South Africa: Silicosis – Unpacking the Gold Mines’ Strategy
The appeal by the country’s biggest gold mining companies against last year’s decision by the South Gauteng High Court to allow sick gold miners to fight for compensation as a group is to be heard in the Supreme Court of Appeal in May.
The Court ruled in May last year that some 100 representatives of mineworkers affected by silicosis and TB could bring a class action against 80 gold mining operators and mining houses.
The Occupational Lung Disease Working Group, (OLDWG), consisting of the chief executives of the largest gold producers – African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields, Harmony, and Sibanye – has appealed the decision.
If the Supreme Court upholds the certification by the High Court, OLDWG will likely appeal to the Constitutional Court.
The mining companies’ strategy is to use appeals to delay any trial on the merits of the case for as long as possible while they manage a negotiation process away from judicial oversight. This process brings together senior negotiators and administrators from the Departments of Labour, Health, and Mineral Resources, the five biggest mining trade unions and the gold producers.
The process began under the auspices of the Presidential Task Team on Distressed Mining Communities set up by acting President Kgalema Motlanthe and now under the custodianship of Minister Jeff Radebe, who in turn has entrusted it operationally to Deputy Minister of Mineral Resources, Godfrey Oliphant.
The mines have commissioned the large International law firm Bowman Gillfillan’s John Brand to facilitate this complicated and cumbersome settlement process. The objective is an out-of- court financial settlement with the claimants’ legal representative, with the money to be used to set up a 10 to 15 year Trust Fund. The fund would pay “top-ups” to workers who have been compensated by the Department of Health for silicosis and/or TB contracted on the mines in terms of the Occupational Diseases in Mines and Works Act (ODIMWA).
The fund would also be used to help the Department of Health identify and find eligible sick workers through the “one-stop shops” in gold mining and rural areas, and process their claims.
Through the Ku-Riha project, the fund would also help the Department sort out the colossal mess which is the Mining Compensation Fund with a backlog of around 100,000 unpaid claims for silicosis and TB.
And, crucially, all future mineworkers would be brought under the Compensation for Occupational Injuries and Diseases Act (COIDA) and the Department of Labour, instead of ODIMWA and the Department of Health.
This shift is to take place without any loss of benefits under ODIMWA. These include lifetime free medical examinations for silicosis/TB, and benefit payouts for these diseases on the basis of heart and lung autopsies when miners die, of any cause, during or after their mine service. These benefits do not currently apply under COIDA.
The move to COIDA would improve the paltry level and type of benefits provided to mineworkers by ODIMWA, by entitling some of them to lifetime pensions, payouts to dependents when they die, and higher compensation in general. But it would also tie them into a cast-iron “no fault” compensation system, which would close the door on any future civil litigation for damages for employer negligence causing silicosis and TB.
As far as OLDWG is concerned, the creation of the Trust Fund implies moving silicosis and TB liability from ODIMWA to COIDA for the future, and the sick workers dropping their class action suit. The main stakeholders in the negotiation appear to agree on the main points above.
After discussions with unions and government last year, OLDWG was confident that the move to COIDA could be achieved by the end of 2016. That deadline has come and gone, and has not been replaced by a new estimate. However, the normal procedure for mining-related legislation is that a draft bill is discussed between the Department of Mineral Resources and the Chamber of Mines, after which it is gazetted for public comment for 30 days, and then goes to NEDLAC for finalisation. Current amendments to the Mines Safety and Health Act – much less complex than the Working Group proposal – have been there for two years, while a badly-drafted amendment to COIDA in 2012 never saw the light of day. From NEDLAC, the Cabinet considers the draft bill, and refers it to Parliament for deliberation, in this case involving the Labour and Health portfolio committees.
So far, the first step, a draft bill, is conspicuous by its absence.
The question of how long it will take is crucial because the death rate of the sick workers involved in the litigation is high, and their claims will die with them, unless the Trust Fund settlement is expedited.
OLDWG has stated that is “possible” by the end of 2017, and that it may include settlement for dependents of claimants who die without receiving anything, despite the fact that OLDWG has appealed the ruling to this effect along with every other aspect of judgement on the class action certification by the South Gauteng High Court. Death of claimants without settlement was the main reason why their lawyers settled for R464 million for 4,365 former mineworkers with silicosis in the Qubeka versus Anglo American and Anglogold case in 2016, establishing the Qhubeka Trust to pay out the workers in that litigation. Similarly, in Blom versus Anglo American in 2013, the first-ever private settlement of a silicosis damage suit in South Africa, 23 silicotic former mineworkers were paid out an undisclosed sum with no admission of liability on the part of Anglo, again because they were dying fast.
