Umemployment Insurance Fund on Ex-Mineworkers Report

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Labour

17 November 2008
Chairperson: Ms O Kasienyane (ANC)
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Meeting Summary

The Unemployment Insurance Fund Commissioner, Department of Labour, on behalf of the Interdepartmental Task Team appointed on the recommendation of the Ad Hoc Committee on Matters Relating to the Ex-Mineworkers Union, briefed the Portfolio Committee on the summary and recommendations of the 25 March 2008 Report of Ad Hoc Committee on Matters Relating to the Ex-Mineworkers Union, the appointment of the Interdepartmental Task Team, its assignment and its recommendations.

The Chairperson proposed calling the Task Team to give a second briefing early in the next Parliamentary term, and inviting ministers of departments concerned. In the meantime, the Committee would be guided by the Task Team’s recommendations. Members asked questions of clarity in the expectation of receiving further information when the Committee met with the Task Team again. As per the recommendations of the ad Hoc Committee, it would be meeting regularly with the Task Team.

It was important for the Committee to know who qualified for what benefits, in terms of current law. Tracing the ex-mineworkers concerned was a formidable task, because of difficulty of accessing records, many of which had to be searched manually. The mechanism for tracing the ex-mineworkers concerned, and how to publicise the project, needed to be determined.  It was necessary to call the Chamber of Mines, and the mining companies, to meet with the Committee. It had to be established if the Task Team would be given access to the manual files. It was important not to create expectations that could not be fulfilled.

It was questionable why funds entrusted to Old Mutual had been moved to Fidentia, when Old Mutual had a higher rating than Fidentia, a matter that perhaps exceeded the capacity of the Task Team to investigate.

A Member expressed concern about the job losses in the motor industry and rising unemployment in South Africa.

Meeting report

Introduction
The meeting was late in starting and there were few members in attendance but a quorum was not required, since the day’s meeting was to receive a briefing. The Chairperson expressed the hope that Members were ‘doing enough’ in preparation for the forthcoming elections. She advised Members generally of the possibility that they could be recalled from their constituencies, because there was much legislation that still awaited completion, although the current week was, officially, the final week of the present parliamentary term.

The Chairperson welcomed representatives from the Interdepartmental Task Team dealing with  the matter of the Ex-Mineworkers. The Task Team was to update the Portfolio Committee on Labour regularly.

Interdepartmental Task Team progress report on Ex-Mineworkers Union
Mr Boas Semwe, Unemployment Insurance Fund Commissioner, was accompanied by Ms Hlonitshwa Mpaka, Parliamentary Officer, Department of Labour, and by Ms Boniswa Hewe, Chief of Staff, Department of Minerals and Energy, who was a member of the Task Team.

Mr Semwe, on behalf of the Interdepartmental Task Team, drew the Committee’s attention to the summary and recommendations of the 25 March 2008 Report of Ad Hoc Committee on Matters Relating to the Ex-Mineworkers Union.

Background
Following the People’s Assembly held at Mbhizana in the Eastern Cape from 17 to 19 September 2007, a motion was tabled in the National Assembly on 19 September 2007 for the establishment of a committee to examine the concerns of the Ex-Mineworkers Union; thereupon Parliament established the Ad Hoc Committee on Matters Relating to the Ex-Mineworkers Union, comprised of 13 Members of the National Assembly under the chairperson ship of Mr R Sonto (ANC). This Committee was initially required to report to the National Assembly in October 2007, a date later extended to 31 March 2008.

On 26 June 2008 the National Assembly had adopted the Committee’s Report, dated 25 March 2008, in which the Committee had recommended the establishment of an Interdepartmental Task Team ‘consisting of the Department of Labour, the Department of Health, the Department of Mineral and Energy and the National Treasury’ (paragraph 6.1), that the Team be headed by a senior official from the Department of Labour) (paragraph 6.2), and that the Portfolio Committee on Labour should oversee the implementation of the Report’s recommendations and receive regular updates from the Interdepartmental Task Team (paragraph 6.8).

Mr Semwe then briefed the Portfolio Committee as follows.

Report of the Ad Hoc Committee on Matters Relating to the Ex-Mineworkers
The lack of a co-ordinated approach hampered resolution of the ex-mineworkers’ concerns. This difficulty was compounded by the lack of proper record keeping of the identities of miners. This made it difficult to trace beneficiaries, with the result that monies that were owed to them were retained by institutions.

