CONFIDENTIAL
NEEDS SOME CAREFUL THOUGHT: WE MIGHT USE AS A BASIS THE RETURNS COVERED BY APPENDIX I TO THE DIRECTOR OF MARINE'S NOTE ENCLOSED WITH HIS LETTER OF 1 JUNE BUT WE WOULD NEED TO TAKE ACCOUNT OF THE POSITION OF BRITISH COMPANIES SUCH AS JARDINES AND BUTTERFIELD AND SWIRES AND PRECLUDE COMMUNIST CHINESE AND TAIWANESE OWNERS WITH A BASE OF OPERATIONS IN HONG KONG FROM TAKING ADVANTAGE OF THE RED EMSIGN. AT A LATER STAGE, WHEN DISCUSSION WITH EEC COUNTRIES ARE FURTHER ADVANCED, THE QUESTION OF APPLYING THE CONDITIONS MORE WIDELY EG TO SHIPS OF COMPANIES WITH A NEWLY-ESTABLISHED PLACE OF BUSINESS IN HONG KONG, COULD BE CONSIDEREDGM A FURTHER CHANGE IN THE RELEVANT ORDINANCE MIGHT WELL BE REQUIRED THEN.
IN OUR VIEW THE PROPOSAL WOULD HAVE THE FOLLOWING ADVANTAGES:
(1) IT WOULD PERMIT A SPEEDIER AND MORE SATISFACTORY SOLUTION - OF ''QUALIFICATION'' PROBLEMS ON MANNING:
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(11) IT WOULD WHOLLY ANSWER YOUR DIRECTOR OF MARINE'S FEARS ON CREW ACCOMMODATION AND SAFETY EQUIPMENT MATTERS THAT IT WOULD BE TIME-CONSUMING AND POSSIBLY IMPRACTICABLE'' TO REFER TO DTI NEW QUESTIONS REQUIRING RESOLUTION: MOST OF THESE COULD BE SOLVED
ON THE SPOT:
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(111) IT WOULD SILENCE OR MINIMISE IN ADVANCE ANY CRITICISM THAT THE HONG KONG REGISTER OF SHIPPING HAD BECOME A FLAG OF CONVENIENCE'' WITH ITS ATTENDANT RISK OF REPRISALS AGAINST BOTH HONG KONG SHIPS AND RED ENSIGN SHIPS GENERALLY.
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AN AGREEMENT ON THESE LINES WOULD NEED VERY CAREFUL HANDLING HERE WITH BOTH SIDES OF THE INDUSTRY AND WE DO NOT BELIEVE THAT WE COULD GO FURTHER WITHOUT UNACCEPTABLE DIFFICULTIES WITH THEM. MR PAQ INDICATED RECENTLY IN INFORMAL DISCUSSIONS THAT POINT (1) AT LEAST WOULD BE ACCEPTABLE TO HIM AND I HOPE THAT DESPITE THE DOUBTS
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CONFIDENTIAL
/EXPRESSED
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