Loca Government June 2013

Lessons from Christchurch A look at NZ’s capacity to handle major disasters with a focus on insurance PAGE 14

VOL 50 • JUNE 2013 • $6.50

Successful business cases How to construct a good one PAGE 6

When you’re

talking business Mediaweb is New Zealand’s leading B2B publisher with titles at the forefront of the business, food, media and fmcg sectors.

Mediaweb_TalkBus_FP_210x297_0413_Melissa

The combined power and reach of our titles give us a market coverage second to none and offer both readers and advertising partners unparalleled access to the latest trends and targeted audiences.

INSIDE: Advertising Agencies Categorised Clients & Brands Key Executives A-Z Top 200 Advertisers

Agencies&Clients_FINALcover.indd 1

4/05/12 3:28 PM

But Mediaweb is much more than your average publisher. Utilising our industry expertise and sector knowledge, our offering extends into industry events, e-newsletters and contract publishing services.

A young and innovative company with old, established credentials. When you want to reach the business decision makers, Mediaweb has the solution for you.

p: 09 529 3000 e: enquiries@mediaweb.co.nz

www.mediaweb.co.nz

GOOD MORNING,

VIETNAM 9 421902 251009

>>

AD OF THE MONTH

>>

SPACE ODYSSEYS

>>

THE VNO STORY

>>

>> >>

Q+A NIC FINLAYSON

THE COOLEST AD LEGALS

>>

>>

AMBIENT

>>

119 WINNERS

ETHNIC MEDIA

>>

>>

TV TOP 10

FRIENDS & LOVERS

>>

FORMATS THAT SIZZLE

PAGES 13 & 15

NEW ZEALAND LOCAL GOVERNMENT

AGENDA JUNE 2013

FROM THE EDITOR 02 Managing risk – are we covered?

NZLG INSIGHT News and current affairs from the New Zealand local government sector

3

Photo credit: thinkstoc k

03 New faces on Queenstown Lakes District Council 04 Terms for Councils 05 The additional cost of surveys for public works 06 Local government agencies discover business cases 08 A look at the contracting landscape 09 Emerging talent and revived buildings star in the

Architecture Awards 10 PNCC investment in the health of staff sees

life-changing results SOLID WASTE 11 Such a waste AIR QUALITY 12 Air pollution levels high in Christchurch 13 Lincoln Agritech’s spray drift exposure analysis

18

MANAGING RISK AND DISASTER PLANNING 14 Lessons from Christchurch FLOOD RECOVERY 18 The value of a few hard yards – How New Zealand

is supporting Australia’s flood recovery PLANNING & RECOVERY 20 Insurance shortfalls flow into fire levies 21 Disruption to business as usual WASTEWATER 22 Hamilton backs an effective solution for wastewater NZLG FOCUS 23 GST credits on compulsory land acquisitions 24 Shaking the money tree – the review of

development contributions LEGAL OPINION 25 Have building products contributed to leaky buildings?

On the cover: – A look at our insurance industry’s capacity to handle major disasters. PAGE 14

FROM THE EDITOR

PUBLISHER & EDITORIAL DIRECTOR Toni Myers editor@localgovernmentmag.co.nz

Managing risk – are we covered?

Christchurch changed the world’s view of us and our own view of ourselves.

Until then the shared view was of a relatively low risk environment; both our weather and our political climate are relatively benign.

Christchurch showed in stark relief that our little piece of paradise down here at the bottom of the Pacific is not immune from disaster.

We’ve always known we were the shaky isles but not since the Napier quake has the earth moved to such dramatic effect in a heavily populated and built up area.

So what are the major outcomes for local bodies?

Private citizens and businesses have been hit in the pocket as our risk profile changed overnight and the story is the same for councils.

In our cover story on page 14, Reg Birchfield considers, from an insurance point of view, at what price and on what terms do we still have capacity?

Natural disasters are just one risk vulnerability. The upcoming Disruptive Event Management and Business Continuity Planning Conference (page 21) in Wellington, in late August, will give local authorities further insight into risk appetites – as well as sharing case studies of how high-profile national organisations plan to protect themselves from the disruptions.

Budgets remain tight and ever greater accountability has led to a proliferation of ‘business case’ documents. Turn to page six for tips on how to construct one logically and successfully.

The New Zealand Fire Service is also facing fundamental shortfalls, with the under-insuring of council assets resulting in reduced levy payments.

Brett Warwick, CFO of the New Zealand Fire Service puts a loaded question on page 20; are local authorities ready to back away from their traditional community role of social responsibility in the provision of local fire services, by shifting the liability for paying onto ratepaying households in their region?

It’s encouraging to see that tight budgets are still enabling innovation and creativity. Both in the themes coming through in the New Zealand Architecture Awards (page 9) and developments by the likes of Spiire (page 22) and Lincoln Agritech (page 13), Kiwis are doing more with less and, in many cases, solving large-scale problems.

And there are still some windfalls to be found. Some councils will find that they are due GST refunds, following the demystification of the treatment of land compulsorily acquired under the Public Works Act. Check out page 23 to better understand the ins and outs of what you might be eligible for.

‘Christchurch showed in stark relief that our little piece of paradise down here at the bottom of the Pacific is not immune from disaster.’

2

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

ACTING EDITOR Christina Wedgwood ADVERTISING SALES MANAGER Kim McIntosh 09 529 3000 021 419 468 kimm@mediaweb.co.nz DESIGNER Melissa McGregor melissam@mediaweb.co.nz WEB & SOCIAL MEDIA CONTENT Hamish McConnochie hamishmcconnochie@gmail.com PRODUCTION MANAGER Fran Marshall franm@mediaweb.co.nz GROUP SALES MANAGER Lisa Morris 09 300 2675 lisam@mediaweb.co.nz ADVERTISING CO-ORDINATOR Pip Maclean 09 529 3000 ads@mediaweb.co.nz COMPANY ACCOUNTANT Pam King 09 300 2670 pamk@mediaweb.co.nz CREDIT CONTROL Gladys Hooker 09 300 2672 gladysh@mediaweb.co.nz CIRCULATION/SUBSCRIPTIONS Sue McDiarmid Rates: $80 for 12 issues incl GST and post.

Overseas rates available on request.

Address to: Subscriptions Dept, Mediaweb, PO Box 5544, Wellesley St, Auckland subs@mediaweb.co.nz PREPRESS AND PRINT BY PMP Print PUBLISHED BY

MEDIAWEB 115 Newton Road, Eden Terrace PO Box 5544, Wellesley St, Auckland Phone +64 9 529 3000 Fax +64 9 529 3001 Email enquiries@mediaweb.co.nz www.mediaweb.co.nz Original material published in this magazine is copyright, but may be reproduced providing permission is obtained from the editor and acknowledgment given to NZ Local Government magazine. Opinions expressed are those of the authors and may not necessarily be those of Mediaweb. We welcome material from commercial sources for publication but cannot guarantee that it will be used as submitted.

ISSN 0028-8403 (PRINT) ISSN 2324-1721 (ONLINE) PUBLISHER'S STATEMENT OF DISTRIBUTION New Zealand Local Government magazine’s distribution figures can be supplied by way of a publisher’s statement, which can be verified if required by print and postal information. This is the same data reviewed under the ABC system. The guaranteed minimum distribution for NZ Local Government is 2000.

Photo credit: thinkstock

NZLG INSIGHT

New faces on Queenstown Lakes District Council The three arms of the Queenstown Lakes District Council (QLDC) have now been incorporated into one entity. The major re-organisation comes into effect on July 1 and is based on recommendations of a review chaired by Local Government New Zealand and Auckland Regional Council chief executive, Peter Winder.

Until now, the affairs of the Queenstown Lakes District Council have been conducted by the council itself and two council-controlled organisations, Lakes Environmental Limited and Lakes Leisure Limited.

Recently there has been a growing concern at the top-heavy nature of the organisation and problems of efficiency and cost that have flowed from the tri-partite nature of the council’s activities.

In acting on the review team’s recommendations, the council will merge the activities of Lakes Leisure Limited into their own community services team; and the Lakes Environmental Limited’s engineering team into their infrastructure team.

The council has formed a totally new legal and regulatory team to manage all of its regulatory and enforcement functions. QLDC mayor, Vanessa Van Uden, says one of the key benefits will be a single point of service for residents, as all the building and

resource consents that require the approval of the council, will now be dealt with by a single planning and development group.

A new management group has also been announced.

Adam Feeley remains as chief executive, however, the current general manager of the Infinity Investment Group, Marc Bretherton, has been appointed general manager, planning and development. The new director of Human Resources is Beth Bundy, previously of the Waitemata District Health Board.

The council’s current general manager of infrastructure services, Erik Barnes, has been appointed to the new role of general manager infrastructure and assets. Another existing and long term council employee, Stewart Burns, now becomes chief financial officer. The council’s chief information officer retains her position.

Another external appointment is likely to be made soon for the new position of general manager, legal and regulatory. Currently there are no persons within the council who have the requisite qualifications for what will be a demanding role, however, many in the region have been surprised that three of the eight management positions have been appointed from outside of the council.

How are you planning for assets and services, even the maintenance of facilities to meet the changing needs of your changing population?

The first wave of 2013 census results are due in December – do you have the skills in-house to mine this information? www.id.com.au

An online community profile from .id makes it easy. It takes hundreds of pages of census data and turns it into consistent, accurate, easy to understand charts and tables. And your community gets access too!

There’s never been a better time to think about getting a community profile - make sure you talk to the .id team about profile.id® now.

