Advisory Council on the Environment | Environmental Protection Department

Proposed Amendments to the Noise Control Ordinance, Cap 400.

(ACE Paper 45/99)
for advice

Purpose

This paper seeks Members' advice on the proposed amendments to the Noise Control Ordinance to specify explicitly the liability of the management of a body corporate for the offence committed by the body corporate.

Background

2.Under the existing provisions of the Noise Control Ordinance (NCO), the Environmental Protection Department may initiate proceedings against any person who commits an offence. The NCO was amended in 1994 to double the maximum fine to increase the deterrent effect. The maximum fine under the NCO is $100,000 for the first conviction, and $200,000 for the second or subsequent conviction. Over the years, the Environmental Protection Department has attempted to promote good practices among the trades and to conduct seminars and briefings with a view to preventing the violation of the NCO. However, there are still many instances of noise complaints and offences under the NCO.

3.Noise complaints have become very serious over the past few years. The number of noise complaints lodged by the public and other members of the community including members of Provisional District Boards and Legislative Council amounted to more than 40% of the total number pollution complaints. In 1996, 1997 and 1998, there were about 2,000, 1,900 and 2,200 complaints respectively against noise from construction activities, and 2,100, 2,400 and 2,400 respectively against noise from commercial/industrial activities. Over the same period, the number of convictions on construction noise offences were 117, 364 and 299 respectively while the number of convictions on other noise offences were 135, 81 and 111 respectively.

4.Violation of the NCO by body corporate are particularly serious. Among the 410 conviction cases in 1998, close to 80% (323) of the conviction cases were by body corporate. In the past three years, forty-four companies were convicted five times or more. Twelve of these companies had more than ten convictions, including two construction companies being convicted thirty-three times and twenty-four times respectively for construction noise offences. The situation is highly unsatisfactory and there appears to be a need to strengthen existing provisions of NCO to prevent noise offences in particular by body corporate.

Effects of Noise Offences on the community

5.A breakdown of the conviction records is given in Annex A to show the nature of the offence and the impact to the neighbourhood in 1998. Most of the construction noise convictions involve the use of powered mechanical equipment such as cranes, excavation machine, concreting machine, etc. in building development sites. The typical noise level of these activities may reach 80dB(A) at nearby residential blocks, thus seriously depriving many residents of a period of rest after 7 p.m. or before 7 a.m. of weekdays or on public holidays.

6.For industrial noise, most convictions involve the operation of ventilation systems, water pumps or workshops. The typical noise levels at nearby residential flats were in the range of 60-75dB(A), affecting people's daily activities at home.

Proposed Amendments

7.To deter noise offences particularly by body corporate, it is proposed that the NCO be amended to specify explicitly the responsibility of the management of a body corporate to prevent the violation of the NCO. The proposed amendments state explicitly that when the offender is a body corporate, the management of that body corporate commits a like offence. The person to be held responsible will be stipulated clearly in the proposed amendments. It is proposed that any person who at the time of the offence was a director in the management of the body corporate, a director who has delegated his authority for the management of the body corporate, or an officer in the management of the body corporate and acting under the immediate authority of a director of the body corporate shall be guilty of an offence which has been committed by a body corporate. This definition is drawn up after thoroughly considering the views gathered during the consultation and having regard to similar definitions in other legislation in Hong Kong. Annex B gives a list of Ordinances in Hong Kong with provisions for directors' liability. Under the proposed amendments to the NCO, directors concerned in the management of a body corporate are explicitly held responsible for offences committed by the body corporate. In cases where the directors are holding honorary or non-executive posts (i.e. not involved in the daily management of the body corporate), they will not be held responsible.

8.For offences under the NCO (except that related to failure to obtain a construction noise permit), a statutory due diligence defense is proposed to be made available under the proposed legislative amendments. In line with international practices, it would be a due diligence defense if the management can show that a proper system has been established and in effective operation to prevent the offence. For an offence relating to the carrying out of construction work without a construction noise permit, there would be no explicit statutory defence provision for the management. This is because the permit system for carrying out construction works during restricted hours has been in operation for nearly 10 years, and there should not be any excuse for the management of a body corporate to ignore this basic requirement.

9.The Noise Control Authority will issue Codes of Practice to provide practical guidance on good management practices to prevent a violation of the NCO. A draft Code of Practice is in Annex C. The draft Code of Practice is in line with guidelines and practices adopted in other developed countries. The Code of Practice will help the management to prevent, in a proactive manner, the violation of the NCO if it is conscientiously applied by the management of a body corporate. Compliance with the Code of Practice can constitute a valid ground for due diligence.

Expected Benefits of the Proposal

10.Under the NCO, it is our existing practice to prosecute individual proprietors or owners of non-corporate companies and the corporate company if they commit such offences. A breakdown of the conviction records is given in Annex D to show the categories of person being convicted in the past three years. Individual owners or business proprietors were involved in some 35, 48 and 40 percent of the first convictions in 1996, 1997 and 1998 respectively, but in less than 10 percent in 1996 and less than 3 percent in 1997 and 1998 of the second or subsequent convictions. One possible explanation for this trend is that individual owners or business proprietors are less likely to repeat an offence, as they are being held personally responsible for an offence. We therefore fully expect that the current proposal would encourage the management of body corporate to take necessary preventive steps to ensure compliance with the NCO, so that recurrence of noise offences could be reduced.

11.The proposed amendments will help to promote changes in the corporate philosophy with regard to environmental compliance. This will help to deter a body corporate from repeated offences, make the management more environmentally accountable and minimize the noise nuisances to the community. It may help to level the environmental playing field. Other environmental legislation has already contained similar provision to increase the deterrent effect.

Public Consultation

12.As the proposed amendment will reduce repeated violations under the NCO leading to a quieter environment, it is anticipated that the general public will welcome the amendment. It is however expected that some contractors would object to the amendments, while others may see this as a step to level the environmental playing field. The Administration has consulted and considered the views from various stakeholders including Provisional District Boards, labour unions, related trades, associations and companies on the proposal.

13.The Hong Kong Construction Association (HKCA) objected to the proposed amendments. They indicated that unlike an individual/proprietor who might have much simpler work on hand, construction companies were frequently engaged in a much larger number of construction contracts involving a large number of sub-contractors and workers. It was therefore natural that these companies had more chances to violate the NCO than individuals and proprietors. They considered that the claim of repeated violation of the NCO by body corporate was due to a lack of personal liability on the part of the top management was not justifiable. They also held the position that the nature and operation of the NCO were quite different from those of the other environmental protection legislation. They therefore believed that it was not a good argument to justify the proposed amendments to impose personal liability on the management of a body corporate by citing similar provisions in other similar legislation. They considered that holding the management personally liable would not be effective as the subcontractors or individual workers committing the offences would not be held liable. As an alternative, the HKCA suggested that the Administration should adopt a non-punitive approach and look into ways to assist the construction industry to raise awareness, education and training among those who are engaged in the industry.

14.We note the views of the HKCA and welcomed their suggestion to look into ways to assist the construction industry to raise awareness of stringent noise control at construction sites. We will work in partnership with the HKCA and others in the construction industry to continue our efforts in promoting awareness and good practice. But given the serious noise disburbance to the community caused by the NCO violations, we believe that a multi-pronged approach would need to be adopted. In view of the large number of construction sites under the control of construction companies and their higher instances of repeated violations, these companies which maintain an overall responsibility over the conduct of their subcontractors or workers at construction sites must take steps to ensure compliance with the provisions of the NCO. Our proposed amendment is to ensure that the company management will take all reasonable preventive steps to prevent violation of the NCO. Under the existing NCO, subcontractors and workers found to have violated the provisions of the NCO can already be held liable for such offences. To address the question of fairness, it is proposed to provide a due diligence defense for management of body corporate as set out in paragraph 8 above. To facilitate the company management to discharge their management responsibilities and to ensure fairness, we intend to issue a Code of Practice under the proposed legislation to guide the industry in this regard and compliance with the Code can be regarded as a ground for due diligence.

