HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1239 OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 16 December 1992
The Council met at half-past Two o'clock
PRESENT
THE DEPUTY PRESIDENT
THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., Q.C., J.P.
THE CHIEF SECRETARY
THE HONOURABLE SIR DAVID ROBERT FORD, K.B.E., L.V.O., J.P.
THE FINANCIAL SECRETARY
THE HONOURABLE NATHANIEL WILLIAM HAMISH MACLEOD, C.B.E., J.P.
THE ATTORNEY GENERAL
THE HONOURABLE JAMES KERR FINDLAY, O.B.E., Q.C., J.P.
THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P.
THE HONOURABLE STEPHEN CHEONG KAM-CHUEN, C.B.E., J.P. THE HONOURABLE HUI YIN-FAT, O.B.E., J.P.
THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P.
THE HONOURABLE DAVID LI KWOK-PO, O.B.E., J.P.
THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P.
THE HONOURABLE SZETO WAH
THE HONOURABLE TAM YIU-CHUNG
THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.
THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P.
THE HONOURABLE MRS PEGGY LAM, M.B.E., J.P.
THE HONOURABLE MRS MIRIAM LAU KIN-YEE, O.B.E., J.P.
THE HONOURABLE LAU WAH-SUM, O.B.E., J.P.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1240 DR THE HONOURABLE LEONG CHE-HUNG, O.B.E. THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P. THE HONOURABLE MRS ELSIE TU, C.B.E.
THE HONOURABLE PETER WONG HONG-YUEN, J.P. THE HONOURABLE VINCENT CHENG HOI-CHUEN THE HONOURABLE MOSES CHENG MO-CHI
THE HONOURABLE MARVIN CHEUNG KIN-TUNG, J.P. THE HONOURABLE CHEUNG MAN-KWONG
THE HONOURABLE CHIM PUI-CHUNG
REV THE HONOURABLE FUNG CHI-WOOD
THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P. DR THE HONOURABLE HUANG CHEN-YA
THE HONOURABLE SIMON IP SIK-ON, J.P.
DR THE HONOURABLE LAM KUI-CHUN
DR THE HONOURABLE CONRAD LAM KUI-SHING THE HONOURABLE EMILY LAU WAI-HING
THE HONOURABLE LEE WING-TAT
THE HONOURABLE ERIC LI KA-CHEUNG, J.P.
THE HONOURABLE FRED LI WAH-MING
THE HONOURABLE MAN SAI-CHEONG
THE HONOURABLE STEVEN POON KWOK-LIM
THE HONOURABLE HENRY TANG YING-YEN, J.P.
THE HONOURABLE TIK CHI-YUEN
THE HONOURABLE JAMES TO KUN-SUN
DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1241 DR THE HONOURABLE PHILIP WONG YU-HONG
DR THE HONOURABLE YEUNG SUM
THE HONOURABLE HOWARD YOUNG, J.P.
THE HONOURABLE ZACHARY WONG WAI-YIN
DR THE HONOURABLE TANG SIU-TONG, J.P.
THE HONOURABLE CHRISTINE LOH KUNG-WAI
THE HONOURABLE ROGER LUK KOON-HOO
ABSENT
THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P. THE HONOURABLE PANG CHUN-HOI, M.B.E.
THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.
THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.
THE HONOURABLE RONALD JOSEPH ARCULLI, J.P.
THE HONOURABLE ALBERT CHAN WAI-YIP
THE HONOURABLE FREDERICK FUNG KIN-KEE
THE HONOURABLE MICHAEL HO MUN-KA
THE HONOURABLE LAU CHIN-SHEK
THE HONOURABLE GILBERT LEUNG KAM-HO
IN ATTENDANCE
THE HONOURABLE MRS ANSON CHAN, C.B.E., J.P.
SECRETARY FOR ECONOMIC SERVICES
MR MICHAEL LEUNG MAN-KIN, C.B.E., J.P.
SECRETARY FOR TRANSPORT
MR YEUNG KAI-YIN, J.P.
SECRETARY FOR THE TREASURY
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1242
MR MICHAEL SUEN MING-YEUNG, J.P.
SECRETARY FOR HOME AFFAIRS
MR ALISTAIR PETER ASPREY, O.B.E., A.E., J.P.
SECRETARY FOR SECURITY
MRS ELIZABETH WONG CHIEN CHI-LIEN, I.S.O., J.P. SECRETARY FOR HEALTH AND WELFARE
MR CHAU TAK-HAY, J.P.
SECRETARY FOR TRADE AND INDUSTRY
MR JAMES SO YIU-CHO, O.B.E., J.P.
SECRETARY FOR RECREATION AND CULTURE
THE HONOURABLE MICHAEL SZE CHO-CHEUNG, I.S.O., J.P. SECRETARY FOR CONSTITUTIONAL AFFAIRS
MR ANTHONY GORDON EASON, J.P.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS
MISS CHRISTINE CHOW KWAN-TAI, J.P.
SECRETARY FOR EDUCATION AND MANPOWER
MR TAM WING-PONG
SECRETARY FOR MONETARY AFFAIRS
THE CLERK TO THE LEGISLATIVE COUNCIL
MR CLETUS LAU KWOK-HONG
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1243 Papers
The following papers were laid on the table pursuant to Standing Order 14(2): Subject
Subsidiary Legislation L.N. No.
Commodities Trading Ordinance (Amendment of
Schedules) Order 1992 ......................................................................... 399/92
Hong Kong Airport (Restricted Areas) (Amendment)
Regulation 1992 ................................................................................... 400/92
District Court Civil Procedure (Fees) (Amendment)
Rules 1992............................................................................................ 402/92
Rules of the Supreme Court (Amendment) (No. 2)
Rules 1992............................................................................................ 403/92
Women and Young Persons (Industry) (Forms)
(Repeal) Notice 1992............................................................................ 404/92 Sessional Papers 1992-93
No. 37 — Chinese Temples Fund Income and Expenditure Account with Balance Sheet and Certificate of the Director of Audit
for the year ended 31 March 1992
No. 38 — The Accounts of the Lotteries Fund 1991-92
No. 39 — Secretary for Home Affairs Incorporated Statement of Accounts for the year ended 31 March 1992
No. 40 — Social Work Training Fund Thirty-first Annual Report by the Trustee for the year ending on 31 March 1992
No. 41 — Emergency Relief Fund Annual Report by the Trustee for the year ending on 31 March 1992
No. 42 — The Open Learning Institute of Hong Kong Annual Report 1991-1992
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1244
No. 43 — Queen Elizabeth Foundation for the Mentally Handicapped Report and Accounts 1991-92
No. 44 — Hong Kong Council on Smoking and Health Annual Report 1991-1992
No. 45 — Hong Kong Housing Authority Annual Accounts for the year ended 31 March 1992 and Balance Sheet as at that
date
No. 46 — Director of Social Welfare Incorporated Statement of Accounts for the financial year ended 31 March 1991
Oral answers to questions
Air quality objectives
1. MISS CHRISTINE LOH asked: Will the Government confirm whether the Programmes for Attainment of the Air Quality Objectives released by the Environmental Protection Department in late November 1992 represent firm commitments on the part of the Administration?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, yes, the Government can confirm that the programmes for the attainment of Hong Kong's Air Quality Objectives represent a firm commitment by the Administration to achieve the standards specified in the Objectives.
The Administration's overall policy objective for controlling air pollution is to achieve and maintain acceptable air quality standards. These standards, which are in line with, if not more stringent than, those adopted by the United States and other developed countries, are aimed at safeguarding the health and well-being of the community. Our immediate task is to achieve compliance with a set of air quality objectives for seven major air pollutants as soon as possible. These objectives are established in accordance with section 7 of the Air Pollution Control Ordinance and are published.
To achieve these objectives, the Administration has adopted a number of measures to control the emission of air pollutants at source with some success. For example, the implementation of the Air Pollution Control (Fuel Restriction) Regulations in April 1990 reduced the sulphur dioxide levels in Hong Kong by about 40%. For some areas near industrial centres the reduction has been as great as 90%. The attainment and maintenance of Air Quality Objectives for other pollutants, particularly nitrogen dioxide and total suspended particulates, will need more work to be done. The Environmental Protection Department (EPD) is now examining possible further measures. I expect these to be
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1245
addressed in the context of the next review of the White Paper on the Environment, which will be published in the middle of next year.
MISS CHRISTINE LOH: Mr Deputy President, could the Secretary please tell us the time frame which he has set to achieve these objectives? And secondly, in the paper presented to us, there is no mention of benzene which has carcinogenic effect; could the Secretary tell us what is being done on benzene?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, the objectives and their achievement are basically on an "as soon as possible" timing. The reason for this is that dealing with, if I may so put it, the second round of air pollution issues — by the second round I mean those beyond what were referred to in the White Paper specifically — involves some hard decisions for the community in terms of balancing environmental and economic issues. And we will, as I have said, be considering this second round of issues in the context of the review of the White Paper which we are commencing the report of which will be published in the middle of next year. And I am certain that amongst these the question of benzene will be included.
DR LEONG CHE-HUNG: In the second paragraph of his answer, the Secretary is talking about compliance with a set of air quality objectives. Would the Secretary advise whether, in working out the practicalities of enforcing compliance with air pollution objectives, the Government has included the costs the air pollution itself incurs in terms of the drain on public medical services, lost working hours and decreased productivity through illnesses, and damage to Hong Kong's international reputation?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, these are important issues and, as I have said, in deciding on environmental objectives and the pace at which they can be achieved, there are inevitably some difficult choices of balance to be met. I do not think any community has found these easy, and I do not expect that we will either. But we will have to make them.
REV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, in his main reply, the Secretary has mentioned that the Environmental Protection Department is examining some possible measures to reduce air pollution. Do they include further measures to encourage the use of unleaded petrol?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, the EPD are examining various options for reducing air pollution from several of the particular pollutants that are listed in the Hong Kong Air
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1246
Quality Objectives, such as sulphur dioxide particulates and nitrogen dioxide. I would like to list some options briefly. For sulphur dioxide, although considerable success has been achieved in reducing sulphur dioxide levels in Hong Kong, to ensure that these levels are maintained and to attain the required levels in the few areas where residential buildings are located very close to industrial chimneys, we are examining the feasibility of segregating industrial and residential land, and the feasibility of more stringent controls on air emissions from industries in these few locations.
For nitrogen dioxide, the principal challenge is how to evade air pollution from motor vehicles which arises because of heavy traffic in many areas and because the bulk of our vehicle fleet is composed of diesel vehicles — they account for 65% of road usage. We are therefore considering a number of measures to further control these motor vehicle emissions, including:
(a) A requirement to use higher quality automated petrol and diesel fuels. (b) More stringent emission standards for diesel vehicles larger than 2.5 tons. (c) How to encourage a reduced reliance on light-duty diesel vehicles. (d) More vehicle inspection and maintenance programmes.
(e) Higher penalties for smoky vehicles.
(f) A watching brief being kept on developments in the electric vehicle technology.
For additional controls to reduce particulates in the air, and apart from those that would be tackled by requiring cleaner vehicle emissions, the Administration is considering means to control dust emissions from construction activities, whether open burning of refuse should be prohibited, and how particulates from fuel burning by industry could be further reduced.
MRS PEGGY LAM (in Cantonese): Mr Deputy President, part of my question has been asked by Rev FUNG Chi-wood. But I still have a supplementary question to ask. Will the Administration inform this Council whether it would consider phasing-out diesel vehicles on the road?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, I think in the measures that I have referred to in the answer to the last supplementary question, there was reference to possible measures to encourage a reduced reliance on light duty diesel vehicles. This might well include the investigation of the possibility of phasing out.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1247
MR MAN SAI-CHEONG (in Cantonese): Mr Deputy President, will Policy Secretaries, in dealing with these issues, adopt a tolerant attitude towards air polluting manufacturers or major undertakings such as the Towngas or power companies for economic reasons? Or will they step up prosecutions and tighten the standards prescribed for these concerns?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, these are not decisions for a Secretary; these are decisions for the community. And, as I have already said, there are difficult decisions to be made, difficult balances to be struck. And in the end, as a result of our proposal to review the White Paper and consult on that review, we will be facing a community decision, and we will be facing, I repeat, difficult decisions as regards the choice between environmental requirements and desirable aims and economic realities.
MR FRED LI (in Cantonese): Mr Deputy President, the level of sulphur dioxide has been reduced considerably as a result of legislative control on fuels, but diesel vehicles are still a major cause of pollution, producing a lot of respirable particulates in the air. In the document submitted to the Legislative Council panel on environment, it was stated clearly that despite all means, the Administration has failed to achieve the objective of controlling the use of diesel vehicles. Could the Administration assure this Council that it would consider other options, such as encouraging taxis to use LPG (a measure adopted countrywide in Japan) so as to reduce pollution on the road?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, I think I can safely assure the Council that we will consider all reasonable options.
Legal aid review
2. MR SIMON IP asked: Will the Government inform this Council why in the current review of legal aid it has not included members of the legal profession in the Government's Review Committee?
CHIEF SECRETARY: Mr Deputy President, the Government is conducting a comprehensive review of the law, policy and practice governing the provision of legal aid services in Hong Kong. The legal profession will be involved and consulted during the review. At present, an inter-departmental working group comprising representatives drawn from the Administration Wing, Legal Aid Department, Legal Department, the Judiciary and Finance Branch is assembling the necessary facts and identifying issues and possibilities. The group hopes to complete this preliminary study in March next year. Thereafter, on the basis of
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1248
the preliminary findings of the working group, the Government would commence discussions with the legal profession and other interested public bodies. Their views will be taken into account before the recommendations of the review are finalized.
MR SIMON IP: Mr Deputy President, with great respect to the Chief Secretary, he has not answered the question. The question was why members of the legal profession had not been included in the Government's Review Committee, and the answer merely suggests that the legal profession will be consulted in relation to this very wide ranging and comprehensive review of legal aid. Would the Chief Secretary please care to answer my original question?
CHIEF SECRETARY: Mr Deputy President, I am sorry Mr IP does not think I have answered his question. I believed I had by explaining that what was going on at the moment was that a working group was assembling the necessary facts and identifying the issues and possibilities. We do not feel that it is necessarily appropriate to involve the legal profession in that phase of the review. I have made it very clear that once that phase is completed we will then consult the legal profession.
MR SIMON IP: Mr Deputy President, would the Chief Secretary therefore please reassure us that when the first phase of the work has been completed, then the legal profession will be fully involved in the process of review which will continue after the first phase?
CHIEF SECRETARY: Yes, Mr Deputy President.
MR WONG WAI-YIN (in Cantonese): Mr Deputy President, my question only covers a narrow scope and I hope it is within the Standing Orders. As regards the progress of the review, would the Secretary inform this Council which phase the review is in?
CHIEF SECRETARY: Mr Deputy President, the working group has studied a wide range of issues, including the financial eligibility criteria for the grant of legal aid, the appropriate levels of contribution from aided persons, the impact of the Bill of Rights on the provision of legal aid services, the need for legal advisory services, and ways of improving existing services. Amongst the issues yet to be studied by the working group are the existing legislative framework and the cost-effectiveness of the existing organizations responsible for the delivery of legal aid services.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1249
MISS EMILY LAU: Mr Deputy President, will the Chief Secretary inform this Council what other individuals or organizations, apart from the legal profession, will also be fully consulted?
CHIEF SECRETARY: Mr Deputy President, it is our intention, after we have completed the discussion with the Legal Department, that we will produce a short consultative document outlining our ideas of the way forward and ideas proposed by the legal profession as well, that is to say, a combined view. We will produce a document which will be available for public discussion.
Industry and Technology Development Council review
3. MR NGAI SHIU-KIT asked (in Cantonese): Will the Government inform this Council of the progress of the review on the role and jurisdiction of the Industry and Technology Development Council and advise whether the findings of the review will be published, and if so, when this will be done?
SECRETARY FOR TRADE AND INDUSTRY: The Industry and Technology Development Council was established early this year as the Government's main channel of advice on the overall development of industry and technology in Hong Kong. The Council has devoted part of its energies during its first year to a review of its role.
Members had a range of views, but it is probably fair to say that there is broad agreement that the Council should become more proactive, taking on a strong leadership role and helping to co-ordinate the provision of support for industry and technology development. The Administration is now wrestling with the difficult question of how best to take this matter forward, including whether there should be a change in the funding in this important area.
The Industry and Technology Development Council's advice is not normally published. However, I would be happy to keep this Council informed of further developments in due course.
MR NGAI SHIU-KIT (in Cantonese): Mr Deputy President, could the Administration give this Council more detailed information on: firstly, the practical problems causing the long delays in the completion of the review; secondly, whether the Industry and Technology Development Council will be reorganized or restructured in early 1993 following the stepping down of the Financial Secretary as chairman of the Council, and if yes, what the changes will be?
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1250
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, the Council, known for short as the ITDC, has done a great deal of thinking on this issue and, as I indicated in my main reply, has reached agreement on some broad principles. But we still have work to do on the detailed way forward and that will take some time. We are looking at ways in which the Council could play a more active role in co-ordinating the activities of various industrial and technological support agencies, without infringing on their autonomy. One option being considered is for ITDC to be responsible for channeling funds to the industry support programme in much the same way as the University and Polytechnic Grants Committee (UPGC) does to the tertiary education institutions. This sort of review obviously includes complex financial and organizational issues and that is why the review has not yet been completed.
