Picture: REUTERS
Picture: REUTERS

Just over R5bn in gross provisions recently announced by gold companies for a silicosis settlement raises hopes that the six-year battle for more generous payments for ill ex-mineworkers may reach an amicable conclusion in the next few months.

Lawyers for former mineworkers started to gather claimants for a class action suit in 2011, after the constitutional court ruled that Thembekile Mankayi, a former employee of AngloGold Ashanti, could sue for R2.6m for compensation for the silicosis he contracted. He was paid only about R16,320 from the statutory fund to which employers contributed.

Silicosis is a progressive disease of the lungs caused by breathing in silica dust, which can lead to tuberculosis. In the past 50 years millions of people have worked on underground mines in SA, leading to some alarming estimates of the number of possible claimants.

Two separate class actions were pursued. The first, led by UK-based law firm Leigh Day and Mbuyisa Neale in SA, was on behalf of 4,365 claimants against Anglo American and AngloGold. Last year it reached a settlement under which R464m was paid into a dedicated trust called Q(h)ubeka.

A separate and much larger action is being pursued by Richard Spoor Inc, Abrahams Kiewitz and the Legal Resources Centre. Last year the Johannesburg high court ruled that they could pursue actions for two separate classes of claimants, one for silicosis and one for tuberculosis incurred from mining. The gold companies are appealing against this and the appeal is set down for March.

In 2014 the gold companies established a gold working group that includes Anglo American, AngloGold, Harmony Gold, Gold Fields, Sibanye Gold and African Rainbow Minerals. All of them have now made provisions for claims.

Alan Fine, a spokesman for the working group, says these provisions for approximate expected costs reflect progress in settlement talks with legal representatives of claimants. These, and ongoing negotiations, do not constitute an admission of liability.

He says it is important to note that the negotiations with lawyers are confidential so gold companies cannot provide any details.

"While good progress has been made in negotiations, the parties have not yet concluded a settlement agreement and it is therefore not certain that agreement will be reached. Any settlement that may be reached in the negotiations will have to be ratified by the Johannesburg high court," says Fine.

Spoor says discussions have been under way for about 18 months and substantial progress has been made. "We are optimistic for the class members and I believe the gold industry is optimistic that we can find each other."

He says it is difficult to say how many claimants there will be because there are degrees of severity in tuberculosis and silicosis that need to be defined and diagnosed. Victims need to be traced, which costs a lot of money.

Spoor and Abrahams have spent years going from village to village in former labour-sending areas such as the Eastern Cape, Free State, KwaZulu Natal, Lesotho, Botswana, Swaziland and Mozambique.

About 30,000 potential claimants have been traced by the two firms, but Spoor says there is no infrastructure and specialised expertise in rural areas to x-ray and diagnose people. If a settlement were reached and a trust established, it would need to allocate resources to address these issues.

"We are under a lot of pressure to achieve a settlement," Spoor says. "About 4% of this class is dying every year, which means in the past six years about 25% of possible claimants have been lost. Litigation can drag on for many years and it would not be good for our clients or for the industry. A settlement is in everyone’s interests — not only gold but coal and platinum mines, and others, such as trade unions and the departments of mineral resources, health and labour."

In its first 16 months, the Q(h)ubeka Trust has set up a network of local medical service providers in SA and neighbouring states who are building expertise in testing for occupational lung diseases, says the trust’s chair, Sophia Kisting-Cairncross. It has independent panels of experts in Durban, Cape Town and Johannesburg to make assessments. This is a foundation that others, such as the Spoor and Abrahams claimants, could build on.

Q(h)ubeka will pay compensation in two tranches: the first when a claimant is assessed and diagnosed with one of the four agreed categories of silica-related disease, and the second after all claimants have been assessed and their claims processed.

By August 22, the trust had screened or referred for screening 2,241 claimants and paid R66.8m to 627 people. Another 176 would receive a total of R18.9m once bank details and biometric identification were completed.

mathewsc@fm.co.za

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