Hundreds of unionists rally at AGM
October 28, 2004 - 4:34PM
For Wendy Keogh, Thursday's protest rally demanding James Hardie Industries pay compensation to asbestos victims was particularly important.
Her husband Ron, a former Telstra worker who had used James Hardie products, died in February from mesothelioma after being diagnosed with the deadly disease in September last year.
"I am here just as a grieving widow," Mrs Keogh told the rally in Melbourne.
Holding a single yellow flower and a framed photograph of her beloved husband, she held back tears as she told the crowd it was difficult to talk about his agonising death.
"I wouldn't wish the disease on my worst enemy," she said.
"I'm just so devastated. So please, do the right thing and make James Hardie pay."
Mrs Keogh said Ron would now not get to see his 10 grandchildren and one great-grandchild grow up.
She was not alone in her anger.
Hundreds of unionists, Telstra workers and asbestos victims rallied outside the annual general meeting in a show of solidarity.
...The protesters called for the resignation of Telstra chairman Donald McGauchie, who is also a board member of James Hardie, which is at the centre of a dispute with unions over compensation for asbestos victims.
Also speaking at the emotion-charged rally was ACTU president Sharan Burrow, who said James Hardie was a "corporate criminal".
.."We are here for Wendy's Ron and all the Telstra workers," she said.
"They didn't know that their lives and the lives of their families would be torn apart by this killer product.
"James Hardie did know.
"If you knowingly use or do something that will take another person's life we call that a crime.
"These people are corporate criminals and they've known for many decades that their product kills."
Jeeze, they just keep getting worse! What an attitude!:
James Hardie delays more compo funds
November 2, 2004 - 2:15PM/SMH
James Hardie Industries NV has not made a provision for further asbestos liabilities it may face, the company has revealed.
The building products company has also said that if it does reach an agreement with union and asbestos representatives to contribute further funding, it may have to borrow funds to make a provision on unfavourable terms.
A future resolution might also "result in the company having negative shareholders' equity", the company said, "which may restrict its ability to pay dividends to its shareholders".(!)
The statements are contained in financial documents filed with the Dutch Chamber of Commerce and released on Monday on the Australian Stock Exchange.
In the financial statements, the Netherlands-based company said it has not established a provision for asbestos-related liabilities as of March 31, 2004.
"The company's view is that, except to the extent that it agrees as a result of these discussions (with union and asbestos victim representatives about the acceptability of a proposed statutory scheme), under current Australian law it is not liable for any shortfall," the documents state.
The document said if a resolution is reached on contributing further to compensation, "the company may be required to make a provision in its accounts at a later date and it is possible that the company would need to seek additional borrowing capacity".
"The company can not guarantee that it would be able to borrow funds for this purpose on terms that are reasonable to the company," it said.
"If the terms of a future resolution involve James Hardie making payments, either on an annual or other basis, to a scheme or other form of arrangement, James Hardie's financial position, results of operations and cash flows could be materially adversely affected."
The company also said boycotts of its products organised to pressure it during discussions could also have a material adverse impact.
Can you believe this??????
Totally despicable! They seem to feel more responsibility for their shareholders' profits than for the victims of asbestos!
I'm just gob-smacked, disgusted & furious!
Thu 4 Nov, 2004 11:57 pm
Ruddock on Hardie. Let's hope the Libs do the right thing here:
James Hardie treaty not needed: govt
November 5, 2004 - 4:24PM/the AGE
It was not necessary to set up a treaty with the Netherlands to enforce Australian court rulings against the James Hardie company, the federal government said.
James Hardie, still under investigation over a shortfall in its compensation fund for asbestos disease victims, has had its headquarters in the Netherlands since 2001.
The federal government said last month it had approached the Netherlands to set up a treaty that would enforce Australian court rulings there.
But Attorney-General Philip Ruddock now says a treaty will not be necessary.
"The Australian government has been advised by Dutch and US authorities that, in general, conventional Australian court judgments can form the basis of legal action in their respective jurisdictions," he said in a statement.
