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Public Health Risk Warnings on Legacy Asbestos

Introduction

The prior report discussed the findings of our household survey research. This survey asked Australians the following questions:

  • Is asbestos dangerous to health?  
  • What level of exposure to asbestos is dangerous?
  • What is the most harmful effect of asbestos exposure?
  • How many Australians die each year from asbestos-related diseases?[ii]

The results of this survey demonstrated an enormous gap between public knowledge and the harsh realities. We concluded that the findings are consistent with inadequate public information, education, and warnings in Australia on asbestos threats and consequences.

This paper considers the consistency of the views and beliefs of the public with existing public heath guidance.

There have been no nationally coordinated mass media public health campaigns that highlight and explain the risks of exposure to legacy asbestos in Australia.[iii] Our research suggests that federal and state public health communications on asbestos risks are presently restricted to online guidance and fact sheets, and occasional messages through social media channels and community newspapers.

The existing online public health guidance includes the following:

  • Environment Health Standing Committee, enHealth, Asbestos: A Guide for Householders and the General Public (February 2013)(“The Guide”)
  • NSW Government, Asbestos Fact Sheet for Home Owners and Tenants (March 2019) (“NSW Factsheet”)[v]

Public Health Guide

The Environment Health Standing Committee, enHealth, Asbestos: A Guide for Householders and the General Public (February 2013) is the primary public health guidance directed at householders by a federal health body. This Guide states upfront that it is a risk management document,[vi] and its content categorises the risks of asbestos exposure in specified circumstances as very low, low, moderate, high, or extreme.

In the foreword of the Guide, the chief medical officer confirms that there is no safe level of exposure to asbestos and strongly advises householders to engage experienced and licensed professionals to undertake home renovations where asbestos is present.[vii]

The introduction of the Guide refers briefly to the possibility of asbestos-related disease and death from asbestos exposure, with an unsourced general comment that the health impacts from asbestos are well documented. Asbestos-related lung cancer is then provided as an example, with an emphasis on the duration of exposure.[viii]

there is no safe level of exposure to asbestos and strongly advises householders to engage experienced and licensed professionals to undertake home renovations where asbestos is present.[vii]

asbestos-health-risks

The main body of the Guide is 34 pages long, but the nature and levels of asbestos-related fatalities are not mentioned throughout.

The Guide describes mesothelioma as a “rare” form of cancer, with 90 percent of patients ‘having a confirmed history of significant exposure’.[ix] The terms “rare” and “significant exposure” are not explained.[x]

Occasional exposure to asbestos fibres (including during unsafe home renovation or demolition next door) is categorised as a low risk to life, while frequent exposure to asbestos fibres (for example when builders or tradespeople use unsafe techniques) is characterised as high risk.[xi]

The Guide states that although ‘there is no absolutely safe level of exposure to asbestos fibres, occasional exposure to low levels of fibres poses only a low risk to your health.’[xii]

The Guide indicates that a ‘very small number of asbestos related disease cases occur each year in people that have not worked with asbestos products.’[xiii] The phrases “a very small number” and “people that have not worked with asbestos” are left vague and unexplained.

The Guide categorises the general risk to householders from asbestos as very low in normal circumstances.[xiv]

The Guide acknowledges that asbestos fibres can be released as products age and weather but suggests this is not a health problem because the fibres are dispersed, diluted, and washed away.[xv]

The risk of a home renovator engaged in unsafe removal with occasional exposure is later tabulated in the Guide as medium risk.[xvi] While a concession is made that unsafe handling of asbestos in the home may have contributed to asbestos-related disease cases, the Public Health Guide notes that it is difficult to determine the exact cause in these instances.[xvii]

One of the highlighted case studies in the Guide suggests that a person with a damaged corrugated fibro roof should have the roof replaced ‘when he can afford it’.[xviii]

2. The NSW Asbestos Factsheet for Homeowners and Tenants

The NSW Factsheet recommends that if ‘the house contains bonded asbestos products that are in good condition, it is best to leave them alone but check them from time to time for any signs of damage or deterioration.[xix] The NSW Factsheet also advises renovators to use a licensed asbestos removalist when in doubt about the existence of asbestos in one’s home.[xx]

3. Other Official Guidance

Our researchers found examples of public messaging within public guidance and advice and from public health officials or experts in Australia indicating the following:

  • Exposure to asbestos does not always result in asbestos related disease.[xxi]  
  • We do not know why some people who are heavily exposed to asbestos do not develop disease and why others with apparently limited exposure do.[xxii]  
  • Asbestos discovered in the community is “safe”, “low risk” or an “acceptable risk”.[xxiii]
  • Evidence of deaths from mesothelioma caused by or linked to home renovations is limited.[xxiv]
  • There has been no ‘noticeable increase by population of mesothelioma … but this is something we should keep an eye on.[xxv]
  • The general incidence rate of mesothelioma has not increased.[xxvi]

4. Asbestos Warnings or Signage

The wording on asbestos warning signs generally includes the words “danger” and sometimes refer to the risks of lung disease or cancer. We found no evidence of asbestos warning signs that explicitly warn that exposure to asbestos can be deadly.

asbestos-health-risks

This legal finding is seminal, as there have been no nationally coordinated large scale asbestos risk or public health awareness campaigns conducted in Australia.[xliii] Private discussions with people suggest the rationales underlying this inaction centre on:

  • An inability to agree on the specific nature of the appropriate warnings to be given,
  • The difficulties in managing the public response, including the risk that panic or hysteria may ensue, and
  • Expected pressure from the public to resolve or respond to legacy asbestos risks when options to do so are costly.[xliv]

These rationales lack credibility and prudent public health and safety considerations when the full risks and consequences of legacy asbestos are understood. Mass public warnings or campaigns that explain the specific risks of legacy asbestos in homes and the appropriate precautions are long overdue and are vital to prevent unnecessary mass deaths from avoidable diseases.

Chief Justice Kourakis and Justices Nicholson and Livesay highlight the problems arising from qualified and guarded public communications on asbestos risks. They indicate that if James Hardie had previously acknowledged the risks of occasional exposure during home renovations unequivocally and very publicly, this would have allowed government and non-government agencies, the public health and safety authorities, and the media to be less guarded in their commentary to the public.[xlv] This judicial analysis is well supported by our empirical research.

Our Summary & Views

The harms caused by James Hardie and CSR are at the pointy end of any debates on corporate sustainability and a social license to operate, as they involve large numbers of ongoing fatalities that should never be forgotten as mere statistics. As such, the zero harm, sustainability, safety, and social license claims made by James Hardie and CSR require deep reflection.

The continuing economic, environmental, and societal impacts resulting from the prior sale of asbestos products in Australia are immense. We predict that annual fatalities from asbestos-related diseases will be in the thousands for the foreseeable future and tens of billions of dollars will be required to fully remediate or remove legacy asbestos products from properties across Australia.

Yet, discussion of asbestos matters in the 2020 report of James Hardie is limited to a box that highlights the reported funding to the AICF and CSR simply notes that all valid asbestos claims are met on an equitable basis. This commentary in the annual reports of James Hardie and CSR and the actions taken by these companies in response to the asbestos crisis have clearly not addressed the full extent of the societal harms caused by their prior activities.

csr-asbestos

Regardless of the board and executive motivations, the highlighted responses from James Hardie and CSR do not satisfy the full lifecycle and sustainability claims made or a reasonable notion of a social license to operate. The payment of compensation (when in fact this occurs) is merely an emergency response once the harm has occurred,[xlvi] with the gravity of harm being the most extreme possible – the end of life. Nor can James Hardie or CSR claim that workplace safety is the top priority when the single largest cause of workplace deaths in Australia is almost certainly asbestos-related diseases.[xlvii]

As highlighted in prior reports, measures taken by James Hardie and CSR to warn Australian householders about the risks of legacy asbestos appear to be limited to minor contributions to a single asbestos awareness website.[xlviii] The efficacy of this website has seemingly been minimal,[xlix] because it assumes that Australians are sufficiently aware of the dangers of asbestos to proactively search for and locate this advice, and then have the capacity to appropriately respond. Our household research suggests these assumptions are poorly founded.

