US Asbestos trade (ASBESTOS Case)

     CASE NUMBER:   280
     CASE MNEMONIC: ASBESTOS
     CASE NAME:     US Asbestos trade and Canada


 Description of TED
categories and clusters


A. IDENTIFICATION

1. The Issue

The Illinois state Supreme Court recently accepted a petition by 
CSR limited (an Australia asbestos exporter). In the petition,  CSR
asserted that Illinois court has no jurisdiction because CSR  "has
never done any business" in the state, and had "no knowledge or
information and never anticipated "that its products were
transported to Illinois by Manville(the American  importer) This
court result means it has become more difficult  for plaintiffs to
sue the mining company abroad in the states.  The other problem is
about the damage coming from old asbestos  that already used
especially for real estates. Relating to this  problem, the
judgment of the Canadian court is very strict for  the plaintiffs. 
The plaintiffs must prove some degree of company fault, unlike in
the US, because Canada does not have  a strict product liability
law yet. Therefore, if the persons who were damaged by products of
Canadian asbestos companies want to  sue them, they have to expect
a more difficult trial than one held in the US.  In addition, with
the decline in consumption of raw asbestos in US manufacturing,
coupled with the introduction of asbestos substitutes into product
design, the asbestos construction  industry has shifted away from
activities associated with installing asbestos products. Instead,
in the last decade concern over the public risk presented by
damaged asbestos in  place, as well as the practical need to
maintain  aging interio r sections in commercial and residential
buildings, has directed  the asbestos construction industry to the
areas of demolition,  removal, and renovation. As Canada is largest
consumer of US  construction materials, ioncluding asbestos.

2. Description
     
     Asbestos is the most commonly used construction material
(mainly for insulation) in the world. It is a substance that has
brought many advantages to producers and to consumers:  asbestos
fiber resists heat and coal and sound; it strengthens  cement
sheeting and pipes that carry water and sewage. However, it also
causes a number of appalling diseases that have ruined  the lives
of asbestos workers and the consumers of asbestos products. 

     Asbestos has been used since prehistoric times. There are a 
number of different references to the mineral from classic Roman 
sources. The ancient Greeks used asbestos in wick making, and 
Charlemagne had a tablecloth woven from the fiber with which he 
used to entertain guests because of its fire-resistant
properties. During the second half of the nineteenth century, 
asbestos was incorporated into the manufacture of Italian 
banknotes, and it came to be used widely in a number of European 
states in paper making. Large-scale exploitation of the mineral 
for commercial purposes started at Thetford in 1879. In its first
year Thetford produced a mere 300 tons of fiber. By 1920 world
production of fiber had reached 20,000 tons. That is less than half
of one percent of output levels for 1976. 
     
     By 1927, X-rays came into use and more specific distinctions
became  possible.  They revealed that two-thirds of all asbestos
workers had abnormal lungs. By the 1970s, even among scientists
themselves the opinions about hazards of asbestos were different.
However, by 1970s, many scientists had implicated asbestos as a
cause of lung cancer. In the United Kingdom and the United States,
asbestos industries were threatened by a flood litigation that had
first begun in the early 1970s.  The payouts of the industries  for
successful claims has increased.  "At least one court has concluded
that the asbestos manufacturing industry knew about the dangers of
airborne asbestos fibers as early as the mid-1930s."1  Recently,
the Government has legislated regulations for asbestos. There are
many regulations protecting children,  employees, tenants, workers
and others from exposure to asbestos. Therefore, the problem for
asbestos firms shifted to that of bankruptcy because of the such
huge amount of payment of settlements. 
     
     However, problems of suing foreign industries and of
liabilities of secondary manufactures remained. As mentioned 
above, most of the claims by miners are in the process of being 
resolution. Therefore, the two different problems are becoming 
more important.  There are still many buildings that include
asbestos. In addition, consumers do not notice that where the
material asbestos is from and where they claim about the liability
of the material. In the case against industry abroad, the problems
of jurisdiction arise. Litigation  sometimes brings a disappointing
result to the plaintiff. In  most cases, plaintiffs have to prove
the industry's liability.  This process is usually harder in
foreign countries. There is  also no special rule for damages by
secondary manufactures.  Therefore plaintiffs have to follow same
procedures that of  international litigation. In Canada, the
problem is very serious because Canada is the largest consumer of
U.S. nonlumber building products. Moreover, recently U.S. exports
of construction materials are increasing because the U.S.-Canada
Free Trade  Agreement improved market access for both countries.
Similar results could come from implementation of the North
American Free Trade Agreement (NAFTA). 
     
3. Related Cases
     
CORAL case
COBALT case
BRAGOLD case
CEMEX case
GEDDES case
TRAIL case
BAUXITE case

     Keyword Clusters
     1. Trade Product=ASBESTOS
     2. Bio-geography=TEMPerate
     3. Environmental Problem=Health

4. Draft Author: Yasuko Mita (May, 1996)
     
B. LEGAL Clusters

5. Discourse and Status: DISagreement and ALLEGE
     
Though new legislation is needed to solve the current problems of
asbestos, there is no legislation good enough to  solve them. The
problems seem very complex because of their international nature. 