"As such, treaties are not required but the government has been involved in communications with Dutch and US authorities regarding arrangements to ensure that Australian judgments are able to be enforced where necessary."
James Hardie is under investigation by the Australian Securities and Investments Commission (ASIC) over a $1 billion-plus shortfall in compensation for victims of its asbestos products.
ASIC could recommend prosecution of the company and/or its executives, and Mr Ruddock said the government would not hesitate to prosecute James Hardie if it had broken corporate law.
The ASIC investigation began in September following the completion of an inquiry commissioned by the NSW government, which identified possible contraventions of corporate law.
Mr Ruddock also said the federal government would investigate legal options to obtain funds from James Hardie if a solution to the funding crisis could not be reached through discussions with unions.
He said a ministerial council had agreed in principle to consider options for law reform if the current negotiations between the company, the ACTU and asbestos victims broke down.
The Ministerial Council for Corporations also had agreed to provide its vote on any out-of-session legislation, he said.
Unions and asbestos victims have been locked in talks with James Hardie for weeks as they try to come up with a solution to the funding crisis.
James Hardie has no legal obligation to provide any extra money but has stated it would voluntarily provide more funding.
The funding crisis stems from a foundation James Hardie set up in 2001, which took over the company's asbestos liabilities.
James Hardie had provided that foundation with $293 million to meet all future claims.
But that's proven to be insufficient, and estimates now put the shortfall at well over $1 billion.
Hardie profit hit by boycott
November 23, 2004/the Australian
JAMES Hardie has slashed its profit forecast and admitted that union boycotts of its products were hurting the Australian business -- sending its shares into a spin yesterday.
Hardie shares ended at $6.13 yesterday, 9 per cent down on the $6.75 finish last Friday, after the company said net profits fell 9 per cent to $US61.1million.
This was despite a favourable housing market in the US, where Hardie generates more than 85 per cent of its earnings.
Hardie forecast earnings for this year of $US131million-$US145 million -- well down on analysts' forecasts of $US151 million-$US160 million which the company had endorsed.
The revised guidance excludes asbestos-related costs, which were held partly to blame for the disappointing result in the September quarter. While net sales lifted 20 per cent in the quarter, operating profit fell by 25 per cent to $US24.7 million based on continuing operations.
During the quarter, James Hardie booked $8.5 million in asbestos-related costs, including $6.3 million for legal advice and representation during the NSW Government's special commission of inquiry into funding of its asbestos liabilities.
These one-off costs are separate from the cost of funding expected asbestos-related claims, which were yesterday estimated at $1.536 billion by KPMG, which updated its actuarial forecasts by a year, to base them on claims data to June 30, 2004.
Louis Gries, who became interim chief executive of James Hardie Industries after his predecessor, Peter Macdonald, resigned last month, said boycotts of Hardie products, imposed by some unions and local councils, were starting to have an effect in Australia.
"Customers have been pretty loyal to the product -- it's a good product and has a good market position -- but we have been impacted by the bans and boycotts," he said. He said, however, that any earnings impact from brand damage in Australia was "immaterial".
Interim chief financial officer Russell Chenu said the group had $US300 million unutilised bank debt available for any future asbestos liabilities.
James Hardie also announced it faced increased operating costs of $US8 million, including higher fuel and timber pulp prices, and production problems at three US plants that were being upgraded.
Mr Gries said the company had faced capacity constraints during plant upgrades but the problems were behind the company except at the Blandon, Pennsylvania, facility where work was still under way.
Overall, Mr Gries said, "our confidence in this business has not changed one bit because of the second-quarter result".
A leading analyst said the market had overreacted somewhat to a disappointing operating result for the quarter, rather than the news about the minor financial impact of product boycotts.
"I don't really think the asbestos liability was the issue today," he said. "The big surprise was that three plants had some production deficiency issues (but) at the end of the day we probably haven't changed our view on the long-term prospects of the business."
Wed 24 Nov, 2004 05:27 am
And the saga continues!
Imagine insisting that further legal action not be allowed if the next instalments are made to the Medical Research and Compensation Foundation! Blackmail. James Hardie is despicable!
