Clerk in Attendance:

Ms Doris CHAN

Chief Assistant Secretary (2)4

The minutes of the meeting held on 14 December 1998 were confirmed.

II. Meeting with representatives from the Provisional Urban Council (PUC) and the Provisional Regional Council (ProRC)
(LC Paper No. CB(2)1235/98-99(01))

2. The Chairman welcomed Ms Jennifer CHOW Kit-bing of the PUC, Mr KAN Chung-nin and Mr Wellington CHENG of the ProRC to the meeting.

The "One Council-One Department" Proposal

3. At the invitation of the Chairman, Ms Jennifer CHOW Kit-bing introduced the "One Council-One Department" proposal (the proposal) put forward jointly by the PUC and the ProRC. The salient points in the proposal were as follows -

1. Management of food safety would be centralised at the government level. The Department of Health (DH) and the Agriculture and Fisheries Department (AFD) would continue their work in respect of food safety but would no longer be responsible to the proposed merged Municipal Council (Council). The merged Council would continue to be responsible for street cleansing, refuse collection, management of markets and street traders and licensing; as well as venues, facilities, and funding of culture, entertainment, recreation and sports activities.

2. The merged Council would be an elected Council with 60 members, supported by an independent Secretariat, and functioning through its six Select Committees on licensing, finance and administration, works, public health, culture and recreation. Five district committees and venue management committees, to be responsible to relevant select committees, would also be set up.

3. Professionals and experts would be appointed as advisers to the six Select Committees and, with a view to enhancing participation and provision of ideas by them, would have voting rights. Management Committees comprising Council members, District Board (DB) members, Heung Yee Kuk representatives and other representatives of the community and related trade would be delegated the authority to manage major cultural and recreational venues.

4. The District Committees would involve the DBs in the process of policy and decision making, and also in management matters.

5. The merged Municipal Services Department (Department), to be headed by a Director of Municipal Services, would be composed of the Administration Division, the Public Health Division, and the Culture and Recreation Division. Three deputy directors would be in charge of the divisions and supported by 12 assistant directors.

6. A Crisis Management Team to be headed by the Chairman of the proposed merged Council would be set up for formulation of apporpriate response in the event of crises involving municipal services.

5. Ms CHOW agreed that after years of operation since 1986, it was high time that the two municipal council system be reviewed. She concluded that the proposal to merge the two MCs and the two municipal services departments aimed at streamlining the structure, and improving efficiency through more effective use of resources. The savings of $0.72 billion to be achieved was as spelt out in paragraph 14 of the proposal.

General Discussion

Level of Support

6. Dr YEUNG Sum enquired about the level of support for the proposal indicated by political parties within the two MCs. He explained that when the bill giving effect to the abolition of the MCs was to be introduced by the Administration, it would need to be passed by the LegCo. The votes of these political parties would therefore matter. He also enquired about the progress of implementation of the one council one department proposal.

7. Mr KAN Chung-nin responded that the proposal was unanimously supported by all members of the two MCs. However, he pointed out that their support did not imply any commitment of the political parties concerned to cast an unanimous vote in the LegCo. He informed members that the two MCs had been heading towards consolidating the proposal. There were regular meetings of the Working Group of the PUC and ProRC to discuss about food and environmental hygiene matters. Joint committee meetings were also held to decide on policy issues. Decisions made at these joint committees were all endorsed by PUC and ProRC for implementation.

8. Mr Ambrose CHEUNG Wing-sum supplemented that in putting forward the proposal, the MCs aimed at rallying support from the LegCo and the public, and also communicating with the government, including the Chief Executive, the Executive Council and the Government Secretariat. He said that the public was being consulted on the proposal and the outcome of the consultation would be submitted to LegCo Members in due course. Ms Jennifer CHOW remarked that although the Administration had decided to abolish the MCs, the MCs hoped to make a final effort to influence that decision before the abolition of the two MCs was debated in the LegCo. She further confirmed that the DBs had also been consulted on the proposal and the preliminary response was encouraging. The gist of views expressed by representatives of the DBs was that retaining the third layer of representative government would be desirable on the condition that its structure would be streamlined and savings achieved.