As regards Mr NGAI's second question, I can confirm that, come January 1993, the Financial Secretary who is the current chairman of the ITDC will indeed step down and be replaced by a non-official chairman who has yet to be appointed. Since we have not yet completed the review of the role of the ITDC, I do not think that at that stage there will be any change in the role or function of the ITDC, or indeed any reorganization. But once we have completed the review, we would then consider how the reorganization, if any, is to be carried out, and when.
DR SAMUEL WONG: Mr Deputy President, could the Secretary for Trade and Industry inform this Council whether the current role of the ITDC covers the education and training for technologists, and if not, why not?
SECRETARY FOR TRADE AND INDUSTRY: The word "role", Mr Deputy President, has a very wide meaning, and obviously the ITDC, in looking at its own role, will also look at the question of training. And that is one of the reasons why the Secretary for Education and Manpower is a member of the ITDC.
MR HENRY TANG: Mr Deputy President, would the Secretary care to elaborate on two points in his main answer. In the second paragraph, the Secretary says, "whether there should be a change in the funding in this important area". What does he mean by "change in funding"? And in the last paragraph, "in due course" — when is "in due course"?
SECRETARY FOR TRADE AND INDUSTRY: Mr Deputy President, in my reply to an earlier supplementary, I have already explained that one of the options being considered is for the ITDC to be responsible for channeling funds to the industry support programme in much the same way as the UPGC does to the tertiary education institutions, and that is one of the options covered in my reply. As regards the term "in due course", it was used because we have not
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1251
fixed a firm date for the completion of the review, but we do hope to reach agreement on the way forward as quickly as possible. And in the meantime the Council will, of course, continue with its regular programme of work.
Non-franchised bus services
4. MR WONG WAI-YIN asked (in Cantonese): Will the Government inform this Council whether there is any control mechanism for non-franchised bus services, for example, those provided by some private and public organizations for the residents of public and private housing estates, over the level of the fees charged and the quality of services rendered?
SECRETARY FOR TRANSPORT: Mr Deputy President, under the Road Traffic Ordinance and its subsidiary legislation, a passenger service licence is required before a non franchised bus service can be operated. In considering an application for such a service, the Commissioner for Transport is required to take into account not only the need for the proposed service, but also such operating details as stopping points, routing, fares and frequency. These details are normally specified in the licensing conditions of the licence subsequently issued. They can only be varied with the prior approval of the Commissioner.
In the case of a non-franchised residents bus service, operating details are normally agreed between the operator and the residents concerned and included in their joint application for the service. Thus, the fares, routing and other operating details included in the licensing conditions reflect the agreement by the residents themselves or their authorized management agent.
Apart from general monitoring by the Transport Department, the residents themselves invariably monitor the fares and quality of such a service. Residents may change the operator if they are dissatisfied with either the fares or the quality of service provided. Failure to comply with the licensing conditions may also result in suspension or non renewal of the licence.
MR WONG WAI-YIN (in Cantonese): Mr Deputy President, it appears to me that the Secretary is trying to evade the more important issues in his reply. For instance, the third paragraph of his answer mentioned that residents can change the operator if they are dissatisfied with the fares or the quality of service. We all know that at present there are two types of bus services for residents. One is run by residents groups such as mutual aid committees and residents can therefore monitor the fares and the services provided. The other however is operated by developers or management agencies of large private housing estates such as Fairview park and Kingswood Villas. These are not residents groups. Can the Secretary inform this Council how residents can monitor the fares and services of these non-franchised residents bus services operated by developers
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1252 or management agencies? What role does the Transport Department play in this respect?
SECRETARY FOR TRANSPORT: Mr Deputy President, as I said in my main reply, the basis for the Commissioner approving such services is normally the mutual agreement between the residents themselves and the operator. I believe that the case quoted by Mr WONG is exceptional in that, in that particular case in Yuen Long, the service has to be arranged between the management and operator because of the management retaining ownership of the access to the housing site in question. This, of course, is a matter between the residents and the owner concerned and it is not a transport issue. But in general, to reassure Members, out of the 85 services operating for residents in the territory, there are only three cases of complaint compared with over a hundred cases in the past few years, and of these only two concern fares relating to the one service at Fairview Park.
DR LAM KUI-CHUN: Mr Deputy President, would the Secretary for Transport give us an idea of whether such non-franchised bus services effectively supplement the franchised services or merely contribute to clogging up the roads?
SECRETARY FOR TRANSPORT: Mr Deputy President, I believe that these services are supplementary to the basic services provided by franchised bus companies and the railway companies. They are very small in number but, in general, where these are welcomed by the residents the Government's role is to support such services, provided these are agreed between the residents and the operator.
MRS MIRIAM LAU: Mr Deputy President, I note that the Secretary in the second paragraph of his reply states that operating details of these bus services "are normally agreed between the operator and the residents concerned". I note that the world "normally" is used in contrast to the word "invariably" used in the third paragraph. Would the Secretary inform this Council what happens in the abnormal case when operating details are not so agreed?
SECRETARY FOR TRANSPORT: Mr Deputy President, the only exceptional case, as I can recall, is the one in Yuen Long I referred to. That is exceptional because of the ownership rights of the management of that particular housing estate. Otherwise, all the services are based on agreement between the residents and the operators.
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DR TANG SIU-TONG (in Cantonese): Mr Deputy President, I would like to follow up the question on Fairview Park. Will the Administration inform this Council whether there are ways to allow residents' participation?
SECRETARY FOR TRANSPORT: Mr Deputy President, I believe this is really a matter between the residents and the owner of that particular estate. As far as we are concerned, we will certainly do our best to ensure that the residents are consulted, and I am considering asking the Commissioner for Transport to include in the conditions of the licence a term to the effect that the operator should consult the residents. That, however, may not be a fully effective way to solve the problem because consultation does not mean that the residents will all agree; but this is the best we can do in the meantime. But I understand that the Secretary for Home Affairs is considering amendments to the law to enable owners of different bodies to incorporate and thus to make more effective use of their powers.
DR CONRAD LAM (in Cantonese): Mr Deputy President, can the Secretary inform this Council of the role the Housing Department plays in approving non-franchised residents bus services? Does the Department have the power to veto agreements reached between the Transport Department and the residents concerned?
SECRETARY FOR TRANSPORT: Mr Deputy President, I believe that the same principle applies to those services operating in public housing estates, which is that it is a matter between the residents and the operator. In this connection, the Housing Department must play a role in ensuring that the residents concerned are consulted and a general agreement is reached before the services are started.
MR TIK CHI-YUEN (in Cantonese): Mr Deputy President, we understand that a lot of private housing estates are served by private roads to which public transport have no access. Will the Administration inform this Council whether closer monitoring is not contemplated because the Administration fears that doing so may curtail the services when bus operators find that they cannot make a profit, and in that circumstance no public transport would be made available to the residents?
SECRETARY FOR TRANSPORT: Mr Deputy President, I believe this is really a matter outside transport; it is a matter between the residents and the owners of the housing estates concerned. So far as transport is concerned, I will repeat what I said, which is that we will ensure that services provided are agreed mutually between the two parties before the Commissioner grants licences for such services.
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MR FRED LI (in Cantonese): Mr Deputy President, in the third paragraph of his reply, the Secretary mentioned that there was general monitoring of non-franchised bus services by the Transport Department. Can the Secretary inform this Council what kind of monitoring he was referring to?
SECRETARY FOR TRANSPORT: Basically, there are two ways of monitoring the services by the Transport Department. The first is by acting on complaints from the residents themselves, and the second is through random inspections. And of course the vehicles are subject to annual examination before we renew their licences. Statistics perhaps can give an indication of the kind of monitoring we have imposed on these services since 1987. In general, the number of complaint cases concerning the quality of service is rather small. For instance, in 1987 there were 14 cases only, and in 1989, 40 cases. The number has risen slightly because of the increased number of services operating between these estates — they have increased to 78 up to November this year. But in general we do not feel that the situation is unsatisfactory.
Organ transplants
5. DR HUANG CHEN-YA asked (in Cantonese): In view of the recent death of a former policewoman LEE Mei-sze as a result of failure to secure suitable organs for heart-lung transplant and due to the substantial number of patients still awaiting organ transplants, will the Government inform this Council:
(a) what plans are in place to develop amongst the general public a proper understanding of and a sense of obligation in organ donations;
(b) whether legislative measures will be introduced to meet the need for a ready supply of transplant organs?
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, in promoting community awareness about organ donation, we have mounted this year a major publicity and public education campaign. The Department of Health, in co-operation with professional bodies, public utilities, community groups as well as other government departments, has launched a multi-media effort. It has involved no less than 10 campaigns and publicity drives. The Department's Central Health Education Unit also holds talks and provides exhibits to community organizations. At regular intervals, it operates a 24-hour hotline at Tel: 838 3232 to offer information on organ donation. Organ donation cards are distributed throughout the territory at district offices, government departments, hospitals and clinics, and during the campaign period, also through banks, department stores and supermarkets, or whenever any community group requests them. We have brought the message into homes via television, radio and personal appeals. For the first time in Hong Kong, since
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Easter this year, more than 3 million donor cards have been distributed. For example, individual cards have been addressed to Housing Authority tenants and via the rating bills to private property owners.
Indeed, our past efforts are showing some positive results. For example, in 1989, for every 10 potential donors we approached, we were successful in getting only one donor. This year, we have improved the rate to one in three. But this is still not good enough.
We believe the answer lies in public education and in attitude change. We will intensify our efforts in concert with concerned groups and community organizations.
As for part (b) of the question, the Medical (Therapy, Education and Research) Ordinance already provides for the removal of a person's organs to be used for transplant after his death under prescribed circumstances. In brief, these are when a donor either consented in writing at any time or consented orally in the presence of two or more witnesses during his last illness. Alternatively, the next of kin of a deceased person may consent in writing, as long as the deceased had not indicated any previous objection to being a donor (that is, not opted-out) and his spouse, child or parents do not object to the donation.
Earlier this year, at about Easter time I introduced the Human Organ Transplant Bill to provide, inter alia, for organ donation by living relatives and spouse and for the setting up of a Human Organ Transplant Board. This is now being studied by an ad hoc group of this Council.
DR HUANG CHEN-YA (in Cantonese): Mr Deputy President, we all know that there are a lot of patients awaiting organ transplants at present but the actual number of transplants is just very few. Let's look at the current situation in Hong Kong where we have over 1 500 kidney patients receiving dialysis whereas the number of patients kidney transplant was only about 50 over the past four years. The fact that there is no increase in the number of transplants shows that although the Government has done quite a lot on this, the result is still unsatisfactory and further improvement is to be made. Will the Administration inform this Council whether an Organ Transplant Consultancy Group will be set up to plan educational programmes of organ transplants, revise and consolidate relevant provisions and co-ordinate the development of organ transplants?
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, it is correct to say that the number of kidney patients who are receiving dialysis in public hospitals in Hong Kong is over 1 000, but not every patient receiving dialysis is suitable for receiving a transplant, and not every donation is harvested. In the Bill before this Council around Easter time there is, as I said,
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1256
a proposal for the setting up of a Human Organ Transplant Board. As for the terms of reference of that Board, I remain to be advised. But in reality, Mr Deputy President, organ donation is an act of caring and generosity; it is a gift of life. As I said in my main reply, it is essential to pave the way with publicity and public education. By signing a donation card, the party signing pledges a gift of life. To persuade others, we do not need a "Community Board"; we need every individual in the community to participate, to set a good example. We need to set a good example ourselves by signing up. As one who has a heart, I think in the right place, and a card, I think in the right pocket — which is my left pocket — I appeal to you, Honourable Members, to show a good example by pledging support, by carrying your card. The best gift to give at Christmas and New Year is the gift of life.
DR LEONG CHE-HUNG: Mr Deputy President, in an answer to a Legislative Council question in relation to organ donation at the sitting on 30 January 1991, the Secretary for Health and Welfare had this to say, and I quote:
"Additional measures are being considered with a view to progressing towards an opting-out scheme for organ donation in the long term."
Could the Administration reconfirm to this Council that this is still the long-term objective? If the answer is in the affirmative, will the Secretary attempt to propose a timetable and the direction she aims to take to obtain the support of the Hong Kong people towards this opting-out scheme?
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, I confirm that it remains our objective to do what we can to promote organ donation as an activity in Hong Kong, as an act of love and generosity by individuals. As I said in my main reply, the existing Medical (Therapy, Education and Research) Ordinance already provides for a form of opting-out. Let me explain here what opting-in and opting-out is, in layman's terms. Opting-in is a positive indication, like carrying a card, pledging that one has opted to donate. Opting-out is: if one does not say no, it is implied that one has said yes. To achieve anything in Hong Kong, I believe we need to have community support, massive community attitudinal support. Our current law, it can be argued, combines the best of all systems. For example, it provides for positive indication, that is, opting-in; it allows for opting-out, as I referred to in my main reply; it also includes a provision for a required request, that is to say, the need to obtain the permission of relatives regardless of a card.
DR CONRAD LAM (in Cantonese): Mr Deputy President, the most suitable donors of organs are those with brain death as a result of cerebral haemorrhage or cerebral trauma. But their families usually refuse to donate the organs of the deceased because they cannot accept the fact of brain death. Does the
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1257
Administration have any specific plans to promote the understanding of brain death? If not, will the Administration consider that?
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, as I said, we are concentrating our action on promotion and education to pave the way for better understanding by the community of the individual person's moral responsibility to show generosity and caring. In this respect, I am assuring Members of this Council that we will step up our effort in this direction.
MR HOWARD YOUNG: Mr Deputy President, speaking as a person who — and in fact my whole family — has opted-in by signing such cards, I must admit that one does not always remember to keep it in the right pocket or wallet. Does the Government have any estimate or is there a ball-park figure as to how many of the 3 million cards distributed have been actually signed? And is it feasible to set up some sort of a system or registry where, in respect of people who have signed but do not have the card on them, there is some way of checking in case it is needed? That will probably help.
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, I think the signing of a card and the promotion given by the Government in the campaign for the signing of the card has actually harvested some good results, as I said in my main reply. It is because since 1 January our Transplant Co-ordinator has approached the relatives of 51 patients for consent and in 18 cases relatives have actually consented to organ donation. And as regards the actual donations in Hong Kong, the number is unclear, but, according to the report, between last year and this year our Hong Kong Eye Bank has collected 31 corneas from one hospital alone which is equivalent to the total number of corneas collected in the preceding eight years. So, while I have not got the figures as to how many people have signed the cards distributed to them, neither do I have statistics indicating how many people are carrying their signed cards — because I know a number of Members of this Council have signed their cards with many witnesses but I do not know whether they are carrying their cards — I feel that the actual community attitude is very important. Only a small proportion of potential donors' organs will be harvested, and not all of those organs donated will be suitable for a transplant. So I think the best way forward is still one of campaigning for acceptance.
MR MAN SAI-CHEONG (in Cantonese): Mr Deputy President, I understand from the Administration's reply that a lot has been done on publicity and public education. Has the Administration considered taking long-term measures to educate our new generation through school channels, to educate parents through students and to publicize through textbooks and other avenues so as to commend this programme of love and caring to all?
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1258
SECRETARY FOR HEALTH AND WELFARE: Mr Deputy President, I think it is a very good idea. In the comprehensive campaign we have conducted from February this year, we have concentrated on the community through community organizations. We have held a number of exhibitions in public housing estates, we have got television programmes, but I think the Health Education Unit in future years should also concentrate on publicity and education through school channels. I thank Mr MAN for the suggestion.
Special levy on securities transactions
6. MR CHIM PUI-CHUNG asked (in Cantonese): Will the Government inform this Council whether it has any plan to speed up the recovery of the $2 billion made available to rescue the Hong Kong Futures Exchange during the 1987 stock market crash, so that the special levy currently imposed on securities transactions could be withdrawn?
SECRETARY FOR MONETARY AFFAIRS (in Cantonese): The Government has no plans to speed up the recovery of the outstanding credit facilities (the Lifeboat) extended to the then Hong Kong Futures Guarantee Corporation Limited.
However, I am pleased to inform Members that the bulk of the loan has been repaid, and that the outstanding amount would be fully repaid by early 1994, depending on the market turnovers. The Securities and Futures Commission is currently formulating legislative proposals to recommend to the Government to provide for an orderly wind-down and elimination of the Special Levy. Thus we feel that there does not appear to be a need, nor would it be appropriate, to tamper with the existing statutory structure of the special levy to artificially accelerate the loan repayments.
MR CHIM PUI-CHUNG (in Cantonese): Mr Deputy President, the Acting Secretary has said in his reply that the bulk of the loan has been repaid; how much has actually been repaid? Secondly, as regards the special agreement reached between the Administration and a listed company, what is the position to date in relation to the recovery of the loan? Thirdly, the Administration has used the words "tamper with" in its reply; is the current levy reasonable or has it "tampered with" the established principles of Hong Kong as a financial centre?
SECRETARY FOR MONETARY AFFAIRS (in Cantonese): Mr Deputy President, of the $2 billion loan, $1.37 billion has been repaid, and the outstanding amount is $610 million.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1259
Secondly, I believe what Mr CHIM referred to is one of the loans on which the Administration and the company concerned have not been able to reach an agreement. The amount due is $750 million, and $449 million has so far been repaid.