Hardie compo fund faces liquidation
November 24, 2004 - 9:34PM
James Hardie's compensation foundation will on Thursday apply for provisional liquidation, saying it would have no choice but to reject a last-minute transfer of money that could have kept it operational.
To accept the funds would mean the foundation would lose the ability to potentially sue James Hardie in the future.
The decision by the Medical Research and Compensation Foundation (MRCF) means some victims of James Hardie asbestos products could face reduced payments, while future victims could miss out altogether.
The MRCF confirmed that it would ask the NSW Supreme Court to appoint a provisional liquidator, with a hearing set down for Thursday of next week.
That's despite a last-minute transfer of $31.5 million to the MRCF, with another $57 million to come next Tuesday - enough money to allow the foundation to pay claims for up to two years.
James Hardie had placed the money into a former subsidiary company known as ABN 60 in early 2001 - designed to be released in small increments over the coming decades - but earlier this month it said it had arranged to unlock the money.
ABN 60 director Don Cameron said the money had been unlocked, with the first instalment of $31.5 million electronically dropped into the MRCF's bank account.
However he said that the money remained attached to the original conditions under which it had been put aside in 2001 - including that the MRCF would not sue James Hardie or ABN 60.
ABN 60's Mr Cameron said he was amazed and dismayed that the MRCF would reject the money.
"I don't know what games they are playing," Mr Cameron said.
"If they start sending money back, whose interests are they looking after?
"Our main interest is getting this money across to make sure they can continue to pay claims."
He said he expected asbestos victims would be "up in arms" about the MRCF's decision.
Despite the impending funding crisis for the MRCF, all legitimate victims so far have received full compensation payouts.
In theory, the MRCF has enough funds to last until April before they run out completely, if payouts are made at the current rate of about $5 million a month.
However the MRCF's dilemma is that it faces legal problems if it simply allows its funds to run down to zero without some kind of court protection.
Once its funds run out, the MRCF will be faced with a shortfall of well over $1 billion.
That longer-term situation is currently the subject of negotiations between James Hardie and the ACTU.
Last Update: Thursday, November 25, 2004. 11:01am (AEDT)/ABC online news
James Hardie compo fund to begin wind-up
The company set up to distribute compensation to asbestos victims will this morning start the first moves towards winding up its operations.
The under-funded Medical Research and Compensation Foundation says its unable to accept conditions attached to money still owed to it from a shell company left in Australia by James Hardie.
James Hardie last night transferred $31 million to the fund's accounts.
However, the foundation's managing director, Dennis Cooper, says the money can not be accepted.
"By accepting this particular amount of money we would forego our cause of legal action against the James Hardie entities," he said.
"Our current position is that unless there's some variation in the terms beyond that which we're aware of at our board meeting yesterday, that money will be sent back."
Without the money the foundation has only enough funds to pay out notified claims until April next year, despite a potential bill of $1.5 billion.
The liquidation application for the fund will be heard on December 2, unless there is an an intervening offer of further funding.
Documents are due to be filed in the Supreme Court today.
The December hearing was to hear an application for retrospective indemnity for directors, who have authorised paying victims full compensation despite knowing that funds are running out.
They have now resolved to wind up the fund unless James Hardie offers enough money or it signs the preliminary agreement on long-term compensation funding with unions.
Both James Hardie and the unions say that is not likely until Christmas.
One frustrated negotiator has questioned which Christmas that might be.
New South Wales Premier Bob Carr says victims could lose the right to claim compensation, if a provisional liquidator is appointed to the foundation.
Victims with current claims also might not receive full compensation.
Mr Cooper says provisional liquidation is the only responsible option, even though he concedes it may mean future claimants no longer receive 100 cents in the dollar.
"The very difficult decision that requires to be made is that you've got victims today and you've got victims tomorrow," he said.
"The issue of should one preference today's versus tomorrow's victims - it's a vexed question and it's a question that the provisional liquidator will have to resolve."
Mr Carr says it is time for James Hardie to stop hiding behind corporate and legal structures to protect itself from asbestos liabilities.
