August - September 2021
MODERN PROBLEMS MODERN SOLUTONS crane service standards New training methods tackling skill shortages
April - May 2021
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April - May 2021
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August - September 2021
Self sufficiency déjà vu? New Zealand could be forgetting a hard-earned lesson about national self-sufficiency
he uncanny parallel between our wartime experience of the difficulty in ensuring vital supplies reached us from thousands of miles away with the present major disruption to our global logistics caused by the Covid pandemic, should give pause for thought. Our only oil refinery, producing 85 percent of the country's jet fuel and 67 percent of petrol and diesel, is to become an import terminal reliant on foreign suppliers. Our mandatory strategic fuel reserve of 90 days is reportedly only 20 days, with the balance held overseas. Any national security risk analysis recognising global supply problems must better justify this significant threat to our continued social and economic wellbeing. The loss of our only oil refinery means: 4
• Dependence on availability from a variety of overseas suppliers. • Exacerbates the ban on new oil and gas exploration. • No capability to upgrade sub-standard imported product. • Inability to extend fuel reserves beyond our International Energy Programme (IEP) commitment of 90 days.
transport system, crippling international flights and dramatically highlighting our vulnerability. The transition of New Zealand’s transport sector from fossil fuels to efficient, cost-effective alternatives will realistically take years. Meanwhile, our fuel security is at risk, exacerbated by the uncertainty of future supply due to international
To navigate the present, we must heed the lessons of history • The loss of 240 skilled staff and impacting many skilled contractors. Memories are short: conflict in the Middle East saw oil prices soar and fuel supplies constrained for years. Damage to the pipeline supplying 90% of Auckland’s fuel and nearly 30 percent of New Zealand’s total fuel requirements, caused massive disruption throughout our
events beyond our control. Increasing local storage capacity is a longer-term challenge. Local chemical production in ageing and uneconomic facilities giving way to importing finished product from modern Asian and Middle Eastern ‘Super plants’ makes good business sense. Conversely, importing finished products also means a loss of valu-
able expertise as the skilled industry veterans needed to attract and mentor the next generation of much-needed professionals are no longer available. Covid constraints not only limit our ability to import the Chemical Engineers, Chemists and chemical industry experts we need. Those already here are finding it increasingly unattractive to remain, due in large part to constantly changing and frustrating border controls and immigration policies, coinciding with fewer job opportunities. Australia is decommissioning two of four refineries, leaving two operating for up to six years while additional fuel storage is built. These two will receive government subsidies worth A$2bn to upgrade in order to meet cleaner fuel standards and preserve thousands of jobs.
August - September 2021
While it may not be purely economic to continue upgrading our only refinery to compete with foreign refineries, a strategy based on a small reserve, coupled with the inability to manufacture vital transport fuels, with New Zealand at (‘best case’) the end of an 8-10 day delivery schedule (without the complications of Covid), with priority going to higher-paying customers and shipping possibly denied access to vital waterways, seems a highrisk gamble. A ‘worst case scenario’ of fuel rationing would rebound throughout the economy. The plan for the refinery closure assumes not more than a possible three-day delay in delivery. Our logistics sector, struggling with pandemic disruptions, reduced ship visits, overwhelmed local storage capability and disrupted shipping due to weather,
accidents, terrorism and hijacking, may not find such optimism reassuring. A side effect is the loss of ex-refinery Sulphur, increasing pressure on fertiliser manufacturers targeted by NGOs campaigning against Phosphate imports from the Western Sahara. Should the global supply scenario worsen, New Zealand’s economy would be hard hit. The chemical industry is inextricably entwined in every aspect of our national security and wellbeing, from providing the products we all need to sustain our quality of life, to contributing our scientific expertise overcoming challenges as diverse as pandemics, achieving climate change aspirations and even going ‘where no man has gone before’. Closure and downsizing of major New Zealand industry accelerates the loss of scientific capa-
bility. National self-sufficiency seems restricted to simply modelling social and economic ’what if’ scenarios which are neither guaranteed nor consistently accurate. The evolving Covid virus being one such unpredictable variable, affecting national security. Given these increasingly turbulent and unpredictable times, food and energy security (including fuel) must be key considerations in safeguarding our society. Perhaps we would be better served to increase the resources required to enhance our education,
healthcare and scientific capability, improving our national resilience, including food and fuel security, reinforcing our combined social and economic wellbeing. The evolution of our crude oil refinery into a terminal is a well-argued business decision. The continuing loss of key strategic industrial resources, involving irreplaceable expertise, increasing our vulnerability to accessing vital commodities, jeopardising our well-founded national self-sufficiency, surely deserves a more comprehensive risk assessment. Barry Dyer is chief executive of Responsible Care NZ. The views expressed here may not necessarily be the views of Responsible Care NZ. safetynews.co.nz
August - September 2021
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June - July 2021 3 4 10 16 18 20 22 24 26 28 30 35 36 38 40 45 46 48 52 55
No better investment than chemical safety training Are we forgetting national self-sufficiency? Pre-qualification framework for the construction industry Scholarships supporting tomorrow’s health and safety leaders What is workplace harassment and how to prevent it Industry leader in soft fall protection on construction sites Bastion NZ launch Industrial glove range Tips and myths around dogs Unlearning misguided muscle training keeps you pain free at home and work Safety focus on crane service standards Cordless machines and safer technologies will save lives Is standardised training the way forward? Safety app a crucial element in building site safety Infrastructure Skills Centre offers “work experience for a lifetime” Chemical safety relies on meaningful cooperation China builds 10-storey tower in a day Facilities management with personal service Residential construction reforms save time and improve quality control Will the reformed RMA actually help deliver more housing? Australia to slash planning times by 25 percent
56 58 59 60 64 66 73 75 78 81 84 86 88 90 92 96 97 98 103 104
Getting control of earthquake management Preventing collapsing structures Kiwi innovation leading the way in concrete slab insulation Property investor confidence hits record highs Is this the turning point of New Zealand’s property market? Further mortgage restrictions coming as house price growth continues Climate change kicks into gear Should the Government implement the Climate Change Commission’s advice? The three paths to net-zero Schneider: data centres and smart homes Is hydrogen the future of energy? The consequences of banning oil and gas exploration Can a vaccine for cattle help the dairy sector cut methane emissions? How to become a successful green business Thermal recycling - part of the solution not part of the problem Wood waste to take aluminium's place in food packaging Winning the last mile in the supply chain race Bold action needed to stop water infrastructure’s downward spiral AC Filter - an engineered solution protecting worker health In search of the perfect surface contractor invents new earth compactor
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August - September 2021
The harmful effects of weather changes are closer than you think Climate change will further increase already serious risks faced by workers in the primary sector
griculture and forestry already are among of the most dangerous sectors in which to work. Climate change will only bring added uncertainty. These impacts include a range of activities, led by the need to adapt farming and forestry practices in line with both greenhouse gas mitigation and environmental protection strategies. Farming practices also will have to adapt to changing precipitation patterns and increasing financial losses, the weakening of competitiveness on world markets and a rise in insurance costs caused by extreme weather events. Climate change will have substantial impacts on occupational safety and health. Extreme weather events, heat and sun exposure, insect-borne diseases, dust and pesticide exposure, increased use of pesticides to combat insect growth and risks specific to forestry number among 8
them. Clearing wind blow is one of the most hazardous operations in forestry. Farming and forestry work practices will need to be adapted to minimise the impact of these risks; this may include adapting workplaces to provide increased shade, sufficient ventilation and cooling systems; modifying working hours and planning work to avoid heat and extreme weather; and more hands-on or smart monitoring of workers’ conditions, such as hydration (water consumption) and body heat through the use of smart PPE. Working hours will need to be modified. Planning work schedules to avoid heat and extreme weather will require more handson monitoring of workers’ conditions. Heat is a major health risk for workers working outside. It can cause dehydration, heat exhaustion and heatstroke, and can even result in loss of consciousness and heart attacks in
extreme circumstances. Farmers are among those workers at the highest risk of developing skin cancer because they are exposed to the sun on a daily basis. Farmers and forestry workers are increasingly exposed to animal and insect-borne diseases from neighbouring regions, as mild winters encourage their spread. Rising temperatures are also expected to increase the development and growth of pests among plants, which will likely lead to an increase in the use of pesticides. Cross-compliance and pressure to meet climate change targets and environmental regulations are often cited as a major stress factor by farmers. The use of personal protective equipment in extreme heat conditions is particularly challenging, especially in forestry, where it adds to the effort and stress
of the job. This adds to the already numerous mental health challenges resulting from the long list of psychosocial pressures that farmers and forestry workers are currently subjected to and will continue to experience in the future. Studies show that the stress that climate change places on farmers and foresters is linked to psychological disorders such as anxiety, mood disorders, stress and depression. Similarly, fear, despair, suicidal feelings, increased drug abuse and heat-related deaths have been linked to adverse climatic changes Managing the mental distress caused by climate change, adapting production to the changing temperatures and rainfall patterns and, finally, coping with heat, new diseases, droughts and natural Sourced from OSHA Europa
Infrastructure providers are planning more projects than ever while COVID-19 continues to place pressure on skilled migration and construction material supply chains says Infrastructure Commission Chief Executive Ross Copland
delivery of central and local government projects and programmes as we ramp up our infrastructure investment,” says Peter Silcock, Chief Executive of Civil Contractors New Zealand. “In our business, we have vacancies for senior and experienced project managers down to drainlayers, asphalt operators and labourers," says Peter Reidy, Chief Executive of Fletchers Construction. “You simply can’t train for a lot of the roles we need – highly experienced engineers, project managers, specialist infrastructure skills and professional services. “This is why that MIQ quota is so critical for ensuring we can deliver the Government’s stimulus programme which will benefit all New Zealanders.” A second challenge is labour productivity in construction, which declined in 2019 and 2020. Productivity growth could help solve some capacity challenges by allowing industry to do more with less. In a constrained market, we can’t afford to lose productivity. Lastly, residential construction continues to rise, responding to unprecedented increases in house prices. Increased home-building will help to address New Zealand’s housing deficit, but some infrastructure projects may face increased competition for resources as a result. “With New Zealand lacking a lot of the critical infrastructure we need, removing roadblocks and building capability will be essential. This will be a long-term challenge, and in the meantime, industry will need to think hard, plan carefully and look at the steps they can take to make these projects a reality.” safetynews.co.nz
One step A forward and two back
growing pipeline of work faces major constraints to scaling up and significant competing pressure for resources. Limited managed isolation and quarantine capacity and visa processing bottlenecks make it more challenging to source skilled workers. The Skills Shortage, Recruitment & Immigration Challenges in the Construction Sector Report in July found that there are 3229 current vacancies across 135 firms. Ninety percent of these firms are having difficulty recruiting in New Zealand, with 66 percent getting no domestic applicants. Of those trying to recruit from overseas, more than half say the exception process is too complex, a quarter say the process takes too long and costs too much, nearly two-thirds asked for clearer guidance from Immigration New Zealand, and a bit over half want contact with officials who can help them through the process. Work is underway to train more local workers, but overall growth in construction employment appears to be slowing. These supply-side constraints are driving up prices and pushing out project timeframes. A recent survey indicated that while 50 percent of respondents are confident in the outlook of the construction industry, 80 percent said shortages of people and skills were a key challenge. “The shortage of skills and people is impacting on all aspects of the industry, design, engineering, construction and maintenance. It is likely to increasingly act as a handbrake on the
August - September 2021
August - September 2021
Pre-qualification framework for the construction industry
Construction Health & Safety New Zealand (CHASNZ) announced the launch of Totika to better manage Health & Safety prequalification
he announcement was the result of a number of years of industry-led work to develop an acceptable framework that simplified the method by which sub-contractors could prove that they had a robust Health & Safety system in their business (this is known as pre-qualification). Historically, the pre-qualification process was found to be overly administratively burdensome and depending on who a sub-contractor was contracted to work for it could require set up and on ongoing maintenance of up to 13 different pre-qualification provider’s
data bases -- expensive and time-consuming. In 2018 Telarc spent time talking with industry, to understand the issues being faced in the Health & Safety space. The number one pain point that came up was the inefficiency and administratively burdensome construction sector Health & Safety pre-qualification process. In late 2018 Telarc was asked to support an industry-led initiative (CHASNZ) to simplify the way in which pre-qualification in the construction industry was being managed. The outcome of this initiative has been called Totika.
Totika’s development was a timely rethink and reset of the overall Health & Safety pre-qualification process for the construction industry. First, and most importantly, any future pre-qualification framework would need to support the stated objectives around worker well-being, as stated in the Health & Safety at Work Act 2015 (HSAW Act). Second, as the HSAW Act was being introduced, the International Organisation for Standardisation (ISO) launched an internationally accredited Health & Safety standard - ISO45001. The assessment framework and auditor requirements when undertaking an IS45001 audit aligns very well with the requirements of the HSAW Act. The alignment comes through the ISO45001 using what is called an Annex XL structure to carry out the audit. Fundamentally this requires the auditor to assess important aspects of the organisations agreed process and observe evidence of adherence, through an active review of the organisations policies,
procedures, actual work, process measurement and process improvement activity. Having the above detailed, impartial and consistent intervention available in the New Zealand market was deemed to be of value when looking at the pre-qualification of sub-contractors in the construction sector. The more robust process utilised by an accredited Certification body was deemed to be of value for providing increased levels of confidence to primary contractors (government agencies and large construction companies/JVs etc) that their sub contractors did have a compliant and actively managed Health & Safety management system in their business. The end result was that Totika defined a cross-recognition pathway which provided choices to organisations in the construction sector. Depending on the level of risk the sub-contractors business is categorised as having they are now provided with options as to
Philip Cryer is Chief Executive of Telarc, a Crown Entity Subsidiary with a vision is to continue to excel as New Zealand's leading provider of systems assurance and training services. www.telarc.org | 0800 004 004 10 safetynews.co.nz
August - September 2021
Risk comes in many forms and certification helps over a variety of levels Telarc is a Jas-anz Accredited Certification Body which provides qualified, competent, New Zealand auditors, who are industry coded to provide relevant and impartial intervention for a large range of New Zealand business regardless of the business size. The body is able to provide New Zealand business with an individual or a team of auditors capable of assessing one or multiple standards across one or multiple sites. While the key priority of any commercial relationship is to deliver a product or a service, there is an increasing need from businesses to have confidence that their tendering parties and suppliers are managing their business in a manner that won’t negatively impact the supply relationship. There are increasing demands from buyers for their suppliers to provide confidence that they are operating their business in a manner that is delivering good quality and environmentally aware
products (ISO 9001 and ISO 14001) while managing workers in a way that protects worker well-being and safety (ISO 45001). There is more demand across other areas such as ethical work practices, Asset Management (ISO 55001) and IT Management (ISO 27001). Accredited Certification looks for gaps, risks and improvements in the way that work is actually done versus the way it is planned and communicated. This provides visibility of where work practice and or documentation anomalies lie in all levels of the business. This then leads to improvement activity so Certification can be granted. The second growing area that is driving minimisation of risk through Certification is through board and senior leader directives. Over the last decade, legislation and regulations have looked to push culpability for sub-optimal work practices towards senior leaders and boards.
NZs Preferred Nationwide Certifier of ISO standards Want to manage and reduce risk, increase productivity and profitability? Telarc has the right standard for you to achieve this. ISO 9001 - Quality, ISO 14001 - Environmental, ISO 45001 - Health & Safety, ISO 55001 - Asset management - ISO 27001 - IT security
Contact us to find out how standards will improve your business
0800 004 004 email@example.com www.telarc.co.nz safetynews.co.nz 11
how they might pre-qualify for work. ISO45001 has been identified as being able to be cross recognised across all risk categories for pre-qualification. By being ISO45001 certified Totika allows a sub-contractor to be recognised by all buyers of construction related services. Thus, the need to be approved across multiple pre-qualification providers disappears. This leads to increased efficiency and reduced cost. A great outcome for the construction industry.
August - September 2021
Tōtika is an alignment and cross recognition scheme for health and safety pre-qualification(s) in the New Zealand construction industry
What is Tōtika?
It creates a fair and equitable scheme with the objective that suppliers only need to pre-qualify ONCE instead of duplicating effort for each new client and opportunity through:
Pre-qualification and assessment of health and safety is an important part of the procurement process.
One universal standard – which provides a single source and a common view for H&S prequalification
One cross recognition framework – that recognises external audits of suppliers as an alternative
Tōtika is a place where all parts of the supply chain can gain assurance independently
It is an evolution – it is the next step to streamlining H&S pre-qualification criteria for procurement purposes
It has been developed by CHASNZ, over many years with industry, for industry; to reduce frustrations in duplicated time and effort when assessing H&S pre-qualifications as part of the procurement process.
What it isn’t: •
Tōtika is not just another pre-qualification system. It is a single framework that brings all H&S prequalifications together under one umbrella to make the process cheaper and quicker for everyone
Tōtika is not for profit. Any surplus after costs will be used for the benefit of industry
It does not absolve a buyers/clients responsibility for health and safety (nor guarantee supplier capability of doing a job).
Before Tōtika, there was no common standard for pre-qualification resulting in many proprietary and internal pre-qualification schemes. This has created inefficiency in the supply chain because contractors have had to repeatedly pre-qualify against different schemes and standards. This repeated and duplicated effort wastes time and money for both clients and contractors. There is a strong desire within the industry alike for a common pre-qualification standard and streamlined pre-qualification process; Tōtika has been developed to deliver these outcomes.
August - September 2021
Who should adopt
BUYERS/CLIENTS Organisations that purchase construction and pre-qualification services. This includes Government organisations, private clients and includes large suppliers that also procure services. Tōtika improves efficiency and reduces the time taken to procure services Buyers can assess with confidence the H&S pre-qualification suitability of contractors in real time Buyers save time as they don’t have to assess individual contractors’ systems (only project specific capabilities) Buyers don’t need to specify a proprietary scheme for H&S pre-qualification (saving costs and management) Simplifies the management of health and safety risk to your business.
ALL SUPPLIERS Contractors save cost and effort by not having to duplicate pre-qualification(s) Contractors save time and cost by not having to pre-qualify under a client specific H&S scheme Business growth is enabled through increased market access and reduced administration Simplifies the management of health and safety risk to your business LARGE SUPPLIERS This includes civil contractors and infrastructure network constructors, commercial building contractors, residential builders and construction professional services. Large suppliers also enter the procurement process as buyers/clients when they procure the services of smaller and specialist trades (e.g. sub contractors). SMALL TO MEDIUM SUPPLIERS These make up to around 90% of the supplier market and include self-employed tradespeople, family businesses, small contracting firms and consultancies. In areas where pre-qualification is required to gain access, Tōtika enables suppliers to compete for work in otherwise restricted markets.
www.chasnz.org/totika safetynews.co.nz 13
EVERYONE who buys or sells services in the NZ Construction Industry (individuals, groups or organisations) and H&S pre-qualification providers.
August - September 2021
What Tōtika means to the New Zealand Construction Industry One common standard – that we can all have confidence in, built on a certified system(s) that we can trust.
Tōtika means to to Contractors/ Suppliers:
Save cost and effort by not having to duplicate
pre-qualification(s) Save time and cost by not having to pre-qualify under a client specific H&S scheme Business growth is enabled through increased market access. Tōtika enables suppliers to compete for work in previously restricted markets Provides opportunity to demonstrate continuous improvement to clients
One common standard - that streamlines the procurement process Increased efficiency and productivity gains for everyone in the supply chain
IND AUDIT • Meets c • Consiste • Improve
One common standard that creates a fairer more competitive purchasing market A first for New Zealand, a solution that is world class
The Current Situation (results of CHASNZ 2019 pre-qualification survey)
On average, businesses spend an estimated $38,000 per year with pre-qualification providers
On average businesses engage with 5 pre-qualification schemes per year
Tōtika Supplier Categorisation • Sole Trader • Category 1 • Category 2 • Category 3
Choose a member scheme that best suits your category
Work out which contractor category you are using our quick evaluation tool online: www.chasnz.org/totika-contractors
T r Q-S o
Find pre-qualific your cur cro
August - September 2021
Tōtika means to Clients/Buyers:
Can assess with confidence the H&S pre-qualification suitability of contractors in real time Save time as clients don’t have to assess individual contractor systems Don’t need to specify a proprietary scheme for H&S (saving costs and management) Provides a simpler approach to the management of health and safety risk to your business
Tōtika simplifies the procurement process between contractors/ suppliers and clients/buyers Tōtika is an alignment and crossrecognition scheme for health and safety pre-qualification(s) in the New Zealand construction industry
DEPENDENTLY TED BY JAS-ANZ core criteria ent assessments ed standards
One central register •
ōtika member e-qualification OR
Tōtika crossrecognition. Safe, SafePlus or ISO45001
a Tōtika member cation scheme and/or if rrent provider offers oss-recognition:
Lists all contractor/ suppliers that have pre-qualified under an approved scheme CHASNZ continues to work with prequalification member schemes and industry to refine Tōtika
Buyer can import data into own business and project management system Buyer can trust that Contractor has a base H&S system in place that meets a common standard
Pre-qualify ONCE with a review/reassessment annually (or every 2 years depending on category)
During the procurement process buyers know that contractors are either: Performing Meets Tōtika core criteria OR
Developing Working towards Tōtika core criteria
August - September 2021
Scholarships supporting tomorrow’s health and safety leaders Each year, Site Safe supports the construction health and safety leaders of tomorrow by awarding scholarships to complete their Health and Safety in Construction programme
ith the enactment of the Health and Safety at Work Act (2015) it became apparent that there was a need to assure customers that they comply the requirements of the Act in safety measures for fall arrest. Upon completion, students receive a New Zealand Certificate in Workplace Health and Safety (Level 3), with guidance provided by a mentor for the duration of their journey. The Health and Safety in Construction programme provides students with essential health and safety training required to make a difference in the workplace. The path taken by students 16 safetynews.co.nz
is flexible, with only two mandatory courses comprising approximately one third of the total programme requirements. The scholarship programme has been running since 2016 and has seen many successful students progress to become health and safety leaders within the construction industry. With five categories open for entrants, Site Safe’s aim is to encourage active participation in health and safety in construction across a broad demographic. The categories are:
Under 25 Years Old; Maori; Pasifika; Women in Construction; and Open. The numbers of scholarships awarded each year varies, with a record 62 distributed in 2020 across the five categories. The significant increase on prior years was a demonstration of the ongoing commitment Site Safe has to the sector throughout a challenging period. To further add prestige and appeal to the scholarships, recipients are invited to Site Safe’s Evening of Celebration when they
graduate. Forming a key part of the annual gala event, the graduation ceremony is a chance for scholarship recipients to gain recognition and accolades from their peers and the wider construction industry. All potential applicants are encouraged to submit an application, as Site Safe looks to continue their support of the next crop of health and safety leaders in construction. Applications for scholarships are currently open, and close at 5pm, 31st August 2021.
For information relating to Site Safe’s scholarship programme, visit www.sitesafe.org.nz/training/scholarships or email firstname.lastname@example.org
August - September 2021
Has your business demonstrated innovation and leadership in health, safety, and wellbeing? Don’t be an unsung hero of health and safety – shout it from the rooftop! Applications for our 2021 Construction Health, Safety, and Wellbeing Awards are now open.
With five categories available to enter, these awards are a great opportunity to get recognition for the positive steps you are taking towards a safer and healthier industry.
