CONFIDENTIAL

8.

Given the sharp deterioration in the situation in recent weeks

a change of policy is almost certainly inevitable. The proposed new policy (known by the codeword* "Operation Watchman") strikes a

balance between deterrence and international acceptability. The

main risk is that it will fail to deter, initially at least, as

prospective refugees will still be tempted to try their luck. The population of those screened out and awaiting eventual repatriation

to Vietnam could be large and difficult to manage.

9.

For a new policy to work the cooperation of UNHCR would be essential; and Hong Kong are hoping that resettlement countries will

be willing to make a major new resettlement effort. UNHCR and the

United States would have misgivings: however UNHCR have been signalling that a change of policy could be tolerated provided that proper screening procedures are introduced. The attitude of Canada,

Australia and other settlement countries is likely to be more

understanding, but it is not at all clear what help over resettlement will be forthcoming. The position in international law

is not clear cut: further work will need to be done on this aspect

current view is that the proposed policy would not be an infringement of Hong Kong's international obligations, provided it was clear that there was genuine screening on arrival.

10. Future financing is likely to be a sore point. The Hong Kong

Government are under pressure from OMELCO to secure greater support from UNHCR. This could scarcely come at a worse time, given the

scale of other new activities (eg in Afghanistan) for which UNHCR

will have to find funds. We are considering with the ODA whether there is any scope for more of our existing UNHCR contribution to be

earmarked for Hong Kong.

CONFIDENTIAL

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