The Hon. HENRY TSANG (Parliamentary Secretary) [3.25 p.m.]: I move:

That this bill be now read a second time.

I seek leave to incorporate the second reading speech in Hansard.

Leave granted.

On 21 December 2004, the Government entered into a non-binding Heads of Agreement with James Hardie Industries NV, the Australian Council of Trade Unions, Unions New South Wales and Bernie Banton, representing asbestos victims.

The Heads of Agreement represent a major breakthrough for asbestos sufferers.

The Heads set out a framework for a legally binding agreement with James Hardie to provide long-term funding for the victims of its former subsidiaries' asbestos products.

The Heads record James Hardie's intention to provide annual contributions for at least the next 40 years to a Special Purpose Fund. The Fund will use that money to pay compensation to asbestos victims.

Since December, the Government and James Hardie have been negotiating the legally-binding final agreement.

The Government had expected that the final agreement would be settled in time to introduce supporting legislation this Budget Session.

Negotiations have proved to be slower and more complicated than expected, however, with many complex issues under Australian, Dutch and US law.

The Government now expects that the final agreement will be settled in late July or early August, after the Budget Session has concluded.

The Bill before the House is the first legislative step in implementing the long-term arrangements for James Hardie to provide funding for victims of its former asbestos subsidiaries.

The Bill will protect the rights of future claimants.

Tragically, some 9,000 Australians are predicted to develop asbestos diseases over the next 40 years as a result of exposure to James Hardie asbestos products.

This Bill will ensure that James Hardie's former asbestos subsidiaries remain in existence over that period so that these people can claim compensation.

As Honourable members will be aware, Commissioner Jackson highlighted the difficulty with the current arrangements available to the former subsidiaries under the Corporations Act to manage their liabilities.

As Commissioner Jackson recognised, none of the external administration mechanisms under the Corporations Act recognises the position of future asbestos victims.

Claimants cannot bring a claim until they have suffered damage, which may not occur for some thirty or forty years after their exposure to asbestos.

We know that these people will one day need to claim against the former asbestos subsidiaries, but we do not even know who they are at this stage.

The existing external administration provisions of the Corporations Act make no allowance for people in this position. They are unascertained, future creditors and their interests would not be considered if the former asbestos subsidiaries were to be wound up today.

In other words, if the former asbestos subsidiaries were to be wound up or deregistered, future claimants would go uncompensated because there would be no entity from which they could claim compensation.

The actual funding to pay future compensation claims will flow from the final agreement with James Hardie. This Bill is an important first step to preserve the former asbestos subsidiaries so that claimants will be able to make claims for compensation.

The Bill will also ensure that the status of the former subsidiaries does not change before any final agreement is settled and Parliament resumes.

This Bill will need to be amended in the Spring Session to reflect the detailed structure and governance arrangements in the final agreement and to include any additional matters from the negotiations.

In addition to including customised governance arrangements to reflect the final agreement reached with James Hardie, the further legislation next session will also need to deal with other matters.

This legislation will include necessary provisions to implement James Hardie's announcement that it will extend the compensation arrangements to cover asbestos mining operations in the Baryulgil community, both during and after the period in which James Hardie owned and operated the mine.

Legislation next session will also include necessary provisions to implement releases of James Hardie and its officers.

I note that the Bill now before the House does not contain any releases from liability for James Hardie or its officers.

These releases are subject to negotiation and will be settled as part of the final agreement with James Hardie.

The Heads of Agreement provide for James Hardie to be released from civil liability. The issue that has been in dispute is James Hardie's request that these releases extend to civil penalty orders under the Corporations Act.

The Government is obtaining legal advice on whether the New South Wales Parliament has any power to enact legislation to override the civil penalty provisions under the Commonwealth Corporations Act.

It is only if that legal advice shows that New South Wales does have such power that the Government will need to consider the policy issues involved.

The Government has received the views of the Australian Securities and Investments Commission on the policy issues and, of course, ASIC's views are very important.

If it becomes necessary to consider this issue further, the Government will also want to consult with the ACTU, Unions New South Wales and Mr Banton as parties to the Heads of Agreement.

Before I turn to the provisions of the Bill, I wish to say something about why this Bill is urgent and why the Government could not introduce it any earlier.

The Government is asking the Parliament to pass this Bill urgently this week. I thank Members for dealing with this Bill as a matter of urgency.

It is necessary that this Bill be passed before Parliament rises to ensure that there is no change in the underlying structure of the former subsidiaries.

