Class action settlement reached for miners with silicosis and/or TB

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GoldThe Legal Resources Centre (LRC), Abrahams Kiewitz Attorneys and Richard Spoor Attorneys, on behalf of thousands of mineworkers, have reached a class action settlement with the Occupational Lung Disease (OLD) Working Group, which represents various South African gold mining companies. Mining Weekly reports that the settlement, which is the first of its kind in South Africa, will see compensation paid to eligible mineworkers suffering from silicosis and/or tuberculosis (TB).

The settlement agreement is a result of three years of extensive negotiations between the representative attorneys and the OLD Working Group, which represents African Rainbow Minerals, Anglo American South Africa, AngloGold Ashanti, Gold Fields, Harmony Gold and Sibanye-Stillwater. Pan African Resources, which only recently joined the litigation process, is still considering whether it should sign the agreement.

According to the report, this settlement will provide much-needed compensation to all eligible workers suffering from silicosis or TB who worked in these companies’ mines from 12 March, 1965 to date. The parties to the agreement believe that a compromise settlement is far preferable for all concerned than an inevitably lengthy and expensive litigation process would be, allowing for claimants to receive compensation and relief for their conditions more quickly.

The report says the parties believe the settlement represents a fair outcome for the about 100 000 claimants and a sustainable outcome for the gold mining companies.

LRC national director Janet Love stated that the settlement marked the end of a long road for the LRC, starting in 2003, which led to the Blom/President Steyn Mine silicosis litigation. The Blom/President Steyn Mine matter, she explained, was the first case on silicosis in South Africa and served as a test case to establish the liability of Anglo American South Africa as a parent company. “It laid the foundation for Mbuyisa Neale and Leigh Day to negotiate the establishment of the Q(h)ubeka Trust in March 2016 and it provided the primary evidentiary basis to launch the class action.”

The report says compensation will be administered by the Tshiamiso Trust, which will be established following court approval and will be responsible for the distribution to claimants. While there is no limit on the number of potential claimants, any claimant who has a qualifying claim will receive the compensation owed to him or her during the lifetime of the trust. Individuals will be entitled to opt out, should they wish to not participate in the settlement.

The current Occupational Diseases in Mines and Works Act benefit for first degree silicosis is R63,100, and for second degree silicosis R140,506. The report says the settlement awards agreed to on Thursday are significantly higher than these amounts.

The gold miners have set aside about R5.2bn to be paid in compensation to the mineworkers and have also agreed to contribute R845m over the life of the trust, solely for the administration expenses of the trust. An initial R5m will be used to establish the trust fund and set up preliminary systems and infrastructure. In the first year, the companies will contribute R100m of the total sum to ensure the trust is established quickly and efficiently.

The report says subsequent contributions required will be determined annually by the fund’s financial administrator in consultation with the companies and the claimants’ attorneys.

In terms of benefit payments, the companies will make an initial contribution for benefit payments of R1.4bn for the first two years of benefit payments. Thereafter, after consultations, the trust will notify the companies annually of the estimated amounts required. An actuarial expert will be appointed to assist in these calculations. Amounts payable by each company will be determined according to claims by former employees of each of them.

Health Minister Dr Aaron Motsoaledi is quoted in the report as saying that the signing is a historic moment and marks a milestone after a “very harsh history in South Africa.” He added that he remains hopeful that other companies will follow this example in any possible future cases.

While the early stages of the settlement litigation process remained challenging, former Harmony Gold CEO Graham Briggs supported the settlement agreement, which he said was a “sustainable resolution and solution of OLD”. He further noted that the settlement agreement was both positive for South Africa and preferable, because it “brings certainty and brings an immediate solution on compensation sooner than any class action or litigation.”

Spoor warned, however, that the scale and complexity of the litigation process was not the biggest challenge. “It’s a huge responsibility to represent thousands of individuals, their families and their communities, and then to take decisions that will affect the lives of these people.” While there was added pressure to settle quickly owing to claimants passing away, Spoor noted that the settlement agreement represents a compromise between the added time pressure, and the pressure to not compromise in a way that will negatively affect the claimants.

He said in the report that the real success of the agreement will depend on its implementation through the Tshiamiso Trust, which has a life expectancy of 12 years to pay and compensate as many people as possible. “We hope the promise of the agreement gets realised.”

