Rule of law: Hong Kong’s new security law creates concern amid slip in business sentiment

Stephen Mulrenan, IBA Asia CorrespondentWednesday 8 May 2024

In March, Hong Kong’s new Safeguarding National Security Ordinance, also referred to as Article 23 (the ‘Ordinance’), was passed unanimously by the territory’s Legislative Council (‘LegCo’). As with the separate national security law passed in 2020 (the ‘2020 NSL’), the Ordinance has prompted human rights and rule of law concerns.

It covers five types of crimes: treason, insurrection and incitement to mutiny, theft of state secrets and espionage, sabotage and external interference. Penalties for some crimes have been increased, and there’s a greater emphasis on crimes by or involving foreign parties.

Hong Kong’s Basic Law, or constitution, obliged its government to enact domestic national security legislation. A previous attempt to pass such legislation, in 2003, failed after mass protests. This delay, combined with significant protests mostly associated with the territory’s pro-democracy movement, was cited by Beijing as justification for its imposition of the 2020 NSL.

One of the key concerns about the Ordinance is the haste with which it has been implemented. The government announced a four-week public consultation period for the bill, which was ‘wholly inadequate’, says a Hong Kong-based lawyer, who wished to remain anonymous. ‘Although the 2020 NSL was a surprise “gift” from the Mainland, and there was no expectation of consultation for constitutional reasons […] the public had a right to expect that it would be given several months to consider the measures being proposed, as happened in 2003.’

The vague definitions of the crimes in the new NSL allow opportunity for arbitrary and politically motivated prosecutions of any form of dissent

Anne Ramberg
Co-Chair, IBA Human Rights Institute Council

The Ordinance also passed through the LegCo less than two weeks after it was tabled. ‘Government pleas that urgency was required in case there were more disturbances ring hollow in light of the 2020 NSL effectively smothering street protests and orchestrated dissent’, says the Hong Kong-based lawyer.

Following a Group of 7 (G7) ministerial meeting in April, foreign ministers and the EU high representative issued a statement re-emphasising concerns about ‘the deterioration of pluralism and civil and political rights in Hong Kong’. Arguing that the new law will make it harder to work and do business in the city, while undermining Hongkongers’ ability to maintain free and open exchanges with the wider world, the G7-EU said it reiterated its ‘call on China to uphold its commitments under the Sino-British Joint Declaration and the Basic Law, which enshrine rights and freedoms and a high degree of autonomy for Hong Kong’.

The G7-EU statement was condemned as ‘unfounded and biased’ by the Hong Kong government and Beijing’s foreign ministry arm. They argue that the Ordinance clearly specifies that rights and freedoms guaranteed by the Basic Law are to be protected, and that it won’t affect normal business operations and the global exchanges of local institutions, organisations and individuals./p>

Following implementation of the 2020 NSL, Winnie Tam SC, Secretary of the IBA Asia Pacific Regional Forum and Chairman of Des Voeux Chambers in Hong Kong, said that Hongkongers would lose no liberties as a result of the NSL. ‘It is not the case that if you criticise China in the media you will fall foul of this new law’, she said. ‘I cannot think of a country without a similar national security law.’

An analogy has been drawn between the Ordinance and legislation in Singapore. However, the Hong Kong-based lawyer highlights that ‘Singapore is not a state signatory to the UN’s International Covenant on Civil and Political Rights [ICCPR], so there are no minimum standards […] to follow. I would be more concerned to discover that Hong Kong now has a set of laws that are “tougher” than comparable mature common law jurisdictions […] which subscribe to the same human rights instruments.’

For example, the offence of sedition has been abolished in many common law countries, and, where it exists, there’s a requirement to prove incitement to violence. That’s not the case with the sedition offence under the Ordinance.

The Hong Kong-based lawyer says the new legislation contravenes the Sino-British Joint Declaration to the extent that the latter contemplated adherence to basic human rights values incorporated in the ICCPR and the International Covenant on Economic, Social and Cultural Rights (ICESCR), among other frameworks.

China’s ‘basic policies’ regarding Hong Kong state that the provisions of the ICCPR and ICESCR as applied to the territory shall remain in force. These have been elaborated upon by Chapter III of the Basic Law. ‘Arguably, many of the provisions of the NSL and Article 23 package – such as hand-picked judges, denial of access to the lawyer of choice, warrantless searches, etc – fall short of the minimum standards required by Article 39 [of the Basic Law] and the other specific rights in Chapter III,’ says the Hong Kong-based lawyer. Further, the Ordinance’s Article 62 provides that the new legislation shall prevail where there’s inconsistency with local law, ruling out any challenges.

The Ordinance ‘violates the terms of the Declaration as it imposes itself into the legal system of Hong Kong and impacts the civil rights of its citizens’, says Anne Ramberg, Co-Chair of the IBA’s Human Rights Institute Council. ‘As well as [placing] pressure on the independence of the legal process and [having an] impact on fundamental human rights, the vague definitions of the crimes in the new NSL allow opportunity for arbitrary and politically motivated prosecutions of any form of dissent.’

Within the business community, the Ordinance itself may not be at the top of the agenda. Ben Cooper, Managing Partner of executive search company Ashford Benjamin, says ‘we have not heard [of] any issues from the latest update. Expats and locals have now stopped exiting Hong Kong because of the [2020 NSL], and our clients in banks and law firms don’t see it as a concern. The only issues I have come across are with non-governmental organisations that are losing US funding as the new amendment makes this more difficult.’

Hong Kong still has many advantages for business, boasting low tax rates and barriers of entry for example. However, a Bloomberg Intelligence report, published in February, concluded that Hong Kong had lost the race to become international business’ preferred choice for Asia headquarters, as more global companies – including General Motors and Google – and Chinese companies – such as Shein – choose Singapore because of its better relations with the West, broader talent pool, diversified economy and tax incentives. According to the report, Hong Kong’s economic prospects appear more cyclical and reliant on a slowing China.

‘The overall economy is going through a tough patch, with the [initial public offering] IPO market sluggish, and law firms keeping a close eye on China and (for some) focusing on Southeast Asia for growth, or the recent investments into Saudi’, says Andrew McGrath, Director of Green Light Consulting. ‘To me, this is part of the business cycle.’

Image credit: Well-equipped Police patrolling in Hong Kong, James Jiao/AdobeStock.com