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1. Probe into harbour project award

2. Come on in . . . but keep your head out of the water

3. $8bn harbour foul-up

4. The Heart of the Problem

5. How HK is lagging while other cities clean up their waters

6. We all want a cleaner harbour - but at what cost?

7. Testing the water - a global comparison

8. Courts treat polluters lightly

9. Delta bridge will add 2pc to HK's growth, says study

10. No way to treat our greatest asset

11. Promoting a rational debate

12. Hong Kong visitors at risk in Shenzhen

13. Going public over security garners approval at Oracle

14. New World slashes broadband fee

15. IBM tells government to outsource IT

16. Dilbert by Scott Adams

17. E-commerce growth in HK under threat from tax bill

1. Probe into harbour project award
Keith Wallis, The Standard 4 March 2003

An independent inquiry is being launched into the government's decision to award a HK$3.8 billion contract for the second phase of the Central reclamation to the second-highest tenderer.

Work must stop until its findings are known.

The move was confirmed by the Commerce, Industry and Technology Bureau yesterday after the Review Body on Bid Challenges received three complaints from losing contractors. Details of the challenges were exclusively revealed by The Standard two weeks ago.

In a fax to The Standard last night, bureau spokeswoman Martha Lo said: ``Please note that a panel has been set up to conduct an inquiry into the challenge. No date has yet been fixed for the inquiry.''

Neil Kaplan, chairman of the review body, decided to launch an inquiry despite an appeal by the Territory Development Department.

Kaplan and two panel members will investigate whether the department broke World Trade Organisation (WTO) rules on public procurement.

The department had argued it would not be in the public interest to launch an inquiry, especially as the winning consortium could claim extra payments for any delay.

Kaplan also insisted work should stop pending the outcome of the review body's inquiry. He has already chosen the two panel members.

The winning consortium - made up of Leighton Contractors, China State Construction (Hong Kong) and Dutch marine firm Van Oord ACZ - has received a letter from the department accepting its bid. It will be entitled to compensation if its contract is cancelled.

The cheapest price, at about HK$132 million below the winning bid, was submitted by Paul Y Construction in a joint venture with Japan's Penta-Ocean Construction.

Under review body guidelines, the panel must decide within 10 working days whether to recommend any rapid interim measures to correct breaches of WTO government procurement rules. The department has also been given 30 days to make a written response.

The panel is expected to decide within 90 days whether the losing contractors have a case. If it finds in their favour, it will recommend ``corrective measures or compensation which will be limited to the cost for tender preparation or protest''.

Work involves infilling 18 hectares of harbourfront between the Star Ferry and Fenwick pier, Wan Chai.

2. Come on in . . . but keep your head out of the water
Heike Phillips and May Chan, SCMP 4 March 2003

"We keep our mouths closed and our heads above water of course," said Chan Luk Mui-yung, 52, as she prepared to dive into the heavily polluted Sulphur channel near Kennedy Town.

She is part of a group of hardy swimmers who every morning risk poisoning and being hit by high-speed ferries in the narrow strip of sea between Mount Davis and Green Island.

E.coli readings in the water in which they swim have doubled over the past year, from 2,200 bacteria per 100ml to 4,900 - more than 25 times higher than the recommended safe level for swimming.

The housewife said neither she nor nay of her fellow swimmers have fallen ill yet.

"Most of us have been swimming here every morning for more than 20 years and we are too stubborn to move out, even though we know about the dangers of toxic water."

She said she would like the government to clean the water, but fears it would not be enthusiastic about such a project because it already has "too many things on its plate".

Kwok Fat-wu, a 64-year-old taxi driver who's been swimming off Kennedy Town for mor than 20 years, said the pollution would not put him off his morning swims.

"We've been swimming here for years, and we love it so much that we established a community to provide showering facilities for all the avid swimmers. We even built a bridge leading to the water to make it more convenient," he said.

"We won't stop just because there are warnings about the toxic sea water. But the government really ought to do something to improve the water here if the threat of the toxins is really so grave."

A 72 -year-old swimmer surnamed Yu said he avoided swimming in the channel only when there was heavy debris or oil in the water. But he said this occurred less often in recent years.

"When the waters are good, you can gaze at the bottom of the sea along the shoreline, and the water glimmers like crystal beneath the early sunlight," he said.

"It's really beautiful and peaceful. Maybe there are toxins in the sea that we can't see but we're not going to stop because of an invisible threat".

3. $8bn harbour foul-up
HEIKE PHILLIPS, Environment Reporter, SCMP 4 March 2003

An $8.2 billion sewage plant designed to reduce harbour pollution has instead increased bacteria levels in surrounding waters and played a significant part in the closure of four Tsuen Wan beaches last week.

The Stonecutters Island treatment plant - which came into full operation 14 months ago as the first stage of the Harbour Area Treatment Scheme (HATS) - has been linked to substantial rises in levels of E.coli, a disease-causing bacteria, on the western side of Victoria Harbour.