"The practical effect is that people diagnosed today or tomorrow with mesothelioma won't be able - even after they win their case before the Dust Diseases Tribunal - to get a cent in the compensation they need to hold their lives and their families together," Mr Carr said.
"That's why James Hardie needs finally to resolve this."
Sat 4 Dec, 2004 02:59 am
Wed 8 Dec, 2004 06:59 pm
Hardie in sight of $2billion deal
December 09, 2004/the Australian
THE long-running saga over James Hardie's failure to provide for thousands of future asbestos disease victims could soon be over, after the company and the ACTU made major concessions in critical negotiations.
The parties have agreed to the basic structure of what will be the largest financial settlement in Australian history, in which Hardie will meet up to $2billion in asbestos disease claims over 50 years or more.
In a major breakthrough, ACTU secretary Greg Combet is understood to have agreed to the principle of a cap on how much of Hardie's annual cash flow will go towards meeting claims.
One source close to the negotiations suggested the ACTU was seeking a cap of at least 30 per cent, but another said no figure had been specifically put to the company. A source close to the company would not specify a figure, but said Hardie was prepared to accept a "substantial and meaningful" cap.
It is also understood the company is prepared to put up to $200million into a "buffer" fund to ensure there will be money to meet claims for two to three years, even if Hardie makes no profit during that period. The ACTU is understood to be seeking at least $280 million to cover four years at a minimum.
Some of this buffer could be met by the existing fund, the Medical Research and Compensation Foundation, which has about $140million in assets, against current claims of about $85million.
Claims against the MRCF are running at about $70million a year, and Hardie expects to make a profit in the year to March of about $180million.
Hardie and the ACTU have agreed that each year an actuarial projection would be made of likely claims that year, and the company would pay a portion of its profits to maintain the agreed buffer in the fund.
The parties have also agreed that Hardie's Dutch parent company, JHINV, would be legally liable to make the payments.
Mr Combet knows that for the international building products company's financiers and shareholders to approve the deal, it must be commercially viable. He has also said publicly that without adequate profits, the company will be unable to grow and meet future claims.
He may, however, have to convince some sections of his constituency of unions and asbestos disease groups about the cap.
On its own it would mean that if Hardie, which now has its business concentrated in the US, encounters a sustained financial downturn, and claims blow out, not all future claimants would be paid in full. But Mr Combet will try to negotiate a high cap, a big initial "buffer", and other mechanisms to provide the greatest chance of all claims being met.
"Provided the overall funding package ensures to the best of our abilities that we can be confident that anyone who gets an asbestos disease from a Hardie product in the future will be compensated, then we are willing to consider a cap on the annual payment," Mr Combet told The Australian yesterday.
On the company's side, Hardie has abandoned its earlier attempt to cap claim payouts to the victims of the asbestos products it manufactured until 1987.
It has also agreed to accept the outcome of a NSW government review of how to reduce legal costs in processing claims through the Dust Diseases Tribunal, the NSW specialist court that deals with asbestos disease cases.
That removes a major barrier in talks, with Hardie having earlier insisted on a scheme that would involve potential penalties if plaintiffs did not accept an offer from an assessor and went to court.
"Hardie has dropped its obsession with seeking changes to the asbestos compensation system, which is now a matter for the Government on our recommendation," Mr Combet said.
The parties have yet to agree on the two most critical and market-sensitive quantums: the amount the company would put into the buffer fund, and the percentage figure for the cap.
However, the parties are engaged in intensive negotiations, aimed at reaching a basic agreement as early as next week.
Fri 10 Dec, 2004 06:16 am
Fri 10 Dec, 2004 06:16 am
Tue 21 Dec, 2004 01:50 am
Can it really be over?
Last Update: Tuesday, December 21, 2004. 6:01pm (AEDT)
Hardie agrees to 40-year compensation deal
James Hardie has signed a deal detailing how its intends to compensate asbestos victims for at least the next 40 years.
The initial deal, which has been finalised today after consultation with the New South Wales Government and victims' representatives, provides the framework for a legally binding commitment.
