HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1903 OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 17 February 1993
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 JEREMY FELL MATHEWS, C.M.G., 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 MRS SELINA CHOW LIANG SHUK-YEE, O.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 PANG CHUN-HOI, M.B.E.
THE HONOURABLE SZETO WAH
THE HONOURABLE TAM YIU-CHUNG
THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P.
THE HONOURABLE LAU WONG-FAT, O.B.E., J.P.
THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P.
THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P.
1904 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 THE HONOURABLE MRS PEGGY LAM, O.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.
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, O.B.E., J.P. THE HONOURABLE ALBERT CHAN WAI-YIP
THE HONOURABLE VINCENT CHENG HOI-CHUEN
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 FREDERICK FUNG KIN-KEE
THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P. THE HONOURABLE MICHAEL HO MUN-KA
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 LAU CHIN-SHEK
THE HONOURABLE EMILY LAU WAI-HING
THE HONOURABLE LEE WING-TAT
THE HONOURABLE GILBERT LEUNG KAM-HO
THE HONOURABLE ERIC LI KA-CHEUNG, J.P.
THE HONOURABLE FRED LI WAH-MING
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1905 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. 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
THE HONOURABLE ANNA WU HUNG-YUK
ABSENT
THE HONOURABLE RONALD JOSEPH ARCULLI, J.P.
THE HONOURABLE MOSES CHENG MO-CHI
IN ATTENDANCE
MR MICHAEL LEUNG MAN-KIN, C.B.E., J.P.
SECRETARY FOR TRANSPORT
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
MR CHAU TAK-HAY, J.P.
SECRETARY FOR TRADE AND INDUSTRY
1906 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
MR JAMES SO YIU-CHO, O.B.E., J.P.
SECRETARY FOR RECREATION AND CULTURE
MR ANTHONY GORDON EASON, J.P.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS
MR TAM WING-PONG
SECRETARY FOR MONETARY AFFAIRS
THE CLERK TO THE LEGISLATIVE COUNCIL
MR CLETUS LAU KWOK-HONG
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1907 Papers
The following papers were laid on the table pursuant to Standing Order 14(2): Subject
Subsidiary Legislation L.N. No.
Road Traffic (Parking) (Amendment)
Regulation 1993 ...................................................................................... 29/93
Lifts and Escalators (Safety) (Fees) (Amendment)
Regulation 1993 ...................................................................................... 30/93
Merchant Shipping (Prevention of Oil Pollution)
Regulations (Exemption) Notice ............................................................. 31/93
Oral answers to questions
Explosion at Tap Shek Kok Power Station
1. MR LAU CHIN-SHEK asked (in Cantonese): With regard to the explosion at the Tap Shek Kok Power Station of the China Light and Power Company Limited (CLP) in August 1992, will the Government inform this Council whether the Administration's inter departmental investigation group has completed its report;
(a) if so,
(i) whether the investigation report will be published;
(ii) how the findings of the Government's investigation concur with and differ from those of the CLP report as far as the causes of the explosion are concerned;
(iii) according to the results of the Government's investigation, whether the causes of the explosion involve human error, and what the details are; and
(iv) what measures the Government will adopt to prevent the recurrence of similar incidents in future?
(b) if not, what the current progress of the investigation work is and when the report is expected to be completed?
1908 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
SECRETARY FOR SECURITY: Mr Deputy President, the inter-departmental investigation team, headed by the Fire Services Department, has completed its report. Its conclusion as to the cause of the explosion is similar to that reached by the China Light and Power Company. There are, however, some differences between its findings and those of the China Light and Power Company report.
A death inquest will be carried out in the second half of April to look into the causes of the deaths of the two China Light and Power Company employees killed in the explosion. In the course of this inquest, the Coroner and his jurors will consider the evidence contained in these two reports.
Until the completion of this inquest, and any other related legal proceedings that may be initiated, publication of the report of the inter-departmental group would be prejudicial to the parties involved. I am, therefore, unable at this stage to disclose any of the report's findings.
I can, however, assure Members that we will take all possible steps to ensure that a similar incident does not recur. The China Light and Power Company has not yet decided whether to rebuild the system damaged in the explosion. However, it has given an undertaking to introduce positive measures for improvement if and when it does rebuild. On receipt of an application by the company to rebuild the plant, we will, with the benefit of the two reports and the Coroner's findings, be in a position to ensure that all the necessary safety requirements are in place to prevent the recurrence of a similar incident in future.
DEPUTY PRESIDENT: Could I just for clarity ask Members, please, when they ask supplementary questions in Chinese which require simultaneous interpretation to ask their questions slowly so that the simultaneous interpreter can then convey the full meaning of the question? And, for much the same reason, will Members keep their questions to single questions and for the added reason that that will give other Members a chance to ask supplementaries as well.
MR LAU CHIN-SHEK (in Cantonese): Mr Deputy President, I would try to ask my question very very slowly. In paragraph four of his reply, the Secretary assured us that he would take all possible steps to ensure that a similar incident would not recur. Could the Secretary inform this Council of the "possible steps" that would be taken to ensure that a similar incident would not recur?
SECRETARY FOR SECURITY: Mr Deputy President, perhaps I could say first of all that there are no other systems in Hong Kong similar to the system at Tap Shek Kok where this explosion took place. I am told that in the other systems that operate at other power stations, because they are very different, it would be technically impossible to have an explosion caused by what happened
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1909
at Tap Shek Kok. Secondly, the China Light and Power Company has stated its intention to review its operational system at the plant and to implement improvement measures. And of course if and when it does decide to rebuild the system, then that will require to be licensed by the Director of Fire Services under the Dangerous Goods Ordinance and the Director of Fire Services will ensure that improvements are carried out and that the lessons from the explosion will be taken into account.
MR CHIM PUI-CHUNG (in Cantonese): Mr Deputy President, could the Secretary inform this Council of the cost of the inter-departmental investigation and whether it would be recovered from the China Light and Power Company, in line with the Government's policy of cost-recovery?
SECRETARY FOR SECURITY: Mr Deputy President, I do not know how much it cost. I will give a written answer to this question. (Annex I)
DR CONRAD LAM (in Cantonese): Mr Deputy President, may I ask, apart from the advice received from its equipment suppliers, whether the China Light and Power Company had sought advice from other equipment suppliers on the design and safety standards of the hydrogen generation plant? If not, why not?
SECRETARY FOR SECURITY: Mr Deputy President, I do not know who China Light and Power has received advice from. I will try and find out and answer that question in writing. (Annex II)
DR SAMUEL WONG: Mr Deputy President, as the damaged system, that is the hydrogen system, is not yet rebuilt, would that mean the total power supply security for Kowloon and the New Territories is not as secure?
SECRETARY FOR SECURITY: Mr Deputy President, I believe not. China Light and Power is now using a different system at Tap Shek Kok. It is a cylinder battery system which does not involve the use of hydrogen. I am told that since this system is operated at high pressure throughout, an accident could not be caused by the same circumstances as in the original installation.
MR WONG WAI-YIN (in Cantonese): Mr Deputy President, could the Secretary inform this Council whether the inter-departmental investigation team, headed by the Fire Services Department, will only look into that part of the installation that was affected by the explosion and whether, for the sake of public safety, a thorough investigation will be carried out to look into other parts of the operation as well?
1910 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
SECRETARY FOR SECURITY: Mr Deputy President, the group was charged with looking into the causes of the accident and that is what it has done. It has not looked into other aspects of the plant's operation.
MR PETER WONG: Mr Deputy President, the Secretary said in his reply that no publication of the findings will be made until after any related legal proceedings that may be initiated have been concluded. My question is: while recognizing the need not to prejudice any future legal proceedings, is the Secretary satisfied that he has balanced that against the right of the public to know what happened?
SECRETARY FOR SECURITY: Mr Deputy President, I have taken legal advice and I am told that this is the position that we should adopt at the moment. Of course, we expect that the findings will become public in April during the Coroner's inquest.
Civil servants' co-operative housing schemes
2. MR JIMMY McGREGOR asked: Regarding the sale of flats under the civil servant co-operative housing scheme for redevelopment by private developers, will the Government inform this Council:
(a) of the number of applications for redevelopment that have been approved so far, as compared to the number of applications received, and the number of flats involved;
(b) of the average time taken for approving such applications; and
(c) whether it will review the existing procedures to ensure that decisions on redevelopment are made speedily?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, three applications for the redevelopment of civil servants' co-operative housing schemes have been received so far. They involve 41 flats. One application involving 19 flats has been approved and the premium is being negotiated. This case took approximately five months to process from receipt of application to offer of basic terms.
Redevelopment proposals for civil servants' co-operative housing schemes are processed in the same way as other redevelopment proposals. Our procedures aim at dealing with applications as speedily as possible while ensuring that planning, lease and building requirements are met.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1911
MR JIMMY McGREGOR: Mr Deputy President, given the fact that this very large document of up to over 200 pages has been issued as a guide to developers and to owners of government co-operative housing flats, have specific complaints been made by owners and/or developers about the complexity of the procedures and the time taken to approve applications? If so, how many complaints and how many flats were involved?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, I am not aware of any complaints having been made on the complexity of the proceedings and the time taken. I think the idea that civil servants' co-operative housing societies could be dissolved and divest themselves of their property was debated for many years, particularly the legal complexities which in fact prevented progress being made. These problems have after several years been resolved to the point where there are now arrangements in place for redevelopment proposals to be formulated and carried through. I might say that in addition to the three cases where applications have actually been submitted — and the fact of those indicates that they are capable of approval — another 65 societies have by the end of 1992 managed to obtain consent from their members to start the process which could, but not necessarily will, lead to redevelopment proposals.
DR TANG SIU-TONG (in Cantonese): Mr Deputy President, will the Administration inform this Council whether or not all the applications for redevelopment of the civil servants' co-operative housing schemes by private developers will be approved and whether there are rules governing the land premium payable?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, it is only in the case of applications being forthcoming that proposals for redevelopment will be considered and if the conditions can be met the applications will be approved. So it is not possible for me to say, first of all, how many of the 238 schemes might wish to go down this road and, finally, how many of those might in the event be approved. As far as premium is concerned, this is a rather complicated subject since we are talking, first of all, about the removal of the basic restriction of the original grant which is made on a very restricted basis to civil servants and, secondly, about the possibility of further modifications to the lease conditions to allow redevelopment to a greater intensity than originally provided. I think it might be best if I were to try to provide a full explanation of these valuation and premium matters in writing and I will do so. (Annex III)
MR JIMMY McGREGOR: Mr Deputy President, assuming that all conditions are met in good time and in good order by the owners, could the Secretary indicate how long it should take between first application and final approval for
1912 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
the transfer of title in a flat to a civil servant in one of these schemes to enable him to sell the flat on the open market? Is there a common point of advice for civil servants to seek? This is a very heavy document indeed and it would need, I think, legal advice all the way through.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, the question of transfer of title and how long that should take is rather like the question as to the length of a piece of string because it involves different parties including the civil servants and their fellow members of their own co-operative society and it involves their reaching agreement at a certain stage. So the question of how long it takes a group of civil servants to reach agreement is also rather like the piece of string question. As regards the fathoming of the document that Mr McGREGOR has been waving, I believe that questions on this document can be put either to the Civil Service Branch or to the Buildings and Lands Department and those two organizations will be ready to provide answers.
DEPUTY PRESIDENT: A follow-up, Mr McGREGOR?
MR JIMMY McGREGOR: Yes, Mr Deputy President, as a point of clarification, I was not referring to any argument or discussion going on between civil servants in a co-operative society; what I was asking was this: at the point of application when these owners had agreed to make an application to the Government for transfer of title how long would it take on average between that time and the time of approval? Can the Secretary give some indication? Is it less than a year, for example?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, I am afraid that that is a question to which I cannot provide an answer. I have been concentrating, in considering the question, on answering as to how long it takes to approve an application to redevelop. I think as regards the question of transfer of title, I should have to refer to the Secretary for the Civil Service and the Director of Buildings and Lands to try and define that period and I will do so and offer a reply in writing. (Annex IV)
MR ERIC LI: Mr Deputy President, in view of the fact that Hong Kong has very scarce resource in land and this obviously is a good source of land for redevelopment, can the Secretary account for the very limited interest expressed in this form of redevelopment and, in particular, account for the missing two applications made, and also advise whether they have been abandoned and, if so, why?
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1913
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, I think part of one of my supplementary answers indicated that perhaps interest in it is not as limited as is suggested by the question in that, out of the 238 societies, 65 in fact have, as I put it, started on the track which may at some later stage involve an application for redevelopment. So I think the indications are that there is a good deal of interest. Exactly how one measures that I am not sure, but I do not think it is as limited as suggested by the question.
Positive non-interventionism
3. MR NGAI SHIU-KIT asked (in Cantonese): Will the Government advise this Council of its present economic policy, having regard to the statement made by the Financial Secretary, when he wrote for a local English newspaper in February 1992, that the phrase "positive non-interventionism" had outlived its usefulness years ago?
FINANCIAL SECRETARY: Mr Deputy President, our broad economic policy is remarkably consistent, though no doubt the precise formulation has varied over the years. I described it in this Chamber in my last Budget speech, and will not attempt to repeat it here, except perhaps for convenience to restate one sentence — Hong Kong's economic philosophy "is a commitment to enterprise, a commitment to low taxation and a commitment to free markets and free trade."
More recently, the Governor in his October speech opening this Session referred to the principle of "minimum interference and maximum support".
My comments about the phrase "positive non-interventionism" were intended to discourage its use in discussions of economic or industrial policy because it is so widely misused. I have the very greatest respect for Sir Philip HADDON-CAVE, for whom I worked, and who originated the phrase. He himself complained back in 1980 of the misuse of the phrase — "Not surprisingly, perhaps, some have claimed that this is really just a fancy term for laissez faire or, less kindly, that it covers up a "do-nothing" approach". Since it has continued to be so misused, it seemed — and still seems — to me that it would be better not to use it. Clearly our policy is in fact far from "do nothing".
MR NGAI SHIU-KIT (in Cantonese): Mr Deputy President, in the passage that he quoted, the Financial Secretary used the property market and the Stock Exchange of Hong Kong as examples to illustrate that the Administration will not, even under a free trade system, go to the extreme of "just monitoring but not interfering" or, in the Secretary's words, adopting a "do-nothing" approach. Then, will the Administration inform this Council whether on the basis of the spirit in the Secretary's reply the Administration thinks that the policy of
1914 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
positive non-intervention is no longer suitable for Hong Kong's industrial development under our present transforming economy? If so and in order to prevent the misuse of positive non-intervention, is it not necessary to explain more clearly the advantages and disadvantages of this policy so that foreign investors and local entrepreneurs are better prepared and can plan their investments?
FINANCIAL SECRETARY: Mr Deputy President, of course I cannot exactly answer the question because it uses the phrase which I am arguing is not a helpful one to use. I guess one could elaborate on that and say that one does not think compressing a policy into one sentence would be terribly helpful if one was trying to communicate with inward investors or others. So, of course, we do approach such people with a much longer explanation of our policy. But to attempt the impossible, we look very carefully at when it seems that intervention is really necessary, and I think, as has been commented, if one looks at our record over the last few years, for example, one will find that a considerable number of new measures have been introduced which directly benefit industry. I have a long list here; I do not think I will use it, but I will mention the most recent schemes, for example, the Applied Research and Development Scheme which was introduced fairly recently. There is a new industrial technology centre which is in the process of being built. There is a new industrial estate which is being built. So, yes, we intervene when it is necessary.
MR ROGER LUK: Mr Deputy President, could the Financial Secretary further explain the role of the Government in the context of the economic policy as stated in his answer?
FINANCIAL SECRETARY: Mr Deputy President, I believe I have already stated our economic policy insofar as it can be stated in a few words.
MR MARTIN LEE: Mr Deputy President, if the expression "positive non-intervention" has been misused, will the Financial Secretary please explain to this Council what the correct use of it is and what its true meaning is?
FINANCIAL SECRETARY: Mr Deputy President, the correct use is set out at some length running to some pages, by Sir Philip HADDON-CAVE in a speech to the Federation of Hong Kong Industries on 2 December 1980. I would be very pleased to make available to Members, any Members who want it, the six pages which summarize his interpretation of this phrase.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1915
DR HUANG CHEN-YA (in Cantonese): Mr Deputy President, I am very pleased to hear that the Administration's economic policy is not one of passivity and indifference. May I ask the Administration what training or retraining plans there are to improve the qualities and adaptability of our labour force?
FINANCIAL SECRETARY: Mr Deputy President, I think I am expected here to answer a question on the economic policy, but the manpower training policy I am not actually responsible for.
MR CHIM PUI-CHUNG (in Cantonese): Mr Deputy President, does the third paragraph of the Secretary's reply conflict with the fifth paragraph of the Governor's policy address on 7 October last year which says, "businessmen not politicians or officials make the best commercial decisions"?
FINANCIAL SECRETARY: Mr Deputy President, I certainly agree with the statement that the best business decisions are made by businessmen. I do not think there is anything in the third paragraph of my answer which conflicts with that.
DR LAM KUI-CHUN: Mr Deputy President, in the change of government policy from non intervention to minimum interference, what is the limit of government interference in free market affairs?
FINANCIAL SECRETARY: Mr Deputy President, there is no magic formula. That should be evident, I hope, from my previous replies. We are pragmatic. We are very happy to look at whatever case that can be made for intervention. We ourselves institute regular surveys of the main sectors of industry, for example, to see whether anything has to be done. But there is no way I can define where the balance gets tipped in favour of intervention beyond that sort of general description.
MR HENRY TANG: Mr Deputy President, I will attempt what Mr Martin LEE and Mr Roger LUK have failed. Without wishing to sound pedantic, could I ask the Financial Secretary to please clarify whether his explanation of "positive non-intervention" in the third paragraph of the main reply — where the Financial Secretary said the Government's policy is not to do nothing — would imply then that the Government's policy is simply positive intervention?
FINANCIAL SECRETARY: Mr Deputy President, I am sorry that it is not by now evident that I do not believe a very short catch phrase of that sort is particularly helpful because it is quite difficult to find one which does not
1916 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
immediately get used in a completely different way. And I have been at many meetings where we have been attacked for our policy of "positive non-interventionism" which has been interpreted precisely in the way which is set out in the third paragraph of my reply, which does not bear any resemblance to what it originally meant. And I suspect if I coin a new catch phrase it will suffer the same fate.
MRS SELINA CHOW: Mr Deputy President, in spite of the reluctance of the Financial Secretary to use the phrase "positive non-intervention", it does imply restraint on the Government's part to intrude by way of regulation or legislation on the spirit of free economy which has served Hong Kong well. Will the Financial Secretary assure this Council that the same restraint will be exercised in the Government's present and future economic policy?
