March 11, 2010 - Summary Record of Proceedings/Minutes
Federal Advisory Committee on International Postal and Delivery Services
2:00 – 5:00 p.m. on 11 March 2010, American Institute of Architects
1735 New York Avenue, NW, Washington, D.C.
SUMMARY RECORD OF PROCEEDINGS
- Nerissa Cook, Deputy Assistant Secretary of State for International Organization Affairs
- Julie Gianelloni Connor, Director, Office of Global Systems
- Dennis Delehanty, Director for Postal Affairs
- Mike Spates, Senior Advisor, International Postal and Delivery Services
- Devi Bengfort, Intern
- Chris Wood, Office of Global Systems
- Maynard Benjamin, President and CEO, Global Envelope Alliance
- Charles Bravo, President, Bravo Consulting, Inc.
- John G. Callan, Managing Director, Ursa Major Associates, LLC
- Jim Campbell, Attorney (self-employed)
- Gene Columbo, Senior Advisor, Global Postal, Deloitte Consulting
- Jim Conway, Executive Director, Express Delivery and Logistics Association (XLA)
- Michael Coughlin, former Deputy Postmaster General, USPS, and Consultant, Accenture (retired)
- Anthony Gallo, former USPS Manager and PostCom Vice President (retired)
- Sue Presti, Executive Director, International Mailers Advisory Group (IMAG)
- Mike Regan, former Executive Director, International Postal Affairs, USPS (retired)
- Robert Reisner, Consultant, Transformation Strategy
- Brad Smith, Chief International Officer, American Council of Life Insurers
- Paul Smith, Special Counsel, United Parcel Service
- Don Soifer, Executive Vice President, Lexington Institute
- Ann Fisher, Director, Public Affairs and Government Relations, Postal Regulatory Commission
- Bruce Harsh, Division Director, Distribution and Supply Chain, Department of Commerce
- Philip Warker, Chief, Manifest and Conveyance, Office of Field Operations, Department of Homeland Security (Customs and Border Protection)
- Lea Emerson, Executive Director, International Postal Affairs, United States Postal Service
- Daniel Watson, Director, Services Trade Negotiations, Office of the United States Trade Representative
- Gene Del Polito, Executive Director, PostCom
* Committee Member
CHAIRPERSON COOK: Well, good afternoon. My name is Nerissa Cook and I'm Deputy Assistant Secretary of State for International Organization Affairs, and my Bureau covers postal issues at the Department of State, and we're very honored to be here this afternoon and to welcome all of you. I'd especially like to welcome the members of the Committee and welcome the members of the private sector who are here with us today. I'd like to start by letting you all know that we are trying something new with this particular FACA meeting, and that is that we're having it recorded and there will be a transcription of the meeting. That will allow us to have an official record but will also allow us to disseminate it to all of you if interested and more broadly as well. I'd now like to introduce my State Department colleagues who are with me here. Julie Connor is the Director of the Office of Global Systems. Dennis Delehanty, whom I think most of you already know, is our senior advisor on postal issues. Mike Spates is on temporary assignment with us from the U.S. Postal Service and he's been helping not only with the Advisory Committee but also on other UPU issues. We have Chris Wood, who works in the Office of Global Systems and has also helped to put this meeting together, and then also Devi Bengfort, who is an intern working with us in the Office of Global Systems. I'd now like to ask the members of the Committee to introduce himself or herself, and if I could ask you to give your name, your organization and also to let us know whether you are a new member or whether you are a returning member. So why don't we start here.
MR. REISNER: I'm Bob Reisner from Transformation Strategy and a returning member.
MR. COLUMBO: Gene Columbo with Deloitte Consulting and a new member.
MR. CAMPBELL: Jim Campbell. I'm an attorney practicing in Washington and I'm a returning member.
MR. BENJAMIN: Maynard Benjamin, Global Envelope Alliance, returning member.
MR. GALLO: Tony Gallo, retired, Postal Service Manager and PostCom Vice President (retired).
MR. REGAN: Mike Regan, former U.S. Postal Service International Affairs Executive Director, now retired, returning member.
MR. HARSH: Bruce Harsh, Department of Commerce.
MR. COUGHLIN: Mike Coughlin, former USPS, former consultant Accenture (retired, returning member).
MR. WATSON: Daniel Watson, Office of the U.S. Trade Representative
MS. FISHER: Ann Fisher, Postal Regulatory Commission, returning member.
MR. P. SMITH: Paul Smith, United Parcel Service, Special Counsel.
MR. BRAVO: Charlie Bravo, formerly with the U.S. Postal Service, now Bravo Consulting, returning member.
MR. SOIFER: I'm Don Soifer from the Lexington Institute, returning member.
MR. WARKER: I'm Phil Warker with U.S. Customs and Border Protection.
MR. B. SMITH: Brad Smith with American Council of Life Insurance, returning member.
MS. EMERSON: Lea Emerson of the U.S. Postal Service, returning member.
CHAIRPERSON COOK: Are there any other members of the Committee? Okay. Now on behalf of the Department of State, I want to make a few remarks and then we'll get right to our agenda. Apparently the historic statement "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completed of their appointed rounds" didn't apply to this Advisory Committee's previously scheduled February 11 meeting. As I think almost all of you know, we had historic snowstorms back to back and therefore were not able to meet then, but we're very pleased a month later on March 11 to welcome you all here. Continuing on the subject of history, in 1998 when Congress made the State Department the lead agency for U.S. representation at the Universal Postal Union, we started holding public meetings to hear the views of the private sector stakeholders regarding the wide range of UPU issues. It would probably come as a surprise to some of you in this room and certainly across our nation that the UPU, established in 1874, is the second oldest international organization after the International Telecommunication Union, the ITU. In many ways you can argue that the UPU and the work of this Advisory Committee which supports the UPU are more important today to Americans than it was when it was established in 1874. For example, the UPU is the primary international forum for cooperation between postal sector players globally and it helps to ensure a truly universal network of up-to-date products and services. The UPU also fulfills a critical advisory, mediating and liaison role and provides technical assistance where needed. It sets the rules for international mail exchanges and makes recommendations to stimulate growth in mail volumes and improve quality of service for customers. Under the 2006 postal law, the State Department's responsibilities were significantly widened to cover formulation of policy for both public sector and private sector international delivery services. This is done in close coordination with other interested agencies, the Department of Commerce, Customs and Border Protection, the Postal Regulatory Commission, U.S. Postal Service and the U.S. Trade Representative, which are represented here today as members of the committee.
Taking a step back, I want to briefly touch on how your work impacts the economic well-being of Americans and millions of people around the globe. It is no secret that international mail and delivery services play a significant role in the expansion of the global economy. In fact, one could argue that international mail and delivery services are critical components to fueling economic globalization. We know that in the 21st century they play a central role in enhancing prosperity and economic interdependence of nations across the world. We are the beneficiaries of new delivery technologies and policies that have enabled a rapid increase of cross-border movement of goods, services, technology and capital. One of the major roles of the Universal Postal Congress, the supreme authority of the UPU, which now meets every four years, is to integrate new products and services into the international postal network. In this way, services such as express mail, postal parcels, registered letters, international reply coupons and postal money orders have been made available to the great majority of the world's citizens. U.S. policies towards international postal and delivery services are based on two principles. First and foremost, the focus is on what is good in terms of quality, access and price for the U.S. consumer. Second, our policies for international delivery services should neither contradict U.S. Government legislation regarding domestic delivery services nor contravene our international treaty commitments.
The State Department and the Administration greatly appreciate your willingness to serve on this Advisory Committee and to devote your time and energy to making the Committee successful. You are the nation's leading experts in this subject matter, and the American people benefit from your commitment to expertise and leadership on these important issues that impact their lives daily. To that end, your purpose is to advise the State Department and this Administration in determining U.S. foreign policy regarding international postal and delivery services. I want to stress that this is your Committee. You, the members, will set the agenda and drive the work of the Committee and the agendas should reflect your issues and interests. I welcome the seven new members of the Committee and I thank returning members for their participation, and with that, we will now turn to the agenda.
Just a few remarks up front on how we plan to run this meeting. As a guideline, we would ask that presenters keep their remarks to approximately 10 minutes, and this will allow us time for comments and questions following each of the presentations. After each agenda item, we will open the floor to Committee members for their comments and then we will open the floor to the private sector to invite their interventions, which we would ask you to try to keep to around three minutes. So what we'd like to do is for each agenda item to try to keep things to approximately 15 minutes in total. We will also take a break at a logical point in our deliberations. At that point I will need to leave. I've been asked to attend a National Security Council meeting and so I will turn over the chair to Julie Connor. As we move towards the end of our discussions, Dennis Delehanty will summarize State Department follow-on actions as well as assign Committee and Work Group follow-ups. So let us now turn to the first agenda item, and Dennis Delehanty will give us an update on the October and November 2009 UPU Council of Administration.
MR. DELEHANTY: Thanks very much, Nerissa. As has been our practice at earlier meetings, the members wanted to hear an update about what has happened at the previous Council meeting. The last Council meeting of course was in October-November, the Council of Administration. Our practice also is to produce this update in a PowerPoint format so that members have a chance to read the presentation, absorb the information, so I will not need to go into great detail about the content of the presentation that you received over a month ago now because of our delayed February 11th meeting. You'll see on our PowerPoint we have for reference the Council of Administration and the Committee Chairs and Vice Chairs, of course led by Bishar Hussein of Kenya. The major decisions taken in Bern in October at least at the CA level were probably those related to human resources and the confirmation of the creation of what has been called a Reflection Group on Human Resources to be chaired by the United States. There was quite a bit of activity surrounding an appeal by the United Arab Emirates on country classification. There was an important meeting on reform of the Union, a project group responsible for that subject area, progress made in establishing an ethics function, and for the first time, a study on whistle-blowing protection for International Bureau staffers, and confirmation or creation of an Audit Reflection Group to be led by Canada.
Now, the rest of this presentation, I will not go through slide by slide but I'd like to raise certain issues and explain a little bit of the stakes behind the decisions made. Countries have been expressing serious concerns about the way the International Bureau has been managed in recent years and there is a concern about the balance of responsibilities between the International Bureau and the two Councils. So the creation of this Human Resources Reflection Group is not only an effort to sort out questionable personnel practices, favoritism in promotions and nomination of staff, but also to give a better balance to the responsibilities of the member countries, the members of the Councils and the International Bureau. We have 19 members and observers in the Reflection Group, so there's quite a bit of interest. There was quite a bit of drama at the CA Plenary session and lobbying for stopping a proposal that would have combined the human resources function and the finance function at the International Bureau.
