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Following is a question by the Hon Jeffrey Lam Kin-fung and a reply by the Financial Secretary, Mr Henry Tang, in the Legislative Council today (October 19):
Question:
It has been reported that the World Bank's recent report on the global business environment points out that the licensing procedures in Hong Kong are complicated, e.g. an application for a licence to build a warehouse has to go through 22 procedures and take an average of 230 days. In this connection, will the Government inform this Council of:
(a) the reasons for the complicated procedures and long time required for processing applications for a licence to build a warehouse, and the new measures adopted by the authorities to simplify such procedures and abolish unnecessary regulations and restrictions for the business sector, in order to tie in with the implementation of the Mainland and Hong Kong Closer Economic Partnership Arrangement and to grasp any other new opportunities;
(b) when it will implement the composite licensing scheme, and whether the composite licences will be applicable to all trades; and
(c) the procedures and time needed to apply for a composite licence, with examples to illustrate?
Reply:
Madam President,
(1) Regarding Hong Kong's ranking in the recently released World Bank's (WB) "Doing Business Report 2006", the Administration is actively studying it with a view to improving any areas where we have not done so well and aiming even higher in areas where we have a leading edge. The report reflects the need for the Administration to continue with its efforts to improve the business environment in Hong Kong, and for concerned bureaux and departments to work closely to put in concerted efforts to more vigorously break down the regulatory barriers to business. Only in this way can we enhance Hong Kong's competitiveness in providing a good business environment in the global arena.
Hong Kong's 7th overall position among the 155 economies is still rather high, although for two major indicators, i.e., "dealing with licences" and "registering property", Hong Kong had not fared too well. This is also the main reason why Hong Kong's overall position had slipped from 4th to 7th place. In order to have a better understanding of the rationale behind the assessments, we have sought and analysed the relevant source data from WB. We found that, possibly due to a misunderstanding in communication between WB and the local agency providing the source data, there were significant discrepancies between the source data used by WB and the actual situation.
Hong Kong's position in "dealing with licences" was mainly based on the 22 procedures and 230 days required for processing an application for building a warehouse. However, according to factual data, it only takes 13 procedures and 110 days to process such an application. We consider that the use of warehouse building as a case scenario cannot reflect the economic situation and the overall environment for doing business in Hong Kong, given that Hong Kong is a highly service-oriented economy.
Regarding property registration, our procedures are in fact very simple. Property owners only need to register two documents, viz. "Transfer Assignment" and "Sales and Purchase Agreement" with the Land Registry. According to the performance pledge and operational experience of the department, the registration process for each of the two documents requires only 20 days, so the whole process can be completed within 40 days. The department has also pledged to further reduce the processing time for each of the documents from 20 days to 18 days. As regards the 83 days as indicated in the WB report, apart from the 40 days required for document registration, the rest of the processing time is not related to any government procedures.
We have reflected the above discrepancies to the attention of WB and sought his clarification. We have also made some suggestions in the hope that our communication with WB would be further enhanced and that similar erroneous situations would be avoided in future as far as possible.
(2) The concept of composite licence is to combine licences and permits with similar licensing requirements and conditions so as to reduce the number of licences required. Similar to composite licence, other facilitating measures, such as provisional licence, one-stop-shop service and private certification, can also simplify and speed up licensing process. The above mentioned improvement measures are not trade-specific. Having regard to the characteristics of individual trades and their operating environments, we will consider implementing suitable measures to improve the various licensing regimes.
The composite licence that is currently being considered by the Health, Welfare and Food Bureau and the Food and Environmental Hygiene Department (FEHD) will be applicable to the food retail business.
To implement the proposal, the Government will need to amend the Food Business Regulation (Cap. 132 subsidiary legislation). FEHD is considering the details of implementation and enforcement under the composite licence and will consult the trade. The department also plans to complete the legislative process for the composite licence in the next legislative year.
(3) We do not have an accurate estimate of the time required for the application of a composite licence since there are still quite a number of steps from its successful implementation. Nevertheless, we anticipate that the procedures and time required for applying a licence can significantly be reduced, as this new kind of composite licence will replace the current licences needed for different types of ready-to-eat food.
Ends/Wednesday, October 19, 2005
Issued at HKT 12:49
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