National Forests Amendment Bill: response by DAFF, Forest Sector Charter Council, SAFCOL

Agriculture, Forestry and Fisheries

28 November 2017
Chairperson: Ms M Semenya (ANC)
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Meeting Summary

The Department of Agriculture, Forestry and Fisheries (DAFF), together with the Forestry Sector Charter Council (FSCC) and seven forestry companies, appeared before the Committee to respond to issues raised by communities during public hearings on the National Forests Amendment Bill.

The DAFF reported that the majority of the stakeholders at the hearings had raised various issues outside of the Bill, although they were forestry related, with some requiring the attention of other government departments. They had complained about the handling of land claims, non-compliance with agreements relating to the empowerment of communities, such as commitments to issuing bursaries to excellent performers, the maintenance of road infrastructure, and the appointment of local people versus people from far away or other provinces for labour and contract work.

The Committee voiced disappointment with the DAFF’s response, and asked it to go back and respond to each of the issues that had been raised during the public hearings. Some of them were inter-departmental, and the DAFF could have interacted with those departments for responses before appearing before the Committee.

The FSCC said the sector had maintained a level four Broad-based Black Economic Empowerment (BBBEE) status. Improvements had been recorded in socio-economic development, enterprise development, preferential procurement and ownership. Performance was low in respect of management control, employment equity and skills development. As a result, it was planning to do an impact assessment of what the forestry companies were doing, and intensify community outreach programmes and knowledge sharing exercises with government and industry.

The seven entities from the the forestry sector – MTO, Amathole Forest ry Company, Singisi Forest Products, SAFCOL, SAPPI, Mondi and PG Bison – all reported on their transformation strategies, focusing on their programmes and policies aimed at improving the quality of life in the communities where they operated. They provided details of their education and training programmes, community support and outreach programmes, employee skills development, socio-economic development, and enterprise and supplier development. Other areas highlighted were community health and safety, institutional capacity building, development support, and market access and expansion.

Members expressed disappointment that the forestry companies had also not responded to issues the communities had raised during the public hearings, and had instead used the opportunity to brief the Committee on their employment equity status, transformation plans and corporate social responsibility initiatives. They said that during their own oversight visits, they had been confronted by community representatives complaining about the squalid conditions in which they had to live, low wages, slavery, lack of provision of decent accommodation, bribery of leaders to cause confusion, ablution facilities that were far away from where they stayed, and the flouting of labour laws. They said they had no reason not to believe what the communities had told them.

The Committee also wanted answers on the forestry companies’ efforts to support small businesses and cooperatives; whether they were working well with municipalities, whether forestry land was being made available for farming activities, whether they were employing people with disabilities, and if they were ready to implement the minimum wage. 

Meeting report

DAFF: Feedback on public hearings

Ms Pumeza Nodada, Deputy Director-General: Department of Agriculture, Forestry and Fisheries (DAFF), briefed the Committee about responses to the issues raised during the public hearings on the National Forests Amendment Bill. The majority of the stakeholders did not refer to the National Forests Amendment Bill. However, they raised various issues outside the Bill although they were forestry related, with some requiring the attention of other government departments.

The communities raised the issue of their non-involvement during the signing of lease agreements. Therefore, they felt they were disadvantaged, for example, by the long lease agreements. The leases allowed for recognition of the claimants once claims were settled, where government would lease the land from the claimants.  The Department of Rural Development and Land Reform (DRDLR) was working with DAFF to finalise the settlement agreements that would deal with lease period, rentals and other commitments. These would also cover the role of government.

Issues were raised on non-compliance to agreements relating to the empowerment of communities, such as commitments to issuing bursaries to excellent performers, maintenance of road infrastructures, and the appointment of local people versus people from far away or other provinces for labour and contract work. A sustainable forest management lease agreement existed between DAFF and four forestry companies -- Amathole Forestry Company (AFC), Siya Qhubeka Forestry (SQF), Singisi and MTO. DAFF monitors the requirements of the lease through reports, quarterly meetings and site visits.  Non-compliance was dealt with within the lease framework. DAFF was addressing the villages within the leased areas through discussions with municipalities.

Regarding the delayed issuance of title deeds and compensation funds to land claimants, DAFF engages with DRDLR to assist with the challenges experienced. An action plan was being implemented dealing with this and other land claimant related matters. For example, for the Singisi communities, a community profile had been finalised for the Eastern Cape (EC) and KwaZulu-Natal (KZN).

DAFF would raise awareness through programmes for the National Forests Act (NFA) 1998, and also to ensure there was a comprehensive plan to promote community participation. The Department had programmes and plans in place to raise awareness such as Arbor Week, the NFA foundation course, and a media advertisement of protected trees at an estimated cost of R4 million per annum. The Department would continue to ensure there was community participation in future.

Regarding transformation in the forest sector, communities were concerned they were not participating in the forestry sector in terms of ownership, control, and management and capacity building. Government had its commitments in the Charter, and the DAFF facilitates government compliance to foster compliance by industry. It engages through the Commercial Liaison Forum, where all sub-sector associations participate.

The DAFF’s commitments were:

  • Transfer of state plantations to communities;
  • Skills development – collaboration with the Fiber Processing and Manufacturing (FP&M) Sector Education and Training Authority (SETA);
  • Address sawlog shortage – strategy developed and being implemented.

Concerning the poor working conditions of forestry workers in the sector (wages, housing and sanitation, infrastructure and access roads), DAFF was not the competent authority. It had facilitated the sector determination for remuneration of forestry wages and salaries. Collaboration with the Department of Labour was under way.

Ms Nodada also took the Committee through some activities DAFF was engaged in towards achieving the realisation of the 2050 vision for forestry and fisheries. It continuously ensured that all its policies and strategies were in line with the XIV World Forestry Congress resolutions and its international policy negotiations such as the recent UNCCD COP13, and the United Nations Framework for Climate Change Convention COP23. It was encouraging the participation of the youth and women through participation in the National Forests Advisory Council (NFAC) that advises the Minister of Agriculture, Forestry and Fisheries on all forestry related matters. The next term starts in September 2018 to September 2021.

The NFAC, as part of its work programme, was investigating how youth and women could be encouraged to participate in the sector and how they could be best empowered. This was done in collaboration with the Department of Economic Development.

In terms of food security and livelihoods, DAFF had recently approved the agroforestry strategy. Pilots were being conducted in Limpopo and Mpumalanga. A roll out was to follow in the Eastern Cape and KwaZulu-Natal. In partnership with municipalities, it was implementing the National Greening Strategy, where communities were provided with fruit trees. This was also in line with one of the legacy projects – the “One Tree, One Child” that was started in the OR Tambo district municipality.

