The government should keep a full record of the existing conditions of private columbariums to be licensed. Photo: David Wong

Too-lenient rules for private columbariums expose consumers to exploitation

Francis Neoton Cheung says the proposed law should use stricter exemptions and impose oversight

While public attention has been rightly absorbed by the ongoing strife over electoral reform, it would do well to keep one eye on the government's long-overdue efforts to regulate private columbariums as the Legislative Council has recently started scrutinising the bill introduced in June. After all, the legislation will affect where many of us will "occupy" long past our lifespan.

I have guided the development of several private columbariums, and the experience has given me an appreciation of the urgent need for industry regulation to boost transparency and consumer confidence in private columbariums. Ultimately, this can spur investment and increase supply to meet long-term demand.

The most controversial and confusing aspect of the bill revolves around the proposed exemptions for all the so-called "pre-bill" private columbariums, which would potentially be given up to six years to upgrade their facilities to meet all the requirements. They will be granted a "temporary suspension of liability" to continue operations but are prohibited from selling new interment rights until they have become properly licensed.

Whenever new regulatory regimes are put in place, exemptions are often needed to avoid widespread upheavals in the marketplace. Yet, the terms should not be so lenient that operators can drag their heels in bringing their facilities up to standard. Worse, some operators with no hope or intention of becoming licensed may try to pull a fast one over unsuspecting consumers.

More fundamentally, exemptions can only work properly if the government knows who is out there to exempt. In other words, it must have in hand an exhaustive list of operators, especially those that are non-compliant. Unfortunately, this is not the case. When the Private Columbaria Bill was first released, the government launched a voluntary "notification scheme" whereby operators were asked to provide basic details about their facilities and promise not to sell any more interment rights until they have been licensed, if ever.

As can be expected, unscrupulous operators with little incentive to upgrade their facilities have been taking full advantage of this period of regulatory limbo by telling prospective customers that prices will go up when regulation comes into effect, thereby enticing them to put down their money now. Instead of reining in fraudulent practices to help build consumer confidence, the government's path to regulation has ended up putting at risk those grieving for the loss of loved ones.

Yet, concerns about rising prices are not completely unfounded. As the licensing board envisioned in the bill will not start work until the law comes into effect, there will inevitably be an initial shortage of licensed private columbariums.

To protect consumers in the lead-up to the start of regulation, the government should do three things at least. One is to step up consumer education so people do not fall prey to misinformation so easily. Second, a task force should be established to keep a full record of the existing conditions of those non-compliant private columbariums. Third, the Food and Environmental Hygiene Department should begin to pre-process licensing applications to avert any supply vacuum.

The actual scope of regulation can also be extended to increase consumer protection and confidence in the industry. For instance, the bill only regulates the sale of interment rights, but not the long-term management of the niches. To properly protect consumers, the ordinance should require operators to set aside 10-15 per cent of the proceeds from the sale of interment rights in a separate management and maintenance fund. This would give consumers the peace of mind that the cremated remains of their ancestors and loved ones would be well taken care of.

Consumers can also benefit from standardised terms in contracts and sales and marketing materials.

While regulation is an important first step, the government must also remove obstacles to the tedious and tortuous planning approval process so potential investors know what to expect.

Equally important, the government needs to help sweep away the gloomy image of traditional facilities that most would prefer to be located "not in my backyard". They can do this by developing public columbariums that follow the example of modern private facilities, some of which come with elegant facades and ancillary indoor facilities such as libraries, museums and lecture halls. These features collectively transform the columbarium building into a community complex that can be enjoyed throughout the year and welcomed by the local community.

This article appeared in the South China Morning Post print edition as: Too-lax rules for private columbariums expose consumers to exploitation