RIPE 85
General Meeting
26th October 2022
4:30 p.m.
CHAIR: Ladies and gentlemen the meeting was planned for 4:30, but again sorry, the meeting was planned for 4:30, but, you know, because the previous Working Group ran a bit late we will allow people to accommodate, so we will start the meeting at a quarter to five, in five minutes, so just relax and I will be back.
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Ladies and gentlemen, good afternoon. I know you might be surprised there is a newer face talking to you, Ondrej Filip I am the new Chair and this is ‑‑ I have been Chair for less than two months, this is the first General Meeting I am chairing so let's see how it goes.
(Applause)
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I didn't expect it but thank you so much.
First of all, I need to start with the usual administrative matters. I decided to appoint Athina Fragkouli as secretary for this General Meeting, as this requires the articles of the association, and also, you know, do not forget and you can see it on the screen that there are procedures how to object to the minutes from this GM and when the minutes are published, so I guess it's as usual.
So, this is the agenda of this meeting, we are exactly in the point number 1. Then I will deliver ‑‑ sorry, then the report from RIPE NCC will not be delivered because as is the new tradition, this was delivered during the previous Working Group so you'll all see it ‑‑ you all saw it and you could comment and there was a lot of interaction to thank you reach for that.
So we will kind of skip this point. I will deliver the report from the Executive Board. Then Hans Petter will present the RIPE NCC present the RIPE NCC plan and budget draft. Then we will discuss the financial update and redistribution of RIPE NCC surplus, and that will be delivered by Simon I guess, and then Athina will present the amendments to the Articles of Association which reflects some of the previous discussion we had. Then we will, you know, get the information how the new voting system works because this was changed since the last meeting so it's quite important to explain it and we will read the resolution that will be voted. Then we will adjourn the meeting and we will create a space for voting and we will reconvene on Friday morning.
So that's the agenda.
And without any delay, let me start with the report from the RIPE NCC Executive Board.
First of all, the Board consists of this interesting group of people, six great people, and me. You can see we have a new picture which was taken in Berlin during the last meeting. The names are listed in the order from the picture from left to right. So, the group consists from Job Snijders, please wave. Remco van Mook. Maria Hall. I will skip Christian, Ondrej Filip, that's me, Raymond the Treasurer and Peter, secretary of the Board. I am the new Chair and I am a successor of somebody, somebody who was a Chair for five years, so, I think this is the ideal place to thank him for his outstanding service for RIPE NCC in the role of the Chair of the Board, he is not leaving, so there will be enough space to thank him after he finishes the duty, he is done so please acknowledge his moment for his five years of excellent service:
CHRISTIAN KAUFMANN: Thanks a lot, much appreciated really.
CHAIR: So, let me go through the, what happened since the last meeting, we had three meetings, the first one looks a little bit long of course, we didn't have a meeting for such a long time, but it was an mail discussion that at the end was finished, or the output was a resolution so we minuted that discussion so it looks a little bit longer, but don't be afraid we didn't waste our time for a long time debating about something, it was the mail discussion.
In June we had a traditional two day meeting before the summer vacation break, so ‑‑ and then the last meeting which the minutes are published was in September, and of course we used the time that we met all here and there were some other meetings but those minutes will be published later.
But anyway, minutes from the old Board meetings are published in the usual place, you can review it, you can comment, whatever, they are public.
Let me go through the resolution since the last GM. First of all, something that I introduced already, there was a resolution about the functions of the Board, and it was resolved in the following way: That I will be the Chair, Raymond Jetten would be my successor as Treasurer, so he is the new treasurer, Peter remains secretary because he is the best secretary in the world, and also Remco of course stays as NRO representative doing an excellent job, and Maria Hall was appointed to the project fund representative of the Board.
We also apppointed Fiona McCrackenberger and Aideen Eslaner to the available seats of the community project fund Selection Committee. We approved the minutes, that's probably obvious. We also approved the treasury statute and we agreed upon ‑‑ you know the treasury statutes were agreed in the time when nobody expected such a turbulent financial situation, I am sure Simon will touch on this in his presentation. We also approved that the RIPE NCC will carry out an internal Impact Analysis on operational details of a possible new structure that's something we have been doing for a long time. Finding a new structure is not an easy task and requires several interactions and also some something from all sides so it's still an ongoing thing.
We authorised the RIPE NCC Managing Director, Hans Petter Holen, to negotiate, review and sign on behalf of the RIPE NCC to revised NRO memorandum of understanding. Also as a reaction, that we faced some issue on our mailing list, we resolved to continue to moderation of the Members Discuss mailing list until July 2023. I think you kind of get used to that. Its mails are slightly delayed but we are doing our best not to delay the distribution of them.
We also approved the text of RIPE NCC learning events terms and conditions, which says, you know, how you register and attend NCC learning events. And also we adopted the proposed amendments to the document management regulations of the RIPE NCC, which says how quickly we react to our mails when we take resolution by mail and so on, so that was the subject of the amendment.
And also we approved the proposed amendments to the RIPE NCC Articles of Association and instructed the managing director to prepare the relevant resolutions and, you know, this stuff will be discussed in Athina's presentation, so that's something discussed today.
We approved two other documents, the RIPE NCC activity plan and budget and the Members Discuss mailing list moderation document.
Meanwhile, we discussed a lot of other important topics. First of all, something which has been with us for a while. That's the current situation of AFRINIC.
We pay close attention to the risk that that are associated with the work that we are doing. So, we discussed the integrated music management, as we do periodically. Also, we discuss the treasury portfolio management, the statute and financial report. I think activity plan and budget, comes with the document. Also, one new thing that we will face probably today, if you are very active enough, but definitely before Friday morning, is the new online voting system which was replace and we have a new one. I hope you remember that there was some issues with the previous one, especially CK, liked that situation I I think it must be very pleasant to stand in front of all of you and have nothing to say.
And also, we ‑‑ project to identify a potential corporate structure that is compliant with the legal requirements, and also we discussed the keep Ukraine connected initiative.
I'm sure we have some more points for discussion from today's Working Group, so I guess there is some statement that the Board will continue to also work with the issue that was discussed during the Working Group.
And meanwhile, you know, we meet with the management, senior management and of course most importantly Hans Petter Holen, to discuss the issue also guiding RIPE NCC management and we are fulfilling corporate governance and fiduciary responsibilities.
