Document O37Ydwk8YDKykkjr9a6jx0LyQ

FILE NAME Colonial Sugar Refinery CSR DATE 1989 DOC CSR007 DOCUMENT DESCRIPTION CSR Company Report to Shareholders - Wittenoom and Asbestos eo er WITTENOOM ASBESTOS 12 questions shareholders The answers to 4 SORT some .* CSR FL have asked VI 7 iad e: oa Paso. welt; Was say j . oe PLAINTIFF'S EXHIBIT 105440 105440 11001649 ny - CS CSR R a o . 4 _ a i Tk 3 an : : : CSR United Level 35 GrosvenPloacre 225 George Street SydNn SWe 20y 00 Australia GPO Box 483 SydNn SWe20y 01 Australia rtd eTOESS A oes SS 2 A 02 Facsim8i5l5e 5 Telephone 2358333 2358333 2 ewes wane " . ES CS ateee wse le at ooot a chet ae aoe ae 3 July 1989 mame owen] Dear Shareholder Wittenoom asbestos " On 28thOctober 1988 I wrote toyou outlining the facts relatintgo CSR's involvement .. Wittencom asbestos mine operated by Midalco a subsidiary of CSR -. claims the particular Of concern at the time were some exaggerated being made about extent of CSR's liability for compensation of people who have suffered injury as a result their exposure to asbestos at Wittenoom . Attached to this letter was a statement of issues relating to Wittenoom as they existed at the time number of these issues have since been resolved However new issues have been raised . in the media A number of shareholders financial analysts researchers and stockbrokers have sought further clarification of CSR's position regarding Wittenoom including the company's position in the U.8 It seems best now to address the most common questions asked in order to clarify the situation for all shareholders Yours sincerely Burgers IG Burgess Managing director 11001650 1- 2 What proportion of asbestos used in Australia was mined at Wittenoom Media reports of the number of people diagnosed as suffering from asbestos related The Wittenoom mine first opened in 1943 and closedin 1966 During the period 1943 to 1966 the Wittenoom mine accounted for less than 10 of the asbestos used diseases vary What is the position in Australia Following the closure of the Wittenoom mine in There are two diseases directly linked in scientific 1955 CSR ended its investment in the mining ofasbestos literature to the exposure to asbestos dust and fibres The mining and use of asbestos in Australia Asbestosis - a dust related disease similar to continued until 1983 The asbestos used during the period 1967 to 1983 silicosis which reduces lung function but which is not normally totally disabling was imported or produced by other mines in Australia ' lining _ pertheipeoridod 1943 to 1983 Wittenoom asbestos - . accountefodr than of the through- - . 'Mesothelioma a cancer ofthe outer is Jungs which is fatal * To date approximately 200 former % asbestos used employees out Australie AUSTRALIA 1946 Wittenoom diagnosed having ASBESTAOSSBESTOS .. have been as : 1983 asbestosis - .-.- of the of ~ contracted AUSTRALIAN CONSUMPTION Short Tons 000 140 Asbestosisusually manifestswithin 20years offirst exposure to asbestos As the Wittenoom mine closed 22 years ago the incidence of new cases of asbestosis amongst former Wittenoom workers is expected to be negligible There were 30 cases in 1984 and just 3 in 1988. _ 120 However a small number of cases ofasbestosis are likely to continuteo be diagnosed amongst people exposed to imported asbestos and to asbestos produced by other 100 : mines in Australia after Wittenoom closed .. Between 1947 and 1988 approximately 2000 ** having contracted mesothelioma 80 Ofthese total of 110- little more than % are known or understood to have had exposure to asbestos at Wittenoom 60 87 were former employees of Midalco who worked ' in the mine and mill at Wittenoom 3 were employed by Midalco in the township of Wittenoom 20 were understood to have been associated with a 1846 I 1952 ert ' From Wittenoom From eee 1 i P| { 1958 1964 1970 1976 1982 Year operations at Wittenoom contractors peopic living in the township etc The remainder - about 95 - of diagnosed mesothelioma sufferers were employed in other industries throughout Australia From 1967 onwards these people would have been exposed almost entirely to imported asbestos or to asbestos produced by other mines in Australia 11001651 The period between first exposure to asbestos al Wittenoom and the manifestation of mesothelioma aver27ayegare s s> samretemeenens se eeenees the the mine closed over 22 years ago Tae: incidence of mesothelioma amongst former Wittenoom employees is expected to decline over the next five years and be negligible after the year 2000 - : . te: Gh Ge Wittenoom mine closed in 1966 The reference to the continued occurrence of around 200 cases of mesothelioma each year into the next century has caused some confusion in the media and has been wrongly linked on several occasions to the operations at Wittenoom eek td