Ref : CB2/BC/11/98

Members Present :

Hon Ambrose LAU Hon-chuen, JP (Chairman)
Hon James TIEN Pei-chun, JP
Hon Cyd HO Sau-lan
Dr Hon Raymond HO Chung-tai, JP
Hon LEE Wing-tat
Hon Lee Kai-ming, JP
Hon Fred LI Wah-ming
Hon CHEUNG Man-kwong
Hon Christine LOH
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon SIN Chung-kai
Hon Andrew WONG Wang-fat, JP
Hon WONG Yung-kan
Hon Jasper TSANG Yok-sing, JP
Hon Howard YOUNG, JP
Hon YEUNG Yiu-chung
Hon LAU Wong-fat, GBS, JP
Hon Emily LAU Wai-hing, JP
Dr Hon TANG Siu-tong, JP
Hon Andrew CHENG Kar-foo


Members Absent :

Hon David CHU Yu-lin
Hon Eric LI Ka-cheung, JP
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon Ronald ARCULLI, JP
Hon MA Fung-kwok
Hon Ambrose CHEUNG Wing-sum, JP
Dr Hon LEONG Che-hung, JP
Hon SZETO Wah
Hon TAM Yiu-chung, JP

Public Officers Attending :

Mr Robin IP
Deputy Secretary for Constitutional Affairs 2

Mrs Maureen CHAN
Deputy Secretary for Constitutional Affairs 3

Mr Paul WONG
Principal Assistant Secretary for Constitutional Affairs

Mr Augustine CHENG
Deputy Director of Home Affairs

Mr James O' NEIL
Principal Government Counsel (Elections)

Mrs N DISSANAYAKE
Senior Assistant Law Draftsman

Mr Vidy CHEUNG
Senior Assistant Law Draftsman

Miss Monica LAW
Senior Assistant Law Draftsman

Clerk in Attendance :

Mrs Constance LI
Chief Assistant Secretary (2) 2

Staff in Attendance :

Mrs Justina LAM
Assistant Secretary General 2

Mr Jimmy MA
Legal Adviser

Mr Arthur CHEUNG
Assistant Legal Adviser 5

Miss Flora TAI
Senior Assistant Secretary (2) 2

I. Committee Stage amendments proposed by Democratic Party

The Chairman said that the Bills Committee would continue to discuss the Committee Stage amendments (CASs) relating to eligibility for candidature proposed by Members of the Democratic Party Members relating to eligibility for candidature.

Eligibility for candidature
[Paper No. CB(2)1158/98-99(04)]

2. Referring to clause 20(1)(e), Mr Fred LI said that the candidates of Legislative Council (LegCo) election and those of District Council (DC) election should not be subject to the same eligibility requirement of having to ordinarily reside in Hong Kong for the three years immediately preceding the nomination. He considered that candidates of DC elections should not be subject to over-stringent eligibility requirements, such as this provision and the requirement for a declaration to be made to uphold the Basic Law and to swear allegiance to the Hong Kong Special Administrative Region (HKSAR) under clause 33(1)(b).

3. Deputy Secretary for Constitutional Affairs 2 (DS(CA)2) responded that the requirement was proposed included because it was considered appropriate and reasonable. He explained that although reference was made to the LegCo Ordinance in drafting the Bill, only those provisions which were considered relevant and appropriate to the DC election had been adopted. He pointed out, for instance, that the nationality requirement for LegCo did not apply to DCs.

4. Referring to clause 33(1)(b), Mr CHEUNG Man-kwong asked why the Administration considered it appropriate to require a DC election candidate to make the declaration given that the Basic Law had not madethere was no such a stipulation in the Basic Law. DS(CA)2 replied that the Administration believed that the requirement was appropriate and pointed out that in accepting office, each appointed and ex-officio member of the Provisional District Boards (PDBs) had also made a declaration to uphold the Basic Law and to swear allegiance to the HKSAR. He also referred Mr CHEUNG to the Administration's written response (item 4) in Paper No. CB(2)1158/98-99(10).

