Transformation in the Forestry Sector: briefings by Department of Agriculture, Forestry and Fisheries & SAFCOL

Agriculture, Land Reform and Rural Development

18 June 2013
Chairperson: Mr M Johnson (ANC)
Share this page:

Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF) briefed the Portfolio Committee on Agriculture, Forestry and Fisheries on the Forest Sector Charter Council, a Section 21 company launched in 2008. The Council’s main objective was to facilitate, oversee, encourage, monitor and report on the implementation of the Forest Sector Charter, which extended economic opportunities and benefits to previously disadvantaged black groups. The Council reported to the BEE Advisory Council, Department of Trade and Industry (Dti) and DAFF on progress on ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. The sectors were performing well in socio-economic development, enterprise development, preferential procurement and ownership. There was poor performance on management control and employment equity, and room for improvement on skills development.

The main challenges were insufficient data collection, no prescribed methods for action against non-compliance, land availability, the pace of settling forestry-related land claims, zero import tariffs, and insufficient funding.

The South African Forestry Company Limited (SAFCOL) then briefed the Committee on the SAFCOL activities and transformation initiatives. It was a signatory to the Forestry Transformation Charter and maintained a level 2 B-BBEE rating. Its strategic objectives were financial and commercial sustainability, sustainable forestry management (requirements of South African law and international independent certification), and retention and expansion of the amount of land used for forestry plantations. Its main subsidiary was Komatiland Forests (KLF) in Mpumalanga, Limpopo and KwaZulu-Natal provinces, spread over 187 320 ha of land.   Industrias Florestais De Manica (IFLOMA) was another subsidiary of SAFCOL in Mozambique, in partnership with the Mozambican government, and covered 16 411 ha. It had processing facilities at Messica, three plantations at Penhalonga, Bandula and Rotanda, as well as a warehouse in Maputo.

SAFCOL had privatisation transaction packages: SiyaQhubeka Consortium in KZN since 1 October 2001, Singisi Forest Products (Pty) Ltd in the Eastern Cape North, since 1 August 2001, Amathole Forestry Company (Pty) Ltd in Eastern Cape South, and MTO Forestry (Pty) Ltd in the Southern and Western Cape. The Department of Public Enterprises (DPE) decided where retained shares would be spent.

Unresolved land claims were a key strategic risk of the business and it was in SAFCOL’s interest to sign social compacts with communities. The slow progress on claims was attributed to conflicting legislation and the lack of an approved settlement model with respect to state forest land operated by SAFCOL. Only one of the SAFCOL-owned land claims, the Shannon Plantation, had been settled.

SAFCOL had started paying approximately R46 million per annum on land lease rentals which would have a huge impact on SAFCOL’s business going forward. SAFCOL had not paid rental for land until it had met with DAFF in 2011 to set up a trust for the community’s benefit.

The DPE would support SAFCOL with improving its ratings on employment equity and skills development, as these factors impacted on the industry going forward. Regarding minority shareholding sales/transfers, the DPE was in discussions with the Department of Rural Development and Land Reform (DRDLR) in terms of speeding up the process for a special-purpose vehicle to house shares and to ensure financial support to SAFCOL to maintain some of the shareholdings.

Members requested a report detailing each scorecard element against each forestry sector so that the effects and patterns of transformation could be appreciated; what DAFF was doing to improve the scorecard for in terms of management control and employment equity and exactly where and how employment equity was skewed; and if the Council was in a position to enforce the codes. Members suggested inventing a ‘carrot’ to entice compliance and that correcting the tariff issue might enhance compliance. A meeting between the National Agricultural Marketing Council (NAMC) and the industries affected by imports would assist in finding out what could be done to protect the industry. They also suggested positioning primary producers in the value chain and manufacturing furniture locally, rather than importing furniture.

