- Ex-miners join South Africa’s biggest class-action case
- U.S. law firm Motley Rice funds local counsel’s suit
Resting one hand on his wife’s shoulder and the other on a crutch, Landile Qebula shuffles along, wheezing heavily. The retired gold miner is showing off his four-room house perched near the top of a dusty hill in South Africa’s rural Eastern Cape province.
“With the money I earned on the mines I built this,” the 52-year-old says proudly of the dwelling that lacks running water and whose zinc roof is held down by bricks. “But for 33 years of work and what I am suffering, it is not enough.”
Qebula has silicosis, an incurable and degenerative lung disease, the result of 13-hour days in mines more than a mile underground. Now unable to work, he and his 11 family members survive on just 1,400 rand ($100) a month from the government.
The pittance may just represent a down payment.
Unlike the generations who preceded him, Qebula and as many as half a million others have tenacious and well-financed champions fighting on their behalf: Motley Rice LLC, a legal powerhouse based half a world away in Charleston, South Carolina. Responding to an appeal from South African lawyer Richard Spoor, the firm is financing an effort that could upend the country’s signature industry.
Motley Rice isn’t just any law firm. Its late co-founder, Ron Motley, helped invent mass-tort litigation in the 1970s by bringing the first suits against makers of asbestos, a cancer-causing substance used in insulation. He spearheaded litigation against the tobacco industry that resulted in a $246 billion settlement in 1998. More recently, co-founder Joseph Rice helped put together more than $12 billion in settlements of lawsuits against BP Plc over the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.
While it’s taken more than seven years, the unlikely combination of deep-pocketed U.S. lawyers and impoverished Africans is finally having some success. Miners and families of deceased workers were certified as a class in May by a judge in Johannesburg, paving the way for the country’s biggest class-action suit. While both sides say it’s too early to speculate on the size of any payout, a recent settlement suggests it could run as high as $2 billion -- 20 times the 2015 profit at the country’s biggest producer.
That would make it worth the lawyers’ investment. The winning attorneys will get either twice their normal fee or 15 percent of any award, South Africa’s High Court has ruled. Spoor said he would then reimburse Motley Rice’s costs; the split of the rest remains to be negotiated, Spoor said.
Some 32 companies, which include AngloGold Ashanti Ltd., Harmony Gold Mining Co. and Sibanye Gold Ltd., are the defendants. While denying liability, the six biggest defendants say a "settlement that will be fair to the claimants and sustainable for the industry" is preferable to litigation that could take as long as 15 years, according to a joint statement by their Johannesburg-based spokesman Alan Fine of Russell & Associates.
The legal wrangling is where Motley Rice comes in.
Michael Elsner was at his desk in an office outside Charleston when he got a call from Spoor, who wanted to know if Elsner would be interested in helping with cases he’d filed on behalf of some stricken gold miners. That was in 2009.
“He needed a partner for strategic advice and funding,” Elsner said in an interview.
After doing his own research and getting the law firm’s blessing for its first dive into a case outside the U.S. or Canada, Elsner agreed to serve as Spoor’s consultant.
The firm also assigned Elsner’s wife, Liza, to the case, making the litigation part of their everyday life. “As she likes to put it, we’re working on things 24 hours a day,” he joked.
Relying on his asbestos-litigation experience, Elsner helped Spoor set up systems for collecting and storing information from prospective clients and gearing up for pre-trial information exchanges with the mining companies. The cost is running at about 500,000 rand a month -- about $450,000 a year.
“We couldn’t do it without their support,” Spoor said in an interview.
With millions of migrant laborers recruited to South Africa’s gold mines in the past 50 years, the eventual number of claimants could swell to as many as 500,000, Judge Phineas Mojapelo said in the May ruling. Spoor reckons between 100,000 and 200,000 is a more realistic number.
It’s not hard to find them. In a settlement not far from Qebula’s village, Bongani Nkala walks with the familiar shuffle and wheeze. The 62-year-old says he was fired in 1996 after becoming too sick to work.
“The mine bosses told us we are the living corpse,” he said. “We are not useful for the mines anymore. We are like the dead.”
The miners claim that they were negligently exposed to vast amounts of silica dust for decades, causing silicosis and pulmonary tuberculosis. Silica dust is found almost exclusively in gold mines, indicating a strong connection with mining. The link with tuberculosis is less clear because it can be contracted from other sources.
