FOREST SECTOR CHARTER COUNCIL PORTFOLIO COMMITTEE 4 NOVEMBER 2014 MR PASCO DYANI (CHAIRPERSON) CONFIDENTIAL

PRESENTATION OUTLINE Forest Sector Forest Sector Charter Forest Sector Charter Council FY2012/13 B-BBEE Status report FY2014/15 Business Plan- Priorities CONFIDENTIAL

Forest Sector Uses 1% of total land (1 273 357ha) Employs about 146 000 in sawmilling, pulp & paper, timber boards, mining timber etc., (22.5% employment in Agriculture) Provides about 850 000 livelihood support Contributes 1% National GDP & 7.7% of manufacturing GDP Production mainly on pulp & paper and sawmilling products Derives 70%of revenue from exports (Information gathered from FSA Facts 2011/12) CONFIDENTIAL

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

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- sectors CONFIDENTIAL

Forest Sector Charter Council (FSCC) FSCC known as “Council” was launched in May 2008 & operating as a section 21 Company. Main responsibilities: - To facilitate, oversee, encourage implementation of Charter - To monitor & report on the Charter Undertakings - To monitor & report on the Status report - To publicize the Charter & - Participates in Government, Industry & Council forums & member of the Joint Technical Team (Dti initiative) CONFIDENTIAL

Forest Sector Charter Council (cont) 3 strategic sessions, highlighting strategic objectives. Foresight exercise in 2011 to craft preferred future for sector Quarterly meetings on a annual basis. Reporting: The President’ B-BBEE Advisory Council, Minister of Trade & Industry & Minister of Agriculture, Forestry & Fisheries. Composition – 20 Board members & an Independent Chairperson CONFIDENTIAL

FY2012/13 B-BBEE Status FY2012/13 B-BBEE Status An annual progress report on scorecard implementation Fourth (4th) B-BBEE Status report Sector Level 5 status, a level decline from previous year Qualifying small enterprises (QSE) achieved level 3 Exempted Micro Enterprises (EME) level 4 achieved CONFIDENTIAL

FY2012/13 B-BBEE Status FY2012/13 B-BBEE report (Cont): Sector performing well in Socio-Economic Development (SED), Enterprise Development (ED), Preferential Procurement (PP) Average performance in Ownership (O) Poor performance in Management Control (MC), Employment Equity (EE) & Skills Development (SD) CONFIDENTIAL

FY2014/15 Business Plan- Priorities Charter Review Process According to section 16.2(c) of the Forest Code, Mandates Council to conduct an comprehensive review, Review to identify achievements and shortcomings, & assess if any adjustments are required. Charter Review Expected outcomes: Comprehensive report underlining: Key issues & findings based on objectives of review process, CONFIDENTIAL

FY2014/15 Business Plan- Priorities Charter Review Expected outcomes: Comprehensive report underlining: Highlight of achievements, failures, modifications & adjustments required, Obstacles and challenges to meaning implementation, and Strategic & actionable recommendations, Possible alternatives for effective B-BBEE implementation, monitoring & reporting. CONFIDENTIAL

FY2014/15 Business Plan- Priorities Charter Review – Progress: Undertaken by a Service Provider, Managed by an established steering committee (Council and Service provider), Stakeholder consultations undertaken, Preliminary findings discussed by Steering Committee, Steering Committee adopted report end of September CONFIDENTIAL

FY2014/15 Business Plan- Priorities Charter Review Preliminary Findings Relevancy of Forest Code, Lifespan of Forest Sector Code, Mandate of Council ( Non compliance), Representation in the Council, Awareness in terms of the Code & the Council CONFIDENTIAL

FY2014/15 Business Plan- Priorities Realignment Process: Dti Amended B-BBEE Act (Act still to be pronounced) Dti gazetted the Revised Codes of Good Practice (CoGP, Vol: 580, No. 36928), ( the basis for all Sector Specific Codes Sector Councils to align Sector Codes with Amended CoGP Realignment Process expected outcome: Revised Forest Sector Code CONFIDENTIAL

FY2014/15 Business Plan- Priorities Realignment Process objective: To align Forest Code with Revised Codes of Good Practice & B-BBEE Amendment Act Realignment Process- Progress: Council & Constituencies began negotiations in July Scorecard on Ownership (O), Management Control (MC), Skills Development (SD) & Socio Economic Development (SED) adopted CONFIDENTIAL

FY2014/15 Business Plan- Priorities Realignment Process- Progress (Cont): First draft devoid of ESD element reviewed by Council and stakeholders; Final revised draft to be adopted end November Final revised draft to be sent to Dti for 60 days public comment Anticipated date of adoption before Transitional period end in April 2015 Gazetted Revised Forest Sector Code - 1st May 2015. CONFIDENTIAL

FY2014/15 Business Plan- Priorities FY2013-14 B-BBEE Status report: An annual progress report on scorecard implementation Fifth (5th) report Analyse level of compliance within the 0- 5 year targets Objective: Assess the status of transformation in the Forest sector CONFIDENTIAL

FY2014/15 Business Plan- Priorities FY 2013-14 Status report – Progress: Undertaken by Service provider Managed by a steering committee Preliminary report discussed by Steer com end of September Preliminary report suggest sector a level 4 Final report to be presented to Council end of November CONFIDENTIAL

FY2014/15 Business Plan-Budget Budgetary Implication: Funding by 60% Government , 40% Industry Total budget : R8 506 095.00 PROJECT LEVEL BUDGET F2014/2015 Charter Review and realignment process 1 300 000 BEE status report 421 000 Council Capacity building 100 000 ED and SED Initiatives 200 000 Communication Strategy and Plan Web Based Portal 400 000 Outreach program Community/ labour specific initiatives 500 000 Employee Compensation 2 583 311 Charter Functionality 1 259 898 Other Operating Expenses 1 141 886 TOTAL 8 506 095.00 CONFIDENTIAL

THANK YOU CONFIDENTIAL