James Hardie pays $1.6 billion asbestos compensation

SYDNEY - James Hardie Industries yesterday agreed to pay A$1.5 billion ($1.6 billion) in compensation to people with asbestos-related diseases.

The company's share price went up 6 per cent after the announcement of the deal, which ends a 14-month wrangle.

James Hardie Industries, which once made products using asbestos, said its compensation would be based on an insurance report that estimated present and future liabilities at A$1.5 billion.

The estimate would be updated annually, and the fund would cover at least 40 years and possibly 70.

"This is a momentous day," said asbestosis sufferer and victims' association president Bernie Banton yesterday, holding back tears.

Another victim, Stewart Beckworth, said the money would not keep him alive, but would help his wife and seven children cope without him.

"It's taken the major worry away from myself about what's going to happen to my wife after I'm, sort of, not here."

Beckworth, who contracted mesothelioma from working with James Hardie asbestos products as a builder in Victoria, said the deal would be a great relief to victims.

"It's a good Christmas for those people and they deserve it. They deserve to be compensated."

He has signed a confidentiality agreement preventing him from revealing how much compensation he has received.

But it is understood that victims will receive about A$200,000 on average.

Asbestos Diseases Society of Victoria spokeswoman Jane Staley said it was a good day for victims.

"Finally we are in a position where we have made James Hardie pay."

Hardie is the biggest maker of home cladding in the United States and is listed in Australia. It has moved its headquarters to the Netherlands.

It ousted its top two executives after an inquiry found it had broken company law and hugely underfunded a previous compensation fund.

"The board is pleased with this agreement and looks forward to finalising the principal agreement and taking it to our lenders and shareholders for their consideration," said Hardie chairman Meredith Hellicar yesterday.

Banton, who breathes with the aid of an air hose, said: "There is still a long way to go, but we are getting there."

He recalled a New South Wales asbestos victim involved in the compensation battle who died last week.

"He passed away on Friday, and it just brought to me again today, this is not about the money," Banton said.

"This is about victims and their rightful compensation."

Australian Council of Trade Unions secretary Greg Combet said A$1.5 billion might not be enough.

"We do not know how many people will be affected by asbestos-related diseases in the years to come," he said.

The funding row erupted in October last year, when an A$293 million compensation fund set up by James Hardie in 2001 said it was running out of money, bringing a state Government inquiry and a public relations nightmare for the company.

The inquiry found in September this year that Hardie broke Australian law when it misled the public about money set aside for the fund.

The fund was later found to be seven times too small.

- REUTERS