United Nations Statistics Division CPC Ver.2 Main changes

2 CPC revision Main objectives:Main objectives: Keep main structure unchangedKeep main structure unchanged Review scope of CPCReview scope of CPC Sectoral review for servicesSectoral review for services Focus on products that are outputs of revised / new ISIC industriesFocus on products that are outputs of revised / new ISIC industries Service productsService products IT productsIT products OriginalsOriginals Review lower-level structure for analytical usefulnessReview lower-level structure for analytical usefulness

3 CPC structure changes Top structure unchangedTop structure unchanged Lower level restructuring in some areasLower level restructuring in some areas Addition of detailAddition of detail ScopeScope Assets; by-productsAssets; by-products Goods and servicesGoods and services

4 CPC structure changes 0Agriculture, forestry and fishery products0Agriculture, forestry and fishery products DetailDetail 1Ores and minerals; electricity, gas and water1Ores and minerals; electricity, gas and water 2Food products, beverages and tobacco; textiles, apparel and leather products2Food products, beverages and tobacco; textiles, apparel and leather products DetailDetail

5 CPC structure changes 3Other transportable goods, except metal products, machinery and equipment3Other transportable goods, except metal products, machinery and equipment Published products (books etc.)Published products (books etc.) 4Metal products, machinery and equipment4Metal products, machinery and equipment Computer-related productsComputer-related products General issue in section 0-4:General issue in section 0-4: Problems with HS linkProblems with HS link

6 CPC structure changes 5Constructions and construction services5Constructions and construction services 6Distributive trade services; accommodation, food and beverage serving services; transport services; and utilities distribution services6Distributive trade services; accommodation, food and beverage serving services; transport services; and utilities distribution services Restructuring of transport servicesRestructuring of transport services 7Financial and related services; real estate services; and rental and leasing services7Financial and related services; real estate services; and rental and leasing services New detailNew detail

7 CPC structure changes 8Business and production services8Business and production services New detail in divisions 83, 84, 85New detail in divisions 83, 84, 85 9Community, social and personal services9Community, social and personal services Detail (health, waste management, audio- visual)Detail (health, waste management, audio- visual)

CPC Ver.2 Changes for agriculture and food products

9 History In previous version of CPC:In previous version of CPC: Section 0 – Agriculture, forestry and fishery productsSection 0 – Agriculture, forestry and fishery products Section 2 – Food products, beverages and tobacco; textiles, apparel and leather productsSection 2 – Food products, beverages and tobacco; textiles, apparel and leather products Here: consider only Divisions 21-25Here: consider only Divisions Major complaint by majority of countries, esp. developing countries:Major complaint by majority of countries, esp. developing countries: Insufficient detail for agricultural productsInsufficient detail for agricultural products

10 History (2) Goods in the CPC 1.1 and earlier were defined in terms of the Harmonized SystemGoods in the CPC 1.1 and earlier were defined in terms of the Harmonized System This limits the detail that is possible in CPCThis limits the detail that is possible in CPC Unprocessed agricultural products are not heavily traded internationallyUnprocessed agricultural products are not heavily traded internationally Processing is done locallyProcessing is done locally

11 History (3) Example for products that were not recognized in HS:Example for products that were not recognized in HS: Sugar caneSugar cane 12.12Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human consumption, not elsewhere specified or included Seaweeds and other algae -Other : Sugar beet Other

12 History (4) The limitation of detail has made the CPC less useful for application in agricultureThe limitation of detail has made the CPC less useful for application in agriculture For CPC Ver.2, the FAO was consulted to advise on necessary detailFor CPC Ver.2, the FAO was consulted to advise on necessary detail This has resulted in various drafts that were subsequently refinedThis has resulted in various drafts that were subsequently refined

13 New detail CPC Ver1.1 CPC Ver.2 Agricultural products Divisions Divisions44 Groups Groups1719 Classes Classes6685 Subclasses Subclasses83208 Food products Divisions Divisions59 Groups Groups2323 Classes Classes8793 Subclasses Subclasses111229

14 New Detail (2) Substantial increase at lowest level (subclasses)Substantial increase at lowest level (subclasses) Examples:Examples: For agriculture:For agriculture: Recognition of more types of plants, animalsRecognition of more types of plants, animals Separation of raw from processed productsSeparation of raw from processed products For food products:For food products: Separation of meat by type of animalSeparation of meat by type of animal

15 New detail (3) Some of the changes make CPC categories more applicable to individual regionsSome of the changes make CPC categories more applicable to individual regions E.g. tropical fruits, sheep, goat, camelE.g. tropical fruits, sheep, goat, camel Some changes are relevant to policy interestsSome changes are relevant to policy interests E.g. BSE (mad cow disease)E.g. BSE (mad cow disease)

