Ex-miners still to claim R30bn

Most ex-mineworkers aren’t aware that there’s a mountain of funds that they are entitled to.

About R30 billion is waiting to be claimed by miners, the majority of whom are ex-mineworkers, Deputy Minister of Mineral Resources Godfrey Oliphant has announced.
He said several ex-miners, who were partly employed under the legacy of the migrant labour system, had accessed funds.
“These are substantial sums that would do a lot to rejuvenate rural economies and labour-sending areas where the mineworkers come from – within South Africa and in neighbouring countries,” he told the media during a press briefing in Pretoria on Friday. Since 2013, about 14 000 former mineworkers received compensation benefits amounting to R40 million, and 8 000 received Unemployment Insurance Fund benefits amounting to R14 million.
One of the reasons for unclaimed funds, however, was that the majority of miners were living in rural areas and were unaware they were able to claim benefits from the labour and health departments.
In some cases they were aware of the fund, but many did not have proof of address and some only had a postal box address.
Migrant workers had also returned to their countries, such as Zimbabwe, Botswana and Mozambique.
Oliphant said in May last year that Health Minister Aaron Motsoaledi, trade unions and the Chamber of Mines launched an operation to pay out R1.5 billion to about 103 000 ex-mineworkers with unclaimed compensation benefits.
– denisew@citizen.co.za


Mines minister still hopes to have benefits laws streamlined this fiscal year

LEGISLATION providing for the merger of statutes that provide benefits for occupational diseases may be in force by March 2017.
Various government departments are working with mining houses to create a master database of former mineworkers who are owed billions of rand in unclaimed benefits, Mineral Resources Deputy Minister Godfrey Oliphant said on Friday.
She said it was still hoped that legislation to address a problematic compensation system for mineworkers would be in force by the end of the 2016-17 financial year.
Benefits for occupational lung diseases are among the provisions of this legislation.
The Department of Health has already developed a database covering the health records of to an estimated 700,000 mineworkers.
“To enrich the database we have started discussions with the Chamber of Mineworker to (include) 500,000 current mineworkers,” Oliphant said at a briefing in Pretoria on Friday.
“Currently there are R30bn in unclaimed benefits. A substantial portion is for mineworkers partly due to the legacy of the migrant system,” Oliphant said.
Former mineworkers or their families are still owed between R7bn and R10bn in unclaimed benefits across Southern African countries, with previous efforts to integrate compensation systems hampered by a lack of a reliable database, Oliphant said.
Since the end of apartheid, various attempts have been made to integrate compensation systems in SA, and work continues on a single system covering all benefits including provident and pension funds.
This forms part of a broader goal of a comprehensive system of social protection for employment, including the informal sector, by 2030.
A legislative framework is being developed to merge the Occupational Diseases in Mines and Works Act (ODMWA) and the Compensation for Occupational Diseases and Injuries Act (COIDA) to meet mineworkers’ longstanding grievances about inferior benefits, and access to benefits.
ODMWA falls under the Department of Health, while COIDA is better known as the Compensation Fund and falls under the Department of Labour. ODMWA benefits for mineworkers have been seen as inferior, dating back to 1912, and levies under that act only cover income replacement and not administrative costs.
At the same time, the migrant nature of the mining sector has hampered attempts to reach mineworkers both in SA and in neighbouring countries, with Financial Services Board CEO Dube Tshidi saying that before 1996 employers held all the data for provident and pension funds, and much of the information was unreliable.
Even the families of mineworkers did not always know where their family member had worked, said Tshidi.
The departments of health, labour and mineral resources are undertaking roadshows and have formed a steering committee with several agencies to fast-track payments of benefits.


Former mineworkers owed billions of rands

JOHANNESBURG (miningweekly.com) – A substantial sum – between R7-billion and R10-billion – of an estimated R30-billion in unclaimed benefits is believed to be due to South Africa’s former mineworkers.

The Department of Mineral Resources (DMR) is working to deliver single-compensation legislation by March and an integrated institution to manage financial benefits and compensation support matters after a years-long uphill battle.

“We now have a picture of the nature of the problem,” the Department of Planning, Monitoring and Evaluation (DPME) director-general Tshediso Matona said at amedia briefing in Pretoria on Friday.
Updating the public on work that is being undertaken to mitigate social protection matters, Mineral ResourcesDeputy Minister Godfrey Oliphant said mineworkers, former mineworkers and their families faced an uphill battle in accessing their social protection benefits and, in many cases, were not even aware of the financial benefits due to them.
“The majority of [former] mineworkers are in rural villages and have little knowledge about their benefits. Where they have knowledge, it is virtually impossible to access their benefits owing to multiple barriers,” he said.
A pilot project, undertaken in the Eastern Cape during July as part of the Special Presidential Package for the Revitalisation of Distressed Mining Communities initiative, highlighted the need for improved integration between the various programmes, such as support programmes for duefinancial benefits and occupational health and diseases compensation.
The DPME and the Financial Services Board gathered the records, including old pay slips, Chamber of Mines (CoM) industry numbers, old 'dompas' identity numbers, provident and pension fund letters and old Teba mining company cards, of all the former mineworkers in the Eastern Cape to track and trace any potential benefits due, some of which dated back to the 1970s.
“We need to do more to improve the access of workers and [former] workers to their funds that they contributed to over their working lives,” said Matona.
Since 2013, about 14 000 former mineworkers had received compensation benefits amounting to R40-million and 8 000 had received Unemployment Insurance Fund benefits amounting to R14-million.
A May 2015 partnership, Operation Ku-Riha, between the departments of Health and Mineral Resources, trade unions and the CoM, aims to pay out some R1.5-billion in unclaimed compensation benefits to about 103 000 former mineworkers.
“While progress has been slow owing to setting up the tracking and tracing system, since February 2016, we have paid 1 443 claimants approximately R56-million and R3-million has gone to neighbouring countries,” Oliphant noted.
However, a lack of a database made tracking and tracing former mineworkers difficult, and as a result, an integrated and uniform workers’ compensation system is currently being developed with the support of the Department ofHealth (DoH) and the Department of Labour.
The DoH has subsequently developed a database of former mineworkers that covers both the demographic details and medical records of the former mineworkers.
“This database covers 700 000 claimant records and will assist all agencies across government to track and trace persons with unclaimed benefits. To enrich the database, we have started discussions with the CoM to cover the current workforce of 500 000 mineworkers,” he explained.
Meanwhile, mobile outreach activities are under way to deploy mobile one-stop facilities comprising claims management, a health clinic for medical assessments and amobile bank, funded by the World Bank, CoM and the GoldWorking Group, besides others.
“This new approach to piloting services closer to the [former] mineworkers has improved service delivery,” Oliphant said, adding that efforts were under way to add rehabilitation services for injured mineworkers to enable the provision of a fully integrated service covering occupational disease and injuries.
The one-stop service centres have been used by about 6 000 former mineworkers, with 4 000 referrals to the head office in Johannesburg since being opened in April 2014.
Further mobile outreach activities are planned for Bizana, Lusisiki, four other districts in the Eastern Cape, Welkom, in the Free State, and in BotswanaLesothoMozambique andSwaziland over the next four months