You'll see on our next slide the issues that this Reflection Group will take up: promotions, job classification, recruitment, dispute resolution. It is quite a wide range. What we've decided is to take on this list of 15 subjects through teams led by three separate countries and see which of these issues should be handled this year, which can be put off until next year, which will become proposals for the 2012 Doha Congress. But I want to signal that there's more at stake here than just human resources at the International Bureau. There is the question of responsibilities. Again, we have had our first conference call meeting by telephone and the work is progressing.
Concerning UPU reform, there is a project team led by Belgium, but within that project team there's a smaller group that is studying the question of the future mission of the UPU. Into the resolution on this subject adopted at 2008 Geneva Congress, a phrase was inserted that the impact of the new market players on the mission, on our potentially revised mission of the UPU should be studied. It's not clear what the new market players would be. I asked my fellow delegates at UPU. There are two interpretations: “new market players” could refer to new businesses that have come in and can impact international postal and delivery services or they could be existing businesses that because of changing market conditions could have an impact. The idea is to do a study of movement in the sector and come up with a description of the state of regulation and the state of the market that will feed into the work of the Reform of the Union Project Group. There will be a consultant hired for this work and the consultant will be chosen within the coming weeks and a report will go to the next meeting of the Reform of the Union Project Group on April 13th in Bern.
The next slide discusses the major work of the Reform of the Union Project Group, which centers around five organizational models which we've discussed in this Committee at earlier meetings ranging from status quo to two separate organizations along the lines of ICAO and IATA. At the November 2009 meeting, Belgium put forward the idea of a sixth model. The sixth model is a little bit of a mystery but it's supposed to sort of be an amalgamation of the previous five models, so that work is ongoing. Our question is that there's a lack of clarity about what are the governmental/regulatory functions the operational functions of the UPU. We think that the UPU should look seriously into this and come to some conclusion.
The next slide talks about some of the other project groups that met, such as those on Universal Postal Service and Interconnectivity. The latter is the group that handles ETOE issues, which is of interest to the members of this Committee. Sixty-seven counties have replied to a UPU questionnaire on this subject. In the Acts of the Union Project Group we have a proposal by Japan to have a permanent UPU Convention. Then there is the .post top-level domain. The UPU has signed an agreement with ICANN to set out or to confirm the creation of .post top level domain so there are some issues surrounding that subject. This is of great interest to the Consultative Committee and it may be a subject that members of this Committee may want to study in future work.
Regarding country classification I mentioned that United Arab Emirates put forward an appeal. United Arab Emirates was classified by the Geneva Congress as a country that should belong in the UPU Terminal Dues Group 1, and Lea, you might correct me on this. This gets into details which are a bit technical. The main point is that United Arab Emirates should have joined the Group 1, which is a group of industrialized countries, which pays the more or less cost-based terminal dues, put forward an appeal not to rise to Group 1 and was able to garner enough votes to have the appeal passed. We took that as a sign that there's concern among the membership as a whole about the speed in which countries will move from the transitional terminal dues system to the target terminal dues system, which is a goal of the WTO. The idea is to have one single system for all countries worldwide, so that decision was a bit of concern for us.
Sustainable development – there was some activity in preparation for the December 2010 Copenhagen conference on climate change, development cooperation work on integrated postal and development plans. As we mentioned at an earlier meeting, Flori McClung – I think Flori is with us today – chairs a group on this initiative one of the main purposes of which is to gain funding from international lending institutions.
On ethics, whistleblower protection and audit, as I mentioned before, an ethics function was created at the IB and an ethics officer is also the Legal Advisor who is studying how whistle-blowing protection can be established at the International Bureau. Of course, this is also an issue that will be taken up by the Human Resources Reflection Group. And again, Canada will chair the Audit Reflection Group.
I'm almost done here. For strategic planning, we want to insist that the UPU find a way to measure attainment of its strategic goals, the most important of which is to answer the question whether international mail been delivered on time in the destination country. We also want setting the budget of the UPU to be part of the strategic planning function. We want the UPU to ask the member countries about what should be the priorities line by line in the UPU budget, so we'll be pursuing that subject at the forthcoming POC session in the various CA groups that will meet in Bern. We'll be talking about the Strategy Conference in Nairobi, which will be held in September of this year, and we still think that UPU should stick to its core function and not be distracted by, let's say, non-core products and services.
And finally, last November there were meetings of working groups of the Postal Operations Council. For the Quality of Service Fund, which is very important for the developing countries, there is a nine-member Board. We have established annual rotating elections for three of the nine members. The first election will be held in April. On terminal dues, an 88 percent target for quality link to terminal dues was set for 2011. There was also the concept raised of bonus terminal dues payment for exceptional performance. On customs, there were status reports on the work on MEDICI. That's electronic pre-advice – also of interest to this Committee.
So that is my summary as quickly as I could go through this presentation. It gives you an idea of the decisions taken at the CA in November.
CHAIRPERSON COOK: Thank you, Dennis. We'll now open the floor to comments by Committee members, and if I could ask you to give your name and organization for the transcription that's being done, and would you also turn on your mikes when you're speaking because that will also facilitate the recording. Do we have any comments from Committee members? Yes, Daniel.
MR. WATSON: Thank you. Not a comment so much as a question. Dennis, I should probably know this but maybe you can remind me. In terms of this study that's going to be prepared on the UPU mission, has the scope and methodology for that study been established, and in terms of choosing the consultant, who's going to do the study, how much control will we have or how will that process unfold? I'm just thinking back to the study that the UPU conducted on the WTO where we had lots and lots of problems with. I'm wondering if somehow there's a way to ensure that whoever does this study is going to produce a little bit better quality than the study on the WTO.
MR. DELEHANTY: That's actually a very interesting question, and I know you have a very strong interest in the mission of the UPU. What actually happened in Bern was that there was to be a separate effort to have a two-track approach – a study on the impact of the new market players and simultaneously there would be a study on the UPU mission. Very helpfully the delegation of France that said well, wait a minute, why are we studying the mission, why are we doing work on the mission until we see the results of the impact of the new market players? So there will be a two-step approach. What is happening now is there is a document that lays out the terms of reference on the study on new market players, and that's a public document. We can make that available on the State Department website so it is be readily available to everyone. The terms of reference basically say to study the impact of these new market players, which again is not very clearly defined, and the bids have been received and there'll be an initial conference call to select the top listed bidders. That's all I can say at this point. We'll put that document on the terms of reference on the Web.
CHAIRPERSON COOK: Are there other comments or questions from Committee members?
MR. B. SMITH: Thank you. Brad Smith, American Council of Life Insurers. Dennis, if I could ask a follow-up question. Would the scope of this study include looking at some of the recommendations in the U.S. Strategic Plan for the UPU about bringing the financial services technical assistance into compliance with anti-money-laundering guidelines and other international regulatory standards of other specialized agencies?
MR. DELEHANTY: I think that the study could involve financial services. Again, I can publish the terms of reference. I don't know if I should read the terms of reference now but I think that the terms basically talk about identifying new market players, determining their interest regarding the Union's work, and identifying the best possible form within the UPU for dealing with their interests. So I can understand this that it could include financial services.
CHAIRPERSON COOK: Other questions or comments? Then are there any comments or questions from the public? Anyone else on this agenda item? Then we will move to the next agenda item, and I think, Dennis, you were going to say a few words on behalf of Charles Prescott on the November 2009 Consultative Committee meeting.
MR. DELEHANTY: Thanks, Nerissa. Actually unfortunately, Charles isn't with us today. Charles is the Chair of the UPU Consultative Committee. But he produced this document which is a rough outline of the work of the Consultative Committee which includes addressing as a big issue. The Consultative Committee will hold a global addressing summit on April 23. Revenue protection, led by Jean Philippe Ducasse of Pitney Bowes, is probably one of the most tangible work items of the Consultative Committee. Jean-Philippe has been at earlier Advisory Committee meetings. The idea is for the private sector to help countries, particularly developing countries, to protect postal revenue in various ways. And there's work within the Consultative Committee on reform of the Union, strategic planning and sustainability. I might ask if there's any of the members of the Consultative Committee who happened to be at that meeting that would like to add to the outline that Charles has produced for us today.
CHAIRPERSON COOK: Then if there are no further comments on the report itself, are there any questions that Committee members have? And how about from the public? We will then move to our agenda item number 4, which are the reports of the Work Groups, and we will turn first to Work Group 1 and Ann Fisher.
MS. FISHER: Thanks. Our Work Group last met on September 29. I didn't put together a document for the website but I did compile my notes and ran them by our different Work Group members just to basically touch upon what the Work Group discussed September 29, and while not attributing any comments to anyone, I'll just give you a few of the highlights of the discussion.
The Work Group discussed the idea of having a private sector representative serve as a member of the U.S. delegation to the UPU. There was some thought that doing so might put industry in a better position to attend POC meetings. Another subcommittee member pointed out that the law clearly states that agencies are intended to conduct business at the UPU, so industry representation on the delegation may not be possible. A question was raised whether there are any items Work Group 1 members would like to see included as part of the discussion at the UPU. It was also suggested that perhaps all UPU documents should be open for viewing prior to the Council meetings. This would allow FACA members to review in advance and submit their comments to the State Department. There were differing thoughts among the Work Group members as to the extent of current State Department consultation with industry prior to the Council meetings or prior to taking any major steps. There were also comments from members regarding a lack of Consultative Committee member attendance at POC meetings. Many noted that international travel could be, especially right now, a financial burden for many. The idea of tag teaming was suggested to ensure Consultative Committee attendance at POC meetings. There was a question raised as to how other sections within State consult with industry. It was suggested that a better system of consultation may be in place on aviation issues. It was noted, however, that in aviation there are specific statutory requirements for consultation and that aviation usually deals with bilateral rather than multilateral negotiations. Finally, there was some recognition of the resource burden placed upon the State Department and a private sector liaison was suggested as a way to possible ease some of that burden.
Since the September 29th meeting, there has been a suggestion submitted by Jim Conway for discussion of the statutory requirements in the area of postal service competitiveness and international mail products the Postal Accountability and Enhancement Act (PAEA), and I understand you were going to open that up for discussion next.
CHAIRPERSON COOK: Thank you, Ann. Do we have any comments or questions from the other members of the Committee?
MR. CONWAY: Thank you. I'm Jim Conway with XLA Express Delivery and Logistics Association. I'd like to sincerely thank the State Department for giving us this opportunity and particularly to Dennis for listening to us and our argument with great patience. Thank you. You have our document, and rather than go over the document, let me just say that we see international mail as a competitive product of the USPS. We see unfair competitive advantages in several areas: security, unknown shippers, for instance, can put their parcels and pieces on passenger airplanes and our industry cannot; the custom clearances that the USPS enjoys; the ability to send parcels to foreign post offices at UPU rates; the ability to enjoy postal clearance in foreign countries; and the master airway bill system. I'm not going to go into minutiae but our members feel that section 407 of the PAEA gives the State Department the jurisdiction to make sure there is a level competitive playing field, and that's where we want to start the discussion. Thank you.