Sturcture streamlined and savings achieved

9. Ms CHAN Yuen-han asked how the savings figure of $0.72 billion was arrived at, as there was a marked difference when such was compared to the figure of $0.108 billion estimated by the Administration. In response, Ms Jennifer CHOW said that the savings of $0.72 billion per annum would be achieved by merging the two councils, the two departments and the secretariats, which would result in reduction in the number of select committees, posts of deputy directors and assistant directors, and also the number of MC Members. Savings would also be achieved by re-deployment of personnel from the Legal Affairs Office and Publicity and Information Unit to the merged Secretariat, and the discontinuation of the 16% service charges levied on the Councils by the Architectural Services Department (ASD) and the Electrical and Mechanical Services Department (EMSD). Ms CHOW stressed that the reduction in number of staff would be achieved through re-deployment and natural wastage; and added that further savings would be possible by streamlining procedures and contracting out services.

10. Mr LEE Wing-tat referred to the Administration's comments on the one council one department proposal put forward by the Democratic Party previously that the great number of staff needed was not desirable. He asked how the MCs would explain the need for some 20,000 staff in the merged department. Ms Jennifer CHOW responded that further reduction in the number of staff was to be achieved by stages, depending on further streamlining and contracting out of services. She remarked that the 18,000 staff of the new bureau proposed by the Administration, though smaller in number, did not cover those required for delivery of services regarding arts and culture and sports and recreation.

Management of food safety and environmental hygiene

11. In response to Dr LEONG Che-hung's query on why the MCs were so ready to return the power and duties of management of food safety to the Government, Mr KAN Chung-nin said that in fact, the DH was currently undertaking work related to food safety as the two MCs were assisted by an Assistant Director seconded from the DH in that respect. With a view to defining clearly the power and responsibilities of the DH and the merged Council, the latter agreed that the Government might be in a better position to coordinate among government departments in the management of food-safety related matters. The merged Council would then take up work related to public health (including street cleansing, refuse collection, management of markets and street traders and licensing) in order to coordinate with the Government in terms of, and especially in the event of outbreak of food-related diseases and infectious diseases.

12. The Chairman asked whether relevant government departments had been contacted with regard to the above proposed arrangements, and if in the affirmative, at what time and what was the current situation. On the Assistant Director post seconded from the DH as mentioned in paragraph 9 above, he asked what was the difference between the current and the proposed arrangement.

13. Mr KAN Chung-nin responded that the proposal was forwarded to the Administration at the end of January 1999, and simultaneously all Members of the LegCo were also provided with a copy. However there was not yet any direct conversation between the Administration and the MCs in that regard. He said that as the Administration had not consulted them on the abolition of the MCs, members of the MCs were of the understanding that there would be little ground for discussion on the issue. Referring to the assistant director post seconded from the DH, Mr KAN said that the salary pertaining to the post would be supported by the merged Council in the proposed new arrangement. As the Public Health Branch of the merged department would have officers from concerned government departments to support its task of environmental hygiene and central licensing, the assistant director post seconded from the DH would be responsible for, among other things, testing of food samples, and acting as a "medical adviser" in the Branch's functions of promotion of health education and inspection of food establishments.

14. Dr LEONG Che-hung related the support of the medical profession for food safety matters to be centralised under one single department in order that attention could be paid to matters all along the food production chain, from farms and manufacturers to the retail outlet. He noted that in agreeing to the centralisation of food safety management, members of the MCs would still like to maintain a Public Health Branch in the merged department. He asked whether there would be duplication of responsibilities in such arrangements.

15. In response, Ms Jennifer CHOW said that the proposal aimed at defining clearly the delineation of powers and responsibilities of the DH and the merged Council; and the proposed Public Health Select Committee under the merged Council was indeed responsible for the work which the MCs had currently been undertaking. Mr KAN Chung-nin supplemented that the need for retaining a Public Health Branch within the merged department was that some public health input was required for licensing of restaurants and karaokes so that its operation could be monitored.

Performance of the Municipal Councils

16. Ms Emily LAU said that public opinion was concerned over the performance of some of the municipal councillors and that the MCs' performance in monitoring government departments was not satisfactory. She asked the representatives to explain what efforts had been made to address the concern raised.

