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Political parties in a legal grey area

South China Morning Post – 26 Oct. 2011

Little is known about the way in which political parties are financed in Hong Kong. But some light has now been shed as a result of the leaking of documents said to detail donations made by media tycoon Jimmy Lai Chee-ying to the pro-democracy camp.

According to the documents, Lai gave more than HK$28 million in total to the Democratic Party and the Civic Party over the past few years, making him the single biggest donor to the democrats. He is entitled to make such donations and is one of many wealthy people in Hong Kong who provide funding for a variety of causes.But the revelation has reignited the debate about whether political parties should be more transparent and accountable. Hong Kong still lacks a law which would put political parties on a firmer footing. This would provide for better regulation and also help their development.

At present, political parties are registered as companies under the Companies Ordinance. The fact that there is no law governing the limits and disclosure of political donations outside of elections gives the parties maximum flexibility. This was, perhaps, helpful while Hong Kong was in the early stages of political party development, but the lack of regulation and transparency has given rise to worries that recipients, whichever camp they belong to, may be subject to manipulation.

Beijing’s hostility towards the pro-democracy camp may have made the rich and famous more wary about being seen to openly back the parties regarded as being in opposition. There are reasons to believe that donors may be scared away if they cannot remain anonymous. That Lai’s contribution accounted for the lion’s share of the two parties’ funding underlines the difficulties they have in reaching out to a broader spectrum of supporters. The leading pro-Beijing party, the DAB, however, does not seem to have encountered any difficulties in seeking donations. It received over HK$48 million in 2009-10. But it is equally reluctant to identify its donors.

The government rejected having a party law five years ago. One of the reasons given was that political parties are still in a relatively early stage of development. But the political landscape has since changed tremendously. For the first time, the implementation of universal suffrage for the chief executive and Legislative Council elections has been given a clear timetable. There are more ministers with a party background, while more parties have been formed in recent years. Political parties should be playing a more important role in governance as we move towards universal suffrage in 2017 and 2020. It is difficult to see how Hong Kong can carry on without a law to help parties better develop. The lack of legal recognition for parties means they are in a legal grey area. Legislation can provide the standing for parties to develop – and bring their finances out into the open.

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