Migrant workers owed billions in 'unclaimed' social security funds
Many are unable to access their social and security benefits when they leave work, dooming them and their families to continued poverty, while their money sits unclaimed in a bank account far away.
This is the first in a series of three articles on social benefits. The series will look at the social, structural, policy and regulatory factors that have an impact on workers' accessing their benefits once they return to their homes
Former mineworkers who are back in their home countries after working in South African mines for decades are facing complex challenges in claiming social security and occupational health benefits owed to them.
Depending on whom you speak to – fund administrators in South Africa or the ex-mineworkers living in countries such as Lesotho, Swaziland, Zimbabwe and Mozambique – the funds are either "unclaimed" or unreachable.
The unclaimed benefits in various retirement-type funds operating under the authority of the South African Financial Services Board amounted to R5.7-billion, according to a confidential report submitted to the International Labour Office in late 2010.
It's not known how much of this belongs to former migrant workers, the report, submitted by the International Institute for Social Law and Policy, reads: "It is evident that the host of problems ... experienced by these workers and their survivors in accessing retirement or survivor benefits have contributed to this state of affairs."
Vic van Vuuren, regional director for the International Labour Office, the United Nations agency that seeks to promote social justice and human and labour rights, said the amount is probably much larger. "When you are talking about undocumented people, that figure will escalate," he said.
"I think we don't have the capacity or the systems that are accurately able to determine what is out there. [But] if someone had to commission an audit on the formal employment-side of migrant workers, I think you would be able to come up with a figure, because the South African financial systems are there. But I think that many of the employers, be it the government or otherwise, are not in a hurry to have that money claimed."
"I don't know that there is a majority of employers who have the criminal intent to sort of say: 'Let me see how I can get the money back.' I think it's more just because of the systems and the difficulty in tracing people that they just let the money lie there and don't worry about it."
It is also difficult for employees and fund managers to send money to ex-workers once they have left South Africa because there is no cohesive banking system across the Southern African Development Community region, said Van Vuuren. "It's a sophisticated South Africa and unsophisticated neighbouring countries in terms of their financial systems. You can't link the two. If the individual doesn't get the money [when they leave], it's difficult to get it at a later stage."
A lack of understanding on the part of the recipients about what channels they can use to retrieve their money is also contributing to the problem, said Van Vuuren.
"Most of the time they are not financially literate," he said. "So they work 30 years, or whatever, and go back home and they don't know how to access the money, or it's too much trouble."
Rantso Mantsi, a former mineworker from Lesotho and president of the Southern Africa Mineworkers' Association, said many former miners are struggling to claim benefits and in some cases do not know where to turn for help.
Speaking on a bad cellphone connection from Lesotho, he said the association had not been able to make contact with the office where the miners' funds are kept "because we don't know where they are. We only know that mine that we were working at."
In a country such as Lesotho, where the majority of those living in rural areas are subsistence farmers, not receiving an insurance pay-out can often mean the difference between survival and starvation, said Mantsi.
"The people are dying horribly in the villages because of hunger," he said. "This man went to the mines as a young boy. When he is old, he is retrenched without good packages or interviews about what to do when he is home. He is helpless because he does not know how to think for himself."
The mineworkers often face the effects of HIV/Aids and starvation, he said. "And when they don't have anything to eat, with this HIV in their body, they die."
Mantsi worked in a gold mine in South Africa between 1967 and 1990. "I was told by The Employment Bureau of Africa that I have money from work," he said. "When I got my money, I realised that the bureau got the money in 2009, but I only got it in 2011."
"Since then , I've been coming and coming [to Maseru], thinking I'm going to get a lot of money," he said. When the lump sum finally arrived in 2011, Mantsi said it came to R4000. Had he known the amount would be so small, he said, he would not have spent money on the many frequent trips to Maseru to check the progress of his claim.
"I'm lucky because I'm closer. I'm not in Thabaseka," he said, referring to a mountainous region in Lesotho that has little road access.
Cultural norms versus the law
Another problem some retrenched migrant mineworkers face is not being able to claim compensation for work-related illnesses, such as silicosis, said Mantsi.
"Due to the laws that are made in South Africa to compensate the people who get tuberculosis in the workplace … we are still unable to access the funds for that. Lesotho does not have the X-ray [machines] to look at silicosis. The machines are in South African hospitals and that is impossible because people don't have money to go to South Africa," he said.
In addition, legislation prescribes that the lungs of deceased mineworkers must be sent back to South Africa for an autopsy in claims involving death benefits as a result of work-related illnesses. This is both prohibitively expensive and is seen as foreign to cultural norms.
Dr Claude Kabemba, director of the Johannesburg-based Southern Africa Resource Watch non-governmental organisation, said he knew of cases where mining companies retrenched mineworkers knowing that the workers were showing early signs of lung disease. "Those people have been asked to leave ... most of the time, these people are very strong ... capable of continuing work ... But we have observed that companies know that people have contracted disease, and that disease is linked to the mining activity ... They run from the responsibility of taking care of the sick worker ... It's a lot of money and a burden on the company's finances, so they decide to terminate the worker's contract," he said.
