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Conflict-of-interest row rocks Hong Kong building assessment body

BEAM Society (BSL), which runs the BEAM Plus assessment scheme, has monopoly to carry out assessments that are required to obtain lucrative concessions Leaked documents have revealed conflict-of-interest allegations involving directors of a not-for-profit organisation with a monopoly on green building assessments that allow developers to claim government incentives worth billions of dollars.

The allegations centre on the BEAM Society (BSL), which runs the BEAM Plus assessment scheme. Since 2011, registering for the BEAM Plus scheme has been a prerequisite for developers wishing to increase the gross floor area of projects by 10 per cent without paying the government any extra premium under a Buildings Department plan to encourage green development.

But many of BSL’s 25 directors are drawn from companies in the construction and property sector, and BSL staff members have alleged that directors approved plans or project submissions in which they had a vested interest.

The case sparked alarm given the public interest involved. One lawmaker was “aghast” that a private organisation with no government oversight was handed such a monopoly.

In a letter dated May 16, 2013, a copy of which was seen by the South China Morning Post, BSL’s secretariat complains of a lack of fairness, transparency and accountability in the operation of the BEAM Plus assessment scheme, and says some directors abused their power.

“Their roles have allowed them to gain enormous power with BSL, ie, sometimes they report to themselves for actions they take and could approve the plans that they themselves propose,” reads the letter to BSL’s board. It is signed by the secretariat’s administrative team, marketing and training team, and technical team.

A source familiar with the situation told the Post some directors were indeed “more equal” than others.

BSL chairman Professor John Ng Cheuk-yee said the board had investigated the complaint but “due to confidentiality of the board’s decision and the involvement of some persons, it would not be appropriate to divulge further information”.

But he confirmed that not all of the follow-up actions recommended by the investigation team, which completed its work in October 2013, had been implemented. Three of the complainants no longer worked for BSL, he added.

Founded in 1996 by construction and real estate professionals, BSL was set up to create the BEAM – Building Environmental Assessment Method – tool.

The organisation underwent a restructure in 2009 when it joined three other professional organisations to set up the Green Building Council. The council is now responsible for certifying that developments are registered and have undergone BEAM assessment by BSL, and sets fees for registration and assessment.

Ng said BSL began the process last year of converting itself into a public body under the Prevention of Bribery Ordinance. It had been advised to do so by the Independent Commission Against Corruption in September 2012. Doing so would require a government bill to pass through the Legislative Council.

But critics say the government should have ensured it had oversight of BSL or the council before the Buildings Department gave the organisations a monopoly on assessments.

“I am totally aghast at the lack of government regulations to oversee both BSL and the council when they have been given this special privilege to manage a scheme that involves exceedingly vast public interest,” Democratic Party lawmaker Wu Chi-wai said. “This is a blatant case of government-business collusion and will undermine public trust in the government’s drive for green buildings.”

The Buildings Department took a month to respond to requests for comment, then said only that it was not “involved in the management and operation of the [Green Buildings Council], BSL or the BEAM Plus assessment that they administer”.

The BEAM Plus tests assess a project in several areas including energy use, site ventilation, indoor air quality, water consumption and waste management. Projects are given a grade on a five-point scale, but even those given the lowest grade, unclassified, are eligible for the gross floor area incentives – developers need only publish the results of the assessment in their brochures.

Ng insisted some of the allegations were unfounded, including claims of inconsistency in assessments and of undue influence by some directors on the secretariat staff.

The green requirement was introduced as part of a drive to halt widespread misuse of a scheme that allowed developers to increase gross floor area by adding extra amenities to their developments. Previously, the amount of extra gross floor area developers could claim for amenities and green features had not been capped.

From April 2011 to December 31 last year, a total of 260 new projects had been granted gross floor area concessions, Buildings Department figures show.

The Green Building Council has also been accused of pushing up the price of BEAM Plus certification – which critics again said reflected lax oversight.

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