FINANCIAL SECRETARY: Mr Deputy President, I believe that in the first paragraph of my answer, I have already restated, through quoting myself, a commitment to free markets and free trade, in other words, a belief in the market mechanism and a belief that we only intervene when the market mechanism is not working properly.
MR FRED LI (in Cantonese): Mr Deputy President, have the advisory boards of the Administration, like the economic advisory board under the Financial Secretary, conducted any studies or made any recommendations on the overall economic development of Hong Kong?
FINANCIAL SECRETARY: Mr Deputy President, we have of course many studies no matter whether one is looking at particular sectors of the economy or the economy as a whole, and indeed we publish — I think every six months — a pretty comprehensive survey of our economy. I cannot attempt to summarize all those studies here but I will certainly confirm that we have in a number of fora looked at the economy both in the broad and in the sectoral.
MR PETER WONG: Mr Deputy President, based on today's catch phrase of the principle of minimum interference and maximum support, would the Financial Secretary please set out performance measures which he proposes to introduce to let us know what are the acceptable minimum interference and the ideal level of maximum support?
FINANCIAL SECRETARY: Mr Deputy President, I believe I have been asked a similar question only a few moments ago when I said that of course there is no formula whereby we can define when to intervene and when not.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1917 Safety standards of guesthouse buildings
4. MR MARTIN BARROW asked: Would the Government inform this Council what steps it has taken and is planning to take to improve safety standards in all commercial outlets and common areas within guesthouse buildings?
SECRETARY FOR SECURITY: Mr Deputy President, guesthouses are usually found in buildings of mixed commercial and residential use. These buildings, like all others, must comply with fire safety requirements imposed under the Fire Services Ordinance. They must be provided with fire safety installations in accordance with standards prescribed in the Code of Practice for Minimum Fire Service Installations and Equipment.
The most common commercial outlets with potential fire risks in mixed user buildings are restaurants, clubs and guesthouses.
Restaurants are licensed by the Urban Services and the Regional Services Department under the Public Health and Municipal Services Ordinance. Fire safety and electrical safety requirements are imposed as part of the licensing conditions.
Since the enactment of the Hotel and Guesthouse Accommodation Ordinance in May 1991 and the Clubs (Safety of Premises) Ordinance in June 1991, guesthouses and clubs have also been subject to a licensing system. Specialist teams, including staff from the Fire Services Department, ensure compliance with the licensing requirements. In particular, they monitor the fire safety standards in guesthouses and clubs to ensure public safety. Electrical safety is regulated by the Director of Electrical and Mechanical Services under the Electricity Ordinance.
The two problems most frequently found in the common areas of mixed user buildings are obstruction to means of escape and ageing electrical systems and wiring.
As regards obstructions, in addition to inspections made in response to complaints, regular inspections are carried out by the Fire Services Department in these premises. Fire hazard abatement action or prosecution action is taken, as appropriate, against offences under the Fire Services Ordinance, to ensure that the common areas are free from obstruction and that the fire services installations are in proper working order.
Owners of fixed electrical installations in the common areas of buildings are required to employ registered electrical contractors to carry out maintenance work on electric wiring, under the Electricity Ordinance. The Electrical and Mechanical Services Department carries out checks in these premises.
1918 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
The most effective way of ensuring safety in these buildings is to persuade owners and commercial operators to accept responsibility themselves for managing their own buildings properly. Public education is, therefore, important. Messages on fire prevention and good building management have been disseminated through local publicity campaigns, public announcements on television and radio and information leaflets. In addition, staff from the Fire Services Department make regular visits to these premises to drive home these messages and to give the owners and commercial operators advice on ways of improving safety in their buildings.
MR MARTIN BARROW: Mr Deputy President, is the Secretary aware that neighbours adjacent to Chungking Mansions, the most notorious guesthouse building, believe that its overall condition has further deteriorated in the last two years, including the dangerous accumulation of garbage from the building which lies about in adjacent areas, and will the Secretary advise whether or not he will accept overall responsibility for entering into a dialogue with the owners and occupiers to improve the profile and safety of that particular building?
SECRETARY FOR SECURITY: Mr Deputy President, I am certainly aware that Chungking Mansions, which probably has more guesthouses than any other building in Hong Kong, gives particular cause for concern. There are very regular inspections of that building by the Fire Services Department and the statistics that I have in respect of that building in recent years do not indicate a deteriorating position; they indicate an improving position. But nevertheless I would not be complacent about that. I think that if the owners and operators in that building wish to discuss fire safety, I will be happy to make arrangements for them to do so with the Fire Services Department.
MR GILBERT LEUNG (in Cantonese): Mr Deputy President, since the enactment of the Hotel and Guesthouse Accommodation Ordinance and the Clubs (Safety of Premises) Ordinance in May 1991, they have been under severe criticism by people in the trade, because the measures introduced are said to be a nuisance to the public and, in fact, impracticable. Will the Administration inform this Council what steps will be taken to seriously consider the views of people in the trade?
SECRETARY FOR SECURITY: Mr Deputy President, the Secretary for Home Affairs, I think, is responsible for the licensing of these two types of premises. Could I defer to him please?
SECRETARY FOR HOME AFFAIRS: Mr Deputy President, I have not heard of any complaints against the provisions of the Clubs (Safety of Premises) Ordinance and so I am not in a position to answer that part of the question. But
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1919
in respect of the Hotel and Guesthouse Accommodation Ordinance, we have some difference of views with the hotel operators and we are now in the middle of a dialogue with the trade. We have had a number of meetings with them, discussing in all seriousness the various provisions under the Ordinance. There are complaints about the harsh conditions imposed under the Ordinance and there is also complaint about the rather inflexible approach which is provided for under the Ordinance. These various problems are recognized. I would be the first one to accept that some sort of flexibility would be required in order to bring out the effects of these Ordinances. And so, with that in mind, I have appointed a working group to look into the various problems and to work in conjunction with the industry. And, as I have said, we are making good progress with the working group. We have so far had three meetings and I believe that we are close to a compromise being worked out to the satisfaction of both the trade and ourselves, without at any stage minimizing the high safety standard we demand of these buildings. And so I hope that within about a month I would be able to announce the results of the deliberations, hopefully to the satisfaction of all.
MR EDWARD HO: Mr Deputy President, will the Secretary inform this Council how many licences have been issued to guesthouses since the enactment of the Hotel and Guesthouse Accommodation Ordinance in May 1991? If none has been given, will he please inform us by when will all the guesthouses be regulated?
DEPUTY PRESIDENT: Secretary for Security or Home Affairs?
SECRETARY FOR HOME AFFAIRS: Yes, Mr Deputy President, if I may take on this question. Since the enactment of the Ordinance we have inspected all guesthouses. So far we have covered about 2 000 of them but there are different types of guesthouses. They are broken down into a few categories, firstly, those catering for tourists, secondly, those catering for local people, and then there are the motels and also holiday bungalows in the outlying districts. So they are of varying types and I think because of the large number involved, we have got to give priority to certain types and so we have concentrated on the guesthouses in highrise buildings catering for tourists. There are 615 of them and we have registered them all. We have paid visits to all these establishments and at the moment they are not given licences but they have already taken out Certificates of Exemption, exempting them from the provisions of the Ordinance. This is a temporary device to buy us time so that we can fully inspect these premises and lay down what improvement works are to be carried out by them. It gives them a grace period for them to catch up with the remedial works. The period allowed started from 1 September 1991. It is a two-year period and it will end on 31 August this year. And so by the end of August this year we expect these 615 guesthouses to fully comply with our
1920 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
requirements and to take out a licence from that day. If they do not comply with the requirements, then they will have to cease operation.
MR TAM YIU-CHUNG (in Cantonese): Mr Deputy President, before the enactment of the Clubs (Safety of Premises) Ordinance, Mr Peter TSAO, the former Secretary for Home Affairs, stated clearly that the Ordinance was not meant to be against trade unions. However, after it had been passed into law, I received many complaints from trade unions, saying that the whole exercise, and that included the inspections, was a great nuisance to them. They also complained that they were charged $500 all the same for a Certificate of Exemption even though the inspection proved to be futile. Will the Secretary for Home Affairs make any improvement in this respect?
SECRETARY FOR HOME AFFAIRS: Mr Deputy President, can I seek a ruling from you that the question goes well beyond the ambit of the original question?
DEPUTY PRESIDENT: Well, the supplementary must relate to the original question or answer — I am quoting from Standing Order 19 — and the licensing of clubs was brought in as part of the main answer. So I think the supplementary does relate to the main answer but any supplementaries to follow that supplementary will be out of order.
SECRETARY FOR HOME AFFAIRS: Thank you, Mr Deputy President. I am afraid I have no ready answer to that question. Can I suggest that I provide a written reply to that? (Annex V)
MR HOWARD YOUNG: Mr Deputy President, in relation to the point made by the Honourable Martin Barrow on complaints regarding the notorious Chungking Mansions, I believe not all of these complaints are related to safety but really to the unsightliness. Can the Government assure us that even though they do not come within the Buildings Ordinance Office or the Fire Services Department as mentioned in the reply such complaints will be taken up by some department and not just left unattended to?
SECRETARY FOR SECURITY: Mr Deputy President, I was dealing in my reply with fire safety. Certainly in so far as there are obstructions which may well be unsightly in these buildings which interfere with the means of fire escape, then those of course will be dealt with by the Fire Services Department. But the Fire Services Department is restricted by the Fire Services Ordinance to dealing with matters relating to fire safety. I think that if the question is referring to other matters such as protuberances on the outside of buildings, that
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1921
goes well beyond the original question and well beyond the competence of the Fire Services Department.
MRS PEGGY LAM (in Cantonese): Mr Deputy President, according to the Secretary's reply, prosecution action will be taken against any offences under the Fire Services Ordinance. Will the Secretary inform this Council of the number of guesthouses prosecuted and of the maximum penalty meted out since the enactment of the Ordinance?
SECRETARY FOR SECURITY: Mr Deputy President, I do have some statistics here relating to prosecutions of the establishments that I mentioned in my answer. In 1992 there were a total number of almost 4 000 prosecutions against unlicensed restaurants and there were also many prosecutions by the Urban Services Department relating to the breach of the licensing conditions; I believe in 1992 just over 500. I understand that there have not, to date, been any prosecutions in respect of unlicensed clubs and guesthouses because, as the Secretary for Home Affairs has explained, there is still a grace period in operation for those establishments.
Media coverage on purportedly supernatural phenomena
5. MR LEE WING-TAT asked (in Cantonese): Regarding recent media coverage on matters about fortune telling, supernaturalism, spiritualism, evil spirits and weird phenomena, will the Government inform this Council:
(a) of its policy on press reports and television programmes of this nature;
(b) whether it is aware of the undesirable psychological effect of such reports and programmes on the public, particularly the children; and
(c) whether it will adopt any measures to ensure that the general public have a thorough understanding of such matters?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, the Government's policy on press reports and television programmes on fortune telling, supernaturalism, spiritualism, evil spirits and weird phenomena is no different from its general policy on media coverage on other subjects. The media enjoy freedom of expression and have editorial freedom to give treatment to any subject in a way they consider appropriate, having regard to the laws of Hong Kong on such matters as official secrets, libel, security and emergency, contempt of court and indecency, and so on.
1922 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
The Government's attention has been drawn to the undesirable psychological effect which inappropriate coverage of such matters may have on the public, particularly on children, by complaints made to the Broadcasting Authority. Whilst there are no controls imposed on the printed media, there are specific provisions in the television codes of practice governing the timing, form and nature under which such matters may be covered on TV programmes. The aim is to protect children from anxiety or fear caused by such subjects. For example, no such subjects are allowed to be covered in programmes broadcast during family viewing hours, and advertisements on fortune tellers and the like are prohibited. In addition, there are also provisions in the codes of practice restricting material likely to mislead, alarm, frighten or be injurious to community well-being, with particular restrictions on material likely to upset children.
Any TV station found to have breached these codes is liable to sanctions by the Broadcasting Authority.
The TV codes of practice are public knowledge and are published as part of the annual report of the Broadcasting Authority which is tabled in this Council.
The Government does not intend taking additional measures, besides those I have described, to advise the public further on the matters raised. However, I hope that any publicity given to this question and my answer to it will serve to remind those in the media to act responsibly and have regard to public sensitivity and feelings. Hopefully, this will also serve to remind parents and teachers of their own particular responsibilities in educating children and young people to adopt the right attitude in dealing with such matters.
MR LEE WING-TAT (in Cantonese): Mr Deputy President, personally I support freedom of press and freedom of expression. There was however a KCRC commercial last year in which a group of cheerful kids played an imitation game of train. The commercial was a good one and very interesting indeed but a man who called himself Master said on television and in newspapers that those kids were dead and in fact were zombies. According to him, they had bleeding mouths and their feet were above ground. Has the Administration received any complaints on what this so-called Master said; and are there any complaints on this in newspapers? If so, what action has been taken by the Administration?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, the Broadcasting Authority has received a number of complaints concerning the particular programme that Mr LEE has referred to and, having examined and investigated those complaints, the Broadcasting Authority has given suitable advice to the TV station concerned requesting the station to exercise greater care in the selection of material and to observe more closely the codes of
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1923 practice, particularly those governing the showing of programmes for children's viewing.
MR MICHAEL HO (in Cantonese): Mr Deputy President, I would like to follow up the reply of Mr James SO. He said the Administration had given advice to the TV station on receipt of complaints. May I ask whether advice should be given to the TV station concerned, or it is the advertisement or the discussion following it that is called into question?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, I think the complaints refer to the programme where a fortune teller was invited to appear on a live discussion programme to discuss the particular advertisement. There has never been any complaint that the advertisement itself has a problem or is unacceptable. So the complaints refer to the programme which commented on the advertisement and therefore the Broadcasting Authority examined those complaints in the light of the programme rather than in the context of the advertisement itself.
MRS ELSIE TU: Mr Deputy President, I do not know these advertisements that have been referred to, but it has occurred to me that the Government does have API which is flashed on to drive home the message that smoking is hazardous to health. I see no reason why they cannot have an API which will warn the public against such practices and stress the fact that they are not real but all in the imagination and harmful.
DEPUTY PRESIDENT: Is there a question mark at the end?
MRS ELSIE TU: I am sorry, Mr Deputy President. Would the Administration consider this?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, I will certainly pass this comment to the Government Information Services for consideration.
REV FUNG CHI-WOOD (in Cantonese): Mr Deputy President, would the Administration consider requesting TV stations to show words of warning on screen to advise parents not to leave their children unaccompanied in discussion programmes that touch on supernatural subjects?
1924 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, the codes of practice governing the contents and nature of television programmes are very clear with regard to what types of programmes are suitable for viewing at what sort of hours and what types of programmes must carry certain warnings if they are shown in family viewing hours and so on. At the present moment, according to information given to me by the Broadcasting Authority, the number of complaints they have received relating to violence and indecency far exceed those complaints that relate to this particular subject matter and in the view of the Broadcasting Authority it appears that the main public concern does not warrant introducing such a measure.
MR TIK CHI-YUEN (in Cantonese): Mr Deputy President, the recent coverage on supernatural matters in fact will have undesirable psychological effect on children and my daughter is one of the victims. What actions have been taken by the Administration and the Education Department to assist teachers and parents to educate children so that they will have a proper understanding on supernaturalism and fortune telling?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, I am afraid I do not know what measures the Director of Education has taken with regard to introducing such subjects in the teaching material. I can approach him and ask for a written reply from him.
MRS PEGGY LAM (in Cantonese): Mr Deputy President, will the Administration inform this Council whether the broadcasts of programmes on fortune telling, supernaturalism, spiritualism, evil spirits and weird phenomena will lead to superstition? If so, will consideration be given to prohibiting this kind of programmes on televisions and radios?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, I think in my main answer I have already covered this point. The Government as a matter of policy does not wish to impose any restrictions on the freedom of the media in presenting any subject matters. I think it is not the intention of the Government to introduce such restrictive measures.
Explosives used in film shooting
6. MR MAN SAI-CHEONG asked (in Cantonese): Since the inclusion of fireworks under the ambit of the Dangerous Goods Ordinance following the riot in 1967, it appears that licences have only been granted for its use for the purpose of Lunar New Year firework displays. Will the Government inform this Council:
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1925
(a) of its policy regarding the use, conveyance and storage of explosives for pyrotechnic effects by the film and television industries;
(b) whether there have been any applications for licences to use explosives in film shooting since 1967, and if so, what the total number of applications received is and how many licences have so far been granted for this purpose;
(c) whether it is aware of any illegal use of explosives in film shooting by the film and television industries and the reasons for it; and
(d) if so, what measures it will take to remedy the situation to ensure the safety of the public and the filming making crews and to meet the needs of the film and television industries?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, as in the case of other industries, the use, conveyance and storage of explosives by the film and TV industries for pyrotechnic effects are governed by the Dangerous Goods Ordinance (Chapter 295) and its Regulations. In essence, in the case of storage and conveyance, they are subject to licence by the Commissioner of Mines, whilst their use is subject to permit by the Director of Marine if it is on water, and the Secretary for Recreation and Culture if on land.
However, since 1967, the Government has, as a matter of policy, imposed a general ban on fireworks which include pyrotechnics. This ban is still in force. Notwithstanding this ban, permits to discharge fireworks have been granted from time to time for special occasions and celebrations such as the Lunar New Year fireworks display.
According to our records, no applications for permits for the use of pyrotechnics in film and TV productions have been received by any of the relevant authorities since 1967. Thus no permits have been granted for such purposes.
It would appear that pyrotechnics has only been used in film and TV productions in recent years. We do not know why the film and TV industries have not applied for permits. This could be due to a number of reasons including ignorance, fear of not obtaining the necessary permit in time, or fear of not being granted a permit at all.
We are in the process of drawing up procedural guidelines to facilitate the granting of permits for the controlled use of pyrotechnics in theatrical, film and TV productions. The relevant industries have been consulted on these procedural guidelines.
1926 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
In addition to safeguarding public safety, including that of the film crew and production team, these guidelines are also designed to meet the special needs of the industries. We hope to promulgate these guidelines soon, possibly within the next couple of months.
MR MAN SAI-CHEONG (in Cantonese): Mr Deputy President, scenes of explosion which involve pyrotechnic effects are common in action and war films and cop-and-gangster movies produced by local TV and film industries. According to the Secretary's answer, the TV and film industries have never submitted any application for permit for the use of pyrotechnics in the last 25 years. Why has the Administration not taken any action, especially legal action, against this situation of non-compliance or a situation, we may say, where there is a complete lack of guidelines? May I ask which department should be responsible for this? We do not know that the Administration is drawing up procedural guidelines until now. How will the Administration ensure that these guidelines can meet the needs of these industries in their productions on the one hand and can safeguard public safety and safety of the film crew on the other?
DEPUTY PRESIDENT: Those are two long questions, Mr MAN. Could you keep it to one question?