Get recognised! Enter now! Entries close 2 September 2021. Visit sitesafe.org.nz for more info.
August - September 2021
What is workplace sexual harassment? Sexual harassment is unwelcome conduct of a sexual nature which makes a person feel offended, humiliated or intimidated, where that reaction is reasonable in the circumstances. Sexual harassment can happen at a worker’s usual workplace or in other places where they work, such as a client’s home. It can also happen during a work‑related activity such as a work trip, conference or an event.
Sexual harassment can take many forms and be overt, covert or subtle. It may include: unwelcome touching or physical contact suggestive comments or jokes sexually offensive pictures
swa.gov.au | July 2021 18 safetynews.co.nz
Sexual harassment is unlawful. Everyone in your workplace needs to understand and meet your workplace policies and the behaviours expected of them. Everyone should have information and training on what sexual harassment is, what to do if they are sexually harassed or if they witness someone else being harassed, and how to report it.
unwanted invitations to go on dates or requests for sex
Further advice and support services
sexually explicit emails, text messages or online interactions, such as social media posts
If you need help, please contact your work health and safety regulator.
Detailed guidance on how you prevent and respond to sexual harassment can be found at www.swa.gov.au.
Further information and advice can be obtained from: •
1800Respect 1800 737 732
Sexual assault support services
August - September 2021
Steps to prevent workplace sexual harassment MANAGEMENT
Persons conducting a business or undertaking, such as employers, have a work health and safety duty to eliminate or minimise the risk of sexual harassment at the workplace, so far as is reasonably practicable. There are a number of steps you can take to manage the risk of sexual harassment and meet your work health and safety duties. Here are some ideas to help you start doing what you reasonably can to prevent sexual harassment at your workplace.
Steps to take: Create a safe physical and online work environment
Implement workplace policies
Create a positive and respectful workplace culture
Address unwanted or offensive behaviour early
Provide information and training on preventing sexual harrasement
Quickly respond to reports of sexual harassment
Talk to your workers
Encourage workers to report any sexual harassment
Implement safe work systems and procedures
You should provide support, informal, formal, anonymous and/or confidential reporting
swa.gov.au | July 2021
You must talk to your workers throughout each step of the risk management process. See the Guide: Preventing workplace sexual harassment for further information.
Further advice and support services Detailed guidance on how you prevent and respond to sexual harassment can be found at www.swa.gov.au. If you need help, please contact your work health and safety regulator. Further information and advice can be obtained from: •
1800Respect 1800 737 732
Sexual assault support services
August - September 2021
Industry leader in soft fall protection on construction sites
Massey University rigorously tested all elements of the Safety Nets NZ system
ith the enactment of the Health and Safety at Work Act (2015) it became apparent that there was a need to assure customers that they comply the requirements of the Act in safety measures for fall arrest. “We needed to have our system independently analysed, engineered and ultimately certified. This meant that not only did the individual components of the safety net fall arrest sys-
tem have to be tested, the performance of the safety fall arrest system as a whole also needed to be studied,” says General Manager Craig Daly. A team at the School of Engineering and Technology at Massey University tested a variety of drop heights and weights, different bracket centres, various net sizes and points where the load strikes the net. “It even tested nets of different ages and repaired
Safety industry pioneer Safety Nets NZ has developed national standards in association with WorkSafe NZ, ensuring risk from falls is minimised for your construction workforce. • New Zealand owned and operated • Nationwide network of local installers • Dedicated to building site safety North Island 0800 NETSNZ (638 769) South Island 0800 NETS4U (638 748)
nets, with the results being collated and analysed to effectively confirm that our safety fall arrest system works,” says Daly. “This enables PCBU’s to discharge their responsibilities in regard to the requirements of the in the use of a system that is without risk to the health and safety of it’s workforce.” When the nets have been installed and inspected by a Safety Nets NZ team and a handover certificate
completed by our certified rigger, the client can then commence works above the safe area of the net. “All of our safety documentation has been produced in such a format as to ensure that it complements the overall site safety policy and manual that the Principal Contractor is required to establish on all projects,” says Daly. Click here to read inspection guidelines
Zenith Different environments, one helmet.
Zenith series of Safety Helmets is AS/NZS 1801 Type I certified offering additional protection from front, rear and lateral impacts in compliance with EN 12492, together with protection from electrical shocks in compliance with EN 50365 standard. A wide range of accessories enhances user’s safety and comfort in different environments, even when multiple set-up options are required.
August - September 2021
Bastion NZ launch Industrial glove range
The right hand protection is critical to keep worker’s hands safe from hazardous conditions that can cause injuries in the workplace. That’s why Bastion NZ have introduced their range of Industrial Gloves into New Zealand
astion Industrial Gloves have been a popular choice for Australian industrial professionals since they were launched down under over three years ago. The full range is designed to protect worker’s hands in a wide array of industries and applications including: - Chemical Resistant Gloves - General Handling Gloves - Cut Resistant Gloves - Cow Grain Leather Gloves - Thermal Safety Gloves Why do Bastion gloves offer superior protection? Simply because the entire industrial glove range is designed with quality materials that comply with the EN388 work safety testing standards. So that means that they’re suitably fit for the task at hand and offer
superior protection from hazardous chemicals, cuts, abrasions, burns and much more. Not only do safety gloves offer protection against hazards, they must also allow the wearer to function competently while they’re working. Each glove is robustly designed to withstand a high amount of wear and tear and for a more comfortable fit (including high breathability). The more comfortable and wearable the gloves are, the more willing employees are to wear them, significantly reducing the risk of injuries in the workplace. The range provides some great efficiencies and cost savings for businesses – as they are competitively priced and reusable and on top of that, most of the gloves in the range are also washable.
We promise ‘first class service’ Bastion has a strong supply chain, with strategically located suppliers, so customers can be confident
that there will be strong stocks on hand when they need it. With a team of product specialists who have a wealth of industry and product knowledge, Bastion strive to provide first class service through product guidance, technical advice and solutions to help customers grow their business. Bastion gloves are imported by Unipak – New Zealand’s leading supplier, importer and wholesaler of personal barrier protection and food packaging products. Unipak distribute their products through a nationwide network of industry-specific resellers. www.bastionpacific.co.nz
August - September 2021
Superior hand protection, trusted by industrial professionals.
For product information, contact 0800 864 725 or visit bastionpacific.co.nz safetynews.co.nz 23
August - September 2021
any of us have been told that a dog wagging its tail is a sign that the dog is happy. Unfortunately this is NOT always true. Research shows us a tail wagging only shows that the dog is engaging with something in its environment. This could be in a positive or negative way. You need to look at the whole body not just the tail. Always ask permission This means ask the owner if you can pat the dog. This also means that if the dog is by himself, tied up outside a shop or café, DO NOT touch. You do not know the dog; his likes or dislikes. You may be wearing a hat and the dog is scared of hats, carrying an umbrella or he may just not like strangers. By asking permission you are letting the dog know you are there so if you are allowed to pat him he wont get a fright. Which brings us to the next point... 24 safetynews.co.nz
Tips and myths around dogs A wagging tail does not always mean he is happy to see you, The Dog Safe Workplace explains Side and back Remember where the bitey end of the dog is and stay away from the head and face. Only pat the dog on the side and back. This is especially important with children. If anyone approaches a dog head-on to pat it and the dog does not want to be touched, it could decide to have a bite. For a child, the face is right next to the dogs mouth. The majority of bites to children are on their
head and face. If they are standing to the side of the dog to pat its back, if the dog doesn’t like it he can move away. Worse case scenario he may bite the hand, but the child's face is nowhere near the dog's. Stand like a tree We regularly get people telling us how dogs run up to them and the first reaction if you are scared or don’t like dogs is to run
or turn you back and move away. We recommend you stand like a tree or put something between you and the dog, a bag, a coat, or anything that if the dog does go to bite will be between you and the dogs mouth. Do not move. What you are trying to do is to make yourself as boring as possible to the dog. Any sudden movements or running away make you more exciting.
If you would like any more information or you would like to discuss your options please contact us on: email@example.com 0508 DOG SAFE +64 27 737244
August - September 2021
The Dog Safe
Workplace Ltd Proven decrease in dog incidents with the right training. Our company is dedicated to reducing the number of dog bites in industry.
Training your staff on dog safety
One of our customers has seen an 86% reduction in dog bites since instigating our training.
There are many advantages to online training: • Tax deductible • Cost effective • Safety training has been provided for a recognised industry risk • Easily accessible with no onsite organisation for training required • E mployees can do the course in their own time • Consistent training across the organisation • Mac, PC, Tablet and Mobile friendly • Downloadable Safe Dog tip sheet • Can be customised to suit the specific requirements of the organisation If we can help or if you would like any further information please contact us the details for your nearest office are below.
Offices: Joanna Clough Auckland, New Zealand NZ only: 0508 DOG SAFE Mobile: +64 274 737 244 Email: jo @ dogsafeworkplace.com
Jane Davies Wellington, New Zealand NZ only: 0508 364 7233 Mobile: +64 27 292 4158 Email: results @ dogsafeworkplace.com
Melissa Hague Port St. Lucie, Florida, US US: + 001-772-800-8082 Email: melissa @ dogsafeworkplace.com safetynews.co.nz 25
August - September 2021
The great unlearning Safety News and AsiaPacific Infrastucture publisher Mike Bishara accepts an invitation from Optimum Training to join a four-hour safety training session
harboured a fervent hope that 25 years of development and refinement of Wayne Milicich’s injury prevention model might contain a few surprises. The prospect of four hours in what I suspected could be a moralising lecture about how to lift a box was not enthralling. I could see, as we shuffled into the training centre, that the rest of the class felt the same, with a range of resigned, bored and cynical faces. We were wrong. Boy, were we wrong. Participants soon learned “it was all about them” and their individual quality of life. And how 30 seconds after the training would break the harmful muscle memory that had taken over the way we did things. “The programme is about unlearning what we learned between the ages of about eight to 13 years old and restoring all the movement patterns that we learned naturally during the first five to eight years of our life,” says Milicich. For example, children all demonstrate best balance, unlike most adults. About 80 percent of the adult population “half breathe” from the apical area of the lungs as opposed to the diaphragm and lower lobes of the lungs, according to Milicich. “Children all naturally breathe from their belly, diaphragm, unless they are stressed.” The most hardened cynics in our group quickly became engaged in the programme through a series of 26 safetynews.co.nz
Click here for more information
Optimum Training manager Dwane Stewart with an eager team of learners practical truths, illustrated by a range of interactions, sometimes with a workmate. We emerged half a working day later wondering who to sue for the preventable harm I have inflicted by following instructions. Life quality did not require lifetime dedication, just a reordering of basic instincts and tossing out a few myths. For our group, the quality of life had become anchored forever around balance and the 70/30 weight split between heels and toes. We were converts to breathing out like weightlifters, sticking out our butts and letting tummies and abdominals do their thing - we discarded posture misinformation and stress and replaced it with comfort, a safe and secure back and no pain. Optimum’s programme is of suggested solutions, not imperatives. “When we do this training, it is to benefit the individual. The company
clips the ticket and gets a benefit only when the individual benefits.” “You cannot stand on a platform and tell people they are wrong. When a person’s belief is challenged, they will do anything to defend that truth as it is what they believe and know and have lived by. The only way to expose the false belief is to lead someone to find the truth for themselves. In most cases following instilled poor habits is akin to
tapping yourself lightly on the head with a hammer for years. Do it enough times and you will end up permanently damaged. You cannot separate work safety and whanau safety – they are two sides of the same coin, according to Milicich. Health and safety at home and work are just a component of our life quality. Not something that is separated out with its own rules to be applied at specific times and locations. To a person, we emerged
70/30 balance is at the core of a quality of life
ready to retrain our misguided muscle memory with the 30-secondsa-day-worth of drills to reprogramme our muscle memory that had taken us just four hours to master. “The training empowers people to work out the truth for themselves and trust themselves. You are the only person who can determine what works best for you. Trust yourself to make a good call,” says Milicich. With no pen, paper or tables in the room, this programme is “pure adult facilitation of kinesthetic learning followed by cognitive understanding. It is simple to restore what was once in the muscle memory when we were five to eight years old. The original neural pathways just open up again,” he says. We learned and now retain what we learned. “Stress is recognized as a major cause of MSD and auto-immune disease. We help people understand how their body manifests stress and equip them with the understanding and tools to manage themselves during stressful times,” says Milicich. Optimum’s facilitation process has four specific steps. When applied correctly to the session, most often the learner has no idea of what
has happened, but they do recognise that their life has changed for the better. Our session began with participation exercises which showed the overriding importance of balance. The 70/30 rationale was enough to consign to the bin, along with a flurry of other medical myths, the long-held and totally wrong “bend your knees and keep your back straight” doctrine. It soon became apparent why Optimum’s quality of life programme is used by many of the country’s most astute corporations in an age where time “off the floor” is critical to the bottom line and many companies look only to tick the boxes of compliance. The benefits are equally cost effective, available and absorbed by SMEs. My class had only nine other participants so having a cast of thousands is not essential – or even recommended. “Move Smart Think Smart is about addressing the underlying causes of muscle and joint pain that occur as we interact with inert objects both at work and at home. Home injuries affect the workplace. Workplace injuries affect the home and family,” says Milicich. “Either way the quality
of life of a person is compromised. The traditional medical model calls the problem ‘nonspecific back pain and occupational overuse’. In fact, the pain is about inadvertent personal misuse of the body -- it is very specific.” The bio-medical model reckons back pain is normal. “No, it is not normal,” says Milicich. “It is common, and the medical model is unwittingly part of the problem. “Good posture” is nothing more than an old wives’ tale based on the military model of control and it is still believed today. A teacher tells children to sit up straight as a means of controlling the class. It is now portrayed as good posture. “The medical field is littered with information and advice that was eventually proven wrong and retracted. Some of our western cultural beliefs are based in nothing more than decades or centuries old beliefs and mores. The sad thing is that more than 80 percent of MSD's are inadvertently and unwittingly self-inflicted. People hurt themselves as they interact with inert objects, and they don't even realise it, says Milicich. “The only way a box can hurt someone is if it is flying
through the air and strikes them. Or if it is moving on a conveyor and they put their hand where they should not. A spade and the ground are both inert. To suffer pain while digging a hole is the person hurting themselves as they interact with the spade and ground. The pain is a direct result of poor skills and technique of movement -- self-inflicted pain. Most people blame something or someone for this self-inflicted injury. At that point, only the symptom can be addressed with drugs and therapy. The problem returns as they repeat their old thinking and poor technique once the symptom has eased. “No one deliberately hurts themselves. Given the opportunity, everyone makes the right choice,” says Milicich. To a person, everyone was engaged for the full duration of training, always relevant, interesting, practical and beneficial to each person. We felt equipped and empowered to take back responsibility for ourselves. I personally still muse over and apply the learnings. My years of knee pain has gone.
30-second daily drills to re-programme muscle memory
Wayne Milicich 07 8583040 027 291 1829 www.otl.nz Representatives NZ wide safetynews.co.nz 27
August - September 2021
August - September 2021
Safety focus on crane service standards
Rising demand puts particular pressure on hazardous area operations, says Konecranes Demag operations manager Mark Beckwith
s industry prepares for recovery from supply chain disruption caused by the Covid pandemic, companies face the prospect of rapidly expanding demand on lifting equipment vital to their business. One of the key areas where ongoing safety and reliability will need particular attention as production and distribution ramps up is with specialist lifting equipment, such as hazardous environment cranes and hoists. Now would be the best time to focus on such specialist technology by undertaking inspections and maintenance before a wave of greater demand arrives to put pressure on resources. Some of this specialist technology may have lain idle or have been subject-
ed to intermittent or lesser loads than usual over the past year or so,” But it may be now subjected to greater loads than ever as operators catch up with new production when the economic tide begins to turn. If you haven’t looked into crane modernisation generally, you’ll likely be surprised by the range of safety and productivity enhancements possible through updating older cranes. Quality is especially important in hazardous environments, where safety and efficiency are key. Modernisation raises operational productivity and profitability by assisting operators of upgraded equipment to decrease maintenance costs and control capital expenditures in highly competitive industries.
Konecranes has more than 600,000 items of lifting equipment of all brands under service contracts worldwide. It manufactures a broad range of cranes and hoists specifically designed and certified for hazardous environments. Its cranes include EX types for operating in potentially explosive atmospheres. These environments include those encountered in industries such as chemical plants, agriculture and food and beverage processing and petrochemical plants, oil refineries, ports, transport and logistics, mining plants, gas power plants, recycling plants, co-generation plants and wastewater treatment plants. It includes automotive and other paint shops and industrial sites that may be subject to vapors, gas, dust and volatile environments. Mark.Beckwith@konecranes.com 28 safetynews.co.nz
August - September 2021
Unsupervised trainee killed by crane
The inspection and maintenance task of Konecranes for example, conducted in partnership with on-site staff, includes industrial overhead electric travelling cranes, jib cranes and manual cranes, as well as electric and manual hoists, with lifting capacities from 125 kg to 160 tons. Typically, a thorough inspection, safety and maintenance programme will involve a wide range of people with a legal duty of care for safety, including: • Crane designers, manufacturer and suppliers • Crane owners and others with management or control of the crane or the workplace where a crane will operate • Competent people who inspect the cranes • Crane operators Safety and maintenance inspectors qualified for this process need a broad expertise, such as our own, garnered over more than 100 years of experience with hazardous service and general cranes. It incorporates multiple certifications that substantiate the quality of our products: IECEx for the world, ATEX for Europe, CSA US for the United States and INMETRO for Brazil, plus local requirements based on the best global standards. Konecranes’ approach to crane maintenance is centered on Lifecycle Care which focuses on highest lifecycle value to maximise the productivity of uptime and minimise the cost of downtime. This type of inspection and maintenance work is very much tailored to the needs of individual customers and particular sites – it is definitely not a case of one size, or one approach fits all.
WorkSafe New Zealand is warning businesses that it is unacceptable to allow staff to operate cranes and other machinery without direct supervision or appropriate training. The warning comes after a fatal incident in Christchurch in January 2020. An employee at Glaziers Choice Limited, trading as Stake Glass, was crushed by a pack lifter crane implement which was attached to a 2.5 tonne pack of glass. The overhead gantry crane was controlled by a handheld remote control, and the employee had climbed up the pack lifter to hook the crane hook onto it. WorkSafe’s investigation found that the victim, who was training to use the crane, used it at times without direct supervision and at the time of the incident was completely unsupervised. The business also had a generic and incomplete health and safety system and its risk register was inadequate. The investigation also found that crane implements should not be left attached
to a load. WorkSafe Area Investigation Manager Steve Kelly says that this situation could have been completely avoided if the employee had been properly supervised while he was being trained and if the pack lifter was stored without a load attached. “This is a situation that reinforces the need for proper health and safety systems to be in place. Employees that are not competent in operating machinery must be effectively supervised.” WorkSafe reminds businesses and employees that unsafe use of crane equipment presents significant risk potential for people and property. WorkSafe provide a number of resources for businesses using cranes, including an approved code of practice – Cranes | WorkSafe. The company was sentenced on Thursday 1 July at the Christchurch District Court. A fine of $270,000 was imposed. Reparation of $110,000 was ordered to be paid to the victim’s family safetynews.co.nz 29
August - September 2021
Cordless machines and safer technologies will save lives Manual methods are being replaced by new ways of exerting maximum force with minimal risk to workers, says Enerpac’ s Tony Cooper
Sometimes it takes a major problem to produce a major advance. This is the case for safety in the workplace -recent worldwide events have forced a rethink of the old ways of doing things. During the Covid pandemic we have all been forced to look at new ways of performing old tasks because we couldn’t have too many people close together. This resulted in a spurt in the relevance of digital technologies such as the EVO synchronous lifting technology. Technologies that enable us to do a better job, while removed from danger, are getting a real boost. 30 safetynews.co.nz
At the same time, the automotive transformation from fossil fuels to electric power has taken giant strides. Over the last decade a surge in lithium-ion battery production has led to an 85 percent decline in prices, making electric vehicles and energy storage commercially viable for the first time in history. Battery-based safety tools have benefitted immensely. Once not regarded as a serious heavy-duty tool, they are now coming into their own as a mainstream safety product, benefitting both the environment and their users.
August - September 2021
The rigid design of the DSX Series torque wrenches, above, provides enduring ability, mobility and safety. Optional Backup Spanners, below, are a hands-free tool that eliminates the need to use a flogging spanner as a backing tool. The spanners are secured with a safety cable and have been specifically designed to prevent them from locking onto the nut during suturing operations
This is particularly the case where the hydraulic technology is high-pressure (700 bar, 10,000 psi) which concentrates the greatest amount of force into the most compact and therefore easily handled tools. And for all clean, green electric tools – corded and cordless – increased safety is critical because of the huge personal and national costs of workplace accidents.
A worker is killed at work nearly every second day in Australia, but these tragic deaths these figures represent the tip of an accident iceberg. According to Safe Work Australia, work-related injuries cost the Australian economy around $60 billion every year. Workplace injuries impose a terrific physical and mental toll on victims and their families. So too do injuries prove to be a massive drain
on business’ costs and productivity, with stoppages and remediation always involving downtime and punishing the uptime and efficiencies industries are seeking in these competitive times. This article focuses on agriculture, transport, mining, construction, energy and manufacturing, which make up the top six hazardous categories. The most common injusafetynews.co.nz 31
he huge surge in new infrastructure development in Australasia, coupled with a rising wave of decommissioning and conversion of obsolete fossil fuel plant, present an array of safety challenges and opportunities in the years ahead. Conscious of their Duty of Care and the consequences of injuries and shutdowns, companies are embracing a whole new generation of powerful, portable and ergonomic tools that lighten the load and increase the efficiency of operations such and bolting and unbolting, cutting, bending, lifting and forming. Hydraulic battery technology, for example, has reached a point where cordless alternatives such as hydraulic pumps offer the same performance as their corded counterparts, with a sufficient fuel reservoir to last whole shifts without the need to replace or recharge the battery. An additional bonus is that they can be used in locations where there’s limited or no access to power such as remote sites, inaccessible machinery or high places, and where dragging around a cord around is not an option. For a myriad of applications, a corded tool is totally safe, and the ideal solution where the cords and power input are completely out of the way. Enerpac, for example, is one of the world’s leading hydraulic organisations with a range of thousands of mains-connected tools and a commitment to our Global Goal Zero safety training policy. Both corded and cordless hydraulic tools available now are pursuing a path towards lighter weight and far better ergonomics and safety than ever before.
