THE QUEST FOR GOOD GOVERNANCE

The Quest for Good Governance: Hong Kongs Principal Officials Accountability System
CHEUNG Chor-yung

The second Tung Chee-hwa Administration in Hong Kong introduced the Principal Officials Accountability System (POAS) in July 2002 to enhance the quality of governance and accountability of its principal officials. A team of politically appointed principal officials replaced senior career civil servants as final decision-makers in the government. The co-option of two political party chairmen into the cabinet heralds the beginning of coalition politics, whereby the executive branch attempts to forge an alliance with some political parties in the legislature. However, owing to the undemocratic nature of the POAS, in which principal officials are responsible to the Chief Executive, not the public, it is doubtful if the POAS will improve the quality of governance in Hong Kongs open and pluralistic society.

government of the Hong Kong Special Administrative Region (HKSAR), in the name of enhancing the quality of governance, implemented a new Principal Officials Accountability System (POAS) on 1 July 2002, the very day Tung Chee-hwa commenced his second five-year term as Chief Executive of the HKSAR. Under the
ABOUT THE AUTHOR

The

Cheung Chor-yung (SCCCY@cityu.edu.hk) is a senior lecturer in the Division of Social Studies at the City University of Hong Kong. He is currently registered in a PhD programme at the University of Hull, UK. His thesis is on politics and the idea of civil association. His major research areas are Hong Kong politics and modern political theory.

CHINA: AN INTERNATIONAL JOURNAL 1, 2 (SEP. 2003): 249 272

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POAS, all principal official positions of department secretaries and bureau directors are no longer employed on civil service terms. Rather, they are regarded as political appointees nominated by the Chief Executive and appointed by the Central Peoples Government on non-civil service contractual terms. They are responsible for the policy outcomes of their respective policy portfolios.1 According to this new system, the Chief Executive can nominate candidates from both inside and outside the civil service for appointment to these principal official positions. In the end, three department secretaries and 11 bureau directorships were created under the POAS, of which six directors were selected from the civil service and five from other sectors.2 The government explicitly stipulates that all principal officials under the POAS may be forced to step down in the event of serious policy failures or grave personal misconduct. However, it has not defined precisely what constitutes serious failures and has maintained that the legislatures vote of no confidence against a principal official has no constitutional binding authority to sack the official concerned. Moreover, according to Article 48(5) of the Basic Law, the HKSARs mini constitution, only the Chief Executive has the constitutional power to nominate the principal officials for appointment or removal. In this paper, I argue that this provision is inadequate and less than persuasive. The POAS also brings major changes to the Executive Council (Exco), Hong Kongs final decision-making body, and to the higher civil service. All principal officials under the POAS are now appointed to the Exco, and the Exco Secretariat is absorbed by the Chief Executives Office, which is headed by a directorate grade level eight (D8) political appointee holding the title of Director of the Chief Executives Office who, in effect, is the Secretary to the
1

According to Article 48(5) of the Basic Law, the principal officials of the HKSAR government are the Secretaries and Deputy Secretaries of Departments, Directors of Bureaux, Commissioner Against Corruption, Director of Audit, Commissioner of Police, Director of Immigration, and Commissioner of Customs and Excise. The POAS applies only to secretaries of departments and directors of bureaux who are policy makers under the leadership of the Chief Executive. The other principal officials are still manned by civil servants whose offices fall outside the ambit of the POAS. For details of the governments proposal, see Legislative Council Paper: Accountability System for Principal Officials, Constitutional Affairs Bureau, 17 Apr. 2002.

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Exco and is responsible for the running of the Chief Executives Office and government secretariats public relations activities. With respect to the higher civil service, those in the most senior rank (i.e., the D8 rank) of the civil service posts in the bureau are now designated as permanent secretaries. They are tasked with assisting the bureau directors in policy formulation, implementation, and administration of the government agencies concerned. The government also reiterates its commitment to a permanent, meritocratic, and politically neutral civil service.

The Political Implications of the Principal Officials Accountability System

While the introduction of the POAS does not require any amendments to the Basic Law, it has, in fact, brought some fundamental changes to the political system of Hong Kong. First, with the political appointments of the most senior policy makers to the Hong Kong government, it heralded the end of Hong Kongs rule by senior civil servants. A corollary of this is that for the first time in Hong Kongs modern history, there is a political leadership team manned by full-time politicians who share the same political platform. No longer will senior civil servants be required to wear simultaneously the hats of policy makers and policy administrators. Under the POAS, all policy-making principal officials are appointed to the Exco, transforming it from a largely advisory and amateur body into a cabinet type decision-making body no longer dominated by part-time unofficial members. Instead, apart from the Chief Executive as the chair, the new Exco has only five unofficial members amidst 14 official members.3 The newly-revamped Exco, also for the first time, allows local party chairmen to be its members. James Tien Pei-chun, Chairman of the probusiness Liberal Party, and Jasper Tsang Yok-shing, Chairman of the pro-Beijing Democratic Alliance for the Betterment of Hong Kong (DAB), are now unofficial members of the Exco. In Hong Kongs so called executiveled government system, in which the power to initiate policy is concentrated in the hands of the Chief Executive who by law cannot come from any political party,4 local parties in the past could only exert their formal influence in the
3

In the past, apart from the Chief Executive, only the three secretaries of departments were Exco members along with 11 or 12 unofficial members. Section 31 of the Chief Executive Election Ordinance (Cap. 569 of Laws of Hong Kong).

