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Following is the speech by the Chief Secretary for Administration, Mrs Anson Chan, in the motion debate on "The Executive Council" in the Legislative Council today (Friday):

Madam President,

I've listened very carefully to the views expressed by Honourable Members regarding the operation of the Executive Council and the appointment of the Members of the Executive Council. I fully understand Members' concerns over this issue.

The previous Executive Council has played a very significant role in Hong Kong's political framework. With the establishment of the Hong Kong Special Administrative Region and to realise the principles of "one country, two systems" and high degree of autonomy, it is understandable that the people of Hong Kong would have higher expectation of the body which assists the Chief Executive to decide on the policies of the Region.

As the body that assists the Chief Executive in policy making, the Executive Council is akin to the cabinet and think tank of the Chief Executive. Government polices formulated by Policy Bureaux have to be submitted to the Chief Executive in Council for approval. If the policies require the introduction of bills or the making of subordinate legislation, the Executive Council must be consulted before they are submitted to the Legislative Council.

The operation and the powers and responsibilities of the Executive Council are essentially modelled on those of the previous Executive Council. That is to say, the system has evolved from the constitutional development for over a hundred years. This long-established mechanism is also enshrined in the Basic Law as part of the constitution of the Hong Kong Special Administrative Region. The Basic Law clearly stipulates the responsibilities, powers and composition of the Executive Council. Article 54 of the Basic Law provides that the Executive Council shall be an organ for assisting the Chief Executive in policy making. Article 55 sets out the composition of the Executive Council. Article 56 states that the Chief Executive shall consult the Executive Council before making important policy decisions, introducing bills into the Legislative Council, or making subordinate legislation. I therefore cannot agree with the Honourable Cyd Ho's criticism that the powers and responsibilities of the Executive Council are ambiguous and should be reviewed.

Some Honourable Members are of the opinion that the criteria for appointing Members of the Executive Council should be reviewed because the current composition lacks representation and accountability, and its Members have substantial commercial interests by virtue of their work or professions. On this question, I would like to stress that Members of the Executive Council act as the think tank and advisors of the Chief Executive and, as stipulated in the Basic Law, they are appointed by the Chief Executive himself. Article 55 of the Basic Law provides that the Members of the Executive Council shall be appointed by the Chief Executive from among the principal officials of the executive authorities, members of the Legislative Council and public figures. The Basic Law does not require those who are appointed to the Executive Council to relinquish all their own duties or work in order to become full time Members. The aim of this appointment mechanism is to ensure that Non-official Members of the Executive Council could, with their professional knowledge and long service in the community, and through their contacts with different sectors of the community, reflect the views and needs of the public to the Chief Executive.

In appointing Members of the Executive Council, the Chief Executive will take into account their ability and expertise, their public service, their vision and integrity, in order that the Members so appointed could assist him in policy making by reflecting the views of different sectors of the community and taking into account the overall interests of Hong Kong. The current composition of the Executive Council basically meets the requirements of the Basic Law and fulfills the above criteria. Executive Council Members come from all walks of life, including principal Government officials, a Legislative Councillor, and people from various professions such as lawyers, surveyors, accountants, bankers, industrialists and social workers. All of them have long experience in various aspects of public service such as education, housing and labour-related matters.

As an international business and financial centre, Hong Kong's prosperity has always hinged on commercial development. It would not be possible to expect the Executive Council to comprise of people who are entirely unrelated to commercial activities. On the other hand, to expect Members of the Executive Council to resign from all their work and duties in order to avoid any conflict of interests, or to become full-time Members could give rise to another shortcoming. That is, if the Members leave their professional circle, they could lose track of public sentiments because they can no longer grasp the changing circumstances of the society. This will fall short of the intention in the Basic Law to appoint public figures as Members of the Executive Council. I fully appreciate that Honourable Members and members of the community are concerned about the accountability of the Executive Council. To address those concerns, we feel that it is of utmost importance that we have a highly transparent mechanism for the declaration of interests by Executive Council Members.

In order to ensure that the advice tendered by Members of the Executive Council to the Chief Executive is impartial and disinterested, the Executive Council has a long-established mechanism for Members to declare their interests. First of all, on their first appointment and annually thereafter, Executive Council Members have to furnish a return on their registrable interests. In addition, Executive Council Members are required to declare their interests during the deliberation on individual issues. Given the range of matters which come before the Executive Council for advice, it is inevitable that Executive Council Members will occasionally encounter subjects in which they could reasonably be construed to have an interest. What is important is that the interest be recognised, its significance weighed and due account taken of it.

Interests can be divided broadly into two categories. The first category of interests is those which are so direct and significant that they require exclusion of the Executive Council Member from the deliberations of the Council. The Chief Executive will decide, having taken note of the interest declared, whether the Executive Council Member concerned should be asked to withdraw from the Council during the discussion of the relevant item. Interests other than those described above, whether direct or indirect interests, pecuniary or otherwise, should be declared where they might be thought likely to incline a Member towards a particular stance on the item under discussion. In these cases, however, the Executive Council Member concerned will normally receive the paper and be allowed to take part in the discussion. Executive Council Members' positions in boards and committees (such as the Housing Authority, Employees Retraining Board, and the various University Courts and Councils), or other statutory and non-statutory advisory boards, committees and tribunals are not strictly speaking declaratory interest. However, it is normal that such positions be made known and noted by Executive Council Members. When an Executive Council Member is required to declare interest in the matter under discussion, such declaration will be recorded in the minutes of the meeting. We will consider, on a case by case basis, whether such declaration could be disclosed upon request after the meeting.

