Postal ReformGuide

2019

Reasons for creating an integrated plan for postal sector modernization

Reform and modernization of the postal sector, based on postal market development, sector trends and rapid technological development.

An innovative focus on technical assistance and cooperation that meets the needs arising from the postal sector’s current environment.

A structured, systematic and integrated master plan is necessary to achieve postal sector development.

Capitalizing fully on the signifi cant work achieved in cooperation with multilateral fi nancing institutions and drawing on global expertise in formulating postal sector modernization plans.

The clear need to ensure the commitment of national authorities in supporting reform and guaranteeing the viability of postal sector development.

Integrated Postal Reformand Development Plan (IPDP) – An instrument of cooperation for postal sector modernization

Features of the IPDP approach

The commitment of the national government is required, through the ministry responsible for postal services. The solution must take account of all of the operators within the market, so that the principal problems faced by the postal sector can be resolved.

Work is carried out by a multidisciplinary national team, which is supported by experts in postal reform.

All of the national team members take part in a training programme in order to acquire the necessary knowledge of postal activities.

Various scenarios for the defi nition of a universal postal service are analyzed and proposed, including the forms of funding that would enable it to be self-sustaining.

The proposals for both the universal postal service and postal sector public policies are presented to the national authorities and other stakeholders.

One of the objectives of the UPU is to support the modernization and development of the postal sector through cooperation. To this end, it carries out various actions:

Working with governments and other sector stakeholders to give appropriate direction on postal moder¬nization and development projects.

Supporting country projects through regional development plans, the Quality of Service Fund and other similar initiatives.

Capitalizing on the UPU’s contacts and specialized knowledge to gain the support of multilateral devel¬opment institutions.

Integrating regional and national eff orts into coherent joint action.

It is the responsibility of the authorities of the country in question to implement the IPDP actions recommended to enable the sector to modernize in line with the commitments made. As a master plan, the IPDP is also an important element in mobilizing internal and external resources to fi nance the recommended activities. This guide is one of the tools developed within the framework of the IPDP methodology; it is intended as a primary reference source for supporting governments in adapting their postal sector to refl ect changing market trends.

IPDP components

Defining the universal postal service: basic, affordable, good quality postal services that the state guarantees to citizens throughout the entire country.

Public policy in the postal sector: definition of the vision and short and long-term government strategy to fulfil obligations and achieve modernization and development of the postal sector, as well as ensuring its contribution to economic growth and development of the country.

Legal framework: modernization of the legal and administrative instruments that provide the necessary conditions to guarantee that all stakeholders participate legally in national postal activities and, in particular, ensure that the rights of postal service consumers are protected.

Modernizing services and the designated operator: restructuring of the designated operator to provide more efficient and modern postal services.

IPDP CHARACTERISTICS

It is a master plan, which serves as a roadmap to guide the modernization of the sector.

It is national, taking all those involved in the national postal sector into account.

It is specific, as it is adapted to the current situation of the country’s postal sector, based on multidis-ciplinary analysis carried out by the national team comprising various government departments.

It is integrated, as it is designed to guarantee that all aspects are included, in order to ensure the short, medium and long-term development of postal activities.

It is flexible, as its methodology facilitates adaptation to each specific situation and it is designed and coordinated in conjunction with all stakeholders, each of which is able to contribute to postal sector modernization.

IPDP stages

PREPARATION. Remote contact with national authorities to ensure their commitment to the process; formation of the national team; compilation and analysis of basic data and drawing up of a detailed timetable for the process.

KNOWLEDGE BUILDING. In this first stage, the work is carried out within the country, with the principal goal of enabling all the people involved in the national discussions on developing the IPDP to acquire the necessary knowledge of postal activities and therefore ensure effective contributions.

FORMULATION. At this stage, an action plan is drawn up, covering the whole process from implementation to postal sector reform. The situation that requires reform is assessed at this stage. The actions set out in the IPDP approach will take into account the universal postal service, sector policy, the legal frame¬work, and modernization of services. The formulation stage includes production of the IPDP document that will be presented to national authorities.

PRESENTATION. This stage includes the formal presentation of the postal sector modernization plan to senior government authorities. The plan is also presented to other sector stakeholders, and in particular to the planning and public finance services that will be part of the national IPDP formulation team.

TABLE OF CONTENTS

MODULE I - Bases of postal reform 11 Introduction ......................................................................................................................... 13

1 The postal sector and national development .............................................................. 15

1.1 International postal organizations .................................................................................................................. 15 1.2 The postal environment and the need for change .................................................................................... 16 1.2.1 Brief history of the postal sector and recent challenges ..................................................................16 1.2.2 Major market trends in the postal sector .......................................................................................17 1.2.3 Major institutional trends in the postal sector ................................................................................20 1.2.4 Need for change in the postal sector .............................................................................................23 1.3 Major underlying principles and concepts relating to postal service ....................................................25 1.3.1 The postal industry ........................................................................................................................25 1.3.2 Postal services ...............................................................................................................................26 1.3.3 Government obligations ................................................................................................................27 1.3.4 Universal postal services ................................................................................................................28 1.3.5 Universal access to postal service and competition .........................................................................28 1.4 Role of the postal sector in the national development process .............................................................29 1.4.1 Communications infrastructure and postal communications...........................................................29 1.4.2 Contribution to economic and social development ........................................................................30

2 Postal sector reform ................................................................................................... 33 2.1 Characteristics of postal reform ..................................................................................................................... 33 2.1.1 Stakeholders in postal reform processes ........................................................................................33 2.1.2 Main objectives of postal reform ...................................................................................................36 2.1.3 Political conditions for postal reform ..............................................................................................38 2.1.4 Technical conditions for postal reform ...........................................................................................39 2.1.5 Unique features of reform processes in developing countries .........................................................40 2.2 Focuses and scope of postal reform processes.......................................................................................... 41 2.2.1 Legal framework for the postal sector ...........................................................................................41 2.2.2 Development of a regulatory function ...........................................................................................44 2.2.3 Development of the designated operator ......................................................................................45

3 The postal reform process ......................................................................................... 47 3.1 Key factors in the reform process ..................................................................................................................47 3.1.1 Conceptual model .........................................................................................................................47 3.1.2 Sensitizinggovernmentofficialsandbuildingpoliticalwill .............................................................49 3.1.3 Stakeholder involvement ................................................................................................................51 3.1.4 Role of the designated operator ....................................................................................................53 3.2 Design and implementation of the reform process ...................................................................................54 3.2.1 Postal reform issues .......................................................................................................................54 3.2.2 Organization of the reform process ...............................................................................................55 3.2.3 Learning from experience ..............................................................................................................56 3.3 Evaluation .............................................................................................................................................................57 3.3.1 Evaluation of the reform process ...................................................................................................58 3.3.2 Establishment of performance indicators .......................................................................................58 3.3.3 Acting on evaluation data ..............................................................................................................59

MODULE II - Universal Postal Service 61 Introduction ................................................................................................................ 63

Section I – Underlying principles of the Universal Postal Service .......................... 67

I 1 Principles of the universal postal service ................................................................. 69 I 1.1 Definition ..............................................................................................................................................................69 I 1.2 Legal precepts .....................................................................................................................................................70

I 2 The public .................................................................................................................... 71 I 2.1 Public services..................................................................................................................................................... 71 I 2.2 Government obligations ...................................................................................................................................72 I 2.3 National developmentl .....................................................................................................................................72

I 3 Universal Postal Convention ..................................................................................... 75 I 3.1 Universal Postal Service Network ..................................................................................................................75 I 3.2 Rules common to countries .............................................................................................................................75 I 3.2.1 Nature of country obligations ........................................................................................................75

I 3.2.2 Universal service and the UPU .......................................................................................................76 I 3.2.3 Universal postal service obligations under the UPU Convention......................................................76 I 3.2.4 Basic services .................................................................................................................................78 I 3.3 Action-oriented government decisions ........................................................................................................79

Section II - Determining the Universal Postal Service ............................................. 81

II 1 Implementation of the Universal Postal Service ..................................................... 83 II 1.1 Need to determine the Universal Postal Service .......................................................................................83 II 1.2 What to determine .............................................................................................................................................83 II 1.3 The decision-making process .........................................................................................................................83 II 1.3.1 Assessment of the status of nationwide postal services ..................................................................84 II 1.3.2 Decision making by the national government ................................................................................84 II 1.3.3 Décisions du congrès national ........................................................................................................84 II 1.3.4 Implementation of universal postal services and the established legal framework ..........................84

II 2 Status of nationwide postal services ........................................................................ 85 II 2.1 Nationwide geo-political and socio-economic conditions .......................................................................85 II 2.2 Status of postal services...................................................................................................................................87 II 2.2.1 Legal instruments ..........................................................................................................................87 II 2.2.2 Postal market .................................................................................................................................88 II 2.2.3 Service delivery ..............................................................................................................................91 II 2.3 Local needs and postal reform .......................................................................................................................93

II 3 Determining the universal postal services ............................................................... 95 II 3.1 Appropriate legal framework for the universal postal service ...............................................................95 II 3.2 Services ................................................................................................................................................................97 II 3.3 Service delivery conditions ..............................................................................................................................98 II 3.3.1 Access ...........................................................................................................................................99 II 3.3.2 Speed and reliability ....................................................................................................................100 II 3.3.3 Security .......................................................................................................................................101 II 3.3.4 Accountability for claims, complaints and inquiries ......................................................................101 II 3.3.5 Customer satisfaction ..................................................................................................................101 II 3.3.6 Price ............................................................................................................................................101

II 4 Postal service development ..................................................................................... 103 II 4.1 Legal mandates ................................................................................................................................................ 103 II 4.2 Development of regulations .......................................................................................................................... 103 II 4.2.1 Regulation of service delivery conditions ......................................................................................104 II 4.2.2 Development plans ......................................................................................................................104 II 4.2.3 Performance monitoring and measurement .................................................................................104 II 4.3 Operational development ..............................................................................................................................105

SectionIII-Universalpostalservicefinancing .......................................................117

III 1 Universal postal service costs .................................................................................................119 III 1.1 The importance of universal postal service financing ............................................................................ 119 III 1.2 Cost assessment criteria ................................................................................................................................. 119 III 1.3 Cost calculations ............................................................................................................................................... 121 III 1.4 Future challenges ............................................................................................................................................. 121

III2 Modesoffinancing ..................................................................................................................123 III 2.1 Factors shaping financing decisions ............................................................................................................123 III 2.2 Financing mechanisms.................................................................................................................................... 124 III 2.3 Decisions on universal postal service financing ....................................................................................... 127

MODULE III - Legal Framework of Postal Reform 131

Introduction .............................................................................................................. 133

1 General remarks about the postal sector ..............................................................................135 1.1 Public service and basic rights ...................................................................................................................... 135 1.2 Economic and social benefits ........................................................................................................................136 1.3 International commitments ...........................................................................................................................138 1.4 Regulatory environment .................................................................................................................................138

2 Regulatory aspects of the postal reform process ...................................................141 2.1 Background to the regulatory framework ..................................................................................................141 2.2 Reform of the regulatory framework .......................................................................................................... 143

3 Guidelines for developing a regulatory framework for the Post ......................... 145 3.1 General remarks ............................................................................................................................................... 145 3.1.1 Principle of minimum regulatory intervention ..............................................................................145 3.1.2 Principle of regulatory asymmetry ................................................................................................145 3.2 Structure of the postal law ............................................................................................................................146 3.3 General provisions of the postal law ...........................................................................................................146 3.4 General postal service rules .......................................................................................................................... 147 3.4.1 Postal service user rights ..............................................................................................................147 3.4.2 Obtaining postal operator status ..................................................................................................148 3.4.3 Price regulation ...........................................................................................................................148 3.5 Universal postal service rules .......................................................................................................................150 3.5.1 Concept and scope of the universal postal service........................................................................150 3.5.2 Universal postal services to be included ....................................................................................... 151 3.5.3 Conditions of universal postal service provision ............................................................................ 151 3.5.4 Universalpostalservicefinancingconditions ................................................................................153 3.5.5 Designated operator providing the universal postal service .......................................................... 155 3.6 Final provisions .................................................................................................................................................156 3.7 Developing the postal law regulations .......................................................................................................156

4 New postal regulatory functions: cost accounting ............................................... 157 4.1 Aim of the regulation on accounting obligations ..................................................................................... 157 4.2 Prerequisites for putting a cost accounting system in place ................................................................. 157 4.3 Aspects of cost accounting to be regulated ..............................................................................................158

5 Legal framework for the postal regulator ..............................................................161 5.1 Separation of the regulatory and operational functions .........................................................................161 5.2 Choosing a legal model ..................................................................................................................................162 5.2.1 Unit within a ministerial department ............................................................................................162 5.2.2 Independent regulator .................................................................................................................162 5.3 Recommendations concerning the postal regulator's independence ................................................. 163 5.4 Operating framework for the postal regulator ......................................................................................... 163 5.4.1 Attachment to a ministry .............................................................................................................163 5.4.2 Legal personality and own capital resources ................................................................................164 5.4.3 Organizational structure ..............................................................................................................164 5.4.4 Human resources .........................................................................................................................164 5.4.5 Sources of funding ......................................................................................................................165

6 Legal framework for the designated operator ...................................................... 167 6.1 Legal model ....................................................................................................................................................... 167 6.2 Operational arrangements ............................................................................................................................. 167 Annex 1 Guide to content to be included in the postal law ..................................................................................169 Annex 2 Guide to the content of the postal regulator's regulatory framework ............................................... 170 Annex 3 Recommendations concerning the operational independence of the postal regulator ..................171

MODULE IV - Designated Operator and SPU 173

Introduction ...............................................................................................................175

1 Foundations for development of the designated operator .................................. 177 1.1 Surrounding environment .............................................................................................................................. 177 1.1.1 Society and the economic model .................................................................................................177 1.1.2 The postal sector and conditions in the surrounding environment ............................................... 178 1.1.3 Challenges faced by the designated operator ..............................................................................179 1.2 Growth factors ..................................................................................................................................................180 1.2.1 Concept of corporatization ..........................................................................................................180 1.2.2 Postal business areas ...................................................................................................................181 1.2.3 Customer needs ..........................................................................................................................181 1.2.4 The postal product and production process .................................................................................183 1.2.5 Inputs and outputs ......................................................................................................................184 1.2.6 Business focus .............................................................................................................................184 1.3 Service operation ............................................................................................................................................. 185 1.3.1 Focus of the designated operator ................................................................................................185 1.3.2 Performance of the designated operator on the postal market ....................................................185 1.3.3 Enablingenvironmentforfulfillingthefunctionofthedesignatedoperator ................................186

2 Reforming and developing the designated operator ............................................ 187 2.1 Assessment ....................................................................................................................................................... 187 2.1.1 Research on the postal market, needs and trends ........................................................................187 2.1.2 Regulation of service operation on the postal market ..................................................................195 2.1.3 Competitive strength of the designated operator .........................................................................196 2.1.4 Economic performance ................................................................................................................199 2.1.4.1 Economic-financialperformance ...........................................................................................................200 2.1.5 Experiences of other designated operators ..................................................................................202 2.2 Prospective analysis (future trends and projections) ......................................................................202 2.2.1 Market trends ..............................................................................................................................202 2.2.2 Forecasting economic performance .............................................................................................203 2.2.3 Alternative scenarios ....................................................................................................................204 2.2.3.1 Legalframework ..................................................................................................................................204 2.2.3.2 Marketmanagementbythedesignatedoperator .................................................................................205 2.2.3.3 Operationalandtechnologicaldevelopmentofthedesignatedoperator ..............................................206 2.2.3.4 Performanceofthedesignatedoperator ..............................................................................................208 2.3 Catalyseurs d’une réforme de l’opérateur désigné ................................................................................. 208 2.3.1 Legal environment ....................................................................................................................... 211 2.3.2 Government backing of the designated operator ......................................................................... 211 2.3.3 Involvement and engagement of the postal workforce ................................................................ 211 2.3.3.1 Managingchange ................................................................................................................................ 211 2.3.3.2 Organizationalculture .......................................................................................................................... 212 2.3.4 Strategic positioning .................................................................................................................... 213

3 Development plans and programmes .....................................................................215 3.1 Formulation of development plans ..............................................................................................................215 3.1.1 Development plans for the designated operator .......................................................................... 215 3.1.2 Stakeholders in business planning processes ................................................................................ 216 3.2 Building blocks of a strategic plan ...............................................................................................................216 3.2.1 The basics .................................................................................................................................... 216 3.2.2 Development of a strategic plan .................................................................................................. 217 3.2.3 Objectives, strategies and actions ................................................................................................ 218 3.2.3.1 Investmentandperformance ................................................................................................................ 219 3.2.4 Formulation phase of the strategic planning process ....................................................................220 3.2.4.1 Vision ...................................................................................................................................................220 3.2.4.2 Mission ................................................................................................................................................221 3.2.4.3 Objectives ............................................................................................................................................222 3.2.4.4 Programmes .........................................................................................................................................222 3.2.4.5 Projects ................................................................................................................................................222 3.2.4.6 Sub-projects .........................................................................................................................................223 3.2.4.7 Actions .................................................................................................................................................223 3.2.5 Approval .....................................................................................................................................223 3.2.6 In-depth analysis .........................................................................................................................224 3.2.7 Implementation ...........................................................................................................................226 3.3 Monitoring and evaluation of the strategic planning process ............................................................. 226 3.3.1 Information requirements for monitoring and evaluation .............................................................226 3.3.2 Phases of the monitoring and evaluation process .........................................................................227 3.4 General guidance ............................................................................................................................................ 228 3.4.1 Recommendations for project management ................................................................................228 3.4.2 Determinants of a successful project ............................................................................................228 3.4.3 Generally accepted concepts and terminology .............................................................................229

MODULE V - Postal Regulation 231

Introduction .............................................................................................................. 233

1 Government and Regulation ................................................................................... 235 1.1 Public services and regulation ......................................................................................................................235 1.1.1 Exercise of the constitutional powers of government ...................................................................235 1.1.2 Changes in public services ...........................................................................................................236 1.1.3 Responsibility for maintaining universal service ............................................................................237 1.2 Regulation as part of the postal reform process ..................................................................................... 238 1.2.1 The regulator's role in national development policy .....................................................................238 1.2.2 Exogenous factors .......................................................................................................................238 1.2.3 Separation of service operation and regulatory functions ............................................................239

1.3 Fulfilment of governmental obligations ..................................................................................................... 239 1.3.1 Implementation of legal mandates under the postal act ...............................................................239 1.3.2 Development of the national postal sector ...................................................................................240

2 Setting up the regulatory structure ....................................................................... 241 2.1 Decisions on postal regulation and implementing procedures .................................................................. 241 2.2 Practical matters: ways and means.............................................................................................................242 2.2.1 Affiliation ....................................................................................................................................242 2.2.2 Legal status .................................................................................................................................242 2.2.3 Financing .....................................................................................................................................242 2.3 Regulatory functions .......................................................................................................................................242 2.3.1 Market-related functions .............................................................................................................242 2.3.2 Universal postal service functions ................................................................................................243 2.3.3 Functions designed to ensure system integrity .............................................................................246 2.3.4 Functions pertaining to the conduct of international relations ......................................................246 2.3.5 Summary of the general functions of the regulatory agency ........................................................247 2.4 Organizational structure of the regulatory agency ................................................................................. 248

3 Regulatory instruments ........................................................................................... 251 3.1 Postal service regulations ..............................................................................................................................251 3.1.1 Regulation of the postal industry .................................................................................................251 3.1.2 Services to be governed by postal regulations ..............................................................................251 3.1.3 Customer and consumer rights and obligations ...........................................................................251 3.2 Universal postal service plans and programmes and formalization of agreements with the designated operator ...................................................................................................................... 253 3.3 Operation of the reserved service area ..................................................................................................... 253 3.4 Pricing system .................................................................................................................................................. 254 3.5 Customs clearance policy ...............................................................................................................................255 3.6 Licences ..............................................................................................................................................................255 3.6.1 Need for service operating licences ..............................................................................................255 3.6.2 Licensing requirements ................................................................................................................256 3.7 Ratification of the Universal Postal Convention and other UPU Acts ................................................. 257 Annexe 1 Administrative and criminal sanctions under postal regulations "Model" ........................................ 259

MODULE VI - Financing of Postal Reform 265

Introduction .............................................................................................................. 267

1 Groundsforfinancinginvestmentsinthepostalsector ...................................... 269 1.1 Need for development of the postal sector ............................................................................................. 269 1.1.1 Public service orientation .............................................................................................................269 1.1.2 Development of the postal sector ................................................................................................269 1.2 National political will – inclusion of the postal sector in national development plans ....................270 1.2.1 National development plans ........................................................................................................270 1.2.2 Integrated postal reform and development plans .........................................................................270 1.2.3 Business plan of the designated operator .....................................................................................270 1.3 The postal sector in the context of international cooperation .............................................................271 1.3.1 United Nations development strategy: the world postal network at the service of the UN Development Goals .....................................................................................................271 1.3.2 The IPDP as a starting point for a new vision of the postal sector–Productandservicediversification ..................................................................................276 1.3.2.1 Banking ................................................................................................................................................ 276 1.3.2.2 Payments ............................................................................................................................................. 276 1.3.2.3 Remittances .........................................................................................................................................277 1.3.2.4 E-government ......................................................................................................................................277 1.3.2.5 Information ..........................................................................................................................................277 1.3.2.6 Addressing ...........................................................................................................................................278 1.3.2.7 Mailandexpressservices......................................................................................................................278 1.3.2.8 Logistics ...............................................................................................................................................278 1.3.2.9 E-services .............................................................................................................................................2791.3.2.10 Otherservices ......................................................................................................................................279

2 Financing postal reform ...................................................................................... 281 2.1 Introduction – preparing to apply for funding .................................................................................... 281 2.2 Development financing bodies ..............................................................................................................282 2.2.1 Multilateralfinancingbodies .................................................................................................. 282 2.2.1.1 Multilateralbanks ...........................................................................................................................2822.2.1.1.1 TheWorldBankGroup ............................................................................................................................283

2.2.1.1.2 CentralAmericanBankforEconomicIntegration .....................................................................................289

2.2.1.2 Keyinformationonothermultilateralbanks ...................................................................................291 2.2.2 Commercial banks ................................................................................................................. 301 2.2.3 Otherinternationalfinancingbodies ...................................................................................... 301 2.2.3.1 Bilateralinstitutions ........................................................................................................................303 2.3 Role of the UPU .........................................................................................................................................306 2.3.1 Relations between the UPU and the World Bank ...................................................................306 2.3.2 The UPU's role in national postal development ......................................................................306 2.3.3 Relations between the UPU and development organizations .................................................. 307 2.3.4 Support of the UPU and the restricted unions ........................................................................ 307

3 Procedure ............................................................................................................. 309 3.1 Summary of steps to be taken to obtain financing ..........................................................................309 Annex 1-A Preliminary study .................................................................................................................................. 312 Annex 1-B Socioeconomic data ............................................................................................................................. 313 Annex 1-C Information on development or adjustment plans ....................................................................... 314 Annex 2-A Status of the postal enterprise .......................................................................................................... 315Annex 2-B Transactions on behalf of other agencies ....................................................................................... 316Annex 2-C Additional information on the restructuring project..................................................................... 317Annex 3-A Postal service organization chart ...................................................................................................... 318Annex 3-B Trends in staffing levels ....................................................................................................................... 319Annex 3-C Management system ........................................................................................................................... 321Annex 3-D Management auditing ..........................................................................................................................322Annex 4-A Rate setting ............................................................................................................................................323Annex 4-B Competition ........................................................................................................................................... 324Annex 4-C Marketing system .................................................................................................................................325Annex 5-A Organization of postal service operations ......................................................................................326Annex 5-B Trends in mail volume .......................................................................................................................... 327Annex 6-A Trends in postal financial services ....................................................................................................328Annex 6-B Savings bank ..........................................................................................................................................330Annex 7-A Financial position of the postal service ...........................................................................................332Annex 7-B Funds flow .............................................................................................................................................. 333Annex 7-C Balance sheet .........................................................................................................................................334Annex 7-D Debt and Financial claims.................................................................................................................... 335

Postal Reform

Guide

Module IBases of Postal Reform

13

Themainpurposeofthismoduleistoexplaintheimportanceofthepostalservicefornationwidedevelopmentandtheunderlyingrationaleforpostalreformefforts.

Chapter 1describesthemainfeaturesofthepostalsector,theobligationsofgovernmentastheguarantoroftheuniversalpostalservice,andthecurrentregionalandglobalenvironmentsurroundingtheoperationofpostalservices.

Chapter 2 discussesthecoreelementsofpostalreform,themajorstakeholdersinvolved,thebasicunderlyingconditionsforundertakingareformeffort,andtheissuesandspheresofactioninvolvedinanyreformprocess.

Chapter 3 describesthepostalreformprocess,establishingthemainprojectpreparationphases,themajordeterminingfactorsinthesuccessofapostalreformeffort,andmechanismsformonitoringperformancethroughoutthereformprocess.

PostalreformandsustainabledevelopmenthavebeenacknowledgedaspriorityobjectivesfortheUniversalPostalUnionsincetheBucharestCongress.Inthissense,theIstanbulWorldPostalStrategy(IWPS),adoptedbytheIstanbulCongress,establishesthatpostalreformisakeyactivityforfosteringmarketandsectorfunctioning,asprovidedforinIWPSgoal3.TheIWPSprovidesthat,withastrongphysicalnetworkanddiversifiedandintegratedmodernproductsandservices,thepostalsectoristheoreticallyreadytofunctioneffectively.IWPSgoal3aimstoovercometheissueshamperingthesector'sgrowth,suchasregulatorybarriersandlackofmarketknowledge,aswellaslargerenvironmental,socialandeconomicconcerns.

Thustheimportanceofreformandmodernizationconcernsthedifferentstakeholdersofthepostalworld.Asguarantorsoftheuniversalpostalservice,governmentswillhavetodefinepoliciesofreformallowingtheadoptionofthemeansnecessarytopromotethetransformationofpostalstructures.

Designatedoperatorsfortheirpartwillhavetoapplymodernmanagementpoliciesallowingthemtoparticipateappropriatelyinanincreasinglycompetitivemarket.Asaresultoftheiractionprogrammes,therestrictedunionswillbeabletocollaborateactivelyinpostalreformanddevelopmentprocesses,andthedifferentUPUbodieswillhavetointroducejointactionstofacilitatethisimportantIWPSgoal.

Thus,ingeneral,themoduleprovidesanoverviewoftheissuesaddressedthroughouttheGuideandwhichmakeitausefultoolforanyoneinchargeofdevisingareformstrategy,bothforthepostaloperatorperseandforthepostalsectorasawhole.

Introduction

15

Historicallyspeaking,theUniversalPostalUnion(UPU)isthesecondoldestinternationalorganization,aftertheInternationalTelecommunicationUnion.

With192membercountries,theUPUistheleadinginternationalforumforcooperationamongdesignatedoperatorsandpostalregulatorsanddoesitsutmosttoensurethecontinuedexistenceofanintegratedinternationalpostalservicenetwork.Tothisend,itplaystheroleofanadvisoryandmediatorybody,acontactgroupandatechnicalassistanceserviceprovider.Itsetsrulesforinternationalexchangesofmailandmakesrecommendationsdesignedtohelpboostthevolumeofmailtrafficandimproveservicequalityforpostalservicecustomers.

AsaspecializedUnitedNationsagency,theUPUdoesnotintervenedirectlyintheinternalaffairsofitsmembercountries.However,throughthecommitmentofallitsmembercountriestoprovidingasetofbasic,mandatorypostalservices,ithasbeenstrivingsinceitsfoundationtoenforcetheprincipleofa"singlepostalterritory"toensurethesmoothoperationoftheworld'slargestmaildeliverynetwork.

CountriesvoluntarilychoosetobecomemembersoftheUPU,whoseoperationsaremanagedatthehighestlevelsoftheorganization,governedbytheUPUConstitutionanditsderivativeinstruments,theGeneralRegulations,theUniversalPostalConvention,thePostalPaymentServicesAgreement,andtheirrespectiveregulations.

ThefollowingisanoutlineofsomeofthemainunderlyingprinciplesgoverningUPUoperationsanddecisions.

• Access to postal services, and to the universal postal service in particular: theUPUanditsmembercountriesaretopromotebroad-based,non-discriminatoryaccesstopostalservices,throughoutthenationalterritoryinthecaseoftheuniversalservice;

• Single postal territory:together,themembercountriesoftheUPUformaglobalnetworkforthefreecirculationofmailinaccordancewithinternationallawandthedomesticlegislationofeachmembercountry;

• Shared decision making:theUnion'sdecisionsaremadebyitsmembercountrieswithintheframeworkoftheUniversalPostalCongressandtheUPUCouncils;

• Compliance with Union decisions:allmembercountriesareboundtocomplyandmonitorcompliancewithdecisionstakenbytheUPUmembershipand,wherenecessary,includeinternationallawsgoverningpostalservicesintheirdomesticlegislation;

• International cooperation:allmembercountrieshaveagreedtoworktogetherfortheimprovementanddevelopmentofpostalservices;

• Quality of service:implementationofjointeffortstocontinuouslyimproveservicequalityasoneoftheUnion'smainpriorities.

Attheregionallevel,restrictedpostalunionsareworkingtowardsgoalsandobjectivesextremelysimilartothoseoftheUPUbutspecifictoaparticulargeographicorlanguage-speakingarea.CollaborationbetweentheUPUandthevariousrestrictedunionsisofvitalimportanceforthedevelopmentofpostalservicesinthedifferentpartsoftheworld.

The postal sector and national development

1

1.1

International postal

organizations

16

ThecurrentrestrictedunionsincludetheAssociationofPostalandTelecommunicationsOperatorsofPortuguese-SpeakingCountriesandTerritories(AICEP),theArabPermanentPostalCommission(APPC),theAsian-PacificPostalUnion(APPU),theBalticPostalUnion(BPU),theEuropeanConferenceofPostalandTelecommunicationsAdministrations(CEPT),theConferenceofPostsandTelecommunicationsofCentralAfrica(COPTAC),theCaribbeanPostalUnion(CPU),theCommunicationsRegulators'AssociationofSouthernAfrica(CRASA),thePostalUnionfortheMediterranean(PUMed),theNordicPostalUnion(NPU),thePanAfricanPostalUnion(PAPU),theAssociationofEuropeanPublicPostalOperators(POSTEUROP),thePostalUnionoftheAmericas,SpainandPortugal(PUASP),theRegionalCommonwealthforCommunications(RCC),theSouthernAfricaPostalOperatorsAssociation(SAPOA),andtheWestAfricanPostalConference(WAPCO).

Thehistoryofthepostalsectoriscloselyintertwinedwiththehistoryofeachindividualcountry.Postalserviceshavebeenplayinganimportantsocialroleeversincetheformationofnationalgovernments.Postalserviceorganizationshaveundergoneaseriesofstructuralreformsinlinewithdifferentcultural,economic,politicalandtechnologicalfactors,particularlyinrecentyears,withthestepped-uppaceofchange.Itsclosetiestosocialstructuresalsosubjectthepostalsectortopressuretochange.Thefollowingsectionsanalyzethefactorscontributingtothereshapingoftheinstitutionalframeworkforthepostalsector.

Section1.2.1containsabriefretrospectivestudyofthepostalsectorfromitsoriginsuptothepresent,highlightingitslatestchallenges.Next,section1.2.2looksatmajortrendsonthepostalmarket,whicharegrowingstrongereveryday.Section1.2.3,inturn,focusesspecificallyonthemaininstitutionaltrendsinthepostalsector,whilesection1.2.4under-scorestheneedfor,andtimelinessof,change.

Historically,inthemajorityofcountries,postalserviceswererundirectlybythegovernment,servingthepublicunderaratherextensivegovernmentmonopoly.InadditiontogeneratingrevenuefortheState,thismonopolywasoftenaimedatcontrollingcommunications.Unchallengedbycompetitionforalongtime,postalservicesweregenerallyrunwithoutpayingmuchattentiontotheneedsofcustomers,whowereconsideredusersormererecipientsofservices.

Existingmechanismsfortheestablishmentofquality-of-servicemodelsareonlyoneexampleofthismindset,shapedmorebytheserviceprovider'stechnicalandoperationalcapacitythanbyuserneedsperse.

Costfactorswerenotgivensufficientweightingovernmentdecision-makingprocesses,whichcreatedlargefinancialdeficitsinmanypostaladministrationsaroundtheworld.

Productionprocesseswerelargelymanualduetothelimitedavailabilityofapplicabletechnologyforpostaloperatingproceduresandalackofnecessarytechnologyresourcesforautomatingtheprocessingoflettermailandotheritems.

Thissituationpersistedformanyyears,duringwhichtimePostscouldrestassuredthattheiroperationswerenot–norcouldbe–subjecttoanyformofcompetitioninacompletelystablepostalenvironment.

Itshouldbeemphasized,however,thatthepostalmonopolyinmostcountriesdidnotincludetheentirepostalsector,assegmentssuchasparcels,wherethetransportanddeliverycouldalsobeprovidedbyprivateoperators,werenotincludedinthereservedarea.

Thelate1960sandearly1970ssawtheemergenceofprivatefirmsofferingsignificantlyhigherqualitydocumentandmerchandisedeliveryservicesthanthetraditionalservicesrenderedbyofficialpostaladministrations,forthefirsttimecreatingcompetitionwithinthepostalsector,thoughrestrictedsolelytomoresophisticatedservices.

Inmanydevelopingcountries,thepublicoperatorceasedtodevelopatthesamerateassocietyasawhole,andqualityofservice,bothintermsofspeedandcoverage,wasseriouslycompromisedasaresult.Atthesametime,thegrowthinbulkmailvolumescreatedademandthatwasoftencoveredbyprivate,ofteninformal,firms.Asthesefirmsprovidedservicesolelytomajorcustomers,theywereabletochargelowerpricesthanthepublicoperator,whichalsohadtobearthecostsassociatedwiththeuniversalservice.ThissituationservedonlytofurthercompromisethefinancialpositionoftheofficialPost.

Oneofthemainpointsofentryforprivatefirmswastheinternationalservicearea,inwhichinconsistencyinthequalityofserviceprovidedbydifferentgovernment-operatedpostalserviceshelpedfostertheemergenceofnewserviceprovidersusingprivateservicenetworksandofferingconsistentstandardsofquality.Intime,theirinternationaloperationseventuallyenabledthesefirmstoexpandintodomesticmarkets,posingadirectthreattoexistingpostalmonopolies.

Thegovernment-ownedpostalservicesofcertaincountriesreactedpositivelytotheactionsoftheseprivateserviceproviders,embracinganew,morecustomer-drivenoperatingstrategyandendeavouringtodevelopamorestreamlined,

1.2.1

Brief history of the postal sector

and recent challenges

1.2

The postal environment

and the need for change

17

market-orientedorganizationalstructure.However,manypostalorganizationswerestillgovernmentagencies,makingitdifficultforthemtooperatewiththenecessarydegreeofadministrativeflexibilityandautonomyrequiredtomeetthechallengesposedbythegrowingdemandforpostalserviceinanincreasinglycompetitiveenvironment.

Thepostalserviceoperatingmodelwasbasedentirelyontheconceptofanationalterritoryinwhichthemarketareawasdefinedbynationalgeographicboundaries.Theglobalizationoftradeandeconomicintegrationhascreatedawholenewapproachtopostalservice,inwhichthepostalsectortakesonthepivotalroleofinfrastructureproviderfortheconductofbusinessinaworldinwhichmanufacturersandconsumersareoftenphysicallyseparatedbylargedistances.

PostalreformintheEuropeanUnion(EU)resultedinthecreationofasinglepostalmarketthroughouttheEU,andinformerofficialPostsbecomingautonomous,market-orientedpostalbusinesses,which,nolongerfacinggeographicalconstraints,wereabletoestablishthemselvesontheterritoryofothercountrieswithhighdemandforinternationalpostalservices,andtocompetewiththedesignatedoperatorsofthosecountries.Postsinotherregionsfollowedthisexample,establishingthemselvesintheworld'smainpostalmarkets.

Therapiddevelopmentofnewinformationtechnologieshasaffectedthepostalsectorinanumberofways.Ontheonehand,thesetechnologieshavesubstitutedmail,whichisnowreferredtoas"physical"mail.Firstthefax,andsubsequentlythee-mailandotherformsofelectronicmessaging,togetherwithareductionintelecommunicationcosts,haveresultedindwindlingletter-basedcorrespondenceandpostaltransactions.

Ontheotherhand,thesenewtechnologieshaveallowedthepostalsectortoimprovequalityandcustomerserviceandtorationalizecosts.Postaloperationsarenowlargelybasedonthesetechnologies.

Globalizationandthedevelopmentofe-commercehavetransformedtheinternationalpostalsector.Significantlyfewerdocumentsarebeingsentasaresultofthesharpdeclineinletter-basedcorrespondence.Demandforthetransportofgoods,however,hasrisensharply,whichhasresultedinachangeinthetypeofinternationalitemsbeingsent.Commercialparcelshaverisentothefore,andtheimportanceofCustoms-Postrelationsandhomedeliveryhasincreasedasaresult.

E-commerceisadynamic,rapidlychangingsector.Newtechnologiesallowmusic,videosandbookstobedownloaded,whichpreviouslyaccountedforalargeportionoftheitemsshipped.

Asimilartrendhasbeenprevalentatthedomesticlevel,althoughdevelopingcountriesareclearlylaggingbehind.

Inadditiontotheproblemscreatedbytheincreasingcomplexityofthepostalsector,privateserviceoperatorsarepenetratingandflourishingincertainsegmentsofthepostalmarket,attractedbytheeconomicpotentialofpostalbusinessopportunitiesandspurredbyincreasinglyadvantageousmodelsforprivateenterprise,particularlyinmorelucrativemarketsegmentsinwhichthepublicoperatortraditionallyhadapositivecashflowtofinanceuniversalpostalserviceoperations.

Thepostalsectorisfarfromdisappearing,butisundergoingmajortransformation.Parcelsconstitutethelion'sshareoftheitemsshipped,which,attheinternationallevel,callsforincreasedefficiencyandcooperationwithCustomsandotherauthoritiesinvolvedintheprocess.Increasedinvestmentisrequiredatthenationallevel,aswellaschangesinworkingmethodstoensurethetimelydeliveryofitems,whichisaveryimportante-commercerequirement.

1.2.2

Major market trends in the postal sector

Accordingtodatacompiledbythe"Post2005"studyconductedunderajointUniversalPostalUnion/WorldBankprojectmountedin1995,designatedoperatorsprocessedapproximately496billionletter-mailitemsand5billionparcelsin1997,producingapproximately200billionUSDinrevenues.In2015,some320billionletter-mailitemsand8billionparcelswereprocessed,generating344billionUSDinrevenues.Thestudyprojectedthatthevolumeoflettermailandparcelswouldgrowataverageannualratesof2.4%and5%,respectively,soitclearlyfailedtotakeintoaccounttheimpactthatnewtechnologieswouldhaveonthepostalsector.

Accordingtothestatisticsforthelastfewyears,letter-mailvolumeshavedeclinedconsiderably.Thisnegativetrendhas,however,sloweddown,andparcelvolumeshavecontinuedtogrow.Despitenewcommunicationstechnologies,letter-mailvolumescontinuetobesignificant,althoughsmallpacketsconstituteaconsiderableportionthereof.

Thereisanoppositeeffectintheparcelssector,wherebothdomesticandinternationalparceltraffichasgrownsignificantlywiththeadventofe-commerce.

18

InanotherUPU/WorldBankstudy(RedirectingMail:PostalSectorReform,1996),world-widetrafficpatternsfordomesticlettermailaccordingtothetypeofsendershowedalargeportionofthistypeofmailoriginatingwithorganizationsandboundforindividualhouse-holds,asillustratedbythefiguresinthefollowingtable:

Ori

gin

/D

esti

nat

ion

Priv

ate

ind

ivid

ual

s

Bu

sin

esse

s/in

stit

uti

on

s

Tota

l

Privateindividuals

10% 60% 70%

Businesses/institutions 5% 25% 30%

Total 15% 85% 100%

Thevolumegeneratedbyorganizationshasincreasedsincethisstudy,tothedetrimentofthatgeneratedbyprivateindividuals.

Thus,theworldwidepostalindustryisundergoingmajorstructuraladjustmentswiththeadventofnewinformationtechnologies,whichhavechangedconsumerbehaviour.Thoughthepostalservice'sshareofthecommunicationsmarketmaybeshrinking,thegoodstransportmarkethasgrown,withdeliveryofproductstoend-consumers.Thisshowsthat,ratherthanabruptlyandcompletelyreplacingpostalservice,theuseofnewtechnologiescancoexistwithpostalactivities,engenderingcomplementarities.

UPUstatisticsshowthatthenegativeletter-mailtrendhashalted.Thenumberofletter-mailitemsprocessedeachyearisdecreasing,buttheirweightisincreasing.Attheendofthelastcentury,thegloballetter-mailaveragewas40itemsperkilogramme,whilefor2017,thenumberofitemsperkilogrammewasestimatedatseven.

TheeffectoftheInternetanditsvariousramificationsisthelatestchallengefacingthepostalsector.Theimpactonthepostalsectorisnowbeyonddiscussion,buttheextentoftheimpactisopentodebate.Inbrief,therearevariouspositionsonthisissue,allofwhichhavetodowiththeroleofthedesignatedoperatorintoday'snewpostalenvironmentwithstepped-upbusinessactivity,directcompetition,technologicalcompetitionandtheincreasingglobalizationofpostalserviceoperations.

Thefirstpositionisthatpostalservicesarenecessaryattheworldwidelevelandthat,whilemailvolumeswillcontinuetodecline,theywilleventuallystabilize,regardlessoftheexpansionoftelecommunicationsservicesingeneralandofelectronicapplicationsinparticular.Itacceptsthefactthatthepostalsector'sshareofthecommunicationsmarketisdestinedtoshrinkwiththeplethoraofemergingnewtechnologies.However,itmaintainsthatnoteveryonehasaccesstothesenewtechnologies,whichiswhythereisnorealthreattopostalservices,which,onthecontrary,haveanimportantadvantageoverothercommunicationsmedia,namelytheirextensiveretailanddeliverynetwork.Inthiscontext,theuniversalpostalserviceassumesincreasedimportance.

Thesecondpositionisthatpostalservicescanexpecttolosebusiness,notonlyduetotheincreasinglylowercostofothercommunicationsmediabutalsobecauseprivateserviceoperatorsaremoreresponsivetomarketneeds.Moreover,underinvestmentbypostalserviceshasmadethemincapableofabsorbingthegrowingvolumeofmailtraffic,anddesignatedoperatorsaresimplynoteconomicallysustainablewithoutexclusivemonopolyrights.

AthirdpositionisthatthePostcomplementsnewtechnologies,givingrisetonewpostalservices.Postalservicesassumeincreasedimportanceasaresultofthiscomplementarity,ascanbeseenbye-commerce,wherepostalservicesareanessentialpartofthecycle,responsiblefortheend-deliveryoftheitem.

Thisopportunityalsogivesrisetomajorchallenges,astraditionalmodesofdeliveryarenolongersufficienttocovertheneedsoftoday'ssociety.Postsneedtoreinventthemselvesbyrestructuringtheiroutdatedletter-basednetworks,aswellastheirworkingandmarketingstrategies.

19

Justas,inthepast,manywerepredictingthedownfallofpostalservicewiththeinventionofthetelegraph,telephoneandfax,thissameprophecyhasbeenbattedaroundforanumberofyearsnow.However,inthesamewaypostalserviceswereabletonotonlyfaceuptothatemergingthreatbutincorporatethenewbreakthroughsofthattimeintotheirownoperationsbyofferingnewservicestothepublic,thecurrentthreatposedbythedevelopmentofnewtechnologyisbeingturnedintoanopportunityforpostaloperators.

Thus,rightnow,thepostalsectorisupagainstasimilarsituationtothatofthepast,givingrisetonewpredictionsofitsgrowingobsolescenceandeventualextinction.Infact,anumberofdesignatedoperatorsarealreadybeginningtotakeastandwiththelaunchofanewe-postalservicesplatform.

Itisimportanttonotethatthecurrentpostalserviceisbasedonthreedimensions–physical,financialandelectronic–allowingdesignatedoperatorstoprovideservicesinlinewithcustomerneeds.

Thephysicaldimension,whichisundergoingconstantchangeinanefforttocaterforthedeliveryofheavieritems,andnotmerelyforletters,continuestobeanimportantpillar.

Thefinancialdimensionallowsdesignatedoperatorstoprovideservicesthatcomplementphysicalservices,utilizingtheextensivepostalnetworktoprovidefinancialservicesandfacilitatethefinancialinclusionofthepopulation.

Theelectronicdimension,whichisbecomingincreasinglyimportantbytheday,allowsdesignatedoperatorstoimprovethequalityoftheirservicesandprovidemodernservicesinlinewithsociety'sneeds.

Thistransformationisnotanegationoftraditionalmailservicebut,rather,agrowthoptionforthepostalsector,buildingonitspastachievements.Whileconventionalpostalserviceisbasedmainlyontheinterconnectionofvariousprocessesandoperationsinanextensivephysicalnetworkintherealworld,thestrengthofthenewpostalservicesliesintheirjuxtapositionofnewdigitalinfrastructurewiththisphysicalinfrastructure,underpinnedbytheintensiveuseofinformationtechnologyresources.

Justasphysicalinfrastructureformsagiganticplatformfortheoperationofdifferenttypesofpostalservices,today'snewdigitalinfrastructureprovidesafoundationfortheoperationofdifferenttypesofservices,includingbothexistingandcompletelynewservices.

Financialservicesenabletheestablishmentorexpansionofanentireserviceline,includingelectronicfundtransferservices,billpaymentservices,pensionandpostalmoneyorderpaymentservices,etc.

Withoutgoingintoallthepossibilitiesaffordedbythisnewtypeofinfrastructure,thefollowingisanoutlineofafewofthemajorpotentialareasofthenewservices:

a. Logistics services,offeringasolutionforlargecustomersrequiringbettermerchandisedeliveryservice(forproductsandparts)betweeninternalunitsortooutsideparties(representatives,middlemen,consumers)usingphysicalpostalserviceinfrastructureandresources.

b. Certificationservices,bringingthecredibilityofthepostalserviceintovirtualreality,authenticatingcurrentlyvulnerablemessagesandtransactionswhoseauthenticitymayneedtobeestablishedforlegalpurposes.

c. Messaging services, developingawholenewlineofcommunicationsservices,including,butnotlimitedto,hybridmail,whichgivespostaloperatorsthepossibilityofdevelopingdigitalcustomerinterfaces,offeringvalueaddedservices(customizedprinting,enveloping,deliveryconfirmation)inadditiontophysicalmaildeliveryserviceperse.

Physic

al dimension Financial dimension Ele

ctronic dimension

The current postal service is based on three dimensions

20

Thisphysical,financialandelectronicinfrastructureisnotconfiguredseparatelybut,rather,interconnectedtotakeadvantageofallthebenefitsofagrid.

Theirconfigurationasseparatenetworkswouldfailtotapintotheirsynergy,turningthemintomereconventionalresourcesincapableofcreatinganykeymarketdifferentials.

Forexample,anelectronicnetworkalonedoesnotrepresentakeymarketdifferentialforthepostalservice,asidefromthegeographiccoveragefactorinmailservice.Suchamodelwouldrestrictpostalservicestoamarketsegmentinwhichserviceproviders,suchasInternethosts,arealreadypresent.

However,therearenewdevelopmentseverydayinthedebateoverthefutureofthepostalsectorinthefaceofthethreatposedbynewtechnology,andtherearealreadysignsofagrowingconsensusaroundtheneedforaclearchangeinmarketmanagementpracticeswithinthepostalsector.Theboxbelowdepictssomeofthesesuggestedchanges,whichshouldnot,however,beconstruedasconfinedsolelytothespecificmarketsegmentsinquestion.

Togetherorseparately,themarketsegmentsdepictedabovereflecttheeffectsofchangeonthreebasicaspectsofpostalservice:

a. Integration: postalservicesarelessandlessconfinedtoanation'spoliticalboundariesandincreasinglypartofaglobalmarketplace;

b. Diversification:amoreintensiveuseoftechnologyincombinationwithexistingpostalinfrastructureaffordsnewpossibilitiesforservicedelivery,improvingtheuseofexistingoperatingcapacityandhelpingtobuildmarketshare;

c. Positioning: anewapproachtopostalservicesinwhichtheyarenolongerviewedmerelyasasequenceofoperatingprocessesbutaslinksinavaluechainbetweenmanufacturersandconsumers,orbetweengovernmentandthegeneralpublic.

Diversificationofservicesisanimportantaspectthatshouldbetakenintoaccountbydesignatedoperatorsthathaveachievedgoodfinancialresults.Thefollowingdata,extractedfromthe2016annualreportsofthedesignatedoperatorsconcerned,looksattheshareofincomefromletter-mailserviceinthetotalrevenuesofdesignatedoperatorsinselectedcountries:

Countries Share of total revenues

Finland 34%

France 47%

UnitedKingdom

44%

Netherlands 55%

Germany 17%

Italy 12%

Itcanbeseenfromtheseexamplesthat,evenincountrieswitharatheraggressivestrategyforthegeographicalexpansionanddiversificationofpostalservices,lettermailstillaccountsforalargeshareoftotalrevenues,exceptinthosecasesinwhichthedesignatedoperatorhasbeentransformedintoashippingorfinancialcompany.

Diversificationofservicescanbeameansofgeneratingnewrevenue,butthenewserviceswillbeviableonlyifthedesignatedoperatorenjoysagoodreputationasaproviderofqualitybasicservices.

1.2.3

Major institutional

trends in the postal sector

Thetraditionalinstitutionalmodelbasedonpremiseswhicharenolongernecessarilyvalidinthefaceofcurrentrealities,suchastheexistenceofasinglemarketoperator,alackofcompetitionandlittleneedforinnovation,isinconsistentwiththejuxtapositionofdifferentfactorsdiscussedabove.

TheEuropeanUnion'sprogressindevisinganewmodelisnoteworthy.IthasmadeaformaldecisiontoregardEuropeasasinglepostalterritory,turningwhatwaspreviouslyinternationalintodomesticmailtraffic,withfreecompetitionamongpostaloperators.ThemainunderlyingprinciplesoftheproposednewmodelareoutlinedinEUDirectives97/67/CE,2000/39/CEand2008/6/CE,establishinganinternalpostalmarketandreferringtotheopeningupofpostalservicestocompetitionandthetimingofeffortstoimplementtheproposedchanges,includingtheseparationofoperational

Hybrid mail

Postal banking services

Logistics

Global enterprises

Physical mail

Financial services

International services

Parcels

21

andregulatoryfunctions,withthelatterbeingperformedbyanindependentbody.ThisreflectsthecautiousnesswithwhichtheEuropeanmarkethasbeenopeneduptocompetition.Thefirsttangiblestepinthisdirectiondatesbackto1992,withthepublicationoftheso-calledGreenBook(finalized31December2012).

Thus,theEuropeanUnionhasalreadytakenconcretemeasurestoopenuptheEuropeanpostalmarkettoheightenedcompetitionwithin20yearsofthepublicationoftheGreenBook.

ThefollowingarethemostrelevantaspectsofEuropeanpostallegislation:

Universal serviceEnsurethatthegeneralpublicarepermanentlyprovidedwithapostalserviceofaspecifiedqualityanywhereintheircountryatanaffordablepriceand,assuch,ensurethatcontactandaccesspointsareabletocopewiththeneedsoftheirusersandthatuniversalserviceisguaranteedatleastfiveworkingdaysaweek(includingonecollectionandonedeliveryperday).

EachEUcountrymustensurethatuniversalserviceprovisionmeetsthefollowingrequirements:

• aserviceguaranteeingcompliancewiththeessentialrequirements;

• anidenticalservicetousersundercomparableconditions;

• availablewithoutanyformofdiscrimination;

• nointerruptionsorstoppagesexceptinexceptionalcircumstances;

• evolvinginresponsetotechnical,economicandsocialdevelopmentsandtotheneedsofusers.

CompetitionThedirectiveprohibitsnationalgovernmentsfromgrantingormaintaininganyexclusiveorspecialrightstoestablishorprovidepostalservices.

LicensingEUcountriescansetupauthorizationprocedures,includingindividuallicencestoensurethatpostalservicescomplywiththeessentialrequirements(includingconfidentialityofcorrespondenceandnetworksecuritywhentransportingdangerousgoods)andthatuniversalserviceisprovided.

PricingPricesforeachoftheservicescomprisinguniversalservicemustbe:

• affordableandpermitallusers,independentofgeographicallocation,and,inthelightofspecificnationalconditions,toaccesstheservice;

• cost-orientedandgiveincentivestoprovideanefficientuniversalservice.

Quality of serviceServicestandardsforuniversalservicemustbesetandpublishedinordertoguaranteeapostalserviceofgoodquality.Standardsfocusondeliverytimesandontheregularityandreliabilityofservices.

ForservicesoperatingbetweenEUcountries,thedirectiverequiresthat:

• 85%ofpostalitemsofthefasteststandardcategorybedeliveredwithinthreedaysafterthedateofposting;and

• 97%withinfivedaysafterthedateofposting.

EUcountriesarerequiredtotakeanumberofmeasures,including:

• layingdownqualitystandardsfornationalmailandensuringthattheyarecompatiblewiththoselaiddownforservicesbetweenEUcountries;

• notifyingtheirqualitystandardsfornationalservicestotheEuropeanCommission,whichwillpublishtheminthesamemannerasthestandardsforservicesbetweenEUcountries;

• ensuringtransparent,simpleandinexpensivecomplaintproceduresareputinplacebyallpostalserviceproviders.

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National regulatory authoritiesEveryEUcountrymustdesignateoneormorenationalregulatoryauthoritiesthatarelegallyseparatefrom,andoperationallyindependentof,thepostaloperators.Wherepostalservicesremainunderstatecontrolorownership,regulatoryfunctionsmustbestructurallyseparatedfromactivitiesassociatedwithownershiporcontrol.

OneaspectunderpinningtheEuropeanpostalmarketistheeliminationofallreservedserviceareas.

ItisimportanttonotethattheEuropeanexperiencehasinvolvedashiftfromnationalmonopoly-basedmarketswithvaryinglevelsofregulationtoaliberalizedmarketwiththesamelevelofregulation.

ThecaseoftheEuropeanUnionisagoodexampleofacautiousapproachtotheliberalizationofthepostalmarket.

Therearecountrieswhichhavesufferedsorelyfromtheshockwavesproducedbyhaphazardmarketliberalizationwithoutanyadvanceplanningandwithoutconsideringtheneedsofthedesignatedoperatorresponsibleforprovidingtheuniversalpostalservicetoallsegmentsofthepopulation.Themostvisibleconsequenceofthecurrentcombinationofnewtrendsinthepostalenvironmenthasbeenthewaveofacquisitionsandalliance-buildingbypostaloperatorsaroundtheworld.

GovernmentandprivateenterprisesinEuropeannationsinparticularhavemadeacquisitionsorformedpartnershipsamongthemselvesorwithprivateserviceoperatorstohelpenablethemtomoreaggressivelyexploitspecificmarketsegments,suchasinternationalexpressmailservice.

Certaindesignatedoperatorshavesoughttoformallianceswithotherdesignatedoperatorsconsideredvitaltotheestablishmentofworldwidepartnershipsincertainserviceareas.

Theintentbehindthesenewtrendsistolaythegroundworkforserviceoperatorspreviouslyconfinedtodomesticmarketstooperateonaglobalscale,asisalreadythecaseinthetelecommunications,powerandbankingsectors,amongothers.

Althoughthereisnocleartrendtowardsdevelopmentofasingle,worldwidemodelforthepostalsector,which,moreover,wouldbeinadvisableinthefaceofdifferencesinprevailingconditionsatthecountryandregion-widelevel,themembercountriesoftheUniversalPostalUnionhavealreadyforgedaconsensusaroundanumberofprinciples,asoutlinedbelow.

a. Separation of regulatory and operational functions: Apostalmarketwithmultipleserviceoperatorsrequirestheestablishmentofsanctioning,regulatory,supervisoryandarbitrationfunctionsencompassingallsuchoperators.Historically,governmentshaveignoredtheexistenceofanyoperatorsotherthangovernment-runpostalservices,with

theirregulatoryactivitiestargetedsolelyattheofficialpostalserviceratherthanatthepostalmarketasawhole.Thegrowingcomplexityofthepostalmarketrequiresthatgovernmentsregulatealloperatorsonsuchmarket,primarilytoprotectconsumer/userrightsandinterests.

b. Universal access to postal service: Thisisacoreissuehavingtodowiththephysicalaccessibilityandaffordabilityforthegeneralpublicofapackageofbasicservicesensuredbythegovernment.Rightnow,coverageindicatorsforpostalservicesaresatisfactorybut,withtheopeningupofthepostalsectortocompetitionandthereductioninvolumesresultingfromtechnologicalsubstitution,thereisariskthattheseindicatorscoulddeteriorateifgovernmentsfailtotakepropermeasurestosafe-guardandbuildontheirprogressinthisarea.

c. Coexistence of public and private interests: Moreandmore,government-controlledenterprisesareoperatingsidebysidewithprivatefirmswithinthepostalsector.Insomecasestheyarecompetingwitheachotherwhile,inothers,theyareenteringintoagreementsandformingalliances.However,theywillneedtocontinuetodischargedifferentresponsibilitiesandobligationsandtoplaydifferentrolesinthepostalsector,asdefinedbylegalinstruments,underthesupervisionofamarketregulatoryagency.

d. Competition: Phasinginofcompetitionandphasingoutofmonopolies.Aspreviouslydiscussed,thisshouldbeamethodicalprocesstoenablethedesignatedoperatorinparticulartoprepareitselftodobusinessonafreemarket.Thereasonforcautionisnottoprotectthecorporateinterestsofthedesignatedoperator,buttocontinuetoensureaccesstotheuniversalservicesprovidedbysuchoperator.Theuniquecharacteristicsofuniversalpostalservicesrequireatransitionperiodtoenablethedesignatedoperatortocompletenecessaryrestructuringeffortstotransformitintoamodern,streamlined,technology-drivenserviceprovidercapableofturningaprofitonlucrative,competitivemarketstofinancetheprovisionoftheuniversalpostalservice,orabletoidentifyotherfinancingmechanisms.

e. Modernization of government-owned postal operators: Thisreferstotheneedfortherestructuringandcommercializationoftraditional,government-runpostalservicestogivethemamarket-orientedfocus.Atthispoint,thereisnoworldwidetrendtoprivatizegovernmentpostalenterprises,althoughtherearesuccessfulexamplesinthisregard.Onthecontrary,ratherthanprivatizingpostalservicesingeneral,governmentsarechoosingtogivethemmoreadministrativeautonomyandmanagementexpertisetohelpmakethemmoreresults-oriented.

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f. Technology: Heavyinvestmentinthemodernizationofoperationalinfrastructureandtheincorporationofnewtechnologiesisneeded,notonlytoboostproductivityandqualityofservicebutalsotostrengthenanddevelopnewservicesforpostalcustomersandimproveworkingconditionsforpostalemployees.

g. Regional integration and globalization: Thisallowsbothofficialandprivatepostaloperatorstoexpandtheiroperationsacrossnationalboundariesontoregionalandglobalmarkets.While,ontheonehand,thistrendopensupnewmarketsforacountry'spostaloperators,ontheotherhand,italsoopensthedoorforforeignserviceoperatorstopenetratethedomesticmarketinthemostlucrativemarketsegments.

Thisnewmarketdimensionwillrequirepostaloperatorstobreakawayfromvariablemodels(i.e.alliance-buildingwithaparticularserviceoperatorfortheprovisionoftheuniversalserviceandcompetitionwiththatsameoperatorforservicesforwhichtheyarebothcompeting)anddevelopnewmanagementskills(fortheformulationofamarketstrategyandthedevelopmentofnewservicesforexample).

h. Environmental responsibility: Postalservicesgenerateaconsiderablecarbonfootprint,andpostaloperatorsneedtorespondbyintroducingenvironmentallyfriendlyworkingmethodsandtechnologies.

Designatedoperatorsinmanycountriesaroundtheworldaresimplynotinapositiontodealwiththegrowingcomplexityofthepostalsector.Asaresult,manyarefindingthemselvestrappedinaviciouscircle.

Obviously,therearemanydifferentcircumstancesandreasonsexplaininghowthesedesignatedoperatorscametobecaughtupintheircurrentsituation,fromwhichitwouldbehardtodisentanglethemselveswithoutawell-planned-out,synchronizedefforttotacklethemainstructuralrootsoftheirproblems,takingcarenottobemisledintogoingfor"quickfixes"addressingonlythesurfaceofsuchproblemsandincapableofdistinguishingbetweencausalandresultingeffects,suchasprivatization,concessions,etc.

Itisdifficulttopinpointexactlywherethissortofviciouscirclebegins,asitformsachainofeventsconstantlyfeedingonitself.However,thepointofdepartureforaddressingtheproblemisthepoorqualityofthenationwidepostalservicesfurnishedbythegovernment,eitherthroughacentralgovernmentagencyorthroughanorganizationseparatefrom,thoughstillownedby,thegovernmentandsubjecttogovernmentoversightandsupervision.

Poorqualitypostalservicesdiscouragecustomersfromturningtothedesignatedoperatortomeettheirdemandforcommunicationsservicesandsupportingservicesforbusinessandfinancialtransactions.Toavoidhavingtodealwithpoorservicequality,customersmaylookforalternativesavailablewithinthepostalsector,turningtootherserviceoperatorscompetingdirectlywiththedesignatedoperator.

Undercertaincircumstances,customerswilllookforalternativesoutsidethepostalsector,replacingpostalserviceswithothercomparableservices,insomecases,gainingqualityandpriceadvantages.

Themarketsegmentmostvulnerabletosubstitutionisthemessagedeliverysegment,whichisreelingfromtheeffectsofdirectcompetitionfromnewcommunicationstechnology.

Poorqualityservicemeansadecliningvolumeofmailtraffic,particularlyintermsofthevolumeofitemsprocessedbytheofficialpostaloperator.Therateofdeclinewillvaryaccordingtothemarketsegment,thecustomerprofile,thepresenceofotheroperatorsandtheextentofthepenetrationofnewinformationtechnology.GiventherelativelywidespreaduseofITequipmentandsmartphones,whosepurchasepriceandoperatingcostsmakesuchequipmentaffordabletomanyindividualsaswellasbusinesses,thesubstitutionofmessagedeliveryserviceslendingthemselvestoassimilationbythiscommunicationsmediumcouldturnouttobearatherquickprocess,withvisibleshort-andmedium-termresults.

Suchadropinmailtrafficwouldunderminetheeconomicandfinancialpositionoftheofficialpostaloperatorleftwithadwindlingvolumeofincometofinanceitsoperatingcosts,producingincreasinglylargedeficits.Thefinancialmanagementofthedesignatedoperatorinchargeofprovidinguniversalaccesstopostalserviceismuchdifferentfromthatofotherserviceoperators.Whereasdesignatedoperatorsaroseinresponsetopublicpolicyrequirements,suchasprovisionoftheuniversalservice,privateoperators,whoseinterestsaresolelyprofit-oriented,areflexibleandresponsiveenoughtoadjusttheircostbasisinlinewithcorrespondingcalculationsanddecisionswhenconfrontedbyadversemarketconditionsreducingincomingrevenues.Withnouniversalpostalserviceobligationstofulfil,privateoperatorscanchoosetoexitunprofitablemarkets,closedownretailoutlets,focussolelyoncorporatecustomers,anddiscontinueanyservicesfailingtoprovidetargetedeconomicreturns.

1.2.4

Need for change in the postal sector

24

However,thedesignatedoperatorwithauniversalpostalservicemandatecannotsimplydiscontinueservicetoareasinwhichitisoperatingatalossorclosedownoutletswhicharenotmakingmoneyorstopprovidingloss-makingservices.Moreover,theofficialoperatormustuseitsincometomaintainorexpanditsservicedeliverynetwork,whichisreflectedindifferentelementsofitscoststructure.

Thenextlinkinthechainofeffectsisunder-investmentinthedesignatedoperator.Thegovernment,astheowner/manager,inmanycountriesprovidesnecessaryfundingforbalancingthebudgetandensuringtheeconomicandfinancialviabilityoftheuniversalpostalserviceoperator,thoughithasbeengraduallycuttingbackonthevolumeofsuchfunding.

Insuchcases,thegovernmentisalsothemainsourceoffinancingfornecessaryinvestmentsfortheprovisionofpostalservices.Thus,ifthebooksofaccountofthedesignatedoperatorshowachronicdeficit,thegovernmentwillbeloathtoallocateadditionalfundingtofinanceneededinvestments,sinceitisalreadyfundingday-to-dayoperationswithoutanyassurancesthatsuchspendingwillactuallyclosethebudgetgap.

Itisawell-knownfactthathaphazardallocationsofinvestmentfundsonlyaffectcosttrends,withouthavingthenecessarycounterparteffectonincometrends.Ratherthansolvingtheproblem,ill-advisedinvestmentscouldwidenthedesignatedoperator'sincome-spendinggap,requiringincreasinglylargersubsidiesfromgovernmentsgenerallyattemptingtodealwithdwindlingtaxrevenuesandhigherpriorityneedsinareassuchashealth,security,education,etc.Asaresult,thereislittleprospectoftheperpetuationofthismodel.

Anotherperspectiveisthatoffinancialmarketoperatorsasasourceofdevelopmentprojectfunding.Projectfinancingagenciestendtoexaminetheintendeduseofrequestedfunding,eitherlookingforguaranteesandaneconomicreturnontheirinvestment(fromtheprivatestandpoint)orseekingtoestablishthesocialpurposeandreturnsontheinvestment(fromthepublicstandpoint).

Thepostalsectorfitsboththesebills,byvirtueofthebusinesspotentialandsocialvalueofpostalservices.However,adesignatedoperatorinpoorfinancialconditionwillhaveahardtimeaccessingfinancing.Itwillbesubjecttomorestringentrequirementsandforcedtofurnishlargerguarantees,makingitthatmuchmoredifficultforittoobtainneededfundingtofinanceprojectsdesignedtoimproveandexpandpostalinfrastructure.

Thus,under-investmentprecludestherenovation,rehabilitationandexpansionofexistinginfrastructureandthestreamliningofoperatingmethodsandprocedures,therebyfuellingthedeteriorationinservicequality.

Thefollowingdiagramgraphicallyillustratestheviciouscirclewhichcanunderminethequalityofpostalservice.

Thistypeofviciouscirclecancontinueindefinitely,spirallingdownwarduntilcreatingacrisisinthedomesticpostalsector,eventuallydrawingtheattentionofgovernmentofficialsresponsibleforensuringthedeliveryofuniversalpostalservicetothegeneralpublic.

Crisescanofferopportunitiesforresolvinghistoricand/orstructuralproblemsbut,atthesametime,canalsoprecipitateimpulsiveaction,withtheriskoffurtheraggravatingtheproblem.

Thus,itisbettertoanticipatecrisissituations,whilethereisstilltimetotakelessdrasticmeasurescomparedwiththeoptionsavailableoncetheproblemhasreachedcrisisproportions.

Poor economic

performance

Underinvestment

Limited financing options

Poor quality of service

Low mail traffic volume

25

Postal reform consists of a well-organized policy package through which society as a whole, led by the government and with the involvement of the designated operator, attempts to develop a new nationwide postal service delivery model designed to meet individual needs and sustain short-, medium- and long-term national development efforts.

Thoughanimportantpresenceineveryone'sdailylife,mostpeopleareignorantofthescopeofthepostalsectorandthefullrangeofservicesitprovides.

Itsmostcommonsymbols,namelythepostofficeandthemailcarrier,areoppositeendsofalong,intricateprocessprovidingsecureservicebetweensendersandaddressees.Thus,itisimportanttokeepinmindthetruenatureofthisindustry,whosescalealoneexplainsthescopeandcomplexityofthepostalsector.

Tothisend,section1.3.1describesthemainbuildingblocksofthepostalindustryasawhole,section1.3.2discussesthecoreelementsofpostalservice,whilesection1.3.3dealsspecificallywiththeuniversalpostalservice.Lastly,section1.3.4addressestheroleofgovernmentinensuringtheexistenceofpostalservices,inlinewiththeactualneedsofthegeneralpopulation.

Accordingtostatisticaldatafor2015releasedbytheUniversalPostalUnion(UPU),theletter-mailsegmentoftheworldwidepostalmarketaccountsfor320billionmailitemsayear,including317billiondomesticmailitemsand3billioninternationalmailitems.Theparcelssegmentoftheworldwidepostalmarketaccountsforatotalofapproximately8billionitems.

Toensurethesmoothflowofthismailtraffic,postaladministrationsaroundtheworldhaveformedaninterconnectednetworkofover690,000permanentpostofficefacilities.Theseoutletsandotheradministrativeandoperationalunitsarestaffedbysome5.3millionworkers.

Thisinfrastructurenetworkproducesapproximately340billionUSDayearinrevenues,ofwhich41%isgeneratedbyletter-mailservices,21%byparcelandlogisticsservices,16%byfinancialservicesand22%byotherservices.

Inadditiontodesignatedoperators,thepostalindustryalsoincludesthousandsofprivateoperatorsinallsegmentsofthepostalmarket.Thoughthenumberofprivateoperatorsfarexceedsthatofdesignatedoperators,theycantakemanydifferentforms,fromsmallfamilybusinessesoperatinginlocalareasusingmanualprocessestohigh-techinternationalcorporationswithworldwideoperations.

Atthisjuncture,theboundarybetweenthepublicandprivatesectorinthepostalindustryissomewhatblurred,notonlybythedifferenttypesofbusinessandoperationaltiesbetweendesignatedandprivatepostaloperators,butbymoreformalrelationshipssuchastheformationofjointventuresandtheprivatizationofcertaindesignatedoperators.

Thesetypesofarrangementscanbefoundinanumberofdevelopingcountries,particularlyunderbusinessandoperatingagreements.

Thiscoregroupofoperatorsissurroundedbycountlessproductandserviceproviders,whicharealsopartofthepostalservicevaluechain.Thislattergroupincludesprovidersoftransportationservices,technology,suppliesandotheritemsusedbypostalservicesintheirproductionprocesses.

Thesustainabilityofthisindustryisensuredprimarilybytheinterconnectionofnationalpostalinfrastructurenetworks,witheachnationhavingsovereignrightsoverthetechnicalandoperationalmanagementofitsrespectivenetworkwhile,atthesametime,joiningtogetherundertheaegisoftheUniversalPostalUniontoformasingle,worldwidepostalterritorytoensurethesmoothflowofletters,parcelsorfinancialinstrumentsbetweendifferentpointsoforiginanddestinationaroundtheglobe.

Withfewexceptions,universalpostalserviceoperatorsaroundtheworldareownedbytheirrespectivegovernments.Ingeneral,theiroperatingchainsarecharacterizedbystrongforwardandbackwardlinkagesandtheyhaveextensiveinfrastructurenetworksbyvirtueoftheirmandatetoprovideuniversalaccesstopostalservice.AsrepeatedlydiscussedthroughouttheGuide,toenablethemtofinancethehighcostofmaintainingthisinfrastructure,theseoperatorsnormallyhaveaso-called"reserved"area(ormonopoly)aseconomiccompensationtohelpcoverthedeficitsgeneratedbytheiruniversalpostalserviceoperationsincertainloss-makinggeographicareas,eveninindustrializedcountriesinNorthAmerica,EuropeandAsia.

Thepostalindustryiscurrentlyinthemidstofastructuraladjustmentprocessmarkedbytwomaincontroversialtrends,namelymarketliberalizationandpartnership-buildingbetweendesignatedoperatorsandprivateoperators.

Asdiscussedearlier,countriesaroundtheworldareindifferentstagesofliberalizingtheirpostalmarkets.Certaincountrieshavecompletelyeliminatedtheirpostalmonopoly,whereasothershavenotyetmadeanyprogressinthisdirection.Othercountries,followingtheexamplesetbytheEuropeanUnion,aregraduallyopeninguptheirpostalmarkets,thoughitisnotcompletelyclearwhethertheirgoalisfullmarketliberalizationand,ifso,whetherthiscanbeachieved.

1.3.1

The postal industry

1.3

Major underlying principles

and concepts relating to

postal service

26

Thusfar,whiletherehavebeenanumberofsuccessfulprivatizations,thetrendisapparentlytokeeptheofficialpostalserviceundergovernmentcontrol,thoughwithdifferenttypesofmanagementsystems.

Thepostalsectoriscloselytiedtotheglobalanddomesticeconomy,whichisoneofthemaindeterminingfactorsinmailvolumes,whichincreasewhentheeconomygrowsanddeclinewhenitshrinks.

Accesstocommunicationsmediahasnotalwaysbeenconsideredauniversalright.Inthefirsthalfofthetwentiethcentury,onlyasmallpercentageofthepopulationwasconsideredentitledtoexercisesuchrightand,thus,abletoreapthebenefitsofservicesavailableduringthatera.Intime,withensuingchangesinsocialstructures,therewasagrowingconsensusaroundtheneedforallsegmentsofsocietytohavetherighttocommunicationsservices,withaccesstocommunicationsmediatakingonpivotalimportanceasavehicleforsocialintegrationandtheexerciseofcivilrights.

TheculminationofthishistoricprocesswastheadoptionoftheUniversalDeclarationofHumanRightsbytheUnitedNationsGeneralAssemblyin1948,article19ofwhichstatesthat:

"Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers."

Throughoutthesecondhalfofthetwentiethcentury,moreandmorecountriescametorecognizetheneedtoguaranteetheircitizenstherightofcommunication.Thebasiclegislationofmostcountriesnowincludesregulationsspecificallydesignedtoestablish,guaranteeandprotectthisright.Therightofcommunicationisabroad-basedrightofferingawiderangeofpossibilities,whichhavesteadilyexpandedinlinewiththedevelopmentofnewtechnology.Amongsuchpossibilities,itissafetosaythatpostalcommunicationsareofparticularimportance,duetofactorssuchasaccesscosts,thedensityofthecorrespondingretailanddeliverynetworkandtheinterconnectionofnationalpostalnetworkstoformaworldwidepostalservicenetwork.

Furthermore,throughoutitshistory,thepostalservicehasbeenabletoincorporatetechnologicalbreakthroughsintoitsoperatingproceduresandserviceofferingswhich,ratherthanmakingpostalservicesobsolete,havegivenpostaloperatorsnewopportunitiestoimprovetheirefficiency,expandaccesstotheirservicesandintroducenewservices.Thus,postalservicescanbeviewedasanimportantinfrastructurenetworkfortheeffectiveexerciseoftherightofcommunication,notonlybyvirtueoftheverynatureofpostalservice,butalsoasagatewaytonewinnovationsincommunicationsmediaforthosesegmentsofthepopulationwithoutaccesstoservicessuchastheInternet.

Postalservicesarenotamonolithicblock.Onthecontrary,theyarebrokendownintodifferentareaswithdifferentcustomer,market,productandserviceprofiles.Theircommondenominatoristheirsharedinfrastructureforminganextensivenationwidenetworkhighlyinterconnectedwithavastworldwidenetwork.Thefollowingoutlineofsomeofthemajorlinesofservicesincludedinthebroadspectrumofavailablepostalservicesisagoodillustrationofthisconcept.

• Traditional mail service: Thisreferstoregulardeliveryservicesforitemssuchaslettersandprintedmatter.Sincethecontentofsuchitemslendsitselftodigitalcommunicationsmedia,theseservicesarealreadyfeelingtheeffectsofcompetitionfromexistingmedia(suchastelephone,fax,e-mail,EDI,etc.)and,inthefuture,willlikelybefacingcompetitionfromothermedia.

• Parcel service: Thisisadeliveryserviceforitemsforwhichthereisnotechnologycapableofreplacingconventionaltransportationservice.Withthegrowthininternationaltradeingeneralande-commerceinparticular,thismarketsegmentisexpandingandattractinginvestmentbylarge-scaleprivateoperatorsaroundtheglobeandso-calledcourierservices,aswellasbyairlinesandroadcarriers.

• Express mail service: Thisisahighvalue-addedrapiddeliveryservicefordocumentsandgoodsinwhichmaileditemsaretrackedfromtheirpointoforigintotheirfinaldeliverypoint.Itaimstobethemostrapidofthephysicalpostalservices.

• Integrated logistics services: Theseareserviceswhichaimtomeetcustomers'logisticsrequirements,includingthestagesprecedingandfollowingthephysicaltransmissionofgoodsanddocuments.

1.3.2

Postal services

27

• Hybrid mail service: Theseareprocessescombiningphysicalmaildeliveryandelectronicmessagingtechnology.Thebasicprocessconsistsofthecomputergenerationoflettermail,itstransmissionoverdataexchangenetworkstopostaloperators,andtheconversionoftheelectronicdataintophysicalmailitemsthroughremoteprinting.Thisprocessisconvenientandoffersagoodcost-benefitratioforusersandoperatorsalike.

• Retail services: Untilrecently,thiswasconsideredamerestageofthepostalproductionprocess.Now,itisamajorsegmentofthepostalmarket.Traditionallyviewedsolelyasaservicenetworkforattractingitemstofeedthemailstream,nowadays,servicepointsarerunlikeastorechain,offeringservicesnotdirectlyrelatedtothecarriageofmailperse.

• Financial services: Thisincludesabroadspectrumoffinancialservicesdrawingontheextensivepostalinfrastructurenetwork,themostsophisticatedofwhichareso-calledpostalbankingservicesinwhichpostalservicesplayanimportantroleaslow-costbankingserviceprovidersandconstituteanimportanttoolforfinancialinclusion.Suchservicesincludenotonlysimpledeposit-takingandsavingsandchequeaccountmanagementservices,butalsocreditfacilitiesforindividualborrowers,aswellasbillpaymentservicesforutility(water,gas,electricandtelephone)companies,fundtransfers,pensionandannuitypaymentservices,etc.

• Electronic services: Theseservicesencompasse-postalservices,postalelectronicregisteredmail,theelectronicpostalcertificationmarkandtheelectronicpostbox.

Oneofthemainresponsibilitiesofgovernmentistoenforcethelawsgoverningaparticularsociety.Accordingly,mostcountrieshavestatutesestablishing,guaranteeingandprotectingtherightofcommunication,whichisconsideredabasiccivilright.Thus,mostgovernmentsrecognizetheexistenceofregular,continuingpostalserviceaspartoftheirregulatoryframework.However,inmanydevelopingcountries,despitetheirexistence,segmentsofthepopulationstillhavenoaccesstoanysuchserviceor,inotherwords,noaccesstoaservicepointortohomedeliveryservice.Anotherlargesegmentofthepopulationisstillforcedtotravellongdistancesfromtheirhometothenearestservicepoint.

Thissituation,asitrelatestotheexerciseofbasiccivilrights,reopensanissuewhich,formany,hadseeminglybeenresolved,namely,thatoftheroleofgovernmentinredefiningthegroundrulesforthepostalsector.

Inbrief,therationaleforrevisitingtheroleofgovernmentinthepostalsectoristhatthechangingpostalenvironmentisbecomingincreasinglycomplex,engenderingnewsituationscompletelydifferentfromanythingthepostalsectorhasexperiencedatanyotherpointinitshistory,assummedupinthefollowingtable.

Factor Past Present

Monopoly Full(forlettermail)

Increasinglylimitedandviewednegatively

Operators Single(forlettermail) Multiple

Competition Almostnon-existent High

Customers Withoutrights Exigent

Innovation Almostnon-existent Fast-moving

Management Empirical Professional

Technology Minimal Necessaryandpivotal

Challenges Operational Strategic

Qualityofservice

Oflittleimportance Essential

Thus,thisnewviewofpostalissuesrequirestheestablishmentofaregulatoryframeworkreconcilingthepublicservice,socialandbusinessfacetsofpostalservices.Despiteradicalchangesinthepostalenvironment,theregulatoryframeworksformanyoftheworld'sdesignatedoperatorsarerelicsofthepast,completeanachronismsandoutoftouchwithtoday'snewrealities.

Thefirstandforemostresultofthegapbetweenthedejureanddefactosituationinthepostalsectoristheconstantemergenceofnewoperatorshaphazardlyconductingbusiness,withouteventhemostbasicregulationsto,ataminimum,establishtherightsandobligationsofgovernment,thegeneralpublic,customers,thedesignatedoperatorandprivateoperators.

Thishasunderminedtheeconomicandfinancialstabilityofthedesignatedoperator(theuniversalserviceprovider),withprivateoperatorstargetingthemostlucrativemarketsegments,ortheverymarketsinwhichthedesignatedoperatorgeneratestherevenuesneededtooffsetthecostofservicingthoseareasofthecountryinwhichithasanobligationtoensureuniversalaccesstopostalservicedespiteproblemswithstructuraldeficits.

1.3.3

Government obligations

28

Anotherresultofthisphenomenonaffectspostalcustomers–consumers,whoarestartingtogetpoorserviceduetothedebilitatedstateofthedesignatedoperator.

Thelastlinkinthechainofeffectsisthegovernmentitself,whichisforcedtodealwithaseriesofproblemssuchasdissatisfiedcustomers,constantrequestsforsubsidiesfromthedesignatedoperatoranddisputesbetweenthedesignatedoperatorandprivateoperators.

Thus,eventually,thefailureofgovernmenttoplayitsroleinestablishingandenforcingbasicregulationshasaboomerangeffect,triggeringaseriesofproblemsbuildingupindefinitely,untilthegovernmentitselftakescontrolofthesituationandimplementsnecessarycorrectivemeasures.

ModuleVoftheGuidedealsspecificallywiththeissueofregulationandprovidesguidancefortheestablishmentofgroundrulesandcriteriadesignedtofacilitatethegovernment'staskofregulatingthepostalsector.

AsdiscussedinModuleIIoftheGuide,theuniversalpostalserviceisoneofthemainbastionsofsociety,guaranteeingtherightofcommunicationand,assuch,isconsideredagovernmentobligation.ThoughtheprincipleofuniversalpostalservicehasbeenaroundsincetheUPUwascreated,aspartoftherationalefortheveryexistenceofthepostalsystem,itwasnotuntilthelastdecadeofthetwentiethcenturythatcircumstancesengenderedbyglobalizationandsweepingchangesinthepostalenvironment,particularlyinEurope,madegovernmentsawareoftheneedtoclearlydefinetheterms,conditionsandfeaturesoftheuniversalpostalservice.

The1999UPUCongressinBeijingdecided,notonlytospecificallyincorporatetheconceptoftheuniversalpostalserviceintotheUnion'sActs,butalsotosingleouttheuniversalpostalserviceasthefirstandforemostobjectiveofitsglobalstrategy.

TheBeijingCongressrecognizedtheneedtosetclearconditionsandstandardsfortheprovisionoftheuniversalpostalservice,callingongovernments,designatedoperators,restrictedunionsandotherstakeholdersinthepostalsectortomakeaspecialefforttoestablishaframeofreferenceforensuringthedeliveryoftheuniversalpostalservicetoallsegmentsofthepopulation.Discussionswithrespecttothescopeofuniversalpostalserviceobligationshavebeenheatedandarestillongoing,aspartofthehistoricalclashbetweenpolicieschampioningthesocialresponsibilitiesofgovernmentandpositionsadvocatingeconomicopenness.

Theworldpostalstrategies,adoptedbytheBucharest(2004),Geneva(2008)andDoha(2012)CongressesoftheUniversalPostalUnion,confirmedthevitalimportanceoftheuniversalpostalserviceand,amongotherthings,expressedthewishthatmorecountrieswoulddefinetheuniversalpostalserviceintheirlegislation,applyingcriteriaandrulesconcerningaccess,contentandqualityoftheuniversalpostalservice,therebyreducingthelevelofpostalexclusion.OneofthegoalsoftheIstanbulWorldPostalStrategy(IWPS),adoptedbythe2016UniversalPostalCongress,istofostermarketandsectorfunctioningbydefininganddevelopingtheuniversalpostalobligation.

Therecontinuestobeurgentneedtostrengthentheuniversalpostalserviceindevelopingcountries,manyofwhichareyettohaveaccesstoqualitypostalservices.Fortheirpart,theindustrializedcountriesareengagedinintensediscussionsasprivate,andcertaindesignated,operatorsareseekingtoreducethescopeoftheuniversalpostalservice.

Whatisinterestingaboutthecurrentinternationaldebateinthisrespectisthat,atnotime,havegovernmentseverquestionedtheirdutytoprovidetheuniversalpostalservicesince,asexplainedinModuleII,countriessigningtheUPUActsundertaketoprovideabasicpackageofcoreservicesasdefinedintheUniversalPostalConvention.Asaresult,suchdiscussionsrevolvemainlyaroundthefinancingtobeobtainedbythedesignatedoperatortocoverthecostofguaranteeingthisinalienablecivilright.

Thus,oneofthemaintasksofgovernmentistodefinethescopeandcharacteristicsoftheuniversalpostalserviceregardingitsaccessibility,geographicanddemographiccoverage,qualityandprice.TheUniversalPostalConventionprovidesthatsuchdefinitionmusttakeaccountoftheneedsofthegeneralpublicandofnationalconditions.

1.3.5

Universal access to postal service and competitionAtthebeginningofthediscussionprocessatthecountrylevelwithrespecttotheneedtoregulateorsetconditionsfortheprovisionofuniversalpostalservice,unfortunately,agreatdealoftimeiswasteddebatingtheissueofuniversalaccessversuscompetition,withcertaingroupsviewing,andevenseekingtoblock,anyinitiativesdesignedtopromoteuniversalaccessasanattempttoundercutthefreemarketsystem.

1.3.4

Universal postal services

29

Accordingly,itisvitalforanydiscussionoftheissueofexpandinguniversalaccesstopostalservicetobeapproachedfromthestandpointoftheneedforgovernmenttofulfilitsincontrovertibleobligations,whichneednotprecludecompetition,since,inpractice,competitionisarealityinalmostallcountries.

Themannerinwhichthisissueisbroachedislargelydeterminedbygeographic,economicandsocialconditionsatthecountrylevel,asillustratedbelowbasedonthreehypotheticalscenarios.

Thisfigureisdesignedtoillustratehowthedeterminingfactorsintheuniversalaccess-competitionequationlieoutsidethepostalsectorandhowbalancingthisequationrequires:

a. Specificity:Therightmixisonewhichisspecifictoaparticularcountryorregion,inlinewithsimilaritiesinsuchfactors.

b. Versatility: Thisallowsfortherebalancingoftheuniversalaccess-competitionequationinlinewithprogressinnationaleconomicandsocialdevelopmentefforts.

c. Objectivity: Quantitativeanalyticaldataforuseasthebasisfordecisionmakingatpolicylevelsofgovernment.

Thescenariosoutlinedintheprecedingtableareonlythreeexamplesofawiderangeofpossiblehypotheticalsituationsandarepresentedsolelyasaframeofreferencefordiscussionpurposes.Itwillbeuptothegovernmentofeachcountrytoleadthepostalcommunityandthepublic-at-largeinabroad-baseddiscussioninsearchoftheproperbalancebetweenuniversalaccessandcompetitionwithinthepostalsectorinlinewithnationwideconditions,enablingthepostalsectortoachievebothitssocialandbusinessobjectives.

ThisissueisexploredatgreaterlengthinModuleII,whichtakesanin-depthlookatthefoundationformappingoutapostalreformprocesswithoutlosingsightofthebasicneedtoprovidetheuniversalpostalservice.

1.4

Role of the postal sector

in the national development

processOneoftherecurringthemesindiscussionswithrespecttopostalreformanddevelopmentisthelowpriorityaccordedthepostalsectorinthewakeoftheenormouseconomicandsocialchallengesfacinggovernmentsincertainpartsoftheworld.Underlyingthisissueisthenotionthatfocusingonandinvestinginthepostalsectorwillprecludeprogressinotherimportantsectorssuchashealth,education,security,housingandtransportation.

Thefollowingdiscussionattemptstoshowthat,ratherthancompetingforattentionandpriority,thepostalsectorhasalargeuntappedpotentialwhichcouldspurprogressinothersectorsoftheeconomy.

Section1.4.1portraysthepostalsectorasanintegralpartofanation'sinfrastructure,whoseexpansionandmodernizationarepivotaltocountrydevelopmentefforts.

Section1.4.2discussesitspotentialtohelpfurtherthenationaldevelopmentprocess,notonlythroughitsownintrinsicgainsbut,firstandforemost,byvirtueofitspotentialtohelpspurprogressinothereconomicandsocialdevelopmentsectors.

1.4.1

Communications infrastructure

and postal communications

Socialrelationshipshavegrownincreasinglycomplexinthewakeofsocialdevelopmentandofbreakthroughsintechnology,inwhichtimeandspacearenolongerbarrierstotheinteractionofdifferentsocialagentsinthebroadestsenseoftheterm.

Communicationsmediaarecurrentlyaffectingalldomesticcultural,political,socialandeconomicrelations,asbasicinfrastructurefortoday'smodernsocialorganizations.TheInternetisagoodexample,asthebasisforahostofbusinessandotheractivities.Itissafetosaythat,withoutmoderncommunicationstechnology,suchbusinessescouldnotexist.

Businesses,themaingeneratorsofmailtraffic,areconstantlyfindingnewwaysofmeetingtheircommunicationsneeds.

Factor Country "A" Country "B" Country "C"

Geography Unfavourable Mixed Favourable

Population Heterogeneous Intermediate Homogeneous

Percapitaincome Low Medium High

Concentrationofincome

High Medium Low

Politicalclimate Unstable Intermediate Stable

Legalmodel Unstable Intermediate Stable

Schoolenrolmentratio

Low Medium High

Socialneeds Primary Secondary Tertiary

Emphasis Universalaccess Balance Competition

30

Thisischangingthemixofinstalledinfrastructureinthepostalsector,asillustratedinthefollowingfigure:

Inshort,thedevelopmentofnewinformationtechnologyhashelpedreconfigureproductioninfrastructureinthepostalsector,whichhastakenadvantageofthenewopportunitiesaffordedbysuchtechnologyto:

• boostproductivity; • providenewservices; • improveexistingservices; • establishreal-timemanagementmodels; • improveworkingconditionsforpostalemployees;

• refinemanagementprocedures; • improvecustomerrelations; • reduceoperatingcosts.

1.4.2

Contribution to economic

and social development

Aspreviouslydiscussed,currenteconomicandsocialdynamicsrequireproperinfrastructuretobolstercountrydevelopmentefforts.Inadequatecommunicationsinfrastructurecanpreventacountryfrommovingaheadinitsdevelopmentprocess.Clearly,developmentofthecommunicationssectoraloneisincapable,initself,offurtheringnationwideintegrateddevelopmentefforts,whichalsorequiresprogressinotherequallyimportantsectorssuchaseducation,health,security,transportation,housing,urbaninfrastructureetc.,butitisalsoclearthatastagnantormalfunctioningcommunicationssectorcanmakeitveryhardtomoveforwardinotherareas.

Anyoneunfamiliarwithpostalprocessescouldeasilyunderestimatethenationwideimportanceofpostalservices,whichisonlylogicalsince,inmanycases,thepublicdoesnotrealizethat,behindamailboxorpostoffice,isawholeseriesofunits(offices,operationscentres,vehicles,etc.)interconnectedinanintricatenetwork,asrequiredforservicedeliverypurposes.

Inshort,today'spostalservicehasamoremuchactiverolethaninthepast.Moreover,postalservicesaroundtheworldhavedevelopedcountlessvalue-addedproductsandservicesandhavebecomeimportantenginesofnationaldevelopment,asfacilitatorsofdifferentpublicandprivatedevelopmentinitiatives.Thefollowingbriefcasestudiesillustratethedevelopmentpotentialofpostalservice.

a. Inoneparticularcountry,thegovernmentadoptedapublicpolicyaimedatboostingnationalsavings.However,mostofthepopulationhadnoaccesstobankingservices.Inthewakeofapolicydecisionhelpingtolaythenecessaryregulatorygroundworkforthispurpose,thedesignatedoperatorintroducedanewlineoflow-costbankingservicesaccessibletothosesegmentsofthepopulationbypassedbytheregularbankingsystem,therebyfurtheringnationalgovernmentgoalsandstrengtheningitsinternaloperationsthroughthedevelopmentofnewpostalfinancialproducts.

Past

Present

Logistics

Delivery

Retail services

Retail services

Logistics

Digital

Delivery

31

b. Thecombinationofpoorhealthconditionsandanuninformedpublicinaspecificareaofanothercountrywascreatinghighchildmortalityrates.Thelocalpopulationhadverylittleincome,requiringthatitspendallitsfreetimeonincome-producingactivities,makingformaleducationprojectsunfeasible.Partneringwiththedesignatedoperator,thegovernmentwasabletouselocalmailcarrierstoconductaninformationandeducationcampaigntargetedspecificallyatthepopulationofthatarea,whichvisiblyreducedtheseverityoftheaforesaidproblems.

c. Inmostcases,exportproceduresindevelopingcountriesareextremelycomplex,bureaucraticandcostly,makingtheminaccessibletomanysmallandmedium-sizedbusinesses.Theresultisahighconcentrationofexportsinasmallnumberofspecificproducts,manufacturersandregions,makingsuchcountriesmorevulnerabletointernationaleconomicrisks.Thegovernmentofonesuchcountrydecidedtofacilitateitsexportsbyintroducingasystemofexportincentivesformicro,smallandmedium-sizedenterprises(MSMEs).

d. Toaccomplishthis,itsimplifiedexportproceduresforMSMEs,whichwereconductedbythedesignatedoperator,whichwasnotonlyputinchargeofshippingmerchandise,butofallcustomsformalities.Asaresult,localcraftsmenandsmallbusinessesinremoteareaswithoutprioraccesstotheinternationalmarketweresoonexportingtheirproducts.

e. Inyetanothercountry,publicschoolstudentswererepeatedlyforcedtowaitfortheirgovernment-furnishedtextbooks,whosedeliverywasgenerallydelayed.Tosolvethisproblem,theofficialpostaloperatortookoverallnecessarylogisticsservicestoensuretheon-timedeliveryoftextbooks,whereuponallpublicschoolstudentsbeganreceivingtheirbooksbeforethebeginningoftheschoolyear.

f. Internetservicecoverageindevelopingcountriesisstilllimitedduetoacombinationofcircumstances,suchaslow-densitytelephonenetworks,thehighcostoftelephoneservice,thelimitednumberofserviceproviders,thehighpriceofcomputersandlowincomelevels.Toovercometheseseriousstructuralconstraints,thegovernmentofoneparticularcountryapprovedaprojectdesignedbyitsdesignatedoperatorcallingfortheinstallationofpublicInternetboothsinpostofficefacilities,givingthepublicfreeaccesstobothe-mailandInternetservice.

Obviously,theseareonlyafewexamplesofsuccessfulorongoingprogrammesandexploreonlyahandfulofthepotentialsolutionsofferedbythepostalsectorfortheimplementationofgovernmentprogrammesandprivateinitiatives.

Thus,postalreformeffortsdesignedtospurgrowthanddevelopmentwithinthepostalsectorarenotonlyasolutiontosector-wideproblems,butinvestmentsinacountry'seconomicandsocialdevelopment.

ModuleIVoftheGuidediscussesthemainconditionsforturningthedesignatedoperatorintoanefficientserviceproviderthatisableandpreparingittofollowacomprehensivedevelopmentstrategytoenableittosurvivetheincreasinglypowerfulshocksassociatedwithtoday'snewglobalpostalenvironment.

33

Inmanycountries,theissueofpublicsectorreformisfarfromnew.Onthecontrary,inrecentyears,manygovernmentshavebeenmakingsignificanteffortsandimportantstridesineconomicandsocialareas.Examplesincludethepower,sanitation,transportationandtelecommunicationssectors,whichhavebeensubjecttodifferenttypesofreformsinanumberofcountries,themagnitudeanddepthofwhichvariesaccordingtothespecificsectorandcountryinquestion.Asfarasthepostalsectorisconcerned,inmanycases,theuniquefeaturesofthissectorruleoutmerereplicationsofeventhemostsuccessfulsolutionsimplementedinothercountries.

Section2.1.1looksatthebroadspectrumofstakeholdersinvolvedinthissector,whilesection2.1.2discussestheresultingneedtoclearlydefinepostalreformobjectivesasaframeofreferenceforthegeneralpopulation.Section2.1.3talksaboutessentialpoliticalconditionsforundertakingpostalreform,whilesection2.1.4examinesequallyessentialtechnicalconditionsforimplementingareformprocess.Thediscussionconcludeswithalookinsection2.1.5atthespecificissueswhichneedtobeaddressedinpostalreformprocessesindevelopingcountries.

Withtheirnature,postalservicesimpactonallsocialstrataandsegmentsofsocietywhich,likeitornot,areaffectedbypostalreformefforts.Accordingly,oneofthebasicconditionsforthesuccessofareformprogrammeinthepostalsectoristhebroadestpossibleinvolvementofallaffectedstakeholders.Inthiscase,theconceptofinvolvementisnotsimplyanabstractnotion,butreferstoanorganizedapproachtothepromotionofactiveparticipationbyallcorrespondingstakeholders,accordingtotheirrespectiveresponsibilitieswithregardtothepostalsector.

National governmentThemostimportantstakeholderisthegovernment,whichhastheultimateresponsibilityforensuringthatthecountryhasawellorganized,qualitypostalservicegearedtonationwideneeds.

Inlinewithitsorganizationalresponsibilitiesinthepostalsector,thegovernmentshouldplayaleadershiproleinthepostalreformprocess,asthepublicserviceorientationofthepostalsectoringeneral,andofuniversalpostalserviceinparticular,requiresthatataskasimportantaspostalreformbehandledbythesamepartyresponsiblefordealingwithandreconcilingallthecomplicatedissuesatstakewithinthepostalsector.

However,governmentisactuallyacollectionofdifferentstakeholdersdirectlyinchargeofthepostalsector.Theexecutiveandthelegislativeincludenumerousexamplesofgovernmentstakeholders.

Intheexecutive,thegoalistoengagethechiefexecutiveorheadofstate,whogenerallyhastheauthoritytoputforwardtoppriorityinitiativesinfurtheranceofnationaldevelopmentgoals.Inadditiontotheheadofstate,thereareanumberofotherimportantareasoftheexecutivewhichshouldbeplayinganactiveroleinpostalreformefforts,beginningwiththesupervisoryministryforthepostalsector.

The supervisory ministry and other ministriesThemajorityofcountrieshaveaspecificministryinchargeofpostal,telecommunicationsandradiobroadcastingservices.Inothercountries,supervisionoftheseareasispartofaministry'sgeneralresponsibilitieswithrespecttoinfrastructureorotherpublicservices,suchaspublicworks,transportationandenergy.Regardlessofthetypeofsupervisionforthepostalsector,itisimportantthatthesupervisoryministry(orministerial-leveldepartment)beanessentialpartofanypostalreformeffort,withoutwhose"buy-in",anydevelopmentinitiativeinthissectorwouldvirtuallybecondemnedtofailure.

Postal sector reform

2

2.1.1

Stakeholders in postal reform

processes

2.1

Characteristics of postal reform

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Inadditiontothesupervisoryministryperse,thereareanumberofotherministriesatthissamelevelwithanextremelystronginfluenceinshapingthefateofthepostalsector,beginningwiththeministryofplanningwhich,inmanycases,isinchargeofframingmajornationaldevelopmentplans,inadditiontodrawingupandmonitoringimplementationofthenationalbudget.

Anothersuchministryistheministryoffinanceinchargeofadministeringpublicfunds.Somedesignatedoperatorshavetheauthoritytomanagetheirownincomeandspending,whileinothercases,wherethedesignatedoperatorisoperatingataloss,theresponsibilityforitsfinancialmanagementisvestedintheministryoffinance.

Therearealsoentitieswithintheexecutivedevotedtothemodernizationofgovernment.Suchentitiesoftenoperateattheministerialleveloratalevelextremelyclosetomajornationaldecision-makingcentres.

Theimportanceofgovernmentgoesbeyondtheimmediateneedtoraisefundingtofinancereformefforts.Sensitizingandengagingallareasofgovernmentisanimportantstepforwardinshapinganinternalvisionwithintheexecutiveinwhichthepostalsectorisregardedasanintegralpartofthenation'sinfrastructureand,assuch,aswarrantinginclusioninnationaldevelopmentprogrammes.

Agoodunderstandingofthepostalsectoronthepartofgovernmentisextremelyimportant,notonlyforpostalreformperse,butalsoinday-to-daypostalaffairs,inattemptingtomeetsector-wideeconomicandfinancialchallengesrelatingto:

Ì theshapingofgovernmentandsectoralpolicy;

Ì annualandmulti-yearbudgets;

Ì priceandratenegotiations;

Ì theapprovalofprojects;

Ì theestablishmentofsectorfinancinginstruments.

Thus,governmentinvolvementinpostalreformeffortsisessential.Anunderstandingofproblemareaswithinthepostalsectorandofrecommendationsforitsdevelopmentwouldsignificantlyimproveinternaldialoguewithintheexecutivebranchofgovernmentandthesynchronizationofsectorworkandgovernmentprogrammes.

The designated operator Logically,theleadingroleinpostalreformeffortsgoestothepostaloperatordesignatedtoprovidetheuniversalpostalserviceandtofulfilthegovernment'scommitmentswithrespecttointernationalpostaltreaties.Thedesignatedoperatorisgenerallyattacheddirectlytotheexecutive,eitherasanagencyoperatingunderthedirectsupervisionofaministryorasagovernmententerpriseorothertypeoflegalentity.Forpurposesofclarity,regardlessofitsactuallegalstatus,thispostaloperatorisreferredtothroughouttheGuideasthe"designatedoperator",withtheterm"designated"referringtoitsgovernmentmandatetoprovideuniversalpostalservice.

Withitsuniversalpostalservicemandate,thedesignatedoperatorcannotbetreatedthesameasotherprivateserviceoperatorsonthepostalmarket.Onthecontrary,itsuniquefeaturesrequireadifferentapproachfromthatofotherserviceoperators.Itisnotaquestionofgivingitpreferentialtreatmentbut,rather,ofrecognizingthatitssituationissomewhatmorecomplicatedthanthatoftheprivateoperatorsonthepostalmarketwithoutanyuniversalpostalserviceobligations.

The postal workforceTheinvolvementofpostalworkerswho,inmostcountries,areorganizedintounionsortradeassociationsisamustinanyreformprocess.Insomedesignatedoperators,labourisadrivingforceforchangewhile,inothers,itwilltryandblockanysectorreformmovement,largelyoutofafearthatsuchreformscouldmeanalossofjobsorotherdrawbacksforpostalworkers.Whiletheinvolvementoftheemployeesofprivateoperatorswouldbedesirable,itisdifficulttoachieveastheyarerarelyorganizedintounionsortradeassociationswithinthepostalsector.

Atanyrate,labourcanbeeitheramajorcatalystoropponentofpostalreform,bothwithinandoutsidepostalenterprises.Thisiswhy,fromallpointsofview(ethics,transparency,communications,partnership-building,etc.),thepostalworkforceneedstobeengagedandinvolvedinthepostalreformprocess.

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The legislatureSectorreformandmodernizationeffortsareunderpinnedbytheorganizationalstructureofthepostalsectorandtheprovisionsoflegislationpassedbythenationalCongressspecificallyspellingoutthepostalserviceobligationsofgovernmentandlayingdowngroundrulesforserviceoperationonthepostalmarket,withoutaffectinguniversalserviceobligations.Thus,theengagementandinvolvementofthelegislativebranchofgovernmentisvitaltothesuccessofpostalreformefforts.Agoodproposalismeaninglessifitisnotfullyunderstoodandbackedbythoseinchargeofthedraftingandpassageoflegislation,whichisnotonlyameansoflegalizingsuchproposals,butanimportantsymbolofreformefforts.Manycountrieshaveabicamerallegislature(aSenateandaChamberofDeputies/Assembly)withspecialcongressionalcommitteesinchargeofconductingtechnicalstudiesofthetextsofproposedlegislationbeforesubmittingthemtoaplenarysessionofthelegislature,suchasaCommunicationsCommittee,inwhichcasetheengagementofsuchacommitteeisalsoimportant,givenitspotentialabilitytoshapetheopinionoftheentirelegislature.

The postal regulatorSomecountriesalreadyhaveagovernmententitytaskedwithregulatingprovisionofthecountry'spostalservices.Suchentitieswereoftencreated,however,withoutlegalinstrumentsprovidingfortheentiresector,sotheirauthorityislimitedtothedesignatedoperator.Theymaybeadepartmentofthesupervisoryministry,oraseparateadministrativebody.Whensuchentitiesexist,theirinvolvementisimportant,astheyarechargedwithensuringthatpostalservicesareprovidedinaccordancewiththeexistinglegalframework,andwithprotectinguser/customerrightswithinthepostalsector.

Special interest groupsWhilethelegislatureisthemaininstitutionrepresentingthepublicinterest,theintricacyofmodernsocietyhasgivenrisetoavarietyofdifferentgroupsandinterests,whicharealsorepresentedbyorganizationsworkingonbehalfofspecificstatusgroups,classes,othergroups,minorities,etc.

Thus,thepublicisalsorepresentedbyorganizationsendeavouringtoprotectthespecialinterestsofdifferentgroups,whichmustbeheardandwhoseconcernsmustbeaired.Inotherwords,thereisabroadspectrumofspecialinterestgroupsrepresentingpostalcustomersandconsumers,aswellasbusinessandindustryplayers.Thistypeofsocialrepresentationisplayinganincreasinglyimportantroleinthedemocracy-buildingprocess,makingitnecessarytoalsoengagesuchgroupsinpostalreformefforts.

Private operatorsAlthoughprivateoperatorspertaintothecategorydescribedabove,theywarrantseparateconsiderationowingtotheirimportance.Inanumberofcountries,alargeportionofthepostalmarketisinthehandsofprivateoperators,andinotherstheirmarketshareisincreasingbytheday,particularlywiththedisappearanceofthetraditionalpostalmonopoly(areasreservedforthedesignatedoperator).Theyaredominantintheexpressmailservicessegment,andtheyexerciseconsiderablelobbyingpower,sofailuretoincludetheminthepostalreformprocesscouldspellthedownfallofanylegislativeproposaltowhichtheyareopposed.Consequently,itisimportantthatassociationsofprivateoperatorsbeinvolvedinthereformprocess,andthattheirconcernsbeaddressed.

However,theunshakableapathy(oroutrightrejection)ofstakeholderstowardspostalreformeffortsinthefaceofattemptstoengagetheminthisprocessshouldcomeasnosurprise.Thissortofapathyisbasicallyareflectionofoneoftwoattitudes,namelycandidindifferenceorresistance.Thisraisesthequestionofhowtosparkaninterestinreform.Onewayistodemonstratetheadvantagesofreformingthepostalsectorforeachgroupofstakeholders.

Postalreformistechnicallyandpoliticallyfeasibleonlyifallstakeholders(government,postaloperators,postalworkers,consumers,etc.)appeartohavesomethingtogainfromthereformprocess.Asusedinthiscontext,theterm"gain"hasamuchbroaderconnotationthanamerefinancialgain.Forexample,betterqualityservicecanmeananimportantgainforpostalcustomers.However,inmostinstances,notallstakeholdersactuallyhavesomethingtogain,inwhichcaseitisimportanttothoroughlyandcarefullystudythepositionsofallpartiesconcerned,endeavouringtopindownboththeircommonandopposinginterestsandgoals.Evenwithoutageneralconsensus,aneffectivestatementofthemainobjectivesofthereformprocessstillhastheadvantageandlureofmobilizingallstakeholdersaroundsuchobjectives.

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Definingtheobjectivesofareformprocessisoneofthemostimportantandcrucialfactorsinensuringasuccessfuloutcomeand,assuch,shouldtakeprecedenceoverallotheractivities.

Itisquitecommon,intime,forongoingactivitiesunderreformprogrammesmountedwithoutaclearlyestablishedframeofreferencetogetofftrackwithrespecttotheoriginalgoalsofthereformeffort.Itisalsocommonforsucheffortstogetboggeddowninlengthydiscussionsinwhichtheendgoalsofthereformprogrammearerelegatedtosecondaryimportance,withmostofthetimespenttalkingaboutthemeanstotheend.

Thus,thefirststep,beforedevelopinganynewmodels,shouldbeabroad-baseddiscussioninsearchofanswerstocorequestionssuchasthefollowing.

a. Why undertake a postal reform programme? b. What existing problems need to be addressed? c. What potential problems run the risk of destabilizing the postal sector?

Clearly,thisisfarfromanexhaustivelistofquestionswithregardtopostalreformissues,butitgivesussomeideaofthemajormisgivingswhichneedtobeaddressedfromtheoutset.Thoughtheymayappearsimpleonthesurface,eventhesethreequestionshavenoquickoreasyanswers,giventhemixofdifferentstakeholdersinvolvedinapostalreformprocess.

