James Hardie Industries plc is a global building materials company and the largest global manufacturer of
fibre cement
Fibre cement is a composite building and construction material, used mainly in roofing and facade products because of its strength and durability. One common use is in fiber cement siding on buildings.
Material description
The term "cement" ori ...
products. Headquartered in Ireland, it is a
dual-listed company
A dual-listed company or DLC is a corporate structure in which two corporations function as a single operating business through a legal equalization agreement, but retain separate legal identities and stock exchange listings. Virtually all DLCs ar ...
, being listed on the
Australian
Australian(s) may refer to:
Australia
* Australia, a country
* Australians, citizens of the Commonwealth of Australia
** European Australians
** Anglo-Celtic Australians, Australians descended principally from British colonists
** Aboriginal A ...
and
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed ...
s. Its management team currently sits in Chicago, Illinois, United States. James Hardie was plagued by several
asbestos-related scandals in the 20th century.
History
James Hardie (27 July 1851 – 20 November 1920) emigrated to Australia in 1888 from
Linlithgow
Linlithgow (; gd, Gleann Iucha, sco, Lithgae) is a town in West Lothian, Scotland. It was historically West Lothian's county town, reflected in the county's historical name of Linlithgowshire. An ancient town, it lies in the Central Belt on a ...
,
Scotland
Scotland (, ) is a Countries of the United Kingdom, country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a Anglo-Scottish border, border with England to the southeast ...
, and established a business importing oils and animal hides. Andrew Reid, also from Linlithgow, came to join Hardie in
Melbourne
Melbourne ( ; Boonwurrung/Woiwurrung: ''Narrm'' or ''Naarm'') is the capital and most populous city of the Australian state of Victoria, and the second-most populous city in both Australia and Oceania. Its name generally refers to a met ...
, and became a full partner in 1895. When Hardie retired in 1911, he sold his half of the business to Reid.
The company was listed on the
Sydney Stock Exchange in 1951. At the time, the company manufactured products out of
asbestos cement
Asbestos cement, genericized as fibro, fibrolite (short for "fibrous (or fibre) cement sheet") or AC sheet, is a building material in which asbestos fibres are used to reinforce thin rigid cement sheets.
Although invented at the end of the 19t ...
sheet and other related building material.
By the middle of the twentieth century, James Hardie had become the largest manufacturer and distributor of
building products,
insulation
Insulation may refer to:
Thermal
* Thermal insulation, use of materials to reduce rates of heat transfer
** List of insulation materials
** Building insulation, thermal insulation added to buildings for comfort and energy efficiency
*** Insulated ...
, pipes and
brake linings
Brake linings are the consumable surfaces in brake systems, such as drum brakes and disc brakes used in transport vehicles.
History
Brake linings were invented by Bertha Benz (the wife of Karl Benz, who invented the first patented automobile) ...
containing asbestos. In Australia, it operated asbestos plants in
New South Wales
)
, nickname =
, image_map = New South Wales in Australia.svg
, map_caption = Location of New South Wales in AustraliaCoordinates:
, subdivision_type = Country
, subdivision_name = Australia
, established_title = Before federation
, es ...
,
Queensland
)
, nickname = Sunshine State
, image_map = Queensland in Australia.svg
, map_caption = Location of Queensland in Australia
, subdivision_type = Country
, subdivision_name = Australia
, established_title = Before federation
, establishe ...
,
South Australia
South Australia (commonly abbreviated as SA) is a state in the southern central part of Australia. It covers some of the most arid parts of the country. With a total land area of , it is the fourth-largest of Australia's states and territories ...
,
Victoria
Victoria most commonly refers to:
* Victoria (Australia), a state of the Commonwealth of Australia
* Victoria, British Columbia, provincial capital of British Columbia, Canada
* Victoria (mythology), Roman goddess of Victory
* Victoria, Seychelle ...
and
Western Australia
Western Australia (commonly abbreviated as WA) is a state of Australia occupying the western percent of the land area of Australia excluding external territories. It is bounded by the Indian Ocean to the north and west, the Southern Ocean to th ...
. Working with the products containing asbestos – including
asbestos cement
Asbestos cement, genericized as fibro, fibrolite (short for "fibrous (or fibre) cement sheet") or AC sheet, is a building material in which asbestos fibres are used to reinforce thin rigid cement sheets.
