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Following is the speech given by the Chief Executive, Mr Tung Chee Hwa, at the Hong Kong Association of Banks Half Yearly Dinner today (Wednesday).

Ladies & Gentleman,

Thank you very much for inviting me this evening, it's really been a very tough year and we together have had a tough time. Although the news lately are somewhat better. I think it is important that at this juncture, we do not carry away with too much optimism. Next year, I believe, will continue to be difficult and we need to continue to adjust our costs to become more efficient and competitive. I have decided, after some thought, not to talk to you about economy, not to talk to you about the banks, not to talk to you about the hedge funds and basically, to talk to you seriously about a subject which is just as close to me personally and, I think, to many of you also. But before I do that, I would like to say one thing that through the difficulties of 1998, in Hong Kong, we are very fortunate to have a very solid banking system. We are very fortunate to have some very good banks here who have worked closely with the government, providing very good services to the community as a whole. So, if I may, just on behalf of the people of Hong Kong, thank you very much. We have a very difficult year. We have all risen to the occasion and worked very hard and come through it in good and proud manners. Really, the recovery of Hong Kong depends a lot on external factors.

Focusing all the time on external factors, about which we have so little control, doesn't really help us very much. It is important to work on things that we can change, to give a sense of purpose and hope to people, a sense that there are practical things being done to make sure that Hong Kong will again be a place in whose success we can all take pride in.

Of course, even in the middle of economic difficulties, we do take pride in our city, in what we have all done together here, but we tend to take pride in private. In public, with each other, like New Yorkers and Londoners where I used to live, we tend to be very critical. One of the areas we have been most critical about recently is the state of our environment. The papers are full of complaints about air pollution, water quality, waste and noise.

Just last week a famous environmental campaigner - David Bellamy - came to Hong Kong and said that we were being much too critical. He said that we ought to start telling the world about the good things that are being done here - the reforestation of our hills; 40 per cent of our land that is our country parks; the protection of Mai Po marshes; the marine parks and the artificial reef programme. There are many many examples like these - things that are helping to keep more diversity of natural life in Hong Kong's 400 square miles than in the whole of the British Isles, things that are helping to make living in Hong Kong enjoyable for every citizen.

Well, to some extent I do agree with Mr Bellamy. We do need to remind the world, and each other, about the good things of Hong Kong, rather than always doing ourselves down. We need to give hope, rather than grimly spreading gloom all the time.

But, the most important instruments for giving hope to people are showing that action is being taken to tackle the problems that they see; showing them the practical things that they themselves can do to help; setting out a vision of better ways of shaping our city and inviting them to join in turning that vision into reality.

I made those themes - of action on the environment by the Government, and encouragement to the others to join in - part of my policy address in October. My administration has been setting out our environmental programme vigorously in the weeks since then. This is going to be at the forefront of our agenda next year, year after next and every year thereafter.

We are not doing it because it is fashionable to be talking about the environment and sustainability. We are doing it because of the conviction that improving the environment is vital to the health of our citizens, vital to their enjoyment of our city, vital to the economy that supports Hong Kong. That is a conviction I share, I know, with many of you here.

I know I can count on the support of every one of you in making my vision of an environmentally healthy, clean and green city a reality in the years ahead. It is important because it isn't just my vision, it is the hope of most of the citizens of Hong Kong. It is important because without a healthy environment, we don't have a healthy economy.

Let me share with you a quick outline of all the actions my administration is taking to improve our environment, and the vision we are working to achieve.

Two weeks ago the Secretary for Planning, Environment and Lands set out very fully all that is being done to address air pollution. For the short term our attention is on introducing LPG for the taxis and requiring better engine maintenance. We have been matching standards set in other great cities, but that isn't good enough. Nowhere else has the density of population and the transport demand like ours . To give our city clean air, we are going to have to start setting the pace in clean transport, setting the pace of all the other cities around the world.

Looking ahead we are expanding our rail system by 40 percent over the next five years and shifting the focus of our planning to development based around rail and other environmentally friendly transport systems.

Increasing the efficiency with which we use energy, and moving to more environmentally responsible systems for generating power are also critical to sustaining improvement in our air quality. So too is working with our neighbours to address air quality issues on a regional basis.

Working with our neighbours is also important to achieving our goals to improve water quality, but again there is much we must do within Hong Kong. We have put behind us the problem with the first contract for the urban area sewage tunnels and are pressing on with the infrastructure that will allow the sewage from the main city area to be properly treated at last. Within the year 2000, all of Kowloon, Tsuen Wan, Kwai Chung, Tsing Yi, Tseung Kwan O and Chai Wan will be connected up to treatment works.