Members asked if the forestry industry was making money; what was being done to improve profit, what the rationale would be for not privatising SAFCOL; why SAFCOL had not paid lease rental in the past, and how paying it impacted on SAFCOL; for the annual statements SAFCOL’s Community Trust and the formula for rental income, how the DRDLR identified the beneficiaries and which communities were beneficiaries of the trust; for clarification as to whether R46 million per annum rental was paid by SAFCOL into the Trust, after which it was paid via DAFF to the communities; and why the trust account was at the Reserve Bank.

Members were interested to know if the land availability problem was linked to insufficient funds; why the 20 000 ha in Caledon was still awaiting plantation; where Forestry could be expanded in South Africa; what the view of the presenters was with regard to the planting of indigenous, compared to commercial, trees; why the Shannon Plantation land was only settled, not finalised; and what the agreement was between the state and community with regard to the community involvement in the plantation.

Members asked what type of training was offered; if the 290 jobs created by the SAFCOL SMME in 2012 were permanent or temporary; how the Council monitored land agreements between large companies and chieftains of land; who owned SiyaQhubeka Forests (Pty) Ltd, and if there was fronting; how many communities benefited from SAFCOL; how was the Land Claims Commission dealing with claims in that area which were lodged years ago; and why it was taking so long to give state land back to the communities.

The Chairperson requested that by the first week in August, the departments involved should have collaborated and coordinated their plan for transformation and beneficiation, and should report back to the Committee with specific dates for action.
 

Meeting report

Forestry Sector Charter Council
Ms Zodwa Phakedi,, Executive Director, DAFF, said that the main objective of the Forest Sector Charter, which was launched in 2005, was to extend economic opportunities and benefits of the forestry sector to the previously disadvantaged black groups within the subsectors of growers, contracting, fibre, sawmilling, pole and charcoal. The main responsibility of the Forest Sector Charter Council (the Council), a section 21 company launched in 2008, was to facilitate, oversee, encourage, monitor and report on the implementation of the Charter. The Council reported to the BEE Advisory Council, Dti and DAFF on progress of industry and government on the Charter obligations. It solicited seven scorecard elements, namely; ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.

The average sector B-BEEE score for 2011/12 was 66.7 points -- a level 4 contributor – which was an  improvement from the 2009/10 score of a level 5 contributor. The sectors were performing well in socio-economic development, enterprise development, preferential procurement and ownership. There had been improvement in skills development but this was still at 41% of the target score. There was poor performance on management control and employment equity.

Sector Scores:
The Large Forestry Sector
Score 69.02 points, level 4 (2012) - Mondi Forests, South African Forestry Company, Yorkor, MTO Forestry, Masonite (Africa), Sappi Southern Africa, Hans Merensky Holdingsand Amathole Forestry Company.  The(balance of companies was made up of government medium/small scale timber growers.

The Contractors Sector (QSE)
Score 79.37 points, level 3 (2012) - estimated 300 forestry contractors: 150 medium and some large enterprises and 150 exempt micro enterprises.
 
Pulp and Paper Companies Sector
Score 75.39 points, level 3 and consisted of SAPPI and MONDI.

Board Producers
49 points, level 6 - PG Bison, Masonite (Africa), Sonae Novobord

Chipping Plants
Score not listed - NCT (Chincell), NRB Fibre & Durban woodchipping,  Mondi (Silvacell), TWK (CTC)

Large saw milling groups
Score 62.18 points, level 5 - York Timbers, Hans Merensky Holdings, Cape Timber Resources, Komatiland Forests, Rance Timbers, Sappi

QSE  & EME sawmills
Score  67.43 points, level 4 - There were about 250 operating sawmills.

Pole Treaters
Score 73.03 points, level 4 - Woodline Timber Industries, Harding Treated Timbers, Natal Forest Products. There were few large companies. The balance was very fragmented.

Charcoal
N
o score listed - Three large producers: E & C Charcoal, Charka & Braai, and Barbeque International. The balance of producers was fragmented.

