Seymour David: Building (Earthquake-prone Buildings) Amendment Bill — In CommitteeText is incorporated into the Bound VolumeSeymour David: Building (Earthquake-prone Buildings) Amendment Bill — In Committee[Sitting date: 30 March 2016. Volume:712;Page:10050. Text is incorporated into the Bound Volume.]DAVID SEYMOUR (Leader—ACT): I was waiting to say “Aye” Mr Chair. Can I make two opening remarks about this bill. One is that as many people have said throughout the passage of this bill it is very important to honour the victims of the Canterbury earthquakes and that is foremost in my mind too. I believe that the best way to do that is to make sound public policy and actually enable New Zealanders to protect themselves against all the risks that they face. That is very much the intention of the two Supplementary Order Papers—Supplementary Order Papers 152 and 156—that I have on the Table today.I will run through those Supplementary Order Papers but first I have one other observation about the passage of the bill to this point. The Minister for Building and Housing in the select committee process was pushed back very very hard and as he said in the second reading he was surprised despite having a PhD in civil engineering to learn that earthquake risk varies around New Zealand. I found that unusual but it explains a lot about how the bill got to this point.Having accepted that there is a variation in earthquake risk around New Zealand I think it is appropriate that we consider going one step further because by having low-risk regions such as Auckland such as Northland such as Ōāmaru and such as Dunedin included what we are saying is that even though your chance of being in a severe earthquake in Auckland for instance is one in 110000 years you must consider the possibility of earthquake damage to your buildings being a risk and you must be prepared to spend $10000 to $20000—according to the regulatory impact statement—to work out whether or not a particular building is in danger. The estimates in this second version of the bill are that rather than 700000 buildings being potentially in need of assessment only 30000 buildings will need to be assessed but that still gives you anywhere from $300 million to $600 million of cost in assessment alone assuming that one already knows that the buildings being assessed are in that 30000 which of course one would not know because the purpose of assessing them is to find out. So we are talking about hundreds and hundreds of millions of dollars in building assessment costs.I would put it to the Committee that we can say that in the case of Auckland Northland Ōāmaru and Dunedin where the risk has been assessed by GNS Science to be so low that there is as little as a one-in-110000-year chance of having a severe earthquake that money is throwing good money after bad. There are so many other risks that New Zealanders would like to protect themselves against that it is almost impossible to conceive that that is a good use of half a billion - odd dollars or at least the $200 million that we might expect to be spent in the one-third of the country—Phil Twyford: Over 50 years though.DAVID SEYMOUR:—that has been assessed as being low risk. And Mr Twyford is quite correct.In addition to introducing a new set of risk categories what the Minister has done is further trivialise the costs or at least the perceived precautions taken against risk in those regions by saying: “Don’t worry. The cost will be lower because you will have 50 years and potentially 65 in the case of a heritage building to assess whether or not the building is truly at risk.” The Minister cannot eat his cake and have it too. He cannot say that the danger is great enough that private property owners will be forced to spend between $10000 to $20000 finding out whether they are at risk in the first place on the one hand but also that the risk is so small that they need not concern themselves with mitigating against it for up to 65 years.The fact is that New Zealanders face a very wide range of risks in their lives. If I could just give three examples of the types of risks that Aucklanders or Northlanders like myself face the chance of dying of cancer in New Zealand in any given year is one in 500 and as we know there is a lively debate in New Zealand at the moment about how much of our community’s resource should be going into mitigating against that risk. The chance of dying in a car crash in New Zealand in any given year is one in 10000 and we spend a lot of time in this country trying to mitigate against that risk with a whole variety of measures including spending a lot of money trying to make roads safer. And the chance of being caught in a severe earthquake—not even the chance of dying but just the chance of being in one—multiplied by the chance of being in a particular building and multiplied by the chance of it being severe enough to hurt you is such an infinitesimal risk that we would be far better to exempt these regions from being forced to spend a large amount of money mitigating against it.I would add that it is not only that they will be forced to spend money on assessment but also that buildings will be stigmatised by having to have notifications that the building is unsafe. It will take some time for that information to percolate through the community and for a time it will undermine property values and damage people’s livelihood which is another distortion and another reason to exempt those regions given the very small risk which the Minister has acknowledged by creating new categories and by saying that you have up to 65 years to adapt the building in any case.The second Supplementary Order Paper that I have on the Table is somewhat more sophisticated and I believe possibly more important because it affects the whole country. If one talks to structural engineers and I have spoken to some of the experts in the field on this topic they will tell you that when a new building standard is calculated for a particular building of course engineers—a profession with which I myself have some considerable sympathy—take into account the factors of the