Financial MNC identifies Jaiprakash Associates among top world cos using asbestos, allegedly causing cancer

By Ashok Shrimali*
In its latest research report, “Asbestos: Assessing Exposure of Certain MSCI World Index Sectors”, Citi, the American multinational financial services corporation headquartered in Manhattan, New York City, has identified eight Indian companies as consuming asbestos, a product which it says “is strongly associated with disease including mesothelioma, lung cancer and asbestosis, caused by exposure to asbestos fibers.”
Pointing out that India’s asbestos cement industry accounts for 10 per cent of worldwide asbestos consumption, it says, major listed mining companies using the product are -- in Russia (Uralasbest) and Brazil (Eternit). It adds, “Jaiprakesh and a number of smaller listed Indian companies are involved in asbestos products – mainly chrysotile in asbestos cement; and Geely (HK) in the auto sector.”
The Citi analysis says, “The Asbestos Cement Products Manufacturers' Association of India (ACPMA) has a detailed website that promotes the use of chrysotile asbestos-based products. ACPMA distinguishes between the amphibole group which includes crocidolite (blue) and amosite (brown) asbestos, and the serpentine group which contains chrysotile (white) asbestos. Crocidolite tends to be regarded as the most dangerous form of asbestos.”

Pointing towards the need for analysis, Citi explains, this has been carried out “in response to interest from some Asset Owners.” It adds, “We have assessed the exposure of certain MSCI World Index sectors to current asbestos mining or production, or manufacture of products that contain asbestos. Morgan Stanley Capital International (MSCI) index is designed to measure equity market performance in global emerging markets.”
Citi further says, “ACPMA claims that only chrysotile asbestos is now mined, and that in today’s well controlled and regulated industrial plants using only chrysotile asbestos, asbestos diseases do not occur. It also claims that chrysotile-cement is safe in use. However, many countries have banned all these forms of asbestos.” It adds, “There are a number of listed Indian companies involved in asbestos products, and most are members of ACPMA.”

The Citi analysis says, the “largest of the companies it has identified is Jaiprakash Associates Limited (JAL) an India-based diversified infrastructure conglomerate. Its businesses include: engineering and construction, power (including hydropower), cement, fertilizer, real estate, expressways, hospitality, and sports and education. The company’s FY13 annual report refers to holdings in UP Asbestos Ltd, and to sales and stocks of asbestos sheets.”
The analysis further says, “Visaka Industries lists asbestos cement as one of its businesses in its August 2013 investor update. The company’s website reports that the company is the second largest cement sheet manufacturer in India, with seven factories spread across the country, producing about 650,000 tons of corrugated cement sheets per year. It also reports that its non-asbestos fiber board and panel division was established in 2009 to cater to the needs of modern construction designs, and has a capacity of 30,000 tons of sheets per year.”

Coming to the type of use the product can be put to, the Citi says, “Asbestos has insulating and fireproofing properties. It has been used in insulation (buildings, ships, industrial plant), automotive parts (eg brakes), floor, ceiling and roofing materials, asbestos cement for building applications, and fire resistant textiles. Asbestos is strongly associated with disease including mesothelioma, lung cancer and asbestosis, caused by exposure to asbestos fibers. Crocidolite (blue) asbestos tends to be regarded as the most dangerous form of asbestos.”
Pointing out that asbestos use has been significantly reduced in recent decades, it says, “It has been banned in some developed countries, and heavily regulated in others. Arguments for continued use of chrysotile (white) asbestos include weighing up cost vs damage, possible risks with alternative products, and that focus should be on innovating to improve safety given asbestos’ useful properties. A small volume of chrysotile asbestos is still used in the US.”
Coming to the places it is uses, it says, “Asbestos products including asbestos-cement continue to be widely used in some developing countries, with significant use reported in China, India, Russia, Brazil and other Asian countries. In 2012, the main asbestos mining countries were Brazil, China, Kazakhstan and Russia. US asbestos mining ceased in 2002, though imports of chrysotile from Brazil continue. Canada ceased asbestos mining in 2011.”

The analysis adds, “Over the past three decades, asbestos production (mining) and consumption (eg manufactured products) have fallen from approaching 5 million tonnes per annum to around 2 mtpa. Mine production has virtually ceased in many countries, leaving four major producers. Over the same period, asbestos use has shifted from developed to developing countries – largely chrysotile (white) asbestos used in asbestos cement.”

Giving an overview of asbestos, Citi says, it “has insulating and fireproofing properties. It has been used in insulation, automotive parts (eg brake liners, gaskets), building products, asbestos cement and fire resistant textiles.” Pointing out that “asbestos is strongly associated with disease caused by exposure to asbestos fibers”, it adds, “In 2012, major asbestos mining countries were Russia, China, Brazil and Kazakhstan.” As for India, it just produces one per cent of world asbestos production.”

Giving the reason for the report, Citi says, “This report aims to identify listed companies that are currently involved in asbestos mining or production, or manufacture of products that contain asbestos – ie companies that are currently “introducing” asbestos into “the system”. We focused this initial study on sectors most likely to include asbestos products, where asbestos may represent a significant proportion of product value: construction materials, metals & mining, building products, and construction & engineering sectors.”
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*A Gujarat-based social activist