Legislative Council

LC Paper No. CB(2) 2830/98-99
(These minutes have been seen
by the Administration)

Ref : CB2/BC/20/98

Members present :

Hon CHAN Kam-lam (Chairman)
Hon LEE Kai-ming, JP
Hon SIN Chung-kai
Hon WONG Yung-kan
Hon Howard YOUNG, JP
Hon Mrs Miriam LAU Kin-yee, JP
Hon TAM Yiu-chung, JP

Member absent :

Hon FUNG Chi-kin

Public Officers attending :

Mr Richard YUEN

Deputy Secretary for Economic Services

Mr Roger TUPPER

Principal Assistant Secretary for Economic Services

Mr Peter KWOK

Assistant Secretary for Economic Services

Mr M C TSANG

Deputy Director of Marine

Mr K M LEE

Assistant Director of Marine

M K M VARGHESE

Assistant Director of Marine

Mr G FOX

Senior Assistant Law Draftsman

Clerk in attendance :

Mrs Sharon TONG

Chief Assistant Secretary (2)1

Staff in attendance :

Miss Anita HO

Assistant Legal Adviser 2

Miss Betty MA

Senior Assistant Secretary (2) 1

I. Meeting with deputations

Presentation from deputations

Meeting with Hong Kong & Kowloon Motor Boats & Tug Boats Association Ltd (the Motor Boats & Tug Boats Association)
(LC Paper No. CP 1231/98-99)

Notwithstanding the Motor Boats & Tug Boats Association supported in principle the proposed new statutory framework to regulate and control local vessels, it was of view that the regulatory measures in respect of pleasure vessels were inadequate. Views and comments from the Association were summarized as follows -

1. It welcomed the proposal to simplify the classification of vessels, to introduce greater transparency to the safety survey standards, to adopt a more effective vessel documentation system, to simplify the classification of Local Certificates of Competency, to establish a disciplinary mechanism, to extend the compulsory third party risks insurance and to establish a Local Vessels Advisory Committee (LVAC);

2. It welcomed in particular the proposal that vessels carried more than 60 persons plus crew were subject to the same survey standard equivalent to the one used for launches and ferry vessels;

3. To permit pleasure vessels to be hired or let under the terms of a charter agreement would result in adopting inconsistent safety standards for different classes of vessels used for commercial purpose. Pleasure vessels were subject to a more relaxed safety standards on the basis that they were used for private purposes. However, leasing of pleasure vessels for commercial activities was not an uncommon phenomenon. Such activities neglected the safety of passengers and infringed the business of launches and ferries operators who had invested huge capital in order to comply with the safety standards. The Motor Boats & Tug Boats Association considered that the phenomenon was unfair to the launches and ferries operators. As a result of the unfair competition, about half of the launches and ferries business were forced to come to a halt;

4. Under the existing arrangement, pleasure vessels owners were required to notify the Marine Department (MD) of a charter agreement within 72 hours of the activity. The arrangement opened a loophole in carrying out enforcement actions and instituting prosecutions against unlawful chartered service; and

5. The Motor Boats & Tug Boats Association cited some examples to illustrate that the safety of passengers was undermined while on board pleasure vessels which were used for commercial purpose as such vessels were exempted from mandatory safety inspection. Hence, it requested the Administration to tighten the safety requirement of pleasure vessels to be in line with those adopted for passenger carrying vessels if the former were used for commercial purpose. It urged the Administration to provide a clear definition of pleasure vessels so that they should be used for private purpose only and put in place a comprehensive and stringent licensing system in respect of all commercial vessels.

Meeting with Sai Kung Yacht Association (the Yacht Association)(LC Paper No. CB(2) 2068/98-99(01))

2. The salient points of the views of the Yacht Association were summarized as follows -

1. The proposal to permit pleasure vessels to be hired or let under the terms of a charter agreement and that only those pleasure vessels used for commercial purpose which involved the sale of tickets were in breach of the legislation was acceptable. Should pleasure vessels be totally prohibited from engaging in commercial activities, the livelihood of many fishermen would be seriously affected;

2. Members of the Yacht Association attached great importance to the safety of passengers on board pleasure vessels. Apart from taking out third party risks insurance, their members had taken out insurance polices in respect of passengers and coxswains; and

3. It strongly requested the Administration to retain the provisions in connection with the permission for pleasure vessels to be let or hired under charter agreements. It suggested that the Administration should consider introducing a separate category for chartered pleasure vessels.