Gold Fields, in a separate statement, also welcomed the settlement, stating that it represents a fair outcome for claimants and a sustainable outcome for the companies. “We are pleased that this landmark settlement agreement has been reached. The longstanding and collaborative work of the OLD Working Group companies, and their cooperation with the claimants’ lawyers and various stakeholders from government, labour and the mining industry over the past three years, has led to this important milestone,” added Anglo American South Africa deputy chair Norman Mbazima.

Solidarity also welcomed the settlement agreement and called on the mining houses involved to put all possible and reasonable measures in place to ensure a safe and healthy environment to prevent their employees from contracting occupational diseases.

 

On the surface, there appears to be much cause for celebration here. Dig a little deeper, however, and some concerns remain. According to a Daily Maverick report, there is no doubt that the settlement – which still needs to be finalised by the South Gauteng High Court – represents an important, principled victory when it comes to holding big companies accountable for diseases contracted by workers in the course of their employment.

The companies involved are all gold miners, because silicosis is primarily a disease of the gold mines. Drilling, blasting and mechanical loading are the dustiest jobs on the mine, and all are critical to producing gold. When silica dust is inhaled, it can scar the lungs and leads to the respiratory condition called silicosis. According to the report, in its most acute form, silicosis can lead to death. In its chronic variety, it causes chest pain, weakness and respiratory failure – making other forms of manual labour for former gold miners hard to undertake. Silicosis also makes lungs more vulnerable to TB, which is why the incidence rate of TB among South African mineworkers is estimated as the highest in the world.

Because silicosis can develop as long as 20 years after exposure to silica dust, mining houses historically have been reluctant to pay compensation for what is seen as the sins of the forefathers.

But, the report says, when embarking on an in-depth investigation of silicosis in 2014, it was discovered that the South African mining industry has had a very long time to get its house in order with regards to the occupational disease. In fact, the original commission of inquiry looking into the problem was set up in 1902.

Elsewhere in the world – in the US and Australia, for instance – effective dust limits underground have been in place for almost a century, and this has drastically lowered silicosis rates. The report says it was only in 2003 that a “target” was set for South African mines to restrict silica dust to less than 0.1mg per cubic metre of air by 2008 – an exposure level which, evidence suggested, might not even protect against silicosis. New targets set in 2014 mean that it is only by 2024 that silica dust has to be restricted to 0.05mg per cubic metre of air.

Mines have implemented techniques to reduce workers’ exposure to dust: requiring workers to wear dust masks, for instance, and watering underground areas. Both are unreliable – the former because workers reportedly often do not wear them due to heat, and the latter because it increases humidity while maintaining dust particles in the air. In other words, the report says, it’s possible that even while mining houses are finally gearing up to pay proper compensation for silicosis, workers currently mining for gold are still going to contract the disease.

That’s one issue. Another, the report says, is to do with the way in which the pay-outs for sick miners will be administered. As things stand, miners with silicosis are already eligible to claim compensation – and have been for decades. They can do so under the Occupational Diseases in Mines and Works Act (ODIMWA), managed by the Department of Health. But the reason why relatively few former miners have been able to access the compensation they are eligible for is due to the bureaucratic nightmare of the process, the report says.

The body responsible for certifying mineworker claims is the Medical Bureau for Occupational Disease (MBOD), to which a number of documents have to be submitted: a medical form, worker ID and fingerprints, and their labour records. Many former mineworkers lack at least some of these documents.

Once mineworkers have eventually been certified as sick, these claim records have to be sent to the office of the Compensation Commissioner, who sends a form back for the worker to complete. This causes problems in itself, as sometimes people have moved on from their last registered address by the time their record is processed. If so, that’s the end of the line.

According to the report, it asked Occupational Lung Disease Working Group spokesperson Alan Fine whether the claims made to the new trust would use the same system as the ODIMWA process. “They’re going to be working in co-operation,” said Fine, using the same call centre and sharing databases. Fine said that the working group has already taken steps over the past three years to “help repair the systems” of the ODIMWA process: hiring additional clerical staff and doctors to process claims. As a result, he says the number of compensation payments per year has increased by “600%” in the last 12 months.

Fine’s confidence is heartening, but the news that the two systems will overlap to some degree is not, the report says. It is to be hoped that the trust will make good on its promise to “enhance the efficiencies of both the trust and the statutory systems”. If the trust is instead dragged down by the bureaucratic mess of the state’s systems, few will benefit.