You are the members, you are the owners of the association so your voice so the most important, so, let me encourage you to send us feedback regarding the ‑‑ everything basically, but mainly about the most important documents, which is activities on.budget, and also, you know, there is still kind of postponed work of the charging scheme that will, I assume you know we postpone it because of the complicated world situation, but that's definitely something we would like to address in the future, and of course plan and budget, and, you know, we receive all the inputs from specific RIPE NCC Services and the previous session of mainly about it.
There is multiple ways how to approach us. One is here, you are free to talk, and we will be listening to your suggestions. You can always reach us informally, we are at many social events or, you know, we are always here somewhere going through the corridors, so just don't be shy and try to discuss with us. Also, on Monday, there was a session which was designed to discuss with the Board members and Working Group Chairs.
Then of course one of the best ways is through the mailing list. You are used to that, you use it quite often. Or you can send us direct mail if you do not have publicity. So that's displayed.
Let me touch briefly one item, I know there is a telegram channel that the community meets and discuss, some of the Board members are monitoring or at least in present monitoring, but this is not the official channel so please do not expect us to react officially in this channel. Please use those official methods how to reach us and we will use the same methods to reply, but of course some Board members are there and they react, so that's okay, but this is not the official channel of RIPE NCC.
So, that is all. Are there any questions to the Board?
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Okay, in that case ‑‑ oh, there is one.
AUDIENCE SPEAKER: Hi am. Just you said you said you discussed the keep Ukraine connected project which we are members of. Just curious, what you were discussing about us?
CHAIR: Because there was a request to support this initiative from the funds of RIPE NCC, and we reviewed all the documents which are related either to articles or the community project fund, and, you know, there is explicitly ‑‑ there is not an option to support that something from those, so we discussed that, we will try to help it.
AUDIENCE SPEAKER: Hello, I have a question to the Board. Your Board, probably it's not not a good moment and maybe you don't have such a relation to discuss this thing. As you probably know the elections ‑‑ among the candidates for election for the NRO NC, there is a single capped date with just a name, without a surname. You have to check the candidate at least if the person is real.
CHAIR: Yeah. Thank you very much for bringing this up. And that's a good example. There is a lot of that these days, I understand the issue, but those elections, you know, are RIPE community elections so I discussed it briefly with Mirjam, I am sure she is in the room. So, I don't know if you want to respond to that or ‑‑ but we just discussed that, Mirjam promised to look at the issue and NCC is, you know, happy to assist to solve this problem. So, yes, we will collectively try to do something about it.
AUDIENCE SPEAKER: Thank you.
CHAIR: Excellent, we will have an open mic part chat later so we can continue with the agenda. And the next is Hans Petter.
HANS PETTER HOLEN: So, thank you Ondrej. So, I am here to present the Draft Activity Plan and Budget for next year for 2023. The plan sets out the difficulties for the year ahead. And we also have descriptions of the financial figures broken down on the different activities. And this is the easiest way that you can figure out what we are planning to do.
And this is also part of what we do to manage accountability and transparency and you can find that online. This is part of a yearly cycle, so we start in June with discussing with the Board what the sort of frames around the budget for next year will be, we look at things like inflation, we look at the membership numbers and then we have a rough idea of what we can do. And then the RIPE NCC works internally with the Draft Activity Plan and Budget that we present to the Board and the Board approves it for publication at this meeting, and then you have the opportunity to comment on this. So you don't have to make your comments here today. You are welcome to do so but you can also share them on the Members Discuss mailing list or with the Board and then the Board will finally approve the plan in December. So it's possible for you to affect this plan.
So, in order to have some focus for next year we have picked out strategic focus points. As you know we have a strategy for the next five years, and we have, from that strategy, the plan which consists a lot of objectives picked out the ones that we will focus most on in the next year.
One is to be resilient in the face of political, legislative and regulatory changes that have the potential to affect our operations. And as you expect, there is a war going on in our service region, there are sanctions and we need to understand how to adapt to this.
Then, security of the Internet is very important. Therefore, our activities within secure routing with RPKI is important, not only the technical work but also training in outreach in this is going to be on our agenda. Further, being a centre of excellence in data and measurements. We collect a lot of data and have done that for many years in Atlas and RIS and so on. What we now going to have a focus on is how do we turn that information into actionable ‑‑ into something actionable. So we are going to focus on that, put resources on doing analysis and see how we can use for our own planning, work with the community and so on, but that could also be interesting for the community to spend more time on using the APIs, using the data, using RIPE stats and so on.
Now, in order to do also, all this, we need to manage the necessary levels of security and compliance with best practices and applicable regulations. So, you already heard Felipe talking about red team testing. We are hired a chief information security officer and we are building a security programme so you will see presentations about that, about this development at future meetings.
And of course, nothing of this is possible without engaged staff. And we also have a number of open positions right now, and our HR director is here so if you are interested in working for us, then contact her.
So, the activity plan is structured in the registry information service and external engagement and community, and then the supporting functions supporting the organisation.
So, starting with the registry, we have around 70 full‑time employees there, and it's a cost of around €10,000,000. We are then focusing on decreasing the number of resource requests and resource update requests. We see that the increased cost is mainly related to the new RIPE NCC access. So the single sign on, which Philippe also talked about. New upgrades and potential Cloud deployments.
Plan to automate an active monitoring and notifications of changes to member business structures not reflected in the registry. So Felipe also talked about that automation.
And we want to streamline our internal processes to become more efficient. And then of course automation and automated sanction compliance is also very important here. It's now fully implemented but we need to continue to make this more efficient.
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For the LIR portal, the access architecture has started and will be completed focusing on improving the security for the LIR portal and the RIPE NCC access. And it was mentioned here during the Services Working Group that there had been some research done on security and some of this is related to the, both the LIR portal and towards the single sign I don't know.
In RPKI, we have four key focus areas in 2023. One is improving the overall resilience by improving a better geographic distribution. We also want to improve the user experience. We also are working on compliance, so establishing a compliance framework and having an audited, and better coordination with the other RIRs, so that if you transfer addresses between the RIRs, the RPKI service should be similar in some way. I mean whether it will be fully unified or whether it will be minimum level of service, that's to be decided. But this is one of the focus area. The RIPE Database, we used community feedback to define the criticality for this, and provide requirements to map against our Cloud strategy to we can identify where to improve the resilience of the RIPE Database.
And also, user interface, and progress on the new draft description for a new realtime mirroring.
