Power as capital: insights from South Africa's commercial forestry sector

Abstract

This article discusses the link between power, empowerment and capital(s) in South Africa's forestry sector. Contestations within the sector spring from a policy struggle to ensure multiple interests and diverse objectives are represented in commercial forestry. This is a change from the previous domination of commercial forestry by the state and the private sector. Current policy directives require the inclusion of local communities close to the resources and of black individuals with entrepreneurial interests in forestry. The article deviates from analyses that make redistribution of economic capital the main solution to empowerment issues at the centre of these policy efforts. Backed by qualitative research into two forestry companies in two provinces – Singisi Forest Products in the Eastern Cape and Siyaqhubeka Forestry in KwaZulu–Natal – the article argues that to create and sustain ‘new power’, especially for local groups of communities, requires not only economic but also social and human/intellectual capital.

1. INTRODUCTION

Given the social and economic disparities evident in contemporary South Africa, it is no wonder that development discourses are dominated by concepts such as transformation, equity, social justice and empowerment. These concepts have also underpinned post-apartheid policy-making and, in the past decade, significantly shaped public debate. At the core of these processes is the imperative to diffuse power, and especially to extend it to the majority South Africans who have borne the brunt of apartheid.

Transformation has involved both the public and the private sphere. In the commercial forestry sector, the structure of ownership has been redefined, with the state withdrawing from being an owner of forest estates and more private actors moving in. As in other sectors where the state has moved out, the role of the private actors has changed somewhat, as they are expected to take on certain developmental functions in the light of the transformation agenda. Hence the economic democratisation seen in concepts such as Black Economic Empowerment and government restructuring processes has not only created new opportunities for business, but added developmental responsibilities as well. This article discusses how the established private sector, endowed with technological know-how and capital, shares power with new smaller black businesses, individuals and even local communities in exploiting the commercial forest resource. But power and empowerment are contested concepts, and it is important to first understand their theoretical orientations.

2. UNDERSTANDING EMPOWERMENT

For the purposes of this study, the concept of empowerment can best be understood within the broader realm of societal transformation. Broadly, it means making a concerted effort to extend power to those who lack it or are unable to access it because of structural barriers. The assumption here is that somewhere along the social processes, a particular social group has been left out of the mainstream of development and lost the capacity to re-enter it. Empowerment efforts seek to restore equity and social justice to those who have been excluded.

In the literature debating empowerment theory, writers have approached the discussion from a variety of perspectives. While some have emphasised empowering the individual through increased conscientisation and knowledge (Batliwala, 1997; Sen, 1997), others have prioritised collective empowerment rather than an ‘atomised’ individualist approach (Herrick, 1995). There have also been attempts to bridge the gap between the two approaches by portraying them as interconnected parts that require simultaneous attention (Rowlands, 1997). To simplify, the collectivists maintain that the individualist view of empowerment ignores the role of structures that facilitate access to and control of resources, while the individualists question the effectiveness of material access and control, when unaccompanied by improved self-awareness and knowledge that would sustain material acquisition. These arguments however, seem to regard actors and structures as isolated, autonomous parts – hence they both downplay the linkages that may exist between the two.

The tendency to discuss empowerment from these different angles suggests that definitions, meanings and operationalisation are not only diverse but also fairly specific to their individual spaces. A common element in any understanding of empowerment is the centrality of power, hence it becomes important to isolate and identify the type of power in question.

The predominant understanding of power has relied on Weber's conception of power (Gerth & Mills, 1948) as ‘A’ having or exercising power over ‘B’ or ‘the ability to exert control over people, even against their will’ (Calhoun, 2002:511). More recent theorists such as Foucault (1988) have understood power as a more complex web of relations, which cannot be confined to agency and the state. They considered that the preoccupation with the issue of power, especially in terms of who exercised power, was not sufficient if at the same time there was no understanding of how such power was exercised (Foucault, 1988). They found that resistance was a central element in such power relations, and that power permeated all relations, whether between the sexes, different races, state and subjects or generally, in any system where some exercised authority over others.

