LegCo Paper No. ESC 24/96-97
(These minutes have been
seen by the Administration)
Ref : CB1/F/3/2

Establishment Subcommittee

Minutes of the proceedings of the meeting
held on Wednesday, 29 January 1997
at 10:45 am in the Conference Room A

Members present :
    Hon Ronald ARCULLI, OBE, JP (Chairman)
    Dr Hon Anthony CHEUNG Bing-leung (Deputy Chairman)
    Hon SZETO Wah
    Dr Hon LEONG Che-hung, OBE, JP
    Hon Michael HO Mun-ka
    Dr Hon HUANG Chen-ya, MBE
    Hon Emily LAU Wai-hing
    Hon Fred LI Wah-ming
    Hon Henry TANG Ying-yen
    Dr Hon Samuel WONG Ping-wai, OBE, FEng, JP
    Dr Hon Philip WONG Yu-hong
    Hon James TIEN Pei-chun, OBE, JP
    Hon CHAN Wing-chan
    Hon Paul CHENG Ming-fun
    Hon CHENG Yiu-tong
    Hon LAW Chi-kwong
    Hon Bruce LIU Sing-lee
    Hon NGAN Kam-chuen
Members absent :
    Dr Hon David K P LI, OBE, LLD (Cantab), JP
    Hon CHEUNG Man-kwong
    Hon IP Kwok-him
    Hon Margaret NG
    Hon Mrs Elizabeth WONG, CBE, ISO, JP
Public officers attending :
    Mr Kevin HO, JP
    Deputy Secretary for the Treasury
    Deputy Secretary for the Civil Service
    Mr Patrick CHIM
    Principal Assistant Secretary for the Treasury
    Mr A K PATON
    Deputy Government Property Administrator
    Mr Rafael HUI, JP
    Secretary for Financial Services
    Mrs Pamela TAN, JP
    Director, Mandatory Provident Fund Office
    Mr Stephen PANG
    Principal Executive Officer, Mandatory Provident Fund Office
    Mr Johnny CHAN
    Principal Assistant Secretary for Transport
    Mrs Lily YAM, JP
    Commissioner for Transport
    Mr LEE Shu-chee, JP
    Assistant Commissioner for Transport (Technical Services & Planning)
    Dr Ernest S W LEE, JP
    Assistant Commissioner for Transport (Management & Licensing)
    Mr Daniel R FUNG, QC, JP
    Solicitor General, Legal Department
    Mr Peter H K CHEUNG, JP
    Chambers Manager, Legal Department

Clerk in attendance :

    Mrs Constance LI
    Chief Assistant Secretary (Finance Committee)
Staff in attendance :
    Miss Pauline NG
    Assistant Secretary General 1
    Mr Andy LAU
    Senior Assistant Secretary (Finance Committee)

EC(96-97)56 Proposed making permanent the post of Principal Management Services Officer (D1) to carry out work of a continuous nature in the Management Services Division of the Government Property Agency.

The item was voted on and endorsed.

EC(96-97)52 Proposed retention of four directorate supernumerary posts in the Financial Services Branch for 13 months from 1 March 1997 to 31 March 1998 in order to continue work on the development of the Mandatory Provident Fund System

2. Members of the Democratic Party indicated objection to the present proposal, for reasons they had given at previous meetings of the Subcommittee and the Finance Committee on the subject.

3. Members of the Democratic Alliance for the Betterment of Hong Kong (DAB) expressed reservations that the proposed MPF Scheme could provide adequate protection for the retired and the low-income group, and urged the Administration to consider the following six suggestions :

  1. To ensure protection of the employees' interest, the Government should be represented on the Management Committees overseeing the management of the Industry Scheme and the Residual Provident Fund Scheme.
  2. For consistency with the provisions under the MPF Scheme, employees who joined the schemes under the Occupational Retirement Schemes Ordinance (ORSO) should also be entitled to receive the employers' contributions on dismissal.
  3. The proposed ceiling of $500 million for professional indemnity insurance should be waived.
  4. The ratio for local investment should be increased from 30% to 50%.
  5. The scope of the Residual Provident Fund Scheme should be expanded to provide more flexibility for the low-income employees to participate, with a minimum annual return rate of 4%.
  6. MPF benefits derived from employer contributions should not be used for offsetting against severance payments/long service payments.

4. Members of the Federation of Trade Unions stated that while they had been in support of a retirement protection scheme for the elderly, they had reservations about the operational arrangements of the Mandatory Provident Fund (MPF) Scheme. They urged the Government to make improvements along the lines suggested by the DAB, to ensure that the interests of employees and investments under the schemes would be adequately protected.

5. In response, the Director, Mandatory Provident Fund Office (D/MPFO) advised that some of these suggestions had been discussed by the LegCo Subcommittee on MPF System, and the Administration was currently examining the implications and feasibility of these proposals. She further advised that various measures would be put in place to safeguard the interests of the employees under the MPF system. To obviate the need for employees in high mobility trades such as catering and construction to incur additional costs for scheme transfers, special industry schemes would be established for the purpose. A Residual Provident Fund Scheme would be set up for those employees who had been unable to join other MPF Schemes. The Administration also agreed that Management Committees would be set up to oversee the operation of these schemes. There were also provisions to cover losses due to fraud and misfeasance from a Compensation Fund.

