Legislative Council

LC Paper No. CB(2)1712/98-99
(These minutes have been
seen by the Administration)

Ref : CB2/BC/14/98

Bills Committee on Factories and Industrial Undertakings (Amendment) Bill 1999

Minutes of Meeting held on Tuesday, 9 March 1999 at 10:45 am in Conference Room B of the Legislative Council Building

Members Present:

Hon Ronald ARCULLI, JP (Chairman)
Hon Kenneth TING Woo-shou, JP
Hon HO Sai-chu, JP
Hon Cyd HO Sau-lan
Hon LEE Cheuk-yan
Hon LEE Kai-ming, JP
Dr Hon LUI Ming-wah, JP
Hon HUI Cheung-ching
Hon CHAN Wing-chan
Dr Hon LEONG Che-hung, JP
Hon Howard YOUNG, JP
Hon Andrew CHENG Kar-foo

Member Absent :

Hon LEUNG Yiu-chung

Public Officers Attending:

Mr Herman CHO

Principal Assistant Secretary (Education and Manpower)

Mr Franco KWOK

Assistant Secretary (Education and Manpower)

Mr William SIU

Assistant Commissioner for Labour

Clerk in Attendance:

Mr LAW Wing-lok

Chief Assistant Secretary (2) 5

Staff in Attendance:

Mr Arthur CHEUNG

Assistant Legal Adviser 5

Miss Mary SO

Senior Assistant Secretary (2) 8

I. Election of Chairman

1. Mr Ronald ARCULLI was elected Chairman of the Bills Committee.

II. Meeting with the Administration

2. At the invitation of the Chairman, Principal Assistant Secretary (Education and Manpower) (PAS(EM)) briefed members on the salient points of the Bill. He said that despite some improvements in recent years, the industrial accident rates for Hong Kong had remained unsatisfactorily high, particularly for the construction industry. In order to promote safety training for workers, the Administration proposed that the Factories and Industrial Undertakings Ordinance (FIUO) be amended to make safety training mandatory and to expand the Commissioner for Labour (C for L)'s power to make regulations. As a first step, the requirement would be applied to the construction and container handling industries. Subject to the provision of a 14-month grace period, all persons employed on construction sites and container handling depots, except those engaged in office administration and activities unconnected with the construction and container handling work activities, would be required to receive basic safety training. Safety training courses provided by the Construction Industry Training Authority (CITA) and the Vocational Training Council (VTC) for construction and container handling workers respectively and the certificates issued to their graduates would be recognized by the Administration for the purpose of the new requirement. As at the end of February 1999, of the 80,000 estimated workers in the construction industry, a total of 58,227 workers had received training from CITA and had been issued with the safety certificate.

3. PAS(EM) pointed out that after the 14-month grace period, proprietors and contractors of construction work and container handling operations could only employ workers who were holders of a valid certificate. The workers concerned would also be required to carry the certificate with them while at work. The maximum penalties on the proprietors/contractors and workers for breaching the law were $50,000 and $10,000 fines respectively.

4. PAS(EM) further said that after the Bill had been passed into law, the Regulation introducing a safety management system in selected industrial undertakings would be made by the C for L under section 7 of the FIUO and subject to the approval of LegCo. He explained that the Administration proposed to introduce the Regulation to initially require proprietors or contractors in relation to construction sites, factories and other designated industrial undertakings with 100 or more workers, as well as construction projects with contract value of $100 million or more, to adopt ten of the 14 process elements of the safety management system and to carry out safety audits of their safety management system. Construction sites and industrial undertakings employing 50 to 99 workers each would be required to adopt eight of the 14 process elements of the safety management system and carry out safety reviews. Industrial undertakings employing less than 50 workers would be exempted for the time being. A phased implementation of these process elements would allow the industries being affected to get accustomed to the new system and to prepare for the additional elements. This would also allow sufficient safety practitioners and medical professionals to be trained to take up the additional functions.

