OFFICIAL RECORD OF PROCEEDINGS
Wednesday, 25 November 1998
The Council met at half-past Two o'clock

MEMBERS PRESENT:

THE PRESIDENT
THE HONOURABLE MRS RITA FAN, G.B.S., J.P.

THE HONOURABLE KENNETH TING WOO-SHOU, J.P.

THE HONOURABLE JAMES TIEN PEI-CHUN, J.P.

THE HONOURABLE HO SAI-CHU, J.P.

THE HONOURABLE CYD HO SAU-LAN

THE HONOURABLE EDWARD HO SING-TIN, J.P.

THE HONOURABLE ALBERT HO CHUN-YAN

THE HONOURABLE MICHAEL HO MUN-KA

DR THE HONOURABLE RAYMOND HO CHUNG-TAI, J.P.

THE HONOURABLE LEE WING-TAT

THE HONOURABLE LEE CHEUK-YAN

THE HONOURABLE MARTIN LEE CHU-MING, S.C., J.P.

THE HONOURABLE ERIC LI KA-CHEUNG, J.P.

THE HONOURABLE LEE KAI-MING, J.P.

DR THE HONOURABLE DAVID LI KWOK-PO, J.P.

THE HONOURABLE FRED LI WAH-MING

DR THE HONOURABLE LUI MING-WAH, J.P.

THE HONOURABLE NG LEUNG-SING

PROF THE HONOURABLE NG CHING-FAI

THE HONOURABLE MARGARET NG

THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, J.P.

THE HONOURABLE RONALD ARCULLI, J.P.

THE HONOURABLE MA FUNG-KWOK

THE HONOURABLE JAMES TO KUN-SUN

THE HONOURABLE CHEUNG MAN-KWONG

THE HONOURABLE AMBROSE CHEUNG WING-SUM, J.P.

THE HONOURABLE HUI CHEUNG-CHING

THE HONOURABLE CHRISTINE LOH

THE HONOURABLE CHAN KWOK-KEUNG

THE HONOURABLE CHAN YUEN-HAN

THE HONOURABLE BERNARD CHAN

THE HONOURABLE CHAN WING-CHAN

THE HONOURABLE CHAN KAM-LAM

DR THE HONOURABLE LEONG CHE-HUNG, J.P.

THE HONOURABLE MRS SOPHIE LEUNG LAU YAU-FUN, J.P.

THE HONOURABLE LEUNG YIU-CHUNG

THE HONOURABLE GARY CHENG KAI-NAM

THE HONOURABLE SIN CHUNG-KAI

THE HONOURABLE ANDREW WONG WANG-FAT, J.P.

DR THE HONOURABLE PHILIP WONG YU-HONG

THE HONOURABLE WONG YUNG-KAN

THE HONOURABLE JASPER TSANG YOK-SING, J.P.

THE HONOURABLE HOWARD YOUNG, J.P.

DR THE HONOURABLE YEUNG SUM

THE HONOURABLE YEUNG YIU-CHUNG

THE HONOURABLE LAU CHIN-SHEK, J.P.

THE HONOURABLE LAU KONG-WAH

THE HONOURABLE LAU WONG-FAT, G.B.S., J.P.

THE HONOURABLE MRS MIRIAM LAU KIN-YEE, J.P.

THE HONOURABLE AMBROSE LAU HON-CHUEN, J.P.

THE HONOURABLE EMILY LAU WAI-HING, J.P.

THE HONOURABLE CHOY SO-YUK

THE HONOURABLE ANDREW CHENG KAR-FOO

THE HONOURABLE SZETO WAH

THE HONOURABLE TIMOTHY FOK TSUN-TING, J.P.

THE HONOURABLE LAW CHI-KWONG, J.P.

THE HONOURABLE TAM YIU-CHUNG, J.P.

THE HONOURABLE FUNG CHI-KIN

DR THE HONOURABLE TANG SIU-TONG, J.P.

MEMBER ABSENT:

THE HONOURABLE DAVID CHU YU-LIN

PUBLIC OFFICERS ATTENDING:

THE HONOURABLE MRS ANSON CHAN, J.P.
THE CHIEF SECRETARY FOR ADMINISTRATION

THE HONOURABLE DONALD TSANG YAM-KUEN, J.P.
THE FINANCIAL SECRETARY

THE HONOURABLE ELSIE LEUNG OI-SIE, J.P.
THE SECRETARY FOR JUSTICE

MR CHAU TAK-HAY, J.P.
SECRETARY FOR TRADE AND INDUSTRY

MR DOMINIC WONG SHING-WAH, J.P.
SECRETARY FOR HOUSING

MR RAFAEL HUI SI-YAN, G.B.S., J.P.
SECRETARY FOR FINANCIAL SERVICES

MR JOSEPH WONG WING-PING, G.B.S., J.P.
SECRETARY FOR EDUCATION AND MANPOWER

MR KWONG KI-CHI, G.B.S., J.P.
SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING

MISS DENISE YUE CHUNG-YEE, J.P.
SECRETARY FOR THE TREASURY

MR LAM WOON-KWONG, J.P.
SECRETARY FOR THE CIVIL SERVICE

MR PATRICK LAU LAI-CHIU, J.P.
SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS

CLERKS IN ATTENDANCE:

MR RICKY FUNG CHOI-CHEUNG, J.P., SECRETARY GENERAL

MS PAULINE NG MAN-WAH, ASSISTANT SECRETARY GENERAL

MR RAY CHAN YUM-MOU, ASSISTANT SECRETARY GENERAL

PAPERS

The following papers were laid on the table pursuant to Rule 21(2) of the Rules of Procedure:

Subsidiary Legislation

L.N. No.

Designation of Libraries (Urban Council Area) (No. 4) Order 1998	354/98
Public Health and Municipal Services Ordinance (Public Pleasure Grounds) (Amendment of Fourth Schedule) (No. 5) Order 1998	355/98
Food Business (Urban Council) (Amendment) (No. 2) Bylaw 1998	356/98
Frozen Confections (Urban Council) (Amendment) Bylaw 1998	357/98
Milk (Urban Council) (Amendment) Bylaw 1998	358/98

ORAL ANSWERS TO QUESTIONS

PRESIDENT(in Cantonese): Questions. I would like to remind Members that question time normally does not exceed one and a half hours, with each question being allocated about 15 minutes on average. When asking supplementaries, members should be a concise as possible. They should not ask more than one question, and should not make statements.

Regulations for Civil Servants on Duty Visits

1. MR CHAN KAM-LAM (in Cantonese): Madam President, it is reported that the Director of Social Welfare chose to take indirect flights on duty visits overseas and took opportunity to take leave during the period between July and August this year, incurring an extra amount of public money on air tickets as compared with the fare for taking the most direct routes. In this connection, will the Government inform this Council:

(a) of the regulations governing the routes and flights to be taken by civil servants on duty visits outside Hong Kong;

(b) of the regulations governing the vacation arrangements for civil servants before or after their duty visits outside Hong Kong or during the period of their duty visits; and

(c) where a civil servant on duty visits outside Hong Kong stops over in some other places for private business or vacation, thus incurring more expenses on air tickets than flying on direct routes, whether the civil servant in question will be required to bear the extra amount incurred; if not, the reasons for it and whether the Administration has any plan to amend the relevant regulations?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, up to 30 June 1998, duty passages had to be purchased in accordance with an Air Passage Agreement which Government had entered into with two airline companies. With effect from 1 July 1998, the Air Passage Agreement lapsed and new procurement arrangements came into force.

I now respond to Mr CHAN Kam-lam's question as follows:

(a) Under the new procedures, departments are required to follow the Stores and Procurement Regulations when purchasing air tickets for duty travel. Under the regulations, departments have to obtain at least two quotations for passages with a value not exceeding $20,000 and at least five quotations if the value exceeds $20,000. In cases where an offer other than the lowest is to be accepted or less than the minimum number of quotations are received, the officer accepting the selected offer must be at or above the rank of D2. In practice, departments are required to choose the offer which is the most cost effective and best meets their itinerary requirements.

(b) On the condition that the duty commitments can be fully met and that the visit schedule will not be unduly affected, officers may take leave to attend to personal matters during duty visits outside Hong Kong. Government will only meet the expenses directly related to the duty visits.

(c) Departments arrange duty passages having regard to itinerary requirements and cost effectiveness. Under the present regulations, departments may allow an officer to modify the original passage arrangements provided that the following conditions are fully met:

(1) all additional expenses arising from variations for private purpose must be borne by the officer;

(2) savings arising from the purchase of cheaper air tickets must not be used to subsidize the officer's private travel;

(3) the modified passage should still suit the original purpose of the duty visit.

MR CHAN KAM-LAM (in Cantonese): Madam President, the Director of Social Welfare, in this incident, chose to take a circuitous route flying directly from Hong Kong to London and then from London to the relevant destination. Does this constitute a breach of the regulations?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, we have studied the Director's duty visit itinerary from Hong Kong to Israel. We have also taken into account that the air ticket was procured for him in accordance with the old Air Passage Agreement. Under the arrangement at that time, there was no requirement for the lowest offer to be accepted. At that time, when departments arranged passages for officers, they mostly preferred transit flights arranged by the two airlines which had entered into Air Passage Agreement with the Government. In the case of the Director, there were only airlines running European routes providing daily transit flights to Israel, where he was going to attend a meeting. Having considered all the circumstances, we are of the opinion that there is no evidence to show that he chose the route because of a private purpose.

MR CHEUNG MAN-KWONG (in Cantonese): Madam President, in the Government's reply, it is clearly stated that the Government would only meet the expenses directly related to the duty visits and all additional expenses arising from variations for private purpose must be borne by the officer. If the regulation has been clearly spelt out and the Director of Social Service has also admitted that part of his journey is for private purpose, why does the Secretary for the Civil Service not ask him to refund the Government the cost of the first-class passage via England?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, as I have just explained, we have studied all relevant information and think that there is no evidence to show that the Director of Social Service chose the route for private purpose. It is because officers of the Social Welfare Department who were on business trips with him that day also chose airlines running European routes and took transit flights from Europe to Israel. They did so because only airlines running European routes provide transit arrangements everyday. Under such circumstances, our overall judgment is that it is hard to say that the route was particularly arranged for private purpose.

MR CHEUNG MAN-KWONG (in Cantonese): Madam President, one point the Secretary for Civil Service has not answered. Why did he not admit that Mr LEUNG Kin-pong's travel to England was for private purpose in spite of Mr LEUNG's clear statement that his two days' stay in England was for personal reason? If that is the case, the Secretary has failed to answer the question I asked just now as to why the Government did not claim back the cost of the first-class passage via England which was taken for private purpose?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, as I have just explained, airlines running European routes were chosen in order to take transit flights to Israel because these airlines provided transit flights everyday. Hence the Government considered such an arrangement acceptable. The Director of Social Service, after having chosen the airline, decided to stop over so that he could take two days' leave. This is a decision of his own. As we considered his choice of airline running European routes acceptable, we thought that his two days' leave during the trip would not incur additional expenses to the Government.

MR TAM YIU-CHUNG (in Cantonese): Madam President, the Secretary for the Civil Service admitted to the media yesterday that there were loopholes in the guidelines concerning air passage arrangements for civil servants. He remarked that the Government had also intended to review and revise them as soon as possible. When will the review be completed and what is the scope of the review? Will the findings of the review be submitted to the Panel on Public Service of this Council?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, we can clearly see from this incident that there is a grey area: if the flight exceeds six hours, the Government will allow the passage to be upgraded by one class. But there is no provision in the guidelines as to under what circumstances the class of passage can or cannot be upgraded, hence giving rise to a grey area. We will clarify the grey area as soon as possible. For instance, if an officer on duty visits chooses to take leave during the business trip instead of carrying out his duty immediately, he is not allowed to upgrade the class of passage even though the flight exceeds six hours.

Madam President, as a matter of fact, the scope of the forthcoming review will be much wider. We will consider which rank of officers should take which class of passage under the present circumstances. We will conduct a comprehensive review and will, according to our long-established practice, brief the relevant Legislative Council Panel after results have been obtained.

MR JAMES TO (in Cantonese): Madam President, I have some information at hand about flights a few days before the scheduled meeting of the Director. It shows that first-class passage from Hong Kong to Israel via Rome or Frankfurt costs only $60,000. What is more, there are flights everyday. Can the Secretary tell us whether the Government knows it? Will the Government look into matter to see if the judgment at that time was correct? As the Director of Social Service chose to stay in London instead of Rome or Frankfurt for transit or vacation purpose, does it show that his vacation has taken priority in the determination of his route, resulting in public money being wasted?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, we have checked details about flights to Israel offered by other airlines. The Government understands that apart from British Airways, several European airlines, including Air France and Swissair, also provide transit flights to Israel everyday. However, as I explained in my reply to this question, the old Air Passage Agreement did not require that civil servants to accept the lowest offers, mainly because of our concern about the arrangements for business trips and whether a suitable schedule could be arranged under the Agreement. Hence, the Government considers that there is no sufficient evidence to show that the Director's vacation has taken priority in determining his route. Madam President, I would like to stress that such problem should never recur because the guidelines which came into effect on 1 July clearly stipulates that departments should obtain quotations and accept the lowest offers except under special circumstances.

MR LAU KONG-WAH (in Cantonese): Madam President, in order to avoid giving the public an impression that the government officials protect one another, will the Secretary for the Civil Service make public the report submitted by the Director of Social Service? The Director has now decided to refund the Government, does this imply that he has violated the regulations? If yes, why is he not subject to internal disciplinary action?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, the Director's report is only part of the information and evidence under our consideration. The Civil Service Bureau is willing to submit papers to the Panel on Public Service regarding our judgment, reasons and background information which has been considered in order to give a full account and explain our reasoning to this Council.

As to whether there is violation of regulations, we have to take into account the grey area in the civil service guidelines concerning the upgrading of passages for flights exceeding six hours. Hence, we think that this should not be regarded as a breach on the principle that the benefit of the doubt is given to the defendant. The Director of Social Service took the initiative in giving an account of the incident due to his respect for the spirit of the guidelines. He also took the initiative in refunding the Government the price difference between the first-class passage and the business passage from Hong Kong to Israel.

MR LAU KONG-WAH (in Cantonese): Madam President, the Secretary has not answered whether the Director has committed a breach. If the Director has not committed a breach, why did he refund the Government the price difference? If the Secretary's argument is valid, does it mean that the Director is not required to refund the Government at all?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, strictly speaking, the Director has not technically committed a breach. But having learned about the spirit of the guidelines, he took the initiative in refunding the Government as a gesture of respect for the spirit of the guidelines.

MR HOWARD YOUNG (in Cantonese): Madam President, my question is mainly concerned about part (a) of the reply. If the selected offer is not the lowest one, how can the Government ensure that quotations received are obtained in an objective and fair manner? As a member of the industry, I understand that many air tickets are subject to various restrictions. Quotations may be very low but the air tickets are impractical. Does the Government require that departments should obtain quotations for air tickets which are not bound by any additional restrictions?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, our colleagues' foremost concern in arranging duty visits is to make sure that seats have been firmly booked. In other words, seats are surely available once bookings are confirmed. We rarely book air tickets which are subject to availability of seats because in case the trip could not start as scheduled, meetings will certainly be affected. Hence, departments are required to obtain quotations under reasonable scheduled arrangements rather than to get the lowest possible price.

MR HOWARD YOUNG (in Cantonese): Madam President, perhaps the Secretary for the Civil Service has misunderstood my question, which is not simply related to the booking of seats ......

PRESIDENT (in Cantonese): Mr YOUNG, which part of your supplementary question has not been answered? Please concentrate on that part only.

MR HOWARD YOUNG (in Cantonese): Madam President, do quotations obtained include air tickets which are not bound by additional restrictions such as no alteration of dates?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, it is up to the departments to decide on such details with regard to the itinerary of the duty visits. In general, it is rare that there is no scheduled meeting arrangements for officers on duty visits. They will usually make visits even though they do not attend any meeting at all. So, there must be a schedule. For this reason, departments would usually choose air tickets which are not bound by many restrictive provisos. However, if the schedule can be modified so as to accommodate these air tickets, we, of course, hope that the departments can make their choices in a most cost-effective way.

MR LEE WING-TAT (in Cantonese): Madam President, the general expenditure policy of the Government adheres to the principle of economy and cost-effectiveness. In view of the Director's failure to choose the most cost-effective and most economic means of taking flights even though his act is not regarded as a breach of regulations, does the Secretary consider that the Director, (as a civil servant at the directorate grade) has made a mistake in professional judgment which he should not have made as an administrative officer of that rank?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, although the old Air Passage Agreement did not require that officers had to obtain quotations and select the lowest offer, we, by common sense, do require departments to make their final decision on the selection of air tickets in a cost-effective way. Since duty visits are often bound by many restrictions, the final decision would nevertheless rest with the department heads, especially we have already delegated the power to them. We have to rely on the best judgment of the department heads and their colleagues who are working for them to decide on which type of air tickets to be bought within the available resources. In response to a point raised by Mr LEE, we agree that cost-effectiveness is a major consideration even though it is not spelt out in the guidelines.

PRESIDENT (in Cantonese): Mr LEE, would you please point out which part of your supplementary question has not been answered.

MR LEE WING-TAT (in Cantonese): Madam President, the Secretary for Civil Service has not answered whether the Director had made a professional error which should not be made by an administrative officer at the directorate grade.

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, this is not a question concerning whether he is an administrative officer or non-administrative officer. All department heads are required to consider the element of cost-effectiveness. Despite the grey area in the regulations, the Civil Service Bureau also considers that there has been a misjudgment.

PRESIDENT (in Cantonese): Members of this Council, although we have spent 17 minutes on this question, there are still many Members who are also interested in raising questions. I will allow you a few more minutes on this question.

MR YEUNG YIU-CHUNG (in Cantonese): Madam President, the Secretary for the Civil Service mentioned that there is a grey area in the guidelines for procuring air tickets. When did the Secretary come to realize the existence of such a grey area? Was it after the media coverage of the "Mr LEUNG Kin-pong incident"?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, the guidelines were revised after making reference to arrangements in other countries' following a comprehensive review in 1992. As far as I know, no major problem has ever been encountered since the guidelines came into operation. The incident has obviously exposed the existence of a grey area concerning the arrangements for flights exceeding six hours. So, we will conduct a review as soon as possible.

MR MARTIN LEE (in Cantonese): Madam President, when the Government review the matters, will it consider whether first-class passage is in fact quite lavish? If the officers do not drink the wine provided, it seems to be too wasteful but if they do, it will affect their performance in carrying out the duty visits. Has the Government considered that passage in the business class is in fact comfortable enough if officers do not have to work immediately on the day of arrival?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, in our review in 1992, all factors had been taken into consideration which included duty visit arrangements by other countries or regions for their officers of similar ranks, our practice in the past and the duration of the entire flights. This time, we will also conduct a comprehensive review, but the point concerning drinking of wine may not be included.

MISS EMILY LAU (in Cantonese): Madam President, does the Secretary for the Civil Service know why the incident has caused such a tremendous commotion in the community? What is its impact on the reputation of the high-ranking officials?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, we understand that the public is very much concerned about this incident. I also fully understand that the public is not only concerned about the several tens of thousands of dollars spent on the passages. Rather, the public is concerned about whether high-ranking officials have abused powers or benefits. I have also openly urged all my colleagues that the higher their ranks are, the more the effort they should make to set an example. Since there is a grey area, they should try to clarify it if they are not sure. If no matter how hard they have tried they are still uncertain, they had better not to do it. We have fully agreed to that. (Laughter)

MR SIN CHUNG-KAI (in Cantonese): Madam President, as renumerations payable by the Government are linked to the private sector, have comparisons been made between the current government policy on duty visits, such as the choice of first-class or business passages, and the practice of private corporations in similar matters?

SECRETARY FOR THE CIVIL SERVICE (in Cantonese): Madam President, in our review in 1992, we had made reference to the arrangements in some major private corporations. But it has been some years since then and we will be collecting relevant information again. In fact, we are now collecting such information in order to take them into consideration in the forthcoming review.

Privatization of Government Assets

2. MISS CHOY SO-YUK (in Cantonese): Madam President, in its reply to a question raised by this Council on 11 November, the Government said that it would give careful and serious consideration to the possibility of privatization, either in part or in whole, of some of its assets through selling or listing on the Hong Kong Stock Exchange. In this connection, will the Government inform this Council:

(a) of the criteria for consideration in deciding what assets will be privatized;

(b) whether consultancy studies will be conducted for the privatization of individual assets; if so, of the central issues of such studies; and

(c) whether, when deciding to privatize the assets, a mechanism will be in place to ensure that public interest will not be jeopardized as a result of the need to seek maximum returns for shareholders of these assets after their sale or privatization?

SECRETARY FOR THE TREASURY (in Cantonese): Madam President,

(a) Before the Government decides whether any assets are to be privatized, we will have to address a number of questions, amongst them the following:

(i) do such activities rightly belong in the public sector in this day and age;

(ii) is there sufficient demand in the market for this type of asset to make privatization worthwhile;

(iii) will privatization generate economic and other benefits for Hong Kong;

(iv) will privatization result in improvements in such areas as operating standards, efficiency, safety, quality of service and so on;

(v) can we strike an acceptable balance between the interests of potential investors and those of consumers;

(vi) what are the implications for staff and how can these be responsibly addressed; and

(vii) the financial benefits likely gained by the Government in terms of proceeds from privatization and reduced requirements for capital investment in future.

(b) We have yet to formulate plans to privatize government-owned assets. If such a decision is made, the question of whether or not consultancy studies would need to be conducted for such privatizations and the central issues involved in those studies would depend on the circumstances of individual cases.

(c) As I mentioned earlier, one of the key considerations for privatization is the need to strike a sensible balance between the interests of investors and those of consumers. We certainly agree with the principle that public interest should not be jeopardized by the maximization of returns to shareholders upon any privatization. The mechanism to achieve the implementation of this principle would depend on the circumstances of individual cases.

MISS CHOY SO-YUK(in Cantonese): Madam President, when the Secretary answered part (b) of the question, she said that the Government had yet to decide whether government assets would be privatized. Will the Secretary inform this Council about when will such a decision be made?

SECRETARY FOR THE TREASURY(in Cantonese): Madam President, we do not have a fixed timetable and I do not think that we should set a time limit for such plans. While we have never ruled out the possibility of privatizing government assets, we do not have any plans to privatize a certain government asset right now. We will continue to review and consider issues in this aspect.

MR JASPER TSANG(in Cantonese): Madam President, the Government says at present that it does not have any plan to privatize its assets, is it because the Government has already made studies on some of its assets based on the seven questions put forward by the Secretary just now and come to the conclusion that privatization should not be carried out, or at least should not be carried out for the moment? Or, is it because the Government has actually never considered the issue of privatization? If the Government has never taken privatization into consideration, what are the reasons? If it has made studies on some of its assets but found that they are not suitable for privatization, what are they?

PRESIDENT(in Cantonese): Honourable Members, just now Mr James TO asked a lot of "whys" in his supplementary question. Now Mr Jasper TSANG again keeps on asking "why" questions. I have said at the very beginning that only one question can be raised in a supplementary question, why then did I allow these two Honourable Members to pose their questions in this way? I would like to explain to Members briefly that it is because these questions are all inter-related and relevant to each other that permission is given for the Members to do so.

SECRETARY FOR THE TREASURY(in Cantonese): I am not sure if I can remember all the "why" questions asked by Mr TSANG, (laughter) but I will try my best to answer them. What I wanted to point out in part (a) of the main reply was that the Government would take different factors into account before considering the privatization of any of its assets. The seven questions I cited were just some of the examples and they are not exhaustive. We think that these seven factors are relatively more important and general. However, up to now, we have not thought of privatizing any government asset, neither have we considered the privatization of any government asset based on these seven questions.

PRESIDENT(in Cantonese): Mr TSANG, which part of your supplementary question has not been answered? Please focus your question on that part.

MR JASPER TSANG(in Cantonese): Why? (Laughter)

PRESIDENT(in Cantonese): "Why" what?

MR JASPER TSANG(in Cantonese): Why has the Government not considered it?

SECRETARY FOR THE TREASURY(in Cantonese): Madam President, we do not feel that there is a need for considering privatization up to now. I said earlier that we would keep on reviewing and considering issues in this aspect. Generally speaking, we would first assess the present assets owned by the Government and find out those that can be privatized very easily and are apparently already economically effective, as these assets would convince us that there is a need to speed up their privatization. However, up to now, we have not found any such government asset that can be privatized very quickly and we have not made any thorough analysis of the economic effectiveness of any government asset yet. We do not think there is a need to privatize a certain government asset in the immediate future.

MR HUI CHEUNG-CHING(in Cantonese): Madam President, it is reported that the Government is considering listing the Mass Transit Railway Corporation (MTRC). Is it the case? If this is the case, when will the listing take place?

SECRETARY FOR THE TREASURY(in Cantonese): Madam President, the Government itself does not have any plan to privatize the MTRC at the moment. But in a way, Mr HUI is right as it has been reported in newspapers in recent months that people from all walks of life, including Honourable Members of this Council and people from the Stock Exchange of Hong Kong, the capital market as well as the banking sector, have all put forward such a view. However, I can tell Mr HUI that, up to now, we do not have any fixed timetable regarding the privatization of the MTRC.

MR LAU CHIN-SHEK(in Cantonese): Madam President, in part (c) of its main reply, the Government says that one of the key considerations for privatization is the need to strike a sensible balance between the interests of investors and those of consumers. This is actually a commercial principle. Since government-owned assets are in fact also public assets, will the Government undertake to publicly consult the community and comply with the people's views before it makes any decision to list or privatize any of its assets? If not, why not?

SECRETARY FOR THE TREASURY(in Cantonese): Madam President, I believe the Government will take Mr LAU's opinion into consideration. At present, we do not have any concrete plan at hand as to privatize a certain government asset, but I believe that we will definitely consult the relevant panels of the Legislative Council if we have such a plan one day. With regard to whether the public will be consulted extensively, I think that it will have to depend on the circumstances of individual cases such as the nature of the asset which the Government plans to privatize at that time.

PRESIDENT(in Cantonese): Mr LAU, which part of your supplementary question has not been answered? Please focus your question on that part.

MR LAU CHIN-SHEK(in Cantonese): It is the part about whether the public will be consulted. If not, why not? The Secretary's answer is that it will depend on the circumstances of individual cases. But I would like to push with my question further: if it depends on the circumstances of individual cases, will the Secretary tell us what criteria will be adopted? Thank you, Madam President.

SECRETARY FOR THE TREASURY(in Cantonese): Madam President, I think that the issue we are discussing now is relatively vague. We should wait till we have a specific asset in mind to be privatized before any study is to be actually carried out, and we will decide by then whether the whole community of Hong Kong should be consulted.

MR NG LEUNG-SING(in Cantonese): Madam President, it seems to me that part (c) of the main reply is also based on an assumption because the Government does not have anything firm in mind. It is said in part (c) of the main reply that mechanism will be set up if public interest is jeopardized in the course of privatization. I believe that such mechanisms will be set up according to the circumstances of individual cases at that time. However, I would like to ask something in advance, and that is: when the Government considers setting up mechanisms to protect public interests, will it rule out the possibility of doing so through legislation? If it will, why?

SECRETARY FOR THE TREASURY(in Cantonese): Madam President, I think I can only say that we will not rule out any possibility. But I cannot make any pledge today that we will definitely adopt or not adopt a certain mechanism. In fact, we are still hovering about a theoretical plane, so the only thing I can say now is that we will not rule out any possibility.

MR ALBERT HO(in Cantonese): Madam President, I notice that this question is answered by the Secretary for the Treasury. However, the part at the beginning of the question is mainly about the Hong Kong Stock Exchange (HKSE) and so the Financial Services Bureau should be more acquainted with the details of the review. I understand that the Secretary for the Treasury may want to answer the question about privatization policy as a whole. In the Government's reply on 11 November, it was said that careful and serious consideration would be given to the possibility of privatization, either in part or in whole, of some of its assets through selling or listing on the HKSE. I would like to ask, will the decision of privatizing a particular asset be made by the relevant policy bureau which will then put forward its views to the Secretary for the Treasury? For example, there are proposals of listing the HKSE itself and having it managed by a private company, and the railway corporation mentioned by an Honourable Member just now may also be listed. That means it will not be a comprehensive policy, studies may be made in different bureaux separately, and different studies may be conducted. The Secretary may not be clear about the situation, but on the whole, is it true that the Government has not made any substantive decision up to now?

SECRETARY FOR THE TREASURY(in Cantonese): Madam President, I will try my best to answer this supplementary question as there are actually several points in it. Firstly, why is the question answered by the Secretary for the Treasury? If Honourable Members look at the main question carefully, they will find that it does not only ask whether government assets will be listed on the HKSE, it also clearly poses the question of whether the Government will give consideration to the possibility of privatization through selling or listing on the HKSE. Since the scope is not only confined to listing on the HKSE, it is decided that the Secretary for the Treasury should answer this question. Besides, I believe that another part of the supplementary question is about whether the secretaries of the relevant policy bureaux or the Secretary for the Treasury will take the lead in considering the privatization of a certain government asset. If I have not misunderstood this part of the supplementary question, the best answer would be: because what we are talking about now are government assets and government assets involve the Financial Secretary, so if a decision in principle is to be made, it will definitely have to be made at the level of the Financial Secretary.

Secondly, since we are talking about government assets, it is also the Finance Bureau that is responsible for government assets. Therefore, if we have any plan to privatize a certain government asset, I believe that, under the leadership of the Financial Secretary, a study will be jointly undertaken by the Secretary for the Treasury and the secretaries of the relevant policy bureaux on the issues concerned.

PRESIDENT(in Cantonese): As we have already spent 16 minutes on this question, I suggest that Honourable Members use to follow up via other channels.

Attracting High-tech Companies and Talents

3. DR LUI MING-WAH (in Cantonese): Madam President, in order to attract foreign businessmen to invest in high-tech industries in Hong Kong and train local high-tech talent, will the Government inform this Council whether it will consider providing:

(a) concessionary measures for high-tech companies investing in Hong Kong, such as offering low-priced land and tax concessions;

(b) housing and other favourable terms for high-tech talent coming to work in Hong Kong; and

(c) financial assistance to companies which engage in training local technologists to undertake high-tech work?

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): Madam President, the Government has been adopting various measures in support of the development of technology industries. Some of the measures are for industries in general while some cater specifically for the development of technology industries. I will go through these measures in a minute.

First of all, I would like to explain a basic policy. While the Government certainly welcomes the inflow of foreign investment into Hong Kong, none of the numerous industrial support measures are specifically designed for or provided to foreign investors. There are two reasons for this. Firstly, the industrial support policy of the Government is always based on the principles of fairness and non-discrimination. We believe that all concessionary measures should be open to both local and foreign investors; otherwise it will create unfairness. Secondly, local investors have always been the mainstay of our local industrial development. If certain concessionary measures are only available to foreign investors so as to attract them to invest in Hong Kong, it might not be instrumental to the balanced development of local industries.

To encourage technology investments, the Government has been providing much support in terms of infrastructure, land, scientific and technological research, human resources development, tax and so on. Here are some major examples:

(a) As regards infrastructure, the Hong Kong Industrial and Technology Centre provides accommodation and support services to technology-based start-up companies. Besides, we are actively preparing for the construction of the Science Park. Both local and overseas technology-based companies can build their own technological research centres or operation centres in the future Park or carry out technological development projects in conjunction with companies or organizations in the Park.

(b) As regards land, the Hong Kong Industrial Estates Corporation provides industrial land at development costs to companies which cannot operate in ordinary multi-storey buildings.

(c) As regards scientific and technological research, all companies engaging in technological projects in Hong Kong may apply to the Government's Applied Research Fund for funding support so as to carry out more technology ventures and applied research and development activities.

(d) Moreover, the Chief Executive announced in his recent policy address the establishment of an Innovation and Technology Fund. This $5 billion fund will help the local business sector upgrade its technology through various schemes. We believe that technology-based companies will benefit from the funds.

(e) As regards tax concessions, expenditures on scientific and technological research as well as technological education incurred by any companies, including technology-based ones, which are business related are fully tax deductible.

Concerning the issue of housing, while our housing policy is not specifically designed for technological talents as such, the Government has been taking active measures, such as fast track approval for flat production and the provision of more land, to ensure the adequate supply of different types of housing to meet the requirements of all sectors of the community. In fact, the total number of flats in the private sector has increased in the past five years from some 830 000 in 1993 to some 940 000 in 1997. Besides, we also recognize the need to take into account special circumstances. Therefore, a residential block will be built in the first phase of the Science Park to provide short-term accommodation for non-permanent scientific researchers. Apart from meeting the practical needs of the tenants of the Science Park, this facility will also provide a focal point for scientific researchers to build up networks outside the workplace and conduct more exchanges with one another.

We fully agree that technology-based companies need to train up their staff in the use of new technologies. In this regard, technology-based companies can make use of the training subsidy under the New Technology Training Scheme of the Vocational Training Council. The subsidy may be used to send staff to receive local or overseas training in new technologies which are beneficial to business development. It may also be used to bring in overseas tutors or to commission training institutions for some "tailor-made" training courses to suit their needs.

Moreover, through the Engineering Graduate Training Scheme, the Vocational Training Council provides subsidy to engineering graduates and sandwich programme students employed by companies so as to help them complete their professional training.

DR LUI MING-WAH (in Cantonese): Madam President, the Secretary just told us the conditions the Hong Kong Government has created to attract foreign investment. Indeed, if the terms are so attractive, there should be a lot of foreign investors coming to Hong Kong to set up their plants, like what is happening in Singapore. But that is not the case. Therefore, the Secretary has not answered the first and second parts of my question. I hope the Government can put forward some measures that are innovative and effective in attracting foreign investors to invest and set up their plants in Hong Kong, especially to invest in industries Hong Kong does not have yet. If that can be done, their coming to Hong Kong would not affect the operation of plants and industries already set up in Hong Kong.

PRESIDENT (in Cantonese): What is your supplementary question?

DR LUI MING-WAH (in Cantonese): The Secretary has not answered parts (a) and (b) of my main question.

PRESIDENT (in Cantonese): Dr LUI, I rule that the Secretary has answered them already, but probably you are not satisfied with the answer given.

MISS CHOY SO-YUK (in Cantonese): Madam President, in the course of developing high technology, expertise is very important. For example, in the course of developing its high technology, Shenzhen has attracted 10% of the nation-wide doctoral graduates to work there. My supplementary question is: in attracting foreign expertise to work in Hong Kong, will the Government consider granting special visas to them, in particular, to experts from the Mainland?

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): Madam President, the Honourable Miss CHOY So-yuk is right. From our contact with mainland officials or business people, we understand it is now in Shenzhen, not in Beijing or Shanghai, that most of the best technological experts gather. One reason for that is the prosperous developments in the Guangdong Province and Shenzhen, which give these experts room for giving full play to their professionalism. Therefore, I think we can consider putting in place new policies or measures to attract the best people or experts to come to Hong Kong to provide service as it would be helpful to Hong Kong in developing its high value added or innovative technology. In this connection, the Commission on Innovative Technology chaired by Prof TIEN Chang-lin will deliberate on this idea at the second stage of its work, so will departments in the Government.

MISS CHAN YUEN-HAN (in Cantonese): Madam President, I have read through the reply by the Government. Although the Secretary has given an answer, I think Dr LUI in fact implied that the Government should come up with some new ideas after putting forward in the policy address proposals for a $3 billion Science Park and for injecting $5 billion in technological redevelopment. However, after listening to the Secretary's answer to supplementary questions, it seems there are no plans to train local people or attract foreign investment in the wake of the two proposals put forward in the policy address. I would like the Secretary to explain clearly what will be involved in the $5 billion mentioned in part (d) in paragraph three of the main reply. Are there any specific plans to implement the proposals in the policy address?

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): In regard to the $5 billion, the Chief Executive has already said in the policy address that it would be used to set up an Innovation and Technology Fund mainly to finance government or non-government bodies in non-recurrent projects conducive to innovative and technological upgrading. At present, we are actively planning for the details. In a nutshell, these projects may include research and development items relating to commerce, human resources and promotion programmes to enhance the knowledge of the people about innovative and technological developments, enhancement of technological infrastructure construction, encouragement or assistance given to joint projects between the universities and enterprises or between Hong Kong and the Mainland, encouragement or assistance given to technological dissemination, search for technological resources, and promotion of innovative technology. Should I take it that the Honourable Member's supplementary question has been answered?

MISS CHAN YUEN-HAN (in Cantonese): Madam President, the Secretary has answered it but ......

PRESIDENT (in Cantonese): Miss CHAN, which part of your supplementary question has not been answered?

MISS CHAN YUEN-HAN (in Cantonese): He did not answered ......, thank you, Madam President, for letting me speak again. I mean the Secretary did answer, but he did not give the originally prepared answer......., let me cite an example, and I hope Madam President could listen with patience. (Laughter) He said that in the policy address it was mentioned $3 billion-odd and $5 billion would be allocated as assistance to industries and for promotion of technological development in Hong Kong. However, in the second paragraph of the Government's main reply to Dr LUI's question, only old views of the Government were given. The Secretary raised two points to explain why foreign investments were not attracted to Hong Kong. The reasons given appear to be fair and justifiable, but was conservative ......

PRESIDENT (in Cantonese): Miss CHAN, although I have been listening very patiently to what you said, I would like to know which part of your supplementary question has not been answered?

MISS CHAN YUEN-HAN (in Cantonese): What I have been saying just now was, the thrust of my supplementary question was: despite the two government plans, does the Government have any new ideas to promote industries in Hong Kong and to attract foreign investors. Thank you, Madam President.

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): Madam President, we do have a lot of new ideas, but may be not those in the mind of Miss CHAN. (Laughter) In fact, the second paragraph of the main reply has already explained clearly the fundamental economic policy and philosophy of the Government. Perhaps, Miss CHAN or Dr LUI think our policy and philosophy will not work and therefore suggest that we should model on Singapore. But as this involves a substantial change in policy, we have not put this under consideration at the moment.

MR JAMES TIEN (in Cantonese): Madam President, if high technology companies wish to operate in Hong Kong, one of the key issues is housing for their scientific researchers. In the fourth paragraph of the main reply, the Secretary said there were 800 000-odd flats in the private sector. But I do not believe these flats are located in areas likely to be resided in by scientific researchers. I do not think short-term research of one to two months would be fruitful. If a longer-term research as to be conducted, say, a research lasting two or three years, would the Secretary inform this Council whether the Government would consider the construction of residential flats dedicated for short-term accommodation for scientific researchers so that they may live there for two or three years to facilitate their research in Hong Kong?

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): Madam President, the residential block for short-term accommodation I mentioned was not limited by any timeframe. So, I think we will consider the idea again when we study this in detail in future, and we will of course consider the Honourable James TIEN's suggestion put forward just now.

PROF NG CHING-FAI (in Cantonese): Madam President, I also wish to raise a question in connection with this supplementary question. With regard to this block, firstly, how many units will there be, secondly, how much is the rent, and will the rent be very different from the market value?

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): Madam President, I do not have the details now, but such details are certainly one of the issues we will consider in future.

