Compensation for James Hardie Victims
Reverend the Hon. Dr GORDON MOYES: I ask the Special Minister of State a question without notice. Commissioner David Jackson handed down his findings to the New South Wales Government today—and we note the Minister’s reply to an earlier question—as a result of the six-month inquiry into the massive underfunding of James Hardie’s asbestos disease compensation. The report found that James Hardie had an obligation to meet the asbestos liabilities. What plans does the New South Wales Government have in place to prosecute those responsible as directors and executives for misleading and deceptive conduct and for relocating James Hardie’s assets offshore and to ensure that those assets are made available to the James Hardie asbestos claimants?
The Hon. JOHN DELLA BOSCA: Just so the honourable member is not confused about the process, there are two issues at hand: compensation and suggested actions against individuals. I will deal with the second issue first, because I think that was the substance of the question. There are three categories of action, one of which is potentially under our jurisdiction. The Attorney General, the Premier and I received a 1,000-page report this morning. Together with our officers, we have been examining these matters. No doubt some elements and issues will be the subject of more detailed statements by the Attorney General and the Premier over the next couple of weeks.
One action that occurred was under the supervision of the Supreme Court’s examination of the separation of James Hardie under Federal corporations law. Many members have seen publicity about Justice Santow and the inquiry into James Hardie. Some people have misinterpreted that process as being a Supreme Court endorsement of what James Hardie did. Indeed, under current corporations law Justice Santow was required to examine whether the separation was legal and consistent with those laws. On the basis of the evidence presented to him, he found that it was.
Commissioner Jackson has brought into question some of the evidence and assertions made during the hearings. I am advised by the Attorney General that the Supreme Court will have to determine these matters and a number of possible actions in relation to those individuals or corporate personalities. That is one category of issues in relation to some of the executives and professionals who advise James Hardie. The second area that has attracted some attention is the criticism of some of the professional advice given to James Hardie: that it may have been partial and—I use the term generally—unethical. I refer to two professional companies—a firm of lawyers and a firm of actuaries. Those matters will be the subject of considerable public debate and may require consideration of regulatory or legislative change to the practice of those particular professions, but I put those in another category as well.
Third, there is the potential for criminal prosecutions against some of the management of James Hardie, in particular, the chief executive officer. That will be a matter for the Australian Securities and Investments Commission, which is the appropriate body to prosecute under the Commonwealth Corporations Law. The commission will have available to it the Jackson inquiry’s determinations. I am advised that inquiries have already commenced in relation to these matters and the commission will have its own statements. There is also a possibility—and there may be others after greater and more detailed examination of the report—of the prosecution of James Hardie for various breaches of the Fair Trading Act. This relates to the actions of James Hardie executive Peter Shafron, Senior Vice President Finance and Legal, and Peter Macdonald, Managing Director and Chief Executive Officer. Both allowed the use of an actuarial report from Trowbridge, a report that the inquiry found was wholly unsuitable for their purported purpose when assessing the likely life and financial capacity of the foundation. The commission noted that on the surface their actions were in contravention of the Trade Practices Act and section 42 of the New South Wales Fair Trading Act 1987. I have referred the matter to the Commissioner for Fair Trading for advice.
