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FOREST SECTOR CHARTER COUNCIL

FOREST SECTOR CHARTER COUNCIL. Department of Agriculture, Forestry and Fisheries Portfolio Committee 19 June 2013 Ms Zodwa Phakedi: Executive Director. PRESENTATION OUTLINE. Forest Sector Charter Forest Sector Charter Council Functions of the Charter Council

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FOREST SECTOR CHARTER COUNCIL

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  1. FOREST SECTOR CHARTER COUNCIL Department of Agriculture, Forestry and Fisheries Portfolio Committee 19 June 2013 Ms Zodwa Phakedi: Executive Director

  2. PRESENTATION OUTLINE • Forest Sector Charter • Forest Sector Charter Council • Functions of the Charter Council • Progress in the implementation of the Charter • Monitor & report on implementation of BBBEE Status. • Structure of the Industry • Progress made within the Sub-sectors • Challenges

  3. Forest Sector Charter • Originates from the BBBEE Act, No 53 of 2003. • Launched in 2005, established a Steering Committee. • 2005-2008 draft Charter developed by working groups & Steering Committee. • FBBBEE draft Charter gazetted for public comments in May 2008. • Published as a Sector Code in June 2009.

  4. Forest Sector Charter (cont) • Main objective -“To extend economic opportunities and benefits of Forest Sector to the previously disadvantaged black groups”. • Scope of application • Growers • Contracting • Fibre • Sawmilling • Pole & • Charcoal sub- sector

  5. Forest Sector Charter Council • Also “Council” launched in May 2008. • A section 21 Company. • Composition: 19 Board members -Industry, Government, Labour, Communities, FP&M & an independent Chairperson. • Main responsibility -To facilitate, oversee,encourage, monitor & report on the implementation of the Charter. • 3 strategic session, highlighting strategic objectives & quarterly meetings per annum.

  6. Forest Sector Charter Council (cont) • Foresight exercise in 2011 to craft preferred future for sector . • Reporting: • The President’ BEE Advisory Council, • Minister of Trade & Industry & • Minister of Agriculture Forestry & Fisheries. • Currently housed at SAFCA offices, Isando • Secretariat - Executive Director, Researcher & Office Administrator.

  7. Functions of the Charter Council • Encourage,support and facilitate implementation of charter • Review yearly priorities. • Identify new activity areas. • Define work programme and & role of task teams. • Review & prepare business plan and budget highlighting prioritised activities. • Monitor andreporton Charter undertakings • Solicit progress reports from industry & government on Charter obligations. • Monitor progress.

  8. Functions of the Charter Council (cont) • Monitor andreporton Charter undertakings (cont) • Identify potential & emerging issues & • Tabulate actions and adjustments required. • Monitor andreporton the BBBEE status • Solicit scorecard information from verified enterprises. • 7 Scorecard elements namely; Ownership (O), Management Control (MC), Employment Equity (EE),Skills Development (SD), Preferential procurement (PP), Enterprise Development (ED) & Socio-economic Development (SED).

  9. Functions of the Charter Council (cont) • Monitor andreporton the BBBEE status • Scoring differs depending on size of enterprise. • Exempted Micro Enterprises (EME), turnover < 5M no elements scoring. • EME automatically assume a level 4 status. • EME can assume level 3 if 50% black owned & comply with industry Codes of Good Conduct. • Qualifying Small Enterprises (turnover R5M- R35M) any 4 of the 7 elements.

  10. Functions of the Charter Council (cont) • Monitor andreporton the BBBEE status (cont) • Medium & large enterprises (MLE) turnover > R35M scored -7 elements. • Scorecard information valid within the financial year. • Third transformation report issued. • Fourth report on progress. • Data determines B-BBEE status & used in tabulating recommendations & necessary actions.

  11. Structure of the Forest Sector

  12. Structure of the Forest Sector (cont)

  13. BEE status - Large Forestry Companies • Data reflects total coverage . • Seen improvements in almost all the elements. • Lowest recordings seen in MC, EE & SED. • Sub- sector currently at level 4, similar to 2011.

  14. BEE status- Contractors • Coverage only for medium sized enterprises. • Performance not varied due to the compliance to any 4 elements. • Insignificant performance seen in SD and PP. • A level 3 through out.

  15. BEE status - Pulp & paper • Total coverage. • Poor performance in MC, EE SD & SED. • Sub sector improved from level 4 - 3 in 2011 & 2012.

  16. BEE status - Board producers • About 96% coverage . • Poor performance in MC, EE, & SED. • Improved from a level 6 in 2010 – 4 in 2012.

  17. BEE status- Large sawmills • Good coverage of about 70%. • Struggling in terms of MC, EE, & SD. • Improved to a level 5 similar in 2011, but one level above compared to 2010.

  18. BEE status - QSE sawmills • Average coverage. • Insufficient data in 2011. • Not variable performances within the elements, except for MC & SD. • Improved from a level 5 in 2010 to a level 4 in 2012.

  19. BEE status - Pole treaters • Low coverage about 10%. • Average performance in 6 elements. • Poor performance in SED in 2012. • Achieved a level 4 status in 2012, just one level below 2011.

  20. Average scores & BEE level

  21. Average scores & BEE level (cont)

  22. Sector Performance • BBBEE Status • F11/12 average score of 66.7, sector a level 4 contributor. • Score similar to score in 2010/11 but a level above 2009/10 score (level5). • Sector performing well insocio-economic development enterprise development, preferential procurement, and ownership. • Improvement -skills development,% of target score still 41% . • Poor performance on management control & employment equity.

  23. Challenges • B-BBEE status • Insufficient in data collection e.g. no data for Chipping plants in 2012. • Reports by most enterprises in the Charcoal sub-sector is a challenge. • Some accreditation still through the generic scorecard. • Weighted scores / allocation of one scorecard. • Unprescribed methods for non- compliance.

  24. Challenges (cont) • Other • Land availability for Forestry activities. • The pace for settling Forestry related land claims. • The models for distributing category B & C. • The pace at which SMME are upgraded to large enterprises. • The introduction of zero tariffs.

  25. Challenges (cont) • Other • Insufficient funding for Charter undertakings. • Inaccessible funding from funding institutions. • Insufficient funds for Environmental Impact Assessment( though Dti & DAFF assisting). • Water use licenses application process, (though Letsema project by DWA of great assistance).

  26. Challenges (cont) • Other • Increase in Temporary Unplanted Areas (TUP). • Exclusion of other key stakeholders in the Charter Council. • The marginalised Forestry profile.

  27. F2013/14 Business plan priorities • Implement an in-house Web-site & Web-based reporting System. • Facilitate the re-alignment processes of the Codes of Conduct. • Conduct a Comprehensive Charter Review Process. • Conduct a Comprehensive Study on Import Tariffs. • Develop & Implement a Communication strategy & plan. • Intensify the Outreach Programme- Awareness Campaigns.

  28. Conclusion - Are we there? SECTOR IS WELL ON ITS WAY.

  29. THANK YOU

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