5. Mr CHEUNG said that what the Administration "believed" to be appropriate could not be accepted as an answer. Moreover, the fact that PDB members also made the declaration could not be taken as a reason for requiring DC election candidates to make the declaration.

6. Mr CHEUNG further enquired whether the boundaries of Rural Committees (RCs) matched those of the Districts. Deputy Director of Home Affairs (DD(HA)) replied that the two sets of boundaries matched one another, except that there were three villages in the Kwai Tsing District which belonged to the Tsuen Wan Rural Committee. The Administration was considering whether a CSA was necessary to specify in the Bill which Rural Committee belonged to which District.

Adm

7. Mr CHEUNG asked whether there were legal problems for the Chairman of the Tsuen Wan RC to become an ex officio member of the Tsuen Wan DC as a result of votes cast by electors in Kwai Tsing. DD(HA) replied that the election of for a RC Chairman and that of for DC members were two separate elections. The Chairman asked the Administration to provide a written response as the same point had also been raised by the Legal Adviser earlier.

Adm

Strengthening the functions of the Secretary of a District Council
[Paper No. CB(2)1158/98-99(03)]

8. Mr Andrew CHENG highlighted the main points of the paper. He added said that similar to LegCo, a DC should be serviced by a Secretariat which was separate from the civil service, so as to enhance the independent status of the DC and also facilitate its work. He expressed dissatisfaction that the Administration had adopted the criteria that the example of LegCo would only be followed when it suited the Administration's purpose. If it did not (such as the establishment of an independent Secretariat), the Administration would put forward all sorts of excuses.

9. DD(HA) responded that the proposed amendment was not necessary as the present system was working well. Moreover, certain duties specified in the Bill werehad to be carried out by the Director of Home Affairs Designated Officer or the District Officer and not the Secretary of the DC. He could not see the relevance of appointing a non-civil servant as the Secretary as being more suitable to carry out the duties. He pointed out that the situation was completely different in the case of the LegCo Secretariat as the latter were given funds to employ its own staff. DS(CA)2 added that the present system had so far worked welleffectively and the DBs and PDBs were satisfied with it the system.

10. Mr Fred LI said that the CSA was proposed in the hope that the Administration would at least give some thought to how the Secretary of the DC could function more effectively. The change needed not be a completely independent Secretariat but something along the line of the Secretary of the Provisional Urban Council (PUC). He pointed out that although the Secretary of PUC was a civil servant, his appointment required the approval of the Chairman of PUC who also wrote the Secretary's performance appraisal. If the same arrangement applied to the Secretary of a the DC, it would enhance his accountability to the Chairman. Both he and Mr CHEUNG Man-kwong questioned whether the Administration had in fact asked every PDB whether they were happy with the present system.

11. DS(CA)2 replied that no dissatisfaction had been discerned or negative feedback received about the system in the day to day contacts with the PDBs. Mr CHEUNG expressed dissatisfaction that DS(CA)2 had changed his earlier answer from "PDBs were satisfied with the system" to the present one of "there was no dissatisfaction and no negative feedback". He reminded the Administration to be specific as their that the response they gave given that it would be recorded in the minutes.

12. Mr Andrew CHENG further said that main problem of staffing the DC Secretariat with government officers was that they had to side with the Administration and defend government policies. He asked whether the Administration would consult the 18 PDBs. DD(HA) responded that the Secretariat only handled the paper work of the PDB. The activities organized by PDBs required re were other support services which and these were provided by other staff of the District Office. As no problem had been raised about the present system, the Administration had no intention to of formally consulting the 18 PDBs on the need for change.

Functions of District Councils
[Paper No. CB(2)1158/98-99(05)]

13. Mr CHEUNG Man-kwong highlighted the points made in the paper.

14. Mr CHEUNG asked whether the phrase "matters affecting the well-being of the people in the District" was sufficiently broad to include "matters relating to food and environmental hygiene services". Deputy Secretary for Constitutional Affairs 3 (DS(CA)3) explained that the phrase "matters relating to food and environmental hygiene services" was added to reflect the significant concern of the public raised during the public consultation exercise on the review of district organizations conducted last year. It served to give a clear message of the enhanced role of the DCs in this aspect of work.

