Hardie: the company that tried to get away with murder


In 1978, John Reid, chair of James Hardie Industries, boasted: "Every time you walk into an office building, a home, a factory; every time you put your foot on the brake, ride in a train … the chances are that a product from the James Hardie group of companies has a part in it".

He didn't add, according a scathing Matt Peacock said in Killer Company, that the company executives had been aware for decades that people who worked or lived in all of those places might develop fatal cancer or debilitating asbestosis as a result of their exposure to asbestos fibres.

Peacock, an ABC journalist, first started tracking down the toxic history of asbestos and the Hardie cover-up of its dangers in 1977.

Through company insiders, workers, trade unionists, asbestos-disease sufferers and confidential documents, Peacock dissects Australia's greatest industrial disaster — which may have poisoned 20,000 people.

Asbestosis, the scarring and shrinking of the lungs from inhaling asbestos fibres, had been recorded since 1900. Asbestos-caused mesothelioma (cancer of the lung or abdomen) had been a worldwide concern since the late 1950s.

Both diseases were well known to the higher echelons of Hardies and their response to this knowledge has always displayed a deeply guilty conscience.

When government inspectors identified two victims of asbestosis in 1935 in Hardie's Riverdale plant in WA, the company moved all its asbestos business into a subsidiary company, enabling the parent company to claim the legal protection of the "corporate veil" against future asbestos damage suits.

Hardie's company doctor, Terry McCullagh, was part of the "old boys network" in the industry and the bureaucracy that served to guard the interests of Hardie. McCullagh cynically recommended the employment of older men because they were more likely to die from other causes before asbestos diseases killed them.

McCullagh was also a key member of the Commonwealth body that set lax standards for asbestos dust concentrations in Australia, despite telling Hardie factory managers in 1966 that there was "fairly conclusive evidence" that "there is no safe upper limit for asbestos dust".

When the dangers of asbestos eventually broke through the corporate silence, Hardie's response was to take asbestos out of the company's name (James Hardie Asbestos), to resist adopting warning labels and to spend millions on public relations.

Hardie's habit of secrecy also spread from its workforce to the broader community. The truck drivers and wharfies who transported the raw material were endangered. More than 1000 wharfies were to die from their exposure to asbestos in Australian ports.

Hardie's asbestos protruded from broken wall panels in Melbourne's Harris trains. It was used as fire retardant until the mid-1970s on scores of public buildings and many schools throughout the country. Asbestos fibre-cement and insulation were ever-present in private homes.

Asbestos waste from Hardie's factories was sold or given away as cheap fill for driveways and paths, including an orphanage in Perth.

Asbestos waste was also dumped at local tips, including the St Kilda tip in Adelaide, where the toxic dust levels were secretly monitored. Hardie's Dust Committee warned management of "the harm that such an event could cause to the company's good public relations" if news of the danger leaked out.

The millions of hessian bags used to transport raw asbestos carried a sting in their tail. They struck down banana growers who used them for pest protection, farmers who bought superphosphate in them, market gardeners, miners' children and home renovators who replaced their old carpet underlay which had been made from the recycled bags.

Australia's asbestos mines that fed Hardie's appetite also added many miners to the death toll, from Wittenoom (part-owned by Hardie), to Woodsreef near Tamworth (the dust from its huge mountains of asbestos tailings blowing in the wind to this day), to the former Hardie-owned Baryulgil mine, near Grafton, which failed to warn its mostly Aboriginal workforce of any dangers.

Through these decades, the company's guiding philosophy was, as Peacock puts it, "the less said, the fewer claims", an approach that was "all about profit for family and shareholders". Hardie chose silence again and again.

Compounding this criminally negligent history was Hardie's treatment of its compensation liabilities. Hardie preferred the "cheap, fast and secret" workers' compensation pensions, whereby claimants got as little as one sixth what they would have received under common law.

However, this arrangement was no longer feasible as a growing queue of victims took to the courts. So, Hardie's next line of defence was to move its corporate headquarters to the Netherlands in 2001, leaving behind a near-bankrupt "Medical Research and Compensation Foundation" to compensate its victims.

The new overseas parent company was protected by the "corporate veil", avoiding compensation liabilities should the foundation use up its kitty of $293 million. In 2003, the funding shortfall was estimated to be $500 million but this failed to concern Hardie. It made a $250 million cash issue to its shareholders at the same time as the foundation announced its near-insolvency.

Hardie's history of doing whatever it could to avoid or minimise the amounts paid to its victims continued right up to the last, when the NSW government handed negotiations over compensation to the ACTU and the stoic fighter, Bernie Banton, who had contracted asbestosis and cancer from his days at the Camellia insulation plant in NSW.

Pressured by local council and domestic and international union boycotts of Hardie's products, the company eventually signed a multibillion-dollar compensation deal with the NSW government.

Further justice beckoned when the government set up a Special Commission to investigate Hardie's flight overseas. The Commission found that the Hardie executives had breached their duty of disclosure and had engaged in misleading and deceptive conduct by lying that the foundation they set up was "fully-funded" and would provide victims with compensation "certainty".

However, later prosecution by the Australian Securities and Investment Commission under civil (not criminal) penalty proceedings resulted in only pathetic fines, barely what a director would make in just one month.

Shamefully, no government has ever laid criminal charges against Hardie, including its chair for 23 years since 1973, John Reid.

He has never fronted a court to answer questions about his role as head of the company that has probably caused, writes Peacock, avoidable deaths equivalent in scale to those sustained by Australia during World War I.

Despite its record, Hardie has never been entirely friendless. The union movement, alas, had its black sheep in the former federal head of the Miscellaneous Workers Union, Ray Gietzelt, regarded by Hardie as an ally, and who was still an asbestos-disease-denier in 2005.

Gietzelt aside, Peacock has dedicated his book to "the trade unionists whose often lonely fight has slowly restricted the use of asbestos in many parts of the world". Without the unions, added Banton (who died in 2007), Hardie workers would have got "diddly-squat".

Peacock has also dedicated his book to asbestos-disease sufferers, whose stories are ever-present in a compassionate but angry book, reminding us of the human cost of, and human spirit of resistance to, Hardie's serial corporate depravity.