Panel on Public Service (Minutes) 25 Aug 97

Provisional Legislative Council

PLC Paper No. CB(2) 322
(These minutes have been seen
by the Administration)

Ref : CB2/PL/PS/1

Panel on Public Service

Minutes of meeting held on Monday, 25 August 1997 at 10:45 am in Conference Room A of the Legislative Council Building

Members present :

Hon IP Kwok-him(Chairman)
Hon LEE Kai-ming (Deputy Chairman)
Hon David CHU Yu-lin
Hon Mrs Elsie TU, GBM
Hon Mrs Selina CHOW, JP
Hon Ronald ARCULLI, JP
Hon CHAN Wing-chan
Hon Andrew WONG Wang-fat, JP
Hon Ambrose LAU Hon-chuen, JP
Hon CHENG Yiu-tong

Members absent :

Dr Hon Philip WONG Yu-hong ] other commitments

Public officers attending :

Mr W K LAM

Secretary for the Civil Service

For Item III

Mr D W PESCOD

Deputy Secretary (Civil Service)2

For Item IV

Ms Bernadette LINN

Principal Assistant Secretary (Civil Service)

Ms Grace LUI

Deputy Secretary (Civil Service)3

Clerk in attendance :

Mrs Sharon TONG: Chief Assistant Secretary (2)1

Staff in :

Mr Paul WOO: Senior Assistant Secretary (2)5

I. Confirmation of minutes of meeting held on 22 July 1997
(PLC Paper No. CB(2)175)
The minutes of meeting held on 22 July 1997 were confirmed.

II.Date of next meeting and items for discussion

2.The next meeting would be held on Monday, 22 September 1997 at 10:45 am to discuss the following items:

Review of declaration of interests by civil servants - scope and progress
Pay level survey mechanism
An outline on the management of civil service

3.Members also agreed that the following subjects should be discussed at the Panel meeting in October 1997 or at subsequent meetings:

Review of civil service fringe benefits
Putonghua training for civil servants
Update on employment of temporary staff in the civil service

III.Post titles of principal officials
(PLC Paper No. CB(2) 177(01))

4.Deputy Secretary (Civil Service)2 (DS(CS)2) gave a brief introduction on PLC Paper No. CB(2) 177(01). He explained that it was not uncommon within the civil service for an officer to have a post title which was different from his rank title. The former generally reflected an officer's functions in a particular post while the rank title reflected his position within the grade. The adoption of the post titles " Chief Secretary for Administration " and " Secretaries of Bureaux ", which were different from the corresponding rank titles of " Administrative Secretary " and " Directors of Bureaux " as laid down in the Basic Law, was intended to reflect more clearly the status and position of the respective post-holders. The discrepancy was of operational relevance, since outside Hong Kong the titles of " Administrative Secretary " and " Director " could be misconstrued as denoting a middle ranking functionary. Secretary for the Civil Service (SCS) said that similar misunderstanding would not arise regarding the Chinese titles stipulated in the Basic Law as the titles and were readily understood as referring to very senior officials.

5.In response to members' questions, SCS said that the use of English post titles which were different from the titles stated in the Basic Law was approved by the Chief Executive and accepted by the Central Government. He added that principal officials would take every opportunity to convey the message to the international community that their functions and responsibilities had remained unchanged after the handover of sovereignty.

6.Mr Ambrose LAU Hon-chuen pointed out that the Chinese titles of , and differed slightly with the titles in the Basic Law which were , and respectively. SCS explained that , and etc. referred to the respective policy branches, whereas referred to the post-holders. It was considered more appropriate to link-up the two separate terms. This was also in line with the Chinese post-titles of Secretaries of Bureaux and Heads of Department such as , etc.

7.Referring to the Annex in PLC Paper No. CB(2) 177(01), Mr Andrew WONG Wang-fat opined that the titles in the Basic Law should be collectively called in Chinese, instead of as stated in the Annex. The termcould be more properly used to cover rank titles where there could be more than one title-holder who were on the same level of seniority, e.g. Directors of Bureaux.

IV.Policy on ex-civil servants setting up private business
(PLC Paper No. CB(2) 177(02)

8.Principal Assistant Secretary (Civil Service) (PAS(CS)) briefed members on the salient points of PLC Paper CB(2) 177(02). She advised that the main policy objective of the rules governing post-retirement / post-agreement employment of former civil servants was to avoid potential conflict of interest. In considering applications, each case would be assessed on its own merits, based on the criteria set out in paragraph 4 of the paper and having regard to the particular nature of the business or employment involved. PAS(CS) said that it was necessary to strike a balance such that the policy would neither be overly restrictive nor overly lenient.

9.While agreeing that experienced civil servants were a valuable resource who should be allowed to continue to serve and contribute to the society after serving in the Government, members doubted whether the monitoring rules would be strictly enforced in each case. Referring to the case recently reported of a consultancy company set up by a group of more than 70 former civil servants, members were concerned that the business of the company might constitute a conflict of interest with the persons' previous employment in the civil service, since many of the directors of the company were retired senior government officials previously involved in formulation of government policies.

