It is a great pleasure to be here today to engage with you in discussions on diversity. As global operators, I know you are familiar with the concept of diversity, and I especially welcome this opportunity for direct exchange and cross-fertilisation of ideas.

We live in an age of major social and political realignment brought on by technological changes and globalisation of the economy. The advent of a global economy brings people of the world closer together than ever before, and organisations in both private and public sectors need to explore ways to better serve their constituents or customers.

UNIQUELY HONG KONG

Let me set the scene by firstly saying something about Hong Kong.

Hong Kong was a small fishing community in the South China Sea prior to colonisation by Britain in 1842. In the ensuing 150 years, the territory attracted large droves of refugees from China and other Asian nations from early 1900s to mid-1940s; was occupied by Japan during World War II; underwent rapid economic expansion from 1950s onwards and finally reverted back to China on 1 July 1997 to become the Hong Kong Special Administrative Region (HKSAR) under a "one country, two systems" policy.

Economic development in Hong Kong began with the establishment of light manufacturing in the 1950s. Textiles, electronics, watches, and many other goods have all helped put the 'Made in Hong Kong" label onto the world market. Tax policies also began to attract growing foreign investment, further adding to the territories' rapid growth into the present day economic "tiger".

Today, Hong Kong serves as one of the world's major financial centres and the first developing economy to enter the world's top 10 economies. While much of the manufacturing is now likely to be done across the border and beyond, Hong Kong remains a focal point for a huge import-export trade. It is home to the largest community of multinational firms in Asia outside of Japan. More than 2,000 multinational companies maintain regional offices or headquarters in Hong Kong. These multinational firms have played important roles in Hong Kong's economic development. Similarly Hong Kong's homegrown companies have become increasingly global.

When Captain Elliot landed in Hong Kong in 1842, he described it as a barren rock. To this rock, people came, building Hong Kong into one of the freest and most competitive economies. It is testimony to this development that for the past six consecutive years, Hong Kong has been ranked by the Heritage Foundation as the world's freest economy. While Hong Kong has no natural resources of any kind, above ground or underground, what it does have is people, the human capital. Hong Kong now has a 6.7 million strong population and a large multicultural society. Our social programmes continue to raise the standard of living and are comparable to that of many Western countries.

Of the many remarkable features of Hong Kong, one that deserves particular notice is the rule of law. Hong Kong is, uniquely, the only Chinese city in the world that has a common law system. It is similar to many English-speaking countries like the U.S., the UK., Australia, Canada, and New Zealand. Our jurisprudence does not develop in isolation and our courts are kept aware of legal developments in other common law countries.

The rule of law is important for protecting individual rights against the notion of majority rule. It is a system that provides politically neutral rules and allows different spheres of interests to function together without one overriding the other. Business operators who are familiar with common law systems in their own countries will be able to apply Hong Kong laws much more easily and can have confidence in the way the courts will enforce legal rights.

DIVERSE ASIA

Asia is the largest continent in both size and population. It covers almost a third of the world's land area and has about 60% of the world's population. The existence of a wide variety of ethnic groups is one of the most important features of Asia's population. The people differ greatly in their ancestry, customs, languages, religious beliefs, and ways of life. It has been estimated that over 1500 languages are spoken in Asia, and all the world's major religions began in Asia - Buddhism, Christianity, Confucianism, Hinduism, Islam, Judaism, Shinto, and Taoism.

Most of Asia was colonised by the economic and military strength of Western nations – especially the European countries – during the 1800's. Decolonisation only began from mid-1940s onwards and nation building was a critical task for many new political leaderships. This meant not only establishing their economic viability but also constructing a stable and viable State through incorporation of diverse ethnic groups.

An assortment of political systems, economies and fiscal governance systems operate in Asia. Among developing countries, East Asian economies have been one of the most dynamic groups during the 1965-1996 period, achieving rapid economic and national developments. This phenomenon has been referred to as the Asian Miracle and the results were recognised by the emergence of the Four Asian Dragons: Singapore, Korea, Taiwan and Hong Kong. The Asia region was hard hit by the Asian financial crisis but thankfully, the momentum of economic recovery had increased significantly in 1999 with real GDP at 6.0%, compared with 3.8% in 1998. This rose marginally to 6.2% in 2000, an indication that economic recovery was now under way.

