Asbestos Pigeons Coming Home to Roost
Some years ago at a U.S. conference on asbestos litigation, I told an attorney who represented the asbestos multinational Eternit: “Your client needs to know that it will be held accountable for the harm it has done.”1 He was not happy to hear this as he had hoped to see out the rest of his working life in the employ of Eternit. It is not just Eternit however that is now being held accountable for it's callous disregard for occupational and public health; all industry stakeholders that profited from the commercial exploitation of the “magic mineral” need to anticipate a backlash from those who have been harmed.
Recent developments suggest that the fight-back by asbestos victims is succeeding in more and more jurisdictions. Even as a trial in Turin, Italy is progressing against former Eternit company executives for their role in the fatal exposures received by thousands of Italians,2 ten asbestos businessmen were condemned by an Australian Court for misleading the public over the content of a James Hardie press release which stated that the company was fully funded and able to meet its compensation liabilities.3 Within two years, a shortfall of more than $1 billion was revealed; the certainty which the company had sought to give asbestos victims and investors was not justified.
On April 23, 2009, the New South Wales Supreme Court upheld a civil claim brought by the Australian Securities and Investments Commission, the country's corporate regulator; finding that in February 2001 the entire board of James Hardie, formerly Australia's biggest asbestos group, breached its duties of care under section 180 of the Corporations Act. The executives found guilty were: Chairman Meredith Hellicar, CEO Peter Donald Macdonald, General Counsel Peter James Shafron, Chief Financial Officer Phillip Graham Morley, Non-executive director Michael Robert Brown, Non-executive director Michael John Gillfillan, Non-executive director Martin Koffel, Non-executive director Geoffrey Frederick O'Brien, Non-executive director Gregory James Terry, Non-executive director Peter John Willcox.4 In his 351-page judgment, Justice Ian Gzell singled out the former Chairwoman of James Hardie, Meredith Hellicar:
“There was a dogmatism in her testimony that I do not accept… She was proved to be inaccurate on a number of occasions. I found Ms. Hellicar to be a most 'unsatisfactory witness'.”
Commenting on the long awaited judgment, Australian attorney Tanya Segelov said:
“What was important to me is that every person who was sued was found in some way or other to have breeched the Corporations Act… This is the first time that anyone from Hardies has ever been held by the courts to have acted unlawfully, and that is a really significant thing. Finally, after all this time, that's something.”
The outcome of this case is being interpreted as a warning to all company boards that the Australian government will not tolerate corporate practices which mislead and or deceive the public.
With recent conferences in China and Kazakhstan,5 the flow of information on the reality of the asbestos hazard is intensifying. Unfortunately, Russia, the world's biggest exporter of chrysotile asbestos, remains under the iron grip of the government–industry asbestos nexus.6 In an article published on May 4, 2009 entitled A Town Called Asbest, Journalist Shaun Walker documents the civic brainwashing which the industry has achieved in a town devoted exclusively to the commercial exploitation of asbestos.7 Asbest is a monograd, a Russian town that survives “purely on the basis of one major factory.” Asbestos is the lifeblood of the local economy and 70% of local families have at least one member who works in the 19 factories and workshops operated by UralAsbest.
It is little wonder that the leader of the town's main trade union, the Mayor and the chief correspondent at the local TV station all sang from the same hymn sheet when interviewed by Walker. Attempting to distinguish their “safe” asbestos from the dangerous stuff, they all made the distinction between the two types of fiber – chrysotile and amphibole. Their repetition of the party line fell on deaf ears and Walker “started to tune out. I was getting tired of the chrysotile/amphibole diatribe…”
Having left the toxic environs of Asbest, Walker travelled 70 kilometres to Ekaterinburg, the nearest big city, to have dinner with the editor of the local newspaper who, when asked about asbestos, said:
“Asbestos? My God, it's completely poisonous – no wonder the town is dying. Who on earth would want to buy asbestos these days. It gives you cancer!”
Despite the industry's total control of the asbestos agenda in the monograd Asbest, people just a few miles away are in no doubt about the toxic nature of the substance.
Perhaps what the ban asbestos movement has been unable to accomplish in Russia will be achieved by market forces. With the catastrophic fall in demand which has, so the Russian asbestos industry claims, been a consequence of the global financial crisis, workers in Asbest have time on their hands. With fewer sales, most asbestos employees are now working two days a week. In their spare time, they might reflect on how the world has turned away from asbestos. Maybe, just maybe the rest of the world is right and their asbestos is, after all, not as safe as they had been led to believe.
May 8, 2009
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1 Unlike most other asbestos-tainted multinationals, Eternit has escaped the disgrace of bankruptcies such as those experienced by scores of U.S. companies like: Johns Manville., Federal Mogul, Babcock & Wilcox etc.
2 http://ibasecretariat.org/lka_eternit_pre_tria_manouevre_120309.php
3 Kazan-Allen L. Court Date for James Hardie
4Jacobs M, Eyers J. Judge Slams Deception by Hardie Board. April 24, 2009. The Australian Financial Review. Pages 1, 10-12, 61. http://afr.com/home/viewer.aspx?EDP://20090424000031073255§ion=home
5 See: Kazan-Allen L. Landmark Ban Asbestos Conference in China and Kazan-Allen L. First International Asbestos Conference in Kazakhstan.
6 Data obtained from the United States Geological Survey reveals that in 2007 Russia produced 925,000 metric tons and used 280,019 metric tons, making it the world's biggest producer and 3rd biggest user of chrysotile asbestos. Russia is the world's largest asbestos exporter.
7 Walker S. A Town Called Asbest. May 5, 2009. http://www.slate.com/id/2217220/