MR MAN SAI-CHEONG (in Cantonese): Mr Deputy President, perhaps I will just confine to one area, that is, since the Administration has not received any application for permits for the use of pyrotechnics from producers in the past twenty years or so while we always see the use of pyrotechnics in films, may I ask why the Administration has turned a blind eye to this situation and which department should be responsible for this situation of non compliance or a situation, we may say, where there is a complete lack of guidelines?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, until the film and TV industries make application for permits, it is sometimes very difficult for the authorities to know when the industries use pyrotechnics because quite often a lot of these scenes which involve some pyrotechnic effects are not necessarily shot locally in Hong Kong. On many occasions they are shot outside of Hong Kong. So until we receive complaints it would be very difficult for the authorities concerned to act on those complaints.
MR MICHAEL HO (in Cantonese): Mr Deputy President, I have a follow-up question to ask. Given that for more than 20 years, no applications have been received, does it mean that the Administration is completely unaware of the illegal use of explosives locally? And will investigation be made?
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1927
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, the relevant authorities did receive complaints from time to time and these have been investigated and acted on.
MR FREDERICK FUNG (in Cantonese): Mr Deputy President, in the penultimate paragraph of his answer, the Secretary mentioned that procedural guidelines are being drawn up to facilitate the granting of permits in future. I believe that many of the explosion scenes on TV or in films are shot locally because from the background we can see that they are local places. Meanwhile, how is the Administration going to draw the attention of TV and film producers to such provisions? What action will the Administration take if they are in possession of explosives or intend to use them in their productions?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, as I mentioned in the main answer, these guidelines are being drawn up in close consultation with the film and TV industries. In the consultation process we have already advised the industries to refrain from the illegal use of pyrotechnics in the course of their production and no doubt we shall be monitoring this situation. But we hope that with the promulgation of the guidelines the industries will be able to apply for proper permits for the use of such pyrotechnic effects.
DEPUTY PRESIDENT: Mr Michael HO, do you have a follow-up question?
MR MICHAEL HO (in Cantonese): Mr Deputy President, I would like to follow up my previous question. We learnt from the Administration's reply that investigations had been carried out and actions taken. What are the results and what specific actions have been taken?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, I do not think my answer has referred to any survey being taken by the authorities concerned. I think in my answer I referred to the consultation process being taken in the drawing up of the guidelines and I also referred to the fact that we have not received any application. There is no record of applications received from the industries for permits. So I am at a loss as to the nature of the question.
MR MICHAEL HO: Mr Deputy President, can I have a follow-up, please? DEPUTY PRESIDENT: As long as it is a real follow-up, Mr HO, yes.
1928 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
MR MICHAEL HO: Mr Deputy President, my question has been asking whether the Administration has carried out any investigations, not consultations. Can the Government answer the question please?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, as there have been no permit applications submitted, clearly there has been no investigation on applications. But as I mentioned in answer to one of the earlier supplementaries, the police did receive a number of complaints in the past and these have been duly investigated and, where appropriate, prosecution action has been taken.
DR CONRAD LAM (in Cantonese): Mr Deputy President, may I ask the Secretary whether over the years the Administration has ever written to the film and TV companies to draw their attention to the provisions of the Dangerous Goods Ordinance (Cap 295) governing the use of pyrotechnics? If not, is this in line with the spirit of "positive non interventionism"?
DEPUTY PRESIDENT: Just the first part of the question, Secretary.
SECRETARY FOR RECREATION AND CULTURE: Yes, Mr Deputy President. As far as our records show, we have not specifically written any letters or communication to the TV and film industries to remind them of the provisions of the Dangerous Goods Ordinance. But I think when the Ordinance was enacted and at the time when the ban on fireworks and pyrotechnic effects was introduced there was considerable publicity and I would think that the general public as a whole are well aware of these provisions.
MRS SELINA CHOW: Mr Deputy President, first I would like to declare interest as a director of a TV company. Can the Secretary for Recreation and Culture confirm that the guidelines referred to in the penultimate paragraph of his answer refer to explosives and use of bullets as well as pyrotechnics, because normally pyrotechnics would mean fireworks display? And would the Secretary also advise what steps the Government will take to ensure that the practical implementation of the procedures will not cause unnecessary bureaucratic delay to the efficient conduct of film and television productions?
SECRETARY FOR RECREATION AND CULTURE: Mr Deputy President, I am afraid I do not have the exact definition of pyrotechnics in front of me and therefore cannot advise Mrs CHOW whether it includes bullets. But I can say that pyrotechnics includes every means that involves the use of explosive. I will give Mrs CHOW a written reply on this. (Annex VI) As regards the second part of the question, the guidelines, as I said in the main answer, are drawn up after
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1929
extensive consultation with the industries and are specifically designed to facilitate acceptance and application by the industries. The industries generally have expressed satisfaction that the procedures that are now laid out in the guidelines are acceptable to them.
Written answers to questions
Linked exchange rate system
7. DR PHILIP WONG asked (in Chinese): Will the Government inform this Council under what circumstances the linkage of the exchange rate between the local currency and the US dollar will be discontinued before the transfer of sovereignty?
FINANCIAL SECRETARY: Mr Deputy President, exchange rate stability is a crucial element for the stability and prosperity of Hong Kong. The maintenance of the present linked exchange rate system is therefore firm government policy. We have no intention of changing this policy.
Conventions on biological diversity and climate change
8. MR DAVID LI asked: In the light of the motion carried by this Council on 2 December 1992 urging the Administration, among other things, to adopt the two Conventions endorsed in the Earth Summit 1992, will the Administration inform this Council what measures the Hong Kong Government will take to communicate Hong Kong's commitment to the United Nation's Conventions on Biological Diversity and Climate Change?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, the Government's commitment to the United Nation's Conventions on Biological Diversity and Climate Change was clearly expressed when this Council debated the issue on 2 December 1992. The environmental objectives of the Earth Summit are worthy of our support and we intend to do our best to fulfill them.
The Second Review of the 1989 White Paper on the Environment, which is due to be published later this year, will provide us with another opportunity to demonstrate our commitment to the Conventions. We are now assessing the overall implications. This is not a simple task as some of the issues relate to areas which have traditionally been considered as falling outside the environmental sphere. It is therefore necessary to consult widely within the Administration on how we can achieve a more comprehensive yet integrated approach to environmental protection.
1930 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
In the meantime, we will continue the actions which we have already started. For instance, we are actively considering the establishment of marine parks and marine reserves and, in conjunction with the World Wide Fund for the Nature (HK), the establishment of a comprehensive environmental profile for the territory.
Air passenger departure tax
9. MR TAM YIU-CHUNG asked (in Chinese): In the light of the views expressed by some airline staff that the existing arrangement of requiring airline companies to collect departure tax on behalf of the Government has increased their workload and sometimes even caused the staff financial losses (for example, through discrepancies in accounting), will the Government inform this Council whether the existing arrangement will be reviewed by the relevant authorities?
SECRETARY FOR ECONOMIC SERVICES: Mr Deputy President, section 4 of the Air Passenger Departure Tax Ordinance, Cap. 140, provides for the airline operators to be responsible for the collection of the Air Passenger Departure Tax (APDT). This has been the arrangement since the introduction of the tax in 1983.
A fee is paid to the airline operators by the Government to cover staff and other costs incurred in connection with collection, accounting, security and administration of the tax. The approved estimate for the collection fee in the financial year 1992-93 is $19 million.
The present system of APDT collection has generally worked well both in terms of passengers' convenience and security of revenue collection. The Government is nevertheless always prepared to consider suggestions for improving the system further.
Timber storage
10. MR ALBERT CHAN asked (in Chinese): The Government has recently terminated the short-term tenancy of Yam O Log Pond. The timber industry claimed that this has led to a drop in the stock of timber in Hong Kong and a rise in price of about 30%. Will the Government inform this Council:
(a) of the quantity, volume and value of timber imported over each of the last five years;
(b) of the total area of land used for the storage of timber in Hong Kong at present;
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1931 (c) of the criteria adopted in the allocation of land for the storage of timber; and
(d) whether it is aware of the situation claimed by the timber industry and what measures are in hand to deal with the problem?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President,
(a) There are different kinds of timber with different units of measurement. Annex A provides a breakdown of the import figures from 1988 to 1992.
(b) There are no readily available figures on the total area of land used for the storage of timber. This is because timber may be stored on land designated for timber storage as well as on general storage and other sites. However, Annex B shows the areas specifically designated for log pond, timber storage and sawmill purposes known to the Buildings and Lands Department.
(c) A number of factors are taken into account in allocating land for timber storage, for example, site availability, competing demands from different end-users, compatibility with the surrounding environment and the circumstances of the individual case.
(d) The Industry Department is currently conducting a survey on the timber industry. This includes the importation, storage and sawing of logs as well as the use of sawn logs in the construction industry. The study will be completed shortly and if there is evidence that storage sites are insufficient, the Planning Department will initiate a site search for more.
Annex A
Import of Timbers
1988
Quantity Value (HKD)
Wood in rough or roughly
squared (mainly logs)
SITC 247100 Logs of coniferous species 14 776 (cu.m.) 12,199,163 SITC 247204 Teakwood 18 634 (cu.m.) 64,646,512 SITC 247205 Sandalwood 440 467 *(kg) 10,584,296 SITC 247206 Decorative wood 7 603 (cu.m.) 33,169,331 SITC 247209 Logs of non-coniferous species 593 351 (cu.m.) 379,254,781
Sub-total - 499,854,083
1932 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 Import of Timbers
1988
Quantity Value (HKD)
Wood simply worked
SITC 248200 Lumber of coniferous species 14 034 (cu.m.) 17,133,597 SITC 248304 Teakwood 17 074 (cu.m.) 69,262,699 SITC 248305 Sandalwood, simply worked 25 961 *(kg) 2,076,228 SITC 248306 Decorative wood 533 (cu.m.) 3,065,560 SITC 248309 Lumber of non-coniferous species 236 032 (cu.m.) 291,124,405
Sub-total - 382,662,489
Plywood, veneer,
improved or
reconstituted wood
SITC 634100 Wood sawn and veneer sheet 9 027 555 (sq.m.) 33,607,973 SITC 634200 Plywood 66 395 499 (sq.m.) 1,315,328,963 SITC 634310 Improved wood 343 (sq.m.) 70,859 SITC 634320 Reconstituted wood 1 006 049 (sq.m.) 19,829,538 SITC 634410 Blockboard etc. 31 684 776 (sq.m.) 563,632,934 SITC 634910 Hoopwood etc. - 3,488,594 SITC 634920 Wood beadings and moudings - 14,072,478 SITC 634939 Wood simply shaped or worked - 35,633,059
Sub-total - 1,985,664,398 Overall total - 2,868,180,970
Note: *To obtain a crude estimate of the quantity in cu.m., a conversion factor 1kg=0.00141585 cu.m. may be used.
Import of Timbers
1989
Quantity Value (HKD)
Wood in rough or roughly
squared (mainly logs)
SITC 247100 Logs of coniferous species 2 592 (cu.m.) 2,174,234 SITC 247204 Teakwood 26 915 (cu.m.) 88,893,565 SITC 247205 Sandalwood 259 512 *(kg) 11,346,397 SITC 247206 Decorative wood 14 391 (cu.m.) 64,001,324 SITC 247209 Logs of non-coniferous species 517 140 (cu.m.) 296,684,858
Sub-total - 463,100,378
Wood simply worked
SITC 248200 Lumber of coniferous species 10 169 (cu.m.) 14,303,346 SITC 248304 Teakwood 22 204 (cu.m.) 101,085,891 SITC 248305 Sandalwood, simply worked 41 980 *(kg) 1,545,277 SITC 248306 Decorative wood 980 (cu.m.) 3,712,837 SITC 248309 Lumber of non-coniferous species 222 269 (cu.m.) 301,231,931
Sub-total - 421,879,282
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1933
Import of Timbers
1989
Quantity Value (HKD)
Plywood, veneer,
improved or
reconstituted wood
SITC 634100 Wood sawn and veneer sheet 7 488 520 (sq.m.) 33,333,531 SITC 634200 Plywood 78 929 702 (sq.m.) 1,351,868,756 SITC 634310 Improved wood 0 (sq.m.) 0 SITC 634320 Reconstituted wood 789 057 (sq.m.) 16,697,335 SITC 634410 Blockboard etc. 34 750 240 (sq.m.) 628,754,267 SITC 634910 Hoopwood etc. - 6,494,318 SITC 634920 Wood beadings and moudings - 38,777,000 SITC 634939 Wood simply shaped or worked - 68,980,558
Sub-total - 2,144,905,795 Overall total - 3,029,885,455
Note: *To obtain a crude estimate of the quantity in cu.m., a conversion factor 1kg=0.00141585 cu.m. may be used.
Import of Timbers
1990
Quantity Value (HKD)
Wood in rough or roughly
squared (mainly logs)
SITC 247100 Logs of coniferous species 7 758 (cu.m.) 12,325,925 SITC 247204 Teakwood 20 842 (cu.m.) 78,151,859 SITC 247205 Sandalwood 322 577 *(kg) 7,634,415 SITC 247206 Decorative wood 24 586 (cu.m.) 75,936,615 SITC 247209 Logs of non-coniferous species 526 566 (cu.m.) 293,664,438
Sub-total - 467,713,252
Wood simply worked
SITC 248200 Lumber of coniferous species 12 386 (cu.m.) 17,940,050 SITC 248304 Teakwood 20 609 (cu.m.) 86,315,860 SITC 248305 Sandalwood, simply worked 6 100 *(kg) 465,500 SITC 248306 Decorative wood 2 286 (cu.m.) 8,623,544 SITC 248309 Lumber of non-coniferous species 206 802 (cu.m.) 297,576,912
Sub-total - 410,921,866
Plywood, veneer,
improved or
reconstituted wood
SITC 634100 Wood sawn and veneer sheet 2 774 908 (sq.m.) 21,204,100 SITC 634200 Plywood 123 129 540 (sq.m.) 1,843,844,772 SITC 634310 Improved wood 182 (sq.m.) 41,808 SITC 634320 Reconstituted wood 1 639 785 (sq.m.) 31,230,682 SITC 634410 Blockboard etc. 40 759 698 (sq.m.) 601,586,642 SITC 634910 Hoopwood etc. - 13,209,878
1934 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
Import of Timbers
1990
Quantity Value (HKD)
SITC 634920 Wood beadings and moudings - 31,242,102 SITC 634939 Wood simply shaped or worked - 194,995,828
Sub-total - 2,937,355,812 Overall total - 3,815,990,930
Note: *To obtain a crude estimate of the quantity in cu.m., a conversion factor 1kg=0.00141585 cu.m. may be used.
Import of Timbers
1991
Quantity Value (HKD)
Wood in rough or roughly
squared (mainly logs)
SITC 247100 Logs of coniferous species 8 278 (cu.m.) 11,785,395 SITC 247204 Teakwood 17 188 (cu.m.) 64,978,291 SITC 247205 Sandalwood 279 817 *(kg) 10,904,863 SITC 247206 Decorative wood 33 218 (cu.m.) 97,683,529 SITC 247209 Logs of non-coniferous species 505 040 (cu.m.) 340,344,706
Sub-total - 525,696,784
Wood simply worked
SITC 248200 Lumber of coniferous species 15 236 (cu.m.) 21,902,144 SITC 248304 Teakwood 33 517 (cu.m.) 131,722,073 SITC 248305 Sandalwood, simply worked 9 370 *(kg) 250,194 SITC 248306 Decorative wood 3 015 (cu.m.) 9,716,548 SITC 248309 Lumber of non-coniferous species 260 419 (cu.m.) 394,585,287
Sub-total - 558,166,246
Plywood, veneer,
improved or
reconstituted wood
SITC 634100 Wood sawn and veneer sheet 4 093 290 (sq.m.) 25,339,609 SITC 634200 Plywood 148 916 225 (sq.m.) 1,790,219,428 SITC 634310 Improved wood 0 (sq.m.) 0 SITC 634320 Reconstituted wood 1 729 122 (sq.m.) 31,723,961 SITC 634410 Blockboard etc. 28 300 542 (sq.m.) 528,527,731 SITC 634910 Hoopwood etc. - 6,092,878 SITC 634920 Wood beadings and moudings - 55,419,821 SITC 634939 Wood simply shaped or worked - 218,609,430
Sub-total - 2,655,932,858 Overall total - 3,739,795,888
Note: *To obtain a crude estimate of the quantity in cu.m., a conversion factor 1kg=0.00141585 cu.m. may be used.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1935
Import of Timbers
1992
Quantity Value (HKD)
Wood in rough or roughly
squared (mainly logs)
SITC 24730 Wood in rough 0 (cu.m.) 0 SITC 24740 Wood of coniferous species 16 009 (cu.m.) 13,604,000 SITC 24751 Tropical, wood of non-coniferous species 68 601 (cu.m.) 130,702,000 SITC 24751 Wood, of other non-coniferous species 462 830 (cu.m.) 383,653,000
Sub-total 547 440 (cu.m.) 527,941,000
Wood simply worked
SITC 24820 Wood of coniferous species, sawn 23 230 (cu.m.) 42,680,000 SITC 24830 Wood of coniferous species, other - 3,292,000 SITC 24840 Wood of non-coniferous species, sawn 247 268 (cu.m.) 517,386,000 SITC 24850 Wood of non-coniferous species, other - 246,896,000
Sub-total - 810,254,000
Plywood, veneer,
improved or
reconstituted wood
SITC 63411 Veneer & plywood, coniferous sheet 292 892 (sq.m.) 3,760,000 SITC 63412 Veneer & plywood, non-coniferous sheet 8 099 879 (sq.m.) 46,265,000 SITC 63421 Densified wood 9 691 (sq.m.) 294,000 SITC 63422 Particle board 3 695 672 (sq.m.) 61,825,000
SITC 63431 Plywood, with outer ply of non-coniferous wood
114 601 864 (sq.m.) 1,786,766,000
SITC 63439 Plywood, solely of sheets of wood 760 211 (sq.m.) 23,529,000
SITC 63441 Plywood, laminated with outer ply of non coniferous wood
16 729 392 (sq.m.) 401,960,000
SITC 63449 Plywood, laminated n.e.s 1 561 702 (sq.m.) 29,186,000 SITC 63491 Hoopwood - 938,000
Sub-total 2,354,523,000 Overall total - 3,692,718,000
Figures for 1992 are in terms of the Standard International Trade Classification (SITC) Rev. 3 whereas figures for earlier years are in terms of SITC Rev. 2
1936 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 Annex B
Timber Storage
Uses Hectares
Log Ponds 10.0
Timber Storage 20.5
Sawmill 8.6
Textbooks of secondary and primary schools
11. MR JAMES TO asked (in Chinese): Will the Government inform this Council:
(a) how many complaint cases relating to errors in the textbooks of secondary and primary schools have been reported over the past three years and what the main issues under complaint are;
(b) what procedures are being adopted to scrutinize secondary and primary school textbooks;
(c) whether consideration will be given to reviewing the existing procedures; if so, what the specific plans for such review are; if not, what the reasons for not doing so are?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the answers to Mr TO's questions are as follows:
(a) Over the past three years, two cases have been reported to the Education Department of alleged errors in the textbooks of secondary and primary schools, namely:
(i) a complaint in March 1990, which turned out to be unsubstantiated, concerning the wrong use of a Chinese character in a Primary V Social Studies textbook;
(ii) a complaint in August 1992 citing incorrect grammar, usage, style and examples in a set of English textbooks for secondary schools. This was found to be partially substantiated.
