The 'other virus': Businesses urge change to Covid-19 strategy

Lockdowns, mass self-isolations - dubbed the "pingdemic" overseas - industries closed: none of it helps the economy. Jane Phare talks to the business world about what they need to survive and thrive in a world dogged by Covid-19.

Much like a birthday cake covered in those annoying 'magic' candles, Covid-19 keeps flaring up, somewhere, somehow, refusing to be snuffed out.

At birthday parties those reigniting flames cause much hilarity. But for New Zealand's business community and the wider economy, the reappearance of the coronavirus in various mutated forms is no laughing matter. Lockdowns, alert levels, border closures, the shortage of MIQ spaces, thousands of people in isolation, closed businesses and supermarkets, lost incomes, mental health, none of it is good news.

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Many in the business community think the current lockdown-and-eradicate-the-virus approach is unsustainable. Animation Research's Sir Ian Taylor calls the effect on the economy "the other virus," stealthily undermining businesses, affecting exports and costing the country billions of dollars. He and others, including the Employers and Manufacturers Association (EMA), think more could be done to reduce the damage and they want the Government to listen up.

EMA's chief executive Brett O'Riley says the level of acceptance by the business community demonstrated during last year's lockdowns is waning. And global markets, now back in business, are losing patience with New Zealand suppliers unable to fill orders.

Employers and Manufacturers CEO Brett O'Riley says the current system for dealing with Covid-19 is unsustainable. Photo/Chris Loufte

The goodwill apparent during last year's lockdowns, at a time when the rest of the world was struggling with the same issues, is "evaporating rapidly," he says. Offshore customers with a contract expect New Zealand suppliers to deliver or they'll go elsewhere.

"So the downstream effects are really starting to bite. We're talking hundreds of millions of dollars that are at risk if our companies can't reliably supply the customers."

Exporters are already constrained by distance and now by a global supply chain that is severely disrupted, causing ships to leave New Zealand ports empty because product cannot be loaded. Some local manufacturing companies are now looking offshore to reduce their risk so they're not so reliant on manufacturing in New Zealand.

Asked whether future lockdowns could be avoided once the majority of the population is vaccinated, the Ministry of Health said no decision had been made. Deputy director general of strategy and policy Maree Roberts said vaccination allowed a rebalancing over time from protection at the border alone to a mixture of border, community preparations and responses to any infections.

Shortage of MIQ spaces a headache for businesses

In the meantime the lack of MIQ spaces and the inability to book remains a major headache for the business community who need staff to travel overseas. O'Riley says the current Covid management system is unsustainable and that it is time to take a different approach, particularly once vaccination rates are higher.

The business community wants the private sector to run MIQ hotels for business travellers, to free up more spaces for returning New Zealanders. Photo/Michael Craig

Allowing the private sector to run its own MIQ facilities under Ministry of Health guidelines would be a good start, he says. The business community could "give New Zealand back Christmas" by freeing up desperately needed MIQ spaces.

He argues that MIQ facilities run by the business community would be safe, if not safer, than those run by the Government because accredited employers could ensure their staff were vaccinated. And the requirement to be tested and to stick to the MIQ rules would be part of an employee's contract.

"There's a pretty powerful incentive for businesses and their staff. They want to be paid and they ultimately want the business to not go under."

Taylor couldn't agree more. He needs to send 10 Animation Research staff to Australia next month to prepare for the Ashes cricket test series but is reluctant to let them go because the MIQ queues mean he doesn't know when he'll be able to get them back into the country.

"Some of those staff have travelled to the most Covid-ravaged countries in the world and have been kept safe because we have protocols in place, including our own tracking system," he says.

Animation Research founder Sir Ian Taylor wants to see some innovative thinking to help Kiwi businesses survive in the Covid era. Photo/supplied

"You've got to trust businesses to be responsible for the people they send overseas and back."