17. In response, Mr KAN Chung-nin said that members of the MCs had been aware of the concern of the public. He quoted the example of duty visits concerning which there was criticism from the community that municipal councillors had been using public money for unnecessary duty visits. He said that there was not any duty visit in the year 1997 with a view to addressing the public concern. Duty visits thereafter were launched only by the Directors or their Deputy Directors who would then report to their respective MCs. Mr KAN admitted that there might be problems in the existing vetting procedures and said that such problems were being addressed in the proposed new arrangement. The merged Council would be ready to give up its financial autonomy and would instead seek approval from the LegCo for its budget as well as proposed capital works projects valued at $15M or more. The rate of honoraria and allowances for municipal councillors would also be vetted by the LegCo in the proposed arrangement. On this point, Ms Emily LAU commented that the MCs should be responsible for monitoring the municipal services department. In becoming the approval authority for the merged Council's budget and capital works projects, the LegCo should not be expected to take up such responsibilities. Mr KAN Chung-nin clarified that in future, members of the merged Council in charge of various policy areas would be responsible for monitoring the performance of the officials similar to the arrangements in the LegCo.

18. The Chairman asked whether there was any substantial changes to the vetting procedures for capital works projects since the proposal had been put forward. Mr Wellington CHENG said that municipal councillors had been much more critical in scrutinising capital works projects. He remarked that the public concern to be addressed was in fact the criticisms directed towards individual municipal councillors. It would be unfair to make a decision to abolish the MCs simply because a few municipal councillors had misbehaved. He was of the view that the major concern should be the representative system of government.

District organisations

19. Mr Andrew WONG opined that the whole issue should be considered as a constitutional issue. In his view the current three-tier structure of representative government was not necessary and could be reduced to two, with the second tier (i.e. the future District Councils) given real power. He remarked that none of the two proposals put forward by the Administration and the MCs managed to address the core of the problem. In proposing and agreeing to the centralisation of food safety and environmental hygiene services respectively, the Administration had arrived at the decision to abolish the MCs, while the MCs were ready to give up their real power over district matters in order to maintain a structure with elected councillors. He referred to options (iii) and (iv) in Chapter 6 of the Consultation Document on Review of District Organisations published in June 1998, which read "to merge the two Municipal Councils and all District Boards to form a small number of regional bodies" and to retain the existing structure of two MCs and 18 District Boards but improve the co-ordination between the two MCs so as to enhance consistency of polices and practices". He considered that district councils with real power would be an appropriate structure to address all that had been raised in the proposals of the Administration and the MCs.

20. In response, Ms Jennifer CHOW said that municipal councillors were opposed to the Administration's proposal to abolish the MCs. They were also of the view that the DBs were only enhanced in their advisory role but not given real power. Furthermore, the Administration had not yet come up with any proposed new structure for the functions of arts and culture and sports and recreation. While a review of district organisations which aimed at streamlining the structure and enhancing efficiency was justified, the MCs should be given the chance to achieve those goals. It was based on such rationale that the MCs had put forward the proposal and had been implementing the arrangements proposed therein. Mr KAN Chung-nin opined that there was no need to abolish the MCs in order to streamline the structure. From the political point of view, retaining the MCs would not breach the Basic Law. And according to Article 97 of the Basic Law, district organisations were to be responsible for providing services in such fields as culture, recreation and environmental sanitation. From the functional point of view, the MCs acted as representatives of the people in monitoring relevant government departments in the delivery of municipal services. The community would reserve the right to elect someone whose performance they were satisfied with to monitor the government on their behalf, or not elect someone if otherwise. Mr Wellington CHENG echoed the view and added that if performance of government officials in similar functions were not satisfactory, the chance for them to be sacked was remote. He stressed that the public should have the right to monitor the services financed by public money. He further remarked that the municipal council was the earliest elected body in development of the political system in Hong Kong. The act of abolishing this elected body in the free and democratic society of Hong Kong would be shocking to the rest of the world.

Arts and culture, sports and recreation

21. Dr YEUNG Sum asked whether the sports and cultural sectors had been consulted on the proposal, and if so, what was their response. He said that he was given to understand that the sports sector was keen to manage sports affairs by themselves. In response, Ms Jennifer CHOW said that the sports and cultural sectors had been consulted prior to finalisation of the proposal. Views expressed were that policies regarding arts and culture should be formulated by a district organ with elected elements, but not by the government. The sports sector did raise concern over the current management of venues and facilities. The proposed managment committees for venues and facilities sought to address the concern that had been raised.

