SAFCOL on engagements with successful land claimants to resolve disputes affecting the company’s plantations

Meeting report

Opening remarks from the Chairperson
The Chairperson began the meeting by informing the Committee that Mr T Matibe (ANC, Limpopo), was unable to chair this meeting as another commitment required his attention. She went on to welcome the Committee, the South African Forestry Company Limited (SAFCOL) representatives and the Board members who were present at the meeting.

The apologies from the Deputy Minister of Public Enterprises were announced and accepted by the Committee. Apologies were tended for other members of the Committee and SAFCOL board.  

Briefing on the Role of the South African Forestry Company Limited (SAFCOL)
Mr Tsepo Monaheng, Chief Executive Officer (CEO): SAFCOL, said that SAFCOL aims to run closely with communities who are viewed as SAFCOL’s most important stakeholders. Some of these stakeholders are communities and land claimants which have been settled. SAFCOL aims to ensure that the communities are satisfied with its presence. 

Land Claims

Mr Monaheng said that the land claims were an opportunity for SAFCOL to create value for the communities especially rural communities. Where urban develop has been a significant focus, the rural part of the economy was left to slip behind the process of land claims. SAFCOL aims to ensure the stability and continuity of the business. The land which SAFCOL operates on is leased from the Department of Environment, Forestry and Fisheries (DEFF), and the land claims are managed by the Department of Agriculture, Land Reform and Rural Development (DALRRD). This meant that SAFCOL operates at the end of the transfer process and aims to change to engage more closely with the communities. 

SAFCOL faces challenges that result from not having the mandate to negotiate land claims; instead, the land commission negotiates the land claims. In some cases, the land is transferred without SAFCOLs involvement. Despite the SAFCOL meetings with the land commission, DALRRD, and DEFF, SAFCOL is out of the land transfer process, which is an issue that SAFCOL is trying to resolve. 

Additionally, SAFCOL is currently facing an issue concerning the market supply of softwood lumber solids, and other timber products may be under threat if SAFCOL fails to become partners with the successful beneficiary because the strategic direction and what the community expects are aligned. SAFCOL has received threats from some communities on several occasions that it will be forced off the land because they believe that SAFCOL is responsible for the resolution of land claims. On some plantations, illegal activities are occurring such as invasion in the plantations, illegal mining, illegal harvesting, and illicit grazing which can be better managed if the SAFCOL collaborates with communities. 

Most of the land claims are in Limpopo, and most of these claims are in the negotiation stage. The five claims that have been settled are also located in Limpopo, and there is only one land claim in KwaZulu-Natal. Currently, 57 000 hectares are under claim and 42 000 hectares of the land which SAFCOL operates are in the negotiation stage, and 7 000 hectares have been settled. Thus far only one community has successfully received its land. 

Social Compacts 

SAFCOL is confident with the Social Compacts with the communities which aim to formalise the interaction between SAFCOL and the community and further aims to facilitate the development of sustainable forest communities. Through the Social Compacts, commitments are made to undertake development according to the agreed objectives with the community. Thus far 14 Social Compacts have been signed that have good relationships with SAFCOL. If the capital were available, SAFCOL would invest more in the infrastructural advancements. However, SAFCOL is performing well in terms of providing educational, economic, and health-related benefits to the communities. To preserve the success of Social Compacts, it is necessary to identify the most important stakeholders and ensure they are satisfied. 

Currently, there is a task team comprised of SAFCOL and representatives of the DALRRD and DEFF, along with operational meetings that are held to involve SAFCOL with the process of land claims. This was done so that SAFCOL is involved with the land transfer process rather than being notified after the land is transferred. SAFCOL has made mapping resources available to speed up the land transfer process, as it is in the interest of SAFCOL that these claims are settled timeously.  

