Case study: James Hardie and asbestos

Asbestos is a naturally occurring mineral that has been mined and used commercially for centuries. The most notable feature of asbestos is that it does not burn and is resistant to flames, electrical and chemical damage. This made asbestos an important resource in the 1800s, when buildings were more susceptible to fire. Asbestos was used as insulation in fireplaces, stoves, furnaces and other areas that produce great heat. More notably, asbestos was woven into timber composites and cement sheeting that was used to line walls and ceilings in buildings, making them more resistant to fire. It has been estimated that approximately 30 percent of all Australian domestic homes constructed before 1982 contain asbestos products; the use of asbestos in public buildings, such as schools, was significantly higher.

Asbestos causes significant health problems, most notably lung cancer and mesothelioma, a type of cancer that affects the lining of the heart and lungs. Asbestos is a crystalline substance that produces invisible fibres. When these fibres are inhaled they lodge in the lungs. Small amounts of inhaled asbestos fibres generally cause no health problems, however exposure to the fibres over a prolonged period – such as in the workplace – increases health risks significantly. The health effects of asbestos have been known for centuries (slaves who wove rugs from asbestos in ancient Rome developed respiratory problems) however its carcinogenic properties were only scientifically established in the mid-1900s.

Despite the obvious affect that asbestos products had on the health of individuals, the mining and use of asbestos continued and was widespread in Australia. From the post-World War II building boom to the 1970s, Australia used more asbestos per person than any other nation on Earth. The town of Wittenoom in WA was Australia’s largest asbestos mine. During the 1960s about 20,000 people lived in Wittenoom, producing more than 160,000 tonnes of blue asbestos. Most of the miners were immigrants, working for low pay and in appalling conditions (as observed in the lyrics of the Midnight Oil song Blue Sky Mine). The mine’s owner, CSR, was strongly criticised for failing to protect the safety of workers at its Wittenoom site:

Since the late 1940s government health inspectors had warned about the dangers of asbestos diseases at the site, but little had been done by the owners, CSR, to improve conditions. The mills were poorly ventilated and used second-hand equipment, while workers slept in barrack dormitories and ate in communal tents. For Christmas, their bosses gave them a bottle of beer. Since the late 1980s CSR has paid out millions of dollars to the victims of the Wittenoom mine, following a court ruling that the company had acted with a reckless disregard for its employees’ safety. Since 1989 it has settled more than 1,400 claims in Australia and has a further 600 pending, and has established a $324 million fund to pay for these cases and a further 130,000 in America, to where many of its fibre-board products were exported. (The Guardian, UK, 2004)

One of the largest local users of asbestos was James Hardie Industries Ltd, an Australian company that manufactured building materials, particularly fibro-cement sheeting. James Hardie became aware of asbestos-related health problems among its employees as early as the 1960s. In 1978 the company began labeling products with warning stickers, informing handlers that dust from the products may cause cancer. In the 1980s James Hardie began making compensation payments to some workers, then in 1987 it ceased all production of asbestos products. As the number of asbestos-related illnesses and deaths increased in the 1990s, James Hardie commissioned an investigation to find out how much compensation would be required. The company then set up a subsidiary, Medical Research and Compensation Foundation (MRCF) and provided it with almost $300 million in assets to meet compensation claims. Some recent court actions against James Hardie include:

Bernie Banton (pictured above) who contracted asbestosis and mesothelioma while employed by James Hardie. Banton became the public face of the legal campaign against his former employer. He was awarded an $800,000 and another undisclosed figure, shortly before he passed away in November 2007. Weeks before his death Tony Abbott, then the Federal minister for health, described Banton as a “gutless creep” whose motives were “not pure of heart”.

Winnifred Brennan washed her husband’s work clothes, which were often covered with asbestos fibres, for many years. Her husband and five of her nine children all died from cancer, while Brennan herself had been diagnosed with mesothelioma. She was awarded $374,000 in 2001.

Anita Steiner was exposed to asbestos fibres as a child, while her parents were renovating their Adelaide home with James Hardie products. She received an unspecified amount in 2007.

Tim Lacone was an inventor who contracted mesothelioma after building a fernery and greenhouse with asbestos-bearing products in the 1970s. Given months to live, he was awarded $2.75 million in an out-of-court settlement. He likened James Hardie to a “hit-and-run driver” for shifting its main operation to the Netherlands when asbestos claims began to escalate.

Garth Copp, who had been given only three months to live, sought in excess of $1 million dollars from James Hardie. As a tradesman he regularly worked with asbestos products, sanding cement-sheeting and sawing cement pipes. He was awarded an unspecified amount of compensation in 2008.

In 2003 it was revealed that the amount needed to compensate those affected by James Hardie products was likely to be $1.6 billion – almost six times the company’s original commitment. Its inadequate contribution to the compensation fund was met with fierce criticism from governments, unions and the media. The unions and pressure groups began a public campaign against James Hardie, claiming that the company had restructured and moved offshore in order to avoid its liability. In 2004 the NSW State government held an inquiry into the company’s actions. The inquiry found that having pocketed the profits from asbestos product sales, James Hardie had a responsibility to pay all compensation claims, which may total as much as $2.2 billion. James Hardie executives, union representatives and governments began negotiating a plan to fund future compensation claims. In 2007 the company agreed to provide an additional $1.55 billion over 40 years.