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EQC Welcomes Inquiry Report

The Chair of the Earthquake Commission, Sir Michael Cullen, has welcomed Dame Silvia Cartwright’s Report of the Public Inquiry into the Earthquake Commission, released today.

“The Report lays out clearly the challenges faced by EQC in responding to the most complex and damaging earthquake sequence that has occurred since the EQC was founded in the1940s. It makes some serious criticisms of the way in which that response was carried out which too often added to the trauma felt by the residents of Greater Christchurch.

“In November last year I made an unqualified apology for those failings and I repeat that apology today. We did not do as well as we should. This has left a legacy of mistrust and hurt that we must continue to address and remedy”, said Sir Michael.

“The Report provides the opportunity to further learn from these failings and, at an all of government and EQC level, do all we can to fulfil better our responsibilities to New Zealanders in the next natural disaster that will undoubtedly occur at some unknown time in the future.

“Dame Silvia’s Report underlines the magnitude and complexity of the task ahead and makes many helpful suggestions about the way forward. Over the last couple of years EQC has been working through some of the issues and, consistent with the findings of the Report, has come to some clear conclusions.

“The first is to ensure that the new National Emergency Management Authority and its central and local government partners have a full and clear understanding of their own, and each other’s, responsibilities in the event of a major disaster and that proper attention has been paid in advance to the various elements of reduction, readiness, response and recovery.

“The second is to pay much better attention to the building of resilience to deal with major disasters. EQC has a significant and increasing role in this area and we welcome Dame Silvia’s support for expanding that role, particularly in liaison with local authorities.

“The third is to educate New Zealanders more thoroughly in what it is reasonable to expect, and in what timeframes, in the event of a disaster. As we have seen on a number of occasions, public, media and political pressure leads to promises being made, particularly around timeframes, which cannot be fulfilled.

“We know EQC implemented multiple assessment programmes, in quick response to the sequence of earthquakes, and this is one of the key areas where realistic timeframes were not set. Our lack of coordination and communication led to inconsistencies in what people experienced and a loss of trust in EQC. This, with other factors discussed in the Report, led to confusion, frustration and distress, and trauma for homeowners who rightly felt let down.

“At the same time, EQC staff while committed to doing the right thing, were overstressed, working long hours with inadequate systems and processes for the scale of the task they were faced with, and felt undervalued. In too many cases EQC failed both our staff and the people of greater Christchurch,” said Sir Michael.

“The fourth area for attention is a full review of the EQC Act. Too many of the definitions in the Act are unclear and this, and subsequent attempts to interpret these definitions, created very significant issues, not least between EQC and the private insurance sector, some of which are still unresolved. The Act also needs a clear purpose clause to assist in future interpretation. We welcome the government’s commitment to a full review, recognising that in the current crisis other priorities are absorbing attention.

“The final major task for review is to clarify the scope of the directions that Ministers may give to EQC. EQC was told to take on, and accepted, functions which it was not well equipped to perform. That was especially true of taking on the responsibility for a massive managed repair programme, with limited support from other government agencies, at the same time as EQC was inundated with an unprecedented number of often complex claims.

“It is to be hoped that a comprehensive definition of the roles of various bodies in the event of a disaster of this magnitude will avoid this kind of error, understandable though it was in the context of the time,” said Sir Michael.

“While we wait for the review of the EQC Act to occur, EQC is continuing to finalise its operating model including developing the systems to support it. The most important aim is to improve the delivery of a seamless service to New Zealanders in the event of a disaster. That almost certainly means a system where New Zealanders have a single point of contact, likely to be with their private insurer, who will handle all of that New Zealander’s claims from start to finish, with EQC reimbursing the costs to the insurer for which EQC is responsible.

“There is much to be done in creating a better model for the future. Central and local government, EQC and the private insurance industry will need to work cooperatively and with a clear recognition of each other’s roles and responsibilities to make this happen. I am confident that EQC, for its part, is up to that task,” concluded Sir Michael.

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