The Government and James Hardie will conclude the final agreement on the basis of this underlying structure. Implementation of the final agreement will require the Government to make certain changes to that structure by legislation next session.

This Bill will ensure that implementation of the final agreement is not frustrated by changes in the structure of the former subsidiaries between now and the time when the final legislation is enacted.

The Government could not introduce this Bill any earlier in this session. In the absence of a final agreement with James Hardie, it is important that these controls on the former subsidiaries not be imposed any earlier than the last opportunity before Parliament rises.

The Government is only introducing this Bill now because it expects that a final agreement will be reached with James Hardie in the parliamentary recess. If the Government doubted that the final agreement would be concluded before Parliament resumes in September, it would not have introduced this Bill and requested its urgent passage before Parliament rises.

I turn now to the provisions of the Bill.

The Bill generally applies to James Hardie's former asbestos subsidiaries. The main companies are "Amaca Pty Limited" and "Amaba Pty Limited". The other relevant company is "ABN 60 Pty Limited", which used to be "James Hardie Industries Limited".

Part 2 of the Bill also applies to the corporations that own the shares in these former subsidiaries.

The "Medical Research and Compensation Foundation" and "MRCF (Investments) Pty Limited" ultimately own the shares in Amaca and Amaba.

The "ABN 60 Foundation Limited" owns the shares in ABN 60.

Part 2 of the Bill ensures that Amaca, Amaba, ABN 60 and the companies that own them will remain subject to New South Wales law.

Clause 8 of the Bill prevents their registered offices being moved outside the State without the approval of the Minister administering the Act. Clause 9 makes similar provision with respect to their Member Registers.

Clause 10 gives the Minister the power to issue instructions to the companies and their directors to relocate their offices or Members registers to New South Wales in the unlikely event that they are moved contrary to clauses 8 or 9.

Similarly, clause 11 of the Bill provides that the companies that own the shares in Amaca, Amaba and ABN 60 must not transfer any of those shares without the written approval of the Minister.

In the unlikely event that shares are transferred, clause 12 enables these transactions to be reversed by way of an order of the Minister to the company or its directors.

The Minister's power to issue orders in relation to these matters will apply to conduct between the date of introduction of the Bill and its assent, as well as after assent.

I want to emphasise that there is no suggestion that the entities or their directors are intending to take action to move outside the jurisdiction of New South Wales.

Nor does the Government believe that they would take such action.

While the Government has not had any particular reason to deal with the ABN 60 Foundation, the Government has received considerable support from the Medical Research and Compensation Foundation.

The Medical Research and Compensation Foundation assisted in bringing this issue to the Government's attention. It fully supported the Government in establishing the Special Commission of Inquiry and it has continued to assist in the course of the Government's negotiations with James Hardie.

I take this opportunity to thank the directors of the Foundation for their assistance and support.

These provisions in Part 2 of the Bill are simply intended to make absolutely certain that no changes occur in the structure of these companies between now and when legislation can be enacted to implement the final agreement with James Hardie.

The relevant clauses are declared to be Corporations legislation displacement provisions. This means that any provisions of the Corporations Act which are inconsistent with these clauses will not apply.

Part 3 of the Bill places Amaca, Amaba and ABN 60 under a NSW-supervised "external administration" regime.

Under clause 15, the external administration period will commence on the date of assent of the Act and will end on a day appointed by the Governor by proclamation.

Clause 16 provides that any external administration of Amaca, Amaba and ABN 60 can only proceed in accordance with the provisions of this Part of the Bill.

No proceedings may be brought in any Court or Tribunal for external administration, including liquidation or winding up proceedings, except in accordance with this Part of the Bill.

This displaces part of the Commonwealth Corporations Act and ensures that these companies cannot be wound up or deregistered under that Act.

At the request of the Commonwealth and the Australian Securities and Investments Commission, clause 16 now includes an express provision to put beyond all doubt the fact that the Bill does not limit the ability of the former subsidiaries to provide assistance to ASIC.

The affairs of the former subsidiaries generally will be subject to the supervision of the New South Wales Supreme Court and the Minister.

By enacting this legislation to place the former subsidiaries under NSW external administration, there is no suggestion that the companies are insolvent.

Nor does the Government wish to change the day-to-day management of the former subsidiaries in any practical sense. As I have already mentioned, the Government has received considerable support from the Medical Research and Compensation Foundation in this process to date and looks forward to this support continuing.

