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www.siyaqhubeka.co.za
1S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
CONTENTS
EXECUTIVE SUMMARY .................................................................................................. 2
1 INTRODUCTION.................................................................................................... 61.1 BACKGROUND......................................................................................................................... 6
1.2 STRUCTURE OF THIS REPORT ............................................................................................... 6
1.3 ACKNOWLEDGEMENTS........................................................................................................... 6
2 OBJECTIVES AND APPROACH............................................................................ 72.1 OBJECTIVES............................................................................................................................. 7
2.2 APPROACH .............................................................................................................................. 7
2.3 STUDY AREA AND KEY STAKEHOLDERS................................................................................ 7
3 OVERVIEW OF THE OPERATION ......................................................................... 113.1 BASIC INFORMATION ON THE OPERATION ............................................................................ 11
3.2 EXISTING SOCIAL MANAGEMENT SYSTEMS.......................................................................... 12
3.3 EXISTING COMMUNITY SOCIAL INVESTMENT INITIATIVES .................................................... 13
3.4 COMPLIANCE WITH ANGLO AMERICAN CORPORATE POLICY REQUIREMENTS ................. 16
4 OVERVIEW OF NEIGHBOURING COMMUNITIES ............................................... 174.1 INTRODUCTION........................................................................................................................ 17
4.2 AGE AND GENDER STRUCTURE............................................................................................. 17
4.3 EDUCATION.............................................................................................................................. 18
4.4 HOUSING.................................................................................................................................. 18
4.5 ACCESS TO WATER................................................................................................................. 18
4.6 AVAILABILITY OF SANITATION INFRASTRUCTURE.................................................................. 19
4.7 AVAILABILITY OF ELECTRICITY................................................................................................ 19
4.8 ACCESS TO TELEPHONE INFRASTRUCTURE......................................................................... 19
4.9 WASTE REMOVAL SERVICES .................................................................................................. 19
4.10 HEALTH STATUS....................................................................................................................... 20
4.11 INCOME AND AFFORDABILITY ................................................................................................ 20
4.12 EMPLOYMENT PROFILE .......................................................................................................... 20
4.13 ECONOMIC SECTOR PARTICIPATION...................................................................................... 20
5 ECONOMIC BENEFITS OFFERED BY SIYAQHUBEKA........................................ 215.1 INTRODUCTION........................................................................................................................ 21
5.2 EMPLOYMENT.......................................................................................................................... 21
5.3 VALUE ADDED.......................................................................................................................... 24
6 ISSUES RAISED BY STAKEHOLDERS ................................................................. 256.1 POSITIVE ISSUES RAISED........................................................................................................ 25
6.2 NEGATIVE ISSUES RAISED ...................................................................................................... 25
7 ASSESSMENT OF ISSUES AND IMPACTS.......................................................... 27
8 MANAGEMENT RESPONSES TO ISSUES RAISED............................................. 28
9 INDICATORS AND MONITORING......................................................................... 339.1 STANDARD SEAT KEY PERFORMANCE INDICATORS............................................................. 33
10 ADDITIONAL ACTIVITIES TO BE CONDUCTED BY SIYAQHUBEKA................... 34ENQUIRIES & GLOSSARY.................................................................................................................................. 34
ANNEXURE A: ASSESSING COMPLIANCE AGAINST ANGLO POLICIES AND PRINCIPLES............................. 35
2S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
INTRODUCTION
This report presents the findings of a Socio-economic
Assessment Toolbox (SEAT) study undertaken for
SiyaQhubeka Forests (Pty) Ltd (SiyaQhubeka), a commer-
cial forestry enterprise located on the Zululand coastal
plain of KwaZulu-Natal, South Africa. The report is also
part of the formulation of a strategic community develop-
ment and social investment (SI) programme developed for
SiyaQhubeka. The SEAT process was carried out from
March 2004 to December 2004.
OVERVIEW OF THE OPERATION
SiyaQhubeka is a partnership between Mondi Business
Paper South Africa (an integrated pulp, paper and packaging
group), black empowerment entity Imbokodvo
Lemabalabala Holdings (I.L. Holdings) and government
structures. Mondi Business Paper South Africa (the majority
shareholder) forms part of Anglo Paper and Packaging, a
division of Anglo American plc, one of the world's largest
mining and natural resource groups. SiyaQhubeka was the
first black empowerment company (other than a community
trust) to acquire shares in a significant forestry enterprise in
South Africa.
SiyaQhubeka’s three plantations (St Lucia, KwaMbonambi
and Port Durnford), comprise 22,500 plantable hectares,
and stretch from Nyalazi in the north to Port Durnford in
the south. The St Lucia plantation borders largely on the
Greater St Lucia Wetland Park, a registered World
Heritage Site and one of South Africa's oldest game
reserves. Land under SiyaQhubeka plantations is currently
rented from government, through the Department of Water
Affairs and Forestry (DWAF). The three estates are planted
to gum and pine.
SiyaQhubeka has an annual turnover of R135.8 million1
(US$20.9 million). The company outsources most of its
plantation activities such as silviculture, harvesting and
transport to local enterprises. The total employment
generated by SiyaQhubeka is 1,451. This includes: 29
permanent employees; 1,263 indirect employees (through
contractors and suppliers); 27 people employed by its
community social investment (CSI) activities; and 132
induced employees. A total of 5,796 people are
dependent upon SiyaQhubeka for their livelihoods.
The company also paid a total of R1.2 million
(US$187,840) in taxes and other payments to the public
sector in 2004. SiyaQhubeka’s value added for 2004
amounted to R9,832,000 (US$1.5 million).
EXISTING SOCIAL MANAGEMENTSYSTEMS AND COMMUNITYSOCIAL INVESTMENT INITIATIVES
SiyaQhubeka has a number of key processes in place that
assist with the management of social issues relating to
their operations. These include: the establishment of a
Community Social Investment Department; the facilitation
of Community Liaison Forums with communities in the
study area; the implementation of Participatory Rural
Assessments to identify key needs; and Multiple Resource
Use (MRU) activities, which allow the plantations to be
used for a wide range of other economically and socially
beneficial purposes (e.g. bee keeping and livestock
grazing). DWAF also monitors SiyaQhubeka’s social
responsibility activities, as part of their 70-year lease
agreement with the State. SiyaQhubeka’s Forestry
Stewardship Council certification also requires a compre-
hensive approach to managing environmental and social
issues.
SiyaQhubeka has a wide range of CSI initiatives. These
range from firewood collection and brick-making initiatives,
to bee farming, vegetable gardening and school class-
room extensions. One of SiyaQhubeka’s flagship projects
is Fukamela, the objective of which is to facilitate the
growth and commercial development of small and
medium sized businesses in the forestry and wood
processing industries.
COMPLIANCE WITH ANGLO AMERICAN CORPORATEPOLICY REQUIREMENTS
SiyaQhubeka undertook a self-assessment of performance
in relation to social and economic aspects within key Anglo
policies and principles. SiyaQhubeka rated themselves as
implementing all social and economic actions required by
EXECUTIVE SUMMARY
1 Comparative values are calculated at R/US$ exchange rate of 6.5.
3S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
these policies and principles – albeit in a way that is specific
to the local context. SiyaQhubeka’s highest area of perform-
ance was against Anglo’s Management Principles, where
management scored themselves as implementing and
reviewing all actions required.
OVERVIEW OF NEIGHBOURING COMMUNITIES
For the purposes of the SEAT study, and the development
of the strategic community development and SI
programme, the study area has been identified as those
communities that fall within a 5km radius of SiyaQhubeka’s
St Lucia, KwaMbonambi and Port Durnford plantations.
Comparisons within the overall study area show that
settlements within the 5km radius of Port Durnford have a
relatively higher standard of living and that, on the whole,
those within the 5km radius of St Lucia are generally the
worst off in accessing basic services and infrastructure.
Some key characteristics of the study area are:
w The lowest levels of education are found in settle-
ments near St Lucia where nearly 40% of the
population older than 20 years of age has not
completed any form of schooling.
w A high proportion of households at both St Lucia
and KwaMbonambi are using water directly from
rivers for household purposes, while more than
80% of households in the Port Durnford area have
access to piped water.
w The vast majority of households in the study area
settlements are either reliant on pit latrines or do
not have access to any form of ablution facilities.
w In the settlements around the St Lucia site, nearly
60% of households do not have access to elec-
tricity for lighting purposes, compared to 86% of
households in Port Durnford that do have access
to electricity.
w A formalised waste removal system is largely
absent within the study area settlements.
w HIV/AIDS levels are reportedly very high within the
overall study area.
w The vast majority of households in the study area
earn less than R1,600 (US$246) per household
per month, ranging between 66% of settlements
in the Port Durnford area to 73% in the St Lucia
area.
w As many as 72% of the economically active
population in the St Lucia area is classified as
unemployed.
