Hansard, 2002-07-08

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: NameFromTo (2002)(2002) Dr John Chen28 May1 Jun Mdm Halimah Yacob29 May30 May 4 Jun22 Jun Mdm Cynthia Phua29 May30 May Dr Warren Lee29 May31 May Mr Sin Boon Ann30 May1 Jun 4 Jun12 Jun Mr Lim Boon Heng2 Jun3 Jun 17 Jun19 Jun Mr Inderjit Singh4 Jun7 Jun 9 Jun16 Jun Mr Hawazi Daipi5 Jun12 Jun 19 Jun21 Jun 12 Jul14 Jul Mr Ong Kian Min5 Jun14 Jun 27 Jun29 Jun 2 Jul6 Jul Mr Ahmad Md Magad6 Jun12 Jun Dr Michael Lim6 Jun9 Jun 28 Jun1 Jul 9 Jul10 Jul Mr Raymond Lim4 Jul7 Jul Mr Wee Siew Kim8 Jun9 Jun 14 Jun19 Jun 13 Jul14 Jul Mr Charles Chong8 Jun10 Jun 24 Jun25 Jun 2 Jul- Mr Lim Swee Say9 Jun11 Jun 17 Jun20 Jun Mr Arthur Fong10 Jun14 Jun Mr Loh Meng See10 Jun16 Jun 25 Jun2 Jul NameFromTo (2002)(2002) Mr Yatiman Yusof10 Jun21 Jun Dr Amy Khor11 Jun15 Jun Mr Chan Soo Sen11 Jun17 Jun Mr Davinder Singh11 Jun17 Jun 24 Jun25 Jun 27 Jun28 Jun Mr Ahmad Khalis11 Jun19 Jun Miss Indranee Rajah13 Jun- Mr Mohamad Maidin BPM13 Jun22 Jun Mr Low Thia Khiang13 Jun20 Jun Dr Lily Neo15 Jun23 Jun Prof S Jayakumar16 Jun20 Jun 30 Jun2 Jul 7 Jul19 Jul Dr Mohd Maliki Osman16 Jun20 Jun Mr Gan Kim Yong19 Jun22 Jun Mr Ang Mong Seng18 Jun19 Jun Mr Chay Wai Chuen19 Jun25 Jun Ms Penny Low21 Jun7 Jul Ms Irene Ng21 Jun24 Jun 12 Jul14 Jul Dr Wang Kai Yuen22 Jun3 Jul Mr Mah Bow Tan23 Jun1 Jul 16 Jul20 Jul 26 Jul31Jul BG George Yeo23 Jun2 Jul 5 Jul7 Jul Dr Low Seow Chay24 Jun26 Jun A/P Yaacob Ibrahim25 Jun27 Jun 28 Jun1 Jul Mr Wong Kan Seng26 Jun2 Jul Mr Tharman Shanmugaratnam27 Jun3 Jul Mr S Iswaran1 Jul4 Jul 23 Jul25 Jul Dr Ong Chit Chung4 Jul5 Jul Mr Lim Hng Kiang4 Jul7 Jul Dr Warren Lee 6 Jul 8 Jul (am)6 Jul 8 Jul (am)8 Jul (am) Mr K Shanmugam8 Jul26 Jul RAdm Teo Chee Hean9 Jul- 21 Jul29 Jul Mr Cedric Foo9 Jul- NameFromTo (2002)(2002) Mr Leong Horn Kee10 Jul17 Jul 19 Jul21 Jul Dr Teo Ho Pin10 Jul13 Jul Dr Tan Cheng Bock11 Jul17 Jul Mr David Lim12 Jul14 Jul A/P Koo Tsai Kee12 Jul14 Jul Mr Abdullah Tarmugi14 Jul16 Jul Dr Lee Boon Yang26 Jul2 Aug Mrs Yu-Foo Yee Shoon27 Jul5 Aug ABDULLAH TARMUGI Speaker Parliament of Singapore

Order. On 5th April 2002, Parliament resolved in accordance with the Fourth Schedule of the Constitution of the Republic of Singapore that there shall be Nominated Members of Parliament (NMPs) during the term of the present Parliament. The Special Select Committee was constituted on 11th April 2002 and its Report was presented to Parliament on 18th June 2002 as Parl 2 of 2002. The Special Select Committee nominated the following nine persons to the President for appointment as NMPs: Ms Braema Mathiaparanam; Mr Chandra Mohan K Nair; Mrs Fang Ai Lian; Dr Gan See Khem; Dr Jennifer Lee Gek Choo; Ms Olivia Lum Ooi Lin; Mr Ng Ser Miang; Assoc. Prof. Ngiam Tee Liang; and Mr A Nithiah Nandan. On 2nd July 2002, President S R Nathan, by Instruments of Appointment dated 2nd July 2002, appointed the nine Members as NMPs for a term of two years with effect from 2nd July 2002. The Nominated Members are present today to take their seats. They will now take their oath or affirmation of allegiance.

The following Members took and subscribed the Oath of Allegiance, or made Affirmation of Allegiance, in the order below: Ms Braema Mathiaparanam (Nominated Member of Parliament); Mr Chandra Mohan K Nair (Nominated Member of Parliament); Mrs Fang Ai Lian (Nominated Member of Parliament); Dr Gan See Khem (Nominated Member of Parliament); Dr Jennifer Lee Gek Choo (Nominated Member of Parliament); Ms Olivia Lum Ooi Lin (Nominated Member of Parliament); Mr Ng Ser Miang (Nominated Member of Parliament); Assoc. Prof. Ngiam Tee Liang (Nominated Member of Parliament); and Mr A Nithiah Nandan (Nominated Member of Parliament).

I welcome the Nominated Members of Parliament and look forward to their participation in the proceedings of this House.

asked the Minister for Transport why has the Public Transport Council approved fare increases by the bus and train operators in view of the present economic difficulties faced by many Singaporeans.

asked the Minister for Transport (a) what is the Public Transport Council's (PTC) justification for the increase in bus and MRT fares during such difficult times, when there are expected increases in car parking charges and goods and services tax and when the transport companies are still reporting very decent profits and (b) whether deferring the PTC's increases by six months to a year will put the operators under water.

asked the Minister for Transport if he (a) is satisfied that the transport companies' justification for fare hike is to meet rising operating cost; (b) will elucidate, in the light of a lower corporate tax, reasonably stable oil prices, cut-back in Government charges and lower unit labour cost, the factors causing the operating cost to increase; and (c) will state what have the companies done to improve their cost effectiveness and productivity instead of raising fares to maintain their profitability.

asked the Minister for Transport if he will consider liberalising the transport sector to allow for more service providers to come in to further enhance competition and more efficient management of resources and hence reducing the public transport cost.

Mr Speaker, Sir, Question Nos. 1 to 4 pertain to the recent transport fare increases approved by the Public Transport Council. Members would like to know the justification for such a decision and whether they could be avoided. Since those Questions were filed, Mr Tan Soo Khoon and several others have tabled a Motion on Public Transport Fares, which is scheduled for debate this afternoon. With your permission, Sir, and the Members' understanding, my Minister would like to answer the four Questions during the course of the debate on the Motion, please.

It is a rather unusual request, but I will allow the Minister to reply to the Questions when he speaks on the Motion.

asked the Minister for Foreign Affairs as the Malaysian Prime Minister is going to step down before the end of next year, does his Ministry envisage any significant change in the direction of Malaysia-Singapore relations over the next few months and what will be the shape of Malaysia-Singapore relations over the long term after he has stepped down as Prime Minister.

asked the Minister for Foreign Affairs if he will provide an assessment of the impact on bilateral relations with Malaysia resulting from Dr Mahathir's intended resignation and the change of political leadership.

Mr Speaker, Sir, with your consent, could I respond to Question Nos. 5 and 6 together, on behalf of the Minister?

Yes.

Sir, the Members have asked about the immediate and long-term impact of Dr Mahathir's resignation on Singapore-Malaysia relations. In comments to the media on 1st July 2002, DPM Dr Tony Tan and DPM Lee Hsien Loong had both emphasised that Dr Mahathir's decision to step down in 2003 would not affect our bilateral relations with Malaysia. I fully agree. The three previous leadership changes in Malaysia had been smooth and orderly. There is no reason to expect that this transition will be any different. Dr Mahathir remains Prime Minister until after the OIC Meeting in Kuala Lumpur in October 2003. He has confirmed Deputy Prime Minister Datuk Seri Abdullah Badawi as his successor. DPM Badawi is well known to us. We see no reason for any significant change in bilateral relations either immediately or in the long-term. The fundamentals of Singapore-Malaysia relations are not dependent on personalities. As close neighbours, we will work with whoever is in charge.

asked the Deputy Prime Minister and Minister for Finance (a) what steps will the Government take to enhance security of bank depositors' accounts and to prevent erosion of confidence in electronic and on-line banking in the light of several recent hacking incidents and (b) whether the Government will introduce harsher penalties as deterrent to such acts.

Mr Speaker, Sir, MAS has promulgated security guidelines on electronic and internet banking for the banking industry. The security standards which banks have to comply will include: i) maintaining robust risk management controls and security practices; ii) deploying strong cryptography to protect customer data; and iii) enhancing surveillance, incident response and systems recovery capabilities. As part of the audit and internal monitoring process, auditors have a duty to evaluate bank compliance with these security guidelines. MAS also maintains its own programme of on-site inspections and off-site reviews. Banks are required to assess the risks relating to their on-line banking products and adopt appropriate security control measures to address and mitigate the risks involved. They are directly responsible for the safety and soundness of the services and systems they provide to their customers. Internet banking, as with other forms of on-line banking, is not without risks. These risks generally relate to impersonation, stealing ID or PIN information, computer hacking, forging access to accounts and fraudulent transactions. The safety of on-line banking is dependent on the security systems of the bank and the precautions that customers take to safeguard their User ID and PIN, as well as protecting the PCs they use. For example, customers should install firewall and anti-virus software on their PCs to block out hackers, and log off their computers when not in use. Regarding the recent hacking incident, which affected a number of DBS customers, the Police are still carrying out their investigation. According to DBS, which has been conducting its own internal investigation, its findings were that the bank's own Internet system had not been hacked, but it was the customers' PCs which had been hacked. By accessing the customers' PCs, the hacker(s) had been able to capture the PINs and IDs of these customers. The hacker(s) then used the captured customer information to access their accounts to make fraudulent withdrawal transfers. The Police and DBS have advised the public on certain precautionary measures to take and good security practices to adopt when conducting on-line banking. Penalties for hacking into bank systems are already prescribed in the Computer Misuse Act. These penalties have been designed to take account of the severity of the offence and the actual or potential damage caused. For example, if it can be proved that a hacker broke into a "protected computer system" relating to banking and financial services, the Act provides for an enhanced maximum penalty of a $100,000 fine, or 20 years' imprisonment or both. In addition to the criminal penalties, the court may order a convicted offender to pay monetary compensation for any damage caused by the offence to the computer system or data.

asked the Deputy Prime Minister and Minister for Finance what are the conditions imposed by the Monetary Authority of Singapore for the use of personal financial data of customers in the setting up and operation of the Consumer Credit Bureau by the Association of Banks in Singapore.

Mr Speaker, Sir, there has been an active public debate on the establishment of the credit bureau and, particularly, on confidentiality. Many Singaporeans are concerned that the credit bureau will lead to a dilution in confidentiality of banking information. They fear that commercial banks, with the help of the bureau, will have access to client's information about the state of his or her finances that they were not privy to before. These are reasonable concerns and deserve to be addressed squarely. The Banking Act provides the legal framework on the use of customer information. This provision is found in paragraph 7 of Part II of the Sixth Schedule. Banks are only permitted to disclose credit-related information to the recognised credit bureau such as personal details, the type and number of credit facilities granted, repayment trends and bankruptcy records. Banks are not allowed to disclose deposit information. This includes any funds, safe deposit boxes or safe custody arrangements of a customer under management by a bank. This is an important distinction between credit-related information and deposit information. The credit bureau and other MAS approved institutions participating in the bureau will only have access to a customer's credit history. The purpose for such access is restricted to the assessment of credit-worthiness of customers, and further disclosure to any other person is prohibited. Furthermore, a credit bureau that the banks want to use must demonstrate its ability to address financial privacy concerns competently, and to discharge its role effectively in providing accurate reports. MAS will only recognise and gazette the credit bureau when the concerns are adequately addressed, possibly in the form of a written code of conduct for the bureau. Should a credit bureau fail to maintain the high standards expected of it, MAS will not hesitate to cancel its recognition of the bureau. Once this happens, it becomes illegal for banks to provide customer information to the credit bureau. MAS recognises that the Consumer Credit Bureau has an important role to play in the financial industry. With the establishment of a credit bureau, members will have more information to anticipate potential bad debt situations before they occur. They will be able to better manage their overall level of bad debts. Studies have also shown that credit bureaus in other countries have enabled credit providers to differentiate between customers, and manage and price them accordingly.

Sir, can the DPM assure all credit card members that the information that they have supplied to these agencies will not be disclosed without proper safeguards, such as their identity would not be disclosed? And if their credit worthiness is disclosed, their transaction record should not be disclosed, but rather whether they were in good credit or bad credit. In other words, whether or not they can afford to pay for their charges, but not the specifics of what and how they are spending, because many credit agencies have been selling such information, so that people can build shopping profiles and so on of credit card users.

Yes, Mr Speaker, Sir, the purpose of the credit bureau is not to sell information so that people can build your profile. It is to establish your borrowing track record, whether you are paying back on time, whether you have defaulted, or whether you are bankrupt. You have to provide the name because if you do not provide the name, you cannot start to retrieve data. But what is associated with that name is not your deposit information, it is not how much money you have, it is what accounts you have. It is only things like the number and type of credit facilities granted, the repayment trends, whether you are repaying, bankruptcy records, and whether you have ever gone bankrupt or not.

But what about transaction records?

I do not believe that transaction records will be covered.

asked the Minister for Trade and Industry (a) why is there a need for local companies with a paid up share capital of S$500,000 or more and foreign companies with an authorised share capital of S$500,000 or more to be compelled by law to become members of the Singapore Business Federation and to pay subscription fees, and (b) why have they been deprived of the option to choose whether or not to become members of the said Federation.

Mr Speaker, Sir, the establishment of the Singapore Business Federation with mandatory membership was proposed by the former Singapore Federation of Chambers of Commerce and Industry (SFCCI), as a new apex organisation to represent Singapore's business interests more effectively, both locally and abroad. In response to SFCCI's recommendation and after many months of consultation with members of the local and international business community in Singapore, the Government introduced the Singapore Business Federation Bill, providing for mandatory membership of the SBF of all local companies with a paid-up capital of $0.5 million and above, and foreign companies with an authorised capital of $0.5 million and above. The Bill was passed by this House in October last year, and the SBF was formed in April this year. I explained to this House last year during the debate on the SBF Bill that we supported SFCCI's recommendation that membership of the SBF should be mandatory as the earlier practice of voluntary membership by business chambers and associations had not been effective. The business community had remained fragmented despite our best efforts, and lacked a strong and united private sector umbrella organisation. Compulsory membership would ensure that the SBF has a strong membership base, and has the mandate of the entire business community. Compulsory membership of business chambers can also be found in other countries. In France, Germany and Brazil, for example, chambers of commerce have legislative rights to collect fees from businesses. To ensure that this requirement will not be unduly onerous on our companies, we have exempted small companies, partnerships and sole proprietorships from having to join and contribute to the SBF. Hence, only local companies with paid-up capital and foreign companies with authorised capital of $0.5 million and above are required to be members of the SBF. We use paid-up capital because it is a simple criterion and generally correlated with size. MTI, together with the pro-tem committee of the SBF, did consider other criteria like profitability, annual turnover and employment size, but came to the conclusion that, whatever criterion or set of criteria we used, there would be difficulties wherever the line was drawn. In the end, we decided on paid-up capital as the simplest and least contentious criterion. Recognising, however, that exemptions may be clearly justified based on this criterion, the Act enables the Minister to allow them. To date, SBF has preferred not to recommend any exempted category because such exemption might cause many others not exempted to feel that they too should be exempted. As the SBF has only recently been formed, it is still collecting feedback. If SBF decides that there should be exemptions based on clear criteria and recommends them to me, I will consider them carefully.

What would be the position with regard to companies which are not trading, for example, investment holding companies? Would this be an appropriate category for an exemption?

I would prefer that such feedback be given to SBF and for SBF to look at the full implications and then put up its recommendations to me. I should not go behind the SBF to second guess what its recommendations should be.

Sir, I would like to ask the Minister to consider that for companies which have a paid-up capital of $500,000, but actually became defunct or dormant because their business dealings are no more active, should be exempted from paying subscription fees.

Sir, if these companies are de-registered, then, obviously, the compulsory membership will not apply.

These companies may not have been de-registered, but they are active companies with no real trading or activities going on. They are just dormant companies.

Sir, it is not easy to establish criteria for dormancy. But if such criterion can be established and the dormant status incontrovertibly defined, then I am sure SBF would recommend these companies to me, and I will consider them appropriately.

asked the Minister for Trade and Industry whether the new electricity market to be launched later this year will attract the participation of a sufficient number of generation companies so as to avoid an oligopolistic market.

Mr Speaker, Sir, we have four generation licensees selling into the pool at the moment. Two other generation licensees have indicated that they are planning to commission their plants sometime in 2005. Despite the number of generation licensees, about 90% of the total installed capacity in our system is concentrated in three big generation companies. These companies will have market power for about 12 years. These companies can use this market power to bid up pool prices. To prevent this, we will impose vesting contracts on the generation companies to curb their market power. Vesting contracts place an obligation on the generation companies to sell part of their capacity into the pool at a specified price. Generation companies will have to compete to sell the rest of the capacity that is not vested into the pool. With market power removed, the pool price is likely to be competitive. We will also prohibit the large gencos from expanding beyond their current licensed capacity so long as vesting contracts are in place. This is to ensure that the concentration of capacity and market power in the generation companies is not perpetuated. New capacity to meet demand growth will have to be met by companies other than the big three generation companies.

Sir, if we say that liberalisation does not necessarily mean lower prices for consumers, it means competitive prices, as what the Minister of State has just mentioned. So electricity need not be cheaper. Presently, we have installed capacity of about 11,000 megawatts of power and total consumption is only 8,000 megawatts. Senoko Power, Power Seraya and Tuas Power all account for 79% of capacity. On the demand side, we are planning ---

Are you asking a question, Mr Gan?

I am sorry, Sir. I just want to explain my question. We have more and more electricity being consumed by households. Are there any educational programmes to educate Singaporeans on the cost of electricity and the rate of usage, so that we can take more responsibilities on ourselves?

Sir, the answer is yes, Power Supply has been conducting educational programmes to educate consumers on how best to use electricity.

asked the Minister for Education in view of the Ministry's proposal to use Scholastic Assessment Test (SAT) scores besides the traditional "A" level grades as an additional measure of eligibility for admission into the universities (a) what is the weightage being given to SAT scores relative to entry requirements, (b) what are the admission criteria of our local universities; and (c) what is the rationale for instituting SAT.

asked the Minister for Education in light of the fact that several prominent American universities are doing away with SAT as a criterion for admission into their universities, has the Ministry (a) given second thought about the adoption of SAT as a measure of a student's potential and abilities, (b) obtained any information why these universities are doing away with SAT and (c) consider whether their concerns are also our concerns.