What is important in a legal sense is that the Bill will ensure that the former subsidiaries are placed in external administration under the supervision of the Minister and the Supreme Court.

Clause 18 of the Bill requires the former subsidiaries during the administration period to carry on their business so far as is necessary for the management of claims, including the payment or settlement of claims.

The intent of this provision is to ensure that the resolution of claims remains the core of their business and essentially their only business.

Division 3 of Part 3 of the Bill establishes a regime which will apply if at any time during the period of external administration insufficient funds are available to meet claims as they fall due.

If such a situation emerges, the Minister may apply to the Supreme Court for an order approving a scheme to prioritise the payment of claims against the companies.

The Government does not anticipate that any such priority scheme will be required. We understand that the former subsidiaries have sufficient assets to continue to meet claims as they fall due.

It is necessary, however, that we deal with this possibility—no matter how remote it is—to ensure that any shortage of funds is dealt with in a fair and sensible manner.

Clause 26 of the Bill provides that priority will be given under such a scheme, first to operating expenses and claims processing expenses, and second, to claims for damages for personal injury or death. This priority will be given over all other claims arising during the period.

Any priority scheme that might be required will ensure that the former subsidiaries can continue to function so that they can deal with claims by paying their day-to-day operating expenses.

After this, they will be required to give priority to personal injury claims over all other claims, such as commercial or pure economic loss claims.

Any priority scheme will require an application by the Minister and the approval of the Supreme Court. I must emphasise that the Government does not expect to have to make any application to the Court for a priority scheme—this measure is included for completeness only.

To ensure that the Government is kept informed of the position of the former subsidiaries, clause 27 imposes obligations on the companies to provide certain information, including verified accounts, while clause 28 provides for the inspection of records.

Clause 29 imposes general obligations on the former subsidiaries and their directors to co-operate with and assist the Minister as the Minister may reasonably require.

Divisions 5 and 6 address various matters relating to enforcement, including dealing with contraventions of Part 3.

The Supreme Court will have jurisdiction to enforce the requirements of Part 3.

The Bill provides for an authorised applicant, being the Minister or a person who has been authorised by the Minister, to apply to the Supreme Court for relief.

The Bill also enables the Minister to apply to the Supreme Court to remove any directors if they do not perform their duties as directors or do not comply with the Bill.

Pursuant to clause 33, the former subsidiaries may apply to the Minister or the Supreme Court for advice or direction as to the discharge of their functions under Part 3.

Similarly, the Minister may apply to the Supreme Court for advice or direction on the exercise of the Minister's functions.

Division 7 of Part 3 displaces the operation of the Corporations Act in relation to matters in Part 3 of the Bill. This ensures that, where the Bill is inconsistent with the Corporations Act, the Corporations Act provisions will cease to apply.

As this legislation displaces the operation of parts of the Corporations Act, it has been necessary to obtain the approval of the Ministerial Council on Corporations.

I express my gratitude for the speed with which my colleagues were able to grant approval for the legislation to enable it to be introduced today.

The Government expects that a final, legally binding agreement with James Hardie will be settled in the coming weeks.

This legislation is intended to preserve the "status quo" until such time as that agreement is finalised and legislation can be introduced next session to implement the terms of the final agreement.

I commend the Bill to the House.

The Hon. GREG PEARCE [3.26 p.m.]: The Opposition will not oppose the James Hardie Former Subsidiaries (Special Provisions) Bill. Along with many other Australians, Opposition members have become fully aware of the concern and suffering of potentially 9,000 individuals affected with asbestosis or mesothelioma. Every member of the Opposition wishes those affected a speedy recovery and the opportunity to be properly compensated and looked after. On behalf of the Opposition I congratulate Bernie Banton, who was awarded membership of the Order of Australia in the Queen's Birthday 2005 Honours List. Bernie has been very much the public face of people suffering these terrible diseases and has carried himself with incredible dignity while working very, very hard.

The Government has again—on the third or fourth occasion—introduced a complex bill with a degree of urgency, and that leaves one wondering what this is really all about. Having had only a short time to read the Attorney's second reading speech and the bill, I would have to conclude that the bill is, in some sense, a bit of a smokescreen by Bob Carr to make sure that he is not blamed for the final settlement negotiations with James Hardie not being completed by June, the time set down for completion. No cogent reason has been given for the failure to complete the negotiations and implement the agreement that will ensure certainty for the 9,000 victims and their families, other than the Attorney saying that the matter is a bit complex and there are difficult issues to be dealt with.