Furthermore, rural municipalities which were active in greening their areas of jurisdiction had been recognised at the Arbor City Awards as part of their contribution to the role of trees in mitigating climate change impacts. DAFF, through the LandCare Programme, was contributing to improving practices to ensure integrated land use and minimise conflicts over land use. This was also enhanced by the agroforestry projects that were also linked to the LandCare projects.

The Minister of Agriculture, Forestry and Fisheries had established the Kabelo Land Restitution and Development Trust in terms of the National Forest Amendment Act of 1998 (Act No. 85 of 2005) to:

  • Receive rental payments from the companies who were leasing state forestry land affected by land reform;
  • Invest such money on behalf of land claimant beneficiaries as part of the trust property;
  • Pay rentals collected and with interest earned to the beneficiaries approved by Department of Rural Development and Land Reform;
  • Pay the balance of all rentals received, together with interest earned, to the state or the Ingonyama Trust where applicable, when it was clear that there was no land claim approved for the particular state forest or part of it;
  • Pay rental money or part of that money periodically to successful claimants.

To effect the objectives of the trust, the Kabelo Trustees needed to develop well documented policies, system procedures, laws and regulations that would govern the administration of the Trust. The Trustees were also expected to ensure compliance with all statutory provisions and requirements that were relevant to the Trust.

In January of every year, the forestry companies pay lease rental into the DAFF bank account. The lease rental money is then transferred and invested with the Public Investment Corporation (PIC) in an interest bearing account which is administered by DAFF. The current balance in the Trust account is R656.7 million, as of 31 October 2017.

The Trust, after consultation with the communities, approved a disbursement model which considered two scenarios. Option one was if a community was receiving lease rental money for the first time, the funds would be for personal use. Option two was that the funds would be used for community development projects. As at 31 October 2017, a total of R 105.8 million had been disbursed to nine communities. Of the nine, four had not submitted any requests for community projects. Two of them -- Phalane Trust and Western Shores Trust in KZN -- had court cases pending, and two -- Qelane and Gqogqorha -- were in the process of finalising their proposals.

Forest Sector Charter Council

Dr Diphoko Mahango, Chairman: Forest Sector Charter Council (FSCC), said the Forest Sector Code originated from the Broad-Based Black Economic Empowerment (BBBEE) Amendment Act, No 53 of 2003. It had been launched in 2005 and the draft Charter was finalised in 2008. The Forest BBBEE draft Charter was gazetted for public comments in May 2008. It was then published as a sector code in June 2009, revised in 2014, and was amended and gazetted in 2017.

The FSCC develops and publicises sector codes; facilitates BBBEE implementation; develops yearly action plans for implementation; issues scarce, core and critical skills for the sector; and reviews and realigns sector codes. On the BBBEE status of transformation, the FSCC collects certificates with underlying information; analyses information received based on the size of enterprise, does sub-sector analysis depending on available data; and compares current results with past performances.

The sector had maintained a level four BBBEE status. There were improvements on socio-economic development, enterprise development, preferential procurement and ownership. Performance was low on management control, employment equity and skills development -- less than 50% achieved against target -- and there had been an increase in terms of submissions.

Challenges included inconsistency in terms of submissions in terms of the BBBEE Act; insufficient underlying information mades it difficult for in depth analysis; there was an inaccurate database; the verification process uses a generic scorecard; and some entities do not undertake BBBEE verification.

He concluded the FSCC was planning to do an impact assessment of what the forest companies were doing; update and align its database; intensify community outreach programmes; revise reporting on undertakings; and intensify knowledge sharing exercises with government, industry, the South African National Accreditation System (SANAS), and ABP.

(Graphs were shown to illustrate BBBEE status of transformation)

MTO

Mr Lawrence Polkinghorne, CEO: MTO Group, indicated they were committed to reshaping and transforming the African timber landscape responsibly. Responsible transformation was interdependent, co-dependent and holistic and couldc not be achieved in isolation. MTO was trying to introduce new ways of doing things.

MTO’s transformation strategy was focusing on three major areas -- skills development, socio-economic development, and enterprise and supplier development. On skills development, they provided courses for junior and middle managers. There were mentorship, unemployment, and internal skills development programmes in place. They made use of the 112 Seta accredited courses.

Regarding socio-economic development, the focus was on job creation and opportunities, education, community infrastructure and upliftment, and community health and safety.  They were spending R6 million per annum and fed 114 people a day. On enterprise and supplier development, the total spend was R14 million per annum over three years, on black-owned companies.

Some funds were received from the Department of Trade and Industry (Dti). The focus was on facilitating finances/funding, institutional capacity building, development support, and market access and expansion.

(Graphs were shown to illustrate MTO Transformation Impact)

Amathole Forestry Company (AFC)

Mr Chris Rance, CEO: AFC, reported the Amathole forest region was economically depressed. It still
suffered from the legacy of the apartheid homeland era. Unemployment was at 55%. Most industries had closed in Dimbaza, Keiskammahoek and Seymour. Six major timber factories had closed in the region in the past 20 years.

Amathole had an isolated timber economy. Low profitability was due to poor economies of scale
and inferior markets for forest products. High costs were a result of steep terrain, under-developed infrastructure and poor roads, high-seed load of alien vegetation, and high fire prevention costs.
The isolated location meant the group had to perform most operations in-house – silviculture, harvesting, transport, sawmilling, maintenance, etc. This business model created a strong value chain multiplier.

The timber industry was dependent on road access. All district roads, except one, serving the Amathole timber industry were gravel roads in poor condition. The transporting of products in the rainy season to the market was a major limitation. The Eastern Cape government’s roads budget could not provide adequate roads.

40% of AFC’s plantations were destroyed by fire during the 2001/2004 period. Forest fires were a serious threat to the economy because they destroyed economic growth and jobs. The AFC had spent 17% (R13m) of its budget on fire prevention in 2017. There was an average of 60 to 80 fire fights per season. AFC provides fire fighting service to surrounding communities at no charge.

Mr Rance said significant progress had been made on transformation. A new BEE shareholder - Amathole Community Holdings (Pty) Ltd – had been created for land claimants. The strategy was to include land claimants as shareholders. This programme was supported by the Department of Rural Development and Land Reform (DRDLR) and would be completed when land claims in the Amathole region had been settled. The challenge was around the slow pace of land claim settlements.

The focus was on the advancement and development of black employees, and the retention of critical skills. The entity was compliant with Department of Labour employment equity audits. Another area of focus was on the development of technical, management and supervisory skills of black employees.

On challenges, he said the heavy labour of manual forestry work was more suitable for men. Fire fighting was more suitable for men. Disabled persons had limited opportunities. It was important to retain the experience of older white managers, because it impossible to “study experience”. Forestry was a variable environment, with low margins and no room for mistakes. With regard to skills development, the challenges were around the lack of funding from SETA and the new BBBEE codes that were weighted against labour intensive employers, and those with low profitability.

