Telstra soothes investors over asbestos scandal

Telstra has hit back at criticism over its handling of asbestos uncovered while remediating pits for the NBN, aiming to soothe investors worried about potential ‘material’ financial risk to the company.

Telstra late last week announced it would recruit 200 workers to supervise contractors' pit and pipe remediation work after it was revealed subcontractors in Victoria and NSW mishandled asbestos, forcing local residents to flee their homes. 

Telstra suspended the subcontractors and stopped work on pit remediation pending an urgent audit and until its contractors were given further training on asbestos handling.

Federal workplace safety agency ComCare is also inspecting the work, health and safety systems at Telstra and relevant contractors, while the Office of Asbestos Safety is creating a strategy with Telstra to deal with the safe handling of asbestos.

Telstra CEO David Thodey today said in a statement to the ASX the telco did not see any material information that needed to be disclosed to investors at this time. 

“We have been managing the risk of the asbestos within our network for many years,” he said.

“Telstra has processes for managing claims of any type from employees and the public to ensure that such claims are handled sensitively and expeditiously. We take our responsibilities very seriously in looking after our employees and the community and our highest priority is their safety and peace of mind.

“Should we form the view that there is a material financial risk to the company or any other material information that is required to be disclosed to the ASX under the Listing Rules, we will take immediate action to notify the market. We do not believe this to be the case at this time.”

Thodey will meet with Workplace Relations Minister Bill Shorten, DBCDE representatives, NBN Co and unions today. 

The Federal Government has distanced NBN Co from the issue and laid the blame squarely at the feet of Telstra. Communications Minister Stephen Conroy said it was Telstra’s responsibility to ensure its pits and ducts, leased to NBN Co, were “safe, secure and ready” prior to the NBN rollout.

Prime Minister Julia Gillard told The Courier over the weekend the relationship between Telstra and NBN Co was akin to a landlord-tenant agreement.

"If you rented a house or anyone rented a house and found asbestos in it that wouldn't be the responsibility of the renter, that would be the responsibility of the landlord to address," she said.

"This is Telstra's responsibility, squarely and simply, to have the pits and ducts in an appropriate condition.”

Following the recruitment of 200 additional workers, Telstra appointed PriceWaterhouseCoopers to review the telco’s systems and processes, and gave executive director of Telstra Network Construction John Gibbs responsibility for overseeing asbestos compliance and audit outcomes.