CONFIDENTIAL

transition in 1997. A collapse of confidence in Hong Kong would involve heavy financial and political costs for HMG

HONG KONG ASPECTS

5.

Although persons joining HKG since March 1985 have not

been able to become HMOCS officers, two key areas of the Civil Service in Hong Kong still contain substantial numbers

of HMOCS officers. In the police force, some 60% of superintendents and above are expatriates, and the majority

of these officers are also HMOCS members. In all there are

363 police HMOCS members and a further 260 police officers

who still have the option to become HMOCS members. In the administrative service, about one quarter (99) of all officers who occupy the middle and senior ranks of the Hong

Kong Government are HMOCS members. There are also some 40 judicial HMOCS members and some 280 others, mostly professionals. If large numbers of police officers were to

leave, the command structure of the Police Force would

collapse, and the Force would not be able to maintain law

and order. If there was a large scale departure of senior civil servants, our ability to administer Hong Kong

effectively could be undermined.

It could also encourage

others to leave and have a wider effect on confidence in the

Joint Declaration.

6. It is not possible to predict how many HMOCS officers might decide to leave if acceptable arrangements were not made, or when they might do so. But the Governor considers

that there is a real risk that several hundred senior and

middle-ranking officers will leave unless adequate

arrangements for HMOCS are announced soon.

7.

The Joint Declaration (like the constitutions of

territories attaining independence) contains good assurances about pay and pensions (repeated in the Basic Law). The

details are at Annex B. These guarantee pay and conditions of service "no less favourable than before" and payment of

NC3AAV/2

CONFIDENTIAL

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