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Speech by SCIT at InterChambers of Commerce Luncheon Meeting (English only)

    Following is a speech by the Secretary for Commerce, Industry and Technology, Mr John Tsang, at the InterChambers of Commerce Luncheon Meeting today (January 20) (English only):

     Thank you for your warm welcome and kind introduction.

Ladies and gentlemen,

     When I last spoke to some of you on December 8 last year, just a few days before the curtain for the WTO Ministerial Conference was raised in Wan Chai, I mentioned that I would like to meet with you again shortly after the conference to talk about the outcome achieved, which I audaciously predicted would have great significance on the shape of the world economy in the medium and longer term.

     I am, therefore, hugely delighted to have this opportunity today, more than a month after the conference, to address again distinguished members and affiliates of the Inter Chambers of Commerce. I would have liked to speak to you right after the conference when the results were still fresh and warm, but owing to scheduling problems, by the time we were able to organise this luncheon today, I have already spoken on the outcome of the Hong Kong Ministerial Conference rather extensively on a number of public occasions. I do not wish to bore you with much repeated sound bites and reiterations of old news. I intend, therefore, to highlight today only the key outcomes of the conference, leaving you the opportunity, if you so wish, to ask specific questions later on areas that are of interest to you.  

     However, in order to guard the reputation of the Inter-Chambers as an organisation that does not short-change its members, and that its many functions always provide the best value for money for its participants, I shall, in addition to MC6, talk to you on another very important subject which should be of immediate interest to you and our business community. So you are getting two for the price of one.

     First, the Hong Kong Ministerial Conference. It is now over a month since we concluded the conference. I am glad that, through Members' determination, the conference had put the Doha round negotiations back on track with the successful conclusion of the Hong Kong Ministerial Declaration.  

     The most important achievement of the Hong Kong Conference is the agreement to eliminate all forms of agricultural export subsidies by 2013, with a substantial part of the elimination to be realised by the end of the first half of the implementation. This is an achievement of considerable significance, since export subsidies are widely regarded as the most trade distorting form of support.

     Another major achievement of MC6 is in the area of development. As Chair of the conference, I am particularly pleased that a development package which I thought should be achieved in Hong Kong, and one that I have been pushing for some months, has become a reality. Notably, Ministers agreed that all Developed Members, as well as Developing Members declaring themselves in a position to do so will, from 2008, grant tariff-free and quota-free market access for eventually all products, including cotton, of the least-developed economies. And specifically on cotton, all forms of export subsidies will be eliminated by Developed Members in 2006.

     But what is in the Hong Kong Ministerial Declaration that is good for Hong Kong? In the area of services, Ministers will intensify negotiations and plurilateral request-and-offer negotiations in 2006. Hong Kong will ensure that those areas where our services suppliers possess an edge will progress in the direction of delivering new business opportunities. In the area of industrial products, we will build on the Swiss formula adopted by Ministers in Hong Kong to ensure that higher tariffs will be subject to higher cuts.  

     We have set ourselves an ambitious timeline: to put flesh to the actual liberalisation mechanism for both agriculture and industrial products by April this year. This is not going to be an easy task. But in Hong Kong last year, we have succeeded in giving our next stage of work the best possible launching pad. We have every reason to be proud of that achievement.

     I now turn to a completely different subject which is also close to your heart. It is the issue of unsolicited electronic messages or what we colloquially call SPAM. We intend to commence with our final phase of public consultation on our proposed anti-spam legislative proposals this afternoon.

     You may recall that I announced last year a multi-faceted approach to contain the problem of unsolicited electronic messages, with a basket of measures under the "STEPS" campaign. "STEPS" represents a basket of five measures with "S" standing for strengthening existing regulatory measures, "T" for technical solutions, "E" for education, "P" for partnership and "S" for statutory measures.  

     The second "S" includes the introduction of a dedicated piece of anti-spam legislation. Last year, after engaging stakeholders in a series of discussions on proposals for the legislation, we put together a draft legislative framework that was presented to the Legislative Council Panel on Information Technology and Broadcasting in July last year.

     We have since then been working diligently on refining the draft framework, and I am pleased to inform you that we have now come up with detailed legislative proposals for the anti-spam legislation for public consultation. While my colleagues will explain in greater detail the legislative proposals at a press conference this afternoon, I would like to highlight for you here some of the key aspects of the anti-spam legislation, entitled the Unsolicited Electronic Messages Bill.

     First, since the bulk of unsolicited electronic messages in Hong Kong are of a commercial nature, we propose to regulate only electronic messages of such a nature under the Unsolicited Electronic Messages Bill. Non-commercial communications from governments, political parties, religious groups, charities or individuals will not fall within the ambit of the Bill. Regulating unsolicited electronic messages of a commercial nature will ensure that regulation is needs-driven. It should also put the minds of sceptics and conspiracy theorists at ease in that there is no question of Government using the proposed anti-spam legislation to restrict freedom of speech and freedom of expression in Hong Kong.