Mr Speaker, Sir, may I have your permission to take Question Nos. 11 and 12 together, as they are both related to the SAT?

Yes.

In 1998, the Committee on University Admission System was convened by the Ministry of Education to examine the present admission system and propose changes where necessary, taking into account linkages to the rest of the education system and related changes to the universities. In June 1999, after extensive consultation, the Committee submitted a report to the Government recommending a new university admission system. These proposals were also debated in this House during the Committee of Supply. The Government accepted the recommendations of the Committee. With effect from 2003, SAT I will account for 25% of the university admission criteria for students with `A'-level qualifications. `A'-level results constitute the remaining 75%. Co-curricular activities will be allocated up to 5% as bonus points. From 2005, project work will account for 10%, reducing the weightage of the `A'- level results to 65%. SAT I will remain at 25%. To meet the minimum criteria for admission to NUS or NTU, `A'-level students must have passes in at least 2 subjects at `A'-level, have taken the General Paper at the same sitting, have taken a Mother Tongue paper, and have taken SAT I. Of course, these are the minimum criteria. Admission, of course, is based on merit. Therefore, whether an applicant is successful in a particular course will depend on his or her results relative to other applicants for the places available on that particular course. The Committee recommended that a reasoning test be included as one component of the admission criteria to complement the content-based `A'-level examinations. Such a test will enable the universities to assess a candidate's analytical skills, as well as his potential and ability to deal with generic and new problems. The SAT I was chosen as it is a well-established and internationally recognised reasoning test. The other question that Mdm Ho raised is with regard to the proposal last year by the President of the University of California to do away with the SAT I as its admission criteria. This has been well publicised. Despite this, it would be an overstatement to say that "several prominent American universities are doing away with the SAT I". Indeed, according to the US College Board, about 80% of the US's 1,800 4-year universities are currently using SAT I scores in their admissions, and these universities include prominent institutions such as Harvard, Stanford and Yale. They find the SAT I a useful standardised means of measuring the applicant's readiness to undertake the university course of study. And this is particularly so in the United States where they do not have any standardised examinations at the high school level. There have been a number of suggested reasons as to why the University of California has proposed to drop the SAT I. According to the President of the University of California, it was because the SAT I by itself does not predict college achievement well. The UK magazine, The Economist, in commenting on the SAT and the decision of the University of California, suggested that the problem might not have been with the reliability or accuracy of the test, but that for political or social reasons, the University wanted a different mix of students than what would have resulted from using the SAT I. If so, such reasons are not relevant in our context. Our assessment is that the current SAT I is a suitable reasoning test for our purposes. We use SAT I as a complement to the content-based `A'-level examinations. Furthermore, our universities receive applications from those with other qualifications, eg, we have polytechnic diploma candidates, and we have candidates with foreign high school qualifications. Broadening the basket of admission criteria allows the universities to gain a fuller picture of the student, and gives students more opportunities to exhibit their range of talents and potential for university education. The US College Board recently announced a number of changes to SAT I, to be implemented from 2005. The Ministry of Education and our universities will be reviewing the implications of these changes on our university admission criteria.

Sir, I would like to ask the Minister whether it is true that some elements of the SAT are coachable; in other words the kids can be drilled to sit for it. If this is so, would the usage of the SAT for admission criteria to university encourage the kind of attributes that we are trying to move our kids away from, which is learning by rote, and taking away what we wanted out of SAT, which is pure reasoning skills?

Sir, some practice with the SAT I tests will be useful for students because they will acquire certain familiarities with the rubric of the examination paper and the types of questions that come up. But the content level of these papers is about where our students would be if they had completed their `O'-level English and Mathematics. So, any further efforts required will really not be necessary, because if they have got their `O'-level Mathematics and Language, that should really be sufficient as content material for them to take the SAT I, and, after that, it is really a test of their reasoning and critical thinking abilities.

asked the Minister for Manpower if he will provide an update on the employment situation.

Mr Speaker, Sir, in line with the improvement in the economy, retrenchment moderated in the first quarter of 2002. A total of 4,857 workers were laid off during this period. This level was close to half that in each of the preceding two quarters. However, job creation continues to be weak. Total employment has declined by about 14,000 in the first quarter this year for the third successive quarter, as the lagged effects of the economic downturn last year continued to affect demand for manpower. The losses were concentrated in the construction sector, about 10,000 jobs, due to persistent declines in both private and public building activities. Manufacturing employment fell by about 2,000, less sharply than in the preceding three quarters, owing to some recovery in manufacturing activities. Services producing industries also experienced cut-backs in employment, about 2,000 jobs, in the quarter. Consequently, the seasonally adjusted overall unemployment has reached a high of 4.5% in March this year. The rate is expected to rise to about 5-5.5% in the later half of this year, as there is usually a lag between the economic recovery and employment growth. If recovery continues, we can expect more creation of new jobs particularly in favour of those with higher skills and knowledge. However, many of the jobs lost in this downturn are unlikely to return as companies that have moved out or down-sized their operations in Singapore are unlikely to restart such activities here. This is especially so for the low-end manufacturing jobs. Hence, workers must acquire skills for new jobs in different industries and be prepared to move to where new jobs can be found and not wait for familiar ones to return. Only then can we expect unemployment to come down next year.

asked the Minister for Manpower whether he will consider waiving the interest chargeable on employers for late payment of Central Provident Fund contributions during this period of recession.

Mr Speaker, Sir, currently, the CPF Board already provides employers with a grace period of 14 days after the end of the month when contributions are due. Penalty interest is charged after the grace period so that members would not lose out on the interest that is due to them had their employers been prompt in their payment. This is also to deter employers from delaying CPF payment. Sir, employers have the obligation to pay the full amount of their employees' CPF promptly. CPF is considered as part of the employees' wages and employers should not delay CPF payment, just as they must not delay payment of wages when wages are due. Moreover, many CPF members use their CPF monies for their housing, healthcare, children's education and insurance needs. Late payment of CPF contributions would affect the employees' usage of their CPF for these on-going needs.

Sir, in these difficult times, is the Minister willing to waive the interest if the member consents to it?

Sir, the CPF Board takes no pleasure in imposing penalty on employers who are late in their CPF payments. We are sympathetic to the employers and to companies that have cash flow difficulties, and are not able to meet the payments on time. That is why we give them a grace period of two weeks to make the adjustment. We do not impose a penalty immediately. But if we were to take Mr Chiam's suggestion, and take a very relaxed approach and say "Well, if you cannot pay, do not worry, you pay when you can", then we must look at the other side of the coin - the impact of such a policy on the CPF members could be quite tremendous. We will have to bear in mind, as I said in my main answer, CPF members depend upon timely crediting of their CPF contributions into their accounts so that they can meet their housing mortgage repayments. They may have to pay hospital bills for themselves or for their dependants. They may have to withdraw money to pay for their children's education, if they have taken out a loan against their CPF under the Education Scheme. So, if we allow employers to delay the payment and if we do not have any measures that will encourage, and, in fact, compel employers to meet their statutory obligations on time, we will end up with questions in Parliament by other Members asking why is it that the Board is not recovering or helping employees to have their CPF credited on time. And, we will have to answer those other questions instead. So we have to have a balanced policy. Where we can, if there are really genuine reasons, the Board can consider giving some extension/grace period. But the Board cannot say it will not impose penalties or it will just overlook late payments and allow employers to get off scot-free, because if we adopt that approach then many more employers may choose not to pay their CPF on time and then we can run into hundreds of thousands of workers, CPF members, having difficulties. And who will answer to them? Certainly, Mr Chiam would not be here to answer to all these people who find that their CPF accounts are not credited on time and they have great difficulties meeting their financial obligations. So, I suggest that Mr Chiam look at the issue from both sides of the coin - from the employers, we are sympathetic, but we cannot ignore the needs and the rights of the employees.

asked the Minister for National Development whether there is a need to review the HDB policy on 3-room flats in view of the demand now for such flats.

Mr Speaker, Sir, HDB stopped building 3-room flats since 1985 because there was already a sufficient number of 3-room units in the resale market to meet the demand from Singaporeans, who increasingly preferred the larger flat types. Nevertheless, to meet the housing needs of lower-income families and to ensure that there are smaller flats available to them at affordable prices, HDB has a scheme to buy back 3-room flats. Under this scheme, HDB buys 3-room flats from the open market at market prices and offers them for sale at discounted prices, so that they are affordable to 90% of Singaporean households. On average, about 90 of the 150 units of 3-room flats that HDB offers for sale each month are taken up. For those who are not eligible for the buy-back scheme and want a 3-room flat, they can opt for one from the open market, where there are more than 200,000 such units available. There is no shortage of 3-room flats in the market. The volume of resale transactions for 3-room flats has remained healthy and steady in the last few years. Hence, my Ministry does not intend to change HDB's policy on 3-room flats. We will nevertheless continue to monitor the supply and demand for 3-room flats.

The Minister said earlier that HDB stopped building 3-room flats in 1985 as a result of lower demand for smaller flats. Was it not announced then that HDB was ready to build 3-room flats again if demand rose? Is the demand for 3-room flats not escalating as a result of more families downgrading, singles buying 3-room flats and JTC's purchase to house its foreign workers under the SHIFT Scheme?

We do not detect that there is a major increase in the demand for 3-room flats. As I indicated in my reply just now, in fact, we have more than sufficient 3-room flats in the market, both resale, for those who want to buy a resale flat, as well as new, meaning the buy-back flats. HDB buys back and sells at a discounted price something like 150 such flats a month. Not all of them are taken up. So, I do not agree with the Member that there is a very sharp increase in the demand for 3-room flats.

Sir, am I right to say that 3-room flats are selling at least $20,000 above valuation, and one was even sold at $50,000 above valuation? Does this not indicate that demand outstrips supply? Is this not causing unhealthy and inflated public housing prices? And will this not affect other types of public housing prices in the end? How would the Minister respond to this?

HDB does monitor 3-room resale flat prices. So far, the indications are that there is no such sharp increase in 3-room flat prices. The examples that the Member mentioned just now may well be true. But I would suggest that they are probably anecdotal, because we do monitor 3-room flat prices on a regular basis, and they have been steady over the last few quarters, and they have been rising or falling marginally, but in tandem with the rest of the resale market. So, our figures do not suggest that there is this sharp spike in 3-room resale flat prices.

Sir, may I ask the Minister whether it is not the Government's present policy to encourage Singaporeans not to over-invest in property? Therefore, will this demand for smaller flats be increasing? And why is the Minister not promoting and facilitating this policy, and instead choking the supply of these 3-room flats?

No, we are not choking the supply. In fact, as I took pains to explain, the supply is there. If one wants a 3-room flat tomorrow, he just walks into an HDB sale office and he would be able to get one. So, there is really no question of a shortage of supply.

Sir, does the Minister agree that whilst the HDB buys back 3-room flats and sells them to eligible applicants, it will mean that applicants cannot apply directly to HDB for new flats? For those who wish to downgrade but do not want to buy a flat from the open market, they cannot apply directly to HDB for a 3-room flat, because HDB is not building any more new 3-room flats. The Minister mentioned that the HDB cannot detect any demand for HDB 3-room flats. Can I suggest that HDB announce its intention to build 3-room flats and open it to applicants? Then, the Minister can see the demand and justify his statement.

As for the last part of the question, as I said, we have got 200,000 3-room flats in the open market, and we are buying back 3-room flats regularly. Then we re-sell these 3-room flats at discounted prices. So, anybody, as he suggested in the first part of his question, who wants to buy a 3-room flat at a discounted price, not at resale flat price, can go to HDB and apply. And if he is eligible, he can get one. There are many 3-room flats available in the market. So, where is the shortage?

Sir, I am talking about a new 3-room flat built by the HDB for sale, rather than a flat which was bought back by the HDB from the open market and for sale.

I really do not see why HDB should build new 3-room flats when there are so many available in the market, whether it is for sale at open market prices or for sale at discounted prices. I think it is quite ridiculous for HDB to start building new flats and then gauge the demand. It does not make economic sense at all. We stopped building in 1985 precisely for that reason. The demand was no longer there. Now that there is a demand for 3-room flats - I am not denying that - there is a way for us to satisfy that demand in a way which is most sensible for the total housing market.

Is the Minister saying that if the HDB is going to build 3-room flats, the selling price will be the same or higher than the current discounted price that the HDB bought the flat from the open market for sale to applicants?

Sir, HDB does not build new 3-room flats. So there is no comparison.

The Minister just said earlier that there is a demand for 3-room flats. May I ask the Minister whether it was not his assurance, announced during the Budget Statement debate, that his Ministry had made it a policy to make housing more responsive to the needs of people and enable Singaporeans to purchase a flat according to their budget? May I now call on this to be fulfilled?

Yes, we have made that commitment and we fully intend to meet that commitment. We did not say that affordable housing has to be a new 3-room flat. A resale 3-room flat, which is bought back from the open market and sold at an affordable price, will also make such housing available to people who want a 3-room flat. There are other choices, of course. But since the Member is concentrating on 3-room flats, my answer refers to such flats. There are also 4-room and 5-room flats which are affordable. But if a person so chooses and wants to have a 3-room flat for whatever reason, such flats are readily available. So, I do not see what the problem is.

May I ask the Minister whether he would consider allowing singles to also purchase 4-room HDB flats, instead of just 3-room HDB flats, so as to ease the demand for 3-room flats and, at the same time, giving more choices to singles for purchase of a flat?

Dr Neo, I think that is a different question altogether. I do not think you need to answer that question, Mr Mah. It is on 4-room flats. It is not on 3-room flats.

Sir, talking about buy-back policy, I just want to confirm with the Minister whether HDB can now buy back any 3-room flat from the market.

Sir, it is not a new policy. It is a policy which has been in place for quite a while. HDB has been buying back 3-room flats from the open market. So this is not a new policy. It is a policy which HDB has followed consistently. They have actually been selling such flats in the open market for quite some time as well.

Mr Speaker, can I seek your indulgence? My question earlier was related because I was referring to how to address the shortage of 3-room flats. Therefore, I asked about whether HDB would consider allowing singles to buy 4-room flats as well.

I relent this time. She asked a question, Mr Mah.

I was going to answer the question, Mr Speaker, because I think there is some relation. But, really, the question pertains to our policy on allowing singles to purchase HDB flats, whether it is 3-room, 4-room or 5-room. We do not, at the moment, allow singles to purchase 4-room flats unless they are jointly purchasing with another single under the Joint Singles Scheme. But if they are on their own, they can only purchase a 3-room flat. So, that is the singles policy. As to the other limb of the Member's question about shortage of 3-room flats, as I tried to explain earlier, I do not believe that there is a shortage of 3-room flats in the market. Of course, if the question is whether there is a shortage of new 3-room flats, the answer, obviously, is yes, because we have not been building 3-room flats.

Sir, can I seek your patience for one more question? Can the Minister assure this House that the scheme to help the lower-income families to own their 3-room HDB flats will not be further disadvantaged? Can he assure this House on that, and that the prices of the 3-room HDB flats are not increasing?

Yes, I can assure the Member that we will continue to make 3-room buy-back flats affordable to the lower-income households.

Sir, in my constituency, there are a lot of 3-room flat residents. When they upgrade to 4-room flats, they find it very difficult to sell their 3-room flats. At the end of the day, HDB buys them back and rents them to Jurong Town Corporation (JTC), and JTC, in turn, rents them to foreign workers. My residents have complained that sometimes there were so many foreign workers staying in their block. All these were unsold 3-room flats. Could certain regulations be imposed on 3-room flats rented to JTC? We should not rent all these flats to foreign workers. Maybe we could rent these flats to those who really need 3-room flats at a further discount.

I think the Member is referring to the SHIFT programme, which is administered by Jurong Town Corporation. Under this scheme, what JTC does is that it rents, on long lease, a certain number of flats from HDB, and then after that, it subsequently sub-rents these flats to people who come here to work in Singapore, on either work permit or on employment pass. So, who these people are, we leave it to JTC. But whoever they rent the flats to must continue to abide by the rules and regulations of HDB, whether it is in noise standards, keeping of cats, or sub-letting of flats, etc. So I do not see what the problem is. So long as we make sure that the sub-tenants of JTC comply with the HDB rules and regulations, then I do not think that we ought to be unduly worried.

asked the Minister for National Development whether he will consider helping the HDB lessees repair the spalling concrete in their flats.

Mr Speaker, Sir, spalling concrete is the result of a natural deterioration process called carbonation. When the surface concrete is carbonated, corrosion of the steel bars within the slab sets in. The corroded steel expands, thus causing the concrete surrounding the steel bars to crack. This problem may affect flat owners as their flats become older. Under the Lease agreement, HDB flat owners are responsible for the repair of spalling concrete in their flats. HDB flat owners who encounter spalling concrete problems in their flats can, however, report them to their respective HDB Branch Offices. HDB can assist the flat owners to investigate the problem and recommend appropriate remedial action. For flat owners who have difficulties in finding a suitable repair contractor on their own, HDB can also assist to provide them with a list of repair contractors, whom they can negotiate with on a strictly private basis.

Sir, may I ask the Senior Parliamentary Secretary, when does HDB expect a new flat to have spalling concrete problem? Can he give us the number of years?

Sir, there is what we know as a defect liability period. For new flats selected by the buyers within a year, the HDB will be obliged to ask the contractor to come back to repair any defects. So, if the flat is within the one-year old period, then the spalling concrete, if it occurs, would be a workmanship problem.

I would like a clarification from the Senior Parliamentary Secretary. Currently, for flats that are above 20 years old, ie, those built in the early 1980s, there are about 450,000 flats, and there was a scheme of three years, and only about 2%, ie, 17,000 flats were given assistance. In 1987, there was a change in the quality of concrete, from 20 to 30. And because of that, we notice that there is a difference in the degree of spalling concrete in the newer flats, but not in the older flats. So, I would like to appeal to the Ministry to consider helping those flats that are above 20 years old in the IUP or the MUP.

Mr Speaker, Sir, first of all, under the MUP programme, HDB repairs spalling concrete defects on a goodwill basis, for the simple reason that these flats would be very old. In order to qualify for MUP, the flats would be way above 10 years old. Spalling concrete is a problem of an aging process. Flats need maintenance. As flats age, problems set in. So spalling concrete is a maintenance problem. It is not a design or workmanship problem. New flats have fewer problems. That is the reason why the Member pointed out that flats built after 1990s, for example, have fewer problems because they are young. When we are young, we have no problems. We have no arthritis, or rheumatism. As we grow older, problems set in. So we will see a specialist or a doctor. It is not true that flats built in the early 80s have a high incidence of spalling concrete. They have high incidence because they are older. You ask any doctor, he will say that older patients have more problems. HDB conducted two goodwill repairs over two periods. In 1988, HDB conducted a goodwill repair, and repaired flats with spalling concrete defects. 75,000 households benefited from that goodwill repair and it cost the Government $30 million - big money in those days. Then in 1995 to 1998, HDB conducted another goodwill repair scheme for something like 27,000 households. So with these two goodwill repair schemes completed, HDB feels that there are very few spalling concrete defects left in the flats. Those that come on-stream now would be taken care of during the MUP programme.

May I ask the Senior Parliamentary Secretary, based on natural deterioration of concrete, which he mentioned as carbonation, how many years does he think a new flat built by HDB will have a spalling concrete problem? My understanding is that concrete, if properly constructed, can last 60 years. Maybe he can let us know how long it can last.

