CHAPTER ONE 3
1. INTRODUCTION 3
1.1 BACKGROUND TO THIS INVESTIGATION 3
1.2 TERMS OF REFERENCE 3
1.3 METHODOLOGY 3
1.4 STRUCTURE OF THE REPORT 3
CHAPTER TWO 3
2. DESCRIPTION OF THE SECTOR 3
2.1 INTRODUCTION 3
2.2 THE CURRENT EXTENT OF THE PLANTATION ESTATE 3
2.2.1 OWNERSHIP OF THE PLANTATION RESOURCE 3
2.2.2 AFFORESTATION ISSUES 3
2.2.3 CURRENT EMPLOYMENT TRENDS 3
CHAPTER THREE 3
3. DISCUSSION AND PROPOSALS 3
3.1. WAGES 3
3.1.1 Views of the Employees 3
3.1.2 Views of the Employees Representative: Working Group 3
3.1.3 Views of the Employers 3
3.1.4 Views of the Employers Representative: Working Group 3
3.1.5 Recommendation of the Department 3
3.1.6 ECC Recommendations Error! Bookmark not defined.
3.2 ANNUAL WAGES INCREASES 3
3.2.1. Views of the Employees 3
3.2.2 Views of the Employees Representative: Working Group Error! Bookmark not defined.
3.2.3 Views of the Employers 3
3.2.4 Views of the Employers Representative: Working Group Error! Bookmark not defined.
3.2.5 Recommendation of the Department 3
3.2.6 ECC Recommendation Error! Bookmark not defined.
3.3 TASK BASED WORK 3
3.3.1. Views of the Employees 3
3.3.2. Views of the Employees Representative: Working Group Error! Bookmark not defined.
3.3.3 Views of the Employers 3
3.3.4 Views of the Employers Representative: Working Group Error! Bookmark not defined.
3.3.5 Departmental Recommendations 3
3.3.6 ECC Recommendations Error! Bookmark not defined.
3.4. OTHER RAISED ISSUES 3
CHAPTER FOUR 3
EVALUATION IN TERMS OF ECC CRITERIA 3
4.1 Impact of the proposed minimum wage on alleviation of poverty and cost of living 3
4.2. Ability of employers to carry on their business successfully and operation of SMMEs and new businesses 3
4.3. Impact of the proposed minimum wage on the current employment and the creation of employment 3
Figures
Figure 1: Distribution of forestry plantation area 8
Figure 2: Distribution of forestry plantations by province and ownership 9
Figure 3: Distribution of plantations area by ownership 10
Figure 4: Monthly minimum wage by Industry in 2010 15
Figure 5: CPI-Consumer Price Inflation-History and Forecast 16
Tables
Table 1: Schedule of Public Hearings: Dates, Venues & Attendance 5
Table 2: Forest Sector Employment in 2009 11
Table 3: Minimum Wage for workers in the Forestry Sector 12
CHAPTER ONE
1. INTRODUCTION
In accordance with Section 54 (4) of the Basic Conditions of Employment, Act 75 of 1997 (BCEA), the Employment Conditions Commission (ECC) has the pleasure of presenting its report on the investigation into the review of minimum wages and conditions of employment for the forestry sector.
1.1 BACKGROUND TO THIS INVESTIGATION
The current forestry sectoral determination was published on 27 March 2009 in Government Gazette 32060. The provision in respect of conditions of employment and minimum wage became applicable on the 01 April 2009. The wages in this sector were set for a period of three years, and the annual increments were based on CPI[1] plus 1% for the second and the third year. The minimum wage was therefore increased in the second year from R1138.71 to R 1221.83 or R 6.26 per hour whilst it increased in the third year from R1221.83 to R 1278.03 or R 6.55 per hour. This therefore means that there must be a new wage dispensation in place by the 1st April 2012 since the current wages expire on the 31st March 2012.
1.2 TERMS OF REFERENCE
The terms of reference for this investigation as published in the Government Gazette No. 34126 of 15 March 2011 under Government Notice No 235 were set out as follows:
“to review wages and conditions of employment in the Forestry Sector”
1.3 METHODOLOGY
A four-phased project framework was developed for this investigation, as follows:
1.3.1 PHASE ONE – INFORMATION GATHERING
The Department published a notice in the Government Gazette No 34126 of 15 March 2011 under Government Notice No 235 as required by section 52 (3) of the BCEA. The notice called upon interested parties to send written representations to the Department within 30 days of publication of such notice. In response to the notice, one (1) written submission was received from Forestry South Africa (FSA):
1.3.2 PHASE TWO – CONSULTATIONS WITH STAKEHOLDERS
Public hearings were held in four Provinces as set out in the table below. A total of fourteen public hearing sessions were conducted between 06 June 2011 and 30 July 2011. The public hearings were scheduled to take place in the areas where forestry activities are concentrated, specifically in Mpumalanga, KwaZulu-Natal, Eastern Cape, and Limpopo Province.
Table 1: Schedule of public hearing dates, venues and attendance
Province / Dates / Venue / Employers / EmployeesMpumalanga
Sabie / 06/06/2011 / Bambanani Indoor Sports Centre / 19 / 11
Piet Retief / 07/06/2011 / Mondi - Iswepe / 11 / 17
07/06/2011 / Thuthuka Forestry / 01 / 03
KwaZulu-Natal
Empangeni / 22/06/2011 / Imbizo conference centre / 16 / 00
22/06/2011 / WSB Transport forestry / 00 / 24
01/07/2011 / Pietermaritzburg / 08 / 00
Eastern Cape
Umtata / 03/07/2011 / Bayazi forestry / 00 / 17
03/07/2011 / Nqadu / 00 / 20
03/07/2011 / Elangeni forestry / 00 / 28
04/07/2011 / Elangeni forestry / 01 / 00
Limpopo Province
Makhado
Tzaneen / 24/07/2011 / Entabeni Komatiland forest plantation / 00 / 34
24/07/2011 / New Aganta komatiland / 00 / 53
TOTAL / 56 / 207
1.3.3 PHASE THREE – ECC PROCESS
During this stage, the Commission engaged with the different proposals made by stakeholders and prepared its recommendations to the Minister.
1.3.4 PHASE FOUR- PUBLICATION OF THE SECTORAL DETERMINATION AMENDMENT
This phase will see the publication of amendments to the sectoral determination, once approved by the Minister, in the Government Gazette and subsequent awareness-raising measures.
1.4 STRUCTURE OF THE REPORT
The report consists of the following chapters:
· Chapter 2 of this report outlines the sector profile and current status of the South African forestry sector;
· Chapter 3 discusses the findings of the investigation and resultant proposals;
· Chapter 4 discusses the proposals in light of the criteria that the Commission has to consider and Chapter 5 is the summary of the ECC recommendations
CHAPTER TWO
2. DESCRIPTION OF THE SECTOR
2.1 INTRODUCTION
The sectoral determination applies to the employment of forestry workers in all forestry activities in the Republic of South Africa. The forestry sector refers to forestry operations related to planting, growing, tending and harvesting of trees. Without limiting its meaning, ‘forestry activities’ includes: commercial timber growers; emergent timber growers; contractors where the majority of time is spent in relation to forestry contracting activities; all transportation within the sector not covered by the Road Freight Bargaining Council; a domestic worker employed in a home on a plantation where forestry activities take place; a security guard employed to guard a plantation or other premises where forestry activities are conducted, who is not employed in the private security sector.
The determination excludes the following: mixed farming employers where the majority of the time is spent in relation to farming activities; community forestry employers and employees; employers where the majority of the time is spent in relation to conservation forestry activities; any person employed or engaged in forestry activities covered by another sectoral determination or by a bargaining council agreement in terms of the Labour Relations Act, 1995 and includes but is not limited to transportation covered by the Road Freight Bargaining Council; the forest products sector, which includes all primary and secondary timber processing activities including the pulp and paper sector and whose operations are currently covered by bargaining council agreements.[2]
The diverse nature of forestry in South Africa has led to the classification of forestry into three broad groupings: commercial, community and conservation forestry. Commercial forestry can be broken into two different but interrelated sectors viz. the forestry sector (plantation forestry, tree farmers) and the forest product sector which utilizes timber to produce various products such as pulp, paper, charcoal, etc. Community forestry relates to the development of local communities through the use of forestry and is also referred to as development forestry or social forestry. The different elements of community forestry include: woodlots, farm forestry, nursery projects and agro forestry projects. Conservation forestry refers to the maintenance and protection of natural (indigenous) forests and woodlands in South Africa on a sustainable level.
This report is concerned with commercial forestry because of the existence of employer and employee relationship as opposed to the community and conservation forestry.
Commercial plantation forestry in South Africa encompasses the large planted forests (established to supply raw materials to satisfy mining, construction, and industrial markets) which supply the pulp-mills, sawmills and factories which process the raw materials. South Africa’s demand for wood is met predominantly from commercial forest plantations and not from natural sources or through imports.Of the 122.3 million hectares (ha) of land in the Republic of South Africa, only 1.0% of the area was under commercial plantations in 2009.
2.2 THE CURRENT EXTENT OF THE PLANTATION ESTATE
In terms of land use, the area under forestry is about 1,257 million ha or approximately 1% of the total South African land area of 122, 3 million ha. The forestry sector (forest and forest products) contributes about 1% to GDP.[3] South Africa is a water scare country with a low amount of rainfall and this strongly influences the location of forests in South Africa, which are primarily situated on the eastern escarpment and southern sea-board. Plantations in particular are concentrated in a relatively small area of the country, specifically in Mpumalanga, KwaZulu-Natal, Eastern Cape, Western Cape and Limpopo Province.
Figure 1: Distribution of forestry plantations by area
Source: The South African Forestry and Forest Products Industry 2009 (FSA), 2010
According to the South African Industry report (2009) as published by Forestry South Africa, these plantations produced over 18.5 million m3 of commercial round wood in 2009 and the total investment in the forestry industry amounted to R24.8 billion. This investment comprised 58.5% in trees, 19.4% in land, 13.0% in roads, 6.2% in fixed assets and 2.8% in moveable assets.
2.2.1 OWNERSHIP OF THE PLANTATION RESOURCE
The distribution by size classes of both privately and publicly owned plantations in South Africa
is shown in figure 2. Of all reported commercial plantations 83.1% (1 058 908 ha) is under private sector ownership whilst the other 16.9% (215 961 ha) is under public ownership.[4] The extent of public ownership is decreasing significantly as the partially completed SAFCOL privatisation process is being finalised.
Figure 2: Distribution of forestry plantations by province and Ownership
Source: The South African Forestry and Forest Products Industry 2009 (FSA), 2010
As can be seen in figure 2, a large percentage of the total plantations in South Africa are located in Kwazulu-Natal and Mpumalanga whereas the rest of the total plantations are located in the Limpopo, Western and Eastern Cape.
Figure 3: Distribution of plantation area by ownership
Source: The South African Forestry and Forest Products Industry 2009 (FSA), 2010
Though plantations have a legacy of state ownership, only an estimated 16.9% of total plantation area is currently under government control. The extent of public ownership has decreased significantly in recent years because of restructuring. The corporate/ large grower category of plantation ownership is highly concentrated, with the two biggest players owning 48.1% of the total plantation area in 2009, with other corporate players – including two black economic empowerment consortiums who recently signed lease agreements for SAFCOL forests – account for a further 11.2% of total area. The medium growers, namely commercial farmers, owned 20.3% of all plantations in 2009.The approximately 44,620 small growers, own the remaining 3.5%.
2.2.2 AFFORESTATION ISSUES
The Department of Agriculture, Forestry and Fisheries aims to pursue the afforestation target of 10 000 ha of net new afforestation per year. Through this afforestation, an additional R500 million per year could be generated from these plantations. The Department has targeted the rural areas where there are few other viable opportunities for job creation and economic activity and is working closely with other government structures in the Eastern Cape and KwaZulu-Natal to fast-track the afforestation licensing process.
The FSA Annual Report 2010, reported that , a number of breakthroughs have been made to overcome long-standing obstacles to afforestation such as water reserve determinations in both Eastern Cape and KwaZulu-Natal which was finalised in 2010 and secondly, the publication of revised Environmental Impact Assessment (EIA) Regulations by the Department of Environmental Affairs Firstly, for small and medium growers, the increase in the threshold requiring an EIA for a forestry licence application from 5 ha to 100 ha will bring much needed relief and reduced costs for smaller applications in the sector. DAFF is in the process of commissioning such an EIA for 28 000 ha in the Eastern Cape which will facilitate applications for more than 100 ha which would then be supported by the area-based EIA. All of the above have contributed to significant increases in licences being issued.
In its 2010 Annual Report, Forestry South Africa has reported that as at November 2010, 77 licences for 1962 ha had been issued and a further 1 051 licence applications for 10 850 ha were pending in KZN. In the Eastern Cape 84 licences, mainly for genus exchange, covering an area of 8 651 ha had been issued. A further 175 licence applications for 41 114 ha were pending.
2.2.3 CURRENT EMPLOYMENT TRENDS
The forestry industry is one of the strategic economic sectors in South Africa with a significant contribution towards economic growth and job creation. The forestry resource base, i.e. natural (indigenous) forests, commercial plantations and woodlands, is spread over some of the poorest areas in South Africa and therefore plays a significant role in terms of poverty eradication through job creation to large numbers of poor people living in remote rural areas.
The forest sector employed around 170 000 people in 2009. The forest sub sector provided about 77 000 direct jobs and 30 000 indirect jobs. The pulp and paper sub sector provided approximately 13 00 direct and 11 000 indirect employment opportunities. Some 20 000 workers were employed in sawmilling, 6 000 in the timber-board sub sectors; while another 11 000 workers were employed in miscellaneous jobs in the forestry sector[5]