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fragmented legislature.5 Before the introduction of the POAS, party members, like the DABs former Vice Chairman Tam Yiu-chung, appointed to the Exco had to give up their leadership position in their political parties and join the Exco in their personal capacity. However, with the appointment of the two political party chiefs to the Exco, the situation has fundamentally changed. Both Tien and Tsang are members of the Legislative Council (Legco) and are bound by the Excos principle of collective responsibility, thus making it obligatory for them to vote for the government in the Legco once the Exco has taken a decision. Together their parties command 18 votes (10 for the DAB and 8 for the liberals) out of 60 in Legco and form the largest voting bloc in the legislature. The co-option of Tien and Tsang to Exco is the clearest sign so far that Hong Kong is moving towards coalition politics by allowing pro-government local political parties to share the power of the executive. In fact, another Liberal Party member, Henry Tong Ying-yen, has become the Secretary for Commerce, Industry, and Technology, making the Liberal Party the first party in Hong Kong to have a member holding executive power in the government. While it is still too early to say whether such a development is a harbinger of the emergence of a ruling party in the HKSAR, this coalition politics will certainly encourage a clearer distinction between antigovernment parties like the most popular Democratic Party and the Frontier, and the pro-government parties like the DAB and Liberal Party.6 In the
5

Owing to a number of constitutional and institutional constraints, like the inability of members of the legislature to move a private members bill of any significance, the split voting arrangement between the directly-elected members and functional constituency members on members initiated proposals, the absence of a legislative committee system similar to that of the US, and the adoption of the proportional representation system in the geographical constituency elections, Hong Kongs legislature is highly fragmented with no dominant party. For a good discussion of this, see Kuan Hsin-chi, Election without Political Clout, in Power Transfer and Electoral Politics: The First Legislative Election in the Hong Kong Special Administrative Region, ed. Kuan Hsin-chi, Lau Siu-kai, Louie Kin-sheun, and Timothy Ka-ying Wong (Hong Kong: Chinese University of Hong Kong Press, 1999), ch. 10. The Democratic Party has 12 legislators and is the largest party in the HKSAR in terms of electoral support and number of seats held in the Legco.

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Legco, therefore, even the rare cooperation between pro-government parties and anti-government parties on some livelihood issues is now replaced by a clear adversarial relationship between the two sides, with the government enjoying more secure support by the pro-government parties7 as well as the pro-business sectors members of the Legco who are returned by the functional constituencies.8 The creation of 14 politically-appointed top policy makers (who are in effect Hong Kong-style ministers) in the POAS is followed by a parallel development in the civil service: the creation of the D8 rank permanent secretaries in the policy bureaux to assist in policy making and implementation, and in administering the respective government departments and agencies. These permanent secretaries are to be informed and advised by the most senior civil servants who will remain politically neutral. 9 There is a clear intention to demarcate policy from administration with a view to restricting political responsibilities in policy making to the secretaries of departments and bureau directors, and maintain the political neutrality and meritocratic tradition of the civil service. Such a demarcation not only necessitates the development of political accountability among the principal officials, it equally requires the civil service to nurture a clear concept and practice of political neutrality, in order to ensure the integrity of a meritocratic and
7

In an editorial after the introduction of the POAS, South China Morning Post (16 Jul. 2002, p. 15) made the following observation: Since the new arrangements took shape on Jul. 1, two major bills have been passed, one on cutting civil service pay and one on anti-terrorismWhat has changed is that legislators whose chiefs have been co-opted by Mr Tung have made a more concerted effort to defend the government, while those from other parties have taken on a clearer role of being the opposition. In the 2000 Legco elections, half of the seats (i.e., 30) in the HKSARs Legco were returned by functional constituencies, in which only members (mostly corporate members) of those constituencies had the right to vote. Most of these constituencies came from the business and professional sectors and their political stances are more conservative than liberal. Only 24 seats belonged to the geographical constituencies, in which universal suffrage was adopted by using the proportional representation system. The six remaining seats were returned by the 800-member Election Committee, which was boycotted by the democrats who support universal suffrage for all Legco seats as soon as possible. Before the introduction of the POAS, the D8 rank in the civil service was the most senior administrative officer rank, the holders of which normally filled the policy secretary (i.e., director of bureau) positions.

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permanent civil service, and not overstep the political territories of the principal officials.10 Critics of the POAS, however, argue that it is, in effect, a step backwards for democracy. Increased accountability to the Chief Executive who has no popular mandate will only increase the power of the Chief Executive, not the political accountability of the decision makers. Martin Lee Chu-ming, the then leader of the Democratic Party, describes the POAS as government by the Chief Executives puppets.11 Emily Lau Wai-hing, a member of the Frontier, contends that, as the principal officials under the POAS are not elected by the people and are not responsible to the elected Legco, describing such a system as an accountability system is misleading if not deceitful.12 To these critics, the ministers under the POAS may be more eager to go out of their offices and listen to the publics views on public affairs, but all they actually seek to do is to manipulate the public and media, and use so-called public opinion pressure to bring the elected Legco to heel rather than pursue genuine political accountability. Strictly speaking, it is premature to make any definitive judgement on whether the newly-introduced POAS will succeed in its quest for improving the quality of governance. However, it does not follow that we cannot carry out an informed analysis of the POAS to assess if its proposed changes are consistent, conceptually as well as institutionally, with its manifested principles of accountability and political neutrality. Likewise, in the light of these manifested principles, one can also ask if the proposed institutional changes are adequate, or whether there are better or additional institutional arrangements to fulfil these requirements. Since the critics of the POAS have raised a fundamental query over whether accountability can survive without democracy, a more in-depth look at the question of democratic accountability is called for.
10

11 12

Ian Scott, however, made this observation about the pre-1997 Hong Kong civil service: Civil service neutrality in Hong Kong is a myth. But it is a myth to which the principal players in the transition to Chinese sovereignty find in their interests to subscribe. See his article Civil Service Neutrality in Hong Kong, in Democratization and Bureaucratic Neutrality, ed. Haile K. Asmerom and Elisa P. Reis (London: MacMillan Press and New York: St. Martins Press, 1996), p. 277. See Democratic Partys official publication Outspoken (in Chinese), no. 44 (Nov. 2001): 2. Emily Lau, Why We Wont Get Accountability, South China Morning Post, 28 May 2002, p. 14.