(b) The review of textbooks is undertaken by a Textbooks Committee of the Education Department and its Textbooks Reviewing Panels, which comprise Education Department (ED) officers, heads and teachers of schools, and lecturers of colleges of education and tertiary institutions. Each textbook submitted for review is assessed
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1937
by at least two reviewers, according to whether it follows the syllabuses prepared by the Curriculum Development Council or the Hong Kong Examination Authority and attains acceptable standards in terms of content, sequence, exercises, language, illustration and format. The textbook is then graded either A, B or C by the co-ordinator of the relevant subject reviewing panel, taking into account the assessments of the reviewers. The grade given is considered by the Chairman of the Textbooks Committee and if endorsed, the publisher is notified accordingly. All textbooks graded "A" are included in the "List of Textbooks Recommended by the Textbooks Committee". The List is issued to schools on a quarterly basis. Textbooks graded "B" are excluded from the list and are neither recommended nor prohibited from being used in schools. A textbook which is found to be totally unsuitable is graded "C" and prohibited from being used in schools.
(c) The existing procedures have evolved over a long period of time and are reviewed regularly, in consultation with the three local publisher's associations. No separate review outside this on-going process is considered necessary. However, following receipt of the complaint in August 1992, the ED reviewed its procedures and issued instructions to its reviewers to take greater care to check for grammar, usage, style and the appropriateness of examples used in the text.
Car theft
12. MR CHIM PUI-CHUNG asked (in Chinese): As car theft in Hong Kong is still a serious problem in the recent months, will the Government inform this Council:
(a) apart from introducing legislative amendments to impose heavier penalties on taking conveyance with authority, what further plans are in place to combat car theft activities;
(b) whether consideration will be given to establishing a special joint committee comprising representatives from relevant Government departments and private organizations to tackle the problem of car theft; if not, what the reasons are; and
(c) how it would strengthen liaison with relevant institutions in China on matters concerning the smuggling of stolen vehicles from Hong Kong?
1938 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
SECRETARY FOR SECURITY: Mr Deputy President, many unrecovered stolen vehicles are smuggled out of Hong Kong. Therefore, in addition to introducing heavier penalties for vehicle theft, we are planning to bring forward legislation to impose higher maximum penalties for smuggling generally, and more effective control on certain types of boats which are commonly used in the smuggling of vehicles. The police and other law enforcement agencies are continuing their efforts to tackle the related problems of vehicle theft and smuggling. Operational tactics are regularly reviewed to take account of the increasing sophistication of vehicle theft and smuggling syndicates, and very considerable resources are devoted to this task. The police will continue to use publicity to emphasize to vehicle owners, car-park operators and the security staff of private residential buildings the importance of security.
The prevention and detection of car theft is a matter for the police. The police have held meetings with an ad hoc group for the Reduction of the Incidence of Vehicle Crime on a quarterly basis since 1990. The group comprises representatives from the General Insurance Council, the Accident Insurers Association, the Motor Traders Association, the Finance House Association and a number of car-park operators. Representatives from Transport Department, Customs and Excise Department and Trade Department have also attended these meetings. The group is a useful forum for the exchange and development of ideas and we believe it should continue. The police will consider adding to this group other relevant bodies as necessary. We believe the establishment of a new committee would be a duplication, and is not necessary.
There is close and regular liaison with the Chinese authorities on the smuggling of stolen vehicles from Hong Kong into China. This problem is high on the agenda of every discussion which we have with the Chinese authorities on law enforcement matter, at both the political and operational level. The Commissioner of Police has personally raised the matter on several occasions with the Chinese law enforcement authorities. He has also recently written to the heads of the law enforcement agencies of neighbouring countries and to the Interpol Secretariat to request their assistance in tackling the problem of vehicle theft in Hong Kong. We believe that the Chinese Police Liaison Officers who have recently arrived in Hong Kong will strengthen our liaison with the mainland law enforcement agencies.
Vacant units in public housing estates
13. MR WONG WAI-YIN asked (in Chinese): Will the Government inform this Council:
(a) of the number of vacant units in each of the public housing estates as at the end of December 1992;
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1939
(b) of the number of units that have been left vacant for more than one year and the longest period of such vacancy; and
(c) of the reasons for leaving the public housing units vacant; and what action will be taken to expedite the allocation of vacant units to applicants on the waiting list?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, as at 31 December 1992, there were 16 900 vacant flats in public housing estates. Within the time available, it has not been possible to work out the vacancy position for each estate as at 31 December 1992. However, a detailed breakdown of the vacancy position as at 11 February 1993 is at the Annex. The number has gone down to 15 900.
Of the 16 900 flats vacant by the end of 1992, 1 650 had been vacant for over a year. Nine of them have been vacant for 29 months despite repeated attempts to offer them to the committed categories. This is the longest period of vacancy.
A majority of the vacant flats were not ready for immediate allocation. Some 36% of the 16 900 were reserved to meet planned redevelopment, clearance and major repairs programme requirements and 47% were under refurbishment. The remainder (17%) were either not taken over by the estate management or were already being offered to eligible applicants.
The Housing Authority's policy is to allocate flats as soon as they are completed or recovered. The Authority has taken the following measures to ensure that more flats can be let out to waiting list applicants:
(a) to release flats reserved for committed categories in line with programme adjustments and take-up rate;
(b) to expedite the refurbishment programme by appointing regional consultants and redeploying internal maintenance resources; and
(c) to streamline procedures for the hand-over of newly completed flats from contractors.
As a result of these measures, the number of vacant flats has been reduced by 53% in the past two years.
1940 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 Annex
Hong Kong Housing Authority
vacancy position of existing rental estate
(position as at 11.2.93)
District Estate Stock
No. of
vacant flats
% of
vacancy
Fanling Cheung Wah 5 094 72 (69) 1.4 Cho Yuen 5 077 153 (151) 3.0 Tai Ping 1 429 8 (5) 0.6 Tin Ping 5 698 41 (7) 0.7 Wah Ming 5 868 39 (1) 0.7
Hong Kong East Chai Wan 3 497 50 (39) 1.4 Fung Wah 1 218 325 (1) 26.7 Hing Man 1 999 13 (9) 0.7 Hing Wah II 3 578 80 (70) 2.2 Model Housing 629 1 (1) 0.2 North Point 1 956 19 (17) 1.0 Siu Sai Wan 4 011 227 (1) 5.7 Tsui Wan 2 340 3 (2) 0.1 Wan Tsui 3 940 18 (17) 0.5 Yue Wan 2 177 23 (16) 1.1
Hong Kong West Ap Lei Chau 4 455 42 (25) 0.9 Lei Tung 7 536 39 (39) 0.5 Sai Wan 638 13 (13) 2.0 Shek Pai Wan 4 611 120 (120) 2.6 Wah Fu I 4 876 141 (137) 2.9 Wah Fu II 4 378 97 (93) 2.2 Wong Chuk Hang 5 480 290 (253) 5.3 Wah Kwai 3 389 316 - 9.3
Islands Cheung Kwai 472 2 (2) 0.4 Lung Tin 184 26 (26) 14.1 Ngan Wan 466 34 (20) 7.3
Kowloon Central Chuk Yuen North 6 736 15 (1) 0.2 Chuk Yuen South 6 655 96 (79) 1.4 Fung Tak 5 224 601 - 11.5 Ho Man Tin 3 972 48 (41) 1.2 Hung Hom 1 171 18 (18) 1.5 Lok Fu 2 360 6 - 0.3 Wong Tai Sin I 5 111 85 (5) 1.7 Wong Tai Sin II 3 261 22 (4) 0.7 Ma Tau Wai 2 075 72 (60) 3.5
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1941
District Estate Stock
No. of
vacant flats
% of
vacancy
Kowloon Central Mei Tung 661 9 (3) 1.4 Oi Man 6 287 87 (87) 1.4 Shatin Pass 1 278 34 (25) 2.7 Tsz Man 1 536 1 (1) 0.1 Tung Tau 8 181 100 (58) 1.2 Upper Wong Tai Sin 6 325 1 - 0.0 Valley Road 3 299 54 (54) 1.6 Wang Tau Hom 4 132 18 - 0.4
Kowloon East Choi Ha 2 330 77 - 3.3 Choi Hung 7 475 254 (233) 3.4 Choi Wan I 5 922 102 (102) 1.7 Choi Wan II 2 967 127 (120) 4.3 Fu Shan 1 580 23 (12) 1.5 Hing Tin 2 448 7 (2) 0.3 Kai Yip 4 300 85 (85) 2.0 Kwong Tin 442 156 - 35.3 Kwun Tong (LYMR) 1 248 30 (30) 2.4 Lam Tin I 7 986 206 (100) 2.6 Lam Tin III 2 316 26 (9) 1.1 Lok Wah North 2 977 6 (6) 0.2 Lok Wah South 7 008 185 (170) 2.6 Ngau Tau Kok I 5 178 211 (148) 4.1 Ngau Tau Kok II 5 410 54 (26) 1.0 Ping Shek 4 573 43 (43) 0.9 Sau Mau Ping I 5 803 163 (135) 2.8 Sau Mau Ping II 7 748 134 (125) 1.7 Sau Mau Ping III 6 295 84 (76) 1.3 Shun Lee 4 450 147 (147) 3.3 Shun On 3 001 49 (28) 1.6 Shun Tin 7 025 127 (108) 1.8 Tak Tin 5 342 1 323 - 24.8 Tsui Ping 7 873 394 (85) 5.0 Upper Ngau Tau Kok 5 932 81 (68) 1.4 Wo Lok 1 947 103 (86) 5.3 Yau Tong 5 357 152 (152) 2.8
Kowloon West Chak On 1 905 51 (14) 2.7 Cheung Sha Wan 2 736 84 (23) 3.1 Lai Kok 3 068 59 (16) 1.9 Lei Cheng Uk 4 832 22 (10) 0.5 Nam Cheong 1 897 6 (2) 0.3 Nam Shan/Tai Hang Tung 5 223 73 (57) 1.4
1942 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 No. of
% of
District Estate Stock
vacant flats
vacancy
Kowloon West Pak Tin 6 276 119 (98) 1.9 Shek Kip Mei 8 268 181 (171) 2.2 So Uk 5 314 102 (60) 1.9 Un Chau Street 4 980 22 (22) 0.4
Sha Tin Chun Shek 2 191 45 (38) 2.1 Heng On 6 076 23 (5) 0.4 Hin Keng 5 876 5 - 0.1 Kwong Yuen 4 660 209 (2) 4.5 Lek Yuen 3 210 86 (86) 2.7 Lung Heng 4 384 75 (74) 1.7 Mei Lam 4 162 29 (29) 0.7 Pok Hong 5 447 54 (50) 1.0 Sha Kok 6 425 137 (127) 2.1 Sun Chui 6 691 76 (51) 1.1 Sun Tin Wai 3 432 108 (108) 3.1 Wo Che 6 071 167 (148) 2.8 Yiu On 4 794 10 (5) 0.2
Tai Po Fu Heng 5 858 45 (6) 0.8 Fu Shin 5 498 42 (34) 0.8 Kwong Fuk 6 183 82 (76) 1.3 Tai Wo 7 173 60 (1) 0.8 Tai Yuen 4 867 108 (107) 2.2 Wan Tau Tong 1 859 684 - 36.8
Tin Shui Wai Tin Yiu 3 308 42 - 1.3
Tsuen Wan Cheung Ching 4 904 140 (139) 2.9 Cheung Fat 2 618 57 - 2.2 Cheung Hang 3 288 81 - 2.5 Cheung Hong 8 594 130 (66) 1.5 Cheung On 7 338 58 (15) 0.8 Cheung Shan 1 620 24 (24) 1.5 Fuk Loi 3 129 31 (26) 1.0 Kwai Chung 8 850 349 (326) 3.9 Kwai Fong 4 263 422 (275) 9.9 Kwai Hing 763 636 - 86.0 Kwai Shing East 5 590 - - - Kwai Shing West 5 255 141 (120) 2.7 Lai King 4 208 61 (61) 1.4 Lai Yiu 2 403 33 (16) 1.4 Lei Muk Shui 8 723 148 (86) 1.7 Shek Lei I 5 928 52 (31) 0.9 Shek Lei II 8 435 87 (46) 1.0
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1943
District Estate Stock
No. of
vacant flats
% of
vacancy
Tsuen Wan Shek Wai Kok 6 502 100 (77) 1.5 Shek Yam 4 287 18 (17) 0.4 Tak Wo Hau 6 594 223 (180) 3.4 Tsing Yi 3 230 139 (9) 4.3
Tseung Kwan O Po Lam 5 007 12 (8) 0.2 King Lam 5 235 859 (1) 16.4 Tsui Lam 4 932 26 (4) 0.5
Tuen Mun Butterfly 5 405 196 (195) 3.6 Kin Sang 2 652 2 (1) 0.1
Leung King 6 852 26 (11) 0.4 On Ting 5 049 107 (98) 2.1
Sam Shing 1 833 29 (29) 1.6 San Fat 2 131 21 (21) 1.0 Shan King 8 644 320 (320) 3.7 Tai Hing 8 595 212 (211) 2.5 Tin King 3 298 2 (2) 0.1 Wu King 4 386 66 (66) 1.5 Yau Oi 9 156 236 (236) 2.6
Yuen Long Long Ping 8 483 35 (8) 0.4 Shui Pin Wai 2 135 96 (95) 4.5 Yuen Long 3 507 78 (61) 2.2
Total 614 679(1) 15 887 (7 967) (2) 2.6 Notes
(1) Estates due for redevelopment within 36 months are not included. (2) Figures in brackets denote no. of flats under refurbishment.
Baggage check-in at the Kai Tak airport terminal
14. MR HOWARD YOUNG asked: Regarding the check-in of baggage at the Kai Tak airport terminal, will the Government inform this Council of:
(a) the reasons for prohibiting baggage not readily identifiable as personal effects from being checked in as passenger baggage; and
(b) the guidelines for determining whether certain baggage should be checked in at the cargo terminal, bearing in mind the difficulties in ascertaining whether the items are indeed personal effects?
1944 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
SECRETARY FOR ECONOMIC SERVICES: Mr Deputy President, under an order made by the Airport General Manager under the provisions of the Hong Kong Airport (Regulations) Ordinance (Cap. 292) in 1989, only passenger baggage containing personal effects may be checked in at the Passenger Terminal. Consignments readily identifiable as commercial goods, including courier consignments, must be handled through the cargo terminal. The purpose of this order was to alleviate the congestion within the Airport Passenger Terminal Building, and the overloading of the Baggage Handling System caused by the processing of commercial and other unauthorized goods and articles through check in for transportation as passenger baggage.
The need for this restriction is due to the recent growth in the number of passengers attempting to check in commercial goods as personal baggage. In one case, a passenger attempted to check in no less than 75 items.
Apart from causing delay and inconvenience to other departing passengers, commercial goods are often packed in containers which are too large to pass through X-ray screening equipment. As a result time-consuming hand searches are necessary. Unloading of consignments from trucks has also caused traffic congestion at the departure level kerbside.
According to the International Association of Air Transport, baggage means such articles, effects and other personal property of a passenger as are necessary or appropriate for wear, use, comfort or convenience in connection with his trip. This is obviously a fairly narrow definition and the ultimate decision as to whether an item presented for check-in should be accepted as baggage rests with the airline. Generally speaking passengers are given the benefit of the doubt, and only items that are readily identifiable as commercial consignments (for example large quantities of the same items, packaged and labelled for sale and so on) are likely to be referred to the cargo terminal.
Homework and tests for primary pupils
15. MR ERIC LI asked (in Chinese): Will the Government inform this Council:
(a) of the criteria used by the Education Department in determining the volume of homework and the frequencies of tests and examinations for primary school pupils;
(b) whether the Department will consider conducting regular surveys amongst the parents of these pupils to find out the average time spent daily or weekly by their children on doing homework and preparing for tests and examinations, and
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1945
(c) whether the Department will consult the parents on the appropriate volume of their children's homework; and whether it will take into account the parents' views in drawing up its regular issues of the General Schools Curriculum Circulars on "Homework in Schools"?
SECRETARY FOR EDUCATION AND MANPOWER: Mr Deputy President, the answers to Mr LI's questions are as follows:
(a) The Education Department does not itself determine the volume of homework or the frequency of tests and examinations for primary school pupils. These should be, and are, decided by the schools themselves to meet the needs of their pupils and operational requirements. However, the Department issues annual guidelines to help schools determine the type, frequency and amount of homework at all levels. Schools are advised to balance the demands of the curriculum with the pupils' abilities, their home environment and the need for play time. They are specifically asked to allow ample time for social events, extra-curricular activities and rest, which are essential to the physical, emotional and social development of young people.
(b) Given that, ultimately, it is the responsibility of schools to decide on an appropriate amount of homework, taking into account various factors and parental wishes, the Department has no plans to conduct regular surveys amongst parents to find out the average time spent by pupils doing homework or preparing for examinations. However, officers of the Education Department visit schools regularly to monitor the situation regarding homework, tests and examinations in order to ensure that there are no excesses.
(c) The Education Department maintains an extensive network of ad hoc or standing committees through which parental views on homework and other issues are solicited and taken into account. Its guidelines on homework reflect parental views on the subject. The Department recognizes that more direct parental involvement will help schools decide on the most appropriate balance between work and play in different circumstances. To this end, the Home-School Co operation Committee was established recently, following a recommendation in Education Commission Report No. 5, to promote more interaction between parents and schools.
1946 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 Option to Rent or Buy Scheme
16. MR GILBERT LEUNG asked (in Chinese): Since the Housing Authority only received about 1 300 applications for the some 1 200 Home Ownership Scheme (HOS) flats recently on offer in phase 14D under the "Option to Rent or Buy Scheme", will the Government inform this Council whether it is aware of:
(a) the total number of letters issued by the Housing Authority to invite applications from eligible candidates, and what data are available in respect of these applications (that is, the number of applicants from the waiting list for rental public housing estates in Tin Shui Wai/Tseung Kwan O/other areas and the respective family sizes of these applicants, the number of applicants from redevelopment clearance programmes and the number of applicants from the civil service);
(b) how the Housing Authority assess the response to the scheme; and
(c) any plan by the Housing Authority to modify the price of the flats to be offered in future under this Scheme, by pegging it to the replacement costs (this is, the proposed price level for the planned remarketing of flats under the "Sale of Flats to Sitting Tenants Scheme"), so as to achieve the objective of attracting prospective public housing tenants to buy their own flats?
