Legislative Council

LC Paper No. CB(1)966/98-99
(These minutes have been
seen by the Administration)

Ref: CB1/PL/EA

LegCo Panel on Environmental Affairs

Minutes of special meeting
held on Tuesday, 8 December 1998, at 2:30 pm
in Conference Room A of the Legislative Council Building

Members present :

Hon Christine LOH (Chairman)
Hon HUI Cheung-ching (Deputy Chairman)
Dr Hon Raymond HO Chung-tai, JP
Hon CHAN Wing-chan
Hon YEUNG Yiu-chung
Hon LAU Kong-wah
Hon Mrs Miriam LAU Kin-yee, JP

Non-Panel members attending :

Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon Andrew WONG Wang-fat, JP

Members absent :

Prof Hon NG Ching-fai
Hon Bernard CHAN
Dr Hon LEONG Che-hung, JP
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon WONG Yung-kan
Hon CHOY So-yuk
Hon LAW Chi-kwong, JP

Public officers attending :

Deputy Secretary for Planning,
Environmental and Lands (Environment)

Principal Assistant Secretary for Planning,
Environment and Lands (Environment)

Mr Benny Y K WONG
Assistant Director (Waste Facilities)
Environmental Protection Department

Principal Environmental Protection Officer
Environmental Protection Department

By invitation :

Hong Kong Waste Management Association

Mr Frank WAN

Executive Committee Member

Better Environment Hong Kong

Mr Steve CHOI

Hong Kong Waste Paper Trade Association Ltd.

Mr Eddy LEUNG Kai-kuen

Mr CHAN Yit-yee

Waste Paper Recycling Merchant

Hong Kong Metal Merchants Association

Mr Bernard C W LAU

Mr TSANG Chung-yu
Permanent Adviser

Hoi Kong Ironwares Godown Co. Ltd.

Mr NG Wai-kwong
Managing Director

Print-Rite Management Services Co. Ltd.

Mr Arnald HO Leung-mui
Managing Director

Mr Christopher HWANG Him
Marketing Manager

Mr Benny CHU Wing-yin
Assistant Marketing Manager

Clerk in attendance :

Miss Odelia LEUNG,
Chief Assistant Secretary (1)1

Staff in attendance :

Mrs Mary TANG,
Senior Assistant Secretary (1)2

I Waste Reduction Framework Plan (WRFP)

The Chairman said that the meeting was dedicated to receiving views from deputations on the subject of waste management. She invited representatives of each of following organizations to present views.

(a) The Hong Kong Waste Management Association (HKWMA)
(LC Paper No. CB(1)559/98-99(01))

2. Mr Frank WAN said that HKWMA fully supported the objectives of WRFP. HKWMA agreed that if waste reduction measures were not taken at this stage, more facilities for waste management and disposal would be needed. The cost of waste management should be made known to the public. HKWMA considered that a waste charging system based on the "polluter pays" principle would assist in reducing the amount of waste generated. Mr WAN said that HKWMA agreed that the Administration should provide financial assistance to the recycling industry but the form would need to be further discussed. As regards composting, he said that there was a limited market for compost in Hong Kong. While HKWMA considered waste to energy incineration the most practical solution to reduce the volume of waste, the technical problems remained to be resolved.

(b) Better Environment Hong Kong (BEHK)
(LC Paper No. CB(1)607/98-99(01))

3. Mr Steve CHOI referred members to Appendix I to his submission which showed the slowing down of the waste paper export business since 1995. Mr CHOI said that the recycling business in Hong Kong was also going downhill at the same time. He called on the Government to adopt measures to rescue the recycling industry and to implement a cost-effective waste management system in Hong Kong. Mr CHOI said that it was important to segregate waste to reduce costs in transportation and to prevent recyclable waste from being dumped in landfills. Hong Kong should implement a separate treatment system for recyclable waste similar to the practice adopted by western countries. BEHK supported the establishment of centralised storage depots for the collection of recyclable waste such that recyclers could buy waste materials from Government. This approach would reduce the operation costs of recyclers. Mr CHOI said that participation in waste segregation should be promoted. Apart from waste paper, other materials such plastics, glass and wood should also be recycled for use.

(c) The Waste Paper Trade Association Limited
(LC Paper No. CB(1)607/98/99(02))

4. Mr Eddy LEUNG said that the waste paper recycling business had been seriously affected by the financial crisis. The number of waste recycling companies had been dwindling. Export of waste paper was not doing well either because of high operation costs. The cost of waste paper for export amounted to US $50 per ton and this compared unfavourably with imported waste paper which was only US$30 per ton, inclusive of transport costs. Mr LEUNG said that Government had not given the necessary support to the waste recycling industry. It failed to recognize the contribution of waste recyclers in reducing the quantity of waste which would otherwise be dumped in landfills. The recycling industry also provided job opportunities to a great number of people, in particular aged people who prefer to earn a living through collecting waste rather than relying on social security.