In a region as politically, economically and culturally diverse as this, needless to say, sensitive and appropriate tools of convergence are essential to allow effective business cooperation and human interaction.

GLOBALISATION

The process of globalisation has had a dramatic impact on the world economy, characterised by intensified economic interdependence and intensified competition on a global level. The 20th century saw unparalleled economic growth, with global per capita GDP increasing almost five-fold (IMF, 2000). But in recent years, there has been a substantial backlash against globalisation because the economic progress is not evenly dispersed. The recent protest against the Summit of the Americas in Quebec City is yet another visible sign of the growing discontent in some quarters of our society. The gaps between rich and poor countries, and the rich and poor people within countries, have grown. 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 weaknesses of globalisation are acknowledged internationally and point to the fact that businesses can no longer operate without some focus on social accountability. The fact is: businesses do impact on individuals, communities and the environment. Hence, equal opportunities and social accountability are important because they provide an enabling and empowering framework for the individual to benefit from economic development. Equal opportunities can also allow different spheres to coexist by providing a level playing field for individuals to succeed.

Businesses need to take up their social responsibilities consistent with equal opportunities principles. They need to recognise that social accountability can be used as a tool for improving business performance. Far from being diametrically opposed, diversity as a strategy can drive the globalisation process. Shell Brazil demonstrated the confluence of these various concepts in its work in discouraging the use of child labour in the production of sugar cane alcohol. The company was awarded the title of "Child-Friendly Company" in 1999. Diversity can also help to retain the best employees, improve a company's image and its marketability; and for companies planning on developing new overseas markets, it makes good business sense to use local resources and local talents.

At the international level, the United Nations Secretary-General, Kofi Annan, challenged world business leaders at the 1999 Annual Meeting of the World Economic Forum at Davos, to initiate a Global Compact of shared values and principles to give a human face to the global market. For the community in Hong Kong, we have been advocating three principles of the Global Compact:
Businesses should support and respect the protection of international human rights within their sphere of influence; and
Make sure their own corporations are not complicit in human rights abuses; and
Eliminate discrimination in respect of employment and occupation.

Another example of international initiative is the launching of the global Dow Jones Sustainability Group Indexes (DJSGI) in 1999 in response to growing investors' interest in sustainable development. These indexes track the performance of sustainability leaders worldwide and encompass the top 10% of companies that lead their industry in terms of economic, environmental and social criteria. I understand that our host today, Dow Chemical, was amongst one of the corporate sustainability leaders in the DJSGI' Annual Review in 2000.

In June 2000, the Organisation for Economic Co-operation and Development (OECD) Ministers endorsed the revised "Guidelines for Multinational Enterprises", which set out voluntary principles and standards of responsible corporate conduct in areas such as the environment, labour standards and human rights.

In the U.S., the former Vice President, Al Gore, and the Department of Commerce commissioned a benchmarking exercise in October 2000 of best practices in achieving workforce diversity. Significantly, the exercise revealed the large number of public and private sector organisations that have been actively promoting diversity. In the U.K., some 700 companies have joined a "Business in the Community" campaign, committed to continually improving their positive impact on society. Many of these companies have also formed a network, "Race for Opportunity", to work on race and diversity as a business agenda and include large corporations such as Barclays Bank, BBC, British Telecom, HSBC, Goldman Sachs, Shell International Ltd., and Texaco, to name but a few.

A month ago, a distinguished visitor from the United Nations, Mr. John Ruggie, the Assistant Secretary General, came by for a talk. He told us that 400 companies, mainly from the Fortune 500 group have signed up to join the Global Compact. Two major Hong Kong companies, the Hongkong and Shanghai Banking Corporation and the Esquel Group, have also joined the lengthy list.

There is no doubt that the globalisation of markets is producing a degree of convergence in actual operations and governance practices. These global market pressures provide the impetus for investors to harmonize corporate governance to reduce investment risks; to hold down the cost of capital to corporations; and to be sensitive to the social development of each market to avoid rejection of its services and products.

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.

