Compensation Fund clamps down on corruption

Tuesday, September 6, 2011

Pretoria - Department of Labour Director-General Nkosinathi Nhleko has warned that the Compensation Fund is tightening its screws to deal with corruption.

"The days when the Compensation Fund is viewed as a sitting duck waiting to be milked dry are over," he said.

Addressing a meeting attended by the Fund's management in Pretoria yesterday, Nhleko said there was a perception that the Compensation Fund was a charity that was waiting to be ripped-off. 

He said the Fund was changing tactics and was intent on dealing decisively with corrupt practices.

The Compensation Fund is currently applying a regular monthly review system that thoroughly monitors payments to detect instances of fraud. 

The move has started to yield results. Currently, there is a case at the Specialised Commercial Crimes Court in Pretoria, in which the accused are appearing for alleged money laundering and defrauding the fund of more than R3 million. 

The Fund is investigating a number of suspicious transactions/claims and hopes to make a breakthrough soon and engage with prosecuting authorities for more arrests. 

The Compensation Fund is a public entity of the Department of Labour. It provides compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, or for death resulting from such injuries or diseases, and to provide for matters connected therewith.

Recently, the Fund announced that it had posted a surplus of R3.6 billion in the past financial year ended in March 2011. 

It raised R5.3 billion assessment revenue, compared with R4 billion in the previous financial year. Its assets grew from R24.6 billion during the 2009/10 financial year to R28.2 billion this financial year. The Fund employs more than 600 people.

Meanwhile, the Fund was on the throes of a restructuring, which would see it decentralising its operations to provinces. 

Nhleko reassured staff that the organisational review "does not have ulterior motives", but to ensure that all South Africans enjoy access to Compensation Fund services. 

He hoped the process would be open and transparent and would be conducted in consultation with the unions. 

"The Fund will soon announce timeframes on the unfolding process. A new migration plan is currently being negotiated with organised labour," he said.

The new structure has been approved by both the Minister of Labour Mildred Oliphant and the Department of Public Service and Administration. 

Compensation Fund Commissioner Shadrack Mkhonto said the way the process would be conducted was that all staff, including contract workers, would be accommodated in the new structure. 

He said only key and strategic positions where the Fund lacks expertise would be advertised. He added that restructuring within the Fund was not new.

Mkhonto said in the past, the department had successfully embarked on a process to amalgamate the various Compensation Funds, including those of the former Transkei, Bophuthatswana, Venda and Ciskei (TBVC states) into a single fund. 

He committed to engage with the unions to complete the restructuring framework. 

"The way forward is to engage the unions on the implementation process," he said. - BuaNews

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