Hague Kevin: Urgent Debates — Pike River Mine Disaster—Release of Report Government Response and Ministerial Resignation 
Text is incorporated into the Bound Volume 
Hague Kevin: Urgent Debates — Pike River Mine Disaster—Release of Report Government Response and Ministerial Resignation 
[Sitting date: 06 November 2012. Volume:685;Page:6278. Text is incorporated into the Bound Volume.] 
KEVIN HAGUE (Green) 
: 
 The very quotation that the Acting Minister of Labour Chris Finlayson has just used to conclude his remarks was the one I was intending to begin my speech with so thanks for the extra few seconds Minister. 
The Green Party welcomes the report from the royal commission on the Pike River disaster. We believe that all of the recommendations in the report deserve to be implemented in full and without delay and we offer to play our part in ensuring that that occurs. To that end I have offered our party’s willingness to collaborate and have suggested that a cross-party group to oversee the implementation of the recommendations would be a valuable way forward. 
 I want to look briefly at some of the historical context to this disaster against which we must view the recommendations—not in detail but in the broad strokes—because I do believe that the wave of ideology from the 1980s and 1990s that saw a belief in small government lies at the heart of this issue. That philosophy had at its heart the belief that individuals and firms acting out of self-interest and aggregated all together would actually represent the best outcomes for society as a whole. I believe that that ideology is fundamentally wrong and that it has been demonstrated to be wrong again and again most recently in the report received yesterday. 
Amongst this language of “unfettering” and “unshackling” that accompanied the 1980s and 1990s we saw the Health and Safety in Employment Act in 1992 reflecting actually the Robens report from 1972 in Great Britain which believed—appropriately I think—that employers ought to have greater responsibility for the safety of their workers. That was a good thing. But critically—and the commissioners in their report make this point—when New Zealand implemented that Act and that general direction rather than having a corresponding growth in standards regulations and codes of practice that would provide appropriate guidance for employers New Zealand did the reverse. The commissioners expressed some disbelief some astonishment that we did that. But what New Zealand did at that time was to strip away all of the regulations. So we were left with an Act that placed the onus on employers but with virtually no guidance whatsoever. The standard of course that the Act imposes is one of “where practicable”. That as the royal commission identifies and as we have discussed in the House over the last couple of years is one of the critical failures of the regulatory regime. 
In tandem with that failure of regulation we also saw a failure of enforcement and oversight with a mines inspectorate that had been built up in fact over centuries whittled away—decimated in fact first of all and then whittled away—to the point that when the Pike River disaster occurred we had just two mines inspectors who were trying to enforce the light-handed regulation in all of New Zealand’s mines and all of New Zealand’s quarries. 
The central problem that occurs is this. The whole economic theory is based on the rational choice model: individuals and firms will make choices to maximise their own self-interest and aggregating those together will produce the best results for society. In the theory of the firm—again a sort of fundamental tenet of economics—firms will act to maximise profit and they do that by increasing revenue and reducing costs. Health and safety costs significantly and generally does not bring in any revenue. What that means is that unless there is some constraint on the firm provided by the Government as regulator that requires compliance with mandatory standards then firms or at least some firms will take shortcuts. They will not do some of the things that could improve worker safety. And they will especially do that on what we call process safety risks. These are the risks that have a low frequency—so they do not happen very often—but when they happen they have an extremely high consequence. These are the very risks involved in the Pike River disaster. 
At Pike River we had a company that was short on cash and that was way behind in production. The evidence that is provided in the commissioners’ report is that the company started with good intentions but as it fell behind in its targets those good intentions went by the wayside and production was put ahead of safety. The company became unresponsive to repeated worker calls for improved safety mechanisms and became obstructive in fact to occupational health and safety. That reflects exactly what we would expect to see in that light-handed regulatory environment. All of this was able to occur because of the catastrophic failure of the Government as regulator. So the regulations were inadequate and included that “where practicable” standard. What that means of course is that a company that is well resourced can afford to do everything that we would expect of a company to ensure worker health and safety but a company like Pike River Coal which was behind in its production schedule and was cash-strapped will say: “We couldn’t afford to put in that second exit from the mine. It would not be practicable for us to do so.” 
The royal commission evidences the inspectors struggling with that standard and saying: “Well technically you”—the Pike River Coal company—“have complied with the regulation.” There were just those two inspectors who repeatedly called to their superiors for greater resources to be able to do their job and said it was not possible for them to do it; inspectors who were not trained in systems audit systems improvement in quality and safety; inspectors whose seniors knew nothing about mining; inspectors who were unclear how to interpret the standard. 
So contrary to what the Prime Minister has just said in the House in question time today but actually in agreement with what Minister Finlayson has just said in his contribution to this debate it is extremely clear that it is the failure of the regulatory regime of the Government as regulator—it is the failure of deregulation—that has led to a situation where this company Pike River Coal could take those catastrophic risks. Those are the risks that have led to these 29 deaths. So there is no question that deregulation is absolutely implicated in this disaster. 
I want to conclude by expressing my own view and I know the view of many of the Pike River families. It is one of relief in relation to this report the report of the royal commission because many of us sat through all of the evidence we heard the evidence and we believe that the commission has done a thorough and comprehensive job. It has not pulled its punches. It has made the right recommendations. We welcome the Government’s general support for those recommendations and we again offer our support and our cooperation in ensuring that all of those recommendations are implemented in full and immediately.