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Hong Kong’s Unique “Co-Location” Arrangement

Dr. P. Y. Lo, Barrister-at-law, Gilt Chambers, Hong Kong; Faculty of Law, The University of Hong Kong

As Spain contemplates resuming direct rule over Catalonia, an autonomous region of Spain, by invoking the nuclear provision of Article 155 of the Spanish Constitution in October 2017, [1] at the other side of the Globe, Hong Kong, a Special Administrative Region of China, contemplates petitioning the Chinese Central Authorities for a grant of power to enable it to enact legislation to regard one part of Hong Kong as outside Hong Kong’s territory and jurisdiction, so that a simultaneous decision of the Chinese Central Authorities would authorize the stationing of Chinese officers and sanction the application of Chinese laws and jurisdiction to the same part of Hong Kong.

These are convoluted and contorted constitutional manoeuvers. If China wishes to impose direct rule on one part of Hong Kong back, there are direct ways of doing so, such as causing its State Council, the highest executive authority, to amend the administrative division map of the Hong Kong Special Administrative Region (HKSAR); [2] or proposing the National People’s Congress (NPC), the highest organ of state power, to amend the national law that governs the HKSAR, the Basic Law of the HKSAR. [3] This short note seeks to explain why these moves are taking place and examine whether they are justified.

China has been developing its high speed rail network in the last decade. Mr. Donald Tsang, Chief Executive of the HKSAR between 2005 and 2012, proposed that Hong Kong should be connected with the Chinese high speed rail network by constructing an Express Rail Link (XRL) connecting Hong Kong with cities in the neighbouring Guangdong Province, including the high speed rail connecting hubs of Guangzhou and Shenzhen.  The XRL’s terminus in Hong Kong was selected to be in a site of West Kowloon, a central location in urban Hong Kong. In order to facilitate passengers and ensure the XRL to be a speedy and comfortable service, the HKSAR Government proposed that the passenger clearance procedures of both Hong Kong and Mainland China be conducted in the same place of the West Kowloon terminus in Hong Kong (ie co-location of immigration, customs and quarantine (ICQ) facilities), so that passengers departing from Hong Kong can go to all cities on the Chinese high speed rail network without having to undergo clearance procedures again on the Mainland and passengers coming to Hong Kong can board trains at any station of their choice on the Chinese high speed rail network and go through Mainland departure clearance and Hong Kong arrival clearance at West Kowloon.  However, when the funds for the construction of the XRL were voted in 2010, the HKSAR Government’s statement on co-location of ICQ facilities was that this part of the proposal was under study and discussion with counterpart Mainland Chinese authorities.

Members of the Legislative Council in Hong Kong and the public of Hong Kong were then told from time to time by the HKSAR Government in the next 7 years that this co-location arrangement ‘involved complex legal and constitutional issues’, and there had been negotiations with Mainland authorities on the necessary arrangements. At one point, it was believed that as a way to resolve the ‘complex legal and constitutional issues’, the co-location arrangement would be implemented at the last Mainland station of the XRL at Futian following the example of the Shenzhen Bay Port, where one portion of this facility in Mainland China was leased to the HKSAR, which is authorized by a Decision of the NPCSC to exercise HKSAR jurisdiction there.  But the construction of the Hong Kong section of the XRL was not only delayed but also went over budget, with the Legislative Council in Hong Kong asked to approve additional funding in 2016. In the meantime, Futian station, which is said to be Asia’s largest underground railway station, opened for high speed rail services in 2015 without space being designated for co-located clearance.

In late July 2017, when the Hong Kong section of the XRL was said to be 95% complete, the HKSAR Government published a Discussion Paper announcing that the co-location arrangement would after all be implemented in West Kowloon, with Mainland Chinese officers sent there to a specified portion of the West Kowloon Station (which is to be called ‘Mainland Port Area’) to conduct clearance procedures for passengers in accordance with Mainland Chinese laws. [4]  To resolve the ‘complex legal and constitutional issues’, a ‘Three Step Process’ would be adopted to implement the co-location agreement at West Kowloon Station. This involves: Step One The Mainland and the HKSAR are to reach a Co-operation Arrangement in relation to the implementation of the co-location arrangement; Step Two The NPCSC then make a Decision at the request of the Mainland authorities and the HKSAR to approve and endorse the Co-operation Arrangement; and Step Three Both the Mainland side and the HKSAR side implement the co-location arrangement pursuant to their respective procedures. Local legislation will be necessary for the case of Hong Kong.

