Mhali ngaphambili, sibambisene singenza lukhulu. [Chairperson, together, we can do more.]
I want to congratulate the hon Minister and Deputy Minister on their appointments to this all-important post of Water and Environmental Affairs. At the same time, I wish to remind hon members that the Department of Water Affairs and Forestry, whose budget we are considering today, has received qualified audits over the past five years.
As a member of the Portfolio Committee on Agriculture, Fisheries and Forestry I will basically be participating in respect of the forestry sector. I also wish to state upfront that most of my information was gleaned from press reports and other sources.
Our forestry industry basically grows pine, blue gum and wattle trees. Pine trees have the longest rotational period, namely 28 years. Blue gum trees grow from 20 to 22 years to maturity, but poles can be harvested from the seventh year. Wattle, which is mainly used for paper production, takes between three and five years to grow.
The state-owned SA Forestry Company Ltd, or Safcol, along with its subsidiary Komatiland Forests, dominates the pine and gum logs market, retaining interests in numerous other partially privatised forests. In the past decade it was able to raise timber prices by almost 500%, and smaller growers followed suit. Small operators and sawmills became totally dependent on this parastatal giant.
Die Tunbadola-saagmeulens is staatseiendom en derhalwe is Safcol-Komatiland se bedrywe in kompetisie met die bre burgery. Daar word beweer dat talle privaatsaagmeulens tans deur hulle gehuur word om hout te bre. Mynbou en die konstruksiebedryf is tradisionele verbruikers, gevolg deur onder meer die meubelbedryf.
Met die ekonomiese afplatting is daar tans oor die half miljoen ton ronde hout in voorraad by die staatsbedrewe bedrywe, of so word beweer. Intussen was daar 14% loonverhogings en verlede jaar het Safcol-Komatiland 'n voorbelastingswins van R870 miljoen gepos - glad nie indrukwekkend as in ag geneem word dat R530 miljoen van di bedrag blykbaar die herevaluering van sogenaamde "biologiese bates" verteenwoordig het, wat ook al di term mag beteken. (Translation of Afrikaans paragraphs follows.)
[The Tunbadola sawmills are state-owned and consequently Safcol- Komatiland's activities are in competition with the broad citizenry. There are allegations that many private sawmills are presently being rented by them to store wood. Mining and the construction industry are the traditional consumers, followed by the furniture industry among others.
With the economy levelling off there are more than half a million tons of round timber in stock at state-operated industries, or so it is alleged. In the meanwhile there has been a 14% wage increase and last year Safcol- Komatiland declared a pretax profit of R870 million - not very impressive considering that R530 million of this amount apparently represents the so- called "biological assets", whatever this term may mean.]
I question whether this is ingenuity or disingenuity, and we will subject the forestry people and, of course, Safcol-Komatiland, to rigorous oversight going forward. Be prepared!
We are informed that the larger, private-sector-owned York Timbers is considering downscaling operations by about 50%, which will also entail closing down up to five sawmills. At Tweefontein in Mpumalanga, the Hans Merensky Trust is rumoured to be planning to cease its operations in August. Several other smaller sawmills are said to be contemplating closure.
Fires in the recent past have ravaged approximately 76 000 hectares of forests in our country which contributes to the stockpile of timber, currently at its highest in many, many years. In the midst of this gloomy picture, Safcol awarded its CEO and its departing financial director performance bonuses of R2,2 million, a further R6,7 million in settlement packages, in addition to their salaries and bonuses totalling R3,43 million per year, thus adding up to a whopping R13 million. Something, Mhlali ngaphambili [Chairperson], is not right in Safcol-Komatiland, and they will be held accountable.
The forestry sector has not been appropriately profiled and is still seen as a last employment resort for unskilled workers. The vast majority of forestry employees are indeed, unfortunately, illiterate and innumerate. HIV and Aids infection rates amongst workers are also said to be of concern and not properly addressed. On a professional level, the industry also has a very high staff turnover rate and is losing scarce and core skills at an alarming rate.
Forestry land use decreased by 14,9% between 1996 and 2007, and very little new afforestation has taken place in the past decade. As a result, the country is currently facing timber shortages which will affect the government's intentions of achieving a 6% economic growth rate.
In addition, the forest industry, in terms of land use, is excessively regulated - for example, through water licences, environmental authorisations, land use change, labour, etc - and its research and development activities require more resources, notwithstanding addressing skills shortages.
Land reform is also one of the challenges of the forestry sector in which as much as 50% of the current plantations could be under claim. This factor and the lack of tenure security affect long-term investment in forestry enterprises.
This is further aggravated by the fact that forestry is a business that requires large amounts of capital to be invested over a long rotation period, and lack of access to funding for working capital is a big challenge. In addition, the department is also faced with the transfer of forests to communities that have no management, business or technical skills. The lack of effective post-settlement support has also resulted in the failure of some of the land reform projects in the sector. This challenge puts the sustainability of new ventures in forestry in jeopardy in terms of the resource, employment and livelihoods.
Forestry is also threatened on a daily basis by damage from fires, pests and diseases. This damage escalated dramatically in the past few years. Damage from pests and diseases is estimated at R150 million for forests and R612 million for processing, while that from fires in 2007 is estimated at R2 billion for forests and R6 billion for processing - colossal amounts. This calls for more focus on the effective implementation of policies, legislation and regulations to protect the resources. Otherwise, these external threats will continue to wreak havoc on the country's forest resources.
In addition, climate change will also have a significant impact on forestry. However, forestry can also play a meaningful role in the adaptation to, and mitigation of, the impact of climate change through afforestation and greening projects.
It is said that one needs at least seven trees in order to provide sufficient oxygen per individual. I want to plead with our people that this is a resource that we need to nurture, that we need to look after. I want to appeal to the department of forestry - I don't know if any of their officials are present here today - to make trees available for our population wherever they are in the townships, villages, etc, and not for planting on the pavements in the townships but for gardens alongside the fences next to the pavements. This is so that they can take ownership of the trees and, in so doing, contribute not only to the greening of our towns, cities and townships, but also to the creation and production of more oxygen.
Furthermore, in the recent past, since November 2008, there have been layoffs in terms of job losses in the forestry industry. At least 1 500 to 1 600 jobs have been lost, and I am given to understand that currently approximately 600 jobs are on the line.
In terms of fire-fighting and protection, with the good rains we had last season, for which we are truly grateful, the material that can catch fire has increased. In these times, with winter setting in, it is important to see to it that the necessary fire-fighting equipment is made available. I understand that in Limpopo there is only one helicopter with a thousand- litre tank available to fight forest fires. This is totally inadequate. Government will have to come to the party. We will have, increasingly, to empower especially the people that have been resettled on forestry property in terms of land reform. We must empower them in terms of skills and training, and assist them in doing all the things that are necessary to ...