MR SIN CHUNG-KAI (in Cantonese): My supplementary is simple. Dr LUI mentioned high-tech companies in his question. While it may be easy to define what old technology and new technology are, does the Government have a set of objective criteria to specify the levels of high and low technology?

SECRETARY FOR TRADE AND INDUSTRY (in Cantonese): There is hardly any governments in the world, let alone the Hong Kong Special Administrative Region, that can draw a clear cut distinction between high and low technology, or higher and lower technology. We do not have a demarcation in this respect.

Definition of Property Ownership Under the Home Starter Loan Scheme

4. MR AMBROSE CHEUNG (in Cantonese): Madam President, at the Finance Committee meeting on 31 July, the Secretary for Housing undertook to seek legal advice on the matter concerning private property buyers who had failed to complete property transactions being regarded as not being eligible for the Home Starter Loan Scheme (HSLS), and to reply afterwards. In response to my follow-up in writing later on, the Secretary further undertook to look into the issue in greater depth. However, this Council has not yet received any specific reply from the Government. In this connection, will the Government inform this Council:

(a) whether legal advice has been sought and whether studies have been conducted; if so, of the progress made, and the time for submitting the reply to this Council;

(b) of the rationale for regarding private property buyers who have failed to complete property transactions as property owners and thus excluding them from applying for the loan under the HSLS; and

(c) whether the definition of property ownership under the HSLS is the same as those under various subsidized home ownership schemes implemented by the Hong Kong Housing Authority (HA); if not, the reasons for that?

SECRETARY FOR HOUSING (in Cantonese): Madam President, we have sought advice from the Secretary for Justice on Finance Committee Members' concern with regard to property ownership restriction under the HSLS. The views of legal advisers of the Housing Department and the Housing Society (HS) have also been obtained.

In summary, the legal advice is that a person who has entered into an agreement to purchase domestic property (generally known as "agreement for sale and purchase") acquires an "equitable interest" in the property concerned. That is, the property concerned is treated under the law as belonging in equity to the purchaser, although the seller retains formal legal title to the property until the purchase money is fully paid. Such "equitable interest" has monetary value and is transferable in the open market. I will send a full reply to the Finance Committee of this Council shortly.

As regards part (b) of the question, the Government's policy in relation to eligibility for the HSLS is clear. Our limited resources should be directed to help people in genuine need, and not to subsidize people who themselves have the ability to purchase domestic property. Since those people who have previously signed a sale and purchase agreement have demonstrated their ability to purchase domestic property, they are generally ineligible to apply for subsidy under the HSLS.

As regards part (c) of the question, the definition of property ownership under the HSLS is similar to that for other subsidized home ownership schemes and loan schemes implemented by the HA and the HS.

MR AMBROSE CHEUNG (in Cantonese): Madam President, the Secretary is evading this question. My supplementary question is as follows. In the second and third paragraphs of the main reply, the Secretary agreed that the definition of property ownership is a legal and policy matter. Since this definition affects the various subsidized home ownership schemes and loan schemes under the HA and the HS and even public housing programmes, will the Secretary initiate a full discussion and review of the definition of property ownership in the Panel on Housing as soon as possible?

SECRETARY FOR HOUSING (in Cantonese): Madam President, with regard to the conclusion we have reached recently, especially in relation to this definition and our general policy, our position is very clear. We have discussed this matter with the relevant authorities. Of course, I will be quite happy to discuss this question again with Members in the Panel on Housing.

MR JAMES TO (in Cantonese): I would like to follow up on the Honourable Ambrose CHEUNG's supplementary question. While the second paragraph of the main reply seems to be about the legal definition, paragraph three does not seem to deal with the legal question, but rather policy questions or the question of principle, that is, whether the persons concerned have the financial capability. I would like to ask the Secretary for Housing this question. From the legal point of view, if a buyer had signed an agreement and the other party defaulted afterwards, will he still be ineligible for the HSLS due to legal constraints, even though the Inland Revenue Department has refunded the stamp duty to him?

SECRETARY FOR HOUSING (in Cantonese): Madam President, I have already explained the legal points in the second and third paragraphs of my main reply. As for government policy, I also stated clearly in the third paragraph that the Government wished to apply the limited resources to help people in genuine need. As for those who have the ability to purchase property, we should not give them additional assistance in principle. With regard to cases of default, generally speaking, the buyer has already demonstrated that he has the ability before signing the sale and purchase agreement. We also understand that in signing a sale and purchase agreement, both parties have to fulfil some obligations stipulated in the agreement. However, if one party, especially the seller, defaults, the agreement will become null and void. In cases of default, the buyer can be said to have never owned the property in principle. We will give special permission to these persons to re-apply for subsidy under this loan scheme or other subsidized home ownership schemes.

MR JAMES TO (in Cantonese): Madam President, the Secretary's reply seemed to be full of twists and turns, while his last remark brought a glimmer of hope. Will the Secretary include this matter in the full reply that he said he would send to the Finance Committee in the second paragraph of his main reply?

PRESIDENT (in Cantonese): This is strictly speaking not a follow-up question, but rather another supplementary question. But since not many Members are waiting for their turn, I will let you ask the question.

SECRETARY FOR HOUSING (in Cantonese): Madam President, my reply also concerns the second and third paragraphs of the main reply. In the second paragraph, I mentioned that I would send a full reply to the Finance Committee shortly. In the third paragraph, I said that some persons were generally ineligible, while some other were eligible to apply for subsidy. As I said just now, under special circumstances, we will allow these people to apply. I gave one example just now.

MR AMBROSE CHEUNG (in Cantonese): Madam President, on the question of whether one has the financial ability in the third paragraph of the main reply, I would like to ask the Secretary the following. There is an income restriction of $70,000 and a restriction on assets of $1.2 million under the HSLS. Why does the Secretary consider that a person with an income of $70,000 and assets of $.1.2 million who has not signed an agreement for sale and purchase as someone without the financial ability, while citing the example of a person with an income of $40,000 and assets of $500,000 who has failed to complete the property transaction after signing an agreement for sale and purchase as someone with the financial ability, or at least having greater ability than the former? Why would the Secretary make such a difference between them?

SECRETARY FOR HOUSING (in Cantonese): Madam President, I think Mr CHEUNG has made it quite clear himself. One person has the ability to sign an agreement for sale and purchase and complete the transaction, while the other does not have the ability to sign an agreement. The person who has the ability to sign the agreement for sale and purchase already owns the relevant property in principle, whereas the spirit of the HSLS and other loan schemes is to encourage some households with reasonable financial ability to purchase their own home as far as possible. In our experience, while many households may have reasonable financial ability, they still have difficulty in making the downpayment. If the Government can offer them assistance, they will be able to purchase their own home. Of course, we had consulted Members of the Legislative Council on this question and they all approved of this idea very much. As a result, we have introduced this loan scheme.

MR AMBROSE CHEUNG (in Cantonese): Madam President, the Secretary did not answer my follow-up question. I was talking about financial ability. Just now, I drew a comparison between a household with an income of $40,000 and assets of $500,000 which has chosen not to apply for government subsidy and has signed an agreement for sale and purchase, and a household with an income of $70,000 and assets of $1.2 million which has not signed an agreement for sale and purchase. Why did the Secretary consider the former to have more financial ability than the latter in purchasing property. This is a choice rather than an indication of financial ability. By choice, I mean choosing to sign an agreement for sale and purchase or not. I hope the Secretary will answer this.

SECRETARY FOR HOUSING (in Cantonese): Madam President, in his supplementary question, Mr CHEUNG mentioned a household with an income of $40,000 which did not need to apply for subsidy in order to purchase property. As soon as the persons signed an agreement for sale and purchase, they have demonstrated in principle their ability to purchase property. Even if another household has a higher income, we do not know about its other expenditures. Different people will have different demands for housing and different considerations about quality, location and price and so on. Therefore, the Government has to impose certain restrictions. In principle, the monthly household income must not exceed $70,000, unless we amend it in future. At this stage, we still consider that the income level of $70,000 is quite reasonable.

MR ALBERT HO (in Cantonese): Madam President, as with many other policies of the Government, when this policy was formulated, no one anticipated the financial turmoil and the drastic fall in the property market. While we assumed that many people had the ability to purchase property at the time of signing an agreement, some people lost this ability when the property market made a considerable downward adjustment. If the objective of this policy is to help people with the financial ability, the definition might become a constraint so that the Government cannot achieve the policy objective. Therefore, in view of this change in the circumstances, does the Secretary think that the whole policy should be reviewed?

SECRETARY FOR HOUSING (in Cantonese): Madam President, basically, we are conducting an internal review of these home ownership loan schemes. Of course, we will also examine the policy questions at the same time. After the conclusion of this internal review, we will talk to Members at an appropriate time.

Right and Freedom of Hong Kong Residents to Strike

5. MR CHAN WING-CHAN (in Cantonese): Madam President, will the Government inform this Council whether, under section 9 of the Employment Ordinance (Cap. 57), employers may dismiss their employees who go on strike or take industrial action without notice or payment in lieu of notice; if so, whether it will consider amending the Ordinance to give effect to the right and freedom of Hong Kong residents to strike as stipulated in Article 27 of the Basic Law?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, an employer may terminate a contract of employment without notice or wages in lieu only under the circumstances specified in section 9 of the Employment Ordinance (Cap. 57). This section does not expressly provide that an employer may summarily dismiss an employee on ground of the employee going on strike or taking industrial action.

Whether an employer can dismiss an employee summarily by virtue of section 9 depends on the facts and circumstances of each case. The onus of proof that a dismissal is lawfully made in accordance with section 9 is on the employer. In the case of a dispute, it will be for the Court to decide, in the light of the facts and circumstances of that particular case, whether or not summary dismissal under section 9 is justified.

Article 27 of the Basic Law stipulates that Hong Kong residents shall have, inter alia, "the right and freedom to form and join trade unions, and to strike". According to our legal advice, the existing legislation is consistent with the provision in this Article.

In practice, when a strike or industrial action occurs, the Labour Department will provide conciliation service to help employers and employees settle the dispute. Past experience indicates that such disputes can be settled through conciliation by the Labour Department.

MR CHAN WING-CHAN (in Cantonese): Madam President, the Secretary has not answered my question. In his main reply, it is pointed out that section 9 does not expressly provide that an employer may summarily dismiss an employee, without notice or wages in lieu, on the ground of the employee going on strike or taking any industrial action. However, section 9(ai) of the Employment Ordinance also provides that if an employee intentionally disobeys his or her employer's lawful and reasonable orders, the employer may summarily dismiss him or her without paying any compensation. Strikes fall exactly within the ambit of this particular section. In order to tie in with the provisions of the Basic Law, and in order to give greater clarity to the Employment Ordinance, will the Government amend section 9(ai) by specifying that strikes are an exception?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, I have already pointed out in the main reply that section 9 does not expressly provide that an employer may summarily dismiss an employee on the ground that the employee going on strike or taking any industrial action. The existing laws do not impose any prohibition or restriction on employees' right to strike.

Article 27 of the Basic Law expressly provides that Hong Kong residents shall have the right and freedom to strike. Indeed, employees in Hong Kong do exercise their right to strike from time to time. There were such cases in the past, and there have also been some this year so far. As I pointed out in my main reply, whenever a strike occurs, the Labour Department will provide conciliation service. Usually, such disputes can be settled. Hence, we do not think that there is any urgent need to amend the Employment Ordinance at this stage.

PRESIDENT (in Cantonese): Mr CHAN Wing-chan, has the Secretary failed to answer any parts of your question?

MR CHAN WING-CHAN (in Cantonese): I shall wait for my turn again and then ask further questions on the last part of the Secretary's reply.

MR LEE KAI-MING (in Cantonese): Madam President, when Article 27 of the Basic Law was being drafted, its first draft specified only the freedom to strike without mentioning the word "right". Then following the vigorous demands of some 160 trade unions and other organizations, the word "right" was eventually incorporated. As we all know now, once a worker has gone on strike, he will be deemed to have unilaterally terminated his employment relationship with his employer, and he will thus lose his entitlement to compensation. So, if the Ordinance is not amended, how can we possibly exercise the right to strike? The current situation is that there is freedom but no right.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, our viewpoint may perhaps be slightly different from that of the Honourable Member. First, following the adoption of the Basic Law, the Government of the Special Administrative Region (SAR) subsequently conducted a full review of our existing laws. We then came to the conclusion that our existing laws were in line with Article 27 of the Basic Law insofar as the right to strike is concerned. Although the Employment Ordinance does not expressly provide that employees have the right to strike, such a right is in fact expressly set down in the Basic Law. And, I must say, the Employment Ordinance does not violate the Basic Law; not only that, it is even in full compliance with the letter and spirit of the Basic Law. Therefore, as far as the right to strike is concerned, we really do not think that there is any need to amend the Employment Ordinance.

One may of course still ask, "If an employee goes on strike, can the employer invoke other provisions of the Employment Ordinance to terminate his employment contract?" As a matter of fact, other provisions of the Employment Ordinance do provide that an employer may terminate an employment contract without giving any reason on the condition that he must give sufficient notice or wages in lieu and pay the severance payment required. But this is a different matter from whether or not an employee has the right to strike.

MR LEE CHEUK-YAN (in Cantonese): Madam President, may I ask the Secretary what is meant by the right to strike?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, as I said earlier on, employees are in fact already exercising their right to strike. This year so far, there have been several cases of strike, and I believe that the Honourable Member himself should be aware of them. One of these cases was a labour dispute happening in a construction site. The construction workers concerned stopped working during their working hours and staged a sit-in instead. This is of course an example of workers exercising their right to strike. I am very pleased to inform Honourable Members that according to the information I have, all the strikes which occurred in 1998 were resolved following conciliation by the Labour Department.

MR LEE CHEUK-YAN (in Cantonese): Madam President, the Secretary has not answered my supplementary question. I asked the Secretary to define the right to strike, but he has failed to give me any definition. As far as the definition of the right to strike is concerned, the International Labour Organization should have a definition. I want the Secretary to give me a definition, but he has failed to do so.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, I do not have any international labour conventions to hand, which is why I am unable to give a concrete and technical definition. But as far as I understand it, if a certain worker stops working during his working hours owing to some employment problems which have caused him to disapprove of or feel dissatisfied with his employer, he should be considered as going on strike.

MR LEE CHEUK-YAN (in Cantonese): Madam President, this concerns only the action of going on strike, not the right to do so. The Secretary has still failed to answer my supplementary question.

PRESIDENT (in Cantonese): The question asked by Mr LEE concerns the definition. I would advise Honourable Members not to ask any questions of such a detailed nature during question time. Honourable Members may ask such questions in the relevant Panels. Mr LEE, I think you and the Secretary are holding very different opinions about some specific issues. So, you two had better discuss the issue frankly in the relevant Panel than to do so during question time, because we are rather hard-pressed by time.

MR HO SAI-CHU (in Cantonese): Madam President, how serious is the problem of strike? Has the situation described by some Honourable Members ever occurred? The Secretary said in his main reply that the Government will provide conciliation service in all industrial disputes. That being the case, does the Labour Department have any records on the number of cases in which employers invoked the relevant provisions and dismissed the workers concerned without giving them any notice or compensation on the ground that they had gone on strike? Does the Department have any figures on this? What is the number of such cases?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, in regard to cases of strike, the Labour Department recorded nine such cases in 1995, seven in 1997 and eight in 1998 as at October. With the mediation of the Labour Department, all of these cases were settled.

MR HO SAI-CHU (in Cantonese): The Secretary has not answered my supplementary question. I know that actually, there have not been too many cases of strike, and many of them were settled. But in all these cases, did any employers invoke the relevant provisions and dismiss their employees without giving them any notice or compensation? Has anything like this ever occurred? If yes, what is the number? If there have not been too many such cases, one can say that the situation is not that serious, and there is hence no need to amend the Ordinance.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, according to records, over the past few years, the Labour Department has not received any complaint about employers invoking section 9 to dismiss their employees who have gone on strike.

MR LEUNG YIU-CHUNG (in Cantonese): Will the Secretary please tell us what laws there are in Hong Kong to protect employees so that they can be compensated after going on strike? I ask this question because as pointed out by some Honourable Members, when employees go on strike, employers may say that they have disobeyed their supervisors' orders and then dismiss them by invoking section 9. When this happens, which law can protect those employees who have gone on strike? If there are no such laws, or even if there are any, how can we make sure that the right to strike as stipulated in Article 27 of the Basic Law can be realized or safeguarded?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, as pointed out in my main reply, section 9 of the Employment Ordinance does not expressly provide that an employer may summarily dismiss an employee on the ground that the employee has gone on strike. Therefore, we really do not have any records on any precedents or cases of employers dismissing those employees who have gone on strike by invoking section 9. Of course, if there is really a specific complaint ─ if there are really any disputes, the Court will make a final verdict, and it will do so by studying the facts and circumstances of the case and by taking account of section 9 of the Employment Ordinance and Article 27 of the Basic Law.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, just now, I asked the Secretary," Which law in Hong Kong can protect employees going on strike? And, how can we realize the right to strike as stipulated in Article 27 of the Basic Law?" The Secretary has failed to give me an answer.

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, my answer is: None of our existing laws forbids employees to go on strike or restricts their right in this respect. In other words, if an employee wants to go on strike, he has every right to do so. No law forbids him to do so or restricts his right in this respect.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, I am talking about protection, not prohibition.

PRESIDENT (in Cantonese): This is only a matter of diction. I believe that no matter how the Secretary answers his supplementary question, Mr LEUNG will still voice his disagreement. But I still think that you should follow up this matter through other channels.

MR ANDREW CHENG (in Cantonese): Madam President, we of course do know that there is currently no law to restrict the right of employees to go on strike. But the point is that employers can always resort to section 9 of the Employment Ordinance, which provides that an employer may dismiss an employee if the latter has disobeyed a lawful and reasonable order of the former. Employers can easily invoke this particular provision, saying that their employees are not allowed to go on strike because such an action will constitute a disobedience to their lawful and reasonable orders. Moreover, the Employment Ordinance has not been amended to embody the spirit of Article 27 of the Basic Law, and consequently, an order forbidding employees to go on strike is not expressly stated as an unlawful order. In such circumstances, will the Government please tell us how it is going to realize the right to strike as stipulated in the Basic Law?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, this is after all a question of interpretation. As pointed out in my main reply, whether an employer can dismiss an employee summarily by virtue of section 9 will have to depend on the facts and circumstances of the case. At present, we do not have any precedents. In case of disputes, it will be for the Court to make the final verdicts. Over the past few years, we have not received any such complaints. As to whether or not we should set down clear provisions on some specific issues in the Employment Ordinance, I think all will have to depend on the circumstances which may emerge in the future.

MR ANDREW CHENG (in Cantonese): The Secretary has not answered my supplementary question. If the law does not expressly provide that an order forbidding employees to go on strike is an unlawful order, and if there is no clear provision on this, then should one justifiably fear that employers may well take advantage of this and dismiss their employees without giving them any notice?

PRESIDENT (in Cantonese): Mr Andrew CHENG, I think the Secretary has already answered your question, only that you are not yet satisfied. Many Honourable Members would also like to ask their supplementary questions now. I notice from the whole question time that Honourable Members and the Secretary do have many differences between them, and, for this reason, I think it is best for them to conduct face-to-face discussions in the relevant Panel. So, I hope Honourable Members can follow up their questions on this matter in the relevant Panel.

Supervision of Tutorial Centres

6. MR YEUNG YIU-CHUNG (in Cantonese): Madam President, regarding the supervision of tutorial centres, will the Government inform this Council:

(a) whether there has been an upward trend in the number of complaint cases received by the Education Department (ED) about unregistered tutorial centres in recent years; if so, of the reasons for that; and of the percentage of cases not resulting in prosecution by the authorities out of the total number of such cases, together with the reasons for that;

(b) of the number of cases in which tutorial centres violated the relevant stipulations in collecting tuition fees in each of the past three years, and how the ED dealt with those cases; and

(c) whether it has reviewed the adequacy of the ED's supervision over tutorial centres, and of the steps to be taken to strengthen supervision in this respect?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President,

(a) There has been an upward trend in recent years in the number of complaint cases received by the ED about unregistered tutorial centres. For example, in the 1996-97 and 1997-98 school years, 170 and 330 complaint cases were received respectively. In the first two months of the 1998-99 school year, 54 complaints were received. This is mainly attributed to the ED's stepped up effort in inspecting unregistered tutorial centres, and increased publicity reminding the public not to study in unregistered schools.

Of the 500 complaint cases received in the 1996-97 and 1997-98 school years, prosecution was brought against 10 cases (that is, 2% of the complaint cases received), all of which were convicted. No prosecution was made against the remaining cases because the operators had complied with the advice or warning of the ED by suspending classes, reducing the number of students to meet the requirement of the Education Ordinance, or ceasing operation completely.

(b) In the past three years, the ED received a total of 14 cases in which tutorial centres violated the relevant stipulations concerning collection of tuition fees (1996-97 school year, no case received; 1997-98 school year, five cases; September and October of 1998, nine cases). In the 1997-98 cases, investigations were conducted and the relevant centres, after being warned, refunded the tuition fees to the students accordingly. For the cases received in September and October 1998, the ED is still in the process of investigation.

(c) In the past year, the ED has reviewed and streamlined the procedure for supervising and prosecuting unregistered tutorial centres. It has also strengthened its co-operation with law enforcement agencies. For instance, in respect of operators who have experience in running schools but who still operate unregistered tutorial centres, the ED will warn them after inspection and will immediately refer the case to the police for action.

As with other types of schools, tutorial centres are at present governed by the Education Ordinance and the Education Regulations. The ED is now conducting a review on the Ordinance and the Regulations, including those governing the supervision of tutorial centres.

MR YEUNG YIU-CHUNG (in Cantonese): Madam President, in the Secretary's main reply, it is said that the drastic increase in the number of complaints against tutorial centres is attributable to stepped-up inspection efforts on the one hand and to the community's demand for such centres on the other. In part (c) of the main reply, it is mentioned that a review on the Education Ordinance and the Education Regulations is now in progress. Does this mean that a separate scheme will be put in place to regulate tutorial centres as a separate category?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, in the current review, the ED will study the restrictions on class size and the definition of "educational course" within the meaning of "school" as defined in section 3 of the Education Ordinance; at the same time, the ED will study whether tutorial centres should be required to register, with a view to putting them under the same kind of supervision as formal schools; and, the ED will also consider whether there is any need to amend section 9(5) of the Education Ordinance and see whether it is necessary to exempt tutorial centres from registration. Madam President, I must add that we are currently deploying huge manpower resources to supervise and regulate tutorial schools. But have our efforts produced any effective results? It should also be noted that the definition of "educational course" will lead to many arguments in many cases. Besides, there is the problem of manpower constraints ...... I mean, if the ED allows tutorial schools to register and obtain licences, will the general public, in particular students, wrongly think that all the tutorial centres thus registered are of a high standard? Given all of these problems we find it necessary to conduct a comprehensive review on matters relating to the registration and regulation of tutorial centres.

DR TANG SIU-TONG (in Cantonese): Madam President, it is mentioned in part (c) of the main reply that all tutorial centres are currently regulated by the Education Ordinance and the Education Regulations. Are breaches of the Ordinance and the Regulations criminal offences? For the 10 convicted cases in the 1996-97 and 1997-98 academic years, what are the penalties imposed?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, the breaches referred to are indeed criminal offences, and the maximum penalty is a fine of $25,000 or a prison term of two years. For the 10 successful prosecutions in question, the persons in charge of the tutorial centres concerned were each sentenced to a fine, ranging from $2,500 to $25,000. And, for the teachers working there, they were also sentenced to a fine, ranging from $500 to $3,000 each.

MR CHEUNG MAN-KWONG (in Cantonese): Madam President, in the past, some organizations which held mock Hong Kong Certificate of Education Examinations sessions for students were regarded as running illegal educational courses, and the Government required them to apply for registration. Recently, some organizations have organized a number of interview training sessions for kindergarten graduates applying for primary school admission. Are the organizations holding these training sessions to be regarded as tutorial centres? Do they have to apply for registration? Or, has the Government ever required them to register?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, I am afraid I cannot make any judgement on the basis of the limited information provided. If the Honourable Member can provide me with more detailed information after the meeting, I will certainly request the ED to follow up the matter.

MR LAU KONG-WAH (in Cantonese): Madam President, will the Secretary agree that while some tutorial centres are indeed purely commercial establishments, many others are in fact non-profit making organizations with the aim of providing services to students? In the course of its review, will the Government take this into account and accord different treatment to the latter kind of tutorial centres?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, the current position of the Government is that it will neither encourage students to enrol in tutorial centres nor object to their doing so. There are indeed many tutorial schools in Hong Kong now, and, for this reason, we must consider whether or not the manpower now deployed by the ED, the existing regulation mechanism and the provisions of the Education Ordinance can adequately protect the interests of students; and we must also consider whether we should also supervise informal educational courses or seek to ensure their good standards. These are issues which we should consider.

The Honourable Member asked whether we would seek to distinguish commercial tutorial centres from non-profit making ones in the course of our consideration, and he also asked whether we would accord different treatment to these two types of tutorial centres. We would naturally consider his suggestion. However, basically, our primary concern is how best we can streamline the supervision procedure for the purpose of achieving maximum effectiveness, and we also think that it is very important for us to consider whether supervision should take its present form.

MR YEUNG YIU-CHUNG (in Cantonese): Madam President, in general, how does the ED handle a complaint? How long does the whole process take?

SECRETARY FOR EDUCATION AND MANPOWER (in Cantonese): Madam President, basically, when the ED receives a complaint, it will assign an inspector to inspect the tutorial centre concerned. If the complaint is found to be substantiated, a warning or advice will be issued. If the operator concerned already has experience in running a school, the case may even be referred immediately to the police for actions. As for the time required, it will depend on the manpower situation. In general, it ranges from one month to several months.

WRITTEN ANSWERS TO QUESTIONS

Abusive Use of Antibiotics

7. MR MICHAEL HO (in Chinese): Regarding the emergence of drug-resistant bacteria as a result of the overuse of antibiotics, will the Government inform this Council:

(a) of the number of cases in which patients were infected with drug-resistant bacteria and the number of such cases in which the infected patients subsequently developed serious complications, as detected by public hospitals and the Department of Health in the past three years; please give a breakdown by types of bacteria;

(b) of the measures in place to monitor the use of antibiotics by medical practitioners in making out prescription, including those measures taken by the Hospital Authority, the Department of Health and professional bodies; and

(c) whether it has any information on the use of antibiotics by private medical practitioners in making out prescriptions; if so, what the details are?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) Bacterial resistance to antibiotics is common. Different bacteria have intrinsically different biological characteristics and have different patterns of sensitivity to various antibiotics. Therefore, while a specific type of bacterium may be resistant to a particular type of antibiotics, the attending doctor can always resort to the use of other antibiotics, based on, where necessary, bacterial culture and sensitivity tests, to treat the bacterial infections concerned. Since there are numerous bacteria which may cause diseases and which may be resistant to certain antibiotics, a large number of the patients can be said to have been infected with drug-resistant bacteria, and neither the Hospital Authority (HA) nor Department of Health has available information on the number of such cases.

(b) Prudent use of antibiotics is good clinical practice and is advocated through basic and continuous medical education and training.

Both the HA and Department of Health have Infection Control Committees to advise on measures to minimize risk of transmission of infections within the hospital or clinical settings and to provide guidance on antibiotics sensitivity. Reference is also made to reports from the Regional Information Network on Antimicrobial Resistance of the World Health Organization.

In particular, the Hospital Authority has adopted the following measures to address the problem:

(i) Provide guidance to clinicians on appropriate use of antibiotics through hospitals' Drug Therapeutic Committees and Drug Formularies in order to improve therapeutic efficacy, and minimize the emergence and spread of antibiotic-resistant bacteria.

(ii) Conduct regular bacterial sensitivity tests in order to alert clinicians of the trends of bacterial resistance to a broad range of antibiotics.

(iii) Ensure that individual patient's bacteria test results be provided to clinicians as soon as possible in order to minimize the period of "blind" antibiotic therapy and to expedite the antimicrobial therapy selection process.

(c) The decision to prescribe particular antibiotics rests with the medical practitioner concerned, who makes a prescription based on professional assessment and clinical judgement in relation to the clinical and disease conditions of the patient concerned. There is at present no information on the use of antibiotics by private medical practitioners.

Medical Incidents in Public Hospitals

8. MR LAU CHIN-SHEK (in Chinese): Regarding the medical incidents in public hospitals and the mechanism for handling complaints about such incidents, will the Government inform this Council:

(a) whether it knows:

(i) the total number as well as the breakdown of medical incidents occurring in public hospitals in each of the past three years; and

(ii) the mode of operation of the Hospital Authority (HA)'s Public Complaints Committee (PCC) which is tasked with receiving complaints about medical incidents, and the total number as well as the breakdown of complaints received by the PCC in each of the past three years; and

(b) whether consideration has been given to establishing a mechanism independent of the HA for handling complaints about medical incidents; if not, why not?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a)(i) The HA has established an incident notification system, under which hospitals are encouraged to notify HA Head Office any medical incidents which has been confirmed or suspected to have affected a patient, or which may give rise to complaints. Through the system, the HA is able to acquire all relevant information, enabling the HA to analyse the causes of these incidents, identify clinical risks and improve health care services. The incidents notified may not have actually affected the well-being of a patient, or have involved human error or professional negligence. In other words, the notified incidents are not necessarily medical blunders. The number of notified incidents for 1995, 1996 and 1997 are 189, 403 and 462 respectively.

(ii) HA has established a two-tier complaint management system to investigate and handle complaints lodged by patients and the public. Upon receipt of a complaint, the case will first be investigated and directly handled by the hospital concerned. Appeal cases will be handled by the PCC, which comprises HA Board members and members of the community. The HA has recently adopted measures to expand the role of the PCC to handle complaints of clinical nature, and to increase the number of non-HA members of the PCC to enhance its representatives.

Upon receipt of an appeal case, the PCC will independently investigate the case, and, if necessary, commission experts to investigate and give professional medical advice on the complaint. Based on the findings, the PCC will advise the HA on the appropriate actions to be taken for each case and monitor progress of the implementation of its recommendations.

A breakdown of the nature of complaints received by the PCC in the past three years is as follows:

period	1995-96	1996-97	1997-98
nature of cases
Medical services	18	18	25
Staff attitude	3	1	5
Medical appointment	1	1	-
Administrative procedure	-	-	4
Others	8	1	3
Total	30	21	37

(b) The HA is a statutory organization responsible for managing Hong Kong public hospitals. HA Board members are drawn from different sectors of the community, including non-medical professionals and government officials. PCC members are appointed by the HA Board, including four HA Board members and six non-HA Board members. All of them are not executives of HA management. The PCC makes regular reports on its work to the HA Board.

If a complainant is not satisfied with the PCC's final decision, he/she may resort to other avenues of redress outside the HA, such as the Office of the Ombudsman, the Complaints Division of the Legislative Council Secretariat or the Hong Kong Medical Council.

Since there are various avenues and mechanisms, inside and outside the HA, for receiving and handling complaints concerning medical incidents, we do not consider it necessary at present to establish another complaint management mechanism for this purpose.

Prostitution Involving Female Holders of Two-way Exit Permits

9. MR WONG YUNG-KAN (in Chinese): It is reported that the number of cases of prostitution involving women entering Hong Kong from the Mainland on two-way exit permits has been on the rise. In this connection, will the Government inform this Council of:

(a) the respective numbers of prosecutions instituted by the authorities against these women for engaging in prostitution, in each of the past three years; and

(b) the measures in place to prevent these women from engaging in prostitution?

SECRETARY FOR SECURITY (in Chinese): Madam President,

(a) Two way permit (TWP) holders who are found to be engaged in prostitution are prosecuted for the offence of "breach of condition of stay" under the Immigration Ordinance. The prosecution figures in this regard in the past three years are as follows:

Year	1995	1996	1997	1998 (January - October)
Number of prosecutions	549	934	621	967

(b) We have adopted a number of measures to prevent TWP holders from engaging in prostitution, including:

- tightening up control at the immigration control points to prevent suspected TWP holders from entering Hong Kong. Those TWP holders with previous records of prosecution for engaging in prostitution or whose bona fides are in doubt will be refused entry;

- distributing leaflets to TWP holders informing that they will be prosecuted and subject to penalties and repatriation for any breach of conditions of stay;

- taking vigorous law enforcement actions against vice activities; and

- maintaining close contact and exchanging intelligence with the mainland authorities.

Operation of the Hospital Governing Committees

10. MR LAW CHI-KWONG (in Chinese): Regarding the operation of the Hospital Governing Committees (HGCs) of various public hospitals managed by the Hospital Authority (HA), will the Government inform this Council:

(a) of the number of meetings held by each HGC and the average attendance rate of its members in the past year;

(b) of the measures taken by the HA to ensure that the operation of HGCs will not be affected by the frequent absence of some HGC members from meetings; and

(c) whether the management of various hospitals have reported to their respective HGCs of all medical incidents occurring in their hospitals which might lead to legal proceedings; if so, of the details; if not, why not?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) HGCs were established in 36 hospitals/institutions managed by the HA. In 1997-98, each HGC held five meetings on average and the average attendance rate of HGC members was 68%. The number of meetings held by each HGC and members' average attendance rate in that year are listed in the Annex.

(b) Apart from attending regular meetings, HGC members also take part in other areas of hospital work, such as participating in workshops organized by hospitals or the HA and paying visits to hospitals. Through these activities, the members will be able to give valuable advice on the need of and the resources required for hospital services, and to monitor the operation and management of hospitals. To enhance the effective functioning of the Committees, the HA has distributed operation manuals and other reference materials to the members to assist them in performing their governing roles. Moreover, the HA Board will take into account various factors, including members' interest and involvement in hospital affairs, before making new appointments or re-appointments to the Committees.

(c) Whenever a major medical incident occurs, the management of the hospital will, regardless of whether it may lead to legal proceedings, report the incident to their respective HGC. Whether the incident should be reported at a regular meeting or at a special meeting convened for that purpose depends on individual circumstances.

Annex

Hospital Governing Committees

Hospital	No. of Meetings in 1997-98	Average Attendance Rate of Members at Meetings in 1997-98 %
Hong Kong Island
Cheshire Home, Chung Hom Kok	6	69
Duchess of Kent Children's Hospital	3	57
Grantham Hospital	4	57
MacLehose Medical Rehabilitation Centre	4	62
Nam Long Hospital	6	75
Pamela Youde Nethersole Eastern Hospital	4	64
Queen Mary Hospital	4	87
Ruttonjee Hospital	4	67
Tsan Yuk Hospital	3	63
Tung Wah Eastern Hospital	6	78
Tung Wah Group of Hospitals Fung Yiu King Hospital	6	78
Tung Wah Hospital	6	80
Kowloon
Caritas Medical Centre	4	70
Hong Kong Buddhist Hospital	4	62
Hong Kong Eye Hospital	4	78
Hong Kong Red Cross Blood Transfusion Service	4	78
Kowloon Hospital	4	68
Kwong Wah Hospital	6	75
Margaret Trench Medical Rehabilitation Centre	4	71
Our Lady of Maryknoll Hospital	4	82
Queen Elizabeth Hospital	4	71
Rehabaid Centre	4	75
Tung Wah Group of Hospitals Wong Tai Sin Hospital	6	64
United Christian Hospital	4	52
New Territories
Bradbury Hospice	5	61
Castle Peak Hospital	5	64
Cheshire Home, Shatin	11	52
Haven of Hope Hospital	4	68
Kwai Chung Hospital	5	58
Pok Oi Hospital	6	66
Prince of Wales Hospital	5	64
Princess Margaret Hospital	8	74
Shatin Hospital	6	72
Tuen Mun Hospital	7	63
Yan Chai Hospital	5	71
Alice Ho Miu Ling Nethersole Hospital	4	56

Setting Up of Telecommunication Transmission Equipment

11. MR SIN CHUNG-KAI: Regarding the setting up of telecommunications transmission equipment at various places in Hong Kong by various telecommunications companies providing paging, fixed and mobile telephone services and so on, will the Government inform this Council:

(a) how it ensures that these companies have equal opportunities in setting up such equipment in private buildings and whether it will provide assistance to these companies when needed;

(b) of any regulation on the fees chargeable by private property owners for allowing the setting up of such equipment in their properties;

(c) whether it knows the fees charged by the Mass Transit Railway Corporation (MTRC), Kowloon-Canton Railway Corporation (KCRC), the companies operating the three cross-harbour tunnels and Tate's Cairn Tunnel, and the Hong Kong Housing Authority (HA) for allowing the setting up of such equipment in their properties; and

(d) of its policy (including fee policy) on the setting up of such equipment in government buildings?

SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING: Madam President,

(a) Under section 14 of the Telecommunication Ordinance, telecommunications network operators authorized by the Telecommunications Authority have the statutory right of access into buildings to install cables and ancillary equipment for line communications. At present, all four Fixed Telecommunication Network Services licensees and Hong Kong Cable Television Limited have been granted the right of access into the "common parts" of buildings to install cables and ancillary equipment. The Office of the Telecommunications Authority has issued guidelines to developers, landlords and building managers advising them of this statutory right of access and requesting them to treat the network operators on a non-discriminatory basis in the installation of their networks.

In contrast, operators of radiocommunications services (such as mobile telephone or paging services) currently do not have a statutory right of access under the Telecommunication Ordinance. In the consultation paper released on 3 September 1998 (the September Consultation Paper), the Government proposed that, for cases where it would be in the public interest to extend radiocommunications services to certain locations and where alternative locations or technical solutions are not available to achieve the desired extension of coverage, the statutory right of access under section 14 of the Telecommunication Ordinance should be extended to radiocommunciations service providers on payment of a reasonable rental.

(b) Under the Telecommunication Ordinance, the statutory right of access for the installation of cables and ancillary equipment for line communications services may be exercised by operators without the payment of rent or access fees. Landowners suffering damages are entitled to seek compensation from the network operators concerned. Radiocommunications operators, who do not currently have any statutory right of access, have to negotiate commercial agreements for access. In the September Consultation Paper, the Government proposed that the Telecommunications Authority be empowered to intervene where the public interest so warrants.

(c) The fees charged by the HA for the installation of radio antennae and base stations on the roofs of the HA's public housing blocks and inside its shopping centres are at the Annex.

The access fees charged by the MTRC, the KCRC and the companies operating the five "build, operate and transfer" tunnels, namely, Cross-Harbour Tunnel Company Limited, New Hong Kong Tunnel Company Limited, Tate's Cairn Tunnel Company Limited, Western Harbour Tunnel Company Limited and Route 3 (CPS) Company Limited, are subject to a confidentiality clause contained in the agreements signed between these companies and telecommunications operators.

(d) Authorized telecommunications network operators are allowed to enter government buildings to install cables and ancillary equipment for line communications.

Applications concerning the installation of transmission equipment for radio services communications are considered on a first-come-first-served basis, subject to availability of space and to there being no objections on technical grounds. Successful applicants are required to pay a market rent.