22. Ms Cyd HO Sau-lan observed that in relation to arts and culture, the MCs had been placing greater emphasis on development of elitist groups. As regards sports and recreation, while the MCs were keen to promote such activities, they did not provide enough support for sportsmen with potential. She asked whether there would be an adjustment in its policies and how the merged Council would cooperate with the Hong Kong Arts Development Council and the Hong Kong Sports Development Board in future.

23. In response, Mr KAN Chung-nin said that arrangements for venue and facilities bookings would be adjusted with a view to promoting sports and recreation activities (during weekends and peak hours) as well as providing support for elitist training (during non-peak hours). Ms Jennifer CHOW clarified that the MCs had also made effort in popularising cultural activities. The new Council would also continue to provide assistance to cultural groups which were not so well-known through provision of venues and support for individual events, building up the audience mass, providing a balanced programme and promoting cultural activities through schools. She raised in particular that there was concern from the cultural groups which had close relationship with the PUC on their future as the Administration had not yet confirmed a future structure for the functions of arts and culture and sports and recreation. Ms CHOW stressed that the merged Council was conscious of its mission in promoting popular culture, supporting grassroot interests and improving the standard of the audience.

(Representatives of the Administration joined the meeting at this point.)

Response from the Administration

24. The Chairman recapitulated the major points discussed and invited responses from the Secretary for Constitutional Affairs (SCA). SCA said that the Administration had received the proposal of the PUC and ProRC in late January and the initial response would be ready for issuance in a couple of days. In response to the Chairman's question of whether the Administration had already decided on the abolition of the MCs and would not consider any other options, SCA stressed that the review on district organisations had started since the Policy Address in October 1997. The whole process since then, from consultation to formulation of the idea of a new structure had been transparent and fully discussed at meetings of the Constitutional Affairs Panel. The proposed new structure agreed by the Administration had taken into account all the views received throughout the process. He said that it would be unrealistic to revert to step one and start the whole process again at this stage when a final decision had been made.

25. Referring to the amount of savings that the PUC and ProRC had estimated in their proposal, SCA said that the savings from the 16% service charge of the ASD and EMSD was only a question of accounting arrangements and not real savings. He assured that the Administration's proposal would achieve much greater savings in reality. Citing the example that while the merged MC was to be serviced by a merged secretariat, the current secretariats of the two MCs would be totally deleted in the Administration's proposal. He advised that further to the Consultant's recommendations, the Constitutional Affairs Bureau (CAB) was coordinating with other bureaux for a more comprehensive proposal on the future structure for delivery of food safety and environmental hygiene services.

26. Mr LEE Wing-tat asked when the information regarding further savings other than the $28M already identified by the Administration would be ready. He said that the Administration had assured that there would be further streamlining and much greater savings, but had not yet come up with any estimation at the stage. He stressed that this was the third time he had asked the same question and the Administration had only kept saying that details were to be worked out as soon as practicable and had not indicated a particular time. He cautioned that it would be undesirable if the bill giving effect to the abolition of the MCs was introduced but the requested information was still not yet ready. In that connection, Mr LEE referred to the Task Force which would be responsible for setting up the new structure for food safety and environmental hygiene services. He said that the personnel required for establishment of the Task Force would need to be approved by the LegCo, and asked whether the SCA had ever conceived how far it would be possible to successfully obtain the approval if members did not agree to the abolition of the MCs.

29. Ms Cyd HO Sau-lan also referred to the CAB's coordination role and opined that a genuine and comprehensive review on polices concerning arts and culture and sports and recreation should involve also the Economic Services Bureau and public bodies like the Trade Development Council in view of their efforts in this regard to promote tourism. She was of the view that the review was inadequate in concentrating on re-distribution of the current duties and functions of the MCs only, and remarked that the delineation of responsibilities and functions should be considered before the structure was decided.

30. In response, SCA reiterated that relevant powers were still vested with the MCs and any objectives concerning the new structure were only to be identified at this stage. Relevant policies and further development therefrom could be studied and implemented by the new structure. And as at present, CAB was working on the new structure with a view to removing duplication.

