(This is an extracted version. To request a copy of the full speech, please email to eoc@eoc.org.hk.)

Thank you very much for giving me this opportunity to share with you why I think an equal opportunities environment is important for Hong Kong.

Hong Kong has often been described as a barren rock and you would no doubt have heard that many times. We have no minerals underground or agriculture above ground. What we do have are people. On the collective level an equal opportunities environment is about investment in human capital to allow human development to take place.

THE BUSINESS CASE

What is the business case for equal opportunities then? Business is by nature profit driven, it doesn't fight prejudice, it panders to it. Just look at the ads. Typical alcohol and cigarette ads always have good looking authoritative male leads and the allure of the triple toxin of money, power and success brings with it, beautiful women. I recall an ad on financial services not that long ago showing the diagrams of a female brain and a male brain. The male brain is looking for investment gain and, the female, looking at ways to spend it. There was in fact an uproar about that ad and it was withdrawn. How can we then deliver our social messages which are 'value' or 'rights' based in a 'profit' based environment? Well we have to look at what motivates business.

An essential aspect of business is about getting the best talents. A successful market strategy needs a "free market" of ideas. A motivated workforce enhances productivity and competitiveness. A study by Covenant Investment Management in 1996 on Standard and Poor's 500, found that the annualised return for the 100 companies which rated lowest in rights averaged 8%, compared to 18% for the companies that rated highest in rights. The figures are clear: a motivated work force pays.

This sentiment is confirmed by later studies. The Investor Responsibility Research Centre having analysed the 2001 proxy voting records, found that "shareholders in record numbers want companies to adopt global labour standards to ensure fair, decent working conditions for overseas employees". Other surveys have found that:
• "Companies that pursue diversity outperform the S&P 500."
• "Heterogeneity – a mixture of genders, ethnic backgrounds, and ages in senior management teams – consistently correlates with superior corporate performance."
• "…54% of the top 100 companies by revenue have multiple female directors versus one-third of the Fortune 500 overall…"
• "Racial and other forms of discrimination have an economic impact on society, according to U.S. Federal Reserve Chairman Alan Greenspan: they reduce profits."

Business now recognizes that social expectations have changed. Increasingly consumers are demanding the foods they eat, the clothes they wear and the products they use daily are manufactured under ethical working conditions. Market share and brand name value now depend on consumer acceptance of the way a company does business. Failures in these areas can lead to consumer boycotts.

Increasingly, corporations are required to operate in a fair, transparent and accountable manner. Numerous public and private bodies have responded by establishing standards and norms related to important aspects of corporate governance.

GLOBALISATION

he process of globalisation has had a dramatic impact on the world economy, characterised by intensified economic interdependence and global competition. But in recent years, there has been a substantial backlash against globalisation because the economic progress is not evenly dispersed. The push for competition, deregulation, privatisation and open capital markets is found to have undermined economic prospects for many of the world's poorest people.

The power of the corporation in an open border scenario can be enormous. Some multinational corporations have greater wealth and power than states and can play one state against another. This can result in exploitation of people, deprivation of rights, damage to health and devastation to the environment.

The weaknesses of globalisation are acknowledged internationally and point to the fact that business can no longer operate without some focus on social accountability. The fact is: business does impact on individuals, communities and the environment. Hence, there must be a framework, which allows economic development and benefits from economic progress to be more equitably distributed between places and people.

Removing trade and investment barriers open up markets and provide new opportunities but this can also leave countries vulnerable to global economic changes. These can be in the form of exchange rate fluctuations, commodity price variations, wage differences and devastation of local industries. Globalisation brings with it greater vulnerability to external changes and the danger increases with the lack of sophisticated financial, economic and social structures and institutions in developing territories to give them stability.

Two aspects of globalisation have become particularly poignant in this part of the world.

The entering of China into WTO means a more liberated regime of trade within China. Global market forces will be brought into China at a speed that will outpace the development of China's internal institution, procedures and laws required to support it. These global forces can create grave difficulties for an economy but they can also bring in a large body of policies and practices to benefit the local economy.

Shell Brazil was honoured as a 'Child's Friend Company' for its corporate policy of not doing business with companies that use child labour. Business can require its contractors to adhere to ethical practice in providing a safe and healthy working environment, adopt fair labour practices and be environmentally friendly. It can also upgrade local skills, provide schooling, medical and health benefits to the children of the labour force or housing to meet the severe shortages. Business can be an agent and a partner for societal development to sustain its long-term interest in a market.

Economic development in Hong Kong began with the establishment of light manufacturing in the 1950s. Textile, electronics, watches, and many other goods have all helped put the "Made in Hong Kong" label into the world's markets. But with the opening of China in the 1970s, assembly lines have moved north across the border and the movement of the industries hastened the transformation of Hong Kong into a service economy. The structural economic changes in Hong Kong have been made worse by the Asian financial crisis. Hong Kong continues its economic transformation into a knowledge-based economy to combat rising cost and the availability of cheaper labour and land across the border. It is ironic that while Hong Kong banked on a free market and an open port, the shift to cheaper centres for the Hong Kong industries have dealt cruel blows to the unskilled and semi skilled workers and have displaced them from the labour market. The enhancement of human capital is therefore of particular relevance to Hong Kong.

