Document confirms Minister’s estimate of lives saved by seismic policy was fabricated

When Nick Smith, the Minister of Building and Housing, announced his new seismic strengthening policy proposals on 10 May 2015 he said that it would save 330 lives over the next 100 years. This contrasted starkly with the estimate of 24 lives saved in MBIE’s cost benefit analysis that was prepared as part of the 2012 review of seismic strengthening policy.

To get to the bottom of the difference EBSS asked, under the Official Information Act, for the documents that explained how the number was calculated.

After many delays the key document was finally received on 2 October 2015. It showed that the 335 lives saved was calculated as follows:

  • Deaths in earthquakes in New Zealand going back to 1841 were increased by the ratio of New Zealand’s 2014 population to the population at the time the earthquake occurred. For example the number of deaths in the Hawkes Bay earthquake was 261 and as New Zealand’s current population is about three times the 1931 level so the population adjusted deaths is 784.
  • These estimates are then adjusted upwards to account for population growth over the next 100 years.
  • It is then assumed, based on the earlier GNS science based analysis, that strengthening to 33% NBS will save 29 percent of those lives. This generates the 335 lives saved.

This ‘analysis’ is obvious nonsense. It assumes:

  • The current building stock in the relevant towns and cities is the same as when the earthquakes struck. For Christchurch the assumption is that the city will be rebuilt to the same standard as its 2010 building stock. A new, but still flawed CTV type building will be constructed. For Hawkes Bay it assumes that the Napier and Hastings were rebuilt to replicate the 1931 building stock.
  • The buildings that will accommodate population growth will have the same average characteristics of the building stocks at the time the various earthquakes occurred. This is not possible. Building codes preclude it.
  • If an earthquake that has caused deaths has occurred over the last 172 years in a particular location it will happen again over the next hundred years. If there has been no such historical earthquake then there is no risk of deaths. Earthquakes that cause large numbers of deaths occur very infrequently (in most locations every several thousand years), and even apparently long periods of historical time provides a poor guide to the likelihood that there will be an occurrence over the next hundred years. The only credible approach is an analysis based on geophysical evidence and modeling, which provides estimates of the probability that a large quake will occur. The 24 deaths estimate was based on this scientific approach.

In a response to an enquiry from the NBR the Minister’s office said  “the estimate was derived from modeling by an independent consultant”.  This may have left the impression that the model reflected the independent consultant’s judgement that the methodology was sound practice.  However the report states, “the model has been compiled based on instructions received from MBIE and financial information received from MBIE”. The model was MBIE’s, the consultants just did the math.

We cannot say whether the report was initiated by the Minister or by MBIE. Either way the motivation is clear.  The fact that the such an expensive and damaging seismic policy framework would have such a small effect on life safety weakened the case for its adoption, so the hunt was on for a number that would present a more compelling case, no matter how spurious the methodology.

The life saving number is clearly misleading but it was presented in the Cabinet paper and, though the Minister’s speech, to the people of New Zealand. We think that the Minister should retract his estimate and present his colleagues and New Zealand with the facts.

MBIE’s attempts at a cover-up are a serious concern.

In May EBSS asked MBIE, under the OIA, for the documents that would explain how the Minister’s number was calculated. The request was initially refused because it would be a  “contempt of the House of Representatives” (presumably  because it had something to do with the Select Committee’s proceedings), and after three months only some partially  relevant documents were provided. The key document  was missing.

We only obtained the document with the analysis by asking the Minister for it under the OIA. His response shows that the analysis paper was received by his Office from MBIE.  It is clear that MBIE did have the document, and we do not believe that MBIE forgot it existed, or misunderstood the request. They simply hid it. It is also clear that the contempt of the house of representatives  argument  was a complete nonsense.  The document never went near the Select Committee.

In a recent High Court decision on compliance with the OIA, Justice Collins said that one of the reasons he was making an order was that “the Act plays a significant role in New Zealand’s constitutional and democratic arrangements. It is essential the Act’s meaning and purpose is fully honored by those required to consider the release of official information.”

Hiding documents cuts to the heart of role the OIA plays in our constitutional and democratic arrangements because there is normally little defence against it. On this occasion we found out because the Minister did the right thing. He should be concerned that MBIE did not.

Minister’s press release of 10 May 2015:

Minister’s response to our OIA request: