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INTRODUCTION

Globalization, Deregulation and Privatization - An Attack on Public Ownership, Services and Jobs

UNI (and its forerunner the CI) - along with other trade union and community bodies throughout the world - have been concerned at the impact of neo-liberal economics on both the world of work and communities generally.

Globalization - with its associated pushes for deregulation and privatization of many former public sector services - is increasingly being seen as an attack on both working conditions and community services. The resulting international competition is challenging existing operators and changing the nature of service industries.

Along with individual governments and private sector think tanks, many international bodies have been associated with these agendas. The International Monetary Fund, the World Bank, the World Trade Organization are increasingly being criticized for their failure to take into account the social impacts of the policies that they promote.

While telecommunications has long been in the forefront of these trends, postal services are now being subject to these deregulatory and privatization trends.

The Need for a UNI Response

It is vital that the UNI and its affiliates throughout the world develop a coherent response to this situation. Increasingly, trade unions throughout the globe are facing these global threats of competition, deregulation and privatization. It is in many cases becoming increasingly difficult to respond to these threats within the confines of national boundaries. The various international bodies are seeking to directly impact on public policies across borders. Unions must look to their common experiences if they are to develop effect responses.

The UNI Edinburgh Resolution

The resolution on Universal Postal Service taken at the recent UNI World Congress held in Edinburgh is an important initial step in this process. It outlines our key concerns with these trends, targeting their commitment to privatization, their potential to undermine universal access to postal services and the threat they pose to jobs.

The UNI APRO World Bank Study

In many respects, it was affiliates in this region through the UNI (or CI) Apro regional body that initiated this concern with globalization, specially the World Bank's role in pushing postal deregulation and privatization.

In February 1999, the CI Apro Postal Committee meeting resolved that a special research study be conducted into the postal agenda of the World Bank, to develop a critique of this agenda and propose an alternative industrial strategy for the sector. This study would outline the vital importance of the public sector in postal service provision and the real impacts of postal deregulation and privatization throughout the region.

An initial working party was established in November 1999 and discussions held at an international regional seminar held in Bangkok Thailand in December 1999. Participants in these discussions included representatives from UNI-Asia Pacific Regional Office (APRO) (Bro Ito), the Australian CEPU (Bro Claven), the Thai Postal and Telecommunications Union (Sr Issarapruk), the Philippines Postal Workers Union (Br Dacasin and Sr Lejos) and the Zenyusei-Japan (Br Tabata).

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The interim Report

The paper before us constitutes the initial Interim Report of this research project. This report is structured as follows:

� Outlines the nature of the postal services sector throughout the world and in the Asia Pacific region;

� Identifies some of the major challenges facing the sector and the push for reform of the sector;

� The role of the World Bank in this process is identified, with particular emphasis on the central role that privatization and private sector participation plays in the World Bank's postal "reform" program;

� Analyses the role of the World Bank in a case study of Sri Lanka, identifying the key lessons of this example;

� Sets out an alternative approach to postal sector reform by reference to the experience of Australia and Japan. This approach balances the need for commercialization, corporatization and profitability, within the context of maintaining public ownership and community service obligations and a commitment to workforce consultation; and,

� In conclusion, the study outlines some key principles for inclusion in a balanced approach to postal reform.

This paper has been prepared by Jim Claven of the Australian Communications Electrical and Plumbing Union (CEPU). He and I would like to acknowledge the assistance of Bro de Silva (UNI-APRO Deputy Secretary), Bro Ito (UNI-APRO Tokyo Office) and Bro Tabata (Zenyusei-Japan).

It is intended that further research will be undertaken to broaden the base of research of the study.

While this study is an interim report, it along with the debate that we will have will I believe form an important part in the development of our response to this common threat.

AN OVERVIEW OF THE NATURE OF THE POSTAL SERVICE

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The Scope of Postal Services

Since there inception postal services have been a vital communications link for all. Across the globe:

� 189 postal administrations provide postal services to the world's nearly 6 billion population;

� Approximately, 415 billion mail items are carried by postal services each year; and,

� These postal administrations employ nearly 6 million postal workers and operate over 770,000 post offices.

Predictions are that this service will continue to be important, with mail volumes expected to increase by at least 2.5% annually over the coming decade.

In our own region, postal services are just as extensive.

� 32 postal administrations delivered nearly 50 billion mail items a year for the regions 3.2 billion population;

� These postal services employed over 2 million employees, representing an average of 1 employee for every 1,500 inhabitants; and,

� While the number of postal employees has marginally declined (16,000) in recent years, the number of permanent post offices has increased by 3,000 to a total of over 40,000 throughout the region (1997 UPU statistics).

Comparisons

A comparison of the situation of postal services reveals that industrialized countries enjoy a higher per capita ratio of postal employees and permanent post offices per inhabitant than developing countries including the Asia Pacific region. Claims of over employment and under utilization of postal services in the Asia Pacific region - made by the World Bank and others - are contradicted by this evidence.

Profitability

The overall financial performance of postal services throughout the world is problematic. While some postal services have reported significant profits (including Australia Post), performance tends to range from marginal profitability at best to up to 30% losses as against revenue for low income countries. It can be anticipated that many Asia Pacific postal services are in the latter category. It should be stressed that loss making postal services are not confined to this region - the Italian postal service recently reported a loss of 12% on revenues.

Regulation, Structure and Ownership

Some international bodies have concluded that the regulation, structure and ownership of postal services throughout the world has remained largely unchanged in recent years compared to other traditional public sectors. The World Bank has described the sector as the "last bastion of the old order".

While postal services have been subject to significant challenges and have changed as a result (and these will be detailed later), it is true that with a number of exceptions the vast majority of the world's postal sector operate (as the OECD conclude):

� as large vertically integrated state-owned enterprises;

� with monopoly or reserved services, with few countries allowing competition in all sectors of the postal industry;

� under largely un-profitable community service obligations and with restrictions on prices.

Yet postal services have and are undergoing increasing change. While only a few countries have fully deregulated their domestic mail services (such as Sweden, NZ, Finland and Argentina) and only two embarked on full privatization (the Netherlands and Germany), postal services have experienced or are experiencing significant change.

Within the context of public ownership and regulation, most postal services in the world and this region have experienced changes to their regulatory environment and structure or such changes are being proposed.

The postal services of most developed countries have or are undergoing this process, with major reviews recommending varying degrees of deregulation (reductions in the reserved service) and corporatization of the postal service organization.

In the Asia pacific region, over 78% of postal services are operated as government departments (or Ministry's), only 40% have separated postal and telecommunications operations and only 40% have a separate entity responsible for regulations.

UNI has reported that the form of government operation in the region vary from an integrated department with no separate legal or financial structures (India and Sri Lanka), a self-sufficient government administrative structure operating financially independent of a department (Japan, Korea and Taiwan), as external government agency or trading fund (Hong Kong) and various forms of public corporation (Australia, NZ, Malaysia, Thailand, the Philippines and Indonesia). This reveals that the fully integrated government department is increasingly not seen as the preferred model of operation throughout the region.

Conclusion

Postal services throughout the world remain a vital component of national economic and social infrastructure. They remain largely public sector bodies operating under regulatory environments providing both community obligations and reserved services. Increasingly however this structure and regulation is changing towards a more commercial and less bureaucratic structure, with more of the postal market being opened to competition.

THE CHALLENGES FACING THE POSTAL SERVICE

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The postal service has never been a static enterprise. However the challenges facing postal services and the pace of change have never been greater. The postal services industry is currently facing a number of challenges to its nature, structure and organization. These are:

� New Technology;
� Pressures to attain Profitability.
� Achieving Universal Service.
� Commercialization and Corporatization.
� Global Competition.
� Employment and Unionization Impacts of Global Competition.
� The International Agenda for Postal Reform.
� Changes to the Structure and Operations of the Public Postal Services.

New Technology

The postal sector in all countries is facing the increasing threat of product substitution as a result of the on-going revolution in communications. Electronic communications are playing an increasingly role in business, with e-mail and e-commerce posing both threats and opportunities for postal services. International predictions for both the developed and developing world are that the expansion of electronic communications will accelerate in coming years. A wide range of postal operators have met this challenge by providing these services themselves (from Australia Post, Dutch TPG, UK Post, Deutsche Post, La Poste, Canada Post, NZ Post and Sri Lanka Post).

Profitability

The overall profitability of postal services across the globe is problematic. The World Bank has reported that while postal services in high income countries tend to break even, middle and low income countries support loss making services, with poor income countries losing 30% on sales each year. This problem will be made worse in future with the advent of increased competition. These competitive pressures will squeeze existing margins by reducing the existing wide discrepancy in basic postal charges. Refer to Table 1.

[TABLE 1]

Universal Service

Postal services pride themselves on their ability to provide universal service. Yet while industrialized countries have achieved this, postal services in many low income countries are unable to do this, with only 66% of their populations being estimated to have access to postal services. The postal services in many developing countries face the challenge to realize universal service.

Commercialization and Corporatization

The trend towards privatization and free market approaches has increasingly put pressure on postal services to adopt a more commercial approach to the postal service operations. In this context postal uses are seen as customers whose changing needs must be accommodated and met by the postal service. The focus on customer service is seen as an imperative to retain or gain market share and to gain profitability.

This commercial imperative is considered to require a less bureaucratic and more market driven approach by management and staff, with corporatization being considered the most appropriate public sector model to support this commercial imperative. A recent OECD study has argued that corporatization and commercialization have resulted in improvements in profitability, service quality, productivity and efficiency.

Global Competition

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Recent years have witnessed a major increase in global competition within the postal industry. This has been assisted by increasing deregulation, the granting of more commercial freedom to existing national postal operators and push to operate on a more commercial basis.

Traditionally global competition in postal services has been confined to the small number of private sector multinational courier and parcel delivery companies (such as TNT, DHL, UPS and FedEx). However many former national postal operators are emerging as the major players in international postal competition.

There are two ways in which these operators have transformed themselves into global competitors:

� Owner Operators. A number of national postal operators have sought to directly compete for postal services - often beyond their domestic markets - by primarily acquiring private parcel delivery, courier, express and direct mail companies (such as Deutsche Post, Dutch TPG, UK Post); and,

� Consultants. Others have sought to expand their operations globally by providing their expertise and services to other postal administrations or governments on a consultancy basis (such as NZ and Canada Post).

The interim Report deals with many of these developments in some detail. The extent of these operations is revealed in Table 2.

[TABLE 2]

The effect of these changes is that domestic postal service are or will in the future increasingly face competition from overseas based postal operators, thereby adding a new dimension to competitive pressures on postal services.

Example: Deutsche Post

As an example of the change in national postal operators, I will detail the extraordinary transformation of Deutsche Post in recent years. Table 3 details some of the recent acquisitions of Deutsche Post.

[TABLE 3]

As you can see from this Table, Deutsche Post has acquired a whole range of private postal companies across the globe. This Table details some of the major purchases in Europe and the US. but Deutsche Post has also entered our own region. They have made the first steps to enter domestic markets. In Australia, Deutsche Post's local arm - Deutsche Post Global recently lobbied the Federal Parliament in support of the government's postal deregulation plans. It has announced its intention to enter the postal industry in Australia.

Deutsche Post has therefore become a major player in the increasing globalisation of postal services across the broad spectrum of the new and burgeoning postal industry. Beyond Europe, Deutsche Post's purchase of Danzas in March 1999, has made Deutsche Post the world's no. 1 freight forwarding company. It has been transformed in recent years from a post office into a large and diverse global supply change company operating throughout the world but with a firm base in Europe.

Conclusion

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Clearly, these developments will add another dimension to the challenges facing postal services in this region and across the globe. The effect of this has been predicted to lead to a reduction in the number of postal operators. In the words of the Managing Director of NZ Post:

"Post's will fail, disappear, fall by the wayside, be bought out, split up and sold. Ten years from now, maybe even sooner, the world will be dominated by perhaps 10 or 12 super postal companies."

Employment and Unionization Impacts of Global Competition

Increased global competition, along with the other challenges faced by postal services, is likely to produce negative effects on postal sector employment and unionization.

Competition and deregulation have contributed to a major drop in world-wide postal employment. In Germany alone over 140,000 postal jobs have been lost since these measures began in 1994. UNI estimate that EU postal deregulation plans will lead to the loss of a further 500,000 postal jobs. While these losses are assisted by the introduction of new technology (such as new sorting technologies), postal operators are actively reducing employment through such measures as contracting out of retail functions. Where Germany has closed over 50% of its postal outlets since 1994 (with other countries such as the Netherlands following suit), Dutch TPG, NZ Post and Australia Post have opted for a contracting out model.

This reduction in employment directly effects the overall level of unionization in the sector as public postal providers tend to be highly unionized. Conversely, both the private sector logistic companies recently acquired by postal operators and the new hybrid electronic services are traditionally associated with low levels of unionization. These have the potential to place pressure on public operators to lower conditions to match those of the private sector.