Theoptimalmodelisoneinwhicheachstakeholderisabletoexpressitspointofviewwithrespecttosuchquestions.

Whileitistruethatsuchopen-endedquestionstendtogiverisetoallsortsofdifferentanswers,givenconditionsinthepostalsectorsofdifferentcountriesandthefactthatwearenotdealingwithisolatedsituationsbutwithdifferentpartsofasingleinteractivenetwork,hopefully,theywillproduceasetofcoreissuesasfocalpointsforapostalreformeffort.Differentcountriesmaybeatdifferentstagesofprogressindealingwithsuchissues,dependingontheirlevelofdevelopment,but,asawhole,theyareagoodfoundationforapostalreformprocessandagoodbasisforsettingobjectivesandestablishingguidelinesforsectorrestructuringefforts.

Demarcation What is the postal sector and what are its interfaces with other national infrastructure sectors?

Commitment A clear commitment to modernize and develop the postal sector. There are cases of postal reform efforts whose objectives are not focussed on the postal sector per se, but on goals and targets outside the postal sector, which poses a serious risk of harm and setbacks for postal services.

Adaptation Help the postal sector adapt to changing social, political and economic realities to enable it to offer products and services which the public considers as valid options for meeting its needs and, thus, as practical engines of nationwide social and economic change.

Development Provide the postal sector (primarily the designated operator) with new resources for the assimilation of new breakthroughs in technology to improve the efficiency of the postal operator and the quality of services rendered and expand postal product and service offerings.

Expansion of universal access While, comparatively speaking, postal services are much more accessible than other national infrastructure sectors, efforts to meet the challenge of providing universal access to postal service are still under way. In fact, with the help of new technology, the public has made important strides in gaining access to other communications resources which, in some areas, are already more widely available than postal services.

Organization In addition to expanding universal access, it is also important to consider the economic dimension of the postal sector, in which there is enough of an economic interest to attract and sustain large numbers of private service operators. To ensure harmonious relations between all corresponding stakeholders under the best possible conditions, it is vital to develop an economic model for the postal sector giving each corresponding stakeholder a clear notion of its operational possibilities and limitations.

2.1.2

Main objectives of postal reform

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Financing By definition, universal services are not generally profit-making activities and must have a clearly defined source of financing. This issue is becoming increasingly important in the face of efforts to expand universal service coverage.

Planning Postal reform efforts are difficult to undertake and complete within the framework of a short-term programme, given the complex and comprehensive nature of reform processes, requiring a long-range vision, with intermediate stages and well-defined interim goals and objectives for monitoring the progress of work and, depending on the extent of the consensus reached by corresponding stakeholders, possibly a phased approach, in line with reform prospects at a particular point in time.

Designated operator Rehabilitation, strengthening and modernization of the designated operator, whose universal postal service obligations set it apart from other service operators.

Indevelopingcountries,thedesignatedoperatorgenerallyfacesmajoreconomicproblems,suchasincreasingoperationallosses.Asaresult,newgovernmentsoradministrationsoftenmistakenlyaskthefollowingquestion:Whatneedstobedonetostrengthenthedesignatedoperator?

Theyshould,however,beaskingthefollowingquestion:Whatneedstobedonetoprovidequalitypostalservicestotheentirepopulation?Thedesignatedoperatorisveryimportantinthatitisthegovernment'smaintoolforimprovingpostalservices,which,togetherwithprivateoperators,constitutesthecountry'spostalservicesoffering.

Thereformshouldhavemoreambitiousgoalsthanmerelytransformingthedesignatedoperator.

Thus,agovernmentmountingapostalreformprogrammecouldstatethemainobjectivesofsuchaninitiativeinthefollowingterms:

1. Ensure universal access to postal service: recognizethewidespreadcoverageofpostalservices,whichmustbesustainedand,moreimportantly,expanded,bybroadeningaccessandextendingserviceintoareaswhereitiscurrentlyunavailable;

2. Find the right balance between universal coverage and competition: promoteuniversalaccesstopostalservicewhileatthesametimehelpingthepublicreapthebenefitsofanenvironmentinwhichprivateoperatorscompetingforalargermarketshareofferincreasinglyhighqualityservicesatlowerprices;

3. Promote new service development: breakthroughsintechnologyandtherapidgrowthofothersectorsoftheeconomyaregoingtorequirenewtypesofsupportingpostalservicesforothereconomicactivities,providingnewsolutionsbettergearedtosociety'sneeds;

4. Strengthen the role of the postal sector as an instrument of economic and social development: recognizethepostalsectorasanimportantpartofthenation'sinfrastructureanditsphysicalnetworkasameansofexpeditingbusinessactivitiesthroughoutthecountry,particularlyinnationaldevelopmenthubs.Italsorepresentsanimportantvehicleofsocialandfinancialinclusion,primarilybyprovidingaccesstoinformationactivities,educationalandculturalinitiatives,and,whereapplicable,financialservices;

5. Ensure self-sustaining universal postal service: thisestablishestheneedforreformeffortstopreservethesystem'sself-financingcapacity,whichrulesouttheimplementationofanymodelsunderminingthefinancialstabilityofthedesignatedoperatororrequiringtheuseofadditionaltaxrevenuestosustainessentialnation-wideservices;

6. Strengthen the role of the postal sector as an interactive channel of communication between government and society: recognizethepostalsectorand,morespecifically,theuniversalserviceoperator'sextensiveretailanddeliverynetworkasanimportantvehicleforexpandingthegovernment'ssphereofoperationandimplementingpublicpolicy,particularlyinareasnotservedbyothergovernmentagencies,programmesandinitiatives;

7. Restructure the designated operator: recognizetheneedfordeep-seatedstructuralchangesinthedesignatedoperatortovestitwiththebasicqualitiesneededtoimproveitsperformanceonthepostalmarketinthewakeofthereformeffort;

8. Prepare the postal sector for international integration: studytheongoingdeep-seatedstructuralchangestakingplacewithintheinternationalpostalcommunity,andcommittopreparingthecountrytoconsciouslyandactivelymakeaplaceforitselfinanewglobalpostalenvironment;

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9. Strengthen the regulatory role of government: openlyshouldergovernmentalresponsibilitiestogovernthepostalsector,firstbyestablishingaregulatoryframeworkandsubsequentlybydischargingitsnaturalregulatoryfunctions;

10. Promote job creation: understandtheimportanceofemploymenttothepublic-at-largeandrecognizethatlayingthegroundworkfordevelopmentofthepostalsectoralsomeanstakingspecificmeasurestohelpcreatenewjobsandpreventjobinsecurity.

Beforesettinginmotionanypostalreformprocess,itisimportanttoconfirmtheexistenceofcertainnecessaryprerequisitesforthesuccessofsuchanundertaking.

Asdiscussedearlier,thefirstandforemostrequirementisaclearpoliticalwilltoundertakeapostalreformeffortonthepartofgovernmentandotherstakeholders.Withoutsuchpoliticalwill,itwouldbeimpossibletoimplementaprogrammeofsuchmagnitudeimpactingonallsuchparties.Apoliticalconsensusaroundtheneedforchangeisoftengroundedintheexistenceofcommonproblemsorinageneraldissatisfactionwiththecurrentsituation,promptingasector-widerestructuringeffort.However,itisimportanttodistinguishbetweenaconsensusaroundtheneedforchangeandaconsensusaroundaproposalforchange.

Theformerisageneralperceptionoftheneedtodosomethingtochangethestatusquo.Thelatterspecificallyaddresseswhatneedstobedone.Obviously,thelatterconsensusismoredifficulttoachieve,butnorisitalwaysthatsimpleoreasytoforgethefirsttypeofconsensus.Suchaconsensusisoftenachievedintimesofcrisis,inthefaceofastateofemergency.However,underothercircumstances,itmaybenecessarytoworkhardtobuildaconsensusaroundtheneedforchange,sincecertainstakeholdersmayhaveaspecialinterestinpreservingthestatusquo.

Theroleofgovernmentistointroducetheissueoftheneedforpostalreformintothenationaldiscussionprocess.Incaseswherethereislittleinterestinorevenresistancetoundertakingareformeffortfromotherstakeholders,asteadfastpolicydecisiononthepartofgovernmentcouldattractandmotivatecertainpartieswho,otherwise,wouldprefernottogetinvolvedinsuchdiscussionsand,insomecases,eventhoseopposedtoapostalreformprogramme.

Wheretrulycommittedtoareformeffort,thegovernmentand,morespecifically,theexecutivewillexpressitsspecificintentionsinavarietyofdifferentforms,includingbutnotlimitedto:

a. National development plans: includingpostalissuesinnationaldevelopmentplansandpolicies,showingthatthepostalsectorisconsideredimportanttothenation'sprogress,anintegralpartofthenationalinfrastructure,andthatitsdevelopmenthelpsfosterthenationwidedevelopmentprocess;

b. Funding: allocatingfundingforsectorreformwork(studies,research,seminars,technicalservices,etc.);

c. Technical resources:formingagroupofhigh-levelexpertstoperformtechnicalstudies,analysesandplanninganddesignworkforpostalreformprogrammesandenteringintoagreementswithdomesticandinternationalagenciesandorganizationsinapositiontoprovidetechnicalcooperationservicesforcorrespondingreformprogrammes.

d. Legal backing:issuingexecutiveorders,decrees,etc.providingabasicframeworkforlegalreformefforts.

Itisawell-knownfactthatmostgovernmentsgivetopprioritytocompellingsocialissues(health,education,security,etc.)and,asaresult,tendtoputoffaddressingpostalissues.

Thus,itisvitaltoconvincegovernmentofficialsthatthepostalsectorhasgreatpotentialasasupportsystemforgovernmenteffortstotacklesocialproblems.Therearecountlessexamplesofcountriesaroundtheglobeinwhichthepostalserviceisamajorlinkinthegovernmentassistanceandsocialservicechain.

Manygovernmentsarealreadyawareofthis.Othersarenot.Insuchcase,thelegislaturecanbeanimportantgovernmentconsciousness-raisingagenthelpingtoconvincetheexecutivetoputthepostalsectorhigheronitslistofpriorities.Accordingly,thelegislaturecouldbearealallyinapostalreformeffort.Itspoliticalandsocialsensitivity,shapedbythepublicinterest,makesitagoodforumforestablishingandassessingtheresponsivenessandcommitmentofgovernmenttodevelopmenteffortsinthepostalsector.

Thedesignatedoperatorisanotherstakeholderwhosepoliticalwillisessentialinanyreformprocess.Inmostcases,itisthemaindrivingforcebehindthereformeffort,asthepartymostdirectlyaffectedbythechangestakingplaceinthepostalsector,includinggrowingcompetition,amoreexigentclientele,thenewchallengesraisedbymoderntechnology,andtheincreasingglobalizationofpostalserviceoperations.Itisoftenthedesignatedoperatorwhichwillasktheexecutiveandthelegislaturetomakestructural

2.1.3

Political conditions for postal reform

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changesinthepostalsector,whoseunderstandingofconditionsinthecountrywideandworldwidepostalindustrygivesitthenecessarystandingtoattempttosensitizenationalgovernmentofficialstotheneedforasector-widerestructuringeffort.

Thedesignatedoperatoralsotakespartinforums,meetingsandcolloquiumssponsoredbyinternationalpostalorganizations,andisfamiliarwiththedifferentpostalreformissuesbeingdiscussedatlengthandindepthbytheinternationalpostalcommunity.

Accordingly,thedirectinvolvementofthedesignatedoperatorinreformeffortsisamust.Onthecontrary,withoutitsinvolvement,resultingproposalscouldbecompletelyoutoftouchwithconditionsinthedomesticpostalsector.Themereadaptationofmodelsimportedfromothercountriesorsectorsofactivityhasprovenunsuccessfulasastrategyforpostalreform.Infact,anumberoffailedexperienceshavehighlightedtheinadequacyofthistypeofapproach,requiringfollow-upaction,notonlytoeffectivelyaddresstheoriginalissue,buttocorrectnewdistortions.

Oncethenecessarypoliticalconditionsareinplace,thefocusshouldturntolayingthepropertechnicalgroundworktotryandensurethehighestpossiblelevelofanalyticalstudyandprofessionalisminthetechnicalaspectsofsectorreformwork.

Thefirststepshouldbetheestablishmentofamacro-scheduletomapoutthemainphasesofworkovertheenvisagedtimeframe.Itisratherdifficulttoestablishadetailedworkschedulefromtheveryoutset,withallrelevantinformationforthespecificationofeachandeverytask.However,itispossibletoestablishabasictimetableshowingthemainphasesofworktobecompletedovertheenvisagedtimeperiod,alongwitharoughdraftofacriticalpathanalysis.

Inadditiontotheactualtechnicalphasesofwork,theworkscheduleshouldalsoincludesupportingactivities,whicharegenerallyresponsibleformostmajordeparturesfromoriginalplans.Examplesofsuchactivitiesincludethemobilizationoffinancialandtechnicalresources,theformalizationofagreementsandthecontractingoutofspecializedservices.Theconductofforumsandseminarsnormallyrequiresareasonableamountofleadtimetoensuretheirsuccess.Theirorganizationcouldmeanseveralmonthsofpreparatorywork,particularlyifscheduledforattendancebydelegatesfromothercountries.

Naturally,likeanyplanningeffort,anactionplanmustbedynamicenoughtosynchronizeallcorrespondingeffortsovertheenvisagedimplementationperiod,settinginterimgoalsandobjectivesleadingtothetargetedfinaloutcome.

Oncetheworkscheduleisinplace,thenextstepisthestudyofcertaincrucialinformationfortheframingofatechnicallycoherentproposalgearedtoprevailingconditionsatthecountrylevel.Suchastudyshouldbeginwithanobjectiveassessmentofthespecificsituationofnationwidepostalservices.Obviously,theservicesfactorcanbeevaluatedfrommanydifferentanglesandapproaches.However,thebestapproachforthepurposesofastructuralreformprocessisonewhichoffersabird'seyeviewofthemarketasawhole,showingallitscomponentpartsanddescribingtheirdifferentfunctionsanddimensions;inshort,providinginformationon:

• thetypesofservicesrendered; • servicedeliveryconditions; • servicecoveragefromageographicanddemographicstandpoint;

• theextentofuniversalaccesstopostalservice; • marketcharacteristics; • thedesignatedoperator.

Withoutthisbaselinedata,itisimpossibletodevelopanapproachwhichcaneffectivelymeetpostalreformobjectives.Thecloserthebaselinedataistoreality,thegreaterthelikelihoodofcomingupwithaproposalgearedtodevelopmentneedsinthepostalsector.Section3.1.4inchapter3ofthismodulecontainsexamplesofpertinentquestionsforassessingthestatusofpostalservicesprovidedbyagivendesignatedoperatorasthebasisforabetterinsightintomarketissues.

Thesecondtypeofstudy,afterassessingthestatusofpostalservicesandthepostalmarket,isanin-depthanalysisofthedomesticlegalenvironmentsurroundingthepostalsectortoestablishthelegalpossibilitiesandconstraintswhichneedtobeaddressedindevelopinganewsectoralmodel.However,thisdoesnotmeantosaythatthecurrentlegalenvironmentisnothingmorethanastartingpointforsectorreformworkwhosedirectionneedstobechartedbasedonanexistingscenario.

2.1.4

Technical conditions for postal reform

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Theanalysisofthelegalenvironmentgoesmuchfartherthanthat,assessingtheneedforchangesinexistinglegalinstrumentsfortheeffectiveimplementationofpostalreform.Here,itisimportantthatappraisalsofdifferentoptionsbeguidedbycommonsensesince,whileamendmentsoflegislationgoverningthepostalsectormaybeconsideredplausible,proposedchangesinlegaltextswhosereachextendsbeyondthepostalsectorpersearesomewhatmorecomplicated.

Thisisatechnicalproblem,inthatanyproposedchangesarehighlylikelytoaffectothersectorsofthecountry'seconomytoanextentfarbeyondtheobjectiveofthepostalreformeffort.Itisalsoapoliticalproblem,inthattheinvolvementofstakeholdersoutsidethepostalsectorwillmakeitmuchmoredifficulttogetcorrespondingproposalspasttheappropriatedecision-makingauthorities.

Theremaybecasesinwhichsuchananalysisexposestheneedforamendmentsofmajorstatutoryprovisionssuchasnationalconstitutionalprovisionsasthebasisforinstitutingpostalreforms.Whilethesuccessofsuchanundertakingisnotcompletelyoutofthequestion,weneedtobeawarethatthehurdlestobeovercomeinsuchcasearemuchgreater,requiringastrongpoliticalwillandtheallocationofhighlyqualifiedtechnicalresources.

Thethirdtypeofrequiredinformationisabird'seyeviewoftheglobalpostalenvironment,orofprevailingconditionsandongoingreformeffortsinthepostalsectorsofdifferentcountries.Theobjective,inthiscase,istotryandpinpointcommonproblemsfacedbydesignatedoperatorsandexaminethedifferentoptionschosenassolutionstosuchproblems.Obviously,eachdesignatedoperatorisunique,andameretranspositionofmodelsisnotavalidoptionforensuringthesuccessofpostalreformefforts.However,themainadvantageofunderstandingthesituationinothercountriesisthatithelpsclarifythedomesticsituationthroughastudyofcomparativedataand,asaresult,isagoodbasisfortheframingofaproposalgenuinelyresponsivetonationwideneeds.

Thepostalsectorsofmanydevelopingcountriesaremarkedbyseriousstructuralproblems,inmanycases,stemmingfromtheeconomic,social,politicalandculturalproblemsfacedbydevelopmenteffortsinsuchcountries.AccordingtothejointUPU/WorldBankstudyRedirectingMail,thepostalsectorsofmostdevelopingcountriesareinefficientand,asdiscussedinsection1.1.4above,thisinefficiencycreatesaviciouscirclewhichisdifficulttobreakoutofwithoutdeep-seated,sustainablereformmeasures.Thus,anin-depthstudyofthepostalsectorrevealsproblemsinmanydevelopingcountries.Manydesignatedoperatorsareunabletogenerateenoughrevenuetocovertheiroperatingcostsand,yearafteryear,havebecomeincreasinglydependentoninfusionsofnationalbudgetfunds.

Incaseswherethedesignatedoperatorisabletoobtainsuchfunding,thisgenerallycreatesapathytowardsanyefforttoimproveitsefficiency.Atthesametime,inthefaceofthealarmingrateofgrowthinthevolumeofsuchannualsubsidies,governmentsarebecominglessinclinedtomaintainneededsubsidiesfortheprovisionofpostalservices.

Withgovernmentsshowingthemselvesincreasinglyunwillingtosubsidizeoperatingcosts,possibilitiesforthesecuringofadditionalfundingforexpandingandmodernizingexistinginfrastructurearenil.Asaresult,alargesegmentofthepopulationstilldoesnothavereasonableaccesstopostalservicesandisforcedtotravellongdistancestomailorreceivepostalitems.Thedesignatedoperatordoesnothavethemeanstoprovidehomedeliveryservicetoresidentsofsuchareasoroflargecitieslackingbasicurbanorganizationalinfrastructure,streetnamingandhousenumbering.Maildeliverytopostofficeboxesisacommonsolutiontothisproblem.

Inmanycountrieswithaninadequatelegalframework,theinabilityofthedesignatedoperatortocarryoutitsmandatehasfosteredtheemergenceanddevelopmentofnumerousprivateoperatorsofvariousshapesandsizestofillthisservicegap,atconsiderablyhigherprices.Facedwithalackofoptions,thepublicispenalizedbybeingforcedtopayexorbitantpricesand,inturn,looksforitsownsolutionstotheproblem,turningtotheinformalsector,whichoffersnoguaranteeswhatsoeverasfarasquality,securityorconfidentialityareconcerned.Largecorporations(creditcardcompanies,banks,etc.)prefertodeveloptheirownin-housemaildepartments,anditisnotuncommonforsuchcompaniesto,themselves,becomepostaloperators,servingotherbusinesses.

Allofthishasanegativeeffectontherevenuesofthedesignatedoperator,makingitimpossibleforittocoveritsfixedinfrastructurecosts.Moreover,thesalariespaidbythedesignatedoperatortoitsstaffarebelowmarketrate,anditsemployeeshavenoaccesstotrainingandcareerdevelopmentresources,whichsignificantlyweakenstheabilityofthedesignatedoperatortoattractprofessionalswithgoodtechnicalqualificationsandtheaverageskillsmixofitsworkforce.

Turnoverratesaregenerallyhighandthefrequentlackofhumanresourcepolicieshinderseffortstobuildaprofessionalmanagementstaff,withmanymanagersmerepoliticalappointeeswithouttheproperskillsfortheirparticularpositionoranyvisiblepersonalcommitmenttotheplansandobjectivesofthedesignatedoperator.

2.1.5

Unique features of reform

processes in developing

countries

41

This,inturn,considerablyunderminesitsinternalinnovationcapacity,withanumberofcriticalfunctionssuchastherefinementanddevelopmentofnewservicesperformedonlysporadically,withalackofconsistency,hasteningtheageingandobsolescenceofitsserviceportfolio,whileitscompetitorsarebusytappingpotentialnewmarketsegmentscreatedbynewtechnology.

Inthefaceofthisjuxtapositionofnegativetrends,anumberofgovernmentshavebeenseducedintoembracingso-called"quickfixes,"takingdrasticmeasuressuchasthehastyprivatizationofthedesignatedoperatorortheabruptopeningofthepostalmarkettounbridledcompetition.Thoughsuchoptionsarenotnecessarilyinappropriate,thereisnodenyingthefactthatresortingtosuchalternativeswithoutawell-organizedlong-termapproachtopostalreformonlyaggravatestheproblemsofthesector.

Thereareanumberofinternationalexperiencesalongtheselineswhichhavestillnotproducedanytangiblebenefitsforsocietyorthegovernment,asaresultofwhichprivatizationshavebeenreversedandconcessionshavebeenwithdrawn.Thefindingsemerginginsuchcasesareshowingthatthesetypesofmeasureshavehelpedneitherpostalservicesnorthedesignatedoperatornorthegeneralpublic.Inothercases,reformeffortsareinterruptedbypoliticalchanges,disruptinglong-termprojectsandprogrammesvitaltosustainablestructuralreformsinthepostalsector.

Thus,obviously,manydevelopingcountriesneedtotakeamoresystematicapproachtopostalreform,onewhichrecognizesthecomplexconditionswhichneedtobeaddressedandisabletoturnaroundthenegativesituationinmanysuchcountries.Thebenefitsofawell-organizedreformeffortarenotconfinedtothepostalsector.Asdiscussedinsection1.3above,thestrengtheninganddevelopmentofoneofthenation'smajorserviceinfrastructuresectorscanhelpallsectorsoftheeconomy,particularlythosewithsocialramificationsforthegeneralpopulation.

2.2

Focuses and scope of

postal reform processes

Postalreformprocessesinvolvethesynchronizationofmanydifferentelements.Inotherwords,theofficialsheadingupthereformeffortwillneedtoaddressaseriesofinternalfactorswithinthepostalsector.Itisimportantthatsuchaneffortbewellcoordinatedfromallstandpointstohelpensureitsshort-,medium-andlong-termsustainability.

Anumberofdevelopingcountrieshavehadexperienceswithpostalreformprogrammesaddressingoneormoreisolatedfactorswhichwerenotassuccessfulasexpected.Thereasonforthishastodowiththetypeofapproachtakenbysuchprogrammes,markedby"one-off"orisolatedactivitiesignoringlinkagesbetweendifferentpartsofthewhole.

Section2.2.1belowlooksattheimportanceoftheexistenceofalegalframeworkforthepostalsectorandofitscontent.ThisissueisdiscussedatlengthinModuleIIIoftheGuide.Section2.2.2takesacloserlookatthemarketregulationfunction,whichisdiscussedindetailinModuleVoftheGuide.Lastly,section2.2.3addressestheimportantissueofthedevelopmentoftheofficialpostaloperator,whichisexaminedindepthinModuleIV.

2.2.1

Legal framework

for the postal sector

Ingeneral,atthecountrylevel,thepostalsectorisorganizedbasedonalegalframeworkwhichhelpsshapeitsstructure.Thestructure,scopeandfinepointsofthislegalframeworkvaryfromcountrytocountry.Moreover,inthecaseofcertaincountries,thereisnotonebutawholeseriesofinstrumentsestablishingthelegalfoundationforthepostalsector.

Asindicatedearlierinthismodule,asastructuralreformprocess,postalreformprogrammesalmostinvariablyrequireamendmentsoflegislation,whichmeansengagingthenationallegislatureinthereformeffort.

42

Itisimportanttobearinmindthatthepurposeofamendinglegislationisnotsimplytoprovideashort-termsolution.Onthecontrary,insofaraspossible,thegoalshouldbetheshapingofalong-rangevisiontoavoidtheconstantneedfornewamendmentsslowingdownsectordevelopmentefforts.

Eachcountryhasitsownspecificlegalsystem,whichismadeupoflegalinstruments(suchasthecountry'sconstitutionandlegislation)andadministrativeinstruments(suchasdecreesandregulations).Thelegalinstrumentsshouldincludethemostimportantlegalprecepts,whilelessimportant,moreoperationallyorientedmattersinconstantfluxaregovernedbylowerrankinginstruments.

Therearetwomajoradvantagesofsuchanapproach.Thefirsthastodowiththelongevityofso-called"senior"legislation,whichshouldfocusmainlyonsettinggoalsandestablishingbasicprinciplesandguidelines.Thesecondhastodowithso-called"subordinate"instrumentswhich,whilemutablebynature,followguidelinesestablishedin"senior"instruments.

Inanyevent,forguidancepurposes,themainobjectiveofthelegalframeworkshouldbetolaythenecessaryinstitutionalfoundationforthelong-termsustainabledevelopmentofthepostalsectorinfurtheranceofnationaleconomicandsocialdevelopmentefforts.

Sectordevelopmenteffortsneedtogobeyondmererhetoricandbetranslatedintoobjectiveindicators.Examplesofrelevantindicatorsinclude:

• mailtrafficvolume(bytypeofitem); • averagenumberofmailitemsperpersonperyear;

• percentageofthepopulationwithaccesstotheuniversalpostalservice(forthereceiptandsendingofpostalitems);

• qualityofservice; • productivityofthedesignatedoperator; • servicepricesandrates; • economicandfinancialperformanceofthedesignatedoperator.

Inthefinalanalysis,themaintargetedoutcomeinanypostalreformprocessisthedevelopmentofthepostalsectorforthebenefitofthecountry'spopulation,theachievementofwhichrequiresanswerstoanumberofkeyquestions,asoutlinedbelow.

Universal postal service• What is its objective?• What are acceptable minimum standards

of quality?• How is it gradually being made accessible

to larger segments of the population?• How is service performance monitored?• Who is in charge of service delivery?• How is it financed?• What are the expected future trends in

universal postal service?• What are the service delivery conditions?

Government• What is its role in the postal sector?• What mechanisms will be used to regulate

the postal sector?• How will postal sector policy be set and

evaluated?

Designated operator• What conditions need to be met for it to

carry out its mandate?• What are the mechanisms governing its

legal status and development?• How can we help promote the

modernization of the universal postal service operator from a commercial, operational, technological and administrative standpoint?

• Can it provide other services in addition to the universal postal service?

• What restrictions are imposed on its operations?

Other operators• Who are they?• What are their universal postal service

obligations?• Are they being monitored? In what way?

How?

43

Customers/consumers• What are their rights and obligations?• How are their rights guaranteed, verified

and monitored?• What types of mechanisms are used to

systematically assess their needs, and who carries out such assessment?

• How are they involved in setting sector policy and guidelines?

Postal regulator• Who regulates the postal sector? What is

its legal status and position vis-à-vis the public administration?

• What is the scope of the sector's regulation?

• How does the regulator participate in the monitoring of universal postal service expenditure and in setting the mechanism for financing the universal postal service?

Theanswerstothesequestionsshouldserveasthebasisfortheframingofaproposalforrestructuringthepostalsectorintheformofclearpolicieswhichcanbeunderstood,implementedandfollowedbyallstakeholders,includingthefollowingelements:

Customers/consumers• Familiarity with the services to which they

are entitled.• Familiarity with expected levels of service

quality.• Access to mechanisms designed to protect

their interests.• Involvement in setting policy and

guidelines.

Government• Establish its accountability with respect to

the postal sector.• Ensure provision of the universal postal

service.• Protect the consumer public.• Support the regulatory function and the

regulator.

Designated operator• Know which services to provide, expected

levels of service quality, where to provide service and how to gradually expand service.

• Identify clear, secure sources of universal postal service funding.

• Commit to modernization and corporatization.

• Clearly define its performance objective.

Other operators• Clearly delineate their sphere of

operation.• Establish clear postal market rules

for implementing plans and making investments.

• Ensure free enterprise within their established sphere of operation.

• Define their contribution to the mechanism for financing the universal postal service.

• Ensure legal clarity.

Postal regulator• Clearly delineate its sphere of operation.• Establish a disciplinary regime to allow it

to fulfil its mission. • Define its contribution to the mechanism

for financing the universal postal service.

Workingouttheseissueswiththelevelofprecisionoutlinedintheprecedingtextboxesaspartofthepostalreformprocesswillhelpestablishcleargroundrulesofvitalimportancetoallcorrespondingstakeholders,providingtheinstitutionalstabilityrequiredforthesustainabledevelopmentofthepostalsector.

Itisextremelyimportantnottoconfusetheconceptofinstitutionalstabilitywiththenotionofanimmutablelegalframework.Ourallusiontotheconceptofinstitutionalstabilityissimplymeanttounderscorethebenefitsofaclearlegalframeworkforallstakeholders.

Inthefaceofconstant,increasinglyfast-pacedeconomic,socialand,inparticular,technologicaldevelopments,andintheinterestofthemarket'sowndynamic,itisunreasonabletoexpecttheretobeanimmutablesetofrules.Onthecontrary,adynamiclegalsystemisagoodthing,asawayofkeepingpacewithconstantlychangingsocialneeds.However,thissortofchangeneedstotakeplaceaspartofaprocessofnaturalevolution,safeguardingpreviousaccomplishments,ensuringbiggerandbetterfutureachievementsandmakingthechangesdemandedbysocietyandthemarket.

44

Thenextstepaftertheestablishmentofaregulatoryframeworkforthepostalsectoristhedevelopmentofaregulatoryfunction.Aspartofapostalreformprogramme,aregulatoryfunctionservestoimplementandconsolidatecorrespondingreformswhich,bynature,isalong-termprocessrequiringregularevaluationsofdifferentcoursesofactionagainstitsoriginalobjectives.

Somecountriescontinuetohavenoregulatoryfunction,butinthemajorityofcountriesitisanintegralpartoftheiroperations,fullydevelopedasafunctionseparatefromoperationalmatters.Incertaincountries,however,theregulatoryfunctiondoesnotenjoythelegalsupportorindependenceneededforittoachieveitsobjectives.

Regulationcanbeperceivedasaneffortonthepartofgovernmenttobuildamarketdevelopmentmodelinlinewithnationaleconomicandsocialobjectivesandtooverseeandmonitorcompliancewiththeestablishedmodel.Operationalissues,ontheotherhand,havetodowiththedeliveryofpostalservicesbythedesignatedoperatorandprivateserviceoperatorstoindividualandinstitutionalcustomers.

Theseparationofregulatoryfunctionsisconsideredamustinthecurrentpostalenvironmentsurroundingreformefforts,inwhichotherimportantfactorscomeintoplay,includingagrowingtrendatthecountryleveltoembraceafreemarketsystem,theemergenceandgrowthofcompetitionwithinthepostalsectorandthepresenceofgrowingnumbersofprivateoperators.

Thus,therearetwoimportantconceptsatplay:thetypeofmarket,andregulation.

Asthepostalsectorcontinuestogrowanddevelop,thecomplexityofinternalrelationsatthesectorlevelwillonlyincrease.Newtechnology,newservicesandnewoperatorsarecomplicatingbothoperationalandbusinessrelations.Theemergenceofmultipleserviceoperatorsandresultingnewsituationssuchascompetition,alliance-building,etc.aremakingitnecessarytoaddressmatterswhichhadneverbeforebeenanissue,particularlyinaserviceoperatingenvironmentmonopolizedbyasingleoperator.

Thegrowingcomplexityofthepostalsectoriscreatinganeedfortheestablishmentofmodels,proceduresandprotocolsforintegrationandconsistencypurposes.Weshouldrecallthatthepostalsectorrequirestheexistenceofmodelsforreconcilingitsvariouselements(customers,operators,suppliers,technology,etc.)

Moreover,sincetheoperationofthepostalsectorinvolvestheinteractionofdifferentplayers,privateoperators,sectorregulators,competitionregulatorsandgovernmentauthorities,includingthejudiciary,itisvitalthatpostalregulatoryactivitiesembraceallsuchpartiesasawhole,aswellastheiroperations,andthattheytakeintoaccountalldecisionsandregulationslikelytodirectlyorindirectlyaffectthepostalindustry.

Obviously,asectorreformeffortpavingthewayfortheentryofnewpostaloperatorscannotpossiblydowithoutbasicregulationstoensurethesystem'sintegrityandprotectcustomeranduserinterests.Thus,liberalizationdoesnotmeandoingawaywithrulesandregulationsbut,rather,adaptingthemtofitthenewshapeandformofthepostalsector.

However,regulationneednotbepurelyinterventionistinnature.Itsobjectivesshouldbethreefold:

a. to protect and defend customer/consumer interests;

b. to coordinate relations between postal operators;

a. to uphold government obligations and promote sector development.

2.2.2

Development of a regulatory

function

45

Tothisend,effortstoshapetheregulatoryfunctionshouldtryandincludecertainbasicfeaturestoenableittofullyaccomplishitsmission,asoutlinedinthefollowingtable:

Factors Features

Authority Legallyestablished,withpowerstofullyaccomplishitsmission.

Legality Regulatorynaturerecognizedbyallcorrespondingstakeholders.

Independence Notiestoanyspecialinterests,toenableittoactineveryone'sbestinterests.

Autonomy Fulldecision-makingauthority.

Capacity Appropriatephysicalandtechnicalconditionsfordischargingitsresponsibilities.

Vitality Timelyactionanddecisionmaking.

Transparency Widespreadknowledgeofitsactionsanddecisions.

Financing Economicallyandfinanciallyself-sustaining.

ModuleVoftheGuidefurnishesallnecessaryinformationforthedesign,creationandestablishmentofaregulatoryagency.

2.2.3

Development of the designated

operator Asdiscussedearlier,oneofthemainobjectivesofpostalreformistoensureprovisionoftheuniversalpostalservice,makingitincreasinglyaccessibletolargersegmentsofthepopulation,anddiversifyingandimprovingcorrespondingservicesasnewopportunitiespresentthemselves.

Attheinternationallevel,almostallcountrieshavechosenamodelwithasingleoperatorinchargeofprovidingtheuniversalpostalservice.Thisisahallmarkofthepostalsector,settingitapartfromothersectorssuchastelecommunications,inwhichcertainmodelspromoteuniversalaccessbasedondifferentserviceoperatorswithseparategeographictargetoperatingareas.Experienceswiththeprivatizationofthedesignatedoperatorarerareandfoundinonlyahandfulofcountries.Eveninsuchcases,thesameoperator,thoughprivatized,stillhassoleresponsibilityforprovidinguniversalpostalservice.

Thefollowingfigurerecapsthemainguidelinesforthedevelopmentofthedesignatedoperatorasanimportantlinchpininexpandinguniversalaccesstopostalservice:

Thisfiguredepictsonlyafewgeneralguidelines.Itdoesnotexploretheissueofthedevelopmentoftheuniversalpostalserviceoperatorinanydepth,whichisdiscussedatlengthinModuleIVoftheGuide.

ToFrom

Development of the designated operator

TechnologyLow-tech

Fragmented

Precariousleadership

Reactive

Processmanagement

Classic model

High-tech

Integrated

Solidifiedleadership

Proactive

Performancemanagement

Market-oriented

Strategy

Market

Organization

Staff

Culture

47

Therearecertainkeyfactorswhichmustbeborneinmindinconductingapostalreformprogrammeinordertoachievetargetedoutcomes.Aspreviouslyexplained,thelargenumberofdifferentstakeholdersinvolved,thecomplexityoftheissueaddressedandtheeconomicandsocialdimensionsofthepostalsectorrequirethatthoseinchargeofheadingupapostalreformeffortbefullyawareoftheexistenceofcertainkeyfactorswhichcanhelpachievetheenvisionedbenefitsofpostalreform.

Section3.1.1looksattheneedtoestablishaconceptualmodelforthepostalreformprocessgearedtoconditionsineachcountry.Section3.1.2addressestheissueofsensitizinggovernmentofficialsandcreatingapoliticalwilltopromotepostalreform.Section3.1.3,inturn,talksaboutengagingstakeholdersandotherinterestedpartiesinthepostalreformprocess,whilesection3.1.4underscorestheimportanceofhavingsolidcoredataasthebasisforagoodgeneralunderstandingofthestatusofnationwidepostalservices.Lastly,section3.1.5discussestheroleofthedesignatedoperatorinthepostalreformprocess.

Postalreformisalong-termcomplexprocesswhichrequiresastrongwilltomountsuchaneffortandasharedvisionbyallstakeholdersofkeyfactorsrelatingtotheimplementationofthereformprocess.

Thefollowingareallcrucialissuesinshapingasharedvisionofthereformprocess.Ajointexerciseinansweringthefollowingquestionswillpinpointdifferencesinindividualviews,whichwillnecessitateanall-outinitialefforttobuildcommonground.

1. Who are we? Conceptualizes and specifies the aims and boundaries of the postal sector.

2. Where are we? A clear, objective, conclusive assessment of the status of the postal sector.

3. Where are we heading? The new proposed target situation for them postal sector.

4. How are we going to get there? What needs to be done to help change the status quo to the proposed target situation.

5. When do we get there? A timetable showing the necessary steps to attain the target situation.

Themainbenefitsofthisjointexerciseare:

• acleardefinitionofcorrespondingobjectives; • theestablishmentofgeneralguidelines; • thedevelopmentofspecificbenchmarks; • thesynchronizationofallcorrespondinginitiatives;

• thedevelopmentofalong-rangeview; • thebenefitoftheorganizedinvolvementofstakeholders.

The postal reform process

3

3.1.1

Conceptual model

3.1

Key factors in the reform

process

48

Inadditiontothisconceptualmodel,itisalsoimportanttohaveanactionmodelasthebasisforasystematicunderstandingofthedifferentworkfrontsinvolved,asillustratedinthefollowingfigure:

• Legal reform:involvementineffortstoestablishanewlegalframeworkembracingthemarketasawholeanditsvariouscomponents(services,customers,designatedoperator,privateoperatorsandregulatoryagency).

• Organizational reform: restructuringofthedesignatedoperator,addressingfactorssuchasitsorganizationalstructure,legalstatus,ownershipstructure,autonomy,authority,obligations,etc.

• Commercial reform: commercializationofthebusinesspracticesofdifferentareasofthedesignatedoperator,incorporatingconceptssuchasqualityofservice,amarketandcustomerserviceorientation,informationsystems,thedevelopmentandprovisionofnewservices,etc.

• Operational reform:establishmentofprojectsforthemodernizationofoperatingprocessesandprocedureswithaviewtoimprovingservicequality,boostingproductivityandcuttingcosts.

• Technological reform:intensiveuseoftechnologyinproductioninfrastructureandservicedeliverytohelpincreaseefficiency,improvemanagementpracticesandbuildmarketshare.

Thus,thepostalreformstrategymustbecomprehensiveinscope,embracingallelementsofthepostalsectorwhich,bynature,arecloselyinterrelated.Theunderlyingpremiseisthatadeep-seatedpostalreformeffortrequiresactiononallelementsofthepostalsector.Areformeffortlimitedtoasinglesuchelementorwhichdoesnotsystematicallyincludeallbuildingblocksofthepostalsectorwillproducepiecemeal,unsustainablereforms.

Accordingly,nationalpostalofficialsandexpertsinchargeofthepostalsectorneedtoplayakeyroleinthereformprocess,whichshouldbespelledoutinadvancetoensureasuccessfuloutcome.

Thisgroupofindividualshasaparticularlyextensiveknowledgeofthepostalsectorbased,notonlyonmorecomprehensivedata,but,moreimportantly,ontheirownpersonalexperienceofworkinginthesector.Thisknowledgebasewarrantstheirplayingamoreactiveroleinthereformprocess.

Theneedforsuchaknowledgebasestemsfromthefactthatpostalreformprocessesaredesignedtoprovidedefinitivesolutionstosector-widestructuralproblemsbasedonanswerstothefollowingtypesofquestions:

a. Promotion of universal access to postal service: Whatpercentageofthepopulationhasapostofficeclosetohome? Whatpercentageofthepopulationhashomedeliveryservice?

b. Objective of postal service:Whatservicesarebeingprovided?

c. Objective of universal postal service: Whatpackageofservicesisincludedinthegovernment'suniversalpostalserviceobligations?

d. Quality of service:Whatarethestandardsofquality? Howwelldoestheoperatormeetthesestandardsofquality?

e. Funding of the designated operator: Whatsourcesoffinanceareavailabletoensurethemodernizationandfundingofthedesignatedoperator?

f. Modernization of postal services: Howuptodatearepostalservices? Howmuchinnovationhastherebeeninthisarea?

g. Technological innovation: Howuptodateisthetechnologyusedbythedesignatedoperator? Howhasitacquiredsuchtechnology?

h. Competition among postal operators: Howmanyoperatorsarethere? Whichservicesaretheycompetingfor? Howisthecompetition?

i. Protection of user interests: Havetherightsofusers-customersbeenestablished? Howaretheybeingprotected?

Thisbriefoutlineofthetypesofquestionswhichneedtobeaddressedbythereformprocessshowsthecomplexityoftheissuesinvolvedandhowitisvirtuallyimpossibletocountonaneasyfix.

Legal reform

Commercial Organizational

Technological Operational

49

Theproposalofoverlysimplisticsolutionsincapableofaddressingthebroadspectrumofdifferentissuesinvolvedisacommonphenomenon.Acaseinpointisthesomewhatmisleadingstatismversusprivatizationconundrum.Thisdoesnotmeantosaythatitisnotanimportantissue.Onthecontrary,itisextremelyimportantandneedstobemethodicallyaddressed.However,itwouldbeamistaketoconsideritasthepivotalissueinapostalreformprocess,relegatingallothermatterstosecondaryimportance,flagrantlytwistingitsobjectivesandconfusingthemeanswiththeend.

Whyisthisthecase?Whyisthisarecurringthemeinbothnationalandinternationaldiscussionforums?

Itisaresultofthelackofacomprehensivemodelasthebasisforapproachingthediscussionprocessfromabroaderperspective.Thelackofsuchamodelsplintersthebigpictureintocountlessdisjointedissues,whichisvirtuallycertaintoproduceinconsistent,one-offsolutions.

Thispiecemealvisionisfertilegroundforemotionaldefencesofspecialinterestsandpersonalviewpointswhich,bynature,arevirtuallyalwaysincompatible.

Ifthiswerenotthecase,aspecialpostalreformeffortwouldbeunnecessary,andalldevelopmentswithinthesectorwouldbeconsensualandspontaneous.

Suchanapproachtopostalreformisreckless,becauseitisvirtuallydoomedtofailfromthestart.Butwhatsortofbroaderperspectivecouldbeusedasabasisformoreobjectivelychartingthecourseofreformefforts,particularlywhendealingwithconflictsbetweendifferentspecialinterests?Thegeneralconsensusisthatthenationalinterestshouldtakeprecedenceovertheinterestsofanyonegroup.Accordingly,whatisneedediscommitmentandeffectiveleadershiponthepartofgovernment,whichhasthelegitimacyandauthoritytoputthenationalinterestabovespecialinterestsandpersonalconcerns.

Inlinewiththeconclusionsdrawnfrompastexperience,theneedforapostalreformefforttobestaunchlysupportedbynationalgovernmentofficialsinchargeofleadingthenationisself-evident,givenitstiestothenationalinterestanditsnationwidedevelopmentimpact.

Meanwhile,thequestionishowtomakethishappen.Governmentawareness-buildingeffortsneedtobegroundedinspecificfacts,contentionsandanalysesfurnishingasmuchinformationaspossible.This,inturn,requirespreliminaryresearchandstudiestoenablepostalreformadvocatestoprovideobjectivedatafullyexposingthestatusofnationwidepostalservices.

However,thepresentationofgovernmentofficialswithhighlydetailed,in-depthstudiesandanalyseshasproventobecounterproductive,whichdoesnotmeantosaythattheyareunnecessary.Therecommendedapproachistodrawupamoreabridgeddocumentpresentingaclearlineofthought,beginningwithabriefprofileofthepostalsectorandoutliningthetypesofproblemsituationsrequiringareformeffortsuchasthatproposed.

Ingeneral,thiscallsfortwosetsofdocuments:

a. Preliminary technical studies: analyses,researchstudies,appraisalsandotherstudiesofahighlytechnicalnaturereflectingexistingsector-wideproblemsandjustifyingtheneedforpostalreform.Themainrequirementsforthistypeofdataareobjectivity,precisionandreliability.

b. Information materials: reports,documents,summationsandothermaterialsprovidingoutsiderswithagoodbasicunderstandingofthepostalsectorandexistingproblems.Therequirementsforsuchmaterialsincludeaclearpresentation,simplicityandobjectivity.

Theabsenceofeitherofthesesetsofdocumentscouldjeopardizethesuccessofpoliticalconsciousness-raisingandgovernmentawareness-buildingefforts.Alackofinformationmaterials(type"b"documents),forexample,wouldcomplicatedealingsbetweenpostalexpertsandnationalgovernmentofficials,withtheriskofthiscreatingmisunderstandingssince,inmostcountries,thegovernmentisperceivedasdistancingitselffromthedesignatedoperator.Moreover,manycountriesdonothaveseparatepostaloperatorsandregulatorsandpostalserviceprovidersdonotalwayshavespokespersonstheycancountonindealingwiththegovernment.

Thegovernmentgenerallyhasapiecemealviewofpostalservices,withdifferentareasofgovernmentvestedwithdifferentresponsibilities(budgeting,finance,procurements,humanresourcesetc.)andseeingonlythatpartofthepicturepertainingtotheirspecificfunctions,withoutafullandcompleteunderstandingofthepostalsectorasawhole.Thus,informationmaterialspresentinganoverallpictureofthepostalsectorarevaluabletoolsforprovidingdifferentareasofgovernmentwithabetterpictureandunderstandingofthissector.

Theseinformationmaterialsarenotadvertizingmaterials.Theyarecommunicationtoolsdesignedtotransmitabridgedtechnicalmessagesprovidingstakeholderswithacompletepictureofthepostalsector.

3.1.2

Sensitizing government officialsand

building political will

Obviously,type"a"documents(preliminarytechnicalstudies)arecrucialtoawareness-buildingefforts,presentingessentialtechnicaldataasthebasisforconvincingnationalgovernmentofficialsofthejustificationforpostalreform.Suchstudiesaregenerallydesignedtoshedlightonpivotalissuessuchas:

a. theextentofuniversalpostalservicecoverage;b. theeconomic-financialsoundnessofthe

designatedoperator;c. theproductivityofthedesignatedoperator;d. qualityofservice;e. theextentofcompetition;f. anassessmentofthestrengths,weaknesses,

opportunitiesandthreatsforthepostalsectorandthedesignatedoperator;

g. comparativeinternationalyardsticksanddata.

Itisquitehelpfultocontrastthestatusofdomesticpostalserviceswiththesituationinothercountrieswithoutthecomparisonofsuchindicatorsbeingdistortedbydifferencesinconditionsineachcountry.Thepostalcommunityhasastandardsetofindicatorsforcomparisonpurposes,whichbynomeansprecludestheinclusionofothersuchindicators.

Thestandardindicatorsusedinsuchcomparisonsareoutlinedinthefollowingtable:

Variable Country

Country1

Country2

...…

…

Countryn

Trendsintotaltrafficvolume

Trendsintrafficvolumeperpersonperyear

Trendsintrafficvolumeperpostalworkerperyear

Numberofpostalworkerspercapita

Numberofresidentsperpostoffice

Percentageofthepopulationservedbypostoffices

Percentageofthepopulationwithhomedeliveryservice

Adjustedbasicletterrate

Standardsofquality

Economic performanceofthedesignatedoperator

Thereisanexcellentinternationaltechnicalcooperationmechanismavailabletoassistwiththepreparationofthesetypesofstudiesandwithactualconsciousness-raisingeffortsoperatedbytheUniversalPostalUnion(UPU)andvariousdomesticandinternationalorganizationsand,obviously,includingrestrictedpostalunions,whichhavebeenplayinganimportantroleinassistingcountriesinterestedinpromotingpostalreform.

Suchcooperationcantakeanumberofdifferentforms,includingbutnotlimitedto:

a. discussionsofpostalreformissuesattechnicalseminarsandworkshops;

b. theorganizationandconductofspecificseminarsinthehostcountry;

c. technicalassistanceinconductingstudies;d. assistanceinarrangingtraveltootherpostal

administrationsforthesharingofinformation;e. accesstodatabasesforcomparativestudies;f. accesstoinformationonlessonslearnedfrom

similarworks,projectsandstudies.

Lastly,howcanweevaluatethesuccessofgovernmentawareness-buildingactivities?Whattypesofindicatorswouldreflecttheextenttowhichthegoalofsensitizingnationalgovernmentofficialstotheneedtoundertakeapostalreformefforthasbeenmet?Themaintargetedoutcomeofsuchawareness-buildingactivitiesisgovernmentinvolvementinpostalsectordevelopmentefforts.Butthereisstillthematterofhowtoevaluatetheextentofits"buy-in".Obviously,therearenoobjectiveindicatorsformeasuringthisfactor,buttherearecertainformalandinformalresponseswhichcanprovideagoodideaofthelevelofcommitmentonthepartofthenationalgovernment.Thefollowinglistofpossibleresponses,presentedforguidancepurposesonly,isbynomeansexhaustiveandismoreofaconceptualframeworkthananactualsinequanoncondition.Moreover,suchresponsesarenotalwaysallimplementedsimultaneouslybut,rather,invariouscombinations.Thus,examplesofpossibleresponsesare:

a. theinclusionofpostalissuesinnationaldevelopmentplans;

b. themountingofapostalreformproject/programmeunderanadministrativedecision;

c. theallocationofbudgetaryandfinancialresourcesfortheconductofresearch,studiesandanalyses;

d. theappointmentofqualifiedexpertstostudypostalissues;

e. theconductofroundtables,forumsandseminarstodiscussandpromoteaclearerunderstandingofpostalissues;

f. theattendanceofinternationalforumsaddressingpostalissuesbygovernmentofficials;

g. thedesignationofanagency,committeeorsimilarbodytoserveinanexecutivemanagementcapacityinthepostalreformprocess.

51

Thesuccessofeffortstogetthegovernment(theexecutive)involvedshouldnotaffectongoingeffortstoengageotherstakeholderssince,soonerorlater,theytoocouldbeaffectedbyproposalsunderdiscussion.

Whilecertaingroupsmaybewillingtogetinvolvedinpostalaffairsoftheirownvolition,othersmayconsistentlyrefusetodealwithsuchissues,eitheronideologicalgroundsorforreasonsofspecialinterests.Despitethepotentialforresistanceanddifferencesofopinion,itisessentialtoestablishandmaintainachannelofcommunicationanddialoguewithstakeholdersprovidingforatwo-wayflowofinformation,criticism,suggestionsandcomments.Participationinapostalreformprocessisnotsimplyaseriesofrandomorfortuitousacts.

Itshouldbeanorganizedandwell-managedprocess,withestablishedobjectivesandmechanismsanddesignatedmanagers.

Itisalsoimportanttobearinmindthatthestakeholdersinapostalreformprocessincludeawidespectrumofdifferentplayerswithverydifferent,ifnotopposing,interests.Thus,goodparticipationmanagementmeanspinpointingthemaininterestsofeachpartyconcernedsoastoproperlybalancesuchinterests.

Thistypeofstakeholderinvolvementinpostalreformprocessescannotbeallowedtoturnintoaformofco-management.Theresponsibilityforheadingupthereformeffortclearlylieswiththegovernment,whosedutyitistotryandengageotherstakeholderswithaviewtofine-tuningproposals,buildingconsensuses,expeditingreformeffortsanddissipatinganyunfoundeddoubtsandfears.

Stakeholderinvolvementinpostalreformprocessesneedstobecarefullyplanned,endeavouringtosetobjectives,framestrategiesanddevelopworkingarrangementsforwell-organized,timelyinterfacingwithstakeholdersvia:

• round-tablediscussions; • forums; • seminars; • paneldiscussions; • publicmeetings; • publichearings; • conferences; • debates; • consultationmechanismsforpresentingcriticism,suggestions,etc.;

• otherorganizedparticipationmechanisms.

Withoutattemptingtoidentifyallstakeholdersinpostalreformprocesses,thethreemaingroupsofstakeholdersintermsoftheirrepresentativenessandabilitytoinfluencethedirectionofreformeffortsare:

a. MembersofCongresswho,as"antennas"or"feelers"forthegeneralpublic,areusuallyconcernedwithissuessuchas:

› shutdownsofpostoffices; › layoffs; › priceandrateincreases; › privatizationofpostalservices; › privateinvestmentinthedesignatedoperator;

› qualityofservice; › accesstoservices.

b. Postalworkers(includingtradeunions):

› layoffs; › paycuts; › cutsinbenefits; › privatizationofservices; › restructuringofthedesignatedoperator; › jobsecurity.

c. Privateoperators:

› nationalizationofpostalservices; › universalserviceobligationsandpaymentsoffinancialcontributions;

› competitionfromthedesignatedoperator; › cross-subsidization; › expansionofmonopolies; › pricesandrateschargedbythedesignatedoperator;

› accesstothedesignatedoperator'smaildeliverynetwork.

Lastly,withstakeholderinvolvement,thereisanaturalexpectationofaflowofregularinformationontheprogressofwork,particularlyonthepartofthestaffofthedesignatedoperator.Accordingly,itisbothproductiveandhelpfultodrawupacommunicationsprogrammedesignedtobolsterpostalreformefforts.

3.1.3

Stakeholder involvement

52

TheaimofthissectionoftheGuideisnottodelveintothetechnicalcharacteristicsofsuchacommunicationsprogramme,butmerelytooutlineafewofitscoreelements,asdepictedinthefollowingtable:

Topic

Target audience

Workers

General

public

Congress

Others

Concerns

Message

Whentocommunicate

Howtocommunicate

Typeoftool

Schedule

Specificchannelofcommunication

Indicators Thecommunicationsprogrammemaycallfortheuseofdifferenttoolsfordifferenttargetaudiences.ThisparticularissueisnotaddressedintheGuide.Whatisrelevant,here,istheimportanceofgoodcommunicationswiththeinternalaudiencewithinthedesignatedoperator(workersandtradeunions),notonlyfortheprogressofreformefforts,butalsoforday-to-daypostalserviceoperations.Thistargetgroupwarrantsspecialattention,consideringthelargenumbersofindividualsinvolved,allofwhomhaveseriousconcernswithrespecttotheirjobsecurityandbenefitsandtheirfuturecareerprospects.

"We won't know where we're heading until we know where we're at."

Thismaximreflectsoneofthemostimportantfactorsforthesuccessofapostalreformprocess.Tobeginwith,anyreformeffortrequiresanobjective(qualitativeandquantitative)assessmentofthestatusofnationwidepostalservicestogetasclearaspossibleapictureofthedomesticpostalsector.Thisishelpfulinestablishingabaselineforthereformprogramme,settinginterimgoalsandsubsequentlyevaluatingtheprogressofreformefforts.Conductingsuchanassessmentwillprovideanswerstoanumberofkeyquestions,includingbutnotlimitedtothefollowing:

Questions with respect to the market• What is the total nationwide volume of

mail traffic (in postal items)?• What is the mail traffic volume per person

per year?• What is the breakdown of mail traffic by

type of item?• What is the share of different operators in

the total traffic volume?• What are the trends in these variables over

the past few years?• What are the projected future trends in

these variables?• Is there a reserved area for the designated

operator or some other type of exclusive franchise?

• To what extent are reserved area rights enforced?

Questions with respect to the universal postal service• What percentage of the population has

access to post offices?• What percentage of the population has

access to home delivery service?• What is the cost of providing the universal

postal service?• How is the universal postal service

financed?

Questions with respect to the designated operator• What is its operating efficiency in terms of

numbers of items per worker per year?• How is its economic and financial

performance?• In which market segments is it present?• What is its share of different market

segments?• What is the breakdown of costs and

revenues by different types of services?• What are the trends in these variables over

the past few years?• What are the projected trends in these

variables over the next few years?• What is its legal status?• What is the extent of its autonomy and of

any restrictions thereon?

Theseexamplesoftheroleofinformationgiveussomeideaofthenumberandtypesofquestionswhichneedtobeansweredtoprovidespecific,objectivebaselinedataasastartingpointforthereformprocessaroundwhichthoseinchargeofsectorreformworkandstakeholderscanbeginforgingaconsensuswithrespecttoprevailingconditionsinthenation'spostalsectorand,lateron,buildaconsensusaroundthegoalsandobjectivesofnationwidesectorrestructuringefforts.

53

Section3.3(Evaluations)looksathowthisbaselinedatashouldalsobeusedasabenchmarkinsubsequentevaluationsoftheprogressofpostalreformforanobjectiveassessmentoftheresultsofreformefforts.

Theavailabilityofdifferenttypesofdatagenerallyvariesquiteabit.Certaintypesofdataareconsideredclassicindicatorsand,assuch,arereadilyavailable.

Othertypesofdatamaybenon-existentandmayneedtobedeveloped,whichcouldrequireinputsofspecializedtechnicalresources.

Obviously,theabilityofmanygovernmentstofurnishnecessaryresourcesforthegenerationofsuchdataislimited,particularlyinthefaceofwhatareconsideredtobehigherpriorityneeds.Thereisaclearcost-benefitratiowhichneedstobeconsideredinmakingdecisionswithrespecttotheallocationofresourcestopostalreformefforts.Moreresourcesmeanbettertechnicalaccuracyand,thus,abetterlikelihoodofasuccessfuloutcome.

Amongpostalreformissues,oneofthemostpivotalissuestobeaddressedintheframingofaproposalforreshapingthepostalsectorhastodowiththeroleofthedesignatedoperator.Itscharacterizationas"designated",initself,setsitapartfromotheroperatorsonthepostalmarket.Moreover,theterm"designated"referstotworatherdifferentconcepts,namelytothepartychargedwithprovidingtheuniversalpostalserviceandfulfillingthegovernment'scommitmentswithrespecttointernationalpostaltreaties.

Asfarasitsownershipisconcerned,theoperatorisownedbythegovernment,whichholds,ifnotall,thenatleastenoughsharestoensureeffectivegovernmentcontrol.Untilrecently,theterm"public"wasusedforoperatorsownedbythegovernment.Certaindesignatedoperators,however,havemadetheircapitalavailabletothegeneralpublicbylistingonthestockexchange,andarereferredtointhiscontextas"publicenterprises",socareshouldbetakennottoconfusetheseterms.Mostpostaloperatorsindevelopingcountriesfitthedefinitionofgovernmentownership.Fromanorganizationalstandpoint,theycanrangefromcentralgovernmentdepartmentstogovernmentagenciesandenterpriseswithindependentlegalstatus.

Thereareafewexamplesof"private"designatedoperators,inwhichthegovernmenthasnoshare.Insuchcases,thegovernmenthasconcludedamanagementorconcessionagreementstipulatingthatthecompanygrantedtheconcessionhastheobligationofprovidingpostalservices,includingtheuniversalservice,thecostofwhichmay,incertaincases,bereimbursed.Thisconcessionistime-limitedandthegovernmentretainstherightto"designate"another"designatedoperator".

Asforthenatureofitsservices,adesignatedoperatorisresponsibleforprovidingtheuniversalpostalservice,whileprivateserviceoperatorsaregovernedsolelybymarketrules,withnoneoftheobligationsimposedonthedesignatedoperator.Indevelopingcountriesandaroundtheworld,thedesignatedoperatornotonlyprovidesuniversalpostalservicesperse,butalsooffersotherservicesopentocompetitionasasourceoffinancing.

AsusedinthisGuide,thetermdesignatedoperatorreferstothepostaloperatormandatedtoprovidetheuniversalpostalserviceand,assuch,requiredtoprovideaccesstopostalservice(eveninremoteareas)throughanetworkofinterconnectedservicepoints.Thedesignatedoperator'scoststructureisquitedifferentfromthatofotherpostaloperatorswiththeabilitytoconfinetheirservicecoveragetomorelucrativeareas.

Thereisacasetobemadeforthefactthatothersectorsoftheeconomy,suchasthetelecommunicationsandpowersectors,whichalsoinvolveuniversalserviceobligations,donotimposesuchobligationsonasingleserviceoperator.Inmanycases,universalservicecoverageinthesesectorsisensuredbydifferentserviceoperatorsonaregion-by-regionbasis.Whilecertainlyapossibilitywhichshouldnotbediscardedinthepostalsector,andwhichforpoliticalorgeographicalreasonsisalreadyarealityincertaincountries,suchanoptionisnotwidespread,evenincountrieswithamoredevelopedpostalmarketorinamoreadvancedstageofpostalreform.Thepostalsectorhasuniquefeatures,suchasanintegratedphysical(domesticandinternational)networkmanagementsystem,theneedforhighvolumeandacoststructuresettingitapartfromothersectorsoftheeconomyandprecludingthedirecttranspositionofmodelsusedinotherareas.

Athoroughunderstandingofthestructuralfactorsatplayinthepostalsectorisvitalforanyoneundertakingapostalreformeffort.

Thus,thedesignatedoperatorisanimportantlinchpininanyreformeffort.Internalfactorswarrantingspecialconsiderationinclude,withoutbeinglimitedto,itseconomicandfinancialstabilityandphysicalproductivity,aswellasuniversalservicefinancing,infrastructuremodernizationprogrammes,expansionsinitsservicecoverage,servicemodernizationefforts,humanresourcedevelopmentandmanagementdevelopment.

3.1.4

Role of the designated

operator

54

Thisallusiontotheimportanceofthedesignatedoperatorisintendedtounderscoretheimportanceoftheuniversalpostalservices,whicharewhatsetitapartfromotherpostaloperators.Whenaddressingthisissueindiscussingpostalreform,inshouldbeborneinmindthatitisnotonlytheinternalfeaturesofaparticulardepartmentorenterprisewhicharebeinglookedatunderamicroscopebut,moreimportantly,themodelforexpandinguniversalaccesstonationwidepostalservices.

Apostalreformprocessissomethingmorethanthemerepassageoflegislation.Previousexperienceswithpostalreformviewedasanythingotherthanall-inclusive,ongoingprocesseshavefailedtoproduceanytangible,sustainable,long-termbenefits.Theeconomicandsocialimportanceandcomplexityofthepostalsectorareincompatiblewithpiecemealsolutionsorprototypemodels,whicharemuchmorelikelytocreatenewproblemsthantosolveanyexistingones.

Section3.2.1looksatthemaindiscussiontopicsfortherestructuringofthepostalsector.Section3.2.2outlinestheframeworkforareformprocess.Lastly,section3.2.3underscorestheimportanceoflearningfromexperienceswithotherreformprocessesandtechnicalcooperationmechanisms.

Thesearchforso-called"canned",ready-to-usemodelsisacommonphenomenon.However,such"solutions"havenoplaceinthepostalsector,whichrequirestheframingofproposalsgearedtoeachindividualcountryanditsuniquecharacteristics,rulingouttheuseofasingle,standardizedmodel.However,wecanandshouldtakealookatdifferentexperiences,nottoreplicatethembut,rather,toavoidmakingthesamemistakes,ortostudytheirstrengthswithaviewtotheiradaptationtoconditionsatthecountrylevelforuseindevelopingacountry-specificmodel.

Importantissuestobeaddressedinclude:

• extent of universal service coverage: howmuchemphasisistobeplacedonexpandinguniversalaccesstopostalservice.

• cost of universal service:lower-costversushigher-costservicedeliveryoptions.

• universalservicefinancing:no,limitedorlargeinfusionsofgovernmentfundingtofinancetheprovisionofuniversalpostalservice.

• extent of competition: howmuchcompetitionisenvisagedinthepostalsector.

• ownership of the public operator: agovernment-ownedversusamixedorprivateoperator.

• separation of regulatory and operational functions: extentoftheseparationofthesetwofunctions.

• autonomy of the regulatory agency: howmuchpoweristobevestedintheregulatoryauthorityforthepostalsector.

• autonomy of the designated operator: howmuchadministrativeautonomyistobegrantedtothedesignatedoperator.

• modernization of the designated operator: howmuchemphasisistobeplacedonmodernizingtheuniversalpostalserviceprovider.

• regulation of the postal sector: howmuchregulationisenvisagedinthepostalsector.

• regional-international integration: howmuchemphasisistobeplacedonfacilitatingdomesticmarketintegrationwithregionalandinternationalmarkets.

Theseconceptsaregraphicallyillustratedinthefollowingfigure:

−Extentofuniversalpostalservice

coverage+

− Costofuniversalservice +

−Governmentfinancingofuniversal

service+

− Extentofcompetition +

− Ownershipofthedesignatedoperator +

− Autonomyoftheregulatoryagency +

− Autonomyofthedesignatedoperator +

−Modernizationofthedesignated

operator+

− Regulationofthepostalsector +

−Separationofregulatory–operational

functions+

− Regional–internationalintegration +

Theseissuesareallinterrelated.Thus,theoptionchosenineachcasewillhaveadirectimpactontheotherfactors.Forexample,amajorexpansioninuniversalpostalservicecoveragemeanshigherservicedeliverycostsand,asaresult,mayrequiregovernmentassistanceinfinancingsuchcosts.

Likewise,theextentoftheseparationofregulatoryandoperationalfunctionswillaffecttheautonomyoftheregulatoryagency.

3.2

Design and implementation

of the reform process

3.2.1

Postal reform issues

55

Thereformprocessshouldbebasedonafull-scalestudyofprevailingconditionsinthepostalsector,includinghistoricaldata,comparisons,internationalbenchmarksandtheframingofproposalsfordiscussionandeventualapproval.

Ingeneral,in-depthstudiesofthefollowingissuesshouldbeincludedaspartofthisprocess:

1. International postal environment: studiesdesignedtoestablishanddescribetheinternationalenvironmentsurroundingtheoperationofpostalservicesaroundtheworld,examininghistoricalpatternsofchangetodateandtrendsinselectedcountries,includingbutnotlimitedtothefollowingelements:

a. astudyofhistoricalpatternsofchangeontheworldwidepostalmarket,includingmajorpostalproductsandservicesandtrendsinmailtraffic;

b. anassessmentoftheimpactofthedevelopmentofnewtypesofcommunicationstechnologyonthepostalmarket;

c. astudyestablishinganddescribingtheextentoftheuseoftechnology;

d. aperformanceevaluationofoperational,economicandmarketmanagementfactors;

e. across-countrystudyofreformsintheregulatory/institutionalframeworkforthepostalsectorexposingpossibletrendsandshowingthedifferentmodelsusedinthisconnection;

f. anoutlineofmajorpostalproductandserviceofferingsshowingtrendswithrespecttotheirexpansionand/oreliminationandcorrespondingstandardsofquality;

g. astudyofthemarketshareofthedesignatedoperatorandprivateoperators,brokendownbytypesofservices;

h. anexaminationoftheaccepteddefinitionoftheconceptofuniversalserviceandofhowithasevolvedovertheyears;

i. astudyofeconomic-financialcompensationmechanismsfortheprovisionofuniversalpostalservice;

j. adescriptionofoutreachactivitiesinwhichpostaloperatorscarryoutgovernmentprogrammes,withanoutlineofcorrespondingpaymentorcompensationmechanisms;

k. adescriptionofthecharacteristicsofthedesignatedoperator,identifyingthefactorsensuringitseconomic-financialstabilityasserviceprovider;

l. adescriptionoftheregulatoryagency,includingitscharacteristics,powers,structure,representativenessandsourceoffundingandtheregulatorymechanismsinplaceandintheimplementationphase;

m. adescriptionofthemajorprivateoperatorsonthepostalmarket,establishingtheirtargetmarketsegmentandgeographicbreakdown,thetypeofservicesrenderedandtheirrelationshipwiththeregulatoryagencyanddesignatedoperator;

n. adescriptionofthedesignatedoperator,ataminimum,establishingitstargetmarket,businessstructure,ownershipstructure,economic-financialandoperationalindicators,legalstatus,degreeofautonomy,powers,obligationsandrelationshipwiththeregulatoryagencyandprivateoperators.

2. Domestic postal environment:studiesdesignedtoestablishanddescribetheextentofthesatisfactionofdomesticpostalmarketneeds,examiningsupplyanddemandforexistingproductsandservices,brokendownintoasmuchdetailaspossible,includingbutnotlimitedtothefollowingelements:

a. adescriptionofexistingproductandserviceofferingsbythedesignatedoperatorandbyprivateserviceoperators,includinganexaminationofcorrespondingsupplyanddemanddataandoftheirrespectivemarketshares;

b. astudyofhistoricaltrendsinproductsandservices,brokendownintoasmuchdetailaspossible,andanexaminationofannualqualitativeandquantitativeprojectionsofdemandforpostalservices,ataminimum,brokendownbytypeofservice,customerandgeographicarea;

c. adescriptionofcomplementaryproductsandservicescompetingwithorcrowdingoutofferingsbyoperatorscurrentlyactiveonthatmarket;

d. astudyoftrendsinthelifespanofeachproductandserviceinthefaceofeconomicandtechnologicaldevelopmentsandchangesinanyothervariablesaffectingthelaunchingofeachsuchproduct/serviceontothemarket;

e. astudyofpostalservicecustomer/userprofiles,brokendownbyproductandservice,incomebracket,location,legalstatus,theextentoftheirusageofpostalproductsandservices,etc.;

f. anoutlineandanalysisofthedesignatedoperatorandprivateoperatorsofferingpostalproductsandservices,establishingtheirtargetmarketsegments,theirrespectivemarketshares,expansionaryand/orcontractionarymarkettrends,etc.;

3.2.2

Organization of the reform

process

56

g. adefinitionoftheconceptofuniversalpostalservice,ataminimumestablishingthetypesofcoreservicesincludedinthisconcept,theirgeographicanddemographiccoverage,theregularityofmailcollectionandhomedeliveryservice,thebusinesshoursofretailoutlets,standardsofqualitywithrespecttodeliverytime,reliabilityandsecurity,andcorrespondingenforcementandcompliancemonitoringmechanisms;

h. astudyoftheeconomic-financialfeasibilityofprovidingself-sustaininguniversalpostalservices;

i. astudyofdifferenttriedandtesteduniversalpostalservicefinancingoptions,includingspecificdatawithrespecttotheireconomic-financialimpact,scope,historicalperformanceandimplementationmechanisms;

j. alookatpostalservicestobeopeneduptocompetitionfromdifferentpostaloperators,specifyingallnecessarystandardsandregulationsforserviceoperation,monitoringandsupervisorypurposes.

3. Legal issues:conductofstudiesdesignedtoestablishanddescribethecurrentlegalframeworkanddraftingofnecessarylegislationinstitutionalizingthestructuralreformprocessinthenation'spostalsector.Necessarystepsfortheaccomplishmentofthistaskinclude,withoutbeinglimitedto,thefollowing:

a. identificationandanalysisofcurrentlegalandadministrativeinstrumentsgoverningthepostalsector;

b. studyofthecontentoftheselegalandadministrativeinstruments,checkingforanyinconsistencies;

c. designofaregulatorymechanismforthepostalsector,ataminimumincludingtheregulatoryagency,itscharacteristics,powers,structure,representativecapacity,sourceoffundingandregulatorymechanisms;

d. descriptionofnecessarystandardsandregulationsfortheoperationofpostalservices;

e. indicationofnecessarylegislativeamendmentsforfullandeffectiveoperationofthenationwidepostalmarket;

f. draftingofnecessarylegalinstrumentsfortheimplementationofenvisagedreforms.

3.2.3

Learning from experience

Eachcountryhasdistinctivefeaturesandconditionssettingitapartfromothercountries,alongwithauniquesetofequallyimportanthistoric,cultural,social,political,economicandotherfactors.

Thisispreciselywhyitisinadvisabletomakeoverlysimplisticcomparisonssuchas"what'sgoodforcountryAisgoodforcountryB."Aspointedoutearlier,effortstomodernizeanycountrybasedonameretranspositionofeventhemostsuccessfulmodelsorexperienceshaveendedupasmajorfailuresanddisappointments.Alookattheworldwidepostalsectorrevealsanumberofactualexperiencesbearingoutthiscontention,evenintheearlystagesofalarge-scalereformeffort.

Similarcomparisonsofthepostalsectortoothersectorsofactivitywithinthesamecountryarejustasunsoundassuchcross-countrycomparisons.Reformsofthepower,watersupply,transportationandtelecommunicationssectors,forexample,areofteninvokedasmodelstobefollowed(orused)forpostalreformpurposes.

Whilecertainlessonscanbelearnedandacertainamountofexperiencegainedfromexaminingaccomplishmentsinthesesectors,ameretranspositionofconceptsandmodelshasprovenineffectiveinthefaceofthedifferentconfigurationofeachsector,whichrequiresanindividualizedapproachtoaddressingtheiruniquefeatures.Examplesinclude:

• entrybarriers; • thescaleofoperation; • thecapitalstructure; • thetechnologicalobsolescencecycle; • theextentofcompetition; • thebalancebetweensupplyanddemand; • theextent,objectiveandintricacyofsectorregulation;

• structuralornaturalconstraints; • thetypeandamountsofinvestmentsneeded.

Thus,whilerecognizingtheimportanceandvalueofdrawingonexperiencesinothersectorsofactivityandothercountries,thefactofthematteristhatthepostalsectorisahighlyspecializedsectorfromatechnicalstandpoint,deeplyrootedintheeconomicandsocialenvironmentofeachparticularcountry,andmustbetreatedaccordingly.However,thisdoesnotmeantosaythatitcannotbenefitfromlessonsdrawnfromotherreformefforts.Theaim,here,isnottoanalyzespecificexperiencesbut,rather,topinpointcommondeterminingfactorsinthesuccessorfailureofreformefforts.

57

Veryfewcountrieshaveactuallycompletedapostalreformprogramme.Mostcountriesundertakinganorganizedpostalreformeffortarestillintheimplementationphaseofsuchprocess.Thus,therearenotreallyanyentrenchedexperiencesinthisareawhichcanbeconsideredalastingsuccess.Anumberofsuchinitiativesaregoingwellandcanbeasourceofvaluableexperienceforthoseinalessadvancedstageofthissameprocess.Therearealsoexamplesoffailedexperimentswhichcanalsoprovideimportantlessonsforthoseabouttoundertakeapostalreformeffort.

Thus,theprogressmadebydifferentcountriesundertakingpostalreformeffortsisareflectionoftheeffectofspecificmindsetsonthecourseordirectionoftheirworkand,measuredagainstthebaselinescenario,oftheextentoftheirsuccessorfailureinachievingtheirgoals.

Thesemindsetsareoutlinedinthefollowingtable:

Factor Success Failure

Action Proactive Reactive

Focus Sector structure

Sector-wide conditions

Vision Long-range Short-range

Approach Integrated; systematic Piecemeal

Objectives Sector-specific

Beyond the sector

Political climate Stable Unstable

Leadership Strong commitment

Little commitment

Designated operator staff Highly engaged

Little involvement

Transparency Strong Weak

Technical know-how Strong Weak

Reform financing Certain Uncertain

InstitutionalizationWithin the

existing legal model

Outside the legal model

Universal service Main objective

Secondary objective

Designated operator Strengthened Weakened

Universal service financing Secured Not

addressed

Quality Main objective

Not addressed

Management of the designated operator Modernized No change

Public involvement Strong Limited

BoththeUniversalPostalUnionandcertainrestrictedunionshavetechnicalcooperationmechanismsprovidinginvaluableaccesstoanextensivedatabaseonpostalreform.

Afamiliaritywiththeexperiencesofothercountriesundertakingpostalreformefforts,notonlyhelpsmanagersandtechnicalexpertsinvolvedinreformprocessessavetime,effortandresources,butalsoprovidesawiderangeofdirectexperiencesasthebasisforcheckingoutselectedalternativesandexaminingtheirsuccessesandfailures.

3.3

Evaluation Thesuccessofapostalreformeffortwillneedtobeevaluatedbasedonobjectiveindicatorsanalyticallyreflectingchangesfromapreviouslyestablishedscenario.

Theextentofuniversalpostalservicecoverage,theeconomic-financialstabilityofthedesignatedoperatorandimprovementsinservicequalityareallbasicvariablesreflectingtangiblechangesinacountry'spostalsector.

Itwouldbehardtoregardareformeffortasanywherenearsuccessfulwithoutimprovementsinthiscoresetofvariables.Thisunderscorestheimportanceofadvanceplanningfortheevaluationofreformefforts,sothatthoseheadingupsucheffortshavesomewayofmonitoringtheprogressofworkand,eventually,sothatthepubliccanseeforitselfhowmuchprogresshasbeenmade.

Tothisend,section3.3.1takesalookattheevaluationprocess,whilesection3.3.2discussestheestablishmentofperformanceindicators.Lastly,section3.3.3talksabouttheimportanceofestablishinganevaluationand"coursecorrection"oradjustmentcycleaspartoftheimplementationofapostalreformprocess.

58

Inmountingareformeffort,itisimportanttotakethetimetoestablishamechanismforsystematicallyevaluatingperformanceagainstitsoriginalgoalsandobjectives.

Tothisend,theobjectivesofthereformeffortneedtobebrokendownintobenchmarksforpurposesofestablishingitsimpact.

Example:

Objective 1: Expand universal access to postal service

Benchmark Year

1

Year

2

Year

3

.……

.

Year

n

Percentageofthepopulationservedbyapostoffice

Percentageofthepopulationwithhomedeliveryservice

Objective 2: Help make the universal service operator economically and financially self-sustaining

Benchmark Year

1

Year

2

Year

3

.……

.

Year

n

Economicandfinancialperformanceofthedesignatedoperator

Spendingonmodernizationandexpansion

Amountofthesubsidyreceivedbythedesignatedoperator

Thisevaluationmethodconvertsdescriptiveobjectivesintoclear,measurableperformancebenchmarksgivingpostalreformmanagersaprettyclearpictureoftheextenttowhichtheiroriginalobjectivesarebeingmet.

Thetableonthefollowingpagecontainsasamplesetofindicatorsforevaluatingtheprogressofpostalreformeffortsovertime.Thissetofsuggestedvariablesisbynomeansanexhaustivelistofallpossibleindicatorswhichcouldbeusedforthispurpose.Itdoes,however,furnishdifferenttypesofanalyticaldataprovidingagoodoverviewoftheprogressofthepostalreformprocessinquantitativeterms.Dependingontheoriginalobjectivesofthereformmovement,someofthesesuggestedvariablescanbediscarded,whileotherscanbeaddedandbuiltonwithaviewtosystematicallyandobjectivelyevaluatingtheprogressofpostalreformefforts.

Thesequalificationsaretobeborneinmindinexaminingthefollowingoutlineofperformancebenchmarks.

Benchmark Year

1

Year

2

Year

3

.……

.

Year

n

Totalvolume

Volumeperperson

Volumeperworker

Postalworkerspercapita

Averagenumberofhoursoftrainingperworker

Numberofdaysthedesignatedoperatorwasshutdownbystrikes

Numberofresidentsperpostoffice

Percentageofthepopulationservedbyapostoffice

Percentageofthepopulationwithhomedeliveryservice

Percentageofthemarketrepresentedbyreservedservices

Marketshareofthedesignatedoperator

Basicletterrate

Qualityofservice

Percentageoflostmailitems

Averagepercentageofmanuallysorteditems

Economicandfinancialperformanceofthedesignatedoperator

Spendingonmodernizationandexpansion

Amountofthesubsidyreceivedbythedesignatedoperator

Spendingonmodernizationandexpansion

Amountofthesubsudyrecievedbythedesignatedoperator

Indevelopingnewindicators,itshouldbeborneinmindthattheirutilitywillbedeterminedbytheextenttowhichtheymeetthefollowingrequirements:

• simplicity: clearunderstandingoftheirimport; • objectivity: canbeevaluatedinanon-subjectivemanner;

3.3.1

Evaluation of the reform

process

3.3.2

Establishment of performance

indicators

59

• credibility: reliablesourcesandmeansofverification;

• execution: feasiblesourcesandmeansofverification;

• timeliness:canbeverifiedinatimelyfashionfordecision-makingpurposes;

• comparison: goodbasisforcomparativebenchmarking.

Postalreformisessentiallyaplanningprocess.Itassessesthesituationandimplementsproposedchangesdesignedtoproduceanew,moredesirablesituation.Thisisaccomplishedbyusingplanningtoolstomoreeffectivelymanagethereformprocessbyreducingthenumberofuncontrolledvariables.

However,aplanisacourseofactiontobefollowed,inwhichdeviationsfromtheoriginalplanareadistinctpossibility.Accordingly,evaluationsreflectinganysuchdeviationswillrequireadjustmentsinthesituationdeviatingfromtheestablishedmodel.Inpractice,thisisacyclical,interactiveprocess,asgraphicallyillustratedinthefollowingfigure:

Act

EvaluateAdjust

Plan

Thisonlyservestoemphasizethefactthatareformeffortdoesnotendwiththepassageofapplicablelegislation.Onecouldsaythatitactuallybeginsatsuchpoint,whenallpreviouslydiscussed,agreed-onandformallyadoptedproposalsbegintotakeshapeintherealworldofthepostalsector.Dependingonthemagnitudeofthereformeffort,thiscantakeseveralyears,asinthecaseofpostaladministrationslookingtomakedeep-seatedchangesinbasicbuildingblocksofthepostalsector.

Topreventtheconsensusachievedasofthedateofthepassageofcorrespondinglegislationfrombreakingdown,itisessentialtoestablishaframeofreferenceforthepursuitofreformefforts.Asworkcontinues,therecouldbeaneedforfurtherstudies,unanticipatedtechnicaldesignwork,additionalfollow-upprojectsor,inshort,countlesssituationsrequiringdecision-making,monitoringandmanagementefforts.

Postponingsuchactivitiescouldjeopardizecompliancewithestablisheddeadlinesandtheattainmentoftargetedoutcomes.Italsorunstheriskofthwartingtheattainmentofenvisagedbenefitsforthepostalsectorand,moreimportantly,forthegeneralpublic.

Thefollowingmainelementswillneedtobeclearlyestablishedtoensurethecontinuityofsectorreformworkinlinewithpreviouslyinstitutedguidelines:

• Line of authority: clearlyidentifyingthoseinchargeofheadingupfollow-throughefforts;

• Decision-making model:showingthetypesofsituationsrequiringdecisions,aswellasthedifferentdecision-makinglevelsinvolved;

• Action plan: establishingproceduresforthepursuitofworkundernormalcircumstancesandinemergencysituations;

• Evaluation reports: establishingthecontent,timingandrecipientsofregulardataontheprogressofwork;

• Other mechanisms: capabilitiesandprocessesforconductingnecessaryfollow-upstudies,analysesandprojectsunderpinningthepursuitofpostalreformeffortsfromatechnicalandpoliticalstandpoint.

3.3.3

Acting on evaluation data

Module IIThe Universal Postal Service

63

Inlinewithreportedtrendsinpostalregulationandtheuniversalpostalservice,the1999UPUCongressinBeijingwasinstrumentalinhelpinganumberofmembergovernmentsrecognizetheneedtotakeactiontoensurethefutureoftheuniversalpostalserviceandofpostalserviceingeneral.

TheadoptionoftheBeijingPostalStrategyandthepivotalroleassignedtotheuniversalpostalserviceintheUnion'sglobalstrategyexpandedissueswhichhadpreviouslybeenclearlydefinedbythe1994SeoulCongresstoincludenewelementsshapingthefutureofpostalserviceintoday'srapidlychangingworld.

TheWorldPostalStrategiesadoptedbysubsequentUniversalPostalCongressesmaintainedtheuniversalpostalserviceasoneofthecoreelementsoftheUPU'sactionplan,withincreasingimportanceassignedtoissuesinvolvinguniversalpostalservicequality,aswellasaccessandsecurity.

ThemostrecentUniversalPostalCongressadoptedtheIstanbulWorldPostalStrategy(IWPS).Goal3onfosteringmarketandsectorfunctioningincludesafocusontheuniversalserviceobligation.Infact,programme1undergoal3makesrecommendationstodesignatedoperators,governments/regulatorsandUPUbodiesintermsoftheirrespectiverolesinthatarea.

Atthesametime,thecurrentUPUmissionconsidersuniversalpostalservicesasoneofthecornerstonesofthepostalservice:

UPU mission: 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 by:

• guaranteeing the free circulation of postal items over a single postal territory composed of interconnected networks;

• encouraging the adoption of fair common standards and the use of technology;

• ensuring cooperation and interaction among stakeholders;

• promoting effective technical cooperation;

• ensuring the satisfaction of customers' changing needs.

ThemaingoalofthefoundersoftheUPU–indefiningasinglepostalterritoryandtheobligationtooffercertainbasicservices–remainsembodiedintheconceptoftheinalienablehumanrighttosendandreceivemail.

Theseunderlyingprinciplesoftheuniversalpostalservicehelpgovernmentslaythefoundationforthedevelopmentofpostalservicesintheirrespectivecountrieswithaviewtomaintainingaworldwidepostalnetworkaccessibletoallsegmentsofthepopulation.

However,lasting,economicallyviableuniversalpostalservicerequiresclearlydefinedconditionswithrespecttoaccess,quality,securityandregularity.Thepoliticalwillofgovernmentwasclearlyexpressedintheinstrumentsalludedtoabove.Nowthetaskathandistosetspecificgroundrulesgearedtotoday'snewworldandattunedtothenewregionalandglobalenvironment.

Introduction

64

Oneofthemainproblemsinanumberofcountriesisgovernment'sdifficultyinunderstandingthedifferencebetweendomesticpublicservicesandpublicservicesstemmingfromcommitmentsmadeunderinternationaltreaties.

Thedifferencebetweenpublicservicessuchaselectricity,educationandhealth,forexample,andpostalservicesisthattheformerarenotsubjecttoanyoutsideperformancerequirementsand,assuch,aremoreinlinewithnationaldevelopmentpolicy.

Incontrast,inthecaseofpostalservices,governmentsarerequiredtomaintainanation-wideuniversalpostalservicenetwork.Unfortunately,inmanycases,nationaldevelopmentplansandsectorprogrammesincludenoprovisionsformaintainingandupgradingthatpostalnetwork.

Thus,itisimportanttomakegovernmentsawareoftheneedtosetclearrulesforthecontinuingoperationofuniversalpostalservicesandtoputforwardspecificplansenablingthemtomeasurecompliancewiththisobligation.

Forobviousreasons,thetaskofsensitizingnationalgovernmentofficialstotheseneedshasfallenonthetraditionaluniversalpostalserviceoperator,whosefundamentalpurposeistheprovisionofthisservice.

Inmanycountries,theabilityofthetraditionaluniversalpostalserviceoperatortofulfilitsresponsibilitieswasensuredprimarilythroughgovernmentfundingofthecountrywidepostalnetwork,withgovernmentsubsidizingallorpartofitsoperationsand/ormaintainingamonopolytoprotectbasicpostalservices.Moreover,theoperatorfacedlesspressureintermsofqualityandspeed,andthishelpedkeepcostslowerthanatpresent.

Thesituationbegantoradicallychangeinthelate1980sundertheinfluenceofvariouskeyfactors:competitionfromprivateenterprise;theeffectsofglobalization;systematicchangesingovernmentpolicydrivenbycorporatizationprocesses;urbandevelopmentleadingtomuchlargercities;andtheglobaleconomiccrisis.

Thefirsteffectofthesechangesonthepostalenvironmentwasthedebilitationofthetraditionalpostaloperator,whoseinvestmentcapitaldriedupinthewakeoftheragingeconomiccrisesinsomanycountries,leadingtotheusualbudgetaryclamp-downsongovernmentagencies.

Thesecondeffectofthesephenomenawasthehaphazarddefactoifnotdejureliberalizationofthepostalmarketsofmanycountries.Theproblemwasnottheinstitutionoffreemarketprinciplesperse,butthefactthatsuchprinciplesappliedonlytotheprivateenterprisespenetratingthemarket,withoutimposinganyrequirementsonthemwhatsoever,whilethetraditionaluniversalpostalserviceoperatorwasdeniedgovernmentfundingthoughrequiredtocontinuetomaintainthenationwidepostalnetwork.

Thus,privateoperators(couriercompaniesinparticular)grewsteadilystronger,targetingthemostlucrativeserviceareasandmarketniches,whilethetraditionaloperatorgrewsteadilyweakerintheabsenceofclearregulationsandanactionplantoensurethecontinuedmaintenanceofthepostalnetwork.

Thankstointernationaldevelopmentsinpostalregulationandtheuniversalpostalserviceandcountlessconsciousness-raisingmeasurestargetedatgovernmentofficials,manygovernmentshavecometorecognizetheneedtoestablishalegalframeworkforthepostalsector.

However,inordertotakedeep-seated,lastingmeasurestoturnaroundthecurrentsituationincertaincountries,stakeholdersdirectlyinvolvedinthesemattersneedaspecific,simpletooltohelpthemcraftaplanfortheimplementationoftheuniversalpostalserviceaspartofabroader-basedreformprocess.

65

Thismodule,whichconsistsofthreesectionsandaseriesofannexes,isdesignedtofacilitatethetaskofframingaplanfortheimplementationoftheuniversalpostalserviceand,assuch,tobeusedbycorrespondingplannersasthebasisfortheirwork.

Section Idiscussestheunderlyingprinciplesoftheuniversalpostalserviceandaddressesanumberofissuesunderscoringtheimportanceoftheconceptoftheuniversalpostalserviceandtheobligationofgovernmenttoensurethesustainableoperationofsuchservices.

Thus,thismoduleprovidespracticalguidanceforaclearunderstandingofthescopeofworkinvolvedinthedemarcationoftheuniversalpostalservice,itsinclusionindomesticlegislationandtheframingofspecificactionplansforexpandingserviceoperation.

Section IIaddressestheissueofthedemarcationoftheuniversalpostalserviceandtheorganizationofdevelopmenteffortsindifferentareasasthebasisfortheestablishmentofnationwideuniversalpostalservice.

Ittalksaboutthepivotalimportanceofthedecision-makingprocessforthedemarcationoftheuniversalpostalserviceasthebasisformarketorganization,thefuturedevelopmentofpostalservicesandthepostalsectorandforbuildingthecapacityofthepostalsectortohelppromotenationaleconomicgrowthanddevelopment.

Amongotherthings,itlooksatdecisionswithrespecttouniversalpostalservices,servicedeliveryconditionsandapplicablelegalinstruments.

Lastly,section IIIdealsspecificallywiththeissueofuniversalpostalservicefinancing,underscoringthepivotalimportanceofuniversalpostalservicefundinginensuringthelong-termsustainabilityandviabilityofthesemandatorygovernmentservices.

Thus,themoduleisdesignedtoserveasareferenceaidandtoolforthecomplicatedtaskofestablishingaframeworkfortheoperationofpostalservices,bearinginminddifferencesinconditionsatthecountryandinternationallevelsanddifferencesintheconceptualframeworkforthedevelopmentoftheuniversalpostalservice.

Accordingly,theofficialsinchargeofthesetaskswillneedtoexaminenationalpolicyanddevelopmentplanningissuesfortheformulationofaproperstrategyleadingtotheapprovalofaregulatoryframeworkhelpingtoensurethefutureoftheuniversalpostalservice.

Section IUnderlying principles of

the Universal Postal Service

69

Tobeginwith,itisnecessarytofullygraspthemeaningandscopeoftheconceptof"universalpostalservice,"thefocusofthismodule,examinedindepthonthefollowingpagesoftheguide,foraclearerunderstandingofthisconceptandtopromoteitseffectiveimplementation.

Accordingtothegeneraldefinitionofthisconcept:

"Universal postal service" refers to the basic postal services which the government has pledged to guarantee the entire population throughout its territory on a continuing basis, with a specific standard of quality, at affordable prices.

Theimportanceofaclearunderstandingofthisdefinitionwarrantsamorein-depthlookateachofitscoreelements.

First,bydefinition,theuniversalpostalserviceisagovernmentobligation.Governmenthasanobligationtoprotecttherightofcommunicationasabasichumanright.Associetyhasevolved,governmenthashadtotakeontheresponsibilityforensuringtheexerciseofdifferenttypesofhumanrights,includingtherighttoessentialservicesorservicesaffectedwithapublicinterest.

Secondly,againbydefinition,themaincharacteristicofsuchservicesistheiruniversality,asservicesguaranteedtoallmembersofanation'spopulationthroughouttheterritory,regardlessoftheirlocation,race,religion,socialstatus,etc.Moreover,thegovernment'sobligationisacontinuingobligationwhichcannotbeallowedtolapse,giventhetypeofrightsprotectedthereunder.Basichumanrightsdonotcomeandgo.Theyareinalienablerights.

Furthermore,accordingtothisdefinition,theuniversalservicestobeguaranteedbythegovernmentarebasicservicestobeprovidedunderspecificconditionsmeetingagivenstandardofquality,atpriceswhichareaffordableforallsegmentsofthepopulation.

Itisimportanttobeclear,fromtheoutset,thattheconceptofuniversalservicereferstotheavailabilityofessentialpostalservicesaffordingalevelofpostalcommunicationpromotingsocialcohesionandbringingtogetherpeopleandcommunities,asanintegralpartofthequalityoflifeinmodernsociety.

Attemptstodefineanddifferentiatetheconceptofuniversalserviceoruniversalityfrequentlymistakenlyconfuseitwithconsiderationsofprofitabilityandgeographiccoverage.Thus,universalserviceisoftenconsideredsynonymouswiththenotionof"loss-makingservices"or"servicetoruralorremoteareas".

Theconceptofuniversalservicereferstobothprofit-makingandloss-makingservicesandtourbanserviceindenselypopulatedcitiesaswellastoservicetorural,remote,sparselypopulatedareas.Universalpostalservicesaremadeavailabletobothindividualsandbusinesses.Individualsbenefitingfromtheuniversalpostalserviceareentitledtoenjoytherighttosendaswellasreceivepostalcommunications.Sendingandreceivingmailentailscommunication,whetheritbesocial,commercialorbusiness-related.

Applyingthedefinitionoftheconceptoftheuniversalpostalservicetoallindustrializedanddevelopingcountriesaliketranslatesthenotionoftheuniversalityofbasicpostalservicesmeetingspecificstandardsofqualityintoreality.Italsolaysthefoundationforreducingdisparitiesanddifferencesinservicedeliveryconditionstoprotectcommunicationrights,regardlessoflocationandcircumstances.

Thus,guidedbythisdefinition,thediscussionoftheuniversalpostalservicepresentedinthismoduleisdesignedtofosterabetterunderstandingofthisconceptandpromoteitsdisseminationandeffectiveimplementation.

Principles of the universal postal service

I 1

I 1.1

Definition

70

Thepointofdepartureforexaminingtheunderlyingprinciplesoftheconceptofuniversalpostalserviceisalookathowitrelatestobasichumanrightsandtoconstitutionalandinternationallaw.Theorganizationofsocietyintosovereignstatesgovernedbytheruleoflawprovidedtheimpetusforthecraftingofnationalpoliticalconstitutionsestablishingindividualrightsandobligations,aswellastheobligationsandresponsibilitiesoflegallyconstitutedgovernments.

Thus,governmentshavetakenontheresponsibilityforprotectingbasichumanrights,oneofwhichistherightofcommunication,whichinvolvesdifferentformsofcommunicationsuchaspostalservices.

Regardlessofwhethertheconstitutionexplicitlyortacitlyreferstopostalservice,inadditiontoguaranteeingtheinviolabilityofthemailandrespectfortheprivacyofcustomer/userinformation,governmentshavetraditionallyreservedforthemselvestheexclusiverighttoengageincertainstrategicactivitiesoroperatecertainpublicservicesasawaytomonitorandoverseetheirdeliveryanddevelopment.

TheUniversalDeclarationofHumanRightsadoptedbytheUnitedNationsinDecemberof1948dealswithissueswithdirecttiestopostalserviceinseveralofitsarticles.

Article12oftheDeclarationofHumanRights,dealingwiththeprotectionofprivacyrights,expresslyreferstoaperson'srighttotheprotectionofhisorhermail,asreflectedinthefollowingtext.

"No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of law against such interference or attacks."

Lateron,thetextofarticle19dealingwithfreedomofopinionandexpressionalsoappliestopostalservice,establishingaperson'srighttoreceiveandconveyinformationandopinions.Thecompletetextofthisarticlereadsasfollows:

"Everyone has the right to freedom of opinion and expression. This right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers."

Finally,article25,whichaddressestherighttoaproperstandardofliving,alsorelatestopostalserviceinestablishingaperson'srighttotheassuranceofnecessarysocialservices.

Thepertinentportionsofthetextofthisarticlearereproducedbelow.

"Everyone has the right to a standard of living adequate for the health and well-being of himself and his family (...) and necessary social services, and the right (…)"

IntheAmericas,theAmericanConventiononHumanRights,knownasthe"PactofSanJosé,CostaRica,"signedbyareagovernmentsinNovemberof1969,reaffirmedtherecognitionofbasichumanrightsattheglobalandregionallevel,establishingsimilarlegalprecepts.

Moreover,in1874,governmentsaroundtheworldagreedtojointogetherundertheaegisoftheUniversalPostalUnion,formingasingleterritorytomakethenotionoftheuniversalityofpostalserviceareality,lookingtolaythenecessaryfoundationfordischargingtheirresponsibilitytoensureuniversalcommunicationsthroughtheprovisionofeffectivepostalservices.

InratifyingtheConstitutionoftheUniversalPostalUnion,membercountriesagreedtoformasinglepostalterritoryfortheoperationofuniversalservicessubjecttostandardguidelinesandregulationstoensuretheconsistencyofsuchservicesinallUPUcountries.TheConstitution,theUniversalPostalConventionandtheinternationaltreatiessignedbymembercountriesarelegallybindingonallparties,securingspecificcommitmentsfromtheirsignatorieswithoutwhichtheexistenceofaworldwidepostalnetworkasthebasisfortheoperationofdomesticandinternationalpostalservicesineachcountrywouldnothavebeenpossible.

Thus,theexistenceofasinglepostalterritoryisvitaltotheconceptoftheuniversalpostalservice,asdiscussedlaterinthismodule.

I 1.2

Legal precepts

71

Ingeneral,acountry'spoliticalconstitutionandinstitutionalframeworkexpresslyallowforgovernmentoversightofdomesticmarketsforgoodsandservices.

Accordingly,fromtimetotime,thegovernmentwillreserveitselfownershiprightsandexclusiverightstocertainstrategicactivitiesorpublicservices,wherejustifiedbyreasonsofnationalsovereigntyorbythepublicinterest,withoutthisendangeringeconomicfreedoms.

Aserviceisconsideredpublicwhenitisrenderedinthepublicinterest.Apublicserviceisusuallyprovidedbygovernment,astheentitythatorganizescommunityresources.Incaseswhere,forbudgetaryorotherreasons,thepublicserviceisprovidedbyaprivatecompany,theconditionsoftheservicearesubjecttogovernmentcontrolandregulation.

Publicserviceshavechangedintoday'smodernworldandglobalmarketeconomy.Socialdevelopmentrequiresincreasinglylargeinfusionsofgovernmentfundingfortheprovisionofpublicservices,whicharegettingharderandhardertocomebyduetofinancialconstraints.Health,educationandsecurityarestillgiventoppriority.

Againstthecurrentbackdropofaglobalizedmarketplaceandmarketeconomy,serviceindustriesarebeinggraduallyliberalizedandopeneduptoprivatecompetition,withregulationandgovernmentregulatoryfunctionstakingonincreasingimportance.Thegoalininfrastructureservicesectorssuchasports,airports,power,telecommunications,etc.,dependingonthespecificcharacteristicsofongoingactivitiesineachsector,hasbeentomodernizeandimprovetheavailabilityofsuchservicesbyexpandingaccessandservicecoverage,improvingqualityandloweringcoststhroughsectordevelopmentpoliciesandmechanismsdesignedtoimprovemarketconditionstohelpfostergrowthandinvestment.Aspublicservices,postalservicesarealsoaffectedbytrendsintheprevailingeconomicenvironment,ifsomewhatmoreslowly.

Thereisalargeprivatepresenceinthehigh-incomeexpressmailsegmentofthepostalmarketopentofreecompetition,withlimited-coverageservicenetworksconfinedtomorelucrativegeographicareas.However,indevelopingcountries,privatecompaniesalsoparticipateinthedeliveryofbasicservices.

Asfarasbasicservicesareconcerned,thereservedarea–whichincludessomeservicesandtheuniversalserviceobligationinallgeographicareas,includingremoteorhard-to-reachareas–requiresmorestringentcontrolstoguardagainstcream-skimminginmorelucrativeserviceareassuchasdenselypopulatedurbanareaswithhighconcentrationsofbusinessandindustry.

Lookingaheadtotheimmediatefuture,marketconditionsrequireaclear,nationwide,sectordevelopmentpolicyandmoretransparentregulationsasabasisforthedevelopmentofthepostalsectorsoastocontinuetoensureuniversalaccesstobasicpostalservices.

Thegrowthofthenationaleconomyiscontingentonregularcontributionsfromallnationalinfrastructuresectors,includingthepostalsector.Thus,basicpostalservicesneedtobeexpandedtoeffectivelycontributetothenation'sgrowth.

Balancingsupplyanddemandrequiresanall-outeffortonthepartofgovernmentintermsofpolicymaking,planningandinvestmenttobringthelevelofserviceinlinewithmarketdemand.ModuleIVoftheguidedevotesanentiresectiontotheuniversalpostalserviceoperator.

The public

I 2

I 2.1

Public services

72

Thesectionofthepreviouschapterdiscussingthelegalpreceptsunderlyingtheconceptoftheuniversalpostalservicetouchedonthesubjectoftheobligationsofgovernmentwithrespecttopublicservicesingeneralandpostalservicesinparticular.However,thisissuewarrantsamorein-depthdiscussion.Governmentobligationswithrespecttoapublicservicelikethepostalservicestemfromtwomainsources.Firstandforemost,theyarerootedintheconceptofbasichumanrights,whichrequirethegovernmenttoensurethateveryonehastheopportunitytoexercisesuchrightsbyguaranteeingthecontinuingavailabilityofessentialservices.

Secondly,forhistoricalreasons,virtuallyallgovernmentsregardthepostalserviceasastrategiceconomicactivityaffectedwithapublicinterest,compellingthemtomonitorandoverseepostalmarketoperations.Inordertoproperlydischargeitsobligations,itisvitalthatgovernmentclearlyunderstandtheroleandimpactofthepostalsectorandpostalservicesonsocietyandonthenationalwayoflifeasanimportantcoreinfrastructurefactorcontributingtonationwideeconomicgrowthanddevelopment.

Thus,itisuptogovernmenttosetdevelopmentpolicyforthepostalsector,toestablishthelegalframeworksettinggroundrulesforthepostalmarketandtodeterminehowpostalservicesaretobeoperatedandhowpostalregulatoryfunctionsaretobedischarged.ModuleVoftheguidespecificallyaddressestheissueofregulation.

Countriesabletosystematicallymeetsuchobligationshavedevelopedaninfrastructurecomponentfosteringeconomicandsocialdevelopment,withefficient,high-quality,high-techservicesinwhichthecountrymakesregularinvestmentstosustainthelevelofserviceandensurecontinuingservicetoallsegmentsofthepopulation,withoutthisbeingadrainonthepublictreasury.

I 2.3

National development

Ingeneral,postalservicesstillplayamajorroleintransactionsbetweenbusinessesandindividuals,bothintermsofpostalcommunicationsperse,throughthecarriageofmail,andwithrespecttothemovementofmerchandisethroughpostalparcelserviceandthetransferringoffundsviapostalmoneyorder,remittanceandpaymentservices.Formanycommunities,postalservicesareanengineofsocialintegrationandameansofprovidingagovernmentpresencetopromoteaccesstoinformationandtrade.

Infact,accordingtooneWorldBankreport,formostcountries,postalserviceisthemostcommonbasiccommunicationsmedium.Inpartsofcertaincountries,theofficialpostalserviceistheonlyserviceconnectionfortheentirelocalpopulation,aswellasthemostimportantcommunicationsmediumforbusinessandtrade.

Postalservicesinindustrializedcountrieshavebeenanengineofeconomicandsocialdevelopment,playinganimportantroleintheexpansionoftransportationandbankingservices,retailsales,thepublishingindustry,directmarketingactivities,aswellasmanyothertypesofbusinessactivities.

I 2.2

Government obligations

73

Postalservicesinthesecountriesareafundamentalpartofthecommercialinvoicingsystemfortransactionsbetweendifferentbusinessesandbetweenbusinessesandindividuals,movingenormoussumsofmoneyinpaymentofoutstandinginvoicesandkeepingtheeconomygoing.Anefficientpostalservicethushelpsimprovetheefficiencyoftheeconomicsystem,keepingcostsdownandoperatingasanengineofcompetitivenessforsuchcountries.

Inmanydevelopingcountries,thepostalserviceiscaughtupinaviciouscircleinwhichpoorqualitycurtailstheuseofthePost,reducingrevenues,creatingdeficitsandengenderingunderinvestment.

Insuchcases,aspecialeffortbygovernmenttoensurethefulfilmentofitsuniversalpostalserviceobligationsandensuingpostalreformscanturnthisviciouscirclearoundintoaso-called"virtuous"circleofhigh-qualityservice,greateruseofthePost,higherrevenuesandstepped-upinvestment,inwhichpostalservicesendupbuttressingnationaldevelopmentefforts.Postalservicehasenormousgrowthpotential.MoredevelopedeconomieswithhighGDP(grossdomesticproduct)alsohavehigherpostalrevenues.

Countrieswhosepostalserviceisnotreliableenoughtobeutilizedbymostconsumersandbusinessesarenotonlyfailingtoservethegeneralpublicbutareputtingalargefinancialburdenonallmembersofthepopulationbyforcingthemtoresorttohigher-costalternativestomeettheirsocialcommunicationneeds,suchascourierservices.Theseservicesarenotaccessibletoallsegmentsofthepopulationbecauseoftheirhigherpricesand,inmanycases,areusedonlywhenabsolutelynecessary.

Privateinternationalcourieranddeliveryservicesconfinetheiroperationstokeyurbanareas,charginghigherratesfortheservicesoffered.Theircontributionstothelocaleconomyarelimited,andanyearningsandothereconomicbenefitsareexportedtotheiroverseasheadquarters.

Low-qualitypostalservicemayforceconsumersandbusinessestohiretheirowncouriersortopersonallygotothebanktogetasimplefinancialstatementand,ingeneral,towastemoretimeandmoney.Thus,efficientuniversalpostalservicecapitalizingonthewell-documentedeconomiesofscaleengenderedbythecollection,processinganddeliveryofmailenablesdomesticconsumersandbusinessestomeetcrucialbasiccommunicationsandsmallpackagedeliveryneedsaseffectivelyandeconomicallyaspossible.Accordingly,postalservicealsohelpspromotethedevelopmentofakeysectorofactivity,namelythedomesticbusinesssector.

75

Throughtheprovisionofthedomesticpostalservice,nationwidecommunicationsneedscanbemetbyacountry'sowninfrastructureandresources.Serviceaccessandcoverageandgeneralstandardsofqualityarecontingentuponfactorswhichcanbecontrolledatthecountrylevel.

Thus,theavailabilityofnecessaryservicestosatisfysuchneedshingesonacombinationofsoundnationalpolicydecisionswithrespecttosuchservices;legislationgoverningmarketorganization;andthehuman,physicalandeconomicresourcesenablingserviceoperationatthenationwidelevel.

However,meetingcommunicationsneedsinvolvingothercountriesisanotherthingentirelyandrequirestheoperationoftheinternationalpostalservice.Therearefactorsandsituationsatplayattheinternationallevelwhichcannotbecontrolledbyanyonecountry:theseareoperationsthatrequirecountriestoworktogether.

Here,theUniversalPostalUnionplaysavitalroleinregulatingexchangesofmailandensuringuniversalaccesstopostalservice.

Together,designatedoperatorsofallUPUmembercountriesrepresentafullyglobalizedmailservice,withinterconnectednetworksandmailstreamsusingeachcountry'sdomesticinfrastructure.Thus,theUPUhasformedaworldwidepostalservicenetworkwhich,ineffect,isreallyanetworkofnetworks.

