Recession hits Australian asbestos victims fund

May 9, 2009

Asbestos victims seeking their retribution payment of A$350 million from the Asbestos Injuries Compensation Fund are approaching the Australian government following an admission from James Hardie compensation fund trustees stating they are unable to pay the victims in lump sums due to the recession.

The James Hardie building materials firm which established the $1.5 billion fund in 2006, claims it is short 3.5 million for its compensation fund payouts due to the decline in the American housing market which provides 85 percent of its company sales. The settlement stipulates that in the event of a shortfall, victims will receive funds in the form of installments.

Asbestos advocacy groups representing injured former employees are requesting help from the Australian Prime Minister Kevin Rudd for additional funds from James Hardie. "We're talking to the government and James Hardie about funding options," said Dallas Booth, CEO of Asbestos Injuries Compensation Fund.

"For example victims might be able to sign over their rights to the state government so that they get compensated in full until the fund can be replenished and then the state government can get their money back straight out of the fund." suggested Paul Bastian, New South Wales secretary of the Australian Manufacturing Workers Union.

Barry Robson, president of the Asbestos Diseases Foundation explained that James Hardie has paid $153 million in taxes to the Australian Taxation Office, and that the Asbestos Diseases Foundation will request of the Rudd Government to defer these taxes until the economic condition improves and James Hardie's profitability returns. In this way the Australian government would allow James Hardie's taxes to go to the asbestos fund.

Victims are currently paid out via a lump sum arrangement, and the Asbestos Diseases Foundation is advocating for the status quo. "Well how they're paid now is in lump sum and we'd like to continue with that. The victims groups are totally opposed to any instalment plan whatsoever," said Robson in the interview with PM.

The Asbestos Diseases Foundation emphasized that a payment plan could be ineffectual, as asbestos victims and those suffering from mesothelioma may die before receiving full payments.

Bastian noted to the Australian Associated Press that asbestos victims have upfront costs to deal with, including medical bills, and would be adversely affected by an installment plan option. "Victims also want to ensure that their families are looked after, that there's contingencies and everything is settled before they pass away, in many cases," said Bastian to the AAP.

Bastian told The Australian he would request Prime Minister Rudd stay true to his promise that "no one would go without compensation". "I think the state Government should be our white knight," commented Bastian.

Asbestosis is a disease resulting from asbestos exposure which causes lung scarring and can lead to lung cancer. Exposure to asbestos can also lead to a more serious condition known as mesothelioma. Mesothelioma is a cancer which develops in the sac surrounding the lungs and chest cavity, abdominal cavity, or the sac surrounding the heart. Patients with malignant mesothelioma generally do not have positive outcomes, and once diagnosed typically have six months to a year to live.