5. In reply to Dr LEONG Che-hung's enquiry as to why the proposed mandatory safety training requirement would not bind the Government, PAS(EM) explained that this was because the scope of the FIUO only covered industrial undertakings. He pointed out that work undertaken by civil servants falling within the scope of the FIUO was very minimal. To his knowledge, only the Government dockyards and the vehicle repair workshops of the Electrical and Mechanical Services Department carried out this type of work. Although not bound by FIUO, the Government had put in place a set of internal regulations requiring civil servants to comply with the requirements of FIUO. PAS(EM) reiterated that when the Government work projects were contracted out to private contractors, the contractors were regulated by the FIUO.

6. Dr LEONG was of the view that the Administration should consider extending the proposed mandatory safety training requirement to the Government. Mr Kenneth TING echoed Dr LEONG's view.

7. Mr Howard YOUNG enquired whether there were any statistics to support the claim that the provision of safety training to workers had resulted in better safety records in construction sites. In reply, PAS(EM) said that the findings of a survey conducted by the University of Hong Kong several years ago showed that the lack of safety training was a major contributing factor to accidents in construction sites. Specifically, the survey revealed that only about 28% of the respondents, i.e. construction workers who had suffered injuries at work, had received some form of safety training. The fact that the average annual accident rates in public sector construction sites, where safety training requirement was in place, were 78% lower than the corresponding figures in the private sector sites where no safety training requirement was in place, was a testament to the merit of providing workers with basic safety training.The Chairman said that it would be useful for the Administration to come up with figures on the accident rates in the construction and container handling industries before and after the implementation of the mandatory safety training requirement, in order to gauge the effectiveness of such a requirement. PAS(EM) agreed to provide such information at a later date after the enactment of the Bill.

8. In reply to the Chairman's enquiry as to who initiated the idea of making safety training mandatory, PAS(EM) said that this was raised by the Hong Kong Construction Association about two years ago as contractors had difficulty in making their site workers to attend safety training course.

9. Mr Kenneth TING asked why the safety training course ran by the VTC for container handling workers was offered free of charge, whereas the course run by the CITA for construction workers was offered at a fee of $100 per person. In reply, PAS(EM) said that the reason why the VTC could offer its safety training course free of charge was because the cost of running the course could be absorbed within the VTC's existing resources. As regards the CITA's safety training course, the level of course fee to be charged was determined solely by the CITA. As he understood it, more than 50% of the cost of the CITA course was funded by the CITA.

10. The Chairman remarked that given that it was the Government's policy to require people to obtain a safety certificate before they could work in the construction and container handling industries, it was unfair that people had to pay a fee of $100 for attending the safety training course run by the CITA which was not funded by the Government, whereas the course run by the government-funded VTC was offered free of charge. He hoped that in drawing up its mandatory safety training requirement policy, the Administration would have regard to the fact that the construction costs had been on the rise during the past several years due to more stringent legislative requirements and the fact that the CITA's income came from levies from the construction industry.

11. Mr CHAN Wing-chan suggested and members agreed that the CITA should offer its safety training course free of charge. PAS(EM) said that he would convey members' request to the CITA.

Adm

12. Dr LUI Ming-wah said that employers should not be prosecuted if they had laid down clear operating instructions in the workplace in compliance with the requisite safety requirements, even though their workers failed to observe them thereby inflicting bodily injuries upon themselves or other persons. To achieve this, he suggested that section 6B(3) of FIUO should be amended to the effect that a person who failed to follow the operating instructions at work thereby endangering himself or other persons would also be regarded as having committed an offence and would be liable to the penalty stipulated in the section.

13. In response, PAS(EM) said that the Administration had taken steps to improve occupational safety in the existing legislation. He cited an example that the Construction Sites (Safety) (Amendment) Regulation 1998 made by the C for L under the FIUO. The purpose of the Amendment Regulation was to improve the safety of and protection for persons working at height.