15. DS(CA)3 also referred to a suggestion made by some members that as the nature of activities carried out by the PDBs in the past was not limited to those detailed in clause 59, an amendment should be made to include such other types of activities. DS(CA)3 said that the Administration would consider and respond later.

16. Mr CHEUNG commented that "the significant concern" about matters relating to food and environmental hygiene services was a biased view as the consultation was carried out to serve the Administration's purpose of disbanding the two Municipal Councils. The consultation had not touched on other equally important issues such as housing, law and order, transport, etc. He did not object to the DCs advising on such matters but questioned whether it was appropriate and necessary to emphasize this function in the Bill. He emphasized that bills legislation, once enacted, would be in operation for a long time. They should therefore be properly drafted and unnecessary provisions should not be included. Mr Fred LI remarked that the phrase was added because the Administration had already made up its mind to disband the two Municipal Councils.

17. The Chairman asked whether the DC could still take on this function if the phrase was not included in the Bill. DS(CA)3 replied that there would not be any problem as the scope of clause 59 was very wide. Dr TANG Siu-tong suggested that the phrase be deleted since it would not make any difference.

18. Mr Andrew CHENG pointed out that adding the phrase could create problems of co-ordination of work between the DCs and the two Municipal Councils as the latter were still in existence.

19. DS(CA)3 said that the Administration could not agree to the amendments proposed by Democratic Party Members of the Democratic Party at the present stage.

Quorum
[Paper No. CB(2)1158/98-99(05)]

20. Mr CHEUNG Man-kwong informed members that the Democratic Party would like to withdraw its CSA on quorum for discussion by the Bills Committee for the time being as it needed more time to consider the issue.

Appointment of Members to Committees
[Paper No. CB(2)1158/98-99(05)]

21. Mr Andrew CHENG highlighted the points made in the second paragraph of his paper and queried why there was a need for a committee member appointed under clause 69(2) have to satisfy the requirements for candidature. DD(HA) explained that a DC could appoint committees to carry out any of its functions under clause. It was therefore appropriate to apply the same requirement for eligibility to committee members as they carried a similar level of responsibility to that of a DC member.

22. Mr Fred LI enquired whether there had been any problem with the appointment of committee members in the past. He pointed out that young people below not reaching the age of 21 would no longer be eligible to be appointed as co-opted members of committees of DCs. DD(HA) responded that the clause would only apply to members of committees appointed under 69(1). A DC could make provisions in its standing orders to set up working groups under a committee and decide who to invite to join such groups.

23. Mr Howard YOUNG expressed concern that the meaning of committee was too broad and might be confused with, say, the organizing committee of a one-off event. DD(HA) reiterated that the appointment of committees and appointment of members to committees were clearly stipulated in subclauses 69(1) and 69(2) respectively. The standing orders of a DC would also set in detail the procedures for the appointment of co-opted members.

24. Mr Andrew CHENG opined that the new requirement would weaken the participation of young people in the work of DCs. He asked whether the PDBs had been consulted on this proposal. Mr Fred LI also asked how many existing committees under PDBs had tertiary students aged between 18 to 20 as co-opted members. DD(HA) responded that the Administration did not have such information. but However, he believed that most co-opted members were above this age range. He stressed that what was important was the participation but not the capacity. Young people could still play a role in the work of a DC, such as becoming members of working groups. He further informed members that there had in fact been concern about the background of some co-opted committee members appointed in the past, hence the need to set clearer eligibility criteria. He hoped that the Bills Committee would support the proposal.

II. Committee Stage amendments proposed by Mr LAU Chin-shek
[Paper No. CB(2)1118/98-99(04)]

25. The Chairman referred members to the Committee Stage amendments (CSAs) proposed by Mr LAU Chin-shek who was not a member of the Bills Committee. Mr CHAN Kam-lam suggested that Mr LAU Chin-shek be invited to explain his CSAs to the Bills Committee. Mr LEE Kai-ming said that the Administration should also respond to Mr LAU's proposed CSAs.

