Monthly Archives: May 2014

Water supply suspension in Sai Kung

Yesterday afternoon, the water supply for the entire Sai Kung area was suspended due to a system fault at the Pak Kong Au reservoir. At the time of this writing, there is still no running water in the Sai Kung area although it is supposed to return during the course of the afternoon.

That is the bad news. The good news is that this is one of those instances (or areas) where Hong Kong still functions well. Within an hour or so of the suspension, truckloads of water had been ferried to Sai Kung and residents, shop owners and restaurateurs eagerly lined up to fill their buckets. In fact, the lines were fairly short as quite a few of these mobile water tanks were positioned around town.

I wondered why it is that Hong Kong still manages to function well in this type of situation, when so much else is falling apart in front of our eyes. My first thought was that water supply is not a particularly political issue, so things have probably been left fairly untouched over the past 17 years, with the old structures and arrangements still in place. By this I mean the way the Water Supplies Department is run, manned, organised and so on. So the excellent response and contingency measures put in place seem to be down to the fact that there is a tried and tested, robust system in place for dealing with such matters and eventualities.

But why can the same not be said for, say, the MTR, which is constantly in the news these days, for overcrowding, broken trains, faulty lines, cost overruns, poor management etc. One difference would seem to be that the MTR is far more subject to political considerations, for instance through its many real estate ventures, its role in the highly controversial high-speed rail link to China, or even the fact that so much of the overcrowding is due to people using the MTR to carry goods. Somehow, possibly due to the political sensitivity of banning the transport of bulky items on the MTR (or at least charging people for it), the MTR is paralysed and the old structures put in place 35 years ago are no longer adequate. The government’s latest response is to place a high level government official on the MTR’s board – something that is sure to make matters worse.

Just like the Water Services Department, the MTR should be left to do what it was meant to do from the outset, transport commuters around town, and it will do just fine.

The Hong Kong Basic Law and Universal Suffrage

Hans Mahncke

Photo: Hans Mahncke

Almost every day we hear and read about the differing views on introducing universal suffrage in Hong Kong. The only thing that everyone seems to agree on is that whatever kind of universal suffrage is to be introduced, it should be compatible with the Basic Law of Hong Kong. This makes sense, since any election law which contravenes the Basic Law would be invalid. The problem, of course, is that everyone seems to have a different view on what the Basic Law says and on what it allows.

Whenever these types of questions arise, I always find it useful – rather than listen to all that is being said – to look at the primary source, the text of the agreement itself. The relevant part of the Basic Law which everyone seems to be arguing about is Article 45. In relevant part it says:

The method for selecting the Chief Executive shall be specified in the light of the actual situation in the Hong Kong Special Administrative Region and in accordance with the principle of gradual and orderly progress. The ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures.

The first thing that sticks out is that universal suffrage is not guaranteed, it is merely the “ultimate aim”. Assuming that in 2017, i.e. 20 years after the handover, Hong Kong will have reached the point where everyone agrees to effect that ultimate aim, how is that ultimate aim to be effected? In this respect, it is inescapable that candidates will have to be nominated before any election can take place. It is also inescapable that nomination has to be performed by a “broadly representative nominating committee”. This, in a nutshell, is the argument which pro-Beijing forces incessantly recite. However, as pro-democracy advocates point out, there is no guidance on what “broadly representative” means. So while the former wants to retain the existing nominating committee of 1200, the latter camp is suggesting that the committee could in theory comprise millions of people.

While this issue really does seem to be intractable, I have seen or heard few people consider the last part of the sentence, “in accordance with democratic procedures“. The first question is which preceding part does this last part qualify. Is it the Chief Executive selection? It seems not, as the selection itself is already qualified by the term universal suffrage. But is it the nominating committee which has be chosen in accordance with democratic procedures, or is it the actual nominating which has to be done in accordance with democratic procedures? Personally, I tend towards the latter, simply because if it was the former, we would probably find the words “to be chosen” inserted between the terms “nominating committee” and “in accordance”. Further, the term “broadly representative” already seems to qualify the term “nominating committee“. However, it is also possible to regard the term “in accordance with democratic procedures”  as a catch-all proviso providing that both the selection of candidates and the composition of the nominating committee is subject to democratic procedures.

