National Union of Mineworkers briefing on crisis in Grootvlei and Orkney Mines

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Mineral Resources and Energy

30 May 2012
Chairperson: Mr F Gona ANC
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Meeting Summary

The Portfolio Committees of Mineral Resources and Labour met with delegates from the Department of Mineral Resources (DMR), Department of Labour (DL), and the National Union of Mineworkers (NUM), who expressed frustration when Aurora Empowerment Systems and their provisional liquidators failed to attend to detail what was being done to remedy the situation of workers employed at the troubled Grootvlei and Orkney mines.  Members pointed out that the absence of Aurora meant that a majority of issues could not be dealt with. As a result the delegates from both Departments and the NUM presented what information they were in possession of, followed by a discussion with Members.
The DMR briefed the Committee on the background to, and progress of, the case arising out of non-payment of wages and salaries at the Aurora Grootvlei Mine.  Pamodzi Grootvlei Mine, the former operators, had gone into liquidation and had handed over to provisional liquidators. A number of the workers had been retrenched at this point, but those who were not continued to be employed by Aurora.
From December 2009 there had been problems with the payment of the whole or a portion of bonuses, wages and salaries. A Memorandum of Understanding had been signed, in terms of which Aurora management had agreed to pay by certain dates, but it had failed to adhere to this. The Department of Labour had issued a Compliance Notice, which was also ignored. The Department had then launched a Labour Court case on behalf of the employees, claiming the wages and salaries outstanding.  Aurora had indicated that it would oppose the matter, yet in July 2010 had requested a meeting with the Department and unions, which it had failed to attend. The Department had then started to obtain affidavits from every traceable worker, to validate the claims in respect of outstanding wages. Some workers had remained untraceable, despite the efforts of the Department, via the employer, the trade unions and word of mouth, as some were migrant workers, but so far it had obtained about half of the necessary affidavits and was continuing with this task.

During the taking of affidavits, appalling living conditions at the mine had become apparent, including lack of sanitation, lack of water, no cooking facilities, and health risks. In addition, Aurora management, despite deducting Unemployment Insurance Fund contributions, had failed to pay these over, and was also in breach of South African Revenue Services and Occupational Health and Safety requirements. The Department of Labour was assisting with prosecution on these issues.

Members questioned why the Departments of Labour and Mineral Resources had dragged their feet, why it was concentrating now on UIF issues, and why it was apparently having so much difficulty in tracing people.  Members also questioned the number of employees involved, how many were affected by retrenchment, what the position of the liquidators was, and whether there had been compliance with the Labour Relations Act in respect of the liquidation of the former employer, so that the correct employer had been cited. Members noted that this was probably not an isolated incident, and that other mines were probably also non- compliant.
Owing to the absence of Aurora, a future meeting was scheduled for June 15.

Meeting report

The Chairperson opened the meeting by stating that the provisional liquidators had received notice about the meeting only last Friday, giving them less than three days to prepare.  As a result, they were not in attendance. He remarked that this would have a deleterious effect on the proceedings and demanded to know why notification had occurred so late, as their absence severely hampered the work of the Committee.

Mr E Lucas (IFP) was exasperated by the absence, stating emphatically that no justice was possible in this process without the presence of all the players.

Mr J Lorimer (DA) wanted to know of the Department of Mineral Resources (DMR), that if they had known at the beginning of this process what they now knew, whether they would have done anything differently. He asked if this situation could happen again and wanted to know what lessons had been learned. He demanded to know why people were starving to death.

The Chairperson asked what the status of the two mines was, and if this had changed. He asked if new owners were about to be acquired, or if they had in fact already been acquired. He said that at the previous session, a report had detailed all the assets that had been looted from the mines. The security of the assets was supposed to be in the hands of the provisional liquidators, and he demanded to know what the DMR was doing on this issue.

Mr Joel Raphela, Deputy Director-General, Mineral Regulation, DMR, responded that the DMR could not do justice to this subject matter, and said that there were also likely to be gaps in areas of responsibility. He observed that it might seem like the DMR was not providing detailed answers, but without all parties present, the DMR could not provide a comprehensive response. He said the DMR did not want to point fingers and requested that the meeting be postponed until everyone was present.

