Last week, at least three workers were killed on construction sites. In multiple articles in this column, I have urged the Hong Kong Special Administrative Region government to introduce mandatory no-fault compensation at HK$1 million ($128,000) to the family of each worker killed or rendered permanently unemployable. Although the government in 2023 raised the maximum penalty to HK$10 million and a maximum imprisonment term of two years for “extremely serious occupational safety and health contraventions” against “general duty” requirements, the temptation to take chances is simply too great. Employers will argue that they have taken all the necessary precautions. Proving otherwise is not a straightforward matter. In practice, the courts generally hand out fines much lower than the maximum. Meanwhile the emotionally distressed families of the victims often need to file a lengthy civil suit against the employer for compensation.
The grim statistics show that the legislative changes in 2023 had hardly any impact on industrial and occupational safety. The courts routinely continue to hand out miniscule fines, and the families affected are often plunged into helplessness and financial difficulties. Sometimes the employers themselves have financial difficulties and need to pay the compensation in instalments.
The typically nugatory fines do not necessarily mean that the companies concerned face minimal consequences. Sometimes the consequences could be much worse than the cost arising from the mandatory compensation I proposed. Following a series of serious incidents, Aggressive Construction Engineering Ltd was eventually taken off the list of public works contractors. The losses from being taken off the list of companies with eligibility to bid for public work projects are huge (it is still in the category of “suspension until further notice”).
Just over this weekend, news broke that some contractors have been banned from bidding for public projects for up to a year for the unauthorized shortening of at least 23 screws connecting formwork used for casting the concrete core walls in three light public housing sites in Siu Lam, Tuen Mun and Chai Wan. The firm responsible for overseeing work quality, Able Engineering Co Ltd, has also been ordered to fix the problems. Also banned for one year from bidding for government projects was C M Wong & Associates Ltd, which Able hired to supply and oversee structural engineers. A six-month ban was imposed on the government-hired project management company, Wong Tung & Partners Ltd. According to Kenny Tse Chi-kin, vice-president of the Hong Kong Institute of Surveyors, these penalties are serious and constitute “a rather big blow”.
If the government had introduced the no-fault compensation to workers killed at work, employers would certainly refrain from taking chances. They would all have to buy insurance, which is of course an additional business cost but an affordable one for low-risk employers
If Tse is correct, the contractors would definitely prefer paying a substantial fine, instead of being banned from bidding for government projects. If the purpose is to teach these wrongdoers a lesson, a big enough fine would do the trick. There will then be less disruption to ongoing projects. I recall that when Aggressive Construction Engineering Ltd was suspended, the government had to find other companies to finish the projects.
If the government had introduced the no-fault compensation to workers killed at work, employers would certainly refrain from taking chances. They would all have to buy insurance, which is of course an additional business cost but an affordable one for low-risk employers. Employers will try to demonstrate to insurance companies that they have taken all the necessary precautions and that serious accidents are unlikely. Human nature being what it is, serious industrial accidents will decline. We will significantly reduce the number of broken families. In the case of shortening screws without authorization, a rather stiff fine plus requiring the companies concerned to fix the problem would not be an existential risk to the companies. Suspending them for a year from bidding for public works could lead to the companies folding up for good.
Related to this discussion is my earlier proposal for legalizing illegal structures if they are safe and do not adversely affect the public (If Illegal Structures Are Safe, Then Legalize Them, China Daily, Sept 19, 2023). I recall that in 2012, former chief secretary for administration Henry Tang Ying-yen and his wife Lisa Kuo Yu-chin’s family residence in Kowloon Tong was found to have an illegal basement. The government ordered Kuo (the registered owner), to restore the house to its original shape. I find this rather unfortunate. Kuo was fined appropriately for unauthorized work on her house. Such a fine should be big enough to motivate people to go through the proper procedures for authorization. I had previously proposed that in such cases the owner would need to hire an authorized person to certify the illegal structure is safe every five years. Meanwhile, the house should be assessed appropriately for rates and land rent.
I am sure Kuo would have liked to retain the basement in question. If such a structure is safe and does not hurt anyone’s interests, I do not see any reason why it cannot be legalized.
With population aging and the development of the Northern Metropolis, there is a lot of pressure on the public purse. By punishing wrongdoers appropriately, we can raise more funds for the good of society, and at the same time produce the necessary incentives for behavioral correction.
The author is an honorary research fellow at the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University, and an adjunct professor at the Academy for Applied Policy Studies and Education Futures, the Education University of Hong Kong.
The views do not necessarily reflect those of China Daily.