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Accountability as Sanction
While the HKSAR government and its critics have diametrically opposite assessments of the impact of the POAS on the quality of governance, they appear to share one common proposition: that accountability is most meaningful if it is related to sanctioning incompetent policy makers. There are different levels13 and different aspects14 of accountability in general political discourse. In the context of the POAS, most people appear to agree that it means the existence of an authority to which an individual or body is subject, and by which the individual or body concerned can be controlled, even removed from office. A major difference is that the government takes accountability to mean that the ministers are responsible to the Chief Executive who is not returned by universal suffrage, while the democrats argue that it should mean that the ministers are responsible either to the people directly, or to the elected Legco.15
13

14

15

For example, in a paper on the POAS entitled How to Take Governance Reform Forward: Accountability to Whom and How? by the SynergyNet, a policy thinktank in the HKSAR, it is pointed out that four separate notions are central to the overall concept of accountability: (1) answerability, meaning the obligation to provide an answer or response to questions raised; (2) accountability in the narrow sense, meaning the obligation to account for ones actions; (3) responsiveness, meaning the willingness to respond to demand and call for action accordingly; and (4) responsibility, meaning the obligation to take action or carry out a duty and the liability to get blamed for ones action or non-action. See pp. 78 of the paper. Joseph G. Jabbra and O. P. Dwivedi, Public Service Accountability: A Comparative Perspective (Connecticut: Kumarian Press, 1988). On pp. 58, they identify the following aspects of accountability: administrative/organisational, legal, political, professional, and moral. It should be noted that Article 64 of the Basic Law stipulates that the HKSAR government must abide by the law and be accountable to the Legco in terms of implementing laws passed by the Legco, presenting regular policy addresses to it, answering questions raised by Legco members, and obtaining approval from the Legco for public expenditure and taxation. It is obvious that in this context, accountability does not involve the ability to impose sanctions and is therefore quite distinct from the concept of accountability as used in the context of the POAS. As mentioned before, there are different levels as well as types of accountability. It is therefore important not to assume that throughout the Basic Law, there is only one meaning to the concept of accountability applicable to it.

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While there is no dispute that effective accountability must involve the ability to sanction policy makers, it is equally obvious that sanctions alone cannot exhaust the requirements of effective accountability. As John Uhr, an Australian scholar on public service and deliberative democracy, notes, two prerequisites are required for effective accountability: first, mechanisms for providing information; and second, mechanisms for imposing sanctions.16 The point of deliberation and information is discussed in the next section. Meanwhile, let us concentrate on whether the governments proposals for principal officials to be totally responsible to the Chief Executive for the outcome of their respective policy is conceptually, constitutionally, and institutionally tenable or adequate. The government itself admits that since the reunification with China in 1997, there has been a big change in Hong Kongs political ecology in the sense that government policy and operation are increasingly subject to the critical scrutiny of the public, media, and elected Legco. There have even been calls for senior officials to step down and take responsibility for their policy failures.17 One would have thought that if the government really takes its words seriously, a conceptually-logical conclusion is to introduce an accountability system whereby the public or the elected Legco can impose direct sanctions against those who are responsible for their policy failures. But that was not what the government proposed. Instead, the government says that all principal officials are accountable to the Chief Executive, who is selected only by a small circle 800-member election committee, and can only be removed by him, though it admits that it is important to listen to the views of the public.
16

17

John Uhr, Deliberative Democracy in Australia: The Changing Place of Parliament (Cambridge: Cambridge University Press, 1998), p. 163. For example, in the summer of 2001, legislators were very dissatisfied with the fact that the then Director of Housing Tony Miller could still maintain his position after the Legco had passed a motion of no confidence in him in the so-called short pile scandal, in which some public housing built by the Housing Authority failed to meet construction safety standards due to corruption. In another case, many people demanded the resignation of Chief Executives Personal Assistant Andrew Lo Cheung-on, after he was found by an inquiry headed by a judge as a poor and unreliable witness to the so-called Chung Ting-yiu Incident, in which Lo was accused of attempting to undermine academic freedom by indicating to the then Vice-Chancellor of the University of Hong Kong that the Chief Executive was unhappy about Chungs survey on his popularity. The government refused to let Miller and Lo resign on the grounds that they were civil servants and responsible for administrative, not political, errors.

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One may argue that given the present executive-led requirements of the Basic Law, in which only the Chief Executive can nominate principal officials for appointment, it is constitutionally not possible to allow the elected Legco or the people to sanction the principal officials directly. While it is true that Article 48(5) does specify that nomination for appointment and removal of principal officials are powers vested in the Chief Executive, one should not overlook the fact that in the HKSARs executive-led system, it is also intended that the Legco somehow has a final check and balance function against the executive in order to prevent predominance of the executive over other parts of the political system. This can most clearly be seen in paragraphs (2) and (3) of Article 52 of the Basic Law. Article 52 stipulates three different circumstances under which the Chief Executive must resign, and paragraphs (2) and (3) are related to this check and balance function between the Chief Executive and the Legco:
The Chief Executive of the Hong Kong Special Administrative Region must resign under any of the following circumstances: (1) (2) When, after the Legislative Council is dissolved because [the Chief Executive] twice refuses to sign a bill passed by it, the new Legislative Council again passes by a two-thirds majority of all the members the original bill in dispute, but [the Chief Executive] still refuses to sign it; and (3) When, after the Legislative Council is dissolved because it refuses to pass a budget or any other important bill, the new Legislative Council still refuses to pass the original bill in dispute.

Commenting on these two paragraphs of Article 52, Xiao Wei-yun, a Basic Law drafter and Mainland authority on the mini-constitution of the HKSAR, says it is very appropriate to require the Chief Executive to resign under these two circumstances, for the Chief Executive, in those cases, not only has lost the support of the first Legco in question, but the newly-elected second Legco also finds it difficult to support him. In light of this, he believes that the Chief Executive has already lost the confidence of the legislature and the only way to solve this constitutional deadlock and allow the legislature to check the executive power is for the Chief Executive to resign.18
18

Xiao Wei-yun, ed., One Country Two Systems and the Basic Law of the HKSAR (Hong Kong: Cultural and Educational Publications, 1990), p. 181 (in Chinese).

