Approval for outside seating is a bureaucratic nightmare

It goes without saying that bureaucracy is alive and well within the Hong Kong government. But it is particularly egregious with respect to the process for getting approval for outside seating accommodation (OSA) for bars and restaurants.

You would have thought OSA was an easy win-win situation for the government. People like it and it’s good for businesses since it helps to boost turnover. Indeed it’s also good for the civil service too since it requires  civil servants to administer the process.

But speak to any restaurant or bar owner and they will tell you that trying to get OSA approval  is a bureaucratic nightmare requiring vetting by no less than seven government departments and a waiting period of more than two years in some cases.

The Food and Environmental Hygiene Department which coordinates the approval process says it only takes that long when there are objections and complications. Indeed FEHD says that the ‘standard’ processing time is 53 working days for approval but as a result of recent ‘streamlining’ it is now 46 days. These figures appear to be highly theoretical and were greeted with disbelief by those in the industry. FEHD’s figures show that in practice these processing times are rarely if ever achieved. Its figures for 2012, of example, show that successful applications took between 3-20 months  with 10 months the average.

The number of applications for OSA has been falling over the years along with the rate of approvals. In 2010, 43 per cent of applications were approved, in the first half of 2013 only 17 per cent of applications were approved. There were 405 applications for OSA between 2009 and the first half of 2013. Of these 106 were approved, 90 rejected while 109 applicants, almost half, abandoned the process. The FEHD says that OSA applications involve a host of issues such as land use rights, the impact on nearby residents and  traffic arrangement among others. It is therefore “necessary for FEHD to make referrals to six departments.”

One OSA application seen by this website was submitted in August last year but the owner didn’t hear back from the FEHD until January 2015, five months later, with requirement from the Fire Services. Three months later, in May, the owner received a letter from the FEHD saying that comments from other departments were still pending. In September he received another letter from FEHD noting there had been no objections from departments but with a list of requirements. This has taken 15 months so far despite the absence of objections and the outlets  location on the first floor of a privately-owned building in an area devoted to food outlets.

In Sai Kung there are cases where the process has taken more than two years. The approval process also appears arbitrary. Five or six restaurants in the same location are granted OSA while another at the same location is rejected because of objections from residents.

“If I had known it was going to be this hard, I wouldn’t have got involved in the first place,” said one owner. He had rented a location in Sai Kung on the basis that OSA would make it economically worthwhile. In the event it has turned out to be a highly stressful project.

The lengthy time period to process OSA applications has spawned an active business for third party operators who charge  about HK$25,000 to process the restaurant license together with an OSA application.

In December 2012, the French and American Chambers of Commerce took the industry’s complaints to the Business Facilitation Advisory Committee (BFAC) which reports to the Financial Secretary.

This body was set up in 2006 to improve the competitiveness of local businesses according to its website by, “cutting red tape, removing unnecessary regulatory barriers, improving regulatory efficiency and reducing business compliance costs.” If this sounds too good to be true –  it is.

The OSA application process was taken up by the BFAC’s Food Business and Related Services Task Force. It set up a working group comprising representative from the seven departments that vet OSA applications.

In October 2013, the working group came up with 10 recommendations for speeding up the process.

The recommendations  amounted to little more than minor tinkering with the existing arrangements.  OSA applications still have to go to the FEHD and the six other departments. However one improvement of note is that where there is no vehicle traffic as is the case when outlets are  located on the roofs, podiums or upper floors of a building, applications will now no longer have to go to the Transport Department.

In July the BFAC announced the recommendations had all been implemented and in a statement said, “The FRSTF appreciates the implementation efforts of the departments concerned and welcomes all the improvement measures to facilitate alfresco dining operation.”

However while the bureaucrats are patting themselves on the back for the alleged improvements to the process, those in the industry have noticed little difference.

If the BFAC was serious about cutting through red tape then it should have rethought the whole process by which bars and restaurants are licensed and the zones where they are allowed to operate. The current system is a bureaucratic boondoggle and it is holding back these businesses rather than facilitating them. Hong Kong’s ‘can do’ spirit  is increasingly becoming a ‘can not do’ spirit led by the civil service.

3 thoughts on “Approval for outside seating is a bureaucratic nightmare

  1. gweiloeye

    Howard please keep up the pressure on these fools. Other than rent the second biggest killer of bar and restaurant businesses is the combination of Grey shirts of the FEHD, district councils and all the other departments of stupidity. KTown is getting hammered every second day by them. Bulldogs became a non profit after the outdoor seating was removed. Dare i say another straw on Paul Buxtons (RIP) back?

  2. captam

    There are thousands of restaurant and bars allowing drink and eating outside and with seating too…………. without getting OSA endorsements. The trick for owners is knowing how to “manage” it skillfully and get away with it. How about all those LKF bar owners which you Howard are always keen to protect from “club 7-11’s”. They sell drinks to their customers who then move just outside, blocking all the street and pavements. What’s the difference?

    The FEHD have legal difficulties ( thank God! ) bringing prosecutions against those who infringe and usually only resort tothe issue of threatening “warnings” and then only if someone makes a complaint. This is because of the wording of the regulations. There is an offence about operating an unlicensed restaurant but FEHD can hardly press this charge if the establishments actually has a licence. Next possible argument might be serving food or drinks outside the specified plan of the licensed premises. But a smart lawyer can defend this on the grounds that it is no different to take away deliveries. Then we come to serving alcohol…….. the liquor licence ( if they now bother to apply for one) permits the “consumption of alcohol on the premises” . If it is consumed outside the legal area “it is no longer “on the premises” so the police again have trouble proving “alcohol is being sold illegally “on the premises”. Thousands of little stores sell beer and then this is drunk on little stools and tables outside the store or food shop. The police do not even bother to stop this because they know realistically they can’t. This is why many smart restauranteurs these days find it easier to be unlicensed. Cheaper to pay the fines for operating illegally and if necessary move on by the time the local FEDS shut you down. And how about the subject of “private kitchens” then Howard? Do you think these guys have any licence?

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