The plant is discharging partially-treated sewage back into the sea until further stages of the scheme are completed. Water quality in Victoria Harbour is unlikely to improve for 10 to 15 years under the current timetable.

A South China Morning Post investigation has also found that Hong Kong is lagging far behind other cities, such as Singapore, in cleaning up its harbour, despite having directed more than $30 billion towards improving water quality since 1989.

Concern over pollution resurfaced last week when four beaches in the Tsuen Wan area - Casam, Lido, Gemini and Hoi Mei Wan - were closed to swimmers for the coming bathing season.

Donald Tong Chi-keung, deputy secretary of the Environment, Transport and Works Bureau, said the closure of the beaches was "a very unfortunate price to pay in the short-term". He apportioned most of the blame to sewage discharged from villages in the Tsuen Wan district and said the treatment plant accounted for only about 20 per cent of the problem.

Deputy director of the Environmental Protection Department Mike Stokoe agreed pollution from local sources was part of the problem, but admitted: "What has happened in the past year has to do with the first stage of HATS."

The department's assistant director for waste and water, Benny Wong, said that it was clear that the increase in E.coli levels was due to the HATS scheme. "In previous years there was a very obvious trend of improvement because of tackling the local pollution," he said.

Mr Stokoe explained the problem was not bad design, but the delay in implementing the rest of the scheme. "We are only part of the way through the scheme. It was never intended that where we are now is a permanent solution."

The treatment plant at Stonecutters Island went from treating 333,500 cubic metres of sewage a day in 1997 - when it was partially commissioned - to processing more than 1.3 million cubic metres a day in 2001, when it became fully operational.

Treatment removes about half of the E.coli, but the sheer volume of concentrated effluent discharged into the western harbour has caused bacterial levels to soar nearby.

An Environmental Protection Department report confirms that pollution in the eastern harbour has been reduced by 50 to 89 per cent. However, in the western area, near the Stonecutters Island outfall, E.coli levels have risen sharply. At Casam Beach, the E.coli count more than tripled, from 233 per 100ml in 2001 to 741 in 2002. At Lido Beach the level rose from 269 to 683 per 100ml.

Winston Chu Ka-sun, chairman of the Society for the Protection of the Harbour, said that the government has "messed up the whole thing". But he added: "In the past eight years of fighting to protect the harbour we have achieved two things - we have cut back on harbour reclamation and the government has adopted a better approach toward town planning and public consultation."

4. The Heart of the Problem
SCMP, 4 March 2003

- The plant has been linked to the closure of four beaches.
- The amount of sewage processed at Stonecutters Island quadrupled between 1997 and 2001. The sheer volume of sewage pumped into the harbour is to blame for the high bacteria counts.
- $30 billion has been spent on trying to improve water quality since 1989.

"It was never intended that where we are now is a permanent solution"
Mike Stokoe, of the Environmental Protection Department.

5. How HK is lagging while other cities clean up their waters
HEIKE PHILLIPS, Environment Reporter, 4 March 2003

Hong Kong is lagging far behind other major global cities such as London, New York, Sydney and Singapore in cleaning up its waters.

The River Thames in London, declared "biologically dead" 40 years ago, is today recognised as one of the cleanest metropolitan estuaries in the world, teeming with freshwater species.

New York's Hudson River, used as a chemical waste dump for 30 years, is now home to the east coast's largest population of shortnose sturgeon - an endangered species - and provides habitat for more than 100 bald eagles.

Whales, including minke and a rare southern whale, have returned to the once heavily polluted Sydney Harbour.

Closer to home, the once putrid Singapore River attracts thousands of visitors to outdoor eating establishments and recreational areas along its banks.

In spite of their vastly differing cultures, geographies and political systems, the driving forces behind their achievements are the same: community action and government will.

John Dengate, director of public affairs for the New South Wales Environment Protection Authority in Australia, said a combination of community pressure, education, engineering solutions and a crackdown on industry had seen the return of minke whales and other marine creatures to Sydney's foreshore and harbour.

"From 1970 to now there has been a massive reduction in industrial emissions permitted - from 200 companies to practically none. The impact of pollutants has dropped more than 100-fold," he said.

Sydney is now shifting its focus to pollution from the household and urban sector. "Things such as oil and grease washing off the roads and fertilisers from gardens still enter the stormwater system," said Mr Dengate.

So far, the measures have stopped 1,400 tonnes of rubbish from going into the harbour. A further A$3 billion has been budgeted for solving what few urban water and wastewater problems remain by 2020.

Hong Kong, meanwhile, is still in the process of finding a viable solution to its sewage problems, with the remaining stages of the Harbour Area Treatment Scheme not expected to be completed for 10 to 15 years.