Reference 2 - WITTENOOM MESOTHELIOMA MOVING BASE THREE YEAR ee wee AVERAGEAVERAGE wo een A re No.of people per year 8 , It has beenstated that CSR knew of the dangers to its workers at Wittenoom What iis sCSR'sCSR'sreaction 0 1957 Lf i 1jf,tt?epefyesyypyttltf i i | { 1971 1975 1979 1983 1987 Year of determination Over the past ten years an annual average of seven Wittenoom workers have been diagnosed as having contracted mesothelioma So far this year there have been two additional diagnoses of mesothelioma amongst former employees of Midslco at Wittenoom Based on experience over the past 46 years it is estimated that the total number of former employees and residents of Wittenoom contracting mesothelioma will be around 150 However it is expected that approximately 200 mesothelioma cases will continue to occur cach year throughout Australia into the next century This situation will be almost entirely due to the continued importation and use of asbestos after the The company's position was that it was not negligent having regard to the knowledge available and accepted at the time . s the operationof the mine and health of the workforce subjectto periodicinspection and reports by experts from Western Australian Departments of Health and Mines asbestos was not classified by the U.S. Government as hazardous substance and its use restricted until the early 1970s the mining and use of asbestos continued around~ the world through to the 1980s indeed its use continues in some countries today The continued use of asbestos throughout the world through the 1980s reflects the widespread underestimation of the now well known dangers regarding the use of asbestos It is simply not appropriate to judge the actions of the Wittenoom management and of the Western Australian authorities over the period 1943 to 1966 by the knowledge we now possess in 1989 Some commentators have alleged that the company and the senior management who lived and worked at Wittenoom with their families were aware of the risks which we now know were involved in the mining of asbestos CSR cannot accept this view To claim that these people had the knowledge of the significant risks yet continued to live and work at Wittenoom is tantamount to claiming that they were indifferent to their own safety and lives indifferent to the safety of and lives of their families and indifferent to the safety of and lives of the employees In this regard Mr Justice Rowland of the Western 11001652 Australian Supreme Court commented am not able on the evidence to find that there was a deliberate attempt to avoidknowledge or reckless disregard for the safety of the workforce or any other contumelious disregard for the rights of the plaintiffs employees Some media reports have also suggested that Midaico employees falsified safety records at Wittenoom These suggestions have no substance Cs So Rmo findfsinds these allegations reprehensible a 3. wate -- What is the present 5 People who were connected with Wittenoom but not employed by Midalco have contracted mesothelioma What is CSR doing about these people position relating to asbestos claims from Wittenoom As at 30 June 1989 303 former employees of the Wittenoommine or their dependantshad commenced action in the courts against Midalco and CSR for compensation for asbestos relatedinjuries suffered as a result oftheir working at Wittenoom Following the 1988 judgements that Midaico was regligent and that CSR by virtue of its proximity 10 Midalco also negligCSeR nantd commenced settling claims in accordance with the procedures for claims for damages for personal injuries in the State of Western Australia people ==... These are residents or former residents of the township of Wittenoom government employees either residents of or frequent visitors to the township Wittenoom and people involvedin transport to and from | There are 20"s"uch people Liability has not been established for injuries suffered by these people CSR believes the primary responsibilityin these cases ' restswith the Western Australian Government The company has however advised the State 7 Attorney that it is prepared to make a the contribution to these settlements despite were not employees fact they Former Wittenoom residents who contract an asbestos related disease and who were not Midalco employees will be offered up to 50,000 as compensation by Midalco . The process involves the claimant undergoing a medical assessment and producing relevant financial In its public statement of documentation in support of their claim . Under the agreement with Midalco's insurers the ome October 1988 CSR 24 State Government Insurance Commission of Western ee Australia SGIC ee 8 estimated its eventual Midalco are responsible for settlement of all mteh claims for those who worked at the mine