Postal sector unions and their members will be increasingly threatened by job losses and attacks on working conditions, as well as facing the challenge of unionizing the private sector.

The International Agenda for Postal Reform

It is also important to recognize that many of these challenges are generated by an international push for privatization and deregulation. While this emerged in the 1980's as a ideological commitment to privatization and free market approaches in the US and the UK, this push has become to a large extent the economic orthodoxy throughout the developed and developing world.

Under this guise a whole range of former government services - from telecommunications, water, energy and community services - have been privatized or contracted out on the basis that private sector provision is more efficient. Attention is now being turned to postal services.

Importantly, a whole range of intergovernmental bodies continue to push this policy agenda across the globe. For example, the UPU, the European Union, the OECD, the World Trade Organization and the World Bank are all associated with promoting deregulation and private sector provision of postal services. The various policies of these bodies are detailed in the Interim Report.

The important point is that increasingly the push for postal deregulation and privatization is shifting from the domestic environment to the international environment. It will not be enough to defeat domestic campaigns in favour of postal deregulation because the pressure will offshore. For example, the Canadian Postal Workers Union CUPW - having defeated domestic proposals for deregulation - are highlighting the need to pressure domestic governments not to implement the WTO's new General Agreement on Trade in Services GATS with regard to postal services. The challenge to postal services is therefore no longer a merely domestic one.

THE WORLD BANK POSTAL REFORM PROGRAM

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The World Bank is a key economic player in the economies of developing nations. It's principal financial lending facility has given it enormous power to influence and direct government's to adopt its neo-liberal economic agenda, including market liberalization and large scale privatization's.

While its charter commits the bank to reduce world poverty through stimulating economic development, studies reveal that its conservative economic approach has failed. Nonetheless the World Bank remains committed to introducing this approach to the developing world's postal sector.

While this is ostensibly directed at creating profitable and modernized postal services, the clear preference of the World Bank is to encourage deregulation, private sector participation and ultimately privatization in the postal sectors of these developing countries.

The World Bank's Postal Reform Program

The World bank has stated that it has embarked on its postal reform program at the instigation of the UPU and with the aim of assisting postal services meet the challenges facing them, consistent with World Bank prescriptions.

As the joint arms of the United Nations - one the international postal regulatory forum and the other the major financial lending agency for the developing world - constitute a powerful alliance promoting change.

The World Bank reform program emerged following the release in 1996 of its major joint study on postal sector reform, entitled Redirecting Mail.

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The reform program promoted by the World Bank encompasses regulatory reform, structural and legal reform, enterprise reform and the effect of current technological developments. The stated objectives of the World Bank's postal sector reform are:
� Universal Service. Establish a low cost universal postal service that provides a solid communications medium and link to all citizens;
� Financial Services. Create a convenient means of savings mobilization, and a payments and funds transfer system for the entire country through the postal network; and,
� Commercialization and Profitability. Eliminate government subsidies and develop postal service into a commercially viable entity.

The World Bank has implemented this program by assisting developing countries in designing and implementing postal sector reform programs to achieve the above basic objectives. Assistance has included technical advice and the provision of financial assistance. Over the past few years, 30 countries have received technical assistance and investment funds from the Bank for postal reform in areas such as:

� Policy reform: Developing an effective policy framework for creating efficiency and enhancing effectiveness in the sector;
� Legal and regulatory reform: Establishing a legal and regulatory framework for the postal sector that facilitates its development and financial self-sufficiency, while ensuring monopoly privileges are not abused;
� Capacity development and training: Improving the institutional capacity of postal management and staff, as well as regulators, to ensure the postal service is prepared to meet the challenges of a rapidly developing communications industry;
� Private sector participation: Introducing private sector partnerships to expand into new products or service areas and bring in specialized management expertise and investment capital;
� Selective investments: Providing investments for operational equipment, network rehabilitation, service expansion, etc.;
� Market repositioning: Establishing the postal service as a high quality, efficient provider of market-oriented services, including mail service, financial services, commercial communications services (such as e-mail, fax and Internet), and other value-added services (such as distance-based learning); and,
� Introduction of new technology: Introducing technology to improve operational efficiency and quality of service.

The World Bank as one of the chief international financial agencies for developing countries has played a critical role in assisting the actual process of postal reform in these countries. The UPU has admitted that this has been crucial to convincing governments in the Asia Pacific region to adopt a commercial approach to their postal services.

