TNAG-2669-FCO40-3866-Hong-Kong-Civil-Service-1993 — Page 11

SECRET

XCX(93)35

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We therefore judge that, in the present climate, any attempt to consult the Chinese would certainly be protracted and almost certainly fail to secure their agreement. The consultation process would in any case probably be rendered meaningless at an early stage by a successful court action, which would make the Chinese even more hostile. Ideally, the best course might be simply to implement the change without warning the Chinese, and thereby giving them a chance to demand consultation before it takes effect. This is however not a practical option, since the Chinese have for several weeks been asking for a briefing on localisation policy. We therefore propose to inform them about the proposed changes immediately before implementing them. However, we would also inform them that we shall be looking at longer term arrangements such as the eventual transfer of overseas officers to local pensionable terms, the feasibility of imposing a condition of Chinese language proficiency on transfer to local pensionable terms, and the idea of a common set of terms and conditions of service for local and overseas officers. The Chinese will be assured that we will consult them on these proposals which have implications on the SARG after 1997. The Chinese may demand consultation on the whole package, including the immediate changes. This demand would have to be resisted because the result would be that we would then be taken to court under the BOR, and probably lose.

FINANCIAL AND STAFFING IMPLICATIONS

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Some minor savings in fringe benefits, mainly in terms of leave and passages for overseas officers, may be achieved if the proposal to allow overseas officers to transfer to local terms is approved.

STAFF REACTION AND CONSULTATION

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Localisation is an emotive and divisive issue particularly in some professional grades and departments like the Legal Department and to a lesser extent the lands and works departments. The proposed change in policy to allow some overseas officers to convert to local terms is likely to be strongly opposed by the SNEOA and a number of local professional officers' associations. Other local unions may also join in as a sign of solidarity. In particular local staff associations will resent the fact, as they see it, that expatriates have enjoyed favourable conditions of service for years and are now obtaining immunity from localisation. They will also regard the offer of local agreement terms to former overseas officers in grades which do not offer the same to local officers as more privileged treatment for expatriates.