CHAIRPERSON COOK: Thank you. Other comments or questions? If not, are there members of the public who would like to make a comment or ask a question? We will then move to Work Group 2 and Maynard Benjamin.
MR. BENJAMIN: Thank you, and I was drafted by Charles Prescott a couple of days ago, so if I'm not up on all these issues, please forgive me.
Our Work Group has met once since last fall, and we have four primary areas of interest. Addressing is the most pressing issue we're working on right now because we're very involved in the UPU addressing summit that will be held in April. In fact, Charles Prescott is in Belgium yesterday and today dealing with some of the subject matter of that addressing conference. It's our sense that addressing is a large problem for global mailers right now. It's costing us a lot of money when we have improper addresses, and in some nations it inhibits the effectiveness of delivery services. When you think about it, as we move into more intelligent addressing technologies in the future, you can see a linkage between quality of service measurements and the presence of accurate address data. We're getting slowly involved with quality of service measurement analysis in terms of providing input from stakeholders into the overall processes, but we haven't had much discussion yet about that subject. Reform of the UPU organizational structure is something Charles Prescott is very interested in, and we've started working on that in terms of what role do stakeholders truly have in the future of the UPU. We are also looking at financial services, international financial standards, and where should the UPU be in terms of those subject areas. We've heard some comments here this morning about this subject. Speaking as the Global Envelope Alliance (GEA), we have just developed a new global standard called the GEAI, which is a standard that can be used for cross-border communications and that will be released shortly through UPU as part of the work on improving addressing across the board. So that's pretty much where we are right now. I'd be happy to entertain any questions.
CHAIRPERSON COOK: Thank you. Are there questions from other members of the committee? Yes, Paul.
MR. P. SMITH: Thank you very much. One of the things that we had looked at when the issue of addressing first came up was the role of FACA, its Work Groups and the Consultative Committee on extending the effectiveness of addressing in developing countries. What's the sense you have about how much emphasis will be given to developing new addressing systems or alternatives to new addressing systems? I know there's an interest in using GPS coordinates as opposed to street letter numbers. I know there's a strong emphasis on unaddressed addresses and undeliverable addresses.
MR. BENJAMIN: That's a good question. When you think about it, any mail item can be defined by its shape, its class of service and its weight, and that can be tracked and traced across any border. One of the reasons we developed GEAI was to have the ability to do that in developed nations because the real challenge you have, to use the example just-in-time pharmaceutical distribution, is ensuring you've got the right person at the right place at the right time. So back to the work of Work Group 2, this is one of the subjects we're going to be uniquely discussing at the addressing conference. Juan Ianni, who is known by many in this room, really focuses on developing nations and he thinks there's a value-added strategy for coming up with some sort of a technology that will enable us to cross borders with ease because the real problem is, once you try to use one addressing system over the other, some nations don't have contiguous addressing. In essence, the streets are not logically numbered or they don't use GPS in their addressing system. Only a few places do that now. And so we're looking at technologies that could interrelate with GPS in the future so every location on the earth has a physical place, and if it's an apartment building, it would just be a dash and whatever the apartment number is. But I think we see a great opportunity for cost savings and cost sharing here for postal operators. The technology is new but we're proceeding ahead in my own industry to deploy a new technology on the face of a mail piece or a package that enables cross-border tracking and accomplishing that through the UPU. So there are efforts underway right now.
MR. P. SMITH: Just one other quick follow-up question, somewhat related. Is there also going to be an emphasis on the sustainability and environmental impacts that addressing could have, both for the routing component and the recycling related to addressing an unaddressed envelope?
MR. BENJAMIN: Very much so. Early on in the Consultative Committee’s life, Michael Critelli, who attended one day as a guest a number of years ago, raised the issue of the energy savings from having good addressing across the globe and maybe GPS addressing across the globe, because in many cases, routes are gone over multiple times. As a result, energy is wasted. So there's a sustainability impact of good addressing across the globe, and we're hoping that this gets drawn together in that overall discussion because we have to be more efficient with what we do if we're seeing a future where there is less mail and more packages. The mix will be different as well as the types of documents will be different. Then energy efficiency and efficiency of delivery becomes very important. With greater interrelations between courier companies and posts in the future, you've got to create a symbology that everybody agrees can be used. And so that issue been addressed in a lot of our thinking and I hope again this comes out in the addressing conference in Bern. We're certainly bringing some people to the table that can talk about that authoritatively. I hope that responds to your question.
CHAIRPERSON COOK: Thank you. Other questions or comments from the Committee members? If not, we'll move to the public. Are there any questions or comments that you have? If not, then we will move to Work Group 3, and I believe Don Soifer will give the presentation.
MR. SOIFER: Thanks, and on behalf of my co-chair, Jody Berenblatt, who sends her regards and cannot be with us today, thanks for the opportunity.
Work Group 3 has been charged with considering the implications of changing market conditions for the U.S. position towards the UPU, in particular, the continuing liberalization of postal services, the increasing exposure of international postal services to competition, the new relationships emerging from public and private delivery providers, and the opening of domestic markets to foreign service providers are significant trends to be considered. We have concluded that the marketplace for international postal services is changing so fundamentally that the time has come for a basic restructuring of the UPU. Indeed, the essential principles have already been addressed by the U.S. in laws and prior proposals to the UPU. If you look at the language in our proposal, none of it or very, very little of it is new, and we've taken pains to footnote and indicate the origin of the wording and phrasing and put them in context.
First of all, for the record, let me just mention the Committee members who worked on this: Jody Berenblatt and my co-chair, Jim Campbell, an independent attorney, Brad Smith from the American Council of Life Insurers, Paul Smith from UPS, Nancy Sparks from FedEx Express and Gene Columbo from Deloitte Consulting. As an observer, John Goyer from the Coalition for Service Industries was extremely helpful in working with us and we're grateful for that. The group concluded that what is needed in the run-up to the 2012 UPU Congress is a clear statement of position from the United States that pledges active support for the necessary reforms and the mission, institutional structure and substantive provisions of the UPU. We hope and believe that such a statement of position is likely to be well received by a broad range of American interests and by many members of the UPU. We have with that in mind prepared a draft statement that reflects the Work Group process with the involvement of all members in the group. Starting in October we worked and prepared an initial draft, discussing it and revising it through numerous versions, and then on December 21 we distributed the draft document for review and comment to interagency stakeholders and have done our best to solicit and incorporate comments into our draft prior to this meeting to keep this meeting and discussion as useful as possible. We're grateful for your consideration and responsiveness including many of you who replied over the holiday break and we thought that was going to be the worst of the winter, and boy, were we surprised. Through meetings and phone conversations and various e-mails, Work Group 3 has received substantive comments, particularly from USTR, the Department of Commerce and the Department of Homeland Security, and have revised our draft accordingly.
What we'd like to do now, and I apologize that Jody couldn't be with us, and also Nancy Sparks is on business outside of the country, is if some of the Work Group members, particularly Brad Smith and Jim Campbell, might go into a little bit of further detail. We then very much look forward to receiving substantive comments and hearing your thoughts and as need be revising the draft and hopefully moving ahead with this. So maybe Jim, if I could pass to you to lead the conversation next?
MR. CAMPBELL: Just to explain, what we're thinking about is this. The fact that the markets are changing is obvious. We were concerned about how to translate that into something useful for this group to recommend to the Department of State, and we came up with essentially a two-page statement of position that we would hope the State Department would consider or at least the Committee would consider recommending to the State Department to put before the UPU as a start towards fleshing out a position of the United States in advance of the next Congress. So that's what we're looking for, something simple and practical. And our starting point was really the U.S. proposal back in 1999 which was very much of a position that stated that the world was changing, the markets are changing, and the UPU needs to rethink what they're doing. The U.S. proposal was that the UPU should hold an extraordinary Congress in two years to rethink what the UPU was all about in light of changing marketplaces. So we started with that U.S. proposition. That proposal was not approved by the UPU but it led to the creation of a High-Level Group. The High-Level Group in turn produced a paper outlining five potential models for the UPU of the future. That paper was written in 2000, I think it was. Dennis referenced that paper. It was circulated to this group or to the predecessor of this group back last summer. So we looked at that five models paper as sort of the distillation of the thinking of that high-level group, and then of course we looked at the PAEA in 2006, which in essence is a statement of U.S. international policy.
So drawing on those three documents, exactly as Don said, we tried to carefully map that into some sort of a statement of position that could be set before the UPU moving towards the next Congress, which is two years from now. And what we came up with an eight-point statement which begins on page 8 in the handout, and given the lack of time, let me just go through this very quickly. On page 9 is a preamble saying the world is changing. On page 10 is the first point, which suggests that the U.S. policy really should be that the governmental portion of the UPU, the interested governments, should be at the UPU to promote the exchange of physical documents and parcels. From a governmental standpoint, other types of international commerce are covered by other agencies, but the UPU, from a governmental standpoint, is mainly a matter of promoting and facilitating the exchange of documents and parcels however they are exchanged by whatever types of carriers.
Then the second point is related and argues that from the standpoint of the United States, the governmental mission of the UPU should not be to get into other types of activities, whether it's financial services or environmental issues or trade generally or matters like that. And to the extent that the members of the UPU in their own commercial interest get into such activities, the same rules should apply to them as apply to anyone else. This is in no way to suggest that the current members of the UPU, that is to say the operators, should not get into other activities, only to suggest that the governmental part of the UPU should not follow along and try to support those non-postal activities.
The third point is the obvious follow-on and is closely related to what Dennis mentioned a minute ago, and that is that the UPU needs to do a better job of separating the governmental functions from the operational functions. PAEA Section 407A specifically says that that's the policy of the United States. Numerous reform committees within the UPU over the years have said the same thing. The 2000 paper by the High-Level Group mentioned five possible models, one of which was simply follow the IATA/ICAO model in the aviation industry, that is, have a governmental group on the one side and an operational group on the other. That is certainly something at least in the view of our group that needs to be seriously considered as a future model for the UPU.
The fourth point is simply to separate the finances. Governmental finances should not be used to promote the commercial fortunes of one group of operators, and this in fact follows from the original proposal in 1999, the American proposal.
The fifth issue involves customs treatment. Now, customs is very important. It seems like a minor technical issue in some respects at the UPU, but it is probably the most important barrier to the exchange of international parcels. The PAEA calls for equal customs treatment for all types of competitive parcels so our draft position for the United States says clearly that there should be equal customs treatment. This is not to say that there should not be some sort of simplified customs treatment available for the types of non-commercial parcels that post offices normally carry. Some sort of simplified treatment for such parcels for grandma's birthday cake to her daughter, seems entirely appropriate. It's only that if that birthday cake is carried by a private operator, it should receive the same treatment as if it's carried by the post.
