The SA forestry and forest products sector marks 15 years of transformation

The Forest Sector Charter Council (FSCC) marks a decade and a half of overseeing and reporting the forestry and forest products sector's progress in achieving its Broad-Based Black Economic Empowerment (B-BBEE) codes of good practice targets.
The Forest Sector Charter Council (FSCC) marks a decade and a half of overseeing and reporting the forestry and forest products sector's progress in achieving its Broad-Based Black Economic Empowerment (B-BBEE) codes of good practice targets.

The Forest Sector Charter Council (FSCC) marks a decade and a half of overseeing and reporting the forestry and forest products sector's progress in achieving its Broad-Based Black Economic Empowerment (B-BBEE) codes of good practice targets.

The B-BBEE Act aims to advance economic transformation and enhance the economic participation of black people in the South African economy. The FSCC was established through the Forest Sector Code. Its mandate is to oversee transformation in the forestry sector's growers, contractors, fibre (pulp and paper), sawmilling, poles and charcoal industries.

The council consists of industry, government, community and labour representatives. It reports to the ministries of forestry, fisheries and the environment (DFFE) and trade, industry and competition (DTIC). It is chaired by Nelly Ndlovu, CEO of Mondi Zimele.

Forestry South Africa (FSA), Sawmilling South Africa (SSA), and other industry bodies encourage its members to continue reporting on B-BBEE and to share their certificates and underlying reports with the FSCC. The council's annual status report is the only truly objective means of assessing transformation in the sector, and it is critical to prevent selective and biased reports or generalisations about the sector from being made.

The facts

The South African forestry and product sector contributes around R39 billion to the economy and provides employment for around 150,000 people.

Speaking at the anniversary event celebrating the progress made in 15 years, FSCC chairperson Nelly Ndlovu said transformation in the sector "has not been a finite destination but a journey, lengthy, and at times difficult. It is a process of real change".

This is evident in the industry moving from beginning at Level 6 to achieving Level 3 in 2023 and again this year.

Itumeleng Langeni of MTO, Khozi Mavimbela of the FSCC and Busi Mnguni of FSA's small growers group at the 15th anniversary celebration
Itumeleng Langeni of MTO, Khozi Mavimbela of the FSCC and Busi Mnguni of FSA's small growers group at the 15th anniversary celebration

Discussing the sector's progress, FSCC Executive Director Khosi Mavimbela noted that in 2009, it committed to improving its B-BBEE track record. "The sector, comprising several forestry landowners and producers of sawn timber, pulp and paper, and charcoal, has sought to include black South Africans through meaningful economic participation", she said.

Mavimbela noted that while there has been fluctuating and inconsistent reporting in the past, there has been a significant rise across the three categories of enterprises:

Reporting MLEs grew from three in 2009/2010 to 35 in 2023/2024. In 2009/2010, five QSEs submitted reports, while the number of reporting EMEs grew from 19 to 100.

Scorecard progress

Since 2009, the number of reporting entities across the enterprise size categories has increased from 27 to 191.

The sector has made notable progress across the five B-BBEE scorecard elements between the 2009/2010 and 2023/2024 reporting periods. However, when considering the sector's overall performance, some companies have met their targets but only exceeded them in one of the five elements.

  1. Ownership: increased from 11.6 to 18
  2. Management control: 9.6 to 10.1 (when combined with employment equity)
  3. Skills development: 7.95 t o14
  4. Enterprise and supplier development (preferential procurement): 28.5 to 39
  5. Socio-economic development has exceeded the target score 5 by 2 points since 2009.

MLEs moved from Level 5 in 2009/2010 to Level 3 in the recent reporting period. QSEs progressed from Level 3 to Level 2, while EMEs moved from Level 4 to Level 2.

Sharing success

Several success stories of transformation and socio-economic development were championed at the 15th-anniversary event in Sandton, Johannesburg, on 9 October.

The Forestry Sector Charter Council marked a decade and a half of overseeing and reporting the forestry and forestry products transformation progress
The Forestry Sector Charter Council marked a decade and a half of overseeing and reporting the forestry and forestry products transformation progress

Delivering the keynote address, Bernice Swarts, Deputy Minister of Forestry, Fisheries and Environment, said, "I believe that the forestry sector has developed resilience and has often course-corrected to achieve its various milestones, not least of which being the upliftment of employees, communities, and the many stakeholders it engages.

"Because of its national reach, it plays a key role in tackling our country's triple burden of unemployment, poverty, and inequality, especially in rural areas where opportunities are scarce".

A panel discussion, chaired by Talk Radio 702 presenter Gugu Mhlungu, reviewed the milestones and considered solutions for more inclusive growth, sustainable practices, and enhanced community development.

The panellists were:

They shared their thoughts and experiences on transformation and empowerment.

Grassroots upliftment

A series of videos were shared during the event. Forestry contractor Zinhle Mbuyazi explained that she took over the family business from her father, drawing inspiration from his passion for forestry. She has thrived and encourages young women not to give up. "If you have your brain and heart, you will succeed," she said.

Another example was the Komasi Woodwork Project in the rural community of Weza, KwaZulu-Natal, supported by a local sawmill. Locals learn essential woodworking skills through the initiative and refurbish desks for underprivileged schools.

She is Forestry

The She is Forestry initiative, backed by FSCC and FSA, encourages women in business and students, graduates, scientists, and contractors to share their personal stories. The videos are welcomed by girls in rural schools because they expand their horizons and inspire them to overcome self-doubt, peer pressure, and life-changing teenage pregnancy.

"You can live from the soil. You can educate your children, provide for them, and have a home. All because of the soil. The soil changes everything," said timber farmer Rejoice Shozi, who took over the family timber-growing business when her mother passed away in 2015. Shozi is one of 3,600 small timber growers who gained practical support from a corporate forestry programme.

Reflect and adapt

"FSCC sees 15 years of transformation as an opportunity to do more than simply celebrate the achieved milestones. It is the chance to reflect on the lessons learnt and adapt our approach appropriately to capitalise on the transformation opportunities ahead of us", said Makhosazana Mavimbela, FSCC Executive Director.

Sustainable small-scale tree farming

  • Eza Mapipa of NTE (left) discusses bark quality with local community wattle growers.

Small-scale wattle growers in the Matimatolo area near Greytown in the KZN Midlands have developed their own unique ways of growing and harvesting their trees that is largely sustainable with minimal impacts on the environment. But the irony is that up until now they have been unable to get their small tree plantations certified by the global certification organisations because they have been unable to fulfil the complex administrative requirements and couldn’t afford it anyway.

With international markets increasingly demanding that the products they sell are derived from responsibly managed plantations that have been certified by recognised certification bodies, the market access of these small scale tree farmers is no longer assured. They are also missing out on the premium prices paid for certified timber products.

NTE, a local manufacturer of tannin products that are derived from the bark of wattle trees (Acacia mearnsii), has been working with the local wattle growers to help them improve their yields and to get certified through the newly established SAFAS system. SAFAS is geared specifically to South African conditions and is endorsed by PEFC, one of the globally recognised certification organisations.

This could turn out to be a game-changer for the small scale growers located in remote rural areas like Matimatolo where there is little infrastructure and very few job opportunities.

Watch the video here …

CMO to market certified forest products via global trading platform

  • This way please … CMO founder Michal Brink is taking certified forest products to market via a worldwide trading platform called IcePik.

The South African-based CMO Group has secured investment from venture capital fund E4E Africa to grow its forest-based operations and establish a global trading platform for certified forest products.

“The funding will be used to further enhance the company’s existing software, as well as to build a trading platform to provide market access for responsibly produced forest products in the mainstream global market, especially in the northern hemisphere,” says Michal Brink, CEO and founder of the CMO Group.
 
Michal says that the main driver of the development is to create and guarantee supply chain security all along the value chain. To achieve this goal the CMO model hinges on three pillars:
• The establishment of Forest Stewardship Council® (FSC®) certified Group Schemes using its in-house developed PerForm software – enabling digital management and auditing of forest operators, with the emphasis on small to medium growers who have been largely excluded from the certification process, as a result of complexity and cost.
• Providing technical support services such as training and consulting to FSC certified Group Schemes and forestry companies and using this expertise to beef up technical compliance of CMO Group Schemes.
• The development of an online, worldwide trading portal for FSC certified forest products, named IcePik.
 
Michal said that the CMO team has been innovating and researching in this field for many years. He said the funding from E4E Africa presents a great opportunity to secure critical market access for sustainably produced forest products, and a means to introduce small forest producers to international markets.
 
“CMO has the full support of the FSC International Center GmbH in Bonn, as well as other key stakeholders including the Association of Natural Rubber Producing Countries (ANRPC) and the Namibian Charcoal Association (NCA).”
 
The trading platform will be launched in Namibia and South Africa in the last quarter of this year, focussing initially on sales of FSC certified charcoal. Michal said that commodities traded across IcePik would expand to include a wide range of forest products derived from sustainably managed forests, including roundlogs, lumber, treated poles, chips for pulp as well as non-forest products.”
 

  • Charcoal produced on the Sidi farm in the Eastern Cape will be FSC certified, providing access to international markets at premium prices. Sidi is the second community managed invasive alien plant clearing operation in SA to be certified under the CMO Group Scheme. The cleared wattle provides the feedstock for the charcoal kilns, while also restoring degraded rangeland for community owned livestock.

According to Bas Hochstenbach, co-founder and partner at E4E Africa, the partnership hinges on the fact that CMO is a South African company with real intellectual property that is operating in a huge global industry. E4E Africa has taken a 10% stake in CMO.

Bas added that the group scheme certification methodology and trading platform create access to global markets for sustainable forestry products for parties like smallholder farmers and smaller processors – parties that traditionally had difficulty fulfilling the administrative requirements of FSC certification, disqualifying them to trade on the more lucrative markets where certification is required.

“CMO touches many aspects: significant environmental impact due to sustainable production processes and social impact through job creation, better worker conditions and a higher price for the small producer through direct access to international markets.

“CMO is a great example of the type of businesses that we seek to invest in: entrepreneurial teams leveraging technology to address real societal challenges at scale, combining a highly scalable business model with a high impact,” he said.

CMO has positioned itself to set up group certification schemes in 44 countries over the next five years, whilst selling the FSC certified products through IcePik across the globe. CMO’s FSC group scheme has certified around 35 forestry operations in South Africa, the majority of which are small-scale tree farmers operating on communal land.

  • Michal Brink of CMO busy with an FSC Group audit at Colona tribal authority near Matatiele in the Eastern Cape. It is a community managed operation that removes alien invader vegetation – mainly black wattle – and turns it into charcoal.