Ex-mineworkers: oversight priorities; Committee Report on ex-mineworkers meeting in East London

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Mineral Resources and Energy

28 October 2015
Chairperson: Ms L Yengeni, (ANC) and Mr S Luzipho (ANC)
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Meeting Summary

The Portfolio Committees on Mineral Resources and Labour met jointly to discuss oversight priorities for issues affecting ex-mineworkers. The Co-Chairperson set out the history of debates and discussions on ex-mineworkers, indicating that during the Taking Parliament to the People event in 2007, the Speaker had been approached by mineworkers, who spoke of the various issues that they faced. As a result, a Task Team was set up, and although initially it seemed to have worked well, the latest reports were that it was not meeting on a regular basis or providing ex-mineworkers with the services that it had been mandated to provide. Issues raised at the most recent meeting with members doing oversight had included the apparent lack of access to hospitals. However, one Member pointed out that a particular concern was that only five people turned up to the meeting arranged, and it was not certain, despite a number of questions posed, who those five people represented. Furthermore, some of the information they provided was blatantly incorrect and this made the MPs a little suspicion as to the veracity of the claims.

Dr Nicol, Researcher for the Portfolio Committee on Mineral Resources, had compiled, and presented his report summarising what had been the initiative in the past, and what were issues highlighted from various reports since 2007. He noted that the whole issue of ex-mineworkers had not received much focus between 194 and 2007. A large amount of money was owed to ex-mineworkers in unclaimed funds for retirement and survivor benefits and it had been impossible, for various reasons, to get this money; and the fault does not lie solely with the government departments concerned. He emphasised the need for an inter-governmental strategy and action to develop a comprehensive approach to ex mineworkers. Parliament had exerted itself on repeated initiatives related to mineworkers. However, there were many laws and many Ministers of different government departments that were responsible for the provision of social and security benefits to ex-mineworkers, which presented a huge challenge. He summarised the various pieces of legislation that applied, and their differences. Although there had been One Stop Service Centres for ex-mineworkers, overseen by the Minister of Health and the Department of Mineral Resources (DMR), from 2014, with plans to roll them out to another two areas, there still remained the problem that some were seen as inaccessible.

Dr Nicol made some suggestions on what should be non negotiable “must do” actions to be taken by government. He had reached his conclusions after drawing comparisons of various suggestions and scenarios, ranked by impact and complexity. The Department of Mineral Resources (DMR) should take responsibility for reducing exposure to dust in the workplace and that mines should be listed as ‘controlled mines’ subject to various requirements. No hollow promises should be made, and the government had to be particularly careful as to what figures it bandied around, to avoid the suggestion by ex-mineworkers that these had amounted to promises on what they could claim, based on unfortunate misunderstanding in the past. Meetings should be held with ex-mineworkers, and, knowing that long distances to travel to centres posed a problem, there was a need to provide proper budgets and support to the centres, including their ability to respond to claims from the Mandatory Provident Fund Schemes, the Medical Bureau for Occupational Diseases, the Compensation Commission for Occupational Diseases and others. These centres should also be rolled out across other regions. The laws should be harmonised to ensure that benefits claimable under one, for one category of workmen, should also be claimable under another. Collection of levies payable by mines had to improve. Ex-mineworkers must have access to the free medical benefit examination every two years, and retirement funds must keep in contact with present contributors and to trace beneficiaries, since it was estimated that R5 billion in unpaid pensions related to this sector. However, he did not recommend that the DMR should attempt to trace beneficiaries itself.

Members asked if it was possible to assess how many people had been paid, who should take the lead on harmonisation, and why the service at the One Stop Centres had not been efficient. Members asked where the figure of R5 billion came from and suggested that the Financial Services Board must be asked to speak to the joint committees on this figure. They asked why levy collection was poor, and whether mobile clinics might not be an answer. Members also asked about the Workmen's Compensation Fund and how it fitted into the picture and wondered if an attempt to harmonise would result in even poorer administration. Members shared the concerns about publicising figures and suggested d that they needed to be broken down, and perhaps actuarial reports should be commissioned.  One Member suggested that a developmental Task Team perhaps be set up. Other questions related to the point that the provincial DMR was based in Port Elizabeth, far away from where the majority of ex-mineworkers now lived. The provincial governments must be asked what exactly they had promised.

