PRICE ON — THE INTEGRITY OF THE SYSTEM
In my last column I alluded to the Minister of Transport giving the New Zealand Transport Agency (NZTA) a ‘pull-through’ over some warrant-of-fitness (WOF) problems, and also mentioned that Vehicle Inspection New Zealand (Vinz) was apparently certifying its own imports, amounting to some 175,000 vehicles a year. I said that was akin to placing Cookie Bear in charge of the cookie jar!
Since then I’ve done some more research into this and discovered that, in the end, we have yet another classic government backdown to powerful industry interests.
In November 2018, one Thomas Coughlan, a Newsroom reporter, did an exposé on the vehicle import industry, in which there are several players. He said, “One of New Zealand’s largest used car importers is flouting international rules designed to stop importers from testing their own vehicles, and the regulator has done nothing to stop it”.
Three companies, Japan Export Vehicle Inspection Centre (Jevic), wholesaling importer Nichibo, and Vinz, together import and certify thousands of cars from Japan each month. What was not communicated initially to NZTA was that these three companies, while originally separate and which operated in different parts of the import chain, were later (in 2015) owned by the same Japanese company, Optimus. The reporter stated that this flouted an international standard to which New Zealand adheres, and NZTA’S licence to both Jevic and Vinz forces them to disclose conflicts “immediately”.
Immediately — well, soon. Soonish.
It seems that in this instance ‘immediately’ meant around 12 months. In that time the companies had imported thousands of vehicles. So, being right on the ball as it were, NZTA issued a formal warning — in 2017. No messing about, then!
There is a very good reason for making sure that an importer cannot and should not test and certify any vehicle in which it has a financial interest, lest the tester face pressure to certify a vehicle as roadworthy when it might not be.
Those of you who own imports may have noticed — even been persuaded to buy as a result of sighting — that small circular label on the front windscreen that certifies that the mileage is deemed correct. The actual sticker reads “AA odometer verified e-certificate”. I was never convinced that some odometers have not been rewound via the computer diagnostic socket hidden away under the dash that taps into the vehicle’s computer, and I’m even less convinced now!
Conflict of interest
Jevic holds a licence from NZTA to import vehicles from Japan, while Vinz holds a licence for vehicle testing. The integrity of the whole importing / safety-of-vehicles process depends on the border process being open and transparent. Now, remember that Nichibo is a company that purchases cars in Japan for the purpose of export, Jevic carries out the checks before the cars are exported, and Vinz certifies the cars on their arrival in New Zealand. If these were all independently owned companies or businesses, there’d be no real issue, but there is when just the one company, Optimus, owns all three. Who is going to believe that there was never any pressure to certify a dodgy vehicle as being safe?
As one would normally expect, in November 2018 our intrepid Minister of Transport announced a proposed policy shift which included the following changes:
• “clarification of the definition of ‘conflict of
interest’;
• strengthened controls for appointing used vehicle entry certification inspectors and organisations to avoid these conflicts of interest; and • making sure that all vehicle inspectors and organisations have an ongoing duty to tell us about any conflicts of interest that arise.”
Consulting the industry
These proposed policy changes would have meant that, for any new appointment or renewal, the NZTA would no longer allow an inspection organization to carry out entry certification for a vehicle if that organization, or a related party, like a parent company or subsidiary:
• “has an ownership interest in the vehicle; or • has conducted border inspections for the vehicle.”
There was initially a two-week consultation on the proposed changes in November 2018 but industry demanded more time so the deadline was extended to March 2019.
There were some ‘interesting’ themes to the submissions. Space restrictions do not allow for full coverage, but the most interesting one was: “Third party compliance centres and importers/dealers are putting pressure on vehicle inspectors at point of certification (ownership of the vehicle is not the major issue). This is because an importer’s/dealer’s profit is dependent on the vehicle passing the inspection without repairs, and the compliance centre’s profit is dependent on maintaining the importers/dealers as customers.” Well! Whoever thought it would be about money?
“A more effective assurance solution”
As a result there was the inevitable backdown (read ‘wet bus ticket’ solution) and the decision that, “After careful consideration of the feedback, we have decided not to proceed with the policy consulted on, but instead implement a more effective assurance programme to ensure the integrity of entry certification decisions.”
That translates to ‘We’ll be doing very little’ — as we’ve all seen how well NZTA’S monitoring of agencies has worked so far, especially in relation to the heavy vehicle certificate of fitnesses to name but one example.
So the industry wins again. Those with good memories will recall how the industry forestalled the introduction of frontal impact standards for a number of years and to this day has effectively prevented the introduction of any emission controls. Remember the importers removing emission controls off early imports in the late 1980s because they ‘impaired performance’? Let’s not forget, either, those rust issues with early Nissan Terranos that needed a $3500 fix to fit a replacement rear floor section around the seat-belt anchorages. NZTA knew of that problem for some five years before implementing a repair requirement for WOF purposes — conveniently, after most dealer stocks were emptied of that model!
Many columns back I maintained that the safest car to buy is a New Zealand–new one, as mileage is easily checked via service history and WOF inspection history — providing of course that the tester doesn’t record the tripmeter reading, as one fellow did with an old Triumph 5TA motorcycle of mine. That immediately brought up the “Warning! Odometer may be incorrect” notice on the Carjam report. I gave up on trying to get that corrected.
So, so far, all that huffing and puffing about conflicts of interest around imports and compliance testing has achieved … absolutely nothing.