Legislative Council

LC Paper No. CB(2)2655/98-99
(These minutes has been
seen by the Administration)

Ref : CB2/BC/14/98

Bills Committee on Factories and Industrial Undertakings (Amendment) Bill 1999

Minutes of Meeting held on Tuesday, 30 March 1999 at 8:30 am in Conference Room B of the Legislative Council Building

Members Present:

Hon Ronald ARCULLI, JP (Chairman)
Hon Kenneth TING Woo-shou, JP
Hon Cyd HO Sau-lan
Hon LEE Cheuk-yan
Hon LEE Kai-ming, JP
Dr Hon LUI Ming-wah, JP
Hon HUI Cheung-ching
Hon CHAN Wing-chan
Dr Hon LEONG Che-hung, JP
Hon Howard YOUNG, JP

Members Absent:

Hon HO Sai-chu, JP
Hon LEUNG Yiu-chung
Hon Andrew CHENG Kar-foo

Public Officers Attending:

Mr Herman CHO
Principal Assistant Secretary (Education and Manpower)

Mr Franco KWOK
Assistant Secretary (Education and Manpower)

Mr William SIU
Assistant Commissioner for Labour

Ms Lonnie NG
Senior Government Counsel
Clerk in Attendance:
Mrs Constance LI
Chief Assistant Secretary (2) 2
Staff in Attendance:
Mr Arthur CHEUNG
Assistant Legal Adviser 5

Mr Stanley MA
Senior Assistant Secretary (2) 6

I. Matters arising
[Paper No. CB(2)1595/98-99(01)]

1. Members noted that the Administration had just provided a written response to the issues raised at the meeting on 9 March 1999.

II. Meeting with the Administration

2. The Chairman invited members to go through the Administration's response [Paper No. CB(2)1595/98-99(01)] and raise questions on the paper.

Suggestion of providing the training course free of charge

3. The Chairman informed the meeting that the Administration had explained in its paper the reasons for charging $100 for attendance of the training course organized by the Construction Industry Training Authority (CITA). Members also noted that CITA was prepared to waive recipients of the Comprehensive Social Security Assistance Scheme from paying the course fees. Referring to the Administration's argument that providing the training free of charge would increase absenteeism resulting in wastage of resources, the Chairman asked whether the enrolment fee was paid before or after the course. Principal Assistant Secretary for Education and Manpower (PAS/EM) said that he would have to check with CITA, but he envisaged the fee was paid at the time of enrolment. PAS(EM) added that CITA was already heavily subsidizing the training courses through the levy from the construction industry. To provide the training course free of charge would increase the financial burden on CITA, since there were still 40 000 construction workers requiring training.

4. Mr Kenneth TING agreed that the requirement to pay training fees would increase attendance. Nevertheless, he suggested that employers could subsidize the course fees and seek reimbursement of the fees when the worker had completed training. Mr CHAN Wing-chan remarked that the attendance rate would be higher if the training arrangement was made by trade associations or unions. In this connection, the Chairman commented that the suggestion of reimbursement of course fees might have implications on the administration costs. PAS/EM undertook to relay members' suggestion to CITA for consideration and provide a response later. (Post-meeting note : The Administration's response was circulated to members vide Paper No. CB(2)1716/98-99(07) on 16 April 1999.)Admin

Statistics on accidents

5. Mr LUI Ming-wah questioned the basis of the Administration's statement that, between 1995 and 1997, the average annual accident rates in the public sector construction sites were 78% lower than that of the private sector. He asked the Administration to justify its statement by providing a breakdown of the accident statistics by type of industry and by nature of accidents.

6. The Chairman pointed out that the accident rate of public sector construction sites had increased in 1998 due to the shortening of construction time for public housing estates from three years to 21 months. To enable members to have a better understanding of the nature and causes of the accidents, he advised the Administration to provide an analysis of the accident statistics, including the severity of these accidents. Assistant Commissioner for Labour (AC for L) agreed to provide an analysis on the accident statistics, but pointed out that the Labour Department figures were categorized by the causes, rather than the severity, of reported accidents. (Post-meeting note : The Administration's response was circulated to members vide Paper No. CB(2)1716/98-99(07) on 16 April 1999.)Admin

7. Mr LUI Ming-wah enquired about the reasons for the steady accident rates of the four major industrial sectors and container handling industry over the first three quarters in 1998. AC for L responded that he did not see any particular reason for the steady trend. The Chairman suggested and PAS(EM) agreed to provide statistics in the past three years to see if there were seasonal variations over a longer period. (Post-meeting note : The Administration's response was circulated to members vide Paper No. CB(2)1716/98-99(07) on 16 April 1999.)Admin

8. Referring to the eight fatal accidents in the mining and quarrying, utilities, transport and servicing industries in the first three quarters of 1998, Mr CHAN Wing-chan asked about the distinction between industrial and occupational accidents. He had the impression that there were more fatal accidents involving transport and servicing industries in 1998. AC for L responded that the classification depended on the circumstances of each case. The accident statistics under the transport industry referred to industrial accidents related to the transportation of goods rather than traffic accidents as such.