Without further actions and commitments to prevent ongoing fatalities from asbestos-related diseases, notions of sustainability for James Hardie and CSR are arguably more about public relations than a substantive driver of behaviour. Bakan refers to such strategies as masks that corporations use to improve their reputation and hide their self-interested natures from public scrutiny.[l]

James Hardie indicates that following discussions with its stakeholders, it will in future report against the GRI Sustainability Reporting Standards. These standards require disclosure of impacts the company has on the economy, the environment, and or society. It will be interesting to see if compliance with these standards will encourage (or require) James Hardie to report on the impacts of legacy asbestos beyond actuarial compensation matters.

Most investors of James Hardie and CSR probably know something about the history of asbestos in Australia and the compensation schemes. The extent to which they comprehend the magnitude of the continuing risks, deaths, and costs associated with legacy asbestos is less clear.

James Hardie and CSR would no doubt like to move on with the least possible damage to their commercial outcomes and reputation, but the real question is whether this is assessed on a short or longer-term basis. While the funding of mass publicity campaigns and warnings on the risks of in situ asbestos and further contributions to research of asbestos related diseases may not prima facie fit with their short-term profit objectives, such investments would make longer term commercial sense by assisting to reduce the number of future tort claimants[li] and by enhancement of their longer-term reputations and social licenses. As emphasised in the Werfel Case, ‘a corporation may accept that it is necessary to take some steps to ensure long-term reputation, and sustainable profits, at the expense of its business short term profits.’[lii]

As discussed in our prior report, the AICF agreement prevents or makes it difficult to legally require funding from James Hardie to support the identification and removal of asbestos from homes and other properties or to recover other economic losses.[liii] But there are no legal or other barriers that prevent James Hardie or CSR from taking further voluntary actions and or from making additional contributions in accordance with their stated sustainability principles when doing so enhances their long-term brand and reputation.[liv]

For James Hardie and CSR to achieve their promulgated sustainability objectives, we suggest urgent additional funding and actions are required to reduce the societal harms flowing from legacy asbestos. Most critically, we encourage the boards of these companies to do more to minimise or prevent deaths resulting from exposure to legacy asbestos in homes. Further, we call for investors and stakeholders of these companies who are concerned about the sustainability and reputation of these businesses to actively work together to achieve these aims.

In our view, James Hardie and CSR ought, at a minimum, to provide funding to pay for:

  • Public health campaigns to properly warn all Australians about the risk and impacts of legacy asbestos and
  • Medical research to prevent asbestos related diseases or to mitigate the consequences of these diseases.

Further, James Hardie and CSR ought to fully acknowledge their roles in creating the asbestos crisis and the continuing risks and harms of legacy asbestos. Such public acknowledgement is critical, because public discussion on, and warnings about, legacy asbestos in Australia remain heavily guarded, especially on the scale of related fatalities and the risks of brief, occasional and low dose exposure.[lv]

Asbestos Awareness Australia Ltd

Asbestos Awareness Australia Ltd is a registered not-for-profit company limited by guarantee, is a registered charity, and has endorsement from the Australian Taxation Office as a gift deductible recipient. The company was set up:

To achieve these objectives, the company provides public access to widely sourced information on asbestos risks and impacts, including the associated medical, legal, and political debates.

[i] Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd (2016) 118 ACSR 124, 151 [123] (Wigney J).