August - September 2021 ries across all industries, according to Safe Work Australia, include sprains and strains of joints and muscles, which comprise 41.8 percent of all incidents. These are most often caused by poor manual handling practices and improper OHS handling, which can lead to slip and trip accidents, among others. Workers who are required to bend and move their bodies to lift, carry or push heavy items are at serious risk of straining their muscles. Carrying out bolting operations at height runs the risks of slip and fall accidents and the danger to those working beneath of dropped objects. Falls from height or being hit with moving or falling objects are among the major causes of death among the thousands of serious injuries to workers on construction and infrastructure projects. Such hazards will also become a greater challenge in the energy industry as wind towers become more and more prevalent. Lightweight ergonomic cordless tools – properly secured, with proper training – help provide a solution by which workers can safely exert precise force on repetitive tasks such as bolting. Such lightweight tools will also provide a solution to fatigue when working in confined spaces, where there is limited room to manoeuvre around the workpiece and where manual labour can be hot and rapidly fatiguing.
ment OEM Techmine Solutions has developed an innovative solution to a common mining problem – efficiently lifting thousands of metres of conveyor belts for maintenance. Techmine developed a new lightweight hydraulic belt lifter that utilises Enerpac’s XC-Series Cordless Portable Hydraulic Pump to safely and reliably provide the hydraulic pressure (700 bar, 10,000 PSI) required to lift belt sections up to 2,000kgs. “The new belt lifter effortlessly raises the belt in 20 to 25 seconds without requiring complex input from the user. An 1800mm belt lifter, comprised of three main parts, weighs only 29.5 kilograms once assembled. The main 13.7 kilogram lifting beam is ergonomic and easily portable,” said Mr Justen Wright, Principal Engineer, Techmine, and inventor of the new technology.
Cranes and conveyors Another area where cordless tools are making safety inroads is in servicing of cranes and conveyors. Leading mining equip-
Safety Training An essential component of using such powerful heavy lifting technology is having the appropriate safety training to ensure Standards
Techmine’s lightweight hydraulic belt lifter, featuring anXC-Series Cordless Hydraulic Pump (shown front) compliance and the safety of everyone involved. Companies are time-poor so Enerpac brings safety to the site. Enerpac’s Goal Zero on-site safety training is designed to optimise the uptime and performance of widely used tools while spotlighting workplace hazards and preventable accidents. These are practical, downto-earth safety training development courses designed to deliver immediate benefits from course leaders who combine local expertise with global knowledge and standards. The key outcomes on which they focus are reduced accidents and downtime. Elements of the on-site courses are tailored to the needs of individual sites and workshops, including mine, oil and gas, energy generation, primary processing (including paper, sugar, food and beverage and agribusiness) bulk handling, construction, infrastructure (inc ports and defence establishments) transport (inc rail, road and aviation) and energy generation and public water and
local authority service utility organisations. They include: • Tool inspections and correct workplace usage guidance • Maintenance and storage practices that optimise safety and uptime • Spotlighting potentially dangerous practices, with case studies • Extending tool life and productivity • Safety guidelines for general situations and for particular industries • Attendance certificates Heavy lifting Heavy lifting always presents challenges, both during the process – and sometimes further down the line, when unbalanced lifting can permanently compromise the long-term safety and stability of the structure being created. This is another area where technology is overtaking old methods, whether the lift involves, say, a single turbine or transformer, or an entire oil production platform, which must be precisely assembled, lifted, shifted and loaded so it can withstand the long-term efforts of exposure to the
August - September 2021 sut-Kakap (it can lift more than the equivalent of the 52,000-tonne weight of the steel in the Sydney Harbour Bridge, for example, or reposition a tunnel boring machine) it was the system’s ability to sense and control any deflection of the pontoons and main superstructure structure that won it plaudits for protecting structural integrity throughout the lift-weigh-shift-andlaunch process. The same synchronous lifting technology enabled contractor partners SKF and Sandvik to achieve outstanding precision, safety and avoidance of downtime during a 220-ton lift to facilitate slew bearing replacement on a GrainCorp ship loader at the Gladstone Port Terminal in Queensland. The EVO synchronous lifting system – using PLC control to manage four heavy duty CLRG cylinders simultaneously – was used
High tonnage cylinders linked to an EVO system helps lift the slew bearing for SKF and Sandvik in Gladstone, above. The EVO lift in progress, below
elements at sea. For example, Enerpac uses high-efficiency, high-safety synchronous lifting technology, where required, to allow multiple cylinders to be used simultaneously to lift structures within an average accuracy between the cylinders of a millimetre or less. They can also weigh and balance the load, during lifting and shifting, to ensure safety and longevity of the structure. One of the biggest jobs using this technology in recent years was where Malaysia Marine and Heavy Engineering (MMHE) used 352 compact, high-pressure 300-tonne cylinders to lift and skid the 43,000-tonne Gumusut-Kakap floating oil production system onto a vessel waiting in the Straits of Johor. While the technology employed is capable of lifting and shifting far greater weights than the Gumu-
The 43,000-tonne Gumusut-Kakap floating oil production system loads onto a vessel
August - September 2021 to lift the upper structure of the ship loader over 300mm, allowing the old bearing to be taken out and a new one put in. When taking the slew bearing out of the Port of Gladstone loader, the upper structure needed to be lifted straight up with absolute precision. The EVO system managed to stay within an average accuracy between the cylinders of 0.54 mm, which is incredibly accurate for a lift like this. Using the EVO synchronous lifting system allows companies like SKF and Sandvik to lift all sides of the bearing evenly and precisely from a central control point. By digitally monitoring and controlling lifting operations, they can enhance safety and precision compared with manual lifting operations. Farewell to flogging hammers One of my final examples of practical, shop floor enterprise and innovation (which is often where good safety practice comes into effect) comes from an enterprising Queensland contracting company. Gibson Instrumentation Services (GIS) developed a safer, faster and more cost-efficient way to assemble heavy ABON coal feeder chain links by replacing
strenuous manual labour with compact and powerful hydraulic power. The compact and powerful 700 bar high-pressure hydraulic equipment is used to assemble the chain links to form ABON conveyors of a type produced by FLSmidth Group for extensive use in the mining and energy, coal, cement and aggregate industries. GIS eliminated the need to use flogging tools during on-site assembly by introducing into their workshop a neatly portable combination comprising our C-clamp, 10-ton cylinder and lightweight PU series Electric Economy Pump with pendant control and pressure gauge for safety. The new combination is used in ABON OEM work in the workshop to precisely assemble chain lengths often weighing more than a ton, typically achieving tasks in one day that previously might have taken several. The Enerpac combination weighs less than half the 37kg of the previous customised tool that took two people to lift safely and required a crane for positioning. The new tool is also light enough to be taken onsite for maintenance tasks, where it also increases the safety of the job and cuts the time taken to do it.
Tony Cooper is Product Engineer and AsiaPacific Marketing Manager, Enerpac New Zealand details: firstname.lastname@example.org
The old way
The new way
Common hazards Situations where portable and cordless tools and new technologies can replace manual input with time-saving and safer alternatives 1. Slip and fall accidents, which are still too common to all sectors 2. Repetitive strain injuries, in all industries, particularly where old equipment is manual and bulky 3. Maintenance in confined spaces – especially mining energy and construction, but also inside heavy machinery (mobile and static) 4. Heavy lifting 5. Emergency repairs in the field, to prevent downtime 6. Rescue work, where powerful tools are needed immediately 7. Airborne and remote sites work, where tools must be light and self-sufficient 8. Sites where there is heavy wheeled traffic, such as forklifts in a factory or vehicles in a distribution centre 9. Working at heights, particularly construction, but in plenty of other situations also, including mining loader booms, cranes and conveyors.
August - September 2021
Is standardised training the way forward?
Southbase Construction introduced a forward-thinking professional development programme in 2017 to support consistency across teams and career progression eCampus NZ, who support the online learning for several Te Pūkenga subsidiaries, has worked with the company to help them design and award digital badges to recognise their team’s achievements. A digital badge is a visual, online image of a skill or competency earned. These online certifications can be stored in an online profile, allowing learners to instantly share their achievements with employers, colleagues, whānau, friends and professional networks. The launch of the digital badging has attracted interest from health and safety regulators in New Zealand, who have connected with Southbase Construction on LinkedIn to learn more about their innovative approach to upskilling their workforce. Members of the Southbase Construction team who have been awarded a digital badge have enjoyed sharing their achievements online.
he programme gives employees access to 60 micro-learning courses, each designed to help them upskill in a specific area. The courses are bite-sized education opportunities, designed to cut through the jargon and focus on specific industry and workplace skills. Recently promoted Project Manager, Tom Quin, who joined the team in 2014, has completed 31 micro-learning modules, or ‘competencies’, since 2017. He credits the consistency across teams at Southbase Construction to their commitment to professional development. “I could go and work on a job in Auckland, Queenstown, or Christchurch and pick up where the last project manager has left off,” says Quin. “Everything is done the same, so we’re all on the same page, heading in the same direction, working towards the same goal.” Since introducing their highly structured approach to professional development, Southbase Construction has supported, tracked, and celebrated the achievements of hundreds of employees. “Our employees are learning and bettering themselves, and we’re able to deliver consistency and a high-quality service to our clients,” says Southbase Construction’s People and Compliance Manager, Carena Parish.
“The badges prove that we know about health and safety in the construction industry,” says Quin. Southbase Construction has now rolled out thirteen digital badges to reward employees for upskilling in a range of areas, from Health and Safety to IT. Daniel Foster, who was recently promoted from Site Engineer to Project Manager, believes that his career progression at Southbase
Construction is directly linked to the professional development opportunities they offer. “One of the keys to keeping your employees is giving them a professional growth path," he says. "At Southbase, there’s a huge emphasis on helping us to understand what the next stage of our career may look like, and they’re very proactive at enabling us to get there."
August - September 2021
Safety app a crucial element in building site safety There are a lot of moving parts to a company’s health and safety programme but an app can bring them all under the same platform
n an environment of stringent regulation, it is essential for businesses to have a cost-effective platform to ensure health and safety compliance for everyone who enters potentially dangerous building sites. SiteConnect gives employees an easy, convenient way to stay engaged. They can access reporting features on the go, logging data as they work, saving time by avoiding double entry or tedious engagement with outmoded or separate sources and systems. A business’s entire program, from incident reporting to compliance to training to audits and inspections, can exist within a single, seamlessly configured ecosystem. “Businesses can protect their people using SiteConnect as their one-stopshop” says Edward Baddeley, BDM with SiteSoft. “It is dynamic and malleable enough to be integrated into, and to enhance, businesses at all levels. We also partner with H&S Consultants who use it with 36 safetynews.co.nz
their clients. “For medium-sized businesses SiteConnect makes health and safety compliance simple by creating greater engagement among everyone at all levels,” says Baddeley. “Bigger enterprises, with personnel on several sites at once, can be confident knowing they have a unified health and safety platform that can be utilised efficiently.” Emerging and evolving technology Health and safety technology is evolving rapidly, and many contractors and sub-contractors who still rely on inefficient record keeping are beginning to acknowledge that such methods are obsolete. “Mobility, too, is a factor. Safety managers can’t be tucked behind their desks all day,” says Baddeley. “They need to be actively present in work areas, with a mobile app, finding and eliminating potential hazards, conducting audits, assessing risks, and undertaking other tasks to keep
employees safe on the job.” The different functionality offered by the app creates an ecosystem of compliance, connecting all roles and responsibilities, maximising efficiency. The SiteConnect app enables seamless functionality across an entire health and safety ecosystem. It covers compliance from site sign in, contractor management, site communication and site inductions to the swift reporting of incidents and hazards. Ensuring safety legislation compliance Every work site carries inherent risks to those attending for work and visits. Thousands of work-related accidents are reported to the Health and Safety Authority each year. These cases are largely due to failures and deficiencies in the occupational safety and health management in organisations. Injuries and deaths remain all too common occurrences. To confront this reality, WorkSafe NZ has introduced a rigorous scheme of legislative measures, placing responsibility for managing work sites squarely on PCBU -- executives, and even workers and sub-contractors, with an expectation they be more proactive and vigilant than ever in order to save
lives and prevent injuries at worksites. Companies, their boards and management teams, workers and sub-contractors all face harsh penalties depending on the severity of the offence, with failure to comply leading, in some instances, to prison time and multi-million-dollar fines. In this environment of stringent compliance standards and responsibility at every level, a mobile health and safety app like SiteConnect is a crucial element in business operations. SiteConnect offers multiple layers of protection: reducing the likelihood of injuries to those on site, preventing inefficiency, and fortifying a business against severe penalties that might ensue as a result of a muddled, neglected or outmoded health and safety protocols.
Ed Baddeley is Business Development Manager for SiteSoft www.sitesoft.com 0800 748 763
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WORKPLACE FIRST AID
August - September 2021
Infrastructure Skills Centre offers “work experience for a lifetime” The civil construction and infrastructure industry has teamed up with government, industry bodies and employers to help meet New Zealand’s infrastructural skills challenge
he Infrastructure Skills Centre has been developed jointly by Fulton Hogan, the Ministry of Social Development, Civil Contractors New Zealand, the Construction Sector Accord and a range of civil construction employers to give New Zealanders a unique range of experiences. The first intake of 12 participants assembled in Christchurch today for an intensive six weeks, learning about the many aspects of infrastructure and the skills that underpin the 38 safetynews.co.nz
industry. Trainees are employed prior to the course and will be mentored by the companies they are employed by throughout their training. There will be another intake in Auckland in October. The results will then be assessed and the concept refined as necessary for the future. Civil Contractors New Zealand Chief Executive Peter Silcock says the Infrastructure Skills Centre pilot was a great initiative, based on an existing model operating in Melbourne, with
the potential to significantly increase New Zealand’s ability to bring new people into the industry. “There are rapidly expanding work and careers opportunities in New Zealand’s infrastructure industry right now. This means we need better systems to ensure people start out with the right skills and knowledge for a successful career constructing and maintaining the country’s essential water, transport, energy and internet networks.” Fulton Hogan NZ Chief Executive Graeme Johnson
says the Centre aimed to give people an experience that set them up for a life-time in infrastructure – an across-the-board appreciation of the various skills required in building, operating and maintaining infrastructure. He says starting ‘on the tools’ after attending the Infrastructure Skills Centre, along with subsequent industry training, could lead to a diverse and satisfying career and be a stepping stone to managerial careers. “In our sector you can
August - September 2021
start from the coal face and develop a life-long career – you just need the right attitude, work ethic and to take the opportunities that are put in front of you. “The opportunities presented by the Infrastructure Skills Centre are more than personal – they include making a sizeable contribution to the community. Infrastructure is the foundation of healthy, prosperous and safe communities, so involvement in infrastructure is a pretty noble cause.” Each intake will have 22 practical hands-on sessions, 32 theory-based class sessions and six site visits – to Allied Concrete, Stahlton Precast, Miners Road Quarry near Christchurch, Fulton Hogan’s Canterbury laboratory, a civil construction site and an asphalt plant. The modules are facilitated by a team of 26 Fulton Hogan workplace instructors and subject matter experts. The skills covered range from effective communi-
cation to environmental awareness/management, health and safety, budgeting, time management, nutrition and mental health awareness through to concrete pouring and finishing, reading and interpreting plans, applying asphalt, traffic control and use of power tools. Course entrants are employed from day one of the programme with major sector employers – Higgins Contractors, Fulton Hogan, Blakely Construction, Isaac Construction, Better Trade Solutions, Christchurch Ready Mix Civil, BG Contracting and Rock Control Ltd. Construction Sector Accord and Ministry of Social Development representatives spoke in support of the Infrastructure Skills Centre. The Construction Accord’s Transformation Director, Dean Kimpton says there are strong linkages between the Accord’s goals and those of the Infrastructure Skills Centre. “The Construction Sector
Accord is all about partnership between industry and government to transform the sector, and it’s hard to think of a better example of that than this initiative. “Industry is stepping up to train people, and government is stepping up to back this project. We look forward to seeing it succeed and grow.” Ministry of Social Devel-
opment Director Industry Partnerships, Amanda Nicolle was glad to see opportunities opening up for job seekers to gain skills that are sorely needed in this sector, through the Infrastructure Skills Centre. “This initial project reflects the value of the Construction Sector Accord and the impact it can have on moving New Zealand forward.” safetynews.co.nz 39
April - May 2021
Chemical safety relies on ERAC ELBISN OPSER GOT A meaningful cooperation A TOG RESPONSIBLE CARE
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Expanding government-industry partnerships to help business operators should be a no brainer. Inviting enquirers to read the regulations falls well short of educational expectations
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August - September 2021
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August - September 2021
China builds 10-storey tower in a day A modular apartment block has taken shape in just 28 hours in what the Chinese developer claims is a world first, The Urban Developer reports
hinese company Broad Group released vision of the tower that was lifted into place and bolted together in 28 hours and 45 minutes, in what the company claims is the “shortest construction period” for a building of that scale. Broad Group built the tower in its hometown of Changsha using the bolt-together modular units called the “Living Building” system, which the company manufactures, in addition to air conditioning and heating modules. According to the company’s website the modular units are the same dimensions as a shipping container, so they can be easily shipped, and include wiring and ducting. The Living Building system uses Broad’s “B-Core” steel slabs as the structural element, which the company claims are 10 times lighter and 100 times stronger than conventional alternatives and are a disaster-resilient building system. Each module is 12.19m long, 2.44m wide and 3m high. The modules were stacked with one wall of each unit folding down to become a floor plate and create a column-free space that is 12m long and 4.8m wide. Windows and balconies fold out from the unit to enclose the spaces, a company spokesperson says. theurbandeveloper.com propertyandbuild.com 45
August - September 2021
Hard work gets results
The success of Rapid Facility Services is driven by a team that combines experience, commitment and a professional skillset that covers every aspect of facilities management with personal service
he team was forged by three friends working in the industry who realised that the key thing stressed building managers, business owners and landlords needed was to make a single call and get a reliable and qualified support team that would cover any aspect of facilities management. The Rapid trio set down a business philosophy that “we will do what others can’t or won’t do “ and set about assembling a highly trained, efficient and safety-conscious team of professionals who get the job done right, the first time. Today that service stretches from food manufacturers’ audit cleaning, all aspects of industrial cleaning, painting, building and floor safety management to anti-microbial and moss
Having worked in the industry for many years, three friends, Paul Schoch, Robyn Schoch and Andrew Chan realised that by combining their skills, they could create a company unlike any other and mould treatments to prevent surface damage to roofs, ceilings, walls, floors and specialised equipment.
Team members Darren, Brandon and Akeli
August - September 2021
August - September 2021
Residential construction reforms save time and improve quality control
Amendments to the Building Act seek to improve the efficiency and quality of building work and ensure that any problems are resolved fairly
One down and one to go The Building System Legislative Reform Programme is a series of legislative changes to the building system that will lift the efficiency and quality of building work, and provide fairer outcomes if things go wrong. It is hoped that streamlining and certification of various functions in the newly signed-off first phase will ensure standards, do away with an endless string of repetitive consents and substantially cut building times for residential homes. The changes are being progressed in two phases. Phase One, the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill, gained Royal Assent on 6 June. This bill is focused on improving the assurance system for building products, including CodeMark, and creating a voluntary certification scheme for modular component manufacturers (such as prefabrication and offsite manufacturing). Phase Two focuses on the professionals in the sector. It will progress reforms to occupational regulation of engineers and practitioners in the building and construction sector, so that people can have more confidence in these professions and their work. The first set of changes includes introducing a code of ethics for Licensed Buildings Practitioners, improving the efficiency of the licensing process, and the structure of the complaints and disciplinary model run by the Building Practitioners Board. Minister for Building and Construction, Poto Williams says the Government is committed to working with the sector to improve the occupational regulation of the various professions within the sector “as we continue to advance the biggest changes to the Building Act since its inception.”
he bill introduces minimum information requirements about building products to “support better and more efficient decision-making and strengthen the product certification framework (CodeMark) to improve trust and confidence in the scheme.” The bill would ensure that products sold in New Zealand comply with the building code and establish a new manufacturer certification scheme for non-traditional methods of construction, such as modular components and off-site manufacture. It strengthens penalties for breaches of the requirements and creates new offences for noncompliance. The definitions of building products and building methods was not amended because “building products and building methods may evolve over time, and the regulation-making power would allow for this, without the need to return any legislation to Parliament.” Simply put, building product with various qualifications is defined as “a prod-
uct that could reasonably be expected to be used as a component of a building and building method means a method for using one or more products or things as part of building work”. Because a number of complex new regulations would be needed to implement some of the changes proposed by the bill, the final commencement date has been pushed out to 15 months except for range of amendments able to come into force with immediate effect. Under section 48 of the Building Act, the standard time limit for decisions on building consent applications is 20 working days, but this is shortened to 10 working days in specified circumstances. The 10-day time limit would apply when the building consisted entirely of a single modular component and had been manufactured by a single certified manufacturer. The new bill allows the introduction of a new voluntary manufacturer certification scheme for Modern Methods of Construction
(MMC). This works by certifying manufacturers to produce consistently safe and reliable building components and modules. The end-to-end process from design (where relevant), manufacture, assembly, and right through to transportation and installation on-site, are assessed with ongoing checks and balances to ensure construction meets the requirements of the building code. Once certified, third party inspections, audits and post-certification surveillance will provide confidence of quality construction. Consenting authorities can focus on on-site building work not covered by the MMC certification such as site works, foundations, plumbing and electrical connections or connections to utilities such as sewerage and storm water. A manufacturer’s certificate for a modular component will be considered or accepted as proof of compliance with the building consent. Under the amendments
to the Act, the government says manufacturers who prove their systems and processes are compliant will benefit from a new streamlined nationwide consenting process for prefabricated buildings. This will enable the mass factory production of high-quality buildings, halve the number of building inspections for factory produced buildings and ensure only the location where a prefab house is installed requires a building consent,
removing the possible need for two separate consents. Current consenting processes are geared to traditional construction methods and create barriers, duplication and delays for more innovative products and methods. The industry is well ahead of the game and already can deliver innovative and affordable housing efficiently, using techniques such as prefabrication and off-site manufacturing. Concision off-site man-
ufacturing in partnership with Versatile recently completed a four-bedroom, two bathroom, brand new family home in just 10 weeks, start to finish. The home’s 43 panels were manufactured in Concision’s factory in just two days. They were then delivered to site and installed in a single day. “In general, we can turn around the panels for a standard 150m2 home in about four hours and have capacity to build 1000 homes a year. Concision panels have recently been put to use in a 41-apartment block in Wellington, schools in Canterbury and Auckland and state housing units in Napier. Fletcher Building through its Clevercore brand has a hi-tech facility up-and-running in Wiri to “accelerate the manufacture of quality homes at scale by producing the core structural components of a home in a factory environment, in as little as a day.” This reduces onsite build times by 60 percent, or from 22 weeks to around 6-10 weeks, the company says.