The sixth point is to suggest that there should be rooted in the UPU no preferences for competitors. Now, this again flows straight out of the PAEA and is simply a reflection of sort of the basic principles of PAEA that there should be fair competition in competitive services.
The seventh point deals with international financial regulations. Brad, if you want to – maybe – this is of particular concern to you. You might want to say a word about that one.
MR. B. SMITH: Thank you. I'd be happy to, Jim. Just quickly, as folks may remember from the last several Congresses, despite U.S. objections there was a plan which included in the Congress outcomes that increased the role of the UPU in providing technical assistance to member posts and to help them develop financial services providers under the scope of postal services. We would like that amended, clarified to make sure that those services that are being supported in terms of technical assistance would be done in a manner consistent with international regulatory standards as set by international standard-setting bodies recognized under the G-20 and the Financial Stability Board. Most notably, these include regulatory standards for banking and insurance services but equally importantly, they recognize anti-money-laundering standards under the financial action taskforce which many of the current postal providers which represent the largest financial services in their markets are exempt from under their domestic law.
MR. CAMPBELL: And then finally, our eighth point is more of sort of a technical reservation to say that nothing that we're suggesting by way of the position of the United States is an attempt to infringe upon national sovereignty of any member of the UPU that – we assume the U.S. accepts – we would accept that nothing that we're suggesting would infringe upon the sovereignty of the nations or their right to define or not define universal service or define or not define a postal monopoly. That's up to the national governments.
So, in conclusion, our feeling was simply that this was a clear U.S. statement at this point as the UPU is beginning to think about its future and beginning to prepare for the 2012 conference would be a very helpful step and so we're suggesting that to the full group for consideration. Thank you.
MR. SOIFER: Thanks, Jim and Brad. So we would certainly be open to any questions. We have received written comments from a number of stakeholders and we're grateful for that. There are also a number that we've not heard from and we would like – the Work Group would like to suggest that the broader Committee consider adopting and recommending the resolution and draft statement position, and we would look forward to any discussion or process toward that end.
CHAIRPERSON COOK: Thank you, Don. Comments? Charles.
MR. BRAVO: A couple of questions. One is that the UPU sets standards for moving mail across borders so you're talking about exchange of physical documents but the UPU also sets standards on electronic transmission of messages associated with that, again across borders. So how does that fit into what you're saying on your item one? And the second question, how would you characterize hybrid mail on your item one?
MR. SOIFER: I don't know what the word was but all I was suggesting was, is that Charlie is raising the question which is similar to the question that Dennis raised, which is how do you separate governmental functions from commercial functions.
MR. BRAVO: The question was, governmental/regulatory versus operational. That's different.
MR. SOIFER: Governmental/regulatory versus operational/commercial. How about that? What Charlie is saying is, how do you parse that. Because I think that the answer, Charlie, is that to some degree commercial operators, whether it's the public post or private integrators or anybody else, get together in associations and set standards and nobody would possibly object to that. There may be a role, and there is in some cases a role, for governments to also get involved in the standard-marking process but they generally have a more limited role. So what you would have to think about is, to what extent should the public operators be allowed to set any standards they want, to what extent is it in the governmental interest to put some sort of constraints around that standard setting, something like non-discrimination or something like transparency or whatever. This really requires fleshing out the differences that Dennis has raised between governmental/regulatory versus operational/commercial. But the way we were thinking about it that the governments might have something to say about that but it would probably be limited, and that the operators should be able to set standards as they do now really without unreasonable control from governments. So did that answer your question?
MR. BRAVO: Well, I guess yes and no, but, I mean – so it's unclear as to what the position is on that. You see maybe a limited role, or it needs further definition. I mean, I'm not clear. That's all.
CHAIRPERSON COOK: I believe, Gene, you had a question.
MR. COLUMBO: Yes. Gene Columbo at Deloitte. I'm on Work Group 3, and I was just dwelling on some of the issues that Charlie had mentioned. I did raise some concern about what we were providing in terms of documentation before the document went out on the somewhat restrictive and maybe limiting statements in our subsection one and two. I've been working with Jim over the years on some of these issues and in some previous lives. But my concern was that one of the roles of many postal operators traditionally has been in the financial sector. Gyros, payments are very common throughout the world. And hybrid mail I think was actually invented by the posts. Finland Post was one of the first international data posts and later Poste Italiane. So I think we do have to be a little careful in some of the statements. I agree that the thrust of this is to make sure that there is a proper balance between what governmental roles should be versus the private sector, but at the same time I don't want us to be too limiting, and I did raise an objection and I just felt that we may be a little bit too shortsighted. That was my comment I wanted to make for the record.
CHAIRPERSON COOK: Thank you.
MR. SOIFER: I'd second Gene's comment and make it stronger. You know, if you start with the premise that you guys have started with, which is we have a statement from 1999 and we have another statement from 2000 and we have a law from 2006, the question I'd raise would be, you know, what would stop someone from saying didn't you people learn anything in 2008 and 2009? Today the post is in trouble. So the idea that the premise could be that we have this clear distinction between postal affairs as we define them, not, as Gene points out, as the rest of the postal world defines them, and private affairs and that these two things should be separated because we don't want to allow any governmental influence. You know, it's not clear that there's not a lot left to be played out here with respect to what happens to our post and to the distinctions that we'd make in the future. I'm not trying to make any big policies at this point. You know, I'd say let's be smart about it so that we don't end up in an international forum with somebody saying didn't you guys learn anything about the marketplace.
CHAIRPERSON COOK: Paul.
MR. P. SMITH: Just to follow back on to Charles' question, I think the two issues that you raised, the international data exchange in support of the transfer of letters and packages I think is embraced by this. That's a supplemental support service to ensure the physical movement of those things. Hybrid mail is a separate question that probably does need to be looked at and addressed. I don't think it's clearly addressed in the paper.
CHAIRPERSON COOK: Thank you. Lea.
MS. EMERSON: Yes, Lea Emerson with the U.S. Postal Service. First of all, I apologize. Work Group 3 did try to consult me twice on this, but I was very busy before Christmas trying to finish off the Connect Canada bilateral, our biggest bilateral with lots of regulatory issues. And so I just had some general comments, and I would like to be able to provide some written responses to a lot of the issues that you've addressed here because we do have information but unfortunately I've not been able to provide it all in writing to you.
But my first comment is that the mandate of this Work Group as outlined in the subcommittee composition is called the changing global market for international delivery services. The first point is to look at studies on market trends of international postal and delivery services. The second point concerns plans for USPS and other delivery providers to develop international services. So I think this work really needs to be based more on current market trends and forecasted future trends in order to have a solid basis of information on the market and the market needs and the customer needs in order to set out a path for future policy of the UPU. So for just one example, restricting the mission in the very first item to physical documents and parcels only actually disregards the current market trends and the future forecasts of very steep declines in physical mail. So I believe that we do need to look, within this Work Group, at current market trends, and future forecasts must be taken into account when developing policy for the UPU. The current law also does state that for instance, postal financial services have determined by the Postal Regulatory Commission to be a postal product, and our own current U.S. law states that financial services and money orders, whatever it's called in the law, are definitely a postal service. So in order to be consistent with our law, I think that these sorts of considerations have to be considered by the Work Group.
I just have one final comment, and that is that, you know, last week our Postmaster General and our Board of Governors announced an action plan for the future because the Postal Service is in a serious financial crisis. There's a bold plan called “Ensuring a Viable Postal Service for America”, and there are a number of very good reference documents that we worked on in order to come up with this plan to actually survive into the next decade as our customers move into the electronic word, not the physical document world, so we have to move to answer our customers' needs. If they want to have a digital interface with us over the Internet and mobile phones and such, we need to move into the future into a digital world. So hybrid mail is one example of this. So I can provide more comments in writing to the Work Group. Thank you very much.
CHAIRPERSON COOK: Thank you. Michael.
MR. COUGHLIN: It's an interesting document, an interesting piece of work. I'm kind of curious, Dennis – I don't want to put you on the spot but I will. If something very much like was put forward as a statement of U.S. policy at the next Congress, what do you think the reaction of the Congress generally would be to that statement of policy? I'm talking specifically about things like the redefinition of the role of the UPU to physical documents and parcels. And perhaps some of the stuff related to financial services.
MR. DELEHANTY: Well, maybe I could answer that by raising some of my own questions about this document. I think it's a useful document. I think as the document is written here, it would not receive a welcome reaction. When you go to the UPU, you have to look at these proposals from the perspective mainly of the developing countries that hold the greatest number of votes, and normally the UPU tries to make decisions by consensus. However, those countries that have the votes need to be convinced. I think it's useful to have eight principles or several principles to start out with and work our way towards a possible proposal. But for instance, let’s take the first principle, which is that the UPU's mission should promote the exchange of documents and parcels and promote competition outside reserved areas. One question is how do you align what is our practice in this country under the provisions of the PAEA with the provisions of the UPU Convention, a multilateral treaty? Within the UPU convention, there's no distinction, for example, between market dominant or monopoly and commercial, or what we consider commercial. So I think we need to think that through.
Another question concerns parcels, which used to be in a separate agreement. So many years ago, I think it was 15 years ago, letters and parcels were combined in the Convention. So should they now be separated?
Another principle is UPU's legal mission does not include non-postal activities. Do we know what non-postal activities are? Are we talking about financial services? Are we talking about .post? Are we talking about e-services? What do we mean by non-postal activities? Governmental and operational roles should be separated, and often the ICAO and IATA model is brought up. Terminal dues, is that operational or is that regulatory? It's a little bit of both. Or what parts of it are operational and what parts of it are regulatory? We have this problem now within our own delegation trying to assign responsibilities for terminal dues. In other areas, we have Developmental Cooperation in the Council of Administration. I think at the last meeting we gave you as reference the organizational structures of both Councils. This is germane to this issue. So how do you draw a clean break between what is governmental/regulatory and what is operational? It is not so easy. I think it could be something that both the UPU and this Committee should give some serious consideration to. And then of course, the ICAO/IATA model. Is there anyone here that can tell us what ICAO does that's governmental/regulatory and what IATA does that's operational, or how do you divide the two and how that model would possibly apply to the UPU?
Another issue we have is that the UPU is a very small organization. The airline industry is much larger, so it can afford two organizations. In the UPU, one of the issues we have with the developing countries is that they don't want to pay more money for two organizations. They think that the sector can't support two separate organizations. If you can't have two organizations, how do you make this clean break between these different functions?
