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Tuesday, 7 December 2004
Page: 106

Mr BAIRD (8:54 PM) —On this occasion, in the debate on the James Hardie (Investigations and Proceedings) Bill 2004, it is interesting to find that I agree with everything that I have heard the member for Lilley say. This is a matter of justice; it is a matter of the way that the James Hardie board treated the employees of the organisation. It is a national disgrace. I personally know the chairman, Meredith Hellicar, who replaced me in a job that I had at Esso. I find her to be a person of integrity, but obviously the challenge for her is the response of the company to this situation. I would like to see the company doing more. I would like to see that in her role she would be much more amenable— (Quorum formed)

I am surprised at that call for a quorum to be formed. Both sides of the House agree on this particular bill. Why do we waste our time with these political frolics when we have the health and welfare of the former employees of James Hardie to consider? In reality, if you were serious about the welfare of the workers of James Hardie, why would you put on this political stunt right now? There was no objection to what was said by the member for Lilley. The member for Parramatta came in and the member for Lilley drew attention to the great work that she has done. That is terrific. But why would you put on this political frolic now of saying that a quorum needed to be formed? The situation is no different from what applies for much of the time. If we are going to be constructive in this House, let us stop the political frolics and get on with the real business. Let us start addressing the real issues that affect the workers of James Hardie. That is what we are here for; that is what this bill is about. In fact, I find it totally objectionable that the member for Shortland can come in and display this total political hypocrisy when we agree on this matter. So let us return to what we are about.

The reality is that thousands of hardworking Australians will be diagnosed with asbestos related illnesses over the next decade. This will add to the list of thousands of Australians who are already cast down, unable to breathe, let alone function in society, as a result of asbestos related diseases. It is now generally accepted that more than half of asbestos related disease sufferers are dead within eight months of diagnosis. That is why we are concerned.

The fact is that many people as they operated in the sixties and seventies were not aware of the implication of asbestosis and the result that it would have on their health. There are many people around today whose health is in serious jeopardy and whose mortality is threatened as a result of exposure to asbestos. This legislation refers to the compensation which is due to the sufferers of asbestosis. As a result of some international conniving, James Hardie, as we know, separated out the company that was responsible for the compensation of the organisation so that they would not hold the responsibility and could continue to operate. This will go down in the annals of Australian corporate history as one of the prime examples of what appropriate corporate governance is not about.

In the 1970s when I was in MBA school we talked about appropriate standards of ethical behaviour for corporations. Now—and going back to the year 2000, and before that—we have seen a prime example of a corporation which does not meet its obligations in terms of ethical behaviour or in terms of its responsibility to employees. With this legislation, which was brought forward by the Treasurer, we have a provision that bypasses the legal protection that the company has and enables it to provide all the details of the legal aspects of its dealings with other companies, with its shareholders and with its employees so that an adequate review can be established of its responsibility before the law. What is involved is quite straightforward and quite simple, so that James Hardie is both financially and morally accountable for the damage it consciously caused to thousands of Australian families. On this very night there are many people around Australia with asbestos related illnesses as a result of their exposure to asbestos as a result of the actions, whether on a known basis or an unknown basis, of James Hardie.

Looking at the corporate history, an awareness of the relationship between asbestosis and exposure to asbestos occurred in the seventies. If we trace through the responsibility of the organisation, it begins at that point—it begins with the corporate responsibility of the boards over that time. The separation out of the organisation, when they moved to establish the company offshore, is what I find morally reprehensible—that they have done it with the express understanding that they would minimise their corporate exposure at the cost of the very livelihood of Australian families, Australians who are suffering because of their exposure to asbestos. The reality is that in most cases the employees of James Hardie were totally unaware of the implications, but we all know now. There was a clear and clinical understanding of what they were doing in moving the company offshore to separate out the organisation from this corporate responsibility.

