Semongkong, Lesotho - They came on horseback or on foot,
trudging through Lesotho's highlands and clutching tattered identity documents
to back their claims that South Africa's gold mining firms ruined their lungs.
On one day in January alone, around 40 former gold miners
and widows crowded into a municipal office in Semongkong, 120km east of
Lesotho's capital. They were there to add their thumbprints to the names of
nearly 7 000 others who are threatening the biggest class action suit Africa
has ever seen.
In South Africa, the case touches on race, politics and
history. The implications for its gold mining industry and for its relations
with the government - already strained by past talk of nationalisation - are huge.
The men - some South African, others from neighbouring
Lesotho - worked deep underground for many years, often with insufficient
protection. They inhaled silica dust from gold-bearing rocks and later
contracted silicosis.
This is a disease which causes shortness of breath, a
persistent cough and chest pains, and makes people highly susceptible to
tuberculosis, which kills. It has no known cure.
The miners are led by Richard Spoor, a provincial lawyer who
won a case last year that laid the legal ground for claims for compensation.
He has help from South Carolina law firm Motley Rice, which
made its name suing asbestos and tobacco companies and is one of the largest
litigators in the United States. Neither firm will disclose commercial terms.
"We're signing up 500 people a week at the
moment," Spoor said.
A successful suit could collectively cost mining companies
such as AngloGold Ashanti, Gold Fields, Harmony and global giant AngloAmerican
billions of rands, according to legal and industry experts.
The largest settlement to date by the mining industry in
South Africa was $100M in 2003 in a case brought by Spoor against an asbestos
company.
"This case has damn serious implications," said
Peter Major, a mining industry analyst at Cadiz Corporate Solutions in Cape
Town. "There are going to be payouts, without a doubt."
The big four mining companies declined to comment in detail
for this article, saying they had yet to see the arguments, which Spoor is
finalising for the possible court filing.
Graham Briggs, the chief executive of Harmony Gold Mining Company [JSE:HAR], said the
issue of silicosis was "a big topic" but he did not think it
"class action material". Different conditions prevailed at different
times in different mines, he said, and workers may have had more than one
employer.
That doesn't sway miners with silicosis. For the vast
majority, and the widows of men who died as a result of it, life is little
different today from the 1980s.
South Africa's first free elections in 1994 may have brought
political reform and economic change, but for the hundreds of thousands of men
who helped build the biggest economy on the continent and then got sick, the
harm caused in the gold mines has yet to be made good.
They want compensation, better healthcare and recognition
that they have been treated badly.
"We had massive change in South Africa in 1994 and yet
here we are, in 2012, and we still haven't found a way to resolve the biggest
legacy of apartheid era mining," said May Hermanus, a former chief mines
inspector and now head of the Centre for Sustainability in Mining and Industry
in Johannesburg.
Landmark case
The miner who opened the way to Spoor's campaign never heard
the outcome of his legal battle.
In 2006, Thembekile Mankayi, who came from the impoverished
Eastern Cape province, lodged a civil claim against AngloGold, Africa's biggest
gold producer.
He sought R2.6m in damages, loss of earnings, medical bills
and pain and suffering caused by silicosis and related tuberculosis allegedly
contracted while he was working underground at AngloGold's Vaal Reefs mine, 150
km southwest of Johannesburg, between 1979 and 1995.
The case, led by Spoor, reached the Constitutional Court,
the highest in the country. But Mankayi died just days before it finished its
deliberations in March 2011.
The judges did not rule on his claim but did say
lung-diseased miners could, for the first time in South Africa, sue their
employers for damages.
"As the history of this country painfully reminds us,
mineworkers, African mineworkers in particular, have contributed enormously to
this country's economic wealth and prosperity, at great cost to themselves and
to their health," their ruling said.
Since the verdict, Spoor has searched for sick ex-miners in
South Africa and Lesotho to build a class action suit. He said he has found 6
876 ex-miners and widows so far. Botswana, Swaziland, Mozambique, Zambia and
Malawi - all of which shipped men in large numbers to South Africa's gold mines
- are next on his list.
