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FSA 2012 ANNUAL REPORT
Foreword by the Chairperson 32
Internal Forestry South Africa Matters 43
FSA Membership 34
FSA Committees 43
Other Industry Committees 46
Non-Industry Affiliated Committees 56
Co-operation with other Industry Organisations 67
Co-operation with Government Departments, Agencies and Programmes 76
International Co-operation 87
FSA 2012 AGM 97
FSA Staff Matters 98
Forestry Industry Matters 98
Forest Protection 98
Forestry Research 12 14
Afforestation Issues 14 16
Water Issues 16 18
Environmental Issues 16 18
Land Reform 18 20
Labour Issues 22 20
Business Development Unit 26 23
Transport Issues 28 24
Education and Training 32 28
Industry Promotion 36 31
Appreciation 38 33
FSA Finances 39 34
FSA Timber Sales Tonnage in 2012 34 39
FSA Finances 2012 39 34
FSA Budgets and Funding for 2013 35 40
1

FOREWORD BY THE CHAIRPERSON
T
his past year
has been
another very
challenging
one for the Forestry
Industry and for our
Association too.
Timber volumes
declined once again
year on year and
while almost half a
million tons or 3.2%
down on 2011, they
were 5.5% down on
the budgeted amount to fund the Association
and its implementation partners. This placed
further pressure on the already precarious
financial position of the Association. Added to
these funding challenges, our Business Development
Director, Steven Ngubane, left the Association
after 10 years although, fortunately, he is
still within the forestry arena.
Nonetheless, our Association has continued to
produce some important positive outcomes for
the Industry. Some of the highlights were the
major shift in attitude from Transnet Freight Rail
towards the sector, which has seen significant
decreases in tariffs, a commitment to recapitalising
important branch lines and sidings which
serve our Industry and added impetus to improve
levels of service rendered. This was significantly
influenced by FSA’s repeated lobbying both independently
and through Business Unity South
Africa. Still on logistics costs, the National Ports
Authority proposed an 18.1% increase in tariffs
for 2012/13 and, based on FSA’s submission
along with others, the Ports Regulator of SA
finally approved an increase of just 2.76%. These
interventions have saved the Industry many
millions of Rands.
FSA was also successful for the first time since
it was formed, in persuading the Department of
Water Affairs to increase water tariffs by no more
than the rate of inflation and we hope that this
can be repeated for 2013/14.
Other successes include convincing the
Minister of Rural Development and Land Affairs
to withdraw the highly controversial Tenure
Security Bill, based on the extensive inputs by
FSA into the Land Management Commission
Workstream, established under the National Agricultural
Reference Group.
In the areas of protection, research and development,
there were many successes, including
the revamping of Forest Engineering under the
auspices of the ICFR. However, one issue that
should be singled out for special mention, was
the record time it took FSA, with strong support
from its members and partners, including DAFF,
to get the necessary authorisation from DEAT to
release the biological control agent to combat
Leptocybe, which was causing so much damage
in plantations.
I would like to thank our Vice Chairperson, Viv
McMenamin, for the extensive support she
gave me during this past year. Her energy and
commitment to our Industry and the Association
is felt by all of us and is greatly appreciated. I
would also like to thank our FSA staff and implementation
partners under the leadership of our
Executive Director Michael Peter, for remaining
committed to serving our interests so well in
these pressing times.
My very best wishes to all our members, Association
staff and implementing partners for the
year ahead.
Silas Cele
CHAIRPERSON
FORESTRY SOUTH AFRICA

INTERNAL FORESTRY
SOUTH AFRICA MATTERS
FSA MEMBERSHIP
No changes to FSA’s membership were recorded
during the period under review. FSA’s membership
base thus remained extensive, with all corporate
growers and a vast majority of both commercial
and small scale timber farmers being members
of the Association either in their own capacities
or indirectly through their membership of timber
co-operatives and other bodies.
Given the continued adverse economic
conditions experienced during the year, this is
particularly encouraging and FSA would like to
sincerely thank members for their continued loyal
support, both in terms of financial contributions
and physical involvement in the workings of the
Association.
FSA COMMITTEES
Executive Committee
As scheduled, three Executive Committee
meetings were held during 2012 – in May, August
and November.
Mr Murray Mason, the Chairperson of the
Medium Growers Group and Mr Silas Cele,
Chairperson of the Small Growers Group, served
in the capacities as Chair and Vice-Chair of the
Association up until the AGM held in May 2012.
Thereafter, Mr Cele was elected Chairperson
and Ms Viv McMenamin, a “large grower” representative,
Vice-Chairperson for the 2012/13 year
at the aforementioned AGM.
There were three changes to the membership
of the Executive Committee during the year
– two brought about by resignations of sitting
members and another by the co-option of a new
member. Following the resignation of Mr Brian
Aitken, an MGG member who had been instrumental
in establishing FSA and who had served
on the Executive Committee since its inception,
Mr Graeme Freese, a timber farmer from the
KwaZulu-Natal Midlands, was elected to replace
him. Mr Chris du Toit replaced Mr Claus Lippert
as Merensky’s representative on the Committee
following the latter’s resignation. At the AGM,
Mr Hilton Loring, the recently appointed CEO
of Masonite, was elected to the Committee as
a co-opted member. FSA would like to sincerely
thank both Messrs Aitken and Lippert for their
tremendous contributions to the Association over
the years and extend a warm welcome to Mr
Loring.
A list of members of the Executive Committee,
as constituted at the end of December 2012, is
given at the front of this Report.
Group Committees
No changes to the number of or geographic
coverage of the Regional Group Committees
occurred during the year and the nine Regional
Group Committees duly held their AGMs during
the course of February 2012. These meetings,
which are open to all growers, whether corporate,
medium or small, are important in that they give
FSA staff and office bearers an opportunity to
not only give members a comprehensive report
on the issues being dealt with by the Association
on their behalf but to also receive feedback
from members on issues of particular concern to
themselves in their respective regions which FSA
can, if required to do so, assist in addressing.
3

In addition to the above meetings, at a national
level, the “General Committee”, the function of
which is primarily to give input into the Executive
Committee, met prior to Executive Committee
meetings during May, August and November
2012.
Unfortunately, the Committee was dealt a blow
during the year when two of its founder members,
both of whom were actively involved for many years
in Industry affairs, passed away. Mr Louis van Zyl
of Merensky, who died in July 2012 following a
long battle with cancer, was actively involved in
FOA structures over many years before serving
on a number of FSA Working Committees and
the General Committee since inception. Mr Dan
Peoples, who was involved for many years in
SATGA’s structures and latterly the Chairman of
FSA’s Mpumalanga East Regional Committee,
died following a tragic fishing related accident
whilst on holiday with his family in Mozambique
during December 2012. Both members were
active and committed members of FSA and they
will be missed not only by our Association but
also by the Industry at large. Our sincere condolences
are extended to their families and friends.
FSA’s main committees are the nine Regional
Committees, the General Committee, the
HR Committee, Land Committee, Transport
Committee, Business Development Committee,
Research Advisory Committee and the
Executive Committee. Corporate and private
timber growers are represented in each of
these committees. Reports on the work of
these various committees are found later in
this Annual Report.
OTHER INDUSTRY COMMITTEES
In addition to the FSA structures described
above, FSA and our members are represented in
a number of other collaborative structures which
serve our members’ interests. All these organisations
either receive direct funding from FSA or alternatively
have an impact on the environment in
which the Industry operates. The main ones are as
follows.
A list of members of each of the respective Group
Committees is given at the front of this Annual
Report.
Working Committees
FSA is able to operate extremely efficiently due to
human capacity support that it receives directly
from our members. All major decisions taken by
the Executive Committee are informed by the
inputs it receives from other FSA structures in
which our members serve. This allows members
to better direct the activities of FSA, enables the
Executive Committee to make well-informed
decisions and also greatly reduces the costs
to the association, which would otherwise be
incurred in having FSA staff or consultants do
the work of the committees.

INSTITUTE/ CONVENOR
(i): ICFR
(ii): FABI
(iii): NMMU (Saasveld)
(iv): Stellenbosch University
(v): FP&M SETA
(vi): Provincial LAACs
(vii): DAFF
(viii): DAFF-DWEA-FSA
(ix):Forest Sector Charter Council
(x): The Wood Foundation
NON-INDUSTRY AFFILIATED
COMMITTEES
There are several other collaborative structures
which operate outside of the Forestry Industry
and yet have significant impact on the Industry.
It is thus important that FSA is represented
either by staff or by our members in those
COMMITTEE/STRUCTURES
Board of Control
Remuneration Committee
Sirex Control Programme Steering Committee
TPCP Board of Control
TPCP Finance Committee
CTHB Board of Control
Forestry Advisory Committee
Forestry Advisory Committee
Board
Audit Committee
Governance and Strategy Committee
Members
Minister’s Advisory Council (NFAC)
CEOs’ Steering Committee
CEOs’ Roundtable
Commercial Forestry Liaison Committee
Kabelo Trust
Afforestation Technical Task Team
Forest Sector Raw Water Tariff Committee
Charter Council
Finance Committee
Land Task Team
Contractor Codes Task Team
Emerging Timber Grower Codes Task Team
Council Review Task Team
Executive Committee
structures to ensure that its members’ interests
are promoted. Amongst the most important of
these are Business Unity South Africa, the Agricultural
Business Chamber, Agri SA’s Commodity
Chamber, Kwanalu, Mpumalanga Agriculture,
Working for Water, Working for Wetlands and
Working on Fire Programmes and the SANBI
Grasslands Biodiversity Forum.
5

CO-OPERATION WITH OTHER
INDUSTRY ORGANISATIONS
While FSA represents the primary side of the
Industry, it is important that it collaborates with
other industry associations throughout the value
chain either in bi-lateral activities or in collaborative
forums.
The Wood Foundation, which was founded as
a collaborative promotional and communication
umbrella association for all the sub-sectors
involved in the forest sector value chain, has been
slowly gaining momentum, despite continuing to
be under-resourced. A full report on its activities
is contained later in this Report.
The Forest Sector Charter Council also provides
an effective platform for co-operation among
the various sub-sectors on issues of common
interest, especially where these pose constraints
to transformation and growth in the Industry and
progress on this forum is also reported on later in
this Report.
CO-OPERATION WITH
GOVERNMENT DEPARTMENTS,
AGENCIES AND PROGRAMMES
Department of Agriculture,
Forestry and Fisheries (DAFF)
As the Department responsible for forestry
matters, FSA’s regular engagement and
partnering, where appropriate, with DAFF is
crucial. Some of the more important interactions
that occurred during the year are as follows:
CEOs’ Steering Committee & CEOs’
Forum
Following a dismal year in 2011 in which only
two meetings were held, the management of
DAFF’s CEOs’ Steering Committee improved
tremendously under the acting Director-General’s
guidance. All six scheduled meetings were
held in 2012 and FSA was able to achieve some
success in a number of key areas.
A breakthrough occurred during the February
meeting, when following an appeal by FSA,
the erstwhile DG approved the release of the
biological control agent for Leptocybe invasa
which has had such a devastating impact on
Eucalypts in the country. This was the first time
that a bio-control agent was approved for release
in such a short space of time and sincere gratitude
is expressed to DAFF for having the foresight to
do so.
Another breakthrough arising from the CEOs’
Steering Committee came when the Minister of
DAFF announced the creation of a Forestry Grant
fund for small timber growers. FSA has been
lobbying DAFF on this issue for more than five
years and were repeatedly re-directed to other
development finance sources - none of which
suited the needs of prospective timber growers.
It remains to be seen whether DAFF will seek
funding from National Treasury for this grant and
whether National Treasury will provide this but
hopefully the public announcement of the fund by
the Minister, will lend some weight to the cause.
FSA was invited to make a presentation to the
CEOs’ Forum in August following lack of progress
in the Steering Committee being made on the
issue of DAFF’s funding commitments for their
Charter obligations and following the suspension
of the DAFF DG with whom we were supposed
to have had a bi-lateral meeting to discuss the
matter. The Minister hosted the Forum and was
surprised by FSA’s presentation, indicating that
she had unsuccessfully sought a budget from the
Forestry Branch in DAFF for the past three years.
This resulted in the FSA Executive Committee
instructing FSA to take the matter up with the
Presidency which was done by way of a letter
sent to the Presidency.
Commercial Forestry Liaison
Forum
The Commercial Forestry Liaison Forum met
three times in 2012 and made significant progress
in addressing several key issues, including the
re-capitalisation of the exit areas, dealing
decisively with damaging press coverage
emanating from one of the DAFF-appointed
consultants and getting buy-in for greater use
of Arbour Week in promoting the commercial
Forestry Industry.

