Submission to Bills Committee on Competition Bill

19 November 2010

Chairman and Members of Bills Committee on Competition Bill
C/o Clerk to Bills Committee on Competition Bill
Legislative Council

Dear Sirs,

Submission to Bills Committee on Competition Bill
Thank you for inviting the Hong Kong Democratic Foundation (HKDF) to attend the meeting on Monday 29 November 2010, at 4.30 pm in the Chamber of the Legislative Council Building. The HKDF started the discussion on the merits of implementing a general competition policy in Hong Kong in March 1994¹. Further discussions on the subject were made by the HKDF in:

• 1997 in a letter to Prof Edward Chen, Chairman of the Consumer Council²;

• 2003 as a 27-page Joint Position Paper by The Frontier and HKDF³;

• 2004 in a letter to Pascal Lamy, EU Trade Commissioner⁴.

• The HKDF has also been the sponsor of the annual Asian Competition Forum hosted by the School of Accounting and Finance, The Hong Kong Polytechnic University.

Thanks to efforts of academics, legislators and the Administration, we are pleased to see that Hong Kong has now come to the stage of final legislative proposals to implement a Competition Bill, a Competition Commission and a Competition Tribunal. We take the view that the current legislative proposals should be implemented as soon as possible, even though some proposals by the Administration are less than perfect and reasonable.

However, we have concerns about Point 4 of the Administration's briefing to Legco on 28 June 2010⁵ -- CB (1)2301/09-10(03):

"4. The Bill will not apply to the Government and statutory bodies except for those statutory bodies or their activities specified by way of a regulation to be made by the CE-in-Council. The regulation making power will be provided for in the Bill. There are some 500 statutory bodies with very diverse functions set up in Hong Kong. We are examining these statutory bodies in conjunction with Bureaux and Departments to determine which, if any of these bodies should be made subject to the application of the Bill. Given the large number involved and close examination is required, we anticipate that more time will be needed to complete the work. However, this should not affect the drafting of the Bill."

Point 4 above refers to:

• Section 3 (1) of the Bill: The following provisions do not apply to a statutory body --

• Section 5, (1) (a) of the Bill - The Chief Executive in Council may, by regulation, apply the provisions refer in Section 3 (1) to - i) any statutory body; or ii) an statutory body, to the extent that it is engaged in an activity specified in the regulation; and …."

The HKDF takes the view that:

1. The Administration's proposal to ask Legco to give it blanket exemption power is less than ideal as this could be compared to the earlier act of granting exemption to the Housing Authority from the Hong Kong Building Codes. The result of the latter exemption was that many public housing flats later had severe sewage leakage problems inside the flats. It is also not reasonable for the Administration to ask for such blanket power from Legco on grounds that there are too many statutory bodies to review.

2. If Legco accepts this position, the Bill will be probably passed quickly. But Legco would be giving up its constitutional responsibility as elected representatives of the community and would be leaving it entirely to the Administration to decide which one of the 500 statutory bodies are subject to Competition Law. And Hong Kong would find itself with "soft" infrastructure problems in many public institutions; the fault will not be physical and cannot be smelled or touched like sewage, but it will not be less problematic.

3. There would be no incentive for statutory bodies, particularly those that engage in commercial activities, to comply in future since they would already have been given "blanket coverage" by the Administration. The relevant Policy Bureaus would also lose the incentive to review the anti-competition activities of the statutory bodies under their charge.

HKDF however, partially agrees with the Administration that some statutory bodies that deliver significant social or economic value to Hong Kong should be considered for exemption, particularly if there is wide community support for such an exemption.

Therefore, a more desirable position Legco could consider is as follows:

1. The Administration should only be given power by Legco to grant exemption to each of the 500 Statutory Bodies on a case-by-case basis (or in blocs of related bodies). Exemption is subject to Legco approval through a simple majority vote.

2. To give time to HKSAR Government to review the activities and conduct of each of the 500 Statutory Bodies and to propose to Legco on the cases that deserve exemption, Legco could agree to a give temporary exemption to all Statutory Bodies for a period of 3 to 5 years.

3. During the 3 to 5 years period, the Administration should review the activities and bring forward the cases proposed for exemption to Legco for approval. For the Statutory Bodies that are not expected to get community support (or do not pass the simple majority test in Legco), the Administration will need to adjust the business activities, so that the Statutory Bodies in question would comply with the Competition Bill.

Thank you very much for your attention. We hope the above views offered by the HKDF have been useful to the Bills Committee on Competition Bill.