Thisworldwidenetworkofdomesticnetworkscarriesover328billionphysicalmailitemsayear,operatesover690,000retailofficesservingthepublicandhasafull-timeworkforceofover5.2millionemployees.Thisglobaluniversalpostalservicenetworkutilizesacombinationofdifferenthuman,physical,economicandtechnologicalresourcestoensurethesmoothflowofletters,messagesandprintedmatterviatheletter-postservice;goodsviatheparcel-postservice;andfundsthroughpostalfinancialorpaymentservices.

Customerneedsandmarketconditionsaremakingitincreasinglynecessarytostandardizequalityofservice.DifferentbodieswithintheUPUaddressthisissue,seekingtobalanceandreconcileexistingdifferencestomeetmutualcountryneeds.Thus,inlinewithdecisionmakingatthecountrylevel,theUPUhasbeenworkingtoestablishbasicspecificationsandsetstandardsgoverningcoreelementsofservicequalityapplicabletodesignatedoperatorsaroundtheworld,asuniversalpostalserviceproviders.

I 3.2

Rules common to

countries

I 3.2.1

Nature of country

obligations

TheUniversalPostalConventionisaninternationaltreaty.ItformspartoftheActsoftheUnionandregulatestheinternationalpostalservice.

ThebasicobligationsembodiedintheUniversalPostalConventionaresetbytheUnion'smembercountriesattheUniversalPostalCongress,attendedbygovernmentplenipotentiaries.CongressisthesupremebodyoftheUPUandnormallymeetseveryfouryears.

UPUmembercountriesattendingthisworldwidecongressdiscussandagreeonrulesandregulatoryissuespertainingtopostalservice,andtheirplenipotentiariessigntheUniversalPostalConventionandotherspecificagreements.

AllsignatoriesoftheActsofCongressmustbeofficialdelegateswiththeauthoritytolegallybindtheirrespectivegovernments.Accordingly,theymustbeaccreditedbyCongressasholdingthenecessarypowers.

Universal Postal Convention

I 3

I 3.1

Universal Postal Service

Network

76

TheConstitutionistheUPU'sbasicactcontainingitsorganicrules,whiletheUniversalPostalConventionestablishescommonruleswithrespecttopostalservices.TheUPUConstitution,theUPUGeneralRegulations,theUniversalPostalConventionandthePostalPaymentServicesAgreementareinternationaltreaties.

OperationalaspectsaresetoutintheRegulationstotheUniversalPostalConvention,whichareapprovedbythePostalOperationsCouncil,aUPUbodymeetingsemi-annuallyandmadeupof40countrieselectedbytheUniversalPostalCongressonthebasisofgeographicalrepresentationandlevelofdevelopment.

ThecreationoftheUniversalPostalUnionwastheembodimentofthedesireofitsmembercountriestoformasinglepostalterritorytofacilitateexchangesofmailitemsandthefulfilmentoftheirobligationtoprovidethebasicservicesmakinguptheuniversalpostalservice.ThisdecisiononthepartofUPUmembercountriesisthefoundationfortheoperationofuniversalpostalservices.Thetextofarticle1oftheConstitutionreadsasfollows:

Article 1

Scope and objectives of the Union1. The countries adopting this Constitution

shall comprise, under the title of the Universal Postal Union, a single postal territory for the reciprocal exchange of postal items. Freedom of transit shall be guaranteed throughout the entire territory of the Union, subject to the conditions specified in the Acts of the Union.

2. The aim of the Union shall be to secure the organization and improvement of the postal services and to promote in this sphere the development of international collaboration.

Thus,theformationofasinglepostalterritorywitheachcountryagreeingtotheincorporationofitssovereignterritoryandexistingpostalservicenetwork,andundertakingtoprovideinternationalitemssimilartreatmenttothatgiventodomesticitems,laidthefoundationfortheprovisionoftheuniversalpostalservicetoallsegmentsofsociety.

Fromthissamestartingpoint,thebasicrulesestablishedundertheUniversalPostalConventionanditsRegulations,asagreedtoatUPUCongressesandbytheUPUbodies,havebeenregularlyexpandedandrefined.

ThegeneralrulessetbytheprovisionsoftheUniversalPostalConventionanditsRegulationsgoverningtheso-calledsingleUPUpostalterritoryareinternationallegalmechanismsfortheestablishmentofbalanceduniversalpostalservicesinUPUmembercountries.Thesesamemechanismshavealsohelpedmakemailservicethemostextensiveandaccessiblecommunicationsserviceavailabletoindividuals,businessesandcommunities.

Postalservicesarecapitalizingonbreakthroughsintechnology,particularlyinnewinformationandcommunicationstechnology,tocontinuetoexpandandfacilitateaccesstoservice,strengtheninguniversalservicecoveragethroughoutthesinglepostalterritoryservicedbytheworldwidepostalnetwork.

I 3.2.3

Universal postal service

obligations under the UPU

Convention

Newdevelopmentsintheglobalenvironmentandthetransformationofpublicservices,aswellastrendsinglobalization,liberalizationandfreecompetition,haveengenderedtheneedforcertainprovisionsoftheUniversalPostalConventiontobemademoreexplicit,particularlywithrespecttotheuniversalityofthepostalservicesestablishedbytheUPU.

Theinterestdisplayedbyprivateenterpriseingettinginvolvedinpostalservicesandthereductionintheareareservedfordesignatedoperatorsare,insomecases,jeopardizingcontinuingassurancesofservicedeliverytoallsegmentsofthepopulationinallgeographicareas.

Growingcompetition,globalizationandthederegulationofpostalservicehaveengenderednewpracticesonthepostalmarketmakingitincreasinglynecessaryforpostalservicesto"commercialize"theiroperations.

Inmanycountries,thisradicalchangeinthepostalenvironmenttriggeredapositivereactiontotheneedformodernization,enablingdesignatedoperatorstotransformthemselvesintocommercialbusinessenterpriseswiththeobjectiveofgeneratingenoughincomeandhighenoughreturnstoensuretheirfinancialviabilityandfuturedevelopment.Thesereformshavehelpedthemmaintain,andinmanycasesstrengthen,theirmarketposition.

I 3.2.2

Universal service and the UPU

77

Thistrendtowardsthemodernizationandcommercializationofpostalservicesshouldnotaffectthesocialandculturalroleplayedbypostalserviceintheeverydaylivesofpeopleandcommunities.Indeed,theirmodernizationgeneratesadditionalresources,leadingtoincreasedefficiencyandimprovedservicetoallareas,includingthosethatseemlesslucrative.Here,itisimportanttorememberthatthepostalserviceisanetworkofservicepointsandneedstobeevaluatedassuch.Theassessmentofprofitabilitymustbebasedonallservicepoints,notasinglepointonthenetwork.So-calledunprofitablepointsinfactstrengthenthenetwork.

ThisiswhythemembergovernmentsoftheUPUdecidedtoincorporatemorespecificuniversalserviceobligationsintotheamendedversionoftheUniversalPostalConventionadoptedbythe1999BeijingCongresstocomplementpolicieswithrespecttochange,reform,theuseoftechnologyandqualityofserviceemanatingfromUPUCongressessinceasfarbackasthe1970s,soasnottolosesightoftheirbasiccommitmenttomaintainregularnationwidecommunicationsserviceforallsegmentsofthepopulation,ataffordableprices,meetingcertainminimumstandardsofquality.

ThecountriesdecidedtodefinetheobligationsintheUniversalPostalConventionunderthebasicpreceptof"universalpostalservice",settingoutintheensuingarticlethefollowingcommonrulesbindingonallmembercountries.

Article 3

Universal Postal Service1. In order to support the concept of the

single postal territory of the Union, member countries shall ensure that all users/customers enjoy the right to a universal postal service involving the permanent provision of quality basic postal services at all points in their territory, at affordable prices.

2. With this aim in view, member countries shall set forth, within the framework of their national postal legislation or by other customary means, the scope of the postal services offered and the requirement for quality and affordable prices, taking into account both the needs of the population and their national conditions.

3. Member countries shall ensure that the offers of postal services and quality standards will be achieved by the operators responsible for providing the universal postal service.

4. Member countries shall ensure that the universal postal service is provided on a viable basis, thus guaranteeing its sustainability.

Theseprovisionsexplicitlyestablishthecommitmentundertakenbymembergovernmentstoensurethatallsegmentsofthepopulationareabletoexercisetheirrighttouniversalpostalservice,confirmingandunderscoringtheirobligationtoguaranteeabasicright,namelytherightofcommunicationthroughaccesstopostalservice.Theyalsorequireaspecificlevelofuniversalpostalserviceinstipulatingthattherenderingofsuchserviceinvolvestheprovisionofbasicpostalservices.

78

Thearticlespecifiesthebasicservicestobeprovidedinallmembercountries,thatis,theservicesincludedundertheconceptofuniversalpostalserviceandestablishedunderarticle17oftheConvention.Italsosetsspecificconditionsfortheprovisionofuniversalpostalservices,stipulatingthatsuchservicesmusthavecontinuity,beofgoodqualityandbeofferedataffordablepricesforallsegmentsofthepopulation.Theseprovisionssupplementpreviouscommitments,explicitlymakingthegovernmentresponsiblefortheestablishmentoftheuniversalpostalserviceunderdomesticlegislationinlinewiththeprovisionsoftheUniversalPostalConventionandwithlocalneedsandcircumstances.

Thearticlestipulatesthatthenationallegalframeworkofmembercountrieshastoreflectthiscommitment,complyingwiththegeneralrulesembodiedintheUniversalPostalConvention,andspecificallyinarticles3and17withrespecttotheuniversalpostalservice.

Theprovisionsofarticle3furtherrequiremembercountriestoensurethattheoperatordesignatedforthatpurposetrulyprovidestheuniversalpostalservicesundertheconditionsset.

Fromitsinception,theUniversalPostalConventionhasalwaysestablishedthebasicpostalservicestobeprovidedbyUPUmembercountries,thoughtheirdescriptionshavechangedovertheyears,inlinewithprevailingcustomsandpractices.

Thecompletetextofarticle17(Basicservices)oftheUniversalPostalConventionapprovedbytheIstanbulCongressisreproducedbelow.

Article 17

Basic services1. Membercountriesshallensurethattheir

designatedoperatorsaccept,handle,conveyanddeliverletter-postitems.

2. Letter-postitemscontainingonlydocumentsare:

2.1 priorityitemsandnon-priorityitems,upto2kilogrammes;

2.2 letters,postcardsandprintedpapers,upto2kilogrammes;

2.3 itemsfortheblind,upto7kilogrammes;

2.4 specialbagscontainingnewspapers,periodicals,booksandsimilarprinteddocumentationforthesameaddresseeatthesameaddresscalled"Mbags",upto30kilogrammes.

3. Letter-postitemscontaininggoodsare:

3.1 priorityandnon-prioritysmallpackets,upto2kilogrammes.

4. Letter-postitemsshallbeclassifiedonthebasisofboththespeedoftreatmentoftheitemsandthecontentsoftheitemsinaccordancewiththeRegulations.

5. Withintheclassificationsystemsreferredtoin4,letter-postitemsmayalsobeclassifiedonthebasisoftheirformatassmallletters(P),largeletters(G),bulkyletters(E)orsmallpackets(E).ThesizeandweightlimitsarespecifiedintheRegulations.

6. Higherweightlimitsthanthoseindicatedinparagraph2applyoptionallyforcertainletter-postitemcategoriesundertheconditionsspecifiedintheRegulations.

7. Membercountriesshallalsoensurethattheirdesignatedoperatorsaccept,handle,conveyanddeliverparcel-postitemsupto20kilogrammes.

8. Weightlimitshigherthan20kilogrammesapplyoptionallyforcertainparcel-postitemsundertheconditionsspecifiedintheRegulations.

I 3.2.4

Basic services

79

UniversalPostalConventionprovisionswithrespecttobasicserviceshavebeenadapted,expandedandrefinedinlinewithchangesinthepostalenvironmentandmarketneeds.ThecurrenttextofthearticlereproducedaboveisbasedondecisionstakenbyUPUmembercountriesatthe2016IstanbulCongress.

AttheBeijingCongress,theUPUmembercountriesresolvedtomakeafundamentalchangeintheconceptofbasicservicesasdefinedintheUniversalPostalConventionbyincludingpostalparcelserviceforitemsweighingupto20kilogrammesasabasicservice.

Thisadditiontothedefinitionofbasicservices,whichtraditionallywerelimitedtoletter-mailitems,reflectstoday'snewvisionofcurrentandfuturepostalmarketneeds,whichisbeinggraduallyshapedbynewtechnology,globalization,stepped-uptradeandtheneedforvalue-addedservices.Inthenewpostalenvironment,whichhastakenonanevenmoredefiniteshapeinrecentyears,thepostalparcelserviceisplayinganincreasinglyimportantroleinpostalmarketneedsanddemand.

Manydevelopingcountrieswillneedtotakespecialmeasurestobringtheirpostalserviceoperationsinlinewiththeirnewcommitmenttoofferparcelserviceasabasicpostalservicesubjecttothesameservicedeliveryconditionsasletter-mailservice.

In short, the basic services established under article 17 of the Universal Postal Convention are mandatory core services which member countries have agreed to include in their legal definition of nationwide universal postal service.

I 3.3

Action-oriented government

decisionsInadditiontodecisionstakenbymembercountriesatUniversalPostalCongresseswithrespecttotheUniversalPostalConvention,CongressalsoadoptstheWorldPostalStrategytosteertheUnionoverthenextfouryears.TheWorldPostalStrategysetsouttheactivitiestobecarriedoutbymembercountriesthroughtheirgovernments,designatedoperators,theInternationalBureauandotherUPUbodies.

TheIstanbulWorldPostalStrategydefinesthestrategicdirectionsforthe2017–2020period.Itcomprisesthreemaingoals:

• Improvetheinteroperabilityofnetworkinfrastructure;

• Ensuresustainableandmodernproducts;

• Fostermarketandsectorfunctioning.

Startingwiththe1999BeijingCongress,successiveCongresseshavesetobjectivesrelatedtotheuniversalpostalservice.Goal3(Fostermarketandsectorfunctioning)oftheIWPSexplains:

"With a strong physical network and diversified and integrated modern products and services, the postal sector is theoretically ready to function effectively. However, regulatory bottlenecks, lack of market knowledge, and larger environmental, social and economic concerns can hinder the growth of the sector. Goal 3 of the IWPS therefore aims to address these issues through its activities on the universal service obligation, policy and regulation, market and sectoral information, sustainable development, and capacity development."

SpecificactionsincludedintheIWPSareclearlypresented,asfollows:

Goal 3 – Foster market and sector functioningWithastrongphysicalnetworkanddiversifiedandintegratedmodernproductsandservices,thepostalsectoristheoreticallyreadytofunctioneffectively.However,regulatorybottlenecks,lackofmarketknowledge,andlargerenvironmental,socialandeconomicconcernscanhinderthegrowthofthesector.Goal3oftheIWPSthereforeaimstoaddresstheseissuesthroughitsactivitiesontheuniversalserviceobligation,policyandregulation,marketandsectoralinformation,sustainabledevelopment,andcapacitydevelopment.

Programme 1 – Universal service obligation

• Relatedactivities:ActsoftheUnion. • Recommendedroles:

› Operators:FulfiltheUSOandimplementoperationsinlinewiththeActsandnationallaws;

› Governments/regulators:DefinetheappropriateUSOfortoday'srealities;controlandevaluatethefulfilmentoftheexistingUSO;

› UPUbodies:Contributetothedebatebybringingexpertiseandexperience;proposechangestotheActstobringtheminlinewithemergingoperationalrealities.

Programme 2 – Policy, regulation and strategy

• Relatedactivities:Strategy,ActsoftheUnion,governance,reform.

• Recommendedroles: › Operators:Advocateawiderpostalsectorroleinsocietytogovernment;contributetoandimplementstrategies,reforms,policiesandregulations;

› Governments/regulators:Playaleadershiproleindevelopingpolicies,regulationsandstrategiestoreformandtransformthesector;generateinvestorconfidenceandtrust;

› UPUbodies:Develop,raiseawarenessof,implementandmonitorstrategies,andadoptimprovedstructuresanddecision-makingprocessesinlinewithchangingenvironmentalandmarketneeds;speedupchangeinpoliciesandregulationstorespondtochangingenvironmentalandmarketneeds.

Programme 3 – Market and sectoral information

• Relatedactivities:Statistics,economicandmarketstudies,knowledgeandinformationmanagement.

• Recommendedroles: › Operators:Facilitatetheexchangeandprovisionofdatatocontributetoimprovingoperationalefficiencyandmarketresponseanddevelopment;

› Governments/regulators:EncourageandsupporttheexchangeandprovisionofdatawiththeUPU;provideandpublicizeappropriatedatainlinewithcustomerneeds;

› UPUbodies:Consolidateandanalyzedata;presentrelevanttopicstosupportmoreinformeddecisionmakinginlinewithchangingmarketrequirementsandneeds.

Programme 4 – Sustainable development

• Relatedactivities:Sustainabledevelopment(social,economic,environmental),financialinclusion,disasterandriskreduction.

• Recommendedroles: › Operators:Contributetoachievingsustainabledevelopment;

› Governments/regulators:Investinandsupportinitiativestopromotesustainabledevelopmentandinclusion;recognizetheroleofthepostalsectorincontributingtowardstheUN2030SustainableDevelopmentAgenda;

› UPUbodies:Engageinmonitoring,awareness-raisingandresourcemobilizationactivitiesintheareaofsustainabledevelopment.

Programme 5 – Capacity development

• Relatedactivities:Training,seminarsandworkshops,capacitybuilding.

• Recommendedroles: › Operators:Participateinandimplementbestpractices;

› Governments/regulators:Investinandsupportinitiativestopromotecapacitydevelopment;

› UPUbodies:Develop,raiseawarenessofandimplementcapacitydevelopmentinitiativesinlinewithstakeholderneeds.

80

SECTION IIDetermining the Universal Postal Service

83

ThedefinitionoftheuniversalpostalservicepresentedinsectionIoutlinesthemaincharacteristicsoftheservice.

However,inandofitself,thisdefinitionoftheuniversalpostalservicedoesnotallowforafullandcompletegraspoftherealmeaningofthisconcept,giventhebroadscopeofthisissueandthedifferentfactorsimplicitlyinvolved.Theeffectiveimplementationofgovernment-guaranteed,mandatory,individualandcommunityservicesrequirestheexplicitdemarcationandspecificationofsuchservices.

Thus,thescopeoftheuniversalpostalserviceneedstobeexpressedinmoreconcretetermsclarifyingthesignificanceoftheobligation,sothatthepublicatlargeandeachandeverymemberofthepopulationunderstandsexactlywhatthegovernmentisreallyguaranteeingasauniversalright.

Therearethreemainelementswhichneedtobeexplicitlymappedoutforaclearunderstandingoftherightofallmembersofanation'spopulationtospecificpostalservices:

a. Included services Thespecifictypeorclassofserviceincludedinthegovernment'suniversalpostalserviceobligation.

b. Service delivery conditions Thespecificforminwhichincludedservicesaretobeofferedtoallmembersofthepopulation.

c. Servicefinancingandoperation Theresponsibilityofgovernmenttoensureservicedeliveryundereconomicconditionsallowingforthesustainablefinancingofcorrespondingoperations.

Ataminimum,thecountry'sinternationalobligationsundertheUniversalPostalConventionanditsRegulationsserveasthestartingpointforthemappingoutofthesethreeelements.Thecountrywillthenneedtomakedecisionsonthetypesofservicesandconditionstobeaddedtotheseobligations.

Thestartingpointforcountrydecisionswithrespecttotheclassesofservicetobeincludedundertheconceptofuniversalpostalserviceislettermailandparcelsupto20kilogrammesinweight.Thebasicconsiderationsinestablishingservicedeliveryconditionsareaccessibility,speed,reliability,securityandaccountabilityforclaimsensuringanacceptablestandardofquality.Decisionswithrespecttoservicefinancingmustensurethattheserviceoperatorhassufficientlong-termsustainableincometocoverservicedeliverycostsandfinanceregularinvestmentsinitsmodernizationanddevelopment.

I 1.3

The decision-making process

Itisthetaskofpostalofficialstopushthroughnecessarycountrydecisionsinadecision-makingprocesswhichbeginswiththegovernment(theexecutive),initiatedbythepostaloperatorandsupervisoryministryforthepostalsector,shiftstothelegislature,whichpassesthepostalactestablishingtheuniversalpostalserviceandanappropriatelegalframework,andthenshiftsbacktothegovernmentfortheeffectiveimplementationofsuchdecisionsinpostalserviceoperationsonthepostalmarketthroughthepostaloperatorandregulatoryauthority.

Thisdecision-makingprocessforthedeterminingandestablishmentofnationwideuniversalpostalserviceconsistsofaseriesofsequentialstepsandactivitiesfortheattainmentoftargetedoutcomes.Itrequiresinputsfrompostalsectorentities,aswellasfromotherareasofgovernmentsuchasnationalplanningandfinance.Italsorequirestimelyinputsfromotherinterestedstakeholdersforconsensus-buildingpurposes,suchascustomers,unionsandrepresentativesofprivateserviceoperators.

Theuniversalpostalservicedemarcationprocessisdesignedtoassembleallrequiredinformationandresearchdataforconductingnecessarystudiesasthebasisforsounddecisionmaking.Ataminimum,thesuccessfulmappingoutoftheuniversalpostalserviceisasequentialfour-stepprocess,asoutlinedbelow.

Implementation of the Universal Postal Service

II 1

II 1.1

Need to determine

the Universal Postal Service

II 1.2What to

determine

84

Thisisthepreparationstage,devotedtocollectingthefollowingtypesoftimely,accurateinformation:

• countrydata; • legaltextsapplicabletothepostalsector; • postalmarketstudies,quantitativeandqualitativemarketdata,projections;

• dataoneconomicandoperatingconditionsforservicedeliverybythedesignatedoperator;

• nationalgovernmentpolicyforthepostalsector;

• developmentplansforthepostalsectoranddesignatedoperator.

Inthisstage,thesupervisoryministryforthepostalsectormakesdecisionsonthefollowingmattersbasedonstudiesconductedbypostalentities(thepostaloperatorand/orregulator):

• theproposedblueprintfornationwideuniversalpostalservice:typesofservices,servicedeliveryconditions,servicefinancingandoperation;

• thedraftingofaproposedpostalactestablishinguniversalpostalservicesandanappropriatelegalframeworkfortheirimplementation;

• theframingofadevelopmentplanfortheuniversalpostalserviceandthedesignatedoperator.

II 1.3.3

Decision making by

national congress

Inthisstage,thegovernmentintroducesanddefendstheproposedpostalactestablishinguniversalpostalservicesandanappropriatelegalframeworkforthedueandproperfulfilmentofitsuniversalpostalserviceobligationsincongress.Thisstepincludes:

• discussionsofthebillandpassageoftheactestablishingandmappingoutnationwideuniversalpostalservicesandacorrespondinglegalframework.

II 1.3.4

Implementation of universal

postal services and the

established legal framework

Thisstagebeginstheprocessofcarryingoutthemandatesestablishedunderthepostalactandimplementingnecessaryinvestmentplansforthemodernizationofpostalservices,including:

• theissuanceofimplementingregulationsunderthepostalact,universalpostalserviceregulations,andmarketandserviceregulations;

• theimplementationofdevelopmentplansforthedesignatedoperatorandofuniversalpostalservicedevelopmentplans.

Thepaceofdecisionmakingbythenationalgovernmentandnationalcongresswilldependontheavailabilityofrequiredinformationandthepromptnesswithwhichnecessarystudiesareconducted.

II 1.3.1

Assessment of the status

of nationwide postal services

II 1.3.2

Decision making by the national

government

85

Understandably,theframingofnationalstrategieswithrespecttopublicservicesrequiresafamiliaritywiththeuniquecharacteristicsofeachcountry.Thedifferentgeographicalandculturalfactorsatplayandthedifferentpopulationgroups,formsofpoliticalandsocialorganization,andeconomicenvironmentineachcountryrequireacase-by-casestudy.

Allofthesefactorshavetobetakenintoaccountinstudyingthespecificcircumstancessurroundingtheoperationofpostalservicesinagivencountryforthepublicatlargeandforthedifferentcommunitiesinsuchcountry.

Ingeneral,forgovernmentorganizationalandadministrativepurposes,anation'sterritoryisdividedintodifferent"hierarchized"geographicareascommonlyreferredtoaspoliticalsubdivisionsoradministrativeareasordistricts.Dependingonthetypeofpoliticalsubdivisionsandthecentralorfederalgovernmentstructure,eachlevelofgovernmentisinvolvedinsomewayorotherindeliveringservicestotheareaunderitsjurisdiction.

Inadditiontogeographicalinformationanddata,itisalsonecessarytocollectpopulationdata.Itisextremelyimportanttohavenationalcensusdatashowingthesizeofthepopulationofcities,towns,villagesandhamletsaroundthecountryandthepopulationbreakdownbyruralandurbanarea,gender,age,education,incomebracket,etc.

Basicsocio-economicdevelopmentdataisimportantasasourceofinformationonhealth,education,housing,nutrition,birthandmortalityrates,andpovertyconditions,amongotherfactors.Insomecases,thesemeasurementsofsocialdevelopmentwillvaryfromonepartofthecountrytoanother,affectingtheemphasisofgovernmentpoliciesdesignedtoreducesocialdisparitiesandinequities.

Itisalsoimportanttoconsidereconomicinfrastructurefactors,includingroad,air,oceanandrailwaytransportationandinlandnavigationsystems.Generalinformationanddataonotherresidentialpublicutilityservices,suchaswater,gas,electricity,sewerage,refusecollection,andfixedandcellulartelephoneservice,isequallyessential.

Itisimportanttoknowhowmanyhouseholdsinthecountryhaveelectricityandpipedwaterandthenumberoftelephonelinesnationwide.

Thestatusofthesepublicutilityservicescanalsobeexpressedintheformofdevelopmentindicators,suchasthepercentageofthepopulationwithelectricityservice,thepercentageofthepopulationwithasafewatersupply,andthenumberoffixedtelephonelinesper100inhabitants.

Thelevelofdevelopmentofbusinessandindustryandthemaintypesofbusinessandindustrialactivitiesengagedinbythenation'spopulationareespeciallyimportantconsiderationsforpostalservicepurposes.FiguresforGDP,percapitaincomeandothernationaleconomicdevelopmentindicatorsareallimportantstudydata.

TableNo.1containsasamplelistofimportantnationalgeopoliticalandsocio-economicdata.

Status of nationwide postal services

II 2

II 2.1

Nationwide geo-political

and socio- economic conditions

86

Table No. 1 – General country data

Geo-political data Infrastructure Socio-economic data

Surface area Km2 Drinking water No.ofcustomers Literacy (%)

Geopolitical organization

Capital

Provinces,departments

Municipalities

Villages,hamlets

Electricity No.ofcustomers Life expectancy (Years)

Population (Mostrecent censusdata)

No.ofinhabitants Telephone

No.oflandlines

No.ofcellularlines

Poverty rate (%)

Breakdown by:

Gender

Age

Incomebracket

Occupation

Connectivity (Internetservice) Per capita income (USDperyear)

Population density Inhab.perkm2 Airports Gross domestic

product (GDPinUSD)

PopulationUrban(%)

Rural(%)Ports GDP growth rate (%)last5years

Working population (#)and/or(%) Railroads Kms GDP growth rate

Latin America (%)

Major cities (5to8)andpopulation Refineries (Oil)

Major types of production and exports

Nationwide number of households Road network Kms Exports – year (USD)

Average household size Imports – year (USD)

Foreign direct investment (USD)

Inflationrate (%)last5years

Devaluation rate (%)last5years

Unemployment rate (%)last5years

Legal minimum wage monthly(USD)

Exchange rate localcurrencyper1USD

87

Normally,thefoundationforthedevelopmentofbusinessandindustryisthetextofdomesticlegislationestablishingthelegalframeworkforsuchactivities.

Regardlessofwhetherornotexistinglegislationhasbeenupdatedinresponsetothecountry'ssocialandeconomicneeds,itisimportanttobesufficientlyfamiliarwithlegalinstrumentsgoverningtheoperationofpostalservices.Servicedeliveryandmarketorganizationarebothcontingentonthelegalframeworkestablishedforthepostalservice.Itisalsoimportanttobeacquaintedwithadministrativeinstruments,regulationsanddecrees,etc.,applicabletothepostalsector,aswellaswithotherrelatedlegalinstrumentsaffectingpostalservice,suchasconstitutionalprovisionsandregulationsrelatedtoconsumerprotection,competition,customs,andtransportationservices.

Themainprovisionsofthepostallawwhichneedtobeexaminedatgreaterlengthforstudyanddiscussionpurposesarethoseestablishingthelegalnatureofpostalservices,thetypesofactivitiesandservicesregardedaspostalactivitiesandservicesunderthelaw,theclassificationofpostalservices,theobligationsofgovernmentandtheservicesassignedtothedesignatedoperator,aswellastheprovisionswithrespecttointernationalobligations,andthoseestablishingserviceoperatingsystemsandregulatorysystemsandtheorganizationalstructureofthedesignatedoperator.

• Legal nature of postal services. Ingeneral,legislationgoverningpublicserviceswillspecificallyalludetothepublicnatureofsuchservicestojustifytheirsubjectionbythegovernmenttoconstitutionalprovisions.Thenatureofpublicservicesmaybeexpressedinsuchlegislationthroughavarietyofdifferentterms,suchasessentialservicesorservicesvestedwithapublicinterest.Thus,thereisgenerallyareferencetothepublicnatureofpostalservices,thoughtheactualtermusedineachcountrytodesignatesuchservicesmayvary.Somecountries,forexample,usetheterm"mailservice",whileothersuse"postalservice".

• Postal activities and services.Therenderingofpostalservicesinvolvesavarietyofdifferentoperations,suchasreceiving,sorting,transportationanddelivery.Thetextoflegislationorcorrespondingimplementingregulationsoftenincludesprovisionstothiseffect,specifyingthetypesofoperationsregardedaspostal-relatedandthetypesofserviceslegallydefinedasconstitutingpostalactivitiesand,thus,subjecttospecificoperatingconditions.

• Classificationofpostalservices.Legislationgoverningpostalormailservicesnormallydistinguishesbetweendifferentclassesofserviceandmaytacitlyorexplicitlyestablishaserviceclassificationsystemaccordingtothecontentofmailitems,theirdeliverytimeorgeographicdestinationor,insomecases,thecustomersegment.Postalservicesaremostoftenclassifiedaccordingtothecontentofmailitemsandtheirdeliverytimeorpriority.Ingeneral,postalservicesareusedforavarietyofreasonsinvolvingconsiderationssuchascontent,speed,weight,formofdeliveryanddestinationandshouldbeclassifiedaccordingly.

• Government obligations. Thelawmaydirectlyandexpresslyorindirectlyandimplicitlyestablishthegovernment'sobligationswithrespecttotheprovisionofpostalservices.Inthecaseofatotalorpartialmonopoly,thelawgenerallymakestheofficialpostaloperatorresponsibleforfulfillingthegovernment'sobligations,specifyingthepostalservicestobeprovidedbysuchoperator.Suchservicesincludemandatorydomesticandinternationalservices.Moreover,thedesignatedoperator–thatis,theoperatorresponsibleforfulfillingtheuniversalserviceandothercommitmentsunder-takenbythegovernment–isnamed.

Nationallegislationneedstostipulatethegovernmentbodyresponsibleforsettingpublicpostalpolicy.Generally,thisfallstothesupervisoryministryforthepostalsector.

• Compliance with international obligations. ThepostallegislationofallUPUmembercountriesincludesprovisionsrequiringthefulfilmentoftheirobligationsunderinternationalpostaltreatiesanddelegatingthetaskofmeetingsuchobligationstothedesignatedoperator.UnitedNationsmembercountriesincurpostalserviceobligationsasmembersoftheUPUand,asthecasemaybe,ofaregionalpostalorganization(restrictedunion).

II 2.2

Status of postal services

II 2.2.1

Legal instruments

88

• Service operating system. Inthepast,postallegislationgenerallyestablishedafullmonopolyforletterpost,withasinglenationwidepublicorstate-ownedoperator.Overthelastfewdecades,achangingmarkethasledtoashiftinservicesandinservicedeliverypractices,tomeetnewneeds.Thus,postallegislationhasgraduallybeenamendedtoopenupthepostalsectortoprivateenterprise,eitherthroughfullliberalizationorareducedreservedareaforthedesignatedoperator.

Underthistypeofsystem,thedesignatedoperatorisassignedspecificservicesand,insomecases,grantedcompensationandexclusiverightstodobusinessonspecificmarketsegments.Privateoperatorsareallowedtodobusinessunderspeciallicencesissuedbythegovernment,theregulatoryagencyforthepostalsectorand,onoccasion,thedesignatedoperatoritself,subjecttospecificconditionsandrequirements.

• Regulatory system. Currentmarketconditionsandcompetitionhavemadeitnecessarytoseparategovernmentregulatoryfunctionsfromoperationalmatters.Suchregulatoryfunctionsareassignedtoagovernmententity,whichmaycomeunderthesupervisoryministryforthepostalsector.Thisregulatorybodymayoverseesolelythepostalsector,oritmightbeamulti-sectorregulator.

Regulatoryfunctionsnormallyincludethepowertoissueimplementingregulationsunderexistinglegislationandtofurthersectorpolicyandplans.Itisalsouptotheregulatorybodytoensurethecontinuedfulfilmentofgovernmentobligationsandtocontroltheservicesfurnishedbythedesignatedoperator,aswellastheprices–fortheuniversalpostalservices,orforallservices.

Onthemarket,theregulatorisresponsibleforoverseeingandmonitoringcompliancewithregulationsgoverningservicedeliveryconditions,protectingconsumerrightsandensuringfaircompetition.Studiesofcurrentlegislationneedtoberoundedoutbyinformationonhowtheprovisionsofsuchlegislationarebeingimplementedandenforcedonthepostalmarket.

Oneoftherootcausesofthedifficulteconomicsituationfacedbydesignatedoperatorsisthenon-compliancewithlawsandthelackofeffectiveenforcementmechanisms.

Lastbutnotleast,thestudyofexistinglegislationmustincludealookathowwelltheexistinglegalframeworkallowspostalservicestohelpfurthernationaldevelopmentprocesses.

Thepostalsectorhelpsspureconomicgrowthandnationaldevelopmentwhenservicesaregearedtonationwideneedsandpostalactivitiesareonparwithothernationalinfrastructuresectors,suchasthetelecommunicationsandpowersectors,intermsoftheirgrowth,investmentandmodernization.

II 2.2.2

Postal marketForsometimenow,theimportanceofmarketknowledgehasbeenstressedinthepostalbusiness.However,quantitativeandqualitativeinformationanddataonsupplyanddemandforpostalservicesstillneedtobestudiedmoremethodically.

Insomecases,informationonthemagnitudeofeffectivedemandforpostalservicesislim¬itedatbest.Wemayknowwhatpercentageofthemarketisservicedbythedesignatedoperator,butinformationondemandforbasicpostalservicesandonthevolumeofsuchitemsisextremelylimitedatbest.

Notallcountrieshaveavailabledataontheirpostalmarketandevenfewerusesuchdatainthenormalcourseofbusinessbythepostalsectororthedesignatedoperator.Thoseinchargeofcollectingdataonmailvolumeandcountrywidesectordevelopmentindicators–suchasthenumberofmailitemsperpersonperyear,orthenumberofofficesperperson–needtorealizethatsuchdataexcludeslargesegmentsofthemarketservicedbyoperatorsotherthanthedesignatedoperator.

Tobetterunderstandthepostalmarket,thebestplacetobeginisbyexaminingtheroleofpostalservicesinthenationaleconomy.Thepostalsectorsatisfieseconomiccommunication,paymentandservicecomplementationneedsandprovidesessentialbackwardandforwardlinkagesattheverycoreofbusiness,government,consumerandindividualactivities.

FigureNo.2graphicallyillustratesthepositionofthepostalserviceinmodernmarketeconomiesanditspivotalroleinlinkingbuyersandsellers,expeditingbusinesstransactionsandfillingpurchaseorders.Atthehighestlevel,mailservicebringstogetherbusinessesandconsumersfortradeandcommunicationpurposes.

Figure No. 2 – Postal services and the economy

Communication

Businesses HouseholdsGoods

Money

89

Nowadays,postalactivitiesareaproductoftheinterplayofamixofdifferentmarket-relatedfactorswithsupplyanddemandforpostalservices,asillustratedinfigureNo.3below.Ononesidearedemand-generatingcustomers,intheformofbusinessesandindividuals,withtheircorrespondingneedsandexpectations.Ontheothersidearesupply-generating service providers intheformofpostaloperators,withtheirservicefacilitiesandnetworks.

Demand-sideneedsandsupply-sideactivitiesbothgeneratebusinessinvolvingregular,expressorelectroniclocal,domesticandinternationalproducts or servicesforletters,printedmatter,packages,moneyorders,etc.

Thelastfactorinthemixhastodowiththelegalconditionsatthecountrylevelandwithinthepostalsectorgoverningtheinterplayofallmarketactivityflows.Thesemarketdynamicsproducespecificlevelsofserviceatdifferentlevelsofdevelopment,whichcanbequantifiedthroughspecificmeasurements.TheflowsdepictedinfigureNo.3producebusiness-to-business(B2B),business-to-individual(B2I),individual-to-business(I2B)andindividual-to-individual(I2I)serviceinterfacesrepresentingspecificsharesoftotalmailvolume.Mostmailisgeneratedbybusinesses(over90%oftotalmailvolume)andaddressedtoindividuals(over70%oftotalmailvolume).

Quantitativedataontheannualvolumeandvalueofbusiness,expressedintermsofthenumberofitemsandtheirlocalcurrencyvalue,isespeciallyimportantforanassessmentofthedomesticpostalmarket.FiguresonthevalueofbusinessshouldalsobeexpressedinU.S.dollarsforpurposesofmakingcross-countrycomparisons.

Postalmarketdatamustbesufficientlydisaggregatedtoshowpatternsandtrendsindifferenttypes,classesorcategoriesofservice.Ingeneral,postalmarketservicesarebrokendownaccordingtotheirspecificfeaturesandoperatingconditions,asoutlinedinthefollowingtextbox.

Postal line of business:

Regularortraditionalmailservicesandspecializedexpressmailorcourierservices

Destination of mail items:

LocalDomesticInternational

Type of customer (major market segments):

Businesses,includinggovernmentdepartments

Individuals

Thebusinesssegmentofthepostalmarketcanbebrokendownintothefollowingmajoreconomicsectors:

Public utilities

Thissectorincludeswaterandsewerage,power,gas,refusecollectionandtelephoneservice

Financial sector

Thissectorincludesbanks(chequeandsavingsaccountsandcreditservices),debitcards,commercialfinancecompanies(vehicles,appliances,etc.),pensionfundsandinsurancecompanies

Publishing sector

Publishingindustry.Newspapers,magazines,books,etc.

Business and industry

Businessesingeneral

GovernmentDifferentcentralandprovincialgovernmentofficesandagencies

Intheabsenceofmarketstudydata,thenextbestthingistomakearoughestimateofthesizeofthemarketforregularmailservice,whichshouldhaveanacceptablelevelofaccuracyofcloseto80%.

Suchanestimateisbasedonnationwidegeo-political,socio-economicandinfrastructuredataandusesgeneralpostalservicebenchmarksandavailabledataonthedesignatedoperatoranditsmarketshare.

Figure No. 3 – Interactions between different market forces

Services:LocalNationlInternat.

For

LettersPrinted matter

ParcelsMoney orders

Via

RegularRegistered

ExpressElectronic

Flow of demand from

businesses and

individuals

Level of service Level of prices Value Added

Flow of supply from

service operators

(networks)

B to B B to I

I to B I to I

Measurement indicators

Sector policy and regulation Legal and regulatory framework

90

• General benchmarks. Thegeneralbeliefisthatcloseto90%ofmailtrafficisgeneratedbybusinesses(businessmail)andapproximately10%byindividuals.

• Estimatesofkeymailflows.Theeconomicsectorsgeneratingthelargestvolumesofmailonthepostalmarketsofmanydevelopingcountriesaretheresidentialpublicutilitiessector(water,power,telephonecompanies,etc.)andthefinancialsector(banks,creditcards,pensionfunds,etc.).

Inthecaseofpublicutilities,dataonthenumberofpowerandwaterconnectionsorcustomersandthenumberoffixedandcellulartelephonelinesproducesreasonablyaccuratefiguresonmonthlyandannualinvoicingvolume.Thesupervisoryauthoritiesforthefinancialsectorcanprovidedataonthenumberofactivechequeaccountsinthebankingsystem,thenumberofcreditcardsissued,thenumberofpensionfundaccounts,etc.,forcalculatingmailvolumebasedonmailingschedulesforstatementsandotherinformation.

• Estimatesofothermailflows.Figuresforothertypesofbusinessmailtrafficfrombusiness,industryandgovernmentarebasedonroughestimatesofcorrespondingmailvolume,withtheassumptionbeingthatthiscanrepresentanywherefrom25%to35%ofkeymailflows.

Lastly,calculationsofdomesticandinternationalmailtrafficgeneratedbyindividualscanbebasedontheestimatedorstatisticalvolumeofbusinessbythedesignatedoperatorintheseareas.

Estimatesofthevalueofbusinessonthepostalmarketrequirepricedataanddataontheshareofboththedesignatedoperatorandofprivateserviceoperatorsinthetotalmarketvolume.

Suchestimatesshouldalsotakeintoaccountdataonthevolumeandhighestpriceofoutboundinternationalmail,mostofwhichisgenerallyprocessedbythedesignatedoperator,andwhosevolumeandvaluecanbecalculatedwithreasonableaccuracybasedontheannualnumberofkilogrammesofmailshippedtodestinationsoutsidethecountry.

Thereislessinformationavailableforestimatingthevolumeandvalueofbusinessforexpressmailorcourierservicesandnogeneralbenchmarkswhichcanbeusedasguidanceinestimatingthesefigures.Thedesignatedoperator'ssmallshareofthisbusinesssegmentalsolimitstheavailabilityofcorrespondingdata.

Theimportanceofthisbusinesssegmentofthepostalmarketcannotbeoverstated.Infact,withthehighpriceofsuchservices,despitetherelativelysmallvolumeofitemsinvolved,theystillrepresentthehighest-valuebusinesssegmentofthepostalmarket.

Whilethehighpriceofbothinternationalanddomesticexpressmailandcourierservicesiscommonknowledge,precisefiguresontheirshareofmarketvaluearenotalwaysavailable.

TheroughcountryfigurespresentedintableNo.4illustratetheimportanceofcourierorexpressmailservicesintermsoftheirvalue.

Table No. 4

Yearly volume millions of items

Yearly value millions of USD

Regular mail 400 70

Express mail – courier service

40 130

Domestic 33 30

International 7 100

TOTAL 440 200

Notehowregularortraditionalmailservice,with400millionitemsayear,represents90%ofmailvolumebutonly35%ofmarketvalue.Incontrast,expressmailorcourierservices,movingonly40millionitemsayear,accountfor10%ofmailvolumebut65%ofmarketvalue.Internationalexpressmailservice,moving7millionitemsayear,representsamere1.6%ofmailvolumebutgenerates100millionUSDinrevenues,accountingfor50%ofthevalueofbusiness.

Annex1containsguidanceforestimatinganddisaggregatingpostalmarketdata.Thedatapresentedinthetablesisinventedandnotrepresentativeofanyparticularcountry.

Establishingthesupplyofpostalservicesrequiresinformationfromserviceoperatorsbrokendownbybusinessarea(regularmailversusexpressmail/courierservice).Withineachofthesebusinessareas,thecoverageareaofpostalenterprisescanbebrokendownintolocal,domesticandinternational.Serviceproviderscanalsobebrokendownintosmall,mediumandlarge-scaleoperatorsaccordingtotheirvolumeofbusinessandrevenues.

Ingeneral,thelackofregulationsandcontrolproceduresforthepostalindustry,combinedwiththesector'slackoftransparency,makesitdifficulttoobtaininformationonprivateserviceoperators,evenwithmethodicalmarketstudies.

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Inconclusion,theformulationofsound,sustainableproposalswithrespecttothelegalframeworkforpostalservice,universalpostalserviceandpostalreformrequiresmethodicalstudiesandreliablecalculationsregardingthepostalmarket,itsmake-up,andmajorsupplyanddemandfactors.Itisabigmistakenottoconsiderthescaleandcharacteristicsofthepostalmarket.

Knowinghowpostalserviceconsumers(customers,users,recipients)obtainandreceiveservicesfromthevariouspostaloperators,includingthedesignatedoperator,iscrucialinassessingthestatusofpostalservices.Thisrequiresabasicknowledgeofandinformationonactualoperatingconditionsinthepostalsector,primarilywithrespecttopostalproductsofferedaspartofthebasicservicesavailabletobothindividualandbusinessclients.

Overthelast20or25years,inmanypartsoftheworld,bothformalandinformalprivateoperatorshaveappearedonthepostalmarket,furnishingalltypesofmailservices,withandwithoutproperauthorization,whichhashadaneffectonthesituationofthepostalservice.Themarketshareoftheseprivateoperatorshasbeensteadilygrowing,invariablyattheexpenseandtothedetrimentofthedesignatedoperator,whichhas,inturn,lostmarketshare,oftenasaresultofpracticesshirkingcompetitionrules.

Insuchcases,regardlessoftheconstraintsithasfaced,thedesignatedoperatorhascontinuedtograpplewithitsgovernmentobligationsandtoofferloss-makingservicesunderconditionswheredecliningrevenuesandcutbacksininvestmentandworkingcapitalhaveweakeneditscompetitivestrength,reduceditsmarketshare,tighteneditsgeographicanddemographicservicecoverageanderodedservicequality.

Moreover,largemultinationalfirmshavepenetratedlocalmarkets.Thesecompaniesparticipateinthemostlucrativesegment–theexpressandcouriersegment–focusingoninternationaloperations.Domesticcourieroperationsarefurnishedbylargenumbersofhighlyprofitablelocalfirmswithlimitedservicecoverageareas.

Thoughsuchservicesmeetdifferentneedsthanbasicpostalservices,movingitemsrequiringunusuallyquickdeliveryservice,withfeaturesmakingthemparticularlylucrativeoperationsinthelightofthehighpriceschargedfortheseservicesandtheirlimitedservicenetworksconfinedtodenselypopulatedurbanareaswithhighconcentrationsofbusinessactivity,theyhavestillhadamajorimpactontheincome,marketshareandimageofthedesignatedoperator.

Ingeneral,postalservicecustomershaveseencourierfirmsasprivateserviceenterprisesofferingrapid,modern,high-price,high-qualitydeliveryservice,makingnodistinctionbetweeninternationalorlocalfirmsorbetweenlargeorsmallenterprises.Incontrast,thedesignatedoperatorisassociatedwithinefficiency,governmentredtapeandslow,unreliableservice,andisregardedasoutoftouchwithmoderntimes.However–andtypicallyindevelopingcountries–privateoperatorsfurnishingregulardomesticmailservicehavehadthegreatestimpactonthedesignatedoperator.Thisgroupincludesasurprisinglylargeproliferationofformalandinformalbusinesses.

Therearealsolargenumbersofcasualortemporaryserviceoperatorscontinuouslyenteringandexitingthepostalmarket,inlinewithavailablebusinessopportunities.

Theproblemsfacedbythedesignatedoperatoraremountingandbecomingincreasinglyseriousinthefaceofprivateserviceoperatorsconfiningtheirbusinessactivitiestolargeurbanareaswhere,withalimitedcustomerbase,largemailersandnoorganizationalrequirements,retailoffices,servicenetworksortechnologyneeds,theyareabletodobusinesswithremarkablylowoperatingcostsimpossibletomatchbyadesignatedoperator,evenwhenfunctioningatoptimalproductivityandefficiency.Thisoftenresultsinpredatorypricingandunfaircompetition.

Thiskindofenvironmenthasalsobeenconducivetotheestablishmentofin-housemailservicesforavarietyofdifferentreasons.Anumberoffirms,largecompaniesinparticular,generatinglargevolumesofmailhavesetuptheirowninternalmailunits.Oflate,thispracticehasdevelopedintotheuseofoutsidecontractorstoprovidemaildeliveryserviceortheestablishmentofsubsidiariesforthedeliveryofbothinter-companymailandthatofoutsidecustomers.

II 2.2.3

Service delivery

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Theresultsofthisexplosioninthenumberofserviceoperatorswithoutanysortofregulatorymechanismarequitedifferentfromthetypesofimprovementsexpectedunderasystemoffreecompetition.Incountryaftercountry,ithasbecomeclearthatthistypeofcompetitionhasnotimprovedoperatingcapacity,infrastructurefacilitiesorqualityofservice,nottomentiontheleveloftechnologicaldevelopment.Anywayyoulookatit,thepostalsectorisclearlyunderdeveloped,withavisiblelackofeitherpublicorprivateinvestmentinthepostalindustry.

• Designated operator. Theseinsightsintotheservicesrenderedbyprivatepostaloperatorsisagoodstartingpointforaddressingtheoperationsandthefinancialandmarketsituationofthedesignatedoperator.

• Market share of the designated operator. Themarketpositionofthedesignatedoperatorhingesmainlyontheshareofdemanditservicesintermsofmailvolumeanditsshareofinvoicingvalueforregularandexpressmailserviceforletters,printedmatterandparcels.Availabledatafromthedesignatedoperator,brokendownbymarketsegmentandservices,shouldprovidefiguresonitsannualbusinessvolume(innumbersofitems)andvalueanditsmarketsharefor:

Regular mail service

Letters,printedmatter,parcels

a) domesticb) international

Express mail service

Letters(documents),printedmatter,packages(parcels)

a) domesticb) international

Annex1containsasamplebreakdownofdataonthemarketshareofthedesignatedoperatorofahypotheticalcountrysimilartoandinlinewiththebreakdownofmarketdatadiscussedinsection2.2.2above.Thereareotheressentialfactorswhichalsoneedtobeconsidered,suchasimageandcredibility,althoughitishardtofindanymeasurementsofthesevariables.Thecoverageandstatusofserviceinruralandotherremoteareasinwhichthepostalservicemaybeasymbolofthegovernment'spresenceinsuchareasshouldalsobegivenspecialconsiderationinassessingtheneedsoflocalcommunities.

• Service operation by the designated operator. Withoutexception,thedesignatedoperatorisalwaysentrustedwiththeprovisionofmandatorypostalservicesandthefulfilmentofcountryobligationsundertheUniversalPostalConvention.

Theefficiencywithwhichtheseservicesarerendereddependsonthelevelofdevelopmentoftheserviceoperatorinquestion,asreflectedintheavailabilityofinfrastructure,technologyandhuman,materialandfinancialresourcesformaintainingaservicenetworkofferingaspecificlevelofcoverageandquality.Thelevelofdevelopmentofthedesignatedoperatoralsodeterminesitscapacityandefficiencyinmeetingdemandandfightingcompetition.

Informationonexistinginfrastructure,thefeaturesofthepostalnetworkandthecharacteristicsofavailablehuman,materialandtechnologyresourcesisespeciallyusefulwhensupplementedbyadditionalmeasurementsandcomparativedata,bothatthecountrylevelandattheleveloftheregionalandglobalpostalenvironment.

Thisprovidesmoresolidandusefulinformationonitslevelofproductivityandefficiencybasedonindicatorssuchas:

› thenumberofitemsprocessedperpostalworkerperyear;

› thedailynumberofitemsdeliveredpermailcarrier,inurbanareas,ruralareasandatthecountrywidelevel;

› thenumberofhomeswithhomedelivery;

› annualrevenues,costsandprofitsperpostalworker;

› maildeliverytimesinurbanareas,ruralareasandatthecountrywidelevel;

› thevolumeofmail(%)deliveredontime;

› mailtheft,lossandtamperingratesasapercentageofthevolumeofmailprocessedperyear;

› complaintandclaimreportingratesandaverageresponsetimeforclaims

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Geo-politicalandsocio-economiccountrydatawillalsoneedtobeusedtocalculateotherserviceindicatorsforthepostalnetworkmaintainedbythedesignatedoperator,suchas:

› thepercentageofthepopulationserved;

› thepercentageofthepopulationwithdailyhomedeliveryservice;

› thenumberandpercentageoflocationsaroundthecountry(cities,towns,villages,hamlets,communities,etc.)withpostalservice;

› thenumberandpercentageofhouseholds(dwellings)serviceddailybymailcarriers;

› thenumberofinhabitantsperpostoffice;

› theserviceareaperpostoffice,insquarekilometres.

Annex2containsexamplesofselectedindicatorsforuseincomparisonswithindustrializedcountriesatthesubregional,regionalandworldwidelevels.

• Financial and administrative situation of the designated operator. Themostimportantconsiderationinassessingtheeconomicperformanceofthedesignatedoperator'sserviceorganizationandservicedeliverysystemisitspatternofincomeandspendingoverthelast10years,orfiveyearsminimum.Itsdeficit,orthedegreetowhichspendingandinvestmentarecoveredbyincomingrevenues,andtrendsinthesefiguresareimportantindicatorsofitseconomicsituationandofanyexistingproblems.

Otherimportantfactorsarethestrengthandsustainabilityofitsfinancialstatements;itslevelofdebtand,inparticular,labour-relatedliabilities,includingpensionpayments,whereapplicable;itsannuallevelofinvestment;anditsongoingandenvisioneddevelopmentplans.

Administrativefactorstobeconsideredincludethecharacteristicsofitshumanresourcesandhumanresourcemanagementconditionswithinthepostalorganization,theorganizationalclimate,annualinvestmentlevelsintermsofthenumberofhoursoftrainingprovidedperemployee,andstaffprofiles(averagelevelofacademiceducation,age,seniorityandsalary).

II 2.3

Local needs and postal

reformAnumberofmajornationalinfrastructuresectorshavebeenrestructuredandmodernizedandarebecomingincreasinglytechnology-driven,inlinewithpatternsofeconomicgrowthanddevelopment.Thisisespeciallytrueofthetelecommunications,powerandotherresidentialpublicutilitysectors,aswellasofthebankingsystemandthefinancialsectoringeneral.

Likebusinessandindustry,theselattertwosectors,whicharethenationalpostalservice'smaincustomers,involveoperationswhichtendtomakeuseofallavailabletechnologyand,assuch,areseekingthesamesortofhigh-techsupportingservicesfromthepostalsectorinmovingcommunications,information,goodsandfunds.Theyneedpostalservicestoberapidandreliableenoughandtoprovideenoughaddedvaluetocontinuetorepresentavalidserviceoptionfortheirbusinessactivities.

Asanintegralpartoftoday'snewinformationandcommunicationssociety,theindividualsorhouseholdsegmentofthepostalmarketalsoexpectspostalserviceofferingsinlinewithconditionsinthesurroundingenvironment.EventhosepartsoftheworldwhichdonotyethaveaccesstoInternetserviceandtoinformationandcommunicationstechnology,ingeneral,aregoingtobeconnectedfasterthanmaybethought,andwillsoonhavebasicaccesstothesedigitalmedia.OngoingeffortsbytheinternationalcommunitytowipeoutpovertyinwhicheducationisviewedasthemainbastionofdevelopmentarebasedonICTconnectivity(Internet,technology,etc.)atboththeindividualandthecommunitylevel.

Businessactivitiesboostingnationwideoutputandspurringgrowthanddevelopmentforcompetinginaglobalizedfree-marketeconomyrequiremodern,efficientpostalcommunicationsinfrastructureandservicesbasedontheuseofpostaltechnologyanddigitalmedia.

Thetechnologicaldevelopmentofpostalservicerequirestime,investmentandmanpowertrainingandhingesondecisionswithrespecttotheapproachesandcoursesofactiontobetakenindevelopingthepostalsectorandthedesignatedoperator.Fortunately,therearemodelsandprocedureswhichcanexpeditetheassimilationofpostaltechnologytohelppostalservicesmakerapidstridesintechnologicaldevelopment.

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Countryneedsforessentialpostalservices,whetherreferredtoasbasicservicesorastheuniversalpostalservice,aregoingtorequiretechnology-drivenservices,asdictatedbytheactivitiesofbusinessclientsandindividualcustomers.Poor,remotecommunitiesneedpostalservicestoofferlegitimatesolutionsforovercomingexistingobstaclestotheprovisionofcoreservices,andtechnologyopensdoorswhichhadpreviouslybeenclosedtothem.

Anotherextremelyimportantneedinmanyareasistoovercomeweaknessesinparcelservice.Despitetheimpressivegrowthinparcelservicewiththeadventofe-commerceandothertypesofbusinesstechnology,thepostalservicesofmanycountrieshaveneglectedthismarketsegment,whileotherserviceoperatorsorcarriershavestrengthenedtheirmarketposition,attheexpenseofthispostalproduct.

E-commerceandInternetsalesarenowareasofvitalimportance.Indeed,thepostalland-scapehaschanged.Firstly,lettersandprintedpapervolumeshavedeclined,amidtheboomofitemscontaininggoods–whethersmallpacketsorparcels.Worldwidepackageflowsaregrowingandwillnodoubtcontinuetogrow.Secondly,attheUniversalPostalCongressinBeijing(1999),UPUmembercountriesspecificallydecidedtoincludeparcelserviceasabasicpostalservice,thatis,acoreuniversalpostalservice.

Studiesofdatawithrespecttoservicedeliveryconditionsshouldincludeanexerciseinidentifyingmajorweaknessesinphysicalinfrastructure;intechnologyresourcesformailacceptance,sortinganddeliveryoperations;intheuseofpostcodesforsortingpurposes;inthecustomeraddressingpracticesoflargemailers;intransportationresources;inthenumberofmailcarriers;andindailyhomedeliveryservice.Thereisawidespreadgeneralneedtoovercomeweaknessesinexistingservices,tospeedupthetechnologicaldevelopmentofpostalprocessesandprocedures,andtosystematicallyorganizethepostalmarketbasedoncleargroundrulesensuringthecontinuityoftheuniversalpostalservice.Predictably,allthis,inturn,requiresacomprehensivepostalreformprocesstoestablishanappropriatelegalframeworkforthedevelopmentofthepostalsectorandensurethelong-termsustainabilityoftheuniversalpostalservicewhileatthesametimeprovidingthecountrywithaviabledesignatedoperatorandneededhigh-qualityservices.

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Thepreviouschaptersdiscussedtheunderlyingprinciplesoftheuniversalpostalserviceandserviceneedsbasedonlocalconditionsinthepostalsector.Thischaptertakesalookatspecificissuesrelatingtothemappingoutandestablishmentofnationwideuniversalpostalservice.

Themappingofnationwideuniversalpostalserviceinvolvesmakingdecisionswithrespecttothepostalservicestobeincludedinthegovernment'suniversalpostalserviceobligations,standardsofqualityforservicedelivery,andprovisionsfortheoperationandfinancingoftheuniversalpostalservice.Thegovernmentdecision-makingprocesstodeterminetheuniversalpostalserviceinvolvestwophases.Inphase1,thegovernmentmakesdecisionsbasedonoperationalandeconomicstudiesanddiscussionsofdifferentapproachesandtheirimpactsandpracticalramifications.Phase2involvestheimplementationofthesedecisionsthroughtheenactmentofenablinglegislationbythelegislativebranchofgovernmenttomodernizethelegalframeworkforthenationalpostalsector.

Thefirstphaseofthisprocessrequiresoperational,technicalandeconomicfeasibilitystudies,costanalyses,performanceevaluationsandstudiesofmarkettrends.Thegoalistobalanceexpectationsformeetingneedsagainsttheoperational,technicalandeconomicviabilityofestablishingfinanciallyself-sustainingoperations.

Thesecondphaseisdevotedtosubstantiatingcorrespondingproposalswithaviewtoupdatingthelegalframeworkforensuringfulfilmentofthegovernment'suniversalpostalserviceobligationsthroughtheenactmentofapostalactmappingoutuniversalpostalservicesandestablishingaviableservicedeliverysystemandfinancingmechanism.Thenewpostalactwouldalsoestablishappropriatemechanismsfortheimplementationandenforcementofpostallegislationaspartofthegovernment'slegalmandatetoissueregulationsandexerciseitsregulatoryfunctions.

II 3.1

Appropriate legal framework for the

universal postal service

AsexplainedinsectionIindiscussingtheunderlyingprinciplesofuniversalpostalservice,thegovernment'suniversalpostalserviceobligationscannotbevaguelyorlooselydefined,leftopentointerpretationorexpressedinunrealisticterms,withoutpropermechanismstofacilitatetheirfulfilment.

Governmentuniversalpostalserviceobligationsstemfromtangiblecountrywideneeds.Allsegmentsofsociety,includingbothbusinessesandindividuals,requirepostalcommunicationservicesforthepursuitofbusinessandsocialactivities.UPUmembercountrieshaveagreedtomeetsuchobligationsinsigningtheUniversalPostalConvention,whichlaysthefoundationforprovidinguniversalaccesstopostalservice.

Inestablishingtheuniversalpostalservice,thegovernmentneedstomakedecisionsofvitalimportancetoandwithseriousrepercussionsforthequalityoflifeofitscitizenryandfortheorganizationofthenation'spostalmarketwhich,inturn,willalsoaffectnationwideeconomicgrowthanddevelopment.Thus,theprovisionsoflegislationestablishinguniversalpostalservicemustreflecttheimportanceofthesedecisionsaffectingthelivesofeachandeverymemberofthepopulation.

Establishingthegovernment'suniversalpostalserviceobligationsmeansspellingoutthetypesofmandatoryservicestobeprovidedandthewaytoguaranteeservicedeliveryunderspecificconditions,subjecttoasetofmarketrulesdesignedtoensurethecontinuityofsuchservices.

Anumberofcountriesincertainpartsoftheworldhavestillnotexplicitlyestablishedtheuniversalpostalserviceintheirdomesticpostallegislation.Notallcountrieshavebeenabletoconductnecessarypreliminarystudiesfortheenactmentofnewlegislationinresponsetoneedsforpostalreformandfortheapprovalofanewlegalframeworkforthepostalsectorgearedtothecurrentpostalenvironment.

Determining the universal postal services

II 3

96

Thelegalframeworkforthepostalsectormusttreattheuniversalpostalserviceasaspecializedsubject,withthenecessarydepthandlevelofdetail.Theimportanceandsignificanceoftheuniversalpostalservicerequiresaclear,unambiguouslegaltextrulingoutanypossibilityofmisinterpretationscontrarytothespiritofthelaw.

Theclarityofthelawwithrespecttothevariouselementsoftheuniversalpostalservicewillalsoprovidenecessaryguidanceforthedueandpropercraftingofregulationsfortheimplementationofcorrespondinglegalmandates.

TableNo.5isalistofthecoreelementsoftheuniversalpostalservicetobeexplicitlyaddressedinthetextofthepostalact.

Table No. 5

Core elements of Universal Postal Service to be addressed in the postal act

• Definitionofuniversalpostalservice • Determinationofcorrespondingservices • Servicedeliveryconditionsandconsiderations • Guidancefortheestablishmentofservicedeliveryconditions

• Regulatoryauthority • Financingofuniversalpostalserviceobligationsandthereservedservicearea

• Pricingsystem • Publicationofserviceperformancestandards • Serviceoperation • Accountingprocedures • Formalizationoftheobligationsofthedesignatedoperator

Asatisfactoryoutcomefromcountrydecisionmakingwithrespecttouniversalpostalservicedependsontheconsistencywithwhichotherelementsofthelegalframeworkfortheeffectiveimplementationofpolicydecisionshelpprovideforservicedeliveryandthefulfilmentofgovernmentalobligations.

Theestablishedlegalframeworkmustseetoitthatthepublicservicefeaturesofpostalservices,themarketoperatingsystem,theorganizationofthedesignatedoperatorandtheregulatorysystemconsistentlyandeffectivelyimplementtheunderlyingprinciplesoftheuniversalpostalservice.

Annex2,table2.1,outlinesthecoreissueswhichneedtobecoherentlyaddressedinthelegalframeworkforthepostalsector.Thisannex,entitled"Appropriatelegalframeworkforuniversalpostalservice",isamodelorframeofreferenceforfittingandreconcilingprovisionsfortheestablishmentofnationwideuniversalpostalservicewithotherelementsofthepostalact.

Thus,underthismodel,thelawbeginsbyacknowledgingthepublicserviceorientationofpostalservicesandestablisheswhatismeantbysuchservices,thetypesofactivitiesinvolved,andtheclassesofserviceincludedunderthisconcept.Thelawthengoesontoestablishthegovernment'spostalserviceobligations,definingwhatismeantbytheuniversalpostalservice,theservicesincludedinthegovernment'suniversalpostalserviceobligations,servicedeliveryconditionsandtheuniversalpostalservicefinancingmechanism.

Lastly,thelawestablishesaserviceoperatingsystemforboththeuniversalpostalserviceandotherspecifiedpostalservices,includingelementssuchasthelegalframeworkfortheoperationofdifferentclassesofservice,operatingproceduresforthedesignatedoperator,theregulatoryframeworkandappropriatepenaltyprovisions.

Itisimportanttobearinmindthatlegaltextsdefininganddeterminingtheuniversalpostalservicearenotthesortoflegislationthatcanbeissuedinavacuum.Theeffectiveestablishmentofnationwideuniversalpostalservicerequiresconsiderationoftheentirepolicyframeworkforthepostalsector,sothatensuingdecisionshaveadirectimpactontheeconomicorganizationofthepostalmarketandsector.Universalpostalserviceisthecoreofthenationwidepostalindustry.Thus,marketoperatingrulesmust,firstandforemost,ensurecompliancewithgovernmentuniversalpostalserviceobligations.

Theincorporationofuniversalpostalserviceintotheprovisionsofdomesticpostallegislationmeansbuildinganappropriatelegalframeworkinlinewithprevailingconditionsandtheenvironmentsurroundingtheoperationofworldwidepostalservicesbypassingcomprehensivelawsfullyaddressingthevariousissuesdiscussedabove.Forfurtherinformationonthissubject,seemoduleIIIoftheguidedealingspecificallywiththelegalframeworkforpostalreform.

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Theissueoftheservicesincludedingovernmentuniversalpostalserviceobligationshasbeenrepeatedlytouchedoninprevioussections.Thissectiontakesaspecific,in-depthlookatcountrydecisionmakingwithrespecttotheclassesofserviceincludedinuniversalpostalserviceobligationsasservicestobeguaranteedandmaintainedbythegovernment.

InlinewiththeobligationsincurredbyUPUmembercountriesundertheUniversalPostalConvention,thestartingpointorminimumlevelofserviceshouldbethebasicservicesestablishedbytheConvention,namelylettermailandparcelservices,allowingdecision-makerstofocusonthetypesofadditionalservicestobeincludedasmandatorypostalservicestobeguaranteedandmaintainedbythegovernment.

Industrializedanddevelopingcountriesaroundtheworldalsoincludeunderthisconceptpostalfinancialservicesconsistingmainlyofsimplefinancialpaymentservices(makingpaymentstothirdparties,receivingpaymentsfromthirdparties,transfers,remittances,moneyorders,etc.)and,insomecases,savingsservices.

Dependingonlocalcircumstancesandindividualandcommunityneeds,forsomecountries,postalfinancialservicesareagoodcomplementtolettermailandparcelserviceandagoodfitwiththenetworkservicesnormallyprovidedbypostaladministrations,requiringnomajorinfrastructureworksoradditionalinvestments.

Asasupplementallineofbusiness,financialservicesnotonlygenerateadditionalnetincome,butenablepostalservicestomakemoreefficientuseofneededphysicalandtechnologyinfrastructurefortheirnetworkofpostofficesorpublicaccesspoints,strengtheningtheearningpowerofthepostalnetwork.

Thebenefitsofpostalfinancialorpaymentservicesbecomemuchclearerwhenviewedfromtheperspectiveoftheneedsofruralandsemi-ruralcommunitiesinsmallandmedium-sizedvillageswithoutaccesstothefinancialsystemandregularbankingservicesavailableinlargecities.Third-partypaymentservices(forsendingandreceivingpayments)arenotonlyrequiredbyindividualsintheirprivatelives,butareequallyimportanttothegovernmentforalltypesofactivities,operations,transactionsandrelationswiththepublic.

TableNo.6isanoutlineoftheclassesofservicestobeconsideredforinclusioningovernmentuniversalpostalserviceobligations.BearinmindthatallUPUcountrieshaveanobligationtoprovideamandatoryminimumlevelofuniversalpostalserviceconsistingofbasiclettermailandparcelservice,asdefinedintheUniversalPostalConvention.Lettermailconsistsofalltypesofcurrent,personalcommunications,includingreceipts,billsandbusinesspapersanddocumentsnormallycarriedbythedesignatedoperatoranditsservicenetworkinsealedenvelopes.

"Otherpostalservices"refertoallclassesofspecialpostalservicesotherthanbasicservices,suchasregisteredmailservice,CODservice,insuranceserviceforlettermail,etc.

II 3.2

Services

98

Table No. 6 – Universal postal services

Core universal postal services

Basicpostalservices(art.17,UPUConvention)

• Letter-post items-priorityitemsandnon-priorityitems,upto2kg

-letters,postcards,printedpapersandsmallpackets,upto2kg

-itemsfortheblind,upto7kg

-specialbags("Mbags"),upto30kg

• Parcels parcels,upto20kg

Mandatory supplementary services

•Registrationserviceforoutboundpriorityandairmailletter-postitems

•Registrationserviceforallinboundletter-postitems

Supplementary services including both mandatory and optional features

• International business reply service (IBRS): AllmembercountriesareobligedtooperatetheIBRS"return"service

• International reply coupon (IRC) service: Thesecouponscanbeexchangedforpostageinallmembercountries,buttheirsaleisoptional

• Advice of delivery for registered letter mail, parcels and insured items: Allmembercountriesmustfulfiltheadviceofdeliveryserviceforinbounditems.However,membercountriesmaychoosewhetherornottooffertheadviceofdeliveryserviceforoutbounditems

Optional supplementary services

• Other postal services•Postalfinancialservicespostaux-paymentstothirdparties

-transfers,remittances,postalcheques,etc.

•Savings,etc

II 3.3

Service delivery

conditionsDeterminingnationwideuniversalpostalservicegoesbeyonddecisionmakingwithrespecttotheservicestobeincludedinthegovernment'suniversalpostalserviceobligations.Thedecision-makingprocessneedstobetakenastepfurther,todeterminethemannerinwhichsuchservicesaretobeprovided.

UndertheprovisionsoftheUniversalPostalConvention,countriesarecommittedtoprovidingabasicpackageofservicesdefinedasmandatorycoreservices.Moreover,inundertakingsuchcommitment,theyagreedthatthispackageofcoreserviceofferingsorbasicpostalservicesshouldconsistofhigh-quality,continuing,affordableservicesonthewholeoftheirterritory.

Furthermore,regardlessoftheinterpretationoftheirobligationwithrespecttothemannerinwhichtheyaretoprovidethesecoreservices,UPUmembercountriesagreedoncertainbasicstandardsofqualitywithaviewtominimizinginconsistencyintheinternationalpostalservicenetwork.Tothisend,UPUcountrieshaveagreedtoconsideraccess,speedandreliability,security,accountabilityforthehandlingofclaimsandcomplaints,andcustomersatisfactionaskeyqualityofservicefactors.

Thus,servicedeliveryconditionstakeintoaccountimportantoperationalandeconomicconsiderations.Theoperationalconsiderationsinvolvedincludefacilitiesprovidingaccesstophysicalinfrastructureandthepostalnetworkandstandardsofqualityforoperatingprocesseswithrespecttothespeedandreliabilityofdeliveryservice,mailsecurity,accountabilityforclaims,andcustomersatisfaction.

Theeconomicconsiderationsinservicedeliveryconditionshavetodowiththepricefactor,orthepriceswhichcustomersshouldbeobligedtopayforservice,withthepremisebeingthatsuchpricesshouldcovercosts.Costsaredeterminedbythelevelofefficiencyandbyrequiredperformancestandardsand,inturn,significantlyaffectthefeasibilityofthesustainablefinancingofuniversalpostalserviceandtheshapingofthelegalframeworkforserviceoperationonthepostalmarket.

Asinthecaseofalldecisionspertainingtothemappingofuniversalpostalservice,countrydecisionswithrespecttoservicedeliveryconditionsmustbebasedonstudiesandinformationonthesituationofthepostalsectorandmustconsidertheneedsandrequirementsofthegeneralpublicandthesurroundingenvironment.

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Turningtomarketdynamics,certaindesignatedoperatorshavehadseriousproblemsofferingsomeoftheproductsandservicesdemandedbytheircustomers.Publicutilities,financialinstitutionsandbusinessandindustryarestillwaitingforpostalserviceswithvalue-added,modernoperatingprocessesand,inshort,alltheconveniencesofferedbymoderntechnologyusingdigitalprocessingsystems,suchashybridmailande-commerceservices.

Decisionsondifferentaspectsofservicedeliveryconditionsneedtobegroundedinperformanceevaluationsofdifferentoptionsoralternatives,giventheirtieinswithuniversalpostalservicecost,priceandfinancingfactors.Thechallengeforgovernmentdecision-makersistofindtherightbalancebetweenneedsandthetechnical,operationalandeconomicfeasibilityofmeetingservicedeliveryconditionsforuniversalpostalservice.

Theinclusionofparcelserviceintheuniversalpostalservicepackagewiththesameserviceperformancecriteriaasforletter-mailservice(letters,printedpapers,etc.)hasaddedyetanothermajorchallengetothelistofproblemsbeingdealtwithbydesignatedoperatorsinanumberofcountries.ThisrequirementimposedundertheUniversalPostalConventionandagreedtobythegovernmentsofUPUmembercountriesnecessitatesaspecial,extraoperationaleffortonthepartofthedesignatedoperator.

Insomedevelopingcountries,postalparcelserviceisextremelyunderdeveloped,withverylittleattentionhavingbeenpaidtothistypeofservicebydesignatedoperatorsuntilrecently.Postalserviceoperationsinthisareahavebeenconfinedmainlytoinboundparceltrafficfromothercountriessubjecttotime-consuming,outdated,obsoletecustomsregulationsandformalitiesandoperatingprocedures.Thosedevelopingcountrieswhosedesignatedoperatordoesofferdomesticparcelservicereportanegligiblebusinessvolume.Asaresult,processingfacilitiesandinformationandexperiencerelatingtothisproductandmarketareextremelylimited.

Inadditiontotheneedtoensurethatdecisionsonservicedeliveryconditionsareoperationallyandeconomicallyviableinthelightofthesituationofeachcountry,itisvitalthatsuchconditionsbeexpressedinspecific,quantitative,measurabletermsforpurposesofmonitoringandcontrollingthecountry'sprogressinattainingproposedtargetswithrespecttoqualityandefficiency.Thefollowingsectionstakeaseparatelookatdifferentservicedeliveryconditions.Theoneconditionnotdiscussedisthecontinuityofuniversalpostalservice.

Continuityisaninherentcharacteristicofuniversalpostalservicestemmingfromitsverynature.Universalpostalserviceisarightand,assuch,maynotbeterminatedorsuspendedforanyreason,exceptforwell-documentedreasonsofforcemajeure.Thus,universalpostalserviceisinherentlyaperennialservice,whichissomethingthatdoesnotneedtobespelledout.

II 3.3.1

Access"Access"referstotheavailabilityoffacilitiesenablingcustomerstouseandbenefitfromtheservicesprovidedbythepostalnetworkanditsphysicalinfrastructure.

Thephysicalinfrastructureandoperationalpostalnetworkprovidingtheuniversalpostalservicethroughspecificfacilitiesconsistofelementssuchas:

• postofficesorretailoutletsoperateddirectlybythepostalserviceorbycontractors;

• collectionboxes; • processingcentres(mailsortingandoperationscentres);

• transportationsystems(groundtransportation,airtransportation,etc.)operateddirectlybythepostalserviceorbycontractors;

• themaildeliverynetwork(mailcarriers,posterestante,parcellockersandpostofficeboxes).

Theaccessibilityofuniversalpostalservicetothegeneralpubliccanbeexpressedintermsofitsgeographicanddemographiccoverageandtheregularityofretail,mailtransportationanddeliveryservices,allofwhicharepivotalissuesonwhichthegovernmentwillneedtomakedecisionsspecificallyaffectingservicedeliveryconditions.

Geographic and demographic coverage. Thisreferstothephysicallocationsaroundthecountryinwhichthegovernmentguaranteesaccesstouniversalpostalserviceandthetargetednumberofinhabitantstobeaffordedanopportunitytoexercisetheirrighttouniversalpostalservice.

100

Thegovernmentwillneedtoestablishthetypesofgeopoliticalandadministrativesubdivisions,orthelocalitiesandlevelsofpopulation,towhichitisabletoextendservice.Forexample,itmaydecidetoextendthenationwideuniversalpostalservicenetworkonlytomunicipalitieswithover5,000inhabitants,tovillageswithapopulationofover2,000inhabitants,orintosmall hamletswithover200residents,inallcases,accordingtotheabilityofthecountryandthedesignatedoperatortomeetestablishedservicecoveragetargets.

Likewise,itmaydecidethataspecificpercentageofthepopulationistohaveaccesstouniversalpostalservicewithinaspecifiedtimeframe.Forexample,itmaydecidethat98%ofthenation'spopulationmusthaveaccesstouniversalpostalservicewithinaperiodoffiveyears.

Regularity of service. Thisaspectofserviceaccessrefersmainlytotheregularitywithwhichservicesaremadeavailabletothepublicforthemailingorreceiptofpostalitems.

Ì Regularity of retail serviceOfficehoursforthemailingofpostalitemsortheuseofuniversalpostalservices.Numberofdaysaweekandnumberofhoursadaythepublichasaccesstocounterservices.

Ì Regularity of home delivery serviceAccesstohomedeliveryservice.Numberofdaysaweekonwhichhomedeliveryserviceisprovided.Thisalsoincludestheregularityofdeliveryservicetopostofficeboxes.

Ì Regularity of mail transportation serviceRegularityofmailtransportationservicetoandfromaparticularlocation.Inthecaseofvillagesandruralareas,itisessentialthatmailtransportationserviceschedulescoincidewithexistingpassengerandfreighttransportationschedulesinsuchareastomakesurethatpostalserviceisalegitimateserviceoptionforlocalresidents.

Whateverthesituationinanygivencountry,decisionswithrespecttotheaccessibilityofuniversalpostalserviceareofparamountimportance,owingtotheirdirecteffectontheoperationalandeconomicviabilityofthepostalnetwork.Decisionsonthegeographicanddemographiccoverageofuniversalpostalservicewilldeterminetheextentofthepostalnetwork,whiledecisionsonserviceoperatingschedulesandtheregularityofservicewilldeterminethecomplexityandcostofcorrespondingoperations.

II 3.3.2

Speed and reliability

Deliverytimehasalwaysbeenanimportantdeterminantofthequalityofpostalservice.Nowadays,morethanever,customersaredemandingrapiddeliveryserviceforletters,messages,packages,funds,etc.,allofwhichareelementsoftheuniversalpostalserviceand,assuch,mustmeetstandardsofqualityeffectivelysatisfyingcustomerneeds.

Adeliverystandardisaprescribedtimeframeforthedeliveryofmailitemsfromthetimetheitemsarepostedorhandedovertothedesignatedoperator.

Reliabilityhastodowiththelevelofconfidencethatserviceobligationsanddeliverystandardswillbemet.Togetherwithspeed,thereliabilityoftheserviceorganizationandofcorrespondingoperatingprocessesistheservicequalityfactormostvaluedbycustomers.Complianceratescanbeexpressedasaminimumpercentageofmailvolumewhichmustmeetestablisheddeliverystandards.

Inestablishingqualityofservicestandardsfordesignatedoperatorswithrespecttodeliverytimeandcompliance,decisionsonthespeedandreliabilityoftheuniversalpostalserviceneedtosettargetstobegraduallyattainedoveraspecifiedtimeperiod,suchasthefollowingsampletargetsfordomesticlettermail.

Table No. 7

YearDelivery standard

Compliance rate (%)

2018 3days 90%ofmailvolume

2019 2days 95%ofmailvolume

2020 1day 85%ofmailvolume

2021 1day 95%ofmailvolume

2022 1day 98%ofmailvolume

Differentclassesofserviceandgeographicareaswillbesubjecttodifferentdeliverystandards.

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Securityreferstotheprotectionofthephysicalintegrityofitemsentrustedbycustomerstothepostalservicefordeliverytotherecipient.A100%securityguaranteeintheprocessingandtransportationofmailitemsisasinequanonconditionforpostalservices.

Alongwithpredictablereferencestospeedandreliability,securityisinvariablymentionedasanessentialelementofqualityofserviceinensuringcustomersatisfaction.

Irregularitiessuchastheft,riflingandtamperingandlost,damagedandmissingitemsarisinginthecourseoftheservicedeliveryprocessrequireclosemonitoringandsupervision.

Decisionsonservicedeliveryconditionsneedtosettolerancelimitsforthesetypesofirregularitiesasashareofmailvolume,expressedasaceilingrateorindex,eitherinpercentagetermsorperthousanditemsperday,monthoryear.

Thisreferstotheobligationtorespondtorequestsforinformation,complaintsorclaimsfromcustomersinrelationtotheuniversalpostalserviceatanypointoftheservicenetwork.Thisfactorismeasuredandexpressedasanumberofeventsorpercentageofmailvolume.

Decisionswillneedtobemadeonadmissiblelevelsofclaimsandcomplaints,responsetimesforsettlingclaimsandcomplaints,andtargetsforgraduallyreducingtheirlevelaspartofeffortstoimproveservicequalityandcustomersatisfaction.

Responsetimesforthehandlingandsettlingofclaimsandcomplaintsdependontheexistenceofinfrastructureandtechnologyfortheintakeofclaimsatallpointsoftheservicenetworkandforprocessingandrespondingtosuchclaims.

II 3.3.5

Customer satisfaction

Customersatisfactionistheproductofanacceptablelevelofserviceaccessandpropercompliancewithqualityofservicestandardswithrespecttospeed,reliability,securityandaccountability.

Sinceuniversalpostalserviceinvolvesdifferentclassesofservice,customersatisfactionshouldbemeasuredbothonaservice-by-servicebasisandasawhole.

Thedegreeofcustomersatisfactionisgenerallymeasuredinperiodiccustomersurveysandopinionpolls.

II 3.3.6

PriceThecostorpriceofauniversalpostalserviceproductmustbeaffordabletotheentirepopulation.

Thecostofpostalservicewillobviouslyvaryaccordingtofactorssuchasweight,distance,quantityanddeliverytime.However,itwouldbeextremelycomplicatedandimpracticaltochargedifferentpricesfortheuniversalpostalservicebasedondifferencesinsuchfactors.

Thegeneralpracticeistochargeuniformprices,applyinganequalizationprincipleforbasicservices.Underthistypeofpricingsystem,servicetomorelucrative(lowercost)geographicareasoffsetsthecostofservicetolessprofitableareas,makingitpossibletochargeuniformprices.Inadditiontothisfinancialrationale,thereisapoliticalrationaleforsuchequalization:thesametreatmentshouldbegiventoallinhabitants,whethertheyliveincitiesorinruralandmarginalizedareas.

Decisionsonpricelevelsandthepricingsystemforuniversalpostalservicearetiedtodecisionsonservicecoverage,operationandfinancing.Therearethreebasicoptionswithrespecttopossiblepricingsystems,namelyfree-marketpricing,monitoredfree-marketpricingandpricecontrol.

II 3.3.4

Accountability for claims,

complaints and inquiries

II 3.3.3

Security

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Thepostalactembodiesgovernmentdecisionsonallaspectsoftheorganizationofpublicandprivatepostalserviceoperationsatthecountrywidelevel.Oneofthemainissueswhichmustbeaddressedinthepostalactisthatoftheuniversalpostalservice.Thetreatmentofthisissueunderthepostalactisdesignedtoresolveanyproblemsfacedbythegovernmentinmeetingitspostalserviceobligations.

Asdiscussedearlierinthismodule,theissueofuniversalpostalserviceisofsuchvitalimportancetopolicymakingforthepostalsectorthatitisthefocalpointofthepostalactandthebasisforthetreatmentofallotherissues.Withoutclearprovisionswithrespecttothescopeoftheuniversalpostalserviceandtheoperationandsustainablefinancingofcorrespondingservices,nodecisionscanbemadewithrespecttothetreatmentofotherservices.Thus,thelawmustfirstensuretheviabilityofuniversalpostalservicebeforeaddressinganyotherissues.

Chapter3,section3.1,whichdealswiththeappropriatelegalframeworkforuniversalpostalservice,talksabouthowthepostalactmustaddressallcoreissuesforthemappingofnationwideuniversalpostalservice.

Wecannotover-emphasizehowimportantitisthatthelegalframeworkforthepostalsectorclearlyandspecificallyspellouttheclassesofserviceincludedinuniversalpostalserviceobligations,requisiteservicedeliveryconditions,andthemannerinwhichsuchservicesaretobeoperatedandfunded.

However,thepostalactcannotpossiblycoverasbroadanissueasthatoftheestablishmentofdetailedtechnicalspecificationsforallthedifferentfactorsandvariablesinvolvedinservicedelivery.Insuchcase,itneedstoestablishaconceptualframeworkforkeyfactorssuchasaccessandquality,layingthenecessaryfoundationfortheissuanceofmoredetailedregulationsaccuratelyinterpretingandexpandingontheseconcepts.

II 4.2

Development of regulations

Withoutfurtherdevelopmentoftheprovisionsoflegislationunderimplementingregulations,itwouldbeextremelyhardtoenforcethelaw,particularlyinthecurrentpostalenvironmentruledbyprivatecompetitionandbusinessinterests.Itwouldbeaseriousmistaketounderestimatetheimportanceofthismatter,whichcouldjeopardizetheachievementoftargetedoutcomesandweakenthepoliticalwilltostrengthenpostalserviceembodiedinthepostalact.

Thedevelopmentofimplementingregulationsunderthepostalactisastrategicissuefartoobroadtocoverinthisdiscussion,particularlyinthelightofthedifferentcircumstancesineachcountry.

Thus,ourgoalismerelytotouchonsomeofthemostimportantaspectsofthedevelopmentofuniversalpostalserviceregulationswhichcannotbeoverlooked.Theprocessofframinguniversalpostalserviceregulationsisgroundedinthesameinformation,studiesandanalysesusedasthebasisforthedecisionsembodiedinthepostalact.Actually,thebestapproachistodraftsuchregulationspriortointroducingtheproposedpostalactsince,insomecases,theymayclarifycertaintechnicaldetailsandaspectsofitsprovisionsforgovernmentbureaucratsandlaw-makers,helpingtosupportandsubstantiateitsprovisions.

Thedecisionsembodiedintheprovisionsofthepostalactwithrespecttotheuniversalpostalservicewillneedtobeconvertedintoexplicitproceduralrulesandtangiblespecificationsinthreemainareaswithaviewtotheireffectiveimplementation,namelyintodetailedspecificationsfordeterminingfactorsinservicedeliveryconditions;indicativeplansforthemodernizationanddevelopmentoftheuniversalpostalservice;andperformancemonitoring,measurementandevaluationprovisions.

Postal service development

II 4

II 4.1

Legal mandates

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Regulationsissuedunderthepostalactmustcontaindetailedprovisionswithrespecttorequiredservicedeliveryconditions,establishingcleartechnicalspecificationstobemetbythedesignatedoperator.Moreover,theestablishmentoftechnicalspecificationsandrequirementsinvolvesawholeotherseriesoftasksassociatedwiththedevelopmentofregulatoryprovisions,includingtheestablishmentofworkprogrammes,operatinginstructionsandspecificationsandproceduresmanuals.

Regulationsgoverningservicedeliveryconditionsfortheuniversalpostalservicemustaddressallapplicableissuesindepth,throughtheestablishmentoftangible,technicalspecifications.Addressingtheissueofaccess,forexample,theywillneedtoestablishtechnicalcriteriafordeterminingthetypesofservicepointandregularityofmailing,maildeliveryandmailtransportationservicerequiredindifferenttypesoflocalities.Theimplementationofsuchregulationswillrequireagreatdealoftechnicalworkonthepartofthepostaloperator.

TableNo.8isanexampleofablueprintforahypotheticalregulationsettingstandardswithrespecttoserviceaccess.

Inimplementingtheprovisionsofthepostalact,governmentpolicyforthepostalsectorandnationaldevelopmentpolicy,itisuptothegovernmentregulatorforthepostalsectortosetpolicyguidelinesformodernizationanddevelopmentoftheservicesrenderedbythedesignatedoperator.

Thesepolicyguidelinesforthedevelopmentofuniversalpostalserviceshouldbeestablishedinconjunctionwiththedesignatedoperatorresponsiblefortheirimplementation.Forpracticalpurposes,theseguidelineswillneedtobeembodiedinindicativeservicedevelopmentplans,asthemosteffectivewayofplanningtheimplementationandfurtherdevelopmentofserviceperformancespecifications,giventhetimeandresourcesavailableandtargetedoutcomes.

Theuniversalpostalservicedevelopmentplanwillneedtoincludeelementssuchasdevelopmentobjectives,strategies,projectsandeconomicstudies.Economicstudiesshouldincludeestimatesofprojectedbenefitsandcorrespondinginvestmentandfinancingrequirements.Thisplan,tobediscussedandjointlyagreedonwiththedesignatedoperator,coveringathree-orfive-yearperiod,withannualreviewsandadjustments,shouldserveasatypeof"fieldguide"forimplementationofthegovernment'suniversalpostalservicedevelopmentpolicy,withthedesignatedoperatorinchargeofcarryingitoutandtheregulatoryauthorityorregulatorinchargeofmonitoringcompliance.

Inestablishingthisdevelopmentplan,thegovernmentiscommittingitselftothefurtheranceofspecificobjectivesandtheattainmentoftangibleoutcomesthroughitsdesignatedoperatorandregulator.Accordingly,itwillneedtoknowtheoperational,technicalandeconomiccapacityofbothentitiestofollowthroughwiththeplan.

Universalpostalservicedevelopmentplanscanbeanextremelyusefultoolinsupportofproposalsforneededreforms,foranewlegalframeworkandformodernizingtheservicesrenderedbythedesignatedoperatorifcraftedaspartofthestudiesandanalysesconductedforpurposesofthemappingofuniversalpostalservice.Moreover,countriesarefindingthemselvesinneedofdevelopmentplansrequiringsignificantamountsofspendingandinvestmentforwhichtheywillhavetomakenecessaryfinancialarrangements.

II 4.2.3

Performance monitoring and

measurementPartoftheregulatoryfunctioninvolvescloselymonitoringcompliancebythedesignatedoperatorwithregulatoryprovisionssettingstandardsandspecificationsfortheoperationofeachestablishedclassofservice.Effectivemonitoringrequiresthepromptdetectionofanydeviationsfromandomissionsorviolationsofsuchprovisions.Closemonitoringprovidestimelydataontheachievementofagreed-oninterimperformancetargetsfortheexpansion,improvementandmodernizationofpostalservices.

However,themonitoringprocesscannotimposeconstraintsonthedesignatedoperatororheavyeconomicandoperationalburdensontheregulator.Thesuccessofmonitoringeffortshingesontheestablishmentofsimple,practicalmeasurementmechanismsallowingforsound,effectivesupervisionandevaluation,withoutcreatingadditionalexpensesorinterferingwiththeactivitiesofthepostaloperatorortheoperationsoftheregulatorinperformingitsfunctions.Theregulatoryprocessshouldalsoprovideeffectivesupervisorymechanismsenablingtheregulator

II 4.2.1

Regulation of service delivery

conditions

II 4.2.2

Development plans

Table No. 8 – Hypothetical standards for the delivery of letter-mail items and parcels

Local area population

Type of delivery serviceDeliveries per

week

Urban Rural Urban Rural

≤500 In-office In-office 3 3

500to3,000 In-officeCommunitymailboxes

4 3

3,000to10,000 HomeCommunitymailboxes

5 4

10,000to50,000 Home Communitymailboxes 5 5

>50,000 Home Communitymailboxes 5 5

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todetectanysituationsoractionsonthepartofserviceoperatorsotherthanthedesignatedoperatorundermining,violatingorthreateningtoviolateuniversalpostalservicestandardsandregulations.Timelymeasuresagainsteventsandsituationsviolatingtheprovisionsofuniversalpostalservicelegislationandregulationscanforestalltheneedtoresolvedeeperproblems,particularlyinthecaseofencroachmentsonthereservedserviceareaforthefinancingoftheuniversalpostalservice.Pricesforreservedserviceswarrantspecialattention,sincepriceprotectionfortheproductsofferedbythedesignatedoperatordoesnotautomaticallyruleouttheirbeingunderminedbyunfairpractices,whicharenotalwayseasytodetect.Thus,themonitoringandsurveillanceofmarketpricesrequireclearrulesandforesight.

Regulationalsorequiresaspecialefforttoestablisheffectivemeasurementinstrumentstoensurethesoundnessandviabilityofmonitoringandevaluationactivities.Theprovisionsofpostalregulationswillneedtoestablishyardsticksforassessingservicedeliveryconditionswithrespecttoeachperformancefactoranditsvariouscharacteristics,aswellascorrespondingmeasurementintervals,whichcouldbedaily,weekly,monthlyoryearly.

Theregulatordoesnotnecessarilyhavetomakesuchmeasurementsitself.Preferably,measurementsofdifferentaspectsoftheoperational,financialormarketperformanceofthedesignatedoperatorwillbemadebyprivatefirms.Postalregulationscanestablishdifferenttypesofperformancemeasurementsanddistinguishbetweenthosetobemadedirectlybytheregulator,atitsexpense,andthosewhosecostsaretobebornebythedesignatedoperator.

Performancemeasurementsinvolvethefollowingmainqualityofservice–relatedfactors:

• Mail delivery times: Number of days

• Reliability: Percentage of mail volume meeting established delivery standards

• Security: Mail theft and loss rates, etc.

• Accountability: Claim reporting rate. Response time. Compliance rate with response times

• Customer satisfaction: Surveys and opinion polls to establish customer satisfaction indexes

Itwillalsobenecessarytoperiodicallymeasurecompliancewithspecificationsforaccessfacilities,physicalinfrastructure,postoffices,mailboxes,etc.,includingchecksoftheregularityofmailacceptance,deliveryandtransportation.

II 4.3

Operational development

Thegovernmentisdeemedtohavemetitspostalserviceobligationswhenthepublichasasupplyofuniversalpostalservicesadequatelymeetingitsneeds.Thismeansprovidingadequateservicecoverageandaccessandaffordablepricesforallsegmentsofthepopulation,andasatisfactorylevelofservicequalityacrosstheboard.

Reachingthispointmeansthattheoperatorinchargeoftheuniversalpostalservicehassolveditsviabilityproblem,whichleavesthematterofitssustainability.

Theviabilityandsustainabilityofuniversalpostalservicerequireanadequatelevelofdevelopmentoftheservicesfurnishedbythedesignatedoperatorandmajorimprovementsinitsoperations,technologyandorganizationasaresultofthetypeofcomprehensivepostalreformeffortrepeatedlyreferredtoinprevioussectionsandofvitalimportancetomeettheneedsofthepublic.Policydecisionsestablishingnationwideuniversalpostalserviceandtheenactmentofapostalactandtheissuanceofimplementingregulationsthereundershouldcreateanenablingenvironmentforthedevelopmentofpostalservice,atwhichpointtheresponsibilityforgettingresultsshiftstothedesignatedoperator.

Theoperationaldevelopmentoftheuniversalpostalservicereferstotherestructuringofthedesignatedoperatorandthemodernizationofcorrespondingservices,bothofwhicharecrucialtothefulfilmentofgovernmentalobligationspassedontothedesignatedoperator.Asdiscussedearlier,today'sinformationandcommunicationssocietyisdemandingchange,intheformofstructural,organizational,operational,technological,strategicandenterprisereform.

Universalpostalservicerequirementsestablishedundertheprovisionsofthepostalactanditsimplementingregulationsimposeobligationsonthedesignatedoperatortomeetaspecificmarketdemandsubjecttospecificstandardsofqualitywhichithasnotnormallyhadtodealwithinanycapacityuptothispoint.Moreover,insomecases,thelegalframeworkforthepostalsectorgivesthedesignatedoperatorexclusiverightstoareservedservicearea,alongwithpriceprotection,inanarrangementdesignedtogeneratemostoftherevenuesneededtofinanceaggregateuniversalpostalservicecosts.

106

Incertaindevelopingcountries,thedesignatedoperatorinthisreservedserviceareaisservicingonlyasmallportionoftotalmarketdemand,anditwouldbeunfortunateifitwereunabletobuildtheoperatingcapacityneededtomeetitsobligations.Suchcountriesurgentlyneedtotakeimmediateactiontoimplementaphaseddevelopmentprogrammedesignedtotransformthedesignatedoperatorintothekindofserviceoperatorrequiredbytoday'ssociety.Thedesignatedoperatorcannotaffordtowaitforthischangetooccurspontaneously,throughtheoperationofthelaw.Onthecontrary,itneedstobeginthisoperationaldevelopmentprocessevenbeforethepostalactispassedbyCongress.

Thesuccessofthisoperationaldevelopmenteffortlieslargelyinthecommitmentandwillofthepostalservicestafftofosterneededinternalchanges.Thegovernmentcannotpossiblyunilaterallyachieveapositiveoutcomewithoutthesupportofthepostalworkforce.

Thegovernmentandtheregulatoryauthorityshould,atthesametime,helpfurtherthisprocessthroughsectorpoliciesdesignedtobolsterthedesignatedoperatoranditsspecificdevelopmentplans,inlinewiththeprovisionsofthepostalactanditsimplementingregulations.

Inmostcases,theoperationaldevelopmentoftheuniversalpostalservicewillnecessitateamajorplanningeffort.Itisdifficulttoinstitutecomplexorganizationalandtechnologicalreformprocesses"offthecuff",withouttheaidofmanagementplanningtoolstohelporganizeworkandmonitorperformance.

Thesetypesofdevelopmentprojectsbythedesignatedoperatorincludecertainuniversalcomponentswhoseconsiderationshouldbegiventoppriority,suchas:

• requiredmajorinvestments,primarilyinpostaltechnologyandhumanresourcestraining;

• technicalorganizationofoperatingprocessesfortraditionalmailserviceforlettersandprintedmatterandcapacitybuildingfordailyhomedelivery,mailsorting,transportationandotherservices;

• organizationofdomesticandinternationalparcelservice;

• institutionofmodernadministrativeprocedures,informationtechnologyandorganizationaldevelopment.

Inmostcases,thesefourfactorsrepresentonlypartofthecrucialneedstobeaddressedbythesedevelopmentefforts.Themostpressingneedsareforinvestmentfundingandthesolutionofproblemswithoperationalprocessesforlettermailandbusinessmailserviceforregularandlargebusinesscustomers.

Inadditiontotheneedtotargetdevelopmentprojectstothetypesofservicesdemandedbytoday'ssociety,thedesignatedoperatorwillneedtobuildupitslimiteddailyoperatingcapacityandacquirebasicmailprocessingtechnology,suchastechnologyfortheorganizationofmaildeliveryoperations(automatedsorting,codemarking,etc.).

107

Anyservicedevelopmentplanforthedesignatedoperatormustincludeatleastthreeofthefollowingtypesofoperationaldevelopmentprojects:

• Modernizationofletter-mailprocessingprocedures–lettersandprintedmatter:

› organizationofmailsortinganddeliveryoperations–automatedsortingandcodemarkingofitemsdepositedbylargemailers;

› reconfigurationandexpansionofthepostalnetwork;

› reconfigurationofthetransportationnetwork.

• Establishmentofamodernparcelservice.

• Establishmentofmodernpostalfinancialservices.

• Modernizationofsupportingadministrativeproceduresfortheprovisionofpostalservice:

› ICT-drivenfinancial,businessandmanagementprocedures.

Inadditiontotheneedforinvestmentfunds,theimplementationofthesetypesoflarge-scaleprogrammeswithspecializedtechnicalcomponentsrequiresotherstrategicresourcessuchastechnicalknow-how,experienceandappropriatepostaltechnology.Theneedtocarryoutsuchprogrammesinrelativelyshortperiodsoftimewillrequiredesignatedoperatorstouseeverypossiblemeansattheirdisposaltosecuretheseresources,suchasbusinessarrangementsforthesharingofinformationandexperience,consultingservices,managementandoperatingagreements,andstrategicalliances.

ANNEX 1 — Example Country NTable 1.1. Postal market data

VOLUME

Millions of items/yearVALUE

Millions of USD/year

Traditional mail service 45.0 11.0

Domesticmail 41.0 8.1

Businesses1 38.0 7.3

Individuals 3.0 0.8

Internationalmail2 4.0 2.9

Businesses 3.0 2.2

Individuals 1.0 0.7

Express mail – courier service 3.0 13.0

Domesticcourierservice 2.2 3.0

Businesses 1.7 2.2

Individuals 0.5 0.8

Internationalcourierservice 0.8 10.0

Businesses 0.7 8.5

Individuals 0.1 1.5

TOTAL MARKET 48.0 24.0

¹ Dataondomesticbusinessmailservice(alltypesofbusinessconcernsandgovernmententities)isbrokendownbysectorof activityintable1.2onthenextpage.

² Thisreferstotraditionaloutboundinternationalmailservicetoothercountries.

108

ANNEX 1 — Example Country NTable 1.2. Data on traditional domestic mail service to the business segment of the postal market

VOLUME

Millions of items/yearVALUE

Millions of USD/year

DOMESTIC BUSINESS MAIL SERVICE 38.0 7.3

PUBLIC UTILITIES 23.0 3.5

Telephone–Fixedandcellularlines 9.0 1.4

Electricity 8.0 1.2

Water 6.0 0.9

FINANCIAL SECTOR 9.0 2.0

Banks–Chequeaccounts 4.0 0.9

Banks–Creditcards 3.5 0.8

Loans–Homeloans,etc. 0.5 0.1

Pensionfunds,insurance,etc. 1.0 0.2

PUBLISHING SECTOR 0.5 0.2

BUSINESS AND INDUSTRY 2.5 0.6

GOVERNMENT 3.0 1.0

Table 1.3. Market share of the designated operator

VOLUME Billions of items/year

%VALUE

Millions of USD/year

%

TRADITIONAL MAIL 9.9

DOMESTIC MAIL 9.8

Businesses

Publicutilities(1.0)

Financialsector(1.5)

Othersectors(2.0)

Individuals

INTERNATIONALMAIL 0.035

Businesses

Individuals

PARCELS

DOMESTIC PARCELS 0.09 - -

INTERNATIONAL PARCELS 0.001

TOTAL DESIGNATED OPERATOR 9.9

AVERAGE MULTIPLIER FOR TOTAL MARKET 6.5

TOTAL POSTAL MARKET 64.4

AVERAGE MARKET SHARE 15.4%

109

ANNEX 2 — Example Country NTable 2.1. Appropriate legal framework for the universal postal service

Legal nature Postalservicesareessentialpublicservices

Postal services

Mailreceiving,sorting,transportationanddeliveryoperationsfortheprovisionofbasicpostalservicesortraditionalmailservice,aswellasforexpressmailorcourierservices

Specificationoftheuniquefeaturesofexpressmailservice

Universal postal service

Includesbasiclettermail(letters,printedmatter,etc.)andpostalparcelservice,aswellaspostalfinancialservices

Universal postal service delivery conditions

Guidancewithrespecttostandardsofqualityandaccessibilityandgeneralcriteriawithrespecttogeographicanddemographicservicecoverage.Givestheregulatortheauthoritytoissueimplementingregulationsunderthepostalact

Universal postal servicefinancing

Reservedserviceareaforregularmailserviceforlettersandprintedmatterweighingupto500grammes.Priceschargedforletter-mailitemsandprintedmatterbyserviceoperatorsotherthanthedesignatedoperatormustbeatleastfivetimestheratechargedbythedesignatedoperatorforthefirstweightstepofdomesticlettermail

Market rules for postal service operation

Operationofbasicservicesincludedinthereservedserviceareabythedesignatedoperatorunderadirect,exclusivefranchise

Operationofnon-reservedbasicservicesunderalicensingarrangementagainstpaymentoffinancialcompensation

Operationofexpressmailorcourierserviceunderalicensingarrangementagainstpaymentoffinancialcompensation

Treatment of the designated operator

Legalstatusofagovernmententerprisegovernedbyprivatelaw,withthesamefreedomsasitsprivatecompetitors.Governmentassistanceforpartnershipbuilding,transfersoftechnologyandadequateinvestment

Regulatory system

Creationofanautonomousregulatorybodyoraunitwithintheregulatoryagencyforarelatedindustrywiththeauthoritytoissueimplementingregulationsunderthepostalactandtooverseeandsupervisemarketparticipants

Penalty provisionsStudyandcharacterizationofviolationsandoffencesrelatingtothedeliveryanduseofpostalservices,establishingadministrativesanctionsandcivilandcriminalpenalties

110

ANNEX 3

Data collection guide for an assessment of nationwide universal postal service

PART 1 General country data

1.1 Area ____________________________ square kilometres

1.2 Population_____________________________inhabitants Workingpopulation ___________________________%

1.3 Distributionofthepopulation Urban_______________________________________% Rural_________________________________________%

1.4. Populationdensity______________________inhab/km2 Urban_________________________________inhab/km2 Rural _________________________________ inhab/km2

1.5 Literacyrate __________________________________%

1.6 Lifeexpectancy______________________________years

1.7 Poverty rate __________________________________% Absolutepovertyrate(indigence)_________________%

1.8 Geo-politicalorganization(subdivision) ofthecountry____________________________________ Numberofeachtypeofsubdivision_________________ Totalnumberoftownsandvillagesor humansettlements________________________________ Numberofhouseholds____________________________

1.9 Majorcities(10largestcities). Populationofeachcity

Name Population Name Population____________ ____________ _____________ _________________________ ____________ _____________ _________________________ ____________ _____________ _________________________ ____________ _____________ _________________________ ____________ _____________ _________________________ ____________ _____________ _____________

1.10 Telephoneservice Numberoffixedandcellulartelephonelines_________ 1.11 Electricpowerservice Numberofcustomerconnectionsnationwide________

1.12 Percentageofhouseholdswith__________________%.

1.13 Watersupply Numberofcustomerconnectionsnationwide_________

1.14 Percentageofhouseholdswithpipedwater_________%.

1.15 Roads __________________________________________

1.16 Portsandairports_________________________________

1.17 Percapitaincome(USD)__________________________

1.18 Grossdomesticproduct (millionsofUSD)__________________________________

1.19 Economicgrowthrate(%) forthelast5years_________________________________ Projectionfornextyear____________________________

1.20 Yearlyimports(millionsofUSD)_____________________

1.21 Yearlyexports(millionsofUSD)______________________

1.22 Leadingexports__________________________________

1.23 Inflationrateforthelast5years____________________ Projectionfornextyear____________________________

1.24 Devaluation rate for the last 3 years _______________ Projectionfornextyear____________________________

1.25 Unemployment rate for the last 3 years _____________ Projectionfornextyear____________________________

1.26 Legalminimumwage (USDpermonth)_________________________________

1.27 ExchangerateperU.S.dollar_________________________

Page 1 of 6

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ANNEX 3

PART 2. Legal framework for the postal sector

2.1. CURRENTLEGISLATION 2.1.1. Postalorpostalserviceactoracts • Date(s)passed 2.1.2. Corecontentoflegislation • Listamaximumof5majorlegalprecepts establishedundereachpieceofcurrent legislation

2.2. DEFINITIONOFPOSTALSERVICESINEXISTING LEGISLATION 2.2.1. Accordingtothenation'sconstitution,whatis theroleplayedbygovernmentintheprovisionof publicservicesingeneralandpostalservicein particular? 2.2.2. Howispostalormailservicedefinedunder currentlegislation?

• Whatisthelegalnatureofpostalservices?• Whatclassesofservicesareincludedinpostal

service? 2.2.3. Aretherespecialclassificationsofservice? 2.2.4. Howaretheobligationsincurredunder theUniversalPostalConventionembodiedin domesticlegislation? 2.2.5. WhatwasthelastUniversalPostalConvention ratifiedinaccordancewithdomesticlegislation?