The draft MoU which seeks to strengthen the collaboration
and funding commitment of DAFF to
FSA was submitted to DAFF for consideration.
Following FSA repeatedly raising the issue of
the lack of DAFF funding to support the sector,
DAFF committed to requesting R50 million from
National Treasury to support forest protection
including the R+D elements of this. Should this
materialise, it will be the first commitment from
DAFF to supporting the sector since the Forests
Charter was signed nearly five years ago.
DAFF – Department of Water and
Environment Affairs (DWEA) - FSA
Task Team
On a further positive note, work done by the
DAFF – DWEA - FSA Task Team has ensured
that all outstanding EIAs for new afforestation in
the Eastern Cape and KwaZulu-Natal have been
concluded.
Other Government Departments
and Initiatives
FSA received an invitation to attend the Presidential
Infrastructure Co-ordinating Committee
(PICC) investment summit at which the PICC
expressed grave concern at the decrease in
area under commercial forestry over the past 15
years. Following an intervention made during the
summit by FSA on this matter, FSA was invited
to hold a bi-lateral meeting with the PICC in 2013
to discuss issues of mutual interest. This is particularly
positive for Forest Products Industries
as while Forestry has featured in the previous
iterations of the Industrial Policy Action Plan of
the Department of Trade & Industry (Dti), the
PICC is now specifically interested in Forestry
for its own strategic interests. This bodes well for
the future of solid wood and associated timber
products in the country as public procurement of
these as part of the PICC is a major potential
growth market.
INTERNATIONAL CO-OPERATION
The FSA Executive Director took over the Chairmanship
of the FAO’s Advisory Committee on
Paper and Wood Products in 2012 and during the
year the Committee went through a restructuring
process to ensure greater inclusion of other
players in the global industry and forestry value
chain.
The resultant restructuring proposal was
presented to the Committee on Forestry (COFO)
in September and they approved the changes to
and continuation of the ACPWP under its new
name - the Advisory Committee on Sustainable
Forest-based Industries (ACSFI). This was a
major achievement, firstly because the FAO had
terminated several other Advisory Committees
and more importantly, because the ACSFI is
the only global forum where the private forestry
sector can meet to discuss and collaborate on
issues of common interest. It is also the only
private sector committee in either agriculture,
forestry or fisheries which enjoys financial and
technical support from the FAO.
Following FSA input into the Committee, the FAO
are conducting research into the relationship
between plantations and water at the global level
so as to increase international understanding of
this important issue.
FSA was also approached by Brazil, along
with New Zealand and other plantation growing
countries to establish a Global Plantation Agenda,
to help elevate plantations in the international
dialogue beyond the ACSFI, as that Committee
deals more broadly with commercial forestry.
To this end the Executive Director was invited
to address a COFO side-event that was
funded jointly by the Brazilian Forestry Association
(BRACELPA) and the FAO, looking
at certification systems as they related to
plantations. FSA once again highlighted the
challenges for independent timber growers in
pursuing and maintaining FSC certification
and this elicited a similar response of support
from the FSC Director-General who had raised
these self-same issues during the FSC event in
South Africa in 2012 and which is reported on in
more detail later in this Report.
FSA 2012 ANNUAL GENERAL
MEETING
FSA’s 10th AGM was held on 17th May 2012 at
the Fern Hill Hotel & Conference Centre near
Howick in the KwaZulu-Natal Midlands.
7 7

It was once again extremely well attended and
two very interesting guest speakers addressed
the meeting. The keynote speaker, Prof Justin
O’Riain, who is the Associate Professor in the
Department of Zoology at the University of Cape
Town and leader of the University’s Baboon
Research Group, gave an excellent presentation
entitled “Searching for sustainable solutions to
human – wildlife conflict within commercial plantations
in Southern Africa”. This presentation was
highly complimentary of the manner in which the
Industry had been attempting to address damage
causing animals in plantations, especially when
compared to other industries.
The second guest speaker was Mr Henry
Coppens of Sappi, who gave a talk entitled “The
Environmental Case for Paper”. This talk was
equally well received and dealt with the role that
plantations and forest products have in mitigating
CO 2 emissions. The talk was consistent with FSA’s
own efforts with DAFF and National Treasury
(under PAMSA’s leadership) leading up to and
during COP17 in 2011 and in the international
dialogue of the FAO under the ACSFI, reported
earlier in this Report, which seeks greater recognition
for the ecosystem services from plantations,
especially in the discourse around the
National Treasury’s often threatened carbon tax.
FSA would like to thank the above-mentioned
speakers as well as the many members who
attended the AGM for their participation.
FSA STAFF MATTERS
Recognition was given during the AGM to the
extraordinary contribution of Judy Dowsett and
Roger Godsmark, who had served the Industry
for 30 years and 25 years respectively in SATGA,
FOA and in FSA.
After having been with FSA for 10 years, Steven
Ngubane, FSA’s Business Development Director,
left the Association to take up a position as
Forestry Specialist in the Forestry and Wood
Products Business Unit of the IDC. It is pleasing
to know that Steven’s expertise will not be lost to
the Industry. We thank him for his service whilst
with FSA and wish him well in his new job.
FORESTRY INDUSTRY
MATTERS
FOREST PROTECTION
Forest protection issues continue to be a priority
focus area for the Industry as a whole and FSA in
particular. All concerned were therefore extremely
pleased when the long-awaited National Forest
Protection Strategy was finally approved by DAFF
in 2011 as it was envisaged that this would not
only provide a strategic framework within which
to manage the protection of forests on a co-ordinated
and more effective basis but importantly,
Government funding to help fund the necessary
research and interventions. It is thus disappointing
to note that the Strategy has still to be implemented
and resourced by DAFF.
Notwithstanding this setback, the Industry has
continued with its work - primarily through FABI
and to a lesser extent the ICFR and although
some successes have already been recorded, in
most part the work undertaken by these Institutes
to counter the threats facing the Industry can be
described as “work in progress”. A summary of
developments during the year is provided below.
Pests and Diseases
In 2012 a total amount of R7.2m, representing 32%
of FSA’s total Industry Activity Funding budget,
was allocated to combating pests and diseases.
Brief summaries of the initiatives undertaken are
highlighted below.
Sirex noctilio (Sirex Wood Wasp)
Although payment was received late, it is pleasing
to report that DAFF eventually paid its R3.5m
contribution to the Sirex Control Programme and
that the Programme was, through FABI and the
ICFR carrying this shortfall in the interim (until
FSA was able to refund them once the DAFF
funding had been received), able to continue its
highly successful work uninterrupted during the
year under review. In brief, highlights of progress
made are listed below.

• The research undertaken at both FABI
and the ICFR, as well as the production of
nematodes by FABI at its new bio-control
rearing and quarantine facility in Pretoria,
continued to provide critical and valuable
support to the Programme.
• The National Monitoring Programme was
once again highly effective in being able
to accurately indicate levels of infestation
by area, thereby identifying areas where
infestation levels and hence damage were
under control and where infestation levels
were sufficient to warrant additional or new
interventions being made.
• A total of 10 100 trees were inoculated
during the year. Importantly, 945 trees of
this number were inoculated as part of the
Small Grower Support Programme funded
through DAFF.
Fusarium circinatum (Pitch Canker)
2012 saw the South African Pitch Canker
Control Programme, which was established in
2010 under the Chairmanship and direction of
Dr Andrew Morris, enter into its final year of its
FSA sponsored 3-year funding window. Although
a number of research projects were successfully
completed during the life of the Programme
which identified specific problem areas and
remedial action that could be taken to assist in
reducing the damage caused by this pathogen,
the cost caused by Fusarium is still unacceptably
high and consideration may well have to be given
to extending the life of the Programme. Nevertheless,
the sterling efforts of Dr Morris in leading the
Programme as well as the co-operation Industry
received from the Seedling Growers Association
of SA must be acknowledged.
Thaumastocoris peregrines (Bronze
Bug)
Work on combating this pest was on-going during
2012 with FABI continuing with its research to try
and identify a potential biological control agent
and the ICFR undertaking impact assessment
trials. At the time of writing there were indications
that a suitable bio-control agent would be
identified shortly, following which an application
for its release would be made.
Leptocybe invasa (Eucalyptus Gall
Wasp)
After having initially caused extensive damage to
eucalypt species and eucalypt hybrids in South
Africa, particularly in Zululand, the wasp moved
up into Swaziland during 2012 where it continued
to cause a huge amount of damage. Given the
seriousness of the situation FSA, supported
by FABI and DAFF Forestry staff, put extreme
and unrelenting pressure on the Department to
fast-track the permit application process in order
that the bio-control agent identified by FABI, Selitrichodes
sp., could be released before further
extensive and costly damage occurred. It is
pleasing to report that this tactic worked, with
the permit being issued in record time and the
first batch of bio-control agents being released in
Zululand in July 2012. Sincerest thanks must be
extended to DAFF and to the team at the Forestry
and Agriculture Biotechnology Institute (FABI) at
the University of Pretoria under the leadership of
Prof Mike Wingfield. Without FABI’s diligence in
discovering and developing the bio-control agent
and then following the required protocols to seek
approval for its release, this breakthrough would
not have been made possible. Also to be thanked
are those of our members who made written representations
to DAFF to expedite the process and
to Mr Chris Chapman, the editor and proprietor
of SA Forestry magazine, for the excellent media
coverage he gave to the matter.
Coryphodema tristis (Cossid Moth)
Following concerns raised that it appeared as
if the original bio-control agent used to control
this pest had lost its efficacy, FABI began to
undertake research to investigate this. A survey
to determine infestation levels was also initiated.
Glycaspis brimblecombei (Red Gum
Lerp Psyllid)
This sap-sucking insect, originating in Australia
and feeding off eucalypts, was identified in Pretoria
during 2012. Its arrival in South Africa had been
predicted but not for several years. Dealing with
this new pest will necessitate additional research
effort and resources being found and committed
and again highlights the need for the National
Forest Protection Strategy to be implemented
sooner rather than later.
9

The potential damage to our plantation resource
that exotic pests and diseases arriving on our
shores can cause is immense. It is thus of crucial
importance that these threats are monitored,
identified and dealt with efficiently and effectively.
We as an Industry are thus grateful that we have
the services of world-class Institutions such as
FABI and the ICFR at our disposal which are
eminently capable of containing these threats.
FSA would thus like to express its sincere
thanks to all the staff working on our behalf at
these Institutes and particularly their respective
Directors, Profs Mike Wingfield and Colin Dyer.
Damage Causing Animals
In recognition of the tremendous amount of
damage that animals, particularly baboons,
cause to plantations, running annually into tens
of millions of Rand, funding for this three-year
Project was approved by the FSA Executive
Committee in November 2010. As a great deal
of preparatory work was undertaken in 2011,
including the setting of terms of reference for
the Project and the appointment of the Project
Leader, Prof Justin O’Riain of UCT, it was only
on 23rd April 2012 that substantive work on
the Project really began with the holding of a
Research Symposium.
This event, co-hosted by FSA and the ICFR,
brought researchers and plantation managers
together to share their research findings and
practical experience around the control of
baboons (the species prioritised for the Project)
in commercial plantations. The following day a
smaller group of specially invited participants
were involved in reviewing the findings from
the Symposium at a Workshop focused on
the search for sustainable solutions to humanwildlife
conflict within commercial plantations in
South Africa. Flowing from these interactions
and the approval of amended TORs, Prof O’Riain
drafted a research proposal and accompanying
budget for work to be done during 2013 which
was presented to the Executive Committee at
its meeting in November 2012. Although the
budget requested was R551 000, R51 000 over
that originally agreed to at the beginning of the
three-year funding window, the budget was
approved. This not only highlights the seriousness
with which FSA views the problem but also
confidence in the Project Leader to help solve it.
The control of baboons is a particularly highly
emotive issue and one that has to be handled
with great care and tact. The Industry is thus
thankful that we have the services of such a wellrespected
and capable expert in the field as Prof
O’Riain to lead the Project.
Forest Fires
As reported in last year’s Report, it is pleasing to
be able to report that the 2012 fire season was,
by all accounts, a good one. It is also pleasing
to note that the efforts of the Industry to combat
veld and forest fires have either been positively
enhanced on the one hand or alternatively not
been compromised on the other by certain legislative
/ regulatory proposals. FSA has given input
on all these issues, a summary of which appears
below.
• Amendments to the National Veld and
Fire Act and the National Forests Act:
DAFF’s proposed amendments, which
are fully supported by FSA, are intended
to ensure better compliance with the law
and result in more effective fire prevention
and fire fighting operations. This is a most
welcome development and will, amongst
other things, strengthen Fire Protection
Associations (FPAs) by compelling all
State entities, including Municipalities, to
become members of their respective FPA.
• SA Weather Service Amendment Bill:
Given the importance to the Industry
of obtaining accurate, timeous and as
localised weather forecasts as possible,
this highly controversial Bill, which in effect
would have shut down all private weather
forecasting services and left SAWS as the
only provider, was thankfully withdrawn
by the Minister following an outcry from
affected parties.

