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Challenges in 2013

During the year, our video coding pilot project attracted negative attention for Itella. At the end of May, we launched a cooperation program with PostNL, the national postal service of the Netherlands, on an optical reading system for addresses in deliveries. During the pilot phase of approximately six months, we purchased the coding service from PostNL Shore, a subsidiary of PostNL in the Philippines. Although PostNL pays special attention to corporate responsibility, we wanted to include a clause in the agreement that ensures that all rules of corporate responsibility are respected even in the pilot phase. In addition, we performed an audit in the Philippines to ensure compliance with corporate responsibility. Despite positive experiences, we decided not to continue the cooperation after the pilot project.

In addition, Itella’s subsidiary in the British Virgin Islands attracted negative publicity in 2013. In 2008, we acquired the Russian NLC subgroup, which included NLC International Corporation in the British Virgin Islands and three companies owned by NLC International Corporation in Cyprus. We have reported our ownership since 2008 as part of our financial reporting. We have also included the company located in the Virgin Islands in our tax return in accordance with Finnish tax regulations. The company located in the British Virgin Islands was registered in Cyprus in October, and Itella no longer has operations in the British Virgin Islands.

In April, we filed a criminal complaint with the police on the suspected use of Posti’s electronic consumer services, which require registration, for fraudulent purposes by using stolen identity information to redirect shipments ordered from online shops. We also reported the incident to the Finnish Communications Regulatory Authority. We believe that the criminal or criminals had acquired user IDs and passwords in conjunction with an earlier security breach related to the services of a provider other than Posti. The users whose information had been compromised had used the same user ID and password for several services, which enabled the criminal or criminals to access Posti’s services.

Reputation risks that materialized in 2013 included news stories related to the digitization service provided by OpusCapita to business customers, claiming that Itella opens 80,000 postal shipments per day. However, we operate in accordance with the Finnish Postal Act. Some recipients have made agreements with us on opening and scanning letters. If the recipient wants its letters to be converted into electronic format, their digitization does not compromise the recipient’s constitutional right to the privacy of correspondence.

Negative public statements also emerged after the media release issued in August by the Finnish Post and Logistics Union PAU. The press release was related to cooperation negotiations at the Finance and Accounting Services unit of OpusCapita, stating that Itella was transferring jobs abroad from Finland. Although some tasks in financial administration may be transferred to OpusCapita’s foreign units at some point, the jobs will stay at OpusCapita and will not be outsourced.

In late 2013, we experienced disruptions in our postal service as a result of the failure of the collective labor agreement negotiations, which led to a situation where no agreement was in force. The parties were the Finnish Post and Logistics Union PAU and Service Sector Employers PALTA. Industrial action caused a backlog and delays in postal deliveries around Finland. However, a strike was avoided when a collective agreement for the postal industry was reached at the end of November.