1. HAZARDOUS EMPLOYMENT: SOME THOUGHTS ON CORPORATE ETHICS AND THE MANKAYI CASE PROF PEET RAUTENBACH HOD: COMMUNITY MEDICINE UNIVERSITY OF LIMPOPO: MEDUNSA CAMPUS

2. WHAT ARE THE MAJOR DILEMMAS FACING MINING COMPANIES FROM AN ETHICAL VIEWPOINT ? Few issues raise more debates or pose more uncomfortable questions for corporate mine managers than standards of health, safety and environment in the work place. The rights of employees to be informed about health hazards in the work place has become a major issue in occupational health policy, especially in developed countries. The fact that some mines are 3000 metres deep and miners work in extremely harsh conditions make in juries and fatal accidents a frequent occurrence. The frequently raised question on this issue is “ should the economic benefits outweigh ethical considerations in developing countries.”

3. Can we predict corporate response in the face of an ethical / social issues? Social issue life cycle theory: The social responsiveness of a corporation will proceed through a predictable series of phases, from issue identification, learning phase and on to a commitment phase. Four general trends in corporate behaviour can be identified: Increased organisational commitment to social action; Transition or organisational behaviour from mere lip service to concrete action; Increased organisational familiarity with the issue and how to deal with it; and Increased standardisation of response to social and environmental issues at operational level

4. Legitimacy theory: The issues-management activities of a corporation will be driven by the existence of legitimacy gaps. Management will adopt strategies, depending upon which strategy has the highest perceived possibility of success and the lowest cost. Corporations require legitimacy to maintain functional, long- term relationships with the communities on which they depend. Society grants legitimacy and power to business. Those who do not use power in a manner society considers responsible, will lose it A corporation is said to be legitimate when it is judged to be “just and worthy of support”. Legitimacy problems occur when societal expectations for corporate behaviour differ from societal perceptions of a corporation’s behaviour. Goal: A company must strive to narrow the “legitimacy gap” to maximise discretionary control of internal and external dealings

5. The stakeholder theory: The stakeholder theory holds that effective management requires the balanced consideration of and attention to the legitimate interest of all stake- holders. Management will respond to the demands of the most powerful stakeholders. As stakeholder groups gain and lose power, management activities will change focus. Thus, a business’s financial success can best be achieved by giving the interests of the business’s stakeholders, customers, employees, suppliers, management and local community proper consideration and adopting policies that produce the optimal balance among them.

6. Primary ethical obligations of mining companies as relates to their workers Companies have an obligation to, as far as practical ensure a working environment that is safe without risk to the health of workers A duty to inform the workers of the hazards of the working environment. (Failure to disclose vital information to employees about the health hazards of their employment can be termed bad business ethics) In essence these two ethical obligations have been incorporated into the Mine Health and Safety Act and companies are obliged to comply with the Act which has a strong health and safety focus.

7. Subcommittee on Compensation, Health, and Safety of the House Committee on Education and Welfare in San Francisco, US, in October 1978, was written by the medical director, Kenneth W. Smith, of a Johns­ Manville plant in Canada: “It must be remembered that although these men have the X-ray evidence of asbestosis, they are working today and definitely are not disabled from asbestosis. They have not been told of this diagnosis, for it is felt that as long as the man feels well, is happy at home and at work, and the physical condition remains good, nothing should be said. When he becomes disabled and sick, then the diagnosis should be made and the claim submitted by the company. The fibrosis of this disease is irreversible and permanent so that eventually compensation will be paid to each of these men. But as long as the man is not disabled, it is felt that he should not be told of his condition so that he can live and work in peace and the company can benefit by his many years of experience. Should the man be told of his condition today there is a very definite possibility that he would become mentally and physically ill, simply through the knowledge that he has asbestosis.” (Epstein, 1979).

8. Discussion point: ‘Volenti non fit injuria’ ( ‘to a willing person injury is not done’ ) 1.In the developing country context, do you think informing a prospective, or even current mine worker, of the hazardous environment he is going to work in would influence his /her decision to do that work? 2.Having informed the worker of the dangers, would an employer be able to fall back on the above defence when faced with a claim for damages i.e. that the worker voluntarily assumed the risk.

9. What constitutes and unethical situation? A situation wherein the actions of a corporate entity are commonly perceived to have had a detrimental impact on the host community [and other stakeholders], arousing powerful emotions which express themselves variously through such things a strikes, demonstrations, press campaigns, legal actions, financial sanctions and sabotage.

10. Thembekile Mankayi v Anglogold Ashanti Limited Findings of the court: Section 35(1) of the Compensation for Occupational Injuries and Disease Act only applies to employees entitled to claim under COIDA. COIDA and ODIMWA do not constitute a single system of compensation. Implications of the decision: Section 100(2) of ODIMWA prohibits a claim under COIDA. There is no prohibition in ODIMWA preventing a worker who suffers from compensable lung disease in terms of ODIMWA from instituting an additional claim for delictual damages against an employer.

11. Where did things go wrong? Were the mines practicing good corporate ethics when it came to exposure to quartz dust? [ In 1995-1997, 17% of mines had all of their time weighted average(TWA) measurements for respirable quartz below the DME’s standard of 0.1 mg / cubic metre; 43% had measurements in the range 0.1 – 0.4 and 40% had measurements above 0.4 mg/ cubic metre. Did the Government Department responsible exhibit good corporate ethics when dealing with this problem. The major problem: Employment of mine workers for extended periods in high risk areas.

12. Why did we end up with the Mankayi case, i.e. when did the unethical situation arise? Not with the exposure to dust Not with the mine worker developing a disease. The problem arose when the compensation offered was perceived as being inadequate. A legitimacy problem arose when societal expectations for the corporate’s behaviour differed from societal perceptions of a corporation’s behaviour. The Mining Company actions were seen as being unethical because the compensation was inadequate.

13. How do we remedy this situation i.e. how do we close the legitimacy gap ? Clearly the compensation offered in terms of ODIMWA is inadequate, especially when Compared with COIDA. Two possible solutions exist: Amalgamate ODIMWA and COIDA Beef up the compensation in terms of ODIMWA The Challenges For close on 15 years people in the industry have played with the idea of merging the two compensation systems. Reluctance on the part of both the mining companies and government to move on this point relate to the extent of the unfunded liability under ODIMWA. Who will eventually foot the bill ?