52nd CERP Plenary Meeting

52nd CERP Plenary Meeting
Forum Discussion “UPU Regulatory challenges after the 26th UPU Congress” Madrid, 1-2 June 2017 the cerp forum Moderator: Joost Callaert, Senior Advisor at BIPT* * The opinions expressed in these slides are those of the author as the moderator of the forum and do not necessarily reflect the views of the moderator nor of BIPT

CERP Plenary Meeting – 01-02 June 2017, Madrid
Agenda Introduction of panel discussants Timing Session 1: Main outcomes of UPU Congress and key expectations for the new cycle Session 2: Further Reform of the UPU – What direction should it take and key expectations? Session 3: Integrated Renumeration Plan – What direction should it take and key expectations? Summary CERP Plenary Meeting – June 2017, Madrid

Objectives of the forum
An interactive discussion: - between the discussants on the one hand and and the CERP members and observers in the audience on the other hand. CERP Plenary Meeting – June 2017, Madrid

Introduction of panel discussants CERP Plenary Meeting – June 2017, Madrid

Panel discussants Mr. Pascal-Thierry Clivaz, Deputy Director General of the UPU's International Bureau Mr. Jean-Paul Forceville, Chairman of PostEurop Management Board / Director, European & Domestic Regulatory Affairs At La Poste Mr. Roberto Cavanna, Secretary-General of Postal Union of the Americas, Spain and Portugal (PUASP) Ms. Cristel Fiorina, Deputy Head of Unit for Postal Affairs At the French Ministry of Economics CERP Plenary Meeting – June 2017, Madrid

Timing 11.10 till 11.50 Main outcomes of UPU Congress and key expectations for the new cycle 11.50 till 12.20 Further Reform of the UPU – What direction should it take and key expectations? 12.20 till 12.30 Integrated Renumeration Plan – What direction should it take and key expectations? 12.30 till 12.35 Summary CERP Plenary Meeting – June 2017, Madrid

Session 1: Main outcomes of UPU Congress and key expectations for the new cycle CERP Plenary Meeting – June 2017, Madrid

Key outcomes of the 26th UPU Congress (1) 1. Some General Elements Excellent Organisation/Logistics Participation Grade: Less countries were present than during previous congresses, especially at the beginning of the congress Issue of quorum at the beginning of the congress to vote on constitutional issues as 2/3 of the Union members having the right to vote should be present High participation grade at the Ministerial Conference with a lot of ministers, CEOs, etc. Less proposals than previous Congresses: Less country specific proposals than previous congresses Less CA/POC resolutions regarding future of work of the union due to the introduction of the UPU work plan (integrated CA and POC work plan) Smart Paperless Congress Limited Duration of 13 Days including opening, closing ceremony and ministerial conference CERP Plenary Meeting – June 2017, Madrid

Key outcomes of the 26th UPU Congress 2. Main issues of the 26th UPU Congress UPU reform Adoption of the IPP (Integrated Product Plan) Istanbul World Postal Strategy Revised Terminal Dues system New model for postal development (new Quality Service Fund) Proposals/appeals/reservation Merging of letter post and parcel post regulations into a single regulation Budget Provident scheme Elections CA, POC, DG, VDG CERP Plenary Meeting – June 2017, Madrid

Istanbul World Postal Strategy
Goal 1: Improve the interoperability of network infrastructure Vision 2020: Innovation Integration Inclusion Goal 2: Ensure Sustainable and Modern Products Goal 3: Foster effective market sector functioning CERP Plenary Meeting – June 2017, Madrid

Revised Terminal Dues (I) For Terminal Dues and Quality of Service Fund only, all the UPU Countries will be classified in 4 Groups as from 2018 instead of 6 Groups in the current system The classification is the result of the weighting between the GNI and the Postal Development Indicators (PDIs) of each Country. CERP Plenary Meeting – June 2017, Madrid

