SECRET
146515
MDHIA 6846
MEMBERS OF HMOCS WHEREVER THEY SERVE. THIS OBLIGATION HAS BEEN SET OUT IN 9154 AND 1960 POLICY STATEMENTS BY HMG. IN ACCORDANCE WITH THIS OBLIGATION AND AS ESTABLISHED THROUGH PRACTICE AND PRECEDENT IN ALL OTHER DEPENDENT TERRITORIES:
(A) HMG WILL INTRODUCE COMPENSATION ARRANGEMENTS (AND PERMIT
THEM TO RETIRE) WHEN THE SECRETARY OF STATE'S CONTROL OVER THEM PASSES TO A SUCCESSOR GOVERNMENT UPON THE CHANGE OF SOVEREIGNTY: AND
(B) HMG WILL MAKE ARRANGEMENTS TO PROVIDE FOR THE PROTECTION
OF PENSIONS OF FORMER HMOCS OFFICERS THROUGH THE
INTRODUCTION OF A FIXED STERLING EXCHANGE RATE ADJUSTED IN LINE WITH UK INFLATION.
THE HMOCS OBLIGATION HAS BEEN HONOURED WITHOUT EXCEPTION IN ALL BRITISH DEPENDENT TERRITORIES UPON A CHANGE OF SOVEREIGNTY. INSOFAR AS COMPENSATION IS CONCERNED, THIS HAS BEEN BY THE INTRODUCTION OF A COMPENSATION SCHEME UNDER WHICH OFFICERS WERE COMPENSATED AND COULD RETIRE WHEN THE CONSTITUTIONAL CHANGE OCCURRED. THE EXACT FORMAT OF THE COMPENSATION SCHEME VARIED FROM TERRITORY TO TERRITORY AND IN SOME CASES WAS CAST PARTLY AS AN INDUCEMENT SCHEME TO ASSIST IN THE RETENTION OF THESE OFFICERS BY THE SUCCESSOR GOVERNMENT. INSOFAR AS PENSIONS WERE CONCERNED THE OBLIGATION WAS HONOURED BY INTRODUCING STERLING PENSION SAFEGUARDS AND PROVIDING FOR PENSIONS TO BE UK INDEX LINKED.
THE OBLIGATION TO INTRODUCE SUCH ARRANGEMENTS IS A CONSTITUTIONAL ONE WHICH CANNOT BE AVOIDED. HOWEVER AS HMOCS IS THE RESPONSIBILITY OF HMG IT IS FOR HMG RATHER THAN HKG TO MAKE SUCH ARRANGEMENTS.
THERE ARE 723 HMOCS OFFICERS SERVING IN HONG KONG. OF THESE 469 ARE AGED CURRENTLY 50 OR BELOW AND MIGHT STILL BE EXPECTED TO BE IN SERVICE BY 1997. OF THE TOTAL, 368 ARE CURRENTLY SERVING IN THE RHKPF AND 107 IN THE ADMINISTRATIVE SERVICE. A NUMBER OF THESE OFFICERS, PARTICULARLY THOSE IN THE ADMINISTRATIVE SERVICE WILL BE AFFECTED BY THE NATIONALITY REQUIREMENT FOR THE PRINCIPAL OFFICIAL POSTS AS SET OUT IN THE JOINT DECLARATION AND THE BASIC LAW.
WE INTEND THAT IN THE CASE OF HONG KONG THE COMPENSATION SCHEME WILL BE CAST AS A COMPENSATION/INCENTIVE SCHEME. PART OF THE COMPENSATION WILL BE PAYABLE AS STRAIGHT COMPENSATION FOR THE