Compensation Commissioner for Occupational Diseases challenges: Minister of Health and Commissioner's briefings

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Health

07 September 2016
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

The Minister of Health and the Compensation Commissioner for Occupational Diseases briefed the Committee on the background to and historic and current challenges with the CCOD. There were substantial legacy challenges from 1912 onwards, which arose partially from the discriminatory systems and legislation, but the Department of Health, which had finally taken over responsibility for the Commissioner, was trying to fix these through integration of compensation systems. Other challenges included use of outdated information technology systems and business processes, shortage of staff in legal, actuarial, medical, analytical sciences, lack of finances and inability to recruit and retain key personnel and health professionals. There had been progress made in reforming the registry, database, process mapping, website and weekly monitoring of certifications and payments. Actuarial valuators had also been appointed in quarter 3 of 2015/16. The financial statements for 2011/12 had now been prepared

Members asked what the costs of integration would be, and made the point that there were some serious moral issues in how many miners had not been compensated. They asked for details of the mining companies who were and were not contributing, what would happen to funds not claimed, what would happen to compensation in polygamous families, and asked for further details on the information being provided by Tom Tom and the issues of information being sold by TEBA. They sought assurance that the problems would be solved by integration and wanted to know who would be the custodian of the integrated systems, whether there would be enough personnel, what were the delays in the One Stop Shops being set up and where they would be set up. They asked if compensation issues were increasing, when the new legislation would be brought to Parliament, and what methods were being used to trace beneficiaries.
 

Meeting report

Compensation Commissioner for Occupational Diseases (CCOD) Challenges: Minister of Health's briefing
Dr Aaron Motsoaledi, Minister of Health, gave some background to his presentation on the challenges at the office of the Compensation Commissioner for Occupational Diseases (CCOD). The Auditor-General (AG) had refused to audit the financial statements of this entity and the Committee had asked for a presentation on the reasons behind that.

The Minister indicated that  the problems around mining compensation were deep-rooted so this was not a recent phenomenon. The legislative background was also important to understand. The 1912 Act around compensation covered only the white workers, who were few in number, but in 1973 the Occupational Diseases in Mines and Works Act (ODMWA) was enacted to cover all mine workers for the first time. The black mine workers were, by that stage, around 400 000 in number. However, this 1973 ODMWA provided compensation only for cardiovascular and respiratory diseases. Before any compensation could be awarded, a health examination was required. When the compensation applied to white mineworkers only, there were three centres where these examinations could take place – one in Braamfontein (where the gold mines were situated, and at that stage there was no focus on the platinum mines, which were not important at the time. The white mine workers tended to be internal migrants, whereas the black mine workers were migrants from other countries. In addition, compensation for black mineworkers, if granted at all, was discriminatory in that it differed from the compensation for white mineworkers.

The new Act of 1993 removed that discrimination, but at this time the other two examination centres were closed, and everybody had to travel to Braamfontein. Not only was this very difficult in terms of people travelling from their homes, but there was far too high a workload there.

In 1999 it was decided that ODMWA should now fall under the Department of Labour. Funding for implementation of ODMWA came not from National Treasury, but from mining operations, so National Treasury was essentially not contributing anything to the compensation of miners. The CCOD handled the financial  issues and certain processes had to be followed in order for compensation claims to be considered.

Dr Motsoaledi noted that inspectors would travel around the mines and determine the risk factors for miners to succumb to diseases, but these inspectors were from the Department of Mineral Resources. All of these challenges led to a substantial backlog, which the Department of Health was currently trying to clear and address.

Compensation Commissioner briefing for Occupational Diseases
Dr Barry Kistnasamy, Commissioner, CCOD, took the Committee through the presentation. He fully agreed that the main challenges being faced by the Compensation Commissioner were legacy problems, and the challenges were largely inherited. There had, nonetheless, recently been a performance improvement, with submission of the strategic plan and annual performance plans, putting governance committees in place and meeting regularly.