Penny Bloomberg • penny@id.com.au nz mobile 021 0820 7905 • nz freephone 0800 955 481

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

3

NZLG INSIGHT

Terms for Councils – Assisting with terminology translation

BY CASSIE ROWE, ALGIM Marketing & Communications Coordinator With shared services becoming a part of everyday process within Local Government, the need for translation has become inevitable. Each council, and sometimes different units within councils, utilise different terms to describe what is often very similar processes and systems. For example, a quick look at council websites shows that even regional and unitary councils don’t refer to the permissions they grant under the RMA the same way – is it a shingle permit or a shingle consent? Is that the same as a gravel extraction permit?

ALGIM, in association with the team at SWIM, have created a controlled vocabulary to make it easier to access and share information – regardless of the fact that various council teams and business units use different language and systems to create and manage their information.

Named “Terms for Council”, this controlled vocabulary provides standardised terms for use within councils as well as between councils. Each function (or activity) and service (or action) has a unique number to assist with mapping terms used by individual councils to the Terms for Councils controlled vocabulary.

Officially launched at the 2012 ALGIM Records Management Symposium, Terms for Councils aims to assist in the retrieval of information for both internal and external users and make the sharing of ideas and information between councils easier, by highlighting and translating the different terms used.

Function and activity terms are high level headings, gathered into logical groupings, for functions and activities that a council performs. Services and action terms are terminology for the actions the council performs to manage itself in order to provide services, as well as the services that a council provides to – or on behalf of – those who live, work or pass through the area for which the council is responsible.

Terms for Councils can be used to standardise terms for: Documents Fields in databases

Content inside database fields Websites Online Services Document and record classification structures (shared drives or EDRMS) Retention and disposal schedule Shared Services Navigating the Terms for Councils site is simple.

Clicking on any function or activity term provides a definition of that term, alternate terms, administration information, and a list of associated terms on the right hand side. Likewise, clicking on any service term provides alternate terms and administration information.

Lists are downloadable as .csv files.

Marion Dowd, ALGIM vice president and information technology manager for Western Bay of Plenty District Council, assisted with the creation of Terms for Councils.

Marion highlights that it is important to note that Terms for Councils is not a file classification system. “It is a set of terms for things that councils do, however it can be used in deciding a file classification system.”

The system is not a complete thesaurus, but it will be extended, built on and improved over time.

ALGIM welcomes feedback and suggestions, via the suggestions form on the terms page. Suggestions for alterations and additions will be considered by the Terms for Councils moderation group. You can find more information about the process for changes on the Terms for Councils webpage.

If you have subscribed to the ALGIM IM Toolkit Maintenance Agreement, you can access Terms for Councils instantly by logging on to the Terms for Councils webpage, on the ALGIM website: www.algim.org.nz.

ALGIM acknowledges the esd-toolkit (http://standards. esd.org.uk/) as the source of the conceptual model and some terminology for Terms for Councils.

2013 ALGIM Information Management/Records Symposium 29 & 30 July 2013 James Cook Hotel, Wellington

www.facebook.com/ALGIMInc www.twitter.com/ALGIMInc

www.algim.org.nz

4

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

Information Professionals: the lifeblood of organisations!

NZLG INSIGHT

The additional cost of surveys for public works Rules for Cadastral Surveys, introduced in 2010, that require local authorities acquiring land under the Public Works Act 1981 (PWA) to survey not only the areas of land acquired for the work, but also the remainder of any affected land parcels – are adding significant survey and legislation costs and, in many cases, making plans overly complex and incomprehensible.

Public works plans, especially those required for roading projects, often involve partial takings of large numbers of parcels. Adding parcels to already complex plans has meant that even experienced property professionals find them hard to interpret. A standard 2 to 4 lot subdivision can usually be recorded on 1 or 2 plan sheets. A fairly standard roading plan, including sections for balance parcels, now commonly requires between 10 and 15 plan sheets and complex plans can have more than 30 sheets.

In November 2012 the Local Authority Property Association (LAPA) wrote to Ministers expressing concern at the additional costs and complexity and suggesting the use of diagrams to show areas on new titles, without the need for resurveying.

The Minister for Land Information rejected this proposal, including a response from the Surveyor General defending the 2010 rules on the basis that they provide for improvement of the survey accuracy and stating that public works acquisitions should be treated exactly the same as private subdivisions. The Surveyor General also pointed out that exemptions can be applied for on a case-by-case basis.

The real issue though, is cost. The Crown now requires local authorities to remedy existing historical survey inaccuracies, outside the area being surveyed for the public work, at the ratepayers cost. Requiring the subdivider to meet the cost of improving all their land boundaries is appropriate as, in this situation, increasing the accuracy of boundaries directly benefits the private owner. However there is a strong argument that this is not appropriate when the survey is required as part of work in the public interest.

When councils, and for that matter the Transport Agency are being squeezed for roading funding and required to justify their expenditure, they may question the syphoning off of ratepayer and taxpayer funds intended for roading projects to pay for updating historical survey data. TLAs are entitled to ask why, if upgrading of the cadastral record is so important, other exemptions to upgrades are still allowed for in the rules and why the cost is being met out of rates allocated to pay for public works. So far, the responses provided by the Surveyor General do not answer these questions.

This is likely to be the subject of continued discussions between local authorities and government. Given the Surveyor General’s position, the only practical way of solving the issue appears to be a change in the PWA to include a specific exemption from requiring balance land to be defined on plans prepared for public works surveys. This would be consistent with the subdivision exemption in the RMA and could be done without creating errors in the land registration system and its operation.

Auckland Environmental Archive Centre now open Recall now offers a purpose-built storage area that meets all the legislative requirements to safely house records of archival value as mandated in the Public Records Act 2005.

The facility, capable of holding 30,000 cartons, is constructed to meet all Public Records Act archival specifications, providing conditions within the prescribed temperature and humidity parameters to preserve the integrity of historically significant items.

Our advanced Environmental Archive Centre is specifically designed for the secure storage of high value and sensitive items in an environmentally controlled area.

Let Recall assist you with full PRA compliance. Contact a Recall Representative today.

0800 RECALL www.recall.co.nz

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

5

NZLG INSIGHT

Local government agencies

discover business cases

BY TONY STREET Director of Capex Systems Ltd Many local bodies now have considerable debt and capital resources are being managed as limited funds. Central government and ratepayers are seeking greater accountability for discretionary spending.

Consequently, many people in local government have started talking about “business cases”.

However, despite the surge in popularity, surprisingly few people know how to construct one.

What makes a good business case?

A successful business case is credible, provides practical value in enabling decision makers and planners to act with confidence and accurately predicts what happens.

The author of a business case effectively proves that one scenario represents the better business decision by comparing projected results from two or more scenarios and, a baseline, ‘business as usual’ scenario.

A logical structure is a ‘must’ and, ideally, a case should be supported with evidence that withstands critical scrutiny, serves as a useful guide to decision makers and makes accurate predictions.

There are core sections that give a business case its logical structure, including Introduction & Overview; Assumptions & Methods; Business Results; Sensitivity &

Risk Analysis, and Conclusions & Recommendations.

First though, the business case subject statement describes what the case is about and identifies the different scenarios that will be compared. The proposed actions are described upfront and the business objectives they address are presented. It’s essential also to specify boundaries for the analysis, rules for deciding what data does and doesn’t belong in the case.

A focus on the tangible As a rule, only tangible costs and benefits should belong in a business case, because if an outcome is intangible, then there is nothing to measure and, therefore, no evidence that it has occurred.

Whilst business cases seek to use financial metrics to measure costs and benefits, many local body business cases will target (at least, in part) non-financial objectives, like improved customer satisfaction.

It is possible to infer customer service measures reasonably from indirect tangibles, however, such as customer survey scores, number of complaints, repeat business and other measures – so these can be given consideration in a business case.

Consider another example: a project that will improve road safety, following a Council’s mission statement to “provide a safe, efficient transport system that supports economic opportunities.”

Mission statements like this

are vague expressions of good intentions if they are not translated into tangible, measurable terms.

So, the mission statement (and the business case metrics) may be divided into two high-level goals having to do with safety and economic opportunity.

Another way to provide metrics is to underpin the mission with key performance indicators (KPIs); tangible measures for the goal “improved traffic safety”, such as the number of road-network fatalities, or crash statistics at intersections.

From tangibles to targets Once the author of the business case names the business objectives addressed by a proposed action, and shows tangible measures for them, targets can be identified for each objective. Targets ultimately play a key role in establishing the value of both non-financial and financial benefits.

Transparency with assumptions Assumptions play a crucially important role in a business case, for both author and recipients alike.

A good business case will include an Assumptions section, within the Methods component, that describes the important assumptions in the case.

A business case needs to stand on its key assumptions because it predicts the future, which is fundamentally uncertain.

Assumptions also play a key role

Capex Systems Ltd is New Zealand’s premier supplier of consultancy and software solutions in the field of business cases and capital expenditure (capex) management processes. Our clients have benefited by lifting the quality of their business cases; automating paper-based workflows; improved priority setting, and better managing risks - in a mere fraction of the time that it takes using conventional methods.

For the past 14 years we have assisted a vast array of local government, state and private sector agencies with business cases; supporting systems, and training. Our corporate clients include the Port of Tauranga - dedicated user of Stratagio™ since 1999, and consistent leading performer on the NZX for the past decade.