• New National Fire Danger Rating
System (NFDRS): Serious concerns
were initially raised by both members
and the KZN and Mpumalanga Forest
Fire Associations (FFAs) about the flaws
in the proposed new System and the
Fire Danger Index and the fact that the
new system was far less effective than
the current “Lowveld” System which was
well understood by members. Following
the requested intervention of FSA, DAFF
acceded to our request that before a final
decision was made, Industry be involved
in the decision making process. At the time
of writing, Industry, through the KZN and
Mpumalanga FFAs, is now represented on
a “NFDRS Task Team”. Encouragingly, the
CSIR, contracted by DAFF to evaluate 4
different Fire Danger Indices, have recommended
that the Lowveld System become
the National Fire Danger Rating System.
A final decision by the Minister is awaited.
• Licence Fee for Use of Frequencies:
FSA was asked to take this matter up
following indications that ICASA wanted
to charge landowners a licence fee on all
their neighbours’ frequencies used on their
own radios, despite an agreement having
been reached that this would not occur
some time ago. Such a move would have
simply increased the cost of fire protection.
However, as ICASA has not followed up
on the matter, members subsequently
requested FSA not to take any further
action.
• Broadband Radios in Aircraft: FSA
was alerted to the possibility that the Civil
Aviation Authority (CAA) was considering
banning broadband radios in aircraft and
was requested to intervene as this could
hamper aerial fire fighting communications.
Direct action by FSA was, however,
unnecessary in the end as the FFAs
informed FSA that they had managed to
get around the problem by (a) using alternative
equipment and that as a precaution,
(b) would apply for a temporary exemption
for this equipment being used during the
fire season to be absolutely 100% certain
of compliance.
• Firebreak Preparation: Following the
Forest Stewardship Council’s decision to
turn down the Timber Industry Pesticide
Working Group’s derogation request
regarding the use of paraquat, used extensively
in the preparation of firebreaks, the
ICFR began a research project during the
year to ascertain which chemicals could
be used as alternatives to those currently
derogated by the FSC. This research is
ongoing.
On a related matter, in response to a concern
raised by various members that although the
Industry was represented on various fire related
fora, it did not have a specific platform to formulate
fire related policies and procedures (e.g. standardisation
of fire reporting forms or the establishment
of an on-line fire reporting pilot project), the
Executive Committee asked FSA to look into the
possibility of establishing a fire related Working
Committee to address the situation. After having
discussed the issue with Industry fire experts,
it was decided that it would be more productive
to convene an inaugural National Forest Fire
Awareness Workshop to debate issues of
concern and in need, hold future Workshops
which could be held to possibly coincide with
Saasveld’s popular Annual “Fire Symposium”.
Although it was initially envisaged that such a
Workshop could be held in early 2013, this has
not been possible although every effort will be
made to convene it during 2013.
The successful combating of forest fires cannot
be achieved solely through the provision of
adequate funding – it needs the commitment,
expertise, co-operation and vigilance of individuals
and organisations in conjunction with the
effective deployment of both ground and aerial
fire-fighting resources. The relatively low losses
to fire incurred during the past fire season can
be attributed to these qualities and for this FSA
needs to extend its thanks to all those involved,
including the members of FSA, FPAs, FFAs and
the Working on Fire Programme.
Timber Theft
It is pleasing to report that through the steadfast
work being done by locally based “Timber
Theft Forums” in Mpumalanga (Lowveld), Piet
Retief / Vryheid, Richards Bay and Greytown,
11

steady progress continued to be made during
the year to combat the scourge of not only the
theft of timber but also that of other property
such as farm vehicles and equipment such as
chainsaws. These initiatives have illustrated what
excellent results can be achieved when members
co-operate together to focus their attention on a
particular challenge and for this they must all be
congratulated.
On a related matter, in an attempt to get a better
handle on the quantum of timber and equipment
theft from a physical and financial perspective on
a national basis, FSA has successfully requested
that the annual “Green Mamba” census form be
amended to include questions pertaining to this.
Once these facts are known, FSA will be in a
better position to lobby the relevant authorities to
ensure that they treat the problem with the seriousness
that it undoubtedly deserves.
FORESTRY RESEARCH
The trend of spending increasing amounts of
FSA’s income on research continued in 2012
with a substatial R15 885 092 (67%) of the total
Industry budget of R22 587 320 being spent on
research and the research components of forest
protection activities carried out through our collaborative
partnerships with the ICFR and FABI.
The inability of Government to match private
sector investment in R+D or to at least make a
greater contribution than they have done for the
past decade, has been a recurring disappointment
to Industry. This is made worse by the
fact that this reflects poorly on Government’s
commitment to transformation through growth
and because such support could have a mitigating
effect on administrative pricing and regulatory
cost increases which continue to reduce South
Africa’s competitiveness globally. We hope that
2013 yields better responsiveness from the State
in the area of research, as happens in almost
every other timber producing country with whom
South Africa competes in the international and
domestic market. This issue has been repeatedly
raised by FSA at Departmental, Ministerial and
Presidential level.
Just over 86% of FSA’s direct research budget
of R11.6m is for the core funding of the Institute
of Commercial Forestry Research (ICFR). In
addition to this, almost 75% of the total Research
and Forestry Protection budget of R18.9m is
spent through the ICFR. The core funding in
essence funds the basic infrastructure and core
competence needed by the Institute to maintain
its capacity to deliver high quality and relevant
research outcomes to the South African Forestry
Industry. It also enables the ICFR to play a leading
role in other programme activities of the Industry
such as those dealing with Forest Engineering,
Damage Causing Animals and Sirex.
While FSA and the ICFR have been seeking a
more sustainable funding model which would see
an increase in the core funding to the Institute, the
prevailing economic conditions have made this
impossible. It was decided, given the continued
financial pressure that FSA has sustained for
the past three years, that the ICFR would be
asked in 2013 to carry some of its costs from
its reserves. The ICFR are sincerely thanked for
agreeing to do so. Since this intervention is not
sustainable, the ICFR was also asked to closely
examine its programmes and business model
in order to identify possible ways to ensure that
the important work undertaken by the Institute
can continue sustainably, should the economic
conditions persist. This process will take place
during 2013.
FSA was further directed by the Executive
Committee to conduct its own analysis in 2013 of
the total research arena in forestry and attempt to
come up with a more stable funding arrangement
for research, taking into account the changing
socio-economic and political landscape in South
Africa.
Regarding some of the major achievements of
the ICFR during 2012, the following are noted.
• The ICFR celebrated 65 years of contributing
towards and supporting a vibrant,
sustainable, productive and globally competitive
forestry sector in South Africa.
• During the course of 2012, the ICFR
produced 12 Bulletins, 11 Technical Notes
and 17 Peer-review Papers as well as the
Annual Research Review. All available on
the ICFR website (www.icfr.ukzn.ac.za)

• The ICFR co-hosted with DAFF a very
successful 5th Forest Symposium. 240
delegates attended the event, the theme
of which was “Risks to Sustainable
Plantation Forestry: The Role of Research”.
• There was increased interaction with DAFF
in supporting their national research and
development strategy and strong collaboration
with FABI and Auburn University,
USA, vis à vis ICFR’s Pest Management
Programme.
• Four well attended and relevant field days
were held during 2012, covering all of the
forestry growing areas of South Africa. A
similar programme is in place for 2013.
• A framework for conducting research and
transferring knowledge and technology of
value to stakeholders, was developed and
implemented.
• To support efforts in aligning the ICFR
research and knowledge components
with members’ needs, a formal value
assessment was conducted through visits
to a range of stakeholders.
During 2012 the ICFR also took on the function
of housing the Forest Engineering South Africa
programme and in the past two years it has
produced significant outputs through co-operation
with the University of Stellenbosch, Nelson
Mandela Metropolitan University and the ICFR
itself. These include the following.
• Work study nomenclature and protocols –
a literature review.
• Shift scheduling in mechanised harvesting
operations in South Africa.
• Acacia mearnsii debarking: Comparing
the productivity and costs of different
debarking machines and systems in the
KwaZulu-Natal and Mpumalanga forestry
regions of South Africa.
• The use of forest residue for bio-energy in
Southern Africa.
• Guidelines for difficult terrain ground based
harvesting operations in South Africa.
• FESA currently has three research projects
running which will have substantial impact
in the industry, namely:
◊ Fibre progression from stump to mill:
A hardwood value chain assessment
considering alternative processing
methods.
◊ South African Forest Engineering Value
Chain Analysis.
◊ The integration between silviculture
and harvesting – how should silviculture
adapt to best fit current forest engineering
and vice-versa (supply chain
improvements).
• A very well attended Focus on Forest
Engineering Symposium was held in
November 2012 in White River.
Due to the importance of forest engineering,
the FSA Executive Committee approved an
increase in FESA’s budget from R250 000 in
2012 to R580 000 for 2013. This would allow
for the employment of a full-time Researcher
and Programme Co-ordinator. Mr Glynn Hogg
is sincerely thanked for the role he played in
co-ordinating the FESA programme in the
interim period.
More details on the ICFR’s and FABI’s research
programmes and activities can be found on their
respective websites - www.icfr.ukzn.ac.za and
www.fabinet.up.ac.za.
FSA would like to express its sincere thanks to
all those managers, scientists and technicians
involved in the Research and Development
arena and particularly those working for the
ICFR and FABI. A particular acknowledgment
must be made of the Directors of these Institutions,
Professors Colin Dyer and Mike Wingfield
respectively, whose continued dedication to the
advancement and protection of the Industry is
extraordinary.
13

AFFORESTATION ISSUES
Genus Exchange
Despite a detailed letter from FSA on the issue
and a request for a meeting, addressed to the
DG of Water Affairs (DWA) in late November
2011, at the time of writing this Annual Report,
there has still been no official response from the
Department. As a result, FSA undertook further
analyses and wrote to members indicating that
there was no compelling reason to apply for a
revised water use licence when changing genera
on the same piece of land. Importantly in coming
to this point:
• FSA had provided DWA with correspondence
between FSA and DWA going back
to 2001 indicating DWA’s agreement to this
exchange policy and provided evidence in
the form of a licence subsequently issued
by DWA, which demonstrated that DWA
was in fact already implementing the
agreement in respect of many licences
issued after that time;
• FSA’s Consultant on this matter, Prof
Graham Jewitt of the University of Kwa-
Zulu-Natal, in his preliminary report could
find no reason for DWA insisting on a new
licence and found that DAFF were using
the Gush Tables inappropriately at farm
level as they were not suitable for this
purpose;
• the current SFRA licences do not specify
a genus in the conditions of the licence
so any activity which does not contravene
the conditions of the licence (like changing
genera) do not require a new licence;
• there is no reason to apply for a water use
licence unless the activity changes – and
if the activity remains an SFRA, FSA is of
the view that a renewal is not necessary.
Members are advised to simply notify
DWA of any genera change for record and
billing purposes; and finally
• in a joint FSA-DWA-DAFF Technical Task
Team meeting, the head of SFRA in DWA
indicated that he had in fact advised the
DG of DWA to reply to FSA indicating that
henceforth no new licence was required
for genus exchange.
Although DWA have indicated that FSA can still
expect a response from them, it would appear
that reason may have prevailed in DWA and they
may have tacitly accepted the facts as put to
them by FSA and DAFF.
Unlawful Afforestation
DWA was concerned about the extent of unlawful
afforestation, particularly in Maputaland and had,
during the year, asked FSA to assist. FSA had,
however, declined to do so as it was not its job to
act as “policemen” and we had raised the issue
of administrative justice with DWA over many
years as well as with the State President publicly
in 2011.
Instead, FSA agreed to serve on a sub-committee
that DWA had established to determine
the extent of such afforestation and possible
impact thereof on the hydrology of the area. As
mentioned, it was pointed out to DAFF that this
situation had arisen primarily as a result of DWA’s
inactivity in dealing proactively with the licensing
application issues in this area. A moratorium on
new afforestation in the affected catchments had
been put in place.
Licences on Claimed Land
Last year DWA was, in certain instances, refusing
to issue water use licences on land that had
been Gazetted in terms of the Restitution of Land
Rights Act. After obtaining legal opinion, FSA had
pointed out to DWA that this was unlawful. Since
then, this issue seems to have been resolved
but FSA representatives on the various Licence
Assessment Advisory Committees (LAACs) are
keeping a close watch out for any digressions.
BEE Requirements
Of particular concern last year was the issue of
DWA’s insistence that Section 27(1)(b) be given
priority over other sections of the National Water
Act (NWA) when assessing a water use licence
application. FSA obtained legal opinion which
indicated that no sections of the NWA could be
given higher preference than another and that

