Published: 17 Sep 2014
From today's Working Life.
Revelations that the compensation fund set up by James Hardie for asbestos victims could face a financial shortfall within three years has reopened old sores, with the company being accused of putting its own profits ahead of the interests of asbestos sufferers, Mark Phillips reports.
Asbestos support groups and unions have slammed James Hardie after the company informed the Australian Securities Exchange on Monday that the likelihood of a shortfall in the funding of claims in 2017 would mean asbestos victims being paid compensation in instalments, rather than a lump sum.
It comes after James Hardie in May reported a doubling of its full-year net profit to US$99.5 million ($110.5 million).
The ACTU has written to James Hardie chief executive officer Louis Gries with a “please explain” and is seeking a full briefing with the company about the financial state of the Asbestos Injuries Compensation Fund, which was set up in 2006 as a special purpose fund to compensate asbestos sufferers with claims against former James Hardie group subsidiaries.
Spike in mesothelioma cases
The establishment of the AICF came after a union-led campaign against the company that was the subject of the book and ABC-TV mini-series Devil’s Dust.
Under the legal agreement signed between James Hardie and the NSW Government in 2005, the building products company is required to contribute up to 35% of its net operating cashflow to the AICF until 2045.
Since 2007, James Hardie has contributed $721.4 million to the fund, including $119.9 million transferred on 1 July. The fund also has access to a $320 million loan facility with the NSW Government.
But problems have emerged with the fund because the number of Australians dying from asbestos is still climbing, with a spike in the number of cases of mesothelioma. It has previously been estimated that up to 18,000 Australians will have died from mesothelioma by 2020, with many of them contracting the disease at work.
Meanwhile, the company last month paid out US$231.4 million ($256.7 million) in dividends, bringing its total dividend payments since the second half of 2012 to US$743.6 million ($825 million).
‘Slap in the face’
Barry Robson, president of the Asbestos Diseases Foundation of Australia, said the move by the AICF to pay victims by instalments was a “slap in the face”.
Mr Robson said the community would rightly be outraged at James Hardie’s “immoral behaviour”, particularly as Mr Gries is now reportedly being paid almost $12 million a year.
“Asbestos victims don’t die in instalments, they don’t lose the ability to work or care for themselves in instalments, yet James Hardie wants to see them compensated in that way,” he said.
“James Hardie spent decades knowingly selling these deadly products that to this day are still found in millions of homes and workplaces around Australia, leading to a growing number of home renovators and others in the community being exposed to asbestos fibres.
“The death toll from those products is still rising, with more Australians now dying each year from asbestos related diseases than the total number who die on the roads.
“These diseases are particularly devastating and require costly medical care.”
Unions have also joined the fray, with the ACTU secretary, Dave Oliver, seeking an urgent briefing from Mr Gries on the current and projected financial situation of the AICF.
“It is unacceptable to sufferers of asbestos related diseases that their right to compensation and their ongoing care has been put at risk by a company driven by profits rather than their legal and moral responsibility to ensure the ongoing viability of the fund,” he said.
“Our message to sufferers of asbestos related diseases is that unions will continue to vigorously pursue the maintenance of a fully-funded compensation scheme as a major priority.”
However, unions are keeping their powder dry on whether they will oppose the Supreme Court application by the AICF, with Mr Oliver saying it is in the interests of victims for James Hardie to remain a profitable business so it can continue to meet its future obligations to the fund.
Original story here.