C A P E X

S Y S T E M S

L T D

Visit us at www.capex.co or email us today at enquiries@capex.co or phone 07 850 9460

6

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

1. Define Introduction Proposed Action Stakeholders Current Situation 2. Design Scenario Analysis Action Scenarios Assumptions Register 3. Develop Business Results Financial Cash Flow Risk

Model Statement Sensitivity 4. Decide Value Realisation Scenario Critical Success Risk Register

Selection Factors 5. Deploy Implementation Operations Capital Project Charter

Budgets Budgets 6. Deliver

Recommendations Conclusions Benefits Recommendations

Realisation

Register

in explaining business case results, and in measuring and reducing uncertainty for projections.

Looking at outcomes The business results section provides an answer to the important questions: “What happens if we implement each scenario?” and “Which scenario represents the recommended course of action?” Business results are addressed in business terms – considering both the financial and non-financial business outcomes.

Sensitivities and risk The next essential element requires a look at sensitivity and risk analysis. Decision makers

NZLG INSIGHT Strategic Objectives Benefits Costs Business Value Funding Project Management Executive Summary

that need to determine which scenario to implement, require an understanding of the likelihood that results will be close – or quite different – to the predicted values.

They also need to know which risk factors need to be examined carefully.

Risk analysis is usually undertaken using Monte Carlo risk simulation software. This technique requires that key assumptions be assigned probability profiles. During the simulation, the process of changing all assumptions and recording the output value is repeated until a picture emerges showing the full range of possible outputs. A graph portraying probabilities is then generated.

Where else for help?

The Treasury has publicised a Better Business Case (BBC) framework, based on the 5 gate approach from the UK. Many local government business cases will relate to smaller scale projects, however, where the full 5 gate process may not be warranted. For example, a financial case may not be required because the project may be one of many that makes up the capital budget.

The accompanying table outlines a generic “6-D” business case framework that has been systemised into an integrated software application to promote informed decision making, innovative thinking and value trajectory monitoring.

This system can be customised to meet the specific needs of local government agencies and enables business cases to be generated more quickly and with increased confidence.

Business cases provide an essential management tool to ensure that resources are allocated efficiently. They’re an essential link between strategic plans and underpinning operating budgets and targets.

Hill Laboratories is proud to offer New Zealand’s most advanced Air Canister Sampling service. Using the latest technology, our canisters offer a simple and easy-to-use vacuum sample extraction method requiring no calibration and ensuring very accurate results.

Hill Laboratories has a wide range of Air Testing services, ensuring fast and cost-effective results for our clients.

SEAL4862LGf

AIR TESTING. FAST AND ACCURATE! Visit www.hill-laboratories.com/canister or call Ian Graves today, on

07 853 2503.

www.hill-laboratories.com

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

7

NZLG INSIGHT

A look at the contracting landscape

BY JEREMY SOLE, Chief Executive New Zealand Contractors’ Federation Following on from the momentous Ingenium conference, I’d first like to say “Well done Ingenium – now Institute of Public Works Engineers Australasia (IPWEA)”. There were fascinating speakers, a wonderful atmosphere and excellent networking opportunities – all at a great venue.

It was interesting to pick up threads of the conference theme throughout the keynote presentations and concurrent sessions. The ‘change’ theme was reflected most strongly by Ian Taylor of Animation Research, the world-leading, Dunedin-based developers of the stunning 3d computer generated images (CGI) that are used regularly in global television sports and news events – as well as more recently in conceptualising the new Christchurch Central Plan.

The dynamics and effects of accelerating change were also teased out in the presentation given by Dr Norman Chorn, of the Centre for Strategy Development. Both spoke in different ways about operating in a new and increasingly complex social, business, economic and regulatory environment.

One spoke from his work in successfully bridging

NZCF started as the national representative body of civil, general and roading contractors in 1944

8

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

academic and corporate consulting spheres, the other through experience of building a globally recognised and successful business at the ‘bleeding edge’ of technology – with no business plan and no idea of where he was going. Try that at Council!

Both observed strongly that size is not an underlying success factor in complex environments. Rather, the capability to acquire, integrate and utilise information is the key determinant of effectiveness and success in this new environment.

This observation legitimises, for me, the Contractors’ Federation articulated view that not only large national contracting firms and large contracts generate the economies of scale to return value for money.

Of course these firms have size and capability, get the job done and can provide value for money – but perhaps, sometimes, for reasons other than their size. Some have grown through their ability to acquire, understand and integrate information from their environment and then line it all up and put it into action.

The myth we are trying to bust is that these are the only firms working at this level of sophistication. The Christchurch rebuild is a great window on this; you see the full spectrum of firms operating in the same environment, in the same conditions and in many instances doing the same work – all at the same time.

What a great opportunity to carry out a study of efficiency and productivity.

I particularly want to reinforce what was said at the conference by these speakers – there must be opportunities for firms of all sizes, operating at this level to thrive, produce value for money, and grow.

Joint Ventures are sometimes touted as the answer to SME contractors wanting to grow. However, setting up and bidding for JVs often requires financial risk and commitments beyond what is prudent for small firms – thus eliminating it as a growth option.

With the new Commerce Cartels Criminalisation Bill currently before the house, it may end up becoming an even more expensive option for potential JV partners to go through new processes to gain exemption from the Commerce Commission.

Shutting out most of these firms from bidding for work, through not setting up a range of contract types and sizes in your region, is not the way to support, develop and capitalise on a healthy and vibrant local and national supplier industry.

I am not advocating that you dissect your work programmes to the point where you effectively shut out the big guys – rather it’s about structuring procurement models and decisions so it is attractive and achievable for a wider spectrum of capable suppliers to bid for your work.

Of course there is always the onus on the SME contractors to commit to developing – there just needs to be an environment where they can demonstrate their capabilities, and have commercial confidence to invest and develop them.

Well done to the IPWEA for a rewarding and stimulating conference. I look forward to a long and mutually rewarding association with you and the NZ Contractors Federation.

NZLG INSIGHT

Emerging talent and revived buildings star in Architecture Awards Nineteen architectural projects – ranging in scale from a big indoor sports centre in Wellington to a micro-bach on the Coromandel Peninsula, and The Mall in Washington, DC – have been acknowledged in this year’s New Zealand Architecture Awards, held in Auckland on 24 May. Due to modest budgets in the current economic climate, imagination was necessarily at a premium in many of the award-winning buildings. “Some of the projects the Awards jury enjoyed most used very little, very well,” said jury convenor and Auckland architect, Andrew Barclay.

Barclay said the 2013 New Zealand Architecture Awards also revealed the emergence of young architects such as Glamuzina Paterson Architects, who won Awards for the S House in Auckland and the Lake Hawea Courtyard House in Central Otago; Assembly Architects, designers of the Wellington Zoo Hub and Kamala’s Pavilion; and the Victoria University team who entered the First Light House into a highly selective international student design competition in the United States.

“The Awards affirmed another encouraging development – the breakthrough of established but still youthful talent into larger-scale work,” Barclay said. “It’s hard to make the step up, in a small country.”

Projects promoting sustainable values and enhancing the civic realm also featured heavily in the New Zealand Architecture Awards line-up. Patterson Architects’ 6-Green Star Geyser building in Parnell, Auckland, received Awards in both the commercial and sustainable categories, and Athfield Architects’ Te HonongaChristchurch Civic Building, a striking, 6-Green Star reworking of a sound but formerly undistinguished building, was also twice-awarded, in the public architecture and sustainable categories.

Sustainability, in both the environmental and social sense of the term, was the impulse behind the establishment of Re:START, the morale-boosting container retail precinct in central Christchurch designed

by The Buchan Group.

The New Zealand Architecture Medal, which is awarded to the most outstanding of the New Zealand Architecture Award winners – the best of the best – was presented to The Imperial Buildings, a group of heritage buildings on Auckland’s Queen Street which have been restored and revived by Fearon Hay Architects.

“The Imperial Buildings was a fitting overall winner in a year in which the adaptive re-use of older buildings was a strong theme,” said Barclay. “The conversion of older buildings to new purposes may be a symptom of current economic circumstances, but it also signals a greater awareness of the worth of existing buildings, and of the possibilities they offer to imaginative clients and architects.”

One of the goals of the New Zealand Architecture Awards programme is to acknowledge buildings that have stood up well to the test of time. This year the jury gave an Enduring Architecture Award to the School of Music at the University of Auckland, which was designed in the early 1980s by Hill Manning Mitchell. The building

The Imperial Buildings, Auckland, by Fearon Hay Architects.

Photo by Patrick Reynolds

is “an inventive and joyful work of architecture that, 30 years after its construction, continues to communicate a sense of delight,” the Awards jury said.

At the same event, New Zealand Institute of Architects president, David Sheppard, presented the Gold Medal for career achievement to Pip Cheshire, architect of such acclaimed buildings as Auckland’s Q Theatre, the Leigh Marine Laboratory, the Congreve and Stringer Houses, and master architect of Auckland’s Britomart precinct.

The New Zealand Institute of Architects praised Cheshire’s design skills, and also his contribution as a writer, teacher and mentor of young architects.

For a full list of winners, visit: www.nzia.co.nz/news-media.aspx.

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

9

NZLG INSIGHT

PNCC investment in the health and safety of staff sees life-changing results

Photo credit: thinkstock

Last November Palmerston North City Council (PNCC) introduced a new Drug and Alcohol Policy and contracted New Zealand Drug Detection Agency (NZDDA) to carry out random drug and alcohol testing for those employed in, or applying for, safety sensitive positions.