26. Mr Andrew CHENG said that as Mr LAU was not present at the meeting, he would explain Mr LAU's CSAs to facilitate the meeting's discussion. Referring to the paper, Mr CHENG said that Mr LAU had proposed the following arrangements -

1. clauses 3, 4, 5 and 8: any future change to the declaration of districts and establishment of DCs should be presented in the form of a resolution to the Council for approval;

2. clause 6: in making an order to declare the constituencies, CE in Council must "follow", and not just "have regard to", the recommendations made by the EAC;

3. clauses 63 and 80: it should be clearly stated that an order to change the procedure to elect Chairman or Vice Chairman of a DC was subsidiary legislation;

4. clause 79: it should be clearly stipulated that the regulations were subsidiary legislation; and

5. clause 83: the clause should be deleted.

27. DS(CA)2 responded that -

1. clause 8 of the Bill provided that CE in Council could amend Schedules 1, 2 and 3 in the form of orders. The orders thus made would be subject to negative vetting by LegCo;

2. the proposed provisions in clauses 63 and 80 were appropriate, hence needed not be changed; and

3. regarding clause 83, the Administration would, as explained to the Bills Committee at an earlier meeting, move a CSA to subclause (1) to delete "in relation to the performance of its functions" and substituting ", in the performance of its functions, in relation to matters which appear to the Chief Executive to affect add the words "in the public interest".

28. Mr CHEUNG Man-kwong said that Mr LAU was concerned that if a certain order or regulation was not specified to be subsidiary legislation in the principal ordinancelegislation, it needed not be presented to LegCo for scrutiny. Mr CHEUNG cited the example of the Maximum Fares for the Licensed Ferry Service between Discovery Bay and Chek Lap Kok which was published as a Government Notice in the gGazette on 23 October 1998. As it was not tabled in Council, Members did not have the opportunity to scrutinize it.

29. Principal Government Counsel (Elections) PGC(E) responded that he and the Legal Adviser to LegCo were not in any disagreement that the orders and regulations to be made under the Bill, after enactment, were subsidiary legislation which were required to be tabled in Council, hence subject to Members' scrutiny.

30. Referring to the example cited by Mr CHEUNG Man-kwong relating to ferry fares, the Legal Adviser explained that the disagreement with the Administration was over the notice a different issue i.e. whether notices made by the Commissioner for Transport to determine the maximum fares that could be charged on any licensed service was whether or not the General Notice in question had legislative effect.

31. The Legal Adviser further explained that the subsidiary legislation made by the Administration was subject to either the negative or the positive vetting procedure, depending on how the making of the subsidiary legislation was provided in the principal ordinance. Under the negative vetting procedure, the Council had an opportunity to amend any subsidiary legislation, within certain time as provided in section 34 of the Interpretation and General Clauses Ordinance (Cap. 1). However, subsidiary legislation could take immediate effect once it was gazetted. Under the positive vetting procedure, the subsidiary legislation would have to be presented as a resolution for approval in Council, in accordance with section 35 of Cap 1. The subsidiary legislation would not come into effect without the prior approval of LegCo. He added that it was a policy issue rather than a legal issue matter for Members to decide how they wished to exercise supervisory control over the making of subsidiary legislation to be made under this Bill.

32. Mr LEE Wing-tat said that the negative vetting procedure should only apply to those items of subsidiary legislation which were purely technical in nature or which were for implementing an existing policy. Any subsidiary legislation which concerned policy issues should be subject to the positive vetting procedure so that the Council had a chance to debate the legislative proposal before deciding whether or not to give approval. He expressed concern that the Administration's proposal for to adopt the negative vetting procedure for the orders and regulations to be made under the Bill subject to the negative vetting procedure was setting an unsatisfactory precedent. He asked whether the Administration had any internal guidelines on the making of subsidiary legislation. DS(CA)2 reiterated that the proposed arrangement was appropriate and that he had nothing to add.

