South Africa – Abrahams Kiewitz Inc. and Richard Spoor Attorneys reached a historic class action settlement with the Occupational Lung Disease Working Group representing African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields, Harmony Gold, Sibanye-Stillwater and Pan African Resources.
“The agreement provides compensation to all eligible workers suffering from silicosis and/or tuberculosis who worked in these companies’ mines from 12 March 1965 to date.
This is the very first class action settlement of its kind in South Africa,” explains South African Minister of Health, Aaron Motsoaledi.
This article first appeared in Mining Review Africa Issue 6 2018
“This signing ceremony is historic and the gold mining companies as well as the claimant lawyers must be congratulated for coming to a settlement during workers’ month, after three years of negotiations,” Motsoaledi adds.
Speaking on behalf of the occupational lung disease Group, former CE of Harmony Gold Graham Briggs, says that although the early stages of the settlement litigation process was challenging, it is a sustainable resolution and solution for the OLD.
He adds that the settlement agreement was both positive and preferable for South Africa, because it brings certainty and an immediate solution.
“This settlement has been several years in the making and my thanks goes to all of the various participants but especially the claimants, lawyers and the various ex-mining groups that we’ve had conversations with.
This includes all the unions which we kept in the loop at all times during these discussions”.
The Tshiamiso Trust
Compensation will be overseen by the Tshiamiso Trust (Tshiamiso is a Setswana word meaning “to make good” or “to correct”). The trust will be established following court approval and will be responsible for the distribution to claimants.
The distribution of claims and the administrative functions, including the tracking and tracing of eligible claimants and the facilitating of benefit medical examinations will be overseen by a board of trustees.
There will be seven trustees in total. Three will be nominated by the companies, two by the claimants’ attorneys, one by government and a consensus trustee will be nominated by the companies and the claimants’ attorneys jointly.
The parties to the agreement believe that a compromise settlement is far preferable for all concerned than a lengthy and expensive litigation process would be, allowing for claimants more quickly to receive compensation and relief for their conditions.
The parties have agreed that the companies will contribute R845 million over the life of the Trust solely for the administration expenses of the Trust.
There will be an initial R5 million paid to establish the Trust Fund and preliminary systems and infrastructure. In the first year, the companies will contribute R100 million of the total sum in order to ensure that the Trust is established quickly and efficiently.
Subsequent annual contributions required will be determined annually by the fund’s financial administrator in consultation with the companies and the claimants’ attorneys.
In addition the companies will make an initial contribution for benefit payments of R1.4 billion 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.
Terms and conditions
The settlement is subject to certain suspensive conditions, including the agreement being approved by the South Gauteng High Court.
The parties’ respective legal teams are working together to prepare the necessary paperwork in order that the court may review the agreement and approve of the process whereby all interested and affected parties will be given notice of the settlement and an opportunity to comment and make submissions before the Court considers issuing its final approval.
The parties believe the settlement represents a fair outcome for claimants and a sustainable outcome for the companies.
It must be emphasised, however, that the signing of the relevant documentation does not mean finality has been reached.
All parties are pleased at the conclusion of these highly complex negotiations and hope that the agreement will be duly approved by the High Court.
All parties recognise the constructive approach of their negotiation partners during the process.
For mineworkers, this settlement provides an opportunity to receive a medical examination and much needed compensation for those suffering from silicosis and/or tuberculosis without the need to pursue extended litigation and the risks inherent with that approach.
For the companies in the Working Group, this represents a huge step towards their previously stated goal of a comprehensive solution to issues relating to compensation for occupational lung disease in the gold mining industry in South Africa that is both fair to past, present and future gold mining employees, and also sustainable for the sector.
Settlement Agreement and Trust Deed
There are ten classes of claimants who, once properly certified, will be eligible for a benefit as follows:
- Silicosis Class 1: R70 000; this is an early stage of silicosis (lung function impairment of up to 10%) which is not compensable in terms of ODMWA
- Silicosis Class 2: R150 000; this is the equivalent of 1st degree silicosis in ODMWA
- Silicosis Class 3: R250 000; this is the equivalent of 2nd degree silicosis in ODMWA
- Silicosis Class 4: with defined special aggravated medical condition: a special award of up to R500 000. This category provides relief to a small number of claimants who are suffering from extraordinary disease conditions which exceed most other silicotic claimants.
- Dependant of a deceased eligible silicosis claimant who died between March 1965 and the effective date: R100 000, where silicosis is deemed to be the primary cause of death;
- Dependant of a deceased eligible silicosis claimant who died between 1 January 2008 and terminating on the effective date, where the deceased had the condition referred to in 2 or 3 above: R70 000;
- First degree tuberculosis. An eligible claimant must: (i) have worked underground at a Working Group mine for two years; and (ii) have been diagnosed with first degree tuberculosis within a year of working at least one shift at a WG mine: R50 000;
- Second degree tuberculosis (same conditions as 7 above save for second degree diagnosis): R100 000
- Historical tuberculosis: An eligible claimant must: (i) have worked at a WG mine for two years between 12 March 1965 and 28 February 1994; (ii) have been issued with a tuberculosis certificate (without indicating degree of tuberculosis) within a year of working at least one shift at a WG mine: R10 000 or same condition as (i) and (ii) above but with proof of first degree tuberculosis: R50 000 or second degree tuberculosis: R100 000
- Dependant of a deceased tuberculosis claimant where: (I) the deceased worked underground at a Working Group mine for two years; (ii) the deceased died within a year of working at least one shift at a WG mine; and (iii) tuberculosis was the primary cause of the deceased’s death: R100 000.