Asbestos claims – no insulation from a dusty business

As a report reveals deadly asbestos is still being used in many  Japanese household items, the fibres of legal insulation look to be unravelling.

A few months ago, Ethical Corporation predicted a legal storm over asbestos might be about to hit Asia. Developments in Japan suggest the clouds are indeed getting darker.

Alarm bells started ringing in 2003 when the US government paid 12 Japanese workers $1.8 million after the workers sued for being exposed to asbestos while working on US military bases in Japan from the 1950s. The US paid a further $1.75 million to 26 workers in August this year on the same basis.

But there is only so far you can blame foreigners when local companies and officials have apparently been complicit in a cover-up of asbestos dangers and liabilities for decades. Now Japan is going to have to pay big time. And it knows it.

In September, a Japanese government report revealed that asbestos was still being used in at least 19 common household items. These include bicycle parts made by Bridgestone, motorbikes made by Yamaha, refrigerators made by Hitachi and Mitsubishi, water heaters made by Tankara, hairdryers made by Toshiba, and home heaters made by Daiken Denki.

The report prompted much hand-wringing, not the least among Japan’s construction industry, which admitted that asbestos-laced roofing tiles made between 1971 and 2003 were still out there. Estimates suggest these tiles, made mainly by Kubota and Matsushita Electric Works, are on the roofs of as many as 20% of Japanese homes. That means about five million homes across the country have the silent iller sitting on their roofs.

Yes, we were lax

The incontrovertible fact that asbestos use is still widespread in Japan underlines a concern many have had for some time over the looming legal liabilities in Asia connected with asbestos.

Japan’s propensity to gain strategic footholds in many Asian countries via direct investment and development projects means Japan’s asbestos recklessness may have been extended all over Asia.

It is a good sign that so far both government and corporate leaders seem to be taking action and admitting past errors – only a few years ago a government report that highlighted the commonality of asbestos would never have seen the light of day. But questions have been raised about whether the reaction is fast enough or generous enough.

The Koizumi government, recently returned to the Diet with an increased majority after a snap election victory, is set to introduce  bill early next year that will set the parameters for compensation to asbestos victims. The bill is expected to cover compensation for individuals who have lived near factories using asbestos and for families of victims.

At the same time, the Finance Ministry is aiming to treble its asbestos clean-up fund to about $14 million in 2006. The funding is proposed to be for training doctors to detect asbestos-related illnesses, to introduce better safety and demolition standards, and for increased employee health checks.

This amount seems a little short of the mark, given the widespread nature of the problem. While the government reports only about 6,000 cases of deaths from mesothelioma, an asbestos-related lung disease, before 2003, it has only been keeping records since 1995.

Cover-up

Certain members of the private sector have been proactive in handling asbestos claims against them. One of the more prominent has been Kubota, the 115-year-old Osaka-based diversified industrials company.

Recently, the company admitted it had made payments of up to $270,000
each to “dozens” of families stricken with asbestos illnesses as “condolence money”, according to local media reports. The company told reporters it made the payments to head off litigation that had been increasing since 2001. It was subsequently found that other companies had done the same, following Kubota’s lead.

At the same time, muted admissions of asbestos-related deaths among workers started appearing.

But while this move and the many mea culpas that have been trotted out by the corporate sector since may look positive at one level, the reality may be less savoury. History is not on the side of the big companies.

A major cover-up has been exposed that has incriminated some of Japan’s major asbestos producers and top-level bureaucrats. The scandal involves the quashing of a proposed parliamentary bill in 1992, which would have led to a ban on the use and sale of asbestos. The lobbying effort against the bill was led, say investigators, by the industry-funded Japan Asbestos Association.

The government did eventually ban the two most toxic forms of asbestos in 1995, some 15 years after it was widely known they were deadly.

Environment minister Yuriko Koike said: “We need to reflect on some points in a straightforward manner. I believe there were problems such as [bureaucrats] tending to protect their own turf.”

That may be a considerable understatement.

Tick … tick …

The pattern of previous Japanese scandals seems to be re-emerging in this case. First the cover-up, then the denial, then the discovery and publicisation of the cover-up, admissions of guilt, followed by deep bows and shamed faces displayed by those involved, amid the flashing bulbs of a media frenzy. Resignations and lawsuits generally provide the codas. Such fates may yet befall the protagonists here.

But, if the personal ramifications for those involved looks grim, the future for some of the companies embroiled in the fiasco looks even darker.

Asbestos-related diseases can take 40 years to become active. Lawyers will be salivating at the opportunities presented by widespread use of the material, the emotive appeal of the issue, and the deep pockets of those who have knowingly used and sold it.

Civil networks such as the Tokyo-based Asbestos Center are also becoming more active as the issue widens.

As the decades unfold, this can only get uglier. Overseas workers who have been exposed to asbestos via Japanese companies only add to the possibilities. Recently, one country where it is alleged considerable dumping of asbestos has taken place, the Philippines, has set up a high-profile advocate group to publicise the issue and to pursue compensation. Many more will likely pop up.

As with high-profile asbestos litigation outbreaks in the US and Australia, the dust is not yet settling.

It will be well worth watching whether the payments already made, in something of a panic by Japanese companies, to asbestos victims become a bottom line or a ceiling in the coming government bill, or indeed whether there will be any such metrication of the liability. The government has intimated it will present a comprehensive compensation package. But, given the US government’s successful capping of asbestos claims, there is precedent for the Diet to do the same, particularly now that most dissident elements have been trounced in September’s election.

Also at issue will be the extent to which Japanese companies go beyond the law and take more direct and immediate responsibility for their actions. Past scandals have proven that Japan Inc is not averse to some corporate responsibility principles. Certainly, companies will need more than umbrellas for this storm. – http://www.ethicalcorp.com/content.asp?ContentID=3942