In Lesotho, Spoor's team has broadcast advertisements on
state radio and established contact with far-flung village chiefs.
Young
lawyers and old trade unionists have trekked to places like Semongkong to
unearth potential plaintiffs. Spoor declined to discuss what fee he would make
in any settlement.
'Old T-shirts'
More than a dozen former miners interviewed in Lesotho said
they had never received protective kit such as face masks in the mines.
"The only safety gear they gave us was gloves,"
said 55-year-old Tele Nchaka, who now makes a living growing vegetables on a
small plot outside Lesotho's capital, Maseru. Nchaka was laid off from Gold
Fields' Kloof mine in 2008 after 33 years of service. "We didn't have masks.
To stop the dust, we just had old T-shirts that we used to make wet."
Nchaka said he and his colleagues "were never made
aware of the dangers of the dust". Gold Fields [JSE:GFI] declined to comment on
either compensation or health and safety practices.
There have been attempts to clean up the mines, and since
Nelson Mandela and the ANC came to power in 1994, working conditions have
improved. In 2002, maximum permissible dust levels were laid down in law for
the first time, replacing guidelines in effect since 1991.
Over the past decade, mining firms have also improved
ventilation and the use of safety gear. The industry pledged in 2005 that
anyone beginning work after 2008 would not get silicosis.
Despite that, a 2007 survey of miners compiled by the Mine
Health and Safety Council found problems with the use of dust masks. Miners
complained that they were of poor quality, quickly became soaked with sweat and
were too uncomfortable to wear throughout an eight-hour shift.
The survey also said that many miners talked of "safety
officers not giving them new masks when they should".
A parallel survey of health and safety officers in the mines
found that a third were functionally illiterate, and two-thirds had never heard
of silicosis. Just 3% said they had received training on dust control.
Compensation apartheid
Just over a century ago, in 1911, South Africa was the first
country in the world to pass a law - the Mining Phthisis Act - that recognised
silicosis as a disease for which sufferers were entitled to compensation.
"Phthisis" comes from the Greek for "waste away".
However, the law and its subsequent amendments meant that
throughout the 20th century lung-diseased miners - some white, the vast
majority black - were treated differently from other workers: they were forced
to accept a statutory compensation package that prevented them from suing their
employers for damages.
Even before apartheid was introduced in 1948, the system was
skewed along racial lines.
According to the minutes of an international conference on silicosis in Johannesburg in 1930, of £15m paid out by the mining houses in silicosis compensation from 1911 to 1929, 85% went to whites, who constituted less than 10% of the workforce.
Since the demise of apartheid in 1994, two-tier payouts have
ended; in 1999 the ANC said the compensation regime needed an overhaul.
The mining companies have accepted the need for reform, but
no changes have been introduced, partly because they can't agree among
themselves how to go ahead.
The maximum payout for an incapacitated mineworker stands at
a lump sum of R105 000. Last year, South Africa’s Medical Bureau of
Occupational Diseases (MBOD), which assesses possible silicosis victims, said
it found 878 "fully compensatable" cases. How many of these were
actually paid isn't clear.
Faulty line
One problem is navigating the system, as the case of
Ketlareng Theko shows. After 27 years working at Gold Fields' Kloof mine near
Johannesburg, the 58-year-old developed a chronic cough and breathing problems.
He said he was dismissed on medical grounds in 2009.
His medical discharge document, completed by the MBOD,
confirms Theko contracted silicosis and tuberculosis during his employment. It
is written in English - a language the Lesotho miner does not understand - and
its instructions are concise.
"Concerning possible compensation, the Compensation
Commissioner for Occupational Diseases, PO Box 4566 Johannesburg 2000, (011)
713 6900, will send you forms to complete," it said.
Theko, who can't walk more than a few hundred metres without
the help of Springer, his mountain pony, tried the phone number but couldn't
get through.
Dozens of calls made by a Reuters reporter to the number in
February also failed to connect. Operator Telkom said the line has been faulty
since at least the start of January.
The Compensation Commissioner did not respond to requests
for comment. Gold Fields declined to comment on Theko's case.
Theko’s situation highlights another discrepancy Spoor said
his action seeks to address. It was noted by the Constitutional Court ruling on
Mankayi's case.