Legislative Timetable and Commencement

15.Subject to Members' views, we will further consult the Legislative Council Panel on Environmental Affairs in early December 1999. Thereafter, our intention is to seek Executive Council's approval of the proposed legislative amendments for introduction to the Legislative Council early next year. The amended provisions are proposed to come into operation on a day to be appointed by the Secretary for Planning, Environment and Lands by notice in the Gazette. The draft Code of Practice would be subject to further consultation after the enactment of the amendments and before it is issued under the NCO.

Advise Sought

16.Members are requested to provide their advice on the above proposed amendments.

Planning, Environment and Lands Bureau
November 1999

Annex A

Breakdown of the Conviction Records in 1998 showing nature of the
major noise offences and the impact to neighbourhood

(A) Construction Noise

Major types of noisy equipment used or activities carried out in the offences	No. of conviction cases*	Typical noise level at nearby domestic building #	Estimated number of households affected in each case
Crane for handling steel bars/ dropping of steel bars	130	70~75 dB(A)	100
Concrete lorry mixer and poker vibrator for concreting	34	75~80 dB(A)	200
Bulldozers for excavation	38	70~75 dB(A)	100
Circular saw to cut steel and wood	15	70~75 dB(A)	100
Others (e.g. bar bender, drill, generator, etc.)	70	65~80 dB(A)	100
Manual work not involving equipment (e.g. hammering and formwork)	12 (4%)	65~80 dB(A)	100

Notes:	*	Out of the total 299 convictions on construction noise offences
Notes:	#	Typical separation between construction sites being complaint about and the nearby domestic buildings is 20 metres

(B) Commercial/Industrial Noise

Major noise sources found in the offences	No. of conviction cases*	Typical noise level at nearby domestic flats #	Estimated number of households affected in each case
Ventilation systems	38	60~75 dB(A)	20
Pump, motor & lift machines	17	60~75 dB(A)	10
Others (e.g. workshop, factories, karaoke, etc.)	26	60~75 dB(A)	50

Notes:	*	Out of the total 81 convictions on commercial/industrial noise offences
Notes:	#	Normally noise from places such as pump rooms, lift machine rooms affect residences in the same building whereas noise from ventilation and air-conditioning systems also affect nearby domestic buildings typically at 20 metres away.

