By Glenn Ashton · 19 Nov 2012
Exploitation and pay in the timber industry is the most extreme amongst any commercial sector in South Africa. While mining and agriculture workers have been in the news for protesting against exploitation in their respective industries, no such action has been evident amongst forestry workers.
Working in the timber industry is the equivalent of running a marathon every day. Workers experience some of the highest rates of work related injuries, along with the lowest pay.
There was a huge post democracy dividend for South African companies as they re-entered the world of international commerce and capital. Amongst these were two major timber companies, Sappi and Mondi. These companies have since grown to assume a place amongst some of the largest timber, paper and pulp companies in the world. Like many other South African companies they took full advantage of our political transition to ride the growing wave of globalisation.
Forestry researcher Jeanette Clarke has shown how increased globalisation of the timber industry has led to the adoption of the worst aspects of international labour practice, in particular the use of contractors and casualisation of the workforce. Consequently workers in this sector remain profoundly exploited.
During the 1990’s most permanent timber industry workers were retrenched, slashing overheads. These skilled operators were then re-employed by independent contractors. Thus outsourcing became the status quo.
Instead of companies directly employing workers – with all of the related costs and commitments of health, housing, provident funds and pensions – outsourcing labour through brokers and contractors has enabled companies to divest themselves of these human and financial responsibilities. Workers hired in through third party contractors, or employed under fixed, short-term contracts, undertake identical work at lower cost and pay.
While shareholders have benefited, workers have borne the true costs of globalisation of this industry. Economist Dick Forslund of the Alternative Information Development Centre states that for every R100 of value that this sector contributes to GDP annually, workers receive less than R20. This is about 15 percentage points below average private industries 42% wage to value-added ratio. Forslund terms this as not just super-exploitation, but extreme super-exploitation.
Consequently payment in the sector remains below even the dismal rates of domestic and agricultural workers. To address this clear failure in the relationship between employers and labour the state eventually instituted a sectoral determination for forestry. This established a minimum wage of R836 per month in 2006. It is presently set at R1429, to rise at inflation + 1% per annum.
This is clearly well below desirable levels. The aim is to reach parity with minimum agricultural wages by 2015, at around R1500 per month. Yet even this pay level is at risk of being perceived as a maximum rather than a minimum by labour brokers and contractors.
The quality of life for most plantation workers has not improved under the democratic dispensation; for many it has declined. While industry ownership has been pressured and shamed into addressing some of these shortcomings, the situation remains fraught.
Clarke has established that more than 80% of workers in the industry remain dependent on labour broker agreements. Only 15% are permanently employed. The remainder work on fixed-term contracts, no better off than any other non-tenured labour, with no job security at all.
Clarke’s research illustrates that while this flexibility may suit industry, contracted labour earns 61% of the wage of unionised employees. Even so, the average unionised rate of slightly over R2000 per month remains significantly lower than other sectors. These often fall at, or below, poverty levels.
The most recent report of the Employment Conditions Commission found that farm workers consider that the basic minimum wage should be closer to R3500 per month than the current R1400 per month. Forestry workers not only earn less but often are contracted to piece work, where payment depends on the amount of work completed per worker. This encourages increased exploitation and workplace injury.
The forestry industry is globally notorious for its externalisation of costs and exploitation of both labour and the environment. As a major consumer of primary industrial resources, reliant on natural services, forestry has historically had a huge impact on the environment and ecosystems.
These impacts have been, and generally remain externalised. The true costs of clearing tropical rainforests, of water abstraction through timber plantations, of biodiversity loss through displacement of sensitive biomes like grasslands and wetlands, each embody significant ecological impact. Besides some disputed payments for water abstraction under the National Water Act, environmental costs locally remain externalised.
External oversight and pressure has started to force the industry to address these impacts over the last decade or so. Yet powerful arguments are made that even these are akin to using band-aid’s on an amputation, public relations exercises that fail to address the fundamentally exploitative nature of the industry on both ecosystems and labour.
While forestry has traditionally been extremely labour intensive, mechanisation has emerged as an increasing threat to employment. Almost the entire process can now be handled by machines. While machines require operators, worker numbers are gradually declining, locally and globally.
Some argue that mechanisation is beneficial because it will minimise the risks and intensity of the work. Others insist employment numbers must be kept high. Given South Africa’s extremely high unemployment, a powerful argument can be made to minimise mechanisation for all except the most dangerous and arduous work. Even so, decent living wages and work conditions must be implemented.
Some progress has been made to bring workers, forestry owners and communities together. Private companies like Sappi and the state are increasingly supporting community plantations. Mondi has also showed leadership, settling 19 land claims and transferring land to community Trusts. However small-scale growers remain dependent upon large forestry product buyers – they are price takers, not makers.
Where community projects have succeeded, those who transport timber are generally more successful than cultivators. Small growers remain a subordinate sector, captive to corporate whims, little better off than those reliant on labour brokers or short term contracts. This could change, given sufficient support but because plantation growing is such a long-term industry, benefits can take many years to manifest.
The reality is that the forestry plantation sector remains largely un-transformed. While some environmental issues have been addressed under Forestry Stewardship Council (FSC) guidelines, the exploitative practices of labour casualisation and contractor relationships in the industry remain largely moot under both industry and FSC guidelines.
Multi-stakeholder forums continue to operate, yet the voice of labour remains poorly represented, thus muted. This is largely because of the scattered demographics of forestry workers rendering organisation and solidarity expensive and difficult.
The most notable changes in the timber industry have arguably come about through the state imposed sectoral determinations. Yet the increasing desperation of untenured, exploited workers, driven by inflationary pressures eroding real wages, threatens to further destabilise the already fragile relationship between workers and owners.
Worker frustration has and can continue to boil over, with serious negative impacts for this important sector. Plantations have allegedly been torched and remain vulnerable. It is critical that civil society, the state and unions continue to actively eradicate exploitative labour and ecological practices inherent to this industry.
It remains remarkable that an industry which has benefited so massively from the democratic dispensation has failed to properly recognise or reward its productive labour force. The risks to our national economy and reputation are not insignificant.
**Note from the author: Thanks to Jeanette Clarke for sharing her time and insight into this industry. The conclusions are my own.