Ref : CB1/PL/PS/1

Members present :

Hon TAM Yiu-chung, JP (Chairman)
Hon Mrs Sophie LEUNG LAU Yau-fun, JP (Deputy Chairman)
Hon LEE Cheuk-yan
Hon LEE Kai-ming, JP
Hon CHEUNG Man-kwong
Hon CHAN Kwok-keung
Hon CHAN Wing-chan
Hon Andrew WONG Wang-fat, JP
Hon Howard YOUNG, JP

Members attending :

Hon NG Leung-sing
Hon Amborse CHEUNG Wing-sum, JP

Member absent :

Hon Ambrose LAU Hon-chuen, JP

Public officers attending :

Miss Denise YUE
Secretary for the Treasury

Mr LAM Woon-kwong
Secretary for the Civil Service

Ms Anissa WONG
Deputy Secretary (Civil Service)1

Mrs Susan MAK
Deputy Secretary (Civil Service)3

Clerk in attendance :

Miss Salumi CHAN
Chief Assistant Secretary (1)5

Staff in attendance :

Mr Matthew LOO
Senior Assistant Secretary (1)7

I. Review of the system of declaration of investments/interests by civil servants with reference to the case of the Commissioner of Inland Revenue
(LC Paper No. CB(1) 1606/98-99(01) --Paper from the Administration
LC Paper No. CB(1) 1606/98-99(02) --Civil Service Bureau (CSB) Circular No. 8/98 issued by the Administration on 18 September 1998)

Purpose of the special meeting

The Chairman advised that the special meeting was held to review the system for the declaration of investments/interests by civil servants with reference to the case of Mr WONG Ho-sang, Commissioner of Inland Revenue (CIR).

Briefing by the Administration

2. The Secretary for the Civil Service (SCS) advised that a comprehensive review of the system for declaration of investments by civil servants had been conducted in 1998. A revised system was then introduced, after consultation with the Independent Commission Against Corruption (ICAC), the Department of Justice, the Departmental Management and the staff side of the Central Consultative Councils. Details of the revised guidelines were contained in CSB Circular No. 8/98 issued on 18 September 1998. Bureaux and departments were encouraged to draw up supplementary declaration requirements specific to their operational needs. Officers classified under Tiers I and II of the revised declaration system were required to report all their investments in and outside Hong Kong, and report any possible conflict of interest to their supervisors. The onus of reporting rested with individual officers. In this connection, CSB had been working closely with Heads of Departments (HoDs) and ICAC to promote the Civil Service Integrity Programme to enhance awareness of the standard of integrity expected of a civil servant and ensure the adequacy and clarity of the guidelines.
3. As regards the case of Mr WONG Ho-sang, SCS advised that the Chief Executive (CE) had directed the Director of Audit (D of A) to examine the relevant files since April 1996 to see if relevant Ordinances and internal directions and instructions had been duly observed. D of A had undertaken to complete the examination within one month for submission of a report to CE.

Discussion with the Administration

4. Mr CHEUNG Man-kwong considered it inadequate to rely on individual officers to report any conflict of interest between their official duties and investments. If individual officers did not report such information, there was no way in which the Administration would get to know about it, except reported by the media or other persons. To plug the loophole, Mr CHEUNG suggested that:

1. all HoD posts be classified as Tier I posts so that the officers concerned would be required to report their investments in and outside Hong Kong on an annual basis and register their financial interests for public inspection; and

2. all officers classified under Tier I would be subject to random checking so that any of them who had failed to report as required would be made known.

5. Mr Andrew WONG supported Mr CHEUNG's suggestion in paragraph 4(a) above.

6. In response, SCS said that the Administration would consider Mr CHEUNG Man-kwong's suggestion of classifying all HoD posts as Tier I posts, but would have reservations on his suggestion of random checking. SCS added that the Administration had in fact sought legal advice and was advised that under the existing legal system, only the law enforcement officers, such as officers of the Police Force or ICAC, who had reasonable doubt on specific members of the public could conduct investigation on the investments and properties of these individuals. It was therefore inappropriate for the Administration, without reasonable doubt, to check the investments and properties of civil servants and their spouses.

Admin

7. Mr CHEUNG Man-kwong however was not convinced of SCS's explanation. He pointed out that post-secondary students applying for grants and loan were subject to random checking so that false declaration could be made known. He queried why the same could not be done on Bureau Secretaries and HoDs in respect of declaration of investments. SCS said that he was not in a position to comment on the legality of the measures cited by Mr CHEUNG. SCS however reiterated that the Administration had reservations on this suggestion and that a proper balance had to be struck between public interests and the protection of civil servants' privacy. If a civil servant failed to report his investments or any possible conflict of interests, he had to face serious consequences, such as disciplinary and/or legal proceedings.
8. Mr LEE Cheuk-yan and Mr Andrew WONG referred to the declaration forms attached in Annex III to CSB Circular No. 8/98 and pointed out that the forms mainly focused on the declaration of investments by the civil servants themselves. They were of the view that information on the spouse of an officer was also important in assessing whether there was any conflict of interest. At present, the civil servant concerned was only required to provide in the declaration form the information on the "occupation" of the spouse. Mr LEE considered that information on the "investments" of the spouse should also be provided.