As regards the special levy, the sum was set in 1987 but the levy on each futures contract was subsequently reduced in 1990 from $10 to $5, having taken into account the views of the market and the two Exchanges. As we considered that the futures and securities markets were very important and inseverable parts of the financial framework, we had, in our move to rescue the market, consulted the two Exchanges on this levy rate.
In preparing the answer to Mr CHIM's question, I have consulted people in the market and the executives of the two Exchanges. They agreed and assured me that the special levy was not what concerned them most at the moment.
MR JAMES TO (in Cantonese): Mr Deputy President, after recovering the $2 billion made available to rescue the Futures Exchange, will the Administration consider continuing the levy so as to meet contingency needs, thereby ensuring that the market will continue to operate on a sound basis?
SECRETARY FOR MONETARY AFFAIRS (in Cantonese): Mr Deputy President, I can assure Members that the Administration does not have any plan to continue the special levy after the $2 billion loan is fully recovered. As regards safeguarding the market operation, we have since 1987 introduced a series of measures for improving the market operation. So we see no further need to continue the special levy for the purpose of maintaining the market operation.
DR PHILIP WONG (in Cantonese): Mr Deputy President, when the loan was provided, it was understood that it was to be repaid by the Futures Exchange and the Hong Kong Stock Exchange on a fifty-fifty basis. For the sum of over $1.3 billion that has been repaid, how much actually came from the Stock Exchange?
SECRETARY FOR MONETARY AFFAIRS (in Cantonese): Mr Deputy President, I do not have the figures at hand, but I could provide Dr WONG with a written reply. (Annex I)
MR ROGER LUK (in Cantonese): Mr Deputy President, when will the Administration expect to recover the $2 billion in full?
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1260
SECRETARY FOR MONETARY AFFAIRS (in Cantonese): Mr Deputy President, repayment of the $2 billion depends very much on the market performance. On the basis of turnover of the previous year, it is hoped that the $2 billion can be fully recovered by early 1994.
MR CHIM PUI-CHUNG (in Cantonese): Mr Deputy President, may I refer to the reply of the Acting Secretary. We all know that the 1987 stock market crash was due to the faults of the Hong Kong Futures Exchange. So in the first place, it is very unfair to ask the stock investors to repay such an amount of loan. I would say the then Administration, and that is the existing one, made a very wrong decision at that time. So I would ask the Acting Secretary to give an elucidation on the words "tamper with" he used in his reply when he said "to tamper with the special levy", because to discontinue the special levy is what should be done and not an interfering act.
DEPUTY PRESIDENT: I think you are being asked to explain what you mean by "tamper", Secretary.
SECRETARY FOR MONETARY AFFAIRS (in Cantonese): Mr Deputy President, the Administration has considered the affordability of the market in setting the rate for this special levy. At the outset we tried to set the levy at $10 for each futures transaction. Trading on the Futures Exchange however was sluggish thereafter and remained so for a long period. As the Futures Exchange was considered to have a very important role to play in the financial sector, a proposal to reduce the levy was raised and accepted in 1990, as I have mentioned in my reply. In fact both the Futures Exchange and the Stock Exchange had been approached on the level of levy and they found it reasonable.
Members must bear in mind that the Futures Exchange is subject to fierce international competition. Members might have noted from newspapers that Singapore intended to introduce Hong Kong Futures and the Hang Seng Index Futures on its market. In these circumstances, an exceptionally high levy will severely weaken the competitiveness of the Hong Kong Futures Exchange, and greatly affect Hong Kong's financial sector in the long run. When I used the words "tamper with", I intended to say that the existing levy is reasonable to the two Exchanges and will not be an excessive burden on the market. I did not intend the two words to have a subversive meaning.
MR JIMMY McGREGOR: Mr Deputy President, could the Secretary say whether the repayments attract interest, and if not, whether there is any damage to the public revenue?
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1261
SECRETARY FOR MONETARY AFFAIRS (in Cantonese): Mr Deputy President, all the repayments have included interests.
Written answers to questions
Hospital Authority's terms of employment for staff
7. DR LAM KUI-CHUN asked: At the time when the Hospital Authority (HA) took over the management of public hospitals and institutions, serving hospital staff were offered an option to bridge over to the Authority's terms of employment or to remain on civil service terms or terms offered by subvented organizations. Will the Administration inform this Council:
(a) of the percentage of those eligible staff who have opted for the HA's terms of employment as at 30 November 1992;
(b) whether the present arrangement for HA to operate on two co-existing sets of terms of employment would incur more expenditure than to operate on just either one of them, and
(c) if the answer to (b) is in the affirmative, of the additional expenditure incurred for the past 12 months and the estimated annual additional costs for the years 1993 to 1995, expressed in dollar terms and as a percentage of the total staff costs of the HA?
SECRETARY FOR HEALTH AND WELFARE: My answers, seriatim, are as follows:
(a) As at 30 November 1992, 61% of eligible staff have opted for Hospital Authority employment terms. Detailed figures are summarized at Annex.
(b) and (c) The HA remuneration package is based on the principle of comparable cost to the employer, that is, that it should be similar in cost to civil service terms. Additional provision has been necessary to facilitate offer of HA terms to ex-subvented staff. The offer of an option to all eligible staff is considered an equitable arrangement, to safeguard their legitimate and reasonable interests.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1262 Annex
Number of eligible staff opted for HA employment terms position
as at 30 November 1992
No. of
eligible staff
No. of
staff opted
Ex-government
hospitals
(excluding general grades staff)
Ex-subvented
hospitals
20 718 8 024 (39%) 13 062 12 541 (96%)
Total 33 780 20 565 (61%)
Foot and mouth disease
8. DR TANG SIU-TONG asked (in Chinese): In view of the outbreak of foot and mouth disease which is rampant in farms all over the New Territories, will the Government inform this Council what measures are in hand to help pig farmers control the disease and, secondly, what effect it would have on the health of those people who have by chance consumed the meat of the infected pigs?
SECRETARY FOR ECONOMIC SERVICES: Foot and mouth disease is endemic to Hong Kong and other places in Southeast Asia. An effective and relatively inexpensive vaccine is readily available and many pig farmers in Hong Kong have vaccinated their animals as a preventive measure. The recent outbreak of the disease was due mainly to the failure of some farmers to vaccinate their pigs.
The Agriculture and Fisheries Department is assisting in the control of the disease by maintaining contact with vaccine manufacturers and their local agents so as to ensure sufficient availability of vaccine and by sending samples of local viruses to the World Reference Laboratory for Foot and Mouth Disease for testing purposes.
As pigs are inspected for disease before they are slaughtered for human consumption, the likelihood of infected pork reaching the consumer is remote. In the very unlikely event that this did happen, consumption of the meat would have no effect on a person's health.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1263 Industrial accident
9. MR LAU CHIN-SHEK asked (in Chinese): With regard to the classification of industrial accident figures provided by the Labour Department, will the Government inform this Council of the following:
(a) whether it has examined the adequacy of the items of causes now being used for classifying industrial accidents;
(b) how the current classification of causes has been effective in preventing industrial accidents; and the specific examples that can be quoted in the past two years; and
(c) whether consideration will be given to publishing on a regular basis the number of industrial accidents by types of work?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the present classification system used by the Labour Department in compiling industrial accident statistics largely follows the International Labour Organization's recommendation on the method of classification of causes of industrial accidents. The Department has reviewed the system from time to time in the light of experience and considers it to be adequate.
The classification system has enabled the Labour Department to identify any growing trend in particular types of industrial accidents and to focus enforcement and prevention work accordingly. For example, the accident statistics for the late 1980s indicated that accidents caused by machinery was a major area of concern. As a result, machinery safety was targeted for special attention during factory inspections in the past two years. The number of machinery related accidents dropped by 26.5% from 8 237 in 1990 to 6 013 in 1991. More recent accident statistics have indicated a high incidence of accidents involving "fall of persons". This will become one of the priority areas in next year's accident prevention programme, and new initiatives are being worked out.
The Labour Department publishes industrial accident statistics annually. These are broken down by causes and by industries in accordance with the classification system referred to in the first paragraph above. It would not be practicable to break down these statistics further by individual types of work or job titles given the very large variety involved.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1264 Heamophiliacs suffering from AIDS
10. MRS PEGGY LAM asked (in Chinese): Will the Government inform this Council:
(a) of the number of heamophiliacs who have contracted AIDS from medicine contaminated by the HIV in the course of undergoing medical treatment in public hospitals, and of the number of those who died as a result;
(b) whether those patients would be exempted from medicine fees for the treatment of other illnesses arising from AIDS;
(c) whether the Government would grant special compensation to those heamophiliacs who have contracted AIDS from medicine contaminated by the HIV in the course of undergoing medical treatment; if so, what the details of compensation are; and if not, what the reasons are; and
(d) whether heamophiliacs eligible for disability allowance would continue to receive the allowance while they are under treatment in hospital; and if not, what the reasons are?
SECRETARY FOR HEALTH AND WELFARE: Seriatim, the answer to the four-part question is as follows:
(a) Of 61 heamophiliacs who are confirmed to have been infected by HIV, nine have developed AIDS and five have died from the disease. There is no record as to whether they have contracted HIV through medical treatment at public hospitals.
(b) All entitled persons (that is, permanent residents of Hong Kong) are charged $33 per visit at specialist clinics and $43 per day at public hospitals. These rates apply equally to HIV-infected haemophiliacs. The fees may be partially or fully waived for patients with financial difficulties.
(c) Each case has to be decided on its own merits. The Government would only be legally liable to pay compensation to an individual who had contracted HIV through the transfusion of contaminated blood products if the individual was able to establish that the Government had been negligent or breached a duty of care in respect of preparing the blood products for transfusion.
The Government ensures that all blood products for transfusion are sterilized according to internationally accepted methods.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1265
(d) Haemophiliacs eligible for disability allowance would continue to receive the appropriate allowance while undergoing treatment in hospitals. The Higher Disability Allowance is given to those who require constant care and attention. However, those staying in public hospitals for over 29 days would receive only the Normal Disability Allowance since they are already receiving constant medical attention in hospitals which are heavily subsidized by the Government.
Disclosure of confidential documents
11. MR ERIC LI asked: Will the Government inform this Council whether it will consider adopting the practice in other countries and disclose the top secret and confidential documents of the Executive Council, Legislative Council and consultative committees after a lapse of time, so that people may have a more thorough understanding of the background of relevant incidents and decision taken?
CHIEF SECRETARY: Mr Deputy President, our current practice is to allow public access to unclassified records older than 30 years and to consider requests for access to other records on an individual basis. We are considering whether the current arrangement for access to unclassified records should be extended to classified documents so as to bring Hong Kong in line with practice in other places which allow public inspection of both unclassified and classified records after a fixed period of closure, ranging usually between 20 and 60 years.
Juvenile crime
12. MR JAMES TO asked (in Chinese): Will the Government inform this Council:
(a) whether there are plans to set up a special squad to deal with the increasingly serious state of juvenile crimes;
(b) if so, what progress has been made;
(c) if not, what measures are available to clamp down on such crimes?
SECRETARY FOR SECURITY: Mr Deputy President, I wish to preface my reply by stating that the problem of juvenile crime is not becoming increasingly serious. Juvenile crime (that is crime by persons aged 15 and under) has decreased during the past three years.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1266
There are no plans to set up a special squad dedicated specifically to juvenile crime. The government departments concerned are already paying close attention to the problem. The police maintain close liaison with schools; they visit schools regularly and have developed a programme of talks and other publicity in schools to encourage students to stay away from crime. The police also plan to implement on a trial basis the Student Crime Information Form Scheme to enable students to provide information on crime within schools. The setting up of police school support teams and the provision of training to teachers to identify triad influence in schools are also being considered.
The Standing Committee on Young Offenders, which reports to the Fight Crime Committee, is tasked with examining ways to prevent potential young offenders from offending. The Committee includes representatives from all departments with an interest in young offenders and adopts a multi-disciplinary approach to the problem. The Committee has commissioned a study into the social causes of juvenile crime. This major study will be completed in early 1994.
Slippage of public works projects
13. MISS EMILY LAU asked: In view of the slippage in a number of public works projects in the last financial year which has resulted in a surplus bigger than originally expected, will the Government give this Council a breakdown of these projects and their costs, and the reasons for the slippage?
SECRETARY FOR WORKS: Mr Deputy President, the system of monitoring public works projects is for the Directors of the works departments who are Vote Controllers and responsible for the progress and expenditure outcome of their respective projects to report to the Public Works Progress Committee (PWPC) which I chair. This monitors and seeks explanation of significant deviations from plan, and looks for actions to recover delay or reprogramme as appropriate. Since PWP has around 1 000 items in train, PWPC focuses on major projects (which represent about 20% in terms of number but 80% in terms of expenditure).
In the financial year 1991-92, there were 950 public works projects with an approved project estimate exceeding $10 million, and in addition 152 projects were scheduled to start during the same financial year.
There were some 164 projects included in the Quarterly Reports issued to PWSC members, and monitored by the PWPC; of these projects 76 were found to be delayed by three months or more. The causes of delays were:
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1267 %
a) Changing requirements 34 b) Additional works 14 c) Interface problems 13 d) Slow progress on contracts 11 e) Delays at start due to objections etc 9 f) Delays due to inclement weather 7 g) Others 12
100
Details of these projects (including reasons for the delay of individual projects) were found in the Quarterly Reports issued by Works Branch to PWSC members during 1991-92 and are repeated again for ease of reference in the attachment Annex I. The estimated project cost for these 76 projects amounts to a total of $17.7 billion, and the provision included in the 1991-92 expenditure estimates for these same projects was $4.4 billion.