We are now assessing the options for further treatment and outfall arrangements outside the harbour. We are considering the comments we have received on them from the community and is discussing with the Mainland. We will decide on the way forward in the next few weeks. In the coming year we will also be seeking the funding to extend the collection system to the rest of Hong Kong Island.

Massive programmes to improve sewage treatment and collection systems in the New Territories are also being carried out. $700 million will be spent in North District alone over the next six years, connecting up many of the villages, helping to improve their environment and helping to protect the Mai Po Marshes and the sensitive waters of Mirs Bay.

Our objective is to provide healthy living conditions for the growing population of our territory, while reducing the impact each of us has on the waters and coastal areas that are so important to the economy and to our enjoyment of our city.

In November, we launched a framework plan for waste reduction. It addresses every kind of waste, not just paper, but metals, plastics, chemicals, timber and construction waste. I will shortly be appointing a committee drawn from business, waste industry professionals, environmental groups and government agencies to ensure that we meet the ambitious targets that have been set for reducing waste.

I know that there is concern about certain aspects of the waste management industry at the moment, especially on paper recycling.

What we have at the moment in Hong Kong is a massive hidden subsidy to waste producers. That is undermining the ability of our waste collection and recycling industry to compete with increasingly efficient operators elsewhere. Until we change that, any other form of support to our recycling industry will have minimal effect.

What we want for Hong Kong is a world class waste management system that stimulates efforts by every sector to reduce waste and that encourages new ideas and new investment in the recovery and reuse of materials. I know that Cathay Pacific and several other major firms are already reaping economic benefits from waste reduction. It is an opportunity for every business to think about.

Experience elsewhere is that the introduction of waste disposal charges rapidly becomes not a cost to business but a stimulus to cut costs by cutting down on waste, and a stimulus to reuse and recycle materials. It also creates potential for new markets and new business.

Within the public service I have asked for new ideas to improve the administration's own environmental performance. Every department and agency of the Government has been directed to assess the environmental impact it is having. They will all be drawing up measurable plans for better performance. The objective is for the public service to be second to none in the efficiency with which energy is used, in reducing waste and in identifying and reducing all potentially harmful effects on our common environment.

The structure of the public service that delivers environmental programmes for the community is being revamped. A new Bureau responsible for Environmental Policy as well as food safety will be established next year. Public discussion so far has concentrated on the reorganisation of the Urban and Regional Services Departments. That is important to ensure that we improve food handling and environmental hygiene. We need to manage that reorganisation effectively first, but we are also looking beyond it to the next steps.

We will be working to establish better arrangements for waste management. We will also be considering new structures to take forward conservation of our natural treasures and greening of our urban environment. I am particularly keen to see the District Boards being given the support needed to let them play a fuller part in cleaning and greening their areas.

I would also like to see much greater involvement by different sectors and groups within the community in discussion about the vision we need to make this wonderful place a more sustainable home for all of us.

There is clearly a mismatch at this moment between the understanding of our professional planners about the community needs that have to be met through development and urban regeneration, and the views that many in the community have about what sort of development is acceptable. We have few common measurements in what is happening and of what is desirable. GDP is well known, but growth of GDP is not a good measure of environmental or social progress.

As part of our SusDev 21 study, we are developing more indicators that will show essential information about our city - on such things as health and pollution, poverty, economic activity, education and housing - and require important policy and planning ideas to be tested for their effects on all those important aspects of our community life. The aim is a better framework to build up common understanding of how our city is working and to develop ideas about how to build better for our future. Your input to those ideas is valuable to the public service and to others in the city who are thinking about these thing.

Finally - finally for tonight, that is - there are things that you, the banking community, and other citizens of Hong Kong can do to help improve our environment. There are simple, practical things, like making sure your car engine is properly maintained; like cutting back on waste; conserving energy. And then there are wider activities you can support in your business or home environment - sectoral schemes to reduce waste; corporate afforestation programmes; environmental education campaigns; even asking developers for better buildings.

Ladies and Gentlemen, we know already that for Hong Kong to remain in the forefront of world cities and the premier international city in Asia - if it is to remain a great asset for our own nation - we need to put behind us the old myth that Hong Kong is full of people who are only concerned about money - dear though I know money is dear to the heart of every banker sitting here.

A strong economy for the future needs a good environment to support that economy: needs a business community and a public sector committed to the highest standards of environmental performance: needs a society in which ambitions for economic progress are matched with understanding of the environmental dangers we face, and of the costs that lack of attention to the environment inflict on us and on our neighbours. We need acceptance that if we want Hong Kong to remain a home that will sustain us, we have to change some of the ways that we have been doing things together.

I am committed to that process of changing our environment for the better. It is a commitment that is being made by the whole public service, by many in industry and business and by many individuals throughout Hong Kong. I'm sure I can bank on you doing the same things.

Thank you very much.

End/Wednesday, December 9, 1998

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