The following institutions were identified – Fidentia, which retained R789 million; the National Department of Health, which  still retained R20 million after R34 million had been paid out to beneficiaries who had been identified; and the Chamber of Mines, which retained R42 million.

The Ad Hoc Committee’s view was that there was indeed substance to the claims of ex-mineworkers.

The ex-mineworkers wanted the definition of a beneficiary to be expanded to include more distant relatives like in-laws or parents. The rules of Funds in which ex-mineworkers were members usually precluded payment to other than a child or widow.

Certain promises were made by certain departments and institutions. The mining houses denied knowledge of records that were supposed to have been kept by them. ‘The Provident Fund’ was identified as the main holder of the monies for ex-mineworkers.

The Ad Hoc Committee had recommended the establishment of an Interdepartmental Task Team to process the findings and recommendations of the Ad Hoc Committee, trace all the monies that belonged to the ex-mineworkers, and publish regular reports in both the electronic and print media.

Appointment of the Interdepartmental Task Team
The Task Team was to be headed by a senior official from the Department of Labour.

The Acting Director-General of the Department of Labour had secured the nominations of Advocate Maile Ngake, from the Department of Health, Ms Boniswa Hene form the Department of Minerals and Energy, and Ms Judy Naidoo, from the National Treasury.

The first meeting of the Task Team had been convened on 13 August 2008.

The Interdepartmental Task Team’s assignment
The Task Team was to co-ordinate and manage a single office to process all claims. Monies for ex-mineworkers who could not be traced must be transferred to the State. The Ad Hoc Committee had recommended that this ceded money should be used for development in the ‘labour-sending’ areas. This should follow after the process to trace the beneficiaries had been substantially exhausted.

Relevant legislation regarding the transfer and use of the money may require amendment. In addition the rules of the relevant pension funds must be amended and this might also require legislation as in some respects this would amount to an expropriation (Ad Hoc Committee’s Report, paragraph 6.4).

The transaction made between Old Mutual and Fidentia needed to be investigated as this could involve huge sums of money.

All documents kept by stakeholders that could assist in tracing beneficiaries should be surrendered to the Task Team and kept by the Department of Labour.

The Task Team should regularly brief the Portfolio Committee on Labour, which should oversee the implementation of the Ad Hoc Committee’s recommendations.

Interdepartmental Task Team’s recommendations
The Task team should meet with the Portfolio Committee to discuss its terms of reference and mandate, receive guidance on the scope of its work and how to carry it out, and advice on the definition of ‘ex-mineworker’. Cabinet ministers of the departments concerned should be informed of the Task Team’s existence and its mandate to ensure that the Task Team was supported at the highest level in government departments.

The Task Team should be allowed to determine the resources needed to execute its mandate subject to approval of the Portfolio Committee and of the Department of Labour. The resources would include human resources, including legal experts and skilled financial and accounting personnel, outside service providers, office equipment, and financial resources necessary to execute the Ad Hoc Committee’s recommendations

The Ad Hoc Committee’s existence and its mandate should be made known to all the structures and organisations that it would interface with it.

The Task Team especially recommended that the Portfolio Committee convene a meeting with all stakeholders who had made representations to inform them of the recommendations. This would ensure that institutions that were involved would co-operative with the Portfolio Committee and the Task Team. Regular meetings should be held with the Ex-Mineworkers Union and other Stakeholders in order to brief them on progress in implementing the Ad Hoc Committee’s recommendations.

The Task Team would set out a project plan with time frames to indicate how the project would be executed. The project plan would be brought before the Portfolio Committee for discussion and approval.

A project steering committee would be constituted to monitor the project’s implementation on a monthly basis. This steering committee would include labour unions in the mining industry and the Chamber of Mines. Regular meetings should be held with the Portfolio Committee to discuss progress on the implementation of the project plan.  

Discussion
The Chairperson said that the Committee would require more details and proposed calling the Task Team to give a second briefing early in the next Parliamentary term, and inviting ministers of departments concerned. In the meantime, the Committee would be guided by the Task Team’s recommendations, which indicated that the Task Team had already made a good start to its work. She asked for the name of the senior official of the Department of Labour who was to head the Task Team.