9. Mr HUI Cheung-ching asked about the reason for the higher accident rate in the industrial undertakings in the third quarter of 1998. AC for L responded that it might be caused by the heavy rains in June-August 1998. He agreed to provide a breakdown of the figures by type of accidents. (Post-meeting note : The Administration's response was circulated to members vide Paper No. CB(2)1716/98-99(07) on 16 April 1999.)Admin

The Fourth Schedule of the Factories and Industrial Undertakings Ordinance10. Members noted that the Administration had no strong views on members' proposal to amend the Fourth Schedule by way of positive vetting of the Legislative Council. The Chairman said that the arrangement would enable Members to have more time to examine any proposed addition of specified industrial undertakings for the purpose of mandatory safety training requirements. The Chairman suggested and PAS(EM) agreed that the Administration should move a Committee Stage amendment to this effect.Admin

The proposed Safety Management Regulation

Application of the Regulation to the manufacturing industry

11. Mr LUI Ming-wah pointed out that no fatal accident occurred in the manufacturing industry during the first three quarters in 1998. In view of the lower accident rate of manufacturing industry and its different operation from the construction and cargo handling industries, he was of the view that the manufacturing industry should not be subject to the proposed Factories and Industrial Undertakings (Safety Management) Regulation. He was concerned that, under the proposed Regulation, most of these factories, being large establishments employing more than 100 employees, would be required to adopt 10 of the 14 process elements of the safety management system. He said that the requirement would increase the operating costs of the manufacturing industries, and that the proposed Regulation should focus on the high-risk industries rather than industries with a low accident rate.

12. PAS(EM) explained the Government policy of self-regulation by the industry. He said that there was limitation in the present inspection and enforcement system of the Labour Department, and that the Regulation was proposed with the aim of promoting the concept of safety management among employers and employees. The implementation of the 14 process elements in factories and industrial undertakings would provide a structure for effective safety management. Moreover, the establishment of a safety committee would instil a sense of commitment among workers in the process of identifying and implementing safety measures. Once the system was put in place, the proprietor would only need to assign an officer to carry out periodic safety reviews and audits, and there should not be much additional operating costs. PAS(EM) stressed that the system would enhance safety awareness which would lead to a reduction in accident rate, increased productivity and less pay-outs for compensation. In the long run, the decreased accident rate might also reduce insurance premium. In this connection, Dr LEONG Che-hung remarked that, according to the market practice, the insurance premium would unlikely be lowered even the accident rate had decreased.

13. Mr LUI said that many large factories had already put in place some form of safety management system. As such, he was strongly of the view that these factories should be subject to less stringent requirements under the Regulation. AC for L reiterated that the Government strategy of industrial safety had switched from inspection and prosecution to self-regulation by the proprietors and the workforce. The Regulation was to provide a legislative framework for proprietors to establish a safety management system, the implementation of which would require the joint efforts of the proprietors and workers. To allow time for the industries to prepare for adoption of all the 14 process elements, a phased implementation was proposed, with the ultimate aim of extending the system to smaller establishments which were exempted in the initial stage. For those large establishments which had already implemented a safety management system, the proposed Regulation would help refine their system by including a review and audit process. PAS(EM) added that these large factories should not find much difficulties in complying with the proposed Regulation.

14. Responding to Mr LUI's earlier comment, AC for L said that the accident rate of the manufacturing industry was not low although the accidents might be less severe. AC for L further advised that Labour Department would adopt a flexible approach in assessing the application of the process elements in the designated industrial undertakings, based on the safety reviews and audit reports submitted to Labour Department.

Application of the Regulation to the public sector

15. Mr HUI Cheung-ching questioned why the public sector was not bound by the proposed Safety Management Regulation. PAS(EM) responded that although most legislation did not bind the Government, the Government had internal guidelines requiring civil servants to comply with the legislative requirements, including those under the Factories and Industrial Undertakings Ordinance. He pointed out that few Government premises fell within the definition of factories and industrial undertakings. Nevertheless, Labour Department also inspected Government premises and workshops at regular intervals to give advice on safety measures. He stressed that if an industrial accident occurred in Government premises, the public officer responsible would have to face disciplinary proceedings if found negligent in discharging his duties. Moreover, persons who suffered a loss in the accident could institute civil proceedings against the Government.

16. Referring to a recent fatal accident involving a marine police officer, Mr LEE Cheuk-yan said that public sector employees should have the same safety protection in workplaces as private sector employees. Dr LEONG Che-hung also expressed reservation that Government was exempted from the occupational health and safety legislation. The Chairman indicated support in principle that both public and private sectors should be bound by the legislation. He pointed out, however, that most legislation at present did not bind Government probably because Government was also the law enforcement agency.

