Cape PLC to Compensate Foreign Plaintiffs
South African asbestos claimants have prevailed in their legal battle against companies which mined and processed asbestos in the Northern Cape and Limpopo Provinces. On March 12, 2003, Cape plc, formerly one of the biggest UK asbestos groups, and Gencor Ltd., which took over many of Cape’s asbestos operations in 1979, signed settlement agreements totalling £10.7 million2 (approximately $16.5 million) with lawyers representing injured South Africans. The money will be divided amongst 7,500 members of a group action brought in England by people who were occupationally or environmentally exposed to asbestos in South Africa. Ngoako Ramathlodi, Premier of Limpopo Province, explained: “Once the money is divided amongst the claimants, it will amount to next to nothing. But we shall settle in acknowledgement that Cape has paid up and acknowledged its wrong doings.” UK solicitor Richard Meeran, who pioneered the plaintiffs’ case, agrees that a smaller settlement had to be negotiated with Cape because of the company’s precarious situation; the settlement does not reflect the true financial value of the claims. Meeran believes that, in certain respects, the new settlement is an improvement on the previous one for most of the existing claimants:
Cape will pay a lump sum of £7.5 million by March 19, 2003;
as there is no provision in this agreement for future claims, no trust fund will be set up; this means that payment to claimants should be distributed more quickly;
because of the provision of extra funds from Gencor, the 7,500 claimants are likely to receive approximately the same amount as they would have received under the previous scheme.3
Many observers agree that this case has serious implications for other multinationals. Cecil Skeffers, representing the NGO Concerned People Against Asbestos, said: “while we can’t forget the effects Cape’s operations had on thousands of people, we are delighted that Cape have finally made a settlement. We hope this will be an example to other multinational companies who practice in similar ways.” A year ago, Richard Meeran said: “Central to the Cape case was the principle that multinational companies undertaking hazardous operations overseas, should be held legally accountable for resultant injuries. The largest multinationals are wealthier than many nations, yet unlike states they are not being subject to international law. This settlement is an example not just of Cape being held to account by these victims, but also a salutary warning to any multinationals which apply ‘double standards’ in developing countries. They must now face up to their responsibilities or bear the financial and other consequences.” The settlement referred to in Meeran’s statement was reached in December, 2001; under that agreement, Cape promised to pay the sum of £21 million over 11 years to the Hendrik Africa Trust for distribution to asbestos claimants. Although the signed agreement was approved by a London Court, no money was ever received from Cape.
This time round the plaintiffs’ lawyers were not so trusting. A key aspect of this agreement is that Cape pays the cash into a designated bank account, held by their solicitors, by March 19, 2003. Gencor’s £3.21 million ($4.82 million/Rands 42.5 million) contribution must be deposited into an account managed by their attorneys by June 30, 2003. The hard-won settlement is the result of six years of legal actions in the High Court, the Court of Appeals and the House of Lords. Cape, which had never before paid compensation for the human or environmental damage it had done during more than 80 years of asbestos operations in South Africa, fought a vicious and determined legal battle going as far as accusing Richard Meeran of “an abuse of process.” Solicitor Anthony Coombs, whose firm represented more than two thousand asbestos victims, is relieved: “This has been the most hard fought and difficult case my firm has ever been involved in. I am very pleased it has ended with meaningful payments to our clients.”
This deal is part of Gencor’s global strategy to resolve its asbestos problems including those arising from the operations of its subsidiary: the Griqualand Exploration and Finance Company (Gefco). On March 12, 2003, it was also announced that Gencor, formerly one of South Africa’s biggest conglomerates, had settled a second asbestos class action; this case was brought on behalf of 1,600 miners by the law firms of Ntuli Noble & Spoor (South Africa) and Thompsons (UK). Under the terms of this agreement, Gencor will pay R448 million (£37.5m / $56.25m)4 by June 30, 2003 into a new Asbestos Relief Trust which, for the next 25 years, will pay out compensation to those injured by Gefco’s asbestos operations. Once this money has been paid, Gencor will be free to proceed with plans to “unbundle” its shares; remaining assets will be sold and the proceeds will be distributed to shareholders.
Claimants' solicitor Richard Spoor is determined to enlarge the Trust through negotiations with mining companies such as Eternit (Switzerland) which is "believed to have liability for their asbestos operations in South Africa." Eternit owned Kuruman Cape Blue Asbestos and the Danielskuil Cape Blue Asbestos companies. Should Spoor succeed in his action against Eternit, the implications will not be lost on Eternit's uncompensated asbestos victims in Brazil, Peru and elsewhere. Spoor and his colleagues are "also looking at other companies that benefited from the asbestos industry. This is not purely a legal issue. Companies also have a moral obligation to those who are suffering." Other potential contributors to the Asbestos Relief Trust include Lonmin, Xstrata and Anglo American.5 Whatever happens, it will be too late for mineworker Herman Kubari, the first of the 1,600 applicants in the Johannesburg case. He died of mesothelioma on January 25, 2003; he was forty-nine years old.
March 15, 2003
1 Other articles on this website about the Cape case are:
Patience Runs Out as Cape Reneges on Settlement Agreement,
Delays by Cape Cause Anxiety to Claimants,
South African Claimants Briefed on Cape Asbestos Settlement,
UK Victory for African Asbestos Victims,
House of Lords' Victory for Human Rights.
2At the Rand/Stirling exchange rate of March 12, 2003.
3 For more details on the technicalities of this settlement, please see: Breakthrough for Cape PLC Asbestos Victims, a March 13, 2002 press release on the Leigh Day website: http://www.leighday.co.uk
4 This is the largest group action claim in South African history.
5 Lonmin was the holding company for Lonhro which was South Africa’s fourth biggest asbestos producer between 1975 and 1986. Lonhro’s Emerentia and Wandrag mines were bought by Glencore in 2000 and subsequently sold to Xstrata, a London-listed company. Anglo American had a substantial stake in Charter Consolidated, the company which controlled Cape until the 1980s.