One set of laws for us ...

PUBLISHED : Saturday, 03 July, 2010, 12:00am
UPDATED : Saturday, 03 July, 2010, 12:00am

Yet again the Hong Kong government is planning to exempt itself from legislation offering protection to the public. Even before the new competition bill reaches the legislature, the administration has made it clear that it intends to be above the law, in the same way that it exempted itself from employment requirements in equal opportunities legislation.

This demonstrates a worrying attitude towards the rule of law, undermining the principle of equality before the law. It suggests that, when it comes to protecting citizens' rights, the government is keen to exclude itself from legal measures that offer this kind of protection. And exemptions of this kind weaken the credibility of the legislation.

Cynics will say that there is no such thing as perfect equality under the law because rich people are better positioned to defend their interests by employing high-charging lawyers while those of lesser means may avoid litigation purely on the grounds of cost.

The cynics would not be wrong. But it is one thing to have an uneven playing field created by the hard realities of inequality in society, and quite another to have the state build inequality into the legal system to its own advantage.

Indeed, there must be considerable suspicion over exactly why, in the case of the new competition law, the government is so keen to seek exemption.

Although official propagandists spend a great deal of time trying to persuade the world that Hong Kong is devoted to free enterprise, the reality is that the state indulges in levels of intervention not seen even in societies that extol the role of government in commerce.

Hong Kong government-owned monopolies exist, for example, in the provision of postal services alongside water and drainage, while officially sanctioned monopolies and duopolies flourish in the supply of energy and public transport.

Moreover, the government is the major player in Hong Kong's property market both through ownership of public housing and through its control of land supply. Then there are the more bizarre forms of state intervention in business which mean that, unlike any other place in the world, the Hong Kong government owns the major theme parks.

And via the Trade Development Council, we have a public body which seems to spend most of its time squeezing private-sector competitors out of the exhibition business.

I am not a free-market ideologue and therefore have no objection in principle to both state ownership and intervention in the market.

The post office, for example, seems to run pretty well and provides an excellent service to consumers.

And only the most blinded ideologue would fail to appreciate the historically significant role that the vast expansion of public housing played in lifting Hong Kong's poor out of homes barely fit for human habitation.

The problem is not state participation in the market but the lack of checks and balances to ensure that, where the state intervenes, there is independent purview of its activities.

When the government introduces new legislation exempting itself from laws, and thus deprives the public of redress for anti-competitive practices, it can only be because it fears what might happen were it to be treated like everyone else.

This fear is reflected in the way that this administration has been relentlessly politicising public bodies of all kinds, including those with supervisory responsibility.

Political opponents of the government have been pushed off public bodies such as the Housing Authority.

And, every time a new body is created, it is stuffed with trustees who are either being rewarded for supporting the administration or are simply assumed to be sufficiently docile so as to cause no trouble.

Even the new Harbourfront Committee, presumably as far away from politics as could be, has been filled with the sons and daughters of tycoons, who occupy more than a third of the places reserved for non-civil-servants.

Tycoons, whose interests are assiduously nurtured by the government, understandably have a strong record for backing the administration at all times.

A competition law is not some vague concept which, if it works, will be anything other than important for ordinary consumers who are being exploited by monopolistic practices leading to extraordinarily high prices in sectors that are dominated by a handful of players, such as supermarkets.

And these monopolistic practices appear to be endorsed by the government - as seen when an official investigation into petrol prices revealed that, although every single retailer charged as much as the other, there was no evidence of collusion. What's the result? We have some of the highest petrol prices in the world and the oil companies are protected by the government.

Will the new competition authority also be blind to collusion and will it be filled with the scions of tycoons and others who are most unlikely to put the interests of ordinary people first?

Stephen Vines is a Hong Kong-based journalist and entrepreneur