TO THE PORTFOLIO COMMITTEE ON AGRICULTURE, FORESTRY AND FISHERIES 23 JUNE 2015

1. BRIEFING BY THE DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES TO THE PORTFOLIO COMMITTEE ON AGRICULTURE, FORESTRY AND FISHERIES 23 JUNE 2015

2. PRESENTATION LAYOUT

3. FORESTRY MAP OF SOUTH AFRICA

4. ACRONYMS CARA Conservation of Agricultural Resources Act 1983 (Act 43 of 1983) CAT A Category A Plantations CAT B Category B Plantations CAT C Category C Plantations or Woodlots EIA Environmental Impact Assessment FED Forestry Enterprise Development GDP Gross Domestic Product HA Hectares NFA National Forests Act 1998 (Act 84 of 1998) NVFFA National Veld and Forest Fires Act 1998 (Act 101 of 1998) NWA National Water Act 1993 (Act 36 of 1998) NEMA Environmental Management Act 1998 (Act 107 of 1998) PIC Public Investment Corporation RLCC Regional Land Claims Commission SAFCOL South African Forestry Company TUP Temporary Unplanted Area SIP 11 Strategic Infrastructure Project

5. THE CONTEXT: COMMERCIAL AND NATURAL FORESTS

6. DEFINING KEY TERMS (CONTINUED) Afforestation - the planting of new forests on land which historically has not been covered by forests. Natural forests - multi-layered vegetation units dominated by trees, whose combined strata have overlapping crowns (75% and more), and where grasses in the herbaceous stratum are generally rare. Plantation - a group of trees cultivated for the exploitation of wood, bark, leaves or essential oils in the trees. Thicket - is a closed shrub land to low dense woodland dominated by evergreen, sclerophyllous or succulent trees, shrubs and vines, many of which have stem spines. It is often almost impenetrable, is generally not divided into strata, and has little herbaceous cover. Savanna - a grassland ecosystem characterised by dispersed indigenous trees (mixed communities of typical savanna trees, shrubs, grasses and herbs).  TUP - Plantation areas that  were clear-felled and have not been replanted yet.

7. PURPOSE To brief the Portfolio Committee on Agriculture, Forestry and Fisheries on: Forestry plantations under the Department of Agriculture, Forestry and Fisheries (DAFF) management; Assistance provided to community plantations; and Coordinated activities between the Department and the Departments of Water Affairs and Sanitation (DWS), the Department of Rural Development and Land Reform (DRDLR) to address challenges associated with access to water rights and unresolved land claims on forest land.

8. BACKGROUND Forestry comprises commercial plantations, natural/indigenous forests, woodlands and trees outside forests. Forestry is a rural based activity with potential to contribute to development of rural economies. The forestry sector is a major contributor to the South African economy through its well developed and diversified forest products industry. According to Forestry South Africa, currently Forestry contributes 25.5% to agriculture Gross Domestic Product (GDP) ( 2013). Forestry supports manufacturing subsectors such as sawmilling, paper and pulp production, mining and construction.

9. BACKGROUND (CONTINUED) DAFF manages 60 200 hectares ha of planted plantations. DAFF also enforces the relevant Acts and checks compliance therewith. This is done through the Regional offices. The Department (DAFF) is involved with Forestry Enterprise Development (FED) through supplying technical help and marketing assistance to small growers. Since 2014, DAFF is also investigating the role of Agro-Forestry in local household food security. The DAFF is working towards certification of three plantations by 2018 with the first one in 2016. The plantations are Hlokozi in KwaZulu-Natal, Katberg in the Eastern Cape and Voorspoed in Limpopo.

10. BACKGROUND (CONTINUED) • In 2012 the sector created 165,300 jobs across the value chain.

11. BACKGROUND (CONTINUED) Forest coverage in South Africa is quiet minimal compared to other countries, but the output is high when compared with other land use types.

12. BACKGROUND (CONTINUED) The forest products industry ranks among the top exporting industries in the country – maintaining a positive trade balance.

13. BACKGROUND (CONTINUED) Of the total land area 122.3 million ha; only 1,268,433 ha or 1% is used for forestry plantations. • The area of land under plantation has declined from 1.5 million ha in 1997/98 to 1.2 million ha in 2012/13.

14. BACKGROUND (CONTINUED)

15. STATUS OF DAFF COMMERCIAL PLANTATIONS

16. INDIGENOUS FORESTS AND WOODLANDS Indigenous forests cover about 492 700 ha. They are classified into seven (7) groups namely: Southern Afrotemperate Group, Northern Afrotemperate Group, Northern Mistbelt Group, Southern Mistbelt Group, Scarp Group, Northern Coastal Group and Southern Coastal Group. Provincial distribution is as follows: Eastern Cape- 46%, KwaZulu-Natal- 29%, Western Cape- 13%, Mpumalanga - 7% and Limpopo - 5%. DAFF manages about 189696 ha of indigenous forests across the country. Woodlands cover between 29 and 39 mil hectares. The main DAFF role is conservation planning and compliance promotion.