6. Forum and Scope: USA and UNILATeral

7. Decision Breadth: 2 (USA, CANADA)

8. Legal Standing: Law
     
     OSHA (the U.S. Occupational Safety and Health
Administration) has significantly increased the obligations of 
certain building or facility owners and managers to protect not 
only their employees but also other potentially exposed workers 
from the hazards of asbestos. However, there are still problems 
about treatment of undamaged asbestos and parallel liability of  a
manufacturer. 

C. GEOGRAPHIC Clusters
     
9. Geographic Locations

  1. Geographic Domain: NAMER
 
  2. Geographic Site: Eastern NAMER
  
  3. Geographic Impact: USA

10. Sub-National Factors: NO

11. Type of Habitat: TEMPerate

D. Trade Cluster

12. Type of Measure: REGSTD

There are no regulations for the problems about treatment of 
undamaged asbestos and parallel liability of a manufacturer. 

13. Direct vs. Indirect Impacts: Indirect
     
Import of asbestos into the US has been already regulated.  The
current problems about the asbestos that are already used in 
manufactures.

14. Relation of Measure to Environmental impact

     1. Directly Related:     YES       Asbestos
     2. Indirectly Related:   NO
     3. Not Related:          NO
     4. Process Related:      YES       Health

15. Trade Product Identification: Asbestos

16. Economic Data

Total U.S. asbestos consumption declined 6 percent in 1992  from a
level of roughly 35 thousand metric tons. According to the Bureau
of Mines, 1991 apparent consumption of asbestos in  the United
States was 34,765 metric tons. With all of the 32.8  thousand
metric tons used in final products in 1992, 31.6 thousand metric
tons were imported, at a value of $7.2 million  dollars.  World
production in 1992 was an estimated 3.1 million metric tons.

                            Table 1.
     Total US asbestos consumption: 1993 (metric tons)

          1991           1992

          34,765         32,679

In July 1989, the Environmental Protection Agency issued a  final
rule under section 6 of the Toxic Substances Control Act  to
prohibit the future manufacture, importation, processing, and 
distribution of asbestos in almost all products. The Asbestos  Ban
and Phaseout Rule (40 CFR 763.160) were scheduled to eliminate
asbestos in most commercial products in three stages over seven
years beginning in 1990 and ending in 1996. EPA's asbestos rule was
challenged in U.S. court by the asbestos industry. In October 1991,
the U.S. Fifth Circuit Court of Appeals vacated and remanded 
most of the ban and phaseout rule to EPA. As a result of the Court
decision, most asbestos products are no longer subject to the ban
and phaseout rule. The Court chose to let stand EPA's  authority to
ban products that no longer are being produced in  or imported into
the United States. 

Consumption of asbestos products in the United States has  declined
in recent years due to technological, regulatory and  economic
factors. U.S. manufacturers have modified product design to either
(1) accommodate the use of asbestos substitutes or (2) eliminate
the need for fibrous materials altogether. Examples of asbestos 
substitutes include aramid fiber, carbon fiber, cellulose fibe r,
ceramic fiber, fibrous glass, organic fiber, steel fibers, and 
wollastonite. The following products have been successfully 
introduced as alternatives to asbestos: aluminum, vinyl and wood 
siding; aluminum and fiberglass sheet; asphalt coatings; ductile 
iron pipe; polyvinylchloride pipe; prestressed and reinforced 
concrete pipe; and semimetallic brakes. Although the introduction
of asbestos substitutes and alternatives enables  manufacturers to
avoid contact with asbestos, many of these surrogates pose
occupational health hazards of varying degrees. 

Despite the decline in U.S. consumption of asbestos, foreign
markets continue to demand U.S. asbestos products. The export and
re-export of asbestos fibers and asbestos products from the  United
States were valued at $140.8 million in 1992, an increase of 14
percent from the 1991 level.

                            Table 2.
   US Trade Patterns in 1992 (in millions of dollars, percent)

                   Exports Top Five Countries

                    Value          Share
Canada              915            41.9
Mexico              215             9.9
Japan               99              4.5
Hong Kong           77              3.5
United Kingdom      70              3.2

17. Impact of Measure on Trade Competitiveness: High

18. Industry Sector: Mine

19. Exporter and Importer: Canada and USA

E. ENVIRONMENT Cluster

20. Environmental Problem Type: Health

21. Name, Type, and  Diversity of Species

22. Impact and Effect: High and Product
     
23. Urgency and Lifetime: High and 10-20 years

24. Substitutes: Biodegradable products

VI. OTHER Factors

25. Culture: No

26. Human Rights: Yes

27. Trans-Boundary Issues: No

28. Relevant Literature

Foster, Kenneth R., Bernstein, David E. and Huber, Peter W. 
eds."Phantom Risk" The MIT Press,1993.

Levy, J. Stanley. "The Impact of Asbestos on Real Estate."
Practising Law Institute, February 1989.

McCulloch, Jock. "Asbestos; Its Human Cost." University of
Queensland Press,1986.

Olson, Kristin. "Legal Aspects of Asbestos Abatement." National  
Organization on Legal Problems of Education, June 1986.

                           References

1    Kristin Olson. "Legal aspects of asbestos." National
Organization on Legal Problems of Education, June 1986.