US Senate Panel Approves $140 Billion Asbestos Fund

The long-debated compromise bill, aimed at settling asbestos-related claims, is now going to the US Senate. It includes special provision for the victims of WR Grace, the notorious mining company. But it still allows the US Department of Defense exempt asabestos products "important for national security" from a blanket ban.

US Senate Panel Approves $140 Billion Asbestos Fund

Story by Susan Cornwell, Planet Ark

May 27, 2005

Washington - Legislation to create a $140 billion asbestos compensation fund was approved by the US Senate Judiciary Committee on Thursday, but there were immediate warnings it could face trouble on the Senate floor.

The committee voted 13-5 for the bill that would eliminate asbestos lawsuits and create a 30-year fund financed by companies facing litigation and their insurers. Victims could no longer sue, but would go to the fund for compensation.

Three members of the Senate's Republican majority, who supported clearing the bill from committee, warned they would insist on changes before voting for it on the Senate floor.

"I could not support this bill on the floor if it does not change," said Sen. John Cornyn of Texas. Arizona's Jon Kyl and Oklahoma's Tom Coburn echoed the sentiment.

"With the medical criteria we have here today, this fund will cost $60 billion a year (for claims)," Coburn warned. Kyl has expressed concerns about the fund's solvency, while Cornyn is worried about the allocation of expense among companies.

Asbestos fibers were used in building materials, auto parts and other products for decades, but are linked to cancer and other diseases.

Sen. Arlen Specter, the Pennsylvania Republican who chairs the Judiciary Committee and spent recent weeks making adjustments to attract votes, said he knew the bill faced continued challenges.

"We don't underestimate the difficulty of getting the bill through," said Specter, but said it had White House support.

The stocks of companies facing asbestos liabilities, which had risen strongly in recent days as the bill neared committee approval, closed mixed in trading following the vote.

Shares of bankrupt building materials maker Owens Corning closed just 3 cents higher at $4.93, while chemical maker W.R. Grace and Co.'s shares were unchanged at $11.00. USG Corp., another bankrupt building materials maker, closed down 3.1 percent at $46.84.

Many interest groups, such as insurers and some labor unions, oppose the current bill, and victims' groups dislike the fact they cannot opt out of the fund. Manufacturers and companies that acquired asbestos liabilities through acquisitions have generally been supportive.

Three Democrats joined 10 Republicans backing the bill. Sen. Patrick Leahy of Vermont, the ranking Democrat on the Judiciary Committee, thought it would pass the Senate, even though Democrats in the last Congress blocked a committee-backed version from coming up on the Senate floor.

"This is a far, far better bill , and has a far better chance of getting somewhere," Leahy said.

Some other Democrats on the committee were strongly opposed. Delaware Democratic Sen. Joseph Biden called the measure "a pig in a poke," saying there was not enough information about what companies would pay into the fund.

There were arguments in committee just before the final vote over whether to extend to other localities some special provisions for people sickened by asbestos in Libby, Montana.

W.R. Grace has been charged with conspiring to endanger the community in Libby and residents who meet special medical criteria would automatically be awarded $400,000 each.

Senators agreed that the fund's administrator would extend the special Libby provisions to other areas if a study showed similar contamination at other sites around the country that got material from Libby's asbestos-laced vermiculite mine.

But the panel rebuffed an attempt by South Carolina Republican Lindsey Graham to extend the Libby provisions without doing the study. Utah Republican Orrin Hatch said the cost of that could "kill the bill."

The disparity between treatment of Libby residents and other asbestos victims was cited by the Association of Trial Lawyers of America as a basis for a possible court challenge.

ATLA, whose members would see their attorney fees cut to five percent of awards from the fund, called the bill "underfunded, unfair, unworkable and likely unconstitutional."

FACTBOX - Key Provisions of US Senate Asbestos Bill

USA: May 27, 2005

WASHINGTON - Key provisions of a US Senate bill to take asbestos injury claims out of the courts and pay them from a $140 billion privately-financed fund.

FUNDING - Companies will pay $90 billion over 30 years based on prior asbestos expenditures and revenues. Insurers will pay $46 billion over 27 years. The bill assumes $4 billion will come from existing asbestos bankruptcy trusts.

