The Code applies to all organisations involved with commercial forestry and first level processing of wood products, including the following sub-sectors:

• Growers – plantations, nurseries, and indigenous forests;
• Contracting – forestry contractors in silviculture, harvesting, fire-fighting services, and other forestry contracting services not covered in their own Sector Codes;
• Fibre – pulp, paper, paperboard, timber board products, woodchip and wattle bark manufacturers;
• Sawmilling – industrial, structural, and mining timber sawmills and match producers;
• Pole treatment plants; and
• Charcoal producers.

Industry Specific Contributions – an enterprise’s contribution to industry specific initiatives as identified later in the module. Such contributions are extraneous to the organisation’s regular business operations and do not form part of any legal obligation on the organisation.
Realisation Points for Net Equity Interest – as defined in Code 100 (Ownership), provided that for organisations in the grower sub-sector the graduation factor of compliance target is based on full payment in equal traces over the crop rotation cycle for the timber crop grown by the organisation, by applying the following formula:

C = N / R x 100
C is the graduation factor;
N is the year after the effective date being measured;
R is the crop rotation period in years.

The scorecard applies to all enterprises in the Forest Sector, subject to the following exemptions and qualifications:

• If the organisation operates in more than one sector, it must report on all activities in terms of the scorecard for the sector in which a majority of its core activities are located.
• Forest enterprises that are deemed to be Exempt Micro Enterprises qualify for BEE exemption, provided they meet the requirements for non-circumvention as outlined in Statement 001 of the Codes. These have an automatic level four status. Although they are exempted from the scorecard requirements, they must comply with the Industry Codes of Conduct provided for under this Code and are also encouraged to support transformation. When enterprises submit proof of their EME status, they shall sign a commitment of compliance with the Industry Codes of Conduct. Failure to do so or to comply with Industry Codes of Conduct will result in a downgrading of their BEE recognition level.
• Organisations receive points on the employment equity element only if they are in compliance with the Industry Codes of Conduct for employment practices.

*Compliance target for Net value for growers is based on full payment in equal trances over the crop rotation cycle, and not the ten-year repayment period that applies to the rest of the sector.

Restructuring of State Forest Assets:

• Government will ensure that the transaction structure in the sale of Komati Land Forests will facilitate and encourage economic empowerment, taking into account the surrounding communities.
• Government undertakes to restructure the remaining state forest plantations still under jurisdiction of the Department of Water Affairs and Forestry in accordance with the pro-poor development agenda of the government, and ensure that opportunities are opened to the broad-based black group this Code seeks to empower.
• A plan for the restructuring will be operational within one yeas of the signing of the Code.

The industry is working from a low base in all employment categories other than in the skilled technical, junior management and supervisory levels.
An effort will be made by all role players in promoting the image of the Forest Sector, succession planning, implementing skills development programmes and recruiting suitable management staff, which are necessary to achieve these targets.
Forest sector enterprises will report to the Charter Council on interventions undertaken to improve working conditions in the Sector. Industry Codes of Conduct will be established for these purposes and are discussed below.

The SD Scorecard




Industry is committed to ensuring that the above targets are achieved within 3 years. This will ensure an early foundation is laid for reaching the management and employment equity targets.

Meeting the targets requires concerted and coordinated effort from different role players in government, statutory bodies, industry and labour. This will include steps to ensure the effective utilisation of available skills development and training resources.

Thus, government, industry and labour, through FIETA, jointly undertake to develop and implement a SSP for the sector that:

• Includes targets and timelines to:

            Strengthen the national framework for skills development;
            Strengthen sector capacity for skills development delivery;
            Promote skills development opportunities for youth, women and new entrants in the sector; and
            Empower beneficiaries of the land reform process to sustainable develop and manage forest enterprises.

• Is based on a clearly defined transformation and growth strategy.

• Presents programmes and mechanisms through which enterprises can spend the additional skills spend provided for.
• Identify specific skills development projects for which business plans will be developed and submitted to the NSF for funding.

Enterprises will report to the Charter Council on interventions undertaken to improve contracting conditions for suppliers as it relates to the:

• Forestry contractors industry;
• Charcoal industry; and
• Small growers contracting schemes.

Covers the following elements:

• Codes for forestry contracting: to control and direct the relationship between contracting companies and contractors, and between contractors and sub-contractors. The Codes will provide for larger and longer-term contracts enabling contractors to improve margins and invest in their business and staff. It will also provide for transparent and accessible tendering systems and fair pricing that will support good governance and fair labour practices.
• Codes for emerging forest grower schemes: this will control and direct contracts with emerging growers and company affiliated schemes. The Codes will ensure transparency in the costing of support services and market related pricing arrangements for timber that will support sustainable business practices, good governance and fair labour practices.

The ED Scorecard

The Code provides 3 bonus points for additional enterprise development spend to support sector specific initiatives in enterprise development.
Shortages in log and sawtimber supplies enable forest enterprises to leverage B-BBEE through the sale of these products to BEE enterprises. Thus, points have been re-allocated to support the sale of logs and sawtimber to BEE compliant and black owned enterprises.

The SED Scorecard

Socio economic development initiatives include the provision of services and amenities to the rural poor, such as housing provision for workers and their families, support to health and HIV/AIDS programmes etc.

The industry commits to apply enterprise and social development spend in a way that strengthens the positive role of the sector in contributing to economic growth and employment creation and in supporting rural and local development.
Bonus points are provided as incentives to increase spend on sector specific enterprise and social development initiatives by an additional 0.75% of NPAT.
This is applied as follows:
- To support, encourage and nurture emerging black enterprises that will contribute to:

• Increased timber supply, and
• Beneficiation in the forestry value chain, including non-timber forest products.

- To improve the living conditions and livelihood opportunities for the rural poor, including forest sector workers and their families, in forestry areas.