Meeting report

Chairpersons' opening remarks
Co Chairperson S Luzipho said that the main issue for the meeting was to discuss oversight priorities , for the two Committees, relating to ex-mineworkers. The Portfolio Committee on Mineral Resources had tasked its researcher, Dr Martin Nicol, to compile a report on issues that were raised by ex-mineworkers on a recent meeting that the Committee had held with this sector.

Co-Chairperson thanked Mr Luzipho and the Portfolio Committee on Mineral Resources. She reminded members that in 2007, during Taking Parliament to the People event, the Speaker of Parliament was approached by current and former mineworkers, who spoke of the various issues that they faced. As a result of that meeting there were a number of engagements in Parliament and a task team comprised of representatives of the mineworkers was established. Initially this task team had worked well. However, eight years later Parliament received an invitation by the ex-mine workers to meet with them to discuss the issues that they were still experiencing. A meeting was held on 4 September2015  in the Eastern Cape, to discuss these issues, and in that meeting ex-mineworkers had expressed their view that the Task Team was  not working and was no longer meeting on a regular basis. Parliament was not able to engage with the ex-mineworkers at this event, as it was there solely to listen to them. Parliament now had an obligation to go back and tell them what it had done about the concerns and challenges raised at that meeting. Both the Portfolio Committee on Labour and the Portfolio Committee on Mineral Resources had a responsibility to come up with ways and means to ensure that the task team would get back on its feet and services that were supposed to be delivered to the mineworkers were in fact delivered.

There were a number of issues that the ex-mineworkers raised, among them a lack of access to hospitals. The Presidency at the time, headed by the Deputy President, had made promises to the ex-mineworkers that government was going to build hospitals to service the mineworkers and their families. These hospitals were not servicing the mineworkers and their families because they had not been built in areas that were easily accessed by the mineworkers. For instance, one had been built in Mthatha but this did not cater for the majority of the ex-mineworkers who lived in the rural areas and were unable to get to it. Other issues to be discussed with the former Deputy Presidency should be done by the Department of Labour (DoL).

Mr Luzipho asked Members if there were any additional comments that they would like to present, if they were present at the meeting of 4 September.

Mr Z Mandela (ANC) said that he had attended the oversight visit with ex-mineworkers as a representative of the Committee on Mineral Resources. On the whole, Members were disappointed as three portfolio committees had been mobilised, and they sat with only five people representing the ex-mineworkers at the oversight visit. Eastern Cape was the home for the largest percentage of  ex-mineworkers, with 32% living there, followed by the North West Province which had 18% of the country’s ex-mineworkers living within it. It was therefore very disappointing for members of the Portfolio Committees to only meet with five people. They were not sure who those five individuals were representing.  representing ex-mineworkers as they had expected to meet with many more people. The members were therefore not sure who was being represented by these five people and whether these people had a mandate to speak on behalf of all ex-mineworkers, as even direct questions on this failed to produce a clear answer. If was also not possible to get clarity on how many ex-mineworkers were still on the programme and were still waiting to be beneficiaries, and this worried Members.

He added that the ex-mineworkers present during that meeting seemed to lack knowledge of what the Department of Mineral Resources had been able to establish with the One Stop Service Centres. They also claimed that the Nelson Mandela hospital in Mthatha had never been opened, until Mr Z Mandela disclosed to them that he had actually been in attendance at the opening, and knew that it was servicing many people. Those ex-mineworkers claimed that there were no doctors and nurses working at that hospital and that people had to make a payment of a sheep in order to be serviced at that hospital or to even get transport to the hospital. Such claims made members sceptical that the issues being raised had any substance. Members had tried to get the ex-mineworkers to understand that the issues were very broad and encompassed other mineworkers living in other parts of the country only, although this visit had prioritised the Eastern Cape as the home of the largest percentage of workers.

Research Report into issues affecting mineworkers
Dr Martin Nicol, Researcher, Portfolio Committee on Mineral Resources aid that his research was founded on issues identified in the Budgetary Review and Recommendation Report (BRRRR) of the Portfolio Committee on Mineral Resources (PCMR). His analysis was based on a reading of all documents produced by Parliament relating to the ex-mineworkers since 2007, but he commented that these issues seemed to have “fallen through the cracks between 1994 and 2007.

