Compensation Commissioner for Occupational Diseases (CCOD) on its 2012 Annual Performance Plan

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Health

15 May 2012
Chairperson: Dr B Goqwana (ANC)
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Meeting Summary

The Department of Health (DOH) briefly outlined the challenges faced by the Compensation Commissioner for Occupational Diseases (CCOD) in fulfilling its mandate. She noted that there were administrative issues, challenges with the legislative framework, difficulties in ensuring financial sustainability, and technical challenges. The DOH noted that the CCOD was established in terms of the Occupational Diseases in Mines and Works Act, and whilst the DOH provided administrative support and made the allocation of funding, the Commissioner was responsible for carrying out the work and managing the allocation. In view of the legislative and practical challenges, it had been suggested that the compensation funds should be merged, to provide for only one compensation body, which may also resolve the problem that currently the inspections were managed by a body within the Department of Labour. However, these reforms could be formally presented only once the Minister’s response was obtained.

The Compensation Commissioner noted that the CCOD had been plagued with persistent audit challenges, which were partially ascribed to disputes with the Auditor-General on the valuation of the Fund, and partially to an inadequate organisational structure. The vacancy rate was still at 32% but the CCOD was attempting to head-hunt. The legislation was to be reviewed, and proposals would be submitted by end September 2012 to the Department of Health. Several strategic objectives, targets and plans of action were outlined, and it was note that CCOD aimed to achieve financial stability, improve stakeholder management and improve management of the Fund, expedite claims processing, improve accessibility and reduce turnaround times, implement fraud prevention measures and improve reporting. Risks and challenges included poor public perception of the Fund, qualified audit reports, inability to deliver services due to lack of capacity, fraud by collusion, lack of consensus from stakeholders, low staff morale, and inadequate systems.

Members were very critical of the presentation, commenting that large portions of it were identical to what had been presented in the previous year, although they doubted that, for instance, the strategic risks or staff component could be the same. The role and responsibility of the DOH over the Commissioner was questioned. Members emphasised, several times, that the health of former mine workers was a vital issue and did not feel the CCOD was taking its duties seriously enough. They questioned what steps, exactly, had been taken to trace miners, and suggested alternative strategies. They questioned the cooperation with the mines, the relationship with the Department of Labour, the purpose and extent of the workshops, and whether these were sufficiently advertised and accessible, particularly to those from rural areas. They urged that the legislation, which was clearly inadequate, must be amended as a matter of urgency. They questioned the backlogs, and commented that it was problematic that the Department of Health, which was trying to ensure that provinces improved their finances, had an entity that was in such a poor financial position, and had not submitted its previous Annual Report. They asked specifically why the CCOD felt that it deserved to get an increased allocation, asked what steps were taken to address risks, and urged that serious attention be paid to this, as lack of effective systems could lead to increased fraud. A Member corrected the Commissioner on points in relation to the passing of legislation, and the recognition, for inheritance purposes, of customary marriages, and asked the CCOD to try to be more creative in addressing the issues. Members indicated that they would want to receive information highlighting the difference between the previous and current year’s presentations.

Meeting report

Compensation Commission for Occupational Diseases Strategic and Annual Performance Plans 2012 to 2015
The Chairperson, in his opening remarks, noted that the Compensation Commission for Occupational Diseases (CCOD) faced significant challenges around ensuring that workers were actually able to access compensation, as many were not even aware of their rights to compensation, or, if they did know of this, did not know how to access the Commission. There were other specific challenges around compensating a large group of miners in the Eastern Cape. He asked that the presenters should clarify the connections between the Departments of Labour and Health in this area and whether it would be necessary to seek amendments to the law. He also noted that there had not been an annual report presented in the last year, and sought comment on this.

Department of Health briefing
Ms Malebona Matsoso, Director General, Department of Health, noted that the CCOD was originally established in terms of the Occupational Diseases in Mines and Works Act (ODMWA). She explained that the Department of Health provided administrative support to the Commissioner, but the latter actually carried out the work of determining the compensation and claims. The allocation of funds similarly came through the Department of Health, but the funds, once allocated, were managed by the Commissioner. The Department of Health would seek to deepen the connections with the Department of Labour in addressing perceived capacity shortages.

