Burden Shifting: Creating Equitable Outcomes in South Africa’s Mining Industry

Team #7 Alexandra Adams, Sarah Grusin, Erik Heinonen, Eugene Lee, Brittany Ngo, James Ting

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Nov. 10, 2012

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South African Mining Industry

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Annual Contribution to GDP 8.6 percent – 525 billion USD

Mining employment 498,141

Value of reserves of gold, platinum, chromium

$2.5 trillion

BUT • Increasing costs of doing business for mining companies • Loss of market share since 2005

Bottom Line

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• Losing current and future foreign direct investment

• Lost tax revenues

• Rising unemployment (currently: 24.9 percent)

• Decreased citizen support for government

• Increased burden on public health system

If disputes between miners and mining companies persist, South Africa risks:

Root Causes

Labor dispute

Migrant laborers

Working conditions

Low wages Disease/injury compensation

Poor living conditions

Root Causes

Labor dispute

Migrant laborers

Working conditions

Low wages Disease/injury compensation

Poor living conditions

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Working Conditions

Poor Disease/Injury Compensation

Low wages

Second Order Causes

Lack of input from miners

Mines not held accountable

Mines don’t bear cost of occupational

disease and injury

Lack of input from miners

Mines not held accountable

Mines don’t bear cost of income inequality

Lack of input from miners

Mines not held accountable

Mines don’t bear cost of occupational

disease and injury

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Working Conditions

Poor Disease/Injury Compensation

Low wages

Second Order Causes

Lack of input from miners

Mines not held accountable

Mines don’t bear cost of occupational

disease and injury

Lack of input from miners

Mines not held accountable

Mines don’t bear cost of income inequality

Lack of input from miners

Mines not held accountable

Mines don’t bear cost of occupational

disease and injury

Recommendations

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Mining Welfare Administration (MWA)

• Input

Burden Shifting

Mining Welfare Commission (MWC)

• Accountability

Public Health Strategies

• Burden Shifting

Education Campaign

• Input

• Set mine safety standards focusing on prevention and occupational health

• Set fair wage standards

• Align payments to worker compensation fund with mine conditions

• Collect and publicize annual claims data

• Collect fines for violation of standards

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Burden Shifting

Mining Welfare Administration

• Membership includes representatives from: - Department of Finance - Department of Mines - Department of Health - Mineworkers - Mine owners • Equal voting power for mine workers and mine owners

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Input

Mining Welfare Administration

Mining Welfare Commission

• Independent forum for workers to lodge complaints about violations of MWA standards and abusive mining practices

• Commissioners investigate, evaluate and adjudicate complaints

• All investigations and findings will be published in public reports

• Commissioners will be appointed by the MWA, assuring mineworkers have a voice in selecting arbiters

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Accountability

• Ensure equal access to care throughout country with emphasis on Community Health Planning

• Build 100 Community Healthcare Clinics in migrant labor sending areas (e.g. Northern Cape, Northern province of Eastern Cape, and Mozambique)

• Mining Companies and Stakeholder Engagement/Partnership

• Collaboration with Community Health Committees, local NGOs, MSF, and hospital network 13

Burden Shifting

Public Health Strategies

Public Health Strategies

• Extension workers provide free prevention services

• Clinic employee education and training program

• Establish treatment reimbursement system for migrant workers in SADC from Mines and Works Compensation Fund

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Burden Shifting

Education Campaign

• Knowledge of rights to compensation and process for applying for benefits is limited among: - Miners and their families - Doctors and nurses

• South Africa should create an education campaign targeted at mineworkers upon entry and departure from a mine and targeted at health clinics and hospitals throughout the country

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Input

Budget for Recommendations

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1 2 3 4 5 6 7 8 9 10

MWA 50 50 50 50 50 50 50 50 50 50

MWC 40 40 40 40 40 40 40 40 40 40

Education 10 10 10 10 10 10 10 10 10 10

Health 100 90 80 80 75 75 75 75 75 75

Total (1.8B)

200 190 180 180 175 175 175 175 175 175

All figures are in millions USD

Remaining funding that is made available (up to $18B) should be reserved for funding an increase in ODMWA payments in the event of legislative reform

Challenges and Limitations

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Persistent lack of knowledge of rights

Resistance from mining companies

ODMWA compensation statutorily limited

Conclusion

By generating input from miners, creating accountability for mining corporations, and shifting cost burdens to those who can most afford it, we can create an equitable, safe, and sustainable mining industry in South Africa.