2.3. UNIVERSALPOSTALSERVICE• Contemplationofuniversalpostalservicein

currentlegislation• Includedservicesundercurrentlegislation• Systemofuniversalpostalservicefinancing

underexistinglegislation - Effectivenessofthefinancingmechanism - Long-termsustainability

• Regulationsgoverningservicedeliveryconditionsandstandardsofqualityfortheuniversalpostalservice

2.4. SERVICEOPERATINGSYSTEM 2.4.1. Extentofthemonopoly

• Totalorpartialmonopolywithexclusiverightstoserviceoperation

• Methodofestablishingexclusiverightsorreservedservices

• Deregulatedservicesorservicesopentofreecompetition

2.4.2. Serviceoperatingarrangement• Licences,withexclusivefranchises• Licences,withfreecompetition• Licensingconditionsandrequirements

2.4.3. Treatmentofthedesignatedoperator(DO)• Scopeofitspostalserviceobligations• TypesofauthorizationsheldbytheDOand

wayinwhichtheyareissued• Formsofcompensationforitsservice

obligations• Compliancebyprivatepostaloperatorswith

marketrulesforserviceoperation• Provisionsforcompliancemonitoringand

penaltyprovisionsforenforcementpurposes• LegalstatusoftheDOundercurrent

legislation 2.4.4. Service performance monitoring system

• Authoritytoexerciseregulatorypowers• Extentoftheseparationofregulatory

functionsandoperationalmatters• Stageofdevelopmentofregulations

governingtheDOandprivateoperators• Monitoringproceduresfortheoperationsof

theDO• Pricecontrolprovisions• Penaltyprovisions

Page 2 of 6

ANNEX 3

PART 3. Postal market

3.1 BREAKDOWNOFANNUALDEMANDFORPOSTAL ERVICE

3.1.1 Traditional regular mail service (Record the volume of items in one column and the value of business in another column, expressed in USD)

3.1.1.1 Publicutilitiessector(businesssegment– domesticmail)

3.1.1.1.1 Power 3.1.1.1.2 Water 3.1.1.1.3 Telephone(fixedandcellular) 3.1.1.1.4 Gas 3.1.1.1.5 Refusecollection 3.1.1.1.6 Other

3.1.1.2 Financialsector(businesssegment– domesticmail)

3.1.1.2.1 Banks.Chequeaccounts 3.1.1.2.2 Banks.Creditcards 3.1.1.2.3 Banks.Savings 3.1.1.2.4 Mortgageloans 3.1.1.2.5 Commercialcredit(vehicles,etc.) 3.1.1.2.6 Pensionfunds(statements) 3.1.1.2.7 Insurancecompanies

3.1.1.3 Publishingindustry(businesses)

3.1.1.4 Industry(businesssegment–domesticmail)

3.1.1.5 Business(businesssegment–domesticmail)

3.1.1.6 Government(businesssegment–domesticmail)

3.1.1.6.1 Central 3.1.1.6.2 Provincial 3.1.1.6.3 Municipal

3.1.1.7 Traditionalindividualmailtraffic (individualssegment–domesticmail)

3.1.1.8 Traditionalinternationalmailservice (businessesandindividuals–internationalmail)

3.1.1.8.1 Outbound 3.1.1.8.2 Inbound(notincludingthevalue oftheseitems)

3.1.2 Express mail or courier service (Includes express mail service for letter-mail items and postal parcels. Record the yearly volume of items and their USD value in two separate columns.)

3.1.2.1 Domesticexpressmailservice

3.1.2.1.1 Businesses 3.1.2.1.2 Individuals

3.1.2.2 Internationalexpressmailservice (outbounditems)

3.1.2.2.1 Businesses 3.1.2.2.2 Individuals

Intheabsenceofofficialfiguresormarketsurveys,thisdatawillneedtobeestimated.Asfaraspublicutilitiesareconcerned,countrydataonthenumberofcustomerswithpowerandwaterserviceconnectionsandtelephonelinesprovidesverycloseapproximationsoftheyearlyvolumeofmailtraffic.Likewise,thesupervisoryagencyforthefinancialsectorhasgeneralinformationonthenumberofactivechequeaccounts,thenumberofcreditcardsissued,etc.,whichcanbeusedasthebasisforestimatingthenumberofmailitemscontainingstatementsofaccount,creditcardbills,loanstatements,etc.,onamonthlybasisoratotherintervals.

Estimatesforbusiness,industryandgovernmentwillneedtobebasedonsoundcriteriaforapproximatingthevolumeofsuchmailtraffic.Businessandindustrygeneratealargevolumeofinvoicingitems,aswellasregularwrittencommunicationsandpromotionalandadvertisingmaterials.

3.2. MARKETSHAREOFTHEDESIGNATEDOPERATOR

Providedataontheannualvolumeandvalueofbusinessbythedesignatedoperator,expressedintermsofthevolumeofmailitemsprocessedandtheirUSDvalue,usingthesameformatasforthebreakdownofmarketdemandunderitem3.1above.

Calculateitsshareofmarketvolumeandvalue.

Page 3 of 6

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113

ANNEX 3

3.3. SUPPLYOFSERVICES 3.3.1. Traditionalmailservice(providedotherwisethan bythedesignatedoperator)

• Domesticservice - Numberofurbanandnationwideservice

operators - Breakdownofthedomesticmarketshare

ofmajorfirms - Dailyandannualoperatingvolume

(capacity)ofleadingserviceoperators(numberofitems)

- Monthlyinvoicingvalue(USD) - Leveloftechnologicaldevelopmentof

leadingserviceoperators - Productprices.Levelofpricecompetition - Qualityofservice.Standardofquality.

Deliverystandards - Businessandcompetitivepractices.

ConfirmwhetherthereareanyinstancesofpredatorypricingandunfaircompetitionaffectingtheDOinparticular

• Traditionalinternationalmailservice

Providethesamedataasfordomesticservice.Internationalmailserviceshouldbebrokendownintooutboundandinboundmailtraffic.Indicatewhetherthereareanyremailingoperationsandconsolidators.

3.3.2. Expressmailorcourierservice

Providethesamebreakdownasinitem3.3.1,bearinginmindthatdomesticserviceoperatorsmaybeinboththetraditionalmailbusinessandtheexpressmailorcourierbusiness.Alsokeepinmindthespecialcaseofmultinationalfirmsfurnishinginternationaldeliveryservice,providingdataontheirserviceofferingsandshareofthenation'spostalmarket.Examinetheleveloftechnologicaldevelopmentofdomesticandinternationalcourierfirmsandinvestmentsmadebymultinationalcouriercompaniesinthecountry.

PART 4. Designated operator

4.1. TYPEOFORGANIZATION• Legalstatusandgoverninglaw• Degreeofadministrativeandfinancialautonomy• Applicableprocurementproceduresforgoodsand

services• Applicablelabourlegislation

4.2. ORGANIZATIONALSTRUCTURE• Centralizedmanagement.Regionalheadquarters• Numberofworkers.Sizeofitsadministrativeand

operationalstaff.Sizeofitsoperationalstaffasapercentageofthetotalworkforce.Numberofmailcarriers.Academiceducationallevelofpostalworkers.Averageageofpostalworkers.Averagenumberofyearsemployed(seniority)

4.3. BUSINESSOPERATIONS• Businessareas.Shareofeachbusinessareain

businessvolume,income,andprofitsorlosses• Mainproductlinesineachbusinessarea

4.4. SERVICEOPERATINGPROCESSES• Traditionalmailservice

- Typesofoperatingprocesses.Useoftechnology,etc.,inmajorcities

- Installeddailyoperatingcapacityformailsortinganddeliveryoperations.Percentageofinstalledcapacitycurrentlyinuse

- Dailyandannualvolumeofbusiness - Productivity.Numberofitemsprocessedper

workerperyear• Expressmailservice• Otherbusinessareas

Page 4 of 6

114

ANNEX 3

4.5. ECONOMICPERFORMANCE

• Volumeofbusiness(lastfiveyears)

Millions of items per year20

13

2014

2015

2016

2017

Mail–lettersandprintedmatter

Mail–parcels

TOTAL MAIL

Courierservice–documentsandpackages

Total

Millions of USD

2013

2014

2015

2016

2017

Income

Expenditures

PROFIT/LOSS

4.6. INFRASTRUCTURE

• Numberofofficesoperateddirectlybythepostalservice

• Numberofofficesoperatedbycontractors• Numberofothertypesofoffices,ifany• Numberofpostofficeboxes• Numberofcollectionboxes(kerbside,inside

buildings)• Numberofmainsortingcentres• Numberofsatellitesortingcentres• Numberofvehiclesowneddirectlyand/orby

contractors• Numberofmotorcycles• Numberofbicycles• ITcapacity

- Inoperatingprocessesusingspecializedpostaltechnology

- Inoperatingprocessesusinggeneralcomputertechnology

- Inadministrativeprocesses

4.7. SERVICEDELIVERYCONDITIONS 4.7.1. Postalnetworkcoverage–Mailingservice

• Totalnumberofdomesticpostalnetworkoffices

• Totalnumberofcommunitieswithpostalservice

• Totalpopulationofservicedcommunities• Percentageofthenationwidepopulationwith

mailingservice

4.7.2. Postal network coverage – Delivery service• Totalnumberofdomesticpostalnetwork

officesprovidinghomedeliveryservice,includingspecialtypesofhomedeliveryservice(on-sitecommunitymailboxes)

• Totalnumberofcommunitieswithhomedeliveryservice

• Totalpopulationofservicedcommunities• Percentageofthenationwidepopulationwith

homedeliveryservice

4.7.3. Regularity of service• Standardsfortheregularityofmail

transportationserviceoutsidelargecities.Regularityofmailcollectionandtransportationserviceinsmallandmedium-sizecommunities

• Formalorinformalstandardsforoperatinghoursforretailofficesinlargeandintermediate-sizecitiesandsmalltownsandvillages.Numberofdaysaweekandhoursaday.Permanentandmobilepostoffices.Officesoperateddirectlybythepostalserviceandbycontractors

• Formalorinformalstandardsformailcollectionfromkerbsidecollectionboxesandmailboxesinsidebuildings

• Whereapplicable,standardswithrespecttomaximumdistancesbetweendwellingsandthenearestpostofficeorpointofservice.Maximumserviceareainsquarekilometresperfull-serviceoffice.Maximumnumberofinhabitantsperfull-serviceoffice

4.7.4. Speed• DOmaildeliverystandardsfordifferent

classesofserviceandlocations• Indicatedeliverystandardsinhoursordays

andthepercentageofmaildeliveredontime• Indicateanyguidelinesandcriteriaand

anytargetsestablishedbytheDOortheregulatoryagency

• MethodofinformingcustomersoftheDO'sobligationsintermsofmaildeliverytime

• Rateofcompliancewithcorrespondingobligations.Reliability

Page 5 of 6

115

ANNEX 3

4.7.5. Securityofoperatingprocesses• Standardsandindicatorsformailtheft,

lossesandmailtampering.Otherirregularities

• Postalsecuritysystem.Availablesecurityresourcesandassistance

4.7.6. Claimreportingsystem• Intakefacilitiesforcomplaintsand

claims• Establishedresponsetimes• Monitoringandtrackingofresponse

andsettlementtimes

4.7.7. Parcelservice• Domesticbusinessvolume.Volumeof

inboundandoutboundinternationalparcels

• Domesticandinternationalparceltrafficasashareofestimatedmarketvolume

• Operatingprocesses.Mailprocessing,sortinganddeliveryfacilities

• Deliverystandardfordomesticparcels.Deliverystandardforinboundinternationalparcels

• Streamliningofcustomsformalitiesforinboundinternationalparcels.AdequacyoftechnicalandITfacilitiesandstandards

• BusinessvisionandvisionoftheDO'sparcelserviceobligationsaspartofitsnationwideuniversalpostalserviceobligations

PART 5. Preliminary general proposal

5.1 WhatservicesdoyoufeelneedtobeincludedinthenationwideuniversalpostalserviceinadditiontothemandatorycoreservicesrequiredundertheUniversalPostalConvention?

5.2 Thus,whatservices,inyouropinion,shouldbeincludedinnationwideuniversalpostalservice?

5.3 Ataminimum,whatpercentageofthepopulationshouldhaveaccesstotheuniversalpostalservicesspecifiedunderitem5.2above?Withinwhattimeframeshouldthisuniversalservicetargetbemetandatwhatrateofprogress?

5.4 Accordingtoyouranswertothepreviousquestion,withwhatregularityshoulduniversalpostalservicehomedeliveryservicebeofferedinsmallvillagesandhamlets?

5.5 Whatdeliverystandardsshouldbeestablishedforcities,atthenationwidelevelandforruralareasinconnectionwiththeprovisionoftheuniversalpostalservice?Whatpercentageofmailvolumeshouldmeetthesestandards?Indicateenvisionedtrendsindeliverystandardsandthepercentageofon-timedeliveries.

5.6 Howdoyouproposeframingsectorpolicytofacilitatethedevelopmentofthenationwideuniversalpostalserviceandthedomesticpostalindustry?Presentthreeorfourproposedsectorpolicystatementswithrespecttothelegalframeworkandthepostalmarket,thedesignatedoperatorandinvestmentsinitsmodernizationanddevelopment,thefocusofpostalregulations,theroleofthepostalsectorinpromotingnationaldevelopment,andtheinvolvementofprivateenterprise.

5.7 Howwouldyouproposefinancingthenationwideuniversalpostalservicetoensurethesustainabilityofinvestmentsinitsmodernizationanddevelopment,withoutanyoutsidefundingofserviceoperations,underareservedserviceareamodelinwhichtheDOholdsexclusiverightstocorrespondingreservedservices?Howwouldthisreservedareabelegallydefined,byclassofservice,itemweightandsupportprice?

5.8 Whattypeoflegalframeworkforserviceoperationonthepostalmarketwouldbeengenderedbyyourproposedfinancingmechanism?Whattypesofsanctionswouldberequiredbythisfinancingmechanismtoensurecompliancewiththereservedarea?

5.9 Couldyouframeaproposalforpostalreformbasedonuniversalpostalservicefinancingneeds?Whatformwouldsuchaproposaltake?

Page 6 of 6

SECTION IIIUniversal postal service financing

119

Thereiscurrentlyawiderangeofavailableoptionsforfinancingtheuniversalpostalservice.However,thechoiceofafinancingmechanismshouldbebasedoncertainfundamentalprinciplesgroundedinconditionsatthecountrylevel.

Thedeliveryoftheuniversalpostalserviceisanobligationwhosefulfilmentmustbeguaranteedbythegovernment,whichwillneedtoensuretheavailabilityoffundingformaintaininguniversalpostalservicesandtheexistenceofcorrespondingfinancingmechanisms.

Thepurposeofthismoduleisnottodelveintoalltheeconomicmechanismsforfinancingtheuniversalpostalservice,butsimplytooutlineafewsimple,practicalstepsforaccomplishingthistask.

Moreover,regardlessofthechoiceofauniversalpostalservicefinancingmechanism,asarule,therearecertainpolicydecisionswhichneedtobemadebeforeundertakingtheframingofanactionstrategy.

Thereareongoingdiscussionsallovertheworldwithrespecttothebestfinancingmethodsforthispurpose.However,availableoptionsaremorelimitedinmanydevelopingcountries,wherethecharacteristicsofthepostalmarketand,moreimportantly,problemsinenforcingexistingrulesandregulations,eitherduetotheabsenceofregulatoryagenciesor,inmanycases,duetotheweaknessesofexistingregulatorystructures,ruleouttheuseofeconomicfinancingmodelssubjecttoexternalcontrolprocedures.

Inindustrializedcountrieswithmatureregulatoryframeworks,discussionsprimarilyrevolvearoundtheextensionoftheuniversalservice,asneedsareconsideredtohavealreadybeencovered.Inaddition,decisionstocommercialize–andattimesfullyprivatize–designatedoperatorsareintheinterestofreducingthecostsoftheuniversalpostalservice,especiallythoserelatedtogeographiccoverage.

Indevelopingcountries,thesituationisverydifferent:theuniversalpostalserviceisnotyetarealityforall.Itisthereforeimportantnottotrytoextrapolatefromdiscussionstakingplaceinotherregionswithverydifferentrealities.

Whatisimportantisthefactthat,inallcountries,eveninthemostprogressivecountries,governmentclearlyneedstoplayaleadingroleinthisareaandtomakenecessarydecisionsinitscapacityastheguarantoroftheuniversalpostalservice.Suchdecisionswillserveasthefoundationforensuringthecontinuityofuniversalpostalservicesubjecttoestablishedserviceperformancecriteria.

Thus,theissueofuniversalpostalservicefinancingistiedinwithbotheconomicandpoliticalconsiderationsand,inbothcases,noteveryonewillnecessarilybehappywithensuingdecisions.However,itisalsoclearthatwhatisimportantistohaveasystemprovidinglong-termstabilitywhilesimpleenoughsothatitcanbeeffectivelyimplementedwithouttheneedfortoomanycontrols.

Onethoughttobekeptinmindthroughoutthisprocessisthatthebestfinancingmethodisonewhich,whileensuringthedeliveryoftheuniversalpostalservice,alsogivesthedesignatedoperatorenoughfreedomofactiontoexpediteitsowninternaldevelopment,forthebenefitofallinterestedstakeholders.

III 1.2

Cost assessment

criteriaThebestwaytotreateconomicissuesiswithcaution,basedonacarefulconsiderationofconditionsatthelocallevel.

Morespecifically,inaddressingeconomicissuespertainingtotheuniversalpostalservice,itisimportanttoneitheroverreachnorunderreachintermsofservicetargets,giventhedirectimpactofeitherextremeonthecostandeconomicfeasibilityofservicedelivery.Itisequallyimportanttobearinmindtheenvironmentsurroundingtheoperationoftheproposedservices.Inthecaseoftheuniversalpostalserviceindevelopingcountries,seriousweaknessesexistintheorganizationofthedesignatedoperatorandinexistingrulesgoverningtheoperationofthepostalmarket.

Acommonquestionraisedbygovernmentofficialsandotherstakeholdersindiscussingdecisionswith

Universal postal service costs

III 1

III 1.1

The importance of universal

postal service financing

120

respecttotheuniversalpostalserviceis:"Howmuchdoestheuniversalpostalservicecost?"Thepreparationofatimely,accurateresponsetothisquestionrequiressoundcostassessmentcriteriaacceptedbytheeconomicauthorities,aswellasacleardefinitionofuniversalpostalservicecosts.

Thus,universalpostalservicecostsaretobeconstruedas:

The total cost to the designated operator of providing the services included in its universal postal service obligations

Thissimplecriterionandapproachtothecostsoftheuniversalpostalservicehashelpedmanyindustrializedanddevelopingcountriesaccuratelyassesstheeconomicandfinancialneedsengenderedbytheprovisionoftheuniversalpostalservice.Allrelatedcostsmustbetakenintoaccount,namelythefixedandvariableanddirectandindirectcostsofallservicesincludedinthegovernment'suniversalpostalserviceobligations,aswellasthecostofconductingcorrespondingoperating,businessandadministrativeprocessesinallgeographicareas.

Occasionally,certainfacetsandcharacteristicsoftheuniversalpostalservicecancauseconfusion.Theuniversalpostalserviceisoftenmistakenlyequatedwithpostalservicesrenderedinhigh-costgeographicareas,suchaslow-trafficruralareasorlow-incomeormarginalizedpopulationcentres.Thissameerrorisalsomadeinaddressingitscosts,producingflawedproposals.Insuchcases,calculationsofuniversalpostalserviceeconomicrequirementstakeintoaccountonlythecostofserviceoperationincertainremoteareasorlow-incomecommunitiesandnothingelse,understatingtheneedforincomeandinvestmentandlimitingthefutureexpansionoftheservicenetwork.

Insomecountries,lookingatthemarketshareofthedesignatedoperatorandweaknessesinservicedeliveryconditions,thetotalpresentcostsofthedesignatedoperatordonotevencomeclosetoaccuratelyreflectingthecostofprovidinganacceptablelevelofuniversalpostalserviceinlinewithnationwideneeds.Thus,itisimportanttobearinmindtheneedtoconsiderboththecurrentcostsoftheoperatorandtheestimatedcostsofagivenprojectedleveloftheuniversalpostalservice.

Inapproachingthestudyofuniversalpostalservicecosts,bearinmindthatcostsare a controllable factor of productionand,assuch,propercostmanagementandcontrolisnotonlyanecessity,butarequirementfortheoperationoftheuniversalpostalservice.Thus,universalpostalservicecostsaretiedbothtorequiredservicedeliveryconditionsandtoestablishedproductivityandefficiencytargetsforthedesignatedoperator.

Foryears,terminalduesratesforinternationalmailhavebeengraduallymovingclosertoactualcostsandcountry-specificrates,makingsoundcostmanagementandcontrolanabsolutenecessity.Asaresult,UPUcountrieshaveagreedtousecost-accountingsystems.

121

Costcalculationsrequiredtodeterminetheuniversalpostalserviceshouldconsiderthefollowingcostfactors:

• Total present cost of basic services: Thisisthepresentcostofoperatingthecurrentservicenetwork,whichisconsideredthebaselinescenario,accordingtothecurrentgeographiccoverageofthepostalnetworkandtheregularityofcorrespondingservices.

• Total cost of the projected level of universal postal service (recommended): Thisincludespresentcosts,plustheestimatedcostofaddingservices,extendingthepostalnetwork,steppingupthefrequencyofserviceandofferingagivenlevelofqualitywithaspecific,normallymuchlarger,operatingcapacity.

• Estimated value of investments and amortization costs: Basedon5-and10-yearindicativeuniversalpostalservicedevelopmentplans.

• Calculations of prices and market value: Calculationsofprices,marketvalueandtheprojectedshareoftheuniversalpostalserviceoperatorindifferentareasofpostalservicetoestimatethevalueoffutureincomeforfinancingtheoperationanddevelopmentoftheuniversalpostalservice.

Theso-calledtotal cost approachisasimplemethodandgoodwayofensuringsounddecisionmaking.Thereareotherequallygoodapproaches,buttheyaresomewhatmorecomplicated,withmorerequirements.Examplesincludethestandardallocatedcost,netavoidedcostandentrypricingapproaches,amongothers.However,sincetheseotherapproachesrequireanumberofconditionswhichsimplydonotexistinmostdevelopingcountries,itmakesnosensetodelveintotheoreticexplanationsofwhatmaywellbeirrelevantmethodsandprocedures.

III 1.4

Future challenges

Inthefuture,costsandtimely,accuratecostdataaregoingtobecrucialtouniversalpostalservicemanagement,bothforthedesignatedoperatorandfortheregulatoryauthority.

Thedesignatedoperatormustnotonlysuccessfullymeetservicedeliveryconditionsimposedonitunderthepostalactanditsimplementingregulationsandenforcedbytheregulatoranditscustomers.Itmustalsocopewiththesurroundingpostalenvironmentandwithcurrenttrendstowardsgrowingmarketliberalization,strongercompetition,themoreintensiveuseoftechnologyandincreasingproductsubstitution,requiringhighlyspecializedandprofessionalmanagementpractices,aswellashighlevelsofproductivityandefficiency.

Therequirementsimposedbypostallegislationpresentapermanentchallengetothedesignatedoperatortosuccessfullymanageopposingfactors,suchastheneedtoexpandthepostalnetworktokeeppacewithnationwidepopulationgrowth,higherstandardsofquality,wagehikesand,ingeneral,risingcostsinthefaceofexpectedfuturetrends–suchasshrinkingrevenuesowingtodecliningmailvolumesasaresultofelectronicsubstitution(mainlyinvoicingsystems)andfallingpricesinresponsetopressurefromcompetition.

Allthisrequirestheeffectivemanagementofeffortstopromotetechnologicaldevelopmentandstrengthenproductivity,efficiencyandtheaddedvalueofpostalservices.Inadequatetechnicalandstrategicmanagementcouldthrowoffallcorrespondingforecasts.

III 1.3

Cost calculations

123

Ifthefocalpointofthelegalframeworkforthepostalsectoristhetreatmentoftheissueofthenationwideuniversalpostalservice,thecoreissuetobedecidedwithrespecttotheuniversalpostalserviceisthemeansoffinancinggovernmentaluniversalpostalserviceobligations.Thisdecisionispivotal,asthebasisfortheestablishmentofmarketrulesfortheoperationofpostalservices.Itisadecisionaffectingprivatebusinessinterestsand,insomecases,couldbecomeapoliticaldecision,underminingtheresolvetomeetcountryneeds.Itdeterminesthelimitstobesetonprivateenterpriseinpostalbusinesssegmentsopentofreecompetition.

Ifthefocalpointofthelegalframeworkforthepostalsectoristhetreatmentoftheissueofthenationwideuniversalpostalservice,thecoreissuetobedecidedwithrespecttotheuniversalpostalserviceisthemeansoffinancinggovernmentaluniversalpostalserviceobligations.Thisdecisionispivotal,asthebasisfortheestablishmentofmarketrulesfortheoperationofpostalservices.Itisadecisionaffectingprivatebusinessinterestsand,insomecases,couldbecomeapoliticaldecision,underminingtheresolvetomeetcountryneeds.Itdeterminesthelimitstobesetonprivateenterpriseinpostalbusinesssegmentsopentofreecompetition.

Indevelopingcountries,onemayfindcompetingoperatorswithverydifferentinterests.Whilethedesignatedoperatorisrootedinpublicpolicyandestablishedforthepurposeofprovidingtheuniversalpostalservice,privateoperatorsarenaturallystrictlyprofit-based.

Theprivatesectorwouldpreferthattherebenorestrictionswhatsoeveronconductingbusinessinthepostalsector.Itwouldalsopreferthatitnotberequiredtopaycompensationfortherighttooperateastrategic,essentialpublicserviceforthecountry,andithasnointerestinoperatinginlesslucrativegeographicareaswhichcouldcauseitlossesorloweritsprofits.

Accordingly,fromastrictlybusinessstandpoint,asystemofmarketorganizationwithalegalframeworkimposingcertainrestrictionsdesignedtoensurethefulfilmentofgovernmentaluniversalpostalserviceobligationswillproduceopposingpositionsandpressures.However,asdiscussed,settingconditionswithrespecttotheuniversalpostalservicealsomeanslookingatavailableoptionsfromapoliticalperspective.Alldecisionscannotbebasedsolelyoneconomicconsiderations.Thereisalwaysapoliticaldecisiontobemadeand,whateversuchdecisionmaybe,itwillnotnecessarilybeneutral.

Thefinancingofthenationwideuniversalpostalservicecanbemadeeasierormorecomplicatedbyaseriesoffactorswhich,forthemostpart,canbeadaptedtomeetexistingneeds,suchas:

• Level of development of the designated operator:Strongorextremelystrongdesignatedoperatorslikethosefoundinindustrializedcountriesfacilitatethefinancingoftheuniversalpostalserviceandpostalreformprocesses.Incontrast,weakorveryweakoperatorsarenotinapositiontofinancetheuniversalpostalservicesustainably.Thisisaviciouscircleinthat,asthedesignatedoperatorgrowssteadilyweaker,theuniversalpostalservicealsoweakens–animportantreasonformountingreformeffortswithaviewtothelong-termstrengtheningofthedesignatedoperator,tofacilitatetheimplementationofanappropriateservicefinancingmechanism.

• Organization of postal market operations: Bothdevelopingandindustrializedcountrieswithmodernmarketrulesandareservedserviceareaforthedesignatedoperatorhavesucceededinexpandingpostalservicesandensuringthelong-termfinancialself-sufficiencyofthedesignatedoperator.

Thelackofmodernpostallegislationandregulationsandtheunenforceabilityofweakrulesandregulationsgoverningoperationsonthepostalmarketimposeseriousconstraintsontheprovisionoftheuniversalpostalservice.

Inadditiontothesefactors,thereareotherconsiderationswhichneedtobetakenintoaccountinmakingdecisionswithrespecttothefinancingoftheuniversalpostalservice.

Modes of financing

III 2

III 2.1

Factors shaping

financing decisions

124

• Otherinfluencingfactors:

- Investment.Lackofinvestmentandalimitedinternalcashgenerationcapacityatthenationalgovernmentlevel.

- Technology. Serioustechnologicalunderdevelopmentwithrespecttotheuseofpostal,informationandcommunicationstechnology.

- Regulatory function.Limited,ifany,exercise ofgovernmentregulatoryfunctions.

- Level of national development. Higherlevelsofnationaldevelopmentbolsteredbyinfrastructurefactorssuchaspostalserviceshelpprovidebetterinsightsintoexistingneedsandpressuretocreateanenablingenvironment.

Inthecurrentandfuturepostalenvironmentbasedonamarketeconomy,globalizationandmarketliberalization,thesituationofnationalpostaladministrationsofbothindustrializedanddevelopingcountriesisextremelydifferentfromwhatitwas15,30or40yearsago,makingeconomicmodelsdevelopeddecadesagoineffectiveandobsolete.

Itisextremelycommonforgovernmentstofindthemselveswithoutanyavailablefundingtoallocatetothefinancingoftheuniversalpostalservice.Theirmainargumentisthattheydonotevenhaveenoughfundstomeetmorecompellingsocialdevelopmentneedsintheareasofhealth,education,security,etc.,whilepostalservicesarebusinessoperationswhichshouldbeself-sustaining.

Governmentneedstoriditselfofallavoidableeconomicburdens,whichmeanseliminatingallocationsofnationalbudgetfundstocoverpostalserviceoperatingdeficitsassoonaspossible.Thus,itislookingtoestablishaviable,sustainableself-financingmechanismfortheessentialserviceswhosedeliveryitisduty-boundtoensure.

Intheory,thereisawidearrayofpossibleuniversalpostalservicefinancingmodels.However,fromapracticalpointofviewandinthelightofconditionsatthecountrylevelandtheglobalenvironment,itwouldbepointlesstotakethetimetoexpandoncommonmodelswhoseeffectiveimplementationandsuccessfulperformanceisaremotepossibilityatbest.Pastexperienceinbothindustrializedanddevelopingcountrieshasshownincaseaftercasethatthe most successful universal postal servicefinancingmodelisafinancingmodelbased on funding generated by the operation ofreservedservicesclearlyspecifiedandlegally protectedunderalegalframeworkfortheorganizationofthepostalmarket,complementedbycontinuingreformeffortstargetingthedesignatedoperator,postalservicesandthesectoringeneral.

Historically,thepublicpostalservicewasfinancedunderagovernment-heldmonopoly.Thispostalmonopolyconsistedinagroupofreservedpostalservicesprovideddirectlybythegovernment.Generally,thereservedareawaslimitedtolettermail.Postalmonopolieshavebeengraduallyshrinkinginmanycountries,withtheintroductionoflimitsonweightorcustomerpricing,andwiththeliberalizationofservicessuchasinternationaloutboundmail.Thishasbeentheresultofpressurefromprivatesectorcompanieswantingashareinthepostalmarket.

Thebiggestchangewastheliberalizationofthevalue-addedexpress,orcourier,services.

Someindustrializedcountriesestablishedfinancingmodelswithletter-mailservicedesignatedasareservedarea,inallcaseswithpriceprotectionprovisionstopreventpredatorypricingbyprivatecompetitors.Floorpricessetforprivateserviceoperatorswerethreetofivetimestheratechargedbythedesignatedoperator.

Atthecentreofsuchmodelsinthecaseofallindustrializedcountrieswasastrongdesignatedoperatorwithadominantmarketpositionforlettermail(a90%to100%marketshare)andanongoinginvestmentprogramme.

Indevelopingcountriesthesituationwasdifferent.Facedwithalackofinvestment,mostdesignatedoperatorsbecameobsolete,andprivateoperatorssteppeduptomeettheneedsofachangingsociety–andthoseoflargemailersinparticular.Thisnewcompetitionwasnotaccompaniedbycorrespondingchangestothelegalframework,whichinmostcasesdidnotprovideadequatemechanismstoprotectthepostalmonopoly.Theresultwasanineffectualreservedarea.

Eventoday,manycountriesstillhaveareservedareaforthedesignatedoperator,butanenablingenvironmentneedstobesetuptoensureitscontinuedviability,sustainedmainlyby:

- postallegislationandregulationsensuring thatthemodelisstrictlyadheredto;

- rapiddevelopmentofthedesignatedoperatoranditspostalservicesthroughreformprocesseslayingthegroundworkfortheinstitutionofsoundbusinesspracticesandforongoinginvestmentandtechnologicaldevelopmentprogrammes.

III 2.2

Financing mechanisms

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Inmostcases,atleasttemporarily,thereservedareacombinedwithpriceprotectionmodelmayneedtobeunderpinnedbyinfusionsofgovernmentfundinguntilthepostaloperatorreachesthebreak-evenpointandasurplusposition,pendingthecompletionofpreliminaryinvestmentprojects.

Thefollowingparagraphsoutlinethefeaturesofthethreemainfinancingmodels:governmentfunding,industryfundingandreservedservicearea.

MODEL 1 – GOVERNMENT FUNDING

Inthismodel,thegovernmentisresponsibleforcoveringanydeficitrelatedtotheoperationoftheuniversalpostalservice.Thisfinancingmechanismisdifficulttoimplementinthefaceoflimitedgovernmentfundsandconflictingpriorities.Ithasbeenusedbydesignatedoperatorsinindustrializedcountrieswithoutmuchsuccess.Thelong-termsustainabilityofthismodeoffinancingisdoubtful.

However,itcouldbeusedintheearlystagesofreformprocessesandduringtransitionperiodstotemporarilybolsterdevelopmentandmodernizationprogrammesandprojects.Itcouldalsobeusedasanalternativesourceoffundingforthedesignatedoperatorinunforeseenemergencysituations.Itisunsuitableforresolvingproductivity,efficiencyandcompetitivenessissuesandinconsistentwiththegoalofbuildinganindependent,business-driven,financiallyself-sufficientoperator.

Whileitcouldberegardedasapaymentsystemfortherenderingofmandatoryserviceswhosedeliveryisincumbentuponthegovernment,thisfinancingmodeltendstorequireincreasinggovernmentfundingtokeeppacewithrisingcosts.Withoutsupportinglegislation,thismodeldoesnotprovidelong-termsecurityandisconstantlysubjecttochangesinpoliticalleadership.

However,theexperienceofindustrializedcountriesthathavecompletelyeliminatedthereservedareashouldnotbeoverlooked.Insomecases,awarethattheuniversalpostalservicemightnotbefinanciallyself-sufficient,governmentshaveestablishedmanagementcontractsthroughwhichtheymaysubsidizetheuniversalpostalserviceasawhole,orprovidefinancialsupportforagivenservicesothattheoperatorcankeepratesdowninlinewithpublicpolicy.

Whateverthecasemaybe,fundsarenotprovidedtodesignatedoperatorsindiscriminately.Thegovernmentmayprovidefinancialsupportforcertainservices,butonlyonthebasisof:

• costaccountingshowingtherealcostofprovidingtheuniversalpostalservice;

• efficientmonitoringbytheregulatorconfirmingthefulfilmentoftheuniversalserviceobligation.

MODEL 2 – INDUSTRY FUNDING

Underthisfinancingmodel,privatepostaloperatorspaytaxesorfeesfortherighttooperatepostalservices.Suchleviesmaytaketheformoffixedorvariablesumspayabletothedesignatedoperator,theuniversalpostalserviceregulator,universalpostalservicedevelopmentfunds,etc.,subjecttodifferentpaymenttermsandconditions.

Thismodelisusedinthetelecommunicationssectorandgenerallyinvolvesthecreationofafundfortheuniversalservice.Itsenforcementisbothdifficultandcostlytocontrolandiseasilyevaded.Arequirementtomakepaymentstoacompetingserviceproviderisnotsomethingwelcomedbyotherpostaloperatorsorbycustomers,asitisseenasyetanothertaxburden.

Inanycase,thismodelrequirestheregulatorybodytomonitorprivateoperatorsintermsoftheirrevenue,andthedesignatedoperatorinthefulfilmentofitsuniversalserviceobligation.

MODEL 3 – RESERVED SERVICE AREA

Areservedserviceareaisaspecificsegmentofthecountry'spostalmarket(i.e.coveringspecificservicesorproducts)forwhichthedesignatedoperatorholdsanexclusivefranchiseasthebasisfortheeffective,sustainablefinancingofthispublicservicewhoseprovisionistobeguaranteedbythegovernment.

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Thereservedareamustbeclearlyandspecificallydelineatedintermsofthreecoreelements,namelyclassofservice,itemweightandpriceprotection.Thesethreebasicelementsforthedelineationandestablishmentofareservedserviceareamustbejointlyandsimultaneouslyembodiedinthedecisionestablishingthismodel.Theabsenceofanyoneofthesethreeelementswouldmakeitsdelineationincompleteandundermineitseffectiveimplementationonthepostalmarket.

a. Class of service. Inestablishingareservedservicearea,thegovernmentwillneedtodecidewhatclassorclassesofpostalservicearetobefurnishedsolelyandexclusivelybytheofficialpostaloperator.

Normally,thereservedserviceareaincludesbasicpostalservicesforletter-mailitemsowingtotheirimportanceandvolumeandtheavailabilityofnationalmarketdataontrendsinthistypeofmailtraffic.Letter-mailitemsareitemscontaininglettersandprintedmatter,withlettersconstruedtomeananyandallpersonalandbusinesscommunications,includingbills,receipts,businesspapersanddocuments,andprintedmatterconstruedtomeananyandalltypesofprintedmaterials.

Theactualnumberofservicesincludedinthereservedareawilldependoncountryneedsfortheassuranceofsufficientrevenuestocoveralluniversalpostalservicedeliverycosts.Thevolumeandmonetaryvalueofsuchservicesarequantifiedseparatelyandasawhole,inrealterms,basedonnationalpostalmarketdataasthebasisforestablishingthenecessaryscopeofthereservedservicearea.

b. Item weight.Thedecisiondelineatingthereservedserviceareamustbeextremelypreciseinordertominimizeanyoverstatementandunderstatement;thisrequiresspecifyingtheweightlimitsofincludeditems.Theindividualandaggregatedataresultingfromthespecificationofeachincludedclassofserviceandcorrespondingitemweightlimitwillallowforanaccurateassessmentofthevalueofthepostalmarketsegmenttobereservedforthedesignatedoperatorunderanexclusivefranchisetoensurethegenerationofsufficientrevenuesforthesustainablefinancingofthenationwideuniversalpostalservice.

Lookingatpostalserviceoperationsincountrieswithareservedservicearea,wefindthatthesizeofthereservedareavariesaccordingtothematurityofthepostalmarketandthelevelofdevelopmentofthedesignatedoperator.Indeed,thesizeofthereservedareais,withoutexception,inverselyproportionaltothelevelofdevelopmentofthedesignatedoperatorandthematurityofthepostalmarket:amoremodern,high-tech,highlydevelopeddesignatedoperatorandmorematurepostalmarketrequireasmallerreservedserviceareaandviceversa.

c. Price protection for reserved services. Serviceoperatingconditionsonthepostalmarketrequirepriceprotectionforservicesreservedforthedesignatedoperatortoensuretheeffectiveexerciseofitsexclusiverightstothatmarketsegmentandminimizeitsvulnerabilitytopotentialunfaircompetitionandpredatorypricingbyotherpostalserviceoperators.

Tothisend,regulationsdelineatingthereservedserviceareawillneedtoestablishaspecificfloorpriceforpostalservicesfurnishedbyprivateoperators.

Thisfloorpriceistobeexplicitlyspelledoutinaprovisionsettingtheminimumpricetobechargedbyotherpostaloperatorsfortheirservicesataspecificnumberoftimes(3,5or10times)thepricechargedbythedesignatedoperatorforthatserviceoritem.

Thispreventsotherpostaloperatorsfromencroachingonthemarketsegmentreservedforthedesignatedoperatorwithsimilarordisguisedservices.

Definingandestablishingthereservedserviceareaintermsofthesethreecoreelementscanhelpensurethesimple,effective,sustainableoperationoftheuniversalpostalservicefinancingmodel.Areservedserviceareacanbeestablishedforalimitedorindefinitetimeperiod.Ineithercase,thelegalinstrumentwillneedtobeflexibleenoughtoenablethegovernmentandtheregulatoryauthoritytoadaptitsprovisionstochanginguniversalpostalserviceneedsandtrendsonthepostalmarket.

Anadjustable,temporaryreservedareacanhelpmotivatethedesignatedoperatortospeedupitseffortstoimproveandexpandservice;reducecosts;andimproveitsproductivity,efficiencyandservicequality.However,anysuchadjustmentsmustbeinkeepingwiththelaw,toensurethattheydonotundermineorjeopardizetheviabilityandsustainabilityofuniversalpostalservicefinancinginanyway.Thisfinancingmechanismalsorequirestheconscientiousimplementationofplansandprojectsforthemodernizationanddevelopmentofuniversalpostalservices.

Itshouldbenotedthatsupportforthisfundingmodelisfading.Inthecurrenteconomy,monopoliesarenotviewedfavourably,and"reservedarea"isinfactaeuphemismformonopoly,whichisoftenseenasawayofguaranteeingfundingforaninefficientgovernmententity.

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Inindustrializedcountrieswherethepostalmarkethasbeenliberalized,thedesignatedoperatorhasmaintainedadominantmarketpositiononthebasisofitsreliabilityandgoodpublicimage.Atanyrate,indevelopingcountries,monopoliesarenotrealistic,mainlybecauseoftheinefficiencyofdesignatedoperators.Moreover–andthismustbestressed–thereisnopointinenshriningareservedareainlegislationifmechanismsarenotinplacetoensurecompliance.Wheregovernmentsfaceserioussecurityorhealthproblems,forexample,theycannotbeexpectedtodedicatetimeandresourcestopursuingillegalprivateoperators.

Onethingisclear:whateverfundingmodelischosen,thefundingshouldonlybeusedtofinancetheuniversalpostalservice,andnotallactivitiesofthedesignatedoperator.

Asasidenote,somecountrieshavehadproblemswithmisinterpretationsofthedifferencebetweentheconceptsoftheuniversalpostalserviceandareservedservicearea.Thismodulehasdweltatlengthontheconceptoftheuniversalpostalservice,itsbindingforceasfarasgovernmentisconcerned,andtheobligationincurredbysignatoriesoftheUniversalPostalConventiontoclearlydefineandmapoutuniversalpostalservicesundertheprovisionsofdomesticlegislation.Thus,universalpostalserviceisaspecificgovernmentobligationtothegeneralpublicwithrespecttotheprovisionofpostalservices.

Theconceptofareservedserviceareaisanotherthingentirely.Itreferstoafinancingmechanismunderwhich,asexplainedearlierinthissection,aspecificsegmentofthepostalservicemarketisreservedforthedesignatedoperatorunderanexclusivefranchisetoensurenecessaryfundingforthefulfilmentoftheuniversalserviceobligations.Thereservedareashouldnotbeequatedwiththebasicpostalservicestobeguaranteedbythegovernment.

III 2.3

Decisions on universal

postal service

financingTheobjectiveofdecisionmakingwithrespecttoasustainableuniversalpostalservicefinancingmechanismistoestablishexactlyhowthegovernmentcanbeabsolutelycertainofensuringthegenerationofnecessaryrevenuestocoverthecostoftheuniversalpostalservice,whichisalsothebasisforensuringthefulfilmentofitsservicedeliveryobligations.

Thefollowingisalistofsinequanonconditionsforsounddecisionmakingwithrespecttothisissue.

a. Studiesanddataonnationwidepostalactivitiesandcurrentlegislationandoperations.Projectedlegislationandoperationsforlegalreformpurposesandfortherestructuringofthepostalsectorfortheestablishmentofnationwideuniversalpostalservice.

b. Quantitativeandqualitativedataandstudiesonservicesupplyanddemandonthenation'spostalmarket.Breakdownofdataonthevalueandvolumeofthepostalmarketbyclassofservice,customersegment,etc.

c. Studiesanddataontheoperationaldevelopmentstatusandfinancialsituationofthedesignatedoperatoranddataonitslevelofdevelopmentandmodernizationrequire-ments.Developmentandbusinessplansforthedesignatedoperator.

d. Studiesanddataonprojecteduniversalpostalservicecostsatthecountrylevel.Costestimationmodel.

Armedwiththisdata,thegovernmentcouldestimatefundingneedsforaminimumof10yearsasthebasisfordesigningaproposedfinancingmodelfordiscussionandeventualapproval.

Sincesocio-economicconditionsinmanydevelopingcountriesandprevailingconditionsinthepostalsectormakeuniversalpostalservicefinancingbasedongovernmentfundingorcontributionsfromprivateoperatorscomplicated,butnotimpossible,afewremarksonthedecision-makingprocessfortheestablishmentofauniversalpostalservicefinancingmechanismbasedontheso-called"reservedarea"modelwouldappeartobeinorder.

Class of service

Item weight

Price protection

Services reserved for the deignated operator

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Themainfoundationforeconomicstudiesofthe"reservedarea"universalpostalservicefinancingmodelis,ontheonehand,marketdataandstudies,totalnationwideuniversalpostalservicecostdataandacorrespondingcostestimationmodeland,ontheotherhand,costcalculationsforprojecteduniversalpostalservicesforthefirstandlastyearsofthe10yeardevelopmentplanandmarketdataestablishingtheshareofthemarketforbasicletter-mailservice(lettersandprintedmatter)generatingsufficientrevenuestocoversuchcosts.Costsincludeoperatingcostsaswellastheamortizationcostofinvestmentsunderthedevelopmentplan.Basedontheseguidelines,thetaskofdecidingonauniversalpostalservicefinancingmodelcanbesummedupinthefollowingsequenceofactivitiesandoperations:

• Collectionofdataonthepostalsector,marketanddesignatedoperator;theuniversalpostalservicecostestimationmodel;andcurrentandprojectedcosts.

• Consultationsonnecessarystudieswithgovernment,designatedoperatorandregulatoryagencyofficialsinvolvedintheeconomicstudyprocessforthedelineationofthereservedservicearea.

• Conductoftechnicalstudiestoestablishthescopeofthenecessaryreservedservicearea.

• Articulationandsubstantiationofthefindingsfromtheaforesaidtechnicalstudies.

• Draftingoflegalprovisionsestablishinganddelineatingthereservedareaanddefiningitsthreecoreelements,namely:a)classofservice;b)itemweight;andc)priceprotection.

• Submissionofthefinancingmodeltothepartiesinchargeofapprovingallcorre-spondingworkandmakingofficialdecisions.

Indecidingontheuniversalpostalservicefinancialmechanism,governmentofficialsandlaw-makersneedtobemindfuloftheirspecificresponsibilitytodischargegovernmentalobligationstoensurethelong-termsustainabilityofuniversalpostalservice.Financingisaquantitativefactorand,assuch,needstobeexpressedinspecificterms,orintermsofincome,costandmarketvalue,volume,etc.Sound,objectivedecisionmakingrequiressimulationsandprojectionsofspecificscenariosbasedonallavailabledata.

Theyalsoneedtobeawareoftheneedtopromptlydispelthedoubtsandrelievetheoutsidepressurelikelytobeengenderedbyadecision-makingprocessonamatterasimportanttothelegalframeworkforthepostalsectorandtheprovisionofuniversalpostalserviceasthechoiceofasustainableservicefinancingmechanism.Examplesofcommonfactorshamperingsuchdecision-makingprocessesinclude:

• movementstoderegulatepostalservices;

• pressurefromprivateinterestsclaimingthatsuchdecisionscouldstifleprivateinitiativeandinvestment;

• theviabilityofthedesignatedoperatoranditsabilitytoovercomemajorproblemsbysteppingupmodernizationefforts.

Thederegulationofserviceindustriesingeneralandofpostalservicesinparticularisarealityinmanycountriesbutneedstobeaccomplishedthroughacarefullyplanned,well-organizedprocess.Deregulationindevelopingcountriescannotbeallowedtoattackthelegalsystemandbasichumanrights.

Thoughpostalreformeffortshavemadefasterprogressandbeenmoreeffectiveinindustrializedcountriesaspartofcomprehensivereformprocesseswithprovisionsfortheregulation,restructuringandmodernizationofthedesignatedoperator,whereserviceoperationonthepostalmarketiswellorganizedandsubjecttosupervision,thisdoesnotmeanthateffortstoraisedevelopingcountriestothissamelevelneednotconsiderthefutureconsequencesofsuchanundertaking.

Toensuregoodresults,themostadvisablecourseofactionfordevelopingcountriesistocapitalizeondirectexperiencesandbestpractices.Thechallengeofensuringthelong-term,sustainablefinancingofnationwideuniversalpostalserviceistooimportanttobelefttochance,andtotrialanderror.Theindustrializedcountriesofferobvioushandyexamplesofthesuccessfuluseofareservedserviceareaandpriceprotection,withstrictrulesandregulationsfortheeffectiveenforcementoftheseexclusiverights.

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Inevaluatingexperiencesfromelsewhere,itisnecessarytofirstunderstandthecontextinwhichthoseexperiencestookplace,soastoavoidapplyingthesamemeasuresinacompletelydifferentsituation.Forexample,intheEuropeanUnion,liberalizationwasagradualprocessoveraperiodof20years,duringwhichitmovedfromstrictmonopoliesandnoregulationtoaEuropeanpostalmarketwithstrongregulators.Indevelopingcountries,itisnotuncommontofindatotallyopenpostalsector,eitherdefactoordejure,withnoorvirtuallynoregulation.Thus,whereastheEuropeanUnionsoughttoimproveitspostalservicesthroughcompetition,suchcompetitionindevelopingcountriesdidnotleadtobetterserviceforcitizens–hencetheneedforadifferenceapproach.

Establishingareservedareainacountrywithfullyliberalizedpostalservices,dejureordefacto,ispracticallyimpossible.IntheEuropeanUnion,themarketwasopenedupthroughlegislativemeasures;however,thereverseisimpossible,sincethemarketproblemsfoundindevelopingcountriescannotbesolvedthroughlegislation.Theideathattheenactmentofalawwouldclearthereservedareaofallprivateoperatorsisnotrealistic,giventhelegalandhumanimplications,andareluctancebyauthoritiestoenforcesuchalaw.

Lastly,theneedtodispeldoubtswithrespecttotheviabilityofthedesignatedoperatoranditsinternalcapacitytotransformitselfintoamodernorganizationwithsufficientoperatingcapacitytomeetdemandfortheuniversalpostalservicewillrequireacompletelyobjectiveassessmentofitsactualsituation.Thedesignatedoperatorcouldcomeupwithconvincingproposalsforpractical,feasiblereformandmodernizationprogrammes,alongwithcorrespondingactionandbusinessplans.Thegovernmentneedstobeawareofallshort-andlong-termdevelopmentplans,businessplansandinvestmentneeds.

Thus,thegovernmentandthedesignatedoperatorhaveanumberofconvenient,viableoptions,dependingonthesituationineachparticularcountry.Reformandmodernizationprogrammesforthedesignatedoperatorcanbebolsteredbyadvisoryservice,consultingservice,managementandoperatingagreementswithdesignatedoperatorsinothercountries,withwhichtheoperatorinquestioncouldalsoformalliancesandjointventuresandenterintootherbusinessarrangementsfortheoperationofpostalservices.TheissueofthedevelopmentofthedesignatedoperatorisdiscussedatlengthinmoduleIVoftheguide.

Module IIILegal framework for postal reform

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Thebasictasksinvolvedinregulatingpostalactivitiesfocusonthefollowingaspects:

• Ensuringtheadequateprovisionofthebasicpostalservicesoruniversalservicetowhichallthecountry'sinhabitantsshouldbeentitled.

• Guaranteeingcompliancewiththerulesgoverningpostalactivitiesinordertomaintainhealthymarketcompetition.

Indevelopingandleastdevelopedcountriesandthroughouttheworld,resourcesarescarceandinsomecasesthereisextremepoverty.

Inthiscontext,postalservicesarenotconsideredtobeafundamentalrightandarenotincludedinnationaldevelopmentplans.Insteadtheyareside-linedinfavourofmoreimmediatebasicinfrastructuralneedssuchaselectricity,sanitationandwatersupply,andtelecommunicationsservices,whichcontributerapidlytothegrowthofnationalGDP.

Thisneglectofthesectoranditslowvisibilityamongtheauthoritiesoftheregion'scountrieshasresultedinoutdatedanddisorganizedpostalregulations,alackofinvestmentinthesectorandanabsenceofeffectiveregulators.Thisinturnhasledtotheuncontrolledgrowthofunofficialoperatorsinprofitablemarketnichesandmadeitdifficultorimpossibleforthepopulationtoaccessbasicpostalservices.

Thissituationhasledtoaviciouscirclewhichaffectsthedeliveryofpostalservices.Theirpoorqualitymeansthatconsumerseitherseekalternativesorareforcedtopayhighpricesforadded-valueservicesprovidedbyprivateenterprises.

Furthermore,thissituationleadstoareductioninthedesignatedoperator'spostaltraffic,adeterioratingeconomicandfinancialsituation,alackofinvestment,highcostsandlowquality,thusclosingtheviciouscircleinwhichtheonlywinnersaretheunofficialor"shady"operatorswhoavoidalladministrative,tax,employmentorsocialsecurityobligations.

Inthiscontext,thebiggestlosersarethepublic,leftwitheithernoaccesstobasicpostalservices,oronlytounaffordableand/orpoorqualityservices,andbusinesseswhich,forsimilarreasons,areoptinginmanyoftheregion'scountriestoprovidetheirownservices,therebydistortingwhatisalreadyadisorganizedandinefficientmarket.Furthermore,taxpayersoftenfundtheinefficientserviceofdesignatedoperatorsthatdonotevenmanagetobreakevenfinancially.

Anothermajorloseristhedesignatedoperatoritself;trappedinthisviciouscircle,itisaminoroperatorintermsofpostalvolumesandrevenue,offeringlow-qualityservicesandlackingthefinancialresourcestoinvest.Finally,thereisthestate,whichisburdenedwithfinancingthedesignatedoperatoryearafteryear,oftenwithincreasinglylargeamounts.Inreturn,itreceivesacostly,poorqualityservicewithabadpublicimage,inwhichthereisalackofinvestment.Consequently,thestatelosesanypotentialbenefitsthatthepostalnetwork,asthenationalinfrastructurenetworkwiththewidestcoverage,mightgenerateforthecountry.

Thiscombinationofadisorganizedpostalsector,open,unofficial,deregulatedmarketsandaweakdesignatedoperatorpreventsthestatefromofferingitscitizenseventheminimumbasicservices.

Facedwiththissituation,thegovernmentcustomarilyrespondswithunilateral,partialregulatoryreformsinoneormoreofitsministerialdepartments,withouteitherfullgovernmentconsensusortheparticipationofthevarioussectorplayers.

Thesecircumstances,combinedwithalackofknowledgeofthesector,itslowpriorityforthegovernment,thelackoftechnicalbackingandpartialnatureofreformswhichfailtoaddressmostoftheinfluentialaspectsofasectorascomplexasthePost,hasconsignedmostoftheregulatoryreformeffortstofailureandobscurity.

IntroductionI

II

134134

Thepurposeofthismoduleistoserveasatooltoenablethecountriesthathavedecidedtoreformtheirregulatoryframe-worktodosomoresuccessfully.

Themoduleisdividedintosixchapters,thefirstofwhichisintendedtodemonstratetothereadertheeconomicandsocialimportancetothecountriesofapublicpostalserviceinfrastructureformingasinglenetworkthatlinksallpointsoftheregion.

ThischapteralsoreferstotheinternationalcommitmentsundertakenbythecountriesoftheregionwhentheirplenipotentiarydelegatessignedtheActsoftheUniversalPostalUnion.Finally,itreviewsthesituationinthepostalsector.

ChaptertwoaddressesthestateoftheregulatoryframeworkinLatinAmerica,takingintoaccountthebodyofexperiencegainedfromthevariousreformstudiescarriedoutintheregion.Italsocontainsguidelinesforbeginningtheregulatoryframeworkreformprocessand,forcountrieschoosingtoundertakeanintegratedreformprocess,recommendationsfortheincorporationofthisprocess.

Chapterthreecontainsregulatoryrecommendations,describesthetypeofcontentthatshouldnotbeomittedfromanypostallaw,andproposesamodelpostallawstructure.Thisfocusesonmarketregulation,theuniversalpostalserviceandothergeneralprovisionsnecessaryfordraftingalegaltextaimedatorganizingthesector.Italsoincludessuggestedtextsforthedevelopmentofthepostallawregulations.

Chapterfourcontainsrecommendationsforcountrieswishingtoregularizetheircostaccountingobligations.Itsetsouttheobjectivestopursue,prerequisites,andtheareaswhichshouldberegulated.

Finally,chaptersfiveandsixincludesuggestedarrangementsforthepostalregulator,coveringaspectssuchaslegalmodels,regulatoryrecommendationstoguaranteeitsindependenceandoperationalarrangementsand,finally,recommendationsontheorganizationofthedesignatedoperator.

Attheendofthismodule,someofthepointsraisedintheprecedingchapterswillbecoveredinvariousannexes.

III

135135

Traditionally,thepostalsectorhasbeenidentifiedasapublicorbasicserviceprovidedbythestateforitscitizens.Thus,thescopeofthestate'sregulationswaslimitedtothepostalservicesprovidedbythepublicpostalservice.

However,thispublicserviceconcepthasbeenbrokendownintoanumberofsub-conceptswhichspecifythestate'sresponsibilitiesinthisarea.

Asub-conceptthathasdevelopedfromthegeneralprincipleofpublicserviceisthatofauniversalservicethatismorelimitedandspecificthanwastraditionallythecase.

Theuniversalserviceisthatpartofthepublicserviceswhichthestateisresponsibleforguaranteeing.However,inthepostalsector,theideaarosethatallpostalservicesmustbeguaranteed by the state.Takentotheextreme,thiswouldmeanthathighadded-valuecourierandexpressmailservicesshouldalsobecoveredbythestateguarantee.

However,theuniversalserviceconceptguaranteesonlythoseserviceswhichthestateconsiderstobebasicpublicservices,whichthemarketalonewouldnotprovide.Thestateunderstandsthesebasicservicesasconstitutingaminimum standardofservicetowhichthewholepopulationisentitled.

Thepostalsectorwasoneofthelasttoincorporatethisuniversalserviceconcept,thusfollowingaregulatorymodelalreadyadoptedinothersectorsofactivity,suchasenergyandtelecommunications.

Undertheuniversalserviceconcept,thestateisobligedtodefineinconcrete,quantifiabletermstheservicesitcovers,servicedeliveryconditions,theircostandthesustainablefinancingmechanismsthatwillcoverthiscost.

Unlikeother,non-universalpublicservices,postalservices,conditionsofdeliveryandfinancinghavetoevolve over time.Tothisend,thestatehastoundertaketocarryoutaperiodicalreviewoftheuniversalpostalserviceobligationsforwhichitisresponsibleandestablishplanstoimprovethedeliveryoftheseservices.

Theuniversalpostalserviceconceptisdynamicandmustbeupdatedinlinewithdevelopmentsincommunicationsingeneral.Itshouldsupportcountries'socio-economicdevelopment,thusensuringamodernpostalinfrastructurethatisadequatetomeettheneedsofindividualsandbusinessesandpromotessocialinclusionandnationalintegration.

Akeyelementoftheuniversalserviceconceptisamovementawayfromthetraditionalconceptofthestate'sgeneralobligationtocoveranyshortfall,replacingitwiththenewideathatonlythedeficitinservicesclassifiedasuniversal willbecovered,andonlywhilethereareshortcomings,ratherthanindefinitely.

The concepts of public service and universal service are complementary, rather than interchangeable.

PUBLIC POSTAL SERVICE: The postal service is a public service of general interest which states, in their public service capacity, are responsible for REGULATING and SUPERVISING.

UNIVERSAL POSTAL SERVICE: The state is obliged to GUARANTEE provision of the part of the postal services regarded as a basic requirement for the population, and to define the conditions of service delivery and funding arrangements.

General remarks about the postal sector

1

1.1

Public service and basic

rights

136136

Therefore,inadditiontobeingapublicservice,thepostalserviceisafundamentalcitizen'sright;itisincludedinmostnationalconstitutionsandmustbeguaranteedbythestate.

Althoughpostalactivitieshavebeenaffectedbytechnologicalsubstitutionininterpersonalcommunications,theycontinuetoplayafundamentalrole,wheretherearelargeareaswithnoalternativetopostalservicesasameansofcommunication.

TheUniversalDeclarationofHumanRights,adoptedbytheUnitedNationsGeneralAssemblyinitsresolution217A(III),of10December1948,recognizesinarticle25that"Everyonehastherighttoastandardoflivingadequateforthewell-beingofhimselfandhisfamily(…)andnecessarysocialservices".Thisincludespostalcommunications.

Similarly,article12oftheDeclarationestablishesthat"Nooneshallbesubjectedtoarbitraryinterferencewithhis(…)correspondence",Whilearticle19clearlystatestherighttocommunication:"Everyonehastherighttofreedomofopinionandexpression;thisrightincludesfreedomtoholdopinionswithoutinterferenceandtoseek,receiveandimpartinformationandideasthroughanymediaandregardlessoffrontiers."

Inmostofthecountries,governmentsareinterestedinthepublicservicesthatgeneratethemostrevenue(energy,telecommunications,etc.)andthosedirectlyconnectedwiththebasicneedsofthepopulation(waterandsewagenetworks,etc.).Theyignorethepostalsector,whichtheydonotconsidertobeanessentialneed.Thisattitudeleadstoaphenomenonknownasthe"invisibility of the postal sector".

Itisimportantinthisconnectiontohighlightandraiseawarenessoftheextensivecoverageofthepublicpostalservice,whichisamajorasset.Itisunique,particularlyindevelopingcountries,andmayconstituteacountry'sbiggestlogisticalnetwork,reachingmostremoteareasandruralareasaswellasthemostdisadvantagedsectionsofthepopulation(womenandchildren),distributingeducationalmaterialand/oressentialmedicalsupplies.

Ratherthandisappearinginthecurrentcontextofnewtechnologies,thisphysicalnetworkandinfrastructureareundergoingatransformation,providingessentialtoolsforthedevelopmentoflogisticalandfinancialservicesandaccesstonewtechnology.

Itoffersauniquelydensenetworkforcarryingmessages,goodsandmoneythroughoutthecountryandabroadforcitizensandbusinesses.

A QUALITY POSTAL INFRASTRUCTURE able to guarantee basic services for the population creates unsurpassed synergies for delivering new supplementary or added-value services in the market, thereby generating additional revenue for the designated operator and reducing dependence on state subsidies.

An adequate PUBLIC POSTAL NETWORK serves as a PLATFORM for offering new financial, logistical and telecommunications activities, diversifying the range of products available at counters, cooperating with the public authorities and forging public/private collaborations with other postal operators. This new scenario is changing the face of traditional public operators.

ThepostalserviceisparticularlyimportantforruralcentresofpopulationinLatinAmerica,giventhatruralpovertyisamajorproblemforthisregion,leadingtomigrationfromruraltourbanareas.Thiscausesdepopulationintheformer,whileincreasingsocialpressureintownsandcities.

Anetworkinfrastructure,suchasthatprovidedbythepostalsector,canhelpmitigatethisproblembydevelopingruralareasandboostingtheircommunicationservices,improvingandexpandingaccesstoinformationandincreasingtradeingoodstransportedviathepostalservice.

1.2

Economic and social

benefits

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Social benefits

Territorial cohesion

Facilitatescloserproduct distribution networks forbusinesses,reducingdepopulationbyencouraginginhabitantstoremainintheregion.

Social inclusion

Providesgovernment servicesviaauniversalpostalnetworkwhichreachesruralareasandplacesthataredifficulttoaccess(deliveryofmedicines,schoolbooksandlibrarybooks,licensingformalities,healthinsurance,pensionpayments,licences,etc.),deliveryandreceiptofofficialdocuments,taxpayments.

Access to fundamental rights

Thepublicpostalnetwork'scontributiontosustainabledevelopmentgoals: • Eradicateextremepovertyandhunger • Achieveuniversalprimaryeducation • Promotegenderequalityandempowerwomen

• Universalhealthcoverage • Cleanenergyindevelopingcountries • Reducethedigitaldivideandpromoteinnovationandentrepreneurship

• Ensureenvironmentalsustainability

Economic benefits

Increase in GDP

Thereisalinkbetweengreaterpostalactivityandanincreaseinthecountry'sGDP.

Investment and employment

Promotinginternationaltrade,particularlyexports.Thisnewchannelformarketinganddistributinggoodsgeneratesinvestmentopportunitiesinaglobalizedworld,whichinturnleadstoincreasedemployment.

Synergy with other activities

GeneratingSYNERGIESwithothersectorsofeconomicactivity(logistics,financialservices,transportandtelecommunicationssectors).

Offeringservicesnotprovidedbytheprivatesector,suchastelecommunicationsservices,(Internetaccesspoints,telephoneandotherelectroniccommunicationsservices),bridgingthedigitaldivideandcontributingtoincreasedInternetpenetrationinthecountry.

Providingpostalfinancialservicesinruralorremoteregions(servicesthatarenotprofitableforfinancialentities),therebypromotingcountrywideterritorialandeconomiccohesionandcompetitivenessandreducingsocialexclusion.

AnotherinterestingexampleistheexperienceofsomecountriesthathaveimplementedanelectronicpaymentsnetworkbasedontheUPU'sIFSnetwork.Thisnetworkhasprovenitsvalueasanimportantchannelforattractingremittancestodevelopingcountrieswithlargenumbersofemigrants.

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Aswellasbeingafundamentalrightofallcitizens,theuniversalpostalserviceisaninternationalcommitmentmadebymembercountriesoftheaforementionedinternationalbodies(theUPU,therestrictedunions).

CountriesbelongingtotheUNsystemmakeacommitmenttopostalserviceprovisionbyhavingtheActsofCongressoftheUniversalPostalUnionsignedbyplenipotentiaryrepresentativesatthefour-yearlyUPUCongress.

Oncesigned,theseActsbecomeauthenticinternationaltreatiesthatbecomebindingonthesignatorymembercountrieswhentheyenterintoforce,irrespectiveoftheindividualcountry'sinternalratificationprocess.

ItshouldalsobepointedoutthateveniftheUPUActsofCongressarenotratified,owingtocomplicationsinthemembercountry'slegislativeprocess,thecountryconcernedisstillboundbytheplenipotentiaryrepresentative'ssignatureatCongress.

Foralltheabovereasons,countriesareobligedtoreformtheirlegalframeworkinlinewiththeinternationalcommitmentsundertaken.

Consequently,beforeinternationalcommitmentsareformalizedbyplenipotentiaryrepresentatives,countriesmustcheckforanyincompatibilitiesbetweendomesticlegislation(especiallytheconstitution)andtheinternationalpostaltreatiesoragreementstobesigned.

Postalsectorregulationsshouldreflectandtakeintoaccountchangesintheenvironment.

Inaconstantlychangingpostalsector,theregulatoryframeworkshouldadapt,ratherthanremainingstatic.

The regulatory framework should be aware of and adapt to changes in the environment.

Someofthechangesinthewaythesectorisregulatedandunderstoodaresetoutbelow.

1. Transformation of the market:

- Reduction in traditional mail volumes (substitution effect – mobile phones, e-mail, social networks, digital marketing, e-billing and electronic notification)

- Increase in express mail and courier volumes

- Increase in parcel-post volumes connected with e-commerce

- Increased competition and narrowing of margins in the parcels and courier market

- Increased competition from other operators, redistributing demand between a greater number of agents

- Alliances and cooperation (collaboration agreements, joint ventures) between designated operators and between designated and private operators

- Mergers and acquisitions between operators

- Globalization of the economy. Meeting the needs of major customers such as multinationals can promote postal operators' international expansion

- Tendency for businesses to subcontract non-essential activities, thereby increasing demand for postal services (inverse and direct logistics, database management, advertising, etc.).

Related publications available on the UPU website (www.upu.int):

• Market research on international letter-mail, express mail service items and light-weight parcels" (2010)

• "Evaluating the development of postal electronic services" (2013)

1.3

International commitments

1.4

Regulatory environment

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2. Operational changes:

- Diversification of the offer and sources of revenue (financial services, telecommuni-cations, logistics, collaboration with public authorities, optimization of the post office network's service portfolio).

- Adaptation of operational structures to e-commerce (marketplace or website for handling mail dispatches for SMEs, self-service parcel collection points).

- Incorporation of new technologies into postal activities

- Globalization of activities (own resources or jointly with other operators)

- Corporatization/Privatization: Business structure and changes to public ownership

- Reduction of operating costs by:

› outsourcing offices and acceptance points in traditional services (drop points or outsourced service points – petrol stations, pharmacies, etc.);

› restructuring the mail processing and transport network and reducing the number of handling and sorting centres;

› generating volumes to facilitate automation;

› optimizing delivery routes.

- Increased flexibility in labour costs (temporary contracts, part-time working, outsourcing of services, piece work) and introduction of absentee monitoring systems.

- The use of IT in acceptance, sorting, routes and delivery.

- Information management systems and cost accounting.

Related publications available on the UPU website (www.upu. int):

• Global Panorama on Postal Financial Inclusion" (2013)

• "ICTs, new services and transformation of the Post" (2010), including seven case studies on the incorporation of new technologies by postal operators.

3. Regulatory changes:

- Gradual liberalization of the postal market, conditional on the financial sustainability of the UPS.

- Redefinition of reserved services, scheduling and setting conditions for the achievement of operational and quality of service results.

- Strict monitoring systems for conditions of basic postal service provision

- Control of basic service prices

- Relaxation of the legal framework for the designated operator and monitoring of the achievement of objectives

- Creation of specialized independent regulators

Related publications available from the UPU:

• "Practical Guide to Postal Sector Regulation" (2014)

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Itshouldfirstbepointedoutthatthesestatesdonothaveapostalsectorpolicysettingoutguidelinestobefollowed.Thisabsenceofapolicyforthepostalsectorindicatesalackofinterestonthepartofgovernments,mostofwhichdonotincludesuchapolicyintheirnationaldevelopmentplans.

Thefailuretoincludethesectorinnationaldevelopmentplansimpedesaccesstotheinvestmentandfinancingneededforallaspectsofmodernization(operational,technologicalandregulatory).Thesector'saforementionedlackofvisibilityandtheregulatorysituationindevelopingcountriesgivecauseforconcern:thelegalprovisionsgoverningpostalactivitieshavenotbeencomprehensivelyupdated,andthecurrentlegislationisdisorganized,withthedifferentregulations(customs,tax,transport,postal)scatteredthroughoutthetext.Thisdisorganizationresultsinanotablelackoflegalclarity.

Firstofall,mostoftheregulationsapplyexclusivelytotheactivitiesofthedesignatedoperatoranddonotregulatethepostalmarketasawhole.Regulationsofthiskinddatebacktoatimewhenthedesignatedoperatorwastheonlyoperatorinthemarket.Circumstanceshavenowchangedconsiderably,withtheentryofprivateoperators,particularlyinprofitablemarketniches.

Thepostalactivitiesofprivateoperatorsareonlypartlyregulated,andinmanycasestheregulationscoverthecustomsaspectonly.

Itshouldalsobepointedoutthattheregulationsarelimitedtoletterpost,leavingtheparcelssectoralmosttotallyunregulated.

Thissituationisparticularlyserioussince,accordingtovariousstudiesconductedintheregion,themajorityofdesignatedoperatorsaccountforlessthan10%ofthetotalpostalmarketintermsofmailvolumes,andmuchlessintermsofmarketrevenue.

Atthesametime,inthecaseofLatinAmerica,wherepostalregulationsarelargelyobsoleteandinadequate,greaterattentionisgiventoregulatingandcontrollingworkingproceduresthantodefiningpostaloperators'obligationsinrespectofaccess(acceptanceandhomedelivery)andpostalservicepricingandquality.Inthissituation,itisnotpossibleeithertodeterminethequalityofthecountry'spostalsectorortosetprogressivegoalsforimprovementtobenefitserviceusers.Furthermore,itconstitutesunwarrantedinterferenceinthewayoperatorsconducttheiractivities,whilethestateshouldfocusonmonitoringperformancelevelssetforaccess,qualityandpricing.

Amoreworryingconsequenceofthesituationdescribedaboveisthatpostalregulationsdonotgenerallyrecognizeeithertheuniversalpostalserviceconceptorthestate'sobligationtoguaranteeit.

Asaresult,thestatedoesnotknow,andhasnotdefined,whichbasicservicesshouldbeguaranteedtothewholepopulation,theminimumconditionsforprovidingthem,intermsofaccess,qualityandpricingand,lastly,thestablefinancingconditionsrequiredfortheiradequateprovision.

Thismeansthatneithertheregion'spopulationnoritsbusinessesareguaranteedadequateaccesstobasicletter-postservicesorthetransportationofparcelsandgoods.

Regulatory aspects of the postal reform process

2

2.1

Background to the

regulatory framework

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Accordingtostudiescarriedout,alargepartofthepopulation–insomecasesmorethan50%–haseithernoaccesstothesebasicservices(acceptanceanddelivery)oronlytoservicesofverylowquality.Consequently,inordertosenddocumentsorgoodstheyhavetorelyonprivateoperatorsthatchargeveryhighprices,thusexcludingasignificantpercentageofindividualsandbusinessesinthesecountriesfromaccesstoabasicright.

Manyofthecountrieshaverespondedtothissituationofdisorganization,obsolete,outdatedregulationsandlackofpostalmarketknowledgebyinitiatingprocessestoreformthelegalframeworkforthepostalsector.

Toassistthesecountrieswithdecision-making,theUPUandtherestrictedunionshaveprovidedvarioustoolswhichmayproveusefultothecountriesasawhole.Theseincludeorientationguidesandmanualstofacilitatethesettingofcriteriaandguidelinesfordevelopingnewregulatoryframeworksforthepostalsector.

Theexperiencesofthepostalsectorreformprocesssharedbyvariouscountriesoftheregionhighlighttheimportanceofpostalregulation.

The "Practical Guide to Postal Regulation" (June 2014) is a tool providing guidance and technical support. It is aimed at the countries of the Latin American region and in particular their national authorities for postal sector regulation.

Although this guide will mainly benefit the countries that have begun a methodical, integrated process of postal sector reform, its use is also recommended for any country wishing to amend its postal regulatory framework without undertaking an integrated sector reform process.

Nevertheless,whetherornotitispartofanintegratedreformprocess,thereformoftheregulatoryframeworkshouldnotbeundertakenwithoutaminimumoftechnicalsupporttojustifytheproject,aswellassufficientpoliticalbackingandtheparticipationofthevarioussectorplayerstodefendit.

General diagnosis of postal sector

Regulatory framework

• Postalsectorexcludedfromnationaldevelopmentplans

• Lackofpostalsectorpolicy • Outdated,disorganizedandinadequateregulations • Regulationofthedesignatedoperatorbutnotofthemarket

• Letterposttheonlyregulatedservice;parcelpostandcourierserviceexcludedfromregulations

• Operationalworkingprocessesaresubjecttoregulation,butaccessandqualitytargetsarenot

Postal regulator

• Regulatorsaretheexceptionratherthantherule • Publicoperatorsexerciseregulatoryfunctions • Regulatoryfunctionsdispersed(Customs,supervisoryministry,ministryofplanning)

• Regulatorslackadequateresources

Universal postal service (UPS)

• Universalpostalserviceconceptnotincluded • Basicpostalservicesandconditionsofserviceprovisionnotspecified

• Noimprovementtargetsorobjectivesset • Conditionsforthesustainablefinancingoftheuniversalpostalservicenotdefined

Designated operator

• Lacksmanagerialautonomy • Exercisesregulatoryfunctions • Limitedopportunitytodevelopthenetworkbyintroducingnewservicesandforgingallianceswithotheroperators

• Lackofinvestmentanddeterioratingquality • Decreaseinactivityandrevenue

Itisalsoimportanttorememberthatisolatedinitiativeswithouttechnicalsupportorpoliticalbacking(ofwhichtherearemanyexamples)havebeenunsuccessful.Furthermore,intheabsenceofqualifiedregulators,manyofthesereformswereinitiatedbythedesignatedoperatorsthemselves.Thisgaverisetomisgivingsanddoubtsonthepartofotherpostalsectorplayersastotheirneutrality,thuscausingthereformstofail.

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Areas of integrated reform Main decisions

Universal postal service (UPS)

Technicallyviableandfinanciallysustainableproposalfortheuniversalpostalservice:Basicservices/conditionsofserviceprovision(access,qualityandprice)/Fundingsources

Timetableforimplementation

Cost/revenueprojections

Sectoral policyStateguidelinesforthepostalsectorinvestmentcommitments

Inclusioninnationaldevelopmentplans

Legal frameworkReformoflegalframeworkandregulatoryactivities

Draft–Technicalreport–Communicationplan

Modernization of the operator and services

Institutionalchangeandinvestments

Strategicplans/Businessplans/Investmentplans

Immediate priority actions

Specific urgent actions regarding the operating structure or the reform of the LEGAL FRAMEWORK AND REGULATORY ACTIVITY.

Identify resources available in the short-term to finance these actions.

Inthelightofthediagnosisregulatoryframeworkexaminedinthepreviouspoint,thecountriesoftheregionviewitsreformasessential

Aswehavealreadyseen,thisreformcanbecarriedoutwithinoroutsidethecontextofintegratedpostalsectorreform,followingthemethodologydefinedbypostalentities.

Iftheregulatoryframeworkisreformedaspartofanorganized,integratedpostalsectorreformprocess,variousaspectsofthepostalsector(market-related,operational,financialandlegal)willbeaddressed.

Theintegratedreformprocesshasthecharacteristicsofacountryproject,sinceitinvolvesanentiresectorofthenationaleconomy,inthiscasethepostalsector.Itisconductedinanorganizedway,followingamethodicalsequence,andinvolvesallsectorplayers(nationalinter-institutionalteam).Theintegrated,organizedreformofthepostalsectoraddressesthereformoftheregulatoryframeworkattheappropriatetime.

Theintegratedreformprocess,whichincludesthereformoftheregulatoryframework,isbasedonamethodologyknownastheintegratedpostalreformanddevelopmentplan(IPDP),inwhichadiagnosisismadeandactionsrecommendedforfourareasofpostalsectorreform:theuniversalpostalservice,sectoralpolicy,thelegalframeworkandthereformoftheoperatorandservices.Thereisanadditionalareaforactionstobetakenimmediately.Thediagnosisandactionsforeachoftheseareasshouldbecarriedoutinanorganized,integratedway,sothatinputandsupportfromareasaddressedearliercanbeusedsubsequently.

Oncetheuniversalpostalservice,whichthestatecanandmustguarantee,hasbeendefined,thegovernmentwillbeinapositiontoestablishanationalpostalsectorpolicyandtoproposetothelegislatureanappropriatelegalframeworktoallowthepostalservicetomakeaneffectivecontributiontothecountry'sdevelopment.Withinthisfavourablelegalenvironment,investmentandtheuseoftechnologywillenableservicesandoperationstobemodernized.

Sequ

ence

2.2

Reform of the regulatory

framework

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The UPU has prepared manuals and guides for countries to use as methodological tools for starting and developing the integrated postal sector reform process, including the reform of the regulatory framework:

• Guide to the formulation of integrated postal reform and development plans (May 2007)

• Manual for the preparation of the universal postal service proposal (December 2010)

• Guide to the development of sector policies (March 2011)

• Practical guide to postal regulation (June 2014)

Aswellaspreparingaworkingmethodologyforintegratedpostalsectorreform,theUPUsupportsitsimplementationincountriesrequestingassistancebyprovidingagroupofexpertsfromtheregion(trainers)specializingintheareaofreform.

BeforeembarkingonthisUPUcollaborativereformprocess,itisimportantfirsttoobtainaformalcommitmentfromthegovernmentofthecountry,andalsotodesignateanationalcoordinatorandaprojectteamtoimplementthereformproposalswiththesupportoftrainersspecializingintheuseoftherelevantmethodology.

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Theregulationofthepostalindustrysharessomesimilaritieswiththatofothernetwork-basedindustries,suchaselectricity,gas,waterandtelecommunications.

Ratherthanbeingasingleconcept,itshouldevolveintermsofmarketmaturityandthelevelofcompetition.Regulationisadynamicprocess,evolvingtokeeppacewithmarketdevelopmentandtechnologicalchanges

Oneofthemainrecommendationsforaddressingthetendencytowardsstateinterventioninthepostalmarketisforregulationtobelimitedtowhatisstrictlynecessary.Thisisknownasapolicyof"deregulation".

Thisdoesnotmeanthereisnoregulation,butthatitiskepttotheabsoluteessentials,withnomarketintervention,excepttoregulateaspectsthatthemarketcannotmanageitself.Inordertoapplytheprincipleofminimumregulatoryintervention,takingintoaccountthevariousdiagnosesontheregulatoryframeworkinsomeoftheregion'scountries,itisspecificallyrecommendedthatcountriesidentifytheaspectsoftheircurrentnationalregulationsgoverningthedesignatedpostaloperator'soperationalprocessesthatshouldberemovedfromthelegalframework,leavingtheminthehandsoftheoperators.Thesecouldthenbecompiledininternaloperationalmanuals,whichcouldeasilybeamended.

Observations on the principle of minimum regulatory intervention

• Regulation is always necessary, but should be restricted to a subsidiary, complementary market role, covering only the essentials.

• Regulation should promote and support the market, but not replace it.

• Excessive regulation that replaces the market should be changed so that it is complementary to it.

• In the worst case, the regulator tends to act as a "shadow" manager of the operators it regulates.

3.1.2

Principle of regulatory

asymmetry Undertraditionalpostalregulations,allpostalsub-marketsaregovernedinthesameway.

The regulator should, at a minimum, make a distinction between two types of regulatory situation or postal submarket

• Basic postal service market: This market, also known as the traditional postal service market, covers conventional postal services using a transport network, with a stable distribution system and extensive outreach.

• Express mail and courier market: This market comprises high added-value postal services, the most important aspects of which are delivery times, quality, security and specific dispatch features. They use a fairly dense transport and distribution network able to adapt to the specific needs of each case.

Basicpostalservicesarethoseguaranteedbythestatetothewholepopulation.Givenitsresponsibilityinthisregard,greatercontrolandinterventionisneeded.

Therefore,thelevelofregulationneedstobegreater,coveringallaspectsguaranteeingserviceaccessibility,qualityandaffordability,andincludingtargetsandperformancemeasurementindicators.

Guidelines for developing a regulatory framework for the Post

3

3.1

General remarks

3.1.1

Principle of minimum

regulatory intervention

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However,farlessstringentregulationisneededinmarketswhichthestateisnotresponsibleforguaranteeing,suchastheexpressmailandcouriersegments,oranyothermarketwhichdoesnotprovidebasicservices.

Inthesemarkets,thestate'sroleshouldbelimitedtoguaranteeingfaircompetitionbetweenoperators,regulatingtheirabilitytoobtainoperatorstatusandensuringtheobservanceofbasicrightsapplyingtoallpostalitems(inviolabilityandconfidentialityofpostalitems,dataprotection,prohibiteditems)andcompliancewithgeneralregulations(customs,consumerandhealthregulations).Obligationswithregardtoaccessibility,qualityorpricearenotincluded,asthesearenotbasicpublicservices.

Thefirststepindevelopingaregulatoryframeworkistodraftapostalsectorregulationwithlegalstatus.

Thislawshouldincorporateatechnicalreportincludingadiagnosisofthesituationinthepostalsectorbasedonstudies,theeconomicandsocialimpactonthecountryoffailuretoamendtheregulations,andthetechnicalandfinancialjustificationfortheproject.

Itisimportanttopointoutthatthestructureofthepostallawshouldincludeanexplanatorystatementorpreamblesettingoutthepurposeofthelaw,itsimportanceinthereorganizationofthesectorand,finally,abriefdescriptionofitscontents.Alltheseaspectswillbediscussedingreaterdetailinlatersections.

3.3

General provisions of

the postal law

Thelawshouldincludeaparagraphongeneralprovisionsinordertofocustheproject.Thissectionshouldincludeatleastthefollowingaspects:

Aims and objectives of the lawSuggestedaimsandobjectivesfororganizingthecountry'spostalservicesand/orguaranteeingbasicpostalservices.

Scope of applicationForreasonsoflegalclarity,countriesareadvisedtoincludethepartiessubjecttothelaw.Normally,thisincludesnaturalorlegalpersons,whetherpublicorprivate,nationalorforeign,providingthecountry'spostalservices.

Legal status of postal servicesItisimportanttodefinethestatusofthepostalservicesaspublicservicesorservicesofgeneralinterest,oranyotherequivalentusedinotherregulatedeconomicsectors(energy,telecommunications)ineachcountry.Sincethispointcanhaveimportantlegalrepercussions,itisimportanttoclarifyitinthelaw.

Classification of postal servicesApostalserviceclassificationsystemshouldbeestablishedtoallowabetterunderstandingoftheconceptsembodiedinthelaw.

Thisclassificationshouldseparateuniversalfromnon-universalpostalservices,indicatingintheformercasewhicharereservedservicesandwhicharenot.

Withinthenon-universalservicescategory,itshouldbespecifiedthattheseservicesincludethoseclassedasexpressorcourier.

Inordertodistinguishbetweenthetwosegmentsofactivityandavoiddepredationofthebasicservicesmarket(universalpostalservice)bytheexpressandcouriermarkets,theregulatoryframeworkshouldincludetheminimumconditionsandcriteriathatthismarketmustmeet.Forexample,expressandcourieroperatorsmightincludespecifiedaddedvaluesintheirserviceoffering(delivery,collection,and/orhanddeliveryobligation),trackandtrace,confirmationofdelivery)andaminimumpriceforprovidingtheseservices(e.g.fiveorsixtimesthepriceofthebasicserviceprovidedbythedesignatedoperator).

3.2Structure of

the postal law

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3.4.1

Postal service user rights

General definitions Toprovidegreaterlegalcertainty,itisimportanttoincludetermsusedinthedraftlawitself.

Prohibited itemsItisimportanttolistitemsprohibitedfromcirculationwithinthepostalnetwork.Iftheyaredefinedinthelaw,theyshouldbeopentoregulatorydevelopmentssothatthelistcanbeamendedmoreeasily.Countriesshouldalsotakeintoaccountarticle18oftheUPUConvention,whichlistsitemsprohibitedininternationalexchangesbetweenUniversalPostalUnionmembercountries.

1. Description of rights

Itisimportantforthepostallawtoincludeaspecificsectiononthebasicrightsofallpostalusers.Theserightsbecomebindingobligationsonoperators.

» Inviolability of postal itemsTherighttoinviolabilityconsistsinprohibitingthearbitraryorunlawfulwithholdingandretentionofpostalitemsortheirintentionalmisrouting,opening,removal,retentionorconcealmentand,ingeneral,anyshortcomingsintheirsafekeeping.

»ConfidentialityofpostalitemsTherighttoconfidentialityconsistsinguaranteeingthatnoinformationconcerningthecontents,existence,class,address,oranyotherexternalaspectofpostalitemswillbeprovidedtothirdparties.

» Ownership of postal itemsTherightofownershipmeansexpressrecognitionthatitemsarethepropertyofthesenderuntiltheyaredeliveredtotheaddressee.Therefore,thesendercanrequestachangetotheaddressofdestinationortheforwardingofitemsthatdonotreachtheaddressee.Italsohasimplicationsastotherightfulclaimantintheeventofanincidentinvolvingamailitem.

» Information on the postal service Countries should include the user's right to information in the law, under the section on basic rights, expressly stating that this includes the right to be informed of the conditions of service provision offered by postal operators (e.g. rates, delivery times, procedures for claiming compensation).

» Proper treatment of inquiries by postal services Therighttosubmitinquiriesconcerninganypostalservicetooperatorsandtoreceivearesponsefromthem:thisshouldincludecircumstanceslikelytogiverisetoinquiries,thetimelimitforaresponse,andanappealbodyincasetheuserdoesnotaccepttheresolutionoftheinquiry.

» General rights of consumers and usersThelawshouldincludeareferencetothefactthatthegeneralregulationsonconsumeranduserrightsapplytopostalserviceusers.

2. Limits

Itisalsoadvisabletoincludeinthislawtheregulationsonexceptionstobasicrightssuchastheinviolabilityandconfidentialityofpostalitems.Exceptionscouldincludeexpressconsentgivenbythesender,duelegalauthorization,orspecificproceduresinvolvingcustomsorhealthauthorities.

Theinstancesandscopeofinterventionbythepostalregulator'sowninspectorsshouldalsoberegulated.

3.4

General postal service

rules

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Anylawwhichregulatesthepostalsectorshouldincludetheconditionsforbecomingapostaloperator.Thislawshouldincludeatleastthefollowingelements:

General conditions for obtaining operator statusThepostallawshouldspecifythetypeofqualification(authorization,licence,etc.)requiredtoprovidepostalservicesandthecriteriaforthegrantingofthisright(technical,economic,financial,administrative).

Thelawshouldestablishavalidityperiodfortheseauthorizations,afterwhichtheymustberenewed.Thesemeasureswillensuregreatercontrolofthemarket.

Public register of postal operatorsThemarketisdynamicandcontrolsareneededonoperators,theservicestheyprovide,thegeographicalareaofactivity,theadministrativeandoperationalinfrastructure(acceptance,sorting,transportanddelivery),mailvolumeshandled,billingandrevenue,andhumanresourceissues.Theregisteristheidealtoolforthispurposeandformarketinformation.

Postal operators' obligationsItisadvisabletoincludeinthepostallawalistofobligationsthatpostaloperatorsmustfulfilintheprovisionoftheirservices.

Forexample,ataminimum,thelawcouldobligepostaloperatorsto:

• provideservicesundertheconditionsauthorizedbythelicence-holder;

• guaranteepostalserviceuserrights;

• fulfilregulatoryrequirementsandallowtheregulatortocarryoutitsoversightactivities;

• providetheregulatorwithinformationrequestedforstatisticalpurposes.

Thislastobligationisimportant,asitgivestheregulatorabetterunderstandingandgreatercontrolofthepostalmarket.Therefore,itisappropriateforthelawtostateexpresslytheobligationonalloperatorstosupplytheregulatorwithoperationalandfinancialinformation(forstatisticalandmarketresearchpurposes).

Thisinformationshouldbesubmittedwhenauthorizationisgrantedandthereafterasrequired.

Thelawshouldspecifywhichtaxespostaloperatorshavetopayfortherighttoprovidepostalservices.Provisionshouldbeincludedforupdatingthesepostalfeesortaxes,themostcommonbeing:

• afeetofundtheuniversalpostalservice

• afeetofundthepostalregulator'sactivities

• acertificationfeeforpostalserviceprovision

Thelawshouldincludetheelementsconsiderednecessaryundereachcountry'slegalframeworkforthecreationofthesetaxes(taxableevents,taxablepersons,taxablebase,amounttobepaid,paymentschedule,extensions,otherelements),leavingproceduralaspects(modelsforpaymentoftaxesorfees,methodandplaceoffiling)tobecoveredinthedevelopmentoftheregulations.

3.4.3

Price regulation

Proceduresforpostalservicepricecontrolsshouldbetailoredtothetypeofpostalserviceinvolved:

1. Basic postal services (universal postal service)

Theseservicesaresubjecttostatepricecontrol,astheyarebasicserviceswhichshouldbeguaranteedtothewholepopulationataffordableprices.

Underarticle3.1oftheUniversalPostalConvention,memberstatesareobligedtoprovidetheservicesincludedintheuniversalpostalservice(basicservicesprovidedbythestate)ataffordableprices.

Therefore,thepostallawshouldestablishapricecontrolprocedureforbasicservices,inordertoensurethatpricesremainaffordable.

3.4.2

Obtaining postal operator status

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Thelawcanspecifythefollowingaspects:

a. Affordability:Criteriathattheregulatorcanusetodetermineanaffordableprice(evolutionofthepriceindex;pricecomparisonwithotheroperatorsintheregion,correctedforpurchasingpower(purchasingpowerparity).

Incountrieswheredesignatedoperatorsusecostaccounting(seeChapterV),areductioncoefficientcanbeappliedtotheprojectedrateofpriceincreaseasanincentiveforbusinesscostefficiency(e.g.inflationrate(CPI)xcostsavings).

b. Schedulingofpricecontrols:timeframeforsettingprices(annual,multiannual).

c. Typeofcontrol:exante(priceproposaljustifiedbytheoperatorandsubsequentlyauthorizedbytheregulator)orexpost(controlbyregulatorafternotificationofprices).

d. Pricetypes:

Fixed price: Thisisthemaximumlevelofstatecontrolandisnormallyusedforbasicservicesreservedforthedesignatedoperatorresponsiblefordeliveringtheuniversalpostalservice.Theseservicesrequiregreatercontrolbytheregulator,sincetheyarenotprovidedonacompetitivebasis.

Theusualarrangementinthiscaseisfortheregulatortoestablishfixedpricesatregularintervals(yearlyormultiannually),asproposedbythedesignatedoperator.

Maximum price (price cap): Thiscanbeusedforallbasicservices(reservedorcompetitive),thusallowingthepostaloperatorgreaterroomformanoeuvreinmanagingitsbusiness.

Minimum and maximum price (range of prices):Thispricingsystemisveryunusualandisnormallyusedbyregulatorsestablishingminimumpricestoavoidanti-dumpingpractices.

2. Non-basic postal services (non-universal services)

Theseservicesarenotsubjecttospecificstatepricecontrol,sincetheyareadded-valueservicesprovidedbythemarket,andtheiruniversalprovisionisnotcoveredbythestateguarantee.Freedomtosetpricesisthereforethenormfortheseservices.

Althoughtheseservicesarenotsubjecttodirectstatepricecontrol,thisdoesnotruleoutanygeneralcontrolsthatmayexistinthecountrywithregardtocompetition(predatorypricing,alliancesoranyotheranti-competitivepricing).

3. General price control procedures for all services

Checkingthatalloperatorsguaranteepricetransparencybyprovidinguserswithcomprehensive,up-to-dateinformationonthepriceoftheservicestheyoffer(web,offices,regulator).

4. Exemptions from payment for postal services

Finally,thelawshouldincludeanyexemptionsfrompaymentforpostalservicesthatthecountrymayhavegrantedininternationalconventions.

Insuchcases,rightsgrantedundertheUPUConventionwhichexemptsendersfrompaymentshouldbeexpresslymentioned.

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Deliveryoftheuniversalpostalserviceisattheheartofanylawregulatingthepostalservice.Anyreformoftheregulatoryframeworkhastohaveasitscoretheuniversalpostalserviceitself.

ItisimportanttorememberthatallUPUmembercountriesareobligedtoincludetheuniversalpostalserviceintheirnationallegislation.

Universal Postal Convention (Acts of the Istanbul Congress 2016 – 2021)

Article 3Universal postal service

1. In order to support the concept of the single postal territory of the Union, member countries shall ensure that all users/customers enjoy the right to a universal postal service involving the permanent provision of quality basic postal services at all points in their territory, at affordable prices.

2. With this aim in view, member countries shall set forth, within the framework of their national postal legislation or by other customary means, the scope of the postal services offered and the requirement for quality and affordable prices, taking into account both the needs of the population and their national conditions.

3. Member countries shall ensure that the offers of postal services and quality standards will be achieved by the operators responsible for providing the universal postal service.

4. Member countries shall ensure that the universal postal service is provided on a viable basis, thus guaranteeing its sustainability.

3.5.1

Concept and scope of the

universal postal service

Theuniversalpostalservicecanbedefinedasanaccessible,affordable,qualityserviceasdefinedabove,which,givenitsimportanceforthecitizenandfornationalintegrationanddevelopment,thestatemustguaranteetoprovidetothewholepopulationcountrywideonanuninterruptedbasis.

Theprovisionoftheseservicesshouldbemandatory,permanentandsustainablyfinanced.

Whicheverdefinitionthecountrychooses,atleastthefollowingelementsshouldbeincluded:

• Theymustbebasicpostalserviceswhichthestateisobligedtoguaranteewithintheframeworkofinternationalagreementsandconventions.

• Thestatemustguaranteetheirdeliverytothewholepopulation,wherevertheylive.

• Theremustbeapermanentguaranteeofaccessibility,affordability,qualityandsustainablefunding.

Servicesandconditionsofserviceprovisiontobeincludedintheuniversalpostalservicearenotfixed,butshouldevolve over time.

Tothisend,provisionshouldbemadeforperiodicallyreviewingthisregulatoryframeworkandthestate'suniversalpostalserviceobligations,andforputtinginplaceplanstoimproveservicedelivery.

3.5Universal

postal service rules

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Indecidingwhichservicesthelawwillincludeasbasicservicesguaranteedbythestate(universalpostalservice),thecountryshouldtakeintoaccounttheinternationalcommitmentsundertakenbythecountry(internationalconventions,particularlytheUPUConvention,andperformancestandards),socio-economicandnationalculturalpolicies,specificsocietalneeds,thecurrentservicesituationand,aboveall,thefinancial/economicandoperationalviabilityofprovidingtheseservices.Thereisnothingworsethanalawthatincludesasbasicservicesthosethatareinadequateintermsofqualityandaccessibility.

Minimum services to be included under universal postal services

The state has to guarantee, at a minimum, the following basic services:

• Letters, postcards, printed matter and small packets up to 2 kg (article 17.22 of the UPU Convention).

• Items for the blind, weighing up to 7 kg (article 17.23 of the UPU Convention).

• M bags up to 30 kg (article 17.24 of the UPU Convention)

• Parcels weighing up to 20 kg (article 17.7 of the UPU Convention).

Given that these services do not include expedited or added-value services, limiting criteria should be set for them in the regulatory framework.

Scalable services

Serviceswhichthestateregardsasnecessaryforitscitizenscanbeaddedtothebasicminimumletter-postandparcelsservices.

However,thestatemustalwaysjustifytheneedtoprovideitscitizenswiththeseadditionalservicesandcarryoutpreliminarystudiestoguaranteethefinancialsustainabilityandtechnicalfeasibilityofensuringthattheyareofgoodqualityandaccessibletoitscitizens.

Statesthathavechosentoextendtherangeofservicestheywishtoguaranteethroughthedesignatedoperatorhaveincludedcertainfinancialservices(basicmoneyorders)orspecificbasictelecommunicationsserviceswhichthemarketisunabletoguaranteeinsomeremoteorruralpartsoftheterritory.

Changes to basic services

Thetextofthelawshouldincludetheoptionforthegovernmenttoincludenewserviceswithintheregulations.

3.5.3

Conditions of universal

postal service provision

1. General remarks

Thelawshouldnotbelimitedtosettingoutthebasicservicesitwillguaranteetoitspopulation,butshouldalsospecifytheconditionsinwhichtheseserviceswillbedelivered.

Firstly,thepostallawshoulddefine"servicedeliveryconditions".Thefollowingtablesetsouttheaspectsofdeliveryconditionsthatshouldbeexpresslyregulatedinthepostallaw.

Conditions of basic postal service provision should be understood as including the following elements, at a minimum:

• Access to acceptance and delivery of postal items

• Reliable and on-time delivery of postal items

• Treatment of user inquiries

• Secure processing of postal items

• Information about services

Theinclusioninthetextofthepostallawofthegeneralobjectivesforeachistheseaspectsisrecommended.

Itisstronglyrecommendedthatthelawshoulddeferthephasedtimetableforthefulfilmentoftheseobjectivesuntiltheregulationshavebeendeveloped,sincetheobjectivesforeachoftheseservicedeliveryconditionscannotbesetoutinvague,generalterms,butmustbespecificandquantifiable,whichwillincreasethelikelihoodoftheneedforamendments.

Giventhattheconditionsforuniversalpostalserviceprovisionshouldbeclearlyestablished,andalsothattheyshouldevolvegraduallyasandwheninterimgoalsareachieved,itisalwaysadvisabletoavoidincludingtheminalaw,inwhichtheprocessesforamendmentareinevitablylengthierandlessflexiblethaninthecaseofaregulation.

3.5.2

Universal postal services to be

included

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Furthermore,thetechnicalandfinancialbasisfordefiningeachoftheobjectivesandtheschedulefortheirfulfilmentshouldbeavailablewhenworkbeginsondevelopingtheregulatoryframework,subjecttoapprovalbetweenthestateandthedesignatedoperatorofthetimetableforformalizinganinvestmentandbasicservicedevelopmentplan.Thisplanshouldsetouttheinvestments,timelimitsandfinancingneededforitsimplementation.

2. Access to posting and delivery of postal items

Thepostallawshouldspecifythedesignatedoperator'sbasicobligationtoprovideanacceptanceanddeliverynetworkwhichguaranteesgeographicalcoverageofbasicservicesforthewholepopulation,throughoutthenationalterritory.Thisisabasic,irrevocablestateobligation.

As well as the designated operator's basic obligation to guarantee comprehensive coverage of basic services throughout the territory (universal postal service), the regulatory framework should specify the following points concerning access to acceptance and delivery of postal items (universal postal service).

• Procedure for the acceptance of postal items

• Acceptance points (post offices, rural postmen, mailboxes, etc.)

• Frequency of opening (number of days of the week) of acceptance points

• Opening times of acceptance points

• Weekly frequency and form of delivery of basic postal items (door-to-door, post offices boxes, other delivery points)

Itmaybeadvisabletomentionexpresslytheoptionforthedesignatedoperatorresponsibleforprovidingtheuniversalpostalserviceto outsource parts of the service to third parties.

Theoutsourcingoptionisappropriatemainlywhenservicepointsneedtobeincreasedandthedesignatedoperatordoesnothavetheresourcestoinvestattheappropriatetime.Outsourcingisalsorecommendedwhenthedesignatedoperatorhastoinstallpostofficesinlocationswherethedemandforpostalservicesislow.

Itisalsodesirableinthecaseofpotentiallyloss-makingservicesforthelawtoallowandencouragetheparticipationofotherpublicentities(e.g.prefecturesorothermunicipalbodies)abletoprovideservicesforandonbehalfofthedesignatedoperator.

Ashasbeenmentionedrepeatedly,considerationshouldbegiventowhichelementsoftheaspectsmentionedabovewillbegovernedbythepostallawandwhichwilldependonthedevelopmentoftheregulations,takingintoaccountboththeimportanceofthecontentandthepossibilityofamendmentstoit.

It is important for the regulatory framework to establish a phased timetable for the geographical coverage of basic services (access, acceptance and delivery). It is advisable to set out this timetable in detail when developing the regulations.

3. Delivery times and reliability

Thelawregulatingthepostalsectormuststatethatthedesignatedoperatorhasanobligationtodeliverbasicpostalitemswithinspecifieddeliverytimes.Inpractice,mostcountriessetdeliverytimeobjectivesforbasicletter-postitemsonly.

Forthereasonswehavegiven,itisadvisabletoestablishspecificdeliverytimeswhendevelopingtheregulations.

Delivery time targets established in the regulatory framework for basic postal services (UPS) should define the number of days between posting or acceptance of items and delivery to the addressee (J + number of days) according to the their origin and destination.

This objective should also include an indicator of reliability, i.e. the percentage of items delivered within this time frame.

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4. Treatmentofinquiries

Thelawgoverningthepostalsectorshouldestablishthedesignatedoperator'sobligationtocomplywiththegeneralprinciplesforthetreatmentofinquiriesconcerningbasicpostalitems(universalpostalservice).

Theseobjectivesmaybeestablishedasthenumberofdaysfromthetimeaninquiryislodgedtothetimetheinquirerreceivesaresponse.

5. Secure processing of postal items

Thelawgoverningthepostalsectorshouldestablishthedesignatedoperator'sobligationtocomplywiththegeneralprinciplesforthetreatmentofinquiriesconcerningbasicpostalitems(universalpostalservice).

Aspecifictargetsthatshouldbeincludedwhendevelopingtheregulationsisthenumberofincidents(loss,damageortheftofitems)pernumberofdispatchesperyear.Itwouldbeadvisabletosetonetargetforletterpostandanotherforparcels(thelatterbeingmorestringent).

6. Information on postal services

Thelawshouldincludethegeneralprincipleofthedesignatedobligationtoinformusersaboutbasicpostalservices(UPS).Specifically,thedesignatedoperatorshould,ataminimum,beobligedtoprovidevisible,up-to-dateinformationonopeninghoursanddaysandonconditionsofserviceprovisionthroughoutitsnetwork.

Forthereasonsalreadymentioned,theseobjectivesshouldbesetoutinspecifictermswhentheregulationsofthelawarebeingdeveloped.

Sinceuniversalpostalserviceprovisionisanobligationwhichmustbeguaranteedbythestate,thelatterwillalsoberesponsibleforguaranteeingitssustainablefinancing.Therefore,financingneedsshouldbebasedonthetotalcostoftheuniversalserviceobligationsimposedbythestateonthedesignatedoperator.

The most common sources of universal postal service financing are:

• the granting of a reserved services area to the designated operator

• industry funding

• state funding

Althoughthesearethetraditionalsourcesoffundingfortheuniversalpostalserviceobligations,somecountriesfinancethembylevyingsurchargesontheamounttheychargepostaloperatorsfortheirservices.Insuchcases,theuniversalpostalserviceisultimatelyfinancedbythepostalserviceusersthemselves.

AnoteworthyexampleisthatofPeru,wherestatefundingisprohibited,thereisnopossibilityoffundingfromthecountry'spublictreasury,noindustryfundingandnoreservedarea,sincemonopoliesaretotallysuppressedunderPeru'sConstitution.Consequently,fundingforbasicpostalserviceshavetocomefrominvestmentsandtheinternalresourcesofthedesignatedoperator(SERPOST).

Reserved service areaDefiningelementsofthereservedservicearea

Ifthelawincludesanareareservedforthedesig-natedoperator,itmustdefinethisarea,includingthefollowingelements:

• Reservedpostalservices

• Weightlimit

• Priceprotectionsystem

• Systemformonitoringcompliancewiththereservedarea

3.5.4

Universal postal servicefinancing

conditions

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Constituents of the reserved area

Services

Ingeneralterms,thereservedservicesarethebasicletter-postservices(normallyordinaryletters).

Countriesshouldindicatewhetherthereserveareacoversdomesticandinternationalservices.ThisisessentialinDevelopingCountries,owingtotheimportanceofinternationalmailtothedesignatedoperator.

Theseservicesarereservedbecausetheygeneratethehighestvolumes,andthushavethegreatestpotentialforproducingrevenue.

Weight limit

Thelawshouldspecifytheweightlimitfortheservicesitregardsasreserved.

Theusualpracticeistoincludeaweightlimitcoveringmostoftheseservices.Normally,90%ofletter-postitemsfallwithinthe50gweightlimit.

Ahigherweightbandcanbeincludedandprogressivelyreduced.

Price protection

Thisprotectsthedesignatedoperator'sreservedareabyallowingotheroperatorstoprovidethesameservicesonlyifthepricetheyofferisamultipleofatleastx(e.g.threeorfive)ofthepriceofferedbythedesignatedoperator.

Thisprotectionsystemhasprovedaveryusefulandeasilycontrollablewayofavoidingpredatorypricingbycompetitors.

Atpresent,notonlyaretheareasreservedbylawinmostoftheregion'scountriesvagueandambiguousbut,accordingtospecializedstudiescarriedout,theyarenotrespectedbyprivateoperatorsoroverseenbytheregulator.

Amendment of the reserved area

Itisrecommendedthatthelawshouldgrantthegovernmentthepowertoregulatethereservedareasothatanynecessaryamendmentsandadjustmentscanbecarriedout,throughtheMinistryinchargeofpostalaffairs,inlinewithuniversalpostalservicefinancingrequirementsandmarketdevelopments.

Theregulatorybodywillbeabletolimitthereservedservicesgrantedtotheoperatorresponsiblefordeliveringtheuniversalpostalserviceprovidedtheprovisionofthisserviceisnotaffected.

Transitional arrangements for the introduction of the reserved area

Theentryintooperationofthereservedareacouldbeconditionalonthedesignatedoperatorhavingthetechnicalcapabilitytotakeresponsibilityforit,whileensuringminimumstandardsofquality.

Thelegislatorshouldtakeintoaccounttheworst-casescenario,inwhichservicesarereservedforanoperatorthatlacksthetechnicalandfinancialcapacitytoensuretheiraccessibilityandadequatequality..

Industry fundingOneoftheoptionscommonlyadoptedistheprovisionoffundingfortheuniversalpostalservicebyprivatepostaloperators.

Forthisoption,thepostallawspecifies:

• whichoperatorsareobligedtocontributetouniversalpostalservicefunding;

• thepercentageofgrossannualrevenuetheyshouldcontribute;

• thepossibilityofreviewingthispercentage;

• thebodyresponsibleandtheprocedureforcollectingthecontributions

Itmaybedecidedundertheregulatoryframeworkthatthecontributionsshouldbeassignedtoafundmanagedbyanindependentbody.Thesecontributionscanbeinproportiontothelevelofoperatingrevenuewhichtheprovisionofpostalservicesgeneratesforeachoperator.

Asthisisasensitiveaspectofnegotiationswithassociationsofprivatepostaloperators,itisveryimportanttoprovidetechnicaljustificationforthefundingandalsotojustifyitseconomicimpact.

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Itshouldbepointedoutthatthesecontributionsareonlypartofthefundingarrangements;incaseswhereprivateoperatorsdonotcontribute,othersourcesoffinancingshouldbeboostedbyextendingthereservedareaorincreasingdirectcontributionsfromthestate.