One of the major interventions by the World Bank in our own region has been Sri Lanka. This experience is detailed within the Interim Report. An important aspect of this experience was the failure of the World Bank or the government to initiate consultation with employees and their union over the major changes being proposed. Only through union action was any form of consultation undertaken.

Trade Union Concerns

The World Bank argues that its reform program recognizes the importance of access to postal service to economic and social development. It states that one of the aims of its postal "reform" is the modernization of the postal service in developing countries to ensure that all inhabitants have access to postal services.

In this regard, the World Bank argues that a commercial focus, improved financial performance and embracing new technology and services (such as electronic communications mechanisms) will deliver important benefits to the postal services and communities of the developing world.

Many of these objectives are laudable. A commercial focus and the embracing of new technologies and services are important deliverers of financial profitability and universal service, thereby assisting economic and social development. The World Bank's claims that it is merely encouraging developing countries to "take a fresh look at how the sector should be organized and the systems engineered" sound innocuous enough.

However the World Bank's program combines these aims with other prescriptions which are of serious concern to all who support the role of public ownership and community service obligations, as well as opposition to job losses.

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Therefore, the key concerns with the stated World Bank postal reform program are:
� Reductions (or abolition) in the reserved service or monopoly;
� Privatization or significant private sector participation in the postal service; and,
� Employment losses from existing postal providers.

The World Bank's view on these issues is reflected in the statement by its chief advocate for postal reform that:

"In fact, government ownership and control, and wide monopoly, by and large have not served the sector well in many countries."

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Example: Privatization

The union movement is under no illusions that the World Bank's postal reform program is restricted merely to the publication of studies and offering words of encouragement to governments. Since the establishment of its relationship with the UPU, the World Bank has been actively promoting its program of postal sector "reform" with an emphasis on encouraging both private participation in national postal services (via contracts) or outright privatization.

The central role of privatization in the World Bank's program is exposed in its various publications supporting its postal sector reform program. For example, one of its publications describing the state of play of its reform program is entitled - "Postal Privatization Takes Off". Indeed the World Bank's interest in postal sector reform was initiated by its Privatization Services Group and who was awarded the chief credit for its postal sector study.

Currently, the World Bank is supporting postal reform programs in 30 countries. The World Bank concedes that most of these projects are concerned with "encouraging private sector participation in the management and operations of postal services", as well as the provision of investment financing and support for market-repositioning efforts. The privatization of postal services is seen as a continuation of previous programs to privatize the telecommunications industry in these countries.

Some of these programs for which the World Bank is providing assistance involve partnership agreements between postal administrations and the private sector to expand into new product or service areas, such as financial services, using the specialized knowledge, industry reputation and investment capital of the private sector. The extent to which the World Bank is encouraging privatization is seen from the following examples:

� Philippines. The World Bank is "assisting" the Philippines government in developing an "effective approach" for introducing private participation in the national postal service, as well as the postal savings bank;

� Trinidad and Tobago. The World Bank has "assisted" the government to transform the postal department into a corporation, with a competitively recruited private operator (New Zealand Post) to take over the management and operation of its service. The legislative basis of this change also calls for major World Bank financed investments in the postal service and reform of the law regulating postal services; and,

� Argentina. The World Bank's financing arms in Latin America are providing a financial package of $285 million (US) to a private sector postal operator, Correo Argentino S.A., to modernize its postal network and operations. The financial package includes the Bank holding a $12 million equity and quasi-equity stake in Correo Argentino. In 1997 this private operator (which is a consortium consisting of an engineering and construction company, a private bank and the British Post Office, as technical adviser) has been awarded a thirty year, $3.1 billion (US) contract or concession to use the 6,000 Argentine postal outlets to provide retail banking, advanced communications and other value added products and services.

These examples expose the World Bank as being an agent of privatization of the postal service. The Bank has not merely provide assistance (both technical and financial) to encourage national postal administrations to modernize and become profitable. The Bank has actively encouraged - including through the granting of financial assistance and taking equity in operations - the establishment of private sector operators with the aim of their taking over key areas of the existing or project postal industry.

THE ALTERNATIVE - A COOPERATIVE APPROACH TO CREATING PROFITABLE PUBLIC SECTOR POSTAL SERVICES

To illustrate a trade union alternative approach to reform, the Interim Report highlights two examples of alternative approaches to postal sector reform in the Asia Pacific region - Australia and Japan.

In both countries, national governments have embarked on programs of postal reform which have been consistent with the direction taken by the World Bank

However these examples have been selected on the basis that the trade union movement in each country was able to exert considerable influence over the direction of postal reform in each country. In this way, the outcome of postal reform in these countries has been the retention of public sector postal services, operating in a more commercial environment. The latter includes the need for efficiency improvements and financial profitability, as well as commercial and customer focus. This is considered an alternative and more balanced approach to postal reform than that encouraged by the World Bank in many developing countries.

These examples highlight the need to maintain the role of public sector ownership in the postal service, in the context of a continuing sufficient level of reserved service, guaranteeing universal service and commercial profitability. They demonstrate the need for postal unions to enter the debate over postal reform and to play a positive role. They also demonstrate the ability of postal unions to defeat radical proposals promoting effective privatization or full deregulation.

It is stressed that their are many other successful examples from the postal sector (such as Canada and the UK for example). I will discuss the Australian example.

Australia Post

Australia Post is Australia's national postal administration. For the past twenty-five years, Australia Post has been subject to major change in terms of its organizational structure, legal and regulatory framework and commercial direction. These changes encompassed consideration of similar options as those currently proposed by the World Bank - corporatization, commercialization and varying levels of deregulation. It has not to date involved formal privatization, although there have been changes to service delivery that have involved the inclusion of privately-owned operations within the postal network. These proposals were developed as part of domestic political debates to encourage a more commercial, technologically innovative and competitive environment for Australia Post.

The critical period has been the period from 1989 which saw the introduction of corporatization, commercialization and reductions in the legislative monopoly. Partly a response to poor industrial relations, labour relations were a key component of this organizational change process, with joint union-management consultation at a premium. Introduced in a cooperative industrial relations environment and under a period of Labor government, these changes not only delivered record profitability and productivity levels for the corporation but substantial income and other benefits for the workforce.

However since 1996 and the election of a conservative government, Australia Post has been subject to a major policy review directed at increasing the level of competition in Australia's postal sector. While direct privatization was excluded from the review process, the changes were consistent with the direction of the World Bank reform program in that they recommended effective full deregulation and extensive private sector participation in the Australian postal service through a liberal access regime.

However, this change process lacked any real community consultation process and no workforce consultation. The CEPU conducted a major campaign to mobilize public opposition to these deregulation proposals. This campaign involved a major research effort, public submissions, community campaigning and political lobbying. It is anticipated that the campaign has been successful in gaining sufficient public and political support to force the total rejection of this legislation by the Australian Parliament.

The lessons from the Australian example are that legitimate postal reform must balance the need for profitability with the vital community service obligations of the national postal service. It also re-inforces the need for effective community and workforce consultation and endorsement of the changes proposed. With the exception of the abortive conservative government proposals, the existing regulatory and organizational arrangements of Australia Post have met this criteria.

The Australian experience demonstrates that trade union's are not in a position to halt moves towards improving the profitability of postal administrations. The globalization of postal markets and international pressures will only strengthen this. However improved profitability and service can be a invaluable tool in defeating radical moves to privatize the postal service. Union members expect their union to play a constructive role with a cooperative management in achieving this.

The challenge for the union movement is to minimize the negatives effects of change and to direct management down the path of constructive consultation with their union and its members. This process allows union's to directly influence the nature and implementation of change. Not only can this ensure tangible benefits to our members (such as improved wages and conditions, job security, as well as access to training) but it allows unions to stop moves towards full privatization of postal services.

The World Bank itself has felt compelled to praise the Australian example and identified it as a model for other postal administrations. They concede that the core of this lesson is the importance of employee participation and consultation. Thus an appreciation of the initial Australian postal reform experience (which occurred under a Labor government) must encompass recognition of its commitment to public ownership, improved employment conditions and workplace consultation as well as commercialization and profitability. Trade union support for the Australian example was and remains dependent on management and government commitment to this balance.

CONCLUSIONS - THE TRADE UNION RESPONSE TO POSTAL DEVELOPMENTS

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Observations

The Report before you makes a number of key observations from its review of the current status of postal services throughout the globe and the challenges they face - including from the World Bank.

There are three major observations:
� Postal services are a vital public communications service;
� The Challenges facing the Future of Postal Services
� The Role of the World Bank

Postal Services - A Vital Public Communications Service.

