maybe, but we know and have plenty of evidence that it has not been, and is still not going well, (despite the Government glossy which tells the world what a great job they did! ). Talk about sick! (See Brookie, R., 2014. Governing the Canterbury Earthquake Recovery, 2010–2011: The debate over institutional design, Part 4, Chapter 20 . p 251- 276 in: Future – Proofing the State: Managing Risks, Responding to Crises and building Resilience Edited by Boston, J., Wanna, J., Lipski, V., Pritchard, J., Australian National University Press).
The people have had enough of the spin – we want to know what has been going on…… If it turns out that EQC has been deliberately withholding payments, then heads need to roll – CEO of EQC, Mr Simpson? (Or is it Mr English, Minister of Finance?).
IT’S TIME TO AUDIT EQC
History shows that governments that get away with malfeasance only get bolder until the people put a stop to it. The very notion that after five years, no-one in opposition has pressed to audit this seriously deficient Commission, is curious in itself. Where’s Labour? Where’s NZ First? (No point in asking ‘where’s National?’) Is the concept of ‘checks and balances’ in our democracy now dead? Or is it that the democracy itself is dead? One would have thought that at least Winston Peters would have had an interest in sorting out the problems at EQC and searching out the facts – after all, his old electorate, Tauranga, is a liquefaction nightmare waiting to happen and despite the proposed changes to the EQC Act (which will mainly give the private insurers exactly what they wanted), Winston’s former electorate would still be faced with the same fiasco that Christchurch continues to endure, unless some serious changes are made to both EQC and the whole business of property insurance in this nation. They can spend $27 million of your and my dollars on a flag referendum that nobody asked for, (or clearly wanted), but will not look closer at a Government Commission that has been spending $9 Billion to date and still spending…. Funny, that. http://www.eqc.govt.nz/canterbury-earthquakes/progress-updates/scorecard
Perhaps the only ray of hope is that if neither the Government nor the opposition will sort out private insurance deficiencies for us, the proposed representative court actions which are quietly forming up in the background will open it all up for examination anyway. The huge MBIE ‘guidelines’ fraud perpetrated on the citizens of Christchurch by the Private Insurers, (including Southern Response), resulted in thousands of claimants receiving unconsented, poorly scoped ,deficient repairs or receiving woefully short-paid cash settlements, and the backlash of the pending representative legal actions in this respect, will hopefully return many millions of dollars to claimants. It’s coming. Even in the case of EQC, it can be argued that the huge number of deficient repairs were not carried out in a ‘reasonably sufficient manner’ as called for by schedule 3 of the Act, s9(1)(a) and that it was a systemic failure brought about by deliberate attempts by EQC, acting on instruction from Government, to save money at the expense of policyholders. The rest of the nation, who have been well insulated by the media from the Christchurch Fiasco and Insurance Aftershock, will be more than interested. From a legal point of view these actions are a no-brainer….. The sooner the better, but in the meantime, let’s thoroughly audit EQC and see some facts, not the spin. Come on Andrew Little – let’s see some action for once. We’ve waited long enough……
Future Proofing Disaster Management and Insurance….