The Chief Executive's Commission on Innovation and Technology sums up the importance of human capital to the development of Hong Kong in its final report in 1999 as follows:

Human capital is the single most important factor supporting Hong Kong's development into a knowledge-driven and technology-intensive economy… Bringing in additional intellectual capital would boost economic growth and employment in the same way as external financial capital contributes to the economy…

The report also observed that in its post war period of economic development, Hong Kong had benefited significantly from a large pool of entrepreneurs and skilled and motivated workers from the mainland and that Hong Kong has a sizeable expatriate business community which brings to Hong Kong new ideas, technical know-how and advanced management practices from all over the world.

INTERNATIONAL LAW

International law has now also raised the prospect of using international human rights covenants, such as the right to health, to mitigate against the restrictions created by patented drugs for HIV/AIDS treatment and allow generic drugs to be produced. This is one example where international covenant rights can be used as a shield against the encroachment of unmitigated and patented monopolies.

ETHICAL INVESTMENT

Greater recognition is now given to social accountability as a tool to drive the globalisation process as well as to improve business performance. The global market pressures have also provided the impetus for investors to be sensitive to the social development of each market to avoid rejection of its services and products and to reduce investment risks.

In response to growing investors' interest in sustainable development, we now have different global indexes and studies tracking sustainability in the world of business. The Dow Jones Sustainability Group Indexes (1999) track the top 10% companies that lead their industry in terms of economic, environmental and social criteria. Hong Kong Productivity Council also certifies social accountability standards of companies in Hong Kong particularly those with factories on the mainland. The buyers require that.

Non-aligned watch dogs include Business for Social Responsibility in the US, Corporate Social Responsibility – Europe and specialised units within Amnesty International and the Lawyers Committee for Human Rights.

Many businesses have also formed networks and alliances to promote social accountability while others have made a business out of it too.

Travel agencies in Japan are marketing barrier-free tours for the physically disabled. A tailor-made wheelchair tour of Los Angeles includes in its itinerary, visits to a research centre for spinal-cord damage, a rehabilitation hospital, a healthcare equipment store and a chance to watch a wheelchair-basketball practice. Another example is a travel plan for people with diabetes.

Our Gas Company has recently launched statements in Braille and gas stoves with Braille indicators as well as automatic switch off after a number of hours.

The EOC is currently working with the IT, the insurance and banking industries to make services more accessible to people with disabilities including the visually impaired. We are campaigning for the rights of people with disabilities not only on the basis of rights but also on the basis of market share. They are customers.

THE REALTY CHECK

Promoting equal opportunities to the business community in Hong Kong must, quite apart from the law, be based on market driven arguments and market driven tools. The difficulties are probably the same the world over. However there are also a few issues which are peculiar to Hong Kong.

• We have a very low tax regime and companies are more reluctant to apply more resources towards staff training or welfare or corporate philanthropy.
• The issues are new to the business world and awareness level is low.
• 86% of establishments in Hong Kong employ less than 10 people making the job of conveying our messages quite difficult due to the disperse nature of the group.

To develop market driven tools we have been advocating an incentive scheme for the government to reward parties with additional points for good and ethical business practices. To identify the current level of understanding and compliance regarding Hong Kong's equal opportunity laws, we have conducted a series of business surveys to identify how they are currently complying with the law.

Some of the survey findings on small and medium sized enterprises reflect:
• under-reporting of acts
• under-estimation of liabilities
• the benefits are: a good working relationship, higher work efficiency, stability, employees' confidence in the company
• many say they would do something to minimize their liability.

The research will help us establish the kind of training we should deliver as well as to design an information kit for small and medium sized businesses. The Trade Development Council has been kind enough to offer to us its distribution services to the small and medium sized enterprises including featuring the EOC on its website. The EOC would continue to work with the business sector to establish a culture of excellence, equality and diversity in the workplace.

CONCLUSION

Let me conclude by referring to two court actions that we undertook regarding compliance in the employment sector, one against government and one in the private sector.

In the case regarding Chang Ying Kwan, the court ruled that Ms. Chang was discriminated against on the ground of pregnancy and that she was unlawfully victimized by her employer by reason of her complaint to the EOC. The case also made it clear that the employer company would be vicariously liable in the circumstances and that a resignation she tendered under the circumstances constituted constructive dismissal.

In the case against government (the fire and customs services), the court ruled that it was disability discrimination by refusing to employ those who have relatives who suffered from mental illness.

The anti-discrimination laws have made a difference for people and we are here to tell them that they matter as individuals.