Of the 152 new projects scheduled to start in 1991-1992, 45 actually started as programmed while 38 were, in the course of the year, rescheduled, repackaged or dropped following reviews by the relevant Policy Secretaries of priorities and matching resources. This flexibility is a distinct feature of the Public Works Programme in Hong Kong, and allows the Government to take into account changing aspirations and circumstances. The remaining 69 were delayed beyond 1991-92. A list of these 69 projects is at Annex II, and reasons for slippage are:
%
a) Land acquisition problems 12 b) Statutory objections 10 c) Site relocation 6 d) Design and physical problems 26 e) Changes in client's requirements 26 f) Administrative delays 10 g) Funding issues 10
100
The estimated project cost for these 69 projects amounts to a total of $30.2 billion, and the provision included in the 1991-92 expenditure estimates for these same projects was $1.8 billion.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1268 Annex I
List of on-going projects
delayed during 1991-92
Approved project
Code Title
Estimate at end 1991-92 ($M)
Provision
1991-92 ($M)
2089TH Lantau Fixed Crossing – further investigation and design
2426TH Western Harbour Crossing feasibility study – consultants' fees
and investigations
2467TH Road link between the Northwest New Territories and West Kowloon
(Route 3) - advance works for
CRA1 and CRA4
270.00 11.77 25.00 3.39
90.00 43.50
2367CL Tuen Mun port development study 24.00 Block Vote
2366CL West Kowloon reclamation – northern area, phase I
3048DR NT/NE Livestock Waste Consolidation Site A (Sha Ling)
3044LC Detention and holding centres for illegal immigrants from Vietnam
2,490.00 955.98 19.57 5.47 659.56 21.57
3014LP Police Training School (stage V) 107.88 0.11
3026MH Queen Elizabeth Hospital, block B extension
3030MH Pamela Youde Hospital – superstructure of staff quarters
and nurse training school
3068MH Pamela Youde Hospital – Consultants' fees
3083MH Pamela Youde Hospital – Superstructure of
Hospital complex
316.00 74.06 459.50 221.48
150.00 24.86 1,763.00 527.03
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1269 Approved project
Code Title
Estimate at end 1991-92 ($M)
Provision
1991-92 ($M)
3031RE Space Museum recladding 25.00 19.49
3024TF China passenger ferry services terminal at Tsim Sha Tsui
4046DS Shau Kei Wan sewerage district development - screening plant
4048DS To Kwa Wan sewerage district development - screening plant
and submarine outfall
4050DS To Kwa Wan sewerage district development - sewers from
Ma Tau Chung Road and
Gascoigne Road to screening plant
at To Kwa Wan reclamation
4092DS Tsuen Wan, Kwai Chung, Tsing Yi sewerage masterplan
study - consultants' fees and
investigations
4101DS Strategic Sewage Disposal Scheme stage II - oceanic outfall,
oceanographic surveys and modelling
investigations and consultants' fees
4103DS North West Kowloon sewerage masterplan study - consultants' fees
and investigations
4111DS Central, Western and Wan Chai West sewerage masterplan study –
consultants' fees and investigations
4112DS Yuen Long and Kam Tin
sewerage masterplan study –
consultants' fees and investigations
4117DS Nutrient removal from Tolo Harbour - effluent export
scheme, stage I
234.30 14.42 37.00 1.69 83.00 1.52
54.00 19.87
16.00 1.10 53.00 16.34
15.00 4.75 12.00 3.16 15.00 7.34 453.20 198.88
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1270
Approved project
Estimate at end
Provision
Code Title
1991-92 ($M)
1991-92 ($M)
4121DS HK Island South sewerage improvement and sewage
treatment and disposal
facilities - advanced works
5077AA Kai Tak Airport improvements – Typhoon Shelter at To Kwa Wan
5048BL Improvement and protective works to Sai Tso Wan landfill - works
5038CD Shing Mun River –
water quality improvement
68.16 49.72
130.00 56.50 53.70 4.52 14.00 11.30
5021CL Telegraph Bay reclamation 71.30 0.34
5167CL Ap Lei Chau North reclamation – phase II
5199CL Lai Chi Kok Bay reclamation, stage II - works
24.50 8.81 166.50 56.50
5008DR Shuen Wan landfill 405.00 76.60
5017DR Tseung Kwan O landfill – stage II, phase II
5037DR Development of Northeast New Territories landfill –
consultants' fees and investigations
for works in phase I
5058DR Northeast landfill development – site formation for
Ta Kwu Ling rural centre
6079TB Hillside escalator link between Central and Mid-levels
6069TH Gascoigne Road and Chatham Road improvements (Jordan Road to
Hung Hom interchange)
103.30 58.76 41.40 9.75
6.00 5.37
204.60 73.45 114.00 0.56
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1271 Approved project
Code Title
Estimate at end 1991-92 ($M)
Provision
1991-92 ($M)
6080TH New Territories Circular Road improvements, Au Tau to
Fan Kam Road –
phases I to IV and VI
6092TH Vehicular border link at
Lok Ma Chau - consultants' fees,
investigations and works
6164TH Access to the Wan Chai
reclamation - grade separated
access facilities
6298TH Tate's Cairn Tunnel approaches and Prince Edward Road
interchange
6328TH Yuen Long - Tuen Mun Eastern Corridor and Yuen Long West
Link: site investigations and works
6358TH Improvements to resumed private streets, 1987-88 programme
6361TH Interchange at junction of
Aberdeen Praya Road/
Tin Wan Praya Road
and associated works
6389TH Lam Kam Road improvement stage II, phase I - sections between
Lam Kam Road Interchange and
Chai Kek and between Pak Ngau Shek and Kadoorie Farm
6026TT Second Ap Lei Chau bridge and associated works - traffic and
engineering feasibility study
7025CG Sha Tau Kok development: site formation and servicing –
phase III
1,043.00 161.89
341.90 34.46 196.80 13.56 708.30 146.90 799.00 229.39
3.60 0.87 105.00 46.90
65.00 25.99
3.50 0.71 56.50 12.16
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1272
Approved project
Estimate at end
Provision
Code Title
1991-92 ($M)
1991-92 ($M)
7094CL Tai Po development, package 7, engineering works
7266CL Fanling development,
package 6, stage I
7376TH Ting Kok Road upgrading – stage I, phase I
7041CD Yuen Long nullahs –
environmental improvement
7327CL Tin Shui Wai development – roads D1 (West) and L9 and
formation of LRT reserve, phase I
7334CL Tin Shui Wai development – package 4, engineering
infrastructure, phase II
7338CL Tin Shui Wai development, village flood protection phase III
7355CL Tin Shui Wai development, package 4, engineering infrastructure
for Tin Shui Wai Town Lot No. 1
7029DS Yuen Long full sewage
treatment plant
7127CL Tseung Kwan O development, head of bay, stage I,
engineering works
7187CL Tseung Kwan O development, head of bay, stage III,
engineering works
7337CL Tseung Kwan O development, phase II, stage II,
engineering works
308.00 6.07 130.00 35.61 146.00 42.94 135.00 54.06 113.50 23.11
300.00 104.05
15.50 10.17 34.00 19.21
210.00 32.88 524.00 3.28
169.00 42.43 110.00 26.06
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1273 Approved project
Code Title
Estimate at end 1991-92 ($M)
Provision
1991-92 ($M)
7247CL Formation of a light rail transit reserve in the Tuen Mun –
Yuen Long corridor and
associated structures - stage I
7150CL Kwai Chung North development, area 9, stage III, engineering works
7335CL Tsing Yi development - road TY18 remainder and reclamation for the
relocation of existing boatyards
in north Tsing Yi
7062TH Improvements to Kwai Chung Road South and Container Port Road
7073TH Improvement to Kwan Mun Hau Street (Yeung UK Road to
Castle Peak Road) phase I
7116TH Intersection of Castle Peak and Kwai Chung Roads:
improvements, stage II
7303TH Improvements to Hing Fong Road (South of Kwai Foo Road)
7391TH Completion of Texaco Road/ Tsuen Wan Bypass interchange and
improvements to Texaco Road,
phase I
418.00 2.71
120.00 38.15 62.00 36.39
390.00 128.60 80.00 34.70
155.00 18.02
100.00 22.60 152.00 38.56
7395TH Realignment of Container Port Road 82.50 10.90
7228CL Hung Hom Bay reclamation – phase II
7262CL Territorial development strategy – urban area feasibility studies
7271CL Hung Hom Bay reclamation, phase I - finger pier extension,
seawall and ancillary works
257.00 33.45 125.00 25.03 128.00 5.86
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1274
Approved project
Estimate at end
Provision
Code Title
1991-92 ($M)
1991-92 ($M)
7353CL Central and Wan Chai reclamation, package 1, phase 1 - consultants fees
and site investigation
9002WF Additional treatment works facilities for Northeastern
New Territories
9127WF Pak Kong treatment works and water transfer facilities, stage II
9133WF Improvements to Hong Kong East trunk feed system
9144WF Water treatment and transfer facilities at Au Tau, Yuen Long –
stage II, investigation and design
9164WF Stanley and Repulse Bay water supply - stage V
116.00 99.44 206.00 11.05
515.00 150.56 30.00 17.18 380.00 2.81
123.00 25.25
Total 17,731.57 4,363.92
Annex II
List of new projects due to start
in 1991-92 but were delayed
Code Title
* Project Cost ($M)
# Provision 1991-92 ($M)
2175GG Government facilities at the new airport
153.50 1.989
2451TH North Lantau Expressway 5,260.00 48.726
2011WF Future water increase from China - stage III : remaining works
171.00 46.737
2476TH Lantau Fixed Crossing 12,149.00 226.723
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1275
Code Title
* Project Cost ($M)
# Provision 1991-92 ($M)
3074BF 304 Fire Services married
quarters in area 22,
Tseung Kwan O
3116ES One standard secondary school in Sai Wan Ho reclamation for the
Reprovisioning of Henrietta
3037FS Expansion to Cheung Sha Wan wholesale market
3019GQ Gas safety scheme for government junior officers' quarters –
remaining works
3079GQ Refurbishment of 3 048 government junior staff quarters
3033LC Additional departmental quarters on Lantau Island
3040LC Additional departmental quarters in Kowloon and the New Territories,
phase II - Pik Uk
3129LP Additional accommodation for the Sai Kung police station
3159LP New Police Headquarters
complex - phase II
148.40 25.546 25.00 1.989
969.00 49.720 30.03 30.307
15.00 0.994 73.00 54.941 73.90 15.820
16.85 6.294 524.20 9.040
3180LP Improvement of old police station 50.60 18.894
3024RB Addition/reprovisioning of cremators at Cape Collinson
Crematorium
3126SC Social welfare facilities in Yau Ma Tei six streets development
4024CD Improvement to Shenzhen River bends at Lok Ma Chau and Liu Pok
15.60 6.464
13.46 0.806 88.00 1.989
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1276 * Project
# Provision
Code Title
Cost ($M)
1991-92 ($M)
4051CD Stormwater drain from
Gascoigne Road to Canton Road
4055DS Ap Lei Chau sewerage district development - pumping station
4124DS Strategic Sewage Disposal Scheme Stage I Kowloon System –
consultants' fees and investigation
4125DS Tolo Harbour sewerage of unsewered areas
4130DS Tsuen Wan and Kwai Tsing sewerage stage I phase I
34.00 0.796 27.30 2.685 112.00 9.944
638.00 3.955 182.00 1.921
4132DS Port Shelter sewerage - stage I 73.20 1.356 4133DS Sewage sludge conditioning facilities 50.00 5.191
4134DS Northwest Kowloon sewerage – stage I phase II
5059AA Kai Tak improvements – civil works
72.00 1.582 420.00 265.550
5045DR Restoration of landfill sites 1,375.00 9.944
5054DR Development of Northeast New Territories landfill - phase I
5061DR NENT leachate treatment, phase I and village sewerage
5063DR Development of Southeast New Territories landfill –
advance works
5069DR Outlying islands refuse
transfer facilities - stage I
5070DR Radioactive waste storage facility – consultants' fees and investigations
206.80 50.850 111.40 9.944 200.00 77.405
6.40 2.983 61.00 1.492
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1277
Code Title
* Project Cost ($M)
# Provision 1991-92 ($M)
6061AA Kai Tak improvements - related road transport infrastructure works
6034TB Footbridge and junction
improvements at
Pok Fu Lam Road/Pokfield Road
6197TH Smithfield extension,
Belcher's Bay link, elevated road to
Kennedy Town and Central
walkway extension
6403TH Lai Chi Kok interchange improvements and reconstruction
of ground level roads
6037TI Transport interchange at
Diamond Hill
7109DS Provision of sewers and sewage treatment plants in rural areas in
the New Territories
7047GK Upgrading works for village resite and extension areas
3.60 25.312 23.70 0.001
43.59 28.250
52.50 5.311
47.11 5.650 5.00 30.510
17.90 8.249
7049BF Lai King divisional fire station 31.84 3.706
7098BF Standard sub-divisional fire station in Area 27, Tsing Yi
7021CG Lo Wai Village improvement – package 21, Tsuen Wan
7257RO District open space, Area 7, Tsuen Wan, phase 2 - site formation
7103TB External elevated walkway/ footbridge system outside
Tsuen Wan central public library
and government office complex
25.45 11.119 33.00 16.950 123.00 31.640 22.00 4.520
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1278 * Project
# Provision
Code Title
Cost ($M)
1991-92 ($M)
7220TH Completion of Texaco Road/ Tsuen Wan Bypass Interchange
and improvements to Texaco Road,
remaining works
200.00 11.300
7177CL Sha Tin New Town - remainder 11.20 5.650
7183CL Tai Po development –
remaining works
7023DS Ma On Shan sewerage system, Stage I : remaining works
7086ES Secondary school in Area 21, Fanling
7098MH Prince of Wales Hospital – expansion and reprovision of
facilities
7100WF Sheung Shui/Fanling
water supply - remaining works
7099MH Fanling Hospital - expansion and improvement
7330CL Tuen Mun New Town engineering development, stage II extension,
package 29 - principal sewer from
area 20 to Lung Mun Road
7043CD Northwest New Territories development - main drainage
channels for Yuen Long and
Kam Tin - stage I
7227CL Tin Shui Wai development, package 3, part II - village flood
protection works - remainder
7234CL Yuen Long East public housing site engineering works
10.00 6.780 10.30 0.780 39.00 1.130 22.20 1.130
150.70 3.277 3.50 2.260 36.00 28.589
1,100.00 39.550
24.25 0.565 177.00 13.560
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1279
Code Title
* Project Cost ($M)
# Provision 1991-92 ($M)
7278CL Kau Hui development – engineering works, area 16,
Yuen Long
7277CL Tseung Kwan O development, phase II, stage III,
engineering works
112.98 0.791 332.00 11.300
7037WC Water supply to Tseung Kwan O 304.00 33.618
7267CL Aldrich Bay Typhoon Shelter reclamation
7339CL Land formation for supplementary public rental housing site –
Ho Man Tin South
7343CL Central and Wan Chai
Reclamation - engineering works
444.00 13.560 69.00 15.820
2,735.00 339.000
7370CL Belcher Bay Reclamation 288.00 11.300 7145ES First secondary school Siu Sai Wan 41.20 15.820
9014WF Additional treatment and transfer facilities at Yau Kom Tau,
Tsuen Wan - remaining works
9034WF Yuen Long water supply – remaining works
9134WF Improvement of raw water transfer facilities from Tai Lam Chung
Reservoir to Tuen Mun and
Tsuen Wan
9148WF Improvement of fresh water supply to Ap Lei Chau
9018WS Improvement to Kwun Tong and Sau Mau Ping high level salt
water supply system
111.00 11.639
69.60 2.218 95.00 47.714
32.20 5.926 12.30 4.355
Total : 30,204.76 1,791.427
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1280 Note :
Source of information : * works departments' data
# Volume III of Government Estimates for the year ending 31
March 1992
Hong Kong and China Gas Company's rate of charge increase
14. MR LAU CHIN-SHEK asked (in Chinese): Concerning the operation of the Hong Kong and China Gas Company Limited, will the Government inform this Council of:
(a) the company's rate of charge increase in each of the past five years;
(b) measures now being adopted to monitor the company's quality of service and its policy in determining charges; and
(c) whether the Administration has considered formulating a profit control scheme for the company or setting a limit to its profit margin and rate of charge increase?
SECRETARY FOR ECONOMIC SERVICES: The Hong Kong and China Gas Company Limited's charge is composed of a fixed monthly service charge and a basic tariff. With effect from 1 January 1993, the fixed monthly service charge will be $7 per month per customer and the basic tariff will range from 15.05 cents to 16.2 cents per megajoule depending on consumption. According to the company's "Notice to Customers", the rate of charge increase in the past five years was as follows:
Effective date Increase in fixed monthly
service charge
Increase in basic tariff
Percentage
Increase for the domestic customers
($) (per megajoule) (%)
1 January 1989 - 0.5 4.3 1 January 1990 1.0 0.5 4.6 1 January 1991 1.0 0.5 5.0 1 January 1992 1.0 1.0 7.5 1 January 1993 1.0 0.9 - 1.2 7.0
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1281
The company is registered as a gas supply company under the Gas Safety Ordinance (Cap.51). As such, it is required by the Gas Authority to maintain a level of service which ensures the safe supply of gas to consumers, the protection of the health and safety of its employees in their place of work and the satisfactory handling of any incident involving the escape of gas. The company does not operate under a franchise or scheme of control. Its policy in determining charges is not subject to monitoring by the Government.
The Government's policy is to ensure that consumers enjoy a reliable and reasonably priced supply of fuel gas. The private sector is able to provide such a supply. Only if it was evident that a monopolistic situation existed in the supply of fuel gas would the Government consider whether some form of regulation or scheme of control was necessary.
No company has a monopoly on the supply of fuel gas in Hong Kong. Although the Hong Kong and China Gas Company is the sole supplier of town gas and synthetic natural gas (SNG), liquefied petroleum gas (LPG), supplied by a number of oil companies, provides an alternative choice of fuel gas and both types have respectable market shares. There are approximately 1.78 million fuel gas customers in Hong Kong, of which about 829 000 or 47% use piped town gas or SNG, 342 000 or 19% use piped LPG and 609 000 or 34% use LPG in cylinders. The oil companies have a 53% share of the market in terms of number of customers. But in terms of sales of gas energy, the market shares of LPG on the one hand and town gas and SNG on the other are roughly in the region of 40:60.
As the market for the supply of fuel gas is competitive, the Government has no intention at present of formulating arrangements designed to limit the profit margin or control the tariff increases of the Hong Kong and China Gas Company. However, the Government will continue to monitor the situation closely.
Visits by United Kingdom parliamentarians
15. MR TAM YIU-CHUNG asked (in Chinese): Will the Government inform this Council how many United Kingdom parliamentarians and their family members visited Hong Kong by invitation in the past three years; what was the amount of expenses incurred; whether these expenses were borne by the Administration; if so, whether consideration has been given to scaling down the invitation programme for future visits so as to minimize government expenditure in this respect?
CHIEF SECRETARY: Mr Deputy President, under the Government's Sponsored Visitors Programme, a total of 72 United Kingdom parliamentarians accepted our invitations to visit Hong Kong in the last three years. The invitations were extended to spouses, but not to other family members. Of these
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1282
72 visitors, 25 brought their spouses. The Government spent a total of about $2.5 million on these visits.
Before 1985-86, sponsored visitors were mostly United Kingdom parliamentarians. We have since broadened the scope of the programme to include visitors from North America, other European countries and the Asia Pacific Region. We now spend about 40% of our funds on sponsored visits by United Kingdom parliamentarians.
In addition, under a separate programme we sponsor groups of officials from China on 10-day visits to familiarize themselves with Hong Kong.
The Government is always mindful of the need to ensure that the expenditure in this area, like expenditure in other areas, is good value for money. It is important to bring United Kingdom parliamentarians and opinion formers from other countries to Hong Kong to see for themselves the latest developments so that they have a better understanding of Hong Kong.
Shipping traffic in Ma Wan Channel
16. MR HOWARD YOUNG asked: Will the Government inform this Council:
(a) of the extent of growth in the volume of shipping traffic in the Ma Wan Channel in the past five years; and
(b) whether there are plans to provide adequate navigation aids to match the growth in traffic so that safety and efficiency can be maintained?
SECRETARY FOR ECONOMIC SERVICES: Mr Deputy President, detailed statistics of shipping traffic are not routinely compiled for specific parts of Hong Kong waters. Periodic in-house surveys, however, show that there were about 2 000 ocean-going ship movements and 200 000 small craft movements through the Ma Wan Channel in 1988. The estimated figures for 1992 are 3 000 and 270 000 respectively.