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, the aim of the rent or buy scheme is to give those whose turn for rehousing is due the option of either renting a flat or buying an HOS flat in the same district. Flats not taken up will be offered to applicants drawn by ballot for HOS/PSPS flats on sale at the time. Prices are set at a level similar to current HOS/PSPS prices.
The scheme was launched on 2 January 1993 involving two rental blocks, one in Tin Shui Wai and the other in Tseung Kwan O, and a total of 1 216 flats. The Housing Authority issued 23 600 invitation letters: 14 700 to tenants affected by redevelopment and 8 900 to applicants due to be allocated rental flats in the two districts. Applicants awaiting flats in other districts could also have applied in response to a press release issued on 30 December 1992.
By the end of the application period on 29 January 1993, a total of 1 543 applications were received, broken down as follows:
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1947
Category
No. of
applications 2p*
Housing size
3p/4p 5p+
a) redevelopment 10 6 - 4
b) THA/squatter clearees
8143
c) civil servants 50 7 33 10
d) waiting list 1 475 316 910 249 Total: 1 543 330 947 266
* person
The response exceeded the Housing Authority's expectations. Present indications are that most of the 608 flats in Tin Shui Wai and 40 in Tseung Kwan O will be sold.
The scheme is experimental and its basis, including flats prices, will be reviewed regularly. At present there is no intention to adopt a replacement cost pricing formula.
Sexual offence involving oral sex
17. MRS PEGGY LAM asked (in Chinese): As the psychological damage done to a victim forced to perform oral sex for another person is no less than that done by rape and buggery, will the Government inform this Council whether consideration will be given to making the act of forcing another person to perform oral sex a separate offence under Part XII of the Crimes Ordinance (Cap 200) and making the offence punishable by life imprisonment, so as to deter potential offenders?
SECRETARY FOR SECURITY: Mr Deputy President, I am advised that, as with rape and buggery, the extent and severity of psychological damage done to a victim forced to perform oral sex depends on a wide range of factors, such as the violence used, and other circumstances of the case. Generally speaking, the psychological damage done to victims forced to perform oral sex is less than that experienced by victims of rape and buggery.
At present, a person who forces another person to perform oral sex, but commits no other violence, is charged with indecent assault under the Crimes Ordinance. The maximum penalty for this offence is 10 years' imprisonment. This penalty was increased from five years in 1991.
1948 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
However, an analysis of prosecutions involving this offence shows that it is often accompanied by other sexual offences, such as rape or attempted rape. In sentencing offenders who force others to perform oral sex, the court is bound to take into account all of the actions of the offender.
We do not consider that a separate offence of forcing another to perform oral sex is necessary. The existing penalty for the offence of indecent assault is adequate to tackle this type of crime. The present law has not caused difficulties in relation to the charging or sentencing of such offenders; nor is there any indication that sexual offences of this sort are increasing.
Heroin trafficking and abuse by young people
18. MR CHEUNG MAN-KWONG asked (in Chinese): In view of concerns expressed by the public about young people engaging in heroin trafficking and abuse, will the Government inform this Council of the following:
(a) the number of heroin-related cases involving young people in the past 12 months; the types of crimes involved, the prosecution figures and the sentences passed upon conviction of such cases; and what the changes are in comparison with statistics of each of the two previous years; and
(b) whether there are plans to tackle the problem of young people being involved in heroin cases; and the measures that will be taken to effectively implement these plans?
SECRETARY FOR SECURITY: My Deputy President, the statistics for prosecutions and sentencing for the past 12 months on drug offences are not yet available. Instead, I can quote from the statistics for the first nine months of 1992 and compare them with the trends in 1991 and 1990.
(a) The number of young persons aged under 21 who were prosecuted for heroin offences increased from 285 in 1990 to 332 in 1991 and to 303 in the first nine months of 1992. The proportion of these offenders prosecuted for minor drug offences, which include simple possession or smoking/consumption of the drug, has increased from 40.4% in 1990 to 61.7% in 1991 and to 79.2% in the first nine months of 1992. But these figures need to be treated with caution. The increase in the proportion of prosecutions for minor drug offences is, in part, a result of the repeal, in September 1991, of presumptions concerning possession of dangerous drugs for trafficking, in the Dangerous Drugs Ordinance. These statistics are set out in Table 1.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1949
The majority of those convicted were sentenced to a period of detention in a Drug Addiction Treatment Centre or to probation. The proportion sentenced increased from 46.6% in 1990 to 55.2% in 1991 and to 69.4% in the first nine months of 1992. This is consistent with the increase in the proportion convicted of minor drug offences over the same period.
The remainder of those convicted were sentenced to imprisonment or a fine; the level of fine and length of imprisonment were in general similar throughout the three years. These statistics are set out in Table 2.
(b) We recognize that young people are a high risk group in so far as drug problems are concerned. They are the main target of the Government's anti-drug education and publicity programmes. A major element of these programmes is the drug education school talks conducted by the Narcotics Division in all secondary schools, boys and girls homes and youth organizations. Information on the harmful effects of drug abuse is disseminated, and the legal consequences and dangers of involvement in drug offences are clearly pointed out. These talks also aim to develop correct, healthy attitudes to life, and skills to resist peer pressure to experiment with drugs. It is planned to extend these school talks to all Primary VI students in September 1993.
Apart from targetting young people in school, we aim to disseminate the anti-drug message to the community as a whole and to parents in particular. A pilot scheme to introduce drug education talks to parents has been introduced. Workshops and seminars are also arranged for student teachers and social workers. Anti-drug activities are organized jointly with District Boards and voluntary agencies. An annual "Drug Wise Camp" organized by the Police Public Relations Bureau, the Society for the Aid and Rehabilitation of Drug Abusers, and Lions Club also promotes drug awareness among Junior Police Call leaders and members, who in turn assist other youngsters.
In addition to preventive education and publicity, law enforcement is essential to deter young people from drug abuses and trafficking. The Police Force and Customs and Excise Department take vigorous action to counter drug trafficking both at the regional and district level, and have achieved positive results in apprehending and prosecuting more drug offenders. We hope that the increase in the maximum penalties for the offence of possession of dangerous drugs, introduced last June, will have a deterrent effect on young people.
1950 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
For those young people who unfortunately become victims of heroin, the Government encourages them to participate in the voluntary drug treatment programmes, like the Methadone Treatment Programme or the in-patient treatment programme operated by the Society for the Aid and Rehabilitation of Drug Abusers. Information on these services is freely and easily available from publications distributed by Narcotics Division, or by dialling the Drug Abuse Telephone Enquiries Hotline on 366 8822.
Table 1: Number of young persons (under age 21) prosecuted for heroin offences
Jan-Sep
1992 % change
Number prosecuted for
1990 1991 % change
Jan-Sep 1991
Major offences 170 (59.6) 127 (38.2) -25.3 94 (40.7) 63 (20.8) -33.0 Manufacturing - (-) 2 (0.6) N.A. 1 (0.4) 2 (0.7) +100.0 Trafficking 4 (1.4) 6 (1.8) +50.0 3 (1.3) 7 (2.3) +133.3
Possession for trafficking
166 (58.2) 119 (35.8) -28.3 90 (39.0) 54 (17.8) -40.0
Minor offences 115 (40.4) 205 (61.7) +78.3 137 (59.3) 240 (79.2) +75.2 All offences 285 (100.0) 332 (100.0) +16.5 231 (100.0) 303 (100.0) +31.2 Source: Integrated Law and Order Statistical System, Security Branch
Note: Figures in brackets represent percentage of total.
Table 2: Young persons (under age 21) convicted of heroin offences
Jan-Sep
1992 % change
Number convicted of
1990 1991 % change
Jan-Sep 1991
Major offences 66 55 -16.7 45 29 -35.6 Minor offences 159 222 +39.6 152 262 +72.4 All offence 225 277 +23.1 197 291 +47.7
Jan-Sep
1992 %
Outcome of conviction
1990 % 1991 %
Jan-Sep
1991 %
Total number
convicted of which
225 100.0 277 100.0 197 100.0 291 100.0
DATC 57 25.3 82 29.6 54 27.4 101 34.7 Probation order 48 21.3 71 25.6 46 23.4 101 34.7
Fine 34 15.1 46 16.6 37 18.8 39 13.4 below $2,000 32 (94.1) 41 (89.1) 33 (89.2) 30 (76.9) $2,000-$3,000 2 (5.9) 5 (10.9) 4 (10.8) 6 (15.4) over $3,000 - (-) - (-) - (-) 3 (7.7)
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1951
1990 % 1991 %
Jan-Sep
1991 %
Jan-Sep
1992 %
Imprisonment 36 16.0 28 10.1 23 11.7 17 58 less than 6 months 5 (13.9) 6 (21.4) 4 (17.4) 4 (23.5) 6 months –
less than 3 years 13 (36.1) 13 (46.4) 10 (43.5) 9 (52.9) 3 years –
less than 5 years 7 (19.4) 5 (17.9) 5 (21.7) 3 (17.6) 5 years and over 11 (30.6) 4 (14.3) 4 (17.4) 1 (5.9)
Others 50 22.2 50 18.1 37 18.8 33 11.3 Source: Integrated Law and Order Statistical System, Security Branch
Notes: DATC — Drug Addiction Treatment Centres operated by the Correctional Services Department.
Figures in brackets represent the percentage of the respective total number of persons convicted to fines and imprisonment.
Others — include suspended sentence, conditional discharge, caution, absolute discharge, etc.
Policy proposals made in motion debates
19. MR HENRY TANG asked: Given that this Council, comprising 18 Members returned by geographical constituencies through direct elections and 21 Members returned by functional constituencies, is broadly representative of the people in Hong Kong, will the Government inform this Council whether it will respect the views of the public and accept policy proposals which are made and supported in motion debates by a clear majority of this Council; and when the Government considers such proposals not to be in the public interest will it so advise, with reasons?
CHIEF SECRETARY: Mr Deputy President, the Government has always attached great importance to the views of Members of the Legislative Council expressed in debates of the Council. Their views on government policies are taken into consideration in the formulation or development of such policies. Where it is not possible, for policy or resource reasons, to agree to proposals supported by Members in debates, the Government will state clearly the reasons.
Density criteria as to overcrowding in public housing units
20. DR CONRAD LAM asked (in Chinese): Will the Government inform this Council of the density criteria used by the Housing Authority to define overcrowded families in the public housing estates for the purpose of allocating additional accommodation or effecting transfer; if the criteria are not the same as the minimum space allocation standard for new public housing tenants, what is the reason for the difference and will consideration be given to bringing parity?
1952 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Mr Deputy President, the current criterion for the relief of overcrowding is the same as the Housing Authority's minimum allocation standard for new tenants, that is, 5.5m2 per person. Public housing tenants living in units providing less than 5.5m2 per person may apply to transfer to larger units. A tighter criterion of 4.5m2 per person is used for tenants wishing to transfer to new flats in the urban and sub-urban areas however. This is because the supply of new flats in these areas is tight due to redevelopment and clearance commitments.
First Reading of Bill
COMPANIES (AMENDMENT) (NO. 2) BILL 1993
Bill read the First time and ordered to be set down for Second Reading pursuant to Standing Order 41(3).
Second Reading of Bill
COMPANIES (AMENDMENT) (NO. 2) BILL 1993
THE SECRETARY FOR MONETARY AFFAIRS moved the Second Reading of: "A Bill to amend the Companies Ordinance."
He said: Mr Deputy President, I move that the Companies (Amendment) (No. 2) Bill 1993 be read a Second time.
This Bill is a composite Bill which addresses several different issues. The principal provisions aim to ensure a more even flow of submissions of annual returns for filing in the Companies Registry; to introduce a degree of flexibility for companies limited by guarantee; to provide for a comprehensive index of the directorships held by directors of listed companies; and to strengthen the special procedures for the voluntary winding-up of companies. The opportunity is also taken to update certain other provisions of the Companies Ordinance.
Under section 109(1) of the Companies Ordinance, a company is required to file a copy of its annual return with the Registrar of Companies within 42 days of its annual general meeting. Since most companies hold their AGMs around the end of the calendar year, compliance with this section usually leads to a sudden and heavy influx of annual returns during January and February. This results in increased queuing times and general inconvenience for the public, and imposes unnecessarily onerous duties on the Companies Registry at this time of year. We propose therefore to rationalize the timetable for filing of annual returns by private companies, which make up the majority of companies registered in the Companies Registry. Under the provisions of the Bill, they will be required to file their annual returns within 28 days of the anniversary of
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1953
the date of their incorporation. These anniversaries are, in general, more evenly spread throughout the year.
At present, by virtue of section 114C of the Ordinance, any member of a company is entitled to appoint another person, whether a member or not, as his proxy. The proxy will have the right to attend, speak and vote at the meeting. Whereas under section 157A of the Ordinance, at a general meeting of a company, other than a private company, a motion for the appointment of two or more directors by a single resolution is prohibited. These two sections of the Ordinance have caused some concern for companies limited by guarantee especially those companies which are private clubs; they find it unpalatable that non members are allowed to vote at meetings, as proxies, but members have at all times to vote individually in person on committee memberships. We propose therefore to relax these requirements in relation to companies limited by guarantee. However, these companies will be able to continue to apply such requirements if they so wish under the terms of their memoranda and articles of association.
The said area of concern is in section 158C of the Ordinance which requires the Registrar of Companies to keep and maintain a comprehensive index of all company directors for public inspection from a date to be appointed. This provision has not yet been brought into effect due to resource problems. We now propose that, as an interim measure, a comprehensive index be created to cover the particulars of all the directorships held by directors of listed companies. This information will therefore need to be kept on the register of directors and secretaries that companies are required to keep under section 158. The bill provides for this. The index will initially be open for searches by certain regulatory agencies. But it may be made accessible to the public in due course if resources permit.
The Bill also introduces further safeguards in relation to the conduct of voluntary windings-up under special procedures provided for in section 228A of the Ordinance. The changes include specifying who may qualify for appointment as provisional liquidator, limiting the powers of the appointee and strengthening certain notification requirements in order to enhance the protection of creditors.
The opportunity has also been taken in the Bill to update one or two outdated fees and penalties, including the fee for obtaining a copy of the register of members from a company and the penalty for a director or secretary failing to give a company the information about himself or herself required under section 158.
The present proposals have been recommended by the Standing Committee on Company Law Reform after consultation with the relevant professional bodies.
Bill referred to the House Committee pursuant to Standing Order 42(3A).
1954 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 FORESTS AND COUNTRYSIDE (AMENDMENT) BILL 1992
Resumption of debate on Second Reading which was moved on 4 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).
Committee stage of Bill
Council went into Committee.
FORESTS AND COUNTRYSIDE (AMENDMENT) BILL 1992
Clauses 1 to 15 were agreed to.
Council then resumed.
Third Reading of Bill
THE ATTORNEY GENERAL reported that the
FORESTS AND COUNTRYSIDE (AMENDMENT) BILL 1992
had passed through Committee without amendment. He moved the Third Reading of the Bill.
Question on the Third Reading of the Bill proposed, put and agreed to. Bill read the Third time and passed.
Members' motions
DEPUTY PRESIDENT: I have accepted the recommendations of the House Committee as to time limits on speeches and Members were informed by circular yesterday. The mover of the motion will have 15 minutes for his speech including his reply and other Members will have seven minutes. Under Standing Order 27A, I am required to direct any Member speaking in excess of the specified time to discontinue his speech.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1955 FAIR TRADE POLICY
MR FRED LI moved the following motion:
"That this Council urges the Government to formulate a fair trade policy promptly and to introduce legislation to establish a fair trading commission for the implementation of the policy, so as to rectify any phenomenon of unreasonable market dominance, safeguard fair competition and protect the consumers' interests."
MR FRED LI (in Cantonese): Mr Deputy President, I move the motion standing in my name on the Order Paper, which reads, "That this Council urges the Government to formulate a fair trade policy promptly and to introduce legislation to establish a fair trading commission for the implementation of the policy, so as to rectify any phenomenon of unreasonable market dominance, safeguard fair competition and protect consumers' interests."
What I mean by a fair trade policy is referred to in overseas countries either as anti trust policy or a competitive policy. The reason why I prefer to call it a fair trade policy is that it has a more positive connotation and better reflects the goal which my motion is designed to achieve.
The formulation of a fair trade policy is aimed at the maintenance, by means of legislative and other measures, of a fair and healthy environment which is conducive to competition so that the consumer may be protected and be able to enjoy the benefits of competition.
A fair trade policy is formulated to combat the attempt, for all sorts of reasons, by business concerns to take advantage of their monopoly of the market, their vast capital, and their control of not only the means of production but also the product distribution network at the same time for the furtherance of unfair ends. These business concerns may actually set up market barriers making it impossible for their competitors to survive whilst scaring off any would-be competitor who may wish to enter the market. They may seek to distort the market mechanism and raise prices artificially. They may restrict production and dictate unfair retailing terms. All of these practices are detrimental to the interests of the consumer.
There is a general feeling of unease with regard to a fair trade policy. That feeling is particularly prevalent in the business community. The reason for this is that they tend to associate a fair trade policy with negative government intervention in the context of a market economy. They fear that it will deal a blow to the spirit of free enterprise, and big business as a whole, and will effectively prevent the growth of private enterprise.
Contrary to popular misconception, the whole idea of having a fair trade policy is in order to protect our market economy. In the present state of development of capitalism, even people who have the greatest faith in market
1956 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
economy would also have to admit that there is no way a market economy can function properly at all times. The fact is that it often happens that the market is distorted and it is for a fair trade policy to rectify such distortions, when they occur, so that the positive forces of the market may be able to function properly.
However, advocates of fair trade policy are no less concerned than the faithful followers of market economy about the importance of healthy market competition as a means to promote productivity, product innovation and quality generally so that investors as well as consumers will be able to more equitably share the fruits of economic success.
Meanwhile, we fully understand also that heavy investment is needed in certain trades. It may take a long time to turn a profit. Efficient operation may only be achieved if economy of scale is achieved. The general practice is for a fair trade policy to treat these trades as exceptional and actually allow a degree of market monopoly to occur. Instead, other means of control is usually adopted. For example, insofar as public utilities are concerned, which is incidentally the subject of another motion debate scheduled later on, either profit control or price control may be used as a means to protect the rights and interests of consumers.
Fair trade policy has a long history in Europe and America. In recent years, Asian countries such as South Korea and Taiwan have also introduced fair trade policies and legislation.