We have included the budget here. There are some shifts between the different activity lines, but that's mostly internal reallocations not reflecting real changes.
Information services: 43.5 FTEs and around €8.2 million, and also we have some capital expenditure investments of €450,000. This area of the DNS and k‑root. We we want to expand the number of hosted k‑root and alt DNS nodes and we also plan to expand the core site for alt DNS sites. So core sites are fully operated by the RIPE NCC, the hosted ones are hosted by members.
Research is important to us. We have a research team, and they are going to explore an initiative to engage in focused analysis and reporting.on the evolution of the Internet in different regions and groups. And work to provide deep dives into Internet events that have had significant impact. And this is part of the initiative to turn data into actionable information.
RIS: The routing collection infrastructure. Moving ahead with the new selective peering policy, becoming more strategic about who we peer with and improve the website, migrate jobs to newer servers and enhance data quality.
RIPE Atlas: We have an update to the RIPE Atlas Ambassador model coming up and we are planning to finalise migration of our big data back‑end from on premise to the Cloud and I am coming back to that a bit later as well. And continue to improve the accuracy and volume of the data provided with IP Map. And we also have new probes this year, so as you have seen out here, so if you are from areas with few probes, then we are very interested to hear from you.
RIPEstat. Extend our data lake and new datasets. Strategic focus on improving measurements and tools. And we have included here the budget broken down an the different activity for your reference.
External engagement and community. That's another 42 FTEs and around 9.7 million euros. And this is about community building and engagement. So, hybrid RIPE meetings, data analysis and story telling capabilities to better understand our membership's needs and design our engagements accordingly. So not only continue with doing what we have done the way we have done it but looking into data to see how should we do this better in order to adapt to a changing world.
Organise RIPE NCC days, Internet measurement days, hackathon, open houses and the new central Asia peering and inter‑connection forum.
So, if you are in the area of Almaty you could sign up for that meeting in a couple of weeks.
And we also run the community RIPE NCC community project funds.
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It also is about updating the website. There was a presentation here earlier today about new technology there. Develop new media content, Fergal gave a presentation earlier on in much more detail about this. RIPE Labs, podcasts, videos, animations. Also doing a survey next year, which is important to give input both to the activity plan and for the next year ahead, and the strategy once we want to adopt that towards the end of this strategic period.
We also want to support RIPE's community diversity and inclusion efforts through new and longstanding initiatives. So, this is not only about diversity but also about inclusion, we welcome everybody in, we welcome newcomers, but we also need to adapt and make sure that this also becomes their community and we can continue to grow when some of us getgreyer and greyer hair and gets older and older.
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And then translation, Fergal talked about that as well and we are going to continue to invest in that.
Community learning and development: Relax travel restrictions. Now it makes it possible for us to do more in‑person meetings. We want to promote a new routing security e‑learning courses and certifications, part of the larger focused on routing security and RPKI that I mentioned in the beginning.
We have reduced the budget for certified professionals and e‑learning corresponding to the demand that we have seen over the last couple of years, so, this is not necessarily to do less activity but maybe also to find more cost efficient suppliers to do this. So we are continuing there but we are optimising our systems and cost spendings.
Concentrate on quality control and improving the existing courses.
Community coordination and collaboration. So this is maintaining engagement with public authorities remains a really high priority through our roundtables and participating at other public policy meetings. There is a collaboration Working Group tomorrow, and if you are interested in this area, please come there and listen to the report from, for instance, the latest ITU meeting where I and my colleagues were.
Focus on increasing the understanding of governments on routing security and best practices is also going to be a focus in this area. Continue to investigate a blanket exemption from EU sanctions for Internet number resources. We have come far in that area but we still have challenges, so working closely with the government and it really helps to be at these events and interact informally with them in order to actually push inside the bureaucracy to get the right people.
You can see here the split of the costs on the different areas. So that's included here for your reference.
Now, in order to run this organisation, we need some supporting organisations. We have a total of 35 FTEs, and an OPEX of 11 million and a CAPEX of 125 thousand. So, first, we still have an office and we are planning to invest in updating our meeting rooms to better support the hybrid way of working. We still have years left on the contract for the office, so we can't make any immediate changes there. But we are not forcing people back to the office, we are exploring how to work hybrid. We also have to improve the office space security.
HR: We have started leadership training, I believe leadership is really important for an organisation like us, and that is going to continue next year, and we are going to continue this into a personal development programme for more of the staff, and we have increased the budget for staff engagement. And of course, recruitment is really important here, we would love to keep all our staff, but in reality, with 170, 80, 90, FFEs, some will leave us and we need to recruit some replacements for that.
We have legal department. We are investigating how to improve our resilience in the face of political legislative and regulatory changes. We monitor legal developments related to GDPR and applicable privacy‑related laws and regulations, and remember that we are based in the Netherlands and we have to adhere by Dutch law but we also have 70 plus countries in our region, so this is no small undertaking.
Reinforce the legal frameworks around RPKI for our services that involve sharing data and enabling measurements. And sanctions continue to require a great deal of effort in compliance work.
Yeah, we have automate this had but we get way too many false positives that needs legal review before we can act on them, so we don't want to just trust the automation without actually verifying the parties that are flagged.
Finance: Continue to work on new charging scheme modes and further improvements of our enterprise resource planning system. So giving financial insight into the different monitors so that they can make good decisions in their area.
And internal control and management reporting is going to have a continuous focus and this has really been one of the major undertakings for the last couple of years, where we now have really good internal financial control, really streamlined systems with automated procedures so I really feel confidence that we have much better control now than when I started. So my financial directors will talk more about finances later on.
Organisation, information security, risk and compliance. That's a new area we started recruitment last year, and I hired a chief information security officer this year.
Strong focus on the preventative side of information security, secure by design principles and staff security awareness is going to be the focus next year. Tooling development to detect and respond to attacks both on premise and in the Cloud. And alignment of the security activities against the ISO 23001 framework. Focus on risk management agility and alignment of various compliance efforts.
So, I have a small office as well. Some staff to keep us together, so Daniel, my executive assistant is organising me and the Executive Board and the management team and we have some extra budget in there that the Board has set aside if we need to do some corporate restructuring. We have also increased the budget for the Number Resource Organisation because the NRO has planned to do three programme monitors, and do more coordination and more committed coordination than we have done in the past and we also decided last year to support the TFC cert, which is a project in GEANT, the academic European organisation who wanted to grow up and move out just as RIPE NCC did from back 20 years ago when that was a project in the European academic networks as well. So we have committed some money to that and I will also be helping them on the supervisory board for the first, the next couple of years.
