Risk - the forgotten axis
Richard Westlake
Experienced Board Chair and Director - Trusted adviser to Chairs and CEOs - Authoritative governance consultant and trainer - Always open to an interesting new Board role, working with good people - Blogger
Almost every week another building, usually in Wellington, is evacuated because it’s deemed ‘Earthquake Prone’ and either covered in plastic sheeting or left to rot, while the hapless owners consider how they’ll afford the repairs and strengthening that the engineers have mandated. This week for a change it was the turn of the South Island’s largest high school Burnside High in Christchurch.
The Wellington City Council’s 2027 deadline for remediation is approaching fast and parts of our city resemble a rotting ghost town. Meanwhile, the Council continues pouring tens of millions of dollars into rebuilding the Town Hall that has been closed for a decade. The cumulative cost of all the required repairs runs into billions. There’s even a suggestion that the Council may demolish one of the city’s remaining quality venues, the iconic Michael Fowler Centre (MFC), in preference to yet more costly repairs.
All for what? The answer’s simple, you say: “People could die.”
Yes, of course they could, if a massive earthquake struck at exactly one of the few times each year when the MFC is full.
I do not subscribe to conspiracy theories, and I don’t believe there’s a deliberate co-ordinated strategy to impose this huge financial burden, not to mention mental stress, on property owners.
However, I do see an unfortunate alignment of interests:
Everyone concerned, except the blighted landlord, is incentivised to perpetuate the cycle.
Let’s look at a few other relevant facts.
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It’s easy to talk about the possible consequence, or impact, of a dramatic earthquake - similarly to how people think about the possibility of a catastrophic Airbus crash and the loss of hundreds of lives.
What we often ignore is the other ‘axis’ of risk - the likelihood or probability of the event. On most days, even those airlines with the world's worst safety records offload as many passengers safely at their destinations as they’ve welcomed at the start of their flights. (IATA’s 2022 report on passenger fatalities calculated that on average you’d need to take a flight every day for 25,214 years to experience a 100% fatal accident.)
Yet some people are still terrified of flying.
Isn’t it time we started to think of seismic risk in the same way:
New Zealand’s very strict building standards are designed to save lives, not property, and they’ve shown time and again that they do that. Perhaps it’s time to press ‘Pause’ on ‘Earthquake Prone’ and take a rational look at the real risks.
Then we could consider how many more lives could be saved by some rational spending decisions, and stimulate investment in this nation’s future, rather than continually patching up the past.
And, if I’m wrong, you can dig me out of the rubble and say, ‘Told you so.’
Practice Leader at BoardWorks
11 个月Richard Westlake thanks for raising this Richard. Time for a dose of reality and common sense. Gold plated zero risk solutions aren’t always the best option, let alone achievable. More sophisticated policy and decision making is needed.
open to work that brings excellent job satisfaction
11 个月Thanks for posting Richard. Our city is hamstrung and looks terrible. Is this because landowners can't afford to get the building up to code or demolish and rebuild? I agree with you many of us can't, especially with high commercial interest rates for loaning the money to pay for redevelopment.
Director at BartonRoss Ltd
11 个月This is a conversation has to be had, Richard. Thanks for your leadership here
Experienced Director / Board Chair & Project / Programme Lead & Advisor
11 个月Hi Richard - a topic which is close to my heart (and that won’t surprise you..). The Building Performance Group at MBIE published this guidance fairly recently which provides some useful context.. https://www.building.govt.nz/assets/Uploads/getting-started/seismic-risk-guidance-for-buildings.pdf
Pilgrim. But contact me if you have any organisational problem I could help solve.
11 个月I have a vague recollection from years ago that you said to me you would never own property in Wellington Richard, that you'd only rent. Perhaps I'm mistaken on that, but if true then you assessed the low risk as having a high personal consequence. Much like the low probability of a nuclear event, with a catastrophic consequence. But Wellington is sitting on a time bomb. The probability is actually 100% - the unknowns are how big, how bad and when. I love visiting, but I'd be fearful of living there. You didn't mention the Inangahua earthquake. Not many were killed but only because of its location. It was pretty big. But the biggest ones are still to come. The Christchurch earthquake rebuild was the perfect time to shift Government administration out of Wellington - to the west of the Christchurch airport. A lost opportunity to save some Wellington lives. The alternative to minimise Wellington lives lost is to build very resilient buildings. Most of the infrastructure will be destroyed.