Mr Semwe responded that the senior official from the Department of Labour was he, Mr Semwe, himself.

She suggested that Members might seek clarification about the monies involved.

Mr Semwe responded that the money from the Department of Health was R54 million of which R34 million had been disbursed.

According to paragraph 3.5 of the Report of the Ad Hoc Committee on Matters relating to the Ex-Mineworkers’ Union, the Department of Health had begun a process of capturing information from old files, a process which resulted in a compilation of a list of 18 500 names of possible beneficiaries. This list was used to pay a total of 11 200 people who qualified, each receiving R2 700 after approval by the Minister of Health. This process to pay out the 11 200 individuals began in March 2003. The money was paid out from the original R54 million and the current balance was about R 20.8 million that still needed to be paid out to qualifying, but untraceable beneficiaries. 

The Department of Health, however, was paying out monies only where records existed. Ex-mineworkers, however, were asking for money to be paid out in the absence of proper records.

Those who did receive payments complained that they did not receive enough to compensate for the losses caused by the diseases from which they suffered. In view of today’s high cost of living, it could be agreed that their complaints were justified. He hoped that some of Mr Mzondeki’s ex-mineworkers would be able to make a presentation. The interest that had accrued on the R54 million should be used for the benefit of the ex-mineworkers.

The Chairperson was confident that Members would want to learn more about Fidentia, and the disposition of the R789 million that it had retained. She asked if Members would agree with her that this present meeting was just a briefing, and that the Committee would have to sit subsequently and discuss the Task Team’s recommendations, and asked for questions of clarity.

Mr M Nene (ANC) said that more questions of clarity would be forthcoming when the Task Team reported further on its progress. At present there were ‘some grey areas’. The mechanism for tracing the ex-mineworkers concerned, and how to publicise the project, needed to be determined. 

Mr Semwe responded that the matter of communication and publicity would be addressed fully after the Portfolio Committee had given ‘a green light’ to proceed. Parliament had already indicated that it wanted the Task Team to advertise in the newspapers. Radio broadcasting also had to be used. It might be necessary to announce names over the radio.

Mr Mzondeki (ANC) declared his special interest as an ex-mineworker. Many people had spoken to him about the concerns of the ex-mineworkers. He had been involved personally in some of those cases in which they had not been paid what was due to them. Mr Semwe might wish to note his questions and answer them when the Committee met again with the Task Team. It was important for the Committee to know who qualified for what, in terms of the law as it stood.

Mr Mzondeki referred to what was called the 1970 Mineworkers’ Provident Fund, which was specifically for black mineworkers. If he recalled correctly, it was open only to those workers who received their pay on a monthly basis, not to those paid on a daily basis. There was also, if he recalled correctly, the Mineworkers’ Pension Fund, which was open to those paid daily as well as to those paid monthly. There was no retrospective payment. A miner would receive his pension only from the time when the pension scheme into which he had contributed was established, even if he had been a miner since a much earlier date. So if he belonged to the 1970 Mineworkers’ Provident Fund, and later on there came the National Union of Mineworkers, established in about 1984, his contributions to the first fund would be transferred to the second fund. There was much confusion in the mind of the public. Miners were under the impression that they qualified for all kinds of benefits.

It was necessary to call the Chamber of Mines, and the mining companies, to meet with the Committee.

A challenge was that, when talking about accidents, there were certain people who qualified or did not qualify in respect of certain injuries. If a miner was involved in what used to be called ‘a slip and fall incident’ – this meant an accident whilst one was in the shower and slipped and fell – he would not be compensated for that. However, it came to be realised that some people had to be compensated retrospectively from as early as 1960 or so. It became necessary to trace some people even as far away as Lesotho, Swaziland, Malawi and Mozambique.

The other challenge in assisting the beneficiaries was the manual system of record keeping used in the Unemployment Insurance Fund. This necessitated a great deal of manpower.

It was necessary to go to the Chamber of Mines with some of these cases and ask permission to go into their files. It was necessary to trace the date when a claimant was injured and actually see the medical report.

Mr Mzondeki said that many claimants had been ‘taken off the system’ because nobody wanted to search the records manually. It had to be asked if the Task Team would be given access to the manual files. Some of the companies, if Mr Mzondeki recalled correctly, had been reported to the Chamber of Mines. Many of those files still existed. Thus, there was the question of who qualified.