Concerning enterprise and supplier development, Cata Community Plantations had received funding for plantation development. It had been provided with fire protection, management and administration. 15 jobs had been created. Negotiations were taking place for the next phase. The Sonjani contractor, an emerging black contractor, had been provided with training, equipment, and guidance. The  Gertfontein farms had been provided with operational support, fire protection, and mentorship.

The preferential procurement strategy had been implemented and there was close administrative support and monitoring of targets. The challenges were the scarcity of black-owned suppliers and black women suppliers, and the lack of opportunities for vendor development because of a weak rural economy and the isolated forestry region. The AFC’s Social and Economic Development (SED) programme was primarily focused on its surrounding communities through its Clause 46 liaison structures. The AFC practiced SED in 83 rural communities. It used the Clause 46 liaison structures for the SED programme. Lack of profitability and funding were proving to be a deterrent to corporate social investment.

Mr Rance indicated that the new BBBEE codes carried complicated procedures and led to the setting of
unrealistic targets for labour intensive businesses, because it was difficult to achieve targets for manual labour-intensive businesses. They encouraged mechanisation and outsourcing to labour brokers and contractors. The codes disadvantaged timber companies with a sawlog regime, because sawlog regimes had 25 to 30 year crop cycles, with slow cash flow cycles, long periods of losses and short periods of profits. The scoring formulas penalised such businesses.

In future, the focus would be on:

  • Ownership development with land claimants;
  • The BEE board, management and supervisor development;
  • Technical skills;
  • BEE supplier development
  • Enterprise development and SED would be limited until crop and earnings cycles recover

Singisi Forest Products (SFP)

Mr Jan Weys, Executive Manager: SFP (Merensky), told the Committee that SFP remained maintaining a sustainable business model which would continuesupport and job in communities. It made a contribution in the areas that it operated in. Since its inception, it had made a difference by tthe lead in rural economic creatingjobs; planting more trees and increasing planted area;recapitalising the saw mills with new technology and equipment; assisting with the land claims process; providing socio-economic development withincommunities; and supporting enterprise development and supplier development.

Forestry was a renewable but strategic resource, and replacement would require massive investment --similar to infrastructure   investment. New plantations were a high barrier to entry because of environmental impact assessments (EIAs), water licences, planting permits, and competing agriculture/population growth. All South African Forestry Company Limited (SAFCOL) and DAFF jobs had been retained in commercial operations at the time of the purchase of plantations in 2001. This had created about 1 700 permanent jobs. Permanent jobs retained at the Singisi sawmill    operation were standing at 386. Total employment in 2017 was 2 326 permanent jobs. Permanent jobs created since 2001 were about 620. Remuneration was about 8% higher than the industry average.

SFP had made lots of investments in various areas. Investment to reduce unplanted areas was about R41 million; in forestry fire risk, from 2001 to 2017, it stood at R351 million; and between 2001and 2017, its investment in roads had been about R227 million. Investments had been made to upgrade processing facilities in order to retain jobs and stop loss-making activities. Eight Eastern Cape land claims had been settled in 2017 with support from SFP, and continued assistance and facilitation had been provided to Communal Property Association s (CPAs)  to lodge claims.

Mr Weys reported there had been a number of interventions on enterprise development. Three small, medium and micro enterprise (SMME) workshops had been completed at Weza, in conjunction with the Small Enterprise Development Association (SEDA) and the Department of Economic Development Environmental Affairs and Tourism (DEDEAT). About 90 delegates had attended the workshops. Following these workshops, ten SMMEs had also attended a five-day business management course.

A local municipality had requested SFP to assist the hawkers who were infringing the municipal by-laws by displaying their goods on the pavements. Some 30 tables had been made and provided, successfully relieving the congestion on the pavements. A medicinal plant nursery and a medicinal plant garden had been established at Weza sawmill. The intention was to relieve the exploitation and illegal harvesting of these plants from indigenous forests in the SFP lease area, and develop channels for the sale of the plant material. Entrepreneurs would be encouraged to participate.

At the request of the community, the training of 11 entrepreneurs to support the government’s digital television transfer programme in rural areas had been sponsored. SFP had 15 unemployed youths from local communities, adjacent to SFP plantations, who had received entrepreneurial skills training a period of 10 The main objective was to equip the learners with the skills and knowledge to start and manage a formal or informalbusiness.

A project to provide basic skills in woodwork and the use of hand and power tools had been initiated in conjunction with Sivile, a charity organisation. In a pilot project, ten unemployed youths had been sponsored a 15-day training at Ithembalethu Center in further business modules would be added to this project, with the intention of encouraging groups to exempt micro enterprises (SFP had also provided work benches and power tools for the project. Department of Energy (DOE) and Skills Development Fund (SDF) support had been requested.

Four clinics operating SFP premises were supported and maintained by SFP its own and no collected. These clinics were managed by government employees and served all the surrounding communities. The majority of the nursing employed these clinics were also housed free of charge bySFP. Additional support included provision ofadditional facilities and transportation of medicine.

A consulting used the government primary health service’s mobile clinic had been constructed in the Health care services the mobile clinic previously provided in full view of the public and other patients. This facility now allowed privacy and dignity Extensive shelving had been erected in the dispensary of the Upper Mjika Clinic near Langenisawmill.

The three existing village orange orchards continue to be expanded. Additional trees were planted in the St (50), Moyeni (50) and Mhlahlane (100) communities. New village orange were also established in the and communities, and a peach was established in the Impendlecommunity. A vegetable project was established at the Kambi community, with some 14 000 cabbage seedlings being provided. Other long-term agricultural avocadoes were being considered.

Education support typically included repairs to infrastructure and buildings, and the provision of furniture; provision of learning materials; and provision of playground equipment. Two high schools, two junior schools and two crèches were located on SFP properties -- no rent was collected and the buildings were maintained by SFP.  Water tanks had been erected at Mpikwa Primary and Ikhwezi Lamachi Primary Schools to provide secure water sources for the learners. Vegetable seedlings were grown at a nursery by SFP agriculture interns and were donated to the schools in the programme, who then plant them in the school vegetable gardens. In addition, garden implements, seed and watering cans to all of the schools were provided.

More than 130 international forestry students from all over the world who attended the International Forestry Students’ Symposium, which was held in South Africa this year, visited the Weza saw-mill where they were hosted for lunch and taken on a tour of the processing facilities and plantations. Every year, SFP awards internships and apprenticeships. These learners were employed whereever possible once their training was completed. In 2017, 29 internships had been awarded and three interns had been recruited; and 30 apprentices had been provided with the opportunity for training and eight apprentices had completed the course. Four apprentices were employed by SFP.

