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Tuesday, 7 December 2004
Page: 120


Mr MARTIN FERGUSON (10:01 PM) —I simply want to say at the outset in response to the member for O'Connor that the James Hardie (Investigations and Proceedings) Bill 2004 is not about ambulance-chasing, nor is it about ordinary workers and their families seeking some short-term windfall monetary gain. I dealt with James Hardie in a professional capacity as a young trade union official at the very factories now represented by the member for Parramatta. I might also say that, in my dealings with James Hardie as a professional trade union representative, I found them fair in terms of the negotiations and, more importantly, honourable in adhering to the outcome of those negotiations. In the late 1970s and early 1980s it was my own union, the then Federated Miscellaneous Workers Union of Australia, that negotiated some important breakthroughs in minimum financial compensation for those workers and their families who suffered the awful disease of mesothelioma.

All I can say is that there seems to have been a change in corporate culture within James Hardie in the 1990s which leads us to the bill before the House this evening, because it is not about ambulance-chasing—it is not about money—and I simply say that I regard some of the comments by the member for O'Connor in terms of importance of this bill as a reflection on the motives of ordinary Australians and their families. This bill is about corporate governance issues in Australia in the 21st century. It is also about ensuring that mechanisms are in place and perhaps it is a warning to the corporate world in general that this parliament will act to force corporate Australia to actually accept responsibility for its actions to ensure that everyday Australians are protected from the damage done by large, faceless organisations.

The actions of James Hardie are well known, well recorded and well reported in the media. In an attempt to absolve itself from financial responsibility for the pain and suffering that would result from its products, James Hardie—and let's be frank about it—deliberately engaged in a complex corporate restructure, separating subsidiary companies with liabilities and transferring assets offshore to a Dutch-registered legal entity. In essence, James Hardie brought the parliament to this evening's debate by its own actions. This parliament did not go out of its way looking to act against James Hardie; James Hardie invited the Commonwealth Parliament of Australia to react in response to actions taken by its company and, more importantly, its board of directors.

At the same time, James Hardie established and underfunded a medical research foundation, ostensibly to deal with the claims by innocent victims—and they are innocent. These victims are innocent, and we cannot hide from that fact. We have to front up to our responsibilities to protect ordinary innocent people, because that is why we are elected to this parliament. These innocent victims suffered asbestos related diseases, and I simply say it is an awful death. I have dealt with it because my father actually suffered from it and it contributed to his death, so I know all about the impact of asbestosis. It is about time we accepted our corporate responsibility on both sides of the parliament to bring companies such as James Hardie to heel. They stand condemned for their own actions. In that context, let us talk about its performance on the financial front. It has become clear that this foundation was underfunded to the tune of $1.5 billion.


Mr Tuckey —I think it'd be more like five.


The DEPUTY SPEAKER (Mr Wilkie)—Order! If the member for O'Connor continues to interject, he will be dealt with.


Mr MARTIN FERGUSON —Rather than facing up to its corporate responsibilities, what did James Hardie do? What did it do which prompted the actions of the Commonwealth parliament this evening? It moved offshore, leaving only $293 million to fund estimated compensation costs of some $2.3 billion.



The DEPUTY SPEAKER —Order! The member for O'Connor is warned.


Mr MARTIN FERGUSON —Such an abrogation of corporate responsibility, so far as this parliament is concerned—with a few exceptions such as the member for O'Connor—is unacceptable to ordinary Australian citizens in the 21st century. The James Hardie company made good profits out of its activities for over 80 years. The industry was highly profitable, and the wages and conditions paid to the workers were generally amongst the best in the manufacturing industry in Australia. We also cannot escape the fact that it knew that it was producing and selling potentially deadly products. That goes to the heart of corporate responsibility: it knew it was producing and selling potentially deadly products. One has to accept one's responsibilities in life.

As we now know, those products cause mesothelioma, an insidious form of cancer which has no cure and often kills victims within 12 months of diagnosis. Mesothelioma has already killed some 7,500 Australians since 1945. I can recall my father telling me stories about working in asbestos factories. There was no warning; you were jumping around in bins of asbestos as if you were jumping into a long jump pit on a sporting field. That was the nature of working in those factories for workers seeking a new start in life after returning home after the Second World War and the fight against fascism. We are now expected by the member for O'Connor to accept that we should not hold James Hardie and other companies accountable for the actions that they knowingly pursued when they now want to escape by going offshore and walking away from their responsibilities to ordinary workers.

It is interesting to note that the number of deaths is expected to rise to some 18,000 by 2020. More than 500 people contract the disease each year. The peak of its incidence is not expected to hit Australia until around 2010; it is still ahead of us as a nation. In addition, incidences of other asbestos related cancers are estimated to be at around 30,000 to 40,000 by the same time. Worse still, Australia had the highest use of asbestos per capita in the world from the 1950s until the 1970s. One must also appreciate that, because of the desire of state governments to actually house the less privileged in the Australian community, throughout the fifties, sixties and seventies often the housing commission homes built to assist those people were built out of asbestos because it was a cheap product. If we did anything wrong it was in the 1970s, when we got carried away with removing asbestos when it was unwarranted. Properly treated and maintained, it is safer to leave asbestos in situ rather than risk the health of workers by engaging them in the removal of asbestos when it is unnecessary. That was the lesson we learnt from the 1970s.