16 CPC-HS link How is the CPC-HS link affected by this?How is the CPC-HS link affected by this? Many CPC subclasses now refer to parts of HS codes onlyMany CPC subclasses now refer to parts of HS codes only 91 in Section 091 in Section in Section 2102 in Section 2 Often aligned with HS at class levelOften aligned with HS at class level Explicit explanatory notes are provided in these casesExplicit explanatory notes are provided in these cases This newly created detail has also been submitted as proposals for the next HS revisionThis newly created detail has also been submitted as proposals for the next HS revision If accepted, alignment between CPC and HS will improveIf accepted, alignment between CPC and HS will improve

CPC Ver.2 Changes in CPC services categories

18 History CPC is the reference classification for servicesCPC is the reference classification for services Other classifications that use services base their definitions on the CPCOther classifications that use services base their definitions on the CPC Examples:Examples: List of tourism characteristics productsList of tourism characteristics products Extended Balance of Payments Services Classifications (EBOPS)Extended Balance of Payments Services Classifications (EBOPS)

19 CPC Services As part of the CPC revision process, some services have been reviewed in detailAs part of the CPC revision process, some services have been reviewed in detail The goal has always been to:The goal has always been to: Provide a complete coverage of outputsProvide a complete coverage of outputs Reflect new servicesReflect new services Provide better (more precise) definitions of servicesProvide better (more precise) definitions of services Define services in a way that facilitates reporting by businessesDefine services in a way that facilitates reporting by businesses Group services in a way that makes them more suitable for analysisGroup services in a way that makes them more suitable for analysis

20 CPC Services (2) Although the CPC does not explicitly define what services are, they have been logically grouped in Sections 5-9Although the CPC does not explicitly define what services are, they have been logically grouped in Sections 5-9 Note: there are also some products in 5-9 that are not services!Note: there are also some products in 5-9 that are not services! Definition of services is done in the SNA!Definition of services is done in the SNA!

21 CPC Services (3) Specific divisions that have been reviewed in this revision:Specific divisions that have been reviewed in this revision: Transportation services64-67 Transportation services 71 - Financial services71 - Financial services 84 – Telecommunications, broadcasting and information supply services84 – Telecommunications, broadcasting and information supply services 88 - Manufacturing services88 - Manufacturing services 93 - Human health services93 - Human health services 94 - Waste treatment services (etc.)94 - Waste treatment services (etc.)

22 CPC Services (4) At lower levels, some areas have also been reorganizedAt lower levels, some areas have also been reorganized For example:For example: 851 Employment services851 Employment services To reflect changes in ISICTo reflect changes in ISIC 832/833 Architecture and engineering services832/833 Architecture and engineering services To reflect reporting practices by businessesTo reflect reporting practices by businesses 855 Reservation services (etc.)855 Reservation services (etc.) To reflect changes in ISICTo reflect changes in ISIC 961 Audio-visual and related services961 Audio-visual and related services To reflect changes in ISICTo reflect changes in ISIC

23 Human health services Detail has been changed to reflect new detail introduced in ISICDetail has been changed to reflect new detail introduced in ISIC Veterinary services have been moved outVeterinary services have been moved out New detailed services respond to needs for analysis, e.g. in the system of Health AccountsNew detailed services respond to needs for analysis, e.g. in the system of Health Accounts

24 Financial services CPC Versions 1.0 and 1.1 included an annex with a suggested alternate detail for financial servicesCPC Versions 1.0 and 1.1 included an annex with a suggested alternate detail for financial services More detailed than “regular” division 71More detailed than “regular” division 71 This alternate detail has now been incorporated into the regular CPC structureThis alternate detail has now been incorporated into the regular CPC structure Eliminates need for an annexEliminates need for an annex In addition, some small detail was added in response to special needs (e.g. travel insurance)In addition, some small detail was added in response to special needs (e.g. travel insurance)

25 Telecommunications services etc. Revision mostly affects products related to the on-line distribution of contentRevision mostly affects products related to the on-line distribution of content Part of review of ICT and content product groupingsPart of review of ICT and content product groupings Includes “originals” alongside services of broadcasting etc.Includes “originals” alongside services of broadcasting etc. Revises previous understanding of services for content distributionRevises previous understanding of services for content distribution

26 Transportation services Transportation services have been grouped in a way that is more useful for analysisTransportation services have been grouped in a way that is more useful for analysis Interest is primarily for passenger vs. freight transportInterest is primarily for passenger vs. freight transport Secondary, split by mode of transportSecondary, split by mode of transport In ISIC, the structure reflects the organizationIn ISIC, the structure reflects the organization Breakdown first by mode of operationBreakdown first by mode of operation

