Corporate Killer

Unions help expose corporate plot to rob dying workers of compensation

Not satisfied with making a mint out of manufacturing a known killer and exposing workers to deadly fibres, asbestos giant James Hardie now stands accused of denying many of the estimated 40,000 people it has put on death row out of any compensation.

In yet another breathtaking company reshuffling act, Hardie moved its capital offshore and out of reach of the dying and their families.

And it's made headlines.

"Fraud, Lies and the Asbestos Disgrace" (SMH, July 29); "James Hardie's secret plan to spin the media and the politicians", "Suburban Killer" (The Financial Review, May 15); Asbestos giant: did it deceive? (The Australian, July 1); "A sinister killer, a flight to Amsterdam, and hundreds of millions of dollars at stake....", (SMH, April 28).

"This is the sort of corporate skullduggery you come to expect from transnationals," said MUA National Secretary Paddy Crumlin. "They regard people as irrelevant. They make billions out of our labour but think only about protecting profits, not lives. The company is guilty of mass murder, now they are trying to do a runner. It took a long time for our union to bring these people to account and the news is they still owe the workers and we'll pursue them until they cough up."

"It's yet another corporate reshuffling act, not unlike the Patrick attempt in 1998 to divide their company up, avoid unfair dismissal laws and reduce its exposure to worker entitlements and responsibility," said Sydney Branch Secretary Robert Coombs. "Or the CSL shipping reshuffle scam devised to dump Australian seafarers, evade Australian labour law and increase profits. We're just not going to let them get away with it."

The Maritime Union is one of the unions that took on James Hardie, demanding and getting a NSW Government enquiry into the company and the missing millions.

Miners died in their thousands from exposure while getting the raw asbestos out of the ground in deadly mines like Wittenoom, wharfies died loading and unloading it, manufacturing workers died making it into brake linings, construction workers died cutting and drilling the popular fibro used in just about all buildings from the post war up to the seventies and seafarers died from exposure to exposed asbestos lagging on pipes in the engine room and galleys.

And they are still dying.

What is peculiar about some asbestos disease is that it can take up to half a century to hit. But with mesothelioma, it takes only months to die. Australia boasts the highest rate of this malignant cancer, the most lethal of all asbestos diseases.

Australia also has the highest per capita rate of asbestos use up until the 1970s. It was mined until 1983 with tonnes also imported into the country until 2001, when the MUA threatened to ban all imports on the wharves.

So far 7515 Australians have died. But the death toll won't peak until 2020. The national mesothelioma register has calculated by then the toll will be 18,000. Estimates for all asbestos related deaths by that time are 60,000.

Hardies are responsible for about 50 per cent of all NSW claims.

"That makes them responsible for every second Australian who dies of asbestos disease," said Robert Coombs.

The company plot to avoid billions of dollars in compensation and legal action is as simple as it is sinister:

James Hardie was carved up with the former asbestos arm stripped of its assets five years ago. James Hardie Asbestos was renamed Amaca and the brake linings firm Hardie Ferrodo became Amaba. Hardie then moved to the Netherlands taking its billions safely offshore where last year it reported a bumper half yearly profit of $94 million.

Company spin doctor Greg Baxter and several top PR firms had the job of covering their tracks. The plan was to announce the move offshore by making it a simple business story to select journalists when announcing quarterly profits. An added diversion was the announcement of a new asbestos research centre, the Medical Compensation and Research Foundation.

This is all now on the pubic record.

Two years ago Hardie placed its former asbestos subsidiaries under control of the Foundation. The company claimed there was enough money to compensate all 'genuine' asbestos victims.

Within weeks of the restructure the actuaries advised the Foundation's chairman it faced an $800 million shortfall. That shortfall is now estimated at $2 billion. Some estimates put the compensation bill for asbestos claims against James Hardie at $6 billion. Hardie said it had no obligation to make up any shortfall.

The unions said this was no accident. And this is now being borne out in court.

Commissioner barrister David Jackson, QC, has used compulsion to extract trolley loads of Hardie documents, including board papers that show the real intentions of the executives and directors.

Documents obtained by the court from in-house company lawyer Peter Shafron expose the plot.

Shafron aimed for a "complete end to asbestos litigation for James Hardie". Their Project Green put "asbestos separation" as one of its three objectives. This would protect shareholders in Hardies more healthy fibre cement arm from asbestos claims.

"The key objective of minimising James Hardie's liabilities remains the same," Shafron's briefing paper said.

Hardie lawyer Wayne Attrill told the inquiry he knew the figures were wrong.

"What we think has happened is that Hardies have set up these companies to ring-fence their asbestos liability and then departed the country for the Netherlands," John Gordon, President, Australian Trial Lawyers' Association told ABC TV.

But Hardies met their nemesis in the union run Asbestos Diseases Foundation. The NSW Labor Council and unions (AMWU, MUA, ETU and CFMEU) successfully fought for a state government inquiry.

On June 30 after three months of hearings the commission's assessment to the premier did not mince words. It found the company guilty of deliberately devising a scheme to protect itself against claims, by stripping company assets. It also questioned whether company executives were in breach of corporate laws and guilty of deceptive and misleading conduct relating to disposal of assets.

It was put that the chief executive should be tried for fraud.

The inquiry will now take written and oral submissions before Commissioner David Jackson QC is due to report in late September.

ACTU Secretary Greg Combet has fought the company all the way.

"James Hardie have announced a first quarter profit of US$37 million - a 25 per cent rise," he said in August. "They predict an annual profit of up to US$169 million or around $240 million Australian.

"With current compensation requirements for Australian victims running at around $70 million a year, this shows there is more than enough to provide full compensation as well as provide a return to shareholders."

Meanwhile Labor leader Mark Latham has donated $77,500 in election funding from James Hardie to the Asbestos Diseases Foundation. He promised to enact new laws to reclaim the lost millions and prevent similar corporate skullduggery.

In August the pressure on Hardie began to show. The company has capitulated to mounting pressure. On the last day of the inquiry hearings Hardie offered to compensate all victims of asbestos diseases employed by the company.

See also Death Sentence, Coffin Rig, Black Friday, Black Bans, The Human Toll, Flowers for Our Fallen