Postal services are a fundamental right and are vital to the social and economic development of all countries. They continue to provide the most affordable and accessible communications service available to the vast majority of the world's population. While the penetration of alternative communications technologies is anticipated to continue, any program of postal sector reform must be based on a recognition of the need to ensure the continuance of these services on an affordable and accessible basis. To do otherwise will be to widen further the existing gap between the world's information rich and information poor.

Challenges Facing the Future of Postal Services

Postal Services throughout the world, and particularly in the Asia Pacific region, are facing a number of major challenges to the way they do their business and the nature of their industry. These include technological challenges (including the need for modernization and the increased threat of product substitution), the need to attain profitability, the need for investment and improved service performance, the need to embrace new services and products (such as the Internet and e-commerce) and the direct threat of private or foreign-public sector competition.

The Role of the World Bank

Many of the challenges and "reform" strategies identified by the World Bank as the basis for its postal "reform" program merit support. The need to improve financial and service performance, meet new market needs with new service and products and associated organizational reforms (such as commercialization and corporatization) are therefore supported. However the World Bank has used its financial position to actively promote the privatization model over other less radical approaches to reform. The trade union movement considers this advocacy un-balanced, un-necessary and based on an ideological commitment to neo-liberal economic theory. This is clear from its actual program of "assistance", such as in Sri Lanka, Argentina, the Philippines and Trinidad and Tobago.

Report Recommendations

The Report goes on to identify a suggested agenda for UNI Apro in responding to these developments.

This agenda sets out that the real challenge for all interested in the future of public postal services - whether trade unionists, public policy makers or the community - is to respond to the various challenges facing postal services and create a profitable public sector postal service for the 21st century.

The Real Challenge - Creating a Profitable Public Sector Postal Service for the 21st Century.

This study is informed by the belief that there is an alternative to the radical approach taken by the World Bank. For in the developed world - beyond the reach of the financial influence of the World Bank - more innovative approaches to postal sector reform have been undertaken.

These alternatives meet both the commercial and organizational challenges facing postal services while retaining a central public ownership provision as a guarantor of affordable and accessible community service obligations. These alternatives are based on a gradual and controlled approach to change. They encompass commercialization and corporatization, within the framework of a publicly owned postal service. They have been achieved with both community and employee input to the reform process. The examples cited in the Report - Australia and Japan - have resulted in profitable outcomes for services, improvements in working conditions for employees and improved service standards for the community.

A Positive Agenda for Postal Services - Principles of Change

As the representative body of some 0.5 million postal workers in 31 trade unions in 20 countries throughout the Asia Pacific region, UNI has a mandate to express its concern regarding the role of the World Bank and the future of postal services in the region.

Based on this study of the impact of the World Bank and reform developments in the postal sector, it is recommended that UNI endorse a number of principles that need to be incorporated in any proposed postal reform program or policy response to the changing postal market. These key principles have been drawn from the examples of the community supported postal reform programs identified and should be incorporated as minimum standards for postal sector reform throughout the region.

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These principles of change are:
� The Nature of the World Bank's Program;
� The Importance of the Postal Service;
� Consultation and Negotiation;
� Universal Service, Commercialization and Profitability;
� Reserved Service;
� Postal Infrastructure, New Technology and Products;
� Productivity and incentives;
� Privatization, Corporatization and public Ownership;
� National Sovereignty;
� International Cooperation and Dialogue; and,
� Globalization and International Trade Union Action.

1. The World Bank's Reform Program.

UNI reject key elements of the program as being un-balanced, un-necessary and as being solely reflective of neo-liberal ideological commitments. Specifically, commitment to privatization, extensive private sector participation in the public postal service, major reductions in the reserved service and the lack of union consultation are deplored and rejected. it is true that some other aspects of the program have merit - such as a commitment to universal service, commercialization and customer focus, new technology and products and appropriate managerial independence from government (such as through corporatization). UNI however deplore the World Bank's failure to recognise the legitimate right of workers to be consulted on changes to their workplace.

