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- 20 October 2004
Special Commission of Inquiry (James Hardie Records) Bill
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Page: 11660
Second Reading
Debate resumed from an earlier hour.
Ms SYLVIA HALE [5.47 p.m.]: As I said earlier, I congratulate Ashfield Municipal Council on its initiative to develop a policy that will require the submission of an asbestos clearance certificate. The current preoccupation with renovating and extending houses leaves many residents exposed to the dangers of asbestos. Fortunately, many more people are aware today of the hazards of handling asbestos, but large numbers still do not equate fibro sheeting with asbestos, and they are either oblivious to or ignorant of safe procedures for handling or removing it. Particularly vulnerable are builders labourers and other unskilled workers whose knowledge of English is poor, many of whom will be employed on building sites as handymen or casual labourers. They are especially likely not to know the dangers posed by asbestos or the measures to take to protect themselves.
Equally at risk are home renovators, do-it-yourself homeowners who may not recognise asbestos when they encounter it or who, because of an insufficient appreciation of the risks, believe they can interfere with or dispose of the material in ways that will damage them or their families. Therefore, the move by Ashfield Municipal Council is all the more welcome. Ashfield has taken the lead in this State in adopting a policy that will require submission of an asbestos clearance certificate as a condition for approval of alterations to an existing building. Although I have some reservations as to whether the policy goes far enough, the motion instituting the policy is sufficiently important for it to be outlined in detail. The motion reads:
1. That Council institute a policy that a condition of consent of any development application for alterations to an existing building will be that the applicant submit to the certifying authority an Asbestos Clearance Certification ("ACC").
2. An ACC is defined as a certificate provided by an accredited specialist in the field of asbestos identification and removal and shall take one of three forms: It shall state that:
(a) the property in question has no asbestos that is discoverable by thorough visual inspections;
(b) that there is asbestos capable of identification by thorough visual inspection but that the asbestos is not in a form which is currently dangerous. In the event that such a certificate is issued, the certificate shall include a diagram indicating where the asbestos is and give some opinion as to the circumstances or the time period over which asbestos may cease to be safe;
(c) that the asbestos located in the property is presently dangerous and is in need of immediate removal.
3. That Council establish a publicly accessible register of all properties within the area by reference to ACCs which have been submitted to the Council pursuant to the above policy. That access to the register be given to members of the public on the basis of a fee to be decided by the General Manager;
4. Ashfield Municipal Council seeks an urgent meeting with the Special Minister of State to argue for changes to the Local Government Act which would facilitate Councils who wish to deal with the safe removal of asbestos products from properties within their municipalities.
5. That the officers prepare a report to be submitted to the Council with the exact wording of the policy as defined above including information on costing, certification requirements, and any other information which the officers feel is necessary to make the above policy workable.
It is my hope, and that of Greens councillors on the Ashfield council and elsewhere, that other councils will follow Ashfield council's lead and institute similar policies. After all, at least 13 councils throughout the State have already determined that they will not use James Hardie products until adequate compensation is guaranteed to the victims of the company's insupportable, profit-driven activities. As I indicated earlier, I have some misgivings as to whether Ashfield council's policy goes far enough, although I concede that its effectiveness depends upon the specific details that still need to be worked out.
One misgiving is the failure to require an asbestos statement to accompany the lodging of a development application. Such a statement would indicate the presence and condition of asbestos prior to any work being undertaken. It would provide a basis for a subsequent certificate that the asbestos has been dealt with in an appropriate and safe manner and has not simply been disguised or covered over prior to the issuing of the final asbestos clearance certificate. Another measure that should be instituted—one that asbestos victims groups have been lobbying for—is a requirement that sellers of houses or apartments reveal to potential purchasers the presence of asbestos. Such a requirement, while beyond the powers of a council to impose, is not beyond the powers of this Government.
