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Thursday, 9 December 2004
Page: 38


Senator NETTLE (11:54 AM) —Last week was the 20th anniversary of the Bhopal disaster and it is often described as the worst industrial accident in history. It was a corporate crime of enormous magnitude, and a crime that continues with Union Carbide and its parent company, Dow Chemicals, attempting to avoid their liability for the victims of Bhopal.

The James Hardie (Investigations and Proceedings) Bill 2004 seeks to address another terrible corporate crime that has affected thousands of Australians and will continue to affect many more into the future. Unlike the Bhopal disaster, James Hardie's negligence did not happen in one day. It is a creeping, silent crime that has affected workers and their families across the country. It is a crime that has continued over decades. The Greens support this bill because it will allow ASIC and the DPP access to materials obtained by the New South Wales commission of inquiry that would otherwise be subject to legal professional privilege, and then to use those documents to investigate whether James Hardie breached the Corporations Act. Any action that can be taken to ensure that James Hardie is brought to justice will be supported by the Greens. The fact that this legislation is necessary reflects the extraordinary actions that James Hardie and its executive and directors have gone to to avoid liability for the death and suffering that the company has caused.

Australia has the highest per capita incidence of mesothelioma in the world. According to Australia's leading asbestos disease experts, there were 7,515 reported incidents of mesothelioma in Australia to June 2003. In my home state of New South Wales alone, the number of reported cases in 2001 was 2,365—37.2 per cent of all reported cases at that time. That is expected to grow to 6,696 cases of mesothelioma just in New South Wales by 2020. The first case of mesothelioma was reported in Australia in 1962, and the incidence of mesothelioma has been increasing since that time. It is now contracted by more than 500 Australians per year. The incidence is not expected to peak until 2010, reflecting the widespread use of asbestos in the early 1970s. The incidence of mesothelioma is then expected to continue until at least 2020.

The time from first exposure to the onset of mesothelioma averages about 37 years. Figures suggest that for each diagnosed case of mesothelioma there are two additional cases of asbestos related lung cancer and non-malignant asbestos related disease. By 2020 about 18,000 Australians are expected to die as a result of mesothelioma. There is no cure. It is a slow and horrible death. With asbestos related lung cancer estimated to occur at a ratio of two to one to mesothelioma, the number of asbestos related cancers can be expected to be in the order of 30,000 to 40,000 Australians by the year 2020.

Asbestos is the cause of this death and misery, and James Hardie was Australia's largest manufacturer of products containing asbestos. Australia had the highest per capita use of asbestos in the world between the 1950s and the 1970s. About every third home constructed in Australia before 1982 is thought to contain asbestos, usually in the form of asbestos cement sheeting, commonly known as fibro. Asbestos was used in fibro until about the mid-1980s. Products containing asbestos were manufactured by Hardie throughout the 20th century until the mid-1980s—things such as insulation products, fibro, pipes and friction materials, particularly brakes and clutch linings. Hardie dominated the market, particularly in fibro, throughout this period. In South Australia and Western Australia, Hardie was effectively the only commercial supplier of fibro. There is evidence that James Hardie knew the dangers of asbestos from at least the 1930s. James Hardie employees brought concerns to the company about the dangers of asbestos both to employees and product users from at least the 1950s. No warnings or directions were placed on Hardie's fibro until 1978. No general warning regarding the danger of asbestos has ever been given by the company to the community. Asbestos was finally banned in Australian workplaces in just January of this year.

It is clear from evidence and the conclusions of the New South Wales special commission of inquiry into James Hardie that the company systematically set out to avoid liability for the claims by victims affected by asbestos related diseases. From about 1995 James Hardie began a process of separating the main assets of the company from the asbestos-producing subsidiaries as part of a strategy to avoid its liabilities. In February 2001 James Hardie established the Medical Research and Compensation Fund, with $293 million in assets, including the remaining assets of James Hardie asbestos-producing subsidiaries. Immediately prior to their separation from the Hardie Group, these subsidiaries indemnified their former parent company for any asbestos liabilities and agreed not to sue in relation to the asset stripping that had previously taken place.

In October 2001 James Hardie gained New South Wales Supreme Court approval for a scheme of arrangement which established a new Netherlands based parent company, James Hardie Industries NV. An amount of $1.9 billion was transferred from the Australia based James Hardie companies into this new entity. James Hardie's solicitors assured the Supreme Court that Australian asbestos victims would suffer no prejudice as a result of these arrangements as the James Hardie entities that remained in Australia would be able to call on up to $1.9 billion from the Netherlands based James Hardie Industries NV to meet the claims of future creditors, including asbestos victims. The Netherlands is a country with which Australia does not have a treaty to enforce a civil judgment obtained in Australia.

In March 2003 the lifeline for asbestos victims was cut when the Netherlands based James Hardie Industries NV unilaterally cancelled the partly paid shares worth $1.9 billion. The Australian based James Hardie entities with liability for asbestos claims also indemnified the Netherlands parent company, James Hardie Industries NV, against any claims arising from or connected with past asbestos liabilities.

