The nation’s leading union body has signalled its intention to fight any attempt by James Hardie to avoid meeting an expected shortfall in funds available to compensate victims of asbestos diseases, according to media reports.
A report in The Australian has quoted ACTU Secretary Dave Oliver as saying unions were ready to repeat their campaign of 2004 should James Hardie Industries refuse to shift from its current position that it was not liable to meet any shortfall in funding on the part of the Asbestos Injuries Compensation Fund (ACIF) beyond its current obligation to provide a portion of its profits to the fund under an agreement reached between itself and the New South Wales government in 2006.
“The union movement has run a significant campaign on this issue … James Hardie should not be under any illusion we would hesitate to do so again,” the newspaper quoted Australian Council of Trade Unions Secretary Dave Oliver as saying.
Oliver’s statement comes amid renewed anger following acknowledgements from the AICF – which was set up by James Hardie in 2006 to manage compensation claims to victims of asbestos related diseases under an agreement between the company and the NSW government and into which the company is obliged to pay up to 35 percent of its net operating cash-flow every year until 2045 – that a blowout in claims for mesothelioma meant it would face a shortage of cash by 2017 and would have to start paying victims in instalments if federal and state governments did not increase the size of a standby loan facility set up under the agreement by more than $100 million from $214 million to $320 million.
That request, along a statement from the company last month that it had ‘no responsibility for a shortfall in AICF funding’ outside of its obligations under the 2006 agreement and that it considered that the agreement as it currently stood ‘appropriately balances the needs of all stakeholders, including present and future asbestos compensation claimants …’ has provoked outrage from both political and union leaders.
Both Treasurer Joe Hockey and Opposition Leader Bill Shorten say James Hardie – not taxpayers – should meet the cost of any funding shortfall, whilst the aforementioned report quotes Oliver as saying it is ‘deeply concerning’ that the AICF was facing a shortfall in funding at a time when James Hardie had paid out $US556 million in dividends over the past two years.
Having been the dominant manufacturer of building products, insulation, pipes and brake linings containing asbestos in Australia for much of the twentieth century, James Hardie agreed to establish the AICF in 2006 in response to public outcry after the company – which had relocated from Australia to the Netherlands in 2001 – acknowledged its initial funding provided to an earlier fund set up to manage asbestos claims would be grossly insufficient to meet the expected number of claims but initially refused to make good the shortfall.
Thus far, James Hardie has paid approximately $720 million into the fund, which has paid out almost $800 million to asbestos victims and settled almost 4,000 claims.