Now, after a few months of public promotion, the Chief Executive of the HKSAR, Mrs Carrie Lam, is to ask the Legislative Council in late October 2017 to debate on a ‘non-binding motion’ expressing support of the ‘Three Step Process’. [5] It appears clear that the passage of this motion by the Legislative Council will be applied by the Chief Executive in her petition to the Central Authorities as indicative of general support of the Hong Kong population through their representatives of the proposed ‘Three Step Process’ for co-location of HKSAR and Mainland Chinese ICQ clearance facilities at the West Kowloon Station, so as to kick start the process.

The HKSAR Government outlines the ‘consensus’ reached by both sides about the Step One Co-operation Arrangement in the Discussion Paper. No draft Co-operation Arrangement has been published. This consensus informs the reader that the control point at West Kowloon Station will have two parts: a Hong Kong Port Area established by the HKSAR and subject to HKSAR jurisdiction in accordance with HKSAR laws, and a Mainland Port Area established by the Mainland and be subject to Mainland jurisdiction in accordance with the Co-operation Arrangement and relevant Mainland laws.  This Mainland Port Area will be clearly delineated and made available by the HKSAR to Mainland Chinese counterparts for use and for exercising jurisdiction in accordance with the Co-operation Arrangement. An agreement will be signed by both sides in respect of the acquisition of the right to use, duration and fees that the Mainland Chinese authorities will pay for the use and maintenance of the structures and related facilities in the Mainland Port Area. No draft of the land use agreement has been published.

From what has been published so far, it appears reasonably clear that the HKSAR Government will make the land of the Mainland Port Area at West Kowloon Station available to the relevant Mainland authorities for the use of ICQ clearance of passengers. The HKSAR Government’s making available of such land will be governed by the laws of the HKSAR, including the Basic Law, which vests the management, development, leasing and granting of land in the HKSAR with the HKSAR Government. No divestment or relinquishing of any part of the HKSAR to Mainland China seems to be involved since there is no proposal to invite the State Council to promulgate a new map reducing the territory of the HKSAR. This seems to have been made clear by the HKSAR Government in the Discussion Paper where it states in paragraph 40 that the establishment of the Mainland Port Area ‘would not affect the rights and obligations regarding the assets (including relevant land as well as movable and non-movable assets on these lands) and facilities in relation to the Hong Kong Section of the XRL. The HKSAR would still exercise jurisdiction in respect of such matters in accordance with HKSAR laws and the Co-operation Arrangement.’ Hence one can say with confidence that the governing law regarding the land use agreement of the Mainland Port Area is to be the laws of the HKSAR.

How then can Mainland officers be sent to the Mainland Port Area and perform their ICQ clearance duties in accordance with Mainland law and enforcing such laws in the usual way it was done in Mainland China? The HKSAR Government states publicly in paragraph 42 of the Discussion Paper that it is ‘impossible to draw a clear distinction between [Mainland laws relating to clearance procedures] and those laws which would not be applied in the course of clearance procedures.’ The HKSAR Government also recognizes in paragraph 43 that there are rights, obligations and interests arising out of or associated with the operation of the XRL Hong Kong Section that should be governed by HKSAR laws.  Therefore, the ‘consensus’ reached is that ‘while the general position is that Mainland laws should apply in the [Mainland Port Area, with the consequence that the courts of the Mainland will exercise jurisdiction], certain specified matters should continue to be governed by HKSAR laws and be subject to the jurisdictions of the HKSAR courts.’ And according to paragraph 47, it is part of the ‘consensus’ that ‘[for] the purpose of exercising jurisdiction over the [Mainland Port Area] by the Mainland, with respect to the application of laws and delineation of jurisdiction, the [Mainland Port Area] will be regarded as outside the territorial boundary of the HKSAR.’

