Legislative Council

LC Paper No. CB(1) 92/99-00

Ref : CB1/BC/14/98

Paper for the House Committee meeting on 15 October 1999

Report of the Bills Committee on
Shipping and Port Control (Amendment) Bill 1999

Purpose

This paper reports on the deliberations of the Bills Committee on Shipping and Port Control (Amendment) Bill 1999.

Background

2. At present, Part V of the Shipping and Port Control Ordinance (Cap. 313) (the principal Ordinance) provides for the regulation and control of repairs and breaking up of vessels, and cargo handling on vessels. The safety of the persons engaged in such activities is protected under the provisions of Part V. However, the growth in container handling and marine construction activities in recent years, and the adoption of practices to accelerate the container transfer process have given rise to potential new hazards and more accidents. The Administration therefore considers it necessary to expand the scope of the principal Ordinance to cover marine construction activities and to strengthen the existing legislative provisions to further protect the safety of workers.

The Bill

3. The Bill seeks to:

1. extend the marine work activities covered by the principal Ordinance to include "marine construction"; and

2. improve the safety of workers engaged in marine work activities, through:
   1. empowering the Director of Marine (D of M) to issue codes of practice for the purpose of providing practical guidance in respect of the requirements of Part V of the principal Ordinance;

   2. enabling regulations to be made for the control of works, and for D of M to approve any person to provide a safety training course and issue certificates to any person who attends the course; and

   3. increasing the penalty charges for breach of the requirements of Part V of the principal Ordinance.

The Bills Committee

4. The House Committee agreed at its meeting on 16 April 1999 to form a Bills Committee to study the Bill. The Bills Committee first met on 10 July 1999 and Hon HUI Cheung-ching was elected Chairman. The membership list of the Bills Committee is in Appendix I. The Bills Committee held a total of three meetings. It has received written submissions from eight organizations, including the Occupational Safety and Health Council and seven associations in the relevant industries, and met representatives from six of them. The list of these organizations is in Appendix II.

Deliberations of the Bills Committee

5. The Bills Committee welcomes the introduction of the Bill which aims at strengthening the existing legislation to further protect the safety of workers. The main deliberations of the Bills Committee are set out in the following paragraphs.

Codes of practice

6. The Bills Committee notes that the relevant industries are in support of the proposed provision on the issue of codes of practice by D of M. In response to the Bills Committee's request that the relevant industries be fully consulted before finalizing the codes, the Administration advises that a steering group comprising representatives from the Administration, Occupational Safety and Health Council and the relevant industries has been set up to work on the code of practice. It is expected that the steering group, with the expert advice of consultants, will draw up a code which is acceptable to all parties concerned.

Increase in penalty charges

7. The Bill proposes to increase the penalty charges for breach of the requirements of Part V of the principal Ordinance by 100% to 150%. The Bills Committee notes that the relevant industries are particularly concerned about the substitution of fines by a higher level, for example, a fine of $10,000 be substituted by a fine at level 4 ($10,001 to $25,000), and a fine of $20,000 be substituted by a fine at level 5 ($25,001 to $50,000), etc. The justification put forth by the Administration for this proposal is to achieve a deterrent effect and to reduce the accident figures. According to the Administration, the existing penalty charges were set in 1978. The casualty and fatality figures in different marine industries respectively amounted to 684 and 9 in 1996, 599 and 11 in 1997, and 536 and 5 in 1998. Although the accident figures do not depict an upward trend, the numbers are still on the high side. The proposed increase therefore aims to deter employers/persons in charge of works from not complying with the legislative requirements and accordingly, reduce the accident figures.

8. Some of the organizations in the relevant industries however are not convinced of the need to increase the penalty charges. They have pointed out to the Bills Committee that due to the economic downturn of Hong Kong, the relevant industries have been experiencing great difficulties in continuing their business. The proposed increase in penalty charges will only impose further financial difficulties on the employers and result in some of them closing down their business, but not necessarily reduce the accident figures. They consider that the Administration should improve the safety of marine work activities through other means, such as by strengthening the publicity work on occupational safety and organizing more training courses for the workers concerned.

9. Whilst appreciating the concern of the relevant industries, the Bills Committee notes with concern that there were over 500 casualty and fatality cases in each of the recent three years and recognizes the need to improve the situation. Having regard to the fact that the existing penalty charges were set 21 years ago, a majority of members of the Bills Committee support the Administration's proposal to increase the penalty charges to achieve a deterrent effect. They note that the proposed increase is part of the whole package of the legislative amendments proposed by the Administration for improving the safety of marine work activities and will only affect those employers who do not comply with the requirements of Part V of the principal Ordinance. In setting the revised levels of penalty charges, the Administration has made reference to the relevant legislation governing industrial safety for land-based operations, namely, the Factories and Industrial Undertakings Ordinance (Cap. 59) and the Occupational Safety and Health Ordinance (Cap. 509). In fact, the revised levels of penalty charges proposed under the Bill are far lower than those stipulated in Cap. 59 and Cap. 509. According to the Administration, the range of fines under each level of penalty charges will provide flexibility for the court to impose heavier fines for the repeated offenders. In other words, the court may not necessarily impose the maximum fines on the offenders. The Bills Committee notes that the offenders involved in the six prosecution cases between 1996 and 1998 have been fined a total of $39,500 only and that it appears unlikely that the increase in penalty charges would substantially increase the operational costs of employers.

