But several nature-based tour operators have been told by the Travel Agents Registry they are not exempt and must obtain a licence - which can only be granted if the applicant has invested huge sums in the business, which can be more than $150,000.

'We've been sandbagged with stifling bureaucracy,' said Martin Williams, chairman of FirstStep Nature Tours, which conducts bird-watching tours at Mai Po wetlands and hiking expeditions.

'While my reading of the ordinance indicates it was intended to allow small operators to function, it appears this isn't now the case.

'I was told you have to own the place you operate to qualify for an exemption. I argued that owning a service was quite different to owning the facility.'

The Travel Agents Registry says the owner or operator of a service being provided to the visitor was understood to mean an owner or operator of a tourist attraction, restaurant, retailing or wholesaling outlet or local transport connected to these activities.

'The small tour operators merely carry on businesses by taking visitors to obtain any of the prescribed services. They are not owners or operators of any prescribed service as such. Hence, the exemption under [the ordinance] should not be applicable to them,' registry spokesman Carton Yau said.

Mr Williams said this argument was ridiculous as many areas marketed by tourism operators could not physically be owned by them.

'I've even heard that the operator of Hong Kong Dolphinwatch was told he would be classed as a travel agent because he didn't own the sea,' he said.

Bill Leverett, Dolphinwatch's former owner, said the problem was not limited to eco-tourism firms.

'I don't think there's someone in the Hong Kong Tourism Board, the Travel Industry Council [TIC] or Travel Agents Registry who wants to crush eco-tourism, but it makes it impossible for new ideas to grow and is fossilising the industry more and more,' he said.

Mr Leverett suggested the law be scrapped.

'The law, as it is, passes the buck to the TIC. It's up to the TIC to decide whether a company gets a licence or not and the TIC is not interested in policing, they just want to collect licence fees. The law is pointless.'

After initially believing Dolphinwatch was exempt, the company is now going through the steps of getting a licence.

'But this is really tough on them, especially at a time like now, with the industry hard hit by Sars,' Mr Leverett said.

Paul Etherington, who operates Natural Excursion Ideals which specialises in kayaking and hiking trips, also said the law was flawed.

'How is it my company and I suddenly become travel agents? I don't handle tickets, hotels or airlines,' he said. 'I own my own company, kayaks, car, boat and do all my own work. I run activity-based trips which are no different to a coach and his athletes or a personal trainer. Does this mean, then, that all the coaches should register and be inbound travel agents?'

The TIC's executive director, Joseph Tung Yao-chung, said the council was aware of the difficulties facing eco-tourism operators but defended the need to include all operators of tourism services.

'We want a very healthy travel industry. The main reason government is introducing these changes is to ensure the industry is properly regulated,' he said.

'I understand that the eco-tourism operators may have worries, but the council does not want to see an exemption for a certain sector, such as eco-tourism.'

But Mr Tung said the council appreciated the importance of eco-tourism operators.

The Tourism Board also said it was aware of the problem and had been helping small operators affected by the new requirements.

'We very much hope that an amicable solution can be found because we do not believe that it was the intention of the new legislation to stifle the operations of small, entrepreneurial operators,' board spokesman Simon Clennell said.

'Its purpose was to raise overall standards in the inbound tour sector - an objective the Tourism Board fully supports.'

EXCLUSIVE CLUB

(Fees quoted are for lowest level of membership available)

- Bank guarantee: $150,000

- Travel Industry Council membership application fee: $1,800

- TIC membership annual subscription: $600

- Entry fee to join TIC association member: $500 to $1,000

- Annual membership fee payable to association member: $600-$750

- Contribution to TIC Bonding Fund (refunded on leaving TIC): $2,000

- Completion of a tourist guide course: $725

- Tourist Guide Pass issued by TIC (valid for 3 years): $300

TOTAL: $157,175