Transformation challenges included: insufficient data collection -- for example, no data for chipping plants in 2012; reports by most enterprises in the charcoal sub-sector presented a challenge; some accreditation was still done through the generic scorecard; the weighted scores / allocation of one scorecard; and no prescribed methods for non-compliance.

Other challenges to the forestry sector were the availability of land for forestry activities, the pace of settling forestry-related land claims, the pace at which small, micro and medium enterprises (SMMEs) were upgraded to large enterprises; and the introduction of zero tariffs, which lowered entry barriers to South Africa - most outside countries’ forestry industries were subsidised, and therefore their forestry-related products were cheaper; insufficient funding for Charter undertakings, inaccessible funding from funding institutions; insufficient funds for environmental impact assessments (Dti & DAFF were assisting); the water-use licence application process; the increase in temporary unplanted areas, the exclusion of other key stakeholders in the Charter Council; and the marginalised forestry profile.

South African Forestry Company Limited (SAFCOL)
Ms Nomkhita Mona, Group Chief Executive Officer, SAFCOL, said that SAFCOL was a state-owned entity, overseen by the DPE.  It was a signatory to the Forestry Transformation Charter and maintained a level 2 B-BBEE rating, with a year-on-year improvement: 85.77% (2011); 89.2% (2012) and 93.25% (2013).

Its strategic objectives were: financial and commercial sustainability - to achieve returns which were acceptable to the shareholder (SAFCOL reported an Operating Profit of R177 million in the 2011 financial year) and to manage the business and to engage in projects that preserved gearing and liquidity ratios; sustainable forestry management - to manage South African forests in a sustainable manner consistent with the requirements of the South African law and international independent certification; and the retention and expansion of the amount of land used for forestry plantations.

SAFCOL aimed to enhance its developmental contribution by playing a leading role in the transformation of the economy, as envisaged in the Forestry Charter; implementing marketing policies that improved access to supply SMMEs, B-BBEE firms and new entrants; and continuing with current and new community development and investment projects in rural communities close to its operations.

SAFCOL’s main subsidiary was Komatiland Forests (KLF) in Mpumalanga, Limpopo and KwaZulu-Natal provinces, consisting of 18 plantations, managed as 15 operational units and spread over 187 320 hectors of land.  The Timbadola Sawmill, in Limpopo, was designed for an intake volume of 120 000 m³ per annum (2013). KLF had two custom cut processing operations in Mpumalanga. Combined intake volumes for the two operations was about 170 000 m³ per annum (2012).

Industrias Florestais De Manica (IFLOMA) was a subsidiary company of SAFCOL operating in Mozambique in partnership with the Mozambican government (20% ownership, with KLF owning the other 80%.   IFLOMA also had processing facilities at Messica, three plantations at Penhalonga, Bandula and Rotanda, as well as a warehouse in Maputo. IFLOMA plantations covered 16 411 ha.  

The status of SAFCOL’s privatisation transactions was:
SiyaQhubeka Consortium, KZN, implemented on 1 October 2001. To date, SAFCOL had sold 75% of the shares in SiyaQhubeka Forests (Pty) Ltd and the remaining 25% was earmarked for disposal.

Singisi Forest Products (Pty) Ltd, Eastern Cape North, implemented on 1 August 2001, and to date had sold 84% of the shares, with 16% earmarked for disposal.

Amathole Forestry Company (Pty) Ltd, Eastern Cape South. SAFCOL had sold 84% of the shares and had 16% available for disposal.

MTO Forestry (Pty) Ltd, Southern and W Cape:. SAFCOL had also sold 84% of the shares and was holding 16% for disposal.

The DPE would decide where the retained shares would be disposed of.

SAFCOL had not paid rental for land until it had met with DAFF in 2011 to discuss rental, and to set up a trust for the community’s benefit.  DAFF handled the rentals issues and DRDLR would identify the beneficiaries. It was decided that SAFCOL would pay approximately R46 million per annum in rental. This amount would be market-related, and would be negotiated, as it had a huge impact on SAFCOL’s business going forward. SAFCOL had started paying the lease rentals.

