Christchurch's lesson: Government-imposed bureaucrats froze small local businesses out – Part 3

The level of business activity was somewhat of a rollercoaster ride for most businesses following the Christchurch earthquakes.

Business owners reported an almost manic increase in the level of activity in the immediate aftermath of the event. The services of electricians, plumbers, and engineers were urgently needed and became highly sought after in the post-quake environment.

However, a distinction must be drawn between the increased level of activity and economic measures. Without exception, all business owners in the study spoke of being no better off financially. There are a number of reasons for this, including the increased cost of leasing premises because of a shortage of space in the city.

I have recently conducted research into the effect of the Christchurch earthquakes on small business, more particularly, those defined as zero-employee businesses.  

Of particular interest are their comments to the effect that the financial situation was made worse by bureaucratic processes leading to these business owners making conscious decisions to disengage from Fletcher EQR.

Previous studies have found businesses that were financially healthy before a disaster and who suffered little or no damage and those that continued without having to close had a greater chance of surviving.

The innate nimbleness of small businesses contributed to their ability to adapt and adjust rapidly to the situation, post-quake. Businesses associated with the rebuild were better off financially because the event created work for them. However, this appears to be only of short-term benefit.

In December 2015, the zero employee business owners reported that they had indeed recovered to their "pre-earthquake financial position" but the principal barrier they all encountered was the bureaucratic process.

Taken at face value, it appears that zero-employee business owners are predominantly no worse off financially now but only if no account is taken of the money still owed to one of them by EQC. They continued in business because financial considerations were secondary to their personal values and beliefs.

There was a gaping chasm between the bureaucratic norm of what the government was prepared to do in the disaster context and the emergent norms – the expectations of the victims of the catastrophe. The Christchurch situation is interesting in that the zero employee business owners, by their own admission, had no expectation of government assistance.

This clearly was not the case for all citizens of the greater Christchurch area.

It was evident that many people had high expectations of government assistance. In the wake of almost all disasters, there is a gap between the rules that direct societal interaction (the emergent norms) and the conduct of the government of the day (bureaucratic norms) that control government activity.

The wider the gap, the more likely it is that government efforts will be viewed as a failure. Zero-employee business owners indicated a disconnection between their expectations of the procedure governing the rebuilding process and what actually took place. Mainstream media, as well as social media, ran hot (and continues to do so) with many speaking out about the government's lack of democratic process in establishing CERA to run roughshod over existing legislation. The resulting bureaucracy failed to engage and meaningfully consult with the people on the ground.

The consequences of this failure are twofold. First, financial resources have not been applied to areas of greatest need and resources have been applied to projects which have later proved to be unnecessary or unsound.

Secondly, more importantly, the common bond of shared trust extended by zero employee business owners to their communities has been breached at government level. Small businesses rely on strong interpersonal connections between individuals and significant importance is attached to the quality and nature of those connections. Zero-employee business owners have indicated a lessening of goodwill as a result of what they have suffered at the hands of government processes.

They report being "a lot more careful with people now in case we don't get paid." The emotional toll on business owners feeling great personal stress and uncertainty about their economic future cannot be underestimated.

So, is New Zealand adequately prepared for future natural disasters and, if not, what needs to be done in order to be better prepared? The Christchurch experience should serve as a timely reminder that we cannot afford to be complacent.

Whose ultimate responsibility is it for preparedness: the government at national level, local body level, or should citizens take responsibility at community level? The core issue is that zero employee businesses are crucial to the country's economic health. It is imperative that consideration be given to their special character and adaptive capacity that can be called on during times of disaster.

These are immeasurable resources. Zero-employee business owners felt overwhelmed by the sheer volume of bureaucratic processes and compliance protocols needing to be overcome for them to complete a simple task. They further felt betrayed by people in government agencies, which then led to their disengagement from the rebuilding processes.

Herein lies the problem: If bureaucracies need to be 'overcome' for businesses to function effectively, then the bureaucrats have lost sight of their core mission to protect the interests of all citizens. Bureaucracies are meritocratic, supposedly resistant to being influenced by special interest groups. Where this occurs, it is a failure of bureaucracy and the bureaucrats have failed Christchurch. Small enterprises contribute significantly to New Zealand's economy –  it is imperative they are given greater consideration by governance, both at local and national levels.

Debra K Harding runs a consultancy providing liaison between her clients, the Earthquake Commission (EQC), Fletcher Earthquake Repairs (EQR) and private insurers. She also provides a project management service involving the repair of earthquake-damaged residential properties. 

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