DWA’s actions were therefore unlawful. It appears
that DWA are now accepting the BEE scorecard
but are requesting that a plan be produced on how
the applicant intends to improve their BEE score.
DWA thus appears still not to have recognised
that a BEE compliant score indeed indicates
compliance and FSA will seek the Forest Sector
Transformation Charter Council’s assistance in
communicating this fact to DWA.
Area Exchange
As per FSA’s letter to DWA in 2011, we recommended
that there should be no need to apply for
a new water licence for area exchange, subject to
certain conditions such as possible EIA requirements
being met but again we have not had a
formal response on the matter.
On a related matter, Eskom were given details as
to how to apply for a water use licence i.r.t. area
exchange regulations but it seems that their contractors
are not aware of the stated intention of
Eskom, following the meeting that FSA held with
them in 2010. FSA will thus attempt to formalise
the agreement that was reached whereby Eskom
would handle an area exchange application when
building new power lines which necessitated the
removal of plantation trees.
Irrigated Land
DWA are developing a document regarding the
swopping of irrigated land water rights for water
use rights to plant timber. DWA officials have
informally suggested that a ratio of 1:10 hectares
of irrigated land for plantation area (i.e. 10
hectares of trees for 1 hectare of irrigated land)
could be exchanged but as yet no such policy
exists. There are a number of land reform beneficiaries
who particularly want to exchange their
irrigation rights in favour of SFRA water use rights
and so a pilot study is being conducted which will
hopefully help establish a policy and precedent.
New Areas
KwaZulu-Natal
Very few licences were approved in KwaZulu-
Natal during 2012, mainly due to the Amafa /
Heritage KZN’s insistence that a “heritage impact
assessment” be undertaken in respect of each
application and due to the compulsory licensing
process in the Mhlathuze Water Management
Area. Other issues of importance are the
following:
• In the Umzimkhulu Catchment DWA had
resolved that it would allow 2 000 ha of
new plantations and a 1:1 area exchange
ratio for jungle conversions. They are
now talking about allowing 5 000 ha of
new afforestation which we hope materialises.
Following FSA’s intervention,
DWA’s unilateral decision to limit all applications
to 10 ha, irrespective of what
had been applied for, had been successfully
resolved. The Department of Trade &
Industry (Dti) had furthermore undertaken
to fund the EIAs for the first batch of 21
applications received and they are also
thanked in turn for this support. An afforestation
potential study had identified an
area of 39 000 ha that could potentially
be afforested. Members were encouraged
to take-up this opportunity promptly
otherwise other water users would take-up
the potential.
• The delay in the conducting of an overarching
EIA on the borders of the iSimangaliso
World Heritage Site was, in turn, delaying
the consideration of licences. A special
Committee has been set up to review the
process, but progress is predictably slow.
Eastern Cape
The DAFF and Dti appointed consultants worked
hard under the Technical Task Team for Afforestation
to ensure that the EIAs and Basic Assessments
for the new areas in the Eastern Cape were
finalised during 2012 and submitted to DEA. This is
now yielding results, with a number of applications
being processed. However, in order to assist the
process, companies who are the strategic partners
of communities have been requested to attend the
LAAC meetings, as often the communities do not
have sufficient forestry expertise to submit planting
plans and other technical requirements. DAFF and
the Dti are sincerely thanked for their financial and
staff commitment in trying to facilitate this
afforestation.
15

Southern / Western Cape
After FSA repeatedly raised the issue of the recapitalisation
of the exit areas over the past two
years in the DAFF Commercial Forestry Liaison
Forum, CEO’s Steering Committee and CEO’s
Forum as well as with the Presidency, DAFF
undertook to reconsider its stated intention for
the Department to replant the areas itself.
WATER ISSUES
Raw Water Charges
Although DWA had initially proposed well-above
inflation increases, following a sector specific
meeting with DWA, FSA successfully motivated
for an inflation-linked raw water tariff increases
for 2012/13 and further proposed that the tariff
increase be applied across all afforested areas
in the country. This was agreed to and a 6.6%
increase was implemented country-wide.
Concerning 2013/14 tariff increases, DWA had
once again proposed SFRA water tariff increases
of well above inflation - ranging between 10%
and 382%. While no Sectoral water tariff meeting
had been held with Forestry, FSA attended the
National Consultation meetings and made representations
to the DG. The DG once again invited
FSA to propose tariff increases which Industry
could sustain and again we proposed inflationlinked
increases in all Water Management
Areas. Unfortunately our proposal was ignored
and increases of between 10% and 20.8% were
approved in March 2013.
Water Pricing Strategy
DWA undertook to involve FSA in developing a
new Water Pricing Strategy and in terms of discussions
held, the following needs to be recorded:
• FSA indicated that should the principle
of inflation-indexed increases for forestry
be adopted in the strategy, FSA would be
willing to help collect the water charges on
the proviso that any savings in this process
could be passed onto our members in the
form of discounted future tariff increases.
• FSA also conveyed to the DG our disapproval
of the idea of a standard tariff for all
users as Forestry could not be expected
to pay for the cost of dams, infrastructure
and personnel, as none of those costs are
incurred in the provision of water to the
primary side of the Forestry Industry.
• The DG was also most interested in the
arguments we put forward on water use
efficiency and the relative social and
economic returns to the country in relation
to other water users as this dialogue will
become increasingly important in future
considerations around water use.
As mentioned elsewhere in this Report, FSA,
through its role in the Food and Agriculture
Organisation of the UN, has arranged for an FAO
funded study into the relative cost benefits of
water use in plantation growing countries vis à
vis other water users as for too long the dialogue
has centred only on the absolute water use of
plantations.
Other Water Issues
Proposals to reduce the number of Water
Management Areas (WMA) from 19 to 9 were
Gazetted during 2012 and FSA supports this as it
reduces the administrative cost of water services,
which is just about the only cost that DWA incurs
in respect of providing water services to our
Industry.
ENVIRONMENTAL ISSUES
FSA’s Environmental Management Committee,
under the Chairmanship of Dr David Everard,
once again had a busy year, some of the more
important issues dealt with being summarised
below.
Forest Stewardship Council
• The FSC South Africa Standards Development
Group revised the previously
submitted standard to align it with various
recent requirements of the FSC and
the final draft standard had now been
submitted along with the relevant documentation
and would be considered
by the FSC for approval in due course.

This should significantly reduce the cost
and time for independent timber growers
in maintaining FSC certification.
• Efforts were underway globally to promote
the FSC brand. A three day event was
hosted in South Africa in June 2012
and FSA had an entire day with the
FSC’s Director-General in which we and
our members discussed a number of
challenges that the sector had in respect of
certification. These included the cost and
burden of certification for smaller growers,
the FSC’s stance on the use of Genetically
Modified Organisms, the FSC position on
herbicides and pesticides and the need for
joint recognition among different certification
bodies.
• Dr Scotcher has been invited to serve on
the Marketing Advisory Group to assist in
promoting the FSC brand in South Africa
and will be holding meetings with “Key
Account Holders” in early 2013 as part of
this initiative.
• There was a strong motivation for an FSC
National Office to be set up in South Africa
as this would increase the FSC’s profile in
the country and provide support (including
financial) to certificate holders. This was
being investigated by the FSC.
• FSC had launched a three year project to
facilitate the certification of small private
forests by developing tools for the certification
of forestry contractors. This was
consistent with the objectives of the Forest
Sector BBBEE Transformation Charter
and fully supported by FSA.
• FSA’s Executive Director has been working
closely with counterparts in Brazil and
elsewhere to lobby FSC on the use of
GMOs, pesticides and herbicides in plantations.
Environmental Impact
Assessment and Management
System
Policy Steering Committee was working on
creating within the next 5 years an environmental
impact and assessment management system
that consisted of both voluntary and regulated
instruments. FSA, who believes that this system
would result in excess work, cost and stakeholder
involvement in decision making, was preparing a
submission in response.
Timber Industry Pesticide
Working Group (TIPWG)
Derogation applications i.r.o. certain chemicals
used by the Industry in South Africa were
submitted to the FSC for consideration but these
were turned down despite the fact that FSA had
sought and obtained DAFF endorsement for the
application. Although disappointing, the ICFR
was looking at alternatives.
Provision of In-Field Toilets
The Department of Labour in Mpumalanga
had issued a directive that portable toilets for
in-field forest workers must be provided, despite
it not being a statutory requirement. FSA was
monitoring the situation and assessing the implications
thereof.
SANBI Grasslands Programme
The Grasslands Programme continued to
produce excellent outcomes during 2012 - not
only related to grassland conservation but also
for small grower sustainability and, importantly,
the Sector’s image. Two new Grassland Nature
Reserves were established during the year
(making a total of 25 now) and 12 others were
close to being declared as such.
Climate Change Issues
FSA, through Business Unity South Africa
(BUSA), made extensive input into the Green
Paper on both how forests could mitigate climate
change and on the proposed introduction of a
carbon tax. Both BUSA and FSA are opposed to
the introduction of a “carbon tax” in the form of an
emissions tax.
A Department of Environment Affairs (DEA)
17

Both BUSA and FSA are opposed to the introduction
of a “carbon tax” in the form of an
emissions tax. However, while National Treasury
is still pursuing the proposed tax, after having
received input from FSA (through PAMSA), they
have recorded their willingness to “recognise”
plantations in South Africa in terms of their role
in off-setting emissions, provided this can be
monitored, reported and verified.
The commercial Forestry Industry in South
Africa, as plantation based industries in other
parts of the world, is under the constant scrutiny
of those wanting to find fault with its environmental
practices. It is thus important for the
Industry to protect the impressive environmental
credentials that it has built up over many years
by ensuring that our plantations continue to be
managed in the most environmentally sustainable
manner possible. We as an Industry are
indeed fortunate therefore to have the expertise
and commitment of the members of the FSA
Environmental Management Committee at our
disposal to ensure that this happens. A word of
thanks must be extended to the members of the
Committee and especially to its Chair, Dr David
Everard, as well as to Dr John Scotcher, FSA’s
own Environmental Consultant, who not only
does a considerable amount of work on behalf of
FSA but who is also the FSC contact person in
South Africa.
LAND REFORM
Five years ago land reform seemed to present an
almost insurmountable challenge to the sustainability
of the rural economy. Fortunately, many
people in Government and civil society heeded
the warnings that FSA and others were making
about approaches to the land question, not just in
respect of the sustainability of the rural economy,
but also the sustainability of the livelihoods of the
very people that land reform sought to benefit.
This change in approach from Government was
greatly helped by the unfortunate and spectacular
failure of most land claims that had been
settled and the enormous cost that the State
has had to bear, both in purchasing farms which
subsequently failed and in defending legal action
brought in respect of spurious claims which had
been Gazetted.
The erstwhile Department of Land Affairs,
endorsed FSA’s sale and lease back models,
which while initially criticised by some officials
in the DLA, have produced vastly more positive
outcomes for land claimants and the rural
economy than in most other settled claims.
This has resulted in the current Minister of
Rural Development and Land Reform (DRDLR)
repeatedly using the Forestry Industry models as
an example of how sustainable land reform must
be achieved. The Department has indicated
that it will not settle any more claims without a
strategic partner being identified upfront who can
support the land beneficiaries over time, which
is precisely what the forestry land claim models
achieve.
Furthermore, most of the DRDLR’s budget is
now allocated to the recapitalisation and development
of already restored land, whether transferred
through land restitution or redistribution. To
this end, FSA is still aiming to conclude an MoU
with the DRDLR, through which support is given
to land claimants, land reform beneficiaries and
other people in the rural development landscape.
It seems that the emphasis is shifting from
measuring the success of land reform and restitution
based primarily on land ownership targets,
to one in which the success of restitution and
reform is measured by the transformation and
growth of the rural landscape, inter alia through
partnerships and social cohesion. It is difficult,
after all, to claim success, when people have
land restored to them and yet are unable to derive
meaningful livelihoods from it and when the rural
economy, national economy and social returns
are compromised in the process.This was
perhaps best demonstrated when the Minister
announced that the target for the transfer of 30%
of commercial farming land into black ownership
had been moved from 2014 to 2025. What was
even more revealing was the response, or
lack thereof, by civil society and NGOs. There
were no calls for the Minister to resign or that the
ruling party had failed land claimants and land
reform beneficiaries. There appears rather to
be a growing realisation from all concerned that
farming is a very difficult economic activity, which
is best carried out by people with a deep passion
and talent for it and for the lifestyle it offers. Many
land claimants are the descendants of those who
were dispossessed of their land and are often far
removed geographically, temporally or emotionally
from the land.