Unresolved land claims were a key strategic risk of the business and it was in SAFCOL’s interest to sign social compacts with communities. Slow progress with regard to the settlement of land claims affected 61% of the state land managed by KLF.  This was attributed to conflicting legislation and the lack of an approved settlement model with respect to state forest land operated by SAFCOL. Only one SAFCOL-owned claim, the Shannon Plantation, had been settled.

R8.1 million had been spent on socio-economic development, and 73% of this amount had been spent on infrastructural projects. SAFCOL had launched timber-frame structures for school classrooms and accommodation dormitories and completed 11 community projects during the 2012 financial year (see attached document for detail on community projects and learner initiatives).

Mr Mohlala Tabudi, Director: Financial Analysis, DPE, added that although SAFCOL was one of the most transformed of SOEs, the DPE would support SAFCOL with improving its ratings on employment equity and skills development, as these factors impacted on the industry going forward. Regarding minority shareholding sales/transfers, the DPE was in discussions with the DRDLR in terms of speeding up the process for a special-purpose vehicle to house shares, and to ensure financial support to SAFCOL to maintain some of the shareholdings.

The Chairperson commented: “In a nutshell, SAFCOL was running a business”.

Mr Tabudi replied that it was a balanced equation. To ensure transformation, SAFCOL had to make money.  From 2010 to 2012, SAFCOL had run at a loss, while it continued to invest in socio-economic projects, with priority on the needs of the country rather than making money.

Discussion
The Chairperson asked for a report detailing each scorecard element against each forestry sector, so that the effects and patterns of transformation could emerge.

Ms A Steyn (DA) asked what percentage of the forestry industry SAFCOL represented.

Mr Tabudi replied that forestry accounted for 1% of the land area of South Africa. Pulp and paper was the largest sector and accounted for 65% within forestry. The other industries were charcoaling, saw-milling and the other sectors displayed in the presentation. It was a small industry compared to others but without intervention to reduce imports, it would struggle to continue as it was.

Ms Steyn asked what DAFF was doing to improve the scorecard for forestry in terms of management control and employment equity, and exactly where and how employment equity was skewed.

The Chairperson asked if the Council was in a position to enforce the codes and how far progress was in that regard.

Mr Pasco Dyani, Chairman: Forest Sector Charter Council, replied that the Council’s role was to oversee, encourage, facilitate and monitor. The Charter was composed of labour, communities, industries and government, and management control was doing poorly on the scorecard. Industry had to account, but discussions about naming and shaming were heated and the Charter did not have a ‘stick’ to enforce programmes to transform. The Council was also engaging with DAFF around extending Charter representation to traditional leaders.

The Council had questioned how the Charter, even at level 1, was changing people’s lives - how transformation was causing them to become better off -  and had decided to commission an outside reviewer to lead the review of the Charter for transformation.  In order to see meaningful transformation, there had to be a change in management control scores. There was nothing the Council could do but to engage robustly with the industry parties at the quarterly meetings in Johannesburg. Some players were not keen on transformation and would not come to the party. The Council could encourage up to a point, but had to find a way to bring them to the party. Even pulp and paper management control scores had not improved over the past three years. 

Ms Phakedi said that each sub-sector had to report in terms of the seven elements through a service provider, but DAFF planned to introduce its own verification system whereby it would compile the report itself. The current problem was that DAFF had not been probing enough to get to the underlying information. The Chairperson was correct: the system should be able to say, for example, how many black females, disabled people, and youth occupied high levels in Mondi and Sappi and how they had benefited from transformation over the five years since the launch of the Charter. The Charter Review process aimed to close this gap. The Council’s jurisdiction in terms of non-compliance was limited. It was facilitating processes between the communities and role-players. Whereas on paper, the company was level 3, in reality there was no transformation and the communities were suffering. The terms of reference for the review process were ready and it was expected to be completed within eight months. The service provider had not yet been appointed. A workshop would be held in four months to review the scorecard elements and hopefully, with the help of government and funding, the scorecard would enable the Council to have that ‘stick’. Until now, the Council had limited funding and a limited mandate.