Mr Andre Cronje, Chief Director, DMR, spoke about the Grootvlei mine in Gauteng, stating that it was flooded. He said the situation was that the assets of mine had not been able to carry the cost of the pumping for the last 20 years, so miners had required subsidies to continue the operation. He said if the mine was not sold and was finally wound up, then the assets would be sold off to pay creditors. It was not clear what was actually happening and the only knowledge available on the matter was drawn from press reports. He said all parties needed to hear from the provisional liquidators formally in order to pass proper judgement on the matter, and he asked for greater cooperation on care and maintenance.

The Chairperson said he understood that the DMR might not be able to answer all the Committee’s questions adequately because not all parties were present. He then asked what the degree of care for the mines was, and what information the DMR had in this regard.  Was there monitoring of water levels in the mine shafts, and was there a possibility of contaminated water entering into surrounding rivers and causing severe environmental pollution?  He remarked that nine pumps were supposed to be operational, but that only one was actually working.

Mr M Nchabeleng, ANC, and Chairperson of the Portfolio Committee on Labour, wished to know what the role of the Department of Water was in this situation, having heard that they were responsible for pumping and moving water.

Mr Cronje responded that water discharged to the surface was being treated and there were plans to increase the size and capacity of a water treatment plant dealing with the problem.  One needed to understand how this related to the liquidation process, as water levels were rising in the three basins in the central Gauteng area, by about 85 mega-litres per day in the Eastern Basin. Eventually this water would flow out, but because of cooperative government structures there was a task force assembled and they would create an environmentally containable level and prevent ground water contamination. He said the mines were well over 100 years old.

The role of the DMR was stated as being involved from both a mine health and safety perspective, and whatever support was required would be provided.

Mr J Lorimer (DA) said that monitoring and coordination of action on these matters was rather piecemeal, emphasising a need for a more comprehensive response.  He asked that the task force head be called in for questioning, as this was a matter of considerable public interest and there was absolutely no room for excuses

Ms N Ngele (ANC) believed her questions, like all of the Members’, were straight forward.  However there were no straight-forward answers.

Mr E Lucas (IFP) lamented the fact that the Committee would be unable to deal with this matter successfully.  He was saddened that the Committee was dilly-dallying, as people were suffering.

The Chairperson said the Committee could not deal with this issue properly without all parties present. As far as the workers were concerned, Aurora, who had been present at the Committee’s last meeting, had had to go to extraordinary means to seek certain sums of money for payment to compensate workers. He said the role of the liquidators, in terms of new owners coming in, was unknown.

Mr Raphela said that in respect of the non-payment of wages to workers at the Grootvlei mine, it had been reported that a claim by 1 287 miners had resulted in a total of R2,03m being paid in a court settlement. The workers were still employees since they have not been retrenched or laid off, and in this case could not access UIF benefits.  However, the mine had since been declared closed so miners could be accommodated under the same conditions. He said a total of 468 claims equal to R1,73m had been received, and the Department of Labour wanted to take this matter to the Labour Court, but the appointment of provisional liquidators had halted the process.

He said claims for unpaid wages had been made to the court within 12 months of a worker becoming aware of non-payment, and he was confident the workers had a strong case because of the documentation available. Not all people who still occupied hostels were workers and some people were squatting there as well. There were more than 1 000 workers who had earned in excess of the threshold amount under the Employment Act, and therefore could not sue in court.

Some discussion followed on the work which the NUM had done to consolidate claims, and the work that Solidarity had done to take these matters to court. All claims were being dealt with through the liquidation process. In an October 2011 agreement reached with all parties, 936 valid unemployment claims had been received from workers at the mine and in November, benefits were issued for the first time.

A total of 1 933 foreign workers were listed on the payroll of Aurora and since quite a few of these workers had not made claims for UIF benefits after payouts, it was assumed they had received their compensation and returned home. Many of these workers may have been in the country illegally without work permits. The DMR promised to keep all of this on record to be able to track workers and hopefully they would be found, even if they had left the country. 

A spokesman for the Department Labour said that Aurora had failed to comply with a R3,95m compliance case lodged by the Department of Labour for unpaid wages. The matter had then been handed over to the liquidators.

Mr Lorimer’s first question concerned how many workers were included under the R3,95m payment, and was told that the number was 1 170. He asked how many workers were still on the mine premises, and as this was unknown, he wished to know how long it had been before these workers had first received relief.

Mr S Motau (DA) said his interest related to the UIF, and asked if workers would be included in lay-off training. He also asked if there were any plans to get workers back to work at the mines if the mines came back into operation.