[ii] We define “harms” to include any adverse financial or non-financial impacts on society resulting from a company’s decisions or conduct. This definition is consistent with well-established corporate sustainability frameworks and is considerably more expansive than “damages” that might be compensable under law: GRI Standards. In these standards and in our content, “impact” is defined broadly to include the effect an organization has on the economy, the environment, and or society, which in turn can indicate its contribution (positive or negative) to sustainable development: GRI, Consolidated Set of GRI Sustainability Reporting Standards 2020 44.

[iii] See, eg, Adolph A Berle, ‘Corporate Powers As Powers In Trust’ (1931) 44 Harvard Law Review 1049; E Merrick Dodd, ‘For Whom Are Corporate Managers Trustees’ (1932) 45 Harvard Law Review 1145.

[iv] See, eg, Governance Institute of Australia, ‘Shareholder Primacy: Is There a Need for Change?’ (Discussion Paper 2014); Jean Du Plessis, ‘Corporate Social Responsibility And “Contemporary Community Expectations”’ (2017) 35 Company and Securities Law Journal 30; Pamela Hanrahan, ‘Corporate Governance in the “Exciting Times” (2017) 32 Australian Journal of Corporations Law 142.

[v] Minerals Council of Australia, Enduring Value: The Australian Minerals Industry Framework for Sustainable Development (June 2005).

[vi] See, eg, Governance Institute of Australia, ‘Shareholder Primacy: Is There a Need For Change?’ (Discussion Paper 2014) 8; Sarah Baker and Maged Girgis, ‘A New COP on the Beat -Heightened Expectations for Corporate Sustainability Governance and Disclosure’ (Minter Ellison Publication, June 2016).

[vii] Commonly referred to as the GRI Standards.

[viii] See https://www.globalreporting.org/.

[ix] Money Management, ‘Navigating Responsible Investing’ (12 March 2018) viewed 1 July 2021 at https://www.moneymanagement.com.au/features/expert-analysis/navigating-responsible-investing.

[x] Money Management, ‘Navigating Responsible Investing’ (12 March 2018).

[xi] Money Management, ‘Navigating Responsible Investing’ (12 March 2018).

[xii] For a summary outline of studies that empirically examine the links between commercial outcomes and the sustainability practices and reporting of corporations, see Gill North, ‘Corporate Sustainability Practices and Regulation: Existing Frameworks & Best Practice Proposals’ in Jean du Plessis and CK Low (eds), Corporate Governance Codes for the 21st Century (Springer Publishing, Switzerland, 2017). See also Gill North, ‘Corporate Management & Communication of Environmental and Social Risks in Australia: Pressures are Mounting’ (2018) 33 Australian Journal of Corporate Law 227.

[xiii] See, eg, Gill North, ‘Corporate Management & Communication of Environmental and Social Risks in Australia: Pressures are Mounting’ (2018) 33 Australian Journal of Corporate Law 227. See also Paul von Nessen and Abe Herzberg, ‘James Hardie’s Asbestos Liability Legacy in Australia: Disclosure, Corporate Social Responsibility and the Power of Persuasion’ (2011) 16 Australian Journal of Corporate Law 1 [79]; Edwina Dunn, ‘James Hardie: No Soul to be Damned and No Body to Be Kicked’ (2005) 27 Sydney Law Review 339.

[xiv] A risk is foreseeable in law if it is not ’farfetched or fanciful’: Wyong Shire Council v Shirt (1980) 146 CLR 40, 47-48 (Mason J).

[xv] See, eg, Corporations Act 2001 (Cth) ss 180, 299, 299A; ASX Listing Rule 4.10.17; ASX Corporate Governance Council, ASX Corporate Governance Principles and Recommendations (4th ed, February 2019) Recommendation 7.4. Recommendation 7.4 states that a listed entity should disclose whether it has any material exposure to environmental or social risks and if it does, how it manages or intends to manage those risks.

