The Congress of South African Trade Unions (COSATU) is deeply concerned about the financial position of the Unemployment Insurance Fund (UIF) after it emerged that a company was granted an R807 million bailout even though it did not qualify.
The Siyanda-Bakgatla Platinum Mine (SBM) first applied for financial relief from the UIF's Temporary Employer/Employee Relief Scheme (TERS) in early 2024 but was rejected. However, late last year, the Acting Director General of the Department of Employment and Labour, Viwe Mlenzana, approved the scheme totalling R807 million for SBM over 12 months. Mlenzana has since left the department.
The company is alleged to have received the first payment of R67 million in February this year. However, following an exposé by the Sunday Times in March reporting that the company paid shareholders dividends, Minister of Employment and Labour Makhosazana Meth, halted the payments and instituted a forensic investigation into the granting of the scheme to SBM. But now it appears that while the public was awaiting the outcome of the investigation, the company was paid a further R61 million in May. The slight drop in the payment was attributed to some of the workers having been retrenched. Two other payments of R61 million were then effected in June and July.
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An independent auditor's report penned last year revealed that the company was not in financial distress when it applied for relief from TERS. In fact, its current ratio and debt to equity ratio showed that SBM's finances were in a healthy state so much so it declared a dividend to shareholders.
Given Minister Meth ordered an investigation into the SBM scheme in March, the Federation demands to know the outcome of that probe and calls on her to share the report with the public as well as table it at Nedlac. We are also curious to know what circumstances gave rise to the payments in May, June and July and how it was that these payments were approved and who signed off on them.
COSATU also calls on the board to confirm that the said investigation was conducted. Additionally, COSATU reaffirms its position that the Special Investigating Unit (SIU) must institute an investigation into the UIF in general and the SBM scheme in particular. It is important to stress that the UIF is not a slush fund for politicians and businesspeople but a contributory social security fund for the benefit of workers.
The Federation once more reiterates its call for President Cyril Ramaphosa to place the UIF under administration with conditionalities for the Hawks and SUI to investigate the allegations of corruption, because we fear the rot is so engrained it might render the fund unsalvageable were it to be left unchecked. COSATU is adamant that the UIF's latest actuarial report should be tabled at Nedlac to lay bare its true status. The Federation also demands the halting of the Labour Activation Programmes (LAP) and other similar projects to allow law enforcement agencies to commence and conclude their investigations.
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We strongly urge the Standing Committee on Public Accounts to consider calling on Minister Meth, the UIF, Organised Labour and Business at Nedlac to account for the generic failures of the UIF to deliver on its mandate. We further call on all employers, workers, trade unions and officials within the ministry and UIF to report all wrongdoing in the UIF and other related funds to law enforcement agencies.
Daily, the COSATU call centre is bombarded with queries from workers who cannot claim their rightful benefits. The Federation cannot stand idly by while billions are spent on dubious activities that bring no direct benefit to workers. Those who are found to have benefitted wrongly must not only account but must face the full might of the law.