9. Mr Andrew WONG considered that if the spouse was a partner or executive director of a company, further information of the company, such as nature of its business, should be provided. SCS pointed out that apart from the detailed guidelines contained in CSB Circular No. 8/98, explanatory notes were provided for each of the three declaration forms attached in Annex III to the circular. In the explanatory notes for the second and third forms (GF 389 (B) and (C)), for example, it was stated that if interests in a private company were included, a brief indication of the nature of its business and the officer's shareholding and names of other shareholders, etc., should be given. The officers concerned, if in doubt, should consult their supervisors or the Departmental Management or CSB. Nevertheless, SCS undertook to consider Mr Andrew WONG's views so as to further improve the declaration system.

Admin

10. Mr LEE Cheuk-yan asked whether the Administration would provide guidelines tailor-made for each individual department. SCS advised that out of a total of 70 or so departments, 23 departments had already issued their own additional guidelines. The Secretary for the Treasury (S for Tsy) added that the supplementary guidelines for the Inland Revenue Department (IRD) had been issued in December 1998. In essence, it was stated that an IRD officer should avoid dealing with files where his spouse had been connected with the preparation of the returns in a professional or representative capacity. She undertook to provide the Panel with a copy of IRD's supplementary guidelines. Responding to the Chairman, S for Tsy undertook to consider the need to review the guidelines in the light of the case of CIR.

Admin

(Post-meeting note : IRD Circular No. 27/98 on "Conflict of Interest" was circulated to members vide LC Paper No. CB(1) 1634/98-99 on 30 June 1999.)

11. As regards the case of Mr WONG Ho-sang, Mr LEE Cheuk-yan noted that D of A would only examine the files submitted or represented by the company owned by Mr WONG's wife to see if any of them had been dealt with personally by Mr WONG since April 1996. It seemed that the focus of the examination was on whether there had been any direct conflict of interest. Mr LEE was concerned that there might have been indirect conflict of interest and wondered how the Administration would deal with it. SCS responded that as the case was being investigated by D of A, it was inappropriate for him to comment on the details of the case at this stage.
12. Responding to Mr Howard YOUNG and Mr NG Leung-sing, SCS advised that the Administration had been careful in the choice of words used in the information paper provided to the Panel and the press release on the case of Mr WONG Ho-sang, so as not to prejudice any subsequent proceedings.

13. Mr Ambrose CHEUNG considered that the way in which the case of Mr WONG Ho-sang had been handled left much to be desired, as the Administration and CIR had commented on the case to the media before the completion of investigation. Mr CHEUNG asked whether there was any standard procedure for handling this type of cases. In response, SCS advised that usually in handling disciplinary cases, HoDs or Bureau Secretaries would conduct internal investigation to establish whether there was a prima facie case for disciplinary proceedings. If there was a prima facie case, disciplinary proceedings would be conducted to establish if a misconduct had been committed. On the basis of the findings, recommendations on punishment, if appropriate, would be submitted to the Public Service Commission for advice. Any officer who was aggrieved by the decision might appeal against it or seek judicial review. As regards the case of Mr WONG, however, it was first revealed on a press report and soon widely reported by the media. To address the public concern, the Administration had to give an account of the information available and the actions to be taken.

14. To avoid similar incidents in future, Mrs Sophie LEUNG considered it important to enhance awareness of the standard of integrity expected of a civil servant through training and culture management. She also suggested that the standard of integrity of individual officers should be taken into consideration in assessing their suitability for promotion. SCS shared these views. He advised that it had been CSB's main policy objective to uphold the civil service integrity. In the past three years, CSB had been working closely with ICAC in promoting the culture of integrity in the civil service and would continue to do so. SCS added that the standard of integrity had been taken into account for promotion of civil servants, in particular for directorate and law enforcement officers.

15. The Chairman pointed out that some civil servants approaching retirement age might not be on the alert on avoiding conflict of interest situations. SCS responded that CSB would continue to work with ICAC in arranging seminars and training programmes on conduct and integrity of civil servants. It was hoped that through these seminars and training programmes, civil servants would become more aware of the importance of the issue.

16. Responding to the Chairman, SCS undertook to brief the Panel on the case of CIR after D of A had completed his investigation. (Post-meeting note : A special Panel meeting was scheduled for 20 August 1999 to follow up the case of CIR.)	Admin

II. Any other business

17. The meeting ended at 9:45 am.

Legislative Council Secretariat
19 August 1999