Mr Speaker, Sir, concrete, if well maintained, can last for a long time, longer than 60 years. But during the durability period, there will be minor repairs here and there. The spalling concrete needs routine maintenance, which we need to cater for flats which are way above 10 years old. So in our environment which is high in moisture, and in certain places which is high in carbon dioxide, carbonation takes place faster. For example, in the kitchen area which is heavily used for cooking, then we will find that spalling concrete may occur faster than in the living room.

Mr Speaker, Sir, I would like the Senior Parliamentary Secretary to give us some statistics to show that spalling concrete only happens in the older flats and not the newer flats, especially in 1987, when there was a change in the grade of concrete.

Mr Speaker, Sir, we have done some studies on the correlation between the age of a building and the instances of spalling concrete defects per thousand flats. For flats built before 1983, flats which are about 18 years old, the number of spalling concrete defects is 39.3 per thousand households. For flats built between 1983-1986, the number of defects is 25.9 per thousand households. For flats built between 1987-1990, the number of defects is very low, ie, 1.8 per thousand households because they are very young. And for very new flats built between 1991-2002, the defects of course is miniscule, 1.5 incidents per thousand households. So Members can see that the correlation is very simple. When the flats are young, there are few problems. When they are old, there are lots of problems.

May I clarify with the Senior Parliamentary Secretary? He said that after 10 years, we can expect spalling concrete. Am I correct in saying that?

If it is not maintained.

All HDB flats are properly maintained by the town councils. May I say to the Senior Parliamentary Secretary that it is not true that it is just a maintenance problem. It is the design, construction and maintenance that will affect the durability of the concrete structure. So, the design and construction are important. We have many new flats built in the 1990s using grade concrete, and yet we have spalling concrete problems. Does it mean that the HDB is going to repair all these spalling concrete problems for flats built in the 90s?

For these cases, perhaps the Member would like to highlight to the Ministry. Basically, spalling concrete happens within the flat, and it is outside the purview of the town council. I am sure all town councils in Singapore maintain their common property very well. The spalling concrete is an internal matter. It is between the flat owner and his property. A simple maintenance like repainting, for example, will prevent carbon dioxide from penetrating the outer layer of the concrete, thereby corroding the steel bars. As I said, if the flat is within one year old, we are obliged to repair. If it is outside one year, we will take a look, but the flat owner must repair. Spalling concrete is a slow process. It is easily detected. It is inexpensively repaired. One can do it himself if the repair area is small, meaning 1.5 square metres. If it is larger, he can always contact a contractor. HDB has, through the two goodwill programmes, trained hundreds of contractors who are competent in repairing the spalling concrete. And the cost is very cheap, ranging from $50 to a few hundred dollars.

Mr Speaker, Sir, I wonder whether the Senior Parliamentary Secretary has statistical data on spalling concrete, so as to compare the older Tiong Bahru estate at Seng Poh Road area, built before the HDB, with flats that were built in the 80s. And does he honestly believe that the grade of concrete that was used in the construction, and also the workmanship in which the steel bars were placed at the correct interval, are important factors that will decide whether or not there is spalling concrete? He also said that when one gets old, he is more prone to sickness and he compared it to spalling concrete. Does he also agree that if a person is born with a wrong genetic heritage, he may not live that old but can get sick very fast?

Sir, I think I am qualified to speak about the conditions of flats in Tiong Bahru, being the MP for the last 10 years. Spalling concrete does occur in Tiong Bahru flats, like all flats. In all concrete buildings, spalling concrete will occur. It is a matter of when. If the flat is maintained well, spalling concrete appears much later down the road. The design of the flat, as well as the grade of concrete, does affect the occurrence of spalling concrete. At any one time, HDB flats are designed according to the latest building codes. So there is no question of cutting corners in the construction of the HDB flats.

The Senior Parliamentary Secretary stated that it is the owner's responsibility to maintain and repair spalling concrete. But spalling concrete always happens at the slab that is between two flat units. And the leakage of the moisture is always from the upper unit going down to the slab and into the lower unit itself. In such a case, it is difficult for the owner of the lower flat to maintain that slab that is affecting the owner below. So would the Ministry consider helping the owner in the repair of spalling concrete? I would like to appeal to the Ministry to seriously look into this under the IUP.

Mr Speaker, Sir, if the spalling concrete is a symptom of a ceiling leak between the upper and the lower households, then the HDB will take a look at it and give advice accordingly. If it is a case of pure spalling concrete, then it is simple to repair, because the owner has absolute control over his ceiling. He does not need to interfere with the neighbour upstairs. If it is a case of a ceiling leakage, ie, water seeping through the toilet, then it needs the cooperation of two parties - the upper floor neighbour and the lower floor neighbour. The law is quite clear that both parties must share the responsibility. Sometimes, both parties cannot come to an agreement, either because of the timing or the nature of the repair, in which case HDB will step in and be the expert counsel.

Sir, the Senior Parliamentary Secretary has put the blame of maintenance on the real cost of spalling concrete. I would like to explain to my residents what does maintenance mean and what it takes to maintain. So, can the Senior Parliamentary Secretary make available a list to the public on the maintenance that is necessary and, if they do the maintenance, how many more years they would earn before spalling concrete sets in?

The simplest form of maintenance is to repaint the ceiling of the flat, as and when is required. If we use good water-proof paint, for example, then it should last between 5-7 years. Some paints are moisture resistant. So, by painting the ceiling of the flat, it will prevent carbon dioxide from penetrating the surface of the concrete. The carbon dioxide reacts with the alkaline on the steel bars and therefore reduces the rust-proof nature of the steel bars. So Members should advise the flat dwellers to paint their flats.

Sir, I take exception to the Senior Parliamentary Secretary's reply that the problem of spalling concrete is not due to poor workmanship. Is he not aware that poor workmanship has, in fact, been stated as the cause of spalling concrete problem in this House, maybe not by his present Minister but by previous Ministers in the House? Why is it that residents are made to pay for repair to a problem which is, in fact, inherent? Is he not aware that in my constituency, and in many other constituencies, this problem has been evident since the day the flats were completed, and this is particularly true in my constituency when the flats were built in the 1980s? So, is it not time that HDB dealt with the problem, instead of now just telling the people to paint their ceilings?

Mr Speaker, Sir, I mentioned earlier on that the Government carried out two goodwill programmes, one in 1988 and another in 1995-1998. With these two programmes, the flats in Bedok, for example, would have been completely taken care of. If any spalling concrete did occur because of workmanship, I do not agree.

Sir, Mdm Phua mentioned about the goodwill repairs during the IUP. I have flats which have gone through the IUP and they have the accelerated programme. After the IUP, the spalling concrete persists. Maybe the HDB can consider the goodwill repairs to start for these flats.

I believe that if spalling concrete did occur after IUP, it could be a case of ceiling leakage, in which case, the Member could advise his residents to appeal to him, and he could then write in to the Ministry. It could be a case of ceiling leakage. The early stage of spalling concrete makes it difficult for contractors to decide whether it is pure spalling concrete or a case of ceiling leakage. But in any case, as I said earlier on, during the MUP period, we will do a major goodwill repair. After IUP, there is MUP.

Sir, may I ask the Senior Parliamentary Secretary whether it is the HDB's responsibility to design flats according to the respective uses in the flat? If it is the kitchen, and we know there are cooking activities, we have to design a ceiling that can withstand the smoke and oil, and it should last. But spalling concrete occurs in bedrooms also. So, how do we maintain the ceilings of bedrooms?

Mr Speaker, Sir, I do not know about spalling concrete in the bedrooms. For spalling concrete to occur, basically, carbon dioxide, moisture and oxygen need to penetrate the surface layer. I am sure these are exceptional cases. We will be interested to take a look at them.

Sir, I am utterly confused.

Mdm Phua, let the Minister reply first.

All right. I am sorry.

Mr Speaker, Sir, there are two issues here. The first issue is: what is the cause of the spalling concrete? If the cause of the spalling concrete is due to the design, as some Members allege, and it can be proven as such, then obviously it is HDB's responsibility to fix it, either in the flat that is currently affected by spalling concrete or to fix it in future designs. But if it is a matter of deterioration - natural wear and tear - then, obviously, the responsibility lies with the owner. Sir, if any Member of the House here feels that flats in his constituency or estate are affected by spalling concrete due to design or poor workmanship problems, then, by all means, please take it up with the Ministry and, if we can establish the cause, we will take the necessary measures. There is no point in trying to lump the two issues into one because, obviously, there is a limit to the kind of maintenance that HDB can carry out in the flats. HDB flats are 10, 15, 20, 30 years old. Wear and tear takes place, and some of the repairs and maintenance must be undertaken by the owners themselves. This is perfectly normal. If the wear and tear takes place after 10-15 years, to expect the HDB to undertake repairs is obviously not fair. Having said all that, of course, we spend a considerable amount of money going back to the flats for interim upgrading, main upgrading, goodwill repairs and so on and so forth. So, I do not think it is fair for Members to suggest that HDB, after selling the flats to our residents, just walks away and forgets about it. In fact, on the contrary, our after sales service is probably far superior to any private sector developer. Members can ask a private sector developer - whether it is City Developments, Far East Organisation or whoever - after five years of living in your flat and something goes wrong, ask them to come back and look at your flat, I think Members here will know what the answer is.

Mdm Phua, do you want to ask your question?

Sir, the Minister has clarified. I would like to thank the Minister for agreeing to handle the exceptions.

Mr Speaker, Sir, may I make a suggestion, or maybe it is already being done at the HDB? Perhaps, some best practices ---

Ms Braema, you can only ask a supplementary question. You cannot make suggestions.

Or I can turn it ---

Let us try.

Sir, where private high-rise buildings are concerned, I would like to know, for the same time span, what is the number of spalling concrete defects as compared to those in HDB flats. Perhaps from here there are some learning points.

Mr Speaker, Sir, obviously, we do not compile statistics of private dwellings, but we do receive feedback from buyers of private condominiums that they suffer the same problems. But these problems are not highlighted in the public domain like HDB flat defects are. Having said that, the Building and Construction Authority (BCA) does what we call a CONQUAS survey. CONQUAS is the acronym for Construction Quality Assessment System. We found that the quality of HDB flats is the same as the quality of private condominiums, by and large. And, as the Minister has rightly pointed out, HDB does a lot of goodwill repairs. They do a lot of follow-up. They give expert consultations. They try to rope in contractors to repair and, sometimes, they even bargain on behalf of the consumers to get a low price from the contractor.

asked the Minister for National Development (a) why is there a need for residents to pay a privatisation fee when their Housing and Urban Development Company flats are privatised and (b) what is the basis for setting the amount payable by the residents.

First of all, let me thank Mr Chiam for raising a question which has caused some confusion on the ground. The flats in HUDC Phases III & IV were sold under the Housing and Development Act. Like HDB flat lessees, these lessees own neither the land on which their flats are built, nor the car parks and common areas of their estate. They are thus required to pay about $25,000 per flat for the conversion of their flat leases into strata titles. Most of this cost - about $20,000 per flat - is the cost of purchasing the common property from HDB. The residents have to pay this sum because they did not pay for this common property, such as the car parks, at the point of original purchase. The cost of the common property is computed taking into account the net car park income forgone for the remaining period of the lease. The remaining $5,000 comprises costs incurred by HDB for survey fees, legal fees and construction works necessary to comply with statutory building control and other requirements. On the other hand, for lessees in HUDC estates in Phases I & II, these are governed by the HUDC Housing Estates Act. I want to emphasise that they were sold on different terms. In particular, these lessees would pay lower conversion costs, because they already own the common areas of the estate. For these lessees, the privatisation process involves mainly the land and strata subdivisions and the transfer of the legal title of the land from HDB to them. By paying conversion costs, these flat owners would be able to own the common property as tenants-in-common. Through privatisation, they would also enjoy other benefits, such as the autonomy to manage and upgrade their estates according to their needs and aspirations, and will no longer be subject to HDB's restrictions on the use, ownership and resale of their flats.

asked the Minister for Home Affairs if he will comment on the report released by the United States State Department classifying Singapore as a "Tier 2" country, alongside countries such as Angola, Bangladesh, Burkina Faso, Ethiopia, Haiti, Nigeria, Pakistan and Sierra Leone, in not doing enough to combat human trafficking across borders.

Sir, since 2001, the US State Department is obliged by law to issue an annual report on trafficking in persons. The legislation that obliges the US State Department to issue this report requires the classification of countries into three tiers. Mr Tan Soo Khoon referred to the recent US State Department's Trafficking in Persons Report 2002, which classified Singapore as a "Tier 2" country. Sir, I detect Mr Tan's surprise with Singapore's classification. Indeed, so am I. The criteria used by the US State Department to determine which tier a country should be placed under, include the government's efforts to, firstly, prohibit trafficking and punishing acts of trafficking; secondly, prescribe punishment commensurate for grave crimes, such as forcible sexual assault, for the knowing commission of trafficking in some of its most reprehensible forms, eg, trafficking for sexual purposes and trafficking involving rape or kidnapping; thirdly, prescribe punishment that is sufficiently stringent to deter and that adequately reflects the offence's heinous nature; and, fourthly, make serious and sustained efforts to eliminate trafficking. Sir, "Tier 1" countries are those which the US considers to have fully met these criteria. "Tier 2" countries are those which the US considers to be making significant efforts towards meeting these criteria. "Tier 3" countries are those which the US considers to be the worst offenders. These are countries which do not meet these criteria and are not making significant efforts towards meeting them. But of note is what the US Under Secretary of State for Global Affairs, Ms Paula Dobriansky, who, in Congress, admitted on 19th June that, "Honest people can disagree on the tier placements of certain countries." Sir, this is the second year the US State Department has issued a Trafficking in Persons Report. In last year's report, the US State Department also classified Singapore as a "Tier 2" country, despite the acknowledgement in the report that Singapore met the minimum standards set out in the criteria I have listed. We did not agree with this classification, as we were the only country in "Tier 2" to have met the minimum standards but still placed in "Tier 2" instead of "Tier 1". We pointed out inaccuracies in the report to the US Embassy here in Singapore but some continued to appear in this year's report. Sir, we will continue to point out inaccuracies in this annual report to the US Embassy here. Sir, this House and Singaporeans know very well Singapore's tough stance, as reflected in concrete measures against illegal immigration, including trafficking of persons. Our laws protect women and children, and meet all international norms pertaining to the security and the safe passage of visitors to this country. Our enforcement agencies remain vigilant to the potential for Singapore to be used as a destination for human trafficking. Tough legislation, coupled with stepped-up enforcement on land as well as the waters around Singapore, and the further tightening of border controls at the land, air and sea checkpoints are but only some of the ways that we deter illegal immigration and human trafficking. Sir, no country, not even the US, can claim to be completely immune to the problems of human trafficking. Indeed, some will say that the US has problems of its own in this area and falls short of its own criteria. Singapore has its own laws and procedures to deal with the matter in a realistic and practical way which work for us. We will continue to improve our approach as it suits us.

Sir, given our very strict laws and our vigilance on this matter, may I just say that not only was I surprised at our inclusion as a "Tier 2" country, but I was very unhappy. Can I ask the Senior Minister of State what is the response of the US State Department or the US Embassy to the disagreement that we have lodged with them?

Sir, I think it is a continuing dialogue. For example, when we received last year's report, we corresponded with the US Embassy setting out the inaccuracies, eg, for stating Singapore to be a destination country for trafficking of women for sexual exploitation. We said that this was not so. But this inaccuracy was again reflected in this year's report. So it is a matter of continuing dialogue. We will continue to point out these inaccuracies to the US Embassy and, over time, to convince them that we are not what they say we are. But what is more important, Sir, is that Singaporeans here know of the tough laws and measures, and our position on this matter. For example, even in the US Congress, the Under Secretary herself said that people can debate about the criteria and, indeed, they are looking at so many countries. It is not a matter of science. But, of course, we disagree with the classification and we have said so very clearly, and we will continue to point out inaccuracies in the report.

Sir, in the dialogue that we are having with the US Embassy, have they pointed to us in which areas we are supposed to have failed?

Sir, for example, on the question of foreign women coming to Singapore to offer commercial sex services, it is a matter of different countries' approach, whether this amounts to human trafficking for sexual exploitation. As far as Singapore is concerned, we are very clear. We have answered this question before in this House a few times, ie, in Singapore, we take an approach that is pragmatic and that works for us. The Minister himself and myself have responded on how things are done in Singapore. We know that there is prostitution. Women do come here. But what is important is that the women who come here are not coerced, forced or tricked into prostitution. They come here voluntarily. That is important. So it could be a matter of definition and approach. But it is a dialogue that we must continue.

Sir, trafficking of human beings is a growing global problem. From that perspective, what is Singapore doing regionally to contain this problem?

Sir, Singapore also takes part in many regional conferences on this matter. Indeed, it is true that human trafficking is perceived by the UN and by other international agencies as a growing problem. So we play an active part, together with other countries, in determining the extent of the problem and what measures to take to curb the problem. In short, we are an active participant with other countries to tackle this problem regionally and globally.

asked the Minister for Law (a) what is the rationale behind the Singapore Land Authority's requirement for 3 months' rental deposits or security in lieu from charitable voluntary welfare organisations (VWOs) since the rentals are being paid by their respective Ministries; and (b) this being the case, will the Minister consider having this requirement waived as the 3 months' deposits are quite substantial and can be better utilised by the VWOs.

Sir, I would like to declare my interest as the Medical Director of a voluntary welfare organisation.

Sir, like other prudent landlords, the Singapore Land Authority requires a security deposit to be paid by a voluntary welfare organisation renting State premises for the following reasons: Firstly, to ensure that the tenant complies with the conditions of the tenancy agreement; Secondly, to ensure payment of rental; and Thirdly, to recover the cost of repairs and rectifications in the event of any damages when the tenant vacates the property. As a general practice, SLA collects rental payments directly from the VWO. However, in some cases, the parent agency overseeing the VWO requests to pay the rentals directly to the SLA to avoid incurring late payment charges. Even for these cases, the security deposit is still required to ensure that the VWO complies with the conditions of the tenancy agreement as well as to cover the cost of repairs and rectifications arising from any damage to the property. For these reasons, the Singapore Land Authority requires a security deposit, currently set at three months. SLA is prepared to waive the deposit for VWOs that have secured a guarantee from a parent agency or Ministry to make good any damages that may occur to the property. In addition, to ease the cashflow --- 2.00 pm

Order. End of Question time. [Pursuant to Standing Order No. 21(3), Written Answers to Question Nos. 19, 20, 26, 27 and 28 are produced in the section, "Oral Answers to Questions Not Reached" (Cols. 147-152). Question Nos. 21-24 and 29-32 have been postponed to the sitting of Parliament on 9th July 2002.]