A large amount of money was owed to ex-mineworkers in unclaimed funds for retirement and survivor benefits and it had been impossible, for various reasons, to get this money; the fault does not lie solely with the government departments. There was a necessity for inter-governmental action on developing a comprehensive strategy on ex mineworkers. However, there were many laws and many Ministers of different government departments that were responsible for the provision of social and security benefits to ex-mineworkers. The first law, the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) makes the Minister of Mineral Resources responsible for the transformation of the industry. The second Act, the Occupational Diseases in Mine and Works Act (ODIMWA), overseen by the Minister of Health, compensates mineworkers who contracted lung diseases, such as silicosis at work. The third Act was the Compensation for Occupational Injuries and Diseases Act (COIDA), overseen by the Minister of Labour. Ex-mineworkers get much better benefits under COIDA then under ODIMWA. The fourth Act, the Unemployment Insurance Fund Act, overseen by the Minister of Labour, provides benefits in a limited number of cases for unemployed mineworkers. The fifth Act, the Pension Funds Act, is overseen by the Minister of Finance. The last Act was the Mine Health and Safety Act 29 of 1996, which provides for protection of the health and safety of mineworkers.

Parliament had made a number of repeated initiatives related to mineworkers. He enumerated some of these attempts as follows:
- Parliament had established a parliamentary ad hoc committee that operated between 2007 and 2008, which heard evidence from various bodies, and had given regular report backs to Parliament since then. There were field workers in the Eastern Cape trying to locate ex-mineworkers or their families who had not yet claimed benefits.
- In 2008, Parliament established an Interdepartmental Task Team on ex-mineworkers, led by the Department of Labour. This worked up until 2012.
- In 2013 a ring-fenced ex-mineworkers project, led by the Deputy Minister of Mineral Resources, was established in 2013/2014.
- In 2014 there had been identification of One Stop Service Centres for ex-mineworkers, overseen by the Minister of Health and the Department of Mineral Resources (DMR). Under apartheid there used to be decentralised services for white mineworkers. When these were dismantled after 1994, nothing replaced them, which was why these One Stop Service Centres were launched by the Minister of Health in 2014. There were plans to roll these out to a further two areas in the 2015/16 financial year and money had been budgeted for that.
- Parliamentarians held meetings with ex-mineworkers in the Eastern Cape. The most recent of these meetings took place on 4 September 2015. However, a big challenge in these meetings was that the parliamentarians did not know who the groups were responsible to, and whom they represented.

Dr Nicol noted that the One Stop Service centres for ex-mineworkers were possible “centres of gravity” for a comprehensive strategy on ex-mineworkers. These were presented as service delivery for the “whole person”. Here ex-mineworkers get access to a medical benefit examination which was free by law. If they were diagnosed with a work related ailment a claim submission was lodged to see if compensation was payable. The ex-mineworkers also received more general health advice and they were screened for possible unclaimed benefits, including retirement funds among others. A major challenge for these centres was to make their services efficient and effective. In addition, funding for these centres was not guaranteed in the long term.

Dr Nicol had developed a prioritisation matrix to analyse which activities the DMR should be engaging in (see attached document). The X axis of this matrix represented the impact of activities and ranged from low to high. The Y axis represents the complexity of activities and ranges from low to high. Founded on this matrix, those activities that were both low impact and low difficulty provided great learning opportunities and the DMR should develop skills in those areas. Those activities that were low impact and high complexity should be avoided if possible. Those activities that were high impact and low complexity were “must do” and should be prioritised. Those activities that were high impact and high complexity were also “must do” but must be planned well, with a road map that would help the DMR complete those activities.

Based on this matrix, those activities that should be avoided, if possible, included tracing ‘cold’ beneficiaries individually, for which the DMR would have a list and would try and find these in the Eastern Cape. Dr Nicol said that projects to this effect had already been tried unsuccessfully. In addition, it was necessary to avoid making hollow promises to ex-mineworkers. Dr Nicol noted that ex-mineworkers often heard promises in whatever was said, even if no commitments had in fact been made.

