Compensation Commissioner for Occupational Diseases 2010/11 & 2011/12 Annual Report

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Health

28 February 2018
Chairperson: Dr P Maesela (ANC) (Acting)
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Meeting Summary

The Portfolio Committee on Health was presented with the 2010/11 and 2011/12 Annual Reports of the Compensation Commissioner for Occupational Disease. The Chairperson of the Committee informed Members that the Annual Reports were long overdue, and the Commission had long been promising that it was working on the reports. The Auditor-General had been unable to audit the books previously as many issues had been outstanding. The Compensation Commissioner for Occupational Diseases had faced a range of problems leading to his inability to produce financial reports since 2009/2010. 

The Commissioner indicated that he and most of the new senior management team had been in their positions since 2012. The background of the 2010/11 report included details about the non-provision of Annual Reports since 2009/10, the adverse audit opinion by the Auditor-General of South Africa in prior years, legacy problems of a collapsed system and a passive system which involved claimants going to Johannesburg for their claims.

The Compensation Fund had complexities, such as dealing with latent diseases from ten to 20 years earlier to the present. Most workers entitled to compensation had left their original workplaces and there was a lack of awareness by workers.  The management team was faced with many professional issues and the lack of equipment required for diagnostic tests.  Other problems were administrative as well as the fact that the levy paid in respect of occupational diseases covered income protection only.  Services that the Commission offered covered benefit for medical examinations for ex-workers, certification by the Medical Bureau for Occupational Diseases as a compensable disease or for loss of earnings for Tuberculosis and payments by the compensation Commissioner.

The Commission had no Strategic Plan or Annual Performance Plan for the earlier periods. However, some planned activities included review of legislation, business process re-engineering, internal controls and improved governance.

SCOPA had previously met with the Commission and had made a number of resolutions in respect of CCOD. The resolutions required CCOD to address the policy framework as well as oversight and governance. SCOPA had indicated a number of specific issues for CCOD to address in each of the two areas.

In 2010/11, the Auditor-General had issued a Disclaimer.  The Levy revenue showed a lack of inspections and there was no register of controlled mines & works. There were concerns about Provisions, in respect of the prior year’s balance and movement, Operating Expenses and Trade Receivables.  The Auditor-General had found matters relating to many very serious issues.  The Actuarial valuation of 31 March 2016 (rolled back) had been accepted by the Auditor-General and governance structures. There had been substantial technical and human resource interventions by mining companies and the Chamber of Mines. The interventions had been made difficult by work stoppages and opposition to the reforms.

In 2011/12, the achievements of the Commission had included a draft strategic plan, recruitment of a Deputy Commissioner and filling of posts. Performance comprised draft quarterly reports, five policies and a draft review of the Act, as well as eight workshops and 11 governance meetings. In the Eastern Cape project, the Commission had paid 126 claimants, intensified the ‘Track and Trace’ project and had worked with the office of Premier and Eastern Cape Department of Health.

The challenges faced by the Commission included staff vacancies, Infrastructure, a registry of files & claimants, missing documents in files, beneficiary details and TEBA (The Employment Bureau of Africa) records of service and financial challenges comprising revenue receivables, payments and provisions.

The Commission had received a Qualified audit from the Auditor-General in 2011/12. Particular issues included the Levy revenue, and the verification of revenue submissions as well as the register of controlled mines and work, and Trade receivables. Emphasis of matter was on a lack performance information, quarterly reporting, submission of financial reports, effective internal audit, internal control, a Risk Committee and risk management. Other matters included inadequate revenue management, inadequate leadership and poor financial and performance management.

Meeting report

Election of Acting Chairperson and replacement for James, Ms L (DA)

Ms M Dujwa (ANC), Chairperson of the Committee was absent with an apology. 

Dr P Maesela (ANC) was nominated by the Committee to act as the Chairperson.

It was announced that Ms L Wilson (DA) would replace Ms L James (DA) in the Committee.

Opening Remarks

The Acting Chairperson informed Members that the meeting was to review the 2010/11 and the 2011/12 annual report of the Compensation Commissioner for Occupational Diseases (CCOD).

The ActingChairperson explained that the Annual Reports were long overdue, and the Commission had long been promising that it was working on the reports. The Auditor-General had been unable to audit the books as many issues had been outstanding.  The Compensation Commissioner for Occupational Diseases had faced a range of problems leading to his inability to produce financial reports since 2009/2010.  Eventually, the Compensation Commissioner, along with his staff, had been able to begin to remedy the situation and would present two outstanding reports, those of 2010/2011 and 2011/12.

