The call for change at Infrastructure New Zealand’s recent Building Nations Symposium in Wellington was loud and clear. Poll after poll showed a hearty appetite for a major rethink of how councils are structured, funded and mandated.
In part two of this three-part series, we mull over a warning note from Elizabeth Longworth that our country must switch from building back infrastructure after an event – think earthquakes, storms and floods – to making it more resilient in the first place.
See part one: ‘Shaken and stirred: Infrastructure challenges provoke thirst for a cocktail of changes‘, where we look at the polls in more detail.
And part three: ‘Let councils write their own menus: Why Wellington would benefit‘, where we look at Wellington City Council CEO Kevin Lavery’s repeated call for a city deal that would give Wellington far more autonomy to create its own destiny.
Elizabeth Longworth has called for a “grand coalition” of stakeholders from across the country to collectively address our nation’s disaster risk. The former director of the United Nations Office for Disaster Risk Reduction (UNISDR) says New Zealand’s plight mirrors the global situation. “We are at a crossroads. Over the next 20 years, we will build more infrastructure than in the last 2000 years – locking in either risk or resilience for future generations.”
Speaking specifically about New Zealand, she said we will either be able to rise to the challenges threatening life as we know it, or be severely compromised as a country.
Elizabeth was addressing delegates at the recent Infrastructure New Zealand Building Nations Symposium 2017 in Wellington. She warned the 550 delegates that our country is generating new disaster risks faster and to a greater extent than we can reduce existing levels: “which means we are going backwards”.
She cites the obvious strain on the local community from closures of the Manawatu Gorge due to slips.
“Research by Giancarlo Hannan from Corporate Logistics claims that since 2004 it has cost $100 million in slip repairs over 13 years,” she says. “But he estimates that every day the gorge is closed costs the regional economy another $100,000.”
In fact the indirect costs of the ongoing closure could be considerably higher in terms of the disruption, lost opportunities, inefficiencies and adverse impacts on communities reliant on the Gorge.
The SH3 route is economically and strategically important, linking to a regional import and export hub between Palmerston North, the Wairarapa and the Hawkes Bay, and impacting the whole of the lower North Island.
Elizabeth notes that Ashhurst residents are concerned about the adverse impacts from the increase in traffic volume, and the wear and tear from resultant heavy traffic.
“In Woodville, businesses are failing due to the loss of customers. And there is significant pressure on road freight and logistics as a result of the closure of the gorge, including extra fuel and running costs.”
Elizabeth told symposium delegates that if we look at the wider economic and social implications of infrastructure decisions there is a strong rationale for ‘building smart’ in the first place. She argues that it is better to look at investing in resilience up front, rather than ‘building back better’ after the disaster event, which is often more costly.
New Zealand is heavily exposed to a wide range of natural hazards including earthquakes, tsunamis, severe flooding, cyclonic winds, tropical storms, storm surges, coastal erosion, king tides, landslides and instability, drought, wildfires and volcanic activity.
Flooding and drought are our most common hazards, carrying considerable direct and indirect economic loss.
Elizabeth acknowledged that trying to ensure a resilient future in the face of our country’s huge exposure to a wide range of natural hazards, “sometimes feels like trying to move mountains”.
But she said nation-building over the next 30 years will require us to address a series of extremely daunting challenges.
On a global scale, she said that unless there is significant investment in making cities more resilient, by 2030 natural disasters may cost cities worldwide $314 billion per year. This is up from $250 billion in 2016.
Elizabeth proposes an NZ-Inc approach that is systematic, coordinated and coherent to address what she calls the current unacceptable levels of accumulated disaster risk that may bring loss of life, injury, damaged assets, and lost livelihoods, services and capacities.
“We must put in place comprehensive disaster risk management measures to avoid generating new risk,” she says. “What we cannot manage – that is, the residual risk – has to be addressed through our level of emergency preparedness and recovery.”
Such an approach would necessitate the creation of a “grand coalition” that could include central government, regional and local bodies, local communities, business, media, grassroots advocates, science and technical communities, and investors.
According to Elizabeth, the major obstacle remains a collective failure on risk governance. Good risk governance is a major priority identified in the 2015 international agreement, the Sendai Framework, ratified by the United Nations and forming the blueprint for action by all countries, including New Zealand.
