To support the increased use of natural gas in Hong Kong from 2020 onwards, Castle Peak Power Company Limited (CAPCO) and The Hongkong Electric Company, Limited (HK Electric) have identified that the development of an offshore liquefied natural gas (LNG) receiving terminal in Hong Kong using Floating Storage and Regasification Unit (FSRU) technology (‘the Project’) presents a viable additional gas supply option that will provide energy security through access to competitive gas supplies from world markets. The Project will involve the construction and operation of an offshore LNG import facility to be located in the southern waters of Hong Kong, a double berth jetty, and subsea pipelines that connect to the gas receiving stations (GRS) at the Black Point Power Station (BPPS) and the Lamma Power Station (LPS).

The Environmental Impact Assessment (EIA) Report for the Project was submitted to the Environmental Protection Department (EPD) of the Hong Kong Special Administrative Region Government in May 2018. The EIA Report (EIAO Register No. AEIAR-218/2018) was approved by EPD and the associated Environmental Permit (EP) (EP-558/2018) was issued in October 2018. An application for Further Environmental Permits (FEP) was made on 24 December 2019 to demarcate the works between the different parties. The following FEPs were issued on 17 January 2020 and the EP under EP-558/2018 was surrendered on 5 March 2020:

§ the double berth jetty at LNG Terminal under the Hong Kong LNG Terminal Limited (HKLTL), joint venture between CAPCO and HK Electric (FEP-01/558/2018);

§ the subsea gas pipeline for the BPPS and the associated GRS in the BPPS under CAPCO (FEP-03/558/2018); and

§ the subsea gas pipeline for the LPS and the associated GRS in the LPS under HK Electric (FEP-02/558/2018).

The location plan of the Project is provided in Figure 1.1.

CAPCO, HK Electric and HKLTL believe that the development of the Project provides an opportunity to enhance the marine environment of southern and western Hong Kong waters for the benefit of its biodiversity and the community. Through the provision of independent funding for conservation, education, research and ecotourism programmes, CAPCO,HK Electric and HKLTL aim to create the necessary stimulus to bring potential enhancement initiatives to fruition, in support of the vision of “Conservation for the South” formulated by the HKSAR Government in the Sustainable Lantau Blueprint ([1]). It is also expected that such initiatives will also enhance fisheries resources of southern and western Hong Kong waters and support the sustainable development of the fishing industry.

The initiatives are not intended to address or mitigate the potential impacts of the Project as these will be addressed through specific construction practices, mitigation measures and monitoring programmes. Rather, the initiatives envisaged include a broad range of positive contributions to biodiversity and the community in terms of nature conservation, improvement and sharing of scientific knowledge, engagement with the community through leisure and recreational uses, etc., and would by all means support the actions formulated under Hong Kong’s first city-level Biodiversity Strategy and Action Plan (‘BSAP’) ([2]) where opportunities and synergies exist.

CAPCO, HK Electric and HKLTL propose that an environmental enhancement plan (‘EE Plan’) be developed, which will contain the key attributes as described above with a view to supporting enhancement initiatives of broad impact and interest. The condition in the FEPs relating to the EE Plan is as follows:

Condition 4.10 of FEP No. FEP-01/558/2018, Condition 4.6 of FEP No. FEP-02/558/2018 & FEP No. FEP-03/558/2018:

“The Permit Holder shall, no later than 3 months before the commencement of operation of the Project, submit 3 hard copies and 1 electronic copy of an environmental enhancement plan to the Director for approval. The environmental enhancement plan shall include but not limited to information relating to the environmental enhancement initiatives for marine ecology and conservation, fisheries resources and sustainable development of the fishing industry, the arrangements to support the environmental enhancement initiatives and to set up an independent management committee consisting of experts, representatives of the fishermen organizations and other stakeholders to oversee the implementation of the environmental enhancement initiatives, and the membership and terms of reference of the independent management committee.”

This EE Plan has been prepared to satisfy Condition 4.10 of FEP-01/558/2018 and Condition 4.6 of FEP-02/558/2018 and FEP-03/558/2018.

1.2 Purpose of the Environmental Enhancement Plan (‘EE Plan’)

As stated in the relevant FEP Conditions referred to above, the purpose of the EE Plan is to provide information relating to the environmental enhancement initiatives for marine ecology and conservation, fisheries resources and sustainable development of the fishing industry. Third parties will be supported through the provision of funding for studying and/or implementing such initiatives.

This EE Plan also outlines the proposed mechanism for supporting environmental enhancement initiatives, the funding arrangements, the setting up of steering committee and independent management committees to manage and administer the EE Plan, and the membership and terms of reference of the independent management committees.

Consultations and engagements with stakeholders have been conducted to solicit their views on the environmental enhancement initiatives for marine ecology and conservation, fisheries resources and sustainable development of the fishing industry. Their views have been reflected in the EE Plan as appropriate.

1.3 Structure of the EE Plan

Following this introductory section, the remainder of the EE Plan is organised as follows:

§ Section 2 presents the overall goal of the EE Plan and the organisation, management and administration of the EE Plan; and

§ Section 3 introduces the goals and objectives as well as potential initiatives of the key themes under the EE Plan.

2. Organisation, Management and Administration of the EE Plan

2.1 Geographical Coverage

The EE Plan will contribute to the enhancement of the marine environment of southern and western Hong Kong waters for the benefit of its biodiversity and the community. The area of interest for this EE Plan therefore includes marine waters and habitats in the vicinity of the Project. This specifically includes south Lantau, where the Southwest Lantau Marine Park and the proposed South Lantau Marine Park and other important marine habitats (e.g. habitats for finless porpoises) are located. The indicative geographical coverage for the EE Plan is presented in Figure 2.1.

It should be noted that the initiatives and measures introduced to the marine habitats of the area of interest could potentially introduce longer term benefits to the marine environment of adjacent waters. The area of interest may also extend beyond the areas identified above if it is determined in the future that conservation and enhancement initiatives have been successful in these areas and other areas in the vicinity would benefit from similar initiatives.

2.2 Key Themes

As identified during the EIA Report, the key themes of the EE Plan include the following:

§ Marine conservation;

§ Habitat restoration and rehabilitation;

§ Education and ecotourism/ fisheries-related tourism;

§ Fisheries resources enhancement; and

§ Sustainable development of the fishing industry.

Potential initiatives under each of these key themes are discussed in Section 3 (Key Themes of the EE Plan).

2.3 Management and Financing of the EE Plan

To satisfy the purpose of the EE Plan, substantial financial and manpower resources are essential.

Two separate funds will be established for effective implementation of the EE Plan:

§ Marine Conservation Enhancement Fund (‘MCEF’); and

§ Fisheries Enhancement Fund (‘FEF’).

The two funds will be managed by separate independent management committees which will oversee the implementation of the environmental enhancement initiatives. Both funds are intended to fund studies and projects that are non-profit making only. Exceptions may be made for studies and projects with a commercial element to demonstrate the technical feasibility and commercial viability of new sustainable fisheries practices. This will be reviewed on a case-by-case basis.

CAPCO and HK Electric will provide the financial and manpower support for the two funds. A total of HK$100 million will be provided to ensure sufficient resources are available to support enhancement initiatives assisted by the EE Plan. It is envisaged that each fund will provide total funding of HK$50 million.

2.3.1 Marine Conservation Enhancement Fund

The MCEF is intended to support the following environmental initiatives within the geographical coverage presented in Section 2.1 (Geographical Coverage):

§ Marine conservation;

§ Habitat restoration and rehabilitation; and

§ Education and ecotourism.

Local non-profit making organisations (e.g. green groups, community bodies and academic institutions, which are incorporated in Hong Kong under the Companies Ordinance (Chapter 622 of The Laws of Hong Kong) or a body corporate which is registered in Hong Kong) are eligible to apply for funding to undertake projects relevant to the abovementioned environmental initiatives. Funding from MCEF will normally be awarded twice a year.

