For Information on
14 June 1999


PURPOSE

This paper briefs Members on the support and assistance the Government provides to the Hong Kong film industry to facilitate its development and maintain Hong Kong's position as a film production centre.

BACKGROUND

2. The Government's established policy is to provide a conducive environment for the long-term and healthy development of the film industry. The Chief Executive announced in his 1997 Policy Address the following initiatives to promote and support the development of the film industry:

1. To set up a Film Services Office under the Television and Entertainment Licensing Authority in 1998 to co-ordinate and facilitate the film industry in film production;
   
   
2. To set up a Film Services Advisory Committee in 1998 to provide a conduit for dialogue between the industry and the Government, and to give advice on the work of the Film Services Office; and
   
   
3. To make available a site for film production use in the land sale programme.

The Government also undertook to review the Film Censorship Ordinance with a view to making the regulatory regime as user and business-friendly as possible.

3. In October 1998, the Chief Executive announced in his Policy Address the establishment of a $100-million Film Development Fund in 1999 to enhance the competitiveness of the local film industry. The Fund would provide financial support to the film industry to implement projects which would benefit the overall development of the industry. Taking into account the actual needs of the industry, the Government also undertook to establish a new regulatory system governing the use of pyrotechnic substances for creating special effects in film and television programme productions which can meet the operational needs of the industry.

4. Major initiatives pursued by the Government to promote the development of the Hong Kong film industry are set out in the following paragraphs.

Film Services Office (FSO)

5. The FSO was set up on 1 April 998. Its major functions are:

1. To facilitate film production, in particular location shooting in Hong Kong;
   
   
2. To establish and implement a new regulatory framework governing the use of pyrotechnic substances for creating special effects in film and television programme productions, including a licensing system for special effects operators;
   
   
3. To set up a resource centre with a view to providing information and reference materials relating to film production services in Hong Kong;
   
   
4. To administer the Film Development Fund;
   
   
5. To assist the industry in the organization of film festivals and film exhibitions in Hong Kong;
   
   
6. To assist the industry in the publication of trade promotion materials; and
   
   
7. To help promote the long-term development of the film industry.

6. Since its establishment in April 1998, the FSO has provided the film industry with whole hearted support, especially with regard to film production. Its achievements are summarised in the following paragraphs, and a detailed progress report of the FSO is at Annex I.

1. Facilitating location shooting
   
   Through the mediation by the FSO, 33 government departments and 114 public bodies have agreed to accept applications from the film industry for lease of their premises for location shooting. Following consultation with the Police, certain measures have been introduced to facilitate the industry in location shooting, including the occasional traffic control arrangement. Under the said arrangement, film production teams are allowed to practice occasional traffic control in non-major streets provided that this would not inconvenience the general public. Responding to the needs of the industry, the FSO offers a new service in May 1998 by acting as a mediator between the industry and the organisation concerned in respect of more complicated requests made by the industry on location shooting. Also location scouting service was introduced in September 1998.
   
   
2. Regulation of the use of pyrotechnic substances to create special effects
   
   The FSO has hired one Fire Marshal Consultant and one Pyrotechnics (Special Effects) Consultant from overseas to assist in the establishment of a new regulatory system governing the use of pyrotechnic substances for creating special effects in film and television programme productions, and to run training courses for local special effects operators. The FSO is drafting the legislation for the new regulatory regime and will consult the industry on the proposed regulatory arrangements to ensure that the new legislation can meet the operational needs of the industry and safeguard public safety and security. A bill on the new legislation will be introduced into the Legislative Council by the end of this year. As regards training, the FSO has, since December 1998, organised a series of training courses for local special effects operators. At present, 68 operators have been provisionally registered as Special Effects Assistants and 12 operators as Special Effects Operators (Class II). The training course for Special Effects Operators (Class I) will commence in June.
   
