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Report 178
3. 3. Universal Postal Union - amendments

Introduction

3.1
This chapter reviews the Acts of the Universal Postal Union adopted by the 26th Congress: Ninth Additional Protocol to the Constitution, First Additional Protocol to the General Regulations, Convention and Final Protocol, and Postal Payment Services Agreement and Final Protocol (the proposed Acts). The proposed Acts were signed in Istanbul on 6 October 2016 and tabled in the Parliament on 29 November 2017.
3.2
The Universal Postal Union (UPU) is a specialised agency of the United Nations with 192 member countries and is the key international agency responsible for formulating and setting the rules for the flow of international mail. It aims to foster the sustainable development of quality, universal, efficient and accessible postal services. The UPU provides information on international postal standards, technical systems, performance measures and service developments to the designated operators of member countries.
3.3
The UPU was established in 1874, and Australia has been a member since 1907. According to the National Interest Analysis (NIA), participation in the UPU allows Australia and Australia Post (as Australia’s designated operator) to have input into the conduct of the UPU’s affairs and the international policy, regulatory and operational frameworks governing the exchange of international mail.
3.4
If taken, the proposed treaty actions will enable Australia to continue to engage in the international postal system at a multilateral level, and leverage the effectiveness of the postal channel as a means of international communication and goods exchange. The NIA suggests that this will enable Australia to promote and safeguard its interests in the UPU and to continue to work to improve the international postal system, for the benefit of Australian consumers and Australia Post.[1]

Overview of proposed treaty action

3.5
The proposed treaty action is the ratification of the amendments to the Constitution of the Universal Postal Union (the Constitution), the General Regulations, the Universal Postal Convention (the Convention), the Final Protocol to the Convention (the Final Protocol), and the Postal Payment Services Agreement and Final Protocol (PPSA).
3.6
The Constitution and General Regulations are continuously in force and were amended by way of the Ninth Additional Protocol to the Constitution and First Additional Protocol to the General Regulations respectively. The NIA notes that technically the Convention, Final Protocol and PPSA are new instruments, as they are adopted afresh, with amendments, at each Congress of the UPU.[2]
3.7
Mr Faris, from the Department of Communications and the Arts, advised the Committee that:
The UPU holds congresses every four years to consider issues facing the international postal system and proposals to amend the acts of the UPU. The proposed treaty action … is the regular ratification of the rules that make the international mail system work, arising from the latest congress.[3]

Reasons to undertake proposed treaty action

3.8
According to the NIA, Australia has routinely ratified the Acts of the UPU adopted by Congresses. Most of the statements adopted are developed by one of both of the UPU’s governing bodies, the Council of Administration (CA) and the Postal Operations Council (POC).[4]
3.9
The NIA states that the proposed Acts reflect incremental refinement and improvement of the regulatory framework and operational terms of the international postal system, and are expected to deliver a net financial benefit to Australia Post over the next four years (2018-2021).[5]
3.10
The NIA cautions that a decision not to ratify the proposed Acts could reflect negatively on Australia’s ongoing commitment to the UPU. It could also create uncertainty as to Australia’s status regarding the Acts of the UPU and participation in the international mail system.[6]

Obligations

3.11
The NIA explains that the UPU is governed by three treaty-level instruments which are binding on all members: the Constitution, the General Regulations and the Convention. The UPU may also establish other treaty-level agreements to regulate services other than those of letter-post and postal parcels between the countries that choose to become parties to them. The PPSA is one such agreement, to which Australia became a Party by acceding to the Acts of the UPU adopted by the 24th Congress, held in 2008. The Convention and PPSA are supplemented by Regulations (adopted and amended by the POC) that further detail and implement their terms.[7]

