CONFIDENTIAL

question of widening the register further by making

eligible ships of companies with a newly-established

place of business in Hong Kong could be considered.

A further change in the relevant Ordinance might well

be required then.

In our view the proposal would have the following

advantages:·

(i) it would silence or minimise in advance any

criticism that the Hong Kong register of

shipping had become a "flag of convenience'

with its attendant risk of reprisals against

both Hong Kong ships and Red Ensign ships

generally;

(ii) it would wholly answer the Hong Kong

Government's fears on crew accommodation and

safety equipment matters that it would be

"time-consuming and possibly impracticable"

to refer to DTI new questions requiring

resolution:

the spot;

most of these could be solved on

(iii) it would enable a much speedier solution of

"qualification" problems on manning.

An agreement on these lines would need very careful

handling here with both sides of the industry and we

do not believe that we could go further without

unacceptable difficulties with them. Mr Pao indicated

CONFIDENTIAL

/last week

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