6. As regards the monitoring of the Residual Provident Fund Scheme and Industry Schemes, D/MPFO advised that the future MPF Authority (MPFA) would closely monitor the administration and management of these special schemes. Corporate trustees would be selected through public tender, and renewal of the tenure of the trustees would be subject to review. Where necessary, new conditions could be added, after a tenure expired, to suit the prevailing needs. The trustees would be required to submit regular reports to the MPFA. Management Committees would also be set up comprising independent persons of public standing to ensure that the schemes were operated under a fair and open manner and were in the best interests of scheme members.

7. Regarding full vesting of employers' contribution in cases of dismissal under the ORSO, D/MPFO pointed out that the ORSO and MPF Scheme had different vesting requirements on withdrawal of contributions, and existing ORSO participants might not welcome such changes modelled after MPF Scheme. She noted members' concern in this area and undertook to further examine the technicality of the proposal.

8. Members of the Liberal Party in general supported the setting up of the MPF System and sought clarification on the status and withdrawal criteria of the accrued benefits. In reply, D/MPFO advised that all accrued benefits under the MPF could only be withdrawn by the employees on retirement at the age of 65 or under the circumstances prescribed in the legislation. The accrued benefits preserved in the MPF schemes would not be treated as assets in assessing the eligibility for social security assistance, and the accrued benefits would be protected against any civil and criminal liabilities of the participants. As the MPF was essentially a retirement benefit scheme, it would not be appropriate to allow early withdrawal of the accrued benefits for payment of medical insurance or home purchase. With regard to increasing the ratio of local investment, D/MPFO stressed that the proposed 30% was only the minimum requirement drawn up on the basis of the investment pattern of the industry.

9. Noting that the subsidiary legislation would only be submitted to the Legislative Council around March/April 1997, a member queried that there might be insufficient time to scrutinise the subsidiary legislation before the change of sovereignty on 1 July 1997. In response, the Secretary for Financial Services advised that the Administration still aimed at completing the necessary legislative procedures before 1 July. To expedite the legislative process, the Administration had been in discussion with the LegCo Subcommittee on the MPF System on the principles of the MPF operation. This would facilitate the drafting and subsequent scrutiny of the subsidiary legislation. The Subcommittee on MPF System had held eight meetings so far and was achieving satisfactory progress. In the event that the legislative procedure could not be completed within the current legislative session, this would continue in the next session. In summing up the discussion, D/MPFO advised that the Administration was examining members' suggestions on the operation of the MPF Scheme, and appealed to the Subcommittee to support the funding of the MPFO to enable the Administration to continue work on the scheme.

10. As the subject had been discussed at length, the Chairman put the proposal to vote: six members voted for and 11 members voted against the proposal.

Ayes :

Dr Hon LEONG Che-hung

Hon Henry TANG Ying-yen

Dr Hon Samuel WONG Ping-wai

Dr Hon Philip WONG Yu-hong

Hon James TIEN Pei-chun

Hon Paul CHENG Ming-fun

(6 members)

Nos :

Dr Hon Anthony CHEUNG Bing-leung


Hon Michael HO Mun-ka

Dr Hon HUANG Chen-ya

Hon Emily LAU Wai-hing

Hon Fred LI Wah-ming

Hon CHAN Wing-chan

Hon CHENG Yiu-tong

Hon LAW Chi-kwong

Hon Bruce LIU Sing-lee

Hon NGAN Kam-chuen

(11 members)

11. The proposal was negatived.

EC(96-97)57 Proposed creation of a permanent post of Principal Government Engineer (D3) in the Transport Department to meet the increased workload and responsibility and to strengthen the department's transport planning and traffic management capability

12. Responding to a member, the Commissioner for Transport (C for T) briefed members on the employment of advanced technology to assist traffic management. With regard to traffic surveillance and information systems, the department was implementing a programme for the installation of computerised area traffic control, close circuit television, and emergency telephone systems. On further improvements to the dissemination of traffic information to motorists, C for T noted members' suggestion concerning electronic signage systems and a radio broadcast system to give advance warnings on road conditions and traffic congestion to motorists.

13. Some members remarked that the different autotoll systems adopted by the tunnels had caused much inconvenience to motorists. They urged the Government to consider imposing a compatible system for all tunnels. In response, C for T advised that since autotoll collection systems were still at an early stage of development, the Government did not want to create a monopolistic situation which would not be able to take advantage of the latest technology development. For this reason, it had not imposed a standard autotoll system for tunnels from the beginning. While the system adopted by the Cross Harbour Tunnel was a read-only system, the more advanced system now used by Tate's Cairn Tunnel displayed the balance in an account. The latter system would be used in the Lautau Link. She noted members' concern about the compatibility of the existing autotoll systems and advised that the matter would be followed up by the LegCo Panel on Transport.xx

14. The item was voted on and endorsed.

EC(96-97)58 Proposed creation of a permanent post of Principal Executive Officer (D1) in the Transport Department with effect from 1 April 1997 to head the Licensing Division

15. Noting that there were already two supernumerary posts of Principal Transport Officer (PTO) under the Assistant Commissioner/Management and Licensing (AC/ML), some members asked whether the proposed duties of the Principal Executive Officer (PEO) could be absorbed by the two PTOs.