Land Claim Beneficiaries and communities 

The Mmamahlola land claim was approved in 2001 and was transferred on 19th June 2019 to the Mmamahlola Communal Property Association (CPA). Together with the DALRRD and DEFF, SAFCOL is in engagements with the community on post-settlement matters to derive how to achieve maximum economic value out of the forest and determine how the communities will continually benefit from their partnership with SAFCOL. The business model for the communities is being finalised, however, this model is subject to minor changes in each community as each community is unique. While the economic partnership is being clarified, SAFCOL is looking over the lease agreements which have to change as SAFCOL will lease the land from the Mmamahlola Community instead of DEFF.

The Entabeni Community is comprised of nine claimant communities which are all aligned. Following a meeting on 21 October 2020, it was agreed that a joint working team would be set up whilst they await the land claim transfer to be finalised. Levels of cooperation moving forward with the Entabeni community have been established. The first level is working on the lease agreement for the land. Secondly, it must be decided how people surrounding the land will develop skills and to make sure that SAFCOL can be involved with the wood processing. Supply chain opportunities have been discussed with the community to allow members of the community to participate. It has been agreed that the communities will have to set up entities, and under the SAFCOL enterprise, they will be regarded as beneficiaries. Most importantly, SAFCOL requested that the community set up a strategic partnership to identify their enterprise and establish a strategic relationship with them in terms of business. 

The Woodbush land claim was lodged by the Makogba, Tsolobolo, Bathlabine, Modjadji and Mathunyeng land claimants. A meeting was held with these communities, and it was agreed that there is a necessity for a framework to guide how SAFCOL will been engaging with these communities going forward. This framework is currently being developed and will hopefully be complete before Christmas. However, SAFCOL is happy with the progress that has been made with this Committee thus far.

SAFCOL hopes to meet the broader Blairemore Land Community before the end of the year to establish the beneficiation activities for the settlement process in advance. Fortunately for SAFCOL the majority of community members appreciated the benefits that a partnership with the SAFCOL has for the community. However, SAFCOL does not wish to involve the communities in the maintaining and running of the plantations as this is both labour and capital intensive which will create a considerable risk for the communities if they were involved. 

SAFCOL has been working with the Tshivhase traditional Council on the Tshivhase Development Project since 2012. The project aims to generate employment and income for the local population. SAFCOL agreed to the transfer of the land for the project and has arranged for this land to be removed from the Forest Stewardship Council (FSC). SAFCOL is waiting for DEFF processes to be complete after which investment can be put into the land. SAFCOL seeks to maintain a good relationship with the community and the Traditional Council, as they are the closest to the land. 

Conclusion

SAFCOL is committed to the successful transformation of the industry for the benefits of the communities. SAFCOL has played a supporting role in transforming the industry. However, the industry is behind in terms of transformation and needs the involvement of women and children which SAFCOL aims to include in the industry. However, SAFCOL has played a supporting role in transforming the industry. Moving forward, SAFCOL should be able to lease the land from the communities and pay rentals to the communities and develop knowledge amongst the communities in terms of wood products and manufacturing. For the communities to economically benefit SAFCOL they will have to support the community’s development of enterprise. SAFCOL is working with the communities in agro-forestry and agro-processing and developing strategic partnerships with the communities to cement solid relationships.  SAFCOL has identified advanced processing products which the communities will get involved in. SAFCOL supports all government projects that support the socio-economic development of the communities and has established cooperatives with the communities to help communities learn how to collaborate and work together to achieve their business objectives. SAFCOL firmly believes that a thriving rural economy is integral for national advancement. 

Discussion 
Mr C Smit (DA, Limpopo) asked regarding the lease agreements with communities whose land is occupied by the forests, what the estimated amount is paid per hectare of land to such communities and what is the expected price escalation per financial year. Secondly, he asked to clarify whether the land was directly transferred to the community or held within a trust when the land is transferred.

Mr  Smit asked how conflicts in the community affect the stability and validity of SAFCOL, and what contingency plans are there if communities do not want to engage with SAFCOL since communities retain the right to determine how the land is utilised. He also asked which can easily be caused simply by children playing with fire. He asked if damage to the forests could be covered since forestry is a long-term investment. When closing, he asked what the feedback was from communities engaging with SAFCOL.