33. Mr LEE Wing-tat expressed dissatisfaction that the Administration failed to answer his questions. DS(CA)2 replied that he had tried his best to respond to Members' questions.

34. Referring to the phrase "must have regard to" in clause 6(2), Mr LEE Wing-tat asked under what circumstances would CE in Council not follow the recommendations of the Electoral Affairs Commission (EAC). DS(CA)2 replied that since the clause provided that the order was made by CE in Council, the power rested with CE in Council.

35. The Chairman suggested that the meeting should resume clause by clause examination of the Bill while waiting for Ms HO Sau-lan who had requested for her CSAs to be discussed around 10:30 am.

III. Clause by clause examination

Clause 71

36. In response to Mr LEE Wing-tat's questions on what government officers would be appointed to be an Assistant Electoral Registration Officer (AERO) and whether the officer had any powers to exercise in relation to the register of electors, DS(CA)2 replied that only senior ranking officers would be appointed as AEROs who assisted the Electoral Registration Officer (ERO) in discharging his duties or acting as the ERO in the latter's absence. He added that a person could lodge a claim or objection to the ERO in relation to entries in the provisional register or the omission list. The Revising Officer, who was a judicial officer appointed by the Chief Justice, would then rule on such claims or objection, in accordance with section 34 of the LegCo Ordinance.

37. Mr LEE Wing-tat asked why the procedure described by DS(CA)2 was provided in the LegCo Ordinance and not in the DC Bill. PGC(E) explained that powers were given to the EAC to make regulation relating to the registration of electors which included claims and objections. He believed that the EAC would make similar regulations for the purposes of the DC elections.

38. DS(CA)2 referred members to sections 18 and 20 of Schedule 6 and further explained that the recent electors' registration exercise was conducted based on the LegCo Ordinance as the DC Bill had yet to be passed by LegCo. He added that in accordance with section 32(1)(b) of the LegCo Ordinance, the ERO must publish a final register on or before 31 March 1999. According to clause 30 of the Bill, the ERO must not later than two months before the date of the election compile and publish on the basis of this final register, a register for the DC s election, indicating the corresponding constituencies of individual electors.

39. Mr LEE pointed out that in the last DB election, the voting results in some Districts were very close, the margin being a few votes. He expressed concern that there had been cases where a number of electors were registered under the same address. He asked the Administration to provide a paper on the preparation of register of electors for the DC election and the procedure taken to question information published in the register. DS(CA)2 undertook to provide a written response on the procedures.

Adm

IV. Committee Stage amendments proposed by Ms Ho Sau-lan
[Paper No. CB(2)1158/98-99(02)]

Disqualification of Members

40. Referring to her proposed amendment to clause 24(5), Ms HO Sau-lan explained that it would be very unfair to the electors if the DC member they had elected failed to attend the DC meetings which were held once every two months only. She therefore proposed that a member should be disqualified from holding office if he was absent from meetings for four, instead of six, consecutive months. She considered that four months was a sufficiently long time for a member to sort out whatever business that had prevented him from attending DC meetings.

41. Ms Emily LAU raised the following questions -

1. how a PDB member at present obtained the PDB's consent if he had to be absent from PDB meetings for six consecutive months;

2. what criteria were used by the PDBs in deciding whether or not to give consent;

3. whether meetings referred to in clause 24(5) included special meetings; and

   how many members so far had been disqualified from holding office on the grounds of absence from meetings for six consecutive months.

42. In response to Ms LAU's questions, DD(HA) made the following points -

1. a prior application had to be made to the PDB which would decide at a formal meeting whether or not to give consent, having regard to the reasons put forward by the member concerned;

2. it was up to the PDB to determine the criteria used; the most common reasons given in applications for absence from meetings were not being in Hong Kong on the day of meeting, illness or other commitments;

3. meetings included special meetings; and

4. the Administration would provide the figures a written response on the number of members who had been disqualified for reason of being absent from meetings for six consecutive months, after the meeting.

43. DD(HA) further pointed out that a six months' period was appropriate as a DC only met once every two months, there might only be two meetings within a six months' period. He added that there had not been any feedback from the PDBs that a six months' period was not appropriate.

