Speeches and Presentations



LCQ8: Impacts of riots in Vietnam on Hong Kong businessmen

     Following is a question by the Hon Chung Kwok-pan and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, at the Legislative Council meeting today (June 25):

Question:

     It is learnt that quite a number of factories owned by Hong Kong businessmen in Vietnam were damaged during the anti-Chinese riots which happened earlier on.  The Secretary for Commerce and Economic Development indicated on the 21st of last month that he had tasked the Director of the Hong Kong Economic and Trade Office in Singapore (HKETO(SG)) to travel to Ho Chi Minh City to pay visits to the affected factories run by Hong Kong businessmen at the arrangement of the Hong Kong Business Association Vietnam, in order to gauge the local situation and follow up on ways to provide assistance to the Hong Kong businessmen there.  In this connection, will the Government inform this Council:

(1) whether it has compiled statistics on the number of Hong Kong businessmen affected by the anti-Chinese riots and the amount of their financial losses;

(2) of the follow-up actions taken by the officials of HKETO(SG) after inspecting the situation of the Hong Kong businessmen in Vietnam, including whether they have assisted the Hong Kong businessmen in seeking compensation from the Vietnamese authorities;

(3) given that, in responding to the suggestion for Hong Kong to sign an investment protection agreement with the authorities of Vietnam, the authorities have indicated that Hong Kong and the Association of Southeast Asian Nations (ASEAN) will commence formal negotiation on the Hong Kong-ASEAN Free Trade Agreement next month in order to strengthen the economic and trade relations between Hong Kong and ASEAN Member States, thereby allowing Hong Kong businessmen to have better access to the ASEAN markets as well as securing better protection, of the provisions for protection of Hong Kong businessmen to be put forward by the authorities in the negotiation of the agreement; and

(4) given that the several riots which occurred in the Asia-Pacific region in recent years have impacted on the investment projects and personal safety of the Hong Kong businessmen in that region, whether the authorities will consider taking measures to safeguard the lives and properties of Hong Kong businessmen investing there?

Reply:

President,

     My reply to the various parts of the question is as follows:

(1) Since the outbreak of large-scale protests in Vietnam, the Commerce and Economic Development Bureau has been closely liaising with the Hong Kong Business Association Vietnam (HKBAV) in Vietnam through the Hong Kong Economic and Trade Office in Singapore (HKETO(SG)) and the Office of the Hong Kong Trade Development Council in Ho Chi Minh City, with a view to keeping abreast of the developments in Vietnam and providing timely support and practical information.

     We have learnt from the HKBAV that eight of its members had their factories in Ha Tinh Province and Binh Duong Province damaged to different extent in the protests last month.  The Director of HKETO(SG) travelled to Vietnam during May 21-22 to meet with HKBAV and visit some of the affected Hong Kong-invested factories.  All eight factories have already resumed operation.  The enterprises affected by the incident are still assessing their losses.   

(2) The HKETO(SG) has been monitoring the situation of the affected enterprises since the visit to Vietnam. We understand from the HKBAV that all affected enterprises have taken out insurance for their factories in Vietnam, and have started to liaise with the relevant insurance companies and relevant Vietnamese authorities in respect of matters on insurance and claims for compensation.    

     The Hong Kong Special Administrative Region (HKSAR) Government has not received to date any request for assistance from Hong Kong enterprises in Vietnam in seeking compensation from the Vietnamese authorities.  Where any specific request for assistance is received, we will look into the matter and render assistance as appropriate and as far as practicable. In fact, during my attendance at the Meeting of Ministers Responsible for Trade of the Asia-Pacific Economic Cooperation last month, I have requested a meeting with the Minister of Industry and Trade of Vietnam to discuss the incident in Vietnam.  Apart from urging the Vietnamese Government to take appropriate actions to protect Hong Kong people and their properties in Vietnam, I have also requested that positive response be given to possible demand for compensation from affected Hong Kong-invested factories. I also understand that the Ministry of Commerce will request the Economic and Commercial Counsellor's Office of the Embassy of the People's Republic of China in Vietnam and the Economic and Commercial Section of the Consulate General of the People's Republic of China in Ho Chi Minh City to assist the Hong Kong business community in need in seeking follow-up arrangements from the Vietnamese Government in the aftermath of the protests.  The HKETO(SG) will inform the Hong Kong business community in Vietnam of this arrangement, and will render any necessary assistance.

(3) Hong Kong and the Association of Southeast Asian Nations (ASEAN) will commence negotiation of Hong Kong - ASEAN Free Trade Agreement (FTA) in July this year.  This FTA will contain provisions on promotion and protection of investments.  Drawing reference from the Investment Promotion and Protection Agreements (IPPA) already signed by Hong Kong with other economies, we will strive to provide comparable investment protection under the Hong Kong - ASEAN FTA.

     Generally speaking, an IPPA signed by Hong Kong stipulates that the investments and return on investments of investors of a contracting party should receive fair and equitable treatment in the area of the other contracting party.  In addition, an IPPA requires a contracting party to take such measures as may be reasonably necessary to ensure the protection and security of the investment of an investor of the other contracting party.  Moreover, an IPPA stipulates that investors and their investments should under various circumstances receive reasonable and non-discriminatory treatment.  In particular, a contracting party is obliged to make reasonable compensation in the event of expropriation by the authorities of investments of investors.  A contracting party is also obliged to make reasonable compensation for destruction of investors' properties by the authorities under certain circumstances during war or other emergency situations (including insurrection or riot).  

     An IPPA does not guarantee that a contracting party must make compensation for all investors of their losses arising from insurrection or riot.  The detailed execution in respect of each individual case depends on its actual circumstances and the specific provisions in the IPPA.  Furthermore, if an investment dispute between an investor of one contracting party and the other contracting party has not been settled amicably, the inventor can submit the dispute to arbitration in accordance with the IPPA's provisions.  The arbitration award shall be final and binding on the parties to the dispute.  Contracting parties shall ensure the recognition and enforcement of the award in accordance with their relevant laws.

(4) The HKSAR Government gives priority to the safety of the Hong Kong people overseas and their overseas properties.  We have been in close communication with the Office of Commissioner of the Ministry of Foreign Affairs of the People's Republic of China in the HKSAR and the Chinese Diplomatic and Consular Missions to various places, with a view to securing information on the latest local situation and providing assistance to Hong Kong people in those places when necessary.  The HKSAR Government also disseminates timely information on Outbound Travel Alert and other related information through various channels.  Hong Kong people overseas can also use the on-line Registration of Outbound Travel Information service of the Immigration Department (ImmD) to register their contact details.  The contact details provided allows the ImmD to disseminate practical information through appropriate means, including SMS on mobile phones, when necessary.

Ends/Wednesday, June 25, 2014
Issued at HKT 11:40