5. Mr LEUNG said that waste recycling was no longer a profitable business and Government assistance was urgently needed to ensure its continued survival. After discussion with representatives of the trade, the Hong Kong Waste Paper Trade Association requested the Government -

  1. to provide land at low premiums/rents for storing and baling waste paper;

  2. to provide designated berthing sites to facilitate export of waste;

  3. to reduce berthing and cargo handling charges;

  4. to provide interest-free or low interest loans to the trade; and

  5. to liaise with the Mainland authorities on the reduction of import inspection charges for waste.

Lastly, Mr LEUNG urged the Administration to show more concern for the waste paper trade which was facing a gloomy future.

6. Mr Tony CHEUNG, a waste paper recycling merchant, said that the main reason for the closing of Concordia Paper Company was high operating costs. The waste paper recycling business was not financially viable because the price of waste paper was not competitive as compared with that of imported waste paper. He urged the Government to provide the necessary assistance to the waste paper trade, in line with the practice adopted by other countries.

(d) The Hong Kong Metal Merchant Association (HKMMA)
(LC Paper No. CB(1)607/98-99(03))

7. Mr TSANG Chung-yu said that metal recycling had been in existence for 50 years. The industry handled about one million metric tons of waste metal scraps each year which would otherwise be dumped in landfills. Metal waste was collected, classified, processed, packaged, stored and finally exported to South East Asia. Unlike waste paper, metal waste should not be disposed of in landfills because of environmental hazards associated with oxidation. The trade made contributions not only to waste reduction but also to the growth of Hong Kong's economy.

8. Mr TSANG said that the metal recycling industry was facing the same difficulties as the waste paper recycling industry. Some of these problems included shortage of land and labour for the recycling operation, and difficulties in complying with environmental regulations. The Environmental Protection Department had not made contact with the trade until very recently. Mr TSANG appealed to Members to assist in working out ways to support the metal recycling industry.

(e) Hoi Kong Ironwares Godown Company Ltd

9. Mr NG Wai-kwong said that the Environmental Protection Department had been concentrating its efforts in promoting environmental practice but had not given support to the waste recycling trade. High land costs for recycling operation were the main difficulty encountered by the trade. Short Term Tenancies offered by the Administration were only valid for a period of five years and such a short duration was not conducive to continued operation of the trade. As a result, recyclers hesitated to invest in machinery, making Hong Kong's recycling industry lagging far behind other countries. The trade was also facing problems of high operating costs as well as shortage of labour. To assist the trade in overcoming these difficulties, Mr NG requested the Administration to -

  1. provide land at a reduced premium and for a longer term;

  2. provide free or low interest loans;

  3. allow importation of labour to resolve manpower shortage; and

  4. make reference to overseas experience in waste management.

(f)Print-Rite Management Services Company Limited
(LC Paper No CB(1)559/98-99(02))

10. Mr Christopher HWANG explained the contributions of remanufacture of toner cartridges to waste reduction as detailed in his submission. He said that the general public had a wrong perception of recycled products which were considered costly but of poor quality. The waste recycling industry had been operating with deficits for many years. He urged the Administration to take active steps in encouraging the public to use remanufactured/recycled products.

Discussion with deputations

11. Responding to Mr HUI Cheung-ching's enquiry on measures to promote the use of recycled products, Mr Arnald HO of Print-Rite Management Services Company Limited said that the company had been participating in programmes organized by Vocational Training Council in promoting recovery of wastes and the use of recycled products. It was of utmost importance that Government should encourage waste recycling practices, in particular the use of recycled products.

12. Mr HUI said that there was no financial incentive to encourage the return of toners by users. Mr Christopher HWANG responded that their company had been making efforts to solicit the support of dealers and retailers in the return of toner cartridges. However, they found it more economical to import than to recover used cartridges. Again Government support was needed in this area.

13. Mrs Miriam LAU noted with concern HKMMA's claim that the Administration had not made any contact with the trade before September 1998 and sought confirmation on whether the trade had been consulted in the compilation of the statistics shown in Table 3.1 of WRFP on municipal solid waste recovery and recycling.

14. In response, Mr TSANG Chung-yu of HKMMA said that the figures in Table 3.1 of WRFP were readily available statistics obtainable through the Census and Statistics Department and that the trade had not been contacted by the Environmental Protection Department on the provision of these statistics.