ISSUES RAISED BY STAKEHOLDERS
Public consultation was conducted as part of the SEAT
study and associated formulation of the strategic commu-
nity development and SI programme. A number of key
issues were identified during this process. These are
outlined below.
Positive issues
The positive issues raised relate to the aesthetic value of
the plantations and their contribution to local tourism; the
impact of aforestation on the prevention of soil erosion and
associated water pollution; the wide range of non-timber
products that benefit local communities (e.g. use of non-
saleable timber for building purposes and honey harvesting);
the role of the Community Liaison Forums in identifying and
addressing key issues and concerns; and the benefits asso-
ciated with SiyaQhubeka’s CSI activities, employment of
local residents, and development of small and medium
sized forestry operations through its Fukamela initiative.
Negative issues
The negative issues are grouped under a number of key
headings: employment, access to resources, safety
issues, and community and environmental issues.
Employment
Issues around employment relate to: (a) the employment of
non-local employees, resultant in-migration and strain on
community relations and tensions developing between resi-
dents; (b) the use of non-local and non-historically disadvan-
taged South Africans (HDSA) contractors, with concerns that
SiyaQhubeka does not offer adequate support for the local
emerging contractors; (c) increased mechanisation and
associated unemployment; and (d) dissatisfaction with
Mondi’s talent management and career development
programme, particularly around the lack of clarity regarding
who and how candidates are selected.
Access to resources
Issues around access to resources relate to: (a) livestock
owners prevented from grazing in young plantations to
prevent damage to the trees – this restriction is perceived
as depriving local residents of traditional grazing rights; (b)
as a result of land claims in the study area, local residents
are set to earn monthly rentals off the land currently leased
by SiyaQhubeka – however, delays in this process are
4S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
undermining the local benefits of the plantations and are
causing frustration among residents; and (c) there have
been problems with forest fires in the plantations, a result of
honey hunters starting fires to smoke out the bees.
Safety issues
Safety issues relate to: (a) criminal activities (including rape)
in the plantations since the trees provide cover for criminals;
(b) a fatality in 2004 as a result of the use of heavy machinery
used in the plantations; and (c) concerns about heavy trucks
that drive along local roads, associated safety concerns,
and increased noise and dust levels.
Community and environmental issues
Community and environmental issues relate to the lack of
infrastructure in the settlements within the study area, and
concerns about soil disturbance during road construction
and maintenance.
ASSESSMENT OF ISSUES AND IMPACTS
Four issues have been identified as being the most signif-
icant. These were identified based on the SEAT criteria for
significance, plus the frequency with which stakeholders
have raised the issue. These issues are:
w the need to increase the participation of local resi-
dents in the contracts awarded by SiyaQhubeka;
w the need to finalise land claims associated with
the land rented by SiyaQhubeka;
w the need to address the impact of HIV/AIDS on
the labour force; and
w the need to address the high levels of unemploy-
ment in the study area.
MANAGEMENT RESPONSES TO ISSUES RAISED
Management responses have been developed for all issues
identified during the SEAT study. Some of the most signifi-
cant of these are outlined below. A target date of December
2005 has been set for most management measures.
Employment issues
w In response to concerns regarding employment
of non-local employees and use of non-local
and non-HDSA contractors, SiyaQhubeka will
impose contractual conditions that require
contractors to employ labour only from communi-
ties adjoining the SiyaQhubeka plantations. In
addition, only contractors with a minimum of a
25% Black Economic Empowerment (BEE) part-
nership will be appointed. These BEE partners
need to be sourced from the Zululand coast area.
w Regarding increased mechanisation, a social
impact study is currently being done to evaluate
the impact of mechanisation, and to propose
suitable mitigation measures.
w SQF’s CEO will review Mondi’s talent manage-
ment programme in consultation with the transfor-
mation committee and take action accordingly.
Access to resources
w In order to ensure that grazing is compatible with
plantation activities, livestock owners will be
educated about grazing capacity and the impacts
of over-grazing, before their permits are issued. A
grazing management programme will also be
developed. This involves determining stocking
levels for areas and monitoring grazing levels to
prevent over-grazing and associated impacts.
w The SiyaQhubeka CEO will consult with govern-
ment regarding the resolution of land claims and
associated delays in rental of land currently
under plantations. DWAF and Land Commission
personnel will also communicate with local resi-
dents on this issue.
w In order to ensure the on-going, sustainable use of
non-timber products, SiyaQhubeka will imple-
ment the latest version of the Multiple Resource
Use (MRU) strategy that has been developed for
implementation across Mondi’s forestry operations
and SiyaQhubeka. In this regard, the establishment
of formal honey projects has already assisted in
decreasing the problem of forest fires started by
honey harvesters.
Safety issues
w A full-time security company has been employed
to patrol the SiyaQhubeka plantations to address
criminal activities in the plantations.
w SiyaQhubeka’s Safety, Health and Environment
(SHE) officer will monitor and enforce compliance
with safety measures to help prevent accidents
associated with forestry operations. The SHE
officer will also monitor and enforce compliance
with vehicle specifications to address the
5S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
dangers of large trucks on local roads. Timber will
not be off-loaded at the mill if there is non-compli-
ance with vehicle specifications.
Community and environment issues
w SiyaQhubeka will partner with local and provincial
government in addressing priority needs among
the local population.
w SiyaQhubeka’s Environmental Officer will monitor
and enforce compliance with road construction/
maintenance, in order to minimise any associ-
ated impacts.
w Regarding the impact of HIV/AIDS on the local
workforce, SiyaQhubeka will be offering assistance
to at least two groups of community peer educa-
tors, and will continue with the HIV/AIDS awareness
and education programme by participating in
municipal initiatives. All HIV-positive SiyaQhubeka
employees are provided with treatment. Where
government treatment is easily available, Siya-
Qhubeka is facilitating the use of these facilities.
ADDITIONAL WORK TO BE DONE
Two additional actions need to be carried out as part of the
overall SEAT study. These are: (a) completion of a detailed
monitoring plan for the issues that have been identified;
and (b) development of local key performance indicators to
help measure the success of the management measures
suggested in this report.
Qakwini Zulu Dancers perform at a Cultural Day held at their school.
6S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
1.1 BACKGROUND
This report is part of the formulation of a strategic community
development and social investment (SI) programme devel-
oped for SiyaQhubeka Forests (Pty) Ltd (SiyaQhubeka), a
commercial forestry enterprise located on the Zululand
coastal plain of KwaZulu-Natal, South Africa. SiyaQhubeka
consists of three plantations – St Lucia (formerly Nyalazi and
Dukuduku), KwaMbonambi and Port Durnford.
SiyaQhubeka is a partnership between Mondi Business
Paper South Africa (an integrated pulp, paper and pack-
aging group), black empowerment entity Imbokodvo
Lemabalabala Holdings (I.L. Holdings) and government
structures. Mondi Business Paper South Africa (the majority
shareholder) forms part of Anglo Paper and Packaging, a
division of Anglo American plc, one of the world's largest
mining and natural resource groups. Anglo Paper and
Packaging, operating under the Mondi name, is an inte-
grated paper and packaging group with operations and
interests in Europe, South Africa, Asia and the Americas.
The operations manufacture pulp, graphic papers, pack-
aging papers, board and converted packaging, as well as
solid wood products.
With Mondi Business Paper South Africa as the main
shareholder (65% ownership), SiyaQhubeka adopted
Anglo American plc’s Socio-Economic Assessment
Toolbox (SEAT) process to assist in the identification of the
main issues and impacts associated with their operation,
and to aid the collection of information required for the
development and implementation of their community
development and SI programme.
1.2 STRUCTURE OF THIS REPORT
This document reports on the results of the assessment
and is structured as follows:
w Section 2 sets out the approach and objectives of
the SEAT process, in particular identifying how the
approach was applied at SiyaQhubeka;
w Section 3 provides an overview of the operation at
SiyaQhubeka, including basic information about
the operation, their current social management
and community investment programmes;
w Section 4 provides an overview of the study area
and associated settlements;
w Section 5 provides an overview of the key
economic contributions made by SiyaQhubeka;
w Section 6 identifies and discusses the issues
raised by stakeholders during the SEAT consulta-
tion process;
w Section 7 prioritises the issues raised during
consultation;
w Section 8 provides an outline of recommended
actions and management responses;
w Section 9 lists the various indicators that were
developed from the SEAT study;
w Section 10 outlines the additional activities that
SiyaQhubeka needs to undertake in order to
complete the SEAT study; and
w Section 11 provides contact details for key
SiyaQhubeka staff, and for further information on
SEAT.
1.3 ACKNOWLEDGEMENTS
SiyaQhubeka would like to express its gratitude to the
numerous parties that were involved in the undertaking of
the SEAT study, and without whose assistance the
assessment would not have been possible. We would
particularly like to thank the management of SiyaQhubeka,
Dr Vukani Sibeko (local consultant), K2M Technologies
(Pty) Ltd, Environmental Resources Management (ERM),
and all the external stakeholders who put time aside to
share their views and concerns with us. We hope to thank
you for your time with actions on the ground.
1 INTRODUCTION
7S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
2.1 OBJECTIVES
The objectives of SiyaQhubeka’s strategic community
development and SI programme was to develop a
comprehensive and integrated delivery programme
consisting of objectives, strategies, targets and individual
projects aligned with the development initiatives of a range
of roleplayers within the study area. These objectives are
aligned with the key objectives of the SEAT process, as
outlined in Box 2.1.
2.3 STUDY AREA AND KEY STAKEHOLDERS
The SiyaQhubeka plantations stretch from Port Durnford in
the south to Nyalazi in the north, with the main office situ-
ated centrally at the Mondi Business Paper South Africa
mill in Richards Bay. SiyaQhubeka’s northern plantation
borders on the Greater St Lucia Wetland Park, a recently
proclaimed World Heritage Site. The study area consists
of two components:
w The three SiyaQhubeka estates of St Lucia,
KwaMbonambi and Port Durnford; and
w Forty-four communities and settlements that fall
within a 5km radius of each of the SiyaQhubeka
plantations (referred to as the ‘study area settle-
ments’). These settlements, by virtue of their loca-
tion relative to the SiyaQhubeka operations, could
potentially benefit from the overall community
development and SI programme.
The communities and settlements within these spheres of
influence are presented in Table 2.1, and depicted in the
map on page 10.
2 OBJECTIVES AND APPROACH
Box 2.1 SEAT objectives
• To identify the key social and economic impacts and
issues which need to be managed;
• To be a useful resource in developing a Community
Engagement Plan;
• To provide a planning tool for managing the opera-
tion’s social and economic impacts, including social
investment; and
• To gather and collate data for corporate social
reporting purposes, as well as development of indi-
cators that are relevant to local conditions.
Box 2.2 Key phases in the SiyaQhubeka SEAT process
• Phase 1: Scoping
• Phase 2: Profile operation, communities and aspects
• Phase 3: Synthesis
• Phase 4: Management strategy
• Phase 5: Implementation programme
• Phase 6: Monitoring
2.2 APPROACH
The SEAT process was carried out from March 2004 to
December 2004. The approach taken for the assessment
was in line with the five key steps outlined in the SEAT
process. However, to ensure that the requirements of
SiyaQhubeka’s strategic community development and SI
programme were also met, the resulting process consisted
of six phases. These are defined in Box 2.2.
8S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
Table 2.1 Study area settlements
Potential beneficiary settlements Potential beneficiary settlements Potential beneficiary settlements within
within 5km buffer of St Lucia site within 5km buffer of KwaMbonambi site 5km buffer of the Port Durnford site
Makhambane Ntshingimpisi Msasandla
Shikishela Nzalabantu Kwashodisa
Phondweni Emhlanzini Nyembe
Mfekayi Velabandla Port Durnford
Qakwini Mankwathini Mahunu
Dukuduku Nhlabane Ongoye
Honeydale Ezindebeni Mangezi
Nkudusi KwaMbonambi Khandisa
Ezwenelisha Mandlazini Sikhalasenkosi
Mzingazi Esikhawini J
Sokhulu Eniwe
Ndabayakhe
Uzimgwenya
Gobandlovu
Mkhobosa 1
Mkhobosa 2
Ngwenyeni
Umzingwenya
Dube
Ndinama
Amadaka
Ndleleni
Mabuyeni
Madlangala
9S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
The local and district municipalities within which the three
sites and its surrounding communities are located are
summarised in Table 2.2 below:
Box 2.3 List of stakeholders
AFFECTED PARTIES
• Neighbouring communities
• Tenant communities
• Resident workforce
• Contractors
• Employees and their families
• Non-neighbouring communities impacted by the
operation (e.g. by dust, noise, traffic and visually)
INTERESTED PARTIES
• Welfare and service organisations and groups
• Non-governmental organisations (international,
national and local)
• Community-based organisations
• Local business and associations (including
suppliers)
• Religious groups
• Indigenous groups
• Trade unions
AUTHORITIES
• National government
• Provincial government
• Municipalities
• Traditional authorities
Table 2.2 Local and District Municipalities within the study area
SiyaQhubeka Local District
Plantation Municipalities (LM) Municipalities (DM)
St Lucia Mtubatuba LM Umkhanyakude DM
Hlabisa LM
KwaMbonambi Mbonambi LM Uthungulu DM
uMhlathuze LM
Port Durnford uMhlathuze LM Uthungulu DM
Most of the study area settlements are located in areas
under the control of Traditional Authorities. It would thus
be important for the successful implementation of the
community development and SI programme to establish a
sound working relationship with the leadership of the
following Traditional Authorities:
w Mpukunyoni-Mkhwanazi Tribal Authority
w Mbonambi Tribal Authority
w Sokhulu Tribal Authority
w Mkhwanazi Tribal Authority
w Zungu-Madlebe Tribal Authority
w Dube Tribal Authority
Box 2.3 provides a list of the broad categories of stake-
holders relevant to the SiyaQhubeka operations. A detailed
list of stakeholders was compiled as part of this study.
1 0S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
3.1 BASIC INFORMATION ON THE OPERATION
In October 2001 Safcol (South African Forestry Company
Limited) privatised its KwaZulu-Natal commercial forestry
assets comprising plantations that were established by the
government as early as the 1920s. The successful bidder,
SiyaQhubeka Consortium, acquired the landholdings,
some 26,451 hectares, in an empowerment transaction
valued at R100 million (US$15,384,615)1.
Together as SiyaQhubeka Consortium, Mondi and I.L.
Holdings hold 75% of SiyaQhubeka, with Mondi holding
61.8% and I.L. Holdings 13.2%. Government, through
Safcol, the National Empowerment Fund and employees,
holds 25% of the shares. I.L. Holdings counts traditional
leaders and black businessmen among its shareholders,
and was the first black empowerment company, other
than a community trust, to acquire shares in a significant
forestry enterprise in South Africa.
Mondi will reduce its shareholding to 51% by facilitating
the acquisition of a further 10.8% equity by small-scale
black timber farmers, traditional leaders and neighbouring
communities.
SiyaQhubeka’s three plantations (St Lucia, KwaMbonambi
and Port Durnford) comprise 22,500 plantable hectares,
and stretch from Nyalazi in the north to Port Durnford in the
south. The St Lucia plantation borders largely on the Greater
St Lucia Wetland Park, a registered World Heritage Site and
one of South Africa's oldest game reserves. This represents
an extraordinary association between the forestry sector
and a high priority conservation area.
Ninety percent of the land under SiyaQhubeka plantations
is currently under land claims from four local community
groups. These claims are expected to be finalised by
March 2006. In the interim, SiyaQhubeka is renting the
land from government, through the Department of Water
Affairs and Forestry (DWAF). This rental is being paid into
a special account, and will be paid over to the landowners
once the land claims have been resolved.
SiyaQhubeka has an annual turnover of R135.8 million
(US$20.9 million), currently employs 29 permanent
employees and outsources most of its plantation activities,
such as silviculture, harvesting and transport, to local
enterprises which, in turn, collectively employ more than
1,263 people. Ten of these contractors are black
empowered and collectively employ 283 people. A total of
5,7961 people are dependent upon SiyaQhubeka for their
livelihoods.
Gum and pine are planted on the three estates, with land
use as summarised in Table 3.1 below:
3 OVERVIEW OF THE OPERATION
1 1S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
Table 3.1 Land use at SiyaQhubeka
Land use Hectares
Pine 5,854
Eucalyptus 15,870.5
Other 37.5
Open Area (non-commercial) 4,689
Total 26,451 ha
SiyaQhubeka management believes that the future of
SiyaQhubeka Forests lies in Eucalyptus pulpwood.
Coastal Zululand offers the best sites in the country (if not
the world) for the growth of Eucalyptus pulpwood and also
offers the largest market for this commodity.
SiyaQhubeka’s primary focus will therefore be eucalyptus
pulpwood plantation forestry. Its objectives are to convert
environmentally sensitive areas to conservation, and to
convert its remaining productive areas in coastal Zululand
to Eucalyptus pulpwood.
1 This is calculated as total no. employees (SiyaQhubeka pluscontractors) x average family size x average proportion of familyincome derived from SiyaQhubeka.
1 2S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
3.2 EXISTING SOCIAL MANAGEMENT SYSTEMS
SiyaQhubeka has a number of key processes in place
which assist with the management of the social issues
relating to their operations. These are described in more
detail below.
Establishment of Community Social Investment Department
A community social investment (CSI) department has been
established to ensure the considered management of
social and community issues in SiyaQhubeka’s area of
influence. This includes the development of a vision,
mission, annual objectives and associated plan, and the
appointment of three dedicated personnel, namely, one
transformation manager, one community engagement
facilitator, and one community relations officer. The
progress of this department is closely monitored by DWAF.
Community Liaison Forums
Community Liaison Forums (CLF) have been established
with most communities in the study area. These CLFs have
monthly meetings which allow for complaints and issues of
concern to be raised and feedback provided. There are six
Community Liaison Forums currently in the study area (two
in each plantation area).
NGO Steering Forum
A Non-governmental Organisation (NGO) Steering Forum
has been established in the KwaMbonambi area, in asso-
ciation with key local industries (SiyaQhubeka, Richards
Bay Minerals and Sappi), community representatives and
local government officials. The focus of this forum is to
identify key local needs that can be jointly addressed by
members of the forum.
DWAF monitoring of social responsibility
SiyaQhubeka has a 70 year lease agreement with the
government, through DWAF. As part of this rental agree-
Aerial view of SiyaQhubeka plantations.
1 3S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
ment, DWAF monitors SiyaQhubeka’s social responsibility
activities. SiyaQhubeka is required to submit a bi-annual
report which outlines their social responsibility activities,
including: a list of stakeholders and consultation activities;
minutes of meetings held; local economic development
activities initiated by SiyaQhubeka; the status of its rela-
tionship with local communities; and community benefits
derived from SiyaQhubeka, etc. An annual audit is also
carried out by DWAF.
FSC certification
SiyaQhubeka has Forestry Stewardship Council (FSC)
certification. FSC requires a comprehensive approach to
managing environmental and social issues and therefore
serves as a key driver in the management of social issues
relating to SiyaQhubeka’s operations.
Participatory rural appraisals
Participatory rural assessments have been carried out in
each of the communities within the study area. Working
with community members, SiyaQhubeka plays a role in
facilitating the identification of priority needs, identifying
local resident/s to champion the priority need/s, and to
assist in the development and implementation of associ-
ated action plans. As a facilitator, SiyaQhubeka helps by
putting local champions in touch with relevant government
departments and officials and helping the local communi-
ties establish partnerships with service providers, etc. The
Participatory Rural Appraisals will be followed up with
additional assessments to check on progress made
against identified actions.
Transformation committee
A Transformation/Equity Committee has been set up to
address transformation issues within SiyaQhubeka.
On-going risk management
SiyaQhubeka has an internal process in place for the on-
going identification and assessment of risks pertaining to
their operation. These risks are identified by a multi-disci-
plinary committee comprised of representatives from the
operation’s various departments. Management objectives
and plans are then developed to prevent and control all
known risks.
Multiple resource use
SiyaQhubeka recognises its role as custodians of the land
on which surrounding communities and other stakeholders
have legal and customary rights. It is a stated aim to ensure
that these rights are upheld safely and on a sustainable
basis. In this regard, a number of Multiple Resource Use
(MRU) activities are carried out by local residents within the
plantations. The concept behind MRU is that land being
used for one purpose (e.g. forestry) can also provide a wide
range of other economically and socially beneficial
purposes. In the case of SiyaQhubeka, these uses include:
w cattle grazing;
w firewood collection;
w use of non-saleable timber for building purposes;
and
w bee farming and honey harvesting.
These are discussed in more detail in Section 3.3.
3.3 EXISTING COMMUNITY SOCIALINVESTMENT INITIATIVES
Table 3.2 provides a list of the CSI projects currently
carried out by SiyaQhubeka. One of their flagship projects
is Fukamela, an incubator programme established by I.L.
Holdings, which fosters sustainable enterprise develop-
ment within the forestry and timber product sectors (see
Box 3.1 below for more details).
Box 3.1 Details of Fukamela
The core objective of Fukamela is to create an environ-
ment based on capacity building, which facilitates the
growth and commercial development of small and
medium sized businesses in the forestry and wood
processing industries. In line with its ethos of fostering
economic empowerment, Fukamela focuses primarily
on the development of enterprises where the equity and
operational control of the enterprise is in the hands of
historically disadvantaged South Africans (HDSAs).
Fukamela, established as a commercial company, takes
equity stakes in the small and medium enterprises
(SMEs) that it develops and supports. The programme
establishes and administers a fund that is used to
finance these small business ventures. The programme
is managed by Hahisa (Pty) Ltd, in partnership with the
SiyaQhubeka Forests team.
"Fukamela", derived from Zulu, means "to incubate or
brood, specifically referring to a chicken on a clutch of
eggs".
1 4S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
Tab
le3.
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umm
ary
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ting
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and
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en16
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1 5S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
Tab
le3.
2:S
umm
ary
of
exis
ting
com
mun
ity
soci
alin
vest
men
tac
tivi
ty(2
004)
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MM
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IPT
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Y
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rary
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ners
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cted
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r
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ngof
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omm
unity
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ager
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sary
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ents
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irlC
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ure
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ners
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girl
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ners
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kD
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rs
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nto
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ions
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GO
sto
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sly
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over
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n.2,
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ren
atK
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bo.
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053
47,0
851,
003
1 6S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
An analysis of existing CSI initiatives was carried out as
part of SiyaQhubeka’s formulation of its strategic commu-
nity development and SI programme. The analysis
revealed the following key findings.
w SiyaQhubeka management should consult more
widely with all spheres of government. As part of
developing this consultation strategy,
SiyaQhubeka should determine which authorities
to interact with and why. It is important that
SiyaQhubeka's efforts in this respect are targeted
and effective. Interaction with government should
also form a platform for leveraging funding and
support from government. Sharing information
and aligning strategies, programmes and projects
will assist in increasing the impact on the target
communities of the SiyaQhubeka CSI
programmes.
w The current CSI schemes do encourage self-
reliance. In developing future programmes,
consideration should be given to leveraging
external resources to assist in the funding of CSI
initiatives. An element of that funding should
target skills development within the project.
w Securing long-term benefits from CSI projects is
challenging. In Zululand the lack of institutional
capacity and local conditions result in project
benefits being of a short-term nature. While not
the case in all CSI projects, the absence of phys-
ical infrastructure and skills hinder project sustain-
ability. These limitations need to be addressed as
part of SiyaQhubeka’s CSI efforts. Ensuring
sustained economic benefits is also a real chal-
lenge. The Fukamela model does, however, offer
a successful approach to follow.
w A clear strategy needs to be developed with
respect to addressing community health issues
such as HIV/AIDS. Prevention, management and
cure should be considered when developing CSIs
to address the HIV/AIDS challenge.
w Budget should be allocated to assisting local resi-
dents in improving the quality of their funding
applications.
3.4 COMPLIANCE WITH ANGLOAMERICAN CORPORATEPOLICY REQUIREMENTS
The purpose of this section is to present a self-assess-
ment of SiyaQhubeka’s performance in relation to social
and economic aspects within key Anglo policies and prin-
ciples. These are the Anglo “Good Citizenship Business
Principles”, the SHE Policy, and associated
Management Principles. There are four levels at which
SiyaQhubeka could be performing. These are:
w Level A: Implications of policies have been
considered and local responses initiated.
w Level B: Action plans have been developed to
implement the required actions.
w Level C: Actions have been implemented.
w Level D: Actions have been implemented and
performance has been reviewed.
Level D is therefore the highest rating. The detailed results
of the self-assessment are provided in Annexure A. In
terms of the assessment of performance carried out by
SiyaQhubeka management, Level C was the lowest score
awarded and Level D the highest. What this means is that,
at a minimum, all social and economic requirements within
these Anglo’s policies and principles have reportedly been
implemented, albeit in a manner specific to the context
within which SiyaQhubeka is currently operating.
SiyaQhubeka’s highest area of performance was against
Anglo’s Management Principles, where management
scored Level D for all aspects listed (i.e. actions have been
implemented and performance has been reviewed).
The management principles cover areas such as: financial
commitment to the management of an operation’s social
issues; risk assessment and management; the setting of
targets and indicators; compliance with relevant legislation
and the application of international best practice; and
accurate monitoring and review.
Honey harvesters who have benefited fromSiyaQhubeka’s assistance and support.
1 7S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
4.1 INTRODUCTION
This section provides a basic overview of the socio-
economic conditions of the communities within a 5km
radius of the SiyaQhubeka operations at St Lucia,
KwaMbonambi and Port Durnford. The information
presented in this section was sourced from the Integrated
Development Plans applicable to the study area.
Comparisons within the overall study area show that
settlements within the 5km radius of Port Durnford have a
relatively higher standard of living and that, on the whole,
those within the 5km radius of St Lucia are generally worst
off in accessing basic services and infrastructure. Please
note that all numbers presented in the following tables
have been rounded to the nearest whole number.
4 OVERVIEW OF NEIGHBOURINGCOMMUNITIES
4.2 AGE AND GENDER STRUCTURE
For all settlement areas a high proportion of the population
is younger than 15 years (see Table 4.1). This proportion is
highest in the St Lucia area, where 41% of the population
falls within this category. The highest concentration of the
young economically active population between 15 and 34
years of age is concentrated in settlements around Port
Durnford (42%).
Data gathered indicates that in all three areas there are
slightly more females than males.
Table 4.1 Age Profile (2004) (%)
Settlement Areas <15 yrs 15-34 35-54 >55
KwaMbonambi 39 38 17 7
St Lucia 41 36 15 8
Port Durnford 35 42 18 6
Table 4.2 Education Profile (2004) (%)
Settlement Areas No Schooling Some Primary Completed Some Matric Higher
Primary Secondary Education
KwaMbonambi 19 24 7 31 17 3
St Lucia 40 18 6 21 12 3
Port Durnford 20 14 6 28 25 9
1 8S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
4.3 EDUCATION
The education profiles of the settlements around the three
sites differ quite substantially. The lowest levels of education
are found in settlements near St Lucia where nearly 40% of
the population older than 20 years of age has not completed
any form of schooling (see Table 4.2). Conversely, 25% of the
population around Port Durnford has completed the final
year of schooling (matric), with 9% having completed some
form of higher education (the comparative figures for St Lucia
and KwaMbonambi are 12% and 17% respectively for those
who have completed matric).
4.4 HOUSING
A relatively high proportion of houses in the settlement
areas are classified as ‘brick house on separate stand’. In
Port Durnford as many as 57% of households reside in
brick houses on separate stands. The comparative figures
at KwaMbonambi and St Lucia are 48% and 40% respec-
tively (see Table 4.3). The highest concentration of the
population residing in structures classified as ‘traditional
dwellings’ (i.e. made from mud and poles) is around St
Lucia (41%) and KwaMbonambi (35%).
Within the St Lucia study area there is a planned resettle-
ment of 300 families who are currently residing informally
within the coastal forest area of Dukuduku. A negotiation
process for the relocation of the remaining 9,300 families
is also under way. The plan is to resettle all households into
a formal settlement, where they can be integrated into the
local municipal system of planning, service provision,
maintenance and management. The need for this resettle-
ment is outlined in the Mtubatuba LM Integrated
Development Plan.
4.5 ACCESS TO WATER
As indicated in Table 4.4, the area with the highest
concentration of households with access to water in their
yards is in Port Durnford, where 23% of the population has
access to water in their dwelling and 49% to piped water
on their stands. An important aspect to note is the high
proportion of households at both St Lucia and
KwaMbonambi using water directly from rivers for house-
hold purposes (33% and 29% respectively). In addition, as
many as 24% of households around KwaMbonambi are
reliant on boreholes for their primary source of water.
Table 4.3 Housing Profile (2004) (%)
Settlement areas Brick house Traditional Flat Informal Informal Other
on separate dwelling dwelling dwelling
stand in backyard elsewhere
KwaMbonambi 48 35 6 1 6 3
St Lucia 40 41 12 1 3 2
Port Durnford 57 17 12 2 4 9
Table 4.4 Access to Water (2004) (%)
Settlement areas
KwaMbonambi 5 11 12 7 24 4 3 29 1 3
St Lucia 3 10 13 15 4 7 3 33 2 2
Port Durnford 23 49 5 7 1 1 1 9 1 2
Water
in
dw
elling
Y ar dtap
Co
mm
unity
tap<
200m
Co
mm
unity
tap>
200m
Bo
rehole
Sp
ring
Dam
River
Vendo
r
Other
(%)
1 9S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
In terms of availability of piped water in the three settle-
ment areas, as many as 84% of households in the Port
Durnford area do have access to some form of piped
water.
The comparative figures for KwaMbonambi and St Lucia
are 35% and 43% respectively.
4.6 AVAILABILITY OF SANITATION INFRASTRUCTURE
As indicated in Table 4.5, the vast majority of households
in the study area settlements are either reliant on pit
latrines or do not have access to any form of ablution facil-
ities. As many as 37% of households in KwaMbonambi
and 33% at Port Durnford are reliant on unventilated pit
latrines (see Table 4.5). The highest concentration of
households without any form of sanitation infrastructure is
around St Lucia (40%) and KwaMbonambi (30%). This
lack of sanitation infrastructure presents an impact on both
surface and ground water, and associated health hazards.
4.7 AVAILABILITY OF ELECTRICITY
In the settlements around the St Lucia site 60% of house-
holds do not have access to electricity for lighting
purposes. The comparative figure around KwaMbonambi
is approximately 45%. Conversely, as many as 87% of
households in the Port Durnford study area do have
access to electricity for lighting purposes (see Table 4.6).
4.8 ACCESS TO TELEPHONEINFRASTRUCTURE
The majority of the population uses public telephones,
ranging between 36% at Port Durnford and 50% at St
Lucia. Moreover, a significant proportion (between 22%
and 33%) has access to cell phones. Less than 10% of
the overall study area does not have access to any form of
telecommunication infrastructure.
4.9 WASTE REMOVAL SERVICES
A formalised waste removal system is largely absent within
the study area settlements. Nearly 95% of all households
in the St Lucia area either have their own refuse dumps or
no access to refuse disposal. The comparative figures
around the KwaMbonambi site and Port Durnford is 76%
and 66% respectively without waste removal systems. The
absence of formalised waste removal services has poten-
tial environmental, health and aesthetic impacts.
Table 4.5 Availability of Sanitation Infrastructure (2004) (%)
Settlement areas Flush toilet Flush toilet Chemical Pit latrine Pit latrine Bucket No
(sewerage (septic tank) toilet (ventilated) (not latrine facilities
system) ventilated)
KwaMbonambi 5 3 14 11 37 1 30
St Lucia 6 2 8 13 28 4 40
Port Durnford 33 3 9 12 33 2 9
Table 4.6 Availability of Electricity (2004) (%)
Settlement areas Electricity Gas Paraffin Candles Solar power Other
KwaMbonambi 58 0.34 0.92 41 0.16 0.26
St Lucia 39 0.16 0.28 60 0.31 0.60
Port Durnford 87 0.13 0.44 12 0.12 0.26
(Please note: all numbers less than 1 have been left in their original form)
2 0S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
4.13 ECONOMIC SECTOR PARTICIPATION
The SiyaQhubeka plantations are situated close to
Empangeni and Richards Bay, the main commercial and
industrial centres of Zululand. The Richards Bay harbour is
one of the largest and busiest in the country. Agriculture
such as sugarcane, bananas, citrus and pineapples play
an important part in the Zululand economy and, along with
forestry, form the bulk of the agriculture sector. Tourism is
also a large roleplayer in the local economy.
SiyaQhubeka’s links with the St Lucia World Heritage site
are helping to ensure the growth of this industry.
The employed proportion of the economically active popu-
lation is engaged in a wide range of economic activities.
The dominant economic sector is “community, social and
personal services”, in which 24% of employed people in
Port Durnford, and 20% in St Lucia, are involved. The
most prominent other sectors include agriculture, forestry
and fishing, manufacturing, and wholesale and retail trade.
The agriculture, forestry and fishing sector is particularly
important to the study area settlements around St Lucia,
as more than 15% of the employed people there are
involved in this sector. The wholesale and retail trade
sector represents employment for just under 15% of
employed persons in all three areas.
4.10 HEALTH STATUS
Little information is available on the health status of residents
in the study area. However, HIV/AIDS levels are reportedly
very high (about 33% of the local population, according to
Mondi personnel). This is reflected in the noticeable decline
in productivity among the SiyaQhubeka and contractor
workforce, sharp increases in the number of sick days taken,
and increases in the number of orphans.
There are reportedly local clinics in all the settlements
within the study area, and hospitals in both St Lucia and
Empangeni.
4.11 INCOME AND AFFORDABILITY
The vast majority of households in the study area earn less
than R1,600 (US$246) per household per month, ranging
from 66% in settlements in the Port Durnford area to 73%
in the St Lucia area. Furthermore, only 7% of all house-
holds in the St Lucia area earn more than R3,200
(US$492) per household per month. The comparative
figures for the settlements around KwaMbonambi and Port
Durnford are 8% and 10% respectively.
4.12 EMPLOYMENT PROFILEUnemployment remains one of the main challenges in the
study area settlements. As many as 72% of the economi-
cally active population in the St Lucia area are classified as
unemployed. The comparative figures for KwaMbonambi
and Port Durnford are 55% and 50% respectively (see
Table 4.7).
Table 4.7 Income Levels (2004) (%)
Settlement Equal to/ R1,601- R3,201- More
Areas less than R3,200 R6,400 than
R1,600 (US$ 247- (US$493- R6,400
(US$ 246) US$492) US$984) (US$984)
KwaMbonambi 69 19 8 4
St Lucia 73 18 7 3
Port Durnford 66 15 10 9
2 1S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
5.1 INTRODUCTION
SiyaQhubeka is one of the major contributors to the
economic development of the study area. This is seen in
terms of total employment and associated remuneration,
taxes and royalties paid, value added, and procurement of
local supplies. These different facets of SiyaQhubeka’s
economic contribution are discussed in more detail below.
5.2 EMPLOYMENT
The major impact of SiyaQhubeka is the creation of employ-
ment. SiyaQhubeka generates employment in four ways:
w direct employment at SiyaQhubeka;
w indirect employment as SiyaQhubeka contractors
and suppliers;
w employment generated through SiyaQhubeka CSI
initiatives; and
w induced employment through the spending, by
direct and indirect employees, on local goods and
services, and through the public sector jobs
supported by taxes paid by SiyaQhubeka.
5.2.1 Direct employment
Direct employment refers to those people employed by
SiyaQhubeka, and is reflected as the number of people on
the payroll expressed in full-time equivalent. The current
total number of full-time employees at SiyaQhubeka is 29.
5.2.2 Indirect employment
SiyaQhubeka generates a total of 1,263 full-time jobs
through its contractors and suppliers. A summary of the
extent of indirect employment is provided in Table 5.1. Of
the indirect employment, 85% is considered local. In the
context of the SiyaQhubeka plantations, ‘local employees’
are defined by community members and management as
employees who reside within the geographical jurisdiction of
the relevant local Tribal Authority (normally within a 5km
radius of the different plantations).
5 ECONOMIC BENEFITSOFFERED BY SIYAQHUBEKA
Worker harvesting a tree in the plantation.
2 2S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
Table 5.1 Total indirect employment
Name of contractor/ (c) % of (d) Total off- (e) Total indirect (f) % of
subcontractor/supplier (a) No. of (b) Total no. business with site employees employees employment
permanent of employees the operation (b x c) (a + d) that is local
on-site in company
contractors
Staff
1. Njonjo Construction 35 35
2. St Lucia 23 23
3. St Lucia Silvix 23 23
4. Maxim Security 49 49
5. Ukula Constructors 150 150
6. Nyathi Timber
Constructors 80 80 20 16 96
7. Iningi Investment 135 135
8. Sobabili Harvesting 80 80
9. Siyathuthuka Forestry
Services 32 32
10. George Field Services 6 6
11. Fukamela 130 130
12. Ithembalenkosi
Harvesting 5 5
13. Technical Consultants 10 5 1 1
14. Jerry’s Enterprise 160 160
15. Siyawisa Hlathi 300 300
16. UB Civil Engineering 30 30
17. Zamimpilo Forestry
Contractors 8 8
Total 1,246 90 25 17 1,263 85
Number of Off-site Staff
2 3S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
5.2.3 Community social investment employment
CSI employment refers to employment generated in the
region by CSI activities including local business develop-
ment activities. The estimated extent of CSI employment
related to the SiyaQhubeka operations is summarised in
Table 5.2.
5.2.4 Induced employment
As highlighted earlier, induced employment is created
through the spending, by direct and indirect employees,
on local goods and services, and through the public sector
jobs supported by taxes paid by SiyaQhubeka. The
induced employment generated through the SiyaQhubeka
operation is 132 (this is calculated at 10% of direct, indi-
rect and CSI employment).
Dukuduku indigenous nursery in the Khulu village.
Table 5.2 CSI employment
Name of project (a) No of (b) Average % of (c) SiyaQhubeka (d) Full-time (e) Apply
beneficiaries beneficiaries’ contribution to equivalent jobs multiplier
from project incomes derived establishing attributable to effect
from the project project (%) SQF* CSIs (d x 1.05)
(a x bx c)
1. Qhubeka Fire Wood 30 80 50 12 12.6
2. Masibambane Block
Making 24 10 100 2.4 2.5
3. Thokozanathi Honey
production CC 6 0 50 0 0
4. Khula Bee Farming 5 0 100 0 0
5. Mbekekazulu Vegetable
Garden 15 10 100 1.5 1.6
6. Manukelana Arts & Craft 6 80 85 4 4.3
7. Silwanendlala Poultry 6 50 95 2.9 3
8. Lawn Mowing 1 50 100 0.5 0.5
9. Bhekamandla Vegetable
Garden 15 10 100 1.5 1.6
10. Nkundusi Vegetable
Garden 10 10 100 1 1
TOTAL 118 - - 26 27
* SQF = SiyaQhubeka
Please note: the multiplier effect captures the employment generating effect of spending by beneficiaries of the specific CSI
projects. The TOTAL employment generated by SiyaQhubeka’s CSI projects is therefore 27.
2 4S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
5.2.5 Total employment
The total employment generated by SiyaQhubeka is
captured in Table 5.3.
5.3 VALUE ADDED
Value added is the measure of SiyaQhubeka’s total contribu-
tion to the economy, and is calculated using a formula as
shown in Box 5.1.
Based on SiyaQhubeka’s accounts, their value added for
2004 amounted to R9,832,000 (US$1,512,615). This is
comprised of:
w operating profit of R9 million (US$ 1.4 million);
w employee costs of R500,000 (US$ 76,923); and
w depreciation and amortisation of R332,000
(US$ 51,077).
5.3.1 Taxes and royalties
The objective of this section is to summarise the total
contribution of SiyaQhubeka to public sector revenues.
This information provides an indication of the extent of
overall economic and social impacts of the three estates.
Table 5.4 Taxes and royalties paid by SiyaQhubeka
Description of payment to the Amount paid
public sector (R) (US$)
Profits/corporation tax 11,960 1,840
Employee-related taxes that See
are the responsibility of Anglo turnover
taxes
Social security/unemployment 97,500 15,000
or sickness insurance taxes
Turnover taxes 331,500 51,000
Value added/sales taxes (pay- 780,000 120,000
ments net of reimbursements)
Import/export duties NONE
Property taxes NONE
Fuel duties and vehicle NONE
taxation (eg road use taxes)
Natural resource use charges (eg NONE
water abstraction or discharge
fees, air pollution or carbon
emissions permit charges)
Environmental and safety
permitting costs NONE
TOTAL 1.22 mill 187,840
As outlined in Table 5.4, SiyaQhubeka paid a total of
R1.2 million (US$ 187,840) in taxes and other payments
to the public sector in 2004.
Table 5.3 Total Employment Generated
Employment type Total number of employees
Direct employment 29
Indirect employment 1,263
CSI employment 27
Induced employment 132
TOTAL 1,451
Box 5.1 Calculating value added
Value added = operating profit + employee costs +
depreciation and amortisation
(Where operating profit = profit before interest, tax and
dividends and net of exceptional items)
An example of a vegetable garden project.
2 5S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
THE CONSULTATION that was carried out as part of the
SEAT process allowed for the identification of a number of
issues, as raised by local stakeholders. These issues are
described below.
6.1 POSITIVE ISSUES RAISED
w The plantations add aesthetic value to the local
area. This is seen as a positive contributor to
tourism.
w Aforestation decreases soil erosion and helps
to prevent water pollution. This results in
improved quality of water in natural water bodies.
w The plantations provide a wide range of non-
timber products which benefit local communities.
These non-timber products include: cattle
grazing; firewood collection; use of non-saleable
timber for building; and honey harvesting.
w The SiyaQhubeka operation is recognised for the
contributions it makes in terms of its CSI activities
(see Table 3.2), as well as the employment of local
residents (see Section 5.2) and the development
of small and medium sized forestry businesses
through its Fukamela initiative.
w The benefits of SiyaQhubeka’s monthly
Community Liaison Forums were acknowl-
edged, particularly the role that they play in
allowing complaints and issues of concern to be
raised and addressed.
6.2 NEGATIVE ISSUES RAISED
6.2.1 Employment issues
w Employment of non-local employees: the
employment of non-local employees is lower than
15%. However, with high unemployment levels in
the area, if the employment of non-local staff is not
monitored and reduced to an absolute minimum,
then the influx of job seekers could result in
strained community relations, with tensions devel-
oping between local and non-local residents.
w Use of non-local and non-HDSA contractors:
the appointment of non-local contractors is
causing strained relations between SiyaQhubeka
and communities in the study area. This includes
tensions around the appointment of white
contractors rather than their HDSA counterparts.
Local residents do not feel that they have an
adequate understanding of SiyaQhubeka’s
tendering process, and are also concerned that
SiyaQhubeka does not offer adequate support for
emerging contractors. SiyaQhubeka management
defines ‘local contractors’ as those sourced from
within Zululand.
w Increased mechanisation: the use of mechanical
harvesters is perceived to be resulting in increased
unemployment, with resultant dissatisfaction and
tension among local stakeholders. Incidents of
vandalism within the study area are potentially
linked to these tensions.
w Mondi’s talent management and career devel-
opment: employees acknowledge that this
programme is aimed at providing training and
development for all levels of employees directly
employed by SiyaQhubeka. Employees have,
however, expressed dissatisfaction about this
process, particularly around the lack of clarity
regarding who and how candidates are selected.
6.2.2 Access to resources
w Access to grazing: cattle belonging to local resi-
dents are prevented from grazing in areas where
the trees are small and therefore likely to be tram-
pled by livestock. This restriction is perceived to be
depriving local residents of their rights to graze their
cattle, and is a source of tension between livestock
owners and SiyaQhubeka.
w Loss of settlement and agricultural land: as
already mentioned, local residents are set to earn
monthly rentals off the land currently leased by
SiyaQhubeka. However, government delays in
finalising the land claims and privatising the land
has slowed the receipt of these rentals. Without
this remuneration, the economic benefit of the
plantations to local residents is limited. As a result,
use of this land for plantations is currently
6 ISSUES RAISED BY STAKEHOLDERS
2 6S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
perceived by local residents as land lost for more
worthwhile purposes, namely, for settlements and
agricultural purposes. These delays are causing
frustrations among local residents, with the poten-
tial to impact on relations with SiyaQhubeka.
w Forest fires: there have been problems with forest
fires in the plantations due to honey hunters starting
fires to smoke out the bees. This problem is, how-
ever, decreasing due to the management measures
that have been put in place (see Section 8).
6.2.3 Safety issues
w Criminal activities in the plantations: the planta-
tions, with their big trees and other vegetation,
provide a hiding place for criminals, who have
been implicated in the rape of pedestrians passing
through SiyaQhubeka plantations.
w Accidents: there was one fatality in 2004 as a
result of the use of heavy machinery in the planta-
tions. This fatality will have impacts on the family
unit and its ability to secure a livelihood.
w Large trucks on local roads: local residents
raised concerns about the heavy trucks that drive
along local roads and associated safety concerns,
as well as concerns relating to increased noise
and dust levels.
6.2.4 Community and environmental issues
w Lack of basic infrastructure: the lack of infrastruc-
ture in the settlements within the study area has
been raised by numerous residents and is also
recognised in the municipal Integrated
Development Plans. Although it is a government
responsibility to address these needs,
SiyaQhubeka recognises that as neighbours and
members of the local communities, it has an impor-
tant role to play in assisting to address these needs.
w Soil disturbance during road construction and
maintenance: this results in increased soil erosion
and river siltation/water pollution.
Take a Girl Child to Work Day event.
2 7S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
SIYAQHUBEKA has identified what it understands to be
the most significant of the issues raised by the stake-
holders during the SEAT consultation. For the purposes of
this study, an issue is considered to be significant if: (a) the
issue contributes to any of the risks or benefits identified in
Box 7.1; and/or (b) a stakeholder perceives the issue to
have the potential to cause one or more of the effects
identified in Box 7.2.
Based on these criteria for significance, plus the frequency
with which stakeholders have raised the issue, there are a
number of issues and impacts that are considered signifi-
cant, and thus require management intervention. Of the
issues raised, the most urgent of these are as follows.
w The need to increase the participation of local
residents in the contracts awarded by
SiyaQhubeka.
w The need to finalise the land claims associated
with the land rented by SiyaQhubeka.
Finalisation of this claim will enable residents to
enjoy the economic benefits of leasing the land for
plantation purposes.
w The need to address the impact of HIV/AIDS on
the labour force. With a high percentage of the
labour force reportedly being HIV positive,
SiyaQhubeka and the contractors stand to lose a
large proportion of their skilled and unskilled labour
force. This includes both the existing labour force,
as well as the potential local labour pool. Efforts to
address this situation need to be fast-tracked.
w The need to address the high levels of unem-
ployment in the study area. Mondi has, as one of
its Corporate Social Responsibility objectives, a
commitment to “Improving the quality of life of
communities through sustainable livelihood devel-
opment”. In keeping with this objective,
SiyaQhubeka recognises the importance of
addressing the high levels of unemployment in the
study area. Unemployment can also contribute to
crime and social instability in settlements neigh-
bouring the plantations. This could negatively
impact SiyaQhubeka’s relations with residents.
7 ASSESSMENT OF ISSUES AND IMPACTS
Box 7.2 Defining significance from the perspective of stakeholders
An issue will be considered to be significant if a stake-
holder perceives the issue to be one or more of the
following.
• Not easily resolved.
• To warrant direct action against SiyaQhubeka (e.g.
vandalism, work stoppages, public protests, legal
action, press action, etc).
• To have the potential to cause a breakdown in rela-
tions between stakeholders and the SiyaQhubeka
operation.
• To be causing direct impacts to quality of life or
levels of livelihood.
• To warrant out-migration away from the operation.
• To have the potential to cause incidents of conflict
between local stakeholders.
• To be causing high levels of personal stress and
anxiety.
Box 7.1 Defining significance from the perspective of risks/benefits to SiyaQhubeka
• Secure/threaten licence to operate.
• Result in direct financial benefits/costs to
SiyaQhubeka.
• Result in improved/strained relations with local
communities and neighbours.
• Result in improved/strained relations with regulators
and NGOs.
• Enhance/undermine perceptions of business unit
within Anglo Group.
• Enable/disrupt operations.
• Enhance/damage corporate reputation.
• Result in improved/decreased returns to share-
holders.
• Result in compliance/non-compliance with ‘Good
Citizenship’ Business Principles.
2 8S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
THIS SECTION provides an outline of management
responses to the key issues identified during the SEAT
process (see Table 8.1). For the most part, these measures
have been developed in consultation with local stake-
holders, and in many instances are already in the process
of being implemented (see Table 8.2).
8 MANAGEMENT RESPONSESTO ISSUES RAISED
Table 8.1 Management Responses to Issues Raised
ISSUE MANAGEMENT MEASURES WHO WHEN
Employment issues
Employment of Contractors to employ local labour only (i.e. from communities SQF* CEO: to Dec 2005,
non-local that adjoin the SiyaQhubeka plantations). This requirement will monitor employment
employees be stated in their contract, and will be monitored by contracts and on-going
SiyaQhubeka. ensure compliance
CEF: to communicate
employment data to
local residents
Use of non-local SiyaQhubeka will only consider contractors with a minimum of CEO: review and Dec 2005
and non-HDSA 25% BEE partnership. These BEE partners need to be sourced monitor the contracts
contractors, from the Zululand coastal area. Existing contracts to be to ensure compliance
including poor reviewed and on-going performance to be monitored.
understanding of Establishment of a Procurement Forum in order to develop CEO: establish
SiyaQhubeka’s a user-friendly tendering information document. Procurement Forum,
tendering process Continued roll-out of the Fukamela programme in partnership with assistance
with Financial Institutions (see Section 3.3). from CSR and procure-
ment departments
CEO: ensure
continued roll-out
Perceived negative Social impact study currently being done to evaluate the CSR Department Nov 2005
impact associated impact of mechanisation, and to propose mitigation to complete study
with increased measures.
mechanisation
Talent manage- SiyaQhubeka to ensure full implementation of Mondi Business Human Resource On-going
ment and career Papers’ Talent Management programme, including effective Department to
development awareness raising, and active assessment and development ensure implementation
of career development plans. of programme
Access to Resources
Perceived poor Livestock owners to be educated before their permits are CEF to coordinate a Dec 2005
access to grazing issued. This will be done with the assistance of a local training programme in
Agricultural College. Issues to be covered include grazing partnership with local
capacity and the impacts of over-grazing (e.g. soil erosion). agricultural college.
2 9S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
ISSUE MANAGEMENT MEASURES WHO WHEN
Development of a grazing management programme. This CEF to develop Dec 2005
involves determining stocking levels for areas and monitoring grazing management
grazing levels to prevent over-grazing and associated impacts. programme in
There are 3 main steps involved in this: conjunction with
• Completion of grazing register (who owns what and how local communities.
many);
• Determining the grazing capacity (this gives you your
appropriate stocking levels);
• Grasslands monitoring;
• Facilitation of training and awareness raising, including
establishment of grazing committees and grazing meetings.
In instances of over-grazing, SiyaQhubeka management will
decide how to address the issue, in consultation with the
grazing committee/s.
Loss of settlement SiyaQhubeka CEO to consult with government regarding the delay SQF CEO to consult Mar 2006
and agricultural in the resolving of land claims and associated receipt of rental. with government
land DWAF and Land Commission personnel to communicate with
local residents on this issue.