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Routine care (vaccinations and regular checkups)

Health Clinic's “One-Stop" Services - Quick referrals and careful monitoring of both TB and HIV patients

Directly Observed Treatment (DOT) - Standardized treatment regimen for MDR-TB and HIV/AIDS integration

Prevention arm: - HIV Counseling and Testing (HCT) - TB screening (skin and blood tests (IGRAs)) and questionnaire, TB Bacille Calmette-Guérin (BCG) vaccination

Treatment arm: - Isoniazid preventive therapy (IPT) and antiretroviral therapy (ART) combination. - HIV first-line regimens (zidovudine or tenofovir) - Generic fixed-dose combination of zidovudine, lamivudine and nevirapine - TB diagnostic testing (e.g. sputum smear for acid fast bacilli, chest radiograph, and sputum culture), and short course chemotherapy

Appendix A: Medical services covered

Appendix B: Comparison of ODMWA and COIDA

ODMWA COIDA What is the clinical threshold to qualify for compensation?

• ODMWA recognises only two degrees of clinical lung disease: o First Degree (10-40% impairment) o Second Degree (40%-100% impairment, or a

combination of 2 compensatable diseases) • Percentage of impairment is of either lung functioning

or ability to perform work • A 100% impairment of lung functioning would mean

death

• COIDA provides payment for any permanent disablement above 20% impairment

• Above 20% payments increase with percentage of impairment o For example, if based on earnings a worker

would earn R100 for a 100% impairment, then a 20% impairment would entitle the worker to R20 and a 60% impairment would entitle the worker to R60

Is Temporary Incapacity recognised for lung disease? What will you get?

• Only temporary incapacity for TB (not any other lung disease) is recognised

• 75% of earnings (wages), limited to 6 months only

• Any temporary incapacity is recognised • 75% of earnings, provided for up to 2 years

What about Permanent Incapacity as a result of an injury or lung disease?

• Lump sum payment for all permanent disability capped at: o R31 440 for First Degree o R70 008 for Second Degree

• Not adjusted to increase with inflation • No monthly pension provided The real value of ODMWA payments continues to decline over time as inflation continues. Inadequate payments force many ex-miners and their families to rely on state and community support as well as social grants to survive

• For disablement less than or equal to 30%, workers get a lump sum payment equal to 15 times their monthly salary with: o Minimum lump sum of R45 800 o Maximum lump sum of R183 400

• For disablement greater than 30%, workers get lifetime monthly pension increasing with their percentage of disability. o Minimum monthly pension ranges between

R700 and R2 300 o Maximum monthly pension ranges between R5

000 and R 16 400 • Updated to increase with inflation

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ODMWA COIDA Is on-going medical care provided for miners and ex miners with lung disease ?

• The employer pays for on-going medical care only if the mine worker is able to continue working. However, the miner has no choice in which doctor to see

• If the miner has stopped working because of the severity of the injury or retrenched, either the state must pay or the miner must pay out of his own pocket (uses his own money)

• Occupational health facilities for mine workers are located in some urban areas. Ex miners living in rural areas or who have returned to their home countries within the SADC, have no access to the urban medical centers and have to rely on private GPs or the state health sector/s

• The compensation fund covers 2 years of medical care at “reasonable cost”

• The commissioner may pay for further care if he determines that the care will result in a reduction of disablement

Is there an autopsy requirement for widows of deceased mine workers in SA and SADC countries to claim compensation? • Yes. The heart and lungs of a deceased mine worker

must be sent to Johannesburg for inspection by state officials

• This is a requirement even if the family of the deceased worker lives far away or in another country

• Sending human organs of a deceased worker into SA requires special permission from the NDoH, that is often difficult to obtain

• Compensation is only provided if the state inspector / examiner finds evidence of a compensatable disease.

• No. • A medical report is sufficient

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Eugene Lee