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It is clear from Xiaos comments that while the Chief Executive in the HKSARs executive-led system enjoys the most power in the area of policymaking, according to the constitutional principle of the Basic Law, he must resign if he ultimately loses the confidence of the legislature because the legislature is there to avoid the predominance of the executive.19 It is true that the Chief Executive enjoys great advantage in the event of a constitutional confrontation with the Legco in relation to paragraphs (2) and (3) of Article 52, for he has the power to dissolve Legco first. However, the Chief Executive requires the support of the legislature to remain in office and he cannot, according to the Basic Law, dissolve the Legco more than once in each term of his office.20 With the introduction of the POAS, what is the constitutional role of the Legco in checking the executive and maintaining its confidence in the Chief Executive in light of a reasonable principle of accountability? To answer this question, we must first realise that there is a distinction between when an individual minister is at fault, and when the government as a whole is at fault. Although all principal officials in the POAS are required to adhere to the Excos collective responsibility for overall government decisions, it is clear that each minister is first and foremost required to take his responsibility within his designated portfolio most seriously. If it is the Chief Executive or the government as a whole that fails to gain the confidence of the legislature, then we shall follow provisions in Article 52 to hold the government or Chief Executive responsible. However, in the case of an individual principal officials failure, it is either up to the Chief Executive to exercise his power to remove the official concerned, or, if the pressure comes mainly from the Legco, a vote of no confidence would be the clearest sign that the individual official has already lost the confidence of the legislature. He is therefore required to resign or be removed by the Chief Executive, unless the Chief Executive is prepared to regard the officials failure not as his individual failure, but the governments responsibility and risk Legcos sanctions in accordance with Article 52 of the Basic Law. If a minister loses the confidence of the Legco, it is almost impossible for him to perform his duties as a government principal official, for any legislation or government measure that falls into his portfolio is unlikely to be passed by the legislature. If he still refuses to resign, the confrontation will easily escalate from an individual level to the administration as a whole.
19

20

See Xiaos article On the Basic Principles of the Political System of the Basic Law, a speech delivered by Xiao in Hong Kong, 4 Apr. 2002 (in Chinese). Article 50 of the Basic Law.

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It seems obvious that the rationale for introducing the POAS is first and foremost to enhance the accountability of principal officials as individual ministers to their respective policy portfolios, for it is each and every one of them, not the administration as a whole, that is accountable to the Chief Executive for any policy failure. It is unreasonable to expect that the Chief Executive should risk the Legcos or publics confidence in his whole administration every time an individual minister has difficulties in gaining the confidence of the Legco or the public. As such, it is reasonable to expect that the Legco should play an important role in sanctioning incompetent principal officials to check executive power, avoid constitutional confrontation with the Chief Executive, maintain its confidence in the Chief Executive, and enhance the principal officials accountability to the Legco. It is reasonable to expect that the spirit of Article 52 of the Basic Law requires the POAS to develop a set of constitutional conventions whereby Legcos support is required in order for a minister in trouble to remain in office. This will require the development of some institutional mechanisms to deal with situations like this, and it seems that some form of individual ministerial responsibility principles developed by conventions together with an adequately drafted code of ministerial conduct is required. Individual ministerial responsibility is a constitutional convention developed in the Westminster type of parliamentary government, in which each individual government minister is responsible to parliament for his policy areas. He is required to resign by the Prime Minister, or by parliament, if he has committed serious policy mistakes or grave personal misconduct. Geoffrey Marshall, the leading British expert on constitutional conventions, says that conventions are set by a series of precedents, by agreements among the major political players, or by justified government principles like democracy or constitutionalism.21 Though Hong Kong does not have the Westminster type of parliamentary government, if the POAS is to work and be compatible with the spirit of Article 52 of the Basic Law, it is crucial that some form of individual ministerial responsibility be developed. It should be established by precedent, i.e., the conscious principles decided by the political players in Hong Kong,
21

See his Constitutional Conventions: The Rules and Forms of Political Accountability (Oxford: Clarendon Press, 1986), reprinted edition, particularly ch. IV Doctrine of Ministerial Responsibility. For a very good account of the application and development of individual ministerial responsibility in the United Kingdom during 1980s and 1990s, see Diana Woodhouse, Ministers and Parliament: Accountability in Theory and Practice (Oxford: Clarendon Press, 1994).

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and by the constitutional spirit of open and accountable government to determine each individual ministers political and administrative responsibilities. It should stipulate clearly the conditions under which the minister should be held partially or totally responsible for policy failure. Apart from the undemocratic nature of the POAS, another major inadequacy of this proposal is its failure to acknowledge the need to develop a clear concept and set of principles for individual ministerial responsibility. At the moment, the government uses only very general terms in its paper on the POAS to state that principal officials are required to step down in extreme cases of policy failure or grave personal misconduct.22 In the governments Code for Principal Officials under the Accountability System, the government says, principal officials are responsible for formulating, explaining and defending government policies as well as canvassing support from the public and Legislative Council. They are accountable to the Chief Executive for the success or failure of their policies.23 All these statements are far from adequate in forming a foundation for the development of individual ministerial responsibility. SynergyNet, a Hong Kong liberal policy thinktank, made a good suggestion in a recent policy paper by putting forward some relatively specific guidelines to determine when a principal official should tender his resignation:
Principal officials are expected to tender resignation from office to take responsibility for: a major policy error or failure in policy administration within their portfolio which has caused significant damage to the public interest or the publics trust in the government; or, a serious failure in supervision over their bureau or subordinate departments or agencies in policy implementation, which has resulted in significant damage to the public interest or the publics trust in the government; or, any act which has grossly harmed the reputation and integrity of the government.24

22 23

24

Accountability System for Principal Officials. Code for Principal Officials under the Accountability System, Chief Executives Office, G.N. 3845, 28 Jun. 2002. See p. 26 of the SynergyNet report mentioned in note 14. For another comment on the POAS by another local thinktank, Civic Exchange, see its report Accountability without Democracy: The Principal Officials Accountability System in Hong Kong, at <www.civic-exchange.org>.