Meeting with the Marine Excursion Association (the Excursion Association)(LC Paper No. CB(2) 2068/98-99(02))

3. The salient points of the views of the Excursion Association were summarized as follows -

1. The Excursion Association supported the proposal to simplify the existing classification of vessels into four new classes and to provide a clear definition of pleasure vessels in the Bill under which pleasure vessels were permitted to be let for hire or rewarded under the terms of a charter agreement. It, however, requested the Administration to consider the following -
   1. to spell out clearly in the legislation under what circumstances pleasure vessels were not permitted to be used for commercial purpose;

   2. to simply the notification system so that owners of pleasure vessels were not required to notify MD of a charter agreement on a case-by-case basis;

   3. to have a representative in LVAC; and

   4. to further subdivide Class IV - pleasure vessels into two types, i.e. vessels solely used for private pleasure purpose and pleasure vessels were hired or let for passenger carrying.

2. Members of the Excursion Association attached great importance to the safety and maintenance of the pleasure vessels. Given that excursion activities were mostly carried out from May to November every year, owners of pleasure vessels spent several months for the maintenance of vessels. The life-saving appliances and fire-fighting apparatus on these pleasure vessels were complied with MD's requirement in respect of passenger carrying vessels. Owners of these pleasure vessels also took out third party risk insurance for their vessels; and

3. According to the statistics released by MD, the major causes of marine accidents were owing to speeding, overloading or human error instead of arising from the structural problems of vessels.

4. A representative from the Excursion Association also raised questions on and sought clarification of the Bill (LC Paper No. CB(2) 2083/98-99(01)), for example, the role of "coxswain", the interpretation of "power" under the Bill.

Meeting with the Hong Kong & Kowloon Floating Fishermen Welfare Promotion Association
(LC Paper No. CB(2) 2068/98-99(02))

5. The Floating Fishermen Welfare Promotion Association supported in principle the legislative proposal. The salient points of the Association's submission were summarized as follows -

1. It proposed that reference to ships belonging to Her Majesty under section 10D(1)(a) in the Pilotage Ordinance (Cap 84) should be repealed;

2. It urged the Administration to consider raising the limit of the total horse power of fishing vessels from 350 to 700;

3. It requested the Administration to allow fishing vessels up to 100 feet to use typhoon shelters; and

4. To ensure the smooth operation of the regulatory measures, it suggested the Administration to consider setting up a monitoring committee.

Discussion with the deputationsSafety standard and inspection of pleasure vessels 6. Mrs Miriam LAU said that the safety of pleasure vessels was an area of concern in assessing whether pleasure vessels were suitable for commercial use. Given that divergent views were presented by the deputations, she requested for additional information on the prevailing safety standards for pleasure vessels. In response, the Motor Boats & Tug Boats Association said that no approval from MD was required in respect of the design and construction of pleasure vessels. Neither were pleasure vessels subject to mandatory periodic inspection and speed limit. MD would carry out an inspection of pleasure vessel only after the occurrence of an accident. Contrary to these exemption, launches and ferries were subject to the regulation of MD on the design and construction of vessels as well as a more stringent safety standard.

7. To facilitate the understanding of the relationship between the safety of vessels and the occurrence of accidents, Mrs Miriam LAU requested for statistics on marine accidents in the past three years according to types of vessels and causes, in particular whether any accidents were caused by the substandard construction of vessels. Deputy Director of Marine (DD of M) agreed to provide the requested information after the meeting.

Adm

(Post-meeting note : The requested information was circulated to members under LC Paper No. CB(2) 2181/98-99(01).)

8. Responding to Mr Howard YOUNG, DD of M said that all types of vessels, including pleasure vessels, were subject to a limit on the passengers capacity. As a general rule, the maximum number of passengers allowed on board pleasure vessels would be half of those on board other types of vessels of similar size.

