HKGCC agrees with the Government’s objective of lowering the rate of industrial accidents. However, we question whether the proposals in the Consultation Paper (CP) – of a substantial increase in the maximum level of penalties and doubling the time limit for issuing summonses – are the best way to achieve this.
Proposal 1: Significant increase in penalties
The proposal for a substantial increase in the maximum statutory level of penalties appears to be motivated by two reasons. The first is the fact that penalties in certain other jurisdictions are significantly higher than in Hong Kong. We suggest that regulations, including penalties, in other jurisdictions are not necessarily suitable for Hong Kong.
The second reason is an assumption that such an increase will motivate Hong Kong businesses to increase health and safety precautions for workers, and lead to fewer industrial accidents.
However, the CP provides no evidence for this. In fact, the evidence that exists in Hong Kong points in the other direction. The CP itself notes that between 1998 and 2017, under the current statutory limits for penalties, the accident rate dropped dramatically: from 64.7 to 17.2 per thousand workers.
We are also concerned by the proposal that, for some infringements, a penalty of up to 10% of a business’s turnover may be imposed. In our view, linking the level of penalty to turnover is inappropriate in the case of health and safety legislation.
A significant increase in penalties will inevitably result in an increase in insurance premiums for companies. This will then increase business costs that may ultimately have to be passed on to consumers.
In some cases, it may even deter new entry by businesses in certain sectors such as construction, something that Hong Kong can ill afford, given the many large-scale projects that are ongoing or in the pipeline.
Proposal 2: Doubling the time limit for issuing summonses
The CP argues that this proposal would “assist the courts in better understanding the seriousness and culpability of these cases” by allowing more time for investigation.
This suggests that the Labour Department has been unable to secure convictions because the current six-month time limit has been insufficient to accumulate evidence. If that was the case, it is doubtful whether prosecution should be brought in the first place. Rather, the solution should be to equip the Labour Department with sufficient resources so that it can carry out investigations thoroughly.
Education and training are key to preventing industrial accidents, because they tackle the problem at source. In our view, there is considerable scope for Government and business to work together to achieve this goal, and this would be a more constructive approach than raising penalties.
Maintaining a safe and healthy work environment is a shared responsibility. As such, the current approach adopted in the CP to place the entire responsibility on employers is unfair. For trades such as construction where self-employed workers are common, ensuring compliance could be problematic.
We recommend that the Government should take a more holistic approach and focus on other ways of reducing industrial accidents, instead of simply increasing penalties.
To lower the rate of industrial accidents, we would strongly support more informal joint Government and industry initiatives to improve health and safety at work.