Activities that provided great opportunities for learning include meeting with ex-mineworkers to hear their problems. Such meetings had been held with ex-mineworkers in the past in which they had voiced their problems, such as having to travel long distances to the hospitals that were meant to serve them, as they lived mostly in rural areas.  Activities that must be done but needed to be well planned included providing proper support for One Stop Service centres in terms of things like budgets, capacity and their ability to respond to claims from the Mandatory Provident Fund Schemes, the Medical Bureau for Occupational Diseases, the Compensation Commission for Occupational Diseases and others. These centres should also be rolled out across other regions. There should be a harmonisation of compensation laws like COIDA and ODIMWA. For example, under COIDA people get a pension, but the level of benefits that people could get under ODIMWA might be considered to be unjust and needed to be changed. All of these activities were things that “must be” done and that would have a long term positive impact on the situation of ex-mineworkers.

“Must do” activities included the DMR taking responsibility for reducing exposure to dust in the workplace. More research needed to be done to halt this problem, which had been going on since the nineteenth century in the mines in South Africa. All mines should be made ‘controlled mines’. Under ODIMWA, controlled mines must pay a levy. The number of mines listed as controlled had, however, declined from 900 to about 200. There had been no additions to the list of controlled mines, particularly platinum mines, and there was a need for that list to be reconsidered as every mine in South Africa should be a controlled mine.

The collection of levies from mines needed to be improved. In 2013/14, only 63% of the levies that were due by mines were collected. Ex-mineworkers must have access to the free medical benefit examination every two years as this was an essential means to prevent and ameliorate of diseases related to minework.

Retirement funds must keep in contact with present contributors. There was R20 billion of unpaid pension benefits in South Africa and the largest share of these, R5 billion, was in the mining sector. Retirement funds must be compelled to trace beneficiaries of unclaimed benefits.

Mr J Lorimer (DA) asked about the R5 billion in unpaid benefits and wanted to know if it was possible to work out how many people had been paid. He asked who should be taking the lead on the harmonisation of the compensation laws. He asked Dr Nicol to explain his conclusion that the service that ex-mineworkers received at the One Stop Service centres was not efficient and effective. He asked if it was known how many ex-mineworkers were using the centres or had used the centres. He wanted to know why levy collection was so poor. In regard to ex-mineworkers being far away from hospitals and needing transport in order to attend them, Mr Lorimer asked if mobile clinic services might alleviate this problem.

Mr M Bagraim (DA) spoke to the need for harmonisation of compensation, and asked if these comments applied also to the Workmen’s Compensation Fund, which already had a host of its own problems. He was concerned that this harmonisation would move the payment of claims from one bad administration to another. Mr Bagraim asked Dr Nicol what his recommendation was and what it was that he was asking each Committee to do.

Mr Luzipho responded that the Committees, sitting jointly, would make recommendations and would take decisions. Dr Nicol’s role was to provide the results of research to the Committee which would use that information to make recommendations.

Mr I Ollis (DA) said that he was concerned about the large amounts that Dr Nicol had referred to in his presentation, and agreed that once these figures became public, ex-mineworkers tended to latch on to those, and once they had been publicised, they could not be retracted. If the media were to report the figures it would put Members of Parliament in a very difficult and dangerous position when engaging with ex-mineworkers, because they might start demanding access to these large sums and that could create a very volatile situation. In the past, large rand figures had been reported in the press and the ex-mineworkers associations wanted all of that money to be paid into a trust that they could access. He urged Dr Nicol that, when he presented his figures, he should break them down and specify how they were made up.

Mr Luzipho joked that this could avoid a situation where ex-mineworkers would be chanting “pay back the money” before too long.

Mr H Schmidt (DA) said that there should be a developmental task team, because it was impossible for the Committee to deal with all of these issues on its own. He also proposed that the Committee should have someone to give a presentation on exactly what the position was on these problems that Dr Nicol listed in his presentation. The presentation provided a bird’s eye view of the problems and the situation in a nutshell. The Committee needed to know what the different components were that made up the problems. Dr Nicol had picked up on many issues in his report but there were many similar issues that need to be broken down for the Committee. There were various complexities on the problems and these changed from month to month, so it would be useful to have  knowledgeable individuals to appear before the Committees of Labour and Mineral Resources to indicate the exact composition of these issues.

Mr Luzipho agreed with Mr Ollis, saying that a breakdown of the large rand values had to be provided. He also asked if it was possible that the large rand figures were old figures that might have been accurate in the past but had since changed, as there were constant streams of ex-mineworkers claiming their funds.

Dr Nicol responded to Mr Bagraim saying that these were areas of oversight but that he would not respond to all of the questions raised by Mr Bagraim, as some of the questions needed to be posed to the bodies concerned.

