SingPost says all contracts have clauses that cover delivery failure in dangerous situations

All Singapore Post (SingPost) contracts with its customers include clauses to cover situations where it is too dangerous for SingPost to render its services, a spokesman for the company said.

“All our contracts have a force majeure clause to cover situations where it is too dangerous to deliver, and customers are aware of these conditions,” the spokesman said.

A force majeure clause provides a legal shield against liability for non-performance.

“In the event of unforeseen circumstances, the standard approach would be to work with our customers to identify suitable options or alternatives, not falsify a status update through manual inputs when no attempt at delivery was made.” 

SingPost was responding to queries from The Straits Times on whether it can manually change the delivery status codes to “delivery failure (DF)” for parcels bound for cities where the situation is too dangerous or expensive for delivery, without first attempting to deliver them.

The queries were sent after a Dec 31 official statement was released by SingPost’s former group chief executive Vincent Phang and former group chief financial officer Vincent Yik in response to two Singapore Exchange (SGX) filings made by the board on Dec 29.

In these SGX filings, SingPost’s board had provided a detailed account and timeline of the proceedings that led to Mr Phang’s and Mr Yik’s dismissal on Dec 21.

A third executive, Mr Yu Li, who was the CEO of SingPost’s international business unit, was also fired. All three are contesting the decision on merit and procedural unfairness.

In January and February, a whistleblower had alleged that three junior employees of SingPost’s international business unit (IBU) had been falsely changing the delivery status codes on parcels to be delivered for an international e-commerce customer to DF when no attempts were made to deliver them, in order to avoid penalties.

These allegations have since been confirmed, and the three staff dismissed.

Mr Phang, Mr Yik and Mr Yu were fired by the board for making representations that contradicted internal investigations into the falsification of shipment data at the IBU, the board said.

These included making false assertions that there was no evidence of data manipulation and wrongdoing in relation to the manual DF data entries and no evidence of falsification for the purposes of avoiding penalties, according to the board’s Dec 29 account.

They also falsely asserted that the practice of manual DF data entries was requested by the customer.

But Mr Phang and Mr Yik said in their Dec 31 statement that management had not been part of initial investigations after the whistleblowing reports were first received, and were asked for their views on March 11 and April 3 based on limited information and context.

They noted that the full facts of the report were only made known to them on April 27.

Mr Phang and Mr Yik said that a “significant majority” of the shipments with false DF codes were linked to destinations where there were known issues, such as conflict zones like Israel.

They added that “it was therefore important to establish the financial impact prior to communicating with the customer as well as determining any wrong doing by junior staff members”.

When asked whether SingPost manually changes the delivery status codes on parcels bound for cities where the situation is too dangerous or expensive after communicating this to its customers, a representative for Mr Phang and Mr Yik said they could not comment beyond their Dec 31 statement.

In SingPost’s reply to ST, the spokesman added “this is not a case of seeking deliveries in challenging conditions where they cannot be done.

“According to our investigations, this practice of falsified manual DF entries was made even in non-conflict countries. Such practices are not in accordance with the company’s standard processes regarding status updates for deliveries.

Mr Phang and Mr Yik’s statement added that “once the management was briefed on the conclusive report and findings following the external forensic team’s investigations, we agreed with and followed the instructions of the board.

“A settlement with the customer was then concluded that did not have a material financial impact”.

When asked if the board had instructed management to settle with the customer after the data falsification came to light and renew the contract, SingPost’s spokesman said the contract between SingPost and the customer in question “was negotiated and renewed as part of the normal contract renewal cycle”.

Singpost did not reveal the terms of the previous and current contracts with the customer, the identity of the customer and the settlement amount as these details are confidential, it said.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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