"These workers don't know that they are sick ... and they realise two years later [when they have gone back their home country]. And they have no recourse." But Kabemba said: "These [stories] are oral evidence ... so it's difficult to confirm."
Vusi Mabena, a senior executive at the Chamber of Mines, said: "The chamber is not aware of any of its members engaging in such behaviour, which can be termed unscrupulous and unethical. Occupational lung diseases are compensatable and interference with diagnosis of the disease would lead to miners losing out on their benefits.
"The practice is also unwarranted because most people who develop an occupational lung disease while employed are likely to have early disease and are compensated and continue to work. Claiming while employed is usually more successful because documents are easily available, compared with when an employee is at home and has no assistance from the employer.
"The department of health, through its public health services, provides benefit examinations for ex-miners. Through the examination it can be determined if they qualify for compensation or not. Employers also assist former employees with benefit examinations."
However, if former miners were to find themselves with lung disease a few years after having left South Africa, it is more difficult to claim benefits, said Mabena. "The current compensation system for occupational lung diseases [the Occupational Diseases in Mines and Works Act] is not well suited for ex-miners who are from countries other than South Africa and thus its services to non-South Africans are patchy. This can be contrasted with the [Compensation for Occupational Injuries and Diseases Act] compensation system, which recognises the need and provides services to ex-employees outside the borders of South Africa. An amendment to legislation to bring it in line with practices in the compensation Act would help. The compensation commissioner can in the interim put in place measures to ensure better access by these ex-miners," said Mabena.
If migrant mineworkers do have a benefits plan, it is usually a provident fund rather than a pension fund, which is typically reserved for officials and miners in supervisory positions.
According to the pension.co.za website, the main difference between a pension and provident fund is that: "Under a pension fund at least two-thirds of the final benefit must be paid as a pension for the rest of the pensioner's life. A maximum of one-third of the final benefit may be taken as cash.
"Under a provident fund, the full amount of the benefit available at retirement may be taken as a lump sum cash payment irrespective of whether the benefit is calculated on a defined benefit or a defined contribution basis."
Many of the "unclaimed" migrant ex-mineworkers' benefits are likely contained in provident funds that originated during the apartheid era.
Two mineworkers' funds were created for black employees, said Sue Fritz, deputy head of the Chamber of Mines and chairperson of the chambers' 1970s fund. The fund was created in January 1970 and stopped accepting contributions and new members a few years after the Mineworkers' Provident Fund was created in 1989.
The 1970s fund, which now only contains unclaimed benefits, is divided into two parts, one containing pension benefits and the other provident benefits, she said.
Fritz said she could not comment on the size of the investment fund but: "It's a substantial amount of money ... It's millions in the mines' 1970s fund."
Fritz said it has been very difficult to trace members of the fund because many employees came from rural areas or from neighbouring countries. However, the fund had been working on tracing members for more than a decade and used tracing agents such as Datafactory and The Employment Bureau of Africa. Sometimes incomplete data on the fund members makes them impossible to find.
The chamber is looking into a whole new tracing strategy and is interviewing a possible new agent to do so, said Fritz. "Every possible angle is explored to trace these members," she said.
Fritz said many tracing agents were "first-world agents" that use computers and cellphones to trace former mineworkers. She said most of the members who needed to be traced lived in rural areas. So "you almost have to get on a donkey and get up the mountain and make inquiries. You really have to make every effort."
The other fund for mineworkers that contains "unclaimed" retirement and death benefits – the Mineworkers' Provident Fund – is also an active fund and the bulk of its members belong to the National Union of Mineworkers. According to the audited financial statements from December 31 2010, the fund had 124230 members.
Participating employers of the fund include AngloGold Ashanti, BHP Billiton, Gold Fields, Harmony Gold and Xstrata Coal.
The Employment Bureau of Africa, which historically has been an employment agency for South African mines, has recruitment offices across the Southern African region. The company also offers its services to fund managers to trace and pay their members' "unclaimed" benefits.
The company's executives say the bureau is best positioned to trace ex-miners and pay their fund benefits.
"We try to market ourselves to those funds as a service provider because we are the best tracers, so we can find those individuals, said the bureau's head of operations, Chris Hechter.
Graham Herbert, the managing director, said: "We keep biographical details of mineworkers and that's mainly to do with where they live and who their beneficiaries are. If the need arises, we can trace them easily." He was not willing to divulge how much money had gone unclaimed but "if we were given more business, we could trace more people".
"I would estimate about 75000 foreigners [are working in South Africa's mines] and the majority of those come from Lesotho and Mozambique," said Hechter.
The size of the benefit payout could "range from a few hundred rands ... to a few hundred thousand rands … There are different types of funds," said Hechter.
Some of the bigger funds the bureau undertakes work for include the 1970s pension and provident fund, the Mineworkers' Provident Fund, The Lonmin LEM trust, Impala Workers' Provident Fund and the Anglo Group Provident Fund.
This feature was produced in partnership with the Southern Africa Trust