Australian labor unions will take their protest over James Hardie Industries NV's funding shortfall for asbestos victims to the U.S. today, seeking to extend their boycott of the company's building products to its largest market.
KPMG estimated James Hardie's asbestos liabilities to be A$1.57 billion ($1.1 billion), a New South Wales state government inquiry was told in June. The company allocated A$293 million in 2001 to a foundation to meet all compensation claims.
Victims groups have rejected an offer by James Hardie to fully compensate sufferers of asbestos-related diseases if the New South Wales government changes laws to reduce the company's legal costs. Unions and victims protested at a shareholders meeting in Sydney and will march outside the company's U.S. headquarters in Mission Viejo, California. James Hardie gets 80 percent of its profit in the U.S., where it's the biggest seller of home sidings.
``The U.S. is a critical market for James Hardie and it's important that U.S. unions and consumers are made aware of the appalling way this company has treated Australian asbestos victims,'' Australian Council of Trade Unions Secretary Greg Combet said in a statement e-mailed to Bloomberg News.
Protesters will also travel to Amsterdam, where James Hardie is incorporated, for the company's annual shareholder meeting on Friday.
The company registered its business in the Netherlands the same year it established the fund. It retained its corporate headquarters in Sydney and its main listing on the Australian Stock Exchange.
Chairman Meredith Hellicar today rebutted accusations that the company deliberately underfunded the asbestos foundation and moved to the Netherlands to put its assets out of reach of claimants.
``It has been the position of the company, and it remains its position, that at the time, and contrary to what is now alleged to be the company's motivation, the board believed this would be sufficient funds to meet all future claims,'' Hellicar said in speech notes sent to the stock exchange.
The move to the Netherlands ``was driven by the company's increasing global focus,'' she said. ``It was not driven by a desire to run away from asbestos liabilities.''
Shares of James Hardie have dropped 31 percent since Oct. 29, the day before the fund first said it didn't have enough money to pay all victims' claims. The stock rose 7 cents to A$5.35 at 10:06 a.m. in Sydney.
Australian building unions and some city councils in New South Wales, the country's biggest state, are boycotting James Hardie products, which include home building materials such as cladding, fencing, eaves and wall panels and commercial products such as facade paneling, tunnel lining, flooring and walls.
Thousands of construction workers and asbestos victims marched through Sydney to the shareholder meeting, carrying pictures of friends and colleagues who have died from asbestos-related diseases, Australian Associated Press reported.
James Hardie started making products containing asbestos in the 1920s. It started to phase out blue asbestos in 1968, and all products were asbestos-free by 1986, Hellicar said. Asbestos, a fibrous mineral, has been linked to lung cancer and mesothelioma, a rare form of cancer affecting cells in the chest or abdomen.
In the U.S., congressional leaders have proposed a fund to compensate victims of workplace exposure to asbestos to be financed by companies that made products with asbestos and their insurers.
More than a dozen public U.S. companies have filed for bankruptcy because of asbestos liabilities in the past five years, including Owens Corning, W.R. Grace & Co. and Federal-Mogul Corp. Pfizer Inc., the world's largest drugmaker, this month agreed to pay $430 million to resolve personal injury claims made against a subsidiary that sold products containing asbestos in the 1970s.
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