Some people may ask why we need a fair trade policy after all. Has Hong Kong been faced with the problem of unfair trade practice?
I would like to stress at this point that while I am advocating the adoption of a fair trade policy it does not mean that I am doing so on the assumption that we are faced with an acute problem of unfair trade practice or indeed any real crisis. The reason is that a fair trade policy has the advantage of providing a channel through which unfair competition can be rectified, and more importantly, it lays down the guidelines regarding which kinds of trade practice are acceptable and which ones are not so that investors will be able to use them for reference.
In Hong Kong it is very difficult for us to obtain data regarding trade practice of individual business organizations. There is no way we can accuse, certain in the belief that we have the required evidence, a given trade, or any organization at all, of engaging in unfair competition; there is no way we can make any assessment of the harm which unfair competition brings. However, I can refer to certain phenomena which are happening around us in Hong Kong. These phenomena would call for investigation if they should occur in countries which have adopted fair trade policies.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1957
1. The first phenomenon is one of market monopoly. It is estimated that the two large supermarket chains in Hong Kong take up between them about 70% of the gross supermarket business. Similarly, the four largest banks in Hong Kong have between them cornered over half of the local currency deposits market. The gas supply and the container terminal business are effectively controlled by a cartel of companies. These are the facts of life in Hong Kong. In the absence of any fair trade policy, these companies are quite free to engage in activities which are contrary to the spirit of competition and detrimental to the interests of consumers if they so wish, and I would like to stress the word "if" here. But if that should happen, there is no way their victims can seek effective redress.
Indeed, the two supermarket chains have resorted to making wholesalers and vendors pay them exorbitant display charges. They in turn charge the shoppers higher prices for certain categories of merchandise than smaller provision stores. Hong Kong banks have a larger differential between deposit interest rate and the lending interest rate than banks overseas. Retail price of petrol is quite uniform, irrespective of supplier. The charges of container terminals are way too high. All of these have been subjects of public complaint.
2. The second problem relates to collaborative price fixing. Obvious examples of this include the practice of members of the Association of Banks to enforce a fixed interest rate for the whole industry and the "proposals" made by the Hong Kong Accidents Insurers Association to its members; these "proposals" are actually used as a basis for price fixing for most companies in the insurance industry.
3. The third problem relates to control of resale price. For example, the petrol companies resort to obliging the petrol refill stations and petrol retailers to sell petrol products at the same price level. This results in different retailers actually selling the petrol products at almost the same price level. In overseas countries, the wholesaling and retailing of petroleum are managed by different companies and the result is that there is a price differential resulting from competition between different retailers.
4. There is also the phenomenon of the carving up of the market. For example, the Cathay Pacific is able to monopolize the Hong Kong aviation industry through its acquisition of Dragonair. The two companies carved up the market between themselves. For example, Dragonair will concentrate on the China market instead of competing with Cathay Pacific.
1958 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
5. There is the problem of misleading information on merchandise. Information provided for certain kinds of merchandise is misleading and incomplete to the extent that the consumer is not given the full picture. Whereas the Consumer Council has made a point of exposing such cases following its investigative studies, it is not in a position to bring offenders to justice because there is no legislation whereon to base a charge.
The examples which I have quoted represent only the tip of the iceberg. A fair trade policy will be able to rectify unreasonable market dominance. There are three ways in which the problems may be solved. We need a policy which will address the behavioral, structural and performance aspects of unfair trade practice.
1. A fair trade policy will address the behavioral aspect of the problem in the following manner. It will regulate and penalize any trader who behaves unfairly in their trading practice such as engaging in collaborative price fixing, restricting production, carving up the market, erecting market barriers, restricting resale price, and controlling distribution network. Generally speaking, the enforcement department will, in applying this policy to individual cases, regard as a very important factor of consideration whether or not the behaviour in question is reasonable in the light of circumstances.
2. The structural aspect may be addressed in the following manner. A fair trade policy will be targeted at corporate takeover, merger and other forms of integration in order to forestall the scenario of the market becoming too centralized to the detriment of competition. Not a few countries have used market share as a preliminary basis of assessment. Other factors are also taken into consideration, such as the availability of and demand for a possible substitute for the goods in question, the geographical market factor as well as the time factor. It is not until all these factors have been taken into account that a decision will be taken with regard to whether or not permission should be granted to the various forms of integration, or for that matter, whether or not to order a monopoly to de monopolize.
3. The performance aspect may be tackled in the following manner. The Government may directly intervene in terms of rectifying the production volume and pricing of the business concern which engages in dominating the market, in order to safeguard the interests of the consumer. Such intervention is not commonly practised in many countries; it is not commonly practised even in western countries. The reason why I mention this is merely in order to show that it is one of the many things we can do within the scope of a fair trade policy. But essentially speaking, it is not
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1959
commonly practised, and if it is used at all, it is mainly for dealing with monopolies which have a bearing on people's livelihood.
Mr Jimmy McGREGOR has proposed an amendment to my motion. His amendment motion is based on the assumption that a fair trade policy already exists and the Government is only required to make improvement to the situation. I believe that this is a far cry from reality and his amendment motion is not in keeping with the principle of my original motion.
Does Hong Kong have a fair trade policy? Even the Government's answer to this question is no. The Governor said in his policy address to this Council in October last year that there was a need for Hong Kong to formulate a comprehensive competition policy. And the whole purpose of the recent government decision to allocate $800,000 to the Consumer Council for commissioning a study of a number of trades in Hong Kong is to collect data which will help in the formulation of such a policy. It is hard to see in the light of this that we do in fact have a fair trade policy; is it not so, Mr Jimmy McGREGOR?
The Governor has also mentioned that the formulation of a competition policy will be left to the Business Council. I would like to stress at this point that the competitive policy should not be a matter exclusively for the Business Council to address; rather, it should be a matter for wide public consultation. In any case, given the fact that most members of the Business Council are themselves owners of large corporations, a competitive policy which they put together will have a problem of public credibility.
It goes without saying that we are not suggesting that the Government is not doing its part in terms of enforcing fair trade practice at all. For example, the Government has earlier on, in the granting of the franchise for Container Terminal No. 9, seen fit to introduce an element of competition. Two berthing spaces have been allocated to a new consortium. Meanwhile, the Government is planning to deregulate the telecommunications industry by giving permission to the setting up of a second network. Insofar as the broadcasting industry is concerned, the Government has decided to introduce cable television to increase the element of competition.
However, these are separate and unco-ordinated moves which are hardly enough to solve the problem. In the absence of a comprehensive competitive policy which has full legislative backing, it is all too easy for one to be sceptical about the fairness of these separate measures and the chance of successful implementation of any such policies regarding individual cases.
The Government does not have yet either a policy branch or a department which is responsible for either co-ordinating the effort to formulate a competitive policy or enforcing any such policy. As a result, the Economic Services Branch has decided to allow a new player to join in the franchised operation of Container Terminal No. 9 while the Banking Commission has used
1960 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 its own set of criteria to come to its decision about the agreement to maintain interest rates.
Given the complexity of the issues involved in the implementation of a fair trade policy, given the extent of knowledge required in respect of business operation and law, given the need for experience to be accumulated in terms of dealing with individual cases, given also the need for the enforcement department to have the power of investigation, I would consider that we shall need an enforcement department and a mechanism in place when a fair trade policy is to be implemented. We would do well to refer to the ways in which the policy has been implemented in overseas countries. We may consider the setting up of different kinds of mechanism, for example, the setting up of a fair trading commission in some countries, to effectively implement the fair trade policy. Later on, Dr LEONG Che hung of Meeting Point will elaborate on the advisability of government intervention in the market; and Mr WONG Wai-yin, also of Meeting Point, will provide us with some examples of how people's livelihood has been affected adversely in the absence of a fair trade policy.
Mr Deputy President, with these remarks, I move the motion.
Question on Mr Fred LI's motion proposed.
DEPUTY PRESIDENT: Mr Jimmy McGREGOR has given notice to move an amendment to the motion. His amendment has been printed in the Order Paper and circulated to Members. I propose to call on him to speak and to move his amendment now so that Members may debate the motion and the amendment together.
MR JIMMY McGREGOR moved the following amendment to Mr Fred LI's motion:
"To delete all the words after "That this Council urges the Government to" and insert the following:
"improve its present fair trade policy, to encourage and support the application of this policy through existing institutions and to take such action as may be necessary to prevent unreasonable market dominance, to safeguard the principle of fair competition and to protect consumers' interest."."
MR JIMMY McGREGOR: Mr Deputy President, I moved that Mr Fred LI's motion be amended as set out in the Order Paper. I have amended this motion because I think that the Council should have an alternative to the proposal by Mr Fred LI which I regard as potentially damaging to the economy. I do not think it is enough that Mr LI's proposal should be voted down but that an alternative positive and helpful replacement should be passed by the Council to
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1961
provide a strong message that we support free and fair trade without unnecessary government regulation of our economy.
The underlying concern expressed by Mr LI that Hong Kong should always follow a fair trade policy is of course both legitimate and supportable. His feeling that we may have come to a situation which requires a comprehensive review of fair trade practices, and presumably malpractices, with the intention that some sort of formal body should be set up to ensure that fair trade is practised in Hong Kong is, to my mind, both unnecessary and unwise. The suggestion raises the spectre of bureaucratic interference and intervention in the marketplace to a degree which could substantially alter the way business is done in Hong Kong now and in the future.
I have personally been associated widely with trade and industrial development in Hong Kong for many, many years and have had deep personal experience of the thousand and one problems faced by business and industry in their struggle for an economic place in the sun, both here and overseas. Our business people have had to make their way in a totally unprotected market environment with no government subsidies of any kind and with the sure and certain knowledge that, if they failed to be, or to remain, competitive in this and other markets, they would pass into corporate history. Their demise would hardly be noticed and more competitive businesses would take their places. This is a devil take the hindmost economy.
It is also one of the most efficient, open and fair trading economies in the world. The free trade philosophy and policies followed by the Government throughout its existence have ensured that only the fit, capable, and competitive survive. The Government has never changed this basic philosophy although it has recognized that from time to time the market does not always function perfectly. With that recognition the Government has instituted a fabric of checks and balances designed to ensure that the private citizen is properly and reasonably protected and that the economy is allowed to move positively, openly and efficiently in response to personal and corporate initiative. These checks and balances include the means by which companies which benefit from government franchises and monopolies are kept efficient and accountable in the public interest. I believe these arrangements by and large work well and that the Hong Kong economy and society benefit greatly from the light bureaucratic touch. I will speak in a later motion today on this specific subject.
I repeat that Hong Kong is probably the most open, competitive and fair trading territory in the world. Our unparalleled economic growth, strength, and potential and the very large international contribution to our business sector are ample testimony to fair trade. Our retail industry has a remarkably high element of foreign participation. So does our trading community and our real estate industry. Yet locally developed companies are also notable for their size, success and status. This is the most international marketplace in the world and the reason, at least in part, is that our marketplace is free and fair to all comers.
1962 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
I will go further. The reason that China has been prepared to introduce the "one country, two systems" policy is that this particular system is hugely economically successful and supportive of China. That success, I believe, is largely due to the free and fair market that operates here. As far as we possibly can, we should leave the market alone and with the least possible bureaucratic regulation and supervision, not to mention control.
I mentioned the policy of the Government towards franchises and monopolies and also the need to protect consumers against corporate and individual fraud and misrepresentation. Many organizations exist to ensure free and fair trade. The Banking Commission, the Securities and Futures Commission, the Insurance Commission, the Trade Advisory Board, the Free Trade Committee, the Industrial Development Board, many Chambers of Commerce and industrial associations, quite apart from this Council, are dedicated to free and fair trade. They have been very successful in their work.
We have built up the 10th largest external trading record in the world. We have the highest per capita income in all of Asia after Japan. We finance large elements of productive investments in almost all Asian countries. Our contribution to China cannot be measured. We did none of these remarkable things through government regulation. We did them through free and fair trade. The Consumer Council was set up to protect consumers against unfair trading practices and it has done a good job over the years. It has often been suggested that the Council should be given greater investigatory authority and perhaps legal powers to prosecute serious offenders. I would support such improvements in the authority of the Consumer Council but not to the extent that the Council could become yet another bureaucratic institution dedicated to investigation and intervention.
A paper issued yesterday by the Consumer Council suggested that there could be a real danger of this happening if the Government and the Legislative Council agree with the general statement made in the Consumer Council paper.
The concern of some Councillors with fair trade would seem to result from worries about government licensed monopolies, duopolies, and service operations. I have taken part in many debates and discussions in this Council on the alleged failures of the government schemes of control and other systems designed to ensure that the public interest is fully served. From these discussions and from examination of the operational records and the services provided by these companies, I still have a strong impression of general competence and a high quality of public service at reasonable cost. Our public services are efficient and cost effective given the huge strains upon them. Where they cannot operate in free market environment they are subject to government and public scrutiny, also to the sometimes withering criticism of this Council.
We hear complaints about privileged pricing by government sponsored organizations such as the Trade Development Council and Radio Television Hong Kong. These organizations are said to compete unfairly with the private
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1963
sector for advertising revenue. Such complaints can and should be dealt with by existing systems of monitoring and correction and by public disclosure.
Where market dominance is achieved through fair trading practices, as is clearly the case in Hong Kong, I think the companies concerned deserve their success. If they stay competitive they will keep their share of the market. But their competitors will not let them rest and they will face continual competitive pressures. The consumers and the economy benefit from the open and fair market that operates in Hong Kong.
Finally, I would ask Councillors and the Hong Kong public to compare our trade practices and prices with those of other countries. Many countries need fair trade institutions because their trade is not free nor fair. They are beset with import and export controls, duties, punitive taxes, restrictive trade union practices and many other impediments to trade. They need fair trade reviews and tribunals. We do not.
I ask Councillors to support my amended motion.
Question on Mr Jimmy McGREGOR's amendment proposed.
MR MARTIN LEE (in Cantonese): Mr Deputy President, the maintenance of the existing life style is the wish of every Hong Kong belonger as well as a very essential part of the concept of allowing two systems to coexist within one country. A very important feature of Hong Kong society is the operation of a free market economy. According to the rules of a free market economy, theoretically speaking, the investor is quite free to engage in production and transaction on the basis of his or her own assessment of market demand and supply. The role of the Government is limited to the maintenance of a set of rules governing fair play and the maintenance of a fair environment which is conducive to investment. The Government should play a strictly neutral role in the formulation of its economic policy.
In the run-up to 1997, the investment of Chinese corporations in Hong Kong has become a matter of increasing public concern. Recently, a corporation which goes by the name of New China Hong Kong (Hong Kong) Limited has been in process of being set up as a new joint venture between Chinese and Hong Kong business groups. If we look at the list of shareholders which was disclosed by the corporation yesterday, we will find that all of our top league businessmen in town are shareholders holding between them a 55% stake in the corporation. Of the remaining 45% stake, with the exception of a small percentage which is held by Singaporean institutions, 32.5% is held by 13 enterprises in China. These Chinese enterprises include one company subsidiary to the Hong Kong and Macau Affairs Office of the State Council of China, and three institutions subsidiary to the Chinese Ministry of Transport. This newly formed group which represents Chinese and Hong Kong interests will use Hong Kong as an operational base. With a startup capital of
1964 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
$400 million, it will engage in trading and investment. Its investment portfolioes will include real estate, manufacturing, infrastructure and communications in Hong Kong as well as in other countries.
This kind of involvement by the Chinese Government through the setting up of private companies in the economic activities of Hong Kong has been totally unprecedented. One is prone to ask in the light of this development whether a new breed of pro-China privileged class will be created as a result of such involvement of Chinese official interests. More importantly, one is also wary of the implication this development will have on the economic rules by which Hong Kong society has consistently abided. One wonders what will happen to the promise of "one country, two systems", whether it will materialize or degenerate instead into the eventuality of "one country, one system".
It is quite true that the economic achievement of China over the past 10 years or so is worth commending. However, there are fundamental differences in the ways in which economic activities are conducted. In Mainland China, it is very commonplace for a state agency to engage in economic activities. The principle which says that each department has to achieve self-sufficiency means that it is even possible for the People's Liberation Army to run hotels and other entertainment establishments in the new economic zones. Nobody in China has ever raised the issue of possible conflict of interests which such practice may entail. However, in the context of Hong Kong, such a scenario is never allowed to happen. One can hardly imagine the Royal Hong Kong Police Force engaging in the nightclub business. Neither is it possible that the economic departments of the Hong Kong Government will actually set up companies and engage in investment activities.
Let me go on with another example. In Hong Kong we get our jobs on the merit of our academic achievement and talent. But in Mainland China, jobs are often available to those who have the connections, who know how to use those connections, and one has to be rightly connected in order to be an achiever.
The reason why I have given these two examples is that I wish to make it abundantly clear that there are many fundamental differences in terms of economic operation and social culture between China and Hong Kong. If we are really serious about the implementation of the concept of "one country, two systems", it is up to us to protect the economic system which has led to the success of Hong Kong. We should never seek to transplant the commercial practice of China to Hong Kong. To do so will only baffle local and overseas investors and make them lose confidence in Hong Kong.
I would like to examine closely the case involving the New China Hong Kong Group. It is very easy indeed for an investment group with representation of official Chinese institutions to make money in Hong Kong. It may not be true that the company is able to call the shots all of the time.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1965
However, given the fact that it has access to more inside information than any other company, it is certainly not fair to the other investors who do not have the same advantage. The fact is that at this point in time the view has been expressed by many businessmen, and the media for that matter, that although there is certainly nothing wrong with the company in question from the legal point of view, one should be justifiably concerned about the advantage which it enjoys, not through its efficiency, but rather through its political clout, as it were. Let us look at the following scenario. Let us suppose the company which is connected to the Hong Kong and Macau Affairs Office sells heavily on the Hong Kong index futures market. But instead of the market experiencing a sharp fall, it is actually rising. Will they, in order to achieve the result of a sharp fall, resort to making statements which are detrimental to the economy of Hong Kong? If that is what they want to do, it is plain from experience that they can easily get what they want. Did we not see that, earlier on, the stock market shedded more than 400 points in one day following the statement by the Hong Kong and Macau Affairs Office that all contracts which did not have the endorsement of the Chinese Government would not be recognized as valid after 1997? It is true that, according to information released by the New China Hong Kong Group yesterday, the 10-plus Chinese shareholders are involved in the capacity as corporate investors. It would appear that they would be free from the allegation of conflict of interests. But I hope that the whole community will continue to keep a close eye on the activities of this company, particularly how it is going to deal with cases where there might be a conflict of interests.
Mr Deputy President, Hong Kong needs to continue to maintain and promote an investment environment which is conducive to fair competition. We shall not condone the infiltration into Hong Kong of the trade practice of China. For otherwise this will lead to the creation of a privileged class and the undermining of the interests of investors and the confidence of overseas investors in terms of investing in Hong Kong. This will be most detrimental to the economy of Hong Kong in the long term.