9. Mrs Miriam LAU asked whether exempting pleasure vessels from safety inspection was in line with the international practice and whether pleasure vessels were permitted to be let or hired in overseas countries such as the United Kingdom and Australia; and if so, whether the leasing of pleasure vessels was subject to any regulatory mechanism. DD of M responded that there was no inspection and licensing requirements for pleasure vessels in the United Kingdom, Singapore and Australia. The Administration had made reference to the arrangement in these countries in drawing up the legislative proposal. It was noted that pleasure vessels were let or hired under charter agreements in these countries.

10. Mr TAM Yiu-chung asked whether there were any basic specifications regarding the construction of pleasure vessels. DD of M said that the construction of pleasure vessels was not subject to any specifications requirement. The relevant manufacturers would be able to prove the specifications of pleasure vessels in question. Nevertheless, pleasure vessels were required to comply with the requirements of life-saving appliances and fire-fighting apparatus, and they had to be operated by holders of Local Certificates of Competency. It was in line with the international practice.

11. Mr Howard YOUNG asked whether it could be assumed that a newly procured pleasure vessel would be in compliance with MD's safety requirement.

12. Responding to Mr Howard YOUNG, the Motor Boats & Tug Boats Association pointed out that in granting a pleasure vessel licence, MD did not carry out any site inspection to verify the information contained therein the application, it rested with a gentlemen agreement between the pleasure vessels manufacturer and MD that the former complied with MD's safety requirement in constructing a pleasure vessel. However, such agreement might be undermined for various reasons. For example, providing false information such as exaggerating the capacity of a pleasure vessel to obtain permission for carrying more passengers might endanger the safety of passengers on vessels. In addition, it was unreliable for MD to consider an application by simply making reference to photos provided by the applicant in respect of the specifications of a pleasure vessel in question. The Association was of the view that, as the specifications of pleasure vessels varied greatly, the Administration should consider verifying the specifications of pleasure vessels prior to issuing pleasure vessels licences.

13. Mrs Miriam LAU asked whether MD was aware that false information on the specifications of pleasure vessels was provided by the licence applicants. Assistant Director of Marine (Port Control) (AD of M (PC)) said that though such cases were identified, MD did not keep separate record in this regard. Nevertheless, the situation was not serious.

14. Mrs Miriam LAU opined that under the existing mechanism, the Administration did not verify the specifications of a pleasure vessel provided by an applicant in connection with his application for a pleasure vessel licence. She considered that the arrangement was too lax and the Administration should consider setting up a mechanism to verify the information provided by applicants. AD of M (PC) said that pleasure vessels were regulated under a comparatively relaxed policy because they were not subject to safety inspection. Nevertheless, MD did have a mechanism to verify the specifications of a pleasure vessels. For example, an applicant had to provide photos on the pleasure vessel in question. In addition, for pleasure vessels exceeded 24 meters in length, either a Marine Officer or an Inspector from MD would conduct site inspection. Moreover, given that the manufacturer concerned did not have any pecuniary interest in the specifications of a vessel, there was no reason why he would provide false information regarding the specifications of a vessel.

15. Regarding the safety of pleasure vessels, AD of M (PC) stressed that MD made no reference that pleasure vessels were unsafe. He reiterated that pleasure vessels were not subject to mandatory safety inspection because they were used for private pleasure purposes. Hence, MD had no information regarding the safety standards of individual pleasure vessels. He further said that should pleasure vessels be subject to safety inspection, an inspection fee would be resulted. It would be unfair to over 3 000 owners of pleasure vessels who used their vessels solely for private pleasure purpose. There were some 4 900 pleasure vessels and that members of the Excursion Association were only about some 200. While raising no objection to the proposal for mandatory safety inspection of pleasure vessels, AD of M (PC) said that it was believed that most pleasure vessels would not be able to meet the minimum safety standard.

