Mr Wong said that the Hong Kong administration's preference was for the introduction of new local legislation, similar to the UK Act, which would fulfill the international obligations affecting the UK via Hong Kong under the four UN conventions. However, it would not be possible to have local legislation in place by the launching date. Hence, the proposed contractual arrangement between Hong Kong and ASIASAT which would be terminated as soon as local legislation was in place. The Hong Kong administration was consulting it's legal advisors on the feasability of a contractual agreement. The feeling at this stage was that the majority of the terms and conditions that might appear in a BNSC licence could be covered by a voluntary contractual agreement. This option would allow ASIASAT to launch on schedule.
Mr Inglis suggested that extension of the Act under section 2 (3) could provide a temporary expedient for the ASIASAT launch. Therefore, the ASIASAT licence could be subsumed under whatever subsequent arrangements were introduced to effect extension of the Act.
Mr Wong asked whether it was practicable for BNSC to issue a licence before 13 April. Mr Inglis replied that it was possible, but said that extension of the UK Act would have to be done by an Order in Council. Mr Chamberlain said that an Order in Council would have to be placed by 7 March for consideration by the Privy Council on 15 March.
It was agreed that the Act would have to be extended as a generality (i.e. "bodies incorporated in Hong Kong") rather than for a particular company.
Mr Wong said that a further option was for ASIASAT to incorporate in the UK i.e. to set up a holding company in the UK. Mrs Darvell asked what would happen post 1997 and stresses the difficulties of such a route. Mr Wong replied that after local legislation was introduced, ASIASAT could transfer back to Hong Kong. However, this would be a commercial decision and there were considerable tax incentives to remain in Hong Kong etc. It was agreed that this was not a viable option (particularly given the timescale).
Mr Wong noted that ASIASAT were planning to launch another satellite at the end of 1990 or beginning of 1991. This meant that Hong Kong would have to introduce new local legislation by the autumn and may have to start consulting the Chinese almost immediately (as this was a slow process).
Mrs Darvell suggested that the extension of the UK Act under section 2 (3) followed by a process of localisation in Hong Kong, might rouse unwarrented suspicions in the minds of the Chinese which might prompt them to be obstructive.
Mr Inglis said that consultation with the Chinese might be necessary in the licensing of ASIASAT, because under Article V of the 1972 Liability Convention the UK and the Chinese would be considered joint launching states. In the case of the potential Long March launch of AUSSAT the US had required the Chinese to agree an arrangenent under which the US were to be held harmless under international law. China had apparently accepted this condition. Consideration should be given to seeking a similar government to government agreement between China and UK to cover
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