24 Apr 2009

James Hardie asbestos compo at risk of drying up

3:14 pm on 24 April 2009

Australian building materials company James Hardie Industries is being called on to declare what funds it has available for asbestos victims.

Under an arrangement with Australia's Asbestos Injuries Compensation Fund, the company has to give up to 35% of its annual revenue to asbestos victims.

On Thursday, the company said it probably would not be able to contribute next year because of the global economic crisis.

Australian Council of Trade Unions secretary Jeff Lawrence called on the company to show evidence it cannot meet its commitments.

The situation will not affect New Zealand victims, who are not eligible for compensation.

Chief executive Louis Gries said on Thursday the severe downturn in the United States housing sector, where three quarters of James Hardie's revenues are made, means it is likely to result in negative cash flow and no payment.

In March 2008, James Hardie expected the asbestos fund's compensation liabilities over the coming three years to total $A257.5 million. At the end of last month, the fund had $A140 million left.

James Hardie would contribute again when net operating cash flow returned to positive, Mr Gries said.

The AICF board is seeking talks with the New South Wales government and James Hardie to arrange alternative funding arrangements, with the latter suggesting possible payment through installments.

NSW Attorney-General John Hatzistergos said the state government would do everything possible to ensure compensation payments continued for asbestos victims.