Uncontrolled use Development and implementation of a MRU strategy across CEF to develop and On-going
of non-timber Mondi Business Papers’ forestry operations, including implement MRU
forest products SiyaQhubeka, as a joint initiative between SiyaQhubeka and its strategy within
local communities. This strategy is derived from the Biodiversity SiyaQhubeka
Act 10 of 2004. The policy statement is “to practice wise and operations
sustainable utilisation of resources, products and opportunities
within the forestry estates for the benefits of employees, general
public and adjacent communities.” The goals of this strategy are
to: (a) develop a MRU inventory; (b) develop management
guidelines; and (c) monitor, educate and raise awareness.
Forest fires The establishment of formal honey projects has assisted in CEF to monitor On-going
decreasing the problem of forest fires started by honey hunters. existing initiatives
In this regard, the following steps have been taken:
• Port Durnford, started in 2004: SiyaQhubeka purchased bee
smokers and gave these to people free of charge. Smoking
activities are then monitored by the security guards.
• KwaMbonambi, started in 2004: in agreement with local
communities, Saturdays and Sundays have been identified as
honey hunting days. All honey hunters are accompanied by
the security guards.
• St Lucia, started in 2003/2004: SiyaQhubeka pay someone to
take the honey hunters into the plantations. This is to help
protect people from the wild animals (e.g. elephants) in the
plantations.
Table 8.1 Management responses to issues raised (continued)
3 0S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
Safety Issues
Criminal activities A full time security company has been employed to patrol the CEF to monitor existing On-going
in the plantations SiyaQhubeka plantations. This has already seen a decrease in initiative, together with
crime in the area. local security company
Accidents due to SiyaQhubeka’s Safety, Health and Environment (SHE) officer, SHE officer and senior On-going
heavy machinery together with senior management, to monitor and enforce management to monitor
compliance with required safety measures. Spot checks to be and enforce compliance
carried out by the SHE officer.
Large trucks on SiyaQhubeka’s SHE officer to monitor and enforce compliance SHE officer and On-going
local roads with required vehicle specifications. Spot checks to be carried senior management
out by the SHE officer. to monitor and enforce
Trucks to be inspected at the Mill. Timber will not be off-loaded compliance
if there is non-compliance with vehicle specifications. SHE officer to carry out
spot-checks
Community Issues
Lack of basic SiyaQhubeka to partner with local and provincial government CEF to set up meetings Dec 2005
infrastructure in addressing priority needs. In this regard, meetings to be held with MEC’s and relevant
with senior government officials and relevant local authorities. authorities
Environmental Issues
Soil disturbance SiyaQhubeka’s Environmental officer to monitor and enforce Environmental officer to On-going
during road compliance with road construction/maintenance specifications. monitor and ensure
construction and compliance
maintenance
Table 8.1 Management Responses to Issues Raised (continued)
(*SQF = SiyaQhubeka)
SiyaQhubeka’s CSI department has identified a number of
key objectives and targets which, if met, will assist in
addressing the issues raised in Section 6, and help with the
implementation of the above management measures.
These objectives and targets are captured in Table 8.2 on
page 31.
SiyaQhubeka HIV/AIDS awareness initiative.
3 1S O C I O - E C O N O M I C A S S E S S M E N T R E P O R T I S I YA Q H U B E K A
Table 8.2 CSI Department: Objectives and targets (2005)
KEY FOCUS AREA OBJECTIVES AND TARGETS
Local Economic Create at least 15 job opportunities through their social investment project
Development Establish at least two youth small business development projects in each of our business units
Train at least 30 entrepreneurs in Business Skills
Involve our contractors in at least three economically viable community projects
Form strategic partnerships with other funding agencies (involve Fukamela)
Return on Full implementation of social risk management system
Investment Reduce current arson fires (especially bee fires) by half
Train more than 300 children in forest fire awareness
Train more than 40 community forum members in forest fires
Engage at least three youth groups (and other community structures) in dealing with social risks,
especially forest fires
Complete integration of security contractor in community structures across all SiyaQhubeka areas
Poverty Alleviation Formation of strategic partnerships with Welfare department, Department of Agriculture, National
Trade and Investment
Training of at least two women’s groups in food technology (per nutrition survey recommendations)
Evaluation of vegetable garden projects initiative, and full implementation of the
recommendations (in partnership with the Department of Agriculture)
Establishment of at least two school vegetable gardens (in partnership with School Governing
Boards and other stakeholders)
Education Formation of strategic partnerships with Welfare Department, Department of Agriculture and
Department of Education
Provide at least one bursary to a most deserving pupil from the local communities
Provide required infrastructure in rural schools through our Community Engagement Fund
Organise at least two forestry seminars (life skills, career guidance, etc) in rural schools in the
division
Continue participating in Take A Girl Child in forestry - 50 children
Provide reading material/library books to at least one rural community school (1,000 children)
Use of Non-Timber Formulation of livestock grazing committees in St Lucia and Port Durnford areas
Forest Products Training of six herdsmen in animal husbandry and general grazing management in above areas
Training at least two groups of livestock owners in beef and dairy production in above areas
Reduce the damages of uncontrolled grazing to zero
Initiate at least one other MRU project
HIV/AIDS Assist at least two groups of community peer educators.
Continuation of the HIV/AIDS awareness and education programme by participating in municipal
initiatives
Youth Involvement Incorporation of youth groups onto our community liaison forums and our projects in general
Form strategic partnerships with youth organisations and KwaZulu Natal Trade and Investment,
with a target of 500 orders of craft products
Communication Launch of all our projects – in partnership with local media
Establishment of Community Engagement newsletter twice a year (publication mainly in Zulu)
Participation in strategic publications
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Signage is an important part of safety managementat SiyaQhubeka.
Table 8.2 CSI Department: Objectives and targets (2005) (continued)
Human Capital CEFs to participate in all value adding seminars and strategic workshops
Development Encourage cross-visits within and outside Mondi
Continue training community structures in committee skills and entrepreneurship
General Consolidation and hand-over of all completed projects to beneficiaries
Encourage the involvement of all our stakeholders including, farmers etc.
Monitoring and evaluation
Roll-out of Anglo guidelines and full implementation
Double Black Economic Empowerment spending
Encourage employee involvement in CSI
Address stakeholder grievances
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9.1 STANDARD SEAT KEY PERFORMANCE INDICATORS
Certain findings of the SEAT process can be used as
indicators to monitor and measure performance. These
are shown in Table 9.1, and are known as “Key Corporate
Performance Indicators”.
Table 9.1 2004 Key Corporate Performance Indicators – SiyaQhubeka
Indicators Total value Total value Number of beneficiaries
(R) (US$) Employees Other
stakeholders
(a) Value added 14.3 million 2.2 million - -
(b) Taxes and other payments to the public sector 1.22 million 187,840 - -
(c) Direct employment (excludes social provision) 13.52 million 2.08 million 29 -
(d) Indirect contractor and supplier employment plus 22.1 million 3.4 million 1,395 -
induced employment
(e) Employment through social investment (includes direct - - 25 -
employment in social provision projects)
(f) Recipients of basic healthcare - - - -
(g) Recipients of education and training (NB excludes - - - -
students in supported schools and colleges)
(h) Living in SiyaQhubeka provided accommodation - - - -
(employees and former employees live in company
dormitories, average family size of four is assumed)
(i) Spend on social and community programmes 306,052 47,085 1,003
(j) Capital expenditure - - - -
(k) Total numbers dependent on Mondi for livelihoods - - 5,796
(families of employees included under ‘other stakeholders’
and average family size assumed to be four persons)
(l) Pension payments 143,163 22,025 29 -
9 INDICATORS AND MONITORING
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ENQUIRIES
Jim Matsho
Manager SiyaQhubeka
Tel: + 27 (35) 902 2759
Fax: +27 (35) 902 2761
Zenzele Gumede
Community Engagement Facilitator
Tel: +27 (35) 580 4647
Fax: +27 (35) 902 2761
SIYAQHUBEKA has performed very well in terms of under-
taking the SEAT process and identifying and assessing
their socio-economic impacts. However, two additional
actions that need to be carried out as part of the overall
SEAT study include:
w Completion of a detailed monitoring plan for the
issues that have been identified; guidance on the
requirements for this plan is provided in Tool E of
the SEAT document.
w Local key performance indicators need to be
developed to help measure the success of the
management measures suggested in this report.
10ADDITIONAL ACTIVITIES TO BE CONDUCTED BYSIYAQHUBEKA
GLOSSARY
AIDS Acquired Immuno Deficiency Syndrome
BEE Black Economic Empowerment
CEF Community Engagement Facilitator
CEO Chief Executive Officer
CSI Community Social Investment
CSR Corporate Social Responsibility
DWAF Department of Water Affairs and Forestry
FSC Forest Stewardship Council
HDSA Historically disadvantaged South Africans
HIV Human Immunodeficiency Virus
MRU Multiple Resource Use
Safcol South African Forestry Company Ltd
SEAT Socio-economic Assessment Toolbox
SHE Safety, Health and Environment
SQF SiyaQhubeka Forests
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