I think I'll leave that there for now but I think there needs to be some serious thought about some of the questions raised but this is a very useful process and we should take some position through this process to bring forward to the 2012 Congress.
MR. COUGHLIN: I guess those are the questions where I think my mind is on this thing. As a matter of principle, I kind of like the basic work that was done here because I think we should have some kind of rational kind of disciplined thought process as we approach the Congress on this subject. I guess what I've heard here from the people who represent Work Group 3 and Work Group 1, too, is that you want a level playing field for all the players and not just the public postal operators, and that's fine. I guess where I would get uneasy and I suspect a lot of the rest of the world would get a little uneasy is that leveling the playing field means subjecting the public postal operators to different, more rigorous processes rather than turning it around and allowing the other operators into the process as the posts enjoy or supposedly enjoy today. That I could probably buy into. I don't think the idea of chopping off a public postal operator and subjecting them to many more additional burdens, whether it's customs or any other activity really moves anything forward. On the other hand, as I said, I don't have any problem with expanding it to legitimate competitors. Jim.
MR. CAMPBELL: Let me respond to some of these issues and then we can keep going here, but first I want to make clear, there was a little bit of assumption in your point, Mike, or in some of the other points that we were somehow suggesting that the work of the UPU of an operational nature or commercial nature should not go forward. We're certainly not suggesting that. We're only suggesting that the governmental interest is limited to governmental issues. What are governmental issues? Well, I'll give you some examples. I mean, if you think about things like – I don't know – the GATS kind of agreement, you know they're talking about non-discrimination, they're talking about transparency, they're talking about some sort of independent regulation. It's those kinds of general principles that are governmental and ought to be decided by government. The operators on the other hand, if anything, should be given more freedom to make commercial arrangements, for example, the EMS cooperative. They ought to be given more freedom to make commercially based decisions without having to run the gauntlet of approval of government officials, regulatory authorities and so on. The position that these functions should be separated is something that virtually everybody that's looked at the UPU has come across going back to Mike Regan's Committee when he was a young man back in the '90s and everybody said the same thing. This is hardly original and it is memorialized in 407A, and again, nothing that we're suggesting suggests that the UPU ought not to grow and expand and continue to support the postal services as they expand in new services in response to changes in market conditions. You know, that might be 98% of what UPU does anyway. Nobody's suggesting there should be any interference with that.
As far as Lea's problem that the Postal Service is in trouble, we have to pay attention to that reality. The reality is that international mail that's controlled by the UPU is something like one-quarter of 1 percent of the mail. This is not going to make or break the Postal Service. Most of that mail is the Postal Service's. It's postcards and things like that. So this does not seem to pose a serious issue to the U.S. Postal Service in terms of financial liability but it is a question of clarifying the different roles.
Your point is well taken, Mike, about the problem of making the world more complicated for the postal operators rather than simplifying the world for everybody else. To the extent possible we've tried to take that into account because we certainly accept that there certainly is a case for simplified clearance for non-commercial shipments and somehow this should be worked out in a way that allows current postal operations to continue but is not discriminatory. Now, this is what the U.S. law says. It is the thrust of the new modernized commercial code in Europe, which no one knows how it will be implemented, but at least that's what the new code says, and it is reasonable. If there are security issues or customs issues or revenue issues involved with moving material across borders, then it ought to be administered in some sort of non-discriminatory way. That's all we're saying. We certainly would support some sort of accommodation of the Postal Service’s need for simplified shipments, simplified customs treatment or any other legal matter.
MR. B. SMITH: Madam Chair, can I just to address Lea's comment on the task of the group to look at changing trends? I'd just say in the role of financial services, one fundamental trend that has occurred in our industry in the last 10 years, largely in response to 9/11, has been the need to know your customer and anti-money-laundering regimes on an international basis, and in the last two years in response to the financial crisis has been increased solvency and regulatory coordination on a global basis for systemically significant financial service providers. That's a changing market condition the private sector has to deal with, and I think what we're urging here is that postal financial service providers not be exempt from those same standards, and I would just say I believe this is an Advisory Committee to the U.S. government, and realizing that the State Department is the chief agency to coordinate this process, I would just ask the State Department, since this is being recorded, to take a position that they support the other agencies and the official policy of the U.S. Government on anti-money-laundering and financial stability regimes. One of the reasons for this Advisory Committee is to bring together the interagency process in the context of outside experts from private sector and academia, and at least from this private sector advisor, I'd like to make that recommendation that there be a specific consideration by the interagency process of how the United States can maintain continuity of U.S. policy within the UPU consistent with FATF, IAIS and FSB guidelines.
CHAIRPERSON COOK: Thank you very much. I agree, that is a very important issue and we'll certainly take that under advisement. Thank you. Lea.
MS. EMERSON: Yes, thank you very much. Lea Emerson. As I said, I was not able to provide all my input. Our lawyers in the U.S. Postal Service as well as the subject-matter experts at the Department of Commerce did work very, very hard to ensure that U.S. anti-money laundering and anti-terrorist funding and anti-financial crimes provisions were written into the UPU Postal Payment Services Agreement and its Regulations, so I will be able to provide this information. In all of their work, they were always guided by the FATF, and so this is another piece of information that I can provide in writing after the meeting. Thank you very much.
CHAIRPERSON COOK: Thank you, Lea. Daniel.
MR. WATSON: Thank you. I'm Daniel Watson with Office of U.S. Trade Representative. So this is a surprisingly interesting conversation to me, and a lot of things have been raised. I'd like to just touch on a couple of things. I guess maybe to start with, the issue of the narrowness of the scope of paragraphs 1 and 2 to physical documents or physical delivered items. You know, Lea had talked a little bit about financial services. Money transfers are not the sort of thing that we're concerned about in terms of banking and insurance. But you also mentioned, for example, electronic hybrid mail and electronic services, which goes to the question of what the UPU is for. Is the UPU supposed to be an organization that deals with anything that a postal operator does? Should it have a mission, and those business decisions made by postal operators in order to decide which types of services are the most profitable and the most necessary are not necessarily the work of the UPU? So my thinking would be, once an operator decides that various types of electronic services might be delivered, that's not necessarily the work of the UPU just because a postal operator is doing it. In fact, it goes to this issue of when other services are supplied, they should be subject to the same rules, regulations and international understanding as other providers of those services. Let's put aside the business concerns of USPS for the moment, as important as they are. We do see elsewhere postal operators who have a very anticompetitive effect on a wide range of services that they happen to provide. As a principle, it seems to me that the UPU would be better off sticking to its knitting. It may not be as narrow as defined here, but sticking to those areas that it has expertise in and it has some legitimate regulatory role, and that is different than, for example, going into financial services or electronic transmissions. That's an important distinction. What the UPU takes up as work as an institution is quite different than the sort of services any operator might offer based on business considerations.
Jim had mentioned the GATS at one point, but some of these basic principles, non-discrimination, transparency, these are really basic good governance issues that I think every branch of the U.S. Government supports. So in a sense, the sort of things that he's talking about with the UPU are really no different. But I read this proposal as essentially saying every country has the right to establish universal service, every country has the right to establish a reserved area to supply those universal services, and everything else should be subject to competition, and that is very consistent with our trade agenda. That is very consistent with our trade policy, and I would say actually not in jest that with respect to delivery services in those areas where there are traditional incumbents – that outside of those legitimate spheres of reserve – competition should be the rule, and it is actually U.S. policy in terms of trade and commerce to promote that. And so reading this simply, it seems very consistent with U.S. policy, U.S. law, and with our trade agenda.
Now, getting to the issue of whether it will be warmly welcomed at the UPU is quite a different thing, and that merits some discussion, but I think it is worth considering this in a broader U.S. policy context I am concerned about the UPU going off into any service that a postal operator may take up, that there is some clarity about the scope of the UPU and that it not just be anything that is taken up by postal operators, and that's something we have to talk about in greater detail with respect to the mission. Thanks.
CHAIRPERSON COOK: Thank you. Are there any other comments on the Work Group 3 report from the Committee members? Anthony.
MR. GALLO: With respect to Michael's question and Dennis's very diplomatic response, those of us who worked at the UPU, the practicality of asking the UPU to divide itself into two entities, let's just cut to the chase, is a non-starter. So I think that the suggestions are all excellent and we all pursue a lot of these issues, but to start pursuing that with the first thing to ask the UPU to change its structure, I think you're going to lose all the effort that you put behind all the other issues that you're trying to attempt to help industry be part of the UPU structure. I just think you starting off with asking the organization to reorganize itself will just kill everything else behind it.
CHAIRPERSON COOK: Thank you. Mike, I believe you had a question or comment?
MR. REGAN: More a of comment. Yes, I found this discussion to be quite fruitful, quite frankly, and I think it's maybe good to sort of step back a second and see where we are in the UPU decision-making process and our providing input into that process. It wasn't clear to me if Work Group 3 was proposing a document of U.S. policy to be presented to the next Congress or to guide our work right now in current activities going on in the UPU. For example, we've already heard today that there's a UPU working group on reform looking at the UPU mission and market trends and these things, and so we know that the environment we are operating in. Bob Reisner and Mike and others have asked have we learned nothing since the legislation was adopted in 2006, which is clearly based on material and issues and trends preceding 2006 dating back 10 or more years? It seems to me that what has been presented here by Work Group 3 is perhaps a good starting point for us and for the Department of State to draw up to formulate some principles which could be broadly worded and which could begin to guide our input into the current work going on UPU reform. These ideas of separating our regulatory and governmental issues on the one hand and operational issues on the other hand, it's clearly not new at all, and this work is difficult, it's complex, it's an ongoing thing and in some respects it's a moving target as new issues emerge. So if we have some broadly worded principles we could draw from this and yet would give us some flexibility to take into account what may be emerging as new developments in the marketplace as revealed to us by UPU study, as revealed to us by other documents which the Postal Service has apparently pursued on its own to deal with the current economic crisis it faces. If we leave ourselves open to develop our position further in light of market trends, this could be part of more or less an ongoing discussion here, and as we get closer to the Congress, we might be able to formulate more precisely proposals based on what's coming out of the UPU and its reform activities based on developments which are taking place right now. Jim has referred to customs as a very important area. Well, it is also an area which a lot of work is going on. The U.S. Postal Service and U.S. Customs are collaborating very closely on implementing the PAEA. The UPU is carrying on significant work. Phil Warker is just back from a meeting involving work in the customs area.
So it seems to me there's room for the Work Group to continue its work to try to update some of the picture it has on trends in the marketplace and trends amongst postal operators, and see how that might further refine how it presents its recommendations. So there's an opportunity for us. What I'm trying to say is that we need to distinguish between inputs into the current process where work is already going on UPU reform, work is already going on in customs, what kind if input we want to have there, what kind of input are we having and how this builds toward what positions we might want to take when the next Congress occurs. I hope I've not further confused the situation but anyway, thanks.
