Study on the implications of a declaration of multiple operators under art 2 of the Convention (Agenda item 5) Won-ja, Lee – Coordinator «Treaty Obligations and Regulatory Affairs Programme» (DER) CA C 1 Interconnectivity Project Group 29 April 2011

Historical Background – Resolution C 29/1994 In view of the emergence in an increasing number of countries of the situation in which governmental oversight of postal services is being separated from the actual commercial and operational management of postal services, with the body responsible for the former often called the “regulator” and the body responsible for the latter often called the “public operator”, Considering the circumstance in which a member country may choose to designate more than one entity, public or private, as an operator to be responsible for fulfilling obligations arising from adherence to the Convention and Agreements, Decides that, in the circumstances in which a government formally designates more than one entity to be responsible for fulfilling its obligations arising from adherence to the Convention and Agreements, each such entity may be represented at meetings of the Union’s bodies considering services for which it is responsible.

Historical Background – Article 2 of the Bucharest Convention Designation of the entity or entities responsible for fulfilling the obligations arising from adherence to the Convention “Within six months of the end of Congress, member countries shall also provide the International Bureau with the name and address of the operator or operators officially designated to operate postal services and to fulfil the obligations arising from the Acts of the Union on its territory.” Article 2 establishes the legal link between the international obligations of UPU member countries under the Acts and their designated operators

What are the fundamental obligations of UPU member countries arising from adherence to the Convention? Article 12 –Member countries shall ensure that their designated operators accept, handle, convey and deliver letter-post items up to 2 kilogrammes; –Member countries shall also ensure that their designated operators accept, handle, convey and deliver postal parcels up to 20 kilogrammes, either as laid down in the Convention, or, in the case of outward parcels and after bilateral agreement, by any other means which is more advantageous to their customer. Article 13.1 establishes the mandatory supplementary services, of which member countries shall ensure the provision.

Designation of the operator or operators by member countries 190 member countries notified the International Bureau of their entity or entities responsible for fulfilling the obligations arising from adherence to the Convention. –180 member countries notified a “single” operator 10 member countries have a special situation: –Bosnia and Herzegovina, China, Denmark/Sweden, France, Great Britain, Kazakhstan, Mozambique, Netherlands, Curacao and St Maarten.

Case 1: China, France, Great Britain Multiple designated operators for different geographic territories in the country, with distinct ISO country code for each territory –China: China Post Group, Hong Kong Post, Macao Post –France: La Poste, Wallis and Futuna-Posts and Telecommunications Service –Great Britain: Royal Mail Group Plc, Gibraltar Change Management LTD. This is a classical case which has no particular problem. In France, “Chronopost” (one of the subsidiaries of La Poste) provides the EMS service. However Chronopost is not a designated operator. –It is not entitled to be a member of EMS Cooperative; –It is not entitled to register its office of exchange as IMPC for the time being.

Case 2: Mozambique Since September 2010, the National Postal Corporation of Mozambique has set up a company with CTT Correios de Portugal in order to provide EMS service, i.e. Correio Expresso de Moçambique (cf. IB circular 204/2010) The Ministry notified the IB of Correio Expresso de Moçambique as its second designated operator to provide EMS service. –Two designated operators using the same ISO code and without competition. No particular problem created. - Different situation from “Chronopost” -

Case 3: Bosnia and Herzegovina Three designated operators according to the different geographic regions in the country, since 2005; –BH Post, Sarajevo –Croatian Post, Mostar –Srpske Post, Baja Luka This gave rise to a number of concerns in postal operations, particularly in relation to S34 (IMPC) and S10(Item identifier) –Difficult for other DOs to identify the sending DO and the treatment of undeliverable items. Under one ISO code “BA”

Case 3: Bosnia and Herzegovina With a view to facilitating the sound mail exchange between these three designated operators in Bosnia and Herzegovina and other UPU designated operators, the IB has found an “interim” solution using special user assigned ISO codes for: –Croatian Post, Mostar IMPC code: QNOMOA Operator code:QNA –Srpske Post (Baja Luka); IMPC code: QMBNXA Operator code:QMA

Case 4: Kazakhstan Two designated operators using the same ISO country code and competing with each other in one segment of service, i.e. parcels: –JSC Kazapost – Universal postal service provider –Janzen Express Janzen Express was one of the private operators which were registered as IMPCs before the POC and Congress temporarily suspended the registration of IMPC codes for private operators in 2006 and 2008 respectively. In October 2010, Kazakhstan designated “Janzen Express” as its second DO.

Case 4: Kazakhstan Therefore these two designated operators have very similar IMPC codes. –JSC Kazapost: KZASTC –Janzen Express: KZASTD The Kazakhstan case gives rise to a number of operational, technical and logistical concerns: –Unknown how Janzen Express exchanges parcels with other UPU designated operators; –Using the same ISO code with JSC Kazapost would create the similar problems as those problems created by ETOEs (billing, treatment of undeliverable, etc.) As a number of UPU technical standards are based on the ISO code, DOs in the destination countries would be required to pay more careful attention to identify the sending operators in Kazakhstan.

These are UPU technical standards which are based on the ISO country code. There is a need to study if they are designed to “easily accommodate” the multiple operators’ situation in one country.

Case 5: Denmark and Sweden Denmark and Sweden had designated respectively one operator as: –“Post Danmark A/S –“Posten AB” This is a new case. For the time being, each country keeps its designated operator’s name as it used to be. Possible impact is unknown yet. These two operators have been merged and became one company

Case 6: Curacao and St. Maarten, and the Dutch Caribbean Due to the institutional reform made in the Kingdom of the Netherlands, the Netherlands Antilles ceased existing. The former “Netherland Antilles and Aruba” has become “Aruba, Curacao and St. Maarten”. As a result, Bonaire, St Eustatius and Saba, which were part of the former Netherlands Antilles, became the Dutch Caribbean belonging to the Netherlands. However, the Niuwe Post is still designated to provide postal service for the five islands, Curacao, St. Maarten, Bonaire, St Eustatius and Saba. “One operator to serve different territories.”

Case 6: Curacao and St. Maarten, and the Dutch Caribbean ISO codes will be changed. Therefore, IMPC and other standards would accordingly be required to change. It gives rise to a number of questions, including questions concerning terminal dues, i.e. the country classifications of these islands. Eventually, it would also be necessary to clarify the situation concerning the issuance of the postage stamps, etc.

Case 7: A number of islands, which are part of territories of UPU member countries, have their own postal operator but not officially designated as an entity under article 2 of the Convention There are lack of clarity in relation to the UPU activities where the membership is reserved for designated operators or where the license to use UPU developed mail management system is reserved for designated operators only.

UPU Mail Operational System During the whole UPU history, UPU mail exchange system has been developed under the basic concept “One country, one operator”. With changing postal market policy in UPU member countries, particularly with their diversity, UPU member countries need to understand the possible impact on the current mail exchange systems under the Acts with a view to developing a workable and sustainable solutions for the sound and equitable international mail exchange. C 63/2008 instructed the CA to conduct a study on, among other issues, the implication of a declaration of multiple operators through article 2 of the Convention.

Conclusion With the endorsement of the Interconnectivity Project Group, the International Bureau proposes; –to conduct a study through an external consultant on the implications of the existence of multiple designated operators in one country to the international mail exchanges under the UPU Acts and; –to present the results of the study to the Interconnectivity Project Group at its next meeting in October-November 2011.

Thank you for your attention and welcome your comments and ideas on this issue!