"to amend the Bills of Exchange Act (Chapter 23 of the 1999 Revised Edition)", presented by the Deputy Prime Minister and Minister for Finance (Mr Lee Hsien Loong); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Constitution of the Republic of Singapore (1999 Reprint)", presented by Mr Lee Hsien Loong; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Currency Act (Chapter 69 of the 1999 Revised Edition), to provide for the dissolution of the Board of Commissioners of Currency, Singapore and the transfer of its functions, past reserves, property, liabilities and employees to the Monetary Authority of Singapore and to make consequential amendments to certain other written laws", recommendation of President signified; presented by Mr Lee Hsien Loong; read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Road Traffic Act (Chapter 276 of the 1997 Revised Edition)", presented by the Minister for Home Affairs (Mr Wong Kan Seng); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

"to amend the Industrial Relations Act (Chapter 136 of the 1999 Revised Edition) and to make related amendments to the Trades Union Act (Chapter 333 of the 1985 Revised Edition)", presented by the Minister of State for Manpower (Dr Ng Eng Hen); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Role of Polytechnic Education Sir, our polytechnics play a vital role in providing the key manpower for our economy. They provide future-oriented practical training of high quality, relevant to the needs of industry. They constantly keep abreast of the latest developments in technology and the changing needs of our economy in order to adequately prepare the students for the job market. Polytechnic students are trained in a wide variety of practice-oriented areas. They include courses in engineering, media and design, information technology, health sciences, chemical and life sciences, maritime studies, building and construction, and business, finance and law. To meet the changing demands in our economy, the polytechnics constantly update their existing courses. Where necessary, new courses are introduced, for example, in areas such as mobile and wireless computing, and biomedical engineering. Polytechnic graduates are highly valued as practice-oriented and knowledgeable middle-level professionals, managers and technologists. In the 2001 graduate employment survey conducted by the four polytechnics, about 75% of fresh graduates found jobs within the first three months of graduation. The average gross monthly salary of fresh graduates was about $1,500. Despite the economic downturn, a good majority of our polytechnic graduates were able to find jobs quickly. This bears testimony to the quality of the training provided by the polytechnics, and its relevancy to the needs of industry. Rationale for a Fifth Polytechnic Our first polytechnic, the Singapore Polytechnic, was established almost 50 years ago in 1954, to train middle-level professionals to support the technological and economic development of Singapore. Since then, we have established three more polytechnics - Ngee Ann Polytechnic in 1963, Temasek Polytechnic in 1990 and Nanyang Polytechnic in 1992. Together, these four polytechnics have spearheaded the training of skilled manpower to meet the needs of our economy. Today, with the improvements in our education system, about 40% of each primary one cohort are admitted to polytechnics, compared with 28% 10 years ago. The average primary one cohort has also risen significantly in size, from a low of about 40,000 in the 1980s and early 1990s, to about 50,000 since 1995. The first batch of these larger primary one cohorts, which is the 1988 "Year of the Dragon" cohort, came to our primary schools in 1995, and is expected to reach the polytechnic level in the year 2005. The four polytechnics are already operating at full capacity. To cater to the increase in the cohort size eligible for polytechnic education, we need about 4,000 additional polytechnic places for our pre-employment training every year. Besides the provision of pre-employment training, the polytechnic sector is also expected to shoulder a significant share of skills renewal and upgrading for our workforce. The polytechnics have established close links with industry and are therefore well-placed to provide continuing education and training in a diverse range of practice-oriented programmes. Graduates from the ITE, polytechnics and even universities who require further training or specialist skills upgrading now turn to the polytechnics for their training needs. Such continual upgrading and renewal of skills ensure life-long employability for our workforce. My Ministry has therefore decided to set up a fifth polytechnic, the Republic Polytechnic, to cater to the need for increased capacity for pre-employment training. The Republic Polytechnic, together with the four existing polytechnics, will also cater to the increase in demand for continuing education and training. Furthermore, building a new polytechnic offers us the opportunity to inject new ideas and introduce innovations into a crucial sector of our education system. This will catalyse improvements and the introduction of new ideas into the entire polytechnic sector. The advent of the new economy brings with it new challenges for our economy and the workforce. The Republic Polytechnic's vision, mission and educational philosophy will be geared towards meeting these challenges, which are characterised by globalisation, global competition, rapid technological advancements and changing business models. The Republic Polytechnic will offer three core programmes of study in Engineering, Information and Communications Technology (ICT) and Applied Sciences with a focus on Biomedical Sciences. In the new economy, the Engineering industry continues to play an important role in providing critical services to support the manufacturing sector. ICT continues to remain a strategic resource in business and Government. The Biomedical Sciences industry is poised for rapid growth as Singapore aims to be a world-class hub for the life sciences industry with total business capabilities for manufacturing, and R&D of high value-added biomedical sciences products and services. The Republic Polytechnic will adopt a new approach of integrating Business models into the three core programmes of study as well as offer hybrid programmes that will combine Business with any one of these three programmes. Such an approach will be in line with the increasing need by the industries for graduates trained in a multi-disciplinary way. The Republic Polytechnic will commence operations in the year 2003 with a pioneer intake of 800 students. It will increase its intake gradually, admitting 1,200 students in 2004, and 1,800 in 2005, the latter being the "dragon" cohort. The steady-state enrolment is expected to be 13,200. My Ministry and the URA are considering a site in the Woodlands area for the permanent campus, which would be within walking distance of the Woodlands MRT station. Accessibility is an important consideration in attracting students and working adults for Continuing Education and Training (CET) to the new polytechnic. The permanent campus is expected to be completed in 2006. Mr Speaker, Sir, I now turn to the Republic Polytechnic Bill itself. The Bill proposes to establish the Republic Polytechnic as a body corporate comprising a Board of Governors, a Senate, members of the academic staff and other officers of the Polytechnic. The Bill also makes provisions for the establishment of Schools within the Polytechnic. The Constitution of the Republic Polytechnic is set out in the Schedule to the Bill. The Constitution defines the composition, powers and duties of the Board and Senate, as well as other details which will be governed by statutes. The Republic Polytechnic Bill is similar in substance and intent to the Nanyang Polytechnic Act. The Republic Polytechnic, like the existing four polytechnics, will be established as a statutory board under the purview of the Ministry of Education. Sir, I beg to move.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [RAdm Teo Chee Hean]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 2.15 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill before the House seeks to enable Singapore to become a member of the International Development Association (IDA). IDA was established in 1960 as an integral part of the World Bank Group to provide long-term loans at zero interest to the poorest of developing countries which have little or no access to market financing. IDA's lending helps to build the human capital, infrastructure, institutions and policies that developing countries need to achieve sustainable economic growth. IDA is funded largely by contributions from the governments of member countries. There are 162 IDA member countries today, out of 183 World Bank members. This Bill paves the way for Singapore to join the 88% of World Bank members already in IDA. Singapore is already a member of the four other institutions under the World Bank group, namely the International Bank for Reconstruction and Development, the International Finance Corporation, the Multi-Lateral Investment Guarantee Agency, and the International Centre of Settlement of Investment Disputes. IDA is the key multi-lateral development assistance institution, and our membership is simply doing what is expected of us as a responsible member of the family of nations. IDA lendings support US$11/2-2 billion worth of development projects in South Asia, East Asia and the Pacific, annually. This helps to promote growth and stability in the Asia-Pacific region. Singapore's participation in IDA will also enable our companies and consultants to share their expertise through IDA financed projects. Singapore's IDA membership subscription is US$410,159. Section 4 of the Bill provides for this sum to be charged to the Consolidated Fund and for Singapore to subscribe to future increases in authorised capital, provided that the total subscription does not exceed US$1 million. Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Lee Hsien Loong].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". Sir, the Companies Act was last amended in January 2001. Since then, three private sector led Committees set up by my Ministry, the Monetary Authority of Singapore, and the Attorney-General's Chambers, have been active in reviewing Singapore's corporate governance and regulatory framework. One of the Committees was the Disclosure and Accounting Standards Committee (DASC). The DASC submitted its final report to the Government in September 2001, with a set of recommendations to improve Singapore's accounting standards setting process, disclosure requirements and rules on auditor independence. The Government has accepted all the DASC recommendations. This Bill seeks to implement the DASC recommendations that require amendments to the Companies Act. At the same time, the Registry of Companies and Businesses has also embarked on several key initiatives to further its mission of making Singapore best for business. This includes the introduction of an electronic filing system called BizFile, which would allow round the clock filing and information retrieval services over the Internet for RCB's customers. This Bill seeks to introduce legislative changes that would facilitate the implementation of an electronic filing system for companies in Singapore. It also seeks to simplify the incorporation process and reduce the time required to incorporate a company in Singapore. This Bill also contains other amendments which are intended to update and streamline certain procedures and provisions in the Companies Act. Sir, I shall now highlight the main amendments proposed in the Bill, starting with those to effect the DASC's recommendations. Compliance with Accounting Standards To position Singapore as the key business and financial centre, we need to give investors the confidence that companies registered in Singapore present true and fair financial statements that are in accordance with internationally accepted accounting standards. Incidents such as Enron and Worldcom have shown the dangers of misrepresenting financial statements. While the Government cannot ensure the integrity of financial reporting, we can put in place a regulatory framework that facilitates proper disclosure. Currently, there are no statutory requirements for companies in Singapore to comply with prescribed accounting standards. Clause 37 amends section 201 to require all companies to comply with prescribed accounting standards. This is similar to the practice in the UK and Australia. Similar to the approach in UK, we would allow companies to deviate from the prescribed accounting standards if, and only if, such deviations are necessary for them to present a true and fair set of financial statements. Clause 37 also requires companies to make full and detailed disclosures in their financial statements regarding the nature, financial effect, and justifications, for such deviations. As an additional safeguard, the directors' decision to deviate from prescribed accounting standards would require the concurrence of the companies' external auditor. Clause 61 repeals the Ninth Schedule. The Ninth Schedule contains a listing of items to be disclosed in the companies' accounts and was included in the Companies Act during a time when accounting standards were not well developed. Today, the situation is different, as accounting standards have become much better developed over the years. With the move towards a disclosure-based regime and a legislation of compliance with prescribed accounting standards, it is no longer necessary for the Companies Act to contain additional provision relating to financial reporting and disclosure requirements. Instead, companies would comply with the reporting and disclosure requirements that are prescribed in the accounting standards, or by market intermediaries, such as the Stock Exchange. These requirements are more up-to-date and they can better reflect the changing needs of the market place. Council on Corporate Disclosures and Governance Currently, accounting standards in Singapore are set by the Institute of Certified Public Accountants of Singapore (ICPAS), which is a professional organisation of accountants. ICPAS has done a good job over the years. To improve the efficiency and rigours of its accounting standards setting process, it has also aligned many of our accounting standards with those issued by the International Accounting Standards Board. However, as compliance with the accounting standards would be made a legal requirement, it would not be appropriate for the accounting standards setting authority to reside with a professional organisation. And, in leading jurisdictions such as the UK and Australia, accounting standards are set by independent bodies comprising representatives from businesses, professional organisations, academic institutions and government. This allows the key stakeholders to have a more direct say on how accounting standards should be set. Clause 36 introduces a new section 200A which provides for the establishment of an independent panel to prescribe accounting standards for Singapore companies. The proposed panel would be known as the Council on Corporate Disclosure and Governance. Under the new arrangements, the ICPAS would continue to play a pivotal role to support the new Council in the accounting standards setting process. In addition to setting accounting standards, the new Council would also make recommendations to the Government on the review and enhancement of Singapore's corporate governance and disclosure policies. The new Council would comprise members from businesses, professional organisations, academic institutions and Government. The Council Members would be appointed by the Minister for Finance. Moving forward, the new Council would provide a collaborative mechanism for the private and public sectors to continuously review and improve Singapore's corporate governance and regulatory framework. We expect to set up the new Council in August this year, after the legislative amendments have been approved. Directors' Report Section 201 of the Act currently requires all companies to include a report by the Directors in their Annual Report. The DASC has felt that some of the disclosure requirements in the Directors' Report, such as those pertaining to the company's financial position do not add much value as they essentially repeat information that is already provided in the company's financial statement. As a result, Directors' Report becomes overly cluttered. Clause 37 removes the requirement from section 201 for Directors to disclose such details in their report. A statement by Directors as required under section 201(15) of the Companies Act would be retained as it requires the Directors to confirm that the company is solvent and that the financial statements presented to shareholders are true and fair. Introduction of BizFile While we strive to improve Singapore's regulatory framework, we also need to ensure that our processes are efficient and business-friendly. RCB has been actively working with the private sector on ways to streamline its processes so as to bring about greater convenience and lower cost to its customers. One of RCB's key initiatives is the introduction of a web-based electronic filing system called "BizFile". BizFile enables businessmen and professionals to perform filing and information retrieval on-line at any time of the day. BizFile also enables RCB to reduce business cost and expedite the turn around time for incorporation and filing. The introduction of BizFile would raise RCB's service standards and align its practices with its counterparts in the US, UK and Australia. RCB has launched the first phase of BizFile, which deals with incorporation of companies in January this year. It plans to launch the second phase of BizFile by the end of the year. Let me now highlight the amendments in the Bill that would facilitate the implementation of BizFile. With the move to an electronic filing system, RCB would consolidate its existing hardcopy forms into electronic forms. Currently, a person who wants to file information with RCB has to fill in several hardcopy forms that capture some duplicate data items. BizFile also removes the need for manual data entry by the RCB officers, thereby reducing the time and cost required for processing the application. BizFile further simplifies the filing and incorporation process by doing away with hardcopy certificates, statutory declarations and affidavits. There are several clauses in the Bill, such as clauses 8, 16, 19 and 24, that amend the Act to remove the need for statutory declarations or affidavits. RCB would verify the user's identity online, using his unique national pin, which is also the CPF PAL pin before allowing the user to submit his declaration electronically. Singaporeans who do not have CPF PAL pin would be assigned an ID and password by RCB for their BizFile transactions. Clause 7 amends section 17 to replace the issue of a hardcopy certificate of incorporation via electronic notification. Any member of the public who wishes to check the registration status of a company can do so online, at no charge. Clause 7 also provides for the issue of a hardcopy certificate of incorporation upon the payment of a fee. This is to cater to companies that still require hardcopy incorporation certificates for other purposes, such as for submission to overseas regulators. Removal of Pre-Incorporation Checks for Similar Names For the purposes of registering company names, jurisdictions such as the US, UK, Australia and Hong Kong, do not conduct any pre-incorporation checks for similar names. These jurisdictions have found that the checking for similar names only delays the incorporation process and increases business cost. They only conduct pre-incorporation checks for identical, undesirable and gazetted names. This enables same day incorporation, which has become the service standards that businessmen would expect. To benchmark our service standards for incorporation to that of the US, UK, Australia and Hong Kong, we propose to align RCB's practice with these jurisdictions. Clause 12 of the Bill removes the requirement under section 27 for the Registrar to do pre-incorporation checks for similar names. Under the new arrangements, an applicant who wishes to register a company name can first perform some preliminary checks from BizFile to see if the name he is applying for is similar to that of an existing company or business. Bizfile would alert the applicant if there is an existing company or business with a similar name. The applicant can then decide whether he wants to proceed with the application or select another name. The law would continue to provide protection and avenues for redress for incumbent companies and businesses. An aggrieved party can lodge a complaint to the Registrar against the company or business, with a similar name, within twelve months from the date of registration of that company or business. After twelve months, an aggrieved party can still bring the matter to the court. This is similar to the practice in the UK. Mr Speaker, Sir, in conclusion, the proposed amendments in this Bill are part of a comprehensive exercise to review our company legislation and to enhance Singapore's competitiveness as a global business centre. Another private sector led Committee, called the Companies Legislation and Regulatory Framework Committee, is in the process of reviewing our company law and regulatory framework. This Committee has posted its draft report on the Internet for public consultation, and is expected to submit its recommendations to the Government later this year. If its recommendations are accepted, we will be making further amendments to the Companies Act. Sir, I beg to move. Question proposed. 2.30 pm

Mr Speaker, Sir, I wish to express my support for this Bill. The Bill seeks to implement the major recommendations of the Disclosure and Accounting Standards Committee. As Singapore is establishing itself as a major financial centre in the world, we should adopt internationally recognised and accepted accounting standards and practices. However, recent instances of major corporate disclosure failings, like Enron, Worldcom and Xerox in USA, have shown that no amount of good corporate governance regulations or strict accounting standards can guard against management bent on crooked reporting. This is particularly glaring as these incidents occur in the USA which prides itself as the motherland of good corporate disclosures and transparency. For the record, Sir, I support the creation of the proposed panel of Council on Corporate Disclosure and Governance. If its role is only to serve as a body to make recommendations, then there must be retained some teeth in the regulatory framework for existing Government agencies to police and fine offenders who flout these rules. I read in the newspapers that in the USA itself, they are thinking of charging the dishonest management responsible for making untruthful disclosures in their companies' accounts. In line with my disappointment that no amount of good corporate governance regulations can safeguard against dishonest management, I would like to raise the issue of quarterly reporting. Quarterly reporting is required from next year onwards for listed companies. I had supported this idea in the past in the hope that more regular reporting would enable better business information and transparency. However, I now come to the view that quarterly reporting may have some serious disadvantages. As evident in the USA, quarterly reporting has caused top management of companies to be very short-term focused on quarterly results. Share prices jump or plummet on every piece of good or bad news. Management's attention becomes distracted by the need to report good results every quarter, year in year out, which is not an easy thing to achieve, even by the best of management. Sir, I, therefore, have come to the conclusion that quarterly reporting has severe disadvantage of forcing companies and market analysts to be too short-term and narrowly focused. Hence, I would like to ask the DPM and the Minister for Finance to reconsider the requirement to introduce quarterly reporting by listed companies from next year onwards. Sir, I would like to raise two issues relating to the on-going holding costs of companies. Currently, about 75% of Singapore's 100,000 companies are dormant and tax-exempt companies. The reason is that many Singaporeans wish to incorporate companies in readiness to start a business. However, most of these companies remain dormant for a long time. Meanwhile, the shareholders have to incur some unnecessary on-going costs, such as to appoint a qualified accounting firm to prepare audited accounts, and to appoint a professionally qualified company secretary to file accounts. These two requirements add to operating costs. I would like to ask the Deputy Prime Minister to consider whether the above two requirements can be reduced or simplified, especially for dormant or small companies. The total cost could amount to a few thousand dollars, which are not truly necessary for small or dormant companies. While we encourage companies to adopt good international reporting and accounting practices, I agree with the private sector's Company Legislation and Regulatory Framework Committee in its recommendations that these requirements should not be proscribed by law, especially for small and dormant companies. Naturally, active companies of certain size and activity should be required to adopt these practices for good public disclosure reasons. Sir, I support the Bill.