The chairman of Clean Up Australia and Clean Up the World, Ian Kiernan, said community outrage at the state of Sydney Harbour and the public's desire to restore it to its former splendour led to the creation of Clean Up Australia in 1989.

"That year we successfully mobilised 40,000 Sydneysiders and removed 5,000 tonnes of waste. Since then, more than six million volunteers have taken part in annual cleanup days, collecting almost 190,000 tonnes of rubbish from our waterways, beaches and bushland."

Mr Kiernan, a regular visitor to Hong Kong, said: "No doubt Hong Kong is facing different types of pollution problems as a result of rapid population and economic growth.

"Victoria Harbour, like Sydney Harbour, is an invaluable asset that generates significant economic and social benefits through tourism, real estate, trade, transportation, and as recreational and sporting venues. We need to manage and preserve our assets well."

He said the business community in Hong Kong had the greatest potential and capacity to fix up the environment.

The chief executive director of Hong Kong's Business Environment Council, Andrew Thomsen, said the state of Hong Kong's harbour was a "lost business opportunity".

"Compared to Singapore's east coast parkway, where people can stroll along or ride a bicycle, our north island expressway is just a barrier. The lack of a seafront experience is undesirable."

By contrast, more than 250,000 fishermen and 20,000 boat owners have access to the River Thames in London for recreational purposes. The river is the disposal route for effluent from 350 waste water treatment plants, including some of the largest in Europe, but is one of the cleanest urban rivers in the world.

"The river is cleaner now than at any time in the last 150 years. It supports 119 species of fish and 350 species of invertebrate, where only 40 years ago there were none," says Mark Lloyd, director of Thames21, a coalition of agencies working towards enhancing the Thames and its tributaries.

In New York, conservationists turned to the law in their effort to clean up the Hudson River. In a landmark case last year, two General Electric Corporation plants, which released more than 450kg of toxic chemicals into the river over a period of 30 years, were ordered to pay the estimated US$460 million (HK$3.6 billion) cleanup costs.

6. We all want a cleaner harbour - but at what cost?
Heike Phillips, SCMP 4 March 2003

Residents will have a chance to tell the government how much a clean harbour is worth to them when options for the remaining stages of the Harbour Area Treatment Scheme (Hats) are released for comment early next year.

According to the Environmental Protection Department (EPD), the final stages of the scheme will be completed within 10 to 15 years at a cost of between $12 and $17 billion.

EPD spokesman Benny Wong said: "It's up to Hong Kong people to decide what level of treatment they want, with costs going up for each level of treatment. It's like buying a car. We have to decide whether we just want a car or whether we want a luxury vehicle."

In response to an inquiry from the Post, former governor Chris Patten, who is now the European Union Commissioner for External Affairs, said the Harbour Area Scheme was launched during his time in Hong Kong as one of the measures based on the 1989 White Paper "Pollution, a time to act". "These problems, which were very much in evidence already at the time, led us to initiate the sewage disposal scheme," Mr Patten said.

He said there had been much public discussion on paying for the scheme.

"To what extent such expenditure should be recouped through sewage charges is for the Hong Kong administration to decide," he said. "Approaches to this issue vary sharply within the European Union. In many member states, water prices are heavily subsidized, whereas in others, for example the UK, the water sector is privatized."

Deputy Secretary of the Environment, Transport and Works Bureau Donald Tong chi-keung defended the performance of the first stage of the scheme. He said that except for an increase in E. Coli levels, other parameters - such as total inorganic nitrogen, dissolved oxygen and ammonia - had shown an improvement.

7. Testing the water - a global comparison
SCMP Graphic, 4 March 2003

Hong Kong

¡P Population: 6.8 million
¡P $31.8 billion spent on sewerage projects since 1989. Hong Kong produces 2.4 million cubic metres of sewage each day
¡P 200 sewage handling facilities
¡P 95 per cent of households served
¡P 70 per cent of beaches suitable for swimming, after four beaches were closed this year because of pollution
¡P 4,853 tonnes of floating refuse collected from Victoria Harbour in 2002
¡P 70 per cent of sewage treated
¡P Victoria harbour fish life restricted to small species requiring limited oxygen

London

¡P Population 7.2 million
¡P Thames Water has invested ?150million (HK$12.3 billion) in river since 1989
¡P The river had been declared "biologically dead" in 1956
¡P 3,000 tonnes of rubbish are removed from the Thames in London each year
¡P Sea bass, flounder, salmon, shad have returned. Porpoises have been seen near central London
¡P 98.8 per cent of bathing waters are suitable for swinming

Singapore

¡P Population 4.1 million
¡P By mid-1970s waters were heavily polluted and devoid of aquatic life
¡P 10-year "clean river" programme initiated in 1977, then costing S$261 million (HK$1.17 billion)
¡P S$6.9 billion sewage system to be commissioned in stage (2008 and 2015)
¡P 100 per cent of population served
¡P 100 per cent of sewage treated
¡P Waters of the Straits of Singapore meet standards for swimming 97 per cent of the time
¡P Fish and other aquatic life returned in 1986 and has been increasing steadily