August - September 2021
August - September 2021
Raising the bar on performance, quality and accountability in residential construction The MBIE review includes managing risks to the health and safety of the public, and the financial risks to consumers if work is done poorly
he overarching objectives of the current MBIE review of the Licensed Building Practitioners (LBP) scheme are to ensure first that regulation under the scheme is proportionate to the risks to public safety and wellbeing. It seeks to ensure that practitioners provide services with reasonable care and skill, operate within their areas and levels of expertise and can be held to account for substandard work and poor behaviour. “We are strengthening our occupational regulation of so that New Zealanders can remain confident in LBPs and their work,” said Amy Moorhead, MBIE’s Building Policy Manager. The LBP scheme was introduced in 2007 following an amendment to the Building Act, to help address gaps in the performance-based regulatory system that were exposed during the leaky homes crisis. It has not been reviewed as a whole since. The LBP workforce and wider building system has continued to evolve and become more specialised, and demands on builders have increased. The purpose of occupational regulation, including the LBP scheme, is to give people confidence in practitioners and their work and the regulations may not have kept up with the changes in the building sector, says MBIE . The scheme makes an important contribution to safe and durable residential buildings but does not regulate the entire building profession, just licensed builders when they are carrying out or supervising restricted building work. This only affects residential construction, and does not include commercial
August - September 2021 set of changes. The issues addressed in the current plans will lead to the second set of changes. The Government has agreed to strengthen the LBP scheme to introduce a code of ethics, improve the structure of the complaints and discipline model, to introduce independent investigators and to enhance the efficiency of the licensing administration process such as including a grace period for late renewals. Minister for Building and Construction, Poto Williams says the Government is committed to working with the sector to improve regulation of the various professions within the sector “as we continue to advance the biggest changes to the Building Act since its inception. “The sector is vital to New Zealand’s recovery from the COVID-19 pandemic,
and a strong and robust LBP scheme is needed to provide assurance in practitioners and their work as we continue to improve the nation’s housing stock. “The scheme ensures that building practitioners have the right skills, knowledge, experience and behaviours to carry out and supervise quality building work. This
reduces health, safety and economic risks to homeowners from substandard building work,” she says. The MBIE is currently reviewing feedback from a discussion document to a further three proposed changes to the Licensed Buildings Practitioners (LBP) scheme before reporting to parliament.
construction, including most medium-to-large apartment buildings. When MBIE consulted on strengthening the LBP scheme in 2019, building consent authorities, industry groups and some builders reported they do not have confidence in the scheme because the required competencies to be licensed are too low. MBIE is currently seeking feedback from Licensed Building Practitioners and those who engage with them on three key elements of the scheme - the ability to supervise non-LBPs undertaking restricted building work, licensing classes and if the minimum standards of competency remain appropriate. In September 2020, MBIE undertook targeted consultation on proposals to strengthen the LBP scheme, as part of the first
Changes to the LBP scheme that have already been approved Introduce a code of ethics for LBPs to establish clear and concise behavioural requirements to manage poor ethical conduct Amend the following licensing processes in the Building Act to ease the administrative burden of the scheme, by: - moving the process for renewing licences from the Building Act to the LBP Rules - allowing for the licence term to be set in the LBP Rules, and prescribing the licence term to be no longer than five years in the Building Act - providing that the public register can distinguish between a licence that is not renewed by the due date and a licence that has been suspended due to disciplinary reasons, to improve clarity on the public register to support consumers to make more informed choices - allowing licences that are not renewed in a timely manner to be subject to a grace period, in which
the LBP may renew the licence, and that this period will be specified in the LBP Rules - making it so a licence that is cancelled or suspended for a disciplinary order will stay recorded on the public register for three years - allowing the Board to take disciplinary action against LBPs who undertake restricted building work during the grace period. Amend the complaints and disciplinary process in the Building Act to align with the Electricity Act 1992 to address issues around natural justice and fairness, by: - separating the investigative and adjudicative functions in the complaints and disciplinary model by using independent investigators to undertake investigations, in order to clarify and strengthen the Board’s role as an impartial decision maker - granting the investigator powers to obtain and execute a warrant to enter land or premises for the pur-
poses of investigating a complaint - granting the investigator powers to require a person provide any document or information that may be required, where necessary for the purposes of investigating a complaint, by written notice - allowing the Board to hold parts of meetings or hearings in private where it is appropriate due to the nature of the evidence - allowing the Board to amend an order of the Board where an administrative error has been made - allowing the Board to suspend an LBP’s licence should they fail to comply with a training order - allowing the Board to take disciplinary action against LBPs for carrying out or supervising building work without a building consent when one is required - making it an offence to not comply with a notice to supply the required document or information - improving the triaging powers of the LBP Registrar.
August - September 2021
his is mainly off the back of affordability pressures, the 40% deposit requirement and extended bright-line test for investors, the tightening of interest deductibility rules, as well as the approval for the Reserve Bank of New Zealand (RBNZ) to look at debt to income restrictions. Reforming the Resource Management Act has been seen as a once in a generation opportunity to improve New Zealand’s ability to deliver more housing. While some are praising the Government for taking action, others say the Government has just squandered that opportunity. “We are concerned that the Bill as it stands will, in some cases, make consenting and development more difficult,” says Property Council New Zealand’s Head of Advocacy, Denise Lee. “It is hard to see how meeting all of the listed environmental outcomes will make the process less bureaucratic and burdensome. We have always favoured bottom lines to both 52 propertyandbuild.com
Will the reformed RMA actually help deliver more housing? The Government has released the first draft of the Natural and Built Environments Act (NBA), one of the proposed laws meant to replace the cumbersome Resource Management Act (RMA) which has stunted New Zealand’s ability to build more houses protect and enhance our natural environment, while simplifying the system to get more developments consented.” Lee says one of Property Council’s key concerns is the lack of mention of development in the purpose section of the Natural and Built Environment Bill. This seems an obvious omission given the Bill’s requirement to support sustainable development.
“New Zealand is simply not building enough houses, quickly enough, and with the quality and innovation needed to service its growing and changing population.” National Party Leader Judith Collins agrees, saying the Government has missed the point. “The whole idea is to make the RMA simpler and easier to deal with. The real risk is that at the
end of this process we end up with something that is more costly, complicated and cumbersome than we already have. “The Government needs to act with much more urgency to cut through our complex planning rules and free up housing supply.” House prices in New Zealand continue to skyrocket, with lack of supply being the chief contributor to this. There is a sense of urgency
to repeal the RMA which Collins says the Government has failed to recognise. “Everyone agrees the RMA needs scrapping, we can’t understand why Labour doesn’t sense the same urgency. We need urgent legislation to free up housing supply because we can’t wait years for the RMA to be replaced.” Collins says she already has a bill drafted which approaches housing in a similar way to Christchurch, which now has some of the most stable house prices in the country. “We know what works, National freed up planning rules in Christchurch after the earthquakes and house prices stabilised. My Bill takes the same approach across all of New Zealand, requiring councils to urgently upgrade their District Plans to make it easier for people to build houses.” Environment Minister David Parker argues that the new system will be more efficient and effective. He says the NBA sets out the ways the proposed system
The Government used emergency powers to get houses built after the Christchurch earthquake. It is now one of the only places in New Zealand that has managed to keep up with housing demand.
August - September 2021
August - September 2021 will protect the environment. “A new national planning framework will provide clear direction on how the new system is implemented. This integrated set of regulations will include mandatory environmental limits that cannot be crossed to avoid irreversible harm to the environment. “These limits will protect ecological integrity and human health. This includes limits relating to freshwater, coastal waters, estuaries, air, soil and biodiversity.” “For the built environment, outcomes include well-functioning urban areas, more housing supply and enabling infrastructure. The new Act will include choice for consumers, contribute to the affordability of housing and the productivity of our economy,” says Parker. The proposed legislation does reduce the number of plans and policy statements around the country from 100 to 14. Property Council welcomes this, as it will mean a more streamlined approach can be taken to planning. “But with this needs to be the commitment to resourcing authorities and consenting teams properly,” Lee says. “Already local authorities are stretched. Ensuring they are resourced to make implementation as seamless as possible, as well as provide support to continue to consent new developments will be critical to the success of the new system.” The New Zealand Planning Institute echoes these concerns. “We believe there needs to be a commitment to resourcing territorial authorities to build strategic spatial plans that give regional effect to the proposed Na54 propertyandbuild.com
tional Planning Framework,” says Chair Reginald Proffit. “Local authorities are already stretched doing core tasks and these changes will come on top of a number of other proposed reforms. “New and enhanced planning skills will be required at local government level, and this training and education needs to be planned and provided for so the people at the heart of implementation can pick up the reins and run with it.” Manaaki Whenua Landcare Research’s Dr Nicholas Kirk is also concerned about lack of support for mana whenua. “Mana whenua are expected to play a greater role in planning during the development of Regional Spatial Strategies,” Kirk explains. “However, iwi and hapū often struggle with their current resource management responsibilities, as they are often small organisations
that experience consultation fatigue when asked to participate and contribute to all resource decisions. “If greater responsibility is placed on mana whenua, I suggest they will need to be provided with more support to enable them to most effectively participate.” Infrastructure New Zealand’s Chief Advisor Claire Edmondson states she is encouraged by the Bill’s overall direction and calls it a radical shift that will see process-heavy matters shifted to a national planning framework. “This will serve as a key catalyst in achieving a resource management system that is nimble and responsive. “The national planning framework will effectively be a set of regulations that Cabinet can update or review without having to go through the Parliamentary process as is the case when passing a bill or amending
an act. “A key criticism, amongst many others, has been that the RMA failed miserably in adequately accounting for cumulative effects. We are encouraged to see that the exposure draft shifts away from just managing effects of activities to setting positive outcomes.” Edmondson says the Bill could be strengthened on infrastructure matters as it still does not go far enough in considering infrastructure an integral part of the resource management system. “While the Bill is welcomed, what will ultimately matter is how clear national direction is, how well the new law will be applied and how the courts will interpret it. The mismatch between intention, interpretation and application has been a key failure of the RMA and we cannot afford to let that happen again.”
August - September 2021
hirteen regional councils in the state have been given a $350,000 grant to appoint and upskill staff, improve technology and engage planning panel to reduce assessment times by at least 25 per cent. New South Wales (NSW) Minister for Planning and Public Spaces Rob Stokes says the program would speed up assessment times for regionally significant development applications for projects valued at more than $30 million. “This will enable complex projects to get up and running more quickly by cutting determination times from an initial baseline of 366 days to 275 days by June, 2023,” Stokes says. “More resources for councils means better outcomes for the community. “This program will help get shovels in the ground sooner to deliver new
Australia to slash planning times by 25 percent The New South Wales State Government will spend $4.5 million on a pilot program aimed at slashing assessment times for regionally significant development applications, The Urban Developer reports homes, vital infrastructure and create more jobs.” Developments are considered as regionally significant if they are valued at more than $30 million or more than $5 million for council-related development projects or those lodged on behalf of the Crown. Stokes says the 13 councils included in the pilot program were selected
based on the number of regionally significant DAs received or their assessment times to allow the program to have maximum impact. UDIA New South Wales chief executive Steve Mann says the pilot program is a step in the right direction, but the state would still be the worst in the country for assessment times. “If NSW aims to be the
Premier state in everything it does, why when it comes to the planning system, are even the proposed improvements keeping NSW last behind the other states,” Mann says. “NSW needs to get more ambitious if it is to tackle the housing and affordability crisis we face throughout the state.” theurbandeveloper.com propertyandbuild.com 55
August - September 2021
he system came into effect on 1 July 2017, after substantial legislation changes were made around how earthquake-prone buildings are identified and managed in New Zealand. A recent evaluation shows that there is broad support for policy development and design, and that the system was adequately implemented. “The report also provides useful information for us to act upon to help us continually improve the system over the next 50 years, such as improving the information and guidance MBIE provides to owners of earthquake-prone buildings,” says MBIE Manager Building Policy Amy Moorhead. All priority earthquake-prone buildings
Getting control of earthquake management The MBIE says the earthquake-prone building system is working well overall have been identified by the 38 territorial authorities located in high seismic risk areas. The Building (Earthquake-prone Buildings) Amendment Act 2016 introduced a schedule for Territorial Authorities (TA) to report to MBIE on progress toward identifying potentially earthquake-prone buildings. Previously, TA set their own policy and
timeframes. MBIE says these changes were introduced to ensure the way buildings are managed for future earthquakes is consistent and strikes a balance between protecting people; the costs of strengthening; and the impact on New Zealand’s built heritage. Priority buildings include those that are considered higher risk because of their
construction, type, use or location. This includes buildings such as hospitals, schools and emergency centres. Buildings come to the attention of TA because they meet certain criteria that indicate that a building could potentially be earthquake prone. The TA then contact the building owners, who have the building assessed.
IDENTIFYING POTENTIAL EPBs IN HIGH AND LOW SEISMIC-RISK AREAS 30 June 2020
New Zealand is extremely prone to seismic activity. Failure of buildings, or parts of buildings, can endanger lives. Protection of people and property is paramount. The Building Act 2004, as amended in 2016, requires territorial authorities (TAs) to identify potentially earthquake-prone buildings (EPBs) and to report their progress on a set schedule to MBIE.
KEY STEPS 1
TAs manage buildings in the high seismic-risk area
have identified all potential priority EPBs
potential priority EPBs identified in the last 12 months
estimated potential non-priority EPBs to be identified by 1 July 2022
TAs to identify potential EPBs
2 All identified potential EPBs require an engineering assessment
TAs manage buildings in the low seismic-risk area
TAs have started identifying non-priority buildings
priority buildings exist in the low seismic-risk area
Seismic risk areas
high seismic-risk area
TAs decide if a building is earthquake prone
medium seismic-risk area low seismic-risk area (Map indicative only)
4 Owners of EPBs must take action (i.e strengthen or demolish) within set timeframes
222 1 JULY 2019
1 JANUARY 2020
1 JULY 2020
1 JULY 2021
TAs report on high and medium seismic-risk areas
TAs identify all potentially priority EPBs in high seismic-risk areas
TAs report on high and low seismic-risk areas
TAs report on high and medium seismic-risk areas
estimated potential non-priority EPBs to be identified by 1 July 2032
1 JULY 2022 TAs identify all potential non-priority EPBs in high seismic-risk areas
TAs identify all potential priority EPBs in medium seismic-risk areas
TAs report on high seismic-risk areas
August - September 2021 170°E
Seismic Risk Areas Territorial Authorities
as defined in the Building Act 2004
1. Far North District 2. Whangarei District 3. Kaipara District 4. Auckland 5. Thames-Coromandel District 6. Hauraki District 7. Waikato District 8. Matamata-Piako District 9. Hamilton City 10. Waipa District 11. Otorohanga District 12. South Waikato District 13. Waitomo District 14. Taupo District 15. Western Bay of Plenty District 16. Tauranga City 17. Rotorua Lakes 18. Whakatane District 19. Kawerau District 20. Opotiki District 21. Gisborne District 22. Wairoa District 23. Hastings District 24. Napier City 25. Central Hawke's Bay District 26. New Plymouth District 27. Stratford District 28. South Taranaki District 29. Ruapehu District 30. Whanganui District 31. Rangitikei District 32. Manawatu District 33. Palmerston North City 34. Tararua District 35. Horowhenua District 36. Kapiti Coast District 37. Porirua City 38. Upper Hutt City 39. Hutt City 40. Wellington City 41. Masterton District 42. Carterton District 43. South Wairarapa District
44. Tasman District 45. Nelson City 46. Marlborough District 47. Kaikoura District 48. Buller District 49. Grey District 50. Westland District 51. Hurunui District 52. Waimakariri District 53. Christchurch City 54. Selwyn District 55. Ashburton District 56. Timaru District 57. Mackenzie District 58. Waimate District 59. Waitaki District 60. Central Otago District 61. Queenstown-Lakes District 62. Dunedin City 63. Clutha District 64. Southland District 65. Gore District 66. Invercargill City
6 7 9
67. Chatham Islands 52
Z factor area High (Z ≥ 0.3)
Medium (Z ≥ 0.15 to Z < 0.3) Low (Z < 0.15)
Z factor contours
August - September 2021
Preventing collapsing structures
Sustainable construction has become a goal for owners across the globe, says Cortec’s Ivana Liposcak
ften overlooked is the durability and service life for the final structure. This is undoubtedly one of the main factors influencing structural sustainability. Durability is the basis for the preservation of reinforced concrete structures long-term. The durability depends on a good and professional choice of materials that help to avoid damage. If damage has occured, rehabilitation should be approached with great care with the selection of a product that is compatible with material used during construction. The durability and design of structural lifetime is often around 50 years, but it can be greatly extended with regular maintenance Crumbling Infrastructure Is a worldwide problem and maintenance is essential to avoid fatal tragedies like the recent Florida collapse. Even though some engineers argue that corrosion on its own was unlikely to bring down the building, it could have been a critical issue if it occurred on or near the supporting columns and was progressive. What exactly happened with this residential building is still to be finally determined but current evidence indicates that rebar corro58 propertyandbuild.com
sion and concrete spalling might have caused the structural failure. Harsh environmental effects in Florida on steel and concrete structures are well known. Reports point to abundant cracking and spalling in the concrete columns, beams and walls in the parking garage located under the building. In 2018, the Morandi bridge collapsed in Genoa, Italy—another tragic accident indicating how neglecting corrosion can have fatal consequences. Engineers voiced concerns about its unusual concrete-encased common steel cables. The designer of the bridge had warned decades ago that it would require constant maintenance to remove rust, given the effects of corrosion from sea air and pollution on the concrete. Also, the problem of fatigue corrosion on metal elements, particularly insidious in steels of high mechanical strength such as strands, is still a little-known subject. “As this reinforced and prestressed concrete bridge has been there for more than 35 years, corrosion of tendons or reinforcement was a contributory factor,” said Ivana Liposcak, Cortec’s Migratory Corrosion Inhibitor (MCI®)
technical support manager for Europe. “The long-term behavior of viaducts subjected to heavy traffic and situated in [an] aggressive environment shows that at the time of planning, obviously many concepts about the sustainability of the bridge were not known and considered. “Due to the vibration in concrete, microcracks occur, through which the moisture leads to oxidation and corrosion of steel and in that way, [the] structure gradually loses its capacity due to corrosion,” says Liposcak. In the last two decades there have been huge advances in technology to extend the lifespan of structures and avoid possible tragedies. Patented MCI® technology was designed to protect reinforcing metal in concrete from corrosion. By using this technology, corrosion initiation is delayed, and the lifecycle of structures is
significantly extended. The Maslenica Bridge in Croatia, one of the largest bridges of its type with an arc of 200 meters in diameter. Because of the aggressive environment of changing temperatures, constantly fluctuating humidity, and strong wind containing salt from seawater, reinforcing steel had started to corrode, causing concrete spalling. To restore the bridge and prevent future corrosion from happening, all spalling concrete was water-blasted off, along with dirt and corrosion on the rebar. CorrVerter® MCI® Rust Primer was brushed on exposed rebar to passivate the metal from further corrosion, and MCI®-2020 was applied to the entire concrete structure using an airless sprayer to prevent any potential corrosion that was not apparent. www.cortecvci.com
August - September 2021
Kiwi innovation leading the way in concrete slab insulation
Why do I need to insulate the concrete slab? Slab insulation is important not only to save on energy bills for future owners and tenants, but also to improve comfort. Insulation will reduce heat loss and make the slab easier to heat. It offers a layer of projection against moisture and will provide a thermal mass to regulate temperatures. If embedded floor heating is incorporated in a concrete slab-on-ground, the slab must be insulated so that heat from the slab is delivered up into the space above and not lost to the exterior and ground below.
A new generation of Expanded Polystyrene Board insulation has arrived
Wayne Watson Technical Manager EXPOL doing a visual check of SLABX200 to ensure it meets EXPOL’s high technical specifications.
What makes SLABX200 different? We chatted to Wayne Watson a Structural EPS and GeoFoam Consultant at EXPOL to see what makes SLABX200 different. Wayne told us that due to its compressive strength rating of 200Kpa there is no comparable product on the market. He states “SLABX200 is specifically designed for insulating concrete slabs. It has a rating of 200kpa at 10 percent compression or 20 ton per square meter.
Its high performance specs are designed to give Engineer’s peace of mind so that they can recommend this product with 100 percent confidence”. The team at EXPOL recognised that there was nothing on the market that offered a cost-effective yet high performance solution to concrete insulation. So they set about to develop a product with New Zealand residential and commercial projects in mind. The durable nature of SLABX200 means that it won’t degrade over time, keeping its integrity for the life of the structure. Due to the lightweight nature of Expanded Polystyrene the product is also easy to handle and install making quick work of slab insulation on site. How does this product compare to Healthy Homes standards? The Healthy Homes insulation standards across New Zealand states than underfloor insulation should have an R-Value of 1.3 or
greater. With several thicknesses available SLABX200 ranges from an R-Value of R 1.5 at 50mm thickness through to an impressive R6.0 at 200mm thickness. Therefore, all thicknesses offer R-Values over and above the standards to ensure healthy and efficient homes. How does this product work in my sustainable building project? The team at EXPOL are committed to the environment. In a true closed loop process 100 percent of manufacturing waste is recycled in their seven recycling plants nationwide. Expanded Polystyrene offers great eco credentials and at the end of a products life it can be turned into other EXPOL products. The high performance of the SLABX product also ensures that your building project is sustainable to heat and cool and therefore leading to less energy consumption over the life of the building.
If you’d like to learn more about the SLABX200 product, the team at EXPOL are happy to have a chat. Visit their website on www.expol.co.nz or give the Technical Manager at call on 0800 86 33 73. propertyandbuild.com 59
LABX200 is specifically designed to deliver high compressive strength and improve insulation under concrete slabs. Developed by trusted Kiwi insulation experts EXPOL, this exciting new innovation has quickly become the product of choice for specifiers and others in the construction industry.
August - September 2021
he survey which asks questions about expectations of market fundamentals over the year ahead showed national confidence to have reached a net positive result of 38%, surpassing the previous high of 32% recorded in the final quarter of 2018. The proportion of those holding an optimistic view of prospects for the year ahead stood at 51% in June 2021, the highest on record. Correspondingly, the proportion of pessimists fell to the lowest level since December 2018. The result is even more remarkable given that it comes just 12 months after sentiment had fallen to a net negative rating of -19%. Sectoral variances continue While overall sentiment is positive, there continues to be a variance in confidence levels across asset classes. The overall score is heavily 60 propertyandbuild.com
Property investor confidence hits record highs Investor confidence across New Zealand has hit a record high, according to Colliers’ latest commercial and industrial investor confidence survey driven by the extremely positive outlook for the industrial sector, which has proved to be the most resilient over the last year. Despite easing from peak levels reached in March 2021, it continues to generate the highest rating with a net positive score of 63.8%. But it’s not all about the industrial sector. Views on the prospects for the office market have rebounded strongly. In June 2020, confidence
stood at a net negative -25.7%, the lowest rating recorded since September 2010. Confidence returned to positive territory in the closing quarter of 2020, but has strengthened significantly, generating a net positive rating of 29.1% in June 2021. While the retail sector’s rating, a net positive 3.9%, appears low in comparison, it is a remarkable turnaround in sentiment from June 2020 when its rating
stood at a record low of 67.4%. Furthermore, the June 2021 figure is the first time a net positive score has been recorded in two and a half years and its highest since late 2017. It’s a national story The increase in commercial and industrial investor confidence has been reflected across the country with all 13 regions surveyed recording net positive
67.4%. Furthermore, 2021to figure is the first time a net been easing industrial sector whichthe hasJune proved be the most resilient overpositive the lastscore year.has Despite recorded in two and a half years and its highest since late 2017. A ugust - September from peak levels reached in March 2021, it continues to generate the highest rating with a net 2021 positive score of 63.8%.
It’s a national story
and NThe atioincrease nal inveinstcommercial or confiden ce industrial investor confidence has been reflected across the
country with all 13 regions surveyed recording net positive scores, only Pessimistic the third time this has Optimistic Neutral 70% since the survey began. occurred
Percent of respondents
Across 60% the three main centres, Wellington led the way with a net positive score of 35.4% only slightly ahead of Christchurch at 31.7%. While still comparably strong, Auckland registered a net50% positive 30.0%.