Annex B

List of legislation with explicit provisions for holding the management liable

(A) Legislation with Strict Liability Provisions
Chapter 60	IMPORT AND EXPORT ORDINANCE
Section 36A	Offences by directors, etc. of corporations
Chapter 137	ANTIBIOTICS ORDINANCE
Section 10	Offences and penalties
Chapter 173	CIVIL AVIATION (BIRTHS, DEATHS AND MISSING PERSONS)
Section 2(2)	Power for the Chief Executive to make regulations for recording and registration of births and deaths, etc
Chapter 211	AERIAL ROPEWAYS (SAFETY) ORDINANCE
Section 27B	Liability for offences by body corporate
Chapter 262	CHIT-FUND BUSINESSES (PROHIBITION) ORDINANCE
Section 9	Liability of directors, managers, etc., under sections 3 and 4
Chapter 295	DANGEROUS GOODS ORDINANCE
Section 16	Liability of directors, etc. where offence committed by company
Chapter 303	RADIATION ORDINANCE
Section 23	Liability of directors, etc., where offence committed by company
Chapter 327	LIFTS AND ESCALATORS (SAFETY) ORDINANCE
Section 31	Liability of directors, etc. where company convicted of offence
Chapter 355	PYRAMID SELLING PROHIBITION ORDINANCE
Section 4	Liability of directors, partners etc.
Chapter 384	DANGEROUS GOODS (CONSIGNMENT BY AIR) (SAFETY) ORDINANCE
Section 5	Liability of directors, etc. where offence committed by company
Chapter 449	AMUSEMENT RIDES (SAFETY) ORDINANCE
Section 36	Liability for offences by body corporate
(B) Legislation with Non Strict Liability Provisions
Chapter 24	SECURITIES AND FUTURES COMMISSION ORDINANCE
Section 57	Liability of directors, etc.
Chapter 32	COMPANIES ORDINANCE
Section 109(4)	General provisions as to annual returns
Chapter 32	COMPANIES ORDINANCE
Section 168N	Offences by body corporate
Chapter 57	EMPLOYMENT ORDINANCE
Section 64B	Liability of directors, partners, etc.
Chapter 59	FACTORIES AND INDUSTRIAL UNDERTAKINGS ORDINANCE
Section 14	Liability of directors, partners, etc.
Chapter 106	TELECOMMUNICATION ORDINANCE
Section 32	Liability of directors, etc., where offence committed by corporation
Chapter 155	BANKING ORDINANCE
Section 123	Offences by directors, managers, trustees, employees and agents
Chapter 221	CRIMINAL PROCEDURE ORDINANCE
Section 101E	Liability of directors, etc.
Chapter 311	AIR POLLUTION CONTROL ORDINANCE
Section 47A	Directors of body corporate liable in certain circumstances
Chapter 333	SECURITIES ORDINANCE
Section 147	Liability of directors, etc.
Chapter 335	PROTECTION OF INVESTORS ORDINANCE
Section 7	Liability of directors, etc.
Chapter 354	WASTE DISPOSAL ORDINANCE
Section 39	Liability of directors, etc.
Chapter 358	WATER POLLUTION CONTROL ORDINANCE
Section 10A	Liability of directors, etc.
Chapter 426	OCCUPATIONAL RETIREMENT SCHEMES ORDINANCE
Section 82	Liability of directors, etc.
Chapter 485	MANDATORY PROVIDNET FUND SCHEMES ORDINANCE
Section 44	Liability of officers, managers and partners
Chapter 493	NON-LOCAL HIGHER AND PROFESSIONAL EDUCATION (REGULATION) ORD.
Section 39	Liability of directors, etc.
Chapter 494	AVIATION SECURITY ORDINANCE
Section 62	Liability of directors, etc.
Chapter 499	ENVIRONMENTAL IMPACT ASSESSMENT ORDINANCE
Section 29	Directors of body corporate liable in certain circumstances
Chapter 509	OCCUPATIONAL SAFETY AND HEALTH ORDINANCE
Section 33	Liability of directors, partners, etc.
Chapter 511	ESTATE AGENTS ORDINANCE
Section 42	Liability of directors, etc

Annex C

DRAFT

Code of Practice
on
Good Management Practice
to
Prevent Violation
of the
Noise Control Ordinance
(Chapter 400)

4 November 1999

PREFACE

[Section 28A] of the Noise Control Ordinance, Chapter 400 specifies explicitly the liability of certain persons in a body corporate for an offence committed by the body corporate. A statutory defence is available to such persons who have established a proper system to prevent violations of the ordinance.

This Code of Practice is prepared to provide practical guidance on good management practices to ensure operations and activities of a body corporate comply with provisions of the Noise Control Ordinance. It is issued by the Noise Control Authority under [section 28B(1)] of the Noise Control Ordinance.

1. Introduction

1.1This Code of Practice (COP) provides guidance on good management practices to prevent infringement of the Noise Control Ordinance, Chapter 400 (NCO). It lists out key principles that the management of companies should consider and adopt to ensure the integrity and proper operation of their management systems. It also gives examples of proper measures and practices that industries can apply under their management systems.

2. Background

2.1[Section 28A(1)] of the NCO provides for the liability of certain persons in a body corporate. It stipulates that:

[Details of the proposed legislative amendments to be enacted by the Legislative Council]

2.2Notwithstanding differences in nature and the size of various companies and the differences in the environmental management systems adopted, the following are the key principles of good practice to ensure compliance with the NCO.