14. Miss Cyd HO asked why there were no statistics on the number of accidents which occurred during work carried out in boatswain's chairs. In reply, Assistant Commissioner for Labour said that accident statistics compiled by the Labour Department were categorized by the cause of accident and not by the type of work under which an accident occurred.

15. At the request of the Chairman, PAS(EM) undertook to provide members with statistics on the accidents in the construction and container handling industries and factories in the first, second and third quarters of 1998.

16. Mr LEE Kai-ming said that given the high staff turnover in the container handling industry, he considered that the number of workers who needed to obtain the safety certificate would be higher than the figure of 10,000 estimated by the Administration. As such, he questioned whether the VTC had the capacity to provide safety training for workers of the container handling industry within the 14-month grace period. Mr Andrew CHENG shared Mr LEE's views.

17. PAS(EM) said that the proposed mandatory safety training requirement was primarily targeted at workers who were employed in small container storage yards and depots, since the four major container terminals which employed about 6,000 (or 38%) of the 16,000 workers in the container handling industry had been providing their workers with safety training acceptable for the purpose of the new requirement. Given the VTC's target to train 2,500 and 9,500 workers in 1998-99 and 1999-2000 respectively, the Administration was confident that the 14-month grace period should be adequate to enable the remaining 62% of the workers to obtain the safety certificate. PAS(EM) further said that the Administration was aware of the high turnover in the industry and would closely monitor the situation so that in the event that the VTC could not cope with the demand for the provision of safety training course, arrangements would be made with other organizations such as the Occupational Safety and Health Council to provide similar safety training courses.

18. In reply to Mr HUI Cheung-ching's enquiry as to whether the CITA was able to provide some 21,000 workers in the construction industry with safety training within the 14-month grace period, PAS(EM) said that there should be no difficulty in this regard as the CITA had the capacity to provide the training for a maximum of 40,000 construction workers each year.

19. Miss Cyd HO asked whether, as a result of expanding the power of the C for L to make regulations under section 7 of the FIUO, LegCo would no longer be able to scrutinize the new regulations on safety management before they came into force. PAS(EM) replied that the new regulations to be made by the C for L would be published as subsidiary legislation subject to the approval of LegCo.

20. In reply to the Chairman's enquiry as to whether the addition of designated industrial undertakings to the Fourth Schedule of the FIUO would be subject to the approval of LegCo, Assistant Legal Adviser 5 said that Clauses 2 and 6 of the Bill provided that the C for L could amend the Fourth Schedule by notice published in the Gazette. In his view, such notice would be subsidiary legislation subject to negative vetting by LegCo. PAS(EM) said that in order to address members' concern, consideration would be given to making amendments to the Fourth Schedule of the FIUO subject to positive vetting by LegCo.

21. Mr CHAN Wing-chan suggested that, as a large number of infrastructural projects would be launched soon, the Administration should publicize the new safety training requirement so that construction workers would be made aware of such a requirement. PAS(EM) said that the Administration would step up its publicity work following the enactment of the Bill. In the interim, the CITA had publicised its safety training course. According to the CITA, some of the students attending the course were newcomers to the construction industry.

22. Mr Andrew CHENG was of the view that industrial undertakings employing less than 50 workers should be required to adopt some core process elements of the safety management system. He further queried why industrial undertakings employing 50 to 99 workers each would be required to adopt eight of the 14 process elements, whereas those employing 100 or more workers each would be required to adopt ten of the 14 process elements.

23. In response, PAS(EM) said that it was the long-term objective of the Administration to extend the requirement to industrial undertakings employing less than 50 workers. Given that the concept of safety management system was relatively new in Hong Kong, the Administration considered it more appropriate to adopt a phased implementation of the process elements of the safety management system so as to allow time for the industries being affected to get accustomed to the new system and to prepare for the additional elements. PAS(EM) further explained that larger undertakings would be in a better position to adopt more process elements and carry out safety audits, as they could deploy more resources in the implementation of the safety management system.

