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Following is the speech by the Secretary for Justice, Miss Elsie Leung, at the Credit Suisse First Boston Asian Investment Conference today (Wednesday):

Good afternoon. It is my pleasure and privilege to have this opportunity to address so many distinguished representatives from leading international institutional investors. I am sure that your are all keenly interested in the current state of the legal system and the rule of law in the Hong Kong SAR. In this address, I hope to reassure you that all is well. In doing so, I will address two recent causes of concern, namely, the ruling of the Court of Final Appeal on right of abode and my decision not to prosecute Ms Sally Aw.

Background

First, let me give a general overview of the legal position. At the end of June this year, the Hong Kong SAR will celebrate its second anniversary. So far as the legal system and human rights are concerned, the resumption of sovereignty has been highly successful. Under the principle of "one country, two systems", the HKSAR has retained its own legal system, together with the rule of law and an independent judiciary.

The common law and almost all the statutory laws previously in force have been adopted as laws of the SAR. All judges serving immediately before the Reunification were re-appointed on the recommendation of the independent Judicial Officers Recommendation Commission. The Court of Final Appeal in the SAR, which has replaced the Judicial Committee of the Privy Council in London, makes our highest appellate court more accessible to litigants. In addition, the local and overseas judges who have been appointed to that court are of the highest calibre, and have already given the court a reputation for quality, integrity and independence.

The Basic Law of the SAR not only sets out the constitutional framework for the concept of "one country, two systems" but also provides rights and obligations that are enforceable in our courts. Under these provisions, the legitimacy of the Provisional Legislative Council and the validity of some legislative provisions have been challenged in the courts. These challenges demonstrate that human rights are fully protected by an independent Judiciary, and that the rule of law is as strong as ever.

The Ruling on Right of Abode

Let me deal with the challenge to certain provisions in our immigration legislation, which led to the recent decision of the Court of Final Appeal and subsequent controversies.

There has been an obvious need for Hong Kong to control the flow of immigrants from the Mainland, both before and after the Reunification. Since 1982, the control of such immigrants has been achieved through a One Way Exit Permit System, which involves a daily quota of permits being issued by the Mainland authorities. This system had worked well.

The Reunification introduced a new factor in respect of immigration, since Article 24 of the Basic Law confers a right of abode in the SAR on a number of categories of people. The effect of that article was to confer a right of abode in the Hong Kong SAR on tens of thousands of children born and raised in the Mainland who had not previously had such a right. If all these children arrived at once, the impact on the social support services would have been extremely difficult to bear.

The SAR Government therefore introduced amendments to the Immigration Ordinance, which took effect from 1 July 1997, to implement a Certificate of Entitlement Scheme in respect of Mainland children. The legislation provided that, to enjoy their right of abode, they must hold a valid travel document, which in practice means a valid One Way Permit issued by Mainland Authorities, to which there was affixed a valid Certificate of Entitlement issued by the Department of Immigration. In order to obtain such a certificate, they must prove to the satisfaction of the Director that at least one of their parents had the right of abode in the Hong Kong SAR.

That Certificate of Entitlement Scheme was challenged before the courts as being inconsistent with the Basic Law. On 29 January 1999, the Court of Final Appeal delivered its judgments in four test cases relating to Chinese nationals born outside Hong Kong who claimed the right of abode. Time does not permit me to go through the judgment in detail. Therefore I would only briefly mention some salient points.

One ground of attack was that the legislation had been enacted by the Provisional Legislative Council which was not the lawfully constituted legislature under the Basic Law. The Court of Final Appeal held that the Provisional Legislative Council had been validly constituted in accordance with the decision of the National People's Congress adopted on 4 April 1990.

The Court of Final Appeal also upheld the following aspects of the Certificate of Entitlement Scheme:

(a)that a person claiming right of abode under Article 24(2)(3) of the Basic Law must apply for and obtain a Certificate of Entitlement;

(b)that such a person can only establish his status by holding a Certificate of Entitlement; and

(c)that he must stay on the Mainland until application procedures are completed.

The Court of Final Appeal held that the following aspects of the Certificate of Entitlement Scheme were inconsistent with the Basic Law:

(a)the requirement for the certificate to be affixed to a One Way Permit;

(b)the requirement to apply to the Exit-Entry Administration of the Public Security Bureau in the Mainland when applying for a Certificate of Entitlement;

(c)its retrospective effect from 1 to 9 July 1997;

(d)its exclusion of persons born out of wedlock to a mother who does not have a right of abode in the HKSAR; and

(e)its exclusion of persons whose parent did not have a right of abode at the time of birth.

