High-Level Group on the Future Development of the UPU, July 2001

July 17, 2001

UPU Reform: Openness to the Private Sector

Department of State Report on the Eighth Meeting of the High-Level Group on the Future Development of the Universal Postal Union (UPU), Bern, Switzerland, July 5-6, 2001

Released by the Bureau of International Organization Affairs
July 17, 2001


A two-year study of reform at the Universal Postal Union (UPU) has concluded that a new consultative committee should be created for private-sector postal stakeholders, and that members of this committee should be permitted to observe and participate in the major governing bodies of the UPU. These recommendations will be presented to the UPU Council of Administration (CA) at its meeting in October 2001 for endorsement and implementation. The conclusions were achieved by consensus, but not without considerable struggle by a few countries that continue to oppose opening up the UPU.

The U.S. delegation to this meeting, led by Ambassador E. Michael Southwick, Deputy Assistant Secretary in the Department of State's Bureau of International Organization Affairs, praised the recommendations as making UPU more open and transparent, in line with the openness already existing in virtually the entire UN system. U.S. embassies will be asked at a later stage to make demarches on CA member countries to urge their support of these recommendations at the CA October meeting.


The 1999 UPU Congress in Beijing created this 24-member "High-Level Group (HLG) on the Future Development of the UPU" to study reform. As mandated by the Congress, the HLG was to make recommendations on the future UPU mission, structure, constituency, financing, and decision-making of the UPU and submit recommendations to the CA for eventual adoption by the UPU Congress. The meeting in Bern on July 5-6, 2001, was the last of eight HLG meetings since the Beijing Congress.

The HLG met under chairmanship of Mr. Young-su Kwon, member of the Postal Service Management Board, Ministry of Information and Communications, Korea (Rep). All 24 members of the HLG (except Australia) were represented, as well as four observer countries. The United States was represented by Ambassador Southwick and other officers from the Bureau of International Organization Affairs of the Department of State and the U.S. Mission in Geneva, officers of the U.S. Postal Service and the Postal Rate Commission, and a private-sector advisor from Federal Express. As in the past, the United States was the only HLG member to include representation from the private sector in its delegation.


Recommendations for reform focused on 1) the mission of the UPU; 2) the structure and constituency (including the new "Consultative Committee"); 3) the decision-making process; 4) financing; and 5) implementation.

The HLG endorsed continuing the status of the UPU as an inter-governmental organization where its membership is limited to member countries and does not include private-sector agencies. However, if the CA approves the HLG recommendations, the UPU will be structured around three circles of member interest: 1) government/regulators (CA); 2) operations under the UPU agreements (Postal Operations Council); and 3) wider sector interests (CC). The HLG agreed that the existing Advisory Group should evolve into the Consultative Committee in order to avoid duplication of structure. The members of the CC will have the opportunity to effect the broadest possible participation in the work of the UPU as well as contribute to UPU's technical cooperation activities.

The HLG decided not to recommend the convening of an extraordinary UPU Congress in 2002 to implement its recommendations, given the complexities of gaining approval of such an event from 126 countries, ensuring attendance at a plenipotentiary meeting, and gaining acceptance of these recommendations by a two-thirds majority of the membership. Thus, the recommendations for changes in the UPU regulations to implement these changes will not be considered by a Congress until the next regular session, in Abidjan, Cote d'Ivoire, in 2004. However, UPU staff and a number of HLG members argued that the Council of Administration in October 2001 could itself implement a large percentage of the proposals on a temporary basis, allowing private-sector participation almost immediately. The HLG recommended that the CA implement the proposals to the greatest extent possible.

Observer Status for Postal Stakeholders

The new third circle would consist of key postal stakeholders, including private express couriers, international mailers, equipment manufacturers, and trade unions. This "Consultative Committee" (CC) will have two meetings a year to learn about and give advice on UPU issues. Members of the CC will have observer status in the annual meetings of the Council of Administration (CA) and the Postal Operations Council (POC), as well as in the UPU Congress that meets every five years. In certain circumstances, they will be able to observe and participate in project teams and working groups of the CA and POC.

Membership in the Consultative Committee would be open to umbrella organizations representing groups of stakeholders in various areas, but not to individual companies or agencies. These umbrella associations could be either national or international in scope. One private group objected to the draft document's stipulation that membership required the group to have a "legitimate" interest in the postal sector (what is "legitimate" and who would decide?), and the HLG agreed to change the word to "special" or "particular." The CA will develop specific criteria, review and decide on applications for membership.

As proposed, the CC would include a certain number of UPU member governments as "members" of the CC. The U.S. delegation urged that the HLG decide on the number of government members from the POC and CA, noting that the relatively small number of private-sector members of the CC should not be overwhelmed by government membership, and that in any event all members of the UPU would have the right to attend CC meetings as observers. The U.S. delegation suggested that the number be limited to three member countries, selected from the CA and the POC. The chair said the number tentatively should be six from each (the same as now in the Advisory Group) but the CA could opt to amend the number in October.

