Compensation

Lungs [illustration]While it is crucial to always improve our understanding of and expertise in dust management and disease prevention, our aim is to ensure that all former and current mine employees who have become sick during their employment are adequately compensated.

Where employees have contracted an occupational illness, it is our role as companies to ensure that employees and former employees are able to access certification processes and compensation should their health be found to be compromised as a result of occupational illness.

South Africa has two compensation systems, one governed by the Occupational Diseases in Mines and Works Act (ODMWA) and another governed by the Compensation for Occupational Injuries and Diseases Act (COIDA). Most miners in South Africa are covered by ODMWA for occupational lung diseases, based on a state-determined assessment of whether a mine is 'controlled'.

Mining companies contribute certain amounts to a ODMWA-based fund for potential compensation. The certification process, the determination of impairment and the processing and payment of compensation are undertaken by the state.

How is compensation currently governed?

The ODMWA is over 100 years old and was last amended in 1994. The Act provides compensation for OLD in miners and ex-miners only. ODMWA provides for post-mortem benefits for miners if an occupational disease is found, even if it was not the cause of death. ODMWA pays lump sum benefits based on the level of impairment and does not make any further pension provision.

The COIDA was promulgated in 1993. It covers occupational injuries and diseases in all industries including those from the mining sector that are not covered by ODMWA; for example noise-induced hearing loss. COIDA is generally considered to be more generous in terms of compensation payouts. COIDA, however, does not make provision for post-mortem diagnosis but would still consider a case for compensation if an occupational disease is found at post-mortem or if it is the cause of death.

Source: National Institute for Occupational Health

The operations of the Medical Bureau for Occupational Diseases (MBOD) are a government function, though its funds available for distribution to eligible claimants are sourced from regular employer contributions. Nonetheless, the mining industry's efforts to assist, including through participation in the corporate governance structures of the MBOD, date back to at least the early 1990s.

More recently, in 2004, our companies initiated a dialogue with the Department of Health and organised labour aimed at improving access to compensation for former mineworkers. Part of that Former Mineworker Project, which included a pilot programme being rolled out to assist rural hospitals to develop the capacity to examine former miners and assist them with compensation applications, also involved offering assistance to the MBOD.

In addition, the Chamber of Mines and gold mining companies have provided financial assistance to the MBOD/CCOD to set up "One Stop" occupational health services for ex-mineworkers in Mthatha and Carletonville. The companies involved in the OLD initiative also partnered with the MBOD to launch Project Ku-Riha.

What compensation do sufferers get?

Current compensation is a lump sum payment of R105 000 for 2nd degree silicosis and R47 160 for 1st degree silicosis in terms of ODMWA. The combination of silicosis and tuberculosis is classified as 2nd degree.

What do companies want to change and why?

The companies are seeking a solution to the healthcare and compensation challenges of OLD in South Africa which is comprehensive, fair and sustainable for all concerned.

We have actively lobbied for improvements over the years. The adequacy of the compensation, and necessary legislative changes, which raise complex issues, will be discussed in the process we have initiated. Our preferred goal is that all current and future employees should be covered by COIDA, and we are in discussions with government on how to achieve this.

The main reason we are supporting such a change is that, under COIDA, mineworkers who become sick or are injured in the course of their employment are eligible for substantially higher compensation than employees suffering occupational lung disease falling under ODMWA.

  COIDA ODMWA
Responsible government department Department of Labour Department of Health
Administration cost Included in levies on employers Borne by the state
Applicability

All employers and industries (including mining)

Controlled mines and works
Cover

All occupational injuries and diseases excluding six defined compensatable diseases acquired in controlled mines and works

Six defined compensatable lung diseases in controlled mines and works.

Compliance with international norms and standards

Fully compliant and, in some instances, exceeds Non-compliant

Protection for employers against civil actions

Provided (Section 35) None
Medical care For two years or longer under certain circumstances Lifelong subject to certain conditions

Maximum salary on which compensation is based

R312 480 a year R36 000 a year

Benefits

Total temporary disablement

R9 000 per month for a maximum of 12 months irrespective of cause (any occupational injury or disease) R9 000 per month for a maximum of six months for TB only
30% (or less) permanent disablement

Lump sum equal to 15 times monthly earnings subject to a maximum and minimum of R218 760 and R54 675 respectively, and for lower percentages, a proportional lesser amount

(For a 55 year old employee with earnings of R144 000 a year, or R12 000 a month, this works out to a R180 000 lump sum)

Lump sum of R47 160
100% permanent disablement A monthly pension equal to 75% of monthly earnings up to a maximum and minimum of R19 530 and R3 733

(For a 55 year old employee with earnings of R144 000 a year, or R12 000 a month, this works out to a monthly pension of R9 000 for life based on a capital value of R1 350 000 at age of 55 years)

Lump sum of R105 000

Recent processes

There are three legs to the compensation initiative:

  1. The administration and benefits payable in terms of the ODMWA fund should be improved. The companies would also wish to be part of a state compensation scheme which includes an employer indemnity. We therefore support the shifting of current and future employees to the superior COIDA fund at the earliest opportunity, and are engaging with government on this matter.
  2. The statutory compensation fund governed by ODMWA has been poorly administered for some years. We are working in co-operation with the Compensation Commissioner and his team to address administrative issues, and so is the Chamber of Mines. The goal is to ensure that all eligible past employees receive the compensation to which they are entitled. See also:
  3. The companies do not believe that they are legally liable for further compensation and are defending the claims against the companies. However, we do believe that both we and the claimants have a common interest in settling this highly complex case that could take 15-20 years to finally resolve through the courts, with continuing uncertainty, and would cost hundreds of millions of rands in legal fees to all sides. Our legal representatives are therefore in talks with the lawyers representing workers who have brought the legal suit with a view to seeking a fair and sustainable settlement on these matters. We have in mind the establishment of a "legacy fund" that will pay a top-up payment to eligible claimants over and above the statutory compensation to which they are entitled.