The BBBEE and Forestry Sector Charter Council Code were based on the 2009 codes. In 2010, a level 6 had been achieved and increased level 4 by 2015 and2016. With the introduction of new codes in 2017, the SFP non-compliant in2016, and had achieved level 8 in2017.

SFP continued to support the successful Working on Fire initiative. Devastating fires in the Matiwane forests, caused mainly by arson, had resulted in a requirement to purchase some 30% of log volumes from other plantation owners. SFP would initiate an Imbizo in 2018 with stakeholders to discuss the negative effects of arson on the sustainability of jobs and investment, and seek co-operation and commitment from stakeholders.

While the effect of the market down-turn in 2009 and the series of labour strikes and arson attacks had negatively affected business performance, the recapitalisation projects were showing signs of creating improved results. SFP remained committed to maintaining a sustainable business model, which would continue  to support transformation and job retention in rural communities.

SAFCOL

Mr Siyabonga Mzontshana, Senior Legal Counsel: SAFCOL, said forestry should be declared a strategic industry, with timber a strategic resource and a national strategic asset for South Africa. The declaration of it as a strategic industry would provide much-needed funding and government support for the industry, which could contribute significantly to the objectives of job creation and poverty alleviation.
 
Since inception, SAFCOL had complied with the BBBEE codes of good practice and had facilitated BBBEE as its transformation and empowerment catalyst. It had signed 13 social compacts with communities, and established joint community forums to identify and address community needs. It was increasing local procurement, and actively developrd enterprises and suppliers through Enterprise and Supplier Development (ESD), which had been revised to comply with and exceed new Preferential Procurement Policy Framework Act (PPPFA) regulations. In the past financial year, SAFCOL had spent 3.9% of its net profit after tax on ESD projects against the Forestry Charter’s target of 3%.

Corporate Social Investment (CSI) programmes included more than 30 community projects completed, and over R18 million spent in the last three years. SAFCOL invested in skills development initiatives driven by the National Skills Development Strategy, training employees in line with the strategy, and in community capacity-building programmes as informed by the sector’s scarce and critical skills.  Six timber frame structures had been completed, and six were under way in this financial year. Four conventional brick and mortar community halls had been built. Six food security projects had been established in various communities, and four boreholes had been drilled and equipped.

Four information communication technology (ICT) centres had been established in schools. It had donated 10 computers as well as workstations to Evane Primary School. 20 computers had been donated to Mathangetshitshi High School and free internet access provided through SAFCOL’s established wide area network (WAN) across its operations. It had connected the rural communities around Evane Primary School, Mathangetshitshi High School, Prince Somcuba Primary School and Ngome Primary School by installing wireless internet pilot programmes through its WAN infrastructure.

Mr Mzontshana reported that SAFCOL spends 6% of its payroll on skills development of its employees and communities. The organisation had a training centre based in the Sabie area of Mpumalanga, which provided training to employees, contractors and communities adjacent to operations. SAFCOL offered the following programmes and initiatives to develop and provide careers to the communities:

  • Sector specific learnerships in forestry and processing.
  • Apprenticeships (boiler maker, electrician, fitter, diesel mechanic and millwright).
  • Internships.

SAFCOL provided bursaries to employees and communities in various fields of study such as forestry, wood science, engineering, finance, human resource management, construction, architecture, applied mathematics, marketing, tourism, business studies, human settlements and plant science. It also provides short skills programmes to communities in computer training, entrepreneurship, basic fire fighting, adult education training, horticulture, sewing and environmental awareness.
SAFCOL provided skills development opportunities for participants to be employed either within SAFCOL or the industry. Through such skills development programmes, participants could either open their own business or be part of SAFCOL’s value chain as service providers. If vacancies existed, learners may be absorbed within SAFCOL as employees. However, SAFCOL could not guarantee every skilled learner a job.

SAPPI

Ms Mpho Lethoko, General Manager for Corporate Affairs: SAPPI, informed the Committee that Sappi was focused on developing the rural economy. aTthere was still significant opportunity in the area of skills development and enterprise and supplier development, which would be their focus over the next couple of years.

Sappi had achieved Level 3 on the new codes, which had tightened compliance requirements to achieve the same level as in previous years. It would have achieved a Level 7 if it had followed the attitude of “Business as Usual”. Through a series of interventions and focus, it achieved a Level 3 in the current year.

Sappi was investing in the rural economy.  There were current initiatives in and around their communities like the Sappi Khulisa Project and Abatshintshi Programme. Future investment would be in excess of R2 billion in KwaZulu-Natal and Mpumalanga.

The Khulisa Project was aimed at developing community tree farmers. 4 000 growers were managing approximately 14 000 ha. This project provided technical advice and extension services, free seedlings, a guaranteed market, interest-free loans to small growers and subsidised loans to larger land reform projects, and assisted growers by appointing suitable contractors. Its footprint in KZN and the Eastern Cape went from as far as from Manguzi close to the Mozambique border, to Lusikisiki in the Eastern Cape.

Khulisa had become a major timber supplier. R1.7 billion had been earned by recipients to date, while R350 million had been earned in 2017. Their growers had been able to own their own houses and vehicles, and start new businesses and educate their children. 272 contractors (transport, harvesting, silviculture, etc) in the Khulisa value chain had earned R78 million in 2017. Of the 1 030 people trained, 767 were employed and the remaining 263 were employable. The formal training programme enabled people to become tree farmers and build businesses in the forestry value chain.

Ms Lethoko said Khulisa wanted to grow with the government, and that was why the government had committed to 100 000 ha of new afforestation in the Eastern Cape and KZN. The Khulisa project would like to assist the Eastern Cape with 30 000 ha, starting from 2013, and up to 2033. 4 500 ha had been planted. 1 250 ha had been issued with a record of decision (ROD), and were awaiting water licenses. 1 400 were awaiting RODs.

Sappi gains direct insight into its communities through open communication channels and it was able to support local initiatives and address social issues. Its Abatshintshi programme supports 43 communities. Its activities include:

  • Development and mobilisation of communities through Asset Based Community Development (ABCD) initiatives;
  • Skills development in the communities and learner holiday programmes;
  • Economic development through the support of local businesses;
  • Enterprise development through business coaching and mentoring, and assisting these micro-businesses to become self-sustainable

The Abatshintshi had been receiving monthly training to enable them to mobilise their communities by facilitating four types of contact sessions within their own communities. The ABCD was a social development methodology that analyses what a community had by mapping five types of assets -- physical, social, financial, human and natural -- and explores what the community could do with its assets.