occupancy likelihood or the chance of somebody being in a building at a particular time; the location and the probability of a severe earthquake in that area; and of course the type of building and its structural characteristics to try to work out what the new building standard should be in respect of earthquake risk. There is also considerable debate and dispute about whether or not the extent to which those differences are allowed for truly reflects the extent of differing risk to life in different buildings. Some will claim that in actual fact the Z factors of adjustment that are cited in the bill are insufficiently reflecting the true difference in risk.The simple way to resolve that dispute from the point of view of this Committee is to take the advice of GNS Science and actually follow the principle that the law should be accessible to the citizenry. So if we believe that it is the intention by having a new building standard to take into account the probability of a serious earthquake in a given area the probability of a particular building being occupied at a particular time and the probability of a building of that type collapsing and doing damage then what one needs to do is spell that out in the law.So my Supplementary Order Paper 156 inserts new section 133ABC which introduces the concepts of earthquake life risk into legislation. What that would mean is that buildings that do not wish to comply with the regime of new building standard—which I regard as a blanket approach right across the country and therefore inappropriate—will have the option of demonstrating that the risk associated with a particular building given its location its structural characteristics and its occupancy characteristics will actually be able to calculate the real earthquake risk to life in a way that is comparable with other risks. [Bell rung] Mr Chair.The CHAIRPERSON (Hon Trevor Mallard): It is normally the case to give a member only two calls. Seeing as the member has an amendment I am just going to ask Mr Foster-Bell to wait a minute and let Mr Seymour finish.DAVID SEYMOUR: Thank you Mr Chair and these are quite technical matters so I appreciate being given the time to be able to explain as much as I can of them.So the idea is to introduce the concepts of life risk for a particular building. Going back to my initial remarks about paying tribute to the victims of the Canterbury earthquakes by making public policy that is human what this allows us to do is empower the people of New Zealand to make decisions about what sort of risk is tolerable in the case of a particular building to calculate that risk based on the real probability of life being lost and to actually compare that with other risks and other threats and other resource destinations if you like that New Zealanders have as they try to grow and prosper and live their lives.I suspect based on the feedback that I have had from the Minister that he will be unlikely to take on this particular Supplementary Order Paper and that his party will not support it. I think that that is a great shame. But I hope pyrrhic as it may be that other parties will come along and support these amendments for the simple reason that the best way to pay tribute to the victims of the Canterbury earthquake is to make good public policy to say that the transaction costs of establishing whether or not a particular building is an earthquake-prone building under the currently proposed regime are excessive for the risk that is faced in Northland in Auckland in Ōāmaru and in Dunedin and to say that if it is the intention of this House that people will actually be able to compare the risks that they face in different areas then we should actually put that in the law and make it accessible to the people whom we are supposed to represent who should be able to read that law.There were a couple of questions raised by the Labour members that I thought were very good questions which I will try to address in the remaining minute or two of this call. I think it was Phil Twyford who asked what would happen with a high level of variability of occupancy in a particular building. Well Mr Twyford I think the only way to answer that is to assume that any legislative proposal must be given strength by the regulations put in place. You can only hope that the regulations the Minister would put in place if he was forced to regulate on the basis of this legislation would allow at the very least for an annual cycle and not cherry-pick a particular part of the year—that would clearly not be in the spirit of the legislation—and as the other Labour member Poto Williams pointed out they would actually allow for liability to self-report whether or not the occupancy rates given at one time continued to be viable because otherwise that would be a breach of the law. I believe the law as it is written does allow for that possibility presuming that it is going to be enforced and adhered to by the parties to it.Poto Williams’ question about the building in Christchurch—I think it was the Hotel Grand Chancellor and I remember seeing it teetering in Christchurch before it was destroyed. She asked what would be the impact on neighbouring buildings and how the potential impact on neighbouring buildings would be assessed.I can only assume that if we are going to legislate that the risk of a particular building given its structural characteristics is going to be considered then you would have to have a consideration of the neighbouring environment and what other buildings might do to that building. So you are back where we started with the law of neighbourly relations which is that if you are going to impose that sort of danger upon your neighbours then that is going to be a cost to them and they are not going to be too happy with you. So I believe that although I did not anticipate that objectionin the drafting of this Supplementary Order Paper I think it is a very good one. I would think that within the Supplementary Order Paper as currently drafted it would be considered in the interactions between neighbours as it is now. I am quite happy to have that challenge.