L Hendricks: Eastern Cape Summit on Forestry and Timber
Processing

26 February 2007

Overview of developments in the forestry industry

Minister Mpahlwa,
Honourable guests,
Ladies and gentlemen,

Thank you for the opportunity to address you today at this important summit.
I am always pleased to be speaking in the Eastern Cape as I consider this
province my home.

When I look back at the many achievements of our democracy, at the millions
who have received water and sanitation, at the many houses built, at the new
schools and clinics, at the improvement in our economy and the successes of our
social welfare system what I do not see standing out as a success is the number
of new trees and forests planted. A great deal of work has been done in our
forestry sector to improve yields, to restructure institutions, improve
community access and to redefine government's role in the forestry sector and
those who have spent time and energy of these efforts are to be commended,
however where we have fallen short and there are many people in this room today
who will agree with me is that we have not significantly expanded our forestry
sector.

In September last year I addressed an Arbor Week function at Qunu and at
that event I said that my Department was making a concerted effort to ensure
the benefits of forests and trees were accessible to all our people and I spoke
about how the Eastern Cape province has potential for at least 100 000 hectares
(ha) of new plantation forestry. I also committed my Department to working with
the other stakeholders in this sector to develop these new forests over a 10 to
20 year period. These stakeholders include other national government
departments, provincial government, local government, traditional leaders and
communities and the forestry industry.

Today we are taking these commitments to the next level through our
co-operation with the Department of Trade and Industry and the Eastern Cape
Provincial Government and through our participation in this and other
initiatives. What is important is for us to recognise how our different
responsibilities in this sector can be brought together in an integrated way so
that we are able to make a meaningful impact in developing this sector. The
misalignment of doing our own thing and developing in different directions will
see resources being expended without achieving our goal of creating a better
life for our people. Therefore, when we talk of forests we need to look at the
many downstream industries as well as the upstream and support industries that
surround this sector.

Ladies and gentlemen, forestry plays a major part in the lives of South
Africans in both the first and second economy. From the rural areas where our
forests are located to the well developed, highly capital intensive and
internationally recognised timber processing and pulp and paper sector. This
sector employs close to 170 000 people and contributes more than R16 billion
annually to the South African economy. Our job now is to see how we can grow
this sector and in particular expand the downstream opportunities that
exist.

As I alluded to earlier the timber resource base (in terms of hectares) has
remained static over the past 25 years. It has only been through constant yield
improvements in the processing of the timber that the forestry sector was able
to increase the harvest from 10 million cubic metres in early 1980s to over 22
million cubic metres last year. The demand for timber is expected to increase
over the next year, however, unless we find new improvements in technology the
yield gains will be marginal. There is clearly an urgent need to increase the
forest base to ensure that the current processing plants can function optimally
and new capacity added.

With little or no timber available from our neighbouring countries, South
Africa needs to rely on our own timber resources and if we are to send the
right signals and encourage expansion of this sector, and therefore job
creation, then commitments need to be made now as to the future availability of
timber. New aforestation would contribute towards meeting the demand in both
the domestic and export market for wood and timber products. In addition, the
development of a raw material resource will attract greater processing capacity
in the form of sawmills, board mills, chipping plants and treatment plants.
Improved value adding enhances the value of the timber and will lead to broader
economic growth and it has been estimated that up to 4 500 jobs could be
created through aforestation and a further 12 000 jobs in the downstream
industries. As the options of importing timber resources are limited, failure
to meaningfully expand our own forests will have a negative effect on this
downstream industry and would ultimately result in increasing amounts of
finished wood products being imported, rather than produced locally.

Programme Director, our country is a leader in fast growing plantations and
has exceptional growth rates so the potential exists for us to expand forestry
in several areas notably in the Eastern Cape and KwaZulu-Natal. This expertise
resulted from the need to introduce species from various parts of the world
into our country in order to meet timber needs initially for the mining sector
and later for domestic use. Future expansion will, therefore, be based on these
introduced species as our indigenous timber species will not be able to produce
the required volumes technically geared to process indigenous timber. However,
we cannot only look at alien species for our plantations and we must include
indigenous forests into this mix.

It is, however, the use of these alien species that has been one of the main
stumbling blocks in aforestation which I will discuss shortly. The other main
delay with aforestation has been the cumbersome processing of licences.
Department of Water Affairs and Forestry (DWAF) has been working at improving
its own internal processes so that licence applications, which include water
licences, will be done faster and with greater use of technology. Because the
processing of licences involves three government departments each having to
satisfy its respective legislative mandate, much work and effort has been
directed towards improved systems and co-operative government which includes
training, alignment of processes, information sharing and co-operative decision
making. As a result of our efforts so far the period for processing of licence
applications in the Eastern Cape has been shortened from an average of 20
months to 11 months but even this period for the processing of licences is
still too long. My department will intensify its efforts in the coming months
to ensure that the period is further reduced.

Alien species are known to consume more water than indigenous trees, are a
greater fire risk and if these aliens are invasive then we run the risk of the
forests spreading beyond the plantations and potentially causing damage to the
environment. Through our 'Working for Water' programme we are very aware of the
impact of invasive alien species. There are however numerous ways to mitigate
the damage of using aliens in the forestry sector so that the benefits of using
them far outweigh the costs. The challenge remains for us to convince our
partners in government of the benefits of large scale aforestation as some of
them are included in the approval process and are of the view that, "each tree
not planted, is a victory for the environment."

There are also environmental agencies that do not support our aforestation
initiatives due to the concerns around preserving grasslands and promoting
biodiversity. In any process that will have a major impact on the environment
we need to listen to these alternative viewpoints; however, we need to weigh up
these views with the significant benefits for poor people in our rural areas of
large scale aforestation and the resulting downstream industry development.
What is critical is that we do not make the position of rural people worse
through our interventions or lack of intervention and that new aforestation is
done responsibly with due care given to the environment. I am prepared to
intervene and meet with those who are objecting to our aforestation programme
so that we can reach a resolution on this issue.

Ladies and gentlemen, in making a commitment to addressing the stumbling
blocks so that we can expand the number of forests planted and timber grown I
want to make it very clear to all in this industry that alongside this
expansion there must be transformation of the forestry sector, so that there is
meaningful participation by all South Africans in the forestry value chain.

Industry players have been negotiating a Broad-Based Black Economic
Empowerment (BBBEE) Charter for the forestry sector and in the near future we
will be holding an indaba to launch the charter for public comment after which
it will go through a process of being updated, finalised, approved and
gazetted. The implementation of this charter should bring benefits for
communities through changes in the racial and gender composition of ownership,
management and control structures of existing and new forest enterprises.
Importantly for what we are discussing here today this charter should
facilitate greater support by the forestry companies for enterprise development
in downstream industries and I have been informed that under the charter a fund
is being proposed to assist in financing processing activities as well as new
aforestation.

Ladies and gentlemen, there are other initiatives that my department is
involved in that are aimed at empowering communities one of which is the
transfer of the management of state-owned assets to communities. However, these
plantations are in a bad condition due to years of poor management mainly
brought about by the lack of technical forestry skills. To this end my
department will embark on a three year turnaround strategy which will place
these plantation on the same footing as those managed by private companies and
over the rotation will lead to an additional 1 400 jobs being created and R150
million added to the local economy.

Before concluding I would like to address an issue that is long outstanding
and might be of concern to some of the community representatives present today.
More than six years ago when the State plantations were transferred to private
companies, government made an undertaking to pay the leased rental to land
owning communities. As the land claim issues still remain unresolved no
payments have been made. The money from the rental is being kept in an interest
bearing account while we wait for regional Land Claims Commissions in the
Eastern Cape and KwaZulu-Natal to finalise the process of identifying land
claim beneficiaries. Once this process has been complete we will be able to
disburse the funds. My Department is working with the Department of Land
Affairs and we are exploring ways to speed up the process.

To conclude, ladies and gentlemen, in the Mail & Guardian newspaper (23
February) there was an article on the Kenyan environmental activist and Nobel
Peace Prize winner, Wangari Maathai. The article talks about how she has made
it her life's work to plant trees in Kenya and reverse the damage caused, first
by the colonial government and then by the post colonial government and their
policies of plundering the rural areas of trees. Her efforts to work with rural
women and plant an estimated 30 million trees in Kenya as well as protect
indigenous forests have been recognised internationally.

There is a great deal that we in South Africa can learn from this
inspirational person and what is clear to me is that forestry and the
associated industry is vital for the rural economy and in contributing towards
sustainable livelihoods in rural communities, a goal that we should all be
working towards.

I thank you!

Issued by: Ministry of Water Affairs and Forestry
26 February 2007
Source: Department of Water Affairs and Forestry (http://www.dwaf.gov.za/)