Source: Colliers Research
New Zealand Research Report | August 2021 | Colliers Research
National investor confidence by sector 80%
New Zealand Overall Industrial
National investor confidence by region Jun-20
Net Percent -75% -50% -25%
25% 50% 75%
Whangarei Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21
Palmerston North Wellington New Plymouth Auckland Christchurch
New Zealand Overall
Source: Colliers Research Note:only Net percentage of respondents who are optimistic versus pessimistic scores, the third time positive score of 61%. quarter survey and was
this has occurred since the survey began. Across the three main centres, Wellington led the way with a net positive score of 35.4% only slightly ahead of Christchurch at 31.7%. While still comparably strong, Auckland registered a net positive 30.0%. From a regional market perspective, Hawke’s Bay generated the highest proportion of positive responses in June 2021 with a net
This saw Hamilton slipping to second place overall having topped the regional list in March 2021. Third place went to Nelson with a net positive 54.8%. Regions with economies heavily dependent upon tourism saw sharp declines in confidence ratings during 2020, but have all rebounded. Queenstown generated a net negative score of -14% in the September 2020
Reasons for optimism the only region to register and caution evolving New Zealand Research Report | August 2021 | Colliers Research 2 negative sentiment in the Survey participants have March 2021 survey. Robeen asked to outline pritorua’s net score was -15.7 mary reasons for optimism at the end of 2020. and pessimism over the Both regions, however, year ahead. have mirrored the national The primary reasons for trend with sentiment lifting optimism cited have been sharply over recent months. the strong performance of Queenstown registered a New Zealand’s economy, net positive score of 36.5% successful management of in June 2021, while confithe pandemic and the low dence was even higher in interest rate environment. Rotorua with a rating of Further underpinning 44.8%. sentiment is the increaspropertyandbuild.com 61
From a regional market perspective, Hawke’s Bay generated the highest proportion of positive 40% responses in June 2021 with a net positive score of 61%. This saw Hamilton slipping to second place 30%overall having topped the regional list in March 2021. Third place went to Nelson with a net positive 54.8%. 20% Regions with economies heavily dependent upon tourism saw sharp declines in confidence ratings 10% during 2020, but have all rebounded. Queenstown generated a net negative score of -14% in the September 2020 quarter survey and was the only region to register negative sentiment in the March 2021 survey. Rotorua’s net score was -15.7 0% Chanat gethe in Rend etail Sof ale2020. s Value By Region Both regions, however, have mirrored the national trend with sentiment lifting Dec 2020 sharply – Mar 202over 1 recent months. Queenstown registered a net positive score of 36.5% in June 2021, while confidence was even higher in Rotorua with a rating of 44.8%.
ing momentum of vaccine rollouts, both nationally and internationally, raising the prospects of the easing of border restrictions. The most cited reasons for caution were the prospect of rising interest rates and the possibility of further lockdowns resulting from a re-emergence of COVID-19 in the community. It is likely that the latest survey results will show optimism at or close to the peak of confidence in this cycle as monetary policy becomes less accommodative. With positive property market fundamentals in play though, a moderation in optimism, as opposed to a sharp correction, is the most likely scenario. However, we still expect to see high levels of net positive confidence ahead.
March 2021, the June 2021 quarter’s rating of 62.5% is the fourth highest on record and significantly ahead of the long-term average of 35.2%. Results of surveys over the last year illustrate the rapid change in sentiment surrounding the residential market. A net negative score of -15% in the June 2020 survey reflected initial concerns that the impact of the Covid-19 pandemic could result in a significant fall in values. A majority of respondents in nine of the 13 regions surveyed expected values to fall over the year
ahead while values were expected to rise in just two. Concerns, however, dissipated quickly as value growth accelerated in the second half of the year, supported by a lower interest rate environment. By December 2020 the outlook for values was heavily skewed towards growth in all regions. Sentiment buoyed by market’s strong performance The positive sentiment across the country was again reflected in the June 2021 survey. The regions generating the highest net
positive scores were Hamilton at 69.2% and Hawkes Bay at 67.1%. Both have edged ahead of Tauranga / Mt Maunganui which topped the rankings in both the December 2020 and March 2021 surveys. Confidence has also remained high across the major centres with Auckland, Wellington and Christchurch all generating net positive scores of between 52% and 58% in the latest survey. Regulatory changes moderate views... Changes in government and Reserve Bank policies
Residential market confidence remains at elevated levels Confidence in the outlook for residential property market pricing uplifts across the country remained at elevated levels in the second quarter of 2021, according to results from Colliers’ latest residential property market outlook survey. While down from the record high net positive score of 72.8% recorded in
National residential median price outlook 80% Net Percent
New Zealand Overall
60% 40% 20% Jun-21
August - September 2021
Source: Colliers Research Note: Net percentage of respondents who expect the median price to increase versus decrease in the next 12 months
Reasons for optimism and caution evolving
aimed at cooling the market tightening of LVR rules, Regseemingly ulatory slowed changes mwhich odercould ate vbeieimplementws….. have market pricing expectaed in October 2021, and the Changes in government and Reserve Bank policies aimed at cooling the market have seemingly tions. possible introduction of a slowed market pricing expectations. The Reserve Bank has indicated that that it is to phase out the The Reserve Bank has debt-to-income restrictions. stimulus measures put in place to support the economy through the Covid-19 pandemic. It is indicated that it is to phase increasingly therefore increases in interest rates will begin prior to the end of the year. out the stimuluslikely measures Butthat bolster confidence in put in investor place to support new build sector The sector faces the additional headwinds following the reintroduction of LVR restrictions and the economy through the The government howthe extension of the bright-line test to 10 has, years. Other proposals are currently under consultation Covid-19 pandemic. It is ever, looked to support the including the ending of the ability of investors to offset interest on loans used for residential increasingly therefore of income new houspropertieslikely as an expense development against their from those properties. that increases in interest ing by skewing demand to More thetoReserve Bank rates willrecently begin prior the the new has buildadvised sector. that it is to consult on further tightening of LVR rules, which could October 2021, and the possible introduction of a debt-to-income end of the year. be implemented It is in therefore proposing The investor sector faces that, for new build premrestrictions. additional headwinds ises, the brightline test But bothe lste r confidence in thbee held newat bfive uilyears d s e ct or following reintroduction should ofThe LVRgovernment restrictions and thehowever, while interest has, lookeddeductibility to support the development of new housing by skewing extension of the bright-line allowances will remain. demand to the new build sector. It is therefore proposing that, for new build premises, the brighttest to 10 years. These policy positions InSource: all locations, confidence Looking to Research the short-term New Zealand Green Building Colliers line test should be held at five years while interest deductibility allowances willCouncil, remain. *Includes Rating, Office future, Built Rating & Custom Design Rating Other proposals are curhave underpinned conwas higherOffice for Design new build confidence levels are These policy positions have underpinned in the new build sector, reflected in results from rently under consultation fidence in the new confidence build stock - both apartment likely to moderate as the including ending Respondents of the sector,on reflected in results Wellington and terraced and detached impact of the new regulaColliers’the surveys. the Auckland, Christchurch and Queenstown markets ability of investors to offset from Colliers’ surveys. housing, than for existing tory backdrop is assessed are asked for their views as to how various sub-sectors of the market will perform over the year interest used for confidence Respondents the Auckproperty. and value slows. ahead.onInloans all locations, wason higher for new build stock - both apartment andgrowth terraced and residential land, Wellington Christ- Sentiment Sentiment the new Sentiment levels, however, detachedproperties housing,asthan for existing property. withinwithin the new terraced and detached an expensesector againstwere their particularly church and Queenstown and detached well underpinned by housing strong in Auckland terraced and Wellington, generatingremain net positive scores of income from those propermarkets are asked for their housing sector were parthe market’s strong perfor63.4% and 63.2% respectively. ties. views as to how various ticularly strong in Auckland mance. Looking to the future, confidence levels are to moderate More recently theshort-term Reserve sub-sectors of the market and likely Wellington, generatingas the impact of the new regulatory backdrop andover value slows. Sentiment levels, remain well Bank has advised that it is assessed will perform thegrowth year net positive scores of 63.4%however, colliers.co.nz by the market’s strong performance. and 63.2% respectively. isunderpinned to consult on further ahead.
New Zealand Key Economic Indicators – July 2021 Mar-21
(vs. previous (vs. previous quarter) quarter)
GDP Current Account (% of GDP) Retail Sales (ex-auto) Net Migration Change (000's)
CPI Inflation Unemployment Rate
Tourist Numbers Growth
Official Cash Rate 90 Day Bank Bill Rate 10 Year Government Bond Floating Mortgage Rate 3 Year Fixed Housing Rate Consumer Confidence NZD vs: US UK Australia Japan Euro Source: NZIER, Colliers Research
1.6% NA 2.5% 4
-1.0% NA -1.8% 35
Mar-21 Vs Mar-20
Mar-20 vs. Mar-19
2.6% NA 4.3% -30
2.4% -2.2% 7.0% 4
0.0% -2.8% 4.0% 90
2.4% 0.6% 3.0% -86%
Q-o-Q Change 0.0% -0.4% M-o-M Change 80.4%
0.25% 0.40% 1.8% 0.04% 3.4% 114
0.25% 0.30% 1.7% 0.04% 3.4% 115
M-o-M Change 0 bps 7 bps 13 bps -1 bps 2 bps -1%
0.73 0.53 0.93 76 0.59
0.72 0.52 0.93 76 0.60
1% 0% 0% 0% 0%
Average Year To Jun-21
Y-o-Y Change 1.4% 0.3%
2022F 2.8% -8.7% 7.0% 2
2023F 3.4% -9.5% 3.8% 10
2024F 3.8% -10.4% 4.6% 19
2022F 2.9% 4.0%
2022F 1.9% 3.6%
2023F 2.0% 3.6%
March Quarter May-20 Y-o-Y 10 Year (yr rate) Change Average 2022F 2023F 2024F -98.9% 2630.5% -12.2% -57.9% -0.2% 10.5%
May-20 0.3% 0.3% 0.6% 4.5% 4.1% 97 0.61 0.49 0.93 65 0.56
Y-o-Y 10 -Year Change Average 0 bps 1.91% 10 bps 2.10% 117 bps 2.9% -13 bps 5.7% -69 bps 5.4% 17% 119 20% 6% -1% 17% 7%
0.73 0.51 0.90 76 0.61
2022F 0.5% 0.6% 1.5% 4.5% NA NA
2023F 1.0% 1.0% 1.9% 4.5% NA NA
2024F 1.5% 1.6% 2.1% 4.5% NA NA
0.69 0.50 0.90 71 0.61
0.67 0.47 0.88 71 0.63
0.66 0.45 0.86 71 0.65
4 propertyandbuild.com 63
New Zealand Research Report | August 2021 | Colliers Research
August - September 2021
August - September 2021
his is mainly off the back of affordability pressures, the 40% deposit requirement and extended bright-line test for investors, the tightening of interest deductibility rules, as well as the approval for the Reserve Bank of New Zealand (RBNZ) to look at debt to income restrictions. Perhaps most urgently, the housing market is likely to be affected by signalled tighter monetary policy, which CoreLogic has been flagging for some time. Though the RBNZ held the official cash rate (OCR) unchanged at 0.25%, major banks have already started raising fixed-term mortgage interest rates. The recent uptick in mortgage interest rates is just the latest influencing factor in the New Zealand residential property investment landscape. Crunching the numbers for mortgage-holders The upward lift in interest rates by ASB, ANZ, BNZ and Westpac will impact new borrowers. For example, a 0.36% increase resulting in a 2.95% initial interest rate equates to additional repayments of $1,824 per year ($152 per month) across a recent home buyer’s $800,000 mortgage on a 30 year home loan term. Should interest rates keep rising, and reach the longterm average of 6% (which for now is a scenario-based indication, rather than an actual forecast), that same new buyer would pay an extra $19,164 in mortgage repayments per year ($1,597 per month), or around $4,800 per month in total repayments across the balance of the home loan term. Even a new borrower with a ‘lesser’ mortgage, say $500,000, will need to 64 propertyandbuild.com
Is this the turning point of New Zealand’s property market? CoreLogic’s quarterly market report indicates that the market is close to – or at – a turning point, Chief Property Economist Kelvin Davidson explains find another $246 to $388 a month ($2,952 to $4,656 a year) in repayments if rates move up to 3.5% or 4%. Those who have entered the housing market since 2014, the last time the OCR increased, have only experienced low interest rates, so the effects of a pattern of increases will likely come as a shock to many of those with a hefty mortgage, which includes many who have bought recently in Auckland and Wellington,
the most expensive markets. For those still trying to buy their first home, interest rate increases will raise the bar to entry. That said, an actual increase in the official cash rate is the next step in removing the emergency support for the economy. This directly affects the housing market, with borrowers already seeing mortgage rates increase – and from a low base for rates, as well as larger debts, that could
have quite a strong dampening effect on the market. Certainly, mortgaged investors’ share of property purchases has fallen in the past two to three months. On the whole, these events reinforce our view that sales activity and price growth are close to or at a peak and over the coming months sales activity and the pace of value growth are likely to ease. That is simply reinforced by the fact that the Government’s
August - September 2021
Notable shifts in market patterns After a hot start to 2021, sales volumes have eased back a little, running at about the same levels as 2019, with 2020 not a fair comparison. The continued lack of listings is still a restraining influence on achieved sales volumes, but CoreLogic data on valuations ordered by banks – as an early indicator of borrowers applying for loans – also suggests demand has eased too. That shouldn’t come as a surprise, especially since a number of deals would have already been pulled forward from later in the year to beat the tighter LVR rules on 1 March and 1 May. In the mortgage market, our analysis suggests activity has held up better than anticipated likely due to ‘other’ lending such as topup loans, bank switches, and possibly early breaks of fixed loans. The monthly gains on the CoreLogic House Price Index have also eased a little in recent months – from 3.1% in April, to 2.2% in May, and 1.8% in June. As sales activity dips over the months, it’s also likely that a slowdown for values will become more evident, although house price falls still seem unlikely in this cycle. In terms of the tax changes at the end of March, the effects so far aren’t
overwhelming – we haven’t seen a mass sell-off by current landlords or clear evidence yet of a large spike in rents. It’s important to note that our Buyer Classification series does show a clear drop in market share for mortgaged investors since March, but we suspect most of that is due to the 40% deposit requirement rather than necessarily the extended bright-line test or removal of interest deductibility. However, as the months pass, we would anticipate the tax changes to have a greater effect, and certainly push investors towards new-builds rather than existing properties – especially if the ability to claim interest as a tax deduction applies indefinitely for the first owner (investor) of a new-build. First home buyers and next moves from RBNZ On the flipside of the investor situation, there are signs that first home buyers (FHBs) have become more successful in accessing the market in the past few months, after a struggle in the first quarter of the year. However, they’ve traditionally been quite keen on new-builds, so an influx of investors may not be ideal from a FHBs’ perspective. As the market cools over the coming months and into 2022, we should see ‘normality’ return for sales activity and price growth, and the strains on would-be FHBs in terms of trying to save enough for their deposit to keep pace with the market aren’t as intense. Another notable development in the past few months is that the RBNZ has been given permission to design and implement a system for capping debt
to income (DTIs) ratios for mortgages, potentially at seven for owner occupiers and perhaps six for investors. We think the market will have slowed of its own accord by the end of the year, hence DTIs won’t be required in this cycle. The market outlook The outlook for the economy and inflation will also have a large bearing on the housing market, and the good news is that New Zealand’s GDP expanded strongly (1.6%) in Q1 2021 and the unemployment rate has now fallen for two con-
secutive quarters (to 4.7%). However, solid demand hitting up against supply/ capacity pressures, such as due to COVID-related shipping delays, is starting to create higher inflation (3.3% in the year to Q2), which in turn will see the OCR and mortgage rates rise. Indeed, mortgage rates have already risen and more increases are likely, and given that mortgages are larger than before in dollar terms, any rate rise will tend to have a greater impact on household finances. Read the full report
Kelvin Davidson Senior Research Analyst CoreLogic 027 355 3813 email@example.com corelogic.co.nz propertyandbuild.com 65
tax changes at the end of March, while not having a major impact yet, will start to have a greater effect as the months pass and the ability to claim interest deductions is slowly phased out for current landlords. However, with unemployment low and in the absence of a GFC-style credit crunch, a full-on property downturn seems unlikely.
August - September 2021
Further P mortgage restrictions coming as house price growth continues The Reserve Bank of New Zealand has announced plans to tighten mortgage lending standards, with the latest CoreLogic data showing nationwide property values increased by 1.8% over July
roperty price growth has not slowed since June, which recorded the same 1.8% increase. While this is down on both May (2.2%) and April (3.1%), CoreLogic NZ’s Head of Research Nick Goodall says a market this size can take some time to slow. “In order to prevent this problem from getting worse, the Reserve Bank will be consulting on a proposal to further reduce the amount of high LVR lending to owner-occupiers,” Deputy Governor and General Manager for Financial Stability Geoff Bascand says. “We propose to restrict the amount of lending banks can do above an LVR of 80 percent to 10 percent of all new loans, down from 20 percent at present. We will begin consulting on this change later this month with a view to introducing it from 1 October 2021. “We also intend to consult in October on implementing Debt-to-Income (DTI)
restrictions and/or interest rate floors in an effort to provide further comfort that borrowing is sustainable. Introducing DTIs will take longer, whereas the banking industry has informed us that interest rate floors could be implemented more quickly. “Consultation will be focused on operational feasibility and possible calibration of these tools, including their impacts on investors and first home buyers,” Bascand says. “We are focussed on ensuring borrowers are resilient to a range of future economic and financial conditions. We are particularly concerned about those who have borrowed in the past 12 months at high LVRs and high DTIs. “If house prices were to fall, some buyers could face the possibility of negative equity – which means the value of their property is below the outstanding balance on their mortgage.
“We’ve already made adjustments to Loan-to-Value Ratio (LVR) restrictions to partially manage this risk, but we haven’t seen a sufficient reduction in risky lending,” Bascand says. This is evidenced in the latest RBNZ lending data where new residential mortgage lending remains elevated compared to the long-run average prior to the pandemic, which hit our shores in March 2020. The total value of new mortgage commitments in June 2021 was $8.5b, well above the two-year average to February 2020 of $5.6b. Goodall says with an asset class the size of the residential property market, which now exceeds $1.54Tn and remains attractive due to still-low interest rates, any slowdown was destined to be gradual. “Despite some investors unable or unwilling to remain active in the market, a strong pipeline of equity-rich investors, previously unsuccessful first home buyers and other owner occupiers who remained patient are now taking this opportunity to seize on low interest rates before they lift any further,” says Goodall. Highlights from the CoreLogic HPI for July 2021 Analysing the CoreLogic HPI quarterly change in values, the slowdown becomes very apparent, with the nationwide growth figure dropping from 7.2% at the end of June to 5.9% at the end of July. This trend of deceleration is also clear across almost all main urban areas. Property values in Gisborne increased by 2.1% over the last three months. This is the lowest quarterly growth rate since August 2020 (-0.2%) when uncertainty still remained re-
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garding potential COVID-19 lockdowns, and is significantly lower than the 10.2% growth witnessed over the three months to the end of June 2021. Other centres seeing a significant reduction in the rate of quarterly growth at the end of July include Kapiti Coast District (3.3%, down from 10.6% at the end of June), Rotorua (1.9%, down from 6.9%) and Napier (2.8%, down from 7.1%). The only city to experience a lift in quarterly growth was Nelson, with 5.0% growth to the end of July, up from 4.8% for the three months to the end of June. Meanwhile the annual growth rate in Whanganui exceeded 40% at the end of July, the fastest rate of growth since September 2005 when the average
value was $165,000. The average value now exceeds $500,000. While the quarterly change in values has started decelerating, the prolonged period of value increases over the past 12 months is still evident in the annual measure and current average value. The 6.1% quarterly growth experienced in Hamilton is still strong, however it is a noticeable drop from the double digit increase in the three months to the end of June. Speaking on the main centres, Goodall says the slowest rate of growth among our largest six cities was Dunedin with an increase of 4.5% in the three months to the end of July. “Property values have more than doubled there in the last six years, rising
from $296,000 in July 2015 to $646,000 today. However we’re starting to see sales turnover in Dunedin slowing, with 30% fewer sales in June 2021 than in June 2020. “Meanwhile, sales transactions in all other main centres were at least on par with the previous year and in Hamilton’s case, up 19%.” “This could be a reflection of the deterioration in affordability for property in the ‘Edinburgh of the South’. According to CoreLogic’s ‘years to save a deposit’ affordability measure, Dunedin has gone from being the most affordable main centre for new market entrants in 2015 to equal third with Hamilton, behind Christchurch and Wellington,” says Goodall. Dunedin is also bucking propertyandbuild.com 67
August - September 2021 a trend seen over recent months of historically low listings. “Low listings can have a suppressive effect on sales volumes, however in Dunedin in July there were 21% more properties listed for sale than the same time in 2019, while all other main centres still remain at least 30% below levels seen in 2019,” Goodall explains. “This is probably the strongest sign yet of a swing in demand and supply back towards the buyer, and with yields being squeezed by increasing interest rates alongside tighter investor regulation, it would be understandable if investors were calling time on paying the current prices being advertised. “It’s these measures, alongside other economic indicators which could provide the best read on what values do throughout the rest of the year and into 2022. Expectations of a lift in the OCR are increasing every day, and while higher interest rates on their own don’t tend to cause values to drop, the RBNZ will be mindful of the potential impact to highly indebted recent buyers,” says Goodall. As the RBNZ carefully considers its upcoming OCR decision on August 18, Goodall says it may take some comfort in the resilience of the country’s housing values. “With the market still growing, albeit at a slower pace, this may give the RBNZ a level of comfort to lift the OCR without major concern of it having too negative an effect on values,” Goodall says. “In conjunction with expected strong labour market figures due out on Wednesday, including a probable drop in the 68 propertyandbuild.com
unemployment rate for Q2 to at least 4.5% (from the current figure of 4.7%), an OCR increase looks almost certain. “The RBNZ longer term will probably be cautious of lifting too far too soon, and we expect they will take their time to assess how Q3 plays out before any big movements in spring.”