HR manager, Wayne Wilson, says it’s been a surprising journey so far. Not all tests are negative and PNCC takes a proactive response to any staff member who returns a positive test. “It’s not a case of three strikes and you’re out,” Wilson said. “Our staff are a valued asset and we want to ensure their wellbeing. At the end of the day we’re here to help staff and we’ll do all we can to help them get a negative result if their test proves positive.”

Some staff are looking on the random testing as an opportunity to make some life-saving changes. One employee who was a regular user of Cannabis or THC made the decision to kick the habit and stay clean. He

asked to undertake a test which proved negative and eight months later is still drug free.

With more than 600 staff employed, 300 – 350 positions are subject to random testing. Many of these staff work in areas where they use heavy machinery or machinery is used in the vicinity of their work environment. Testing is carried out between four and six times per year and 20 percent of people in safety sensitive roles are tested in a year.

While PNCC doesn’t have a specific definition for safety sensitive positions, their policy states, “while drugs and alcohol may adversely affect performance in any role within Council, it is recognised that the behaviour resulting from drugs and/or alcohol may have greater safety implications within certain roles/environments.

Employees could expose themselves or others to the risk of injury or there is an increased likelihood of a serious accident occurring.” These positions are referred to as ‘safety sensitive’.

From the 50 tests conducted to date, only two have returned a positive result. All the pre-employment tests and alcohol tests have been negative and no staff have refused testing.

“At the end of the day, if it helps to keep our staff and members of the community safe, then it has to be a good thing,” Wilson said.

10

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

SOLID WASTE

waste

According to Environment New Zealand, approximately three quarters of waste disposed of to landfills in 2007/2008 was potentially reusable. Much of it was organic waste, rubble, timber, paper, plastic, metal and glass - a worryingly large proportion that could have been diverted by being recovered, reused or recycled.

These figures pose the question: why is so much reusable waste going into landfills – and how can we change this?

Some indicators support the fact that things are getting better. In 2011, 2.461 million tonnes of solid waste was disposed of to municipal landfills across New Zealand. This figure is similar to the amount disposed of in 2010.

The focus, in recent years, has been on initiatives to divert waste from landfills. Household participation in recycling has increased from 85 percent in 2000 to 94 percent in 2010 and the recovery of packaging has increased by 26 percent to approximately 430,000 tonnes between 2004 and 2009.

On an international scale Globally, New Zealand has comparatively low levels of paper waste disposal – in fact, the proportion of paper in our waste stream places us at the third lowest proportion across 30 OECD countries. That said, we have average proportions of glass, organic, metal and plastic waste disposal and high proportions of ‘other’ waste.

It’s important to understand what materials are in the waste stream, so that waste management and minimisation plans (WMMPs) appropriately counter the disposal of matter that can be recycled or reused to create other products or energy.

Closer to home 2007-2008 figures saw organic waste, from both commercial and residential activities, representing the largest proportion (28 percent, as a national average) of the waste stream. Further to this, organic

waste has had the largest increase in proportion in the last decade.

Construction and demolition waste, like rubble and timber, have obvious reuse potential and make up 16 and 11 percent, respectively, of the country’s average waste stream. There is a hope that those involved in the building industry, and in the reconstruction of Christchurch, will be utilising these resources, to avoid their eventual appearance in our landfill.

Potentially hazardous waste accounts for a national average of 14 percent of our waste stream and highlights the continued need for research into alternative uses or modes of disposal that won’t be to the detriment of human or environmental health. Pilot schemes must continue in this area, with rapid increases reaching a plateau in 2004.

Most of the increase in glass waste has occurred in the last four years, however, its proportion overall remains small. On the decrease has been the proportion of paper waste and metal waste across that same period.

Although the Waste Minimisation Act 2008 (WMA) brings the waste management responsibilities of territorial authorities together, the impetus is on promoting effective and efficient waste management and minimisation that takes into account the various challenges inherent within each district.

Changing times?

The WMA and mandatory review of Waste Management and Minimisation Plans has ensured waste management remains at the forefront of local government agendas, as we consider future demands in each region.

The introduction of the waste disposal levy, on 1 July 2009, is also still in its early days. In effectively building in an environmental cost to disposing of waste to landfill, the levy intends to stimulate greater interest in alternatives and provide funding for innovation in the sector.

The 2011 report by the Ministry for the Environment, Review of the effectiveness of the waste disposal

Photo credit: thinkstock

Such a

levy, 2011, claims it is still too early to quantify these gains. It will be interesting to see what fruit the next review (scheduled for before 1 July 2014) yields, especially as the waste sector has begun reporting their greenhouse gas emissions in January last year.

But is the levy having the effect that central government intended with its introduction?

Although 50 percent of the levy money is flowing through to local governments, there are questions about the apportioning of it on a population basis. Christchurch’s disaster shows clearly that population isn’t the only driver of waste disposal in an area.

There’s definitely a question of education lacking too. A survey by The Ministry for the Environment in February 2011 found that the vast majority of New Zealanders (85 percent) were unsure of, or did not think there were, government laws or policies aimed at encouraging recycling and waste minimisation.

It’s hard to garner support for something that not many know exists.

Additionally, a 2010 survey indicated that 78 percent of households recycled all or most of the items that they knew could be recycled. If they don’t know that certain things make the cut for recycling, those items are unnecessarily ending up in landfill too.

The issue needs urgent attention as we look towards the future.

Population growth and increases in economic activity will only make waste disposal a more critical issue for the economy in general and local authorities in particular.

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

11

Photo credit: thinkstock

AIR QUALITY

Air pollution levels high in Christchurch A recent report by Fairfax NZ News has highlighted that several New Zealand cities are not winning the pollution war.

Those regions with topography and temperature inversion layers aloft, such as Christchurch, are experiencing higher than desired pollution levels.

According to the experts, high pollution levels occur when “the daily concentration of PM10 (particulate matter) is greater than 50 micrograms per cubic metre of air.” This has already been a problem in Christchurch for six days, so far, this year.

Recent recordings, around the Queen’s Birthday weekend cold snap, have been as high as 111 micrograms of suspended particulate per cubic metre of air, measured a Environment Canterbury’s monitoring site in Woolston. The measure from the monitoring site in St Albans also reported elevated levels of 88 milligrams.

What is also worrying is that these high pollution days are increasing in frequency, with just three reported last year over the same period.

The National Environmental Standards for Air Quality,

based on World Health Organisation (WHO) guidelines, had a target of a maximum of three breaches of the standard by 2016 and one by 2020. Last year, there were 19 breaches of the limit in Christchurch alone.

It’s no secret that air pollution is a major environmental risk to health and the impetus is on local authorities to reduce the incidence of dangerous

‘It’s no secret that air pollution is a major environmental risk to health…’ levels, and lessen the national burden of disease from respiratory infections, heart disease and lung cancer.

It’s thought that currently about 10 percent of the particulates in our atmosphere are made by human activities. Although small numbers overall, most councils are well advanced with rigorous procedures to reduce air pollution and are currently only consenting to modern solid fuel burners that emit much lower levels of particulates.

Either way, it looks like there is still some distance to go before we can claim “Clean Air New Zealand”.

World First in n ne eW Zealand!!

kiwisafer

™

Culvert end ■ reduCes Culvert Crash impaCt severity ■ Cost saving wingwall alternative ■ nZta aCCepted

wAtcH w wA tcH vIdeo Here

ComplianCe TesTing — masH 2009

AvAIlAble from Hynds brAncHes nAtIonwIde 0800 we PIPe (93 7473) www.hynds.co.nz

12

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

AIR QUALITY

Lincoln Agritech leads the charge in adapting new technology for spray drift exposure analysis Lincoln Agritech (previously Lincoln Ventures) has a strong background in providing field study measurement and modelling of spray drift patterns and exposure risks for agrichemical companies, landowners and regional authorities. Its work has been used by a number of regional councils in New Zealand, as well as international organisations, to assess and mitigate spray drift exposure through no-spray buffer zones and to develop regulations that prevent harmful exposure to humans and the environment from effluent and wastewater drift.

These capabilities, in conducting field trials and analysing spray drift exposure, have recently been enhanced through a world-first project, which has seen Lincoln Agritech staff working with a USbased manufacturer to develop a customised instrument for spray drift field studies.

Based on light refraction physics, the new Phase Doppler Interferometer system significantly improves the quality of scientific analysis offered to clients. Dr Andrew Hewitt, science group manger, states “Our scientific data will now be of a higher standard

with standard flux data from field sprays being complemented by new data on the size of the drifting droplets and their velocity.”

The new system also reduces sampling time and exposure to weather changes.

Most field testing of spray drift currently requires a system of vertical towers with line collectors and fluorescent dyes to be established, which is time consuming to set up and has to be reset with changes in wind direction. Not only costly and inconvenient to all involved, this process often means that data collection opportunities are lost.

A further common complication encountered when conducting spray application field studies is the presence of dust, which can affect sampling. The new Phase Doppler Interferometer technology uniquely ignores readings from solid dust particles and only measures liquid droplets.

The new technology provides substantial improvements in the

The Phase Doppler Interferometer which Lincoln Agritech is using in spray drift exposure analysis.

spray drift measurement, modelling and exposure determination services that Lincoln Agritech can deliver to New Zealand’s regional councils; in turn providing councils with significant quality, speed and cost benefits.

To discuss Lincoln Agritech’s work and capabilities in spray drift and exposure modelling, please contact Dr Andrew Hewitt on 03 325 3700 or via Andrew.

Hewitt@lincolnagritech.co.nz.