Foucault's perspective that is of relevance to the current study is the role of agency in power relations. Authors such as Giddens (1984), Rowlands (1997), Rowlands and Afshar (1998) and McGettigan (2002) have also acknowledged the role of agency. They have broadened the discursive space of power to include other specific problems of human relations that do not necessarily have to be analysed through the lens of ‘power over’. Rowlands, for instance, advances an alternative dimension of power as ‘power to’. She uses this concept to refer to enhancing the capacities of individuals or groups to improve their situations, whether socially, intellectually or economically. Her idea of ‘power to’ (Rowlands, 1997:13) challenges the understanding of empowerment as something that can be transferred or given, and posits it instead as a personal process of self-discovery, with subsequent resistance to oppression and the structures that support it (Rowlands, 1997; Rowlands & Afshar, 1998). This conception contradicts the idea that access to and control of resources can alone constitute power, and resonates with Foucault's notion of power as consolidated through knowledge. The idea of ‘power to’ presents a broader understanding of power and encapsulates the acquisition of self-efficacy (i.e. personal drive, ability and motivation to succeed) and a wide range of capitals: intellectual, social, cultural and economic. It is power as creating or facilitating motivation and the drive to achieve goals without necessarily aiming to dominate.

The case studies presented here are examples of attempts by two forestry companies – Singisi Forest Products (SFP) in the Eastern Cape, and Siyaqhubeka Forestry (SQF) in KwaZulu–Natal – to get involved in processes of empowerment while the communities and individuals around them take advantage of the consequent opportunities to improve their social and economic circumstances. The new forestry policy has facilitated the empowerment processes in the sector through restructuring and privatisation.

3. THE POLICY CONTEXT

Since the White Paper on Sustainable Forestry Development (Department of Water Affairs and Forestry, 1996) was promulgated, the commercial forest sector, like other key economic sectors, has been restructured, with a focus on its ownership structure. This has mainly involved the gradual pulling out of the state, which has created space for more private players. In a context where transformation is a key government objective, the entry of more private actors has also been viewed as an opportunity to include entities and individuals disenfranchised by apartheid. Since the concept of empowerment has been central to restructuring government assets, it was included as a condition of the government's sale process. Restructuring or privatisation is of course not unique to forestry but is generally congruent with broader change processes elsewhere in South Africa – hence the big policy issues and concepts such as empowerment are simply replicated in forestry.

What makes the forestry case different and interesting is, first, the fact that forest plantations are located away from the urban areas where empowerment discourses have been concentrated, in rural areas where problems such as unemployment and inadequate infrastructures tend to be more pressing. Hence forestry companies are strategically placed to offset some of the development challenges rural communities face, through the opportunities their operations provide. A second point of interest is that, in international environmental discourses, the idea of people and forests has gained significance, especially since the 1992 Rio Summit on Environment and Development. Local people have gained a central focus, particularly where environmental resources are concerned, and certain pro-people practices in natural resource management have since been intensified, to help local actors become more involved in the way their environments are managed. This involvement goes beyond biodiversity management; it involves other productive engagements by business in these environments, such as commercial forestry. South Africa has adopted, in varying degrees, some of these ideals as part of its restructuring and transformation efforts. Thirdly, forestry in South Africa is a test case for finding out how multiple actors with diverse objectives and values can co-exist and benefit from a single common commodity through public–private partnerships and the involvement of groups of communities.

4. METHODS OF STUDY

This study was based on a combination of in-depth interviews, group discussions and secondary sources. There were 33 in-depth interviews at SFP and SQF. These included managerial staff at the two companies, officials of community trusts allied to SFP, ordinary members of the respective communities, and black timber contractors. The interviewing was flexible, taking into account the inclination of respondents and their role and interest in the specific forest company. In both the SFP and the SQF participating communities, the author conducted six group discussions, with each group consisting of between eight and 12 people. A further seven direct interviews were conducted with government officials from the relevant Departments: Land Affairs, Water Affairs and Forestry, and Public Enterprises and Local Government. Resource points used for secondary information were Forestry South Africa, the Council for Scientific and Industrial Research, and the print media.