The Chairperson commented that the problem with government was in identifying a problem and painting a long-winded picture which took months, rather than identifying a solution and acting on it.

Ms Steyn said that the ‘stick’ would not necessarily work. There had to be a carrot to entice compliance. Perhaps the tariff issue would work. Another issue was to assist primary producers by putting them in the value chain. She questioned why South Africa was importing furniture, rather than using our own raw material.

Dr Ntabiseng Motete, Deputy Director-General: DAFF, replied that Dti and Treasury had put together competitive packages. She believed that SAFCOL benefited from furniture manufacturing packages. DAFF did not benefit from the packages and was not involved in beneficiation of the plantations that it managed.

Mr Dyani agreed that the review process was long overdue and it would be fast-tracked. Two years down the line, the Council still did not have a ‘stick’. All the stakeholders had to be consulted to ensure buy-in.

The Chairperson asked if the land availability problem was linked to insufficient funds and why the 20 000 ha in Caledon was still awaiting plantation.

Mr R Cebekhulu (IFP) said that he understood that while the Working for Water project had been clearing plantations for water, forestry was looking for land to further its business. He asked where forestry could be expanded in South Africa.

Ms Mona replied that SAFCOL had less than 10% of the total planted area in South Africa, which was 1.3 million ha. It was important to continue to look for land. SAFCOL was looking into planting in the Eastern Cape and also outside the country in the Southern African region.

Mr Cebekhulu asked what the view of the presenters was with regard to the planting of indigenous, compared to commercial, trees.

Ms Mona replied that SAFCOL took the environmental laws seriously and complied with the laws. Where forests were not entirely indigenous, SAFCOL tried to mitigate the effects thereof.

Ms Steyn asked if the forestry industry was making money, as this affected implementation and the ability to get funding. What was being done to improve profit, and why did zero tariffs exist?  There were many industries that were struggling - sugar and poultry for example, due to import tariffs. She suggested meeting with the NAMC,together with the affected industries, to find out what could be done for them.

Mr Dyani replied that the Council did not have a balance sheet for the industry. Government contributed 60% of the Council’s budget and the industry contributed 40%. Some industries could not meet their 40% commitment. For example, R4 million per annum was the budget, but the industry pleaded poverty and was unable to contribute its 40% of the budget. The Council had raised the issue with government.  With due respect, the Council could not enforce transformation of the industry and speak for the Charter, unless it was allocated adequate funding.

Ms Mona added that the industry was feeling the pinch as the market had shrunk, but the forestry industry was cyclical. Some of the bigger players, such as pulp and paper, had to change strategy to adapt to the market. The industry needed to be protected. A meeting had been set up with the Dti to discuss the zero import tariffs.

The Chairperson said that privatisation of the state-owned SAFCOL appeared to be an on-going process.  During the privatisation process, communities were expecting to receive ‘10%’ from SAFCOL, yet it had not been implemented by the DPE and they continued to live in squalor.

Mr Tabudi replied that since the first privatisation, over the past five years, the DPE had been held up by the DRDLR in terms of them finalising their own internal processes of getting a vehicle that would house the shares. Benefits for communities had been identified and DPE had suggested to DRDLR that they should use alternative options and proposed using certain vehicles while they were still dealing with internal issues. DPE had to maintain the shares through SAFCOL’s balance sheet and the delay would impact on the original claim amount.

The Chairperson asked if the amount would be the current value, or the value at the time when privatisation took place.

Mr Tabudi replied that it would probably be in terms of the current value, and would depend on a number of factors, including whether SAFCOL would be privatised. Treasury would advise on the number of shares and the value of the shares to be transferred.

