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R5bn settlement between claimants and six SA gold mining companies
Protesters voice their opinions outside the High Court in Johannesburg during the case between gold mining companies and miners who had contracted silicosis. Picture: ALON SKUY
After years of intensive negotiations, mineworkers who have been affected by silicosis as a result of working in gold mines will at last be compensated by the companies for which they worked. The first pay-outs are expected for the end of June.
The compensation for workers suffering from occupational lung diseases is the outcome of a landmark class action which culminated in a R5bn settlement between claimants and six SA gold mining companies.
Speaking on the sidelines of the Investing in Africa Mining Indaba on Wednesday, Michael Murray, chair of the Occupational Lung Disease Working Group that represents the companies (African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields, Harmony and Sibanye-Stillwater), said the trust, which facilitates the pay-outs, was formed on December 10 and, despite being in its infancy, is aware that a lot of work is being done to plan ahead for this. He says: “We hope the trust will pretty much be running and making its first payments in the second quarter of 2020.”
The Johannesburg court approved the R5bn settlement agreement but all potential claimants covered by the class action first had to be given the option to opt out before the trust could be formed.
The number of former mineworkers who may seek to claim from the fund could be as high as 1-million, though the companies expect the number of those actually eligible to claim will be closer to 100,000.
“Quite extraordinarily, only three people opted out,” Murray says. “Had there been more than 2,000, the settlement agreement could have been nullified by the mining companies.”
Those who do not opt out will benefit from the settlement, but being part of the agreement potentially takes away their right to sue any of the companies at a later date.
Those who do not opt out will benefit from the settlement, but being part of the agreement potentially takes away their right to later sue any of the companies.
Murray says he can’t be sure of what the intentions were of those who opted out.
“This was the most extraordinarily complex negotiation you could you ever imagine. There’s certainly no settlement like it in South Africa that’s ever taken place, and I’d venture to say anywhere in the world,” says Murray. “This settlement goes beyond anything the courts could ever have achieved … It’s a classic example taking a dispute and making it something that both parties can benefit from in a way that they wouldn’t have otherwise.”
Eligible claimants will be paid out fixed sums depending on the severity of the occupational lung disease.
While there are a range of categories — including compensation for dependants of an worker who has since passed away — Murray says there are three primary classes of payment, classes two, three and four.
Class two pertains to claimants with first degree silicosis who will be eligible for a R150,000 pay-out. Class three will pay-out R250,000 to claimants with second degree silicosis. Class four will pay-out up to R500,000 to those suffering extraordinary disease conditions, although very few claimants are expected to pertain to a small number of claimants.
Claimants that develop silicosis in the next 12 years, will also still be eligible for compensation.
The R5bn funding pool is also guaranteed by various banks so there is no danger of the claimants not being paid out.
Although current and former miners are entitled to statutory compensation for occupational lung disease under the Occupational Diseases in Mines and Works Act, the system has been highly dysfunctional, preventing some claimants from being paid for over 20 years.
Over and above the settlement, Murray said mining companies had been working hand-in-hand with the relevant commissioner to ensure that workers also receive the statutory compensation they are entitled to.
For example, a class two claimant which is entitled to the R150,000 pay-out in terms of the settlement trust is entitled to claim an additional R64,000 from the statutory fund. A class three claimant can receive R250,000 from the trust is entitled to claim a further R150,000 in statutory compensation.