The Youth Life Skills Training trained young people to make good decisions and take personal responsibility. As a result, the youngsters were starting to use the tools available to communicate, rather than setting fires.  The Ifa Lethu Programme involved the elderly in capturing and passing on communities’ history and legacy. It demonstrated respect for their knowledge and experience, and key lessons were shared with the young in the life skills sessions. The holiday programmes empower children to influence their communities with constructive messages. The holiday programme ensured that the peaks of fires during school holidays were lowered, as it kept children occupied in a safe environment, minimising the chances of them playing with fires in the forests.

Sappi continued to invest in its South African operations and had announced further investment plans to build its business in South Africa. There was still significant opportunity in the area of skills development and enterprise and supplier development which would be its focus over the next couple of years.

Mondi

Mr Themba Vilane, Director: Land and Forestry, Mondi, said they viewed BBBEE as a vital component of economic and broader transformation, and were fully committed to the objectives enshrined in the Forest Sector Transformation Charter. Mondi was in the process of aligning its BBBEE strategy and targets to the amended Forest Sector Charter code. Currently, it was a Level 3 BBBEE company.

Siyaqhubeka Forests (SQF) was a partnership between Mondi, the black empowerment group Imbokodvo Lemabalabala Holdings, the government and local communities. The plantations were designed to grow timber efficiently and sustainably, providing benefits for stakeholders, while minimising environmental impacts and supporting conservation. All shareholders were represented on the SQF Board, with full access to information, and outside directors (non-Mondi and SAFCOL) were remunerated for their services. All board members could have alternates, and this assisted with continuity and an improved understanding of the business.

The SQF and isiMangaliso Wetland Park had entered into a partnership, a first model where a plantation formed a part of a protected area. IsiMangaliso was a Natural World Heritage site. This was going to boost eco-tourism opportunities in the Park through the transferring of land. The SQF had transferred about 4 000 ha to iSimangaliso. There was a variety of wildlife, such as elephant, hippo, black and white rhino, crocodile, leopard, buffalo, giraffe, kudu and numerous other species.

The Mkhondo Development Programme was a partnership with government to assist 2 720 low income households’ residents in 61 villages on Mondi-owned land at the Mkhondo Municipality in Mpumalanga to access secure land tenure rights; enhance access to utility and social services; build social networks and institutions; and identify and capture economic opportunities. The 2 720 households on Mondi land had been given three choices:

  • Agrivillages -- to create rural settlement and ownership opportunities for the rurally bound Mkhondo populace;
  • Urban option – urban townships at Piet Retief and Iswepe for those resident households who wanted to urbanise;
  • No Change – Allow for households that did not want change (“Remainees”).

He said the Mkhondo Development Programme had had a positive impact. 677 ha went to rural households who had already accessed serviced rural residential sites with individual ownership. 230 ha went to rural households who had and were currently accessing serviced urban residential sites with individual ownership. Rural households in the process of acquiring collective ownership of the land on which they resided and cultivated, got 235 ha. 15 settlements were currently in the process of tenure rights upgrading/provision. The area of land falling within these 15 settlements was 1 550 ha.
A partnership had been established with the Buhle Farmers Academy to assist small scale land owners with agricultural enterprises. Funding had been received from the Treasury Jobs Fund. A satellite academy had been established in Mkhondo. Accredited programmes in vegetable, crop, poultry and livestock modules were being offered. Over 130 local students had been trained so far.

Mondi Zimele had subsequently funded nine local agri-businesses to the tune of R1.2 million on graduation from the academy, on vegetable production, broiler chickens and seedlings nurseries. This project was aligned to the Mkhondo Development agri-villages programme.
Mondi had piloted a youth development model that empowered young people in selected communities in order to reduce risky behaviour and encourage positive social change. 46 youth leaders from 20 communities in the MSA footprint had been trained. Each youth influenced between 500 and 2 000 people in the community. Youths who participated reported an increase in self-confidence and skills levels, and were less prone to participate in risky behavior. Active socio-economic projects and programmes were designed and implemented by the youth.

Mr Vilane indicated that since 2012, 194 learners had received bursaries for tertiary studies. They were recruited from a pool of 98 high schools. Fields of study ranged from medicine, forestry, arts and culture, to social sciences. They were further reaching 60 early childhood development (ECD) centres (2 196 children under five) through either training, infrastructure, equipment or other donations.  Mondi was also reaching 1 200 orphans and vulnerable children (OVC) daily through the Isibindi model. 30 child and youth care workers from local communities were trained and had graduated in child and youth care. An annual contribution of 1 500 Christmas hampers was donated by Mondi employees and contractors to OVCs.

PG Bison Presentation

Mr Lunga Penwell, Stakeholder Relations Executive: PG Bison, said the company aimed to be the leading manufacturer and primary upgrader of timber products in its chosen markets. It was a Level 4 BBBEE company which owned 41 200 hectares of planted forests. It provided learnerships in forestry, silviculture, lumber and wood preservation, and chipboard. Apprenticeships were offered for millwrights, fitters and turners, electricians and boiler makers. Bursaries were awarded in wood technology and forestry.

PG Bison had created 5 333 (80%) jobs in the Ugie area which benefited local people. 558 of these jobs were dependent on PG Bison. On enterprise development, it had created 601 jobs, while on supplier development it created 988 jobs. It was in partnership with the Eastern Cape Rural Development Agency (ECRDA). It was doing an afforestation project with two communities to plant about 1 500 ha. During 2016, it had planted an additional 850 ha and planned for another 450 ha during 2017. This was job creation and future income for the rural communities. The total number of hectares under grazing by the community was 5 301.


The Ugie Socio-Agricultural Project provided work for 15 beneficiaries from the community on eight ha of intensively grown vegetables. It had planted cabbages, pumpkins, butternuts, green peppers, beetroot, carrots and green maize. PG Bison had also partnered with Judea Hope and local farmers. Already, it had distributed 30,000 nutritious meals to the elderly and crèches. Meals consisted of rice, soy, dehydrated soup mix, flavouring and 21 essential vitamins and minerals. It had provided training to 20 ECD teachers from the community, and was assisting with the renovation of the venue from where meals would be distributed.


They had a programme of ‘adopting’ a municipality. They worked with the municipality in the areas of disaster management where they trained fire fighters, made use of the operations room for communities to call in case of fires, and assisted municipalities with fire awareness programmes.  There was small town revitalization, where the small Ugie town hall was demolished and provided with project management services to areas of informal traders. In the field of training, they continued to provide forestry learnerships in the afforestation projects.
In the Southern Cape, PG Bison supported local creches situated at Ruigtevlei Plantation and Brackenhill. It compensated the teachers and sponsored their developmental programme, the National Diploma in Educare. It also sponsored the Knysna Educational Trust which, amongst other things, promoted:

  • Early Childhood Development training, in mother-tongue to teachers;
  • Equipping pre-schools with age and language appropriate educational equipment;
  • Developing mother-tongue literacy;
  • Developing mathematical concepts in mother-tongue;
  • Maximising the first 1 000 days’ development in a child's life through practical caregiver training.