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However, even criteria like these are not sufficient to determine the boundaries of individual ministerial responsibility. A study by Diana Woodhouse, an expert on the United Kingdoms individual ministerial responsibility, shows that in addition to the constitutional aspect, there are always political factors in the determination of what constitutes a major error or serious failure. The role of the Chief Executive, Legco, and public opinion and their interaction are crucial in the determination of the contents and meanings of these unspecified words in the dispute concerned.25 Also, questions such as whether the minister should be responsible for grave administrative errors made by the civil servants of his department without his prior knowledge, or the so-called vicarious responsibility of a minister, are always to a certain extent, open and subject to the political judgement of the day. In this regard, the so-called penny stocks fiasco which erupted less than a month after the introduction of the POAS ( July 2002) helps reinforce the claim that there is an urgent need to develop a proper framework for individual ministerial responsibility. According to one estimation, the local stock market lost HK$10 billion (US$1.28 billion) in value in one trading day. The apparent cause for the panic selling of penny stocks was the regulatory authorities consultation paper, in which it was proposed that stocks trading below 50 Hong Kong cents for 30 consecutive days would need to consolidate their shares or face de-listing. It was implemented with insufficient attention paid to possible market reactions, for almost half of the stocks trading in Hong Kongs stock market may be defined as penny stocks. Though the consultation paper aimed to improve corporate governance in Hong Kong, it failed to provide alternative means for small shareholders of these stocks to trade their stocks once they were de-listed by the authorities as proposed. Adding salt to the wound was the fact that it was released when the stock market was in its most bearish mood since the last global stock slump following the 11 September 2001 terrorist attacks in the US.26 The Hong Kong Exchanges and Clearing (HKEx), which issued the consultation document, and its supervisory body, the Securities and Futures Commission (SFC) immediately shelved the proposals after the panic selling. Meanwhile, legislators, the press, public, and government officials fiercely debated whether apart from the Chief Executive of the HKEx, Kwong Ki-chi, and the Chairman of the SFC, Andrew Sheng, who were directly or indirectly responsible for the implementation of the consultation exercise the ministers
25 26

Woodhouse, Ministers and Parliament, particularly pp. 1628. For details of this saga, see South China Morning Post, 1 Aug. 2002.

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who had overall responsibility for financial services policy (i.e., the Financial Secretary (FS) Anthony Leung and the Secretary for the Financial Services and Treasury (SFST), Frederick Ma) should also bear responsibility. Yet, the latter two claimed that they did not have prior knowledge of the contents of the proposals concerned and were not directly involved in this kind of market regulatory activity which enabled market professionals, not the government, to regulate their day-to-day operations. Judging from the responses of, and measures adopted by, the government in this incident there is still a long way to go before the political establishment can develop a relatively comprehensive and mature concept of individual ministerial responsibility for the enhancement of officials accountability.27 Three points should be noted here: First, it is strange for the fact-finding inquiry panel, set up by the FS and comprising two independent members, to make judgements exonerating the FS and SFST from any ministerial faults, for these are constitutional as well as political, not administrative issues to be decided by the government, Legco, and the public.28 It is equally strange for the government to follow those judgements as if the panel has the authority to do so.29 Second, the kind of responsibilities examined by the panel, namely policy, executive, systematic, and personnel responsibilities, are far from complete.30 The most notable responsibilities that are missing in the Report are the responsibility of oversight and the vicarious responsibility of the ministers concerned for departmental faults. Though both the FS and SFST were not directly in charge of the consultation, they oversaw (since the consultation fell within the ambit of their respective policy portfolios), and were indirectly responsible for, any mistake
27

28 29

30

The government set up a two-member panel to examine the incident. Robert G. Kotewall and Gordon C. K. Kwong, the members, submitted the Report of the Panel of Inquiry on the Penny Stocks Incident (the Report) to the government in Sep. 2002, in which they argued that no principal officials should be made responsible for the incident. For a more detailed analysis, see my contribution on departmental faults and vicarious responsibility of the ministers published in the Forum Section of Ming Pao, 6 Aug. 2002, p. D15 (in Chinese) and The First Test of Ministerial Responsibility in Hong Kong: Some Thoughts on the Penny Stocks Fiasco at <www.synergynet.org.hk/en_main.htm> (in English). Report of the Panel, ch. 12. See the local press reports such as in South China Morning Post and Ming Pao, 11 Sep. 2002, the day after the release of the Report of the Panel. Report of the Panel, para. 12.16, p. 156.

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made by their subordinate bodies tasked with carrying out the policy. It is absurd for the panels report to claim that the SFST did not have oversight responsibility over non-government departments, as it is impossible for the SFST to carry out his duties if he does not have the power and responsibility to make sure that statutory bodies like the SFC follow his policy instructions and implement them faithfully and professionally.31 Third, while the FS and SFST should not resign as a result of this fiasco, it is wrong to argue that the SFSTs failings were mainly his sub-par performance at the Legco Panel meeting on 31 July 2002 and conclude that the SFST should not be held partially responsible for the fiasco.32 At that meeting, the SFST revealed that his office was informed of the main points of the consultation exercise in the form of a SFC summary in advance, but he failed to take note of them at that time as he was too busy dealing with other things. This failure also made him mislead the FS, who, based on this piece of misinformation, told the press on record that the government should not be held responsible as the HKEx or the SFC did not inform it of the contents of the consultation document in advance. Such a failure clearly points to the conclusion that the SFST was less than competent in exercising his responsibility, and together with his role in misleading the FS and public, should be held indirectly responsible for the fiasco. However, as constitutional convention scholars like Marshall and Woodhead have shown, indirect or vicarious responsibility alone seldom merits ministerial resignation even in a parliamentary system.33 In sum, it seems clear that the current POAS as introduced by the HKSAR government is highly inadequate in terms of providing political and institutional guidance for enhancing ministerial accountability, and there is a lack of developed constitutional conventions to assist policy makers, politicians and the public to deal with issues related to ministerial responsibility. In this regard, for students of politics and public administration, this creates a vast new academic area for them to pioneer research projects on the theory and practice of ministerial responsibility in the context of Hong Kongs one country, two systems.

