Compliance Procedures
Royal Mail became a regulated company in April 2001 after it signed its first Licence on the 26th March 2001. It is regulated by the Postal Services Commission (Postcomm) and Postwatch. Regulation takes place within the context of the Royal Mail Licence which, by means of the various Conditions specified within it, prescribes the ways in which Royal Mail is required to operate and the standards required of it, e.g. for Pricing and Quality of Service.
Condition 9: this is the principal Condition that applies to the Royal Mail Wholesale unit. It specifies the basis on which Royal Mail is required to approach "access to its postal facilities". These include:
- negotiating in good faith with a view to agreeing terms;
- at prices based on a reasonable allocation of costs;
- such that Royal Mail does not unduly discriminate or show undue preference.
To date, access requests have exclusively taken the form of operators and customers seeking access to Inward Mail Centres for Access post to receive final sortation and delivery.
Other key licence Conditions that relate to the Wholesale Unit are Conditions 10 and 11. These exist because Royal Mail is dominant in many of the markets in which it operates and so Postcomm deems them necessary so as to enable a competitive market to operate. These requirements also feature in the Competition Act 1998:-
Condition 10: this is the Condition that requires Royal Mail Wholesale to maintain 'Chinese walls' between itself and the commercial departments of its retail business (particularly marketing and sales). It requires Royal Mail to
a) "conduct its business as a postal operator in the manner best calculated to secure that [it does not] obtain any unfair commercial advantage in connection with the provision by the Licensee of access to its postal facilities".
b) "use all reasonable endeavours to secure that no information in the possession of the Licensee as a result of giving access to its postal facilities to other persons is disclosed for the benefit of or used for the purpose of any trading business conducted by the Licensee".
Condition 11: deals with promoting of effective competition in relation to price and non-price terms. It requires that
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"the terms on which it [Royal Mail] supplies or offers to supply postal services to customers
- (i) shall not show undue preference to any person or class of persons, and
- (ii) shall not exercise any undue discrimination against or seek to impose any undue restriction on any person or class of persons, and
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shall not set terms or charges for the supply of postal services
- (i) which are excessive, or
- (ii) which are predatory."
Code of Practice for Common Operational Procedures
This further piece of Access regulation has been put in place by Postcomm in the form of a Licence requirement to comply with the extraction and repatriation of misdirected mail to the intended licensee. The code of practice is available on the Postcomm website (www.psc.gov.uk).
Wholesale Approach to Compliance
Royal Mail Wholesale is committed to adhering to the letter and spirit of its compliance obligations. It is the responsibility of each employee to comply with Royal Mail’s licence requirements. In order to ensure that Wholesale adheres to its own licence obligations in all respects, a Head of Compliance has been appointed, who reports to the Wholesale Managing Director. The role of the Head of Compliance is to establish and control the documentation, publishing of policies, processes, operating procedures and guidelines that set the standards for behavioural and contractual activities when dealing with contacts both internal and external to Royal Mail Group. The role includes the responsibility for managing and controlling the Code of Practice for Common Operational Procedures on behalf of RM Group.