Transformation with BBBEE in South Africa

Where does Sappi stand in terms of the various elements of the scorecard?

Our performance against each scorecard element is set out below.

Ownership

The black ownership percentage for Sappi South Africa is 65.32%, with the black women ownership percentage standing at 32.16%.

Management control and employment equity

Our employment equity score has been steadily improving since 2015, when we built a stipulation into our management incentive scheme that 80% of management appointments in any one year should be black people.

Skills development

Historically-disadvantaged employees are a major focus of our training support in Southern Africa. Through the equity and learning forums, management and employee representatives agree on training plan requirements and the tracking of training and development progress to equip employees for improved performance in their current roles; recognise competence; and prepare for career mobility. Skills development initiatives, particularly programmes aimed at improving management and leadership skills, are geared to meet our employment equity targets. Read more about our Skills Centres at Ngodwana and Saiccor Mills.

Preferential procurement

We have a preferential BBBEE procurement policy in place which allows for preferential payment terms and the relaxation of commercial/procurement terms and conditions. No allowance is made to relax specifications. Where practical, we purchase goods and services from black-owned businesses and seek opportunities to develop future black vendors.

Enterprise and supplier development

Started in 1983, Sappi Khulisa, our primary enterprise development initiative, aims to include rural individuals and communities in the forestry industry which has high barriers to entry. This initiative is aligned with the South African government’s strategy of promoting forestry as a means of sustainable livelihood in rural areas and involves the transfer of business skills, technical assistance, financial support and preferential payment terms to assist new enterprises to enter the market.

Our dedicated Enterprise and Supplier Development (ESD) department promotes sustainable livelihoods by identifying procurement opportunities for, and overseeing the capacity building of, small and medium-sized enterprises (SMEs) through training and operational support.

We began the process in FY19 by onboarding the operations to the ESD strategy, which was followed by analysing our spend in forestry and mill operations to identify suitable ESD opportunities. We then mapped our local communities and scoped supply chain and community business opportunities. This included the unbundling of contracts and setting-aside of suitable business opportunities. We identified potential SMEs and classified them according to their capacity-building needs, with some needing a higher level of intervention than others.

Socio-economic development

Although Sappi is a global company, the bulk of our corporate social responsibility spending focuses on South Africa where poverty and unemployment are key social imperatives. Our community engagement agreements commit both ourselves and our communities to work together in driving shared value for mutual benefit and enhanced social impact. Integrated community forums (ICFs) are the key platforms which we use to build trust, gain advocacy and achieve shared value. Community participants range from traditional leaders and councillors to local business and environmental groups. The ICFs focus on three key areas: community skills development, asset-based community development (ABCD) and corporate social investment, as well as enterprise and supplier development (ESD). Through shared value, our overarching aim is to move our communities towards a sustainable future independent of Sappi.

How does Sappi deal with land claims?

As a significant landowner in South Africa, we have a role to play in land reform and are working actively with the Department of Land Affairs (DLA) to resolve land claims lodged against our property. We are currently engaged in a number of land claims in South Africa. As of 30 September 2022, there were 133, 244.18 hectares (ha) under claim of which 88,566.80 ha are plantable to timber (in other words, these are the hectares authorised for planting under legislation). For many of the land claims in which we have been involved, and where there has been a change in ownership, we continue to buy the timber and help manage those plantations.

Poor post-settlement support is one of the key reasons cited by experts for the failure of many land reform projects in South Africa. We are working with a large number of land reform beneficiaries to assist with the management of timber on their properties, post-settlement.

To ensure sustainable production from these properties, we have entered into supply agreements with the new beneficiaries and have also provided assistance. This depends on the requirements of the project, but ranges from a pure supply agreement to a comprehensive Forestry Enterprise Development Agreement (FEDA). The latter is a supply agreement but also incorporates development objectives whereby Sappi provides technical and business training, as well as administrative support.