Adequate aids to navigation are presently in place in the Ma Wan Channel and its approaches. They include:
(a) appropriate lights and buoys;
(b) a tidal current meter which provides pilots with data on real time tidal currents over its whole width and depth; and
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1283
(c) special escort procedures to clear small craft from the Channel to allow the passage of large colliers serving Tap Shek Kok Power Station.
I might add that radar simulation equipment at the Hong Kong Polytechnic has been put to beneficial use in studies simulating the behaviour of large ships transiting the Channel.
A consultancy on port development projected that by 2006, some 17 000 ocean-going ships and 665 000 river trade and small craft will use the Ma Wan Channel. Further measures will be necessary to ensure continuing navigational safety and efficiency in the use of the Channel. These measures will be implemented in phases as traffic builds up. It is intended to implement the first phase starting in 1993-94 subject to availability of funds. This phase includes the following:
(a) establishing an immigration anchorage off Tuen Mun so that small craft destined for west of the Channel will not need to be cleared at the Western immigration anchorage as at present;
(b) establishing a marine traffic control station at Gemini Point and deploying a dedicated patrol launch for better control of small craft near the Channel;
(c) commissioning a radar station at Kau Yi Chau to strengthen surveillance of the Vessel Traffic Centre over the southern approaches of the Channel.
Further measures might include improvements to the light beacons at the Channel and establishing a fairway in the Channel together with holding anchorages to be used by small craft whenever a large vessel is in transit. The implementation of these measures will depend on the traffic growth.
Civic education
17. MR PANG CHUN-HOI asked (in Chinese): Regarding the Secretary for Home Affair's reply dated 18 November 1992 to my question on civic education, will the Government inform this Council of the following:
(a) whether the Government has, after spending $15.91 million in 1991 on promoting voter registration and participation in elections, reviewed the effectiveness of its efforts, such as, in relation to a voter turnout rate of 39.15% for the Legislative Council direct elections; if so, what the results of the review are and whether other measures will be implemented to further promote voter registration and public participation in future elections;
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1284
(b) when a review will be conducted to examine the progress and effectiveness of the school curricula targeted at cultivating a proper understanding of the political development in Hong Kong among primary and secondary school students, as mentioned in paragraph 2 of the reply; and
(c) what other measures the Government will adopt to enhance the understanding of people such as the workforce and housewives who are not attending school and thus cannot obtain the necessary information and knowledge through the relevant school curricula concerning the development of representative government in Hong Kong?
SECRETARY FOR CONSTITUTIONAL AFFAIRS: Mr Deputy President,
(a) Earlier this year, the Administration conducted an overall review on the various electoral arrangements in the light of the experience gained in the 1991 elections. Voter registration exercise was one of the subjects reviewed. The findings of our review had been presented to the Select Committee on Legislative Council Elections.
Based on past experience, we believe that the existing arrangements for conducting annual registration campaigns should continue. These campaigns help remind the public that registration of electors is an on-going process throughout the year, and that getting registered as electors is both their right and their civic duty. We will also continue to organize major registration drives during an election year so as to produce the necessary impact.
The three pronged approach adopted for our previous registration exercises (that is, home visits, publicity and promotional activities, and wide distribution of registration forms) has proved to be effective in improving the registration rate. As at 1992, 52.5% of eligible electors has been registered, which compares favourably with a rate of 43.9% in 1989. Among the various activities, "home visits" has proved to be the most effective. Over 60% of all completed registration forms received by the REO were collected through this channel.
With regard to the distribution of registration forms, we believe the present network is already very extensive. We have recently further widened the network by distributing registration forms with notices of interim valuation sent by the Rating and Valuation Department to newly occupied private accommodation. Moreover, the voter register is regularly cross checked with the records of vehicle driving licence holders kept by the Transport Department.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1285
Registration forms will be sent to licence holders who are not already on the voter register.
The voter turnout rate in any particular election is dependent on a number of factors, including the number of candidates, the competitiveness among them, the adequacy of polling facilities, and so on. The Administration's objective is to provide fair and equitable electoral arrangements to enable voters to exercise their choice freely. We believe we have been able to achieve this.
(b) The civic education content of subjects such as social studies, economic and public affairs, as well as other civic education programmes in both primary and secondary schools, are under regular review by the Curriculum Development Institute of the Education Department. As a result of this on-going review, modifications to subject contents are made from time to time to reflect up-to-date political developments in Hong Kong. Further to the Guidelines on Civic Education to schools promulgated in 1986, the Education Department will issue to teachers in early 1993 an "Action Plan for the Promotion of Civic Education in Schools" to help them design a better civic education programme to suit the needs of their own schools.
In addition, a research project is being conducted by the Education Department to examine the effectiveness of civic education programmes in developing civic awareness of pupils in primary and secondary schools. Questionnaires, surveys and case studies are being carried out in 40 secondary schools and 80 primary schools. The findings, which are expected to be available by the end of 1993, will form the basis for further improvements to the curriculum and programme for civic education in schools.
(c) Most of the activities organized by the Committee on the Promotion of Civic Education are targetted at the general public. These include, for example, the distribution of information pamphlets through District Offices and voluntary agencies, and civic education exhibitions. The work of the Committee is supplemented by voluntary agencies and community bodies which can apply for sponsorships under the Committee's Community Participation Scheme. In 1992- 93, there are four projects sponsored under the Scheme with a theme relating to democracy and political development. The target groups of these projects cover housewives and the public in general.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1286
The Administration also launches promotion and publicity activities on a regular basis to enhance the general public's understanding of representative government. These include the broadcasting of APIs, screening of slides at cinemas, distribution of posters, and the publication of press advertisement before elections.
Kindergarten education
18. MR ALBERT CHAN asked (in Chinese): Regarding kindergarten education, will the Government inform this Council of:
(a) the measures taken by the Education Department to monitor kindergartens to ensure that the requirements concerning the age of admission and the teacher:pupil ratio are observed;
(b) the actions taken by the Education Department when institutions concerned did not comply with the above requirements; and
(c) other measures, apart from the teacher:pupil ratio, taken by the Department to monitor the quality of education provided by kindergartens?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the answers to Mr CHAN's questions are as follows:
(a) The relevant requirements are specified in the Education Ordinance and Regulations. District Education Officers (DEOs) and Advisory Inspectors of the Education Department (ED) pay regular inspection visits to kindergartens (KGs) to ensure that these requirements are observed.
(b) If a KG is found to have admitted children below the minimum admission age, the Director of Education may serve a notice under the Education Ordinance directing the supervisor/principal to comply with the law. Failure to act in accordance with such a notice constitutes an offence and the supervisor and every other manager of the KG will be liable, on conviction, to a fine of $25,000 and to imprisonment for two years. Similarly, failure to comply with the requirements on pupil:teacher ratios constitutes an offence and the penalty upon conviction is a fine of $5,000 and imprisonment for one year.
(c) Apart from ensuring that the stipulated teacher:pupil ratios are observed, the ED monitors the quality of education provided by KGs through the following measures:
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1287
(i) Controls on management and premises — The Education Ordinance stipulates that heads of KGs must be Qualified Kindergarten Teachers or possess equivalent qualifications. Regular visits are made by DEOs to KGs to check on this and other requirements (for example, those concerning the safety and hygiene of the premises).
(ii) Curriculum and teaching methods — Advisory Inspectors of the ED visit KGs regularly to advise principals and teachers on curriculum matters, teaching approaches, classroom management and organization of activities to ensure a satisfactory standard of teaching. In this connection, the Advisory Inspectorate has produced a Manual of Kindergarten Practice, a Guide to the Kindergarten Curriculum and other resource materials to assist KGs. The Inspectorate also conducts a wide range of in-service training programmes for KG teachers.
(iii) Quality of teachers — in their annual fee increase applications, KG operators are allowed to increase the salary portion of their school fees so that they may pay their teachers the government recommended salary scales for KG teachers. The aim of this is to retain trained teachers in KGs and to encourage more untrained teachers to seek training.
Teenage drop-outs
19. MRS SELINA CHOW asked (in Chinese): Will the Government inform this Council:
(a) of the present number of teenagers in Hong Kong below the age of 15 who have dropped out from school or are unable to attend school due to other reasons; and the respective percentage of boys and girls among this group of teenagers;
(b) whether there are other opportunities for learning or vocational training for these drop-outs so that they may not have to idle at home or linger about; and
(c) whether there are any statistical figures to show or references which could help to assess the percentage of these drop-outs who have eventually become members of juvenile gangs?
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1288
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the answers to Mrs CHOW's question are as follows:
(a) In the 1991-92 school year, the Education Department recorded 5 574 children below the age of 15 who had "dropped out" from school. Of these, 2 080 either emigrated or left Hong Kong for studies abroad; 1 181 reached the age of 15 shortly after their non-attendance was identified; and 623 were subsequently placed in an educational institution. Of the remaining 1 690 children, 392 required intensive counselling; 11 were suffering from ill health; 115 were absent from Hong Kong temporarily or were children of fishermen, 419 were at various stages of being processed by the Department; 563 were untraceable; and 190 were sent to Boys and Girls' Homes after having been convicted of an offence. Amongst the last two groups, there were 438 boys and 34 girls, or 58% and 42% respectively.
For the 1992-93 school year, the overall figure up to this time is 3 379. No further breakdown is available at this stage.
(b) There are ample opportunities for children who have "dropped out" of school initially to continue with their education. These include enrolment in prevocational schools, practical schools, skills opportunity schools, apprenticeship training schemes and courses offered by the Vocational Training Council.
(c) There are no direct statistics on the proportion of school drop-outs who have eventually become members of juvenile gangs. Police statistics show that, in addition to the 190 cases involving breaches of the law in (a) above, 45 children below 15 who had "dropped out" of school were arrested during the 1991-92 school year for minor theft and shop-lifting offences. These were dealt with by a Superintendent of Police under the Superintendent Discretion Scheme.
Separately, the Standing Committee on Young Offenders has recently commissioned a consultancy study on the social causes of crime amongst young offenders. It is hoped that this study will provide some more definitive figures to determine the scale of criminal behaviour amongst youngsters who have left school early.
Dog keeping in public housing estates
20. REV FUNG CHI-WOOD asked (in Chinese): In view of the serious violation of the restriction against the keeping of dogs in public housing and Home Ownership Scheme estates under the management of the Housing Authority, will the Government inform this Council:
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1289 (a) of the total number of complaints against such violation over the past two years;
(b) of the total number of such violation cases handled in each of the past two years; of the number of cases in which the offenders were successfully deterred from keeping dogs in these estates; of the number of offenders punished and of the details of the punishment imposed; and
(c) whether consideration has been given to modifying the terms of the tenancy agreements or taking alternative measures (such as imposing fines) so that the authorities concerned can enforce the restriction on prohibiting the keeping of dogs more effectively?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President,
(a) Dog-keeping is not allowed under the Housing Authority's tenancy agreement with public housing tenants and the Deed of Mutual Covenant (DMC) with HOS flat owners. There is no separate record on the number of complaints about dog keeping but, as an indication of the extent of the problem, about 1 000 cases were detected in each of the past two years.
(b) The breakdown of the number of cases of dog-keeping detected in the past two years is as follows:
Rental estates
HOS
estates
Total
1990-91 923 105 1 028 1991-92 831 116 947
Most cases were resolved with tenants' and owners' co-operation. Since 1 April this year, eight warning letters threatening court action have been issued: four to public housing tenants and four to HOS owners. So far, six of these cases have been resolved with the dogs being removed from the premises and one offender has been required to pay court costs amounting to $6,600. The two other cases are outstanding.
(c) The Housing Department has reviewed its powers to deal with dog-keeping which is a civil matter and not a criminal offence. The only available remedy at present is action for breach of contract, that is, under the conditions of a tenancy agreement or DMC. The Department has concluded that its powers to evict a tenant by serving a notice-to-quit and to proceed by way of a court injunction
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1290
in the case of an HOS owner are adequate. The imposition of a fine is not considered appropriate where a criminal offence is not involved. In view of the number of cases and the concern expressed by residents, the Department has stepped up publicity to discourage dog-keeping and action against offenders.
Motion
SUSPENSION OF STANDING ORDERS
THE CHIEF SECRETARY moved the following motion:
That Standing Orders 11 (Order of Business at a Sitting) and 12 (The Order Paper) be suspended to enable the Governor to address Members, and if he so wishes, invite and answer questions from Members on matters arising therefrom, at a sitting of this Council on 12 January 1993.
He said: I move the motion standing in my name in the Order Paper.
The Governor indicated in his policy address that he would like to make himself available to answer Members' questions and to discuss Government policies and proposals at least once a month when the Council is in session. He, as President of this Council, has appointed 12 January 1993 for a sitting for this purpose. To this end, Standing Orders 11 and 12 have to be suspended.
Mr Deputy President, I beg to move.
Question on the motion proposed, put and agreed to.
First Reading of Bills
INTERPRETATION AND GENERAL CLAUSES (AMENDMENT) BILL 1992 TELEPHONE (AMENDMENT) BILL 1992
TELECOMMUNICATION (AMENDMENT) BILL 1992
HONG KONG EXAMINATIONS AUTHORITY (AMENDMENT) BILL 1992 THEFT (AMENDMENT) BILL 1992
Bills read the First time and ordered to be set down for Second Reading pursuant to Standing Order 41(3).
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1291 Second Reading of Bills
INTERPRETATION AND GENERAL CLAUSES (AMENDMENT) BILL 1992
THE ATTORNEY GENERAL moved the Second Reading of: "A Bill to amend the Interpretation and General Clauses Ordinance."
He said: Mr Deputy President, I move that the Interpretation and General Clauses (Amendment) Bill 1992 be read a Second time.
The Interpretation and General Clauses Ordinance (Chapter 1) plays a vital role in Hong Kong's statute book. It contains provisions relating to the construction, application and interpretation of our laws, defines a large number of terms and expressions used in laws and in public documents, public contracts and civil and criminal proceedings. It is widely used by judges and lawyers as an essential aid in interpreting our laws.
The Ordinance was enacted in its present form in 1966. In 1987 the Law Draftsman established a committee within the Law Drafting Division to review the drafting styles and practices in relation to legislation. This committee found that a number of provisions in Chapter 1 were inconsistent with current practices or were no longer needed.
The Interpretation and General Clauses (Amendment) Bill 1992 contains the changes proposed by that committee. The provisions are of a technical nature and many of them simply remove outdated references to practices that have ceased.
In addition to the technical matters, the Bill includes an amendment to section 77 of the Ordinance. That section relates to United Kingdom enactments that are incorporated in some of our Ordinances by reference. Under section 77 as it now stands, amendments made in the United Kingdom to such enactments will, as a general rule, apply also in Hong Kong. If the Bill is passed, amendments made to such enactments on or after 1 January 1994 will not, as a general rule, apply also in Hong Kong. This is in keeping, Mr Deputy President, with our policy of localizing our laws by removing dependence on some United Kingdom laws.
The Bill has the support of the legal profession.
Bill referred to the House Committee pursuant to Standing Order 42(3A).
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1292 TELEPHONE (AMENDMENT) BILL 1992
THE SECRETARY FOR ECONOMIC SERVICES moved the Second Reading of: "A Bill to amend the Telephone Ordinance."
She said: Mr Deputy President, I move that the Telephone (Amendment) Bill 1992 be read a Second time.
As this Bill is closely related to the Telecommunication (Amendment) Bill 1992, which is also due to be read a Second time at this sitting, I will comment on them together. The purpose of the two Bills is to facilitate the implementation of two key telecommunications policy initiatives announced by me in this Council on 3 June this year during the motion debate on telecommunications policy: that is, a price-capping scheme for local telephone service charges and the introduction of fixed network competition. Both proposals received strong support in principle from a broad cross-section of the Council during the motion debate.
In order to introduce the price-capping scheme, clause 6 of the Telephone (Amendment) Bill provides for the Telecommunications Authority to specify the charges that the Hong Kong Telephone Company may levy for its services. For existing services the charges to be specified are those currently in effect. The clause also provides for the Secretary for Economic Services to make regulations governing revisions to the specified charges. The details of the price-capping scheme will be contained in the regulations made under this new provision. A draft of the proposed regulations has already been prepared in anticipation of the enactment of the Bill and copies circulated to Members for information.
It will be helpful if I briefly mention the key elements of the proposed price-capping scheme even though it is not the direct subject matter of either of the two Bills before us today. As announced in June, we have reached agreement with the Hong Kong Telephone Company on an overall price-cap for local telephone services charges to be in force for three years set at 4% below the inflation rate. This would result in such charges increasing by at least 1.5% less per annum in real terms than they have done over the previous 10 years. Members will recall that in tandem with the implementation of the price-capping scheme, an undertaking has been given that Hong Kong Telecom International will reduce charges for International Direct Dialling services by an average of 8%, and an average of 2% in each of the following two years.