     Second, in view of the rapid development of information and communications technology, we propose to adopt a technology neutral approach and bring within the ambit of the Bill generally all types of electronic messages. This will not only bring the notorious spamming problem areas, such as e-mail, fax and pre-recorded voice messages, within the regulatory framework, but will also cater for new types of electronic messages that may spring up in future in response to technology and service developments.

     We recognise that it is generally accepted practice in Hong Kong for sales persons to make personal telephone calls to promote certain products or services to existing or potential clients. Such promotion calls require the business entity undertaking the promotion to devote substantial manpower resources and time. To leave room for such normal and legitimate marketing activities, we propose to exclude normal person-to-person telephone calls from the ambit of the Bill.

     Third, like all economies with anti-spam legislation, we have been agonising over whether we should have an "opt-in" or "opt-out" regime. An "opt-in" regime requires the sender of commercial electronic messages to have obtained consent from the recipient before he could send commercial electronic messages to that recipient. An "opt-out" regime on the other hand requires the sender of commercial electronic messages to stop sending further such messages to a recipient if the recipient so requests.  

     We have given thorough consideration to the pros and cons of these two regimes. While we accept that the "opt-in" regime can be seen to provide a higher standard of protection for recipients of electronic messages, it is doubtful whether it could substantially reduce the amount of spam we receive in practice. For one thing, I do not believe that illicit spammers trying to sell you special products will stop doing so even if an "opt-in" regime is in place. Besides, an "opt-in" regime could create a substantial obstacle for small and medium sized enterprises and start-up businesses to use electronic communications as a low-cost means to promote their products and services.  

     An "opt-out" regime, on the other hand, would provide companies with room to promote their products, and in turn facilitate development of SMEs. It also provides opportunities for recipients to browse through promotion information before deciding whether to receive further messages. On balance, we have decided to stick to our original proposal of an "opt-out" regime, and address its shortcomings separately.

     Fourth, to address one of the shortcomings of the "opt-out" regime that a recipient of commercial electronic messages needs to unsubscribe from many senders, we propose to implement a system of "do-not-call registers" to support the "opt-out" regime. Once an electronic address is placed in such a register, the legal effect will be the same as sending unsubscribed messages to ALL e-marketers that no further commercial electronic messages should be sent to that electronic address. Naturally, the do-not-call registers should not stop anyone from making arrangements with individual e-marketers for receiving commercial electronic messages from those e-marketers. You can still choose to receive messages of special offers from certain specified senders, such as your favourite restaurants.

     I would like to caution, though, that the system of do-not-call registers may not be suitable for all types of electronic communications. For instance, the Federal Trade Commission, the spam regulator in the United States, undertook an in-depth study and concluded that without a system in place to authenticate the origin of e-mail messages, a do-not-e-mail register would fail to reduce the burden of spam on the e-mail addresses on the register.  

     Indeed, such a register would be a gold mine for illicit spammers seeking a list of valid e-mail addresses to spam. We, therefore, propose to leave it to the Telecommunications Authority to consider which types of electronic addresses are suitable for do-not-call registers. At this stage, we think do-not-call registers should be suitable for pre-recorded voice messages, fax messages and SMS/MMS messages.  

     Fifth and last, we propose to give extra-territorial application to the Unsolicited Electronic Messages Bill. We originally intended to focus our enforcement effort on acts occurring in Hong Kong. However, we have reviewed the issue and decided to give a broader applicability to the Bill. So long as there is a Hong Kong connection, or "nexus", for an electronic message, the message should be required to comply with the requirements in the Bill. For instance, an electronic message originates from Hong Kong, or one that is sent to an electronic address in Hong Kong, would come under the ambit of the Bill.  

     This extra-territorial application will facilitate co-operation with overseas law enforcement agencies and send a clear signal to overseas spammers that their act would not be tolerated. Frequent travellers, like many of you here, could take comfort that your Hong Kong mobile phone numbers are Hong Kong electronic addresses, even if you are roaming in an overseas country. Thus, if you have included your Hong Kong mobile phone numbers on a do-not-call register and an unscrupulous e-marketer still sends you pre-recorded promotion messages in the middle of the night while you are in New York, that e-marketer has breached the regulatory regime and would be subject to enforcement action by the Telecommunications Authority. And if you should feel aggrieved by such calls, the Unsolicited Electronic Messages Bill would empower you, as a victim, to seek in court remedies from the spammer, including compensation by way of damages for the pecuniary loss that you have suffered.

     Ladies and gentlemen, I have shared with you a glimpse of the legislative proposals we are putting forward for public consultation. The public consultation paper to be released this afternoon contains much more detail. I hope you could find some time to obtain a copy of the paper from our website and give us your thoughts on our proposals. The consultation period will last two months until March 20, 2006.

     Thank you for your attention.

Ends/Friday, January 20, 2006
Issued at HKT 15:29


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