LC Paper No. CB(1) 427/98-99
(These minutes have been
seen by the Administration)

Ref: CB1/PL/ES/1

Legislative Council
Panel on Economic Services

Minutes of meeting
held on Monday, 28 September 1998, at 10:45 am
in the Chamber of the Legislative Council Building

Members present :

Hon James TIEN Pei-chun, JP (Chairman)
Hon Fred LI Wah-ming (Deputy Chairman)
Hon Kenneth TING Woo-shou, JP
Hon LEE Wing-tat
Hon Eric LI Ka-cheung, JP
Hon MA Fung-kwok
Hon CHEUNG Man-kwong
Hon HUI Cheung-ching
Hon Bernard CHAN
Hon CHAN Kam-lam
Hon SIN Chung-kai
Hon WONG Yung-kan
Hon Mrs Miriam LAU Kin-yee, JP

Member attending :

Hon Mrs Selina CHOW LIANG Shuk-yee, JP

Members absent :

Hon David CHU Yu-lin
Hon Martin LEE Chu-ming, SC, JP
Dr Hon David LI Kwok-po, JP
Hon Ambrose CHEUNG Wing-sum, JP
Hon Christine LOH
Hon CHAN Yuen-han
Dr Hon Philip WONG Yu-hong
Hon Howard YOUNG, JP
Hon LAU Chin-shek, JP
Hon Andrew CHENG Kar-foo

Public officers attending :

Item IV

Mr KWAN Wing-wah
Secretary for Economic Services (Acting)

Mr Eric JOHNSON
Principal Assistant Secretary for Economic Services

Mr C T LEUNG
Regulatory Services Controller
Electrical and Mechanical Services Department (EMSD)

Mr Stephen CHAN
Chief Engineer/Electricity Legislation Division (EMSD)

Item V

Mr KWAN Wing-wah
Secretary for Economic Services (Acting)

Mr Richard YIP
Director of Agriculture and Fisheries (Acting)

Miss Dora FU
Principal Assistant Secretary for Economic Services

Miss Vera SO
Assistant Director of Agriculture and Fisheries/ Administration & Markets

Mr Raymond KO
Senior Market Development Officer
Agriculture and Fisheries Department (AFD)

Mr CHOW Loi
Assistant Director of Urban Services/(Kowloon)
Environmental Health

Mr LEE Wing-fai
Senior Staff Officer, (District Operations) 2
Regional Services Department

Item VI

Mr KWAN Wing-wah
Secretary for Economic Services (Acting)

Mr Richard YIP
Director of Agriculture and Fisheries (Acting)

Miss Dora FU
Principal Assistant Secretary for Economic Services

Mr M K CHEUNG
Assistant Director of Agriculture and Fisheries/Fisheries

Mr Joseph SHAM
Senior Capture Fisheries Officer
AFD

Mr Esmond LEE
Principal Assistant Secretary for Planning,Environment and Lands (Lands)

Dr Robin KENNISH
Senior Consultant
ERM Hong Kong, Ltd

Miss Shelley C CLARKE
Technical Director
ERM Hong Kong, Ltd

Item VII

Mr KWAN Wing-wah
Secretary for Economic Services (Acting)

Mr Richard YIP
Director of Agriculture and Fisheries (Acting)

Mr Esmond LEE
Principal Assistant Secretary for Planning, Environment and Lands (Lands)

Miss Dora FU
Principal Assistant Secretary for Economic Services

Mr M K CHEUNG
Assistant Director of Agriculture and Fisheries (Fisheries)

Mr Joseph SHAM
Senior Capture Fisheries Officer
AFD
Attendance by invitation :

Item IV

Radio Association of Hong Kong

Mr Richard LEE Man-fai
Chairman

Mr C M LO
Vice Chairman

Hong Kong & Kowloon Electrical
Appliances Merchants Association

Mr T L LI
Vice Chairman

Mr P S WONG
Vice Chairman
Clerk in attendance :

Mr Andy LAU,
Chief Assistant Secretary (1)6
Staff in attendance :

Mr Daniel HUI,
Senior Assistant Secretary (1) 5
I Confirmation of minutes and matters arising

(LC Paper No. CB(1)80/98-99 - Minutes of meeting held on 14 July 1998)

(LC Paper No. CB(1)222/98-99 - Minutes of meeting held on 21 July 1998)

The minutes of the meetings held on 14 and 21 July 1998 were confirmed.