   
3. Setting up a Resource Centre
   
   The resource centre of the FSO houses a full range of information and reference materials relating to film production for the industry's reference. To provide the industry with information on location shooting, the FSO has issued a number of publications such as "Guide to Filming in Hong Kong", "Film and Video Production Directory", "Hong Kong on Location", and "Locations - Venues under the Management of Government Departments and Public Bodies". These publications are also distributed to overseas film organisations to promote Hong Kong's film industry and Hong Kong as an ideal place for location shooting.
   
   
4. Administering the Film Development Fund
   
   The FSO has compiled an information leaflet on the Film Development Fund as well as application form and application guidelines. A series of publicity measures have been launched. Seminars have been conducted to brief the film industry on the scope and operation of the Fund and to encourage them to make best use of the Fund. The FSO is also responsible for the administration of the Fund, including the provision of secretariat service (for details please see paragraphs 11-14 below).
   
   
5. Facilitating the organisation of film festivals and film exhibitions
   
   The FSO assists the Hong Kong Trade Development Council in organising the "Hong Kong International Film & TV Market" (FILMART) annually so as to maintain Hong Kong's position as Asia's film trading centre. This year, FILMART will be held on 23-25 June. The FSO also assists the Information Services Department and the Hong Kong Economic and Trade Offices in organising Hong Kong Film Festivals in various overseas cities. To promote Hong Kong as a film production centre, the FSO and the Hong Kong Tourist Association participated in "Location '99" organised by the Association of Film Commissioners International (AFCI) and held in Los Angeles in February 1999.

Film Services Advisory Committee

7. The Film Services Advisory Committee (FSAC) was set up in May 1998 with the following terms of reference:

1. To act as a focal point for exchange of ideas on all matters relating to the film industry and in furtherance of the Government's objectives of supporting and promoting the development of the film industry, to advise the Secretary for Information Technology and Broadcasting on the following:
   
   
   1. the creation and maintenance of an environment conducive to the long-term and healthy development of the industry;
      
      
   2. the maintenance of Hong Kong as a major film producing centre;
      
      
   3. the enhancement of Hong Kong's position as a film trading and service hub in the Asia-Pacific region;
      
      
   4. the facilitation of film productions in Hong Kong; and
      
      
   5. the promotion of Hong Kong films in overseas markets.
   
   
2. To advise the Secretary for Information Technology and Broadcasting on the work of the FSO and to receive reports from the Commissioner for Television and Entertainment Licensing on all aspects of services rendered by the FSO.
   
   
3. To advise the Secretary for Information Technology and Broadcasting on the need to set up Working Groups to deal with specific issues relating to the film industry.

8. Since its establishment, the FSAC has convened six meetings. Matters discussed include the new regulatory framework governing the use of pyrotechnic substances to create special effects, measures to improve support to the industry on location shooting, control of the use of modified firearms and fees for the issue of the relevant permits, promotion of Hong Kong films overseas, and the Film Development Fund. The Government departments concerned have, in the light of the advice of FSAC members, taken appropriate follow up action.

Amendment of the Film Censorship Ordinance

9. The Government had reviewed the Film Censorship Ordinance in 1998 and submitted to the Legislative Council a number of proposed amendments to the Ordinance in order to streamline its operation and improve the quality of service to the industry. The proposed amendments were approved by the Legislative Council and the proposed measures would be implemented on 17 June 1999. The improvements include the exemption of non-commercial slides of cultural, educational, instructional, promotional and religious nature from censorship, updating of various submission forms, and simplification of the procedure for lodging appeals against the decision of the Film Censorship Authority. In addition, to keep pace with the advance of technology, film distributors will be allowed to deposit with the Film Censorship Authority for record purposes a videotape, laserdisc, video compact disc or digital video disc of a film covered by a certificate of exemption or a certificate of approval.

Designating a site for film production use

10. To promote the long-term development of the Hong Kong film industry and to encourage infrastructural investment in film production, the Government has reserved a site of about 5 hectares in Tseung Kwan O for film studio use. About 3 hectares of the land were awarded to the successful tenderer in August 1998 who would build a state-of-the-art film studio with advanced post-production facilities. The construction of the film studio will strengthen local film production capabilities and pave the way for Hong Kong to become a post-production service centre in Asia.