The heads of agreement were signed in December 2004. The entire community expected the final agreement to be signed in the time frame outlined by the Government. It is quite distressing that Bob Carr and his union mates have not been able to complete the negotiations and the documentation on time. But we have come to expect that from this Government, with its ongoing incompetence and inability to manage anything. Its incompetence has been demonstrated clearly with the inadequate provision of infrastructure. However, in this case the inability to settle an agreement for which all the terms and conditions were agreed last December is a cause for considerable concern and a great deal of disappointment for all victims.

I am a little confused about whether this complex bill will serve any purpose at all. The Attorney General made it plain in his speech in the other place that the Government introduced this bill with great urgency to get it into the media and to enable it to state that Bob Carr had done everything he had to do in relation to it. At the same time as the Government is spinning that yarn the Attorney General is happily telling members in the other place that the Government will have to introduce another bill either in late July or in early August when the final agreement is reached. The community will hold Mr Debus and Mr Carr accountable to those dates if that final agreement is not concluded by early August.

People will then be entitled to be really angry about the failure of this Government, once again, to manage anything. I said earlier that the Attorney General made it plain that the Government is ramming this bill through. However, it has not given anyone an opportunity to understand its provisions or its consequences. The Attorney General said that this bill is not just a stopgap; it will enable the Government to say it has done everything that it had to do. The Government will amend this legislation or introduce new legislation in the next session of Parliament when the agreement has been signed off. The Opposition is concerned about the way in which this legislation was introduced and it is concerned about the urgency claimed by the Government. The Attorney General said in the other place:

It is necessary that this bill be passed before Parliament rises to ensure that there is no change in the underlying structure of the former subsidiaries.

He went on to state that no-one expected there to be any change to the underlying structure. No-one has any reason to suspect that that will be the case. In an amazing piece of gobbledegook, obfuscation, and goodness knows what, the next paragraph of the Attorney General's speech deserves to be read into Hansard. Anyone who can make any sense of it will be doing a lot better than I have done. The Attorney General's said in the other House:

This bill will ensure that implementation of the final agreement is not frustrated by changes in the structure of the former subsidiaries between now and the time when the final legislation is enacted. The Government could not introduce this bill any earlier in this session. In the absence of a final agreement with James Hardie, it is important that these controls on the former subsidiaries not be imposed any earlier than the last opportunity before Parliament rises. The Government is introducing this bill now only because it expects the final agreement to be reached with James Hardie in the parliamentary recess. If the Government doubted that the final agreement would be concluded before Parliament resumes in September, it would not have introduced this bill and it would not have requested its urgent passage before Parliament rises.

The Attorney General made that statement in the other place. If we got a comedy writer to try to come up with a bit of gobbledegook we could not find one that could do much better than that gobbledegook by the Attorney General. This bill is quite unusual. I refer to a point that the Attorney General kept making: he is trying to ensure that there is no change in the underlying structure of former subsidiaries. Part 2, division 2 introduces a number of offences. For example, it is an offence for a company to do any of the following things without the written approval of the Minister:

(a) change the address of its registered office to a location that is outside of the territorial limits of the State,

(b) have its registered office at a location that is outside of the territorial limits of the State.

Another provision relates to the transfer of shares. The maximum penalty for these offences is 1,000 penalty units, which is currently $110,000. Is the Government fair dinkum in relation to this issue? We are talking about companies having their shares transferred outside New South Wales or moving their registered office and location outside New South Wales, so what on earth would a penalty of $110,000 achieve? For a start, on whom would the Government impose such a penalty? It just does not make any sense at all. It is supposed to be supported by provisions that should enable the Minister to order the relevant company to instruct its directors and other officers to take steps necessary under the Corporations Act to remedy the offences of transferring shares or moving outside the territory. If the company was outside the territory, how on earth would the Minister do that? It is complete nonsense.

The second major area that the Minister talked about was the provision for placing companies under administration in New South Wales. Clause 15 provides that the external administration period will commence on the date of assent of the Act and will end on a day appointed by the Governor by proclamation. Other provisions are designed effectively to ensure that the companies remain in place and are capable of being sued for the 40 or so years it is expected to take to resolve all these things. We really have to ask ourselves whether the Government is fair dinkum in relation to this issue. I suspect that this bill will never be assented to. These provisions will have to be redrafted. They are not yet capable of reflecting what will be in the final agreement.