Nick Goodall Head of Research CoreLogic 021 557 946 firstname.lastname@example.org corelogic.co.nz
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August - September 2021
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August - September 2021
Climate change kicks into gear
New Zealand has warmed up by 1.1 degrees and annual temperature changes have emerged above natural variability over the country in the last 110 years, according to the Intergovernmental Panel on Climate Change report east of both islands, with less rainfall in the west and central North Island. Glaciers have retreated and are projected to retreat further. Rain will increase in southern New Zealand. A general increase in annual maximum precipitation even in some areas of decreased annual precipitation. Some projected changes show important seasonal differences. Meanwhile, Borge Brende, president of the World Economic Forum, says the new report shows the recent global forest fires and floods of recent weeks delivered a clear message: the world needs to stop putting carbon in the atmosphere. “Extreme heat is not a future problem. It is already here. 2010 to 2019 was the hottest decade ever recorded, and temperatures will continue to rise unless dramatic action is taken. Industry is responsible for nearly a third of global emissions.” The evidence is “indisputable” that human activity is causing climate change, that it is happening to a greater extent and at a faster pace than earlier research findings indicated. Humanity must reduce emissions of greenhouse gasses by a lot and must prepare for the impact of climate change caused by past, present and future emissions.
cientists are observing changes in the Earth’s climate in every part of the world region across the whole climate system, the report states. Many of the changes observed in the climate are unprecedented in thousands, if not hundreds of thousands of years. Some of the changes already set in motion, such as continued sea level rise, are irreversible over hundreds to thousands of years. In New Zealand, heat extremes have increased, cold extremes have decreased, and these trends are projected to continue, the report says. “Relative sea level rose at a rate higher than the global average in recent decades; sandy shorelines have retreated in many locations.” Relative sea level rise is projected to continue in the 21st century and beyond, contributing to increased coastal flooding and shoreline retreat along sandy coasts throughout Australasia. Snow cover and depth have decreased and are projected to decrease further. Frequency of extreme fire weather days has increased, and the fire season has become longer since 1950 at many locations, the report says. The intensity, frequency and duration of fire weather events are projected to most likely increase throughout Australasia. Heavy rainfall and river floods are projected to increase as will marine heatwaves. The report says it expects projected increase in winter and spring rainfall in the west and south of New Zealand, with less rainfall in the east and north, and more summer rainfall in the
The far-reaching report is the first released from the IPCC in eight years. The temperatures are rising from a higher level and faster than the previous report. The oceans are becoming more acidic faster than previously estimated. Tolerance for denial and scepticism will likely decline as predicted extreme weather events affect all parts of our planet with growing severity and frequency. New Zealand’s Climate Change Commission’s advice on budgets and ways to reduce emissions is entirely consistent with the evidence and the need for action that is sustained over years to come. Meanwhile, the world strong and sustained reductions in emissions of carbon dioxide (CO2) and other greenhouse gases would limit climate change.
While benefits for air quality would come quickly, it could take 20-30 years to see global temperatures stabilise, according to the IPCC Working Group I report, Climate Change 2021: the Physical Science Basis. The report provides new estimates of the chances of crossing the global warming level of 1.5°C in the next decades, and finds that unless there are immediate, rapid and large scale reductions in greenhouse gas emissions, limiting warming to close to 1.5°C or even 2°C will be beyond reach. Emissions of greenhouse gases from human activities are responsible for approximately 1.1°C of warming since 1850-1900 and finds that averaged over the next 20 years, global temperature is expected to reach or exceed 1.5°C of warming. www.makelemonade.nz infrastructurenews.co.nz 73
August - September 2021
Should the Climate Change Commission's advice be implemented?
A tax on high-polluting vehicles has already been announced and more is yet to come, but will these measures help reduce emissions and at what cost?
The new vehicle emissions incentive scheme will help subsidise electric vehicles, but could tax high-polluting vehicles by as much as $5,000
he Climate Change Commission has released its final advice to the Government detailing what it says are ambitious, achievable and equitable paths New Zealand can take to meet its climate targets. New Zealand has committed to reaching net zero emissions of long-lived greenhouse gases by 2050 and reducing biogenic methane emissions between 24-47% by 2050. The Commission’s role is to provide independent, evidence-based advice to reach those targets. Commission Chair Rod Carr says the advice shows 74 infrastructurenews.co.nz
a thriving, climate-resilient, and low emissions future for is possible, but the work must start now. “Current government policies do not put us on track to meet the Commission’s recommended emissions budgets or the 2050 targets. As a country, we need to fundamentally change our response to climate change. “The technology and the tools Aotearoa needs to reach its climate targets exist today and our evidence shows climate action is affordable.” The Commission has assessed that the level of GDP could be around 0.5%
lower in 2035 and 1.2% lower in 2050 than it would be otherwise. Latest figures show New Zealand’s GDP sitting at $325 billion. 1.2% of that works out to be a cost of $3.9 billion using today’s figures. However, the Commission says delaying key actions like the move to EVs and embedding more efficient farm practices could result in the level of GDP in 2050 falling by around 2.3%. The Commission’s final advice sets out the total amount of emissions New Zealand must cut over the next 15 years. It also provides three different pathways the Government
could follow to keep within the proposed emission budgets. New Zealand has previously relied on forestry plantations to offset carbon, but this is unsustainable. University of Auckland’s Dr Rhys Jones says the Commission’s advice seeks to avoid making the necessary changes to social and economic systems by emphasising high-tech fixes that enable business-as-usual to continue, albeit in a slightly ‘greener’ fashion. “The fixation on electric cars as a way of decarbonising the transport sector, rather than prioritis-
August - September 2021
Infrastructure New Zealand's analysis
ing a mode shift to active and public transport, is an example of the lack of imagination and status quo bias evident throughout the report. We should be centralising strategies that dismantle harmful and fundamentally unsustainable systems,” Jones says. “Unfortunately, public transport options for travelling between towns and cities in New Zealand are few and far between, and too often people feel that hopping in a car (or plane) is the only option,” Victoria University of Wellington Dr Luke Harrington adds. “Until we see a radical change in both the breadth and affordability of options available to move between towns and cities in New Zealand, I struggle to see
December to set the first three emissions budgets out to 2035 and release its first emissions plan. The Government needs to move quickly, but not at the risk of impacting employment while industries adjust to the new low emissions environment. Should the Government choose not to accept the Commission’s advice, it must publish an alternative plan that doesn’t involve just planting trees. Starting in 2022, the Commission will begin monitoring how the Government’s emissions reduction plan is implemented, including how well New Zealand is tracking to meet the 2050 net-zero target. The following are our recommendations. Finance • Improve the Emissions Trading Scheme to provide better incentives to drive low emissions choices. • Make sure all government policy and investment decisions support the transition to low emissions.
Transport • Provide affordable, reliable and convenient low-emission alternatives to high emission vehicles • Introduce measures to make sure vehicles entering the fleet are efficient and to accelerate the uptake of electric vehicles, including options to decarbonise heavy transport and freight. Energy • Develop a national energy strategy to decarbonise the energy system and introduce measures to make sure the electricity sector is ready to meet future needs. • Accelerate the switch to low-emission fuels to process heat, drive energy efficiency improvements, and develop a plan to transform buildings to low emissions. Waste • Reduce emissions from waste through measures that reduce the amount of water generated and increase resource recovery.
how we can reduce our transport emissions to zero within the next three decades.” However University of Canterbury Professor Jamie Shulmeister says the lack of innovative measures is actually beneficial, as working within current practices is much more feasible than a radically redesigned economy. That said, Shulmeister acknowledges that the proposed carbon budgets suggest relatively minor reductions in total from transport short-term with most changes after 2030. “This suggests that we need to look at localised transport (walking and cycling) to achieve some of the required changes. EV usage depends on dropping infrastructurenews.co.nz 75
The Commission’s final advice sets out the total amount of emissions New Zealand must cut over the next 15 years and provides three different pathways the Government could follow to keep within the proposed emission budgets. Overall, the Commission has New Zealand on track for net-zero carbon by 2050, but there are many hurdles to get over than initially proposed when it tabled its draft advice in March. The original estimate has been revised to reflect the latest science and the reality that emissions are still increasing. These revised estimates now mean that the Commission has set higher budgets to reflect the more significant challenge. However, regardless of the size of the task ahead, the Commission has recognised that many of its recommendations, most notably in energy, heavy transport, and electric vehicles, were ambitious and may not be achievable. The Government has until 31
August - September 2021 battery prices which may not be as feasible as people envision given key elements are resource constrained.” Toon Vandyck and Matthias Weitzel from the European Commission’s Joint Research Centre add that if global demand for electric vehicles or batteries exceed production capacities, this could result in a period of higher prices. However, they point out that temporarily higher prices would also stimulate further investment and development in these technologies. A global scale-up of technologies (e.g. renewables like solar or wind, batteries, etc.) typically leads to declining costs from learning and economies of scale. “If global vehicle production was set to have a higher share of electric vehicles than expected, this would likely reduce the cost of batteries and hence electric vehicles, making the transition easier,” say Vandyck and Weitzel. Shulmeister also says a significant change to horticulture from dairying is envisioned.
Farming advocacy group Groundswell NZ organised a series of nationwide protests on 16 July in response to the Government's new regulations “This is possible but in addition to all the likely challenges, it will depend on improved transport and/ or manufacturing so that product can get to market. “There is also a focus on reducing methane emissions per kg of milk solids and meat. This is definitely worthwhile. A pricing mechanism for agricultural emissions is critical but won’t be easy to achieve.” Shulmeister adds that the use of an enhanced ETS does appear to be a sensi-
ble way to drive behaviour for industry. Victoria University of Wellington Professor Justin Hodgkiss says it is important to understand that the pathways presented do not rely on any technologies that are not yet proven. “Future discoveries will undoubtedly accelerate our path to net zero carbon economy, or put more options on the table to get there at lower cost. “I am also struck by the analysis of future employ-
ment. The report acknowledges that employment in will be affected differently in various sectors and regions, with support and planning needed for a just transition. “It is exciting to see the report highlighting the future importance of new jobs in the circular economy, in a new hydrogen industry, in the renewable electricity sector, and even emissions measurement and management. Many of these future jobs will be filled by today’s students,” says Hodgkiss.
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August - September 2021
The three paths to net-zero
BloombergNEF’s analysis of the energy economy's future identifies three very different scenarios in which we achieve net-zero emissions
he New Energy Outlook (NEO) is BloombergNEF’s annual long-term scenario analysis on the future of the energy economy. This year's edition presents three climate scenarios that meet the Paris Agreement and achieve net-zero emissions in 2050. The Green Scenario is a net-zero pathway where so-called ‘green hydrogen’ complements greater electricity use, recycling and bioenergy. The Gray Scenario assumes greater use of electricity and renewable power is complemented by carbon capture and storage technology and allows for the continued use of some fossil fuels. The Red Scenario assumes smaller, modular nuclear is deployed to complement wind, solar and battery technology in the power sector, with dedicated nuclear plants manufacturing so-called “red hydrogen”. This year’s analysis has been designed to support strategy development and long-term planning. Emissions A core part of the BNEF analysis is constructing sector by sector emissions budgets to achieve net-zero in 2050 with an orderly transition. Together these show that global energy-related emissions need to drop 30% below 2019 levels by 2030, and 75% by 2040, to reach net-zero in 2050. This is a 1.75 degree equivalent budget that implies a 3.2% reduction each year to 2030 and a swift reversal of recent trends: emissions rose 0.9% a year from 2015 to 2020. The power sector needs to make the greatest prog-
ress over the next decade, reducing emissions by 57% from 2019 levels by 2030, and then 89% by 2040. Road transport emissions must fall 11% by 2030, then 80% below 2019 levels in 2040. For industry and buildings it’s 16% and 12% down by 2030 and 58% and 55% by 2040. Clean power Electrification plays a large role. Across all scenarios, the use of electricity in industry, transport and buildings raises its share of total final energy to just below 50% in 2050, from 19% today. As a result, electricity generation is almost 62,200TWh in BNEF’s Gray Scenario, more than double the 2019 total. But in the Green Scenario, where electricity is also used to produce large quantities of hydrogen, power generation is twice as large again – more than 121,500TWh, or roughly 4.5-times 2019 levels. This is split between green hydrogen production, which takes 49%, and 51% that is consumed directly in the end-use economy. While the first 1,000 gigawatts of wind and PV took twenty years to deploy, getting to net-zero emissions in our Green Scenario will need about 1,400GW of renewables to be deployed every year, on average, for the next three decades. In the Green Scenario, the market opportunity for renewables is staggering. Primary energy supply Each of net-zero scenario describes major transformations in the primary energy supply. Today, some 83% of primary energy is fossil fuels, while wind and solar PV
August - September 2021
account for 1.3%. In the Green Scenario, which prioritizes clean electricity and green hydrogen, wind and solar grow to 15% of primary energy in 2030, 47% by 2040 and 70% in 2050, split 62% wind and 38% PV. In the Red Scenario, nuclear makes up a whopping 66% of primary energy in 2050, compared with 5% today. In contrast, in the Gray Scenario, where widespread use of carbon capture and storage means coal and gas continue to be used, fossil fuels decline just 2% a year to 52% of primary energy supply in 2050, with wind and PV growing to 26%. Getting on track Achieving net-zero emissions in 2050 means deploying commercially available abatement technologies in each sector this decade. More than three quarters of the effort to cut emissions in the next nine years falls to the power sector infrastructurenews.co.nz 79
August - September 2021 and to faster deployment of wind and solar PV. Another 14% is achieved with greater use of electricity in transport, in heating for buildings and in providing lower-temperature heat in industry. Greater recycling in steel, aluminum and plastics
accounts for a 2% drop in emissions, greater building efficiency 0.5%, and growth of bioenergy for sustainable aviation fuel and shipping another 2%. The following milestones will need to be achieved by 2030 to be on track to reach net-zero by mid-century:
• 505GW of new wind power per year • 455GW of solar per year • 245GWh of batteries per year • 35 million new EVs on the road each year • 18% of all aviation fuel becomes sutainable • 18 million heat pumps deployed each year • 70% of all coal-fired power is retired
Hydrogen Hydrogen must scale rapidly from its current very small base, but the size of its role varies widely by scenario. New demand for hydrogen in 2050 is just 190 million metric tons in the Gray Scenario, compared with 1,318 million tons in the Green Scenario, where it increases to around 22% of total final energy consumption, compared with less than 0.002% today. Carbon capture and storage technologies These can be applied across a variety of processes that emit carbon dioxide, including power generation and aluminum, steel and cement production. Widespread use of these technologies captures over 174 gigatons of carbon dioxide over the outlook to 2050, in the Gray scenario.
Nuclear In the Red Scenario, which prioritizes nuclear power, there is 7,080GW of nuclear capacity by 2050. This is about 19-times the nuclear power capacity installed globally today. Just under half of that is used to generate electricity in the end-use economy, where smaller, more modular reactors complement renewables. The rest is made up of dedicated nuclear plants that power electrolyzers producing so-called ‘red hydrogen’. Fossil fuels Demand for fossil fuels sees a significant decline over the next 30 years in all scenarios. The Green and Red Scenarios show demand for coal, oil and gas for combustion drop to zero by 2050, replaced by renewables, electricity and hydrogen. Fossil fuels fare better in the Gray Scenario, where carbon capture and storage offer a way forward for coal in power generation and industry, and reverses some of the decline seen in gas from 2030. However, it does little to support oil, which is predominantly used in transport, where CCS can barely play a role.
o one can accuse Mainfreight of thinking small. You have to think big to take a local trucking company in New Zealand and grow it to a global logistics giant. That bold thinking about growth means they don’t just think five or 10 years down the road. “The 100-year vision is something that our company founder came up with,” says David Hall, Group IT Infrastructure Manager of Mainfreight. “If we invest 50 million dollars in a new facility, we’re not doing that thinking about it over the next 20 years — we’re thinking about that over the next 50 years or so.” In less than 12 weeks, Schneider Electric deployed a modular, scalable EcoStruxure data centre with the performance
How scalable data centres help Mainfreight’s vision As a leading shipping company, Mainfreight needed an easy-to manage, yet state-of-the-art data centre that would meet present-day needs and support their growing global expansion Mainfreight needs to run their business well into their future. Expandable UPS, power, cooling, and enhanced software capabilities provide flexibility for future growth. EcoStruxure IT on-premise DCIM solution takes data from connected devices, delivering the analytics and visibility Mainfreight identifies as key
to their growth ambitions. This goes beyond just modernising their systems to be set up for technological advances. It also means collecting data that allows Mainfreight to pursue new services to customers that give them an edge on the competition. “The ability to provide big data-type analytics on what
their business is doing in terms of stock levels and other things like that, has become quite an invaluable thing,” Hall explains. With Schneider, Mainfreight has identified a partner they can depend on to help them fulfil their bold promises for the future. “Schneider Electric isn’t just a vendor, they’re a partner."
Mainfreight modernises for its
with Schneider EcoStruxure for Data Centres TM
August - September 2021 Sponsored Article
August - September 2021 Article Sponsored
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August - September 2021
bee mode where it can be integrated to be used with other Wiser compatible devices to trigger automation, such as “all off” or for multi-way switching. As an established global brand, PDL Wiser is offered in New Zealand on the Wiser Asia platform that has been built specifically for the Pacific market. Its development is a response to the increased demand for smart home products since the launch of Bluetooth technology, with Kiwis showing more and more interest in home automation and tradespeople upskilling to meet the demand. French Electrical was established in 1974 and works in residential, commercial and industrial. The compa-
ny has Schneider Electric as a preferred supplier and has been using its products for home automation for two decades. “The new offerings of Wiser, Bluetooth and wireless have definitely made the market a lot stronger. Wiser, I believe, will close the gap between a fully automated home and a retrofit home,” says Chris French. “The benefits I see of using Wiser is there are so many options within the suite. The opportunities are endless, and it’s still growing.”
• Easy integration with PDL Iconic switches and sockets. Wiser can turn almost any into a smart home, as it can be used in both new build and renovation projects. • Modular components – build up from one room to an entire smart home • Option to connect via Bluetooth Low Energy or Zigbee 3.0 technology • PDL Wiser can help improve the security of a house by having lights come on and off (at varying times) while the homeowner is away and improve safety and energy efficiency by offering timers and schedule options to automatically turn off electrical devices so they do not remain on for prolonged periods. Also, many Kiwis have a bach so home automation means people can use the motion/door/window sensors for additional peace of mind. • Provides connectivity of switches or timers from a smartphone. People can dim their lights from their phone or schedule their towel rail to go on and off for a few hours a day. • Easy to use. Homeowners are able to customised their smart home from the app, adding new Automations and Moments as they go. • PDL Wiser allows users to install an app on their phone and control it from anywhere you have internet access– when used with the Wiser Hub • Lighting – adjust lights, change the ambience, and control lights at home when residents are away, a good security benefit. • Blind control – open and close blinds from a smartphone without getting out of bed; or synchronise blinds with daily habits or with sunrise and sunset. • Heat pump integration options – schedule the house to warm up as people wake up and to save on energy while residents are away • PDL by Schneider Electric is the leading home electrical brand in New Zealand, trusted by homeowners and professionals for over 80 years. • Free comprehensive online training offered to electricians to become Wiser approved installers.
Electricians click here to find out more Builders click here to find out more infrastructurenews.co.nz 83
Benefits of PDL Wiser
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ydrogen is increasingly being called ‘the fuel of the future’ and can prove helpful in filling in some of the gaps in the clean-energy jigsaw. There have been increasing talks in New Zealand, especially since last 3 years, on how green hydrogen can help lower carbon emissions with the government spending millions on its research. It is one country that wants to be a prime aspirant in the development of green hydrogen. New Zealand has a plethora of renewable energy that can be utilised to make hydrogen as a next-generation fuel in an environmentally friendly way. But the question is, if NZ is well-placed to transition towards using renewable energy to produce green hydrogen as an alternative fuel for domestic use and export? Also, is the country doing
Is hydrogen the future of energy? Green hydrogen can be the real solution towards lowering carbon emissions, but Kalkine Chief Executive Kunal Sawhney explores whether it has a role to play in New Zealand’s future enough for the development of the hydrogen industry? What is green hydrogen? Why is it called ‘green’? Green hydrogen is a light, highly reactive, and universal fuel that is the most abundant element in nature. It is a clean energy source, different from coal and oil, that produces only water. It needs to be extracted chemically from other molecules because there are no natural hydrogen reserves
on the planet. The most popular method is extracting hydrogen from water, which comprises two parts hydrogen and one part oxygen. It’s not difficult to do this. The country can use heat and chemical processes to liberate hydrogen from organic resources like fossil fuels. However, this is quite polluting, and there is a more environmentally friendly technique to get hydrogen. The method employs an
electrical current to split hydrogen from oxygen in the water. The molecule is divided into 2 parts when a powerful electrical current is transmitted through a tank of water, and the process is called electrolysis. If this electricity is sourced from renewable sources, energy can be produced without putting carbon dioxide into the environment, thus helping the country reduce CO2 emissions. The question is, does NZ have affordable and effi-
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What is the government doing about the development of the hydrogen industry? New Zealand is one of the many nations looking into the optimum uses and transition paths for hydrogen in their energy systems and economies. With the government’s goal to achieve 100% renewable electricity by 2035 and transition to a clean, green, and carbon-neutral economy by 2050, New Zealand needs to bring new technologies and policies to accelerate its renewable energy strategy. As scientists are working on new ways to produce hydrogen and improve electrolysis methods to bring down costs along with the government’s Advanced Energy Technology Platform’s NZ$9 million support for its research, New Zealand can make a significant difference if they achieve success in the same. If NZ succeeds in improving electrolysis methods for hydrogen production, the country will be able to use less oil and gas while also becoming an energy exporter, transporting tankers of liquid hydrogen to Asia and other parts of the world. NZ government has also been collaborating with various countries for the development of NZ’s hydrogen industry. The country plans to use its rich renewable energy to produce low-carbon hydrogen for export. Its recent cooperation agreements with Singapore, this month on hydrogen production, research, and deployment, after similar agreements with
cient electrolysis methods? Is the government providing proper support for its development?
Japan and South Korea, can help New Zealand create an export industry. NZ can concurrently follow its objectives of decarbonising its heavy transport fleet and altering industrial heating processes, both deeply dependent on imported fossil fuels. Is Green hydrogen viable for the country? Though, green hydrogen can be used to decarbonise transport and industry applications, the costs associated with its production are enormous. That is one of the significant barriers for New Zealand. As per an expert team of Crown Research Institute,
GNS Science, electrolysis from renewable energy depends on high cost, inefficient components to make it work, making hydrogen generation in this way unviable compared to the widely used way of sourcing through fossil fuels. The institute has been working on an electrolysis system called polymer exchange membrane that is considered more adaptable to hydrogen production at a large scale but relies on catalysts based on metals that are inefficient and expensive. Hydrogen storage also remains a significant challenge due to the highly flammable nature of the gas. The country will also
need substantial storage facilities if it moves to replace petrol with hydrogen as a fuel, which many experts suggest becoming carbon-free by 2050. New Zealand can use new ways to advance electrolysis processes to generate hydrogen for the transport sector, and stationary power plants, which produces 40% of GHG emissions. helping the country immensely. In addition, more research and investment are needed for green hydrogen production. Moreover, global cooperation will be critical in accelerating the use of versatile and clean hydrogen worldwide. infrastructurenews.co.nz 85
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Was banning oil and gas exploration a mistake? ENERGY
As New Zealand tries to move closer towards decarbonisation, last year saw the highest level of coal-based electricty generation in a decade, says Total Utilities Managing Director Richard Gardiner
ew Zealand’s electricity and natural gas markets are inextricably inter-linked. Electricity and gas compete as alternative energy sources, but rely on each other for production. Electricity generation is the second biggest user of natural gas after methanol production by Methanex.
