Unions pressure Costello over Hardie compo tax break

ALAN KOHLER: One way or another, it looks like a law will be passed next week to make James Hardie fund all future asbestos claims. The New South Wales Government is pledging to put a Bill to Parliament on Tuesday which will either reflect a signed agreement or the more unpalatable option, retrospective legislation to bring Hardie's assets back from overseas. Hardie, meanwhile, says the deal is dependent on being given tax concessions for compensation. That's a proposition that’s supported by unions, but it's infuriating the Treasurer, Peter Costello. Stephen Long reports.
STEPHEN LONG: It's a month before Christmas, and in the Hollis household you can't hold back the joy of 3-year-old Katie and 9-year-old Tara. But there's a shadow hanging over Christmas for this family from Blacktown in Sydney's working class west. The shadow of mesothelioma, the terrible cancer caused by asbestos.
MARK HOLLIS: When I was 13 years old I was helping my dad doing renovations on a house, and that was all asbestos, sweeping it up, put the sheets up, because my dad had polio at the time.
STEPHEN LONG: Mark Hollis well remembers the label on that asbestos fibro.
MARK HOLLIS: James Hardie. It had no writing on it to say it's poison, or anything like that. No dangerous, all that stuff.
STEPHEN LONG: In May last year he went to the doctor, thinking he had a cold. Within weeks he had radical surgery.
MARK HOLLIS: They just removed my lung. They've done whole renovations on my insides here. They put a new cortex in and it just feels like a piece of plastic there and it's just painful, all the time.
STEPHEN LONG: On Monday morning the Hollises joined a protest outside James Hardie's Sydney headquarters, demanding the company finalise a long-promised compensation deal for thousands who will die from exposure to its products.
BERNIE BANTON: They don't really give a stuff about people. All they care about is their bottom line.
STEPHEN LONG: Hours later came this ultimatum from the New South Wales Premier: Cough up within days, James Hardie, or we'll legislate to make you pay.
MORRIS IEMA: We hope that that legislation will reflect an agreement, but if it doesn't, there is legislation which has been drafted to provide access to the funds to re-establish access to some $1.9 billion in those partly-paid shares in the holding company. We will introduce legislation to re-establish access to those.
STEPHEN LONG: And that means retrospective legislation to reinstate shares that were cancelled by James Hardie. Some $1.9 billion in partly-paid shares, held by the Australian subsidiary, left behind when James Hardie moved its holding company offshore to the Netherlands.
PROFESSOR IAN RAMSAY: In my opinion it would actually be unprecedented to, in a sense, have major legislation by a State Government overturn a transaction that, going back to 2001, was approved by the New South Wales Supreme Court.
STEPHEN LONG: But that court approval came after false assurances by James Hardie that the $1.9 billion would be available to meet all future claims, providing a financial lifeline to asbestos victims and their families. Even so, experts say the New South Wales plan is risky.
PROFESSOR IAN RAMSAY: I think that if the legislation was to proceed, we could very confidently predict that it would be challenged by James Hardie.
STEPHEN LONG: It's a risk the ACTU says it's prepared to take.
GREG COMBET: It's minutes to midnight. This has been given a lot of time. The company's had every opportunity to come to grips with what's being asked of it, and if we can't do this deal in coming days, we are going to pull up stumps, call this process to a halt, in partnership with the New South Wales Government, and before the New South Wales Parliament rises, which is on 2 December, we will be urging the New South Wales Government to put hostile legislation through the Parliament designed to unravel the James Hardie restructuring.
STEPHEN LONG: And the campaign will go global.
WAYNE PEPPARD: My stepfather died of mesothelioma-related disease last year and he was actually a tank officer.
STEPHEN LONG: Wayne Peppard heads the building unions in the Canadian province of British Columbia.
WAYNE PEPPARD: Myself, I'm a plumber and I've been exposed many times over my 35 years in the trade. So I'm a little concerned myself about getting checked out.
STEPHEN LONG: He's been over here speaking to building workers about James Hardie. He's promising a boycott that will hit Hardies where it hurts, the big North American market, where it makes 80 per cent of its sales.
WAYNE PEPPARD: We will initiate a campaign that will be aimed at James Hardie as a company and all of their products, wherever they're used on sites or wherever they're brought through the ports.
STEPHEN LONG: Starting with $86 billion of building work in British Columbia alone.
WAYNE PEPPARD: Well, we'll be looking for a ban on the use of their products on that share of that $86 billion, and that's going to flow right across North America.
STEPHEN LONG: It seems unthinkable that this blue chip would make itself a pariah by breaking its promise of full compensation. But even at the 11th hour it's been haggling. Last week James Hardie sought protection from future claims for remediation of land riddled with asbestos, or removal of asbestos from fibro homes.
GREG COMBET: James Hardie are keen to try and get rid of those other forms of liability that may be there and also to limit the scope of the personal injury compensation. So we're constantly battling over those things with the company and they came back and tried to open things up on that front again quite recently, which is thoroughly inappropriate.
STEPHEN LONG: If a deal is signed, there's still a tax hurdle to be overcome. The company wants to write off the billions it will pay in compensation against tax. But it has a problem. James Hardie claims it moved offshore to cut its tax burden. The irony is that move offshore could now stop it getting tax concessions on any compensation deal. In a further irony, the ACTU boss is backing tax breaks for James Hardie, but not the pro-business Treasurer.
PETER COSTELLO: The company is now facing up to its obligations in relation to compensation to poor people who are dying, who are dying, and their relatives. It will not be given special treatment, this company, under the corporations law or under the tax law. It will abide by the law.
GREG COMBET: If, at the end of the day, the New South Wales Government, the union movement and the asbestos victims groups have an agreement with James Hardie, and all that's standing between those asbestos victims and their compensation over the next 50 or 60 years is the Treasurer, let's see how he stands up to that pressure.
STEPHEN LONG: James Hardie is insisting that any compensation deal exempt it from civil penalty orders, which could stop ASIC from having directors or former executives fined or banned, and that won't please Peter Costello.
PETER COSTELLO: The civil penalty laws should apply both to Hardies and its directors.
STEPHEN LONG: Yet it now seems almost certain that even Hardies most trenchant critics will acquiesce to this get-out clause.
BERNIE BANTON: What they've done, as far as I'm concerned, is criminal, and I'm sure that they can still be charged under criminal law.
STEPHEN LONG: But that won't be so easy, and to Mark Hollis that's a travesty of justice.
MARK HOLLIS: It's just like shooting someone and getting away with it. It's disgusting. No good.
STEPHEN LONG: But a legally-binding compensation deal would give this man and hundreds like him some Christmas cheer.
MARK HOLLIS: I reckon they should just pull their finger out. Like, they promised to pay the whole lot, they should do it. None of this playing games sort of thing. They should just do it. Don't wait for the end of this week. Pay up right now, sign up. That's it.