Dr Nicol expanded on the source of his information on the amount of R5.2 billion that was owed to ex-mineworkers, and said this was a quotation from Rosemary Hunter, the Deputy Registrar of Pension Funds at the Financial Services Board (FSB) taken from new reports. Dr Nicol had endeavored to contact Miss Hunter to get further elaboration on this figure, but he had been unable to do so. However, she had flagged the issue of unclaimed benefits and had said that it was a scandal that pension funds were retaining money that ought to be paid out to beneficiaries, and the greatest amount of that money was claimable by ex-mineworkers.

Dr Nichol said that his conclusions on the effectiveness of the One Stop Service centres were based on visits the Portfolio Committees had made to the Mtatha Service Centre, and the pleas from the members of staff from those Service Centres.

Dr Nicol said that he could imagine what the answer might be to some of Mr Lorimer’s questions but that he was a researcher and that those questions needed to be posed to the departments concerned.

The issue of mobile health centres had already been raised by commentators, but the X-ray machines that were needed to prove the conditions for which ex-mineworkers could claim compensation were very expensive and not easily transportable, and that was why they were located in stationary pubic health facilities.

He noted that the COIDA compensation paid to mineworkers was actually paid by The Rand Mutual Association which acted as the agent of the Workman’s Compensation Fund, and it was a viable and excellent organisation which could act as a positive role model for the payment of compensation in South Africa.

Mr Luzipho said that he wanted the Task Team that had been set up, as well as the Department of Mineral Resources (DMR) to give the Committees a progress report on the work that they had already done, and any interventions that they had already implemented. 

He noted that some of the promises that were made to ex-mineworkers were unfortunately  made by the Premier of the Eastern Cape and the Committee would have to phone him and ask him about the matter.

Mr Luzipho commented that any possible merger of the existing compensation funds was not something that could be dealt with overnight, as the Committee did not know what the consequences of such a merger would be or if indeed there were any plans currently being considered. The Committees might have to look to the Financial Services Board (FSB) for assistance, and he suggested that the FSB be invited to give a presentation elaborating also on the R5 billion figure.

Mr Luzipho said that he did not know how the Committee was going to resolve the matter of where outstanding claims would be paid, and whether they should be paid into the accounts of lawyers or directly into the accounts of beneficiaries.

He also pointed out that the provincial Department of Mineral Resources was in Port Elizabeth, Eastern Cape, but the majority of mineworkers and ex-mineworkers lived in the former Transkei area. Those ex-mineworkers were dependent on public transport to Port Elizabeth, which might be a three day trip from where they lived.

One issue that Mr Luzipho thought it was very important for the Committees to address was the issue of compensation for the children of mineworkers, in order to allow them to study. This could not be concluded by these two committees as it would need input from other government sectors.
Mr  Lorimer said that Parliament needed to contact Rosemary Hunter because she had put the figure of R5 billion out into the public and it had appeared in articles in many newspapers, including the Business Day and the Sunday Times. It was quite embarrassing for members to find put about the R5 billion in unpaid benefits through newspaper reports. According to these articles, the fund managers themselves refused to look for the beneficiaries.

He said that there also needed to be parity between the different laws under which mineworkers were compensated, as mineworkers did not get compensation under the Workmen’s Compensation Act. The Workmen’s Compensation Act paid out more money to beneficiaries than the other Acts and because of this mineworkers were getting less than employees in other sectors. Mr Lorimer was not sure why the mineworkers unions had not contested this, but thought the Portfolio Committees should do so. They could commission an actuarial report, since it should not be difficult to do an investigation on why the figure payouts differed between the sectors.

Mr P Pikinini (ANC) said that he thought it was important that the Committees had a meeting with the Financial Services Board, and asked that the process could be speeded up.

Mr Luzipho said that when the Committee was on an oversight visit at the hospital in Mthatha, ex-mineworkers claimed that they were having to pay R50 for their medical benefits examination. Ex-mineworkers should not be paying for services that were supposed to be free for them. The issue of promises made to ex-mineworkers by the Eastern Cape government fells squarely on the shoulders of that provincial government.

Mr Schmidt appreciated the efforts of Dr Nichols in combining the information but asked that Members have access to all of the separate reports so that they could study them.

The meeting was adjourned

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