Broad-Based Black Economic Empowerment: workshop

Water and Sanitation

18 October 2005
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Meeting report

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE

WATER AFFAIRS AND FORESTRY PORTFOLIO COMMITTEE
19 October 2005
BROAD-BASED BLACK ECONOMIC EMPOWERMENT: WORKSHOP

Chairperson: Ms C September

Documents handed out:
PowerPoint Presentation: Broad-based Black Economic Empowerment in the Forest Sector
Draft Guidelines on Charter Scorecard

SUMMARY
The Department reviewed the status quo in the forest and commercial forest sector, the nature of broad-based black economic empowerment (BBBEE), its objectives and tools, the Charter process requirements and progress, sub-sector challenges, the work programme, strategic issues for the Charter, key opportunities and the way forward.

The meeting was an interactive conversation between the Committee and the Department to advance the interests of black people in the South African forestry industry.

Members made suggestions regarding the composition of the steering committee, the inclusion of provinces without forests, the duration of workshops, increased communication channels, job creation for youths,
emerging entrepeneurs, the furniture industry, short-term contracts, and scorecard criteria.

MINUTES
Briefing

Ms B Schreiner, Department Senior Executive Manager: Policy and Regulation, provided an overview of the status quo in the forest and commercial forest sector; BBEE tools and requirements; the progress to date with development of the Forest Sector Charter, the work programme, the strategic issues to be addressed in the Charter and the way forward. (For details, refer to the power point presentation)

Discussion
The Chairperson (ANC)enquired as to the composition of the steering committee established to drive the Charter development process.

Ms Schreiner replied that there were about twenty members on the committee from sectors such as unions, Forestry South Africa, contractors, independent growers, SAPPI and Mondi.

The Chairperson remarked that Mondi and SAPPI had initially been opposed to inclusion.

Ms Schreiner agreed. She explained that the parameters for the sector had been defined. The pulp and paper manufacturers had not wanted to be included, but the Minister and Department had felt that they should be, as they were part of the value chain. The issue of licensing had been cleared before they had come on board. The furniture industry had not been included in the charter as only 10% of furniture was made with wood.

Mr J Arendse (ANC) asked whether the workshops held in Mpumulanga and the Limpopo were to be the last.

Ms Schreiner replied that they were.

Mr V Mabuya-Khulu (ANC) felt that one day was not sufficient to capture the views expressed in the workshops and suggested that two days would have been better.

Ms Schreiner responded that it was time-consuming for consultants and members to attend three consultation processes as they had to take time out from their businesses, and so it was not financially viable for them.

The Chairperson noted that the Committee had previously found that small growers and women had difficulty attending meetings. The community was not organised and lacked representation. He was of the opinion that the voice of King Goodwill Zwelithini should be heard. During oversight visits to KwaZulu-Natal, the Eastern Cape and Mpumulanga, the communities had expressed unhappiness concerning forestry. He recommended the Department speak to these communities.

Ms Schreiner replied that the Department could extend their consultation to hear the views of small growers and women prior to the workshop.

The Chairperson felt that the Department should provide relevant information to other members of parliament and not only the Committee. The Department should consider using radio stations to raise awareness of the BEE process in forestry. He suggested they consult the national framework in this regard. Products of forests were to be found in all provinces, so all provinces should be involved in the consultation process.

Ms Schreiner responded that the documents were neither intelligible nor user-friendly to stakeholders and gave the scorecard as an example. She agreed that an informed consultation process was needed.

Mr Z Kati (ANC) suggested a pamphlet be distributed during oversight visits to increase the awareness of communities.

Ms Schreiner agreed that simple and clear communication should be circulated to communities in the eleven national languages.

Mr P Ditshetelo (UCDP) congratulated the presenter on providing valuable information. He asked the Department to consider youths aged between 16 and 35 for job creation initiatives and the potential for them to be custodians of the country’s heritage.

Ms Schreiner agreed that the challenge of the youth needed to be considered.

Mr Ditshetelo enquired whether the Department was marketing the process to other provinces, which did not have forests, so that employment could be created. He felt that the process should be sold to communities for them to buy into it rather than being imposed on them. An interactive process would ensure that the Department’s efforts would not be derailed.

Ms Schreiner responded that there would be communication regarding development and opportunities in the sector. There were afforestation opportunities in the Eastern Cape where 60 000 hectares of plantations were being planted and 70 000 in KwaZulu-Natal. The clearing of alien trees in the Working for Water Programme would make timber available and this initiative would be used to stimulate enterprise development so that communities could benefit. However, the initiative would not be sustainable.

Mr B Mosala (ANC) asked why only 10% of products manufactured by the furniture industry were comprised of wood. As lay persons viewed furniture as being made from predominantly wood , he required clarity on why the furniture industry was being excluded from the Charter.

Ms Schreiner responded that most furniture was not made of wood but of plastic which was an oil product. The materials primarily used to make furniture were plastic, foam, rubber, metal, fabric and a small percentage of wood. South Africa only had 7% indigenous forests whereas Zambia, for example, had 37%. The Department needed to link up with the departments of Trade and Industry, Agriculture and Land Affairs in the Charter process.

Mr Arendse felt that short-term contracts between private entities should be dealt with like fishing rights. Banks did not offer loans on one year contracts. Longer term contracts, for example a five year contract, were needed, or else BEE would not be successful. The government could apply pressure to extend the contracts. He recommended that the DTI be approached for funds.

Ms Schreiner felt that the suggestion of using fishing rights, as an example, was sound. The question was one of monitoring.

Mr Sibuyana (IFP) said that plantations, and not forests, consumed lots of water. He believed that South Africa did not have enough water resources and questioned how this concern was reconciled.

Ms Schreiner replied that the western provinces did not have enough water to make the growing of trees financially viable. Most trees were grown on the eastern side of the country where the climate and the soil allowed it to be financially viable.

The Chairperson suggested that the Department draw on lessons from other charters. Policy, law and forestry formulation legislation mitigated against the empowerment process.

Ms Schreiner replied that the Department had learnt from other charter processes. The Department would be meeting with chairpersons of the other charters, whether or not those had been successful.

The Chairperson felt that the BEE process should be an enabling process for both the environment and communities. The scorecard criteria should be underpinned by policies and political direction. Blacks and women should not become merely beekeepers, ferns growers or mushroom collectors in forests. There had been a skewed perception that had equated BEE with Patrice Motsepe and Cyril Ramaphosa. Job opportunities should be used as a turnaround for job distribution. She suggested that the budget be used as a tool to deal with the issues raised.

Ms Schreiner replied that enterprise should be built across the value chain and the focus should not only be on the growing sector. The DTI and the Department would look at new enterprises creatively.

The Chairperson asked how the Department had used opportunities to address policy issues in forestry.

Ms Schreiner thanked her for pointing out the issue and admitted that the Department needed guidance regarding implementation and policy.

The Chairperson questioned how big companies would help smaller companies.

Ms Schreiner pointed out that SAPPI was an international company and not a South African company. The ownership issue was complex. Trade-offs were needed among higher management and investment targets to compensate for constraints.

The Chairperson reminded Ms Schreiner that Mr Faizel Ismail (South Africa’s Ambassador to the WTO) had put forward interesting views to the World Trade Organisation in Geneva. The Department would be wise to follow that report. The issue had been dealt with at the President International Council. The DTI could provide further guidance on the issue.

Ms T Lishivha (ANC) felt that disabled citizens should also be included.

Mr Sibuyana felt there should be a built-in supply mechanism for small sawmill operators.

Ms Schreiner responded that there was an overall challenge to meet the supply needs of South Africa and that there was indirect empowerment of small millers.

The Chairperson urged Members to make further suggestions in the future, which would be presented to the Department. Water and Forestry was not a ‘Cinderella' issue, but an important industry. She thanked the presenters for a stimulating morning.

The meeting was adjourned.

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