The Rule of Law In Hong Kong

The Hong Kong Research Association commissioned a telephone survey of 878 Hong Kong citizens during April 4-6.  Here are the key results (in the print edition of Sing Tao, April 8):

How long should the term of the replacement Chief Executive be?
- 50%: 2 years (that is, the completion of the remainder of the term of former Chief Executive Tung Chee-hwa)
- 33%: 5 years (that is, the normal term for a Chief Executive)
- 17%: no opinion

How should the dispute be resolved?
- 36%: The Hong Kong SAR government should seek an interpretation from the National People's Congress
- 25%: Revise the regulations on the election of the Chief Executive
- 12%: The National People's Congress should revise the Basic Law
- 27%: No opinion

A legislative councilor has applied for a judicial review.  Are you concerned that the by-election will not take place as scheduled?
- 40%: Concerned
- 35%: Not concerned
- 25%: No opinion

Is the legal system in Hong Kong being misused?
- 47%: Yes
- 29%: No
- 23%: Not sure

Separately, the New Territories Community Association announced that it had surveyed 1,100 persons.  The organization is considered to be pro-Beijing, which is why the survey questions are pointedly directed against the democrats.  Here are the summary results (Ming Pao via Yahoo! News):

Given that independent legislative councilor Chan Wai-yip has asked for a judicial review, should the Hong Kong SAR government seek an interpretation from the National People's Congress?
- 49%: yes
- 32%: no

Why are the democrats opposing the two-year term?
- 47%: for political reasons
- 28%: for legal reasons

The next bit is not a poll but a hypothetical Q&A with a citizen in the Sing Tao editorial commentary.

Q:  What do you think the debate about the term of the Chief Executive is about?
A: The Basic Law was unclear about the term of the replacement Chief Executive, and there are people who argue for or against.  That is why we need "Daddy" (who wrote the Basic Law) to interpret.

Q: What are your thoughts when the barristers say that an NPC interpretation is against the rule of law?
A: The barristers believe that the rule of law means that everybody must listen to what they say!  Nobody else counts for them.  If the Basic Law is unclear, then it should be clarified.  But these barristers don't like "Daddy" and so they object strenuously.

Q: The barristers say that it was "shameless" for the government to recommend an NPC interpretation.
A: (getting emotional) These people go and apply for legal aid to file lawsuits against the government, thereby wasting taxpayers' money.  That is what is truly 'shameless.'  Common citizens only want a smooth election of a Chief Executive who can improve the economy.  We don't want these people to create so many distractions.

The commentator hypothesized that rising disaffection with the barristers of the Article 45 Concern group is very much tied in with the Link REIT affair.  This week, barrister Ronny Tong shed tears at the Legislative Council about the three occasions after the 1997 return when the NPC stepped in to 'interpret' the Basic Law.  Each occasion was characterized as a deal in which the rule of law was sold out, and the people of Hong Kong were the victims.

The contrarian position was that the rule of law is very much in place, except that it is being manipulated and getting out of control.  Ronny Tong was alleged to have inspired fellow legislative councilor Albert Cheng to use the legal system to derail the Link REIT offering with a series of delaying procedural manipulations.  If that had not happen, the citizens might have been much more receptive to relying on a judicial review instead of an NPC interpretation.  The Link REIT affair showed 510,000 investors and others how someone might use procedural actions to delay the by-election.

There is another proposal that the courts should have been allowed to go through the judicial review.  Afterwards, there are two outcomes.  If the judicial decision meets the government's wish, then all is well and the rule of law is intact.  But if the judicial decision does not meet the government's wish, then the NPC interpretation will be the last resort to overturn the court decision.  Can you spell: SHAM!!!???  The only people who can even think this are the lawyers who stand to make bundles of money during the judicial review.