What impact does this have on the consumers? Social expectations of companies have changed dramatically in recent years. Trust in brand names can be destroyed overnight. Business now recognizes that increasingly consumers are demanding that the food they eat, the clothes they wear and the products they use daily are manufactured under ethical working conditions. These include fair employment opportunities for men and women, fair wages, a safe working place and a clean environment to name a few. Market share and brand name value depend on consumer acceptance of a company's employment policy, servicing standards and manufacturing conditions. Failures in these areas can sometimes lead to consumer boycotts.

Social accountability and marketability are becoming more and more entwined, and rights advocates recognise that industries and business create jobs and they must become a partner in the advancement and development of a community.

Business can bring in a large body of policies to benefit the local economy and upgrade local skills by providing on-the-job training and management skills. For example, training women on IT will benefit them as well as upgrading the skills in the region. Business can also act as an agent for change by requiring their contractors to adhere to diversity and equal opportunities principles. Clearly business can effect change using market driven tools.

Governments will have to take up their role to meet the challenge of globalisation and the demand for trade liberalisation. Enhancing the human capital and enabling the individuals in a community to compete effectively must be some of the primary tasks for a government. A diversity and equal opportunities policy provides the right kind of framework for the development of a community's human resources and thus help to sustain its long-term development. Government, as the biggest supplier and service provider, can also develop corporate governance initiatives.

Recently, the Hong Kong Government announced it was considering a new employment tendering system that would give 40% weight to working conditions and 60% to prices for all government contracts. We welcome this as a step in the right direction. We propose that Government provide incentives to tendering parties who can demonstrate adherence to equal opportunities principles.

THE BUSINESS SENSE

In the employment world, the concept of equal opportunities means matching the right person with the right job. We focus on people's abilities, not on their gender, marital status, or other irrelevant criteria. When the best person hired for a job happens to be a person with a disability, or a woman, he or she will also identify the market niche and bring in new business. Let me give you a glimpse of what may be possible:

A number of travel agencies in Japan are marketing barrier-free tours for the physically disabled. Theses packages are specially designed in areas such as transportation means, meals, choice of destination and even assistance in the immigration of guide dogs. Another 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 as well as a chance to watch a wheelchair-basketball practice. Another example is a travel plan for people with diabetes, which offers special menus and a nurse on duty throughout the whole trip. Meanwhile in Australia, for the first time in their lives, those who are totally `visually impaired will have their first secret ballot when a company introduces the option of voting online in coming September. It will be the first major election in Australia with an online component in addition to the traditional way of using a postal ballot paper.

An example of the benefits of workforce diversity can be demonstrated in the story of the rise in fortunes for a telecom company (CTI) in Hong Kong. About four years ago, this company saw an opportunity to expand its business in Canada because of the vast number of Hong Kong people who had emigrated to Canada. The company's marketing strategy included leaflets in Chinese and, for new customers, a promise to deliver moon cakes during the Mid-Autumn Festival to relatives back in Hong Kong. The strategy proved very successful and this Hong Kong-based company was able to secure a market share in a foreign country. In the wake of this success, a Canadian telecom company started recruiting Hong Kong staff to market their services but by then, they had already lost the competitive edge. The issue here is not simply about recruiting employees to mirror your customers. The crucial element is that these employees were able to understand the needs of the customers and weave these into the marketing plan.

In Hong Kong we are campaigning for "IT for all" on the basis of individual right and market share. IT must be accessible to the people who are visually impaired and people without the dexterity to control the keyboard because everyone has the right to information. Accessibility also means business, it means market share with a captive consumer base. People with disabilities will rely on IT not only to seek information but also to conduct electronic transactions daily. And it is IT that will bridge the gaps for them. Similarly, we are advocating barrier free access to shopping plazas because wheelchair users are loyal customers.

In early April this year, Telstra, Optus and Vodafone in Australia have each launched innovative new schemes to address problems faced by people who use hearing aids in accessing their mobile phone networks. Many hearing aid users cannot access GSM mobile phones because of electromagnetic interference between their hearing aid and mobile phone, and have experienced accessibility problems since the closure of the largely accessible analogue network. This new move will not only maximise the use of networks for customers with hearing aids, but the companies will have an edge over others in terms of opening a new market niche as well as improving their image and increasing brand loyalty.

