21 September, 2014
Business Day Article on FSA's Presentation to the DTI Portfolio Committee and Presentation given
Business Day article regarding the presentation that Mike Peter and Norman
Dlamini gave to the Dti Portfolio Committee in
Parliament. The article makes for excellent reading and (despite two
errors - those relating to genus exchange and Norman's position as
Chairman), highlights the problems we are facing as an Industry.
Below is also the PowerPoint presentation that was presented to
the Portfolio Committee. Mike Peter's report on the interaction at the
Portfolio Committee meeting is contained hereunder.
Download the following:
Dear EXCO members
The meeting with the Portfolio Committee on Tuesday went very well.
the PC Chair in her introduction, expressed the incorrect view that our
sector is one of the worst sectors from a beneficiation perspective and
that the large-scale export of logs should be reversed. Fortunately
however we had included this issue in our presentation and we were able
to correct the misperception by showing figures which demonstrate the
extensive beneficiation that takes place in the industry and that a very
small percentage of roundwood is exported. We also pointed out that
the Chair was not alone in this misperception as two Deputy Ministers
had previously expressed the same view but that we had also corrected
them at the time.
our presentation, the entire committee (ruling party and opposition
MPs) expressed their deep concern that government had failed to:
licences for the 100 000ha of new afforestation and that other
regulatory challenges like genus exchange were threatening large scale
beneficiation investments. One opposition MP described it as a disaster.
implement the Cabinet decision to recapitalise some of the exit areas
in the WC and Mpumlanga with the associated job and processing plant
losses that have resulted
members also expressed great concern about the previous Minister having
announced the Forestry Grant and failing to fund it and they asked what
effect this would have. We replied that as per our presentation, the
lack of a grant limited the scope for new entrants, as the cost of
capital alone for small scale growers, was prohibitive. We also pointed
out that the provision of the grant and the 100 000ha of new
afforestation together, could treble the size of the small grower sector
in rural areas in SA and that this was the dominant ownership pattern
in many other parts of the world.
They undertook to take these issues up with the relevant departments.
PC asked about the outgrower schemes and whether these hadn't just
created encumbered suppliers, as opposed to JV partnerships. We
responded by referring them back to our presentation which showed that
small-scale growers would make a loss without the various forms of
support they enjoy from companies and that it cannot be so onerous, as
30 000 small scale growers had entered the industry over three decades
using these JV models. We also pointed out however that should DAFF
meet its grant, insurance and extension services commitments, growers
would indeed be free to sell timber to any market they choose.
PC also asked about the demographics of ownership and jobs in the
sector. We indicated that we are one of the leading and often
unrecognised sectors from a BBBEE empowerment perspective but then also
used the opportunity to mention that more empowerment was possible, if
the State met its previous commitments in the Charter. We indicated that
we are currently negotiating a shared scorecard for the private sector
and government and there was general nodding from all members at this
concept. This was quite significant because while Tuesday's engagement
was aimed at beneficiation, this is the same Committee that is
responsible for oversight of DTI in terms of the BBBEE charters, so we
will point out to government in our upcoming bi-lateral on the Charter,
that the PC of DTI has already heard of our concept of a shared
scorecard and seem pleased with the idea.
Chair at the end of the forestry session described it as having being a
very good engagement. We will advise of any further follow-up
engagements as several MPs asked for our details after the session and
the Parliamentary Monitoring Group requested a copy of our presentation.
Forestry South Africa