So the total budget here you can see in the splits, and you will see also at the bottom here the budget for the RIPE Chair, which also contains a travel budget. So she is able to ‑‑ or the RIPE Chair and Vice‑Chair is able to travel around.
So, the budget: There is a 12% increase overall compared to year, 35 .5 to €40,000,000. 2% increase in FTEs. 22,500 LIRs is expected at the start of 2023. So that's where we ‑‑ a lot of ‑‑ most of the revenue comes from. Cost her LIR is expected to be €1,778. That's a 12% increase like the budget. Membership fee has been increased to €1,550, which is what the GM approved earlier this year. And sign up fee is €1,000. And the estimated surplus is then is €100,000, so for practical purposes it's zero. So I am beginning to see the end of the big surpluses which is due to the run‑out of v4. Now we have kept it artificially alive with the waiting list and some space being returned. But the years ahead, we will see that we will not be able to grow as much as we have done in the past and not have a large surplus that we have seen in the past. Of course I am doing everything I can to keep the costs down and to stay within this budget, but with the inflation that we are seeing coming up this year, that's going to be really tricky.
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So, the split between activities, I won't spend too much on that. On the income side you will see here that we have membership fees and sign‑up fees. We also have some income from the RIPE meeting. We also have sponsorship and some other income. Totalling up to €40 million.
Any questions?
I see none. Thank you.
(Applause)
CHAIR: So the next one is Simon talking about the financial update.
SIMON‑JAN HAYTINK: All right. Hello everybody. My fourth presentation at the GM, but the first one in real life. Good to see you all again. Happy to be able to present the stable financial position, and I am very happy that Covid is also over.
A quick recap of our financial strategy. Our funding model aims to generate sufficient income so we can fulfil our obligation indication a stable and predictable manner. A flat fee per LIR has kept things straightforward and predictable since 2013 and we are committed to maintain a low‑risk profile.
The financial update.
All indicators are green. Income is over budget and costs are under. And we have more LIR accounts than anticipated. In short the RIPE NCC is financially in a very sound position.
The financial story is far: Our income is 23.8 million. 4% over budget. The LIR accounts increased by 475, and we welcomed an additional 354 members.
Expenditure is 23.8 million. Which is 12% under budget. On average, we have employed 172.3 FTEs in 2022 and we have a surplus of 2.6 million year to date.
We do however have two concerns: For 2002 and beyond, membership fees at risk and inflation.
Our balance sheet:
We continue to have a very health balance sheet. Which is a great thing looking at the world today (healthy) financial fixed assets show a decline, which is an unrealised regular any of result on our investment portfolio. A decline in cash which is result of lowering the sign‑up fees in 2022. The high distribution over 2021 and a post‑Covid climate in which there are less barriers for expenditure.
Capital and liabilities: The details. A steady clearing house we serve over the years. €427,000 of fees still to be redistributed. This is higher than normal, as we have not invoiced and redistributed the ultra high risk countries. All in all, happy to report a very healthy balance sheet yet again.
Moving on to our income.
The income details: A total of €27.8 million, of which 26.2 million in membership fees, compared to 26.6 in 2021.
Sign‑up fees are at €1.3 million for 1,300 new LIR accounts and in 2021 we generated 4 million for 2,000 LIR accounts. Other income is below budget.
New LIR accounts and closures, we see continued interest in the membership of the RIPE NCC but there is a different trend than in 2021. The same applied for close users and we still have Q4 to go.
Members and LIRs:
23,000,684 LIR accounts at the end of Q3 and 20,000369 members. We see a slight drop in LIR members in Q3, this is due to closure due to non‑payment. This clearly shows the possible consolidation of require accounts we will face sometime in the future.
Payment behaviour:
As always, I can report very positive payment behaviour. If we look at ways to improve this, we can only emphasise to our members that payment is due within 30 days of the invoice date. In 2022, we closed 120 LIR accounts, due to non‑payment, representing 0.5%.
Overall, 2% remains outstanding. Which are the Russians and the Ukrainians. 12% for Russia and 39% for the Ukraine still have outstanding invoices.
Membership fees at risk.
Recap:
The first concern, what have we done so far? Ultra high risk countries for Iran and Syria, invoices have not been issued. The payment obligation still stands but it is postponed. Invoices for Russia and Ukraine have been issued, but the payment time frame has been extended to the 31st December 2022.
To quantify this in euros, we have €1.4 million of membership fees that are currently at risk. The biggest impact at the moment are the ultra high risk countries with just over €1 million.
Financial impact for Russia and Ukraine considering the circumstances is not bad at all. And so far, the financial facts:
Now, the next steps. Ultra high risk countries we will continue to search for solutions but I do not see any quick fixes at this point in time. For Russia, based on 88% being able to pay, the decision is made to hold the payment time frame to the 31st December. Please do note additional payment extensions can be granted on a case‑by‑case basis. And all affected members will be contacted. For the Ukraine, as 39% has not been able to pay, we are granting an additional six months payment extension. Of course we will keep on monitoring the situation closely and apply payment term extensions where needed as we are currently doing.
We will keep track of the situation and provide these payment statistics to the Executive Board and the GM.
Invoices 2023: Plan is to issue all invoices with the exception of ultra high risk countries. For any 2023 payment term extensions I expect fully this to be linked to the protecting resource holders in distressed areas as presented earlier. As extending payment terms can help to protect tees members. And I cannot highlight enough that it's not our intention ‑‑ it is our intention to protect resource holders in distressed areas and not to close them.
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The second concern: Inflation, this remains a major concern looking at the future and this applies to us all. But we have taken precautions together with you at the GM. Increased membership fees from 1,400 to €1,450 and the redistribution mechanism remains in place and we have a buffer for uncertainties.
Moving on to expenditures.
2022 expenditures are 23.8 million, 12% under budget. Payroll and personnel expenses are 3% under budget. We employed 172.3 FTEs on average compared to a budget of 186.8. Other operating expenses are 22% below budget at 9.3 million. Depreciation and bad debts also 22% below budget.
Zooming in on the budget variance. In 2021, the RIPE 85 budget was planned in September. And as it is now October, this explains this high variance. Correcting for this timing is make, we would be 9% under budget on total expenditure. Overall, we are under budget on all items by €3.2 million in total.