Two aspects of the judgment have given rise to expressions of deep concern. One was the statement of the Court of Final Appeal to the effect that the courts of HKSAR have the jurisdiction to examine whether legislative acts of the National People's Congress or its Standing Committee are consistent with the Basic Law and to declare them to be invalid if found to be inconsistent. Some commentators, both here and in Beijing, regarded those statements to mean that the Court of Final Appeal had put itself above the National People's Congress, and that it had given itself the right to scrutinise and oversee each legislative act of the National People's Congress.

The other aspect was the consequences for Hong Kong of the immigration of persons who, in accordance with the judgment, have a right of abode here. Concern was expressed, both here and in Beijing, that the judgment would result in large number of people coming here and exerting a great strain on Hong Kong.

To address the constitutional concern, the SAR Government considered a number of options, including filing a notice of motion to the court, applying for clarification of part of the judgment which related to the National People's Congress and its Standing Committee.

An application was subsequently filed, and was heard on 26 February 1999. Having recited the background, the Court of Final Appeal stated the following:

"The Court's judgment on 29 January 1999 did not question the authority of the Standing Committee [of the National People's Congress] to make an interpretation of under Article 158 [of the Basic Law] which would have to be followed by the courts of the [Hong Kong Special Administrative] Region. The Court accepts that it cannot question that authority. Nor did the Court's judgment question, and the Court accepts that it cannot question, the authority of the National People's Congress or the Standing Committee of the National People's Congress to do any act which is in accordance with the provisions of the Basic Law and the procedure therein."

I believe that this statement has helped to dispel some of the concerns that were previously expressed about the judgment.

Some people have said that the Government has, by making this unprecedented application for clarification, put political pressure on the court and has undermined the independence of the Judiciary. This is entirely misconceived. There have been occasions where courts in other common law jurisdictions have clarified their decisions after judgment has been delivered. For example, in the American case of Matimak, which related to the right of companies registered in Hong Kong to sue in American District Courts, the 2nd Circuit Court of Appeal clarified its own judgment on the application of the Hong Kong Government. On 20 August 1997, it issued an amendment to the judgment delivered on 27 June 1997, explaining that it did not express a view as to Hong Kong' status following Reunification.

Furthermore, it is clear that my application to the Court of Final Appeal was properly made. The Court of Final Appeal itself considered that it had the inherent jurisdiction to issue a clarification, and was prepared to do so. The clear fact is that the court's original judgment was not affected. The independence and impartiality of the court were in no way undermined. Anyone who suggests or implies that judges of the Court of Final Appeal would or may give in to political pressure of any sort is manifestly not familiar with the calibre and the integrity of the judges who man the court.

I hope that the controversies surrounding the constitutional aspect of the Court of Final Appeal's decision can now be left behind us. In the early stage of the implementation of the Basic Law, disputes of this kind inevitably happen. It shows that the rule of law is respected when legal issues are resolved in court. Both the Central People's Government and the Hong Kong SAR Government adopted a sensible approach in resolving a problem arising within our one country amicably and positively. We should move forward to deal with the entry arrangements for Certificate of Entitlement holders and service implications arising from that decision.

After the delivery of the Court of Final Appeal's judgment, the Immigration Department has been discussing with the Mainland's Bureau of Exit and Entry Administration (the "BEEA") new Certificate of Entitlement application procedures for eligible persons, including children born out of wedlock. The Director of Immigration has already held two meetings with the BEEA. Another meeting will be held soon with the BEEA to take the matter forward. We are confident that continued progress will be made in our discussion with the BEEA on the procedures.

The Police and their Mainland counterparts are maintaining vigilant boundary control against illegal entries. A Task Force has been set up within the Government to consider the long-term implications of the Court of Final Appeal's decision. These implications must be carefully assessed in the light of more accurate information on the potential numbers and characteristics of persons concerned.

The Decision not to prosecute Ms Sally Aw

I now turn to the other recent controversy, which relates to my decision not to prosecute Ms Sally Aw Sian. In March last year, three persons were charged with a conspiracy, which allegedly involved Ms Sally Aw. Many people were puzzled that Ms Aw had not herself been prosecuted. I have been accused of impropriety in the handling of this case. However, I would now explain to you why this accusation is entirely unfounded.

