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Issue No. 227 02 July 2004  
E D I T O R I A L

A Place To Call Home
These days the Great Australian Dream is closer to a fantasy, where the chances of owning to your own home depend on either inheriting property or winning lottery.

F E A T U R E S

Interview: Power and the Passion
ALP's star recruit Peter Garrett shares his views on unions, forests and being the Member for Wedding Cake Island

Unions: Tackling the Heavy Hitters
Tony Butterfield became a State of Origin gladiator at the unlikely age of 33. Even that, Jim Marr reports, couldn’t prepare him for the knock-down, drag-em-out world of modern IR.

Industrial: Seeing the Forest For The Wood
Proposals to flog off NSW’s forests have raised eyebrows and temperatures amongst some of the key players reports Phil Doyle.

Housing: Home Truths
CFMEU national secretary John Sutton argues for a radical solution to the housing affordability crisis.

International: Boycott Busters
International unions have issued a new list of corporations breaching ILO sanctions to do business in Burma.

Economics: Ideology and Free Trade
The absurdities of neoclassical economic assumptions has never stood in the way of their being trotted out to justify profiteering and attacks on the rights of citizens. The AUSFTA is the latest rort we are supposed to swallow, writes Neale Towart.

History: Long Shadow of a Forgotten Man
Interest in JC Watson's short time as Labor's first Prime Minister should not detract from his more substantial role as Party leader, writes Mark Hearn

Review: Chewing the Fat
As debate rages in Australia about Fast Food advertising, Julianne Taverner takes a look at a side of the industry that Ronald McDonald won’t tell you about in Supersize Me.

Poetry: Dear John
Workers Online reader Rob Mullen shares some personal correspondence with our glorious leader.

N E W S

 NRMA Reverses Over Turnbull

 Privatisation Kills

 Crikey: Irwin Feeds Staff AWAs

 Nurses Telegraph Fight Back

 "Sexiest Man" Plays it Safe

 Eureka: Bug Swats Hadgkiss

 Macdonald Ponders Asbestos Blue

 Latham Gets Late Mail

 Murdoch Faces Discrimination Rap

 Boss Goes Postal

 Oberon Survives Bomb Threat

 Howard Out On CD

 Telstra Hangs Up On Staff

 Activists What’s On!

C O L U M N S

Politics
The Westie Wing
As the NSW Labor Government sells its first budget deficit in nine years, the real concern for the union movement is the devil in the detail, especially when it comes to procurement agreements, writes Ian West.

The Soapbox
Rubber Bullets
Labor's IR spokesman Craig Emerson launches a few characteristic salvos across the Parliamentary chamber

The Locker Room
Tears After Bedtime
Phil Doyle says that it's all fun and games until someone loses an eye

Postcard
Postcard from Vietnam
APHEDA's Hoang Thi Le Hang reports from the north of Vietnam on a project being fund by Australian unionists.,

L E T T E R S
 Letter From America
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News

Macdonald Ponders Asbestos Blue


When James Hardie decided to trade blue collar for blue chip it knew "spoilers" would try to wreck its party. It even nominated the AMWU and its NSW secretary, Paul Bastian, but was confident they would be seen off by an A-List cast of lawyers and spin doctors.

CEO and Californian resident, Peter Macdonald, had good reason to reassess that position as he flew out of Sydney, this month, after five gruelling days before the Jackson Inquiry.

The inquiry, launched by NSW Premier Bob Carr, was the result of constant lobbying and badgering by unionists incensed that Hardies appeared to have dudded thousands of lung disease sufferers, courtesy of, what Bastian called "an act of corporate bastardry".

They demanded to know how Hardies, a major producer of asbestos products for half a century, had relocated to the Netherlands and told Australian sufferers that, when it came to compensation, they could "go Dutch" as well.

The AMWU highlighted the restructure that left all Hardies liabilities with a grossly under-funded corporate creation, the Medical Research and Compensation Foundation. Bastian told key Carr government ministers MRCF would come up $800 short million of compensation requirements, minimum.

But it wasn't until two things became clear that Carr stunned the business community by announcing a formal inquiry. Bastian's figures appeared, if anything, conservative while Macdonald remained adamant the parent company had "no moral or legal obligations" to dying Australians.

Irrespective of what Jackson reports in September, demands for corporate law reform will surely follow testimony that ripped the veil off how the big end of town operates.

The Inquiry learned that ...

- in the late 1990s, James Hardie directors considered a number of options that would allow them to separate the operating entity from obligations to compensate suffers of asbestos-related diseases

- much legal advice warned of the dangers of any strategy requiring court approval

- the board, in 2001, opted to set up a trust to house AMABA and AMACA, the entities representing its asbestos manufacturing operations

- when Hardies decided, months later, to become James Hardie Industries NV of the Netherlands for tax and legal purposes, the move required Supreme Court approval

- the company assured the Court the creation of a new Dutch entity would not disadvantage anyone owed money by the Australian operation

- Hardies backed this by saying asbestos victims would have the right to call on partly-paid shares with a 2001 value of $1.9 billion

- In March, 2003, directors cancelled those shares at a "private" board meeting. Shareholders were not told and nor were astesbos victims, unions, the general public or the NSW Supreme Court

- the company's own lawyer warned, in a draft opinion, that this cancellation might mean the Supreme Court had been misled

- a former Hardies legal adviser, Wayne Attrill, testified that senior executives knew a press release saying MRCF would be adequately funded was dodgy but authorised it anyway. Attrill said the worry was based on actuarial advice in James Hardies' possession

- Macdonald "hit the roof", according to Attrill, when he learned the company's "retained experts", Trowbridge Deloittes, had posted "gory numbers" about asbestos disease rates on its own website

- the restructure was preceded by a major public relations offensive that used former ALP power broker, Stephen Loosley, amongst others to try and quiet political and public concerns

- James Hardie tried to limit restructure information to the business press where advisers felt "moral" issues would not carry as much weight

- MRCF will fall either $800 million or $1.1 billion, short of being able to compensate Australian asbestos victims and their families, according to separate actuarial figures supplied by Trowbridge Deloittes and KPMG.

Counsel assisting, John Sheahan, this week flagged the possibility of corporate law reform that could make corporate groups responsible for the liabilities of their subsidiaries.

Sheahan has also suggested James Hardie will have to answer a number of allegations about the legality of its actions, arising from the evidence.

The shortfall being investigated by the Jackson Inquiry relates to product liability rather than workers compensation that James Hardie was insured against.


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