A procurement update.
So far, a turnover of 12.3 million. 1540 invoices processed providing an average €80,002 per invoice of which 1,250 is VAT. 22 invoices have been €100,000 or higher, and with 41 capital expenditure invoices for an average of €6,850 per invoice and we used 326 creditors, resulting in 38,000 average per supplier.
The suppliers with a turnover of €120,000 or so far. As every year I have excluded consultants from this overview. Two new items in the top 9 are both the RIPE meeting hotels and other than a the top nine remains relatively stable.
The next nine, again relatively stable. Two new entries in the list. Number 13, software licences, the €156,000 includes a three year prepayment which ensured a nice discount. At number 16 are insurances broker which is higher than normal due to a correction over 2021 on staff employment insurances.
Inflation: For the cost of course a major concern. For the 2022 financial year, I expect a moderate effect as the bulk has been prepaid and contracts are fixed. However, in 2023, contracts will be indexed for inflation and that effect is expected to be considerable. Additionally our landlord and housing provider currently have fixed energy contracts but this will end in 2023. But again we have taken precautions, we have included inflation in the 2023 budget. On average 8 .5%. Whether this will be enough or too much, we will have to see. But we will keep a sharp eye on the cost development and make decisions accordingly. Any shortage of funds or excess of funds will be put forward to the GM for a redistribution vote.
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Moving on to treasury. I cannot say the best year so far. Real life negative financial result of €1.4 million. A result from uncertainty in the markets, but do note that this is unrealised. A little bit of good news is that from the 1st October, we no longer have to pay negative interest on our cash. Overall, we have unrealised negative result of 3.2% on our cash holdings. I am not trying to say that this is a good result, but it could have been worse. Our risk averse approach as limited the losses but it has also cost us a return.
Approved deviations from the treasury statute. We agreed that it's okay to deviate from the return goal of the statute, and to deviate from strategic asset mix due to negative interest on full cash held with the banks, there are tying up cash in deposits does not add value.
This is raise the question what is the status of treasury project. It has been postponed due to the unrest in our service region. Work has continued to update and revise our treasury statute. Focus will be on index fund investing to ensure transparency, simplicity and diversification. As this is not our speciality, aim is to invest via a third party. To be clear at this point in time no formal decision has been taken to invest, but the goal is to at least partly offset inflation by generating a positive return.
And to be clear, we will not invest without formal approval of the Executive Board.
Adding this all up brings us to the expected surplus for 2022. The 2022 forecast based on the September numbers. The forecast as published in the activity plan and budget was a very simple forecast based on the August figures. The simplicity was due to a bit of lack of time on my part. The updated forecast reflects reality better.
Income is forecasted to be €1.5 million over budget and costs €900,000 under budget resulting in a surplus of 1.5 million including an estimated 1 million negative financial result. This would mean a €65 redistribution per LIR account and an average cost of LIR of €1,509.
To provide a bit of context, I have added the forecast in this overview to compare to previous years.
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We see a decrease in sign‑up fee income, a relatively stable membership fee income and increasing costs but similar to the pre‑Covid level of 2019.
Resulting in a low forecasted surplus over 2022 compared to previous years.
Capital and liquidity. We are balanced and healthy. A clearing house buffer of 32.5 million to respond to uncertainties. We are solvent and in a robust position financially. We have two financial concerns: Membership fee at risk and inflation. But with the precautions taken we remain ready for the future. Leaving the question for the GM: What to do with the surplus.
Our advice to the Executive Board, advise the GM to vote no for the resolution 1 and with that add the surplus to the clearing house. Reasoning is that we have an increase in financial uncertainty. The membership fee at risk and inflation. Both of which can have a significant impact.
For a complete overview, I have added this slide to show the expected result of a yes and a no vote for resolution 1, and with that, I will open the floor for questions.
AUDIENCE SPEAKER: Hello, Sander Steffann. I just want to mention something there you are talking about the budget. Over the last couple of years, I got the feeling that the NCC has become more and more formal in its communication and things felt a bit less friendly and a bit more stiff. And I can't really quantify this, it's more a belly feeling, but yeah, we are an association, we are a world working together for the same goals. So, also in terms of the budget, well, in this case the recommendation is to vote against giving back the money, but I'd rather not get back the money and have an NCC that just spends its budget more on helping its members and doing good stuff. So, yeah, keep up the good works. Thanks.
AUDIENCE SPEAKER: Dmitry. Just a quick check, you had 1500 projected average LIR cost. I saw that, correct. Right, so this is a projection of cost so basically you are saying that in the redistribution you are doing is just because we are spending last year is reserves right, on the forwarding so at so the point it's going to stop, so should we consider removing this whole redistribution at some point? What's your projection on that?
SIMON‑JAN HAYTINK: Would I not like to revise on removing the redistribution. I think it it's a very good way to keep ‑‑ I would not advise to remove the redistribution choice at the GM, because I do feel it's a very strong influence for the GM to decide on how we deal with that.
HANS PETTER: And if I can add to that, the redistribution is the result of an agreement with the tax authorities because anything that we add to the reserve is, we have to pay Dutch profit tax on, so everything we redistribute to members, well you have to pay your taxes on that redistribution. So I mean it's basically whether the Dutch government gets the money or whether your governments get the money, right.
For this year, we are looking at uncertainty so our recommendation is please add this to the reserves. But as you see, it's not a big amount of money, so, yeah...
AUDIENCE SPEAKER: To be clear, NCC kept some money after the tax had been paid but I got your point. Thanks.
AUDIENCE SPEAKER: Hello. In a private conversations Hans Petter has mentioned that RIPE has been financed AFRINIC's legal and PR campaigns, can you clarify this to the members, because I have not seen any publication in a joint stability fund being activated to the community, and if that was the case, if I have ‑‑ have RIPE NCC paid any of AFRINIC's legal cost or PR cost? If yes, then how much that was. If no, then just a clarification would be enough. Thank you.
HANS PETTER HOLEN: So, the RIPE NCC has not directly paid any of AFRINIC's legal cost. The NRO paid some of the legal costs for AFRINIC last year, not this year.
AUDIENCE SPEAKER: So, that was the last year financial budget, not this year. Okay, any of the amount declared in the item budget or is it putting under certain items.
HANS PETTER HOLEN: Networks that's under the NRO contribution.