I conclude by stating that this bill is more about the Government trying to spin itself out of trouble. It is trying to claim that it has done everything it had to do and it is trying to shift the blame for the failure to document and conclude the agreement this month, which quite rightly will disturb and upset many of the victims and their families. This Government simply cannot manage anything that involves dealing with the outside world. It spins its media and puts its union mates into negotiating positions and onto boards and all the rest of it. These very deserving people had their expectations raised last November when the heads of agreement were entered into. They are entitled to have seen the final agreement by now.

We have had no explanation from the Carr Government as to why it has not been able to conclude that agreement. Instead, legislation was introduced on the run with no real justification for urgency. We have been told that this legislation will have to be amended or new legislation will have to be introduced to implement the agreement when it is finally signed by early August. Bob Debus, Bob Carr and their union mates should make sure that they get that deal signed by early August. I am sure a number of people will be very upset if they do not.

The Hon DUNCAN GAY (Deputy Leader of the Opposition) [3:38 p.m.]: I support the comments made by my colleague the Hon. Greg Pearce, and I wish to make a few personal comments. For a long time I believed that James Hardie deserved to be chased. That company got itself into this situation as a result of some reprehensible and silly acts. However, James Hardie is not the only villain in this sorry saga. The Premier chose to use James Hardie as a distraction but James Hardie provided the Government with that opportunity by not behaving appropriately and not being as adept as it should have been. That tends to hide the fact that there are other concerns in this area.

We must remember that James Hardie produced materials to government standards and that, in some cases, State and Federal governments compelled the company to use particular raw materials in its products. We should also remember that the State Government has run power stations in New South Wales that used asbestos extensively. People have worked in those power stations for 40 or 50 years. Building janitors have looked after boilers and pipes and conducted maintenance on government-owned houses that contained asbestos. As recently as the late 1960s—I was still travelling on steam trains in New South Wales then—firemen were at risk from asbestos. Many people in those industries face potential harm. The State Government has a responsibility to care for those people, and that responsibility will increase over time.

As I said, it is just too cute for the Premier to constantly beat up on James Hardie. That action obscures the other problems. If we simply beat up on James Hardie—it certainly deserves a beating in just about every case—and go away believing we have fixed the problem, we will be kidding ourselves. The Premier is constantly beating up James Hardie about asbestos but is less than forthright when it comes to addressing the greater issues affecting New South Wales workers in particular industries. That is an ongoing problem. This is a personal view but one that I felt I should express during debate on the bill.

The Hon. PATRICIA FORSYTHE [3.42 p.m.]: I commend my colleagues for their contributions to debate on the James Hardie Former Subsidiaries (Special Provisions) Bill. There is absolutely no doubt that asbestos has left a terrible legacy for workers who suffered exposure to that material. I do not seek to resile in any way from recognising the responsibilities of James Hardie or the terrible legacy of asbestos in our community. I certainly acknowledge the objectives of the bill in seeking to limit the ability of certain James Hardie subsidiaries to reorganise and restructure and in trying to place certain companies in external administration. It is easy for this Government to wave a big stick at James Hardie, a huge multinational company. But the Government also has policy and asset provision responsibilities with regard to public health in this State.

I contrast the Government's willingness to take on James Hardie—I do not suggest for one moment that it should not do so—with its inaction on a potential time bomb. The Government has been alerted to the fact that a number of houses and other buildings across the Eden-Monaro area—probably numbering in excess of 60 dwellings in Queanbeyan, more dwellings in the Cooma-Monaro region and other dwellings on the coast near Batemans Bay—have been identified as being likely to contain, at least in principle, a form of asbestos. Amosite—a 100 per cent pure form of asbestos—was blown into these dwellings and used as insulation during the 1960s. A few weeks ago I made a speech in the House on this subject. A complete review and decontamination of houses in the Australian Capital Territory occurred in the late 1980s and early 1990s. That was not a cheap exercise but I believe the people of the Australian Capital Territory can derive some comfort from the fact that buildings containing asbestos have been identified.

This issue came to the fore earlier this year when the doctor responsible for the asbestos review in the Australian Capital Territory in the 1980s wrote some letters to the editor of the Canberra Times. I contacted that doctor, and Queanbeyan council has subsequently taken up the issue. Queanbeyan council is very keen to see a review of property in its local government area. But any will or commitment on the part of the Carr Government is lacking. So, although I do not step back from the advances made in this legislation, I believe the Government cannot have it both ways. Asbestos is a problem not just for James Hardie; it could still be a problem for the community. Not two weeks ago a 38-unit dwelling in Queanbeyan was identified as containing asbestos when someone cut a hole in the ceiling to gain access to the roof and was allegedly sprayed with loose asbestos. No-one knew the building contained asbestos.

