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International Construction Law Review

THE TANG REPORT: CATALYST FOR CHANGE IN THE HONG KONG CONSTRUCTION INDUSTRY

PHILIP NUNN AND IAN COCKING

Simmons & Simmons, Hong Kong

The Need for a “Cultural Revolution”

In his letter to the Chief Executive of the Hong Kong Special Administrative Region dated 18 January 2001, the Honourable Henry Tang, the Chairman of the Construction Industry Review Committee, said that the report produced by the Committee represented the initial steps of a major reform process for the construction industry. The report (which can be found at www.wbgov.hk/report.htm) calls for radical improvements in the way construction projects are delivered, the way risks are shared, the way industry participants interact with one another and the ethical standards within the industry. This was described as a “cultural revolution”. The claim was nevertheless met with scepticism from the press, who wasted little time in dubbing the report a “toothless tiger”. Reform has been forced upon the construction industry through a series of massive and embarrassing failures. The question is whether the Tang Report will convince the construction community that the industry must improve and regulate itself, or whether it is really time for stronger measures, such as legislation.
The report covers a broad range of topics which will be of interest to readers outside Hong Kong, especially in Australia, Singapore and the UK, which the Committee visited during their study. Its recommendations will attract international interest in several areas in particular—unforeseen ground conditions, interference by utilities, security of payment, adjudication and the eradication of Hong Kong’s notorious system of multi-layered subcontracting.

Establishment of the Construction Industry Review Committee

In April 2000, the Chief Executive of the HKSAR appointed the Construction Industry Review Committee (“the Committee”) to carry out a comprehensive review of the current state of the construction industry and to recommend improvement measures to uplift its quality and performance. The Committee was requested to complete its work within nine months.
In view of the broad scope of the review, the Committee set up three Sub-committees, namely the Construction Quality and Safety Sub-committee, the Manpower and Modernisation Sub-committee and the Construction Cost and Environment Sub-committee. Both the Committee
[2001
The International Construction Law Review

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