Economic Affairs - Approved Panel Minutes - 14 June 2006

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Agenda matter

Action

1.

Minutes of Meetings.

The minutes of Meeting No. 13 of 10th May 2006 and Meeting No. 14 of 5th June 2006 were approved.

2.

Recommendations from the evaluation of the Postal' review

The Panel recalled that it had directed officers to prepare a report to be passed to the Chairman's Committee to request that Committee to recommend to the Privileges and Procedures Committee that it bring a projet to the States to increase the number of sessions that matters could be referred to a Panel to six, giving a period of twelve weeks  to  carry  out  a  review,  and  to  reduce  to  two  weeks  the necessary period of lodging for propositions from Scrutiny which specifically related to matters referred to a Panel under Standing Order 72 (1) or (2).

The Panel had also decided to address concerns over accountancy advice raised during its review. Officers had been directed to make enquiries as to the cost of engaging a firm of audit accountants to provide occasional advice to Panels undertaking reviews involving accounts.  The  Panel  had  directed  that  several  companies  be approached  in  order  to  ensure  that  value  for  money  would  be obtained.

The Panel received the report, entitled The Impact of the Fulfilment Policy  on  the  Incorporation  of  Jersey  Post  (S.R.2./2006) - Key feedback points for the Chairman's Committee'.

The Panel approved the report and directed that it be submitted for consideration by the Chairman's Committee as soon as possible.

3.

Strategic Plan

The  Chairman  advised  the  Panel  of  how  their  recommended amendment to the Strategic Plan would be taken through the States via the Chairmen's Committee. The Panel agreed that as many

members  as  possible  should  attend  the  Scrutiny  Plus  meeting scheduled  for  the  16th  June  2006. A  brief  discussion  on  who should act as rapporteur to the States ensued and it was decided that the appointed person should be agreed at the Scrutiny Plus meeting. The Panel maintained its view that it could not support the Strategic Plan without the provision of the annual business plans which would outline all of the resource implications.

4.

Offshore Distributions and Fulfilment Limited

The  Panel  welcomed  Messrs.  Ian  Cardwell  and  Jason  Layton, Directors of the above company to the meeting to discuss issues relating to the fulfilment industry and Jersey.

The Panel was provided with a history of the company which had commenced  trading  in  2001.  At  that  time  the  philosophy surrounding the industry was that it was a potential growth area to be developed. Active marketing of the no VAT benefit was not discouraged  and  the  concept  was  promoted  at  various  trade exhibitions to attract United Kingdom companies to Jersey. The promotion of no VAT' benefit was now actively discouraged and the new policy prevents UK companies from being licensed to trade in Jersey if they wish to use 3PS providers, particularly if they are involved with the sale of CD's and DVD's.

The  visitors  explained  the  range  of  services  provided  by  their company and the way in which they had diversified to call centre provision. Some of the companies' activities included fulfilment from Jersey  but  it  also  undertook  fulfilment  from  Guernsey  where preferential postal rates had been achieved. Such agreements had not  been  achieved  locally  and  recent  changes  in  the  payment structure to Jersey Post for fulfilment post had presented cash flow challenges for some fulfilment companies.

Some discussion took place on expansion into Europe and the legislation surrounding licensing issues for music download sales. The rules and requirements for setting up fulfilment undertakings in Guernsey were explained and it was noted that they also operated a pre-paid VAT scheme. That scheme differed from the Jersey scheme as it was administered and managed by Guernsey Post directly without a Customs Officer on site.

The staffing structure in both islands was explained as was the approach to mail sorting to increase delivery speed. The diversity of the products dealt with by the Company precludes any significant automation. It was asserted that whilst the business had not grown significantly in Jersey with regard to fulfilment, it had diversified into call centre activity and focused on Guernsey and was continuing to achieve steady controlled growth.

5.

Future meetings and events. Additional meeting -

The Panel agreed that it would hold an additional meeting on the 20th June 2006 during the States lunch time recess to discuss its future work programme.

Attendance at events -

The Panel agreed that the Chairman and Deputies Breckon and Lewis  together  with  one  officer  should  attend  the  forthcoming Chamber of Commerce lunch to be held at the Pomme D'Or Hotel on the 19th June 2006. A guest speaker would be attending the event entitled seminar on competition policy in small economies'.

The Panel agreed that the Chairman should attend the forthcoming