Annex

　

Charges for the installation of radio antennae and base stations on the
roofs of the Housing Authority's public housing blocks and
inside its shopping centres:

(Effective from 1 April 1998)

		Area	Basic charge per month (exclusive of rates) ($)	Charge per additional antenna per month (exclusive of rates) ($)	Charge per additional square metre of station area per month (exclusive of rates) ($)
(a)	Mobile telephone companies (GSM)	Base station note exceeding 15 sq m with not more than six antennae	16,000	2,500	185
(b)	Mobile telephone companies (PCS)	Base station not exceeding 5 sq m with not more than six antennae	12,000	2,000	130
(c)	Paging/trunk companies, repeater/ enhancer for mobile telephone companies	Base station not exceeding 4 sq m with not more than two antennae	5,000	1,600	125
(d)	Taxi/lorry associations, utility companies and so on	Base station not exceeding 2 sq m with not more than one antenna	1,700	800	85

Provision of Community-based Rehabilitation Service for Chronically Ill Patients

12. MR ALBERT HO (in Chinese): Will the Government inform this Council of:

(a) the estimated number of people with chronic illness who require community-based rehabilitation (CBR) service in Hong Kong at present;

(b) the basis on which it assesses the public's demand for such CBR service;

(c) whether the Government had pledged to establish five community rehabilitation network (CRN) centres; if so, of the reason why there are only three such centres at present; and

(d) the reasons why until now there is no CRN centres in the New Territories?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) and (b)

The assessment of prevalence or incidence of chronic disease requires dedicated population based studies because chronically is not by itself a disease diagnosis. Also, chronic disease is not necessarily recognized by the individual and the individual may not seek medical care. Hence, there are no readily available figures on the number of people with a chronic illness who require CBR service in Hong Kong. As a reference, the number of patients who were admitted to hospitals of the Hospital Authority for treatment for one of the 10 common chronic diseases including mental disorder, chronic obstructive pulmonary disease, diabetes mellitus, asthma, heart failure, chronic renal failure, epilepsy, chronic liver diseases and cirrhosis, mental handicap and Parkinson's disease was 63 950 in 1996.

(c) In the 1995 White Paper on Rehabilitation, the Government undertook to evaluate the effectiveness of the CRN pilot project and then subject to the findings and the availability of funding, to consider subventing a clearing house and five CRN centres.

The Government has recently commissioned a consultancy study to review the long-term development of CRN, the cost-effectiveness of existing CRN operations, and the interface with similar services provided by the Hospital Authority's patient resource centres and other service providers. The Government will consider the future development of the CRN service in the light of the Consultant's findings.

(d) The three existing CRN centres provide services to persons, in the Hong Kong, Kowloon and New Territories regions. A wide range of services is provided and in particular out-reaching programmes, health talks and social activities are arranged for chronically ill individuals including those residing in the New Territories.

Provision of Physiotherapists in Special Schools

13. MR LEUNG YIU-CHUNG (in Chinese): Will the Government inform this Council:

(a) of the current ratio of physiotherapists to pupils in special schools under the Education Department (ED); whether an assessment has been made to determine if the number of such physiotherapists is adequate to cope with the pupils' needs;

(b) of the number of vacancies for physiotherapists in special schools at present and their percentage against the total number of such posts; and

(c) how the remuneration of physiotherapists in special schools compares with that of their counterparts in hospitals under the Hospital Authority (HA); whether the Administration has plans to improve the remuneration of physiotherapists in special schools?

SECRETARY FOR EDUCATION AND MANPOWER (in Chinese): Madam President,

(a) As provided for under the Code of Aid for Special Schools, schools for physically and severely mentally handicapped children may appoint 0.5 physiotherapist for every 15 students, and one artisan for every two physiotherapists. The ED will commission a consultancy study on the multiplicity of handicaps of students in special schools; the study will examine the adequacy of existing provisions for students with multiple handicaps, including physiotherapy support, and the need for improvements.

(b) In the last three years, the vacancy situation of physiotherapists in special schools has been improving. As at 13 November 1998, there are four vacant physiotherapist posts in special schools, representing a vacancy rate of 7.9%.

(c) The remuneration of physiotherapists in aided special schools is on a par with that of their counterparts with equivalent qualifications employed by the HA, although their fringe benefits are different. The Government does not have any plan to change the conditions of service of staff employed in special schools.

Improvement of Urban Environment

14. MISS CHRISTINE LOH: With regard to the improvement of the urban environment, will the Government inform this Council of:

(a) the existing policy on urban design;

(b) the long-term programme of urban design and streetscape improvement; and

(c) the authority responsible for implementing urban design and streetscape improvement projects, and its achievements so far?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS: Madam President,

(a) Urban design is one of the major considerations in land-use planning in Hong Kong. Urban design concepts have been incorporated at all levels of town planning from the territory-wide development strategy to regional and district-level planning studies. The ultimate policy objectives are to ensure that all planned land uses are compatible with their surrounding environment and neighbouring uses; that the planning of transport and other infrastructure is commensurate with the development intensity; and that the overall town planning and landscape of open spaces and streetscape would create a pleasant environment and, where possible, contribute to the creation or preservation of specific character in specific areas.

(b) In addition to on-going planning studies and standards and requirements as provided for in the Hong Kong Planning Standards and Guidelines, the Government is considering the feasibility of formulating some urban design guidelines and hence has commissioned a consultancy on "Urban Design Guidelines for Hong Kong" in early 1998 to look into this matter.

(c) At the district planning level, urban design concepts are translated into Outline Zoning Plans, Outline Development Plans, Layout Plans and planning briefs for specific projects. Our planning objectives are implemented through the imposition via these plans of specific plot ratio, site coverage, building height or development density control. For development which requires planning permission from the Town Planning Board (TPB), the TPB may impose other requirements that it sees fit to promote or preserve special identity or character or archaeological interest of any particular area insofar as such requirements are related to the proposed development. The project proponent may be required to provide to the satisfaction of the TPB such planning details as the nature, position and dimensions of buildings; the alignment, widths and levels of any roads; urban design and landscaping proposals including tree preservation and transplanting and so on. The system works well and a good balance has been struck between government control and the scope for creativity in the private sector.

As for public projects, most of the urban design and streetscape projects are implemented by the Highways Department, the Regional Services Department (RSD) and the Urban Services Department (USD), with the Architectural Services Department as the professional agent of the municipal services departments.

For streetscape improvement projects, the Advisory Committee on the Appearance of Bridges and Associated Structures gives advice to the Highways Department on the design and appearance of highway structures.

As for urban design and public open space projects, the USD and the RSD have in the past three years developed 210 hectares of new amenity areas and parkland and planted 975 050 trees and shrubs of all sizes and species to improve our city environment. In particular, the RSD has completed 29 landscape improvement projects during 1997-98, with over 70 000 trees, shrubs, annuals and the like being planted. On the other hand, the USD has commenced since 1993 a Tree Planting Program as part and parcel of the Provisional Urban Council's "Green Hong Kong Campaign". In addition, it has undertaken 32 City Beautification Projects in 1997-98 (which involves planting and replenishing trees and flower beds and creating roadside amenity areas) and aims to complete 12 more in 1998-99 and 25 in 1999-2000.

CSSA for Families Facing Matrimonial Problems

15. MR LAU KONG-WAH (in Chinese): Will the Government inform this Council whether it knows the respective numbers of single-parent families receiving Comprehensive Social Security Assistance (CSSA) on grounds of financial hardship resulting from marital breakdown in each of the past three years, as well as the total amount of payments granted to this category of cases in each of the past three years?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President, according to the administrative records of the Social Welfare Department (SWD), the number of CSSA cases classified as single-parent cases in the past three years is as follows:

By end of October	Number of single-parent CSSA cases	Percentage to total caseload (%)
1996	11 500	7.4
1997	15 500	8.5
1998	21 400	9.6

According to the findings of a study on the CSSA recipients conducted by the SWD in 1997, some 55% of the single-parent cases involved recipients who were either divorced or separated from spouses. We however do not maintain separate records on the amount of payments granted to recipients under different categories of cases.

Chief Executive's Assistance to a Local Businessman Pending Trial in Taiwan

16. MISS EMILY LAU: It is learnt that the Chief Executive has, through various parties, liaised with the Taiwan authorities for Mr LIM Por-yan, a Hong Kong resident detained in Taiwan pending trial of a court case against him, to return to Hong Kong. In this connection, will the executive authorities inform this Council:

(a) of the justifications for taking the above action and the details of it;

(b) of the number and details of cases in which the Administration has taken actions to liaise for the return of Hong Kong residents who are detained by and facing trial in other jurisdictions since 1 July 1997; and

(c) whether they have assessed if there is any need to allay the public's concern on whether the Chief Executive has interfered with the judicial process in Taiwan?

SECRETARY FOR CONSTITUTIONAL AFFAIRS: Madam President,

(a) In early October 1998, Mr LIM wrote to the Chief Executive seeking assistance to request the Taiwan authorities to allow him to return to Hong Kong pending trial of a court case against him in Taiwan. As there is no official contact between the Hong Kong Special Administrative Region Government and the Taiwan authorities, the Office of the Chief Executive then referred the letter to the Hong Kong and Macau Affairs Office of the State Council, seeking their assistance to ask the appropriate authorities in the Mainland to convey the request to and follow up the matter with the relevant authorities in Taiwan.

In making the referral, the Government noted that Mr LIM is a Hong Kong resident and the humanitarian grounds advanced by Mr LIM.

(b) According to our records, the Government has rendered assistance to 189 Hong Kong residents who are detained by and facing trial in other jurisdictions since 1 July 1997. A rough breakdown of these cases are as follows:

Detention/Imprisonment	182
Death Sentence	3
Bail Out	4

(c) The Chief Executive fully appreciates that Mr LIM's case must be dealt with in accordance with the law in Taiwan. There is no question of any attempt to interfere with the judicial process in Taiwan.

Competition Policy Advisory Group

17. MR FRED LI (in Chinese): Regarding establishment by the Government of the Competition Policy Advisory Group (COMPAG) chaired by the Financial Secretary, so as to promote healthy free competition among public and private sectors, will the Government inform this Council of:

(a) the various issues in respect of competition policy for which reviews have been initiated by COMPAG since its formation in December 1997, and of the progress of these reviews;

(b) how COMPAG has motivated government bureaux, departments and the private concerns to enhance economic efficiency and promote free trade through competition, and of the effectiveness of such work;

(c) the total number of complaints received by the authorities concerned about organizations adopting anti-competition business practices in the past year; of the government departments or private concerns that were involved in these cases, and of the role played by COMPAG in handling these cases; and

(d) the channels through which the public can learn of the progress and the effectiveness of the work undertaken by COMPAG, and of the measures adopted by the Administration to enhance the operational transparency and accountability of COMPAG?

FINANCIAL SECRETARY (in Chinese): Madam President, the first major task of the COMPAG after its establishment was to formulate and promulgate a Statement on Competition Policy in May 1998. The Statement sets out clearly the objective of the competition policy, provides pointers for observance and lays down a comprehensive, transparent and over-arching competition policy framework. After the promulgation of the Statement, the Secretary for Trade and Industry wrote to Bureau Secretaries and Department Heads, urging all Policy Bureaux and departments to adhere to the Statement and propose initiatives to enhance competition. The Government also distributed copies of the Statement to trade organizations and chambers of commerce to encourage them to enhance economic efficiency and free trade through competition on a voluntary basis. At the same time, the Government started to review its own practices to ensure that the objective of enhancing competition would be attained.

COMPAG has, in conjunction with Policy Bureaux, completed a preliminary review on a number of government practices and related activities from the competition policy standpoint. COMPAG is now actively examining those areas where competition could be further enhanced.

Since the promulgation of the Statement, COMPAG and Policy Bureaux have received a total of 10 complaint cases against organizations adopting anti-competitive practices. A list of the involved public and private sector organizations is at Annex. In general, the relevant Policy Bureaux and government departments will examine the complaint cases and report outcome including way of handling to COMPAG. COMPAG will study those cases which carry significant implications on government policies and overall operation.

COMPAG will inform the public of progress of its work through appropriate channels early next year.

Annex

　

Public and Private Sector Organizations Allegedly

Involved in Anti-competitive Practices

- Railway corporation

- Private property developers

- Printer suppliers

- Construction materials suppliers

- Telecommunications service provider (two cases)

- Government-subvented bodies

- Banking sector

- Live chicken wholesalers

- Private Sector Participation Scheme developers

Disposal of Plastic Waste

18. MR ERIC LI (in Chinese): In view of the environmental pollution caused by plastic waste, will the Government inform this Council:

(a) whether it has estimated the respective percentages of the amount of plastic waste against the total amount of waste discarded by the public in each of the past three years;

(b) of the plans in place to urge the public to discard fewer plastic articles;

(c) whether it will consider stepping up publicity to educate the public regarding waste separation at the time of disposal; and

(d) whether it will consider imposing levies on those people who dump plastic waste at landfills?

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Chinese): Madam President,

(a) Plastic waste comprised about 16% to 17% of the municipal solid waste disposed of at landfills in 1995 to 1997.

(b) The Government launched the Waste Reduction Framework Plan on 5 November 1998. The Framework Plan aims to reduce the amount of municipal solid waste disposed of at landfills by 58% within 10 years. Under the Framework Plan, we encourage people to participate in waste reduction by avoiding purchasing goods with unnecessary or non-recyclable packaging, to re-use suitable goods or materials instead of throwing them away, to segregate and return bottles for recycling, and dispose of waste properly.

Specifically, we have been working on a range of measures to minimize the amount of plastic waste being discarded:

- A site in Tuen Mun has been leased under a restricted tender for a short term tenancy to a local plastic waste recycler.

- A pilot material recovery project is being conducted in 83 housing estates to encourage residents' participation in waste reduction from October 1998 to February 1999. This includes the separate collection and transportation of the plastic waste to local recyclers.

- We are examining the feasibility of introducing a plastic coding system based on international business practices, to facilitate the sorting and recycling of plastic waste.

- We are processing an amendment to the Building Regulations to provide extra space at refuse storage chambers to facilitate material recovery in all new buildings.

In addition, the Waste Reduction Framework Plan sets out a number of schemes that will contribute to reducing the amount of plastic waste. These include the "producer responsibility" and "wastewise" schemes. These schemes will be developed and implemented by the Waste Reduction Committee with support from the Environmental Protection Department (EPD) and waste reduction task forces.

(c) We accept that it is important to promote waste separation at the time of disposal and we are doing so through a number of publicity and education programmes. These include the EPD Waste Reduction and Recycling Hotline which has been providing advice and information on waste reduction to the public since 1991. We have recently extended this service to Internet users. In addition, videos and other publicity materials are widely distributed to promote waste reduction and separation at home and in offices. The Environmental Campaign Committee is running a waste recycling competition for waste paper and aluminium cans in 132 housing estates from October 1998 to April 1999.

Nonetheless, in accordance with an environmentally responsible waste management hierarchy, priority will be given to the avoidance and minimization of waste over re-use or recycling, just as priority will be given to recycling over bulk waste reduction and final disposal. Whilst much of our visible efforts in the coming years will be dealing with the disposal of the waste produced, even more emphasis, often unseen, will be on working with business and industry to avoid the production of waste in the first place.

(d) The "Polluter Pays" and "User Pays" Principles are important waste management tools. The Administration is considering how to introduce transparent, equitable and effective charges for waste disposal that will provide incentives for the reduction of waste and promotion of recovery, re-uses and recycling of materials, including plastics.

Review of Air Cargo Service

19. MISS CHOY SO-YUK (in Chinese): The import and export of air cargo were seriously affected by the recent power failure at the Super Terminal 1 operated by Hong Kong Air Cargo Terminals Limited (HACTL). In this connection, will the Government inform this Council if it knows:

(a) whether the Airport Authority (AA) has plans to review the terms of the agreement it has signed with HACTL and bring in more air cargo terminal operators, so as to ensure fair and healthy competition in the air cargo terminal business; if so, of the timetable for the review; if not, why not; and

(b) whether, before making a decision on the review, the AA will assess if its decision will impose upon itself the liability for compensating those affected by a delay as a result of a similar incident occurring at any of the air cargo terminals in the future?

SECRETARY FOR ECONOMIC SERVICES (in Chinese): Madam President, according to the AA, the power failure at part of the Super Terminal 1 in mid-October had only slightly and temporarily affected the overall cargo handling service at the new airport. HACTL has taken action to address the problem and at present, the two air cargo franchisees together handle an average of 5 000 tonnes of cargo per day.

In relation to parts (a) and (b) of this question, the AA has advised that:

(a) Competition already exists in air cargo handling at the new airport. Compared to Kai Tak where all cargo went through one operator, the new airport has two operators on top of the four specialist express cargo operators who handle their own goods. The existing franchise agreements already provide for a mechanism for introducing additional franchisee(s) where appropriate. The AA will regularly and closely monitor the need for the introduction of new franchisee(s), taking into account factors such as the prevailing market condition, terms of the franchise agreements as well as the operation of the present franchisees.

(b) The cargo franchisees operate under franchises as independent business operators. Customers enter into agreements directly with them for the provision of their services. The AA does not have a contractual relationship with franchisees' customers and does not consider that it is liable to them, if services are not provided or are otherwise unsatisfactory.

Subsidies to Children of Families Receiving CSSA

20. MR YEUNG YIU-CHUNG (in Chinese): Will the Government inform this Council:

(a) among the families receiving the Comprehensive Social Security Assistance (CSSA), of the number of those which have children studying in primary and secondary schools, and the number of such students;

(b) whether the education expenses of these students are fully subsidized by the relevant authority; and

(c) of the current amount of subsidies provided to these students, together with a breakdown of the subsidies by category of subsidized items?

SECRETARY FOR HEALTH AND WELFARE (in Chinese): Madam President,

(a) Based on the findings of an annual study on the CSSA recipients conducted by the Social Welfare Department (SWD) in 1997, there were about 30 000 CSSA cases which involve families having one or more children attending primary or secondary schools. The total number of such children was 53 000.

(b) Children on CSSA may apply for special grants to cover their education related expenses. Grants to cover school fees, public examination fees and fare to and from school are payable on a reimbursement basis. Full-day students taking lunch away from home will receive a flat rate of $220 per month as meal allowance. In addition, a flat-rate grant ranging from $1,350 to $4,130 will be given to children attending classes in day nursery, primary or secondary schools to meet expenses on school uniforms, text books, stationery, and other miscellaneous and minor expenses.

(c) We do not maintain records on the total amount of payment granted under different types of special grants.

BILL

First Reading of Bill

PRESIDENT (in Cantonese): Bill: First Reading.

ADAPTATION OF LAWS (NO. 9) BILL 1998

CLERK (in Cantonese): Adaptation of Laws (No. 9) Bill 1998.

Bill read the First time and ordered to be set down for Second Reading pursuant to Rule 53(3) of the Rules of Procedure.

Second Reading of Bill

PRESIDENT (in Cantonese): Bill: Second Reading

ADAPTATION OF LAWS (NO. 9) BILL 1998

SECRETARY FOR FINANCIAL SERVICES (in Cantonese): Madam President, I move the second reading of the Adaptation of Laws (No. 9) Bill 1998. The purpose of the Bill is to adapt 14 banking and financial services-related ordinances to bring them into conformity with the Basic Law and with Hong Kong's status as a Special Administrative Region of the People's Republic of China.

Despite their specific interpretations as prescribed under both the Hong Kong Reunification Ordinance and the Interpretation and General Clauses Ordinance, terms and phrases that are in contravention of the Basic Law or not in conformity with Hong Kong's status as a Special Administrative Region of the People's Republic of China will not be acceptable as terminology of the laws of Hong Kong. Thus we must introduce the Bill to amend the terms and phrases used. The proposed amendments are mainly related to the wordings of the Ordinances. As regards the reference to "Her Majesty the Queen, Her Heirs or Successors", it would be amended as "the Central People's Government or the Government of the Hong Kong Special Administrative Region" in accordance with the provisions set out under Annex III (Item 10) of the decision to handle the laws previously in force in Hong Kong made by the Standing Committee of the National People's Congress in the light of Article 160 of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China.

Under Article 12 of the Hong Kong Bill of Rights, the proposed adaptations when passed into law shall take effect retrospectively from the date of the establishment of the Hong Kong Special Administrative Region. I hereby urge Honourable Members to lend their support to the Bill which has obviated the need to make reference to the Hong Kong Reunification Ordinance and the Interpretation and General Clauses Ordinance. Thank you, Madam President.

PRESIDENT(in Cantonese): I now propose the question to you and that is: That the adaptation of laws (No. 9) bill 1998 be read the second time.

In accordance with Rule 54(4) of the Rules of Procedure, the debate is now adjourned and the bill referred to the House Committee.

MEMBERS' MOTIONS

PRESIDENT (in Cantonese): Members' motions. Two motions with no legal effect. I have accepted the recommendations of the House Committee as to the time limits on speeches for the motion debates. The movers of the motions will each have up to 15 minutes for their speeches including their replies, and another five minutes to speak on the amendments. The movers of amendments will each have up to 10 minutes to speak. Other Members will each have up to seven minutes for their speeches.

First motion. Information technology strategy.

INFORMATION TECHNOLOGY STRATEGY

Mr SIN Chung-kai (in Cantonese): Madam President, I move the motion which has been printed on the Agenda.

In regard to the motion I have just moved, I should like to thank the Honourable Miss Emily LAU in the first place. Since as early as the 1996-97 Session when she was Chairman of the Panel on Information Policy, Miss LAU has been discussing proposals regarding information infrastructure and inviting both the academia and the information technology (IT) sector to express their views on the issue. Apart from that, Miss LAU has also given impetus to the setting up of the Information Infrastructure Advisory Committee (IIAC) under the Office of the Telecommunications Authority by the Government. On 20 June 1997, the House Committee accepted the proposal put forward by the Panel on Information Policy and wrote to the then Chief Secretary, Financial Secretary as well as the Chief Executive (Designate) to urge the Government to establish a higher level committee to promote the development of information infrastructure. In 1997, the Chief Executive put forward in his first policy address the proposal of "Connecting to the Information Age"; then in April this year, the Information Technology and Broadcasting Bureau (ITBB) was set up to formulate strategies and policies in this respect. Subsequent to explanation given by the Secretary for Information Technology and Broadcasting after the publication of this year's policy address, a detailed copy of the IT strategy Digital 21 was formally published on last Monday, 16 November.

The Chinese translation of the motion I have moved today should read as follows:“本會促請
政府加快推行“數碼21新紀元”資訊科技策略，並為落實該項資訊科技策略制訂全
面的綜合計劃，其中應包括政府各政策局、工商界及學術界的共同參與，以及把重
點放在資訊科技知識的教育、培訓及推廣工作，使香港發展成為一個數碼城市；此
外，政府應確保本港的資訊科技基建可互相兼容及連通，保障知識產權，並確保市
場開放及公平競爭，以鼓勵私營機構率先推動資訊科技發展。”

In fact, I have been comparing the IT development plans of other countries in terms of their policies and strategies over the past year. As regards the proposal Digital Hong Kong 2005 I published in August this year, its aim is to enhance people's competitiveness and productivity with the help of IT, and thereby enable the public to enjoy a better quality of life in the information age. The proposal has been submitted to the ITBB in August this year.

As representative of the IT industry, I should like to state here that we welcome the IT strategy plan Digital 21, and that we urge the Government to speed up the implementation of the initiatives proposed under Digital 21.

1. The aim of Digital 21, as set out clearly in its paragraph 1.2.4 is to "enhance and promote Hong Kong's information infrastructure and services so as to make Hong Kong a leading digital city in the globally connected world of the 21st century."

2. Major objectives proposed under Digital 21 encompass areas such as electronic device delivery infrastructure, development of Hong Kong into a regional Internet hub, establishment of Certification Authorities, e-commerce legislation, IT industry support, IT in the community and so on.

3. Digital 21 will be implemented forthwith through 2002. Hence the question of how Digital 21 compares with IT strategies of other neighbouring countries and areas merits detailed examination. With regard to this Digital 21 IT strategy formulated by the Government, we should consider whether it is able to lead Hong Kong into the information age of the 21st century. Hence, we need to look into the policies and development plans of other countries in this respect. Madam President, I have furnished Honourable Members with several sheets of plain information the day before, with a view to providing them with some basic understanding of the IT strategy plans of other countries.

I hope that Honourable Members could spend some time browsing through the web pages of the relevant bodies in other countries to gain a clearer picture of how their IT plans progress.

Madam President, while the world of IT could extend beyond any limit, the use of IT could shorten distances on the globe and enhance the people's right to access information. One merit of IT as an industry is that it could create wealth for the community; indeed, the substantial economic growth enjoyed by the United States in the past five years is largely attributable to the country's unrivalled IT industry. Another merit of IT, which is more important in my opinion, is that it could enable the various trades and industries in Hong Kong to enhance their competitiveness.

IT is a broad cross-section of the community and encompasses almost all policy areas, hence the application of IT in various sectors are easily recognizable. To cite a few examples: in import/export trade, customs declaration can be made via electronic means; in the banking industry, electronic or home banking has been introduced; and in transport systems, the Octopus card can be used to pay fares. Indeed, Hong Kong has also attained certain achievements in the use of IT. With regard to the use of IT in political elections, Peru has recently been developing electronic voting applications which could identify voters by their fingerprints. IT will transform the way we live, and scenes which we used to see in movies will come true one day. In the United States, many candidates have made use of the Internet to appeal to voters in a recent mid-term election. Perhaps Honourable colleagues may consider doing the same when running in future elections.

Digital 21 has undoubtedly taken Hong Kong a large stride forward in IT strategy planning and therefore merits our support. Nevertheless, we still need to raise this question: How adequate is Digital 21 as an IT strategy? For this reason, I should like to express my views on the following areas.

1. Digital 21 concerns mainly the approach of the ITBB to implementing IT policies, other policy areas are hardly mentioned of. I do not wish to discuss at any length how each and every policy area could contribute to IT development, since my fellow colleagues from the Democratic Party will be speaking on their relevant policy areas respectively. The Honourable Albert HO will expound on the impact of IT on financial policies; the Honourable Fred LI, communication and media development; the Honourable LAW Chi-kwong, on the issue from a social point of view; and the Honourable CHEUNG Man-kwong, IT in education. I should like to emphasize one point and that is, IT is a cross-section which encompasses all policy areas; as such, my motion has urged not only the ITBB but also the other Policy Bureaux to participate in formulating implementation plans for Digital 21.

2. Greater participation in the international community. Participation in the international community can be classified into two levels, the official and the unofficial. At the official level, the Administration has all along been actively participating in the World Trade Organization, the Asia-Pacific Economic Cooperation, and even in signing technological exchange agreements with individual countries like Canada and Australia. There are, however, many unofficial organizations in the information world, or the cyber world, the development of Hong Kong in this respect has been less enthusiastic, compared to that of other advanced countries. Perhaps the formation of such local organizations has yet to be mobilized. Hence the ITBB should investigate how to promote the establishment of such organizations in Hong Kong. To cite an example, the CommerceNet and the Internet Society are global organizations formed with the aim to promote electronic commerce and to keep a close look on the associations developed on-line. The local IT sector has recently indicated an interest in attracting the Internet Society to conduct its INET conference in Hong Kong in 2000. I therefore urge the Government to follow up the issue closely and to offer appropriate support when required.

3. IT strategy planning and IT think-tank. Given the rapid pace of changes in technology, IT strategy planning is a painful long term task. As a matter of fact, we need to consider whether the resources of the existing Policy Bureau or the Information Technology Services Department are sufficient to achieve the goal. In regard to the IIAC set up by the Government, I need to urge the Government to consider providing the Committee with better support, since it lacks full-time policy researchers.

4. Formulation of benchmark. To implement Digital 21, we must establish a set of objective benchmarks. Examples of such benchmarks include the ratio of IT investment to GDP, the volume and rate of on-line or electronic transactions, the rate of household computer ownership, Internet subscribers and so on. The Census and Statistics Department should investigate how such data could be collected effectively and disclosed regularly to investors or participants in the market, with a view to making the data useful to formulation of future policies.

5. Consider setting up an IT development fund. At present, the Industrial Support Fund set up under the Industry Department is financing projects beneficial to the development of industry and technology in Hong Kong, a point which is also mentioned in Digital 21. However, I can point out here that the concept of industry is most often interpreted as "manufacturing industries" by both the Department and the Fund. Whether it is for systems programme or applications programme, programme development itself is an industry; as such, I need to request the Industry and Trade Bureau to review the relevant fund application requirements. On the other hand, the IT development fund I proposed just now is more community-oriented, since I believe the Government should consider setting up funds that contribute to the benefits of the community as a whole.

6. Private sector participation. While Digital 21 is certainly a government policy, despite the various efforts made by the Government, there is still no guaranteed success for our pursuit of the targets set out under the IT strategy. For this reason, we must attract private sector participation to make Digital 21 a success.

7. Annual review and revision exercise. The present IT strategy plan is but a starting point, it should be reviewed every year to assess the pace of progress, assimilate new ideas and update the initiatives, so as to best prepare Hong Kong for the advent of the information age. In my capacity as representative of the IT sector in this Council and as Chairman of the Panel on Information Technology and Broadcasting, I look forward to conducting hearings in the future to collect views from across the community.

Last but not least, I should like to speak on the issue of promotion. The competitive strengths of Singapore have been compared to that of Hong Kong in an item-by-item manner during many recent discussions. Hong Kong still has many strengths. Indeed, as Mr KWONG Ki-chi has referred to in his reply to the policy debate on 4 November, we should not belittle ourselves at all. Nevertheless, I must admit that Singapore has cultivated an image of a successful country in the international community. I am referring to the country's international image only; I do not think it is very successful in reality. But in any way, Newsweek has included Singapore as one of the 10 New Tech Cities in its issue dated 9 November. In regard to the efforts to promote the Digital 21 IT strategy, the Central Policy Unit should really launch a worldwide promotional project to attract investment into Digital 21.

Response to the amendment proposed by the Honourable YEUNG Yiu-chung:

I should like to spend a little time on the amendment proposed by the Honourable YEUNG Yiu-chung. I welcome Mr YEUNG's amendment because it reflects the importance Mr YEUNG has attached to IT. Nonetheless, I still consider the rationale for the proposed amendment open to discussion:

1. First of all, Mr YEUNG has talked about setting clear objectives in his amendment. I should like to reiterate that the aim of Digital 21, as set out clearly in its paragraph 1.3.4, is to "enhance and promote Hong Kong's information infrastructure and services so as to make Hong Kong a leading digital city in the globally connected world of the 21st century." Mr YEUNG has incorporated part of this aim into his amendment, but I think this would just ruin the effect of the original motion, not much unlike an effort to gilt the lily. To put it in simple words, Mr YEUNG's objective is much narrower than that of Digital 21, as he only aims at making Hong Kong an Asian hub for IT. I think the Secretary could explain that in better detail later. I believe the objective of Digital 21, which is to develop Hong Kong into one of the world's leading digital cities, is much better than one which confines hong Kong to Asia only.

2. As regards the part on "the Government should take the lead to encourage participation of the business sector through the various bureaux", I think it is unacceptable. My point is that the Government should formulate the relevant policies in collaboration with the business sector; it should never try to instruct the business sector to implement the policies drawn up without consultation. The IT strategy will impact on the community as a whole, hence it should be implemented by the three parties together. In addition, Mr YEUNG has proposed to delete the last sentence, which concerns the private sector. I think it is very inappropriate. in his letter to Members, Mr YEUNG has referred to the American experience and claimed that as a "state-led" example. I think that is not true. Mr YEUNG's letter has also referred to a paper entitled "A Framework for Global Electronic Commerce". The first of the six principles put forward in this paper is that "private participation should take the lead". In regard to Mr YEUNG's letter to Members, I think one sentence has summed up his rationale for the amendment: IT development should be "state-planned and government-led", legislation and policy come first, experimentation to follow. IT development based on "free thinking", "creativity-led" and "market-based" concepts, however well-intended, will only serve to ruin the desired effect.

Madam President, I beg to move and recommend my motion to Members.

Mr SIN Chung-kai moved the following motion:

"That this Council urges the Government to speed up the implementation of Digital 21 and to substantiate this information technology (IT) strategy with a comprehensive and integrated plan which should encompass participation of various government bureaux, the business sector and the academia and put emphasis on education, training and promotion of IT literacy, with a view to transforming Hong Kong into a digital city; furthermore, the Government should ensure interoperability and interconnection of Hong Kong's IT infrastructure, protect intellectual property rights and encourage the private sector to take a lead in IT development by ensuring an open market and fair competition."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr SIN Chung-kai, as set out on the Agenda, be passed.

PRESIDENT (in Cantonese): Mr YEUNG Yiu-chung will move an amendment to this motion, as printed on the Agenda. In accordance with the Rules of Procedure, the motion and the amendment will now be debated together in a joint debate.

I now call upon Mr YEUNG Yiu-chung to speak and to move his amendment.

MR YEUNG YIU-CHUNG (in Cantonese): Madam President, I move that the motion moved by the Honourable SIN Chung-kai be amended as set out on the Agenda.

By moving this amendment, the Democratic Alliance for the Betterment of Hong Kong (DAB) aims to clarify the three directions set out in the Digital 21 information technology (IT) strategy. First, the turning of Hong Kong into a digital city is essential a technical matter, and Hong Kong must properly position itself. Second, as far as IT development is concerned, and with particular respect to the provision of IT infrastructure, we should not rely on the private sector to take the lead and do all the work required. Third, Hong Kong should have a locally rooted IT industry, and, preferably, such an industry should seek to make products which can facilitate the development of other industries in Hong Kong, so as to increase our community's overall wealth and create more job opportunities.

The policy address this year puts forward a new direction for our IT development: "To make Hong Kong a leading digital city in the globally connected world of the 21st century". In its Digital 21 IT strategy, the Information Technology and Broadcasting Bureau has also made this its aim. And, in its report, the Commission on Innovation and Technology also points out that "a fundamental challenge is how Hong Kong should position itself in the knowledge-based global economy of the 21st century". The DAB is of the view that the turning of Hong Kong into a digital city is essentially a technical matter, and when Hong Kong invests huge resources for this purpose, it must first properly position itself. Furthermore, the work of turning Hong Kong into a digital city should not be regarded as a separate undertaking; rather, all related efforts must keep in step with the development and needs of the economy as a whole, so as to bring forward a complementary relationship. We hope that as Hong Kong strides to turn itself into a digital city, it can at the same time become the IT hub of Asia.

The role of the Government as a "locomotive"

The most notable feature of any IT development should be "government leadership", some good examples being Singapore, Japan and even the United States. So, in Hong Kong, we should all expect the Government to show a greater commitment in the three areas of IT infrastructure, IT personnel training and the work of fostering a locally rooted IT industry.

A broad-band network covering the whole of Hong Kong

Telecommunications infrastructure is essential to the IT development of any society, and this is why all major countries in the world have made strenuous efforts to build up a high-capacity broad-band network characterized by speedy transmissions and stability. As at June 1998, 11% of the population of Hong Kong were Internet subscribers, and it is expected that in 1999, this figure will increase by 70% to 100%. And, the development of electronic government and electronic commerce has also exerted pressure on existing networks and systems. But the Hong Kong Government has still failed to implement any measures to build up a sound broad-band network covering the whole of Hong Kong. We really need to consider this very carefully.

I believe that many people who use network systems have all experienced the problem of slow transmission. And, many people are not yet able to enjoy broad-band network services. Therefore, in order to build up a sound network system, Hong Kong must continue to improve the backbone of its existing cable networks by adopting various technologies. That way, it will be able to gradually remove all those technical problems standing in the way of speedy transmissions. But the private sector should not be relied upon to tackle this problem, and the Government must instead take the lead.

Actually, I very much hope that the Government can tell us one thing. In its view, what transmission speed is required if the general public are to use network services smoothly in the future? If the Government does not have any relevant standard in this regard, how can it assess whether the network size of Hong Kong in the future can support the needs arising from its strategic development in IT? I once head a network expert say that for an average household user, a minimum speed of 2.5Mb is required to satisfy advanced technological requirements. How does the Government think about this?

Manpower training

Investments in manpower is very important to IT development. The term "manpower" involves two aspects. The first aspect concerns the ability to develop the required "software" and "hardware" and the availability of information network management professionals. The second aspect involves the presence of consumers, consumers who have received good basic education and who are able to benefit from network services. Both of these two are essential to the IT market.

That Hong Kong has not invested enough in technological research is an incontestable fact. The technological research funds granted by the Hong Kong Government to our tertiary institutions amount only to 0.27% of our Gross Domestic Product, and this is even lower than the 1.5% in the Mainland. But to be fair, Hong Kong is after all not a country, and, for this reason, it cannot possibly set up any national research institutes or laboratories as such. Besides, since Hong Kong does not need to develop any defence industries, it is only understandable that it has lagged behind other Asian countries in terms of "hardware" research such as the technologies of manufacturing sophisticated semi-conductors. That said, there are still a lot of room for Hong Kong to develop its "software" research and development work. Research work in this direction can cater for the needs of Hong Kong itself on the one hand, and also cater for the needs of other Chinese communities on the other.

Some IT professionals have recently approached me, saying that what the IT sector now needs most badly are technicians at the middle and lower levels. If Hong Kong cares only about the recruitment of top-level IT professionals and ignores the importance of middle- and lower-level support, very soon a vacuum will emerge. Some people in the IT sector have thus advised the Government to train up the personnel required as soon as possible in the form of employees retraining.

An IT industry rooted in Hong Kong

What distinguishes the IT industry from conventional industries is that its "hardware" is a high-capacity broad-band communication system capable of fast transmissions, and its "software" is a group of professionals capable of managing information systems and developing both "hardware" and "software" facilities. Its products can be physical goods, but they can also be new technological concepts, or even new services. In other words, its products can both be tangible and intangible.

For this reason, when it deals with this emerging industry, the Government must make some conceptual adjustments and put its focus on making long-term investments in manpower resources, because in the IT market, the most valuable assets are often people who have "brains".

Hong Kong has not made an early start to develop IT. If it is to catch up with others, there are two alternatives. The first one is to make use of foreign investments and IT talents. The second one is to train up the required personnel itself. The former is nothing but a stop-gap measure, and the latter is the only ultimate solution.

I wish to point out that if Hong Kong is to become a leading digital city, or if it wishes to gain a place in the global economic competition, the purchase of information technologies from other places must not be relied upon as a long-term measure. This is because it will certainly be more costly to purchase IT products from other places than to produce them locally. What is more, we will thus always lag behind others, because there is no way that the IT products which we purchase can ever be more advanced than those used in the supplying countries. But if we can develop new and innovative IT products ourselves, we will be able to turn our passive position into an active one. That way, we will be able to enhance our competitiveness in the knowledge-based economic competition of the 21st century.

I have recently read a document which reveals that the United States is now opening its door wide to IT professionals by increasing the quota of work visas to some 100 000. And, it is very likely that the quota will be further increased. Canada estimates that by the year 2000, two in 10 of the country's IT graduates will be working in the United States. So, if Hong Kong wishes to have a locally rooted IT industry, it must seek to retain its most valuable asset ─ IT professionals. If not, Hong Kong will have its fruits of hard work stolen and become a mere springboard for those IT professionals who want to emigrate.