[xvi] See, eg, Paul Redmond, ‘Directors’ Duties and Corporate Social Responsiveness’ (2012) 35 University of New South Wales Law Journal 317; Gill North, ‘Corporate Management & Communication of Environmental and Social Risks in Australia: Pressures are Mounting’ (2018) 33 Australian Journal of Corporate Law 227.

[xvii] ASIC v Rich (2009) 75 ACSR 1, 62 [713].

[xviii] See, eg, Australian Securities and Investments Commission v Cassimatis [No 8] (2016) 336 ALR 209, 301-302 [480-484].

[xix] See, eg, Gill North, ‘Corporate Management & Communication of Environmental and Social Risks in Australia: Pressures are Mounting’ (2018) 33 Australian Journal of Corporate Law 227.

[xx] James Hardie, 2020 Annual Report 20-21. The annual report of James Hardie for the year to 31 March 2021 is on Form 20-F. Form 20-F is the required reporting format under disclosure law in the United States and is generally limited to financial information. The 2021 Sustainability Report from James Hardie was not available when our report was released.

[xxi] James Hardie, 2020 Annual Report 18-19.

[xxii] James Hardie, 2020 Annual Report 18-19.

[xxiii] James Hardie, 2020 Annual Report 18. Asbestos gross cash outflows for the 2021 fiscal year were A$153.7 and as at 31 March 2021, the estimated aggregate asbestos liability was US$1,135.8mn: James Hardie 2021 Annual Report on Form 20-F 101, 110.

[xxiv] James Hardie Compensation Agreement [20].

[xxv] See, eg, Greg Combet, ‘The Bernie Banton Story’ in Lenore Layman and Gail Phillips (eds), Asbestos in Australia (Monash University Publishing, 2019) “Asbestos in Australia”.

[xxvi] James Hardie Compensation Agreement. Recital A(m) indicates that James Hardie Industries asserts that a principal purpose of entering into this deed is to avert threats from the NSW Government, the federal government and other state and territorial governments to legislatively impose liability upon one or more members of the group in relation to asbestos related personal injury liabilities in excess of the available assets unless the group reached a voluntary settlement. The NSW government had drafted legislation to wind back Hardie’s move to the Netherlands as a means to force it to pay compensation: Matt Peacock, Killer Company (Harper Collins Publishers, 2009) 284.

[xxvii] James Hardie Compensation Agreement Schedule 3.

[xxviii] KPMG, Valuation of Asbestos Related Disease Liabilities of Former James Hardie Industries Ltd Entities to be Met by the Asbestos Injuries Compensation Fund (19 May 2020). Total mesothelioma claims though the AICF reached a record 430 in 2019 and diagnoses recorded by the Australian Mesothelioma Registry during a similar period were 724: Australian Government, Australian Institute of Health and Welfare, Mesothelioma in Australia 2019 (published August 2020).

[xxix] PJ Landrigan, ‘The Third Wave of Asbestos Disease: Exposure to Asbestos in Place. Public Health Control. Introduction.’ (1991) 643 Annuls of the New York Academy of Sciences xv-xvi; Arthur W Musk, Nicholas H de Klerk, and Anna Nowak, ‘Asbestos Exposure: Challenges for Clinicians’ (2016) 204 Medical Journal of Australia 48.

[xxx] KPMG, Valuation of Asbestos Related Disease Liabilities of Former James Hardie Industries Ltd Entities to be Met by the Asbestos Injuries Compensation Fund (19 May 2020) 24. Defined by KPMG as ‘claims for personal injury and / or death arising from asbestos exposure during home renovations by individuals or to builders involved in such renovations.’

[xxxi] KPMG, Valuation of Asbestos Related Disease Liabilities of Former James Hardie Industries Ltd Entities to be Met by the Asbestos Injuries Compensation Fund (19 May 2020) 27. The KPMG statistics exclude cases settled by other schemes and uncompensated victims.

[xxxii] KPMG, Valuation of Asbestos Related Disease Liabilities of Former James Hardie Industries Ltd Entities to be Met by the Asbestos Injuries Compensation Fund (19 May 2020) 23, 27-28.