Although invented at the end of the 19t ...
– caused people to develop various
pleural abnormalities such as
asbestosis
Asbestosis is long-term inflammation and scarring of the lungs due to asbestos fibers. Symptoms may include shortness of breath, cough, wheezing, and chest tightness. Complications may include lung cancer, mesothelioma, and pulmonary heart d ...
and
malignant mesothelioma.
[Handen Zeren, E., Gurmurdulu, D, Roggli, V. et al. (2000). 'Environmental Malignant Mesothelioma in Southern Anatolia: A Study of Fifty Cases'. ''The National Institute of Environmental Health Sciences'' 108(11): 1047-1050.] In 1961, it merged its brake lining division with
Turner & Newall
Turner & Newall was a manufacturing business based in Manchester, United Kingdom. At its peak, it was a constituent of the FT 30 index of leading companies on the London Stock Exchange. As part of their business, the company was one of the first ...
's Ferodo, taking a 60% shareholding in Hardie-Ferodo. It purchased the remaining 40% in August 1980.
By the mid 1980s, James Hardie invented the modern day asbestos-free fibre cement material and had transitioned production entirely to fibre cement, a product consisting largely of
Portland cement
Portland cement is the most common type of cement in general use around the world as a basic ingredient of concrete, mortar, stucco, and non-specialty grout. It was developed from other types of hydraulic lime in England in the early 19th ...
, sand, and wood fibres.
In December 2001, the company relocated its headquarters to the
Netherlands
)
, anthem = ( en, "William of Nassau")
, image_map =
, map_caption =
, subdivision_type = Sovereign state
, subdivision_name = Kingdom of the Netherlands
, established_title = Before independence
, established_date = Spanish Netherl ...
. While the move to the Netherlands resulted in tax savings of $86 million over seven years, in 2009 the
Australian Taxation Office
The Australian Taxation Office (ATO) is an Australian statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system, superannuatio ...
issued an amended assessment for $172 million plus interest and penalties. James Hardie successfully appealed the assessment. Also in 2009, the US
Internal Revenue Service alleged that James Hardie had not been in compliance with the
US-Dutch treaty since it had been implemented in 2006 and claimed $US37 million in unpaid taxes plus $US10 million in interest and penalties.
In 2010 James Hardie moved its corporate domicile to Ireland.
James Hardie currently operates a corporate office in Chicago, Illinois, United States and operates more than a dozen manufacturing plants around the world.
Sponsorship and philanthropy
James Hardie was the naming rights sponsor of the
Bathurst 500/1000 from
1968
The year was highlighted by protests and other unrests that occurred worldwide.
Events January–February
* January 5 – " Prague Spring": Alexander Dubček is chosen as leader of the Communist Party of Czechoslovakia.
* Janu ...
until
1987
File:1987 Events Collage.png, From top left, clockwise: The MS Herald of Free Enterprise capsizes after leaving the Port of Zeebrugge in Belgium, killing 193; Northwest Airlines Flight 255 crashes after takeoff from Detroit Metropolitan Airport, ...
. It was shirt sponsor for the
Parramatta Eels
The Parramatta Eels are an Australian professional rugby league football club based in the Sydney suburb of Parramatta that competes in the National Rugby League.
The Parramatta District Rugby League Football Club was formed in 1947, and their ...
from
1981
Events January
* January 1
** Greece enters the European Economic Community, predecessor of the European Union.
** Palau becomes a self-governing territory.
* January 10 – Salvadoran Civil War: The FMLN launches its first major offensiv ...
until 1995.
In 1988 James Hardie Industries made the largest donation ever made to an Australian public library when it gifted to the
State Library of Queensland the meticulously developed and hugely significant Australian Library of Fine Art which was given as a bicentennial gift to the nation. This collection became the James Hardie Library of Australian Fine Arts, and was part of the Arts and Rare Books Unit at the State Library.
Asbestos
History
In 1978 the effects of
pleural abnormalities and other
asbestos-related diseases were beginning to show up in the former mine workers. While other companies were involved in similar asbestos-related activities, most notably
CSR, more than 50% of claims made to the
Dust Diseases Tribunal of New South Wales
The Dust Diseases Tribunal of New South Wales was established on 21 July 1989 as a specialist court within the Australian court hierarchy with exclusive jurisdiction within New South Wales, Australia, to deal with claims for damages from sufferer ...
in 2002 were brought against companies in the James Hardie group.