Ms Steyn asked what the rationale would be for not privatising SAFCOL. Settlement of land claims affected 61% of the state land managed by Komatiland Forests and yet some land claimed by a community stayed in the hands of the state. She questioned why it took so long to give state land back to the communities, as she wanted to be sure that the state was not holding on to the land to possibly keep the land from the communities again. Statistically, claiming private land for communities had been simple.

Mr Tabudi replied that privatisation was not taking place. The DPE was finalising the entity model and role and had consulted with DAFF, Dti, Treasury and the Economic Development Department and would be finalising on SAFCOL within the financial year.

Ms Mona added that the issue of land claims was sitting with the DRDLR, and SAFCOL did not have the mandate to settle. It was true that SAFCOL was vulnerable, as it rented 61% of state land, which could be withdrawn at any time, but SAFCOL was ready and the matter had to go forward. SAFCOL’s approach was two-pronged. The land should be given to the claimants, SAFCOL must receive rent and the communities must be part of the value chain and benefit. SAFCOL asked for the Committee’s support, together with DAFF and Dti, to push for the DRDLR to act as fast as possible.

Ms Steyn said that she could understand the rationale for the state keeping land if an airport runway was on it, but not why the state should need to own plantations and not want to transfer that land to the people ‘it was stolen from’ as soon as possible.  

Ms Steyn asked for financial statements of SAFCOL’s Community Trust to ensure that DAFF transferred the money to the communities as per its mandate. She also asked for the annual statements and the formula for rental income, which communities were beneficiaries, and how far DAFF was in the process of agreements with communities. She also asked for clarification as to whether R46 million per annum was paid via SAFCOL into the trust, after which it was paid via DAFF to the communities. She asked why, of all places, the trust account was at the Reserve Bank.

The Chairperson added that the DAFF may wish to state the period over which the rental income accrued, and if it was to be paid annually or bi-annually, etc.

Dr Motete replied that, with the approval of Treasury in October 2010, DAFF had established the Land Restitution Trust into which rentals were paid to DAFF. The fund account was at the Reserve Bank, not at DAFF, so that the financial statements were handled separately. As of March 2013, R213 million was reflected in the financial statement. Since the launch of the trust, R91 million had been paid into the account. There were some outstanding payments, and compliance with Treasury regulations was a requirement. She did not have the formula for the rental income. The full detail would be provided to the Committee.

Ms Mona added that the basis for the formula was scientific. It would be submitted to the Committee.

Ms N Twala (ANC) asked why SAFCOL had not been paying a lease rental before, and how paying it impacted on SAFCOL.

Ms Mona replied that the reason for SAFCOL not paying rental from 1993, when it came into being, was because there had been no agreement on the table. There had been proposals from Cabinet with regard to the formulae, and the agreement had now been tabled.

Ms M Pilusa-Mosoane (ANC) asked if the 290 jobs created by the SAFCOL SMME in 2012 were permanent or temporary.

Ms Mona replied that the jobs were permanent and growing with enterprise development, whereby the value chain drove the growth of the business. As long as the contract was available, the jobs were there.

Ms Pilusa-Mosoane asked what type of training was offered.

Dr Motete replied that DAFF looked forward to the restructuring of SETA to include training on forestry to improve the skills level.

Ms Mona added that SAFCOL trained people on many aspects of skills development, which included carpentry, driver education, fire-fighting, horticulture, log-scaling and all forestry-related courses. Training was available at no cost and was focused primarily on the youth and unemployed. Some of the courses were accredited.

The Chairperson asked how the Council monitored land agreements between large companies and chieftains of land. On oversight visits, Members were told that these were bad agreements which did not benefit the communities.

Ms Steyn asked why the Shannon Plantation land was only settled - not finalised. She assumed that it had not been transferred to the community. She asked what the agreement was between the state and community with regard to the community involvement in the plantation.

Ms Mona replied that the SAFCOL-owned land claim had been settled, but it had stalled at the community level as they wanted to peruse the agreement before finalising it. The plan for use of the land was that they would continue with forestry and also partner with another private sector entity.