She noted that there were four issues that needed to be addressed in relation to the CCOD. The first was administrative in nature, and the second was related to legal issues, around the Commission’s statutory mandate. It was difficult to determine which miners were entitled to compensation in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA) and who should approach the CCOD. One proposal had been to merge the two Commissions, and provide for only one compensation body. The third challenge related to financial matters, and, in particular to the reserves to ensure that miners could continue to be compensated. The fourth issue had to do with technical challenges around the actual process of assessing patients and determining their compensation needs, and in ensuring that those who deserved compensation were compensated. Inspections were currently managed by a body within the Department of Labour, and compensation by the CCOD was based on these inspections.

She noted that the Minister was yet to respond to the proposed reforms, and this must only be considered as an overview at this stage.

The Chairperson noted that the issues facing miners were significant, and there was difficulty in determining which miners were eligible for compensation. He asked for a clear framework to effect speedy reform.

Ms Matsoso said that the detailed plan would be presented in due course.

Commissioner’s briefing
Ms Pumla Mzizi, Compensation Commissioner, CCOD, outlined the mandate, vision and mission of the CCOD (see attached presentation), and then outlined the current structure. She said that there was one national office, and confirmed that the administrative costs were funded by the Department of Health. There had been persistent audit qualifications, and the organisational structure had been found to be inadequate. Revenues were currently derived from levies on mines and works, and benefits were paid to pensioners, members of the Eastern Cape group mentioned by the Chairperson, and lump sum disbursements. The vacancy rate of the CCOD was currently at 32% but there had been progress made in filling five positions, whilst another five were in the process of being filled, through head-hunting, and others would soon be advertised.

She noted that a review of ODMWA was under way, and three workshops on the proposed new bill were held in the previous year, with another three to be held before end September 2012. The draft changes would be submitted to the Department of Health (DOH) legal team by end September.

The projected revenue for this financial year was R408 million, rising to R627 million in the 2014 year. Expenditure was projected at R276 million in this year, rising to R479 million by 2014, as the Commission should by then address the significant backlog in payments. She also detailed the projected total equity and liabilities for the same time period (see attached presentation).

Ms Mzizi outlined the three programme objectives of leadership, finance and administration. Under leadership, the CCOD was seeking to ensure financial stability, develop a clear strategic plan and annual performance plan, improve stakeholder management and improve management of the Fund. Under administration, the CCOD sought to expedite claims processing, improve the accessibility of the Fund, improve the quality of service and streamline processes to reduce turnaround times. In relation to finance, the CCOD hoped to enhance the collection of levies, ensure that all controlled mines or works were paying promptly, implement fraud prevention measures, settle claims, and improve reporting.

She then detailed the strategic outcome oriented goals and targeted outcomes of the Commission from 2012/13 to 2014/15 (see attached presentation).

Some of the risks and challenges were highlighted. These included poor public perception of the Fund, qualified audit reports, inability to deliver services due to lack of capacity, fraud by collusion, lack of consensus from stakeholders, low staff morale, inadequate systems, political influence and declining interest rates.

Ms Mzizi then moved on to detail the Annual Performance Plan, setting out the key indicators, explaining the method of assessment, and articulating a schedule for reviewing performance on each indicator, not only for 2012, but for the following two years also (see attached presentation). Specific indicators were given for governance, stakeholder relationships, improvement of the legislation and payment of claims, financial management and reporting. She summarised that the plans sought to ensure that claimants were paid accurately and efficiently, that the turnaround time for claims was reduced, that there was improved governance, and benefits paid out were optimal.

Discussion
The Chairperson asked the Department to clarify the role of the CCOD.

Ms Matsoso said that in some ways it was in a similar position to the Medicines Control Council, in that it was established in its own right, but received administrative support only from the Department of Health. The Department did not have any statutory power over the Commissioner. The Commissioner was also a Chief Director in the Department, and in that capacity Ms Matsoso exercised control over her activities, but not in relation to her functioning as Commissioner. Despite this differentiation, the Department sought to provide support to the CCOD. For example, the DOH would write letters to the mining companies to address issues with the CCOD’s reserves, but there was no support given by the companies. It was likely that this issue would require an amendment of the legislation, to ensure that those claimants affected could continue to be supported. If the Commissioner disagreed with Ms Matsoso, she may make her own decisions. The allocation from the Department to the Commission could be a challenge, and there was a potential challenge, although it had not been one in actuality, for the Commissioner to have two roles.

The Chairperson emphasised the seriousness of these challenges. Many people, especially those from the mines, were affected by serious health issues, and it was vital that the CCOD reach them, particularly in the rural areas.

Ms M Segale-Diswai (ANC) noted that virtually identical presentations had been given for the last two years, with merely the figures being changed, but certainly the conclusions were identical. This raised the question of what exactly was being done, and she suggested that the presenters were under-estimating the Committee Members.

The Chairperson noted that Members could be frustrated by replication of presentations, and said the Committee was within its rights to ask the presenters to leave and prepare a new presentation.

Ms B Ngcobo (ANC) expressed her view that the meeting could continue, but also felt that the CCOD should be asked to give a separate presentation on the changes between the last year and this year. She noted the comment about lack of clarity in the legislation and said it was important that the Department bring proposed amendments this year.

Ms Ngcobo was concerned about the workshops, asking if they had started already and if they were reaching rural communities. Effective workshops would address the lack of knowledge about the Commission in rural areas. Ms Ngcobo wanted to know the major causes of backlogs. She noted that if provinces were to be supported by the Department to improve their finances, then it was problematic if the Department itself had components getting qualified audits. Finally, she commented that she thought it would be difficult to head-hunt inspectors.

The Chairperson noted the difficulty in having effective public hearings when workers were scattered, and were living mostly in rural areas. He asked who would be contacted to mobilise individuals for hearings in rural areas. He also expressed frustration about the Eastern Cape Fund, which he had mentioned earlier. He commented that this presentation referred to the challenge of R54 million, and noted that this was exactly the same amount quoted in 2002.

Ms D Robinson (DA) shared the Chairperson’s frustration on slow progress to address the challenges. She pointed out that the CCOD had had five consecutive qualified audits, and had not filed an Annual Report. She asked for specific details on what was being done. She also asked for details on the filling of positions and what progress had been made. She wondered about the possibility, and progress, of merging some operations with the Department of Labour. She asked what research had been done to find effective solutions, and again expressed hope that action would be taken quickly.

The Chairperson asked the Commissioner whether the Commission deserved the increased funds it had requested.

Mr D Kganare (COPE) suggested that there was a connection between the same documents being submitted each year, and the fact that the CCOD kept getting qualified audits. He wanted clarification on the Commissioner’s job description, given the fact that she was also a Chief Director. He noted that a similar presentation before the Portfolio Committee on Labour had been unsatisfactory. He urged that the CCOD must be brought into order, before it could properly address the numerous concerns. He asked what steps had been taken to address the risks, and noted that IT systems required significant investment. He noted the reference to “political interference” and asked for specifics on what was meant by this. He also asked for further detail on the target of 24 months for processing of claims, asking what specific steps had been taken to reduce this time.

The Chairperson noted that where there was confusion, this created the opportunity for abuse of the system.

Ms Segale-Diswai said that she wanted to ask the same question as she had asked in the previous year, but would have difficulty in regarding the answer as correct, in view of the presentation. She also asked if funding was deserved, given the challenges in receiving unqualified audits.

Ms Ngcobo asked for formal monitoring of the Commission to ensure that its work was being done.

Ms T Kenye (ANC) concurred with this request, also pointing to the persistently qualified audits.

The Chairperson suggested to the Commissioner that the legislation must be reviewed, as compensation was an important ideal but clearly there were serious challenges with the current structure.

Ms Mzizi noted that the presentation from last year was still relevant because there had not been changes to the Strategic Plan or Annual Performance Plan, in terms of the goals, but the specific annual targets had changed, as reflected.

Ms Mzizi commented on the difficulties in filling posts, noting that whilst the CCOD had not as yet been successful in head-hunting, it would continue to do this. There had been no change in the vacancy rate since the last year, which explained why the figures in the presentation were the same.

The Chairperson asked what qualifications were needed.

Ms Mzizi said that a B Comm degree and at least three years of relevant years of experience were required.

Ms Mzizi clarified that workshops were held in the provinces, in conjunction with the Department of Labour. Advertisements were placed in newspapers and the workshops were held in public areas, to ensure better awareness and access to these workshops. She stated that the major causes of backlogs included the fact that forms were not filled out properly, often because of illiteracy on the part of claimants. The workshops were intended also to support applicants in properly filling in forms, to expedite the process. Fingerprinting was done manually, and this slowed down the process. The amount of time between registration and finalisation of a claim was currently three to five years. Again, she said that the forms being improperly completed, or submitted without adequate supporting documents, led to delays and the workshops were also intended to address these points. She also said that workshops would reduce abuse of the system as some people claimed to be able to represent claimants, and then took a large portion of the compensation. However, communication with claimants was difficult when they cannot be reached to clarify the needed procedures.