Before deciding not to prosecute Ms Aw I had carefully considered the evidence against her. My conclusion was that there was no reasonable prospect of securing a conviction against her. It should be noted that when the trial of the three defendants concluded in January this year, the judge explained in his decision that he could understand an initial puzzlement, in those unused to the criminal law, as to how a court could decide that A conspired with B but that B did not conspire with A. The judge explained that this can be perfectly proper, because the same evidence may implicate A but not B. Because of this, it may also be perfectly proper for A to be charged with conspiring with B but not vice versa.

I had considered the evidence of 53 witnesses and over 3,000 pages of exhibits, none of which did implicate Ms Aw. There was no unequivocal evidence that Ms Aw had any intention to deceive any person in the way that the other accused were found to have done. My conclusion that there was insufficient evidence on which to prosecute Ms Aw alone sufficed to dispose of the matter. However, as representations had been made to me about the Sing Tao Group, of which Ms Aw was in control, I did consider those representations on public interest grounds. There was a unique combination of factors surrounding that publishing group at that time. Were Ms Aw to be prosecuted, there were real risks that the company would fail and there would be large-scale redundancies.

It appeared to me that the possible consequences of the prosecution were not proportionate to the seriousness of the alleged offence. The failure of a long-established and well-respected media group and one of the only two English language newspapers at that time could have sent all the wrong signals to the international community, quite apart from the adverse impact it would have on the local media and on the morale of the community. I concluded that it was also not in the public interest to prosecute Ms Aw.

Some critics had suggested that political and personal considerations may have influenced the decision not to prosecute Ms Aw. This suggestion is not true. It had been submitted to me that it was not in the public interest to prosecute Ms Aw, because, for example, she was a member of the CPPCC, a Justice of the Peace and a major contributor to charitable organizations. However, I had disregarded such political and personal considerations out of hand. It is fortunate that the issue about political and personal considerations appears to be settled after my statement to the Legislative Council.

Some critics have sought to blur the fact that the decision not to prosecute Ms Aw was reached on the basis of evidence and on the evidence alone. Instead they concentrated on the public interest factors, and alleged that my decision in respect of public interest factors confirms that people of high position have received special treatment, or that there is one law for the rich and one for the poor. I have refuted this allegation in unequivocal terms. Indeed, like factors would be taken into account in deciding whether or not to prosecute in at least 7 out of the 11 common law and civil law jurisdictions to whom inquiry was made by my Department.

I emphasize that in this case the public interest factors were academic only as there was not sufficient evidence to prosecute. That apart, it is recognised by prosecutors throughout the world that situations can arise in which it may be proper to have regard to the potential effects of a prosecution upon other people, and to consider whether the possible consequences of a prosecution are proportionate to the seriousness of the offence. In that there is nothing new or irregular: it is stated in the Prosecution Policy booklet published by the Department of Justice.

The fact that I did consider public interest factors is not a valid ground for criticism. It is not prohibited by our well-established and published prosecution guidelines. At the most it can only be said that it was unnecessary to consider public interest factors, since there was insufficient evidence on which to prosecute Ms Aw.

Article 63 of the Basic Law has empowered me to control criminal prosecutions, free from any interference. I fully accept that other lawyers might have approached the decision in a different way and might have come to a different decision. Prosecution decisions are inherently controversial. However, I completely reject the allegation that the decision I came to was not one that was properly open to me.

I can assure you that I have always strictly observed, and will continue to strictly observe, the rule of law and the following fundamental principles:

(a)that no one should be prosecuted unless the evidence is such that there is a reasonable prospect of conviction - a person should not be prosecuted simply as an easy way out of a difficult situation;

(b)that when a decision is made not to prosecute someone, one should not subject that person to a public trial by media or politicians;

(c)that the public interest is a factor which may need to be taken into account in making a prosecution decision; and

(d)that Article 63 of the Basic Law must be observed and a prosecution decision should not be influenced by the apparent public opinion on the issue.

It was because of my adherence to those principles that I was called upon to defend myself in the motion of no-confidence in LegCo. That debate illustrates how important it is that those principles must be maintained.

Conclusion

I hope that what I have said would give you a full understanding of my position in respect of the two cases. The Hong Kong SAR Government remains committed, as always, to the rule of law, equality before the law and independence of the judiciary. There is nothing which should throw any doubt on that commitment. The level playing field remains an overriding principle and practice governing all commercial dealings in the HKSAR.

Thank you.

End/Wednesday, March 24, 1999

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