Leaving the development of the rural economy in
the hands of people who have neither the interest
nor ability to farm has not only completely failed
the objectives of the land reform programme
in terms of redress but has been expensive
and damaging to the broader socio-economic
objectives of the country.
Land Committee
As a result of FSA’s continued engagement with
the DRDLR and our inputs into the Green Paper
on Land Reform and Tenure Security Bill, FSA
was invited to form part of the National Agricultural
Reference Group (NAREG) that was established
by the Minister. The NAREG has six workstreams
seeking to find better mechanisms and
legislation to deal with different aspects of the
Green Paper and Tenure Security Bill and deal
with the following:
• Land Rights Management Board
• Land Management Commission
• Land Valuer-General
• Three Tier Tenure System
• Communal Land
• Legislative Amendments
As Agri SA were involved in all the workstreams
and could thus cover issues of common concern,
FSA’s Land Committee decided to focus our
resources on the areas where we could have
greatest impact. As such, FSA focused its efforts
on the Land Management Commission as it
was dealing with the pressing issue of tenure
security and evictions. The Minister met with this
workstream three times in 2012 and ultimately the
workstream became responsible for developing
the Land Tenure Security Policy, proposing legislative
amendments to the current Extension of
Security of Tenure Act (ESTA) (still in progress),
developing a policy to deal with illegal evictions
and an implementation strategy for dealing with
tenure.
As a direct result of the workstream’s progress,
the Minister wrote to the President requesting
him to withdraw the highly controversial
Tenure Security Bill as the Land Management
Commission workstream had produced a far
more pragmatic and equitable draft policy, which
sought to address the issues identified. Some
of the key elements of the Draft Tenure Security
Policy include:
• recognition that land owners rights must
be greater than those of farm dwellers and
farm workers;
• that amendments to ESTA and the Labour
Tenants Act would suffice to support the
policy and implementation plan, instead of
pursuing the radical Tenure Security Bill;
• that tenure was no longer a purely historical
and race-based issue, as new owners of
land after 1994 (including the State) were
deeply involved and affected by issues
pertaining to tenure; and
• that the strategy to deal with tenure needed
to be intensely focused on rural development
as a solution to the key challenges
of tenure and livelihood security.
The Draft Evictions Policy that was developed in
2012 was circulated to the FSA Land Committee
for input. Importantly both the Tenure Security
Policy and Illegal Evictions policy seek to
understand the causes of evictions and take
a holistic view to deal with the consequences
through, inter alia, promoting rural development
and partnering with existing land owners.
Land Audit
The DRDLR concluded its audit of State Land
using information obtained from the Deeds
Office. The objective was to determine the extent
of State Land, what the various land uses were
and by whom it was being used. In the process, a
desktop audit in respect of privately owned land
was also conducted. The process excluded unsurveyed
land.
The DRDLR committed itself to working with Agri
SA and FSA and to do so through the sub-committee
of the DAFF CEO’s Steering Committee
which has been dealing with land audits. This
should improve the accuracy and detail of the information
contained in the Land Audit.
19

LABOUR ISSUES
Although FSA dealt with a number of labour
related matters during the year under review,
probably the most contentious and important
one, namely the impact of the new Agricultural
minimum wage on the Forestry minimum wage,
occurred outside of the reporting period covered
by this Report (i.e. in the first three months of
2013). However, given its importance, a summary
of developments on this and other matters dealt
with during 2012 are given below.
Progress with Draft Labour
Amendment Bills
Despite being published for comment in
December 2010, progress in enacting these
highly contentious Bills has been extremely slow.
FSA made extensive submissions on all four
of them in early 2011 as their impacts will have
major cost and operational implications for the
Industry and will have severe unintended consequences,
not least of which being to act as a disincentive
for employers to employ more workers.
A brief progress report appears below.
Draft Labour Relations and
Basic Conditions of Employment
Amendment Bills
Both Bills have completed the Nedlac process
and were sent to Parliament during the year to
begin the Parliamentary approval process. FSA
was one of the stakeholders invited to give an oral
presentation to the Labour Portfolio Committee
in July 2012 during their two days of public
hearings. Although some of the more radical
aspects of both Bills have been amended, they
nevertheless still contain some highly problematic
provisions, including:
• Non-compliance would be a criminal
offence.
• Temporary employment would be limited
to 6 months.
• The Minister would have the power to
set wage increases generally, not just
minimum wages.
• The Minister would be able to set union
recognition thresholds.
• The ability to object to / appeal against
compliance orders has been removed.
The opportunity for further stakeholder input into
these Bills has now passed so it is hoped that
sense will prevail and the remaining contentious
issues, as mentioned above, be either expunged
from or at least tempered when the final Bills are
enacted. The events that unfolded at Marikana
may even prompt further re-evaluation and
amendment of the LRA.
Employment Equity and
Employment Services Bills
These Bills, both of which have their own contentious
provisions, are still being negotiated
in Nedlac and have thus not as yet reached
the Parliamentary approval process stage. It is
hoped that FSA will, as with the other two Bills
mentioned in the previous section, be given an
opportunity to make an oral presentation to the
Portfolio Committee to highlight the negative
unintended consequences that the Bills could
cause.
Review of Forestry Sectoral
Determination for 2012
As reported in last year’s Report, FSA’s Human
Resources Committee held discussions with
the Department of Labour in late 2011 vis à
vis conditions of employment and minimum
wages applicable to the new three year Forestry
Sectoral Determination cycle which became
effective from 1st April 2012. FSA’s standpoint
was that the existing employment conditions
should remain unchanged and, more importantly
given continuing difficult economic conditions,
the increase in wages between the end of the
old three year cycle and the new cycle, as well as
increases over the subsequent two years, should
be pegged at no more than CPI +1%.
Following consultations with the workers and Trade
Unions represented in the Sector, DoL made a
recommendation to the Employment Conditions
Commission who in turn made a final recommendation
to the Minster which she subsequently

approved and Gazetted. Although conditions of
employment remained unchanged, the eventual
minimum wages Gazetted over the three year
life cycle of the Determination were significantly
different from what the Industry had wanted. The
initial minimum wage wef 1st April 2012 increased
by 11.8% to R1 428.70 per month, almost double the
CPI, and the minimum wage differential between
the Forestry and Agricultural was to be eliminated
over the cycle period - this being done by linking
the Forestry minimum wage to that applicable to
Agriculture - 95% of the Agricultural minimum wage
in 2012, 98% in 2013 and 100% by 1st April 2014.
Annual wage increases were also not based on
FSA’s recommendation but on the higher figure of
CPI for the lowest quintile of the population (i.e. the
lowest 20% by income) plus 1.5%.
Given the cost pressures being faced by the
Industry, FSA was concerned that such an
increase would not only have a negative impact
on employment levels but would negatively affect
the Industry’s international competitiveness. FSA
could not, however, have foreseen at the time
what the implication of the linkage to the Agricultural
minimum wage would be for 2013 and
beyond.
Review of Forestry Sectoral
Determination for 2013
The Industry was fully aware that any outcome
from the wage negotiations that took place
between the Government, trade unions and
organised agriculture in the last two months of
2012, following the farm worker unrest in De
Doorns in the Western Cape, would have a direct
impact on our own Industry. However, its ability
to influence this impact was severely constrained
in that (a) it was not (nor could it be) party to the
negotiations and (b) the 2012 Forestry Sectoral
Determination (FSD) had linked the forestry
minimum wage to that of Agriculture, as detailed
above.
At its meeting held on 22nd November 2012,
the Executive Committee expressed extreme
concern over developments and agreed that:
• there was a need for FSA to monitor
developments closely and participate in
whatever forums were set up to address
the issues;
• FSA would support the current FSD being
prematurely merged into and becoming
part of the ASD (although this was agreed
before the new agricultural minimum wage
of R105.00 per day was known); and that
• FSA would continue to support and lobby
for the continuation of the current Sectoral
Determination process and that any
amendments to the FSD must be done
within that process.
In terms of due process, DoL requested an urgent
meeting with the Industry on 1st February 2013 to
discuss the issues surrounding the consequences
of any large wage increase on the Industry,
the linkage between the forestry and agricultural
wages and the exemption process. The meeting
gave the Industry an opportunity to have in-depth
discussions with the DoL representative and
Employment Conditions Commissioner (ECC)
present at the meeting and to appraise them of
the considerable potential damage that could be
caused not just to individual forestry businesses
and the Industry but also to employment levels
and rural economies if any new minimum wage
was set at an unsustainable level. Of concern was
the fact that it appeared as if DoL and the ECC
were oblivious to these potential consequences.
Although individual exemptions could be applied
for, it was realised that the only practical option
open for getting overall relief was for the Minster
to amend downwards the 98% wage linkage
level set in terms of the current FSD. In response
to concerns raised, the Department undertook
to appoint the Bureau for Food and Agriculture
Policy (BFAP), who had done a similar study
for agriculture as part of that revision process,
to conduct an urgent study into the impact of
minimum wages on the Forestry Industry (using
their own and research that FSA had specifically
commissioned for the purpose) which would
be used as a basis for a recommendation to the
Minister.
• it was imperative that a “free-for-all” in
setting wages needed to be avoided;
21

This was unfortunately not done, as the following
week the ECC met and recommended to the
Minister that the FSD remained unchanged.
This was approved by the Minster and so, as of
1st April 2013, the new forestry minimum wage
increased to 98% of the agricultural minimum
– or by R800.62 to R2 229.32 per month. This
represents an increase of no less than 56%.
An increase of this magnitude, especially when
looked at together with administered price
increases, will undoubtedly act as a catalyst for
the restructuring of the Industry towards a less
labour intensive production model involving the
mechanisation of operations. Although too early
to tell what the ultimate effects will be, the process
of restructuring will have to be handled with care
so as not to cause social tension and instability.
This whole episode has not been a happy one.
Having two separate, yet linked, Sectoral Determinations
has proved to have been central to this
as it totally compromised the Industry’s ability to
control its own destiny. It has, however, not just
been our Industry that has been compromised
– what started off as wage negotiations to quell
farm labour unrest in a localised area specialising
in producing a number of high value grape
and citrus crops in one Province has ended up
in a situation whereby all farmers in the country,
irrespective of location, farm size, crop, land productivity
or affordability being affected.
Cosatu Proposals Regarding
Labour Matters
In mid-2012 Cosatu released a number of
somewhat alarming proposals regarding the
labour market. Although their views on various
issues such as the use of labour brokers is
well known, these proposals represented an
extension of their thinking and included:
• the setting of a national minimum wage of
between R4 800 and R6 000 per month
for all workers;
• the establishment of a national centralised
collective bargaining system covering all
sectors of the economy; and
• increasing the welfare safety net.
At the time of writing Cosatu has been pushing
the public debate on these issues hard and is
actively lobbying the Government to implement
their national minimum wage proposal in 2014.
FSA believes that the adoption of such policies
would be economically counter-productive and,
given the fact that 2014 is an election year, will
closely monitor any developments on this.
Foreign Workers
FSA was alerted in September 2012 to the
fact that DoL officials in Mpumalanga were not
issuing “corporate” work permits to employers
and that as a result, the Department of Home
Affairs was not able to issue work permits to the
affected individuals. As many foreign nationals,
particularly from SADC countries, work in the
local Industry, such action could seriously affect
forestry operations. FSA has since been co-operating
with both the SA Contractors Association
and Agri SA to try and resolve the problem on
a case-by-case basis. On a positive note it can
be reported that following negotiations at Nedlac,
the Department of Home Affairs has been tasked
with drafting regulations governing the issuing
of work permits to foreign workers which should
hopefully address the current problems being experienced.
FSA would like to thank Agri SA’s in
particular for the assistance that it has rendered.

Report on Employment
Conditions in the Forestry
Industry
The above Report, which was commissioned
by DAFF, was presented to the Charter Council
during the year but not made public. Notwithstanding
this, the author of the Report wrote a
highly disparaging article, presumably based on
the findings of the Report, which was published
in one of the Industry’s trade magazines. To
exacerbate the situation, a number of articles
related to the original article appeared in various
other media publications. The Executive Director
responded the best he could under the circumstances
by writing an article in response which
was published in the same trade magazine.
FSA also complained to DAFF who undertook
to investigate whether the author had broken
any mandates and if so, to impose the appropriate
sanction. It was further agreed between
the parties that in terms of process, the Report
should first be discussed by the Charter Council
and that any shortcomings found would be
addressed by the Industry through the Sectoral
Determination process.
At the time of writing, the Report had still not
been made public. Although the contents thereof
are unknown at this stage, it can be assumed
that the prognosis is not good. FSA will consider
an appropriate response, within the context of its
agreement with DAFF, once it has had a chance
to study its contents.
BUSINESS DEVELOPMENT UNIT
The Business Development work of FSA suffered
a setback in August 2012 with the resignation
of the Business Development Director, who
thankfully was not completely lost to the Industry
in that he accepted a position focussing on
forestry within a leading Development Finance
Institution.
Business Development Forum
In spite of the then imminent departure of the
Business Development Director, FSA forged
ahead with the establishment of an FSA Business
Development Committee. The Committee aims
to promote greater business and development
opportunities between FSA’s larger and smaller
growers, especially in the areas of enterprise
support, development and transformation. This
has been a recurring theme over the past few
years and the opportunity to promote such partnerships
between members must be actively
encouraged.
Most of the larger growers attended the initial
meeting and presented synopses of their
respective company support programmes to
smaller growers and SMMEs and welcomed
the initiative from FSA. FSA, in turn, would like
to thank its members for their support of this
initiative which will be one of the key focus areas
for the new Business Development Director,
once appointed.
DAFF Forestry Grant
Following years of lobbying by FSA and after
having being directed repeatedly by the Minister
to explore all other sources of development
finance within and outside of DAFF, the Minister
finally acknowledged the need and obligation
for DAFF to establish a Forestry Grant for small
growers, which she announced in August 2012.
23

FSA is grateful to the Minister and DAFF
colleagues for this announcement and we
sincerely hope, on behalf of all our existing small
growers and aspirant future entrants, that DAFF
will put the necessary budget request to National
Treasury to enable the fund to be more than just
a public relations exercise.
Dti Employment Creation Fund
FSA had supported the DAFF application for
funding from the Dti’s Employment Creation Fund
(sponsored by the EU and the UK’s Department
for International Development) but this had been
turned down. The application sought funding for
the EIA process, business planning process and
capital for the afforestation of the areas identified
in the Eastern Cape and KwaZulu-Natal.
Undaunted, FSA, the Industrial Development
Corporation and DAFF agreed to draft a new
proposal and submit it on behalf of the Dti, notwithstanding
the DAFF announcement of the
creation of a Forestry Grant fund scheme, as this
may still take time to materialise and to secure
funding from the National Treasury.
Transfer of
Category B Plantations
The transfer process has continued to proceed at
an extremely slow pace, with the DAFF plantations
continuing to make a loss of close to R1 million
per day. DAFF have, however, developed another
Transfer Policy and will discuss it internally first
before discussing it with Industry. On a slightly
more positive note, DAFF did indicate that it was
hoping to transfer the Mbazwana plantation by
end of March 2013.
Integrated Small Enterprise
Development Strategy for
Forest Sector in South Africa
This Strategy was approved by DAFF’s Forestry
Branch during the year and is now in the process
of gaining Departmental approval. As with the
Forestry Grant and several other strategies that
DAFF have developed, the successful implementation
of this Strategy will depend in very
large part on DAFF’s ability to get funding for it.
Sawlog Strategy
The Sawlog Strategy was finally approved by
the Department and in accordance with this, the
replanting of exit areas and the rehabilitation of
Category B plantations should receive priority.
FSA has repeatedly raised the issue of the recapitalisation
of the exit areas with DAFF and
they have committed to revisiting their previous
positions on the issue.
TRANSPORT ISSUES
2012 once again proved to be an extremely busy
year for the FSA Transport Committee. As with
last year, although the major focus of the Committee’s
activities during 2012 were related to
rail matters, specifically the planned visit to the
Industry by the Group CEO of Transnet, a number
of other important transport matters were dealt
with. A brief summary of these issues appears
below.
Railage Matters
It is very pleasing to report that good progress
was made by the Committee during 2012. This
was, in the main, achieved as a direct result
of a 180 degree shift in Transnet Freight Rail’s
(TFR’s) previously ambivalent attitude towards
timber (and other general cargo) traffic towards
a new-found willingness to do whatever was
necessary to reverse the migration of timber off
rail and onto road. Of importance to note was
that TFR acknowledged their shortcomings and
the prime reasons for the decline in timber being
transported by rail, namely uncompetitive tariffs
and poor service levels and the need for these
issues to be addressed in order to achieve their
objectives. A summary of major developments in
this regard appears below.
High Level Transnet Delegation Visit to
Industry
As reported in last year’s Annual Report, following
a high-level meeting with FSA’s Executive Director
and the Transnet CEO, Brian Molefe, facilitated
by BUSA, the latter indicated that he would like
to visit the Forestry Industry. After several years
of failed attempts to set up a high level meeting

etween FSA and Transnet, this breakthrough
provided an excellent opportunity for the Industry
to highlight the railage challenges it faced and to
propose ways in which these could be resolved.
As instructed by the FSA Executive Committee,
the Transport Committee and in particular its
Chairperson and Secretary, Mr Bruce Goatley,
spent a considerable amount and time and
effort over the following months planning and
making arrangements for the impending visit on
7th September 2012, including the preparation of
presentations, selection of specific sites to visit
and arranging logistics. It was thus highly disappointing
that a few days before the scheduled
visit, Mr Molefe had to cancel due to an urgent
engagement that he had to attend. Initially
viewed as a major set-back, things turned out
well in the end as TFR insisted that an alternate
meeting still take place on the same day.
Transnet Freight Rail (TFR) Branch
Line Strategy
After several years trying to arrange a high level
meeting between Industry and TFR’s senior
executives without success, TFR itself actually
approached the Transport Committee to ask
if five of its senior executives could attend its
meeting on 29th August 2012 in order to inform
the Industry about their new Branch Line Strategy
and to discuss ways in which the two parties
could work together to increase the volume of
timber currently railed. This development followed
on from the Committee having actively pursued
the possibility of taking up a concession to run
the “Pietermaritzburg Cluster” of branch lines, a
network of over 700 kms of branch lines, during
the previous two years but which had stalled as
a result of what Industry considering to be TFR’s
fatally flawed concessioning business model
that would render the operation of branch lines
financially unviable. In also recognising this, the
Department of Public Enterprises had instructed
TFR to develop a business model which would
address the flaws identified. It was this amended
model which TFR presented to the Committee,
some of the key features being the following:
• The rehabilitation of branch lines went
hand in hand with an overall revitalisation
of TFR’s General Freight Business (which
included timber, agricultural products
and a host of other non-coal and iron
ore products) and was to be done in the
context of capital investment on infrastructure
/ rolling stock over the next 7 years of
a massive R151bn – half of the R300bn
that was planned to be spent in total.
• Three pilot branch line concessioning
projects were already underway and
in total, 14 active branch lines and a
similar number of closed lines were being
considered for the concessioning model,
including the Pietermaritzburg Cluster
which alone would require R100m of
investment to bring it back to full operational
capacity.
• TFR was looking at Public, Private Partnerships
(PPP) and/or Private Sector Participation
(PSP) schemes as the vehicles to
run the concessions that were eventually
offered.
From the Committee’s side, although impressed
with TFR’s obvious commitment to ensuring
timber returned to rail and recognising that the
new concessioning model was a great improvement
on the original one, the model still had some
serious drawbacks, the more important of which
being that the concessionaire would be responsible
for track and infrastructure maintenance
and that they would have to use TFR as the sole
service provider. Given the above, the Committee
made it quite clear to the TFR delegation that
the Industry was not interested in concessioning
the Pietermaritzburg Cluster of branch lines on
the terms set out and that as an alternative, the
parties should look at re-establishing the “Thut’
ihlathi” (isiZulu for “Move the Forest”) Project.
This had initially been set up a decade earlier
as a collaborative project between Industry and
TFR’s predecessor, Spoornet, and had proved
highly successful, having increased operational
efficiencies significantly, thereby injecting new life
into the Pietermaritzburg Cluster of branch lines.
After having given the TFR delegation a presentation
on the Project and discussing its operation
details, the TFR delegation agreed to look at this
option.
25

Revival of Thut’ ihlathi Project
As mentioned above, at the insistence of TFR,
a meeting between themselves and the FSA
Transport Committee was held on 7th September
2012 to discuss the possibilities of reviving the
Thut’ ihlathi Project. It is pleasing to report that
after having studied the proposals tabled by the
Committee on the matter at the initial meeting held
less than two weeks earlier, TFR were extremely
keen on reviving the Project and had subsequently
drafted a Project Plan. It is encouraging to
note that TFR’s commitment to ensuring that the
Project succeeded can be demonstrated by the
fact that no less than ten senior TFR executives,
including their Chief Operations Officer, attended
the meeting. The Committee fully supported TFR’s
plan and over the following months the plan, which
amongst other things involved TFR improving
service levels, signing off on new (and much lower
tariffs) and holding discussions with cargo owners
to get their buy-in through increased timber commitments,
was rolled out.
The potential impact that this Project can have is
significant. According to a survey undertaken by
FSA in 2011 to determine the potential tonnage
that could be railed on the Pietermaritzburg Cluster
of branch lines, should conditions be conducive to
doing so (i.e. competitive tariffs and good service),
the current annual tonnage railed of 118 000 tons
could be increased ten-fold or by a staggering
1 229 000 tons to 1 347 000 tons. This potentially
will save the equivalent of 32 000 truck trips on
KwaZulu-Natal’s road network which would have
positive spin-offs in terms of reduced road damage
and increased road safety. In another positive development,
the KwaZulu-Natal Department of
Transport has even indicated that it may consider
subsidising the cost of running the Pietermaritzburg
Cluster of branch lines as a trade-off against
lower road damage repair costs.
This is indeed an incredibly positive development
and it is in everyone’s interest that this Project
succeeds. As well as having benefits related to road
damage and safety issues, a vibrant branch line
network can also be a catalyst for rural economic
development. From the Forestry Industry’s perspective,
it achieves what we want in terms of
competitive tariffs and increased levels of service
without the need to incur the operational cost and
responsibilities of becoming concessionaires and
from its perspective, TFR gets additional cargo.
This indeed marks a turning point in the relationship
between TFR and the Industry and
FSA would like to extend its sincere thanks to all
those involved from TFR’s Executive Team and
the Industry’s side in bringing this about.
Forestry Transport Infrastructure
Requirement Plan
This Plan was commissioned by DAFF as part
of its Charter commitments in 2011, its objective
being to assess the current status of, and future
requirements for transport infrastructure across
the entire South African forest sector value chain.
During the course of its development, the FSA
Transport Committee gave extensive input into
the Plan which made comprehensive recommendations
at Municipal, Provincial and National
level and which was published in August 2012.
The intention is to incorporate this forestry
focused plan into the Department of Transport’s
“National Transport Master Plan 2050”.
Road Matters
Amendments to National Road Traffic
Regulations
These Amendments, Gazetted in June 2012 for
public comment, were so potentially damaging
not only to the Forestry Industry but aIso the Agricultural
Industry, that FSA convened an urgent
meeting shortly thereafter to which Industry
experts as well as Ms Alta Swanapoel, an
attorney who had been involved in the drafting
of the amendments, were invited to formulate an
Industry submission. In essence, the amendments
were regarded as being totally unsuited for local
operational conditions, would be difficult if not
in certain instances, impossible to implement
and would consequently have significant cost
and compliance implications for Industry. Major
problem areas related to regulations pertaining
to joint consignee/consignor liability for infringements,
driving licence requirements for haulage
tractor drivers and the insuring and weighing of
loads. FSA subsequently and in co-operation with
the Sugar Industry, drafted a detailed submission
highlighting the Industry’s concerns and making
proposals as to how the proposed amendments
could be altered to address these concerns.

On receipt of this and submissions from other
interested and affected parties, the Department
of Transport subsequently made some changes
to the amendments which, disappointingly, only
addressed in full or part a few of our concerns
and ignored most. After a request by FSA and
on its behalf, the offices of the KwaZulu-Natal
DoT kindly facilitated direct interaction with the
National Department which allowed FSA an opportunity
to make another submission on the
amended regulations and, in early 2013, hold a
meeting with the officials responsible for their publication.
At the time of writing it can be reported
that discussions are still ongoing and progress
is being made towards addressing our concerns
although we will only know for certain once the
final Amendments are Gazetted. FSA would like
to thank the National DoT for their willingness to
take our concerns seriously and particularly Mr
Chris Stretch of the KwaZulu-Natal DoT and Mr
Peter Lyne of the Cane Growers Association for
their full support and co-operation.
N2 Toll Road
It was reported in last year’s Report that
despite the Minister of Water and Environment
Affairs having given SANRAL the go-ahead to
commence construction of this road in July 2011,
this was put on hold following an application
being lodged in February 2012 with the North
Gauteng High Court by three large employers
located in the Durban basin whose businesses
and workforces would have been adversely
affected by such a development. It is not known
at what stage this application has reached but
the upshot is that neither road construction nor
tolling has commenced.
The Project is one of 18 “Strategic Investment
Projects” identified by Government and although
they appear to recognise the sensitivity surrounding
the tolling of this particular road (as it
is not based on a pure “user pays” basis), it is
likely that once the e-tolling fiasco in Gauteng
has been resolved, they will be keen to proceed
with the Project. FSA will continue to lobby the
authorities in opposition to the tolling of this road
as this will not only adversely affect the transport
costs of its members but in principle, the tolling
of one section of existing road to fund the construction
of a new section hundreds of kilometres
away is deemed to be grossly unfair.
Administrative Adjudication of Road
Traffic Offences (AARTO)
After experiencing numerous problems with three
pilot projects set up to test the functionality of the
system, the Department of Transport nevertheless
intended to implement the full amendments
countrywide in April 2012 – this after several
previous postponements. Although FSA regards
the principle behind the system of making tariff
offences an administrative rather than a criminal
procedure commendable, it firmly believes that
the practicalities of implementing the “points
demerit system” will be far too complicated given
local circumstances. It is therefore pleasing to
note that the system, which would have serious
implications for members, has still not been implemented.
Other Road Transport Issues
• Labour Carrier Specifications: The FSA
Transport Committee convened a small
group of Industry experts in mid-2012 to
try and resolve outstanding problems
regarding the use of labour carriers, such
as the cost of licensing these vehicles (as
busses) and licencing requirements in
terms of limited passenger numbers. The
process culminated in a meeting held in
October 2012 at which the experts recommended
that given the concessions
that had already been obtained from the
National Regulator for Compulsory Specifications
(NCRS), it was not necessary for
the FSA Transport Committee to take the
matter up further with the NCRS.
• VAT on Double Cabs: Following a request
by members for FSA to look into the possibility
of getting double cab bakkies used
exclusively in forestry operations exempt
from VAT, FSA had received expert tax
advice which clearly stated that this was
specifically prohibited in the current tax
legislation and that a legal challenge had
already been lost on this specific matter,
thereby setting a precedent.
27