3. Key Principles of Good Management

Persons described in [Section 28A(1)] of the NCO (collectively called the management) should apply the following key principles in managing the operation or activity of the body corporate:

3.1	Understand and discharge their responsibilities to ensure full compliance with the relevant provisions of the NCO.
3.2	Understand how and to what extent the operation or activity of the body corporate may directly or indirectly emit noise to the surrounding areas.
3.3	Understand the legal requirements and noise limits described in the NCO and any relevant technical memorandum issued under the NCO.
3.4	Establish an environmental management system and ensure its effective operation to prevent any infringement of the NCO, with effective action plans to prevent or promptly rectify any incident of non-compliance.
3.5	Define and assign clearly the responsibilities, duties and authorities of the line management and individuals concerned such that effective and prompt actions can be taken under the environmental management system to achieve the required environmental performance and ensure regulatory compliance.
3.6	Ensure that the line management and individuals concerned are fully aware of their responsibilities, duties and authorities and establish effective means of communication on environmental issues and information such that any environmental problem can be promptly addressed and resolved.
3.7	Require effective and prompt actions to be taken to avoid the commitment of any offence under the NCO or to rectify any non-compliance immediately.
3.8	Require prompt reporting, to the management of any incident of non-compliance with the NCO, any sign of potential non-compliance, any preventive measures to avoid any offence under the NCO, any corrective measures taken to rectify the non-compliance.
3.9	Intervene immediately to correct any non-compliance if the non-compliance is not forthwith satisfactorily rectified or effectively prevented from recurrence.
3.10	Review the effectiveness of the environmental management system regularly and correct any deficiencies identified to ensure its effective operation.
4.	Compliance-based Management Practice
4.1	Defining an Environmental Noise Policy for the company The Environmental Noise Policy should include, among others, a firm commitment to comply with the NCO and its subsidiary regulations, and to monitor the noise situations and prevent any contravention of NCO. Such a policy should be documented, maintained and publicized within the company so that every staff shall be aware of and are instructed to follow. [Example A construction firm shall commit not to violate legislative restrictions on the time period for conducting construction activities and a food catering company shall commit not to exceed statutory noise limits from their operations. Properly documented resolutions at directors' meeting are considered appropriate commitment at the management level while circulars being re-circulated periodically to all staff including those at the constriction sites are considered suitable means to disseminate the environmental noise policy. Such policy should be posted at all site offices and at places noticeable to all site staff.]
4.2.	Knowing how and to what extent the operation of the company may emit noise to the surrounding The management should arrange audits to be carried out at least once every 6 months to identify any noisy equipment or any noisy operation of the company. [Example A branch manager of a food catering chain store should be directed to make a thorough examination of his store to identify the equipment or specific activity which emits noise. A manager of a construction site should be directed to identify the equipment or activities which are restricted or prohibited for use under the NCO and its subsidiary regulations.]
4.3	Knowing the statutory requirements and noise limits The management should ensure that the line management and individuals involved in the environmental management system are fully aware of the current statutory restrictions and requirements on noise. [Example The site agent of a construction site would need to know the legislative restrictions and requirements regarding activities at a construction site for him to determine what and when construction activities would require a valid Construction Noise Permit. The manager of a food catering store would need to know the statutory limits on noise from their building services equipment for him to plan and arrange maintenance and noise abatement of the equipment as appropriate. ]
4.4	Establishing pollution prevention system specific to his company's operation The management should establish pollution prevention systems to avoid any violation of the NCO. The system should be specific to the company's operation. All relevant staff should be instructed that a pollution prevention system is required to ensure compliance with the NCO.
4.5	Identifying possible infringement of the statutory requirements The management should identify areas in the company's operations or activities that may or are likely to violate the statutory requirements or noise limits. This may be done through collating inputs from staff members and the management should personally check the result of audits carried out by the line management. [Example Every construction site staff should be made aware that any construction work carried out during the restricted hours without a valid Construction Noise Permit or failure to comply with the permit conditions will constitute an offence. For a food catering company, the manager should be made aware that non-compliance of any Noise Abatement Notice issued by the Noise Control Authority (i.e. failure to rectify the noise exceedence within a specified time period) will constitute an offence. ]