AUDIENCE SPEAKER: Okay. Thank you.
SIMON‑JAN HAYTINK: If there are no further questions, then... I will hand over. Thank you.
(Applause)
ATHINA FRUGOULKI: Hello everyone. I am Athina, chief legal officer at the RIPE NCC, and I am going to present on the proposed amendments to the Articles of Association.
This time, we have three proposed resolutions for the amendments of the Articles of Association. It's resolution number 2, which introduces some changes required by Dutch law. Resolution number 3, which introduces the authority of the managing director to call for Executive Board elections if the Executive Board cannot do so.
And resolution number 4, is removal of the paper ballot requirements.
Let's see resolution number 2. It has two elements. This is the first proposed amendments is an introduction of a clarification imposed by Dutch law. "If one or more Executive Board members are prevented from acting or if they are in vacancy, then the remaining Executive Board members are temporarily in charge of the association."
If all Executive Board members are prevented from acting or they are in vacancy, then the RIPE NCC Managing Director is temporary in charge. And what we mean by he preventeded from acting we mean suspension, illness or not in contact for more than five days, inaccessible of contact for more than five days. This is the first element of resolution number 2. The other element has to do with conflict of interest of the Executive Board.
If one or more executive Board members have a conflict the current Articles of Association provide that the GM may designate one or more representatives. This has changed by law, and therefore we introduced this change in the articles.
So, it's removal of this provision and the introduction of another provision that suggests that if one or more members have a conflict of interest, then this member or members shall not participate in the discussion of and the decision making of the item where there is the conflict of interest and if no resolution can be adopted by the Executive Board, then this resolution may be adopted by the General Meeting.
That was the elements of resolution number 2.
Resolution number 3. It's about the authority of the Executive Board if the executive ‑‑ well the Executive Board has full authority with at least two members left. Currently, there is a provision that says that if the Executive Board has less than three members, the remaining members must convene a GM for the election of more Executive Board members. To that, we propose an addition that clarifies what happens if one or no Executive Board members are left in the Executive Board. In this case the managing director is the one that should convene a GM for the appointment of two or more Executive Board members. This is for resolution number 3.
Now let's go to resolution number 4. This is a removal of the paper ballot requirement. The current provision requires ‑‑ Telia allows members to have the option to vote either at the GM with paper ballots or by electronic means. We propose to remove this wording and to replace it with the wording according to which "The Chair may died that all votes shall be casted by electronic means" this way we do keep the options of paper ballots if needed but we can remove it also. Now we see that less and less members choose the paper ballot paper options anyway.
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These are the three proposed resolutions, but I would like to highlight is that unless this resolution is adopted, none of the rest can be adopted, because this is the changes by Dutch law. And if we go to the notary with other amendments without the amendments by Dutch law the notary will not notarise our Articles of Association.
Thank you.
AUDIENCE SPEAKER: One clarifying question, in resolution 3, could you bring that up. So, I guess we all can imagine where it's coming from. The question I have is why would one member not be sufficient because the sole purpose of that one member per the first clause would already be calling for the elections. Why would that have to be replaced by the executive director?
ATHINA FRUGOULKI: That's because executive Board does not have authority with one member left.
AUDIENCE SPEAKER: Hi. Great thinking because there are situations where force majeure or something happens. But can I just add and no disrespect to the managing director, put a time limit for when a GM needs to be called because ‑‑
ATHINA FRUGOULKI: Thank you for pointing this out. Because the provision says as soon as possible, it's very ‑‑ it's very specific.
AUDIENCE SPEAKER: I understand but no later than X number of working days is very important because as soon as possible, we don't want to be in a situation similar to AFRINIC mess. It's better to be very clear and very specific.
ATHINA FRUGOULKI: Thank you.
AUDIENCE SPEAKER: Jan Zsako. I have a question also related to the resolution number 3, it says "One or no EB members then the managing director convenes the GM to appoint two or more..." so if there is one left, why do we need two more necessarily? It's just a theoretical question.
ATHINA FRUGOULKI: With two members, the Executive Board has authority, can function. So, it is up to the discretion of the managing director to say okay, I can open one position, election for one position, and then it's up to the Executive Board itself to have further and other elections for more positions. That's the way of thinking.
AUDIENCE SPEAKER: Okay. So I did not read it as that, because it says "appointment of two or more" while if there is one left, one would be enough and you said that one would be enough. It's not a big issue, but it's just a theoretical question. Okay. Thank you.
AUDIENCE SPEAKER: Kurtis Lindqvist. I am a little bit confused with something you said, you said if there was only one Executive Board member left, they would not constitute the Board, or a functioning Board. Is that under the articles or under Dutch law? Because most legal systems do not allow a company to have no ‑‑ the company is insolvent at that point, it doesn't exist. Doesn't Dutch law take precedence over whatever the articles says.
ATHINA FRUGOULKI: I have to come back to you on that. I don't have off the top of my head.
KURTIS LINDQVIST: So me it sounds like we're trying to write something that it's any corporate law I have seen. I think we get a little bit careful to not get foul of Dutch law.
ATHINA FRUGOULKI: I can reassure that you everything that we propose has been reviewed by the notary so it is in accordance with the Dutch law.
AUDIENCE SPEAKER: Lieu an: There are a couple of comments I want to make. First of all, the previous commentator mentioned as we ever needs in the room needs to understand one fundamental difference AFRINIC and RIPE. AFRINIC is not an association, it is a private company guaranteed ‑‑ sorry, by guarantee, it's a private company by guarantee. So it's essentially a limited company. RIPE NCC is an association under Dutch law. So every member is kind of a shareholder of it. Of course the lawyer can correct me if I'm wrong on this. And that fundamental difference makes it a closely lot of difference when the remaining Board members happen, you know, less of occurring AFRINIC or less of occurring RIPE would be a wholesale different laws because AFRINIC is subject to company act and association in many countries is not subject to commercial company act. And that's one important difference I want to make here.
And secondly, that I think the GM is needed for appointment or election is probably the most fair process. If there was less of a core existed in the Executive Board, I believe there should be a general election happening in a matter of a few weeks so that the new Board would be quorumed in that way and that's the best process, thank you.
ATHINA FRUGOULKI: Thank you for your comment. I just would like to clarify that I'm not in a position to confirm any legal analysis about AFRINIC and the entity of AFRINIC.