MANAGEMENT - The Asbestos Injury Claims Resolution Fund will be managed by the Office of Asbestos Disease Compensation in the US Department of Labor.

AWARDS -- There are nine levels of awards, based on severity of illness. Payments range from $25,000 for breathing impairment up to $1.1 million for victims of mesothelioma, a particularly lethal cancer of the membrane lining the chest and abdominal cavities. Lung cancers start at $300,000. Medical monitoring is provided for claimants with asbestos exposure but no symptoms.

CRITERIA - Claimants must have at least five years of cumulative occupational exposure to asbestos, or "take-home" exposure of the same length of time. Cash recipients must have characteristic "markers" of asbestos exposure in their lungs.

Claims must be filed within five years of diagnosis. There are no limits on additional awards if the disease progresses.

COURTS - Asbestos claims that have not progressed to trial must go to the fund. People with urgent claims can choose to seek a court settlement, but cannot recover more than 150 percent of the equivalent fund award.

If the fund is not up and running in nine months, urgent claims can return to court. Other claims can return to court if the fund is not up and running in two years.

EXCEPTIONS - A claimant who does not meet the medical criteria can still apply. A medical panel would review the claim. The final decision is made by the administrator.

WORKERS COMPENSATION -- A fund payment will not affect a claim relating to workers' compensation or insurance payments.

MONTANA CLAUSE -- Residents of Libby, Montana, are exempted from having to show exposure if they have lived in the town or within 20 miles of it for 12 months prior to Dec. 31, 2004. Libby residents who meet certain medical criteria would automatically be awarded at least $400,000 each.

ATTORNEYS FEES -- Capped at 5 percent of final fund awards.

END OF THE FUND - The program cannot terminate before a review and the fund administrator has been given a chance to revise the program, such as by proposing new medical criteria. Upon termination, claims can return to court.

ASBESTOS BAN - Within a year of enactment, the fund administrator will develop regulations prohibiting the manufacture, processing or distribution of asbestos-containing products. The Department of Defense can exempt asbestos products important to national security.

Governments Urged To Join World ‘Asbestos Ban’ Trade Unions Call For Stop To Century-Long Carnage

Geneva, Switzerland

8 June, 2006

Global Unions will kick off a world ASBESTOS BAN campaign tomorrow in Geneva, where some 4,000 worker, employer and government representatives from around the world have gathered for the annual conference of the UN’s 178-member International Labour Organization (ILO).

Guy Ryder, General Secretary of the International Confederation of Free Trade Unions (ICFTU), will announce at a special event by Global Unions, the beginning of a country-by-country process that trade unions hope will bring an end to the death and destruction caused by asbestos, which continues to kill over 100,000 people per year throughout the world and inflicts suffering among millions more.

Global Unions have formally delivered a letter to every government attending the ILO Conference, asking them to become involved in nationally banning asbestos or in supporting a world ban on the commercialization and use of the product.

“We believe the evidence showing the dangers of asbestos to be irrefutable”, Ryder told governments, emphasizing that all forms of asbestos cause asbestosis, a progressive fibrotic disease of the lungs.

“Asbestos is a threat to everyone, not just workers”, Ryder said, “from children in schools, to young and old in private and public buildings where asbestos is present and to whole communities where it exists as a pollutant".

All asbestos can cause lung cancer, malignant mesothelioma and gastrointestinal cancers. It has been declared a proven human carcinogen by the international Agency for Research on Cancer of the World Health Organisation (WHO). Despite previous hopes that chrysotile asbestos might be safe, the preponderance of scientific evidence to date demonstrates that it too causes cancer, including lung cancer and mesothelioma.

“We will extend our appeal to employer, trade union and civil society organisations within every country to get involved in the ban, as a matter of urgency and human decency,” said Ryder. Trade unions at the ILO met last week to plan campaign activities until this time next year, when they hope the ILO will agree to work toward an all-out asbestos ban.

If planned properly, Ryder said that employment impacts of the ban could be offset through positive employment transition. “We believe that an adequate roster of tools and Instruments exists for any country to adequately deal with all aspects of asbestos transition, including the prevention of cancers, handling and banning of asbestos, promoting alternatives, as well as measuring and addressing social, employment and economic impacts,” he stated.

