The Rotten Elite

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If you want to know what’s wrong with Australia today, take a look at the career of one of our favourite daughters: Meredith Hellicar.

Australian society has been kind to Hellicar. From her comfortable middle-class origins in Sydney she rose quickly to the top of Australia’s business elite. In an era when success in business automatically equated to wealth, power and social prestige, Hellicar has drunk deeply from the trough of all these things, as a glance at her biography on the Australian Institute of Company Directors website reveals.

Hellicar effectively resigned from the last of her directorships on Friday. Until then, she was a director of Amalgamated Holdings and financial giant AMP. Hellicar has also held director’s positions for the prestigious, biomedical research, non-profit, Garvan Institute and Sydney right-wing think-tank, the Sydney Institute.

Previous board memberships included roles as Chair of HLA Envirosciences, Chair of the Sydney Institute, director of the NSW Treasury Corporation, Sydney Airport, HCS Limited, and Aurion Gold. Her experience even includes being a member of the federal Government’s Takeovers Panel.

So many board positions has Hellicar enjoyed that she formally listed her occupation as "company director".

It’s a lucrative profession: according to this report in The Australian, she netted $407,000 in 2009, which works out as $14,535 for each AMP board meeting she attended (AMP’s board is apparently no stranger to controversial directors, with Allco Finance’s David Clarke also standing for re-election).

Company directors in Australia generally come from a small pool, which is defined not so much for the talent in it as for the corporate power and prestige it contains. Once inside this exclusive club, lucky members have just about got it made for life. 

A former diplomat at the Department of Foreign Affairs, Hellicar went into law and eventually rose to become CEO of law firm Corrs Chamber Westgarth. According to the Australian Financial Review‘s Angus Grigg, "she was the corporate relations manager at New Zealand property developer Chase Corp, which collapsed after the boom of the 1980s. From there it was on to Bond Brewing, which also collapsed. Then she was a lobbyist for the NSW Coal Association, before jumping the fence and joining the state’s Environment Protection Agency."

In 2003, Hellicar was even awarded a Centenary Medal for her "service to Australian society in business leadership".

But this high-profile member of Australia’s business elite was also involved in one of the most profoundly immoral acts of Australian corporate history: the attempt to move James Hardie to the jurisdiction of the Netherlands where it would no longer be liable for asbestos claims.

In perhaps the biggest indictment of all, this move was always legal. It was James Hardie’s deceitful insistence that their asbestos compensation foundation was "fully funded" that led to ASIC bringing its civil case against them.

Last Thursday, a judge found that Hellicar knowingly released a statement to the Australian Stock Exchange in 2001 which claimed that the Medical Research and Compensation Foundation, which had been set up to meet the corporation’s obligations to dying workers who had inhaled asbestos was "fully funded".

Hellicar, a board member at the time who went on to become the Chair of James Hardie, was found to have been in breach of section 180 of the Corporations Act for her role in those decisions.

As Justice Gzell’s decision establishes, James Hardie’s claim in its press release that the asbestos foundation was "fully funded" was a lie.

Justice Gzell reserved his most stinging language for Hellicar. "I have grave doubts about her evidence," his judgment read. "There was a dogmatism in her testimony that I do not accept. She was proved to be inaccurate on a number of occasions. I found Ms Hellicar to be a most unsatisfactory witness."

The James Hardie decision also exposes the fundamental immorality of "corporate governance" for what it so often is: naked greed. After all, in one respect, James Hardie’s board thought it was doing the right thing, by acting to minimise the corporation’s liabilities. Who cares if those liabilities were sick and dying workers? The corporation would even try and claim payments to victims were tax deductible. It is now claiming that because of the downturn in the US housing market, it won’t be able to pay anything into the compensation fund this year. James Hardie remains a rogue corporation.

The James Hardie decision also illustrates one of the critical problems of modern capitalism: that much of what we call "economic growth" is not really growth at all, but merely the removal of costs and liabilities from corporate balance sheets.

This is exactly what Hellicar and James Hardie sought to do with the company’s asbestos liabilities. Most of the claims against James Hardie originated from two companies that it owned, Amaca (a building materials company) and Amaba (which manufactured brake linings). Between 1996 and 2001 the assets in these companies were transferred ultimately to a new corporation listed in the Netherlands, James Hardie Industries NV. Hellicar could hardly have been unaware of this process, as she was on the board when, in 2003, James Hardie blithely cancelled $1.9 billion in payments for the compensation fund from the Netherlands parent company "without informing the court or the stock exchange".

All the while, former workers were dying. According to this briefing by the Parliamentary Library, "Mesothelioma (cancer of the chest cavity) can emerge 40 years after exposure. Since 1945 about 7000 Australians have died from this disease, estimated to rise to 18,000 by 2020. Other asbestos-related cancers may be around 30,000–40,000 by the same time."

All Meredith Hellicar may face is a fine.

This article has been edited since it was published on 27 April.

Ben Eltham

Ben Eltham is New Matilda's National Affairs Correspondent.

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