27 Transportation services (2) At lower levels of the structure:At lower levels of the structure: Within passenger transport, the breakdown is by local vs. long-distance transportWithin passenger transport, the breakdown is by local vs. long-distance transport Sightseeing transport services are recognized by mode of transportSightseeing transport services are recognized by mode of transport Passenger air transport is separated into domestic and international travelPassenger air transport is separated into domestic and international travel

28 Manufacturing services A manufacturing unit (defined in ISIC) can provide two types of output:A manufacturing unit (defined in ISIC) can provide two types of output: Good (if production is done on own account)Good (if production is done on own account) Manufacturing service (if production is done on account of others)Manufacturing service (if production is done on account of others) The CPC provides categories for bothThe CPC provides categories for both

29 Manufacturing services (2) In previous versions of the CPC, the detail of manufacturing services was limitedIn previous versions of the CPC, the detail of manufacturing services was limited Typically one service class responding to one ISIC divisionTypically one service class responding to one ISIC division In CPC Ver.2 this detail has been increasedIn CPC Ver.2 this detail has been increased There is now one CPC service category (subclass) for each ISIC Rev.4 manufacturing classThere is now one CPC service category (subclass) for each ISIC Rev.4 manufacturing class

30 Manufacturing services (3) Why are these services necessary?Why are these services necessary? They apply in the case of outsourcingThey apply in the case of outsourcing The contractor provides a service (e.g. assembly)The contractor provides a service (e.g. assembly) Contractor can not report on the value of the goods he has producedContractor can not report on the value of the goods he has produced He does not sell them on the marketHe does not sell them on the market He can only report the fee he has received from the principal for his workHe can only report the fee he has received from the principal for his work The data is also important for calculation of short term indicators (weights for indices of production)The data is also important for calculation of short term indicators (weights for indices of production)

31 Waste treatment services 94 - Sewage and waste collection, treatment and disposal and other environmental protection services94 - Sewage and waste collection, treatment and disposal and other environmental protection services CPC Ver.1.1 – 9 subclassesCPC Ver.1.1 – 9 subclasses CPC Ver.2 – 28 subclassesCPC Ver.2 – 28 subclasses New detail created to reflect changes (and more detail) in ISIC Rev.4New detail created to reflect changes (and more detail) in ISIC Rev.4

32 Waste treatment services (2) Main structure:Main structure: CodeDescription 941Sewerage, sewage treatment and septic tank cleaning services 942Waste collection services 943Waste treatment and disposal services 944Remediation services 945Sanitation and similar services 949Other environmental protection services n.e.c.

33 Waste treatment services (3) Within groups 942 and 943, a distinction is made between:Within groups 942 and 943, a distinction is made between: Services for hazardous materialsServices for hazardous materials Services for non-hazardous recyclable materialsServices for non-hazardous recyclable materials Services for other non-hazardous materialsServices for other non-hazardous materials

34 Waste treatment services (4) Structure of 942Structure of 942 CodeDescription 9421Collection services of hazardous waste 94211Collection services of hazardous medical and other biohazardous waste 94212Collection services of industrial hazardous waste (except medical and other biohazardous waste) 94219Collection services of other hazardous waste 9422Collection services of non-hazardous recyclable materials 94221Collection services of non-hazardous recyclable materials, residential 94229Collection services of non-hazardous recyclable materials, other 9423General waste collection services 94231General waste collection services, residential 94239General waste collection services, other

35 Waste treatment services (5) How is this distinction made?How is this distinction made? Exact definitions for “hazardous” will depend on countries’ laws and regulationsExact definitions for “hazardous” will depend on countries’ laws and regulations Exact list of materials considered “recyclable” will depend on country practicesExact list of materials considered “recyclable” will depend on country practices What is important here is not the type of waste collected, but whether the collection (or treatment) process is set up in a special way to reflect local concepts of “hazardous” or “recyclable”What is important here is not the type of waste collected, but whether the collection (or treatment) process is set up in a special way to reflect local concepts of “hazardous” or “recyclable”

36 Waste treatment services (6) The distinction should be made with the following considerations:The distinction should be made with the following considerations: Is the collection process set up in a special way to address hazardous material handling?Is the collection process set up in a special way to address hazardous material handling? E.g. radioactive materials, oil, batteriesE.g. radioactive materials, oil, batteries Is the collection process set up in a special way to ensure that materials are moved into a recycling process?Is the collection process set up in a special way to ensure that materials are moved into a recycling process? E.g. separate collection of paperE.g. separate collection of paper If no special procedures are used, the waste collection is “other”If no special procedures are used, the waste collection is “other”