Legislation to stop predatory wage deductions underway

The National Assembly is considering an amendment bill to the Magistrates’ Court Act 32 of 1944 to curb predatory wage garnishment orders. Officially known as emolument attachment orders (EAO’s), these are court orders that require employers to deduct payments from the salary of an employee to service debts.
Under current South African law, there is no limit on how much of a person’s salary can be garnished. Most countries place limits on the percentage or amount that can be garnished. For example, Rwanda sets limits on garnishments at 33% of a person’s wage, while Australia requires that a debtor access at least AU$447 from their weekly salary.
The proposed legislation would limit wage garnishments to a maximum of 25% of a person’s salary. It would also restrict creditors to only filing EAO orders in the local court where the debtor resides. Creditors will be required to notify employers and debtors of their intent to file an EAO, and will have to provide a free monthly statement of the amount of debt remaining. Employers will be required to end wage garnishments once the debt has been paid off. The bill will also provide for rescinding or abandoning court orders without incurring prohibitive legal costs.
The legislation was developed in response to a July 2015 ruling by the Western Cape High Court that found constitutional problems with the creditors obtaining garnishment orders from far away municipalities, the lack of limits on how much wages can be garnished, and the lack of judicial oversight.


The University of Stellenbosch Legal Aid Clinic brought the class action suitagainst a series of creditors and Flemix & Associated Incorporated Attorneys, a law firm that specialises in debt collection. Court documents stated that Flemix had over 150,000 active cases and collected on R1.5 billion for 45 credit providers.
Stellenbosch Legal Aid Clinic highlighted how EAOs were used to immediately impoverish people through drastic salary reductions. One of the named plaintiffs, Vusumzi George Xekethwana, had been required to pay half his salary to one EAO. Another plaintiff, Angeline Arrison, was issued three EAOs on the same day, resulting in almost her entire salary being garnished. Legal Aid argued that current law allowed creditors to bankrupt people. The unlimited garnishment of wages makes it impossible to pay off other basic living expenses, often resulting in even more debt defaults.
Additionally, it highlighted problems with the process of issuing these orders. Current law allows courts to issue EAO’s that are “just and equitable” as long as there is an enquiry by a magistrate into the debtor’s financial position. However, in many cases court clerks issued EAOs without evaluating the ability for the debtor to afford the wage garnishment.
The clinic also claimed that debt collectors were using loopholes in current law to get EAOs from far away municipalities, and then leveraging the threat of the wage garnishment to pressure the debtor into paying unaffordable instalments on their debt. This allowed creditors to shop around for municipalities where EAOs were easy to obtain, and where the debtor would not be able to show up and object to the order.
For many of those subjected to the EAOs, this resulted in a vicious cycle of withheld salaries and debt defaults. In his ruling, Judge Desai noted the predatory nature of debt collectors in exploiting involuntary and uninformed agreements with debtors.
The South African Human Rights Commission (SAHRC) submitted a brief as a friend of the court. It viewed the current use of EAO’s as predatory on the marginalised and the disadvantaged. It also pointed out that the unfair garnishment of wages was a major issue for the Marikana community in the run-up to the labour unrest. According to the SAHRC, “mineworkers [at Marikana] were taking home no salary because of EAOs.” The SAHRC urged the court to rule the current EAO process as unconstitutional.
The High Court ruling was appealed to the Constitutional Court. The Constitutional Court heard the case on 3 March 2016 and final decision is still pending.  
Even before this court case, there were many concerns over the use of EAOs. In 2012, the Banking Association of South Africa and the National Treasuryidentified several concerns they had with the EAO process. As a result all member banks of BASA (which includes Nedbank, FirstRand, and ABSA among others) decided to end their use of EAOs “to promote responsible lending and prevent households from being caught in a debt spiral.”

Status of the bill

On 20 May 2016, the Portfolio Committee on Trade and Industry heard from the Social Development, Trade & Industry, and Justice departments on the actions they were taking in reforming the EOA system. Judge Desai was present at the hearing and supported the pending reforms described by the department.
The bill was approved by the National Cabinet in February and has been introduced to the National Assembly. It is currently before the Portfolio Committee of Justice and Correctional Services. The committee has not yet set a date to consider the bill, and can only do so once Parliament is back in session after the August municipal elections.