Information Note for
Legislative Council Panel on Economic Services

Ex-gratia Allowances for Fishermen Affected by
Reclamation or Development Projects

This paper provides information on the payment of ex-gratia allowances to fishermen affected by reclamation or development projects, and the current review of the existing methodology for calculating the allowances.

Payment of Ex-gratia Allowances to Fishermen

2. Fishermen do not have legal title in respect of the waters where they habitually fish. They are therefore not entitled to any statutory compensation. However, according to existing policy, fishermen affected by reclamation or development projects may be granted ex-gratia allowances subject to certain eligibility criteria.

3. The Finance Committee approved in 1993 that ex-gratia allowances should be based on the notional value of three years' fish catch in the gazetted works area for the proposed projects under the Foreshore and Sea-bed (Reclamations) Ordinance (Cap 127), and should be applied to all reclamation, dredging and dumping projects. Such ex-gratia allowances serve as allowances for a permanent loss of fishing grounds and are aimed at assisting the affected fishermen to relocate their activities to other fishing grounds or to move into another industry. The allowances are equivalent to almost five years' net income for vessel owners/operators after taking into account all expenses.

4. The notional value of the total fish catch in the affected area is derived from data on fishing operations collected by the Agriculture and Fisheries Department (AFD) during 1989-1991 through surveys with fishermen at fishing ports throughout the territory (the 1989-1991 Port Survey). The amount is then apportioned among eligible vessel owners, taking into account their declared dependence on the affected area and the length and types of the fishing vessels involved. Since 1993, the Government has granted about $144 million of ex-gratia allowances to over 6,000 successful applications.

Fishermen's Concerns

5. The Government has been aware of some fishermen's concerns regarding the calculation of ex-gratia allowances, which mainly fall under the following three areas:

  1. the data collected through the 1989-1991 Port Survey is outdated;

  2. development projects may have impact on fisheries resources outside the gazetted works area; and

  3. the payment of the notional value of three years' fish catch may not be adequate.

6. AFD commissioned a Consultancy Study on Fisheries Resources and Fishing Operations in Hong Kong Waters (the Consultancy Study) in 1996-1997 to collect the current data on the pattern of fishing operations and fisheries resources in Hong Kong waters, to evaluate the effects of habitat disturbance from coastal development/pollution and stock depletion from fishing pressure, and to make recommendations for sustaining the fishing industry and conserving fisheries resources in Hong Kong. The Consultancy Study has been completed and its findings have, among others, provided updated information as the basis for reviewing the existing formula for calculating ex-gratia allowances payable to affected fishermen and recommending changes where necessary.

Major Findings of the Consultancy Study Relevant to Calculation of Ex-gratia Allowances

7. The major findings of the Consultancy Study which are relevant to the calculation of ex-gratia allowances for affected fishermen include-

  1. There has been a significant decline in the level of fisheries resources within Hong Kong waters. Compared with the 1989-1991 Port Survey, the Consultancy Study has revealed that:
      - adult fish production per year has decreased by 45% to the present 10,700 tonnes;

      - fish fry production per year has decreased by 90% to the present 6,400,000 tails;

      - per hectare production value has decreased by 40% to the present $1,500; and

      - out of the 12 fishing areas in Hong Kong, only two (representing about 22% of the total territorial waters) have shown an increase in fisheries production. The rest have all registered a reduction in fisheries production.

  2. The reduction in fish stock in Hong Kong is due primarily to overfishing, and to a lesser degree, to development related impact.

8. To address the issues of overfishing and marine habitat degradation, the Consultancy Study has examined and prioritized a number of fisheries conservation and management options, and recommended that the Government should consider implementing the highest priority options as part of the fisheries management strategy for Hong Kong.

Way Forward

9. Based on the findings of the Consultancy Study, the Government is reviewing the existing formula for calculating ex-gratia allowances payable to fishermen affected by development projects. Any proposed revisions of the formula will be reported back to this Panel and submitted to the Finance Committee for approval.

Planning, Environment and Lands Bureau
September 1998