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New Zealand: NGO files complaints under OECD guidelines against construction & insurance companies, alleges housing & health abuses due to inadequate response after 2010 earthquake

New_Zealand_Christchurch_earthquake_photo_credit_sampspeak

In September 2010, the Canterbury earthquake struck the South Island of New Zealand with a magnitude of 7.1. The aftershock was centred close to the city of Christchurch, and resulted in the deaths 185 people as well as in widespread damage to houses and other properties. In the years following the eartquakes, Canterbury residents filed over 70 individual complaints, with the common allegations being the failure of insurance companies to resolve claims more than three years after the earthquakes, and construction firms not starting, completing or inadequately repairing earthquake damaged homes. Residents also founded the Wider Earthquake Community Action Network (WeCAN) to file human rights claims under the OECD guidelines against five insurance and construction companies operating in Canterbury. According to Steve Patterson who is leading the litigation on behalf of WeCAN, the claims aim "to hold companies accountable for their conduct or complicity, in causing, exacerbating or contributing to human rights violations in the Canterbury rebuild". The claims allege that the inadequate response by those companies are contributing to the violations of residents' rights to health and adequate housing. WeCAN also filed OECD compliants against two government entities dealing with eartquake reconstruction, but OECD New Zealand ruled that such claims cannot be considered under its guidelines, because they are state entities.

We invited the following companies to respond to the allegations filed under the OECD guidelines: 

  • Arrow International Group responded  
  • Fletcher Construction responded
  • IAG New Zealand did not respond
  • Tower Insurance responded
  • Vero Insurance New Zealand did not respond 

We also invited the following government entities to respond: 

  • Earthquake Commission responded 
  • Southern Response Eartquake Services did not respond
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All components of this story

Company response
22 July 2014

Arrow International Group responded

Author: Arrow International Group

Arrow is very mindful of the human tragedy that has and is unfolding in Christchurch. The delay in settlement of policy holders claims is frustrating for all. The reasons for this delay are numerous and we can respond to the issues raised in a separate correspondence... [Arrow] confirm[s] receipt of the complaint against Arrow International concerning violation of human rights in Christchurch New Zealand. [Arrow] confirm[s] that we will investigate the issues presented in this complaint and respond at our earliest convenience. Please note that this is confirmation of the letter dated 17th June, however we have not at this point in time, received appendices A to D inclusive. Arrow International is committed to the expeditious recovery of the Canterbury community following the earthquakes of 2010 and 2011.

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22 July 2014

Earthquake Commission responded

EQC is a New Zealand Crown Entity. It operates solely within New Zealand under the aegis of Earthquake Commission Act 1993. This is a specific statute with objectives which include operating a natural disaster insurance scheme which has resulted in coverage for more than 90 percent of residential properties within New Zealand. Prior to the Canterbury earthquakes that began in September 2010, EQC was largely regarded as a financial services organisation that managed a $6 billion investment fund and a global reinsurance programme. The sequence of earthquakes from September 2010 through February 2011, June 2011 and December 2011 combined to be one of the most costly natural disaster insurance events ever. From the Canterbury sequence, EQC received 470,000 claims which, when split into land, building and contents exposures, equated to approximately 756,000 claims which is comparable to Hurricane Katrina, the largest insurance event ever worldwide. After the September 2010 earthquake, it was realised that scale of damage was such that cash settling claims to 150,000 households at that time could have a severe impact on the local community if payments went to purposes other than repairing houses to an appropriate standard. It was clear from a Government perspective that an organised repair programme was required rather than EQC just sending cheques to the owners of damaged homes. The management of the home repair programme fell into the hands of EQC which set objectives of maintaining a satisfactory housing stock in Canterbury and contributing to the retention of skills and people in the region. The Canterbury Home Repair Programme has become one of the largest and most complex construction projects in New Zealand’s history. With 57,000 full repairs completed, 47,000 emergency repairs, and the installation of nearly 19,000 replacement heating sources, there has been no significant exodus of residents, and the objectives have been largely achieved. To date, EQC has expended $7.5 billion (including goods and services tax) out of an estimated total cost of $12 billion and 13,000 full repairs remain with the end of 2014 the target for completion. It is a stretch target and if it becomes necessary to continue repairs into early 2015, EQC will do that.

Company non-response
22 July 2014

IAG New Zealand did not respond

IAG New Zealand did not respond to allegation filed under OECD complaint.

