The B-BBEE Forestry Sector comprises entities involved with commercial Forestry and first-level processing of wood. The following is also included: Growers (plantations, nurseries, and indigenous forests), Contracting sub-sector and pulp, paper, paperboard, timber board product, woodchip, and wattle bark manufacturers, pole treatment plants, etc.
The entities that form part of the Forestry Sector Codes must spend 1% of their Nett Profit After Tax on Socio-Economic Development (SED) initiatives.
For the Generic Scorecard (a turnover that exceeds R50 million), the target for maximum points is 1% of the entity’s Net Profit After Tax. However, the Generic enterprises have three bonus points available under the Socio-Economic Development Element. The target for these three bonus points is 0.75% of your Net Profit After Tax.
The bonus points will be awarded pro-rata to the entity should they not be able to spend the complete 0.75% of the Net Profit After Tax. You will obtain one bonus point for every 0.25% you send.
The QSE Scorecard (a turnover that is below R 50 million), the target for Socio-Economic Development is also 1% of Net Profit After Tax, and no bonus points are applicable.
Portions of Qualifying Socio-Economic Contributions made annually that exceeds the combined targets for the current Measurement Period may carry forward to the following Measurement Period for recognition. The amount carried forward may only be carried forward once.
Where Qualifying Socio-Economic Contributions and initiatives span over multiple years, the total contribution amount must be divided by the number of years. The average per year is then to be utilised for the annual contribution.
Forestry Enterprises may implement the following initiatives as part of the SED contributions:
- Sector-specific contributions must assist the local community of the Forestry Industries. The local black people have to benefit from the Socio-Economic Development programmes structured for this sector;
- Assistance can be provided in various forms, such as Grant Contributions, Direct and Overhead costs incurred in Supporting SED, sector-specific initiatives or Qualifying Socio-Economic Contributions;
- Time of Employees of Enterprise productivity deployed in assisting beneficiaries and supporting SED initiatives;
- For example, if a forestry entity had to supply the local school with paper for their students or manufacture benches that could be donated to local schools.
Should you require more information regarding the BBBEE Forestry Sector, please do not hesitate to contact your BEE Legal advisor. Alternatively, “SMS” the word “SEESA” to 45776 for a SEESA representative to contact you.
About the author:
Saigal Inderpal started SEESA her career in 2017 and is currently a BEE Legal Advisor. She graduated from the University of Kwa-Zulu Natal and is an admitted attorney.
Resources:
- Amended Forest Sector Code in terms of the Section 9 (1) of the Broad-Based Black Economic Empowerment Act, (Act no.53 of 2003) as amended by the B-BBEE Act 46 of 2013 .
- Geralen.e Van Wyk Forestry Manuals