This bill will help to remove legal limitations that currently exist relating to legal professional privilege. These limitations currently inhibit a comprehensive investigation of the liability of the James Hardie group for the damage to the health of past employees. The changes under the bill will also facilitate the further investigation of matters arising from the James Hardie special commission of inquiry conducted in New South Wales by David Jackson QC, as well as future legal proceedings stemming from the investigation.

The Jackson report specifically highlighted claims of improper conduct by several of James Hardie's officers and their former actuaries, Trowbridge Deloitte, in presenting false and misleading information under section 52 of the Trade Practices Act during the James Hardie group restructure in the period 2001-03. Under scrutiny are claims by the James Hardie group and Trowbridge Deloitte regarding the funding arrangements in place for the Medical Research and Compensation Foundation. The fund was created by the group to meet the claims of victims of asbestos related disease caused by the negligent practice of James Hardie. Specifically in question are claims that the funds provided by James Hardie to a value of $293 million were adequate for current and likely future claims by former employees of the organisation and its subsidiaries with asbestos related diseases.

It is now estimated that a further funding outlay of between $1.5 billion and $2 billion will be necessary to meet the first round of compensation, with a further substantial outlay necessary in the near future as the predicted second and third rounds of those affected by asbestos related disease come to light. The bill will specifically enable the recovery of funds for the compensation of employees who were consciously subjected to conditions that resulted in incurable damage to their health directly from the very organisations that most benefited from the conscious sacrifice of their employees' health and now seek to continue to profit from it.

Firstly, this bill facilitates future investigation and prosecution of James Hardie. In order to ensure the obligations of James Hardie and related organisations to sufferers of asbestos related diseases are fulfilled, it will be essential that investigations of James Hardie be uninhibited as regards access to documentation and legal privilege. The investigation to be conducted by ASIC, as well as subsequent proceedings brought forward by ASIC or the Director of Public Prosecutions, must be able to access to all the documentation available to the Jackson inquiry and supporting its findings. The most important aspect is access to all documentation. No legal privilege will be enabled by this bill.

Secondly, this bill specifically abrogates the obligation of legal professional privilege that exists for the application and acquisition of certain materials, allowing their use in the investigation of James Hardie and any related proceedings. The bill specifically covers the weaknesses and shortcomings of the legislation rushed through the New South Wales parliament related to the Jackson report.

Finally, the type of documentation included in the reference in this bill to legal professional privilege specifically includes that documentation which relates to exchanges between the clients—in this case, James Hardie—and their legal representatives. The importance of the removal of these privileges is by no means taken lightly by the government but is seen as being in the overall best interests of the people, the sufferers, in Australia. It is vital to recognise those interests.

There is also a need to have confidence in Corporations Law. Despite the fact that we want Australian corporations to operate on an effective basis and be subject to the normal legal requirements which allow them to protect themselves as organisations, in this particular case, where we have undoubtedly the worst case of corporate misgovernance to the detriment of thousands of Australians and their health, we need real action. We need the accountability and responsibility that this Treasurer and this government have taken.

I am certainly pleased that the member for Lilley on behalf of the opposition has indicated the support of the opposition for this bill. We need to make a combined impact on the corporation so it recognises that the federal government and state governments around Australia are very serious about ensuring that the corporation meets its legal obligations. It is a great tragedy that the people who were exposed to asbestos are in this situation. No-one knew about it at the time. They bear the consequence on behalf of their organisation.

In conclusion, we collectively express our great concern at the actions James Hardie have taken. We recognise that they are making attempts to restore confidence in the organisation. The company have had a strong and effective past and they are a great producer of products sold in the Australian marketplace. But this is about corporate morality and integrity. If they were serious they would have acted long ago and we would not have had this split in the organisation. It is appropriate that they be exposed to the full weight of investigation by ASIC and that all of the documentation be available for the investigators to review so as to determine the appropriate compensation for those people who have so unfairly contracted asbestosis and related diseases. These are very serious diseases that clearly result in death in most cases. On our side of the House we are very pleased with this legislation that the Treasurer has introduced. We are pleased that the opposition is joining us in supporting it.