Speech: Never Mind the Risk – we can just get the government to do something

Lianne Dalziel  |  Friday, September 7, 2012 - 11:45

7 September 2012,, 9.00am

Keynote address to the New Zealand Society for Risk Management Conference 2012

Never Mind the Risk – we can just get the government to do something

This time two years ago, I was still visiting different parts of my electorate trying to understand what I could see. Liquefaction and lateral spread were not terms I knew but certainly knew what they did to unreinforced concrete slab foundations on the new subdivisions around the wetlands. It was not until the Saturday following the earthquake that an engineer sat down and drew pictures for me.  It was then that I began to understand how little I knew of Christchurch’s seismic exposure and the risk that this posed. I was also introduced to the legislation for the Earthquake Commission and how that would impact on any land that couldn’t be repaired.

I started what I call my journey of discovery.  It didn’t take me long to discover there was a body of knowledge around something called recovery and that took me into the social sciences.  And then there was the February earthquake – the game-changer – but at least this time I understood what needed to be done.

I already knew recovery was a different process from response and that a different style of leadership was required – an engaged, inclusive form of leadership.  I heard people speak of those qualities yesterday. 

My fear of earthquakes has always been firmly located here in Wellington - never did I imagine that the wake-up call would be Christchurch.  For a lot of reasons I am now pleased it was, but only if Wellington and our other exposed cities and towns truly learn the lessons we have learned the hard way.

My introductory comments are simply to describe how little I knew about what is called disaster risk reduction two years ago.  But also to perhaps integrate what I do know about it now into my pre-existing knowledge about risk and where it sits within a quality regulatory impact analysis regime to support good public policy and decision-making.

The title of my address, ‘don’t mind the risk, we can always get the government to do something’ is of course tongue in cheek, but it has a message.  Governments of all colours are called upon to respond in a crisis situation to the demand that “something has to be done”.

This is usually framed in such a way as to imply that the government didn’t do enough to protect people in the first place in light of what occurred.

And politicians are very vulnerable to that.  None of us wants to be the Minister at the time that disaster occurs when there were measures supposedly in place to protect against the very thing that occurred – leaky buildings, a building collapse, a mine explosion, finance company failures, savage dog attacks.

We can think of a myriad of examples from our own recent past where the government has been called upon “to do something”.  I would describe the responses, as I am sure you would, as a mixed bag.  The trouble with doing ‘something’ in the wake of a media frenzy that shocks the nation is the risk that we choose the wrong intervention. Doing ‘something’ to reassure the public becomes the primary objective rather than identifying what needs to be addressed and finding the best way to fix the problem.

I am going to talk about the importance of regulatory impact analysis and why governments should be given time to do that. We need to learn not to ask the government to do anything in the immediate aftermath of a crisis – we must always insist they take the time to analyse what has occurred in order to learn the lessons it offers. For the analysis to be robust, we need to actually understand what has happened, and that cannot be fudged, which is why it has to be taken away from any potential government spin (remember Peter Hughes went against some of his advisers when he went public) and it must be removed from the processes that attribute fault in a legal sense so that people can honestly disclose what they know.

In our hospitals a mortality review provides such an environment.  The Coroner’s Court does that too – I’ve heard it described as a court of understanding.  But there is no mechanism for the recommendations a coroner makes to be placed in a formal sense in front of a government for a response to be made.  A Royal Commission of Inquiry is a much more formal model but can find itself constrained by its terms of reference.

No matter what approach is taken, there will always the public pressure to do something.  And the media does feed this.  A story of forgiveness is nowhere near as sensational as the demand for retribution.

I remember listening to a radio report of the findings of a Coroner on a plane crash and the last thing that was said by the reporter was that the families were going to sue the Civil Aviation Authority. I immediately recalled that the Authority had just been criticised for not granting licences for certain activities because they weren't sure the practices were safe. This said to me that sometimes you cannot win – on the one hand you are a heavy handed regulator stifling opportunity; on the other you are too light handed and it is your fault when things go wrong.

This is why the word courage is actually important in the decision-making process – the courage to wait until the facts are known and the courage to make decisions based on evidence rather than just doing ‘something’.

I am also going to talk about how this all fits with my new role in the field of Disaster Risk Reduction and how important it is that we engage communities in identifying the risks they face and partner with them in all planning around mitigation and response.  The planning process is not as important for the plan it produces, as it is for the relationships between the people it fosters – this is what leads to self-reliance and resilience and it is a take home message for the public and private sector.

But first to Regulatory Impact Analysis – a deliberative process that requires engagement with stakeholders from one end of the process to the other. Together we identify the problem and what needs to be achieved (it’s amazing the number of times this step is overlooked in the rush to be seen to do something), what options could achieve the desired result, what risks and opportunities might exist; what the cost-benefit ratios look like and always asking whether the response is a proportionate one – recognising that the answer to that question may be different depending on the size of a business or some other differentiating factor.