Indeed, in this respect, the Australian Capital Territory has shown the way. By February 2005 homeowners in the Australian Capital Territory will have to inform potential tenants or buyers of the presence of asbestos. By January 2006, anyone seeking to sell, whether they are commercial property developers or homeowners, will have to provide asbestos certificates to prospective purchasers. The current bill is just one part of making sure that victims of James Hardie's unconscionable activities receive appropriate compensation. It may also assist in making those who were responsible for such activities personally accountable. But more needs to be done. Of particular concern is the known presence of asbestos in Department of Housing properties.
During budget estimates committee hearings in September I drew the attention of the Minister for Housing to the presence of asbestos in departmental units in south Coogee. I provided him with documents from a tenant who has been battling for more than 12 months to get the department to remove the asbestos. The tenant had graphic photographs showing the dangerous state of her unit and common areas of the building, including electrical power boards. Exposed asbestos fibro boards had no warning labels, even though it is well known that the dust from damaged boards creates a deadly hazard. Asbestos sheets in the building had been drilled by tradespeople to install new wiring, lights, or bathroom fittings, as recently as last August.
Department of Housing building contractors who were working in May, June and July this year to install new wiring and renovate electrical power boards used no protective clothing or procedures, thereby exposing both workers and residents to asbestos dust. The so-called expert who was sent by the Department of Housing on 2 April 2004 to gather asbestos samples from the jagged hole in the bathroom ceiling of the unit hacked at the asbestos sheet with a pair of pliers, without taking any precautions to stop dust spreading around the unit. Discarded asbestos materials were left piled in a heap in the grounds and were exposed to the weather. There was no protection or warning that would have stopped children playing on or around the pile of asbestos. EnergyAustralia contractors have refused to carry out electrical works on the building until the asbestos is removed, yet to date the Department of Housing has refused to do this work. The department has completely disregarded the health of residents.
At the estimates committee hearing on 15 September I was assured by the director-general, Mr Terry Barnes, that the department would give complaints about asbestos an R1 or R2 response rating. An R1 response would, in the director-general's words:
… require a response within four hours if it is disturbed asbestos
He added:
If the asbestos is not disturbed, I think it would fall within a 24hour time period.
I regret to inform the House that since that time there has been absolutely no response. No warning signs have been put in place, and no efforts have been made to remove the asbestos, or to render the unit or the building safe. The department has simply turned its back and hoped the matter would go away. The south Coogee building was erected in the 1960s. It is inconceivable that it is the only Department of Housing building in which asbestos is present. It is also inconceivable that asbestos is not in an equally bad state elsewhere in public housing.
For the department to ignore the situation, to ignore its responsibility to public housing residents and to the community is, in effect, to do what James Hardie attempted to do—shirk its obligations, disregard the law, and hope that it will never be brought to book. It is tragic that so many people have had to give their lives before James Hardie was called to account. It is commendable that, in introducing this bill, the Government is attempting to ensure that James Hardie will not be allowed to escape its liabilities. However, it is essential for the Government now to recognise and act to prevent the asbestos calamity from engulfing the community in general. To do this, the Government must make the provision of asbestos clearance certificates mandatory when properties are sold, let or altered. It must undertake an immediate survey of the presence of asbestos in public housing and institute rectification measures where required. To do any less will be to betray all those who have suffered and died, or will do so, as a result of contact with asbestos.
Mr IAN COHEN [5.59 p.m.]: My remarks will be brief, bearing in mind that Ms Lee Rhiannon and Ms Sylvia Hale have dealt with the issues in detail, but I note at the outset that this legislation deals with an important issue of human rights in the Australian environment. The issues affect many people in the community. I was certainly moved by visits to the Parliament by various asbestosis sufferers, most notably Mr Bernie Banton, who is the acting president of the Asbestos Diseases Foundation of Australia. I saw him as recently as last night and noticed that has to take breathing apparatus with him and that he was walking around in a fairly disabled condition. He has undertaken a really brave fight on behalf of all asbestosis sufferers in the community. The issues run broadly and deeply throughout the community in terms of the number of people who are potentially affected because they live in fibro houses or for other reasons.