17. INDIGENOUS FORESTS AND WOODLANDS (COMMUNITIES AND USES OF FORESTS)

18. DAFF ROLES AND RESPONSIBILITIES Develop national norms and standards for indigenous forest management. Management of State-owned indigenous forests. Rehabilitation of degraded forests in line with Outcome 10 on protection of environmental assets and natural resources. Conservation planning for indigenous forests and woodlands. Ensure compliance with National Biodiversity Management Frameworks. Forest assessment, monitoring and reporting (national and international). Integrated environmental management. Enforcement of the National Forests Act, 1998 and National Veld and Forest Fire Act, 101 of 1998.

19. FORESTRY LIVELIHOODS FROM INDIGENOUS FORESTS AND WOODLANDS About 80% of rural households use fuelwood as their primary source of energy. About 28 million people use traditional plant medicine. Over 65% of the plant material comes from forest species. Approximately 1/3 of medicinal plant material is tree bark. Rural poor are more dependent on forest resources for survival (State of the Forest Report 2009).

20. PROBLEM STATEMENT • The forestry sector is currently facing several challenges impeding government objectives, specifically economic growth, employment creation and rural development. These challenges include: • Low afforestation rate due to the cumbersome licensing process. • Under investment in long-rotation timber such as sawlogs. • Dominance by a few big vertically integrated forestry operations. • Risks associated with climate change and variability manifesting through fires, pests and diseases. • The slow pace of transformation since the gazetting of the Transformation Charter.

21. PROBLEM STATEMENT (CONTINUED) • Climate change that results in varying temperatures and unreliable rainfall. • Heavy dependence of rural communities who live adjacent to forests is putting pressure on indigenous forests and woodlands. • Unsustainable harvesting methods which cause degradation and desertification through loss of area afforested.

22. POLICY AND LEGISLATIVE FRAMEWORK • The White Paper on Sustainable Forest Development (1996) states that government should withdraw from direct management of state plantations. • It also states that the state should re-position itself as a forestry sector leader and regulator. • The National Forests Act of 1998 provided for certain rights to communities and individuals. These rights of include: access and use, subject to the provisions of the Act. • Through this Act, communities or individuals could enjoy rights through lease agreements, licences, servitudes, community forestry agreements and / or other agreements.

23. POLICY AND LEGISLATIVE FRAMEWORK (CONTINUED) • The Forest sector Transformation Charter was gazetted in 2009 with the objective of growing the sector while ensuring transformation. • While the White Paper highlights the role of the state as a regulator, the National Development Plan (NDP) provides space for being an enabler for economic growth, rural development and employment creation. Forestry interventions such as afforestation and rehabilitation of plantations feature in the agricultural policy action plan and seek to address economic development and job creation. Rehabilitation work in plantations such as maintenance of roads and construction of fire breaks, contribute to Strategic Infrastructure Project (SIP 11) on Agricultural Logistics and Infrastructure.

24. POLICY AND LEGISLATIVE FRAMEWORK (CONTINUED) These initiative contribute to the Medium -Term Strategic Framework through Outcome 4 on creating decent employment through inclusive economic growth.

25. MAIN CHALLENGES AND CONSTRAINTS • Limited opportunity for expansion of the forestry estate due to the cumbersome licensing process and the withdrawal of strategic partners support by forestry private companies due to economic downturn resulting in delays in planting. • Challenges with the recommissioning process in Mpumalanga and Western Cape. • The negative impact of climate change, forest fires, pests and disease. • Under investment in the forestry sector, especially the exclusion of forestry in the funding mechanisms within the department.

26. MAIN CHALLENGES AND CONSTRAINTS (CONTINUED) • Challenges related to the management of State forests can be summarised as follows: • Ageing and fragile workforce. • Deteriorating working and living conditions. • Budget limitations for operations (including Supply Chain Management procedures). • Ageing infrastructure. • Illegal clearing of trees/ forests. • Afforestation licenses still take a long time before they are issued.

27. MAIN CHALLENGES AND CONSTRAINTS (CONTINUED) • There is no standards set in terms of time that it will take to process a licence. • The Departmental funding mechanisms do not provide for forestry. MAFISA funding framework reviewed to include forestry. CHALLENGES REGARDING THE RESOLUTION OF LAND CLAIMS The process of finalising land claims takes long and this has unintended consequences of: • communities not receiving the rental money they are entitled to. • communities ending up being in conflict with the company that is operating state forest land – thus increase in number of fires in the plantations thereby a risk to the investment.

28. TRANSFORMATION IMPERATIVES AND SUCCESSES To address government obligations under the Forest Sector Transformation Charter the government is in the process of transferring the Mbazwana State plantations to the Mabaso, Mbila and Manzengwenya communities. The transfer is at an advanced stage with the following milestones achieved: • The trust has been established (Tembe, Mbila and Mabaso). • Funding from the jobs fund for refurbishment and operations totalling R100 million. The Department assisted with the application for funding from the Jobs Fund. The Department is contributing towards the ‘own contribution’ required from applicants by the Jobs Fund. The matter is being considered towards finalisation.

29. TRANSFORMATION IMPERATIVES AND SUCCESSES (CONTINUED) The model could be replicated elsewhere for the transfer of State plantations. The leasing of the Category A plantations has resulted in the accumulation of lease rental money that the Department has kept in a public investment account. • DAFF has established the Kabelo Land and Restitution Trust that is responsible for the collection, investment and disbursement of rental money to the rightful land reform beneficiaries.

30. TRANSFORMATION IMPERATIVES AND SUCCESSES (CONTINUED) The first disbursement of R86.4 million was done to eight communities in the EC during the year 2011. Those are:

31. SUPPORT TO COMMUNITY PLANTATIONS The Department developed the afforestation strategy in order to support new entrants and participants to the market. The strategy is also aimed at addressing the expansion of forestry plantations to address the country ‘s timber demands. The support is focused on two areas: • Growers needing support to establish plantations (Afforestation). • Existing Growers( Post settlement Support).

32. AFFORESTATION Afforestation has potential to create jobs and stimulate local economic development, especially in rural areas. This can be achieved through primary and secondary production industries. However, afforestation is regulated under the National Water Act (NWA) 1998, Conservation of Agricultural Resources Act (CARA) 1983 and the National Environmental Management Act (NEMA) 1998. The requirements of these regulations must be met before afforestation can take place. License applications by individuals, communities and industry have been taking long time leading to the frustrations by applicants, who in some instances withdraw their applications leading to low afforestation rate.

33. AFFORESTATION (CONTINUED) The other issues faced by communities and individuals include affordability to pay for the costly Environmental Impact Assessment (EIA). In order to address the challenges faced by communities and industry the Department made an effort to speed up the process by conducting studies to assess the afforestation potential in the whole country excluding the Western Cape where the potential would have been insignificant. Results for afforestation studies. Mpumalanga -10 000 ha (provided water trading can be done) • Limpopo - 6 000 ha ( provided water trading can be done) • KwaZulu-Natal - 39 000 ha • Eastern Cape- 100 000 ha

34. AFFORESTATION (CONTINUED) • The Department has set up the National Afforestation Technical Task Team to deal with bottlenecks affecting community afforestation and similar forums have been set up in the Eastern Cape and KwaZulu-Natal to deal with same and other forestry development matter. • After the Afforestation studies were concluded, the Department funded the Environmental Impact Assessments for the Eastern Cape province for an area of 13000 ha. This resulted in Records of Decision issued for an area of 10500 ha. The amount spent was about R4.2 million.

35. AFFORESTATION (CONTINUED) • In the current financial year the Department will fund and conduct Environmental Impact Assessments in KwaZulu-Natal for an area of 5000 ha Once the Records of Decision are issued, this will pave the way for afforestation licenses and subsequent plantings.

36. POST SETTLEMENT SUPPORT The Branch Forestry and Natural Resources Management is developing a strategy for Forestry Post Settlement Support. The strategy will focus on (extension and advisory services, funding mechanisms, training and incubation programmes). In addition the Department is finalising the affforestation protocols document. This is a document aimed at ensuring that there is fairplay between big established industries and small growers. A draft document is in place.

37. POST SETTLEMENT SUPPORT (CONTINUED) A guideline/toolkit has been developed to support small growers and other producers. Forestry advisory services in the regions have been trained on the use of this guideline and it is being rolled-out to the beneficiaries. The guideline provides for best practice operations and how to obtain the necessary documentation and approvals before starting with afforestation.

38. WATER LICENSING AND WATER RIGHTS The Department has established an Intergovernmental Committee to deal with water licensing issues. Currently the committee is comprised of DAFF, Department of Water and Sanitation, Department of Trade and Industry, the Forestry Industry and Industrial Development Corporation as a Development Finance Institution. When a need arise other crucial Departments like Rural Development and Land Reform are invited to the Committee to deal with Community Resolutions and other land related matters. The National Water Act 1998 provides for water trading between land owners. This provision makes it possible for land owners to trade water and the Department of Water and Sanitation administers the process.

39. WATER LICENSING AND WATER RIGHTS (CONTINUED) Water trading is being at the National Afforestation Technical Task Team meeting and water rights issues will be discussed in future quarterly meetings of DAFF/ Department of Rural Development and Land Reform and Department of Public Enterprises. Discussions at the National Afforestation Technical Task Team and the future engagements with Departments of Rural Development and Land Reform and Public Enterprises will ensure that matters of water rights.

40. RESOLUTION OF LAND CLAIMS ON STATE FORESTS LAND In 2001, Cabinet took a decision to restructure State owned plantations. State owned plantations grouped into five (5) packages. Business on the four (4) packages sold through a tender process and State land was leased for a period of seventy (70) years. The fifth package is being managed by the South African Forestry Company (SAFCOL). State entered into a Notarial Deed of Lease Agreements with the following companies:

41. RESOLUTION OF LAND CLAIMS ON STATE FORESTS LAND (CONTINUED)

42. RESOLUTION OF LAND CLAIMS ON STATE FOREST LAND (CONTINUED) • The Lease Agreements are administered by DAFF on behalf of the State with the following undertakings: • The companies pay an annual rental for the use of the land. • DAFF has established the Kabelo Land and Restitution Trust that is responsible for the collection, investment and disbursement of rental money to the rightful land reform beneficiaries (as stated above). • The rental money is currently invested with the Public Investment Corporation (PIC) with a balance of R304 168 493.00 (30 March 2015).

43. RESOLUTION OF LAND CLAIMS ON STATE FOREST LAND (CONTINUED) Settlement framework for land claims on SAFCOL ( category A plantations) The manner in which claims on the leased land are to be settled is captured in the lease agreements(clause 18 & 19). The terms of settlement are as follows: • When a claim is settled against the leased land, government shall procure that the provision of the lease agreements continue to apply on the claimed land by entering into an appropriate head lease agreement with the land claimants. • Government will pay the lease rentals collected from the private companies to the land claimants.

44. RESOLUTION OF LAND CLAIMS ON STATE FOREST LAND (CONTINUED) The resolution of land claims is the responsibility of the Regional Land claims Commissioner(RLCC). DAFF is having quarterly engagements with the RLCC to track down progress on forestry land claims and to assist with information where necessary. Settlement framework for claims on DAFF category B & C plantations When a claim is settled on DAFF plantations, government shall transfer ownership of the plantation assets to the claimants. Government shall also assist the land claimants with the preparation of business plans for plantation management.

45. STATUS OF FORESTRY CLAIMS ON LEASED STATE FORESTS

46. STATUS OF FORESTRY CLAIMS ON DAFF MANAGED PLANTATIONS (CATEGORY B & C)

47. FORESTRY AMENDMENT BILLS To enhance forestry and natural resources management, the department has gazetted the Preservation and Development of Agricultural Land Framework and the Forestry Laws Amendment Bills. • The purpose of the National Forests Act, 1998 is to promote sustainable management and development of forests for the benefit of all. • The National Veld and Forest Fires Act, 1998 aims to prevent and combat veld, forest and mountain fires throughout the republic; as well as provide for a variety of institutions, methods and practices for achieving the purpose. • The purpose of PDALF is the efficient and effective preservation and development of agricultural Land to ensure sustainable long term food security and job creation. Public consultations have already commenced on all the above.

48. STRATEGIC INTERVENTIONS A study was conducted to investigate forestry workers conditions and recommendations will be implemented. The inter-governmental forum has been established to deal with blockages to the afforestation licensing conditions. More effort still needs to be put in this area of work to ensure the expansion of forestry plantations , especially in communal areas.

49. STRATEGIC INTERVENTIONS (CONTINUED) The Department has facilitated afforestation licences by paying for the costly Environmental Impact Assessments. The implementation of sector adaptation and mitigation plans as well as the forestry protection strategy. Refurbishment of forestry plantations and worker villages. The Department will engage in the following initiatives: • meeting with Departments of Health, Human Settlement, Education, Safety and Security, Labour and Water and Sanitation, to resolve Forestry workers conditions, health, housing and sanitation issues.

50. STRATEGIC INTERVENTIONS (CONTINUED) • meeting with the Department of Water and Sanitation regarding measures to avoid the lengthy period that it takes to issue afforestation licenses and the exemption of small growers from paying water tariffs in the years of establishment. • an intervention in collaboration with funding institutions to address underinvestment in the forestry sector and the establishment of the forestry grant to support small growers. More funding will need to be made available to ensure refurbishment of state plantations and support research and development. A study was commissioned through the Industrial Development Corporation to investigate the best option to roll-out re-commissioning in the Western Cape.