However,thisshouldberegardedasatransitionalstrategy,tobeusedwithaviewtoscalingdowntheoperators'contributioniffundingrequirementsdecrease.

Similarly,theintendeduseofthesecontributionsshouldbemadepublicandabletobeauditedbyalltheoperatorsmakingfinancialcontributionstothefund.

State contributionThisfundingshouldbedescribedinthetextofthelawassupplementarytothesourcesoffinancingmentionedabove.

Inotherwords,thestateshouldfinancethecostoftheuniversalpostalserviceobligationsthathavenotbeencoveredbythedesignatedoperator'sownfundsandbyanycontributionsfromprivateoperators.

Thisfundingshouldbeatemporarymeasurewhilethedesignatedoperatorisdevelopingfinancialself-sustainability.

Adistinctionshouldbemadebetweenuniversalpostalservicefundingandfinancingforinitialinvestmentprojects,intendedsolelyforthefulfilmentofthedesignatedoperator'sinvestment,modernizationandserviceimprovementplan.

Another, much-discussed method of universal postal service funding is the financing of services by the users themselves.

This takes the form of a charge added to the final price of the service, which operators collect on behalf of the state. These funds, earmarked exclusively for financing the universal postal service obligations, are then transferred to the state.

3.5.5

Designated operator

providing the universal

postal serviceThelawshouldexpresslyincludethefollowing:

• Thedesignationofthepostaloperatormandatedbythestatetoprovidetheuniversalpostalservice.

Sincetheuniversalpostalserviceisanaturalmonopoly,particularlyinthepostaldeliveryphase,thecostandpricingappliedtothisservicearemorecompetitiveifitisprovidedbyasingleoperator,ratherthanseveral.Bearingthisinmind,therearenocasesanywhereintheworldofthesimultaneoususeofmorethanoneoperatorwithamandatetoprovidetheuniversalpostalservice.

Notwithstandingtheoptionsavailabletoanystateindecidingwhichoperatorwillberesponsibleforuniversalpostalserviceprovision,almosteverycountryhasentrustedthedeliveryoftheuniversalpostalservicetothedesignatedoperator.

• Thedesignatedoperatorismandatedtofulfiltheuniversalpostalserviceobligationssetoutinthelaw,andanyotherobligationarisingfrominternationalconventionsoragreementssignedbythecountryinrespectofpostalserviceprovision.

• Designationbylawmeansthattheoperatorisenteredautomaticallyinthepublicregisterofpostaloperatorsfortheprovisionofpostalserviceswithinthescopeoftheuniversalpostalservice,aswellasanyotherpostalservices,asdecidedbythecountry.

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Thelawshouldalsoincludethespecialrightsassignedtothedesignatedoperatorbyvirtueofitsstatus.Generally,thepostallawgrantstheoperatorthefollowingspecialrights:

• PreferentialclearancethroughCustomsofuniversalpostalserviceitems;

• Exemptionfromanytaxesleviedonactivitiesrelatingtotheuniversalpostalservice;

• Exclusiverightstotheuseofthename"Correos"andofsymbolsidentifyingthedesignatedoperatororthenatureoftheservicesitprovides;

• Thedistributionofstampsorothermeansofprepayment;

• Therighttoinstallmailboxesonstreetsandpublicpremises;

• Theuseofpremisesmanagedbythecountry'srailnetwork,portsandairportsforforwardingpostalitemsincludedintheuniversalpostalservice;

• Therighttoparkitsvehiclesinlocationsclosetoitsoperationalunitsandcollectionpoints.

Postallawsnormallysetasideafinalsectionfor:

• revokingprovisionsthatareincompatiblewiththepostallaw;

• includingtemporaryprovisionsallowingthetransitionfromtheoldtothenewlegalsituationtobeembodiedinthelaw;

• establishingthevaliditydate(entryintoforce)ofthelegalprovisions.

Itisalsoadvisabletomakeuseofthesefinalprovisionstoincludeelementssuchas:

• Theratificationofinternationalcommitments entered into by countries in relation to postal services.

Insomeoftheregion'scountries,thepostaladdressingsystemiseitherinadequateornon-existent.Sincethisproblemaffectsthequalityofpostalactivitiesandtheautomationofoperationalprocesses,itwouldbedesirabletoincorporateintothelawtheobligationtosetoutrulesforthenationaladdressingsystem.

Theserulesshould,ataminimum,establishtheobligationforstreetsandbuildingstohaveasingle,uniform,publiclyrecognizedname,withstreetnamesclearlyindicatedonsigns.

Collaboration between postal and customs authorities.

Thelawshouldincludetheobligationforpostalandcustomsauthoritiestocooperatewithintheirareasofresponsibility.Itmightbeusefulalsotoobligethetwobodiestosignacollaborationagreementcoveringtherelevantperiod.Toensurethatnationalinterestsaredulytakenintoaccount,thisagreementcouldincludeprovisionsforannualhigh-levelstrategymeetingsandapermanentPost-Customscontactcommitteetoholdregular

managementmeetingstoensureongoingoperationalcoordinationbetweenthetwobodies.

3.7

Developing the postal law

regulationsWhendraftingthepostallaw,itisadvisabletoestablishcriteriafordecidingwhatcontentshouldbeincludedinthedevelopmentoftheregulations.

Thisisamatterofsomeimportance,bearinginmindthatthehigheraregulationisinthehierarchy,themoredifficultitwillbetoamendit.

Itwillbeuptoeachcountrytodecide,basedonurgencyandimportance,whichtypeofprovisioncallsforlegislation,andwhichcanbecoveredintheregulations.However,therearecriteriafordistributingtheprovisionswithintheregulatoryframework:

• Details(amounts,timeframes)subjecttofrequentamendment

• Administrativeproceduresthatmightbeamendedperiodically(authorizations,inquiries,etc.)

Examplesofareastobecoveredinthedevelopmentoftheregulations:

• administrativeauthorizationsandtheregisterofdesignatedoperators

• userprotectionarrangements

• conditionsofuniversalpostalserviceprovision

• universalpostalservicefinancingandaccountingconditions(seechapterV)

• philatelicissues

3.6Final

provisions

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Theregulationconcerningthedesignatedoperator'saccountingobligationsisakeyelementindeterminingthecostofbasicservicesforlettersorpackets.

Thisregulationwillalsoshowwhatpartofthecostcorrespondstotheacceptance,transport,sortinganddeliveryelementsofthesebasicpostalservices.

Costaccountingisanexcellentmanagementtoolforoperatorsandregulatorsalike.

Aims of cost accounting

From the regulatory point of view, the cost accounting system put in place should provide sufficient information to:

• show the actual cost of services so that an appropriate pricing framework can be established;

• indicate the cost of universal postal service provision.

From an operational point of view, a cost accounting system provides the postal operator with an extremely important tool for making business management decisions.

Basedonthe2004BucharestCongress,theUPUhasapproveddecisionsrelatingtothepurposeandobjectivesofcostaccounting,thestrategyforitsimplementationinthedesignatedoperatorsofmembercountries,andanassessmentoftheactionstaken.

TheUPUstressessomeofthebenefitsofintroducingacostaccountingsystem,namelyto"calculatetheunitcostofproductsorservices","verifythattariffscovercosts","contributetoanoptimumpricingpolicy","calculatecustomerprofitability","measuretheperformanceofpostoffices","rationalizestructurecosts","establishthecostofthepublicservice","measurethecostoftheuniversalservice","calculatethecostofterminaldues","optimizetheallocationofbudgetaryresources"and"assistwithstrategicmanagementdecision-making".

4.2

Prerequisites for putting a

cost accounting system in place

Beforedecidingtoimplementacostaccountingsystem,thefollowingprerequisitesmustbemet:

1. The designated operator must have a reliable information management system

Inordertoputinplaceacostaccountingsystemwithcertainguarantees,theoperatormustalreadyhavereliableinformationmanagementsystemsforthefollowingcrucialareas:

• Financialaccounting:Auditedandverified

• Billingandcollectionsystem(breakdownofrevenue).Detailedbreakdownofrevenuegeneratedbyeachproductorservice.

• Statisticsonvolumesofitemsacceptedanddistributed(Statistics).Thisisoneoftheessentialdriversorelementsforcostallocationandforcalculatingrevenueandunitcosts.

• Personneldatabase.Bearinginmindthatpersonnelcostsusuallyrepresentbetween70%and80%oftotalcostsinoursector,dataonthenumberofstaffworkingfortheoperator,theirremunerationandtheirpositioninthedifferentcostcentresisoneofthekeyfactorsincostaccounting.

• Inventoryofassets/investments.Statementofassets(buildings,machinery,vehicles,etc.),theirpositioninthedifferentcostcentres,valuationanddepreciationofeachasset.

• Internationalaccounts(importandexport).Costsforinternationalitemssentaresignificantlyaffectedbyterminaldues.Internationalitemsrepresentaveryhighpercentageofthedesignatedoperator'stotalvolumeofdispatches.

New postal regulatory functions: cost accounting

4

4.1

Aim of the regulation on

accounting obligations

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BasedondecisionsconcerningcostaccountingtakenattheBucharestCongress,theUPUlaunchedaprogrammetoenablepostaloperatorstoimplementthesystem.Theresultswerenotsuccessful,owingtotheunreliabilityofthepersonnelresponsibleforfeedingthesesystemsand,inparticular,thelackof"reliable,up-to-datedata".

Basic requirement for the implementation of a cost accounting system

• The designated operator must have sound data management systems containing reliable, up-to-date information. This is a prerequisite for the implementation of a cost accounting system.

• These data management systems should be audited to ascertain their situation, condition and possibilities for improvement, as well as their suitability for incorporation into the cost accounting system. This audit should be treated as a priority by member countries.

• If this prerequisite is omitted, any actions carried out are likely to be unsuccessful.

2. Definingthescopeoftheuniversalpostal service

Thisisanessentialrequirementonlywhenoneoftheaimsofimplementingacostaccountingsystemistoascertaintheoverallcostoftheuniversalpostalserviceortheunitcostofeachofthebasicservices(universalpostalservice),orwhenthereareregulatoryresponsibilitiesinrespectofauthorizingthepricesoftheseservices.

Itisessentialforanyoftheseaimstomapoutinadvanceaclearandprecisedemarcationoftheservicesincludedintheuniversalpostalservice.

Onlythebasicpostalservices(universalpostalservice)arelikelytoreceivestatefunding,sincethestateisobligedtoprovidetheminnon-marketconditions.Forthisreason,itisimportanttodefinetheseservicesandtoknowtheircostsothatfinancingcanbeprovidedforthem.

InadditiontotheaboverecommendationsandthosemadebytheUPU,itmaybeadvisable,dependingonthesituationofthedesignatedoperatorsintheregion,toavoiddevelopinghighlycomplexapplications,asthesearetime-consumingandresource-intensiveintermsofbothinitialinvestmentandrecurringcosts.

4.3

Aspects of cost

accounting to be regulated

Intheprevioussectionswehaveseentheimportanceandbenefitsofhavingacostaccountingsystem,andtherequirementsforitsimplementation.Thenextsectionfocusesontheregulatoryframeworkneededtodevelopsuchasystem.

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Regulation of the cost accounting system

The regulatory framework should ensure the correct application of the rules and criteria for cost accounting and the separation of accounts, as well as the time frame within which the designated operator should make the cost accounting available, once the financial accounting has been closed.

Itisessentialthattheaccountingrulesmakeitmandatorytoseparatetheaccounts,atleastintotwomainblocks:a)universalservicesb)non-universalservices.

Theaccountingregulationsshouldalsospecifythemethodologyforcalculatingtheunitcostoftheservicesandtherevenuetheygenerate.

Iftheregulatoroptsforamorewidespreadcalculationsystem(theABCoractivity-basedcostssystem),theregulationsshouldspecifyatleastthefollowingpoints:

• Thecostaccountingsystemtobeappliedbythepostaloperatorwithadescriptionofthesystemanditsobjectives.

• Theapplicableaccountingprinciples(e.g.causality,objectivity,disaggregabilityorreconciliationofcostaccountingwithfinancialaccounting).

• Costcentresandserviceswhichshouldbesubjecttodisaggregatedanalyticalprocedures.

• Itisadvisabletolimitthenumberofcostcentresandtoestablishfourmaingroupsofservicesforwhichdisaggregationismandatory:1)universalservices; 2)non-universalservices;3)non-postalservices;4)otherservices

• Proceduresforallocatingassets,revenueandexpenditure:

› Determinationofrevenue and expenditure › Allocationofrevenueto "cost centres" › Allocationofcostsfrom"cost centres"to

activities › Allocationofactivitiestoservices › Allocationofcostsandrevenuetothe

margin account.

Ashasalreadybeenmentioned,itisabasicrequirementofthecostallocationprocessforthedesignatedoperatortohavereliabledatamanagementsystemsandstatisticsenablingtheuseof"drivers"orcriteriatodistributecostsbetweencostcentres,activitiesand,finally,services.

Costaccountingrequiresaccuratebookkeepingandseparationofaccounts,dulyauditedbyaspecialized,reputablefirmthatisindependentofthedesignatedoperator.

Therearetwoquestionstobedecidedineachcountry'sregulations:

a. whetherthedesignatedoperatoritselfistoperformtheindependentauditandhaveitvalidatedsubsequentlybytheregulator;or

b. whethertheregulatorwillbedirectlyresponsibleforcarryingoutthisaudit.

Inthemoreusualcase,inwhichtheregulationsobligethedesignatedoperatortoauditthecorrectapplicationoftherulesgoverningcostaccountingandtheseparationofaccounts,aswellastoestimatethecostoftheuniversalpostalservice,itshouldfalltotheregulatortocarryoutthefinalvalidation.

Theregulationsshouldspecifytheprocedureforvalidatingtheauditandthedeadlinesforsendingtheregulatorthefollowinginformation:

• Accountingdocuments(detaileddescription).Theregulationsshouldincludetheoptionforthedesignatedoperatortospecifywhatdocumentationitconsidersshouldbeprotectedbycommercialandindustrialsecrecy.

• Independentauditsvalidatingcompliancewiththeregulationsgoverningcostaccounting.

• Estimateofthecostoftheuniversalpostalservice(brokendownforeachservice).

Finally,theregulationsshouldincludetheprocedureforvalidationbytheregulator,eitherdirectlyorthroughaspecializedfirm,ofthecostaccountingandthecostoftheuniversalpostalservice.

Itmightbeadvisableinthisconnectiontobeabletoissueanadministrativeresolutionformalizingtheprocedure.

Finally,itshouldbementionedthatsomeEuropeanUnioncountries,aswellasregulatingcostaccountingobligations,draftaspecificregulationincorporatingamethodologyforcalculatingthenetservicecost,i.e.thecostofthepartofthetotaluniversalpostalserviceexpenditurethattheyconsidershouldbefinanced,ratherthanthecostoftheuniversalpostalserviceasdescribedthusfar.

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Thissectionisintendedforthefewcountriesinwhichregulatoryfunctionsandpostalserviceoperationsarestillcarriedoutbythesamebody,andalsoforcountrieswhichassignmarketregulationfunctions(authorizingotheroperatorstoprovidecertainservices,priceauthorization,managementoftheregisterofdesignatedoperators)tothedesignatedoperator.

Itisimportantforthesecountriestobeawarethatthislegalanomaly,whichcanonlybeexplainedbyhistoricalreasons,shouldberemovedfromtheirregulations.

Inthecurrentscenario,whichseesalargenumberofoperatorsinteracting,theapplicationofthesamegroundrulesmustbeguaranteedtoall.Therefore,itisessentialfortheoperationalandregulatoryfunctionstobefulfilledbylegallyseparatebodies.

Almostalltheinternationalplayers(theUPU,theWorldBankandtheOECD)andregionalorganizationswithviewsonthemattersupporttheseparationofthepostalservice'soperationalandregulatoryfunctions.

Benefits of the separation of functions for the state

Postal regulator

Bettersupportsitsobjectiveofprotectingthecustomeroruser.

Strengthenstheperceptionofneutralityamongthevariousoperators.

Enablestheuniversalpostalserviceandpublicserviceobligationstobeeffectivelyguaranteed.

Designated operator

Releasesmaterialandhumanresourcespreviouslyassignedtoregulatoryfunctions

Enablesittoassumecorporatestatus,wherebyitcanmanageitselfwithoutbureaucracyandadopta"cultureofcompetence"andacustomer/user-focusedapproachindeliveringitsservices.

Users

Providesgreaterprotectionandimpartialservice.

Betterprotectionofbasicservices.

Market

Createsabetterbalancebetweendesignatedandprivatepostaloperators.

Avoidssituationsinwhichtheregulatingbodybecomesboth"judgeandjury".

Helpsensurefaircompetitionandequalopportunitiesamongthedifferenteconomicoperators.

Legal framework for the postal regulator

5

5.1

Separation of the

regulatory and

operational functions

162162

TheUPUdoesnotrecommendaspecificmodelfortheregulator.Thelegalmodelfortheregulatorshouldbebasedonoperatingcosts,theimportanceofthetaskstobecarriedout,theexpertsrequiredandthespeedwithwhichdecisionsneedtobemade.Asthesefactorsvaryfromonecountrytoanother,thereisnosingleformulatoapply.

Takingintoaccounttheseadvantagesanddisadvantages,eachcountrymustdecideforitselfwhethertoentrustpostalregulationtoanauthorityresponsibleforanumberofsectorsatonce,ortoabodysolelyresponsibleforthepostalsector.

Whenaregulatorybodyissetupforthefirsttime,theusualpracticeistocreateregulatoryadministrativeunitswithinthestructureofaministerialdepartment(generaldirectorate,subdirectorate,etc.).

Therearetwotypesofunit:

a.1) A postal regulatory unit within the department to which the designated operator reports

a.2) A postal regulatory unit within a department to which the designated operator does not report

Regulatormodela.1)isquestionable,sincethedesignatedoperator'soperationaldecisionsandthoseconcerningpostalmarketregulationwouldbothbetakenbythesameauthority.Thiscouldcompromisetheperceptionofimpartialitywhichisessentialforanymarketregulator.

Thesearethepostalregulatormodelsmostwidelyusedatpresent,giventheimportanceandongoing,complexnatureoftheworkinvolvedinpostalregulation;however,thereisagrowingtrendtowardstheadoptionofanothermodel,outsidethestructureandadministrativestricturesofaministerialdepartment,namelyanindependentregulator.

Countriesthathaverecentlyabandonedtheministerialregulatormodelandmovedtowardsagenciesorindependentregulatoryauthoritiesincludesomeeuropeancountries.

FrancechosetocreateapostalregulatorintheformofaDirectorateGeneralofPostsandTelecommunications(Dirección General de Correos y Telecomunicaciones)in1989.Thisfirstphasewasfollowedbythecreationofanindependentregulator,withgreaterlegalandfinancialautonomy.

5.2.2

Independent regulator

Followingrecommendationsmadebyvariousinternationalinstitutions(theOECD,theWorldBank,theEuropeanUnion)manycountrieshavetakenthestepoftransformingtheirtraditionalregulators,setupwithinthehierarchicaladministrativesystemofaministry,intoindependentregulatorybodies.

However,thedecisiontomovetowardsanindependentregulatoralsoinvolveschoosinganotherkindofmodel,whichpresentsbothadvantagesanddrawbacks.Themodelsavailabletocountriesoptingforanindependentregulatoraredescribedbelow:

b.1) Postal regulator

Theexclusivelypostalregulatorisamodelthattendstobedismissedonthegroundsofitscostandthelackofsynergieswithothersectorsofactivity.

InOctober2011,theUnitedKingdomandSpainwerethelastEuropeanUnionmemberstodiscardtheexclusivelypostalregulatormodelinfavourofcommunicationsregulatorandmultisectoralregulatormodelsrespectively.

b.2) Communications regulator

Inthismodel,anindependentregulatorcombinesregulatoryfunctionsfortelecommunicationsorelectroniccommunicationsandthepostalsector.

5.2

Choosing a legal model

5.2.1

Unit within a ministerial department

163163

b.3) Multisectoral regulator

ThismodelincludesEuropeanUnioncountriesinwhichthepostalregulatorybodiesalsohavejurisdictionovertheenergyandgassectors,oralsoregulateroadtransport.

Forexample,Germany'sAgenciaFederaldeRedes(FederalNetworksAgency)combinestheregulatoryfunctionsforenergy,telecommunications,thepostalsectorandtherailways.

b.4) Regulator for multisectoral activities and competition

Thistypeofregulator,forexample,Spain'sComisión Nacional de los Mercados y la Competencia (NationalCommissionforMarketsandCompetition),isunusual,sincetheregulatorforcompetitionandthesectorregulatorarenormallyseparate,independentbodies.

Most of the developing countries undertake partial regulatory functions – basically price control – geared to the exclusive control of the designated operator through non-specialized units that are hierarchically part of ministerial structures.

5.3

Recommenda-tions concerning

the postal regulator's

independence Thecreationofanindependentpostalregulatorasanentitywithalegalpersonalitydistinctfromthatofthestateisonlyafirststepinensuringtheregulator'sfull,trueoperationalindependence.

Whenthegovernmentdecidestocreateanindependentregulatorforthepostalsector,weshouldkeepinmindthegoalofincreasingtheregulator'slevelofoperationalindependence.Theobjectiveinthisconnectionistodeveloparegulatoryframeworkfortheregulatorwhichprotectsitfrominterferenceintheexerciseofitsfunctionsandemphasizesitsneutralpositionvis-à-visthepostalmarket.

The annex contains a table setting out regulatory recommendations and indicators to bear in mind to strengthen the postal regulator's operational independence.

5.4

Operating framework

for the postal regulator

5.4.1

Attachment to a ministry

Despiteregulatorybodieshavingindependenceandautonomyindecision-making,itmaybemandatory,forthepurposesofstateadministrativeorganization,forthemtobeattachedtoaministry.

Thisdoesnotmeanthattheyreceiveinstructions,orthattheyaresubjecttoanycontrolortotheprincipleofadministrativehierarchy.

164164

To avoid compromising the regulator's image of impartiality, it is advisable to avoid attaching the regulator to a ministry that also supervises the economic interests of the designated operator. This is to prevent the phenomenon known as "regulatory capture".

Theregulatoryframeworkshouldacknowledgetheindependentregulatorybody'sownlegalpersonality,separatefromthatofthestate,andshouldspecifyitsextent.

Sincetheyhaveaseparatelegalpersonality,theseregulatorybodiesshouldhavetheirowncapitalandliquidassets.Inaddition,thematerialandhumanresourcestransferredtothembythestateforthefulfilmentoftheirfunctionsshouldbespecified.

Indefiningtheirorganizationalstructure,theseindependentregulatorsshouldbeawareofthefollowingpoints:

• Theycanacquire,leaseoutanddisposeoftheirownassetsandmanagetheirowncapitalautonomously.

• Theyshouldhavetheirownaccountingservice,managingnotonlytheexpenditurebudget(aswasthecasewhentheywerepartofthestructureofaministry),butalsotherevenuebudget.

• Theyareabletoobtaintheirownresources,managetheirrevenueandhaveattheirdisposalmorecomprehensiveandmoredetailedaccountinginformation.

• Theyshouldplantheirliquidityrequirementsandmanagesurpluses.

Themanagementstructureisnormallydeterminedbytheregulatoryframework,butthisshouldallowregulatorsfreedomtodecideonthisstructureforthemselves.

The postal regulator's status should guarantee its autonomy and independence, the degree of which will depend on its ability to be self-governing (choosing the members of its decision-making bodies), to self-organize (setting its organizational rules) and to perform its own functions independently, among other things.

Management structureTheboard-typemanagementstructurecanbemadeupofachairpersonandanumberofboardmembers.Ifthepostalregulatorispartofamultisectoralbody,itisusualforeachboardmembertorepresentoneoftheregulatedsectors.

Inanycase,itisimportanttostateclearlythatthemembersofthismanagementstructureshouldbeindividualsofrecognizedprofessionalcompetenceinthepostalandmarketregulationsectorsandmusthaveappearedbeforeparliamentorthelegislature.Theirselectionshouldbebasedontechnicalknowledgeandability.Thiswillensurethattheregulatorisprofessionalandfreeofpoliticalbias.

Inordertostrengthenitsoperationalindependence,theregulatoryframeworkshouldstipulatethattheseofficesshouldbeelectedforanon-renewableperiodwhichexceedsthelengthofalegislativeterm.Thepurposeofthisistoensuredisassociationfrompoliticalcontrol,asitsfunctionsmustbeperformedwithtotalcommitmentandbesubjecttothegovernment'srulesonincompatibleactivities.

Management structureTheregulatoryframeworkofthepostalregulator'smanagementstructurewilldependonwhethertheregulatormodelchosenisexclusivelypostal,communicationsormultisectoral.

Thisregulatoryframeworkcansometimesevenspecifytheregulator'sinternalorganization.Inthesecases,itisimportanttohaveseparateeconomic,legalandtechnicalareasandforthemanagementandcoordinationoftheregulator'slegalstatustobeassignedtoapersoninthepostalregulatoryunitwithoverallresponsibility,suchasthemanagerorsecretary-general.

5.4.4

Human resources

Theregulationofthepostalsectorisacomplex,demandingtaskfortheregulatorybodies.Inmanycasesthesebodiesarerecentlycreated,whichinevitablymeansthattheirexperienceislimited.

Theneedforspecializedstaffhasledthepostalsectorregulatorybodiestoselectprofessionalsfromthepersonnelofthedesignatedoperator.Thisdecisionisjustifiedonthegroundsoftheknowledge,experienceandlengthofserviceinthepostalmarketofemployeeswhoworkorhaveworkedforthedesignatedoperator.Thisisadecisivefactorinthesuccessfulcreationofaregulatorybodyforthepostalmarket.

Itshouldbestressedinthisconnectionthatevenifapostalregulatorhasbeenassignedadequatepowerstoregulatethepostalmarket,unlessitisgivensufficientfinancial,materialandhumanresources,itwillbeweakandthereforeunabletoensuretheproperexecutionofitsduties.

5.4.2

Legal personality and own capital

resources

5.4.3

Organizational structure

165165

Therefore,itisessentialthattheregulator'sregulatoryframeworkspecifyitsautonomytoselectandrecruitqualifiedpersonnelwithspecificknowledgeofthesector(legal,economic,marketing,competitionlaw).

Specialattentionshouldbepaidinthisconnectiontothephenomenonofpoaching,bypostalsectorbusinesses,ofstaffrecruitedtocarryoutpostalmarketregulatoryfunctions.Toavoidthisphenomenon,knownasthe"revolvingdoor",itmaybeadvisabletoincludecontractualclauses(foremployees)orregulatoryrequirements(forofficials)preventingtheregulatorybody'spersonnel,atleastforaspecifiedperiod,fromworkinginsectorsrelatingtothepostalsectorwhichthepersonnelhavehelpedregulate,andonwhichtheyholdinsideinformation.

Aswellastherecruitmentandselectionofpersonnel,theregulatorshouldhavethecapacitytomanagehumanresources(hiringandfiringstaff,geographicalandoperationalmobility,remuneration,disciplinaryaction,etc.).

Sufficientfundingshouldbeavailablewithintheregulatoryframeworktoenablethepostalregulatortocarryoutitsfunctionsadequately.

Whentheregulator'sfinancingstrategyisdefinedandtransferredtotheregulatoryframework,itisadvisabletocarryoutsimulationsandprojectionsoftheregulator'spotentialrevenueandcosts,takingintoaccountthevarioussourcesoffundinginordertomaintainabalancebetweenthem.

The postal regulator normally obtains funding from the following sources:

• Taxes levied to finance the postal regulator's activities

• Direct state transfers

• Penalty payments and fines

• Capital assets and securities

Taxes financing the postal regulator's activitiesFinancingfrominternalresourcesormarketfundingwillensuregreateroperationalindependence,providedthebulkofthisfundingdoesnotcomefromasingle,dominantoperator(publicorprivate).

Thesetaxesshouldidentifythetaxableentities(normallyalltheoperatorsenteredintheregisterofpostaloperators),theirtaxablebase(entryandrenewalofpostalauthorizationintheregister),rate(fixedsumorvariableamountbasedonapercentageofrevenue),paymentschedule(normallyannual).

Also,althoughthisisoflittlesignificanceinpracticalterms,theregulatoryframeworkshouldincludeafeeforgrantingcertificationtooffsetthecostofcertifyingthatoperatorsareenteredintheregisterofpostaloperators.

Direct state transfersTogetherwithleviesonindustry,thesetransfersarethemainsourceoffundingforregulatoryactivities.

Thereshouldbeabalancebetweenthetwosourcesoffunding.

Revenue from penalty payments and finesThissourceoffundingcanleadtoconflict,sinceitmightgivetheimpressionthattheinspectionandpenaltysystemisbeingstrengthenedinordertoprocureaneconomicbenefitfortheregulator.

However,itmightbeworthincludingthissourceoffunding.

Capital assets and securities Theseareusuallyincludedasasourceoffunding,sinceitispossibleintheorytoobtainfinancingfromcapital.However,inreality,thisistreatedasaresidualsource.

5.4.5

Sources of funding

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167167

Thevariousformsthatcanbeadoptedareasfollows:

Unit within a ministerial departmentIfthecountrydecidestokeepthepublicpostalserviceasanintegratedunitattachedtoaministry(notrecommended),itisimportantfortheregulatoryframeworktoexploitallthelegalpossibilitiestoafforditgreatermanagerialflexibility:

• Delegationoftheministerialofficial'spowerstotheheadofthepostalunit.

• Asfaraspossible,theministerialofficialshouldcontrolonlyactualresultscomparedwithexpectedresults,ratherthaneverydecisiontaken.

Public enterpriseAnassessmentshouldbemadeoftherisksinvolvedinmovingdirectlyfrombeingaunitwithinaministrytobecomingpartofacommercialenterprise.Atransitionalstageenablingthedesignatedoperator'smanagerstofamiliarizethemselveswithcommercialpracticesmaybeadvisable.

Somecountrieshaveadoptedthisintermediate,transitionalmodelbeforebecomingdesignatedoperatorswithincommercialcompanies.Thiswillenablethemtoachieveagreaterlevelofmaturitygradually,beforemovingontoaphaseofgreaterflexibilityandautonomy.

Countriesshouldtakeintoconsiderationthelevelofmaturityofanorganization'scultureandthecapacityofitshumanresourcestomeetthechallengesinvolvedinthetransitiontoacorporatemodelwithgreaterautonomy.Althoughthereisnosinglemodel,therearedifferentdegreesofoperationalandfinancialmanagementflexibilityandindependence,intermsofthelevelofautonomygrantedineachcountryanditsspecificlegalframeworkforthistypeofbody(autonomyasregardspersonnel,finances,organization,recruitmentandpriceapproval).

Commercial companyThisisthemostappropriatelegalmodel,andisbeinggraduallyadoptedinmostofthecountries.Itallowscompetitionwithprivateoperatorsundersimilarconditions,givesthedesignatedoperatoritsownlegalpersonality,separatefromthatofthestate,andallowsitgreaterautonomytoachieveitsobjectives.

6.2

Operational arrangements

Dependingonthelegalmodelthecountrychoosesforitsdesignatedoperator,theregulatoryframeworkshould,asfaraspossible,facilitatecommercial,operationalandfinancialdecision-makingsothatitcanprovidetheuniversalpostalservicesentrustedtoitbythestateinaspeedy,efficientmannerandrespondtothedemandsofthemarketandthechangingtechnologicalenvironment.

Aswehavealreadymentionedinthepreviouspoint,thedesignatedoperatorisadvisedinanycasetohavethelegalstatusofacommercialenterprise,ratherthanapublicadministration.

Similarly,eversincethe1989WashingtonCongress,theUniversalPostalUnionhasrecommendedthatthelegalstatusofitsdesignatedoperatorsshouldallowthemgreatermanagerialandfinancialautonomy.

Thedegreeofflexibilityofthelegalmodelchosenshouldbebasedontheextenttowhichtheoperatorcandetermineitsownstaffpolicy,organizationalautonomytoestablishitsbusinessstructure,financialautonomyand,finally,managerialautonomytoestablishitsserviceprovisionstrategy.

Legal framework for the designated operator

6

6.1

Legal model

168168

Effortsshouldbemade,particularlyinthecaseofmarketsopentocompetition,toensurethattheregulatoryframeworkbooststhedesignatedoperator'sbusinessmanagementcapacityandthatthetrainingprocessissteppeduptokeepabreastofthecompetitionfromotheroperators.

The designated operator's regulatory framework should enable it to:

• decide on and amend its organizational structure;

• determine its business and service provision strategy;

• determine its personnel policy (recruitment, remuneration, operational and geographical mobility, staff training);

• decide on its pricing and discount policy within the limits set by the regulations governing basic postal service (universal postal service);

• freely enter into contracts with suppliers;

• manage its assets (lease, sell, assign, trade, etc.); and

• enter into agreements and partnerships with national or foreign operators or share infrastructure, optimize resources, provide services, etc.

169169

Justification • Briefdescriptionoftheneedtoapprovethelaw(diagnosisofthecountry'spostalsectorsituation)

• Internationalobligationsenteredintobythecountry

• Thedraftlawrelatingtothecountry'spostalsectorreformprocess

• Briefdescriptionofthecontentofthelaw

General provisions • Aimsandobjectivesofthelaw • Legalstatusofpostalservices • Classificationofpostalservices • Definitionsofpostalterminologyusedinthelaw

• Itemsprohibitedfromcirculationwithinthepostalnetwork

Basic rights of postal service users • Confidentialityandinviolabilityofpostalitems • Limits • Ownershipofpostalitems • Righttoinformation • Treatmentofinquiries

Postal market systemObtaining postal operator status • Licencesandauthorizations • Renewal • Conditionsofauthorizationorlicensing • Feesandupdates • Publicregisterofpostaloperators

Tariffs • Universalpostalservice(reservedandnon-reserved)

• Non-universalservices • Exemptionsfrompayment

Violations and penalties • Competitionandprocedures • Typeofadministrativeviolation(veryserious,serious,minor)

• Penaltytypesandrates • Limitationperiodforviolationsandadministrativepenalties

• Precautionarymeasure

Universal postal service systemDefinition and services • Definition • Servicesincluded

Service delivery conditions • Acceptanceobligations • Deliveryobligations • Deliverytimeandreliabilityobjectives • Inquirytreatmentobjectives • Postalitemsecurityobjectives • Userinformationobjectives

Financing conditions • Reservedarea(ifthecountryoptsforareservemargin)

• Statecontribution • Fundsforfinancingtheuniversalpostalservice • Operators'contribution

Designation of operator to provide the universal postal service • Designation(termandgroundsfortermination)

• Obligationsofdesignatedoperator • Specialrightsofdesignatedoperator

Final provisions • Exemptionprovisions • Ratificationofinternationalacts • Validity

Guide to content to be included in the postal law

ANNEX

1

170170

Justification • Diagnosisoftheexistingsituation(absenceofpostalregulator,dispersalofregulatoryfunctions,incompleteregulatoryfunctions,etc.)

• Importanceoftheregulatoryfunctionfordrivingforwardandorganizingthepostalsector

• Briefdescriptionofcontent

Creation and legal status • Creationandaffiliation • Independenceandautonomy • Legalstatus

Stucture and organization • Organizationalstructure(directorate,management)

• Allocationoffunctions • Statusoftheorganization'spersonnel

Functions and responsibilities • Missionandfunctions • Responsibilities(recruitment,personnelmanagement,etc.)

• Workingprocedures • Resourcesfordecisionstakenbytheregulator

Funding • Ownsourcesoffunding • Statefunding

Final provisions • Exemptionprovisions • Validity

Guide to the content of the postal regulator's regulatory framework

ANNEX

2

171171

Declaration of the regulator's independence • Specificprovisionwiththeforceoflawdeclaringtheindependenceoftheorganizationanditsmembers.

• Thecapacitytoact,inpursuanceofitsobjectives,withorganizationalandoperationalautonomyandfullindependencefrompublicauthoritiesandmarketoperators.

• Itsownlegalpersonalityseparatefromthatofthestate.

• Canbeattachedtoaministry,butnotunderitssupervisionorcontrol.

Attachment to a ministry • Theregulatorybodyshouldnotbeattachedtotheministryresponsibleforthemanagement,appointmentsorlodgingofsharesofthedesignatedoperator.

Appointment and removal of members • Conditionsofappointmentstipulatedinadvanceandapprovedbyparliament.

• Appointmentbythegovernmentandnotbyanofficialoftheministrytowhichtheregulatorisattached.

• Establishmentofanon-renewabletermofofficeforthemanagementbodies,whichexceedsaparliamentaryterm(politicaldisassociation).

• Specificgroundsforremoval.

Independence of members • Certifytheindependenceofitsmembers,substantiatingtheirlackoffinancial,politicalorpersonalinterestsinthesector.

• Thechair,boardmembers,directorsandemployeeswhoretaintherighttoreserveorrestoreprofessionalrelationsoreconomicbenefitswithentitieswithintheregulatedmarketshouldnotifytheregulator'sgoverningbodyaccordingly,asboardmembersareobligedtodisclosethisfact.

• Membersshouldbeindividualsofrecognizedstandingandprofessionalcompetenceaccreditedbyparliamentorthelegislature.

• Periodicmonitoringshouldbecarriedoutbyanelecteddemocraticbodysuchasparliament,toensuretheirimpartialityandenhancetheircredibility.

Commitment and incompatibility • Directorsshouldbefullycommittedtocarryingouttheirdutiesandsubjecttotherulesonincompatibility.

• Directorsshouldreceivefinancialcompensationforrefrainingfromcarryingoutprivateprofessionalactivitiesrelatingtotheregulatedsector

Board meetings • Membersofthegovernmentandseniorpublicofficialsmaynotattendboardmeetings.

• Neitherstaffmembersnormembersofthegoverningbodiesmayseekoracceptinstructionsfromanypublicorprivatebody.

Regulatory advisers • Advisersoradministratorsfromthesupervisoryministryorthepostalregulatormaynotsitonthedesignatedoperator'smanagementboard.

Decision-making • Transparencyinthedecision-makingprocess(objective,predeterminedrulessettingoutresponsibilities)

• Makedecisionspublicly,givingclearreasonsforthem.

• Importantdecisionsshouldbetakenbyacollectivebody.

• Ensurethatdecisionscanberevisedorsuspendedthroughlegalchannelsonlyandnotbyotheradministrativebodies.

Recommendations concerning the operational independence of the postal regulator

ANNEX

3

Module IVDevelopment of the Designated Operator

and Universal Postal Service

175175

Thepostalsectorhasbeengoingthroughmajorchangesoverthepastseveralyears.

Globalization,marketliberalization,reductionsintradebarriers,newtechnologyandexpansionprogrammesbymajorpostalmarketoperatorsareonlyafewexamplesofthetypesofchangedrivingeffortstoredefinetheroleofpostalregulatorsandoperators,andofthedesignatedoperatorinparticular.

Necessaryreformsshouldbemadequicklywhileacknowledgingthatitisimpossibletomakeanychangeswithoutclearlyunderstandingtheirramificationsintheprevailingclimateineachcountry.Astudyanddiscussionprocessisimportantasawayofchartingfuturecoursesofaction.Thedegreeofgovernmentalandpublicinterestinthepostalsectorhingesontheproperhandlingofthisprocess.

Everycountry'spostalenvironmenthascertainfeaturesthatmakeitunique.Inaddressingthesweeping,fast-pacedchangescurrentlyunderwayinthepostalsector,itisimportanttobearinmindthatnotallsuchchangesarepropagatedinthesameway,withthesameintensityandatthesamepaceonallmarkets.Somecountrieshavechosentotake"one-off"measures,whichhavethrowntheentirepostalindustryintodisarray,causingvisibleharmtotheentirepopulation.Thesecountriesoptedtoforegoanin-depthstudyofnationwideconditionsandcarefulthoughtandreflectiononthebestoptionsformeetingtheirfuturegoals.Oneofthemaintasksofcountryleadersinchargeofinstitutingreformprocessesistounderstandthemagnitudeoftheimpactofthesetypesofchangeonthepostalenvironment,pinpointcurrentandpotentialfutureobstaclesanddriversonthelocalmarket,anddeterminehowlongitwilltakefortheeffectsofenvisionedreformstobefelt.

Thismoduleisdesignedtobolsternationaleffortstostudyexistingconditionswithaviewtodevelopingsoundalternativesforrestructuringthepostalsectorandtheuniversalpostalserviceoperator.

Chapter1discussesthefoundationsforthedevelopmentofthedesignatedoperator.Theobjectistoassessthecapacityofthedesignatedoperator,inthefaceofexistingthreatsandopportunitiesinthesurroundingenvironment,toframestrategiesdesignedtoconsolidateitsstrengthsandminimizetheeffectsofitsweaknesses.

Chapter2discussestheprocessofreformingthedesignatedoperatorinthelightoftheinternalandexternalenvironment(thepostalmarketandpostalsector)atthecountrylevel.Thetargetedoutputisanup-to-date,specificassessmentofthedesignatedoperatoranditstargetedmarketandthedevelopmentofalternativescenariosforuseintheplanningprocessdiscussedinchapter3.

Introduction

176176

177177

Anorganizationisnotanisolatedentity.Manydifferentfactorscansignificantlyaffectmarketbehaviour,managementperformanceandsatisfactionofmarketneeds.Thus,itisessentialforabusinessorganizationtounderstandandpositionitselfwithrespecttodifferentscenariosinordertosuccessfullycompetewithinitssphereofactivity.

Thischapterdiscussestheseconditionsandcriteriaforexpandingtheorganizationanditsserviceoperatingfunctionwithaviewtopromotingself-sustainabledevelopmentdrivenbysoundbusinesspoliciesandguidelines.

Thissectionlooksathowsocietyinfluencesbusinessesingeneralandpostaloperatorsinparticular.

Intoday'snewbusinessclimate,customersdonotalwayssettleforwhatcompaniesareoffering.Theyaregenerallylookingforlow-cost,customizedsolutionstailoredtotheirneeds.

Thisposesamajorchallengetothedesignatedoperator,particularlyinthelightofitssocialresponsibilitiesarisingfromitsuniversalpostalserviceobligations.

Anysortofchangehasanimpactonsociety.Thefirstreactiontochangeisoneofscepticism,anda"conviction"thatitismerelyapassingphase.Intime,thechangemaybecomeanintegralpartofpeople'slives.Asarule,organizationsabletoadapttochangeandcapitalizeonopportunitiespresentingthemselvesinthesurroundingenvironment,whiledodgingpotentialthreats,willsurviveandprosper.Thisoftenmeanschangingtheirbusinessfocus,revisingtheirstrategies,assimilatingnewtechnologyandreshapingtheirorganizationalstructuretoenablethemtopositionthemselvesmoreadvantageouslyonthemarket.

Theneedformoreinformation,fastercommunicationsandclosercontactiscreatingnewsocialattitudesandcustomswithpowerfuleffectsonconsumerbehaviour.

In general, people are looking for time-saving amenities designed for convenience and, thus, for improving their quality of life.

Inthepostalenvironment,aspeopleandnationsarebroughtclosertogether,thisiscreatingagrowingneedtoreconcilebusinessandsocialinterests.Ontheonehand,thedesignatedoperatorneedstoengageinbusinessactivitiesdesignedtoensureitssustainabledevelopmentwhile,ontheotherhand,itcannotlosesightofitsroleasaso-called"nationalintegrator"responsibleforengenderingandpromotingsocialcohesionandintegrationatthecountrywidelevel.

Definingandcreatingthenecessaryconditionsfortheestablishmentoftheuniversalpostalserviceistheresponsibilityofthegovernment,whichmustalsolaythefoundationsforitssustainabilityaspartofabroad-basednationwidesocialprogramme.Thedesignatedoperatorisresponsibleforprovidingtheuniversalpostalserviceinaccordancewiththedefinedconditions,whiletheregulatorensuresthatthoseconditionsaremet.Publicdemandforgoodsandservices,combinedwiththeneedtoexpandbusinessandtrade,iscreatingathirstforknowledgewithrespecttotherightsofallsegmentsofsocietytohaveaccesstoserviceswhoseprovisionisincumbentuponthegovernment.

Foundations for development of the designated operator

1

1.1

Surrounding environment

1.1.1

Society and the economic model

178178

Thesituationoutlinedabovehasprompteddiscussionontheneedtorevisecurrentregulatory,business,organizationalandtechnologicalmodelsforthepostalsectorincountriesaroundtheworld.

Policymakersandgovernmentofficialsinmanycountriesfeelthatthesolutiontothecurrentsituationinthepostalsectoristhesameasforothersectors,suchasthetelecommunications,transportationandpowersectors.Thisviewisbasedonthepremisethatmarketliberalizationaloneshouldsatisfypublicdemand,giventheinterestexpressedbyprivateenterpriseinengaginginlucrativepostalbusinessactivities.

However,decisionmakersoftentendtooverlooktheneedtoalsoprovideaccesstoservicesinremotecommunitiesatreasonablepricesandsubjecttoreasonabledeliveryconditions.TherearemorethanenoughexamplesofexperienceswhichdemonstratethatthisapproachisadeparturefromtheprincipleofuniversalservicecoverageendorsedbyUPUmembercountriesatUnionCongresses.

Moreover,thelackofprovisionsforincludingthepostalsectoringovernmentdevelopmentpolicyhasmadethecurrentpostalservicemodelobsoletebeforeitstime,resultinginadeteriorationinservicequality,increasinglylimitedserviceofferingsandalackofmotivationonthepartofthepostalworkforce,andcreatingapressingneedforchange.

Duetotheattachmentofdesignatedoperatorstocabinetministriesinchargeofmatterswhich,inmanycases,haveverylittletodowithpostalaffairs(security,police,justice,transportationandpublicworks,etc.)anddecisionmakingproblemsstemmingfromtheirlackofautonomyorlegalstanding,governmenthasspentverylittletimeondiscussionsofpostalaffairs,relegatingpostalsectorprioritiestosecondaryimportance.

Governmenteffortstobalancethebudgetandlimitedinvestmentfundingarealsotoblame.Keepingapostalservicegoingwithincreasinglylargebudgetdeficitsputsmorepressureonthepublictreasuryandthetaxpayingpublic.

Theeliminationofthepostalmonopolywithoutestablishinganycompensatorymechanismshasfurtheraggravatedthisproblem,withalargepartoftherevenuesgeneratedbylucrativepostalbusinessactivitiesgoingtoprivateenterprisesinsteadofhelpingtodefraythecostofprovidingbasicpostalservicestoremoteareas,thusdestabilizingthedelicatefinancingmechanismestablishedunderthecurrentpostalservicemodel.

Atthesametime,therecentrevolutionininformationandtelecommunicationstechnology,whilethreateningtraditional,physicallettermailandmessagetraffic,hasalsopresentedthedesignatedoperatorwithcountlessnewbusinessopportunities,suchashybridmail,e-commerceandintegratedlogisticsservices.Thissametechnologyhasalsogivenrisetoanew,moresensible,betterinformedandmoresophisticated,yetmoredemanding,consumerpublic.

Clearly,theregulatory,business,organizationalandtechnologicalmodelforthedesignatedoperatorneedstobeadaptedtothesenewphenomena.Facedwithawholenewpostalenvironment,countries–suchasthememberstatesoftheEuropeanUnion;Japan,MalaysiaandSingaporeinAsia;AustraliaandNewZealandinOceania;andBrazil,CanadaandtheUnitedStatesofAmericaintheWesternHemisphere–havespentyearsdiscussingandredesigningtheirserviceoperatingmodelsinanefforttoreconcilesocialobjectivesstemmingfromuniversalpostalserviceobligationswithcorporateobjectivesdrivingpostalbusinessactivitiesinacompetitiveenvironment.Whilesuchmodelsarenotnecessarilyidentical,theyhaveanumberofcoreelementsincommon,suchas:

i the gradual phasing out of the postal monopoly and its replacement with other compensatory mechanisms;

ii guaranteed universal postal service financingbystrongdesignatedoperators;

iii the separation of regulatory and operational functions which were traditionally performed by the designated operator;

iv the expansion of the scope and objective of the regulatory function to encompass the entire postal market;

v a clear vision of the obligations of the designated operator with respect to the provision of universal access to basic postal services;

vi the adaptation of the business model to allow for new forms of alliance building withprivateenterprise(diversificationof capital ownership, joint ventures, franchises, stock ownership, etc.);

vii the establishment of realistic pricing policies to cover universal service costs and investment needs, including the adaptation of price-setting mechanisms for services subject to competition;

viii the introduction of cost-accounting principles, with separate cost determination for basic services, different universal postal services and services open to competition;

1.1.2

The postal sector and

conditions in the surrounding

environment

179179

ix the updating of technology used in operating processes to strengthen the competitiveness of the designated operator (improving its speed, operating capacity,efficiencyandqualityandlowering its costs);

x the expansion of service offerings to make better use of existing infrastructure;

xi the updating of technology across all services, especially value-added services (hybrid mail, e-commerce, integrated logisticsservices,financialservicesandmiscellaneous derivatives of different combinations of these services in value and supply chains);

xii the modernization of administrative and production infrastructure.

Inmanycountries,designatedoperatorshavenotyetrisentothelevelofanindependententerprise,continuingtooperateasadepartmentwithinacabinetministry,dependentontheoperationsofslow-movinggovernmentbureaucracies,whichisafarcryfromtheeconomicprinciplesdrivingthebusinessoperationsandcommercialpracticesofamodernpostalenterprise.

Inthefaceofthecurrentpostalenvironment,itisimportantforeachcountrytofindwaysandmeansofpromotingthesustainabledevelopmentofitspostalsectorforthepublicgoodbystrengtheningitsdesignatedoperator,whosemissionistoserveallsegmentsofthepopulationbyprovidingtheuniversalpostalservice,andlayingthefoundationsfortheparticipationofprivateserviceoperatorsonthepostalmarketsubjecttoproperoversightandregulation.

Thefigurebelowsumsupthechallengesfacedbythedesignatedoperatorinadaptingtotoday'snewpostalenvironmentandthecoreelementsofthepostalreformprocesswhichneedtobe

addressedindevelopinganappropriatenewdomesticpostalservicemodel.

Thereformprocessshouldbeimplementedinphases,withclearlydefinedbutnotnecessarilysequentiallyarrangedobjectives,someofwhichwillneedtobepursuedsimultaneously.

Aspartofthisprocess,itwillbenecessaryto:

a. raisegovernmentawarenessoftheneedforanewpostalservicemodel;

b. establishanagendafordiscussingpostal-relatedlegalissues,including:

› theshapingandassignmentofregulatoryandoperationalfunctions;

› thedefinitionoftheuniversalpostalservice;

› thecharacterizationofservicesandoperatorstargetedbyregulatoryactivities;

› thedevelopmentofuniversalpostalservicefinancingmechanisms(reservedareas,allocationsofgovernmentfunding,taxwaivers,etc.);

› thedefinitionofthelegalstatusandfunctionsofthedesignatedoperator;

› otherrelatedissues(frankingprivileges,consumerrights,etc.);

c. developanagendaforthediscussionoforganizational,marketingandoperationalmodelsforthedesignatedoperator,including:

› thestudyanddefinitionofconceptsandobjectivesforupdatingserviceandproductlines,includingtheincorporationofnewpostaltechnologyresponsivetocustomerneeds;

› thestudyandidentificationofnewtechnologytobeincorporatedintopostalproductionandbusinessmanagementprocesses;

› thedevelopmentofaneworganizationalmodelforthedesignatedoperator;

› theframingofhumanresourcedevelopment,trainingandmotivationalstrategiesforthedesignatedoperator.

New technology

Organization

New serviceofferings

Development and training of human

resources

Funding of operationsand investments

Designatedoperator

Clients/society

Privateoperators

Challenges facing the designated operator

Reg

ula

tory

fra

mew

ork

1.1.3

Challenges faced by the

designated operator

180180

Thedevelopmentofthedesignatedoperatorisamulti-phaseprocess.Thesephasesareinterrelated,andthesuccessfulcompletionofeachisanengineofgrowth.

Thischapterdiscussestheconceptofcorporatization,postalbusinessactivities,customerdemand,postalproductsandservicesandtheirproductionprocess,inputsandlinkageswithtargetedoutputs,andthebusinessfocusofthedesignatedoperator.

Theperiodofdurationofapostalenterpriseisperpetualtoensurecontinuedservicedelivery,whichhelpsfostersocialacceptance.Fromanorganizationalstandpoint,anenterpriseisalegallyconstituted,organizedcollectionofcommodities,equipment,assetsandhumanresourcesdesignedtoproducegoodsandservices.Theeconomicprofitmotiveisaproductofitscorporatenatureandofthecommercialorientationofitsbusinessactivities.

Theconceptofcorporatizationisrelevanttoallpostalorganizations,whetherornottheyareactuallyreferredtoascorporations.Historically,postalorganizationshaveevolvedfromgovernmentofficesintocommercialenterprisesandcorporations,asillustratedinthefollowingfigure:

Toensuretheiroperationalflexibility,designatedoperatorsrequiremoreautonomy.Thereismorethanoneapproachtoaccomplishingthis.Eachcountrymustdecideonthetypeoforganizationbestsuitedtolocalconditionsandneeds,toitsmarketandtothegovernment'spolicyobjectives.

Theimportanceoflayingthenecessarylegal,administrativeandeconomicfoundationstoenablethedesignatedoperatortoholditsgroundinthefaceofincreasinglystrongandsometimespredatorycompetitioncannotbeoveremphasized.Failuretodosocouldbedetrimentaltothegovernment,theconsumerpublicandthegeneralpopulation.

Thechallengefordesignatedoperatorsistostrikeabalancebetweenthecommercialorientationofamodernpostalenterprisewithclearbusinessandprofit-makingobjectivesanditsotherside,thatofanenterprisewithahighsocialconsciousnessandapublicresponsibility,includinggovernmentalobligationsrelatingtotheuniversalpostalservice–itsraisond'être.Inthebusinessworldofdesignatedoperators,thesetwodimensionsarenotcontradictorybut,rather,mutuallycomplementary.Thecloserthedesignatedoperatoristothepublic,thebetteritsbusinessprospects,particularlyatthistimewhentheInternetisbeginningtogeneratebusinessinwhichthedesignatedoperatorcanserveasalogisticsserviceproviderintransactionsbetweenbuyersandsellersforthephysicaldeliveryofmerchandisepurchasedonline.

Thedesignatedoperatormustserveallsegmentsofsociety.Todothis,itwillneedtolookatcertainareasasthebasisforimprovingitsefficiencyandproductivity.

Thetopmanagementofthedesignatedoperatorshouldbecontinuouslyaskingitselfthefollowingquestionsinpursuitofitsbusinessobjectives:

• How up-to-date is the technology used in the service delivery process?

• What are the obstacles to integration in each phase of operations?

• How well trained is the workforce compared with the competition?

• What are the market risks?

• What administrative problems does the current production process engender?

• Is the enterprise gaining or losing value?

Ministry or department Enterprise Corporation

• Attachedtogovernment

• Fewifanycommercialpractices

• Poorqualityofservice

• Someautonomy

• Soundcommercialpractices

• Betterqualityofservice

• Fullautonomy

• Fullcommercialpractices

• Highqualityofservice

1.2

Growth factors

1.2.1

Concept of corporatization

181181

Thebusinessactivitiesengagedinbythedesignatedoperatormayincludevariousproductlines,aspartoftheserviceportfolioavailabletoitscustomers.Postalproductscanbeclassifiedin"families"asawayoftargetingsaleseffortsandfacilitatingregularevaluationsoftheproductsavailabletopostalcustomers.

Thefollowingisasuggestedclassificationschemeforthispurpose:

Family Product and service line

Messages Letters,postcards

ExpressmailEMS(documentsand

goods)

Parcels Expressmail,ordinarymail

DirectmarketingPrintedmatter,directmailadvertising,businessreply

mail,CODservice

FinancialservicesMoneyorders,cheques,billpaymentservice,

savings

ProductsPhilately,envelopes,third-

partyproducts,etc.

ElectronicservicesDigitalcertification,

electronicmailboxes,etc.

Thistypeofmarketsegmentationisawayofvisualizingtheperformanceofeachproduct,settingprioritiesforpromotionaleffortsonaparticularmarketandfacilitatingmarketingactivities.

Thereisnoneedforseparateflowsinoperatingprocessesforpostalproductsandservices.Asharedoperatingprocesscancutcostsandoptimizetheuseofresources,whilerespectingtheindividualfeaturesandrequirementsofeachproductandservice.

Therehasbeensomefluctuationinactivityinthemessageservicesegmentofthepostalmarket.SeriouslyunderthreatfromtheInternetandrelatedapplications,thissegmenthascontractedatanaveragerateof3.3%peryear.Somecountrieshavealsoseenafall-offinthevolumeoflettermailowingtothegrowingnumberofprivateoperatorspresentonthemarket.Thismeansthatinadditiontothemarketshrinking,thedesignatedoperatorislosingmarketsharetothecompetition.

Theimportanceofso-called"lettermail"productstothepostalindustryshouldmakethemthefocusofserviceofferings.Eachcountrywillneedtodecidewhetherallorpartofsuchservicesshouldbereserved,whereapplicable,forthedesignatedoperator,establishingtheconditions,limitsandfeaturesofthispostalbusinessarea.

Theneedforaffordablepricingtoensuretheaccessibilityofuniversalpostalservicesrequiresanin-depthstudyofwaysandmeansofmakingservicedeliveryeconomicallyviable.This,inturn,willrequireamethodicalevaluationofthecurrentuniversalpostalservicefinancingsystem.

Thedesignatedoperatoralsoneedstofocusontheparcelsegment,tostrengthentheviabilityofmailing,transportationanddeliveryservicesforpostalparcels.Greaterversatilityandtheavailabilityofmoreshippinganddeliveryoptionsareguaranteedtoimproveitscompetitivenessinthisnichemarket.Factorssuchascapacity,weight,packaging,flowdispersionandthenumberoftransferortranshipmentpointsareallelementsthatneedtobetakenintoaccountinthepreliminarycostanalysisforthisservice.

Sucheffortsmakesenseintoday'spostalenvironment,inwhichtherearenolongeranynationalboundariesasfaraspostalserviceoperatorsareconcerned,particularlyinthelettermailandparcelsegmentsofthepostalmarket.Customerneedsforfaster,safer,higher-qualityserviceshavebeendrivingtheemergenceofpostalmega-businesses,whichgenerallyofferglobalservicesforcertainspecifictypesofproductswhosedomesticmarketshavebeenopeneduptocompetition.Thus,globalizationisafact,andpublicpostaloperatorsneedtobeespeciallywellpreparedtomeetthischallenge.

1.2.3

Customer needs

Designatedoperators,particularlythoseoperatingunderclosegovernmentsupervision,tendtodevelopserviceswithout"listening"totheirmarket.Theyspeculateastomarketneedsforaparticulartypeofservice,developtheservice,dolittle(ifany)advertisingandthencannotunderstandwhyitsusefullifeiscutshort.

Thebestwaytosucceedwithanewserviceisbyconductingmarketresearch,whichisoneofthemostimportantfoundationsfordecisionmakingprocesses.

1.2.2

Postal business areas

182182

Thestudiesandevaluationsconductedaspartofthemarketresearchprocessrequirethecollectionofthefollowingtypesofdata:

• Quantitativeandqualitativemarketdatabased on facts and their interpretation;

• Data on market behaviour and its impact onsalesandprofits;

• Customer opinions on the postal enterprise, its products, workforce, policies and competency;

• Studies of market trends, taking into account the global marketplace, successful products, and differences in product qualityandpricing;

• Suggestions with respect to the new product and market from suppliers, sellers and consumers, consolidated through market research to produce aggregated data on the rationale for launching the product, market trends, and the need to expand the product line and take advantage of available production capacity;

• Data on seasonal factors;

• Data on market area potential and expected sales by product, region, area, period and corresponding purchasing potential.

Marketresearchbythedesignatedoperatoronaproductabouttobelaunchedonthemarketshouldhelpanswerthefollowingtypesofquestions.

a. Marketing issues: › Is there a market for the new product?

› How big is the market for the product?

› What basic, operational and commercial features should the product have?

› How much competition is there for the product?

› What market segment is being targeted and can be penetrated by the product?

› At what price should it be sold?

b. Operational issues: › Does the postal operator have the

capacity to deliver the service as designed?

› What is its production cost?

› Canitmeetaspecifiedstandardofquality?

c. Operational and human resource-related issues:

› Is there trained labour available for this production process?

d. Marketing and human resource-related issues:

› Is there a trained sales force for the new product or service?

e. Marketingandfinancialissues:

› What sales volume is needed to recoup the original investment in the product?

f. Operationalandfinancialissuesfortopmanagement:

› Dotheexpectedbenefitsoftheproduct justify necessary investment?

Thissetofquestionsisanexampleoftheeffectiveintegrationofdifferentorganizationalunitsandfactorsintheprocessoflaunchinganewproductontothemarket.

Itisimportantthatthestudyprocessalsoincludeanexaminationofthesituationofallmajorcompetitors.

Thenextstepafterestablishingtheproduct'sacceptanceistoframeamarketingpolicyandsettleallissueswithrespecttoproductpricinganddiscounts(forbulk,longerdeliverytimes,presorting,etc.).

Hybridmailisasolutiondesignedtomeetchangingcustomerneedsandisanindicationofhowpostaloperatorsareadoptingnewinformationandcommunicationstechnology.Inadditiontohybridmail,therearenewelectronicpostalservicesinthebusiness-to-business(B2B),business-to-consumer(B2C)andothersegments,whichcanbeexploitedbythedesignatedoperator.Thefactorstobetakenintoaccountinthistechnology-drivenareainclude:

• changesintechnology;

• anyresearchcentres,institutesanduniversitieswhichareormaybeinvolved;

• existingtechnologicalresearchprogrammes;

• potentialeconomiesofscale;

• theextentofskilledlabourrequirements;

• capitalcostsofmarketentry.

Inshort,satisfyingcustomerneedsmeansgaininganunderstandingofsuchneedsthroughmarketresearchandstudyandbeingpreparedtomeetidentifiedneeds.

183183

Thenextstepafterestablishingtheacceptabilityoftheproducttobelaunchedontothemarketandexaminingotherexistingproductsistostandardizetheproductionline.Thedesignatedoperator'spostalserviceoperatingprocessisgraphicallydepictedinthefollowingflowchartillustratingthedifferentstagesofthebasicmailacceptance,sortinganddeliveryprocess.

The following factors will need to be taken into account for a more thorough evaluation of service operating conditions:

a. Operating facility › Location and corresponding

advantages › Size (capacity) › Safeguards against strikes, sabotage, fire,etc.

› Pleasant work environment › Maintenance of buildings and

machinery

b. Facilitiesandequipment › Extent of use › Are they used properly? Are they

modern and state-of-the-art? › Are they in good condition? › Preventive maintenance programme › Corrective maintenance › Level of spending on maintenance › Occupational safety and security

measures

c. Production process › Productivity index › Usage of installed capacity › In-plant layout

.

Thestudyofthesefactorsisfollowedbyanefforttoadapttheprocessflowtomodern-dayrealities,toimproveserviceoperatingconditions.

Technologicaldevelopmentshouldbeanintegralpartofanyongoing,wellsynchronizedplanningandreformprocess.Itmakesnosensetoinvestindigitalprocessingtechnologyorautomaticsortingequipmentifthecountrydoesnotevenhaveapostcodesystem.Nordosuchinvestmentsmakeanysensewithoutasufficientvolumeofmailtojustifysuchexpenditurefromaneconomicstandpoint.

Thus,thesatisfactionofmarketneedsrequiresthepromotionofinvestmentinappropriatetechnology(trackandtrace,onlinepaymentservices,hybridmail,financialandelectronicpostalservices,etc.)suitedtoprevailingconditions.

UPUtechnicalcooperationactivitiesinthisareaareunderpinnedbyanumberofcountriesreadytohelpsetpriorities,designoperationalstructuresandshareinformationandtechnology.Designatedoperatorswhichhavenotyetmasteredthistypeoftechnologyshouldavoidtryingtodeveloptheirownsolutions.Designatedoperatorsinothercountrieshavealreadytriedandtestedanumberofdifferentoptionsandarereadyandwillingtosharetheirknowledgeandexperience.Thiscouldhelptopreventtheunnecessarywastageoftime,moneyandeffort.

Acceptance Transport Sorting Transport Delivery

Generic mail flow chart

1.2.4

The postal product and

production process

184184

Thedesignatedoperatorrequiresanumberofinputsforserviceoperationandtheconductofitsbusinessactivities.

Thereisawholelistofrequiredoperatingequipmentfortheperformanceofvarioustypesofwork(chairs,mail-openingtables,mailsortingtables,carts,stackingequipment,etc.)Buildingsmustalsomeetcertainphysicalrequirementstocreateaproductiveworkenvironment.

Availableresourcesneedtobefocusedonoperatingprocessesforservicedeliverybythedesignatedoperator.

Acommonmistakeistohavemodern,state-of-the-artadministrativeequipmentwhilelackingthenecessaryoperatingequipment.Operationsshouldgettoppriorityintheallocationofresourcesbythedesignatedoperator.

Thus,governmentsmustensuretheavailabilityoftheinvestmentfundsrequiredforthedesignatedoperatortoexpandandbuildmarketsharewithaviewtobecomingaself-sustainingenterprise.Boththegovernmentandthedesignatedoperatorneedtorealizethathumanresourcesarethemainfactorsofproductionandenginesofdevelopmentand,thus,theirmostimportantasset.

Accordingly,postalworkersmustbeproperlypreparedandtrainedtoperformtheirassignedtaskstominimizetheriskofinvestmentcapitalloss.Anassessmentofthepostaloperator'shumanresourcemanagementsystemshouldexaminethefollowingfactors:

• Attitudes towards, and the importance attached by senior management to, the human factor in the organization;

• The effectiveness of recruitment, screening and hiring programmes and of training and promotion programmes;

• The legal status of postal workers (are they civil servants?);

• The turnover rate; • The absentee rate; • The magnitude and types of worker

grievances; • Promotion prospects, the job ladder and

wage scale; • Benefitpackage; • Existence of appropriate replacements for

key job positions; • Organizational climate and heath; • Knowledge, attitudes and behaviour with

respect to policy guidelines; • Worker training and skills; • Training and skills of sales personnel.

Asarule,thelevelofinputsshouldbecommensuratewiththelevelofoutput.Anexcessofinputsingeneralandofhumanresourcesinparticularraisesoperatingcostsandlowersproductivity,compromisesprocesssafety,requiresclosersupervision,andcausesduplicationsofeffort.

Itisbesttohavejustenoughwell-prepared,productive,well-paidworkers.

1.2.6

Business focusThegoalistomotivateandpreparethedesignatedoperatortorisetothechallengeofdoingbusinessinacompetitivemarketplacewithaviewtomakingitsoperationsself-sustaining,whilecontinuingtoensuretheprovisionoftheuniversalpostalservice.

Thesuccessofeffortsbythedesignatedoperatortoimproveservicequality,buildmarketshare,increaserevenuesandbettersatisfycustomerneeds,whilecontinuingtoprovidetheuniversalpostalservice,shouldboostitsself-confidenceanditsvalueintheeyesofthepublic.

Thisisa"fail-safe"approachtostrengtheningthedesignatedoperatorandimprovingitscompetitiveness,itsresponsivenesstochange,anditsabilitytoadapttoitssurroundingenvironmentandtakeonandmeetthechallengesitmustfaceinthepublicinterest.

1.2.5

Inputs and outputs

185185

1.3.1

Focus of the designated

operator

Everycountryhasanorganizationinchargeofprovidingpostalservicesgovernedbyaspecificlegalframeworkthatestablishesitsdutiesandresponsibilities.

Intheemergingpostalenvironment,itisvitalthatlegislationgoverningthedesignatedoperatorgiveitacertainamountofoperationalflexibility,orenoughfreedomofactiontoenableittocompetewithoperatorsonthepostalmarketonalevelplayingfield.Thissamelegislationwillalsoneedtodefineuniversalpostalservicesand,ifapplicable,thescopeofthereservedserviceareafinancingthecostoftheuniversalpostalservice.

Ineffectivelegislationhamperingthedevelopmentofthedesignatedoperatorwillcreateserviceoperatingdeficitsrepresentingadrainonthepublictreasury,weakeningandeventuallypreventingthedesignatedoperatorfromfulfillingitsuniversalpostalserviceobligations.Thecompetitionisalwayslookingtotakeadvantageofanyopportunitytoparalysethedesignatedoperatorinordertodominatethemarket,sometimestothedetrimentofpostalcustomers.

Theexistenceofaregulatorybodyisfundamental,butevenifthereisnotone,challengingyetrealisticandattainablebusinessgoalsmuststillbesetforthedesignatedoperatorwhileacknowledgingitsindependentbusinessmanagementauthority.Thelegalframeworkgoverningthepostaloperatorwillbeakeyfactorinitssuccess.

Thegovernmentmustenactlegislationforthedesignatedoperatorinkeepingwithnationalconstitutionalprovisionsenablingittocompeteonanequalfootingwithprivateserviceoperatorsonthepostalmarket.Simplyput,thedesignatedoperatorshouldbegovernedbyprivateratherthanpubliclaw,likethelawsgoverningitsprivatecompetitors.

1.3.2

Performance of the designated

operator on the postal market

Goalssetforthedesignatedoperatorshouldbedynamicandtime-specific.Targetswithrespecttoservicedeliveryconditionsshouldbepublicknowledgesothatthepubliccanhelpmonitorcomplianceandcometorealizetheimportanceofthepostaloperator'saspirationsandneeds.

Eachcountry'sdesignatedoperatorispartofaglobalnetworkwithwhichitneedstomaintainoperationalties.Italsohasadomesticservicenetworkunparalleledbythatofanyotherpostaloperator.Asaresult,itisnotuncommonforprivateserviceoperatorstooccasionallyusetheinfrastructurenetworkofdesignatedoperators,givingthelattergenuinecompetitiveadvantages.Thesocialinterestofbringingpeopletogetherandprovidingthecountrywithefficientandeffectivecommunicationsservicesnotwithstanding,theoperationofuniversalpostalservicesmustbepredicatedonanappropriatesystemofcompensationtoensuretheviabilityofservicedelivery.

Thequestionofhowtosecurenecessaryfundingwithoutraisingthecosttotheconsumerwillneedtobeexploredindepth.Thereisnostandardformulaforsuccess,onlyashortlistofsuggestedoptions,eachofwhichhasitsadvantagesanddisadvantages,asdiscussedatlengthinmoduleIIoftheguidedealingspecificallywiththeuniversalpostalservice.Examplesinclude:

• direct government subsidies;

• contributions payable by the postal service industry;

• reserved services operated under an exclusive franchise;

• incomegeneratedbyprofit-makingoperations in postal business areas open to competition.

Thegovernmentwillneedtopayspecialattentiontointernationalpostalservices.Operationalstructuresforthehandlingofinternationalexpressitemswillneedtoprovideahigh-qualityservice.Designatedoperatorsarelosingcustomersthatsendinternationalitemsduetothepoorqualityoftheservicesprovidedbydesignatedoperatorsinothercountries,whichiscausingcustomerstoturntocompetitorsdespitehigherprices.

1.3

Service operation

186186

Insuchcases,therearethreelosers,namelythedesignatedoperatorinthecountryoforigin(whichlosescustomers),thedesignatedoperatorinthecountryofdestination(whichlosescredibilityandincomefromterminalduesanddeliveryfees)andthecustomer,whoisforcedtopaymoreforanequivalentservicetothatprovidedbythedesignatedoperator.Thepricesandstandardsofqualityofthedesignatedoperatorserveasbenchmarksforotherserviceoperators.Thus,thebetterthequalityoftheservicesprovidedbythedesignatedoperator,thebetterforthegeneralpublic.

Inorderforthedesignatedoperatortoproperlyperformitsrole,itneedstotakestockofwhereitisandinwhatdirectionitisheading.Animportantstepinthisregardistocomprehensivelyassessitsservices,includingthedeliveryconditions,qualitystandards,coverageanduniversalityofthoseservices;itsself-awareness;andotherplayersonthepostalmarket.

Areformprogrammeforthedesignatedoperatorwillrequirebroad-baseddiscussionatalllevelsofitsworkforcetoovercomeanynaturalopposition.Thegoalistoraiseawarenessandtosensitizeandappeaseallemployeeswithaviewtoovercominganyobstacles.Thebestapproachforensuringasuccessfuloutcomeistransparency.

Thegovernment,whichhasthemainresponsibilityforlayingthenecessarygroundworkforsocialintegration,tobringthenationtogether,willneedtoworkthroughitsvariouscabinetministriesandgovernmentbodiestohelpreshapethedesignatedoperatortofunctioninacompetitiveenvironmentasdescribedinthisguide.Thisisnotsimplyataskfortheministryresponsibleforthepostalsector,butoneforallcabinetministriestoworktowardstogether.

Aspecialeffortmustbemadetobuildawarenessoftheimportanceofenactingenablinglegislationasthebasisforthepostalreformprocess.Theexistenceofaregulatoryagencywillensurethatconditionsonthepostalmarketareinkeepingwiththeprovisionsofsuchlegislation.

1.3.3

Enabling environment forfulfilling

the function of the designated

operator

187187

Thesustainabledevelopmentofanyorganizationispredicatedonaknowledgeofitssurroundingenvironment,ofchangesaffectingtheorganization,oftheneedsofthevariousplayersinsuchanenvironmentand,lastbutnotleast,ofitsstrengthsandweaknessesinmeetingsuchneeds.Thus,thefirststepinthedevelopmentofthedesignatedoperatorisanassessmentofitsstatus,includingananalysisofitscurrentstrengths,weaknesses,opportunitiesandthreats(SWOTanalysis).

Thisrequiresaseriesofstudiestoestablishcurrentconditionsonthepostalmarketandtherelativepositionofthedesignatedoperatorcomparedwithothermarketoperators.Amorecomprehensiveassessmentmeansamoreclearlydefinedandbetter-organizedefforttohelpputthedesignatedoperatoronthepathtodevelopment.

Theobjectiveofanyassessmentistoevaluatethepastandpresentstateofaparticularphenomenon,inthiscase,thepostalmarketandthedesignatedoperator.Thus,thegoalatthisstageisnottospeculateastothefuture,whichisataskbetterleftfortheprospectiveanalysisdiscussedinsection2.2belowandfortheplanningprocess.Accordingly,thisphaseofworkdoesnotincludeprojectionsandforecasts.

Eachcountry'spostalmarkethasitsownuniquefeaturesshapedbytheactivitiesofitsdesignatedoperatorandbyeconomic,social,geographic,technological,politicalandlegalfactors.

Aclearunderstandingofthesefactorsisessentialforanassessmentofconsumerneeds,marketpotential,favourableandunfavourableserviceoperatingconditions,regionaldifferences,differentbusinessareas,andtrendswithapositiveandnegativeimpactonthefutureofeachsucharea.

Marketresearchisanongoing,unendingprocess.In-depthmarketresearchhelpsstrengthenthedesignatedoperator'smarketmanagementculture(competitorintelligence)which,inturn,helpsitframesounderstrategiesandbuildbetterrelationswithallpartiesinfluencingitsperformance.

Thefollowingpagescontainbasicguidanceforcompilingquantitativedata(physicalvolumesandvalues)andqualitativeinformationonthedomesticpostalmarket.Thesegeneralguidelinesarepresentedforreferencepurposesonlyand,wherenecessary,mustbeadaptedtospecificconditionsineachcountry.

Step 1 – Demarcation of business areasCurrentserviceofferingsbythedesignatedoperatoraredesignedtosatisfyconsumerneeds,whichbasicallyinvolve: • communications; • themovementofgoodsandmerchandise; • financialtransactions; • salesofotherpostal-relatedproducts.

Theadditionofspecificqualitiesandfeaturestothesebasicneedsshapesthetypesofproductsandservicesdevelopedbythedesignatedoperator.Thus,acommunicationsneedmaybemetbyaletter,printedmatter,anEMSitemorevenaparcel.Thoughthebasicneedisthesame,eachoftheseservices,withitsspecificqualitiesandfeatures,satisfiesdifferentgroupsofconsumers,brokendownintomarketsegmentsorsub-segments.Thisbreakdownofso-called"businessareas"facilitatesdealingswitheachmarket.

Reforming and developing the designated operator

2

2.1

Assessment

2.1.1

Research on the postal market,

needs and trends

188188

Thecorebusinessareasonthepostalmarketare:

Messages: Thisincludesletters(domesticandinternational),postcardsandregisteredletters,aswellasenvelopes,aerogrammesandrelatedproducts(communications).

Direct marketing: Thisincludesalltypesofprintedmatter,businessreplymailandnon-priorityitemscontainingotherbusinessadvertisingandpromotional,politicalorhumanitarianmaterials(communications).

Parcels:Thisincludesnon-priorityparcelsweighingupto30kg,packagingmaterials,adhesivetapeandotherrelatedproducts(physicalmovementofgoodsandmerchandise).

Express mail service: Thisincludespremium(door-to-door)urgentdeliveryservicesforenvelopesandparcels,referredtoasdomesticandinternationalexpressmailservice,andotherproducts(physicalmovementofgoodsandmerchandise/communications).

Financial services: Thisincludesfundstransferservicessuchasmoneyorders,third-partypaymentprocessingservicesforsendingandreceivingpayments,andotherpostalfinancialproducts(financialtransactions).

Philately and convenience items: Thisincludessalesofproductsnotdirectlyrelatedtothepostaloperator'sowncorebusinessareas,suchasphilatelicproductsandotherproductsmarketedthroughthepostalnetwork.

Thesecorebusinessareascanbeexpandedtoincludeotherareassuchasretailgovernmentservices,integratedlogistics,electronicpostalservicesandsoon.Likewise,wherenecessary,theycanbefurthersubdividedforabetterunderstandingofnichemarketswithsimilarfeatures.

However,theprocessofunbundlingorsegmentingthebusinessactivitiesofthedesignatedoperatorisbestapproachedinphases,beginningwiththecollectionofmoreaggregatedatawhich,oncesuccessfullyanalyzed,canbebrokendownduringasecondroundofstudiesandanalyses.

Theoutputfromthisstepisatableshowingthedifferentbusinessareasinthatparticularcountry,theproductsandservicesincludedineachareaandthedefinitionofeachcorrespondingproductorservice,asillustratedintheexampleprovidedbelow.Insofaraspossible,theterminologyusedshouldbeconsistentwithstandardmarketusage.Forexample,giroisa"moneyorder"inpostaltermsanda"fundstransfer"inbankingterms.Thisthoroughnesswillfacilitatethecollectionandprocessingofcompetitorintelligenceinsteps8and9.

Business area

Products and services

Definition

Messages

DomesticlettersCurrent,personalcorrespondenceweighingupto2kg

Internationalletters

…………………

…………………

………… …………………

Direct marketing

Printedmatter …………………

Businessreplymail

…………………

………… …………………

…………………

………… ………… …………………

Thepackageofproductsandservicesdepictedinthistablemustrepresentaminimumof80%oftheassessedvalueofthemarketinquestionand,together,mustaccountforatleast80%oftheearningsofthedesignatedoperator.

Step 2 – Mapping out of customer segmentsThepostalmarketisdividedintotwomainblocks.Thefirstisthatofindividualsrequestingproductsandservicesprimarilythroughthepostofficenetwork.Thisconsumergroupmakesuptheretailsegmentofthepostalmarket,whichcanbebrokendownbyincomebracket.Thistypeofbreakdownwillbenecessaryonlyifthismarketsegmentshowssignsofanyincomeelasticity.Forexample,lookingatthemessageservicemarket,itmaybenecessarytoascertainwhichincomebracketsuseaparticularproductmorefrequentlyforthepurposeofdevelopingbettermarketingstrategies.Thistypeofbreakdownshouldnotbemadebasedonarbitraryorrandomsubdivisions.

Whereverpossible,incomebracketsestablishedbythenational(official)censusbureaushouldbeusedtofacilitatecross-tabulationsofstatisticaldataandanalysesofstudyfindings.Wesuggestthatthefirstmarketanalysisincludeonlyagenericretail/household/individualcategory,breakingdownthisdatainensuingphasesofthestudyprocess.

Thesecondblockisthatofbusinessesrequestingproductsandservicesthroughpostoffices,aswellasthroughspecialcustomerserviceunitsorarrangements.

189189

Thisblockrepresentsthewholesalesegment,whichcanbebrokendownbybranchofindustryortypeofinstitution.Thebreakdownofthismarketsegmentwilldependonthefocusofnichetargetingefforts.Thus,thebreakdownoftheletter-mailsegmentwillnotnecessarilybethesameasthatoftheparcelssegment,sincepowercompanies,forexample,whilelargeconsumersofmessageservices,makeverylittleuseofparcelservices.Likewise,thestudyofthemessagesegmentmaynecessitatebreakingdownthe"financialinstitutions"categoryintobanks,creditcardcompanies,insurancefirms,pensionfundsandcollectionagencies.Whereverpossible,standardindustrialandorganizationalclassificationsestablishedbytheofficialresearchinstitutesormarketresearchcompaniesofthecountryinquestionshouldbeused.

Wesuggestthatthefirstmarketanalysisincludeonlythecustomercategoriesindicatedbelow,tailoredtocountryconditionsandthebusinessareainquestion(messages,directmarketing,parcels,expressmailservice,financialservices,philatelyandconvenienceservices),breakingdownorconsolidatingtheproposedclassificationsasapplicable.

Public utilities

Powercompanies

Waterandseweragecompanies

Gassupplycompanies

Conventionaltelephonecompanies

Cellulartelephonecompanies

Cabletelevisioncompanies

Other public service enterprises

Cellulartelephone,electroniclocatorservices,etc.

Financial institutions

Banks

Creditcardcompanies

Insurancecompanies,pensionfunds

Otherfinancialinstitutions

Brokeragefirms,collectionagencies,etc.

Government agencies and related organizations (not included in previous categories)

Socialsecurityadministration

Judicialauthoritiesandnotaryoffices

Legislativebodiesandpoliticalparties

Governmentoffices(national,provincialandlocal)

Other

Transitauthorities

Policedepartments

Otherorganizationsnotincludedinanypreviouscategories

Other

Hospitalsandclinics

Religiousandcharitableorganizations

Educationalinstitutions,universities

Other

Newspapers,magazines,publishingandgraphicdesignfirms

Businessesandindustriesnotincludedinanypreviouscategories

Step 3 – Breakdown of market areasTheanalysesofbusinessareas(step1)andcustomersegments(step2)arefollowedbyabreak-downandstudyofmarketareas.

Thistypeofstudyisimportant,forexample,inevaluatingtheperformanceofcompetitorscomparedwiththatofthedesignatedoperator,toestablishtheirstrengthsinservicingspecificareasandcustomersandinprovidingspecificservices.

Themarketcanbebrokendownbyprovince,departmentorcity,dependingontheconcentrationofdemandforpostalproductsandservices.

Themostrepresentativeareaswillneedtobebrokendownasfarasthecitylevel,whiletheleastrepresentativeareasmayneedtobeconsolidatedintoblocksofmorethanoneprovinceordepartment.Thereisnospecificruleforestablishingthenumberofmarketareas.

190190

However,ingeneral,thestudywillneedtotargetthosemarketareaswhich,together,accountformorethan80%oftotalrevenue(allsegmentscombined).

Thetablebelowillustrateshowtoestablishmarketareasandwhentosubdivideaparticulararea.

Theinternationalmarketwillneedtoberegardedasaseparateareaand,wherenecessary,maybedividedintoblocksofcountries.

Beingasthisanalysisprecedesactualfieldstudies,thepremiseisthattheincomeearnedbythedesignatedoperatorfromsalesofitsproductsandservicesrepresentsthepotentialofeachmarketarea.However,inthecaseofotheravailabledataonthe

marketpotentialofeachprovince(dataonGDPoranotherindexestablishingtherelativesizeoftheeconomyofeachprovince),thislatterinformationshouldbeusedinsteadofincomedata,asitbetterreflectstheefficiencyofthedesig-natedoperatorintappingagivenmarket.Consideringhowdifficultitcanbetocompiledataontheseexternalindicators,theexamplepresentedaboveusesincomefrommailingservicesasayardstickforthispurpose.

Inthisexample,countryXhasfourprovinces.ProvinceBhasthelargestconcentrationofincome.Together,provincesAandBrepresent88.2%ofthe"market"ofcountryX.CitiesB1,B2andA1,inthatorder,allwarrantconsiderationasseparatemarketareas,whoseincomefiguressetthemapartfromtherestoftheirrespectiveareas.

Step 4 – Configuration of supply (competition)Step4involvestheconfigurationofmarketsupplybasedonanswerstothefollowingmainquestions:

• Whatprivateoperatorsareactiveinthecountry? • Whatistheirannualincome?Aretherepublishedorotherwiseavailablebalancesheets?

• Inwhatareasofbusinessactivityaretheyengaged? • Whatproductsaretheyoffering? • Inwhatareasaretheyactive? • Whoaretheirmaincustomers? • Whichservicesareusedbysuchcustomersandinwhatnumbers?

• Whatisthesizeandlocationoftheirretailservicestructure?

• Whattransportationanddeliveryinfrastructuredotheyhave(whatistheirdailydeliverycapacity,howmanyworkersdotheyhave,howmanyvehiclesdotheyown)?

• Whataretheirexpansionandinvestmentplansforthemarketinquestion?

Market areaProvince or department

City

Revenue from

mailing services

Share of provincial or

departmental revenue

Cumulative share of total revenue

1 A

A1 55,000 55.0% 16.2%

A2 30,000 30.0% 25.0%

A3 10,000 10.0% 27.9%

Other 5,000 5.0% 29.4%

Subtotal 1 100,000 100% 29.4%

2 B

B1 110,000 55.0% 61.8%

B2 68,000 34.0% 81.8%

B3 20,000 10.0% 87.6%

Other 2,000 1.0% 88.2%

Subtotal 2 200,000 100% 88.2%

3 C and D

C1 15,000 37.5% 92.6%

C2 10,000 25.0% 95.6%

D1 10,000 25.0% 98.5%

Other 5,000 12.5% 100.0%

Subtotal 3 40,000 100% 100.0%

Grand total 340,000

Postal market of country "X"

Province A

Province B

Province C

Province D

• City A1

• City B1

• City C1• City A2

191191

Thefollowingquestionswithrespecttotheirproductandserviceofferingswillalsoneedtobeanswered:

• Whatistheirpricestructure? • Whatarethecomparativeadvantagesordisadvantagesoftheirproductsandservicesvis-à-visequivalentproductsorservicesofferedbythedesignatedoperator?

• Whatdeliveryorturnaroundtimesarepromisedtotheircustomersfordifferenttypesofservices?

Thisdatawillneedtobeaggregatedbybusinessarea,customersegmentandmarketareatofacilitateitsanalysis.Itisalsoimportanttobeawareofindirectcompetitionfromsubstituteproductsandservicesandofinternalstructuressetupbybusinessestoprovideservicescomparabletothoseofferedbythedesignatedoperator.

Step 5 – Characterizing postal service featuresThesupply(competition)analysisconductedinstep4willneedtoberoundedoutbyanefforttodiagramthemainfeaturesofthevariousproductsandservicesofferedonthepostalmarketmostvaluedbycustomers.

Thisdiagrammingprocesswillfacilitatethecomparativestudyengenderedbyquestionbinthesecondblockofquestionsunderstep4(oncomparativeadvantagesanddisadvantages).Thefollowingisapartiallistoffeaturestobestudiedfromboththecustomerstandpointandthatofthecompetition.Thepurposeofthisexerciseistoconfirmdeficienciesinserviceofferingsbythedesignatedoperatorwithrespecttothetypesoffeaturevaluedbycustomers,comparedwithservicesofferedbythecompetition.Thislistoffeatureswillneedtobetailoredtolocalmarketcharacteristicsanddynamics.

Business area Feature

Messages and direct marketing

Ì Serviceimage,brandorreputation

Ì Price

Ì Speed(fasterdeliveryorcompliancewithguaranteeddeliverytimes)

Ì Regularity(consistentdeliverytimes)

Ì Security(againstlossandtampering)

Ì Coverageofmailingservice

Ì Coverageofhomedeliveryservice

Ì Supplementalservices(registration,tracking,etc.)

Ì Relatedproducts(envelopes,postcards,etc.)

Parcels and express mail

Ì Serviceimage,brandorreputation

Ì Price

Ì Speed(expressmail:fasterdelivery)

Ì Speed(parcels:compliancewithguaranteeddeliverytimes

Ì Speed(promptclearancethroughcustoms)

Ì Regularity(consistentdeliverytimes)

Ì Security(againstloss,damageandtampering)

Ì Information(tracking)

Ì Paymentfacilities(credit,COD,etc.)

Ì Insuranceofcontent

Ì Customizedservicesforcontractcustomers

Ì Pick-upservice

Ì Coverageofmailingservice

Ì Coverageofhomedeliveryservice

Financial services

Ì Serviceimage,brandorreputation

Ì Price

Ì Speed(fasterturn-aroundtime)

Ì Servicecoverage

192192

Step 6 – Planning of data collection activitiesSteps1to5establishguidelinesfortheorganizedcompilationofmarketdataandintelligence.Step6establishesthetypesoftooltobedevelopedfortheconductofinternalandexternalstudies.Mostimportantly: • Designateateamofworkerstoassistwithdatacollectionefforts;

• Establishhowdatacollectionactivitiesaretobecarriedout(byanin-houseteamorcontractor);

• Establishthesourcesofinformationforeachstudytopic(in-house,outside,fieldorsecondarysources);

• Developamasterplanforallenvisionedstudiesestablishingworkschedules,procedures(interviews,questionnaires,counts,etc.),datacollectionsites,officialsincharge,etc.;

• Developinterviewingguidesandquestionnaires,datacollectionforms,proceduralmanualsforconductingresearchandmiscellaneoussupportingmaterials;

• Identifythesoftwaretobeusedfordataprocessingpurposes;

• Establishthetypesofreportstobeproducedfromthestudydata.

Step 7 – Conduct of in-house data collection activitiesSincethedesignatedoperatoristhemajorplayeronthepostalmarket,therearevarioustypesofdatawhichneedtobecollectedfrominternalunitswithinit,includinginformationonthefollowingfactors:

• Trendsintrafficvolumeandincomegeneratedbyproductandserviceofferingsinitsdifferentbusinessareas(ataminimum,overthepastfiveyears);

• Pricesandrateschargedforproductsandservicesincludedinthedifferentbusinessareasestablishedunderstep1;

• Breakdownoftrafficvolumeandincomebyweightand/orvalue;

• Breakdownoftrafficvolume(mailinganddeliveryservice)andincomeineachmarketareaestablishedinstep3;

• Breakdownofthevolumeofmailexchangedbythemarketareasestablishedinstep3;

• Breakdownoftrafficvolumeandincomeforeachcustomersegmentestablishedinstep2,bybusinessarea;

• Breakdownoftheretailnetworkineachmarketarea,bycity;

• Qualitativeevaluationofthefeaturesestablishedinstep5foreachproductorservice.

Asthemarketresearchprogresses,itmaybecomenecessarytocompileothertypesofin-housedataandperformotherstudies.

Step 8 – Collection and study of data from secondary sourcesWhereasstep7involvesthecompilationofin-housedatainthepossessionofthedesignatedoperator,amorecompletepictureofthepostalmarketrequiresanexaminationofdataonotherpostaloperatorswhich,inmostcases,isnotdirectlyaccessible.

Thismakesitnecessarytoresorttovariousso-called"secondary"sourcessuchasthoseoutlinedbelow:

• Governmentstatisticsonthepopulationofeachcity/marketarea,thebreakdownofpercapitaincome,thenumberofdwellingsandbusinesses,GDPbyeconomicsector,schools,hospitals,banks,etc.;

• Annualpublicationsontheperformanceandrelativesizeandscaleofthecountry'slargestbusinessesindifferentsectorsofeconomicactivity;

• Budgetsofgovernmentagenciesandinstitutions,particularlythebudgetitemforpostalandrelatedservices;

• Publishedbalancesheets,toestablishtheincomeofeachpostaloperator;

• Thenumberofwater,sewerageandpowercustomers;

• Thenumberofcustomers/subscribersforfixedandcellulartelephoneservices,cabletelevisionservices,etc.;

• Thenumberofactivechequeaccounts,currentcreditcards,pensionfundaccounts,etc.;

• Promotionalandadvertisingmaterialsfromspecializedmarketingfirms;

• Rateschedules,websitesandin-housepublicationsofotherserviceoperatorsonthepostalmarket.

Obviously,thisisonlyapartiallistofpossiblesecondarysourcesdesignedtoshowhowtocollectmarketintelligenceindirectly,bymeansofcomparisonsandextrapolations.

Othersourcesandindicatorscanbeusedtosupplementmarketanalysesandcalculationsofthevolumeandvalueofbusinessoneachmarket.Continualrefinementsofstudydataandfieldresearchcanalsoprovidevaluableinformationfortargetedoutputs.

193193

Step 9 – Conduct of field researchThetoppriorityifnotthesolepurposeoffieldresearchistocollectqualitativeinformationonthebehaviourofconsumersandcompetitorsexposingnewtrendsintheirhabits,preferences,strategiesandattitudes.

Fieldresearchmethodsincludedirectobservation,individualorgroupinterviewsandtelephone,mailoronlinesurveys.

Fieldresearchintheformofopinionpollsisdesignedtoevaluatedifferentfacetsofpostaloperators'relationswiththeircustomers–includingbothindividualandbusinesscustomers–toassesstheimportanceofdifferentfactorsvaluedbycustomersintheircontactswiththepostalorganization.Thesesurveyswillneedtore-examinethefeaturesoutlinedinstep5,toadjusttherelativeimportanceofidentifiedshortfallsinservicesdeliveredbythedesignatedoperatorupwardsordownwardscomparedwithotherserviceoperators.

Thoughusedsomewhatlessfrequentlyforthispurpose,fieldresearchcanalsohelpcollectinformationonthevolumeandvalueofbusinesstransactionsconductedorsumsinvestedbyagivenorganizationinusingthedifferentproductsandservicesincludedineachbusinessareaestablishedinstep1.Thiswillrequireanappropriatesizesampleandthepropertargetingofrespondentsinapositiontosupplysuchinformation.Theinformationproducedbythissamplesurveycanserveasabasisforextrapolatingthisdatafortheeconomicsectorrepresentedbythesurveyedorganizationsusingthemacroeconomicindicatorscompiledinstep8.

Step 10 – Consolidation of collected dataOnceallpreviousstepshavebeencompleted,thecollectedstudydatawillneedtobetabulatedandcharted,testingtheconsistencyofcorrespondingfiguresandqualitativeinformationthroughcrosschecksandfurtherconfirmationsofcorrespondingdata.

Forguidancepurposes,thefollowinggeneralmodelsforthetabulationofstudydataarebrokendownintofourinstructionalunits:marketsize,price,retailservicecoverageandcompetitiveness.

Step 10.1 – Market size

Table 1 – Market size by business area

Bu

sin

ess

area

Annu

al v

olum

e (N

o.)

% Annu

al v

alue

(USD

)

% Shar

e of

mar

ket v

olum

e (%

)

Shar

e of

mar

ket v

alue

(%)

Messages

Direct marketing

Parcels

Express mail

Financial services

Philately and products

Total

Thistableconsolidatesdataonthesizeofthepostalmarketintermsofthevolume(numbersofitems,productsortransactions)andvalueofbusinessandonthemarketshareofthedesignatedoperator.

Thedatapresentedinthistableisthesumofthedataproducedbyindividualstudiesofallpostaloperatorsinallbusinessandmarketareas.Foramorein-depthanalysis,thefiguresinthistablewillneedtobebrokendownbypostaloperator,typeofcustomer,productsandservices,ormarketarea.

Table 2 – Market size by type of customer

Typ

e o

f cu

sto

mer

Annu

al v

olum

e (N

o.)

% Annu

al v

alue

(USD

)

% Shar

e of

mar

ket v

olum

e (%

)

Shar

e of

mar

ket v

alue

(%)

Retail

Individual

Wholesale

Public utility

Financial institution

Government agency

Other

Total

194194

Foramorein-depthanalysis,thefiguresinthistablewillneedtobebrokendownbypostaloperator,businessarea,productsandservices,ormarketarea.Asindicatedearlier,theindividualcustomersegmentcanbebrokendownbyincomebracket.

Table 3 – Market size by area

Mar

ket

area

Annu

al v

olum

e (N

o.)

% Annu

al v

alue

(USD

)

% Shar

e of

mar

ket v

olum

e (%

)

Shar

e of

mar

ket v

alue

(%)

Area 1

Area 2

Area 3

Area 4

….

Area n

Total

Foramorein-depthanalysis,thefiguresinthistablewillneedtobebrokendownbypostaloperator,customersegment,productsandservices,orbusinessarea.Foreigncountriesaretobeconsideredasoneormoremarketareas.

Step 10.2 – Price

Table 4 – Price comparison by postal operator

Business area/product

Operators – Average price

A B C D

Messages

Domestic letter mail

International letter mail

....

Direct marketing

....

Parcels

....

....

Express mail

....

Financial services

....

Philately and products

....

Rememberthatallpricecomparisonsaretobebasedonthevaluedeliveredtothecustomer,aspertable6.Inotherwords,inprinciple,alowerpriceisnotacompetitiveadvantageunlessthecharacteristicsandfeaturesofferedtothecustomerarecomparable.

Step 10.3 – Retail service coverage

Table 5 – Retail service coverage

Market area

Operators – Number of retail facilities

A B C D

Area 1

Area 2

Area 3

Area 4

....

Area n

Total

Step 10.4 – CompetitivenessTable 6 – Comparative advantages and disadvantages

Business area: messages

Operator

Product/service: domestic letter mail

Comparable service

Advantage Disadvantage

A

B

C

….

TheAdvantage/Disadvantagecolumnspositionpostaloperatorswithrespecttothefeaturesestablishedinstep5andtheproduct/serviceinquestion.Instep11,thiscomparisoniscross-referencedwiththeconsumerpreferencesestablishedthroughthefieldresearchconductedinstep9todeterminetherealmagnitudeofanycomparativeadvantagesanddisadvantages.

195195

Step 11 – Data analysisTheanalysisconductedinthisstepisdesignedtoaddvaluejudgmentstotheconsolidatedstudydatathroughappropriatepermutations,crossreferencesandevaluationstodrawpreliminaryconclusionsfromthestudyprocess.

Thisisthetimetohighlightexistingstrengths,weaknesses,opportunitiesandthreatstofacilitatetheframingofsoundstrategiesforreformingthedesignatedoperator.

Thisstepinthestudyprocessisdesignedtoidentifyhigherandlowervaluebusinessareas,betterandworsepositionedcompetitors,moreandlessattractivemarketareas,theproductandservicecharacteristicsandfeaturesmostandleastvaluedbycorrespondingcustomers,thetypesofcustomerregardedaslargerorsmallerconsumersofaparticularserviceandmarket-relatedbarrierstothebuildingofmarketsharebythedesignatedoperator,

Thesecondissuetobestudiedaspartofthestrategicassessmentconductedasthebasisfordesigningareformprogrammeforthedesignatedoperatorhastodowiththelegislationgoverningthedesignatedoperatorand,inparticular,regulationsgoverningserviceoperationonthepostalmarket.

Thisrequiresabaselinestudyforthechartingofexistinglegislation,distinguishingbetweencoreissuesandissuesrelatingtotheextentoftheautonomyenjoyedbythedesignatedoperatortoefficientlyandeffectivelymanagenecessaryresourcesforfulfillingitssocialmission.

Thenextstepaftercompilingexistinglegislationisanassessmentofthesituationofthedesignatedoperatorundereachsuchinstrumentcomparedwiththatofotheroperatorsonthepostalmarket.Thepurposeistopinpointpositiveandnegativeelementsofthecurrentlegalframeworkforthepostalmarketasthebasisforframingappropriatestrategiesaspartoftheplanningphase.

Theexaminationofcoreissuesshouldaddressthefollowingpointsrelatingtothepostalmarket:

• Whatisthescopeofpostalregulations?

• Whichoperatorsfallwithinandoutsidethescopeoftheseregulations?

• Ismarketentrybynewoperatorssubjecttolicensing,registrationoranyotherrequirements?

• Isthereacleardefinitionoftheuniversalpostalservice?

• Isthereaseparationofuniversalpostalserviceoperatingfunctionsandpostalregulatoryfunctions?

• Ifthereisareservedserviceareatowhichthedesignatedoperatorholdsexclusiverights,isitclearlydelineated?

• Arethereanylegalrestrictionsontheactivitiesofthedesignatedoperatorinanybusinessorservicearea?

• Isthereanyadditionalgovernmentcompensationfortheuniversalpostalserviceobligationsimposedonthedesignatedoperator?

• Arethereanyregulationsestablishingconsumerrightsandtheresponsibilitiesofpostaloperatorsinthefaceofsuchrights?

• Areestablishedlegalmechanismseffectivelyappliedandenforcedinpractice?

2.1.2

Regulation of service

operation on the postal

market

Core issues and related issues

Procurement procedure - goods and

services

Market regulations Universal postal service

Core issues

Structure, powers and functions

Privileges and obligations

Separation operations vs. regulations

Customs regulations

Related issues Reserved area or monopoly

Service regulations

Service regulations

Taxes and exemptions Franking privileges

Price control

196196

Itshouldalsoaddressthefollowingpointswithrespecttotheorganization,statusandpowersofthedesignatedoperator:

• Isitgovernment-ownedorprivatelyowned?

• Intermsofitslegalstatus,isthedesignatedoperatoraministerialdepartment,agovernmententerprise,agovernment-controlledcorporationoraprivatelycontrolledcorporation?

• Whatisthesupervisoryministryofpostalservices?Istheresomekindoflink?

• Howarethepricesofservicesprovidedbythedesignatedoperatorsetandbywhomaretheyapproved?

• Whattypesoforganizationenjoyfrankingprivileges?

• Howandbywhomarethedesignatedoperator'sinvestmentpoliciesandplansapproved?

• Arelabourrelationsbetweenthedesignatedoperatoranditsworkforcegovernedbythesamerulesasintheprivatesector?

• Towhatrulesisthedesignatedoperatorsubjectwithrespecttomatterssuchasworkercompensation,hiringandfiringpracticesanddisciplinaryprocedures?

• Doesthedesignatedoperatorhavebudgetaryandfinancialautonomyformanagingitsincomeandexpenditure?

• Towhatrulesisthedesignatedoperatorsubjectinmatterssuchascontractingandprocurementofgoodsandservices?

• Isthecustomstreatmentofthedesignatedoperatorthesameasthatofotheroperatorsonthepostalmarket?

Theseandotherissueswillneedtobeexploredtopinpointopportunitiesandidentifyregulatoryconstraintsunderminingtheperformanceofthedesignatedoperatorandhamperingmarketdevelopment.

Thethirdphaseofthestrategicassessmentincludesanevaluationofthecompetitivestrengthofthedesignatedoperatoronthepostalmarket,inthefaceofcustomerneeds,projectedtrendsandtheexistinglegalenvironment.

Anumberofquestionswillneedtobeansweredaspartofthisprocess,namely:

• Areproductandserviceofferingsbythedesignatedoperatorresponsivetocustomerneedsandconsistentwiththoseofotherpostaloperators?

• Whatpercentageofthepopulationiscoveredbyretailandhomedeliveryservicesingeographicterms?

• Whatistheconditionofpostalservicedeliveryinfrastructure,includingpostalfacilities,equipmentandtechnology?Iscurrentcapacitycommensuratewithdemand?

• Whatstandardsofqualityandproductivityhasthedesignatedoperatorachieved?

• Isthenumberanddeploymentofmanagementandoperationalpersonnelinlinewithdemandunderthecurrenthumanresourcemanagementsystem?Areworkersproperlymotivated,preparedandtrainedtoperformbetterandbemoreproductive?

Thefollowingisanoutlineofthestepstobefollowedinpositioningthedesignatedoperatoronthepostalmarketandintheexistinglegalenvironment.Thisoutlineispresentedforguidancepurposesonlyandwillneedtobetailoredtothesituationineachcountry.

Step 1 – Performance of current product and service offeringsThegoalinthisstepistocompileinformationonthefollowingpointswithrespecttoeachproduct/service:

• Itsdesignandabriefdescriptionofhowitfunctions(servicedelivery,operationandpayment);

• Qualityassurance;

• Currentstandardofqualityachieved;

• Volumemarketedandincomeearned,ataminimum,overthepastfiveyears;

• Shareoftotalincomeoverthepastfivereportingperiods;

• Averageannualgrowthrateforthepreviousperiod;

• Averagepriceandpricebytypeofproduct/service(standardpricerange);

• Specificcommercial,operationalandtechnologicalconstraintshamperingeffortstoboostsalesoftheproductorserviceinquestion,ifany;

• High-demandmarketareas;

• Majorcustomers.

Thecurrentproductandserviceofferingsevaluatedinthisstepofthestudyprocessshouldaccountforatleast80%oftheincomeofthepostaloperator.

Theevaluationshouldpinpointstrengthsandweaknessestobeaddressedaspartoftheplanningprocess.

2.1.3

Competitive strength of

the designated operator

197197

Step 2 – Retail and product and service operation infrastructureThegoalinthisstepistogatherinformationonthedesignatedoperator'sretailserviceandmailsorting,transportationanddeliveryinfrastructure,includingdataonitscurrentphysicalcondition,leveloftechnologicaldevelopment,geographiccoverageandabilitytomeetcurrentdemand.

Ataminimum,theassessmentofretailserviceinfrastructureshouldgeneratethetypesofdataillustratedintable7below.

The"numberofinhabitantsperoffice"indicatorobtainedbydividingcolumn3bycolumn2willhelpassessthebalanceoftheretailnetworkwithinthegeographicareaservedbythedesignatedoperator.

Otherrelevantareasofstudyincludeofficeoperatinghours,customerflowperworkshift,thedegreeofautomationofretailserviceoperations,andthequantity,physicalconditionandtechnologicallevelofcorrespondingequipment(frankingmachines,scales,computers,counters,cashregisters,etc.).Theevaluationofmail-sortingoperationswillneedtoexaminemail-processingfacilities,includingbothmailsortingandgroundandairtransportationfacilities,providingdataon:

• thesizeofthefacilities(insquaremetres); • theirlocation; • environmentalconditions; • thequantity,physicalconditionandtechnologicallevelofcorresponding

Table 7 – Geographic coverage of the retail network

Population groups(1) (No. of

inhabitants)

Number ofoffices

Existing population(1)

Population servedPopulation not served

No. %Inhabitantsperoffice

No. %

Upto500

501to1,000

1,001to2,000

2,001to5,000

5,001to10,000

....

Total

(1)Currentpopulationdatashouldbetakendirectlyfromthelastpublishedcensusforthesmalleststatisticalunitforwhichcensusdataisavailable(i.e.atthedistrict,sector,wardorsimilarlevel)tohelptieeachofficetothespecificpopulationgroupserved.

Table 8 – Geographic coverage of home delivery service

Population groups(2) (No. of

inhabitants)

Number of letter carriers or mail districts

Existing dwellings(2)

Dwellings servicedDwellings

not serviced

No. %Numberpercarrier

No. %

Upto500

501to1,000

1,001to2,000

2,001to5,000

5,001to10,000

....

Total

(2)Thetotalnumberofexistingdwellingsshouldbetakendirectlyfromthelastpublishedcensusforthesmalleststatisticalunitforwhichcensusdataisavailable(i.e.atthedistrict,sector,wardorsimilarlevel)tohelptiethenumberofdwellingstothespecificpopulationgroupserved.

equipment(letter-sortingmachines,mailcarts,mailbags,containers,tables,etc.);

• dailyproductioncapacity,byworkshift; • operatingschedules; • theexistenceanduseofpostcodesinmail-sortingoperations;

• organization; • majorproblemsencounteredatthisstageoftheprocess.

Ataminimum,theassessmentofmaildeliveryinfrastructureshouldgeneratethetypesofdataillustratedintable8below.

Ingeneral,the"numberpercarrier"indicatorobtainedbydividingcolumn3bycolumn2isagoodassessmentofbalanceintheassignmentofdwellingunitstoeachlettercarrierfordifferentpopulationgroups.

Thestudyofthehomedeliveryserviceshouldalsoassess:

• thefrequencyofhomedeliveries(once,twiceorthreetimesaweek,etc.);

• thequantity,physicalconditionandtechnologicallevelofcorrespondingequipment(sortingframes,bicycles,pouches,uniforms,etc.);

• themotorvehiclefleet; • totaldailydeliverycapacity; • theexistenceanduseofpostcodesformaildeliverypurposes;

• thelocationofdeliveryunits(existenceofseparateunits);

• thepercentageofundeliverableandreturneditems;

• thetypesofitemforwhichhomedeliveryserviceisavailable;

• majorproblemsencounteredatthisstageoftheprocess.

