Many prominent Hong Kong Chinese hold foreign passports and many non-ethnic Chinese have become mainstays of the local community. Beijing recognised their contribution to Hong Kong during British rule and that is why the Basic Law, promulgated in 1990, has a provision sanctioning the right of Hong Kong permanent residents with right of abode elsewhere to sit in the Special Administrative Region legislature. In the aftermath of the Tiananmen Square crackdown, when Hong Kong was suffering a brain drain, the pragmatic approach of the Basic Law's drafters was greatly appreciated, but Hong Kong officials knew even then that enforcing the nationality requirement could prove a nightmare. There is no precedent, and hardly any guidance, because this is so unusual an arrangement: where else in the world would people find a legislature opening up its parliamentary seats for foreigners to contest? Hong Kong's electoral mix is already complicated enough. Apart from the 20 seats designated for direct district elections, there are 30 to be returned by functional constituencies and 10 by an 800-member election committee. The basis for forming the electorate at each type of poll is very different and the number of voters also differs greatly from constituency to constituency. With such a complex structure, how can foreign-passport holders fairly be allocated to one seat or another? The Basic Law provides only a very general principle. Article 67 says that permanent residents of the SAR 'who are not of Chinese nationality or who have the right of abode in foreign countries may also be elected members of the Legislative Council of the region, provided that the proportion of such members does not exceed 20 per cent of the total membership of the council'. Inevitably, the SAR Government is left to map out the details. The crux of the problem is the problem of how the Government is to provide a mechanism ensuring that no more than 12 of the 60 Legco seats go to foreigners. Politicians suspected it was precisely because of such a difficulty that, as long ago as 1990 - when the principle of a through-train of legislatures was agreed between China and Britain - the British Hong Kong administration has quietly refused to put any such nationality requirement in the electoral laws for both the 1991 and 1995 Legislative Council elections. While the pre-handover administration was privileged enough to avoid the issue, the present SAR team has no choice but to confront it. The SAR Government does not have many options. If officials were to take a very generous interpretation of the Basic Law, there should be no restrictions: foreign-passport holders should be allowed to contest any type of election. No doubt, the danger of this approach would lie in what happens if the total number of foreign-passport holders returned by the polls exceeds the 20 per cent limit. Should the Government ask some of the legislators-elect to renounce their foreign nationality? Or should it disqualify some of the returned legislators? Practically, neither option is desirable as both scenarios would entail complicated technical problems. The SAR Government would have to prepare a set of rules that was seen to be fair and open in order to make the successful candidates either give up their foreign passports or stand down. Given that the electoral method chosen, the basis for defining electorates and the number of voters is so different in the three types of the election, this would seem to be an impossible task. From this point of view, the no-restriction approach is a non-starter. By not spelling out some rules before the elections, the government is likely to invite more problems rather than solve the ones that can be foreseen already. If the Government were to impose some restrictions before the elections, it could theoretically do so in various ways. One option would be to allocate quotas equally to the three types of election: that means, up to four seats for each constituency category: those chosen geographically, those chosen functionally and those chosen by the election committee. Or, as some political parties have suggested, the quotas could be allocated to each category in proportion to the number of seats for each. In that case, the quota for the geographical direct polls would be four, for functional constituencies six, and the election committee quota would be two. But adoption of any of these options would carry the risk that the number of returned candidates might exceed the quota. If that happened, a disqualification mechanism would still be required. In the light of all these difficulties, the Government has taken the easy way out. Instead of taking the trouble to find a fairer way to distribute the quotas, electoral officials have endorsed an administratively convenient way by allocating them to 12 designated functional-constituency seats. The constituencies are: accountancy; engineering; finance; financial services; legal; architectural; surveying and planning, real estate and construction; tourism; import and export; insurance; the Hong Kong General Chamber of Commerce; and the Federation of Hong Kong Industries. Electoral officials suggested that the 12 sectors had more candidates with the right of abode overseas but no evidence has been adduced to support such a claim. Explaining the Government's decision, the Secretary for Constitutional Affairs, Michael Suen Ming-yeung, noted that the Government did not want to bury foreigners' potential to contribute to the SAR. The Government was adamant the present arrangement contained no political motive, and it was reasonable and totally in line with the Basic Law and the Bill of Rights. Not surprisingly, the proposal provoked a barrage of criticisms from pro-democracy legislators. Ousted legislator Emily Lau Wai-hing was furious. 'It is very unfair. It is against the principles of fair and open elections and it also violates the Basic Law,' she said. 'It is a strange arrangement and they cannot explain why they have designated those constituencies and ruled out the others. The selection is wilful and arbitrary.' The holder of a British passport, Ms Lau said she would consider suing the Government but added: 'I have never said that I will not give up my foreign passport. If I am to stand for the election I will give up my passport. I leave all my options open. 'But this is a matter which is separated from the question of whether the Government has acted in accordance with the Basic Law. If I keep silent on this, the Government will think that it is right.' To Ms Lau there are better options than the one envisaged by the Government. One is to allocate all the quotas to direct election since eventually the whole legislature is to be directly elected. The Government finds itself in the predicament that there is no fair and easy way - so discretion is essential - to implement the requirements of the Basic Law. Until now the Government has failed to provide any objective standard as a basis for the selection of constituencies. Even if the Government can persuade people why the quotas should not go to direct-franchise seats or election committee seats, it still has the problem of explaining why most foreign-passport holders ought to be concentrated in the 12 designated sectors among the 30 functional groups. The present proposal is an ugly pragmatic solution to a very awkward problem. Administratively it is the most convenient way to enforce the nationality requirements but it has indeed undermined foreign-passport holders' rights and freedom to contest next year's polls. From the legal point of view the Government can argue it has not contravened the Basic Law and it seems any challenge to the present arrangements would stand a slim chance of success. But that does not make the Government the 'winner', because adopting such an arbitrary approach is not going to enhance the Government's credibility in organising the elections of the first SAR legislature. In the long run, serious consideration must be given to changing the Basic Law either to disqualify all foreign-passport holders or, if the SAR does treasure such people's contribution, to remove the 20 per cent ceiling and allow them open slather.