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Environmental, social and governance

Hong Kong government pledges action to make charities more transparent

Chief secretary says administration will ‘protect the public’s right to know’ about how organisations raise cash

PUBLISHED : Wednesday, 18 October, 2017, 9:31pm
UPDATED : Wednesday, 18 October, 2017, 10:39pm

The government has pledged to boost the transparency of Hong Kong charities and the ways they make their money after several reports slamming its lack of action and pointing to a number of loopholes in local charity rules.

Chief Secretary Matthew Cheung Kin-chung said the government was considering a list of measures including “disclosing financial information on fundraising activities granted a licence or a permit, to protect the public’s right to know.”

The list also included the eventual introduction of a one-stop service for charities to apply to organise fundraisers, and enhancing a hotline and a website to let residents lodge complaints about charities breaking fundraising rules, and to inform them about the issues.

But Cheung said that without a single independent authority the implementation of a new regulatory framework – previously recommended by the Law Reform Commission – would be “highly complicated”.

“The government needs to take into consideration the views and feedback of the public and various stakeholders, including charitable organisations of different types,” he said.

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Cliff Choi, business director of the Hong Kong Council of Social Service, said his organisation – an umbrella group that includes about 400 of the city’s 9,000 charities – welcomed the new measures. “We fully support the charities’ accountability and transparency. If you want to earn the public’s trust, you have to be accountable,” he said.

But Choi said there should be more coordination between government departments handling fundraising regulations and procedures.

If you want to earn the public’s trust, you have to be accountable
Cliff Choi, Council of Social Service

“They need to have a better alignment to avoid confusion,” he said.

In July, a Legislative Council committee expressed “grave concern and dissatisfaction” over the government’s limited monitoring of charities’ fundraising, especially what it said was a lack of effective measures to monitor new modes of fundraising, such as online appeals.

The Public Accounts Committee’s comments came in response to an earlier Audit Commission investigation revealed in April, which highlighted how the city’s rules on charities were riddled with loopholes, particularly in the handling of land they get at favourable rates from the government and their tax-exempt status.

In a 13-page report, the committee said it was “unacceptable” for the Home Affairs Bureau to take more than three years to comply with 18 recommendations made by the Law Reform Commission in 2013, aimed at tackling regulatory deficiencies.

Lawmakers had already questioned why some sites granted to charity groups at favourable rates were being used to operate commercial or non-charitable activities, making them profits running into millions over the years.