Sir, Mr Leong Horn Kee raised two points. First is on the quarterly reporting requirement, and the second is on the audit requirement for dormant companies. On the quarterly reporting requirement, this issue had been brought up last year when the Disclosure and Accounting Standards Committee (DASC) issued its draft report for public consultation. Some listed companies felt that the requirement for more frequent reporting would add to cost and could lead to short-term focus, as Mr Leong pointed out. However, there were other respondents, such as investors, who supported the DASC's proposal, because they would like listed companies to be more transparent and to have more timely disclosures. America, Canada, Thailand and Malaysia all have quarterly reporting for listed companies. Quarterly reporting is also required for companies listed on Hong Kong's Growth Enterprise Market (the GEM market) and the Tokyo's Stock Exchange's mother market for start-ups. Hong Kong and Tokyo are considering having quarterly reporting for all listed companies, in other words, for their main boards. Australia and United Kingdom currently require six-monthly reports for their listed companies. It is an issue where there are trade-offs. But, on balance, the DASC felt that quarterly reporting would benefit the listed companies in the long run, as investors would gravitate towards more transparent companies. In addition, quarterly reporting would also help to improve Singapore's transparency and standing as a world-class business and financial centre. To give the listed companies enough time to prepare themselves, the DASC has recommended a transition period, before the quarterly reporting requirement is imposed, which has been accepted. We do not expect compliance cost to increase significantly with quarterly reporting, because the financial results that are used for the quarterly report do not need to be audited. Many listed companies would submit regular financial reports to their Board of Directors, and the additional cost involved in presenting these reports to the public should not be too high. Some listed companies in Singapore have already started doing quarterly reporting. Drawing from the experience of these companies and countries which have started quarterly reporting, listed companies in Singapore should not face too much difficulties in implementing quarterly reporting. Mr Leong's second point has to do with statutory audit for small and dormant companies and the recommendation to remove the statutory requirement for private companies to appoint professionally qualified company secretaries. I thank Mr Leong for his comments. In fact, the Company Legislation and Regulatory Framework Committee has received similar feedback on the two proposals from the business community. The Committee's review is still on-going. The Committee has posted its draft report on the Internet for public feedback. Public consultation ends on 31st of July. I would look forward to Mr Leong making his comments to the Committee which will take them into consideration, together with other comments from the public consultation, before submitting its final recommendations to the Government.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Lee Hsien Loong]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Business Registration Act provides the basic framework of governance for sole proprietorships and partnerships in Singapore. The Business Registration Act was last amended in April 2000. Sir, I have highlighted in the Second Reading of the Companies (Amendment) Bill that the Registry of Companies and Businesses ("RCB") is working on an electronic filing system called BizFile. As in the case of the Companies (Amendment) Bill, this Bill seeks to introduce legislative changes that would facilitate the implementation of BizFile for businesses in Singapore. This Bill also seeks to streamline certain procedures and provisions in the Business Registration Act. Sir, I shall now highlight the main amendments proposed in the Bill. Removal of the Need for Physical Signatures, Certificates of Registration, Statutory Declarations and Affidavits

As in the case of companies, BizFile would simplify the process for business owners to register their businesses and update their records with RCB. The user need not submit any hardcopy forms, declarations and affidavits. Clause 6 amends section 9 to dispense with the need to issue hardcopy certificates of registration as evidence of registration. The hardcopy certificate would be replaced by an electronic notification. Section 9 would also be amended to remove the requirement for the business owner to display a hardcopy certificate of registration. Any member of public who wishes to check the registration status of a business can do so online, at no charge. However, if a business requires hardcopy certificates of registration for other purposes, such as for submission to overseas regulators, it can still obtain hardcopy certificates from RCB upon the payment of a fee. Removal of Pre-Registration Checks for Similar Names Sir, in the Second Reading of the Companies (Amendment) Bill, I have explained the rationale for removing the requirement for the Registrar to do pre-incorporation checks for similar names. I have also explained how the proposed removal would benefit the business community and how there would be sufficient safeguards to protect the interest of incumbent companies and businesses. Clause 8 of the Business Registration (Amendment) Bill aligns the provision in section 11 with the corresponding provision in the Companies (Amendment) Bill. Under the new section 11, the Registrar will no longer do pre-registration checks for similar names. Mr Speaker, Sir, the proposed amendments in this Bill are expected to benefit business owners in terms of lower costs, more efficient service and greater convenience. It would also align RCB's practices with its counterparts in the US, UK and Australia, and allow RCB to provide better service to its customers. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I wish to speak in support of this Bill. As the Deputy Prime Minister has explained, the Bill will facilitate the implementation of electronic filing for companies via BizFile and simplify some procedures for business registration. I particularly support the intent and trend adopted by the Government to make business registration easier, cheaper and faster. This is the basic purpose of BizFile. Sir, in line with this approach, I would like to raise two suggestions to the Deputy Prime Minister. The first suggestion is with regard to the registered address of a business. At present, the requirement is that businesses must be registered in a business address. A company is not allowed to register a residential address as the registered business address. We know that many Singaporeans have formed companies with the intent to eventually start a business. Pending the start of the business, these companies are dormant. The need to be registered in a business address means that companies often have to be registered with business addresses of law firms and audit companies. Though small, often there is a fee to be paid. For the firms whose addresses are being used as the business address, this requirement adds to unnecessary administrative and correspondence work. Hence, I would like to suggest that the Government consider allowing residential addresses to be used as registered and correspondence addresses of firms. In addition, the present residential addresses are not permitted to be used for conducting businesses, except for certain approved purposes, such as IT-based start-ups. So as to foster the growth of a more entrepreneurial climate and a more business-friendly environment, I would like to ask the Deputy Prime Minister to consider liberalising the restriction on the use of residential addresses for the conduct of business. Of course, the allowed businesses should not create a disamenity to the residential neighbourhood. Singapore does not have many houses with garages, so we cannot boast that many bright ideas from Singaporeans germinate from garages. But many Singaporeans live in HDB flats. Therefore, we should be proud to say that many of our great businesses sprouted from the living rooms of HDB flats. My second suggestion, Sir, is with regard to liquidation of companies. We can now claim that it is very easy to form a company in Singapore, especially with the advent of BizFile. I am not sure whether we can say the same for the liquidation of companies. As I have said earlier, many Singaporeans form companies in preparation to start a business. However, several of these businesses remain dormant and may never see the daylight of a day of business. Finally, they have to be closed. Sir, I would like to suggest that the relevant bodies study the procedures and requirements in the liquidation or closing of companies. I am told that, typically, liquidation of a company costs between $5,000-$15,000. For a small or dormant company, this would be a large sum. I concede that regulations on liquidation of companies should require more careful handling so as to protect creditors. I would like to request that the procedures should be simplified and made cheaper, if possible. One suggestion is to use BizFile for electronic filing of closing of dormant companies. Sir, I support the Bill.

Mr Speaker, Sir, Mr Leong raised two points. First, using home addresses for businesses to register their addresses. We have, as Mr Leong pointed out, a Technopreneur Home Office (THO) Scheme. The Technopreneur Home Office Scheme was started in 1999 to allow a businessman who qualifies under the Scheme to register his residential address as his business address, and the idea was to promote technopreneurship by reducing start-up cost. There is a good reason for separating commercial activities from residential areas. We need to ensure that the use of residences to conduct businesses will not disturb neighbours and affect the living environment. Therefore, only certain types of business activities, for example, those that are not noisy and do not cause pollution, are allowed. Mr Leong mentioned dormant companies. With the new BizFile arrangement with the Registry of Companies and Businesses, one can set up a company within a few minutes. So the need to set up a dormant company well in advance, before a person actually starts business, will be substantially reduced. I think that problem will be solved. As for which business we should allow to operate within a residential premise, this is something which we will have to study. If we are satisfied that the business does not cause problems to the neighbours, I think we can consider allowing it. It may or may not be a technopreneurship type of business. But I would urge Mr Leong to consider the point of view of neighbours of people who do business at home. Because if they have a business where there are lots of customers coming and going, or where there is noise, smoke or smell - as an MP, I am sure Mr Leong would have met many such cases - then he has to answer to the neighbours as well as the person who wants to do the business. A balance will have to be struck. Mr Leong also asked about simplifying process of liquidation. Here, I agree with Mr Leong that we need to strike a balance between having safeguards to protect creditors and employees and, on the other hand, not imposing unnecessary business cost. To encourage people to start businesses, we must not make it too onerous and costly for those who have failed and have to exit. In recent years, the Government has reviewed the bankruptcy law to make it easier for people who have failed in their business ventures to come back and try again. As part of the review of our Company Law, the Company Law Review Committee (CLRC) is also looking at ways to streamline our insolvency legislation and lower the costs to companies that are going through judicial management and liquidation. The CLRC has also recommended that we study and learn from the developments in the major jurisdictions. For example, the UK has recently started its review on its insolvency regime. The UK's review was prompted by the need to promote an enterprise culture and to encourage entrepreneurs who have failed honestly to try again. At the same time, the law will continue to provide sufficient safeguards for the protection of creditors and employees. So, this is something which the CLRC will have in mind as it comes out with its recommendations.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Lee Hsien Loong]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, under the Parliamentary Pensions Act, a political office-holder from Political Secretary to Prime Minister serves on pensionable terms. The post of Mayor is a recent creation. Hence, it is currently not included in the Parliamentary Pensions Act. We now have five Community Development Councils, each led by a Mayor who carries substantial responsibility. A Mayor's remuneration and its position in the Table of Precedence are between the Minister of State and the Senior Parliamentary Secretary commensurate with the responsibilities of his office. The Bill amends section 2(1) of the Act such that service in the office of Mayor, regardless whether it is before or after the commencement of this Bill, will be reckonable for the purposes of qualifying for an office-holder's pension. Under the Parliamentary Elections Act, Sir, the holder of any political office who does not serve long enough before retirement to qualify for an office holder's pension but who is otherwise eligible for a Member of Parliament's pension may have the whole or part of the office-holder's service reckonable towards the Member's pension eligibility. Section 6(2) of the Parliamentary Pensions Act is amended such that a Mayor who is similarly eligible for a Member's pension, but who has not served long enough to qualify for an office-holder's pension may add two-thirds of his service as Mayor to his Member's pension eligibility. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, according to the explanatory note to the Bill, the amendment will in fact allow the time served by a Mayor to count in two ways. First, it can be counted as service towards an office-holder's pension. Secondly, if he does not qualify for an office-holder's pension, then his years of service as a Mayor can also count as his period of service towards a Member's pension. This amendment seeks to put the position of Mayor together with office-holders, such as Prime Minister, Deputy Prime Minister, Speaker and Ministers. Sir, these are public officers under the Constitution and it requires its holders first to be elected into Parliament. I believe this is why their pensions are under Parliamentary Pensions Act, rather than under the civil service Pensions Act. These officials direct and oversee matters affecting national security, foreign affairs and other policy matters, and they should be recognised. The question is whether the appointment of Mayor can be considered as public office in the same category. The Mayor is not appointed under the Constitution, or any law passed by Parliament. Rather, the Mayor is appointed under the rules of the People's Association Act. These rules are designated by the Board of PA, and Members of the House did not have a chance to consider whether such Mayors are required in the first place. Now, the House is being asked to consider allowing public funds to be used to give pension to Mayors. Is the People's Association expecting the House to rubber-stamp their plans, which will be put in place, without consulting Parliament? Does this make sense, since Parliament was not involved in approving or disapproving the creation of such an appointment in the first place? Secondly, should service as a Mayor count as additional service to qualify for a Member's pension? Under the current Act, a Member should serve a total of nine years as an MP before qualifying for a Member's pension. This amendment will allow time served as a Mayor to count as additional years to be added on to his service as an MP. Why does the Government see the necessity to do this? Is the Government not confident that the Mayors can chalk up nine years as an MP? Under the People's Association CDC Rules, the criteria for the appointment of Mayor have changed twice. In the most recent amendment on 24th November 2001, there is no longer a requirement for a Mayor to be the Chairman of a town council. In other words, so long as the potential Mayor is Chairman of CDC, he will qualify for appointment as a Mayor. Why was this change made? It must be because I believe the Board of the PA, headed by the Prime Minister, considers that there would be Mayors who may not be Town Council Chairmen, ie, they are not elected Members of Parliament. Is it correct, in principle, to give them a Member's pension when they have not served enough years as a Member? I am of the view that to allow the amendment will make the term "Member's pension" under the Act meaningless. Sir, to me, it makes a mockery of Parliament by asking Parliament to provide pensions for such an appointment without consulting Parliament for the appointment in the first place.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.20 pm.

Sitting accordingly suspended at 3.00 pm until 3.20 pm. Sitting resumed at 3.20 pm

Debate resumed.

Mr Speaker, Sir, the Parliamentary Pensions Act was enacted in 1978 to provide for the grant of pensions and gratuities in respect of service as Members of Parliament and as holders of ministerial and other offices. My understanding is that over the last decade or two, the emphasis has been to convert the pension scheme and encourage the granting of Central Provident Fund for our civil servants and employees. Of course, as volunteer employers, one can make voluntary contributions towards their respective CPF accounts. Would it, therefore, not be in line with the general policy of the Government to also convert pensions for Members of Parliament, ministerial and other offices, to keep in line with the rest of the working people in Singapore? In this way, our citizens would observe that Parliament has not introduced in any way any form of discrimination, as perceived by them, in favour of MPs, Ministers or other officers connected to Parliament, eg, Mayor, that is being introduced through this proposed amendment.

Mr Speaker, Sir, regarding Mr Low Thia Khiang's point on why we did not come to Parliament to seek approval for the creation of the post of Mayor, and the formation of Community Development Councils (CDCs), it is the prerogative of the Government, the Prime Minister in particular, to decide what sort of structure of government he wishes to have. Since 1997, we have created Community Development Councils to help the Government to carry out and implement the policies of some of our Ministries. Hence, we have Community Development Councils. In the past, because we had small Community Development Councils, we therefore required the Chairman, if he is to be appointed as a Mayor, to also become the Chairman of a Town Council, apart from being the Chairman of a Community Development Council. But for those Chairmen of Community Development Councils who are not Chairmen of Town Councils at the same time, then we say that they will carry on and be called Chairmen of Community Development Councils, and not Mayors. In 1997, we had two Mayors, in Tanjong Pagar and Marine Parade GRCs, because both Mr Eugene Yap and Dr Ow Chin Hock were Chairmen of both Councils - the Town Council as well as the Community Development Council. After the last General Election, we thought that, for better organisation, efficiency and for synergy, we should enlarge the Community Development Councils by reducing the number of CDCs from nine to five. By doing so, therefore, we increased tremendously the responsibilities of the Chairmen of Community Development Councils, if they were required to be Chairmen of Town Councils, and they may be loaded with unnecessary implementation and operational duties. So, we decided that we make an amendment to the rules to only require him to be the Chairman of the Community Development Council in order to become the Mayor. In so doing, we also recognise that this is a very important position and, obviously, we will not simply appoint anyone unelected to be the Chairman of the Community Development Council or as Mayor. That will not serve the objectives of the Government. We could just have General Managers. In fact, for the administrative details and implementation, we have the General Managers of the CDCs running the day-to-day operations. When it comes to direction, strategy, policy and, in some instances, even talking to the Ministers concerning what the CDC should do, we needed the Mayors to do the job. Hence, the post of Mayor was created, and he has substantial responsibilities and, therefore, he shall be an elected person. There will be no occasion that we can think of that will make us appoint an unelected person to be a Mayor. I think Mr Low can be assured of that. In the same way, we have made the Town Council Chairman an elected MP. On the question of whether it is fair to compare the Mayor to other appointments in the Parliamentary Pensions Act, eg, the Prime Minister, Ministers, Ministers of State, Parliamentary Secretaries and the Political Secretary, are they of the same level or why should we put a Mayor in the same category as office-holders, office-holders are important political appointments, because they help the Government carry out its objectives, and these appointments are decided by the Prime Minister. Mr Low said that the Prime Minister, Ministers and Parliamentary Secretaries are defined in the Constitution and, therefore, the power is derived from what is provided for in the Constitution. In the Constitution, we do not have posts such as Ministers of State nor Political Secretary, and yet we have these posts in our Parliamentary Pensions Act. In the case of Political Secretary, he does not even need to be an elected MP. The Prime Minister, with his prerogative and powers, can appoint any person to be a Political Secretary, and he is fully entitled to pension under the Parliamentary Pensions Act, albeit not being an elected person. Sir, there is no reason why Mayors should not be considered in the same category and be eligible for a pension in the same way as other office-holders. For a Mayor who is a new Member - a "new Member" means any Member of Parliament elected after 1995 - he is not eligible for an MP pension. He is eligible for CPF. So, for a Mayor who is a new Member, he needs to accumulate eight years of service as Mayor in order to qualify for a pension. In the case of an old Member who has got reckonable pensionable service as an MP, then his time spent as Mayor, if it is less than eight years, can be computed for the purpose of considering his MP pension eligibility. Hence, two-thirds of his service as Mayor is counted as an MP's service. Among our present Mayors, we have both examples - those who are old Members and those who are new Members. But, for new Members, they need to serve long enough in order to qualify for a pension. Sir, I have, in a way, dealt with Mr Low Thia Khiang's questions. As regards Mr Chandra Mohan's question, I was quite curious as to why he is interested in Parliamentary pension when the subject does not really concern him. I now understand he is talking about a different issue, like why do we want to consider office-holders' appointments even as pensionable. He says that the trend has been towards CPF. Yes, indeed, it has been, but there are certain key appointments that we have kept as pensionable service, eg, the Administrative Service, Foreign Service and Intelligence Service are still pensionable services. There are good reasons for this. Similarly, for office holders, we think that it is important that they remain on pensionable service and, hence, we keep them on pensionable service. But for Members of Parliament, we have made a decision way back in 1995 that all new Members of Parliament, elected henceforth, shall be paid CPF.

Sir, I wish to seek a clarification from the Minister. The Minister, in his answer, said that the appointment of office-holders is the prerogative of the Prime Minister. It seems to me that the Minister is saying that the job of Parliament is just to approve the spending of public funds for whatever appointments that have been created by the Prime Minister. Should that be the role and job of Parliament?

It is definitely not the role of Parliament to decide on what posts to create. That is the prerogative of the Prime Minister and the Government. As to whether the post should be pensionable or not, in certain instances, like in the civil service, it is totally the prerogative of the Government to decide which post should be pensionable and which post should not be pensionable. In the case of office-holders, because they are elected Members, we have the Parliamentary Pensions Act. That is why we have come to Parliament to amend this Act to include the post of Mayor in the Parliamentary Pensions Act, for qualification of pension.

Further clarification, Sir. Does the Minister consider Mayor as a public officer?

Can Mr Low explain what is the meaning of "public officer"? 3.32 pm

Order. Mr Low, before you move on, can I ask the Deputy Leader to move the motion for exempted business?

Resolved,

That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Mah Bow Tan].

Debate resumed.

Mr Speaker, Sir, I understand that there is a Constitution of the Republic of Singapore (Mayor) Order 2002 which says that "Mayor is not considered as holding public office". Pensions are supposed to be given to public officers. Would the Minister clarify that?