II Information papers issued since last meeting

(LC Paper No. CB(1)121/98-99 Artificial Reef Deployment Study

LC Paper No. CB(1)133/98-99 Import and Retail Price of Major Fuels from July 1996 to June 1998

LC Paper No. CB(1)218/98-99 Import and Retail Price of Major Fuels from August 1996 to July 1998

LC Paper No. CB(1)226/98-99 Directory on organization of business in the Economic Services Bureau

LC Paper No. CB(1)228/98-99 Merchant Shipping (Local Vessels Bill))

2 Members noted the information papers issued since last meeting.

III Items for discussion at the next meeting scheduled for 26 October 1998
(LC Paper No. CB(1)229/98-99(01) - List of outstanding items for discussion)

3 Members agreed to discuss the following items at the meeting scheduled for 26 October 1998:

  1. Hong Kong Electric Company Limited (HEC)'s new generating facility at Lamna Island and the review of Scheme of Control Arrangements with China Light and Power Company Limited and HEC; and

  2. Development of the mariculture industry and the overall manpower requirement of the fishing industry.
4 As proposed by the Deputy Chairman, members agreed that a new item "Transitional Arrangements for the Opening of the Sheung Shui Slaughterhouse" be put on the list of outstanding items.

IV Implementation of the Electricity (Amendment) Ordinance 1997 and Electrical Products (Safety) Regulation

Discussion with Deputations
(LegCo Paper No. CB(1)229/98-99(02))

5 Mr Richard LEE Man-fai, Chairman of Radio Association of Hong Kong (RAHK) briefed members on the trade's concern about the impact on local retailers of the implementation of the Electrical Products (Safety) Regulation (EPSR) as set out in the joint written submission of RAHK and the Hong Kong & Kowloon Electrical Appliances Merchants Association (HK & K EAMA).

6 In reply to the question on whether it would be more desirable if all electrical products to be sold in Hong Kong were required to be tested by the Government to ensure their safety before putting on sale in Hong Kong, Mr P S WONG, Vice Chairman of HK & K EAMA advised that in view of the large number of electrical products available in the market, it would create a bottle neck if testing and certification of product safety had to be conducted centrally by the Government. He was also afraid that such an arrangement would delay the introduction of new electrical products to Hong Kong.

7 As regards the selling of locally manufactured electrical products which comformed to major international or national standards such as those in the United States of America (USA) or the United Kingdom (UK), Mr Richard LEE advised that these products could be sold in Hong Kong after obtaining a safety certificate from Recognized Certification Bodies as required under the EPSR.

Discussion with the Administration
(LegCo Paper No. CB(1)260/98-99)

8 The Chief Engineer /Electricity Legislation informed members about the Administration's response to concerns of the trade as set out in the information paper.

9 Mr CHEUNG Man-kwong pointed out that electrical products imported from overseas countries were labelled as meeting the safety requirements in their originating countries. He was concerned about how a local consumer could ascertain whether these imported electrical products were in fact safe. In response, the Regulatory Services Controller / Electrical and Mechanical Services Department (RSC / EMSD) advised that under the EPSR the prescribed electrical products would need to obtain a Certificate of Safety Compliance (CSC) before they were allowed to be put on sale in Hong Kong. The CSC would be an indication to consumers regarding the safety of electrical products. As regards enforcement actions, EMSD had conducted sample tests on safety standards of electrical products being sold in Hong Kong. Since May 1998, EMSD had inspected 600 electrical product supply outlets and issued 50 written warnings to shops found supplying non-compliant products.

10 As regards the trade's request for the Administration to exercise flexibility in enforcing the CSC provisions under the EPSR during the transitional period after these provisions came into effect in November 1998, RSC / EMSD confirmed that the Administration would adopt a flexible approach where possible, but without compromising the safety aspect. He said that warning notices would be issued to those who inadvertently contravened the EPSR before any prosecution action was taken. He believed that the transitional arrangements would address the concerns expressed by the trade whilst ensuring the electrical products being sold in Hong Kong were safe.