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

13

MANAGING RISK & DISASTER PLANNING

Lessons from Christchurch The Canterbury earthquakes raised more questions than answers about risk management and disaster planning for the country as a whole – and our major cities specifically. Reg Birchfield takes a look at NZ’s capacity to handle major disasters with a particular focus on insurance issues.

The question has been out there for a while now… Is New Zealand facing a natural disaster capacity crisis?

The short answer is no, but then comes the kicker.

Capacity is there, but at what price and on what terms? Precise answers to these two questions are still emerging. What they signal, however, are transformational changes for this country’s disaster insurance industry.

The aftershocks of the Christchurch earthquakes are more than seismic. The human, social, housing and economic toll is widely reported. The impacts, both short and long term, on the insurance industry are, however, not so widely known and the reasons for them even less understood. The impacts will, for instance, change the way in which the industry, including its broker fraternity, operates and delivers its products and services.

The estimated NZ$30 billion cost of the earthquakes has, according to Insurance Council president and Lumley chief executive, John Lyon, delivered a “fundamental and permanent shift” in the insurance market. “The way in which [New Zealand’s] earthquake risks are insured has changed forever.” Industry leaders agree.

The world’s primary insurers and reinsurers are unquestionably changing their view of New Zealand’s shaky and potentially explosive geography. The consequence is a global rethink of the country’s natural disaster risk profile. Confidence in the models previously used to evaluate risk has been undermined, according to Lyon, and the models are now being redesigned and recalibrated.

14

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

New Zealand has traditionally sold itself to the reinsurance world as a relatively low-risk environment, despite some obvious historical evidence to the contrary. Reinsurers no longer accept that argument and are looking, instead, to limit their risk. They expect primary insurers to carry larger retentions and pay more for the capital provided. Reinsurance rates have climbed by at least 50 percent and are likely to climb higher.

Judith Hanratty, a London-based director of reinsurance company PartnerRe, told a CFO Summit in Auckland recently that, prior to 2011, New Zealand accessed reinsurance funding “at cost price – making it a bargain buy”.

Capacity on those terms is changing though and reinsurance broker and analysts, Aon Benfield, says New Zealand is still paying relatively low average rates for its reinsurance cover. The global rate for catastrophe cover is 6.5 percent and up to 10 percent in the US. According to industry sources, the Earthquake Commission (EQC) paid an average rate of only 3.5 percent in 2012, up from 1.5 percent.

Attitudinal change “Reinsurers’ attitudes toward New Zealand have changed,” says QBE general manager Ross Chapman.

“Our ability to successfully argue that disasters happened elsewhere and therefore our reinsurance funding should be cheaper has come to an end.”

The Christchurch quakes ranked in the world’s top 10 insured loss events of 2011 and the world has been witnessing events of greater scale and frequency than

MANAGING RISK & DISASTER PLANNING

has been modeled for. This new reality is changing the reinsurance industry’s view of the true cost of bearing risk globally.

“The upward trend in catastrophe reinsurance pricing is driven by a new appreciation of risk,” says Hanratty.

“Price structures that adequately reflect the true cost of risk are in the long-term interests of primary insurers, policyholders and reinsurers.” Reinsurers might, she says, be prepared to absorb volatility in the short term, but eventually they must deliver an appropriate return on equity.

And, according to Hanratty, there are other drivers that look set to shape the world’s access to reinsurance capital, including inflation, low investment yields, heavy European sovereign debt write-offs and irrelevant regulations. “Regulation poses a threat,” she says. “Reinsurers generally support the drive for professionalism in their industry but a wider political drive to regulate the financial sector has implications for the insurance industry, including a more expensive operating environment and, therefore, more expensive products.”

The perfect storm of more frequent and devastating natural disasters, global financial dysfunction, economic stagnation in some developed countries, inept political leadership and less than wellcrafted risk assessment models might all be making life harder for the world’s reinsurers, but they know they must remain grounded in reality.

Times like these might bring a new appreciation for risk transfer products but that’s only half the story, says Hanratty. “The reinsurance industry is acutely aware that it must stay relevant to primary writers. Our role is to help the industry better manage volatility. There are always new risks and there will be a need to find new products and ways to structure risk.”

Those reassurances notwithstanding, reinsurers are scrambling to better understand the source, scale and scope of the risks they underwrite in order to set more realistic premiums.

They are also pushing more risk on to their insureds while simultaneously trying to attract more capital to the sector.

Product reform “Reinsurers are forcing us to carry more of the risk and charging us more for the cover,” says Lyon. “They are also looking for more granularity and transparency around data. They

John Lyon, Insurance Council president and Lumley CEO.

want a greater understanding of the risks they are carrying.”

New Zealand’s natural disaster-prone geography and its relatively tiny population make it, at least in reinsurers’ eyes, a more vulnerable and difficult investment market than they thought. Consequently, the insurance industry has little option but to hike premiums and reduce terms to secure the capacity it needs and maintain sustainable businesses.

Reinsurers provide the lion’s share of the world’s catastrophe insurance capacity. With the rapid escalation in global natural disasters the industry is under pressure to re-think its business model. There were 550 ‘events’ in 2011, including Christchurch, which cost the insurance industry US$105 billion. Not to mention the fact that the losses on each event get bigger every year.

The extent to which primary insurers rely on the world’s reinsurers is illustrated by what happened in Christchurch, where half the Darfield and 70 percent of the Lyttelton costs are being met by reinsurers.

“The smaller subsequent events in 2011 will place more losses on reinsurers as any remaining limits are exhausted at the primary insurer level. More than half the losses were reinsured,” according to Hanratty.

Capacity in the New Zealand market is therefore deeply reinsurance dependent.

That said, Vero’s New Zealand chief executive Gary Dransfield thinks fears about a withdrawal of major insurers and reinsurers from the New Zealand market are misplaced. “There is no doubt insurers are reassessing the risks and costs associated with providing earthquake insurance,” he adds. “They are doing that not because they want to withdraw, but because they want to build sustainable businesses for the long term.”

Capacity, accessibility and affordability are now, more than ever, recurring industry issues. And, according to Dransfield, the industry must find ways to ensure it has enough affordable capacity to create a sustainable earthquake insurance model in New Zealand.

All our major insurance companies are re-thinking their business models post the Christchurch earthquakes. Some have taken more radical action.

Ethical general insurer Ansvar has, for example, withdrawn from the market. The French governmentowned reinsurer CCR has stopped writing new business in New Zealand, Australia and Thailand.

Zurich no longer covers commercial properties south of Hamilton for natural disaster. “Our business model must be sustainable,” says Adrian Riminton, the company’s general manager. “There is less earthquake exposure north of Hamilton so we made the move to mitigate our risk.”

Zurich’s global reinsurance model is, on the other hand, different from most other insurers. The company retains a higher proportion of risk internally. “When times are good, we retain a larger share of the profit,” Riminton explains. “When they are not so good, we bear more of the brunt. The model works for us.”

Hanratty told her Auckland audience that some Lloyds’ syndicates are now reassessing their reinsurance participation in New Zealand and many reinsurers are reducing their Kiwi catastrophe limits.

But they are not, as yet, purchasing catastrophe bonds in the world’s capital markets to support underwriting specifically to this market.

Major insurers like Vero, QBE and Lumley say they are more focused on remodeling their products around the new rules of the reinsurance capacity game and a NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

15

MANAGING RISK & DISASTER PLANNING

better understanding of the natural events and risks that New Zealand is prone to.

“Insurers are putting more thought into their understanding of risk appetite and re-evaluating what risks they want to take on different scenarios,” says Lyon. “Some of them have withdrawn from the earthquake risk market while others are taking a more aggressive approach. Lumley operates at the more conservative end. We are not looking to withdraw but we are looking to be conservative on how we manage our exposures in earthquake-prone areas.”

“We must pitch our quality [of product and market understanding] to the reinsurers,” he adds. “We have to show that we are a good or better risk for them than are some of our competitors. That means showing them the quality of our underwriting approach, the discipline of our claims management and the quality of our data, systems and governance.”

“We are in an adjustment period,” says Vero’s Dransfield. “We must ensure we have the insurance capacity, the balance sheet strength and the market credibility required to steer us through this challenging period. There is a close relationship between the health of the New Zealand economy and the health of its industry sector.”

QBE, says Chapman, is happy with its future strategy.

“We have made a few refinements to what we have been doing but we are not looking to make major changes, such as reducing the areas of coverage that we offer. We will remain in the market.”

“We are involved in a long-term transition. I don’t think the reinsurance industry would support insurers like us if we slipped back into a kind of business-asbefore approach to insurance. The market needs to feel confident that New Zealand has embraced change long term and is more professional in how it markets its products and services,” he added.

Consensus The industry consensus is that New Zealand doesn’t yet have a capacity crisis, but it must confront some critically important issues to secure the future.

Reinsurers’ attitudes might, for example, harden further if another significant disaster struck. The country is considered vulnerable because so much of its commercial infrastructure is built on either earthquake-prone land, such as Wellington and Christchurch, or a nest of volcanoes, as in Auckland.

“In difficult areas, such as older buildings in Wellington, capacity may well not be available in the local market [and] brokers would need to have access to overseas or specialist markets to fulfill the client’s needs,” says Insurance Brokers Association of New Zealand CEO, Gary Young.

Industry leaders want more regular and meaningful dialogue with government, local governments, the banking sector, building code regulators, engineers and other natural disaster experts. Managing natural disaster risk for a country of four million people is challenging and solutions to how that is done won’t come from the insurance industry alone. They will, says Lyon, come from having a risk management strategy across insurers, banks, government and business, all of which play a part in finding solutions.