Film Development Fund

11. To enhance the competitiveness of the film industry and to render further support to its development, the Government has established a $100-million Film Development Fund in 1999 to provide financial support to projects which are conducive to the healthy and long-term development of the industry. The Fund is administered by the FSO. A Film Development Fund Projects Vetting Committee (PVC) has been set up to assess the applications in accordance with the scope of the Fund and its funding criteria (see Annex II).

12. The Film Development Fund is open for application under four phases. Twenty-three applications were received under the first phase. The PVC met on 15 April to consider the applications and decided to provide funding support in the region of over $5 million to four applications (namely, a forum, a training course, publication of film directory and a co-production project). Details of the four approved projects are as follows:

1. The "Forum on the Co-production of Films with the Mainland" organized by the Hong Kong Film Awards Association Limited will provide opportunities for local film companies to exchange views and explore areas of co-operation with Mainland film production companies, thus opening up business opportunities with the Mainland. Approved funds amounted to $285,000.
   
   
2. The "Training Programme for Film Art-work Professionals" organized by the Hong Kong Film Arts Association Limited will enhance the level of competence of local film art-work professionals. Approved funds amounted to $1,046,000.
   
   
3. The film directory published by the Hong Kong, Kowloon and New Territories Motion Picture Industry Association Limited will help promote Hong Kong films both locally and overseas. Approved funds amounted to $325,000.
   
   
4. The "Hong Kong-Asia Film Financing Forum" organized jointly by the Hong Kong Film Directors' Guild, the Hong Kong Arts Centre and the Hong Kong Trade Development Council will tap opportunities of joint investment and co-production between Hong Kong and other places in Asia, and in turn promotes Hong Kong as a centre of film production and financing in Asia. Approved funds amounted to $3,541,400.

13. As regards applications for funding support to conduct researches and surveys, the PVC agreed that there was a need to conduct such researches/surveys. That said, to ensure that such projects would meet the needs of the industry and can optimise the use of limited resources, the PVC recommended that the FSO should first consult the industry on the scope of such researches/surveys, and then submit specific proposals to the FSAC to determine the scope of such researches/surveys. Tender would be issued to invite interested parties to undertake designated research/survey projects and recommend measures to promote the long-term development of the industry. Following consultation with the industry, it was established that a survey should be conducted on film financing. The FSO would submit a proposal for funding support under the Film Development Fund.

14. The second phase of invitation of applications under the Fund closed on 31 May. The FSO has received 20 applications applying for a total of $59 million. The PVC will consider the applications in early July.

CONCLUSION

15. Through the implementation of the above measures, the Government aims to join hands with the film industry to promote the long-term development of the industry .


