HIT Director, Yim = Liar?

By Kwok Yin Yin Ivy

Background

Hundreds of dock workers have been on strike outside the Kwai Chung Container Terminal for over two weeks over a pay dispute against their employers. However, Hong Kong International Terminals (HIT) has refused to get directly involved in the dispute as they claimed they are not the one who hired them.

The conflict deepened. Workers criticized HIT for the contracting issue after the Managing Director of HIT, Gerry Yim Lui-fai, was discovered to be a director of Sakoma – a subsidiary of HPH Trust (Shareholder of HIT) and the name written in the contractor field of some staff cards.

HIT 1HIT 2

Analysis

(a)    HIT and Yim’s arguments:

Neither HIT nor its subsidiaries were the “external contractors” at the port. Sakoma was only a “contracting unit” set up to sign service contracts with these “external contractors”. Yet, it had been handed over to Hutchison Logistics to sign external contractors. Staff cards with Sakoma’s name were just an “administrative error” that had not been corrected for years. A statement has been issued denying Yim as a contractor board member.

(b)   Strikers’ arguments:

According to the Companies Registry, Sakoma’s major shareholder is Asia Port Services, an HPH Trust member which Yim is one of the directors. Also, it is unjustifiable for such a multinational company to make mistakes on the work permit. HIT should show the proof that Sakoma is not the contractor. They questioned if HIT had a conflict of interest in outsourcing work via subsidiary Sakoma.

(c)    Blogger’s view:

I would like to put my focus on Yim’s responsibility. An immediate proof of whether Sakoma is the contractor is needed. If Sakoma is the contractor, it is of the director’s responsibility definitely. According to Hong Kong Companies Ordinance (Cap 32 s 162), “Any director of a company who is in any way, directly or indirectly, interested in a contract or proposed contract with the company shall, if his interest in such contract or proposed contract is material, declare the nature of his interest at the earliest meeting of the directors.”

 HIT 3

 

 

Conclusion

Disclosure of director’s interest is predominantly fundamental. Being a director of HIT and Sakoma, Yim should declare interest. Clauses regarding on the disclosure of director’s interest should be clearly stated in the company memorandum, and improvement of administrative work is needed to avoid any administrative error. It is a good conduct to protect stakeholders and to avoid director’s conflict of interest.

 

Reference

 

Companies Registry

http://www.cr.gov.hk/en/home/index.htm

 

HIT denies links with contractors

http://www.thestandard.com.hk/breaking_news_detail.asp?id=34287&icid=3&d_str=

 

HIT boss denies links to contractors involved in dock strike

http://www.scmp.com/news/hong-kong/article/1206283/hit-boss-denies-links-contractors-involved-dock-strike

 

Port dispute with striking dockers deepens

http://www.scmp.com/news/hong-kong/article/1206587/port-dispute-striking-dockers-deepens

 

HK Companies Ordinance – CAP 32 COMPANIES ORDINANCE

http://www.hklii.hk/eng/hk/legis/ord/32/

 

TVB news – HIT issues

http://youtu.be/TPSAjXzA9UE

About these ads

5 Responses to HIT Director, Yim = Liar?

  1. Huang Ho Ching, Nora (UID: 2010566818) says:

    Thank Ivy for bringing up the discussion on the Kwai Chung Container Terminal strike and sharing her insightful arguments on this hot topic.

    It has been weeks for the strike and the operations at Kwai Chung Container Terminal were seriously affected. With more and more dockers joining the strike and fighting for better working condition and salary, the relationship between the employer HIT and the dockers has been even worse. The situation remained uncontrollable as the Managing Director of HIT Yim Lui-fai refused to bear the responsibility to negotiate with the dockers and he claimed HIT is not the employer of the dockers. As mentioned by Ivy, Yim is obviously the director of the employer company and should definitely disclose his interest in contracts according to Companies Ordinance. Therefore, I agree with Ivy that Yim should take the initiative to talk with the dockers.

    A busy seasonal trading period will come soon and a lot of ships have turned way to Shenzhen and Guangzhou. If the situation continues, there will be serious adverse effects on the logistic business of Hong Kong. The largely reduced workforce will increase freight costs and result in consumers paying higher prices for good. The effects are huge and Yim should take the responsibility.

    References:
    Dockers urged to end port strike (2013). Retrieved April 12, 2013 from http://www.thestandard.com.hk/breaking_news_detail.asp?id=34273&icid=3&d_str=20130403

    HIT strike set to worsen (2013). Retrieved April 12, 2013 from http://sinoshipnews.com/news_content.php?fid=3w3c1188

  2. TSOI Man Lok (2010561765) says:

    Thank you Ivy for bringing up such heat topic for discussion. On one hand, it is understandable that HIT tired to clarified her responsibilities to avoid potential financial lost. However, in today’s day and age with corporate social responsibilities are on the top agenda, HIT is obviously ruining their reputation as a responsible corporation.

