forestry firms face big land claims
14 January 2008

About 48 percent of the 357 000ha held by Mondi and about 17.5 percent of Sappi's 540 000ha of timber is subject to land claims. Komatiland Forests said more than 75 percent of its 125 000ha was under land claims.

Claims for land belonging to Sappi, one of the largest land owners in South Africa, have been increasing rapidly since 2004 and, if successful, these threaten to reduce the amount of land the paper and pulp company owns in Mpumalanga and KwaZulu-Natal.

The reduction in the size of the firm's forests in these provinces can have an effect on the group's operations. Jan Labuschagne, the chief executive of Sappi's southern African operation, said the effect could be great if the land claimed was used for things other than timber.  "If the communities that get the land do not reach some agreement with us and divert the use of this land for things like grazing and crop farming, then the country and the industry can lose a huge fibre source [timber]," said Labuschagne.

Sappi would not give details of the extent of the expected effect on its operations, saying the process of determining this was continuing.

The land restitution process will, however, not have any cost implications for Sappi, Mondi and Komatiland Forests. These companies will be compensated once the claims have been finalised.

Mark Thompson, the chief financial officer at Sappi, writing in the latest annual report, said to date there had been notification of 26 formal land claims made for the company's plantations in Mpumalanga, and 32 others made for plantations in KwaZulu-Natal.  The increase in claims can be attributed to the fact that the government has undertaken to speed up the process of land restitution by increasing the budget allocations for this process. The increase in allocations for land restitution started in 2004, when this process was given a R700 million shot in the arm.

The Restitution of Land Rights Act of 1994 provides for the restoration of rights in land to persons and communities dispossessed of their rights after June 19 1913, as a result of racial discrimination.

In finance minister Trevor Manuel's October adjustments of national expenditure for 2007/08, it was announced that the restitution budget for returning land to claimants would receive R3.5 billion, compared with about R2.3 billion in 2006/07.

Labuschagne said two-thirds of Sappi's land was planted for forestry operations and the remainder was unsuitable for planting, due to being in environmentally sensitive areas, such as wetlands or due to adverse soil conditions, low rainfall and steep terrain.

Mondi said it had experienced land claims over land holdings in KwaZulu-Natal and Mpumalanga. The company stressed that the land claims would continue to change as claims were settled or rejected and new ones published in the government gazette.  Mondi has a strategy to offset any effect on its operations: it will lease the land back from claimant communities so it can continue with its operations.

Mzwandile Jacks, Johannesburg, www.busrep.co.za