Since the June announcement, we have secured the Hong Kong Telephone Company's agreement to an additional "sub-cap" mechanism which will ensure that the rebalancing of charges to remove current cross-subsidies takes place gradually and that residential telephone charges do not increase at an unreasonably rapid rate within the limit of the overall price-cap. Two sub-caps have been agreed. One would limit increases in the charges for telephone line connection to 4% or more below the inflation rate. The other would limit
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increases in the residential telephone line rental charge to the rate of inflation or less. To put this into perspective, it is worth remembering that the rental charge for a residential telephone line has not increased since January 1991. Furthermore, even if the full allowance of the relevant sub-cap were used, the increase allowed in the first year of the price-capping scheme would be only $5.5 per month, assuming a rate of inflation at around current levels. We intend to review the levels of the overall price-cap and the sub-caps in the third year of operation of the price-capping system.
One criticism that has been levied at price-capping schemes is that they create an incentive for the regulated company to cut service standards in order to boost profitability. In order to counter any such tendency, clause 4 of the Telephone (Amendment) Bill provides for the Telecommunications Authority, after consultation with the Company, to issue codes of practice specifying service standards that it must follow. The use of such codes will be of particular importance in those sectors of the market where the Hong Kong Telephone Company maintains, for the time being at least, a monopoly position.
In my speech during the motion debate on telecommunications policy in June, I pointed out that the introduction of a price-capping scheme was incompatible with the present powers of the Council to approve individual tariffs. It is a fundamental principle of price-capping that the regulated company should have a reasonable degree of freedom to adjust as it sees fit the charges for individual charges, either up or down, so long as the overall price-cap is not breached and subject to the constraints of any sub-caps. Accordingly, clause 8 of the Telephone (Amendment) Bill would repeal the existing section 26 of the Telephone Ordinance, which provides for the Company's maximum level of charges to be specified in the Schedule to the Ordinance and for this Council to approve amendments to that Schedule by resolution. In addition, clause 9 of the Bill would repeal the Schedule. In its place, clause 6 provides for services and charges to be specified by the Telecommunications Authority by notice in the Government Gazette and requires the Company to provide, free of charge, a list of its services provided under the Ordinance and their charges to anyone requesting it.
One feature of the Council's motion debate on telecommunications policy in June was the call by a number of Members for a critical review of our telecommunications regulatory machinery including the resources available to the Telecommunications Authority and its relationship with the policy branch. As Members will note, the two amendment Bills now being placed before them will vest the Telecommunications Authority with a number of important new powers arising from the introduction of price-capping and the licensing of competitive local fixed networks. This is indicative of the increasingly important role played by the Telecommunications Authority in ensuring fair play in the market place, on which investment decisions involving billions of dollars so crucially depend. The Administration has now decided that the increasing importance, scope and complexity of the work of telecommunications regulation justify the establishment of an Office of the Telecommunications
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Authority within Government, but separate from the Post Office. Subject to Finance Committee approval, the Office will be a new department within Government with all the staff currently engaged in telecommunications matters in the Post Office transferred to it.
I would emphasize that this decision does not imply criticism of Postmasters General past and present who have simultaneously undertaken the duties and responsibilities of Telecommunications Authority and head of the postal service with dedication and distinction. But the rapid expansion of services in recent years and the policy of progressive liberalization on which we are embarked present new challenges. We believe that a discrete Office of the Telecommunications Authority would be the most cost effective response to these challenges. In due course, I will be bringing forward funding proposals for the creation of new posts consequent both on this change and the underlying critical need to boost the resources devoted to telecommunications regulation. I hope I may look forward to Members' sympathetic consideration of our proposals.
In recognition of the existing legal separation between the office of the Postmaster General and Telecommunications Authority and to pave the way for the separation of the appointments to these two positions, clause 14 of the Telephone (Amendment) Bill provides for all references to the "Postmaster General" in the Telephone Ordinance to be replaced by the "Authority", which clause 2 of the Bill defines as the Telecommunications Authority appointed under the Telecommunications Ordinance. This change will unify all statutory telecommunications regulatory functions under the single office of the Telecommunications Authority.
I now turn to the provisions in the two Bills which are designed to facilitate the timely and equitable introduction of fixed network competition. These cover three main areas: the allocation of telephone numbers between competing operators; the interconnection of networks; and ownership of public telecommunications service licensees.
Access to a fair allocation of numbers is a vital operational requirement for any current or prospective provider of public telecommunications services. In recognition of the fact that numbering for telecommunications purposes is a public resource, the regulatory authorities in other jurisdictions, for example in the United Kingdom and Australia, have taken up overall control of their national numbering plans. Our proposals, at this stage, are more modest. Under clause 5 of the Telephone (Amendment) Bill, we propose simply to give the Telecommunications Authority the power to give directions to the Hong Kong Telephone Company concerning the numbering plan in order, if these are deemed necessary, to ensure a fair and reasonable allocation of telephone numbers between operators. In other words, day to day management of the numbering plan would be left with the Company for the time being. But the Telecommunications Authority would have sufficient powers to ensure that this
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1295 privilege was not used in a way which might place competing operators at a disadvantage.
Regarding network interconnection, in clause 7 of each of the Bills there are provisions for the Telecommunications Authority to have the power to determine the terms and conditions under which this takes place. This power will be used to ensure that such terms and conditions are fair to both parties to an interconnection arrangement and are not anti-competitive with respect to other operators. Fulfilment of these requirements is an essential prerequisite for successful network competition. Members will wish to note that the power of determination would include interconnection between a future subscription television operator, who will be deemed to be a licensee under the Telecommunication Ordinance, and other systems for distributing television programmes, for example Satellite Master Antenna Television Systems.
The last main area of concern addressed by the Bills with respect to the smooth functioning of the competitive telecommunications market-place is cross-ownership between licensees. So long as there are no clear powers for Government to control the cross-ownership of licences issued for the provision of a particular type of competitive service, say, public paging or mobile telephone services, it is possible that one party could establish a monopoly or near-monopoly position, or cartels could emerge, through a process of licence acquisition. Clause 8 of the Telecommunication (Amendment) Bill deals with this deficiency by empowering the Governor in Council to make regulations governing the control to be exercised over a licensee under the Telecommunication Ordinance or the beneficial ownership or control of the voting shares in such a licensee. It should be emphasized that this provision would not of itself control the ownership of licensees. This would be done by the enactment of regulations under the new power. It is the regulations that would contain the details of the cross-ownership restrictions to be enforced. However, the fact that we are prepared to seek this enabling power is a clear signal of our commitment to ensuring, as far as practicable, that the individual telecommunications service sectors that have been opened up to competition remain truly competitive.
Other provisions in the two Bills that I would like to draw to Members' attention today include clauses 10 and 11 of the Telephone (Amendment) Bill and clause 7 of the Telecommunication (Amendment) Bill, which concern penalties. In the case of the Telephone (Amendment) Bill, we are providing for the updating of penalties applying to the Hong Kong Telephone Company for non-compliance with its obligations under the Telephone Ordinance. These penalties have remained unchanged since 1977. The increases proposed are large. For example, the maximum penalty for failure to provide service within a reasonable period is increased from $100 to $100,000. But taking into account the massive increase in the scale and scope of the Hong Kong Telephone Company's operations since 1977, we believe the new levels to be justified. They are also on a par with the penalty provisions in the Telecommunication (Amendment) Bill. These are new and are needed as a sanction for
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non-compliance with the proposed power for the Telecommunications Authority to make determinations with respect to the terms and conditions of network interconnection.
Clause 3 of the Telephone (Amendment) Bill and clause 4 of the Telecommunication (Amendment) Bill clarify that compensation payable by the Hong Kong Telephone Company and licensees under the Telecommunication Ordinance respectively is limited to physical damage caused by their operations. In fact, we have been advised that this is the effect of the existing provisions of the two Ordinances concerned. The relevant amendments are nevertheless introduced for the avoidance of doubt, in order to remove the small risk that a claim for economic damages could, contrary to advice, succeed. Such claims would run counter to our pro-competitive policy as they would tend to discourage market entry by new players.
Lastly, I would like to mention clauses 5 and 6 of the Telecommunication (Amendment) Bill. Clause 5 clarifies that the meaning of "land" in Part IV and section 29 of the Telecommunication Ordinance includes the common parts of buildings. This would have the effect of putting beyond doubt that the Telecommunications Authority has the power to require that licensees under the Ordinance, including a future subscription television service provider, are given access to the internal ducting of buildings in order to provide service to their customers. Clause 6 of the Bill would allow the provision of a performance bond to be included as a condition for a licence granted under the Telecommunication Ordinance, as a means of ensuring that licensees live up to their promises.
Taken as a whole, this legislation reflects the Administration's commitment to a pro competitive telecommunications policy. It will give the Government key powers to protect consumer interests and foster the development of the competitive market that we believe is vital to maintaining Hong Kong's position as a major regional financial, commercial and services centre. I can think of few better advertisements for attracting new players into our telecommunications market than the introduction and passage of this legislation.
With these remarks, Mr Deputy President, I commend the two Bills to the Council. Bill referred to the House Committee pursuant to Standing Order 42(3A).
TELECOMMUNICATION (AMENDMENT) BILL 1992
THE SECRETARY FOR ECONOMIC SERVICES moved the Second Reading of: "A Bill to amend the Telecommunication Ordinance."
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She said: Mr Deputy President, I move that the Telecommunication (Amendment) Bill 1992 be read a Second time.
The purpose of this Bill has already been described in my speech moving the Second Reading of the Telephone (Amendment) Bill 1992.
Bill referred to the House Committee pursuant to Standing Order 42(3A).
HONG KONG EXAMINATIONS AUTHORITY (AMENDMENT) BILL 1992
THE SECRETARY FOR EDUCATION AND MANPOWER moved the Second Reading of: "A Bill to amend the Hong Kong Examinations Authority Ordinance."
She said: Mr Deputy President, I move that the Hong Kong Examinations Authority (Amendment) Bill 1992 be read a Second time.
The Hong Kong Examinations Authority Ordinance was enacted in 1977 and was last amended in 1987. The main purposes of the present Bill are to update the membership of the Authority in the light of developments in the education sector, and to simplify the procedure for any future updating which may be necessary.
The Bill proposes to end the present arrangement under which the University of Hong Kong and the Chinese University of Hong Kong have each two representatives on the Authority, while all the other tertiary institutions have only one representative each. It also seeks to include the President of the Lingnan College as an ex-officio member, following the recent enactment of the Lingnan College Ordinance. Furthermore, in view of the progressive reduction in the number of colleges registered under the Post Secondary Colleges Ordinance, the Bill proposes to repeal the provision for the Authority to draw one of its members from the Presidents of these colleges.
The Bill also extends ex-officio membership to the Chairman of the Curriculum Development Council and the Executive Director of the Vocational Training Council, in recognition of the bearing that these organizations have upon the work of the Authority. They are now serving on the Authority in their personal capacities as members appointed by the Governor.
To simplify the procedure for future amendments to the composition of the Authority, the Bill repeals the existing provisions relating to such composition and makes corresponding provisions in a new Schedule which may be amended by the Governor in Council.
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The changes proposed in the Bill are straightforward and are largely technical. They have the full support of the Authority and the agreement of the institutions.
Bill referred to the House Committee pursuant to Standing Order 42(3A).
THEFT (AMENDMENT) BILL 1992
THE SECRETARY FOR SECURITY moved the Second Reading of: "A Bill to amend the Theft Ordinance."
He said: Mr Deputy President, I move that the Theft (Amendment) Bill 1992 be read a Second time. The Bill seeks to increase the maximum penalty for the offence of taking a conveyance without authority from three years' to seven years' imprisonment.
The problem of stolen and missing vehicles has been of great concern to the community. By the end of this year, we anticipate that some 7 000 vehicles will have been reported missing during 1992 of which some 4 000 will have recovered. This represents a 10% increase on the previous year in the total number of vehicles missing, and a 10% drop in the recovery rate.
In most cases, the police have to rely on the offence of taking a conveyance without authority to charge those who take away vehicles. But the penalties imposed by the courts for this offence of taking a conveyance without authority have been low. In the past 18 months, out of some 300 persons convicted of this offence, 34 were sentenced to periods of imprisonment, none exceeding 18 months. A further 131 were fined, the highest fine imposed being $4,000. And there has been a marked increase in the number of defendants charged with the offence who have either jumped bail or repeated the same offence a second time whilst on bail.
I believe that the present level of penalty for this offence is insufficient to deter offenders. We therefore propose to raise the maximum penalty to seven years imprisonment. This proposal reflects the wish of the general public that steps must be taken to reduce the problem of stolen and missing vehicles.
Bill referred to the House Committee pursuant to Standing Order 42(3A).
EXEMPTIONS FROM REGISTRATION AND TRANSFER OF
POWERS (MISCELLANEOUS AMENDMENTS) BILL
Resumption of debate on Second Reading which was moved on 25 November 1992 Question on the Second Reading of the Bill proposed, put and agreed to.
HONG KONG LEGISLATIVE COUNCIL — 16 December 1992 1299 Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order 43(1).
LORD WILSON HERITAGE TRUST BILL
Resumption of debate on Second Reading which was moved on 11 November 1992 Question on the Second Reading of the Bill proposed, put and agreed to. Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order 43(1).
COMPANIES (AMENDMENT) (NO. 2) BILL 1992
Resumption of debate on Second Reading which was moved on 15 July 1992 Question on Second Reading proposed.
MR LAU WAH-SUM: Mr Deputy President, the Bill before us today contains only 18 clauses. Its text is simple but its proposals are controversial.
It is so controversial that after six meetings, the Legislative Council ad hoc group set up to study the Bill, of which I am the convener, is still unable to get an unanimous view. While the majority of the members of the ad hoc group hold the strong view that the Bill should be supported subject to the Committee stage amendments which will be moved by the Secretary for Monetary Affairs later today, two members have expressed great reservation to support the Bill. My honourable colleague, Mr Martin BARROW, being one of the members who holds opposite view, has already given notice to this Council that he will move under his name Committee stage amendments to clauses 7 and 14 of the Bill.
In order to understand the controversy, some background information is necessary.
The existing section 40A of the Companies Ordinance was enacted in 1972. From that time onward, a director of a local company would be liable to prosecution if he has authorized the issue of a prospectus which contained any untrue statements. This strict liability offence, however, is not applicable to prospectuses issued by overseas companies.
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The new section 342F of the Bill now proposes that this strict liability offence should be extended to cover also prospectuses issued by overseas companies.
No one has disagreed with the principle that the accuracy of the content of prospectuses should be regulated. No one has disagreed with the principle that both local and overseas companies should be subjected to the same degree of regulation. There are, however, opposite opinions regarding the standard of care that should be imposed on the directors.
Those who oppose the Bill mainly hold the arguments that:
(a) prospectuses are long and complex documents. No director could know personally the truth of every statement in it. It is wrong in principle therefore to imprison directors for simple negligence; and
(b) because it is relatively easy to establish an offence under the strict liability approach, over-zealous regulatory authorities would be easily tempted to bring directors to courts.
They propose that the existing section 40A and the proposed new section 342F of the Companies Ordinance should be amended to bring them in line with section 47 of the United Kingdom Financial Services Act 1986 so that a director should only suffer criminal liability if he knew that the prospectus contained an untrue statement or that he was reckless as to whether the prospectus contained an untrue statement when he authorized the issue of the prospectus.
With great respect, I must say that I can hardly accept that these are sound arguments for not supporting the Bill. I must point out that:
(a) prospectuses are the first documents that investors can get hold of to gain an insight into the business of a company proposing listing in the Stock Exchange. It is important, if not vital, that information given therein should be accurate, that the directors should be held highly responsible to ensure the accuracy and that the interests of the investing public and the integrity of Hong Kong as an international financial market should be well protected. Let us look at some self explanatory statistics during the period from 1 January to 23 November this year : a total of 56 companies were newly listed on the Stock Exchange with market capitalizations amounting to HK$43 billion and funds raised amounting to HK$9 billion.
(b) as confirmed by the Administration, no prosecution has been initiated against any directors under the existing section 40A for the past 20 years. It would be unrealistic to think that the Administration will now suddenly initiate prosecution action under
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this section and the similar new section 342F simply because of the passage of the Bill.
(c) the wording of section 47 of the United Kingdom Financial Services Act covers a much wider area than merely the issue of prospectuses and that the structure thereof is quite unsuitable for prospectuses alone. Section 47 of the United Kingdom Financial Services Act, if adopted and applied to prospectuses alone, would carry serious prosecution implications, that is, it would be very difficult, if not impossible, for the prosecution to prove beyond doubt the state of mind of the director at the time when he authorized the issue of a prospectus. In practice, prosecutions could hardly be initiated.
Mr Deputy President, despite the controversy, the ad hoc group has not lost sight on another equally important matter, that is, whether the reverse-onus provisions in the existing section 40A and the proposed new section 342F are in breach of Article 11(1) of the Hong Kong Bill of Rights Ordinance which preserves one's right to be presumed innocent until proved guilty according to the law.
I am glad to report that the ad hoc group has been fully briefed by the Administration and is convinced that the sections in question can stand the challenge of the Bill of Rights. I must point out, however, that this issue is ultimately a matter for the courts.
Mr Deputy President, during the scrutiny of the Bill, the ad hoc group has spotted that there are some discrepancies between Part II of the Companies Ordinance which applies to locally incorporated companies and Part XII which applies to companies incorporated outside Hong Kong. In response, the Administration has agreed to conduct a review with a view to removing any unnecessary distinctions. I should be grateful if the Secretary for Monetary Affairs would confirm that this will be done so that there would be a genuine level playing field between the two categories of companies at the end of the day.