Obviously the process will be more complex than the example I am going to use, but I wanted to use an example where public pressure is disproportionate to the risk that is posed.

The example is Country of Origin Labelling for food. When I was Minister for Food Safety I regularly received requests to introduce Country of Origin Labelling for food.  My answer was ‘go ask the Minister of Consumer Affairs, because Country of Origin Labelling is not a Food Safety issue’.  Food that is sold in New Zealand, whether it is produced here or overseas, has to meet food safety standards.

The right to know where the food comes from is a consumer rights issue.  I prefer to buy New Zealand made clothing to support local industry, so the hangover from tariffs that requires a clothing label to say where it is made makes my job identifying what I want to buy easier. Otherwise I would have to ask the shop assistant, although my experience is that NZ-made clothing would be labelled as such whether or not they had to.  Buy New Zealand Made is a positive brand.

So bearing that in mind let’s see how a regulatory impact analysis would look at Country of Origin Labelling for food.  What’s the problem?  People want to know where the food they are buying is from. What’s the risk? People won’t know where the food they have bought has come from. Some won’t care about this.  It will be a risk they are prepared to assume.

There are two ways to fix the problem.  People can simply asking the retailer for that information.  Or we can have a labelling system that requires that information to be provided.

The problem with packaged food is that it can have many ingredients that come from different source countries and some which have source countries that change on a seasonal basis.  This has led the Australian labelling system, which we opted out of because it was tied up with food safety, to only cover single ingredient or fresh products, and which allows a fruit juice label to say it is made of domestic and imported product. So the one system we would have to join if we decided to go down this track would not be an effective tool.

But let us assume that the two methods achieve roughly the same result.  But is there a difference in cost?  Yes.  When the government requires a labelling system there has to be an enforcement system to monitor the use of labels and to punish those who aren’t complying with the rules. 

And this all costs money and so the producers and the retailers pass on the extra cost to the consumer – the same consumer who could get it for free - just by asking.  “No tell, no buy” is much more effective than a regulatory system that you are going to pay for in increased prices.  Walk into a supermarket today and you will see where your fruit and vegetables come from - proof to me that the best things in life are free.

I presented this to a group recently and they said no-one had ever explained it to them this way.

And that is what bothers me. If we allow the people to think that the government can solve their problems, without explaining where the risks and the cost will fall, how does that help them make rational decisions about what they could do for themselves?

That is an example where an informed consumer can get what they want at no cost to themselves.  We are doing people a disservice when we lead them to believe that the government has to do something for them when they can do it for themselves.

Engaging with people in the regulatory impact analysis process empowers people to understand what they can do for themselves and also where and how the government needs to intervene.

The fact that people did not understand the relationship between risk and return was evident in knowing who lost money in the finance company failures.  But there were issues around behaviour as well – finance companies that deliberately under-priced the rate of return to make themselves look more like banks and which used words like secured to hide the risk to unsophisticated investors who thought they were depositors. The consultation on the Review of Financial Products & Providers engaged with stakeholders but did nothing to inform those most at risk of the risks they faced. A more open process could see regulatory analysis as a public education exercise as well.

Maybe a better process could have prevented what I call the Leaky Buildings Scandal.  It’s not a crisis or a syndrome – it’s a disgrace.  And the government has shifted responsibility after the predictable occurred.  Leaky buildings are to be remediated with half the cost carried by the one person who had nothing to do with the construction of the building or the creation and enforcement of standards – the home owner who bought in good faith trusting that they were protected by professional standards and oversight.

And now how disaster risk reduction links to this.

So what is Disaster Risk Reduction? DRR is the concept and practice of reducing disaster risks through systematic efforts to analyse and reduce the causal factors of disasters. It includes reducing exposure to hazards, lessening vulnerability of people and property, wise management of land and the environment, and improving preparedness for adverse events.

DRR includes disciplines like disaster management, disaster mitigation and disaster preparedness, but is also part of sustainable development. That’s why it involves every part of society, every part of government and every part of the professional and private sector.  That’s also why it requires a long-term view (well beyond electoral cycles), especially when you think about the connections with food and water security, together with climate change adaptation.

It’s not the disaster that’s ‘natural’ – our recent volcanic activity isn’t a disaster.  It’s certainly a natural hazard, as is an earthquake.  The disaster occurs when there is an impact on people. And the less-prepared or resilient the people and their environment for such an event, the greater the disaster risk. 

Hazard x Vulnerability x Exposure

Resilience or coping capacities                              = Disaster Risk

It is worth considering the word resilience in this context as it is often misunderstood. People in Christchurch are sick of being told they are resilient. Stoicism is the Canterbury characteristic for which we are worl-renowned. Resilience to me is an elastic concept, because it is just as much about the ability to bounce back into shape as an individual, an organisation, a community, or any aspect of the natural or built environment, as it is about the capacity to absorb the initial shock.