Accountability and Deliberation

The above section deals with one important aspect of accountability accountability as sanction. However, there is another equally important aspect of
31 32 33

Report of the Panel, pp. 4950. Ibid., p. 159. Marshall, Constitutional Conventions; Woodhouse, Ministers and Parliament.

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accountability that falls within what James G. March and Hohan P. Olsen call a logic of appropriateness:
Many of the complications surrounding the accountability of political actors stem from an interweaving of the two standard logics of human action a logic of consequence and a logic of appropriateness A-logic-of-appropriateness frame for accountability leads to demands that political actors be accountable for the appropriateness of their actions. Behaviour is assessed as proper, less because of its consequences than because of its consistency with cultural and political norms and rules.34

How does the POAS fare in this logic-of-appropriateness aspect of accountability? In a sense, the requirement of resignation for grave personal misconduct certainly falls within this aspect of accountability, for this kind of misconduct undoubtedly is inconsistent with the moral norms of society. However, what is also being neglected in the whole discussion of the POAS so far is whether the government has put in place mechanisms or measures to ensure that the actions of principal officials are consistently in accordance with the requirements of an open, liberal, and civilised society like Hong Kong.35 Under the POAS, principal officials must be dedicated to their duties, uphold the rule of law, abide by the law (including the legislation against corruption), act in the best interests of the HKSAR, be as open as possible about their decisions, avoid conflicts of interest, promote political neutrality and the meritocratic tradition of the civil service, and so on. All these requirements are enshrined in the governments code for principal officials.36 However, in some crucial areas (or what John Uhr calls the arenas of accountability), the measures proposed under the POAS are far from adequate.37 One of the avowed objectives of the POAS is to improve the working relationship with the legislature.38 Yet, there are very few additional proposed
34

35

36 37 38

James G. March and Johan P. Olsen, Democratic Governance (New York: The Free Press, 1995), p. 154. To March and Olsen, the logic of appropriateness will require the government to gain the informed consent of its citizens by adopting coercion-free persuasion through the offering of good reasons, arguments, and moral appeals, and the evoking of shared cultural standards and the rule of law. Ibid. Code for Principal Officials under the Accountability System. Uhr, Deliberative Democracy in Australia, particularly ch. 8. Accountability System for Principal Officials, paragraph 2(k).

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measures to improve the quality of exchanges between the government and legislature, or to promote the Legcos capacity to better scrutinise government proposals under the POAS.39 Yes, the Chief Executive, after the introduction of the POAS, has agreed to appear before the Legco more often, from three times a year in his first term, to at least four times a year. Yet this token increase is far from impressive, and in no way compares to the last Colonial Governor Chris Pattens monthly appearance before the Legco. Already, there are signs that the government is becoming increasingly less forthcoming in its dealings with the Legco. The President, Rita Fan Hsu Lai-tai, recently offered the opinion that the relationship between the government and Legco had worsened.40 According to Fan, this was so because legislators were not happy with the administration over several incidents, including the Chief Secretary for Administrations announcing of the resumption of sale of Home Ownership Scheme flats to the media without first informing the Legco for fear of negative responses from members of the legislature, and the governments announcement of awarding the Sha Tin-Central rail link project to the KowloonCanton Railway Corporation without informing the Legco first. Both incidents occurred after the government had made known its intention to introduce the POAS, making one wonder whether bypassing the Legco and shunning public exchanges with legislators would enhance effective accountability. All these incidents and practices are inconsistent with the spirit of accountability, as understood in the sense of the logic of appropriateness. Although some element of political and tactical consideration is unavoidable in any government business, there are things that the government should do to ensure that the POAS can improve the chance of getting the informed consent of the public or their representatives, or be held accountable for failing to do so. The Chief Executive should appear far more often before the Legco to answer members questions and promote better quality exchanges between the two parties. He should go to the Legco at least once a month, upon his return
39

40

The requirements in this respect as set in the code for principal officials contain nothing new, for the need to present regular policy addresses to the Legco, answer questions raised by Legco members, appear before the Legco or its committees, subcommittees and panels, take part in Legco debates, or give accurate and truthful information to the Legco are all standard requirements having been practised for a long time in Hong Kongs legislature. May Sin-mi Hon, Legislators and Officials Both Blamed for Bad Blood, South China Morning Post, 16 Jul. 2002, p. 6.

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from any major trip to Beijing or overseas, and when the government wants to make important announcements or respond to major events. It would be very difficult to argue that the Chief Executive takes accountability seriously if he is unwilling to be seen as more accountable than a Colonial Governor. In addition, the government may revive the publication of the annual progress report of government policy goals (which was discontinued after 1998) before the Chief Executive announces his annual policy address, so that the Legco and the public can then have a clearer picture of the progress made by the government in the previous year before commenting on new government policy initiatives. Other possible instruments for the enhancement of accountability in this respect include making the Director of Audit, Ombudsman, and Commissioner of Equal Opportunities, all of whom are now appointed or nominated by the Chief Executive and are accountable to him, independent officers of the legislature. They should report directly to the Legco on their respective areas of responsibility, and together monitor whether the government has conducted its business in these areas properly. 41 This will enhance the independence of these offices. The officials concerned will be free from any undue executive interference and will be in a better position to assist the Legco in monitoring the governments performance in these areas.42 Other measures like the introduction of a Freedom of Information Act can also be considered as a means of improving access to official information for effective accountability. The purpose of drawing attention to all these possible instruments for enhancement of accountability is not to say that all of them should or can be applied to the HKSAR any time. The merits and suitability of each to Hong Kong deserves to be discussed in detail, but due to space constraints this cannot be done in this paper. The point, instead, is to demonstrate that the POAS has almost totally neglected this important aspect of accountability and should therefore be regarded only as an inadequate system for promoting accountability. John Dunn, the Cambridge political theorist, is quite right when he says, the main weight of democratic accountability has to fall here: on the attempt to
41

42

Australia made a similar proposal in relation to its Auditor-General. See Uhr, Deliberative Democracy in Australia, p. 189. Article 58 of the Basic Law stipulates that the Commission of Audit be accountable to the Chief Executive. Therefore, such a proposal, if adopted, will require amendments made to the Basic Law.