Government representatives and ILO dignitaries will join trade union and health experts at the Kick-Off tomorrow. Ryder said that nearly 40 countries have already banned asbestos and nearly 80 more that still actively use asbestos will be called upon to stop such activities.

“I am convinced that with targeted action from all us in each country, we will have a measurable effect on the implementation of our policy and on the realisation of an effective world ban of asbestos”, Ryder told ICFTU affiliates throughout the world in a letter sent to them last week about the campaign.

A trade union profile of each country’s status and performance relative to asbestos issues is available at: http://www.global-unions.org/pdf/ohsewpL_6.EN.pdf

Lucien Royer ICFTU/TUAC 26 av. De La Grande Armee 75017 Paris, France Email: royer@tuac.org

The harder you come, the lighter you'll fall. At least that's the opinion of an unlikely coalition of US environemntalists and businesses which is opposing the Specter bill to settle oustanding asbestos-related claims in the USA.

Enviros and Conservatives Unite Against Asbestos Trust Fund

Environmental News Service (ENS)

July 25, 2005

WASHINGTON, DC - Today, at the National Press Club, advocates from across the political spectrum joined to voice their common opposition to S.852, the Fairness in Asbestos Injury Resolution Act of 2005 or the FAIR Act of 2005. bill. Led by the Coalition for Asbestos Reform (CAR), this group of business and consumer interests united to demonstrate opposition to the bill introduced by Senators Arlen Specter, a Pennsylvania Republican and Patrick Leahy, a Vermont Democrat.

"The Specter/Leahy bill will create greater uncertainty for everyone except the few big companies who would be allowed to escape the billions of dollars in costs for which they are responsible," said Thomas O'Brien, chairman of CAR.

"The group that comes together today does not agree on much, but we agree on this - S.852 creates more problems than it solves," O'Brien said. "In fact, the only problem it solves is the liability problem for the biggest companies in America who bear the largest responsibility for the asbestos crisis. Virtually every other stakeholder in the asbestos situation is opposed to this bill."

The Specter-Leahy bill would establish a $140 billion trust fund to compensate victims suffering from asbestos-related disease. Senator Patrick Leahy, a Vermont Democrat, has described the legislation as a compromise that balances the interests of victims and businesses.

The effort to stem the rising tide of asbestos litigation cases clogging the nation’s courts began more than three years ago.

The bill is co-sponsored by Senators Orrin Hatch, a Utah Republican, and Mike DeWine and George Voinovich, both Ohio Republicans, as well as Dianne Feinstein, a California Democrat, and Max Baucus, a Montana Democrat.

But David Lascell of Hopeman Brothers Marine Interiors said at the Press Club today, "It's companies like Hopeman Brothers, that don't have big lobbyists in Washington and are just trying to stay afloat and keep people employed, that are going to pay the price for this disastrous legislation."

"The Specter Leahy bill is unfair and un-American and must be stopped," Lascell said.

Asbestos exposure can cause serious lung problems and cancer. Exposure to the fibrous mineral usually occurs by breathing contaminated air in workplaces that make or use asbestos. Asbestos is also found in the air of buildings containing asbestos that are being torn down or renovated.

Because it is heat resistant and easily woven, asbestos has been used in roofing shingles, ceiling and floor tiles, paper products, and asbestos cement products, friction products such as automobile clutch, brake, and transmission parts, heat-resistant fabrics, packaging, gaskets, and coatings. Some vermiculite or talc products may contain asbestos.

"S.852 was not written for present and future victims, but instead to bail out corporations who exposed workers and consumers to asbestos," said Linda Reinstein, executive director and cofounder of the Asbestos Disease Awareness Organization (ADAO).

According to Matt Kibbe, President of FreedomWorks, "Instead of fixing the problem, the Specter/Leahy Trust Fund approach - S.852 - abandons our court system in favor of a bureaucratic, tax-and-spend process. We're not ready to give up on the American legal system, and that's why FreedomWorks strongly opposes S.852."

"This asbestos bill is corporate welfare at its worst," said Jillian Aldebron, civil justice counsel for Public Citizen's Congress Watch. "It is designed to protect the companies most egregiously responsible for the asbestos crisis from paying their fair share. It fails hundreds of thousands of victims of asbestos exposure and their families and it fails all who believe in a just and fair society."

