New move brings Irish postal competition one step nearer

The Chief executive of An Post, Donal Curtin, has written to the communications regulator formally requesting that the company be excused from its legal obligation to provide a postal service.

It is the first time a derogation has been sought under a regulatory regime established in 2002 and, according to sources, formally clears the way for regulator Comreg to ask Communications Minister Noel Dempsey to introduce early competition into the market.

The Communications Workers’ Union, which represents postal workers, announced last night that it would begin industrial action at midnight tomorrow. Ahead of that announcement, Mr Dempsey said that he would consider opening the postal market to competition earlier than expected in the event that industrial action went ahead.

Under the current timetable, letters weighing more than 50g may be carried by private operators from January, while the entire market will be opened up in 2009.

If the minister does decide to speed up the liberalisation process, it will not be the first time that a strike by postal workers has directly led to a liberalisation of the market. A major strike in 1979 prompted the then government to open up the parcels-and-courier market. Since then, competition from private firms has all but driven An Post out of this sector.

The Irish Independent has seen a copy of the letter sent by Mr Curtin to Isolde Goggin, the chairperson of Comreg, yesterday morning before the CWU announced that it was taking strike action.

It states: “We must anticipate that industrial action will be such that An Post will not be able to meet its Universal Service Obligations (USO) for the duration of any industrial action and the recovery period immediately afterwards.”

Under the terms of the USO, An Post is legally obliged to provide a postal service to all houses in the State.

According to the letter: “Statutory Instrument No 616 of 2002 requires that the universal service be provided without interruption, except in cases of force majeure.” This is the term for unforeseeable circumstances which excuse a company from fulfilling the terms of a contract.

“We have previously indicated our view to Comreg that industrial action constitutes force majeure. Comreg has argued that force majeure does not cover industrial action.”

The letter details the measures taken by An Post to avoid industrial action: “The company has proceeded at all times in strict accordance with agreed company and national partnership processes. Most recently, the company has indicated full acceptance of the Labour Court recommendations of July 12, 2005, in relation to the payment of Sustaining Progress and the implementation of the change programme.”