CONSTITUTION OF THE CARRIER LIAISON GROUP (CLG)

Terms of Reference of The CLG

To keep abreast of developments in the facilities of air cargo and mail transportation within air cargo industry.

To promote the interests of all members and to provide a continuing means of representing the collective views of all members on matters related to air cargo, mail, courier and express cargo handling.

To monitor the performance of Cargo Terminal Operators (CTO) which will include service level achievements and their plans in respect of operations, facilities and expansion affecting the airlines on a common basis.

To work closely with Airport Authority and to represent airlines' interest on matters related to air cargo, mail, courier and express cargo handling.

To work closely with Airline Operators Committee (AOC) and to promote the safe and efficient operation of air cargo, mail, courier and express cargo at the airport.

To work under Board of Airline Representatives (BAR) for the purposes of major policy matters of Chek Lap Kok (CLK).

To liaise with Ramp Handling Operators (RHO), Hongkong Association of Freight Forwarding Agents Limited (HAFFA), Hong Kong International Couriers Association (HICA), Hong Kong Shippers' Council (HKSC), Agriculture & Fishery Department, Airport Authority, Civil Aviation Department, Customs & Excise Department, Health Department, Police, Post Office, Trade Department, Mines Department and all other bodies which have an interest in the safe and efficient operation of air cargo, mail, courier and express cargo in Hong Kong.

To promote the paper-less environment through the use of electronic data interchange (EDI).

Membership

Members shall be those airlines who operate services through Hong Kong and their ground handling agent.

CLG Executive Committee

CLG Executive Committee shall consist of seven individuals each representing one member.

An annual election for CLG Executive Committee members will be held at the Annual General Meeting in March and those elected will serve during the period from 1 April to the following 31 March. A voting form will be sent to each eligible member not later 15 days before the Annual General Meeting. The CLG Secretary is responsible for ensuring that the correct number of forms is distributed. The election will be decided by a simple count taken from the voting forms.

CLG Executive Committee members shall be eligible for re-election.

CLG Executive Committee meeting shall be held as circumstances demand but normally once every TWO months.

Five votes in favour of any motion shall be required to reach a decision.

Officers of the CLG

Officers of the CLG shall be elected from members of CLG Executive Committee. CLG Executive Committee shall elect a Chairman, Secretary and Treasurer by majority vote. The Secretary shall act as Deputy Chairman. All members of CLG Executive Committee shall be present at this election.

Annual General Meeting of the CLG

Annual General Meeting of the CLG will be held in March. The CLG Secretary will send the notice of meeting to all members not later than 15 days before the meeting.

Voting

One-third of the CLG members shall constitute a quorum. Each member shall have one vote.

Decision shall, unless it is specifically agreed upon otherwise at any time, be made on a simple majority vote provided that a quorum exists.

Dissenting members are not considered bound by majority vote where a decision made would be the contrary or is considered contrary to the Head Office policy of the company concerned.

Fees

Each member shall subscribe HK$1,000 annually to the CLG through its Secretary. This subscription shall be paid by the end of January of each year.

Expenses

Unless otherwise approved by the CLG, expenses shall be limited to matters of petty cash and if any single item is in excess of HK$500 or such amount as can be subsequently decided, it shall be supported by receipts and justification by the Chairman.

Technical Work Group (TWG)

To monitor the performance of Cargo Terminal Operators (CTO), three Technical Work Groups will be appointed by CLG Executive Committee, namely TWG (HACTL), TWG (CPSL) and TWG (AAT), to deal with the day-to-day operational matters.

The Chairman of TWG (HACTL), TWG (CPSL) and TWG (AAT) will report direct to CLG Executive Committee. They will attend CLG Executive Committee meeting.

Sub-Committee

The CLG may set-up Sub-Committee when and if necessary. Officers and members of each Sub-Committee will be nominated by CLG Executive Committee which may also co-opt other airline employees when considered necessary. The Chairman of any Sub-Committee will report direct to CLG Executive Committee.

Observers

Observers at CLG meeting shall be permitted at the discretion of the Chairman of the CLG.