Risk governance refers to the system of institutions, mechanisms, policy and legal frameworks, and other arrangements, that guide, coordinate and oversee disaster risk reduction and related policy areas. The emphasis is on managing risk rather than managing the disaster.
“For New Zealand, it implies leadership, a shared vision for prevention of disaster losses, NZ-Inc strategies and policies, coordinated, coherent multi-stakeholder and multi-disciplinary effort; and accountability,” said Elizabeth.
She outlined 10 governance components that need to be addressed in order for New Zealand to shift its approach to disaster risk reduction.
Elizabeth proposed that our nation-building challenge, “to answer all those distressing projections over the next 30 years”, should be to aspire, commit and get organised for a whole-of-New Zealand push on reducing our accumulating disaster risk in the way we are building and developing our towns and infrastructure.
“We need to take a much more strategic and far-sighted approach to the natural hazard-threat facing our country,” she said, “and not treat the resulting human and economic disasters as ad hoc external events beyond our control.
“The hazard only turns into a disaster due to the decisions we have made – where to locate, how we build.
“We know what needs to be done. Let’s take a quantum leap in disaster risk governance, by exhibiting some ambition, laying down a vision, and taking determined and deliberative action on strengthening our disaster resilience.
“This is one mountain that is absolutely scalable.”
United Nations Office for Disaster Risk Reduction (UNISDR) research on the economics of disaster risk reduction has estimated that an annual global investment of US$6 billion in disaster risk management strategies could generate US$ 360 billion worth of economic benefits in terms of reducing risk. That is a 60:1 return on investment.
There are also many co-benefits, or opportunities to create shared value, as a focus on risk reduction can be used to attract investment, add functionality, and promote comparative advantage. As well as stimulating economic activity, a focus on preventing disaster losses develops sustainability.
Former UNISDR director Elizabeth Longworth says investment in resilience can also be incorporated into the normal project life cycle or maintenance cycle, such as in transport systems planning, engineering and design, asset management and contingency programming.
“The decisions on where and how to invest in resilient infrastructure are difficult. The expectation is for ‘robust decision-making’, as opposed to optimal design that anticipates all risks. But it is necessary to consider the consequences of failure, the cascading effects and the prioritisation.”
She adds that, globally, there is a great opportunity to up the game on resilient infrastructure as 60 percent of the areas expected to become urban by 2030 are yet to be built.
“And there is money – namely, US$106 trillion in private institutional capital (pension and sovereign wealth funds) available worldwide for investment. Yet only 1.6 percent is invested in infrastructure at all, let alone in making it resilient.”
She says the projected global need for urban infrastructure investment amounts to less than US$4.5 trillion per annum, of which an estimated premium of nine to 27 percent would be required to make this infrastructure low carbon and climate resilient.
“So, there is plenty of economic justification for New Zealand to reconfigure its approach to preventing disaster loss and damage by treating resilience as a strategically important investment.”
A framework for change
Ten governance components that need to be addressed for New Zealand to rework its approach to disaster risk reduction:
- Visible and proactive leadership – political will is crucial, requiring Prime Minister and Cabinet support; a national vision and strategic objectives that speak to all the stakeholders; and the advocacy of high level champions
- Foundation principles – where risk reduction must be tackled through an inclusive and multi stakeholder approach; a whole-of-government engagement with attention to planning, development and investment mandates; emphasis on transparency and accountability through accessible risk information and the costs and benefits of disaster risk being made apparent in all public and private investment decisions
- A unifying national strategy – develop a robust, coherent and unifying national strategy that interfaces with local and sectoral strategies and plans
- A coherent policy framework – ensure an overarching policy to address gaps and inconsistencies and serve as guidance and an integrator
- Legislation – review existing laws for their gaps and give force to a comprehensive legal base for risk reduction
- Institutions – map institutional responsibilities and engage the many organisations with a role to play
- Financing – support risk assessment that looks beyond costs to the economic value of investing in risk reduction; develop a coordinated and supported national portfolio of funding mechanisms
- Coordination mechanisms – establish a country-wide coordinating forum, known as a national platform, comprising key stakeholders (including local bodies and business) and empowered to coordinate and report
- Monitoring and reporting – establish a systematic data collection programme, with a reporting system
- Oversight – ensure oversight, such as an annual report to parliament on national risk status; all investment decision-making to become risk-informed and risk-sensitive; mandatory risk assessment when spending public resources.
This article was first published in the December 2017 issue of NZ Local Government Magazine.