The legally binding agreement is due to be completed by March.
Under the agreement, James Hardie will make annual payments to a special purpose fund, which are capped at 35 per cent of the company's net operating cash flow.
The deal is conditional on the New South Wales Government implementing its review of legal costs, and James Hardie's shareholder and banker agreement.
Acting New South Wales Premier Andrew Refshauge says the deal is about justice and certainty for victims of asbestos.
He says there will be no overall cap on payments from James Hardie, and funds will flow to the special purpose fund by 2005.
"James Hardie will agree to make annual contributions on a long-term basis to a special purpose fund," he said.
"The special purpose fund will compensate all current and future Australian claimants injured by James Hardie's asbestos products."
The Government is now calling for the lifting of bans on James Hardie products.
The James Hardie executive has committed itself to convincing shareholders to support the deal.
Company chairman Meredith Hellicar says it is an affordable and achievable settlement, despite the fact that the number of victims and final costs cannot be estimated.
"At the end of the day we are dealing with compensation for people who are terminally ill," she said.
"We also need to ensure that James Hardie can continue to successfully grow in a competitive and uncertain corporate environment.
"Despite all this complexity and uncertainty, we've come up with an agreement with sufficient safeguards and flexibility to give all parties comfort. It's a great achievement."
Ms Hellicar says she hopes the announcement also convinces the Australian public of the company's commitment to its moral responsibility.
"The agreement today now looks forward to make sure that the mistake that we made in under-funding the foundation is rectified," she said.
Unions and victims groups have hailed the agreement, which is likely to be the biggest personal injury settlement in Australian history, as a major victory.
The chief negotiator on the deal, ACTU secretary Greg Combet, says the union had three objectives:
1. No cap on payments to victims or loss of common law rights.
2. An open-ended commitment to funding compensation.
3. Maintaining the viability of James Hardie.
Mr Combet says all three objectives have been met.
"The ACTU, the victims groups have achieved each of those three goals," Mr Combet said.
"It is the biggest personal injury settlement potentially in Australian history."
One of the negotiators, Asbestos Diseases Foundation vice-president Bernie Banton, says today's victory gives hope for all future asbestos victims.
He has thanked the union movement for all its effort.
"We just can't say thank you enough to people like you that at a grass roots level have just been so supportive," he said.
"I can't walk down the street now without people saying good on you, let's get them. And I'm here to tell you we will be there to get them, thanks so much."
The secretary of the Asbestos Victims Association in South Australia, Terry Miller, has cautiously welcomed today's announcement.
But Mr Miller says he will not be celebrating until the agreement has been finalised.
"James Hardie have numerous times come and said something and then reneged on it or reversed it, but this time it appears to be the right thing," he said.
Shortly after today's announcement, shares in James Hardie surged more than 6 per cent in value on the Australian Stock Exchange, up 40 cents to $6.62.
Tue 21 Dec, 2004 01:55 am
Victory for mass public and union reaction over several continents do you think?????
Tue 21 Dec, 2004 01:56 am
Oh, I so hope so, Deb! And all of this with no help from the Australian prime minister!
Tue 21 Dec, 2004 01:58 am
This is uncanny. I heard the james hardie thing on the 6 o clock news and i thought "msogla won't be impressed" and 1 hour later, here it is.
this is said with humour by the way, so you don't have to abuse me on this post.
Tue 21 Dec, 2004 02:02 am
Ooops i just heard the 7 o clock news and it is a record compensation claim. So you would be happy not unhappy.
Tue 21 Dec, 2004 02:02 am
Abuse you? I don't do that.
Of course I'm happy that Hardie's sick workers are getting some compensation. Why would you thin otherwise?
Tue 21 Dec, 2004 02:03 am
Sorry, happy not unhappy. I didn't listen carefully at 6 o clock.
Tue 21 Dec, 2004 02:03 am
Shortly after today's announcement, shares in James Hardie surged more than 6 per cent in value on the Australian Stock Exchange, up 40 cents to $6.62.
And taking some responsibility is good for business! Fancy that!