FOREST SECTOR CHARTER COUNCIL PRESENTATION TO THE DEPARTMENT OF AGRICULTURE, FORESTRY & FISHERIES PORTFOLIO COMMITTEE Matters raised to Companies 15 MAY 2018 DR. DE MAHANGO (FSCC CHAIRMAN)

PRESENTATION OUTLINE Background Matters raised Conclusion Non involvement by communities on forestry issues Information dissemination to Forestry located communities Isolation of forest located communities by industry Poor working conditions in forest farms Lack of enforcement measures resulting in non- compliance with B-BBEE Poor performance on Ownership, Management Control & Skill Development elements Poor women participation Poor living conditions of employees ( low wages, unfair treatment, dilapidated housing, evictions, tenure issues etc) Conclusion

FSCC responses to Portfolio Committee Background Council invited to Portfolio Committee meeting in Nov 2017 Council presented latest status of Transformation Certain Companies also invited to present on Transformation (B-BBEE) Council informed about reactions from communities Council mandated to react to matters raised an action plan Aim To present findings to the Portfolio Committee

Issue Action Findings   Non- involvement or participation of communities in forest issues Community Outreach Programme (COP) Visits to communities for information sharing and views with reference to involvement was divided into three phases as follows: COP Phase 1 COP Phase 2 COP Phase 3 Currently executing Phase 2. B-BBEE programmes implemented to enhance community involvement Enterprise and Socio- Economic programmes implemented Lease rental monies not a value add Challenges to B-BBEE e.g. Funding, land availability and Exit areas etc Illegal operations e.g. pole treatment industry CEO Visits Interaction with CEO about the dictates of the Code (B-BBEE) and how they better stand in improving the dictates of Broad Based Black Economic Empowerment. Company’s B-BBEE strategies undertaken Industry and community preferences identified Challenges of B-BBEE explained, e.g. water use licenses, illegal logging, timber theft, land reform, change of land use, rail and transport etc Enterprise and Socio-economic development initiatives recognised Community based initiatives implemented, e.g. agro-forestry, cattle grazing, collection of fire wood etc

Issue Action Findings CONFIDENTIAL   Information dissemination to forestry located communities The matter is addressed through the Community Outreach programme and CEO visits Findings similar to first slide. Isolation of forest located communities by industry Ongoing CEO visits to industry members Lobbied industry members willingness to improve communication and interaction with communities CONFIDENTIAL

Issue Action Findings Poor working conditions in forest farms   Poor working conditions in forest farms Visits to implicated Companies have been initiated Planned visits to other Companies Mondi and MTO to be visited before the end of June 2018 A field visit with CEO of SAPPI revealed the opposite (A report is attached) Another field visit to another company (not implicated) also revealed good working conditions

Issue Action Findings   FSCC lacking enforcement powers resulting in non-compliance by industry This is a sequel to the findings of the Annual Status report The Status reports reflects compliant companies Non-compliant industries are subjected to the following: Certificate of Good Standing to be issued to compliant companies A list of compliant companies to be given to government departments with internal levers for afforestation solicited to ensure that Business with reference B-BBEE is allocated only to compliant companies Development and issuing of enforcement guidelines compliant with section 10 and 13A of the B-BBEE Act as Amended Introduction of a Mandatory levy All industry members not affiliated to the associations must be forced to pay a mandatory levy A proposal is being finalised by the Council None as yet as the actions are still proposals

Issue Action Findings   Poor performance with reference to ownership, Management Control & Skills Development CEO visits being undertaken Annual Status Report The Council is finalising the latest status of transformation Amended Forest Sector Code (FSC) prioritised Ownership and Skills Development elements CEO visits revealed that industry of creating training centres to ensure upward mobility of their employees.    Prioritising Ownership and Skills Development has subtle coerced industry to improve on these elements Poor women participation In-depth analysis on Amended Scorecard (as women participation is emphasized) Prioritised Outreach Programmes targeted for women organised workshops Improvement in ownership deals through Trusts with most beneficiaries being women No findings yet Conditions of employees (dilapidated housing, low wages, unfair treatment, evictions & tenure issues etc) Low wages DAFF to liaise with DoL Undertake visits to implicated companies Company visited to date showed organised housing and ablution facilities No reported evictions Salaries paid above minimum wage

FSCC responses to Portfolio Committee Conclusion Status of Transformation to be issued by August 2018 More planned visits to companies Engagement with relevant Government departments Interaction with aggrieved communities Consolidated report to be presented to Portfolio Committee

THANK YOU