Document gaqdQ3g8xNw3ERxMmvwb8d5EQ

FILE NAME: Avondale (AVD) DATE: 1978 Aug 8 DOC#: AVD122 DOCUMENT DESCRIPTION: Meeting Minutes - Ad Hoc Committee Asbestos PLEAXINHTIBIFITF'S e SECA 5018 SHIPBUILDERS COUNCIL OF AMERICA Ad Hoc Committee on Asbestos Minutes The Ad Hoc Committee on Asbestos held its first meeting on August 8, 1978 at the offices of .the Shipbuilders Council of America in Washington, DC. Present were: David R. Lavalette, Ann Aya Frank R. Darling Terry G, Daughdrill Russell Guy Edwin M. Hood Frank R. Kesterman Charles Klein Donald Massengale Norman Portnoy Harold Strong Daniel Whichard Chairman General Dynamics Corp. Sun Shipbuilding & Drydock Co. National Steel S Shipbuilding Co. Litton/Ingalls Shipbuilding Bethlehem Steel Corp. Shipbuilders Council of America Shipbuilders Council of America Tenneco/Newport News Shipbuilding Litton/Ingalls Shipbuilding Todd Shipyards Corp'. Alabama Drydock & Shipbuilding Co Litton/Ingalls Shipbuilding Guests _U.S. Navy Representatives Carl H. Horst, CDR Bernard C. Stapor Marvin P. Nerseth, Jerry E. Schultz M. J. Cifrino JAGC-OJAG CDR JAGC-OJAC GENERAL DISCUSSION The Chairman lead a roundtable discussion on the numerous inter-related subjects associated with defining, controlling and compensating asbestos related diseases. It was the sense of the Committee that this information exchange should continue in the Ad h o c Committee and In the Industrial Health and Safety, Workers' Compensation and Industrial Relations Committees where appropriate. ESTABLISHING ESTIMATES OF POTENTIAL LIABILITY The Committee agreed to concentrate its initial efforts on defining the industry's potential liabilities from asbestos related claims and possible alternatives for limiting those liabilities. Accordingly, a questionnaire was developed to generate rough estimates of shipyard employment for the period 1941-present. Once the employment data has been compiled, the Committee will select a range of incidence rates for asbestos related diseases, and estimated benefits which could be paid under the Longshoremen's and Harbor Workers' Compensation Act. Using the data above and assumptions on the life expec tancy of the workforce, hypothetical liability figures are to 2 derived. Once this data is in hand, the Committee intends to prepare a report for the purpose of briefing management on the scope of the asbestos liability problem. INFORMATION EXCHANGE WITH THE NAVY The Department of the Navy has stimulated and attracted wide spread publicity on asbestos exposure. In part, this may be attributed to the April 26, 1978 Statement of Secre tary Joseph Califano, Department of Health, Education and Welfare. In that statement Secretary Califano states "I have spoken with the Secretary of Defense Harold Brown, and he has directed the Department of Defense personnel to work with us in taking appropriate steps to inform former military and Federal civilian workers in Naval Shipyards." In connection with U.s. Navy representatives attending the meeting of the Ad Hoc Committee on Asbestos, it was learned that the Office of Workers Compensation Programs, Department of Labor is presently processing 400-600 asbestos claims from present and former employees of Naval shipyards. Benefits paid to Naval shipyard employees on claims under the Federal Employees Compensation Act are reimbursed from the NAVSEA budget. Hence, there should be some incentive -- to hold down the number of claims filed. It was agreed that exchange of information was valuable and should continue in the future. ASBESTOS INFORMATION Mr. Kesterman provided the group with samples of booklets, papers and newsletters obtained from the Asbestos Information i Association. The Committee recommended that the Council sub scribe to the monthly newsletter of the i^iestos Information Association at the cost of $48/year, NEXT MEETING The next meeting will be scheduled after the attached employment questionnaires are returned to the Council. Note these questionnaires are being sent out under separate cover to the presidents of the member companies. Frank R. Kesterman Vice President and Secretary SUMMARY RESULTS ALLEGED ASBESTOS RELATED DISEASE QUESTIONNAIRE A. EMPLOYMENT (1) Years Tot. Avg. No. Employees on Payroll (as of Dec. 31) Tot. Avg. Employed Annually (Including turnover) (2) Estimated Total Different Employees (3) 1941 - 1945 1946 - 1950 1951 - 1960 1961 - 1970 1971 - 1975 440,200 80,000 81,000 104,000 146,000 704,300 128,000 129,500 166,400 233,600 1,760,800 320,000 567,000 728,000 584,000 GRAND TOTAL 4,563,800 WORKERS' COMPENSATION CLAIMS Period of Filing No. Claims Filed for Alleged Asbestos Related Diseases 1960 - 1965 5 1966 - 1970 10 1971 - 1975 159 1976 - 1978 294 THIRD PARTY AND LIABILITY ACTIONS (4) Period of Filing No. of Actions 1960 - 1965 0 1966 - 1970 3 1971 - 1975 5 1976 - 1978 125 (1) Insufficient data was reported regarding approxi mate average age of workforce. (2) Turnover rates assumed to be 60%/yr. or column 1 X 160% (3) Column 1 payroll at start of each period plus 60%/yr. x yrs. in period (4) This includes actions brought by or on behalf of members of employees family and other actions such as enjoinment by asbestos producers and/or suppliers regardless of merit or result. ASBESTOS SURVEY - REPORTING COMPANIES ALABAMA AVONDALE BATH BETHLEHEM (ALL) GENERAL DYNAMICS (ELECTRIC BOAT) GENERAL DYNAMICS (QUINCY) JACKSONVILLE LITTON-INGALLS NASSCO NEWPORT NEWS NORFOLK ROHR SEATRAIN SUN TODD (ALL) PLEASE RETURN COMMENTS TQ KESTERMAN BY DECEMBER 4th. SHIPBUILDERS COUNCIL OF AMERICA Ad Hoc Committee on Asbestos Draft Report to the Board of Directors The Ad Hoc Committee on Asbestos has reviewed the facts associated with the asbestos claim potential and has reached certain conclusions as follows: 1. The number of workers compensation claims and third party litigation actions is increasing exponentially as can be seen from the results of the SCA asbestos ques tionnaire attached. The potential liability for workers compensation alone is in the $billions. For example it has been estimated that for claims where the last exposure occurred before the 1972 amendments to the Longshoremen's and Harbor Workers' Act, the claim value will probably be under $100,000 per claim. However, where exposure last occurred after the 1972 amendments, the value of a claim will probably be in the range of $250,000-$750,000 including escalation and litigation costs. Even the most conservative assump tions made about claim experience- in the future will produce a figure which could be potentially ruinous for the industry. This is particularly true since Federal Government advisory initiatives are likely to result in claims being filed by or on behalf of a substantial portion of all respiratory disease and cancer victims who ever worked in a shipyard. Given the liberal pre sumptions under the LHWCA successful defense of unwarrented claims is exceedingly difficult. 2. It is clear that the shipbuilding/ship repair industry could not have known of the alleged correlation between asbestos exposure and cancer until the 1960's or later. In fact, the U.S. Government required asbestos to be used, provided specifications and maintained respon sibility for public health standards. Therefore, the Government is the ultimate "responsible party", even more responsible than asbestos manufacturers. The Committee believes that the case for Government respon sibility should be documented for possible use in litigation, and to convince the Government that it should support some type of indemnification of shipyards or victims. There is added merit in this concept to provide legal recourse for former employees of the many shipyards that have gone out of business. After proper preparation, it is recommended that meetings be held with the Department of Defense, Department of Labor and the Maritime Administration to gain their support for this approach.. 2 3. The indemnification sought could be in the form of "white lung" legislation or a National Toxic Substances Indemnification bill. The Committee recommends that, the Council pursue Toxic Substances indemnification legislation because of the likelihood of additional substances being related to occupational diseases and growing to epidemic proportions. In addition to as bestos, shipyards must be prepared to deal with welding fumes, lead fumes, silica dust and a host of other toxic or carcinogenic substances. The mechanics of such a legislative remedy have not been thought out. The proposed legislation would have to have sufficient safeguards on presumption of casual relationship, mal-administration, and offsets to workers compensation and social security programs. The source of funds would be the U.S.. Treasury and most likely a general tax on industry. \ --i)