Information Technology and Broadcasting Bureau
June 1999

LegCo Panel on 14.6.99.doc

Annex I

Measures		Progress
1.	Assisting the film industry in location shooting
	(i) Streamlining the procedures and regulations governing application of location shooting	The FSO has approached over 140 government departments and public bodies to streamline application procedures governing lease of their premises for location shooting. Issues discussed include the need to provide application guidelines and application forms, shorten the processing time to 7 - 10 working days, and provide more sites and facilities for location shooting.
	(ii) Urging the Government Property Agency (GPA) to review the level of charges for lease of government properties for location shooting	The FSO has conveyed to the GPA the film industry's concern that the existing level of charges for location filming (at $12,360 for every 4 hours) is too high and the industry's request for reduction of the fees. GPA has, in response, conducted a review and submitted a fee revision proposal to the Finance Bureau for consideration.
	(iii) Urging the Police to facilitate location shooting by providing appropriate assistance	Following consultation with the Police, an occasional traffic control arrangement has been worked out to facilitate location shooting. The film production teams could notify the Police Public Relations Branch (PPRB) if they wish to exercise occasional traffic control in non-major streets. PPRB would then inform the relevant police division to make appropriate arrangements.
	(iv) Handling more complicated requests for location shooting filed by the film industry	Since May 1998, the FSO has acted as a mediator in facilitating the film industry's requests for location shooting which are of a more complicated nature. Up to May 1999, 63 cases have been processed by the FSO, with an over 90% success rate.
	(v) Providing location scouting service	Starting from September 1998, the FSO provides location scouting advice on premises and facilities of government departments and public bodies to meet the location shooting needs of filmmakers. Up to May 1999, 103 cases have been handled.
2.	Setting up a Resource Centre
	(i) To provide information on the film industry (ii) To issue publications	The Centre has a reading corner, two audio-visual booths, and two computer terminal booths. The Centre houses information on location shooting sites, application procedures for and regulations on location shooting, a directory on film industry organisations, statistics on film industry, film classification system, film production guides issued by overseas film commissions, film-related training programmes organised by local tertiary institutes, as well as information on local/international film festivals, film fairs and conferences. Publications issued by the FSO include: "Guide to Filming in Hong Kong": The Guide provides a checklist on location shooting, including application procedures for location shooting in government properties, regulations governing the use of simulated police uniform, modified firearms and pyrotechnics, major location shooting sites in Hong Kong, and a directory on major film industry organisations. Compilation of the 1999 edition of the Guide has been completed and the target date for the issue is July 1999. "Film and Video Production Directory": The Directory issued in April 1999 provides information on local organisations engaged in film and video production, distribution and promotion, including correspondence details. Copies of the Directory have been distributed to more than 800 local and overseas film organisations. "Hong Kong on Location": The publication issued in April 1999 contains photographs of certain location shooting sites in Hong Kong. It serves to promote Hong Kong as a place for location shooting. Copies of this publication have been distributed to more than 400 Mainland and overseas film organisations. "Locations - Venues under the Management of Government Departments and Public Bodies" : The publication provides information on premises and facilities of more than 130 government departments and public bodies which can be leased for location shooting. It also contains information on application procedures. Compilation of this publication has been completed and the target date for the issue is June 1999.
3.	Assisting the promotion of Hong Kong films in local and overseas markets
	(i) To facilitate the organisation of film exhibitions in Hong Kong (ii) To facilitate the organization of Hong Kong Film Festivals overseas (iii) To promote Hong Kong films in international trade shows	The FSO assists the Hong Kong Trade Development Council in the organization of the Hong Kong International Film & TV Market (FILMART), an annual event, so as to maintain Hong Kong's position as Asia's film trading centre. Some 62 exhibitors and 621 film and entertainment entrepreneurs participated in the FILMART held on 24-26 June 1998. This year's FILMART will be held on 23-25 June 1999. In 1998, the FSO assisted the Information Services Department (ISD) and the overseas Hong Kong Economic and Trade Offices (HKETOs) in the organization of film festivals in six cities, namely London, Washington, Sidney, Melbourne, Rome and Milan. The FSO will assist ISD and the HKETOs concerned in the selection and sourcing of films for the Hong Kong Film Festivals to be held in North America in June and in Australia in November this year. "Locations '99" organized by the Association of Film Commissioners International (AFCI) was held in Los Angeles on 19-21 February 1999. Some 70% of the 200 odd members of the Association participated in the event by setting set up promotion booths there. The FSO and the Hong Kong Tourist Association jointly set up a booth there. More than 300 persons (90% of them were in the film business, namely directors, production managers, producers and script writers) visited the booth to collect information. The FSO also organised a seminar on "Hong Kong - The Location that Works for You" which was attended by 75 persons.
4.	Assisting the film industry in the organization of training programmes	The film industry considered that priority should be given to training in digital technology in film production. The FSO has taken this request forward with the Hong Kong Academy for Performing Arts (HKAPA) who agreed to organise in September 1999 a short-term training course on digital editing technology tailor-made for the needs of the film industry. Through the co-ordination of the FSO, the film industry and HKAPA will jointly organise a conference on digital technology on 25 - 26 June 1999 in the Hong Kong Convention and Exhibition Centre. The conference is funded by the Industry Department's "Services Support Fund".
5.	Establishing a new regulatory system governing the use of pyrotechnics and other dangerous goods in film production
	(i) Drafting of new legislation (ii) Provision of training courses	The new regulatory system comprises a licensing system for special effects operators and a new regulatory framework on the use of pyrotechnic substances in film and television programme productions and theatrical performances. The FSO is drafting the new legislation. The trade will be consulted on the regulatory arrangement to ensure that the new legislation will meet the operational needs of the industry and is able to safeguard public safety and security. The FSO has employed a Fire Marshal Consultant and a Pyrotechnic (Special Effects) Consultant from overseas to train local special effects operators. The training programme is conducted in three stages: Training course for Special Effects Assistant (SEA) : Some 68 trainees have completed the course and passed the assessment. They have been provisionally registered as SEAs. SEAs can serve as assistants to qualified Special Effects Operators but are not allowed to create special effects on their own. Training course for Special Effects Operator, Class II [SEO (Class II)]: Trainees are required to pass the assessment and have ample relevant experience in the creation of special effects. Twelve trainees have completed the course and passed the assessment. They have been provisionally registered as SEOs (Class II). SEOs (Class II) can use specified pyrotechnics and other dangerous goods to create special effects, and supervise the creation of special effects by SEAs. Training course for Special Effects Operator, Class I [SEO (Class I)]:Trainees are required to pass the assessment and have ample relevant experience in the creation of special effects. The 15-day course will commence in June/July 1999. SEOs (Class I) can use specified pyrotechnics and other dangerous goods to create special effects, and supervise the creation of special effects by SEAs and SEOs (Class II).
6.	Setting up a FilmDevelopment Fund	To facilitate the healthy and long-term development of the local film industry, and to enhance its competitiveness, the Finance Committee of the Legislative Council approved on 27 November 1998 the allocation of $100 million to set up the Film Development Fund. A Film Development Fund Projects Vetting Committee (PVC) was set up under the Film Services Advisory Committee in January 1999 to assess and consider applications submitted by the industry and to prescribe funding conditions and the amount of funding support. The FSO provides secretariat service to the PVC. Applications for the Film Development Fund are accepted under four phases. Twenty-three applications were received under the first phase. The PVC met on 15 April to consider the applications and decided to approve four applications, namely, a forum, a training programme, publication of film directory, and a co-production project. Total funds allocated amounted to over $5 million. Phase two closed on 31 May and 20 applications have been received.