Finally, let me point out that the IT industry should not be developed as if it is an entirely separate entity; rather, its development must always keep in step with all the other aspects of society. For this reason, the Hong Kong Government should actively encourage and promote the widespread application of IT among members of the public and private sector organizations, so as to raise the overall IT literacy of Hong Kong. Some IT professionals have recently said to me that the Government should seek to lower the costs of IT application as much as possible, so as to make IT affordable to the majority of people and institutions.

With these remarks, Madam President, I hope that Honourable Members can all support my amendment. Thank you.

Mr YEUNG Yiu-chung moved the following amendment:

"To delete "speed up the implementation of" after "That this Council urges the Government to" and substitute with "set clear objectives for Hong Kong's information technology (IT) strategy, so that while Hong Kong is moving towards the era of"; to delete "and to substantiate this information technology (IT) strategy with a comprehensive and integrated plan which should encompass" after "Digital 21" and substitute with ", it is advantageously placed in the world of IT internationally and becomes an Asian hub for IT; in addition, the Government should take the lead in promoting IT applications and developments, encourage"; to delete "various government bureaux," after "participation of"; to add "through the various government bureaux," after "the business sector and the academia"; to delete ", with a view to transforming Hong Kong into a digital city" and substitute with "so that Hong Kong has an IT industry rooted locally"; to add "in providing supporting facilities," after "furthermore,"; to add "and its compatibility with IT systems around the world, introduce appropriate regulatory legislation" after "Hong Kong's IT infrastructure"; and to delete "encourage the private sector to take a lead in IT development by ensuring" and substitute with "maintain"."

THE PRESIDENT'S DEPUTY, DR LEONG CHE-HUNG, took the Chair.

DEPUTY PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment moved by Mr YEUNG Yiu-chung be made to Mr SIN Chung-kai's motion.

Does any Member wish to speak?"

MR HOWARD YOUNG (in Cantonese): Mr Deputy, information technology (IT) development is a worldwide technological trend, and IT looks set to shape the economic development, information exchanges and quality of living in all places of the world. As an important financial and economic hub of the Asia-Pacific Region, Hong Kong must attach due importance to the upgrading of its information exchanges and IT, and it must also do all it can to make itself a centre of IT and related resources in the Region.

In Digital 21, a recently published document on IT strategy, the Government sets out a series of recommendations on IT development. The directions of development identified in the document are correct, and if all the recommended objectives can be achieved, the competitiveness of Hong Kong will be greatly upgraded, and so will its people's quality of living.

The Liberal Party supports the recommendation of the document that we should turn Hong Kong into a hub of internet communications and IT in the Asia-Pacific Region, in addition to making it a leader in IT development. However, full-scale IT development will require much more than the developments in telecommunications infrastructure, software support, regulation and legislative control; people's knowledge and acceptance of IT, and their willingness to apply it to every aspect of their everyday life, are also essential. In November last year, the Department of Journalism and Communication of the Chinese University conducted a telephone opinion survey, and managed to gauge the views of 709 people. The findings of this survey indicate that 56.6% of all families in Hong Kong have their own computers. But this high percentage should not be taken to mean that the people of Hong Kong can generally grasp the know-hows of IT, because only 29.4% of all the respondents are subscribers to Internet services. I can perhaps illustrate my point further by drawing Honourable Members' attention to a more familiar example. A survey conducted in the United States indicate that 91% of all American families have their own video-recorders, but many of these families do not know how to set the timers of their video-recorders. As a result, the time displayed by the video-recorders of these families is always a flashing 00:00. Mr Deputy and Honourable Members, is the time displayed by the video-recorders at your homes also a flashing 00:00? Many people own high-tech products, but very few of them really know how to use them to upgrade their quality of living. In view of this, while the Government seeks to promote IT, it must also make the common masses realize the advantages of IT and stimulate their willingness to apply it. In this regard, education is an important fundamental job.

At present, the work of the Government on IT education is mainly directed at schools, with the result that the wider community may not have any chance to get to know and apply IT. That is why the Government should widen the scope of IT education by reaching out to all localities, and it should also introduce IT to the common masses through different channels. It should take proactive steps to introduce the general public to the merits of IT; one example of such steps is the installation of Internet facilities at different community centres for use by the public. It may also assist community organizations in running related courses, so as to promote IT application everywhere in society. People's application of IT in their daily life will great facilitate and assist the development of IT.

Besides, if the Government wants to encourage local companies and enterprises to make use of IT, it must set an example itself by upgrading the IT equipment and knowledge of its various departments. At present, the computer equipment of many government departments is still very backward. I have heard that the CPUs of many government departments are still of the 386 model, and, to them, network facilities and Internet services are simply altogether alien. Even in the Legislative Council, the computer and network facilities provided by the Secretariat to Members are also very out-dated. The software provided is still Window 3.1, which is unable to access the Internet. What is more, Members are not allocated any e-mail addresses of their own. So, many Members rarely use the computer system because of its out-dated functions. The Government should set a good example itself by taking immediate steps to improve the computer equipment and IT systems of its various departments. It should launch a full-scale computerization and IT application exercise in all its departments. This will not only enhance its efficiency and improve its quality of services, but will also deliver a message to the whole community that it is determined to go ahead with the full-scale development of IT. Besides, since electronic transactions have become increasingly common in international trade, the Government should draw up an integrated plan on promoting IT among small and medium enterprises, so as to help them upgrade their IT technology and apply it to business transactions.

Actually, an effective use of IT can greatly boost business development and improve service quality. In the case of the tourism industry, for example, some people once questioned the wisdom of IT application, saying that this would probably produce adverse impacts on the industry. They argued, for example, that foreigners could get to know or even visit Hong Kong by applying the technology of "virtual reality". In that case, these people often asked, why should foreigners still bother to visit Hong Kong physically? These people also feared that IT might reduce people's desire to go on business trips because the technology of "electronic conferencing" could enable people to conduct multi-national meetings. But all these are misconceptions. We should seek to apply IT more effectively, so as to improve our service quality. For example, we should make our tourism homepages more appealing as a means of attracting tourists to Hong Kong. For airlines and travel agencies, they may also provide Internet services to enable tourists to make purchases and arrange their travel schedules. IT can bring people closer together, but it will not cut off the contacts among them. So, a full-scale application of IT in commences will only produce positive effects on the services industries.

With the advent of the year 2000, and faced with the rapid advancements in IT, Hong Kong must not allow itself to lag behind others. While the Government seeks to draw up the directions of IT development, it must also ensure that all the relevant plans can be implemented to enable Hong Kong to become a leading IT hub.

With these remarks, Mr Deputy, I support the motion moved by Mr Chung-kai.

PROF NG CHING-FAI (in Cantonese): Mr Deputy, the Government of the Hong Kong Special Administrative Region (SAR) has recently published a paper on its Digital 21 information technology (IT) strategy. In addition to outlining the blueprint for Hong Kong's IT development, the paper has also set out a policy direction which is more comprehensive and specific; as such, it should be welcomed. Strictly speaking, however, the paper has put a lot of emphasis on the blueprint for the application of IT and thus overlooked the strategies required to establish or support a locally rooted IT industry in Hong Kong. In my opinion, a comprehensive blueprint for IT development should be in line with the recommendation made by the Commission on Innovation and Technology, which is to develop Hong Kong into a regional centre of innovation and technology. For this reason, Mr Deputy, I should like to put forward here my suggestions with regard to the establishment of IT industry in Hong Kong.

IT industry has a very broad coverage, encompassing optical fibre technology, laser technology, integrated circuit technology, microelectronic technology and so on. Of these technologies, however, apparently not all could be developed successfully anywhere or everywhere; as such, countries or regions should choose the right fields in the light of their own superior conditions to embark on the development of IT industries.

If viewed from a vertical perspective, IT should comprise the following three elements: (1) scientific research, or the research and development of information science and IT; (2) electronic information-related industries; and (3) the application of e-information. In this connection, I think Hong Kong has all along been able to take pride in its application of e-information. Indeed, the Government also tends to focus on the development of electronic commerce-related services and software engineering. This is basically in line with the practical situations in Hong Kong.

With our excellent telecommunications infrastructure and our status as a cosmopolitan city, Hong Kong should have an advantage in seeking to develop our own IT industry. There have been suggestions that Hong Kong should co-operate closely with the Mainland in the development of scientific research, and that Hong Kong should have a sharper edge in opening up markets for Chinese language application software. On the question of co-operation between Hong Kong and its neighbours, Mr Deputy, I think that instead of confining ourselves to co-operation with the Mainland, we should act as a bridge between the two sides of the Straits or even take the lead in developing Chinese language interface.

In addition, I think Hong Kong could also take up a more active role in projects ranging from the development of Chinese language software to the standardization of terms. Speaking of the development of Chinese language software, I believe the efforts could also be applied to the field of electronic commerce, apart from the development of word processing software; as such, one could hardly estimate the market potentials of Chinese language software. If Hong Kong could make advancement in the development of Chinese language software, the development of Hong Kong into a leader in IT industry should not be a problem.

In regard to the development of Chinese language software, I should like to supplement that it should by no means be taken simply as the effort to rewrite or translate the applications and interfaces into chinese language ones as interpreted too literally by many people. What I am trying to point out here is that the development of Chinese language software, in the broad sense of the term, should be interpreted as the development of more sophisticated and high value-added software and application systems in the light of the culture and legislation prevalent in Hong Kong and their mainland counterparts.

At present, many people are of the view that Hong Kong's IT industry could gain an upper hand in but the development of Chinese language software. In reality, however, the competitive edge that Hong Kong has in developing application softwares is far greater than that. In this connection, the most important strong point we have is the successful management experience of certain sectors in our community, such as shipping, banking, medical services, estate agency and so on; and models of successful management are an essential factor fundamental to the success of any business applications programmes. Indeed, before purchasing any applications programmes, commercial institutions will look for, among other requirements, the management models they need; besides, they would also like to consult for reference the management models of other institutions that have also been included in the programme.

Furthermore, Hong Kong has also the advantage of bilingualism. In this connection, our bilingual capability is of help to not only the development of local businesses and industries but also, undoubtedly, to the development of IT industry. Besides, with the liberalization of the telecommunications market in Hong Kong in the next few years, a free flow of information would become possible; hence, Hong Kong will be able to develop into an electronic commerce centre for China and, more importantly, towards its goal of becoming an IT centre in Asia.

For this reason, I suggest the Government consider actively drawing on that $5 billion Innovation and Technology Fund proposed in the policy address to finance the collaboration of the business sector and the local software engineering enterprises in developing effective management applications programmes. By making full use of the advantage Hong Kong has in management experience, our intangible assets could be transformed into tangible assets on the one hand, and the development of the local software industry could be enhanced on the other.

Mr Deputy, it has been stated clearly in Digital 21 that the maintenance work of existing applications as well as more than two thirds of the new IT projects in the Government will be outsourced to the private sector as a measure to offer more business opportunities for the industry. I think this is a correct policy objective, as it could provide the industry with more room of survival without sacrificing the principle of cost-effectiveness.

Nevertheless, I should also like to point out that the mass majority of the local software and integrated systems engineering firms are very small in scale. In this connection, the 600-odd firms engaging in software services are staffed with, on average, only 18 employees each; besides, over 75% of the firms have employed less than 20 workers. Therefore, with a few exceptions, proper quality management mechanism is lacking in most of the software enterprises in Hong Kong. The situation has since remain unchanged. This could be an obstacle to the development of our IT industry.

Mr Deputy, IT development is a high value-added, high return and high risk industry; as such, it would hardly be possible for a small market like Hong Kong to develop IT products without any help or encouragement from the Government at a stage when the development of local IT firms have yet to mature. We could tell from Digital 21 that the Government really has the intention to develop IT industry. However, if the Government is to develop a locally rooted IT industry for Hong Kong, it needs to consider more thoroughly on the one hand, and have the determination to play a leading role on the other. In my opinion, the ability to use IT is certainly one important target, but an even more important target should be to enable the IT sector to take up a reasonable share of our economic activities as a whole.

With these remarks, I support the motion.

MR CHEUNG MAN-KWONG (in Cantonese): Mr Deputy, we all have to prepare for the approach of the Digital 21 era, regardless of whether it is something new or something we have long expected for. The approach of the digital era marks the start of another campaign to eradicate illiteracy. We will be learning and making use of a new digital system which enables us to be linked to the world and benefits us for the rest of our lives.

If Hong Kong is to enter the world of IT, we will have to implement an Operation Hope to reshape our future completely. The first thing we must do is to enable every family or even every desk to be equipped with a personal computer for learning purposes and for people's daily uses, just like the advent of the 20th century when each child had the chance to read and the right to receive education. As such, the most fundamental condition to make full use of IT is to enable all teachers and students to have their own computers, so that each of them could have a bridge of access to the world.

The IT education provided by the Government is biased towards group learning at school. It does not place as much emphasis on self-learning at home. That is why the Government can spend $2.8 billion on IT education at school but is reluctant to spend a dime to subsidize penniless students to buy their own computers. The Government is also reluctant to use tax rebates to encourage teachers or the public to buy computers. Such a kind of IT strategy which favours only the schools but neglects the individuals is short-sighted and unbalanced. It would only serve to undermine the result of IT education, as it cannot help students develop their self-learning potentials. For penniless students, the lack of means to own a computer will deny them the access to a computer at home as enjoyed by other students. Insofar as the ownership of computer and knowledge is concerned, the community is thus polarized. This is a big hurdle for bringing the public up to date with the digital era.

Nowadays, the progress of the times has exceeded our expectations. The mode of education will change. Apart from formal education, all people, including adults who learn by themselves, can learn from the best teachers on the best courses through the computer at home. The greatest impact IT has on education is that it enables education to break through frontiers, removes limitations to learning, and allow potentials to be developed to the fullest. In the face of new changes, we must make haste to catch up with the times. We must pave the way for our education to access the information highway and browse and navigate freely in the information world of tomorrow.

If the school is to be made a starting point for the information highway, it must carry out construction for the new infrastructure. It must change its architecture to facilitate networking, so that every computer can be linked to the Internet. We must prepare every teacher and student psychologically for the arrival of the IT new era. We must discard some traditional teaching methods. Teaching by subjects or units or assessment by examination may become increasingly outmoded as they limit the outlook and potential of our students. What we need may be some integrated training to help us enhance our analytical power and problem-solving abilities in the rapidly-changing era.

Teachers surely need to grasp IT. They must regard IT application as not only a tool but, more importantly, a part of their lives. They should be at ease with the use of IT as they are with electrical appliances. They should not approach IT on guard. Another feature of the IT era is that teachers and students learn at the same pace, and that students may surpass teachers. As such, the retraining of teachers should not be restricted to the traditional teaching mode adopted by the Institute of Education or bound by a certain set of so-called benchmarks. This will become impracticable as in a fast-changing society, curriculum and benchmarks set by central authorities are often behind the times.

The only thing we can rely on is the insatiable quest for knowledge, which forms a life-long self-learning process without specific stages. This should be a demand made of teachers and students alike. Developments in IT requires us to make life-long learning a part of our life. Starting the computer, getting on-line, updating information, consolidating our knowledge, and learning continuously should be like our daily reading of newspapers and books. Otherwise we will be out of keeping with the times, and teachers behind the times will find it had to adapt to the 21st century.

To develop into a digital, inquisitive and intelligent city, Hong Kong must require IT. But it must be pointed out that despite all the IT, hardwares, softwares, networking, digitalization, sound effects, colours and advanced technology we have, the key is still human beings, coupled with social values, a desire to treasure knowledge and wisdom, and innovative ideas and outlook. IT education enables students to ask questions. What do we pursue? What do we want to gain? Information is not equivalent to knowledge. On top of IT, we have emotions, values and willpower, which should override everything. Human beings will eventually dictate the course of IT. Education should start from the person. We must not lose our way or become indulgent. We must not forget the basics. At a time when educators have to face a new era of digitalization, we need to emphasize humanism for the 21st century.

With these remarks, Mr Deputy, I support Mr SIN Chung-kai's motion.

MISS CHOY SO-YUK (in Cantonese): Mr Deputy, in the near future, using the computer to conduct video conferencing and electronic transactions, or the interactive television channel to shop on the Internet and manage personal finances and sundry payments will not be the monopoly of technological experts or senior executives. They will become an important facet of daily life for the Hong Kong public.

To give Hong Kong an early start in IT, we need to have precise objectives and systematic planning, in addition to foresight and a sense of proportion. The Digital 21 IT strategy published by the Information Technology and Broadcasting Bureau has suggested many measures to lead Hong Kong to become a hub of information in the Asia-Pacific Region. Nevertheless, I think that in implementing the measures, the Government must take note of these issues:

First, the issue of monopoly. An important factor in the promotion of development in IT is an open market and fair competition. Although there are at present 130 Internet service providers in Hong Kong, the Hongkong Telecom alone has acquired a market share of almost 50% even before its acquisition of the Star Telecommunications Limited. If the acquisition is successful, its market share will go up to 70%. There will be diminished competition in the market. This will not only slow down the development of IT in Hong Kong and undermine its competitiveness in the international market, but also creates a disincentive for investors in IT investment. An inevitable result is that people will have less and less choice. The Government has a real need to study expeditiously anti-trust measures.

The second issue is security. Hong Kong must speed up its electronic commerce and it must do well in this respect. But speed should not be achieved at the expense of supervision. In fact, in Hong Kong e-mail bombs, viruses and hackers are becoming a worsening threat. We must come to grips with tackling the problem. In Taiwan, the Government has been taking active measures to tackle the problem. In addition to formulating clear laws for supervision, they have set up a government certification centre to provide a safe and reliable environment for the supervision and control of electronic transactions. When we look at Hong Kong, we can find no complete set of laws for this. We do not even have any governmental organization to provide certification services or effect supervision. Therefore, the Government should learn from Taiwan.

The third issue is the quality of information. Pornography, violence and morbid information on the Internet is affecting the people, especially the younger generation. Moreover, false information on the Internet has an impact on society that may be greater than we can ever imagine. Up to now, there are a number of insurmountable difficulties in controlling information on the Internet. Therefore, a large proportion of the work of the Govenrment still lies in education and promotion. The Government has to issue guidelines to the people and youngsters. It also needs to quicken its research in the legal aspects to deter those who spread objectionable information on the Internet.

The protection of intellectual property rights is also an issue we cannot afford to overlook. In recent years, the Hong Kong Customs has seized an alarming amount of pirated computer softwares and video compact discs. Hong Kong has thus been named "the paradise of pirated goods" and blacklisted by the United States and Japan. The lack of protection for intellectual property rights is a major obstacle in our determined course of IT development, as it would kill the room of survival of creators, not least adversely affecting the trade relationships between Hong Kong and other countries. The Government must allocate more resources to the Hong Kong Customs and eradicate pirate activities with full force.

Mr Deputy, I so submit.

MR FRED LI (in Cantonese): Mr Deputy, in order for Hong Kong to become a digital city and an Asia-Pacific hub for IT, telecommunications and electronic commerce, the first thing we should do is to ensure the full liberalization of the telecommunications and broadcasting markets. In addition, we should establish a set of sound and reliable laws, complemented with a sound regulatory framework, in order to make Hong Kong a free telecommunications and broadcasting market with fair competition. Only with these three important factors can Hong Kong hope to catch up with the pace of IT development in our neighbouring countries. Of course, we must make even greater efforts in order to become a hub for electronic commerce.

Unfortunately, the present situation in Hong Kong is by no means optimistic. The Government seems to be playing a very active role, declaring that it will liberalize the telecommunications market, redeeming the international call service licence of Hongkong Telecom (HKT) with a huge compensation and carrying out all kinds of review and consultation. However, one after another example has told us that the Government is only paying lip service to market liberalization while adopting a hands-off policy. In the end, it has come to nothing. A very obvious example is the joke of HKT being fined a mere $20,000 for employing anti-competitive practices to solicit business. From this, it is clear that there is inadequate government supervision over this issue and it can hardly convince people that it is exercising supervision. The lack of supervision is the fatal weakness of the government policy at present. Even if better legislation is enacted, the development of telecommunications in Hong Kong will only go backwards if there is inadequate supervision.

Another example is an incident that occurred in the past few days. HKT is engaging in negotiations to purchase the Internet business of the Star Telecommunications Limited. The sales agreement is now pending approval by the Office of the Telecommunications Authority (OFTA). The OFTA will decide whether the telecommunications market in Hong Kong will really be liberalized or not. If the OFTA approves this acquisition, the Internet clients of HKT will take up 70% of the entire Hong Kong market. This has caused much concern among members of the Democratic Party, because we see that the Internet market is heading towards a monopoly, contravening the principle of fair competition. Everyone who has or will have access to the Internet will be worried. What is the worry? A diminishing choice open to them.

At present, the OFTA guards the important gate of market liberalization. If the OFTA approves this acquisition lightly and turns a blind eye to the fact that the market is heading towards a monopoly, our money, time and efforts devoted to liberalizing the market will go down the drains and we will have done everything for nothing.

At the Legislative Council meeting on 30 September, I proposed a motion urging the Government to adopt positive measures to expeditiously implement the full liberalization of the local and external telecommunications and television markets. On that day, the Legislative Council also endorsed the principle of liberalizing the market. However, so far the Government has not responded with any suitable policy. Instead, everything indicates that it is running counter to the principle of liberalizing the market. In terms of ensuring fair competition, the Information Technology and Broadcasting Bureau (ITBB) should formulate a policy to help the new Fixed Telecommunication Network Services (FTNS) operators deal with connection problems. To cite an example, half of the housing estates and Home Ownership Scheme (HOS) flats in Hong Kong come under the Hong Kong Housing Authority. It can provide appropriate assistance to the three FTNS operators so that they can enter this market more effectively and join the competition involving housing estates and HOS estates. Many government departments are also users and can choose their own FTNS operators flexibly.

As a regional member of the World Trade Organization, Hong Kong has always practised free economy. The free market gives Hong Kong a better international image and business environment. Under free competition, services and products are improved constantly and prices will fall. Ultimately, it will benefit the mass consumers. Therefore, we must abide firmly by the principle of full liberalization of the market.

With regard to the interconnection charges for international call services, the industry has queried that the charges determined by the OFTA are too high, which would help HKT dominate the fixed telecommunications services market. After more than a month's consideration, the OFTA has not yet made the final decision, which causes concern among operators. Mr Deputy, a communications market which serve consumer interests must be maintained in order for Hong Kong to become a communications and Internet centre.

Moreover, I have to stress that in an information age, communication is a basic right of people. The Government has an obligation to facilitate the installation of facilities by telecommunications companies, whether fixed or mobile. One example is that the ITBB can encourage government departments to provide space for the transmission facilities of mobile telephone companies or pager companies in government buildings on a cost-recovery basis. The Provisional Urban Council is already doing this. I am not sure about other government buildings.

The Government should know that liberalization of the market and free economy play a very important role in Hong Kong. Whether we can attract investment, increase job opportunities, protect consumer interests and maintain our international image depend on these two factors. I hope that the Government will stop wavering over the policy of market liberalization.

The Democratic Party and I are convinced that only by liberalizing the market can we intensify competition and ensure that people will enjoy better and cheaper communications services. This is our common goal.

Thank you, Mr Deputy.

DR RAYMOND HO (in Cantonese): Mr Deputy, IT is definitely an important element that leads us to the road of development of the 21st century, with the scope involved far exceeding just the transmission of messages. IT development will definitely affect mankind's living pattern, mode of work, operation of the commerce and industry, and even national security and security. It is for these reasons that both advanced countries and developing countries are injecting substantial manpower and resources into the development of IT, with a view to making good preparations for the arrival of the information era. Although Hong Kong is comparatively slow and late in the development in this area, it is now heading towards the IT super-highway following the establishment of the Information Technology and Broadcasting Bureau.

Indeed, there are a number of favourable factors that enable Hong Kong to develop IT. These factors include advanced telecommunications infrastructure, free flow of information, an economic model dominated by pursuit of a free market and so on. As a result of these, the Government can make use of its existing favourable factors and, through its sound policies, provide a better development environment for promoting the development of IT. It is essential for the Government to, at different levels, give play to its leading or co-ordination role so as to enable Hong Kong to secure a footing in the IT era of the 21st century. The fact that the Government has recently elaborated its measures and objectives in respect of its IT development in the publication entitled "Hong Kong Special Administrative Region Information Technology Strategy" published lately also illustrates that the Government is moving in the right direction. But I hope the Government can pay special attention to the following points in implementing its IT policies.

Firstly, the Government must understand clearly that IT development is advancing at a high speed and that its influence is profound. Therefore, we must constantly review the relevant strategies and revise them from time to time. On the other hand, the Government should invite people from the IT sector, the academic circle as well as the commercial and industrial sector to actively participate in the formulation of the relevant policies so as to ensure that the policies can apply to the latest development situation.

Secondly, manpower supply is of great importance to the development of all professions. The Government has already started to inject resources into nurturing skilled people for IT, particularly in the area of education. Apart from nurturing the new generation, the Government should also, through different means, help people working in different posts and positions to better understand IT so as to enable them to face the changes that will take place in commerce and industry in future as a result of IT development, as well as ensuring that we will have a group of professionals who are well versed in IT as well as a working team which can effectively apply IT to different professions.

Thirdly, IT development will also give rise to numerous regulatory and legal problems. In promoting the development of electronic commerce, we should also establish a well-defined legal framework to enable electronic transactions to be conducted according to law. On the other hand, intellectual property rights have become an obvious issue as a result of IT development. For instance, the development of digital media has facilitated the infringement of intellectual property rights. However, Hong Kong still needs to make improvement in protecting intellectual property rights. Therefore, we must continue to make more efforts in this area.

Mr Deputy, if Hong Kong is to develop into a hub for IT, the Government must play an active and dominating role as well as creating a favourable development environment, including the training of skilled people, the establishment of a legal framework and so on. I so submit. Thank you.

MR LAW CHI-KWONG (in Cantonese): Mr Deputy, concerning today's question in the motion, I would like to consider the IT strategy from an angle which is seldom discussed by people. In discussing IT development, we often overlook the so-called social development aspect. We often tend to assume that the more advanced IT is, the more advantages it will bring to society. Of course, if the whole society can keep pace with IT development, no serious problem would arise no matter how fast technology develops.

On the other hand, we cannot expect everybody to keep pace with IT. We should pay heed to this point because different people have different interests, knowledge or needs; and different people catch up with IT at different paces. However, if the emergence of problems or discrepancies is caused by a lack of means or individual disabilities, the advancement of IT will present a greater obstacle to their involvement in society and thus deprive them of an equal opportunity of participation. Recently, I collaborated with several of my colleagues in the university and the Young Men Christian Association to conduct a study on the impact of IT on the relationship between youngsters and their families in Hong Kong. As the findings will be published this Saturday afternoon, I would not go into the details of it here.

However, I would like to highlight a finding we have got. We found that the competence of youngsters from low-income families in mastering and applying IT to do their homework or retrieve information from the Internet is relatively low. The reason is quite simple. This is because they do not have any computers or Internet facilities at home. Let us have a look at the proportion of students who have access to the Internet. Less than 30% of secondary school students from low-income families have access to the Internet. But more than 60% of those from better-off families have Internet facilities at home. Such information precisely reflects the point raised by the Honourable CHEUNG Man-kwong about "one computer for each student".

Secondly, if we can help youngsters from low-income families to own a computer and to make use of the Internet at home, we can not only help our younger generation keep pace with the IT era, but also promote a more important goal ─ equal opportunities. Thus, in mapping out a comprehensive IT strategy, we should consider whether the whole society, particularly the so-called underprivileged, can keep pace with IT development.

The Government should also allocate resources to social service agencies to enable them to provide their target clients with IT equipment and related training. For instance, the Government can provide community centres and youth centres with resources to set up computer centres in which local residents and youngsters can learn and apply IT. There is even a greater need for the Government to provide resources to agencies for the disabled so as to enable them to help their clients to master and apply IT to overcome the obstacles arisen in their learning process and daily life. If people with visual or hearing impairment, for instance, can participate in society through the effective use of IT, we will be able to achieve the so-called ideal of equal opportunities of participation. I hope the Government or members of the community can look at IT strategy from the perspective of the overall social development, in addition to the technological, economic and industrial development aspects. And instead of seeing it as a pure economic or technological issue, we should regard it as an issue concerning the community as a whole.

There is one more issue which is very simple but should not be overlooked. With the continuous development of IT, we will find that some problems will arise in families and they warrant our attention. Perhaps owing to my profession as a social worker, I often see that many parents do not know how to help their children apply IT in an effective or correct way. For instance, they have no idea whether their children are playing computer games, watching something undesirable, or really doing homework with the help of the computer, or simply chatting with others through ICQ. Under such circumstances, parents find that they are unable to do anything to help their children. Hence, if we look at IT development from an overall perspective, each fundamental component, such as the family itself, is also a crucial factor for our consideration. How can we help families gain access to IT? How can we enhance the communication between the two generations in a family and prevent the communication from being undermined due to IT development? More often than not, we even witnessed a reversal of roles in which the parents do not know how to apply IT but the children do. As a result, the children teach their parents how to use computer and thus their roles reverse. Under such circumstances, a lot of problems, decisions, and even the whole family will subject to challenges. Therefore, in considering IT development, I hope Members can give more consideration and discussion to the so-called social development aspect, apart from the various problems related to the commerce and industry which have just been touched on.

Thank you, Mr Deputy.

MR AMBROSE LAU (in Cantonese): Mr Deputy, the objectives of the Government's Digital 21 IT strategy are to devote itself to the improvement of IT infrastructure and services in Hong Kong with a view to transforming the territory into a digital city which will place itself at the forefront of IT in the 21st century when the whole world is linked up by IT networks.

As early as 1995, Singapore, Hong Kong's major competitor, has already formulated an ambitious "Information Technology 2000" plan which endeavours to transform Singapore into an island of intelligence by the first year of the coming century. In order to enhance the plan, Singapore has set up an IT integrated development fund to administer financial support in four areas, and they include developing state-of-the-art IT services and products, developing IT infrastructure, transforming latest IT concepts and creative ideas into real samples, strengthening IT literacy education as well as helping IT professionals and computer users to keep pace with the development of technology. Furthermore, the National Computer Board of Singapore changed its functions accordingly and opened up the public computer system originally managed and installed by the Board itself to private enterprises so as to foster competition. The Board now bears the responsibility of drawing up comprehensive plans for the promotion of IT development in Singapore, setting IT technical standards, formulating relevant policies and supervising their implementation.

Mr Deputy, the reason for my thorough "review" of the "Information Technology 2000" plan launched a few years ago by Singapore is that we can learn a good lesson from it. Compared with the Digital 21 IT strategy we proposed only just now, a lot of similar or even identical points can be found between the two. However, Singapore proposed the plan earlier than Hong Kong, and its plan has also been promoted enthusiastically and put into concrete practice. Therefore, from an objective point of view, Singapore and even Taiwan have placed themselves at the forefront of IT development in Asia at this stage. We must not ignore the fact that they are the leaders right now, and only on this basis can we formulate a development strategy to help overtake the existing players in the field.

To overtake the existing players, Hong Kong should "synchronize" with Singapore in launching large-scale projects so as to build the city into an IT base. Compared with Singapore, Hong Kong still has a lot of room for developing into a high-tech base and it can even join hands with Shenzhen and Zhuhai for the development. Many leading countries and regions in technology have their own large-scale high-tech bases and development zones. While Taiwan has Hsinchu and Singapore is building one of its own now, Hong Kong can no longer afford to lag behind. Without the impetus brought about by a large-scale high-tech base project, it will be very difficult to attract talents and capital to high-tech industries in Hong Kong among which IT is the key one. The Science Park Hong Kong is constructing now is of too small a scale. It will be an arduous task to achieve many of the goals set out in Digital 21 if the territory does not have a high-tech base which serves as a technological community.

Mr Deputy, while we face squarely the fact that others are already at the forefront of IT development, we should not overlook Hong Kong's own advantages. The advantages of Hong Kong listed in Digital 21 include: language-wise, Hong Kong is bilingual; culture-wise, Hong Kong boasts a metropolitan culture and system-wise, Hong Kong enjoys a completely free economic system. However, there is yet another advantage that we must not overlook, that is, with its back leaning on the Mainland, Hong Kong can serve as a bridge between China and the world and this is an advantage Singapore lacks. Therefore, Hong Kong must make good use of this advantage.

The Government plans to establish an electronic network between the governments of Hong Kong and Guangdong Province in 1999 so that Hong Kong can act as an intermediary for the exchange of digital information between China and the world. The World Bank forecasts that, in the 21st century, China will become one of the world's biggest economies. The establishment and strengthening of an electronic network between Hong Kong and the Mainland will not only facilitate the business operation of Hong Kong companies in the Mainland, but will also be conducive to the development of Hong Kong into an Asian hub for IT. Hong Kong should enhance its communication with the Mainland and promote compatibility and interconnection of Hong Kong's IT infrastructure as well as its coupling with IT systems around the world. After taking the first step of networking with Guangdong Province, Hong Kong may be further networked with other provinces or cities in the Mainland. Apart from enhancing Hong Kong's superiority in developing business relationship with the Mainland, the networking can also strengthen the position of Hong Kong as an Asia-Pacific hub for Internet communication.

Mr Deputy, after making a comprehensive study of the Government's Digital 21 IT strategy, I find that it basically touches on every aspect but lacking in focus. Therefore, when the Government sets objectives and draws up measures for the territory's IT strategy, it should highlight a focus, and this focus is actually giving play to Hong Kong's unique advantages, for example, speeding up the building of IT infrastructure, enhancing education, training and promotion of IT literacy, and the Government taking the lead to encourage the business sector and the academia to promote IT application. Only by grasping this crucial focus can Hong Kong successfully march into the era of Digital 21 and be transformed into an Asian hub for IT.

Mr Deputy, I so submit.

MR JASPER TSANG (in Cantonese): Mr Deputy, with regard to the issue of facilitating the emergence of a locally rooted IT industry in Hong Kong as proposed in the amendment moved by Mr YEUNG Yiu-chung, I would like to express some of my views.

I whole-heartedly believe that, in search of a way forward, the industries of Hong Kong must develop in the direction of strengthening technological researches, relying on innovation and enhancing value-added activities. In the course of this development, we have to establish Hong Kong's own IT industry so that when we are actively building an IT infrastructure and training people for it, Hong Kong can truly become a world-class hub for IT. This is one of the reasons why Mr YEUNG Yiu-chung has moved his amendment.

I also believe that a well-established IT industry will not only be conducive to the development of various industries, but will also help us reduce our reliance on foreign technologies or importation of parts and components, thus enhancing Hong Kong's competitiveness.

Mr Deputy, it has been argued for a long time whether the industry of Hong Kong should develop in the direction of technology. The essence of the argument is actually not whether technology would bring in new opportunities, but whether the local business sector can or is willing to take the risky course of opening up and investing in a technological market which may not offer very definite returns. In recent years, more positive reports have been published so that people have had a better understanding of the strengths and weaknesses of Hong Kong. Furthermore, as the Government has started to get involved, Hong Kong's environment for industrial development has also seen some initial changes. For example, before the reunification, the Massachusetts Institute of Technology in the United States prepared a research report for Hong Kong entitled Made By Hong Kong, in which the part on IT is headed by the proposal that Hong Kong should develop IT into a core industry. The latest report of the Commission on Innovation and Technology also points out that Hong Kong lacks basic scientific researches and suggests that the Government should inject more resources into establishing applied science research centres so as to encourage the academia and the business sector to join hands with the Government to develop Hong Kong's industry.

However, I am afraid that it will entail more efforts to build up an IT industry than to develop other industries because the supply of cheap lands and sufficient labour alone may not be enough or appropriate. What we need are innovative ideas. The special thing about IT is that it is not restricted to tangible products. On one hand, "IT" is a new umbrella term embracing the telecommunications, computer and broadcasting industries, and on the other, it also includes software development or a service enhancing the productivity of other industries. These features make IT an integrated industry encompassing hardwares, softwares, technologies and services of which the room for development is very vast indeed.

First of all, with regard to IT hardware products, Hong Kong certainly lags behind some other places in Asia. We really hope that, in the future, Hong Kong can export more local IT products, be they finished products or components, like Taiwan which has already become the world's second largest production centre for notebook computers, or South Korea and Japan which are leaders in liquid crystal display components. It will not be an easy task to help Hong Kong's hardwares industry catch up with that of other places, so the Government should strengthen our base of scientific research and think of ways to attract multinational technological corporations to come to Hong Kong for development. This has actually been the experience of foreign countries. For example, in a seminar on Science Park held by the Industry Department early this month, a guest from Sweden pointed out that when the development of Hong Kong's Science Park matures and the territory begins to have a team of quality scientific researchers, multinational technological corporations will consider coming to Hong Kong to set up their research or production arms.

As for softwares and technologies, territorial limitations can be minimized since IT is an industry based on qualified personnel and knowledge. At the same time, past experiences also show that technological breakthroughs are not necessarily made by big enterprises. Big enterprises are only buyers. In the Silicon Valley of the United States, countless small companies are actually constantly studying how to solve the tricky problems of IT applications, and their products are usually just a so-called "patent" technical solution. Today when we buy IT products, in fact we are paying the cost of intellectual property rights at the same time. It is a very important revelation to the qualified personnel in Hong Kong that they too can make this kind of money here.

The sale of total solutions can also earn foreign exchange for Hong Kong. In reality, large-scale examples such as the cargo information management systems of air cargo terminals and container terminals, services such as video-on-demand are all outstanding assets of Hong Kong's IT industry. While IT services can be provided in the form of consultancy, a more common example is systems integration. A good systems integration company can draw up the best integration plan for different enterprises or even governments, and it can also solve the problems encountered by its clients faster than other companies. Moreover, Hong Kong is already planning to change its mode of television broadcasting from the present analogue system to the digital system. The whole process will offer a splendid opportunity for the industry to draw experience and learn new technologies. Hong Kong will be one of the first places in the world to adopt digital television broadcasting. If we can grasp this opportunity, Hong Kong will forge ahead and become a leader in IT among its neighbours.

Mr Deputy, the above are some of the opportunities I envisage. I hope that the Government of the Hong Kong Special Administrative Region can understand that this is the way to survive in the competitive world. I also hope that the Information Technology and Broadcasting Bureau and the Economic Services Bureau will co-operate closely and wake up to the fact that their competitors are those government organs from other places in Asia.

Thank you, Mr Deputy.

MR ALBERT HO (in Cantonese): Mr Deputy, I would like to take the opportunity of today's debate to speak on the close relationship between IT and the future development of Hong Kong's financial services industry.

The consultancy report issued yesterday by the Securities and Futures Commission (SFC) and the two Exchanges on online investment could be said to be well in line with the subject of today's motion debate. The report concludes that Hong Kong should positively and actively develop online technology and develop an online financial market; the report also further warns that if Hong Kong continues to pick its steps, refuses to make progress and maintains the status quo, it will lose its position as a financial centre, and overseas financial services consortiums are going to snatch away a lot of our businesses. Moreover, the younger generation, investors and customers who are competent in computer application and listed companies will also choose to invest or move to more advanced economies, and the fund managers will also follow suit.

Mr Deputy, let me quote from the forecasts of some international surveys for Members' reference.

- Forrester Research pointed out that in five years, by the year 2003, the global electronic transactions volume may reach $3.2 trillion ($3,200 billion), which is about 5% of the global transaction volume.