The annual financial statements for 2010/11 and 2011/12 are awaiting an actuarial valuation report for incorporation, and would after that be submitted to the Auditor-General of South Africa on 30 September 2016. Revenue collection and claimant payments and performance outputs has improved. Other highlights of performance improvement were innovations in service delivery and integration of compensation systems.

The performance environment relied on the support of trade unions, Chamber of Mines and gold mining companies, social partners, ex-mine workers’ associations, global fund support for one stop services in neighbouring countries, World Bank support for tracking and tracing, involvement of other departments facilitated by the Presidency/Premier's office in Eastern Cape. There has been in progress in making business reforms in the registry, database, process mapping, website and weekly monitoring of certifications and payments. A finance team and medical doctors were in place. There had been collaborations across government and agencies, neighbouring countries, stakeholders and social partners.

Apart from the legacy problem, which goes back many years, other challenges faced currently were:
- Outdated information technology systems and business processes
- Lack of staff in legal, actuarial, medical, analytical sciences
- Lack of finances - revenue covers income protection while voted funds covers administration and medical services
- Personnel management, work ethos and culture
- Resignation of key personnel an inability to recruit health professionals
- The future model proposed is the integrated compensation system.

A staff member from the finance team took the Committee through the financial statements. The initial status of the financial statements was the first challenge. For example, there has been an outstanding financial statement since 2010/11. The 2010/11 financial year submitted to AGSA and disclaimed was not submitted to parliament. Processing in the accounting system limited to 2011/12 financial year, account was manually prepared in Excel 2011/12 financial year, no balance sheets reconciliations, financial statements not reconciled to trial balance (2009/10 financial year), manual interest calculations, manual payments records, no document and data management, no reconciliation of payments between administration and accounting system and no defined list of controlled mines.

Other financial challenges are the complexity of actuarial valuation, lack of detail on rejected payments to claimants, delays in procurement of new software, limitations with the previous accounting software and availability of government gazettes on controlled mines.

However, there has been an improvement in the financial statement. Achievements in this regard included: - Appointment of actuarial valuators in quarter 3 of 2015/16 FY
- Approval of the Register of controlled mines and works by risk committee
- Creation of risk assessment matrix
- Inspection of mines leading to submission of outstanding assessments
- Reconciliation of payments between cashbook and administration system
- Review of accounts payable detail, to allocate payments and rejections
- Business processes were mapped
- Tools have been provided on benefit calculator, internet banking to facilitate payments, risk shift upload tool for revenue processing, risk assessment matrix analytics and interest calculation model
- An audit team has been appointed by the AGSA
- Regular meetings with finance team and audit team, finance team and actuarial team

The audit for the 2011/12 financial year in progress.

Discussion
Dr W James (DA) thanked the Department for the compensation that was ongoing at the moment. However, there was a moral dilemna and failures on those who were in charge at the time, notwithstanding because some of the black miners who contracted lung diseases over a period of time had now died and were never compensated. Miners should have been x-rayed before exiting their mine jobs but that never happened. He asked what the cost of integration would be. He said that relieving the mine owners of liabilities should be looked into.

Ms C Ndaba (ANC) asked that the Department give details of the mining companies that were and were not contributing. She asked what would happen to funds not claimed. She mentioned that there were some issues about using information for tracing. She asked what information was being exchanged with Tom-Tom and whether it was working as a consultant or providing the information free of charge.

Mr H Volmink (DA) asked about the consequences management for anyone who had caused the legacy problem. He commented that nineteen years was a long time to address this backlog, and he wanted to know if this could be done sooner.  He also asked whether the CCOD could assure the Committee that the problem would be solved. He also asked who would be the new custodian of the integrated systems and where they could be housed.

Mr T Khoza (ANC) asked why some of the challenges were not met and whether there were plans to make sure that the problems were not repeated.

Dr P Maesela (ANC) said that more people would be needed to attend to the substantial work that must be done. He asked who was controlling the position in mines, what were the delays with the One Stop Centres coming into effect and why there were not more of them, particularly in areas where there were many mines, and whether the equipment for the screening of miners had been procured. He asked whether the incidences of compensation were increasing or decreasing, and how much the mining industry was contributing to the Compensation Fund. He asked whether the revised ODMWA would reach Parliament. Finally, he asked why the Department was overspending on salaries when it was under-staffed?