There have been glaring deficiencies in reaction to the problems on the part of Meredith Hellicar, the chairman of the James Hardie board, and senior officials in the James Hardie group of companies. The attempt by James Hardie to avoid corporate responsibility by moving assets offshore is deserving of adverse comment by members of this House and represents one of Australia's worst corporate scandals. While I concede that the amount involved is perhaps less than some of the high-profile corporate collapses that have occurred in recent years, the cynicism with which James Hardie's management evidently manoeuvred to limit the company's liability for compensation of victims of its deadly asbestos products is breathtaking—although not surprising for a corporation that has often put its drive for profits ahead of the lives of its employees.
Recently the 7.30 Report on ABC television discussed James Hardie's executives and their knowledge of long-term discussions with their employees about asbestosis. On 13 August the special inquiry set up by the New South Wales Government to investigate the Medical Research and Compensation Foundation [MRCF], created by James Hardie to meet the corporation's compensation liabilities for its victims, held its final day of hearings. The inquiry's head, David Jackson, QC, issued his report on 21 September. The inquiry was established after it was revealed that the MRCF did not have sufficient assets to meet projected compensation claims. On 11 August the Sydney Morning Herald reported that the shortfall was expected to exceed $1.5 billion.
The MRCF was established in 2001 and on 16 February that year James Hardie announced that it had resolved its future asbestos liability for the mutual benefit of claimants and shareholders. The MRCF was supposed to fund all future compensation claims and support medical research through $293 million worth of assets transferred to it by James Hardie. A press release in 2001 stated:
… the consolidated profit and loss statement of the James Hardie group will not include costs associated with asbestos. From today, these costs will be borne by the new foundation.
In September 2001 James Hardie announced that 98 per cent of shareholders had voted to support a proposed corporate restructure, which transformed James Hardie Industries Ltd into James Hardie Industries NV, with its headquarters in the Netherlands. That step was evidently an attempt to remove the corporation's assets from Australia to eliminate the risk of its victims taking legal action to obtain compensation and because of the huge gap between the assets of the MRCF and likely future compensation claims. No treaty exists between Australia and the Netherlands that would allow the corporation's Australian victims to sue for compensation in Dutch courts. After the projected MRCF shortfall was revealed, James Hardie initially tried to deny responsibility for the foundation's crisis and played down its role in Australia's deadly asbestos industry. Perhaps the most hypocritical statement since the scandal broke has been the comment by chief executive officer Peter McDonald in a 30 June report on ABC Radio National's PM program. He said:
I'm not happy with the allegations that have been made against the company, and they certainly impact the company's corporate reputation. And I'm not happy with that either.
In an effort to limit the damage to its reputation, James Hardie circulated a misleading letter to its customers that downplayed its role in the manufacture of asbestos-based products. The letter stated:
Former James Hardie group subsidiaries, Amaba and Amaca, are two of around 150 defendants who are brought into legal process by claimants. It has been estimated that they will be liable for around 15% of future claims in the Australian environment.
It is quite clear that an obvious knowledge of the history of asbestos by James Hardie has been covered up. By 1930 it was known that asbestosis resulted from exposure to asbestos. In 1935, according to briefing material produced by Worksafe Western Australia's SafetyLine Institute, a Western Australia factory inspector reported on the effect that asbestos dust had on workers' lungs at a factory in Perth—the James Hardie factory.
In the face of a mounting public campaign, including union-sponsored protests and bans on the use of building materials manufactured by James Hardie, the corporation has ostensibly backed down and agreed to take responsibility for ensuring its victims are compensated. James Hardie's announcement, on the last day of the New South Wales inquiry, was greeted with scepticism by those campaigning against the corporate giant. Bernie Banton, Acting President of the Asbestos Diseases Foundation of Australia, commented:
I was so overjoyed at first that I nearly swallowed my oxygen hose. But I'm all too aware the real definition is in the fine print.