Revised Terminal Dues (II) METHODOLOGY Different Terminal Dues rates for P/G and E Linearization between 2 Domestic Tariffs (20g & 175g) for P/G format Tilting point at 375g of the P/G linearization for E format TERMINAL DUE RATES Reference Domestic Tariffs Annual increase of Caps & Floors: Caps P/G: 3% for Group I; 6% for Groups II &III E: 3% for Group I; 9,6% for Group II and 13% for Group III Floor 2,8% for all Groups COUNTRIES IN GROUP III WILL APPLY COUNTRY-SPECIFIC RATES FROM 2018, between themselves and other target system countries in groups I and II Direct access remains mandatory for countries in group I CERP Plenary Meeting – June 2017, Madrid

Revised Terminal Dues (III) Link between Quality of Service and Terminal Dues Mandatory for Groups I, II & III Will be mandatory as from 2020 for Group IV (after the two-year period of grace) No QS Link obligation if the traffic received is below 100 tons/year Quality of Service Fund: Beneficiaries: Group IV Countries Minimum revenue of 20,000 SDR (If amount < 20,000 SDR, the billing will be in proportion to the volume sent by Groups I, II & III and not only by Group I Countries as today. Percentages Groups I & II : 10% to former Group 4 and 20% to former Group 5 Group III: 5% to former Group 4 and 20% to former Group 5 CERP Plenary Meeting – June 2017, Madrid

Revised Terminal Dues (IV) SAMPLING & FORMAT SEPARATION: New rules NEW TRANSITION SYSTEM Group IV 4.472 SDR for 2018 4.592 SDR for 2019 4.724 SDR for 2020 4.858 SDR for 2021 SUPPLEMENTARY SERVICES (per item) M Bags: rate per kg: annual increase of 2.8% CERP Plenary Meeting – June 2017, Madrid

Quality of Service Fund Proposal from the ad hoc QS Fund Status quo elements: Scope of fundable projects for inbound mail and bottom-up approach mainly for national projects New elements: Extension of scope of fundable projects to include outbound mail Transfer of unused funds but would come into effect at het earliest mid-2026 Sustainable Common Fund Mark-up of 1% on TDs (from Groups I, II & III) to Group III Countries. The amounts are paid to the Common Fund and not to any individual Country account Would come into effect in 2020 Global projects using top-down approach The Fund will be dissolved as from 1 January 2029 CERP Plenary Meeting – June 2017, Madrid

Proposals/Appeals/Reservations rejected Proposals rejected IMPC codes (US) Tracked service mandatory for Group I Countries (CN + Asian Countries) Appeals rejected Terminal dues about 375 GRAM FOR E ITEMS IPP Reservations rejected: Small Packets sent as Registered only (RU) Non-application of the new surcharges for Registered (NO) CERP Plenary Meeting – June 2017, Madrid

Questions on main outcomes of the UPU Congress and key expectations for next cycle 1 Were you satisfied with the outcome of the 26th UPU Congress? 2 What do you think is the main outcome of the 26th UPU Congress? 3 Which do you think was the best decision taken at the Congress and the worst decision taken at the Congress? 4 Which do you think are the key expectations for the new cycle? 5 Is the UPU and more specifically the UPU Congress still an instrument of the 21st century? CERP Plenary Meeting – June 2017, Madrid

Session 2: Further reform of the UPU – What direction should it take and key expectations? CERP Plenary Meeting – June 2017, Madrid

Three proposals on UPU Reform at the 26th UPU Congress Congress-Doc 38 (Reform of the Union concerning structural changes to the Union and faster decision making) + Resolution 15 (Structure and management of the work of the Council) + Resolution 16 (Midterm Congress) + More than 60 proposals to modify the Acts. CA Proposal German Proposal Resolution 11 (Management of the work of the Union - Reform of the Union) Argentina, Austria, Bulgaria, Denmark, Estonia, Finland, FYROM, Great Britain, Greece, Ireland, Island, Italy, Malta, Monaco, Netherlands, Norway, Portugal, Romania, San Marino, Sweden and United States French Proposal supported by 21 countries Resolution 25 (Management of the work of the Union - Reform of the Union) CERP Plenary Meeting – June 2017, Madrid

