There is a flicker of hope for the 6000 ex-miners who were recently axed from BCL following government’s decision to put the mine on provisional liquidation – finally the process of payments of their benefits has begun.
Appointed Liquidator Nigel Dixon Warren has confirmed and started the processing of paying the benefits from his jurisdiction which includes mainly terminal benefits, leave pays and bonuses. The miners’ minds have been settled, amid all the struggle of accepting the reality of job loss and the fear of pocketing next to nothing in the pension payout as BCL Staff Pension Fund (BCLSPF) and its asset manager AON announced the relatively good news.
Speaking this week Monday (December 19) in Selibe Phikwe Town Hall, Mr John Gaborutwe, Chairman of the BCL SPF told thousands of gathered former BCL employees that their asset manager, AON Botswana has began processes to roll out payment for their pension benefits, adding that however because of the large volume of payments to roll and issue out, the undertaking will take time.
According to Gaborutwe the Fund which was established 5 years ago has over 4300 members who worked at the Phikwe mine.”This is the money from our members who contributed five percent of their monthly salaries to preserve with us, together with the ten percent of their salaries contributed by the employer which was BCL Limited,” explained Gaborutwe.
When quizzed about whether the cash strapped and liquidated BCL has paid all of the ten percent as per employer- employee contracts, the Fund Chairman confirmed the company has indeed transacted their contribution to the Staff fund. Confirming that BCL held their end of the deal, AON Botswana Pension Consultancy Deputy Director, Peter Hikhwa told the Fund members that BCL has been paying the 10 percent every month, adding that in the cases of delay the oversight body NBFIRA was roped in to make sure the law and agreement was observed.
“According to NBFIRA regulations the employer pays out their contribution to the Pension Fund at least not beyond the 21st of the following month, and BCL has been meeting that deadline,” he said .Hikhwa explained that the recent payment was paid by the liquidator following the October 2016 final payments which came just before workers’ contracts were terminated on the 31st of the same month.
According to Hikhwa, pension payments will be made in two phases, the first encompassing members over 50 years and those that have reached the 60 years retirement age. He explained that the group will receive a third of their pension tax free and will have the option of a complete 100 percent payout. Hikhwa further said that the threshold houses one percent of 60 year olds, nine percent of 50-55 years old and 11 percent in the 55-59 age group making it to account for 21 percent of the total membership.
Hikhwa further unpacked that the other threshold comprises members under the age of 50 years who will receive one third of their pension, 33.3 percent of that taxed, adding that according to the contract and pension agreements two thirds of the under 50s will only be paid once they reach retirement age being from 50-60 of which he noted would have generated interest. “In a case of the unfortunate event of death, your next of kin as you provided to us, as well as your family will be paid the benefits in your absence,” he confirmed to the young pensioners.
The representative from the Fund Manager also highlighted that cumbersome processes for the liquidation process which includes providing information about retained BCL employees before the Pension Fund roll out processes can begin are still being carried out. “Once the liquidator clears with us which employees he retained, we will now engage Botswana Unified Revenue Services (BURS) to clear with them.” He added that the process is expected to run until February.
According to Hikhwa new accounts will be created specifically for the pension payment. “We are in talks with a bank so that we create fresh accounts which will be active for 3 years, the account will operate like any other current account and will incur bank charges and tariffs like any other bank account,” he explained. The AON Pension Consultant revealed that the fresh account creation is necessary to fast track payment under a uniform integrated system, adding that once the money is paid beneficiaries can transfer the money to any other account they have and juggle with their hard earned cash as they deem fit like money in any other account. Furthermore Hikhwa told the gatherers that members can also transfer their remaining pension to other funds in an event they get new employment elsewhere or where ever they deem fit and qualify so.
Hikhwa concluded by observing that members will be notified once the processes with the liquidator, BURS and the contracted Bank are concluded. When Weekend Post quizzed him about the Bank which they will engage, the AON officer noted that the information can not be disclosed as the talks are not complete yet. “Once we seal the talks with the bank, the pension recipients will receive information of their pension standing, the one third and remaining two thirds thus the total pension they have gathered and how it was calculated as per the agreement,’’ he said.
He said that the ex miners should expect the money to be credited into their new accounts at least by March next year. Hikhwa revealed that they will be using a payment policy similar to that of retrenchment. BCL SPF Chairman, Gaborutwe told Weekend Post that the Fund was established in June 2011 and has over 4 300 members, adding that according to the audited report released in March 31st 2016 the fund was seating at P227 million. “We are a new fund, only 5 years old and we couldn’t have gathered much, but we were still developing ways to expand our portfolio and generate more interest for our members unfortunately the mine met its demise before we could achieve all that.”
Gaborutwe further noted that however, from March to date they expect the fund to have expanded to over P250 million from interest, “But the approximation figures we are receiving from our Fund Manager AON Botswana, which has been our pension management firm from the beginning, indicate we will pay out over P150 million, meaning about 100 million will remain for more interest generation and expansion,’’ he concluded.
Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.
Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.
She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”
Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.
On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.
“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.
One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.
The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”
The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.
Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.
Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.
The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.
The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.
Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.
This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.
He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.
Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”
He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.
Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.
“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.
In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”
In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.
He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.” Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.
Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.
He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”
Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.
“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.
“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said. Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.
Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.