Amendments

Proposals for amendment to this Constitution shall be lodged with the Secretary at least 30 days prior to any meeting and the Secretary shall promptly inform all members. A majority of two thirds of the members shall be necessary for approval thereof.

Liability

Should any liability or debt be incurred, this shall be the joint responsibility of the CLG entire membership unless liability or debt is incurred through proven gross negligence or recklessness on the part of the office Bearers.

Code of Conduct

1. Purpose of the Code of Conduct

Carrier Liaison Group ("CLG") Members and Members' employees and representatives attending CLG functions or participating in CLG activities or accessing information provided by CLG to its Members, must ensure at all times that the conduct of each Member and its employees and representatives comply with appropriate governance standards, legal and professional. Each Member will ensure that its employees are fully briefed on its corporate governance requirements prior to engaging or participating in any CLG activities.

At the same time, CLG itself has promulgated the following governance and Code of Conduct standards, compliance with which is mandatory. It is the policy of the CLG to comply with the letter and spirit of all relevant laws, including where applicable antitrust or competition rules ("competition rules"). This Code of Conduct sets out the minimum compliance standards to be followed by CLG members and their employees and representatives ("Participants") in relation to all their activities within CLG (e.g. participation in meetings, committees, sub-committees, working groups etc.) in order to ensure that any such activity does not raise risks of violating any applicable competition rules.

Non-compliance with the Code of Conduct may result in breaches of local or foreign competition rules, with heavy fines against participants as well as sanctions for individual employees (including jail sentences in some countries). Strict compliance by all Participants is therefore required. All Members accept and commit to familiarize themselves and their employees and representatives fully with this Code of Conduct, which forms part of CLG's Constitution, before they engage or participate in any CLG activity.

2. Principles and rules

Generally trade association activities and exchanges of information are accepted under competition rules where they promote the competitiveness of the industry and lead to higher technical and industry quality standards for the benefit of consumers. Information sharing and negotiations between competitors and potential competitors may however be of concern under competition rules when they lead to collusion and reduce existing or future competition. To avoid such risks, Participants will need to comply with the principles and rules set out in this Code of Conduct as well as their own organization's corporate governance requirements.

2.1 General principles

Participants shall comply with the following general principles in respect of all their activities within CLG:

Participants' commercial decisions must be made unilaterally and independent from that of their competitors. Participants will not engage in express or tacit agreements, understandings to reduce competition or any form of collusion.

Discussions with the object or effect of reducing competition between Participants or from a third party (i.e. non-CLG member) must be absolutely avoided. Participants will not take any action with the intent of obtaining a participant's agreement to refrain in any way from competing.

Participants will have regard to each Member's own confidentiality policies. It is the responsibility of each Member to let all Participants know of applicable confidentiality obligations when exchanging information.

The following rules shall be followed whenever Participants attend meetings within the CLG. This applies to all meetings organized within the framework of the CLG, including meetings of the Executive Committee, Technical Working Groups, Cargo Information Exchange Scheme Committee, and the Dangerous Goods Working Group.

Information is likely to be commercially sensitive if (i) in the normal course of business, the disclosing participant would not wish the other participants to have that information, or (ii) the exchanged information is not in the public domain and could influence a commercial decision or strategy of the other participants or (iii) a customer or supplier may object to the exchange of that information (for example because they have concluded a non-disclosure agreement with a participant).

Commercially sensitive information typically includes non-public information relating to recent, current and future: selling prices, fares, rates, etc.; costs (including cost structure), supplier prices and conditions, agent and forwarders commissions or fees etc.; frequencies; capacity, marketing plans, strategy, salaries and working conditions; product development plans; and detailed commercial information on relations with individual customers, competitors and suppliers.

2.3 Exceptional rule for the establishment of certain projects

Some exceptional circumstances may require that participants exchange or rely on commercially sensitive or confidential information for the establishment of a common project. However, the necessity of exchanging information on each of these topics will have to be carefully examined on a case-by-case basis before any information is exchanged, since each specific project will be different. Appropriate safeguards will be put in place on an ad hoc basis, including in the form of confidentiality agreements, reliance of an independent third party which will keep the information confidential, etc. The CLG and its Members will seek legal advice where required.