prior to 1 te January 1959 liability in respect ee CSR and the SGIC are jointly responsible for settlement of all claims for those who worked at of former Wittenoom the minc after 1 January 1959 Settlement of claims is being administered by the insurers the SGIC Of the 303 claimants 220 have submitted details sufficient to commence the settlement procedure Of the 220 claims employees at a maximum of 50 million Is this still correct 86 claims have been settled Offers have been made a on further 51 claims The remaining 83 claims are currently being dealt with No. In fact it is lower about 35 million The estimate of 50 million was based on an 11001653 Rone E. analysis the 290 asbestosis and mesothelioma claims outstandingin October 1988 and assumed a further 30-60 cases of mesothelioma over the next ten years Recent experience suggests that the future incidence of asbestosis amongst former Wittenoom employees will be negligible and that the number of additional cases of mesothelioma will be less than 60 Based on experience of the settlements to date CSR is confident that the total liability for all asbestos related diseases forformer.Wittcnewiolml within the October 1988 estimate of 50 million It is CSR's understanding that these sales represented a tiny fraction of the asbestos used in the United States during this period At the time of these sales the companies the United States which used asbestos led the world in the development manufacture and application of asbestos- containing products and in knowledge regarding the properties asbestos and potential health effects company asbestos exposure the itt circumstances the Fe does believe : In April 1989 Midalco reached agreement any injuries suffered by the employees of the with the Government Insurance Commission of manufacturerswho used Wittenoom asbestos in the ere Western Australia SGIC on insurance cover for the United States . Wittenoom operations Tees Certainly British- law which Australia has Cometir The : , and the insurance contract traditionally followed does not currently recognise a agreement SGIC between Midalco and the specifically covered liability for CSR- or mates under these tes ead either Midalco claimants who worked at the mine after 1 January 1959 circumstances v ote Under the agreement the cost of settlement of - CSR has however been joined in litigation in yee re claims for people who worked atWiltenoaoftmerJanuary the United States as one of up to 30 defendants in ht total liability 50 Midalco 1959 will be shared equally between insurers the SGIC , consequencethe and the ve of million approximately 650 cases covering the period 1979 to 1989 only these 244 1989 As Junc . to be finalised remain | approximately35 CSR wilble apportioned and 15 million SGICmillion aside The provision of 50 millionMidalco am ten in set in CSR's accounts for the half year ended 30 September 1988 was has provision reduced to 35 millionin the March accounts for 1989 set In addition the company year ended 31 aside of 10.m5illionin the accounts for year ended 31 March 1989 * All other cases have been settled without reference to CSR = Nothing suggests - the remaining cases have anomalicslikely to alter CSR's position Even if the U.S. courts were to hold either CSR or Midalco liable the legal opinion available to CSRisthat the judgements would not be material and would not be enforceable in Australia to cover legal and other costs including settlement of claims by employee residents of Wittenoom 7- Recent press reports As matter of prudence CSR hasprova iprsoviisoionn in the accounts for year ending 31 March 1989 should it ever be established that CSR has a liability This provision is in addition to insurance cover that CSR has in place Accordingly if any liability is ever established the impact on CSR will not be material suggest U.S. attorneys are REFERENCES examining methods The incidence of malignant mesothelioma in Australia 1947-1980 The Medical Journal of Australia March 6 1989 e U.S. whereby judgaegmaiennstts 1979-1985 August stecpm can be enforced Vol 150 ae fe 2. The Australian Mesothelioma Surveillance Program The Medical Journal of Australia August 17 1987 Vai CSR in Australia What is CSR's position in this matter 3. The Australian Mesothelioma Surveillance Program 1986-1988 unpublished results 4. Information relating to Settal ndeSemttelenmetntss isa Reflection of Agreements and Procedures as at 30 June 1989 5. Records of the State Government Insurance Conimission of Western Australia 6. CSR records and data derived from Australian Bureau of Statistics Annual Reports From around 1950 to about 1966 asbestos fibre produced at Wittenoom was cxported to the United States 7. Information supplied by U.S. Attorneys Cleary Gottlieb Steen & Hamilton for industrial use 11001654