MBIE did not respond directly to a query from the Herald as to whether the Government might consider the prospect of private MIQ facilities being managed by the business sector. Instead a managed isolation and quarantine spokesperson said MBIE a range of options was being considered including the continuation of the existing system, the potential feasibility of any purpose-built facilities, timeframes, and costs.

"No decisions have been made on the best model for the future of MIQ. These are decisions for Cabinet ministers."

Give us the freedom to stay open

Others in business want to see easing of alert levels 3 and 4 in the future so businesses can keep operating, particularly if the majority of Kiwis are vaccinated. With his Dunedin base now back at level 2, Taylor was frustrated that a handful of staff couldn't work in level 4 from the building, rebuilt with Covid in mind during a major renovation last year. The building was designed with three separate entrances, segregated work spaces and separate kitchen areas so staff could stick to their bubbles.

During last month's lockdown, Animation Research needed staff to remotely cover golf tournaments around the world, including the Ladies Open at Carnoustie in Scotland where Lydia Ko competed. Three of the staff, all flatmates together, moved into the building during lockdown because they weren't permitted to commute to and from work. It's a rule that Taylor thinks doesn't make sense.

Retail NZ CEO Greg Harford also wants to see an easing of alert level rules in the future. He wants the Government to consider allowing retail stores to open in level 3, if customers are wearing masks and maintaining social distancing - much like supermarkets.

But that's unlikely to happen anytime soon. The Herald put that proposal to the Government and got a negative response. A Department of the Prime Minister and Cabinet Covid-19 group spokesperson said having too many businesses operating during alert level 3 increased the odds of transmission with workers moving in and out of their home bubbles, connecting bubbles, and increasing the potential chain of infection in the community.

"We are always looking for ways to improve our response, including ways to allow more business activity while keeping New Zealanders safe."

Retail NZ chief executive Greg Harford questions why retail stores can't open safely under alert level 3 in the future. Photo/Mark Mitchell

Harford says retail sales have recovered since last year but each lockdown makes it harder for businesses to bounce back, and he's predicting some casualties this time round. Lockdowns are unsustainable in the long run, Harford says.

"You just can't sustain that forever. The country ultimately can't afford it."

Taylor agrees total lockdowns cause long-term damage to the economy. His message to the Government is: "Give us parameters in which we have to work but please don't give us parameters in which it's impossible to work."

He wants to see more flexibility so that companies that need to send staff overseas or to work at their premises during lockdowns can do so.

"It's safer for them to go to their warehouse than it is to go to the supermarket but no one's listening. The virus that is running through the economy is really dangerous and there is no vaccination for it."

A military touch to a fishy story

Almost overnight Covid-19 changed the way Sanford Ltd operated. Faced with an unknown threat and an increasingly anxious staff, the company decided to shut down all operations for three days to give them time to think and plan.

Sanford's fish processing plant in Timaru. Photo/supplied

Peter Young, normally in charge of infrastructure and engineering, put his hand up to help. With a military background and experience in crisis management, he undertook a major overhaul of the way the company operated, involving 1300 staff, 13 locations throughout New Zealand and 37 boats, including mussel barges.

Everything was redesigned, from car-parking spaces to allow a two-metre distance, carpooling, work habits and shifts. Perspex shields went up on production lines, work spaces and communal cafeteria areas so that bubbles weren't crossed, and groups were staggered so they never crossed paths.

The nightly deep clean changed to a four-hourly clean. The arrival times of shift workers, sometimes 40 to 50 in a group, were staggered so that only two people were ever in the normally crowded changing and locker rooms. As a result a 15-minute shift change became a 90-minute process.

Those Covid layers of protection have been enormously expensive and caused lost production time in the fish processing plants. But, says Karen Duffy, the company's chief people officer in charge of the wellbeing and safety, the system has worked. No plants have had to close and staff attendance rates have been well up.

Sanford's chief people officer Karen Duffy says the company shut down operations for three days when Covid-19 struck. Photo/Brett Phibbs

"Our objective was to maintain the ability to feed New Zealand and the world while keeping our people safe."

