LegCo Paper No. CB(1)883/96-97
(These minutes have been
seen by the Administration)
Ref: CB1/PL/EA/1

LegCo Panel on Environmental Affairs

Minutes of meeting held on Tuesday, 7 January 1997 at 10:45 a.m. in Conference Room B of the Legislative Council Building

Members present :
    Hon Christine LOH Kung-wai (Chairman)
    Dr Hon John TSE Wing-ling (Deputy Chairman)
    Hon Edward S T HO, OBE, JP
    Hon Emily LAU Wai-hing
    Dr Hon Samuel WONG Ping-wai, OBE, FEng, JP
    Hon Mrs Elizabeth WONG, CBE, ISO, JP
Member attending :
    Hon LEE Kai-ming
Members absent :
    Dr Hon LEONG Che-hung, OBE, JP
    Hon IP Kwok-him
    Hon MOK Ying-fan
Public officers attending :
    All items

    Mr Bowen LEUNG
    Secretary for Planning, Environment and Lands
    Mr Rob LAW
    Director of Environmental Protection
    Mr Steve Barclay
    Principal Assistant Secretary for Planning, Environment and Lands (Environment)

    Items IV and V
    Mr Benny WONG
    Assistant Director of Environmental Protection (Waste Facilities)

    Item IV
    Dr M M LAU
    Officer in charge (Facilities Planning)

    Item VI
    Dr Ellen CHAN
    Principal Environmental Protection Officer (Waste and Water Management)
Clerk in attendance :
    Miss Odelia LEUNG
    Chief Assistant Secretary (1)1
Staff in attendance :
    Ms Sarah YUEN
    Senior Assistant Secretary (1)1

I Confirmation of minutes of meeting

(LegCo Paper No. CB(1)511/96-97)

1. The minutes of the meeting held on 7 November 1996 were confirmed.

II Date of next meeting and items for discussion

(List of outstanding items for discussion (1996-97) and the Administration’s letter responding to the Panel’s proposal to hold a special meeting to discuss Trade Effluent Surcharge (TES) Review were tabled at the meeting. The latter was circulated to members not present vide LegCo Paper No. CB(1)653/96-97)

2.1.1. Members agreed to discuss the following items at the next meeting of the Panel scheduled for 25 February 1997 -

(a) Centralised incineration facility; and

(b) Vehicle emission control strategy (members of LegCo Panel on Transport to be invited to take part in the discussion of this item).

(Post-meeting note: item (a) was subsequently replaced by the item on contaminated mud disposal at East Sha Chau.)

3.2.1. Members noted the Administration’s letter on TES Review. The Secretary for Planning, Environment and Lands (SPEL) assured members that before the Administration decided on the way forward regarding the TES charging scheme, it would consult and seek members’ views. Members agreed to defer the discussion on TES Review to March 1997.Admin.

III Information papers issued since last meeting

(LegCo paper Nos. CB(1)474 and 580/96-97)

4.3.2. Members noted that the following papers had been issued since the last Panel meeting held on 3 December 1996 -

(a) Correspondence between the Federation of Hong Kong Hotel Owners Limited and the Environmental Protection Department (EPD) regarding Sewage Charges and TES; and

(b) The Administration’s response to the Federation of Hong Kong Industries’ letter commenting on the review of TES Scheme.

IV Landfill charging scheme and Waste Disposal (Amendment) Bill 1996

(LegCo Brief Ref. PELB(E)55/03/124(96), LegCo Paper Nos. CB(3)912/95-96 and CB(1)610/96-97(01))

5.4. The Principal Assistant Secretary for Planning, Environment and Lands (Environment) (PAS/PEL(E)) briefed members on the Administration’s paper reporting on the latest developments in the landfill charging scheme (the Scheme). He stressed that the Scheme was in line with the Polluter Pays Principle and would form an important element of the waste reduction plan on which the Administration was working. To facilitate its early implementation, the Administration had endeavoured to address waste collectors’ concern about upfront payment and bad debt problems which might arise from the original proposal to require them to pay landfill charges at the point of disposal at landfills in the form of pre-paid tickets. He highlighted the following developments -

(a) After conducting many rounds of meetings with the concerned trade associations, there was a general consensus that account billing could in principle address waste collectors’ upfront cashflow concern. The Administration was making arrangements to advance the setting up of account billing systems to enable landfill users to pay in arrears. Moreover, in recognition of the different needs and trade practices of different groups of landfill users, the Administration, in response to the trades’ suggestions, proposed three options for charging in parallel, namely, the pre-paid ticket system, the chit-based account billing system and the vehicle registration mark (VRM) - based account billing system. Subject to members’ views, the Administration would consult the relevant trades again regarding the operational details. Meanwhile, early enactment of the Waste Disposal (Amendment) Bill 1996 (the Bill) was necessary to facilitate the making of regulations to prescribe the operational details of the account billing systems.