- International Data pointed out that in 1998, the brokerage fees for online brokers amount to US$1.3 billion, and by the year 2002, it will increase to US$5 billion. This year, the number of online brokers has increased by 73% compared to that of last year, and the number of online investors has also increased by 8%. It is anticipated that by the year 2002, online investors will constitute 30% of the total number of investors.

- According to eMarketer's forecast, in 1998 the number of global internet subscribers will reach 76 million, which is an 70% increase over that of 44 million in 1997, and 60% of the subscribers are from the United States; however, the number of Internet subscribers in Europe and the Asia-Pacific Region are now increasing quite rapidly, and by the 21st century, it may even outnumber the United States Internet subscribers. By the year 2002, the number of Internet subscribers worldwide will reach 230 million, which is double that of the figure in 1998, and the number of non-American subscribers will be 140 million, accounting for 60% of the total number .

All these astonishing figures demonstrate a new trend, and that is, by the 21st century, electronic commerce will become a new mode of global operations. The result is foreseeable if our Government fails to formulate effective measures and strategies and if our enterprises are not suitably prepared ─ the competitiveness of our country and Hong Kong itself will diminish and our businesses operators will be replaced. Our neighbouring countries are all itching to replace us and have set their own targets and formulated plans for the development of electronic commerce. For example, the target of Singapore is to reach an online transaction volume of US$4 billion by 2003; and Taiwan Government hopes to reach an online transaction volume of US$1 billion by 2001. The Hong Kong Government is lagging far behind in its IT strategy and it really worries us that Hong Kong has neither got a specific target nor a timetable. If Hong Kong really wants to maintain its status as a financial and commercial centre, it has to catch up on IT development. Let me put forward some specific proposals.

Using the second board market as the starting point for electronic transactions

As regards financial services, apart from the traditional ways of raising capital through the stock exchanges, enterprises can also raise capital through the electronic stock exchanges. Countries like Australia, Germany and the United States have also set up similar electronic stock exchanges to cater for small and medium enterprises (SMEs) which do not meet the listing requirements. In Australia, since there are not many channels for SMEs to raise capital and the venture funds are not very active, the stock exchange of Australia is now taking advantage of the online technology to set up a venture capital market known as the "Enterprise Market". The SMEs can issue advertisements on the Internet while interested investors can list out the investment projects which they are interested in, and specially designed computer system will do the matching. While the German Stock Exchange plans to provide over the counter matching services; the United States also plans to create a homepage on the Internet Website for NAS DAQ as a starting point. The Government and the Stock Exchange of Hong Kong Limited (SEHK) are now looking into the possibility of setting up a second board market which uses electronic transaction as the mode of operation to provide a fund raising venue for SMEs and new ventures. This is a very important point.

To promote online brokerage

The United States is the first country in the world to provide online brokerage service, while Australia is the pioneer in the Asia-Pacific Region. The Australian Stock Exchange has introduced a channel for members of the online financial industry to deal in the securities of the Australian Stock Exchange; and other places like Japan, Taiwan and Singapore have recently granted permission for operating online brokerage services. At present, one or two brokerage firms in Hong Kong are also offering online brokerage services.

The advantage of trading through online brokers is that the brokerage fees are lower, and investors can obtain the latest information through the online brokers to place orders at any time they want. It could be said that the online service is highly efficient.

To make good use of IT to enhance transparency

Stock exchanges over the world and their regulatory authorities have set up investors centre and enhance the provision of online information to increase market transparency, so that investors can make informed investment decisions, reduce the chances of insider dealing and thereby enable the market to operate more efficiently. The SEHK has made certain improvements to its homepage over the past few months, such as linking the websites of all listed companies, but the overall design and contents of its homepage are still very weak, and insufficient information is being provided. Therefore, we suggest that first of all, we should enact rules and legislation for the creation of databases; secondly, to follow the example of the United States electronic database by setting up a database on all listed companies and its members; and thirdly, to set up a statistics bank. We hope that the Government could implement the recommendations of the consultancy report as soon as possible.

MR MA FUNG-KWOK (in Cantonese): Mr Deputy, the Government of the Hong Kong Special Administrative Region (SAR) has on many past occasions emphasized the close relationship between IT development and the development of Hong Kong, and that it would strive to make Hong Kong a leading city in the IT world in terms of both development and application. Nevertheless, the IT policies formulated by the Government so far have been but some unrelated measures; these measures simply cannot give enterprises or the public any clear messages. Last week, the Information Technology and Broadcasting Bureau published an information paper on the Digital 21 IT strategy to sum up all the pledges, broad directions, as well as overall policies made by the Government in regard to IT development. This is a good start.

Despite the Government's repeated emphases on its vision to develop Hong Kong into a digital city, so far it has been more said than done. In regard to making Hong Kong a leading digital city and IT leader, the Government should take up more responsibility and play a more important role, in particular, a leading role. For example, legislation on telecommunications, television broadcasting, inter-connected network surveillance, the protection for intellectual property rights and so on could only be developed by the Government. So there is indeed a need for the Government to create an environment conducive to IT development; besides, it should also make every effort to reduce the cost of applying IT. That way, the existing inadequacies of our industrial and commercial sectors, namely, their inability to explore or apply innovative technologies, and the lack of attention given to IT development, could be rectified. In this connection, in a debate on telecommunication and television policies held earlier in this Chamber, I suggested the Government should invest the revenue from royalties on broadcasting franchise into the development of digital broadcasting. This is just one example.

The industrial and commercial enterprises in Hong Kong used to be good at developing innovative management systems and production procedures, but would always adopt a short-sighted attitude in projecting future development. That is why they tend to employ business strategies that could cut costs but are unwilling to invest in areas which take a longer time to generate returns. For this reason, local enterprises would very seldom engage in research studies, nor would they be willing to transform technological innovations into high value-added products and services. Such a kind of attitude would certainly affect Hong Kong's development into a digital city.

Under the circumstances, I agree very much that the Government should shoulder a larger share of the responsibility to promote IT development at this stage, so as to offer more support to the IT industry. When private sector participation and investment begin to take root, the Government could then adjust its role gradually, with a view to passing the leading role in IT development to the industry or the academia.

At the present stage when comprehensive and universal development of the IT industry has yet to be promoted, the Government should take decisive efforts to help promote IT development. In this connection, the Government should motivate the business sector to invest in manpower training and IT infrastructure on the one hand, and take administrative measures to offer the business sector concessions and incentives on the other, thereby creating a business environment conducive to the development of a locally rooted IT industry. Moreover, the Government should also co-ordinate the efforts of the business sector to enable the IT industry to develop with other local industries (such as financial services, tourism, transportation, communications, entertainment and so on) and to support each other, with a view to establishing a mutually beneficial value-adding relationship between IT industry and other industries. One good example is the development of electronic commerce.

The development of the Internet and electronic commerce has indeed helped to bring many new opportunities to the businesses and industries in Hong Kong. For instance, procedures such as procurement, product promotion, financing and so on could be conducted at an international scale through the Internet, thereby creating more business opportunities with different places of the world. Last year, the total value of online purchases (including delivery in kind and electronic delivery) made by consumers and the business sector amounted to US$10 billion. It is estimated that by 2001, the total value of transactions made on the Internet would soar to US$220 billion. Therefore, if our business sector could make greater use of electronic commerce expeditiously, the benefits arising therefrom would be beyond imagination.

In addition, the business sector should collaborate actively with IT software manufacturers in transforming its successful management and operation experiences into applications programme, with a view to enabling other enterprises to enhance their management ability. The banking industry, for example, counts heavily on maximum flexibility and precision conversion. In seeking to enhance banking management and streamline procedures, can they not consider collaborating with the software manufacturers on the development of applications packages best suited to the daily operational needs of the industry?

Indeed different industries will have different working procedures and management requirements, the development of industry specific common applications programme should therefore be a promising trade; besides, the local IT industry could also consider progressing in this direction in planning its future development.

The success or otherwise of such an applications programme would largely depend on the successful experiences it encompasses. To put it in simple terms, in choosing a certain set of applications programme, a firm is in fact trying to acquire through that applications programme the successful management experiences of others. Therefore, if the local applications programme industry could make full use of the successful experience of our business sector and combine it with state-of-the-art techniques in software production, markets could also be opened up effectively in Asia or even in Europe, the United States and so on, in addition to local and mainland markets.

On the other hand, the IT industry should also be able to provide Hong Kong with quality products and services that are reasonably priced and best suited to our specific needs. If IT products or research results are to be used extensively among local businesses, it is essential for those products or research results which enter the market as alternatives to existing products to, apart from attaining a certain standard of quality and superiority, be priced within the affordability of the general public or the businesses at large. Should applications programme be priced beyond the affordability of the general public or the businesses at large, the extensive use of IT research results could never be made possible; as such, the development of Hong Kong into a digital city would most probably be an empty slogan only.

If the local IT products are not competitively priced, our business sector would naturally purchase such products from other places. Hence the development of our IT industry would certainly be hindered. For this reason, the Government, the business sector and the academia should make every effort to reduce the cost of IT application in developing the IT industry. Moreover, the Government should also allocate more resources to support local software engineering research work, with a view to lowering the production costs for software manufacturers, thereby further enhancing the competitiveness of the local IT industry.

The Government is proceeding with its electronic service delivery infrastructure project and relevant law drafting exercises have also been commenced. All these should be helpful to the development of the local IT industry. Nevertheless, in view of the fast advancement of IT, the Government should adopt a more proactive attitude to master the new trends in IT development, so as to make Hong Kong qualified even better to become the centre of IT in Asia.

With these remarks, I support the motion and the amendment.

MISS EMILY LAU (in Cantonese): Mr Deputy, I rise to speak in support of Mr SIN Chung-kai's motion. It is indeed very modest of Mr SIN to thank me in his speech. As a matter of fact, I believe my then Honourable colleagues have already expressed their views on the subject in the previous term of the Council.

Mr Deputy, if this Council is able to contribute actively to the development of policies, I am sure we will all be delighted to learn about that. However, both you and I know it very well that despite the many different issues we have raised, the Government will only lend an ear to what it loves to hear. Developing IT is most probably a hobby-horse of the Chief Executive; as such, we really should not think this Council could take much credit in this respect. Nevertheless, Mr Deputy, so long as it is something good for Hong Kong, we will all be ready to lend our support.

I could not agree more to Mr SIN's motion today to urge the Government to speed up the implementation of the IT strategy Digital 21. Actually, I concur with most of the points raised by Mr SIN and hence do not wish to repeat any of them here. Nonetheless, as referred to by some of my Honourable colleagues who spoke just now, we all know that Hong Kong has started off much too late in developing IT and must therefore make haste to catch up with the rest of the world.

Are there any principles that we must adhere to in implementing this IT strategy? In this connection, Mr Deputy, I am in support of the view raised by Mr SIN just now, which is to ensure interoperability and interconnection of Hong Kong's IT infrastructure, protect intellectual property rights and encourage the private sector to take a lead in IT development by ensuring an open market and fair competition. However, Mr Deputy, I cannot lend my support to the amendment proposed by Mr YEUNG Yiu-chung. The most important reason is that I could not agree less to the "government-led" concept suggested therein. In moving his amendment just now, Mr YEUNG has presented this Council with the experience of certain countries, some papers and documents, as well as the strategies adopted in Singapore and the United States. I should like to give a brief response here.

Talking about Singapore, we can all see that Singapore has been offering various kinds of privileges to participating enterprises since its IT 2000 programme was launched in 1992. Nevertheless, as pointed out by the World Bank in its 1993 Annual report, the cost-effectiveness of Singapore's IT industry is declining gradually. This situation has aroused serious concern among certain members of the academia in Hong Kong; and indeed studies were conducted to investigate into the matter. Among the academics concerned, some have concluded that IT 2000 would only serve to keep up the results of the country's computerization efforts but not enhance its productivity as a whole. As for others, some have also remarked that a government-led programme would only serve to enhance social stability but could not help the development of creative technology.

Mr Deputy, since Mr SIN has referred to the reports published recently by Newsweek on 9 November, I believe he should have read about there are only a handful of venture capitalists in Singapore. I think the report said there is only one major high-tech entrepreneur. According to the magazine, this venture capitalist has suggested that Singapore needs a free environment if it wants to promote entrepreneurialism and move from manufacturing to an IT economy. Mr Deputy, I believe we would all agree Hong Kong also needs that very much.

Let us now turn to the American experience. Mr SIN said just now that he would respond further on this front in his reply speech. I fully agree with him in that the United States Government has not sent out any messages saying that it would be taking the lead in the country's IT development. On the contrary, I believe the United States Government wishes to tell the world that it is only interested in playing a complementary role in regard to IT development, which is to co-ordinate the efforts of various government departments, maintain an open market, review relevant laws and regulations, and most importantly, protect intellectual property rights. Mr Deputy, perhaps we should also take a look at some relevant United States publications. In 1993, an action paper entitled The National Information Infrastructure: Agenda for Action was put forward by the then United States Secretary of Commerce, Mr Ronald H. BROWN, on behalf of the Government. I think Honourable Members could recall that Mr BROWN died several years later in a plane crash while going on a business trip. He had been to Hong Kong for several times and many of us should have met him before. As pointed out in the paper, the role of the United States Government in the process of IT development should be to complement and enhance the efforts of the private sector and assure the growth of an information infrastructure available to all Americans at reasonable costs; besides, in developing its policy initiatives in the area, the United States Government will work in close partnership with the business, labour sector, academia, the public, Congress, and state and local governments. Therefore, I really could not see any "government-led" elements in the paper.

Mr Deputy, if we take a further look at the American experience — countries all over the world are looking at the American experience in IT development because of its remarkable success — we could see that IT infrastructure in the United States is by no means confined to the context of networking but extended to encompass research programmes and software development initiatives, with a view to connecting the various forms of media, including television, telephone, facsimile and so on, with the Internet. As for the role of the United States Government, it will take responsibility for protecting the privacy of users as well as ensuring transmission security and network security and stability, but never take the lead in promoting IT applications and developments, like a locomotive as it were.

Mr Deputy, having studied the experiences of other countries, we would naturally draw on those successful ones to formulate our own IT development plans; however, we must never copy blindly from others without taking into account our own conditions and strengths. Therefore, I should like to stress once again that this Council considers it most imperative for the Government to maintain an open market, uphold freedom of speech, safeguard individual privacy and protect intellectual property rights in implementing this IT strategy. I hope that the Government could appreciate the importance this Council has attached to these major principles.

With these remarks, I support Mr SIN's motion.

DEPUTY PRESIDENT (in Cantonese): Does any other Member wish to speak?

(No Member indicated a wish to speak)

DEPUTY PRESIDENT (in Cantonese): Mr SIN Chung-kai, you may now speak on Mr YEUNG Yiu-chung's amendment. You have up to five minutes to speak.

MR SIN CHUNG-KAI (in Cantonese): Mr Deputy, I am indeed very grateful because so many Honourable Members have bothered to speak on my motion. I only wish to concentrate my reply on a very small number of areas.

On the question of whether or not the Government should play a leading role, the Honourable Miss Emily LAU has expressed many opinions, and I do not want to repeat the same views here. However, I still want to say that if we bother to look at the relevant literature from different countries, we will see that with the only exception of Singapore, the governments of many countries have concentrated on creating an environment conducive to the development of private companies. We can see that the United States and Europe, or the European Union, all share this in common.

I wish to raise several points in my reply. In particular, I wish to emphasize the issue of our IT industry. Of course, today, I ......

DEPUTY PRESIDENT (in Cantonese): Mr SIN Chung-kai, you should speak to the amendment to your motion.

MR SIN CHUNG-KAI (in Cantonese): Yes. Let me first deal with one of the three points mentioned in Mr YEUNG Yiu-chung's amendment, that is, the point on an IT industry rooted in Hong Kong. As a representative of the IT sector, I naturally welcome the development of an IT industry rooted in Hong Kong. This deserves my total support. But what should we do to bring forward such an IT industry? Some Honourable colleagues have quoted some examples to show what we should do. Let me respond to their comments here.

The Honourable Jasper TSANG referred to the case of South Korea. So, let me also look at South Korea. How much money have the chips companies there lost over the past two to three years? I also wish to talk about the development process of the IT industry. Actually, very often, the whole thing does not start with large corporations, but with many small companies. We can look at a number of cases such as Yahoo. When Jerry YANG studied at Stanford, he developed a software in the garage. Then, of course, he got the assistance from some venture capitalists, and now he has become a billionaire. But if we talk about government assistance ...... I mean, how will the government possibly consider providing assistance to a car mechanic? And, how can a car mechanic possibly persuade the government to provide him assistance? This is a point which must be considered. When it comes to government assistance, only those who can write beautiful reports can get any assistance. Am I correct? If we look at the many funds and support schemes offered by the Government, we will see that these people can usually get assistance most easily. So, we must look at the reality.

As far as the IT industry in Hong Kong is concerned, I think the following points are most important: First, there must be a launch market ─ I do not know how to translate this term into Chinese and I have asked the Honourable LAW Chi-kwong on that. Anyway, the term means a market which can absorb the products in question when they are first put on offer. But how can we create such a market? The answer is naturally very simple ─ we have to make Hong Kong a "digital city". That way, when more people want to use IT products, a launch market will emerge. This is a very important point. Second, we must respect intellectual property rights. In this connection, I wish to refer to the remarks made by the Honourable MA Fung-kwok. When ever did the local film industry ask the Government for assistance? The Government will grant $100 million to the film industry this week, so I have heard. But when ever did the film industry ask the Government for assistance? All along, the Government has never really given any direct assistance to the film industry, and it is now about to do so only because the industry is facing immense difficulties. John SHUM once told me that the only reason for the boom of the local film industry was "freedom". Freedom is indeed required if there is to be originality. Actually, IT is closely related to the film industry. If Hong Kong, or even its IT sector, wants to have a firmly rooted IT industry, there must be a favourable environment conducive to "originality". Protection for intellectual property rights, a launch market and "originality" are all very important factors contributing to our IT development.

The IT industry of Hong Kong is not at all weak; it employs at least 400 000 people, and its products are used not only locally, but also in many places overseas. Can we not see the many locally produced software products which are being sold in the market? The survey findings of a Hong Kong market research company indicate that over 90% of the software used by local companies are written by their own staff. This shows that Hong Kong already has a very sound foundation. The crux of the matter lies in how we are going to create an environment conducive to the survival of the IT industry. I think Hong Kong must take steps to protect intellectual property rights, and we also need a market where private individuals can give full expression to their originality. This is far more important than asking the Government to play a leading role.

Finally, I wish to refer to the case of Japan. The latest issue of the magazine, Fortune, carries an article which analyses the reasons why Japan has lagged behind the United States over the past few years in terms of IT industry development. The article concludes that by the time the Japanese Government started to boost the development of large-scale computers, the application of these computers was already on the decline; and, the use of micro-computers was then becoming increasingly popular instead. This shows that the policy errors of a government will produce very far-reaching consequences. Therefore, I hope that Honourable Members can consider the role to be played by the Government very carefully. For the report made by Prof TIEN Chang-lin, I hope that we can discuss it on another occasion. Discussions on the report will certainly give us a good chance to explore how best to develop our IT industry.

SECRETARY FOR INFORMATION TECHNOLOGY AND BROADCASTING (in Cantonese): Mr Deputy, I very much welcome the motion moved by the Honourable Member on the information technology (IT) strategy. Views put forward by Members will be of tremendous help to the promotion of IT and the Information Technology and Broadcasting Bureau (ITBB) in implementing the policies.

The ITBB was established in April this year to co-ordinate and lead the work of all government departments involved in IT and the related areas of broadcasting and telecommunications so as to ensure the consistence of all government policies and also to work with the various Policy Bureaux to implement the work in relation to IT.

Since its establishment, the ITBB has worked vigorously to prepare and draw up the IT strategy for the Hong Kong Special Administrative Region (SAR) so as to set out the direction of development for Hong Kong in tomorrow's information world. In the course of formulating the strategy, we have spared no efforts in the consultation with the various sectors of the community. I also met with the Information Infrastructure Advisory Committee constituted of representatives of the related sectors and the Legislative Council in September and October respectively, to introduce to them the outline of and various measures on the IT strategy and listen to their views.

Having considered the various views, the ITBB officially published a paper entitled Digital 21 on the SAR's IT strategy and has delivered it to Members earlier for their reference. Digital 21 is an all-encompassing strategy on IT which not only involves the ITBB's own work but also the co-operative projects and measures undertaken together by the ITBB and other Policy Bureaux, government departments as well as the relevant sectors. Of course, individual Policy Bureaux will also publish their own strategies in detail and the implementation of work in their own particular areas in relation to IT when the need arises.

Objectives of the strategy

In today's motion debate, Members have highlighted the importance of setting clear objectives for the IT strategy. The Government also holds the same view. In the IT strategy published recently, we have already set the objective explicitly for the whole strategy, which is to strengthen our IT infrastructure and services to make Hong Kong a leading digital city in the 21st century when all the networks are linked together globally.

In addition, we have also set clear targets and milestones for each policy in the strategy so as to enable Hong Kong to gain a leading position in the information world.

Four enabling factors of the strategy

In Digital 21, Hong Kong Special Administrative Region: Information Strategy, we have already laid down the various policies in detail, so I do not intend to introduce them one by one in this meeting. However, I wish to take this opportunity to briefly introduce to Members the four enabling factors upon which the whole strategy is based.

In formulating the IT strategy, the Government has carefully taken into account the elements that can make Hong Kong a leader in today's information world. Our conclusion is that four factors must go hand in hand with one another. They are:

(1) high capacity communications systems;

(2) a common software interface through which individuals, business and the Government can interact and communicate with one another easily and quickly using their own systems;

(3) nurturing people who know how to use IT and use it skilfully; and

(4) fostering a cultural environment that stimulates creativity and welcomes advances in the use of this technology.

The Chief Executive has already put forward these four factors in last year's policy address on which our IT strategy is also based.

This is a pragmatic strategy which is formed according to Hong Kong's present situation and unique advantages and also the general trend of the world's development. Basing upon these four factors, we have set down a series of measures to build on each factor in order to maintain our advantages.

In the following, I wish to make a comprehensive response to a few main points brought up in the motion today.

(1) The application and promotion of IT

First of all, as regards the application and promotion of IT, as I have just said, one factor of the IT strategy is to foster a cultural environment that makes people welcome the use of IT. To accomplish this, we will promote the application of IT in Hong Kong in various areas.

On the part of the Government, we will set an example by taking the initiative to use the latest IT available to provide quality services to the public. Through the Electronic Service Delivery Scheme, government departments can provide public services through the inter-connected computers which will enhance the Government's efficiency and improve the production. We also expect the Electronic Service Delivery Scheme to demonstrate the superiority of electronic transactions over traditional transactions, which can on the one hand, boost the public confidence in electronic transactions and encourage them to participate more in such transactions; and on the other hand, encourage the commercial and industrial sector to take advantage of electronic transactions to improve their competitiveness. Before the implementation of the Electronic Service Delivery Scheme, the Government will launch a small-scale pilot scheme on electronic transactions to introduce to the public the superiority of electronic transactions and promote the development of them.

As for the non-government sector, we are planning on a series of initiatives to promote the use of IT in various social strata, which include working with various chambers of commerce and other representative groups to organize promotional activities to encourage small and medium enterprises to made wider use of IT and engage more in electronic transactions. For example, the Industrial Support Fund has already funded the Hong Kong Computer Society to co-produce a television programme of 14 shows together with the Radio Television Hong Kong to introduce some practical examples of the application of IT in our daily life, in the hope of giving the public a better understanding of IT. At the same time, the Industrial Support Fund has also given the Computer Society provisions to give Information Technology Awards to commend private organizations that have outstanding performance in the application of IT.

We will also encourage the co-operation between the academia and the industry and business sectors in regard to IT, such as encouraging the academia to transform their research results into commercial commodities. We will, at the same time, make use of the existing subsidization mechanisms to provide funding for technological development plans and research. We have also planned on working with the Trade and Industry Bureau, Industry Department and also the Hong Kong Productivity Council in the promotion of a quality guarantee scheme for IT products to encourage good and quality designs.

(2) Education and training on IT

Another point of today's motion is the education and training in IT. Our strategy also covers this area. Since the training of human resources is mainly the responsibility of the Education and Manpower Bureau (EMB), the ITBB will work closely with the EMB and other relevant educational bodies in finding ways to make the best use of IT in education.

The Information Technology for Learning in a New Era ─ Five-Year Strategy recently published by the EMB has already laid out the Government's initiatives in the promotion of IT education for the period from 1998-99 to 2002-03. It includes the provision of training and support for teachers, building up a sound network infrastructure for teachers and students to allow them to share information and connect to the various global networks, enhancing the use of IT in the present curricula and reviewing the arrangements so as to integrate IT into the overall curricula, launching schemes to promote the development of educational software, and also fostering a social environment conducive to changing the learning culture.

I firmly believe that the EMB is very willing to listen to Members' views on the paper. Moreover, we will also collaborate with the EMB in conducting a consultancy study on the manpower demand and training needs in the IT sector. The study will focus on assessing the manpower supply and demand situation in this sector and the discrepancy between supply and demand, comparing the situations of Hong Kong and other competitors in the world, as well as making recommendations on the long-term strategy on manpower planning and training in this sector. We expect this study to be finished by mid-1999.

(3) Support for the IT industry in Hong Kong

The ITBB is working closely with the Industry Department to set down the way in which support can be given to the development of the local IT industry and the plan to encourage various sectors to invest in this industry.

As a matter of fact, the Government is assisting the local commercial and industrial sector to develop technologies through several support mechanisms such as the Industrial Support Fund, Applied Research Fund and the Research Grants Council.

Other than the above mechanisms, the Government is also supporting the promotion of innovation and application of technologies by local industries through the Hong Kong Productivity Council and the Hong Kong Industrial Technology Centre Corporation. The Science Park, which is expected to be in operation in 2001, will provide an even stronger stimulation to the development of local technological companies.

In addition, the Chief Executive has already accepted the recommendation of the Commission on Innovation and Technology to set up an Applied Science and Technology Research Institute to support and promote mid-stream research. Moreover, he has also allocated $5 billion to set up an Innovation and Technology Fund to assist schemes that will help upgrade the technological level of the local commercial and industrial sector.

We will also contract out the Government's internal IT works projects in order to establish a market of reasonable size to encourage the industry to expand and make further investments as we realize the significance of a sound IT industry to promoting the development and application of IT in Hong Kong.

Through the above measures, we should be able to achieve one of the objectives put forward by Mr YEUNG Yiu-chung, and that is, "Hong Kong has an IT industry rooted locally".

(4) IT infrastructure

The Government will take the lead to develop the IT infrastructure necessary for the implementation of the Electronic Service Delivery Scheme. To ensure that our communication systems are effectively and fully utilized, we will adopt the interface standard of the open market in the information infrastructure that we are about to establish. This infrastructure will also have a bilingual interface in Chinese and English in order to ensure that all sectors in the community can make use of this open and common interface to engage in electronic transactions and communicate and link up with the rest of the world.

Other than the above infrastructure and common interface, we have also considered the reliability of using this infrastructure to conduct electronic transactions. For this reason, we have planned on developing a public key infrastructure to ensure the reliability and integrity of government services provided by and transactions performed electronically. At the same time, we are preparing to formulate an appropriate legal framework to ensure that electronic transactions are given the same recognition and legal protection as transactions done traditionally through paper-work. We expect to submit a bill on the promotion of electronic commerce development to the Legislative Council early next year.

We are confident that after the whole infrastructure and the relevant legal framework are established, the private sector will be able to conduct electronic transactions securely through this open and common infrastructure.

(5) Protection of intellectual property rights

While encouraging the various social sectors to make good use of the new technology and invest in technological research plans, we also need to respect the intellectual property rights. The Government has always adhered strictly to a protection regime of the highest international standards insofar as the protection of intellectual property rights is concerned. It is combatting piracy activities through many different ways, including formulating a comprehensive legal framework, stringent enforcement actions, holding educational and publicity activities on a continuous basis, and also maintaing close ties with the property right owners and other law enforcement bodies.

To further protect the rights of registered trade mark holders, the Trade and Industry Bureau is drafting a bill on the Trade Marks Ordinance to simplify the procedures for the registration and retention of trade marks and plans to submit it to the Legislative Council in the 1998-99 Legislative Session.

(6) Maintaining fair competition in the market

We have always employed all possible means to maintain fair and open competition in the market. In respect of liberalizing the telecommunications market, we will continue to strive for a favourable environment conducive to the expansion of telecommunications networks to enhance effective competition and to provide more choices and more new services that worth the consumers' money. In late October, we announced the full liberalization of the external telecommunications service market starting in January 1999 and now we are considering other suggestions put forward in the review on telecommunications, in the hope that we will be able to make a decision and announce it within a short time.

On the other hand, to promote the development of the broadcasting industry and to upgrade Hong Kong's position as the regional superior broadcasting hub, we suggest a full liberalization of the paid-television market and encourage and promote the expansion and convergence of the broadcasting and telecommunications networks in order to fully utilize the existing network infrastructural facilities and to provide the public with the greatest variety of telecommunications and broadcasting services. We also hope to be able to announce our decision on these suggestions at the same time.

Conclusion

In fact, for Hong Kong to acquire a superior position in the IT area, it takes not only the joint efforts of the various Policy Bureaux and departments in the Government, but also relies on the vigorous support and participation of the various sectors in the community, no matter it is the commercial and industrial sector, the education sector, the IT sector or the general public themselves.

With my foregoing introduction, I hope Members will understand that the Government has already taken into consideration all relevant matters in the process of formulating the IT strategy for Hong Kong. It has not only set the long-term objectives but also laid down a practical working schedule in a realistic manner. Of course, with technology developing in leaps and bounds, the Digital 21 IT strategy of Hong Kong will certainly be affected. Given an environment where technology keeps changing and new products keep emerging, we must continue to develop and revise the strategy according to the rapidly changing circumstances. We welcome Members to continue to present their views and discuss with us about the contents and objectives of the strategy.

Members have also mentioned that many other Asian countries such as Singapore, Japan and Malaysia have all drawn up strategies on IT development. That we believe Hong Kong is best able to gain a leading position in the IT area is because Hong Kong possesses the advantages that will allow it to continue to develop IT. Apart from the top communications network that forms the backbone of our development of the information infrastructure, Hong Kong, being the SAR of China, also has a close partnership with the Mainland, coupled with the people's bilingual abilities. We have the absolute advantage of becoming the gateway between mainland China and the rest of the world in communication and the conduct of electronic transactions. Moreover, with a free and open information market, the strong adaptability of its people, their drive and creativity, all these attributes will enable Hong Kong to suit itself to and grasp the opportunities offered by the digital era. The SAR Government will speed up the development of those areas that still fall short of satisfaction with an enterprising spirit, and will continue to look for excellence, progress with the time, in order to open up new horizons for Hong Kong. At the same time, as Mr SIN Chung-kai has suggested, the SAR Government will work hard to promote Hong Kong's advantages and development potentials in the IT area in the international community.

THE PRESIDENT resumed the Chair.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the amendment moved by Mr YEUNG Yiu-chung be made to Mr SIN Chung-kai's motion.

Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Mr SIN Chung-kai rose to claim a division.

PRESIDENT (in Cantonese): Mr SIN Chung-kai has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please first register their presence by pressing the button and then proceed to vote.

PRESIDENT (in Cantonese): Before I declare that voting shall stop, Members may wish to check their votes. If there are no queries, voting shall now stop.

PRESIDENT (in Cantonese): The result will now be displayed.

Functional Constituencies:

Dr Raymond HO, Mr Eric LI, Mr LEE Kai-ming, Dr LUI Ming-wah, Mr Ambrose CHEUNG, Mr HUI Cheung-ching, Mr CHAN Kwok-keung, Mr Bernard CHAN, Mr CHAN Wing-chan, Dr Philip WONG, Mr WONG Yung-kan, Mr Timothy FOK, Mr FUNG Chi-kin and Dr TANG Siu-tong voted for the amendment.

Mr Michael HO, Mr CHEUNG Man-kwong, Dr LEONG Che-hung, Mr SIN Chung-kai and Mr LAW Chi-kwong voted against the amendment.

Mr Kenneth TING, Mr James TIEN, Mr Edward HO, Miss Margaret NG, Mrs Selina CHOW, Mr Ronald ARCULLI, Mrs Sophie LEUNG, Mr Howard YOUNG, Mr LAU Wong-fat and Mrs Miriam LAU abstained.

Geographical Constituencies and Election Committee:

Miss CHAN Yuen-han, Mr Gary CHENG, Mr Jasper TSANG, Mr LAU Kong-wah, Mr TAM Yiu-chung, Mr NG Leung-sing, Prof NG Ching-fai, Mr MA Fung-kwok, Mr CHAN Kam-lam, Mr YEUNG Yiu-chung, Mr Ambrose LAU and Miss CHOY So-yuk voted for the amendment.

Miss Cyd HO, Mr Albert HO, Mr LEE Wing-tat, Mr LEE Cheuk-yan, Mr Martin LEE, Mr Fred LI, Mr James TO, Miss Christine LOH, Mr LEUNG Yiu-chung, Mr Andrew WONG, Dr YEUNG Sum, Mr LAU Chin-shek, Miss Emily LAU, Mr Andrew CHENG and Mr SZETO Wah voted against the amendment.

Mr HO Sai-chu abstained.

THE PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 29 were present, 14 were in favour of the amendment, five against it and 10 abstained; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 29 were present, 12 were in favour of the amendment, 15 against it and one abstained. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): Mr SIN Chung-kai, you may now reply and you have up to one minute 30 seconds out of your original 15 minutes.

MR SIN CHUNG-KAI (in Cantonese): Madam President, I would like to thank Members for speaking in the debate today and would like to add a few more points in my final reply.

Information technology is not only opening for us a new era which straddles national and geographical boundaries. It is also a new market which nourishes unlimited creativity and free flow of ideas. Governments' planned intervention and legal restrictions will vanish in the end. If planned intervention and legal restrictions cannot be eliminated, at least they should not be enhanced. Otherwise, the development of information technology will be hindered.

I would like to cite an example. Recently I met the officers of a venture fund in Silicon Valley. They told me that they had to screen approximately 1 500 proposals a year and then select 15 out of them. Only six would get support and only one or two would be successful in the end. From this, we can see that the road to success needs the development and participation of many people. Hence, the ultimate emphasis of information technology strategy should be placed on innovative ideas and wide application of information technology in the whole community. I hope Members can browse through the Internet more often and try to communicate with each other or even overseas politicians on the Internet.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr SIN Chung-kai, as set out on the Agenda, be passed.

Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections and by the Election Committee, who are present. I declare the motion passed.

PRESIDENT (in Cantonese): Second motion: Improving air quality.

IMPROVING AIR QUALITY

MR EDWARD HO (in Cantonese): Madam President, air is one of man's most basic needs. Man or woman, rich or poor, young or old and regardless of nationality, each of us needs air and air is free. Unfortunately, we have no right to choose to breathe fresher and cleaner air.

The air quality in Hong Kong has deteriorated to a worrying state. The Environmental Protection Department has recorded more than 16 occasions when the Air Pollution Index (API) at ground level was over 100, indicating that the air pollution level is "extremely high". The highest reading was 167. With regard to pollution in terms of suspended particulates in the air, Hong Kong is worse off than Singapore, Seoul, Tokyo and even London. According to a report of the World Health Organization, the present air pollution level in Hong Kong may lead to the premature death of around 2 000 people each year. In view of this, the Liberal Party has proposed a motion today to urge the Government to actively and expeditiously formulate long-term and comprehensive measures to prevent the air quality from further deteriorating.

First, to address the problem, the Government must start with the means of transport. First and foremost, it should try to offer incentives to encourage the owners of the 18 000 taxis in Hong Kong to switch to liquefied petroleum gas (LPG) taxis expeditiously, so as to implement the LPG taxi scheme as early as possible. At present, the biggest worry among taxi owners is that they would have to pay a high price for new taxis. They are also uncertain whether the price of LPG will remain at a low level over a long period. With an LPG taxi costing at least $200,000, not all taxi owners can afford it amid the current economic downturn.

I suggest that the Government should subsidize part of the purchase price with low-interest loans. It should draw up a regressive loan plan, under which a larger loan amount will be granted for newer taxis, while a smaller amount will be granted for older taxis, in order to encourage taxi owners to purchase new taxis as soon as possible.

As regards the pricing of LPG, the Government should give an explicit undertaking not to levy duty on LPG in the future, in order to ensure that the fuel cost of LPG taxis will not be higher than the cost of diesel at present. This will also ensure that LPG for vehicle use will not be more expensive than that for domestic use, thus precluding that some car owners might privately fill up their tanks with domestic LPG and hence the potential hazards. I hope that through various incentives offered by the Government, the LPG taxi scheme in Hong Kong will be completed by 2003 or before.

Apart from taxis, we also need to pay attention to the over 4 000 diesel public minibuses that are running in the streets at present. Technically speaking, minibuses can also use LPG. Thus, it is quite a simple matter. The Government can expeditiously implement an LPG minibus pilot scheme and draw up a timetable for minibuses switching to LPG. The Government has also said that 30 to 40 LPG filling stations will be coming on stream by the end of next year and that their number will increase gradually in the following few years. I believe that the number of LPG stations will be sufficient to meet the demand of the schemes to switch to LPG taxis and minibuses at the same time.

For heavy vehicles that cannot use LPG, the Government should expeditiously study the possibility of introducing other types of environmentally-friendly fuels.

The first type of fuel that can be considered is natural gas. Overseas experience shows that the use of natural gas in driving heavy vehicles of over five tonnes has achieved very good results. Even the Shenzhen Special Economic Zone in the Mainland has introduced natural gas buses. In Hong Kong, we are already shipping in natural gas cylinders for electric power generation. The Government should actively study how to make use of the existing arrangements to apply natural gas to vehicles.

Another fuel that can be considered is diesel turbo which is already available in European countries, or another fuel called city diesel. I have translated it as "城市柴油" myself. Its fundamental principle is burning diesel in a cleaner way by adding additives. This can reduce the emission of suspended particulates by 25%. However, this type of diesel is not yet available in Hong Kong. We should examine, or together with the oil companies, study the feasibility of introducing these types of environmentally-friendly diesel.

Madam President, my overall impression is that the Government has never actively conducted research on and introduced pollution-free means of transport. For instance, has the Government tried to develop electric buses following overseas examples? Such electric buses should be able to operate in level areas.

Furthermore, the hybrid engine which has been successfully tested and is now in use in Los Angeles, United States also merits our consideration. Vehicles installed with this type of hybrid engine mainly uses electric power. However, when power is insufficient, it will automatically switch to fuel for propulsion. Railway system is also an efficient and environmentally-friendly means of mass public transport. I hope that the Government will continue to actively develop the rail system.

Apart from improving vehicular fuels, the enhancement of vehicle maintenance standards is equally important. If vehicles are regularly well maintained, the chance of air pollution caused by overstrained mechanical parts will be considerably reduced. In his policy address, the Chief Executive has confirmed that Hong Kong needs to develop high technology and high value-added industries. In my view, the Government can co-operate with various scientific research institutes to conduct research on new technology to reduce the emissions of vehicles, borrow from successful overseas experience and introduce methods to enhance vehicle maintenance standards.

