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November
2004
ACTU
forces James Hardie to pay up
The
sorry saga in which the James Hardie Group took extraordinary
steps to avoid its responsibilities to the victims of asbestos
poisoning appears to be reaching a satisfactory conclusion. Nick
Blake explains.
Until
the late 1980's, James Hardie was Australia's largest manufacturer
of asbestos products, particularly asbestos cement sheets, commonly
referred to as fibro sheets.
Australia had the highest per capita use of asbestos in the world
from the 1950's until the 1970's, with around a third of all
domestic dwellings constructed in Australia before 1982 contain
some asbestos product.
We now know that the James Hardie Group was aware of the dangers
of asbestos decades before it placed any warnings or directions
on their fibro products in the 1970's.
It is now common knowledge that handling asbestos without proper
safety equipment can cause mesothelioma, a cancer that occurs
in the lining of the lungs and causes extreme pain, breathlessness
and death.
Mesothelioma cannot be cured, and is usually fatal within 9-12
months of diagnosis. Asbestos is also implicated in other diseases
including lung cancer and asbestosis.
It is estimated that 7,500 Australians are dying of mesothelioma,
with more than 400 Australians contracting the disease each year.
This number is expected to rise until 2010, with 18,000 people
likely to die by 2020.
Rather than addressing this horrible legacy, the James Hardie
Group embarked upon an elaborate organisational restructure in
order to separate the Hardie Group's operating assets from its
asbestos liabilities by stripping the asbestos producing arm
of the company of its assets and leaving it with the bulk of
the asbestos liability.
In February 2001, in what is now seen as a token gesture, James
Hardie established the medical research and compensation foundation
with around $300 million in assets to provide compensation to
sufferers of asbestos diseases.
Later that year, the James Hardie Group also established a new
company in the Netherlands and transferred the bulk of the company's
assets to that new company.
It quickly became apparent that the medical research compensation
foundation did not have the necessary funds to compensate asbestos
victims, and that it would be very difficult to pursue the James
Hardie Group for additional funds given it had moved offshore.
When this became evident, it prompted a huge public outcry from
unions and community groups on behalf of asbestos victims.
The ACTU immediately called on the James Hardie Group to provide
unconditional funding to ensure asbestos victims claims would
be paid. It also sought the prosecution of senior managers of
the James Hardie Group.
Speaking on ABC TV's Lateline, ACTU Secretary Greg Combet said:
'I can assure people, and particularly anyone who is watching
who is suffering from asbestos disease or who has a family member
or friend who is suffering, the union movement will not be letting
this issue go.
'This is one of the largest exercises to avoid moral and legal
obligations in Australia's corporate history and we are going
to fight very hard to bring them to justice.'
The Jackson Inquiry into James Hardie's dealings over its asbestos
liabilities, led by David Jackson QC, found the company's restructure
and move to the Netherlands three years ago had left the compensation
fund for asbestos victims by the company at least $1.5 billion
short.
Jackson also concluded the company and its senior executives
had misled and deceived the public by claiming the company had
enough money set aside to cover all future asbestos-related claims.
In the face of growing public outrage and sustained pressure
from the ACTU, the James Hardie Group has now reluctantly announced
its intention to negotiate the payment of additional compensation
for current and future asbestos claims.
This shameful saga is yet another example of corporate excess,
where the fundamental objectives are confined to profits and
the share market.
For decades, the James Hardie Group made massive profits in Australia
by manufacturing a product that was deadly if handled incorrectly
by their employees or consumers.
The Group has a responsibility to make good the damage it has
caused, no matter how long it takes, no matter what the cost.
Nick Blake
Federal Industrial Officer |
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