On 14 August Australian Associated Press reported Banton, referring to James Hardie, as stating:
… to have argued for 53 of the 54 days of a government inquiry that they had no liability to victims, and then to come up in the last five minutes of the inquiry with a turn-around decision, was a mind-blowing change in position.
On the ABC Radio National program PM on 30 July, David Hardaker reported that Hawker Britton, a public relations firm linked to the Australian Labor Party, was retained by James Hardie to:
… sell the concept it called "separation from legacy"—in other words, cutting financial ties with asbestos compensation claims still in the pipeline.
Hawker Britton lobbied the Carr Government to allow the relocation of James Hardie to the Netherlands and set up the MRCF to cover future compensation payouts. The statutory scheme proposed by James Hardie has already been rejected by the Labor Governments in Victoria, Queensland and Tasmania. It is quite clear that we have seen an industrial cover-up of the highest order. I commend the Government for moving at this late stage to resolve the issues that affect so many workers in this industry and their families. It is something that one would hope is resolved in the long term. When the fanfare dies down and the media ceases paying attention to this matter, I hope that victims of James Hardie's asbestos legacy receive adequate and just compensation. I hope the Government stays on track with this. I acknowledge that the material I have used is from a publication entitled "Green Left Weekly" that was written by Rohan Pearce.
The Hon. JOHN HATZISTERGOS (Minister for Justice, and Minister Assisting the Premier on Citizenship) [6.06 p.m.], in reply: The Special Commission of Inquiry (James Hardie Records) Bill was introduced because the Australian Securities and Investments Commission [ASIC] is waiting to receive the records of the Special Commission of Inquiry. Part 2 of the bill will allow the Government to give those records to ASIC. The sooner the bill becomes law and the sooner we can give the records to ASIC, the sooner ASIC can pursue James Hardie and its senior executives. ASIC, as the corporate regulator, has the power to investigate and prosecute James Hardie for offences under the Corporations Act. By passing the bill as a matter of urgency we will assist ASIC to do that. The Special Commission of Inquiry has revealed the extent and depth of James Hardie's manoeuvrings to escape its obligations to victims.
We cannot afford to wait until the money for victims in the Medical Research and Compensation Foundation runs out. That will only give James Hardie more time to hide its assets even further away from its victims. The New South Wales Government faces asbestos liabilities of its own, particularly through exposure of workers in power stations and on the railways. The Government does not seek to hide from those liabilities. Whatever they are, the Government is meeting those liabilities now and will continue to do so in the future. There is no comparison between the conduct of James Hardie and the conduct of other asbestos defendants, including the New South Wales Government and other governments. Only James Hardie has fled the jurisdiction; only James Hardie has sought to hide its assets from the claims of victims through a series of restructures.
Only James Hardie has misled the market, unions, victims and governments over the gross inadequacies of its provisions for its victims. The New South Wales Government will meet all of its asbestos liabilities. If only James Hardie would do the same, this bill would not be needed. This morning Ms Lee Rhiannon raised the issue of a boycott on the use of all James Hardie products until James Hardie meets all of its current and future asbestos liabilities. The Government's focus is on ensuring that asbestos victims receive fair and timely compensation. The Government has consistently said that if a boycott by it were necessary to bring James Hardie to the negotiating table, it would consider that measure.
Obviously the Government wants to ensure that present and future asbestos victims receive compensation. Therefore, the Government will not undertake a boycott, which may jeopardise the ability of James Hardie to provide further funding to the foundation, without careful consideration. The Government will continue to monitor the progress of negotiations with the Australian Council of Trade Unions and victims groups, and will consider further action if necessary. The issue of home renovations has been raised by Ms Sylvia Hale. I recognise that many councils have sought to impose new requirements on development applications. I advise the House that the Government has recently updated information on dealing with asbestos in the home. That information is available on the Government web site www.nsw.gov.au. Consideration is also being given to other public education initiatives which might be appropriate to ensure home renovators know how to identify and deal with asbestos when renovating. I commend the bill to the House.
Motion agreed to.
Bill read a second time and passed through remaining stages.
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