[xxxiii] KPMG, Valuation of Asbestos Related Disease Liabilities of Former James Hardie Industries Ltd Entities to be Met by the Asbestos Injuries Compensation Fund (18 May 2021).

[xxxiv]Jock McCulloch, Asbestos: Its Human Cost (1986, St Lucia, Queensland University Press) 18.

[xxxv] CSR Ltd, Annual Report 2019 19.

[xxxvi] CSR Ltd, Annual Report 2021 17

[xxxvii] CSR Ltd, Annual Report 2020 9.

[xxxviii] CSR Ltd, Annual Report 2020 15.

[xxxix] CSR Ltd, Annual Report 2021 91.

[xl] CSR Ltd, Annual Report 2021 91. Page 91 indicates that as of 31 March 2021, the provision for asbestos product liability decreased to $231 million.

[xli] Amaca Pty Ltd v Werfel [2020] SASCFC 125 “Werfel Case”.

[xlii] Werfel Case [313, 317, 319].

[xliii] This fact was confirmed by the ASEA in an email to the authors. Existing public health and safety warnings on legacy asbestos threats are restricted to online guidance sheets and occasional messages through social media channels and community newspapers.

[xliv] These were common oral responses given during telephone discussions with persons involved with asbestos-related matters. None of these persons wish to be named or to go on the record.

[xlv] Werfel Case [231].

[xlvi] This is sometimes referred to an ambulance at the bottom of the cliff.

[xlvii] See T Driscoll, D Nelson, K Steenland, James Leigh, M Concha-Barrientos, M Fingerhut and A Pruss-Ustun, ‘The Global Burden of Disease Due to Occupational Carcinogens’ (2005) 48 American Journal of Industrial Medicine 419. This paper finds that lung cancer and mesothelioma account for the most deaths and DALYs caused by workplace exposure to carcinogens. See also World Health Organization, ‘WHO Calls for Prevention of Cancer through Healthy Workplaces’ (Media release 27 April 2007); The Mesothelioma Center (US), ‘Asbestos-Related Diseases’ viewed 1 July 2021 at https://www.asbestos.com/mesothelioma/related-diseases/; SafeWork Australia, ‘Fatality Statistics’ viewed 30 June 2021 at https://www.safeworkaustralia.gov.au/statistics-and-research/statistics/fatalities/fatality-statistics. The SafeWork Australia web page highlights the fact that 3,571 workers were fatally injured while working from 2003 to 2018 (equating to 250 deaths a year). The commentary notes that this figure excludes deaths because of disease, such as cancers, without explaining that asbestos-related cancers are manmade and result from corporate activities, and that tens of thousands of deaths from asbestos related diseases have occurred over the same period from occupational exposure.

[xlviii] Asbestos Awareness.com.au, ‘Don’t Play Renovation Roulette’

[xlix] See Werfel Case [281-286].

[l] Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power (Constable & Robinson Ltd, 2004) 28, 57, 62-63. See also Ronen Shamir, ‘The De-Radicalization of Corporate Social Responsibility’ (2004) 30 Critical Sociology 699.

[li] See, eg, Werfel [317].

[lii] Werfel Case [293].

[liii] James Hardie Compensation Agreement.

[liv] See, eg, Paul Redmond, ‘Directors’ Duties and Corporate Social Responsiveness’ (2012) 35 University of New South Wales Law Journal 317; Gill North, ‘Corporate Management & Communication of Environmental and Social Risks in Australia: Pressures are Mounting’ (2018) 33 Australian Journal of Corporate Law 227.

[lv] For discussion on the guardedness and qualifications of public warnings on asbestos risks, see Werfel Case [231][337]. See also Asbestos Awareness Australia Ltd, Public Health Risk Warnings On Legacy Asbestos (June 2021) available for download

at https://digitalfinanceanalytics.com/blog/when-is-a-warning-not-a-warning/

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