Hardie's asbestos pants on fire
James Hardie, formerly Australia's biggest producer of asbestos, defended a scheme to hive-off asbestos liabilities with a press release senior advisers knew was inaccurate, an Inquiry has heard. The building materials giant has taken repeated hits during the Jackson Inquiry, established by the NSW Government after unions refused to drop criticisms of its corporate restructure. Australian Manufacturing Workers' Union (AMWU) NSW Secretary, Paul Bastian, has told anyone prepared to listen that the company engaged in "corporate bastardry" when it restructured in 2001, leaving massive asbestos compensation liabilities on the books of new entity, MRCF (Medical Research and Compensation Foundation), and trading its Australian identify for a new corporate home in the Netherlands. Mr Bastian put that line to senior Government ministers, including Premier Bob Carr. Other unions who blew the whistle on the restructure included the Maritime Union of Australia and the Construction Division of the CFMEU. James Hardie listed Paul Bastian and the AMWU as "major risks" to its strategy in an analysis prepared for executives, the inquiry learned. Few others took much notice, however, until the Australian Financial Review began shedding light on the restructure. The bottom-line of those articles, which unions and asbestos sufferers' groups had been hammering since 2001, was that the $293 million tipped into MRCF would go nowhere near meeting liabilities to sufferers of mesothelioma and other asbestos- related diseases and to their families. Back in 2001, the AMWU claimed James Hardie would fall $1 billion short of meeting its share of the national compensation bill. Hardie-created MRCF now concedes that figure has reached $800 million — and the parent company has refused to bail it out. It was that core issue that brought admissions James Hardie had misled the public in defending its restructure. Company legal adviser, Wayne Attrill, told the Jackson Inquiry that senior Hardie executives knew that a press release that said MRCF would be adequately funded was dodgy. Attrill said he had seen actuarial advice received prior to the restructure. Under cross examination from union lawyer Jack Rush, Attrill said, he had raised his concerns with James Hardie's corporate affairs chief, James Baxter (who has since been headed-hunted by Rupert Murdoch's News Ltd). "I think I'd seen a draft press release and this press release said in very categoric terms that there would be enough funds to meet all claims. I just didn't think that that could possibly be said in such categoric terms and I expressed those views to corporate affairs", Attrill said. Rush: "What did he (Baxter) say?" "He said, 'oh no, we're comfortable with that statement'", Attrill testified. Lawyers for unions, asbestos sufferers and the MRCF alleged James Hardie had misled the public and the NSW Government. They claimed it had kept information from incoming directors of MRCF and the State Government, fearing the latter would stop the restructure going ahead. The Inquiry also heard from a former James Hardie safety officer, Peter Russell, who said he had quit because the company tried to "cover its backside" by refusing to put warnings on products it knew were dangerous. Emails, from as early as December 2000, between Attrill and David Minty, partner in actuarial firm Trowbridge, suggested James Hardie should have been aware it was under-funding MRCF. One headed "Not good news Part IV" alerted Attrill to the fact Trowbridge had posted "gory numbers" about asbestos disease rates on its website — "You should be sitting down and probably heavily sedated before reading it", Minty's email suggested. Attrill forwarded the warning to the company's legal chief Peter Shafron who, by return email, told him the big boss, Peter McDonald, had "hit the roof — wondering how it was that our retained experts could publish something that implicates us so directly without prior notice". Commissioner David Jackson QC warned that he expected allegations of "illegalities" to be put before him in final submissions. Mr Bastian pledged, whether government or corporate watchdogs moved against James Hardie or not, that the AMWU would stay on its case. "James Hardie needs to know the AMWU will not allow it to walk away from its responsibilities to people dying from these diseases, nor the people they leave behind", he said. "We will pursue Peter McDonald and everyone else involved in this to the ends of the earth, if needs be. "We have always said they performed this restructure to sanitise their name and to quarantine themselves from responsibilities to lung diseases sufferers."