Having talked so much about reforms in the means of transport, I would like to speak on another very important area and that is, how to improve air quality through town planning and environmental protection. First, if the business centre of our city continues to be overly concentrated in Central or the urban areas, the demand for transport of people commuting between home and work will grow continuously, and the number of vehicles as the main transport means will keep increasing. This will inevitably affect the air quality. However, if we can develop more business areas outside Central and reduce the demand for transport of people going to and from work, it will help to improve the air quality. This is one reason why I object to the new phase of the reclamation project in Central. I suggest that when the Government carries out town planning in the future, it should make the reduction of demand for transportation a key consideration and develop new business centres gradually, so that more people can work in the areas where they live or in the neighbourhood, in order to reduce the use of transport.

Second, the Government should seriously consider designating more pedestrian precincts during holidays. For instance, if the Government can consider making individual streets in Causeway Bay where high API readings have been frequently recorded recently as pedestrian shopping areas, it will not only help improve the air quality in the area, but will also attract the people and tourists to stroll and shop in that area. Overseas, pedestrian precincts are greatly welcome and supported by shop owners. Therefore, I hope that the retail industry in Hong Kong will support this proposal.

Third, I urge the Government to actively implement tree-planting programmes to improve the environment. Insofar as roads are concerned, planting trees on both sides of the roads can not only beautify the environment, but will also help to produce fresh air. I urge the relevant authorities to reserve space on both sides of the road for tree-planting when they develop new roads in future. Apart from planting trees along roads, the Government should also launch large-scale tree-planting campaigns in extensive areas and the countryside.

Apart from internal factors, the air quality in Hong Kong is also affected by external factors. In winter, the north-easterly monsoons will first pass through South Korea, Japan, Taiwan and the industrial cities in South China and bring the air pollutants into Hong Kong. Therefore, we have to address the cross-border air pollution problems squarely. Recently, the Government of the Hong Kong Special Administrative Region (SAR) has conducted a study on the air quality of the Pearl River Delta region in collaboration with the Guangdong Provincial Government. This is a very good start. However, I hope that cross-border co-operation between Hong Kong and Guangdong will not be restricted to the exchange of information or joint study only. I hope that after the completion of the study, both sides will expeditiously come up with concrete measures to reduce pollution and enact laws for that purpose. At the same time, I hope that both sides will strictly enforce preventive measures against pollution.

Lastly, I would like to respond to the amendment proposed by the Honourable Miss Christine LOH. The proposals I am making today for improving the air quality include measures for the long, medium and short terms. For instance, "offering adequate financial incentives to encourage the taxi trade to switch to the use of LPG expeditiously" is obviously a short-term measure. In my view, the amendment proposed by Miss Christine LOH is identical with my motion in terms of direction and goals. There is really no need for Miss LOH to add the word "short-term" before "measures" in my motion.

Indeed, some parts of Miss Christine LOH's amendment are merely supplements to the proposals I have listed. However, I have reservations concerning one of the additions. Her proposal about "introducing compulsory emission testing for all vehicles" is well-intended, but unnecessary. At present, when each new vehicle leaves the factory, it has a certificate of quality for its exhaust emission system. With the present car manufacturing technology, very seldom would the exhaust emission system of a new vehicle malfunction during a period of time immediately after leaving the factory. It is totally unnecessary to require that all vehicles regardless of their age must be tested. This excessive measure will cause the people inconvenience and is a waste of resources.

As the additional proposals made by Miss Christine LOH are unreasonable, the Liberal Party will not support them. I also urge other Members to vote against her amendment.

With these remarks, Madam President, I beg to move.

Mr Edward HO moved the following motion:

"That, in view of the seriousness of Hong Kong's air pollution problem whilst the Government's proposed scheme to replace diesel vehicles is progressing too slowly and not sufficiently comprehensive to safeguard public health, this Council urges the Government to expeditiously formulate long-term and comprehensive measures to improve the air quality, including offering adequate financial incentives to encourage the taxi trade to switch to the use of liquefied petroleum gas (LPG) expeditiously; examining the feasibility of introducing LPG or other environment-friendly fuels for use by other types of vehicles; conducting researches on mechanical installations that can reduce exhaust emissions and enhancing vehicle maintenance standards; studying the feasibility of introducing pollution-free public transport; launching large scale tree-planting campaigns; making the reduction of demand for vehicular transportation a key town-planning consideration; and strengthening the co-operation with neighbouring regions in the Mainland with a view to alleviating the cross-border air pollution problems."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the motion moved by Mr Edward HO, as set out on the Agenda, be passed.

PRESIDENT (in Cantonese): Miss Christine LOH will move an amendment to this motion, as printed on the Agenda. In accordance with the Rules of Procedure, the motion and the amendment will now be debated together in a joint debate.

I now call upon Miss Christine LOH to speak and to move her amendment.

MISS CHRISTINE LOH: Apart from the last part, I very much enjoy the Honourable Edward HO's motion. It is truly an excellent one and I agree with most of it whole-heartedly. I wish to thank him for raising the motion. My amendment aims to strengthen it by adding in specific short-term measures which the Administration can take immediately. I will discuss Mr Edward HO's response to my requirement for compulsory testing in a moment.

Madam President, air pollution is worsening. There is no argument about that. We have had a number of very high Air Pollution Index (API) readings already this year. Although the API readings indicate short-term (24 hour) exceedances of our Air Quality Objectives (AQOs) in such places as Causeway Bay, the long-term objectives are being exceeded in even more districts.

I urge Members to note that it is possible for daily AQOs to be met every day of the year but annual AQOs to fail still. Exposure to short bursts of high levels of air pollution may not damage your health immediately, but continued exposure to lower levels of air pollution may be damaging.

For example, in 1997, annual AQOs for total suspended particulates (TSP) and respirable suspended particulates (RSP) were exceeded at seven out of nine districts in Hong Kong.

Projections are for things to get worse. Despite continued improvements in new, imported vehicle emission standards, there are more and more vehicles on the road, and those vehicles are not being well maintained. Trends in ozone pollution are particularly worrying since Hong Kong's annual average for ozone increased more than 80% in the past 10 years. This is likely to be a serious issue in future.

Immediate actions

Madam President, Hong Kong has to sprint to stand still. I would like to have this Council's support to get the Administration to take immediate actions in three specific areas:

Firstly, to introduce compulsory emission testing for all vehicles;

Secondly, to substantially increase the existing fine for smoky vehicles to encourage better maintenance; and

Thirdly, to step up enforcement actions against smoky vehicles.

These are measures that will address emission from all vehicles, not just taxis. We need all car owners to understand that they must minimize emissions.

Madam President, I would like to talk a little bit about what a vehicle is. Most of us see a vehicle as a mobility convenience. If we are to adopt a new attitude and look at a vehicle also as something that emits poisonous gas, we might have a new attitude to the strength and toughness of regulation that is needed. It is because if we still regard a vehicle as a mobility convenience, we may stop short of requiring heavier and stricter regulation. I will come back to this point in a minute.

Reality check - some statistics

Let us have a reality check on just what the situation is in Hong Kong. According to the statistics of the Environmental Protection Department (EPD), while taxis account for 26% of RSP emissions in urban areas, medium and heavy vehicles, including buses and trucks, account for another 26%.

The current enforcement actions against smoky vehicles are just not working. Last Saturday, a dedicated official EPD spotter stood on the corner of Hennessy Road and Fleming Road, outside the EPD offices, and counted 78 vehicles emitting excess black smoke in one hour.

Last year, over 26 000 emission testing notices were issued by the EPD ─ 63% to lorries, 24% to taxis and 11% to public light buses.

Up to the end of October this year, I understand that the number of emission testing notices issued have increased some 15% to 20% over last year.

This may be because the spotters are doing a better job, but I suspect that the spotting scheme is not reducing the number of smoky vehicles on our roads.

Of those 26 000 vehicles tested last year, 2 862 vehicles failed and 63 licences were cancelled as a result. It is curious that we have a high spotting rate and such a low failure rate. We must question whether the scheme is working properly at all.

Immediate results

I believe my short-term proposals will have positive results.

My first proposal, as I said earlier, is to introduce compulsory emission testing for all vehicles as part of the Transport Department's annual road-worthiness test, there will be, therefore, an incentive for vehicle owners to maintain their vehicles. Well-maintained vehicles do not emit black smoke. I do not know why Mr HO regards this as a sort of interference in people's lives. As I said, my attitude is: If you own a vehicle, if you maintain it well, there should not be a problem. I just cannot understand why this should be regarded as undue interference in people's lives or in people's businesses. I am sure the Liberal Party will have a lot to say about that. But if you are serious about air pollution, if you want to be a responsible car owner, whether you are private car owner or commercial can owner, why do you object? It is emitting poison. The police look at it that way. Be strict, and make sure that we can cut down emissions within a short period of time.

I understand that the Transport Department is already testing some vehicles on a sampling basis but this should be extended to all vehicles as soon as possible. Vehicles failing to maintain emission standards should not have their licence renewed.

My second proposal is that the current $450 fine for smoky vehicles is clearly insufficient. I suggest a fine of $5,000. I know people are going to gob. I know that the commercial car drivers and owners, in particular, are going to gob. But again, if you accept that the black smoke that you see and other emissions that you do not see are poisonous, then please, please try to re-adjust your attitude. Why should the public be subsidizing poisonous pollution? Why should we put our own public health at undue risk?

In parallel, of course, we need to improve the emission test itself. The EPD's current snap-acceleration test is easy to pass, since it does not replicate real driving conditions. More accurate emission testing equipment, already piloted by the EPD, should be brought in to all emission testing centres. This will make it harder for vehicle owners to cheat the test.

Thirdly, my proposal is that we need to step up enforcement action against smoky vehicles. This can be done by the EPD and the police ─ we may even wish to consider extending the authority to traffic wardens. A large-scale crack-down on smoky vehicles would soon get the message across. And I wonder whether Mr HO thinks that this is again interference in people's private affairs. I do not think so.

Emissions from power stations

I have also added an amendment about emissions from power stations. I think we should not forget that our power stations are the largest emitters of sulphur dioxide, nitrogen dioxide and carbon dioxide.

While we may not feel the same effects at ground level as from vehicle emissions, the burning of fossil fuels for electricity is adding to the dangerous cocktail of pollution.

We must be more serious about implementing "Demand Side Management" (DSM) which aims to cut energy usage, and hence emissions through energy efficiency and conservation. The EPD's estimates show that about $4.9 billion (in 1991 prices) is wasted each year from wasteful use of electricity and other fuels.

The cost savings from avoided energy waste could be ploughed back into the economy to stimulate recovery, and provide jobs in the energy efficiency sector.

However, for DSM to be pursued vigorously, the utilities must be given the right incentives, and the Administration needs to develop a more coherent overall energy policy.

Madam President, we do not manage to pass too many motions nowadays because of the split voting system. We manage to pass one earlier in this afternoon. And I hope we will not fail with this non-partisan motion. And I hope the Liberal Party might change their minds. At least, they will consider thinking that we should look at the vehicle as something that emits poison. If you look at it this way seriously, why should we not regulate it much more strongly? If you do not like what I am proposing or if you want to face it, fine, we can discuss that. But I hope you would agree that this is the right direction to go. Thank you.

Miss Christine LOH moved the following amendment:

"To add "both short-term and" after "this Council urges the Government to expeditiously formulate"; to delete "and" after "long-term"; to add "introducing compulsory emission testing for all vehicles; substantially increasing the existing fine for smoky vehicles to encourage better maintenance; stepping up enforcement actions against smoky vehicles;" after "including"; to delete "and" from "and strengthening the co-operation with neighbouring regions"; and to add "; and vigorously pursuing demand-side management of electricity to reduce consumption of electricity from fossil-fuelled power stations" after "with a view to alleviating the cross-border air pollution problems"."

PRESIDENT (in Cantonese): I now propose the question to you and that is: That the amendment moved by Miss Christine LOH be made to Mr Edward HO's motion.

Does any Member wish to speak?

MR LAU CHIN-SHEK (in Cantonese): Madam President, first of all, I have to "declare my interests". I am a victim of poor air quality and suffer from serious respiratory tract troubles. Whenever the air is poor, I will feel short of breath, especially when I am standing in Causeway Bay to appeal to the public to do this or to do that. Therefore, I think that to improve the air quality is a very pressing task, and I fully endorse a motion debate on this matter.

Actually, today we could see a lot of places around the world with deteriorating air quality, and it is a mockery on our so-called civilized society. In order to improve our living standard, we have invented a lot of scientific products to make our lives more comfortable on the one hand; but these products have ruined our ecosystems and environment and posed hazard to our health on the other. This is really "a dilemma of the civilized society", and a question which we have to reflect on. Frankly speaking, the measures proposed in both the original motion and the amendment can only cure the symptoms but not the disease, and perhaps this is indeed the tragedy of today's civilized society!

No matter whether we are going to encourage environmental awareness or introduce legislative control, I think it is most imperative that everyone in the community (including the Government) should have an awareness to protect and improve our environment, to change the way we live, the way we spend, the way we behave, and to come up with a more environmentally-friendly way of living. Only through this could we achieve the goal of improving the quality of our environment.

However, the Government is obligated to play an indispensable role in the process of improving our environment. Today, I would like to make some suggestions in two areas and hope that the Government will implement them with vigour.

First of all, as both Honourable colleagues have just said, the principal "culprit" of air pollution is the black smoke and pollutants emitted by vehicles; and apart from developing LPG taxis, I think it is more important for the Government to bend upon developing the mass transit systems, so that members of the public can cut down on the use of private cars and other non-mass carriers, because these modes of transport are less environmentally-friendly and not cost-effective. In fact, Hong Kong is a densely populated place, and either in terms of the environment or transportation, Hong Kong should actively develop the mass transit systems like the rail system; but unfortunately the Government has all along adopted a very conservative stance towards developing the rail system. Very often, the population density of an area has to reach a very high level before the Government will make up its mind to develop a rail system. I think this is a very grave mistake.

Nowadays, there is still no rail network in certain urban areas and new towns. For example, though Kowloon City District has a population of 500 000, the plan for the Kowloon City Mass Transit Railway (MTR) extension has been put off by the Government for more than 20 years; and last year, the Mass Transit Railway Corporation (MTRC) submitted its plan to develop the East Kowloon and North Hong Kong Island MTR Line but it is still waiting for a reply from the Government. I hope that the Government can change its conservative stance on rail development and endeavour to develop the mass transit systems, so as to reduce the use of vehicles in general, thereby improving the air quality.

The second point which I think the Government ought to consider is that it should look into ways of improving our air quality when it draws up plans for urban and new town development. The fact that the air quality of core districts like Causeway Bay is particularly poor is because in addition to the heavy traffic volume, there are also a lot of high-rise buildings. Since no "ventilation outlets" were provided at the planning stage, the pollutants are all trapped in the area. This is one of the major factors which lead to deteriorating air quality. On the contrary, "ventilation outlets" were included in the plans for new towns like Tseung Kwan O, and the air quality of these new towns is obviously better. I hope the Government can put more thoughts in town planning with a view to improving the air quality of Hong Kong.

Madam President, poor air quality affects the health and living standards of everyone, including you and me, and it will also adversely affect our tourism industry and other economic developments. It is the first and foremost task of the Government to adopt measures to improve the air quality, and I hope that the Government can give us a positive reply.

Thank you, Madam President.

MRS SELINA CHOW (in Cantonese): Madam President, with Air Pollution Index (API) readings frequently reaching new heights, Hong Kong has a worsening air pollution problem. For instance, in respect of air quality at street level in the commercial area near Causeway Bay, we have registered 16 readings of over 100, a level which is very high indeed. As a matter of fact, air pollution in Hong Kong is worse than that in many cities in Southeast Asia and Europe. For example, with respect to air pollution caused by suspended particulates, Hong Kong is two times higher than London and is worse than such Asian cities as Kuala Lumpur, Singapore, Seoul and Tokyo. We are extremely concerned with the overall health of Hong Kong people. I believe it is the earnest hope of everyone of us that we can make improvement in this area.

Of course, diesel vehicles are one of the sources that lead to air pollution in Hong Kong. This is why the Liberal Party has all along supported taxis to switch to LPG, as this will help improve air quality in a substantial manner. For this purpose, the Government must provide sufficient incentives, including offering low-interest loans, to encourage taxis to switch to LPG. I believe one of the recent heated topics is that oil companies must reduce the price of LPG. This is greatly supported by the Liberal Party. This is a very important point we must take note of if we are to promote our work in this area.

Just now, Miss Christine LOH talked about the interception of smoky vehicles. Although this can only provide temporary relief, this is, after all, an important palliative for at least we can prevent the air from being polluted unnecessarily. Earlier on, Miss Christine LOH mentioned some figures to query the Liberal Party. Let us first look at those figures. According to Miss LOH, more than 20 000 vehicles have been caught for emitting black smoke. She therefore asked why only 2 000-odd vehicle owners were prosecuted? I do not know whether or not Miss LOH has asked the Environmental Protection Department (EPD). But as far as I understand it, we have now come to two scenarios. For instance, you might have caught a smoky vehicle driver and asked him to take his vehicle to an inspection centre. But he might be so anxious that he cleaned the engine before that. Therefore, by the time the vehicle was inspected, it would not emit black smoke anymore. This is probably a good thing because the driver will hurry up to clean the engine so that the vehicle will not emit black smoke anymore. Another scenario is that drivers might tune the fuel injection of the engines before they take their vehicles to the inspection centre. I understand that the EPD is apparently testing a new instrument which can find out whether or not the engine of a light vehicle has been tuned. We must hurry up to conduct the test and expeditiously exterminate the improper conduct of drivers who are not in full compliance with the rules. This is because such conduct is not conducive to environmental protection.

Miss Christine LOH has been criticizing the Liberal Party just now and, almost like accusing us of "standing in her way", asked why we said something like that. I would like to make some calculations with her. Just now, she said that more than 20 000 vehicles had problems. But we know that 300 000 out of the 400 000-odd vehicles in Hong Kong are private cars. According to Miss LOH, these 400 000-odd vehicles will then need to line up for inspection every year. But the problem we have at the moment concerns 20 000-odd vehicles only (though we think this number is already too large). Vehicles should only be inspected when they have problems. But Miss Christine LOH said otherwise. In her opinion, the 400 000-odd vehicles should better line up for inspection. If we consider the dismerits, the inspection will only bring much business to car repairers for more than 400 000 vehicles will be lining up for inspection. Furthermore, this is going to bring about extreme unfairness for out of the 400 000-odd vehicles, only 20 000-odd vehicles have problems. Some of them even do not have the problem we are talking about. It may eventually turn out that only 5% of the vehicles are having that problem. But the remaining 95% will need to be inspected as well. What is more, they have to pay for the inspection as it is necessary to pay for each inspection. I do not know how many countries do something like that every year. Even such advanced countries as European countries will not require new cars which have been used for several years to be inspected. Is it not an annoying measure to members of the public? Perhaps Miss Christine LOH should ask the 95% car owners who have been keeping their vehicles nice and clean what opinions they have about her suggestion. I really have no idea what it is if it is not an annoying measure to members of the public.

Another point which I very much agree is that enforcement must be carried out properly. As a matter of fact, what has been done is not adequate. I agree that more immediate enforcement actions should be taken in black spots. Furthermore, the "spotter scheme" can be strengthened by involving more members of the public to prevent and stop smoky vehicles. Apart from this, we find that the API readings of major shopping areas have reached a very high level at the moment. Just before I entered this Chamber, I received a document from a person living in Tsim Sha Tsui. He said that the filter of his air-conditioner had turned from white to black just after two months. I am very worried because Tsim Sha Tsui is a place where there is a high concentration of retailers, and so is Causeway Bay. I earnestly hope that the public can make extra efforts in this area to prevent the situation from affecting our retailing industry. Thank you.

MR HUI CHEUNG-CHING (in Cantonese): Madam President, to strengthen control by way of legislation is a common practice for improving vehicle emissions. For instance, the Government can enhance the statutory power of the police so that they can ask drivers to turn off the engines of their vehicles while awaiting patrons to reduce emission, as well as stepping up enforcement actions against smoky vehicles and so on. All these are measures that the Government can adopt, though I am afraid that the effectiveness of legislative control will be very limited. According to a number of study reports, and as the experience gained by the United States over the past few decades shows, in terms of the effectiveness of protecting the environment, the reliance on administrative instructions such as enacting legislation to require vehicles to install pollution-free devices and so on will lag far behind the use of unleaded petrol (ULP). Bearing these examples in mind, the Government's direction is right in encouraging vehicles to use ULP as well as introducing LPG or more environmentally-friendly fuels. The crux of the problem rather lies in whether the Government can succeed in persuading drivers to switch to environmentally-friendly fuels.

It is precisely for this reason that whether the Government can succeed in implementing the scheme targeting on LPG taxis will have a profound influence on whether other vehicles will follow taxis to switch to LPG in future. Therefore, the Government must endeavour to ensure the success of the LPG taxi trial scheme. It is obvious from the relevant consultative document that the Government understands that prices of LPG for vehicle use, operating costs for LPG taxis, supporting facilities of filling stations, manpower and resources available for maintenance service are all major incentives for determining whether taxis will be willing to switch from diesel to LPG. It is regrettable that the Government has failed to put forward substantive proposals targeting at these areas in the consultative document. The major problems can be divided into three aspects:

Firstly, it will cost LPG taxis $0.66 for each kilometre, which is $0.04 more expensive than diesel. On the other hand, LPG taxis generally need to be replaced after running for four to five years, but diesel vehicles can run for eight to 10 years. The difference in the rate of depreciation is nearly 50%. As the competition in the public transport market has become increasingly keen, tax relief is probably the best means for lowering the costs of LPG taxis. However, the Government is not willing to make commitments as far as tax items are concerned;

Secondly, as far as filling stations are concerned, it is undoubtedly right for the Government to pay special attention to questions like site selection and the safety of residents. But will this lead to an insufficient number and an uneven distribution of filling stations in the urban area? And will these sites be located at convenient points? In this regard, the Government has failed to give any explanation. Furthermore, the Government has planned to build 40 to 50 filling stations in the next two years, claiming that the stations can cope with at least 5 000 taxis. But compared with a total of 18 000 taxis, the gap is still very large. If the Government has no intention to allocate additional resources for setting up more stations, how can it convince taxis to switch to LPG as soon as possible?

Thirdly, as regards maintenance, it is essential for garages repairing LPG taxis to comply with strict requirements. Coupled with the fact that LPG taxis require a lot of additional spare parts, the maintenance fees will be raised. But has the Government provided assistance in this respect?

Furthermore, it seems that the Government, in promoting LPG taxis, has only concerned with the comparative cost-effectiveness between LPG and diesel, and neglected one important issue and, that is, whether the cost-effectiveness derived from the enjoyment of fresh air by drivers is more important than emission. If the Government can tell drivers during the promotion campaign the extent of harm exhaust gases will do to their health, will it get double results when it persuades the drivers to take the initiative to switch to LPG?

In fact, the Government needs more than new technologies to reduce pollution caused by emission. More importantly, it requires flexible administration because the whole process will involve many departments, including the Environmental Protection Department, Transport Department, Hong Kong Police Force, Education Department, Lands Department, Commissioner for Tourism and so on. But it is regrettable that the Government has failed to mention this aspect. I therefore hope that the Government can pay more attention to it.

Madam President, I so submit.

MR CHAN WING-CHAN (in Cantonese): Madam President, Hong Kong's air quality has been deteriorating in recent years. The APIs recorded at the roadside air quality monitoring stations located in Central District, Causeway Bay, Mong Kok and so on have kept on rising over the past few months; for a number of times, the readings have even risen to as high as 165. On the roads and streets territory-wide, we could always see people covering their noses to avoid breathing in the dust that could easily suffocate them to death; on the other hand, if people stay outside in certain districts for too long a time, their faces would most probably be covered with dust, if not blackened. Therefore, improving the air quality is indeed an urgent task which brooks no delay.

Among the various contributory factors of air pollution, nitrogen dioxide emission from diesel vehicles, ozone, as well as respirable suspended particulates are the ones that have attracted comparatively greater public concern; however, dust from construction sites, exhaust emissions from factories, thermal emissions from commercial institutions and so on have also caused Hong Kong's air quality to deteriorate continuously. In the circumstances, the Government has enacted several laws to monitor the various sources of air pollutants. In this connection, a LPG taxi scheme has been introduced last year with a view to replacing diesel taxis with LPG taxis.

Nevertheless, with much regrets, the Government has failed to explain clearly to both the sector and the public the major points of concern in its consultation document regarding the LPG taxis proposal. The Democratic Alliance for the Betterment of Hong Kong (DAB) believes that the Government's failure to provide clear objectives for the problems would eventually hinder the efforts to improve air quality. For this reason, the DAB holds that it is very important for the Government to put in all efforts to mobilize, support and assist the sector if it is to convert the entire taxi fleet to LPG. In this connection, financial incentives should be an important consideration which encourages diesel vehicles to switch to LPG. For instance, the Government should guarantee that the operating cost as well as cost of maintenance and so on for LPG taxis would not be higher than that of diesel taxies.

The DAB has come to the view that the proposal to switch to LPG taxis is just one of the many ways to help alleviate the air pollution problem caused by vehicles, since vehicle maintenance standards will also affect the exhaust emission levels. At present, the technical skills level of car mechanics in Hong Kong varies rather greatly. In this connection, I believe many Honourable colleagues who have their own cars may as well be very familiar with the unpleasant experience that their cars are still emitting large amount of dark smoke despite the major maintenance work carried out.

In our opinion, the difference in technical skills existing among car mechanics is directly related to the inability of the relevant training institutions to catch up with the pace of technological development. Therefore, the Government should revise the existing training courses for car mechanics and allocate more resources to both the technical institutes and the Vocational Training Council to enable them to upgrade their relevant courses with technological development. Moreover, it could also consider introducing a licensing system with a view to upgrading the general quality of the trade. In addition, the Government may also implement a quality garage scheme and publish the service standards as well as fees and charges of the garages participating in the scheme to give car owners some choices.

Madam President, the DAB believes that car owners would take the initiative to properly repair their vehicles if they could better understand the importance of proper vehicle maintenance in terms of environmental protection, their own personal safety and value for money on the one hand, and be supplied with adequate information of the good garages open to them on the other.

In addition, outdated urban planning, narrow roads and tall buildings, as well as the lack of green belts would also contribute to the accumulation of pollutants in the air. I need to point out here that the development of pollution-free public transport should remain a key town planning consideration in the future, since mass transportation is the most effective way to resolve the air pollution problems brought about by motor vehicles. Apart from that, large scale tree planting campaigns should also be encouraged. As we all know, apart from assisting in alleviating air pollution, trees grown along roadsides and on hill slopes could also serve as natural noise barriers and help to stabilize the relevant slopes. In the Mainland, certain better-planned provinces and cities have already stipulated that green belts must be provided at both sides of the roads to alleviate the environmental pollution brought about by motor vehicles. The DAB believes the Government should follow this measure and require that all newly constructed roads must be equipped with green belts; besides, it should also try as far as practicable to plant more trees along existing roads to help improve the air quality.

Madam President, the DAB understands that the deteriorating air quality is attributable to not only motor vehicles but also many other sources of pollution. One example is the coal-fired power stations, since the level of exhaust emission produced by them would by no means be lower than that produced by motor vehicles. For this reason, in addition to actively mobilizing the two power companies to exercise control over their exhaust emissions, the Government should also make the two companies promise to use as far as possible natural gases instead of coal as fuel, with a view to reducing the level of exhaust emissions, and thereby alleviating the pollution problem directly. Besides, the Government should also co-operate with the mainland authorities to facilitate improvement to the air quality of the area and restore the beauty of Hong Kong's landscape and scenic spots. This would certainly be of help to the tourism industry as well.

Madam President, I so submit. Thank you very much.

MR LAW CHI-KWONG (in Cantonese): Madam President, I would like to share with Members some statistics about pollution. I wonder if everyone knows it, noise was the number one cause of complaint in 1996. By 1997, it was air pollution. If we look at the breakdown for all the cases, we will see it was complaints against car exhausts that ranked first. In terms of districts, it was Kwai Ching that received most complaints. Members elected by voters in the New Territories West beware! The Yau Ma Tei, Tsim Sha Tsui and Mong Kok areas ranked second and Yuen Long ranked third. It appears that of the three districts with the greatest number of complaints, two came from the New Territories West geographical constituencies.

The Honourable Michael HO will later speak about air quality and health issues, while the Honourable Albert HO would talk about transport and air quality. For now, I just want to dwell on issues such as cross-border air pollution, the promotion of large-scale tree-planting campaigns, mandatory emission tests, reduction of electricity consumption and increasing fines against smoky vehicles.

First on cross-border air pollution. About four or five years ago, I was on one occasion at Mr Martin LEE's place at the mid-levels chatting, looking from his home at the Pearl River estuary when the northwesterly wind was blowing. There was an obvious difference in view: visibility was extremely low at the estuary where smog was blown towards Hong Kong from the estuary in the north. That was pollution across the boundary. When we have time and when the northwesterly wind is blowing strongly, we may try to take note of the position. We will notice the polluted air from the Pearl River estuary. Earlier when the Finance Committee scrutinized an application for a study on air quality control, some colleagues asked me why we needed the study. I was surprised that there were people who did not understand. I was surprised that there were people who did not know that air pollution is not just an issue for Hong Kong only, that it is related to neighbouring regions, and that it can only be tackled by joint efforts from all involved. I think it is a bit late for the Government to start the study . All we can do now is to quicken our pace in improving the co-operation between the two regions.

About tree-planting campaigns, I can recall taking part in similar exercises as a small boy. We called it forestry work camp then. I learned a lot from the camp, such as the way to plant trees, and the benefits trees would bring. In addition to labour, the work camp could enhance the knowledge of participants in trees and their contribution to the environment. In the past, such exercises often took place in the rural areas, but we did not seem to be doing enough in tree planting in urban areas. As the Honourable Edward HO said, planting trees on both sides of the roads could improve the outlook of the environment and protect it as well. It merits our hard work to promote tree-planting on roads. I think the Government can consider working together with some primary and secondary schools to promote tree-planting campaigns, for these can educate the new generation and at the same time improve the environment and the air quality for the community.

The third issue is whether or not we should require all vehicles to undergo smoke emission tests. We do understand that responsible car owners should conduct regular inspections for their cars. In fact, other than testing for smoke emission, many parts of the car may well need testing at least twice a year. It would not cost too much additional time or money to carry out routine tests and smoke emission tests for their cars. But I do agree that a number of car owners will oppose the idea of requiring all cars, old and new, to undergo tests for smoke emission. If we need to bring in legislation for regulation purposes, I think we need further and more comprehensive discussion and consultation to determine the way to proceed with the matter. Do we want cars in use for three, four, six or eight years to be inspected? Or do we want new cars in use for just one year to undergo inspections as well? I believe the issue warrants comprehensive consultation.

As regards the reduction of power consumption, we can say that it is a matter for all of us insofar as environmental protection and air quality are concerned. But the general public knows very little about "energy efficient" equipment. For example, I cannot tell how much of taxpayers' money can be saved over a period of one year if this Chamber changes to "energy efficient" light bulbs. I might have to ask the Secretariat to find out. There should be a significant amount saved for the taxpayers if all bulbs are changed to "energy efficient" ones. If all households know how much money "energy efficient" equipment can save for them, I think it would be easier to promote the idea of reducing power consumption. Obviously, we need to put in more efforts to educate the public widely and to make them understand that saving electricity is beneficial both to the environment and to their wallets.

Another issue is related to the fines imposed on smoky vehicles. Those who live on Hong Kong Island and have to drive up Garden Road must have noticed the huge number of smoky vehicles around, emitting smoke. Sometimes it is really dreadful to drive behind these vehicles. In principle, we agree that there should be a substantial increase in the fines, but we need to discuss about the exact rate of increase. This is because we understand that even if responsible car owners take the trouble to inspect their cars regularly, their cars may still emit a large amount of smoke due to unexpected engine failures. If the law is too harsh, will unfairness occur? I think the matter warrants further study.

As regards Miss Christine LOH's amendment, the Democratic Party supports its spirit, although we think that a number of details still requires investigation, discussion, and consultation. In view of this, Madam President, I support the original motion and the amendment.

DR RAYMOND HO (in Cantonese): Madam President, as to how bad the air quality of Hong Kong is, we can know for sure from the API released by the Environmental Protection Department daily through the mass media. It is actually not difficult for us to find out to what extent the air quality of Hong Kong has deteriorated just by taking a walk downtown Causeway Bay or in industrial areas such as Kwun Tong. What more alarming is that many people are gradually feeling that fresh air is a luxury and air pollution is one of the prices we have to pay for economic development.

Although the public is also aware that the air quality of Hong Kong is deteriorating, only a handful of environmental protection organizations which are concerned about air pollution would proactively ask the Government to put in more efforts to address the problem expeditiously. I am not sure if it is because air pollution does not pose an immediate hazard to public health. The public at large just accepts the fact tacitly and takes polluted air as part of life in Hong Kong. Furthermore, it is really a great pity that air pollution has never received the same extensive attention and discussion as other more immediate livelihood issues such as housing or employment.

In fact, there may be many reasons why the public is not very concerned about air pollution, one of which is that they do not know much about its seriousness. Besides, the negative impacts of the problem will not surface until a number of years later, nor do they pose any immediate hazards to life, so there would not be a sense of urgency. Another reason may be that the public knows the problem exists, but they may have the wrong impression that the Government only prioritizes the interests of the business sector and air quality is never a major item on the policy agenda. If any of the above reasons holds water, people will not exert pressure on the Government like they do with other livelihood issues, as a result, the problem of air pollution cannot be solved within the foreseeable future.

The Government's responsibility for addressing air pollution is unshirkable. We also have to face squarely the worsening air quality right away. First of all, we ought to find out the sources of air pollution. And emission from vehicles (especially diesel vehicles) is definitely one of the major sources. In this connection, the Government must expedite the replacement of diesel vehicles and the implementation of LPG taxi scheme. At the same time, it can join hands with the relevant authorities of the Mainland and other countries to study the feasibility of using other environmentally-friendly fuels. It should also proactively develop railway networks which are both environmentally-friendly and highly efficient. I concur with the Honourable LAU Chin-shek on this matter. In fact, we have been talking about the East Kowloon line and the Island West extension for over 20 years and they are still castles in the air. I just do not want to talk about them anymore. A more thorough solution is to study the possibility of introducing pollution-free modes of public transport, while at the present stage regulations must be strengthened to reduce the impact on air quality of vehicle emissions. Other than stepping up legislation, the enforcement of the relevant laws should also be made more stringent so that air pollution caused by vehicle emissions can be reduced.

On the other hand, the rapid development and urbanization of Southern China have also put immense pressure on the air quality of neighbouring regions. Therefore, it is imperative for Hong Kong and Guangdong effect co-operation insofar as the improvement of air quality is concerned. I heartily welcome the setting up of the Hong Kong/Guangdong Environmental Protection Liaison Group which will undertake a joint study of the air quality in the Pearl River Delta. However, the study will not start before April next year at the soonest and the whole project will take about 18 months to finish. While a report will not be available for the Liaison Group's consideration before the end of 2000, and it will also take some time to formulate corresponding policies, so we cannot expect that the study will lead to any immediate improvement of air quality in Hong Kong. Anyway, the co-operation between Hong Kong and Guangdong is a positive step towards solving the problem. The governments of the two places should, however, speed up the study and come up with effective measures as soon as possible in order to prevent the further deterioration of air quality.

The improvement of air quality must also involve the active participation of the public. On the one hand, they may share the responsibility by, for example, using public transport as far as possible, enhancing the maintenance of their vehicles and reducing non-essential energy consumption; on the other hand, if the public attaches importance to environmental protection, the Government will also be driven to accord higher priority to environmental protection work, unlike the present situation where government policies only attach importance to economic development to the neglect of environmental considerations. Therefore, the Government should put in more efforts and proactively enhance the people's understanding of the issue so that they know more about environmental protection and its long-term influence on themselves. I believe the Government has a very important role to play in this respect.

Madam President, I so submit.

DR TANG SIU-TONG (in Cantonese): Madam President, in September this year, Causeway Bay set the record of having air quality readings of over 100 for four consecutive days again. We can now frequently see reports about the seriousness of air pollution in downtown or industrial areas. But even for rural areas such as Yuen Long, which is far away from industrial or downtown areas and where the traffic flow is not heavy, the average annual air quality index was also above the standard for two consecutive years. This shows that the air pollution problem in Hong Kong is not just confined to "isolated areas". It has become a territory-wide problem.

In fact, the air that we breathe everyday contains various kinds of pollutants. Of these pollutants, the impact of respirable suspended particulates (RSP) on human bodies is the most profound since such particulates can trigger off or cause chronic bronchitis, asthma, emphysema or even death. According to the findings of numerous independent studies, the death rate "induced by air pollution" will rise by 1% when the content of RSP in each cu m of air rises by 10 mg.

Vehicle exhaust emissions is the main source of RSP, whereas 98% of RSP emitted by vehicles come from diesel vehicles. Therefore, the ban on diesel vehicles, accounting for one third of the total number of vehicles in Hong Kong, has become a key issue in solving the air pollution problem in Hong Kong. By means of the liquefied petroleum gas (LPG) taxi trial scheme, the Government tries to study the use of LPG vehicles as one of the ways to reduce air pollution. When the Provisional Legislative Council was in session last year, the Hong Kong Progressive Alliance succeeded in passing a motion to urge the Government to implement a LPG taxi trial scheme with a view to improving our air quality. At that time, the Government reacted enthusiastically in response to environmental protection quests by committing that it would run a one-year LPG taxi trial scheme. A timetable for the implementation of the LPG taxi scheme was outlined in the policy address as well. Nevertheless, in the recently published paper entitled "A proposal to introduce LPG taxis", apart from expressing its willingness to set up additional filling stations and train qualified mechanics, the Government has failed to make any commitments as to implementing any concessionary schemes and establishing an "economic incentive" mechanism to ensure the successful implementation of the LPG taxi scheme.

According to the paper, LPG taxis are not better than diesel taxis, both in terms of effectiveness and operating costs. Furthermore, the Government requires that LPG taxis must be ex-factory import and no modified vehicles can be used. As a result of this, the costs of switching to LPG vehicles by the taxi trade will be increased instantly. Moreover, apart from showing unwillingness to help lower the prices of LPG, the Government has also failed to promise that it will waive fuel duty on LPG. Consequently, the trade finds it impossible to save operating expenses even in the long term. Speaking from a commercial angle, it is perhaps hard for us to ask the trade to "lose money" in support of "environmental protection". The LPG scheme will therefore eventually end in failure.

The Hong Kong Progressive Alliance proposed last year that the Government should provide the trade with more financial assistance such as exempting LPG fuel duty and granting concessions for first registration tax and car purchase. Much to our regrets, the consultative paper has failed to implement the relevant proposals. I earnest hope that the Government can consider these proposals as soon as possible. Apart from the LPG taxi scheme, the Government should also expeditiously study the feasibility of requiring other diesel vehicles, particularly medium-sized diesel vehicles of high emissions, to switch to LPG or other environmentally-friendly fuels. It is learnt that the United States, the Netherlands and Austria have succeeded in implementing LPG buses. The Government can well make reference to these examples and study the feasibility of introducing the technology into Hong Kong.