How can part of Hong Kong be legally regarded as outside the territorial boundary of the HKSAR? The HKSAR Government refers to local legislation that was enacted in 2007 that legally regard the Hong Kong Port Area in Shenzhen Bay Port (an area of Mainland China leased to Hong Kong) as an area lying within Hong Kong for the purpose of applying the laws of Hong Kong there, and claims that a similar approach can be applicable here, replacing ‘within’ with ‘outside’.  However, the HKSAR Government has not seen fit to publish a draft of the Step Three Local Legislation that it says would achieve this objective.

This approach is clearly conflates the 2007 addition of territory under control and augmentation of jurisdiction with the proposed 2018 subtraction of territory under control and removal of jurisdiction. The HKSAR Government is incorrect to imply in the Discussion Paper that the Step 3 Local Legislation, which seeks to disapply laws of the HKSAR in respect of one part of the HKSAR by not regarding that part of the HKSAR as part of the HKSAR corresponds in principle with the local legislation enacted in respect of the Hong Kong Port Area in the Shenzhen Bay Port, which applies laws of the HKSAR in respect of one part of Mainland China by regarding that part of Mainland China as part of the HKSAR.

There is a more fundamental constitutional problem. The HKSAR Government makes clear in paragraph 48 of the Discussion Paper that such an approach of disregarding legally one part of the HKSAR as outside the territorial boundary of the HKSAR is to make sure that Articles 8, 18 and 22 of the Basic Law of the HKSAR, the constitutional instrument of the HKSAR, would not apply to the Mainland Port Area at West Kowloon Station.  This is because these provisions of the Basic Law identify the laws of the HKSAR, impose limits on the application of national laws to the HKSAR, and require Mainland officers stationing in the HKSAR to observe HKSAR laws. Hence if they were to apply to the Mainland Port Area at West Kowloon Station, the general position agreed for the co-location arrangement that Mainland law and jurisdiction would apply in the Mainland Port Area and that the Mainland officers sent there would act in accordance with Mainland law would be obstructed. Hence these provisions of the Basic Law have to be avoided or circumvented in respect of the Mainland Port Area.

A yet more fundamental constitutional problem arises. Can the HKSAR enact local legislation to disregard one part of the HKSAR as outside its territory boundary for many legal purposes (including the jurisdiction of the HKSAR courts)? This turns on the competence of the HKSAR legislature to make laws. There is no express provision in the Basic Law to enable the HKSAR legislature to make such a law. Instead, Article 11 of the Basic Law provides both for the systems and policies practised in the HKSAR to be based on the provisions of the Basic Law and the consequence that: ‘No laws enacted by the legislature of the [HKSAR] shall contravene this Law.’ It seems therefore that under the systems and provisions of the Basic Law, the HKSAR is prohibited from enacting local legislation that purports to disregard, as a matter of law, any part of the HKSAR as being subject to the Basic Law and the institutions of the HKSAR (including the courts of the HKSAR) it establishes. The river does not run above its source. The HKSAR cannot, by local legislation, disestablish itself, even in respect of one of its constituent parts.

The HKSAR Government implies in paragraphs 53 and 54 of the Discussion Paper that these constitutional problems will be resolved by the Step Two NPCSC Decision that will approve the proposal set out in the Co-operation Arrangement, approve the relevant Mainland authorities to implement the co-location arrangment in Hong Kong, and authorize the HKSAR to implement matters in relation to the co-location arrangement in accordance with Article 20 of the Basic Law.  No draft Step Two NPCSC Decision has been published.

Article 20 of the Basic Law provides for the Central Authorities, including the NPCSC, to grant ‘other powers’ to the HKSAR. An introduction to a previous draft of the Basic Law explained that Article 20, together with Article 16 on executive powers of the HKSAR, illustrate that the HKSAR is a local administrative region whose powers derive from the Central Authorities. [6]

Article 20 of the Basic Law was applied once by the NPCSC on 31 October 2006 in respect of the Hong Kong Port Area at Shenzhen Bay Port in the Mainland to authorize the HKSAR to exercise jurisdiction over that area according to the HKSAR laws from the day on which the Shenzhen Bay Port commences operation.

