'Outstanding' EQC boss Ian Simpson quits
Outgoing EQC chief executive Ian Simpson would admit some things "could have been done better" during his tenure, his boss says.
Earthquake Commission (EQC) chairman Sir Maarten Wevers is standing by Simpson, though, declaring his leadership through the response to the 2010 and 2011 Canterbury earthquakes "outstanding".
Simpson, who was paid more than $450,000 a year, will leave the organisation at the end of the year to take a job as chief executive of GNS Science.
EQC has been dogged by criticism of its performance since the earthquakes. Problems included shoddy home repairs, claim delays, expensive litigation, repair standards, nepotism allegations and the vulnerable and elderly still waiting on repairs despite promises to prioritise them.
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Wevers said Simpson – who is overseas and cannot be reached – deserved credit for guiding EQC through an unprecedented disaster response.
"It wasn't really what he signed up for ... He came in with 22 people [in what] was really a funds investment organisation, but he's stuck the path."
'SOME THINGS WE DROPPED THE BALL'
Some of the media criticism of EQC and Simpson had been "very unfair", Wevers said.
"We certainly had a lot of challenges. Ian would, just like the rest of the board, admit quite freely that things could have been done better. But we've had an enormous focus on improvement as we go.
"I'm not denying the criticism for a moment. Some of the things we've dropped the ball. We had a significant privacy breach because our systems weren't robust enough. We [Fletcher EQR] have recruited contractors who've proved not to be up to scratch. Of course there have been issues. We've had challenges with information flows and files going to the wrong people."
Under Simpson's stewardship, EQC has closed almost all home and contents claims for earthquake damage. Both have completion rates of more than 99 per cent. Eighty-four per cent of land claims are closed. Simpson could take credit for that, Wevers said.
"Reinsurance has been absolutely essential to EQC's ability to fund the repair programme.
"His ability to retain the confidence of the international reinsurers, which he's negotiated personally to ensure the ongoing and affordable supply of reinsurance, to keep the whole ship afloat has been fantastic."
CALL FOR INDEPENDENT INQUIRY INTO EQC
Labour Canterbury spokeswoman Megan Woods said many people had been "incredibly frustrated by the mess at EQC over the last few years".
"Ultimately the minister needs to take responsibility for what has happened. We wish Ian Simpson well with his new career.
"With a new chief executive coming on board it would be timely for the minister to launch an independent inquiry into EQC."
Under Simpson's leadership, the number of EQC staff grew from 22 before the September 4, 2010 to 1275 by mid-2011. As of August this year, the organisation had 868 staff.
The Fletcher EQR-managed Canterbury home repair programme was set up in response to the thousands of homes needing earthquake repairs.
Simpson announced in August this year that EQC would cut 242 jobs in Christchurch because it was "approaching the final point" of its Canterbury earthquake work.
By the end of 2016, EQC will have cash settled 99,000 residential claims and managed 67,900 repairs.
- EQC contractors botched thousands of home earthquake repairs. In January 2016, EQC said it had about 5,500 homes to fix again. That figure has climbed since. EQC was a third through fixing the botched repairs by May this year.
- Foundation repairs, including "jack and packs", came under particular scrutiny. The Government checked repairs on 14 houses in 2014 and found poor workmanship as well as quality and building code compliance issues in 13 of them, sparking a broader Ministry of Business and Employment (MBIE) investigation into earthquake repairs.
- In August 2015, EQC and its project manager, Fletcher EQR, said it would recheck and where necessary fix unconsented repairs after an MBIE survey of 90 unconsented structural repairs, most of them managed by EQC, found 32 were non-compliant with the Building Code. Critics called the survey a "snow job", because homeowners who had complained about their repairs were excluded.
- Many elderly and vulnerable have waited years for home repairs, despite being deemed a high priority by EQC. In 2014, then-Earthquake Recovery Minister Gerry Brownlee asked for a "please explain", but today nearly 200 cases considered vulnerable have not been resolved.
- In 2011, EQC faced allegations of nepotism. It was revealed that the sons and daughters of some senior EQC staff had been hired as assessors and paid between $60 and $110 an hour. They included Zac Stiven, son of then-EQC Canterbury events manager Reid Stiven, who was employed as an assessor when he was 18 or 19. The same year EQC hired staff without interviews, raising more questions about its recruitment process.
- EQC painted some media as the enemy. At a 2012 meeting, EQC staff in Christchurch were shown a presentation that accused some of the media of "dirty tactics" and relying on "rumours" to write negative stories about EQC. It featured photos of Press journalists they called unprofessional, schizophrenic and rogue.
- In August 2012, disgruntled technical category 3 residents picketed the Christchurch EQC and insurer IAG offices saying their homes were a health risk and asking for the organisations to "fix the worst first". The protests have continued. In February this year, hundreds protested in Cathedral Square about their outstanding EQC and insurance claims.
- There was the 2013 privacy breach, where EQC accidentally released the private information of 83,000 claimants.
- EQC has spent millions on litigation. By November last year, more than 270 legal cases had been brought against EQC since the Canterbury earthquakes. In April, EQC settled with the EQC Action Group, confirming its legal obligation to repair damaged homes to a 'when new' rather than pre-earthquake condition. Claimants said EQC had "admitted they were wrong", but EQC said the declaration reaffirmed its position.
SIMPSON FACED 'EXTRAORDINARY' CIRCUMSTANCES
EQC Minister Gerry Brownlee said Simpson "should be commended for his leadership during unprecedented times in the nation's history".
"He has superintended one of the biggest insurance company responses to any natural disaster anywhere in the world.
"I am grateful to him for the dedication and commitment he has shown over the past six years, despite considerable, but equally undue, criticism.
"From my perspective, Ian should be very proud of, and congratulated for, his leadership through extraordinary – and I hope never-to-be-repeated – times in New Zealand."
Wevers said the search for a replacement EQC chief executive would begin shortly.