The Legislative Council is split again, with a non-business cohort criticising the government, Hong Kong power companies, new energy tariffs and the tariff review process, claiming a lack of transparency. This has created a situation in which lawmakers, under Legco's Powers and Privileges Ordinance, are demanding that both power companies disclose confidential information to determine if their tariff increase is reasonable.
This is a request that all pro-business legislators, Hong Kong businesses and, more importantly, the government, should resist, as once Legco has received this information, past precedents suggest it is only a matter of time before it makes its way into the hands of the public. Thus, it carries the risk of backfiring and threatening Hong Kong's reputation as a trusted place to do business, and increasing prices for Hong Kong goods and services.
One must critically question whether it is really in the public interest to use the 'in extremis' ordinance in all situations.
All Hong Kong businesses should be concerned that the ordinance could become a de facto 'reveal all' tool when Legco does not like what it sees in the government's contracts, a scenario that could give both existing and prospective business partners of the government cause for concern.
Consider a scenario where either power company seeks cleaner fuels to meet stricter air pollution standards. If it becomes known, via the ordinance, that there are few suppliers of suitably clean fuel, both power companies would lose key bargaining tools that assist in keeping tariffs down. Suppliers, knowing the companies have no other fuel options, could potentially raise their prices, with the increases passed on to consumers.
It is crucial for all Hong Kong businesses to understand that this scenario could potentially play out across all industries, with serious implications for Hong Kong Inc - and, worse, local consumers. If the ordinance were to be commonly used to disclose sensitive information, not anticipated at the signing of a business contract, Hong Kong's international reputation could be affected.