The community hall in Brackenhill had been upgraded and electricity installed. ESKOM had been approached to supply electricity to the Brackenhill community, including free water supply, waste removal and the upkeep of roads. 30 unemployed matriculants had been enrolled in the forestry leanership program in Brackenhill and had already completed Level 3. 12 learners would progress to Supervisory Level 4. The company was further planning to release 21.74 hectares for the purpose of handing over ownership to the Brackenhill/Fairview communities, without further consideration being payable. The project had been submitted to the district committee of the DRDLR for recommendation, and it had been supported.
For the eLundini community, the company had been working with four schools over past five years -- Ugie High, E.T. Thabane, Sibabale and Umthawelanga. It had built infrastructure like classrooms and toilets, and provided textbooks. It had done strategic development work with the school management teams and assisted with teacher development and coaching. It had placed 18 young, mostly previously unemployed, adults into teaching assistant and learner support positions in 14 schools, and paid them a stipend for eight months, from July 2015 to the end of February 2016.
With assistance of the district, many of these young adults had received confirmation of access to the Funza Lushaka Bursary to study full time, where all costs are covered, including tuition, books, accommodation and allowances for degrees such as B.Ed; BA; BSc; BEng and BCom from 2016. Direct beneficiaries of the initial project were about 4 800 learners in the four schools, and this had improved the pass rates across the district by 15% to 20% over the last six years. It had awarded tertiary education bursaries to the value of R1.1 million to students studying forestry at the Nelson Mandela Metropolitan University (NMMU) since 2012.

Discussion

DAFF Presentation

Mr H Kruger (DA) said it appeared that the DAFF had not engaged with communities involved in forestry regarding job creation, because there had been no mention of it in its presentation. Communities in Mpumalanga had claimed they were not informed in time about the public hearings and got to know about them just a day before the event. DAFF did not seem to be serious about developing small growers around forestry, because the big companies were bullying the small forestry communities.

Mr P Maloyi (ANC) commented the presentation had not met the expectations of the Committee. The Committee and DAFF hadvisited three provinces, but the Department had failed to respond to the specific issues the communities had raised, which were related to forestry matters, not the Bill. Some of the issues raised were inter-departmental, and the DAFF could have interacted with those departments for responses before appearing before the Committee.

Mr N Capa (ANC) said the DAFF presentation had many gaps. The Committee had gone to the communities regarding the Bill, but it appeared the communities had interests in other issues related to forestry.

Ms Nodada apologised for not being specific on the issues raised. The DAFF had had an engagement with the affected parties, but not on all the issues. For instance, the Western Cape Forestry Council had issues around lease rentals. The DAFF had committed to work on these matters. There was a document that had the action plans.

The Chairperson asked why the document had not been presented to the Committee.

Mr Joe Kgobokoe, Deputy Director-General (DDG): Policy, Planning, Monitoring & Evaluation: DAFF, said they did not want to come to the Committee with information that would disappoint the Members. He apologised for the presentation not meeting the expectations of the Committee and promised they would prepare another presentation that had the details that Members wanted.

Mr Kruger said the DAFF’s presentation was disappointing because it did not realise that warm bodies were suffering in the process. If the Department could not come up with a plan to solve issues in three weeks’ time, then that disadvantaged communities and disrespected the Committee.

The Chairperson asked the affected forestry companies that leased plantations, like SFP, AFC and MTO, if they had received information from the DAFF about the issues raised by forestry communities during the public hearings.

Mr Polkinghorne (MTO) said he had come to the Committee to present transformation plans, corporate social responsibility programmes, and employment equity statuses.

Mr Weys (SFP) said there had been no specific issues from around their region. They had a liaison committee that engaged communities on a quarterly basis. They were making significant progress in areas they operated in in terms of job creation, planting of trees, development support, and assisting with land claims in the Eastern Cape and KwaZulu-Natal.

Mr Rance (AFC) indicated their presentation was on broad based empowerment and transformation. The public hearings that were going to be held in their region regarding the Amendment Bill had been cancelled. There were no forestry issues they were aware of from the forestry communities in their region, because nothing was happening in the communities that they were not aware of. They had community liaison units. Land grazing was being handled well, and they were starting initiation schools, but following the right legal processes.


FSCC, AFC, MTO and SFP Presentations

Mr Kruger remarked there seemed to be a problem around developing small businesses. The National Development Plan (NDP) stated that 90% of jobs should be created by small businesses. The forestry companies were raising development issues, but they sis not mention any engagement with the Department of Small Business Development. From the side of DAFF, there should be a transversal agreement with the small businesses so that it could familiarise itself with their problems. The developing enterprises should also be proactive and let DAFF know of their concerns.

Mr Harold Mrashula, Community Liaison Officer: AFC, explained that business development around forestry was a problem. A hectare of planted timber supported a certain number of jobs. Primary production had to be done with big companies, because the required infrastructure was very expensive. Small businesses tended to appear at the tertiary level, for example, furniture manufacturing. Their business model was to train their own managers and use their own material. Everything was sourced internally, but they were not credited for that.

Dr Mahango added the FSCC had agreed to introduce a forest levy for all forest companies to ensure their contribution to transformation. This had to be gazetted through the DAFF in order to force them to pay the levy. Transformation was a government imperative, not a legal imperative. For them to operate in the forest sector, they needed to pay a levy towards transformation.

Mr Maloyi asked the FSCC why it had identified challenges now, when the Forest Sector Code had been published in 2009. If the challenges had been identified long before 2017, what had been done to address them? He crticised MTO, as the communities in its region had complained that the company had bursaries, but not a single child had been a recipient of those bursaries; that there was no provision of alternative accommodation for former employees; and that employees were underpaid and not allowed to bring their livestock for survival. Furthermore, employees felt they were slaves, there were bribery allegations, hostels built for employees and their children were not fit for human habitation to an extent that adults that were engaging in adult activities were heard by other adults and children, and labour laws were not being observed.

Dr Mahango, on sector code challenges, reported that community liaison members of the FSCC were not given leeway in communicating with community members until a budget was set aside for that.

Mr Polkinghorne said Mr Maloyi was making sweeping statements. MTO engaged with the Department of Labour regularly because it did the audit for the company every year. The Committee was free to visit MTO for any forensic investigation on bursaries, disregard of labour laws and slavery. It was impossible for the MTO to disregard labour laws when it was audited by the Department of Labour. On the eviction of older employees, he said he did not have information on that matter. Anyone with information was free to bring it to the attention of the company. MTO spent R2 million a year on housing inmany of the communities in which they operate. They would investigate the matter, including that of bribery, because the MTO had never bribed or victimised anyone.