New York

¡P Population 8 million
¡P The Hudson River was described as an open sewer in the 1960s
¡P US$166 million (HK$1.3 billion) was spent on the 1996 Hudson river Estuary Action Plan. Two General Electric Corporation factories were ordered to pay US$460 million towards cleaning up the river.
¡P The Hudson is now home to the largest population of the endangered shortnose sturgeon on the east coast
¡P More than 200 species of fish are found in the Hudson and its estuaries
¡P Resident species include 100 bald eagles
¡P All New York city beaches have been open since 1992

Sydney

¡P Population 4 million
¡P A$2.9 billion (HK$14 billion) to be spent over 20 years on sewage and stormwater management
¡P 5 billion litres of sewage prevented from entering harbour between February 2001 and July 2002
¡P Bacteria levels at Sydney Harbour swimming sites well within allowable levels last year
¡P Rare southern right whale sighted n harbour last year. Minke and humpback whales have also returned
¡P Thriving colony of fairy penguins

8. Courts treat polluters lightly
HEIKE PHILLIPS, SCMP , SCMP 4 March 2003

Penalties for polluting the water in Hong Kong are generally light, with even repeat offenders escaping with fines of only a few thousand dollars.

In January, construction giant Gammon Skanska was convicted of contravening the terms of its licence for the eighth time since January 2001 and was ordered to pay an $8,000 fine.

Polluting activities are broadly covered by laws such as the Water Pollution, Shipping and Port Control ordinances. The Marine Department received 79 reports of oil pollution last year, with 36 turning out to be non-oil pollution cases and 33 where the source was "unknown". All the cases were considered to be minor.

Over the same period, the Environmental Protection Department received 1,520 complaints about water pollution, of which only 110 resulted in convictions. But of those charged, even repeat offenders were treated lightly.

Terri Mottershead, an honorary research fellow at the University of Hong Kong's Centre of Urban Planning and Environmental Management, believes low fines mean it is easier for companies just to pay up rather than spend money on tackling the problem.

"There is also an issue with enforcement itself, borne out in part by the number of complaints compared to the number of prosecutions - there is a big gap," she said. Ms Mottershead suggested companies be offered greater incentives to clean up their act, such as green taxes and a broader array of penalties.

Under the Water Pollution Control Ordinance, polluters may be required to pay cleanup costs regardless of whether they are convicted of an offence. However, the EPD confirms that this section of the law has never been enforced.

9. Delta bridge will add 2pc to HK's growth, says study
GARY CHEUNG, SCMP 4 March 2003

The completion of a bridge linking Hong Kong, Macau and Zhuhai will bring an extra 2 per cent economic growth for Hong Kong and create more than 6,700 jobs in the city, a study has found.

The study by two Chinese University professors, Tuan Chyau and Linda Ng Fung-yee, estimates the economy would grow an extra 0.9 to 1.9 per cent in the first year after the bridge opened.

Professor Tuan, of the department of decision sciences and managerial economics, estimates 145 foreign enterprises would set up their regional headquarters in Hong Kong as a springboard to invest on the west side of the delta. The new headquarters would create 6,700 jobs.

The study findings are based on the correlation between travelling time and the influx of foreign direct investment. The information was provided by about 37,000 foreign enterprises in the delta, of which 80 per cent are owned by Hong Kong-based companies.

"We did not estimate the demand for professional services, like banking, legal and accounting derived from these investments," Professor Tuan said.

The six-month study is expected to be published this month. But the professor warned the opening of the bridge, scheduled for 2006, might have a negative impact on Hong Kong's job market in the short term.

Of the 200 Hong Kong enterprises polled by Professor Tuan in July, 64 per cent said they had hired less staff in Hong Kong since investing in the delta.

Professor Ng estimated that about 5,100 foreign companies, most Hong Kong-based enterprises, would invest on the west side of the delta after the bridge opened.

"Foreign companies in the delta currently hire an average of five Hong Kong employees," she said. "From a conservative projection, it means more than 20,000 jobs for the people of Hong Kong on the west side of the delta.

"We may see a net loss of jobs in Hong Kong in the short-run but there would be plenty of employment opportunities for Hong Kong people on the west side."

The study also found the bridge would bring considerable economic gains to the cities on that side of the delta. The west would see an influx of foreign capital after the opening of the bridge, which would drastically cut the time spent on travelling between the region and Hong Kong.

Zhuhai's economy would expand an extra 20 to 29.4 per cent in the first year after completion of the bridge. The gross domestic product of Zhongshan is estimated to grow an extra 11 to 17.3 per cent and Foshan's is expected to grow an extra 6.8 per cent.

