Numsa mobilises members to shut down RAF offices
The National Union of Metalworkers of SA (Numsa) is set to embark on a “national shutdown” of all Road Accident Fund (RAF) offices on Thursday, to demand the removal of CEO Collins Letsoalo for alleged “gross incompetence” and presiding over the “disastrous” state of affairs there.
The RAF is among state organs hollowed out by years of mismanagement, huge backlogs and corruption. The fund handles almost 100,000 claims each year and is subjected to, almost daily, fraudulent and overinflated claims.
In 2005, the RAF — which was set up in 1996 to compensate victims of traffic accidents — faced 185,773 claims, incurring legal expenses of R941m. By 2018, with a reduced number of claims of 92,101, legal costs skyrocketed to R8.8bn and reached R10.6bn in 2019.
In November 2023, the Special Investigating Unit announced it had recovered more than R317m the fund erroneously paid to lawyers and was also investigating claims that the RAF lost millions more to maladministration and corruption.
The total amount of default judgments issued against the RAF for cost and fees from 2018 until the second quarter of 2023 is R4.7bn.
In December, transport minister Sindisiwe Chikunga called on the RAF and auditor-general Tsakani Maluleke to reach an “amicable solution” outside the courtroom over their legal rows regarding a “technical accounting dispute”.
At the heart of the dispute was the fund’s controversial decision to adopt new accounting standards, which the auditor-general said had resulted in it understating its liabilities by about R300bn compared with the previous year.
Numsa general secretary Irvin Jim said the fund had been served with a 48-hour strike notice and was mobilising members for a shutdown on Thursday. The union is expected to hand over a memorandum of demands to Chikunga listing all problems at the organisation.
“We are demanding that RAF CEO Collins Letsoalo be removed because of the disastrous state of the entity. The RAF is a public entity whose core function is to compensate victims of road accidents.”
He claimed the fund outsourced critical operations, including the call centre, to private companies for hundreds of millions of rand; RAF violated the Protection of Personal Information Act because “personal information is in the hands of a third party”; and there was an “unbearable backlog of unprocessed RAF claims” due to a lack of claims handlers.
The union leader said at least 200 claims handlers had remained on suspension since 2022 when they were accused of fraud by the management with “no disciplinary action against them”.
The RAF intended to retrench workers because it had procured an automated system that cost more than R900m, which would make claims handlers and claims admin assistants obsolete, said Jim.
“Even now, the failure by the RAF to pay out claimants on time means that the assets of the institution are routinely attached by sheriffs of the court, so that they can be sold in order to pay monies owed. As a result, desks, chairs and office equipment is attached. Workers sit on boxes or on the floor when doing their work, because there are no desks or chairs,” he said.
No comment from RAF spokesperson Boniswa Matshoba has been received.