5. THE SFP AND SQF CASE STUDIES

The first beneficiaries of government forests, SFP and SQF, responded to the call to engage in empowerment practices in their operations by initiating a variety of pilot studies involving groups of local communities and individual black entities. SFP started mainly by transferring capital to a whole community adjacent to its operations, while SQF went the conventional route, partnering with a small black-owned business. Table 1 summarises the main characteristics of both cases.

Table 1: Background information on Singisi Forest Products (SFP) and Siyaqhubeka Forestry (SQF)

Characteristic	SFP	SQF
Location	Mainly Eastern Cape and Kabuli–Natal midlands	Northern Kabuli–Natal
Plantation area	60 000 ha	26 783 ha
Nature of plantations	Mostly eucalyptus	Pine and eucalyptus
Sale price	R45 million	R100 million
Year of sale	2000	2001
Parent company	Hans Merensky Holdings	Mondi Ltd.
Empowerment partners	Singilanga Directorate Trust (SDT)	Imbokodvo Lemabalabala (IL)
Composition of partners	SDT represents all 16 identified ‘communities’ in proximity to the plantations	IL comprises a black business entity with several traditional councils as partners
Representation at board of directors	A reigning director of SDT represents the community at board meetings by one vote	The director of IL is also a voting member of SQF board of directors
Partner's shareholding	10 per cent	10 per cent
Roles of partners	SDT represents local communities and acts as a link between SFP and same communities	IL manages Fukamela Incubation Scheme, a subsidiary company of SQF
Responsibility for daily management	SFP	SQF
Community engagement	Through SDT	Through local committees
Annual rental^a to state	R6 million	Unavailable
Note: ^aThe forestland in question was leased to the companies while the forestry assets on them were actually sold. The state decided on leases rather than outright sale because of numerous outstanding land claims by communities and individuals.

4.1 Empowerment in context: views from the case studies

Both companies initiated the business partnerships to boost their empowerment credentials as required by legislation and to respond to the government's call for transformation.

Although the government offered suggestions as to what the empowerment process1 should entail and had certain priorities, these did not necessarily match the priorities of the target beneficiaries in the case studies. This was one respondent's opinion:

Our understanding of empowerment is that the process should be able to create opportunities, especially jobs. We live in a remote area, people are not enlightened, and they don't jump and take up business opportunities when they arise. They need certain support structures, and they need to be pushed. There may be only two enlightened people around here and you find that opportunities rotate amongst these same people, just like the ‘big five’ often talked about at the national level. People here wait for something or someone to wake them up. Government should introduce some rollout programme or some tools for the rural areas to meet the local challenges. The BEE elite approach has not worked in the rural areas. The rural people have problems of language and can't read or write English. English is a ‘murder’ language here in rural Zululand. Even provincial reports are written in English. You don't get things written in Zulu. I have seen articles and plans on BEE for KwaZulu–Natal written in English but most of the people here are not educated.

Respondents in the community understood or prioritised elements of empowerment differently, mainly deriving meaning from what they perceived as their urgent needs at the local level. They mostly emphasised jobs and called for greater opportunities to improve their lives and livelihoods. At the same time, they reported that they were not always able to respond to the available opportunities because many were incapacitated by an inadequate education and a lack of business skills. This view suggests that, if it is to be meaningful, an attempt at empowerment must be accompanied or preceded by the transfer of skills and the development of human capital.

Despite these challenges, respondents in these forest areas were unanimous in their belief that they were entitled to empowerment processes and especially involving the forest companies. This was by virtue of their proximity to the forest assets and their history in relation to the land on which the assets are located. These sentiments were also based on the customary nature of land tenure in these rural areas, and the fact that some of the black communities and individuals had been dispossessed by apartheid and now felt the need for redress and justice. Hence empowerment was seen as an issue of rights and social justice.