Sincerely yours,

The Secretariat
For and on behalf of the Policy Committee of
Hong Kong Democratic Foundation

 

¹ Short policy paper published by HKDF: http://www.hkdf.org/pr.asp?func=show&pr=49

² Letter to Edward Chen: http://www.hkdf.org/pr.asp?func=show&pr=60

³ Joint Position Paper by The Frontier and HKDF: http://www.hkdf.org/download/comppol8.pdf

⁴ Letter to Pascal Lamy and reply from the EU Trade Commissioner: http://www.hkdf.org/pr.asp?func=show&pr=137
http://www.hkdf.org/newsarticles.asp?show=newsarticles&newsarticle=147

⁵ CEDB's Briefing to Legislative Council dated 28 June 2010 -- CB(1)2301/09-10(03) http://www.legco.gov.hk/yr09-10/english/panels/edev/papers/edev0628cb1-2301-3-e.pdf

 

 

立法會
競爭條例草案委員會主席及委員
c/ o競爭條例草案委員會秘書

敬啟者：

提交競爭條例草案委員會

感謝您邀請香港民主促進會（民促會）出席2010年11月29日下午4時 30分在立法會大樓會議廳的會議。民促會自1994年3月開始討論在香港實行一個普遍性競爭政策¹。並且有進一步討論這一議題：

• 1997年去信消費者委員會主席陳坤耀教授²;
• 2003年與「前綫」聯合發表27頁的文件³;
• 2004年去信歐盟貿易專員拉米⁴。
• 香港民主促進會每年均有贊助由香港理工大學會計及金融學院主辦的「亞洲競爭論壇」。
  

經過學者、立法會議員和政府當局的努力，我們高興看到香港現在已進展到立法建議的最後階段，實現公平競爭條例草案、成立競爭委員會和競爭審裁處。即使政府當局一些建議不是完美和完全合理，我們認為目前的立法建議應盡快實施。

但是，我們對政府當局於2010年6月28日向立法會的簡報—CB（1）2301/09-10（03）⁵的第4點有所顧慮：

〝4。《條例草案》不適用於政府及法定團體或其指明活動，除行政長官會同行政會議制定規例中指明的法定團體或指明的活動外。《條例草案》將包括制訂有關規例的條文。現時，本港共有500多個法定團體，各有非常不同的功能。我們現正與各政策局及部門研究這些法定團體，以判斷那些團體應受《條例草案》的規管。由於這些團體為數眾多，而我們亦要詳細研究，我們預計需要更多時間才能完成有關工作。然而，這些研究工作並不影響《條例草案》的草擬工作。〞

上述第4點是指：

• 第3（1）條：以下條文不適用於法定團體 —
• 第5（1）（a）條 — 行政長官會同行政會議可藉規例將第3（1）條所提述的條文—（i）適用於任何法定團體；或（ii）在任何法定團體從事該規例所指明的活動的範圍內，適用於該團體；及...〞
  

香港民主促進會的觀點是：

1. 政府當局要求立法會給予全面豁免權力的建議是不完全合理的，這立法行為可以與早期房委會獲豁免「香港建築條例」的行為作比較。結果是獲豁免後，許多公共房屋單位內後來有嚴重的污水滲漏問題。同時，政府利用有太多的法定團體需審查的理由，要求立法會給予這些全面豁免權力，是不合理的。
2. 如果立法會接受這一立場，草案將可能很快通過。若然如此，立法會是等同放棄其作為民意代表的憲法責任，並完全將決定500個法定團體中哪一個受競爭法規管的權力交給政府當局。這樣，香港會有許多公共機構出現「軟」基礎建設的問題，這毛病是不能像污水一樣聞到或接觸到，但它將會不是一些小問題。
3. 從事商業活動的法定團體，因為他們已經被政府當局授予「地毯式覆蓋」的豁免，將沒有動力來遵守公平競爭的精神。有關政策局也會失去審核他們所負責的法定團體的反競爭行為的誘因。
   

然而，如果社會對某些法定團體能得到豁免有廣泛的支持，香港民主促進會是贊同豁免部份能夠為香港提供重要社會價值或經濟價值的法定團體。

因此，立法會可考慮以下較為可行的建議：

1. 立法會應只給予政府當局，對500個法定團體之中（或相關團體）在每一個團體逐一個案基礎下給予豁免的權力。豁免權是由立法會通過簡單多數表決批准的。
2. 為了使特區政府有時間來檢討500個法定團體的業務和行為，及向立法會建議那一些法定團體值得豁免，立法會可同意給予所有法定團體為期3至5年的臨時豁免權。
3. 在3至5年期間，政府當局應檢討法定團體的業務，並向立法會提出建議批准那些個別團體獲得豁免。那些不會得到社會支持的法定團體（或不獲立法會的簡單多數測試批准的），政府當局將需要調整他們的業務，從而使有問題的法定團體符合競爭條例草案。
   

我們希望上述提供的意見有助委員會對條例的審核。

香港民主促進會秘書處
並代表政策委員會
謹啟

2010年11月19日

 

¹ 民促會發表的簡短政策文件：http://www.hkdf.org/pr.asp?func=show&pr=49

² 給陳坤耀的信：http://www.hkdf.org/pr.asp?func=show&pr=60

³ 「前綫」與民促會聯合發表文件：http://www.hkdf.org/download/comppol8.pdf

⁴ 給拉米的信及歐盟貿易專員的回覆：
http://www.hkdf.org/pr.asp?func=show&pr=137
http://www.hkdf.org/newsarticles.asp?show=newsarticles&newsarticle=147

⁵ 商務及經濟發展局2010年6月28日向立法會的簡報—CB(1)2301/09-10(03)： http://www.legco.gov.hk/yr09-10/chinese/panels/edev/papers/edev0628cb1-2301-3-c.pdf

 

Reproduction of this paper is permitted with proper attribution to the Hong Kong Democratic Foundation