31. Mr Andrew WONG opined that in centralising the powers and functions of management of food safety and environmental hygiene for the sake of better coordination, the task of implementation could be vested in district authorities. He also remarked that some powers of the MCs should be transferred to the future District Councils (instead of to government officials) which contained elected elements and were conceivably more efficient in dealing with matters of their respective districts.

III. Meeting with the Administration on the structure and main provisions of the Provision of Municipal Services Bill
(LC Paper No. CB(2)1235/98-99(02))

32. Dr LEONG Che-hung referred to the Administration's paper and asked whether the Administration, in putting forward the preliminary idea of the Provision of Municipal Services Bill, had already confirmed the recommendations on the new structure as proposed in the Consultant's Report. In response, SCA said that the Administration agreed to the recommendations in the Report in principle and direction, but had yet to study the proposals in detail. The paper therefore set out the principles that had been accepted which would be further incorporated into the proposed draft legislation.

34. Ms Emily LAU asked about the future arrangements for the current Urban Council (UC) and Regional Council (RC) seats in the LegCo. SCA responded that it was intended that the Legislative Council (Amendment) Bill 1999 to be introduced would address the point with the stipulation that the UC and RC seats in the LegCo would continue until the end of the first term of the LegCo. And if, for whatever reasons, any one of the two seats was to be vacated, no by-election would be held. Ms LAU queried whom would these two seats represent after the MCs had been abolished by 31 December 1999. SCA said that the point of retaining the UC and RC seats was to maintain a total of 60 seats in the LegCo.

35. Mr Ambrose CHEUNG Wing-sum said that he did not agree to the abolition of the MCs. He remarked that in retaining the UC and RC seats even after the MCs had been abolished, the two members currently in the seats would be representing no one by 1 January 2000 and might therefore wish to step down. He opined that in order to allow adequate time for all parties concerned to consider the various proposed arrangements consequential to the review of district organisations, the Administration might consider extending the terms of the PUC and ProRC up to 30 June 2000, to coincide with the LegCo term.

36. SCA said that Mr CHEUNG's point in paragraph 35 above was noted. He also responded that there would be seven months' time from the introduction of the Provision of Municipal Services Bill in April to the end of 1999. He considered the time for scrutiny of the Bill adequate. In further response to the Chairman's request for clarification as to whether the decision on the abolition of the MCs had been finalised, SCA reiterated that the Chief Executive had stated clearly in his Policy Address in October 1998 that a new policy bureau would be set up by 1 January 2000 to coordinate and direct policy on environmental protection, environmental hygiene, waste management, food safety and nature conservation. The bill giving effect to the new structure and transfer of functions would need to be passed by the LegCo.

37. Mr Martin LEE would like to know whether the Administration had secured enough votes from Members for passage of the bill giving effect to the abolition of the MCs. As members of political parties in the MCs had indicated unanimous support for the "One Council-One Department" proposal put forward by the PUC and ProRC (as advised by representatives of the PUC and ProRC attending the meeting), the efforts in setting up the new structure could be wasted if the relevant bill could not be passed by the LegCo. In claiming support of public opinion and proceeding towards abolition of the MCs, the Administration had indirectly implied that political parties which supported the other proposal were working against public opinion. He cautioned the Administration that Members, being directly elected by the public, were accountable to the public and would only support any policy which was for the benefit of the community as a whole, and would oppose any policy which was not. The Chairman added that the reason for the difference of public opinion quoted by Members of political parties in the LegCo and the Administration was that the former were elected while the latter was not.

38. In response, SCA said that the Administration made proposal in the best interest of the community and would work to convince Members of the merits of the case. He stressed that on the issue of review of district organisations, the Administration had been proceeding according to public opinion collected. He said that the discrepancy of public opinion quoted by the Administration and political parties had been noted and the Administration had been trying its best to take into consideration all the views expressed.

IV Date of next meeting

39. Members agreed that the next meeting would be held on Wednesday, 10 March 1999 at 10:45 am to continue discussions with the Administration.

(Post-meeting note - At the request of the Administration and with the concurrence of the Chairman, the meeting had been re-scheduled to Friday, 12 March 1999 at 10:45 am.

Legislative Council Secretariat
6 March 1999