Compensation Commissioner for Occupational Diseases (CCOD) Annual Report 2010/11

Dr Barry Kistnasamy, Commissioner, Compensation Commissioner for Occupational Diseases, informed the Committee that he would be making the presentation and offered apologies for the absence of the Director-General of the National Department of Health, Ms Malebona Matsoso.

He explained that the Commission was dealing with issues relating to an Act which was 106 years old. When he had been appointed to CCOD, he had found his office in a building in utter disrepair with dysfunctional lifts and telephone services and it had taken five years for renovation to be done.  

The background to the 2010/11 report included non-provision of annual reports since 2009/10 and adverse audit opinions by the Auditor-General of South Africa prior to that date.  The new senior management team appointed since 2012 had inherited a legacy of problems from a collapsed and passive system which involved claimants going to Johannesburg for their claims. The compensation fund had complexities such as dealing with latent diseases from ten to twenty years back to the present.  Most of those workers had left the workplace, there was no clinical assessment and there was a need for diagnostic tools such as X-rays, Lung Function and TB tests.  The management team had to deal with a lack of awareness by workers, a lack of services and the fact that the levy covered income protection only. The mandate of the Commission included occupational diseases under the Mines and Works Act of 1973.  In addition, they worked with Miners Phthisis Act of 1912 which had a 106-year history. The Commission had to manage the provision of compensation to workers and ex-workers in controlled mines and works in respect of occupational lung diseases.

The Commission was also mandated to collect revenue based on risk shifts and commodity and transfer payments from voted funds for pensioners. Services that the Commission offered covered benefits for medical examinations for ex-workers, certification by the Medical Bureau for Occupational Diseases as a compensable disease or for loss of earnings for Tuberculosis (TB), and payments by the Compensation Commissioner. In the Eastern Cape project, 56 claimants had been paid R150 000 as at 31 March 2011. Also, the ‘Track and Trace’ project, which included the one-stop service centre and mobile services, had been intensified and the Commission was working with the Office of the Premier and the Eastern Cape Department of Health.

 The Commission had an Advisory Committee, an Audit and Risk Committee, an Adjudicating Committee and a Risk Committee in relation to Governance. The Commission had no strategic plan and annual performance plans for prior periods. However, some planned activities included a review of legislation, business process re-engineering, internal controls and improved governance.

SCOPA had previously met with the Commission and had made a number of resolutions in respect of CCOD. The resolutions required CCOD to address the policy framework as well as oversight and governance.  SCOPA had presented the Commission with a list of issues that had to be addressed. Under the Policy framework, the Commission was to address policies & procedures, qualifying mines and works, debtors, the accounting system and the outdated Act. Under oversight and governance, SCOPA wanted to see monitoring by the National Department of Health, audit Committee, Internal audit an Accounting officer and the merging of Compensation Laws.

The Auditor-General had issued a Disclaimer for 2010/11.  The Levy revenue showed a lack of inspections and there was no register of controlled mines and works. There were concerns about Provisions, in respect of the prior year’s balance and movement, Operating Expenses and Trade Receivables.  The Auditor-General had indicated emphasis of matter relating to many very serious issues.  The Actuarial valuation of 31 March 2016 (rolled back) had been accepted by the Auditor-General and governance structures. There had been substantial technical & human resource interventions by mining companies and the Chamber of Mines. The interventions had been made difficult by work stoppages and opposition to the reforms.

Dr Kistnasamy stated that issues that the Commission needed to address covered restatement of amounts, the lack of a strategic and annual performance plan, the lack of quarterly reports, the lack of submission of financial reports, inadequate revenue management, lack of effective internal auditing, lack of risk Committee, inadequate leadership, poor financial and performance management and lack of risk management.

Mr M Samson, the Deputy Commissioner for Occupational Diseases, presented a summary of the financial performance of the Department indicating that total assets of the Commission were R1 736 916 727 in 2010, and R1 472 042 753 in 2011.

Compensation Commissioner for Occupational Diseases (CCOD) Annual Report 2011/12

Dr Kistnasamy stated that the mandate of the Commission included legal provisions and the trading account which involved revenue from levies, payment of compensable disease claims, and the investment of levies as well as administration of the compensation fund. Achievements of the Commission comprised a qualified revenue audit, the draft of a strategic plan, recruitment of a Deputy Commissioner and filling of posts. The Commission’s performance comprised draft of quarterly reports, five policies and draft review of the Act as well as eight workshops and 11 governance meetings. In the Eastern Cape project, the Commission had paid 126 claimants, intensified the ‘Track and Trace’ project and was working with the Office of Premier and Eastern Cape Department of Health.

