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Last Updated: Wednesday, 1 December, 2004, 18:04 GMT
Building giant caught in asbestos row
By Christian Mahne
In Sydney

Day in, day out the permanent picket line at the international building materials giant James Hardie's gates provides a very visible reminder of deep anger surrounding an asbestos compensation debacle that has rocked Australia.

Picket line at the international building materials giant James Hardie's gates
There are about 15,000 victims of asbestos diseases in Australia

Australia has one of the world's highest rates of mesothelioma, a deadly lung disease caused by long-term exposure to asbestos.

Like many firms, units of James Hardie used to use the substance extensively in insulation.

On Thursday a compensation fund, set up by the company to look after an anticipated 15,000 victims of asbestos diseases in Australia, goes to court to ask for an administrator to be appointed.

Their reasoning - simple maths.

The Medical Research and Compensation Foundation has US$60m of notified claims against it and only US$30m of assets.

Not liable

The victims come from all walks of life, from factory workers to home renovators. All people who have come into contact with asbestos products made by James Hardie Industries.

Picket line at the international building materials giant James Hardie's gates
Protestors are calling for a global boycott of James Hardie

That old company is now defunct. James Hardie Industries became James Hardie NV when it relocated to the Netherlands in 2001.

Since then, Meredith Hellicar, chair of the Dutch parent, has consistently denied the new company has any liability for the actions of its Australian subsidiary or any obligation to bail out the compensation foundation.

"We're not in a position to provide them with the money. As we've said all along, because we have no legal liability we have to take this proposal to our shareholders," she says.

Legal backing

So far it would seem that Ms Hellicar has the letter of the law on her side, according to Brian Ferrari, a Sydney based insurance law barrister with knowledge of the Hardie case.

James Hardie building
Critics say the buildings firm deliberately skipped the country

"There's a strong emotive argument that [James Hardie NV] should come and pick up the liability, but the legal situation is that no one has yet pointed to their liability in the guise of the old James Hardie Industries [of Australia] to pay the individual claimant's funds.

"James Hardie in Holland says that there's a wall between us and Australia; we've got no obligation to fix up any of the Australian company's money.

"Even when you get to the Australian company there's nothing that anyone's produced up to this stage to show that it has any liability to pay people who were injured by its subsidiary."


For now the factory gate demonstrators are doing what the fund cannot; collecting money for victims of asbestos diseases from passing motorists.

Meredith Hellicar
The chief of the Dutch parent firm, Meredith Hellicar, says it is not liable

The compensation impasse has destroyed James Hardie's reputation in Australia. Behind the wire and fences, there is a company under siege.

The unions are against them, the politicians are against them, the public are against them. James Hardie's image has been impaled on a thousand banners and boycotts around the country.

Some of the most vociferous attacks have come from the unions which believe that James Hardie skipped town to escape its asbestos liabilities.

"James Hardie only understands one thing and that's the bottom line," says Tim Vollmer from the construction, forestry, mining and energy union and the man behind their Australia-wide boycott of James Hardie products.

"Unless we can hit their profits and hit their profits hard with an extensive global boycott, they don't seem like they're going to listen and they don't seem like they are going to resolve this issue."


But the attacks go both ways.

Ms Hellicar has been ridiculing the compensation foundation's insolvency action.

Picket line at the international building materials giant James Hardie's gates
James Hardie's image is in tatters

"I just think what they're doing is a stunt," she says.

But those comments are dismissed by Dennis Cooper, the compensation foundation's managing director.

"Well, it's so separated from reality it's ludicrous that one would call this a stunt when in fact it's quite clear that our stakeholder interests which are future victims has been at the forefront of our minds continually in everything we've done."

US$25m was offered last week by ABN60, the Hardie shell company left in Australia. But it came at too high a price - indemnity from all future claims. So Mr Cooper sent the money back, putting lawyers on notice that the fight was turning nasty and prompting the current Mexican standoff.

If the fund goes under, the New South Wales Government has said it will consider retrospective legislation to wind back James Hardie's offshore move in 2001 and force it to face the asbestos liabilities back in Australia.

Australia builder in asbestos row
21 Sep 04 |  Business

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