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22 July 2014

OECD complaint against Arrow International

Author: OECD Watch

"WeCAN vs. Arrow International", 17 June 2014

Current status: Filed - Issue: Damaged homes after 2010 and 2011 earthquakes in New-Zealand - Summary of the case: Concern the adequacy of the ongoing repair of homes damaged in the 2010 and 2011 Canterbury earthquakes. - Allege that the above company have not followed the OECD Guidelines for multi nationals, and in consequence, have caused or exacerbated peoples physical and mental health, and housing situation, in violation of their Human Rights. Allege violations include: Right to highest attainable health arts 11(1) and adequate housing art12 of the International Covenant on Economic, Social and Cultural Rights and; Prohibition against degrading treatment under Article 7 of the International Covenant on Civil and Political Rights. Right to property under Article 17 of the Universal Declaration of Human Rights. - Developments/Outcome: Commencing 4 September 2010, 4 major earthquakes, along with an estimated 13,000 aftershocks, have had a devastating impact on the people of Canterbury region, including New Zealands second largest city, Christchurch. The earthquake resulted in 185 deaths and injured 11,432 with total estimated rebuilding costs equivalent to 20% of New Zealands GDP. Inadequate, incomplete, or non-started house repairs has meant for many people, a 4thrd winter living in a broken home, in a sub alpine climate, and with consequential negative physical and mental health outcomes.

Read the full post here

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22 July 2014

OECD complaint against Earthquake Commission

Author: OECD Watch

"WeCAN vs. Earthquake Commission (EQC)", 11 Nov 2013

Current status Rejected - Issue Damaged homes after 2011 earthquakes in New-Zealand - Summary of the case In September 2010, four major earthquakes and an estimated 13,000 aftershocks devastated the Canterbury region, which includes New Zealands second largest city, Christchurch. The earthquakes resulted in 185 deaths and injured 11,432 people. Multiple complainants have alleged that the Earthquake Commission, Southern Response, AIG New Zealand, Tower Insurance, and Vero Insurances failure to resolve insurance claims more than three years after the earthquakes has violated their rights to health and adequate housing in accordance with the International Covenant on Economic, Social, and Cultural Rights. Multiple complainants have also alleged that Fletcher Construction has not started repairs, not completed repairs, or has inadequately repaired earthquake-damaged homes and has thus violated their rights to health and adequate housing as well. Developments/Outcome The NCP rejected the complaint against the Earthquake Commission by arguing it is not a multinational enterprise or for-profit entity (using an interpretation/reasoning different than the Korean NCP in the Dae Kwang case above). The NCP also rejected the Southern Response case by arguing it only competes in NZs domestic market (yet another interpretation of MNE). WeCAN challenged the NCPs decision in a 24 March submission. The NCP has requested more information about the other cases, which it has acknowledged are subject to the Guidelines. WeCAN is currently compiling the requested evidence.

Read the full post here

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22 July 2014

OECD complaint against Fletcher Construction

Author: OECD Watch

"WeCAN vs. Fletcher Construction Company Limited", 11 Nov 2013

Current status Filed - Issue Damaged homes after 2011 earthquakes in New-Zealand - Summary of the case In September 2010, four major earthquakes and an estimated 13,000 aftershocks devastated the Canterbury region, which includes New Zealands second largest city, Christchurch. The earthquakes resulted in 185 deaths and injured 11,432 people. - Multiple complainants have alleged that the Earthquake Commission, Southern Response, AIG New Zealand, Tower Insurance, and Vero Insurances failure to resolve insurance claims more than three years after the earthquakes has violated their rights to health and adequate housing in accordance with the International Covenant on Economic, Social, and Cultural Rights. Multiple complainants have also alleged that Fletcher Construction has not started repairs, not completed repairs, or has inadequately repaired earthquake-damaged homes and has thus violated their rights to health and adequate housing as well. Developments/Outcome The NCP rejected the complaint against the Earthquake Commission by arguing it is not a multinational enterprise or for-profit entity (using an interpretation/reasoning different than the Korean NCP in the Dae Kwang case above). The NCP also rejected the Southern Response case by arguing it only competes in NZs domestic market (yet another interpretation of MNE). WeCAN challenged the NCPs decision in a 24 March submission. The NCP has requested more information about the other cases, which it has acknowledged are subject to the Guidelines. WeCAN is currently compiling the requested evidence.

Read the full post here

Item
22 July 2014

OECD complaint against IAG New Zealand

Author: OECD Watch

"WeCAN vs. IAG New Zealand Limited", 11 November 2013

Current status Filed -  Issue Damaged homes after 2011 earthquakes in New-Zealand - Summary of the case In September 2010, four major earthquakes and an estimated 13,000 aftershocks devastated the Canterbury region, which includes New Zealands second largest city, Christchurch. The earthquakes resulted in 185 deaths and injured 11,432 people. Multiple complainants have alleged that the Earthquake Commission, Southern Response, IAG New Zealand Limited, Tower Insurance, and Vero Insurances failure to resolve insurance claims more than three years after the earthquakes has violated their rights to health and adequate housing in accordance with the International Covenant on Economic, Social, and Cultural Rights. Multiple complainants have also alleged that Fletcher Construction has not started repairs, not completed repairs, or has inadequately repaired earthquake-damaged homes and has thus violated their rights to health and adequate housing as well. - Developments/Outcome The NCP rejected the complaint against the Earthquake Commission by arguing it is not a multinational enterprise or for-profit entity (using an interpretation/reasoning different than the Korean NCP in the Dae Kwang case above). The NCP also rejected the Southern Response case by arguing it only competes in NZs domestic market (yet another interpretation of MNE). WeCAN challenged the NCPs decision in a 24 March submission. The NCP has requested more information about the other cases, which it has acknowledged are subject to the Guidelines. WeCAN is currently compiling the requested evidence.