At a Senate Judiciary Committee hearing in April, Senator Leahy introduced S.852, saying, "This bill marks a significant improvement over similar efforts in past Congresses. We have traveled a long road from the early days of bills that provided no funding but would have imposed restrictive medical criteria. We have increased the resources devoted to providing fair compensation from last year’s $108 billion to $140 billion."

"The legislation provides higher compensation awards for victims and provides medical monitoring for all unimpaired asbestos victims," Leahy said, and it "will also provide medical screening for high-risk workers."

But CAR members were not persuaded. At today's event, CAR unveiled its broadcast advertising campaign against the legislation. Beginning this morning, two spots, entitled "Bailout" and "Real Conservative," began airing in the Washington, DC market and on the Fox News Channel. The initial advertising campaign will run through the week.

CAR is a group of small and medium sized businesses and their insurance companies committed to educating U.S. businesses and policymakers about the serious flaws in S.852.

The coalition mobilized in June to launch a major national campaign to explain the effect of the Specter/Leahy bill on hundreds of local businesses that face potential asbestos liability, most of whom are unaware of the devastating impact of $140 billion in new taxes S.852 authorizes to finance the Trust Fund mandated by the bill.

They say the companies supporting the Specter/Leahy bill are among the biggest businesses in America, and they "have billions of dollars riding on the bill's passage."

"Their deep pockets have allowed them to help write the legislation and disguise its negative consequences on several thousand smaller businesses and their employees, on victims of asbestos poisoning, and on American taxpayers," CAR said in its statement today.

Support for asbestos makes Canada an 'international pariah'

By Bea Vongdouangchanh, The Hill Times

August 29th 2005

Tory MP Chuck Strahl's stunning announcement that he has cancer should be a wakeup call for the government to support a global ban on asbestos, says NDP's Pat Martin.

Canada is an "international pariah" when it comes to supporting and dumping asbestos around the world, said NDP MP Pat Martin, who's calling for a global ban on the production, sale and use of asbestos, adding that the recent announcement of House Deputy Speaker and Conservative MP Chuck Strahl that he's battling a form of cancer most likely caused by asbestos exposure should be a wake up call for the government to start moving on the issue.

"Chuck's situation illustrates that this terrible, toxic substance is all around us and the government has its head in the sand for the sake of a few jobs in Quebec," said Mr. Martin (Winnipeg Centre, Man.). "They refuse to acknowledge that there's no safe level of exposure. It reaffirms my commitment that asbestos in all its forms should be banned."

Mr. Martin told The Hill Times that one of the main reasons he became an MP is "to fight for the global ban of asbestos." As a young man, he had worked in an asbestos mine in the Yukon from 1974-1975 and said he was lied to about asbestos hazards. "For the tragedy of asbestos to strike so close to us all on Parliament Hill, it strengthens my resolve that this is Canada's greatest shame and is crying out to be addressed."

Mr. Strahl (Chilliwack-Fraser Canyon, B.C.) announced last week in a column in the Chilliwack Times, a local paper in his riding, that he is suffering from lung cancer likely caused by exposure to asbestos when he worked as a logger years ago.

Mr. Strahl said he plans to continue his MP and deputy Speaker duties. "This column is about me (always a difficult subject), and it is about my cancer," he wrote. "I don't see any other way around this. I'm a kind of private guy in many ways, and I like to be pretty stoic about problems I face day to day. But my job is so public and expectations so obvious that it can't really be a secret. And perhaps it wouldn't be fair to be secret anyway, because there are so many people who need to know and want to help out in ways small and large."

Just after the House broke for the summer, Mr. Strahl, 48, said he started to feel ill. Then his lung collapsed. "I thought it was just the flu or perhaps pneumonia, and I was too busy and too stubborn to rush into the doctor's office," he wrote.

After two weeks of tests and surgery and another collapsed lung, "Pathologists had determined that the lining (the pleura) had developed cancer, likely because of an exposure to asbestos when I was a young man. My logging days included a time when we used open, asbestos brakes on the yarder and while my exposure wasn't that lengthy, it was intense. Typically, 20-25 years later, the asbestos works its ugly magic. Unfortunately, I'm right on time.

"A column like this could have the word 'unfortunately' sprinkled throughout, and it is the perfect word for the situation. Unfortunately, I was exposed to asbestos. Unfortunately, my body couldn't handle it. Unfortunately, it targets the lungs. Unfortunately, there is no cure, only treatment. Unfortunately, like all cancer, the disease has an awful, debilitating effect on your family and friends, all of whom want to help, can't believe it is happening, and just wish they could do something to make the world 'right' again.

"I'm none too thrilled with it all either. The treatment will be determined in the next few days, and I'll have to start that soon. It won't be any fun, but it has to be done and I'll just get at it when they're ready. I'm hoping to be able to keep working while this happens. I'll be in there sluggin' for now, and much of what comes up will be simply business as usual."

Conservative House Leader Jay Hill told The Hill Times last week that he was "struggling a lot" with the news of Mr. Strahl's cancer.

"He's my closest personal friend," said Mr. Hill (Prince George-Peace River, B.C.). "The friendship that we've developed over the last decade as Parliamentarians has morphed into a very close personal relationship. It goes unsaid that myself and our entire caucus give our utmost support and encouragement during this difficult time. He's loved by all and respected by MPs. The respect they have for him as Deptuy Speaker is reflective of the respect they have for him as an individual."

Mr. Martin said he was shocked when he heard the news. "We wish Chuck the best. He's such a healthy and vibrant man and if anyone can beat it, it's him."

He told The Hill Times that he is also worried about his own health and regularly goes for bronchoscopies which show there is scarring around his lungs but there is no sign of cancer.

Earlier this year, Mr. Martin was in Washington, D.C. for the first World Asbestos Awareness Day with a U.S. lobby group. "It was on April 1, April Fool's day, unfortunately, which is an irony because we've all been fooled by asbestos for so long," he said, adding that the government refuses to acknowledge that there is no safe level of exposure to asbestos.

Health Canada's website states that "asbestos poses health risks only when fibres are present in the air that people breathe. If asbestos fibres are enclosed or tightly bound in a product, for example in asbestos siding or asbestos floor tiles, there are no significant health risks.

"When inhaled in significant quantities, asbestos fibres can cause asbestosis (a scarring of the lungs which makes breathing difficult), mesothelioma (a rare cancer of the lining of the chest or abdominal cavity) and lung cancer. The link between exposure to asbestos and other types of cancers is less clear."

The federal government is currently keeping a close eye on the West Block building on Parliament Hill where asbestos is present in many forms due to major renovations conducted in the 1960s when it was legal to fireproof buildings with the material. Using asbestos as insulation was banned in Ontario in 1973.

According to a recent report by engineering firm Golder Associates Ltd., MPs and staffers toiling inside the building are at risk of asbestos exposure.

"The fact that asbestos fireproofing is observed to have fallen off (which creates a disturbance), and the measured effect of activity in the asbestos contaminated areas leads us to state that there is no guarantee that the occupants have not been exposed to some levels of asbestos fibres," says the report.

In the last session of Parliament, Mr. Martin raised the issue of an asbestos-laden home insulation product called vermiculite whose commercial name is Zonelite.

"Hundreds of thousands of homes have been made dangerous and even devalued by virtue of Zonolite contamination," Mr. Martin said during Question Period in February. "This happened because of a federal government program that promoted and even subsidized the installation of this Zonolite. Within months of learning that UFFI foam was irritating, a program existed to remove that hazard from people's homes. Canadians are looking to their government for help in removing Zonolite. What will the government do to help homeowners get this carcinogen out of their walls when the government helped put it in?"

In response, Labour and Housing Minister Joe Fontana said, "I do not buy the premise of the question at all. I am sure the member would want to be more clear with Canadians. Yes, any time they are undertaking renovations we would encourage them, obviously, to talk to professionals so that they can get the right information. We have been told, and it is on Health Canada's website as well as [the Canadian Mortgage and Housing Corporation's website], which advised all the stakeholders and so on, that if left undisturbed it does not pose a health risk. Yes, we need to inform Canadians on the health and safety of their homes but I am sure the member would not want to alarm Canadians."

Mr. Martin said that Canada is the largest and one of the only asbestos producers left in the world, and where "it would be irresponsible to continue using it in Canada," it's still exported to many countries in the developing world. "We spend millions subsidizing the industry and promoting it in the third world," Mr. Martin said. "It's our greatest shame for dumping asbestos in the third world and we're international pariahs for it."

In 1999, Canada appealed to the World Trade Organization to stop France from banning asbestos imports and lost. "The WTO found that all levels of asbestos posed some cancer risk, that safer substitute products were available and that there was no such thing as 'controlled use,'" wrote Barry Castleman, an environmental consultant, in the Washington Post last year.

"We really are the international bad guys," Mr. Martin said, adding that the European Union's 23 countries banned asbestos as of Jan. 1, 2005.

"We've chosen not to use it, but it's still legal here and a whole generation is at risk. It should have never been taken out of the ground and now with wreckless abandonment we've scattered it across the country and continue to dump it around the world. That's why I'm calling for a global ban. We have an obligation to do anything and everything to get rid of it."

One solution, Mr. Martin said, is to shut down the mines and give the 800 or so workers early pensions because the asbestos industry is a "dying business" in Quebec. However, Mr. Martin said, "The government is acting cowardly to shut down the death mines and pension [the employees] off."

Mr. Martin said that once Parliament resumes, he will organize a gathering on the Hill with home owners from across Canada who have Zonelite in their houses to demand action.

Asbestos in West Block

In its December 2004 final report to Public Works, engineering firm Golder Associates Ltd. concluded that mesothelioma, a rare form of cancer which affects the protective membrane covering most of the body's internal organs, was considered to be the most likely illness to arise from the current potential asbestos exposure patterns in West Block. Public Works says it has been conducting daily air monitoring and that the results have consistently been within acceptable levels. It also doesn't plan to vacate West Block until the fall of 2006.

Golder's final report stated: "In light of the risk analysis and based on the balance of the information and data (observational and other), we conclude that an important health risk exists for occupants of West Block. Studies show that some individuals with only brief exposures have developed mesothelioma. It is therefore unreasonable to prolong the occupants' risk of exposure to this situation or to introduce new tenants to the building under this condition. The best strategy for ending potential occupant exposure is to vacate the building's occupants as soon as reasonably achievable. A four to six month timeframe for the relocation of the occupants was recommended in July 2004 to being immediately and end in December 2004. The four to six month timeline was selected because it communicates a sense of urgency without panic... Although the December 2004 target date has lapsed, Golder maintains its recommendation that an action plan for ending occupancy should be developed with a timeline beginning immediately."

US Asbestos Fund could Fall Short - Budget Office

August 29, 2005

Reuters

Washington - A $140 billion asbestos compensation fund being considered by Congress might be too small to cover all the claims of asbestos victims over the next 50 years, according to the Congressional Budget Office (CBO).

The proposed fund would have to pay out between $120 billion and $150 billion in claims to people who were exposed to the mineral, said the CBO report dated Aug. 25.

It was impossible to know for sure whether the fund would be adequate over the long term because of the uncertainty about the number of future claims and how many would be approved, the budget office said.

The legislation would take asbestos injury claims out of court and pay them from the fund financed by asbestos defendant companies and their insurers.

The CBO estimated that, in the first 10 years, the fund would have to borrow almost $8 billion to meet injury claims because more than half of all anticipated claims would come in that initial period, outstripping industry contributions.

"The interest cost of this borrowing would add significantly to the long-term costs faced by the fund and contributes to the possibility that the fund might become insolvent," said the CBO.

Asbestos fibers have been used in building materials, auto parts and other products for decades, but are linked to cancer and other diseases. Hundreds of thousands of injury claims have forced many companies into bankruptcy.

Senate Judiciary Chairman Arlen Specter, a Pennsylvania Republican, and Sen. Patrick Leahy of Vermont, the panel's ranking Democrat, are the chief co-sponsors of the asbestos bill.

The bill was approved by the Judiciary Committee in May. But with doubts about how much support it has in either party, it has not yet been brought to the Senate floor.

Republican critics are concerned about the fund's solvency and whether it would halt all asbestos lawsuits, while Democrats have questioned whether it treats victims fairly.

Nevertheless, Senate Majority Leader Bill Frist has said he intends to bring the legislation to the Senate floor this autumn.