Application of the 14 process elements in industrial undertakings

17. Mr Kenneth TING asked about the application of the process element concerning the evaluation, selection and control of sub-contractors in small establishments which did not employ sub-contractors. Miss Cyd HO also inquired whether the proprietor or principal contractor should be responsible for the establishment and implementation of a safety management system by the sub-contractor.

18. In response, AC for L explained that establishments or sub-contractors employing less than 50 employees would not be subject to the proposed Safety Management Regulation. As regards the process element on evaluation, selection and control of sub-contractors, it would only apply to those designated industrial undertakings which employed sub-contractors. The purpose was to require a proprietor to put in place a procedure for assessing the safety performance of his sub-contractors.

19. The Chairman further asked about the application of the Regulation if there were several sub-contractors, each employing less than 50 staff, but working on the same construction site. AC for L clarified that the proposed Safety Management Regulation would not apply to a sub-contractor employing less than 50 workers. However, these sub-contractors were still regulated by provisions in other relevant legislation concerning industrial safety.

20. Mr LEE Cheuk-yan said that it was not uncommon for several sub-contractors to work on a construction site, where the total staff establishment might exceed 100 although the establishment of individual sub-contractor was below 50. He was concerned whether the contractor of a higher level or the principal contractor would be subject to the proposed Safety Management Regulation in these cases. Ms Cyd HO also expressed concern that a loophole might exist if neither the principal contractor or the sub-contractor(s) would be held responsible for implementing a safety management system when the total staff establishment was 50 or more.

21. PAS(EM) acknowledged members' concern. He advised that the principal contractor of a construction site would need to ensure compliance with the safety management system by his sub-contractors, if the aggregate number of workers on the site was 50 or more.

22. On the application of the 14 process elements, Dr LEONG Che-hung was of the view that while there should be a set of general principles on safety management, different trades should be assigned different sets of process elements appropriate to their operation. In this connection, he was of the view that the type of industry, rather than the size of the workforce, should be the determining factor for adoption of the process elements. He said that some industries, by nature of their operation, were more dangerous than the others and they should be required to adopt all the 14 process elements. For some other industries, the provision of a protection of occupational health programme might suffice.

23. Mr CHAN Wing-chan also enquired about the timetable for implementing the remaining 4 process elements by undertakings employing 100 or more workers. AC for L responded that a longer lead time was allowed for preparation for the adoption of those elements which would require more technical know-how and expertise in implementation. Mr CHAN further asked whether only those undertakings employing more than 200 workers should be required to adopt all the 14 elements. PAS(EM) explained that with some experience, those undertakings employing 100 or more workers would be capable of implementing the remaining 4 elements. He was not in favour of adding another tier above the proposed three-tier system, as this would reduce the number of undertakings adopting a comprehensive safety management system covering all the 14 elements.

24. PAS(EM) supplemented that the concept of safety management system was not new to the construction industry, the utilities companies and some large industrial undertakings. He informed members that the Hong Kong and China Gas Company Limited, Mass Transit Railway Corporation, Shell Company Limited and China Light & Power Company Limited had already implemented a safety management system covering the 14 elements. Moreover, it had been a requirement for public works projects to adopt a safety management system and these had demonstrated a better safety performance than other industries on the average.

25. Responding to Dr LEONG's enquiry, PAS(EM) clarified that "personal protection programme" referred to those immediate protection measures such as the provision of protective equipment for workers. As regards the "programme on protection of occupational health", it referred to long term monitoring measures to eliminate occupational diseases caused by continuous and excessive exposure to a hazardous working environment.

26. Mr LUI Ming-wah questioned the rationale for devising a three-tier system based on the size of the workforce in a factory or industrial undertaking. In this connection, he requested a more detailed breakdown, by type of industry, of the number of factories and industrial undertakings employing more than 100 workers, and those employing between 50-99 workers. AC for L undertook to provide a detailed breakdown. Responding to members' concern about the three-tier system, PAS(EM) said that a phased implementation was proposed to enable the industries affected to get accustomed to the new system, and to allow sufficient safety practitioners and medical professionals to be trained up for taking up these new duties. The Administration planned to review the implementation of the safety management system one year after the Regulation had come into operation. It would then decide the appropriate time to extend the requirements to industrial undertakings employing less than 50 workers. Admin

Date of next meeting

27. Members agreed to hold the next meeting at 4:30 pm on 20 April 1999. Members also agreed to invite deputations from the construction and container handling industries, employers and employees associations, trade unions and relevant professional bodies to present their views on the Bill and the proposed Regulation at the meeting.

III. Any other business

28. There being no other business, the meeting ended at 10:30 am.

Legislative Council Secretariat
22 July 1999