Business is also looking more and more closely at women as a market as they are consumers and spenders for the household. More women are now buying insurance and financial products and business must cater for their needs to increase the market share.

You can see that equal opportunities means business, women and persons with a disability create market forces.

Many overseas companies have found that equal opportunities policies have positive impact on sales as well. For example, Pizza Hut in Australia recorded sales increases directly attributed to brand loyalty through the employment of people with a disability.

Apart from businesses developing in line with social aspirations, these measure have the potential of increasing market share and enhancing brand name value. Last year, a survey conducted by Edelman PR Worldwide found that non-governmental organizations (NGOs), such as Greenpeace and Amnesty International, have earned a greater level of trust than some of the most well-respected global multinational companies such as Ford and Microsoft. It is noteworthy that the respondents were well-educated, media attentive individuals between the age of 34 and 64 from five industrialised countries (U.S., U.K., France, Germany, and Australia). These are indications that consumers are becoming more sophisticated and are increasingly taking account of social accountability issues. Similarly, shareholders too, are likely to be interested in these same issues.

Equal opportunities means building a society based on ;meritocracy. Just like the Business Principles of the British Petroleum, which state, "We will treat people according to merit and contribution, refrain from coercion and never deliberately do harm to anyone". The key points here are merit and contribution.

According to a study by Covenant Investment Management in 1996 on Standard and Poor's 500, it found that the annualised return for the 100 companies which rated lowest in equal employment opportunities issues averaged 8%, compared to 18% for the 100 companies that rated highest in their equal employment opportunities. The figures are clear: diversity pays. Diversity brings in income and economic success. Today, 93% of Fortune 500 companies have instituted diversity programmes in their organisations.

One of the things to be aware of, of-course, is that diversity can work in reverse. The shortage of IT workers is a global problem and some countries have introduced attractive packages to draw in workers from around the world. For example, the U.S. has increased its quota of recruiting overseas IT professionals, known as H-1B professionals, under the American Competitiveness and Workforce Improvement Act. Many who took up these opportunities came from India. Recently, Germany issued a batch of visas to attract IT professionals in Indonesia to work in Germany. This trend is very much a sign of the times caused by the general shortage of skilled IT professionals. If your company is considering branching into Asia, investing in training your local staff is the most lasting value that you can impart.

As Hong Kong becomes increasingly globalised, the ethnic make-up of its community is likely to change accordingly. We have several kinds of Chinese alone: Hong Kong Chinese, Malaysian Chinese, Taipei Chinese, and not to mention the other overseas Chinese such as the ABC (American- or Australian-born Chinese) or the BBC (British-born Chinese). Hong Kong is also home to a very diverse range of communities from the Philippines, Indonesia, Thailand, Nepal, Pakistan, Britain, Japan, Europe, America, Canada, Australia, New Zealand, African, Korea, Bangladesh and Sri Lanka, not to mention Jewish and Indians from Shanghai! Many Indian and Jewish families came to Hong Kong as refugees from Shanghai and other major cities in China, the same way that many Chinese families did. The racial diversity provides a unique value. It is our link to our trading partners and strengthens Hong Kong as the global trader.

The EOC believes that race discrimination law is needed to protect the interests of ethnic minority communities in Hong Kong and to enhance Hong Kong's international image.

EQUAL OPPORTUNITIES COMMISSION

At this juncture, I would like to talk to you about the EOC, our values and our work, and how these relate to a diverse environment in which business operates.

Legislation against discrimination in Hong Kong has been in effect since 1996. The three anti-discrimination laws currently enforced in Hong Kong are the Sex Discrimination Ordinance (SDO), the Disability Discrimination Ordinance (DDO) and the Family Status Discrimination Ordinance (FSDO). Under these ordinances, discrimination on grounds of sex, pregnancy, marital status, disability and family status are unlawful in the fields of employment, education, provision of goods, services and facilities, clubs and activities of government.

Established in 1996, we are a statutory body to administer the three ordinances and to eliminate discrimination. Our work is based on a belief that everyone should have the right and fair chance to participate in the social, political and cultural life of Hong Kong. In real terms, everyone should have equal access to education, employment, services and facilities.

