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Time to call out the earthquake sooks

  • March 24th, 2014

I'm waiting to hear that everyone will soon be fenced a safe distance from the two old statues in Parliament's grounds.  They've been found at risk of falling on people in an earthquake. No doubt the engineers who've done the inspection and the equally exposed Parliamentary Services manager will decide there is no benefit in failing to act with maximum rsik aversion.

Common sense would be too risky. They'll not be able to just put up notices saying "this statue could fall on you in an earthquake" and leave the rest to the same individual judgment we use every time we go into the bush where trees have limbs waiting to fall.

New Zealand's response to earthquakes risk is now grotesquely irrational. Sensible upgrading of requirements for new buildings is overshadowed by the cowardice over  existing building risks.

Demands that 'government' keep people safe clash with the cold realities that New Zealand can't afford it. Nor can Japan or California, or indeed any government. Earthquakes involve vast forces beyond human control;

Earthquakes are in a class of risk which humans find difficult to keep in perspective. As MH370 shows we are transfixed by single events with an ultra low likelihood but numerous ‘innocent’ casualties. Flying and earthquakes are widely felt to be thousands of times more hazardous than  in reality.

Earthquake risk is now top of mind for New Zealanders. There is no limit to what could be spent to reduce earthquake death or injury. Yet the statistical risk of earthquake injury is negligible compared with risks we commonly assume without recrimination, including transport accidents, sport accidents, smoking, drinking and over-eating;

An individual’s statistical risk of major financial loss to earthquake is  trivial compared to the risks of property value loss to causes like fire, marital break-up, regional economic decline, bad neighbours, and losing your job and being unable to pay your mortgage.

Recent legislation, and recent cases have increased life risk liability risks for people in authority. The old tort exceptions for personal choice and contributory negligence have been largely eliminated. Accordingly fears of using property with very low life risks may be dramatically out of line with other risks.

  1. Employees are pressing employers to avoid premises seen as risky even if the risk is a fraction of the risks faced by employees in their homes, or getting to and from work;
  2. Employers are fearful of allowing employees to remain in such premises;
  3. Landlords are fearful of their exposures.

Retroactive earthquake strengthening may cost:

  • More than the cost of a completely new building (the Canterbury Earthquake Royal Commission mentions up to 120%)
  • As a proportion of the value of a building, many times more than the cost of earthquake ‘proofing’ new buildings.

Retroactively strengthening buildings outside our highest seismic risk regions is rarely likely to pass any rational cost/benefit test because few if any of them will ever cause an injury. The Martin Jenkins & Associates cost benefit study mentioned by the Canterbury Earthquake Royal Commission showed no  retrospective upgrading policy that could deliver net economic benefit. It used standard NZTA estimates of loss from death , injury and damage (the current figures include $3.67m per death).

Rationally almost all existing weaker buildings should be allowed to end their useful life naturally and be replaced. Even in high risk Wellington the $60m the Council is looking at spending on our Town Hall would possibly save more lives if spent on dedicated cycleways.

Infinitely more lives are likely to be saved, and innocent misery avoided,  if the amounts to be spent on earthquake strengthening were instead spent on road safety improvements, or dietary and health services, or locking up more drunk drivers and violent criminals.

New Zealand has few leaders with the incentives to ask whether earthquake strengthening spend is foolish:

  1. Engineers and building industry people profit from the spending even if it is wasted;
  2. Local authority staff are among those bruised  by new liabilities for risks they can only control by impractical back-covering rule enforcement;
  3. Rental property owners whose buildings are not presently seen as risky will profit from the shortages of space as ‘earthquake prone buildings’ become empty (and probably derelict);
  4. The owners of churches and schools and other public or heritage buildings that are not up to ‘code’ tend to be unfamiliar with rational cost/benefit analysis. They are fearful of looking as if they balance economic considerations against safety risks, however remote.

Many have not yet realised they will be personally  liable for $200k fines if they fail to comply with strengthening orders. There is another $220k fine for not excluding people from a building that has been declared unsafe (the Bill just says ‘earthquake prone’). Abandoning the building won't save the owners. They’ll remain responsible with an extra fine of $20k for every day squatters stay .

The risk of serious financial loss, to individuals and regions and to New Zealand from earthquake precautions and insurance premiums is likely soon to be more than the likelihood of loss from an actual earthquake.

There are few, if any, votes for politicians who point out any of the above. Their rationality will be depicted as hard-heartedness.




  • AngryTory
  • March 24th, 2014
  • 9:32 pm

The logical solution is quite simple: repeal ACC & EQC legislation (all except the removal of the right to sue from ACC); legislate retrospectively to void all earthquake insurance in the country, and to ensure earthquake risk is no longer insurable; stop the Chch rebuild (the insurance change would pretty much stop private spending, so we just have to stop council and central government spending); and relocate what small fraction of central govt that we need to Auckland.

Any politician got the guts to advocate that? Jamie? Anyone?


Hi Stephen,

Boy, do we get messes when we have to use regulation to try to replicate what would happen automatically in liability world, or in a world where EQC premiums scaled appropriately with risk.

I sympathise with much of what you’re saying. It is nuts to require that a building, in the middle of nowhere, be strengthened to bomb-shelter status.

I still think the best way of sorting out what needs strengthening is requiring building owners to carry liability insurance against passers-by being killed by their buildings. Put it at the current VSL for each one. Buildings posing little risk, either because they’re already safe or because nobody walks by them, would pay very little. Buildings with lots of unreinforced masonry along Lambton Quay would face very high premiums. Then the owners would have to weigh up remediation, whether by strengthening or tear-down, versus bearing the insurance costs. We’d also need complementary changes to regulations enabling owners of heritage buildings to tear them down or modify them to make them safe.

Statues don’t worry me. It’s easy(ish) to dodge a falling statue. Just move a couple steps over. All the masonry along the main drags in Wellington though, just sitting there, largely unreinforced, waiting for Wellington’s quake. It’ll all come down on the sidewalk and onto the streets. The Alpine Fault’s due any time now.


Stephen says :
“Earthquakes involve vast forces beyond human control”

Its 40 billion dollars Stephen, and we are just starting, thats just $10,000 for every person, or better $NZ40,000 to you, taxpayer.Partially socialised by Government to $NZ 14 billion, you owe less..
This is going to be tough Stephen I need $25 billion to save Christchurch.
Eric is hardly alive yet, he is young, his home is worth nothing, our bitterness has not reached beyond Kaikoura yet but it will soon.
I myself lost a statue to myself in the garden, it fell apar , I took it to the waste disposal and I cried.
I was nothing

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