Although the recommendations were endorsed by the HLG, there was debate among the members regarding the specific rights and obligations of the CC. Issues of contention included access to UPU documentation; participation in Congress, the CA, and the POC; and financial support for CC activities. The HLG agreed to include language in the document that prevents the CC from having access to confidential documents, prompted by C�te d'Ivoire.

Barbados strongly complained at the end of the meeting that the new Consultative Committee would unbalance the UPU. Members of the CC inevitably would be private-sector organizations from the industrialized world, and this would put developing countries at a disadvantage, Barbados argued. It may be expected that this complaint will be reiterated at the CA meeting in October.

Japan argued strongly to limit situations in which observers would be admitted to UPU meetings. However, the U.S. delegation and the chair firmly made the point that openness would be presumed. The HLG report says that observers may attend "upon request" and that the chair or the bodies concerned could limit observer participation only in "extraordinary circumstances." Even then, any limitation of observers would need to be reported to the Council of Administration for review on a case by case basis. (Note: This is to avoid the situation that occurred at the 1999 Congress, when express couriers were invited to attend and then expelled by committees when they convened in Beijing.)

A Two-Track Solution

The HLG decided to recommend against the convening of an extraordinary Congress in 2002, although the Beijing Congress resolution creating the HLG offered that option. The United States had promoted such a meeting as a means of getting the reform proposals formally approved through amendment of the UPU regulations, a task that can only be carried out by the Congress. However, U.S. delegate Southwick told the HLG that it was clear that this idea had not attracted a lot of support, that it would create serious logistics problems, and that it was probably better to ease into the new reforms.

The U.S. delegation thus endorsed the two-track process that was put forward in a draft report by the UPU staff and endorsed by other HLG members. The recommendations of the HLG for reform will be sent to the CA for its endorsement, and revised regulations implementing those recommendations will be forwarded to the next regular UPU Congress, to be held in Abidjan in 2004. However, the CA will also be requested to implement immediately as many of the reform proposals as possible, and thus part of the reform could be accomplished as early as October 2001. Ambassador Southwick said the USG believed such an evolutionary approach to reform was the sensible course and he would be happy to accept that as an outcome of the HLG deliberations.

A draft resolution for possible adoption by the CA in October will invite the members of the current private-sector Advisory Group to participate in meetings of the CA on the terms set forth in the HLG recommendations, and urge the POC to make the same invitation. In the meantime, the Advisory Group will be urged to reflect on the structure and role of the new Consultative Committee which, when created formally by the next Congress, will replace the Advisory Group. Barbados argued against any action by the CA, contending that the UPU Congress had initiated the reform study and that the results should go to the next Congress. This was seen as an effort to stall any action until at least 2004.

Paying for the New Consultative Committee

There was much debate on financing the costs relating to the Consultative Committee (third circle). Although costs would be minimal -- basically relating to production of documents and interpreters for meetings -- the principle of "full cost recovery" was presented in a UPU staff document.

Some speakers thought the private-sector members of the CC should be required to pay the basic costs of this new forum that provided them entree to the UPU, and that governments should pay nothing extra since they already pay assessments to UPU. But the Netherlands argued that full cost recovery might not be justified, as it is not being applied to the current Advisory Group, the Council of Administration, or the Postal Operations Council. Further, the CC is for the benefit of all UPU member states, not just the private sector. The U.S. delegation reminded the HLG that the goal of the proposal is to promote the widest possible participation and benefits to the UPU and its members. Brazil and Barbados argued that some charitable groups that are members of the CC should not be asked to make a financial contribution. Others argued for tiered membership, in which the financially well-off CC members might contribute more than the less affluent ones.

UPU Director General Thomas Leavey (U.S.) reminded the HLG that the Beijing Congress had asked the Advisory Group to develop a plan to cover its costs. Although the Group had held three meetings, no decision had been made, he said. We cannot postpone this indefinitely. The mandate must be addressed. He suggested that the financing the new Consultative Committee and paying the costs of the Advisory Group could be handled in the same way. (Implicitly, he seemed to be rejecting the idea that these new functions could be handled without private-sector financial contributions.)

Felix Muriel, chairman of the private-sector Advisory Group, discussed the meeting of the group's steering committee in Madrid on July 3, 2001. Muriel said the steering committee had discussed the financing of the third circle, and the private-sector members did not object to making a financial contribution. There was consensus among the group that the third circle should remain independent like other UPU bodies, but should respect the goals and procedures of the UPU. Muriel hoped that the Advisory Group would be able to submit a proposal on the structure and financing of the third circle to the CA at its October session.

In the end, the HLG recommended that CC members should decide this issue for themselves and no formal position was taken. It is likely that this will be debated further at the CA meeting in October.

