Mesothelioma Victims Concerned about James Hardie’s Move to Ireland
After stating their move to the Netherlands from Australia was ineffective, James Hardie has announced intentions to move its headquarters to Ireland for tax benefits. The decision to move stems from changes between Dutch and U.S. tax laws and a dispute involving the U.S. Internal Revenue Service about whether James Hardie has “substantial presence” in the Netherlands.
Currently, a large portion of the company’s profits come from the United States and instead of keeping management stationed in the United States, James Hardie was being forced to have their management spend more time in the Netherlands in order to keep the tax costs low. As a result, the company felt they were unable to operate effectively in the United States.
The move has many asbestos victims worried about the company’s inability to add money to the Asbestos Injuries Compensation Fund, which was set up by the New South Wales government in 2006 to help victims of asbestosis and mesothelioma. In previous years, James Hardie manufactured building materials containing the toxic mineral asbestos, one of the proven causes of both asbestosis and mesothelioma.
The cost of the move to Ireland could reach as high as $71 million, which is money asbestos victims feel should be going into the fund. Since the U.S. housing market declined, James Hardie has suspended making payments to the fund due to a loss of $45.2 million in profits.
The fund’s CEO Dallas Booth expressed his concern about the move stating the fund would likely run out of money by early 2011 and would likely be unable to fulfill compensation payments.
Asbestos campaigner Karen Banton, whose husband Bernie passed away from malignant mesothelioma in 2007, questioned the move of James Hardie. “They say they can’t afford to pay compensation but apparently they can afford to move to Ireland, another country where they have no business. Every time they get a cold, they expect everyone to come to the rescue. It’s a lot of money that could otherwise go into the fund,” she said.
However, management of James Hardie believes the move will help long-term profits by allowing senior managers to spend more time in the United States. Currently, James Hardie is required to pay 35 percent of its free cash flow into the fund when profits reach certain levels.
James Hardie plans to complete the move by March next year, but has no immediate intention to move into the European building materials market. Chief executive Louis Gries mentioned that the company is working on a product for the European building market that was three to four years away from being finished.
Additional information about mesothelioma may be found through the Mesothelioma Center.