(b) As for the bad debt problem, the Administration noted the request of some trade associations for underwriting bad debts by the Government. However, as a matter of principle, the Administration considered it inappropriate to give an undertaking to underwrite commercial bad debts, not to mention the financial implications. Since the bad debt problem was only limited to a small group of clients, it should be feasible for waste collectors to identify such clients and individually or collectively make some common private commercial arrangements with them to ensure payment. For example, they could require these clients to pay deposits sufficient to cover one or two months’ average collection charges before providing the service. The Administration would continue to discuss with waste collectors with a view to bridging any outstanding differences.

The proposed charging systems to solve the upfront cashflow problem

6.2. On the details of the proposed charging systems, representatives of the Administration supplemented the following information -

(a) The proposed charging systems would have little bearing on the income from the landfill charges, which would amount to around $100 million a year.

(b) It was envisaged that the major users of the chit-based account billing system were construction waste producers/collectors, whereas the users of the VRM-based account billing system were mostly commercial/industrial waste collectors. The pre-paid ticket system would mainly cater for the needs of infrequent users who would make up only 1% to 2% of landfill users. The Administration would provide the estimated number of users of the different payment arrangements when it updated the Panel of further progress of the Scheme.Admin.

(c) The Administration planned to delegate the charge collection service to contractors (such as the waste disposal facility operators). The approved landfill charges were set at a level sufficient to recover 50% of the construction costs of landfills but exclude the administrative costs of the proposed charging system, which would be around a few million dollars a year. When the Administration reviewed the landfill charges, it would take into consideration the increase in administrative cost resulting from these charging arrangements.

(d) A system would be put in place to ensure payment by the waste collector. The Administration would leave it to the waste collectors and the waste producers to sort out the payment arrangements between themselves.

(e) The possibility of waste collectors abusing the pre-paid ticket system was remote. As the tickets could not be cashed, there would be no incentive for waste collectors to retain the tickets for any other use except for disposing of wastes at landfills.

(f) The Chemical Waste Treatment Centre (CWTC) was also operated on an account billing system under which the users pay in arrears based on weighbridge data provided by the CWTC contractor.

The bad debt problem

7. Members agreed that the Administration should not underwrite bad debts. A member proposed that apart from deposit payment, waste collectors might also consider requiring their clients to seek bank guarantee by means of a letter of credit. In response, SPEL agreed to relay the member’s proposal to the trades for consideration.SPEL

Charge levels

8. Some members were concerned if the charge levels were acceptable to the trades. SPEL emphasised that the Regulation prescribing the charges for landfill disposal was passed by the Legislative Council in June 1995. The Administration so far had not received any comments on the level of charges from the trades and their comments centred around the charging arrangements. Some members were of the view that apart from the charging arrangements, it was important to seek express views from the trades on the charge levels. They suggested that the Administration consult the trades on the charges.

Others

9.5. In reply to members’ other questions, representatives of the Administration provided the following information -

(a) It was difficult to check each and every load of waste for disposal of at the landfills. The Administration had to strike a reasonable balance on the level of monitoring over the possibility of toxic wastes being disposed of at the landfills. Taking account of overseas practices and Hong Kong’s special conditions, under the present arrangements, the Administration requested the operators of major waste disposal facilities to conduct random checks on 5% of the loads of wastes disposed of at their facilities. Where necessary, the Administration would ask the operators to step up surveillance. As a matter of fact, a comprehensive cradle to grave system of control over chemical waste treatment was already put in place under which all chemical waste producers had to comply with stipulated requirements for proper disposal of chemical wastes.

(b) As for construction wastes, to reserve landfill space and encourage recycling, the Administration always encouraged on-site sorting of construction waste where after segregation and sorting, inert materials would either be handled on site for recycling or diverted to public dumps for land reclamation. In fact, the Scheme would provide an economic incentive for on-site sorting of construction wastes.

(c) It was estimated that landfill charges would have no adverse impact on illegal dumping, the problem of which was considered not serious at the moment. The Administration would put forward to the Public Works Subcommittee of the Finance Committee a proposal to construct a construction waste reception facility in Tuen Mun. Should the proposal be endorsed, it would help mitigate illegal dumping.