CHAIRPERSON COOK: Thank you for that comment. I think we have time for one more, and I believe, Jim.
MR. CONWAY: Thank you. I've been very heartened by this discussion. These comments have been uniformly thoughtful, given me pause for thought, but most of all because we have this discussion about competitive products out there, and I realize when you get to the UPU stage that there's just a plethora of challenges. I realize that, of course. But having this discussion, talking about the international competitive products – and by the way, one area that our members are really seeing growth – and obviously, Ms. Emerson, we've heard your report and we've heard the papers about the business forecast for volume and so forth. But our members notice a significant increase in business-to-consumer international parcels, and based on no real scientific evidence I can give here today, we see that continuing to grow. So that's another reason why again I'm very appreciative of this discussion.
CHAIRPERSON COOK: Thank you. I think there may be one or more comments still left for the committee, but in order to keep this on time, I do feel we need to move forward. What I would ask if you do have comments that you weren't able to make here, could you just submit those by e-mail to Dennis and to Mike and we will add them as an addendum to the written record. It's a very good conversation and thank you to the Committee members for that. Could I ask if any members of the public wish to comment on Work Group 3 report? Yes.
MR. DEL POLITO: Gene Del Polito from the Association for Postal Commerce. It's an interesting discussion but I think that part of the discussion is governed by the belief that we're doing it and we're discussing it and debating it within the context of the belief that the Postal Accountability Act in itself is whole, consistent and without controversy. I think that that would be a fallacy if we were to buy into that particular point of view.
The second thing is that one never really knows what the bounds of the laws are until they are sufficiently tested by the various participants, and neither the Postal Service nor the Postal Regulatory Commission has yet tested the boundaries of how the law would apply to them, let alone the State Department. This is an Advisory Committee that serves the State Department and the State Department's role in terms of international postal affairs. This is a tail. This is a tail that is on the dog. The dog is the State Department. I think the State Department has a brain and it knows how to use it.
What I think the State Department really ought to do in order to be able to temper some of these discussions as we go forward to find out whether or not the time is going to be fruitfully used or simply just wasteful gas bagging, is to answer the question as to whether or not the real limit that is placed within the law would be interpreted by State, and that is, no measure which creates undue or unreasonable preference. Those are words that have broad bounds, and I would like to know how the State Department's lawyers would define the word "unreasonable" within the context of as soon as you leave here and you go over to Bern, you're stepping into an international arena in which you're talking about making decisions with other governments about how they would prefer to operate their governmental services. So I think it would be helpful if the State Department's lawyers were to take a look at the manner in which international postal affairs is actually conducted today and give us an interpretation as to whether or not they believe that what they see is undue or unreasonable.
CHAIRPERSON COOK: Thank you very much for that very frank recommendation, and we will certainly take that back and talk with our lawyers about that. Thank you. Are there any other members of the public who would wish to comment at this point? If not, then I think this is a natural break for us, and we will take a break of 10 minutes. When we resume, Julie Connor will be in the chair. I would like to thank all of you for being here today and for what has been a very frank discussion, and we do appreciate the transparency and the directness of your comments, and I look forward to getting to know each of you more in the coming months. I'd like to thank my team, Julie and Dennis and Mike and Chris and Devi, for putting together this Advisory Committee session, and I also wanted to let you know that we will be organizing a stakeholders' meeting before the next UPU session, and Dennis and Mike will be back to you with further details on that. So thank you, and again, we'll take a 10-minute break and then resume.
[Off the record]
[On the record]
CHAIRPERSON CONNOR: Well, thanks to all of you who have stayed on for the last hour. We do have just one more hour to cover the remaining items on the agenda, so I'd appreciate you if you help me, we'll get through our agenda today. Also, one thing I noticed, because I have been fulfilling the role of observer, is that sometimes our Committee members are forgetting to identify themselves before you begin your remarks, and we here in the room, we can see you, we know who you are, but for the transcriber and for the transcription, it is really important just to state your name before your remarks. Perhaps you can help your neighbors remember that if they forget to say what their name is.
We're up to item five, the U.S. reply to the Belgian questionnaire, and we are going to ask Dennis to brief us on that issue.
MR. DELEHANTY: Thank you very much, Julie. Actually you've all had a chance to look at this document for some time now. We wanted to submit it as a document of reference because it is related to the presentation and the work we just heard of Work Group 3, particularly on the subject of the separation of regulatory and operational functions at the UPU. The focus of the questionnaire, the two main thrusts, was that the Belgians were trying to get an idea from the members of the Reform of the Union Project Group about a possible concept of having separate election procedures – along with the idea of creating a wider separation of governmental and operational functions – for the Postal Operations Council and Council of Administration. You can see from our reply and the replies from other members of the Project Group that there's a real interest in the status quo. In other words, the election procedures, the members of the Councils are elected at Congress and that should continue to be the case.
Another theme in this questionnaire is whether the UPU should have any role in determining the competencies of the delegates that attend UPU meetings, and there again – and this is in line with your eighth principle for Work Group 3 – is the principle of national sovereignty. In other words, the member countries themselves should decide who their representative should be. I should point out in connection with this, one of the difficulties about further dividing the regulators and operators at UPU sessions is that in many cases the operator represents the government. For instance, Canada Post represents the Canadian government at UPU meetings. A similar case applies in Great Britain. Royal Mail represents Great Britain at UPU meetings with minimal participation of the Department of Trade and Industry. In many countries, there's a regulatory agency and of course a postal operator, and in those cases the division of responsibilities is clear. In the United States, of course, we have one agency that leads the delegation with a regulatory agency and the postal operator. So until the sense we have from member countries is that until there's further development within the member countries to separate regulatory and operational functions, the status quo should apply. So basically that would be my description of this document.
CHAIRPERSON CONNOR: Are there any questions or comments from Committee members? I don't see any. How about from the public? Would anybody in the public like to comment? Okay. You know, as at UPU meetings, I think you all should raise your placard like that. It makes us feel a little bit international.
Let's move on to the next agenda item then, agenda item six, status of benchmarking, the U.S. Strategic Plan for UPU, and Lea Emerson is going to present.
MS. EMERSON: Thank you very much, Julie. Yes, the U.S. Government's Strategic Plan covers the period from 2009 to 2012. This has been developed by the State Department with all of the relevant government agency input as well as input from the private sector. It’s quite long and has a number of different areas, but I will just cover some of the U.S. priority areas.
The first tier priority is quality of service, and the goal is to support the deployment and further development of the UPU global monitoring system. The global monitoring system is a worldwide measurement system for letters, and as far as the status of where we are with that, the first phase of the global monitoring system was rolled out last year. It's underway now with 20 postal operators participating and a second phase with a large number of other postal operators that will start later this year. This is important as in the past it's only been the industrialized countries that have been measuring their letter performance, and this will expand this eventually to all postal operators worldwide, and you cannot improve letter service unless you measure it.
The second part of the quality of service goals is to continue efforts to extend and expand pay-for-performance systems for letter post and parcels. Concerning letters, we are working on bringing some of the Global Monitoring System pilot countries into the Quality Link to terminal dues. That means pay-for-performance for terminal dues where you tie the money received to deliver the mail to your quality of service. The current focus is to bring some of the new target countries such as Singapore, Qatar and Netherlands Antilles into letter post pay-for-performance. Concerning parcel pay-for-performance, the UPU parcel rates are based on certain features that need to be supplied in order to receive the full parcel payment rate. Before, they were based on the ability to scan. The countries had to say, yes, we have scanning of parcels – until this year. Now a delivery scan performance target has been set and this target must be met in order to receive the full bonus payment for parcels. Also, response time to customer inquiries has been set.
Another area of quality of service is to develop methodologies for measuring the performance of airlines in handling and transporting dispatches. With regard to this goal, the USPS is working with many other countries, exchanging electronic messages called CARDIT and RESDIT, and we're developing a postal airway bill to improve tracking capabilities within the airline IT networks and to have greater connectivity with the postal networks and the airlines. This should improve our end-to-end transit time of postal dispatches.
The second major first-tier priority deals with economic issues, mainly terminal dues. The first goal is to support fundamental principle of market-oriented, cost-based country-specific terminal dues under which increases in rates are phased in over time or introduced with ample advance notification to avoid sudden and steep postage rate increases for mailers. The second part of the goal of terminal dues is to develop a more accurate linearization methodology that produces terminal dues rates that most closely reflect cost. As far as where we are against this plan, in supporting the new terminal dues system in general, the work is ongoing. In order to develop the future terminal dues system per UPU regulations, all decisions must be made based on economic data available and other data. This data is currently being collected. Worldwide mail flow studies will be conducted this year. Cost questionnaires will be sent out, and tariffs – which is what the UPU calls domestic postage rates – will be gathered this year. A major goal in this cycle is to work on the methodology to have rates that more closely reflect costs. We're currently working on preliminary ideas for a terminal dues methodology including a joint effort by the USPS and the Postal Regulatory Commission to develop a more cost-based system that better accounts for the shape and weight of all three of the letter post formats: letters, flats and small packets. So that is the update on economic issues.
The third major first-tier priority in the U.S. government Strategic Plan deals with customs issues, and I will ask my colleague from U.S. Customs and Border Protection, Phil Warker, to give an update on where we are on the goals concerning customs as he has just returned from a meeting in Brussels of the World Customs Organization-UPU Contact Committee.
There are many other areas, and I will only just touch on one more, and that is under the postal and technical issues. Under the EMS (Express Mail Service) Cooperative, the goals – there are four goals: to ensure tracking capability to be a requirement for EMS Cooperative membership as of January 2009, and this goal has been met. Now you cannot be a member of this cooperative unless you provide tracking. The second goal was to improve overall on-time delivery of all EMS Cooperative members worldwide from 85 to 90 percent by 2012, and I'm happy to report that last year in 2009, we've already met the 2012 goal with a performance improvement of more than three percentage points worldwide. The third goal was to increase the number of administrations that apply EMS pay-for-performance plan from 25 to 125 by 2012, and the current status is, we've increased the number of pay-for-performance participants from 25 to 68, so we're well on our way to the 2012 target. And finally, to increase the number of administrations that transmit electronic information – these are EDI messages called PREDES and RESDES for the preadvice and the receipt of EMS dispatches – from 89 to 140 by 2012. Currently we are well on track to meet this target as it has increased from 89 postal operators to 121 that are providing electronic pre-advice.
And now I would turn to my colleague, Phil Warker from U.S. Customs and Border Protection, to address where we stand with the goals related to customs. Thank you.
MR. WARKER: Thank you, Lea. As you mentioned, my name is Phil Warker and I work for U.S. Customs and Border Protection. I've heard customs mentioned a couple times today, and I'd just like to give kind of a quick overview of what our overall view is on this subject of mail, which is what we do.
