Schools, midwifery academy and more than 90 village halls were built with cancer-causing material despite contract explicitly banning its use

Dozens of buildings – including schools and local government offices – constructed in Indonesia after the Indian Ocean tsunami with Australian aid money were riddled with asbestos, Guardian Australia can reveal.

AusAid provided $36.4m for the construction of 170 public buildings as part of its assistance to the province of Aceh after the devastating tsunami of 2004.

But documents seen by Guardian Australia show the carcinogenic building materials were used in three schools, a midwifery academy, a pharmaceutical warehouse and more than 90 local village halls used by government officials across Aceh.

Construction of the buildings began in April 2005 but it was not until more than two years later, in June 2007, that asbestos was identified in the ceilings, dividing walls and external eaves.

All contracts between AusAid – which became part of the Department of Foreign Affairs and Trade (Dfat) in 2013 – and its building providers explicitly banned the use of asbestos, which is prohibited in Australia.

But a Dfat spokesman acknowledged asbestos was used in the AusAid-funded buildings in Aceh. The materials were later removed.

“When, in 2007, AusAid became aware that products containing white asbestos had been used in 109 buildings in Aceh that AusAid had tendered out for construction, AusAid instructed the relevant contractor to replace all asbestos products at their expense,” he said.

White asbestos is hazardous, but is not banned in Indonesia and is widely used in the construction industry.

Awareness of the risks of asbestos is relatively low in Indonesia, but when residents in Banda Aceh learned in 2007 that their houses donated by the Bakrie family institution contained white asbestos, they burned down 204 of them in protest.

A Guardian source close to the AusAid case said the contracting firm GHD was concerned the discovery of asbestos in their buildings could inflame feeling among residents and even lead to diplomatic tensions.

But the Australian government spokesman said relevant Indonesian authorities were kept fully informed. “AusAid worked closely with Indonesian government throughout the process of identifying the use of asbestos in Australian-funded construction and subsequent remediation activities,” the Dfat spokesman said.

One local engineer involved in the removal in Aceh of the material containing asbestos, found in a product called GRC board, said the process was subject to strict rules.

“When you saw the procedure, it was like from another planet, special uniforms, everything special, just like when you are in a contamination area like in a spaceship movie,” said the engineer, who asked to remain anonymous.

During the removal, workers wore protective suits and double filter masks, while the perimeters of the buildings were cordoned off with police tape.

Most of the 109 buildings were more than half finished when the removal started, but some of the local government buildings had already been completed.

While safety precautions were taken during the removal, the construction engineer expressed concern that labourers who initially installed the GRC product could have been exposed to the hazardous fibres.

“The concern first is for the labourers who first worked to put in the ceiling, because they cut the panels and installed them,” he said.

When material that contains asbestos is cut, dusted, sanded or drilled, microscopic asbestos fibres are released.

These fibres can be inhaled and can cause a range of fatal diseases, including lung cancer, which in many cases develop decades later.

After the removal of the material from the 109 buildings in Aceh, it was double-wrapped in plastic before being dumped at designated disposal sites.

But measures to dispose of the material safely were also compromised. Guardian Australia has been told local people ripped open the packages and took the plastic to resell. The material was later wrapped in plastic again and quickly buried.

Further complicating the remediation process, GHD also oversaw the renovation of buildings that contained asbestos from earlier times.

In those cases GHD removed only the material it was directly responsible for installing, replacing it with an asbestos-free product at a cost to the company of $3m. To remove all the old asbestos, Guardian Australia was told, would have been like opening up a “Pandora’s box”.

In September 2008 AusAid provided $5m for an asset mapping assistance project (Amap) to assess construction since the tsunami and determine how widely asbestos had been used.

A report of that project in November 2009 noted the need to document and manage the use of hazardous building materials (HBM) across Aceh province, especially in Aceh Jaya, “where major HBM problems exist”.

But the Amap report noted that mapping of hazardous building materials, including asbestos, had been “limited”.

Guardian Australia understands that when asbestos was identified in the AusAid-funded building, GHD expressed concern that asbestos might also be present in many other buildings.

However Hanief Arie, a former deputy of the Aceh Rehabilitation and Reconstruction Agency (BRR) said there was only one case of asbestos in Aceh, involving a foundation that built houses. That foundation was asked to remove the hazardous material.

The Indonesian government declined to comment on why the use of asbestos was never comprehensively mapped in Aceh, in contravention of the objectives of Amap.