Following is a question by the Hon Lam Cheuk-ting and a reply by the Secretary for Constitutional and Mainland Affairs, Mr Raymond Tam, in the Legislative Council today (January 11):

Question:

     Mr Leung Chun-ying was elected Chief Executive (CE) in March 2012.  Before he was elected, Mr Leung resigned from the office of the Asia Pacific Director of DTZ in November 2011 and entered into an agreement in December of the same year with UGL Limited (UGL), which was then planning to acquire DTZ. The agreement stipulated that within two years upon completion of the acquisition, apart from not poaching any people from or competing with DTZ, Mr Leung would, in promoting the business of the UGL Group and the DTZ Group, provide assistance from time to time, which included acting as referee and adviser, in accordance with the reasonable requests made by UGL. Mr Leung received under the agreement a remuneration of £4 million in total in the first two years after his taking the office of CE, but he had all along failed to declare his interests relating to the agreement to the Clerk to the Executive Council (ExCo).  Upon revelation of the aforesaid agreement by the media in October 2014, some members of the public queried that such practice of CE involved a conflict of interests and his failure to declare the interests constituted a misconduct in public office. In response to such queries, the Government pointed out that (i) the agreement had been entered into before Mr Leung took office; (ii) the agreement contained a clause providing for the avoidance of conflict of interests, i.e. he would provide the aforesaid assistance to UGL only under the situation that such assistance would not create any conflict of interests; (iii) UGL had not requested him to provide any services; and (iv) he had never provided any services to UGL (the four conditions).  In this connection, will the Government inform this Council:

(1) whether, under the existing requirements, politically appointed officials, ExCo Members and civil servants may follow CE's practice, i.e. they may continue to implement agreements for provision of services to commercial organisations that were entered into before their taking office and are still in force thereafter (agreements entered into before taking office), and they may receive remuneration in accordance with such agreements without making any declaration or obtaining any approval, so long as the aforesaid four conditions are met; if they may not, of the reasons for that;

(2) whether it has studied if those types of persons mentioned in (1) will not contravene the Prevention of Bribery Ordinance and the relevant declaration requirements, and nor will they be liable for the offence of misconduct in public office, for accepting advantages, so long as they meet the aforesaid four conditions and have received such advantages in accordance with the agreements that were entered into before their taking office; if it has studied and the outcome is that this will be the case, how the Government will plug the loophole to maintain the corruption-free system in Hong Kong; and

(3) how the Government will handle the situation in which a person of the types mentioned in (1) is found to have failed to make declaration of an agreement that he entered into before taking office and has failed to fully implement that agreement; whether it will order such person to cancel the agreement concerned and return or refrain from receiving the relevant remuneration and, when the situation warrants, institute disciplinary proceedings or criminal investigation in respect of cases of conflict of interests, so as to allay public concern; if it will not, of the reasons for that?

Reply:

President,

     With regard to Member's question, after consulting the relevant offices and bureaux, I am providing a consolidated reply as follows:

     Public officers, including politically appointed officials (PAOs), Members of the Executive Council (ExCo) and civil servants, are governed by their respective systems for declaration of interests.

     The current declaration system for PAOs requires PAOs of all ranks to declare their investment, shareholding, direct or indirect interest in any company; their directorships, proprietorships or partnerships in any company; and, if any, the specific details concerning their participation in any private company's affairs. They are also required to declare any investment and interest held by themselves or in the name of their spouses, children or other persons, agents or companies, but are actually acquired on their account or in which they have a beneficial interest.  According to the requirements of the Code for Officials under the Political Appointment System (the Code), investments and interests declared by PAOs of all ranks in the prescribed form are made available on the websites of the respective offices/bureaux for public inspection. Such declarations will be updated annually.

     Moreover, the Code also requires that PAOs shall report to the Chief Executive any private interests that might influence, or appear to influence, their judgement in the performance of their duties. PAOs shall refrain from handling cases with actual or potential conflict of interest as well.

     For the ExCo, it has put in place a rigorous and well-established system for declaration of interests for all ExCo Members. This is to ensure that unbiased and impartial advice is offered by ExCo Members to the Chief Executive. The declaration system mainly comprises two parts.  The first part is regular declarations. On first appointment and annually thereafter, each ExCo Member should declare their personal interests, and the declaration includes (a) remunerated directorships; (b) remunerated employments, offices, trades, profession, and so on; (c) if the interests in the above two items include provision to clients of personal services which arise out of or relate in any manner to Members' position as ExCo Members, the clients' names should be declared; (d) land and property owned by Members in or outside Hong Kong; (e) names of companies or bodies in which Members have, either themselves or with or on behalf of their spouses or children, a beneficial interest in shareholdings; and (f) membership of boards, committees or other organisations. In addition, ExCo Members should declare to the Chief Executive on a confidential basis and in greater detail their financial interests, including shareholdings (irrespective of the amount) in companies as well as futures and options contracts, held by themselves or jointly with their spouses, children or other close relatives. The second part of the declaration system is declarations in respect of individual items discussed by the ExCo. It is the personal responsibility of every ExCo Member to examine whether he/she has an interest in any item discussed by the ExCo and declare it before the ExCo discussion. In line with the principle of confidentiality of the ExCo, the Government does not disclose the content of ExCo discussions or the related declarations of interests.

     All serving civil servants are subject to the Government Regulations, Rules, Circulars and Departmental Instructions that govern their conduct. The Government has established mechanisms to handle declaration of interests by civil servants and related disciplinary matters. Any person who has been appointed as a civil servant is required to observe the related requirements. If there is evidence that a civil servant has misconducted himself, appropriate action, including administrative or disciplinary action, will be taken against him in accordance with the established procedures.

     Furthermore, PAOs, ExCo Members and civil servants are all required to abide by the relevant requirements. The Independent Commission Against Corruption will enforce the law impartially and strictly, and handle all reports and cases against public officers suspected of committing an illegal act in accordance with the established procedures.

Ends/Wednesday, January 11, 2017
Issued at HKT 12:30

NNNN