10.6. SPEL assured members that the Administration would continue to liaise with the relevant trades with a view to fixing a date for the early implementation of the Scheme. The Administration would report back to the Panel in April 1997. Members supported the Bill in principle and agreed that there was no need to form a Bills Committee to study it. Members also agreed that the Chairman would make a verbal report on the decisions of the Panel to the House Committee at its meeting on 10 January 1997.Admin.

Chairman

V Merchant Shipping (Prevention and Control of Pollution) (Charges for Discharge of Polluting Waste) Regulation 1996

(LegCo Paper No. CB(1)610/96-97(02))

11.7. PAS/PEL(E) briefed members on the Administration’s information paper, explaining the effects of the introduction of the charging scheme at CWTC on the discharge of MARPOL wastes containing oil or noxious substances from ships into the sea and on the utilisation rate of CWTC; and whether the fee levels were comparable with those of the neighbouring ports.

Effects of the charging scheme

12.8.. Some members were concerned if the charging scheme had lead to a deterioration in illegal discharge of oily wastes into Hong Kong waters. In response, representatives of the Administration made the following points -

(a) Since the introduction of the charging scheme, the quantity of MARPOL wastes treated at CWTC had been reduced marginally and thereafter levelled off. According to the Marine Department, the built-in mechanism of the MARPOL Convention had enabled them to audit the disposal of MARPOL wastes effectively and so far there had been no evidence to indicate a deterioration of the marine environment. The Director of Marine would step up enforcement action if necessary. At members’ request, the Administration would ask the Marine Department to provide members with a paper on the present situation.

(b) Hong Kong was just one of ports where ships might go for disposal of wastes. Ships were free to choose other nearby ports for free disposal of wastes or for disposal at a cheaper price. Some ships might even dispose of their wastes in the open sea. In that case it would be beyond Hong Kong’s power to intervene.Admin.

Recovery of Costs

13.9. Some members were of the view that the charges, which currently recovered only about 25% of the variable operating cost (VOC) of CWTC, were too low and that public money should not be spent on subsidising ship operators in treating MARPOL wastes given that shipping business was commercial in nature. They opined that the charges should be increased to reduce the level of subsidy.

14.10. The representatives of the Administration acknowledged members’ views and stated that the Administration had no intention of encouraging by way of subsidy the world shipping fleet to use the service of CWTC. The Hong Kong Government had to fulfil an international obligation under the MARPOL Convention to provide reception facilities for the disposal of MARPOL wastes at a reasonable price so as to encourage ship operators to dispose of their MARPOL wastes properly. If possible, the Administration would like to recover 100% of VOC, but the practice around the world was to provide some form of subsidy. The current level of charges were approved by LegCo members. If charges were to go up by 5% of VOC annually, the Administration would be able to identify the point at which the relationship between charge levels and illegal dumping would become unacceptable. The Administration would take members’ view into account in proposing future adjustment of charges.

Others

15.11. In reply to members’ other questions, the Administration provided the following information -

(a) MARPOL wastes were mainly oily wastes or sludge. They made up about 50% of the wastes treated at CWTC at present.

(b) CWTC could handle up to 4,000 tonnes of wastes per month. Although at times the quantity of MARPOL wastes collected at CWTC exceeded this level, with storage facility there was no operational problem.

VI Import of wastes

(LegCo Paper No. CB(1)610/96-97(03))

16. PAS/PEL(E) briefed members on the Administration’s paper which outlined the problem of imported wastes in Hong Kong and examined the adequacy of existing policy and legislation in containing the problem. Members noted that to provide a framework for controlling the transboundary movement of hazardous and other wastes under the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, which would continue to apply to Hong Kong after 30 June 1997, a permit control scheme on the import and export of wastes under the Waste Disposal (Amendment) Ordinance 1995 (the Ordinance) came into operation on 1 September 1996. With the implementation of this permit system, the import of hazardous or non-recyclable wastes would be placed under stringent control, and it would be an offence under the Ordinance to import such wastes without a permit, regardless of the purpose of the import. However, as the local and international trading communities were still getting used to and becoming aware of the scheme, the situation was still in a state of flux and would take a few more months to settle down before the Administration could take an objective view of the position and decide if additional controls were necessary.