Adopted Proposal on UPU Reform (I)
Proposal 36 : Management of the work of the Union – Further reform of the UPU Rationale - Creation of Task Forces Proposed by Turkey, South Africa and Belgium + Supported by 10 Countries of the ad hoc Group UPU Reform of Congress Fully recognizing and appreciating the work on UPU reform accomplished by: the Council of Administration, presented in Congress–Doc 38 ("Reform of the Union. Proposals concerning structural changes to the Union and faster decision making"); Germany and France, the authors of proposals 11 and 25, both entitled “Management of the work of the Union – Reform of the Union”, which drew support from 21 countries Turkey/South Africa/Belgium CERP Plenary Meeting – June 2017, Madrid

Adopted Proposal on UPU Reform (II) Recognizing that the postal environment is undergoing profound and rapid change, meaning that the UPU needs to adapt its operations, decision making process, work methods and activities Confirming that there was a consensus at Congress on the imperative need for the Union to enhance its relevance and speed up its decision making processes, and also to ensure cost-effectiveness in view of the financial constraints and the rising expectations of member counties CERP Plenary Meeting – June 2017, Madrid

Adopted Proposal on UPU Reform (III) Bearing in mind that the UPU is an organization of an intergovernmental nature and a specialized agency of the United Nations, whose mission is to stimulate the lasting development of efficient and accessible universal postal services of quality in order to facilitate communication between the inhabitants of the world Taking into consideration the mandate of Congress resolution C 26/2012, which reaffirmed the above considerations, as well as “the need to continue to evaluate the organization, structure and running of various UPU bodies […] in order to draw a clearer distinction between their respective roles” - Standing groups may be created to address ongoing and cycle-long business; - Task forces will be given specific mandates, objectives, deliverables and timeframes, in line with the UPU strategy and business plan and relevant Congress resolutions; - Task forces will be disbanded once the assignment is completed or suspended by the councils; Participation in task forces will be open to all UPU member countries; In principle, participation of other external stakeholders may be allowed, subject to approval by the task force chair, after consultation with the chair of the council concerned and the Secretary General; Information on the task force's activities, responsiveness, mandates and progress will be made available on the UPU website; The work of task forces and standing groups will, in principle, be conducted by electronic means (e.g., teleconferences and ), between council sessions. Where necessary, they may hold physical meetings at UPU headquarters in Berne. Final deliverables will be submitted to the relevant council(s) within the time frame given, and CERP Plenary Meeting – June 2017, Madrid

Adopted Proposal on UPU Reform (IV) Stressing the need to secure the future of the Union by strengthening a consensual decision making approach as well as solidarity principles amongst member countries Noting the desire for fair geographical representation and wider participation in the work of the Union CERP Plenary Meeting – June 2017, Madrid

Adopted Proposal on UPU Reform (V) Decides to defer examination of reform issues to an Extraordinary Congress to be convened in 2018, to instruct the Council of Administration and the Postal Operations Council to apply the following principles as a basis for their respective structures and decision making processes: i. the concept of standing groups will be implemented, but they will be kept limited in number and be created to address ongoing and cycle-long business; ii. the concept of task forces, to be given specific mandates, objectives, deliverables and timeframes, in line with the Union's strategy and business plan and relevant Congress resolutions, will likewise be implemented; CERP Plenary Meeting – June 2017, Madrid

Adopted Proposal on UPU Reform (VI) task forces will be disbanded once the assignment is completed or suspended by the respective councils; participation in task forces will be open to all UPU members; in principle, participation of observers may be allowed, subject to the relevant rules of procedure of the respective councils; information on the task forces' activities, responsiveness, mandates and progress will be made available on the UPU website; vii. the work of task forces and standing groups may, in principle, be conducted by electronic means between council sessions; when necessary, they may hold physical meetings at UPU headquarters in Berne, with final deliverables to be submitted to the relevant Council within the timeframe given CERP Plenary Meeting – June 2017, Madrid

