Middlemen preying on desperate mine pensioners

Underground mineworkers are not getting compensation payments without paying fees. Image: Environment News

The practice has persisted for years. However, it was highlighted again by The Employment Bureau of Africa (Teba) executive chairman James Motlatsi at the recent Johannesburg Indaba.

He says in one case, a pensioner who used a "shark" to speed up his payout from the Mineworkers' Provident Fund (MPF) to only three days, paid the agent R60,000 of the R520,000 he received.

"But he should have received all that money," Motlatsi says, adding that about 106,000 people are unpaid beneficiaries of the MPF and are owed R3.9bn in total.

Between 45,000 and 200,000 former mine workers are also entitled to claim compensation from the Occupational Diseases in Mines and Works Act (Odimwa) Fund for silicosis, an occupational lung disease contracted from rock dust. The fund is administered by the Department of Health. Various other funds pay out to mine workers but the backlog is largely at the MPF and Odimwa funds.

Intermediaries take about 50%

People agree to use intermediaries because they are desperate. The sharks will even collect claimants from rural areas and take them to the provident fund offices, where they have contacts who will process those payments.

Motlatsi says insiders in the Department of Health will tip off sharks that a person is entitled to payment for lung disease and the shark will track the person down. The payments can reach between R80,000 and R100,000 and the claimant will often agree to give half of it to the agent to ensure early payment.

Human rights lawyer Richard Spoor, who has been pursuing claims for former mine workers with silicosis, says he has heard that 30,000 certified claims on the Odimwa fund have not been paid out because the compensation commissioner says these sufferers cannot be traced.

"Teba has a better prospect of finding these workers than anyone else, but the commissioner will not give them the information that they need to do so," Spoor says.

Chamber of Mines aware of problems

A mineworker's lungs infected with silicosis and tuberculosis. Image: Wiki Images

The major mining companies and Chamber of Mines say they are aware of the problem and are addressing it in various ways.

Teba is being used by the mining industry to trace MPF beneficiaries but not by the Department of Health to trace people who are due for Odimwa payments. Teba, which has recruited labour for the mines since 1902, is now a privately owned company, but maintains the biggest database of information on current and former mine workers. However, tracing beneficiaries is costly and there is a question mark over who will pay for Teba's services.

Chamber of Mines head of health Dr Thuthula Balfour-Kaipa says the problem is extensive and involves several government departments, including home affairs. High-level meetings have been held over these issues, involving Deputy President Kgalema Motlanthe.

The government has undertaken to look into it and report back to the chamber. Chamber of Mines senior executive for employment relations Elize Strydom says the practice of offering to facilitate payment in return for a cut is unscrupulous. People who leave mining jobs for whatever reason are entitled to their money from the MPF and the mines fill out the necessary forms to process payments.

Money is owed by not paid

The MPF reports to the chamber every month on its progress in processing claims. "We are very conscious of this because any rumour among mine workers that their interests in the retirement fund are not being looked after is very emotive and can lead to labour unrest," says Strydom.

Odimwa payments for lung diseases are a separate issue. Mine workers have a medical examination before they leave employment and are meant to go for follow-ups because it can take time for silicosis to develop.

Mine employers pay a levy per shift worked to the Odimwa fund, which is administered by the Department of Health.

Many miners who are infected with diseases for which they are entitled to compensation are not being tracked down. Image: SA History

Strydom says there are problems about testing not being done, partly because people in remote areas find it hard to reach testing centres. Spoor says there are very few of these testing centres and he does not know of any in Mozambique, Zimbabwe, Malawi or Swaziland.

In SA, testing centres are located in various large state hospitals, but few actually function. Balfour-Kaipa says the chamber is providing assistance to state medical facilities at Umtata in the Eastern Cape and in the Free State and North West, but there is a great need for more testing centres in the Eastern Cape, where most of the former mine workers live.

Spoor says after the test, it takes three to five years before a decision to pay compensation is made, because the panel that considers cases is under-resourced. It then takes several more years to pay out. The result is a network of sharks who will even take former mine workers to testing centres.

He says the problem is so long-standing it has become institutionalised. In 2002, the act was amended to prevent any agent from taking more than 0.5% of the benefit for services rendered.

"The other consequence of these inefficiencies is that only a tiny fraction, perhaps 5%, of former mine workers with a lung disease, receive the full compensation benefit to which they are entitled," Spoor says.

Source: Financial Mail via I-Net Bridge