Despite the assurances given to the New South Wales Supreme Court in 2001, Hardie did not alert the court, the New South Wales government or the Australian Stock Exchange to the fact that Australian James Hardie entities would no longer be able to call on the $1.9 billion from James Hardie Industries NV to meet asbestos claims. As a result of that, the funds available to the Medical Research and Compensation Fund to compensate James Hardie asbestos victims will last for only a further three to four years. This will leave a significant shortfall, given that claims are expected for at least the next 15 years and that compensation owing to Australian asbestos victims of James Hardie has been estimated to reach almost $2 billion.

The actions of James Hardie in this matter, if successful, will have the effect of preventing Australian victims of its asbestos products from successfully prosecuting claims against the assets of the company responsible for their illness. The company has sought to avoid responsibility by its corporate legal manoeuvres and money shifting. Hopefully, justice is catching up with James Hardie and, hopefully, this legislation will help deliver that justice to the victims. That is why the Greens are supporting it.

It is important, however, to remember how we got to this point and why the government has decided finally to act to introduce this legislation. The victims of James Hardie have been campaigning for justice—supported by the trade union movement and community activists, including the Greens—for many years. It is only this unflagging campaign that has created the pressure on the government to take some action and to introduce this bill, which will go some way to holding James Hardie accountable.

By allowing the corporate veil on James Hardie's activities to be lifted and examined by ASIC and the DPP, one part of the action that needs to be taken against James Hardie will be made easier. But let us be clear: the government could and should be doing much more to assist the victims of James Hardie. For a start the government should be negotiating a treaty with the Netherlands, which would facilitate access to the bulk of James Hardie's assets, by allowing Australian civil judgments to be enforced in the Netherlands. When the government were questioned by the Greens on this matter, they claimed that the Dutch government was unwilling to negotiate such a treaty. But, when asked by the victims of James Hardie in meetings with officials in Amsterdam, the Dutch government said they had never been approached by the Australian government.

The government at the very least should seek to reach a special arrangement with the Dutch government to ensure that the assets of the company are available to the victims of James Hardie's asbestos. Or the government could move an amendment to relevant Commonwealth legislation, retrospectively in the case of James Hardie, to ensure that holding companies are liable to the victims of their subsidiaries in the case of injury or death and that a corporate group can be treated as a single entity for the purpose of enforcing a judgment. This is what victims of James Hardie have called for and it is supported by the ACTU. I hope that the Senate will support such legislation. The Greens certainly will.

We welcome recent indications that public pressure leading to negotiations between the ACTU and the company are achieving progress. However, there are no absolute guarantees from that process. The government can and should be doing more than implementing this legislation. The government are always extremely slow to take action against their corporate friends, even when they are responsible for corporate crimes. They are, however, happy to receive donations from the big end of town.

Let us not forget that the Liberal Party, the National Party, Labor and the Democrats, until very recently, continued to receive corporate political donations from James Hardie. According to AEC figures over the last five years, James Hardie have given as much as $750,000 in political donations to Australian political parties. Since James Hardie shielded their assets in the Netherlands, they have given the Liberal Party $71,000, the Labor Party $75,000, the National Party $15,000 and the Democrats $15,000—a total of $176,000.


Senator Stephens —We sent ours back!


Senator NETTLE —I shall go on. Earlier this year I moved a motion in the Senate calling on all political parties which had received donations from James Hardie to transfer that cash into a trust fund for the victims and their families. It was only because of the campaign in support of victims' groups that the Labor Party decided to put $78,000 that it had received into a trust fund. The Prime Minister and the Democrats said that they would await the outcome of the New South Wales commission of inquiry before handing over the money.

The Greens have been active all year in support of the victims of James Hardie. Both I and the former member for Cunningham, Greens MP Michael Organ, moved motions urging the Howard government to boycott James Hardie products and services until victims were compensated. The motion was passed by the Senate. Michael Organ also met the Dutch ambassador and presented him with a letter, signed by 90 Dutch-Australian members of the Greens, demanding justice for the victims. The Greens have worked with the Dutch Socialist Party towards an Australia-Netherlands treaty on court compensation orders that would help to make James Hardie pay.

Greens MLCs in the New South Wales parliament have called for the state government to boycott James Hardie products and they have moved a motion condemning the inadequate statutory compensation scheme proposed by James Hardie. Greens councillors across New South Wales have secured boycotts of James Hardie products by their local councils. The Greens have supported and participated in actions, meetings and protests across the country organised by the labour movement and the victims of James Hardie.

So, while we welcome this legislation, it is the very least that the government could do—and it has only come about as a result of the actions of the community and trade unions supporting James Hardie's victims. However, we should not be fooled into believing that, because of this legislation or because of any other stunt that the government chooses to pull, this Prime Minister is committed to supporting Australian workers. The opposite is true. The government's industrial relations agenda is undermining unions and collective organising in the workplace. Unions and collective organising are the single best protection for the health and safety of workers. Without unions and collective organising we will have more cases like James Hardie. We will have more companies endangering the lives of workers while they continue to operate unsafe industries and improve their profit margins along the way. James Hardie is hiding in the Netherlands while Australian asbestos victims wait for justice. The Greens will back the passage of this bill, but we call on the government to do much more. We call on the government to take serious action that will deliver the victims of James Hardie the justice that they deserve.