10. No way to treat our greatest asset
SCMP, 4 March 2003

Singapore spent 10 years and $1.17 billion to clean up its river. Sydney spent the same amount of time and $377 million on restoring its harbour. Hong Kong spent 20 years and $8.2 billion to build a sewage treatment plant which, instead of cleaning the harbour, is further polluting it. What went wrong?

The Hong Kong government argues that the problem is unforeseen, and only temporary because the sewage plant forms part of a wider Harbour Area Treatment Scheme. Contractors working on the first stage of the scheme, the treatment plant on Stonecutters Island, are blamed for walking off the job before it was completed, leading to engineering problems and delays. Conservation groups are blamed for having derailed an original plan for a tunnelled outfall, which would have removed the problem from Hong Kong's shores by depositing it on our neighbours' doorstep.

Amid the finger-pointing and shoulder-shrugging, an army of consultants is busily preparing options for completing the scheme. Our $8.2 billion sewage plant, which is capable of removing only about half of the bacteria from the 1.3 million cubic metres of sewage it treats every day, will continue to pollute the harbour and nearby beaches until the scheme is completed in about 10 years' time.

Regrettably, the closure of four beaches last week was dismissed by a senior official as a very unfortunate price to pay in the short term. If 10 years is considered short-term, it is not surprising we have fallen so far behind the efforts of other world cities in cleaning up our act.

The Hong Kong government only woke up to the fact it had to deal with the millions of cubic metres of untreated sewage being pumped straight into the harbour in 1989. Until the mid-1980s, Hong Kong's sewage disposal strategy was to allow the city's untreated sewage to be carried away by the harbour's strong currents. This strategy was considered to be appropriate at the time and Hong Kong enjoyed quite good results until reclamation and an ever-narrowing harbour changed the patterns of the current.

Government might argue this was one of the unforeseen problems, but it is a sad indictment that until that point, the government had failed to so much as think about putting in place a sewage treatment scheme. Worse yet, having finally contemplated the idea, it has taken another 20 years to put in place just the first step of the scheme, a treatment plant providing questionable levels of treatment.

The harbour is Hong Kong's greatest asset, and not just because it underpins our role as a regional shipping centre. The glittering lights from the dense urban settlements on both sides of the harbour now count as one of the world's most amazing sights, to which millions of tourists are drawn every year. This spectacular attraction, for both locals and visitors, could lose its allure if cruise boats and ferries had to sail in filthy waters.

Are the people of Hong Kong so detached and unmoved by their harbour that they are prepared to wait until its waters have turned black? Clearly not. By all means let the consultants fast-track their studies. Budgetary constraints should not be allowed to hold back the construction of sewage treatment facilities. As they have a long economic life and bring benefits for generations to come, there is simply no need for the government to pay for their construction costs up front. With some imaginative financial planning, loans could be raised to cover the bill. The community should not have to wait another 10 years to see further improvement to water quality in the harbour.

11. Promoting a rational debate
SCMP, 4 March 2003

The editorial in this newspaper last Friday headed "Time for Mr Tung to step up and sit back" has stimulated considerable debate, some of it constructive. Executive councillors and legislators, current and past, and delegates to the National People's Congress and Chinese People's Political Consultative Conference, have expressed a range of opinions on the idea that Mr Tung's main role should be promoting and guiding Hong Kong, leaving the day-to-day operations of running his government to a trusted deputy. Many ordinary people have expressed their feelings too.

Robust public debate has long been a feature of Hong Kong life. It is a vital element of society, particularly in the sort of challenging times we now face, yet one sometimes overlooked in the face of wider considerations. It is the duty of any good newspaper to foster this discourse by reflecting a range of ideas and opinions, supporting some and challenging others. It is a duty this newspaper takes seriously by adopting editorial positions with independence and fairness.

This role sometimes requires that we give voice to undercurrents in the community, bringing to light intelligent suggestions for the good of all. In that regard, we were confident our editorial would find a receptive audience, reflecting as it did a concept that many people had privately considered.

While debate is inevitably a positive thing, it can often lead to unwarranted speculation. In fact, we did no more than what we have always done - we openly discussed Mr Tung's strengths and weaknesses. We have never seen our role as being automatically for or against Mr Tung and his administration, and that position remains. Similarly, anyone seeking motives behind the timing of the piece is misguided. As always, we are simply seeking to tap into the most relevant trends of the moment. We believe we have done that.

Anyone familiar with the mainland's political system will recognise the usefulness of our party secretary/mayor analogy. As we explained, it was not intended to be taken literally, but rather as a way of explaining how Mr Tung could be ultimately responsible for the direction of the ship without having his hands on the wheel. We look forward to a serious, rational and informed debate continuing

12. Hong Kong visitors at risk in Shenzhen
SCMP, 4 March 2003

The number of Hong Kong visitors being robbed in Shenzhen is far greater than reported.