AUDIENCE SPEAKER: No I'm not asking you. I am just pointing out a simple fact. It's a simple fact. AFRINIC is a private company by guarantee. And the RIPE NCC is an association. And everybody can verify this.
CHAIR: So I do not want to make any comments about AFRINIC at all, but I want to make it clear to the GM why we are proposing these changes and the changes has been proposed in writing and they are on the agenda and they are ‑‑ this is what we can vote on today. The reason these are in here is that we want to make sure that it's possible to hold a GM as soon as possible in a matter of days or weeks or whatever is practical in order to get a fully functional Board elected by the members, right. So if there were to happen that I would lose all of one of my Board members, of course we would call for a Board meeting to elect as many directors as practically possible. Now if we do this in a very short‑term it would be difficult to get a full Board so there is a requirement here for a minimum of two to get it up to functioning again, because you, as the member, may need more time in order to nominate suitable directors. But from my point of view, the most important thing is to get back into a situation where one has fully functional directors elected by the membership.
AUDIENCE SPEAKER: Sander Steffann. I think this is perfectly reasonable and thank you for this. This is a very sensible solution. And I think all references to AFRINIC are out of scope here.
AUDIENCE SPEAKER: Let me make it clear that all reference to AFRINIC is a something the community about organisational structure and that's a fundamental difference. And for the record, I am not against the proposal in any way. I am just want to make it clear to everyone that the current situation in AFRINIC does not impact on what we decide here because it's fundamentally two different type of organisation and why and all this history it's not for this meeting to convey, but I just want everybody to understand this. Thank you.
ATHINA FRUGOULKI: Thank you very much.
KARLA LIDDLE‑WHITE: I am a communications officer at the RIPE NCC and I am going to take you through the new voting platform, and the new procedure.
So, if you recall, registration overview. So, there was 19,848 eligible voters, 1722 votes were registered and that have a voter turnout of 7.4% with 77 corrupts. So, here is one of the maps which is by vote count. And then we also had one with the percentage of voters and this presentation will be on the GM pages, you can have a look at this a little bit later if you wanted to.
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So the new voting platform. Why did we do it? Why have we got a new platform? There were a few issues previously with the provider in both the November 2021 GM and the May 2022 GM. We had a few issues with the voting report if you were there, you might remember, and the verification page later on.
The previous provider was also in a completely different time zone, so that made getting technical support quite tricky, and after the May GM the Board and the RIPE NCC management supported the idea of looking at getting a new provider.
So, we began a search in our service region. This was to make sure that they were GDPR compliant and also in the same time zone. We looked at over 40 different providers in the service region and beyond, and three vendors matched our requirements, which included the incident run‑off calculation and the voting methods and our vote reporting. Assembly voting of identified as the best match.
They are based in Denmark. They were the first election provider in the country in 2021, and they support quite a few election events. So 6000 election events. 35 million voters in 75 countries. And the reason we chose Assembly Voting was again for the time zone and they matched our requirements and they are also working on a bespoke solution for us because we had some tricky requirements that not many voting providers could work with. And they have an easy to use UI. And enhanced security features.
So the security features were really interesting. They have end‑to‑end verifiability. Two factor authentication. They have a digital bulletin board which you will be able to see, I'll link it to the GM pages, where you can see all actions and activities that happen on the Board. They also have encrypted votes and opening and closing could key ceremonies with an independent trustee.
Now, these key ceremonies are really interesting. There was an election can only be opened after the ceremony and we have to basically bring these encrypted keys together for it to open. And this has to include an independent observer who holds one of these keys. And once the key ceremony has taken place, all subsequent actions are on the bulletin Board. This process is then duplicated for the closing ceremony.
So, what's changing for members who are voting?
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Members will still receive an mail with an electronic to the election platform. But there are a couple of new things I am going to detail here. For login members will have to login with two credentials. You'll get a registration number from us and then a link to the platform, which hopefully is already in your mail. You'll also have to download your voting receipt. And then as I said, the bulletin Board and the vote verification is carried out on an app that you will also have to download.
Now, the one thing that we haven't got at this GM which we will have in May, is the split voting. So, assembly voting do not support split voting where members can split their vote to vote on one ballot. People representing more than one member will have to vote multiple times at this GM but we won't have to in future. That's going to be implemented for the May GM.
So, how to vote:
If you are using paper ballots at this GM it's attendee only and you need to hand us your paper ballot before you leave the room.
If you are electronic voting, you can cast your vote until 9 a.m. on Friday.
For paper ballots, make a mark in the box only for each resolution; if you make more than one mark it's deemed invalid. You must hand it in before you leave the room.
Electronic voting. What does this look like? You'll see two mails. You should have received already your registration number from us, and then another mail you'll receive from assembly voting, and it's a link to the election platform which also includes your election code. So, you click vote know or if you have got plain text it will be a link. Click that one. And you'll get the nice new UI, and you'll have to populate that top box with your registration number. And then go through each resolution. Now, you have to do all your voting in one go on this platform to submit it. And then after you have voted, you can download the receipt. It's very simple, I have done it hundreds of times to test it, I hope you like it.
Now, the vote receipt does not record what choice you have made. You can ‑‑ but you can check that you have voted. So, on the bottom of the platform, you can go to the bulletin board, upload your receipt and then your anonymous vote will be highlighted in green on the bulletin board.
You can also verify your vote. So, this is like voting, putting it in the envelope and then going what did I vote for? And then opening the envelope again. Now, I haven't documented it here, but there is a lovely guide on the website on the GM pages where you can work out how to verify your vote or you can find me somewhere if you want to ask a question.
I have also documented all of this, how to vote, what I have just been through, in a PDF on the GM pages on how to vote page and I have also made a video of it as well, so you can go and have a look there.
Voting on the resolutions. There are four resolutions to be voted on. For resolution 1, it needs more than 50% votes yes to pass and on 2, 3 rand 4 it needs more than a two thirds of yes votes to pass.
Announcing the results: So the results will be announced on Friday and as we convene at half past ten, the Executive Board Chair will announce the results, and we will stream it live.
Anyone have any questions for me?
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Well that's nice. Thank you.
(Applause)
CHAIR: Thank you very much Karla. So ‑‑ oh, we have a question or comment?
AUDIENCE SPEAKER: Yes, sorry, I am Antony from the RIPE NCC, I have got a question here from Robert Scheck from GM BH. "It seems v6 wasn't a requirement for the new voting software, right?".