Mr A Cloete (FF+, Free State) asked for examples to be given to illustrate circumstances where SAFCOL faces challenges as a result of not having the mandate to negotiate land claims, and when land is stolen by the communities without SAFCOL knowing. He asked for an example of Communal Property Associations (CPAs) not functioning properly to better understand how such situations develop.

Mr Cloete asked what the role of SAFCOL is when land is transferred to communities through social contracts and after the land has been successfully transferred. Regarding the mentioned partnership with the CPAs over the communities, he asked how such a partnership is expected to play out as successful land claims may cause a problem for most communities. 

Ms L Bebee (ANC, KZN) asked if any of the 14 Social Compacts with relevant communities have received any amount of monetary payment for successfully led claims thus far. She asked how SAFCOL manages to engage with the communities if there are hostilities towards partnership with the South African Forestry Company Limited.   

The Chairperson asked whether women youths and individuals with disabilities are involved in the Cooperatives within the communities and if these Cooperatives have been capacitated so that they do not dissolve. Concerning the Department of Public Enterprises announcement, she asked if people will be required to apply for leasing of government land and whether the land that is being utilised is being affected. She also mentioned that disputes have occurred surrounding the functionality of the CPAs and asked how such internal conflicts are handled so that land transfer is not delayed. 

The Chairperson of the SAFCOL board clarified that SAFCOL does not own the land which the Committee members referred to in their questions, this land is leased. This meant that SAFCOL is not fully involved in the land transfer transaction. However, SAFCOL places them in a position to become partners with the communities after a successful land claim is made. 

Mr Monaheng said that the only land that has been transferred thus far was the Mmamahlola land which was done under the leadership of the CPAs. In response to internal disputes concerning the CPAs, SAFCOL has created a model that will promote cooperation and SAFCOL will involve itself with the community rather than individuals in the community. 

The CEO clarified that this model has been presented to the community and did not meet any hostility them. A meeting was held with the Makogba Community where there were subtle elements of disagreement. However, it was apparent that the community has strong leadership in the CPAs. After the meeting a framework was agreed upon and is to be signed so that there is a guiding document on how SAFCOL will engage with the community going forward. To prevent the communities from withdrawing from using their land for forestry, SAFCOL has decided to engage closely with communities to educate the communities on the benefits of forestry and the partnership with SAFCOL. Instead of using the land for what may seem as more profitable in the short term as a result of outside influencers trying to convince the communities not to engage with forestry in the hope that they might receive a commission if the communities were to listen to such advice.

Additionally, since the land has been marked as forestry land there are long processes required to convert the purpose of the land. In the event of a fire there is insurance in place that will cover affected parties. However, it will not replace the forest, which is why SAFCOL works together with industry players so that neither is affected by any potential fires along with educating communities on the dangers of forest fires and training the communities in fire fighting. 

Mr Monaheng admitted that previously communities were not always ready to engage with the South African Forestry Company Limited. However, the new partnership framework presented to the communities has met an overwhelming positive response. 

Ms Christelle Marais, Chief Risk Officer: SAFCOL, said, in terms of the pricing model, every five years, SAFCOL obtains a market-related rental for forestry land for which a valuation is currently being held. However, at the moment, the value is R500 per hectare. Additionally, SAFCOL does not play a role in the appointment of the CPAs because these are legal entities compiled at the time of the land claim. So far, no money has been transferred to communities as it is only the Mmamahlola community that had received their land. 

Mr Monaheng reiterated that thus far there was only one claim of land which was transferred which was the Mmamahlola claim. The challenge in this case was that despite the discussions with the Regional Land Commission Office and the Department of Forestry, it took two months after the land was transferred for the SAFCOL to be informed. However, going forward, it was agreed that all parties involved would work together more closely. However the risk remains that the communities will not accept a partnership with SAFCOL. To reduce this risk more mutually beneficial partnership agreements are presented to the communities along with emphasising the importance of forestry’s to the communities. Following the agreement the communities lease the land and the community is then involved in forest maintenance and Silviculture, which is an appealing model to the communities.

Mr Monaheng said that there was a difference between Social Compacts and Land Claims. Land Claims are concerned with the process of rural development, land conditions and land transferred to the claimant, whereas with the Social Compacts neighbouring communities have been identified and agreements were signed as they are important stakeholders whose economic advancement will be improved by contracts with the SAFCOL. They do not own the land however, they are partners. SAFCOL is working with communities after the successful land claim and partnership with the community have been agreed upon. 

Mr Monaheng said that the transformation department drives the cooperatives and aim at assisting those that have been marginalised such as women and children however men are not entirely excluded. To ensure the longevity of the cooperatives, all participants undergo business training. He said that currently SAFCOL has both forestry and agricultural land. Therefore, the effects of the agricultural initiative are minimal at this time. However, disputes arise with CPAs which are diffused by focusing on the cooperation required to achieve the overall business aims. Work is done with the provincial government for them to assist when disputes do arise with the CPAs. 

Ms Hazel Banda, Senior Manager: Transformation, SAFCOL, thanked the Chairperson for the opportunity to respond to questions about the community cooperatives. She said that 90% of the cooperatives founded within the communities are owned by women and youth and are within the forestry value chain. These cooperatives have established furniture manufacturing hubs, timber frame structures and some cooperatives are involved in agro-forestry which are supported by technical training, and business development training by the SAFCOL. Additionally, the cooperatives undergo an incubation period which is usually three years in which training is still provided. She said that the success of the cooperatives can be seen by the awards they have received from the local municipality and DEFF. 

Mr Smit said that the R500 which is paid per hectare is a surprisingly small amount considering entire communities are living on the land. He then asked what the upper limit per hectare of land is affordable for SAFCOL to retain its business and still be financially viable. He asked if that can be compared to what a community can potentially obtain from using their land for agricultural purposes such as maize farming which may reach R1 million per hectare. He then emphasised that there is a global water issue and asked how SAFCOL will be able to sustain the forests as they demand copious amounts of water to survive.  

Mr Kgathatso Tlhakudi, Director-General (DG), Department of Public Enterprises, said that the land claims are managed by the department of development which has been joined with the Department of Agriculture. In the transfer process land is placed in a trust so that the land is not lost to commercial speculations. He added further that although this process may cause conflicts, he hopes that the Department of Rural Development will provide a solution for conflicts that arise in response to this process because these conflicts prevent communities from generating income from the land. Concerning the rate at which the land is leased this is an evaluated rate which is a significant portion of SAFCOLs outlay on an annual basis. He then said that it is incorrect to conclude that communities will receive better commission rates if the land were to be used for agricultural purposes. He stressed that forestry land is of national concern to South Africa. Although private community ownership of the land is encouraged by SAFCOL, the issue remains that private companies actively try convincing communities that they can provide better deals than SAFCOL and the Department of Public Enterprises which results in unfortunate transfer prices that disadvantage the communities. Communities should be made aware of this. 

Mr Tlhakudi said that the properties which SAFCOL acquires are intended for distribution to help those who were marginalised. However, marginalised people have not been able to fully benefit from these properties so the Department of Agriculture has been invited to make a public announcement to amend these issues. Going forward, farmers on these properties will be provided with tools and working capital to continue their efforts. In closing he stressed how worrying disputes among the Communal Property Associations are because such disputes leave the land unproductive and that SAFCOL hopes its colleagues will ensure that such arguments do not persist. 

The Chairperson thanked SAFCOL for its presentation to the Committee and urged SAFCOL to continue to work closely with the communities and capacitate them so that they can sustain themselves. She also asked SAFCOL to ensure that disputes within the communities are addressed so that is not hindered. 

The meeting was adjourned.