15. Noting that the trade had not been consulted in formulating WRFP, Mrs Selina CHOW queried how this was worked out, and questioned if the Administration relied solely on overseas experience. She sought the trade's further view on the findings and recommendations of WRFP.

16. Mr TSANG Chung-yu said that he agreed on the figures shown in Table 3.1 on export of metal waste. He considered that there were great potentials of metal waste recovery since considerable amounts of metal waste was being dumped at landfills. Some waste recycling companies had ceased to recycle metal waste because of non-profitability. Mr CHAN Yit-yee of the Hong Kong Waste Paper Trade Association urged the Administration to render suitable assistance to the trade in recognition of their contributions to waste reduction. Dr C S POON of HKWMA said that WRFP did not address waste recycling alone but the wider issue of waste management. HKWMA considered that the WRFP was comprehensive in that it offered practical solutions to waste reduction. According to Dr POON, there had been proper public consultation in the formulation of WRFP. HKWMA and a number of other waste management associations had been invited to give views. Dr POON supported that the waste recycling trade should be given the necessary assistance.

17. Mr Andrew WONG sought information on the availability of land for the waste recycling trade. Mr Bernard LAU of the HKMMA said that the high cost of land posed a serious problem to the trade. As the recently granted Short Term Tenancies were valid only for two years, members of the trade were reluctant to invest in view of their short duration. Mr Eddy LEUNG of Hong Kong Waste Paper Trade Association said that, unlike the metal recycling trade, the waste paper trade did not need a large storage space since waste paper would decay if stored for a long time. Instead, the trade required water front spaces so that waste paper could be baled and loaded for immediate export.

18. Mrs Miriam LAU enquired if the trade considered the granting of Short Term Tenancies helpful in resolving the trade's difficulties. Mr TSANG Chung-yu said that land made available to the trade were granted to the highest bidder, and no consultation had ever been made with the trade on location of land suitable for conducting waste recycling activities. The land designated for the purpose was not ideal for waste recycling operations because the area was either too large or that it was not easily accessible. Mr TSANG called on the Administration to take into account the needs of the trade in land allocation. His views were shared by Mr Eddy LEUNG of the Hong Kong Waste Paper Trade Association who added that the Short Term Tenancies sites designated for the purpose were often large in size and could not be sub-tenanted. Such sites were only suitable for large scale operations. Mr Tony CHEUNG supplemented that the area made available at Tuen Mun for waste recycling operation was a piece of unformed land which was inaccessible by public transport. Moreover, extensive land formation and infrastructural works were necessary before the land could be put to use.

19. As to how the present crisis triggered off by closure of Concordia Paper Company would affect the waste paper trade, Mr Eddy LEUNG said that the waste paper recycling business was no longer viable because of high operation cost. In the absence of subsidies, the waste paper recycling trade could not continue and would have to stop collecting waste paper altogether.

Meeting with the Administration
(LC Paper No. CB(1)559/98-99(03))

20. The Deputy Secretary for Planning, Environment and Lands (Environment) DS/PEL gave a general analysis of the waste paper situation in Hong Kong. He said that about 4,000 tons of waste paper were produced every day. In the past, about 2,000 tons were disposed of in landfills, 800 tons were recycled and 1,200 tons were exported. However, major changes in the supply and demand for waste paper and the recent closure of Concordia Paper Company had caused significant disruptions in the local waste paper recycling and export trade. The closure of Concordia had meant that the outlet for waste collectors had been further reduced. Exporters and recyclers were using the problems faced by the collectors to try to put pressure on the Administration to introduce measures to reduce their operation costs, without necessary benefit to the collectors.

21. As to the present situation, DS/PEL said that export was continuing and about 300 tons of waste paper were being processed locally per day and not very much extra paper was brought to the landfills since Concordia closed down. Even if the waste recycling market disappeared entirely, from a management point of view, there would be no problem in disposing of an extra 2,000 tons of waste paper per day in landfills although this would be undesirable in the long run.

22. DS/PEL stressed that the main objective of WRFP was to reduce the amount of waste substantially and to change the way that waste was handled by producers and intermediaries. There was a need to put in place a sensible, transparent and effective landfill charging system, to develop producer responsibility schemes and waste separation and recovery facilities that would support the waste management strategies.