Thisassessmentshouldalsoproducedataonthepercentageofmaildeliveredbyeachdeliverymode(homedelivery,postofficeboxesandgeneraldelivery),thedailyproductivityofeachlettercarrier,andthenumberofpostofficeboxesandtheirbreakdownbymarketareaorpopulationgroup(similartothebreakdownintable8).

Theassessmentofthetransportationnetworkshouldexamine:

• thelocationsserviced,resourcesused,operatingarrangement(in-houseorcontractcarriers)andcapacityofregulardomesticgroundandairtransportationnetworks;

• themake-upofthein-housevehiclefleet(numbersandtypesofvehicle),theirmanufacturingdatesandtheirusage(operationaloradministrative);

• thelocationsserviced,resourcesused,operatingarrangement(in-houseorcontractcarriers)andcapacityoftheregularurbangroundtransportationnetworkusedformailcollection,officeprovisioningandhomedeliverypurposes;

• majorproblemsencounteredatthisstageoftheprocess.

198198

Step 3 – Administrative organization and structureThegoalinthiscaseistoevaluatethedesignatedoperator'sinternalorganizationandstructure.Thequestionsposedinthisstepwillexaminecentralandregionaladministrativestructuresintermsoftheirfunctionsandmacro-activities,channelsofcommunication,decisionmakingprocesses,organizationalchartandlinesofauthority,skillsprofilesforkeypositions,physicalfacilities,andtechnology.Thisstudyshouldpinpointperceivedstrengthsandweaknesses.

Step 4 – Human resourcesThisstepisdesignedtocompileinformationonthestatusofthedesignatedoperator'shumanresources,specificallyasregardsthesubsystemsbelow.

Thefirstanalysistobeconductedaspartofthisstepreferstothedeploymentandaveragesalaryofpostalworkers,withcorrespondingstudydatatobetabulatedasillustratedintable9below.

Table 9 – Work area and salary

Market area

Retail service Sorting Transport Delivery Administration

No. $ No. $ No. $ No. $ No. $

1

2

3

....

Total

No-Numberofworkers|$-Averagesalary

Anotherimportantbreakdownhastodowiththeseniority(lengthofservice)ofpostalworkersbytypeofposition,asillustratedinthefollowingexample.

Table 10 – Length of service by job position

PositionUp to 1 year 1 to 5 years 5 to 10

years10 to 20

yearsOver 20

years

Lettercarrier

Clerk

....

TOTAL

Thedatainthistablecanbesupplementedbyabreakdownofpersonnelineachjobpositionbyageandgender.

Supply Deployment Retention Development Management

Recruitment

Selection

HR planing and deployment

Career developmentPerformance evaluation

Salaries

Benefits

Technical and administrative

training

Advanced training

Human resource management system

199199

Itisalsoimportanttolookattheeducationallevelofworkersinkeypositionswithintheorganizationbasedonthebreakdownintable11below.

Answerstothefollowingquestionscanalsofurnishimportantinformation: • Aretherespecificjobandcareerladdersandsalaryscalesfortheworkforceofthedesignatedoperatororisitsubjecttothesamegeneralrulesapplicabletoothergovernmentagencies?

• Howareworkersrecruitedandselectedbythedesignatedoperator?

• Isthisprocessconductedinternallyorissomeoutsideagencyinvolved?

• Whattypesoffringebenefitdodesignatedoperatorpersonnelenjoy?

• Whatistherequiredlengthofserviceforretirementofdifferentcategoriesofpersonnel?

• Whatisthelengthoftheworkweek? • Aretheredifferentworkshifts?Whataretheyandwhatjobpositionsareinvolved?

Trainingprocesses: • Dotheyincludeallpersonnel? • Howoftenaretheyconducted? • Aretherespecificannualbudgetappropriationsforthispurpose?Howlarge?

• Aretheyconductedin-houseoroutsourced? • Arethereindividualperformanceevaluationprocessesinplace?

• Istheorganizationalclimateconducivetobuildingself-esteemandstrengtheningworkerproductivity?Arethereregularstudiesofthisfactor?

Otherstudieswillneedtobeconductedtopinpointstrengthsandweaknessesinserviceoperation,accordingtoconditionsineachcountry.

2.1.4

Economic performance

Theeconomicobjectiveofanybusinessistomakeaprofit.Inprivateenterprises,makingaprofitmeanssatisfyingshareholders.State-ownedenterprisesarebornoutofpublicpolicyanddonottendtobeovertlyprofitseeking,althoughtheydoneedtomakeprofittofinanceinvestmentsgearedtowardsthemodernizationandexpansionoftheirservices.

Inthespecificcaseofpostalorganizations,manyofwhicharedepartmentswithincentralgovernmentstructuresorcabinetministries,moreoftenthannot,theeconomicobjectiveistokeepspendingbelowauthorizedbudgetceilings.Thisobjective,thoughnotexplicitlystated,causesthemtodisregardearningsandcaneventuallyleadtoslippagesinincome.

This,inturn,obligesthegovernmenttoprovidethenecessaryfinancingforoperatingexpenses,tostepupbudgetarycontrolsandtocutbackorcutoffinvestmentfunding,weakeningtheoperationsandmarketpositionofthedesignatedoperator.

Aclearassessmentofthesituationineachcountryrequiresanexaminationoftherelationshipofthedesignatedoperatorwiththegovernmentagenciesinvolvedinitseconomic-financialmanagement.This,inturn,requiresanswerstothefollowingquestionswithregardtotheextentoftheautonomyenjoyedbythedesignatedoperatorinthisarea.

• Doesthedesignatedoperatorhaveitsownbudgetorisitincludedinthebudgetofsomeothergovernmentagency?

• Areinternallygeneratedfunds,orincomefromsalesandinternationalaccounts,allocateddirectlytothedesignatedoperatorordepositedinthegovernment'sgeneralaccount?

Table 11 – Educational level by job position

Position Primary Secondary education Higher

Lettercarrier

Clerk

....

Total

200200

• Whichgovernmentagencyapprovesthebudgetforthedesignatedoperator?

• Areexpendituresofapprovedbudgetfundsauthorizedonanannual,monthlyorcase-by-case(i.e.per-procurement)basis?

• Doesthegovernmentcontributeinanywaytothefinancingofitsoperatingandinvestmentcosts?

• Isthedesignatedoperatorincludedinanygovernmentdevelopmentorinvestmentplan?

• Arethedesignatedoperator'saccountingpracticesthesameasthoseusedbyotherprivateenterprises?

• Wasthechartofaccountsdesignedspecificallyforthedesignatedoperatororisitthesameasthatusedbyallgovernmentagencies?

• Arefixedassetspickedupasassetsofthedesignatedoperatororincludedonthebalancesheetofsomeotheragency?

Oncethesequestionsareanswered,thenextstepistheconsolidationofeconomicperformancedataforthepastfiveyears.

Table 12 – Economic performance

ItemPeriod

Year5 Year4 Year3 Year2 Year1

Income

Sales of services

• Messages

• Directmarketing

• Parcels

• Expressmail

• Financialservices

• Productsandphilately

Internationalaccounts

Other

Governmentfunding

Expenditure

Personnel and related costs

• Salaries

• Fringebenefits

Supplies and commodities

• Fuel

• Othersupplies

Transportation

• Domestic

• International

Services

Taxes

Investments

• Buildings

• Equipment

Profit/loss

2.1.4.1

Economic-financialperformance

201201

Inadditiontoprovidingabreakdownofincomeandexpenditures,thedatacompiledintable12servesasasoundbasisforestablishingtrendsthroughoutthestudyperiod,asillustratedinthefiguresbelow.

Thistypeofchartcanbeusedtographicallydepictthebreakdownofincomeandexpenditureorthebreakdownofanysubgroupofthesetwoitems.Suchabreakdownhelpsestablishtherelativeshareofdifferentincomeorexpensecategoriesintotalprofitsorlosses,inorderoftheirimportance,andallowsforthetrackingofthesefiguresoverdifferentperiods.

Thistypeofgraphisbetterforshowingtrendsinincomeorexpenditureoveragivenperiod,clearlydepictinggrowing,stableandshrinkingcostandincomeitems.

Thissamesourcealsoprovidesmanyothertypesofdata,suchasthepatternandbreakdownofinvestment,governmentfundingandannualprofitorloss.

Financialstatements(mainlybalancesheetsandprofitandlossstatements)areanotherusefulsourceofinformationandserveasabasisforbalancesheetanalyses.Suchanalysesarepossibleonlyifthedesignatedoperatorhasitsowninternalassetsandmanagesitseconomicresourcesindependently.

Thebalancesheetanalysisisapowerfulresearchtoolinevaluatingthepastandpresenteconomic-financialsoundnessofthedesignatedoperatorandmakingforecasts.Itprovidesanimpartialassessmentoftheperformanceofmanagementpersonnelandcanmeasureliquidity,orthevolumeofliquidassetsoravailableresources.

Theinformationdrawnfromabalancesheetanalysisishighlytime-sensitive,sinceitiscategoricallytiedtotheorganization'sfinancialperformanceforaparticularreportingperiod.Thismakesitnecessarytoexamineseveralconsecutivefiscalyears,normallythreetofive,toestablishwhetherthereisaconsistentpatterninitsfinancialsituationand,ifso,toforecastitsfuturefinancialperformance.

Thebalancesheetanalysisusesthefollowingthreemainratios:

• LiquidityQuickoracid-testratio(ratioofliquidassetstocurrentliabilities,whereliquidassetsequalcashonhandandinbank+short-termassets);

Currentorworkingcapitalratio(ratioofcurrentassetstocurrentliabilities);

Solvencyratio(ratioofcurrentpluslong-termassetstocurrentpluslong-termliabilities).

• Capital structure or securityDebtratio(ratiooftotalliabilitiestoliquidassets,wheretotalliabilitiesequalcurrentpluslong-termliabilities);

Fixedcapitalratio(ratiooffixedtototalassets).

• ProfitabilityEarningpower(ratioofoperatingincometooperatingassets);

Incomefromsales(ratioofliquidtogrossoperatingincome).

Thisanalysiscanbeexpandedtoincludecountlessotherratios,dependingonthespecificsituationineachcountryandthenecessarylevelofanalyticaldetail.Anyorganizationcanbeinexcellenteconomic-financialshape,withalargeproportionofinternallygeneratedfunding,andyet,atagivenmoment,finditselfshortoffundsforthesettlementofitsdebts.

Thislatterfactor–theavailabilityofsufficientfundsforthesettlementofoutstandingdebts–determinestheorganization'sfinancialstandingorcreditworthiness.Theliquidityratiosoutlinedabovecanbeusedtoassessthedesignatedoperator'screditworthiness.

Breakdown of sales of services

25%

10%

20%

4%1%40%

Messages

Direct marketing

Parcels

Express mail

Financial services

Products andphilately

Trends in expenditure

0

20

40

60

80

100

120

Period

$

Personneland related

costsSupplies and commodities Transportation Services Taxes

-5 -4 -3 -2 -1

202202

Anotherimportantstepinthisphaseoftheassessmentisacomparisonofthedesignatedoperatorwithdesignatedoperatorsinothercountrieswithsimilarfeatures,mostlyintermsofgeographic,socialandculturalfactors.

Suchacomparisonwillprovideadditionalinformationonpreviousstudies,successesandfailuresandtheircausesandeffectsandonstrengthsorweaknessesinthedesignandimplementationofspecificstrategies.

Dependingonthesubject,itmaybenecessarytoexpandthescopeofthisstudytoquitedifferentdesignatedoperatorsinsearchofexamplesofexcellencewhich,inmanycases,arenon-existentinneighbouringorcomparablecountries.Technologicaldevelopment,legalreformandsimilarprogrammesoftenrequireabstractionsbasedonmoresophisticatedmodelswhichwillneedtobetailoredtolocalconditionssuchasmarketsize,culturalfactors,economicconditionsandsoon.

Thefollowingquestionisanexampleofthistypeofcomparison:

WhatconditionspresentincountryXenableittooutperformthedesignatedoperatorinthiscountry: Ì intermsofproductivity; Ì intermsofquality; Ì intermsofitseconomicperformance?

Thequestforexamplesofexcellenceshouldalsoincludebestpractices.

Thisconcludestheassessmentphasedesignedtoclarifythecurrentpositionofthedesignatedoperatorinthesurroundingpostalenvironment,whichcanberoundedoutbyanevaluationofexamplesofexcellence.

Thedatafurnishedbytheassessmentwillalsoneedtobesupplementedbyinformationonongoingprojectsbythedesignatedoperator,focusingonthoseinitiativesexpectedtohavearealimpactonitsposition.Smallerscale,one-offprojectscanbeevaluatedatanothertime,inanothercontext.

Studiesofselectedprojectsshouldincludeabriefdescriptionofeachproject,anoutlineofitsobjectives,costdataandinformationontargetedoutcomes.

2.2

Prospective analysis

(future trends and

projections)Thesecondphaseisthatofexploratoryresearchonthefutureofthepostalorganizationbasedonalternativescenarios,trendsandprojections.Thisisreferredtoasprospectiveanalysis.

2.2.1

Market trendsThestepsoutlinedinsection2.1.1aredesignedtoassessthecurrentstateofdemandonthedomesticpostalmarket.Uptothispoint,noattempthasbeenmadetolookatthefutureofeachproduct/service.

Anevaluationofmacroandmicroenvironmentalfactorsisagoodbasisforpredictingfuturemarketbehaviour.Thistypeofinformationisessentialindevelopingstrategiesandactivitiesdesignedtohelpthedesignatedoperatorcapitalizeontheexpectedgrowthorcontractionofdifferentbusinessareasorproducts/servicesaspartofitsplanningprocess,asawayofboostingdemand.Productandserviceofferingsonthepostalmarketareaffectedbycountlessdifferentfactors,includingeconomic,demographic,social,technologicalandquality-relatedfactors.

Asdiscussedinchapter1,examplesofexternalfactorsaffectingtheextentoftheuseofpostalservicesincludeGDPgrowth,populationgrowth,percapitaincome,theexchangerate,thegeographicdistributionofthedomesticpopulation,trendsinmigration,theliteracyrate,theInternetande-commerce,postalregulations,privatization,theactivitiesofotherserviceoperatorsandculturalhabits.

Internalfactorsaffectingserviceuseincludetheimageandreputationofthedesignatedoperator,thequalityofitsservicescomparedwiththoseofthecompetitionandgoodmarketcommunication.StudiesconductedbytheUPUandotherspecializedagenciesoffergeneralguidanceinthisarea,whichwillneedtobetailoredtothepostalmarketofeachcountry,asillustratedbelow:

2.1.5

Experiences of other

designated operators

203203

Market trends by business area

Business area Trend

MessagesLetters

Directmarketing

Parcels

Expressmail

Financialservices

Withthevarietyofdifferentfactorsatplay,itisimportanttofocusonthosewiththegreatesteffectonthepostalmarkettohelpprojectgrowthineachbusinessareaorproduct/serviceovertheforecastingperiod.

Inanyevent,thecalculationofannualgrowthratesisbynomeansadeterministicprocess,sinceitdealswithfuturebehaviour.Inotherwords,howeverrefinedthestudydatamaybe,thereisalwaysapossibilityoferror.Yearlyrepetitionsofthisexercisecanreducebutnotaltogethereliminatethemarginoferror.

Onewayofminimizingthisproblemisbyworkingwithtwoorthreedifferentscenariosinvolvingdifferentsetsofassumptionsandalternatives.Assuchassumptionsareborneout,aspecificcourseofactionistakenastheplanningprocessunfolds.

Thefollowingtableconsolidatesdataonannualmarketgrowthratesbybusinessarea.Thefiguresinthistableareexpressedaspercentagesandmaybeeitherpositiveornegative.Thetabulateddatacanbebrokendownbyproduct/service.

Table 13 – Projected annual rate of growth in market volume

Postal market – Average annual growth rate (%) – Scenario A

Segments Yea

r 0

Yea

r 1

Yea

r 2

Yea

r 3

Yea

r 4

Messages

Directmarketing

Parcels

Expressmail

Financialservices

Productsandconvenienceitems

Thesegrowthratescanbeappliedtotheconsolidateddataonmarketvolumepresentedintable1tocalculatetheannualmarketvolumebybusinessareaforeachyearoftheforecastingperiod.Intheeventthatavailablecontextualdatasuggestsariseorfallinaveragepricesonthepostalmarketduringtheforecastingperiod,useabreakdownsimilartotable7tocalculatetrendsinthisvariable.

Thisexerciseshouldnotconsiderannualinflation.Theriseorfallinpricesalludedtoaboveshouldreferonlytorealrates.Theseprojectionsofaverageannualpricesandmarketvolumecanbeusedtoconstructthefollowingtableforeachenvisionedscenario.

Table 14 – Market projections by business area

Year

Business area

Messages

Directmarketing

Parcels

Expressmail

Financialservices

Productsand

convenienceitems

1No.

$

2No.

$

3No.

$

4No.

$

5No.

$

2.2.2

Forecasting economic

performanceTheeconomicperformanceofthedesignatedoperatorasreflectedintheaggregateddatapresentedintable12willneedtobeprojectedoverthesamefive-yearperiodastheprojectionsofmarketsizediscussedintheprevioussection.

Thebasicassumptionunderpinningthispreliminaryforecastistheperpetuationofthecurrentsituationthroughouttheforecastingperiod,withtheadditionofcertainknownimpactfactors.Thisiswhatisreferredtoasthebaselineperformanceprojection.

Inmakingthistypeofprojection,thefollowingfactorsneedtobetakenintoaccountforthepurposeofestimatingfutureincome:

• Salesofservices;

• ProjectedannualGDPgrowthrateaccordingtoofficialpublishedfigures;

• Averageannualratehikeforthepastfiveyears,adjustedfortheaverageannualinflationrateoverthesameperiod;

• Internationalaccounts;

• Averageannualratecalculatedbasedonreportedfiguresforthepastfiveyears,asrecordedintable12;

204204

• ProjectedannualGDPgrowthrateaccordingtoofficialpublishedfigures;

• Governmentfunding;

• Estimateddeficit,orthedifferencebetweentheprojectedtotalfigureforallotherincomecategoriesandprojectedtotalexpenditurefortheyearinquestion;

• Other..

Projectionsofexpenditurewillneedtoconsiderthefollowingfactors:

• Personnelandfringebenefits;

• Anticipatedannualwagehikes;

• Expansioninworkforce(newhiring);

• Retirement;

• Suppliesandcommodities,transportation,servicesandtaxes;

• ProjectedannualGDPgrowthrateaccordingtoofficialpublishedfigures;

• Investments;

• Averageannualratecalculatedbasedonreportedfiguresoverthepastfiveyears,asrecordedintable12.

Theseprojectionswillneedtoberefinedbasedoninformationonotherspecificfactorsorphenomenaaffectingallorpartofaparticularincomeorcostitem(suchasachangeintaxliabilitiesasofsomefutureyear).Sincethebaselineprojectionneedstobeexpressedinconstantterms,i.e.basedentirelyonrealfluctuations,allprice-relateddatawillhavetobeadjustedforthereportedaverageannualinflationrateatthecountrylevel.Suchameasurewillpreventanymisleadingcomparisonofnominalvalues,whichareoftencontaminatedbyillusorypricehikes.Thisobservationappliestobothincomeandcostitems.

Thedataproducedbythebaselineperformanceprojectionisaggregatedasillustratedintable12.

2.2.3

Alternative scenarios

Forecastsofmarketsizeandeconomicperformanceforthenextfiveyearscanhelpclearlyestablishtrendsinthemarketshareofthedesignatedoperatorandpatternsinthefundingofitsexpenditureandinvestmentunderaninitialbaselinescenariowhich,essentially,perpetuatescurrentconditionsandassumptionswithrespecttotheoperationofthedomesticpostalmarket.

Thenexttaskistodevelopasmanyalternativescenariosasnecessarytoevaluatetheorieswithrespecttodeteriorationsorimprovementsinoperatingconditionsonthepostalmarketfromthestandpointofthedesignatedoperator.Thisisasimpleprocedureinwhichcriticalassumptionsandvariablesaregroupedaccordingtoexpectationswithrespecttothefuturecourseofdevelopmentofthesimulatedscenario.

Theselectionandbehaviouralevaluationofeachsuchvariableandassumptionisnotaone-manjob,butrequirestheinvolvementofexecutivesandspecialistsindifferentareasandwithdifferentskillsmixes.

Themodelpresentedbelowillustratesonesuchsetofassumptionsandvariablesandtheirpotentialestimatedimpact.Again,theseassumptionsandvariableswillneedtobetailoredtoconditionsineachcountry.Itisnotrecommendedthattheybeusedasis,withoutfirstmakingnecessaryadaptations.

2.2.3.1

Legalframework

Thefollowingtableisanillustrationofasampleanalysisofdifferentpossiblescenarios.Thefactorsconsideredandthetimingofcorrespondingchangeswillneedtobetailoredtoconditionsatthecountrylevel.

Eachfactoraddedtothebenchmarkscenarioswillneedtobedefinedandmappedoutindetailindiscussionswithinterestedstakeholders(governmentreformandoversightagencies,executives,etc.).

205205

Therearetwoapproachestotheconstructionofalternativemarketmanagementscenariosforthedesignatedoperator.

Thefirstapproachistocalculateincomefordifferentmarketsegmentsbasedonanevaluationofspecificprojects.Thetargetedoutcomefromsuchprojectsandtheirprojectedmaturationdateswillaffectfutureincome.Theconsolidationofdataontheeffectsoftheseprojectsandontrendsinmarketsizefortheforecastingperiodisagoodbasisforevaluatingprogresstowardsbuildingmarketshare.Thedisadvantageofthisapproachisthatitprecipitatescertainplanningactivitieswhosecommencementissomewhatprematureatthisstage.Theplanningprocess,whichisdiscussedatlengthinchapter3ofthismodule,isbasedonmorecompleteinformation.

Thesecondapproach,whichistheapproachtakeninthisguide,providesforthesimulationoftrendsinpricesandmarketshareovertheforecastingperiodforthepurposeofconstructingalternativescenarios.Thesesimulationsshouldbebasedonthepositionofthedesignatedoperatorvis-à-vismarkettrendsandthatofthecompetition,accordingtopreviousstudiesdiscussedearlierinthischapter.Thedataforeachalternativeorbenchmarkscenariowillneedtobeaggregatedbasedonthemodelpresentedintable16below.

Table 15 – Scenario 1: Changes in the legal framework (sample data)

Benchmark scenario 1

Assumptions and variables

PeriodYear 1 Year 2 Year 3 Year 4 Year 5

Ownership 100%government-owned

Separation of regulatory functions

No Yes

Legal status Cabinetministrydepartment Governmententerprise

Assets Tiedtotheministry Independent

Universal postal service

NoUPSobligation ExpandedUPSobligation

Reserved service area

Monopoly GovernmentcompensationforUPS(reservedarea)

Franking privileges Numerous Eliminated

Degree of administrative autonomy

Low Moderate High

Labour relations Civilservicesystem Sameasprivatefirms

Pricing policy Pricecontrolsandsubsidies Marketpriceswithnosubsidies

2.2.3.2

Marketmanagementbythedesignated

operator

206206

Theseprojectionsofmarketshareandpricemovementsrepresenttargetstobeattainedundereachbenchmarkscenario,influencingtheeconomicperformanceofthedesignatedoperator.Obviously,thesefiguresdependonaseriesofconditionsandapackageofprojectsandactivitiestobedesignedandstudiedin-depthaspartoftheplanningprocess,whenonesuchscenarioischosenasthebasisforfutureplanning.

Ingeneral,thisphaseofworkcanidentifynewbusinessopportunitiesandchangesinsupply-sideconditions(moreoffices,changesinoperatinghours,etc.)andintheformofexistingservicesassociatedwitheachbenchmarkscenariodesignedtoaddvalue(invoicing,turnaroundtimes,operatingprocess,etc.).

2.2.3.3

Operationalandtechnological

developmentofthedesignated

operator

Thethirdfacetoftheprospectiveanalysisinvolvestheconstructionofbenchmarkscenarioswithrespecttothefutureoperatingenvironmentofthedesignatedoperatoror,inotherwords,theconditionswhichneedtobepresentinitsoperatingplatformfortheattainmentofeachofthebenchmarkscenarioscontemplatedintheprevioussectiononmarketmanagement.

Thisrequiresthequantificationofneededchangesininfrastructure,inlevelsofserviceandinthephysicalandhumanresourcesusedinfurtheranceofeachestablishedmarketmanagement"target".

Table 16 – Calculations of projected trends in prices and in the market share of the designated operator (sample data)

Benchmark scenario 1

PeriodAssumptions and

variablesYear 1 Year 2 Year 3 Year 4 Year 5

MessagesMarketshare 40% 62% 65% 66% 67%

Pricetrends +13% +15% +9% +5% -

Direct marketing

Marketshare 30% 38% 45% 58% 70%

Pricetrends +10% +10% +3% +3% +3%

ParcelsMarketshare 2% 5% 15% 20% 28%

Pricetrends +5% +5% - - -

Express mailMarketshare 10% 16% 26% 30% 38%

Pricetrends 15% 10% 5% 5% 5%

...Marketshare 1% 1% 1% 3% 5%

Pricetrends -5% - - - 15%

207207

Thefollowingquestionsalladdressrelevantissues:

• Howmanypostofficeswillbeopenedineachyearoftheforecastingperiod?

• Whatisthepolicyforexpandingtheretailnetwork(officesownedoutright,franchises,partnerships,etc.)?

• Howmanypostofficeswillbebuiltand/orremodelledduringtheforecastingperiod?

• Whattypesofnewtechnology(equipmentand/orsystems)willbeincorporatedintoretailserviceoperatingprocessesduringtheforecastingperiod?Atwhatrate/inwhatnumbers?

• Atwhatratewillhomedeliveryservicebeexpanded?

• Whatpercentageofthepopulationandofmailtrafficistargetedforhomedeliveryserviceineachyearoftheforecastingperiod?

• Whatisthetargetedlevelofproductivity?

• Whatarethetargetedstandardsofquality?

• Howmuchmailtrafficwillbeprocessedineachyearoftheforecastingperiod?

• Whattypesofimprovementareneededinmailprocessingfacilities?

• Whattypesofnewtechnology(equipmentand/orsystems)willbeincorporatedintomailsortinganddeliveryprocessesduringtheforecastingperiod?Atwhatrate/inwhatnumbers?

• Whatisthepolicywithrespecttolonghaul(groundorair)andurbantransportationservice(in-housevehiclefleetoroutsourcing)?Howmanyvehicleswillbepurchased?

Thesesamplequestionsarelinkedtothedifferentalternativescenariosconstructedinsection2.2.3.2.Theresultingdatacanbetabulatedasillustratedbelow.

Table 17 – Development of the designated operator (sample data)

Linked to benchmark scenario 1

Assumptions and variablesPeriod

Year 1 Year 2 Year 3 Year 4 Year 5

Reta

il se

rvic

e

Establishmentofnewpersonallyoperatedoffices(units)

6 12 20 20 35

Remodelledpostoffices(totalm2) 750 m2 1.000 m2 750 m2 750 m2 750 m2

Citieswithover10,000inhabitantsservedbypostofficesrunbythedesignatedoperator(%)

60% 65% 71% 82% 85%

Automatedcounterservices(%) 2% 6% 16% 35% 50%

... ... ... .... .... ....

Del

iver

y Populationwithhomedeliveryservice(%) 8% 28% 40% 60% 65%

On-timedelivery(%) 6% 35% 58% 70% 80%

Sort

ing

Productivityperworkerperyear 12.000obj. 18.000obj. 25.000obj. 35.000obj. 40.000obj.

Tracking No No Sí Sí Sí

Consolidationofsortingfacilities No Sí Sí Sí Sí

Expansionoftheprocessingcentre(m2) - - - 2.000 m2 -

....

Supp

ort

serv

ices

Corporatenetwork(points) - 15 55 100 150

Manpowertraining(hours/year) 25 40 60 80 80

Retirement(numberofworkers) 76 39 27 - -

Payraises(%) +5% +10% - +5% -

... ... ... .... .... ....

208208

Thealternativescenariosconstructedintheprevioussectionsareinterrelatedwhile,atthesametime,producingdifferentlevelsofincome,spendingandinvestment.Thetablepresentedbelowshouldbeusedtoaggregatethedatareflectingdecisionsandforecastsassociatedwitheachsetofinterdependentalternativescenarios.

Table 18 – Economic performance: Linked to Scenario 1

ItemPeriod

Year 5 Year 4 Year 3 Year 2 Year 1

IncomeSales of services

Ì Messages

Ì Directmarketing

Ì Parcels

Ì Expressmail

Ì Financialservices

Ì Productsandphilately

International accounts

Other

Government funding

ExpenditurePersonnel and related costs

Ì Salaries

Ì Benefits

Supplies and commodities

Ì Fuel

Ì Othersupplies

Transportation

Ì Domestic

Ì International

Services

Taxes

Investment

Ì Property

Ì Equipment

Profit (loss)

Theconstructionofthesescenariosisstillnotstrictlypartoftheplanningprocess,sincetherearenoin-depthanalysesofproposedstrategies,noristhereapositionastowhichscenarioshouldbeexpandedonbythegovernmentandtopmanagement.Theexercisesandstudiesconducteduptothispointsimplyevaluatethebehaviourofasetofvariablesidentifiedbytheorganizationasdesirable,possibleandprobable.Thisconcludestheprospectiveanalysis,whosepurposeislimitedtomakingpredictionswithrespecttothefuture.

Customerexpectationswithrespecttoqualityofservice,marketliberalizationprocesses,theemergence(andsubstitutioneffect)ofe-servicesandtheincreasinguseoftechnologyhavebeentransformingtheglobalpostalmarket.

Today'snewrealitiesarepressuringpostalservicestoadapttheirmarketoperatingstrategies,particularlywithrespecttoresourceallocationandimprovementsinqualityofservice.Newcompetitorsandsubstituteproductsareputtingpressureonlong-standingpostalmonopolies.Alldesignatedoperatorsarefacingnumerouschallengesintryingtoholdontotheirmarketshare.

TheslowbutsteadyliberalizationoftheEuropeanpostalmarkethasalreadyproducedanumberofimportantnewtrends,includingpressureonpricesandheightenedcompetitioninthecommunicationssegment(businessmail,hybridmail,faxande-mail/EDImessages),aswellasthephysicaldeliverysegment(specialdeliveryserviceforairmailandsurfacemail,EMS,parcels,freightservice,contract

2.2.3.4

Performanceofthedesignated

operator

2.3

Catalysts for reforming the

designated operator

209209

logisticsservicesandairfreight),withacleardistinctionbetweentelecommunicationsandpostalservices.

Thefollowingfactorsneedtobetakenintoconsiderationinbuildingonthestrengthsofdesignatedoperators.

• Installed capacity –Thedesignatedoperator,unlikeanyofitscompetitors,musthavesufficientoperatingcapacitytoprocesslargevolumesofmessageandparceltrafficinallpartsofthecountry,whileeasilyabsorbinganyfluctuationsindemandstemmingfromchangesinthemarket.

• Logistics integration–Thedesignatedoperatormustdevelopanintegratednetworkwithallnecessaryfacilities(physicalandtransportation)andresources(physicalandhuman)forfulfillingitsmandate,onboththedomesticandtheinternationalmarket.Thisisakeypointandpivotaltoitsabilitytoattractandretaincustomers.

• Technological development–Ingeneral,thedesignatedoperatormustinvestinimprovingthequalityandproductivityofitsproductionprocessestoputitatavantagepointwithrespecttothepostalservicesofothercountriesandinaclearlybetterpositionthanitscompetitorsonthedomesticmarket.Thiscompetitiveedgeisessentialtocutcostsandtoattractandholdontonewbusinessandcustomers.

• Branched operating infrastructure–Oneofthemostimportantstrengthsofthedesignatedoperatorcomparedwithitscompetitorsisitsbranchedinfrastructurenetwork.Itsdirectcontrolofanextensive,branchedretailanddeliverynetworkreinforcesitsotherstrategicstrength,namelythatoflogisticsintegration.

• Extensive logistics expertise–Theneedtodealwithverydifferentsetsofcircumstancesinconductinglarge-scaleoperationsandservicingretailcustomershashelpedthedesignatedoperatortodevelopuniquelogisticscapacityandexpertiseforsynchronizingappropriateresourcesandprocessesforbothsmall-scale,highlydispersedoperationsinareaswithlowpopulationdensity,andlarge-scale,highlyconcentratedoperationsinmajorurbanpopulationcentres.Thisisakeystrengthtobebuiltonbythedesignatedoperatortogiveitanadvantageoveritscompetitors,whotendtofocusonspecificcustomers,shipmentsorareas.

• Skilled labour–Thedevelopmentofanorganizationalculturebuiltonacommitmenttocustomerserviceandexcellenceinservicedeliveryhasenabledthedesignatedoperatortoattractandretainskilledprofessionalsatboththeoperationalandmanagementlevelstocarryoutitsmandate.

• Investment capacity–Annualsurplusesgeneratedbythedesignatedoperatorneedtobeploughedbackintomodernizingitsinfrastructureandservicestogiveitcomparativeadvantagesoveritscompetitors.Inpractice,thismeansreconditionedpostoffices,anupdatedvehiclefleet,moreautomatedandtechnology-drivenprocessesandgreatercustomersatisfaction.

• Competitive prices–Thepriceschargedbythedesignatedoperatorneedtobecompetitive,notonlybyinternationalstandards,butwithpriceschargedbyitscompetitorsforservicessubjecttocompetition.Theefficientmanagementofthedesignatedoperatorisanincentiveforothermarketparticipantstochargefairerprices.

• Image–Thoughitmaytaketimetobuildsuchanimage,areputationforreliability,efficiencyandqualityisadefiniteplusincomparisonwiththecompetition.

Bythesametoken,designatedoperatorswillneedtoaddressthefollowingweaknesses,amongothers.

• Overhead costs–Theneedforthedesignatedoperatortomaintainapresenceinallareasandaregulartransportationnetworkandtoprovidedailyhomedeliveryservicetomosthouseholdsaroundthecountryrequiresapatternofratherheavyspending,whichisdependentonalargevolumeofbusiness.Suddenreductionsintrafficvolumecanseriouslythreatenthestabilityofthismodel.Likewise,theneedtotakeonnewlong-termobligationswithoutcounterpartfundingoroffsettingincomecanfurtherheightenitsvulnerability.Theseuncontainableoverheadcostsneedtobeoffsetbyasteadygrowthinmailtraffic,attractedbythevariousstrengthsdiscussedabove.

• Obligation to service all markets–Unlikeotherenterpriseswiththeabilitytochoosethemarketsonwhichtheywishtodobusinessandtostayoutofthoseinwhichtheyhavenointerest,thedesignatedoperatorastheuniversalpostalserviceproviderhasanobligationtoservetheentirepopulation,withoutdistinction,inallpartsofthecountry,whetheroperatingataprofitorataloss.Thisputsthedesignatedoperatoratadisadvantagecomparedwiththecompetition,inthatitspricesmustcoverthecostofthesecross-subsidies.Thus,itisextremelyimportanttoclearlyestablishtheneedforcompensatorygovernmentfinancing.

210210

ThereformpackagediscussedinmoduleIcanbedividedintothefollowingfourworkfronts:

The first work front involves the development of a regulatory framework for the postal sector establishing the scope of the privileges to be granted to the designated operator to enable it to meet its universal postal service obligations; the envisaged pattern of competition within the postal sector, through laxer or more stringent regulations; and appropriate mechanisms for ensuring the smooth operation of the basic (and universal) postal services entrusted to the designated operator.

The second work front has to do with business or enterprise reform. It involves acquainting the designated operator with market principles and strengthening key areas such as finance, marketing and strategic planning. The strengthening of these functions through training, the hiring of experienced professionals, etc., should enable the designated operator to improve service quality and become financially self-sustaining and more market-oriented, which are essential conditions for its independent management.

The third work front involves the choice of an institutional model for the designated operator, defining possible outside involvement in its management and ownership, partnership-building, etc.; the legal status of the designated operator which, in turn, is directly related to the extent of its autonomy and its appropriate legal standing; the financing of its assets and operations (public and private); and the rate-setting authority.

The fourth and final work front refers to necessary technological reforms for the incorporation of new technological breakthroughs into the designated operator's production platform as a way of improving quality of service and cutting costs to strengthen its competitiveness.

Adiscussionofthesefactorsstudiedinthevariousstagesoftheassessmentprocessisessentialtoensurethatthedesignofthenewpostalservicemodelisconducivetothedevelopmentofanappropriatelegalenvironment,withgovernmentbackstoppingandtheengagementofitsworkforce,asoutlinedinthefollowingsections.

211211

AsdiscussedearlierinthischapterandatgreaterlengthinmoduleI,thesustainabledevelopmentofthepostalmarketandthedesignatedoperatoriscontingentontheexistenceofmodernlegislationeliminatinganyspecialprivilegesorconditionsunderminingitscompetitivenessandthequalityofservicerenderedtodifferentcustomersegments.Inthissamespirit,postallegislationshouldguarantee:

• theseparationofmarketregulatorypowersandfunctionsfrompowersandfunctionsrelatingtotheoperationoftheuniversalpostalservice;

• market-widecoverageofregulatoryactivities;

• theclearandobjectivedefinition,mappinganddelineationofuniversalpostalservices;

• clearprovisionswithrespecttotheobligationsandautonomyofthedesignatedoperatorandotherserviceoperatorssubjecttoregulation;

• compensationfortheuniversalpostalserviceobligationsvestedinthedesignatedoperator;

• thelegalstandingofthedesignatedoperatorasacorporateentity;

• theeliminationoflegalbarrierspreventingthedesignatedoperatorfromcompetingwithotherserviceoperatorsonanequalfooting.

Noreformprogrammebasedsolelyontheinternaleffortsofthedesignatedoperatorcanexpecttomakeverymuchheadway.Governmentdecisionmakerswillneedtobeinvolvedinallstagesofthediscussionprocessengagedaspartofthequestforanewmodelforthenation'spostalsector.

Sensitizinggovernmentstakeholderstotheneedforreformthroughacontinuingcommunication,engagementandinformation-sharingprocesswillbuildthenecessarypoliticalwillforthesuccessofeffortstostrengthenthepostalsectorasawholeandthedesignatedoperatorinparticular.

Thisawareness-buildingprocesswillneedtotakeaccountofthefollowingpivotalissues,asthefocalpointofcorrespondingdiscussions:

• Regularuniversalpostalserviceshelptobringthecountrytogetherthroughcommunication,linkingsmallcommunitiestolargecitiesandtherestoftheworld.However,theoperationofpostalservicesintheselocationsholdsnointerestforprivateserviceoperators.

• Thedesignatedoperatorcanconsumepreciousgovernmentbudgetfundstocoverdeficitsengenderedbyaninefficientorganizationalstructure.Itcaneithercontinuetobeadirectorindirectdrainonthegovernment,oritcanutilizeitscapacitytoenergizeotherrelatedsectorsofeconomicactivity.

• Despitecompetitionfromtechnologicalbreakthroughs,thepostalsectorisnotindecline.Onthecontrary,moderntechnologyisaffordingcountlessnewopportunitiesforittoheightenitsappealandexpanditsgrowthpotential.

Thus,thepostalsectormustbeofficiallyplacedonthelistofgovernmentpriorities,asanintegralpartofnationaldevelopmentplans.

2.3.3

Involvement and

engagement of the postal

workforce

• Labourintensive/humanresourcesasastrategicfactor

• Unions/culturalchanges

• Newlabourrelations.

2.3.3.1

Managingchange

Adeep-seatedreformprogrammewillinvariablyengenderdifferentuncertaintiesandinsecuritiesonthepartofallinterestedstakeholders,withinbothgovernmentandthepostalworkforce.Thesuccessoftheentirereformefforthingesonthepropermanagementofenvisagedchangestoensuretheiracceptancebythepostalworkforce.

Figure5graphicallyillustratesthephaseswhichatypicalindividualgoesthroughaspartofareformprocess,particularlyinabusinessenvironment.

2.3.1

Legal environment

2.3.2

Government backing of the

designated operator

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Theorganizationneedstotakeintoaccountso-called"culturalsymptoms",suchas:

• executiveprofiles(personalvalues,professionaltrainingandfieldofexpertise,charisma,etc.);

• workerprofiles(socio-cultural,professionalandeducationalbackground);

• ritesandsymbols(co-workers'attitudestowardsoneanother,theworkplace,etc.);

• communication(internal,external,formal,informal,top-down/bottom-up,etc.);

• strategies(form,content,effectiveness,etc.);

• generalmanagementphilosophy.

Itisimportanttounderstandthatcommunicationandthesharingofinformationandexperiencesarefacilitatedbymanydifferentcultures.Thereisnotjustoneculturebutaseriesofconstantlyemergingsubculturesaseachmemberoftheorganizationlearnsandadaptstothevaluesandnormstypicalofeachareainthecourseofhisorherwork.Thefactthattherearethesedifferentsubculturesdoesnotruleouttheexistenceofanorganizationalculture.Imagineasinglefocalpoint(thecorporateculture)nurturingandsustaininganumberofdifferentbranches(thespecificcultureofeachareawithintheorganization).

Theuniquefeaturesofeachpartofanorganizationmustbetakenintoaccountinmanagingtheorganizationasawhole.Thedesignatedoperatorhasitsownorganizationalcultureshapedmainlybythenation'sculture,itspositioninthecentralgovernmentstructure,itspublicimageandaninfinitenumberofotherfactorsembodiedinitsworkers,theirnotionsandtheirpositiveandnegativevalues.

Forexample,designatedoperatorsintheredorwhoseincomefromsalesofservicesisnotusedtocovertheirexpensesaregenerallymorepronetodistancethemselvesfromtheircustomers,sincethesurvivaloftheorganizationisnotdirectlytiedtoservicequalityconsiderations.

Clearandeffectivecommunicationandgreaterinvolvementindiscussionsaboutenvisagedchangestothedesignatedoperatortendtoreducetheintensityofthereactionandthetimespentbyworkersineachbehaviouralphase.Conversely,lessinvolvementandlesseffectiveandtransparentcommunicationcandelaythetransitionfromonephasetothenext.Mismanagedreformprocesseswithnoprovisionforengagingtheworkforceanddealingwithitsfearoftheunknownoftenmakegoodideasunworkable.Itisvitalforthedesignatedoperatorand,moreimportantly,forofficialsheadingupreformprogrammestopayspecialattentiontocommunicationandparticipation.

2.3.3.2

Organizationalculture

Organizationalcultureisthecollectionofideas,valuesandnormssharedbyco-workersinanyorganizationwhichshapetheirattitudesandbehaviour.Moreover,theroleplayedbythiscultureisvitaltotheorganization'ssuccess.

Anyprogrammeorprojectaffectingtheorganizationalculturemustencompasseverycomponentoftheorganization,fromhumanrelationsandtheorganizationalstructuretothedecisionmakingprocess.

Individual behaviour in a reform process

Time

Rea

ctio

n

Rej

ecti

on

Fru

stra

tio

n

Rec

on

cilia

tio

n

Acc

epta

nce

Eng

agem

ent

-

+

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Asarule,theattitudeoftheirworkersisthattheyarepaidthesamelowwagewhethertheygivegoodorbadservice.Thus,reformeffortswillneedtohelpchangecertainvaluesandnotionshinderingthedevelopmentofthedesignatedoperatorwhile,atthesametime,strengtheningthepositivevaluesandnotionsmakinguptheorganizationalculture.

Figure6illustratesafewofthenotionsandvalueswhichwillneedtobechanged.

Thelistdepictedinthisfigureisforreferencepurposesonlyandwillneedtobeexpandedornarrowedaccordingtothenationalcontextandorganizationalclimateofthedesignatedoperator.Itisimportanttokeepinmindthatthesuccessofreformeffortshingesontheimplementationofnecessarychangestotheorganizationalculture–along-termprocesswhichtakestimetobearfruit.

2.3.4

Strategic positioning

Thedecisiontoreformthedesignatedoperatorrequiresitssupervisoryagenciestoselectandapproveoneofthebaselinescenariosconstructedinsection2.2asabasisfordesigningstrategies,projectsandactivitiestoachievetheproposedvision.

Thisphase,whichprecedestheactualplanningphase,isreferredtoas"strategicpositioning."Itcorrelatesstudiesofprobableandpossiblefuturescenariosasthebasisforformulatingviableplansinkeepingwiththeprevailinginternalandexternalphilosophy.Thiscorrelationofstudydataestablishesgeneralprioritiesforfutureaction.

Thischoicebeginstheplanningprocessdiscussedinchapter3.

Results-oriented

Clients

Constantly evolvingstandards for

greater customersatisfaction

Competitive attitude

Process-driven

Users

Monopolisticattitude

Personal successhinges on success

of theorganization

Personal successmeand fightingfor privileges

Strict adherenceto rules

and standards

Changes in the organizational culture

CompetitiveequilibriumAverageperformance

Competitiveedge

Superiorperformance

Hard toreplicate

Easy toreplicate

Learning

Innovation

Speed

Cost

Service

Quality

215215

Thischapteraddressesspecificissuesrelatingtothepreparation,formulationandimplementationofthedevelopmentplanforthedesignatedoperator.

Someofthepointsaddressedaredesignedtoalertusersofthisguidetothetypesofobstaclewhichmayneedtobeovercome.Othersrepresentsuggestedapproachesforensuringtheeffectivenessandproductivenessoftheeffortsofthestrategicplanningteam.

Meetingfuturechallengesrequiresawell-engineeredstrategicplanningeffortonthepartofthedesignatedoperatortohelpitvisualizethecourseofactionitneedstofollowinaccomplishingthistask,overcomingtheusualobstaclestoplanningprocesses.

i Stepped-up pace of change –Changesinnormalpostalbusinessconditionsarediscerniblethroughtheactionsofcompetitorsandnewcustomerneeds.Escalationsincompetitionandheighteneddemandsbythesestakeholdersarespeedinguptheprocessofchange.Insuchanenvironment,asoundstrategyisanabsolutemust.

ii Planning for the longer term–Theconceptofshortandlongtermvariesaccordingtoanorganization'ssphereofoperation.Oilandsteelcompanies,forexample,planforvisiblylongerperiodsthanserviceproviderslikethedesignatedoperator.

iii Anticipating events–Change,particularlyacceleratedchange,doesnothappenbychance.Itisaresultofcurrentchangesintheglobalenvironmenthavingpowerfuleffectsonvirtuallyeverycountryintheworld,creatinganexplosivechainreactionthatgraduallyaffectsallsectorsofeconomicactivity.Thoseorganizationsbestabletoclearlyvisualizethefutureimpactofsuchchangesontheirbusinessoperationsandtotakeappropriatemeasuresearlyontotryandcontrolundesirablesituationsareimprovingtheirchancesforsuccess.

iv Lucrative/loss-making enterprises – Profitorlossistheproductofastrategicplanandthevariousactionstakentoimplementit.Justasthecurrentsuccessofanenterpriseisplannedinthepast,alackofplanningmaycontributetoitscurrentproblemsorfailings.Thus,strategicallyspeaking,itisimportanttoguaranteethepostaloperator'sfutureprofit-makingpotentialasawayofmakingviablethedeliveryandfinancingoftheuniversalpostalservice.

Strategicplanningbythedesignatedoperatormeansestablishingthetypesofmeasurethatneedtobetakentoensureitsfuturesituationisdifferentfromitsprevioussituation.Agreatdealoftimeandeffortcanbewastedthroughthelackofamodern,well-structuredorganizationwithresults-orientedmanagementpractices.

Theframingofadevelopmentplanvisualizingandoutliningthesequenceofenvisagedactivitiesisessentialtothefutureofthedesignatedoperator.Thisdevelopmentplanwillneedtoaddressfactorssuchasqualityofservice,serviceofferings,rates,customers,suppliers,revenue,technology,investment,costs,themarket,humanresourcesandallthebuildingblocksofthepostalbusinesssystem.

Development plans and programmes

3

3.1

Formulation of development

plans

3.1.1

Development plans for the

designated operator

216216

Strategicplanningisnotconfinedtoanyoneunit,areaorindividualwithinthedesignatedoperator.Itistheproductofajointeffortbytheentireworkforce,withthewholeprocessheadedupdirectlybythedesignatedoperator'sseniorexecutiveorgeneralmanagerresponsiblefororganizing,coordinatingandsynchronizingteamefforts,inlinewiththefollowingconcepts:

a. Participatory planning–Themainbenefitofplanninglies,notinitsoutput,butintheplanningprocessperse.Thus,theleader'sroleisnotmerelytoframeplans,butalsotofacilitatetheplanningprocess.Thismeansengagingallmembersoftheorganization,fromthedirectorgeneralondowntoitsnewestemployee.Thestrategicplanningprocessisaproductoftheeffortsofrepresentativesofallareasoftheorganization.

b. Synchronized planning –Allelementsinvolvedmustbeconsideredasinterdependentvariablesorfactors,sincenoonepartorareaofthedesignatedoperatorcanbeefficientlyplannedasaseparateelement.

c. Integrated planning–Alllevelsofthemanagementstructureofthedesignatedoperatormustbemobilizedinpreparationforthestrategicplanningprocess,andtheiractivitiesmustbeconsistentwithplanningefforts.Allensuingeffortsandactivitiesmustbedirectlyinlinewithestablishedtargets.

d. Ongoing planning –Thisisessentialtothesuccessofanyplanningprocess.Theeffectivenessofallplansgraduallydiminishesovertime.

Awell-engineeredparticipatoryplanningprocessismoredeeplyrooted,preventingindividualisticbehaviour,whichisquitecommonwithchangesinanorganization'sleadership.Thisisnotonlytrueofthedesignatedoperator.Ithappensinallorganizations,includingprivateones.

3.2

Building blocks of a

strategic planThissectionisdesignedtoprovideguidancefororganizingthestrategicplanningprocess.Itsgoalistooutlinethestepstothesuccessfulframingofaworkableplanandtheachievementoftargetedoutcomesbythedesignatedoperator.

3.2.1

The basicsWhendealingwithagovernmentalbodyandbusinessenterprise,successfulstrategicplanningdesignedtostrengthenthecompetitivenessandensurethesurvivalofthedesignatedoperatorispredicatedonanin-depthknowledgeofitsorganizationalstructureandofthemanyoutsideinfluencesatplay,engenderedbychangesinthesurroundingpolitical,economic,socialandtechnologicalenvironment.

Asarule,thegovernmenthasmulti-yearplansforallspheresofactivityrecappingnationalpoliciesandspellingoutitscoursesofaction,inlinewiththebroadoutlinesofpolicieswithrespecttonationalinfrastructureandgovernmentspending.

Morespecifically,governmentplanningforthepostalsectorshouldpreparethedesignatedoperatortomeetitsuniversalpostalserviceobligations.However,alackofgovernmentplanningdoesnotnecessarilyruleoutthedevelopmentofastrategicplanforthedesignatedoperator.

Thespecificpathtakenbythedesignatedoperatortoarriveatitspresentpositionneedstobecarefullyevaluatedasthebasisforchartingitsfuturecourseofaction.

3.1.2

Stakeholders in business

planning processes

217217

Thisassessmentneedstolookatitsstrengthsandweaknesses,aswellasattheopportunitiesandthreatspresentinitssurroundingenvironment(seechapter1).

Thefollowingfiguregraphicallyillustratestheprocessofassessingthecurrentsituationandchartingfuturecoursesofaction.

Thisassessmentisthebasisforestablishingtheoperator'svision,mission,purposes(objectives),programmes,projects,sub-projectsandactivities,alongwithcorrespondingmonitoring,supervisionandevaluationprocedures.

3.2.2

Development of a strategic plan

Thefollowingflowchartillustratestheprocessofdevelopingastrategicplanandshapingitsobjectives.

The assessment – thefirsttechnicalphaseofthestrategicplanningprocessdiscussedinchapters1and2–involvesthecollectionofenvironmentaldata,bothinternal(strengthsandweaknesses)andexternal(macro-andmicro-environmentalthreats),whileconstantlyendeavouringtocorrelatethisdatawiththeactualorganizationanditsbusinessoperations.Thefocusisnotyetonthefutureinthisearlyphaseoftheprocess.

The prospective analysis –thesecondtechnicalphaseofthestrategicplanningprocessdiscussedinchapter2–involvestheconstructionandanalysisofpossibleandprobablealternativefuturescenarios,whichmustmapouttheorganization'sstrategicpositionfrombothaninstitutionalandabusinessperspective.Thisphaseincludestheestablishmentofmega-trends(i.e.thosehavingasignificantimpactfiveormoreyearsinthefuture)andcontextualvariables(havingasignificantimpactoverthenextfiveyears).

The formulation phase referstothedevelopmentofcorecompetenciesandtheclosingofgapsdetectedduringprojects,programmesandactivitiesandcorrespondingcoursecorrections.Thisphaseincludesthedevelopmentofapreliminarybudget,simulatingincome,expenditureandinvestmentengenderedbyestablishedstrategies,projects,programmesandactivities.

PAST

PA

ST

FUTU

RE

FUTU

RE

Weaknesses

ThreatsOpportunities

Strenghts

Designated operators

Environment

Sub-projects

Projects

Programmes

Objectives

Mission

Vision

Ass

esm

ent

Prospectiveanalysis

Formulation

Ap

pro

val

In-d

epth

analy

sis

Implementation

Monitoring

and evaluation

218218

The approval phase involvesthediscussionandapprovalofdataanddocumentsproducedthroughtheeffortsofpersonnelatalllevelsoftheorganizationbyitstopmanagementandbytheunitheadingupthestrategicplanningprocess.Aspartofthisprocess,topmanagementwillendorseorrevisetheproposedapproachandofficiallyapprovethestrategicplan.

The in-depth analysis referstotheframingofadevelopmentplanforaspecificperiod,e.g.fiveyears,withprovisionsfortheyearlystart-upofscheduledprojectsandactivities.Thisdocumentwillspelloutthepersonsincharge,indicators,deadlines,phases,valuesandtargetedoutcomesforallso-called"corporate"initiatives.Thisprocessisrepeatedfortheframingoftacticalandoperationalplansclearlyestablishingthe"what","who","how","where","howmuch","when"and"bywhen"forallenvisagedinitiatives.

The implementation phase persefollowsthedisseminationoftheplanandtheengagementofallareasandindividualsinvolved,whowillregularlysupplydataandreceivereportsontheprojectsandactivitiesforwhichtheyareaccountable.

The monitoring and evaluation phase, whilescheduledattheendoftheplanningcycletoprovidefeedbackforthefollowingcycle,shouldreallybeanongoingactivitythroughouttheentireplanningprocess,conductedatestablishedintervalsforeachtypeofmonitoringmechanism,asnecessary,tore-evaluateortostepuporslowdowntheimplementationofaparticularstrategyorinitiative.

Astrategicplaninvolvesasequenceofclearlydefinedviable,quantifiable,measurableactions.

Thereareanumberofissueswhichcanbeusedasbenchmarksinhelpingtoensurethesuccessfulcraftingofastrategicplan.Afewexamplesofthesebenchmarkissuesareoutlinedbelow.

Finance• Ability to secure low-cost, long-term

capital

• Ability to secure short-term capital

• Ability to maximize the value of investments

• Ability to take risks with measurable returns

General management• Ability to provide continued high-level

management

• Development of future leaders and managers

• Development of a sound organizational structure

• Development based on long-term planning

• Development of new quantitative, technical decision making tools

• Assurance of better judgement and of the use of more creativity and imagination in decision making processes

• Ability to use information technology as a problem-solving tool

• Ability to recognize new needs and opportunities for products and services

• Ability to promote administrative practices conducive to sustainable development

Marketing• Ability to collect market intelligence

• Development of a broad customer base

• Establishment of an efficient network of marketing channels

• Development of the ability to attract lucrative new business

• Assurance of creative advertising and sales promotion campaigns

• Effective use of pricing (discount policies, credit, warranties, instalment sales, compensation)

• Promotion of close cooperation by Operations, Marketing and Finance

• Revitalization of the sales structure

• Improvement of customer service

• Development of new products and services for new markets

• Expansion of sales of current products on new markets

• Product diversification through partnership building

• Use of creativity in designing new products and services

• Acquisition of a larger market share

3.2.3

Objectives, strategies and

actions

219219

Operations• Improve delivery of current services

• Improve service quality control procedures

• Develop effective policies for acquiring new technology and replacing operating equipment

• Develop an efficient layout for mail sorting centres

• Establish a well-engineered mail delivery service structure

• Develop better inventory control and stocking procedures (for mailbags, labels, baskets, seals, etc.)

• Computerize production facilities

• Strengthen the claim processing system

• Strengthen the performance of operational personnel

• Optimize operating facilities (ergonomics, lighting, effective flow management, etc.)

Human resources• Promote better relations between

managers, supervisors and work crews

• Develop expertise in dealing with labour organizations

• Maximize the utilization of worker skills

• Encourage results-oriented behaviour

• Develop the ability to encourage and capitalize on worker creativity

• Encourage the rotation of workers and supervisors

• Establish a staff development policy with provisions for training, courses and educational incentives

• Conduct individual performance evaluations of all staff members regardless of their level or position in the organization

• Develop a benefits package to help retain personnel

• Formulate a career development plan establishing promotional opportunities for postal employees

3.2.3.1

Investmentandperformance

Theimplementationofanyplaninvolvesanumberoftechnical,administrativeandfinancialfactors.Allsourcesandusesoffundingneedtobeclearlydefined.Sourcesincludeinternallygeneratedinvestmentfunds,governmentfinancingandfundingfromdomesticandinternationallenders.

Allprospectivelendersbasetheirfinancingdecisionsonappraisalsandthecontentofproposedprojects.Thoughtraditionalfinancialperformancemeasurementsmaynotalwaysbeenoughtoguaranteesoundcompanyandbusinessmanagement,thesearetheeconomicindicatorsusedinmacroeconomicanalysis.Financialmanagementtechniquesofferanumberoftoolsforevaluatingefficiencyinthisarea,including:

• Return on investment – Ratioofoperatingincometototalcompanyassetsreflectingthecompany'sabilitytogenerateprofitwithagivenamountofinvestment.Thisindicatorisusedtoevaluateboththecompany'soperatingprofits(orlosses)asawholeandexpectedreturnsonfutureinvestment.

• Cashflow–Aprojectionofcashflowforagivenfutureperiodquantifiesthechangesthecompanyhopestomakeinitsmajorfinancialstatementaccountsintermsofthesourcesandusesofitsfunds,primarilyintermsofpresentvalue.

• Contribution margin – Thisindicator,whichisthedifferencebetweenincomefromcontrolunits(suchasaproductlineorsalesaffiliate)andvariablecostsforagivenperiod,helpstoestablishthecontributionofaparticularunitwithintheorganizationtocoveringoverheadexpensesandgeneratingprofit.

220220

Allplanningdataandcorrespondingprojectionsshouldfitintothefollowingcategories:

• Operational performance data; • Economic performance data; • Organizational image.

Insofaraspossible,allfindingsshouldbequantifiedandpresentedintableandgraphform,asinthefollowingexample.

Allplanningshouldbetheproductofacreative,participatoryprocessgearedtothefollowingneeds:

• Theestablishmentofmutuallycompatibleobjectivesandchallenges;

• Compatibilitywithinternalfunding;

• Compatibilitywithconditionsinthesurroundingenvironment;

• Apositivecost-benefitratio;

• Anorganization-widecommitmenttoquality;

• Thefreedomtomakesomemistakes;

• Anawarenessofwhatisrealisticandunrealistic,whileconstantlystrivingtoachievetheimpossible.

Planningprocessesmustsetprioritiesandgraduallyimplementenvisagedactions.Theyshouldfocusonthelongtermwhileprovidingfortheimplementationofshort-andmedium-termactivities.Resultingplansmusthavebuilt-inflexibilityallowingfortheirmodification,updatingandadaptation.

Technically,long-termplanningcoversperiodsoffiveormoreyears,medium-termplanningcoversperiodofanywherefromonetofiveyearsandshort-termplanningisforperiodsofuptooneyear.Inotherwords,planningprocessesestablishanorganization-widepolicyturningwhatwouldotherwisebeone-offprojectsandactivitiesintoasystematicapproachtoattainingestablishedobjectives.Long-termplanningisthefoundationofbusinessactivity.

Theformulationphaseofthestrategicplanningprocessincludesthedevelopmentofavision,missionstatement,objectives,programmes,projects,sub-projectsandactivities.

3.2.4.1

Vision

Anorganization'svisioniswhatitislookingtobe.Itestablishesthebroadoutlinesofthestrategicplantobedevelopedandimplementedbytheorganization.

Anorganization'svisionshouldbeshapedbythesoundjudgementandconsensusofitsleadership.Thefollowingisalistofsuggestedconsiderationstobetakenintoaccountinshapinganorganization'svision:

• Theorganization'svisionshouldbeclearlydefined.

• Itshouldestablishandrespectindividualrights.

• Itshouldbecentredontheorganization'smainfocuses:majorcustomers/public,workersandsuppliers.

• Theorganizationneedstobuildmarketshareandgenerateprofitbyimprovingcustomerperceptionsofitsproductandserviceofferings.

• Theorganizationneedstodeveloparesultsorientedperformanceculture.

Comparison of income/investment/profit

Income Investment Profit

4264

1414

23213381

5209

390

26968

54784

9907

18844

594

1175

3.2.4

Formulation phase of

the strategic planning process

221221

Thefollowingisanexampleofthevisionofadesignatedoperator.

"We see the postal service":a. operating at the global level;

b. as a major service operator on the international postal market;

c. as the leader in all domestic market segments in which it is active;

d. expanding its business operations;

e. as an efficient, dynamic enterprise;

f. making regular innovations in its services;

g. constantly adding technological value to its products and services;

h. as highly competitive in each and every one of its business areas;

i. with a social conscience, making an important contribution to society;

j. as responsive to stockholder expectations with respect to returns on their investments;

k. with a strong organizational image;

l. with a good work environment meeting the needs of its workers;

m. as an advocate for the environment;

n. as a business which is continually learning.

Thedesignatedoperator'smissionisitsraisond'être.Itdeterminesthetypeofbusinessactivitiesengagedinbythepostalenterprise,thereasonforitsexistenceandthetypesofoperationitshouldfocusoninthefuture.Thedesignatedoperator'smissionstatementunderpinstheestablishmentofitsnecessarymacro-strategiesandmacro-policies,determinesthethrustofitsoperationsandsetsboundariesfortheadoptionofanappropriatestrategicposition.Tothisend,itmustmeetreasonable,rationalcriteriathatare:

• enterprisingenoughtohaveanimpactonorganizationalbehaviour;

• focusedmoreonsatisfyingcustomerneedsthanonthefeaturesofserviceofferings;

• reflectiveoftheorganization'scorecompetencies;

• intelligible;

• realistic;

• flexible;

• motivating.

Thereareanumberofimportantconsiderationstobetakenintoaccountbythestrategicplanningteaminchargeofshapingtheorganization'smission,asoutlinedbelow:

• Itshouldnotbeconfinedstrictlytoanexplanationofwhatisbeingdone,sincesuchmissionstatementsfailtomeettheirmainobjectiveofengenderingdecisionsinfavourofchange.

• Itshouldnotbetieddirectlytoproductandserviceofferings,whichseriouslylimitsitsscope.

• Anydefinitionswithinitshouldbeneithertooshort,lesttheybeunclear,nortoobroad,whichcouldmakethemdifficulttoassimilate.

• Itshouldnotestablishapermanentsloganfortheorganization,whichmayeventuallyneedtobechangedinlinewithchangingconditionsintheinternalandexternalenvironment.Thegoalisnotonlytodefinetheorganization'smission,butalsotobepreparedtoredefineitwhenevernecessary,aspartofanongoingobservationandthoughtprocess.

Thefollowingareexamplesofmissionstatementsusedbypostaloperatorsindifferentcountries.

"Our business is to move mail, merchandise and print information around the country and around the globe. We also provide other products and services in a market-oriented environment. We are committed to satisfying customer needs, offer challenging career opportunities and provide a solid return on investments."

"Our objective is to establish, manage and operate public postal service infrastructure, engage in any and all follow-up, related or ancillary activities and provide financial services."

"To bring together individuals and organizations around the country and around the world, ensuring the satisfaction of their postal service needs."

3.2.4.2

Mission

222222

Objectivesarequantitativegoalsortargetstobemetthroughtheeffortsoftheentireorganization,withestablishedperformancedeadlinesandspecificofficialsinchargeoftheirattainment.Theobjectivesofanyorganizationmustmeetthefollowingrequirements:

• Theymustbeclearandclearlycommunicated,understoodandaccepted.

• Theymustbespecific,measurable,realistic.

• Theirlinkagesandinteractionshouldbebrieflyoutlined.

• Theymustbesufficientlyinstepwithinternalandexternalfactorsaffectingtheorganization.

• Theremustbeanadequatemonitoringandevaluationsysteminplace.

• Theremustbesetprioritiesfortheirattainment.

Objectivesmustbe:

• Hierarchized – showingtopprioritiesversussecondaryobjectives(etc.)andhowtheseprioritiesareset.

• Quantitative – quantifiableandmeasurable.

• Realistic –theproductofstudiesofsurroundingthreatsandopportunitiesandoftheorganization'sstrengths,weaknessesandresources,ratherthanofthenotionsorpreferencesofinterestedindividuals.

• Consistent – mutuallycoherentandinterrelated.

• Clear, understandable and written – Itiseasiertocarryoutplanswithclearobjectiveswhichcanbeeasilyunderstoodbyallstakeholders.

• Clearly communicated – Thepurposeandsubstanceofanorganization'sobjectivesneedtobeclearlycommunicatedtoallpartiesdirectlyorindirectlyinvolvedintheiraccomplishment.

• Motivating –Anorganization'sobjectivesneedtohelpcreateamotivatingenvironmenttoachievethefullimpactofthestrategiestobeimplementedbytheworkteam.

• Practical –identifyinglikelybeneficiaries.

• Decisive –sheddinglightonthebasicdecisionsinvolvedintheirattainment.

• Operational – outliningthebasicstepsintheirattainment.

3.2.4.4

Programmes

Programmesaresynchronizedpackagesofprojectsandactivitieswithhomogeneousoverallobjectives.Theyreflectwhattheorganizationhopestoaccomplishfromacorporateperspectiveandhelptomakeitseffortsandresourcesmoretargetedoveragiventimeperiod.

Themainpurposeofprogrammesistocoordinateprojectswithcommongoalsandobjectives.

3.2.4.5

Projects

Projects(andsub-projects)areinitiativeswithestablishedstart-upandcompletiondates,ageneralcoordinatorormanager,apre-establishedresultandnecessaryearmarkedfundingfortheirimplementation.

Projectpreparationgivesmanagersawayofestablishingandimplementingactionplanstobeconductedbytheorganizationwithaviewtotheachievementoftargetedoutcomesidentifiedaspartofthestrategicplanningprocess.

Ingeneral,aprojecthastwomainphases:

• PHASE 1 Design.

• PHASE 2 Implementation

Themainstepsintheprojectdesignphaseareasfollows:

• Assessmentofthetargetproblem;

• Studyofthesurroundingenvironment;

• Establishmentofprojectobjectives;

• Establishmentofprojectevaluationcriteriaandparameters;

• Conductofnecessaryfeasibilitystudies(strategic,marketing,technicalandeconomic-financialfeasibilitystudies);

• Negotiationandestablishmentofnecessaryresources;

• Designationoftheprojectteam;

• Resourceplanningandallocation.

3.2.4.3

Objectives

223223

Theoutputfromthisphaseisaprojectproposalandimplementationplan.Themainissuestobeaddressedintheprojectimplementationphaseare:

• theuseofavailableresourcesaccordingtoplan;

• thesupervisionofworkbytheprojectteam; • themanagementandmonitoringofprojectactivities;

• thefinalevaluationofcompletedwork.

Thefollowingfiguregraphicallyillustratesthedifferentprojectphases.

Sub-projectsinvolveavarietyofspecific,explicit,finite,time-phasedactivitiescontributingtotheimplementationofagivenprojectcomponenttowhichtheyareattached.

Actionsrefertotheimplementationofadecisionforthepurposeofachievingaspecific,pre-establishedoutcome.Actionsarepivotaltotheexecutionofsub-projectsandprojects.

EXAMPLE:

Thefollowingfiguregraphicallyillustratesthebasicrelationshipbetweentheseconcepts.

Programme | Project | Sub-Project

3.2.5

ApprovalThenextphaseofthestrategicplanningprocessaftertheformulationphase(establishingthevision,mission,objectives,programmes,projects,sub-projectsandactions)istheapprovalphase.

Theapprovalphaseinvolvestwomainprocesses:

1° Internalinstitutionalizationprocess

2° Externalinstitutionalizationofthestrategicplan

1° Internal institutionalization process

Planningrequirespreliminarypreparationatbasicallyalllevelsofthedesignatedoperator.

Communication,awareness-buildingandinformationactivitiesandmotivational,participatoryandinterfacingeffortswillallneedtobesteppedupimmediatelypriortothestartoftheplanningprocess,undertheleadershipofthedesignatedoperator'sgeneralmanagement.

Resistancetochangehasverylittletodowiththesizeoftheorganization.Itdependsonthemindsetofitsmembers.Ingeneral,itstemsfromtwomainfactors,namelysuccessandfear.

Somesuccessfulorganizationsdonotacknowledgeorseeanyneedforchange,whichcouldcausethemtoeventuallybecomeobsolete.(Suchorganizationsaredoingwellandhavenowishtochangetheirfutureplans.)

Peopleresistchangeoutofafearoflosingtheirpower,orofbeingforcedtoleavetheircomfortzone.Thereisadefinitefearoftheunknown.Beneathsuchresistancetochangeistheplacementofpersonalinterestsabovethoseoftheorganization.

(Programme)

Operational structure

(Project)Delivery network

(Sub-project)Establishment of

carrier routes

(Actions)• Conduct load survey• Establish the number of delivery points• Calculate route completion times• Apply the mathematical model

(Sub-project)Equipment

(Actions)• Establish types of fixture• Establish supporting equipment• Specify types of footwear and garments

(Sub-project)Work conditions

(Actions)• Establish building requirements• Adapt buildings to meet requirements• Reorganize the internal work flow

(Project)Mail processing

network

(Project)Transportation

network

3.2.4.6

Sub-projects

3.2.4.7

Actions

Work

Design Implementation Time

224224

Dealingwithpocketsofresistancerequireseffectiveactionontheorganizationalculture.

Asarule,thefollowingtypesofsituationarelikelytoengenderacertainresistancetochange:

• Ageneralperceptionthatthecorrespondingcost-benefitratioisunfavourable;

• Alackofconfidenceonthepartoftheworkforceintheorganizationandinitsrealinterestinmakingchanges;

• Alackofconfidenceintheorganization'sabilitytoeffectivelyimplementrequiredactivitiesandpatternsofbehaviour.

Possibleapproachestominimizingresistancetochangeinclude:

• earlyandcontinuoustrainingwithrespecttothetypesofactivityinvolvedintheprocessofchange;

• establishmentofappropriatechannelsofcommunicationtounderscoreandexplaintheneedforchangeandtherationalefortheentirereformprocess;

• effective,massparticipationbythepostalworkforceintheplanningprocess,creatinganenvironmentconducivetothesharingofideas;

• establishmentofaclearorganization-wideinformationsystem;

• organizationofinformationactivitieswithrespecttoplanningefforts.

Thebestwaytoovercomeorminimizeresistancetochangeistoensurethattheworkforceunder-standsthenatureofthestrategicplanningprocessandreceivesextensivetraininginproceduresforthedevelopmentandimplementationofstrategicplans.

2° External institutionalization

Allelementsofthestrategicplanningprocessmustbeinlinewithgovernmentpolicyguidelines,internationalagreementsingeneraland,morespecifically,theunderlyingprinciplesoftheUPU'sglobalstrategyasestablishedatUnionCongresses,aswellaswithpublicneeds,wantsandprioritiessince,inthefinalanalysis,themainbeneficiaryofallsuchplanningeffortsshouldbethegeneralpublic.

Allplanningdocumentsandtheestablishedactionplanwillneedtobeformallysubmittedtorelevantgovernmentagencies(thesupervisoryministryforthepostalsector,theministryofplanning,theministryoffinance,theregulatoryagencyandanyotheragencieswhichcouldbehelpfulinimplementingtheplan).

Anexecutivesummaryoftheplanshouldclearlyillustratetheconsistencyofenvisagedactivitiesbythepostalorganizationwithgovernmentpolicyguidelines.

Roundingouttheinternalplanningprocess,theorganization'sgeneralmanagementwillneedtoexplaintointerestedgovernmentofficialstheprocedures,objectives,projectsandsub-projectsforminganintegralpartofitsplans.

Engagingthegovernmentandearningitstrusttoensurethesuccessfulimplementationoforganization-wideplansiscrucialtotheattainmentofitsobjectives.Thenextstepafterreachingaconsensusonthebroadoutlinesofanactionplananditsapprovalbythegovernmentisitsimplementation,strivingtomeetestablishedschedulesandachievetargetedoutcomes.

3.2.6

In-depth analysis

Theapprovalphaseofthestrategicplanningprocessisfollowedbyanin-depthanalysis.Thisphaseisdevotedtotheframingofyearlytactical,operationalandfollow-upplans.

Thestrategicplanningprocessneedstotakeintoaccounttheentireorganization,notjustonepart.Thus,itistechnicallyincorrecttotalkabout"strategicoperationsplanning"or"strategichumanresourceplanning".

225225

Theseareexamplesoftactical(notstrategic)planningforaclearlydefinedpartoftheorganization.Whilesuchplansdoaddressstrategicissues,theydonotencompasstheorganizationasawholeand,accordingly,arereferredtoastacticalplans.

Tacticalpostaloperationsplanning,forexample,dealswiththetacticalplanningofmaildelivery,sorting,transportationandrouteingoperations.

Tacticalmarketingplanshavetodowithmarkets,salesandcustomerservice.

Tacticalhumanresourceplanninginvolveshumanresourcemanagement,skillsdevelopmentandtraining.

Tacticalfinancialplanninghastodowithfinancialmanagement,financialservices,budgetingandcosts.

Therearecountlessexamplesofothertypesoftacticalplan(dealingwithtechnology,logistics,management,quality,etc.),dependingonthescaleoftheorganizationinquestion.

Businessplansareanespeciallyimportantelementoflaunchinganewproductorservice.

Thecraftingofbusinessplanscomplementsthestrategicplanningprocess.Businessplansarehighlyspecificplansaddressingthefollowingtypesofissue:

Business analysis • Businessfeatures

• Drivingforces

• Keysuccessfactors

• Marketsize

• Commercialbusinessdesign

• Operationaldesignandresourcerequirements

• Feasibilitystudy

• Calculationofmonthlysalesvolume

• Calculationofsalesvalue

• Overheadcosts

• Investment

• Break-evenpoint

• Finalevaluation

Thefollowingfigureillustratesthedifferentlevelsofplanningdiscussedabove(thestrategic,tacticalandoperationslevels)andcorrespondinglinkages,andindicatestheimplementationperiodforeachtypeofplan.

5 ye

ars

1 ye

ar1

year

1 ye

ar

Strategic level

Tactical level

Operational level

Tacticaloperational plans

Tacticalmarketing plans

Work plans

Breakdown oftactical plans

Programmes

Strategic plan

226226

Aftertheapprovalofstrategicplansandcorrespondingprogrammes,projectsandsub-projectsandtheframingofapplicabletacticalandoperationalplanscomestheimplementationphase,followingthedistributionofallsuchdocumentsandtheengagementofallinterestedareasandstakeholders,eachofwhichwillfurnishandreceiveregularinformationontheprojectsandactivitieswithinitssphereofresponsibility.

Thepurposeofthemonitoringandevaluationfunctionthroughouttheplanningprocessistoscrutinizeperformancebasedoncomparisonsofactualresultsagainsttargetedoutcomes,particularlywithrespecttotheorganization'sobjectives,challenges,strategiesandpolicies.

Themonitoringandevaluationfunctionisdesignedtoensurethatactualperformanceisalignedwithestablishedstandards.

Monitoringisamanagementfunctionusingcomparisonswithestablishedstandardstomeasureandevaluatetheperformanceandoutcomesofspecificactionsasawayofprovidingfeedbackfordecisionmakers,toenablethemtoturnaroundorstrengthenperformanceortointerveneinspecificmanagementfunctionstoensurethatensuingoutcomesmeetestablishedtargets,challengesandobjectives.

Thefollowingfigureisageneraloutlineofthemonitoringandevaluationfunction.

3.3.1

Information requirements

for monitoring and evaluation

Partofthemonitoringandevaluationphaseoftheplanningprocessinvolvesestablishingthetypesofinformationrequiredasthebasisformonitoringactivities.

Types of required informationInformationrequirementsformonitoringandevaluationofthestrategicplanningprocessinclude,butarenotlimitedto:

• quantitativedataonthetimingofactivities;

• dataestablishingthedatesofallevents(information,reports,tables,actions,etc.);

• dataonpromisedandactualvalues;

• dataontheapplicationofthesevalues;

• dataonthesizeoftheworkforce;

• measurementsofthequalityofwork.

Start of monitoring and evaluation process

Generates data

Provides feedback for decision makers

Meets objectives and challenges

Action

Action

Improves and turns around performance

Redesigns the management system

Deviations?Is it

performing?

Meets objectives and challenges

Established standards

Compares and evaluates

NO NO

YES

YES

3.3

Monitoring and

evaluation of the strategic

planning process

3.2.7

Implementation

227227

Data collection and reporting intervalsDatacollection,processingandreportingintervalsbasicallydependonthetypeofactivityinquestion.Inthepostalsector:

• strategicmonitoringdatainvolvingtopmanagementshouldbecollectedorreportedmonthly;

• tacticalmonitoring(management)datashouldbecollectedorreportedweeklyorbimonthly;

• operationalmonitoringdatashouldbecollectedorreporteddailyandtabulatedonaweeklybasis.

Quality of informationTheform,channelsofcommunication,timing,timeliness,precisionandcontentofmonitoringandevaluationdataareallimportantfactors.Suchdatamustmeetthefollowingcriteria:

• Strategicmonitoring(topmanagement)datarequiresalowlevelofdisaggregationandhighlevelofaggregation.

• Tacticalmonitoring(management)datarequiresamediumlevelofdisaggregationandhighlevelofaggregation.

• Operationalmonitoringdatarequiresahighlevelofdisaggregation.

Sources of information Sourcesofinformationfallintotwobroadcategories:

• Internalsources–includingdatasuppliedbyactivitymanagersandusersofmonitoringandevaluationsystems(internalclients);

• Externalsources–includingdatafurnishedbytheoutsidepublic,independentaudits,thepressandoutsidesupervisoryagencies.

Data managers Eachactioncontemplatedinagivenplanmusthaveacoordinatorinchargeofitsimplementationandmonitoring.Thiscoordinatorisalsotheprimarysourceofinformationontheprogressofallactivitiesforwhichhe(orshe)isresponsible.Theindividualinchargeofcoordinatingeachgroupofactivitiesisresponsibleforaggregatingandforwardingcorrespondingdatatohis(orher)superiorbytheprescribeddeadline.Thus,thereclearlyneedstobeanestablishedchainofcommandforplanningpurposes.

3.3.2

Phases of the monitoring

and evaluation process

Informationisanessentialinputformonitoringandevaluationandthefoundationfordecisionmaking,asgraphicallyillustratedbelow.

- Problem assessment

- Data collection

- Data analysis

- Establishment of alternatives

- Evaluation of alternatives

-Implementation

-Developmentofmeasurement andevaluationmodels

-Performancemeasurement

-Comparisonofperformance againstexpectations

-Remedialaction

Topmanagementwoulddobesttofollowthestepsoutlinedbelowforthedueandpropermonitoringandevaluationofstrategicplanningactivities.

a. Development of measurement and evaluation modelsSuchmodelsarebasedonestablishedobjectives,challenges,goals,strategies,policies,projects,standardsandprocedures,andareusedasthefoundationforcomparisonsoftargetedoutcomes,whichmaybetangibleorintangible,explicitorimplicit,andquantitative,qualitativeand/ortime-driven.

b. Performance measurementTheperformancemeasurementandevaluationprocessestablishesandchooseswhattomeasureandthenmeasuresitbasedonquantitative,qualitativeandtime-drivencriteria.Thesecriterianeedtobecoherent,homogeneousandwellintegrated,soasnottodistortthemonitoringofplanningactivities.

c. Comparison of performance against expectationsIndicativetablesthatcontainperformancedataandcompareitagainstexpectationsareaneffectivemeansofvisualizingtheprogressofcorrespondingactionsandausefulsupportingtoolfortopmanagement,otherlevelsofmanagement,activitycoordinatorsandothercollaborators.

Dec

isio

n

mak

ing

pro

cess

Mo

nit

ori

ng

an

d

eval

uat

ion

pro

cess

228228

Ingeneral,therearefourpossiblefindingsfromsuchacomparison:

• Performancemeetsorexceedsexpectations;

• Performancealmostmeetsexpectations,withdeviationsfromtheoriginalplan;

• Performanceexceedsexpectations,withdeviationsfromtheoriginalplan;

• Performanceisfarbeyondexpectations.

d. Remedial actionItisimportanttotakespecialmeasurestopreventsignificantdeviationsfromtheoriginalplanor,insomecases,toreinforcepositiveoutcomes.

Themonitoringandevaluationsystemmust: • focusoncoreissuestoavoidwastingtimeandinflatingcosts;

• betransparent,tofacilitateitsunderstandingandacceptancebythemembersoftheorganization;

• bestringentandpreciseand,atthesametime,haveacertainbuilt-inflexibility,inlightoftheimprecise,changeablenatureofthepostalenvironment;

• berealisticandworkable,togenerateaccurate,objectivedatatofacilitatedecisionmakingandfurthereffortstosuccessfullyimplementthestrategicplan;

• engenderapositivecost-benefitratio; • beresponsiveandprovidefortheimplementationofquick-actingremedialmeasures,whichrequiresthatitbeunderpinnedbyspecific,clear,well-definedmonitoringmodels;

• beobjective,triggeringappropriatecorrectiveorstrengtheningmeasures.

Thegoalofthisfinalsectionofmodule4istoprovidesomeusefulguidanceforthedesignandimplementationofstrategicplans.Forconsistencypurposes,italsoincludesaglossaryprovidingstandarddefinitionsofthemaintermsusedinthediscussion.

Projectmanagersshouldkeepinmindthat,ifaprojectforwhichtheyareresponsibleisnotproperlypreparedandconducted,itcouldcauseproblemsintheimplementationoftheorganization'sstrategicplan.

Thefollowingrecommendationsforprojectmanagersaredesignedtohelpthemimprovetheirjobperformance:

• Focusontargetedprojectoutcomes. • Beflexible,withinreason. • Engageseniormanagementtosecurenecessarysupportforprojectpreparationandimplementation.

• Ensurethereisanadequate,realisticinformationsystem.

• Stayindirectcontactwithallindividualsinvolvedintheproject.

• Ensureabalanceddistributionofworkamongcorrespondingcollaborators.

• Keepprojectexpenditureatareasonablelevel,spendingonlywhatisnecessary.

• Stayrealisticandavoidbeingoverlyoptimisticorpessimistic.

• Encouragecriticismanddiscussionbyinterestedco-workerswithrespecttotheprogressoftheproject.

• Maintainconsistencywithpreviouspositionsanddecisions.

• Rememberthattheprojectisasystemandmustalwaysberegardedassuch.

• Resolveanydisputesovertheproject'smanagement.

• Bearinmindthattheprojectaddressesbothcurrentandfutureproblems.

• Maintainaneffectiveprojectmanagementandevaluationsystembasedonthemonitoringofprojectactivities.

3.4.2

Determinants of a successful

projectThesuccessofanygivenprojectandcorrespondingprojectactivitieshingeson:

• compliancewithestablisheddeadlines;

• compliancewithpre-establishedcostestimates;

• attainmentoftargetedtechnicalstandardsofquality;

• satisfactionoffeasibilityrequirements;

• attainmentoffinancialstabilityduringprojectimplementationandafteritscompletion;

• continuedoperationalstabilityofbusinessactivities;

• continuedfinancialstability;

• higheror,ataminimum,stableearningpower;

• betteror,ataminimum,continuedexploitationofbusinessopportunities.

3.4

General guidance

3.4.1

Recommenda-tions for project

management

229229

Thefollowingglossaryofplanningterminology

a. Mega-trendsMega-trendsaredesignedtoshowpatternsofchangeindeterminantandcriticalvariablesforthesurvival,growthandprofitabilityofagivenbusiness,productorservice.Theyshouldbeusedasthebasisforstrategicdecisionmakingforperiodsofbetweenfiveandtenyears.

b. Contextual analysisAcontextualanalysisisdesignedtoshowpatternsofchangeindeterminantandcriticalvariablesforthesurvival,growthandprofitabilityofagivenbusiness,productorservice.Itshouldbeusedasthebasisforstrategicdecisionmakingforperiodsofuptofiveyears.

c. MissionThemissionstatementdefinestheorganization'scurrentandpotentialraisond'être.Itarticulatesthepurposeoftheorganizationandthescopeofitsoperations.Itshouldbeexpressedintermsofthesatisfactionofneedsandofmarketdemandandexpectationsratherthanofspecificproductsorservicesofferedbytheorganization.

d. VisionThevisionsumsuptheaspirations,ideas,expectations,ambitionsand"dreams"ofthoseinchargeofmakingdecisionsontheorganization'sfuturebusinessoperations,productsorservices.Itestablishesatimeframeandprovidesguidanceforcompetitionmanagement.Itneedstobeclearandobjectiveandtoarticulatehowtheorganization'sstrategiesperceiveitsbusinessoperations,productsandservicesovertheyears.

e. Core competenciesSkillsandtechnologyenablinganorganizationtoofferitscustomersaparticularbenefit.

f. Values Valuesareattitudesandbehaviourunderpinningbasicstrategicdecisions.

g. PoliciesPoliciesareparametersorguidelinesusedindecisionmaking.Theyestablishlevelsofauthority,valuesetsand/orfloorandceilinglimitsandthescopeofstrategiesandactionsinfurtheranceofestablishedgoalsandobjectives.

h. Strategic assessmentAnanalysisoftheinternalandexternalenvironmentasthebasisfortheframingofcorporateandsectoralstrategies.

i. Prospective analysisAstudyofthevariablesanddatacollectedaspartofthestrategicassessmentfortheconstructionofalternativescenariosandthedetectionoffutureopportunitiesandthreatsthroughouttheforecastingperiod,identifyingcorecompetenciestobedevelopedorstrengthenedandsettingprioritiesforfutureaction.

j. Strategic positioningEvaluationofthecompetitivepositionofthebusiness,productorserviceinquestioninthecompetitivedomainforthepurposeofsettingstrategicobjectives,framingnecessarystrategies(programmes,projectsandactions)fortheattainmentofsuchobjectives,formulatingpoliciesrelatingtosuchstrategies,andestablishingnecessaryoperatingguidelines.

k. Strategic objectivesStrategicobjectivesarefullyquantifiable,measurabletargetswithestablisheddeadlinestobecontinuouslypursuedbytheorganizationwithaviewtodisruptingthestatusquo.

l. Programmes Packagesofsynchronizedprojectsandactivitiessumminguptheorganization'scorporateplansandaspirationsforagiventimeperiod.

m. Projects Packagesoffinite,time-phasedactivitiesutilizingallavailableresourcestomakemajorchangestothestatusofanadministrativeprocessorprocedurewithintheorganization.

n. Sub-projects Packagesoffinite,time-phasedactivitiescontributing,inpart,totheimplementationofagivenproject.

o. Action planApackageofcommonelementsofdifferentprojectsrelatingtoaspecificarea(humanresources,operations,marketing,etc.).

p. ActionsElementsofacontinuingeffortorprojectcontemplatedinanactionplandesignedtoimproveperformanceorgenerateaparticularoutcomewithoutmakinganymajorchangesinestablishedmethodsorprocessesandwithoutsystematicallyaddressingtheprobleminquestion.

3.4.3

Generally accepted

concepts and terminology

Module VPostal Regulation

233233

Thedeliveryofnationwidepostalservicesandtheoperationofthedomesticpostalmarketrequirethatgovernmenthavenecessarymechanismstoensure:

• theestablishmentofpublicpoliciesgoverningthepostalsector;

• dueandproperdeliveryofthebasicoruniversalpostalservicestowhichallsegmentsofthepopulationarerightfullyentitled;

• compliancewiththeprovisionsoflegislationgoverningpostalactivities,particularlywithrespecttothereservedservicearea;

• healthycompetitiononthepostalmarket.

Foryears,thelackofregulationsinthepostalsectorhashamperedmarketdevelopmentand,insomecountries,hasactuallyunderminedtheviabilityofthedesignatedoperatorresponsibleforprovidingtheuniversalpostalservice.Thedesignatedoperatorisrequiredtoensurenationwideuniversalservice,whileprivateoperatorsconfinethemselvesstrictlytolucrativemarketsegmentsandniches,withnospecialdemandsplacedontheiroperations,whichoftenforcesthedesignatedoperatortooperateataloss.

Itisthedesignatedoperatorwhichhasbeenbehindpostalregulatoryeffortsinanumberofcountries,asithasstriventomakegovernmentofficialsawareoftheneedforregulation.Sucheffortshavebeenmostsuccessfulincountrieswhosegovernmentsarealreadyregulatingotherindustries,suchasthetelecommunications,transportationandpowersectors.

However,forthemostpart,theissueofregulationhasarisenaspartofnewtrendsdrivingtradeinservices,particularlyoverthecourseofthelasttwodecadesofthetwentiethcentury.

Itisnottheintentofthismoduletogointodetailaddressingorexplainingthetechnical,historicandpoliticalfactorsbehindtheimplementationofpostalregulationsatthelocalorinternationallevelssince,first,themainpurposeofthisGuideistoprovideuserswithpracticalworktoolsand,second,becausethedrivingforcesbehindthisprocessareasvariedasareprevailingconditionsatthecountryandregionallevels.

Accordingly,thismodulefocusesoncertainbasicswhich,hopefully,willbehelpfultoanycountrieswhichmayneedtomounttheirownpostalregulatoryefforts.Despiteagrowingtrendtoseparateoperationalandregulatoryfunctions,therearestillcomparativelyfewtheoreticalreferencesontheissueofpostalregulation.

However,aseriesofnoteworthyinternationaltrainingactivitiesbytheUniversalPostalUnionoverthelastfewyears,alongwiththepublicationofcertainreferencematerialsandtheconductofseveralinternationalforumsinthisareaarehelpingtobuildcommongroundforthedevelopmentofanappropriateframeofreferencefortheestablishmentofclear,realisticpolicieswithrespecttopostalregulation.

Introduction

235235

"Publicservices"areacoreelementofnationalsocietalmodels.Thepopulationofanynationshouldhaveaccesstohigh-qualitypublicservicesasawayofpromotingsocialandeconomiccohesiveness,improvingthequalityoflifeandensuringfullandcompleteexerciseofthebasicrightswhichshouldberecognizedundernationalconstitutionalprovisions.

Boththeexecutiveandthelegislativebranchesofgovernmentplayanessentialroleinthisprocess,withthepowertoembodychangesdictatedbydevelopmentsinthesurroundingenvironmentinnewlegislationandregulations.

Anation'scitizenshavearighttopublicservicesandthegovernmenthasadutytoensuretheoperationofsuchservices,directlyprovidingthemviaoneofitsofficesorthroughtheestablishmentofspecificinstitutions,andthroughtheenactmentofgoverninglegislationinkeepingwithconditionsinthesurroundingenvironment.

Thegovernmentsofallcountrieshavepublicserviceobligations,fulfillingsuchobligationsdirectlyviaoneoftheirofficesorthroughtheestablishmentofappropriateinstitutions,andthroughtheintroductionofrelevantoperatingprocedures.However,intime,mostlegalandregulatoryinstrumentsbecomeobsoleteinthefaceofconstantchangesinsocietalneeds.

Inmostcountries,governmentinterventionbeganinthemostlucrativepublicserviceindustries,whichrequiredsignificantinvestmentfordevelopmentandwhich,atthesametime,hadcaughttheinterestoftheprivatesector,asinthecaseofthetelecommunicationsandpowerindustries,inwhichwefindtheearliestexamplesofgovernmentregulation.

Therewaslittleinterestorinvestmentinbasicsocialsectorsorindustrieswithoutanyvalue-addedproductsandservices,resultinginasteadydeteriorationinsuchservices.

Norwasanyattemptmadeatthetimetoregulatetheseservices.Accordingly,thegovernmentsawnoneedtomakeanydecisionswithregardtothesesectorsuntiltheywerealreadyincrisis.Manycountriesconsideredonlythesocialdimensionofpostalservice,despiteitspotentialasadrivingforceineconomicdevelopment.

Countriesaroundtheworldhavecometorealizetheextentofthedeteriorationinuniversalpostalserviceandareinterestedinfindingwaysofstrengtheningthedesignatedoperatorandofmountingsweepingreformprogrammesaddressingthekeyissueofpostalregulation.

Government and Regulation

1

Public services

Social, economic and geographic

cohesiveness

Legislation and regulations

Government supervision of proper service

delivery

Recognition by the

constitution

Public services

1.1

Public services and regulation

1.1.1

Exercise of the constitutional

powers of government

236236

Changesandrefinementsintheconceptofpublicservice,aswellasintheactualservicestobeensuredbygovernmentinaclimateofcompetitionfromprivateenterprise,havemadeitnecessarytothinklongandhardaboutthewaysandmeansofdeliveringsuchservices.

Inthepast,publicserviceswereprovideddirectlybythegovernment,throughoneofitsoffices(ministry,secretariat,generaldirectorate,etc.).

Overtime,itwasnotedthat,toprovideservicesproperly,theyneededtobeprovidedinadifferentway,withtheresultthat,incompliancewithpublicpolicies,manycountriescreatedgovernmententitieswithgreatermanagementautonomytoprovidepublicpostalservices.Thoseentitieswereconsideredlegalpersonsandhadtheirownassets.Thus,legally,theywerenolongerpartofthenationalgovernmentand,therefore,couldnotexerciseauthority.

Asaresult,theformergoverningministriesretainedsomeresponsibilityinordertoexercisethenecessaryauthorityinthepostalsector,andtheymaintainedregulatorycontrolofpostalservices.Thisiscalledtheseparationofregulatoryandoperatorfunctions.

Itisalsoimportanttorememberthattheformer"postalmonopoly"typicallydidnotincludeallpostalservices(forexample,packetsandparcelswerenotincluded),meaningthattheprivatesectorhasalwaysbeenapartofthepostalbusiness.

Thus,eachcountryneedstodecidewhichservicesshouldcontinuetobeprovidedexclusivelybygovernmentviatheentitycreatedforthatpurpose,andwhichcouldbeofferedbytheprivatesectorinacompetitivesystem.

Furthermore,countriesneedtoaddresstheproblemofhowtodisengagethemselvesfromcertainpublicservices,ifsuchservicesareindeedinthepublicinterest,andhowtokeeppropercontrolintheeventoftheoutsourcingoftheseservicestocontinuetoensurethefulfilmentofgovernmentaluniversalserviceobligations.

Governmentshavediscoveredthattheonlywaytoestablishaproperframeworkfortheoperationofpublicservicesinthenewglobalenvironmentisbyenactingappropriatelegislationensuringthefulfilmentoftheirobligationsanddefiningtheresponsibilitiesofdifferentmarketstakeholders.

Alackofappropriatelegislationandregulationsgoverningthemarketisdetrimentaltobothgovernmentandthegeneralpublicsince,soonerorlater,thepopulationwillbeleftwithoutanypublicservices,forcingthegovernmenttocomeupwithnewsolutionsataconsiderablepoliticalaswellasfinancialcost.

Globalizationisplayinganimportantroleinshapingthegovernment'sperceptionofpublicservices.Pressurefromprivateenterprisetoenteramarkettraditionallyreservedforgovernmentoperatorsismakingitincreasinglydifficultforgovernmenttofulfilitsresponsibilitytoensurethecontinuityofuniversalservices.

Thephenomenonofcompetitiononanunregulatedpostalmarketisnothingnew,particularlyincertaincountriesinwhichlocalandforeignprivatefirmshavepenetratedthedomesticmarket,takingadvantageofobsoletelegalframeworks.

Inmanycountries,thisphenomenon,combinedwiththeexistenceofextremelytraditionalpublicservicemanagementmodelswhoseoperationhingedmainlyonpoliticalleverage,leftlittleroomforthemountingoftimely,effectivereformefforts,resultinginthegradualdebilitationofthedesignatedoperator.

Thebestwaytohelpsolveproblemsinthepostalsectorofanygivencountryisthroughtheenactmentofadministrativeandlegislativeinstrumentsbythenationalgovernment,exercisingitsregulatoryauthority,asthebodyultimatelyresponsiblefortheprovisionoftheuniversalpostalservice.

Thisprocessisgraphicallyillustratedinthefollowingfigure.

Public services as services of general interest in the face of new trends

in the global economy

Thepublicserviceisidentified with the national iterests

The new environmental affects universal service delivery

The designated operator needs governmentfinancingtoprovideservice

in loss-making areas

Financial compensation for the designated operator

Government must issue regulations to ensure universal service delivery

1.1.2

Changes in public services

237237

Freemarketprinciples,amongwhichprofit-takingprevails,canjeopardizethepursuitofsocialgoalssuchasensuringthatallsegmentsofthepopulationhaveaccesstohigh-qualitybasicservices.Thismeansthatthegovernmentwillneedtointervenetoensureequalaccesstouniversalpostalservice.

ThetermandtheconceptofuniversalpostalservicearedefinedintheActsoftheUniversalPostalUnion,inkeepingwiththesubstantivenatureofthisissue.ThiswasdiscussedatlengthinmoduleIIoftheguideandwillbeaddressedlaterinthismodule.However,itisimportanttounderscoretheessentialroleplayedbygovernmentinensuringtheprovisionofuniversalpostalserviceasabasichumanright,regardlessofanyeconomicconsiderationsaffectingserviceoperationonthepostalmarket.

Thepremisethat,facedwiththeprospectofthedebilitationofthedesignatedoperator,theconsumerpublic,includingbothlarge-scalemailersandindividuals,willsimplyacceptthisnewrealityandturntoprivateserviceoperatorsisclearlyrefutedbythefacts.Thereareclearcasesofcountriesinwhichthegovernmenthashadtooverturnstrategicdecisionsandspendenormoussumsonrestoringpostalservices.

Eachandeverycountryneedstorealizethatthecontinuedoperationofitspostalmarketwithoutproperregulationcouldgraduallyweardownthedesignatedoperatoruntilreachingacriticalsituation,causingabreakdowninservicedelivery,atanenormouscosttothenationaltreasury,whichwouldbeforcedtopermanentlytakeoverthefinancingofuniversalservicecosts,ashasalreadyoccurredinanumberofcases.

Thus,beforethingsgotoofar,itiscrucialtolaythenecessarygroundworkforthegovernmenttoexerciseitsregulatoryauthorityoverthepostalindustry,whichisespeciallyimportantrightnow,toensurethecontinuedfulfilmentofitspostalserviceobligations.

Thus,thecountry'sregulatoryauthoritiesmuststrivetoprotecttherightofcommunication,guidedbytheunderlyingprinciplethateveryonehasthesamerightofaccesstopostalservice,regardlessoftheirgeographiclocationoreconomicorsocialstatus.

Allsegmentsofsocietyneedtorealizetheimportanceofsoundgovernmentdecision-makingasthebasisforissuingappropriateregulationsensuringtheprovisionofuniversalpostalserviceandtounderstandthatuniversalservicedeliveryrequiresinvestmentandfundingtomeetcorrespondingneeds.

Thus,investmentprogrammesatcountrylevelareessentialtobringuniversalserviceinlinewithnewbreakthroughsintechnology,helpdiversifythebusinessactivitiesofthedesignatedoperatorandmodernizelogisticsprocessesthroughthetechnologicaldevelopmentofcorrespondingfacilities.

Natonal regulatory authority: Supervision and development of the universal postal service and the postal sector

SUPERVISES theeffectivedeliveryoftheuniversalpostalservicebythedesignatedoperator

ENSURESthedeliveryoftheuniversalpostalserviceintheaccordancewithlegislationandregulationnsgoverningserviceaccess,qualityandpricing

MONITORS AND INSPECTS postalserviceoperationsonthenation'spostalmarket

SANCTIONS violationsoflawsandregulationsgoverningthedeliveryoftheuniversalpostalservice.

Government must ensure universal postal service

Accordingly, goverment must guarantee universal postal service delivery

to the entire population

For all citizens, in all parts of the country, at affordable prices1

Regulating all service delivery conditions2

While at the same time ensuring healthy competition3

1.1.3

Responsibility for maintaining

universal service

238238

Thegovernmentnormallygivestopprioritytomountingmodernizationprogrammesforthepublicsectorrequiringmajorinvestmentsdesignedtohelpcreatewealthandpromoteallformsofnationwideeconomic,socialandculturaldevelopment.

Developmentprogrammesforthepostalsectorneedtobedesignedandplannedinsuchawayastoformanintegralpartofnationaldevelopmentplans,inparticularwithrespecttothecountry'sinfrastructure.

Theregulatoryauthorityneedstoworkwiththegovernmentinfulfillingitssocialandeconomicresponsibilities,aswellaswiththepublic–withbothbusinessesandindividuals–whichisentitledtoassurancesofnecessarysafeguardsforcontinuedaccesstouniversalpostalservice.

Thus,thefunctionsofregulationandofregulatoryauthoritiesareto:

• protectconsumerinterestsandmeetcustomerneeds;

• protectthepublic'srighttohigh-qualityservice;

• ensurethemountingofeffortsdesignedtomodernizeserviceandimproveservicequality.

Theroleofregulationasavehiclefortheattainmentofgovernmentobjectivesisillustratedinthefollowingfigure.

1.2.2

Exogenous factors

Theshapeandscopeofthepostalsector,likeotheressentialservicesectors,haschangeddramaticallyoverthepastfewyears.

Newbreakthroughsintechnologyhavehadaparticularlystrongimpactonconventionalpostalcommunicationsand,togetherwithotherfactors,arerevolutionizingtoday'spostalservices.Thisnewtechnology,whichwasoriginallyviewedbysomeasathreattothepostalsector,hasopenedupawholenewrangeofpossibilitiesforthepostalindustry,andmanycountriesanddesignatedoperatorshaverecognizedandcapitalizedonthisfacttomodernizeandadapttheirservicestomeettheneedsoftoday'snewinformationandcommunicationssociety.

ThisissuehasalreadybeendiscussedinmoduleIoftheguide.However,itisinterestinghowtheglobalcommunicationsenvironmenthaschangedsorapidlyandbecomesocomplexthatgovernmentshavehadtomakedecisionsontechnicalissuesrequiringstudiesgoingfarbeyondmerepolicyassessments.

Exercisingitsregulatoryauthorityallowsgovernmenttodoitsjobinprotectingtherightsofallsegmentsofthenation'spopulationwhile,atthesametime,honouringitscommitments.Regulationofthepostalmarketthroughtheenactmentoflawsandregulationsenablesthepublictoexerciseitsrighttouniversalservicemeetingreasonablestandardsofaccess,regularity,securityandquality.

Improvesservicedeliveryconditions

Stimulatesinvestmentinthedesignatedoperatorandintheuniversal

postalservice

Fosterstheuseoftechnologyandinvestmentinthe

postalsectorthroughfaircompetition

Helpsestablish sectorprogrammesandthenationaldevelopmentplan

Postal regulation - Exogenous factors

Within this environment, government must guarantee universal postal service as an

engine of social, economic and geographic cohesiveness

Change factors1Globalization2

New technology3

1.2Regulation as

part of the postal reform

process

1.2.1

The regulator's role in national

development policy

Role of regulations

239239

Inmanycountries,regulation,inthestrictestsenseoftheterm,wastypicallyataskperformedbythedesignatedoperatorand,inthosecountrieslackingamoredevelopedregulatoryframework,thedesignatedoperatorhadbothoperationalandregulatoryfunctions.

However,suchasystemhasproventobeineffective.Notonlyisitimpracticaltohavethedesignatedoperatoractasboththejudgeandthepartyatinterest,sotospeak,butthedesignatedoperatorhasneithertheauthoritynorthenecessarytoolstooverseetheentirepostalindustry.

Intoday'senvironmentwiththepostalmarketopenedtoprivateenterprise,postalservicemodelshavebeenmovingtowardstheseparationofregulatoryandoperationalfunctions,withconsistentmarketregulationtoguaranteeallmarketoperatorslegalsecurityandtheenforcementofestablishedgroundrulesfortheoperationofpostalservices.

Regulationmustalsoensuretheeffectiveinterplayofmarketforcestocreateastateofequilibriumguaranteeingthesmoothoperationofthepostalmarket,equalmarketaccessandtheenforcementofcorrespondinggroundruleswhile,atthesametime,fosteringgeographicandsocialcohesivenessbyensuringthedeliveryofahigh-qualityuniversalpostalservice.

1.3

Fulfilment of governmental

obligations

1.3.1

Implementation of legal mandates

under the postal act

Postalregulationmustprovideinterestedstakeholderswithlegalsecuritybyclearlyestablishingtheirrightsandobligations.

Postalregulationbeginswiththeenactmentoflegislationbythenationalgovernment,exercisingitsauthorityoverpostalaffairs.Thepostalactshouldincludeprovisionsaddressingsector-wideproblemsandlayingthefoundationforthesmoothoperationofthepostalmarketandforprotectingthepublicinterestbyensuringthedeliveryofuniversalpostalservice.

Inturn,administrativeinstruments,namely,regulations,decrees,standards,andsoon,areveryimportant.Theirpurposeistoimplementtheprovisionsofpostallegislationandclearlydelineatethescopeofpostalservices.

Othermatterswhichcanalsoberegulatedundertheprovisionsandinkeepingwiththespiritofthepostalactinclude:

• thelicensingsystemforserviceoperationestablishedunderthepostalact;

• theservicepricingsystemestablishedunderthepostalact;

• theformalagreementgoverningthedeliveryofuniversalpostalservicebythedesignatedoperator;

• theorganizationalstructureoftheregulatorybody.

Theadvantageofrule-makingthroughtheissuanceofgovernmentregulationsistheflexibilityofthisprocesscomparedwithformalitiesfortheenactmentofnewlegislation.

However,keydecisionspertainingtotheregulatorymanagementofthepostalmarket,serviceoperation,andtheorganizationofthepostalsectorshouldbedefined,oratleastconsidered,inlegislationsothattheycanbedevelopedthroughadministrativeinstruments.

1.2.3

Separation of service

operation and regulatory functions

Establishing regulations governing the postal market

Governing ministry

National regulatory authority

Designated operator

Private operators

Enforcing market rules

Serving as an arbitrator for postal service operators

Ensuring all citizens have access to the universal postal service

Reconciling rules of fair competition with postal regulations

Postal sector Responsabilities justifying the regulatory authority's functional

and legal autonomy

240240

Implementation of the regulatory model under the postal act

Thepostalactshouldestablish

THE LEGAL STATUS ofthenationalregulatoryauthority(postalregulation)

THE TYPE OF REGULATION (specific, sectoral,multisectoral)

THE FINANCING METHOD

Substance of the enabling legislation of the national regulatory authority

• Legalframeworkforservicesonthepostalmarket

• Serviceoperatingsystemandlicensingprocedures

• Supervision,monitoringandinspectionofpostaloperators

• Pricingsystemforpostalservices

• Scopeandconditionsofnationaluniversalpostalservicedelivery

• Agreementgoverninguniversalpostalservicedeliveryconditions,andservicedevelopmentplan

• Synchronizationandadaptationofdomesticandinternationallegislationaffectingconsumers,andtheirimplicationsforthepostalsystem

1.3.2

Development of the national

postal sectorOneofthemainreasonsforthedebilitationofthedesignatedoperatorincertaincountriesisitsnegligibleimpactonnationaldevelopmenteffortsandageneralignoranceofthepotentialityofpostalserviceasadriverofnationaleconomicgrowth.

ModuleIoftheguideexplainshowthepostalservicehasthepotentialtohelpstrengthenthenationaleconomy,tradeandcompetitiveness.Itisuptothedesignatedoperatortoconvincetopgovernmentofficialsoftheessentialroleofthepostalservice.

Oncereformeffortsforre-energizingthepostalsectorinlinewithnationaldevelopmentplansareunderway,itwillbeuptotheregulatoryagencytotakeadvantageoftheenablingenvironmentcreatedbythepostalacttostrengthenthedesignatedoperator'scontributiontonationwideeconomicdevelopmenteffortsandhelpitexpanditspostalserviceoperationsandactivitiesinrelatedbusinessareas.