He mentioned that challenges faced by the Commission included staff vacancies, Infrastructure, a registry of files and claimants, missing documents in files, beneficiary details and TEBA (The Economic Bureau of Africa), which had been responsible for the recruitment of mineworkers, records of service and financial challenges comprising of revenue receivables, payments and provisions.

Mr Samson, stated that the total revenue for the year was R 422 069 000 while the total expenditure was R 515 839 000. Total assets were R 2 122 758 000 and the total liabilities was R 2 122 758 000. Governance for the Commission included the Advisory, Audit and Adjudicating Committees.

Dr Kistnasamy said that there had been no strategic plan or annual performance plans for the prior period and some planned activities include a a review of legislation, business process re-engineering, internal controls and improved governance.

The Commission had received a Qualified audit from the Auditor-General in 2011/12. Particular issues included the Levy revenue, and the verification of revenue submissions as well as the register of controlled mines and work, and Trade receivables. Emphasis of matter was on a lack performance information, quarterly reporting, submission of financial reports, effective internal audit, internal control, a Risk Committee and risk management. Other matters included inadequate revenue management, inadequate leadership and poor financial and performance management.

Discussion

The Chairperson asked the Commissioner to explain the type of levy which covered income protection and whether it covered the income of all miners or potentially sick ones as indicated in the 2010/11 report. He also asked the Commission about compensation provided for workers in the controlled mines. He asked whether there were uncontrolled mines and if the Commission had a register of controlled mines. Did TB screening take place in the controlled mines? He stressed that rural areas should be developed because there was a perpetuation of migrant workers which created social problems and spread disease.

Dr S Thembekwayo (EFF)  sought clarity concerning the Northern Cape Asbestos case where claims had been submitted.  What procedure had been followed in dealing with claims for asbestos disease? How were the surroundings areas accommodated in the Kuruman project?  He asked how children benefited when their parents passed away. How many claims had been paid out since the establishment of the Kuruman project?

Mr N Matiase (EFF) asked whose responsibility it was to provide the Auditor-General (Auditor General) with the relevant information for the AG to provide auditing documents. With regard to the predetermined objectives, what were the consequences of an unprepared and an unapproved strategic plan and when would that be corrected? What had caused the Accounting Officer not to provide Parliament with the strategic plan? In the 2011/12 report, what progress had been made in managing internal revenues in control mines and works? What changes were needed since some reports were missing?

Ms L Wilson (DA) spoke about the fact that much emphasis had been put on the control of the mining disease in the Eastern Cape. She asked whether it was to be rolled out to the other provinces.

Ms S Kopane (DA) asked who had decided which mines paid levies to the Commissioner and when had the list of controlled mines been updated. When had the Commissioner appeared before SCOPA and what plan of action had subsequently been put in place and implemented?

MS C Ncube-Ndaba (ANC) asked if the Commission had a turnaround strategy and how the Commission was going to ensure that it would put corrective measures in place for all the issues raised by the Auditor-General in respect of their previous reports. She also asked whether the one-stop offices in all the provinces were viable, efficient and whether the information was properly disseminated in those centres. What measures had been put in place to get information and how could the constituent offices be utilised in terms of dissemination of information?

The Acting Chairperson asked how the Commission defined former workers who were receiving pensions as opposed to those that were not receiving pensions. He also asked the Commission to clarify the fact that the Act which was 106 years old allowed pension payment to former workers or their spouses whereas the new Acts did not. Where did the problem lie in developing new legislation to deal with some of the challenges of the old Acts of 1912? Was the amount paid for compensation a once-off payment or was it continuous?

Commission’s Response

Dr Kistnasamy said that he was dealing with the consequences of a system that had created problems for workers in general, particularly migrant mine workers. Rural-urban was the first issue of internal migration in South Africa and the second issue was workers from surrounding countries migrating to South Africa. In 1920, one in two mine workers in South Africa were non-South Africans. Currently, one in three mine workers were not South Africans and  that was from the TEBA database. It had been picked up from the database that a lot of ex-mineworkers from the Eastern Cape were currently in the Western Cape because of internal migration. Some mine workers had also moved to North West because gold mining had declined. On the issue of migrant labour and the consequences, the first issue was that the law for the red ticket examination allowed white migrants workers to go to Johannesburg to get their medical examination done. African workers were seen by TEBA and SEVA. In the Mine and Safety Act of 1996, the medical examination was decentralised to the mining companies and that very important part of the database had been lost.