(Post-meeting note: At members' request, a copy of DS/PEL's speaking notes was circulated to members vide LC Paper No. CB(1)608/98-99)

23. Mr CHAN Wing-chan expressed concern that at present a lot of valuable waste paper was being disposed of in landfills. He urged the Administration to introduce measures to promote segregation of waste and to educate the public on its importance. In response, DS/PEL said that Environmental Protection Department had been in touch with 14 potential purchasers of waste paper in the Mainland and overseas. The Administration would wish to put waste paper to re-use. As regards waste segregation, DS/PEL advised that bins had been provided in 132 public housing estates for separation of waste. Designs for buildings would be suitably adjusted in accordance with new regulations to allow for the provision of waste segregation facilities. The Environmental Campaign Committee, in co-operation with Education Department, Housing Department, Environmental Protection Department and green groups, would be providing the necessary education to the public on the importance of waste reduction and segregation.

24. Mr LAU Kong-wah expressed disappointment that the Administration had not come up with practical solutions to resolve the waste paper crisis but readily accept the consequence of collecting an extra 2,000 tons of waste paper per day should the waste paper market disappear entirely. He was of the view that the decline of the waste paper industry would affect the viability of the waste recycling industry as a whole and undermine the success of the implementation of WRFP. In this connection, Mr LAU enquired about the cost of handling waste paper by the Government, whether it was as high as $600 per ton, and how the import of waste paper from overseas had affected the trade.

25. DS/PEL said that the handling and disposal cost would be around $800 per ton if waste paper was collected by Urban Services Department and Regional Services Department. Part of the aim of WRFP was to bring changes to the waste management system. The Regional Services Department had been contracting out some waste collection services. The present waste management system encouraged waste production as it placed no responsibility on the part of waste producers.

26. The Chairman enquired whether the Administration would rather spend money in collecting and disposing of waste paper in landfills than to use the money to subsidise waste recyclers. DS/PEL explained that there would be no guarantee that the provision of subsidies would ensure the existence of a market for the waste paper trade. Furthermore, it would be difficult to set the right amount of subsidies. If the world price of waste paper continued to drop, the subsidies might not be sufficient to sustain the trade and waste paper would still be disposed of in landfills. Taxpayers would then be subsidising both landfills and the waste paper trade. On the other hand, if the world price of waste paper increased, the subsidies would be an added benefit to the trade. Given the fluctuations in the price of waste paper, there would be no certainty on the amount of public money to be spent. Moreover, the provision of subsidies to one trade would give rise to a chain demand from other trades. The Administration believed that only through a landfill charging system which placed responsibility on waste producers could waste management strategies be successfully implemented. DS/PEL further added that at the moment, very little extra waste paper had been dumped in landfills after the closure of Concordia. Since there was value on waste paper, this was either used by waste recyclers or exporters. The people who suffered most were waste collectors because the outlets for paper and hence its price were both reduced.

. Mrs Miriam LAU was shocked to learn the way the Administration was handling the situation. She did not accept that the introduction of a landfill charging scheme could resolve all the problems in relation to waste management. She was disappointed at the Administration's indifferent attitude to the plight of waste recyclers. She cautioned that without the efforts of waste recyclers, a lot of valuable waste would be dumped in landfills and that landfills would soon be depleted. She called on the Administration to look more closely at the difficulties faced by the trade. She queried if the Administration was prepared to dump all the 600,000 tons of waste paper which had potentials for recovery in landfills each year.

27. DS/PEL said that the proposed landfill charge was to put value on waste. This had been done in the United States, Europe and China. Hong Kong should therefore keep up with its pace in waste management by introducing a more sensible framework which would place responsibility on waste producers, recyclers and collectors.

28. Mr Andrew WONG sought information on Government's waste management policy, in particular on incineration of waste. DS/PEL said that incineration was part of the waste reduction programme. There were many steps in waste management, the first of which was to provide incentives to avoid waste generation, to minimise the amount of waste material to be handled, and to reuse and recycle waste of value. Bulk waste reduction would then be made by incineration or by other methods, after which the waste would be dumped in landfills.

29. The Chairman said that members were not satisfied with the way the Administration had handled the situation. Noting that the Administration would be having a meeting with the trade the following day, members requested the Administration to give a brief account of the outcome of discussion at the coming Panel meeting on 11 December 1998. The waste paper trade representatives were requested to provide a written report to the Panel on their discussion with the Administration. At the request of members, the Administration agreed to confirm the costs of collecting domestic waste borne by the municipal services departments and the disposal costs at landfills and advise how these costs compared with waste management costs in other countries.

30. Members agreed to discuss the subject further at the Panel meeting in January 1999.

II Any other business

31. There being no other business, the meeting ended at 4:30 pm.

Legislative Council Secretariat
4 March 1999