(c) Land Commission
12. The Sino-British Land Commission has continued to make good progress, reaching agreement on the accounting arrangements for the sharing of income from land sales and on the form and content of a number of important legal documents for use in land transactions in Hong Kong. Under the Joint Declaration, premium income from land transactions, after deductions for the average cost of land production, is shared equally between the Hong Kong Government and the future Special Administrative Region Government. To date more than HK$1-6 billion has been credited to the future Special Administrative Region Government's account. The Chinese side of the Land Commission manages this income in trust, through a Hong Kong Special Administrative Region Government Land Fund and an Investment Committee, both of which were set up in August 1986. The Fund is expected to continue to grow so that a very substantial sum will be available to the future Special Administrative Region Government in 1997. The Commission also reached agreement on the land disposal programme for the period. 1 April 1986 to 31 March 1987. The programme agreed was 57-58 hectares. As with the previous year, this was above the annual limit of 50 hectares specified in Annex III to the Joint Declaration. Thus for the second successive year the Land Commission has made sensible use of the provision in Annex III which permits flexibility in the application of the annual limit of new land to be granted.
(d) Nationality and Passports
13. Following debates in Parliament and consultation with the people of Hong Kong an Order in Council was made on 5 June 1986 under the terms of the Hong Kong Act 1985. This provides for persons who are British Dependent Territories citizens by virtue of a connection with Hong Kong to lose that status on 1 July 1997 but to be entitled to acquire before that date a new status, to be known as British National (Overseas), together with a British passport recording that status. The Order also makes provision to guard against statelessness. It provides for any British Dependent Territories citizens who lose that status on 1 July 1997 automatically to become British Overseas citizens if they have not acquired BN(O) status and if they would otherwise be stateless. The children of former Hong Kong BDTCs born on or after that date will also be British Overseas citizens automatically at birth if otherwise stateless. The grandchildren of former Hong Kong BDTCs will be entitled to be registered as British Overseas citizens if born stateless.
14. The Order will come into effect on 1 July 1987. Passports bearing the status of British National (Overseas) will be issued from that date.
15. During the passage of the Order through Parliament Her Majesty's Government took into careful consideration three specific requests made by the Legislative Council of Hong Kong: that the passports of BNIOs should contain an endorsement to the effect that visas or entry certificates were not required for visits to the UK; that ex-World War II service veterans in Hong Kong should be granted British citizenship; and that ethnic minority (ie non-Chinese) BDTCs should also be granted British citizenship. Her Majesty's Government agreed to the passport endorsement request in full. The majority of the 270 or so service veterans are not eligible under the British Nationality Act 1981 for registration as British citizens. However the Government agreed to consider sympathetically applications from the 60 or so eligible for British citizenship and agreed that any of the 270 could be admitted to the UK for settlement together with their dependants. Her Majesty's Government did not consider it right to accede to the request for British citizenship for ethnic minority BDTCs. Ministers took the view that the provisions of the Joint Declaration and the proposed Order in Council met fully the concern of this community to have both a recognised nationality status and a secure right of abode in Hong Kong, where they want to continue to live. However, Ministers, in recognising the concern felt among this community in Hong Kong, stated in Parliament that they would consider it an obligation upon any future government to treat with very considerable and particular sympathy the case for admission to the UK of any individual British national who, against all expectations, came under pressure to leave Hong Kong.
16. Once the Order had been made Her Majesty's Government initiated in September 1986 an extensive diplomatic exercise to explain to other countries the new status and the
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