Read the full post here

Item
22 July 2014

OECD complaint against Southern Response

"WeCAN vs. Southern Response", 11 Nov 2013

Current status Rejected - Issue Damaged homes after 2011 earthquakes in New-Zealand - Summary of the case In September 2010, four major earthquakes and an estimated 13,000 aftershocks devastated the Canterbury region, which includes New Zealands second largest city, Christchurch. The earthquakes resulted in 185 deaths and injured 11,432 people. Multiple complainants have alleged that the Earthquake Commission, Southern Response, AIG New Zealand, Tower Insurance, and Vero Insurances failure to resolve insurance claims more than three years after the earthquakes has violated their rights to health and adequate housing in accordance with the International Covenant on Economic, Social, and Cultural Rights. Multiple complainants have also alleged that Fletcher Construction has not started repairs, not completed repairs, or has inadequately repaired earthquake-damaged homes and has thus violated their rights to health and adequate housing as well.- Developments/Outcome The NCP rejected the complaint against the Earthquake Commission by arguing it is not a multinational enterprise or for-profit entity (using an interpretation/reasoning different than the Korean NCP in the Dae Kwang case above). The NCP also rejected the Southern Response case by arguing it only competes in NZs domestic market (yet another interpretation of MNE). WeCAN challenged the NCPs decision in a 24 March submission. The NCP has requested more information about the other cases, which it has acknowledged are subject to the Guidelines. WeCAN is currently compiling the requested evidence.

Read the full post here

Item
22 July 2014

OECD complaint against Tower Insurance

Author: OECD Watch

"WeCAN vs. Tower Insurance", 11 Nov 2013

Current status Filed - Issue Damaged homes after 2011 earthquakes in New-Zealand - Summary of the case In September 2010, four major earthquakes and an estimated 13,000 aftershocks devastated the Canterbury region, which includes New Zealands second largest city, Christchurch. The earthquakes resulted in 185 deaths and injured 11,432 people. Multiple complainants have alleged that the Earthquake Commission, Southern Response, AIG New Zealand, Tower Insurance, and Vero Insurances failure to resolve insurance claims more than three years after the earthquakes has violated their rights to health and adequate housing in accordance with the International Covenant on Economic, Social, and Cultural Rights. Multiple complainants have also alleged that Fletcher Construction has not started repairs, not completed repairs, or has inadequately repaired earthquake-damaged homes and has thus violated their rights to health and adequate housing as well.- Developments/Outcome The NCP rejected the complaint against the Earthquake Commission by arguing it is not a multinational enterprise or for-profit entity (using an interpretation/reasoning different than the Korean NCP in the Dae Kwang case above). The NCP also rejected the Southern Response case by arguing it only competes in NZs domestic market (yet another interpretation of MNE). WeCAN challenged the NCPs decision in a 24 March submission. The NCP has requested more information about the other cases, which it has acknowledged are subject to the Guidelines. WeCAN is currently compiling the requested evidence.

Read the full post here

Item
22 July 2014

OECD complaint against Vero Insurance New Zealand

Author: OECD Watch

"WeCAN vs. Vero Insurance New Zealand Limited", 11 Nov 2013

Current status Filed -  Issue Damaged homes after 2011 earthquakes in New-Zealand - Summary of the case In September 2010, four major earthquakes and an estimated 13,000 aftershocks devastated the Canterbury region, which includes New Zealands second largest city, Christchurch. The earthquakes resulted in 185 deaths and injured 11,432 people. Multiple complainants have alleged that the Earthquake Commission, Southern Response, AIG New Zealand, Tower Insurance, and Vero Insurances failure to resolve insurance claims more than three years after the earthquakes has violated their rights to health and adequate housing in accordance with the International Covenant on Economic, Social, and Cultural Rights. Multiple complainants have also alleged that Fletcher Construction has not started repairs, not completed repairs, or has inadequately repaired earthquake-damaged homes and has thus violated their rights to health and adequate housing as well. - Developments/Outcome The NCP rejected the complaint against the Earthquake Commission by arguing it is not a multinational enterprise or for-profit entity (using an interpretation/reasoning different than the Korean NCP in the Dae Kwang case above). The NCP also rejected the Southern Response case by arguing it only competes in NZs domestic market (yet another interpretation of MNE). WeCAN challenged the NCPs decision in a 24 March submission. The NCP has requested more information about the other cases, which it has acknowledged are subject to the Guidelines. WeCAN is currently compiling the requested evidence.

Read the full post here