Many people report to the nearest police station and these are not included in the border police report.

I was robbed of $7,500 outside a bank in Shenzhen near Lowu.

I made a report to the nearest police station and the officers went through the motions of writing a report, but showed very little interest in the case.

Hong Kong visitors become an immediate target as soon as they cross the border and should never go alone.

J. H. FLEMING, Cheung Chau

13. Going public over security garners approval at Oracle
BIEN PEREZ, SCMP 4 March 2003

Oracle chief security officer Mary Ann Davidson claims she is a "professional paranoid" - an apt qualification for the work she does.

She is responsible for fulfilling Oracle's commitment to secure software product design, development and delivery. In other words, she has to back up the database giant's bold claim to building "unbreakable" software.

"It is like having a bull's-eye on your forehead," she said, referring to her role behind the "unbreakable" global marketing campaign started by Oracle chairman and chief executive, Larry Ellison, in November 2001.

She was handed the plum chief security officer (CSO) position a month after the launch of the campaign, which invited hackers worldwide to try and break into Oracle's software.

Undaunted by the prospect of serving as a target for criticism and attacks from the software industry's cynics, sceptics and hackers, Ms Davidson declared she wanted "to do the right thing", and that she felt personally responsible for the company's decision to take a more aggressive stand on security.

She had been a veteran of 14 years on Oracle's product development team when the company promoted her. The move suggested that the company had endorsed Ms Davidson's strong views on secure software engineering practices, and was a validation of what Oracle has been doing for the past 26 years.

"Having a CSO is one way to make security visible," she said.

Oracle apparently has plenty of "good genetic material" to support the secure product development culture it touts to the world.

Ms Davidson said Oracle was founded in 1977 to meet the demand for a trustworthy database system required by other, better known professional paranoids. She noted that security was essential to the company's first-customer base, which included the United States Central Intelligence Agency and other government agencies.

"Security is part of our development DNA," she said.

Her role in security policies, security evaluations, assessments and incident-handling at Oracle has also placed Ms Davidson among the elite of security gurus in the IT industry. These include Whitfield Diffie, chief security officer at Sun Microsystems.

An authority on cryptography and security technology, Mr Diffie joined Sun in 1991 after 12 years as manager of secure systems research at Northern Telecom, now Nortel Networks. Ms Davidson said Mr Diffie gained fame as the inventor of Public Key Encryption, a technology that underlies secure electronic commerce.

Other high-profile CSOs in the IT sector include Scott Charney, a former principal for PricewaterhouseCoopers' cybercrime prevention and response business unit, who joined Microsoft in January last year as chief security strategist.

In September last year, global technology advisers Giga Information Group noted more than 200 known CSOs employed in large organisations. The executive positions have emerged over the past three years in the corporate scene in North America and Europe.

Giga also noted that CSO qualifications, job responsibilities and compensation can vary widely. Ms Davidson cited her own credentials and background, which may not be considered a typical CSO profile.

With a degree in mechanical engineering and an MBA, Ms Davidson joined the US Navy Civil Engineering Corps as a commissioned officer. For her seven-year service in the military, she received the Navy Achievement Medal.

When she joined Oracle, she spent eight of her first 14 years with the firm working on security development.

She served on the board of directors of Oracle's Information Technology Information Security Analysis Center, and she is also a member of the editorial review board of the Secure Business Quarterly.

Ms Davidson, who said she did not lobby for the CSO job, credits Oracle's top management for fostering a corporate environment that allowed staff to show their commitment to the job and industry they serve.

She believes her forthright style found favour with Oracle management.

"They promoted me precisely because I am outspoken," she says.

"I am very vocal if I see that something is not right. After years of people telling me that being direct was a bad thing, I find it turned out to be one of the qualities Oracle values most."

14. New World slashes broadband fee
CAROLYN ONG, SCMP 4 March 2003

New World Telecom expects to shake up Hong Kong's broadband Internet market by offering 12 megabits per second (Mbps) connectivity at a rock-bottom fee of HK$36 a month for unlimited usage - one of the cheapest rates in the world.

Until recently, it provided broadband Internet services only to corporate customers, expanding to provide a 2Mbps broadband service to consumers in January. A bit player, it has ambitions to become a much larger contender in consumer broadband with its new 12Mbps asymmetric digital subscriber line service, called Vitamin.

New World Telecom expected the unmatched pricing and speed of its Vitamin service to cause a stir in the industry, but not a price war, marketing director Thomas Leung said.

"The HK$36 per month [charge] will not spark a price war as our service is not ubiquitous yet, compared with our competitors," he said.

While the company plans to extend its Vitamin service to all of Hong Kong, it will be available primarily in 14 districts this year.

The highest connectivity speed available to Hong Kong residents is 6Mbps, offered by several providers including PCCW, So-net and Pacific Supernet, which charge between HK$328 and HK$398 a month for unlimited usage.