17. Members were gravely concerned about the import of wastes into Hong Kong and called on the Administration to monitor the problem closely. In response, the Administration stated that under the enhanced control scheme the country of origin would have to take back rejected shipments if the required permit had not been granted. This would ensure that all rejected shipments of non-recyclable wastes would be returned to the country of origin as soon as possible and that the wastes would not be disposed of in Hong Kong. The control scheme had been widely publicised to the local waste traders, the shipping industry and Hong Kong’s major waste trade partners. EPD also liaised closely with relevant authorities in overseas countries and worked with the Hong Kong Customs and Excise Department to carry out inspections of selected waste shipments. For example, a recent meeting of the Hong Kong-Guangdong Environmental Protection Liaison Group had led to improved information exchange on transboundary waste shipments to ensure that wastes returned via Hong Kong would not be stranded in Hong Kong. EPD would continue to liaise with China on the types of wastes that China would ban from import or allow to be imported. The Administration had strengthened contacts with landfill site staff and put up notices at landfills to guard against any illegal disposal of imported wastes thereat. Nonetheless, since the new control scheme had been in place for only three months, it would take some time to see the improvements .

Return of wastes stranded in Hong Kong

18.14. Responding to members’ questions on the latest development of two cases of importation of wastes into Hong Kong, the Administration provided the following information -

(a) With the assistance of the Consulate General of the United States in Hong Kong, the shipment of plastic wastes exported from the United States to China and subsequently returned to Hong Kong on 2 July 1996 because of rejection by the Fuzhou authorities had been returned to the United States for disposal.

(b) The Administration was closely liaising with both the German and the Dutch authorities and consulates for the early return of the German wastes stranded in Hong Kong since April 1996. As the two countries had yet to clarify which of them was the country of origin, the problem might take some more time to be resolved. According to the bill of lading, the Netherlands was the exporting country, and Hong Kong could return the wastes to her in the event that all available solutions were exhausted. However, the Administration still wished to ensure that either countries would receive the returned wastes so that the shipping company could ship the wastes back to an agreed consignee. The Administration believed that a solution was coming off soon. Currently, the wastes were safely kept in containers and would not cause pollution in Hong Kong. At members’ request, the Administration would furnish a report to the Panel upon return of the German wastes.

19.15. Members expressed concern over the effective implementation of the Basel Convention in view of the difficulties faced by the Administration in trying to return the German wastes. A member suggested that if waste shipments were not allowed on shore, the Administration might effect the return of the wastes to the country of origin more easily. In response, representatives of the Administration explained that some of the wastes might enter Hong Kong by container trucks. Some might be labelled as something else and were only found to be wastes upon on-shore inspection. There were thus difficulties in implementing the member’s proposal. However, as the Basel Convention also required the establishment of a bond for payment of return trips, the Administration could effect early return of rejected wastes under the new permit system even if the exporting country refused to take them back. Moreover, the two cases reported above occurred before the new permit control scheme took effect. Should there still be difficulties in returning rejected wastes after the operation of the new scheme, the Hong Kong Government would report the difficulties to the Basel Convention authorities. To prevent recurrence of the German waste case, the Administration would also gear up liaison with overseas counterparts to bring about a more effective international networking of waste movement control.Admin.

Recyclable wastes

20.16. To plug any possible loophole in implementing the Basel Convention, the Chairman opined that the Ordinance should cover recyclable wastes as well so that hazardous wastes could not be imported under the guise of recycling. In response, SPEL emphasised that whilst the movement of hazardous or contaminated wastes was placed under stringent permit control to ensure their proper management, legitimate trading and recycling of non-hazardous wastes should be allowed to continue without interference in order to conserve raw materials. In fact, Hong Kong was enjoying a booming waste trade amounting to over $23 billion in 1995, 98% of which consisted of non-hazardous and uncontaminated wastes, such as waste paper and scrap metals. SPEL further supplemented that waste recycling factories had to abide by the same pollution control regulations which applied to all factories alike.

Others

21.17. A member asked whether organic wastes such as lard would be subject to control. In response, the Principal Environmental Protection Officer (Waste and Water Management) (PEPO(WWM)) explained that according to the list of wastes that were allowed for import into China, lard was not included.

22.18. In response to a member’s question, PEPO(WWM) also clarified that a company called the China Inspection Co Ltd had been delegated by the Central Commodity Inspection Bureau of China to be their agent for inspecting waste shipments from Hong Kong. However, their responsibility was only restricted to checking shipments originated from Hong Kong.

23.19. The meeting ended at 12:30 a.m.
Legislative Council Secretariat
17 February 1997

Last Updated on 18 August 1998