Cremation: sector overview and policy issues
Overview of the sector
The cremation process
8.10The body, generally in a casket, is placed in the crematory furnace and exposed to extreme heat. During cremation, the soft tissue and most of the skeleton is reduced to ash. Some small bone fragments, known as cremains, also remain. Magnets are passed over the remains to attract any fragments of metal from artificial limbs or joints or from the casket used in the cremation.
8.11It is common practice in New Zealand to then grind the remains in a cremulator to give the uniform, sand-like consistency of the ashes, which can then be given to family members in an urn or other container. Some cultures, however, prefer that the cremains be left undisturbed, as the bone fragments are considered to have particular significance.
Other methods of dispositionTop
8.12 Around the globe, concerns about emissions and the high amount of energy required to cremate a body have led to the development of a number of experimental technologies for disposal of the body. One example is resomation, which uses alkaline hydrolysis to liquefy the body. Although not yet introduced in this country, some local authority crematoria are monitoring this and other new technologies. It seems likely that in future decades, alternative technologies for the disposition of human remains could well be introduced. While the focus of this chapter is on the regulatory environment surrounding cremation, the principles and policy issues under consideration would almost certainly be applicable to any new disposition techniques for the treatment of human remains adopted in New Zealand.
The mix of public and private providersTop
8.13New Zealand does not have a central register of crematoria; however, the Ministry of Health has compiled information, with help from the Funeral Directors Association of New Zealand, to provide data for this review. This information shows that there are 52 crematoria in operation, 15 of which are operated by local authorities, with the remainder being run by private providers. Some private providers operate as a standalone business supplying cremation services to the funeral services sector. Others operate within funeral homes and offer a full suite of services to the bereaved.
8.14The data shows considerable variation in the number, size and mix of public and private providers operating in different parts of the country. In some urban areas, including Dunedin and Invercargill, local authorities are the sole providers of cremation services, while in Canterbury cremation services are provided solely by the private sector. Other centres such as Wellington and Auckland contain a mix of local authority-owned and private crematoria. In other areas, a small number of local authorities have entered into partnerships or leasing arrangements with private operators, offering cremation services within or adjacent to the local authority cemetery.
8.15In Auckland, the majority of cremations are carried out at one of three crematoria operated by the Auckland Council (Manukau Memorial Gardens, North Shore Memorial Park and Waikumete Cemetery). There are also various private crematoria, some of which are run by trustee-managed cemeteries (such as Mangere Lawn Cemetery and Crematorium) or church trust boards (such as Purewa Cemetery and Crematorium). A private provider has approval to establish a crematorium on the site of the Buddhist denominational burial ground in Silverdale.
8.16 Not surprisingly, the number and location of cremation services tends to reflect population density, with larger population centres well catered for, while those living in more sparsely populated areas often have to travel considerable distances to a crematorium. On the West Coast of the South Island, for example, there is only one crematorium, based in Greymouth.
8.17The cremation of pets is growing in popularity, with services provided by the SPCA and specialist pet cremation businesses, as well as services offered by some regular cremation businesses. However, our focus in this Issues Paper is human cremation services, as animals-only cremation services do not fall within our terms of reference.
8.18The industry is going through a number of technological, environmental and commercial changes that are likely to have significant impact on its future make-up and structure.
8.19The profitability of running a crematorium is determined by a mix of factors including the cost of capital, operating costs, the efficiency and capacity of the cremator, the number of cremations carried out and revenue generated from fees and additional services. Barriers to entry are falling with the manufacture of smaller cremators which can be constructed relatively cheaply and installed with minimal investment in buildings. Modern cremators are increasingly sophisticated and designed to meet emissions standards and cater for the needs of different sized operators, including funeral homes that wish to have a small cremator on-site.
8.20This technology provides the funeral services sector with the opportunity to install crematoria so that funeral services providers can offer a full range of funeral and cremation services. Our analysis of the market shows that New Zealand is following a global trend towards vertical integration and, according to information provided to us by the Ministry of Health, a significant proportion of new cremators installed over the last 10 years were opened in conjunction with funeral homes.
8.21 At the same time, older and less efficient crematoria face the prospect of significant investment to upgrade or replace their cremators, if they are to renew existing resource consents. For local authorities confronted with this issue, the strength of private sector competition is a critical consideration. Our Local Authority Survey suggests that in situations where the local authority has been losing market share to private providers, it may be that they will either exit the market or will look to form a partnership arrangement with a private provider.
8.22As noted above, the Cemeteries and Crematoria Collective was recently established under the auspices of Recreation New Zealand to represent the interests of the cemeteries and crematoria industry in New Zealand.