2. The Importance of Postal Service.

Access to affordable and reliable basic postal services is both a fundamental right and vital to the social and economic development of all communities. The high level of utilization of postal services throughout the world underscores their position as the most commonly available communications mechanism. While postal communications are predicted to decline as a proportion of the total messaging market, actual physical mail transactions are nevertheless predicted to increase in the future. Any postal reform proposal must encompass ensuring the continuance (or enhancement) of affordable access to these basic postal communications services;

3. Consultation and Negotiation.

Human resources should be re-developed such that trade unions and their members are fully consulted on postal reform initiatives, as well as any other major change project. An organizations' workforce is its most important and non-transferable asset. Collective agreements should be expanded in scope to encompass this participatory management approach. Participatory human resources are the key to real service improvements and organizational change;

4. Universal Service, Commercialization and Profitability.

Unions recognize the importance of commercialization and profitability to the future viability of national postal administrations. However this should complement its commitment to universal service and other relevant community service obligations (such as the accessibility and affordability of basic postal services) rather than conflict with them. The reality of product substitution and competition, as well as the need for investment, requires a commitment to best practice in customer service by postal administrations and their workforce;

5. Reserved Service.

Postal administrations should retain sufficient reserved service as a monopoly to sustain or finance its universal service and CSO's as a minimum;

6. Postal Infrastructure, New Technology and Products.

Postal administrations should have sufficient commercial freedom to pursue these new technologies, products and services (such as e-commerce). This will enable them to meet existing and emergent customer needs for new and improved electronic communications, hybrid mail products, financial services and an expanded retail network. For example, the nation-wide post office network should be retained and the public investment in this infrastructure be better utilized to ensure that the fullest range of appropriate customer needs are met. Postal retail outlets in this way would be developed into community or customer oriented, one-stop-shops.

7. Productivity and Incentives.

Employment conditions should reflect collective agreements, freely negotiated by trade unions and postal management. However in recognition of the substantial contribution that employees can make to the successful outcome of any postal reform program, postal administrations should commit themselves to creating best practice employment environments for their workforces. Postal reform should enhance job security and provide additional wage incentives reflective of productivity gains and the improvements in service and financial performance. Best practice organizations should establish best practice employment conditions;

8. Privatization, Corporatization and Public Ownership.

Consistent with the other principles stated here, privatization is rejected as a model for postal sector reform. Public ownership is endorsed as an important recognition of the social investment in the existing postal service infrastructure and as a guarantor of universal service and community service obligation. Public ownership, with its democratic accountabilities, provides unique avenues for social controls over this vital area of service to the community. However with respect to the model for postal services under public ownership, it is recognized that corporatization can provide appropriate financial accountabilities and level of managerial independence to sustain the profitability and customer focus of the postal service;

9. National Sovereignty.

Any postal reform should be developed on the basis of locally negotiated models, involving the relevant trade union, its members and the community. They should not result from the adoption of an external ideology, driven by the financial power of foreign lending agencies, such as the World Bank, or other bodies. Postal services are vital to the social and economic development of communities and should therefore be developed in line with community expectations;

10. International Cooperation and Dialogue.

The various international bodies associated with the postal industry (including the UPU and the World Bank) should establish a cooperative relationship with the UNI. Regional cooperation should complement this relationship (such as with the UPU's Asia Pacific regional body);

Globalization and International Trade Union Action.

UNI and its affiliates should act in concert to ensure that the interests of their trade union members are voiced in the various international and regional forum associated with postal sector reform. It is recognized that UNI has sought to develop these relationships in recent years. Investigation should be undertaken immediately to identify areas of international trade union cooperation that may assist the trade union organizing and policy involvement. Mutual cooperation between affiliates should be encouraged and facilitated by UNI, utilizing all available mediums (such as the Internet). Consideration should be given to international action within the domestic markets of the emerging major international postal operators to assist trade unions and workers in other countries.

[SLIDE 14]

A central element of these recommendations is the need for a cooperative industrial relations environment, combined with a gradual and controlled approach to change. This environment must encompass the need to maintain and enhance working conditions and unionization.

UNI strongly believes that these principles are vital to a balanced approach to any postal reform program, encompassing the need to achieve commercial viability with the important social objectives of the world's postal services.

Thank You

STAMP PRICES FOR DOMESTIC LETTER (FIRST CLASS)

Country      Cost (euros)
_______________________________________

Italy         0.62
Germany       0.56
Denmark       0.54
Austria       0.51
Sweden        0.49*
Finland       0.48*
France        0.46
UK            0.46
Luxembourg    0.45
Belgium       0.42
Portugal      0.42
Ireland       0.38
Netherlands   0.36
Greece        0.36
Spain         0.21

*Excluding VAT
Source: Watts, C., "The yellow on the browns", Forbes Global, 21 August 2000