Gas is the second biggest source of electricity generation after hydroelectricity. With this intricate dependence on one another, the effective management of our national energy strategy (including electricity and gas etc) is critically important. The outright prohibition three years ago of all new
offshore oil and gas exploration, is having a profoundly negative impact on the natural gas sector and hence on the health of the electricity sector. No matter how well intentioned this original decision was, it was not thought through properly at the time. It’s unfortunate that, as
a result of these policies, coal-based electricity generation in 2020 was the highest for a decade. This coincided with the lowest gas-based electricity generation for nine years. Given that coal emits 1.9 times more CO2, on a gigajoule-for-gigajoule basis than natural gas, this is an environmental step backwards. We understand coal imports of 1 million tonnes from Indonesia in 2020 are currently on course to triple in 2021. Recently the Government has seemed more accepting of natural gas as a transition energy source on the road to 100% renewability. The negative impacts of the prohibition have been compounded by various other negative electricity supply and demand factors since then: • Rebounding electricity demand following the Global Financial Crisis in 2008. • Back-to-back very dry
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Maritime Union of New Zealand National Secretary Craig Harrison says the closure of the refinery is simply corporate self-interest and not in the wider interests of New Zealand. "It is disturbing that the lessons from the COVID pandemic and the flow on disruption to our supply chain are being ignored. “Exposing New Zealand further to a highly volatile international situation is reckless.” He says that crude oil imported into Marsden Point provides wider supply options than relying on imports of refined fuel. Harrison says there needs to be an urgent review by the Government, who seemed to be getting bad advice as other countries are moving to enhance their fuel security. "As we have seen in the container trade, New Zealand cannot rely on foreign ship owners to have our best interest at heart. “Marsden Point is more than a profit statement on a balance sheet, it gives New Zealand resilience in a global market.” summers in 2019/20 and 2020/21. • The retirement of thermal powers stations like Otahuhu B and Southdown. • The inability of new renewable power stations to meet the combined challenge posed by growing electricity demand and reduced thermal generation. Gas and geothermal is struggling Pohokura has been our biggest natural gas field for some years. During the past two years however, production has fallen sharply for unspecified technical reasons. This decline in gas production has reduced gas supplies available both for gas users and for electricity
Marsden Point closure threatens energy security
National’s Energy and Resources spokesperson Barbara Kuriger calls the move risky, being that Marsden Point is New Zealand's only refinery. “Many of the strategic reasons Marsden Point was built initially for remain today," Kuriger says. "We see Marsden Point as a strate-
generation. The prohibition of all new offshore oil and gas exploration, has also meant that there will be no offshore oil rigs available in NZ waters until 2022, at the earliest, to identify let alone resolve the ongoing production problems at Pohokura. Other gas supply options have been constrained in the longer term by the non-renewal of existing offshore field permits for undeveloped fields, once their initial term had expired. Previously, successive Government’s lead by both major parties renewed these permits unless there was a compelling specific reason not to.
gic asset for New Zealand’s energy security. "We would be exploring ways to keep the refinery in a state where it can be turned back on in the future, such as in the case of a global disruption."
Power companies are passing on the costs Seriously damaged gas industry morale has also resulted in a combination of reduced/delayed/cancelled capex in existing gas fields. The profound uncertainty surrounding the shorter term, let alone longer term, future of the natural gas industry has already resulted in Contact Energy vacating the time of use (TOU) part of the gas market as TOU agreements covering supply to larger customers expire. Two other gas retailers have also declined to quote for supply to various existing TOU customers. We are also well aware of other very large TOU gas users who have to use
natural gas and have been forced onto punitive spot market-related gas pricing. Major electricity-users like Whakatane Board Mills have also had a huge question-mark over their future due to huge gas-related electricity price hikes. There is still some limited competition in the non-TOU part of the market (impacting smaller customers), albeit at much higher prices. To all intents and purposes, competition has essentially collapsed at the big end of the gas market. Looking to the future, New Zealand must formulate an integrated supply/demand energy strategy covering the transition period until 100% renewable energy is achieved in practice. infrastructurenews.co.nz 87
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Can a vaccine for cattle help the dairy sector cut methane emissions? Agriculture is responsible for 43% of New Zealand's greenhouse gas emissions and our 6.3 million cows contribute to over half of this - a crucial problem we must address if we are to achieve net-zero emissions by 2050
New Zealand's net-zero struggle New Zealand is one of the few countries with a net-zero goal which exempts methane emissions from agriculture and waste. Methane is the second-most prevalent GHG from human-related activities after carbon dioxide, accounting for 20% of global emissions. Methane however is 25 times more powerful in trapping heat than carbon dioxide. This raises the question if New Zealand is on the right track to achieve net-zero as it has excluded biological methane, which makes over 40% of the country's GHG emissions. 88 infrastructurenews.co.nz
Instead, the Government has established a less ambitious goal of reducing methane emissions by 25% to 47% by 2050, compared to 2017 levels. The Government has given the agricultural sector the freedom to establish its methods for measuring and pricing emissions. In 2022, it will assess progress and, if necessary, may bring agriculture into the Emissions Trading Scheme (ETS) before 2025. There remains considerable work to be done towards helping the farmers reduce emissions if New Zealand wants to deliver on net-zero commitments.
ivestock like cattle, sheep, and goats generate methane as part of their normal digestion process. The majority of methane is released when the cattle burps. Cattle flatulence levels in New Zealand have increased by 62.6% since 1990 as our number of cows have hit 6.3 million. The Climate Change Commission see herd numbers dropping in its chosen pathway to net-zero emissions, but this misses the point. New Zealand's dairy industry is the world's 8th largest milk producer and exports more than 95% of the milk produced in the country, contributing $7.4 billion to GDP. Our dairy industry also has the lowest carbon footprint, as found in a study commissioned by Dairy NZ. We produce 0.77 kg of CO2e every kilogramme of milk - 48% less than the global average of 1.47 kg CO2e per kilogramme of milk. Reducing our milk production does not reduce demand. The milk will simply be produced somewhere else in the world at a greater cost to the environment. The Climate Change Commission’s solution only shifts the problem somewhere else at the cost of
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It is estimated that to produce one tonne of milk solids, dairy cows emit about ten tonnes of carbon dioxide equivalent (CO2e) largely in the form of methane. The current value of milk solids is estimated by Fonterra to earn a dairy farmer about $8 a kilo this season, about $8000 a tonne. If dairy was in the Emissions Trading Scheme (ETS), at $50 a tonne for CO2e, of the $8000 gross revenue the farmer earned, they would contribute $500. This would likely go towards New Zealand's payment to the world for offshore mitigation. Currently the proposal is, at least initially, to provide dairy farmers with a 95 percent subsidy, meaning that a farmer would pay only $25 of their $500 emissions charge for which they had earned gross income of $8000 as their contribution. The rest of New Zealand would effectively pay the other $475. A fairer scheme? The ETS was launched in 2008 with the intention of agricultural emissions being phased in over 10 years. Farmers were already supposed to be in the ETS by 2018. Yet farmers have been granted a further five year exemption from emissions pricing to develop a scheme for farm by farm measurement of emissions, rather than dairy farmers paying the average of all dairy farmer emissions. our economy, so how else can we reduce our agricultural emissions? New Zealand has been developing a methane vaccine for cows that keeps methanogens (methane-producing microbes) in their rumen (first stomach) for several years. The vaccine seeks to create antibodies in cow's saliva that will in turn destroy the growth of methanogens in the rumen. If scientists can find the right antigens that will slow
To get the benefit of being a low emission dairy farmer, every dairy farmer will need to measure, report and have the ability to verify their unique on farm emissions. Or a waste of time? Let's assume the worst dairy herds emit three times as much methane as the best to produce the same milk solids and that the best emit 25 percent less than the average. So 7.5 tonnes vs 10 tonnes per tonne of milk solids. That means the worst emit 22.5 tonnes of CO2e per tonne of milk solids. So, the best pay an emissions charge of $18.75 (save $6.25) per $8000 of gross revenue and the worst pay $56.25 per $8000 gross revenue. On a 1000 cow dairy herd, producing 400 kilos of milk solids per cow per annum (400,000 kilos of milk solids in total and $3.2 million gross revenue), with 95 percent emissions subsidy, at average efficiency, the ETS would cost that farmer $10,000. The efficient, low emitting farmer would pay $7500 (save $2500 compared with the average) that year and the inefficient, high emitting farmer would pay $22,500 (an extra $12,500) compared to the average. If the difference between the best and the worst is only $15,000 on $3.2 million of gross revenue, will such a price signal make a difference?
the growth and function of methanogens in the rumen, it would be a breakthrough. Vaccination is a highly innovative strategy for decreasing enteric methane emissions. This is because it needs no farm system modifications, is used seldom, and leaves no residues in products. The vaccine's advantage of being applicable across all ruminants can be the turning point not only for New Zealand and the global dairy sector but also
Will it work? What happens to the milk pay out per kilo of milk solids? What happens to the emissions price both domestically and globally, including any border adjustments to sell in foreign markets to offset any domestic subsidy? What happens to the 95 percent subsidy? What happens to average emissions per kilo of milk solids? What happens to the gap between the most and the least efficient dairy producers? Likely trends: emission prices rise, the subsidy reduces, average emissions per kilo of milk solids produced decline, the gap between the best and the worst converges on the average level of emissions. One can only assume the higher the emissions price, the faster we reduce the subsidy, the bigger the reward for low emissions innovation and farm management practices and the sooner emissions will reduce and converge on the average lower level. The higher the subsidy and the longer it lasts, the slower the reduction in emissions to the lower level. Kip Brook Editor-in-chief Make Lemonade www.makelemonade.nz
for livestock-based food production. However, it remains to be seen if New Zealand scientists can create the vaccine due to the complex mechanics involved. In addition, the research has a cost of $4 million to $5 million per year. Other solutions like breeding low emitting cattle, low methane feed additives and methane inhibitors for grazing system are a work-inprogress to lower emissions in the rural sector.
Kunal Sawhney Chief Executive Kalkine Group infrastructurenews.co.nz 89
What if farmers were in the Emissions Trading Scheme?
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he New Energy Outlook (NEO) is BloombergNEF’s annual long-term scenario analysis on the future of the energy economy. Upon surveying the landscape of organizational climate commitments, it is not uncommon to hear about attention grabbing goals like committing to 100% renewable energy, setting a science-based target, going carbon neutral or even climate positive. You might be wondering: how do these organizations get started? Looking around your own organization, it may be difficult to imagine how the fragmented efforts that are taking place within different business units and on different timelines can come together to form a coherent story about the opportunity for impact and risk mitigation. The first step is establishing your carbon baseline. This is typically a one (or more) year(s’) snapshot that serve as a reference point for organizations to understand and track their changing emissions over time. Building a multi-year emissions baseline not only enables an organization to have a better understanding of its recent historical greenhouse gas (GHG) emissions trends but it also enables an organization to grasp the business trajectory and associated potential future emissions. A carbon baseline includes both direct and indirect emissions, also known as Scope 1, Scope 2 and Scope 3 emissions (see image below for detailed categories). Scope 1: Direct carbon emissions from owned or controlled sources (e.g. fuel) Scope 2: Indirect carbon emissions from consumed purchased electricity, heat 90 infrastructurenews.co.nz
How to become a successful green business If you are ready to join the many businesses reducing their emissions, the key to getting started is to establish a carbon baseline – an inventory of sources of carbon emissions from business activities
or steam Scope 3: Indirect carbon emissions from all other business activities (e.g. purchased goods and services, capital goods, production of purchase materials, transport related activities not owned or controlled by organization, waste disposal, business travel, use of sold products, etc.) Why establish a carbon baseline? Just as companies take stock of other types of resources or supplies, it is important for organizations to assess their carbon budget in order to understand which areas of business activities have the greatest opportunities for impact. Establishing a detailed carbon baseline provides
management with the ability to understand carbon emissions across different business units and make data-informed decisions, for example, by having specific fuel type information according to projected business growth, or understanding how carbon-intensive specific regions’ electric grids are going to behave in the future where the company operates. Given the likely volume of data collection and calculations, the baseline inventory data can be much easier to visualize, analyze and synthesize if it is established in a centralized software system. A secondary benefit to establishing a baseline carbon inventory is for tracking change over time. Since a
baseline carbon inventory is only a snapshot in time, organizations need to build their processes for ongoing data collection to evaluate the effectiveness of operational changes. Having a baseline carbon inventory also supports companies in conducting peer benchmarking and evaluating their market position. So you’ve built your baseline… what’s next? Establishing a carbon inventory baseline is only the first step to managing organizational GHG emissions. Once an organization undertakes the effort to put together this emissions approach to understanding its impact, the organization can extend the same
approach to thinking about risks and opportunities in business decision making processes. For example, when evaluating capital investments into a new facility, a company can inquire and collect data about the historical operational costs—including energy data—for existing facilities it is considering for acquisition, and/or factor in how “dirty” the electric grid is in the potential regions where a new facility may be sited. Because an organization already has a baseline understanding of its existing portfolio of facilities, the organization can evaluate potential facilities against their own portfolio’s average emissions as well compare potential acquisitions against each other from a carbon impact standpoint. Siting new facilities in a region with a cleaner electrical grid, or with easier access to cleaner alternative fuels, can be considered alongside other performance and market factors in the capital investment decision making processes. Beyond singular business decisions, having an es-
tablished carbon inventory baseline can facilitate an organization’s goal setting and scenario planning. Companies that have a target year and an established emissions target can draw a line from their established carbon baseline to their designated emissions target to understand the necessary change in their carbon budget over time compared to business as usual (see purple and green lines in graph). Forecasting different projections of possible futures based on the current carbon baseline provides a data-driven approach to stacking individual or decentralized business decisions together to get a comprehensive understanding of the planned emissions reductions, which aggregates the approved project pipeline. The planned emissions reductions can then be compared to the planned emissions gap, or the targeted emissions reduction that has yet to be accounted for based on existing company mitigation strategies. Finally, for companies thinking about supporting
Five simple steps to net-zero 1. Scope emissions sources Accurately and thoroughly scoping emissions sources is key providing your organization with the structure to successfully measure, report analyze and reduce emissions down the road. 2. Establish emissions baselines Building emissions baselines make it a lot easier to view and analyze historical emissions. 3. Assess mitigation and adaptation options Organize and compare emissions reduction opportunities that exist in your corporation. 4. Set an internal carbon price Putting a price tag on your company’s carbon is a powerful and efficient way of incorporating climate risks into the cost of doing business. 5. Commit to a science-based initiative Science-based initiatives bring together a growing collective of energy-smart businesses with ambitious targets in transitioning to a low-carbon economy. These types of initiatives give businesses greater access to resources and communities that can help them develop new low-carbon pathways. a 1.5 degree climate scenario, modeling the path from their carbon baseline to the company’s current goal versus what the target emissions would need to be to achieve the 1.5 degree
scenario can facilitate an internal discussion around the target emissions gap (shown as the steepest emissions pathway in the graph). infrastructurenews.co.nz 91
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Part of the solution not part of the problem
Thermal recycling is reliable, makes environmental sense and has no technical alternative, says Infrastructure Publisher Mike Bishara The Amager Bakke waste-toenergy plant in Copenhagen burns the waste of 500,000 – 700,000 its residents to power 150,000 homes with minimal CO2 production
hatever name you choose -waste to energy programmes have an image problem they do not deserve. New Zealand has imported the simplistic “one size fits all” solution to landfill solution from the EU as a convenient and politically palatable solution. But even the European Commission’s most staunch supporters defiantly incorporate an acceptable face of incineration in their circular economies, which are far more advanced than New Zealand. One such facility built by Danish Engineering firm Ramboll quickly became a landmark and tourist attraction in the centre of Copenhagen. It has a ski slope on its roof, hiking trails, the world’s highest artificial climbing wall and a mountain bike trail. The waste incineration plant was completed in 2017 and has an annual capacity of 400,000 tonnes. And it was to Ramboll that Cambridge designer Neil Laurenson turned to plan a waste to energy conversion plant in Huntly. His $650 million plan 'Kaitiaki', would process items that could not be recycled, reused, composted or repaired and would work within what Laurenson described as "the circular economy" of waste. It called for a sea change in the way New Zealanders dealt with rubbish. Laurenson planned to have barcode scanners in every New Zealand home to help consumers identify which items were recyclable and which were not. The country's rail network and truck network would be utilised to transport waste to the new plant.
Plans for a $650 million wasteto-energy plant in Huntly are unlikely to go ahead
The size of the factory would be dictated by how integrated this circular economy became. The more robust it was, the smaller the plant. As well as turning waste to fuel, there would be a tyre pyrolysis plant to convert old tyres to fuel and a recycling centre. His idea initially won the backing of Waikato's economic development agency Te Waka and there were plans to promote a joint feasibility study with government and regional business. Then the doomsayers moved in. New Zealand Product Stewardship Council's Dr Trisia Farrelly called it "a false solution" to New Zealand's waste problem. "All you end up doing as they do in Scandinavia is 'feed the beast'. The thing could only keep going as long as you feed it waste, so it perpetuates waste." "What we need to be
doing is investing as much funding as we possibly can into prevention. Transporting the waste to a single site in the North Island would also generate huge carbon miles,” she says. “Many public discussions ignore the fact that there will never be a perfect circular economy linked to a utopia of zero waste and infinite recycling without needing any energy or decontamination,“ says Christophe Cord’homme at French equipment manufacturer CNIM. “There will always be the need to have waste to energy as a safe final sink for polluted waste that can no longer be recycled. Whoever denies this probably also believes in the myth of perpetual motion.” Attempts by Infrastructure News to find out the current state of play with Laurenson’s plans have drawn zero response. EU thinking, upon which
New Zealand relies, is coming under increasing pressure. Its conventional wisdom holds that if waste incineration can no longer be funded, countries will have to find other ways of processing waste. In theory, the EU believes this will lead to even more recycling, even more waste prevention and to new and improved methods of disposing of any remaining residual waste. “The objections against which we have to defend ourselves are all too often irrational,” says Ella Stengler, Managing Director of the Confederation of European Waste-to-Energy Plants. Stengler is critical of the fact that incineration has not been included in the EU’s Green Deal taxonomy, which lists the technologies that are considered to be sustainable and which should therefore receive funding. New Zealand looks to be on a path to follow the EU with a persistent conviction that incineration causes lock-in effects and hinders both material recycling and waste prevention. “In practice the regulation [will] create a disastrous lock-in effect as far as landfills are concerned, especially in countries that have not yet developed a waste incineration infrastructure.” This is a view shared by Cord’homme. “On the one hand, how does the EU intend to reduce landfill to less than 10 percent if at the same time it makes it more difficult to finance waste-to-energy plants?” he asks. “Wherever waste to energy is used, not only does the use of landfill decline, but more material recycling is carried out at the same time,” says Stengler.
“That’s logical. Incineration requires a well-developed, reliable collection system up front. Where such a system exists, it’s also easier to separate individual fractions and recycle them materially.” Thermal recycling would be a way of achieving more waste separation, and thus automatically more material recycling too, through the upstream collection systems. And that may be the rub for New Zealand. A 2019 Berl report says the Zealand waste sector is dominated by two large companies, Waste Management and EnviroNZ. These two companies control the majority of New Zealand’s waste either through direct contracts with private customers, or through waste service contracts with energy authorities. Any future large-scale Waste to Energy facility will need to work with these companies to source the waste volumes required, says the report. They are unlikely to support a move to Waste to Energy given the investments they have made or will be making in new or expanded landfills, the report says. From a technical point of view, energy recovery of residual waste is already at a very high level and advanced thermal treatment technologies will probably not lead to either lower emissions or a better energy yield says Johnny Stuen, Production Director at the Agency for Waste Management in Oslo. “I don’t think we’ll see much change here in the next 20 to 30 years.” With even better filters and with carbon capture systems, he says, the emissions balance could be improved even infrastructurenews.co.nz 93
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Extracts from the Berl report
further, but basically there is only room for small optimisation steps. “If material recycling is not possible and we don’t have clean mono streams, mixed material, incineration is the best solution,” says Stuen. It looks set to be a long haul, whatever the direction is taken. In Antwerp for example, despite all the waste prevention and recycling efforts, the volume of household waste that cannot be recycled remains constant, at around 183,500 tonnes per year. The old plant has reached its limit. A new building ready in six years will not only facilitate state-of-theart technology, but will also drive the expansion of the district heating network and thus contribute to achieving the climate targets. The new plant will even be prepared for developments that are currently still far from market maturity, such as carbon capture technology. Still, technical facts alone will not create acceptance no matter how impressive they may be – and nor will mere figures, says Kristel Moulaert Managing Director of the intermunicipal waste management organisation ISVAG, formed by 94 infrastructurenews.co.nz
the Belgian municipalities of Antwerp, Mortsel, Boom, Puurs, Niel and Hemiksem, Moulaert is currently making sure all the arrangements are in place so that Antwerp’s old waste incineration plant, which was planned in 1975, can be replaced by a new building by 2027. “Usually only technicians can make sense of abstract emission values,” says Moulaert. So ISVAG created an independent and international pool of experts to assess its plans. Their task was first to examine the existing plans for alternatives and, wherever feasible, to work out ways of implementing these. The idea behind this was to ensure that no one objecting to the project would be able to say there would have been an environmentally or economically better solution that the operators hadn’t considered. “But if we show that burning the waste of one million people in our plant generates as much particulate matter as heating 48 households with a wood or pellet fire in an annual comparison, then it becomes clear to ordinary people how clean our technology actually is.”
In New Zealand, landfill is the predominant method for waste disposal. We estimate that in 2018 New Zealand generated 17.6 million tonnes of waste, of which 12.7 million was disposed of in landfills including farm dumps. Some areas are facing urgency to invest in new solutions as the waste flow has increased, severely shortening the projected life of existing local landfill. One solution proposed to reduce the amount of waste going to landfills is Waste to Energy (WtE). WtE is the process where waste is incinerated to generate heat and electricity. In May 2018, the Ministry for the Environment through the waste minimisation portfolio adopted a circular economy policy approach. A circular economy is about a shift away from an increasingly unsustainable, ‘take, make, dispose’ economic model which relies on large quantities of cheap, easily accessible materials and energy. A circular economy is an alternative to the traditional linear economy. In a circular economy, resources are kept in use for as long as possible. Maximum value is extracted from resources whilst in use and end of life products are regenerated, repaired or recovered. It is about making growth sustainable and creating an economy which maximises the use from its current resources, rather than continuously extracting more from nature. The Ministry for the Environment (MfE) considers transitioning to a circular economy will reduce waste and associated pollutants, protect and restore natural
capital, and help address issues including climate change and water quality. The introduction of WtE could affect New Zealand’s efforts to move to a circular economy. By creating an alternative to landfills, WtE could affect efforts to reduce the creation of waste including reuse, recycling, and reprocessing. Despite being promoted by some as renewable energy or recycling, the European Commission have mapped various WtE methods against the waste hierarchy and found that this is not the case. Anaerobic digestion of organic waste where the digestate is used as fertiliser is considered recycling. Incineration and co-incineration with a high level of energy recovery and reprocessing of waste into solid, liquid or gaseous fuels is considered recovery. Incineration and co-incineration with limited energy recovery is considered disposal in the same way as current landfill with gas capture. Pressure on recycling operations is also impacting the transition towards a circular economy. In 2018, 4.9 million tonnes of recyclable material was recovered from the waste stream. Recycling operations within New Zealand are limited and New Zealand’s ability to export waste has been reduced by the Chinese government’s decision to severely limit the volumes and types of waste they will accept. In 2018 New Zealand exported $573 million worth of waste. Local authorities are now reducing recycling services that are no longer affordable, due to declining prices for recyclable materials. WtE has been promoted as a solution to this increased need to dispose of materials within New Zealand. The decision to adopt WtE as a disposal method for New Zealand’s waste will need to consider more than the relative financial cost. Waste companies and local authorities considering WtE will weigh up other factors such as environmental and reputational impacts, and public acceptance of waste incineration. Disposal of waste through any method creates emissions, both of greenhouse gases and other toxic substances. This sum effect of WtE could be either positive or negative depending on the energy market, WtE technology employed, regulations around the operation of the WtE facility, and the standard of ongoing maintenance and management. Likewise, toxic emissions can be managed though use of technology and operations practices, however WtE creates some amount of toxic ash which has to be disposed of, most likely into landfill.