24. Dr LEONG Che-hung questioned the appropriateness of using the number of workers and the contract value of construction projects as the basis for the adoption of a three-tier system in implementing the safety management system. He was of the view that smaller employers often lacked an understanding of safety management concept and they should therefore be required to adopt more process elements of the safety management system at their workplace.

25. In reply to Dr LEONG's enquiry as to whether the selected industrial undertakings could choose any of the eight or ten process elements for adoption, PAS(EM) said that the process elements that would be adopted were specified by the Administration.

26. At the request of Mr Andrew CHENG, PAS(EM) agreed to provide members with a written reply setting out the criteria adopted for demarcating the three-tier system for the purpose of implementation of the safety management system.	Adm
27. Mr LEE Cheuk-yan requested the Administration to provide members of the Subcommittee on regulations relating to occupational safety and health with information on the composition and terms of reference of safety committee stipulated in the relevant United Kingdom legislation, after the Factories and Industrial Undertakings (Safety Management) Regulation was made by the C for L. PAS(EM) agreed.	Adm
28. The Chairman suggested that consideration should be given to requiring proprietors of restaurants to adopt a safety management system at their restaurants, having regard to the fact restaurants had the second highest accident rates among the industrial undertakings in Hong Kong. Mr LEE Cheuk-yan concurred with the Chairman. In response, PAS(EM) said that the Administration would consider the Chairman's suggestion.	Adm

29. Mr Kenneth TING was of the view that if the industrial undertakings employing 50 workers had to hire a safety officer to implement the safety management system, the additional staff cost involved would be higher than the 0.2% and 0.1% of the annual operating cost of the affected firms in the industrial and construction sectors respectively as estimated by the Administration. PAS(EM) clarified that the estimated additional staff cost in hiring one additional safety training officer to perform new safety management duties applied to the larger industrial undertakings employing 100 or more workers. Under the existing legislation, such industrial undertakings were already required to hire a safety officer.

30. Dr LEONG asked whether the insurance industry concurred with the Administration's view that insurance premium would be lowered as there would be fewer deaths and injuries from industrial accidents as a result of the implementation of the safety management system. In reply, PAS(EM) said that the Administration had sought the views of the insurance industry about this issue following the publication of the Consultation Paper on the Review of Industrial Safety in Hong Kong in 1995. The views of the insurance industry then were that if the accident rates in the industrial and construction sectors dropped, they would be prepared to lower the insurance premium.

31. Mr LEE Kai-ming asked whether the CITA and the VTC had the capacity to provide sufficient number of training courses to cater for the training needs of workers when applying for renewal of safety certificate. PAS(EM) replied that the CITA and the VTC had taken this into account in the provision of safety training courses.

32. Mr LEE Kai-ming further said that applications for renewal of safety certificate should be expedited if workers could provide proof that they had been in continuous employment in the construction and container handling industries. In response, PAS(EM) said that holders of a safety certificate would only need to complete a refresher course and pass a test on safety at work in order to have their certificates renewed. The intention of the refresher course was to update workers on the latest technological developments in the construction and container handling industries. He further said that in order to expedite the processing of renewal applications, workers would be allowed to renew their certificates three months before the expiration date of their certificates. Mr LEE Cheuk-yan said that he hoped the Administration would exercise discretion in penalizing workers who genuinely forgot to carry the safety certificate with them while at work. PAS(EM) noted Mr LEE's view.

33. Mr LEE Cheuk-yan further asked the Administration to provide a breakdown by industry types of the 800 industrial undertakings employing 100 or more workers and the 700 industrial undertakings employing 50 to 99 workers. PAS(EM) undertook to provide such information.

Adm

III. Date of next meeting

34. Members agreed to hold the next meeting on Tuesday, 30 March 1999 at 8:30 am to continue discussion with the Administration.

35. The meeting ended at 12:50 pm.

Legislative Council Secretariat
15 April 1999