I think it is evident to everyone that's listening that you've got a dichotomy. You've got a changing market and a liberalized marketplace, but at the same time, you've got the UPU and you've got universal service obligation that private operators don't have. So we're faced with the question of well, how do we treat the mail, and then you've got the PAEA, of course, that has caused to apply the laws of the U.S. in the same way. So basically we see mail, true mail, as things that are sent from one post to another post from its country of origin, its proper country of origin, i.e., not ETOs. What we don't consider as mail are things like direct entry, or if a postal operator says we want express clearance for this, no. So what we've told USPS and others is that if you want express treatment, you come in under the express procedures. If you want to come in as cargo, do that. So we're only talking about this very limited set of things, and there are a lot of arrangements out there today. We're seeing a lot of things coming in as cargo and then they're dumped in the mail stream. That's fine. When it crosses the border as mail, that's what we're talking about in terms of this EDI work.
As some of you may know, there was a resolution passed in Geneva that called for a greater emphasis on the work to promote EDI in conjunction with the World Customs Organization for mail items, and we've done a good job with that, and I'll go through a bit of what's happening. The main thing for us from a customs standpoint whether or not the products are deemed competitive is to get the most information we can on items, and this has been consistent with our approach to cargo. We want to get data on items in advance, and our Trade Act in 2003 allows us to do that. And we want to get the information from the party that knows about the item and at the earliest point. You've heard things like supply chain security and risk management. We're trying to apply those same principles to mail. So in order to do this, we need to have a mechanism in place. If you think about it, USPS does not really import anything in the true sense. Things are sent to them and they have to deliver them. On the export side, USPS right now is working with us on providing data on exports of express mail and parcels, and they're exceeding U.S. requirements on exports because they give us data on a lot of packages that don't really qualify as being filed with the Department of Commerce as exports. So on the export side, I think we are doing a good job in trying to fulfill PAEA.
On the import side, this is not just up to U.S. Customs and Border Protection. This has to be a worldwide effort because the data has to come from the source. So we've done a couple things. The UPU is modifying their international postal system to allow for customs declaration data to be added, and that system is used by about 150 countries, so we need that in place before we would mandate manifest data. So that's one thing. We also wanted a standard message. Now, we're working, as Lea mentioned, in terms of these EDI messages, on postal airway bills. We're piggybacking our postal messages on that network so that if we say to a country you've got to send this message, we know what it means. And on the customs side, we've mapped that message to the WCO data model three so that if a customs administration wants to accept manifest data, they'll know exactly what message we're talking about. And the idea here is that we need to test these messages and data to make sure they work before we would start to require it. And again, we're still talking about UPU mail and principally express mail and parcel post since those are deemed competitive. The pilots so far have been good. Our outbound pilots have worked fine. The Canadians have been happy with the data they have seen. We are going to start a pilot with Great Britain on Express Mail in the coming weeks, and we anticipate that will go well also.
So that is the status of where we're at. We've tried to take a pragmatic approach to this, considering that we're under a mandate to make this happen. I think that covers it. I'll take any questions. Thanks.
CHAIRPERSON CONNOR: Thank you, Lea. Thank you, Phil. I'd like to open the floor to questions or comments from the Committee members. Yes, go ahead.
NO ID: A simple question, Lea. I remember old numbers but I don't know the current situation. Of the documents and parcels business, the international document and parcel business, the Postal Service is what percent of the market, roughly speaking? It's not the same as it is domestically, it's something smaller but I don't know the number. The United States exchanges documents and parcels with the rest of the world. What percentage of that business is postal service and what percentage is non-postal service, roughly, just roughly?
MS. EMERSON: I don't have the market study data to provide that answer. I can look it up and get back to you. I have the percentage of the overall world postal volume that the U.S. Postal Service total represents. It's about 45 percent. But that's the whole U.S. Postal Service.
NO ID: We're only talking here about the UPU. The Postal Service, the last time I remember, is around 12 percent of international post. The vast domestic market in the United States kind of overstates the issue. It doesn't really address the policy issues that we're talking about here. It’s simple. You understand why in terms of equal application of the law whether it's customs laws or any other laws, it's of some relevance whether the Postal Service is 90 percent of the market or 20 percent of the market, so I was just asking.
CHAIRPERSON CONNOR: Other questions or comments? Yes.
NO ID: I had one, actually a follow-up for Phil. Can you give us an idea of what the timing is? I know USPS is ahead with their e-manifesting work relative to other countries. Where are the others and when would the marketplace see this process being instituted? It's being tested now, correct, on e-manifesting? And what do you think is the timing to go live with an actual system that would begin to apply customs clearance processes to postal shipments?
MR. WARKER: So your question is really when are going to move to an electronic environment in the whole thing. Well, in terms of what I just described in terms of the pilots, we need to get those established to make sure that the data works, that the message sets work and that the UPU's IPS system is also able to capture that data. In terms of timing, I'm reluctant to give a firm date because we've always had the authority to do this with the Trade Act, but the reason we deferred it is that there really wasn't a way to do it and we were focused on cargo and other larger volumes. So it's going to be a rolled-out approach. Different countries are going to have their own times implemented. I think, we may roll it out, the E.U. may roll it out, and China has laws of manifesting. So different countries will have different timetables. And I also think it's going to be rolled out by product, and it might be rolled out by commercial versus non-commercial. There's a lot of different ways to cut it. So we're hoping to see the pilots grow. There are a lot of MEDICI messages out there. Millions of them have been sent already. And if that takes off and we get the critical mass in the MEDICI countries – Great Britain, Germany, France – we get them on board, then I think we'll have the basis to say okay, for Express Mail, for example, we're going to require this data and here's how you're going to do it. What system, what data and what format. So that's our end state, but I don't have a good sense of the timing right now.
NO ID: May I just follow up? On USPS, what is your jurisdiction on the export side? I mean, what is your enforcement level? It seems like I'm thinking of customs basically clearing inbound and therefore we're dependent upon the other countries to come up to speed with the technology. So do you have any obligation to enforce when USPS goes live with this relative to other countries or is that the other customs that does that?
MR. WARKER: Well, we have the same authorities on the export side as we do on the import side. The difference with mail is that there are certain classes that are sealed against inspection up to a pound so we've got that but we can still get a warrant and look at it. But we have the same authorities and we have the same obligations so we reinforce U.S. export laws in the same way by mail as we do for everything else.
CHAIRPERSON CONNOR: Yes, please.
MR. B. SMITH: Thank you, Madam Chair, Brad Smith from the American Council of Life Insurers. If I could just ask, the agenda notes that this agenda item was requested by FACA members, and I'd just like to put that in context and ask for anyone who would have other thoughts on the matter. I think the request actually went to the State Department or to the coordinators of the advisory Council to do a neutral assessment of the status of implementation of the U.S. Strategic Plan and I just would ask to the extent that this report will be circulated in writing for comment and review by other advisory group members. I notice and appreciate the hard work of the U.S. Postal Service in preparing this report. It was given more from the perspective of really the UPU. I mean, the terms used were "we are at this" and "we are pleased to announce." I just would ask, is there an objective review with perhaps a side-by-side or matrix of all of the objectives of the U.S. Strategic Plan nothing any deficiencies and as well as the measures that have been delivered over time? Thank you.
MR. DELEHANTY: Yes, actually, Brad is correct. I think you were the one at our last meeting that asked for this, and it's a good idea actually to ask for this benchmarking of progress against the Strategic Plan, and the answer at the time was, it was a staffing issue at the State Department. However, we'll actually take this subject up from a slightly different angle under agenda item 9, our goals for the upcoming session. In the process of preparing for this meeting, this crystallized our thinking about how we should not only track progress against the Strategic Plan but also report on results of the Councils. Some of you may know that on our website we produce a report after every Council meeting. But we haven't yet actually done sort of a matrix – I think you used that word "matrix" – which would look at the Strategic Plan and present our report that would show progress against each of the items. That's what we're beginning to think of now, having input from all of our delegation whose delegates come from four agencies, normally State, Postal Service, PRC and Customs. We also have Commerce and sometimes USTR. So in the process of preparing this for Advisory Committee meetings, we're thinking of producing a more quantifiable report that would include the results of the Councils that would track our progress. Another point, it might be useful to produce a document that would have clearance of all the agencies that we could post on the web as a result of this meeting that would combine what Lea says with comments from the other agencies so we have the results of what the delegation as a whole considered to be the progress to date.
MR. B. SMITH: Thank you. Again, Brad Smith from the American Council of Life Insurers. If I could just ask, so just to confirm, you're indicating you would support the development of a comprehensive review of the Strategic Plan that would represent not only the achievements but the areas that still need further work, and that would be produced by the interagency progress for consideration and review by members of the Advisory Committee?
MR. DELEHANTY: Yes.
CHAIRPERSON CONNOR: Other questions, comments from Advisory Committee members? Jim.
MR. CAMPBELL: Jim Campbell. I'm sorry, but the comment here just calls to mind a general question. It seems to me it would be useful from the standpoint of the Work Group if they would have the ability to comment on, let's say, major policy matters like the response to the Reform of the Union Project Group. It might be useful to the group to have those kinds of comments ahead of time rather than after the fact, and even access to others' comments – I mean, there were a number of other comments – so the Work Group is a little more involved in the exchange. It's a suggestion to consider. That's all.
CHAIRPERSON CONNOR: If I can just respond to that, we agree with you and we're taking measures to address that. The first measure you'll see that there's an agenda to look forward to the next meeting and it gives FACA members an opportunity to comment. The second thing we're going to do, and Deputy Assistant Secretary Cook announced it, is to organize a stakeholders meeting where again you will have the opportunity to look ahead and to give suggestions and comments in advance of the next UPU meeting.
MR. DELEHANTY: Perhaps if I could add to that. One of the issues we faced, and Ann actually brought it up in her presentation, is the password protection of UPU documents. We have sort of an anomalous situation where members of governmental delegations can access UPU documents, and if you're a member of the Consultative Committee, you can access the documents. So the question I have for this Advisory Committee – and I think I have the answer – is number one, should we take the position that there should not be a password protection on UPU Council documents? Or maybe start with certain documents such as the Council of Administration? That's a question where we would appreciate your advice on. If there is no password protection, than anyone, any member of the public can look at the UPU documents just like the delegates and come forward with their comments, concerns and questions before we go to Bern to attend the Council sessions.