16

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

Vero NZ CEO, Gary Dransfield.

New Zealand’s collective risk management approach needs to be re-thought to ensure the country has the right building standards in place. “The issue then is to decide who pays for the building standards and what impact that has on existing properties,” he warns. “As yet there is little tangible evidence of any improvement in the level or intensity of dialogue across these parties.”

Dransfield thinks New Zealand’s insurance, banking and property industries should join government and regulator representatives to form a working party to revisit the country’s approach to earthquake insurance and recovery management. “It is impossible to fully protect New Zealand from earthquakes,” he says.

“However, more effective land zoning, town planning and building design can mitigate the impacts and reduce human and asset loss.”

In the meantime, natural disaster cover will become increasingly expensive and restricted, forcing the industry’s brokers to re-think their business approach.

Most insurance companies tend to agree that they’re unlikely, anytime soon, to get back to the price-based competition for market share that they deployed in the past.

That will inevitably impact working relationships between brokers and insurance providers and between brokers and their clients. Whether brokers relied on “cheap premiums and generous cover terms” to make sales, or whether insurance companies aided and abetted the strategy to buy market share, the strategy is now irrelevant.

Professional brokers The push now is for brokers to become professional client advisors, technically skilled in understanding risk, environmental and regulatory requirements. They will also need to work closely with clients to provide the cover funders like banks, will accept. And finally, with the escalating cost and restricted terms of cover, brokers will have to prove they can add value to their clients’ purchases.

“Brokers will take many lessons out of Christchurch.

Our professional indemnity exposures show that some brokers made mistakes along the way. Some brokers processes were more diligent than others. There will be

MANAGING RISK & DISASTER PLANNING

lessons about the adequacy of advice given to clients that many brokers will need to learn from.”

Zurich’s Riminton believes there will be an increased demand for “good brokers” with a high level of technical knowhow, those that advise rather than sell.

“Clients will need more than just the cheapest price.

They’ll need brokers who give the best advice on what a programme should look like and how it should be structured,” he says. “Brokers with good global networks into London markets for instance, might find themselves still with a good range of insurance options for their clients. They might be able to source capacity that others can’t.”

QBE’s Chapman agrees that brokers must become more professional and more advice-oriented than sales-oriented. “That will take a significant mindshift for some,” he cautions.

Industry future There is, according to Dransfield, a growing appreciation of the important role insurance plays in the economy. The industry’s future will, however, depend on the success its leaders have in transforming their businesses “so they are capable of not just adapting to continuous change – but also coping with unexpected, systemic shock”, he says. “We will need to ensure these transformations take global, and not just national, factors into account.

“The New Zealand insurance industry is underpinning the growth of the national economy through the massive inflow of claims money following the Canterbury earthquakes,” he says. “The value of insurance and its contribution to the economy needs to be better understood and recognised.”

Public awareness of the national economic importance of the insurance industry is also a prerequisite for any productive cross-sector dialogue according to Dransfield – as is a better understanding of the basic economics of insurance. “Ours is an odd business. Customers buy a product they hope they will never have to use. We sell a product without knowing its true cost to us.” To explain that, everyone in the business needs to be thoroughly professional and knowledgeable about what insurance delivered.

New Zealand catastrophe insurance cover capacity seems to be assured for now. But, as Lyon says, the reinsurance market is critical to this provision. “This is a critical period for New Zealand and the role of insurance in the economy has changed dramatically for the moment.”

“Normality, in terms of not having to deal with the rapid increases in reinsurance renewal rates, will return.

It is unclear when that will happen because we are still seeing escalation of claim costs from the original events. As long as those costs continue to escalate so the reinsurers will look to increase premiums,” he adds.

The view reinsurers take on risk in New Zealand will depend on factors such as the extent to which they recalibrate the models to give better risk insights.

Those insights will be based on better research on the frequency and return periods around major events in New Zealand that impact their thinking. And then finally, global financial market responses will dictate what the future brings.

The expert in WATER ENVIRONMENTS

Give us your hardest problem!  Consulting and software services  Strategic advice  Expert technical advice  Model build and use  Peer reviewing  Software platform advice  Innovative solutions  Future proofing investments  A specialist one-stop-shop for all modelling jobs

DHI Water & Environment Ltd Email: info.nz@dhigroup.com Auckland: 09 912 9638

Christchurch: 03 377 5403

www.dhigroup.com NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

17

FLOOD RECOVERY

The value of a few hard yards How New Zealand is supporting Australia’s flood recovery

Putting in the hard yards! Peter Tong, Group Manager, Surveying, MWH Global wading into the Larcom Creek to carry out a hydrographic survey to capture river bed profile, August 2012.

How many of us in leadership roles pine for our days in technical operations, when we’d go “on site” and practise what we were originally trained to do? As leaders, we become removed from the day-to-day, ‘coal face’ operations in our chosen fields. One of the challenges this presents lies in effectively managing our technical teams when technology may have advanced well beyond our practical knowledge.

Following the devastating floods in Australia in 2010 and 2011, the Transport Network Restoration Program (TNRP) was established in Central Queensland and the largest reconstruction effort in Queensland’s history took place. In the Fitzroy region alone, the work included the reconstruction of more than 700 kilometres of road across a network that covers 12,000 square kilometres (an area bigger than the North Island of New Zealand).

The priority was to reconstruct transport routes as quickly as possible to ensure Queensland’s key industries – including the tourism, agriculture and resource sectors – continue to operate throughout the state. As a result, a significant commitment of resources has been required to deliver the ongoing programme.

MWH Global is working with the Queensland Department of Transport and Main Roads to meet these strenuous demands. Survey teams from New Zealand have been working on the project, on a rotation basis, across 22 sites which requires survey of damaged structures and the surrounding river hydrology for urgent remedial action. Other work involves road corridor surveys for detailed pavement design and slip and subsidence sites for geotechnical assessment.

When the message came through in July 2012 that there was another large package of structures and river surveys urgently required, the staff were not immediately available, so I soon found myself stepping out from behind my desk, pulling on my boots and sunhat, and getting back on the front line.

18

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

It had been many years since I used a total station or Global Navigation Satellite System (GNSS) and I knew I would need basic operator training. My technical team relished teaching me a thing or two – however, the fundamentals of surveying hadn’t changed since the 1970s and I knew the client standards and specifications in detail. Although the original reasons for going were to ensure the new team was on the ground quickly and continued to meet the client’s deadlines – as well as for quality assurance and continuity – there proved to be far more benefits to getting my hands dirty.

The survey tasks had many technical, environmental and safety challenges, including the rugged terrain and temperatures, which were in excess of 40 degrees celsius. Poisonous snakes and spiders lurked in the undergrowth and the isolated site locations and long working weeks all added to the challenge. On top

Learning from Peter. The teams relish learning from Peter Tong as he shares with them his experiences of surveying.

Here is one team carrying out a GNSS survey at Dawson Highway. (From Left to Right: Peter McConnell and Nathan Berry, Survey Technicians, MWH Global.)

FLOOD RECOVERY

of this, there was the personal stress of being away from loved ones for weeks at a time. It was only when I experienced it all first-hand that I truly began to appreciate what my teams were continuously being confronted with.

Working alongside my teams also allowed me to test their knowledge and theories and have them question the processes and methodology used. In surveying, there are independent checks and redundancies built into processes and methodology, but it was clear that the theory behind some of these processes was not always clearly understood. It is all very well knowing how to operate a smart piece of technology, but it is essential that the fundamental survey principles behind it are grasped. Being in the thick of it gave me the opportunity to reinforce to my team some key theories and fundamental surveying “best practice”. At times this led to healthy debate, but it also proved to be hugely beneficial to staff development as well as the outcome of the project and its efficiency.

As an example, it became clear that increasing the field team from two to three survey staff improved efficiency and safety as expected. However, in addition, it also helped to share the decision-making responsibilities, which significantly reduced pressure on the team. I may not have so readily accepted the impact of this change had I not seen and experienced the reduced stress and benefits to team satisfaction first-hand.

As leaders, we sit in our offices, planning logistics and managing the field teams and resources; this is what we are paid to do. We make decisions and place certain expectations on our teams. You might receive good feedback and trust your experienced staff, but ask yourself: do you really have a complete grasp on what they are up against on a daily basis? Can leaders really manage effectively if they don’t know what their staff are facing?

The TNRP project has been hugely rewarding for MWH and its New Zealand survey teams; many physical, technical and logistical challenges have been successfully overcome. For me, an office-bound survey manager, the opportunity to get back out into the field and work with my staff has proved invaluable. The feel good factor of “doing the hard yards” alongside

Hard yards but a rewarding experience. Peter Tong, Group Manager, Surveying, MWH Global with one of his field teams. (From Left to Right: Peter McConnell, Survey Technician, Peter Tong, Group Manager, Surveying and Adrian Nordin, Survey Technician, MWH Global.)

them has further cemented the manager and employee relationship. As a result, this has reinforced the team dynamic and output.

The opportunity to share ideas and improve knowledge has been instrumental in the successful delivery of this project. Personally, I now have a greater understanding of how individuals in my team operate best, which will only continue to drive us forward.

For more information, please contact MWH Group Manager, Surveying, Peter Tong on +64 4 381 5704 or peter.a.tong@nz.mwhglobal.com.