11 In response to a member's question, RSC/EMSD advised that the Administration had agreed with the trade that during the one year transitional period, a Declaration of Conformity issued by an importer or agent to cover a range of products with back up certificates from manufacturers would be acceptable. The Administration would continue to discuss with the trade about the problems encountered in implementing the EPSR.

12 Regarding the possibility of centralising the testing and certification of product safety by the Government in order to avoid loopholes of sub-standard certification by non-government organizations, RSC/EMSD replied that a centralised product testing service would require huge manpower resources and equipment to test the vast number of electrical products available in the market and would lead to a bottle-neck problem.

13 Some members opined that accidents involving electrical products might not necessarily due to the design or safety standards of the product concerned but rather the improper use of it by consumers. They enquired about measures taken by the Administration to enhance consumer knowledge in proper use of electrical products. RSC/EMSD agreed that as evidenced in previous investigations, many accidents involving electrical products were due to improper use by consumers. The Secretary for Economic Services (Acting) (SES(Atg)) supplemented that booklets were being prepared by EMSD to guide the public on proper use of electrical products. He stressed that the Administration considered that consumer education was an important area of work to promote safety and the Administration would continue its efforts in this regard.

14 As regards whether findings of investigations on accidents involving electrical products could be disclosed to the public, RSC/EMSD confirmed that the Administration would consider each case on its merit. The findings would be disclosed if it was believed that disclosing such information would be beneficial to the public.

15 Referring to a fire accident investigation in June 1998 which led to a recall of several thousands of electrical fans, SES (Atg) clarified that the products concerned did not have a CSC because they were imported into Hong Kong prior to the relevant provisions of the EPSR came into operation. He believed that with the enforcement of the CSC provisions in November 1998, the safety of electrical products available in the market could be improved.

16 Mrs Selina CHOW LIANG Shuk-yee observed that quite a number of advanced electrical products available in some overseas countries were not available locally and enquired whether this situation was due to restrictions under the EPSR. RSC/EMSD advised that Hong Kong merchants could import any electrical products into Hong Kong for sale if they could satisfy the CSC provisions under the EPSR. In fact, most safety standards of advanced countries like the USA, UK and Canada were also acceptable in Hong Kong. He assured members that the CSC provisions should not be a barrier to the introduction of new products to Hong Kong. Certain products were not imported mainly because of commercial reasons.

V Administration of low-interest loans to operators in the poultry trade
(LC Paper No. CB(1)257/98-99(01))

17 Mrs Selina CHOW said that some poultry wholesalers had complained that their loan applications had been rejected by the Administration because they had not signed a new lease agreement with the Agriculture and Fisheries Department (AFD) for renting poultry stalls in the wholesale poultry markets. She opined that AFD could in fact verify from its previous records as to whether a poultry wholesaler was indeed a renter of a poultry stall in one of these wholesale markets in December 1997. She therefore questioned the rationale for imposing a pre-condition that a poultry wholesaler had to sign a new lease agreement with AFD before approval of a loan application was granted. In this regard, the Assistant Director (Administration and Markets)/AFD (AD(A&M)/AFD) advised that the purpose of the loan scheme was to offer financial assistance to operators in the poultry trade directly affected by the order of the Director of Agriculture and Fisheries in December 1997 to slaughter poultry and to assist them to re-establish their business. In order to prove that an applicant was operating a poultry wholesale business, one of the parameters for the grant of loans as approved by the Finance Committee was that an applicant who was a poultry wholesaler had to be a renter of a poultry stall in the Western Wholesale Food Market or the Cheung Sha Wan Temporary Wholesale Poultry Market. She further supplemented that as only one loan could be approved for one stall, the availability of a lease agreement for a poultry stall would facilitate AFD in identifying the eligible borrower of a loan. In cases where a poultry business was operated under partnership, the partners had to provide a written document stating that they jointly agreed to allowing one of the partners to enter into a loan agreement with the Administration.