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maximise the degree to which politically consequential conduct by rulers and their subordinates is always in the open.43

Political Neutrality: A Framework

The success of the POAS does not depend on the enhancement of accountability among principal officials alone. Equally important is whether the POAS can provide a credible framework for the political neutrality of the civil service, for the whole POAS undertaking is premised on the separation of politics from administration, and the principle of political neutrality is needed for the maintenance of a meritocratic and permanent civil service. In this regard, the framework provided by the Canadian public administration scholar, Kenneth Kernaghan, perhaps captures best the major aspects of political neutrality of the civil service, the main tenets of which are as follows:44
Politics and policy are separated from administration; thus politicians make policy decisions, public servants execute these decisions; Public servants are appointed and promoted on the basis of merit rather than of party affiliation or contributions; Public servants do not engage in partisan political activities; Public servants do not express publicly their personal views on government policies or administration; Public servants provide forthright and objective advice to their political masters in private and in confidence; in return, political executives protect the anonymity of public servants by publicly accepting responsibility for departmental decisions; and Public servants execute policy decisions loyally irrespective of the philosophy and programmes of the party in power and regardless of their personal opinions; as a result, public servants enjoy security of tenure during good behaviour and satisfactory performance.

In the past, the fusion of the political and administrative dimensions in the upper echelon of Hong Kongs civil service did not sit comfortably with this widely-accepted constitutional convention of political neutrality. The introduction of the POAS is in effect an admission of this inherent mismatch between the
43

44

John Dunn, Situating Democratic Political Accountability, in Democracy, Accountability, and Representation, ed. Adam Przeworski, Susan C. Stokes, and Bernard Manin (Cambridge: Cambridge University Press, 1999), p. 339. See Kenneth Kernaghan and John W. Langford, The Responsible Public Servant (Halifax, Nova Scotia: The Institute for Research on Public Policy, 1990), pp. 567.

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civil service status of these officials and the political demands placed on them by the government. However, whether the changes proposed under the POAS can succeed in maintaining a politically-neutral civil service is, for reasons given below, rather doubtful. Two problematic areas are discussed here.

The Post of Secretary for the Civil Service: Confusion between Political vs. Administrative Responsibilities
The first problem relates to the political appointment of the Secretary for the Civil Service (SCS), whose main responsibility is to oversee the governments policy and management of the civil service. Under the governments POAS proposals, the Chief Executive will select among serving senior civil servants, the candidate to fill the post of SCS. This person may, age permitting, return to the civil service at the end of his tenure if he so chooses. The government believes that such an arrangement has the merit of reassuring the civil service that they will continue to be managed by a principal official who has a link with the civil service. The government also thinks that this proposal will combine the best of both worlds because as a member of the Exco, the SCS will be well placed to ensure that the interests and concerns of the civil service will be fully represented and taken into account before the government makes any major decision. On the other hand, the Secretary will bring his civil service experience and perspectives to bear on decisions taken in the Exco, the outcome of which very much depends on the implementation process executed by the civil service. This is not very convincing as the SCS is a political appointee fully responsible for the political decisions taken by him individually, and for all government policies collectively. As a politically-appointed principal official, his first and foremost duty is to honour, to the utmost of his ability, his political responsibilities. Nothing short of a full commitment to his political duty should be expected from the SCS, and quite rightly so. In other words, the management, both generally and on a day-to-day basis, of the civil service, including proposals on promotion, recruitment, transfer, career development, disciplinary measures, etc., will be carried out by a politician, not an administrator, whose first duty to the government is political. How can one be assured that the integrity and political neutrality of the civil service will be vigorously protected under such an arrangement?45
45

Can one be assured that the SCS, with his political responsibilities foremost in his mind, will pursue vigorously a complaint of undue political interference (which could cause political embarrassment to the government) from his civil service subordinate against his political colleague in the Exco, to which he and his political colleagues share the same collective responsibility?

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The fundamental problem with this arrangement is the fusion of political and administrative responsibilities in one office-bearer, for the SCS is not only the political master of his bureau, but also the manager of it. In the more traditional approach adopted by the British government, the manager of the home civil service (normally filled by the Cabinet Secretary) is himself the most senior civil servant responsible for the management of the civil service with the Prime Minister as its political head. It is a better alternative both for conceptual clarity and for institutional protection of the civil services integrity and neutrality.46 In the case of Hong Kong, the Chief Secretary for Administration or the Chief Executive should assume the political headship of the civil service responsible for civil service policy, and an equivalent of the administrative head of the civil service should be created to oversee the management of the civil service. He should be chosen from the most senior civil servants and abide by the regulations governing the civil service. The seniority of the Chief Secretary for Administration or the Chief Executive should also reassure the civil service that their interests and concerns will be made known to the most senior level of the government.47

Problems with the Role of Permanent Secretaries

Under the POAS, permanent secretaries are the most senior civil servants and act as the interface between their political masters and the civil service. They are there to advise the principal officers and the government on policy, and under the instruction of the latter, explain and defend government policies in public and at Legco panel or committee meetings. They also supervise the daily functioning of their respective departments, manage the implementation of government policy as decided by the Exco, and oversee the delivery of government service to the public. Unlike their counterparts in the United Kingdom, permanent secretaries in Hong Kong are required to defend government policy in public under the instruction of their political superiors.48 This apparently contradicts the anonymity rule of the civil service under the principle of political neutrality. While it should be pointed out that senior civil servants are increasingly being asked to appear
46

47

48

For a good account of the headship of the British Home Civil Service, see Peter Barberis, The Elite of the Elite: Permanent Secretaries in the British Higher Civil Service (Aldershot: Dartmouth Publishing, 1996), pp. 1221. According to Article 53 of the Basic Law, the Chief Secretary for Administration (which is called the Administrative Secretary in the Basic Law) in terms of seniority, is second only to the Chief Executive in the HKSAR government. Accountability System for Principal Officials, p. 11.

