MHSC ANNUAL REPORT 2020

MINE HEALTH AND SAFETY COUNCIL ▪ ANNUAL REPORT 2019/20

Name of the Objective (FP02): Ensure efficient and effective financial management. Definition: Ensuring value for money through zero budgeting, strategic sourcing and spending.

Initiative 2: Implement the approved sourcing strategy. The Sourcing Strategy was approved in March 2020 and as a result could not be implemented during the financial year. The late completion of the sourcing strategy was as a result of lack of capacity in Finance Business Unit. Reasons for Variance • The late completion of the sourcing strategy was as a result of lack of capacity in Finance Business Unit. Initiative 3: Develop a zero-based budget • The zero-based budgeting for 2020/21 was revised and approved by Council in January 2020. Initiative 4: Monitor the spending plans in terms of the approved Budget. • Budget was monitored through the spending plans and presentations to the budget committee. • Quarterly budget committee meetings were convened to recommend for budget reprioritisation and to ensure budgets are utilised for priority projects. Most of the under-expenditure was related in the reporting period relates to research and development and events cancellations. Reasons for Variance Most of the under-expenditure was related in the reporting period relates to vacancies, research and development and events cancellations.

2.4 REVENUE COLLECTION

2019/2020

2018/2019

(Over)/Under Collection R’000

(Over) /Under Collection R’000

Estimate R’000

Actual Amount Collected R’000

Sources of revenue

Estimate R’000

Actual Amount Collected R’000

Levies (4 420) Levies were billed in September 2019. 94.23% was collected by March 2020, which was 4.23% more than the 90% target. Performance on collections was as expected by March 2020 due to Mine Visits, as well as attendance at RTF meetings in all Provinces. The new levy model has been rolled out at these meetings, as well as individual mine visits. Billing on the new levy model is expect to be completed in September 2020. Further mine visits were planned before COVID 19 restrictions and other avenues will be explored to achieve the desired results and impact. 78 864 74 313 (4 551) 78 875 74 455

The new Levy Model will take into consideration production, employment figures, commodity risk and exposure to various mining hazards. It consists of fixed and variable elements which are indicated below.

New Levy Model

Funding of MHSC

Rationale for Reviewing the Levy Model

The MHSC Council has approved the new Levy Model that addresses the above mentioned challenges. The approved Levy Model is based on the following principles: • Risk based on past performance – actual published statistics of the previous year • Incorporates risk linked to the various commodities • Information used in the calculation is easily available and unbiased • The Levy Model will take into consideration production figures, employment figures and commodity related factors, exposure to various mining hazards and risks, as mines are not of similar size and type • Fixed and variable elements • Will reward mines which shows improved performance on OHS The advantage of the new Levy Model is that it will be aligned to the ultimate objective of Zero Harm, rewards improvement in OHS, and encourages prevention of accidents and pro-activeness of OHS interventions. It also adopts a balanced approach to mine OHS and it will also incorporate Occupational Health and Safety risk linked to the various commodities in the SAMI. The new Levy Model will be easy to calculate and is linked to the published information from the Annual Report of the Mine Health and Safety Inspectorate (MHSI of the Department of Mineral Resources).

The Mine Health and Safety Council (MHSC) funds its research activities with levies collected from operating mines in the South African Mining Industry (SAMI). The levies are payable in terms of the Mine Health and Safety Act 29 of 1996 (as amended).

In order to continue with world-class OHS research intended to achieve Zero Harm, the current Levy Model needed to be reviewed. As the industry strives toward Zero Harm, the number of accidents are expected to reduce to zero. In addition, the current Levy Model does not reward the mines which have a good Occupational Health and Safety (OHS) record or those that have shown improvement in OHS performance. The current Levy Model is not risk based and therefore not preventative, but more reactive in addressing the OHS issues in the SAMI. This presents a high risk of a below standard OHS research and non- achievement of Zero Harm.

Table 1: Levy Model Elements

Details

Health Safety

Total

Fixed

45% 45% 90%

Variable

5%

5% 10%

Total

50% 50% 100%

Mine Health and Safety Council 145 Western Service Road Western Woods Office Park B7, Maple Place Woodmead Gauteng South Africa Tel: 011 070 4200 Email: info@mhsc.org.za Website: www.mhsc.org.za

Levy Model Rebate

Mines will now be rewarded for good practice and may qualify for rebates of up to 10% of the total levy based on their performance. The Health rebate will be based on the achievement of 2014 Milestone target. The Health risk will take into consideration Exposure to Airborne Pollutants, Noise Exposure and Thermal (Heat or Cold) Stress. The Safety rebate will be based on zero serious injuries and fatalities during the levy period which will also change from 3 years to 1 year.

2014 Milestones and Current Levy Model

During the 2014 Summit, the stakeholders in the South African Mining Industry (SAMI) set a target of Zero Harm, and ensuring that “Every Mine Worker Returns From Work Unharmed Every Day.” With focus of the 2014 Summit Milestone in mind, the MHSC together with its stakeholders have reviewed the current Levy Model. The intention was to align the Levy Model with the goal of Zero Harm.

The current Levy Model is based on the number of fatal and reportable injuries recorded over a 3-year rolling period and the average labour figures for the previous year

The OHS rebate is indicated in the table below.

Table 2: OHS Rebate

Health

Safety

Total

5%

5%

10%

Way Forward

In addition, the new model encourages risk management by mines in order to qualify for the Occupational Health and Safety rebate

In order for the MHSC to raise awareness on the new Levy Model amongst stakeholders, awareness workshops in the SAMI have commenced in preparation for the implementation of the new Levy Model by 31 March 2020 .

299 MHSC New Levy Model Brochure DL.indd 2

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299 MHSC New Levy Model Brochure DL.indd 1

6/27/19 10:31 AM

Picture 6 and 7: New Levy Model

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“EVERY MINE WORKER RETURNING FROM WORK UNHARMED EVERYDAY”