NO.101

JAMES HARDIE INVESTIGATIONS AND PROCEEDINGS

The Treasurer today announced that new legislation would be introduced this

week to facilitate a comprehensive investigation of matters arising from the

James Hardie Special Commission of Inquiry and any proceedings that may arise

from those investigations.

The Government remains of the view that James Hardie should honour its obligation

to compensate those victims who have a legitimate claim against James Hardie

for asbestos related disease.

The investigation of possible contraventions of the Corporations Act may be

impaired if the Australian Securities and Investments Commission (ASIC) and

the Commonwealth Director of Public Prosecutions (DPP) cannot obtain and use

material obtained by the Special Commission which is subject to claims of legal

professional privilege.

It is expected that many crucial documents will be subject to claims of privilege

by James Hardie. The transactions that will be the subject of investigation

are of a complex nature, and were the subject of extensive legal advice and

assistance. Materials documenting this advice may offer critical evidence as

to the purpose and nature of certain transactions. Such evidence may be unavailable

from any other source.

To address this concern, the new legislation will expressly abrogate legal

professional privilege in relation to certain materials allowing their use in

investigations of James Hardie and any related proceedings. If these reforms

are passed in the current sittings, ASIC and the DPP will be able to obtain

materials that would otherwise be subject to legal professional privilege and

use them for the purposes of James Hardie investigations and proceedings.

The legislation addresses a number of limitations of recent New South Wales

legislation that transferred control of the records of the James Hardie Special

Commission of Inquiry to ASIC, but fell short of addressing the legal impediments

to the use of those records in investigations or proceedings despite a request

from ASIC for it to do so.

CANBERRA

30 November 2004