June 4, 2009

Excerpt: U.S. Delegation Report: Meeting of the UPU High Level Group
Bern, 12-13 July 2000

UPU Models for the Future

Jan Wright (UK), the chair of Subgroup #2, presented five potential models for a restructured UPU. These had been laid out in a discussion paper (CA HLG 2000.3-Doc 3). Before Wright could get very far with her presentation, South Africa intervened to suggest that the group make three basic assumptions about a restructured UPU: 1) the UPU would remain a technical UN agency and an intergovernmental organization, 2) the UPU would include all providers of postal services, and 3) provision of postal services is the issue -- not who provides those services.

This statement set off a series of interventions illustrating the continuing divisions within the HLG over basic issues of reform. Japan said once again that it made no sense to allow private operators, who have no universal service obligations, to be members of UPU. Barbados said it was opposed to models that could cause difficulties for universal service providers. Russia agreed with Japan, expressing doubts that inclusion of private operators could improve universal service.

Australia pointed out to Japan that the UPU would remain an intergovernmental organization, and that there was no intention of any HLG members to provide full membership in UPU for the private sector. The question is how to incorporate non-governmental stakeholders in a meaningful way, the speaker said. Australia also argued that there was excessive content in the UPU treaty. Terminal dues, it said, should not be treaty obligations but simply a contract between operators.

USDEL Southwick noted that there is room to discuss how all postal operators can be involved in UPU affairs, and he cited the UN's Economic and Social Council (ECOSOC) as having non-governmental organizations in the room during its meetings. He said the question is not whether the private sector should be involved, but the degree of involvement. There must be a mechanism, he said, to involve all those in the postal sector.

Canada said that it wanted to include within the UPU representatives of customers and employees -- all parts of civil society -- not just commercial enterprises. The Netherlands argued that postal stakeholders included far more entities than the universal service providers. It wanted to create some role for the private sector. The goal was not to replace the traditional post but to create room for others. South Africa added that the existing postal market is changing so rapidly that nothing is sacred. UPU needs to be ready to take into account any eventuality. The speaker jokingly said she would not be surprised to go home to find that the South African post had been suddenly purchased by Deutsche Post or AOL! China added that public postal administrations are not the only providers of postal services and that the UPU has to recognize that reality. The UK urged the group to engage in creative thinking. How can the private agencies help us in the UPU?

After this general discussion, the HLG moved on to review the five potential models in the discussion paper.

Model #1

Model #1 prescribed splitting the UPU into two separate organizations, one to deal with operational issues and one for policy and regulatory issues. This model was opposed by virtually all speakers. Several cited the increased cost of two organizations instead of one. Brazil said UPU could no longer debate whether to include private agencies but should focus on how to do so. However, Model #1 was not the way to go. Canada felt that the development mission of the UPU would suffer under this arrangement. Germany felt there was too little substantive work to justify a purely policy and regulatory organization. China pointed out that many countries combine operational and regulatory functions in their own national post offices and it was "premature" to put these functions in two separate organizations on the international level.

Model #2

This model would separate the regulatory and operating functions but keep them within one organization. Gunter Bohm of Germany, speaking for Deutsche Post, said he favored this model as providing a real and necessary division between operators and regulators. Australia also supported #2. It wanted separation of regulators and operators, because a result of having the two functions intermingled was that governments and the UPU Congress were constantly forced to become involved in operational issues, rather than restricting themselves to "treaty issues" as they should.

Nearly all the other speakers, however, opposed Model #2 in one way or another. Brazil said that the issue of dividing operational and regulatory issues had been resolved when the present system of two Councils was established. Canada asked how the policy organ of the UPU could support technical assistance programs if the technical personnel needed to implement these programs were housed in the operational organ. Again, concerns were raised about the cost of maintaining two separate secretariats.

Southwick of the United States said UPU already had a hybrid system, mixing regulators and operators, but that private operators needed to be included. There is much to be gained by their participation, he said, especially in LDCs. The HLG should not look for losers and winners, but should consider the possibility that inclusion of private agencies in UPU is a win/win situation for all.

Model #3

This model was based loosely on the ITU structure. It would establish a governing council that handles "treaty issues" between UPU Congresses and sets up subsidiary groups to handle specific issues.

Commentary on Model #3 was mixed, with only India expressing unambiguous support. Most countries who spoke seemed to feel the model, as described in Wright's paper, lacked sufficient detail. They found some attractive concepts in it, but the model needed more explanation of those elements that represented changes from the present structure. Morocco voiced these concerns, saying that the role of the governing council was unclear and asking, among other questions, to whom the subsidiary issue groups would report.

Model #4

This model would retain the two present Councils (Postal Operations Council, or POC) and the Council of Administration, or CA), but would draw a sharper line between their functions. From the U.S. perspective, a crucial difference between this model and the present structure is the possibility of non-governmental observers within the CA and at Congress. The idea of multinational companies participating in the POC "in their own right" (not as members of national delegations) and "on a subscription basis" is also suggested in this model.

USDEL Southwick spoke in favor of this option, saying it retained the best of the present system while opening up the organization to a wider range of stakeholders. It was evolutionary, not revolutionary, and it provided for a solid opening for regular participation of the private sector. He thought the HLG should focus on this option and elaborate as the best course of action.

An impressive range of HLG members followed, speaking in support of Model #4. Australia said the model was not its first choice but acknowledged its "good elements." Portugal, Brazil, Cuba and Russia (none of them particularly reformist in the UPU context) spoke in support of Model #4. Even Barbados offered qualified support, although it noted that the "issue of private operators is still unclear." Canada and Japan voiced concern about the participation of multilateral corporations "in their own right." Canada said no multinational corporation should participate unless nominated by a government. Japan at least seemed open to using Model #4 as the basis for discussion. Germany and the Netherlands also expressed support for this model, with Germany citing its "many positive elements" and the Netherlands urging combining Model #4 with elements of #2 and #3.

Model #5

The major innovation of Model #5 was in giving an enhanced role to the private sector Advisory Group (AG) that was created by the Beijing Congress in 1999 and has thus far held one meeting. The AG would become "almost a third Council," on a par with the CA and POC. Rather than bringing the non-governmental and private sector organizations into the existing councils, this model would elevate the AG to the status of a council.

The discussion of this model was not as clearly supportive as the response to Model #4. Morocco, South Africa and Brazil all supported a combination of Models #4 and #5, with Brazil expressing concerns that multinational corporations should not be represented on several different national delegations due to their operating presence in more than one country. South Africa expressed its opposition to separate subscription fees for organizational members of the AG, saying that developing country organizations would be unable to fund their participation.

Summary of the Models

Chair Jan Wright summarized the debate, saying that Model #1 had been generally rejected, that several countries liked elements of Model #2 and Model #3, and that she had heard much support for an amalgam of Model #4 and Model #5. She proposed that, with the assistance of interested parties, she create a narrower option paper for the October HLG meeting.