Although at the time of the research SFP was attempting to engage communities on ways of improving projects, communication and outreach activities, some community members were anxious and disappointed. This was mostly because of the pace of response from SFP and the promises that they had made to the community. A community trustee living near one of SFP's sawmills at Weza recalled:

Because we recognise our role in dealing with our local problems, we approached SFP for some assistance. Our major problem is the unemployed youth and because we are the closest community to the company, we felt that we should have more access and be given preference when jobs arose. The problem SFP indicated was that these youths were not skilled to the level that they would be taken on by SFP. So we asked them to provide us with certain avenues that we could use to train and impart skills to those who need them so that they became employable. SFP said they would organise workshops and that our youth would get preference, but these have not materialised.

In targeting communities for collective empowerment, SFP faced more complex challenges. These included problems posed by the vastness of the project area, which made outreach and communication difficult. The attempts by SFP to cluster groups of communities into organised units for business created a new definition of ‘community’ that did not match these communities' own understanding. The disregard for existing structures undermined social networks that SFP could have adapted for the forest business. One respondent explained the logistical issues that faced the community Trust and its leadership thus:

The problem we faced in our area [Umzimkhulu] alone was that the community is so big and we do not necessarily know each other. So selecting a representative to the Trust for instance, was a difficult exercise given that only a few would represent us. In the end, the persons who were elected are not necessarily known to most of us. The people here do not know the Trust Chairperson very well and hence the problem of trust arises. This meant that we had to do a lot of convincing and explaining and that took a lot of time. It also involved holding several meetings to find clarity on such issues.

As the area where SFP was operating is vast, part of the problem was logistical. It was easier for the business to deal with as few representative Trusts as possible, but this meant ignoring the geographic, cultural and social differences that characterise the region. However, without a leadership the majority could trust, it was difficult to decide on collective ideas even after the deal had been signed with SFP and the first batch of the annual dividends had been disbursed to the various communities. Hence ventures that targeted selected individuals instead of whole entities would show more potential, especially when they were designed to produce a multiplier effect to other interested individuals.

The Singilanga Directorate Trust (SDT), the umbrella community Trust, was itself also confronted by challenges of organisation, unity and effective representation of their members' interests at SFP. This again was due to the haphazard nature of SFP's definition of their community for the purposes of partnering, which conflicted with the target community's own understanding of themselves, their relationships, their networks and their boundaries. Besides this, the Trust was faced with an acute problem of capacity, in terms of a shortage of the skills needed for contributing as effective partners in business. Although the technical side of the forest business was SFP's responsibility, the SDT was expected to second one member annually to the board of directors. Hence it was necessary to second an official of the Trust who would not only grasp the language of the board, but also hold them to account while promoting the interests of the rest of community.

The Trust was endowed with specific responsibilities not only to act on behalf of the community by promoting their interests to the SFP board of directors, but also to ensure that the community was prioritised in terms of job opportunities that came up at SFP. They would also facilitate ideas for investing dividends to the interest of beneficiaries. The SDT would act as a link between SFP and the local community by communicating SFP's ideas and intentions to the beneficiaries, and vice versa.

Part of the community's difficulty in organising was attributed to a lack of prior experience in doing business together. Some local individuals saw their own lack of experience in collective organising as part of the problem that undermined their efforts to engage SFP. One particular respondent noted that their history of organising locally, especially when it came to running small enterprises, had been dismal; motivation to join the SDT as a partner to SFP was quite low as a result. He reported:

Some people in my area [Ngujini village] had attempted a candle-making project before. They had a market as the stores were ready to buy the products but the project was not successful due to misunderstanding amongst members.

