James Hardie is once again in the news for its asbestos compensation plan and objections from victims to changes in the plan. The compensation plan was set up to compensate victims who had contracted asbestos related diseases as a result of exposure to James Hardie building products, which were previously made up of asbestos.
Most recently asbestos victims have rejected the plan by James Hardie to change the way victims receive their payouts from a lump sum to instalment payouts. Although James Hardie is attempting to prevent the fund from running out of money, victims have called the plan “morally bankrupt”.
The following excerpt from an article on Sourceable.net explains more about the plan and the victims’ response to it,
Asbestos victims have rejected a “morally bankrupt” proposal for James Hardie to ditch lump sum compensation packages in favour of installment payments.
The fund set up to compensate victims of James Hardie’s building products warns it will face a shortfall by 2017 and wants to change how it handles payouts to sufferers.
The Asbestos Injuries Compensation Fund is seeking NSW Supreme Court approval to pay compensation to victims in instalments, rather than lump sums to help prevent it running out of money.
James Hardie will apparently pay out more than half a billion dollars in the upcoming 3 years and if the NSW Supreme Court approves their proposal, the new payment scheme could come into effect as soon as July 2015.
The need to switch the payment method from lump sum to instalment could apparently be avoided altogether if the state government increases its loan to the fund from $214 million to $320 million.
Victims aren’t the only ones opposed to the new payment method – The Asbestos Diseases Foundation of Australia has condemned the plans and said that it was James Hardie’s responsibility to top up the fund if it were running out of money, not the responsibility of government. According to The Asbestos Diseases Foundation of Australia’s president Barry Robson, the approach of James Hardie is unethical. He explains:
“To try to weasel out of putting extra money in, is morally bankrupt in my mind,” ADFA president Barry Robson said on Monday.
“They created the problem, they are the ones that came up with this product, they are the ones that made millions and millions of dollars on it, they are killing Australians … they must pay and do it in lump sums, not in instalments.”
He also explained that people receiving the payout would be put into financial hardships if James Hardie were to switch to a monthly payout system. He explained best,
“Asbestos victims don’t die in instalments, they don’t lose the ability work or care for themselves in instalments, yet James Hardie wants to see them compensated in that way,”
James Hardie did however open itself to discussions on the proposed scheme but remained committed to meeting its compensation obligations. The article explained more about the issue:
The building products giant has paid more than $721 million into the fund since 2007.
It has committed to pay out up to 35 per cent of its net operating cashflow to the fund until at least 2045.
It paid almost $120 million to the fund on July 1.