Yesterday, shareholders in James Hardie Industries voted in Amsterdam to approve a four billion dollars compensation fund for asbestos victims in Australia. This money will flow regularly over a forty year period and will be distributed by the Asbestos Industries Compensation Fund to those suffering Mesothelioma and other asbestos related diseases caused by the company's products.
It has been a six year battle. Initially victims though James Hardie was about to cut and run when they moved their corporate headquarters from Australia to Amsterdam. Union action threatening a virtual ban on the use of Hardie products in Australia saw a change of heart. The long term future of the fund then depended on shareholder agreement to contribute compensation from profits over an extended period.
It sounds good, but there is a big " if " involved. To maintain the money flow over four decades - and probably longer - James Hardie Industries will need to trade profitably and return a healthy bottom line.
In America, companies which included asbestos in their products were forced into compensation deals and many of these collapsed when the outflow of cash sent those companies into insolvency. It is essential for sufferers here that there is no unofficial ban on the now asbestos free James Hardie products by unions or the building trade.
At least this tragedy delivers a lesson to the business community. The dangers of asbestos were known for decades - and yet James Hardie persisted in using it in their products because it was cheap and gave good product performance. It only ceased using it when legislation banned asbestos.
There are probably other substances used in the market place that are like a bomb with a long fuse. Health complications may not appear until many years down the track - and then once more there will be victims looking for compensation. Manufacturers would do well to stop and think - and have analysis of raw material risks assessed - to avoid the tragedy that overtook James Hardie !
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