[In the Shadow of the Corporate Veil: James Hardie and Asbestos Compensation](_blank)
Parliament of Australia 10 August 2004
There were protests against the companies' operations near the small
Aboriginal Australian
Aboriginal Australians are the various Indigenous peoples of the Australian mainland and many of its islands, such as Tasmania, Fraser Island, Hinchinbrook Island, the Tiwi Islands, and Groote Eylandt, but excluding the Torres Strait Isl ...
community of
Baryulgil
Baryulgil is a rural locality in north-eastern New South Wales, Australia. The locality is on the Clarence River (New South Wales), Clarence River in the Clarence Valley Council local government area.
History
According to the Geographical Names ...
on the
NSW North Coast, with
Lyall Munro Snr
Lyall Munro Snr (30 September 1931– 21 May 2020), also known as Uncle Lyall Munro Senior, was an Aboriginal Australian activist, leader, and elder, especially known for his advocacy of Indigenous land rights. He was the husband of Carmine ...
and the NSW
Aboriginal Legal Service
The Aboriginal Legal Service (NSW/ACT) (ALS), known also as Aboriginal Legal Service, is a community-run organisation in New South Wales and the Australian Capital Territory, founded in 1970 to provide legal services to Aboriginal Australians a ...
taking an active part in actions against the company.
James Hardie and its subsidiaries had been providing compensation for victims of its operations since the 1980s. Though some earlier claims had arisen, the proliferation of cases from the 1980s onwards forced James Hardie to acknowledge that it had known asbestos to be dangerous. James Hardie nonetheless maintained that it had done everything possible to protect workers. In 1978 the company began putting warning labels on its products explaining that inhalation of the dust could result in cancer. In March 1987 James Hardie ceased all asbestos manufacturing activities.
As concern grew about the serious adverse health effects of asbestos, in the mid-1980s James Hardie developed an asbestos-free fibre cement technology, without the dangers associated with asbestos.
The MRCF and move to the Netherlands
James Hardie had been structured as a parent company operating through subsidiaries since the 1930s. All asbestos operations, including the provision of compensation, were undertaken by James Hardie's subsidiaries, principally James Hardie and Coy and Hardie-Ferodo (later known as Jsekarb).
[Australian Council of Trade Unions (2007]
''James Hardie Asbestos Victims Compensation Background Facts''
Between 1995 and 2000, James Hardie (the parent company) began to remove the assets of these subsidiaries (since renamed Amaca and Amaba respectively), while leaving them with most of the asbestos liabilities of the James Hardie group.
In 2001 these two companies were separated from James Hardie and acquired by the Medical Research and Compensation Foundation (MRCF) which was essentially created in order to act as an administrator for Hardie's asbestos liabilities. Then CEO of James Hardie, Peter McDonald, made public announcements emphasising that the MRCF had sufficient funds to meet all future claims and that James Hardie would not give it any further substantial funds. Indeed, the net assets of the MRCF were $293 million, mostly in real estate and loans, and exceeded the 'best estimate' of $286 million in liabilities which had been estimated in an actuarial report commissioned by James Hardie.
The Jackson Report found that this 'best estimate' was 'wildly optimistic' and the estimates of future liabilities was 'far too low'.
After this separation, James Hardie moved offshore to the Netherlands for what it claimed were significant tax advantages for the company and its shareholders. To make this move, the company had to assure Australian courts (as it was listed on the
Australian Securities Exchange) that the MRCF would be able to meet future liabilities. The courts were assured of this and that more money would be made available to its Australian asbestos victims through the issue of partly paid shares to MRCF obliging the new Dutch parent company to meet a call for funds if it were needed. The value of the call at the time was $1.9 billion.
The move to the Netherlands therefore proceeded. However, the tax benefits which James Hardie expected to receive as a result from its move did not eventuate following the revision of tax laws in the United States in 2001 and later with the United States signing a new trade agreement with the Netherlands in 2006.