The Constitution

3.12
The Constitution contains the fundamental rules that provide the legal foundations of the UPU and remains in force indefinitely and is amended by means of an Additional Protocol adopted by a Congress.[8]
3.13
Articles 1 (Scope and objectives of the Union) and 1 bis (Definitions) were amended as part of the work to modernise the UPU’s products and services to meet changing customer needs and in recognition of the increasing significance of the exchange of parcels. The amendments: allow the Acts of the Union to further specify conditions relating to key terms; apply the single postal territory to ‘postal items’ (previously ‘letter-post items'), thereby expanding coverage to parcels; include a definition for ‘postal item’; and expand the definition of ‘postal service’ to include processing of postal items.[9]

The General Regulations

3.14
The General Regulations implement the Constitution and contain provisions for the operation of the UPU’s main bodies, including with regard to composition, functions and meetings. The General Regulations remain in force indefinitely and amendments are effected by an Additional Protocol.[10]
3.15
The Committee notes that all proposed changes (amendments to existing articles and the inclusion of a new article) are clearly described in the NIA. The Committee considers that all are administrative in nature and are not controversial.

The Universal Postal Convention

3.16
The Convention comprises the operational rules applicable to the international postal service. The Convention does not remain indefinitely in force. It expires and is approved afresh by each Congress, taking effect on the date specified by Congress. The approval of the Convention by the 26th Congress therefore constitutes the creation of a new treaty, although the content is the Convention agreed to at the 25th Congress and already in force, as amended by changes agreed to at the 26th Congress.[11]
3.17
The Committee notes that the 26th Congress adopted a recast of the Convention which restructured the Convention articles to modernise, streamline and update its terms.[12] It further observes that the NIA lists in detail the effects of these changes, noting that most arise from amendments to Article 1 (Definitions), which now provides specific definitions of ‘letter-post item’, ‘parcel-post item’, ‘Express Mail Service (EMS) item’, ‘documents’, ‘goods’ and ‘inquiry’. These replace general definitions of ‘postal item’ and ‘parcel’ hence modernising the UPU’s products to better distinguish between letters and parcels.[13]
3.18
The Committee accepts that none of the proposed changes are controversial, and are designed to improve clarity and efficiency.

The Postal Payment Services Agreement

3.19
The PPSA is a treaty that provides the basis for a secure and accessible international postal payment service between designated operators. The PPSA remains in operation until the entry into force of the Acts adopted by the next Congress. The approval of the PPSA by the 26th Congress therefore constitutes the creation of a new treaty, although its content is merely the PPSA already in force, as amended by the 26th Congress. Australia Post does not currently offer services covered by the PPSA, however being a party to the PPSA provides Australia Post with the option to commence offering PPSA services.[14]

Reservations to the Acts of the UPU

3.20
Article 22(1) of the Constitution provides that the Constitution and General Regulations shall not be subject to reservations. Reservations may be made to the Convention or PPSA subject to the terms outlined in Article 39 of the Convention and Article 26 of the PPSA respectively. No reservations to the PPSA were lodged by Australia.[15]
3.21
Australia made 15 reservations to the Convention which are recorded in the Final Protocol to the Convention. Of these, 13 renew existing reservations and two (below) add Australia to reservations lodged by other member countries:
Article III(5) reserves the right of Australia to more fully recover the costs of delivering remail items (mail sent in a third country for the purpose of obtaining cheaper postage rates) rather than being limited to specified bulk mail rates that do not recover costs of delivery
Article XI(2) reserves the right of Australia to collect a processing charge from customers for any items presented to customs authorities.[16]

Implementation

3.22
According to the NIA, the amendments to the Acts of the UPU can be implemented by Australia Post within current legislative authority by adjusting its internal systems and processes. The NIA states that no change to the Australian Postal Corporation Act 1989 or related primary legislation is required.[17]