Ms Pilusa-Mosoane asked for elaboration on the amounts paid to the Community Trust, how long before the Trust would benefit communities, and how DRDLR identified the beneficiaries.

Dr Motete clarified that it was the legislative mandate of the Minister of DAFF to establish a vehicle whereby the fund for rental could be collected, managed and invested. The trust was at the Reserve Bank. Otherwise, DAFF would not be directly involved in private investments on behalf of the beneficiaries. There was currently a balance of R213 million after the disbursement of R91 million was made to the communities. Disbursements were made in alignment with the stipulated rules and responsibilities DAFF had, together with the communities, through MOUs signed between DAFF and each beneficiary community. SAFCOL was R46 million in arrears, and this outstanding amount would be included in the amount collected and then disbursed to communities. Details on figures would be submitted to the Committee in writing.

The presentation was pitched at transformation, but SAFCOL could go into detail on the beneficiation process as part of the roadmap to repositioning forestry as a sector and could indicate the establishment of furniture manufacturing plants around forestry plantations. Now that the decision had been taken not to privatise, there were opportunities to diversify beneficiation.

A large part of the DAFF budget went on transfers to entities – the reason why DAFF might not be able to support the Council as much as it should.  SAFCOL should focus on running its business, while DAFF focused on creating an enabling policy framework to turn forestry around, including the private sector.

Ms Mona added that the communities around the plantations were benefiting from the community projects, but the transfer of land to them was a benefit they still awaited.

Ms Pilusa-Mosoane asked how mining operations affected SAFCOL.

Ms Mona replied that there was some impact of mining on SAFCOL business, particularly illegal mining. The problem was incidents of dual rights to the land. The type of mining which involved operations a few metres underground did not affect the planting of trees.

Mr R Cebekhulu (IFP) asked if SAFCOL was seeking available land in the traditional/communal areas, or land previously owned by Mondi or Sappi. There were communities living on mountains which had soil suitable for planting. He asked what the Council was doing to assist communities with planting on that land, whether water licences were a limiting factor and if rain water could be channelled to the plantations.

Ms Mona replied that SAFCOL was not only looking for private-owned land. It was looking for any land it could get hold of. If there was water and agreement with the community, SAFCOL would go into the area to get involved with the community.

Mr Cebekhulu asked for more information on who owned SiyaQhubeka Forests (Pty) Ltd, if there was fronting, how many communities benefited from the company and how the Land Claims Commission was dealing with claims in that area which had been lodged years ago.

Dr Motete replied that with respect to some of the Traditional Leadership Trust Developments around northern KZN, some properties had been transferred and DAFF was finalizing some outstanding transfers: Mbazwana, Manzengwenya and Mabaso. DAFF did not subscribe to illegal fronting. DAFF knew of reports and took note of concerns, and would follow up on those. DAFF was aware of commercial forestry companies coercing small forestry growers into providing timber at low rates.

Ms Mona added that SiyaQhubeka was owned by Mondi (51%), Imbokodvo Lemabalabala Holdings (13.2%), Safcol (25%), Gudlulwandle Trust (5.4%) and Qalakahle Trust (5.4%).

Mr Cebekhulu asked how SAFCOL incentivised foresters to farm according to the production of quality products rather than harvesting early and supplying inferior product to satisfy the demand -- for example, with poles.

Mr Dyani replied that the Member’s concerns would be included in the review process.

Ms Twala asked for more information on the BEE co-ops -- where they were, and how many people were employed.

Ms Mona replied that the detail on the BEE co-ops was available and would be submitted in writing.

The Chairperson concluded that while companies continued to make huge amounts of money, the communities deserved a fair deal. They did not have the luxury of planning. He requested that the outstanding answers be submitted in writing and that by the first week in August, departments should have collaborated and coordinated their plan for the communities and transformation, and should report back to the Committee with specific dates for action.

The meeting was adjourned.
 

Share this page: