James Hardie vows to pay compensation

Building Company James Hardie says it is committed to compensating asbestos victims despite failing to contribute to a fund set up for them for two of the past three years.

An original compensation fund of $1.8 billion was set up by the global company to assist ex-employees suffering from asbestos-related diseases.

As of May that amount reportedly dwindled to $149 million, to be shared among thousands of asbestos sufferers.

Prime Minister Kevin Rudd and NSW Premier Nathan Rees announced on Saturday a joint federal and state government emergency loan of up to $360 million would go towards topping up the Asbestos Injuries Compensation Fund (AICF).

Mr Rudd said the cash injection did not release James Hardie, which has been hurt by a sharp downturn in the US housing market, from contributing to the fund.

"No excuses for James Hardie and nothing excuses their responsibility into the future as well," Mr Rudd told reporters in Sydney.

James Hardie is required to top up the AICF with a set annual contribution of 35 per cent of its "free cash flow" but has not met its commitments over two of the past two years.

While times have been particularly tough this year, the commonwealth insists James Hardie repay the loan by 2020.

James Hardie responded by saying it acknowledged the joint government loan would "meet a short-term funding shortfall" to the AICF.

"The company advises that the provision of the loan facility to the AICF does not reduce James Hardie's obligations under the Amended and Restated Final Funding Agreement" James Hardie CEO Louis Gries said in a statement on Saturday.

"Furthermore, James Hardie anticipates that, based on its fiscal year 2010 results to date, it expects to make a contribution to the AICF, in accordance with the agreement, in 2010.

"We look forward to working with the NSW Government, the AICF and the Australian Government to finalise the facility," Mr Gries added.

Part of its pledge includes contributing A$500,000 a year for 10 years towards medical research into the prevention, treatment and cure of asbestos diseases and A$75,000 a year for 10 years for an education program to inform home renovators of the risks associated with asbestos, Mr Gries said.

Unions NSW commended the governments' actions, but vowed to keep pressure on James Hardie to make future payments to the fund.

"This announcement ensures victims of the worst workplace safety scandal in Australian history are able to live out their remaining days with dignity," Unions NSW Secretary Mark Lennon said in a statement.