Mr Deputy President, Members from the United Democrats will in a moment speak on a variety of issues pertinent to today's debate. Dr HUANG Chen-ya will speak generally on trade practice legislation; Mr James TO will discuss merger and restrictive trade practice; Mr Albert CHAN will discuss monopoly over Container Terminal No. 9. Mr LEE Wing-tat will request the Government to investigate whether there is monopoly of the real estate market; and last but not least, Mr MAN Sai-cheong will speak on cartels.
I so make my submission. The United Democrats support Mr Fred LI's original motion and oppose Mr Jimmy McGREGOR's amendment
MR NGAI SHIU-KIT (in Cantonese): Mr Deputy President, one would quite naturally think of freedom and fairness when one talks about standards in trade practice. Free trade is what Hong Kong has always practised. It has become a
1966 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
very important and integral part of the market economy of Hong Kong. But fair trade relates to the relationship or bargaining position of one party, the vendor, vis-a-vis the other party, the purchaser. Whether the trade or deal is fair or not is a matter which can be quite controversial and one on which no definitive conclusion can be reached.
It is up to any administration which is entrusted with governing Hong Kong to do its utmost to ensure that social equity is defended. But it should also be most cautious in doing so lest it be accused of being too interventionist and overplaying its role. The result of excessive intervention is the creation of unnecessary barriers to social and economic development.
Mr Deputy President, whereas the United States Congress has come up with a lot of complicated regulatory legislation to ensure that transactions can be carried on in a fair manner, studies conducted by the noted economists of American society have pointed to the inevitable conclusion of "what can regulators regulate?" Generally speaking, their studies point to the observation that, other than protecting the interests of the trades and institutions which have become government regulated, and other than expanding the bureaucratic establishment responsible for regulation, there is little real benefit which the consumer can get out of this. The question therefore is whether we are quite prepared to repeat the same American experience.
A fair trading commission proposed in the original motion will be one which is likely to give rise to numerous controversies. We can foresee the proposed commission developing into a vetting authority in disguise. The reason is that it will become necessary for each and every transaction to meet the requirements of a legally defined concept of fair trade practice and the commission will become the first testing point of fair trade practice per se. Given the great number and variety of transactions which are taking place in Hong Kong, it is going to be difficult enough just to achieve a good grasp of all relevant information. It is perfectly justifiable therefore to question how such a commission is able to function effectively. It is also likely that the commission might even develop into some sort of arbitration authority. Given that in every transaction there are bound to be more than one potential buyer and seller, one result of this is that the party who is unable to complete the deal will feel that he or she has been victimized by unfair trade practice. When the case is brought before the commission, it will set the precedent of an endless succession of disputes going to that commission, disputes in which only personal interests are at stake and which have little to do with fair trade. Such disputes will inevitably cause confusion and jeopardize transactions which are both legitimate and free. If this is allowed to continue, the moral climate of our society will also suffer.
Mr Deputy President, most consumers will tend to judge the fairness of a transaction by the price level. If the proposed commission is set up to enforce fair trade according to this perception of consumers, then it is likely that it will, instead of remaining a fair trading commission, degenerate into a price control commission. Truly fair and free trading practices may no longer be determined
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1967
by the free market mechanism but may become a misused tool in the hands of bureaucrats to control the market. In this regard, I would oppose any effort made to introduce legislation for the setting up of such a commission. I think that such a commission is both unfair and gets in the way of free transactions. It would not be beneficial to the economy of Hong Kong.
As a matter of fact, Hong Kong society already has legislation which will ascertain the legitimacy of transactions. I would consider any effort to arbitrarily increase the level of government intervention to be superfluous and totally uncalled for, particularly bearing in mind the principle of free trade and what we have been able to achieve by adhering to it. Given that free trade has effectively made the most flexible use of the limited room for manoeuvre as far as trade is concerned, it is not necessary to formulate another set of so called "fair principles", on which it is unlikely to obtain public consensus. To do so would only hinder free trade and run counter to the trade policy of the Hong Kong Government, a policy which has been consistently pursued and which has brought great benefits to the society and economy of Hong Kong. It would be tantamount to casting a vote of no confidence in Hong Kong's market mechanism for self adjustment.
I am sure that over the next four years, in the latter half of the transition period, we will be faced with totally unpredictable variables in our economic, political and social arenas. In this regard, the last thing we would want is the drafting of a fair trade Bill which is not only controversial but also difficult to implement effectively; neither would we want to see the setting up of an equally controversial fair trading commission.
I support the amendment motion of Mr Jimmy McGREGOR. The reason is that it provides, in keeping with the present arrangements, suitable room for manoeuvre on the one hand, and also defends the spirit of fair competition and the interests of consumers, on the other.
Mr Deputy President, with these remarks, I support the amendment motion of Mr Jimmy McGREGOR. But since I have still one minute left, I would like to respond to the issue of "one country, two systems" which has been raised by Mr Martin LEE just now. He expressed the fear that involvement of Chinese capital in the local investment scene would in some way stifle or jeopardize Hong Kong business or the practice of fair trade. I would like to inform Mr LEE that he is completely mistaken on the point of "one country, two systems." The concept of "one country, two systems" means that Hong Kong will continue to enjoy its own system. We have our own laws and our own conditions, and our own trade environment; I do not believe that the involvement of state capital will..... (I am responding to your point .....)
1968 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 At this point Mr Martin LEE indicated a wish to intervene
DEPUTY PRESIDENT: It is up to you, Mr NGAI. Do you want to give way or do you not want to give way? It is up to you.
MR NGAI SHIU-KIT: Mr Deputy President, I want to finish first and then if Mr LEE wants to clarify, he may go ahead.
DEPUTY PRESIDENT: Mr LEE, are you content to raise your point after Mr NGAI has finished?
MR MARTIN LEE: As you please, Mr Deputy President.
DEPUTY PRESIDENT: Mr NGAI, please continue.
MR NGAI SHIU-KIT (in Cantonese): I was trying to say that the involvement of state capital in commercial activities is no big deal at all. For example, the Singapore Government is equally involved in corporate or trade activities. I believe that other countries may also have state capital similarly committed. It is just another form of trade or transaction. I believe that neither the principle of free competition nor free enterprise, which we all abide by, is in any way compromised. I have no malice towards anybody. I only want to say that his view differs from mine.
DEPUTY PRESIDENT: Elucidation, Mr LEE?
MR MARTIN LEE: Mr Deputy President, when I sought to intervene I thought Mr NGAI had misunderstood me. But he then clarified the matter. So I do not intend to ask for elucidation. I do not agree with him, but that is a separate point.
MR MARTIN BARROW: Mr Deputy President, while I understand the sincerity of the Honourable Fred LI's argument in favour of free trade, I believe the result of setting up a Free Trade Commission would be the arrival of a massive bureaucracy and red tape which would stifle the very enterprise that has created Hong Kong and brought so much benefit to our people. A complex regulatory environment can only discourage investment, retard economic growth and deprive us of funds for improving social services. Minimum interference has served Hong Kong well and must continue to do so. Once we start down a
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1969
slippery slope towards a complex regulatory environment, where do we stop? Surely what Hong Kong needs is simple and straightforward laws which are applied fairly, quickly and effectively — clearly we all support action against real abuse and fraud.
Let me turn to the specifics of the competitive environment. It is wrong to say Hong Kong has no fair trade policy. The Hong Kong Government has reiterated a number of times that a level playing field must and does exist in Hong Kong. To imply that Hong Kong is full of anti-competition abuses is to disregard the reality of what has been achieved in the standard of services being provided and what has been built up over many generations. Have prices in all these sectors moved up more than inflation? I think not in many cases. Look at our power companies as an example.
How would the proposed Fair Trade Commission work in practice? It seems to me it would be another layer of government that would start involving itself in all manner of issues. For example, look at franchise awards. These are already subject to the most detailed scrutiny by the policy branch concerned and by the Executive Council. Nothing would do more to scare off local and overseas investors if they thought Hong Kong is going to be subjected to the bureaucratic steeplechases and delays which exist in some other economies.
We must avoid advocating the application of an old and flawed solution to what is a new business world.
It must not be thought that our economy is a separate, self-sufficient entity not open to world competition. Hong Kong must be placed in a regional and world context.
What most promotes local competition and protects local consumers is Hong Kong's openness to the world market. There is nothing to stop new entrants in most markets except perhaps their own measurement of risk and return.
Do we really think that banking and financial services is not competitive in Hong Kong? While it is true one entity has a high market share, it has plenty of competition in both retail and wholesale banking. The so-called interest rate "cartel", it is worth remembering, was brought in to protect smaller banks and their depositors from interest rate competition, not to protect the bigger banks.
What keeps the local market fair and competitive is not rules and regulations (except under schemes of control) but the lack of them. Hong Kong's businesses are not just territory-wide businesses, they are competitive regionally and internationally. This means that Hong Kong gains from the competitive restraints of a far wider market than Hong Kong itself.
1970 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
It is by not putting the argument in a world or regional context of competition that advocates of a complex bureaucratic control are living in the past.
Introducing the policies proposed is the opposite of fair, competitive trade. It is asking the Government — that is ultimately politicians and bureaucrats — to step in and determine what is fair when it can really be left to the market — in Hong Kong's case the competitive international market.
In conclusion, as a member of the business community, I am happy to declare an interest. As I said at the beginning, I do not agree with Mr LI's proposal to set up a Fair Trade Commission but support Mr McGREGOR's amended motion that the Government should strengthen the Consumer Council and other such institutions. I would hope that any reviews that they carry out will include those professions which maintain a closed shop as well as taking a serious look at the recent allegations of the Coalition for Free Enterprise. Thank you.
DR LEONG CHE-HUNG (in Cantonese): Mr Deputy President, government officials have always been very proud of their positive non-interventionist policy which Hong Kong has practised over the years. Indeed, that policy has frequently been cited as a reason for the Government not to intervene in the provision of certain public services. Whereas it is a policy which certainly appeals to the private investors on our markets, there is no way the Government can refrain from "intervening" in the provision of those public services which are closely related to the livelihood of Hong Kong people. As a matter of fact, the practice of granting the permission to run a certain public service to a private company by way of a franchise is already a form of intervention in itself. Also, the setting up by the Government of schemes of control with respect to the profit level of private companies running the franchised services is an example of substantial monitoring. Meanwhile, the Government, which wholly owns the Mass Transit Railway Corporation as well as the Kowloon-Canton Railway Corporation, should have the responsibility of making sure that these two companies are able to deliver a quality service.
I have given the above examples in order to make the point that government intervention in the market is as inevitable as it is a positive thing to do. The Government should not regard it as some kind of unmentionable taboo or dreaded monster.
The issue at stake is really that government intervention should be in keeping with a sound principle, which is to say that it should do so to protect and promote the overall interests of society. It should not intervene for the sake of intervention.
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1971
As a matter of fact, one precondition which has to be met in terms of government intervention in the market is that we need to create an investment environment which is conducive to fair competition so that social resources will be effectively utilized. With regard to particular trades in which either monopoly or oligopoly is the order of the day, the Government should play an active monitoring role in order to ensure that the rights and interests of consumers are duly protected as they deserve to be.
It is regrettable that the Government does not have a principle which will ensure fair trade. Insofar as the monitoring of the various public and franchised services is concerned, it does not have a uniform mechanism either. One has the impression that its monitoring measures are not well co-ordinated and are devised in a haphazard manner to solve problems only after they have arisen.
With regard to the profit control scheme with which the Government uses to monitor a number of private companies, it would appear that over the past few years it has become rather messy and a far cry from what it originally was. Profit control has become price control for the Hong Kong Telephone Company. The profit control scheme applicable to the China Motor Bus Company has been abandoned with the result that 26 CMB routes are now taken over by the Citybus Company. However, no government control scheme applies to the Citybus Company; nothing is done to monitor the quality of the service provided on these 26 routes. Although the profit control scheme which applies to the Kowloon Motor Bus Company will come to an end within this year, the Government has yet to inform this Council how it proposes to deal with the issue of a future profit control scheme for KMB.
The Government has never seriously explained to this Council, or the public at large for that matter, according to what standards and principles the above mentioned profit control schemes are set up. Meeting Point legislators have in the past on numerous occasions made enquiries with the Government on this issue, but to no avail. The government reply has always been that profit control schemes vary according to the trade in question and also to the circumstances of each operator. Whereas on the one hand, the Government keeps reiterating its non-interventionist policy, it has also indicated that specific circumstances will be taken into account, on the other. One has the impression that the Government is applying double standards, or if one wishes to put it more bluntly, the Government has no policy at all.
The government policy in respect of fair trade is hardly satisfactory. When my colleague Mr Fred LI asked in this Council on 13 May last year whether we were faced with a monopoly situation in respect of petroleum supply, container terminal, banking and supermarket trades, the answer of the Secretary for Trade and Industry to his question at the time was that these trades were competitive and did not fall into the category of trades which would warrant government monitoring. Hardly had we digested her words of wisdom than we heard, in the Governor's policy address last October, that the
1972 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
Government would formulate a competitive policy, that the Government would provide the funding for the Consumer Council to engage in investigative studies of five trades, including banking, supermarket and energy supply. It is such inconsistency and incompatibility as exemplified in this case which reveals to us that the Government has a lot of internal problems. Immediate actions should be taken to rectify these problems.
It is for this reason that I lend my full support to the suggestion that it is now time the Government formulated a policy on fair trade practice. Continued inaction will perpetuate the wavering of the government position. The consumers will be left with no protection with regard to their rights and interests.
Mr Deputy President, with these remarks, I support the motion.
MR ALBERT CHAN (in Cantonese): Mr Deputy President, Hong Kong has the busiest container terminal port in the world. It also has the largest privately run container terminal port in the world. In order to cope with the building of the new airport and the development of the future container terminal port, the Hong Kong Government has plans for the development of a Container Terminal No. 10 in the northeast of Lantau Island. The development of a container terminal port will be a vital force behind the economic development of Hong Kong and neighbouring areas in China. However, the monopoly of the container terminal trade has always been a matter of complaint by the community of Hong Kong. The reason why we have ended up with a monopoly situation is chiefly that Hong Kong does not have an effective anti-monopoly policy which will forestall the monopoly of container facilities by operators of the trade.
The present situation is that the container terminal business is basically split, to the exclusion of other companies, between the Hong Kong International Terminals Limited and the Modern Terminals Limited. Of the existing eight container terminals, numbers 1, 2 and 5 are operated by the Modern Terminals Limited and numbers 4, 6 and 7 are operated by the Hong Kong International Terminals Limited. Container Terminal No. 8 is operated jointly by these two companies as well as the China Ocean Shipping Company. The only container terminal which does not have the involvement of these companies is Container Terminal No. 3. It is operated by its successful bidder, the Sea Land Orient Terminals Limited. It is apparent that the container terminal trade in Hong Kong is effectively monopolized by two companies.
Container terminal charges are rapidly rising in Hong Kong. We have become the second most expensive port in terms of cargo handling charges, surpassed only by Japan. We are 30% more expensive than Singapore, 20% more expensive than even Kaohsiung of Taiwan. Over the past three years, on the pretext of inflation, both the Hong Kong International Terminals Limited and the Modern Terminals Limited have put up prices by as much as
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1973
10% each year. It must be noted that over the same period the container cargo handling charges have only gone up by 3% annually in the rest of the world. It is evident then that the increase in Hong Kong is much higher than the increase elsewhere. We understand from the information provided by shipping companies that there are shipping companies which are reluctant to renew their contracts with the Hong Kong International Terminals Limited when they discovered in the process of renegotiating a new contract following the expiry of their old contracts that the charges are not quite reasonable. However, when these shipping companies go instead to the Modern Terminals Limited to ask for a quotation of charges, they invariably find that it refuses to provide them with the information. It is not until they have made the point of pursuing their case that they are finally given a price quotation which is more than 40% higher than that of the Hong Kong International Terminals Limited. It is clear that the monopoly situation is already a very serious problem for our container terminal trade.
It may be true that the high container cargo handling charges in Hong Kong may not be entirely attributable to the monopoly situation mentioned above. However, if the Government can introduce some competition into the container terminal trade, then it will lead to improved efficiency of the operators, and reduced cost to them. This will not only improve the competitiveness of Hong Kong in the container terminal trade in comparison with other countries; this will also be beneficial to our own container terminal trade. It is for this reason that the United Democrats of Hong Kong would like to take a positive role in terms of proposing to the Government that a selective tender system be adopted in the granting of the franchise for Container Terminal No. 9. Put simply, the Government should take the initiative to invite all consortiums which meet the tender requirements to bid for Container Terminal No. 9, with the exception of the two existing operators which are effectively controlling the trade. This is in order to make sure that new operators will be able to increase beneficial competition.
However, in announcing the result of the tender for Container Terminal No. 9, the Government has actually decided that Container Terminal No. 9 will be split in two such that both the Hong Kong International Terminals Limited and the Modern Terminals Limited will each be able to operate one berth, with the other two berths going to the Tsing Yi Container Terminal Limited headed by the Jardine Group. The government decision to grant under franchise only two of the four berths of Container Terminal No. 9 to a new operator will only have a minimal impact in terms of resolving the problem of monopoly. It can be foreseen that the future container terminal trade will still be monopolized by the Hong Kong International Terminals Limited and the Modern Terminals Limited and the result of this will be ever increasing cargo handling charges and no improvement to the efficiency of the operation of the container terminals. The government policy with regard to this is one of carving up the business to let vested interests "share the booty". It will only accelerate the speed of monopoly. It is a policy which we find difficult to accept.
1974 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
Meanwhile, the Government has failed to make full use of mid-stream cargo handling in the container terminal trade in order to avert the scenario of the trade being effectively monopolized by the container terminal companies. It is up to the Government to come up with a clear land allocation policy in order to promote the development of mid-stream cargo handling operations.
Monopoly of the container terminal trade by its existing operators has been the result of the lack of a clear government policy on fair trade practice. It is for this reason that the formulation of a policy which will promote fair trade practice is a matter of top priority for the Government.
Since I have one minute left to the alloted time for my speech, I would like to respond to a point made by Mr NGAI Shiu-kit. It is unfortunate, however, that he is not in this Chamber now. Mr NGAI was earlier on interpreting the spirit of the concept of "one country, two systems" in his speech, particularly with regard to how it applies to the sphere of economic activities. I must confess that I feel all the more jittery after listening to his interpretation. I am very glad to see the investment of state capital by China in Hong Kong. However, such investment activities should be conducted in a completely fair and rational manner. I am wary of the many problems which will arise as a result of the involvement of the departments of the Chinese Government in the economic activities of Hong Kong. For example, one wonders whether the Chinese Government officials would engage in transactions with the aid of insider information, whether they would influence investment decisions with the use of the clout which they enjoy through engaging in political activities, whether they would use government resources in aid of corporate development, whether they would seek to have a more favourable investment return through their political connections and privileges. All of these unanswered questions would make us feel that we have all the more reason for setting up a fair trading commission. I have to say that after listening to Mr NGAI Shiu-kit's explanation, I am all the more convinced that Hong Kong should set up a fair trading commission, particularly in the run-up to 1997.