She agreed that the IT system was currently inadequate, and at the moment most files were in hard copy format, so that there were delays in accessing files. In addition to this, miners frequently moved and it was often difficult to trace them. Finally, she agreed that the legislative processes were not efficient, and further delayed the finalisation of claims.

Ms Mzizi commented that the figure of R54 million was the original figure, and the overall costing had remained the same, although it was noted that about R29 million had already been paid out.

Ms Mzizi commented on the Annual Report issues, saying that there were outstanding disputes with the Auditor-General, which still needed to be resolved, around the actuarial evaluation. Experts had now been called in to try to resolve these disagreements. In addition, the inadequate current systems impeded the Commission’s ability to acquire credible data, which made it more difficult to receive an unqualified audit report.

Ms Mzizi commented on the funding. She said that increased funding was needed. The processes were very labour intensive, and could be expedited by better IT systems to drive them.

Ms Mzizi explained her dual function. The Commissioner has specific tasks as described by the ODMWA. The Commissioner administered the Fund under the Act. However, she administered the Commission’s budget as a Chief Director.

She noted that the strategic risks flowed directly from the strategic plan, and this was the reason why they had not changed. Increase controls were in place, to reduce collusion. Low staff morale should be addressed by a reduction in the vacancy rate, as staff would no longer have to work to cover for positions that should be filled.

She explained the reference to “political influence” by saying that political assistance would be needed in ensuring that the proposed amendments were passed.

Ms Mzizi said that the Board of the Chamber of Mines had been very involved with the Commission. The Chamber supported the Commission in determining the best way to process claims and distribute funds. This engagement had helped mines to understand that bad systems, and not bad governance, were the main challenge.

Ms Mzizi said that progress had been made on both the Annual Performance Plan and Annual Report and asked for an opportunity to review the progress made against the performance indicators.

The Chairperson noted that the members primarily wanted an assurance that the Commissioner would be addressing the challenges that had been identified.

A Member commented that there were clearly challenges in updating systems, and she suggested that the mines be approached for help in finding the miners, as she feared that otherwise many might never get compensation.

Ms Mzizi answered that the CCOD already worked closely with the mines, because CCOD provided lists of all outstanding claims to the mines, who then reviewed them and provided any information that they had to help trace the miners. However, in many cases the individuals had left the mines several years ago and could not be traced. She added that it was vital to try to settle compensation claims before death, to avoid disputes between heirs. She clarified that this often happened if a miner had entered into a first civil marriage, followed by a second traditional marriage, which was then not recognised for the purposes of inheritance.

Mr Kganare said that the law on this point had changed. He again expressed his frustration at the attempts to justify using the same presentation, and was doubtful that the strategic risks, in particular, could not have changed. He commented on the differentiation between legislative process and political influence, and requested that Ms Mzizi not conflate the two. He commented that many miners would return to their homes at Christmas time, and this could be an ideal opportunity to locate them, either directly, or by seeking assistance from their relatives. He wondered how seriously the CCOD was dealing with the issue. He thought that many of the mines had kept meticulous records of the miners’ places of origin, and addresses, and said that they should surely be able to support the process. He encouraged the CCOD, rather than trying to head-hunt, to advertise its posts, saying that there must be several young graduates with B Comm degrees who could be trained as inspectors. He asked Ms Mzizi to be more creative in addressing the challenges the Fund was facing.

Mr Ian van der Merwe, Chief Financial Officer, CCOD, said that the CCOD would address the comments from the Committee. He noted that a discussion document had been prepared to address the linkages between the Departments of Health and Labour in relation to compensation, and this included both a long term plan to address the need for legal changes, and has four short term options for the minister to consider. This could be explained to the Committee after the Minister had responded. He reiterated that there was a difference of opinion between the CCOD and the Auditor General on the valuation of the Fund, which was the reason for the qualified audits.

The Chairperson expressed the view that the Department of Health was doing well on other matters, and the issues now raised had to be addressed. He again stressed the importance of ensuring compensation to miners affected by disease, and said the current legislative framework was not sufficient. In the meantime, he asked for positive action to address the challenges. The DOH did not dispute the problems, and seemed to be open to finding solutions. He wondered if Community Health Workers in KwaZulu Natal, who were supported by the Department of Health, could not be used to reach more people. He noted the high number of unemployed graduates and encouraged the Commission to advertise publicly. He urged that increased monitoring was needed to avoid corruption

The meeting was adjourned.

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