Ms F Bikani (ANC) wanted to have a clearer breakdown of numbers and said there should be a clear record of people involved. How many had been paid and how much money was left to pay? There should then be a tapering down of these numbers as workers were paid out.
Mr Nchabeleng asked where the foreign miners had come from.  He realised workers came from Lesotho and Mozambique, and said it was not difficult to track people at mines. Technically, the workers were still employed at the mines, but then later the Department of Labour had given them UIF benefits. What were the implications of that decision?  He asked if the workers would receive salaries for all the months they were still employed at the mine.

Mr M Sonto (ANC) asked how involved the Department of Health was in this process. The health conditions of these miners needed to be checked so that sickness did not emerge down the line when workers were no longer employed by certain mines.

Ms Ngele asked when new claims were launched, how the money was distributed and more importantly, how people would access payment in rural areas.

Mr Kenny Fick, Provincial Executive Manager for Gauteng, stated that it was not legal to fight for people who were no longer within the Department of Labour’s jurisdiction. The last pay check issued was paid out to 1 287 people, whose claims had been verified.  He said that the Department could only work on what could be proven, and this amounted to monies totalling R2,03m. The court had ordered that the Department could only provide cover for exact amounts to specific people, and that is when foreign workers had received their monies and returned home. The UIF payments were over and above the unpaid wages.

He said that if workers had lodged a valid claim within six months, the payment could have been made at any time in the future. The exact payroll indicated that there were approximately 3 500 workers at Aurora and under the law, about 2 300 workers fell within the Department’s mandate. The focus was on the workers at the time the Department negotiated with Aurora management and the two major mine unions. He said that if those workers had been retrenched, Aurora would have had to pay out a retrenchment package, but they had had no money at the time to pay out. However, this possibility had been kept alive in favour of the workers. 

The Chairperson asked Mr Fick that all reports be submitted in writing as from the next meeting, for ease of engagement and cross referencing for the Members.

Briefing by National Union of Mineworkers (NUM)
Mr Madoda Sambatha, of NUM, said that a mine worker who failed to pay an account for three months would be taken to a credit bureau and blacklisted, yet a company that failed to pay a worker’s wages had to be taken to court by government. He called for it to be ruled a criminal offence when businesses failed to pay worker’s salaries on time.

There had been problems with availability and circulation of information from provisional liquidators and possible buyers. The Committee was informed that the Orkney Mine would be purchased by China African Precious Mining (CAPM) on June 1. The smooth transition of this sale, along with the proposed recall of former employees once the mine restarted production, was in stark contrast to the Aurora fiasco.

Referring to the death of a schoolboy who fell into an open mine shaft, Mr Sambatha called on the DMR to improve security outlays at former, non-functioning mines.

He said that the Insolvency Act should be amended so that workers were prioritized for compensation after the bankruptcy of a company. Companies facing liquidation should also be compelled to provide education for workers’ children and emergency social grants should also be made available.

Mr Lucas wanted to know where the people were who had not yet been paid, where they were living, and how were they surviving.
Mr Sonto was in agreement with the union in terms of blacklisting people, stating that you might be blacklisted without even knowing it. He demanded to know why the application for blacklisting was not uniform for individuals and companies. He said the criminality of this process must be brought to an end.

The Chairperson asked if Mr Sambatha would be in a position to present to the Committee any sections of the Insolvency Act he would like to see changed so that the Committee could engage with their counterparts at the Department of Trade and Industry.  He asked if there had been any engagement with local government bodies where these mines were located, to see if water and electricity needs had been supplied or restored to hostels where workers were staying, and that these services were being paid for to prevent them being suspended.

Mr Sambatha said that prior to the emergence of the current issues, Aurora had owed money to Eskom and other companies. A court order had required that wages be paid out, but as the Mineworkers Development Agency (MDA) had noted, it was sometimes difficult to trace mine workers either for compensation or to find out where they currently resided.  Perhaps the Department of Labour could coordinate with the MDA on this matter.  He remarked that when compensation was due, there were times when people fraudulently pretended to act on the behalf of a worker to claim the salary. This had to be stopped and prevented, and he had submitted a motion to COSATU in this regard.
Mr Lorimer concluded by saying there was a need to clarify what was expected in terms of presentations from delegates prior to the next meeting.

Chairman F Gona (ANC) requested that all submissions be made in writing prior to the next round of talks, with an indication of whether there was a possibility of closure or not if Aurora accepted responsibility and then processed monies owed.

The next meeting date was set as Friday 15 June.

The meeting was adjourned.


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