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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


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.


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


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


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.


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


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.


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


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


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.


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.


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".


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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.


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


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

(%)


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)


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


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.


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


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.


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.


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


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.


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.


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.


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)


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.


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


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


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


ENQUIRIES

Jim Matsho

Manager SiyaQhubeka

Tel: + 27 (35) 902 2759

Fax: +27 (35) 902 2761

[email protected]

Zenzele Gumede

Community Engagement Facilitator

Tel: +27 (35) 580 4647

Fax: +27 (35) 902 2761

[email protected]

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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