James Hardie Co. Tries to Shift Asbestos Burden to Taxpayers

June 27, 2006 - Asbestos disease sufferers in Australia and around the world reacted angrily last week when the Australian Tax Office (ATO) ruled that the $4.5 billion payout established by James Hardie Company to compensate asbestos victims did not meet the legal requirements for endorsement as a charity. Sydney, Australian-based James Hardie Co., is the biggest seller of home siding in the United States. 

According to James Hardie chief officer Louis Gries, the ruling “threatened to undermine the entire compensation deal.”  An article in Bloomberg News stated that representatives for James Hardie have emphasized that the establishment of the fund is conditional on the ATO allowing the fund, and the company's payments to it, to be tax deductible.

Others are livid about Hardie’s attempt to switch the asbestos burden to the taxpayers. Some have even referred to the move as “shameful.” 

``This is a company that was too clever by half. Frankly, it's been a shameful record,'' said Australian treasurer Peter Costello in an interview on Sydney radio station 2UE. ``What Hardie wants to do is it wants to move as much of the cost as it can onto the tax system.''

In December 2004, James Hardie Co. agreed to set up a new fund for asbestos sufferers, ending a two-year fight with victims and unions after revelations the company had under- funded its current asbestos compensation trust. The deal was subject to tax exemptions. The company’s current fund is expected to be dry by the end of the 2006 year.