The NZX-listed company was hit hard early on by the impact of Covid, reliant on global export markets and the food-service trade (70 per cent of all fish is consumed outside the home globally). In the year ending September 2020 revenue dropped 14 per cent to $468.8 million but expenses rose, including air and sea freight costs. The company's net profit dropped by 46 per cent to $22.4m compared to the previous year.

Duffy is quick to say Sanford is "extremely grateful" for the Government's air freight subsidy to get to export markets but the company would also like to see greater access to MIQ spaces in an attempt to claw back lost revenue.

"With just under 70 per cent of our product exported it would be advantageous for our people to be able to grow our markets."

She'd like to see the Government explore options within the elimination strategy that would also support easier international travel for the business community.

Struggling also is the restaurant and cafe sector, forced to close in alert level 4 and limited to takeaways at the door in level 3. Restaurant Association chief executive Marisa Bidois says "constant yoyo-ing" of levels is extremely hard on members and creates major uncertainly. Even level 2 conditions are not sustainable for many in the industry.

Now the association is looking at ways it can help itself, including "vaccination passports"
to be carried by diners to prove they have been vaccinated, a requirement for staff to be vaccinated and routine testing for employees.

The curse of the 'pingdemic'

With Covid-19 here to stay, at least in the near future, the issue of thousands of workers having to isolate for 14 days if they are "pinged" by the NZ Covid Tracer app has caused major issues for a number of companies. In the UK they've dubbed it the "pingdemic", putting strain on businesses and critical services due to staff shortages.

New Zealand has had its own mini version of the pingdemic, most recently causing issues this week at Middlemore Hospital when 29 staff were stood down as close contacts. And after a barman at Spark Arena tested positive for Covid last month, 2100 people – and their close contacts – who attended corporate functions were forced to isolate. Many of them would have been able to work from home, but many more would not.

After a Mitre 10 awards function at Spark Arena 1000 people had to isolate after a barman tested positive for Covid-19. Photo/supplied

Since the latest Delta outbreak Countdown has been hit hard, causing seven of its supermarkets to close temporarily after more than 2500 staff were deemed close contacts or unable to come to work. And Sistema's Auckland factory was forced to close last month after an employee tested positive for Covid-19.

Early on in the pandemic, entrepreneur Sam Morgan and Sir Ian Taylor urged the Government to invest in New Zealand technology to develop a Kiwi Covid Card, arguing that it would be more specific than the QR code/venue-based tracer system, more accurate than Bluetooth, and free to users.

But that option was dismissed and technology experts say there is no perfect system, otherwise the world would have found one. Hundreds of "false positives" finding themselves isolating for 14 days is unavoidable under New Zealand's current method of stamping out Covid-19, says Andrew Chen, researcher in digital technology at the University of Auckland. False positives are those who are "pinged" but do not have coronavirus.

On the other hand, a false negative is someone the tracing system misses, and they later test positive after spreading the virus in the community.

"And I guess the question is which is actually worse, because it's very hard to tune the system so that you have none of either. A lockdown is essentially an approach that says 'We don't care about false positives, we really, really care about false negatives,'" Chen says.

Auckland University researcher Andrew Chen. Photo/supplied

The current tracer system is by no means perfect, he says, citing adoption challenges, high error rates, and 20 per cent of the adult population who are digitally excluded. Before the current lockdown only about 10 per cent of adults were scanning QR codes on a daily basis and only about 35 per cent to 40 per cent of adults had Bluetooth turned on.

"The comms haven't been great. In the interest of having short snappy messages, 'turn Bluetooth on', you lose all of the detail about how you actually do that," Chen says.

One technology that would be more accurate is GPS tracking, he says.

"But the trade-off is one of privacy. Developed countries are wary of opening that can of worms."

Chen doubts GPS tracking will be considered in New Zealand.

"I think a lot of people will feel that that's a bit too creepy even though the data doesn't actually go to the Government."