Embattled building products firm James Hardie Industries NV yesterday signed a landmark compensation deal for thousands of Australians battling asbestos-related disease after exposure to its products.
Chairman Meredith Hellicar pledged the company would meet its responsibilities to victims for decades to come as she announced a deal which effectively wipes out a funding shortfall for compensation of A$1.5 billion (US$1.15 billion).
Hellicar said the deal would allow the company to grow despite the huge financial burden and pledged to restore its reputation, marred by the crisis since a 2001 move to the Netherlands.
"All parties involved in the recent negotiations have agreed it is in the interests of asbestos claimants that James Hardie is, and remains, financially strong and able to continue to fund its growth," she said.
James Hardie was a leading supplier of asbestos related building products to the Australian construction industry for decades, which often ended up in cheap residential housing much of which is still standing. Many former employees and other victims are angry that it profited from asbestos when the dangers were clearly known and the plight of victims has united all sections of Australian politics.
Hellicar apologized to victims for the funding shortfall of the Medical Research and Compensation Foundation (MRCF), which recently filed for liquidation.
"I regret any stress caused to asbestos disease sufferers and their families by the unintentional funding shortfall of the MRCF and hope that this announcement will ease the concern of those sufferers and their families," she said.
Australian Council of Trade Unions secretary Greg Combet, who led the negotiations, warned shareholders not to think about blocking the deal, saying the company could be forced to implement it, through legal action in Australia or the US, where most of its assets now are.
With thousands of new cases of asbestos-related disease expected to arise in Australia in the coming decades, the ultimate value of the deal was put by unions at up to A$4.5 billion.
"There's thousands of people who have already died and there are thousands more to come," Combet said. The agreement will run for an initial period of 40 years but can be extended and caps payouts to 35 percent of the company's free cash flow although funding will be reviewed annually.