Sir, let me explain the confusion that Mr Low seems to have. The Mayor's post is created and appointed by the Prime Minister. We have to make sure and be clear that the post is not an office of profit, just like Ministers' posts are not considered as office of profit. Therefore, the latter are already in the Constitution. But in the case of Mayor, it is not. Therefore, under Article 2(5) of the Constitution, the President has made an order to consider the post of Mayor as not being an office of profit. That is the answer to his question.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Wong Kan Seng]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Terrorism (Suppression of Financing) Bill is to give effect to the International Convention for the Suppression of the Financing of Terrorism (CSFT) which Singapore signed on 18th December 2001 and the United Nations Security Council Resolution 1373. As a member of the Financial Action Task Force, Singapore had adopted a set of Eight Special Recommendations, one of which was to take immediate steps to ratify and implement the Convention. Sir, the terrorist threat that Singapore and the rest of the world are facing today is like nothing we have ever encountered before. The recent events of the past year have shown that terrorism has become a transnational phenomenon, one that no country is immune to. Given the indigenous resources and extensive reach of these groups, the threat of terrorism will continue for a long time to come. It is widely believed that many terrorist activities are funded through a series of money laundering operations. Hence, targetting the financial aspect of these transnational groups will be an effective way to cripple and disrupt their operations. The integrity of our financial systems must be prevented from being used by terrorist organisations. We already have a vigorous system of checks to detect and counter criminal use of the financial system. The Terrorism (Suppression of Financing) Bill will further strengthen our ability to monitor such transactions and take appropriate actions. Let me now deal with the key provisions of the Bill. Prohibition against dealing with Terrorist Property (Part II of the Bill) Part II of the Bill covers prohibition against terrorist property. Specifically, we can target properties that may be used in connection with terrorist acts. Clause 2 of the Bill defines property as assets of every kind, whether tangible or intangible, movable or immovable, including bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts and letters of credit. Clauses 3 to 6 of the Bill make it an offence to provide or collect property for terrorist acts, provide property and services for terrorist purposes, use or possess property for terrorist purposes, and deal with property of terrorists. These prohibitions apply to every person in Singapore and any Singapore citizen outside Singapore who is dealing with terrorist property. These clauses give effect to Article 2(1) of the Convention. Besides giving effect to the Convention, these clauses also give effect to the United Nations Security Council Resolution 1373. Clause 7 of the Bill empowers the Minister to exempt a person from the prohibition against dealing with terrorist property. Disclosure (Part III of the Bill) Part III of the Bill imposes a duty of disclosure. The Convention obligates Singapore to identify and detect terrorist property for purposes of possible forfeiture. To meet this, clause 8 of the Bill imposes a duty on every person in Singapore and every Singapore citizen outside who has possession, custody or control of terrorist property, or information regarding a transaction in terrorist property to disclose such information to the Police. Clause 10 of the Bill also provides that every person in Singapore who has information which can prevent the commission of a terrorism financing offence, or assist in the apprehension, prosecution or conviction of a person for a terrorism financing offence to immediately inform a police officer. Further, clause 9 of the Bill empowers the Minister, by order in the Gazette, to require any person or class of persons to continually determine whether they possess terrorist property. However, let me assure the House that this will not be invoked unnecessarily. We foresee that this provision would be used for a person who is suspected of having dealings with terrorist property or persons who had previously had such dealings without their knowledge. Seizure, Freezing and Confiscation of Terrorist Property (Part IV of the Bill) Mr Speaker, Sir, Part IV of the Bill also spells out in detail the manner in which a terrorist property may be seized, frozen or confiscated. First, application for search and seizure. Clause 11 of the Bill empowers a High Court Judge to issue warrants for search and seizure of any terrorist property and restraint orders in respect of terrorist property. Clause 20 of the Bill provides that such warrants and restraint orders generally continue for six months but may be extended. Clause 14 of the Bill makes it an offence for a person to whom the order has been served contravene with a restraint order. Clause 21 of the Bill allows the Court to order the forfeiture of terrorist property. Clauses 12 and 22 of the Bill provide that the affidavit in support of the application for warrants for search and seizure of terrorist property, and for order of forfeiture, may be made by the investigating officer on his information and belief. Personal knowledge by the investigating officer that the property is terrorist property is not required. Clause 18 of the Bill further provides that the Attorney-General may apply to revoke or vary warrants or orders. Clause 24 of the Bill provides that if the Judge is satisfied that the property is linked to terrorists or that it will be used to facilitate or carry out a terrorist act, the Judge shall order the forfeiture of the property. Where the Judge refuses an application for forfeiture, clause 26 of the Bill provides that the Judge shall also identify the property and declare that the property is not subject to forfeiture. Second, management of terrorist property. Clauses 15 to 17 set out the appointment of a manager of the terrorist property who can be the public trustee. Clause 28 of the Bill also provides that the property may continue to be seized, restrained or managed by the appointed person, pending any appeal. This is to prevent the property from being scurried away. Clause 29 of the Bill also empowers the Judge to nullify any transactions that have occurred after the property was seized or restrained, except where such transactions were carried out in good faith. Third, safeguards. Clause 13 of the Bill provides that the Judge may require undertakings from the Attorney-General with respect to the payment of damages or costs for the warrant or restraint order. Also, clauses 19 and 27 of the Bill provide recourse for a person who has an interest in the property that was seized, restrained or forfeited, to apply to revoke or vary the warrant or order, or set aside the order of forfeiture within 60 days of the order of forfeiture. Mutual Assistance and Extradition (Part V of the Bill) Part V of the Bill provides that the International Convention for the Suppression of the Financing of Terrorism can be used as a basis for mutual assistance and extradition with another state party to the Convention without the need for a bilateral treaty. Specifically, clause 32 of the Bill empowers the Minister for Law to make an order to apply the Mutual Assistance in Criminal Matters Act to a state party to the Convention so as to allow assistance to be rendered in respect of investigation or prosecution of a terrorism financing offence. Hence, all the requirements for Mutual Assistance in Criminal Matters Act will apply except for the requirement of a treaty. The assistance that is rendered may be subject to conditions or exceptions in the order that is made under the Mutual Assistance in Criminal Matters Act. The Convention can also be treated as an extradition treaty in respect of terrorism financing offences between Singapore and another state party to the Convention. This is similar to the Hijacking of Aircraft and Protection of Aircraft and International Airports Act. Jurisdiction (Part VI of the Bill) Sir, terrorism is essentially a transnational crime. We cannot deal with terrorism effectively if we do not cooperate with other nations, or if we have powers only to deal with offences committed within Singapore. The Convention thus requires states to prosecute offenders who cannot be extradited. Part VI of the Bill covers extra-territorial jurisdiction. Specifically, clause 34 provides for extra-territorial jurisdiction for offences under clauses 3, 4 and 5 of the Bill that are committed outside Singapore by Singaporeans or any person. Where a Singapore citizen commits an offence relating to the dealing with terrorist property or failure to disclose information, he may be dealt with as if the offence had been committed in Singapore. Miscellaneous (Part VII of the Bill) Mr Speaker, Sir, the Bill also covers other miscellaneous areas under Part VII of the Bill, eg, clause 35 which is a standard provision on the commission of an offence by a corporation to prevent anyone from seeking refuge behind corporations. Clause 37 of the Bill empowers the Minister to amend the Schedule by an order published in the Gazette. The Bill contains a Schedule on actions which constitute terrorist acts, such as an act constituting an offence under the Hijacking of Aircraft and Protection of Aircraft and International Airports Act. Singapore is not yet a signatory to all the treaties and Conventions relating to terrorism. As and when we become a party to these treaties and Conventions, we can add on to the Schedule. Clause 38 of the Bill allows that the Minister may also make regulations for the purpose of carrying out or giving effect to the provisions of the Bill. This provides the Minister the flexibility to take quick action against terrorist financing. Finally, clause 39 makes a related amendment to the Monetary Authority of Singapore Act to repeal and re-enact section 27A so as to empower the Authority to make regulations concerning any financial institution or class of financial institutions in order to discharge any obligation binding on Singapore by virtue of a decision of the Security Council of the United Nations. Mr Speaker, Sir, this Bill is testimony of Singapore's commitment to the international fight against terrorism. Once the Bill is passed, we will take actions in accordance with it. We are playing a cat-and-mouse game with the terrorists; they will be looking for loopholes to exploit, even as we take measures against them. We will monitor the effectiveness of the Bill, and fine tune it further if necessary. Sir, I beg to move. Question proposed.

Sir, terrorism has to be fought on many fronts, not least of all, the financial front. To deprive terrorists of funds would ultimately lead to the saving of lives and properties. There is undoubtedly a great public interest to be served here, and I therefore strongly support this Bill. At the same time, there must be some care to ensure that people or institutions are not wrongly accused of supporting terrorism. Such accusations must only be made on the strongest evidence, as the consequences of a wrong accusation may have severe repercussions on individuals or institutions. This Bill must therefore be carefully scrutinised in this House. Even defining what is a terrorist is not an easy thing. I would start by looking first at the definitions of "terrorist" and "terrorist act" in this Bill. Sir, the definition of a "terrorist" in clause 2 is tautologous, ie, the definition of "terrorist" contains the word itself. Thus, a "terrorist" is someone who commits or attempts to commit any terrorist act. The true meaning of a terrorist therefore has to be found in what he does or threatens to do, and why he wants to do such acts. This is defined in sub-clause 2. It involves nine types of actions and two types of intents. First, with regard to the type of actions. They involve the use of the word "serious" as in "serious violence against a person", "serious damage to property", or "serious risk to the health or the safety of the public". I wonder whether this is too restrictive. Anyone planning a criminal act that would amount to a seizable offence, with the appropriate intent should, I would have thought, be enough to trigger this provision. The key difference between a criminal act and one that amounts to a terrorist act seems to be in the intent. If the act is one of the nine, done with the intention to influence or compel any government or international organisation to do or not do something, or to intimidate the public or a section of the public, it amounts to a terrorist act. This is a good attempt at defining terrorist acts, but it requires a great deal of care in interpreting or using it. To take one example, where a gunman robs a goldsmiths shop, and puts all those around him in fear - shop assistants, members of the public nearby, customers - he can actually qualify as a terrorist under that definition, because he threatens serious violence to persons with the intent to intimidate a section of the public under the definition. Does that mean that his property can be forfeited? Of course, if he robs the shop, intending to benefit a terrorist entity, he is within the definition. I hope the Minister will ensure that the definition will be applied with care, and not misused. Sir, one of the fundamental principles in criminal justice is the burden and standard of proof. Everyone knows that the burden on the prosecution is to prove a case beyond reasonable doubt. The standard of "beyond reasonable doubt" is to ensure the public's confidence in the administration of criminal justice, that no one should be subjected to punishment without strong proof. The Bill has some provisions that seem to affect this fundamental principle. First, let me say that I agree with the careful drafting of clauses 3 to 7, providing for the prohibitions against the collection, provision, possession or dealing of property to aid terrorist acts. Here, the burden on the prosecution is a heavy one, to prove beyond reasonable doubt. There are various types of intent - to collect, provide, possess or deal with property to support or facilitate terrorist acts. This is as it should be. Having said that, I would like to make two other references to the standard of proof that may give rise to concerns. The first relates to the power of the Judge to forfeit property. The Judge only has to be satisfied, on a balance of probabilities, that the property is one that is owned or controlled by the terrorist entity, or that it is used or about to be used by terrorists, given the seriousness of forfeiture orders, should the standard of proof not be higher? Forfeiture orders may result in the closure of businesses or the eviction of occupants in properties so forfeited. I would like the Minister to assure this House that the relevant authorities will ensure that the best proof be provided before an application for forfeiture is made. This is especially so as the application can be ex parte. The second issue I wish to raise is that clause 35 provides that a partner, director or manager, and other types of employees such as the secretary, may be guilty of one or more of the offences if his company, firm or society, is proved to have committed one of the prohibition offences set out in the Bill. Sir, clause 35 provides that the accused then has to exonerate himself by proving that the offence was committed without his consent or connivance, and that he had exercised all due diligence to prevent such an offence. Sir, this reversal of the burden of proof is a serious one, affecting the presumption of innocence that our criminal justice system is based on. Departures from this principle must be fully justified. I would ask the Minister what are the reasons for imposing on directors, managers, partners, secretaries and the like, this burden of exoneration. Again, we would want to be extra careful in accusing anyone of aiding and abetting a terrorist organisation. I hope that we will receive assurances from the Minister that the utmost care will be taken to obtain the best evidence against individuals or institutions before proceedings under this Bill are commenced against them. Sir, the September 11 incident has changed the world, and significantly affected the attitude of everyone when talking about the dangers of terrorist attacks. We must however not be paranoid, and we must guard against those who might take advantage of the current fear and paranoia to harm others by false accusations. I regret that while there is a duty on everyone to disclose what they suspect to be financial operations in aid of terrorism, there is no provision that would make it a criminal offence for someone to falsely and maliciously accuse another of such activities. The Bill does provide for the protection of those who made genuine disclosures, even if mistaken. But it does not provide for sanctions against those who might maliciously accuse their neighbours or business opponents of such activities. I would like to know what the Minister intends to do about such cases, if they do occur. Sir, we now live under the shadow of the terrorists. This Bill is a necessary measure in the global fight against terrorism. I am sure that this Bill will be an important addition to the armoury of laws that would protect Singapore from the terrorists and ensure that we are not a safe harbour for those who are involved in supporting or financing such activities. Sir, I support the Bill.

Sir, September 11, 2001 has left an indelible impact in the minds of everyone of the evils posed by acts of terrorism. That terrorism has gone global is a fact and its very act is indeed a crime against humanity. Terrorist threats to the public in Singapore are as real as the recent discovery of the network in Singapore and the neighbouring countries has shown. All these acts of violence can only operate with financial backing. The bigger the destruction, the bigger the financing involved. To deal with terrorism effectively, we must therefore strike at its very core, ie, the financing of terrorism. The financing of terrorist act is the lifeline that we will have to choke to disable any opportunity for such acts to be initiated. This Bill represents our contribution to global efforts to combat terrorism. I have no doubt that the Bill will have the support of the House. However, in making laws for this purpose, we need to balance the need for security and preservation of civil liberties. While in favour of the Bill, there are certain clauses that seem too wide or unclear. The Bill imposes strict guidelines on disclosures in two areas, and I would like to seek clarifications as they have implications on persons related to one another or to suspect. Take clause 8(1), accordingly, anyone in Singapore or outside Singapore who has information pertaining to any transaction or intended transaction belonging to a terrorist suspect is obliged to disclose such information. What this means is that any member of the terrorist's immediate family is charged with the obligation of disclosure. Such family members, like the spouse, children, parents or siblings, are more likely than not to have knowledge of the terrorist's affairs. Would such persons therefore be more likely to be subject to prosecution for breach of the duty of disclosure? This reminds us of the chaos created during the Cultural Revolution in China, where family members were obliged to tell on one another. The distrust and discord sown as a result of such legislation could lead to a breakdown of the family system. Would Singapore be heading towards such an eventuality if this Bill were passed without a review on its implications? Would it not be better for us to work on the responsibility and conscience of persons to be discerning in these areas? One other concern is that imposing a duty of disclosure on any Singapore citizen outside Singapore may be stretching the clause too wide. Would Singapore citizens overseas be exposed to peril? If a terrorist knew that a particular Singapore citizen, say, in London, had information about his transaction or proposed transaction regarding any property belonging to him or his terrorist organisation, what would the terrorist do with this Singapore citizen in light of this clause? Clause 11 on `Search and Seizure' raises a concern. The proviso permits a Judge, upon the application of the Attorney-General, to issue a warrant authorising any person (usually a Police Officer) to search any building and seize any property which the authorised person reasonably believes may be the subject of an order of forfeiture. What is worrying is that the Attorney-General may make such an application based on mere information and belief. The question is, to what extent can the Attorney-General rely on mere information and belief? The proviso in clause 21 authorises the Attorney-General to apply to a Judge to forfeit any property owned or controlled by or on behalf of a terrorist or a terrorist organisation, or any property that has been or will be used to facilitate or carry out a terrorist act. The concern here is that the Judge orders the property to be forfeited to the Government if he is satisfied, on a balance of probabilities, that the property falls within clause 21(a) or 21(b). One would have thought that a higher standard of proof of beyond reasonable doubt would be adopted. There is an intervening period from the moment a property is seized, pursuant to clause 11(1), till it is forfeited, pursuant to clause 24(1). During the intervening period, a Judge, at the request of the Attorney-General, may appoint a person to take control of, manage or deal with the forfeited property accordingly. It is disturbing to note that the person so appointed has the power to destroy property which has little or no value. Whilst we can appreciate the need to sell property that is perishable, I am of the opinion that no one should have the power to destroy property of little or no value unless it is ordered by the Judge to do so. Clause 16(5) empowers a Judge to order the destruction of any property if he is satisfied that the property has little or no financial or other value. I beg to ask what constitutes the extent of satisfaction. Also, what constitutes a balance of probabilities and, for that matter, what is meant by "beyond reasonable doubt"? I propose an amendment to clause 28 as follows: After sub-clause (c), perhaps we could add a new sub-clause (d) as follows: "(d) any property seized, restrained or controlled in accordance with sub-sections (a) to (c), which may bear interest shall be held in an interest bearing account; and the interest accruing on the property shall be added to it on its release or forfeiture." Mr Speaker, Sir, the basic objectives of the proposed Bill are admirable and deserving of our support. However, we must not in our enthusiasm to deal with terrorism fail to guard against any provisions which impinge on the protection for the common folks. In other words, we ought to ensure that the provisions in the Bill must also give adequate protection to the common man. On this note, I support the Bill.

Mr Speaker, Sir, I support the Bill. Perhaps one of the most important aspects of the Bill is the definition of the word "terrorism" or, more specifically, "terrorist act". Prof. Chin had earlier alluded to the definition and explained the meaning of the two limbs encapsulated under clause 2(2)(a). I take it from his comments, and even among us, that we have different ideas of what a terrorist act is. But I think we should not let this difficulty prevent us from making a decision, at least for the moment, on what we mean by terrorist act and what we should do about it. Sir, we all do not condone terrorism. If I may say so, even as of now, a less severe form of terrorism - extortion - is an offence under our Penal Code. Terrorism, as defined in the Bill, is not the way any civilised entity promotes itself. If any of us wishes to compel a government to do something, we do it through the legitimate political process. If we seek to sway the opinion of people, then we have to appeal to their hearts and minds, not by using fear of harm or violence. Sir, successful civilisations and nations are those which are able to muster the support of their people through a commonly accepted political process. The Mongols in the 12th century, for instance, were united under the leadership of Genghis Khan. As a nation, they shared a common vision for themselves, and maybe their common desire for power led them to conquer others. It would have been, I believe, very difficult for Genghis Khan to achieve so much, if he merely relied on instilling fear in his own people to achieve his aims. But, did he instill fear in other people? Yes and no. But the result showed the difference. By the time his grandson, Kublai Khan, reigned, the Mongol Empire covered almost the whole of mainland Asia and parts of Eastern Europe. In places where the Mongols embraced local political cultures, like China and in Northern India, the people continued to make progress. However, in places where they merely plundered in order to subdue, like in Baghdad or Central Europe, the contribution of Mongol rule was either miniscule or negative. If the people do not willingly accept a certain rule or ideology, very soon that rule will crumble. The use of force and fear, Sir, to instill compliance is not mere ancient history. The totalitarian regime in the previous USSR was known to have used, quite extensively, force incursion so as to ensure acceptance of its ideas. Dissenters were sent either to the gulag or some other remote places or made to simply disappear from the records. More significantly, the fear of such reprisals caused a terror among the people. For some time, the people bowed and followed but, within 70 years, the USSR crumbled. Control by the state must be pursuant to genuine consensus, not the other way round, where consensus is pursuant to genuine control. There may be groups of people who behave in a manner so repugnant to one's beliefs and values. But no one has a sacred right to impose forcibly on them one's own values and laws by the use of fear and threat of serious harm. Even if one does so, the effect is always superficial, as history has shown. Thus, Sir, terrorism has no place in promoting any civilisation or the cause of any ideology or major religion in the world. There is thus a need to distinguish terrorism from other legitimate acts of war which, I think, the Bill seeks to do in its definition section. The Bill excludes from the definition of terrorist act, legitimate acts of war as governed by international law. Sir, war too has its rules. And if we look at Alexander the Great, Julius Caesar, Han Wu Ti, Mohamed, Charlemagne, the wars fought by them were in accordance with rules accepted by the peoples involved. That is why no one ever accused them of terrorism before or now. For instance, acts which definitely would harm women, children and other non-military civilians were and are not legitimate military acts by the standard of any civilised society. It is therefore important that we do not allow any group, religious or otherwise, to be inspired or encouraged by terrorism. Sir, the greater part of humanity abhors terrorism, and must seek ways to curtail it. I see that this Bill seeks to do just that, at least in contributing towards our common campaign towards terrorism. Though it may be argued that the cause of terrorism is political and social, one of the engines of terrorism is finance. Our effort to deal with the financial aspect of terrorism is one of the many prongs that we, as a nation, should apply to effectively deal with this issue. The Internal Security Act deals mainly with security aspects, particularly with the individuals directly involved in terrorist acts. But terrorism today involves international network. Funds and goods are transacted in the process. The ISA and existing legislation do not say much about this. So this Bill seeks to address this problem. In this regard, I suggest that the Hon. Minister and this House continue to formulate ways to address the political and social elements that breed terrorism, while we support this Bill to address the issues as promulgated therein. Sir, I support this Bill.