10.In response, SCS and PAS(CS) informed members that the pensions legislation required retired civil servants to seek prior permission before entering into business, becoming a director or partner or taking up an employment as an employee within a specified period. The requirement, however, did not apply to shareholders of a company who did not participate in the actual running of the company. As far as the consultancy firm in question was concerned, those former civil servants who were directors of the company (and had retired for less than the specified period) had sought prior approval from the Government. The other persons involved were either shareholders of the company, or those in respect of whom the specified period for seeking permission had already lapsed. In respect of the directors who had applied, the Administration had carefully considered their applications and was satisfied that there was no conflict of interest and no impropriety in granting approval. The Advisory Committee on Post-retirement Employment also did not see the need to impose a sanitisation period.

11.PAS(CS) added that there was not a necessary correlation between the officers' accessibility to sensitive information while serving in the Government and the gaining of an unfair advantage over competitors when they subsequently pursued a career in the private sector. All civil servants, including officers who had already left the service, were bound by the Official Secrets Ordinance. The integrity of the officers concerned would also be taken into account in assessing and approving applications.

12.SCS further informed members that the business activities of the consultancy company in question involved the provision of a variety of consultancy services on a project basis. If a former civil servant other than the directors was involved in individual project, he would have to apply to the Government if his involvement commenced within the prescribed specified period.

13.In response to Mr CHENG Yin-tong's question, SCS dismissed as absolutely unfounded the allegation that the former senior civil servants set up the consultancy company on the advice of the former Hong Kong - British Government.

14.As regards consistency in handling applications, PAS(CS) advised that the Administration was working on a case by case basis to ensure that the required standards and criteria were met before approval was granted. Reference would be taken from precedent cases. Mr Ambrose LAU Hon-chuen suggested that more detailed guidelines could be drawn up, based on cases dealt with in the past and advice from the Advisory Committee on Post-retirement Employment. PAS(CS) pointed out that the setting of broad guiding principles had the advantage of allowing flexibility in handling applications based on the merits of individual case. She undertook to seek the views of the Advisory Committee on Mr LAU's suggestion.

Adm

15.Mrs Selina CHOW opined that there were problems with the current practice that prior permission was not required for former civil servants to become company shareholders. She said that, depending on the size of the shareholding, major shareholders did have a strong say in the running of a company's business. To achieve a better safeguard, Mrs CHOW suggested to extend the existing rules to cover all cases of post-retirement business activities.

16.Members opined that it was necessary to eliminate grey areas by defining more clearly post-retirement employment and business. In this connection, Mr Andrew WONG Wang-fat asked whether the following activities would come under the meaning of taking up employment or entering into business under the pensions legislation -

speculating in the stocks and properties markets;
providing capital for the running of a business by somebody else;
being engaged as an active partner or a non-executive director of a company;
other free-lance activities such as writing articles in a newspaper.

17.PAS(CS) advised that the pensions legislation did not restrict retired civil servants from engaging in stocks and shares trading and other speculative activities, but did require retired civil servants to seek prior permission for becoming a partner or director of a company. She undertook to give a written reply on whether the other activities were covered after seeking legal advice.

18.In reply to Mrs Selina CHOW's enquiry, PAS(CS) reported that in the past 10 years there were 344 cases of officers at directorate ranks seeking permission to take up employment after retirement, of which 72 were approved subject to certain conditions being imposed such as the specification of a sanitisation period. Sanitisation periods imposed so far ranged from one month to 18 months. Four applications had been rejected. PAS(CS) supplemented that under the pensions legislation, unsuccessful applicants could appeal for a review of the decision within a specified period. Officers who objected to any conditions imposed could also appeal to the approving authority or to the Chief Executive, as the case might be. PAS(CS) agreed to submit figures of such appeals for member's information.

Adm

19.Referring to Mrs Elsie TU's question, PAS(CS) said that the pensions legislation covered all civil servants who were on pensionable terms, including Model Scale I officers. In view of the fact that Model Scale I officers were junior rank officers, the Administration did not want to bind them unnecessarily with the application rules and blanket approval was therefore given as an administrative measure to allow these officers to take up post-retirement employment. Retired Model Scale I officers would not suffer pension suspension for not having sought prior approval for their post-retirement employment.

20.The Administration noted Mr Ambrose LAU Hon-chuen's suggestion to take reference from the experiences and practices of other countries as to how they handled the matter of post-retirement employment of civil servants.

V.Any other business

21.Mr LEE Kai-ming enquired of the progress of review on reimbursement of travelling expenses for civil servants working in the New Territories. DS(CS)2 replied that the allowance in question had a long history behind it and was based on considerations a large member of which were no longer relevant. The review would tie in with various other issues, among other things, the cost of travelling between the New Territories and the urban areas after the opening of the new Airport. DS(CS)2 said that the review was underway and the Panel would be updated of the progress in due course.

Adm

22.In response to the Chairman's question on the staff establishment of the Chief Executive (CE)'s Office, SCS informed members that a paper would soon be submitted to the Establishment Subcommittee of the Finance Committee to seek approval for the creation of additional posts in the CE's Office to strengthen support to the CE.

VI.Close of meeting

23.There being no other business, the meeting closed at 12:15 pm.

Provisional Legislative Council Secretariat
11 September 1997