The major question mark hanging over the settlement, however, is whether a compensation system based on once-off lump sum payments is really the best solution to meet the needs of sick miners – as opposed to, say, a monthly pension. Fine points out that once-off payments are far easier to administrate, which is undoubtedly true (and one only has to look at the chaos of the South African Social Security Agency’s grant payment system to see how messy the alternative can get).

Workers in other occupations than mining can receive monthly medical pensions after a certain threshold of disability, however, so, the report says, the precedent exists – under the Compensation for Occupational Injuries and Diseases Act (COIDA), which is managed separately by the Department of Labour, and which does not handle mining-related occupational disease.

The major reason to prefer monthly pensions where possible is that making lump sum payments to recipients who lack a high level of financial literacy often spells trouble. The working group specified in its statement that, “where reasonable and practicable”, the trust would oversee the “establishment of a financial literacy programme for the assistance of claimants who receive a benefit”.

The report says it is to be hoped that this aspect will be prioritised. Interviewing sick miners in the rural Eastern Cape in 2014, it found that a number had received compensation pay-outs in the region of R50,000 – but just a few years on the money had been spent, with no lasting impact on bettering the lives of men who were now too disabled to take on other forms of manual work.

Settling the class action was doubtless a massive relief for claimants waiting years to see any money at all. The report says while the settlement is to be welcomed, the real test will be how funds are administered, whether the money has positive effects, and whether mining houses commit fully to ending silicosis cases on the mines rather than just paying off those who have succumbed.

 

The name of the R5bn trust established to provide compensation for mine workers made ill by silica dust in the mines — Tshiamiso — is a Setswana word meaning “to make good” or “to correct” and is at last a recognition by mining companies of the need for reparations, particularly for black mine workers, who for decades worked in mines in unsafe and unhealthy conditions.

All workers were exposed to dangerously high dust conditions, but says a Business Day editorial, there is no question that black workers suffered the worst of it. It was black mine workers who worked in the dustiest parts of the mine and did not have showers and changing rooms on the surface to wash the dust from their bodies.

In medical examinations, says the Legal Resources Centre (one of the litigants), black miners underwent mini X-ray tests that were difficult to read and did not effectively detect silicosis. White miners, on the other hand, had full-size X-ray tests.

The unofficial truth was that when sick or injured, black mine workers went home to die. The report says the shame and horror of mining under apartheid lives on in the bodies of those mine workers and their dependants, now sick or deceased in the far-flung hills of the Eastern Cape, Lesotho, Mozambique and further afield. The settlement will go some way to compensating for this historical wrong.

The report says the silicosis settlement is important and historic for other reasons too. As well as being the biggest and most expensive class action in South Africa yet, it is also an outstanding example of South African negotiation at its best. Instead of a protracted and even more expensive lawsuit, the parties opted for a mediated process. The mediation, which involved seven mining companies and several groups of claimants, was enormously complex and involved many diverse interests. It took almost six years to finalise. It was a testament to both the commitment and skill of the parties that it reached finality. The final agreement must still be certified by the high court before it comes into force.

But while the mediation was the crowning achievement, it took some tenacity and a long legal struggle before mining companies were ready to sit down at the table.

The report says that fight was led largely by activist and human rights lawyer Spoor, who went through three rounds in the courts before it was established that mine workers were entitled to make civil claims for diseases or injuries contracted at work.

When Spoor began his fight, the Occupational Diseases in Mines and Works Act, which provided compensation for occupational lung diseases, was presumed not to allow for civil claims on grounds that, it was assumed, an adequate compensation system was in place. Spoor challenged this provision, losing in the High Court in 2006 and in the Supreme Court of Appeal in 2008. Finally, in 2011 Spoor won in the Constitutional Court. The judgment provided the impetus for the mediated process.

It was therefore a long and arduous road before mining companies were ready for “tshiamiso” and took on the responsibility to set things right. And, the report says, having done so it is now imperative that the trust money reaches those for whom it is intended. A total of R30bn still lies unclaimed in pension and provident funds of former miners. To avoid this happening in this instance, the parties have put what look like admirable plans in place. Mobile clinics with X-ray facilities will travel throughout the labour-sending areas to provide screening and to facilitate the compensation process.
The prospect of some compensation for decades of damage is now in sight.

Mining Weekly report
Daily Maverick report
Business Day report


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