Building materials company James Hardie has confirmed the compensation fund for its asbestos victims will probably face a shortfall in the next three years.
AAP reports that the Asbestos Injuries Compensation Fund (AICF) board has told James Hardie that it is likely to not have sufficient funds to pay out claims by 2017. This has come about because the number of claims has increased in recent times.
Furthermore, the AICF wants to enter into an approved payment scheme to cover the compensation claims. This would mean the company would pay money in instalments, rather than as a lump sum.
The AICF was the result of an agreement between James Hardie and the NSW government. It exists to compensate victims suffering from asbestos-related diseases such as mesothelioma.
In 2010, the NSW and Federal government’s set up a loan scheme to assure compensation payments would be met even if James Hardie did not have sufficient funds to do so. The tax payer-backed loans can be up to $320 million.
As the situation stands, it looks like the company will not be able to meet the payments without access to the loans.
James Hardie has come in for criticism for being in this position, as it has been able to pay shareholders dividends of almost $600m in the last two years.
Critics such as Senator Nick Xenophon have said that money should have gone to asbestos victims.