4.6	Preventing possible infringement of the statutory requirements The management should ensure that action plans are put into place to prevent any possible infringement of the statutory requirements, to trigger immediate remedial actions on any incident of non-compliance, and to forbid recurrence of similar incident. The action plans should include pro-active preventive measures to be observed by all levels of staff. The action plans should also include monitoring and auditing by different levels of staff to ensure full regulatory compliance. The management should also take effective steps to check. [Example The management of a construction site company should formulate and implement an effective action plan to ensure adequate supervision so that only construction equipment or activities specifically listed in a valid Construction Noise Permit for the site could be carried out during the restricted hours and the permit conditions are strictly adhered to. The management must ensure that the line management, such as managers, engineers and foremen, have properly implemented the action plan. The management of a food catering company should ensure that the line management, such as manager and the operators have put all machines under regular inspection and maintenance and carried out repair works for any abnormal performance of the machines without delay. ]
4.7	Identifying and defining the environmental responsibilities The management should describe, how the environmental management system is implemented and maintained within the overall organisation. The responsibilities, duties and authorities of the specific office holders or individuals concerned in environmental management should be clearly defined and made known to all relevant staff directly, or indirectly involved in managing the potentially noisy operations and activities. This could include, among others, the environmental performance expected of the relevant staff concerned in managing specific operations or those staff with responsibilities for certain environmental programs and regulatory compliance. The management should set up channels of communication both horizontally and vertically and means of receiving report on environmental issues and environmental actions to allow effective prevention or rectification of any noise problem identified. The communication channels should be effective and tailored to the needs of individual circumstances. [Example The management of a construction company should identify site staff to take overall responsibilities to ensure there is a valid Construction Noise Permit prior to giving approval of works (including works sub-letted) during the restricted hours. The staff member concerned should be assigned the duties and authorities to stop works which are not in accordance with permit conditions. He should be given the authority to refuse access to the site, step up surveillance and temporary suspension of power (other than for general lighting) during restricted hours to prevent violations. The management of a food catering company should appoint suitable staff to monitor the noise performance of equipment, especially outdoor equipment and arrange prompt maintenance should any abnormal or excessive noise be detected. ]
4.8	Demanding prompt reports on non-compliance or on any sign of non-compliance The management must instruct staff at every level to promptly report any non-compliance or any sign of possible non-compliance. Regular reports should also be provided on compliance with the environmental management system. The reporting must finally reach the management for their personal attention. The management must ensure corrective measures are taken to rectify the problem without delay. Preventive measures should also be devised and implemented to avoid recurrence of non-compliance. The management should ensure that reports are reviewed for accuracy and reliability. [Example This can be done by means of a hotline with recording function or hot-fax directly linked to the management personnel, in addition to conventional or normal reporting via the line management or internal memos. ]
4.9	Reviewing the performance of the environmental management system The management must ensure that there are staff at different levels, responsible for auditing, and that the operation of the environmental management system is effective with regard to the NCO compliance. The management should review the audit reports and ensure that the environmental management system is carefully monitored and reviewed regularly (at least once every 6 months). When the system fails, the management must immediately and personally react to the problem with the system. [Example The management should either by themselves or by appointing staff to audit and conduct surprise checks to ensure proper operation of the environmental management system. Any non-compliance should be rectified in accordance with the action plans formulated and prevented from recurring. ]

Note : The examples in brackets are for reference only and do not form part of this Code of Practice.

*******

Annex D

Breakdown of conviction records showing categories of "person" being convicted in 1996-1998

No. of Convictions

Year		Corporation	Sole Proprietor (person/owner)	Individual	Total
1998
	1st conviction	118 (60%)	24	57	199
	Subsequent conviction	205 (97%)	6	0	211
	Total	323	30	57	410
	1997
1st conviction		108 (52%)	15	83	206
Subsequent conviction		231 (97%)	3	5	239
Total		339	18	88	445
1996
	1st conviction	88 (65%)	13	35	136
	Subsequent conviction	105 (91%)	5	6	116
	Total	193	18	41	252