Mr Capa wanted to know what modes of communication these forestry companies were using to communicate with the communities to make sure issues in the forestry sector were understandable to them.

Mr Polkinghorne admitted the companies were operating in silos.

Mr Mrashule said the communities were divided into liaison structures. If a structure had 15 villages, there were two representatives from each village. AFC communicated with the DAFF on a quarterly basis. He commented that communities, companies and government needed each other. There was a need to be patient with each other, and politicians should stop when they were confronted by people to say they could not do or solve things in 23 years over something that had been done by apartheid over many, many years.

The Chairperson interjected, and said it was right for people to say 23 years was a long period, and politicians were right to give communities those answers. However, if forest companies explained to the communities the issues, and why things were not happening, communities would understand their explanations on why things were not happening. She asked if the companies have tried to interact with the Dti, because it had funds to assist companies that wanted to create jobs or support small business development. She further wanted to know if the DAFF, during its oversight, was engaging with the Forest Council, forest companies and communities in order to foster healthy relations between the forest communities and companies.

Ms Nodada, concerning oversight, said they engaged with communities on a quarterly basis. Forestry development officials in provinces were there to interact with the communities. The only thing that DAFF needed to do was to increase the human and financial capacity to do the work. The DAFF had managed to some extent to help communities that had alerted the Department of their challenges, but in some areas of KZN, there were community conflicts which made it difficult for it to address challenges in those affected communities. There was work in progress recorded on SFP.

Mr Polkinghorne indicated they had had successful engagements with the Dti and had received R4m to spend over a four-year period. On top of that, a German bank had contributed another R3m to be spent over the next three years.

Dr Mahango added that the process of funding for entrepreneurs should be made accessible to business developers, but the terms and conditions were cumbersome and complex, especially for small enterprises. They had requested the Department of Water and Sanitation (DWS) to engage with the forest communities and companies regarding water licences, but it had not responded to issues on the ground. With regard to compliance, he said they had decided to name and glorify forest companies that complied and submitted information to the Dti, so that they could be considered for work. If a company wanted to do business with the government, it had to get a certificate from the FSCC to show it complied with government rules.

Mr Maloyi maintained he would continue to be angry when communities stated they were treated as slaves, that bathrooms and toilets were far from where they stayed, and leaders were bribed to cause confusion. The Committee was not making allegations, but relaying what it had been told by communities. That was why companies like MTO had been invited to state their side of the story. Issues like toilets and bathrooms could be addressed in six months, while others could take up to 23 years to be done, but people must not wait forever.

The Chairperson asked the DAFF if the FSCC was invited to the quarterly meetings the Department holds with the forest companies.

Ms Nodada replied that the FSCC had never been invited, but that was something they should consider doing. The FSCC met with the forest companies once a year, so there was a need to increase the frequency of meetings with the FSCC.

The Chairperson indicated the FSCC was playing the role the Committee was supposed to play, because it was established by the Minister to look into forestry-related matters.

Ms A Steyn (DA) remarked it was as if the forest companies were operating separately from the communities. Everyone involved was failing the communities on things that needed to be resolved, like land claims, because some of these plantations were either located near the land that was claimed or claimed already. The structure or the system that was in place was so complex that communities did not understand what was holding them back. The forest companies needed to sit down with their communities and iron out the frustrations. It could be that the communication channels were not right.


SAFCOL, SAPPI, PG Bison and Mondi Presentations

The Chairperson commented that South Africa had natural resources with a population of 57 million, the majority being the youth. Stats SA had released its community survey results. Unemployment had increased to 27%, and those who were food insecure had increased. Skills development was low. Then there was the 2030 Plan which mapped out the direction the country had to follow. There was a need to identify the challenges and see how they could be resolved.

Mr Kruger said the biggest hurdle for businesses seemed to be to develop their enterprises to be sustainable. The presentations had said nothing of cooperatives. He asked if the cooperative model was a solution for job creation in SA.

Mr Lungile Mabece, SAFCOL Chairperson, said there were a number of cooperatives and service providers that provide services to SAFCOL. They were giving these small businesses training to run their businesses successfully.

Mr Vilane added that Mondi had adopted a model that provided training to small businesses. Technical assistance was given to small growers. They had a section that was dedicated to this service. He also indicated they had tried cooperatives in the Agri-space. The grant funding was attractive, but when it came to ploughing it back into the business, people disappeared. It was a dicey space. A lot needed to be done before registering people as a cooperative.

Mr Tyrone Hawkes, Director: Strategy & Business Development, SAPPI, indicated they would love to see emerging farmers being merged into a cooperative so that they grew big instead of remaining emerging farmers.

Mr Capa remarked they had no reason not to believe people who told them things about forestry companies. He asked the companies what they were doing to address concerns from the forest communities, because those matters had to be resolved before they got out of hand. He asked if communities were made aware of available bursaries.

Mr Harvey Theron, Acting CEO: SAFCOL, said there would never be enough for the communities because the profit that the companies made was minute and the operating costs were high. The forestry companies need to sit down with the government and debate the issues emanating from the communities so that all stakeholders spoke with one voice. Presently, the forestry companies did not have plans for the communities. Another aspect was that affected state departments did not work together. That was why forest communities were upset about land claims and did not want to deal with representatives from the national departments. Companies could not give the communities land, because it was not theirs.

Mr Penwell Lunga, Director: PG Bison, said they have demonstrated in the communities they operate in what their company was doing. However, at the end of the day, it was felt what they were doing was not enough. As a result, 5 000 hectares of land was used by the community for grazing and farming.

Mr Hawkes indicated there have been no issues in the areas where they were working. If they existed, they would have been dealt with speedily.

Ms Thobi Mkhize, Head of Land: Mondi, referred to the issue of bursaries, and explained they dealt with 98 schools. It was an inclusive matter, but communities might not know the children who got the bursaries. She admitted that Mondi was not telling their positive stories, which was why they had procured the services of a communication practitioner to relay information to stakeholders. It was a gap that had been identified.

Ms Steyn wanted to find out how far SAFCOL had gone with land claims, because communities said the land was there, but it was not theirs. She asked if the forest companies were working well with municipalities, and indicated the companies had said nothing about farming in forests, such as grazing land, mushrooms, etc. AgriParks had been mentioned once.

Mr Theron replied that land claims were sitting at 60%. They needed to get communities involved in their business. When one looked at how much each family was going to get, one could see the whole thing was not sustainable. Already, they were spending money on the value chain and debating how the communities could be involved and do the things they procured from outside service providers. However, the Public Finance Management Act (PFMA) rules did not allow them to procure from the forest communities. The only option they had got was to try to get communities to be involved in the day to day running of the operation.