Queanbeyan council and other councils in the area want the Carr Government to come on board and allocate some money to fund a proper review of dwellings and buildings throughout the region in the interests of the entire community. If the Carr Government wants to wave the big stick at James Hardie—as it should—it must accept that it also has a public health responsibility in terms of policy and resources. The Government must take action on this problem that has been drawn to its attention. Queanbeyan council is already pursuing the issue. I urge the Carr Government not just to act with regard to James Hardie but to accept its responsibility for eradicating asbestos in our community and allocate some resources. The bill should be just part of a much broader approach to this problem. Wider action on the part of the Government will assure the community that it is fair dinkum about dealing with asbestos and its related problems and is not just beating up on James Hardie.

Reverend the Hon. FRED NILE [3.47 p.m.]: The Christian Democratic Party supports the James Hardie Former Subsidiaries (Special Provisions) Bill. The purpose of the bill is to provide for the external administration of certain companies that were part of the James Hardie group of entities. It also intends to place certain limitations on the ability of liable entities and certain associated companies to reorganise their corporate structures during the period of external administration. Some honourable members have questioned why the bill is necessary when positive discussions are continuing with James Hardie. However, because of the company's earlier action in shifting its headquarters to Holland, we must be suspicious and aware of the potential for future changes. There is no evidence that James Hardie will act so I believe it is better to be safe than sorry.

The Government has introduced legislation that we hope will not be needed in the long run. But the Government has a responsibility to the public and to all those people who are suffering from the effects of asbestos exposure. Huge amounts of money are involved—not millions of dollars but billions of dollars in compensation—so financial administrators and lawyers attached to the company could urge it to avoid its responsibility by taking certain action. Corporate entities can be created as easily as they are disbanded. In order to escape legal sanctions corporate entities have been known to shut down and resurface under another name with another structure or to disappear without a trace.

As that is the case, this bill must be passed urgently in order to protect the claims of asbestos victims. Together with other honourable members, the Christian Democratic Party commends the actions of Bernie Banton, who is a courageous spokesman for all men and women who are suffering from the effects of asbestos in our country. This bill is necessary to ensure that certain asbestos-related entities falling within the James Hardie Group remain intact and face the claims of asbestos victims rather than disappear into the corporate ether.

During the crossbench briefing by Government advisers I asked whether it is possible, even though the structure of the company, or the shell, may stay in place, that its assets can be shifted away? I have no evidence that James Hardie would do that but apparently this bill will prevent that happening. This bill is the first step in implementing a raft of legislation to support long-term arrangements for James Hardie Industries NV to provide for funding of its former asbestos subsidiaries, being Amaca Pty Ltd, Amaba Pty Ltd and ABN 60 Pty Ltd. It is estimated that approximately 9,000 Australians will develop asbestos-related diseases during the next 40 years through exposure to James Hardie asbestos products.

A seminal arrangement was entered into by the Government, James Hardie Industries, the Australian Council of Trade Unions, Unions NSW and Bernie Banton late last year for James Hardie to provide annual contributions for at least the next 40 years into a special purpose fund, from which asbestos victims will be compensated. From late last year onwards, the Government and James Hardie have been negotiating a legally binding final agreement which we had hoped would be finalised by now as it seems to have dragged on longer than it should. However, no agreement has been finalised but it is expected it will be settled in July. This bill will be amended after the final agreement is made conclusive but it is needed as a matter of priority to preserve former asbestos subsidiaries. It is important that their status does not change before the final agreement is settled and then implemented.

Part 3 of the bill places former asbestos subsidiaries of James Hardie under an "external administration" regime. This will be a New South Wales supervised regime, where the entities will be subject to the supervision of the New South Wales Supreme Court and the Attorney General. For example, the bill ensures that Amaca, Amaba and ABN 60 remain subject to law in New South Wales and will prevent their member registers or registered offices from being moved outside the State, or shifted overseas, and will prevent transfers of shares in them without the approval of the Attorney General. The bill will put those companies in a special category because it displaces some of the Federal Corporations Act provisions ensuring that the companies cannot be wound up or deregistered under the Act. Apparently, the approval of the Ministerial Council on Corporations was given for that to occur.

This bill is peculiar in that the New South Wales Parliament is legislating in relation to corporations that normally come within the purview of Federal jurisdiction. It is very important, and it must be stressed, that this bill does not include any releases from liability for James Hardie Industries or any of its executives. In the future, legislation will deal with that particular issue and other more general legislation will deal with the compensation of asbestos sufferers by James Hardie. The Christian Democratic Party supports this legislation because it is better to be safe than sorry.

The Hon. Dr ARTHUR CHESTERFIELD-EVANS [3.54 p.m.]: I support this legislation as it is necessary to have restraints on James Hardie, which moved to The Netherlands. I believe that if James Hardie did not have substantial investment in Australia it would never have agreed to anything. The Government has had to negotiate. The bill is a credit to asbestos victims and Bernie Banton. The unions recognised the importance of this ongoing tale and could not leave these victims in difficult circumstance, even though many of them were no longer working. The Construction, Forestry, Mining and Energy Union and the AMU got together with Unions NSW and put pressure on both the Federal and State governments to take some action. Under Australian workplace agreements, where effectively ants negotiate with elephants, that may not have happened.

In fact, because of the strong line taken by the unions, Bernie Banton and fellow asbestos victims, although historically there were some slip-ups at Wittenoom, it was important to take the company to task. Fortunately, the company had sufficient investments in Australia to be forced to come to the table. I will give credit where credit is due to the Labor Government. As I recall, when the first lot of legislation was introduced the Liberal Party had a series of amendments, approximately 16, that would limit quite severely who in New South Wales could get compensation. Claimants who had not lived a substantial part of their lives in this State were going to be left out. I remember the Liberal Party moved the amendments to water down the legislation so that fewer people could get compensation. The crossbench decided not to dignify the amendments with a response. The Opposition moved the amendments and looked keenly to find out how the crossbenchers were going to vote, and we voted the first lot down. The Opposition proposed the second amendment, nobody spoke and it was voted down again. The Opposition recognised that would be the pattern for all the amendments and so withdrew them. That did no credit to the Opposition. Once again the credentials of the Opposition are not boosted when it nit-picks the legislation and says it should do this or that.

If the legislation is needed to stop further actions by liable entities from among the James Hardie subsidiaries, so be it. If the legislation needs modification after final agreement is reached, so be it. The tobacco industry has reorganised itself. One company changed its name from R. J. Reynolds to R. J. Nabisco and has now dropped the "R. J." and is just Nabisco. Philip Morris has changed its name to Altria Group Inc. and has bought out Lindt chocolates and General Foods with money it generated from tobacco. The Lindt chocolate shop in Martin Place has whopping great ashtrays on its outdoor tables that give the message "Yes, we are selling flash chocolate and we are perpetuating the smoking habit as well." What a coincidence. The big irony is that the name "Altria" has the connotation of altruism.

Because there has not been organisation amongst tobacco victims, corporations have reorganised, shot through, limited their liability and have not been successfully sued, and the Government has not moved against them. The model of Johns-Manville Corporation being wound up in the United States of America and all its profits going to asbestos victims is a good model and should have been followed here. We have been a little kinder but we very nearly missed the bus when we allowed the medical research and compensation fund—a laudable name but I do not know whether it did any research—to be set up and to be totally inadequately funded. The Jackson inquiry found it was funded at the minimum level to have any credibility at all, and the money was not available in the fund for asbestos victims. If the Hardies companies had not still been relatively successful in Australia selling products and receiving earnings here that they could have lost, they could have successfully closed down under corporate law because there was no reciprocity agreement with The Netherlands. They could have escaped without paying asbestos victims a bean.

Luckily, following that process—with encouragement from asbestos victims and support from the unions, and because the Government to its credit has taken up the cudgels—James Hardie will have to do the right thing. This bill is part of a suite of legislation that is needed. I wish the Minister well in his negotiations with the company. I long for the day when the tobacco murderers who killed so many people throughout the world get their comeuppance in this way. I suggest that time is running out for that hope because those companies will restructure. As the smoking rate decreases so the funding base which might fund compensation to the many tobacco victims will be lost. I congratulate the Government on this legislation, and I will certainly support it.

