Proceedings of the Workshop - United Nations Office for Outer ...

134 THE ROLE OF INTERNATIONAL ORGANIZATIONS IN PRIVATIZATIONAND COMMERCIAL USE OF OUTER SPACEand Signatory but with no right to participate and tovote together with the Signatories.As a second step, various amendments were decidedin particular so as to allow a member State to designatemore than one Signatory in its country. Theseamendments have not yet entered into force as therequired number of acceptances by the Parties has notyet been reached (two thirds of the Parties whoseSignatories hold at least two thirds of the investmentshares).It should be noted that the purpose of such effortswas to optimize the way in which the organizationsfunctioned by adapting or even reinforcing theirunderlying principles (see the concept of multipleSignatories per country) rather than to reform andmodify.In parallel, and even though INTELSAT, Inmarsatand EUTELSAT had already been feeing withcompetition for some time from high capacity terrestrialfibre cables and private satellite operators such as SESand PANAMSAT, and also national systems, growingpressure for change increased, driven by certain Partiesand Signatories and by competitors that criticized thestructure and the privileges and immunities, particularlyin the case of INTELSAT. Rather than being obliged toaccept changes imposed by external forces, the threeorganizations decided to be proactive in theirrestructuring process.A wide range of alternative scenarios were preparedand examined before decisions could be taken on thelong-term evolution of each of these organizations, froma complete reshaping of the structure, which wouldremain nevertheless an intergovernmental organization,to the formation of purely private company.In the case of Inmarsat, the Council decided in May1994 to create a private limited company under Englishlaw as an affiliate in order to provide a valid alternativeto the consortia created for the provision of satellitepersonal communications services to be operatedthrough constellations of satellites located in low earthorbit or intermediate circular orbit (GLOBALSTAR,IRIDIUM, ODISSEY, etc.). Inmarsat holds a minorityshareholding in the Company named ICO and has a seaton the Board of Directors.New Skies NV was created in 1998 as a companyunder Dutch law, to which five INTELSAT satelliteshave been transferred together with the rights tofrequencies and orbital locations originally used byINTELSAT and now under the authority of the DutchAdministration. The purpose of this spin-off companyis to provide space segment capacity for directbroadcast and multimedia services. There arecommitments from INTELSAT to operate an arm’slength policy vis-a-vis the company in whichINTELSAT holds a minority shareholding.The issue of the legal structure of the threeorganizations was still under discussion.Inmarsat restructuring culminated in the entry intooperation of a holding and an operating company underEnglish law on 15 April 1999. The decisions onEUTELSAT restructuring were taken at the 26thmeeting of the Assembly of Parties in May 1999.The method adopted by Inmarsat and also byEUTELSAT is the following: amendments to theConvention provide for transfer of the assets,operational activities and associated liabilities to aprivate company under national law (several in the caseof Inmarsat). The Operating Agreement and theSignatories disappear and are replaced mutatismutandis by the Articles of Association and theshareholders in the company. Eutelsat S.A., a companyunder French law, will be established by mid-2001. Thestaff is also transferred to the company but with achange of status.An intergovernmental organization remains butwith a role limited to the supervision of basic principleswhich are equivalent in both organizations: nondiscrimination,commitment on service to geographicalareas, fair competition, universal service/public serviceobligations (which consist in the case of Inmarsat incontinued provision of services for the Global MaritimeDistress and Safety Systems).