PETER TONG, Group Manager, Surveying, MWH Global

Coming up in ➥ July:

• • •

Traffic Management Parks & Recreation Facilities Archives Management

• • • •

Stormwater Community Safety Renewable Energy Environmental

• • •

GIS mapping Conferences & conventions Environmental consulting

➥ August:

➥ September:

To feature in these…

Mucking in and one of the team. Peter McConnell, Survey Technician at MWH Global, having fun at Peter Tong’s expense as he carries out a road survey on the Dawson Highway, July 2012.

Please contact: Kim McIntosh email: kimm@mediaweb.co.nz ph: ddi 09 300 2679

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

19

PLANNING & RECOVERY

Insurance shortfalls flow into fire levies

Photo credit: thinkstock

BY BRETT WARWICK, CFO - New Zealand Fire Service

Sprinklers.

Like having a firefighter in every room.

For more information, visit

fire.org.nz

20

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

Recently, I was invited to address a group of councils about the effect their insurance arrangements had on the amount of levy that was paid to the New Zealand Fire Service. The councils in this region had made a commercial decision not to fully insure their assets, based upon advice from their brokers.

The councils wanted to understand the impact this would have on the amount of levy received by the Commission, and have a chance to discuss the move by other councils to join collective insurance schemes as a way to reduce their Fire Service levy payments.

These moves are obviously of great concern to the Fire Service. Almost all our income comes from the levy on insurance contracts, with no funding from consolidated revenue.

Most of the costs of the Fire Service are fixed – we can’t reduce stations or firefighter numbers when the money dries up. When levy receipts are down, this presents a serious challenge to the Fire Service to adjust its expenditure.

If someone is paying less than they owe, then eventually, someone else will have to pay more. In most cases, this will fall to individual home owners who have few options for minimising their levy contribution.

The Fire Service acknowledges that councils must make their own decisions about whether they insure all their assets, including whether they need to insure bridges and other structures that are not likely to catch fire.

However, it is worrying that a growing number of organisations, including councils, are adopting ways to deliberately minimise the amount of levy that is owed.

We are currently appealing a High Court ruling on the validity of these sorts of schemes. In our view, the Fire Service Act is quite clear and the levy is owed on the indemnity value of all insured assets, not an artificially created lower amount.

The Fire Service, with its 8,000 volunteers and 2,000 staff, provides an all-emergency response across the country. With over 70,000 incidents each year – more and more of these relating to natural disaster – we are a vital part of the same civil defence infrastructure as local authorities. In this way, we are close partners and rely heavily on each other to provide an integrated emergency response to ratepayers.

Territorial authorities have a long history of social responsibility and were once the providers of their local fire service. It’s time to consider whether you want to undermine this civic responsibility for public safety by shifting the liability for paying for it on to rate-paying householders?

Disruption to business as usual: Planning for events beyond natural disasters Several high profile disasters have thrust the need for business continuity plans into the forefront of the minds and schedules of New Zealand organisations.

However the types of business interruptions that are reported by the media – typically physical disasters including fires, floods and quakes – are only the tip of the iceberg.

The threat posed by a key staff member falling ill for an extended period of time, a backup server failing to engage, suppliers falling through, data being hacked or a product recall, all have the potential to make a severe impact on business as usual. These types of risks are often overlooked, or are dismissed as unimportant or unlikely, but the impact on your organisation could be just as far reaching as a traditional physical disaster.

Examining vulnerabilities within your organisation can provide a modicum of safety for your company in the event of a disruptive event. Risk from outside, like your supply chain, need also to be taken into account in providing a comprehensive picture, as significant disruption can occur if suppliers of essential services or products fail to deliver.

Determining how much risk your organisation is prepared to tolerate for disruptive events is vital to appropriately preparing your business continuity plans. The determination of a risk appetite by senior management and the board has a direct influence on the scale and scope of planning for business disruption.

A strong resilient workforce, equipped with the right skills and knowledge, is your key to ensuring business as usual, as soon as possible.

The Disruptive Event Management and Business Continuity Planning Conference, taking place in Wellington on the 29th and 30th August 2013,

Photo credit: thinkstock

PLANNING & RECOVERY

examines how you can determine the risk appetite of an organisation and the direct impact this has on the reach of business continuity planning. Moving away from traditional books and paper planning, this conference considers the need for strong organisational resilience and core staff capability in the face of disruptive events.

The event will include core presentations around: ISO 22301 Building organisational resilience Testing business continuity plans Hacking, data theft and malware Improving crisis communications Determining risk profiles and appetites Conferenz Ltd, the organisers behind this event, have included case studies and presentations from PwC, Victoria University of Wellington, Parliamentary Services, ACC, Unison Networks, Genesis Energy and more to uncover how business disruptions and threats are being planned for in New Zealand organisations.

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

21

WASTEWATER

Hamilton backs an effective solution for wastewater Originally built in 1975, the Pukete Wastewater Treatment Plant (Pukete WWTP) provided a basic level of treatment for the region. An upgrade in 2001, saw both secondary and tertiary levels of treatment added to the plant.

Since 2003, Pukete WWTP has operated two trains of mesophilic 2-stage sludge digesters, which – on a typical day – receive a flow of 177 m3 each and set the typical hydraulic residence time of the methane digester stage to about 10-12 days.

A challenge arises with the fact that, occasionally, the methane digesters operate close to their maximum capacity, imposing a possible risk of digester failure.

As a result of the expected treatment demands arising from predicted population growth, Hamilton City Council (HCC) sought a solution to allow a sludge treatment capacity increase at the Pukete WWTP without treatment plant interruption.

In July 2011, Downer NZ and CPG New Zealand Ltd (now Spiire New Zealand Ltd) presented HCC with a concept that allowed upgrades to be made to the treatment capacity of the existing methane digesters, without requiring the construction of new digester tanks.

Based on the successful Spiire designed treatment capacity upgrade of the Palmerston North City Council (PNCC) Totara Road treatment plant, the upgrade process adds three components to each digester tank; a ring main horizontal hydraulic mixing system, a shunt pump vertical hydraulic mixing system and, a recuperative digester

sludge thickening system. Furthermore, the work is carried out without interruption to current sludge treatment services.

The upgrade of both methane digester tanks is scheduled for completion in June 2014 and, based on current flow and load projections, it is expected that the installation will allow HCC to defer any decision about the construction of a third digester until the end of this decade.

Following a series of site investigations, iterative design processes and the determination of a guaranteed maximum price for the complete upgrade, this project is delivering a number of important benefits for Pukete WWTP and HCC. 1. Upgrade construction costs were less than the cost of a 3rd methane digester 2. Treatment capacity increase was more than what would be achieved through the addition of a 3rd methane digester 3. Digester operation flexibility was increased and final sludge dewatering was simplified 4. Digester sludge residence time and degradation efficiency were improved 5. The increased activity of bacteria in the methane digesters increased the resilience of the process towards shock load events While the design and operation of anaerobic digesters with recuperative thickening and return of the anaerobic sludge into the digester, is a relatively recent

development in the wastewater treatment industry, it allows costeffective solutions for digester treatment capacity increases.

Cost reductions for co-digestion of municipal sludge and industrial biosolids are being demonstrated and the fact that a reduction in construction costs and digester footprint are possible, means this technology is an optimim solution for wastewater treatment facilities.

Although a new name and brand, Spiire New Zealand has a strong history of delivering clever and practical solutions across Australia and New Zealand for over 60 years.

Spiire’s integrated consultancy expertise includes feasibility studies, option assessments, concept design and implementation, treatment plant commissioning, biological process optimisation and operation support.

Spiire’s water team has established a reputation for its experience in plant upgrade, retrofitting, energy recovery and optimisation, treatment of “difficult waste”, odour control, storm water harvesting, water management, water sensitive urban design, irrigation, water distribution and reticulation.

Civil Engineering Asset Management | Maintenance Management | Environment | Land Development Transport | Water Structural Engineering Analysis & Design (Etabs, Revit & Other) | Seismic Assessment | Value Engineering Safety Design | Damage Avoidance Technologies Surveying Advocacy | Asset Recording | GIS Data Collections | Laser Scanning | Lettable Area Survey Land & Building Subdivision

Auckland t 9 525 9770

22

New Plymouth t 6 759 5990

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

Wellington t 4 384 2029

Christchurch t 3 374 6515

Dunedin t 3 477 7133

spiire.co.nz

NZLG FOCUS

GST credits on compulsory land acquisitions: seize the opportunity!

BY REDMOND KIRWAN-JONES Tax Consultant – Tax Team In recent years, there has been some confusion as to the GST treatment of land compulsorily acquired under the Public Works Act (PWA) 1981. Specifically there has been confusion around whether the acquisition constitutes a “supply”, for the purposes of the Act, and whether the acquirer is entitled to a GST input tax credit.

Fortunately, Inland Revenue has issued a draft paper to clarify these issues and Tax Team have been helping clients to understand the ins and outs, as below.

Is compulsory acquisition a supply?

Given the forced nature of a compulsory acquisition, one might wonder whether this is a ‘supply’ under the GST Act. Confusion arises because a compulsory acquisition is different from a normal supply, such as purchasing stationery. Further, Inland Revenue questions whether the lack of “a [positive] act on the part of the supplier” means there is no supply.

While a lack of positive action aptly distinguishes a compulsory acquisition in a commercial sense, the Courts have never included an act on the part of the supplier as part of the definition of supply1.