Again, the HKSAR Government implies that the Step Two NPCSC Decision “is in principle no different’ from the NPCSC’s Decision of 31 October 2006. This claim clearly cannot stand. The Step Two NPCSC Decision clearly applies to the HKSAR and does not purport to authorize the HKSAR to exercise jurisdiction over a part of China outside the territorial boundary of the HKSAR. Rather, it would have the combined effect of authorizing the HKSAR ‘not to exercise jurisdiction’ over one part of the HKSAR (and to make local legislation to ‘implement’ such an authorization) and authorizing the relevant Mainland authorities to implement in the same part of the HKSAR the co-location arrangement.

Although Article 20 of the Basic Law can be read to provide for the NPCSC to grant powers to the HKSAR in specified terms on an ad hoc or case by case basis, it would be rather curious for the Chinese Central Authorities to grant the Special Administrative Region effecitvely the power to legislate to suspend the protective provisions of its constitutional instrument guaranteeing the separation of the legal and judicial systems of the region from the rest of China in respect of one part of the region, so that that part of the region would be governed like the rest of China, save and except several categories of matters.  Even though it is clear that the ‘Three Step Process’ must have been ironed out by the joint efforts of the HKSAR and Mainland sides, the fact that one of the co-ordinated steps is a petition to the Central Authorities for authority to validly legislate to curtail the HKSAR’s jurisdiction must be heartening to those of the Central Authorities receiving this document.

Not all people in Hong Kong find this ‘Three Step Process’ acceptable. Within days of the release of the Discussion Paper, four applications for leave to apply for judicial review were lodged with the Court of First Instance of the HKSAR seeking the court’s intervention to set aside the ‘Three Step Process’.  On 27 September 2017, a judge of the Court of First Instance refused to grant leave to apply for judicial review and dismissed these applications on the ground that they were essentially ‘premature’, and no decision has yet been made that would touch on, or affect, the rights or interests of any Hong Kong residents. [7]  These applicants were disappointed that the court did not intervene at this stage since they believed that if they only asked the court to rule on the validity of the Step Three Local Legislation after it had been enacted with the backing of the Step Two NPCSC Decision, there would have been no constitutional issue left to argue, for the NPCSC might have patched any constitutional flaw with its imprimatur. Yet, it ought to be pointed out, as the judge did in his judgment, that the NPCSC also has the power to interpret all provisions of the Basic Law finally, meaning impliedly that any legal challenge to the Step Two NPCSC Decision and/or the Step Three Local Legislation could fail if and when the NPCSC adopts an interpretation to Article 20 of the Basic Law declaring on the legality of its power of authorization and its authorization.  And even if there were no interpretation adopted by the NPCSC on its own, it is very likely that when the Hong Kong litigation comes before the Hong Kong Court of Final Appeal, it would be obliged to refer the question of interpretation of Article 20 to the NPCSC for final interpretation before it finally adjudicates the case, since Article 20 appears to be a provision concerning the relationship between the Central Authorities and the HKSAR. The NPCSC accordingly appear to hold all the cards, and one is obliged to prostrate humbly for this permanent part of the organ of state power to exercise restraint in adhering to the principle that its decisions and interpretations shall not be contrary to or inconsistent with the promulgated basic policies of the People’s Republic of China regarding Hong Kong.

This post has begun with an irony. It has to end with an explanation as to why this complicated and disarming route has been chosen. From the perspective of the Central Authorities, they have no political motivation to amend the Basic Law for various reasons, one of which perhaps is that the provisions they really wish to amend are those concerned with combating challenges to national sovereignty, national security and national development interests. Another point is that to the Central Authorities, the Basic Law of the HKSAR is a piece of national legislation, and the NPCSC has had a track record of authorizing the suspension or calibration in the application of national laws at selected cities and regions for the purpose of experimenting on reforms. [9] The third point may be that those who make decisions for the HKSAR are concerned nowadays more with economic progress through links and connections with the economic and social spheres of Mainland China than with the firewall provisions of the Basic Law that separate the socialist governing by law system of Mainland China and the common law rule of law system of the HKSAR. To them, fortunately, Viserion is available to take down this magical wall. It does not matter that the dragon is ‘undead’.