Functions of government

ENSUREeffectiveuniversalpostalservicedeliveryandfinancingmethods

MONITORpostaloperatorcompliancewithservicedeliveryconditions

ENSUREthetechnologicalandeconomicdevelopmentoftheuniversalpostalservicetomeetexogenousrequirements

ESTABLISHinvestmentprogrammesforthetechnologicalandeconomicdevelopmentoftheuniversalpostalservice

SUPPORTinvestmentanddevelopmentpoliciesforthepostalsector

ENSUREtransparencyandtheenforcementofmarketrules

241241

Oncegovernmenthasmadethedecisiontoestablishanappropriateregulatoryframeworkforpostalservicethroughtheenactmentofapplicablelegislation,itisuptodesignatedofficialstotakenecessarymeasuresforsettinguparegulatorystructure.Thefunctionsandotherfacetsoftheregulatoryagencycanbemappedoutintheprovisionsofapplicablelegislationandassignedtospecificunitswithinitsorganizationalstructure,asestablishedbyitsstatutoryrules.However,practicalissuesassociatedwithpostalregulatoryfunctionsarebestaddressedinaregulatoryinstrument,whichgenerallyoffersmoreflexibilityandspeedshouldamendmentsbeneededand,thus,isbettersuitedtotoday'srapidlychangingpostalenvironment.

Inchoosingtogetinvolvedinpostalaffairsanddecidingtoestablisharegulatoryagencyforthepostalsector,thegovernmentwillneedtoconductaseriesofpreliminarystudiesasthebasisforamoreobjectiveassessmentofprevailingconditionsinthenation'spostalindustryandintheinternationalpostalenvironment.

Itwillneedtoexaminetheinherentandexternalfeaturesofpostalservicesasthebasisfortheframingoflegislationconsideringbothmedium-andlong-termtrends.Naturally,itwillalsoneedtoknowwhatthepublicthinksaboutdifferentpostal-relatedissues.

Thus,itisimportanttoheightengovernmentawarenessoftheneedtoreformthepostalsector,sincetheveryfirststepsinthisdirectionwillrequirecertainminorinvestmentstofundtheabovementionedstudies.

Thelegalframeworkforpostalregulationisgraphicallyoutlinedinthefigurepresentedonthenextpage.

Regulatory mechanismsCONSTITUTION – Givesthegovernmentexclusiveauthoritytoenactlegislationgoverningbasicrightsandessentialpublicservices.

POSTAL ACT – Governscoreissueswithinthepostalsector,establishesanationalregulatoryauthorityandassignsitspecificpowersandfunctions.

IMPLEMENTING REGULATIONS –Expandonthecoreissuescontemplatedinthepostalact.

Maybeintheformof: › governmentdecrees › executive(ministerial)orders › rulings(byotheragenciesorbytheregulatoryauthority)

› standards

Regulatory agency • Createdbythepostalactorotherlegislation • Functionallyandlegallyseparatefromserviceoperations

• Assignmentofassetsandspecificationofitssourcesoffunding(inthecaseofanindependentagency)

• Regulatoryagencieswithoutindependentlegalstatusaretobefundedbybudgetappropriationsfortheareaorunitofthegoverningministry

Thefirststepafterestablishingtheprocesstobefollowedbythegovernmentinsettinguptheregulatoryauthorityistomapoutcertaincoreissues,asillustratedbelow.

Setting up the regulatory structure

2

Postal act or special legislation

• Legalstauts • Affilation • Systemoffinancing • Powers/functions

Creation of a national regulatory authoruty

2.1

Decisions on postal

regulation and implementing

procedures

242242

Thedecisionwithrespecttotheaffiliationoftheregulatoryagencywilldependonconditionsineachcountry.Whateverthedecision,itmustberealisticandobjective.Therearesomewhobelievethattheregulatorshouldbeanindependentgovernmentagency.Therearegoodargumentstobemadeforthiscasefromthestandpointoftransparency,forexample.

However,fromapracticalpointofview,thisregulatorymodelrequiresfindingtherightformulaforgovernmentinterventioninoverseeingthepostalsectortoguaranteeuniversalservicedelivery.

Thedebateovertheissueoftheaffiliationoftheregulatoryagencyalsorevolvesaroundtheadvisabilityofhavingaspecificpostalsectorregulator;ofintegratingitwithanothersectorregulator,suchascommunications;orevenofputtingitinthehandsofamulti-sectorregulator,suchasforpublicservices.

Eachofthesethreeoptionshasbeenimplementedinonecountryoranother,andexperienceshowsthatallthreehavetheiradvantagesandtheirdrawbacks.Clearly,themoreautonomyenjoyedbythepostalregulator,thebetteritcandoitsjob.Andwhilehavingaspecificpostalsectorregulatormaybethebestoption,thecostsinvolvedcouldmakeitunfeasible.Experiencehasalsoshownthatthedisadvantageofhavingthepostalregulatoryauthorityoperateaspartofatelecommunicationsregulator,forexample,isthatitoftentriestotakethesameapproachtothepostalsector,despiteitsuniquefeaturesanddifferentuniversalservicecriteria.

Thisissueiscloselyrelatedtotheissueoftheaffiliationofthepostalregulatorand,consequently,dependsontheuniquecircumstancesineachcountry.Postalregulatoryfunctionscouldbecarriedoutbyanindependentagencywithseparateassetsandlegalstanding,adecentralizedgovernmentagencyoracentralgovernmentbodysuchasacabinetministryorothertypeofgovernmentalunit.

Inanyevent,thenationalregulatoryauthoritymustbefunctionallyandlegallyseparatefromthedesignatedoperator,sinceitisresponsibleforoverseeingitandotheroperators.

Lastly,itisbesttoseparateregulatoryfunctionsfromthegovernmentbodyresponsibleforestablishingpostalpublicpoliciesinordertoensurethattheyareseennotsimplyasregulatoryactions,butrather,asactsofgovernment.

2.2.3

FinancingThenationalregulatoryauthorityshouldstrivetobefinanciallyself-sustaining.Regardlessofitslegalstatus,anticipatedexpensesandnecessaryincomeforcoveringsuchexpenseswillneedtobeclearlyspelledouteitherinanindependentbudgetoraspartofaconsolidatedbudget(inthecaseofanagencywithoutindependentlegalstatusandwithnoautonomy).Theidealsituationisanationalregulatoryauthoritywhichdoesnotrequireanygovernmentfundingor,inotherwords,whichisnotaburdenonthepublictreasury.

Theprocessofestablishinganationalregulatoryauthority,whetherintheformofanindependentagencyorasacentralgovernmentunit,mustincludeanassignmentofassetsandaspecificationofallsourcesoffundingtohelpensureitssmoothoperationandeffectiveperformance,includingbutnotlimitedto:

• incomefromfeesforregulatoryservices;

• operatingincomeandrevenues;

• incomeandrevenuesfromholdingsinotherorganizations(inthecaseofindependentagencies);

• anyandallotherallocatedfunding.

2.3

Regulatory functions

Thefunctionsofthenationalregulatoryauthorityareprimarilyfivefold,focusingonthepostalmarket,universalpostalservice,systemintegrity,protectionoftherightsofpostalserviceconsumers,andinternationalrelations.

2.3.1

Market-related functions

Theregulatorisinchargeofregulatingthepostalmarket,nottolimititsoperationinanywaybut,onthecontrary,toensurecompliancewithestablishedgroundrulestogivelicensedserviceoperatorsaccesstothemarket.Whereapplicable,itmustensurethatcompetitorsdonotinfringeontheserviceareareservedforthedesignatedoperatorwhile,atthesametime,makingsurethattheseoperatorsareabletoexercisetheirrighttodeliverservicesoutsidethereservedareatopromotefreecompetitionandpreventunfairpractices.

2.2

Practical matters:

ways and means

2.2.1

Affiliation

2.2.2

Legal status

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Up-to-date,in-depthinformationonsupplyanddemandforpostalproductsandservicesonthepostalservicesmarket,thepublicationofanannualreportonthestateofthesector,andthecommunicationofinformationonapplicablelegislationandregulationsandontherightsandobligationsofeachandeveryplayeronthepostalmarkettointerestedstakeholders(customers,operatorsandbusinessingeneral)willhelpstrengthenthepostalmarket.

Marketresearchbythepostalregulatoronthefollowingandotherrelatedissuesisessentialtoprovideguidancefortheexerciseofitspostalregulatoryfunctions:

• theextentofthedevelopmentofthenation'spostalindustry;

• nationwidepostalserviceneeds;

• quantitativeandqualitativecharacteristicsofdemandforpostalservice;

• economic,operationalandlabour-relateddataonpostaloperators;

• theleveloftechnologicaldevelopmentofserviceoperators;

• ananalysisofthecurrentlegalframeworkforthenation'spostalsector,includingprovisionswithrespecttocompetitionandconsumers;

• thetechnicalandeconomicviabilityofpostalserviceenterprises;

• thequalityofpostalservicesrenderedbythedesignatedoperator;

• universalpostalservicestandards;

• thescopeofuniversalpostalservicesrenderedbythedesignatedoperator;

• supplyanddemandforuniversalservices;

• standardsofqualityandpricesonthepostalmarket;

• thelevelofinvestmentinthepostalsector;

• developmentplansandthelevelofinvestmentbythedesignatedoperator.

Theperformanceofthese(domesticandinternational)studiesbythenationalregulatoryauthorityisawayofkeepingabreastofmarkettrendstocontinuouslystrengthenandupdateitsknowledgeandexpertise.

Asfarasuniversalpostalserviceisconcerned,thenationalregulatoryauthorityalsoneedstobeknowledgeableofbasicpresentandfutureconsumerneedswithrespecttothepostalservicetoenableittocontinuallyadaptitsworkinlinewithchangingpublicneeds.

Inexercisingitsregulatoryfunctions,thepostalregulatorwillneedtomeasurethequalityandefficiencyof:

• universalpostalservicedeliverybythedesignatedoperator;and

• theoperationofpostalservicesopentocompetition.

Thepostalregulatorand,byextension,thegeneralpublicshouldbeawareoftheactualqualityofuniversalserviceofferings,measuredagainststandardsofqualityestablishedundercorrespondingregulations.Theregulatorshouldalsoinformthepublicastothequalityofdifferentclassesofserviceofferedbydifferentserviceoperatorsdoingbusinessonthepostalmarket.

ThisissueisdiscussedatlengthinmoduleIIoftheguide,whichisdevotedspecificallytouniversalpostalservice.

2.3.2

Universal postal service

functionsOneofthemainrolesoftheregulatoristoensurefulfilmentofthegovernment'sobligationstosociety,thegeneralpublicandinternationalorganizations,onitsbehalf.

Asweknow,universalpostalservicesarebasicpostalserviceswhoseprovisionistobeguaranteedbygovernmenttoallsegmentsofthepopulationinallpartsofthecountryonacontinuingbasis,ataffordableprices,subjecttospecificstandardsofquality.

Servicedeliveryconditionswillneedtobemonitoredbythenationalregulatoryauthorityineachcountry.Thedesignatedoperatorchargedbythegovernmentwithprovidinguniversalpostalserviceisdutyboundtoadheretocertainbasicprincipleswithrespecttoservicedelivery,accordingtowhich:

• allcustomersmustbetreatedequallyandofferedtheexactsameservices;

• therecanbenodiscriminationagainstanycustomersinthedeliveryofuniversalpostalservice;and

• servicedeliverymaynotbedisruptedorsuspendedunderanycircumstances,exceptincasesofforcemajeure.

244244

Theregulatorisresponsibleforissuingregulationsestablishingspecificservicedeliveryconditionsforuniversalpostalservices,exceptwherethesupervisoryministryhasretainedthatfunction.Specificationswithrespecttoservicedeliveryconditionsshouldaddressfactorssuchas:

• accessibility; • speedandreliability; • security; • accountability.

Inadditiontosupervisingandmonitoringcompliancewithservicedeliveryconditions,theregulatoryfunctionsofthepostalregulatoryauthorityincludetheadministrationofpricingpoliciesforserviceofferingsonthepostalmarket,including:

• universalpostalservicesprovidedbythedesignatedoperator;and

• servicesopentocompetition,providedbyallpostaloperators,includingthedesignatedoperator.

Inexercisingitsregulatoryfunctionsandauthorityunderthepostalact,thepostalregulatormayestablishwhatitconsiderstobethemostappropriatepricingsystemunderconditionsonthepostalmarketinthatcountry.Inimplementingpricingpolicyforthepostalsector,theregulatormaychoosetousemultipleandmixedpricingschemesinlinewiththelegalframeworkforserviceoperation,asoutlinedbelow.

• Price control.Underthispricingmechanism,theregulatoryauthoritysetsthepricesofserviceofferings.Thismechanismisgenerallyusedforreservedpostalservicesoperatedunderanexclusivefranchisebythedesignatedoperator.

• Monitored free market pricing.Freemarketpricesforservicesopentocompetition,subjecttosupervisionbytheregulatoryauthorityandgovernmentinterventiononthepostalmarketincasesofabuseorunfairpractices.Thistypeofpricingmechanismcanbeusedforallnon-reserveduniversalpostalservicesopentocompetitionand,thus,isapplicabletoservicesrenderedbythedesignatedoperatoraswellasprivateoperators.Intheeventoftheneedforinterventionbythepostalregulator,itmaydecidetoimposepricecontrolmeasuresontheseservices.

• Free market pricing. Applicabletoallservicesotherthanuniversalpostalservices.Pricesaresetbythefreeplayofmarketforces.

Thesepostalservicepricingmechanismsandpracticesarethebasisfortheregulationofserviceoperatorsbythepostalregulator,accordingtothetypesofservicesrendered.Theprovisionsofcorrespondingregulationswillestablishinformationdisclosurerequirementsforoperators,aswellascorrespondingreportingprocedures,intervals,locationsandmedia.

Thepricingofuniversalpostalservicesandservicesfallingwithinthereservedserviceareashouldnotbeconfusedwithpriceprotectionforthereservedservicearea.

Priceprotectionisoneofthethreemainelementsdelineatingthereservedserviceareainsomecountries,alongwithclassofserviceanditemweight.Itestablishesafloorpricewhichprivateoperatorsarerequiredtochargefortheirserviceswhich,inmanycases,isexpressedasaspecificnumberoftimestheratechargedforagivenweightstepofaparticularreservedservice.Thus,thefloorpricefordomesticandinternationalmailserviceforaletterweighing20or50grammes,whichfallswithinthereservedservicearea,istypicallysetat3,5ormoretimestheapplicableratechargedbythedesignatedoperator.

Incaseswheretheregulatorisrequiredtointerveneinsettingpricesforreservedservicesoruniversalpostalservices,suchpricesmustbecommensuratewiththecostofcorrespondingserviceswhich,inturn,mustbeareflectionofthestringentapplicationofsoundeconomiccriteriaincorrespondingserviceoperatingprocessestoensurethateachsuchprocessisdesignedformaximumefficiencyandproductivity,whilemeetingapplicableuniversalserviceobligationsunderdomesticpostallegislationandregulations.

Itwillbeextremelyhardtocontinuetodefendunrealisticpricingpracticesforuniversalpostalservicesinthecurrentandfuturepostalenvironment,bothforpoliticalandsocialreasons.Itisuptothegovernmentandtheregulatoryauthoritytoestablisheconomicallyviablepricingschemestoensurethatgovernmentalobligationsdonotbecomeadrainonthenationaltreasury.

Theregulatormustensurecompliancewiththeserviceareareservedforthedesignatedoperator,whereapplicable,underlegalinstrumentsdesignedtoensureuniversalpostalservicefinancing.Anyencroachmentonthereservedserviceareabyotherpostaloperatorswillundermineuniversalservicefinancing,causingtheestablishedsystemtomalfunctionandunderminingitsefficiency.

245245

Accordingly,theregulatoryagencywillneedtoeffectivelyadministerthelicensingsystemforpostaloperatorsofferingnon-reservedpostalservices,whichmeanstakingharshmeasuresunderthepenaltyprovisionsofcorrespondinglegislationagainstanyserviceoperatorviolatingestablishedoperatingregulations.

Theregulatorwillneedtomonitoruniversalpostalservicedeliveryfromthestandpointofthreefactors:price,qualityandaccess.

Theresponsibilitiesoftheregulatoryagencyshouldincludemonitoringcompliancewithregulationsestablishingspecificationsforservicedeliveryconditionswithrespecttoaccessfacilitiesandstandardsofqualityforuniversalpostalservice.

Theregulatorwillneedtoworkwiththedesignatedoperatortosetannualtargetsforimprovingservicequalityintermsofdeliverytimeandreliabilitybasedontheestablisheduniversalpostalservicedevelopmentplan.

Tothisend,itisrecommendedthatthegovernmentandthedesignatedoperatordrawupaformalagreementembodyingtheservicedeliveryconditionsestablishedinlawsandregulationsgoverningtheoperationofuniversalpostalservices.

Thisagreementisawarrantyforbothparties.Ontheonehand,thegovernmentcanrestassuredthatminimumrequirementsfortheprovisionofuniversalpostalservicebythedesignatedoperatorareclearlyandspecificallydefinedand,thus,enforceable.Ontheotherhand,itguaranteesthedesignatedoperatorthatexistinggroundruleswillnotbechangedinmid-coursebypoliticallymotivateddecisions,therebyensuringitsfinancialstability.

Asfarasaccessfacilitiesforuniversalpostalserviceareconcerned,theregulatormustensurecompliancewithestablishedrequirementswithrespecttoserviceaccess,checkingtoensurethatcustomerfacilitiesprovidingaccesstothepostalservicenetworkmeetestablishedtargetsandspecificationsforthedesignatedoperator.

Inthepast,theconceptofaccesstouniversalservicesreferredspecificallytotheestablishmentofapostofficeineachcommunity,ignoringtheexistenceofmailboxes,mailcollectionpoints,postofficeboxesandothersuchfacilities.However,theglobaleconomicsituation,newbreakthroughsintechnologyandtheneedtomakemoreeffectiveuseofexistingresourceshaveredefinedthisconcept,withmanydesignatedoperatorsnowusingavarietyofdifferentmechanismstoprovidepublicaccesstouniversalpostalservice.

Theregulatoryagencywillneedtomakeastudyofuniversalpostalserviceneeds,brokendownintothefollowingtwophases:

I Postal market assessment and survey

Thisstudywillfamiliarizetheregulatoryauthoritywiththedeliveryofnationwideuniversalpostalserviceandgovernmentobligationswithrespecttodifferenttypesofserviceofferings,servicecoverage,accessfacilities,unmetneeds,standardsofqualitydemandedbyconsumers,etc.Itshouldalsoincludeanassessmentofthepostalmarket,projectionsoffuturemarkettrendsandtheconductofenvironmentalimpactassessmentsrequiredundercurrentlegislation.

Furthermore,anannualreportshouldbepreparedonthestateofthecountry'spostalsector.

II Analysis of the technical and economic soundness of the designated operator

BasedonthestudyconductedinphaseI,thegovernmentwillneedtoanalyzethetechnicalsoundnessandfinancialstabilityofthedesignatedoperator,examiningitsinternalstructure,resourcesandorganizationalculture,itsfinancial,operationalandtechnologicalrequirementsandthenecessarylevelofinvestmenttoenableittofulfilitsuniversalpostalservicemandate,meetingestablishedconditionsandobligationsunderexistinglegislationandregulations.

Anobjectiveassessmentofuniversalpostalserviceneedsandofthespecificcharacteristicsofthedesignatedoperatorisagoodbasisforeffectivedecision-makingonrequirementsforthedeliveryofuniversalpostalservicemeetingspecificstandardswithrespecttotheircost,qualityandprice.

Conditions and obligations of the designated operator

Ì Frequency Ì Continuity Ì Regularityand

security Ì Accessibility Ì Speedand

reliability Ì Fairness/

non-discriminatory

Ì Information Ì Claims Ì Reliability Ì Affordability Ì Connectivity Ì Network

coverage Ì Flexibility

Other public service obligations under special circumstances

Compliance with these conditions and obligations is monitored by the regulatory

agency

246246

Theoperationofanationwidepostalserviceisnotanisolatedendeavour.AccordingtotheprovisionsoftheUniversalPostalConvention,suchoperationsarepartofaninternationalnetworkunitingnationsaroundtheworldintoaso-called"singlepostalterritory".Thus,thepostalregulatormustensurethatcorrespondinginfrastructureandservicedeliveryconditionsmeetinternationalstandardsbindingonsignatoriesoftheUPUActsandspecificserviceagreements.

Theregulatormustalsoensurecompliancewithestablishedsecuritystandardsbindingonthedesignatedoperator.Securitystandardsforpostalservicesaredesignedtoprotectthephysicalintegrityofitemsentrustedtothecareofaparticularoperatorandpreventproblemsstemmingfromactsofterrorism,drugtraffickingandsimilarscourgesnotnecessarilyrelatedtoservicedeliveryperse.

Regulationsgoverningpostaloperatorsmustrequirestringentlycontrolledprocedureseliminatingor,atleast,minimizinganyrisksendangeringmailitems,postalworkers,customersandthegeneralpublic.Accordingly,theregulatormustguaranteethecontinuityofpostalservicetopreventthedesignatedoperator,forwhateverreason,fromeliminatinganyserviceswhichithasanobligationtothegovernmenttomakeavailabletothepublic.

Thisrequireseffectivesupervisiononthepartofthepostalregulatortoprotecttheintegrityofthepostalservice.

Relationsbetweensovereignnationsareconductedviatheirrespectivegovernments,inaccordancewithinternationallegislationandthecorrespondingpoliciesofeachcountry.

Thepostalsectorincludesvariousinternationalorganizations,someofwhichareinter-governmentalinnature.Themembersofintergovernmentalorganizationsaresovereignnations.Thus,internationalorganizationsrequiredelegatesattendingtheirmeetingstobedulyaccreditedbytheirrespectivegovernments.

InthespecificcaseoftheUniversalPostalUnion,onlydelegatestoUnionCongressesarerequiredtoholdplenipotentiarypowers.PostalregulatorsaswellasdesignatedoperatorsareactivelyinvolvedintheworkofstandingUnionbodiesandofthedifferentprojectteamsinchargeofperiodicorongoingUnionactivities.

Itisessentialthattypicaloperationalmatterscontinuetobehandledbythedesignatedoperator,giventhattheresolutionofthesetechnicalissuesispivotaltothecontinuityofinternationalpostalservice.

Thefollowingoutlineoftheresponsibilitiesofthepostalregulatorwithrespecttotheconductofinternational relationsisdrawnfromtheexperiencesofselectedcountrieswithafunctioningregulatoryagency.Alleffortsinthisrespectshouldbecoordinatedwiththedesignatedoperatorandthenationalgovernment.Thedutiesoftheregulatoryagencyintheareaofinternationalrelationsinclude:

• framinggeneralinternationalpostalpoliciesandstrategies;

• makingcertainthatnationalgovernmentbudgetsincludeappropriationsforcontributionduespayabletothepostalorganizationswithwhichthecountryisaffiliated,andmakingregularpaymentsofduesandhonouringallcorrespondingcommitmentstosuchorganizations;

• makingarrangementswithappropriategovernmentofficialstosecurenecessarypowersforattendingtheCongressesofpostalorganizations;

• establishingproperchannelsandmechanismsforensuringtheconsistencyofthepositionsofdelegatesattendinginternationalmeetings;

• establishingcontactswithintheministryofforeignaffairsfortheframingofactionstrategiesfortheattendanceofinternationalCongressesbycountrydelegationsandthesignatureofcorrespondingActs;

• makingcontactsindifferentgovernmentagenciesconductinginternationaleconomicnegotiationstopreventthepostalindustryfrombeinghurtbydecisionstakenatotherlevelsofthecentralgovernment,particularlywithregardtoissuesinvolvingtheWorldTradeOrganizationandtradeagreements,asnegotiationsoftenleadtoagreementsliabletoimpactdirectlyonpostalservice.Suchmattersmayfalldirectlywithinthesphereofcompetenceofthelegal,technicalandeconomicareasofthepostalregulatoryagency,whichwouldrequirepropercoordinationwiththeseinternalunits.

Alltheseissueswillneedtobeaddressedinapplicableregulations,bothfortransparencypurposesandforthedueandproperperformanceofcorrespondingregulatoryfunctions.

2.3.3

Functions designed to

ensure system integrity

2.3.4

Functions pertaining to

the conduct of international

relations

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Thefollowingisanon-exhaustivelistofspecificfunctionswhichcouldbeassignedtotheregulatoryagency.Theactualfunctionsofsuchanagencywilldependmainlyonitspowersandresponsibilitiesunderexistingpostallegislation.

• Makerecommendationstothegovernmentonuniversalpostalservicedevelopmentpolicy;

• Workwiththegovernmenttocoordinateinternationalpostalcommunicationspoliciestobefollowedindealingswithinternationalpostalorganizationsandwithagenciesandorganizationsinothercountries;

• Serveasthebodylegallyauthorizedtomakepreparationsforandconducttradetalksandnegotiationsliabletoaffectthepostalsector;

• Ensureservicedeliverybythedesignatedoperatorpursuanttotheprovisionsofapplicablelegislationandcorrespondingimplementingregulations;

• Establishthecostofuniversalpostalservicedeliverybythedesignatedoperator;

• Establishamarketpricingpolicy,setand,whereapplicable,controlthepricesofreservedservicesoperatedbythedesignatedoperator,andmonitorcompliancebyprivatepostaloperatorswiththereservedservicearea;

• Monitorpricesforotherpostalservices(underamonitoredfreemarketpricingsystem);

• Settledisputesbetweenpostalserviceoperatorsandtheircustomers;

• Settledisputesbetweenthedesignatedoperatorandotherpostaloperatorsoverinfringementsofthereservedservicearea,theadequacyorinadequacyofcustomerservicewarrantiesandaccesstothepublicpostalnetwork;

• Maintainaregisterofpostaloperatorscontainingrelevantdataonholdersofgeneralandspecialgovernmentlicencesandanycorrespondingmodifications;

• Issueappropriatelicencestoprivateoperatorsseekingtoofferpostalservicesopentocompetitionandcloselymonitorcompliancebytheseserviceoperatorswithapplicablerulesandregulations;

• Makedecisionsonpossibledamagetothedesignatedoperatorcausedbytheactionsofotheroperators;

• Conductinspectionsandinstituteproceedingsfortheimpositionofsanctionsforviolationsofpostallegislationandregulations.Regulatoryagencypersonnelconductinginspectionsofserviceoperatorsshallhaveofficialstandingforpurposesofsolicitinganynecessaryassistancefortheperformanceoftheirdutiesfromothergovernmentdepartmentsandagencies;

• Imposesanctionsforviolationsofpostallegislationandregulations;

• Assessthequalityofuniversalpostalservicesrenderedbythedesignatedoperator;

• Monitordiscussionsandlegaldecisionsinotherareasliabletoaffectthepostalsector.

Establishment of the regulatory agency

Preliminary studies for the enactment of the postal act and the creation of the regulatory agency

• Keepabreastofthestateofthepostalsectornationallyandinternationally.

• Establishthecausesofchangesinthenationalandinternationalpostalenvironment(legal,economic,social,technological,etc.).

• Anticipatefuturetrendsinthenationalandinternationalpostalsector.

• Predictfuturetrendsinspecificquantitativevariablesrelatingtothepostalindustryandpostalmarket.

• Establishstandardsofqualitylikelytobedeemedacceptablebypostalservicecustomers.

Form

• Canbeanindependentagencywithlegalstandingseparatefromthatofthecentralgovernmentoranagencywithitsownlegalstanding.

• Ineithercase,itmustbefunctionallyandlegallyindependentofthedesignatedoperatorandanyotheroperators.

Affiliation

• Cabinetministry.

• Independentgovernmentagencyspecificallyforthepostalsector.

• Sectoralindependentgovernmentagency.

• Multisectoralindependentgovernmentagency.

2.3.5

Summary of the general functions of

the regulatory agency

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Systemoffinancing

Regardlessofthelegalstatusoftheregulatorybody,itmust:

• Establishexpectedoperatingcosts.

• Establishexpectedinternalincomegeneratedfromtheperformanceofitsfunctions.

• Establishalternativefinancingmechanisms.

Objective:financialself-sufficiency

Potentialsourcesoffinancing

• Governmentcontributions. • Incomefromfeesforregulatoryservices. • Operatingincomeandrevenuesfromregulatoryactivities.

• Incomeandrevenuesfromholdingsinotherorganizations(inthecaseofanindependentlegalentity).

Main functions

• Makerecommendationstothegovernmentonpostalregulatorypolicy.

• Ensureuniversalpostalservicedeliveryunderconditionsestablishedinpostalregulationswithrespecttoserviceaccess,qualityandprice.

• Establishthecostofuniversalpostalservicedeliverybythedesignatedoperator.

• Ensurecompliancewiththeserviceareareservedforthedesignatedoperator.

• Monitoror,whereapplicable,setpricesforservicesrenderedbythedesignatedoperator.

• Workwiththegovernmenttocoordinatethecountry'sinternationalpostalpolicy.

• Settledisputesbetweenpostalserviceoperatorsandcustomers.

• Settledisputesbetweendifferentpostaloperators.

• Maintainaregisterofpostaloperators.

• Issueappropriatelicencestoprivateoperatorsseekingtoofferpostalservicesopentocompetition.

• Conductinspectionsandimposesanctions.

• Monitortheenactmentoflegislationliabletoaffectthepostalsector.

2.4

Organizational structure of

the regulatory agency

Asdiscussedearlier,theorganizationalstructureoftheregulatoryagencyisdependentonanumberofdifferentpolicyfactorsattheindividualcountrylevelandneedstobeestablishedinthebillpresentedtothelegislatureundertheprovisionsofthepostalact.Theauthoritytoorganizethepostalregulatorystructureisvestedinthegovernment,aspartofitsregulatoryfunctions.

Theregulatorystructureshouldbeorganizedaccordingtothenatureandspecialtechnicalcharacteristicsofitsvariousfunctions,whichwillrequiretheestablishmentofspecializedfunctionalunitsbasedonavailableresources.Thefollowingparagraphsoutlinepossibleareasoftheregulatoryagencyanddescribesomeoftheirduties:

• Legal area: Thisunitcouldbeinchargeofdevelopingregulatoryproposals,conductinglegalstudiesandrenderinglegalopinions.Itcouldalsoberesponsibleforprocessingcustomerclaimsandcomplaints,settlingdisputesbetweendifferentpostaloperatorsandresolvingotherlegalissues,aswellasforhandlingallegedviolationsofpostallegislationandregulations.Anotherimportantfunctionofthisunitistoregularlymonitorlegislationinothersectorsofactivityliabletoaffectpostalservice.

Main duties:

› Draftsproposedlegislationandregulationsaccordingtoguidelinesestablishedbythepostaloversightauthority(draftlegislation,decrees,ministerialorders,rulingsandsimilarinstruments);

› Conductsadministrativeproceedingsforthesanctioningofcompaniesallegedlyviolatingpostallegislationandregulations;

› Settlesanypostal-relatedclaimsfiledbypostaloperatorsorusers/customers;

› Rendersrequestedlegalopinionsonpostalmatters;

› Examinesandmakerecommendationsonconsumer,user/customerandservice-relatedlegislationandregulationsliabletodirectlyorindirectlyimpactthepostalsector.

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• Economicandfinancialarea:Thisunithandlesmatterspertainingtouniversalpostalservicecosts,postalratesandincomefromserviceoperation.Itwouldalsobeinchargeofcostplanningandincomemanagementfortheregulatoryagency.

Main duties:

› Calculatesfeespayablebypostalserviceprovidersfortheoperationofpostalservices;

› Administerstheuniversalpostalservicecompensationfund,whereapplicable;

› Studiesandreportsonthepricesofreservedservicesanduniversalpostalservices;

› Studiesandreportsonuniversalpostalservicecostsandthecostaccountingsystemusedbythedesignatedoperator;

› Handlesallmatterspertainingtotheincomeandexpendituresoftheregulatoryagency(budgetestimatesandimplementation);

› Studiesandreportsonanyothereconomicandfinancialmatterspertainingtothepostalsector.

• Technical area:Thisunitisinchargeofpostaldevelopmentplansandprogrammes,servicequalitymeasurementsandtechnicalstudiesofpostalserviceoperations.Itisessentialthatthisunitbestaffedwithexpertsinpostalaffairs,sincethesmoothoperationofestablishedregulatorymechanismshingesonthetechnicalstudiesconductedandcriteriaestablishedbythisunit.

Main duties:

› Monitorsthequalityofpostalserviceingeneraland,morespecifically,oftheuniversalpostalservicesentrustedtothedesignatedoperator;

› Conductspostalmarketresearch; › Developsprogrammesforexpanding,improvingandcontinuouslymodernizingthepostalnetworkmaintainedbythedesignatedoperator;

› Studiesconditionsinthepostalenvironmentandthemarketsharesofpostaloperators;

› Maintainsaregisterofpostalenterprises.

• Inspection area: Thisunitmakesinspectionsofpostalserviceoperatorstomonitorcompliancewithpostallegislationandregulations.Inspectionpersonnelmusthavespecialnationwidepowersandsufficientauthorityenablingthemtocarryouttheirassignedduties.Thisissuewillneedtobeclearlyaddressedinpostallegislation.

Main duties:

› Conductsinspectionsandauditsofpostalenterprisesoperatingonthepostalmarket;

› Inspectsandmonitorsuniversalpostalservicedeliverybythedesignatedoperator;

› Makesinspectionsofallpostalmarketoperatorsandmonitorstheircompliancewithpostallegislationandregulations.

• Register of service operators: Thisareaisresponsibleforsystematicallyoverseeingtheoperationofthelicensingsystemandforregularlyupdatingcorrespondingdatatoenabletheotherareastomonitorcompliancewithservicedeliveryconditions.

Theregisterofpostaloperatorscouldbemaintainedaspartofthedutiesofthetechnicalarea.

Main duties:

› Arrangesforthelicensingofprivatepostaloperators;

› Regularlyupdatestheregisterofpostalenterprises;

› Issuescertificateswithrespecttothestatusofpostaloperatorsrecordedintheregisterofpostalenterprises;

› Studies,analyzesanddrawsconclusionswithrespecttothedatageneratedbytheregisterofpostalenterprises(increaseinthenumberofpostaloperators,growthinthenumberofoperatorsincertainnichemarkets,etc.)

• International area: Foreignpolicyandinternationalrelations.Theworkofthisunitisvitalindealingswithinternationalorganizations.Theconductofmattersofstateshouldnotbeconfusedwiththespecificallytechnicalmatterstobehandledbytheuniversalpostalserviceoperator.Thus,itisvitalforthisunittoestablishgoodchannelsofcommunicationwiththedesignatedoperatortoregularlyworktogetheronmattersinvolvingrelationswithinternationalorganizations.Thisareacouldalsobeinchargeofdomesticrelationswithothergovernmentagenciesorprivateorganizations.

The main duties ofthisunitwithrespecttotheconductofinternationalrelationswereoutlinedearlierinthismoduleinsection2.3.4.

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Theworkoftheregulatoryagencycanberoundedoutbystudiesoutsourcedtofirmsspecializinginpostalaffairs.Marketresearchbyoutsideexpertsandmeasurementsofservicequalityareespeciallyimportant.

Proposed areas of the regulatory agency

Legal

Economic

Technical

Inspection

Register

International

• Regulation • Legalopinions • Conductofadministrativeproceedings • Analysisofthedomesticandinternationalregulatoryframework

• Costofuniversalservice • Regulatorincome/costs • Postalserviceprices • Procedures

• Marketresearch • Qualityofservicemeasurements

• Monitoringandinspection

• Maintenanceofpostaloperatorregister

• Internationalrelations

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Thepassageofpostallegislationestablishingabasicpolicyframeworkforthepostalsectorshouldaffordlegalsecurityfortheregulatorysystemgoverningthedeliveryofthepostalservice.Bysettingbasicgroundrulesforthepostalsector,postallegislationprovideslegalsecurityforallmarketparticipants.

Enforcementofpostallegislationrequirestheframingofregulationsimplementingitsprovisionsandarticulatingestablishedmandatesinmoredetailandmorepracticalterms.Postalregulationsneedtospelloutspecificservicedeliveryconditionsandrequirements,theobligationsofserviceoperatorsandcorrespondingcustomerguarantees.

Thedutiesofthenationalregulatoryauthorityshouldbecarriedoutaccordingtotheprovisionsofthepostallegislationanditsimplementingregulations.Thislatterregulatoryinstrumentshouldbeaversatiletool,whichcanberegularlyupdatedtoembodyandreflectchangesengenderedbynewtrendsinpostalservice.

Regulationsforthepostalindustryshouldgovernallservicesdefinedbythegovernmentaspostalinnature,regulatingthroughvariousmeans,viatheregulatoryauthority,theoperationofreservedservices,ifapplicable,aswellasservicesopentocompetition,distinguishingbetweenbasicuniversalservicesandotherpostalservices.

Thepostalserviceregulationsshoulddefinetheservicesandcorrespondingactivitiesfallingunderitsprovisionstoclearlydistinguishpostalservicesfromothertypesofeconomicactivitieswhich,insomecases,mayshareorpooltheirdomesticinfrastructureandoperatingfacilitiesortechnology.Ataminimum,theseregulationsshoulddefineandgovernthefollowingtypesofservicesandactivities:

• Thecollection,acceptance,sorting,processing,forwarding,transportation,distributionanddeliveryofpostalitems,withtheguaranteesandconditionsestablishedthereunder;

• Anyandallothersimilaractivitiesengagedinunderinternationalagreementsbindingonthatcountryexpresslydefinedbythegovernmentaspostalinnature.

Apostalitemisanyitemwhosephysicalandtechnicalspecificationsallowforittobetransmittedviathepostalnetworkaccordingtotheclassificationsystemestablishedunderthepostalserviceregulations.

Definition of postal services and classes of serviceThepostalserviceregulationsmustdefineeachandeveryphaseofpostalservice,includingthecollection,acceptance,sorting,processing,transportation,distributionanddeliveryofpostalitems.

Themainclassesofnationalpostalserviceandthetypesofservicesincludedundertheconceptofuniversalpostalserviceshouldbeestablishedinthepostallegislation.Allotherservicesotherthanso-called"basic"servicesrecognizedbylawasconstitutingpostalservicesshouldbedefinedunderthepostalserviceregulations,includingspecialpostalservices,expressmailorspecializedcourierservices,value-addedpostalservices,postalfinancialservices,andelectronicpostalservices(e-services).

3.1.3

Customer and consumer rights and obligations

Thepostalserviceregulationsissuedunderthepostallegislationmustclearlydefinetheconceptof"postalservicecustomerandconsumer"andestablishcustomerandconsumerguaranteesandrightswithrespecttopostalservices.

Itisimportanttohighlighttheconceptofthepostalcustomer.Inthepast,andinvariouscountries,postalservicecustomershavebeencalled"postalusers".Theterm"user"comesfromancienttimes,whenthepostalservicewasownedbythestate,thatis,bythegovernment,which,initsbenevolence,wouldallowcitizenstousethepostalnetwork.Inshort,therightsof"users"werelimitedtosimplybeinga"user"ofthenetwork.

Regulatory instruments

3

3.1

Postal service regulations

3.1.1

Regulation of the postal industry

3.1.2

Services to be governed by postal

regulations

252252

Theconceptofpostalcustomerimpliesabusinessrelationshipinwhichthecustomercontractstheservicesofthedesignatedorotheroperator,andthusacquiresrights.

However,theaddresseeismissingasaparticipantinthepostalprocess.Theaddresseedoesnotcontracttheserviceandisthereforenotapostalcustomer.Andalthoughtheaddresseeusesthepostalnetwork,heorshedoessopassively.Theconceptof"postalservicesconsumer"resolvesthisissueinthat,whiletheaddresseehasnotcontractedtheservice,heorsheconsumestheservice,andthereforehasrights.

Customer and consumer rights • Postaloperatorsmustfullyguaranteetheconfidentialityandinviolabilityofpostalcommunications;compliancewiththeobligationsofthenon-disclosureofpersonalinformation;thesatisfactionofoperationalpostalnetworksecurityrequirementsestablishedunderpostalregulationswithrespecttothetransportingofhazardoussubstancesandthepreventionofdrugtrafficking,actsofterrorism,moneylaundering,andothersuchscourges;andcompliancewithenvironmentalprotectionpolicy.

• Postaloperatorsengagedinthedeliveryofpostalservicemustguaranteecertainbasicprinciplessuchas:

a. postalsecrecyandtheinviolabilityofpostalcommunications;

b. protectionofthedignityandpersonalandfamilyprivacyoftheircustomersandthefullexerciseoftheirrights;

c. theneutralityandconfidentialityofthepostalservice;

d. protectionofthepersonalinformationofallthoseinvolvedinthepostalprocess;

e. equaltreatmentforpostalservicecustomersundercomparableconditions;

f. protectionagainstanyandallformsofdiscriminationonthebasisofpoliticalbeliefs,religion,ideology,ethnicity,sexualorientation,orothergrounds.

Inaddition,postaloperatorswillguaranteethefollowingcustomer or consumer rightswithrespecttothedeliveryofpostalservices:

a. protectionagainstanyhealthandsafetyrisks;

b. thedisclosureofrelevantpostalservice–relatedinformation,particularlywithrespecttogeneralservicedeliveryconditions,serviceaccess,qualityassurances,postalratesandthehandlingofclaims,tofacilitatetheeffectiveuseofpostalservices;

c. compensationfornon-compliancewithservicedeliveryconditionsestablishedunderpostalregulations;

d. postalcommunicationsservice,inkeepingwiththeobligationsofthedesignatedoperator;

e. goodservicequalityandavailability,bothfortheuniversalpostalserviceandforallotherservices.

Customer obligationsPostalservicecustomersmustcomplywithprovisionsrelatingtobansonthemailingofprohibiteditemsunderapplicableregulations.Customersareresponsibleforthepackagingofmailitems,theaccuracyoftheinformationprovidedregardingitemcontents,andthepaymentofapplicablecharges,taxesorduties.

Obligations and responsibilities of postal operatorTheprotectionofcustomerrightsimposescertainobligationsandresponsibilitiesonpostaloperators,inkeepingwiththefollowingprinciples:

a. Confidentialityofpostalitems(secrecyofmail).Thisprincipleunconditionallybanspostaloperatorsandtheiremployeesfromdisclosinganyinformationwhatsoeverwithrespecttotheexistenceofapostalitem,itscontents,thetypeofiteminvolved,theattendantcircumstanceswithrespecttosuchitem,orthenameoraddressofthesenderoraddressee,exceptattheirspecificrequestorattherequestoftheirlegalrepresentativesorattorneysorincompliancewithacourtorder.

b. Inviolability of postal items.Postalitemsareinviolable,orguaranteedagainsttampering.Examplesoftamperingincludethearbitraryorunlawfuldetention,deliberatemisrouting,opening,theft,destruction,wrongfulwithholdingorconcealmentofmailitemsand,ingeneral,anybreachoftrustaffectingtheirsafekeeping.Theinviolabilityoflettermail(correspondence)isarightgenerallyprotectedundernationalconstitutionalprovisions.Postalitemsarenotconsideredtohavebeentamperedwithwhenopenedunderacourtorderandinaccordancewiththecountry'slegislation.

c. Ownership of postal items. Untilsuchtimeastheyaredeliveredtotheaddressee,mailitemsremainthepropertyofthesender.Undeliverableitemsalsoremainthepropertyofthesender,whomayrecoverthemormakechangesintheiraddressinformationagainstthepaymentofcorrespondingchargesorfees,solongasnecessarytracingeffortsdonotinterferewithnormalpostalserviceoperations.

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Thedeliveryoftheuniversalpostalserviceissubjecttocompliancewithlegallyestablishedconditionsandwithanyconditionsspelledoutbythegovernmentintheuniversalpostalservicedevelopmentplan.Clearly,thegovernmentmustapproveandbackthisdevelopmentplaninorderforthedesignatedoperatortofulfilitsfunction.

ThedesignatedoperatorhasalreadybeendiscussedatlengthinmoduleIVoftheguide.

Thedeliveryofuniversalpostalserviceissubjecttotheprovisionsofthepostallegislationandthenegotiatedtermsandconditionsoftheserviceagreemententeredintowiththedesignatedoperator.Thisagreementshouldcontainguidancefortheexpansionanddevelopmentofuniversalpostalservice.

Thesignatureofaformalserviceagreement,orplan,bythegovernmentandthedesignatedoperatorisnotsomethingwhichisdonesystematically.However,acleardefinitionoftheuniversalpostalserviceobligationsofbothpartiescanpreventmisunderstandings,whichcouldbedetrimentaltoboththedesignatedoperatorandtoservicedeliveryperse.

Aserviceagreementcan:

• clearlydefinetheobligationsofthegovernmentandthedesignatedoperator;

• ensurethesustainabilityofthepostalorganizationandthesatisfactionofitsinvestmentneeds;

• ensurethecontinuityofuniversalpostalservice;

• requirepaymentofuniversalpostalservicecosts;

• establishpricingandpricecontrolprovisions; • determinethedensityofthepostalnetworkandcontrolservicequality;

• meetcustomerandpublicneeds; • spelloutcorrespondingresponsibilities.

3.3

Operation of the reserved service area

Thesubjectoftheexclusiverightsofthedesignatedoperatortooperatecertainuniversalpostalservicesreferredtoas"reservedservices","thereservedservicearea"or"thereservedmarketsegment"isdiscussedindetailinmoduleII.However,theroleoftheregulatorinprotectingandmonitoringcompliancewiththisreservedarea,whichisvitalforthefinancingofuniversalpostalservice,isimportantandrelevanttothediscussionpresentedinthismodule.

Inadditiontoareservedservicearea,somecountrieshaveotheruniversalpostalservicefinancingmechanismssuchasauniversalpostalservicecompensationfund,grantsofspecialorexclusiverightsand,incertaincases,governmentfunding.

Regulatory framework for postal service

Universal postal service plan

Endorsementoftheplanbythegovernment anddesignatedoperator

POSTAL LEGISLATION

National regulatory authority

POSTAL SERVICESAcceptance,sorting,transportation

anddeliveryofpostalitems

Customer rights

Operator obligations

UNIVERSAL POSTAL SERVICE

Postal services

REGISTER OF POSTAL ENTERPRISES FEES AND COMPENSATION FUND

SERVICE DELIVERY PLAN

POSTAL ITEMSArticlesproperlyidentified

withtheaddressee'snameanddeliveryaddressforconveyance

bytheserviceprovider

Postal service regulations

Other regulations

Designated operator

Private postal operators

• Confidentialityofpostalitems • Inviolabilityofpostalitems • Ownershipofpostalitems • Neutralityandconfidentiality • Equaltreatment

Designatedoperatorobligations

(Servicedeliveryconditions)

Governmentobligationstothedesignatedoperator

3.2

Universal postal service plans and programmes and

formalization of agreements with

the designated operator

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Accordingtotheexperiencesofcountrieswithwell-developedpostalmarketsandindustries,themosteffectivemechanismisthatofareservedservicearea.Theeliminationofthereservedareaimpliesthelossofthemainsourceoffundingoftheuniversalservice,meaningthatalternativesourcesoffinancingwillneedtobefound.Thegovernmentfundingoptionisbecomingincreasinglyimpractical.However,thefinaldecisiononthismatterhingesonthesituationineachcountryandwillneedtobeclearlyspelledoutinthenationalpostallegislation.

Asexplainedearlierinthismodule,themostimportantpointisthatthegovernmenttakeresponsibilityforensuringtheoperationoftheuniversalpostalservice,whichrequirestransparentdecisionmakingtoprotectservicedeliveryand,thus,guaranteecorrespondingfinancing.

The government needs to compensate the designated operator for the economic cost of providing universal postal service through:

• the exclusive operation of reserved services

• the granting of special or exclusive rights

• the creation of a compensation fund for the universal service

• direct government funding under national budget appropriations established in the legislation

Governmentassurancesofhighquality,affordableuniversalpostalservicespelledoutintheprovisionsofthepostallegislationrequiretheestablishmentofapricingsystemfordifferenttypesofservices.Thepublicserviceorientationofuniversalpostalserviceoperationsrequiressomecontrolovercorrespondingrate-settingmechanismsbytheregulatoryauthority.

Theinvolvementofthepostalregulatorinthepricingofuniversalpostalserviceswasalreadydiscussedinthesectionofchapter2ofthismoduledealingwiththefunctionsoftheregulatoryauthority.Thissectionofthemodulesimplytouchesontheissueofthetypeofpricingsystemtobeestablishedundertheprovisionsofpostalregulations.

Interventionbythenationalregulatoryauthorityispivotalanddecisiveinthepricingofthe reserved services providedbythedesignatedoperator,whichmeansinstitutingasystemfortheapprovalofthesepricesbythepostalregulator,inkeepingwiththerestrictionofrightsentailedbytheestablishmentofanysortofmonopoly.

Moreover,thegovernmentmayalsointerveneinthesettingofpricecapsonnon-reserved universal servicesprovidedbythedesignatedoperator,viatheregulatoryauthority.

Accordingly,therecommendedconfigurationofthepricingsystemforpostalservicesisasfollows:

• Prices for reserved services: Pricecontrolsystem,withtheregulatorchargedwithensuringaffordableprices,seeingtotheimplementationofcost-cuttingmeasuresandexactingimprovementsintheefficiencyandproductivityofthedesignatedoperatorinthedeliveryofreservedservices.

• Prices for non-reserved universal postal services:

› Monitoredfreemarketprices,withtheregulatorauthorizedtointerveneonthemarketandtosetfloorandceilingprices.

› Thismonitoredfreemarketpricingsystemshouldnotbeconfusedwiththepriceprotectionforthereservedserviceareadiscussedearlierinthismodule.

› Thispricingsystemappliestouniversalpostalservicesnotincludedinthereservedservicearea.Theregulatormaydecidetoimposepricecontrolsonanysuchmonitoredserviceswherewarrantedbymarketconditions.

› Innoinstancemaysuchpricesbesetbelowtheestablishedfloorvaluedesignedtoprotectthereservedservicearea.

• Prices for all other postal services: Thepricesofallotherservicesmaybesetbythefreeplayofmarketforces,subjecttocompliancewithregulationswithrespecttothereservedserviceareaifapplicable.Accordingly,suchpricesmustbeginatorabovetheestablishedfloorpricedesignedtoprotectthereservedservicearea.

Reserved servicesFull price control by government.

Price approval by the national regulatory authority.

All other postal servicesFree market pricing.

Disclosure requirements. Option of instituting price controls.

Non-reserved universal servicesMonitored free market pricing

of services open to competition. Monitoring and disclosure

requirements. Option of instituting price control controls.

Extent of intervention by the regulatory authority in setting prices

3.4

Pricing system

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Ilestindispensablequelesdroitsspéciauxouexclusifsoctroyésàl’opérateurdésignécouvrentledroitàundédouanementprioritairepourtoutenvoientrantdanslecadredesesobligationsdeserviceuniversel.

Thepurposeofestablishingthistypeofprivilegehasnothingtodowiththeserviceoperatorperse,butrather,withitspublicserviceorientation,thepublicinterestand,ultimately,thegoodofthebusinessesandindividualsusingitsservices.

Thus,mailitemsfallingwithinthescopeoftheuniversalpostalservicesrenderedbythedesignatedoperatoraregivenpriorityoverotheritemsforcustomsclearancepurposes.Whetherornotthisprivilegeisembodiedincustomsregulations,itisimportantthatthisspecial,exclusiverightenjoyedonlybythedesignatedoperatorbeexpresslyrecognizedinthepostallegislationpassedbythegovernment.

Accordingly,asthegovernmentrepresentativeforpostalaffairs,theregulatoryagencywillneedtotakealeadershiproleinworkingwiththecustomsauthoritiestoensurethatallnecessarymeasuresaretakentoexpeditecustomsformalitiesformailitemsincludedintheconceptofuniversalpostalserviceandmonitorcompliancewithregulationsgoverningtheoperationofthereservedservicearea.

Inmanycountries,expeditiouscustomsclearanceisnotalwayspossible,owingtotheenormousvolumeofinboundandoutboundinternationalmailtrafficwithinthereservedservicearea.

Theissueofthelicensingofpostalserviceoperatorsisespeciallyimportantinthefaceoftheneedtoproperlyoverseethedeliveryofpostalservicesbyprivateoperatorsaspartofeffortstoeffectivelyorganizethepostalsectorandensurethesmoothoperationofclearmarketrules.

Whatsuchlicencesarecalledwillvaryfromcountrytocountryaccordingtothelegislationofeachandtheirscope.Theymaybecalledlicences,permits,concessions,andsoon.

Asdiscussedearlierinthischapter,therearecertainbasicruleswithrespecttocitizens'rightsingeneralandconsumerrightsinparticularwhoseenforcementneedstobemonitoredbythepostalregulatortopreventtheabuseorexploitationofpostalservicecustomers.

TheUniversalPostalUnionhasbeenconductingstudiesdirectlyrelatedtotheissueoflicensing,whichhaveproducedextremelyinterestinginformationonlicensingpracticesaroundtheworld.

Suchstudiesshowanumberofdevelopingcountriesusingsomesortoflicensingsystem,thoughthenamesgiventosuchsystemsandthetypesofproceduresusedmaydifferfromcountrytocountry.

Thefollowinggeneralconclusionscanbedrawnwithrespecttothisissue:

• Theestablishmentofacountrywidelicensingsystemistieddirectlytotheexistenceofaregulatoryagencyortomarketregulatorymanagementefforts.

• Wherelicensingsystemsdoexist,correspondingregulationsareanintegralpartoftheregulatoryframeworkforthepostalsector.

• Therearemanydifferentadministrativeproceduresfortheregistrationofserviceoperators.

• Inmanycountries,licensingauthorityisvestedintheregulatoryagency.

• Regulationswithrespecttotheobligationsofdifferentserviceoperatorsarefairlysimilar.

Itisrecommendedthatpostalserviceoperatorsbelicensedaccordingtothetypeofservicestoberendered,withpostalservicesotherthanuniversalservicesrequiringageneralgovernmentlicenceandnon-reserveduniversalservicesrequiringaspecialgovernmentlicence.

This,inturn,willrequiretheestablishmentofaregisterofpostalserviceenterprisestobemaintainedbytheregulatoryauthority.

Forreasonsoftransparency,thisregistermustbeaccessibletothepublicandgovernedbyapplicableregulations.Itshouldcontainpertinentdataonholdersofgeneralandspecialgovernmentlicencesandinformationonanyrelevantmodifications.Withoutexception,theoperationofallcorrespondingpostalserviceswouldbecontingentontherecordingoftheserviceoperatorinquestionintheregisterofpostaloperators,subjecttothesatisfactionofapplicablelicensingrequirements.

3.5

Customs clearance

policy

3.6

Licences

3.6.1

Need for service

operating licences

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Licensingrequirementsfordomesticpostalserviceoperatorswillneedtobeclearlyspelledoutincorrespondingregulations.Suchrequirementsshouldbedesignedtoprovidenecessaryassurancesfortheprotectionoftheuniversalpostalserviceandofpostalcustomersandtheirrights.

Suggestedrequirementstobemetbyprospectiveserviceoperatorsinclude:

• proofoftheireconomicsoundness; • proofoftheirabilitytofulfiltheirobligations; • appropriatequalificationsandpracticalexperiencewiththeoperationofpostalservices;

• certificationoftheiragreementtoabidebybasicpostalcommunicationprinciplesassetforthinthetermsandconditionsofthelicensingagreement;

• certificationoftheiragreementtofullyrespecttheserviceareareservedforthedesignatedoperator;

• thefurnishingofperformanceandback-upguaranteesforclaimsandcompensation.

Obviously,theserequirementswillneedtobefurtherexaminedinthelightoftheexistinglegalsystemineachcountry.

Thefollowingisanoutlineofpracticalguidelinesforthedevelopmentofregulationsforahypotheticallicensingsystemgoverningtheissuanceofso-called"general licences"forservicesotherthantheuniversalpostalserviceand"special licences"fornon-reserveduniversalpostalservices.

Licences for postal services other than the universal postal service

Scope and conditions • A general licenceshouldberequiredfortheoperationofallpostalservicesnotincludedintheuniversalpostalservice.

• Theissuingofthesegenerallicencesshouldbedulyregulated,withapplicantsobligedtomeetcertainbasicrequirementsfortheoperationofpostalservices,aswellasotherrequirementsestablishedunderapplicableregulations.

• Basicrequirementsfortheoperationofpostalservicesincludecompliancewiththeprincipleoftheinviolabilityoflettermail;compliancewithnon-disclosurerequirementsandpostalnetworksecurityrequirementsunderpostallegislationandregulationswithrespecttothetransportingofhazardoussubstancesandthepreventionofdrugtrafficking,actsofterrorism,moneylaunderingandotherscourges;andcompliancewithenvironmentalprotectionpolicy.

• Non-disclosurerequirementsincludeanobligationtoprotecttheconfidentialityofpersonalcommunications,anyandalltransmittedorstoreddata,personalinformation,andcustomerprivacyrights.

• Partiesseekingtooperatepostalservicesotherthanuniversalpostalservicesmustadvisetheregulatoryauthorityoftheirinterest,expresslyagreeingtoabidebytheprovisionsofpostallegislationandfurnishingallnecessaryinformationtoclearlydelineatethescopeofcorrespondingserviceofferings.

• Allrelevantdataongenerallicenceholdersistoberecordedinthegeneralregisterofpostalserviceenterprises.

• Prospectiveserviceprovidersmaynotcommencebusinessuntilthecorrespondinglicencehasbeenofficiallyissuedandorderedrecordedintheregisterbytheprescribeddeadlineunderpostalregulations.

• Theexistenceofageneraloperatinglicenceisestablishedbythelicencecertificateandcorrespondingentryintheregisterofserviceproviders.

Licences for universal postal services

Scope and conditions • Aspeciallicenceshouldberequiredfortheoperationofanynon-reserved universalpostalservices.

• Theissuingofspeciallicencesshouldbedulyregulatedandsubjecttothepresentationbyapplicantsofproofofcompliancewithrequirementsfortheoperationofpostalservicesandoftheirsatisfactionofallconditionsestablishedunderpostallegislationandanyotherconditionswhichmaybeestablishedinthepublicinterest.

• Applicantsmustalsoagreetomeetthefollowingobligations:

› Mandatorypublicserviceobligationsunderpostallegislation;

› Voluntaryuniversalpostalserviceobligations,tobespelledoutinserviceofferingstocustomers;

› Anobligationnottoinfringeonanyspecialorexclusiverightsorontheserviceareareservedforthedesignatedoperatorinthecourseoftheirownserviceoperations.

3.6.2

Licensing requirements

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• Partiesinterestedinoperatinganyuniversalpostalservicesnotreservedforthedesignatedoperatormustsubmitanapplicationtothepostalregulatoryauthority,accompaniedbyallrequireddocumentation.Aspartoftheapplication,theymustagree,inwriting,tomeetallconditionsestablishedunderexistingpostallegislation.

Lastbutnotleast,thismoduleaddressestheissueoftheroleoftheregulatoryagencyinimplementingnecessaryinstrumentsandproceduresfortheratificationoftheUniversalPostalConventionandotherUPUActssignedbythatcountrythroughitsplenipotentiarydelegatetotheUniversalPostalCongress.

AccordingtosectionI,chapterI,article1oftheConstitutionoftheUniversalPostalUnion,together,themembercountriesoftheUPUrepresent"asinglepostalterritoryforthereciprocalexchangeofletter-postitems"inwhichtheyareguaranteed"freedomoftransit."

Moreover,UPUmembercountrieshaveagreedtoensurethatdesignatedoperatorsofferprescribedservicesandthatsuchservicesmeetprescribedstandardsofquality.

TheUPUisgovernedbyitsConstitution,whichisitsorganicact,byGeneralRegulationscontainingprovisionsforimplementingtheConstitutionandensuringitssmoothoperation,andbytheUniversalPostalConvention,whichcontainsgeneralrulesgoverningpostalservices.CompliancewiththeprovisionsoftheseActsoftheUnionismandatoryforallmembercountries.

AsmembersoftheUPU,countrieshavecertainrightsandresponsibilitieswithrespecttothemanagementofpostalservices.TheratificationoftheUPUActsreferstotheprocedurethroughwhichmembercountriesincorporatemandatoryprovisionsofsuchActsintotheirowndomesticlegislation.

Underthecurrentlegalsystemsinmostnations,uponratification,theobligationsincurredbymembercountriesundertheprovisionsoftheUPUActsbecomebindingpursuanttoapplicableconstitutionalprovisionswithrespecttothesignatureofinternationaltreaties.

SomecountriesencounterproblemsinendeavouringtoratifytheActsoftheUnionowingtocomplicationsarisinginconnectionwiththelegislativeprocess.Insuchcases,thepostalregulatorwillneedtoestablishappropriatemechanismstoensurethatthisobligationcanbemetwithintheprescribedtimeframe.

Incidentally,theUPUActswhicharenotratifiedbyaparticularmembercountryarestillbindingonthatcountrybyvirtueofinternationallegislationpertainingtotreaties.

Licences for the operation of postal services

National regulatory authority

General licence for the provision of postal services not included in the

universal postal service area

Special licences for the provision of postal services included in the universal postal service area, in

non-reserved services

3.7

Ratification of the Universal

Postal Convention

and other UPU Acts

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Administrative procedureInspection functions and sanctioning authorityTheresponsibilitiesoftheregulatoryauthorityincludetheinspectionofpostalservicesgovernedbythepostalactandtheimpositionofapplicablesanctions.

Postalinspectionpersonnelattachedtotheregulatoryagencymusthaverecognizedofficialstandingfortheexerciseoftheirauthorityandforsolicitingnecessaryassistancefromgovernmentsecurityforcesandlawenforcementagenciesthroughappropriategovernmentchannels.

Ownersormanagersofserviceoperationsoractivitiesfallingunderthescopeofthepostalactaretoberequiredtogiveinspectionpersonnelonofficialbusinessaccesstotheirpremises,toanyfacilitiesandequipmentusedinthecourseoftheirserviceoperationsoractivitiesandtoanydocumentswhichtheyarerequiredtomaintainbylaw.

LiabilityThefollowingpartieswillbeheldaccountableforviolationsofpostallegislationandregulationsunderadministrativelaw:

a. Violationscommittedinthecourseofserviceoperationunderacorrespondinglicenceagreement:theindividualorcorporateowner.

b. Violationscommittedinthecourseofserviceoperationwithoutacorrespondinglicencewhensuchlicenceisrequiredbylaw:theindividualorlegalentityengagingintheactivityinquestionand,asanaccessory,thepartyusingthefacilitiesorequipmentorinpossessionofcorrespondingpostalitems.

c. Inallothercases:theindividualsorlegalentitiescommittingthespecificactsconstitutingviolationsofpostalregulations.

d. Thetrademarkholderwillbeheldjointlyandseverallyresponsibleforviolationscommittedinthecourseoftheoperationofpostalservicesusingaspecifictrademarkifdiscoveredtohaveactedinconcertwiththecorrespondingoffender.

Classification of violationsIlconvientdequalifierlesinfractionsàlaréglementationdesservicespostauxdemajeures,gravesoumineures,selonleurnature.Lesinfractionsmajeurescomprennentnotamment:

a. violationsofuniversalpostalservicedeliveryconditionsseverelyunderminingsuchservice;

b. theunauthorizedoperationofpostalservicesreservedforthedesignatedoperator,underminingtheuniversalpostalservicefinancingsystem;

c. theunlicencedoperationofpostalservicesopentocompetitionortheoperationofservicesotherthanthosepermittedunderthecorrespondinglicence,tothedetrimentoftheuniversalpostalservice;

d. thenon-paymentofpecuniaryliabilitiesfundingthepostalservicelicensingsystembudgetunderconditionsseriouslyinterferingwiththesatisfactionofbasicrequirementsunderthecorrespondingpostalactorunderminingthedeliveryofuniversalpostalservice;

e. violationsofspecialorexclusiverightsgrantedtothedesignatedoperator;

f. theacceptanceofletter-mailitemsfallingwithinthescopeofthereservedserviceareaandtheirsubsequentdeliverytoindividualsorlegalentitiesotherthanthedesignatedoperator,wheresuchoperationsareliabletounderminethedeliveryoftheuniversalpostalservice;

g. refusingtosubmittoinspectionsandobstructingorresistinggovernmentinspectionactivities;

Administrative and criminal sanctions under postal regulations "Model"

ANNEX

1

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h. theuseofidentificationmarksbyotherserviceoperatorslikelytobeconfusedwiththosemarkswhoseuseisreservedforthedesignatedoperator.Thisincludestheuseoflabels,advertisements,symbols,datestampsorimprintsliabletobeconfusedwiththoseusedbythedesignatedoperator;

i. conductdesignedtoperpetratepostagefraudschemes;

j. thecommissionoftwoormoreseriousviolationswithinaone-yearperiod.

Examplesofseriousviolationsinclude:

a. theviolationsreferredtoinsubsections a)toj)above,intheabsenceofattendantcircumstanceswarrantingtheirclassificationasmajorviolations;

b. themerepublicofferingofanyreservedpostalservices;

c. thecommissionoftwoormoreminoroffenceswithinaone-yearperiod.

Examplesofminorviolationsinclude:

a. refusingtosupplyorconveyinformationwhosedisclosureorsubmissionisrequiredunderpostalserviceregulationsattherequestofthenationalregulatoryauthority,bytheprescribeddeadline;

b. non-compliancebytheserviceoperatorwithrulesgoverningthetreatmentofconsumersandcustomersunderconsumerprotectionregulations;

c. anyandallotherviolationsofobligationsimposedonserviceoperatorsorcustomersundercurrentpostallegislationandregulationsdesignedtoensurethedueandproperdeliveryofpostalservices.

SanctionsIngeneral,theaforesaidviolationsarepunishablebyfinesinvaryingamounts,dependingontheirclassificationasmajor,seriousorminorviolations.

Theamountoftheprescribedfineforaparticularviolationmaybeincremental,withinaspecifiedrangeofvalues,andsetaccordingtoguidelinesestablishedunderthepenaltyprovisionsofdomesticlegislation,inkeepingwiththespecialcharacteristicsoftheactivityinquestionanditssocialoreconomicramifications.Finesimposedforanyoftheabovementionedmajorviolationsinvolvingactivitiesrequiringagovernment-issuedlicencemaybeaccompaniedbyaccessorypenaltiessuchasthesealingoffofcorrespondingpremises,theseizureofvehiclesorequipment,ortheshuttingdownofthefacilitiesinquestionpendingtheacquisitionofaproperoperatinglicence.

Thecircumstancessurroundingthecommissionofamajorviolationmaywarrantrevocationoftheoffender'sserviceoperatinglicence.

Thecountry'spostalactmustgrantgovernmenttheappropriateauthoritytoissueexecutiveordersadjustingthevalueofestablishedfinesaccordingtofluctuationsintheconsumerpriceindex.

Inadditiontoprescribedfinesforcertainmajorviolations,thecorrespondingoffendermaybebarredfromoperatinganypostalservicesforaspecifiedperiodoftime,effectiveasofthedateoftheimpositionofsuchsanctions.

Preventive measuresTheabovementionedviolationsmaygiverisetotheimplementationofpreventivemeasures.Theappropriateadministrativeagencyfordecidingcasesofallegedviolationsofpostallegislationandregulationsmaytakeanyinterimmeasuresconsiderednecessarytoensuretheenforceabilityofitsensuingdecision,preventsuchviolationsfromcontinuingandprotectthepublicwelfare,atanytime,basedontheissuanceofareasoneddecisiontosucheffect.

Theagencyinstitutingthecorrespondingproceedingsortheinvestigatingauthoritymaytakenecessarypreventivemeasuresinemergencysituationsinwhichtheirimplementationcannotbepostponed.

Examplesofinterimmeasuresincludetheretentionofpostalitemsforpurposesoftheirinspection,thetemporaryshutdownoffacilitiesusedintheconductofcorrespondingactivitiesortheimpoundingofcorrespondingequipment.Incaseswherethepartychargedwiththeviolationisanunlicencedserviceoperator,preventivemeasuresshuttingdownandimpoundingcorrespondingfacilitiesandequipmentwillremainineffectuntiltheproceedingsareconcluded.Inanyevent,anyandallsuchinterimmeasuresshouldbecommensuratewiththeobjectivesoftheirimplementation.

Compensation for damagesTheimpositionofadministrativesanctionsunderacountry'spostallegislationiswithoutprejudicetotherightofthedesignatedoperatortoseekcompensationforcorrespondingdamages.

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Proceedings for the imposition of sanctions – Governing principlesProceedingsfortheimpositionofadministrativesanctionsshouldbegovernedbydomesticlegislationandgeneralrulesofadministrativeprocedure,aswellasbythefollowingprinciples.

Procedural due process

1. Exerciseofthegovernment'ssanctioningauthorityissubjecttotheconductofalegalorotherprescribedproceeding.

2. Proceduresgoverningtheimpositionofadministrativesanctionsshouldbreakdowncorrespondingproceedingsintoaninvestigatoryandapenaltyphase,eachofwhichistobeconductedbyadifferentagency.

3. Nosanctionsmaybeimposedwithouttheconductofanappropriateproceeding.

Rights of alleged offenders

Allallegedoffendershavethefollowingrightsunderproceedingsfortheimpositionofadministrativesanctions:

1. Therighttobeinformedoftheactsofwhichtheyarebeingaccused,theviolationsallegedlyengenderedbytheiractionsandapplicablesanctions,theidentityoftheinvestigatingauthorityandcompetentsanctioningauthorityandthelegalprovisionestablishingsuchauthority;

2. Therighttosubmitpleadingsandtouseanyandallappropriatelegitimatemeanstodefendthemselvesundercurrentlegislation;

3. Allotherrightsrecognizedbyapplicablelegislation.

Preventive measures

Theappropriateauthoritymaytakepreventivemeasurestoensuretheenforceabilityofitsfinalrulingbasedonareasoneddecisiontosucheffect.

Presumption of innocence

1. Proceedingsfortheimpositionofadministrativesanctionsaretopresumeanabsenceofanyliabilityunderadministrativelawuntilprovenotherwise.

2. Thenationalregulatoryauthorityisboundbyprovenfactsembodiedinfinalcriminalcourtdecisionsinsubstantiatingadministrativeproceedingsfortheimpositionofsanctions.

3. Factsestablishedbypostalinspectionpersonnelwithrecognizedofficialstandingrecordedinanotarizedinstrumentmeetingapplicablelegalrequirementshaveprobativevalue,withoutprejudicetoanyevidenceproducedorfurnishedbyallegedoffendersindefenseoftheircorrespondingrightsorinterests.

4. Thenationalregulatoryauthoritywillproduceoradmitsufficientevidencetoestablishthefactsandanypotentialliability,atitsowninitiativeoronamotionbytheallegedoffender.Theonlyevidencewhichmaybedeclaredinadmissibleisthatwhoserelationshiptothefactsunderinvestigationissuchthatitcanhavenobearingonthefinaldecisionrenderedwithrespecttotheallegedoffender.

Décision

1. Thedecisionconcludingtheproceedingmustbewellfoundedandmustresolveallpendingissues.

2. Thedecisionmaynotadmitanyfactsotherthanthoseestablishedinthecourseoftheproceeding,regardlessofotherjudicialfindings.

3. Thedecisionwillbecomefinalupontheexhaustionofallcorrespondingadministrativeremedies.Wherenecessary,specificpreventivemeasuresmaybetakentoensureitsenforceabilityuntilsuchtimeasitbecomesfinal.

4. Undernocircumstancesmayadministrativesanctionsofapecuniaryorothernatureincludetheimpositionofaprisonsentence,eitherdirectlyorasanaccessorypenalty.

5. Thevalueofapplicablefinesmustbesethighenoughtoensurethatitisnotmorecost-effectivetocommittheviolationsinquestionthantocomplywithcorrespondingprovisionsofpostallegislationandregulations.

Incremental sanctions

Legislationgoverningthesanctionssystemanddecisionshandeddownbythecompetentsanctioningauthoritymustensurethatanyandallsanctionsimposedarecommensuratewiththeseriousnessoftheviolationcommittedbytheoffender,bearinginmindthefollowingincrementalsanctionguidelines,amongotherfactors:

a. theexistenceofintentorofapatternofbehaviour;

b. thenatureoftheinjuryorinjuriescaused;

c. recidivism,orthecommissionofmorethanoneviolationofthesamenaturewithinaone-yearperiodaccordingtofinaldecisionshandeddownbytheappropriateauthority.

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Double jeopardy

Thesameactsorfactsalreadysubjecttocriminaloradministrativesanctionsmaynotbepunishedtwice,wheretheallegedoffender,thefactsandthemeritsofthecasesinquestionareidentical.

Statute of limitationsThestatuteoflimitationsforbringingactionforallegedviolationsandfortheimpositionofcorrespondingsanctionswillbeestablishedunderthepostalact.Asaguideline,theinstitutionofadministrativeproceedingscouldbestatute-barredafterthreeyearsinthecaseofmajorviolations,aftertwoyearsinthecaseofseriousviolationsandaftersixmonthsinthecaseofminorviolations.Likewise,theimpositionofsanctionscouldbestatute-barredafterthreeyearsformajorviolations,aftertwoyearsforseriousviolationsandafteroneyearforminorviolations.

Thestatuteoflimitationsforbringingactionbeginstorunasofthedateofthecommissionoftheviolationandistolledbytheinstitutionofcorrespondingproceedingsandtheissueofasummons,resumingintheeventofthesuspensionofsuchproceedingsforaperiodofoveronemonthforreasonsnotattributabletotheallegedoffender.

Thestatuteoflimitationsfortheimpositionofsanctionsbeginstorunasofthedayfollowingthedateonwhichthedecisionimposingthesanctionbecomesfinalandistolledbytheinstitutionoftheenforcementproceeding,resumingintheeventofthesuspensionofsuchproceedingforaperiodofoveronemonthforreasonsnotattributabletotheoffender.

Incasesofcontinuingoffences,thestatuteoflimitationsbeginstorunasofthedateoftheterminationofthecourseofconductorofthelastactoftheoffence.

Sanctioning authorityTheauthoritytoimposesanctionswillbevestedinagenciesattachedtothenationalregulatoryauthorityaccordingtothenatureoftheviolationinquestion.

Decisionsbysuchagenciesareappealabletothecompetentauthorityinsuchmatters.

CRIMINAL PROCEDURETheprocedurefortheprosecutionofcriminaloffencesshouldbeestablishedinapplicablecriminalstatutes.Alternatively,thepostalactshouldestablishcorrespondingfeloniesandmisdemeanours.

Withoutexception,allsuchoffencesaretobetriedandpunishedbycompetentcriminalcourts,withoutprejudicetothefilingofacomplaintbythenationalregulatoryauthorityorauthorizedpersonnel.

Feloniesandmisdemeanoursshouldbedefinedandclassifiedinapplicablelegislation,whichshouldalsoestablishcorrespondingcriminalsanctions.

Definition of postal offencesPostaloffencesareacts,actionsoromissionscharacterizedassuchbylaw.Examplesofpostaloffencesinclude:

Ì Mailtampering;

Ì Violationofprofessionalpostalsecrecyrequirements;

Ì Release,forprofitorotherwise,ofthepersonalinformationofpostalservicecustomersorconsumers;

Ì Unlawfuloperationofmailservice;

Ì Conveyanceofprohibiteditems;

Ì Counterfeitingofpostagestampsorpostagepaymentimprints;

Ì Useofcounterfeitstampsorpostagepaymentimprints;

Ì Unlawfuluseofpostagestampsandpostagepaymentimprints;

Ì Removalofcancellationstampsormarks

Ì Abuseofpowerorauthoritybypostalemployees.

*Penalitiesmayvaryaccordingtothecountry.Thetimeframementionedshouldbetakenonlyasanexample.

Mail tampering

Anyonetamperingwithlettermailorotherpostalitemsispunishablebyimprisonmentforatermoffromsix(6)monthstotwo(2)yearsandpaymentofafine.Thesesamepenaltiesapplytoanyonewhowrongfullydiscards,retains,appropriates,concealsordestroyslettermailorpostalitemsbelongingtoothers.

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Violation of professional postal secrecy requirements

Anypostalemployeedisclosinginformationordatawithrespecttopostalservicecustomersispunishablebyimprisonmentforatermoffromsix(6)monthstotwo(2)yearsandpaymentofafine.

Operation of unlicenced postal services

Anyoneengaginginanytypeofpostalserviceoperationswithoutproperauthorizationfromthenationalregulatoryauthorityispunishablebyimprisonmentforatermoffromsix(6)monthstothree(3)yearsandpaymentofafine.

Inthecaseofcorporations,thelegalrepresentativewillbeheldaccountableforitsactions.

Violation of the reserved service area or of special or exclusive rights held by the designated operator

Anyoneviolatingthereservedserviceareaoranyspecialorexclusiverightsheldbythedesignatedoperatorispunishablebyimprisonmentforatermoffromone(1)tofive(5)yearsandpaymentofafine.Inthecaseofcorporations,thelegalrepresentativewillbeheldaccountableforsuchviolations.

Conveyance of prohibited items

Anyoneseeking,arrangingfororpermittingtheconveyanceofitemsbannedunderpostallegislationispunishablebyimprisonmentforatermoffromsix(6)monthstotwo(2)yearsand/orpaymentofanapplicablefine.

Counterfeiting of postage stamps or postage payment imprints

Anyonecounterfeiting,manufacturingortamperingwithpostagestampsorpostagepaymentimprintsispunishablebyimprisonmentforatermoffromtwo(2)monthstotwo(2)yearsand/orpaymentofanapplicablefine.

Use of counterfeit postage stamps or postage payment imprints

Anyonepurchasing,selling,supplying,usingorrecyclingcounterfeitpostagestampsorpostagepaymentimprintsispunishablebyimprisonmentforatermoffromtwo(2)monthstotwo(2)yearsand/orpaymentofanapplicablefine.

Unlawful use of postage stamps and postage payment imprints

Anyoneunlawfullyusingpostagestampsorpostagemetersforpersonalgainorforthebenefitofanotherpartyispunishablebyimprisonmentforatermoffromtwo(2)monthstotwo(2)yearsand/orpaymentofanapplicablefine.

Removal of cancellation stamps or marks

Anyoneremovingcancellationstampsormarksfrombonafidepostagestampsorpostagepaymentimprintsforfalsificationpurposesorforpurposesoftheirreuseispunishablebyimprisonmentforatermoffromtwo(2)monthstotwo(2)yearsand/orpaymentofanapplicablefine.

Abuse of power or authority by postal employees

Anyonewho,throughdeceit,concealmentoranyotherfraudulentmeans,unjustlyenricheshimselforcausesharmtoanyclassofmailserviceinthecourseoftheperformanceofhisorherworkispunishablebyimprisonmentforatermoffromsix(6)monthstothree(3)yearsand/orpaymentofanapplicablefine.

Withoutexception,alldefendantsaretobetreatedinaccordancewithestablishedlegalprinciplesandareentitledtoallguaranteesaffordedunderthedomesticcriminaljusticesystem.

Module VIFinancing the Postal Reform

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ThissixthandfinalmoduleoftheGuidetoPostalReformandDevelopmentisatoolthatroundsouttheprocessshapedinthefivepreviousmodules.Thisstepisessentialtothereformprocess,asmanycountrieswillrequireexternalsupport.

SincethisguideisbasedonapublicationpreparedintheLatinAmericanregion,moredetailedinformationisprovidedonfinancingagenciesspecifictothatarea.However,thenewmaterialinthismodulewillhelpalldesignatedoperatorstoobtainup-to-dateinformationonthemostactivefinancingagenciesintheirrespectiveregions.

Asexplainedinpreviousmodules,across-the-boardreformofthepostalsectorandthedesignatedoperatorisinmostcasesthebestwaytoensureuniversalpostalserviceinagivencountry.However,governmentsgenerallydonothavetheresourcestomountsuchaneffortandmustmakeuseofdifferentfinancingfacilities.Theterm"financingfacilities"isusedinthepluraltounderscoretheneedformultiplesourcesoffinancingfromallpartiesinvolvedinthereform:thegovernment,publicorprivatebackers,andthepostaloperatorresponsibleforprovidingtheuniversalpostalservice(althoughthelatterparty,whereinfinancialdifficulty,maybefullyorpartiallyexemptedfromcontributingsuchfunds).

Inadditiontofinancingmulti-yearinvestmentprogrammes,governmentswillneedtolookforwaystofreeupfundinginamountscommensuratewiththeirpoliticalwilltoeffectivelyimplementenvisagedpostalreformprojects.

Inmanycountriesaroundtheworld,therehasbeenverylittle,ifany,investmentinthepostalsectorinrecentdecades,whichhasdrivendesignatedoperatorsintoweakenedstatesatoneofthemostcriticaltimesintheirhistory,withmarketliberalization,mountingcompetitionanddecliningmailvolumesdirectlyaffectingtheireconomicperformanceandmarketshare.Againstthisbackdrop,itisessentialtodeviseinnovativestrategiesthatenabledesignatedoperatorstoprovidequalityservicesanddiversifytheirproductportfoliosaspartofacontinuingefforttoensurethesustainabilityoftheuniversalpostalservice.

Thus,thepublicauthoritiesofeachcountryandthetopmanagementofeachdesignatedoperatormusttakeaccountoftheneedtofinancethemuch-neededpostalreformandfamiliarizethemselveswiththevariousmechanismsformakingthatreformpossible.

Thefirstpartofthismodulediscussesthenecessarypreconditionsforpresentingareformprocessandprovidesimportantinformationtohelpfacilitateaccesstolendingagencies.Thesecondpartprovidesinformationonthedevelopmentofstrategiesforobtainingfundsfrommultilateralorganizationstobringpostalreformtofruition.Thethirdpartdiscussesthegeneralprojectcyclesofinternationalfinancingagencies,andtheannexessetoutthekeyinformationthatshouldbeprovidedwhenpitchingprojectstointernationalbackers.

Introduction

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Thepostalsectorisespeciallyimportanttothenationaleconomy.Asaneconomicactivitywithapublicserviceorientation,ithelpstodrivetheeconomyandstrengthenthecountry'scompetitiveness.Italsohelpspromotesocialintegrationatboththeindividualandthecommunitylevel.Adynamicandefficientpostalsectorhelpstostrengtheneconomic,socialandculturaltiesbetweenacountry'scitizens.

Themainchallengefacinggovernmentsaroundtheworldistospureconomicgrowthasameansofcreatingwealth,augmentingreservesandboostinginvestmentwhilereducingpoverty.

Investmentinmoderninfrastructureplaysapivotalroleinpromotingnationaleconomicgrowthanddevelopmentduringthetransitiontoamarketeconomy.Italsohelpstoensuretheuniversalityofpublicservices.

Investmentinthedevelopmentofthepostalsectorearmarkedspecificallyforinfrastructurerehabilitationandtheconstructionofnewinfrastructuremakessenseonlyifithasapositiveimpactoncountrywideeconomicandsocialfactors,particularlyintermsof:

• improvingincomeandproductivitylevels; • creatingjobs; • facilitatingaccesstoinformation; • improvingqualityoflife; • reducingpoverty; • promotingsocialintegration.

1.1.2

Development of the postal

sector

Postalreformmustmeettheneedsofsociety.Thestrategiesdevisedbycorrespondingofficialsmustberesponsivetotheneedsofstakeholders,includingbothusers/customersandoperators,andinkeepingwithtechnologicaldevelopments.

Economicglobalizationisoftranscendentalimportance.Theopennessoftoday'sglobaleconomyiscreatingnewopportunitiesforthepostalsector.However,takingadvantageofthesewillrequiredeep-seatedimprovementstoinfrastructure,legislation,managementpracticesandoperatingprocedures.

Grounds for financing investments in the postal sector

1

1.1

Need for development of the postal

sector

1.1.1

Public service orientation

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Inmanycountries,fordecadesthepostalsectorhasnotbeenconsideredimportantintheintegrationofnationaldevelopmentplans.Instead,governmentshavefocusedonthosesectorswhichintheirviewwillaccelerateGDPgrowthandcreatemorejobs.Asaresult,developmentplanshaveprimarilytargetedexport-orientedindustries(agriculture,fishing,livestock,rawmaterialsandcommoditiesingeneral)andinfrastructuresectors(power,water,transportation,ports,telecommunications,etc.),whichhavebenefitedfromgreaterinvestment.Thepostalsector–which,whileanimportantpartofacountry'sinfrastructurenetwork,isgenerallynotagoodsourceofforeignexchangeforthenationaleconomyandisconsideredbymanytobeobsoleteandanachronistic–hasnotbeenapriorityforgovernments.

Thus,itisvitaltochangepublicauthorities'perceptionsofboththepostalsectorandthedesignatedoperatorastheuniversalpostalserviceprovider,andtopersuadegovernmentstoincludethepostalsectorintheirnationaldevelopmentplansasacomponentofinfrastructureandsupport.Thiswillfacilitateaccesstointernationalfinancingthroughinfrastructureinvestment.

Toestablishacomprehensiveoverviewofpostalreform,inlinewithadecisionoftheBucharestCongress(2004),in2005theInternationalBureaulaunchedanewapproachtopostalreform,involvingallstakeholdersfromtheverystart(thegovernmentbodyresponsibleforsettingpublicpolicyonpostalmatters,theregulator,designatedoperators,tradeunions,privateoperatorsandsoon).

Integratedpostalreformanddevelopmentplans(IPDPs)weredesignedtoprovidecountrieswithageneralstrategyforpostalsectorreformwhensettingobjectivesandimplementingactivitiesforshort-,medium-andlong-termdevelopment.

Theyareformulatedbymultidisciplinarynationalteamsmadeupofrepresentativesofthesupervisoryministryforpostalservices,thepostalregulator(ifany),thedesignatedoperatorandotherministerialdepartmentspotentiallyinvolvedinthedevelopmentofsuchplans(e.g.ministryoffinance),undertheconstantdirectionofUPUexpertsinthefield.

TheIPDPapproachisfullycompatiblewiththeUnitedNationsprogrammingprocessbasedonCommonCountryAssessmentsandtheUnitedNationsDevelopmentAssistanceFrameworkinthesensethatitcanhelptoobtainexternalfinancing–oneofthemajorconcernsandchallengesfacingcountries.

1.2.3

Business plan of the designated

operator

Thedesignatedoperator'spublicservicemandateandthefactthatitissubjecttogovernmentsupervisioninnowaydiminishtheimportanceofitsmeetingestablishedstandardsofprofitabilityandefficiency.

Thetransformationofthepostalmarketsetsadualchallengeforthedesignatedoperator:reconcilingthetraditionaldutiesthatsocietyexpectsofapostalservice(i.e.thoseinthepublicinterest)withpostalactivitiesthataresubjecttomarketeconomyconditions.Whenapplyingforfundingforthepurposeofsectoralreformand,morespecifically,developmentofthedesignatedoperator,thelattermusthaveabusinessplan.

Acrediblebusinessplanisaprerequisiteforobtainingfunding.Anypotentiallenderwillwanttoknowthattheborrowerhasaplantoinvesttheloanwisely,andmostimportantlythattheplanwilldeliversufficientextrarevenuetopayfortheinvestment.WithintheIPDPframework,anumberofdevelopingandleastdevelopedcountrieshaveputtogetherbusinessplansfortheirdesignatedoperators.Businessplansshouldfocusonthemostimportantbusinessactivities,including:

• personnel; • operations; • productsandservices; • marketing; • competition; • financialplanning.

1.2

National political will

– inclusion of the postal

sector in national

development plans

1.2.2

Integrated postal

reform and development

plans

1.2.1

National development

plans

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Giventhecurrentstatusoftheirpostalsectors,alldevelopingandleastdevelopedcountriesaredependentonexternalassistancefortheplanningandimplementationofthereformprocess(UPU,restrictedunions,technicalcooperation,etc.)andtheacquisitionoffunding(financialinstitutions).

Inaninternationalcontextcharacterizedbyrisingcommodityprices,naturaldisasters,armedconflictanddevastatingdiseasessuchasAIDS,malariaandtuberculosis,andgiventheeconomicsituationfacingmostindustrializedcountries,theresourcessetasideforinternationalcooperationarebecomingincreasinglyscarceandareeitherringfencedforemergencyaidorfocusedonareasotherthanthepostalsector.

Itisimportantthatinterventionsinthepostalsectortakeintoaccountthissituationandproposereformplansthateffectivelyaddressthemajordifficultiesfacinganumberofcountries.

In2000,189countriesundertooktoachieveeightgoalsby2015,theso-calledMillenniumDevelopmentGoals(MDGs).Sincethen,manyinternationalorganizationshavefocusedtheirfinancingprioritiesonMDG-relatedactions.AsaspecializedUNagency,theUPUistaskedwithassistingitsmembercountriesintheireffortstoachievetheMDGs.Inmanycountries,thepostalnetworkhasbeencontributingtotheachievementoftheMDGsforanumberofyears,whileinothersithasthepotentialtodoso.

InSeptember2015,morethan150headsofstateandgovernmentmetattheSustainableDevelopmentSummit,wheretheyadoptedtheAgendaforSustainableDevelopment.ThisAgendacontains17universallyapplicableobjectiveswhich,from1January2016,governcountries'effortstoachieveasustainableworldby2030.

TheSustainableDevelopmentGoals(SDGs)arethesuccessorsoftheMDGsandseektobuildonthesuccessofthelatterandaddressthosegoalsthatwerenotattained.

Theoverarchingaimofthesenewgoalsistoencourageallcountries–whetherrich,poorormiddle-income–toadoptmeasuresthatpromoteprosperitywhileprotectingtheplanet.Theystartfromthepremisethatinitiativestoendpovertymustgohandinhandwithstrategiesthatfavoureconomicgrowthandaddressarangeofsocialneeds,includingeducation,health,socialprotectionandemploymentopportunities,whilecombatingclimatechangeandpromotingenvironmentalprotection.

EachsectionbelowsetsoutstrategiesandproductsthatcanbeusedbyUPUmembercountriestoshowhowdevelopingthepostalnetworkcanhelptoachievetheSDGsand,consequently,tosecurefundingforthesector'sdevelopment.

Thepostalsectorhastocompetewithmanyothersectorstoobtainfunding.Sinceallthedevelopingcountriescommittedtoachievingthe17SDGs,theirinvestmentanddevelopmentstrategiesare–andwillcontinuetobe–gearedtohonouringthatcommitment.Whendecidinginwhichpriorityareastoinvesttheirresources,governments,cooperationagenciesanddevelopmentbankswillselectthoseprojectsthatgivethebestreturnontheirinvestmentandarelinkedtotheSDGs,sothepostalsectormustdemonstratethatitisdynamicandthatreformandinvestmentwillhaveanimpactontheeconomyandbenefitsocietyatlarge.

WhencountriespresentIPDPsandrelatedprojects,itisrecommendedthattheytakeaccountoftheirdevelopmentneedsasawhole.Theyshouldestablishthatthedevelopmentofthepostalsectorisclearlylinkedtothatofothersectorsandcanhaveapositiveimpactonthenationaleconomy.Moreover,sinceinternationalcooperationagenciesandthegovernmentsofindustrializedanddevelopingcountrieswillcontinuetoprioritizeSDG-relatedactions,itisessentialthatthepostaldevelopmentplanspresentedbelinkedtotheachievementofoneormoreoftheSDGs.

1.3

The postal sector in the

context of international cooperation

1.3.1

United Nations development strategy: the world postal

network at the service of the UN

Development Goals

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BelowisadescriptionofhowpostaldevelopmentcanbelinkedtoeachoftheSDGs:

Postalservicescancontributetoachievingthisobjective.Oneexampleisthelackofaccesstobasicfinancialservicesbythepoor.Extremelydisadvantagedsegmentsofthepopulationdonothaveaccesstocreditandareunabletoinvesttheirsavings.Thisproblemismoreacuteinruralareas.Inmanycountries,Postshavethedensestnetworkofanyorganization.Thepovertycyclecouldbebrokenbyprovidingaccesstobasicfinancialservicesandmicrocredit.

TheBrazilianPosthasbeenparticipatingforyearsinthegovernment's"Bolsafamília"programme,throughwhichfamiliesreceivefinancialaidprovidedtheykeeptheirchildreninschoolandfollowthevaccinationschedule.OtherPosts,suchasthoseinEgyptorTunisia,participateinsimilarprogrammes.

TheUPUisworkinginassociationwiththeInternationalFundforAgriculturalDevelopment(IFAD)insixWestAfricancountriesonaprojecttowidentheUPUelectronicpaymentnetworktomorethan300ruralpostoffices.Ruralcommunities,whichmanymigrantsleavebehind,willthenhaveaccesstoanaffordableandhigh-qualitymoneytransferservice.

Anefficientpostalnetworkfacilitatesthetimelytransferofconsumergoods,includingfooditems.

InAfrica,thechildmortalityrate(numberofchildrenwhodiebeforereachingtheageoffive)in2010wasover160deathsper1,000livebirths,comparedwith 20deathsper1,000livebirthsinEurope(www.who.int).Almost25%ofsuchdeathsoccurduringlabour.Themaincausesofinfantmortalityarepneumonia(19%),diarrhoea(17%),prematurebirth(10%),neonatalinfections(10%),malaria(8%)andlackofoxygenduringlabour(8%).Ingeneral,considerableprogresswasmadetowardsachievingtheMillenniumDevelopmentGoal.Between1990and2015,theunder-fivemortalityratedecreasedfrom91to43per1,000livebirths.However,thisfellshortofthetargettoreduceinfantmortalitybytwothirdsoverthatperiod.

Again,Postscanplayakeyroleintheefforttoreducethechildmortalityrate.Foryears,theBrazilianPosthasbeenworkingintandemwiththeBraziliangovernmentbydisseminatinginformationonthebenefitsofbreastfeeding,showingthatbreastfedinfantsarelesssusceptibletodiarrhoea.Diarrhoeaisdirectlylinkedwithaccesstocleanwater,andPostscanplayaroleinthewatersupplychainbydevelopingbill-paymentsystems.Moreover,theycandisseminateinformationontheproperuseofwater.Postscanalsohelptocombatdiseasessuchasmalariabybecominglocalagentsforthedistributionofmosquitonetsandanti-mosquitospray.Since2017,theUruguayanPosthasbeensupportinggovernmentlednationalresearchintopreventablecongenitaldiseasesbymakingthemaillogisticsnetworkavailabletothehealthsystem.Thisfacilitatesthesendingofbloodsamplesfromnewbornstoauthorizedhealthcentresinordertogetanearlydiagnosisofthistypeofdiseaseandbeabletotreatthemintime.

TheBrazilianPostdisseminatesinformationtomothersonthebenefitsofbreastfeeding.Thescopeoftheinformationprovidedcouldbeextendedtoaddresstheneedforwomentobeassistedbyamidwifeandtheimportanceofpre-andpost-partumhygiene.Postofficescouldagainactasinformationpointsandidentifypregnantwomenintheirrespectiveareasofinfluence.

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ThePostcanplaydifferentrolesinachievingthisgoal,oneaimofwhichistoreducethenumberofpeoplewithoutsustainableaccesstocleandrinkingwaterandbasicsanitationservices.Inmanycases,accesstosafedrinkingwaterandelectricityislinkedtotheabilitytomakeandreceivepaymentsrapidlyviareliablenetworks,aswellastotheestablishmentofanaddressingsystemthatcanallowapayeetobelocated.Designatedoperatorscanbetrustedpartnersinboththeseregards.Althoughtheinhabitantsofdisadvantagedneighbourhoodsfacefinancialdifficulties,theyallneedtohaveaccesstosafedrinkingwater.Postalservicescanplayanimportantroleinprovidingthemwithaddresses,therebybringingthemintocontactwithsociety.

Alinkcanbeestablishedbetweenachievingqualityeducationandthedevelopmentofthepostalsector:socialinclusion.Oneofthefactorswhichcontributestosocialexclusionisthelackofaddresses.Withoutanaddress,themostdisadvantagedsegmentsofthepopulationcannothaveaccesstobasichealthandeducationservices.Postscanhelpwiththedevelopmentofaddressingsystemsanddatabases.AswasexplainedunderSDGNo.1,incertaincountries,parentsreceiveagovernmentallowanceiftheirchildrenattendschool.Inmanycountries,thePostactsasapaymentagencyandamonitoringunittoensurethatfamiliesreceivingtheallowancecontinuetosendtheirchildrentoschool.TheTunisianPostparticipatesinagovernmentbursaryschemetosupportstudentsinfinancialhardship,whileinVenezuela,thePostparticipatesin"DefensoresdelosNiños",aprogrammeaimedatprotectingchildrenfromabuse,andatensuringthatallchildrenofschoolagehaveaccesstoeducation.InUruguay,thePostparticipatesin"PlanCeibal",whichinvolvesdistributinglaptopstoeachstudent.

Thegoalofpromotinggenderequalityhasaspectsincommonwiththepreviousobjective,asoneofitsspecificaimsistoeliminategenderinequalityinprimaryandsecondaryeducation.Ashasbeenseen,variouscountrieshavelaunchedprogrammesunderwhichtheprovisionofassistanceisconditionaluponchildrenattendingschool.Akeyfactorinachievingthisgoalisraisingawarenessamongparentsthateducatinggirlsisasimportantaseducatingboys.Postofficescanoperateasservicepointsandhelptodrivehomethismessage.

Comparedwithotherindustries,thepostalsectoremploysasignificantproportionofwomen.Ithasbeencalculatedthat,currently,over30%oftheworld'spostalemployeesarewomen.In2015,thisfigureexceeded50%inplacessuchasAlbania,Botswana,BruneiDarussalam,Bulgaria,China,CzechRepublic,ElSalvador,Estonia,HongKong,Hungary,Latvia,Lithuania,Panama,Poland,Romania,Slovakia,UruguayandtheUnitedStates.Moreover,36%ofthesector'smanagerialpositionsareheldbywomen.ManyPostshavedevelopedpoliciestofacilitatetheincorporationofwomenintothelabourmarket,forexample,introducingflexiblehours,theabilitytoworkfromhome(postofficeathome),specializedtrainingprogrammesanddaycarecentres.

Since2009,theSouthAfricanPost–almosthalfofwhose17,000employeesarewomen–haspartneredwiththemajorwomen'srightsorganizationPeopleOpposingWomenAbuse(POWA)andparticipatedintheannualcampaign16DaysofActivismforNoViolenceAgainstWomenandChildren.Ithascalledonallpostalservicestoleadbyexampleandimplementzero-tolerancepoliciesagainstallformsofviolenceagainstwomen,whetherintheworkplaceorinthecommunity.

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Energyiscentraltoalmostallthegreatchallengesandopportunitiesfacingtheworldtoday.Whetherforemployment,security,climatechange,foodproductionortoincreaseincome,universalaccesstoenergyisessential.

Sustainableenergyisanopportunitytotransformlives,theeconomyandtheplanet.Postalservicescanbeaneffectivetoolforthetimelydeliveryofinvoicesforenergyconsumptiontoinhabitants,facilitatingtheirpaymentandhelpingtoachieveenergysustainability.

Thepostalserviceisalabour-intensiveone,makingitoneofthelargestemployersineachcountry.Assuch,offeringemployeesappropriateworkingconditionshelpsmaintainanefficientpostalservice,andcontributestotheeconomicdevelopmentofthecountry.

Postsareacomponentofnationalinfrastructure,withtheirpostofficenetworksandvehiclefleets.Anefficientandself-sustainingpostalservicestrengthensnationalainfrastructure.

Thepostalservicecaneffectivelyreduceinequalitiesbyenablingcommunicationwithallpartsofacountryandmakingproductsavailableinbothurbanandruralenvironments.

ThePostprovidesabasicpublicservicewhichiskeytofosteringsustainablecitiesandcommunities.Postoffices,inadditiontoservingasbusinesscentres,mustalsobecomeservicecentresforcommunities,participatinginpublicpolicy.

Postsactasfacilitatorsbetweenproducersandconsumers.Whenoperatingefficiently,theycanhelptoensureresponsibleconsumptionbyenablingpromptcommunicationbetweenbothparties.

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WorkingwiththeUnitedNationsEnvironmentProgramme,theUPUpreparedthefirsttwoglobalinventoriesofgreenhousegasesforthepostalsector.Theyshowedthatpostaloperatorsemittheequivalentofatleast54milliontonnesofcarboneachyear,whichrepresents0.7%oftotalannualgreenhousegasemissions.

Postalservicescanplayonlyamarginalroleinachievingthisgoal,byfacilitatingcommunication.

WorkingwiththeUnitedNationsEnvironmentProgramme,theUPUpreparedthefirsttwoglobalinventoriesofgreenhousegasesforthepostalsector.Theyshowedthatpostaloperatorsemittheequivalentofatleast54milliontonnesofcarboneachyear,whichrepresents0.7%oftotalannualgreenhousegasemissions.

ThePost,asanintegralcomponentofnationalinfrastructure,hastraditionallysupportedjusticesystemsasanauthenticatorforthedepositofpostalitems(registeredmail).

Anefficientpostalservicehelpsstrengthentherunningofnationalinstitutions.

ThefinalSDGistodevelopaglobalpartnershipfordevelopment.Designatedoperatorscansupporttradingsystemsbyprovidinglogisticalandfinancialservices.Intheory,theleastdevelopedcountrieshaveduty-freeaccesstodevelopedeconomies,butmechanismsneedtobeestablishedtoallowserviceproviderstoenterthosemarkets.Designatedoperatorscanplayakeyroleinthisregardbyintroducingsimplifiedexportproceduresforsmallbusinessesanddevelopingtrustworthyandtransparentfinancialsystemsforpayments.TheBrazilianPostdevelopedExportaFácil,aprogrammetohelpsmallandmedium-sizedbusinesseswiththeexportationprocess,whichisalsobeingintroducedinothercountriesintheLatinAmericaregion.IndiaPostisworkingwithitspartnerstoprovidebreedersandfarmerswithinformationonmarketdevelopmentandthebestwaytostoretheirmerchandise.ItalsoallowsitslogisticsnetworktobeusedforthedistributionofInternet-enabledcomputers,printersandsoon.ManyPostshaveforyearsbeenprovidingpopulationswithaccesstonewtechnologies,andpromotingthedevelopmentoftelemedicineprogrammes,teleagricultureande-commerce.

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TheimportanceoftheSDGsshouldnotbeunderestimated,astheyareapriorityforallcountriesandespeciallydevelopmentagencies.Thus,whenseekingfundingforpostalreform,designatedoperatorsandgovernmentsmustbeawareof,andabletoexplainandjustify,theimportantsocialandeconomicrolethatthenationalpostalnetworkcanplayintheeconomicdevelopmentofacountry,linkingittotheattainmentoftheSDGs.

TheIPDPmethodologywasdevelopedandapprovedinthe2005–2008cycle.TheaimwastointroduceanewapproachtocooperationinmattersofpostalsectorreformwithintheframeworkoftheUPU.Forthefirsttime,aneedhademergedtocoordinatethepostalsectorreformanddevelopmentactivitiesofkeyplayers:thesupervisoryministryforpostalservices,theregulator,thedesignatedoperator,workers,otherpostalserviceprovidersandothergovernmentbodiesinvolvedinprovidingthepostalservice(ministryoffinance,economy,planning,socialdevelopment,etc.).Thisroadmap,inadditiontoproposingthestep-by-stepreformofthetraditionalpostalsectorindifferentcountries,canbeusedtoexpandthevisionofthepostalsector–basedonthecommentsintheSDGsection.

Theimportanceofthatvisionstemsfromtheexperiencegainedincertaincountrieswheretherespectivedesignatedoperatorshaveverylowvolumesoftraditionalpostalservices.Itisessentialthatthosecountries,whenpresentingtheirreformprojects,alsoputforwardplanstoexpandanddiversifytheirrangeofservices.

Postalservicesareoftenunderappreciated.Asaresult,itisincumbentonthepostalsectorandtheUPUtoillustratethebenefitsofthepostalsectorinthemodernworld.Indevelopingcountries,thepostalsectormustbemorethanamereproviderofproductsandservices.Itmustcontributetoeconomicandsocialdevelopment.

Tohelpillustratethevalueofthepostalsector,adescriptionisprovidedbelowofthevariousservicesthatdesignatedoperatorscouldprovideindiversifyingtheirofferings,increasingtheirmarketshareandfurtherpromotingthedevelopmentoftheirrespectivecountries.

1.3.2.1

Banking

Postaloperatorshavehistoricallybeenimportantprovidersoffinancialservices.ThefirstpostalsavingsbankwasestablishedintheUnitedKingdomin1861.In1878,anintergovernmentaltreatywasconcludedoninternationalmoneyorders.Aroundtwo-thirdsofPostsworldwideprovidesomeformoffinancialservice(moneyorders,savings,billpayments,socialbenefits,etc.).ThemainadvantageofferedbyPoststhatprovidebankingservicesistheirextensivenetwork.Onaverage,Postshavetwiceasmanyofficesasbanksintheirrespectivecountries.Postofficesarealsomorewidelygeographicallydistributedthanbanks,enablingthemtoserveruralcommunities.Postalbankstendtoattractindividualsonlowincomes,whoarenottypicallytargetedbymajorbanks.Sincedevelopmentagenciesareparticularlyinterestedinexpandingfinancialservicesinruralareas,governmentsplanningtoinstitutepostalreformshouldhighlightthepotentialofsuchaprocesstofacilitatefinancialinclusion.Donoragenciesarealsointerestedinsupportingthecorrespondentbankingmodel,asusedbyBancoPostalinBrazil.TheBraziliandesignatedoperator,Correios,actsasanagentforBradesco,aprivatebank.Together,theylaunchedBancoPostal,apostalfinancialservicesbranchwhichcapitalizesonthePost'sphysicalnetworktopromoteaccesstofinancialservices.From2002to2010,BancoPostalbroughtbasicsavingsaccountsto10millioncitizens,mostofwhomdidnotpreviouslyhavebankaccounts.

1.3.2.2

Payments

Frombillpaymentstosocialsecuritytopensions,designatedoperatorscanfacilitatepaymentsonbehalfofmanyorganizations.TheArgentinePostteamedupwithPagoFácil("EasyPayment")toacceptmosthouseholdbillpayments.Abarcodeonthebillisreadatthepostoffice,paymentisacceptedandthecustomerreceivesareceipt.Thedesignatedoperatorreceivesatransactionfeeforeachbillpaid,andthecustomerhaslocalaccesstotheservicethroughthepostoffice.Billpaymentsystemssignificantlycontributetoensuringthesustainabilityofutilitiesandcanbefacilitatedbydesignatedoperatorswithoutanyneedformajorinvestment.

InParaguay,theUNDPdescribedthedifficultiesencounteredintryingtopayallowancestopoorruralmotherstoencouragethemtosendtheirchildrentoschool.Whilemotherswereeligiblefortheallowanceaslongastheirchildrenattendedschool,therewasaprobleminphysicallyreachingthemotherstopaythembecausethepostofficedidnotprovidefinancialservicesandtherewasnobankingnetworkinruralareas.Thiswasa

1.3.2

The IPDP as a starting point

for a new vision of the postal

sector – Product and service

diversification

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clearopportunityforthedesignatedoperatortomeetadevelopmentneed,butonethatrequiredthegovernment'sapproval.Designatedoperatorsneedtoidentifysuchopportunitiesintheirowncountryandlobbygovernmenttoallowthemtoexpandtheirserviceofferings.

InKenya,thePostconcluded320partnershipswithdifferentpublicutilitycompaniesatthenational,regionalandlocalleveltocollecttheirpayments.ThePostreceivescashpaymentsonbehalfofitspartnersinreturnforafee,generatingmoreincomeandfootfallforpostoffices.

Domesticandinternationalremittanceshaveenormousvalueformanytravellingworkersneedingtosendmoneyhometotheirfamilies.Often,theonlychoiceavailableisaninternationalcompanythattakes20%ormoreofthetransferincommissionfees.Inaddition,accesstomoneytransfersislimitedinruralareas,forcingpeopletotravelconsiderabledistancestotransfermoneyorrelyonathirdpartytodosoontheirbehalf,oftenatadditionalcost.

Designatedoperatorscanserveasalternativeprovidersofnationalandinternationalremittances,atmorecompetitivepricesandwithbroadergeographicalcoverage.InLatinAmerica,theCorreoGiroproject,launchedwiththesupportoftheUPU,hashadapositiveimpact.However,moreworkmustbedonetoprovideanefficientandeconomicservicethatcanbeaccessedinruralareastogainmarketsharefrommajorremittancecompanies.InLaos,whereastheintroductionofremittancesbyfaxhasmetwithgreatsuccessandsimplifiedthetransferprocess,agreateremphasismustbelaidonqualityofservice.InWestAfrica,theintroductionofelectronicremittanceservicesin355ruralofficesacrosssixcountrieshashadasignificantimpactonthevolumestransferred,whichdoubledinthespaceofayear.