2.3.2 Fisheries Enhancement Fund

The FEF is intended to support the following environmental initiatives within the geographical coverage presented in Section 2.1 (Geographical Coverage):

§ Fisheries resources enhancement;

§ Sustainable development of the fishing industry; and

§ Education and fisheries-related tourism.

Local fishermen organisations and non-profit making organisations (e.g. green groups, community bodies and academic institutions which are incorporated in Hong Kong under the Companies Ordinance (Chapter 622 of The Laws of Hong Kong) or a body corporate which is registered in Hong Kong) are eligible to apply for funding to undertake projects relevant to the abovementioned environmental initiatives. Partnerships / co-operation between fishermen organisations and non-profit making organisations for relevant environmental initiatives are encouraged to optimise efforts for sustainable development of the fishing industry. Funding from the FEF will normally be awarded twice a year.

2.3.3 Proposed Fund Management Structure

To ensure the MCEF and FEF (each a ‘Fund’ and together ‘Funds’) will be operated and managed effectively, it is proposed that:

§ a steering committee (‘SC’) will be established to provide overall guidance to the management committees of the Funds to help ensure that sufficient resources will remain available for the Funds to meet their objectives; and

§ separate independent management committees will be established for each Fund.

Each management committee will:

§ advise on and monitor the effectiveness of the EE Plan;

§ assess the applications for funding to determine which applications meet the goals and objectives of the relevant Fund; and

§ make recommendations to the SC about which applications should be granted funding.

CAPCO, HK Electric and HKLTL will also provide secretarial services (or will procure the provision of secretarial services by an external third party) to the SC and the two management committees.

The management arrangement of the two Funds is illustrated in Figure 2.2 - Proposed Management Arrangement of the Two Funds.

Figure 2.2: Proposed Management Arrangement of the Two Funds

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2.3.3.1 Steering Committee

A steering committee (‘SC’) shall be established to provide overall directional guidance for the operation of the Funds to enable sufficient resources will remain available for the Funds to meet their objectives.

The SC will have not less than 5 and not more than 7 members comprising:

§ the Chairperson being a person appointed by CAPCO;

§ at least one, but no more than two, representatives from CAPCO;

§ at least one, but no more than two, representatives from HK Electric; and

§ the Chairperson of each Fund.

The major roles and responsibilities of the steering committee are to:

§ steer and review the operations of the Funds to ensure sufficient resources remain available for the Funds to meet their objectives;

§ oversee the management, operation and administration of the Funds;

§ having regard to recommendations from the Funds, approve applications for funding support;

§ oversee and review the overall funding position of the Funds; and

§ oversee and review the use of the Funds.

2.3.3.2 Management Committee for the Marine Conservation Enhancement Fund

An independent management committee for the MCEF (‘MCEF-MC’) shall be established to:

§ manage, operate and administer the MCEF; and

§ assess applications to ensure that funding shall be granted to studies and projects relevant and appropriate to the key themes and initiatives of the EE Plan related to the environmental initiatives discussed in Section 2.3.1.

The MCEF-MC will have not less than 7 and not more than 11 members comprising:

§ the Chairperson (who must not be a representative of CAPCO or HK Electric);

§ one representative from CAPCO;

§ one representative from HK Electric;

§ between four and eight members of the management committee shall be from a diverse background including relevant academics, green groups, relevant stakeholders (including community leaders and individuals with expertise/experience in similar funds).

The exact number of members of the MCEF-MC will be determined based on which candidates accept the appointment to the MCEF-MC.

The major roles and responsibilities of the MCEF-MC are to:

§ determine criteria for the selection of initiatives to be funded;

§ review and assess funding applications according to the established criteria;

§ recommend funding applications to the SC that meet the Fund objectives for approval;

§ monitor and review project outcomes, including the effectiveness of the approved applications in achieving the goals and objectives of the EE Plan; and

§ review operation and administration of the Fund and make necessary refinements/ adjustments to future funding focuses.