    It is not uncommon that companies outsource some of their non-core business procedures to external contractors to reduce cost and achieve better efficiency. However, the drawbacks of out-sourcing is that the one with the lowest cost always win the tender, thus the contractors who compete the tender would always reduce the bid price by exploiting the cost of labour – especially those low-skilled workers.

    No matter how the strike will go, the reputation of HIT has been ruined in Hong Kong society with negative label of exploitation of workers.

    References:

    Dockers strike at Kwai Chung Container Terminal

    http://www.scmp.com/news/hong-kong/article/1201735/dockers-strike-kwai-chung-container-terminal

    7-Day Strike Cripples Hong Kong Port

    http://www.maritime-executive.com/article/7Day-Strike-Cripples-Hong-Kong-Port-2013-04-03/

  3. Kan Wai Hin, Richard says:

    Thank you for the insightful sharing on the Kwai Chung Container Terminal strike, Ivy. To determine whether Yim is liable, I agree with you that it depends on the proof of his contract. Relevant disclosures should be made as soon as possible in order to maintain its reputation.

    With the current expectations on corporate social responsibility (CSR), HIT is only making the whole situation, both in terms of its reputation and the port’s operations, even worse by distancing itself from the dispute when claiming it should be resolved by contractors who supply workers to the berths it operates. However, it becomes contradicting when both HIT and Sakoma cannot provide the relevant proof to the general public.

    The strike also unarguably disrupts the port’s operations. It has led to delays of up to 60 hours at the port and is costing HIT about $640,000 a day. (Li, Pomfret, 2013). Competition among regional ports has intensified, as the strike has diverted a portion of traffic to the port in Shen Zhen, and potentially Hong Kong will become seemingly less important in transshipment.

    Li, G., Pomfret, J. (2013, April 10). Cargo piles up as two-week Hong Kong port strike drags on. Reuters. Retrieved on April 13, 2013 from http://www.reuters.com/article/2013/04/10/us-hongkong-port-strike-idUSBRE93908H20130410

    Name: Kan Wai Hin, Richard
    UID: 2010502707
    Email: h1050270@hku.hk

  4. Chan Lok Sze (UID: 2010192617) says:

    Thank you for providing information about the strike in HIT recently. This large scale strike attracts a lot of attention worldwide. I think there is a need to deal with the issue immediately and there is also a need for the government to review the laws to further assist workers and protect them from the grey area that companies are now utilizing to deprive them rights and interests.

    It seems that now Yim is related to employing the workers indirectly but it is still no proof about whether Sakoma is the actual contractor. I do agree with you that an immediate confirmation of whether Sakoma is contractor is needed. If it is really the case, it is essential for Yim or HIT to be responsible and ensure the interests of the workers. However, if another contractor is proofed instead, it is true that HIT has no obligation to talk with the dock workers. Nevertheless, I think that even though HIT has no obligation, it still have the greatest involvement in the strike as the workers are working for HIT. It would be a great damage to HIT and also Hong Kong’s image if the issue drags on.

    Reference:
    McCafferty, G., & Pang, E. (2013, 4 4). Hong Kong dock strike cripples world’s third busiest port. Retrieved 4 14, 2013, from CNN: http://edition.cnn.com/2013/04/03/world/asia/hong-kong-dock-strike
    RTHK. (2013, 4 12). No breakthrough in dock strike talks . Retrieved 4 14, 2013, from RTHK English News: http://rthk.hk/rthk/news/englishnews/20130412/news_20130412_56_914588.htm

  5. pauline morelon (3035024574) says:

    thank you for sharing this information with us.
    As a law student, I followed this strike carefully, because it is a first in Hong Kong. It is important to remind that even though the right to strike is recognized by the Basic Law, it is actually not protected at all by the Employment Ordinance.

    The debate about the contractors matter, it is true. However, I keep thinking that it is just an excuse to avoid to pay the workers what they deserve. Indeed, this all subcontractors problem seems to be quite confused… I mean, those workers’ sub contractor is ‘Wing-Fung’ company, but their permits listed their contractor as ‘Sakoma’, referring to Sakoma HK Ltd, which major shareholder is Asia Port Services Ltd., which in turn is owned by Hutchinson Port Holdings Trust. And to conclude this, Yim himself is listed as one of the directors of Sakoma.
    As HIT did the mistake about the work permit, Yim will have to proof than Sakoma is not a contractor.
    At some point, someone will have to take the responsibility to raise the wages of the workers that they deserve…
    Even though negotiations have finally started, results are far from being accomplished…

    References:

    http://www.scmp.com/news/hong-kong/article/1206587/port-dispute-striking-dockers-deepens

    http://edition.cnn.com/2013/04/03/world/asia/hong-kong-dock-strike

Follow

Get every new post delivered to your Inbox.

Join 46 other followers

%d bloggers like this: