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Post: The 2021/22 Transformation Outlook in the Forest Sector

The 2021/22 Transformation Outlook in the Forest Sector

The past few months have seen staff at the Forest Sector Charter Council, “FSCC/Council”, work late into the night preparing and endorsing the yearly Transformation Status report accounting for the industry’s performance on the scorecard elements as detailed in the Amended Forest Sector Code (FSC). This year’s report is the 13th to be collated by the Council since its establishment.

As per previous years, all Companies operating in the Forest Sector are required by the Amended B-BBEE Act to report annually to the Council, and this year we are encouraged to see a dramatic increase in the number of reporting entities from 37 to a pleasing 113 as detailed in the Status of Transformation. This record number of submissions was the highest reported since the introduction of B-BBEE in the Forest Sector. Broken down, it included 24 Medium and Large Entities (MLEs) including SAFCOL (the only state-owned enterprise operating in the Forest Sector), who submitted both their B-BBEE certificates and underlying reports.  In addition, 46 reports from the Qualifying Small Enterprise (QSEs) category and another 43 reports from Exempted Micro Enterprises (EMEs) were submitted. As the FSCC, we are immensely happy with the three-fold increase in reporting and see it as confirmation that companies view reporting and Transformation as a strategic imperative.

Overall, the Industry maintained a Level 4, although regressed slightly from 88.4 points to 80.4 points, when bonus points MLEs achieved for going an extra mile were excluded.  In aggregate, MLEs’ scorecard performance regressed slightly in four of the five elements, with the exception of Management Control.  This being said, good scores were still achieved in Ownership, Enterprise & Supplier Development (ESD) and Socio- Economic Development (SED). Skills Development showed the biggest decline, and expectedly so, as some of the skills programmes that were undertaken during the hardest lockdown could not be recognized as per the learning matrix. Additionally, Skills Development, like ESD, has a financial cost attached and with the negative impact of the Covid-19 pandemic on the economy, a reduction in this was anticipated.

Further analysis showed that Black ownership in MLEs declined but still achieved a good score when compared to Black Women ownership. Improvements were observed in Junior, Middle and Senior women managers although declines were observed in the Board participation and Executive Management. This underlines the importance of the work associations like She Is Forestry, supported by the entire Sector, are doing in promoting the role of women across the Forestry Sector. On a positive note, especially considering the state of unemployment in the country, more companies employed a higher proportion of their learners.

The Completeness Ratio is still at 100% allowing for MLEs to halve the targets on five indicators of the preferential procurement segment in ESD. Most MLEs preferred to be scored on half targets on the ESD element with only two choosing to be scored on full points. Only one Grower managed to sell logs to QSEs/ EMEs and 51% BO and 30% BWO entities, a specific requirement for entities generating their highest turnover in the growers and sawmilling sub-sectors. Of the 24 MLEs only five companies were downgraded by a level for failure to achieve the minimum targets on the priority elements.

The other highlight was the performance of the JSE listed Forest Companies. All four of these listed companies have consistently reported and are performing exceptionally well on their B-BBEE implementation. SAFCOL also achieved good scores, though was disadvantaged by low representation of women on the Board.

QSEs achieved a Level 2, with improved numbers from the Enhanced (majority Black Owned) and Unenhanced (minority Black Owned). As such there was an analysis of the QSE scorecard performance by the 8 Unenhanced QSEs.  A majority of the Unenhanced QSEs performed well in all the five scorecard elements with only one being discounted. Comparatively, EMEs achieved a Level 2 and most of these are operating in the contracting subsector, expectedly so as most of the MLEs outsource some of the services such as silviculture, harvesting etc.

The continuous implementation of B-BBEE in the Forest Sector is reassuring. The performance is no doubt enhanced by the number of activities coordinated by the Council, all industry associations and government departments. The CSI report produced by Forestry South Africa (FSA), speaks volumes about the massive Industry commitment to social and economic upliftment of the previously disadvantaged and the communities residing around Forestry. As the FSCC, we see this commitment responding to the Socio-Economic Development needs meant to bring about both social and economic long-term benefits to the marginalized.

Special note needs to be made regarding the successful women webinars organized every August since 2020, which are fully supported by the entire Forest Sector. These combined with the beautiful Women’s Month magazine produced by FSA, highlighting the women occupying different roles across the Forestry Sector and showcasing the enormous stride our Sector has taken in support of women inclusion and empowerment, are something the whole Sector should be incredibly proud of. The latest She Is Forestry SA webinar held in August 2022 exceeded all expectations focusing on the attributes women need to excel in our Industry. With such introspection, one can anticipate a better and even improved performance of the Sector on women employment and promotions to higher management and board level with time. One can be very proud of the fact that this is one of the few sectors that profiles its annual status of transformation consistently. More so, the relationship the Council has with the entire Sector, in particular FSA, is something we value greatly. As is the number of times FSCC’s work has been profiled by FSA and the close collaboration between the two organizations, especially in areas important to transformation. 

Written by: Khosi Mavimbela, Forest Sector Charter Council Executive Director
Source: Forestry in Focus

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  • Arxada
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  • FSC
  • Hin-Tech Manufacturing
  • Husqvarna
  • John Deere
  • Khulani Timbers
  • Kwamahlati Training Services
  • LESH
  • Loadtech Load Cells
  • Logmech
  • Merensky
  • Mondi
  • Those who grow alone, die alone: why transformation is strategic for the MTO Group
  • NCT
  • Pangolin
  • Patula Risk
  • Ponsse
  • Rance Timbers
  • Sabie Poles
  • SAFCOL
  • Sappi
  • Saw Specialists
  • SAWPA
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  • Stihl
  • Sunshine Seedling Services
  • Treated Timber Products
  • TWK
  • UCL Sawmill
  • Wood-Mizer
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  • Wuhlf

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The 2021/22 Transformation Outlook in the Forest Sector

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