Economic Impact of the Proposed Ban on Chrysotile in Thailand: Case of Chrysotile Roofing Tiles

Dr. Ingwei Huang, Ph.D. – Department of Business Economics Assumption University

Introduction:

Chrysotile is a major ingredient used in the production of high-density cement products such as corrugated sheets, cement flat sheets, vinyl floor tiles, cement pipes and friable materials like thermal insulation. In Thailand, chrysotile is used mainly in the production of high density roofing materials and has been in use for more than 50 years. The use of this type of roofing had been widespread particularly in rural and provincial areas where users have identified the product as cheap, durable, and suitable for utilization in agricultural and industrial purposes, given the peculiarities of Thailand’s climate.

On April 12, 2011, the Government of Thailand adopted a proposal to ban the import of chrysotile and the production of chrysotile containing products in Thailand to be substituted with non-chrysotile based alternatives. Although the regulation has not yet been implemented, some producers in Thailand have begun production of substitute, non-chrysotile containing roofing products, despite of ambiguity in the quality and durability of these substitutes as compared to chrysotile containing roofing materials.

This paper studies the potential effects of the proposed ban on chrysotile containing products in the Thai economy with an emphasis on the high density roofing tile sector. Selection of this specific sector was based on its dominance in the range of products currently using chrysotile in Thailand. Specifically, this study estimates the costs of using substitute products as well as replacement costs and durability of non-chrysotile products in the Thai roofing tile industry.

Results and Recommendations

The study found evidence that non-chrysotile roofing tiles have lower quality and durability than chrysotile roofing tiles, and tend to have shorter product life spans, requiring replacement approximately every 2 – 8 years. This difference implies that the cost of substitute materials could be up to ten times higher than chrysotile containing roofing tiles, assuming comparative utilization after 20 years.

In addition, it was found that the proposed ban on chrysotile in this sector would generate a direct impact on manufacturers, employees and consumers (i.e. costs incurred on households, the business sector and the government sector). Indirect impact was found to be minimal. Finally, the induced impact of the proposed ban is significant and reflects replacement costs for substitute products, governmental costs to implement the ban, and possible litigation and compensation costs that could result in the long run.

The study found that the estimated cost to consumers would be approximately 464 billion baht.

The study recommends that it is important for the Thai Government to consider the economic impact from the proposed ban on chrysotile carefully before proceeding, as any ban could lead to large costs to the economy both in the short run and long run. Furthermore, there is a need for the Thai Government to investigate possible evidence of any health dangers as a result of the use of chrysotile in high density roofing material in Thailand and to clarify whether a ban on chrysotile or a safe-use policy is necessary. Finally, in the event that a ban is implemented, there is a need for the Thai Government to support the development of substitute products that are comparable in quality and durability to chrysotile containing roofing tiles so that future economic costs could be minimized.

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