Mr Vilane indicated there were complexities involved in working with municipalities -- issues of ownership, and all sorts of dynamics. They had felt they needed to engage with a service provider to talk with the municipality, because there had been a lot of mistrust. As a result, relations with the municipality had improved drastically. Regarding farming in forestry, there was a lot of farming happening within forestry, like mushrooms, honey production, grazing, etc. They had identified sustainable pockets of land within Mondi. The Agrivillage, called Jabulani, was accommodating around 100 people.  Those who did not want to go had been made to understand the feasibility and practicality of their decisions and the nature of land they were occupying -- that it was rocky underneath and not suitable for agriculture. They were also trying to introduce livestock farming to see if people could share that with crop farming.

Mr Lunga reported that they interacted with the municipality on a quarterly basis. All the projects were driven by the municipality. There was an alignment of plans, because their company was the biggest employer in Ugie. There was a lot of farming happening in forestry.  As a result, Spar was using their produce.

Mr A Madella (ANC) wanted to establish if the forestry companies were employing people with disabilities. It was not acceptable for people with disabilities to remain in the dark. Companies needed to take cognisance that they were part of our society. Municipalities should be engaged with regard to the living conditions of the people in these forest communities. There were people who were staying on Mondi lands, but now they were fewer than before. There should be negotiations with the people to be sent to urban or peri-urban areas, or AgriPark areas.

Mr Mabece indicated interventions had been made by SAFCOL on centres dealing with disabilities. The target of 4% would be met as per the requirements of the shareholder compact.

Ms Mkhize said Mondi had a welfare programme called Isibindi which focused on disabilities. It was in constant communication with the Department of Social Development.

Mr Maloyi asked if it had been the forestry companies that had not allowed their employees to attend public hearings called by Parliament in Mpumalanga, and asked SAFCOL to comment on the shares it was supposed to transfer to communities. He commented that SAPPI’s Abatshintshi programme was a success story, and wanted to know if the programme was changing the lives of people.

Mr Mabece told the Committee that some of the people who were at the public hearings were from SAFCOL, including shop stewards, but there had been mention of companies like MTO, Waterhoud, Ezingodweni, SAPPI and Imvelo which had not allowed people to go to the public hearings. On minority shares to communities, he said the matter had been contentious from the beginning. The SAFCOL executive had indicated the shares should be transferred to the government, so that the government could decide of where to transfer these shares. He said the problems around evictions and accommodation had not caught the attention of SAFCOL, but they would be investigated.

The Chairperson asked if SAPPI had had a reason not to release people to attend the hearings.

Mr Hawkes said he would investigate what had happened, though he was not aware of it. He indicated that the Abatshintshi programme was the right thing for the community. It was a communication tool for SAPPI to exchange information and ideas with the community. He supported the idea of mixed agro from Mondi, because SAPPI had expertise in agriculture.

The Chairperson asked if the forest companies aligned their skills development plans with those of the municipalities, because the announcement of bursaries was just a public relations exercise. The Forestry Council had attended the Africa group discussion during the Forestry Conference, where issues of land degradation, soil corrosion, migrations, etc. had been discussed, but it had not mentioned these issues in its presentation. She wanted to know why it was not partnering with the government in these areas. How was SAFCOL doing when it came to beneficiation, and what was its impact on communities? Why was it not producing the same desks that were used by schools? She asked the forestry companies to comment on their support to small growers. She also asked PG Bison to comment on its learnership programme that was said not to provide access to jobs.

Mr Mabece referred to the Forestry Conference, and said the Industrial Development Corporation (IDC) had indicated money had been set aside for forestry, especially for businesses that were in forestry. That money had not yet been used. Concerning furniture projects, such as school desks, they had established a number of community cooperatives. There was development in the field of making furniture or desks. They were assisting these cooperatives to become independent entities or enterprises. Beneficiation had been a challenge, but it was a matter they were dealing with. They had been interacting with stakeholders like Eskom. There were also procurement issues that created problems. For instance, one could procure electricity without following tender procedures. He also pointed out theft was a massive problem for the industry. There were trucks that had been found carrying logs while using the wrong registration numbers. They would like the Committee to help them with legislation.

Mr Vilane said at Mondi they were doing things for themselves, but only up to a certain point. That was why they involved small growers in areas where they could not do things for themselves.

Mr Lunga said when it came to small businesses, the key thing was funding and skills development. Most people in the area they operated in were doing things for themselves. These were things they had not done before. When they had started with learnerships, they were designed for only a year. They had absorbed a few learners. And then there had been a demand from the municipalities to continue with the learnerships up to Level 2. They did not do the learnerships for their company only, but for candidates to be employed elsewhere. The candidates were given first preference by PG Bison when there were vacancies.

Mr Hawkes said that SAPPI would support any opportunity that might arise when it came to beneficiation, whether it was downstream or upstream. He wanted to know from the DAFF how much of its total budget was allocated to forestry.

Mr Robert Ramasodi, Acting Director-General: DAFF, said the annual budget of DAFF was R6.8 billion. Forestry was allocated R1 billion, which was the Department’s second highest cost centre.

The Chairperson wanted to know if the forestry companies were ready to implement the minimum wage. KZN was the second poorest province after North West, yet most of the forestry companies were operating from these provinces. The companies were telling the Committee about projects they were doing, but they were not improving what Stats SA was saying about the poverty levels in these provinces. If their plans were aligned to the programmes of the people, then that meant they were wasting money. The forestry companies were handling natural resources that could improve the lives of people.

Mr Lunga said PG Bison generally paid slightly higher than the minimum wage. The manufacturing section paid way beyond the minimum wage. The company had one non-South African who was from Zimbabwe, and was a fire expert. All the other employees were SA citizens.

Mr Hawkes said SAPPI had non-South Africans on its pay-roll, from executive directors to the lower levels. The company paid slightly higher than the minimum wage.

Mr Mabece said SAFCOL was ready to pay above the minimum wage. Their accommodation facilities were also used by people who worked for other organisations. They had not heard anything about squalid conditions, even though they had not seen them. They were not aware of any person employed who was a non-South African, but in the Mozambican operations they employed locals.

Mr Vilane indicated Mondi was ready to implement the gazetted minimum wage. There had been a lot of investment to improve accommodation. Non-South Africans who possessed critical skills were employed.

Mr Maloyi stated he was not happy with the response he was getting from the forestry companies regarding accommodation. The companies did not seem to be honest, because if Members went to these areas, they would be embarrassed by what the people would tell them.

Dr Mahango said the session had been an eye-opener, and the FSCC was going to use some of these documents to see if they were true and to hear from people on the ground. He urged the forestry sector to collaborate in its efforts, and not to operate in silos. If employees were not well treated, there was risk involved, because it would take only few seconds to set a whole forest on fire because of anger. Even if the companies had insurance against fire, it would not stop the fire.

The meeting was adjourned.
 

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