In terms of benefits, SFP's collective approach to empowerment offers very low returns, especially given the overall value of their shareholding at 10 per cent – and these are even lower when the dividends have to be further subdivided across the whole of the target community. In the financial year ending 2004, for instance, the SDT dividends amounted to R470 000 before their loan repayment to SFP. Initial calculations showed that, of the total final amount of R423 000, some communities would get as little as R1000, a sum that would make little, if no difference to them. Collective empowerment in this case comes across as a symbolic undertaking to emphasise the political and moral imperatives of equity and social justice. It does not have the potential to make a significant economic difference to the subscribed communities. Alternative voices expressed the opinion that more emphasis should be placed on procurement activities that had bigger returns than on ownership. One respondent with roots in the neighbouring community and also an SFP employee stated:

Real impact would be more at the level of engaging in businesses that are created through tapping into the company's outsourcing activities, transport, harvesting and silvicultural contracts. If you look at SFP, we are looking at an average of not less than R20 million per annum that goes into outsourcing and currently these contracts are 70 per cent owned by white businesses. Our challenge now is how to engage our communities meaningfully.

The idea of ownership or having stakes in new or existing business appeared to be more appealing and lucrative on the surface, but such transactions did not always bring significant benefits, especially when low in value and spread across many beneficiaries, like those designed by SFP. There were larger monetary returns to be made in the micro-businesses and spin-offs that emanated from forestry activities and services. At SFP, the value of the community's shareholding at R3.2 million pales in comparison with the annual value of R20 million the company spent on outsourcing alone. The outsourcing side of business, rather than making people passive shareholders in the company, required active participation in the running of the ventures. This was good for skills acquisition and their transfer, and had the potential to reduce unemployment in the study areas. Constraining factors to outsourcing as a fast vehicle for empowerment were that many of the outsourced services and activities required a high capital and skills outlay at start-up; resources not often immediately available to new entrants to the forestry business.

Hence SFP defined empowerment efforts beyond the issue of community ownership and also paid attention to promoting small local businesses related to forestry. They did this mainly by mentoring individual entrepreneurs with roots at the local level and helping them access capital. The following section describes some of the pilot ideas established under the mentorship of SFP.

5. EMPOWERMENT CONTRACT MODELS

5.1 The SFP Dargle scheme

Part of SFP's forest assets is located at Dargle in the KwaZulu–Natal midlands. The plantations occupy over 4000 hectares. SFP decided to outsource the management of these stand-alone assets to two former black employees who were interested in becoming forest entrepreneurs. They awarded them a 5-year management contract for silviculture and harvesting activities. While the two managers were supervisors under SFP and had a vast combined hands-on experience, they had to be mentored on other aspects of management and business skills. The company therefore also engaged the services of a business consultant responsible for the technical aspects of the business such as ensuring compliance with state laws governing labour and the remittance of taxes, and so on. In this mentorship programme, the new entrepreneurs acquired bank loans to finance the purchase of equipment needed for timber harvesting, such as weighting belts and trucks, while SFP also provided other equipment for start-up.

Within 9 months of the new management, the Dargle operation was showing much promise and had more than doubled its number of employees, from 35 to 77. Although the company was small and new, the employees were remunerated on the same level as when the assets were under SFP and the business managed to retain profitability as well. This was the reverse of the trend for privatisation processes to be associated with mandatory lay-offs.

A significant outcome of the Dargle project has been its multiplier effect. The employees, who are mostly wage earners, are encouraged to buy into the enterprise – and the new management passes on the skills they themselves have gained on the job and from mentors. Although this initiative is quite small scale, it has potential for success as a model of empowerment in the forestry enterprise.

5.2 The SFP owner-drivers' scheme

As an entrepreneurial initiative, the owner-drivers' scheme is similar to the Dargle project. Its main activity is the purchase of trucks and the transportation of raw timber from the plantations to the sawmills. The scheme targets individual drivers who have been in the employ of SFP. The company facilitates the purchase of the new trucks through guaranteed bank loans, and also offers timber transportation contracts in advance. Selected drivers are linked up with an experienced business manager to help run the enterprise. In 2004, at the time of this research, SFP had already offered six contracts to employees and facilitated the purchase of six new trucks. By 2006, SFP reported that this number had grown to 18 trucks and a similar number of contracts. As in the Dargle case, these contract holders are expected to grow the business and create opportunities for other needy individuals from within their communities.

