For discussion
on 20 March 1998


New Capital Account Subhead Grant to the Occupational Safety and Health Council"


The Occupational Safety and Health Council (OSHC) needs to acquire new office premises to support its enhanced programme of activities.


2.We propose to make a one-off grant of $38 million to OSHC to assist the Council in acquiring its new office premises.


Expanded programme of activities

3.The OSHC was set up in 1988 to encourage and promote higher standards of safety and health at the workplace in Hong Kong. Over the years, the Council has expanded its activities steadily to promote occupational safety and health. In response to the recommendations of the 1995 Review of Industrial Safety in Hong Kong, the Council has substantially enhanced its programme of activities, including training, education, research and consultancy services. The expanded programme has helped to enhance employees' awareness of occupational safety and health, and in turn reduce the number of occupational injuries and diseases. This is expected to bring about improved productivity and staff morale, and reduction in social costs in terms of medical services, compensation and social security payments, thus benefiting the community at large.

4. Following the enactment of the Occupational Safety and Health Ordinance (OSH Ordinance) in May 1997, subsidiary legislation covering general safety, health and welfare at the workplace and manual handling operations was made in June 1997. We plan to introduce other sets of subsidiary legislation under the OSH Ordinance in stages over the next two years. This is milestone legislation as it introduces, for the first time, occupational safety and health protection for employees in the non-industrial sector, covering some 1.8 million employees.

5. Looking ahead, to perform its statutory functions, OSHC will promote and publicise the new legislation on occupational safety and health and provide relevant training to management staff and employees in the non-industrial sector. It has also drawn up a five-year strategic plan to bring the greatest benefit to the community and better preserve and improve the well being of the local workforce. Major initiatives included in the strategic plan are as follows -

  1. education and training - to intensify general training for the public and to develop train-the-trainer programmes, training kits for small and medium enterprises and primary/secondary school students;

  2. publicity - to promote awareness of occupational safety and health through a series of community and outreaching programmes and by developing an Occupational Safety and Health Ambassador Scheme and to form a coalition of various interest groups in furtherance of the concept of "safe communities";

  3. information - to disseminate occupational safety and health information to different users by electronic media, printed publications, etc.;

  4. consultancy - to facilitate exchange of best practices in safety and health management among corporations by forming a safety benchmarking group and to support small and medium enterprises in developing safety management; and

  5. research - to conduct more survey-type researches to collect and analyse data on occupational safety and health and to conduct in-depth examination of common occupational health problems for formulation of practical advice.

Need for new office premises

6.In order to implement the expanded programme of activities, OSHC will need to recruit additional staff and acquire new office premises for additional training courses, information services, promotional activities and other supporting services. Taking into account the need for future expansion, the Council estimates that it will require a total office area of 1 680 square metres, or about double the floor area now available to it. The larger office could provide, among other things, much-needed permanent venues for some 400 training courses conducted by the Council each year, as well as an information and resource centre for use by the public.

7. Having regard to its financial position, the Council proposes to retain its existing self-owned office in Tsim Sha Tsui (about 568 square metres) but delease its rented office (about 320 square metres) on expiry of the existing tenancy agreement in March 1999 and take action now to acquire new office premises of about 1 115 square metres in non-prime areas along the MTR route. The newly acquired office will serve as its head office and main training centre, catering for the bulk of employee trainees, while the Tsim Sha Tsui office will be used as a resource and information centre, as well as a training venue for managers and supervisors in general.

8. The OSHC estimates that the purchase and fitting-out of
1 115 square metres of new office premises will cost about $70 million, broken down as follows -

$ million

Purchase cost


Stamp duty and legal fees


Fitting-out costs




With the help of a $38 million grant from Government, the Council plans to take out a mortgage loan of $32 million and repay it through its recurrent income, primarily from the levy collected under the Employees' Compensation Insurance Levies Ordinance. Annual repayment at prevailing interest rate is estimated at $4.6 million, or 7% of its total estimated expenditure in 1998-99. Mortgage repayment at this level represents only a small share of the Council's recurrent income estimated at $69.5 million for 1998-99 and will not affect its financial position in undertaking the expanded programme of activities.


9. Subject to Members' approval, we will make the grant to OSHC in the current financial year through supplementary provision under delegated authority.


10.The OSHC was set up in 1988 under the OSHC Ordinance
(Cap. 398) with representatives from Government, employers, employees and professionals/academics. Its major functions are to foster greater awareness of occupational health and safety among the community, to provide education, training and consultancy services, and to encourage and facilitate co-operation and communication amongst the parties concerned in the promotion of higher standards of safety and health for people at work.

11. As a self-financing body, the OSHC derives its recurrent income primarily from the levy collected under the Employees' Compensation Insurance Levies Ordinance. Government also makes contribution to the Council in its capacity as an employer as required under the OSHC Ordinance.

12. In order to improve the OSHC's long term financial position, the Chief Executive in Council approved in October 1997 an increase, with effect from 1 January 1998, in the Council's share of the Employees' Compensation Insurance Levies from 1% to 2% of the insurance premium of all employees' compensation policies taken out by employers under the Employees' Compensation Ordinance.

Education and Manpower Bureau
March 1998