MR VINCENT CHENG: Mr Deputy President, if I have a minute left I would offer it to my colleagues rather than using it myself. Mr Fred LI may be surprised to hear that I actually fully support the spirit of his motion. After all, we are all consumers ourselves; so why should we argue against protection of our own self from unscrupulous business practices? But I disagree with Mr LI's proposal to set up a fair trade commission or create a comprehensive fair trade policy. It is, in my view, a totally wrong approach. There are thousands of industries, millions of goods and services. Each has its own particular market which sets equilibrium prices through a complex process involving millions of decisions made by consumers and producers voluntarily. How could any single commission, even heavily staffed, undertake such wide ranging watchdog duties and determine whether fair trade prevails?
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1975
Given the heterogeneous nature of consumer interest, it is hard to imagine how a comprehensive fair trade policy can meet conflicting demands and at the same time, provide sufficient incentive to suppliers to supply.
We have to bear in mind that prices of goods or services are not the only consideration for consumers; benefits such as convenience, variety and quality are just as important. A comprehensive fair trade policy which cannot take into account all these dimensions is likely to create problems, thus defeating the original purposes of its enforcement.
There are three areas which have been regarded as unfair trade practices: entry barrier, industry agreements and large market share. I would like to deal with these one by one.
Hong Kong has a very competitive economic environment. There are no barriers to entry in most economic sectors. Indeed compared with the rest of the world, Hong Kong is probably the easiest place to set up business provided the investor has sufficient capital to meet the need of competition. The only areas where artificial barriers exist are those heavily regulated by the Hong Kong Government, or requiring huge amount of capital and, in the case of services, requiring professional qualifications to meet the standard of that profession, such as doctors and lawyers. Refinements may perhaps be needed in some areas. But I do not see the need for a major revamping of existing regulations.
The second area is industry agreements. Not infrequently, industry arrangements are interpreted as collusions. This is wrong. The existence of industry arrangements among suppliers tends to be the result of a dilemma which each society has to face when there is competition. The dilemma is the destructive effect of competition which is a process of creative destruction. Creative because strong players emerge and grow bigger, destruction because the weak ones will be eliminated which may create disturbances and shocks to society. Therefore sometimes arrangements have to be made to reduce disruptions and ensure stability in the market, where stability is important, such as banking and finance, in order to protect consumers. The banking industry is a prime example. It has been argued that the deposit interest rate rule is a cartel to protect big banks. This is wrong. It is there to allow smaller banks to compete on quality of services rather than just savings deposit pricing. It also helps smaller savings depositors who are equally, if not more, expensive to serve than large depositors to continue to receive subsidized services. If the agreement is scrapped, I am sure that these depositors would no longer be subsidized and more fees and charges would be imposed by banks on the small savers. There are 161 banks in Hong Kong. So certainly there is no shortage of competition in this area.
The third issue is market share and monopolistic practices. Evidence shows that there is no clear direct relationship between large market shares in the hands of a few firms and low degree of competition. One example perhaps
1976 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
is provided by the supermarket sector which has been dominated by two large supermarket chains; yet many small stores continue to co-exist.
In a competitive environment, firms which provide better services naturally grow and subsequently command larger market shares. If the increase in market share is largely the result of efficient operations on the part of the firm, subsequent increase in shares should not be regarded as unfair. Indeed it should be regarded as a reward for success. It therefore should not be a reason for government interference or legislation. We should not punish success.
Legislation cannot guarantee fair trade. There are ample examples in other societies to support this argument. If we take the United States experience as reference, after about 100 years of anti-trust experience, it is still unclear whether anti-trust enforcement significantly contributes to consumer welfare. For one thing, when competitive and monopolistic behaviours are not distinguishable, anti-trust may result in restraining competition, to the detriment of consumers.
The need to minimize government intervention in the economy is well known and will not be reiterated here. Our minimum interference policy has served both investors and customers in Hong Kong well. There is no need to form a fair trade commission.
That does not mean consumer complaints should be treated lightly. We must ensure that consumers are getting what they have paid for, and ensure that the quality of the product matches what a consumer has been promised before the transaction. Deceit by dishonest merchants who cannot face competition must be dealt with sternly and vigorously.
In this regard, there are sufficient checks and balances in the system. There is absolutely no need to set up another quango and bureaucracy to assume a duty which at best could only be ill defined. It would be a misallocation of resources and send wrong signals to investors. We need more players, not referees.
Mr Deputy President, I support the amendment.
MR CHIM PUI-CHUNG (in Cantonese): Mr Deputy President, Mr Martin LEE has made a complaint on behalf of the United Democrats of Hong Kong against the setting up of a Chinese funded company in Hong Kong. All of us are of course entitled to our own opinion as legislators. However, bearing in mind that this sort of criticism will have a certain impact on members of the public, I am obliged to express my own opinion on this issue as well.
Hong Kong is a place of freedom. Representatives of the United Democrats have no understanding of business. Many businesses are in fact run by the state in many places and countries. And such state business ventures have
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1977
fundamentally a bearing on the economy and the power of the state. Will this give rise to problems in the countries concerned? The Kuomintang of Taiwan has until recently a newspaper in Hong Kong; it folded up only as a result of business failure. The United Democrats of Hong Kong used to have a gifts shop of its own; it too has folded up for similar reason. In this regard, it is unfair that Mr Martin LEE should criticize the companies, as he has done just now, which have no representatives on this Council. Meanwhile, the sweeping criticisms which he has made against the Chinese Government is also nothing more than cheap political tactics aimed at inciting members of the public. I strongly object to the use of such tactics.
As a matter of fact, the Hong Kong Government has never practised fair play; it is not playing fair even now. Why am I saying this? Other than favouring the franchised companies, the Hong Kong Government has always been taking care of the interests of the British hongs and big foreign firms, including their political interests. One can see for evidence of this the appointment of representatives of many large corporations as Members of the Legislative and Executive Councils. It is very difficult indeed to find fair play in this whole wide world. The Israelis have evicted more than four hundred Palestinians from their homes. What is the international reaction to this? It is for this reason that I say that when we talk about fair play it means in reality nothing more than allowing people who have the power and influence to make their own assessment. Thanks to the laissez faire policy which the Hong Kong Government has persistently been pursuing in the area of economic development, Hong Kong has been able to enjoy a very important role on the global economic scene. It is the driving force which has inspired a fighting spirit in everyone participating in the economic function of our society, irrespective of their occupation and walk of life. One of the wealthiest Chinese businessmen in the world who is based in Hong Kong had personal assets amounting to no more than some tens of million dollars about a little over a decade ago; indeed, he could have been penniless some 30 years ago. The non interventionist policy of the Government has enabled all social classes in Hong Kong to work towards the fulfilment of their goals by emulating their chosen role models.
The costs of clothing, food, shelter, transportation and electricity have a bearing on inflation. Previously, only the first four mentioned items were relevant. Now electricity has become also vitally important, and its costs also include costs of telecommunications and of obtaining other electrical conveniences. In order to combat inflation, the Government has the responsibility and obligation to strike a balance in terms of the costs of clothing, food, shelter, transportation and electricity so that members of the public will be able to afford expenses on these items. It is fortunate that in terms of clothing and food, one has the luxury of choice to the extent that there is something to suit every budget. With regard to shelter, the Government has already done its best to help though, admittedly, the problem of housing has not been completely solved. With regard to transportation and electricity, it is up to the Government to formulate a policy which will address the problem of
1978 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
inflation. And this policy will be one which will not guarantee that the franchised companies would be able to reap their assured 12% to 15% profit. The issue of people's livelihood has to be addressed. It is for this reason that the yearly tariff increase should be less than the rate of inflation. The Government should formulate a policy in this respect.
The existence of a uniform price within a certain trade, or the agreement of a uniform price as a result of self-regulation for that matter, does not mean automatically that we have a case of monopoly. The more important issue here is whether the price has been set at a reasonable level. That after all is the most important factor. For example, insofar as rice is concerned, as a result of government regulation, the price of rice has remained very stable for the past 40 years. Consequently, Hong Kong people do not have to worry about the price of rice shooting beyond their reach. In any case, another reason for the stability of the price of rice may also be less reliance on rice as Hong Kong society becomes more affluent. However, it is praiseworthy that the Government has fulfilled its obligations in respect of protecting people's livelihood. Insofar as private enterprise is concerned, it is doubtless true that some members of the public have been encouraged by the performance of the Consumer Council. However, the Consumer Council's rash but strong criticisms of trades which it does not have a good understanding of have not been entirely conducive to the operation of our free enterprise economy. Meanwhile, I would also like to urge the Government to review its policy with regard to the monitoring of the charges of medical practitioners and lawyers. For example, the hourly rate of a lawyer should be specified clearly, and the same goes for the consultation fee of doctors. Only then will people's livelihood not be directly affected. In this connection, Mr Deputy President, I would consider that there are many issues on which amendments to government policies are called for and there are many issues which require attention. However, I would consider unnecessary any attempt to control through legislative means the economic operation of Hong Kong.
Mr Deputy President, I was originally quite neutral on the issue we are discussing today. But now I have changed my position and would instead like to support the amendment motion.
MR FREDERICK FUNG (in Cantonese): Mr Deputy President, Honourable Members, one very important factor which accounts for the success of Hong Kong is our adoption of a system which promotes free enterprise and in order for free enterprise to function effectively it is important we have in place an environment which is conducive to competition. It is through the competition of the various enterprises that we will be able to achieve the greatest social and economic benefits and that the rights and interests of consumers will be guaranteed. However, in Hong Kong, we have ample evidence which points to the fact that the large enterprises are able to influence and control government policies to such an extent that the interests of consumers are jeopardized. In addition to monopoly practised by the large enterprises to
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1979
the detriment of consumer interests, there are also corporate and trade practices which tend to erode consumer interests. In order to rectify such practices which have been in existence for long and which have been unfavourable to the public, many developed countries including, for example, the United States of America, the United Kingdom, Germany and Japan, and many developing countries as well, for example, Taiwan and India, have each in their turn introduced anti-monopoly legislation which will help to promote fair trade practice. What Hong Kong has been doing in this respect has been rather piecemeal and inadequate. Admittedly, the western nations have their unique historical background and quite different judicial mechanism in terms of evolving their policies to oppose monopoly, in favour of fair trade practice. However, they all share the same common concern about the incidence of commercial activities which are detrimental to the interests of consumers. In this regard, it is also up to Hong Kong to introduce the relevant legislation and policies in order to rectify the following trade practices.
1. Agreement to restrict free trading
There are many trades in Hong Kong which determine the pricing of their products and services by means of agreements reached by trade associations. For example, the Hong Kong Association of Banks determines the interest rates on deposits and charges for other services. The Law Society sets the minimum fees chargeable for certain services. The Newspapers Association also sets the retail price for newspapers. In certain trades in which there is only a limited number of operators, for example, when it comes to the supply of petroleum, the petroleum
2. Monopoly of public utility services
Hong Kong has a large number of public service providers which are not always subject to the monitoring of the Government. For example, corporations in the businesses of gas supply, aviation and container terminal operation are not subject to direct government supervision at all. Their operations have become more and more diversified and working in co-operation with groups (which are connected to China as well as foreign countries), they have been able to diversify into other fields. This phenomenon, and its development, is not favourable to the consumers. It is up to the Government to conduct a systematic study under the auspices of a comprehensive anti monopoly policy in order to formulate an
3. Agreement on sale of related products
There are many companies in Hong Kong which in the process of selling related products will also require that the buyer also purchase on their terms some other additional products and services. For example, there are banks which require their mortgage loan customers to also patronize their lawyers and insurance companies. Another example is that some telecommunications companies actually require the households who buy
1980 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
their satellite television antennae to sign a long-term maintenance contract with them. Such trade practice is in serious breach of the right of the consumer to choose.
4. Merger of large enterprises
Hong Kong has seen in recent years mergers or other kinds of collaborative arrangements between enterprises in various trades. One wonders whether such commercial practice is detrimental to the interests of the consumers. It is a matter which the Government should attend to.
It is on the basis of the above evidence that I would like to suggest that the Government should carefully study the Fair Trading Act 1973 and the Consumer Protection Act 1987 of the United Kingdom. It is up to the Government to introduce legislation which would suit the circumstances of Hong Kong as soon as possible in order to promote fair competition, protect the interests and rights of the consumers, and consolidate our democratic political system.
Bearing in mind that Mr Fred LI's motion calls for the introduction of legislation in this respect and the setting up of a fair trading commission, and that it is more specific and more effective than the amendment motion of Mr Jimmy McGREGOR, I would lend my support to Mr LI's original motion.
DR HUANG CHEN-YA (in Cantonese): Mr Deputy President, the vitality of a free market economy comes from free competition. It is only through competition that innovations and improvements will continuously be made. In a market which does not have competition, enterprises tend to be complacent with the status quo because they do not have to face the challenge of competition. They will not seek to lower production cost and improve product quality. Consequently, prices will be kept up to the disadvantage of the consumers. Meanwhile, from a macroscopic point of view, an economic and market analyst called PORTER has observed that the international competitive edge is closely related to the level of competition which prevails in the domestic market. Intense competition within the domestic market will enable businesses to be on their fullest alert in terms of making constant improvement. Businesses which are accustomed to domestic competition will have the capability of competing internationally. Conversely, monopolistic enterprises or businesses are likely to push up the costs to other enterprises or businesses, through their attempt to maintain their high profit level. This will erode their international competitiveness. The container terminal and telecommunications operators in Hong Kong are good examples of such enterprises or businesses. In this regard, the United Democrats of Hong Kong take the view that the Hong Kong Government has the responsibility of encouraging and ensuring that our economy stays healthy and adequately competitive. This will in turn motivate the enterprises to seek innovation and improvement on the one hand and improve the competitive edge of Hong Kong internationally, on the other. It is
HONG KONG LEGISLATIVE COUNCIL — 17 February 1993 1981
on this basis that the United Democrats of Hong Kong feel that the Government should set up a fair trading commission which will be charged with receiving all sorts of complaints and which will be empowered to investigate all sorts of cases involving breach of fair trade practice. The commission should also study the monopolistic situation which prevails in individual sectors with a view to making recommendations regarding the rules and regulations of fair trade practice. It is also up to the Government to formulate fair trade practice laws so as to maintain the rights and interests of consumers and to ensure fair competition.
The present situation is that Hong Kong does not have an integrated and comprehensive competitive policy, that no government department is charged with attending to the issue of competition, and that there is no legislation which regulates unfair trade practice. For example, there is no legislative control over sales agreements concerning inter-related products, price fixing and franchise arrangements. Indeed, many of the problems involving monopoly have been the making of the Government itself. We can see, for example, unfair trade practice in the operation of our container terminal, civil aviation, and recently our telecommunications industries.
The Governor admitted in his policy address last October that the Government should formulate a competitive policy. It is unfortunate that he has entrusted the formulation of such a policy to his Business Council, which is purely made up of the heads of large corporate groups. One is justifiably sceptical about the effectiveness of such a Business Council. Recently, the Government has allocated to the Consumer Council $800,000 to study the monopoly situation in Hong Kong. It goes without saying that the allocation has my support. The Consumer Council does not have adequate powers to play the role of a fair trading commission. However, if new legislation is passed to give the Consumer Council new investigative and vetting powers, then its original operation may be significantly expanded to cope with the problem.
Some people are wary that legislation governing fair trade practice, and the setting up of a fair trading commission for that matter, will at the same time put economic activities in jeopardy. But we can see that the advantages of so doing far outweigh the disadvantages, if the experience of Europe, the United States, Australia and Japan is anything to go by. We can draw on their experience and learn from their mistakes so that we will be able to have in place a legislative framework and a system which are compatible with the circumstances of Hong Kong.
There is a view that fair trade practice will be a blow to the big corporations. But that is a misconception.
I am very glad that Mr Fred LI has rephrased his own original motion, changing the wording from "rectify any phenomenon of market dominance" to "rectify any phenomenon of unreasonable market dominance". While we may have difficulty supporting the former, we will definitely support the latter, that
1982 HONG KONG LEGISLATIVE COUNCIL — 17 February 1993
is to say, his motion in its present form. We understand very well that the large market share enjoyed by an enterprise may not necessarily be harmful to the economy as a whole. It may simply be the result of the enterprise being more efficiently run than its competitors. We also take the view that not all kinds of mergers are harmful to the economy either. For example, a merger may actually achieve economy of scale and bring about economic benefits. However, power corrupts and absolute power tends to corrupt absolutely. When the enterprise is in a position to dominate the market, it is very easy for it to exercise unreasonable control over it. In this regard, there is a need for the Government to pay particular attention to monopoly and mergers to make sure that competition will not be pre empted as a result. The principle of fair trade practice is not to stifle all attempts to merge or enlarge one's market share. However, unreasonable domination of the market will mean that no new competitor will be able to join in or that the new players will in any case have a hard time surviving. This will mean that the economy will lose its innovative drive and dynamic efficiency, and consumer interests will suffer. We think that this should not be allowed to continue.
As a matter of fact, we should not be dogmatic about the whole issue; we should not look at it through colour spectacles. To say categorically that big is beautiful, or big is evil for that matter, is a radical, and rash, thing to do. But we have to take note of the fact that over the past 10 years or so more and larger scale mergers of corporate groups have taken place both in Hong Kong and around the world. We should not practise the same old philosophy without any flexibility; we should not believe that just because Hong Kong has not had a fair trade policy all along, or just because we have been able to apparently stay out of trouble by giving a degree of protection to consumers and ensuring our market stays competitive, there is no need for us to make changes to our system to cope with new circumstances. I would like to identify two problems at this point.
First of all, as a result of the service sector becoming more and more internationalized, and given that the Hong Kong market has always been open to foreign investors, and that China is in the process of opening up its tertiary sector, it is possible for some super international groups to enter Hong Kong and Mainland China and actually, through their vast capital resources and sinister price cutting tactics, get rid of smaller operators. And after they have established their monopoly of the market, they will then take the advantage to push up prices to the detriment of the defenceless consumers who have already fallen into their grip.
Secondly, normal competition on the market will be put in jeopardy if an unfair advantage is obtained by a government enterprise or a semi-government enterprise through receiving subsidy or exercising political clout. As a matter of fact, complaints have been received by the Trade Development Council and investigation is called for in respect of such incidents. Indeed, recently, there have been cases involving state agencies collaborating with commercial groups in business ventures. In view of the smallness of the Hong Kong market, and its
No comments yet.
Private notes are available after approval.