South Africa’s mines, which have produced a third of all the world’s gold, were as profitable as they were ruthless. Since gold was discovered in 1886 they recruited millions of poor, black workers mainly from rural areas across southern Africa. Gold prices have doubled over the past decade.
Qebula would typically wake at 4 a.m. in a 16-man hostel and make his way to the number 8 shaft of Great Noligwa, a mine now owned by AngloGold, the world’s third-largest producer. He would change into his overalls, pick up a headlamp and descend as far as a mile below the surface in a huge steel-cage. He and his eight-member mining crew would then walk, and sometimes crawl, through a labyrinth of tunnels for as long as three hours, to whichever panel of ore they were working. Heat regularly breached 40 degrees Celsius (104 Fahrenheit).
Qebula spent most of his days -- and working life -- using a handheld drill to make holes for explosives. The blasted rock would then be carted to the surface for processing.
“We walked a long distance up to the lift and that whole distance was dusty because of the blasting,” Qebula said. “We covered our noses with our overalls.”
Only in 1997, three years after white-minority rule ended, was he issued a mask, Qebula said. The only dust-control measure was to spray water in affected areas. “After some hours the dust would come back again,” he said. Qebula said he was fired in 2010 after becoming too sick to work and received a one-off payment of 51,000 rand.
AngloGold said he left the company after he was found medically unfit. “The search for an alternative, less strenuous surface role was unfortunately unsuccessful,” a statement said.
Dust control is much improved in recent years, says Fine, the spokesman. Companies now use sophisticated ventilation techniques and automatic sprays and issue protective equipment as standard practice. For its part, AngloGold says no blasting takes place while employees underground.
Now, Qebula spends most of his day sitting in his armchair directing his kids to fetch water from a nearby river and worrying about how to pay for their education.
“The chest pains are getting more severe,” he said, sitting in his living room, his hand gripping an armrest scratched through to the foam underneath. “It’s not easy to breathe.”
While the effect of silica dust has been known about since the early 1900s, South African law prevented miners from suing for the lung damage. Spoor challenged the ban in lawsuits beginning in 2006. The costs were so high he almost lost his house but eventually won in the country’s highest court in 2011.
Despite their successes, the clock is ticking on the legal battle. At least 20 percent of Spoor’s claimants have died in the past decade. Thembekile Mankayi, whose application to sue AngloGold for 2.6 million rand led to the courts overturning the ban in 2011, passed away just days before the ruling.
His wife Nozuzile Mankayi, 66, says she is proud that he made legal history but still hasn’t received a cent of compensation. She has 10 children and seven grandchildren.
“We were happy that he made it possible for other miners to claim compensation but all that is fading away daily,” she said, as she visited Nkala’s house after hearing about the visit by Bloomberg News. “We don’t know if we will get anything anymore. We are no longer patient.”
Both sides say a settlement would be best. Elsner envisions setting up a trust financed by the companies. The trust would fund a system of “mobile medical facilities or some other way to offer access to medical testing and treatment,” he said. Such trusts have overseen billions in payments to U.S. asbestos victims in the past 25 years.
The companies favor current and future employees being compensated by a government-backed fund and are working with department officials to achieve this, Fine said. They also want to help fix a second, government compensation fund and to top-up statutory payments, he said.
A separate case between 4,365 former mineworkers and Anglo American Plc and AngloGold Ashanti was settled for 500 million rand in March. That gives a payout ratio of $8,600 per person at the current exchange rate. (This is a theoretical figure because medical and administrative costs will be deducted and each miner will be individually assessed for compensation).
Those figures “set a minimum standard,” Spoor said. Using his assumptions for between 100,000 and 200,000 people affected, that would bring an eventual payout to between $860 million and $1.7 billion.
While saying it’s too early to speculate on a final sum, “some of the numbers that are being quoted are way outside the realm of any fair actuarial valuation,” AngloGold Chief Executive Officer Srinivasan Venkatakrishnan said in an interview.
Lawyers for the companies -- which include Norton Rose Fulbright, Webber Wentzel and ENSafrica -- and the former employees have held preliminary settlement discussions. Elsner sees his boss, Rice, as a key weapon in the miners’ arsenal when talks get serious. “He’s one of the most creative negotiators ever, so we’d benefit from having him involved,” Elsner said. If a deal can’t be reached quickly, Elsner said Spoor and other South African lawyers should press ahead with the class action as aggressively as possible to get some silicosis suits to trial as test cases.
“I don’t want people to have to wait 10 or 15 years to get a ruling,” he said. “By that time, all the people we are fighting for will be dead.”