The compensation legislation covering miners, now known as
the Occupational Diseases in Mines and Works Act (ODIMWA), is far less generous
than that protecting other workers.
The latter scheme pays out monthly benefits, including
extras such as funeral costs and a stipend for dependents should the family
breadwinner die.
By contrast, the miners' compensation fund, which is
financed through a levy on mining firms, is so underfunded that many miners
never see a cent.
Accountancy firm Deloitte calculated that in 2003 the fund
was essentially broke, with a shortfall on its estimated future obligations of
R610m, or $144m at today’s prices. In response to that government-commissioned
report, the mines went to court in 2010 to try to get the state to make up a
large slice of the shortfall. The bid was rejected last year.
Though Theko wasn't paid, at least he found out about help.
Of 205 Eastern Cape miners surveyed for a 2009 department of health report,
only two had heard of the miners' compensation act. The MBOD doesn't have a
website.
Silicosis timebomb
It's hard to estimate the potential size of a silicosis
class action. South Africa is the source of 40% of all the gold ever mined. At
its height in the 1980s the industry employed 500 000 men - two-thirds of them
from Lesotho, Mozambique and the Eastern Cape - although production has fallen
behind China and Australia and employment since halved.
But silicosis can take years to show up and checkups are at
best haphazard. A 2005 study by the National Institute of Occupational Health
in Johannesburg, based on autopsies of miners, suggested 52 in every 100 had
the disease.
Under South African common law, widows and children also
have a claim for the loss of a breadwinner's earnings, meaning liability does
not end with a sick miner's life.
A 2009 paper by researchers from Witwatersrand University
and University College, London, which was published in the American Journal of
Industrial Medicine, estimated there were 288 000 cases of compensable
silicosis, and R10bn in unpaid compensation liability at 1998 values. Today,
that would be R27bn - more than $3.5bn.
Rehearsing arguments
Since the Constitutional Court ruling, only AngloGold has
mentioned the issue in its financial reports, although it added that no
reliable estimate of the possible liability could be given.
It is also unclear what insurance cover the mining firms
have. The four big houses, as well as top South African insurers Sanlam [JSE:SLM] and Old
Mutual [JSE:OML], declined to comment. Insurance industry sources said mines were likely
to have a degree of cover with local insurers, with much of the final liability
resting with reinsurers.
Any case will hinge on whether the mines are found to be
negligent. In its 2011 results filing, AngloGold Ashanti [JSE:ANG] said Mankayi's case would
involve the plaintiff providing evidence that he "contracted silicosis as
a result of negligent conduct on the part of AngloGold Ashanti".
Legal experts say the firms are likely to argue that they
provided adequate safety kit - and in any case were following government
guidelines, so can't be liable if these weren't up to scratch.
Harmony boss Briggs said it's impossible to say when a miner contracted silicosis, so the question of blame is also unanswerable.
Motley Rice partner Michael Elsner counters that silicosis
in South Africa is far simpler than asbestosis in the United States, where
victims and defendants were spread across a wide range of industries, locations
and state jurisdictions.
And plenty of men spent all their working life at one mine.
"This one is going to be hard to get out of. It's pretty definitive,"
said Major, the analyst. "You can take a miner, trace his history and if
he spent 25 years at one company, they're definitely liable."
Faced with a separate silicosis claim last year in the high
court in London, Anglo American has denied liability and said adequate safety
procedures were followed. The case has yet to be decided.
Of course, Spoor and his claimants may settle before
anything reaches court. "We want to engage the mining companies to find
out what scope there may be for sorting this out between ourselves," Spoor
said. "One way or another, we have a common in interest in resolving
this."
As Spoor signs more miners, battle lines are being drawn.
The 250 000-strong National Union of Mineworkers, South Africa's biggest union,
backs the campaign, and top ANC officials say the case against the mining firms
is close to irrefutable.
"The proof is sufficient to require compensation,"
said Mining Minister Susan Shabangu. "They need to find an amicable
settlement out of court. Going through the courts is not caring and brands the
industry irresponsible."
The industry declined to comment.