37th ITSO Assembly of Parties - Washington

The US capital Washington hosted last 12-14 October the 37th Assembly of Parties (AP37) of ITSO, which served to elect the organisation’s new director general (DG), Francis Patrick Masambu of Uganda, who will succeed the Portuguese José Toscano.

Besides Uganda, the other candidates for the DG post were Yvon Henri of France and José Manuel Leceta of Spain. The DG elect, who currently holds the post of deputy director general, will take office on 18 July 2017 when the current DG’s contract ends.

During AP37 the DG announced to the parties that the amendment to article 12, paragraph (c) (ii) of the ITSO Agreement will take force on 16 January 2017, a decade after its approval and following communication of its ratification by the parties from Nepal and Sri Lanka. The aim of this amendment is to preserve orbital resources and associated frequency bands in order to enable compliance with the core principles and adherence to the spirit of the public services agreement (PSA) should the company be disposed of or declared bankrupt.

The DG informed the parties about the ITSO financing agreement signed on 4 December 2015. The executive director of the Intelsat satellite operator, David McGlade, expressed his appreciation for the cooperation and good faith shown during the negotiation process. The new agreement, re-negotiated in the spirit of article 14.01 of the PSA, is in force from 1 July 2016 to 30 June 2019 and will ensure that the new director general has the necessary financial stability during the first year of his term.

The AP noted the DG’s report about the Advisory Committee (IAC), recommending its continuity with the current structure and mandate. The IAC will continue to be comprised of 23 members representing the five regions, selected in the context of the respective regions. The United Kingdom, Germany, Portugal and Switzerland were elected for Region B.

The AP approved the budget proposed by the DG for fiscal years 2017-2018. Also approved was the Compensation Committee’s recommendation on the assignment of bonuses to the DG and on the annual salary update of the fixed part of his salary. The DG indicated that in April 2017, before his departure, he intends to present an audit report on the accounts during his terms in office. The question of bonuses for the DG has been somewhat controversial, in particular in Region B, and should be the object of a comparative study of practices in different international organisations so that future practice can be reformulated.

The new ITSO auditor, Frank & Company p.c., which succeeded CohnReznick, presented its second audit report on the organisation’s accounts, concerning the period from 1 July 2013 to 30 June 2016 (financial years 2014, 2015 and 2016), attesting to the conformity of ITSO’s accounts (which it considered neutral, consistent, clear and without evidence of material errors) with accounting procedures in force in the USA and applicable to the organisation.

The AP noted the very high amount of Intelsat’s debt, which despite the company’s current investment programme and the launch of the first Epic Intelsat 29e satellite in January 2016 may impact the operator’s cash flows and operational performance in a worrisome manner. The Moody’s financial rating agency has lowered Intelsat’s rating to Caa2 and the probability of default to Caa2-PD. The rating prospect shifted from ‘stable’ to ‘negative’. ITSO will continue to monitor the situation.

The Assembly also noted the DG’s report whereby in the 2014-2016 period the private operator Intelsat fulfilled its public service obligations, offering non-discriminatory access and satellite coverage to the three oceanic regions, thus allowing the connection of any country or territory to any other country or territory and complying with its lifeline connectivity obligations for price protection.

A decision was made to review the terms of reference and open participation to all stakeholders in the context of the Frequency Working Party, set up in 2009 to support and advise the director general on technical issues involving frequency coordination for satellite networks and the so-called common heritage. The FWP currently comprises a frequency management expert indicated by each regional vice-chair (Côte d’Ivoire, France, India and Russia) and is headed by Argentina (Carlos Chhab).

This Assembly counted participation by 120 states (from a total of 149 parties that form ITSO). The Assembly’s chair was transferred from Canada to Russia (Nikolai Nikiforov), with the vice-chair held by Jamaica (Ida-Gaye Warburton).

The next ordinary Assembly of Parties should be held in the second quarter of 2018.