RESTORATIVE JUSTICE

The EOC has four main functions: investigation and conciliation; research and policy; education and promotion; and strategic litigation. Here, I would like to focus on the conciliation part of our work.

Conciliation, as an alternative to formal legal procedures, is not a novel invention. One of the most significant aspects of the work of the EOC is to resolve disputes between parties through conciliation. When a person lodges a complaint with the EOC, we are required by law to conduct an investigation into the complaint and endeavour to settle it by way of conciliation. If conciliation is not successful, the applicant may then apply to the EOC for legal assistance to file civil suit in the District Court. Our litigation is conducted on a strictly strategic basis and applicants for legal assistance need to satisfy a range of criteria.

In the year 2000, 61% of the cases which proceeded to conciliation were successfully conciliated. Depending on the circumstances of the dispute, the terms of settlement for our cases vary and some are heavily influenced by "Asian" values. Settlement terms have included reinstatement, change of policy, provision of training, donations to charity, improvement in physical accessibility to premises, favourable employment reference letter, oral or written apology. Settlement terms have also included payment of monetary compensation. However, Hong Kong is not open to the kind of damage claims like those in the U.S. We do not have open class actions nor treble damage suits.

Conciliation is based on the notion of "restorative justice". Dr. Dennis Wong of the City University of Hong Kong has been advocating the use of "restorative justice" as distinct from "retributive justice" in treating youth delinquency. He believes "restorative justice" is compatible with Chinese culture, which emphasises collective values and the restoration of harmony. "Restorative justice" can also be used in dealing with discrimination cases.

What is restorative justice? In situations where there is a victim-offender relationship, it means that the justice process works toward restoring victims, empowering them and responding to their needs, as well as supporting offenders and encouraging them to understand, accept and carry out their obligations.

Unlike the legal process, the emphasis of conciliation is not on who is right or wrong, or who wins and who loses, but rather on establishing a workable solution that meets the participants' unique needs. And because participants formulate their own agreement, they make an emotional investment in its success.

Sometimes, the process of conciliation requires creativity as well. I would like to share with you the "basket of fruit" story. The EOC was handling a complaint case where the employer and the employee came to a deadlock during the conciliation process. This took place close to the Mid-autumn Festival and our conciliator was inspired by this occasion. He suggested to the employer, "Why don't you send this employee of yours a fruit basket? It will show that you value his contribution to the company and you really want to mend the relationship." The employer agreed and a fruit basket was sent to the employee. The basket of fruit was perceived by the employee as a gesture of respect for him, a gift that employers usually reserve for valued customers. The employee was impressed and a deal was struck.

Sometimes we find "Asian" values influencing the outcome in a twisted way. Asian seniors do not like kowtowing to junior staff, and worse still to female junior staff. Some would rather pay than apologise.

On a separate note, the recent debate on whether America had actually "apologised" to China over the surveillance plane collision is worth a thought. The words "regret" and "apologise", "sorry" and "very sorry" were examined in detail to discern how Asians and Americans understood the usage of these words. From a dispute resolution perspective, it is certainly interesting to see how culture influences language interpretation and how that in turns affects the perception of reality for individual parties.

THE VALUES

Equal opportunities are about people. The EOC is therefore in the people's business. Our messages are:

For the individual
• Everyone has the right to development without which life and survival would be far less meaningful.

For the business sector
• Social accountability means marketability. Equal opportunities make good business sense.

For the community
• People are the valuable asset of Hong Kong. Equal opportunities are about the advancement of our human capital and are the only way we can sustain our development.

Empowerment of the individual leads to independent living and a reduced reliance of the public purse.

And on this point, I agree with the proposition of Professor Amartya Sen, the 1998 Nobel Laureate for Economics . He argues for concentrating on the equity and efficiency of social arrangements in promoting freedom to achieve objectives and capabilities of individuals. To borrow the words of Professor Sen:

"The rewards of human development go…well beyond the direct enhancement of quality of life, and include also its impact on people's direct productive abilities and thus on economic growth on a widely shared basis…."

Many leaders have come to realize that to survive and excel in the new millennium, a community has to focus on getting the best talents. And diversity means that people are different but they are equal.

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