James Hardie 'will repay asbestos loan'

A $320 million government bailout of James Hardie's fund for asbestos victims will
be repaid and does not excuse the struggling company from its obligations to the
fund, Prime Minister Kevin Rudd says.

Mr Rudd and NSW Premier Nathan Rees say James Hardie will repay the emergency loan
even though the depressed US housing market forced the global company to skip
payments to the fund in 2009.
On Saturday, they joined Karen Banton, wife of deceased asbestos victim Bernie
Banton, and Asbestos Diseases Foundation of Australia (ADFA) president Barry Robson
to announce the details of the loan.
"You cannot simply stand idly by and allow innocent workers and their families and
their loved ones to simply be trashed through the irresponsibility of a company," Mr
Rudd told reporters on Saturday.
"We ... are confident that this is an appropriate, interim measure."
But Mr Rudd said the cash injection did not release James Hardie from contributing
to the Asbestos Injuries Compensation Fund (AICF), which has dropped to an
unsustainable level.
"No excuses for James Hardie, and nothing excuses their responsibility into the
future as well," Mr Rudd said.
James Hardie is required to top up the fund with a set annual contribution of 35 per
cent of its "free cash flow", but it has been hurt by a sharp downturn in the
housing market in the US where it records most of its sales.
Times have been tough this year, but the commonwealth insists James Hardie will have
to repay the loan by 2020.
The commonwealth and the NSW government each contributed $160 million to establish
the loan facility.
Mr Rees recalled the difficulty and delays in first establishing the compensation fund.
"Hardie's had to be dragged to an arrangement that was sustainable and that would
look after victims of asbestos-related disease," he said.
Mrs Banton said she hoped the company would recover and continue to fulfil its
responsibilities, but Saturday was a reminder of how it had approached the issue of
compensating victims.
"Today is ... another black mark in the history of this company," she said.
"We still need to hold the company James Hardie to account that they need to pay
back this money and continue to put money into this fund over the 40-year period
that was part of this agreement."
Mr Robson said the loan, which will cover three years of compensation payments, will
be overshadowed by an inevitable increase in asbestos victims.
"By the time this loan is even finished, there'll be another maybe thousand
sufferers that'll be looking for compensation in this three-year period," he told
reporters.
Unions NSW commended the governments' actions but vowed to keep pressure on James
Hardie to make future payments to the fund.
"This announcement ensures victims of the worst workplace safety scandal in
Australian history are able to live out their remaining days with dignity," Unions
NSW Secretary Mark Lennon said in a statement.
ACTU secretary Jeff Lawrence echoed Mr Lennon's statements on holding the company
accountable.
Slater & Gordon executive director Ken Fowlie praised the interim solution but said
James Hardie must continue to pay into the fund when economic conditions improved.
A James Hardie spokesman welcomed the loan, saying it provided certainty for
victims, adding the company anticipated being in a position to contribute to the
compensation fund next year and therefore might not need to draw down on the loan,
the ABC reported.
The shortfall in the fund would have meant that victims would be forced to receive
their compensation payments in instalments rather than a lump sum.