The draft terms of reference for the management committee for the MCEF is attached in Annex A – Draft Terms of Reference for the Marine Conservation Enhancement Fund Management Committee. The draft terms of reference will be approved by the MCEF-MC at its first meeting. The terms of reference will be reviewed as appropriate and, in any event, every three years.

2.3.3.3 Management Committee for the Fisheries Enhancement Fund

An independent management committee for the FEF (‘FEF-MC’) shall be established to:

§ manage, operate and administer the FEF; and

The FEF-MC will have not less than 7 and not more than 11 members comprising:

§ the Chairperson (who must not be a representative of CAPCO or HK Electric);

§ one representative from CAPCO;

§ one representative from HK Electric;

§ between four and eight members of the management committee shall be from a diverse background including representatives of major fishermen’s organisations and relevant stakeholders (including community leaders, academics and individuals with expertise/experience in similar funds).

The exact number of members of the FEF-MC will be determined based on which candidates accept the appointment to the FEF-MC.

The major roles and responsibilities of the FEF-MC are to:

§ determine criteria for the selection of initiatives to be funded;

§ review and assess funding applications according to the established criteria;

§ recommend funding applications to the SC that meet the Fund objectives for approval;

§ monitor and review project outcomes, including the effectiveness of the approved applications in achieving the goals and objectives of the EE Plan; and

§ review operation and administration of the Fund and make necessary refinements/ adjustments to future funding focuses.

The draft terms of reference for the management committee for the FEF is attached in Annex B – Draft Terms of Reference for the Fisheries Enhancement Fund Management Committee. The draft terms of reference will be approved by the FEF-MC at its first meeting. The terms of reference will be reviewed as appropriate and, in any event, every three years.

2.3.3.4 Secretariat

CAPCO, HK Electric and HKLTL will provide secretarial services (or will procure the provision of secretarial services from an external third party) to facilitate the operation of the Funds, the SC and the two management committees.

The major roles and responsibilities of the Secretariat are to:

§ provide secretarial services for:

o the management, operation and administration of the Funds, the SC and management committees including, without limitation, preparation of operational documents for approval, the appointment of members, and the holding and running of meetings;

o the application for funding process for each Fund;

o the ongoing monitoring of the progress of each successful project;

§ prepare dedicated website for the Funds and upload relevant materials to the website for uploading to the dedicated website, if any.

2.4 Membership of Management Committees

CAPCO, HK Electric and HKLTL will appoint members to:

§ the MCEF-MC in accordance with the requirements set out in Section 2.3.3.2 (Management Committee for the Marine Conservation Enhancement Fund); and

§ the FEF-MC in accordance with the requirements set out in Section 2.3.3.3 (Management Committee for the Fisheries Enhancement Fund).

Generally, the term of appointment for each member of a management committee will be 2 years.

2.4.1 Academic(s)

Academic(s) will be appointed as member of the MCEF-MC. The focus of academics will be overseeing the technical feasibility of projects, especially in the marine conservation, habitat restoration and rehabilitation themes. They will make use of their expertise to justify the proposed assessment for the measurement of project performance as well as to provide comments and advice that may enhance effectiveness of projects. They may also be invited to join the FEF-MC to provide balanced views on on-going fisheries operation and sustainable management and enhancement of fisheries resources.

2.4.2 Green Group(s)

Representative(s) from green groups will be appointed as members of the MCEF-MC. The focus of green groups will be to oversee the sustainability of projects, especially in the education and ecotourism / fisheries-related tourism theme and to provide insight on the potential benefits to the communities throughout the execution of the project.

2.4.3 Fishermen Organisation(s)

Representative(s) from fishermen associations will be appointed as members of the FEF-MC. The focus of fishermen organisations will be to oversee the need of the projects, especially in the fisheries resources enhancement and sustainable development of the fishing industry themes.

2.4.4 Relevant Stakeholder(s)

Community leader(s) as well as individuals with expertise / experience in similar funds may be appointed to the management committees to provide advice on the administration of the relevant Fund and to help streamline the implementation and management of the Funds. Other relevant stakeholder(s), such as members from fisheries trade business and aquaculture technology, may also be appointed to the FEF-MC to oversee the potential benefits of the projects in the fisheries related themes.

