Swiss manufacturer's asbestos compensation fund draws fire

NIEDERURNEN, Switzerland—A Swiss building products company has established a 1.25 million Swiss francs ($983,750) fund to provide aid to former employees and residents near its factories who suffer from asbestos-related illnesses, a move that is drawing fire from legal advocates for the victims.

Eternit A.G. is developing guidelines for distribution of the funds that will go to claimants according to the degree of their financial need, a spokesman for the Niederurnen, Switzerland-based company said. For decades, the company produced roofing and building facade products that contained asbestos, which it stopped using in 1994.

The size of the Eternit fund is attracting some criticism.

"In my eyes, 1.25 million (Swiss francs) is ridiculous," said Massimo Aliotta, president of the Winterthur, Switzerland-based Asbestos Victims Association, a group that provides legal services to those affected by asbestos. "It's not enough at all," he said.

It's unknown how many former workers and others will need compensation from the fund out of hundreds that could apply for the payments, Mr. Aliotta said.

Claimants will have to show that they suffer from an asbestos-related illness and need the money, the Eternit spokesman said. No timetable has been developed as to when payments will begin.

Apart from former employees, people who live or once lived near Eternit's two plants, in Niederurnen and Payerne, Switzerland, are eligible for payments if they are sick because of asbestos and can demonstrate to the company that financial need has arisen because of the illness. Relatives of deceased workers and residents also may be eligible for recoveries under the fund.

Decisions on who gets the money will be made by Eternit and not the courts, the company spokesman said. Payments are funded by the company and no insurance coverage is in place to provide the compensation, he said.

Eternit employees made ill by asbestos already are eligible for payments from the Swiss Accident Insurance Fund, commonly called SUVA, which writes obligatory accident insurance for manufacturers and other policyholders.

SUVA is making payments to 70 Eternit claimants, the spokesman noted. Eternit, in turn, is required to pay SUVA about 500,000 Swiss francs ($393,500) per year to help fund those payments, he pointed out.

Eternit did not produce products with brittle asbestos and, as long as buildings made with the company's materials are undisturbed, the asbestos is harmless, the spokesman said. "If you have it in a house, it is no problem," he said. "It is fixed in the material."

The only way the asbestos can be released from Eternit materials is by machinery that grinds the material into dust, an unlikely scenario given regulations addressing the removal and disposal of asbestos, the spokesman said.

Eternit established the fund shortly after a judge earlier this month completed an investigation as to whether the company should be held responsible for workers' asbestos-related illnesses.

In response to a suit filed a year ago by the Asbestos Victims Assn., the judge decided that the prescriptive period for hearing an action related to the ill workers and residents had lapsed, Mr. Aliotta said.

The association plans to pursue its case in a higher court, Mr. Aliotta said.

The Eternit spokesman said he expects the company to prevail in that action as well.