The Dargle and owner-drivers' scheme projects were much faster to conceptualise and roll out than the projects for collective ownership that involved organising surrounding communities as part-owners of the forest resource. In both approaches, however, the problem was not so much how to acquire financial capital for the projects as how to find people with the relevant knowledge and skills to manage the enterprise, and how to organise the communities adequately for business. The individual approach to facilitating forest enterprise, although requiring input into skills development, is similar to conventional business outsourcing practices, unlike the collective approach that involves whole communities, hence private companies were more comfortable with adapting such approaches. A significant difference between these approaches is the allocation of risk. In the community approach to empowerment, SFP guaranteed the shareholding and no financial risks were passed on to the SDT, while the individual enterprises bear the usual risks that are associated with any business, whether in loan repayments or in sustaining capital equipments.

5.3 The SQF Fukamela incubation scheme

Fukamela, derived from the Zulu word meaning ‘to incubate’, targets potential contractors from the forest area and trains them in general business and specific forest contracting skills. The aim is to diversify the procurement business that emanates from SQF and the parent company, Mondi. The development process involves learning about basic financial management and issues of compliance with the relevant governing legislation, such as labour laws and taxation.

Three issues motivated the founding of Fukamela. First, there was a lack of black skills that could compete for the downstream forest entrepreneurial opportunities. Second, there had been failure and reluctance in existing contracting businesses to transfer skills to their employees. Third, Imbokodvo Lemabalabala, the partner of SQF, wanted to make a direct contribution to communities in their area of operation.

After negotiating for 20 per cent of the SQF forestry contracts, Fukamela designed a model for training and mentoring. The training opportunities were advertised locally and applicants were taken in for an intensive inductive session. After the training, they were awarded the contracts, in which mentoring continues for 2–3 years. Beyond 3 years, the trainees were expected to have acquired significant business knowledge and skills to manage contracts on their own and to be able to secure bigger contracts without the help of Fukamela. Although Fukamela started on a small scale, they were banking on a knock-on return where skilled beneficiaries would pass these on to other interested individuals from the community.

By 2004, although Fukamela did not yet have the capacity to deliver fully on the 20 per cent of contracting jobs set aside for them by SQF, three contractors had undergone training and were in the process of creating hundreds of casual jobs in their operations. Fukamela secures financing from various credit institutions. In 2005, the company received funding from the Risk Capital Facility of South Africa's Industrial Development Corporation to the tune of R19.1 million and a further R4.3 million from the Land Bank. The latter went into Fukamela's Niche Trust Fund. For a subsequent 5 years, the Industrial Development Corporation would disburse a further R1.6 million from its Transport Business Unit (Business Report, 2005). Table 2 summarises the three schemes.

Table 2: Summary of the empowerment contract models

	SFP Dargle scheme	SFP owner-drivers' scheme	SQF Fukamela incubation scheme
Nature of assets	4000 ha of plantations	New transportation trucks	Varied
Nature of contracts	Silviculture and timber harvesting	Transportation	Silviculture, harvesting and transportation
Beneficiaries	Two ex-SFP employees	Drivers previously employed at SFP	Individuals from the local communities
Support and incentives	Training, mentorship and equipment	New trucks, secured five-year contracts, loan guarantees	Training and mentorship, secured contracts, finance for equipments
Achievements (2004)	Increased casual employment opportunities. Business skills transfer to the new contractors	Six new trucks and transport contracts awarded	Three forest contractors trained and hundreds of casual jobs created through their operations
Note: SFP, Singisi Forest Products; SQF, Siyaqhubeka Forestry.

6. DISCUSSION AND CONCLUSION

Recent developments in South Africa's forest sector, as in other economic sectors nationally, revolve around the question of changing the face of business to reflect the transformation imperatives in the post-apartheid period. The compliance of the new private actors was guaranteed as part of the forest sale conditions. The tensions are largely domestic and are a response to the nature of policy instruments applied to create a balance across the economic divide. The most talked-about policy instrument is Black Economic Empowerment (Republic of South Africa, 2003).

