TNAG-0759-FCO40-963-Manufacture-and-storage-of-explosives-in-Hong-Kong-1978 — Page 122

1 (CHINA) LID,

HONG KONG

IMPLICATIONS IF ICI PROJECT NOT SUPPORTED

1

APIENDIX 3

SECURITY

a) Strategic

We have been informed by Environment Dept that explosives fall

into a category of items of strategic importance similar to water, power and communications, and our understanding is that the Government normally requires these to be controlled by British or Hong Kong companies.

b) Military

Stonecuttera Island is a British Armed Forces base, and the presence of foreign nationals would jeopardise military security. The Army have expressed concern to ICI about this.

c) Safety

A foreign company is not well placed to review regularly and imple- ment the changing conditions of explosive manufacture/transport® imposed by UK military (CILSA) and civil (ESTC) authorities. It is ICI's understanding that UK regulations are more severe than regula- tions of most other countries, eg USA.

d)

Political

Any repercussions from Mainland China are likely to be less if manufacture is carried out by a British rather than a foreign company.

A

1

!

2. ECONOMIC

Existing ICI Business in the Far East

The profit from ICI's existing explosives operation in Hong Kong would be lost to the UK. Furthermore, exports from Hong Kong would put in jeopardy ICI-held markets in the Philippines and Taiwan. ICI currently sends back to the UK profits of around US$5 m per year from these operations.

b) ICI Exports from UK

Explosives accessories are supplied to Hong Kong, the Philippines and Taiwan from the UK with an annual value of around US$5 m per year. As a composite package of explosives and accessories is normally preferred by the customer, these exports would be put at risk.