Suggested Citation: P. Y. Lo, Hong Kong’s Unique “Co-Location” Arrangement, Int’l J. Const. L. Blog, Oct. 17, 2017, at: http://www.iconnectblog.com/2017/10/hong-kongs-unique-co-location-arrangement


[1] See Víctor Ferreres Comella, I-CONnect Symposium: The Independence Vote in Catalonia–The Constitutional Crisis of October 1, Int’l J. Const. L. Blog, Oct. 4, 2017, at: http://www.iconnectblog.com/2017/10/i-connect-symposium-the-independence-vote-in-catalonia-constitutional-crisis; and Richard Connor, Spain’s Article 155: the constitution’s ‘nuclear option’, Deutsche Welle, 7 October 2017, at: http://www.dw.com/en/spains-article-155-the-constitutions-nuclear-option/a-40861578.

[2] China’s State Council had promulgated a new administrative division map for Macao, another Special Administrative Region, of China, in 2015 to confirm the waters under Macao administration and the demarcation of land on which the Macao Border Control Building at Guanzha stood as under Macao administration; see Order of the State Council of the People’s Republic of China No 665 made in accordance with the Decision of the National People’s Congress on the Establishment of the Macao Special Administrative Region, at: http://bo.io.gov.mo/bo/i/2015/50/extra/aviso128_cn.asp. Hence it appears that the State Council can promulgate a new administrative division map for Hong Kong under the similar Decision of the National People’s Congress on the Establishment of the Hong Kong Special Administrative Region, though it might not be politically palatable for the Chinese Central Authorities to re-define the HKSAR to except one part, with the consequence that the excerpted enclave would have to be administered as part of the Chinese Mainland by the neighbouring province.

[3] Article 159 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China provides for the procedure of amendment of the Basic Law. Amendments can be proposed by the State Council and the Standing Committee of the NPC (NPCSC), the permanent body of the NPC, as well as by the HKSAR through its delegation to the NPC. But amendments may not contravene the basic policies of the People’s Republic of China regarding Hong Kong, which have been set out in the Sino-British Joint Declaration 1984.

[4] See Department of Justice, Transport and Housing Bureau and Security Bureau of the HKSAR Government, Customs, Immigration and Quarantine Arrangements of the Hong Kong Section of the Guangzhou-Shenzhen- Hong Kong Express Rail Link (LC Paper No CB(2)1966/16-17(01)) (July 2017) (at: http://www.legco.gov.hk/yr16-17/english/hc/papers/hccb2-1966-1-e.pdf).

[5] See Clerk to the Legislative Council, Council Meeting of 25 October 2017: Motion on the co-location arrangement at the West Kowloon Station of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (LC Paper No CB(3)13/17-18) (6 October 2017) (at: http://www.legco.gov.hk/yr17-18/english/counmtg/mot/m_papers/cm20171025cb3-13-e.pdf).

[6] The Draft Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China (for Solicitation of Opinions) (April 1988), p 10 (at: http://ebook.lib.hku.hk/bldho/articles/BL0084.pdf).  An earlier report prepared for the consideration of the Basic Law Drafting Committee suggested that Article 20 was concerned with the question of ‘residual power’.

[7] Kwok Cheuk Kin & Ors v Chief Executive in Council & Ors (HCAL 453, 455, 458, 460/2017 (27 September 2017) (at: http://legalref.judiciary.hk/doc/judg/word/vetted/other/en/2017/HCAL000453_2017.doc).

[8] See, for examples, Decision of the NPCSC on Authorizing the State Council to Calibrate the Application of the Social Insurance Law of the People’s Republic of China Temporarily in Handan City of Hebei Province and 11 other cities serving testing points (Adopted on 25 December 2016 by the Twenty-firth Session of the Standing Committee of the Twelfth National People’s Congress) (at: http://www.npc.gov.cn/npc/xinwen/2016-12/25/content_2004954.htm) (in Chinese); and Decision of the NPCSC on Commencing Work in Testing Out National Supervision System Reform at Beijing Municipality, Shanxi Province and Zhejiang Province (Adopted on 25 December 2016 by the Twenty-firth Session of the Standing Committee of the Twelfth National People’s Congress) (at: http://www.npc.gov.cn/npc/xinwen/2016-12/25/content_2004968.htm) (in Chinese).  The first Decision specified a duration of two years. The second Decision has not specified a duration.

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Published on October 17, 2017
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