16. In response, AC/ML advised that both PTOs had a heavy schedule. PTO/Tsing Ma was responsible for formulating requirements for the management, operation and maintenance of the Tsing Ma Control Area, and providing planning input for other road projects such as Route 3 (Country Park Section). The post would lapse in March 1998 and the Administration would review the continued need of the post in due course. As regards the post of PTO/Management, it was required to provide the necessary directorate input to contract management in respect of the privatised transport infrastructural facilities, supervision of government carparks, road tunnels and metered parking services, and prosecution of traffic offences, etc. These posts therefore could not absorb the duties of the proposed PEO/Licensing post.

17. On the justification of the proposed PEO/Licensing post, AC/ML advised that the duties of the post were of a continuing nature, hence there was a need to make it permanent. The PEO had to formulate strategies to implement the licensing policy and improvements relating to licensing functions, and to provide directorate input including attending meetings on cross-border vehicle and driver licensing matters. These duties would require the political sense, analytical power and foresight of a directorate officer.

18. Referring to the recent proposals from the Administration to convert some supernumerary posts to the permanent establishment, a member asked whether the existing mechanism was effective in reviewing the continued need of supernumerary posts. In response, the Deputy Secretary for the Treasury advised that the Administration reviewed carefully each case on its own merits, and would only put forward those justified proposals for members' consideration. At the request of the member, he undertook to provide further information in respect of the number of supernumerary posts approved, extended or converted to permanent posts in the past three years. The Chairman advised that the subject could be pursued by the LegCo Panel on Public Service.Admin

19. A member suggested that the Transport Department should consider dispensing with the need to renew driving licences every three years in order to save staff costs. AC/ML advised that the Administration was currently reviewing the arrangement.

20. The item was voted on and endorsed.

EC(96-97)59 Proposed -

  1. extension of the supernumerary posts under the Double Ladder Scheme, the Development Posts Scheme and the Succession Posts Scheme from 1 April 1997 to 31 March 1998; and
  2. delegation of authority to the Controlling Officer to create supernumerary directorate posts of no more than 14 Assistant Principal Crown Counsel (DL1) and four Principal Crown Counsel (DL3) posts held against posts at the lower rank

21. Several members expressed serious reservations about the proposal to extend the supernumerary posts under the Double Ladder Scheme, the Development Posts Scheme and the Succession Posts Scheme. They enquired what future plans or options would be in the event that the remaining nine Senior Crown Counsel/Double Ladder (SCC/DL) could not gain promotion to the substantive rank of SCC on expiry of the supernumerary posts.

22. In response, the Solicitor General (SG) advised that the proposed extension of the posts was to allow more time to assess the suitability of the remaining SCC(DL) for substantive promotion. Since promotions to SCC functional posts were open to both SCC(DL) and Crown Counsel (CC) based on merit and ability, the Administration could not guarantee that all SCC(DL) would be promoted substantively within the coming year. Nevertheless, the incumbents had been assessed to have the potential for advancement and they stood a good chance of promotion given more time to demonstrate their suitability. The Administration would continue to groom the remaining SCC(DL) with a view to transferring them to the substantive rank. He added that all promotions were carefully vetted at different levels in the department and subject to the scrutiny of the Public Service Commission. He also pointed out that in accordance with Civil Service Regulation 109 (1), officers appointed to SCC(DL) posts could not be reverted to the rank of CC. The Administration was bound by the contract of appointment to retain the incumbents at the SCC rank or remunerate them on equivalent terms so long as they were not transferred to functional SCC posts.

23. Some members were concerned that the Administration might have to create functional SCC posts eventually to accommodate the remaining SCC(DL), through the Departmental Establishment Committee mechanism without the knowledge of the Establishment Subcommittee. In response, SG assured members that the Administration had no such intention, and that such SCC posts could only be created on functional basis.

24. Some members also indicated objection to the proposed delegation of authority to the Controlling Officer for the creation of supernumerary directorate posts specified in (b) of the preamble of the paper. They considered that there was insufficient information in the paper to enable the Subcommittee to take a view on the proposals. At the request of some members, the Administration undertook to provide additional information on the background of the schemes, in particular the contractual obligations of the Administration in the appointment of these officers under such schemes.Admin

25. In view of members' comments, the Deputy Secretary for the Treasury proposed to withdraw the paper for re-submission to the Subcommittee at the next earliest meeting.

26. The item was withdrawn by the Administration.

(Post-meeting note: The proposal would be re-submitted to the Establishment Subcommittee on 26 February 1997 for a recommendation to be made to the Finance Committee on 21 March 1997.)

27. The Committee was adjourned at 12:15 p.m.

Legislative Council Secretariat
19 February 1997

Last Updated on 12 August 1999