16. The Excursion Association pointed out that for pleasure vessels used for commercial purpose, owners of these vessels did comply with the safety requirements. Their operating costs were comparatively lower than those of launches and ferry vessels because most of its members were operating in the form of family business. In addition, launches and ferry vessels were allowed to carry fare-paying passengers as well as to be leased under charter agreements, whereas pleasure vessels were not allowed to carry fare-paying passengers. The Association was of the view that launches and ferry vessels and pleasure vessels were indeed catering for different needs in the market.

17. Mr TAM Yiu-chung considered that launches and ferries operators were operated under rather difficult environment as they were required to comply with many regulations. DD of M said that the safety survey standards had already been lowered to the lowest acceptable standards in the recent years. In addition, launches and ferries operators could procure ready-made vessels in the market for passenger carrying purpose so that the operators did not need to submit construction design of vessels for the approval of MD. He reiterated that pleasure vessels were permitted to be used for commercial purpose only when they were hired or let under charter agreements.

Fishing vessels

18. Referring to the submission from the Floating Fishermen Welfare Promotion Association, Mr WONG Yung-kun asked whether the Administration would consider relaxing the limit on the engine power of fishing vessels and allowing the operation of fishing vessels by a combined coxswain holding appropriate certificates. In response, DD of M said that due consideration would be given to the suggestion having regard to an appropriate manning scale for the fishing vessel. Assistant Director of Marine (Shipping) added that though it was possible for one person to obtain all the licences for operating a vessel, holder of the combined licence might not be able to operate the engines and machines at different locations on the vessel at the same time. It was expected that more people could pass the examination for Local Certificates of Competency and obtain the certificates upon the implementation of the proposal to streamline the system of Local Certificates of Competency.

19. Citing the experience in Taiwan, Mr WONG Yung-kun said that the Administration might consider introducing a separate licence for sightseeing vessels so as to provide assistance to the declining fishing industry and to boost the tourist industry in Hong Kong.

Discussion with the AdministrationRegulation of pleasure vessels

20. The Chairman said that the leasing of pleasure vessels under charter agreements was indeed allowing pleasure vessels to be used for commercial purpose but exempting them from safety survey inspection. Given that the deputations from the trade raised no objection to be regulated under certain safety requirements, the Chairman asked whether the Administration would consider subdividing Class IV vessels into two different categories, i.e. pleasure vessels used solely for private pleasure purpose and pleasure vessels to be let or hire under the terms of a charter agreement.

21. Mr LEE Kai-ming said that he agreed with the Administration's view that if pleasure vessels were used for private purpose, they could be subject to a less stringent safety standard than that adopted for launches and ferry vessels. However, having regard to the fact that some pleasure vessels did engage in commercial activities, he considered that the Administration should assume the responsibility in safeguarding the safety of passengers on board chartered pleasure vessels. In order to strike a balance between imposing unnecessary regulation and safeguarding passenger safety, Mr LEE echoed with the Chairman's suggestion on subdividing Class IV vessels into two different categories.

22. DD of M responded that having given due consideration to the feasibility of introducing a separate category for chartered pleasure vessels under Class I vessels, the Administration considered that the idea was not feasible. To provide flexibility for the industry, MD was actively considering revising the existing notification requirement of a charter agreement. Under the proposed arrangement, owner of a chartered pleasure vessel was not required to notify MD 72 hours prior to the activity, instead he would be required to display the relevant charter agreement on the pleasure vessel together with a valid third party insurance policy. Prosecution would be brought about if the owner of pleasure vessel failed to produce the relevant charter agreement or third party risk insurance policy when being inspected by personnel from MD. The proposal was targeted at tackling the enforcement difficulties faced at present. DD of M added that should chartered pleasure vessels carry fare paying passengers, it would be in breach of the legislation.

23. Mr TAM Yiu-chung considered that the proposal to require displaying charter agreements on pleasure vessels was acceptable.

24. Responding to the Chairman, DD of M said that the requirement for displaying charter agreements on pleasure vessels had yet to be discussed by LVAC. Under the proposed arrangement, owners of pleasure vessels would not be required to notify MD of any charter agreements. Deputy Secretary for Economic Services (DSES) added that the implementation details of the proposal would have to be worked out by LVAC in consultation with the trade.