Overall, Article 45 evidences the sort of diplomatic compromise wording which can be found throughout the Basic Law – something that is hardly surprising, given that the whole document is essentially a compromise reached between fairly divergent belief systems. What can be said, however, is that universal suffrage, if it is to be introduced, will only extend to choosing amongst already nominated candidates. The most convincing argument the pro-democracy camp could make is that the nominating itself is subject to democratic procedures, as is the case in many democratic states. In other words, the nominating committee could be regarded as something akin to the electoral college in the United States, in the sense that it would take on a largely symbolic role, merely giving effect to the the nomination wishes expressed by the public “in accordance with democratic procedures“.

Judicial review of the TV licenses decision

As many will recall, last summer there was public outcry over the government’s decision not to grant HKTV a TV license. It was widely reported (or speculated) that the decision to grant all other applicants a license but not HKTV was politically driven, perhaps because some may not regard HKTV owner Ricky Wong as a reliable government supporter. Who knows?

As mentioned here before, and as with so many botched or politicised decisions, the HKTV decision also went to the High Court to be subjected to judicial review. In fact, there are two judicial reviews of the decision under way. One made by two individuals and the other by HKTV itself. None of this would not happen in a democratic setting as those making the decision would be politically accountable to voters – something that is not the case in Hong Kong. In other words, it would be far less likely that a government would deny its citizens an additional TV channel if they had to pay a political price for their actions.

According to this report, the case brought by the two individuals is to be decided within two weeks. It will make for very interesting reading to see how the judge will deal with this and what impact the decision will have on the other judicial review, involving HKTV itself.

The Hong Kong Competition Commission

Here’s a little supplement to yesterday’s post about the the Hong Kong Competition Commission. Turns out that not only has the introduction of the Hong Kong Competition Law been delayed, and not only is there some phantom consultation which no one seems to know about, but now we also have the Competition Commissioner, Anna Wu, saying: “We always wanted to tackle the ‘big tigers’ first as they seriously affect the market, but there will be difficulties in obtaining evidence“.

All of us who have been part of the competition law debate this past decade or so remember that one of the chief arguments – if not the main argument – for having the law was that we needed the law in order to break the supermarket duopoly: Wellcome and Park n Shop, owned by Jardine Matheson and Hutchison Whampoa respectively.

What will also be recalled is that many of those arguing against having the law, including myself, were saying that the ‘big tigers’ in Hong Kong are far too entrenched and far too close to the government for this new law to have any palpable effect on competition in the markets. Instead, there may be a few ‘alibi’ investigations and the big tigers will likely be left untouched. In fact, we argued that the government could clip the wings of the big tigers by changing the land system or by way of existing laws (e.g. restraint of trade). But, of course, the government never had any intention of going after the big tigers.

Some may say that this is a rather cynical view, but the way that Hong Kong is run, I think it is still a very realistic assessment. Certainly, Anna Wu’s statement does nothing to allay fears that the Competition Commission is just another paper tiger. Something that might please an international audience, another way of giving the elites some nice-sounding jobs, e.g. ‘Competition Commissioner’, and that’s about it.

By chance, as I was buying some chocolate milk today, I noticed that Park n Shop has just ‘reduced’ the price of two cartons to $ 37.8.

Park n Shop. Photo: Hans Mahncke

Park n Shop. Photo: Hans Mahncke

A few minutes later, I happened to step in the local Wellcome and, lo and behold, the very same brand of chocolate milk had also just been ‘reduced’ to $ 37.8 for two.

Wellcome. Photo: Hans Mahncke

Wellcome. Photo: Hans Mahncke

In fact, even a cursory glance around those shops reveals that pretty much all prices are matched, cent for cent. The chocolate milk is just one of many examples, although a particularly striking one, considering the implausibility that the same product just happened to be ‘reduced’ to the exact same price, down to the cent, at exactly the same time. The evidence of at least ‘coordination’ amongst so-called competitors is right there for all to see – the real question is whether Anna Wu and her cohorts will do something about it.

Competition law consultation

Photo: Hans Mahncke

Photo: Hans Mahncke

A year and a half has passed since the enactment of the new Competition Ordinance (Cap 619). Yet, the law is still not in operation while we wait for the Competition Commission to do whatever it is that they do.

As if to make sure that everyone knows that they are doing something, the Competition Commission has, according to the Commission’s chairwoman, started a two-month consultation on guidelines covering the law. I know this because it was reported on RTHK. I have not seen it announced anywhere else, which is a bit odd. I’ll post more details here if and when I find them.