Lastly, I want to talk about idling engines, an issue easily ignored by people but definitely should not be taken lightly. According to the information provided by environmental protection groups, idling vehicles with engines running will have more alarming emissions than running vehicles. On average, the amount of nitric oxide emitted by 37 idling vehicles is equivalent to that emitted by 4 000 running vehicles. Many European and American countries have already put in place legislation to regulate idling vehicles. Unfortunately, the Government of the Hong Kong Special Administration Region has failed to follow such examples. In my opinion, the Government should, on the one hand, consider enacting legislation to control the emission of exhaust gas by idling vehicles and, on the other hand, strengthen environmental protection education and publicity so as to bring out the seriousness of the related problems and put them into concrete terms with a view to raising the public's awareness of protecting the environment. When drivers understand that it will eventually harm other people as well as themselves if they pull up their vehicles without turning off the engines, the problems will be solved more easily.

In spite of the fact that government expenditure on environmental protection has soared from $2.2 billion in 1995 to $3.3 billion this year, it seems that our environment, particularly air pollution, has not been substantially improved. I hope that in making full effort to stimulate the economy and leading Hong Kong towards the road of economic revival, the Government can, at the same time, step up improving our environment and air quality. Otherwise, even if our economy revives and the spending power of the public improves, our quality of living will still worsen. And things will not turn better tomorrow!

Madam President, I so submit.

MRS MIRIAM LAU (in Cantonese): Madam President, the Chief Executive said in his policy address this year that in order to abate water pollution, the Government plans to spend $12 billion on sewage collection and treatment over the next five years. Obviously, the Government thinks that for the sake of having cleaner water, it is worthwhile to spend some public funds.

The Chief Executive also talked about another most pressing environmental issue, that is, air pollution; but he stopped short saying how much will be spent on improving air quality. Yet, he made it very clear that all next taxis would be required to use liquefied petroleum gas (LPG) as fuel starting from the end of the year 2000. We do not yet know how much the Government will be spending on promoting the use of LPG taxis, and many issues crucial to the success of the LPG taxis scheme, such as the prices of LPG taxis, the price of LPG, the number and distribution of LPG filling stations and the number of garages and technicians available for LPG taxi maintenance, are still not known.

Government officials have assured the taxi trade that the operating costs of LPG taxis will not be higher than those of diesel taxis. However, even though the prices of LPG taxis are lower than those of diesel taxis at present, it should be noted that they do consume more fuel. That is why the operating costs of LPG taxis may not necessarily be lower than those of diesel taxis. Moreover, with respect to the pricing of LPG or fuel duty, nobody can now give any assurance. And the useful life of LPG taxis may well be shorter than that of diesel taxis. In other words, the depreciation rate of LPG taxis will be higher, and this will raise their operating costs correspondingly. As such, how can the Government guarantee that the operating costs of LPG taxis will not be higher than those of their diesel counterparts?

The Government "believes" that during the initial stage of the LPG taxi scheme, there will be some 40 LPG filling stations. There are now more than 180 petrol filling stations in Hong Kong, and 40 LPG filling stations are equal to about one fifth of all existing filling stations. Since LPG filling stations must be located 55 ft off any residential settlement, it will be difficult to identify sites in the urban area for building such stations, and this may lead to a shortage and an uneven distribution of LPG filing stations in the urban area. Under such circumstances, how can the Government guarantee that there will be a sufficient number of LPG filling stations and that they will be evenly distributed?

Garages which provide repair and maintenance services for LPG taxis have to be more spacious, and operators of these garages have to invest a lot of capital on renovation before their existing garages can comply with the stringent requirements. Since only a very small number of garages can meet the required standards, LPG taxi maintenance services may not be easily available; its maintenance costs may be higher; and the time required longer. Though the Government has indicated that some garages are willing to provide repair and maintenance services for LPG taxis and technicians will be trained, we do not yet know how many garages and technicians will actually be available to provide such services. Therefore, how can the Government guarantee that the maintenance costs of LPG taxis will not be higher than those of diesel taxis?

It can be said that the length of taxi queues is a good indicator of the state of our economy. At present, long taxi queues can often be seen, and this shows that the economy of Hong Kong is still in bad shape. Since many taxi owners are "single-taxi" owners, and their income has gone down substantially. They can hardly make ends meet as they have to repay their taxi mortgage loans and support their families. So, how can they have the means to take out another mortgage on a LPG taxi under the present economic conditions? It is also doubtful whether they can obtain any loans from banks.

If the Government wishes to implement the LPG taxis scheme as soon as possible, it has to work out solutions to the above problems as soon as possible. The Government should understand that in order to attract taxi operators to switch from LPG to diesel, it has to offer sufficient financial incentives to taxi operators by, for example, waiving the first registration tax and annual licence fee for LPG taxis, undertaking not to levy any duty on LPG, and providing financial assistance for purchase of LPG taxis, in addition to alleviating the uncertainties felt by taxi operators about their future. In order to make the air of Hong Kong cleaner, I think it is worthwhile to spend some public funds on this area.

Furthermore, with respect to support facilities, the Government should render its full support and occasion the greatest convenience. Some petrol dealers have approached me, saying that they have plans to modify existing petrol filling stations to provide LPG filling facilities, but the Government insists that this constitutes a modification of land use, and a premium has thus to be paid. With such an attitude of "profiting as much as possible from the situation", how can the Government ensure that the pricing of LPG can be maintained at attractive levels? How can petrol dealers be persuaded to set up more LPG filling stations? And, how can the LPG taxi scheme be implemented at an early date?

Madam President, the Government has indicated that it would examine the feasibility of requiring other types of diesel vehicles to use LPG or other environmentally-friendly fuels. I wish to remind the Government that before it extends the LPG scheme to other types of vehicles, it should first conduct a comprehensive test, fully consult the trades concerned, provide adequate information and offer adequate financial incentives. It must not repeat what it has done with the LPG taxi scheme this time around. In other words, it must not release a consultation document with no substantial contents before the trial is completed. Though the Government claims that it wants to conduct a consultation exercise first, it has in fact decided to push ahead, even at a time when the taxi trade is still full of worries.

I have always insisted that we should adopt a multi-pronged approach to improve the air quality of Hong Kong. In particular, I think that the Government should take positive and active measures, but unfortunately, the Government has hitherto remained extremely passive, with the Environment Protection Department (EPD) concentrating only on stepping up prosecutions against smoky vehicles and on imposing heavy penalties on drivers. When ever has the EPD taken the initiative to launch a study on how to reduce black smoke? Unlike the Government, the taxi trade has expressed a positive concern, and it is only with the impetus given by the taxi trade that the Government has finally launched the pilot scheme on LPG taxis. And, it is also with the sponsorship of the taxi trade that the Hong Kong Polytechnic University has managed to successfully devise an "exhaust fumes filter", which can reduce the amount of suspended particulates in diesel vehicle emissions. In order to improve the air quality, the Government must adopt a more positive attitude and should not shift all the responsibilities to the taxi trade or vehicle owners.

The Honourable Miss Christine LOH's amendment calls for a substantial increase in the fine to be imposed on smoky vehicles. I do not think that her amendment is desirable at all. I think that it is much too passive to achieve our goal simply by imposing fines, and this may easily victimize the innocent. I have always encouraged vehicle owners to keep their vehicles in good conditions, but as everyone knows, there is a great variation in the standard of vehicle maintenance and repairs in Hong Kong, and a lot of garages are simply not up to standard. Besides, since the Government has not introduced any regulatory measures, it is very difficult for vehicle owners to assess the quality of the repair services they receive. If we do not first make any efforts to tackle the core problem and encourage car mechanics to improve their skills, it will be unfair to penalize car owners so very heavily, for they may have done nothing wrong except giving their cars to "unscrupulous" garage operators for repairs and maintenance.

With these remarks, I support the original motion, but object to the amendment.

DR LEONG CHE-HUNG (in Cantonese): Madam President, a number of my colleagues did talk about the seriousness of air pollution. I believe no one will raise any objection. Neither will anyone think that it is not right to say something like that. In fact, air pollution is so serious that it has reached a level of "breathing is hazardous to your health", not just "smoking is hazardous to your health". I am not intentionally making this remark to scare people. As we all know, the Roadside Air Pollution Index has repeatedly reached new heights over the past few months. Studies made by the medical profession also pointed out a long time ago that suspended particulates in the air had a direct bearing on such respiratory diseases as chronic bronchitis, asthma and emphysema. Although Dr TANG Siu-tong has just mentioned it, I want to stress once again that according to the information released by the World Health Organization (WHO), the hospitalization rate will rise by 10% if the suspended particulates in one cu m of air rises by 20 mg; an increase of 55 mg will push the death rate up by 10% as well. Apart from these, filthy air caused by exhausts emitted by diesel vehicles and passive smoking also has a close relationship with the development of asthma among children. In fact, not only Mr LAU Chin-shek finds that he is not breathing smoothly. A study conducted in 1996 showed that 16 out of every 100 children who were aged below 13 contracted asthma, a number which doubled the figure five years ago. The medical profession has been watching closely as to how to improve our air quality in order to protect public health. It is regrettable that the Administration has been acting as slow as a snail in adopting corresponding measures. We find it really hard to understand.

Just now, Members have talked about the merits of switching from diesel to liquefied petroleum gas (LPG) and expressed disappointment at the slow pace of the Government. I do not want to concentrate my speech in this area anymore. How can the slow action of the Government and its practice of doing things hesitantly curb the air pollution problem which is growing worse?

Just now, Mr Edward HO pointed out that the current level of air pollution in Hong Kong could cause 2 000 people to die prematurely each year. As it is a matter of life and death, when can the situation be improved? I would like to look at this issue from three levels. Just now, Dr TANG Siu-tong also mentioned that many drivers kept their engines on even though they were not running. This problem is more serious with buses, coaches and private cars driven by professional drivers. Which department, or should the Environmental Protection Department (EPD) exercise control on these vehicles? Which department should be responsible for educating the public or even controlling the situation by means of penalties? Why can we not consider adopting these measures? In fact, we have discussed this issue a number of times in this Council over the past years. But it seems that the Government has to date still failed to implement the relevant measures.

Over the past decade, the number of private cars in Hong Kong has grown by more than one-fold. This is undoubtedly a major factor contributing to the worsening air pollution. The Administration should formulate plans with various major mass transit organizations to encourage the public to make use of public transport so as to slow down the growth of the number of private cars.

Madam President, we find not only the air outdoors has a serious pollution problem. Indoor air quality face the same serious problem as well. This has virtually put the public in a situation where they find themselves "to be in a dilemma as to whether they should stay indoors or outdoors". According to the findings of a survey conducted by the EPD last year, indoor air quality of more than one third of the offices in Hong Kong is far below the international acceptable standard, thereby making offices a breeding place for germ transmission. Furthermore, it was found that almost one third of our air contains suspected or confirmed carcinogenic substances, which are above the standard set by the WHO. One third of the respondents also expressed dissatisfaction with the indoor air quality of public places or the commercial buildings where they work. The main culprit is substandard air-conditioning systems. Problems pertaining to passive smoking are also another major culprit.

It is imperative for the Administration to lay down indoor air quality standards and put them into practice and under control. At the same time, the Government should further extend the ban on smoking indoors to offices and various public places.

Madam President, our air quality, both indoors and outdoors, has greatly threatened public health. To really improve the living quality of the public and to stop public medical expenditure from rising as a result of air pollution, the Administration must expeditiously put control measures into practice.

Lastly, I would like to offer a few comments on the amendment. There are two points I would like to raise. The first point is a matter of general principle. I think Members should understand that although the motion debates we conduct have no binding effect on the Government, we can exert pressure on the Government by speaking in one voice and moving in the same direction. Therefore, if Members agree with the underlying principle of a certain motion but disagree with certain minor details, I hope they can communicate with each other as far as possible, instead of proposing amendments. This is because in so doing, the Government will form an impression that we have no uniform direction at all. As a result, it will ignore us completely. The moving of amendments will also create an environmental protection problem as more paper is needed for printing documents.

With these remarks, Madam President, I support the motion.

MR LEUNG YIU-CHUNG (in Cantonese): Madam President, the main topic for today's debate concerns air pollution, with the focus put on vehicle emissions. We all know that vehicle emissions only represents an important component as far as air pollution is concerned. In fact, there are many factors contributing to air pollution. An example of these is "passive smoking", as mentioned by Dr LEONG Che-hung earlier. Dust found in construction sites can also lead to air pollution. Although the topic for today's motion debate does not cover an extensive scope, I hope, in discussing the problems relating to air pollution today, the Government can also pay attention to other areas with a view to solving the problems.

Just now, Mr LAW Chi-kwong mentioned that air pollution was particularly serious in New Territories West. I would also like to explain why this is so. As far as I understand it, the density of buildings in some districts of New Territories West, such as Kwai Chung and Tsing Yi, is excessively high. Air circulation is restricted just because there is too little space left. The fact that many heavy vehicles run in those areas, coupled with the fact that too many buildings have undergone redevelopment over the past few years, has made the pollution problem even worse. As for Yuen Long, dust is produced in a comparatively large amount because of the excessive number of construction sites. Therefore, we should also pay attention to the planning issues pertaining to these areas in discussing the air pollution problem today.

I fully endorse Mr Edward HO's point about planning just now. In particular, I greatly support many of the issues raised by Mr HO today. Although the issues raised by the Liberal Party in the past were frequently concerned with capitalists and both Mr HO and I should have held opposing views, I greatly support most of the points he has raised. I feel that he understands many problems that exist in reality and has been able to put forward some of his views. The difference between Mr HO and Miss Christine LOH is that Mr HO mentioned that the Government should provide an incentive to encourage the public to solve the problems, while Miss LOH talked about penalty instead. In my opinion, it is not that we do not need penalty. To a certain extent, penalty is essential. It will not work if we do without penalty. This is because no one will bother about anything if there is no penalty in this world.

This question we have today is that as far as vehicles are concerned, diesel vehicles cause the most serious pollution problem. However, most diesel vehicles are used for "making money". It will definitely increase the costs if we ask the owners of these vehicles to make improvement. Madam President, we all know that no one will reject fresh air. Even car owners would not want to see their cars emitting black smoke.

Talking about black smoke, it reminds me of an incident. Last week, we went to visit a special school. As I was late, I decided to drive myself and I was following our LC3 light bus. The black smoke emitted by it was similar to that released by a smoke canister. Following it, I could hardly see the road clearly. How I wish that it shall be used no more. (Laughter) I asked the driver why that was so. He said he had inspected the bus lately, and he had been prosecuted by the Environmental Protection Department too. But the black smoke problem remains unresolved. I hope the President can follow up this matter. (Laughter)

As far as black smoke is concerned, diesel vehicles have a more serious problem with suspended particulates. But there are a few issues we can consider. Firstly, apart from taxis, light goods vehicles also run on diesel. This is because diesel vehicles perform better and their horsepower is greater. In particular, other vehicles will perform less satisfactorily in climbing up steep slopes. It is for these reasons that professional drivers prefer diesel vehicles. Nevertheless, they also agree that diesel is not good as far as environmental protection is concerned, and they also hope that diesel can be replaced by another fuel. But unfortunately the Government has failed to provide them options. What the Government has done is only to force them to continue to use diesel, without considering how to provide alternatives within the operating costs of professional drivers so as to give them more choices. Therefore, we should hold the Government responsible in this respect.

Just now, many Honourable colleagues mentioned the liquefied petroleum gas taxi trial scheme, which is a good attempt indeed. We have now taken the first step, though I am afraid that it has been too late. What matters most is that the trial only targets at taxis, without looking into light goods vehicles so far. In that case, what shall light goods vehicles do? The Government will only set up a compulsory system, or shirk its responsibility on to drivers when it is not acting positively. Miss Christine LOH has asked the Government to raise the penalties. But this will only make the situation worse for drivers. In particular, the passenger and cargo transportation industry has been performing badly under the current economic downturn. If the Government still insists on raising their operating costs and fining them under the present circumstances, it will be the same as asking them not to work anymore and join the unemployed ranks instead. Should that really happens, they can only choose to apply for unemployment assistance and then they will become a burden for the community. Therefore, we should not employ punishment unilaterally because this is not an adequate measure. It will be most satisfactory if the Government can explore more options rather than relying on compulsory means to solve the problem. Professional drivers often say: "If the head were full of hair, no one would prefer to have favus of the scalp on it". This is why I do not agree that we should resort to punishment in solving the air pollution problem. Although Miss Christine LOH always stresses on environmental protection, a point which is supported by every one of us, we must explore a good method to solve the problem. If we only know to pin the label of environmental protection on others, many people will find it impossible to stand the pressure. In mentioning environmental protection, apart from publicity, I think the only way to solve the problem and the best way to do it is to provide more options for the public.

MR ALBERT HO (in Cantonese): Madam President, in 1997, the density of respirable suspended particulates (RSP) recorded by six of the nine air quality monitoring stations in Hong Kong did not conform to the air quality objective. These stations are located in Kwun Tong, Yuen Long, Sham Shui Po, Central and Western District, Tsuen Wan and Mong Kok respectively, meanwhile, it was also recorded in Kwun Tong, Sham Shui Po and Mong Kok that nitrogen dioxide concentration did not conform to the air quality objective. Recently, the roadside air quality index in Causeway Bay has risen steadily and indices over 100 have frequently been recorded. This shows that air pollution in the urban area is fairly serious and it poses a threat to the health of people suffering from respiratory or cardiac troubles. Moreover, the health of ordinary people living continuously in an environment with polluted air will also be endangered. Therefore, I think that the Government must expeditiously take comprehensive measures to improve our air quality.

As diesel vehicles emit large quantities of RSP and nitrogen dioxide and they account for two thirds of the total vehicular mileage in the urban area, the Government must give priority to doing away with diesel vehicles and controlling exhaust emissions by diesel vehicles.

The Government has recently suggested the introduction of liquefied petroleum gas (LPG) taxis and the Democratic Party supports this move. Unfortunately, the Government has not made adequate commitment in its proposal and it is not committed to giving the trade various tax concessions or ensuring that the future prices of vehicles and fuels and the maintenance charges will not be higher than those at present. In fact, the Government is duty-bound to improve our air quality and protect people's health, and it should not shift all the responsibilities onto the taxi trade or ask them to bear the costs and risks of the whole scheme. On the contrary, the Government should offer sufficient financial incentives to encourage the taxi trade to switch to LPG for the benefit of the whole community.

Merely introducing LPG as fuel for taxis is not enough because in densely populated areas such as Mong Kok and Causeway Bay grave pollution at roadsides is also caused by buses, minibuses and lorries. For this reason, the Government should expeditiously explore the introduction of other more environment-friendly fuels for minibuses, buses and lorries in place of diesel.

In fact, many governments, universities and environmental protection bodies in foreign countries have actively carried out studies to improve air quality. Their studies include the use of diesel and petrol substitutes, improving the composition of diesel and petrol as well as the structure of motor engines with the aim of minimizing the exhaust emissions from vehicles. Despite the very serious state of the air pollution problem in Hong Kong, the Administration has not taken positive actions to improve air quality. I hope that the Government can make further reference to foreign experience and follow closely the latest progress of foreign studies in this respect. Once it discovers any suggestion suitable for use in Hong Kong, it should implement a pilot scheme to test its effectiveness. Government officials must initiate positive actions to master the latest technological and research developments. This is the direction we should take to solve the air pollution problem.

I have recently received a proposal on Renewable Energy Industry published by the Environmental Education Research Institute. The proposal is about their plan to co-operate with the University of Hong Kong to start implementing from January next year a pilot scheme on the use of biofuels on buses. These biofuels are actually processed from the waste cooking oil of restaurants. The use of biofuels added to diesel will reduce the RSP and nitrogen dioxide in vehicle exhausts and modifications need not be made to the engines of vehicles using biofuels. According to the Institute, quite a number of places in the United States have begun to use biofuels. Has the Government got any information on similar schemes? Has the Environmental Protection Department (EPD) studied this? What assistance will the Government offer to universities conducting tests on their own accord? Will it prudently consider adopting the results of such researches so that they can have practical values?

In respect of the more long-lasting improvement measures mentioned above, I hope that the Government will work out long-term development strategies and confirm the schedule of implementation so as to allow the public to know the Government's target and determination.

As for short-term measures, the Government must step up enforcement actions against smoky vehicles. The EPD has recently spent $480,000 on 12 portable vehicle exhaust testing equipment ordered from Europe to cope with the relevant work. Last year, the EPD also imported a new equipment, dynamometer, for testing exhaust emissions of light goods vehicles below 5 tonnes. This pilot scheme has been completed and the EPD has decided to specify from the middle of next year that vehicle testing centres should use the new equipment to test light vehicles. As for heavy vehicles over 5 tonnes, the EPD has just started a test which will last for three months. I find that these measures will have positive deterring effects against smoky vehicles and that the EPD should inject more resources into speeding up the use of the new equipment in exhaust emission tests.

The Government should step up publicity to call upon drivers to switch off the engines on stopping their vehicles in order to reduce exhaust emissions.

To improve the air quality of densely populated and highly polluted districts such as Mong Kok and Causeway Bay and reduce congestion, the best way is to reduce traffic flow. It is because the victims of vehicle exhausts are often people working and living in these congested areas. I hope that the Government will develop mass transit carriers and restrict the use of such areas and roads by public transport and private cars. This way, there will be less traffic congestion and exhaust emission.

I so submit in support of the original motion and the amendment.

THE PRESIDENT'S DEPUTY, DR LEONG CHE-HUNG, took the Chair.

MISS CYD HO (in Cantonese): Mr Deputy, today I will speak in support of Mr Edward HO's original motion and Miss Christine LOH's amendment.

The air in Hong Kong is in fact worsening with each passing day. Many of my colleagues said when they looked out of the window, the sky was not as clear as before. Air pollution has now reached such a serious state that not only our breathing is being affected, we can even see air pollution with our naked eyes. In the consultative paper published by the Government on a proposal to introduce liquefied petroleum gas (LPG) taxis, the Government has publicly admitted that Hong Kong ranked third among Asian cities with the worst air pollution problem. From the global perspective, Hong Kong ranks eighth in terms of suspended particulates. But all these international rankings are not something that we should be proud of.

Looking back at Hong Kong itself, air pollution has done great damage to our economy. According to some statistics made by environmental protection groups, within the six years from 1991 to 1997, 22 000 people died because of problems with their respiratory systems. Assuming that each patient who suffers from respiratory troubles will need to be hospitalized for five-odd days, he will then incur $36,000 in medical expenses. Adding the expenses up, medical expenses for treating respiratory diseases over these six years will amount to $0.8 billion.

In fact, poor air quality will affect both our respiratory systems and hearts, as well as leading to eye irritations. It is estimated by environmental protection groups that with a rise of 1 mg of RSP, 64 more patients will need to be hospitalized each year, and this is tantamount to an additional medical expenditure of more than $2 million. If the Government can use these money to improve our air quality, it can reduce medical costs on the one hand, and improve the public health and raise our productivity on the other. Why did the Government refrain from doing that?

I believe Members will all agree that our air quality has deteriorated more rapidly than before over the past two years. But relatively speaking, the Government has slowed down its pace in taking relevant measures. Although the LPG taxi trial scheme has been in operation for almost a year only, it has received many acclaims. Except for the people in the trade who have expressed little confidence in the scheme because the Government has failed to provide supporting facilities to tie in with the scheme, other people have given many positive opinions. However, the Government has deliberately slowed down the progress by conducting a three-month consultation. Sometimes, I really find it hard to understand the criteria adopted by the Government in conducting consultation. The consultation period for the Public Order Ordinance and the Societies Ordinance was two weeks. As for the review on the restructuring of district organizations, the consultation period was one month. But surprisingly, the consultation period will last for three months for the LPG trial scheme which has received so many acclaims. According to the consultative paper, the Government will only start requiring all newly imported taxis to run on LPG until the year 2000, and encouraging all car owners to switch to LPG until 2005. Assuming that a taxi has a useful life of 10 years on average, we will have to wait until 2010 for all taxis to switch from diesel to LPG.

If car owners and drivers do not have confidence simply because the Government has failed to put in place a supporting scheme, they will still have no confidence no matter whether or not the consultation will last for three months or six months. The consultation will eventually end in failure. Such being the case, why does the Government not speed up implementing the LPG scheme? Is it because of the fact that there are insufficient filling stations at the moment and that the number of which will only be expanded to 40 until the year 2000 that has made professional taxi drivers lose confidence to switch to LPG?

Now I want to respond to one of the issues raised by my colleagues in connection with the operating costs of taxis. In fact, as far as the operating costs of a taxis is concerned, the most expensive item is the license, rather than fuel or the price of the taxi itself. When taxi licenses were at their peak, each taxi license costed $3.6 million. Now the price has come down to $1.6 million, a difference tantamount to the cost of nearly 10 taxis. If we calculate in terms of 10 taxis and assuming each taxi can run 10 years, the total will add up to 100 years. If the Government still continue with its tender system and our community still prefer spending money on speculating on taxi licenses to improving air quality, it will be very saddening indeed.

Of course, in order to have cleaner air, we should not only confine to encouraging taxis to switch to LPG. We still have 4 000 public light buses, and some of them are medium buses, including our LC3. Apart from these, we have many lorries and buses as well. We all know that the exhaust gas emitted by these types of vehicles is obnoxious when we stand by the roadside waiting to cross the road. I believe many Honourable colleagues have the experience, after standing hours outside the Sogo Department Store or in Peddar Street raising funds, of feeling having put on some weight as their lungs have inhaled a lot of suspended particulates. I once saw the pair of white shoes worn by Miss Emily LAU turned black right after she has stood outside the Sogo Department Store for just an hour. Therefore, I would like to remind Members not to wear white trousers and white shoes if they need to go there to raise funds!

Of course, the consultative paper has also mentioned that the standards adopted in Hong Kong for the purpose of monitoring vehicle emissions are very strict and even stricter than that adopted in Europe. But I would like to raise the point that enforcement has been too loose. When I press the pager issued by this Council each day, I will definitely see a warning that reminds us to drive slow on reaching what locations every evening. The pager will also tell us the locations where we should drive slow since the police will set up several road blocks each evening for detecting speeding vehicles and taking photographs. But I have never seen the police intercepting smoky vehicles. Some of my colleagues in this Council are spotters. After receiving complaints about smoky vehicles, they will inform the Environmental Protection Department (EPD), which will in turn notify the relevant car owners to send their vehicles to the EPD for inspection, normally two weeks after the initial complaints. For those car owners who are co-operative, they will have their cars repaired before sending them for inspection. This is not a bad thing anyway. But for those car owners who are not so co-operative, they will tune the engines of their cars by lowering the fuel intake. After the inspection, they will raise the intake again. As a result, their cars will continue to emit black smoke as usual.

Apart from taking such boring measures as taking strict enforcement actions, encouraging the switch to LPG taxis and strengthening prosecutions for the purpose of improving air quality, we can adopt some air improvement measures which are more positive and can make us feel more refreshing, and that is by planting trees and reducing the use of paper. I would like to take this opportunity to propose to the Director of Audit that he can, after presenting that thick report, invite the Financial Secretary to go planting trees together. I believe seven of my colleagues from the Public Accounts Committee will definitely lend their overwhelming support to this suggestion.

THE PRESIDENT resumed the Chair.

MR BERNARD CHAN: Madam President, I have lived in Los Angeles for five years, where smog has been a big health issue for the residents. But over the years, air quality has much been improved by the concerted efforts of both the society and the authorities. Hong Kong's air quality has already been deteriorating. Smog is now clearly visible from high altitude. The Government has frequently advised us to stay indoors and do not go for sports when the sun undergoes photochemical reaction with incredibly high concentration of suspended particulates.

Poor air quality results in premature death of adults and in serious respiratory impairment of youngsters. Many kids suffer from allergic problems, which damage their learning and sports abilities. Huge medical expenses and insurance bills resulted from poor health have offset a high percentage of Gross Domestic Product growth. The consequences are not unfamiliar to us, as our staff takes regular sick leave.

Fresh air has become our lost treasure. To retrieve it takes immense energy and determination ─ it is a community-wise exercise requiring a discerning leadership from the Government. To my regret, converting diesel taxis to liquefied petroleum gas taxis is the only major issue on our Government's agenda of air improvement. But the slow progress in the conversion can hardly catch up the speed of air deterioration. Just to notice that the percentage frequency of hourly visibility lower than 8 km has soared from 5% in 1995 to a double in 1997. The trend is very worrying. But we see only the Government's slow reactions in erecting just three roadside air monitors and conducting an inefficient cross-border study on air pollution.

I am expecting bolder and more timely strides against the problem. Ideas stemmed from the Clean Air Act of 1990 and the Air Quality Management Plan since 1995 in California may give us some insights.

Firstly, we have to set up our own data collecting devices to identify the source, type and intensity of pollutants. Corresponding standards should be devised to indicate tolerance, action or emergency action.

Secondly, there should be changes in town planning. Road junctions at the heart of the city should be avoided. Public transport should be given top priority. Construction and demolishing works should be strictly monitored in terms of pollution levels.

Thirdly, a governing board for air quality management, comprising officials, the business sector, municipal representatives, academics and green activists, should be set up. Its major task is to propose policies and to monitor work progress.

Fourthly, more incentives should be given to the private sector for voluntary compliance. Companies, which have earned a considerable amount of green credits, should be given reinforcements in terms of business opportunities. By the same token, companies lagging behind green standards would face tougher measures. Clear intermediate goals, say, reducing air pollutants by 20% in four years, should be fixed for luring concerted efforts in society.

I am not prepared to give further thoughts on vehicle emission, which has been thoroughly addressed by our colleagues. I hope the officials will carefully attend to each of our suggestions. Time is running out and it is the time to end our passive suffering.

Madam President, I support the Honourable Edward HO's motion. Thank you.

PROF NG CHING-FAI (in Cantonese): Madam President, in the past, the Government and people often thought that advanced environmental protection measures ought not be adopted in Hong Kong, perhaps we thought that Hong Kong was no longer an industrial production base and we only had to maintain a fairly good business environment, freedom, the rule of law and a simple tax regime, as these added to the China factor would allow Hong Kong to reap what we had not sown. We have overlooked a fact that society that despises new technology and innovative ideas will finally eat the bitter fruits. The use of environmentally-friendly and sustainable technologies has been the social and economic trend of developed countries since the 1980s. If we do not keep up with the others quickly, we will soon find that our technological standards are below standard, for instance, export products will have to meet environmental protection standards, we will then have to pay very expensive prices.

Moreover, the expenses on cleaning up environmental pollution have kept increasing. In the past, some developed countries and many developing countries did not attach importance to environmental protection and were not willing to give up highly polluting energy resources and raw materials in their pursuit of production growth. At last, they have to pay very expensive fees for clearing up serious pollution. At present, the heated discussions about cleaning up the underground pollution of the previous Kai Tak Airport, I am afraid, are only the tip of an iceberg. Among the various types of pollution, air pollution affects Hong Kong people most seriously. For this kind of pollution that we cannot see but only feel, every person in Hong Kong has paid the price of their health and having shortened life expectancy. As a result, the Government and society have paid more and more for the public's health care and medical expenses. Other invisible costs are particularly enormous as a place with low environmental quality cannot attract investors and persons of ability.

About an hour ago, my Honourable colleagues passed me such a sample given us by a foreigner. He said that it was a filter in his office which had only been used for two months. He said that this filter was whiter than Snow White when it was new but it is now like this. Lastly, he added sternly that pollution drives away investors and tourists and increases the demands for hospital beds and graveyards. We can take this perhaps as a reminder.

Madam President, air pollution in Hong Kong is mainly caused by vehicle exhausts. In the 1970s, the Government started discussions on the Electronic Road Pricing Scheme, restricting the entry of vehicles to urban centres, rejuvenating energy resources, electric cars and pollution-free fuels. But all these dreams have not come true. At that time, people found that environmental protection policies do not match the free market principle and our business environment but today people have reached a new consensus on the free market principle and the quality of life has become a factor constituting the business environment. The rules of the game have also changed and we have to go back to work on environmental protection. But we undoubtedly have to pay higher costs and face more obstruction. Nevertheless, it is better late than never.

Madam President, since the 1980s, the Government of California in the United States started implementing a rejuvenating energy policy covering solar energy and wind as well as a reform of power generation facilities with new innovative environmental technologies. The Government of California believes that if it continues to invest substantial capital in traditional oil facilities, it will soon be threatened by the shortage of oil and an increase in its price, and it will also fail to enjoy innovative environmentally-friendly energy technologies, at the expense of an opportunity for long-term development. In terms of the use of energy by vehicles, Hong Kong attaches importance to short-term interests after all and it is unwilling to change its excessive dependence on diesel, petrol and coal. In the long run, we should try our best to avoid using hydrocarbon fuels as the nitrogen dioxide generated is the cause of the greenhouse effect and such fuels are deemed as pollutants. Mr Edward HO suggests examining the feasibility of introducing other environmentally-friendly fuels, and I totally agree with him.

As for the introduction of new low-pollution energy for vehicles, I think that the Government is duty-bound to launch a study and consultation on the overall policy and coupling measures and make efforts in the following four aspects:

1. Launch extensive publicity and elaborate on the grounds of the development strategy, people's needs and support;

2. Environmental protection measures have to be cost effective;

3. Coupling measures (petrol filling stations, vehicle repair factories, new vehicle import specifications, new technical training and supply of spare parts) to ensure that the level of services enjoyed by people using new energy will not be lower than that enjoyed by other people using traditional energy; and

4. The policy has to be continuously and steadily implemented so that people who have altered their vehicles will not suffer losses when changes are made to the policy.

In addition, I wonder whether the Government will consider a new method of promoting new vehicle energy. The Government should start using the new fuel on government vehicles (dust carts, postal vehicles and vehicles for use by civil servants), and when the low-pollution fleet of the Government is successful, it will be more convincing and the use of the fuel can gradually be extended to public transport fleets governed by legislation and which have their own filling stations (such as the feeder buses of the Mass Transit Railway Corporation and other public buses) and then to other types of vehicles. This will be more effective than targeting at the taxi trade alone and the same method can actually be adopted for the promotion of other new measures.

Madam President, in respect of the use of low-pollution fuels, Hong Kong is obviously not an advanced place and it is of great urgency to improve air quality. I support Mr Edward HO's original motion and hope that the Government will consider the measures I have proposed. As for Miss LOH's amendment, there are some instances of overlapping as the word "comprehensive" is already found in the original motion and it already signifies short-term and long-term measures. Moreover, it also fails to add anything new. As to Miss LOH's proposal of compulsory tests for all vehicles, it gives people an impression that we would rather kill the wrong person than let the culprit go. I find it hard to give her amendment my support.

Madam President, I so submit.

MR NG LEUNG-SING (in Cantonese): Madam President, everybody knows that there is serious air pollution in Hong Kong especially in some commercial centres where people and vehicles cramped together. After the Environmental Protection Department (EPD) has increased the use of roadside air quality monitoring stations, higher than ordinary air pollution indices have often been recorded. The Chief Executive has particularly mentioned this problem in his second policy address and it shows that the problem has aroused social concern.

As for the punishment targeted at smoky vehicles under the existing legislation, the key lies in more stringent enforcement so as to achieve deterring effect. Enhanced prosecutions against owners of smoky vehicles should be continually and steadily taken to create a culture of environmental protection in our community in a more effective manner.

As regards the proposal in the policy address that all new taxis should be switched to liquefied petroleum gas (LPG) by the end of 2000, this is undoubtedly a right direction and I believe that the trade concerned and the Government can fully communicate and co-ordinate and make joint efforts to improve our air quality. However, the Government can actually make efforts itself to promote environmental protection and play a leading role. For instance, the dust cart fleets of the Urban Services Department and the large number of vehicles used by the Electrical and Mechanical Services Department and the Hong Kong Police Force should expeditiously switch to LPG or other more environmentally-friendly fuels. As the major force for promoting environmental protection in Hong Kong, the Government must pioneer actions to encourage other trades to switch to more environmentally-friendly fuels as this will be more convincing.

Furthermore, in some commercial districts such as Causeway Bay just mentioned by many Honourable Members, the roadside air quality is so poor that it is hardly acceptable. To protect people's health, the Government should quickly come up with feasible improvement measures. I think it might as well consider the suggestion of suitably installing some sprinkling or spraying systems at the roof of buildings in such districts to reduce the suspended particulates in the air as these systems will have practical effects in dry or non-windy seasons. Provided that the cost of the project is suitably controlled and calculated, be it public or private buildings, the Government can install similar facilities for improving air quality as appropriate and I believe that they should help improve the overall environment.

Finally, I still find that compulsory emission tests for all vehicles and pursuing demand-side management of electricity as proposed in the amendment is too much detached from the actual situation, and it is doubtful whether they are feasible. Therefore, I still have reservations.

Madam President, I so submit.

MR HOWARD YOUNG (in Cantonese): Madam President, our deteriorating air quality will affect people's health and strike a blow at the tourism industry. We can imagine that when tourists who have especially come from foreign countries to Hong Kong shop around Causeway Bay find that they are suddenly surrounded by stuffy air and cannot breath smoothly, will they still have the leisure and mood to go on shopping around? Or when tourists follow the instruction of the guidebook for tourists and make a special trip to the Victoria Peak in order to have a bird's eye view of the Victoria Harbour before it turns into a river, they happen to find that a pollution curtain is hovering above the Victoria Harbour, it will spoil their fun and we can hardly expect them to recommend Hong Kong to their relatives and friends when they return home.

The tourism industry is a very important link in our economic chain. But because of the financial turmoil, the tourism industry is taking a stringent test and the Government and the industry are making every effort to save the tourism industry. At this critical moment, we cannot allow any adverse situation that can strike a blow at the tourism industry to last, and improving our air quality is a pressing task.

In fact, fresh air and the appealing city appearance of Hong Kong as well as the importance we attach to environmental protection can be a new selling point of the local tourism industry. When we recognize that Hong Kong can no longer attract tourists by its good reputation of being a "shopping paradise" and the "Pearl of the Orient" alone, and when we have to make efforts to look for new selling points to diversify Hong Kong's attraction as a tourists spot, "a new environmentally-friendly and green Hong Kong" will definitely be a new theme that keeps up with the global trend and can attract foreign tourists mindful of environmental protection. An environmentally-friendly Hong Kong includes other aspects such as water quality and the reclamation of the Victoria Harbour, besides air quality we are discussing about today.

I fully support Mr Edward HO's suggestion that the Government must actively promote the LPG vehicle scheme and conduct a comprehensive study on the introduction of other environmentally-friendly fuels for heavy vehicles as well as developing pollution-free means of transport. If the exhaust emissions of means of transport can be controlled, it can more effectively prevent further deterioration of air quality. The tourism industry plays an important role in this respect. For instance, when coaches are waiting for tourists, they can turn off the air-conditioning on the coaches when air-conditioning is not needed. Actually, this measure was adopted in the past and was widely publicized among tourists.

