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LCQ3: Using industrial building units for arts, cultural, recreational and sports purposes
     Following is a question by the Hon Ma Fung-kwok and a reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (November 9):


     In June this year, a No. 4 alarm fire broke out in the mini-storages of an industrial building at Ngau Tau Kok Road.  Subsequently, the Lands Department (LandsD) takes risk-based enforcement actions against lease breaches involving the change of uses in industrial buildings. LandsD will issue warning letters to owners of industrial building units involved in lease breaches, requiring them to rectify the breach of uses within 14 days, or else LandsD will initiate the procedure for re-entering such units. In this connection, will the Government inform this Council:
(1) of the number of cases to date in which LandsD has issued warning letters; among such cases, the number of those related to lease breaches involving uses of industrial building units for arts, cultural, recreational and sports purposes; whether the authorities will give consideration to stakeholders' views and grant longer grace periods to the persons concerned in those cases of lease breaches that do not involve high fire safety risk; if they will not, of the reasons for that;

(2) of the criteria currently adopted by LandsD for assessing the fire safety risk involved in using industrial building units for arts, cultural, recreational and sports purposes, as well as the criteria adopted for assessing such risk involved in other non-industrial uses like mini-storages, scientific researches, etc. in industrial building units; if the two sets of criteria are the same, of the reasons for that; and

(3) as there are views that the enforcement actions taken by LandsD run contrary to the direction of the policy, put forward earlier by the authorities, that the restrictions on non-industrial uses in industrial buildings be appropriately relaxed to better utilize the existing spaces in industrial buildings, whether the authorities will expeditiously revise the definition of "industrial use" set out in the Hong Kong Planning Standards and Guidelines as well as the relevant fire safety requirements, so as to avoid compressing the room for survival of the arts, cultural, recreational and sports industries; if they will, of the details; if not, the reasons for that?



     Having consulted the Security Bureau and the Home Affairs Bureau, my reply is as follows:
     For part one and part two of the question, on July 15, 2016, the Government announced the risk-based enforcement arrangements against lease breaches in industrial buildings, targeting units in breach of the lease matching two conditions: (i) there are other premises in the same industrial building currently issued with Licences for Manufacture and/or Storage of Dangerous Goods (DGLs) by the Fire Services Department (FSD); and (ii) the uses attract the flow of people.
     The Lands Department (LandsD) will adopt a stringent approach and take measures to re-enter units in these cases which pose a higher risk, with a view to urging the parties concerned to rectify the breaches as soon as possible. The regulatory arrangements aim at protecting the safety of members of the public accessing the units, because such conditions will pose an obvious risk to those accessing the industrial buildings but are unfamiliar with the setting.
     As of October 18, 2016, the District Lands Offices (DLOs) under LandsD had inspected a total of 15 industrial buildings targeted for risk-based enforcement action, involving 92 premises. Of the 92 cases, there were 53 in which the breach of uses had been rectified before warning letters were issued, 12 required further investigation, and 27 were confirmed to have breached the uses specified in the lease, with LandsD having issued warning letters requiring that the breach of uses be rectified within 14 days.  Among them 24 cases had rectified the breach before expiry of the warning period; three cases had proved their rectification of the breach before the completion of the re-entry procedures by LandsD, and as a result, there was no need for the department to continue its re-entry action. The above-mentioned 27 confirmed breach cases involved uses including learning centres, places of entertainment/recreation, shops and religious gathering places.
      As for other categories of lease breaches in industrial buildings, LandsD will continue with its current arrangement: namely, DLOs will, in general, issue a warning letter to the owners requiring that the breach of uses be purged within 28 days. If the breach is not rectified upon expiry of the warning period, DLOs will register the warning letter at the Land Registry (i.e. commonly known as "imposing an encumbrance"), and reserve the right to take further lease enforcement action in the future.
      In other words, the risk-based enforcement arrangements are by no means a stringent across-the-board measure for handling cases in breach of the lease by re-entering units. The target of lease enforcement is not to strike a blow against any individual industry either. In fact, regarding the concern raised by the Hon Ma Fung-kwok about arts, cultural, recreational and sports uses, for lease breaches of uses not attracting the flow of people (such as self-occupied cultural/creative workshops), or breaches involving the flow of people but the industrial building has no premises currently issued with DGLs by FSD, or, they are not currently targeted for stringent enforcement action by LandsD.

