Australian asbestos victims suffer further at hands of culprit companyPublished by MAC on 2015-11-25
Source: ABC News (2015-11-19)
James Hardie, one of the largest mining companies held responsible for causing asbestosis and mesothelioma among former workers, is back in the news.
It's slashed its contribution to a legacy asbestos compensation scheme by no less than 44% - despite increases in its own profit by 22%, and cash flow by 160%.
Meanwhile, the New South Wales Government Asbestos Injury Compensation Fund (AICF) faces a shortfall of US$184 million by 2017 - and it's taxpayers, not the company, which are expected to meet the bill.
For background articles on MAC, see:
James Hardie slashes asbestos compensation fund payments by 44 per cent
By business reporter Stephen Letts
ABC News (Australia)
19 November 2015
Big building products maker James Hardie has cut its contribution to its legacy asbestos compensation scheme, despite increases in its profit and cash flow.
Figures released in its interim profit announcement showed James Hardie's contribution to the Asbestos Injury Compensation Fund (AICF) fell to $US62.8 million from $US113 million last year — a drop of 44 per cent.
The company said payment represented 35 per cent of its operating cash flow — the level at which James Hardie's board had committed to pay into the fund.
The compensation funding cuts came despite a rise in interim profit from $US156.1 million to $US190 million — or 22 per cent — over the year, and operating cash flow increasing 160 per cent.
Earlier this year the New South Wales Government stepped in to extend further credit to AICF, after it said it was facing a $184 million shortfall in funding by 2017 and was proposing to move to an instalment scheme to help cover the gap.
That plan drew heavy criticism from the Asbestos Diseases Foundation, which described it as "morally bankrupt" as "victims don't die by instalments, they need lump sum payments".
However it was NSW taxpayers who covered the shortfall.
In February the NSW Government relaxed the terms of its loan agreement to AICF, allowing it to draw down the full $320 million in its facility, rather than the previous limit of $214 million.
The results the number of asbestos-related claims received were 12 per cent down on the previous corresponding period, dropping from 337 to 296.
The average claim settlement fell from $244,000 to $223,000 — or 9 per cent — largely due to the lower number of large mesothelioma claims being settled.
Mesothelioma claims were 5 per cent above expectations, but 3 per cent down on last year.
James Hardie said it had contributed $799 million to the compensation fund since it was established in February 2007.
James Hardie's share price tumbled more than 7 per cent on the release of the result after the company issued a weak profit guidance, now forecast at a flat $US230 to $250 million full year profit, well below analysts' expectations.