Ms LEE RHIANNON [4.00 p.m.]: The Greens support this legislation. While things are not moving as fast as the Government promised us they would, we are moving slowly towards obtaining some justice for the victims of the appalling actions of James Hardie Industries in knowingly exposing workers and others to deadly asbestos. It has been reported that the timetable for new asbestos compensation payment by James Hardie has been delayed for a couple of months, with the agreement between the Government and the company due for signing in late July or early August. The Premier has said publicly that the draft agreement releases Hardie directors from civil liability. The Government says it has no plans to release directors from civil penalties. In the Greens' view, these directors should not be released from any type of liability. The heinous acts of the company and the directors should see them face the full weight of the law, which, after all, was intended to apply to all people in New South Wales, big or small. There should be no exceptions.

We need the Government to do everything it can do to step up pressure on this multinational giant. One tool at the disposal of the Government, which the Greens proposed late last year, is to levy a stamp duty on share trades in James Hardie. This would put further pressure on the company and its board and send a very strong message to corporate Australia regarding its responsibility towards workers and consumers. The revenue raised could go towards asbestos victims. Alternatively, it could help defray the cost to the Government of doing things like holding an inquiry, writing legislation, and getting legal advice.

When I raised this possibility late last year the Premier claimed he was sympathetic towards it. The Premier said he was sympathetic to any device to drag this company towards doing the right thing. He said its viability would be something on which he would have to get advice because the States no longer impose stamp duty on share transactions. As it has been more than six months since the Greens raised this issue with the Premier, I would like to know what his advice was. I hope that, in his reply to this debate, the Minister will inform the House about that matter.

The Hon. Duncan Gay: I would have thought the advice would have been that it would hit only the shareholders, not the company.

Ms LEE RHIANNON: This measure has been put in place before. It is not unusual for the Deputy Leader of the Opposition to say anything that would protect corporate Australia, without looking rationally and reasonably at the issues. We must be wary of the Premier's line, as he so often throws his hand in and claims the State does not have power to do things—as he did in relation to the Greens' proposal to legalise same-sex marriage. When the Government does not want to do things, it hides behind the Commonwealth's coat tails. This is not good enough, especially when the outcome of not doing something will impact unfairly on asbestos victims. At the very least, the Premier could take a leading role in lobbying the Federal Treasurer to adopt the Greens' stamp duty proposal to achieve further justice for asbestos victims. I ask the Minister to also address this issue also in his reply.

I congratulate all asbestos victims, their families, union members, and community groups who have campaigned so hard for this outcome. When I make public speeches I often say that legislation that goes through Parliament has come about not because of the good ideas of the parliamentarians but because of strong social movement. This bill is a case in point. We would not have been considering it today if it had not been for the courage and hard work of many individuals and organisations in this country.

The Hon. HENRY TSANG (Parliamentary Secretary) [4.04 p.m.], in reply: I thank honourable members for their contributions to the debate. In particular I thank the House for its assistance in dealing with this legislation urgently. I join the Hon. Greg Pearce in congratulating Bernie Banton on his inclusion in the Australian honours list. Bernie is a lifelong member of his union and represents well the Asbestos Victims Association, which is a collective bargaining organisation that the Government is very proud to work with for the benefit of people who suffer from asbestos-related disease.

The Hon. Greg Pearce should understand that the heads of agreement sets some key terms and otherwise provides a framework for negotiating the final, binding agreement. It does not contain anywhere near all the terms of the deal. If it had, we could have signed a binding agreement last December. As the Hon. Greg Pearce should also understand, the Government and James Hardie cannot sign a binding agreement in late July or early August, while leaving open the possibility that the underlying structure might change before the final agreement is implemented. That is why the bill is urgent. The Government has introduced the bill with the support of the unions and victims.

The bill is the first legislative step in the process to secure funding to support the victims of asbestos diseases. The Government is introducing the bill to protect the rights of future claimants against James Hardie's former asbestos subsidiaries. The bill protects the rights of future claimants in two ways. First, it ensures that former subsidiaries cannot be wound up or be deregistered under the Commonwealth Corporations Act. This is important because it means those companies will continue in existence until all future victims have been able to make claims. This might take another 40 or more years.

Second, it ensures that the former subsidiaries will remain in New South Wales and be subject to the further legislation we will introduce next session. The bill will implement the final funding agreement with James Hardie. In response to Ms Lee Rhiannon, the only way to get adequate funding for asbestos victims is by reaching a final agreement with James Hardie. A new stamp duty on share transfers would not raise anywhere near the $1.5 billion needed. I commend the bill to the House.

Motion agreed to.

Bill read a second time and passed through remaining stages.