There are steps the government can take to reduce the risk of WtE projects hindering efforts to transition to a circular economy. We recommend that MfE in partnership with other relevant authorities including the Ministry of Business Innovation and Employment and the Energy Efficiency and Conservation Authority carry out further research into other types of WtE and should set standards based on international best practice. This would enable the government to consider the impact WtE will have on New Zealand’s waste goals. There should be tight controls over waste that is used by WtE facilities, with penalties for non-compliance to discourage the incineration of materials that should be put back into the circular economy. Alongside setting minimum standards, MfE should improve data capture of the waste sector to enable informed decision making by central and local government and those who are proposing WtE facilities. Waste disposal facilities are significant investments that take a number of years to progress from concept to completion. Accurate forecasting of future waste volumes will minimise an under or over supply of waste disposal facilities. Knowing what the future looks like will enable better controls over the supply of waste disposal and the impact this has on the circular economy. Finally, MfE and the government should continue to promote incentives to reduce the creation of waste and increase reuse and recycling. Expanding domestic recovery, reuse and recycling infrastructure would support this, while reducing reliance on overseas destinations to manage our waste. Increased domestic recycling would also reduce the need to import virgin materials, further diminishing the waste stream. infrastructurenews.co.nz 95
August - September 2021
August - September 2021
he crucial discovery has been made by Jiaying Li, who is working with the Dutch Advanced Research Center Chemical Building Blocks Consortium (ARC CBBC), in collaboration with the University of Twente, Wageningen University, BASF and AkzoNobel. The research is focused on a new, recyclable coating to replace the type of “metallised” packaging (which blocks out oxygen) that’s typically used for products such as crisps and coffee. Currently, this sort of packaging consists of several layers, each with its own function. As well as requiring a lot of energy to produce, it’s also difficult to recycle. A process has now been devised which involves the smart combination of two water-soluble polymers (polyelectrolytes), resulting in all the functionality being delivered by one recyclable layer. The next step in the research is to use bio-derived polyelectrolytes. These polyelectrolytes are 100 percent natural, extracted, for example, from shrimp shells or waste from the wood processing industry. “The use of polyelectrolytes in the coatings industry is not new,” explains
On the cusp of sealing revolution A future where food packaging no longer contains aluminium has moved a step closer Andre van Linden, AkzoNobel’s Director of Coatings Technology. “But these coatings are normally built up, step-bystep, so industrialisation of this method would be too complex, time consuming, expensive and impractical. “However, the new onestep approach that’s being developed through the ARC CBBC means the use of polyelectrolytes is much
closer to becoming industrialised.” Li is a PhD student at the University of Twente. “Our initial results show that the coating has great potential for future use in packaging to protect food from oxidation. “We’re also focusing on improving other properties, such as water resistance and strength.” No organic solvents are
used and the packaging would be easy to recycle. “With the versatility of natural polyelectrolytes, we’re entering the era of becoming less dependent on synthesized polymers,” continues Li. “In the end, the polyelectrolyte coating we’re developing might be less shiny, but it will serve the same purpose and make recycling much easier.”
he white paper on micro-fulfillment centers (MFCs) focuses on how to utilise automation to maximise efficiency and profitability. Automated MFCs allow companies with or without a brick-and-mortar footprint within a particular area to move fulfillment closer to customers in order to reduce transportation costs and enable shorter delivery times, benefitting both retailer (or Fast Moving Consumer Goods (FMCG) producer), and customer. Companies can build a micro-fulfillment center as a standalone facility, or inside or bolted on to an existing location, to expand fulfillment capacity. MFCs can support customer curb-side pick-up, too, or a hybrid of pick-up and delivery. Swisslog’s White Paper talks about the rise of MFCs (which are expected to grow sixfold in 2021), how Covid-19 further accelerated MFC growth, as well as challenges to this growth. The white paper then goes on to discuss how to synergise online and storefront using MFCs, and the future of MFCs. “MFCs have experienced huge year-on-year growth in the past three years, and they are expected to grow further in 2021, and in the years ahead,” says Sean Ryan, Head of Sales and Consulting, Swisslog Australia. “The rise of MFCs can be attributed to a range of factors, including the fact that they benefit both the consumer and the retailer. “Consumers are rewarded with increased choice, shorter delivery times and efficient curb-side pickup options. Grocers and retailers are able to utilise a more efficient order fulfillment method – one that reduces
Winning the last mile in the supply chain race New Swisslog white paper discusses how microfulfillment can synergise online and storefront labor and transport costs, avoids clogging retail stores with pickers, and supports higher order demand levels,” says Ryan. MFCs are a relatively new retailing strategy, so to maximise return on investment, it is important to partner with an experienced automation provider – ideally one that already has extensive experience with other models such as Dark Stores and Central Fulfillment Centres (CFCs). An automation partner will not only have knowledge from other projects, but they will have existing software with required functionality, and they will know the intricacies of
handling delicate products or the requirements of cold storage, for example. With more than 2,000 warehousing and logistics automation projects completed worldwide, Swisslog has fundamental knowledge in food and beverage, e-commerce and retail, It has the ability to deliver logistics automation for the whole supply chain network within these industries, starting with large CFC and moving through Dark Store, down to MFC. In addition to experience with automation equipment,
it is important to choose an automation partner with experience in software. The software drives the solution, keeps track of data, and analyses that data to further improve processes in the future. Swisslog’s modular WMS SynQ software provides warehouse management, material flow, automation and 3D visualization all from a single point of control. It has been designed for dynamic, data-driven supply chains, such as those found in retail and e-grocery industries.
email@example.com | www.swisslog.com infrastructurenews.co.nz 97
August - September 2021 Sponsored Article
August - September 2021
ork is already underway on a proposal to trim the country’s 67 water service providers – owned and managed by councils currently – into a small set of providers. The government says the new analysis confirms the need for major change, both to meet health and environmental needs – and prevent skyrocketing water bills for Kiwi households. Local Government Minister Nanaia Mahuta says it is clear the affordability challenges facing our water infrastructure are too great for councils alone. The reports identify investment of between $120bn and $185bn is needed over the next 30 years to ensure New Zealand’s drinking water, wastewater and stormwater infrastructure meets acceptable public health and environmental standards. “Together, the reports confirm the need for major reform to upgrade and maintain our water infrastructure, protect our environment, and avoid unaffordable increases to household bills.’ “Without reform average household bills in 2051 are forecast to range from $1900 to $13,900. Under reform proposals with five providers those figures range from $800 to $1800. With three providers the range is $800 to $1600. “Our plan means the required upgrade of infrastructure for our most precious natural resource will be much more affordable for New Zealanders than continuing on the current path.” But National’s Local Government spokesperson, Christopher Luxon says the Government’s proposed solution is already fraught 98 infrastructurenews.co.nz
Bold action needed to stop water infrastructure’s downward spiral New studies under Three Waters Reform Programme predict up to $185 billion is required in the next 30 years to get our drinking water, stormwater, and sewage infrastructure up to standard
with serious risks. “What we’ve heard from mayors is that they lack information; they’re not convinced amalgamation will be positive; they believe amalgamation relies on dubious scale benefits; and they have a ‘high degree of uncertainty about outcomes’. “Any change will be impossible if councils and communities aren’t taken on the journey. It’s vital that these reforms remain voluntary for councils, and
that councils and mayors are engaged with and kept informed by the Minister,” says Luxon. The reports include analysis of the economic benefits of reform by the Water Industry Commission of Scotland (WICS), independent reviews of WICS’ methodology by Farrierswier and Beca, and an analysis of the effects of the proposed reform on the economy and affected industries by Deloitte. “The case for reform is
boosted by an economic impact report produced by Deloitte,” says Mahuta. “The reports highlight how the national water infrastructure reforms, will provide more jobs for people (5900 – 9300 extra jobs countrywide between 2022 and 2051), opportunities for businesses and a net increase in GDP by $14bn to $23bn over 30 years.” Civil Contractors New Zealand Chief Executive, Peter Silcock says bold action is needed to imple-
August - September 2021
ED TO DETERMINE ment the detailed solutions 4. PROJECTED HOUSEHOLD COSTS 2051 DARIESmapped out by the reports. This how would better d to help determine many ensure entities there health, wellbeing and envioutcomes than nefits from aronmental larger water service delivery entity omer base. continuing under the status oundaries toquo, encompass natural which it communities was clear entity including rohe/takiwā. Entity A would lead to a downward gulatory boundaries including to enable water spiral. o the sea - ki uta ki tai. “It is vital we take bold and 3 $800 $2170 by international evidence, provides visionary actionfurther as soon as ed to serve a connected population of at least WITH WITHOUT is practical. If we do not, ired level of scale. REFORM REFORM many parts of the country Entity B is to create fouranew water will see further decline enable all communities in drinking waterto quality, worsening pollution of our $1220 $4300 waterways and marine WITH WITHOUT environment and increased REFORM REFORM 2 Entity C risk from extreme weather ARIES events. “More maintenance, better d 2 Taranaki region network assessment, more e 1 Which entity would include the new water infrastructure Taranaki region, taking into account and improvements to existki uta ki tai, whakapapa connections, and economic $1260 $3730 ing infrastructure are essengeography/community of interests. WITH WITHOUT tial activities to shift New REFORM REFORM Zealand from a downward 3 Hauraki Gulf spiral as aging water assets Whether to include other districts reached end-of-life. surrounding the Hauraki Gulf, h enabling a more integrated approach “Now that detailed proto the management of the Hauraki Chatham Is posals exploring not just the Gulf marine catchment. Entity D issues but also mapping out solutions were emerging, a clear vision providing foree recommended boundaries. sight for future generations Assumed connected is required,” says Silcock. population 2020 the body representing THAT ALL“As COMMUNITIES $1640 $4970 those who do the work on Entity A 1,725,850 ORM WITH WITHOUT the ground to construct Entity B 799,610 REFORM REFORM amount of investment required to: and maintain our water Entity C 955,150 infrastructure, we want to Entity D 864,350 Is in the order of see the change required to ensure we have The modelling indicates for efficiency by looking companies in the United $120 billion tohealthy The figures presented above for household bills with and without reform set out what an average household would drinking water and cleaner a likely range for future inatbe likely thetoperformance of in 2051, in today’sKingdom. pay for three waters services dollars, based onWICS analysis byconsidthe Water Industry $185 billion for Scotland. waterways. Our members vestment requirements at a regulated water utilities in ers that New Commission Zealand can A weighted average figure is presented for household bill estimates without reform, to account for the wide variance over the next 30 to 40 years. see the need every day.” national level in the order ofbetween the United Kingdom and achieve similar outcomes council pricing policies. This weighted average figure reflects the proportion of the connected population that resides in each council area relative to neighbouring councils within the relevant water services entity. Silcock says the recent $120 billion to $185 billion. making adjustments to take to Scottish Water over a reports presented detailed This investment is estimataccount of factors specific longer period (30 years). information that clearly ed as necessary for New to the New Zealand context. WICS has analysed demonstrated not just of Zealand to meet current It demonstrates that New around 30 possible aggrethe scale of the problem, levels of compliance that Zealand’s Three Waters gation scenarios, reflecting but also the possible soluwater utilities in the United sector is in a broadly similar the large number of possitions. Kingdom achieve with EU position to Scotland in ble number and boundary standards over the next 30 2002, in terms of relative configurations. The WICS WICS Phase 2 findings years. These standards are operating efficiency and analysis shows that scenarThe WICS Phase 2 report assessed by WICS (and levels of service. In just unios ranging from one to four builds on the findings of the confirmed by Beca) to be der two decades, Scottish entities provide the greatest earlier report to provide a broadly comparable with Water has lowered its unit opportunities for scale efmore up-to-date analysis. equivalent New Zealand costs by 45% and closed ficiencies and related benThe key findings of the standards. the levels of service gap on efits in terms of improved report are in three parts: WICS assesses the scope the best-performing water levels of service and more infrastructurenews.co.nz 99
A m b fr
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undary of entities needs to balance scale with other factors
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August - September 2021
Auckland Mayor Phil Goff does not believe the model proposed will benefit Aucklanders Aucklanders have invested heavily in building up Watercare’s more than $10 billion worth of assets, with a further $11 billion invested in water infrastructure in our current 10-year Budget. Control over those assets, and our ability to ensure that Aucklanders’ needs are put first, is undermined by the reform, which proposes that Auckland Council could have less than 40 per cent of the representation in the governance of the new entity. This is despite the fact that 92 per cent of the assets of the new entity would come from Auckland, and Auckland would have approximately 90 per cent of the population served by the new entity. The proposed governance structure lacks accountability, and therefore responsiveness to Aucklanders through their elected representatives. This risks the entity not responding to public concerns and its senior management paying itself inflated salaries. Auckland Council has taken steps to both improve accountability and reduce exceptionally high salary levels previously paid to executives. The new body will be more susceptible to privatisation as has occurred in the United Kingdom. Safeguards put in place against this by the current govern-
ment can be easily repealed by a future government. According to the WICS report, Auckland is already by far the most efficient and effective water supplier in New Zealand. It has already achieved the scale and professionalism in water supply that the government is seeking for the country as a whole. The supposed benefit of cheaper water costs, projected to be half the costs of an unreformed sector by 2051—30 years out—simply cannot be relied upon as being real. And it ignores the measures Watercare is currently taking to improve efficiency, which will lower costs. The government’s own analysis by Farrierswier—the firm it paid to analyse the reliability of the WICS report—states explicitly that the claimed lower costs under the three waters reform should not be relied on. The basis of improving productivity appears to largely rely on a huge increase in borrowing, with a three-fold increase in debt. This means significant risk with debt to revenue ratios increasing from 340 per cent to 700 per cent. It is hard to imagine that this will not incur higher credit risks and cost of borrowing.
Christchurch Mayor Lianne Dalziel finds it difficult to see a compelling case for change
Until we get the full package and have all the pieces of the puzzle in front of us, it is difficult to judge whether it is in Christchurch’s best interests to be part of the new entity. Once we have that information, we will then need to engage with our communi100infrastructurenews.co.nz
ties and get their feedback on whether they want us to continue with the reform process or opt out. It is positive to see the Government seeking to facilitate iwi partnerships and we are very mindful of the significance of our decision to others in the takiwa.
affordable household bills (when compared against the likely outcomes ‘without reform’). Farrierswier independent review of WICS findings Farrierswier find that the overall approach WICS takes to its analysis should give reasonable estimates in terms of direction and order of magnitude. They note that there are certain limitations associated with the analysis which decision-makers should be mindful of, which relate to estimating the level of future investment requirements and potential efficiency savings that could be realised, particularly given differences in the nuances of the New Zealand regulatory and policy context. While their review highlights several limitations associated with the analysis, they note that these are inherent and to be expected in modelling of this kind. Farrierswier also find that WICS’ approach to addressing these limitations appears reasonable. Farrierswier notes that the approach WICS takes to assessing the potential efficiency gains appears reasonable but care needs to be taken in translating overseas experience into a New Zealand context. They agree with WICS on the factors that will promote efficiency gains in the water sector, including the quality of management, clear policy priorities, and an appropriate economic regulatory regime. Farrierswier also explored the relevant literature to test whether any concerns arise that amalgamation might lead to water entities becoming large enough that diseconomies of scale may emerge. Their view
August - September 2021
Beca independent review of WICS findings Beca reviewed the standards and practices in the United Kingdom Three Waters industry and their relevance to New Zealand given WICS has used United Kingdom data and benchmarks as part of its analysis. The Beca report considers that, on balance, the forecasts from WICS modelling may underestimate the estimated investment requirements and timeframes, suggesting that WICS modelling of future investment may be conservative.
Hamilton Mayor Paula Southgate is considering the detail within the dollars Providing sustainable three waters services is crucial and what we do now will make a difference for generations to come. But the costs for any reform must not fall on today’s ratepayers. Hamilton has been very clear on that and Government has listened. Hamilton City Council will be eligible for $58.6 million in new funding support. It might not be as much as Hamilton would have liked – we will always want more – but that money is likely to hasten
how quickly we can address key issues in our city like housing and environmental initiatives and other long-term priorities. Keeping our assets in public ownership is a bottom line and that has been reflected in the announcement today. But the reform has got to be a partnership, so as Mayor, my focus now will be on getting the absolute best deal for the city. Today is a good start, but there is a lot more conversation to come. WATER
is that the amalgamation scenarios under consideration – with entity sizes that do not exceed 2 million connected citizens – do not appear to include entities of a size that give rise to concerns about diseconomies of scale.
Deloitte industry development study and economic impact assessment Deloitte has undertaken a comprehensive study of the economic impacts of reform and the implications for affected industries. Key findings in their report include: The reform is forecast to impact every corner of the economy and is estimated to increase Gross Domestic Product (GDP) by $14.4 billion to $23 billion in present value terms over the next 30 years when compared to the likely outcomes without reform. In relative terms this increased economic activity equates to an average increase in GDP of 0.3% – 0.5% per annum. Every region is expected to be positively impacted by reform in terms of GDP and employment growth. Reform is expected to support significant job creation infrastructurenews.co.nz101
August - September 2021 across the economy. Relative to the counterfactual, the reforms are estimated to result in an extra 5,800 to 9,300 additional FTE jobs between 2022 and 2051. Average real annual wages are expected to increase by 0.16% – 0.26% over the period from 2022 to 2051. The increase in real wages mainly reflects a projected increase in labour productivity. The additional jobs are expected to be spread across a broad range of sectors. While there is likely to be changes in the configuration of jobs in the water sector and its supply chain in the short to medium term. Over 30 years significant growth of up to 80% is anticipated in the water sector workforce, presenting significant opportunities for employment growth, specialisation and increased career opportunities. The report highlights a wide range of opportunities and challenges for the implementation of the reforms relating to the workforce, supply chain, management of the capital investment programme, innovation and productivity.
Wellington Water Committee former-Chair David Bassett sees potential long-term benefits The Wellington Water Committee (a joint committee of the six councils that own Wellington Water) welcomes today’s announcements on sector reform proposals and additional water infrastructure funding as an opportunity to address long-standing challenges within the water sector. In the Wellington region we have seen the advantages of a consolidated model to manage water infrastructure across multiple councils. The Government’s proposals take this a step further, and presents an opportunity to create ownership and management models that enable improved service, efficiency and flexibility with regards to funding the management, development and renewal of water infrastructure networks. Central government funding will accelerate the delivery of valuable major water projects supporting critical public and environmental health outcomes. Source water neglected The reports are all about infrastructure, says Victoria University of Wellington Senior Researcher, Dr Mike Joy. However, in the case of drinking water quality,
We know that the challenges and costs associated with aging water infrastructure have been an issue faced by mana whenua, councils, utility companies and residents around New Zealand. Here in the Wellington region, additional funding would enable us to get under way with key new infrastructure projects and build them concurrently. This means we would all secure the benefits of an improved water network sooner. The proposals outlined today represented significant change for the sector, but, importantly, three waters assets would remain in public ownership. The Wellington region’s water asset owners and managers look forward to working with the Government, its new regulator, Taumata Arowai, and mana whenua to support the successful development and implementation of water sector structural reform.
infrastructure to treat water is the ambulance at the bottom of the cliff. “I could find no mention of the fence at the top of the cliff, which is protecting water at the catchment
scale – i.e. safeguarding the sources of the water. Missing this crucial ‘fourth water’ – the source water – seems odd. “I note that the summary report on the workshops held for the Three Waters Reform Programme, released in March 2021, showed that in polls held during the workshop, taking a catchment view of water ranked as the second most important objective by attendees. “Finally, I could find no mention of one of the emerging issues for New Zealand, that is nitrogen contamination of drinking water. There was no mention of it, nor just how expensive it is to remove nitrate from water,” concludes Joy.
June - July 2021
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New Zealand managing director Bill Hackshaw. “The system optimises your equipment’s in-cab operating environment to protect both the health of the operator, and the existing heating, cooling and electronic systems in place. AC Filter complies with standards CROW132 and NEN4444.” Filters are certified, and available for all applications, including asbestos, respirable crystalline silica,
pollen, spores, hydrocarbon aerosols and gases that are harmful to humans. Parts and filters are of the highest quality, carrying the European CE Quality Mark. The system has a standard AOC (Advanced Overpressure Control) unit fitted in cab, with an optional PPM (Particles Per Million) readout function for hydrocarbons. The system is designed to maintain a pre-set value of 120pa in the cabin.
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August - September 2021
ccording to Tony his new machine, developed entirely in New Zealand, has far less drag substantially reducing the tearing of the fill, with a fuel saving of up to 50 percent, and less environmental impact compared to commercially available compactors. Field trials have been so successful that he intends taking the machine to market by the end of 2021. It's a big step up for the CEO of family-owned Cameron Civil, a 44-machine strong company which Tony started with his wife Lynley, in 2002. Tony and Lynley bought the business from long-time Auckland contractor Allan Cameron, who remains a mentor and supplier of machinery to the company. Their daughter Katie made news in Auckland two years ago when she bought her own Komatsu D65 bulldozer and became, at 19, one of the first female earth moving contractors in New Zealand. Tony almost simultaneously bought a Komatsu D61PXi-23 dozer fitted with a fully factory integrated intelligent machine control [iMC] system to use initially, on a major project for the RNZAF's Whenuapi airbase, in West Auckland. According to Tony, the OEM iMC system enabled the bulldozer to achieve grader-quality trimming tolerances of 25mm, better than half that of aftermarket GPS solutions he had been using. The iMC system incorporates stroke sensing hydraulic cylinders with load sensing hydraulics which automatically adjust to enable transition from rough dozing to high-precision finish grading. "In many cases, we've 104infrastructurenews.co.nz
In search of the perfect surface
Specialist New Zealand earth moving contractor Tony Wilson's relentless obsession with providing his clients with a completely level base on which to build has led him to even invent his own soil and earth compactor
been able to eliminate the grader phase of a final finish operation because the D61 has delivered the required quality," he said. As part of his pursuit of the perfect surface, Tony had been an early adopter of aftermarket trimming systems, achieving between 50mm and 70mm tolerance, enough to enable a grader's final finishing pass to be relatively simple. On each job, he established a flat Plane surfaceon which the cutting and trimming coordinates of his machines were checked daily to ensure they were optimised. It is a technique similar to setting-up successful racing cars to ensure all
corners of the vehicle are evenly balanced. "With the D61, we have a Komatsu technician come on-site to fine-tune the electronics specifically to requirements of the job, to ensure its providing the maximum result," he said. The Whenuapi airbase required ground preparation to a depth of 1.1 metres to construct 15,000 square metres of hard stand and taxiways. Cameron Civil achieved the complex task first time, and ahead of schedule. Cameron Civil is now trialing Komatsu's PC210LCi-10 excavator with Intelligent Machine Control, with the view to expanding its range of OEM-fitted precision
aids. "The iMC system on both the Komatsu dozer and excavator are semi-autonomous and don't require special operator skills to run it," Tony said. "We employ skilled operators for their general proficiency because our jobs will always benefit from having people with years of experience who know best how to employ the tools we use." Tony makes a point of spending time on his machines himself. "It's important to know what we're doing and hands on experience brings with it, a respect from the operators that you wouldn't otherwise necessarily get," he says.
August - September 2021
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