Financial considerations

3.23
Article 21 of the UPU Constitution provides that member countries choose their contribution class upon joining the UPU and requires member countries to jointly bear the expenses of the UPU. The NIA states that Australia elected to contribute 20 units and provides CHF 0.87 million (approximately AUD 1.2 million) per annum, approximately 2.4 per cent of the total UPU budget of approximately CHF 37.2 million. This amount is paid by Australia Post.[18]
3.24
The NIA notes that, in addition to Australia’s contribution to UPU expenses, Australia Post incurs expenses for a range of mandatory and voluntary participatory activities. Such activities include for example the Telematics Cooperative, the EMS Cooperative, the Direct Mail Advisory Board and fees for publications and English translation services. These expenses amount to around $0.5 million per annum.[19]
3.25
The NIA advises that Australia Post estimates that the changes to terminal dues[20] under articles 28, 29 and 30 of the Convention are expected to result in an annual increase in revenue of approximately AUD $18 million by 2020.[21] These figures are based on internal estimates and are subject to mail volume variations, currency fluctuations and changes in mail profiles. Mr Faris advised the Committee that:
Australia achieved significant improvements to its terminal dues rates and a new remuneration arrangement relating to small packets, resulting in forecast cumulative increased payments to Australia Post of approximately $69 million over the period 2018 to 2021.
3.26
Mr Faris also noted that while this was a good result, further improvements are still being pursued, as Australia Post still makes losses in delivering inbound international mail; in 2016-17, it was around $55 million.[22] Mr Faris outlined the benefits to Australia arising from the agreement at the 26th Congress to develop an integrated product plan (IPP), which will allow postal operators to offer products which are more differentiated and consumer focused:
Critically for Australia, it allows us an opportunity to influence the structure of future remuneration rates for UPU products which more accurately reflect the cost of delivering these items.[23]

Conclusion

3.27
The Committee agrees that ratification of these proposals will support Australia's ongoing participation and leadership in the international mail system and will continue to allow ongoing participation in efforts to shape efficient, effective and responsive rules based international institutions, and recommends that binding treaty action be taken.

Recommendation 1

3.28
The Committee supports the Acts of the Universal Postal Union adopted by the 26th Congress: Ninth Additional Protocol to the Constitution, First Additional Protocol to the General Regulations, Convention and Final Protocol, and Postal Payment Services Agreement and Final Protocol and recommends that binding treaty action be taken.
Hon. Stuart Robert MP
Chair
26 March 2018

[1]     

National Interest Analysis [2017] ATNIA 26 with attachment on consultation Acts of the Universal Postal Union adopted by the 26th Congress: Ninth Additional Protocol to the Constitution, First Additional Protocol to the General Regulations, Convention and Final Protocol, and Postal Payment Services Agreement and Final Protocol (Istanbul, 6 October 2016) [2017] ATNIF16, hereafter referred to as NIA, para 5.

[2]     

NIA, para 1.

[3]     

Mr Christopher Faris, Assistant Secretary, Post and ACMA Branch, Department of Communications and the Arts, Committee Hansard (proof), Canberra, 5 February 2018, p. 1

[4]     

NIA, para 7.

[5]     

NIA, para 8.

[6]     

NIA, para 9.

[7]     

NIA, para 10.

[8]     

NIA, para. 11.

[9]     

NIA, para. 11.

[10]     

NIA, para. 13.

[11]     

NIA, para 23.

[12]     

NIA, para 23.

[13]     

NIA, para 24.

[14]     

NIA, para 40.

[15]     

NIA, para 42.

[16]     

NIA, para 43.

[17]     

NIA, para 44.

[18]     

NIA, para 46.

[19]     

NIA, para 47.

[20]     

Terminal dues is the remuneration to designated postal operators for delivering inbound international letter post mail.

[21]     

NIA, para 48.

[22]     

Mr Faris, Assistant Secretary, Post and ACMA Branch, Department of Communications and the Arts, Committee Hansard (proof), Canberra, 5 February 2018, pp. 1 and 2.

[23]     

Mr Faris, Assistant Secretary, Post and ACMA Branch, Department of Communications and the Arts, Committee Hansard (proof), Canberra, 5 February 2018, p. 2.