Meanwhile, The Sun (via Yahoo! News) also summarized the 60 letters of opinion received by the government since last month.  As such, this is a self-selected sample that is not representative of anything (except itself = the tiny group of compulsive letter writers).  More hostility to the barristers was noted, but here is my favorite quote: some barristers "love to sit on the toilet and nap" (愛坐在馬桶上打瞌睡).  Sadly, this is what passes off as civil discourse these days.  These letters will be placed in public exhibit next month.  I will make sure that I give it a miss.

There is speculation about the coming public march against the government's request for an NPC interpretation.  The marchers will be ... guess who?  ... members of the legal community.  So instead of dealing with the highly problematic scenario of "What if they called the population out to march and only barristers show up because the rest of the people couldn't care less?" they have opted call a march of the barristers and the barristers will show up because they will support anything that results in more litigation ...

And now for something completely different, even though the subject is still the rule of law in Hong Kong.

In Hong Kong, there are many government-owned food markets from whom commercial operators can rent stalls.  The rental rates are determined by open bidding, so that there is a great deal of transparency.  This is a market where supply-demand sets the fair rate.

But not so fast!  The Ombudsman's office of the Food and Environmental Hygiene Department has been investigating the situation, and found 213 instances of potential abuse of the bidding system since 2001.

Here are the case studies (Ming Pao via Yahoo! News):

Person "A" is related to a stall operator.  Since April 2002, on four separate occasions, "A" submitted a bid for a stall adjacent to his relative and won with high bids on each occasion.  Within 12 to 20 days, "A" terminated his contract, causing the stall to remain vacant for over 22 months in total.

Person "B" operates a food stall.  Since October 2003, "B" directed his assistant to bid for the adjacent stall.  Within 5 to 7 days, the assistant terminated the contract, causing the stall to remain for over 10 months in total.

Person "C" has a relative who operates a vegetable stand in a Wongtaisin market.  Between October 2002 to May 2004, "C" submitted bids for the two stalls adjacent to his relative for a total of five and four times respectively.  His bids were between 100% to 240% higher than the next highest bids.  After the successful bid, "C" would discontinue the contract within a month, with the shortest period being 5 days.  The two adjacent stalls have been vacant for more than 20 months in total.  When this reporter came to see this stall, she found that the occupied stall had taken over the space for all three stalls.  When our reporter asked the female operator: "Why are your merchandise taking the space of those stalls whose contracts were terminated?", the woman started cursing with foul language and said: "This is business.  I am just a substitute worker.  I know nothing.  Don't bother me!"  There are about 20 vegetable stands in this market and another female operator shrugged and said: "This is such a big market with so many vegetable stands.  Not even Tung Chee-hwa can monopolize the business!" 

For these cases, the sum total of lost rental income to the government is in the millions of dollars.

According to the July 2004 'Economic Freedom of the World: 2004 Annual Report', Hong Kong has the freest economy in the world and has been so ever since the index of economic freedom since 1996.  But that does not mean that there is no government intervention through rules and regulations, and this is a perfect example.  

Using the typical Hong Kong ingenuity, the stall operators observed that it is possible to eliminate competition with inflated bid prices for stalls and then abandoning the contract afterwards.  From The Standard, market stalls are auctioned off for up to  HK$10,000 with the owner having to pay between HK$5,000 and HK$6,000 a month in rent.  However, the winner can terminate the three-year tenancy without any reason and no penalty imposed, and it takes about five months for the stall to go back on the auction block.  This is anti-competitive and anti-free-market, but it is also legal. 

So it is up the government to change the rules and regulations.  While the government has cut down the lag time from 5 months to 3 months before the stall goes back for auction, there is still room for mischief since the profits exceed the bidding cost.  The government will also penalize those who break their contracts prematurely, but again it may still be profitable to do so.  The government has also compiled a blacklist of serial offenders who will be blocked from bidding, but this is seriously underestimating the size of extended Chinese families and social networks.  In fact, there may even come a secondary market of clean names to rent for this purpose.