On other financing issues, the HLG agreed that UPU should retain the current system of mandatory contributions by member countries (based on voluntarily accepted contribution units) and strengthen measures to collect arrears (automatic sanctions). The HLG also agreed that the UPU must find a way to stop the continuing rise in the value of each contribution unit by increasing extrabudgetary revenue, adjusting the criteria for financing new activities, and reducing subsidies given to cooperatives.

A subgroup report recommended that the UPU create new cooperative structures for other activities open to competition. However, Director General Leavey said that although the first two cooperatives had been very successful (telematics and express mail), UPU has no plan to create any more cooperatives. He argued that the cooperatives are sensitive and said UPU must be neutral and not favor public over private operators in a commercial activity. If the UPU formed any new cooperative, he said, it would be because the subject matter would relate to a commercially competitive situation, but it would not be to generate revenue for the UPU.

Operator and Regulator

Germany submitted for HLG consideration two papers relating to UPU terminology, primarily to urge the separation of functions related to postal operators and regulators. Both papers were related to the recent development of alliances between national postal administrations and private operators, alliances that blurred the distinction of who was an "operator." One paper proposed that the title of the Postal "Operations" Council (POC) be changed to the Postal "Operators" Council. Germany argued that this change was needed in order to separate the regulatory and operative tasks and responsibilities in the UPU. After much debate, the proposal was not endorsed by the HLG, but it was agreed that discussion would continue on this topic in future meetings.

Germany's second paper contended that the term "postal administration" is no longer appropriate for use in the UPU. It suggested that the HLG recommend to the CA that it study how the term is used in agreements and everyday practice and produce a new and more appropriate term. In association with this issue, the UPU staff submitted a separate paper discussing the term "public operator" and "private operator" and recommended that the CA carry out a study on the use of these terms. The HLG agreed that the study should continue and both papers should be included in the report to the CA.

Also to be recommended for further reform study under CA authority is a concern about what UPU considers to be excessive legal reservations introduced by UPU member countries when its new convention is adopted every five years. This is likely to be a contentious question.

Revising the Decision-Making Process

The HLG discussed the recasting of the UPU convention and regulations, an effort to streamline the UPU decision-making process and develop a more concise convention. Some of the functions now assigned to the Congress would be transferred to the POC, thus permitting the normally four-week Congress to be shorter and simpler, while facilitating quicker decisions through the POC on key issues.

William Alvis, attorney with the U.S. Postal Service, is heading a working group on the recasting effort. He presented the draft of a revised convention and regulations, and said his group would be distributing the document to all member states shortly for their comments. This ad hoc group is also preparing drafts of revised regulations that would permit implementation of the HLG reform proposals relating to the new Consultative Committee.

The HLG endorsed at this meeting a proposal that, following the Abidjan Congress in 2004, the Congress be held every four years rather than every five. This would permit more rapid decision-making and also ensure that the financial aspects of decisions by the Congress were compatible with the new biennial budgeting system of the UPU.

Mission of the Union

The HLG agreed to change the current mission statement and elaborate on five key themes of the Union. These consist of 1) the interconnection of postal networks to create a single territory; 2) the adoption of common standards; 3) cooperation and interaction between stakeholders; 4) technical cooperation; and 5) customer satisfaction. The new statement will be presented for CA approval in October.

Next Meetings

The next major meeting for the UPU will be the annual session of the Council of Administration (CA), to be held in Bern 18-26 October 2001. The Advisory Group will meet in Geneva on October 11. It is possible that the High Level Group will meet briefly just prior to the CA session, in order to finalize its recommendations, but this is considered unlikely. The mandate of the HLG expires with presentation of its report to CA in October, but the CA may create a new working group to consider further reform issues. The next UPU Congress will be held in Abidjan, C�te d'Ivoire, in 2004.

The Strategic Conference authorized by the Beijing Congress will be held for three days in October 2002 in Geneva. A planning group is working on themes for the meeting. If the HLG had decided to recommend a plenipotentiary meeting in 2002, the session would have been appended to the Strategic Conference, but that is now unnecessary.


The HLG recommendation to allow key postal stakeholders from the private sector to have observer status at meetings of UPU governing bodies was a major initiative of the United States, and the USG is pleased with the result. We intend to follow up with U.S. private agencies interested in the postal market and encourage them to take advantage of this new opportunity.

Because of substantial negative attitudes toward UPU reform in prior HLG meetings, the U.S. delegation was frankly surprised at the ease with which the consensus was achieved. Much credit goes to Jan Wright of the UK, chair of the subgroup on structure, Young-su Kwon, chairman of the full HLG, and to UPU DG Leavey, who in the end we believe saw the merit in making the UPU a more open and transparent organization.

The HLG recommendations will bring UPU into line with most other organizations of the UN system, where most meetings are already open to non-governmental organizations (NGOs) and the private sector. To ensure that the CA in October endorses the results of the HLG study, the Department of State will be seeking demarches in CA member countries shortly before the October session.