We have also learnt throughout history—as the member for O'Connor raised in terms of road and pedestrian accidents, the problems with smoking or, in this case, the problem with asbestos related products—that it is our responsibility as a responsible, forward looking nation to take every precautionary action possible to reduce deaths, be they on the road, at work or in any other place. I simply say that one must accept that, for that reason, prior to 1982 approximately one-third of domestic dwellings built in Australia contained asbestos. Until the mid-1980s, James Hardie was the largest Australian manufacturer of products containing asbestos, most notably asbestos sheeting and fibro. It also knew the problems, because during that period it invested considerable amounts of its profits into research and development in order to develop an alternative product. It succeeded—that is why it is still in business today. One of the most difficult tasks it had was to develop an alternative to the high pressure pipe. It came up with a product called Hobas. So it knew the problem and it knew it had to find an alternative building product in Australia to take itself forward. I do not accept any suggestion that James Hardie is being hard done by by the Commonwealth parliament in this debate.

I also point out to the House that it is now known that the company knew about the dangers from at least the 1930s yet took no action and placed no warnings on its products until—when?—1978. That is about the time some of the first agreements were negotiated for minimum legal settlements for asbestos related diseases by my own union, the Federated Miscellaneous Workers Union, led by the then general secretary, Ray Gietzelt. It is not surprising, therefore, to hear that, as I have already pointed out this evening, Australia has the highest per capita incidence of mesothelioma in the world. While not being the only company involved—there have been others in the game faced with asbestos related claims—James Hardie has been a major player in the industry. In 2002, over 50 per cent of the claims made to the New South Wales Dust Diseases Tribunal were, interestingly, against the James Hardie group.

I therefore say, in the context of the debate in which the Howard government is hell bent on destroying the Australian trade union movement, that we must give respect where respect is due. It is simply through the perseverance and determination of the union movement in Australia that the Howard government—the Commonwealth government of Australia—has finally been forced to act to bring James Hardie to account and to bring James Hardie to heel. The union movement, led by Greg Combet, the Secretary of the ACTU, is currently involved in a complex round of negotiations with James Hardie management to ensure that the company accepts its responsibilities. This bill is about assisting the workers, their families, the Australian trade union movement and those decent representatives of corporate Australia in sending a message to rogue companies such as James Hardie that in Australia there are certain levels of accepted practice to do with the responsibilities of the corporate world which we as a civilised community accept.

In terms of the ACTU, all it is doing is acting on behalf of its claimants. It is doing its job. It is not seeking to chase ambulances. It is not seeking to manipulate the legal system to get money where money is not warranted. It is seeking to drive negotiations with James Hardie to ensure that the foundation it established provides additional funds for current and future victims. It is as simple as that. I do not regard that as outrageous, as suggested by the member for O'Connor. I regard it as something that we all in the Australian community ought to support and, in doing so, send a message to corporate Australia that that is what we as a nation expect.

We represent workers who are well respected internationally for doing a hard day's work for a fair day's pay. But all Australian workers rightfully expect that when they go to work they have a right to go home that evening without being maimed, injured or killed at work. That is what the debate is about. It is about ensuring that workers are protected in all respects and, also, when there is a fatality, it is about ensuring that the families who suffer that—and they often suffer huge financial difficulties—are protected through the Commonwealth parliament accepting its responsibilities.

The Howard government has acted, but we should not lose sight of the fact that it did sit on its hands. It did let thousands of workers suffer while the company was let off from its obligation to offer compensation for their injuries. The company's bottom line was more important than the lives of its victims, in the minds of some representatives of the Howard government initially. But let us give credit where credit is due. The hand of the Howard government has finally been forced.

This bill will enhance the ability of the Australian Securities and Investments Commission or the Director of Public Prosecutions to undertake investigations and take proceedings against the corporate bodies that make up the James Hardie group. This action will also extend to officers, employees or advisors of the James Hardie group. This legislation will also remove any uncertainty as to whether ASIC's powers to require the provision of materials can be obstructed by a claim of legal privilege. While the opposition supports the passage of this legislation, as the member for Banks indicated, it is also clear that we have a very strong view that the government should have acted sooner rather than later.

Criticism must also be levelled at the government this evening for not taking the legislation potentially far enough. Following its own commission of inquiry into the James Hardie affair, the New South Wales government announced legislation aimed at allowing asbestos victims to take legal action against related corporations, including the Dutch-registered entity. However, there unfortunately remains a lack of clarity about the enforcement of any judgments against the Dutch based Hardie entity in the absence of any international treaty with the Netherlands. I remind the government this evening that we believe that it needs to urgently enter into such a treaty to remove this difficulty beyond any doubt and to ensure that we provide the necessary access to justice.

The government must also explain to the Australian people why it has not adequately funded ASIC to undertake a full investigation into the actions of James Hardie. While the Treasurer has made vague statements about further funds being made available, I believe that lack of clarity has hampered ASIC's ability to instigate a thorough investigation into what is clearly one of Australia's most serious breaches of corporate responsibility. Corporate responsibility and governance are issues which deserve far more attention by this parliament. James Hardie is one case in point. The James Hardie legislation must send a message to all companies operating in Australia that this parliament will act in the future if companies do not do the right thing by Australia in terms of its national best interests.

There are a range of other matters that I could touch on but, given the late hour, I simply want to say that James Hardie forced the hand of the Commonwealth parliament. The Commonwealth parliament did not go looking for this dispute. The actions of James Hardie, in seeking to run away from its responsibilities, eventually forced the Howard government to actually embrace the necessity to bring the James Hardie (Investigations and Proceedings) Bill 2004 before the parliament. The bill is properly based in terms of guaranteeing that workers and their families are looked after. I simply reject the proposition by the member for O'Connor this evening that the bill before the House is about ambulance-chasing and that workers and their families are seeking to make a short-term windfall monetary gain. I also say to those workers and their families that I apologise on the behalf of the parliament for the inflammatory and vulgar comments made by the member for O'Connor in his contribution concerning this bill. They were unnecessary and reflect his own ignorance rather than the desire of this House to do the right thing by the workers and their families. I commend the bill to the House.