Port Matters
It is pleasing to report that following submissions
made by FSA and other cargo owners, the Ports
Regulator of SA cut the tariff increase of 18.09%
initially requested by the National Ports Authority
(NPA) to a far more modest increase of 2.76% in
March 2012, thereby saving the Industry many
millions of Rands during the period under review.
Later in 2012, the NPA, proposed that instead
of using their “normal” tariff determination methodology
(which would result in a requested tariff
increase of 14.2% for the 2013/14 year), the tariff
be based on (a) a capped revenue requirement
and (b) a multi-year tariff determination. This
would result in the following:
◊ 2013/14 – 5.4% average tariff increase
(individual tariff increases would,
however, vary)
◊ 5 year period from 2014/15 to 2018/19
– CPI +3%
In a surprising (although welcome) decision, the
Ports Regulator rejected this proposal outright
and left the 2013/14 tariffs unchanged, thereby
saving the Industry many Millions of Rands for
the third year in a row. Of greater importance,
however, is that following the publication of a
Report the Regulator had commissioned into
global port pricing, which found that South African
ports are some of the most expensive in the world,
it has commenced a process to investigate the
methodology used by the NPA to determine its tariff
requests. FSA has long held that this methodology,
which is based on a revenue requirement model
which provides for, amongst other things, capex,
tax and even profit, is totally flawed and one of the
main reasons why port charges are so high. This
investigation is thus to be welcomed and it is hoped
that the outcome will result in significantly reduced
port costs.
EDUCATION AND TRAINING
FSA’s direct involvement in Industry education and
training continued during the year under review
through the provision of financial support to both the
University of Stellenbosch and the Nelson Mandela
Metropolitan University (Saasveld) and through its
participation in their structures and those of the
Fibre Processing and Manufacturing SETA (FP&M
SETA). A brief summary of these activities appears
below.
Tertiary Educational Institutions:
Stellenbosch and NMMU
(Saasveld) Universities
FSA continues to support both Institutions not only
through the funding of bursaries, travel funds and
funds to assist students to attend the International
Forestry Students Symposium which is held
in a different country every year but also being
an active participant in their respective Advisory
Boards through representation by the Operations
Director. In terms of direct funding, approved
funding in 2012 to Stellenbosch amounted to
R130 000 – R120 000 for bursaries and R10 000
for the IFSS, whereas Saasveld was granted
R35 000 – R25 000 for travel funds and R10 000
for the IFSS. In addition to these amounts, through
funding from the Medium Growers Group, five
bursaries of R10 000 each were awarded to four
students attending Saasveld and one Stellenbosch.
Indirect funding received by both Institutions
from the FP&M SETA was for both projects
and bursaries. In terms of the latter, the SETA
awarded a total of 35 bursaries of R35 000 each
in 2012 to students undertaking forestry related
courses – a total of R1 225 000. Of these, no less
than 29 were for students studying at Saasveld,
2 at Stellenbosch and 4 at Venda.
In order to remain relevant and to provide the
Industry with the graduates and diplomates
that have the necessary expertise required
by the Industry, both Institutions are continually
updating their curricula and qualifications
offered and this was no exception during the
period under review. Stellenbosch University
for example has asked Industry to facilitate the
up-scaling of the experiential (practical) training
that their students are exposed to and starting in
January 2013, has begun offering a new qualification
- a one year post graduate diploma in
Forestry and Wood Science. Major changes are
underway at Saasveld following the move of the
School of Natural Resources (in which Saasveld
is a component) to the Faculty of Science at
NMMU. In May 2012 the new Dean of the Faculty
of Science, Prof Andrew Leitch, gave the FSA
Executive Committee a comprehensive report on
the changes that were to be made.

Although space does not permit a detailed report
on them here, they involve a complete overhaul
of the existing programmes and courses offered
at Saasveld. It is also encouraging to note that
the popularity of the courses offered at both Institutions
remains high – so much so in fact that
in the case of Saasveld, they had to limit 1st year
student intake in 2012 to 70.
These developments are most encouraging and
FSA would like to thank all those staff at both
Institutions involved for their efforts in ensuring
that the standard of forestry education offered is
of the highest standard and relevant to Industry
needs. FSA would like to congratulate Prof Leitch
on his new appointment as Dean of the Faculty
of Science at NMMU and offer our special thanks
to Professor Thomas Seifert, Chairman of the
Department of Forest and Wood Science at Stellenbosch
University and Dr Jos Louw, Director of
the School of Natural Resource Management at
Saasveld, for a job well done.
Other Tertiary Education
Institutions Offering Forestry
Courses
uMgungundlovu FET College
It was reported in last year’s Annual Report that
the process of developing an NQF level 4 qualification
in “General Forestry”, under the auspices
and direction of the uMgungundlovu FET College,
had been put on hold following the FSA Task
Team’s rejection of the draft course content and
their insistence that it be totally rewritten by the
service provider contracted by the FET College
to do the work. A year later this has still not been
done. Although this qualification, the development
of which had been paid for by the erstwhile
FIETA, would have been an excellent “bridging
course” for those wanting to attend Saasveld,
the Task Team was not prepared to compromise
standards. It is regrettable therefore to report that
the project has been terminated.
Fort Cox
In November 2012 the new forestry programme
offered at Fort Cox College was accredited by
the Council on Higher Education and was now
undergoing the process of having the qualification
registered with the South African Qualification
Authority. Prior to the course being accredited,
both Stellenbosch University and Saasveld
had assisted Fort Cox in developing the course
curriculum and for this they must be thanked.
This is viewed as a positive development as the
diplomates produced will fill a niche market.
Fibre Processing and
Manufacturing Sector Education
and Training Authority
(FP&M SETA)
In an effort to help ensure that the SETA serves
the best interests of the Industry in terms of its
education and training needs, FSA staff, through
the Operations Director, and several committed
FSA and SAFCA members devoted a considerable
amount of time and effort to SETA related
business during the year. This is not only through
Industry’s representation on the Board and Audit,
Governance and Strategy and Quality Assurance
Committees but also being actively involved in
providing input into a whole host of other initiatives.
The FP&M SETA is now in its second year of
existence having been formally constituted under
a new Constitution in September 2011. The amalgamation
process is now behind it and, despite
now having 13 sub-sectors to service which has
brought its own challenges, the work of the SETA
has begun in earnest. Space does not permit a
full report on progress during the year but the
following major items deserve mention.
Internal Issues
SETA Performance for the 2011/12 Year: This
was reported on at the well-attended SETA AGM
held in September 2012. On the financial side,
the SETA performed well and it is pleasing to
note that they received an unqualified audit from
the Auditor General. Performance, as measured
against National Skills Development Strategy III
targets set for the SETA, was not as impressive,
although in FSA’s view this has a lot to do with
over-optimistic targets being set given the characteristics
of the sub-sectors covered by the
SETA.
29

Appointment of New CEO: Following the
refusal of the Minister to ratify the appointment
of the CEO that the Board had chosen as their
preferred candidate, the selection process was
restarted. In terms of new procedures initiated by
the Minister, he was sent a list of three candidates
in December 2012 from which to make a final
choice. FSA regards this situation as being far
from ideal. However, following the Minister’s
decision, the successful candidate, Ms Felleng
Yende, was appointed and will commence duties
on 1st May 2013. FSA wishes her well in her new
position.
Management Information System (MIS): Due
to problems being experienced with the current
MIS inherited from the erstwhile MAPPP SETA,
a tender was issued for this service and after
due process, another provider won it. Because
the incumbent service provider objected to the
process followed, and following advice received,
the tender was scrapped and the process begun
from scratch. Legal wranglings are unfortunately
still holding up the process of re-awarding
the tender. Having an effective MIS is crucial in
enabling the SETA to perform its functions and it
is hoped that this issue can be resolved as soon
as possible.
Strategic Planning Session: A two day strategic
planning session was held in late August to give
direction to the merged SETA.
Operational Issues
New Grant Regulations: New grant regulations
were Gazetted on 3rd December 2012 and will
become effective 1st April 2013. These contain
radical changes which will not only change the
operational processes and procedures of SETAs
but will affect the criteria by which employers
can receive mandatory or discretionary training
grants. Two of the more important changes to
note are that employers’ mandatory grant entitlements
will fall from 50% to 20% and SETAs
must now allocate 80% of available discretionary
funds to vocational training programmes
(i.e. apprenticeships, learnerships and internships),
FET Colleges being the preferred
service providers. From an employer’s perspective
this will obviously significantly reduce the
training grants they previously received through
mandatory grants. From an Industry perspective,
the refocusing of resources towards vocational
training could well limit the training funds flowing
from the SETA to the Industry as it currently has
no apprenticeship schemes in place and only
four learnership programmes. The publication of
these new regulations, without consultation with
affected parties (including SETAs themselves) is
a worrying trend.
Conversion of Qualifications onto QCTO
System: In another unilateral decision, the DHET
decreed that all current qualifications would have
to be “converted” from the current unit standard
based system into a new Quality Council for Trades
and Occupations (QCTO) format. Given the fact
that the current system was well understood and
had served its purpose perfectly well over the
past decade, the Industry views this development
as being a waste of time and money. Nevertheless,
FSA and SAFCA staff and members
gladly assisted the SETA with developing a list
of “Organising Framework Occupational” (OFO)
Codes applicable to the Forestry Industry which
the QCTO system required and prioritised those
qualifications serving the Industry that needed
to be converted as a matter of urgency. The top
three identified were Forestry Team Leader,
Production/Operations Supervisor (Forestry)
and Fire Specialist. Although putting enormous
pressure on the FP&M SETA’s finances, it would
fund this work.
Sector Skills Plans: FSA and SAFCA together with
certain of their members gave significant input during
the year into the stakeholder interaction processes
facilitated by the SETA to develop and refine the
SETA’s Sector Skills Plans for both 2012/13 and
2013/14 as it related to the Forestry Industry.

