Insulation industry news from Global Insulation

Denmark: The Danish Maritime and Commercial Court has ruled that Danish insulation materials producer Rockwool International has violated marketing laws by describing insulation materials based on foam plastic 'in an unnecessarily frightening manner' in a newsletter. Trade organisation The Danish Plastics Federation submitted a complaint against Rockwool's description.

The court stated that Rockwool exaggerated the negative consequences of a rival's product. Rockwool has not been ordered to pay damages to the organisation as it has not been established that the rival had suffered financially from Rockwool's actions.

US: A proposed Californian state legal bill threatens to phase out potentially toxic flame-retardants in foam insulation. The chemical industry has opposed the bill arguing that the move jeopardises energy-efficiency measures and doesn't take into account forthcoming legislation.

The sponsor of the bill, the US Green Building Council of California, said in a supporting letter that the bill is necessary because the adverse effects on health by halogenated organic compounds in flame-retardants are well documented.

However, the American Chemistry Council (ACC) has stated that the bill will unnecessarily circumvent the Department of Toxic Substances Control's forthcoming green chemistry regulations, which will identify potentially problematic chemicals in consumer products. The ACC added that, "Since buildings account for an estimated 36% of total energy use and 30% of greenhouse gas emissions in the United States, California should be encouraging, not discouraging, the use of energy-saving building materials."

The bill is scheduled to be heard by the Assembly Natural Resources Committee on 29 April 2013.

China: China's Ministry of Public Security has announced that it will cease restrictions on certain insulation materials that were previously recognised as flammable materials, according to the website of the ministry's Fire Department. Polyurethane will become the biggest beneficiary of the relaxation to the existing rules. According to analysts, China's annual building insulation materials market capacity may reach US$16bn by the end of 2015.

US: Masco Corp has agreed to pay US$75m to settle a massive price-fixing case in the US. The settlement was agreed on the eve of a trial in US District Court in Atlanta to settle the antitrust class action with 369 independent fibreglass insulation contractors who are the company's competitors in the insulation installation business.

Masco's settlement augments an earlier US$37m settlement with four other fibreglass insulation manufacturers - Johns Manville, CertainTeed Corp, Knauf Insulation and Guardian Fiberglass Inc - who were accused of colluding with Masco and had also been named as defendants in the suit. Another manufacturer, Owens Corning, filed for bankruptcy protection before the suit was filed and was not named as a defendant.

In a news release Masco said that it has reached 'an agreement in principle' to settle the litigation. "While we continue to deny that the challenged conduct was unlawful and we do not admit to any wrongdoing this business decision eliminates the considerable expense and uncertainty of continued litigation and is in the best interest of the company and its shareholders."

US: Masco Corp. is due to face a class action antitrust lawsuit at a district court in Atlanta on 23 July 2012. The lawsuit will examine whether the leading US insulation installer has abused its market dominance.

Nearly 370 companies that install insulation in homes accuse Masco of having conspired with makers of fibreglass insulation between 1999 and 2003 to ensure that other installers paid much more than Masco for the material. The suit argues that Masco agreed to accept price increases so long as the manufacturers charged other installers even more when prices went higher, preserving Masco's cost advantage.

The insulation installers are now seeking about US$250m in damages. Under antitrust law any damages awarded are automatically tripled. The four makers of insulation - Johns Manville, CertainTeed Corp., Knauf Insulation GmbH and Guardian Fiberglass Inc. - that were also named in the suit against Masco previously agreed to pay a total of US$37.3m to settle claims made by the insulation installers in 2008.

A Masco spokeswoman said that the allegations are 'baseless' and that the company, "intends to continue to defend itself vigorously." In a recent securities filing Masco said it can't 'reliably estimate' the damages that could result from an adverse ruling in the case.

Masco is the biggest installer of insulation made by other companies in new homes in the US. Its market share has been estimated at 40-60%.

Australia: A company that was engaged under the federal government's former home insulation programme will be prosecuted for allegedly underpaying five Somali teenagers an estimated USD25,700, following a national audit of the scheme. It is understood that the teenagers told federal workplace inspectors they were asked only for their names and mobile phone numbers when employed in 2010 by Louay Soliman and his company, K & L Insulation Pty Ltd. The workers, all Somali immigrants aged 18 and 19 at the time, alleged they were not given training or any protective equipment, apart from masks.

The Fair Work Ombudsman alleges that Mr Soliman and his company, based in the north Melbourne suburb of Campbellfield, underpaid the five employees a total of USD25,700 over several weeks in March and April 2010. Court documents filed by the Fair Work Ombudsman allege the employees worked up to 10 hours a day, six days a week and in some cases were paid flat rates equating to as little as USD10.10/hr.

Under the modern award that applied to their positions, the workers were entitled to hourly rates of USD16.30 for normal hours worked, up to USD31.8/hr for overtime and weekend work and up to USD40.1/hr on public holidays. It is alleged that the employees were underpaid with respect to other entitlements, including accrued annual leave and wages in lieu of notice after their employment was terminated without notice.

The government's insulation scheme came in for heavy criticism in 2009-2010 following a number of worker deaths attributed to electrified foil insulation inside roof cavities and heat-exhaustion. Many were critical of the speed with which the government attempted to implement the plans in order to create jobs at a time of recession, claiming that there were insufficient checks to stop malpractice, unfair treatment of workers and violations of health and safety. The company cited in this case was established in December 2009.