I also greatly support environmental protection activities for improving air quality and our environment such as tree-planting projects. I can share with Members an experience. In general, when we talk about cities in the Mainland, their poorer appearance as compared with that of Hong Kong may prop up in our minds. Many cities in the Mainland have actually created an environment with fresh air and pretty city appearance through plantation. Besides the Zhuhai Special Economic Zone frequently visited by Hong Kong people, Shiqi City in Zhongshan is also a good example. Flowers, plants and trees are planted in the middle of broad roads and the sides of small streets in Shiqi City, and it can be described as a garden city in the South of China. It is more important for plantation and greening to be carried out in Hong Kong as it is far more densely populated with tall buildings towering around. I urge the Government to carry out plantation and greening projects in the development of new roads. Greening can not only beautify the environment, and those who have taken up botany will know that greening can also improve air quality and beautify cities.

I will not support, but even oppose the amendment today. The amendment has not added any substantive contents to the original motion and its proposals are difficult to implement. Moreover, I do not find it necessary to immediately carry out inspection of all vehicles in Hong Kong.

Madam President, I so submit.

MR MICHAEL HO (in Cantonese): Madam President, I would like to discuss today's topic from the perspective of people's health.

We often mention air pollution index. But perhaps some people do not quite understand what the index is all about. I would like to show people how serious air pollution is from another perspective. On any day in November, if we can look up and see the red autumn sun hanging in the sky like a preserved egg yolk which is not at all dazzling around 8 am or 4 pm, it indicates that air pollution on that day is very serious. If we are observant, such a phenomenon is not uncommon in recent years. It also proves that air pollution in Hong Kong is worsening.

More and more people are suffering from diseases arising from air pollution. As some Members have just mentioned some studies in this area, I am not going to repeat them. But I have got some statistics from the Hospital Authority (HA) relating to respiratory tract diseases over the past four years. First of all, let us take a look at the number of admissions due to asthma: in 1994, there were more than 7 000; in 1995, there were more than 8 000; in 1996, the number rose to 10 000 while in 1997, it was 10 120; a 26% increase over a period of three years. Besides, more and more children are suffering from asthma. Even though the HA has allocated more resources to set up special clinics for asthma, these children cannot have their disease totally cured no matter how much sophisticated equipment is installed and how many specialists are trained if air pollution remains unresolved. Apart from asthma, we can also take a look at the number of admissions due to chronic obstructive airways or chronic bronchitis: in 1994, there were 19 300; in 1997, there were 24 600, a 25% increase. These are typical diseases directly related to the air we breathe everyday. If we cannot resolve the air pollution problem, we can never help these patients solve their problems even though new antibiotics or new tracheal dilating medicines can be developed in the future.

In fact, the hospitalization of these patients incurs huge expenses. This is also a burden to be borne by the whole community. Although we may incur some costs if we carry out proper car inspection and maintenance, yet medical expenses can be saved on the one hand and the number of sick leaves taken by the workforce will be reduced on the other. Productivity can thus be increased. I believe that we can certainly get considerable return from it. Thank you, Madam President.

MR JAMES TIEN (in Cantonese): Madam President, in Hong Kong today, improving air quality is not an environmental protection problem but also a health problem, or even an economic problem. Mr Michael HO has just said that the Government has to spend a lot of money on medical expenses every year to give patients treatment.

For many other problems, the Government often engage consultants to carry out studies and work out reports. However, Members and the Government may not know accurately the economic losses brought by air pollution to Hong Kong. Students will be absent from school, staff will be sick and the industrial and business sectors will lose many working houses. Or, even if staff feeling ill and have respiratory system problems still go to work, they may not be fully devoted or they may only be 70% to 80% devoted to their work, how much productivity will be lost? Now that the Government has spent huge sums on other consultancy projects, can it also work out a consultancy report on this problem and tell us whether the existing losses are billions or tens of billions of dollars? If billions of dollars are lost every year while Mr Edward HO's motion only asks the Government to offer low-interest loans, in other words, the Government only needs to spend $200 million to $300 million every year and we are not asking the Government to bear the total sum of $3.6 billion, that is $200,000 for each of the 18 000 taxis. After $200 million to $300 million has been extended as low-interest loans, diesel taxis will expeditiously be changed to LPG taxis and we do not need to wait for five more years for diesel taxis to be naturally eliminated step by step. Will this be more beneficial to the community and the financial situation of the Hong Kong Government? I believe that this will be more beneficial after we have taken medical expenses into account. I hope that the Government will consider this.

Madam President, there is an economic slump and many people are discussing about how Hong Kong can leave the abyss. Mr Howard YOUNG has referred to the tourism industry. When tourists find that the air quality in Hong Kong is that poor, they will not bother to "see" after they have come to Hong Kong. And when they return to their own countries, they may ask their friends not to visit Hong Kong.

Moreover, on the question of attracting foreign capital to Hong Kong, staff of foreign companies will consider if it is worth the while if they have to bring their families to live in Hong Kong with poor air quality for three to five years, despite the high salaries and bonuses. They may not be willing to come to Hong Kong to work if they have to live here for a few years before returning to their own countries. Will this strike a blow at our plans to import foreign expertise, boost foreign investment and develop into an economic metropolitan? Will this also strike a blow at the Government's latest idea of turning Hong Kong into New York and London in Southeast Asia?

Madam President, I greatly support the suggestion that the engines of stopped vehicles have to be switched off. I certainly understand that this cannot be done in some cases. Take the taxi trade which Mrs Miriam LAU is deeply concerned about as an example, taxis waiting for passengers have to move every now and then, if their engines are switched on and off, the pollution so caused may be even more serious. We think that the engines of stopped coaches should be switched off. Stopped coaches are usually waiting for tourists who will take more than half an hour shopping. Therefore, there is no reason why coaches have to wait for the tourists with their engines on. Or, some lorries may have to wait for dozens of minutes for goods to be loaded or unloaded, why do the drivers not switch off the engines? One possible reason is that they hope that the police will let them go because when the engines are on, they are deemed as loading or unloading goods, but when the engines are off, they will be deemed as illegal parking. The Government should conduct a review in this regard and consider if they are parking illegally if they are really loading or unloading goods. In fact, letting them turn off the engines for several minutes will help save fuel and alleviate air pollution.

Madam President, Members of the Liberal Party have expressed their views on the original motion and I do not wish to drag on. The feasible short-term measures have been stated in the original motion. When Miss LOH spoke on her amendment earlier, she gave me an impression that she has always been most concerned about environmental protection while the Liberal Party had all along been concerned about the economy and people's livelihood and we seemed to have snatched her topic. I hope Members would not mind. We support her but she really does not have to show such defiance towards Mr Edward HO. (Laughter)

Actually, like Miss Christine LOH, I have also been registered as a spotter for more than a year. If the fine for smoky vehicles is substantially increased, a problem will emerge. At present, the fine is over $300 but if we spot a taxi or another vehicle emitting smoke and copy down its licence plate number, it will involve more than some $300. The driver has to send the vehicle for inspection which will hold up his work for a few hours and that is already punishment. When Miss LOH spoke just now, she failed to mention the extent to which the fine should be substantially increased. But some environmental protection bodies have suggested a fine of $10,000. We all know that a taxi driver earns less than $10,000 a month now, should we fine a taxi driver for his income in a whole month just because he drives a smoky taxi? Miss LOH has not said that the fine has to be increased to $10,000. But if it is increased to $1,000, that is not a substantial increase. Do we want a substantial increase in the fine to have penalizing effects or to make the driver concerned lose his income in a whole month? I think some Honourable Members may have divergent views on this.

Furthermore, many Members have mentioned compulsory inspection of all vehicles. There are tens of thousands of vehicles in Hong Kong. How much has to be spent if annual inspection is made compulsory? Are there so many vehicle inspection centres in Hong Kong to cater for tens of thousands of vehicles in one go? We can only inspect 20 000 to 30 000 vehicles a year now.

Madam President, I so submit in support of the original motion.

MISS EMILY LAU (in Cantonese): Madam President, I speak in support of Mr Edward HO's motion and Miss Christine LOH's amendment.

Madam President, I do not know whether you recall that I raised a question in the Council a few months ago asking if the Government would consider letting people who often worked in the streets wore gas masks. I find that there is greater need now and I am afraid that not only those working in the streets but also many people crossing the roads need gas masks. Madam President, the situation is really serious. As many Members have already expressed their views, I would not repeat what they have said, and I would only make certain points they have not made.

Mr LEUNG Yiu-chung's remarks have made a deep impression on me because Mr LEUNG, a representative of the grassroots, shows appreciation of our Honourable colleagues from the industrial and business sector. Why? Madam President, it is because money has to be spent and that is very important. We know that the Conservancy Association, an environmental protection body, has conducted a survey in October and interviewed 1 519 persons in 17 places. The questions do not only relate to air pollution but also cover a wider scope like global warming. It is found that more than 80% of the interviewees are aware of this problem and they find it very serious. When asked whether they think that the Government should do something, 71% of them said that the Government had to take immediate actions as they thought that the problem was affecting their lives seriously. When asked if they were willing to pay, 39% of them said that they were willing to do so, 41% said they had to see while 20% said that they were not willing to pay.

Miss Cyd HO just mentioned the Director of Audit. I have been a member of the Public Accounts Committee for years and I find that two tasks have not been duly fulfilled. Perhaps Mr Eric LI has to elaborate on this. They are related to environmental protection. Originally, we had to conduct a hearing which may be held later concerning the incinerator in Tuen Mun and clinical waste. Dr LEONG Che-hung is not here at the moment. This issue has dragged on for five years, and the Director of Audit has made a report saying that nothing can be done. I would like to ask the Director to elaborate on this later. Another issue is about charges for construction materials disposed at the landfills. These are not done as tasks that require money are not feasible. Madam President, how can we, representatives of public opinions, collect money from our electors? They are definitely not going to pay, who is going to pay then? If the Government has to pay, does the money just fall from heaven? It is after all taxpayers' money. Yet, the Government is not willing to pay and it insists that money should be collected from people concerned and if they do not pay, it will not take actions. The Government should actually offer to pay and then increase taxes later. However, it will then be condemned for increasing taxes. I think the Liberal Party and Mr LEUNG Yiu-chung, the Democratic Party, the Democratic Alliance for the Betterment of Hong Kong as well as the breakfast group will then unite together.

Madam President, I agree fully with Mr Edward HO and Mr LEUNG Yiu-chung that environmental pollution is a very big problem. However, having talked so much, I just want to point out that if we have such a poor environment, we must spend money to clean it up. But, who is going to pay? If people have no food and they have to be beggars, we certainly cannot ask them to pay. However, every person should understand that they have to pay. When we put this into practice, some Honourable colleagues will uphold justice and stand up. Mr LEUNG Yiu-chung has just said that Miss LOH is pressing the public with a gigantic hat labelled environmental protection and putting them under great pressure. Mr Edward HO also says that there will be very great pressure. In fact, the community is under pressure now. While we are debating over the issue, will the Government put forward any plan in future? Even our motion debate today has overruled paying more money.

Madam President, we represent public opinions and many people may not like spending money. But if we find this correct in principle, we should be bold enough to tell them so. We are definitely not persecuting the public or forcing them into a miserable stage of having no food but when the responsibility has to be shared among everyone in the community, they have to pay. Therefore, if this cannot be done, tax increase is the only way out. After all, there has to be a source of the money to be spent. We all support the "polluter pays" principle but when the polluters are asked to pay, they are not willing to do so. What should be done? I find it very strange that Members have not focused on this point today. If we speak in a high-sounding manner and advocate principles in this Council, Members will give their support. What is so good about Miss LOH's proposal? I certainly support increased punishment as punishment has to be deterring. Members say that the situation is poor but it is probably not too poor, that is why some Members can still say: "Right but it is not possible ...... All the responsibilities should be borne by the polluters and they should pay". Where does their money come from? I hope that Honourable colleagues will ask Mr Edward HO to elaborate on the source of the money. I agree to Dr LEONG Che-hung's remark that this Council should convey a message to the Government that we are bold enough to bear the responsibility and tell the public that money has to be spent when needed. I hope electors will excuse me and vote for me again in the next election. Nevertheless, I have to say that this must be done and if we do so together, let us wait and see whom among us will be returned by the next election. Perhaps Members will say, "Emily LAU, you are a fool, let you tell the public about this. They will not vote for you next time". All right, let me be the fool. Madam President, I so submit.

MR MARTIN LEE (in Cantonese): Madam President, I have waited until Miss Christine LOH comes back before I raise my hand to indicate my wish to speak for I support her. We all know that it is pressing to improve our air quality. According to the Democratic Party, the more measures the Government adopts the better, and the more quickly they are implemented the better. Therefore, there is no reason why I should not support the amendment of Miss Christine LOH. Mr Edward HO has moved a motion on improving air quality while the amendment of Miss LOH improves the quality of the motion of Mr Edward HO on improving air quality. (Laughter) Therefore, there is no reason why I should not give my support.

Today, I have heard many different views. For instance, Prof NG Ching-fai has said that the Government would rather kill the wrong person than let the culprit go in providing for compulsory emission tests for all vehicles. These are actually tests only and it does not mean that vehicles will certainly be not up to standard. Punishment should be given if a vehicle is really smoky and the Government is not killing the wrong person. Penalty is not needed if a vehicle is not smoky at all. Are tests not acceptable? Although money has to be paid for vehicle inspection, it is worth the while as drivers cannot see their vehicles emitting smokes when they are driving. Is a test such a big deal? If it is really found that the vehicles are smoky, maintenance should immediately be carried out. This actually falls in line with the original motion of Mr Edward HO as "enhancing vehicle maintenance standards" is stated in his motion. How can such standards be enhanced without inspection? Therefore, I do not think that there is any problem. The Government is not killing the wrong persons so as not to let the culprits go, but it is not killing the wrong persons or letting the culprits go.

Mr James TIEN does not agree to a substantial increase in fines. We should not forget that there are minimum and maximum penalties according to the law. If we make reference to the common law cases, we will know clearly that the maximum penalty will only be given in the worst case we can imagine. Take the bus company that has just closed down as an example. Assuming that the buses of this company emit smoke everyday and it disregards advice and it does not make improvements even though it has been prosecuted. Under this circumstance, it is not too much to impose upon it the maximum fine of $10,000. The maximum fine will only be imposed under the worst circumstances we can imagine. Members should not be worried.

I am very interested in the Government's views in this regard. The Secretary for Planning, Environment and Lands is here today, and he is one of the officials working for environmental protection. We are actually assisting them in their work and we hope that they will strongly support the motion and the amendment, otherwise, we will be very disappointed. In fact, they should co-operate with the police. I have heard some radio programmes in which people complained about the drivers of nanny vans carrying children to and from schools. Among these drivers, those who are alert about environmental protection will turn off the engines while waiting but those who are not alert will leave the engines on so as to enjoy conditioned air. However, the police only issue Fixed Penalty Tickets to those who have turned off the engines while they direct drivers who have not turned off the engines to drive away. Therefore, I hope that the officials concerned will establish closer links with the Hong Kong Police Force and that policemen will not issue Fixed Penalty Tickets this way, otherwise, all of us will become victims of vehicle exhaust.

I hope that my Honourable friends of the Liberal Party will take it easy. If the motion is amended, the motion is after all proposed by Mr Edward HO and they can still win applause and be happy. I just hope that there will be a happy ending. Thank you, Madam President.

PRESIDENT (in Cantonese): Does any other Member wish to speak?

(No Member indicated a wish to speak)

PRESIDENT (in Cantonese): Mr Edward HO, you may now speak on Miss Christine LOH's amendment. You have up to five minutes to speak.

MR EDWARD HO (in Cantonese): Madam President, I think I do not need to use up the five minutes. I am always appreciative of Miss Christine LOH's concern about environmental protection but it is a great pity that her speech today gives me an impression that she is the only one concerned about environmental protection. Just now, she turned and pointed at the Liberal Party just like a teacher teaching her students. (Laughter) Actually, environmental protection ideas are not patented and people or bodies do not have patents to them. Yet, everyone in Hong Kong is concerned about environmental protection. Dr LEONG Che-hung has just said that the air we breathe may affect our health and this is the concern of everyone. If we are not concerned about environmental protection, we will not have this motion debate today. I am very glad that many Members support the mainstream ideas of the motion.

Miss Christine LOH is mistaken about a point or two. Firstly, we oppose her amendment but not all of its contents. She has just said that I oppose the suggestion in her amendment about vehicle maintenance, but I am actually not opposing this point. I do not oppose the suggestion in her amendment about energy saving but only the part about vehicle inspection. I think she may be mistaken.

Secondly, in respect of vehicle inspection, she has said that now that vehicles have to be inspected every year, they should also be inspected for emissions incidentally. She may be mistaken again. At present, vehicles other than diesel vehicles basically do not need to undergo annual inspection but only an inspection from the seventh year onwards. The inspection is not on emissions but on mechanical parts related to the braking systems. Certainly, I will not oppose inspection on old vehicles but the topic we are now discussing about is that a new vehicle should be issued a license by the Government after being given a factory certificate that there is no problem with the vehicle. I do not need to drag on as Mrs Selina CHOW has just said very clearly that there are 100 000 vehicles in Hong Kong, do we have to inspect each and every one of them?

When Mr LAW Chi-kwong mentioned this point in his speech, he said that the Government may have to carry out a study or consultation. But he supported the spirit of Miss LOH's amendment. I would like to ask the leader of the Democratic Party, Mr Martin LEE, a question: Are we going to vote on the wordings or spirit of the motion or amendment? They say that the public should be consulted but Mr Martin LEE has put it bluntly that he supports the motion; no consultation is needed. I wonder if the Democratic Party really wishes to consult the public. Madam President, I suppose you may later allow them to leave the Chamber for five minutes to think this over (laughter) ─Mr Martin LEE shakes his head to indicate that this is not necessary — I think all of us should ponder over this.

As for vehicle inspection, Miss Christine LOH has said that Members including herself do not oppose phased vehicle inspection but it is not stated in her amendment that vehicle inspection can be carried out phase by phase and it is only stated that all vehicles should be inspected. We have actually pondered over this very carefully and we would like to express our opposition. We know that we should unite as one and speak for environmental protection but it is a great pity that we ultimately cannot support her amendment.

Thank you, Madam President.

SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS (in Cantonese): Madam President, I thank Mr Edward HO and Miss Christine LOH very much for moving the motion and the amendment respectively to give me the opportunity to explain to Members the comprehensive plan that the Government is working on to secure clean air for Hong Kong. But first I believe that it will be helpful to his Council and to the community if I spend a few minutes setting out the state of air pollution in Hong Kong, the progress being made and the problems we have to tackle in dealing with this problem.

Air pollution is complex. Our daily air pollution index is a shorthand way of reporting pollution that comes from various substances. These are total suspended particulates (RSP) — basically dust of many different types; respirable suspended particulates — small particles, again of many different types, that can be taken into the lungs; sulphur dioxide, nitrogen dioxide, carbon monoxide and ozone. For each of these substances and for certain other elements that may affect health, such as lead, statutory air quality objectives have been set. These objectives are based on the best available evidence of risks to human health.

The pollutants have many different sources. In terms of the volume of emissions, power stations contribute about 70% of sulphur dioxide, 45% of nitrogen dioxide and 34% of the particulates emitted from combustion sources. Vehicles emit 7% of sulphur dioxide, 45% of nitrogen dioxide and about 50% of the particulates from combustion. Other major emission sources are the many industrial and commercial activities, construction activities and vessels. However, in terms of air pollution in the urban areas, motor vehicles, particularly diesel vehicles, are the dominant source. Indeed, half of the RSP in the urban areas come from diesel vehicles.

Different concentrations of these pollutants will cause different effects. Particulates cause haze. When oxides of nitrogen combine with other hydrocarbons under sunlight, ozone and photochemical smog can be formed. This is the "orange salted egg yolk" as described by many Members, including Mr Michael HO.

Local wind and atmospheric conditions also have profound effects on the build up of pollutants and their effects. As a general observation, during the summer months, when the prevailing winds are coming from the southeast, off the sea, our air tends to be relatively clean as our pollutants are carried into the Mainland. During the winter months when the prevailing winds are reversed, however, we have pollutants emitted in the Mainland added to our own.

That is the technical background. How are we performing against the air quality objectives?

In 1989, when we published the White Paper on pollution in Hong Kong and our strategy in combatting it, we were failing to meet all air quality objectives for total suspended particulates, RSP and sulphur dioxide. We also failed to meet the objective for incidents of short-term maximum exposure for nitrogen dioxide although we were meeting the objective for average exposure over a year. Objectives for ozone, carbon monoxide and for lead were met.

Last year we met the objectives for incidents of short-term exposure to total suspended particulates and RSP. While the objective for annual average exposure for both these pollutants is still not being met, as a result of tightening up of vehicle fuel and emission standards in recent years, we are beginning to see an improving trend. With the replacement of diesel taxis with liquefied petroleum gas (LPG) powered taxis, we should see more significant improvements in the coming years. Last year we met all objectives for carbon monoxide, ozone and lead. Sulphur dioxide levels are now well below all objective levels and continue to decline as tighter standards for vehicle fuels and vehicle emission performance take effect.

So much for the good news. Before Members criticize the Government for being complacent, however, the bad news is that, although Hong Kong has put in place much the same package of emission controls as Europe and the United States over the last decade, we have not seen the gains that have been made in many European and American cities. One major factor has been off-setting almost all the improvements we have made through better control of industrial and power station emissions, reduction of dust from roads and construction, and improvement of fuel standards and vehicle emission standards. It has offset almost all efforts we have made. That factor is the massive increase in the number of vehicles on the roads. Overall, this has grown from 323 000 in 1989 to 512 000 today. Although individual vehicles are becoming cleaner, the overall volume of emissions from vehicles is becoming larger which increases the pollution that we all experience at street level. As pointed out by some Members, continuing poor levels of vehicle maintenance and the illegal use of substandard fuels also make the problem worse than it need be. Moreover, the type of emissions coming from our vehicles reacts with the type of emissions that are coming into Hong Kong from outside to increase the smog effects that we all see in the winter months. In 1991, visibility fell below 8 km for less than 5% of the time. Last year visibility fell below 8 km 10% of the time.

Clearly, tackling the problem of vehicle emissions is the priority area for action, but I do want to make it absolutely clear that we fully share the view of Mr Edward Ho and Miss Christine LOH, which is also the view of Mr Albert HO and many other Members who have spoken in this debate, that this is just the priority area, not the only area to work on. As Members have said, the measures to tackle air pollution must be comprehensive if they are to achieve the community's aspirations for clean air.

Let me now amplify on the measures that were set out in the Chief Executive's policy address and in the policy booklets issued by my Bureau and by my colleague, the Secretary for Transport, and on the existing programmes that will be sustained in the coming years, all of which together will help to improve Hong Kong's air.

Just now, Mr HUI Cheung-ching, Dr TANG Siu-tong and Mrs Miriam LAU have put forward various proposals to expedite the implementation of the LPG taxi scheme, including economic incentives. We will thoroughly consider these proposals, including the economic incentives, and the public's views that we are collecting until the public consultation period ends by the end of this year.

Let me stress that while much attention has been given to the proposals to convert the entire taxi fleet from diesel fuel to LPG, our interest and actions cover the entire vehicle fleet. Apart from the planned introduction of LPG for taxis, we are taking other actions covering the vehicle fleet in four major areas:

First, further improvement to vehicle fuel and emission standards:

- we will ban completely the use of leaded petrol in early 1999.

- the Euro II emission standards and diesel fuel with even lower sulphur content which were introduced last year have been extended across the vehicle fleet during this year and will bring continuing reductions in diesel particulate matter, nitrogen dioxide and hydrocarbon emissions. These standards are among the most stringent practical diesel emission standards in the world.

- now that the European Union, Japan and the United States have introduced emission standards for new motorcycles and compliant vehicles are available on the local market, we will implement the same standards here within 1999.

Second, to back up these standards we will undertake much more stringent inspection of vehicles and enforcement both against smoky vehicles and against the illegal supply of diesel fuel that does not comply with our low sulphur requirements. The measures include:

- more stringent annual inspections and emission tests were introduced in November last year. Mr Albert HO has actually answered the questions raised by Mrs Selina CHOW for me just now. We are introducing chassis dynamometers, which will make the inspections more rigorous and effective. Those for light vehicles have already passed the tests successfully and will be in place within a few months. Tests on systems for heavy vehicles are being conducted at the moment and suitable equipment will be introduced as soon as possible. We will refuse to renew licences of vehicles that fail emission tests during annual inspections and revoke licences of vehicles that fail spot checks.

- still on law enforcement, we are issuing the police with new types of portable smoke meters, to make it easier for them to prosecute smoky vehicles through fixed penalty tickets issued on the street. Enabling legislation to allow them to use this equipment will be laid before this Council shortly.

- we have taken note of the calls from Miss Christine LOH, Mr LAW Chi-kwong, Mr Martin LEE and other Members for an increase in the fixed penalty fines for smoky vehicles, to $1,000, $10,000 and $100,000. Proposed legislation for this will be put to this Council as early as possible in 1999 .

- the Customs and Excise Department will be vigorously investigating and prosecuting the distribution and use of illegal diesel fuel.

Third, in response to the views of Mr CHAN Wing-chan and Mrs Miriam LAU regarding the poor levels of the present vehicle maintenance, the Environmental Protection Department and Transport Department will step up their programmes to educate vehicle owners and mechanics to exercise their responsibility to maintain vehicles properly. I would like to thank the Motor Traders Association of Hong Kong, taxi and minibus trade associations and other groups who are working with us to help in this important education process.

Fourth, to answer Prof NG Ching-fai, we are working on introduction of further new cleaner fuels and technologies. We welcome the work being done by the Polytechnic University, with support from the taxi trade, to develop exhaust filters that may help reduce pollution from the existing taxi fleet. As regards Miss Cyd HO's suggestion of converting the minibus fleet from using diesel fuel to LPG, we will be working with the minibus trade to carry out trials with cleaner fuels for the fleet in 1999 and we are studying very closely proposals for other new fuels. It is important to register a word of caution, however. LPG will make an important contribution in reducing RSP now emitted by the taxi fleet, but given the actual circumstances of Hong Kong, the feasibility of replacing the fuels of the buses and other heavy vehicles with LPG still awaits our study. For the time being, given the various practical factors, we do not feel that this is a practical option. Besides, there would be no point in substituting LPG for petrol in the private vehicle fleet, since petrol vehicles are not responsible for any significant proportion of the problem with particulates. Furthermore, despite the advantages of LPG over diesel now used by the taxi fleet, in the wider perspective of Hong Kong's long-term air quality, it is still a source of pollutants, just as petrol or other newer fuels like the so-called "city diesel" or "bio-diesel" suggested by Mr Edward HO and Mr Albert HO. Therefore, I agree with Prof NG Ching-fai that for the sake of our environment in the longer term, we need to look into fundamentally different types of engine and power sources for road transport.

Having spoken at length about vehicles, now let me turn to the Government's other areas of action on air pollution. Let me repeat my earlier point that action in every area, both by every government agency, by the private sector as well as each individual is essential to meeting our common hope for better air quality.

Clearly much greater understanding and co-operation with our neighbours in Guangdong is essential to tackling a growing regional problem of air pollution. The joint study on air pollution throughout the Pearl River Delta that is conducted by us and the Guangdong authorities will provide both sides with the means to better identify the sources and conditions that are causing the problem, so that together we can develop more effective measures to reduce it. Let me assure Dr Raymond HO that we are not going to wait for the conclusion of that study before taking any action. Both we here in Hong Kong and our counterparts in the Mainland will press ahead vigorously with our own actions to reduce air pollution. At the meeting held by the Guangdong, Hong Kong and Macau Environmental Protection Liaison Group last week, the Guangdong authorities gave a detailed introduction on the work done by the Guangdong Province and Shenzhen to improve air quality. If Members are interested, I will send out such information to them later on. The study will give us the information both Hong Kong and the mainland authorities need to see what further programmes and planning will be needed to protect air quality across the region as a whole while both sides continue to respond to the demands of their populations for employment, housing and other social and economic needs.

One point has not been mentioned by Members which I consider very important is that much of the air pollution we find coming across our boundary is, without exaggeration, the product of factories that Hong Kong based businesses have built in South China. I have heard some voices from some quarters about the cost of complying with environmental regulations in Hong Kong. This pollution is the evidence that there is no escape from the costs of pollution. The longer we neglect the necessary pollution control measures, the greater those costs will become. I am greatly encouraged by the clear message that is coming from the Hong Kong General Chamber of Commerce and from the Private Sector Committee on the Environment about the need for the industry to improve its environmental performance. I also very much welcome the steps that have been taken by industries operating in Hong Kong. I repeat the pledge that has been made by the Financial Secretary that we will work closely with the industrial sector to help it meet environmental requirements with the minimum of cost and maximum of benefit. And I do very much hope that the good practices that the industrial sector has been adopting here will be taken up by those who operate factories in the Mainland. It is important for the environment there and here. And I very much agree with Mr James TIEN and Mr Michael HO that improvement to the environment and air quality not only matters for the health and productivity of employees but also the sustainability of business and loss of the earth's economy.

Mr Edward HO has suggested to improve air quality, we can start from urban planning, avoiding concentrating the commercial areas in one or two districts. In this regard, the Government has started the study on how to make the best use of the transport interchanges in different districts over the whole territory, such as surrounding areas of railway stations, bus terminuses and Mass Transit Railway stations, to develop them into new commercial centres so as to divert people away from the few traditional commercial districts such as Central, Causeway Bay and Tsim Sha Tsui, and reduce the heavy demand on road traffic in these particular areas and the air pollution thus created as a result of their need to travel to these areas to work. We will continue to look into this area.

I very much endorse the views and suggestions of Mr Howard YOUNG and many other Members on tree planting. The environmental benefits as well as the shade and visual amenity are very substantial. Every year around 1.5 million trees and shrubs are planted around our city and country parks. I am delighted by the tremendous response there has been from the business community in Hong Kong to the campaign by environmental groups and the Agriculture and Fisheries Department to encourage the "Corporate Afforestation Schemes" in recent years. In the coming year, with their support, it is expected that half a million trees will be planted in the country parks alone.

One of the important roles that the Municipal Services Departments and the Municipal Councils have performed is planting and landscaping within our city. At the local level, the District Boards have also been doing much small scale planting work. It will be important during the planned process of reorganization of local administration that we do not lose sight of this. Indeed, I very much hope that the proposed new District Councils may help to focus more attention on this means of improving the quality of our urban environment and our air, and may encourage more local initiatives to be taken toward this work. Landscaping groups within the Planning Department, Territory Development Department, Architectural Services Department, Housing Department and Highways Department stand ready to advise and assist the local bodies, and are reviewing their own practices and objectives so as to help in this area.

Mr LAU Chin-shek urges the Government to expedite the development of railways. The policy address has set out the new directions being pursued by the Transport Bureau, supported by my Bureau and the Planning Department. We are working towards an environmentally-friendly, mass transit based development strategy. The schemes that have been set out over the last few weeks for a 40% increase in our railway network over the next five years are a major step in that direction. This will be followed up with the development of housing and employment opportunities focused around the new rail systems. The second railway development study and third comprehensive transport study which will be completed in the coming year will map out further steps we will take to ensure that this more sustainable approach to the pattern of development in Hong Kong will be continued.

Miss Christine LOH, in her amendment, has drawn attention to the significance for air quality of the way in which we generate and use electricity. We are giving priority to managing the demand for electricity, not just through the demand side management programmes that my colleague the Secretary for Economic Services is negotiating with the power companies, but throughout the community by education programmes and information on energy efficiency, by the work to promote more energy efficient buildings, and by the development of new, environmentally responsible energy sources. In the event that any new generating capacity may be needed, the Administration has already made clear that coal will not be an acceptable power source.

Finally, in response to the views of Mr Bernard CHAN and Mr LEUNG Yiu-chung, we will continue to enforce vigorously all measures to reduce dust from roads, construction activities and other sources that add to the overall air quality problems.

I would again like to thank this Council for holding this debate and for the ideas and support for the action to improve air quality that have come from so many Members. The motion has helped to make clear the importance of action not just with particular parts of the vehicle fleet, but comprehensively with transport, energy, planning, industry, construction, afforestation and co-operation with our neighbours in order to achieve and sustain improvements in our air. I trust that I have made clear the Administration's commitment to follow through such a comprehensive programme, both through extensive new measures in the short term and in our planning for the future.

I would also like to thank all those in the community who are working with us to achieve this goal of cleaner air. In particular, I would like to thank the taxi associations, oil companies and the Motor Traders Association who are working with us on the LPG taxi scheme. It is a complex business to introduce and manage the conversion to an entirely new type of fuel. The current economic downturn makes the assessment of the scheme all the more difficult for each party that is involved. It is very much to the credit of all these groups that, despite the difficulties, they want to make the scheme work, want to help improve the environment of Hong Kong. Their persistence is highly commended by the Administration.

Madam President, in closing I would like to quote the remarks by Mr Edward STOKES of the Hong Kong Conservation Photography Foundation as reported in an article on air pollution in the Sunday Post of 22 November. I quote, "There's not going to be an improvement in environmental conditions here, certainly in air quality, until the public is behind the Government." I believe that this is the same distinctive message that Miss Emily LAU has just given us. Madam President, the Government sees the improvement in air quality, improvement in environmental performance, as crucial for our city and a centre-piece for action by the Administration, no matter it is for the sake of our economy, tourism or manufacturing industry, or even for our own health and for reducing our medical expenditure. Therefore, I regard this work as the Government's focus projects. I trust that we can count on the encouragement and the support of this Council for the measures we will need to take on legislation, enforcement, education and publicity campaigns in the months and years ahead.

Thank you, Madam President.

PRESIDENT (in Cantonese): I now put the question to you and that is: That the amendment moved by Miss Christine LOH be made to Mr Edward HO's motion.

Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(Members raised their hands)

Miss Christine LOH rose to claim a division.

PRESIDENT (in Cantonese): Miss Christine LOH has claimed a division. The division bell will ring for three minutes.

PRESIDENT (in Cantonese): Will Members please register their presence by pressing the button and then proceed to vote?

PRESIDENT (in Cantonese): Before I declare that voting shall stop, Members may wish to check their votes. If there are no queries, voting shall now stop.

PRESIDENT (in Cantonese): The result will now be displayed.

Functional Constituencies:

Mr Michael HO, Miss Margaret NG, Mr CHEUNG Man-kwong, Mr SIN Chung-kai and Mr LAW Chi-kwong voted for the amendment.

Mr Kenneth TING, Mr James TIEN, Mr Edward HO, Dr Raymond HO, Mr Eric LI, Mr LEE Kai-ming, Dr LUI Ming-wah, Mrs Selina CHOW, Mr CHAN Kwok-keung, Mr Bernard CHAN, Mr CHAN Wing-chan, Dr LEONG Che-hung, Mrs Sophie LEUNG, Mr Howard YOUNG, Mr LAU Wong-fat and Mrs Miriam LAU voted against the amendment.

Mr Ambrose CHEUNG, Mr HUI Cheung-ching, Mr Timothy FOK, Mr FUNG Chi-kin and Dr TANG Siu-tong abstained.

Geographical Constituencies and Election Committee:

Miss Cyd HO, Mr Albert HO, Mr LEE Wing-tat, Mr LEE Cheuk-yan, Mr Martin LEE, Mr Fred LI, Mr James TO, Miss Christine LOH, Dr YEUNG Sum, Mr LAU Chin-shek, Miss Emily LAU, Mr Andrew CHENG and Mr SZETO Wah voted for the amendment.

Miss CHAN Yuen-han, Mr LEUNG Yiu-chung, Mr Gary CHENG, Mr Jasper TSANG, Mr LAU Kong-wah, Mr TAM Yiu-chung, Mr HO Sai-chu, Mr NG Leung-sing, Prof NG Ching-fai, Mr MA Fung-kwok, Mr CHAN Kam-lam and Mr YEUNG Yiu-chung voted against the amendment.

Mr Ambrose LAU abstained.

THE PRESIDENT, Mrs Rita FAN, did not cast any vote.

THE PRESIDENT announced that among the Members returned by functional constituencies, 26 were present, five were in favour of the amendment, 16 against it and five abstained; while among the Members returned by geographical constituencies through direct elections and by the Election Committee, 27 were present, 13 were in favour of the amendment, 12 against it and one abstained. Since the question was not agreed by a majority of each of the two groups of Members present, she therefore declared that the amendment was negatived.

PRESIDENT (in Cantonese): Mr Edward HO, you may now reply and you have up to three minutes 11 seconds out of your original 15 minutes.

MR EDWARD HO (in Cantonese): Madam President, first, I would like to thank Honourable Members for speaking one after another on this problem of concern to Hong Kong people. Many Members have made some new points. For instance, Dr LEONG Che-hung has made a point about the indoor environment and Mr LEUNG Yiu-chung has talked about dust at construction sites. I hope that the Government will take account of these new points. I appreciate that the public officer has given such a detailed answer covering the questions raised by many Members. However, I hope that the answer has not been drafted in advance and that it will not be the Government's empty talk. I hope that the Government will follow up the new suggestions made today. When Mr LAU, the Deputy Director, mentioned fuels just now, it seems to me that he only heard me say turbo-diesel but I have actually talked about other new fuels. He will know this when he read my speech in future. In any case, I hope that the Government has taken the new points we made today.

I would like to respond to a couple of other points. Firstly, my old friend, Miss Emily LAU finds it inappropriate for Mr LEUNG Yiu-chung to agree to certain of my suggestions as they involve expenses and other conditions. In fact, we also know that money has to be spent in order to improve our environment and it is not possible for us to evade spending. Actually, not much expense is involved and greater economic losses will be incurred if money is not spent now. Dr LEONG Che-hung and Mr Michael HO have touched upon the medical problems while Mr James TIEN has discussed about the losses in the industrial and commercial aspects. Therefore, the Government should make these expenses. In this regard, I hope that the Planning, Environment and Lands Bureau will hold discussions with the Financial Secretary as the money should be spent. I agree to the remarks of Mr LEUNG Yiu-chung that there have to be incentives and we cannot just talk about punishment. This is precisely the case. It will be unfair if we only condemn the wrong doers. I would also like to respond to Mr Martin LEE's remarks that we do not wish to win applause; we just emphasize principles.

Lastly, as time is running out, I only want to make two points. Firstly, improvements should be made to the Legislative Council Secretariat's van, LC3, to avoid polluting our environment. Secondly, there are four slips of paper reminding me that I can speak for three minutes 11 seconds, we probably need to save on this ......

PRESIDENT (in Cantonese): You have exceeded the time limit for speaking. (Laughter)

PRESIDENT (in Cantonese): I now put the question to you and that is: That the motion moved by Mr Edward HO, as set out on the Agenda, be passed.

Will those in favour please raise their hands?

(Members raised their hands)

PRESIDENT (in Cantonese): Those against please raise their hands.

(No hands raised)

PRESIDENT (in Cantonese): I think the question is agreed by a majority respectively of each of the two groups of Members, that is, those returned by functional constituencies and those returned by geographical constituencies through direct elections and by the Election Committee, who are present. I declare the motion passed.

NEXT MEETING

PRESIDENT (in Cantonese): I now adjourn the Council until 2.30 pm on Wednesday, 2 December 1998.

Adjourned accordingly at sixteen minutes past Nine o'clock.