I-Cable's broadband Internet service, which has the second-largest subscriber base after PCCW, charges HK$248 a month for unlimited usage.

According to the Office of the Telecommunications Authority, as of November there were 1.58 million dial-up Internet users in Hong Kong, compared with 969,355 broadband subscribers.

Mr Leung said the consumer broadband market in Hong Kong had not reached saturation.

"Just like with the PC market, where so many people already own PCs and there is still a replacement market, we think that our 12Mbps service will attract a lot of current broadband subscribers," he said.

Subscribers to New World's 2Mbps GigaLink service will be automatically upgraded to its 12Mbps Vitamin service. The company will discontinue the slower service.

Mr Leung said that by using Cisco System's Long Reach Ethernet technology, a true 12Mbps connection for both downstream and upstream was possible even during peak Internet usage times.

New World Telecom would also today announce an Internet portal, www.vitaminbb.com, he said.

This would feature multimedia content for Vitamin subscribers similar to PCCW's Now.com.hk service at no charge. Mr Leung said, however, that the company would eventually charge for some premium content and Web services offered through the portal.

"We will provide content that will fully utilise the high-speed 12Mbps Vitamin connection," he said.

Mr Leung said he expected the broadband Internet industry in Hong Kong to move toward a model proven in Japan and the United States.

There the operator charged a small fee for broadband Internet subscription, preferring to make most of its revenues by providing distinctive content or Web services that people were willing to buy, such as video-on-demand.

"Internet usage behaviour is changing. In the past, people tended to download content, whereas now, people upload a lot of content such as pictures to share with friends and families online.

"The applications for broadband are starting to become more creative," he said.

PCCW already offers several complementary Web services and content for its Netvigator subscribers, which have seen modest success.

Its "Net See" service, which allowed users to monitor what was happening at their homes using one to four Web cameras, had about 50,000 subscribers, a PCCW spokesman said.

Vitamin Broadband Service is available in seven districts: Tung Chung, Kwai Chung, Tuen Mun, Tsuen Wan, Yuen Long, Kwun Tong and Choi Hung.

15. IBM tells government to outsource IT
CAROLYN ONG, SCMP 4 March 2003

The government must move quickly to bolster Hong Kong's weak technological base if it is to revitalise the economy, says IBM Hong Kong's general manager Cordelia Chung.

Ms Chung said Chief Executive Tung Chee-hwa's policy address last year had correctly identified Hong Kong's relative slowness in embracing technology as its weakness in moving towards a knowledge-based economy.

The government's Digital 21 IT vision had identified areas in which Hong Kong needed to change to stay competitive in the "intelligent era", she said. But it had been slow to harness technology to transform its processes and improve efficiency.

IBM was one of the first companies to integrate e-business processes and information technology (IT) outsourcing, Ms Chung said. It had worked hard to reduce costs along its supply chain, a vast network that covers everything from procuring parts and manufacturing servers to buying paper clips. She said IBM had cut US$5 billion from its supply chain last year and expected to do the same this year.

IBM's global IT services arm, IBM Global Services, is the world's largest in terms of revenue. It recently sealed several high-profile deals, including global agreements with JP Morgan and Singapore's DBS Bank.

Its involvement with the Hong Kong government has been limited to bulk PC and software contracts, consultancy on Digital 21 and integration and infrastructure support projects.

Garry Willinge, director of IBM Global Services Hong Kong, said the government had been slow to see the value of IT outsourcing.

"So far, what the Hong Kong government refers to as IT outsourcing is really just turning over the maintenance of its systems to external service providers for mostly labour-based servicing or systems integration. That is not true outsourcing."

He said IT outsourcing - in which companies and government agencies shift a range of IT, back-office, customer-service and sales operations offshore - could cut costs by 50 per cent or more. The Australian government started outsourcing in 1996 and the Singapore government started in 1998.

Mr Willinge said banks such as JP Morgan had been among the first to benefit from IBM's on-demand concept, which allows companies to buy computing power the way they buy electricity.

A growing number of Fortune 1,000 companies have gained huge cost advantages by moving back-office operations and call centres to low-wage countries such as India, South Africa and the Philippines.

A recent Forrester Research report forecasts that 3.3 million services jobs in the United States will move to India, Russia, China and other countries over the next 15 years.

Sin Chung-kai, the democratic legislator representing the IT sector, said: "There may be differences in the definition of IT outsourcing between government and industry, but I cannot agree that the Hong Kong government lags behind other governments.

"There are studies showing that outsourcing reduces government costs. But the government possesses a lot of sensitive information. Outsourcing raises security concerns."

IT outsourcing will become mainstream this year, according Gartner Group research director Dion Wiggins.