Scope of activities on chartered pleasure vessels

25. Mrs Miriam LAU considered that the Administration should spell out clearly in the legislation about the specific activities which were permitted on chartered pleasure vessels. DSES said that launches and ferry vessels were built and designed for carrying fare paying passengers for regular routes. Thus, the safety standards in place were more stringent than other types of vessels. Given that pleasure vessels were used for private purposes, owners of the pleasure vessels should assume the responsibility of the safety of their vessels. The proposals contained in the Bill were in line with the current practice. It only sought to provide a clearer definition in respect of "pleasure vessels" and to simplify the prosecution procedures when pleasure vessels were engaged in unlawful commercial activities. Should pleasure vessels be subject to the same stringent safety standard of Class I vessels, it would increase the financial burden of owners of pleasure vessels.

26. DSES further said that pleasure vessels were permitted to be let or hired on the basis that most of them were not in use frequently. However, the Administration did not want to complicate the existing legislation on the regulation of pleasure vessels. Thus, pleasure vessels were permitted to be let or hired under charter agreements. He stressed that it was in breach of the law should pleasure vessels be used for carrying fare paying passengers.

27. Responding to Mr Howard YOUNG, DD of M clarified that a charter agreement was referring to an agreement made between one single lessee and the owner of a pleasure vessel.

28. Responding to Mr LEE Kai-ming's enquiry about the competition between launches and pleasure vessels, DSES said that launches and ferry vessels were built and designed for purposes different from pleasure vessels which were, in fact, meeting different needs in the market. AD of M (PC) added that launches and ferry vessels were subject to safety inspection by MD. In addition, the engagement of master and coxswain accounted for a higher operating expenses for launches and ferry vessels.

Codes of Practice

29. Mr LEE Kai-ming asked whether LVAC would consider formulating a set of regulatory guidelines by the trade itself so that they would be able and willing to comply with. Mr LEE considered that the responsibility for passenger safety should be well defined in the Bill having regard to the fact that pleasure vessels were not subject to safety inspection.

30. DSES responded that a more stringent safety standard was imposed on launches and ferry vessels because of the large number of passengers involved. It was indeed difficult to differentiate physically whether a pleasure vessel was being used for private pleasure purpose or for leasing. Nevertheless, LVAC would try to work out the guidelines in consultation with the trade. MD would also carry out random inspections on board pleasure vessels. DD of M added that after formulating the guidelines by LVAC, a code of practice would be issued to the trade and incorporated in the relevant regulations. MD would bring about prosecutions should any violation of the code of practice be spotted during the random inspections.

31. While supporting the proposal to issue a code of practice to the trade in respect of using pleasure vessels for commercial purpose, Mrs Miriam LAU said that the Administration should well inform the trade of the inspection standards as there was some confusion over different classes of licences and the respective inspection standards required. Moreover, the arrangement should be fair to Class I vessels operators and owners of pleasure vessels as well as safeguarding the safety of passengers on board these vessels. DSES said that the Administration had no intention to interrupt the business of chartered pleasure vessels, the random inspections of chartered pleasure vessels were aimed at arousing the awareness of the trade to improve the safety standards of pleasure vessels. The Administration considered that the existing operation satisfactory. Thus, the Bill only sought to provide a clearer definition of "pleasure vessels".

Membership of the Local Vessels Advisory Committee

32. Mrs Miriam LAU requested the Administration to consider appointing representative(s) from the launches and ferries operators as well as the excursion trade to LVAC. Mr WONG Yung-kan opined that given there were some 6 000 fishing vessels in Hong Kong, he urged that the Administration should reflect the appropriate proportion of different types of vessels in appointing members to LVAC and its subcommittees.

33. In response, DD of M said that the tenure of the Provisional Local Vessels Advisory Committee would be ended at the end of this year. LVAC would be established upon the enactment of the Bill. He said that the Administration would take into account members' views in appointing members to LVAC and its subcommittees.	Adm

II. Date of next meeting

34. The next meeting would be scheduled for 2 June 1999 at 8:30 am.

35. The meeting ended at 6:35 pm.

Legislative Council Secretariat
7 July 1999