      From the fire safety point of view, FSD suggests that commercial and other activities that will attract members of the public, such as operating learning centres, places of entertainment/recreation, shops, restaurants, religious gathering places, etc. in industrial buildings is unacceptable, because industrial activities in industrial buildings carry much higher risks of fire and other accidents than commercial and other activities. Moreover, industrial operations and production processes usually involve the use of dangerous goods, and dangerous goods stores and storage of a large quantity of dangerous goods may exist in industrial buildings, leading to an even higher fire risk. For example, leakage of chemicals may happen during loading and unloading of dangerous goods in industrial buildings, which will pose hazards to visitors.
      In addition, if commercial and other activities that attract members of the public take place in industrial buildings, visitors (especially children, the elderly and persons with disabilities) may not be aware of the potential risks involved in industrial buildings and may not know how to evacuate if necessary. Such visitors will face severe threats in case of fire and other calamities in industrial buildings.

     For part three of the question, according to the Definition of Terms used by the Town Planning Board (TPB) in interpreting the planning terms used in statutory plans, "Industrial Use" means the use of any place, premises or structure related to industrial processes. The TPB reviews and amends the definition of "Industrial Use" from time to time based on the social and economic development needs of Hong Kong. The current definition of "Industrial Use" has been extended to cover design, research, development and training related to industrial processes. Such definition is broader than the coverage under the definition of "Factory" under the Factories and Industrial Undertakings Ordinance.

      Besides, to allow more flexibility in the use of industrial buildings, the scope of uses that are permitted in those buildings in the 'Industrial" ("I") zone has been widened to cover certain uses related to creative industries and music since 2001. In view of the recommendations of the Area Assessments of Industrial Land in the Territory conducted by the Planning Department (PlanD) in 2014, the restrictions on non-industrial uses, especially those uses that will not constitute concerns on building safety and fire risk or cause nuisances to other users in the same building, have been further relaxed with a view to further optimising the use of existing industrial buildings. In this connection, a total of 12 outline zoning plans (OZPs) have been amended from 2015 to mid-October 2016 to include "Art Studio" as an always permitted use in industrial-office buildings in "I", "Other Specified Uses" annotated "Business" and "Residential (Group E)" zones. However, such art studios should not involve direct provision of services or goods.  Similar amendments would be made to other OZPs in future when suitable opportunities arise.

      As to whether an industrial building unit used for the purposes of arts, cultural, recreational and sports purposes is in breach of the land lease depends on the actual operation and the lease conditions of the relevant lot. If the land lease stipulates that the lot shall only be used for "industrial" or "industrial and/or godown" purpose, arts, cultural, recreational and sports uses are in general in breach of the land lease, but owners may apply to the respective DLOs under LandsD for a temporary waiver or lease modification permitting the intended use. In processing the applications, DLOs will consult the relevant departments including PlanD and FSD. If the intended use complies with the requirements of the town plans and/or obtains the necessary planning permission, DLOs will, depending on the comments received, consider in the capacity of the landlord whether to issue a temporary waiver or modify the lease conditions to approve the use. If the application is approved, the applicant will have to pay a waiver fee/land premium and an administrative fee, and accept other terms and conditions stipulated in the modification letter and waiver.

      In considering the relaxation of non-industrial uses in industrial buildings, the most important principle is not to constitute significant fire safety risk. At present, industrial activities including those involving storage of dangerous goods are still found in many industrial buildings. Fire safety risk would be increased if activities attracting large flow of people are held in these industrial buildings.  We have to be cautious in handling the issue.
Ends/Wednesday, November 9, 2016
Issued at HKT 16:07
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