18 In reply to a member's question on whether the lease agreement of a poultry stall was so harsh that some poultry wholesalers were unwilling to sign the agreement, AD(A&M)/AFD said that the lease agreement for poultry stalls was a standard agreement similar to the one in use previously and was applicable to all stalls in both the Western Wholesale Food Market and the Cheung Sha Wan Temporary Wholesale Poultry Market. Out of a total of 80 stall renters in Cheung Sha Wan Temporary Wholesale Poultry Market, more than 60 had already signed the new lease agreements. She further advised that only four applicants of the secured loan had not signed the lease agreement. In a discussion meeting with the poultry wholesalers they were informed that should they wish to amend the terms of the lease agreements, they would have to inform the department and AFD would consider the proposals in consultation with the Department of Justice.

19 Supplementing on the reasons for requiring a valid poultry stall lease agreement before approval of loan applications from poultry wholesalers was granted, SES(Atg) advised that the requirement aimed to establish that the applicant was still in the poultry wholesale business and hence the loan could assist him to re-establish his poultry wholesale business. He stressed that the loan scheme to the poultry trade had been administered smoothly and only a few poultry wholesaler had difficulties in agreeing to sign the lease agreement. He believed that AFD could continue discussion with the poultry wholesalers concerned to solve the problems.

20 Referring to paragraph 4 of the information paper provided by the Administration, a member enquired about reasons for the withdrawal of 16 applications for loans by poultry farmers. The Director of Agriculture and Fisheries (Acting) (DAF(Atg)) and AD(A&M)/AFD replied that some poultry farmers had withdrawn their loan applications because they had decided to cease operation on commercial grounds. Some other poultry farmers had to cease poultry farm operation because they failed to obtain a valid farm licence on grounds of poor hygiene conditions or sub-standard facilities in the farms concerned. DAF(Atg) further advised that AFD did provide advice to poultry farmers on how to comply with the requirements for obtaining a farm licence. However, the final decision on whether to continue operation of a poultry farm had to be made by the farmer concerned.

21 In reply to a member's question, AD(A&M)/AFD confirmed that AFD would examine the financial position of a loan applicant to establish his need for financial assistance before a loan application would be approved.

22 Referring to paragraph 6(a) of the information paper which indicated that out of the $56 million of approved loans to poultry wholesalers, only $10 million had been paid out, some members queried the reasons for the delay in releasing the loans. AD(A&M)/AFD replied that unsecured loan applications had all been approved and paid out to poultry wholesalers. There were however 18 applications totalling about $45 million of secured loans which had obtained approval in principle but had not been drawn down due to the need for the applicant to provide to AFD the required security either in the form of a bank guarantee or a property. She expected that all the secured loan applications would be released in October 1998.

23 As requested by the Chairman, the Administration agreed to provide information by the end of October 1998 to update members on the latest position as regards the overall progress of the loan scheme including the processing of the 18 secured loan applications mentioned in paragraph 22 above.

Admin


VI Consultancy study on fisheries resources and fishing operations in Hong Kong Waters
(LC paper No. CB(1)255/98-99)

VII Compensation for fishermen affected by reclamation or development projects
(LC Paper No. CB(1)257/98-99(02))

24 As items VI and VII were both related to the fishing industry, the Chairman suggested and members agreed to discuss these two items together.

25 Mr WONG Yung-kan declared interest as a fisherman. He indicated however that he had not applied for ex-gratia allowances under the relevant scheme.

26 Miss Shelley CLARKE of ERM Hong Kong Ltd. briefed members on the background and major findings and recommendations of the Consultancy Study as set out in the Executive Summary of the Consultancy Study Report.

