Major Speeches, Presentations and Press Releases

LCQ20: Vetting procedures for compensation cases by Hongkong Post

    Following is a question by the Dr Hon Elizabeth Quat and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (June 24):


    Some members of the public have relayed to me that in recent years, Hongkong Post (HKP) has incurred losses year after year and its performance has been declining, giving the public the impression that its management is chaotic and poor. It has also been reported that some swindlers have made use of the loopholes in HKP's compensation mechanism for loss of mails by orchestrating cases of mails lost by HKP for making repeated claims for compensation. Although HKP's frontline staff have relayed to the management their suspicions about the cases, the management did not take any action to curb those frauds. In the past five years, the total amount of compensation made by HKP for loss of mails amounted to $16 million. In this connection, will the Government inform this Council:

(1) of the number of cases handled by HKP in each of the past five years involving reported loss of mails by HKP, and the total amount of compensation made;

(2) whether HKP has assessed the financial implications on the department of its deployment of resources in the past five years to handle cases of reported loss of mails by the department; if HKP has, of the outcome;

(3) whether HKP currently has in place any mechanism to prevent abuse of the compensation mechanism for loss of mails; if so, of the details; if not, the reasons for that;

(4) whether it has investigated if collusion between the management personnel of HKP and the swindlers, dereliction of duty or improper supervision on the part of the management personnel are involved in their not taking any follow-up action despite receiving reports of suspicious claims for compensation; if it has, of the outcome;

(5) whether HKP stepped up training for frontline staff and staff at the middle level in the past five years so as to enhance their efficiency in handling the relevant matters and their ability to cope with contingencies; if HKP did, of the details; if not, the reasons for that; and

(6) whether it will review the management and mode of operation of HKP; if it will, of the details; if not, the reasons for that?



    Compensation will be paid under specified circumstances (e.g. confirmed loss of specified types of mail after posting) in accordance with the postal service conditions of Hongkong Post (HKP). HKP has put in place a set of vetting procedures for processing mail compensation cases so as to ensure that compensation claims will only be approved if they are fully justified and substantiated by supporting documents. My reply to the six parts of the question is as follows:

(1) Annual figures on compensation made for mail loss cases in 2010 - 2014 are set out in the Appendix.

(2) HKP handles about 1.2 billion mail items annually, the great majority of which have been processed in a secure manner. Only a very small proportion of mail items were lost and thus required compensation. Furthermore, in over 90 per cent of the compensation cases for outbound mail items, the destination postal administrations and mail conveyancing agents were held liable for the loss and hence the compensation, i.e. the compensation was not paid by HKP. In addition, compensation claims are handled by the same staff normally responsible for answering mail enquiries. Therefore, processing compensation claims has not brought significant financial implications on HKP.

(3) and (4) HKP processes compensation claims in accordance with the regulations stipulated by the Universal Postal Union, and has laid down a set of vetting procedures to ensure that compensation claims will only be approved if they are fully justified and substantiated by supporting documents (including invoice details). For compensation claims involving outbound mail items, HKP will, depending on the actual circumstance of the case, seek assistance from the destination postal administrations in the course of processing. HKP staff are required to strictly observe the relevant internal procedures and vet compensation claims for loss of mail items in a fair and impartial manner. An audit review mechanism has also been put in place for the processing of compensation claims to guard against possible abuse of the compensation mechanism. If there is any instance of negligence of duties, HKP will deal with the case in accordance with the established internal procedures. If the department comes across any compensation claim which is suspected to involve unlawful acts, it will refer the case to the law enforcement agencies for follow-up action. We would not comment on individual cases.

(5) HKP attaches great importance to the nurturing of a professional team so that the department will be able to respond to the ever-changing business environment and maintain service excellence. HKP runs a Staff Training Centre, which formulates annual training and development plans for managerial and frontline staff to provide them with a wide range of training programmes, including postal training as well as courses for enhancement of their management and supervisory skills as well as personal effectiveness (such as integrity management and problem solving skills, etc). Apart from classroom training, briefings and experience sharing sessions, etc are also organised to help staff have a better grasp of the relevant job knowledge and skills. This will in turn enable them to discharge their duties more effectively, thus meeting customer expectations and the operational needs of the department.

(6) Operating as a trading fund, HKP is given greater flexibility in business operation and resource management. This enables the department to respond more flexibly to changes in the market and business environment, and provide customers with quality and value-for-money services. The Government does not have any plan to change the mode of operation of the Post Office Trading Fund. In order to achieve the objective of being self-financing, HKP will continue to make its best endeavours to manage costs, develop new businesses, and review and adjust postage rates and other fees from time to time.

Ends/Wednesday, June 24, 2015
Issued at HKT 12:00

LCQ20 Appendix PDF