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FM FCO

TO DESKBY 28003OZ HONG KONG

TELNO 568

OF 27173OZ MARCH 92

INFO PRIORITY UKREP JLG HONG KONG

033771

MDHOAN 2107

177

PERSONAL FOR GOVERNOR FROM RICKETTS, HKD

171

172

YOUR TELNOS 911 AND 912: HMOCS ASSOCIATION

1.

3011

WE UNDERSTAND YOUR CONCERN THAT THIS SHOULD NOT PLAY BADLY

IN HONG KONG. BUT WE REMAIN UNEASY ABOUT IMPLYING THAT THE COMPENSATION ARRANGEMENTS WHICH WE ARE INTRODUCING WILL BE IN ACCORDANCE WITH HISTORICAL PRACTICE AND PRECEDENTS. YOU WILL NOTE THAT THIS FORMULA WAS NOT INCLUDED IN LORD CAITHNESS' LETTER TO THE CHIEF SECRETARY LAST SUMMER, OR TO MR CARTLAND THIS WEEK. OBJECTIVELY, THE SCHEME WE ARE PROPOSING IS NOT ''IN ACCORDANCE WITH' ' PAST SCHEMES. WE THINK WE CAN TAKE ACCOUNT OF YOUR DESIRE TO SHOW THAT THESE MEASURES ARE NOT UNIQUE

BY APPLYING THE REFERENCE TO PAST PRACTICE SOLELY TO THE CONSULTATION PROCESS. WE THEREFORE SUGGEST THAT THE FIRST PARAGRAPH SHOULD REMAIN ''I AM WRITING TO LET YOU KNOW OF PROGRESS ON ISSUES OF CONCERN TO HMOCS MEMBERS IN HONG KONG.' AND THAT THE SECOND PARAGRAPH IN YOUR TELNO 901 COULD HAVE

ANOTHER SENTENCE AT THE END AS FOLLOWS:

''THIS WOULD BE CONSISTENT WITH PAST PRACTICE, WHEREBY CONSULTATIONS WITH HMOCS OFFICERS HAVE TAKEN PLACE

AT THE TIME OF A CHANGE OF SOVEREIGNTY OF THE TERRITORY WHERE THEY HAVE BEEN SERVING.''

TT

WITH REGARD TO SECOND TUR, WE WOULD BE GRATEFUL IF YOU COULD CHANGE PARAGRAPH 1 MORE CLOSELY TO REFLECT THE ABOVE. WITH REGARD TO PARAGRAPH 3, WE DO NOT CONSIDER THAT HMOCS IS ENTIRELY A RESPONSIBILITY FOR HMG NOR THAT YOU SHOULD SAY THAT NO HONG

KONG GOVERNMENT FUNDS WOULD BE USED TO MEET HMG'S SPECIAL OBLIGATIONS. AS YOU KNOW, WE HAVE NOT RESOVLED HOW TO DEAL WITH STERLING SAFEGUARDS AND IN THE PAST THE RESPONSIBILITY HAS, INITIALLY AT LEAST, RESTED WITH THE GOVERNMENT EMPLOYING THE OFFICERS CONCERNED. GIVEN THE PRESENT STATE OF THE WHITEHALL DEBATE WE WOULD PREFER THE FIRST TWO SENTENCES OF PARAGRAPH 3 TO BE DELETED AND REPLACED AS FOLLOWS:

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