There is also query from Honourable Members as to whether the existing mechanism for declaration of interests is adequate to ensure that Executive Council Members' advice to the Chief Executive is disinterested and impartial. In fact, the guidelines for declaration of interests by Executive Council Members are more stringent and in greater detail than those of the previous Executive Council. For example, we have explicitly required Executive Council Members to declare interest on land and property owned in Hong Kong or outside Hong Kong, including those for self-occupation. In addition, Executive Council Members are also required to declare any currency transactions involving Hong Kong dollars and acceptance of sponsorships and gifts.

In response to the Honourable Emily Lau's question on 16 June 1999, Government has provided some statistics on the number of occasions on which Members of Executive Council have declared their interests since the handover. I would like to elaborate further the statistics in the light of Honourable Members' concern. First of all, 62 declarations of direct and significant interests were made by Members of the Executive Council with regard to 45 items discussed during the period from 1 July 1997 to 8 June 1999. As a result of which, the relevant Executive Council Members were excluded from the deliberations of the Council on the matters concerned. This amounted to only 6% of the items that were laid before the Executive Council. During the same period, Executive Council Members have also made 539 declarations on other interests in 214 items, which amount to about one third of the total number of items discussed. The number itself may give the impression that Executive Council Members have conflicts of interest in a lot of matters laid before the Executive Council. However, a large proportion of such declarations actually related to Members' positions in boards and committees rather than their personal interests. Therefore, we cannot just base on these figures to say there is a serious conflict of interest amongst the Members. On the other hand, this demonstrates that the Executive Council has a well-established mechanism for declaration of interests and that Members treat the mechanism very seriously to avoid the public casting doubt over the integrity of the Council.

In order to improve the public accountability of the Executive Council, some Honourable Members pointed out that the role of Executive Council Members should be redefined so that they could, apart from representing the voice of the general public, communicate more with Members of the Legislative Council and the public and explain Government policies. In canvassing and reflecting public views, various Policy Bureaux and Government departments, the Legislative Council, District Boards and various advisory bodies play an active role. As a body to assist policy making, the present Executive Council, similar to the previous Executive Council, has to abide by the principles of confidentiality and collective responsibility. Under these two principles, Members of the Executive Council cannot disclose information to anyone directly or indirectly related to Executive Council business, agenda and contents of the documents. Besides, all Members of the Executive Council are collectively responsible for the decisions arrived at their meetings. If Members of the Executive Council are asked to express in the public their personal views on each of the Government policies, this may affect policy implementation and cause confusion.

Although Executive Council deliberations have to be kept confidential, the items of discussion, no matter whether they were policies or bills, are usually the subjects of detailed public consultation and are built on the basis of public opinions. In the process, members of the public can submit their views for Executive Council's consideration via the Administration through different channels including advisory committees, the mass media or written submissions. At the same time, Members of the Executive Council can gauge different needs of the community through their contacts in different sectors and reflect to the Chief Executive so that he can have a thorough evaluation in arriving at his decision to balance different interests. In the case of policies or bills, the relevant Policy Bureaux and departments will, depending on the circumstances, explain to Legislative Council and the public through the issuing of Legislative Council briefs and press releases. Other than these, Members of the Executive Council will, through different informal channels such as attending Legislative Council's monthly luncheon meeting, maintain frequent contact with Members of the Legislative Council in a bid to enhance communication. Non-official Members of the Executive Council will also pay regular visits to social organisations and meet with public groups to listen to their views on government policies to enhance their understanding of public views.

Some Honourable Members have raised again the issue of a ministerial system. They feel that individual Executive Council Members should be responsible for different policy areas. Regarding this point, we must know that the Basic Law does not provide for a ministerial system. Under the present political environment, we have no intention to implement such a system. We should develop our political structure progressively in accordance with the provisions of the Basic Law.

Honourable Members have asked that in order to enhance the accountability and the transparency of the Executive Council, whether the Government would consider disclosing to the public the papers and deliberations of the Council. In order to ensure the efficient operation of the Executive Council and that the Members can freely express and exchange their views, our principle is to keep Executive Council papers and minutes confidential. The Courts of Hong Kong have also accepted that Executive Council papers are akin to Cabinet papers and are subject to a high degree of protection and should not be disclosed. Having said that, members of the public can gain access to Government records which are over 30 years from the Public Records Office. As such, most of the papers and decisions of the previous Executive Council which have a history of over 30 years have been deposited at the Public Records Office for public inspection. This arrangement is similar to that of other countries (such as the UK and Australia etc) which provides an opportunity for the public to have access to public archives.

We agree with Honourable Members that the effective operation of the Executive Council and the appointment of its Members are of utmost importance. The powers and responsibilities of the present Executive Council and its operation are modelled on those of the Executive Council before the handover and has been firmly established for more than a hundred years. As regards the declaration of interests, the Executive Council has a long-established and well-tested mechanism. We will continue to build on the existing system to ensure the Executive Council can function effectively and meet public expectation. I trust that Members of the Executive Council will continue to communicate with Honourable Members of the Legislative Council and the general public in order to enhance public understanding and to build up a closer partnership between the executive and the legislature. This would be conducive to the formulation and implementation of Government policies to meet the overall interest of the community.

Thank you, Madam President.

End/Friday, July 9, 1999

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