Sappi and Mondi ahead of the curve
Group’s interest is in trees, not the land they grow on, says CEO
● Packaging and paper corporation Mondi Group is unfazed by moves towards land expropriation without compensation, with CEO Peter Oswald saying the company’s business model prioritises access to wood resources instead of land ownership.
The ANC’s proposal for the amendment of section 25 of the constitution to allow expropriation of land without compensation looks set to change the nature of land-claim settlements for companies that own massive tracts of land.
Mondi and listed pulp and paper company Sappi have historically settled land claims with communities in which they operate. Mondi, which is listed in Johannesburg and London, manages 245,000ha of plantation forests in South Africa.
An Institute for Poverty, Land and Agrarian Studies (PLAAS) research paper on employment trends, opportunities and constraints in forestry and wood products industries, released in April, says an estimated 40% of large grower plantations are subject to land claims.
Information on the number of plantations transferred to communities through the land reform programme was not easily available because the records on land restitution were not kept according to current land use, said forestry consultant Jeanette Clarke, the author of the paper.
Clarke said it was too early to speculate on the mooted changes to the constitution and related acts.
But she said changes, if any, to the constitution were unlikely to be the key that unlocks the much-needed transformation in property relations in SA.
“The programme has been mainly held back by a lack of political will and the lack of implementation capacity in the department of rural development & land reform,” she said.
“Given these limitations, the efforts by the forestry industry to work in partnership with the department to expedite settlement of claims on forestry land and to develop and fund post-settlement support models deserve recognition.”
Speaking last Friday after the release of the company’s results for the six months ended June 30, Oswald said Mondi had a flexible stance on land reform, saying the group had in the past settled land claims “in a positive way. Everyone benefited from it.”
In 2015, the company signed a settlement agreement with the department of rural development & land reform for land claims lodged in KwaZulu-Natal by the Mkhuzane community for land in the Richmond area, and by the Nodunga community in the Stanger area.
Mondi had owned the land claimed by the communities and used it for commercial forestry. In terms of the agreement, the company will lease the land for an initial period of 10 years, subject to renewal thereafter.
The department paid R26.9m for 1,781.3ha for the Mkhuzane community and R7.4m for 685.5ha for the Nodunga community.
Land reform “is something we have to work with government on. Ours is not to own the land, but we want access to wood resources,” Oswald said.
As part of its strategy to secure wood supply to its Richards Bay mill, the company acquired approximately 11,000ha of forest plantations in KwaZulu-Natal in May, for R408m.
“We want to be self-sufficient as much as possible,” Oswald said.
According to PLAAS, Mondi has sold off around 50% of its plantation assets in SA since 2005.
Sappi spokesman Andre Oberholzer this week said there were several land claims against Sappi-owned land.
“We are currently dealing with 65 claims. Six claims have been settled and the extent of the land agreed, but we are waiting for finalisation from the KwaZulu-Natal and Mpumalanga regional land claims commissioners,” Oberholzer said.
He said 20 claims had been agreed to but the extent of the land was still to be finalised with the regional commissioners and claimants. Of the 65 claims, 20 had been referred to court, either because Sappi questioned their validity or the extent of the claim.
He said the regional commissioners had “requested the opportunity to discuss settlement options with all parties”.
Four claims were regarded as invalid and the regional commissioners had been “asked to finalise them as such”, Oberholzer said.
In the past 10 years, Sappi had settled 37 claims, said Oberholzer. These included nine claims involving 8,151ha in which the claimants took ownership of the land, and six claims for 11,629ha in which the claimants preferred to receive compensation from the government.
In that period, a total of 22 claims for 35,696ha had been withdrawn because there was no validity to the claims, he said.
Transformation in property relations has been mainly held back by a lack of political will and implementation capacity in the department of rural development & land reform
Jeanette Clarke
Forestry consultant