In Mr Mzondeki’s own constituency he had seen pamphlets. He was worried and did not know what kind of information would be given. Some people had been given to believe that they qualified for death benefits. Mr Mzondeki said that black people used never to qualify for death benefits. It was only in relatively recent times that they had begun to qualify for death benefits. It was a political matter if one wanted to assert that a black person qualified for death benefits prior to that time, but in terms of the regulations of the company concerned, they had not qualified.

Mr Mzondeki hoped that by the next meeting, the Task Team would be able to provide more information on some of the matters to which he had alluded.

Mr Mzondeki recommended calling some officials from the Chamber of Mines and some of the mining houses who knew what the policies were in the past and what were introduced later, so that Members could be well informed when they returned to their constituencies. It would also be useful to have meetings with the people who were being sent out into the communities and ascertain what information they were disseminating.

Mr Mzondeki was concerned about creating expectations that could not be fulfilled. 

With regard to the definition of an ex-mineworker, the answer would be determined by, for example, asking the question: ‘Where were you in 1970? If in 1970 there was a scheme and you were already an ex-mineworker, and you were not paid that money, then you were an ex-mineworker that could be considered in that – I’m just making that as an example.’

Mr Mzondeki agreed with the Chairperson that one would want to prioritise the matter.

Mr Mzondeki hoped that Members would be able to interact with the members of the Task Team, and subsequently ‘to engage the trade movement’ so that there would be a unified understanding of the ex-mineworkers’ concerns.

Mr Semwe responded that he hoped that some of Mr Mzondeki’s ex-mineworkers would be able to make a presentation.

The Chairperson said that Mr Mzondeki’s questions were very pertinent in view of his experience as an ex-mineworker, especially his question as to who qualified for benefits and for what.

Mr Semwe responded that the Task Team was seeking substantial input from the Committee, and Mr Mzondeki had ably begun to provide such valued input. Unfortunately some of the Task Team members had been unable to attend. It was however their wish to attend and participate.

The Chairperson asked for clarification of the transaction that had taken place between Old Mutual and Fidentia (page 3 of Interdepartmental Task Team on Ex-Mineworkers Report, dated 18 November 2008). She asked if it was to be investigated only because of the large sum of money involved.

Mr Semwe responded that the matter was to be investigated partly because it was such a large sum, but more importantly, it was to be investigated why certain parties had decided that funds should be moved from Old Mutual to Fidentia. It was alleged that Fidentia had been operating as a pyramid scheme. Before investing money, one should examine the rating of that institution. Old Mutual had a higher rating than Fidentia.

Mr Semwe feared that this matter of funds moved by Old Mutual to Fidentia exceeded the capacity of the Task Team to investigate. Perhaps the company that was conducting the sequestration could be called to give their report on what amount of money remained. Perhaps the Chamber of Mines could be called to respond.

A committee member said that there was no such union as the Ex-mineworkers Union in Natal; more information was needed here. Also it might be construed as an abuse of the system to pay benefits to members of the extended family (distant relatives if there was no wife or child) since this was not done with other workers.

The Chairperson said that the information would really assist the Portfolio Committee. One could not allow any attempt to mislead Parliament. Ms Boniswa Hewe, Chief of Staff, Department of Minerals and Energy, who was a member of the Task Team, would be of assistance to the Portfolio Committee in obtaining information on the mining houses. 

Ms Mkize who had just arrived, having had to attend other meetings, asked if mine workers were given documentation when taking up employment about what benefits they might expect, and, if so, if the Committee had a copy of such documentation. She expressed concern about the job losses in the motor industry and rising unemployment in South Africa.

The Chairperson shared Ms Mkize’s concern.  The Committee did not have a copy of such documentation. She explained that this was an introductory meeting on the subject and subsequently the Committee would convene meetings with stakeholders.

Mr Mzondeki said that there was an induction process when a worker began his work at a mine. In that induction process, the mineworker would be told what he qualified for. The question remained, however, as to whether this induction process was carried out effectively. This information was not in the possession of the Department of Labour; it was with the mining houses.

The Chairperson said that Ms Boniswa Hewe would assist in providing that information. 

The Chairperson said that Members should gather information from their constituents and, expressing the hope that they would enjoy their constituency work, wished them well for the holidays. 

The meeting was adjourned.

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