RUSS WHITE: We already thought of it.
AUDIENCE SPEAKER: The voting web page does not. Are you in touch on this in the near future? While the mail servers support v6 the actual voting web page does not.
SPEAKER: Okay. Thank you for that feedback, I'll talk to them about it because they did say they were dual stack. So, I'll have a look. Thank you.
CHAIR: So, thank you very much Karla. If there are no other questions, we can go to the last part of this first day of the General Meeting, and that's the voting on the resolution.
I will read the resolution so they are absolutely clear for everyone.
Number 1 "the General Meeting approves the redistribution of the excess contribution paid in 2022 by redistributing the RIPE NCC 2022 surplus to the membership in 2023."
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Resolution 2: Which is really important because without that we cannot really implement our Articles of Association, so again I would like to please you to approve this amendment.
"The General Meeting, in accordance with Article 21 of the Articles of Association, adopts the amendments to articles 10 and 11.5 of the Articles of Association as proposed and announced by the Executive Board on 28 September 2022.
Furthermore, the General Meeting instructs and authorises the Executive Board to perform or to have performed all that is required to have the amendments executed before a Dutch civil law notary."
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Resolution number 3:
"A proposal to give the management team the authority to call for Executive Board elections:
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"The General Meeting, in accordance with Article 21 of the Articles of Association, and provided resolution 2 is adopted, adopts the amendments to article 10.1 of the Articles of Association as proposed and announced by the Executive Board on 28 September 2022.
Furthermore, the General Meeting instructs and authorises the Executive Board to perform or to have performed all that is required to have the amendments executed before a Dutch civil law notary."
Resolution number 4 ‑‑ proposal to remove the requirement to have paper ballots for RIPE NCC General Meeting voting.
"The General Meeting, in accordance with Article 21 of the Articles of Association, and provided resolution 2 is adopted, adopts the amendments to Article 18 .5 of the Articles of Association as proposed and announced by the Executive Board on 28 September 2022.
Furthermore, the General Meeting instructs and authorises the Executive Board to perform or to have performed all that is required to have the amendments executed before a Dutch civil law notary."
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So, that's the end of the agenda. I will give a few minutes for some general comments. I see there is some requests for that.
SANDER STEFFANN: Thank you. One question that I have been wondering about for a while. We have all these sockets on mailing lists and for RIPE meetings and stuff like that, is there also a Code of Conduct for the Board and if so, do you have a pointer to it? Because we're all bound by Codes of Conduct, so I think it would be fair that the Board would do that for itself as well.
ATHINA FRUGOULKI: That's an interesting question and have very good one as well. The Executive Board is bound by the Dutch law to perform in line of ‑‑ in accordance with the law, with a duty of care which is whatever they do will be ‑‑ if they do something that is damaging to the association, they are in violation of this duty of care.
SANDER STEFFANN: Okay. But Code of Conducts go a bit further than that, so it would be just nice to set a good example.
The other one one is that at the last General Meeting, an investigation was started. We had some update that it was still in progress. I just want to express that I really urge the Board to get this over with as quickly as possible because these are all painful issues and I ask the Board to provide its full cooperation to this.
CHAIR: Thank you very much for the comment, I understand your frustration and I would like ensure that we are doing all we can to make this process happen. I understand your frustration.
AUDIENCE SPEAKER: Mick Nelson with VIE. Generic question for everyone, I suppose that I'm not looking for an answer for now but maybe for the next RIPE meeting or so.
The corporate sustainability corporative directive starts coming into force in January 2024, applies to organisations with more than 250 employees, 20 million turnover, starting to get close to that. I just wanted to make sure that was on your radar.
HANS PETTER HOLEN: Yeah. Thank you for that and we have taken note of that and we are looking into those aspects also, both of reporting and of actually taking actions.
AUDIENCE SPEAKER: Related to resolution number 4, if I remember correctly, it says that it is up to the Chair to decide whether you can vote on paper or not. Technically, it would make more sense to decide ahead of the GM because otherwise you have to prepare the paper ballots and hand them over and decide not to accept them any more. It's just a remark that you should probably publish in advance there will be no paper ballots. Thank you.
ATHINA FRUGOULKI: Yes, just a clarification. The Executive Board, every time, publishes well in advance a process for the whole voting procedure, including paper ballots until now, and of course about the electronic voting, so it will be clarified every time.
AUDIENCE SPEAKER: Thank you for that.
CHAIR: I declare that I will not allow the paper ballots unless there are some special circumstances that really requires them, just for the predictability.
Any other comments or questions?
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I don't see any. So, in that case, I declare opening the voting, so I'm sure it will be open in a few seconds or minutes.
The meeting is adjourned and we will reconvene on Friday, 28th October, at 10:30 here. Thank you very much.
The GM then adjourned.
RIPE 85
General Meeting
28th October 2022
10:30 a.m.
GM VOTING RESULTS AT 10:30AM
Voting results:
ONDREJ FILIP: So, ladies and gentlemen, can I ask you for a little bit of attention, even the group with Rudiger Volk there. No. Okay, now in this group, stop talking. So,lett me continue, the General Meeting, I have good news for you, because, you know, based on the experience from the last result presentation I prepared some dancing and singing performance but luckily we have the results, so this is not necessary, so you will not suffer that.
We had four resolutions, resolution number 4, which was about the redistribution of the excess contribution paid in 2022 and the will of the membership is to redistribute so the resolution is approved, it was 1,083 yes votes, 166 no and 20 members abstained.
Resolution 2 which was very important in order to have the other resolutions that follows, is also approved. We had 1,014 members in favour, 127 against and 128 abstained, this was the amendments of the articles. So the quorum was higher.
Resolution 3 which is about giving the management team the authority to call for Executive Board elections, we are not stuck in some situation where there are no people who can call the elections, and begin, resolution is approved, there was 1,108 members in favour, 53 against and 108 abstained so presently it's more than for the previous resolution, which, without it, this one wouldn't carry, that's how it is.
Resolution 4 which removes the requirement to have paper ballots and there were 1,082 in favour, 88 against and 99 people abstained. So with that, if I will be still a Chair next year in the Netherlands I declare we will not have paper ballots in the room.
(Applause)
And with that, I declare the General Meeting closed, and I'm really looking forward to seeing you in Netherlands next year, thank you very much.
(Applause)
LIVE CAPTIONING BY AOIFE DOWNES, RPR
DUBLIN, IRELAND