Mr Deputy President, may I once again appeal to my honourable colleagues to join me and the majority of the members of the ad hoc group to give their support to the Bill.
MR MARTIN BARROW: Mr Deputy President, I would like to take this opportunity to explain why I will be moving amendments to this Bill at the Committee stage. While I accept that this is an opportunity to bring the prospectuses of overseas incorporated companies under the same treatment as local prospectuses, this has been achieved in a manner contrary to modern legislation in the United Kingdom which has moved away from strict criminal liability for negligent misstatements. The section in the United Kingdom legislation which corresponds to section 40A in the Hong Kong Companies
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Ordinance has already been repealed in the case of prospectuses for listed issues. The Financial Services Act 1986 now attaches criminal liability only to statements, promises or forecasts which the maker knows to be misleading, false or deceptive or which he makes recklessly.
It is, in my view, Mr Deputy President, a complete non sequitur to say, as the Government has been arguing and as Mr LAU has just mentioned, that because section 47 of the United Kingdom Financial Services Act covers a wider area than simply the issue of prospectuses, the structure of that section is unsuitable for prospectuses alone. I do not understand how anyone can seriously put that argument forward. A prospectus is no different from any other form of statement, whether in writing or made orally, relating to an issue of securities. A prospectus is simply a document that contains a number of statements concerning the issuer and the issue and is not a mythical beast. It is, in my view, wrong to suggest that the approach of section 47 cannot be applied to prospectuses.
The difficulties of prosecution which the Administration referred to obviously did not deter the United Kingdom parliamentary draftsmen in preparing section 47. The Hong Kong Administration seems unwilling to undertake the same prosecution burden that the United Kingdom authorities have undertaken.
Why, Mr Deputy President, should more weight be placed on a remark by a Canadian judge than on the legislative approach adopted in the United Kingdom? There is one simple answer, which is that the Canadian judge's statement happens to suit the purposes of the Hong Kong Administration. If a section 47 approach is taken the burden on the prosecution will, of course, not be to prove negligence beyond a reasonable doubt but to prove recklessness or actual knowledge beyond a reasonable doubt. I do not understand the distinction the oft-quoted Canadian judge is making between regulatory offences and other criminal offences. What he seems to be doing is concluding that the prosecution will have an easier time if the burden placed on it is lower. This is self-evidently correct but why it should be thought appropriate to duck a difficult issue in this fashion by imposing a reverse onus requirement is not explained by the Administration.
Under section 40A the onus of proof is shifted to the accused director once the prosecution has proved that the misleading statement has been made in the prospectus and that the accused director authorized its issue, which he undoubtedly will have done. It is not necessary for the prosecution to show that the director was even aware of the untrue statement. The director must then prove either the untrue statement was immaterial - and proving a negative is always very difficult - or that he believed on reasonable grounds that the statement was true, which will be impossible if the director was not even aware of the untrue statement. Why should not the prosecution have the normal responsibility of proving beyond reasonable doubt that the accused either intended to state something false or was reckless as to whether the statement was
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true or not? If the justification for creating a strict liability offence is that the accused is in a better position than anyone else to know the state of his own mind, the same might be said of any criminal offence up to and including murder.
To conclude, Mr Deputy President, in my view it is wrong in principle to imprison directors on the strict liability basis for mistakes in prospectuses. Yet under this legislation he may be liable, even if he hired the best professional advice available and relied on that advice. Why should issuers of prospectuses be singled out in this manner when such penalties are not imposed on lawyers, doctors, accountants or public servants who cause loss or damage to the public.
I hope there will be support for my amendment. Thank you.
MR PETER WONG: I concur with the Honourable LAU Wah-sum's speech on the Bill as now amended and wish to comment only on the Honourable Martin BARROW's amendment, which I do not support.
Section 40A imposes a very high degree of care on a director as to the accuracy of the facts contained in the prospectus. Whilst I do sympathize with the seemingly harsh onus that the director has to bear, we must remember that it is a purely voluntary and conscious decision of the individual director to put his name to a prospectus with the intention of attracting and convincing total strangers to put their hard earned money to acquire the security described in that prospectus.
In my long years as a professional accountant, I have found the stricture of this bit of legislation highly effective to convince every director who has put his name to a prospectus to put his nose to the grindstone, together with the professionals who do their job with due diligence. The fact that there have been no prosecutions and no outcries against inaccurate prospectuses attests to its effectiveness.
The modification, as propounded by the Honourable Martin BARROW in his amendment, would mean a lowering of that standard of care. We have heard that since it would be difficult, if not impossible, for the prosecution to prove beyond reasonable doubt the state of mind of the director at the time he signed the prospectus, the lower standard could be the thin end of the wedge and would allow anything but the highest degree of care to be taken. The integrity of our security market would be at stake.
MR JAMES TO (in Cantonese): Mr Deputy President, I absolutely concur with the arguments advanced by Mr Peter WONG a while ago. I should like to add a few arguments of my own in support of the report Mr LAU Wah-sum made on behalf of the ad hoc group.
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Mr Martin BARROW has argued that it would be wrong in principle to impose a custodial sentence on a director for a misstatement in a prospectus. The basis for his argument is that the issuance of a prospectus is a complicated and drawn-out process and it would be impossible for every director to personally acquaint himself with the full contents of a prospectus to make sure if every statement therein contained is true; even if a director has hired the best professionals upon whose advice he has relied, under the amended law as presently proposed he would nevertheless be liable to be punished. I cannot help but ask: If a director cannot be sure of the truth of the information, who is there to so make sure? So in terms of responsibility, we have to ask the director to bear it.
Another argument raised by Mr BARROW is that if ever there is to be liability, it should not be strict liabililty. Let me say that there are a number of factors to take into account when considering whether a particular criminal offence should be made a strict liability offence. These factors include the nature of the offence and its impact on society and also the consideration that strict liability should normally apply to regulatory offences only. Of course another consideration is that the defendant must be given an opportunity to defend his case so that the reasonableness or validity of the grounds of defence can be tested. In the amendment Bill before us, the defendant will have a valid defence if he can prove that he had reasonable grounds to believe that the information contained in the prospectus was true. Would it be very difficult for a director to prove that he had reasonable grounds to believe the contents of a prospectus to be true? A prospectus, from its gestation to fruition, involves a drawn-out process of numerous meetings and discussion papers to lead eventually to a final draft. A responsible director is absolutely capable of proving how the information contained in a prospectus was put together throughout the entire gestative process and that as a result he had reasonable grounds to believe the contents of the prospectus to be true.
Addressing the question from another angle, allow me to give an example (and I do not mean to be frivolous in so giving it). According to the existing law, the proprietor of a noodle stall will incur strict liability if he sells beef balls containing nitric acid. One can imagine the necessity under which the proprietor will have to examine very single beef ball. Even though he completely trusts his suppliers to have supplied him with beef balls containing no nitric acid, he will nevertheless incur criminal liability if any of the beef balls are found to contain this offending substance.
Perhaps the example of the noodle shop proprietor may be too remote. Let me now give a less remote example. The existing Companies Ordinance requires a company to fulfill its statutory obligations such as filing a yearly return with the Companies Registry, in default of which each and every director and also the company secretary will incur criminal liability. Of course there are numerous large companies who still rely on in-house or outside professional expertise in preparing such returns. But under the existing law, each and every director will be held responsible should there be misreporting of any sort.
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Another argument advanced by Mr BARROW relates to the defence available to a director. It is contended that it would be draconian, and indeed impossible, to require the director to prove that he had reasonable grounds to believe that the information contained in the prospectus was true because the director was often unaware of what statements had been included in the prospectus and therefore how could he prove that he had reasonable grounds to believe them to be true? My response to this is that if we accept Mr BARROW's amendment it would mean that we accept, as an exonerating circumstance from criminal liability, a company director's complete ignorance, or recklessness, as to whether the contents of a prospectus are true. I cannot concur with this viewpoint.
A third point concerns the question of time gap which Mr BARROW's proposed amendment gives rise to. The proposed amendment gives a valid defence to a director if he can prove that at the time he authorized the prospectus he had ensured the truth of its contents or that he had believed the contents to be true. But the amendment proposed by the Administration requires the director to ensure or believe that the contents of the prospectus are true at the time it is issued. We must remember that there is a time gap between the authorization of a prospectus by a director and the issue of the prospectus to the public. After authorization, there might be someone who amended it before issue. Therefore to the public or as far as protection of investors is concerned, the time of issue and the truth of the information contained in the finalized version of a prospectus is most material, but not the initial version of the prospectus when it was authorized internally within the company by the directors.
After collating and taking reference from the laws and precedents of many countries, Australia and Canada for instance (which are different from that of the United Kingdom), I believe that the precedents we have taken reference from are closest to the United States law. Therefore the ad hoc group has accepted the amendment proposed by the Administration, which amendment the United Democrats of Hong Kong also support.
SECRETARY FOR MONETARY AFFAIRS: Mr Deputy President, I am grateful to Mr LAU Wah-sum and members of the ad hoc group for their careful consideration of and support for this Bill together with the Securities and Futures Commission (Amendment) (No. 2) Bill 1992. I am also grateful to Mr Martin BARROW, Mr Peter WONG and Mr James TO for their support of the Bills in general.
Mr LAU has in the course of his speech described with admirable clarity a number of concerns which have been expressed by interested parties, and the ad hoc group's response to those concerns. I do not intend to be repetitive, but shall confine myself to a few outstanding matters.
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The first point I wish to address is Mr LAU's reference in his speech to the dissenting views of two members of the ad hoc group on the question of the standard of care that should be imposed on directors to ensure the accuracy of prospectuses. Mr Martin BARROW has elaborated the reasons for his disagreement and outlined the amendments which he will move at the Committee stage. In essence, Mr BARROW's proposal is that a person authorizing a prospectus containing an untrue statement should only be held criminally liable if he knew the prospectus contained an untrue statement or was reckless as to whether the prospectus contained an untrue statement. I do not support this proposal for a number of reasons:
(a) First of all, section 40A, which applies to locally incorporated companies, has been in the Companies Ordinance since 1972. I would stress that this Bill does not amend the long-standing provisions of section 40A or introduce any new, tougher, criminal sanctions for false statements in prospectuses. The effect is simply to extend existing provisions to cover prospectuses issued or distributed in Hong Kong by overseas incorporated companies.
(b) Secondly, section 40A encourages diligence on the part of directors in ensuring that untrue statements do not appear in prospectuses by imposing criminal liability for authorizing prospectuses containing untrue statements. It has proved itself to be an important and effective deterrent against the issue of false prospectuses by companies incorporated in Hong Kong and should provide similar deterrence in respect of prospectuses of overseas companies, thus establishing a level playing field for all concerned.
(c) The argument for changing section 40A is that it is somehow wrong in principle to criminalize negligent behaviour. As a matter of law, there is nothing repugnant in creating a criminal offence out of behaviour which is the product of negligence. Our legislation contains numerous examples. The negligent issuing of a prospectus can have such widespread and drastic consequences for the investing public that justify the imposition of criminal liability. Similar responses apply to the criticism that the section places a burden on a defendant to prove that his conduct was not negligent. Indeed such legislation is to be found in all comparable jurisdictions. The Australian and Canadian companies legislation closely resemble the section 40A approach to prospectuses which contain untrue statements. As Mr LAU has mentioned in his speech, legal advice obtained by the Administration is that there is unlikely to be any inconsistency with Bill of Rights provisions.
(d) Moreover, the proposed amendments would seriously reduce the effectiveness of the provisions since the prosecution would, in effect, be required to prove beyond doubt the state of mind of a director at the time when he authorized the issue of a prospectus.
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This would be a very difficult, if not impossible, task for those who are responsible for the enforcement of the provisions.
(e) Furthermore, concerning the comparison made with sanctions for negligence of lawyers, doctors and others, I submit that such comparison is irreleant. The conduct to which section 40A is directed is abuse of the privilege of incorporation, which cannot be closely compared to the negligent performance of personal professional services.
In short, I respectfully submit that should Mr BARROW's amendments to the existing section 40A and the proposed new section 342F be adopted, this Council would be doing a disservice to the investing public and taking a serious backward step against the efforts made during the past few years to strengthen the protection of investors. Damage to the reputation of the securities market in Hong Kong would most likely result.
The next point I would like to address is the request made by the ad hoc group to conduct a review on relevant sections of the Companies Ordinance in the future with a view to removing any undue discrepancies between the provisions in Part II of the Ordinance which are applicable to locally incorporated companies and those in Part XII of the same Ordinance which are applicable to companies incorporated overseas. I confirm that we will conduct such a review in consultation with the Registrar General's Department and the Securities and Futures Commission.
Last but not the least, in response to another request from the ad hoc group, I confirm that the respective roles of the Registrar General's Department, the Securities and Futures Commission and the Stock Exchange of Hong Kong as regards vetting, authorizing and registering of prospectuses will be explained in guidance notes which will be distributed to practitioners to tie in with the transfer of the prospectus vetting functions.
With these remarks, Mr Deputy President, I beg to move.
Question on the Second Reading of the Bill put and agreed to.
Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order 43(1).
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SECURITIES AND FUTURES COMMISSION (AMENDMENT) (NO. 2) BILL 1992
Resumption of debate on Second Reading which was moved on 15 July 1992 Question on Second Reading proposed.
MR LAU WAH-SUM: Mr Deputy President, the Legislative Council ad hoc group to study the Companies (Amendment) (No. 2) Bill 1992 is also charged with the responsibilities to examine the Securities and Futures Commission (Amendment) (No. 2) Bill 1992.
The group is satisfied with the provisions in the Bill.
Mr Deputy President, with these remarks, I support the motion.
SECRETARY FOR MONETARY AFFAIRS: Mr Deputy President, this Bill should be read in conjunction with the Companies (Amendment) (No. 2) Bill 1992, on which I spoke at length earlier this afternoon. I shall not be repetitive.
With these remarks, Mr Deputy President, I beg to move.
Question on the Second Reading of the Bill put and agreed to.
Bill read the Second time.
Bill committed to a Committee of the whole Council pursuant to Standing Order 43(1).
OCCUPATIONAL RETIREMENT SCHEMES BILL
Resumption of debate on Second Reading which was moved on 29 April 1992 Question on Second Reading proposed.
MR MARVIN CHEUNG: Mr Deputy President, the calamitous events surrounding the massive pension funds of the Robert Maxwell companies have made headlines around the world. They have alarmed the United Kingdom into an urgent review of the legal framework of retirement schemes.
For us in Hong Kong, we have cause to be doubly concerned as we do not as yet have any system in place to regulate private retirement schemes.
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We have no reliable information about the size of our population which is covered by retirement schemes or the value of the funds involved. It can, however, be safely said that the figures are substantial and growing. And although we have been spared any major crisis on the Maxwell scale, there have been at least five incidents of scheme failures that have come to the notice of the Official Receiver in the past three years, with the most serious one involving $20 million and 800 locally employed scheme members.
As these matters concern the life savings and financial security of many current and future pensioners, prudence dictates that we must put in place, as soon as we possibly can, a legal framework to underpin the operation of retirement schemes. We must ensure that retirement benefits promised to employees will be paid when they fall due.
The community has, in fact, been awaiting action for quite a while. In 1990, the Occupational Pension Schemes (Commerce, Trade and Industry and so on) Bill was published as a White Paper for public consultation. The Occupational Retirement Schemes Bill 1991 was subsequently introduced into this Council in May last year. This version of the Bill was, however, allowed to lapse on account of its complexity.
It is against this background that the 17-member Legislative Council ad hoc group, of which I am the convener, would like to recommend the present Bill to this Council.
Although this is still a complicated piece of legislation, it is, nonetheless, a simpler version than its predecessor. It has to be recognized that, owing to the very complex nature of different types of retirement schemes, the provisions dealing with the technical aspects of regulation will inevitably be complex.
The ad hoc group realized the importance of the task we were entrusted with, and the need to complete it fairly quickly. To speed up work, we set up a technical sub-group and a Chinese text sub-group to deal with the respective aspects of the Bill. We have held long and frequent meetings during the past seven months.
It is time well spent; because the final version of the Bill, with some 250 amendments to be moved at Committee stage, has embraced almost all of the changes that our ad hoc group found necessary. I must confess that even with all these changes, some may still find that further improvements to the Bill are desirable. But for a piece of legislation as complex as this one, it would hardly be realistic to aim at academic perfection.
I would like to take this opportunity to thank the team in the Administration headed by the Secretary for Monetary Affairs, Mr David NENDICK, for the very open and receptive attitude they took throughout the course of our deliberations.
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I would also like to place on record the group's appreciation of the valuable opinions put forward to us by various professional bodies, trade organizations and labour groups. The 11 submissions from them have greatly assisted our work.
May I also thank all members of the ad hoc group for their contributions to the deliberation of this very complex Bill, and to the staff of the OMELCO Secretariat for the most efficient and invaluable support given to us in tackling the Bill.
I shall concentrate on a number of key issues that have been considered by the ad hoc group, which are also the main concerns raised in the submissions. I shall leave it to my honourable colleagues on the ad hoc group to elaborate on other points that would merit the special attention of this Council.