The issue of migrant labour, economic development and rural development was a wider issue which involved other departments and Committees. The Commission had partnered the Department of Planning, Monitoring and Evaluation in working on the distressed and post-mining communities. That dealt with the Mining Charter and the domestic labour-sending areas. It was discovered that South Africa caused the problem and dumped it on the labour-sending areas. In 2014 Australia had 14 cases of black lung disease in a mining area in Queensland. A special enquiry, the Black Lung Commission had been set up in Queensland. Comparing that with the South African system, there had been 140 000 cases of mine workers with TB, but no enquiry had been set up. Cabinet had taken a resolution in 1999 to put everything under the Department of Labour because under an international resolution the Department of Labour was responsible for managing the prevention and protection of workers from diseases. The migrant labour system was a deeper process which affected all workers.

Payments of compensation were lump sum payments and compensation for disabilities provided up to 30%. The payment was based on earnings and covered first and second-degree issues.

He mentioned that the legislation dating from 1912 had been modified along the way. There was an Act in 1940 which had become the current Act in 1973. That Act made provision for pensions of lump sums.

Mr S Matswedi, Deputy Commissioner of CCOD, said that people who qualified for pensions under the old Act were taken on in the current Act, but current Act did not allow for payment of pensions. There were people who qualified for pensions but were not allowed to receive them based on the current Act of 1973. Over 100 people qualified in 2012 and a transfer was given for that.

Dr Kistnasamy said that the levy was based on the commodity. The current levy was R8.50 per risk shift for gold mines and all workers in that goldmine were covered provided they had risk shifts. The levy was for compensation and income protection. The levy covered administration, healthcare and cost of income protection.

On the concept of controlled mines and uncontrolled mines, He told the Committee that the Commission was working with the Department of Mineral Resources on a complete register of mines. Controlled mines were an historical legacy issue. Only controlled mines pay the levy, the uncontrolled mines do not pay the levy. There was a substantive team working on the issue of controlled mines.

Mr Matswedi said that the Commission was currently dealing with 996 mines. Out of those, 358 had been verified.  Gazettes were outstanding in 20 mines, 585 had been closed because they were no longer profitable to big companies, but some miners had taken over and were operating the mines. 58 mines were in the process of verification. 122 mines were identified as out of control mines. The Auditor-General pulled out data of previously gazetted mines which were controlled. 25 mines were in the process of being gazetted. The Commission sent out teams to visit the mines and go through their records. They verified the gazettes and identified whether the mine was operational or not.

Dr Kistnasamy mentioned that the Commission needed additional resources although they had put a special team together. TB screening in the control mines was running at 97%. The Commission would look at predictive mortality, race factors etc in TB based on the data.

He mentioned that a range of issues were related to the Kuruman region. There was a one-stop service centre in Kuruman and there should be one per province. However, there are only four one-stop service centres. Eleven mobile clinics would be started that year in the Eastern Cape. Discussions on whether additional funds could be brought to the mobile clinics were being held

Dr N Mitsheli, Director of MBOD (Medical Bureau for Occupational Diseases) said there had been a lot of submissions in 2015/16 from health service providers. However, most of them had quality issues. All the service providers needed to be trained to address quality issues. The team from the MBOD was going from one province to the other to do training and quality control. They were also supporting SADC countries with one-stop service centres.

Dr Kistnasamy mentioned that 25 doctors had been trained in Johannesburg in November 2017. They were from the four one-stop service centres and the seven one-stop centres in the neighbouring countries. The training was being intensified with lung technicians and radiographers. He suggested that the Chairperson call a meeting to discuss the Asbestos Leave Trust on what the output, claims and settlements of the trust were. The big issue with asbestos was that one could contract the disease through the environment. How did one differentiate the contraction of asbestosis through the environmental and contraction through work? Beneficiaries were found and paid if a person had died as a result of their work.

The Auditor General’s Office stated that, on the issue of the consequences management in 2010/11 and 2011/12, no information had been found. The current management also could not find the information. Dr Kistnasamy said that he had taken over in 2012 and had only worked as the Commissioner and Head of Compensation in 2014. The Deputy Commissioner had begun in May 2012 and the previous Commissioner had resigned in June 2012. So, most members of management were not around during that period.

He again mentioned that the Eastern Cape project was a special project of R54 000 000 given by the Chamber of Mines to the Eastern Cape government. That arrangement went back to prior to 1994. That was why it had been highlighted as a special line item. The Commission was trying to outline the issues that had been resolved in terms of SCOPA. The Commission had undertaken lots of mass campaigns and outreach activities. There was a call centre with multilingual services

The Commission demonstrated the TEBA database to the Committee

The meeting was adjourned.

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