The key features of the definition of supply are as follows: Consideration (e.g. money) provided in return for goods or services; and A direct connection between the items supplied and the consideration received The difficulty here relates to the second point.

important. When someone buys stationery there is obviously a connection between paying the money and receiving the goods. The purchaser wouldn’t receive the goods without paying the money and the seller wouldn’t receive the money without providing the goods.

Connection between compensation paid and land compulsorily acquired In the case of compulsory acquisitions, there is a direct connection between the acquisition of the land and the payment of compensation. Per Section 60(1) of the PWA, where land is acquired for any public works, “the owner shall be entitled to compensation”.

Therefore, there can be no acquisition without payment and no payment without an acquisition. This means there will, in fact, be a direct connection between supply and consideration.

Not a question of intention A direct connection does not require both parties to want the transaction to occur. We do not ask if there is a common desire to enter into the transaction – rather, we ask whether there was reciprocation in fact. Did the acquisition of the land in fact cause the payment to be made?

Sufficient connection between goods and payment In order for a taxable supply to exist there must be a direct connection between the payment of consideration (money) and the supply of goods or services. This means the payment must directly cause the land to be supplied or vice versa.

In most normal transactions this question won’t be

What does it all mean?

The definition of taxable supply does not require a “positive act” on the part of either party, nor is it a question of the parties’ intentions. Rather, there is a supply because of the direct connection between payment and the acquisition of land. As there is a supply, local authorities who have compulsorily acquired land can claim a GST input tax credit.

Importantly, the GST Act provides that whenever a GSTregistered purchaser buys second-hand goods from a non-GST-registered seller, the purchaser is entitled to a GST input tax credit. The GST Act includes land within the definition of second-hand goods, so your Council could be due GST refunds.

1 Although Inland Revenue correctly identifies that it is a feature of GST schemes in other Commonwealth countries. See Inland Revenue: “Questions We’ve Been Asked QWB0120” at paragraph 14.

TAX TEAM are tax risk management experts, specialising in the Local Government sector. www.taxteam.co.nz

We’re right there with you for practical solutions to local authority taxation issues Richard Toovey, Tax Director T 04 494 2394

Michelle Macdonald, Tax Director T 04 494 2393

Jeff Eaton, Tax Director T 04 494 2391

Phil Fisher, Tax Director T 04 494 2396

Level 6 44 Victoria Street PO Box 44 Wellington T +64 4 494 2390 F +64 4 494 2399 www.taxteam.co.nz

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

23

NZLG FOCUS

Photo credit: thinkstock

Shaking the money tree – the review of development contributions

BY LINDA O’REILLY, Partner, Brookfields Lawyers The development contributions regime that came in with the Local Government Act 2002 is currently under review by the government. A recent discussion paper, released by the Department of Internal Affairs, raises the possibility of severely curtailing or abolishing the use of development contributions as a funding mechanism.

Both the government and the development community have linked the need for the review to the high cost of housing, and the media have, by and large, uncritically joined in. This is based on two incontrovertible facts. One is that the cost of building a new dwelling in New Zealand is high in comparison to the income of those wanting to buy a home. The second is that development contributions do contribute to the cost of a new dwelling.

In fact, the paper states that development contributions account for 4 percent of the cost of a new 145m2 house in Auckland. When a developer sets about developing greenfields land or redeveloping brownfields land, he or she takes a bare commodity in finite supply and adds value to it that enables residential buildings to be erected. Part of that added value is the hard infrastructure within the development like roads and water reticulation, and part of it is the procurement of individual titles that can be sold and carry legal rights. The developer does this for a purpose. That purpose is not altruistic; it is to make a profit.

The developer adds up his or her costs – which may include development contributions – adds whatever percentage the market will stand, and sells at a profit.

In the meantime, the local authority has provided services that allow the development to occur and be integrated into the community in a way that allows eventual inhabitants to enjoy a reasonable level of service. These services include new or improved arterial roads, water and wastewater mains and treatment plants, reserves, libraries, recreational buildings and more. Somebody has to pay for these new or improved services.

The simple concept behind development contributions is that some or all of the cost of growth should be paid by those who give rise to that cost.

More often than not, growth within a district is a good thing. It tends to bring more jobs and more consumers so that business prospers, as well as providing the critical mass for the tennis club and the local theatre group to survive and thrive.

24

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

Few councils put the whole of the cost of growth on developers, but apportion whatever the community considers to be a fair share. In fact only around 2 percent of the operating income of all local authorities comes from development and financial contributions combined – although this still amounted to a hefty $142 million in 2011.

It is beginning to seem unlikely that development contributions are a major driver of housing costs.

Even so, that share of funding infrastructure has to come from somewhere. It was one of my colleagues who suggested the money tree, but I have not been able to find one and neither has local government.

There are alternatives. Distributing that cost across all ratepayers is often suggested. Yes, putting rates up. However, neither local nor central government politicians favour this. Further, there is no particular reason why an established householder, with perfectly adequate wastewater services paid for over a long period, should wish to contribute to new or improved services to meet the needs of an adjoining growth area.

Targeted rates to the occupants of new developments could pay for particular services, but the cost of finance would be higher – as would the overall cost – and the intergeneration equity would be difficult to achieve. It’s far better to build the cost into the price of land or new buildings, so that it becomes part of the value of the asset that can be traded in the future.

There is no doubt that the development contribution regime is difficult to get right. Development Contribution Policies (DCP) range in size from several volumes to a dozen pages and it’s not clear that the more complex are any fairer or more workable than the most simple. The application of any given DCP and the relevant provisions of the Local Government Act give rise to endless difficulties, although these have lessened over time.

The issues and solutions put forward in the paper are a useful starting point, and will hopefully give rise to thoughtful and useful submissions. But we best not throw the baby out with the bathwater. There are a limited number of funding sources available to local authorities, and development contributions have found widespread acceptance. They are not the driver of housing costs, and should not be discarded on that assumption.

LEGAL OPINION

Have building products contributed to leaky buildings?

BY SARAH MACKY, Partner, Heaney & Partners

Sadly, the leaky building saga is now continuing into its second decade. Over the last ten years, the understanding of building science and what was behind leaky building syndrome has grown however.

In the early years of leaky building claims, the focus of claimants tended to be upon establishing that developers, builders, contractors and councils were at fault because the building products used had not been installed correctly. Often, claimants and their experts would be able to establish that – in some way or another – a building product had not been installed in accordance with good trade practice or the manufacturers’ literature.

At this stage, no one was particularly focused on the building products themselves because, while in many cases innovative, the building products were also proprietary and often supported by comprehensive manufacturers’ literature and detailing. In many cases, they had been BRANZ appraised also, which further endorsed their appropriateness for use in constructing monolithic style buildings. Such appraisals assured developers, builders, contactors and councils that those products could be used to construct buildings that complied with the building code.

As the knowledge of the factors that contribute to leaky buildings has grown, the question that should be asked is, in fact, whether the building products themselves have significantly contributed to the existence of leaky building syndrome? If it can be proven that the products themselves were not fit for purpose, even if installed correctly, then there exists the potential for claims – of negligence, breach of the Fair

Trading Act, and negligent misrepresentation – against those product manufacturers.

For a claim of negligence, the claimant would need to argue that the product manufacturer owed the claimant a duty of care because the claimant is an owner of a building built with the product manufacturer’s products.

This duty would be couched in much the same way as the famous ‘snail in the ginger beer bottle’ case of Donaghue v Stevenson (1932) UK HL100. In that case, the manufacturer of the ginger beer owed the claimant a duty of care and was found to have breached that duty; it was foreseeable that the manufacturer’s failure to ensure that the ginger beer was safe to drink would lead to the claimant becoming ill. In a similar way, an owner of a leaky building could conceivably claim against a product manufacturer whose product allows moisture ingress, even when installed correctly.

In addition to negligence allegations, it would also be possible for a claimant to sue a product manufacturer according to the Fair Trading Act. A claim could be brought because the product manufacturer has engaged in conduct that is misleading or deceptive (or is likely to mislead or deceive), especially where the product manufacturer represented in its product literature that the use of the product would result in a building complying with the building code.

Similarly, a claim for negligent misrepresentation could be pursued, if the claimant establishes he or she relied on the statements made by the product manufacturer.

By comparison, councils can more easily bring negligent misrepresentation claims against product manufacturers, because typically council inspectors were aware of the product manufacturers’ details and literature and relied upon them when carrying out their duties.

Claims against product manufacturers could be the new wave of cases to come out of the leaky building saga and in fact, there are several cases before the courts at the moment. Such claims, and whether they will succeed, are yet to be tested – so watch this space.

HEANEY & PARTNERS BARRISTERS AND SOLICITORS

(09) 3030 100 Fax (09) 3677 009 Level 26, PwC Tower, 188 Quay Street, Auckland

Local & Regional Authority Liability Specialists We are a service organisation dedicated to achieving results for all of our clients.

Contact: David Heaney QC DDI (09) 367 7001, Susan Thodey DDI (09) 367 7002

PO BOX 105391 DX CP18503

www.heaneypartners.com

NEW ZEALAND LOCAL GOVERNMENT JUNE 2013

25

This smile is sustainable.

There are many good reasons to work with Abilities Group, like great results, competitive rates and our ongoing commitment to recycling and sustainability.

But most importantly, when you outsource to us, you’re giving someone a reason to feel proud and valued, and that’s something truly worth sustaining.

Talk to us about your outsourcing requirements 09 444 0611, or visit www.abilities.co.nz

Enriching the Lives of People With Disabilities.

Packaging PCB Assembly Recycling E-cycling Secure Document Destruction