The regulatory approach
The most important issue tackled by the group was the approach that should be taken in making regulations. We endorsed the four guiding principles embodied in the Bill, namely:
(a) separation of assets of the retirement scheme from those of the employer; (b) provision of sufficient funding to meet the scheme's liabilities;
(c) independent annual audit of the accounts of the scheme; and
(d) adequate disclosure of information to scheme members.
The question which we have asked ourselves repeatedly is whether the proposed mechanisms will be able to meet the objectives.
The Administration advised that the philosophy behind the regulatory framework contained in the Bill is based on a "hands-off" approach.
The Registrar of Occupational Retirement Schemes would rely on professionals to check and to certify that the basic principles have been complied with, both at the point of registration and at periodic intervals thereafter. With a proposed establishment of 36 staff, he is to be responsible for overseeing all the retirement schemes in Hong Kong which are estimated to number over 30 000. Accordingly, he will only be involved in maintaining the register of registered and exempted schemes and will not actively intervene in the affairs of any registered scheme unless the circumstances so require, such as when he is made aware of any alleged breaches of the legislation in relation to a scheme.
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We were aware of the worries of some employers about the stringency of the statutory requirements and the burden that would place on them. There was, however, concern expressed in some submissions and amongst some members of the ad hoc group that the proposed legislation had not gone far enough in giving protection to employees.
The Administration explained that the "hands-off" approach presently proposed is necessary to avoid an enormous bureaucracy involving substantial costs which would have to be passed onto employers or employees. The registration and monitoring system, which relies on checking and certification by professionals, is adopted in other jurisdictions such as the United Kingdom and Australia.
Having examined the proposed monitoring mechanisms in the light of these explanations, the group finally concluded that, while these measures might not cater for all eventualities, they would be a reasonable and practicable first step. However, we would strongly urge the Administration to keep the situation under review, and to introduce measures to enhance employee protection in the light of practical experience gained in the operation of this new law.
Amendments will also be moved at Committee stage to increase the level of penalties for certain offences to enhance the effectiveness of the legislation.
Trusteeship requirements
A separate but related issue is that of trusteeship requirements.
The group questioned whether the requirement for an independent trustee, that is a trustee who is not an associate or employee of the employer, would be effective to ensure asset separation. The concern was that, whilst the independent trustee may fall outside the statutory definition of associated persons in the Bill, he might be totally ineffective either because he is ignorant of his obligations or incapable of discharging these obligations.
The Administration did not, however, consider it appropriate to impose any criteria on the appointment of trustees. The reasons given were:
(a) it is difficult to rely solely on quantitative factors such as professional qualification or capital adequacy, since qualitative factors such as experience are equally important in determining whether a person or company can act as an effective trustee;
(b) the adoption of an approval process would entail a corresponding increase in bureaucracy on the part of the Registrar, and would result in a very "hands-on" approach leading to a significant increase in cost to the schemes;
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(c) in overseas countries where there are regulations governing the operation of retirement schemes, there are no precedents whereby qualifications are imposed on who may act as a trustee; and
(d) there would be implications for other laws where the concept of trusteeship is involved, as none of these has provided for minimum qualifications.
The Administration also pointed out that the present provisions in the Bill were already more advanced than the United Kingdom legislation in terms of requirements for independent trustees. Moreover, under the common law, trustees are bound to carry out their duties in good faith and with due care and prudence, and they are liable for their acts or omissions.
After very careful examination of the arguments for and against the concept of minimum qualification, the group reluctantly accepted the Administration's position. We recognized that even if the Administration were prepared to vet the qualifications of trustees against some suitable criteria, qualified trustees would probably demand fees which might well be disproportionate to the income of the smaller schemes.
Viewing the trusteeship requirement in the context of the overall regulatory framework, the approach being proposed appeared a sensible and practical one to adopt at this stage. We would, however, like to urge that the trusteeship provisions be reviewed in the light of developments in the United Kingdom as well as the regulatory experience locally.
We would also like to recommend that the position be reconsidered if and when a compulsory retirement scheme is to be introduced.
Domicile
I shall now turn to the question of "domicile".
The Bill proposes that, when applying for registration, the applicant should submit to the Registrar a statement from the solicitor stating, inter alia, whether the domicile of the scheme is Hong Kong or elsewhere. The term "domicile" is defined in the interpretation section of the Bill as the country or territory by whose system of law the scheme or trust is governed.
The group considered the need to tighten up the relevant provisions relating to "domicile" having regard to the possibility of a scheme opting for a foreign domicile in order to circumvent some aspects of the legislation.
The Administration advised that the Law Society is strongly in favour of the present definition because it allows for certainty. It assured the group that "foreign" schemes are also required to be registered to ensure that protection is afforded to the scheme members.
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Notwithstanding, the group considered some degree of control over the choice of jurisdiction necessary. We suggested that the Registrar should make rules concerning the acceptability of an overseas jurisdiction for domicile purposes in order to prevent operators from domiciling their schemes in just any place of convenience. The idea was that the operator should be required to prove his connections with the place of domicile unless it was a jurisdiction on a pre-approved list issued by the Registrar. The Administration agreed to the principle of the proposal but pointed out that it could only be achieved in the longer term when the Registrar had built up the necessary regulatory experience.
The group was also concerned that the Hong Kong court could not order the winding up of off-shore domiciled schemes even when their registrations have been cancelled. To ensure protection to the Hong Kong members of such schemes, a new provision will be moved at Committee stage to the effect that for an off-shore scheme to gain registration, it must undertake to pay off its Hong Kong scheme members upon deregistration by the Registrar.
Structure of the Bill
I have already touched on the structure of the Bill and the general view of the ad hoc group on this. I should also mention that a number of professional bodies have expressed concern about the provisions in the Bill relating to rules and guidelines to be made by the Registrar and the possibility of these giving the Registrar far too broad a discretionary power.
The Administration explained that the provisions for the Registrar to prescribe procedures, issue guidelines and exercise discretion over certain matters are necessary to allow procedural matters and technical issues to be dealt with outside the principal Ordinance, thus keeping it less complex. They are also required to ensure effective implementation of the legislation which will bring about a regulatory regime that is unprecedented. When the legislation is in operation, technical issues will crop up that must be dealt with in detail and demand considerable flexibility on the part of the Registrar. The rule-making power is designed to provide him with the necessary flexibility to adopt specific measures which he deems appropriate when circumstances so require.
The group is satisfied that the procedure for the making of rules under the Bill will follow those contained in section 34 of the Interpretation and General Clauses Ordinance (Cap. 1) covering the passage of subsidiary legislation, that is, this Council has the power to disallow or modify the rules when they are tabled. The Administration has also assured us that explanatory pamphlets will be published to facilitate easy understanding of the legislative requirements.
Mr Deputy President, there were several other substantive issues considered by the ad hoc group, such as the provisions regarding consultative
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committees, which should be reported to this Council. But as I have said earlier, I shall leave them to my honourable colleagues Messrs TAM Yiu-chung, Peter WONG and Henry TANG.
Before I wind up, I would like to address just one further point that has been raised many times during the group's deliberations, that is, how the present piece of legislation relates to the proposal for a compulsory retirement scheme for workers on which the public is currently being consulted.
The Administration advised that the Occupational Retirement Schemes Bill and the compulsory retirement scheme proposal are concerned with separate but related subjects. It would be extremely important to have the regulatory framework provided for in the Bill before us in place before any compulsory retirement scheme is introduced. The two are complementary and compatible. For this reason, we urge the Administration to review the measures which are the subject of our debate today as and when the terms of any compulsory retirement scheme are finalized.
In conclusion, I would like to say that the ad hoc group is satisfied that, subject to the amendments to be moved at Committee stage, the Bill can be supported.
It would however be wrong for me to suggest that all will be fine with retirement schemes as soon as the Council says "Aye" to this Bill. We need to give time for schemes to catch up with the statutory requirements. On commencement of the legislation, a grace period of two years will be allowed for schemes to register and five years for existing schemes to achieve solvency.
It has also to be accepted that what is being proposed will not prevent an orchestrated attempt to defraud like that in the Maxwell case. Indeed, no regulatory regime, no matter how draconian, will.
What the legal framework will do, we hope, is to provide a reasonable measure of protection to the retirement benefits of employees as these are promised to them, and to minimize the opportunities for losses of benefits whether by innocent errors or by design.
The Bill before us, even with all the recommended Committee stage amendments, is by no means ideal or perfect. It is nevertheless a practical first step, and one that is long overdue.
With these remarks, Mr Deputy President, I support the Bill.
MR TAM YIU-CHUNG (in Cantonese): Mr Deputy President, I am the deputy convener of the ad hoc group setting up to study the Bill. As a representative of the Labour Functional Constituency, I am glad that I can pledge my support to the Bill. Although the majority of our working population is still not entitled to
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enjoy any form of retirement protection, for employees in private sector who have already participated in retirement schemes, the imposition of legislative control over the operation of these schemes indeed brooks no delay.
As pointed out by the convener of the ad hoc group, Mr Marvin CHEUNG, the Occupational Retirement Schemes Bill is a very complicated piece of legislation. And the large number of amendments to be moved at Committee Stage can attest to the degree of complexity. It is encouraging, however, that although certain proposals in matters of principle are rather controversial and touch on different sectors' interests, every member in the ad hoc group still manages to adopt an objective and pragmatic attitude in resolving these issues, enabling the work of the groups to proceed smoothly.
I would like to take this opportunity to thank especially Mr Marvin CHEUNG, the group's convener, for his excellent leadership in guiding us to complete our arduous task of scrutiny in a systematic and efficient way. Moreover, Mr CHEUNG also contributed a lot by giving his invaluable professional advice on the technical aspects of the Bill.
Before giving my own views on the Bill, let me report, on behalf of the ad hoc group, our consideration and recommendations as to the provisions regarding consultative committees. These provisions, I am afraid, aroused the most heated controversy. Several concern groups had submitted their representations to the ad hoc group and their views on these provisions were varied. Naturally, organizations representing different sectors' interests would have entirely different views on the topic.
The Bill provides that contributory retirement schemes with more than 50 contributors may form a consultative committee when the majority of them wish to have such a committee established. The Bill also provides that the function of such a consultative committee is to advise the administrator of the registered scheme as regards the scheme. Any advice so forwarded shall be considered by, but not be binding on, the administrator.
Some business and trade organizations expressed concern over the provision of the formation of consultative committees whose function was to advise the administrator of the scheme. They were of the opinion that the operation of retirement schemes should be entirely left in the hands of professional administrators who have the required expertise. They were also worried that issues discussed by the consultative committees after their formation would exceed the scope of retirement benefits, and the committees would be turned into organizations where employees fight for other welfare. Some criticized that the provisions as regards the consultative committees' operation are not comprehensive and precise enough which may lead to confusion. On the other hand, labour groups demanded for bigger role than what imposed by the Bill to the participants of the schemes. They felt that the committees should be empowered with monitoring function and their decisions should be binding on the trustees or the schemes' administrators. Furthermore,
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some pointed out that the criteria governing the setting up of consultative committees were too strict under the Bill and should be relaxed.
The ad hoc group has made careful study of these different opinions. The Administration pointed out in its response to these opinions that the consultative committees should function as a communication channel between the participants and the administrators of the schemes. And the provisions in the Bill have been such designed that different sectors' interests are well balanced.
The ad hoc group took note of the fact that a retirement scheme is of vital importance to employees no matter if they are contributors to the scheme or not. Therefore, it proposed that the regulations regarding the consultative committees should extend to the "non contributory" schemes as well. The ad hoc group also studied the scale of local firms in the context of the staff size. The conclusion was that a sensible arrangement would be to lower the minimum number of participants in the scheme required to form a consultative committee from 50 to 20 so as to allow members of a retirement scheme more direct participation. As for small-scale firms employing less than 20 people, there was no obvious need to set up formal consultative committees. The proposal was accepted by the Administration.
On the functions of the consultative committees, the ad hoc group agreed that the proposed provisions in the Bill were appropriate. The group further considered that a more appropriate approach is for the Registrar to formulate regulations and directives as regards the detailed clauses and operation mode of consultative committees rather than stipulating them in the Bill.
Mr Deputy President, now we are in the resumption debate on the Second Reading of the Occupational Retirement Scheme Bill today. My mind goes back to the past few years when the community showed earnest concern over the issue of retirement protection and its monitoring and several incidents still make me feel deeply troubled. I still remember clearly to this day the Tung Wah Group of Hospitals incident, the LO's Mee Kwong incident, and the Millie's Group incident. The Tung Wah Group of Hospitals incident laid bare the potential hazards to employees as a result of inadequate retirement fund. The LO's Mee Kwong incident and the Millie's Group incident highlighted the fact that if no independent financial reserve was set aside by the employer for the retirement protection scheme, the employees' pension would go down the drain once the employer's business ran into financial difficulties. In view of such tragic episodes, the Occupational Retirement Schemes Bill lays down explicitly several guiding principles, including the separation of the retirement scheme's assets and the employer's assets, the employer making available sufficient fund to meet the liabilities of the retirement scheme, the professionals conducting independent audits on the scheme's accounts on a regular basis and the provision of sufficient information to participants of the scheme. The implementation of these principles will provide a certain degree of protection to existing and future compulsory retirement protection schemes. However, we should not overlook one point: existing schemes are given a grace period of five years
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from the enactment of the Bill to provide sufficient funding to meet their liabilities and all existing schemes are granted a two years transitional period to become registered. This shows that it will still take a long time to put the monitoring work of retirement schemes on the track. It is earnestly hoped that within this grace period, employers should answer to their conscience and not to impose harsh retirement conditions on employees nor to evade the responsibility of shouldering their employees' pension under different pretexts.
It is expected, with the Occupational Retirement Schemes Ordinance coming into force in full swing, existing retirement schemes could have healthier operation. But the safety net it offers to the retirement schemes is not wide enough, nor making the schemes risk-free. In the context of the Bill per se, is the Registrar's Office capable of meeting the stated objective by exercising effective and prudential supervision over all the registered retirement schemes in view of its limited resources and manpower? The Bill provides the setting up of consultative committees to advise the administrators of the relevant retirement schemes. But what likely effects do such advices produce? Would they make the retirement fund more in compliance with the wishes of the employees? As for retirement schemes exempted from registration and enterprises where consultative committees cannot be set up, what sort of management method would be adopted to set those employees' mind at ease so that they would accept these retirement schemes? Such issues should be given more attention in the future.
Generally speaking, I welcome the Government's actualization of the monitoring of retirement schemes. However, the Government does not have much experience in this area of work. I hope that the Government will draw relevant experience from other countries and make regular reviews on its future work so as to improve our retirement schemes and their monitoring.
Mr Deputy President, with these remarks, I support the Bill.
MR PETER WONG: Mr Deputy President, I was one of the advocates for the return of the 1991 Occupational Retirement Schemes Bill to the Administration for simplification.
For a piece of legislation that will profoundly affect the interests of our workforce of 2.7 million, it is incumbent on us, as legislators, to ensure that what we enact is workable and comprehensible.
I am glad that today I can pledge my support to the resumption of the Second Reading of the Occupational Retirement Schemes Bill, the 1992 version. Although the Bill is of a similar length and contains few changes of substance to the earlier version, I am generally satisfied that the drafting has been improved, and practicabilities taken care of, leading to an easier understanding of what is undoubtedly a complex matter.
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I have no doubts about the underlying principle of the Bill. Private retirement schemes is an important, and increasingly more so, aspect of our operating relationships with the workforce. Proper regulation is necessary and urgently required.
The Honourable Marvin CHEUNG and TAM Yiu-chung have already spoken on the more contentious elements of the Bill. I shall elaborate on a few points of special interest to the professions.
Taxation
Presently, retirement schemes are required to seek tax approval from the Commissioner of Inland Revenue in accordance with the Inland Revenue (Retirement Schemes) Rules made under section 87A of the Inland Revenue Ordinance. As the present Bill is silent on the taxation aspect of retirement schemes, there are concerns that it may result in double approval of the same scheme by the Commissioner of Inland Revenue and the Registrar of Occupational Retirement Schemes.
The Administration has assured the ad hoc group that we are not to be faced with such double red tapes. When the proposed legislation comes into force, registration under the Bill will be the requisite for tax benefits under the Inland Revenue Ordinance. Obviously, the extent of tax benefits can only be assessed by the Commissioner of Inland Revenue, but basically, no double approval will be required.
We are also given to understand that the necessary amendments to the Inland Revenue Ordinance will be brought before this Council at a slightly later stage. The idea is that existing "approved" schemes will retain their tax approval status for 12 months from the commencement of the Occupational Retirement Schemes Bill, but their "approved" status will lapse if they do not apply to the Registrar for registration or exemption within the period. This, of course, will be subject to the views of this Council with regard to the IRO amendments.
Provisions relating to pooled schemes
One of the major new provisions in the Bill, as compared to the previous one, are those relating to "pooled" schemes, for example, schemes covered by a master trust deed or insurance policy, with their assets pooled together for investment or administration purposes. To facilitate the small business establishments who will most likely participate in these pooling agreements, the Administration recommends a simplified registration process for such schemes. The Bill proposes that applications for the registration of individual participant schemes should only need to be accompanied by a certificate from the scheme administrator confirming that the individual scheme is part of the pool, together with a master statement from the solicitor and a master report from the auditor confirming the basic details of the schemes under application.
No comments yet.
Private notes are available after approval.