Delays to compensation for mineworkers are built into the complex negotiations under way. If the “top-up” payouts by the Trust are to be combined with compensation via ODIMWA, this would greatly extend the period of waiting for financial relief.
GroundUp put this question to Alan Fine of Russell and Associates, the public relations firm hired by OLDWG to liaise with the media and public over its silicosis/TB class action resolution strategy. “Payouts of the ‘top-up’ will be dependent on proof of compensable illness, but claimants will not necessarily have to go through the entire ODIMWA award process,” he said. This implies that the “top up” may be paid to claimants before they receive – at some unspecified future time – what they are owed under ODIMWA. “Down payment” would seem a more appropriate term in this instance than “top-up”.
Fine also said that OLDWG and the Chamber of Mines had put tens of millions of rands into the Ku-Riha project and the one-stop shops, into funding staff positions in the Mines Compensation Commissioner’s office in the Department of Health, and had seconded a chief operating officer, project manager, and medical staff to the Commissioner’s office, as well as financing digitalisation of hundreds of thousands of mineworkers’ records, and assisting with one- stop shops to find and help claimants. “The combined effect of this has been to triple the rate of payments to claimants between the years 2014-6,” he said.
This statement should be interpreted however with caution, because to this day, there are still only two “one-stop shops” up and running, with others promised in Burgersfort and Kuruman not yet operational. Worse, Dr Barry Kistnasamy, the Mines Compensation Commissioner, told the Parliament’s portfolio committee on Health on 7 September 2016, that it would take 19 years to get through the backlog of unpaid medically certified claims sitting at the Commissioner’s office. And, he said, compensation would cost not tens, but hundreds of millions of rands – his estimate to the Committee was R500 million.
Graham Briggs, former CEO of Harmony, speaking at the recent International Mining Indaba in Cape Town, said that although an academic study had estimated the number of potential claimants at 280,000, the figure was likely too high. He did not explain which study he was referring to, and exactly how it was flawed, or perhaps outdated because of death of potential beneficiaries from their occupational disease. Even an estimate of 100,000 was too high, he said.
This suggests that the amount of money the mines are considering putting into the Trust Fund will be based on a very conservative estimate of the number of eligible claimants, rather than on what the in-principle criteria should be for payouts irrespective of the actual number of claimants who come forward. A court would consider, for each claimant, factors like income lost both by former mineworkers and by those who care for them due to their disease, and medical and transport costs already incurred, as well as pain and suffering. That is the crucial difference between a negotiated settlement out of court, and a court determination of damages.
The snail’s pace at which the ODIMWA machinery is being fixed despite OLDWG’s limited financial and other assistance, and and similarly halting progress on identifying beneficiaries because of the slow roll-out of one-stop shops suggest that the number of ultimate beneficiaries identified will be a small proportion of those who are sick and dying.
The immense backlog in silicosis/TB benefit disbursement is not the only backlog in social security money owed to ex-mineworkers. The other is the matter of mineworkers’ provident fund payouts. On 30 May 2014, Deputy Minister Oliphant estimated that the Mining Industry Pension Fund, negotiated by the NUM with the Chamber of Mines in the 1980s, had accumulated R30 billion in unpaid pension and provident fund payments for around 200,000 retired or retrenched mineworkers. Pilot projects were underway to find the mineworkers, Olifant said, but cautioned that despite inquiries to TEBA (which possesses 1.5 million records of African ex-mineworkers going back decades) and a public radio campaign in the Eastern Cape, Limpopo, Kwazulu, the North West Province, Botswana, Mozambique and Swaziland which yielded 25,500 responses, less than one hundred back-payments of provident fund benefits had been made. He promised to redouble efforts to reduce the backlog, in a mirror image of the same situation around the silicosis/TB issue.
Huge numbers of living ex-mineworkers and their families therefore continue to wait to be paid what they are owed in social security benefits due to rampant disease and long service in the gold mines. They are the descendants (literally in many cases) of people from all over the region who built modern industrialised South Africa. They are owed a lot of money by the mines and by the South African state. It is to be hoped that neither will sneak out of the restaurant after their century-long slap-up meal of profit, foreign exchange, and fiscal treasure, without settling the bill.