30 May 2019
Lawyers for thousands of gold miners afflicted by silicosis or tuberculosis lined up on the side of six mining groups this week to ask the Gauteng High Court to approve a R5 billion settlement agreement.
The agreement provides for the payment of benefits worth R5 billion to mineworkers and the dependents of dead mineworkers who contracted silicosis or pulmonary tuberculosis during or after their employment from 1965. The benefits will be paid through the Tshiamiso Trust, which was set up specifically for this purpose.
The settlement agreement is regarded as one of the most complex multi-party class action settlements ever concluded. This is a sequel to the so-called Nkala class action suit brought several years ago by former gold mineworkers seeking compensation against their former employers for illnesses contracted in the course of their work.
Though the six mining companies and the mineworkers have reached agreement on the benefits to be paid, the court will have to assess whether absent mineworkers are adequately protected by the agreement. It is still unknown how many mineworkers or their dependents are entitled to claim, as many of them are scattered across the sub-continent. This will require strict scrutiny by the court.
In 2016 the case was certified as a class action by the Gauteng Local Division of the High Court, and in December 2018 the court certified four classes of claimants: (1) those who contracted silicosis or were exposed to silica dust; (2) the dependents of deceased miners with silicosis; (3) those who contracted tuberculosis; and (4) the dependents of deceased miners who contracted tuberculosis while working at the mines.
Now the court is being asked to approve the R5 billion settlement agreement between legal representatives of the mineworkers and the six mining companies. The mining companies have secured guarantees for the R5 billion claim, though the eventual claim could be higher. Of this, R845 million has been set aside for administering the Tshiamiso Trust, which will accept claims for a period of 12 years, plus one additional year to wrap things up.
Affected mineworkers will be paid out between R70,000 and R500,000 depending which of the four categories of claimants they fall into. Narrowing the claimants into four categories was done to simplify the payment process and reduce administration costs. The lowest potential payout will be R10,000 for historic cases of tuberculosis where the extent of the illness is not known.
Should the court approve the settlement, the class action suit against the six mining companies will be suspended, though will be continued against those companies that chose not to settle. Many of the likely beneficiaries are former migrant workers scattered across southern Africa, requiring the companies to post notices in neighbouring countries advising former mineworkers and their dependents of the potential benefits arising from the settlement.
Six mining groups are party to the settlement: African Rainbow Minerals, Anglo American SA, AngloGold Ashanti, Gold Fields, Harmony and Sibanye-Stillwater. The mining groups that opted to settle rather than continue fighting through the courts will be protected against any future liability arising from the same claims.
Mining companies that elected not to participate in the settlement are DRD Gold, East Rand Proprietary Mines (ERPM), Randgold and Exploration, Evander Gold, Blyvooruitzicht Gold, Doornfontein Gold, Simmer and Jack Mines and African Rainbow Minerals Gold (not the same as African Rainbow Minerals). Doornfontein and Blyvoorzicht are no longer operating and have since been deregistered.
DRD Gold and ERPM opted not to participate in the settlement agreement, and took issue with the court’s jurisdiction to certify the four classes of claimants, and indicated they would continue to fight the Nkala case in the Supreme Court of Appeal.
The mineworkers are represented by class action pioneer Richard Spoor Inc, Abrahams Kiewitz Inc. and the Legal Resources Centre.
Legal counsel for the mineworkers asked the court to approve the settlement as “fair, reasonable and adequate” on the grounds that it:
it provides for a comprehensive system of compensation;
it is easily accessible by the mineworkers as well as former mineworkers and their dependants;
it will commence payment of compensation within a relatively short period of time, short-circuiting protracted legal action;
its structure is designed to be “lawyer free” in that claimants will engage with the Trust directly, making it unnecessary for a portion of the benefits to be paid to external agents.
The Trust will also cover periodic medical examinations for current and former mineworkers at the Medical Bureau for Occupational Diseases as well as medical screening.
CORRECTION: The article originally listed five companies in favour of the settlement. It has been amended to reflect six companies in favour of the settlement with the addition of African Rainbow Minerals. Another company, African Rainbow Minerals Gold, is not party to the settlement.