Mr Speaker, Sir, I rise in support of the Bill. It is timely for Singapore to act on suppressing the financing of terrorists' activities. Without access to funds or financial support, it would be more difficult for terrorists to conduct or sustain their acts of terror. We will be tightening the noose around their activities, which are most likely to involve mass destruction and hurt innocent lives. This Bill should pose as a deterrence to potential would-be terrorists who intend to use Singapore to transfer funds or finance terrorists here or elsewhere in the world. Through this Bill, we will send a strong signal to those terrorists not to mistake Singapore as a safe haven for their funds. The Bill also reminds all Singaporeans to remain vigilant and not contribute innocently to any terrorist acts indirectly. I do not want to go into the definition of "terrorism", which my learned colleague has so eloquently covered already. However, I agree with his definition. May I highlight that terrorist activities usually involve long-term planning and patience. Their activities may go unnoticed for years, and they are masters of substitutes, and might have assimilated into our society as tenants, neighbours, colleagues or friends. Singaporeans must realise that that is the playing field today, and be more vigilant. We need not change our lifestyle, but it is important that we bring home the message that Singaporeans must not be complacent. Terrorism does strike at close range, in the region, and right here in Singapore. For example, it took years to plan the September 11 disaster that saw the collapse of the twin towers of the World Trade Center, and the loss of thousands of lives in the United States. Unfortunately, the culprits had gone unnoticed and undetected for a while prior to September 11. There must be hundreds of innocent people who are now, on hindsight, regretting not paying more attention to the hijackers who had led lives along theirs. During the years that terrorists planned their acts of terrorism, many innocent people may have concluded business dealings with them or may even have rented their properties or have contributed to their acts unknowingly. These innocent people should not be unreasonably classified as terrorist sympathisers, and have their properties confiscated under this Bill. They should not be penalised if they were ignorant of the on-going. In enforcing this law, Mr Speaker, Sir, I ask that we have to be firm and professional, so as not to unduly put stress on the business community. Sir, I support the Bill. 4.15 pm

Mr Speaker, Sir, Prof. Chin suggested that the use of the word such as "serious" in the definition of "terrorist act" in the Bill may be too restrictive. The reasons for this restrictive definition are as follows: Firstly, this is a Bill which gives effect to the International Convention for the Suppression of the Financing of Terrorism. As such, the Bill's definition of "terrorist act" therefore adopts the wording of the Convention, and they are totally consistent with what is being used in other countries as well. The Convention's definition of "terrorist act" includes an act intended to cause death or serious bodily injury to a civilian when the purpose of such act is to intimidate the population or to compel a government to do or refrain from doing any act. Secondly, Singapore is not alone in adopting such a definition. Our definition is also consistent with the definition used in other countries' similar legislation on terrorism in the Commonwealth countries, such as the United Kingdom's Terrorism Act 2000, Canada's Anti-Terrorism Act and the Australia's Suppression of the Financing of Terrorism Bill. Since this Bill is to give effect to an International Convention, there is no reason for us to deviate from the international standards adopted. Finally, this is also to maintain consistency with the definition of "terrorist acts" used in our own law, and that law is the United Nations (Anti-Terrorism Measures) Regulations. So, all those words we find in this particular Bill are exactly the same as what we already have in our United Nations (Anti-Terrorism Measures) Regulations. We are not doing anything different. Prof. Chin has suggested that anyone planning a criminal act which amounts to a seizable offence should be caught by the definition of "terrorist act". In my view, to define "terrorist act" to include any seizable criminal offence may be too wide and over-inclusive. We should target our laws against offences which clearly have a nexus with terrorism. Seizable offences, with reference to non-Penal Code offences, are offences which are punishable with imprisonment for a term of three years or more. Prof. Chin has also raised the example of a gunman who had robbed a goldsmith shop, and asked if his property can be seized or forfeited. Let me reiterate that the main focus of this Bill is not about criminalising terrorist acts, but about criminalising the financing of terrorist acts. As such, whether the robber's property will be forfeited will depend on whether a person who has committed any of those provisions relating to the financing of terrorist acts. A mere commission of a robbery will not make his property liable to seizure or forfeiture under the law even if he had, in carrying out robbery, intimidated a section of the people around the shops. Let me give a real life example of this. On 18th May 2001, members of the Kumpulan Mujahideen Malaysia (KMM), staged a robbery of the Southern Bank in Peninsular Malaysia. They were initially regarded as robbers. But investigations subsequently revealed that their actions were in support of the KMM, which aimed to wage a holy war against the Malaysian government to establish a purist Islamic state. Obviously, then they were more than just ordinary robbers. So, by our definition, they will be regarded as terrorists. And this is not the only example that happened last year. In the mid-1970s, three gunmen robbed a bank of RM122,000 in Petaling Jaya. Later, it was found that they were also responsible for two murders. If these were all, then, of course, those who were found and convicted subsequently will be convicted as robbers and murderers. But when it was established that they were actually members of the CPM Marxist-Leninist Faction and had robbed to augment the CPM's funds, then, obviously, they were more than just ordinary robbers and murderers. The two persons they murdered under the CPM's instruction were the Inspector General of Police, Tan Sri Abdul Rahman in 1974, and the Chief Police Officer of Perak, Tan Sri Koo Chong Kong in 1975. So, again, by definition under our Bill, we will consider them as terrorists. Prof. Chin is correct in asserting that the key difference between a purely criminal act and one that amounts to a terrorist act lies much in the intent or the motive established. But this is not unique to the current Bill. Intent is the key ingredient in determining culpability, even in purely criminal actions and offences. Often, in criminal cases, there may potentially be more than one offence in the laws which can apply to the same action and the same set of circumstances. Which one to proceed with requires not only interpretation, but commonsense and judgment. Let me assure Prof. Chin that there is no lapse in the handling of such situations in criminal cases. In determining offences under this particular Bill, the law will always be applied with care and due diligence. We will always be very careful, and not simply abuse the powers provided for in the Act. On the question of burden, there is indeed a high burden on the prosecution, because the offences created by the Convention and the Bill are very serious in nature. For example, any person convicted of providing or collecting property for terrorist acts can be sentenced to imprisonment for up to 10 years, or to a fine of up to $100,000. Since the offences are serious in nature, then we have deliberately only targeted the provisions against persons who have knowingly or intentionally committed such acts. This will ensure that the innocent persons are not prosecuted for such offences. But if there is evidence to show that the person has turned a blind eye to the commission of such acts, then the same provisions will allow us to prosecute him, as these provisions also contain a lower threshold of "having reasonable grounds to believe" in cases where it is not possible to prove that the person has wilfully or knowingly committed such acts. So I think there is enough flexibility built into the legislation to enable us to deal effectively with the various types of offenders. Prof. Chin and Mdm Ho, I believe, also expressed concern on the order of forfeiture and the Judge has to be satisfied on the balance of probability, and also the question about ex parte. Let me first clarify Prof. Chin's point on ex parte. The application for the issue of warrant of seizure or restraint order under clause 11 is made ex parte because there is a need to ensure that the offenders do not have a chance to dispose of their properties. But once the property is seized or restrained under clause 11, the forfeiture application, which is made under clause 24, is not made ex parte. The owner of the property will have a right to be heard before the Judge orders forfeiture of the property. As for the use of balance of probability as a standard of proof for forfeiture, this is not something new that we are doing. The same standard is also found under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act in respect of forfeiture of proceeds derived from drug trafficking and other serious crimes. The Bill therefore maintains the same standard of proof for the purpose of forfeiture. Further, this standard on the balance of probability is also used in the Canada Anti-Terrorism Act. So, let me assure the House that, in conducting investigations into these offences, the enforcement agencies will strive to obtain the best evidence to support the allegations. Regarding the onus imposed on corporate bodies, which is also a question raised by Mr Andy Gan, to make sure that we do not unnecessarily restrict the businesses of our companies, clause 35, as we have put it there, is a standard provision commonly found in the existing Acts as well. It is not something that we just created out of nowhere. A body corporate can only act through its officers. It is not unreasonable therefore to expect officers of a body corporate to be responsible for the acts of a company, such that the officers must give an account of themselves if the company commits an offence. Let me give Members examples of similar provisions in other legislation. They are the Electricity Act 2001, the Gas Act 2001, the Planning Act, the Civil Defence Act, the Building Control Act, the Control of Vectors and Pesticides Act and, finally, the Fire Safety Act. So, this question of duty of the corporate officers is also clearly defined in other similar legislation that I have just cited. Prof. Chin is concerned about people who make malicious complaints, leading to unnecessary investigations and the accused party suffering anxiety and stress. Although the Bill does not provide for the offence of malicious accusation, this is not different from, say, defaming a person. The person so defamed or accused can always sue the person making the defamatory statement or accusation. If the accusation is made to a police officer, then the accuser can also be charged under the Penal Code. For example, section 182 of the Penal Code makes an offence for any person to give any public servant any information to cause such public servant to use the lawful powers to the injury or annoyance of any person. A person who is convicted under section 182 can be sentenced to imprisonment, as well as to a fine. So, if a person falsely or maliciously reported his neighbour for committing a terrorist act or activity to a police officer, he can be dealt with under the Penal Code, and there is no need to put this provision in the Bill. The Penal Code is adequate to deal with such offenders. Let me now turn to some of the points raised by Mdm Ho. Mdm Ho's view is that we are placing too much onus on the family members, like the spouse, children, parents or siblings, because, she says, they are more likely than not to have knowledge of the terrorist affairs. But I think this is debatable. Let me give an example of the Jemaah Islamiyah group. Many of their family members actually claimed that they did not know. So I do not think it is fair to say that their spouse or immediate family members will definitely know, and therefore if they report the matter, it may lead to a break-up of families, like in the case during the Cultural Revolution. I think the problem of the Cultural Revolution is a totally different one. I do not think we should just simply leave things be and leave it to the conscience and the sense of responsibility of individuals to report a terrorist act or financing of such act, and not put this into the law. If everybody does behave responsibly and acts with conscience, I think we do not need any laws. We will then be living in utopia. But we know that we are living on the earth. So it cannot be done. Therefore, it is better that we provide for this in the legislation to ensure that if family members do know, and it can be seen and shown that they do know, then it is their duty to make such a report to the Police. But, of course, in the investigation, we shall be thorough about this. Mdm Ho's suggestion to exempt information received because of privileged information, eg, in the case of lawyers, I do not think this is necessary because clause 8(4) of the Bill provides that it shall be a defence for a person charged for failure to prove that he has reasonable excuse for not making the disclosure and it shall be left to the court to decide on the merits of each case. Mdm Ho also asked what extent the Attorney-General rely on information and belief to apply to a Judge to issue seizure and search warrants, and she asked if the burden of proof should be higher than the balance of probability, and whether a conviction of terrorism should be made first before forfeiture should take place. Her view is that no one should have the power to destroy property of little or no value unless it is ordered by the Judge to do so. She also proposes that seized property which may bear interest be held in an interest-bearing account. Let me address her questions in sequence. Clause 12 of the Bill provides that an affidavit in support of the application for a warrant of search and seizure of terrorist property may be made by an investigation officer based on his information and belief, and such information and belief are the result of investigations conducted by the investigation officer, who would most likely be the police officer or a Commercial Affairs officer. He would not act just because he had a dream the night before and said, "I believe and, therefore, I act." They do not act like that. I do not think we can allow him to act like that too. So he must conduct an investigation and show that there are indeed reasonable grounds for his belief. The Attorney-General, therefore, does not rely on hearsay or mere information received. He will ask the investigation officer, "What have you found in the investigation?" and satisfy him before he applies to the court for the issuance of a search and seizure warrant. The House may wish to note that clause 11 of the Bill provides that the court may require undertakings to be given in respect of application for warrants or restraint order, and the undertaking is a form of check to prevent any abuse of powers. The indemnity is to ensure that the law enforcement agencies investigating a case must have sufficient grounds before applying for a warrant for seizure or a restraint order. So he does not just act on impulse. Proof based on the balance of probability is the standard employed under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act for the forfeiture of properties or proceeds derived from drug trafficking and other serious crimes. The Bill, therefore, maintains the same standard of proof for the purpose of forfeiture. Clause 21 of the Bill allows a Judge to order forfeiture of property owned or controlled by or on behalf of any terrorist or terrorist entity. The order of forfeiture may also be made if the property has been or will be used to facilitate or carry out a terrorist act. There is no requirement to have a conviction first of the offences of providing or collecting property for terrorist acts, providing property and services for terrorist purposes, use or possession of property for terrorist purposes and dealing with property of terrorists. This is because the intention is to ensure that terrorist properties can be confiscated by the Government. But let me assure Members that strong evidence will be adduced before the Attorney-General applies to a Judge for such a forfeiture order. Clause 16 of the Bill also allows a person appointed to destroy seized properties that have little or no value. But the person must first apply to the Judge for the destruction order. In other words, he cannot say that, "I do not like this thing lying on my desk", and then he starts to destroy it. He will have to apply to the court for such an order. Mdm Ho's suggestion that property which may bear interest should be held in an interest-bearing account may not reap practical gains. We may not seize large assets or properties which may bear interest. If a legal requirement is then imposed to subject all properties which bear interest to be held in interest-bearing accounts, this may result in generating more administrative work. Sir, I believe I have dealt with all the points raised by the Members.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Wong Kan Seng]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 4.35 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Trade Development Board (TDB) was established in 1983, with the mission of promoting and developing Singapore's international trade. TDB fulfills its mission primarily through broad-based programmes, such as organising trade missions and fairs, and helping companies navigate through foreign bureaucracies via its overseas trade offices. Today, Singapore is the 16th largest trading nation in the world. Our exports have quadrupled from S$50 billion in 1985 to S$218 billion in 2001. Our external trade is three times the size of our GDP. We have successfully evolved from an entrepot base serving the region, to an international hub for trade and commerce. As Singapore embarks on a new phase of economic development, we can no longer rely solely on inward foreign investments to propel our economic growth. Many of our competitors have begun adopting the same strategies to attract investments, and they are fast narrowing the lead we enjoy. At the same time, we are encumbered by the tarnishing of Southeast Asia's image as an attractive investment destination, and its loss of investor mind-share to the economies of Northeast Asia. To overcome these challenges, we need to broaden and strengthen our base of local enterprises, to provide added ballast to our economy. We need to build vibrant and robust local companies which can serve as our additional engines of growth. In order to grow, our companies must venture overseas, given our small domestic market. We should therefore help them develop the capabilities, connections and access to capital that they need to spread their wings overseas. In other words, our aim should be to develop a corps of enterprising, competitive International Singapore Companies (ISCs) who will have their home bases and core capabilities in Singapore, while expanding and establishing a strong presence in the region and beyond. To achieve this objective, TDB has been given a new mission to help Singapore-based companies grow and internationalise successfully. To reflect this new mission, it has been renamed International Enterprise Singapore or "IE Singapore", since 1st April 2002. IE Singapore is now the primary economic agency overseeing the growth of our external wing. It will help our local enterprises upgrade their capabilities to compete internationally, develop their access to marketing and distribution networks, and help them gain deep knowledge and intelligence about overseas markets. It will re-engineer its major activities, from offering basic-level market information to providing value-adding intelligence and capability development programmes; from organising broad-based programmes to providing customised help to enterprises; and from generating trade volume to strengthening enterprises' home bases in Singapore while they develop their overseas markets. IE Singapore has also taken over from SPRING Singapore the responsibility of helping our SMEs expand overseas. As part of this effort, it will promote Singapore as an SME-hub by attracting enterprises from the US, European Union, Japan and other countries to be based here, so that they can collaborate with Singapore's ISCs to venture into the region. These new functions go beyond the former TDB's traditional role in trade promotion. However, as trading is the first step towards internationalisation, IE Singapore will continue to promote and develop the trade sector, including hub services like shipping, marketing and distribution. The amendments to the TDB Act thus reflect the new name, and the enlargement of the mandate, powers and functions of IE Singapore. Let me now move on to the key aspects of the Bill. Clause 5 of the Bill renames the Trade Development Board as the International Enterprise Singapore Board, and enables it to carry out its functions under the business name of "IE Singapore", or any other business name as the Minister may specify. This will give the Board the flexibility to change its business name as and when circumstances require, without having to change its legal name - International Enterprise Singapore Board. Clause 6 expands the functions and duties of IE Singapore. The new functions include: i) promoting or developing a business environment in Singapore that makes Singapore a preferred centre from which ISCs can create, develop or expand their business in foreign markets; ii) developing programmes and activities to assist ISCs to do so; and iii) fostering and developing business networks and linkages between ISCs and foreign businesses. Clause 7 empowers IE Singapore to collect, compile and analyse information or commission surveys, research or studies, relating to Singapore-based enterprises conducting business in foreign markets. It also allows IE Singapore to enter into memoranda of understanding and other similar arrangements with foreign partners. This will enable the Board to gather and share valuable information about overseas markets with the ISCs, which is crucial to aiding their expansion abroad. Mr Speaker, Sir, the proposed amendments to the TDB Act will allow IE Singapore to expand its work beyond trade promotion, and to focus on the three Cs - Competency, Connections and Capital needed by companies. IE Singapore will help companies build competencies in business processes like strategy and planning, international marketing, manpower development, financial management, as well as market information and analysis. IE Singapore will provide companies the business opportunities through its extensive network of international connections. It will also help companies gain access to a wider range of financing options for them to venture abroad. Through all these initiatives, IE Singapore aims to help many of our promising local companies become tomorrow's world-class champions, so that they can contribute to a strong and sustainable growth in the next phase of our economic development. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, the change of name to International Enterprise Singapore Board from Trade Development Board reflects the true nature of the Board - that of enhancing Singapore's competitive edge over other countries, assisting Singapore companies moving abroad, and building up of an extensive network linking Singapore businesses to their foreign counterparts. International trade normally takes place when there are competitive advantages in doing so. For example, if country A can produce electrical products cheaper than country B, it would be logical for trade to take place between the two countries. However, if country B has entrepreneurs who can invest in country A to produce those electrical goods and export them back to country B and other parts of the world, then country B will benefit more. Thus, IE Singapore Board should expand its role and do this beyond just assisting Singapore-based enterprises find new markets abroad and compete internationally. However, I am glad to hear the Minister has just mentioned that we are also assisting in capital provision, which is of great advantage to companies moving abroad. IE Singapore should also assist Singapore companies identify potential areas of development in different countries, taking advantage of that country's strength and exporting these goods back to Singapore and other places in the world. It could perhaps play the role of a match-maker and marry related Singapore enterprises so as to make strategic investments in a second country with the purpose of securing a line of supply for a series of products that Singapore needs. As we are all well aware, China is an emerging market. Its vastness means that there are sufficient opportunities for everyone. However, China's emergence has also altered the dynamics of the business environment. We cannot ignore these changes. We need to bring on a new corporate mindset as we compete with some of the best in the world to carve out a niche of our own. I read with interest the success story of Singapore media group SNP Panpac in Liaoning province in China published in the Straits Times on 6th July 2002. In less than two years, it has opened up a market for its bilingual teaching books. With the new defined role of the IE Singapore Board, I am confident that there will be many more such success stories. Perhaps, IE Singapore can look at how the networks built up by Panpac in Liaoning educationists could further be capitalised and introduce related services linked to those existing partnerships. One of the major functions of IE Singapore is to promote, facilitate and regulate forward and futures trading in rubber and other commodities. It may be timely now to rethink Singapore's role in rubber and commodity trading. As most local rubber dealers are not large enough to be market makers, and as producers of latex and rubber sheets are bypassing them and going direct to buy, say, for example, the tyre makers, would it then be necessary now for Singapore to invest in rubber plantations abroad? It is indeed necessary, as I can see it, so as to ensure a steady supply of good quality rubber for our rubber traders to quote competitive prices, and for Singapore to expand its investment abroad in plantations, instead of just investing the money in the Singapore rubber fund on securities. To distinguish Singapore from our competitors, it is necessary for us to re-focus, and perhaps accept more risks in our ventures abroad. Mr Speaker, Sir, I support the Bill.