"The Hong Kong government has been relatively slow in some areas of IT deployment, such as outsourcing and putting government services online. But it leads in other areas like smart ID card development," he said.

"Budget constraints, government re-organisations and the looming presence of the Internet as a revenue source will present the public sector with challenges and opportunities in the coming year."

Ms Chung sees a gradual attitude change among government officials towards outsourcing.

"After you have cut the cost of paper cups, paper clips and office furniture, where else can you cut?" she asked.

16. Dilbert by Scott Adams
SCMP, 4 March 2003

17. E-commerce growth in HK under threat from tax bill
ALLAN DYER, SCMP 4 March 2003

A bill that will have a significant impact on the development of the knowledge-based economy is quietly passing through the Legislative Council.

The bill aims to encourage taxpayers to file tax returns through the Electronic Services Delivery Scheme. It may come as a surprise, therefore, to those who see it as a worthy move that Hong Kong's professional information technology (IT) bodies are opposing it. The bill goes by the snappy name of the Inland Revenue (Amendment) (No 2) Bill 2001, and the IT bodies are right to oppose it because, although its aim is good, it will have an effect opposite to the one desired.

An electronic signature can replace a handwritten signature. A digital signature is one type of electronic signature defined in the Electronic Transactions Ordinance. It is valid in Hong Kong when supported by a digital certificate from a certification authority, such as Hongkong Post (who call their digital certificates e-Cert).

Since January 2001, citizens have been able to submit their tax returns electronically by using their digital signatures. Unfortunately, few have applied for an e-Cert, and fewer use them. People are discouraged by such issues as the lack of user-friendliness, the need to renew the e-Cert every year, and the application fee.

The amendment aims to provide an easier way to submit tax returns by allowing the use of a six-digit password as an electronic signature. But passwords are weak. A six-digit number can only have one million different values - a small number to today's computers. People often mismanage their passwords: they write them down, or choose an "obvious" password, or use the same password more than once.

There is no such thing as a perfect security system. Each must be evaluated in terms of the risks involved. The worst-case scenario here is that an attacker could submit an invalid tax return for a victim. There would be no tangible benefit to the attacker, so minimal security is required, and the proposed system provides that.

The amendment does not propose an isolated system, but one that will affect the adoption of e-government and e-commerce throughout Hong Kong. It will be detrimental to the promotion of e-government, e-commerce law, promotion of IT usage, the competitiveness of Hong Kong and bridging the digital divide.

This password scheme will make it easier to submit a tax return, but when you want to use another e-government service you will need to register for that service and choose a different password. Passwords will make e-government services more accessible, but they will damage overall progress. The commercial sector will, to some extent, follow the government's lead, so allowing a password as a signature for tax returns will encourage companies to use similar methods.

The IRD amendment also sets the precedent that a "shared secret" can be used for non-repudiation. A "shared secret" is a code known by both the authorised user and a third party. Non-repudiation means that it is not possible to later claim that the signature was invalid. This makes no sense: a number known to both the taxpayer and the IRD when attached to a tax return cannot "prove" that the taxpayer intended to make that tax return.

In the context of a tax return, it does not matter much. In a social context, the precedent is dangerous: lazy system designers can use it to justify bad designs and judges could be persuaded by arguments based on it.

The IRD amendment will not help promote IT usage or bridge the digital divide. Promotion of IT usage is not an end in itself. The intention must be to leverage IT to achieve other improvements.

We should not lead IT users into the dead-end of password overload. Many technologies could be used as electronic signatures. An evaluation must be made on the merits of the technology, and we should promote the best available. Today, this is digital signatures.

The amendment will hurt the competitiveness of Hong Kong. Digital signatures are difficult to understand, but their benefits are seen as more parties are dealt with. You can use a digital signature to sign a document and the recipient can use the certificate to prove who signed it. Digital signatures enable an electronic marketplace by enabling trading between parties. A population that understands digital signatures can enter the global electronic marketplace faster and more smoothly.

The government is also contradicting it own advice and that of the United Nations. During the Public Comment period on the Electronic Transactions Ordinance (ETO) in late 1999, the Information Technology and Broadcasting Bureau said digital signatures were preferable to passwords or PINs because they were "the only technically mature technology that provides the security service of ensuring integrity and non-repudiation in an open network environment".

The ETO allowed the use of other technologies when they became more mature, but there have been no advances in password security. Quite the opposite, passwords are increasingly seen as a weak link in security.

The United Nations Commission on International Trade Law has set out guidelines for electronic signatures to be considered reliable. The IRD's proposal fails to meet those guidelines.

The ETO is a good piece of legislation, but there has been a failure in following it up with effective promotion of digital signatures. This bill only addresses the symptoms, but not the root cause of the problem. The Smart ID gives the government a second chance in making e-Cert work in Hong Kong.

Allan Dyer is president of the Association of Anti Virus Asia Researchers and chief consultant of Yui Kee Computing