10. Notwithstanding the above, Hon Mrs Miriam LAU has drawn the Bills Committee's attention to the unfairness to the industries if penalty charges are increased before the implementation of the codes of practice. To address Hon Mrs Miriam LAU's concern, the Administration has proposed to introduce a Committee Stage amendment (CSA) to clause 1 of the Bill to the effect that the Bill, if passed by the Council, will come into operation on a day appointed by the Secretary for Economic Services by notice in the Gazette. The Administration's plan is to issue the codes of practice six months after the enactment of the Bill and at the same time, put into effect the revised penalty charges. Other provisions of the Bill will be effective as soon as possible after enactment of the Bill. Members consider this arrangement acceptable.

Definition of "person in charge of works"

11. Under the existing legislation, "person in charge of works" means the owner or master of, or other person having control over, the vessel concerned, or a principal contractor or sub-contractor. It is proposed under the Bill that the definition be expanded to include "any other person having for the time being in command or charge of any works being carried out on, to or by means of a vessel". One of the organizations in the relevant industries is concerned that if the revised definition is adopted, the terminal operators, being persons in charge of works, will be subject to a number of legislative requirements to be imposed on persons in charge of works, such as the provision of training, and the requirement to ensure that any equipment provided for use in a workplace by the persons employed in the works should be in safe working conditions. The Bills Committee notes the Administration's advice that in some cases, the principal contractor or the sub-contractor does not control the actual progress of works on board a vessel. The Administration therefore proposes to expand the definition of "person in charge of works" to the effect that the frontline supervisor who is directly in charge of works on board of a vessel will be responsible for the works to be safely carried out. The Bills Committee accepts that there is a need to revise the definition as proposed. It also notes that to assist the relevant industries in complying with the legislative requirements, the Administration is, in conjunction with the Vocational Training Council, organizing two-day safety training courses for the frontline supervisors of ship repair works.

Application of Part V of the principal Ordinance to vessels of 50 metres or less in length

12. At present, ship repairing and ship breaking activities for vessels of 50 metres or less in length are exempted from the control of Part V of the principal Ordinance. To tighten the control of such activities, the Administration proposes to amend section 37 of the principal Ordinance, by clause 8 of the Bill, to remove such an exemption. However, the Bills Committee notes that at the same time, clause 10 of the Bill amends section 40 of the principal Ordinance by adding a new subsection (1A) so that vessels of 50 metres or less in length will continue to be exempted from the requirement of seeking D of M's permission for any repairing or breaking up work to be carried out to these small vessels. The adding of the new subsection (1A) therefore appears to be not in line with the policy intent of clause 8 of the Bill.

13. In response to the Bills Committee's queries, the Administration advises that in 1998, there were only 36 cases of industrial accidents that involved repairing of vessels of 50 metres or less in length and all such accidents were minor in nature. Hence, the Administration considers it appropriate to retain the existing arrangement that written permission of D of M is not required for any repairing or breaking up work to be carried out to these small vessels. Apart from this exemption, these small vessels will be subject to more stringent legislative control after the passage of the Bill. The Bills Committee accepts the Administration's explanation.

Consequential amendments to the Merchant Shipping (Local Vessels) Ordinance

14. The Bills Committee supports the Administration's proposal to add new clauses 17 to 27 to the Bill so that consequential amendments will be made to the Merchant Shipping (Local Vessels) Ordinance ( Ordinance No. 43 of 1999) which was passed on 7 July 1999. The Administration will move CSAs to this effect.

The Shipping and Port Control (Cargo Handling) (Amendment) Regulation 1999

15. The Bills Committee takes note of the Administration's proposal that after enactment of the Bill, the Shipping and Port Control (Cargo Handling) (Amendment) Regulation 1999 will be introduced and be subject to negative vetting of the Council. Under the Regulation, new provisions on occupational safety will be added and general duties of care will be imposed on employers, persons in charge of works and persons employed.

Committee Stage amendments

16. The Administration has agreed to move the CSAs in Appendix III.

Recommendation

17. The Bills Committee recommends the resumption of the Second Reading debate on the Bill on 3 November 1999.

Advice sought

18. Members are requested to support the recommendation of the Bills Committee in paragraph 17 above.

Prepared by

Council Business Division 1
Legislative Council Secretariat
12 October 1999

Appendix II