Gordon Campbell: The new rules for Christchurch’s Recovery

Last year, Canterbury Earthquake Recovery Minister Gerry Brownlee was endowed with god-like powers to over-ride existing law by the legislation passed in response to the September quake. At the time, there was widespread concern about the unilateral powers central government had assumed, and the length of time ( until 2012!) they would be allowed to wield them, virtually unopposed. Already, Canterbury residents had good reason to feel sensitive about such matters, given the abolition of its democratically elected Environment Canterbury and its replacement by a panel of central government appointees.

Now, those earthquake recovery powers are being expanded further in every direction and for longer – with Brownlee being empowered to rule Canterbury by decree until 2016. Interestingly, the virtually unlimited powers of land confiscation by officialdom will go hand in hand with limited rights of compensation for the citizens affected. More on that later. After the February 22 quake, the option existed to merely amend last year’s already draconian earthquake recovery legislation. Instead, central government chose to pass a new law that will - among other things - install a new panel of central government appointees to run the process. As the recently issued background papers to the new legislation put it, a new legislative unbrella seemed appropriate : “Due to the significant amount of new material to be included in the Act” it would mean that it resembled new legislation rather than an amended Act; “

The new material? Instead of expiring in 2012, Brownlee’s powers to over-ride existing laws has been kicked out for five years. The powers of confiscation, as No Right Turn has already pointed out, include being able to confiscate and demolish a home or perfectly sound business premises for a new commercial development :

The new legislation will set out powers for CERA to acquire land or an interest in land (including fixtures such as buildings), compulsorily if necessary and to demolish buildings, rebuild or change the use of an area….Acquisition of land powers are considered to be necessary in order to facilitate the recovery of Christchurch. It may be necessary for CERA to demolish a building (that is otherwise sound), or rebuild on a site, or otherwise take control of land and use it in a new way (such as to form part of a new commercial centre, or a park, or for remediation).

The key phrase there being “such as to form part of a new commercial centre.” So if a developer wants a particular building bowled or land seized or re-zoned to build a mall or a supermarket parking lot, they will be able to make a case to the new, central government appointed Canterbury Earthquake Recovery Authority (CERA) that their commercial enterprise “ will facilitate the recovery of Christchurch” - and if they don’t get satisfaction there, the developer can ask Brownlee to simply over-ride CERA’s decision.

Compensation ? Not so much :

Compensation would be payable at the market value at the date of taking control, and would also reflect the extent to which property was undamaged and avoid paying compensation for loss that was or ought to have been insured.

So, lets assume the building was damaged last September, and damaged further in February. (Even so, keep in mind that the owner is still paying the same mortgage as when they first bought the property.) Just in case we didn’t understand the chilling line about “compensation being payable at the market value at the date of taking control” the briefing papers repeat the line again : “Compensation would be assessed from the date of taking control.” In other words, the compensation for seizure or demolition will be payable at the post- double earthquake discount value, and before reconstruction begins ie, at the lowest point of the cycle, when the owner is at their most severely stretched.

Working hand in hand with central government, developers will thus be able to buy or bowl properties where the qualifying rate of compensation has been diminished by the impact of two earthquakes. So….while the new legislation expands central government’s ability to confiscate, demolish and re-zone (and extends the suspension of normal processes of appeal and compensation) it also limits the liability for compensation. Too bad if you weren’t insured adequately. Too bad if you’re still paying a mortgage at pre-earthquake rates on a building now assessed at post-earthquake values. Too bad if the police cordon served to interrupt or damage your business. Since limiting access to your business premises was in the “wider interests of the community” any loss you suffered is to be treated under this new law as being your problem, entirely.

For example, we consider there should be no compensation for government actions that result in:

losses that were, or ought to have been, insured e.g. business interruption or a building that has already been destroyed and has no value (to avoid double- dipping or because that was the owners’ choice); or economic or consequential loss e.g. the inability due to the cordon to obtain access to carry on a business or fulfil a lucrative order (because such a decision is taken in the wider interests of the community);

claims by insurers (because they have chosen to bear the risks);

losses of personal property worth more than $20,000 which is the threshold in the Civil Defence Emergency Management Act (because more valuable property may or could have been insured); and unwarranted and unjustified claims, with clear authority being given to reject such claims (because a residual discretion is necessary to deal with unforeseeable claims).

Tough luck, mate. Beyond the compassionate talk and the photo opportunities, this is the Darwinian reality of the new Christchurch.

ENDS

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