1.3.2.4

E-government

Theimportanceofprovidingsimplifiedgovernmentservicestothegeneralpublicisrecognizedwithindevelopmentorganizations.Theyfocussignificantfundsonprojectsthatincreasetransparencyofgovernmentandaccesstoservices,particularlyinruralareas.Giventheirextensivenetworks,designatedoperatorsarewellplacedtobenefitfromsuchprojects.However,theymustdemonstratethattheyhavethecapabilitytooffersuchservicesandgainthetrustofboththeagenciesandusers/customers.

Designatedoperatorsthatbecomeprovidersofe-governmentservicesmayreceivecontributions(incashorinkind)tohelptheminstallcomputerequipmentorimprovetheirconnectivity.Thisisanopportunityforthedesignatedoperatornotonlytoexpanditsproductrange,butalsotooptimizeitsresourcesandimproveitsothernetworkedservices,includingthequalityandspeedofitsbanking,remittanceandbillpaymentservices.

1.3.2.5

Information

Manydevelopmentinitiativesdonotrealizetheirfullpotentialbecausetheycannotreachtheirintendedrecipients.Postalnetworkscanbeusedtodisseminateinformation,withindividualpostaloutletsprovidingadviceonhealth,education,socialbenefitsandothergovernmentinitiatives.TheBrazilianPostprovidesinformationtoexpectantmothersontheimportanceofbreastfeedingforthehealthoftheirbabies.TheKenyanPosthasdeliveredinformationonAIDStohelpeducateemployeesandthepublic.BotswanaPosthasestablished"Kitsong"(knowledge)centresinmorethan50ofits192postofficesandbranches.TheseprovideaccesstosuchservicesasInternet,fax,photocopying,desktoppublishing,printinganddigitalphotography.Theyalsoprovideinformationonagriculturalandbusinessdevelopmentandtourism,acommunitybulletinboard,alocalizeddirectoryofgovernmentservicesandlinkstofinancialandeducationalinstitutionsforthebenefitoflocalcommunities.

1.3.2.3

Remittances

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Designatedoperatorsmustbeawareofthepriorityissueswithintheirrespectivecountriesandworkwithrelevantdevelopmentorganizationstoensuretherightinformationreachestherightpeople.Thegovernmentshouldusethepostalnetworktodistributeandcollectinformationonbehalfofitselfandotherpublicenterprises(census,healthinformation,etc.).

Thepostalsectorcanplayanimportantroleindevelopingaddressingsystems.Manycountriesstilldonothaveformaladdresssystems,leadingtoproblemswithcensusupdates,taxation,education,healthandothersocialissues.Somecountrieshavedevelopedpeculiaraddresssystemsthatcanonlybedecipheredwiththespecialistknowledgeofthelocaldesignatedoperator.Butdesignatedoperatorscanusethatknowledgetodevelopstandardaddressandpostcodesystemsandultimatelydatabases,whichwouldserveasbothatoolforsocialinclusionandakeyproducttobesoldtothedirectmailcommunity,thuscontributingtoeconomicdevelopment.

OneoftheaimsoftheSDGsistoreducethenumberofpeoplewithoutaccesstocleandrinkingwaterandbasicsanitationservices.InLaos,50%ofthepopulationdonothaveaccesstocleanwater.Providingthewholepopulationwithaccesswillrequiresignificantinvestmentinwaterandsewagesystems,andinorderforthoseservicestobesustainabletheremustbeasuitablebillingandbillpaymentsystem.Postscanplayanactiveroleinbilling.ButwhiletheadventoftheInternetwillundoubtedlyfacilitatee-billing,thistechnologicalleapisunlikelytohappenquicklyindevelopingandleastdevelopedcountries.

Postalserviceswithaddedvalue,suchasexpressmailandparcels,areparticularlyimportantforthedevelopmentofbusinessandtrade.Customerexpectationswithregardtospeed,security,reliabilityandtrackinginformationarebecomingevermoredemanding.Governmentsmustliberalizetheexpressservicessectortoallowcompetitorstoenterthemarketandpromoteinnovation.Butdesignatedoperatorscanandshoulddeveloptheirownexpressservicesandprovideadded-valueservicessuchastrackingandtracingtocompetewithnationalandinternationalprivateoperators.

1.3.2.8

Logistics

Logisticsservicesareanaturalprogressionforpostaloperators.Indeed,manylargerPostsaremovingintothelogisticssector.Itiscommonforasingleoperatortooffermail,financeandlogisticsservices.Manyremittancecompaniesexploitthecomplementarityofthesethreesystems.Theymakethecustomeranofferthroughamailpiece,receivepaymentandthenfacilitatedeliveryofaproduct.ThisserviceisincreasinglyimportantintheInternetage,anddesignatedoperatorscanestablishthemselvesasthepartnerofchoiceformailordercompanieswiththeirend-to-endmailsolutions,paymentsystemsandgloballogisticsnetworks.Developingcountrieshavemorebasicneedsintermsoflogisticssystems.ButsincemanyPostshavetheirowntransportsystemsmovingmailthroughoutthecountry,thereisanopportunitytoutilizesparecapacitytomoveothergoodsonbehalfofthirdparties.

MalawiPostdevelopedsuchaprojecttoenablepostalvehiclestotransportthegoodsofothercompanies,thusmaximizingrevenue.InBrazil,thelaunchofExportaFácilhassimplifiedexportationproceduresforsmallandmedium-sizedcompanies.Theprojectcondensedthe29stepsrequiredforexportationintojustthree.Ithasalsoenabledsmallproducerstoexporttheirproductsdirectlyfromthepostoffice,openinguptheglobalmarkettothemwithoutanyneedformajorinvestment.

KoreaPostdevelopedane-commerceportalspecializinginthesaleoflocalruralproducts,enablingproducersacrossthecountrytoselllocalspecialitiesdirectlytoconsumersovertheInternet.Morethan7,200productsarecurrentlyoffersthroughtheportal,withannualinvoicesamountingto135millionUSD.

1.3.2.6

Addressing

1.3.2.7

Mailandexpressservices

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DigitaltransformationhasbecomeastrategicpriorityforPoststhatwanttoremainrelevant.Postaloperatorsaroundtheworldareimplementingnewtechnologiestoadapttocustomerdemandforelectronicservices(e-services).

Forexample,manyPostsnowofferbasice-servicessuchasonlinetrackingandtracing,e-mail,hybridmailande-notifications.SomePostsalsooffermoreadvancedonlineservicessuchasdigitalsignatures,mobileapplicationsandwebsiteintegration.

ThemostadvancedPostshaveexpandedtheirproductrangeswithnextgenerationservicessuchasmobileapps(which51designatedoperatorsnowoffer).Inthepastfewyears,e-postande-governmentserviceshavedevelopedsignificantlyincountrieswithconduciveenvironments.

E-commerce–relatedservicesareahighpriorityinPosts'productinnovationplans.Theseincludewebsiteintegration,paymentsolutionsandonlinemanagementofdeliveryoptions.

TheUPUprovidestoolsandresourcestohelpPostsdevisestrategiesandpoliciesforthedevelopmentofmoreinnovativeservices,therebyensuringthesustainabledevelopmentofthepostalsector.

1.3.2.10

Otherservices

Postofficesthroughouttheworldalreadyprovideawiderangeofservices.Overrecentyears,themostadvancedPostshavebeentransformingtheirofficesintogenuinecommercialoutlets,usingthemtosellarangeofdifferentproducts(stationery,detergents,cards,mobileservices,etc.).Othershaveoptedtorentoutavailablespaceinoffices,givingthemadditionalresourcesandoffsettingthesignificantcostofmaintainingtheofficenetwork.Whilenoteverybodyisonboardwiththistypeofstrategy,thebenefitsarethreefold:officesreceiverentalincome;vendorsgainnewcustomersbyvirtueoftheirlocation;andcustomersareabletosavetimebyaccessingmultipleproductsandservicesinoneplace.

InbothJapanandIndia,provisionofinsurancethroughpostofficesisveryimportant.Otheroperatorshavechosentobecomemobileoperators,offeringawholehostofservicesrelatedtomoderntechnology.

Inviewofthepostalvisionofinternationalcooperation,itisimportantthatdesignatedoperatorsandgovernments,whenplanningpostalreform,broadentheirvisionofthesectorandthinkofnewwaystocapitalizeonthepostalnetworkwhilepromotingnationalsocialandeconomicdevelopment.

1.3.2.9

E-services

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Broadlyspeaking,postalreformreferssimultaneouslytolegalframeworks,institutionsandthedevelopmentofpostalnetworksandmarkets.Allplannedactions,inadditiontoseekingtoprovidethegeneralpublicwithaccesstomoreefficientpostalservices,mustaimtoboostcompetitionandincreasetheindependenceofthedesignatedoperatorandthepostalserviceregulator.

Preparatoryworkiscrucialtotheframingofawell-thoughtoutplanofactionforpresentationtoprospectivesourcesoffinancing.Inmostcases,theworkinvolvedinthepreparatoryphasesofreformprogrammesrequirestheservicesofexpertsaffiliatedwithpostalenterprisesandconsultingfirms,whowillneedtobepaidatthegoingmarketrate.Sinceunfamiliaritywiththepostalsectorcanleadtoundesiredresults,theinvolvementofapostalexpertiscrucial.Thus,thefirststepistosecurenecessaryfundingforpreparatoryworkandbaselinestudiessuchas:

• ananalysisofthepostalmarket; • ananalysisoftheexistinglegalframeworkandthedefinitionofanappropriatedraftlegalframeworkforthecountry;

• assessmentsofserviceoperationsinthemarket;

• thedefinitionanddeterminationofthescopeoftheuniversalpostalserviceinthecountry;

• thedevelopmentofcostmodelsforthedesignatedoperator;

• theframingofadevelopmentplanforthedesignatedoperator.

Asarule,lendersarereluctanttofinancepreliminarystudiesthatarenotpartofacomprehensivesectorreformplan.Theirrationaleisthatitisuptothegovernmenttomakethisinitialfinancialeffortasevidenceofarealcommitmentonitsparttomodernizethepostalsector.Nevertheless,somefinancialinstitutionsarepreparedtoprovidethenecessaryfundingsubjecttoframeworkcontractsstipulatingthatsuchstudiesareapreconditionforpursuingthemainobjectives.

Anotheroptionthatinvolveslittleoutlay,dependingonthestudytobeconducted,istoaskthedesignatedoperatorsorregulatoryauthoritiesofindustrializedordevelopingcountriestofurnishthelocaldesignatedoperatorwithexpertsintherelevantfield.

Preparatoryworkisvitalinestablishingtheeconomic,socialorlegalviabilityofprojectedinvestmentinthedevelopmentoftherecipientcountry'spostalsector.

Aspreviouslymentioned,IPDPsareanextremelyusefulplanningtoolwhenapplyingforfundingastheyestablisharoadmapforreform,identifyingkeyprojectstobedevelopedandtheresourcesrequiredtodoso.However,sinceitwouldbedifficultforasingleinstitutiontocommittofinancingacountry'sentirepostalreformprojectfromtheoutset,theIPDPshouldbeusedasabasisforselectingpriorityprojectswhicharemostlikelytoobtaininitialfunding.

Oneofthekeystepsintheprojectcycleisfinancing,withoutwhichthereformprocesswouldnotbepossible.

Financing postal reform

2

Design andplaning

Identification

Financing

Execution

Evaluation

Project cycle

IPDP

2.1

Introduction – preparing to apply for

funding

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Oncethepriorityprojecthasbeenidentified,itisimportantthatthepartypresentingitanddefendingittothefinancingbodiesbethegovernment,supportedbythedesignatedoperatorand/orregulatorybody,dependingonthenatureoftheproject(operationalorregulatory).

Intermsofprofitabilityandproductivity,thecriteriaappliedbymultilateralbanksareverysimilartothoseofcommercialenterprises.Therefore,itisimportantwhenpresentingaprojecttoemphasizethatthedevelopmentofthecountry'sdesignatedoperatorandpostalnetworkcanmakeasignificantcontributiontothesocialandeconomicdevelopmentofthenationasawhole.

Thedevelopmentbank'saiminmakingafinancialcommitmentistopromotetheachievementofobjectivesintermsofsectoralpolicyanddevelopmentplans.Inthepostalsector,theIPDPapproach,whichtheUPUdevelopedafterthemethodologywasvalidatedduringthe2005–2008cycle,isfullyinlinebothwiththeglobalapproachfavouredbythedevelopmentbankforitsprojects,andwiththestrategyoftheUnitedNationsanditsspecializedagencies,whoseprincipalaimistodefinenationalpoliciesandcomprehensivesustainabledevelopmentplans.

Whenthedecisionhasbeenmadetoapplyforexternalfinancing,itisessentialtoidentifythemainbodieswhichmight,undercertainconditions,grantloansordonationstoimplementthereformprocess.

Thissectioncontainsbasicinformationon:

• themainmultilateralfinancingbodies: › multilateralbanks(theWorldBankandotherregionalbanks);

› initiativesbyUnitedNationsspecializedagencies;

› EuropeAid; • themainbilateralcooperationagencies(industrializedcountriesonly).

Withregardtomultilateralbanks,wewillconcentrateonthefunctioningoftheWorldBank,asprincipalplayer,andtheregionalbanks.Wewillalsoprovideadetaileddescriptionofotherregionalbanks,andwesuggestthatcountriesofallregionsapproachthebodiesmentionedinthisguidedirectlyforfurtherinformation.

2.2.1

Multilateral financing

bodiesAsageneralrule,multilateralfinancingbodies,inconjunctionwiththegovernmentofthedevelopingcountryconcerned,identifythemainproblemsaffectingthecountry.Theythenprepare"multi-yearinterventionplans"whicharecollatedindocumentsknowngenericallyas"countrystrategies".Thenextstepistodefine,withineachmulti-yearplan,specificareasofinterventionforwhichfinancingisrequired,ortopreparespecificprojectsinrelationtotheseareasofintervention.

Itisimportanttostressthatallthesemultilateralfinancingbodiesworkdirectlywithgovernments,andnotwithdesignatedoperators.Itisthereforeuptothegovernmenttoshowanexpressinterestinpostalsectorreformandthemodernizationofthedesignatedoperator,andtoincludethesemeasuresinitsnationalstrategy.

2.2.1.1

Multilateralbanks

Multilateraldevelopmentbanksareorganizationsownedbytheirmembercountriesandaremajorprovidersofdevelopmentfinancingforthosecountries.

Thefundsthesebankshaveattheirdisposalcomefromtwosources:

• Thefinancialmarkets,throughbondissues;

• Ordinarycapital(includingsubscribedcapital,capitalondepositandreserveassets),plusspecialfunds(e.g.workingcapitalandspecialtrustfunds)earmarkedforspecificprojects,suchasloanswithadegreeofconcessionalityinfavouroftheleastdevelopedcountriesineconomicterms.

Theseinstitutionsusetheavailableresourcestograntloansandprovidetechnicalassistance.Theyalsoparticipateinalargenumberofco-financingagreements,includingmutualloans,withothermultilateral,bilateralandprivateinstitutions.

2.2

Development financing

bodies

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TheWorld Bank'sinterventioninthepostalsectorinvolvessupportforthefollowingprojects:

• Basicstudiestomapoutacourseforpostalreform;

• Themodernizationofthedesignatedoperatorresponsiblefortheuniversalpostalservice;

• Themodernizationofthesector,thedevelopmentofadded-valueservicesandtheuseofnewtechnologies(e.g.hybridmailservicesandelectronicpostalservices);

• Thedevelopmentofpostalfinancialservices; • Theuseofpublicservicepointsas"communitycommunicationcentres".

Itisimportanttopointoutonceagainthatmultilateralbanksworkdirectlywithgovernments,andnotwithdesignatedoperators.Thedesignatedoperatorshouldprepareastrategytoobtainitsgovernment'sagreementtoincludethepostalreformplaninitsnationaldevelopmentplan(orcountrystrategy),asthiswillenableittoapplytomultilateralbanksforfinancing.Normally,theauthoritiesinchargeofnegotiatingwithmultilateralfinancingbodiesaretheministriesresponsibleforfinance,theeconomyandnationalplanning.

ThemaindevelopmentbankistheWorldBankGroup,buttherearealargenumberofdevelopmentbanksattheregionalandsubregionallevels,asevidencedbythefollowinglist:

Regional development banks Ì AfricanDevelopmentBank Ì AsianDevelopmentBank Ì AsianInfrastructureInvestmentBank Ì DevelopmentBankofLatinAmerica(knownas

CAF–theinitialsofitspreviousname) Ì EuropeanInvestmentBank Ì EuropeanBankforReconstructionand

Development Ì CouncilofEuropeDevelopmentBank Ì Inter-AmericanDevelopmentBank

Subregional development banks Ì EasternandSouthernAfricanTradeand

DevelopmentBank(alsoknownasthePreferentialTradeArea(PTA)Bank)

Ì AfricanExport–ImportBank(knownasAfreximbank)

Ì ArabBankforEconomicDevelopmentinAfrica Ì CentralAmericanBankforEconomic

Integration Ì EconomicCooperationOrganizationTradeand

DevelopmentBank Ì BlackSeaTradeandDevelopmentBank Ì WestAfricanDevelopmentBank Ì EastAfricanDevelopmentBank Ì NorthAmericanDevelopmentBank Ì CaribbeanDevelopmentBank Ì DevelopmentBankoftheCentralAfrican

States

Ì EurasianDevelopmentBank Ì InternationalInvestmentBank Ì IslamicDevelopmentBank Ì NordicInvestmentBank Ì NewDevelopmentBank(formerlyknownas

theBRICSDevelopmentBank,establishedbytheBRICSstatesin2013andbasedinShanghai,China)

2.2.1.1.1

The World Bank Group

TheWorldBankGroup,whichwascreatedin1944,belongstoits189membercountries,whoseviewsandinterestsarerepresentedbyaboardofgovernorsandaboardofdirectors.Themembercountriesareitsshareholdersandholdultimatedecision-makingpowers.

TheWorldBankcomprisesthefollowinginstitutions:

• International Bank for Reconstruction and Development(IBRD,189membercountries):Establishedin1945withtheaimofreducingpovertyincreditworthydevelopingandmiddle-incomecountries,providingthemwithfinancialadviceoneconomicmanagement.

• International Development Association (IDA,173membercountries):Establishedin1960,itsmembers'contributionsenabletheWorldBanktograntvirtuallyzero-interestloansforbetween6,000and7,000millionUSDperyeartotheworld's79poorestcountries.TheIDAplaysanimportantrolesincedevelopingcountriescannottakeoutfinanceundermarketconditions.Itallocatesfundsfortheestablishmentofbasicservices(education,housing,drinkingwater,sanitation),drivingreformandinvestmentgearedtopromotinghigherproductivityandemploymentrates.

• International Finance Corporation (IFC,184membercountries):Establishedin1956,theIFCistaskedwithpromotingtheeconomicdevelopmentofcountriesthroughtheprivatesector.

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• Multilateral Investment Guarantee Agency (MIGA,180membercountries):Establishedin1988,MIGAaimstopromoteforeigninvestmentinunderdevelopedcountries.Itprovidesinvestorswithguaranteesagainstlossescausedbynon-commercialriskssuchasexpropriation,currencyinconvertibility,transferrestrictions,warandriots.

• International Centre for Settlement of Investment Disputes(ICSID,158membercountries):Createdin1966,ICSIDisprimarilyfocusedonforeigninvestmentinvariouscountries,inwhichregarditprovidesinternationalsettlementanddisputeresolutionservices.

Inaworldinwhichdesignatedoperatorsarerunalongincreasinglycommerciallines,orevenprivatized,itisimportanttodistinguishbetweenthedifferentarmsoftheWorldBank.Astate-ownedpostalbodywillapplytotheIDAforfinancing,whereasaprivateoperatorwillturntotheIFC.

TheWorldBankhasofficesin67countriesandisheadquarteredinWashington.Ithasanactivepresenceinover100countriesandparticipatedinover25postalsectorreformprojectsinvariouscountriesaroundtheworld.

WithintheWorldBank,whichhasatotalworkforceofmorethan10,000,thereisaDepartmentofInformationandCommunicationTechnologiesstaffedbyasmallteam,withalimitedcapacity.

SincetheUPUandtheWorldBanksignedaletterofintentforthedevelopmentofjointactionsinApril2001,acloselinkhasexistedbetweenthetwoorganizations.However,itisimportanttopointoutthattheWorldBankgivesprioritytothefinancingofprojectslinkedtonewtechnologiesandpostalfinancialservices,astheallocationoffundsbysectorshows.

Organization of the World Bank

Africa East Asia and Pacific

Europe and Central Asia

Latin America and Caribbean

Middle East and North Africa South Asia

ESSD Environmentandsociallysustainabledevelopment

FinanceAnti-moneylaundering

Banks(PFS) Housingfinance CreditreportsFinancialinclusion

Paymentsandremittances

HD Humandevelopment

Infrastructure EnergyICT(postalsector)

Oil,gasandmining

TransportUrban

developmentWaterandsanitation

PREM Povertyreductionandeconomicmanagement

PSD Privatesectordevelopment

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Asthetableshows,theWorldBankisaparentorganizationdividedintosixinter-regionalnetworkgroups,eachofwhichprovidesinformationaboutitssector.Thefinanceandinfrastructurenetworksaresubdividedintoseveralareas.ThepostalsectorisincludedundertheICTsectionoftheinfrastructureunit.Eachregionandeachnetworkgrouphasavice-president.Thepostalsectorhasdirectlinkswithtwonetworkgroups:InfrastructureandFinance.PostalresourcesarelocatedintheBank'sICTdepartment,withintheInfrastructuresector.However,itshouldbepointedoutthatthereisonlyonededicatedfull-timestaffmemberinthepostalarea.

Word Bank loans* by sector (2017)

SectorMillions of

USD

Agriculture,fishingandforestry 2,779

Education 2,847

Energyandextractives 6,325

Financialsector 3,106

Health 2,435

Industry,tradeandservices 4,235

Informationandcommunicationtechnologies

1,022

Publicadministration 6,708

Socialprotection 2,691

Transport 5,822

Water,sanitationandwastemanagement

4,102

Total 42,072

*IncludingIBRDandIDAloans

http://www.bancomundial.org/es/about/annual-report/ fiscal-year-data

The above diagrams show the distribution of loans from World Bank institutions by region and sector in

ThediagramontherightshowsthatITandcommunicationprojectsaccountedforlessthan1%oflendingin2016.Furthermore,mostoftheseloanswereearmarkedforICTandcommunications.Thefinancialsectorrepresented7%ofallprojectsfinancedinthatyear,amountingtoaround3,106millionUSD.Publicadministrationtookpriority,withaninvestmentof6,708millionUSDin2016.

IBRD

and ID

A Lending by Sector| Fiscal 2016

Divers Infrastructures Gestion du secteur public

Agriculture et environnement Politique économique

Développement du secteur privé et financier Développement humain

Source: Rapport annuel 2001, Banque mondiale (exercices comptables).

1

1

14%19%

23%

11%

31%

IBRD

and ID

A Lending by Sector| Fiscal 2016

Divers Infrastructures Gestion du secteur public

Agriculture et environnement Politique économique

Développement du secteur privé et financier Développement humain

Source: Rapport annuel 2001, Banque mondiale (exercices comptables).

1

1

14%19%

23%

11%

31%

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Thepreviouscharthelpstoidentifytheareasonwhichdesignatedoperatorsshouldfocustheirobjectives.Giventhattheinformationandcommunicationsectorrepresentslessthan1%oftotallending,andpostaloperatorsrepresentonly1%ofthatsectoroverall,thepostalsectorneedstoidentifyareasinwhichitcancontributetodevelopment.Themostobviousoftheseisfinance,whichaccountedfor7%oftotallending,andtherearesolidargumentsinfavourofincludingdesignatedoperatorsinfinancialreform.Designatedoperatorsshouldalsoconsiderthepublicadministrationsector,with19%oftotallending,asanareainwhichtheycouldobtainfinancingforreform.Designatedoperatorsshoulddevelopprojectsinthesespecificareasinordertolinktheirownreformwiththatofthepublicadministrationsector.

Global Information and Communication Technology DepartmentTheGlobalInformationandCommunicationTechnologyDepartment(GICT)isresponsibleforallprojectsrelatingtothepostalsector.

Itschiefobjectiveistoassistandpromotetechnologicaldevelopmentandtofacilitateaccesstoinformationandcommunicationtechnologyandservicesindevelopingcountries.Italsoseekstoreformcommunicationsectorsandregulatorybodies.

Itsmainactivitiesare:

• advisingonICT-relatedpolicymattersinareassuchastelecommunications,liberalization,privatizationandregulation,Internetservices(e.g.networkconnectivity,onlineadministrationande-commerce),andpostalandtransmissionservices;

• lendingtogovernmentstoenablethemtograntloanstoprivateborrowerstosetupICTinfrastructureinruralareasanddisadvantagedurbanareasandwithinthepostalnetwork;

• grantingloansforinnovativeprojectsandsharingknowledgeonthedevelopmentopportunitiesofferedbyICTs.

Contact:http://www.bancomundial.org/es/topic/ict/overview

How to obtain funding from the World Bank

Ashasalreadybeenmentioned,theWorldBank,likemostinternationalcooperationbodiesandinstitutions,negotiatesdirectlywithgovernments,andnotwithdesignatedoperators.Therefore,anexpressionofinterestinpostalsectorreformanditsinclusionindevelopmentplansmustbeobtainedfromthegovernment,throughanofficialchannel(generallytheministryoffinanceandplanning).

OfficialsfromtheBankthenvisitthecountryandinconjunctionwiththegovernmentdefinesectoralpoliciesandreformplans.Tocreatethebestconditionsforsuccess,thegovernmentshouldprepareaglobalstrategyforthesector,defininginparticulartheuniversalpostalservice,themarketstructureandtherulesgoverningcompetition.Itshouldalsohighlightthemanyareas(financial,technological,etc.)thatcanbedevelopedthroughthepostalnetwork.

TheadviceprovidedbytheBankrelatesmainlytothedevelopmentofasectoralstrategy,legislationandregulation,thelinkingofreforms,privatesectorparticipationandtheovercomingofobstaclestoinvestment.

The various phases of participation

Oncethegovernmenthasofficiallyindicateditscommitmenttosectoralreform,arrangementscanbemadewiththeBanktocarryoutafact-findingmissiontoassessthesituation.Discussionsontheprojectorientationcanthenbegin.

Inordertobeconsidered,postalprojectsmustbepresentedaspartofawidergovernmentproject(e.g.publicsectorreform,telecommunicationssector,infrastructuredevelopment)andbesystematicallylinkedtoquantifiableobjectiveswhichshowtherolethepostalsectorcanplayinthecountry'sgeneralandeconomicdevelopment.

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Inter-American Development BankTheInter-AmericanDevelopmentBank(IDB)isaninternationalfinanceinstitutionheadquarteredinWashingtonD.C.intheUnitedStates.Itwasestablishedin1959withtheaimoffundingviableeconomic,socialandinstitutionaldevelopmentprojectsandpromotingregionalcommercialintegrationintheLatinAmericaandCaribbeanarea.Itisthelargestregionaldevelopmentfinanceinstitutionofitskind.

ItscoreobjectivesaretoreducepovertyinLatinAmericaandtheCaribbeanandtopromotesustainablelong-termgrowth.TheIDBcurrentlyhasanordinarycapitalof101,000millionUSD.

Its48membercountriesaresplitintotwocategories:borrowingandnon-borrowing.The22non-borrowingmembersdonotreceiveanyfundingbutdobenefitfromtheIDB'sprocurementrules:onlymembercountriescansupplygoodsandservicestoprojectsfinancedbythebank.Thenon-borrowingmembersare:Austria,Belgium,Canada,China,Croatia,Denmark,Finland,France,Germany,Israel,Italy,Japan,Korea(Rep.),Netherlands,Norway,Portugal,Slovenia,Spain,Sweden,Switzerland,UnitedKingdomandUnitedStates.

The26borrowingmembersoftheIDBjointlyhold50.02%ofvotingpowerontheboardandaredividedintotwogroupsaccordingtothemaximumpercentageoffinancethattheycanreceive:

• Group I: Argentina,Bahamas,Barbados,Brazil,Chile,Mexico,TrinidadandTobago,UruguayandVenezuela.

• Group II: Belize,Bolivia,Colombia,CostaRica,DominicanRepublic,Ecuador,ElSalvador,Guatemala,Guyana,Haiti,Honduras,Jamaica,Nicaragua,Panama,Paraguay,PeruandSuriname.

TheprioritiesoftheIDBareto: • reducepovertyandsocialinequality; • addresstheneedsofsmallandvulnerablecountries;

• promotedevelopmentthroughtheprivatesector;

• tackleclimatechangeandchallengesrelatingtorenewableenergyandenvironmentalsustainability;and

• fostercooperationandregionalintegration.

TheIDBgrantsloansandprovidestechnicalassistance,usingresourcescontributedbyitsmembercountriesandfundsraisedonworldwidefinancialmarketsthroughtheissueofbonds.Itisalsopartytoalargenumberofco-financingagreementswithothermultilateral,bilateralandprivateinstitutions.

The IDB structure

IDB

Gro

up

Inter-American Development Bank

Theeconomic,socialandinstitutionaldevelopmentprojectssupportedbytheIDBintheLatinAmericaandCaribbeanregionincludesectoralreformandorientationprogrammes,emergencyoperationsintheeventofnaturaldisastersandfinancialcrises,andassistanceforpublicandprivateinvestments.TheIDBisownedbyits48membercountries,comprising26borrowersand22non-borrowers,includingCanada,China,Israel,Japan,Korea(Rep.),theUnitedStatesofAmericaand16Europeancountries.ItfinancesprojectscarriedoutinitsmembercountriesinLatinAmericaandtheCaribbeanonly.

Inter-American Investment Corporation

TheInter-AmericanInvestmentCorporation(IIC)isanautonomousinstitutionfocusingexclusivelyonthedirectandindirectfinancingofsmallandmedium-sizedenterprisesinLatinAmericaandtheCaribbean.

(45membercountries)

Multilateral Investment Fund

TheMultilateralInvestmentFund(MIF)servesasaninnovationlaboratorytopromotedevelopmentthroughtheprivatesectorinLatinAmericaandtheCaribbean.ItistheprincipalsourceofprivatesectordevelopmentfundinginLatinAmericaandtheCaribbean.Itsupportspilotprojectsforinstitutional,legalandregulatoryreform,skillstraining,andsmallandmicro-enterprisedevelopment.

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Breakdown of IDB loans by sector from 1961 to July 2016

OfthesectorsthathavereceivedthegreatestIDBinput,thebiggestshareoftheloansfrom1961todatehasgonetothestatemodernizationandreformsector.Thissectorisdividedintoanumberofsubsectors,intowhichtheprojectssetoutintheIPDPcouldfit.Forexample,thepostalserviceofElSalvadorreceivedadonationfromtheIDBforaprojecttostrengthenthedesignatedoperator.Thisprojectwasincludedunderthestatemodernizationandreformsector,sub-sector:modernizationandadministrationof

justice.However,postalprojectsdonothavetobelimitedtothissector.Forexample,in2007theIDBapprovedaregionalpilotprojectforasimplifiedpostalexportsystemundertheheadingofprivatesectordevelopment,sub-sector:marketdevelopmentandoperations.Therefore,itisimportanttobeawareofeachbody'sstrategyforgrantingfundingandtomaintainabroadvisionofthepostalsector'sroleintheeconomyandinsociety.

Approved Loans by Sector from 1961 to March 31, 2016

Agriculture and Rural Development

Education

Energy

Health

Industry

Other

Social Investment

Tourism

Transportation

Environmental andNatural Disasters

Private SectorDevelopment

Reform/Modernizationof the State

Urban Developmentand Housing

7,28

2.54

14,5

65.0

8

21,8

47.6

2

29,1

30.1

6

36,4

12.7

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Planning

Loan applicant and Bank

Discussions on possible social and economic development needs in the loan applicant country.

Identification

Loan applicant and Bank

Official application by the government to the Bank for the consideration of specific financing operations. During the application, the Bank and the loan applicant identify any issues to be addressed, establishing the preparatory strategy for the project (3 to 12 months)

Negotiation and approval

Loan applicant and Bank

Negotiations between the loan applicant and the Bank on the loan arrangements and contractual conditions. Following the subsequent approval of the board, project implementation can begin.

Preparation

Loan applicant

Detailed definition of the scope of action of the project, establishing constituent elements and determining costs and any other necessary studies.

Execution and oversight

Loan applicant and Bank

4 to 8years

The applicant is responsible for project implementation while the Bank oversees the process and deadlines and ensures compliance with procedures.

Analysis and development

Bank

The Bank assesses the financial and technical feasibility of the project and the capacity of the loan applicant to carry out the project in respect of its plans, forecasts and estimates.

Evaluation

Office of Evaluation and Oversight

(independent from the Bank and directly

attached to the board)

Examines adopted strategies, guidelines and procedures to ensure that they comply with the IDB’s objectives and mandates. Evaluates projects to determine their impact.

TheCentralAmericanBankforEconomicIntegration(CABEI),whichwasestablishedin1960,isafinancialinstitutionwhoseobjectiveistopromoteeconomicintegrationanddevelopmentintheCentralAmericaregion.Itcontributesonanequitablebasistodevelopmentandeconomicgrowthinthecountriesofthisregionbysupportingemployment-generatingprogrammesandprojectswhichimproveproductivityandcompetitiveness,inordertoraisethelevelofhumandevelopmentindicators.

TheBankisheadquarteredinTegucigalpa,Honduras,andhasbranchesinallitsfoundingcountries(CostaRica,ElSalvador,Guatemala,HondurasandNicaragua).Itsmembershipalsoincludesthreenon-foundingcountries(Belize,DominicanRepublicandPanama)andfivecountriesoutsidetheregion:Argentina,Colombia,Mexico,SpainandTaiwan.

TheCABEIismanagedbyitsBoardofGovernors,undertheoperationalandadministrativeresponsibilityofthenine-memberBoardofDirectors,whichdefinespoliciesandvotesonthebudget.Theinstitution'slegalrepresentativeisitsExecutivePresident.

IDB project cycle

2.2.1.1.2

Central American Bank

for Economic Integration

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Organizational structure of the Central American Bank for Economic Integration

In2016,theCABEIheldauthorizedcapitalof1,718millionUSD.Itgeneratednetrevenueof118millionUSDandadministeredaloansportfolioofaround6,062millionUSD(asat30June2017).Asthesefiguresdemonstrate,itisaverystablefinancialinstitutionwithinCentralAmerica.

Board of Governors

Directors

Comptroller

Internal AuditorEvaluation Office Secretary

Senior Management

CreditSectors and Countries

FinanceOperations and

TechnologyInstitutional Risk

Strategic PlaningInstitutional

Relations Office

Legal Affairs Office

Social Benefit Fund

Human Resources Office

Compliance Office

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TheCABEIfinancesnumerousprojectsinvarioussectors:

• Telecommunications; • Energy; • Infrastructureandtransport; • Socialsectors:urbanplanning,povertyprevention,healthandenvironment.

TheCABEI'sstrongtieswithinternationalfinancialinstitutionsforgedoverthepasthalfacenturygreatlyaiditseffortstoevaluatetheregion'sbusinesses.Ithasin-depthknowledgeofcommercialpracticesandmarketdynamics,aswellasaccesstocompanies'data.

Thevariousprojectsareevaluatedaccordingtothefollowingcriteria:

• ananalysisofthebusinessapplyingforfinancing(marketexperience,competitiveprofile,economicandfinancialprofile);

• ananalysisoftheprojecttobefinanced(projectobjective,marketaspects,financial,technical,politicalandeconomicaspects);

• ananalysisoftheguarantees; • ananalysisofthebusiness/project.

ToencourageinternationalfinancialinstitutionstolooktoCentralAmerica,theCABEIactsasfinancialandtechnicaladviserforthepromotionandanalysisofprojects.Itsexperienceandfinancialcontactsintheregionprovideasoundbasisformakinganappropriatefinancialevaluationforeachproject,whichisclearlyadvantageoustotheinstitutions,forbothdirectfinancingandco-financingarrangements.

AsamultilateralfinancingbodyforCentralAmerica,theCABEIspecializesinmobilizingandgrantingexternalresourcestosupplementfundsoriginatingfromothersources,inordertopromotesustainabledevelopmentandintegrationintheregion.

2.2.1.2

Keyinformationonother

multilateralbanks

Thefollowingsectionconsistsofdatasheetsprovidingkeyfactsonmultilateralbanking.Takingvariousfinancialbodiesasexamples,itdefinestheirobjectives,themainsectorssupported,theloaninstrumentsandtheconditionsgenerallyapplied.

International Bank of Reconstruction and DevelopmentWhiletheIBRDhasalreadybeenmentionedinthesectionontheWorldBank,someusefulinformationforthepreparationofprojectsisgivenbelow.

• Type of institution: Multilateral,memberoftheWorldBankGroup.

• Main objectives: Povertyreductioninthepoorestsolvent,middle-incomecountriesandpromotionofsustainabledevelopment.

• Principal areas of intervention: Criticalareasforthewell-beingofdisadvantagedpeopleinallbeneficiarycountries.

• Financing instruments: › Loans › Guarantees › Riskmanagementproducts › Analysisandconsultancyservices

• Criteria for evaluating applications and other information: IBRDcustomersaresolvent,middle-incomecountrieswithapercapitaincomeofbetween1,000and10,000USD.Unlesstheyaresolvent,countrieswithapercapitaincomeofbelow1,000USDarenotgenerallyeligibletoreceiveIBRDloans.However,low-incomecountriescanobtainloansatareducedrateofinterestorconcessionarycreditsfromtheIDA.

Aswellashelpingbeneficiarycountriesbymeansoffinancing,theBankoffersaccesstoinformationneededfordevelopment.Intermsofthetransferofinformation,theBank'sactivitiesincluderesearchanddevelopmentofanalyticalandconceptualframeworksdesignedtohelpcountriescreatethenecessaryconditionsforsustainabledevelopment.

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• Applications for funding: EveryprojectfinancedisgovernedbyabilaterallegalagreementdrawnupbetweentheWorldBankandthepublicbodyreceivingthefunds.Oneofthegovernment'skeyobligationsundertheloanagreementistocomplywiththeBank'spoliciesonprocurement,assetoutinthe"GuidelinesforprocurementunderIBRDloansandIDAcredits"andthe"GuidelinesfortheselectionandemploymentofconsultantsbyWorldBankborrowers".

http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,-contentMDK:20064677~pagePK:84269~piP-K:60001558~theSitePK:84266,00.html

Contact: bdm@worldbank.org www.worldbank.org/en/about/contacts

Address: THEWORLDBANK1818HSTREET,NWWASHINGTON,DC20433UNITEDSTATES

Eligible regions/countries: solventmiddle-incomecountries

International Development AssociationWhiletheIDAhasalreadybeenmentionedinthesectionontheWorldBank,someusefulinformationforthepreparationofprojectsisgivenbelow.

• Type of institution: Multilateral,memberoftheWorldBankGroup.

• Main objectives: Offeringloanstothepoorestcountries:79leastdevelopedcountries,including39inAfrica.

• Principal areas of intervention:Health,education,infrastructureandagriculture,institutionalandeconomicdevelopment.

• Financing instruments: OnefifthofthefundsloanedbytheIDAisconcessionalfinancing.Theremainderisgrantedintheformofinterest-freecreditswithlongrepaymentterms.IDAconcessionalfinancing,whethergranteddirectoradministeredthroughpartnerships,isusedfor:

› alleviatingthedebtburdenofheavilyindebtedpoorcountries;

› improvinghealthandwatersupplies; › promotingvaccinationandimmunizationprogrammestoreducetheincidenceofeasilytransmissiblediseases,suchasmalaria;

› combatingtheHIV/AIDSpandemic; › helpingcivilsocietyorganizations; › promotinginitiativestocutgreenhousegasemissions.

• Criteria for evaluating applications and other information: TwocriteriaaretakenintoconsiderationtodeterminewhetheracountryiseligibleforIDAfunds:

› Relativepoverty,whichcorrespondstoagrossnationalincomepercapitabelowapredefinedthreshold,updatedannually;

› Insolvency,preventingitfromobtainingaloanundermarketconditions.

• Applications for funding: AstheIDAispartoftheWorldBankGroup,everyprojectfinancedisgovernedbyabilaterallegalagreementdrawnupbetweentheWorldBankandthepublicbodyreceivingthefunds.Oneofthegovernment'skeyobligationsundertheloanagreementistocomplywiththeBank'spoliciesonprocurement,assetoutinthe"GuidelinesforprocurementunderIBRDloansandIDAcredits"andthe"GuidelinesfortheselectionandemploymentofconsultantsbyWorldBankborrowers".http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,contentMDK:20064677~page-PK:84269~piPK:60001558~theSitePK:84266,00.html

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International Finance CorporationWhiletheIFChasalreadybeenmentionedinthesectionontheWorldBank,someusefulinformationforthepreparationofprojectsisgivenbelow.

• Type of institution: MemberoftheWorldBankGroup.

• Main objectives: Strategicprioritiesformaximizingtheeffectsofsustainabledevelopment:

› Investinproductiveprivateenterprisesinassociationwithprivateinvestorsandwithoutanyguaranteeofgovernmentreturn,wheresufficientprivatecapitalisnotavailableunderreasonableconditions;

› Serveasaninformation-sharinghubtoallyinvestmentopportunities,privatecapital(whetherdomesticorforeign)andadministrationwithexperience;

› Helptostimulatetheproductiveinvestmentofprivatecapital,whetherdomesticorforeign.

• Principal areas of intervention: TheIFChelpsbusinessesandfinancialinstitutionsinemergingmarketstocreateemployment,generatefiscalrevenue,improvesystemsofgovernance,adoptenvironmentallysoundpoliciesandsupportlocalcommunities.Theaimoftheseeffortsistoimprovequalityoflife,particularlyforthoseingreatestneedofsupportfortheircountry'sgrowthanddevelopment.

• Financing instruments: TheIFCfinancesinvestmentintheprivatesector,mobilizescapitalininternationalfinancialmarketsandoffersconsultancyservicestobusinessesandgovernments.

Maininvestmentservices: › Loansforitsownaccount; › Syndicatedloans; › Intermediaryservices; › Riskmanagementproducts; › Localcurrencyfinancing; › TheMunicipalFund:Tradefinance.

IFCloansgenerallyrangefrom1millionto100millionUSD.Italsograntsalimitednumberofloansofbetween100,000and1millionUSD.Toensuretheparticipationofprivatesectorinvestorsandlendingbodies,theIFCdoesnotnormallyfinancemorethan25%oftheestimatedtotalcostoftheproject.

• Criteria for evaluating applications and other information:TobeeligibleforIFCfunding,aprojectmust:

› belocatedinadevelopingcountrythatisanIFCmember;

› becarriedoutintheprivatesector; › betechnicallysound; › havegoodprospectsofbeingprofitable; › benefitthelocaleconomy;and › beenvironmentallyandsociallysound,satisfyingtheIFC'senvironmentalandsocialstandardsaswellasthoseofthehostcountry.

TheIFCdoesnotlenddirectlytoSMEsandmicro-businesses,ortoindividualentrepreneurs.Itgenerallylendstofinancialintermediariesthaton-lendtosmallerbusinesses.

• Applications for funding: ThereisnostandardprocedureforapplyingtotheIFCforfinancing.Anybusinessorentrepreneurseekingtoestablishanewventure,orexpandanexistingenterprisecanapproachtheIFCdirectly.Thisisbestdonebyreadingthe"Howtoapplyforfinancingguide"andsubmittinganinvestmentproposal.

• Address: InternationalFinanceCorporation2121PennsylvaniaAvenueNWWashingtonDC,20433UnitedStates

• Eligible regions/countries: AnydevelopingcountrythatisanIFCmember.However,projectsinselectedsectors,suchasinformationtechnology,maybelocatedinanindustrializedcountryifthebenefitsprimarilyaccruetoadevelopingcountryorcountries.

African Development BankTheAfricanDevelopmentBank(AFDB)isamultinationaldevelopmentbankthatwasestablishedin1964.Ithas54Africanmembercountriesandisfinancedby27European,AmericanandAsiancountries.

TheBankisresponsibleforpromotingtheeconomicdevelopmentandsocialadvancementofAfricancountries.ItisheadquarteredinAbidjan,Côted'Ivoire.

TheAfDBGroupcomprisesthreeentities:theAfDB,theAfricanDevelopmentFund(ADF)andtheNigeriaTrustFund(NTF).

Itsmainobjectiveistostimulatesustainableeconomicdevelopmentandsocialadvancementinitsregionalmembercountries,thushelpingtoreducepoverty.

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Tothisend,theAfDB:

• mobilizesandallocatesresourcesforinvestmentinregionalmembercountries;and

• providespolicyadviceandtechnicalassistancetosupportdevelopmentefforts.

Principle areas of intervention:

• Fragile states: Supportingfragilestatescanstrengthentheseeconomies,whichaccountforafifthofthecontinent'speopleandasignificantproportionofitspoverty.Fragilityiscontagiousaswellasepisodic.Itcallsforsupporttailoredtodiverseneedsandacontinuumandregionalapproachbuiltarounddialogue,localownershipandthecelebrationofsuccess.

• Agriculture and food security: StrengtheningagricultureandfoodsecuritythroughanintegratedvaluechainapproachcanimprovethelivelihoodsofAfricanswholiveinruralareas.Manyarereliantonsubsistencefarming,andasizeableproportionarechronicallyvulnerabletoclimaticuncertainty.Africalivesoffitsland,andmorethan70%ofAfricansworkontheland,whichtoooftenfailstoprovidefortheirneeds.Bycontinuingtoinvestinruralinfrastructure(suchasruralroads,irrigation,electricity,storagefacilities,accesstomarkets,conservationsystemsandsupplynetworks),theBankwillhelpcountriesincreaseagriculturalproductivityandcompetitiveness.Byinvestinginregionalinfrastructureandengaginginpolicydialoguetoremovetradebarrierstoimportingfoodandsuppliessuchasfertilizers,itwillhelprestrictfoodpricevolatilityandreducefoodinsecurity.

• Gender:IncreasingthecapabilitiesandopportunitiesofwomenandgirlscanboosttheproductivityandparticipationofhalftheAfricanpopulation.Afocusonknowledge,skillsdevelopment,andlegalandpropertyrightsistheprecursortoempoweringwomen'senterprise.Womenandgirlsbearsignificantlymorethanhalfofthecontinent'sburdens,buttheyalsohavedisproportionatelyhighpotentialasgeneratorsofincome.

Breakdown by sector of loans approved for projects in 2016:

Asthefollowingchartshows,designatedoperatordiversificationandpostalsectordevelopmentprojectscouldplayaroleinsupportingfragilestates,whichareapriorityfortheAfDB.

• Financing instruments:

› Loans,riskmanagementproducts,guarantees,technicalassistanceformembercountries;

› TheADFfinancesprojects,technicalassistanceoperationsandstudiesunderveryfavourableconditions(verylowinterestratesandrepaymentperiodsofupto50years,witha10-yeargraceperiod)forleastdevelopedmembercountries;

› TheNTF,usedtofinanceconcessionaryloansfornationalorregionalprojectspromotingdevelopmentinlow-incomecountries;

• Criteria for evaluating applications and other information: ForeveryprojectcarriedoutinamemberstateintheregionandfinancedwhollyorpartlybytheAFDB,anagreementissignedbetweentheAFDB andthebeneficiarycountry.Oneofthekeyconditionsoftheagreement(whetheritisaloanagreementorasubsidyprotocol)isthatprocurementundertheprojectmustcomplywiththeRulesofProcedureforProcurementofGoodsandWorksor,ifapplicable,theRulesandProceduresfortheUseofConsultants.

Priv

ate Secto

r Operations by Sector, 2016

2 46%

6%

9%

73%

Multisector Agriculture Transport

Energy Finance Social

Source: AfDB Statistics Department

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• Applications for funding

› Projectcycle:https://www.afdb.org/en/projects-and-operations/project-cycle/

› Standardbiddingdocumentshavebeendevelopedtoassistborrowersinthepreparationoftenderdocumentsrequiredfortheexecutionofprocurementactivities:http://www.afdb.org/en/projects-and-operations/procurement/resources-for-borrowers/standard-bidding-documents/

• Contact:AfricanDevelopmentBankGroupAvenueJosephAnoma01BP1387Abidjan01Côted'IvoireTel:+22520204010E-mail:afdb@afdb.org Website:www.afdb.org

• Eligible regions/countries: MostAfDBresourcesandprojectsareintendedforitsregionalmembercountries.

Countriesareclassifiedunderthreecategoriesonthebasisoftwocriteria:(i)creditworthiness;and(ii)GNIpercapita.Thefirstcategorycomprises"notcreditworthy"countrieswithaGNIpercapitabelowanestablishedthresholdupdatedannually(infiscalyear2013–2014:1,205USD).CountriesinthefirstcategoryareonlyeligibleforconcessionalresourcesfromtheADFwindow.ThesecondcategorycontainscountriesthathaveaGNIpercapitabelowtheoperationalGNIcut-offbutarecreditworthy:thesearecalled"blendcountries"andareeligibleforADFandAfDBresources.Finally,thethirdcategoryismadeupofcountriesthatareabovetheoperationalGNIcut-offandcreditworthy.ThosecountriesareeligibleforAfDBresourcesonly.

TheGroup'screditpolicywasreviewedinMay2014,enablinganADF-eligiblecountrytoborrownon-concessionalresourcesfromtheAfDBwindowundercertainconditions.

Asian Development BankTheAsianDevelopmentBank(ADB)wasconceivedintheearly1960sasafinancialinstitutionthatwouldbeAsianincharacterandfostereconomicgrowthandcooperationinoneofthepoorestregionsintheworld.Itiscomposedof67members,48ofwhicharefromtheAsia-Pacificregion.

TheADBassistsitsmembersandpartnersbyprovidingloans,technicalassistance,grantsandequityinvestmentstopromotesocialandeconomicdevelopment.

TheADB's2008–2020strategicframeworksetsoutthreedistinctbutcomplementarydevelopmentagendas:

Ì Inclusiveeconomicgrowth; Ì Environmentallysustainablegrowth;and Ì Regionalintegration.

• Main objectives:TheADBhelpsdevelopingmembercountriestocombatpoverty.Itsactivitiesarebasedonitslong-termstrategicframework,Strategy2020.TheBank'sprincipalmissionsareto:

› lendtogovernmentsandpublicandprivateenterprisesindevelopingcountriesthataremembersoftheinstitution;

› providetechnicalassistanceservicesfortheplanningandexecutionofdevelopmentprojects,whicharefinancedbydonations,credits,oracombinationofthetwo;

› boostpublicandprivateinvestmentintheregion;and

› coordinatethedevelopmentplansandpoliciesofitsdevelopingmembercountries.

Principalareasofintervention:

EightypercentofADBloansaregrantedinfivecentraloperatingareasidentifiedascomparativestrengthsoftheADB:

Ì infrastructure; Ì education; Ì environment; Ì regionalcooperationandintegrationstrategy; Ì operationalplanningofthefinancesector.

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• Financing instruments: Loans,technicalassistanceandgrants.

• Criteria for evaluating applications and other information:

› Ordinaryfundsareloansgrantedtotheregion'smostdevelopedcountries.Theyareofferedatnear-marketrates,andtherepaymenttermisusuallybetween15and25years.

› Specialfunds:

» AsianDevelopmentFund:ThisistheBank'sinstrumentofconcessionalfinancingforgrantingsoftloanstomembercountrieswithalowpercapitaincomeandverylimitedcapacityforservicingthedebt.

» TechnicalAssistanceSpecialFund:Thisistheprincipalsourceofnon-reimbursablefinancing.

» SpecialFundsfinancedbyJapan,suchastheJapanSpecialFund,usedmainlytofinanceorco-financetechnicalassistanceprojectsbymeansofgrants.

» JapanFundforPovertyReduction:Thisfundisintendedforfinancingpostgraduatestudiesineconomics,management,scienceandtechnology,etc.,inacademicinstitutionsintheAsia-Pacificregion.

• Contact: Headquarters6ADBAvenue,MandaluyongCity1550,MetroManila,PhilippinesTel:+6326324444Fax:+6326362444www.adb.org

Council of Europe Development BankTheCouncilofEuropeDevelopmentBank(CEB)isamultilateraldevelopmentbankwithanexclusivelysocialmandate.

Throughtheprovisionoffinancingandtechnicalexpertiseforprojectswithahighsocialimpactinitsmemberstates,itactivelypromotessocialcohesionandstrengthenssocialintegrationinEurope.

TheCEBrepresentsamajorinstrumentofthepolicyofsolidarityinEurope.Itparticipatesinfinancingsocialprojects,respondstoemergencysituationsandcontributestoimprovingthelivingconditionsofthemostdisadvantagedpopulationgroups.

TheCEBcontributestotheimplementationofsociallyorientedinvestmentprojectsthroughthreesectorallinesofaction,namely:

• Sustainableandinclusivegrowth; • Integrationofrefugees,displacedpersonsandmigrants;

• Climateaction:developingadaptationandmitigationmeasures.

In2016,theCEBgrantedloansfor13,715millionEURto3,351projects.

• Criteria for evaluating applications and other information: TheCEBcarriesoutitsmissionwithinthestrategicframeworkofaformal"DevelopmentPlan"thatdescribesthelogicunderpinningitsactionandsetsforthguidelinesfortheactivityinthemediumterminrelationtotheoperationalcontextwithinwhichtheBankoperates.ThecurrentDevelopmentPlancoverstheperiod2017–2019.

• Applications for funding: Loanrequestsarepreparedindividually,accordingtothespecificnatureoftheprojectsinvolved.Therefore,potentialborrowersdonotneedtocompleteastandardformorquestionnaire.

• Contact: https://coebank.org/en/contact/

• Address: CEB55,avenueKléberFR-75116,PARISFranceTel:+33(0)147555500

European Bank for Reconstruction and DevelopmentTheEuropeanBankforReconstructionandDevelopment(EBRD)wasfoundedin1991tofurtherprogresstowardsmarket-orientedeconomiesandpromoteprivateandentrepreneurialinitiativeintheformercommunistcountriesofEasternEurope.

ItisheadquarteredinLondonandprovidesloanstobanks,businessesandpublicauthorities.

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TheEBRDwasestablishedtohelpformerEasternBloccountriesestablishtheirprivatesectors.Tothisend,itprovidesprojectfinancingforbanks,industriesandbusinesses,whethernewventuresorexistingcompanies.Itcollaborateswithpublicenterprisestosupporttheirprivatization,asadvocatedbytheWTOsincethe1980s,andtheimprovementofmunicipalservices.

TheEBRD'smandatestipulatesthatitmustonlyworkincountriesthatarecommittedtodemocraticprinciples.Itpromotesenvironmentallyreasonableandsustainabledevelopmentanddoesnotfinancedefence-relatedactivities,thetobaccoindustry,selectedalcoholicproducts,substancesbannedbyinternationallaworstand-alonegamblingfacilities.

• Main objectives: Investingprimarilyinprivatesectorclientswhoseneedscannotbefullymetbythemarket.TheBankfosterstransitiontowardsopenanddemocraticmarketeconomies.Itprovidesprojectfinancingforbanksandbusinesses,investinginbothnewventuresandexistingcompanies.

• Principal areas of intervention:

› Agribusiness › Capitalfunds › Financialinstitutions › Informationandcommunicationtechnology › Legalreform › Manufacturingandservices › Municipalinfrastructure › Nuclearsafety › Powerandenergy › Propertyandtourism › Transport

• Financing instruments: loans,equityfinance,guarantees,leasingfacilitiesandtradefinance.Typically,itfundsupto35%ofthetotalprojectcost.

• Criteria for evaluating applications and other information:Eachprojectistailoredtothecustomer'sneedsandthespecificsituationofthecountry,regionorsector.Directinvestmentsgenerallyrangefrom5to250millionEUR.

• Contact: http://www.ebrd.com/pages/about/contacts.shtml

• Address: EBRDOneExchangeSquareLondonEC2A2JNUnitedKingdomTel:+44(0)2073386000

European Investment BankTheEuropeanInvestmentBank(EIB)istheEuropeanUnion'sbank.Itwasfoundedin1958undertheTreatyofRomeandisheadquarteredinLuxembourg.ItsmissionistocontributetothebalanceddevelopmentoftheEUthrougheconomicintegrationandsocialcohesion.

TheshareholdersoftheEIBaretheEUmemberstates,whoseministersoffinancemakeuptheBank'sBoardofGovernors.

OutsidetheUnion,theEIBsupportsthepre-accessionstrategiesofEUcandidatecountriesandenforcesthefinancialprovisionsofagreementsconcludedunderEuropeanaidanddevelopmentcooperationpolicies.

• Main objectives: TheBankseeksto:

› boostEurope'spotentialintermsofjobsandgrowth;

› supportactiontomitigateclimatechange; › promoteEUpoliciesoutsidetheEU.

• Principal areas of intervention: TheEIBprovidesbillionsofeurosinhigh-impactprojectsthatmakeadifferencetocompanies,theclimateandthelivesofpeople,throughfourpublicpolicyprioritiesorgoals:

› Innovationandskills; › SMEs; › Infrastructure; › Climateandenvironment.

1960’s 1970’s 1980’s 1990’s 2000’s 2009-2017

Historic investment (in EUR millions of EUR)

509 692

367 214

107 106

57 1129 010837

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• Financing instruments: TheEIB'sproductsandservicesfallintothreemaincategories:

› Lending–about90%ofitstotalfinancialcommitment.TheBanklendstoclientsofallsizestosupportgrowthandjobs,andthissupportoftenhelpstoattractotherinvestors.

› "Blending"–allowingclientstocombineEIBfinancingwithadditionalinvestment.

› Advisingandtechnicalassistance–maximizingvalueformoney.

TheEIBissuesloansabove25millionEURdirectly.Wheresmallerloansareinvolved,itopenscreditlinesforfinancialinstitutionsthatthenlendfundstocreditors.

• Criteria for evaluating applications and other information: Projectcycle(http://www.eib.org/projects/cycle/index.htm).ProjectscanbesubmittedfortheattentionoftheEIB,eitherofficiallyorinformally,throughvariouschannels:potentialprojectpromoters(privateorpubliccompanies);commercialbankswishingtoincludetheEIBintheirfinancingplans;publicauthorities;andnationalorinternationaldevelopmentfinanceinstitutions.

ItisadvisabletosubmitprojectstotheEIBattheearliestpossiblestage,particularlyinthecaseofinfrastructure-relatedprojectsandprojectsstemmingfrompublic–privatepartnerships.

• Applications for funding:Initialcontactstodiscussaproposedprojectcanbeinanyform,bytelephone,fax,e-mailorletter.TheformandcontentoftheprojectdocumentssubmittedtotheEIBaretheresponsibilityoftheborrower,whichisfreetoseekinternalorexternaltechnicalassistancewiththeirpreparationifnecessary.ThedocumentationsenttotheEIB(whichshouldbeadaptedtotheparticularproject)shouldcoverthefollowingpoints:

› Generalinformationontheborroweranditslegalstatus;

› Financialinformation; › Technicalinformation; › Environmentalinformation; › Economicinformation.

• Contact: http://www.eib.org/infocentre/contact/index.htm

• Address: EIBSwitchboard:98-100,boulevardKonradAdenauerL-2950LuxembourgTel:(+352)43791Tel:(+352)437704

• Eligible regions/countries: DespitebeingthebankoftheEU,theEIBhasavitalroletoplayoutsidetheUnion.Itmobilizesresourcesforeconomicallysoundprojectshavingahighimpactin:

› countriesthatarepreparingtobecomeEUmembers;

› African,CaribbeanandPacificcountries; › countriesneighbouringtheEUtotheeast; › partnercountriesintheMediterranean,CentralAsia,AsiaandLatinAmerica.

Islamic Development BankTheIslamicDevelopmentBank(IDB)isamultilateraldevelopmentfinancingagencyheadquarteredinJeddah,SaudiArabia.Itwasformallyopenedon20October1975.TheBank'smainshareholders,inorderofcontribution,are:SaudiArabia,Kuwait,StateofLibya,Turkey,UnitedArabEmirates,Iran,Egypt,IndonesiaandPakistan.

TheaimsoftheBankaretoholdequityinterestsincompanies,grantloansforproductiveprojectsandentrepreneurialinitiatives,andprovidefinancialassistancetoitsmembercountries.

• Main objectives: FosteringtheeconomicdevelopmentandsocialprogressofmembercountriesandMuslimcommunitiesindividuallyaswellasjointlyinaccordancewiththeprinciplesofSharia(IslamicLaw).TheBankalsofinancesSMEsandoffersmicrocreditsolutions.

• Principal areas of intervention: Reducingpovertyandilliteracy,combatingdiseases(malaria,AIDS,etc.)anddevelopingagricultural,industrialandagro-industrialsectorsandinfrastructure.

• Financing instruments: › Loans › Technicalassistance › Leasing › Instalmentsale › Linesofcredit › Equityparticipation › Profitsharing

• Applications for funding:

› Identificationofaprojectcancomefromseveralsources,includingthegovernment,IDBmissions,andcontactwithotherdevelopmentfinanceinstitutions,suchasUNagencies,orprivatesponsors.

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› Generally,inordertobeconsideredforIDBfinancing,aprojectshouldhaveofficialgovernmentendorsementandmustalsomeetaprimafaciefeasibilitytesttoshowthattechnicalandinstitutionalsolutionsarelikelytobefoundatcostscommensuratewithexpectedbenefits.Onceidentified,aprojectmightbeincorporatedintoathree-yearprogrammeforthecountryconcerned,wherebytheprogrammeformsthebasisfortheBank'sfutureoperationsinthatcountry.However,somegovernmentshaveagreedthatsuchendorsementisnotnecessaryforprojectssubmittedbytheprivatesector.

• Contact: https://www.isdb-pilot.org/contact-us/

• Address: IDBP.O.Box5925Jeddah21432SaudiArabiaTel:+966126361400Fax:+966126366871E-mailinfo@isdb.org

Caribbean Development BankTheCaribbeanDevelopmentBankisaninternationalfinancialinstitutionthataimstopromoteregionalcooperationandintegration,andfinanceeconomic,socialandinstitutionaldevelopmentprojectsintheCaribbeanarea.Itbeganoperatingin1970.TheBankiscurrentlyheadquarteredatWildey,SaintMichael,Barbados,andhas25members.

• Principal areas of intervention:

› Economicandsocialinfrastructure › Trainingandeducation › Agricultureandruraldevelopment › Privatesectordevelopment › Waterandsanitation › Environmentalmanagement › Climateresilience › Energyefficiency › Renewableenergy › Disasterriskmanagement

• Financing instruments: Loans,grants,actionplans,technicalassistancetosecurefunding.TheminimumloanamountgrantedbytheCaribbeanDevelopmentBankdirectlytoapublicsectorborroweristheequivalentof200,000USD.

• Criteria for evaluating applications and other information: TheCaribbeanDevelopmentBankprioritizesbusinessproductivityandinfrastructureorservicesthatsupportproductivebusinessesandpromotesocialandcommunitydevelopment.Itgenerallyrequiresborrowerstoselecttheircontractorsbycompetitivetendering.

• Contact:http://www.caribank.org/about-cdb/contact-us

• Address:

CaribbeanDevelopmentBankP.O.Box408WildeyStMichaelBarbados,W.I.BB11000Tel:(246)4311600Fax: (246)4267269E-mail:info@caribank.org

African, Caribbean and Pacific Group of StatesTheAfrican,CaribbeanandPacificGroupofStates(ACP)fosterscooperationbetweentheEUandAfrican,CaribbeanandPacificstatesundertheCotonouAgreement.Signedin2000,theCotonouAgreementisthemostcomprehensivepartnershipagreementbetweendevelopingcountriesandtheEU.Itprovidesaframeworkforcooperationinmattersofdevelopmentandtradeandalsohasapoliticaldimension.ItsultimateobjectiveistoeradicatepovertyinACPcountries.

• Main objectives: AlleviatinganderadicatingpovertyandpromotingsustainabledevelopmentandthegradualintegrationofACPmemberstatesintotheglobaleconomy.

• Principal areas of intervention: TheareasofinterventionaregenerallyattheACP'sdiscretionandincludethecommunicationandtransportsectorsandICTdevelopment,povertyreduction,sustainabledevelopmentandinternationaltrade.TheACPcountrieshaveagreedtofocuscooperationonthreemainareasfrom2020:

› Trade,investment,industrializationandservices;

› Developmentcooperation,technology,scienceandinnovation;and

› Politicaldialogue.

Thecooperationframeworkandpoliticalguidelinesaredevelopedaccordingtoeachcountry'sparticularsituation.Theyaredesignedtopromotetheimplementationofsocialandeconomicreformsandtheparticipationofprivatepartnersandcivilsocietyplayersinthedevelopmentprocess.

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• Financing instruments: CallsissuedbyEuropeAid–ACP.TheACPactsasanintermediary(providinginformation,clarifyingdoubts,etc.).

• Criteria for evaluating applications and other information:Provisionoffinancialassistanceto:

› ACPmembercountries,regionalandinterstateorganizations;

› jointbodiesmadeupofACPandEUcountries;

› nationaland/orregionalpublicorsemi-publicagencies;

› municipalauthoritiesorgovernmentsandthecorrespondingfinancialinstitutions;

› developmentbanks,enterprises,businessesandotherprivateoperators;

› financialintermediariesoftheACPortheEUwhichprovidefundsandpromoteandfinanceprivateinvestmentinACPcountries;and

› decentralizedcooperationagencies.

• Applications for funding:ACPandEUcountriesarejointlyresponsiblefor:

› establishingtherulesoffinancialcooperationwithintheframeworkofjointagencies;

› planning; › evaluatingprojectsandprogrammes; › ensuringequalityinthetreatmentofparticipantsandconsultants;

› proposingfollow-upandevaluationmeasuresandforecastingprojectimpacts;

› ensuringthatprojectsareimplementedefficiently,effectivelyandspeedily.

• Contact: http://www.acpsec.org/en/secretariat/contact.htm

• Address: AvenueGeorgesHenri4511200BrusselsBelgium

Development Bank of Latin AmericaTheDevelopmentBankofLatinAmerica(CAF)aimstopromotesustainabledevelopmentandregionalintegrationinLatinAmericabyfinancingprojectsinthepublicandprivatesectorsandprovidingtechnicalassistanceandotherspecializedservices.Createdin1970andcomprising19countriesfromLatinAmerica,theCaribbeanandEurope,aswellas13privatebanks,itisoneofthemainsourcesofmultilateralfinancingandanimportantgeneratorofknowledgefortheregion.

Itworkswiththepublicandprivatesectors,providingmultiplefinancialproductsandservicestoabroadrangeofclients,includingthegovernmentsofitsshareholdercountries,financialinstitutions,andpublicandprivatecompanies.

Itsmainactivitiesareactingasafinancialintermediary,obtainingresourcesfromindustrializedcountriesfortheregion,financingthedevelopmentofproductiveinfrastructure,promotingdevelopment,fosteringtradeandinvestment,andsupportingthebusinesssector.

• Main objectives: Topromotesustainabledevelopmentandregionalintegrationbyamassingsufficientfundstolendtothepublicandprivatesectorsofitsmembercountriesandprovidingvariousfinancialservices,andtosupportthefinancialstructuringofpublicandprivateprojects.

• Principal areas of intervention: In2016,thebreakdownofapprovedinvestmentbysectorwasasfollows:

• Products and services:

› Loans › Structuredfinance › Financialadvice › Guaranteesandendorsements › Partialguarantees › Shareholding › Treasuryservices › Technicalcooperation › Linesofcredit › Co-financing

App

rova

ls by economic sector 2016 (in percentages)

2

4 1

14

17

14

30

19

Macro stabilization and reform Productive infrastructure Social services and healthcare

6% Transport

1% Telecommunications

10% Energy

Education Water Commercial banks Development banks Production

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• Loans:

LoansrepresentCAF'smainfinancialtoolandcanbeshortterm(1year),mediumterm(1–5years)orlongterm(over5years).Theyfallintothreecategories:commercialloans(pre-shipmentandpost-shipment)andworkingcapitalloans,loansforprojects,andlimitedguaranteeloans.

CAFmayfinancesovereignriskandnon-sovereignriskoperations.Loanscanbegrantedatallstagesofprojectimplementation.Undercertaincircumstancesandwithinthecontextofanintegralcreditrelationship,CAFmayprovideloansforthedevelopmentofcommercialoperationsgearedtopromotingexports,andworkingcapitalforcompaniesorfinancialinstitutions.

TherangeofprojectsthatCAFmayfundvariesbutincludesinfrastructureplansforroads,transportation,telecommunications,powergenerationandtransmission,waterandsanitation,andprojectsthatencourageborderdevelopmentandphysicalintegrationbetweenshareholdercountries.

Intheareaofindustry,CAFinvestsinprojectstoexpandandmodernizetheproductioncapacityandbusinessintegrationofitsshareholdercountriesinregionalandglobalmarkets.

Theadvantagesofthisprogrammeinclude:

• accesstobetterfinancingtermsbasedonthesupportofamultilateralinstitutionthatmeetstheclient'sneedswithregardtoduration(whethershort,mediumorlongterm);

• flexibilityandresponsiveness.

LoansareagreementsbetweenCAFanditsclients,wherebyclientsagreetoreturntoCAF,withinaspecifiedperiod,thesumofmoneyborrowedforaspecificpurpose,plusinterest,fees,andotherexpensesagreedbetweentheparties.

EligibletransactionsforfundingbyCAFarethosethataresubmittedbythegovernmentsofshareholdercountries,aswellasprivateormixedcapitalsectorprojectsfromawiderangeofeconomicsectors.

• Contact: https://www.caf.com/es/sobre-caf/contacto/

• Address: CAFAv.LuisRoche,TorreCAFAltamira,CaracasTel:+582122092111Fax: +582122092444E-mail: infocaf@caf.com

2.2.2

Commercial banks

Asanalternativetoseekingpublicfundingfrommultilateralbanks,borrowerscanapplytocommercialbanksforloansandgrants.However,inordertoattractprivatecapital,thegovernmentneedstoestablishastablelegalframeworkforthepostalservice,withregulatoryprovisionsthatwillencourageparticipationandprivateinvestment.Thestate'sroleisthereforetopromotecompetitivenessandthefunctioningofthemarketsinwhichtheprivateoperatorsparticipate.

2.2.3

Other international

financingbodiesAsaUnitedNationsagency,theUniversalPostalUnionhas,overthepastfewyears,developedanimportantnetworkofcontactswithotheragenciestopromotethedevelopmentofvariousprojectsandobtainadditionalfundingfromsisterorganizations.AdescriptionofthemethodbywhichtheUNDPandEuropeAidgrantfinancingisgivenbelow.

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United Nations Development ProgrammeTheUnitedNationsDevelopmentProgramme(UNDP)ispresentin170countriesandterritories,workingtohelpcountrieseradicatepoverty,eliminateinequalitiesandfosterinclusion.Ithelpscountriestodeveloppolicies,alliances,leadershipskillsandinstitutionalcapabilities,andtobuildresilienceinordertosustaindevelopmentresults.

Results at a glance (2014–2017)

• Sustainabledevelopment › 24.7millionpeople(51%women)benefitedfromimprovedlivelihoodinitiativesin119countries.

› Over2millionnewjobs(36%forwomen)werecreatedin98countries.

› 35countriesdevelopedactionplanstoaddressunfinishedMDGsworkandtransitiontotheSDGs.

› 94countriesimplementedmeasurestowardslow-emissionandclimate-resilientdevelopment.

• Democraticgovernance › Nearly75millionnewvotersregisteredin40countries.

› Over3.2millionpeoplein35countriesgainedaccesstolegalaidservices.

› 2millionpeoplein22countriesreceivedantiretroviraltreatment.

› 27.6millionpeopletookpartinHIV-relatedbehaviouralchangecommunicationinitiativesin24countries.

• Resiliencebuilding › 1,239disasterriskreductionandadaptationplanswereputintoplaceatnationalandsupranationallevelsin58countries.

› 38countriesadoptedenforceablelawsorregulationstoaddressdisasterandclimaterisks.

› Morethan5.3millionpeoplehadimprovedaccesstoenergyin50countries.

› 240earlywarningsystemswereestablishedin30countries.

› 481plansandprogrammesinformedbydisasterandclimateriskassessmentsin36countries.

• Financing instruments: Solutionsandassistanceinthefieldofethicalpolicy.TheUNDPimplementsitsprogrammeswiththeassistanceofspecialists,non-governmentalorganizations,UNspecializedagenciesandresearchbodies.

• Criteria for evaluating applications and other information:85%oftheUNDP'sbasicfundsareearmarkedforcountrieswithanannualpercapitaincomeof750USDorless.MostUNDPinitiativesareinthepublicsector(implementedbyministriesandkeyelectoralcommissionsfordevelopment)aimedatdevelopingskillswithininstitutionsinordertoattainhumandevelopmentobjectives.Itmobilizesandmanagesfundsentrustedtoitbythebeneficiarycountriesthemselves.

• Contact:http://www.undp.org/content/undp/es/home/operations/contact-us.html

• AddressUnitedNationsDevelopmentProgrammeOneUnitedNationsPlazaNewYork,NY10017UnitedStatesofAmericaFax:+12129065364

EuropeAid Cooperation OfficeTheEuropeanUnion,throughtheEuropeanCommission,isoneofthelargestfundersofprojectsintheworld,providingmorethan50%ofallglobaldevelopmentaid.

TheCommissionispresentinmorethan150countriesandisthesecondlargestdonorofhumanitarianaidintheworld.

TheEuropeanUnion'sexternalaidischannelledthroughEuropeAid,theEuropeanCommission'sdirectorategeneralresponsibleforexternalaid.Itsaimistomaximizetheimpactofsuchfunding.EuropeAidimplementstheCommission'sexternalaidinstruments,fundedbyboththeEUbudgetandtheEuropeanDevelopmentFund.Itsresponsibilities

• Main objectives: ItisresponsibleforformulatingEUdevelopmentpolicyandthematicpoliciesinordertoreducepovertyintheworld;toensuresustainableeconomic,socialandenvironmentaldevelopment;andtopromotedemocracy,ruleoflaw,goodgovernanceandrespectforhumanrights,notablythroughexternalaid.ItfosterscoordinationbetweentheEUanditsmemberstatesintheareaofdevelopmentcooperationandensurestheexternalrepresentationoftheEUinthisfield.

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• Criteria for evaluating applications and other information: Conditionsofeligibilityforbudgetsupport:

› Implementationofasectoralornationaldevelopmentpolicy,reformpolicy,orclearlydefinedstrategy.

› Introductionofamacroeconomicframeworkbasedonstability.

› Implementationofacredible,relevantprogrammeforimprovingpublicfinancemanagement.

› TheEuropeanUniondoesnotmonitortheuseofthesefundsby,forexample,auditingtheaccounts.Itistheresponsibilityofthenationalauthoritiestooversee,monitorandauditpublicfunds.

• Contact: http://ec.europa.eu/europeaid/index_en.htm.

• E-mail:info@ec.europa.eu

• Adresse: EuropeAidCooperationOfficeDirectorate-GeneralforExternalRelationsEuropeanCommissionEuropeAidH/5L417/52,Wetstraat,2001049BrusselsBelgiumTel:+32(0)22991111Fax:+32(0)22996407

2.2.3.1

Bilateralinstitutions

Therehasbeenanincreaseinthenumberofdevelopmentfinanceorganizationsinrecentyears.Therearemorethan70bilateralinstitutions(whoseshareholdersareindustrializedordevelopingcountriesactingasinternationaldonors),around260multilateralbodies,andnumerousglobalfundsandprivatefoundations.However,asasignificantproportionofinternationaldevelopmentcooperationactionischannelledthroughbilateralinstitutions,itisimportantforcountriestounderstandhowtheseagencieswork.

Giventhattheprioritizationofaidobjectivesdiffersfromonebilateralagencytoanother,itisdifficulttoidentifyaframeworkintowhichtheywillallfit.However,certainareasoftransversalactionarecommontomostofthem,andarelistedbelow:

• Genderequality; • Combatingpoverty; • Environmentalsustainability; • Defendinghumanrights.

Althoughtheprocessesforformulatingandpresentingprojectsvarybetweenagencies,themostcommonlyadoptedsectoralprioritiesare:

• Coverageofbasicneeds; • healthandeducation; • developmentofaneconomicbase,whichcanbebrokendownintothreekeyareas:

› infrastructuredevelopment; › promotionoftechnicalimprovementsinthevariousactivitiesmakingupthecountry'sproductivestructuretoenableittoentertheinternationalmarket;

› promotionofprivateenterprisethroughtheencouragementofentrepreneurialinitiativesandtheefficientfunctioningofmarkets;

• strengtheningofinstitutionsandgoodgovernance.

Itisevidentfromthislistoftransversalprioritiesthat,ingeneralterms,thepostalsectorassuchisnotaprioritysectorforanyoftheagencies.Itisthereforeimportanttostressthattheauthoritiesresponsibleforpostalsectorpolicyand/orthedesignatedoperatorshouldensurethatthegovernmentincludesthepostalsectorinitsnationaldevelopmentplanwhencooperationagreementsarenegotiatedwiththevariousagencies.

Althoughthestrategyforincludingthepostalsectorinthedevelopmentplancanvaryfromonecountrytoanother,itisclearthatpostalnetworkdevelopmentfitsperfectlyintothe"infrastructuredevelopment"category,andthatpostalmarketdevelopmentfacilitatesthecountry'sentryintotheinternationalmarket.

Whentakingstepstoensurethatthegovernmentincludesthepostalsectorinthenationaldevelopmentplan,itisalsoimportanttopointouttherolethatpostalnetworkdevelopmentcanplayinachievingthedonoragencies'ownobjectives.Therefore,atthisstage,andwhenformulatingprojectsrelatingtopostalreform,itisadvisabletorefertotheotherbroaderobjectivesofinternationalcooperationorofthenationalplan,ratherthanfocusingsolelyonpostalnetworkdevelopment.

304304

Informationonsomeofthebilateralinstitutionsinvolvedinareasconnectedwiththepostalsectorissetoutbelow.

French Development AgencyTheFrenchDevelopmentAgency(AFD)isaninclusivepublicdevelopmentbankthatplaysacentralroleindevelopmentpolicyinFrance.ItmakescommitmentstoprojectsthatgenuinelyimprovetheeverydaylivesofpeopleindevelopingandemergingcountriesandinFrenchoverseasterritories.

TheAFDisactiveinseveralareas: • Energy; • Healthcare; • Biodiversity; • Water; • Digital; • Trainingandeducation.

Itsupportsthetransitiontowardsasafer,fairerandmoresustainableworldinlinewiththeSDGs.

TheBankispresentin108countriesthroughitsnetworkof85branchesandfinancesmorethan2,500developmentprojects.

• Financing instruments: Loans,grants,guarantees,anddebtreductionanddevelopmentagreements.

• Criteria for evaluating applications and other information: LocalsponsorspresentfinancingapplicationstoAFDbranches,whichstudytheprojectandensurethatitconformstotheAFD'ssectoralandgeographicalstrategies.Businessesandserviceprovidersareselectedonthebasisofacallfortendersmadebytheprojectmanagerinaccordancewithnationalregulations.TheAgencyensuresthattheprocessisvalidbutdoesnotinterveneintheselectionofconsultants.

• Applications for funding: Projectcyclemanagement:http://idele.fr/fileadmin/medias/Documents/FT6_AFD_01.pdf(Frenchonly).

Projectdatabase:http://www.afd.fr/base-projets/listerProjets.action

• Contact:https://www.afd.fr/fr/contacter-afd

• Address: AFD5RueRolandBarthes75598PARISCEDEX12FRANCE

Swiss Economic Cooperation and Development Division TheEconomicCooperationandDevelopmentDivisionoftheStateSecretariatforEconomicAffairs(SECO)contributestoachievingthestrategicgoalsofSwitzerland'sforeigneconomicpolicy.

ItengagesatabilateralandmultilaterallevelwithmanydifferentpartnerorganizationsanddrawsonthespecialistknowledgeofeconomicandtradepolicywithinSECOandtheFederalDepartmentofEconomicAffairs,EducationandResearch.Itusesthisknowledgeinspecificareasofdevelopmentcooperation,e.g.todevelopregionaleconomicandlabourmarketpolicy,strengthencompetitivenessandengagewiththeWTOorOECD.

• Main objectives: Tosupporttheintegrationofpartnercountriesintotheglobaleconomyandpromotetheirsustainablegrowth,thuscontributingtopovertyreduction.

• Principal areas of intervention: Urbaninfrastructureandpublicservices,economicandfinancialpolicy,privatesector,sustainabletradeandenvironmentallyfriendlydevelopment.

• Contact: https://www.seco-cooperation.admin.ch/secocoop/en/home/about-us/contact.html

Dev

elop

ment cooperation by theme 2016 (in %

)

28

20

18

19 15

Urban infrastructure and utilities Economic and financial policy

Climate-friendly growth

Private sector and entrepreneurship Sustainable trade

excluding operating costs

305305

• Address:EconomicCooperationandDevelopmentStateSecretariatforEconomicAffairs(SECO)Holzikofenweg363003BerneSWITZERLANDTel:+41(0)584686056E-mail:info.cooperation@seco.admin.ch

United Kingdom Department for International DevelopmentTheDepartmentforInternationalDevelopment(DFID)leadstheUK'sworktoendextremepoverty.Itaddressestheglobalchallengesofourtime,includingpovertyanddisease,massmigration,insecurityandconflict.Itsworkisbuildingasafer,healthier,moreprosperousworldforpeopleindevelopingcountriesandintheUKtoo.

DFIDisaministerialdepartmentsupportedbytwoagenciesandpublicbodies.

• Priorities

› Strengtheningglobalpeace,securityandgovernance

› Strengtheningresilienceandresponsetocrisis

› Promotingglobalprosperity › Tacklingextremepovertyandhelpingtheworld'smostvulnerable

› Deliveringvalueformoney

• Bodiesresponsibleforfinancingrequests:Thedepartmentworkswiththegovernmentsofdevelopingcountriesandwithcharitableorganizations,commercialfundraisersandinternationalorganizationssuchastheWorldBank,UNagenciesandtheEuropeanCommission.

• Contact: http://www.dfid.gov.uk/About-DFID/Contact-us

• Address: DFIDLondonheadquarters22WhitehallLondonSW1A2EGUnitedKingdomTel:+44(0)2070230000Fax:+44(0)2070230012

Swedish International Development Cooperation AgencyTheSwedishInternationalDevelopmentCooperationAgency(SIDA)isagovernmentagencyworkingonbehalfoftheSwedishparliamentandgovernmenttoreducepovertyintheworld.Throughitswork,itcontributestoimplementingSweden'sPolicyforGlobalDevelopment.

ItimplementsSwedishdevelopmentpolicyinorderto:

Ì enablepeoplelivinginpovertytoimprovetheirlives;

Ì cooperateonreformmatterswithEasternEurope;

Ì distributehumanitarianaidtopeopleinneedofassistance;and

Ì carryoutenhanceddevelopmentcooperationwithatotalof35countriesinAfrica,Asia,EuropeandLatinAmerica.CooperationcountriesareselectedbasedonpoliticaldecisionsmadebytheSwedishgovernment.

• Principal areas of intervention: › Democracy › Humanrightsandgenderequality › Economicopportunities › Knowledge › Sanitationandsocialdevelopment › Developmentofenvironmentalsustainability

› Peaceandsecurity

• Bodiesresponsibleforfinancingrequests:Swedensupportsgovernments,agencies,theprivatesector,organizationsandindividualsinpoorcountries.

• Financing instruments: Financeforprojectsinvolvingprivateinitiative:

› Directfinanceforcompanymergers; › Guarantees,loansorfinanceforaclientofthecompany,oftenagenciesorpublicenterprises;

› InvestmentorloansforcompaniesindevelopingcountriesthroughtheriskcapitalorganizationSwedfundandtheWorldBankGrouporganizationInternationalFinanceCorporation;

› FinancefortheprojectsofpartnerscollaboratingonSIDAissues.

• Contact: http://www.sida.se/English/Contact-us/Sida-i-Sverige/

• Address: SIDAValhallavägen19910525StockholmSWEDENTel: +46(0)86985000Fax: +46(0)8208864E-mail:sida@sida.se

306306

Giventheweakpositionofthepostalserviceinmanydevelopingcountries,theUPUhasanimportantroletoplayinpromotingpostaldevelopment.Furthermore,itcanmakeasignificantcontributiontoraisingthepostalsector'sprofilewithdevelopmentbanksanddevelopmentorganizationsingeneral.AsaUnitedNationsspecializedagency,theUPUshouldalsoforgecloserlinkswiththemainUNinstitutions.

TheWorldBankisanimportantallyoftheUPUanditsmembercountries.However,whentheWorldBankdecidestoinvestinthepostalsector,theconditionsunderwhichitdoessogenerallyassumeacertainliberalizationofthemarketandthedesignatedoperator'sservices.Therefore,ifitactsasavehicleforinvestmenttheWorldBankwill,inasense,shapethereformprocess.

TheUPUcanestablishlinkswiththeWorldBankonvariouslevels:bydevelopinghigh-levelrelationsitwillbeabletoensurethattheBankactuallyinvestsinthepostalsector;linksforgedatotherlevelswillallowtheUPUtoinfluencethetypeofreformcarriedout.

Suchrelationscanhelptoestablishtheimportanceofthepostalsectorinbroadereconomicdevelopmentandsettheparametersforhowthetwoorganizationscanworktogethertoestablishthefuturedirectionofthepostalsectorandanyinvestmentinit.

TheUPUisalreadyworkingoneconomicmodelsandhaspresentedpapersthatdemonstratethevalueofthepostalsector.ItisimportantthatthisworkbecontinuedincoordinationwithWorldBankeconomists.

TheWorldBankisdoingimportantworkonurbandevelopmentandisimplementingvariousprojectsaroundtheworldtoprovidepeoplewithaddresses.TheUPUisalsocarryingoutimportantworkinthisareaandhasconsiderableknowledgethatitcouldsharewiththeWorldBank.Bothorganizationscoulddrawononeanother'sknowledgetoprovidebettersolutions.

Postalfinancialservicesareofparticularimportance.TheWorldBankhasrecognizedtheimportanceofthepostalsectorinfinancialinclusion,giventhedensityofthepostalnetworkanditsabilitytoreachpeopleinruralormarginalizedareaswheretherearenofinancialinstitutions.Regularcontactbetweenthetwoorganizationscouldhelptohighlighttheroleofthepostalsectorindevelopmentandsocialinclusion.

2.3.2

The UPU's role in

national postal development

TheUPUhasanimportantparttoplayinnationalpostaldevelopment.Therearevariousaspectstothisrole:onapoliticallevel,theUPUcanintercedewithgovernmentstopromotepostalreform;itcanalsoprovidetechnicalsupportforthemanyPoststhatareunabletoimplementreformwithoutexternalassistance.Forexample,inParaguayandLaos,theUPU'songoingsupport,invariousforms,hasprovedcrucialtothesuccessofthereformprocess.Laosrequestedknowledge-basedassistancetoenableittodemonstratetheconnectionbetweenpostaldevelopmentandnationaldevelopmentinthewidersense.ParaguayaskedfortheUPU'ssupportatapoliticalleveltoenableittogainaccesstoareasnormallyclosedtopostalofficials.

Inbothcases,itisrecommendedthattheUPUleadworkshopsonpostalsectordevelopmentasapreliminarystageinthereformprocess.However,dependingontheoutcomeineachcase,therelationshipcouldcontinueaftertheworkshophasended.Iftheresultsaregood,theUPUshouldcontinuetosupportthecountryinitsreformprocess,helpingittodeveloptheIPDPandsupportingitatthevariousstagesofthatIPDP.Iftheyarepoor,theUPUshouldconsiderwhetheritwouldbebettertotransfertheresourcesinvolvedtoacountrywheretheprocesswouldbesuccessful.

2.3

Role of the UPU

2.3.1

Relations between the UPU and the World Bank

307307

TheUPUmaintainstieswithmajordevelopmentorganizationsinordertopromotepostaldevelopment,especiallythosewithintheUnitedNationssystem.TheUNDPhasalreadyimplementedpostaldevelopmentprojects,andtheUPUcanpromotetheimportanceofthepostalsectorinordertoensurefutureinvestment.Inrecentyears,theUPUhassignedseveralmemorandaofunderstandingandforgedallianceswithvariousUNbodies,suchastheUnitedNationsConferenceonTradeandDevelopment.IthasalsoestablishedtieswithinitiativessuchasAidforTrade(aWTO-ledinitiative).ThishashelpedtoimprovethevisibilityoftheUPUandthepostalsectorasawhole.

2.3.4

Support of the UPU and the restricted

unionsTherestrictedunionsalsoplayacrucialroleinfundraising.TheUPUandtherestrictedunionsarecontinuingtheireffortstomakethepostalsectormorevisibleandtoassistcountrieswithfundraising.Regularactivitiesshouldincludeseminarsonfundraisingandexperiencesharing;inaddition,thisguideshouldbeupdatedregularly.

Therestrictedunionsandregionalprojectcoordinatorscanidentifyfinancingsolutionsintheirrespectiveregions.However,irrespectiveofthetypeoffundraisingactivityinvolved,theInternationalBureau'sparticipationisessentialtoensurethatregularcontactismaintainedwiththekeyfinancingbodies.

2.3.3

Relations between

the UPU and development organizations

308308

309309

Thefollowingsectionoftheguidecontainsconcreteinformationonthestepstobetaken,intermsofformandcontent,andthevarioussourcesofsupportavailable.

Anumberofyearsago,amodelwasdevelopedtoprovidecountrieswithguidanceontheproceduretobefollowedtoobtainfinancing.Itsetoutthefollowingsteps:

Presenttheapplicationforfinancing 8

Carryoutacontextualanalysis 7

Establishthestudymethod 6

Lobbyfinancingbodies 5

Identifyfinancingbodies 4

Prepareacasestudy 3

Obtaingovernmentsupportforthepostalreformprocess 2

Identifytheneedforpostalsectorreform(yesorno) 1

Thestepsarestillvalidbutdonotnecessarilyalwaysfollowthisorder.Insomecountries,thesupportofthefinancinginstitutionshastobeguaranteedbeforethegovernmentcanbeconvincedoftheneedtoreformthepostalsector.Countriesshouldalsofindoutwhatthefinancingbodies'requirementsarebeforeconductingacasestudy.Themodelshouldbeadaptedtomeettheparticularneedsofthecountryconcerned.However,thefirststagewillalwaysbetodeterminewhetherthereisaneedforreform,andthelastwillbethegrantingofaconcessionalloanorfinancing.Ifagreementisreached,stage7isimportant,becauseitwilldefinewhatthedevelopmentbankorfinancingbodyisexpectedtoinvestinthepostalsector,throughanin-depthanalysisofthenecessaryinvestmentandexpectedbenefits.

Thestagesdescribedbelowareintendedsolelyasageneralguidetothestepstobetakentoobtainafavourableresponsefrominternationalfinancinginstitutions.

Step 1: Identify the need for postal sector reformDoes the country need postal reform? Toanswerthisquestionaccurately,thefollowingpointsshouldbeanalyzed:

• Currentuniversalpostalserviceprovision(quality,coverage,features);

• Evolutionofthepostalmarket; • Customerneeds; • Financialresults; • Qualityofservice; • Statusofdesignatedoperator; • Businessmanagementevaluation.

Theneedtoreformthepostalsectorcanbedemonstratedbythedesignatedoperatororthegovernment,butinthecaseoftheformer,thepoliticalwillforpostalreformmustbeforthcoming.Itcanalsostemfromalegislativeamendment.

Step 2: Obtain government support for the postal reform processPostalreforminvolveslegalandregulatorychangeswhichcannotbemadewithoutthegovernment'sparticipation.Itisthereforeessentialtoestablishpoliticalwillatthehighestpossibleleveltoensurethecooperationoftherelevantministryorministries.

Step 3: Prepare a case studyAbasicdocumentincludingadescriptionoftheaimsandobjectivesofthereformshouldbepreparedtoconvinceauthoritiesandfinancingbodiesoftheneedforreformandtoinformthemoftheprojectrequirementsandtheimpactthatsuchaprojectwouldhaveinthecontextofthenationaleconomy.Thisdocumentwillbeadecidingfactorwheninitialcontactismadewiththebodiesinvolved.

Procedure

3

3.1

Summary of steps to

be taken to obtain financing

310310

Step 4: Identify financing bodiesItisimportanttoidentifythevariousfinancingbodiesandtodistinguishbetweenthembasedontheirdifferentfeatures.

Asarule,financingbodiesfallintotwocategories:

• Thosewhoselendingisprimarilyforreformprogrammes(commercialagreements),e.g.banks;

• Donorsthatfocustheirassistancemainlyonstudiesrelatingtothetypeofreformtobeundertaken(technicalassistance),e.g.governmentsofindustrializedcountries,theEuropeanUnion.

Step 5: Lobby financing bodiesTopresentsoundargumentstopotentialfinancingorganizationsfromtheoutset,itisadvisabletofirstcontact:

• theUPUInternationalBureau; • therelevantUPUregionalprojectcoordinator/restrictedunion;

• theUNDP.

Itisimportanttobefamiliarwiththeobjectivesandprogrammesofthelocalofficesofallinternationalfinancingbodiesandtocompileasmuchinformationaspossiblepriortodraftingtheprojectdocument.

Onthebasisofthatinformation,generalguidelinesshouldbeestablishedonthemostappropriatewaytoapproachthosebodies.

Step 6: Establish the study methodDuringinitialconversations,thefinancingbodywillexplainwhichmethodthecountryshouldaimtouse.Itwillaskthecountrytotakespecificmeasurestoobtainfunding.Thecountrycanthendeviseitsstudymethodonthatbasis.

Step 7: Carry out a contextual analysisAcontextualanalysisisanin-depthstudyinvolving:

• adetaileddiagnosisofthepostalservice; • thedefinitionofobjectivesandthepreparationofatimetableofdevelopmentactions;

• theidentificationofareasforwhichinvestmentisrequired.

Thisstudyisbasedonthebasicprojectdocument,preparedatstep3andadaptedatstep6.Thefinancingbodyshould,inprinciple,approvetheprojectbeforethestudyisfinalized.

Step 8: Present the application for financing • Showthatthefundsreceivedwillbeusedappropriately.

• Explainwhichresourceswillbeusedtorepaytheloan(income).

• Demonstratethatthesectorisabletocarryoutorganizationalchanges,reviewitspricesandrates,andintroduceormodifysomeofitsproductsorservices.

• Demonstratereturnoninvestment. • Provideadetailedcostestimateforachievingtheobjectivesset.

• Estimatethetimeframe. • Drawupalistofreferenceworksconsultedandpeoplecontactedinordertocarryouttheanalysespresented.

Theapplicationshouldbepreparedinclosecollaborationwiththerelevantnationalauthorities,toshowtheirsupportforthepostalsectorreform.

Thefollowingpointsshouldbeincluded:

• Generalinformationonthebeneficiarysector:legalframework;structureandorganization,services;financialsituationandhumanresources.

• Justificationfortheproject,inparticularthelinkbetweentheprojectandthenationaldevelopmentplan,thecurrentsituation,problemstoberesolvedandthesituationexpectedoncompletionoftheproject.

• Theprojectobjectives,i.e.theexpectedresultsandtheactionsthatneedtobecarriedout.

• Responsibilitiesandcommitmentsofpartiesinvolved.

• Methodsofoversightandfollow-up.

Also:

• Theworkplan • Theconsultants'obligations. • Plannedtrainingcoursesandteams. • Nationalcontributionsincashandinkind. • Financialcontributionsandtheirsources.

Thepresentationshouldplaceparticularemphasisonfinancialresults,whichwillbeadecisivefactorinthelender'sdecisionmaking.Thedata,informationandanalysesshouldbepresentedintheformatsusedbythefinancialinstitutionstoanalyzethefinancialaspectsofaproject.

Tosumup,theextenttowhichthecountry'sseniorpublicauthoritiestakeonboardthepostalreformprojectcanbesaidtodependontheabilityofthedesignatedoperatortopointoutthechallengesandopportunitiesofferedbythenewclimateofliberalizationandcompetition.

311311

Thereformprojectwillcontainananalysisofthecurrentsituation,adescriptionoftheactionstobeundertakenandatableshowingtheexpectedresults.Itshouldbesubmittedtothegovernment,whichshouldapproveitbeforeforwardingittothelenders.Inordertoobtainthegovernment'sapproval,countrieswillneedtoseektheUPU'sopinionandthehelpofitssupportstructures,i.e.theregionalprojectcoordinatorandexpertssentbytheUPU.TheprojectwillalsoneedtobevalidatedbytheInternationalBureau,andbytherestrictedunionsifappropriate.

Thefollowingdiagramshowsthevariousstepstobefollowedinordertoobtainfinancing:

EIGHT STEPS TO OBTAINING FINANCING

Identifyneedforreform

Identifyfinancingbodies

Presentfinancingapplication

ApprovalofapplicationforfinancingSeek

ad

vice

of

Inte

rnat

ion

al B

ure

au a

nd

Reg

ion

al P

roje

ct C

oo

rdin

ato

rs

and

res

tric

ted

un

ion

s

Mo

nit

or

mar

ket

tren

ds

Obtaingovernmentsupport

Lobbyfinancingbodies

Establishstudymethod

Carryout contextualanalysis

Presentacasestudy

312312

Modelsofformstobeusedforgatheringtheinformationneededtocarryoutapreliminarystudyareannexed.

Country

Information supplied by(nameofofficemanager)

Date

Preliminary study

ANNEX

1-A

313313

ANNEX

1-B

2014 2015 2016 2017 2018

Area

Population

Population density

Average annual population growth

› GlobalGDP(inbillionsofUSD)

› GDPpercapita(inUSD)

› ChangeinGDP

Inflationrate

Illiteracy rate

Unemployment rate

› Populationofthecapitalcity

Number of

› regionalcapitals

› inhabitantsperregion

% working population/% GDP

› Agriculture

› Industry

› Trade

› Serviceindustries

Foreign trade

› Imports

› Exports

Socioeconomic data

314314

National development plan: Yes

No

Effective date:

Funding agencies:

Is the postal service included in this national development plan?

Structural adjustment programmes for government enterprises Yes

No

Effective date:

Funding agencies:

Is the postal service included in these programmes?

Information on development or adjustment plans

ANNEX

1-C

315315

Name

Current legal status (attachacopyofitsbylaws,wherepossible)

Advantages of its current status (outlinebriefly)

Disadvantages of its current status (outlinebriefly)

Is there an ongoing project designed to change its current status? Yes

No

If so, to change its status to what?

Status of the project

Status of the postal enterprise

ANNEX

2-A

316316

Telecommunications

Service:

-Collection:

-Payment:

Other services rendered(describeandindicatetheamountofrevenue)

Service:

-Collection:

-Payment:

Service:

-Collection:

-Payment:

Service:

-Collection:

-Payment:

Service:

-Collection:

-Payment:

Transactions on behalf of other agencies

ANNEX

2-B

317317

Aside from the change in legal status, will the envisaged restructuring project affect:

-itsfinancialindependence?

-serviceorganization?

-itsworkforce?

-thenumberofpostoffices?

Willtherestructuringprojectrequire:

-fundingforitsimplementation?

-aspecialcompensationpackageincaseoflay-offs?

Investment: inequipment?

inbuildings?

Previously contacted organizations (World Bank, etc.) and results of these contacts

Additional information on the restructuring project

ANNEX

2-C

318318

Provideanorganizationchartofthepostalserviceincluding:

• generalheadquarters;

• regionalordepartmentalheadquarters;

• postoffices;

• relatedservices.

Postal service organization chart

ANNEX

3-A

319319

2014 2015 2016 2017 2018

Numberofseniormanagers

Numberofmiddlemanagers

Numberoflinestaffpositions

Numberofsupportstaffpositions

TOTAL

Numberofnewemployees

Numberof:

› retiredemployees

› deceasedemployees

› resignations

› lay-offs

Percentage

Numberofpostalworkersper100inhabitants

Staff regulations (attachallpertinentdocumentsandindicateanynegativefactors)

Hiring procedures(attachallpertinentdocuments)

Promotion procedures (describecustomarypromotionproceduresinthepostalsector)

Trends in staffing levels

ANNEX

3-B

320320

ANNEX

3-B

Compensation systems salaries

bonuses

Indicateadvertisedsalariesintheprivatesectorforcomparablepositionsforcomparisonpurposes

Training:

-Initialtraining(duration,bytypeofposition)

-Follow-uptraining(howissuchtrainingorganized?)

Trends in staffing levels

321321

Accounting system

• Managementaccounting

• Businessaccounting

Budget

• Budgetingandbudgetimplementationprocedures

Cash management

• Describecashmanagementprocedures

Management system

ANNEX

3-C

322322

Guidelinesformanagementaudits

Internalauditing

Management auditing

ANNEX

3-D

323323

Can the postal operator independently set its own rates? Yes

No

Ifnot,indicatetheprescribedprocedureforobtainingarateincrease

2014 2015 2016 2017 2018

Letters

Domesticrate,firstweightstep

• Ratiopostagerate/GNP

Internationalrate,firstweightstep(including airmailsurcharge)

• Registrationcharge

EMS

Domesticrate

Rateforthefirstweightstep

InternationalEMSrates

Zones:

Postofficeboxrentalfee

Moneyorderfees• domestic(minimum)• international(minimum)

Rate setting

ANNEX

4-A

324324

• Internationalcourierfirmsandparcelservices(useaseparatesheetforeachfirm)

› Firmname › Legalstatus › Numberofofficesnationwide › Staffsize–managers(includingoverseasmanagers) › Numberofvehicles › Rates › Salesvolume › Numberofitems:

» international(inbounditems) » domestic(outbounditems)

› Marketshare › Projectedtrends

• Domesticcourierfirms(useaseparatesheetforeachfirm)

› Firmname › Numberofoffices › Staffsize › Numberofvehicles › Rates › Salesvolume › Numberofdomesticitems › Marketshare

Competition

ANNEX

4-B

325325

Mail

Describethecurrentorganizationandpolicy

Indicatewhether:

-thereisamarketingdepartmentatheadquarterslevelinchargeoftheframingofmarketingpolicy

-thereareanydecentralizedunits(atwhatlevel)

Arethereongoingcustomerrelations(customerfiles,contractrates,etc.)?

Financial services

Describethecurrentorganizationandpolicy

Indicatewhetherthereisaspecialmarketingdepartmentforthepromotionoffinancialproducts

Marketing system

ANNEX

4-C

326326

Mail

Number of mailing locations

Collectionboxesinpostoffices

Kerbsidecollectionboxes

Pick-upserviceforlargemailers

Organization of mail delivery service

Numberofsortingcentres

Numberofroutes

Mail transportation

Typesoftransportationmedia

Numberofmailvehicles

Delivery

Deliverybymailcarrier:numberofcarriers

Deliverytopostofficeboxes: › totalnumberofpostofficeboxes › numberofrentedboxes

Autresmodesdedistribution

Other delivery methods

Totalnumberofpostoffices: › mainpostoffices › branchpostoffices

Numberofpostofficesinurbanareas(areaswithapopulationof over5,000inhabitants)

Numberofpostofficesinruralareas

Numberofareasnotservedbypostoffices

Organization of postal service operations

ANNEX

5-A

327327

2014 2015 2016 2017 2018

Domestic mail volume

Letters

Packets

Parcels

International mail volume

Outbound

Letters

Packets

Parcels

Inbound

Letters

Packets

Parcels

EMS

International

Outbound

Inbound

Domestic

Outbound

Inbound

Fax service

Postalrevenue(inlocalcurrency)

Valueofterminalduescollected(inlocalcurrency)

Numberofcomplaints

Trends in mail volume

ANNEX

5-B

328328

1 Money orders 2014 2015 2016 2017 2018

Domestic service

Numberofmoneyordersissued

Amount

Fees

International(andequivalent)service

Money orders issued

-Number

-Amount

-Fees

Money orders paid

-Number

-Amount

2 Giro service (CCP) 2014 2015 2016 2017 2018

Numberofservicecentres

Numberofaccounts

Customer accounts

-Banks

-Businesses

-Individuals

Assets at 31 December

Customer accounts

-Banks

-Businesses

-Individuals

-Totalassets

Number of transactions

-Deposits

-Withdrawals

Revenue

Feescollectedfromaccountholders

Otherrevenue

Trends in postal financial services

ANNEX

6-A

329329

Aregiroservicescomputerized?

Numberofcountersequippedwithterminalslinkedtopostalgirocentres

2014 2015 2016 2017 2018

Operating expenses for giro centres

Personnel

Otherexpenses

Operatingexpensesforpostoffices

Personnel

Otherexpenses

Aretheseexpensesitemized?

2014 2015 2016 2017 2018

Proceedsfrominvestmentoffundsdeposited ingiroaccounts

Institutioninwhichthesefundsaredepositedortypesofinvestment

Valueoffundsinvestedduringtheyear

Interestratepaid

Valueofincomeforthefiscalyear

2014 2015 2016 2017 2018

Marketshareofgiroservice

Trends in postal financial services

ANNEX

6-A

330330

Bankname

Legalstatus

-Isthesavingsbankanindependentestablishment?

-Isthesavingsbankpartofthepostaloperator?

Areaccountmanagementservicescomputerized?

Numberofwindowsequippedwithterminalslinkedtothesavingscentre

3 Savings bank 2014 2015 2016 2017 2018

Numberofaccountsat31December

Totaldepositsat31December(orforthelastaccountingperiod)¹beforecompounding

Totalcompoundedinterestduetoaccountholdersfortheyear(orthelastaccountingperiod)

Totalnewaccountsfortheyear(orforthelastaccountingperiod)

Totaldeposits(notincludingnewaccounts)

Totalnumberofrepayments,includingfullrepayments

1Specifytheaccountingperiod

Savings bank

ANNEX

6-B

331331

2014 2015 2016 2017 2018

Totalvalueofrepayments,includingfullrepayments

Savingsbankoperatingcosts(excludingpaymentsofinterest)

Savingsbankinternaladministrativecosts: › Personnel › Otherexpenses

Postalserviceadministrativecostsallocabletothesavingsbank:

› Personnel › Otherexpenses

Doesthesavingsbankpaythepostaloperatorforitsservices?

Proceedsfrominvestmentofsavingsbankcapital

Valueofcapitalinvestmentsfortheyear(orfiscalyear)

Interestratepaidontheseinvestments

Valueofreturnsoncapitalinvestmentsforthefiscalyear

Othersavingsbankrevenue

Feescollectedfromdepositors

Miscellaneousrevenue

Nominalinterestratepromisedtoaccountholders(indicatetheadvertisedinterestrateinpercentageterms,describingtheloyaltybonussystem,ifany)

Marketshareofthesavingsbank

Savings bank

ANNEX

6-B

332332

2014 2015 2016 2017 2018

Income

Operating income

› Postage

› Licences

› Terminaldues

› Moneyorderfees

› Otherproducts

Financial income

› Savingsbankrevenue

› Giroservicerevenue

› Otherfinancialincome

› Otherincome

TOTAL

Expenditure

Operatingexpenses

› Procurementsofgoodsandservices

› Transportationcosts

› Telecommunicationscosts

› Staffingcosts

Taxes and fees

Depreciation allowance and reserves

Financial expenses

› Loaninterest

› Interestpaidtosavingsbankdepositors

› Othercosts

TOTAL

Balance

TOTAL

Financial position of the postal service

ANNEX

7-A

333333

2014 2015 2016 2017 2018

Application of funds

Investment

Loanpayments

Changesinworkingcapital

Other

TOTAL

Resources

Operatingincome

Depreciationallowanceandreserves

Cashflow

Otherresources

Long-termdebt

TOTAL

Funds flow

ANNEX

7-B

334334

2014 2015 2016 2017 2018

Assets

Intangiblefixedassets

Plantandequipment

Fixedinvestments

Totalfixedassets(net)

Inventories

Financialclaims

Securitiesandtrustfunds

Liquidassets

Prepaidexpenses

Incomeadjustmentaccounts

Liabilities

Capital and reserves:

› capitalendowment

› reserves

› balancecarriedforward

› annualbalance

› capitalsubsidies

Total capital and reserves

Reserves

Debts:

› financialdebts(loans)

› operatingdebts(suppliers)

› otherdebts

Total debts

Cashinbanks

Deferredincome

TOTAL

Balance sheet

ANNEX

7-C

335335

Debt

Specifythetypeandvalueofshort-andlong-termdebts

Financial claims

Specifythetypeandamountofclaims

ANNEX

7-D

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