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before parliamentary select committees to answer questions on behalf of the government in the United Kingdom, they are not allowed to defend government policy in the parliament, for this is against the constitutional principle whereby the government is accountable through its ministers to the parliament.49 In Hong Kong, Article 64 of the Basic Law requires the government to answer questions raised by Legco members. The executive regards this as a form of accountability to the legislature. But the Basic Law does not specify that the HKSAR government shall be accountable through its principal officials to the Legco. Therefore, the concern in this regard has less to do with constitutional propriety than with the danger of confusing political responsibilities with administrative ones. There is nothing wrong for permanent secretaries and senior civil servants who are required to advise the government on policy to explain government policy before Legco committees or in public, so long as they are adhering strictly to the agreed official lines while carrying out this duty. However, once they are required to defend government policy, they will face questions related to the rationale of, and justification for, the political decisions taken by the government, which are clearly beyond the scope of their administrative duty. In order for permanent secretaries to perform their duty as policy advisors to their political masters, they must be able to give objective, professional, frank, and non-partisan advice to the principal officials in confidence. As it is now possible for members of political parties to take up political appointment positions under the POAS, it is crucially important that the permanent secretaries can obtain policy advice, in complete confidence, from both their current political masters as well as possible future ones who may be of different political persuasions. In other words, the rule of impartiality under the principle of political neutrality of the civil service must apply in policy advice, and the requirement to defend government policy before the Legco and in public will certainly undermine this rule, for it will inevitably make the civil servants look partisan. In addition, rules must also be in place whereby access to the advice given by permanent secretaries or other senior civil servants to their political masters will be regulated so as not to bias future principal officials towards the personal views of the civil servants. Otherwise, it would be quite impossible for civil servants concerned to give frank and honest opinions to their political masters. In his letter to all civil servants on 17 April 2002, the SCS, Mr Joseph Wong, says, The bounden duty of every civil servant is to be loyal to the Chief
49

Woodhouse, Ministers and Parliament, ch. 10.

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Executive and the principal officials of the day.50 The first and foremost loyalty, under the principle of political neutrality, of any permanent secretary must be to the principal official of his bureau. However, this does not mean that permanent secretaries do not have responsibility to the government, Exco as a whole, or Chief Executive, in particular. While the principle of collective responsibility in the Chief Executive-in-Council is well established in Hong Kong, there are times in which there may be clashes between different departments before a collective decision is taken, or when a collective decision is in doubt. Under those circumstances, where should permanent secretaries and civil servants loyalty lie? Nothing in the current Code for Principal Officials under the Accountability System has touched upon issues of this kind, and I believe that a code for the civil service which gives directions to handle this kind of situation is needed.51 The principle of a politically-neutral civil service should not be construed so as to preclude senior civil servants from administrative accountability. In New Zealand, for example, public sector reform in the 1980s and 1990s turned the traditional permanent secretaries of the civil service into chief executives of government agencies who are required by law to report to parliament on the outputs, that is, the service or the goods they have delivered, of their department, while the ministers continue to be responsible for the outcomes of government policy in which the effects of the outputs of government service on the community are assessed.52 On the other hand, in the United Kingdom, permanent secretaries, as accounting officers of their respective departments, are accountable and directly answerable to the Public Accounts Committee (PAC) of the House of Commons for the financial control of their departments. They are entitled to express in writing to the minister any disagreement concerning proposals for spending that they believe they cannot justify before the PAC. Such opinions will be passed on to the Comptroller and Auditor General who has the statutory responsibility to report to Parliament on the economy, efficiency, and effectiveness of government departments.53
50 51

52 53

See LC Paper No. CB (2)1650/0102(05). For a discussion of the merits of adopting a code of practice for civil service to enhance public service accountability, see Kenneth Kernaghan, Promoting Public Service Ethics: The Codification Option, in Ethics in Public Service, ed. Richard A. Chapman (Edinburgh: Edinburgh University Press, 1993), ch. 3. For suggestions concerning the adoption of a civil service code in Hong Kong, see SynergyNets report, pp. 256. Woodhouse, Ministers and Parliament, pp. 26870. Ibid., pp. 2403, and Barberis, The Elite of the Elite, ch. 4.

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Overseas experience of the above-mentioned kind is applicable to Hong Kong. Incidents such as the penny stocks, show that for an accountability system to succeed, Hong Kong must urgently attempt to demarcate adequate boundaries between political and administrative accountability and develop an appropriate framework for the latter in order to deal with the issues of accountability related to administrative heads of public agencies (like the Chief Executive of the HKEx in the penny stocks) in cases of departmental fault.

Conclusion
There is no doubt that the introduction of the POAS has brought some fundamental political and administrative changes to the HKSAR which deserve the careful scrutiny of students of politics and public administration in general, and students of Hong Kong government and politics in particular. It is argued in this critical evaluation, that the POAS as introduced by the Tung administration is found wanting conceptually, constitutionally, and institutionally. While it is safe to say that the POAS may have brought a more coherent team of ministers to the Chief Executive, it is far from certain that in its present form, it will increase the democratic accountability of the HKSAR government or ensure the political neutrality of its civil service.

I would like to express my gratitude to Anthony Cheung Bing-leung, Alex Chan Wo-shun, and Rikkie Yeung Au Lai-kit for their intellectual exchanges on this topic.

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