Shortly after the move, an actuarial report found that James Hardie asbestos liabilities were likely to reach $574 million. The MRCF sought extra funding from James Hardie and was offered $18 million in assets, an offer the MRCF rejected. The estimate of asbestos liabilities was promptly revised to $752 million in 2002 and then $1.58 billion in 2003. The funding shortfall became of increasing concern in 2004 as it became clear that eligible victims would miss out on receiving compensation after it was revealed that in March 2003 James Hardie had cancelled the partly paid shares that were intended to be a safety net for the fund.
In discussing the shortfall with the MRCF, James Hardie refused to accept further responsibility for the liabilities on the basis that the MRCF and James Hardie were separate legal entities.
Inquiry
On 12 February 2004, a judicial inquiry
A tribunal of inquiry is an official review of events or actions ordered by a government body. In many common law countries, such as the United Kingdom, Ireland, Australia and Canada, such a public inquiry differs from a royal commission in that ...
into the matter was commissioned by the Government of New South Wales. The findings were very critical of James Hardie and its management. Amongst other findings, it found that the actuarial reports commissioned by James Hardie which estimated liabilities at $286 million were inadequate because they used a financial model which made unfounded predictions on the value of investments held by Amaca and Amaba, the figures were subject to numerous unspecified conditions and they did not account for the effect of separating Amaca and Amaba from James Hardie. However, the inquiry found that James Hardie was under no legal obligation to provide compensation. Despite this finding, there was immense political and social pressure on James Hardie to negotiate a compensation deal; governments were boycotting James Hardie products and unions were threatening to instigate a global union movement against the company based on refusing to handle James Hardie products.
Following the results of the inquiry, James Hardie entered into negotiations with governments and trade unions in an effort to establish some sort of compensation system for eligible victims of James Hardie's products. In December 2004, James Hardie agreed to pay compensation to the victims of its products through a voluntary compensation fund. The details of the fund were to be legally determined by June 2005 but progress was stalled and the company refused to disclose the date the deal would be finalised. Further conflicts between the company and the Federal Government over tax deductibility of donations to the voluntary fund saw finalisation of the deal further delayed. It was not until November 2006, after the federal government had created 'black hole' tax legislation, which made the contributions of James Hardie into the voluntary fund tax deductible, and had granted the voluntary fund tax-exempt status, that James Hardie finalised the compensation deal. There was immense pressure on the Federal Government from state governments, union leaders and victims to remove the tax problem. The final step in giving the voluntary fund a legal structure was approval of the scheme by James Hardie shareholders. In February 2007, 99.6% of shareholders voted in favour of the scheme and it began operating days later.
Legal action
After the inquiry in 2004, prosecutors were considering bringing civil and criminal charges against the CEO and other senior executives for making fraudulent statements as to the liquidity of the MRCF. In February 2007 every member of the 2001 board and some members of senior management were charged by the Australian Securities & Investments Commission
The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
(ASIC) with a range of breaches of the Corporations Act 2001
The ''Corporations Act 2001'' (Cth) is an Act of the Parliament of Australia, which sets out the laws dealing with business entities in the Commonwealth of Australia. The company is the Act's primary focus, but other entities, such as partner ...
including breach of director's duties by failing to act with care and diligence.
ASIC also undertook investigations into possible criminal charges against the company's executives but in September 2008 the Commonwealth Director of Public Prosecutions
The Office of the Commonwealth Director of Public Prosecutions or, informally, the Commonwealth Director of Public Prosecutions (CDPP) is an independent prosecuting service and government agency within the portfolio of the Attorney-General of A ...
decided there was insufficient evidence and charges were not pursued.
In 2009, the Supreme Court of New South Wales
The Supreme Court of New South Wales is the highest state court of the Australian State of New South Wales. It has unlimited jurisdiction within the state in civil matters, and hears the most serious criminal matters. Whilst the Supreme Court ...
found that directors had misled the stock exchange in relation to James Hardie's ability to fund claims. They were also banned from serving as board members for five years. Former chief executive Peter Macdonald was banned for 15 years and fined $350,000 for his role in forming the MRCF and publicising it. The former directors, excepting Macdonald, appealed and the New South Wales Court of Appeal
The New South Wales Court of Appeal, part of the Supreme Court of New South Wales, is the highest court for civil matters and has appellate jurisdiction in the Australian state of New South Wales.
