Audit body to urge HK to write off refugee debt

PUBLISHED : Friday, 23 May, 2003, 12:00am
UPDATED : Friday, 23 May, 2003, 12:00am

The $1.16b the UNHCR owes is all but irrecoverable, it says

The Audit Commission will later this month take up the issue of money the United Nations High Commissioner for Refugees is said to owe the Hong Kong government.

Assistant Director of Audit Patrick Leung Kui-yuen said the office would urge the treasury to write off the $1.16 billion sum as the chances of recovery were slimmer than ever after the UNHCR itself asked the government for a write-off.

The South China Morning Post reported yesterday that the UNHCR had asked Hong Kong to write off the sum because it was unlikely the cash-strapped body would be able to return the money spent on more than 220,000 Vietnamese refugees over two decades.

Mr Leung said the director had raised the issue numerous times with the administration over the past 10 years, suggesting that at least a substantial portion be written off. 'But the administration is so stubborn that it continuously says there is still some chance of getting the money back and tries to keep it on the books. They should write off at least 75 per cent of it given that the UNHCR hasn't paid anything in many years,' he said.

The UNHCR last made a payment of $3.9 million in 1998 and has repeatedly indicated its inability to settle the rest of the amount.

Mr Leung said the UNHCR's request for a write-off was the clearest indication that the money was gone forever. He hoped the Post article, pressure from the accounting profession and the auditor's letter would persuade the government to lay the matter to rest.

'The government's accounts will be finalised by the end of July and tabled in November ... We will submit our final audit opinion that this sum is irrecoverable and should be written off by the end of this month or early next,' he said.

Eric Li Ka-cheung, chairman of the Public Accounts Committee for the past eight years, said it was time the government faced reality and wrote the debt off. 'We have to be honest with ourselves, but this really reflects badly on the credibility of the UNHCR,' he said.

'For the government to trust an organisation like that in the future will take a lot of soul-searching.'

Mr Li said the financial secretary at the time the advance payments were approved took 'quite a bold view that this was a good credit-worthy client', but the judgment has proved to be unfounded. Keeping the debt on the books was a 'face-saving' measure that was unnecessary, he said.

'I am not trying to assign blame - the mistake was made with honest intentions at a very difficult time,' he said. 'Hong Kong has been a very good-hearted city trying to fulfil all international obligations to the full, but we should learn some international organisations are not as credit-worthy or worthy as we are.'

Frontier lawmaker Emily Lau Wai-hing agreed, saying legislators would like to get the money back, but after that it was extremely unlikely and should be written off.

Human Rights Monitor director Law Yuk-kai said that even though the British government had spent the money without the people's consent, it was time to think of the amount as Hong Kong's humanitarian contribution and let go.

'If we had the option to decide on our own, it would still be our obligation to support those unfortunate people,' he said. 'In the past, most of our [humanitarian] contribution has been either in the form of relief to China or to address disasters elsewhere, but we don't use say, a percentage of our GDP, to spend on humanitarian causes like other countries do.'

Mr Leung said Secretary for Security Regina Ip Lau Suk-yee would probably have the ultimate say in whether to write off the sum.