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Following is a speech by the Secretary for Education and Manpower, Mr Joseph W P Wong, in moving the Resolution under Section 6(1) of the General Holidays Ordinance in the Legislative Council today (Thursday):

Madam President,

I move the motion standing in my name on the Agenda.

The purpose of this resolution is to appoint December 31, 1999 as a general holiday in addition to the existing general holidays specified in the Schedule to the General Holidays Ordinance.

The resolution is in response to an earlier request made by the Hong Kong Association of Banks to appoint December 31, 1999 as a general holiday so that banks may close for business on that day and complete all the year-end clearings before midnight on New Year's Eve. The arrangement will also provide enough time for banks to verify and duplicate records of customers' accounts (e.g. year-end account balance), ensuring that the records will still be accurate and complete when entering into the Year 2000.

In moving this resolution, I would like to draw your attention particularly to the following three points:

(i) Firstly, to appoint the coming New Year's eve as an additional general holiday is a proactive precautionary measure whereby banks will not have to provide services for customers and will have sufficient time to complete all essential back-up operations (including data back-up of customers' records) in an orderly manner. I must emphasize that this arrangement does not imply our financial services sector has encountered any difficulties in rectifying the Y2K compliance problem. In fact, their progress in this respect has been good. To date, the majority of "regulated" financial institutions such as banks, financial companies, Exchange members and insurance companies, etc. have reported to their respective regulators that rectification work for all mission critical systems including testing of individual systems and their interfaces with other systems have been completed. The efforts and satisfactory progress of Y2K compliance of the financial services sector in Hong Kong is widely recognized by the international financial community. The Financial Services Bureau has on June 15 submitted to Members a Legislative Council Brief setting out in detail various preparation work completed by the financial services sector in their Y2K compliance for the millennium transition. I will not repeat the relevant information here.

(ii) Secondly, the purpose of designating the coming New Year's Eve as a general holiday is to enable the financial sector to make the best preparation for the millenium transition. We expect employees of most financial institutions will have to work as usual on that day to prepare for a smooth transition to the year 2000.

(iii) Thirdly, the appointment of the coming New Year's Eve as a general holiday is only an exceptional one-off arrangement which will not affect the number of general holidays after 1999. The Government's policy is still to maintain 17 general holidays each year.

After we have put forward this proposal, there are comments that we should appoint the coming New Year's Eve as a special bank holiday instead of a general holiday, or that we should instruct banks to close for business on that day by administrative measures so as to minimize the impact on other local economic activities. At the same time, there are other voices saying that we should appoint December 31, 1999 as a statutory holiday so that all local employees can enjoy an additional holiday. I would like to address these two kinds of opinions separately.

As for designating a special bank holiday, there is no statutory provision in the existing Hong Kong legislation that enables the Administration to appoint a particular day as a bank holiday or sectoral holiday. In other words, we must first enact a primary legislation to empower the Administration to do so. This approach is not feasible because it involves very complex legal problems. First, we cannot, within a short period of time, examine all 79 ordinances and their subsidiary legislation which have referred to the term "holiday", so we cannot promptly ascertain the implication of a "bank holiday" for such ordinances. Second, it is impossible for us to ascertain the implication of appointing a "bank holiday" for those existing contracts which involve the calculation of time and bank transactions. There are suggestions that the Government need not enact a legislation but to declare closure of banks on the coming New Year's Eve by administrative measures. However, this will also lead to legal uncertainties or grey areas which may give rise to unforseeable and countless legal actions. Therefore, we now propose to appoint the coming New Year's Eve as a general holiday under the General Holidays Ordinance in order that the legal effect will be precise and clear. As far as the calculation of time is concerned, subject to the provisions of individual contracts, relevant provisions have already been made in the Interpretation and General Clauses Ordinance and as such, confusion will not arise.

On the other hand, there are suggestions that we should appoint December 31, 1999 as a statutory holiday. The arguments for this suggestion are mainly to have equal treatment for all sectors and their employees and a holiday for all citizens to celebrate the new millenium.

As regards an additional statutory holiday, I have just reiterated that the proposal to designate December 31, 1999 as a general holiday is a one-off arrangement solely in response to an earlier request made by the Hong Kong Association of Banks. We hope the proposal will be implemented so as to enable banks to make the best preparation for the millenium transition. The proposal aims to provide an unequivocal legal basis for banks to close for the day. It is not our intention to provide additional labour benefit, nor is there any question of giving preferential treatment to employees of the financial sector. In fact, I believe that many employees of banks and related organizations will have to work on December 31, 1999 to handle the related year-end clearing, verification and duplication of records.

As for the festivities in celebration of the millenium, I believe most of them will start in the evening. As the 1st and 2nd of January, 2000 are general holidays, members of the public will have ample time for the celebration.

Lastly, I would like to emphasize the urgency of this resolution. As we have pointed out in the Legco Brief, it is imperative that we make an early decision on this issue, so that banks may proceed , as soon as possible, with the necessary system re-programming and re-testing work. The securities and futures industry will also need to make appropriate arrangements in respect of the stock options and futures contracts expiring at the end of this year. Besides, an early decision will facilitate publicity work locally and at overseas on the progress of Hong Kong in tackling the Y2K problem and will reinforce public confidence.

Based on the above, I urge you to support this resolution and made 31st of December this year an additional general holiday.

Thank you, Madam President.

End/Thursday, July 8, 1999

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