Stakeholder Information Sessions: A decision
was taken not to establish formal “Chambers”
per se (mainly due to financial considerations)
but to hold “Stakeholder Information Meetings”
twice yearly in the various regions instead. The
meetings, which give stakeholders an opportunity
to hear about SETA developments and to air
their own views, have proved successful.
Despite the challenges being faced, as highlighted
above, the FP&M SETA is nonetheless
making good progress and for this FSA must
extend its gratitude for the continual work done
by the Industry representatives involved as well
as to all the staff of the SETA and its Chairperson,
Mr Sipho Ngidi, for his leadership and guidance.
A special word of thanks must go to the Acting
CEO, Mr Bekhi Zulu, who, under difficult circumstances,
played an important role in managing
the amalgamation process. We wish him well in
his future endeavours.
INDUSTRY PROMOTION
The Wood Foundation
FSA fully supports the objectives of the Wood
Foundation and remains an active participant on
its Executive Committee along with other Associations
which cover the entire forestry value chain
from growing trees to constructing timber frame
buildings and producing paper. Unfortunately,
however, since inception the Foundation’s effectiveness
in fulfilling its objectives of promoting
the growing of trees and the use of wood in its
broader sense has been severely limited by the
lack of financial resources. This resulted in the
termination of the services of the advertising
agency who were assisting the Foundation in its
work and the scaling back or scrapping of certain
projects altogether during 2012. It has also meant
that it has not been possible for the Foundation
to hire a full-time person to actively drive the
Foundation’s work forward. On a positive note,
this latter issue was partially addressed during
the year with the hiring of Mr Keith Rudd, a
retired timber frame builder, as the Foundation’s
“Interim Executive Office”. We were not only lucky
to have the services of Mr Rudd at our disposal
for 6 months but also for the fact that his small
monthly honorarium was fully sponsored by one
of the Foundation’s members.
The more important aspects of the Wood Foundation’s
work during the period under review are
highlighted below:
• Annual General Meeting: At its AGM
held in August 2012, Mr Roy Southey, the
Executive Director of Sawmilling South
Africa, was re-elected as the Wood Foundation’s
Chairperson for the second of his
2 year term of office. FSA continues to
be represented on the body’s Executive
Committee through its Operations Director.
• Fund Raising: The possibility of getting
much needed funding from DAFF, who, in
terms of their Charter commitments, are
obliged to assist with “Industry promotion”,
was again lobbied for but to no avail.
Although not yet finalised, a funding
mechanism proposed jointly by Sawmilling
South Africa and the Institute for Timber
Construction, both Foundation members,
holds great promise and if agreed to
would change the financial position of the
Foundation irrevocably.
• Technical Task Team: This was created
to deal specifically, if and when necessary,
with technical queries received which
needed expert input. The Team consists of
experts in the various sectors covered by
the Wood Foundation. Dr Dave Everard is
the forestry expert on the panel.
• Woodex for Africa Exhibition and
Conference: FSA, along with other
Foundation members, participated in
the inaugural exhibition held in March
2012 under the auspices of the Wood
Foundation. The exhibition stand was
given free of charge and generated quite
a lot of interest amongst the public. The
Foundation also participated in the second
Exhibition which was held in March 2013.
31

Other Promotional Activities
• Primary School Forestry Curriculum
Project: It is pleasing to be able to report
that this Project, which is being driven
by the “Paper Recycling Association of
SA” (PRASA) and to which FSA made a
R40 000 financial contribution, is progressing
extremely well with all the necessary
teaching aids and learning material having
been produced and curriculum advisors
trained by the time the Project was launched
in August 2012. Workshops subsequently
began at which the curriculum advisors
began teaching the teachers involved. In
an exciting development, the “forestry”
scope of the Project will be expanded in
2013 to include “the paper story” and if,
as appears, this pilot Project in Gauteng
is a success, it will be expanded to cover
primary schools in KwaZulu-Natal, the
Western Cape and, if sufficient funding
can be found, Mpumalanga.
• Media Interaction: As the official spokesperson
of the Association, the Executive
Director had numerous interactions with
the media during the year, whether it was
answering queries, providing information,
conducting interviews or writing articles.
Although by no means an exhaustive
list, the more important of these are
summarised below:
◊ wrote a hard hitting and critical article in
DAFF’s internal VUNA magazine (circulation
30 000) centred on the challenges
facing the Industry;
◊ built up a solid relationship with Farmers’
Weekly and gave input into a number of
articles on a variety of issues appearing
in the publication; and
◊ wrote an article published in SA
Forestry in response to a disparaging
article written by a contributor regarding
Industry’s labour practices.
• Annual Abstract of Forestry Facts:
Following the debacle that occurred in
2011 (as reported on in last year’s Annual
Report), whereby DAFF failed in its legal
obligation to produce any annual census
data on the Industry, thankfully it can
be reported that in late 2012, census
figures for both 2009/10 and 2010/11
were eventually published simultaneously.
Given the importance of these figures it
was not surprising that during the past
year FSA was literally inundated with
requests and complaints regarding the
non-availability of the figures. DAFF could
easily have avoided this situation and it
is sincerely hoped that this embarrassing
episode is not repeated again as it not
only tarnishes the image and reputation of
the Department but also that of FSA (who
can only produce the Abstract pamphlets
once it has received the census date from
DAFF). On a positive note, the 2010/11
Abstract of Forestry Facts pamphlet was
published by FSA in January 2013 and
has, as ever, proved to be an excellent
promotional tool. DAFF must be thanked
for once again sponsoring the costs of
production.
◊ wrote a similar article written for
Business Day;

APPRECIATION
2012 presented the third successive difficult trading year for our members and this trend
may continue for some time. We would therefore like to thank each and every one of our
members for both their financial support and for the human resources they provide. With so
many structures and processes in which FSA must engage, it would simply be impossible
to serve the Industry without this support, without incurring much greater costs through the
employment of a much larger staff complement, as seen in some other Industry Associations.
The small staff component in FSA also means that we depend greatly on our implementation
partners. Our sincere thanks thus go to the ICFR, FABI, SANBI, ASGISA, the Wood
Foundation, other Industry Associations, tertiary education institutions, the FP&M SETA and
partners in Government for the extraordinary support they provide to the Industry.
In addition to the contributions from our members, we are also very fortunate to be able to
leverage additional funding for the work of the Association, especially for support to our small
growers. FSA would like to express its sincere appreciation for this to the FAO, IIED, SANBI
and the FP&M SETA.
FSA must also appreciate the enormous effort of its own small but dedicated team of staff
members and consultants.
Lastly, we would like to offer our sincere thanks to our Chairperson, Mr Silas Cele and Vice-
Chair, Ms Viv McMenamin for their leadership of the Association during this past year.
MICHAEL PETER
EXECUTIVE DIRECTOR
FORESTRY SOUTH AFRICA
APRIL 2013
33

FSA FINANCES
FSA TIMBER SALES TONNAGE
IN 2012
Although FSA derives income from a number of
sources such as direct funding contributions from
donors (Sanbi, IIED and DAFF), rental income
and interest earnings, by far the most important
is that related to members’ contributions – in 2012
R20.8 million or 72% of total income. These contributions
are based on a levy being applied to
each ton of timber sold. Although every effort is
made to ensure that the total sales tonnage figure
for the year, upon which the funding budget is
based (15.7mt in 2012), is likely to be achieved,
they can and often do deviate from budget which
has a direct knock-on effect on the Association’s
income. 2012 was no exception. After a promising
start to the year, with exceptional and increasing
sales being recorded in January to March, sales
slowed down from the 2nd quarter onwards,
highlighting the fact that trading conditions began
to deteriorate during the year. By year end the
following can be noted:
• The total sales tonnage recorded of 14.8
mt was down a significant 865 000 tons
(-5.5%) on the budgeted tonnage of 15.7
mt and even 489 000 tons (-3.2%) down
on 2011.
• The impact of these depressed sales
tonnages resulted in a deficit on income
of R1 837 000 (-8.1%) on the budgeted
amount of R22 608 000.
• When comparing the sales tonnages per
product in 2012 to that of the previous year,
the following table highlights these.
Timber Sales Analysis - 2012 vs. 2011
Product
Sales
2011
Sales
2012
Change
(tons)
Change
(percent)
Sawlogs 3 548 214 3 916 110 367 896 10.4%
Pulpwood 11 106 979 10 242 536 -864 443 -7.8%
Poles 308 912 307 417 -8 730 -0.5%
Mining Timber 191 348 209 194 17 846 9.3%
Other 168 800 159 470 -9 330 -5.5%
Total 15 324 253 14 834 728 -489 524 -3.2%
The underbudgeted sales tonnage recorded in 2012 obviously had a significant impact on FSA’s
financial position and implications for the 2013 Budget. It is sincerely hoped that sales tonnages in
2013 do not fall below the already low 14.4mt set as a budget.
FSA FINANCES 2012
Due to space and cost considerations, the Audited Financial Statements for the year ended 31st
December 2012 have not been printed within the body of this Report but are available on the Association’s
website (www.forestry.co.za) and in hard copy form on request. In brief, some of the more
important points that deserve mention are listed below.

Income
Total income during 2012 rose by almost R2.8m
to R29 082 090 - 10.5% more than the R26
327 067 recorded in 2011. Operating income,
however, actually dropped by 1.1% to R20 774
642. This was over R1.8m or 8.1% below the
budgeted figure of R22 608 000 and is directly
attributable to considerably worse than expected
timber sales volumes.
This drop in operating income was, however,
more than off-set by a R3.0m or 59% increase in
other income to R8 147 518, the main contributing
factor being the receipt of an additional DAFF
funding payment for the Sirex.
Expenditure
Total combined expenditure (operational and
Industry) for 2012 of R27 463 070 was virtually
identical to the R27 463 002 recorded in 2011.
This situation came about as a result of the
increase in Industry expenditure of R135 742 or
0.6% to R21 604 519 being almost entirely off-set
by a commensurate decrease in the FSA operational
budget of R135 674 or 2.3% to R5 822 551.
In terms of budget comparisons, combined
actual expenditure was some R828 034 or 2.9%
less than that budgeted for – FSA operational expenditure
being R118 767 or 2.1% over budget
and Industry expenditure being R946 801 or
4.2% less than budget.
Income Statement
A profit of R1 610 299 was made in 2012
compared with a loss of R1 144 559 in 2011. This
apparent change in fortune can be entirely attributable
to additional DAFF funding for the Sirex
Control Programme being received during the
year and recorded as “other income”.
Balance Sheet
Although on the face of it, FSA’s cash position at
year end looked good, with cash reserves having
increased from R3 351 170 at the beginning of
the year to R5 162 534 by year end, this masked
the fact that virtually all these reserves were “ring
fenced” and thus not available to FSA per se.
Although a significant amount of these reserves
was earmarked for use by the Medium Growers
Group, the bulk represented DAFF Sirex Control
Programme income that was ring fenced and
which needed to be paid over to both the ICFR
and FABI.
The significant under budgeted timber sales
tonnages recorded in 2012 exacerbated the
situation and by year end the reserves available
for the Association’s own use were virtually
exhausted. This eventuality had been anticipated
by the FSA Executive Committee during
the process of drafting the 2013 budget and a
provision of R1.2m was built into the budget to
assist in boosting the Association’s reserves.
FSA would like to express its sincere appreciation
to all members for their continued support of
FSA during this past year, especially given the
continued difficult rading conditions experienced.
FSA BUDGETS AND FUNDING
FOR 2013
As mentioned at the beginning of this Report,
timber sales upon which the Association levies
its members, showed a sharp decline in 2012.
Given this and the fact that the outlook for
trading conditions for 2013 looked lacklustre,
FSA’s Management drafted a below inflation
budget which, after making a few adjustments,
was approved by the FSA Executive Committee
at its meeting held on 22nd November 2012. In
summary, the main points to note are as follows:
• FSA’s Operational Budget: Was
increased by 4.6% to R5 964 598.
• Industry Activity Budget: Was increased
by 4.9% to R23 680 743.
• Overall Combined Budget: The overall
budget was thus increased by R1 354 237
(or by 4.8%) to R29 645 341.
• Budget Funding Tonnage Base: Given
the sales estimates supplied to FSA by
members in October 2012 for the 2013
calendar, a figure of 14.4mt was approved
for use as the base for the 2013 Budget
– 1.3mt lower than the 15.7mt used the
previous year and 400 000 tons lower than
35

that actually achieved in 2012.
• Replenishment of FSA’s Reserves: Due
to previous shortfalls in sales tonnages
(and thus income) not being addressed in
prior years, added to a 865 000 ton deficit
in 2012, FSA’s reserves had been all but
exhausted by the end of 2012. To replenish
these reserves the Executive Committee
agreed to make an “income recovery”
provision in the 2013 budget of R1.2m -
this to be funded through the proceeds of
the sale of the TIMS training centre.
• Extraordinary Contribution to the ICFR:
Given the low budget funding tonnage
base of 14.4mt, the Executive Committee
agreed to “soften” the impact of the
required levy increase by using another
R1.2m of the proceeds of the sale of the
TIMS training centre to, in effect, subsidise
FSA’s 2013 contribution to the ICFR’s core
funding.
• 2013 Levy: Taking into account the above
as well as attributable income of R5.6m,
the levies were set at 159 cents / ton for
those making a contribution to the ICFR
and 83 cents / ton who did not.
A summary of these budgets is shown in the
Table below.
FSA Operational and Industry Budget: 2013
Allocation Approved 2012 Approved 2013 R
Change
%
Change
(1): FSA Operations 5 703 784 5 964 598 260 814 4.6%
(2): Industry support
Forestry Research 11 654 847 12 753 096 1 098 249 9.4% (1)
Forest Protection 7 237 245 7 687 119 449 874 6.2%
Environment &
1 058 200 895 000 163 200 -15.4%(2)
Water
Charter Council 545 028 545 028 0 0.0%
Education 170 000 165 000 -5 000 -2.9%
Promotion 80 000 50 000 -30 000 -37.5%
Grasslands
1 600 000 1 269 000 -331 000 -20.7%(3)
Programme
IIED Project 242 000 316 500 74 500 30.8%(4)
Industry total 22 587 320 23 680 743 1 093 423 4.8%
TOTAL 28 291 104 29 645 341 1 354 237 4.8%
To be noted from above:
1. Large increase due to new funding allocation of R340 000 to combat Red Gum Lerp
Psyllid.
2. Large decrease due to reallocation of some expenses and decrease in operational
expenditure.
3. Fully funded through SANBI so no direct financial implication for FSA.
4. Fully funded through overseas funding from the UK’s IIED so no direct financial implication
for FSA.