44. In reply to Mr LEE Wing-tat, DD(HA) said that the requirement for a PDB to hold a meeting once every two months was not stipulated in law, but in the standing orders of a PDB. Sometimes, a PDB might not meet for more than two months if there was a break in between.

45. Ms Emily LAU pointed out that a member might not be able to submit a prior application in urgent cases. DD(HA) clarified that the consent could be obtained before the end of the six months. Ms LAU commented that the arrangement was confusing.

46. Mr TSANG Yok-sing gave an example of a member attending a meeting in December, missed those for February and April, but attended the one in June. Since there was no meeting in January, it could be argued that the six months' period should only be counted as commencing in February, hence the member had only been absent for four months. It could further be argued that since there was no meeting scheduled for May, the member had only been absent for two consecutive months.

47. DD(HA) responded that the six months' period should be counted as commencing from the day immediately following the date of the meeting which the member last attended.

48. Mr Andrew WONG asked whether a meeting included one which could not be held as scheduled because of a lack of quorum.

49. Mr LEE Wing-tat pointed out that if a DC member missed a meeting in January and could not attend the ones in March and May as well, he would have to make an application for the DC to give consent for his absence at the March meeting. If he failed to make an application prior to the March meeting, he would not have another opportunity to seek the DC's consent within the stipulated six months' period.

50. PGC(E) replied that the provision had been used without confusion for a number of years. However, he admitted that there could be some ambiguity. DS(CA)2 agreed to consider members' views and provide a written response.

51. Ms HO Sau-lan requested the Administration to provide a paper giving details of the provisions made in the standing orders of the 18 PDBs in respect of the following matters -

1. procedure for calling of meetings;

2. voting procedure on application for absence from meetings; and

3. arrangement for breaks.

Functions of District Councils

52. Ms HO Sau-lan referred members to her proposed CSA to add "to receive and handle complaints from Hong Kong residents" to clause 59. Ms HO explained that it was a waste of public funds if a DC member only attended DC meetings twice a month and did nothing else, including not setting up offices to handle complaints lodged by the public.

53. DD(HA) replied that as there were ample channels for the public to lodge complaints of various nature, it would not be necessary to specify such a function for DCs. Moreover, every PDB operated a "meet-the-public" service and most members had also set up their own ward offices.

54. Mr LEE Wing-tat expressed support for Ms HO's CSA. He pointed out that the PDBs only arranged for members to meet the public once a week because of lack of resources. Usually few complaints were received because members of the public were required to come during office hours. If such a function was stipulated in law, the Home Affairs Bureau would have to provide more resources.

55. DD(HA) reiterated the following points -

1. through the "meet- the public" service, complaints were handled by the PDB members on a roster basis;

2. many PDB members had set up their own ward offices; and

3. there were already many complaints channels.

56. Ms Emily LAU said that she would propose to make the provision even stricter by requiring members to "regularly" meet residents to receive and handle their complaints. She expressed dissatisfaction that Government was protecting those members who were receiving remuneration of over $17,000 per month and not performing their duties. She asked whether the Administration was aware of such a problem and pointed out that . bBy stipulating such a function in the Bill, it would be a breach of law oif DC members failed to carry it outwork. She found it regrettable that the Administration had no expectations of the DC members and did not care whether or not they were fulfilling their duties.were happy that they merely held the office in name and did nothing.

57. Both Mr James TIEN and Mr Andrew WONG asked Ms HO to clarify whether her CSA was for the DCs or for the DC members to take on the function of receiving and handling complaints, since the heading of clause 59 was "Functions of DCs". Ms HO Sau-lan explained that both the DCs and DC members should take on the function.

58. Mr Andrew WONG suggested that the functions of DC members be provided in a separate clause, if considered necessary, and not under clause 59. He expressed doubts as to whether Miss HO's proposal would be effective in forcing BDC members to carry out the work of handlinge public complaints. He said that ultimately it would be for the public to judge whether a member was doing his job properly, taking account of the members' his overall performance.

