The Australian Securities and Investments Commission (ASIC) announced today that it has commenced civil penalty proceedings against James Hardie Industries and others, including Ms Meredith Hellicar, Mr Peter Macdonald, Mr Peter Shafron.
The civil penalty action by ASIC relates to the period February 2001 to June 2003 during which James Hardie Industries substantially restructured its company and moved to the Netherlands – one of only two countries with which Australia does not have a treaty for the enforcement of civil court judgements.
ACTU Secretary Greg Combet said:
“I do not expect that these proceedings by ASIC will in any way interfere with the compensation package for James Hardie’s asbestos victims that has been agreed on.
James Hardie’s shareholders voted to support the compensation package on 7 February and the company made its first payment of $184 million to the compensation fund last week, 9 February.
The ACTU expects that the compensation arrangements for asbestos victims will continue to operate smoothly.
Unions had always anticipated that ASIC could initiate proceedings such as these and the outcome is now in the hands of the courts.
What is most important is that unions have helped achieve justice for asbestos victims and that our campaign to hold James Hardie to account has been very successful,” said Mr Combet.
“The ACTU calls on the Federal Government to tighten the corporations law so that it is clear that companies cannot restructure their operations to avoid their responsibilities to their employees,” said Mr Combet.
ACTU Factsheet – James Hardie Historical (extract)
From 1937 the Hardies Group structured its operations so that the manufacture and supply of asbestos products was undertaken by subsidiary companies, most importantly James Hardie & Coy Pty Limited (Coy) and Hardie-Ferodo (later Jsekarb).
Coy was the principle source of income for James Hardie Industries until the mid 1990s.
Between 1995 and 2000 the James Hardie parent company undertook a process of stripping assets from Coy but leaving it with the bulk of the Hardie groups’ asbestos liabilities.
In February 2001 James Hardie established the Medical Research and Compensation Foundation (MRCF) with $293 million in assets including what was left of the asbestos manufacturing subsidiaries Coy and Jsekarb.
As part of this move Coy and Jsekarb indemnified the James Hardie parent company for any asbestos liabilities.
Hardie CEO Peter Macdonald tells the ASX and Australian public the trust was fully funded and would be able to meet all legitimate asbestos compensation claims into the future.
In October 2001 the NSW Supreme Court approve an application from James Hardie to move to the Netherlands and set up as a Dutch company taking with it $1.9 billion in assets from its former Australian companies. The court is assured these assets would be available if needed to meet the claims of Australian creditors including asbestos victims.
The Netherlands is one of only two countries with which Australia does not have a treaty for the enforcement of civil court judgements.
In March 2003 the Dutch based James Hardie severed its final links with its former Australian asbestos producing entities and cancelled the capacity for them to call on the $1.9 billion to pay asbestos victims should this be required.
James Hardie did not advise the NSW Supreme Court, the NSW Government or the ASX of the cancellation of the $1.9 billion lifeline.
Full copy of ACTU James Hardie Factsheet: http://www.actu.org.au/Mediareleases/ActuProudOfUnionCampaignToWinJusticeForAsbestosVictims.aspx