Second, I suppose, an alternative to that would be, for those that do not have a password for UPU documents, perhaps we could just easily make them available. I think that has been done informally in the past. I'm slightly uncomfortable with that approach but I think it could be done. We're planning to have our delegation meeting on April 7. Following that meeting, we want to organize a meeting with stakeholders. Those of you in this room could come and express your concerns. We do not want to make this into a public meeting where this becomes a briefing session where we tell you what's going to happen, because if you have access to the documents, you can raise your concerns yourself. Then we can listen to the concerns of mainly the private sector and bring those ideas forward to our work at the UPU.
CHAIRPERSON CONNOR: Go ahead, Jim.
MR. CAMPBELL: Okay. Jim Campbell. Of course, one way or another I've had access to UPU documents and I have to say that if I weren't able to research the UPU documents, in many cases I would have no idea what's going on. So I do think it would be helpful to the Committee members to have access to the documents. I think that it would be too much at this stage certainly to open all of the UPU documents to the public, to the world generally. I think that's a bit unreasonable. On the other hand, I point out to you that in preparation for the 1999 Beijing Congress, the State Department allowed any American citizen to have access to the UPU documents for the purposes of making comments in advance of the Beijing Congress. That was a pretty broad net and the world didn't come apart. It does seem to me that members of the Committee ought to have a password because that would facilitate the work of the committee, and this also goes to the split between governmental functions on the one hand and operational on the other, which I admit in answer to your comment, Dennis, is not very clear in some cases. But however you draw that distinction, it makes sense that the operational documents ought to be kept confidential or at least the operators involved should be able to keep them confidential as a matter of normal commercial sensitivity. On the other hand, it does not make sense to me that the governmental policy documents should be kept confidential so that this is another, let's say, benefit of some clarity between what's governmental on the one hand and what’s operational on the other.
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MR. DELEHANTY: ... What we've done in our approach to the UPU Nairobi Strategy Conference is to try to steer the UPU towards a more practical approach. At the last conference in Dubai, for example, there was barely a mention of the UPU strategic plan, which at that time was the Bucharest World Postal Strategy. So why do you have a strategy conference if you don't discuss the plan itself? To what extent have the individual member countries and postal administrations attained the stated goals in the plan, for example, delivery on time, where you have measurement of performance of the industrialized countries? If those numbers exist, why don't we look at those numbers or look at really tangible, practical attainments? So we think that if you look at our document on the second page, we have a number of bullets, and we think that the strategy conference should focus on progress on implementation of the Nairobi Postal Strategy. In the last cycle, we tried to produce report cards that would show each member country's attainment of the goals in the strategic plan, and in that exercise we found that the most important goals were on-time delivery of inbound international mail. So we think we should have a real focus on that sort of thing rather than generalized approaches like how many administrations have adopted measurement systems or how many administrations have adopted a plan to improve postal security or how many administrations have adopted national postal legislation to reform their postal systems. We think that there should be an indication of the accountability for each member country, postal operator and regulator. So we're looking for an assessment of trends. You could have external speakers that come in and talk about the real developments in the market, the customer of the future, then look at where the market is going, how member countries have implemented their own strategic plans and see what the anomalies or gaps may be, and then bring forward ideas for the next strategic plan. What we're uncomfortable with is that many UN specialized agencies adopt beautifully drafted strategic plans but then they don't go out and measure to what extent they actually obtain the goals. There are exceptions like the World Health Organization, the International Maritime Organization, and to some extent the UPU in areas like EMS monitoring or UNEX monitoring for the purposes of terminal dues.
So that's our approach. Whether our voice will be heard is another question. The draft program for the conference will be put forward to the Postal Operations Council for review so this will give us a chance as a member of the POC to stress our comments and we'll see what the consensus is on the structure of this conference.
CHAIRPERSON CONNOR: Comments or questions from Committee members? Does anyone in the public wish to make a comment or ask a question? Okay. Let's move on to the next agenda item, U.S. goals for the April 2010 UPU Postal Operations Council, and again, Dennis will present.
MR. DELEHANTY: Yes. Thanks, Julie. Well, I think we've taken up most of this issue in the earlier exchange and Brad's comments. It's getting late in the day and I could add to some of the points that Lea made, but I think perhaps a better approach would be to produce a document as a result of this meeting that would lay out what we consider our goals to be, adding comments made by Lea, comments made by Phil and the comments that I would have on some of the additional points in the Strategic Plan and perhaps use that as a document of reference for the stakeholders meeting that we will hold before the Postal Operations Council. I think that might be the best approach rather than going through the list again and addressing further points or further goals. I think it would be better if we put those down in writing and send them out to you.
CHAIRPERSON CONNOR: Comments or questions? Please, go ahead.
MR. CAMPBELL: Jim Campbell, only to say that, Dennis, it would be helpful in this document if you also lay out the agenda, I mean what the POC is going to consider in addition to tentative U.S. goals so that people can respond to what's on the agenda.
CHAIRPERSON CONNOR: Other comments or questions from Committee members? Okay. Any comments or questions from the public? We're up to agenda item 10 then, comments by the public. Thank you for coming. Let me just say you've been very quiet but thank you for coming. We appreciate it. Point 11 is any other business. Do we have any – please go ahead.
NO ID: If I could just clarify, right before we broke there was sort of a vague discussion of comments for Work Group business being submitted and responded to. Could we just clarify? Is there a deadline for submitting comments by which we can then respond in time for the next meeting? What's the order of business?
CHAIRPERSON CONNOR: There's actually been some discussion on how to move forward with that, but Deputy Assistant Secretary Cook's remark was to make sure that everyone gets a chance to comment and make sure we have abundant comments, not cut off debate because of the time constraints. So I think what we can do is to send out a message to Committee members following this meeting and give you more details on how we would like additional comments or questions to come in.
NO ID: Great. Well, on behalf of the Work Groups, if we could just be sure that we have adequate time to prepare written responses or whatever the course of action is for the next meeting that would be extremely helpful.
CHAIRPERSON CONNOR: Other questions or comments? Before we leave, we would like to review what we believe are some of the action items coming out of this FACA meeting, and Mike Spates is going to give us a summary of notes that he has taken on specific action items.
MR. SPATES: What Julie just mentioned and Nerissa mentioned, is that if any stakeholder had any written comments, please submit them to Dennis and me. We will send out a written request with some formatting that may help in having some kind of consistency in how the comments are submitted. So that's one follow-up item. Dennis mentioned also that Lea was going to provide market trend information to the Committee members, share some interagency agreements. I think you were talking about Canada at the time, some cooperative agreements. Maynard Benjamin had a document he wanted to pass out today on addressing. I suggested to him that rather than pass it out, send us a soft copy, we'll put it on the website, and also send it to the members. The State Department has been asked to take a position to support action on preventing money laundering through any kind of a product involving finances.
MR. B. SMITH: You'll find it in the transcript. I'd just like to add to the money laundering and also international financial services standards.
MR. SPATES: Right. I have that. Financial services.
MR. B. SMITH: Thank you.
MR. SPATES: I think that covered the commitments. Oh, one more. Concerning the request for a comparative report on the progress on the benchmarking of the Strategic Plan, like with any strategic plan, we went through the Transformation Plan of the Postal Service. We laid out what the plan was and laid out next to it the progress against each one of the items. That is my understanding of what is being requested for the Strategic Plan for the UPU. So we'll have something laid out for you. I believe that's it, unless I forgot something, Dennis.
MR. DELEHANTY: Also, we have this question about the U.S. taking the position to open up CA documents to remove the password protection, but not with POC documents. Are we clear on this? Is that the sense of the Advisory Committee?
MR. CAMPBELL: The CA and the POC do not clearly reflect the division of governmental and operational. In the future if that day ever comes, it would make sense to open up one set of documents and not the other, but at the moment since there's no clear distinction, my suggestion was to open up all of the documents but only to Committee members, not to the general public.
MR. DELEHANTY: The other point Gene Del Polito raised was that he wanted to hear from the State Department lawyers an interpretation of the phrase or the provision in the PAEA concerning granting “undue or unreasonable preference” to the Postal Service or private provider of international postal or delivery services or any other person. So that seems to be a task for us to take on. The other point of course is recorded in the transcript. In relation to the U.S. Strategic Plan for the UPU, you want to conduct an exercise and produce a document which describes what the UPU has accomplished in the various priorities in that Strategic Plan in one document. A second task would indicate our specific goals at the POC in relation to the Strategic Plan, and that would be in conjunction with what we hope will be a stakeholders meeting at the State Department which would be open to the members of the Advisory Committee.
CHAIRPERSON CONNOR: I heard one other request from Mike Regan. However, I'm not sure if this is directed to the State Department or to a Work Group, and that was a suggestion that a statement of principles to guide work would be a very useful document to develop and have circulated, approved through the interagency process and so forth.
MR. REGAN: Yes. Thank you. I guess I was thinking it would be more for the State Department to do, drawing upon the results of the conversation and the input from the Work Group and considering a living document, something that would be updated, but I'm not sure now whether this duplicates what you may already be considering for a Strategic Plan for the UPU.
CHAIRPERSON CONNOR: Maybe we can address this at another FACA meeting in the future, because for me a statement of principles is something the State Department works on in other areas but our principles are things like transparency, good governance, et cetera. So those are principles, and we try to enforce those principles no matter what the topic is we're discussing.
MR. REGAN: I was trying to pick up on what had come out of the Work Group 3, and to me, the document was perhaps very specific and very detailed in some of its recommendations, and some of those recommendations therefore generated questions and discussion. I thought one way to embrace the spirit of the document would be to reduce it to some principles which we thought could be carried forward and yet would not tie our hands unduly in light of what might be presented at subsequent meetings about developments in the marketplace, the results of work going on in the UPU on UPU reform, customs and things like that. It seems like we're not ready to be quite as proscriptive as the Work Group 3 document suggests, but maybe Work Group 3 itself could go back and revisit that. So, seemed to me that the document that came out of Work Group 3 was not ready to be endorsed, shall we say. That's all I was trying to suggest.
MR. CAMPBELL: Jim Campbell. If I understand what we decided here is that the next step is that people have been invited to submit comments through the Department of State to Work Group 3. I think Work Group 3 would accept that important points have been raised, ought to be responded in a considered way and then it goes back to the Department of State to consider. If it's taken up at the next FACA meeting, that's fine, or if there's some way to resolve some of these issues without waiting for a FACA meeting, that would be nice because the meetings are rather infrequent. But in any case, I think that the first step is Work Group 3 owes a response back to the whole group. I think that's what goes on next, if I understand.
CHAIRPERSON CONNOR: Other comments, questions? Okay. Then on behalf of the State Department, I would like to thank the Committee members for sharing your time and your expertise with us, giving us your advice, which we do appreciate very much. I would also like to thank the members of the public who came to the meeting today again for your time and for your willingness to be part of this process. This is a process that's continuing. We're discussing now dates for the next FACA meeting, and we hope to see you at that next meeting. Thank you for coming.