Ms L James (DA) asked how many provinces had mobile clinics and how many people have benefitted. She also asked what tools are used for tracing ex-miners?

The Chairperson asked what would happen in cases where it was difficult to trace a person for the purposes of compensation, and what would happen if an ex-miner due compensation had more than one wife. The Department should also be careful of mine workers’ associations or those who claimed to be helping the department to trace the ex-mine workers.

Dr Motsoaledi answered that the Department of Health was working with a range of experts like the Chamber of Mines, Group of Working, World Bank and other partners. The reason for the integration was to help the Department in addressing the issue of compensation/claims. He noted that claims under CCOD tended to be lower than under the Compensation for Occupational Injuries and Diseases Act (COIDA). He also conceded that the under-performance in the payouts from the Fund was another issue. For instance, compensation payments for TB were low and covered only loss of income, unlike COIDA, and the Department wanted to change those systems.

He said that the current paucity of One Stop Centres in some areas was noted, but the DoH was looking into “hotspot” areas where there were mining activities in the past even if there is not a lot of mining going on at present. There were One Stop Centres in North West.

Dr Motsoaledi said that the issue of TEBA selling information had not been resolved and the Department was still unhappy about it and was considering approaching the Constitutional Court, although it was subsequently established that the Department can get information from elsewhere and was not limited to buying it from TEBA.

The Minister said that the DoH would seek out ex-mineworkers and may find that they had died, but their estate beneficiaries would receive compensation. When a list of 105 000 mineworkers who were eligible for compensation was compiled, some of the mineworkers had been from Europe, since the discovery of gold in South Africa attracted miners from Portugal and other countries. The Minister was signing letters for people to go to Europe and seek out these ex-mine workers, but at the moment the focus was on ex- mineworkers from SADC countries. If compensation was not claimed, it would be reinvested into the Fund.
He explained that it would not make administrative sense for a mine worker to be compensated by different departments for different problems, and that was the reason behind the integration. Incidents of disease and possible claims would continue to rise as more people were traced and tracked. Tracing is done in different ways, including approaching traditional leaders, ex-mine workers unions, and district databases..

The DoH was not screening workers for TB, but mine houses were making sure that mine workers were being screened for TB. All the Department did was to hire inspectors to make sure these mine houses were doing the screening, as a preventative measure, and this seemed to be working so far.

He wanted to correct Members that the 1993 Act was not being amended because it had been decided that totally new legislation was needed to address the past problems. 

The Minister explained that the One Stop Centres had three units. The first would be a medical examination to determine if a person had a disease. Secondly, there was a rehabilitation unit. The third unit dealt with compensation issues, ensuring that a person with a potential claim knew where to go and what to do to get  compensation. This is where TEBA was currently making money because it was charging mine workers for this information, whereas the new One Stop Centres would be providing access to information without charge.

He noted that the DoH was working hard to abolishing the use of mercury in the mining industry in the country.

Dr Kistnasamy said that policy change and social protection is the ambit of Department of Labour. He explained that Tom Tom was doing mapping, and was not involved the database. He repeated that the TEBA issue had not yet been resolved, and the Department was trying to get the information through  other mechanisms.

He noted that there were budget constraints in getting One Stop Centres at some places, but the DoH was working on procurement issues.

He added that a mine would be gazetted as a “controlled” mine and be obliged to pay a levy after having been inspected for an assessment of risk in the mine. However, some of the preventative mechanisms fell under the Department of Mineral Resources.

He added that the Department was picking up information on bottlenecks and on issues of over and under-spending. It was also working with the Departments of Justice and Home Affairs to help with information to enable it to trace.  Where an ex-mineworker had more than one wife, Letters of Execution from the person appointed to managed the estate were needed.

He mentioned that the Accounting Officer for the Compensation Fund was the Director-General of the DoH. The Commissioner did not sign cheques for the compensation.

The Chairperson again cautioned that the DoH should be cautious of claims from companies who said that they knew ex-mineworkers.

The meeting was adjourned.
 

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