59. Ms HO Sau-lan said that if those hardworking members had not operated their ward offices, many of the complaints would have ended up being taken on by LegCo or the Ombudsman. She asked whether the Administration had done any analysis of the nature of cases handled by the ward offices of PDB members. DD(HA) responded that it would be difficult to categorise which complaint should be handled by which organization. It would be for the complainant to decide which organization to approach. He added that the Government had no power to force PDB members to operate ward offices. However, since they held a public office, the public would monitor their performance.

60. Mr LEE Wing-tat asked whether there were sanctions against a member who refused to serve as a roster member for "meet-the-public" service. DD(HA) replied that this aspect of work was determined by the PDB itself and not stipulated in the standing orders.

61. Ms HO Sau-lan asked whether the standing orders stipulated any requirement for a member to join a minimum number of committees. DD(HA) replied in the negative.

New clause 70A - Financial Accounts of District Councils to be Audited by Director of Audit
[Paper No. CB(2)1158/98-99(02)]

62. Ms HO Sau-lan said that the financial accounts of DCs should be vetted by the Director of Audit to boost their accountability. It was important that the Director of Audit had a chance to examine whether funds were used by DCs in a cost-effective manner and that there was no abuse.

63. DD(HA) replied that the proposal made by Ms HO was inappropriate and unnecessary as the DCs did not have any assets and liabilities. District Board funds were included in the accounts of the Home Affairs Department and were allocated by the Director of Home Affairs each year. For the current financial year, the funds allocated to PDBs amounted to $123 million. He added that the spending of each government department was already supervised by the Director of Audit, and the internal audit group of the Home Affairs Department also examined the annual expenditure of the 18 PDBs.

64. Mr LEE Wing-tat pointed out that there were loopholes in the supervision over the spending of public money in the DBs. He cited the following situations -

(a) certain types of activities were given a standard rate, regardless of whether the event(s) actually required so much money;

(b) contracts for services or goods were awarded to companies owned by friends or relatives of PDB members. Moreover, false quotations were sometimes used to ensure that a particular company was awarded the contract; and

(c) even if quotations were obtained, they were false ones; and

(cd) money would was spent freely towards the end of the financial year because there were savings.

65. Mr LEE Wing-tat added that he was aware that the police had investigated a number of cases regarding awarding of contracts to service companies but without success.

66. DD(HA) replied the standard allocation arrangement was intended to make it covenient for orgainzations such as mutual aid committees, schools, voluntary agencies etc., to apply for PDB funds. As for procurement of services or goods, quotations were obtained in accordance with existing government rules and regulations. He reiterated that Miss HO's proposed CSA was not necessary as the Director of Audit already had the power and responsibility to audit funds allocated to the Home Affairs Department, including those for use by the future DCs.

V. Way forward

67. DS(CA)2 thanked members for their efforts in scrutinizing the Bill. He explained that in accordance with the Rules of Procedure of LegCo, the Administration had to give notice on the 26 January 1999 for the resumption of the Second Reading debate on the Bill on 10 February 1999.

68. Mr CHEUNG Man-kwong said that members had only examined clauses 27 to 71, and some of the CSAs proposed by Members. The scrutiny of the Bill was far from being completed.

69. Mr LEE Wing-tat requested the Administration to defer the resumption of the Second Reading debate on the Bill to 10 March 1999. He would not agree to the Chairman reporting to the House Committee on 29 January 1999 to enable resumption of Second Reading debate of the Bill on 10 February 1999.

70. The Chairman reminded members that the Administration had the right to give notice. However, the Bills Committee would continue to meet until scrutiny work had been completed. He said that the Clerk would work out the meeting schedule in consultation with members.	Clerk

71. Mr CHEUNG Man-kwong asked that in deciding the meeting dates, it should be borne in mind that different political parties or /groups would be able to send one to two Members to attend the meetings.

72. Mr LEE Wing-tat suggested that the Chairman should report the present state of affairs of the Bills Committee to the House Committee on 29 January 1999.	Chairman

73. The meeting ended at 12:15 pm.

Legislative Council Secretariat
14 April 1999