Adopted Proposal on UPU Reform (VII) that each Council shall meet twice a year, for a maximum total period of 10 working days, with the two councils meeting consecutively Also decides to establish an ad hoc group charged with studying and advising on the reform of the Union and submitting its conclusions to the Council of Administration before further consideration by the Extraordinary Congress in 2018. CERP Plenary Meeting – June 2017, Madrid

Key elements of UPU Reform (I) 1. General principles of the Congress reform proposal The UPU is an intergovernmental organization Maintaining the intergovernmental status of the UPU, where governments continue to play a key role in the affairs of the Union Representation determined by member countries and, where required, all delegates to UPU meetings are accredited by their respective governments Enhancing the role and relevance of the Union Faster decision making and efficiency Cost effectiveness CERP Plenary Meeting – June 2017, Madrid

Key elements of UPU Reform (II) 2. Brief summary of the Congress Reform Proposal Keep a separation between the governmental/regulatory and operational functions Reduction of the number of bodies (Committees and groups) Creation of Task Forces Organization of a mini-Congress at the midterm of the work cycle in 2018 Transparency Faster decision making Wider participation of external stakeholders CERP Plenary Meeting – June 2017, Madrid

CA UPU Reform Proposal (2) 3. Current Pending Issues on UPU Reform Separation between governmental and operational activities: Consensus on functional separation between Governmental/regulatory and operational issues Coordinating bodies: What is the composition/membership of the coordinating bodies? Coordinating Bodies: What is the election process for chairmanship and membership of the coordinating bodies? Pillars: What are the decisions that can be taken at the pillar/commission level? Election methodology: What is the composition of the pillars/commissions? CERP Plenary Meeting – June 2017, Madrid

Questions on UPU Reform 1 Which issues should be addressed in the second step of the UPU Reform? 2 Do you think we have mentioned all pending issues or are there still other important reform issues (e.g. financing of the Union, delegation of decision making power, review, …)? Do you have a solution for the 3 key pending issues, namely: Coordination body (bodies): Composition & Election? Pillars: What are the decisions that can be taken at the pillar/commission level? Election methodology: What is the composition of the pillars/commissions? 3 Do you think we can adopt the second step of the UPU reform during the Extraordinary Congress of UPU in Ethiopia? 4 CERP Plenary Meeting – June 2017, Madrid

Session 3: Integrated Renumeration Plan – What direction should it take and key expectations? CERP Plenary Meeting – June 2017, Madrid

Integrated Product Plan (IPP) & Integrated Remuneration Plan (IRP) Integrated Product Plan (IPP): Integration with two step Approach: Step : Implementation of classification by content (Documents or goods):  For E-format, operational split between between bulky Letters (Documents) and Small parcels (Goods). Step : Adoption of a fully integrated product portfolio  3 basic differentiation criteria related to the product offering - Non-priority: deferred with limited or no value added services - Priority: quicker with choice of value added services Premium: quickest with most value added services Integrated Remuneration Plan (IRP): No more “silos” between E-format Terminal Dues and Inward Land Rates (ILR) CERP Plenary Meeting – June 2017, Madrid

Questions on Integrated Renumeration Plan (IPP) 1 Are you satisfied with the current terminal dues system? 2 Do you think that the Product Integration & Integrated Remuneration Plan is the correct way forward? Which is the key objective of the IPP, namely: To ensure affordable and viable universal postal service; To support efficient and economically viable international postal services; Tailored and aligned to help differentiate the various UPU-regulated postal products; To support interoperability, sustainability and development. 3 4 How do you see the future of IPP or terminal dues within the UPU? CERP Plenary Meeting – June 2017, Madrid

Summary CERP Plenary Meeting – June 2017, Madrid

interactive discussion!
Thanks for the interactive discussion! CERP Plenary Meeting – June 2017, Madrid

52nd CERP Plenary Meeting

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