Information Note for the LegCo Panel on Public Service Meeting on 16 November 1998
Declaration of Investments by Civil Servants


The purposes of this Note are to -
  1. set out how the revised declaration of investments system has addressed the observations made in the former LegCo Select Committee's Inquiry Report on the departure of Mr Leung Ming-yin (the Select Committee); and

  2. inform Members on the implementation of the revised declaration system.

    The Review and the Revised Declaration Requirements

    2. At the meeting of the LegCo Panel on Public Service on 21 September 1998, Members were briefed on the outcome of the review of the declaration of investments and the revised declaration requirements. In response to Members' enquiries, copies of the Civil Service Bureau Circular No. 8/98 dated 18 September 1998 promulgating the revised declaration requirements and an outline of the measures that we have taken in the light of the Select Committee*s observations and recommendations were forwarded to Members.

    3. Specifically, Members were concerned about how the observations and recommendations of the Select Committee have been addressed. Extract of the Select Committee's observations is at Annex. Having regard to the varying degree of exposure to conflict of interest situations in different positions in the civil service, the large size of the civil service and the need to ensure vigilance against potential conflict of interest situations, we have included in the revised rules that -

    1. officers are reminded to declare on any investments which they make with members of public or private bodies with which they have official dealings. This removes any doubt on the part of civil servants on whether any such investments may constitute conflict of interest and the need for reporting;

    2. Bureau Secretaries/Heads of Department are requested to consider, in the light of their specific operational needs, drawing up additional investment guidelines which may include requiring staff to avoid or declare certain specified investment activities because of apparent conflict of interest. In this connection, we have set out in the Circular elaborated guidelines for determining conflict of interest between official duties and private investments;

    3. officers are also reminded that if there is doubt on whether a particular private investment is in conflict of interest with official duties, they should seek advice from their supervisors as the onus for reporting any such conflict rests with individual officers; and

    4. in addition to reporting investments at pre-determined cycles, officers in designated posts are further required to report on any single investment transactions equivalent to or exceeding $200,000 or three months' salary, whichever is the less, within seven days of transaction. Balancing the implications over administering the declaration forms and bearing in mind that the additional guidelines may be imposed by individual Bureau Secretaries/Heads of Department in specified investments, we consider the threshold of $200,000 or three months' salary for immediate declaration a reasonable one.


    Designation of Posts and Examination of Declaration Returns

    4. 25 key posts of the Hong Kong Special Administrative Region Government have been centrally designated as Tier I posts. We have invited declarations from officers holding Tier I posts and will prepare a register of the financial interests of Tier I posts for public inspection in November.

    5. As far as Tier II posts are concerned, a total of 1,895 posts (as at 11 November 1998) have been designated. They consist of 1,177 directorate posts and 718 non-directorate posts. Some bureaux/departments have advised that they require more time to finalise the designation. We shall inform Members of the total number of designated posts as soon as the information is compiled.

    Additional Investment Guidelines

    6. Six Bureaux/Departments have issued additional investment guidelines for compliance by their staff, and some others have advised that they are considering/developing additional guidelines. The additional declaration guidelines issued by bureaux/departments impose varying additional requirements ranging from -
    1. requiring officers to report investments on appointment to the office whether they hold designated posts;

    2. requiring officers to make more frequent declarations; and

    3. requiring officers to declare every investment transaction in specified business areas related to the official duties, irrespective of the amount and regardless of whether they hold designated posts.
    Concluding Remarks

    7. The Civil Service Bureau works closely with bureaux/departments in the implementation of the revised declaration requirements and will keep the declaration requirements under regular review.

    Division 4
    Civil Service Bureau
    November 1998


    Extract of the Report of the Select Committee to Inquire into the Circumstances Surrounding the Departure of Mr LEUNG Ming-yin from the Government and Related Issues

    5.9 The Committee observes that there are provisions in the Civil Service Regulations governing private investments by civil servants and several Civil Service Branch circulars have been issued on the subject. However, no guideline has been set up for the proper conduct of civil servants in handling private business relations with Members of the Legislative Council and other political figures in Hong Kong or elsewhere. The Committee considers these matters to be of fundamental importance, and recommends that the Government draw up guidelines for the avoidance of doubt and uncertainty. Nevertheless, the Committee expects that Government officials, particularly those in senior positions, should at all times exercise proper and sensible judgement in deciding whether certain business relations are appropriate.