The discovery of explosive devices, a firearm, ammunition and weapons, as well as separate arson attacks on court buildings, suggest that the unrest in Hong Kong could yet take on a nastier tone, notwithstanding a recent lull in violence. Businesses should be mindful of these risks.

A Short Lull

The extreme violence at the university “sieges” between 9 and 19 November 2019 subsided ahead of the District Council elections on 24 November. These elections resulted in a stinging defeat for the pro-government camp, which saw its worst results in many years.

The lull continued until a Police-permitted march on 9 December, organised by the Civil Human Rights Front (“CHRF”). That largely peaceful rally drew perhaps, 450,000 people, highlighting again the level of support that protesters enjoy.

Other events hinted at the risk of further violence, though. On 8 December, ahead of the CHRF march, the Police arrested eleven people for possession of a Glock semi-automatic pistol, ammunition, a samurai sword, extendable batons and pepper spray.

Protesters also threw petrol bombs at the High Court building in Admiralty on the evening of the march and vandalised the Court of Final Appeal. That attack followed a similar one against the Sha Tin Law Courts building on 13 November. Many cases of rioting and related offences are yet to be tried.

The Police also found and defused two improvised explosive devices (“IEDs”) in the grounds of Wah Yan School in Wanchai on 9 December. These IEDs contained about 10kg of explosives, nails for use as fragmentation, and a mobile phone-based system.

The IEDs resembled a device found in Mong Kok on 13 October, which also relied on mobile phone-based activation. Such a detonation system allows for remote targeting, suggesting that the IEDs were to be aimed at the Police.

The Protests

The pan-democrat victory in the district council polls has made clear the intensity of anger towards the government, and, for some, has vindicated the violence and disorder of recent weeks. The movement has been emboldened, and the prospect of compromise on its five demands is now slim. These demands may conceal much wider goals.

The lull has also raised questions, as to whether a more effective system of “command and control” of the movement is emerging. Indeed, the depth of organised support for the protest movement, provided by medics, and others providing logistics, is becoming clearer.

The Government

For its part, the Hong Kong government has done little to alleviate the situation, which clearly demands a political solution. Rather, the authorities seemed stunned by the overwhelming defeat at the polls.

Of course, the Hong Kong government is hemmed in by Beijing. However, a reported restructuring of the Hong Kong and Macau Affairs Office (“HKMAO”) and the Central Government Liaison Office in Hong Kong may mean that this inaction could precede a policy shift.

The central government may yet countenance the resignation of Chief Executive Carrie Law Cheng Yuet-ngor, or other unpopular Ministers. Certainly, angry criticism from the pro-government Democratic Alliance for the Betterment of Hong Kong (“DAB”) has hinted as much.

In the interim, though, the police must continue to handle the unrest, and particularly the intensive social media campaign targeted against them.

The lull has provided a welcome respite, but the strain of dealing with such widespread and lengthy disorder is taking a toll on workaday policing. The number of cases solved has fallen precipitously, leaving space for criminal and triad society elements.

A bombing campaign targeting Police or Government would only add to pressure, perhaps forcing changes in procedures that further undermine day to day policing, and again distance the Police from the people.

A sustained bombing campaign might also prompt Beijing to intervene more directly through the People’s Armed Police (“PAP”) or People’s Liberation Army (“PLA”) already stationed in Hong Kong.

International Involvement

The failure to resolve the conflict also allows for its internationalisation, adding an additional level of complexity.

After all, the lull in violence clearly assisted the passage in November of the Hong Kong Human Rights and Democracy Act in the US, which obliges the American authorities to link an annual assessment of Hong Kong’s autonomy to retention of preferential trading access.

The US authorities have thereby clearly chosen sides, and in doing so have tied Hong Kong to much broader concerns in the US China relationship.

Elements from Taiwan are also meddling, in an effort to discredit the “one country, two systems” model, and to bolster the prospects of the Democratic Progressive Party (“DPP”) of President Tsai Ing-wen in January 2020 polls. Taiwanese involvement risks linking unrest in Hong Kong to the question of Taiwan, though, which is perhaps the most neuralgic issue in Chinese politics.

The Outlook

The situation in Hong Kong thus remains risky. Divisions in Hong Kong society have intensified, with both sides demanding allegiance – as “yellow” or “blue”.

The lull in violence does not mean that the unrest has subsided. Rather, it remains hostage to events. Triggers, such as rulings by courts, could easily reignite protests, vandalism, and attacks on perceived opponents, particularly given an enhanced degree of “command and control” over the movement.

Weapon seizures also underline how radicals linked to the protest movement could yet morph into a small insurgency; any use of IEDs would have major implications for Hong Kong’s stability. For now, the Hong Kong police appear able to act on intelligence, and to contain the threat.

Looking forward, the authorities seem likely to take steps to forestall further instability. Such measures could include concessions, such as the departure of government ministers or the Chief Executive.

They may also implement harsher measures, too, such as efforts to curtail some encrypted communications, more arrests, intelligence operations aimed at preventing violence or covert initiatives with mainland security services to disrupt the movement, and further use of force.

What to do

Businesses must be mindful of these threats. Key actions to mitigate risk might include:

• Re-assessment of contingency plans to take account of the rising physical threat.
• Establishment of plans to deal with sudden transport disruptions.
• Human resource initiatives that seek to encourage staff to leave politics at home.
• Development of redundancy within existing communications systems.
• Tighter management of social media and advertising, so as to limit the prospect of inadvertently provoking a boycott, or even attacks on premises.
• Consideration of how attacks on the judiciary and court system might affect operations.
• Large companies that rely heavily on operations in Hong Kong may wish to disperse certain capabilities around the region.
• Preparation of plans to handle bomb threats, or to respond to the actual use of explosive devices in Hong Kong.

SVA (www.stevevickersassociates.com) is a specialist risk mitigation, corporate intelligence and risk consulting company. The firm serves financial institutions, private equity funds, corporations, high net-worth individuals and insurance companies and underwriters around the world.

SVA has a dedicated crisis management team which, for our retained clients, stands ready to assist companies during crisis situations. Retained clients pay an annual fee for a 24-hour response capability.

SVA is based in Hong Kong and is the only firm with the local and senior expertise drawn from Intelligence, Operations and research functions of the former Royal Hong Kong Police Force.