As the three employment contract models in the two case studies demonstrate, empowerment is equated to the transfer of capital. Power as conventionally understood within the broader South African context has always denoted dominance and control, and has therefore been prone to cause conflict. It has mainly been understood to refer to the possession of or access to economic capital, which includes, among other things, the accumulation of financial capital and various types of wealth and assets such as land, productive entities and shares in companies.

The alternative vision of ‘power to’ portrays a kind of power that is more positive and able to change people's social and economic capacities. This version of power can be equated with the accumulation of human capital, or the acquisition of productive resources. It can be at an individual or collective level, and includes assets such as education, skills, corporative capacities and self-efficacy.

The empowerment story in South Africa's forestry case combines efforts that advance both notions of power. Schemes that build the skills and entrepreneurial development of individuals and communities are examples of these. On the other hand, the transfer of ownership, whether to individuals or to the collective, is aimed at balancing the skewed distribution of economic wealth and power.

The case studies also reveal the risk that comes with capital transfer could be an important element to consider in empowerment processes. It is evident that where individual entities are specifically given options for entrepreneurship, the schemes tend to be more successful. The Fukamela incubation scheme is one alternative model of employment. Imbokodvo Lemabalabala grabbed the opportunity to enter the forestry business and they looked for financing and took responsibility for the risks involved. The downside of this type of empowerment is that only the better qualified in the community are able to take up such business opportunities, while the poorer and less skilled among the target groups are locked out. The elite often then act as a smokescreen for empowerment while they actually become agents of disempowerment. In instances like this, the needy, who are the main target of empowerment, are again locked out and dominated – only this time by individuals in their own communities.

The second alternative model of empowerment involves capital transfer but with reduced risk. SFP's owner-drivers' scheme, the Dargle project and SQF's Fukamela are good examples. These initiatives are accessible to individuals and entities from the community who have a basic self-efficacy and education, and who are interested in a business opportunity. The forest companies lower the risks in these enterprises through loan guarantees, a longer grace period for repayment, and low interest rates. Moreover, access to capital is improved by providing the necessary mentoring and training. This type of empowerment is able to reach the poorer sections of society who had no prior avenues to capital and have few skills, but who have an entrepreneurial spirit. It also has the capacity for skills transfer and it concurrently diffuses power to people through capital transfer. In addition, there is a high potential for more opportunities or spin-offs for other interested individuals from the communities.

The third model of empowerment, which seems less effective, involves access to capital but with a very low or zero degree of risk attached. This type of capital transfer is manifested in the case of SFP and its collective partner, the SDT. The shareholding of the SDT was funded by SFP, and all community members within its defined operation area became beneficiaries. Because there are no risks involved for members, the motivation for making it work was low. The communities are recipients of passive capital in the form of company shares, but they are without significant management responsibility, and they are not targeted for skills transfer or the necessary training. Although this model generates benefits in the form of annual dividends when the company makes a profit and the communities can use these to improve local amenities, the concept is narrow and does not address the real problems of unemployment, low skills and lack of entrepreneurial development.

In conclusion, it is evident that power and capital transfer in the forest case studies have worked better and shown more potential when individual entrepreneurs are directly targeted. This is not to say that collective empowerment is bound to fail, but that its design could perhaps take in some of the elements that make the individual strategy work better. One key ingredient, as highlighted, is the necessity to extend not only economic capital but some degree of risk as well. Within these processes, the transfer of skills is also necessary for the long-term survival of the initiatives. For the private sector it is no longer business as usual, now that they find themselves at the centre of these processes, as part of the solution to the country's developmental challenges.

Notes

¹Empowerment as defined in South Africa's Black Economic Empowerment Act (Republic of South Africa, 2003) targets certain areas for action; these include ownership, management and control of productive assets by black people as well as by collective black entities such as communities, workers and cooperatives. It focuses on improving human resources and skills and ensuring employment equity in all occupational categories. It also calls for access to procurement and improving investment in enterprises managed or owned by black people.