Jurisdiction
The Court of Appeal operates pursu ...
subsequently overturned the ruling against these directors in 2010. ASIC appealed against the ruling in the High Court of Australia in October 2011. In May 2012 the High Court upheld the 2009 New South Wales court decision and found that seven former James Hardie non-executive directors did mislead the stock exchange over the asbestos victims compensation fund.
In August 2019, Mathew Werfel, a DIY
"Do it yourself" ("DIY") is the method of building, modifying, or repairing things by oneself without the direct aid of professionals or certified experts. Academic research has described DIY as behaviors where "individuals use raw and sem ...
handyman from Adelaide
Adelaide ( ) is the capital city of South Australia, the state's largest city and the fifth-most populous city in Australia. "Adelaide" may refer to either Greater Adelaide (including the Adelaide Hills) or the Adelaide city centre. The dem ...
, won $3 million in a compensation case against James Hardie. Werfel was exposed to asbestos while pulling down fences and renovating two homes between 1990 and 2000, and was diagnosed with testicular cancer
Testicular cancer is cancer that develops in the testicles, a part of the male reproductive system. Symptoms may include a lump in the testicle, or swelling or pain in the scrotum. Treatment may result in infertility.
Risk factors include an ...
in 2017. James Hardie's products no longer contain asbestos, but Werfel's lawyer claimed the company should have done more to alert the public to the existence of asbestos in its old products, which were used in older homes.
In 2021, James Hardie was vindicated after a New Zealand court dismissed a lawsuit claiming Harditex cladding caused weathertightness problems in New Zealand homes. The judge found that bad building methods rather than James Hardie products caused the problems.
Timeline
Timeline of key events from the ''Devil's Dust
''Devil's Dust'' is a two-part Australian television docu-drama mini-series on the ABC which first screened in 2012. Based on journalist Matt Peacock's 2009 book '' Killer Company'', ''Devil's Dust'' was researched and developed by producer S ...
'' TV program:
* 2004: James Hardie CEO Peter MacDonald resigns, with a resignation payment of $9 million.
* February 2007: ASIC files court proceedings against the James Hardie board as it "failed to act with requisite care and diligence" when they assured investors that the Medical Research and Compensation Foundation (MRCF) was fully funded.
* February 2007: James Hardie shareholders, overwhelmingly approve a "compensation deal for asbestos victims worth $4 billion over the next 40 years". Meredith Hellicar, Chairwoman, resigns.
* August 2007: Oncologist Professor Stephen Clarke diagnoses Banton with peritoneal mesothelioma, which is usually fatal within six months. Bernie files a new suit of exemplary damages against a former James Hardie subsidiary now part of the new Asbestos Injuries Compensation Fund. Judge John O'Meally (President of the Dust Diseases Tribunal) rules in favour of Banton, but the fund contests the judgement.
* November 2007: Gravely ill, Banton gives court evidence from his bed at Concord Repatriation General Hospital
Concord Repatriation General Hospital (abbreviated CRGH), commonly referred to as Concord Hospital, is a major hospital in Sydney, Australia, on Hospital Road in Concord. It is a teaching hospital of Sydney Medical School at the University of ...
. James Hardie make an offer of settlement. Compensation for Banton's "terminal mesothelioma is from the Asbestos Injuries Compensation Fund, the trust he fought to set up in 2004". Banton dies at home (on 27 November) aged 61 surrounded by his family and close friends.
* September 2009: Journalist Matt Peacock releases his book Killer Company.
* May 2012: The High Court of Australia finds that seven directors of the James Hardie breached their duties by approving the company's release of a misleading statement to the stock exchange that the MRCF was fully funded.
See also
* Asbestos and the law
The mineral asbestos is subject to a wide range of laws and regulations that relate to its production and use, including mining, manufacturing, use and disposal. Injuries attributed to asbestos have resulted in both workers' compensation claims a ...
* Australian Blue Asbestos
* Armley asbestos disaster
References
Bibliography
*
*
*
External links
James Hardie
James Hardie, US
NSW Dust Disease Tribunal
{{Authority control
Asbestos disasters
Auto parts suppliers of Australia
Building materials companies of Australia
Manufacturing companies based in Dublin (city)
Companies of the Netherlands
Companies listed on the Australian Securities Exchange
Companies listed on the New York Stock Exchange
Dual-listed companies
1888 establishments in Australia