Annex II

The Film Development Fund was set up by the Government to provide funding support to projects that can achieve the following goals:

1. to enhance the professional and technological capabilities of the local film industry;
   
   
2. to improve the professional skills of the industry's workforce;
   
   
3. to encourage the production of more creative and diversified films;
   
   
4. to facilitate the industry in the mastering and application of advanced technology so as to enhance the audio and visual effects of films;
   
   
5. to stimulate further improvement in the quality of local film production and services; and
   
   
6. to improve the production and operating environment of the industry.

The Fund will only support projects that can fulfill the above goals.

Funding Criteria

1. An applicant should normally be a locally registered institution/organization engaged in film business or a related body. The Film Services Office can also apply for funding.
   
   
2. Projects under application must be beneficial to the overall development of the local film industry, such as enhancing the competitiveness of the local film industry.
   
   
3. Benefits accrued from the projects must serve the interests of the entire film industry, and not just an individual private company or a consortium of private companies.
   
   
4. Projects should mainly be non-profit making by nature. Special consideration could be given for projects that can ultimately be self-financing.
   
   
5. Funds approved cannot be used to create any civil service posts.
   
   
6. In examining an application, the following must be taken into consideration -
   
   
   1. the benefits that a project may bring to the local film industry;
      
      
   2. the need for such a project;
      
      
   3. the technical and project management capabilities of the applicant institution/organization;
      
      
   4. whether the implementation schedule of the proposed project is well planned and whether the time required for implementation is reasonable;
      
      
   5. whether the proposed budget is reasonable and realistic;
      
      
   6. whether there is/will be any duplication in terms of the work carried out by other institutions; and
      
      
   7. for a project involving recurrent expenditure (such as salaries and other administrative expenses), the period required for such expenditure and whether the project can be self-financing after a certain period of time.