The more resilient each of the affected environments are - natural, social, built and economic – before a disaster occurs, the more quickly each of those environments will recover.  But no matter how resilient we are there is always much to learn after a disaster has occurred – to better prepare for a future event by embedding resilience in the recovery and also to share that knowledge with others.   When the time is right, Christchurch will need to go through this review process.

I personally believe that the transparency a public process would bring would help heal the divisions that have emerged from an event that has had an uneven impact across our city.  How we are today can depend on where we live/lived at the time of the earthquakes, whether we lost someone close to us; whether we were injured (and the severity of that); what our pre-existing vulnerabilities might have been; how we are coping personally or as a family; the damage that was done to our homes and streets; whether we were insured or not; the decision that the government made about our land; whether we were a ‘winner or loser’ with the red zone offer; where we are at with EQC/our insurer; whether we understand the processes that are going on; whether we have land to rebuild on… the list goes on.

International best practice says that it is vital to involve affected communities during and after the crisis. It may seem slower, but recovery will be faster and better in the long run. Taking advantage of existing strengths and local knowledge can mobilise the power of the community in a way that promotes self-confidence and self-sufficiency. Participation builds community capacity and resilience. Transparency and accountability build trust between communities and governments. Communities become more aware of the nature of the risks they face; it gives opportunities for mitigation measures to be part of the design process; and it helps improve the community’s capacity to respond to disasters in the future. This is Disaster Risk Reduction in action.

This is why any government, central or local, must resist the instinct to take charge and make all the decisions.  Sharing the leadership of the recovery with the community can empower communities at the same time as strengthening the relationship with governments. Community initiatives can inspire the recovery in a particularly meaningful way.   Look at how the community-inspired Avon-Otakaro River Park concept has become the heart and soul of the government’s central city blueprint.

But there is more.

Communities need to be engaged in the process of identifying and understanding the potential impacts of hazards and they should be involved in designing the response.  The question I have been asking of late is this: who would be best people to design an evacuation plan for a coastal settlement – the people who live there and face the risk of drowning if they don’t get to high enough ground in time or an expert from the regional council?

The planning process is what brings people together and builds knowledge and understanding of what the needs are.  That’s the problem with tsunami sirens – they indicate that the problem is solved and that creates a false sense of security.  A hard of hearing person inside his or her house won’t know to get out unless someone is able to let them know they need to leave.  Their neighbours need to have factored this into the evacuation plan, which means they need to know the needs within the neighbourhood. Relationships between people save lives.

If you knew that most people were rescued by neighbours, colleagues and passers-by than by any USAR team (especially one that had to travel to a disaster area) would you spend additional funding maintaining a central highly equipped USAR team ready to fly into an emergency area or would you pay for every taxi driver to have a first aid certificate?

I mention these because we have choices about what we do and how we do them.  It would be useful if we knew the facts.

So returning to the title of my address: ‘don’t mind the risk, we can always get the government to do something’, we must not demand that governments respond do something and governments must suppress the urge to respond when we do. My messages are these and they all require the courage to succeed – don’t rush to respond with a solution in the face of a crisis and trust the people with the facts before you do anything.  Engage the people who face the risk in the analysis and the planning – shared responsibility produces plans but more importantly builds relationships.

An issue I would like to explore more is the need to find an independent mechanism to establish the truth of what has occurred so that lessons can be learned.  I want to end with a story that still bothers me today.

I remember receiving an Open Letter that a man called John Scarry wrote to the Institute of Professional Engineers when I was Minister responsible for the building industry as Minister of Commerce.  We sent it to the Building Industry Authority for analysis, but I could not sleep.  I felt that once I had knowledge that a respected engineer had deep concerns about the way some of our buildings had been built and how the detail had failed to be properly supervised by consenting authorities, I would be held accountable if I failed to act.

I didn’t want blood on my hands if an earthquake in Wellington proved him right.

I mention this because yesterday I woke up to the lawyer assisting the Royal Commission of Inquiry into building failure in Christchurch post our earthquakes reminding the Commission of the evidence that a council building inspector had signed off on a plan he was unhappy with because the company had gone over his head to his boss in the council.  It sent a chill down my spine.

I remember the messages of support for John Scarry’s views that I got from engineers who wanted to remain anonymous because they were fearful of losing contracts.  New Zealand is too small sometimes.  And that is why there has to be a way that an engineer or anyone who knows something that we would want to know before disaster strikes can share that information in a way that protects them from the vilification that I have seen directed to John Scarry.

Sometimes the emperor is not wearing clothes no matter how much spin has weaved a garment that those fearful of telling the truth alone can see.

And that is my final message.