2.4.5 Representative(s) from CAPCO and HK Electric

There will be one representative nominated by CAPCO and one representative nominated by HK Electric on each of the management committees.

2.4.6 Membership List

The membership of the management committees for the MCEF and FEF are attached in Annex C.

2.5 Application Selection

The criteria for the selection of successful initiatives for funding will be formulated and agreed by the management committee of each Fund. In general, applications will be assessed based on:

§ the strength of their contribution to the objectives, especially the conservation goals discussed in Section 3, and the overarching aspects stated in Section 2.2;

§ the outcomes that will clearly benefit habitats and species and stakeholders (public, fishermen and other people related to fishing industry); and

§ what, if any, other themes will benefit from the grant of funding for the project set out in the application.

2.6 Implementation of the EE Plan

CAPCO, HK Electric and HKLTL have consulted with relevant stakeholders in preparing the EE Plan.

It is intended that:

§ the Funds will be established before construction of the Project commences;

§ during construction and operation of the Project, CAPCO, HK Electric and HKLTL will implement the EE Plan by approving and allocating funding to studies and projects that meet the goals and objectives of the EE Plan upon recommendations from the management committees of the Funds, subject to the HK$100 million not being already allocated to studies and projects.

CAPCO, HK Electric and HKLTL will implement the EE Plan to support the approval and allocation of funding to studies and projects that meet the goals and objectives of the EE Plan. Subject to receipt of the necessary regulatory approvals and statutory permits, CAPCO, HK Electric and HKLTL are aiming to have the Funds in place for the first round of applications by mid-2020.

2.7 Review and Evaluation of the EE Plan

To determine whether the EE Plan is successful in achieving the goals presented in Section 2.2 (Key Themes), the following mechanism for reviewing and evaluating the success of the EE Plan and supported initiatives will be established:

§ the management committee of each Fund will monitor the performance of the successful applications so as to make necessary refinements and adjustments to future funding focuses; and

§ performance indicators will be set and agreed between the relevant management committee of the Fund and the successful applicant having regard to the theme being supported by the funding.

Relevant information and update on the implementation progress of the EE Plan and the Funds will be made available in the dedicated website of the Project as appropriate.

3. Key Themes of the EE Plan

This Section identifies the key themes of the EE Plan for each of the MCEF and the FEF.

3.1 Marine Conservation Enhancement Fund

3.1.1 Goals and Objectives

The MCEF aims to achieve the goals set out in Section 2.3.1 (Marine Conservation Enhancement Fund) by supporting studies and initiatives relating to the following key themes:

§ Marine conservation: to conduct scientific research / monitoring for developing conservation action plans for marine biodiversity;

§ Habitat restoration and rehabilitation: to restore or rehabilitate habitats for enhancing marine biodiversity; and

§ Education and ecotourism: to promote environmental education and ecotourism for public awareness and appreciation of marine conservation.

The funding applications for each theme will depend on the breadth of the project / research interest. It is not possible to estimate funding allocation for individual themes at this stage. Funding for initiatives will be set out in funding agreements to be entered into between CAPCO, HK Electric and HKLTL and the successful applicants.

3.1.2 Potential Initiatives

3.1.2.1 Marine Conservation

The waters in the vicinity of the LNG Terminal are currently zoned as Proposed South Lantau Marine Park for the purposes of conservation, education and recreation. Funding may be provided for biodiversity monitoring programmes that are aimed at assisting the evaluation of the performance and effectiveness of this marine conservation area (and the nearby Southwest Lantau Marine Park). These programmes may include mid- to long-term Finless Porpoise and Chinese White Dolphin surveys (land-based, vessel-based and acoustic studies), fisheries surveys (studies on productivity and operations) and other ecological surveys (amphioxus and coral studies). Applications for funding for biodiversity monitoring programmes for other areas/ species of conservation importance/interest in southern Lantau, e.g. mangrove and sandflat habitats of Shui Hau and Pui O, horseshoe crab habitats and nursery grounds, key coral areas, etc., are also encouraged and may be supported to strengthen the scientific knowledge essential for the conservation of priority habitats and the preparation of new, and review of existing, species conservation action plans under the BSAP.

3.1.2.2 Habitat Restoration and Rehabilitation

Natural and artificial marine habitats of southern Lantau are facing challenges as some habitats have been degraded due to anthropogenic disturbances. Funding may be provided to support habitat rehabilitation programmes such as mangrove planting in Shui Hau and Pui O, coral transplantation pilot studies, artificial reef deployment in South Lantau waters, eco-enhancement retrofitting of existing artificial seawalls, initiated by applicants to enhance the ecological values of these habitats.

3.1.2.3 Education and Ecotourism

Awareness and appreciation of conservation and sustainable management and use of biodiversity is key to benefiting the community and the future generations. Funding may be provided to support education and eco-friendly recreational efforts focusing on marine and nature conservation in southern Lantau. Such efforts could include education programmes (e.g. academy for citizen scientists, ecotourism ambassadors), conservation campaigns (e.g. coastal clean-up, marine litter/ plastic survey), “green” dolphin watching or recreational fishing, etc.

3.2 Fisheries Enhancement Fund

3.2.1 Goals and Objectives

The Fisheries Enhancement Fund aims to achieve the goals set out in Section 2.3.2 by supporting studies and initiatives relating to the following key themes:

§ Fisheries resources enhancement: to enhance fisheries resources by managing fishing effort, restoring degraded nursery and spawning habitats or through resource enhancement;

§ Sustainable development of the fishing industry: to support the local fishing industry to move towards sustainable operations for enhancing overall competitiveness and cope with new challenges; and

§ Education and fisheries-related tourism: to promote education and tourism relevant to the local fishing industry for public awareness and appreciation.

The funding applications for each theme will depend on project / programme interest. It is not possible to estimate funding allocation for individual themes at this stage. Funding for initiatives will be as set out in the funding agreements to be entered into between CAPCO, HK Electric and HKLTL and the successful applicants.

3.2.2 Potential Initiatives

3.2.2.1 Fisheries Resources Enhancement

The southern waters are recognised as a spawning ground and nursery area and some parts of southern waters are fishing grounds with moderate to high commercial values (e.g. Soko Islands, Cheung Chau, Lamma). Funding may be provided to support fisheries resource enhancement programmes, for example, artificial reef deployment in southern waters, fish fry / fingerlings release in southern waters, voluntary surveillance to deter illegal fishing activities.

3.2.2.2 Sustainable Development of the Fishing Industry

To support the local fishing industry to move towards sustainable or high value-added operations so that the trade can enhance its overall competitiveness and cope with new challenges, funding may be provided to support studies that explore and examine practical management measures that if implemented might enhance the sustainable use of fisheries resources.

Examples of projects and studies that may be supported include:

§ studies looking at fishing gear and method modification to reduce capture of non-target species and fish fry, the identification of seasonal fishing grounds which may be species‐specific and warrant control and management, measures to support the management of catch of particular locally endangered/ vulnerable species;

§ development of alternative livelihoods by shifting traditional fisheries operations to aquaculture, technology development, product marketing and knowledge transfer; and

§ equipment improvement programmes (e.g. environmentally friendly engines for fishing vessels, green materials for raft construction) may also be considered to allow fishermen to be self-reliant, improve their livelihood and their ability to cope with the changing operating environment.

3.2.2.3 Education and Fisheries-related Tourism

Awareness and appreciation of the local fishing industry is key to benefiting the community and the future generations. Funding may be provided to support education and tourism efforts focusing on the fishing industry. Such efforts could include education programmes (e.g. fishermen training programmes) or recreational fishing, etc.

([1]) DevB and CEDD (2017) Sustainable Lantau Blueprint. June 2017. 55pp.

([2]) Environment Bureau (2016) Hong Kong Biodiversity Strategy and Action Plan 2016-2021. December 2016.