Clapper, Patti, Schweizer and Mason

Earlier last month, James Hardie Industries, one of the world’s leading cement siding and backerboard producers, announced that it would be cutting funding of the asbestos fund created to help pay the legal and medical expenses of victims affected by the company’s asbestos containing products. 

The company admits that in the past—before the 1980’s ban on asbestos—it did use the dangerous carcinogen in some of its building materials.  In order to protect itself financially and to aid those suffering from diseases like mesothelioma, asbestosis, and lung cancer caused by the toxic mineral, the company created a special fund containing monies earmarked for those in need. 

Unfortunately for those who may yet face deadly diagnosis of disease, the amount of money the company will be paying into this fund will dramatically shrink this year.  That means that certain victims may find themselves without financial recourse if they are diagnosed with an asbestos disease in the near future.

The company’s United States headquarters are based in Mission Viejo, California, and the news came directly from the top.  The decreased funding is—the company spokesperson said—in response to a massive tax charge filed against the company.  The $32.6 million charge will cut the funds available for the Asbestos Injury Compensation Fund (AICF) by nearly $12 million in 2012 alone. 

Legally, Hardie Industries must pay 35% of its net cash flow to the AICF but the company has been falling behind as of late.  In fact, this isn’t the first time that taxation has been blamed for its inability to contribute sufficient amounts to the asbestos fund.  In July 2009 the company used the same excuse when it failed to make the necessary payments.

While legal requirements do mandate a certain amount be paid, the agreement does allow for unforeseen expenses which may adversely affect the company’s bottom line.  While that may assuage the guilty consciences of CEOs and CFOs, it is no consolation to those living in the shadow of a potential mesothelioma diagnosis.

While the use of asbestos containing products, such as those created by Hardie Industries, was severely restricted in the 1970’s, it wasn’t completely banned until 1989 when the EPA and the Clean Air Act cracked down on asbestos use. 

Mesothelioma can “hibernate” or remain unnoticed until symptoms become too severe to be overlooked.  In some case that latency period can last up to fifty years.  The very nature of asbestos diseases and mesothelioma means that even though the products which posed a danger were pulled off the market years ago, people may be living with undiagnosed cases. 

The company blames this financial crisis partially on the ailing U.S. economy, most notably the dramatic decrease in new and refurbished homes on the market.  The company made much less money last year and tried to protect itself by paying less tax.  Unfortunately for them, the IRS caught up with them and levied a fine because of the deficiency.  That financial gut punch is being passed on to those who can least afford it—mesothelioma victims and their families.