XN000022-1996-10-23 — Page 4

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He also outlined the three parameters for co-operation:

First, that the arrangements for co-operation are fully consistent with the Joint Declaration and the Basic Law, and are in the interests of Hong Kong.

Second, that the authority and credibility of the Hong Kong Government are not undermined.

Third, that the morale and confidence of the civil service are not affected, and civil servants are not subjected to conflicting loyalties.

Mr Fung said the Government was determined to do all it could to ensure that the territory continued to prosper as a SAR under Chinese sovereignty after June 30, 1997 and to enjoy the high degree of autonomy promised in the Joint Declaration and enshrined in the Basic Law.

"To bring about a successful transfer of government, arrangements have been agreed for the continued employment of civil servants, the transfer of defence responsibilities and the transitional budget," he said.

Mr Fung, however, said some important work remained to be done. These include the programme for localisation of laws and the implementation of the Basic Law provisions on the right of abode in Hong Kong after June 30, 1997.

"Important questions over the future of the legislature, the continued appearance of Hong Kong before this Committee and the BORO also remain to be resolved," he said.

He stressed that the BORO incorporated into the domestic laws of Hong Kong the provisions of ICCPR as applied to Hong Kong and that it was fully consistent with the Joint Declaration and the Basic Law.

"There is no valid reason, upon the change of sovereignty, to alter the BORO or to restore to an earlier form laws which have been amended to ensure that they are in line with the Ordinance.

"In any event, decisions on these matters are for the Government of the Hong Kong Special Administrative Region and not for any other committee or body to make," he said.