27 The Principal Assistant Secretary for Planning, Environment and Lands (Lands) (PAS/PEL(L)) introduced the information paper on ex-gratia allowances for fishermen affected by reclamation or development projects and highlighted the following main points :

  1. Fishermen affected by reclamation or development projects might be granted ex-gratia allowances subject to certain eligibility criteria;

  2. The Finance Committee approved in 1993 that ex-gratia allowances should be based on the notional value of three years' catch in the gazetted work area for the proposed projects;

  3. The notional value of the total fish catch in the affected area was derived from data on fishing operations collected by AFD during the 1989 - 1991 Port Survey; and

  4. The Government was aware of some fishermen's concerns that the data collected through the 1989-91 Port Survey was outdated. In this regard, the Consultancy Study discussed in the previous agenda item would provide updated information as the basis for reviewing the existing formula for calculating the ex-gratia allowances. Any proposed revisions to the formula would be put to this Panel before submission to the Finance Committee for approval.
28 On the implementation timetable of the Consultancy Study, SES(Atg) advised that the Administration would conduct a three-month consultation exercise to solicit views of the public, especially the fishing industry, on the major recommendation of the study. The Administration would then formulate a fisheries management strategy in the light of the outcome of the consultation.

29 Referring to the decrease in fishery resources in Hong Kong waters as revealed in the Consultancy Study, Mr CHAN Kam-lam opined that apart from over-fishing, extensive reclamation projects undertaken by the Administration might also be the cause of the problem. He further pointed out that the Administration should consider means to increase fishery resources in Hong Kong waters rather than proposing a licensing system to further restrict the development of the fishing industry. In response, DAF(Atg) advised that AFD would not develop its fishery development policy solely on the basis of the findings of the Consultancy Study. He said that decrease in fishery resources was a world-wide problem and AFD had been taking measures to protect fishery resources including the artifical reef project. Protection of fishery resources was also one of the focus of the Consultancy Study. SES(Atg) supplemented that a licensing system for fishing in Hong Kong waters was a very sensitive subject and would have major consequences to many sectors of Hong Kong's economy. The Administration would consult the fishing industry and other interested parties before finalizing a decision on this subject.

30 As requested by the Chairman, SES(Atg) said that he hoped to be able to report to this Panel on the result of the consultation exercise on the Consultancy Study in four to five months. Admin


31 Referring to paragraph 4 of the information paper (LC Paper No. CB(1) 257/98-99(02)) which indicated that since 1993 the Government had granted about $144 million of ex-gratia allowances to over 6,000 successful applications, some members pointed out that the ex-gratia allowances payable to affected fishermen was unreasonably small as the average payment was only about $24,000. An example was also cited where the ex-gratia payment arising from a recent reclamation project in Tuen Mun was only about $8,000. They queried whether the formula for calculating the ex-gratia allowance could adequately compensate the five years' net income of an affected vessel owner/operator. In reply, the Senior Capture Fisheries Officer/AFD (SCFO/AFD) explained that the calculation of ex-gratia allowances was based on the notional value of three years' fish catch in the gazetted works area. The total amount was then apportioned among eligible vessel owners, taking into account their declared dependance on the affected area and the length and types of the fishing vessels involved. The ex-gratia allowances apportioned to a fishing vessel would therefore depend on how much of its operations was carried out in the affected area. DAF(Atg) supplemented that the AFD would review the formula on calculation of ex-gratia allowances after taking into account updated data in the Consultancy Study.

32 As to whether retrospective adjustment of the ex-gratia allowances would be considered, PAS/PEL(L) advised that it was a general practice that any change in Government policy would not be implemented with restrospective effect.

33 Mr CHEUNG Man-kwong opined that apart from granting ex-gratia allowance to fishermen affected by reclamations and development projects, the Administration should also consider providing other assistance such as low-interest loan to fishermen engaged in off-shore fishing. DAF(Atg) assured members that AFD had various programmes to promote off-shore fishing including the provision of loans to fishermen for building steel hull vessels for off-shore fishing.

34 As requested by the Chairman, the Administration agreed to consult this Panel on any proposed revisions to the existing formula for calculating ex-gratia allowances. Admin


VIII Any other business

35 Members noted that a special meeting had been scheduled for Tuesday, 13 October 1998, at 11:45 am to receive a briefing by the Secretary for Economic Services on the Chief Executive's Policy Address 1998.

36 There being no other business, the meeting ended at 1:00 pm.


Legislative Council Secretariat 4 November 1998