Mr Speaker, Sir, Mr Andy Gan brought up two points, ie, in terms of capability development and cluster developments. I would address the first one, which is on capability development. IE Singapore would groom ISCs by offering customised assistance at each stage of the internationalisation process. IE Singapore has created a new department known as the Capability Development Group which will focus on the following areas. Firstly, building up companies' business capabilities. This is to support companies in developing market entry strategies, marketing techniques, appropriate product designs and manpower development programmes. Secondly, international partnership. To support the internationalisation of companies to successful partners, IE Singapore would create and facilitate on-line and off-line international networking platforms. IE Singapore would also encourage foreign enterprises to locate in Singapore for business partnerships with Singapore companies. Thirdly, helping companies to raise funds for overseas ventures and manage the financial risks. IE Singapore would provide programmes to raise awareness on various financing options and help companies develop financial strategies to venture abroad. On the clusters specifically, in terms of industry clusters, IE Singapore is currently focusing on the following six technology business: lifestyle business, infrastructure business, business services, international trading and trade logistics. I would stress however that this list is not exhaustive and will be periodically reviewed.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Raymond Lim Siang Keat]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Productivity and Standards Board (or PSB) was formed in April 1996 through the merger of the National Productivity Board (NPB) and the Singapore Institute of Standards and Industrial Research (SISIR), with the mission of raising Singapore's productivity. Its focus then was on three key areas: productivity; standards and metrology, and small and medium enterprises. Over the last 20 years, PSB has spearheaded the nation-wide Productivity Movement as a key part of our economic strategy. Going forward, there is a continued need to champion productivity, as it will determine how competitive we are, and how fast our living standards can rise. However, as Singapore progresses from an investment-driven to an innovation-driven economy, we should refocus our productivity strategy. The emphasis has to be on increasing Total Factor Productivity (TFP), in other words, getting increases in output through better use of resources and better ways of organising firms' and industries' operations. There is a limit to how much we can raise productivity through greater capital investments alone. While capital investments remain critical for economic growth, gains in productivity will increasingly come from new ideas and quality improvements. PSB has thus revised its mission to focus on increasing our TFP by promoting innovation. It will help our workers and enterprises build up their capabilities to innovate and create higher value. PSB will help upgrade our domestic non-tradable sectors to make them more productive and resilient. It will also pay particular attention to the development of our local SMEs, whose productivity lags significantly behind the larger companies in Singapore, as well as that of SMEs in the developed countries. In addition, PSB will continue to promote standards and quality to enhance productivity, to ensure product safety, and to promote market recognition and acceptance of our products. PSB's new name, SPRING Singapore, encapsulates these changes in its mission and functions. SPRING stands for Standards, Productivity and Innovation for Growth. It connotes innovativeness, dynamism and renewal - all attributes needed for future competitiveness and economic success. The amendments to the PSB Act reflect this new name, and the enlargement on the mandate, powers and functions of SPRING Singapore. Let me now move on to the key aspects of the Bill. Clause 5 of the Bill renames the Productivity and Standards Board as the Standards, Productivity and Innovation Board, and enables it to carry out its functions under the business name "SPRING Singapore", or any other business name as the Minister may specify. This will give the Board the flexibility to change its business name as and when circumstances require, without having to change its legal name - Standards, Productivity and Innovation Board. Clause 7 expands the functions and duties of SPRING Singapore. The new functions include: (a) raising total factor productivity through the promotion of innovation; (b) promoting the development of the domestic sector; (c) being Singapore's national accreditation authority to accredit conformity assessment bodies; and (d) administering the Weights and Measures Act, which PSB took over from the previous Weights and Measures Office in April 1999. Clause 6 provides for wider representation in the constitution of the Board. Section 5(1) of the current Act stipulates that the Board shall consist of members representing the interests of the Government, employers, trade unions, professional and academic staff of the institutions of higher learning in Singapore. Clause 6 amends this section to allow Board members to come not only from these bodies, but also from any other sectors or classes of persons, such as the business community. This will provide greater flexibility in the selection and appointment of Board members. Clause 14 amends section 42(3) to increase the maximum penalty for offences under regulations made under the Act. It raises the maximum fine from $5,000 to $10,000, and the maximum imprisonment term from 6 months to 2 years. This is principally aimed at aligning the penalty for non-compliance (by conformity assessment bodies) in the testing and assessment of controlled goods, with the penalty under the Consumer Protection Act for the supply of non-registered controlled goods. Both offences result in the same consequence, that is, the supply of unsafe controlled goods, but at present the penalties under the PSB Act are much less than those under the Consumer Protection Act. Mr Speaker, Sir, the proposed amendments to the PSB Act address the fundamental need for Singapore to progress up the innovation ladder in order to remain competitive. We need to help local SMEs, in particular, to anticipate and adapt to emerging trends, discard models and practices that have outlived their usefulness, and reinvent themselves. We need to usher in a new SPRING of fresh ideas, new capabilities and creative initiatives in the workplace and in the business environment, in order to propel our economy to greater heights. Sir, I beg to move.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Tharman Shanmugaratnam]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read. 5.00 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Animals and Birds Act was enacted in 1965 to consolidate the various legislation relating to animals. It contains legislation to prevent the introduction and spreading of animal and bird diseases, to control the import and export of animals and birds, to prevent cruelty to animals, control livestock products, and to regulate the use of veterinary biologics. This Act has not undergone any major review since its enactment. My Ministry has proposed this Bill for the purposes of, firstly, to enhance the prevention and control of animal, bird and fish diseases; secondly, the strengthening of the provisions for the prevention of animal cruelty; and thirdly, improving the operational efficiency of the Agri-Food and Veterinary Authority in administering the provisions of this Act. I shall now go through and explain the rationale of the main features of the Bill. Enhance the prevention and control of animal and bird diseases Sir, there is always a potential risk, although generally remote, for a disease agent present in animals, birds and fishes, to develop an ability to infect humans. In recent years, there have been reports world-wide of outbreaks of animal diseases that can be passed to humans, such as the Mad Cow Disease, the Avian Bird Flu and the Nipah Virus Disease found in pigs. These diseases pose a threat to public health. Also, there have been outbreaks of other animal diseases, such as Foot and Mouth Disease, which do not affect humans, but could nevertheless have a significant impact on trade in animals, birds and their products. Singapore is currently free from such diseases, but we need to be vigilant and alert to keep these and other emerging threats at bay. This Bill strengthens the provisions for disease prevention, control and detection, so as to enable the AVA to deal with animal-related diseases more effectively and promptly. Let me elaborate on these amendments. Singapore is a major international trading hub for aquatic animals, such as ornamental fish, with its trade valued at about $75 million annually. Currently, the Act does not cover fish diseases. Clause 3 of this Bill proposes to include fish into the definition of "Animal" in this Act. The definition of "fish" covers fishes, crustaceans, mollusks and other aquatic animals. This amendment will provide the necessary protection for the health of fish in Singapore and the regulation of trade in aquatic animals in accordance with international requirements. Clause 3 also allows for the Minister to expand the definitions of "animal" and "disease" through an order and a notification in the Gazette respectively, should diseases transmitted by other organisms currently not covered in this Act subsequently become significant. Currently, the AVA can deny diseased animals or birds being imported into Singapore. The amendment in clause 8 of the Bill will further enhance the AVA's powers by allowing the AVA to prevent the entry into Singapore of any vehicle, ship or aircraft, suspected of carrying diseased animals or birds, without the need for the animals or birds to be inspected and found to be diseased. For instance, the animals or birds may not be showing signs of a disease when they left the source country, but it is later known that they have been exposed to the disease and therefore pose a risk. This proposed power would be exercised only if the AVA is satisfied that the suspected diseased animals or birds on board the vehicle, ship or aircraft, can pose a significant risk to the health of our population, or our animals or birds. Section 11 of the Act currently requires imported dogs and cats to be confined on board a ship, unless the AVA authorises their landing. This is to prevent the introduction into Singapore of any diseases that these dogs and cats may carry. Any animals and birds imported or transhipped by sea via Singapore could potentially introduce diseases into Singapore. Clause 9 of the Bill therefore expands the scope of section 11 to enable the AVA to confine to the ship, any animal and bird being imported or transhipped by sea. Clauses 6, 13 and 14 of the Bill enhance AVA's powers to examine and deal with animals and birds that are diseased or suspected of being diseased. Animals and birds to be imported or exported out of Singapore can be detained at a quarantine station for examination to ensure that they are free from disease. They can also be destroyed if they are found to be a disease risk. AVA can also examine animals or birds suspected of being diseased to make a disease diagnosis. This can include taking environmental samples, such as their feed or bedding materials, or destroying the animals and birds, if indeed that is necessary to diagnose the disease. Animals or birds which have been in contact with, or exposed to, diseased animals or birds, or which may perpetuate the disease, can also be destroyed to prevent further spread of the disease. If there is an animal or bird disease outbreak, the movement of people and vehicles into and out of a diseased area may become the means for spreading the disease around Singapore. By virtue of the amendments under clause 16 of the Bill, the Minister may order the restriction of movement of people and vehicles in diseased areas in order to contain the problem. I would like to assure the House, however, that the Minister would exercise this power only in serious cases of diseases that can affect humans. Clause 29 of the Bill updates the provisions for establishing quarantine stations for animals and birds in veterinary centres. It provides for the AVA to establish or designate more quarantine stations if the AVA assesses that this is necessary for disease control. The AVA can also license veterinary centres to ensure that they are properly managed and equipped for the treatment of animals and birds. Technology has progressed globally to a level where there are genetically modified organisms and GMO derived products which have been commercialised or are in the process of being commercialised. Clause 30 of the Bill provides for the regulation of the import and the possession of animal-related GMOs in order to ensure that there is no inadvertent introduction of undesirable animal-related GMOs or GMO-derived products that can compromise the health of our population, or of our animals and birds. Strengthen provisions for animal welfare and prevention of animal cruelty Sir, the abandonment of animals, besides being a cruel act, also contributes to the proliferation of stray animals. Over the years, the AVA, unfortunately, has not seen any reduction in the rate of abandonment of animals by owners. Each year, the AVA and SPCA have to put down about 9,000 dogs and 12,000 cats. The AVA and SPCA also impound around 200 and 1,000 pure breed dogs each year respectively. Clauses 20-22 of the Bill strengthen the AVA's power to deal with cruelty to animals. The abandonment of animals without reasonable cause is made an offence. This is to serve as a deterrent against irresponsible pet owners. In addition, the Bill increases the maximum penalty for animal cruelty offences from the current $500 fine and/or a jail term of six months to a proposed $10,000 fine or a jail term of twelve months. The Bill also provides AVA with the power to enter and search any premises with suspected cruelty cases. Animals subjected to cruelty can be taken away from their owners and can be medically treated by a licenced veterinarian. Clause 25 of the Bill provides for a new section to regulate the keeping and breeding of animals and birds to ensure public health and safety, and to prevent animal cruelty. It also regulates the feeding of animals and birds to keep in check the proliferation of stray animals, which in turn can help in preventing and controlling the spread of animal and bird diseases. Improve AVA's operational efficiency Clauses 4, 6, 8, 13-15, 25 and 28 of the Bill include amendments to give AVA the flexibility to outsource some of its functions to augment its own services. The Director-General of the AVA, subject to any general or special directions of the Minister, can designate suitably qualified persons from the private sector, such as authorised examiners in order to carry out inspections, examinations, tests, treatment and certification of animals and birds for import and export, and for the diagnosis of disease. The impoundment of strays and identification of animals and birds, eg, through micro-chipping, can similarly be outsourced to private entities. The AVA will direct these authorised examiners on the functions to perform and specify the procedures and conditions for these authorised examiners to comply with. The authorised examiners will not be given enforcement powers. The AVA will still retain overall control and accountability in the final judgment on disease control based on the findings and recommendations of these authorised examiners. Clause 26 of the Bill re-enacts the existing section 57 to make clearer the procedure for the forfeiture of items. The revised provisions are similar to those in the Wholesome Meat and Fish Act. Clauses 24 and 31 of the Bill enhance the AVA's powers of investigation and enforcement and facilitate the AVA to carry out the functions of this Act more effectively. This includes powers to suspend or revoke licences and permits, require the production of documents, remove obstructions to entering a premise or vehicle, to facilitate the examination of any animal or bird, and compound minor offences. These provisions will allow for more effective enforcement of the Act. The maximum penalties for offences committed under the Act are also increased under clause 34 of the Bill. This is to maintain the level of deterrence as these penalties have not been revised since the Act was enacted in 1965. Offences that present a lower risk of disease spread will incur penalties not more than $5,000 in fine and/or jail term of up to six months. Offences that have a higher risk of disease spread and a greater impact on animal and public health will incur higher maximum penalties of a $10,000 fine and/or a jail term of up to twelve months. In conclusion, Sir, the Animals and Birds (Amendment) Bill will strengthen the existing provisions to prevent the introduction into, and control the spread of diseases of animals and birds, including fish diseases, in Singapore. It will better enable the AVA to deal with the animals, birds and fish diseases more effectively and promptly in order to protect the health of Singaporeans from transmissible animal-related diseases. It will also strengthen provisions for the prevention of animal cruelty. Sir, I beg to move. Question proposed.

Sir, I rise in support of the Bill. The Bill will address concerns on the spread of animal and bird diseases and provide better protection for consumers in Singapore. With the growing awareness on animal welfare, it is also timely to revise the provisions of the Animals and Birds Act to prevent cruelty to animals. In a civilised society, acts of cruelty should be prevented, not only to humans, but also to animals. The recent incidents on cruelty to animals have raised concerns on how we can address cruel acts on animals. But, Sir, we must be careful to achieve a fair balance between protecting animals and protecting human rights. Although stringent penalties will serve as a deterrent, it may impose unfair punishment to some who infringe the Act, especially first-time offenders, or those who were provoked by animals to act recklessly. Sir, I shall now highlight the following specific provisions in the Bill to seek the Minister's clarifications. One, inconsistent provisions in the Bill. There seems to be inconsistencies in the proposed Bill with regard to the mode of transportation for animals and birds into Singapore. Clause 7 of the Bill amends section 9 of the principal Act by empowering an authorised officer to board any ship, aircraft, or train, for the purpose of examining any animal or bird. But it has not empowered the authorised officer to board any vehicle transporting animals or birds into Singapore. This provides a loophole for the importation of animals or birds by land. I hope the Minister can explain why the authorised officer is not empowered to examine animals or birds on board any vehicle. In clause 8 of the Bill, section 10 provides the power for the Director-General to deal with diseased animals and birds being imported into Singapore. However, section 10(1) only specifies animals and birds on board vehicle, aircraft or ship. There is no mention of train. Thus, the Director-General is also not empowered to deal with animals and birds imported by trains. This provision is also inconsistent with clause 7, as the mode of transportation is not comprehensively spelt out. Similarly, clause 16 of the Bill has not empowered the Minister to restrict the movement of animals and birds by train into, within or out of any disease infected area. Sir, the inconsistent provisions in the Bill will not provide a watertight system to prevent and control the spread of animal and bird diseases into Singapore. I hope the Minister can address these concerns. Furthermore, clause 3 of the Bill adopts a different definition for animals as compared to section 42 of the Animals and Birds Act. The definition in clause 3 does not include reptiles and insects. May I clarify with the Minister whether the proposed Bill will cover the importation of reptiles and insects? Reptiles and insects can also be potential disease carriers into Singapore. Balance between protecting animals and protecting human rights Sir, while I agree that more should be done to protect the welfare of animals, we must also consider the rights of human beings. Clause 20 amends section 43 which deals with cruelty to animals. It has increased the maximum penalty for a fine not exceeding $500 or a term of imprisonment not exceeding six months or both, to a fine not exceeding $10,000 or a term of imprisonment not exceeding 12 months or both. We need to address a fundamental question. Is cruelty to animals such a serious criminal offence that warrants a 12-month imprisonment term for the offenders? This is especially so for first-time offenders. According to section 42 of the Animals and Birds Act, the definition of "animal" includes any beast, bird, fish, reptile or insect, whether wild or tame. Therefore, technically speaking, if a mosquito, which is an insect, bites you, and you kill the mosquito by cruelly beating it, you may be imprisoned for such an act. Sir, I do not think this is the intention of the proposed Bill. We need a clearer definition on cruelty to animals, as spelt out in section 42. By enhancing the powers of the court, we may send a wrong signal that offenders of cruelty to animals should be severely punished. I am concerned about the recent imprisonment sentences served on animal abusers. To achieve a fair balance between protecting human rights and protecting animals, I propose that we should adopt a graduated punishment system whereby first-time offenders will be fined, and repeat offenders may be fined or jailed. In this way, we not only deter acts of cruelty to animals but also protect human rights. Sir, we must not readily send our people to jail, just because of cruel acts on animals. Operational efficiency of AVA Sir, to achieve greater operational efficiency in enforcing the Animals and Birds Act, we need to adopt a holistic approach to control animals in Singapore. All pet animals must be licensed and tagged, so as to facilitate the traceability of owners and animals. This will improve the effectiveness of enforcing the Act with regard to the abandonment of animals by owners. We should also strengthen the Act to instill a greater sense of responsibility among pet owners. At present, any person can purchase or adopt an animal as a pet without undergoing any training to care for the animal. As a result, some animal owners may encounter difficulties in keeping their pets, thus losing or abandoning their pets. This will consequently increase the population of strays and pose a higher risk of disease spread in our society. I would suggest to the Minister to include specific provisions on responsibility of pet owners in the Animals and Birds Act. Licensing of veterinary centres In clause 29, section 65 sets out a new provision to license veterinary centres. I support this measure. I would like to raise a concern on its impact on business costs. I hope the licensing procedures and fees will not impose an undue cost burden on the veterinary centres, which might result in the closure of these centres. Sir, I support the Bill.

Mr Speaker, Sir, I rise in support of this Bill. This Act was enacted in 1965 for, inter alia, the prevention of cruelty to animals and birds, for measures pertaining to the general welfare and improvement of animals and birds in Singapore. The proposed amendments are timely and to be welcomed. There was a recent newspaper report that the Housing and Development Board does not allow the keeping of cats in HDB flats. Dogs are allowed. The relevant non-governmental organisations have voiced their disappointment and made submissions to the HDB to review their position with regard to the prohibition against cats. It may be argued that this is discriminatory in nature. HDB may well have good reasons for their current position. Perhaps the HDB could further review, together with interested parties, including relevant NGOs, to see if their rules could be modified to allow one cat per household as a pet for a start. We should also encourage our children and adults to promote in schools, homes and workplaces, the prevention of cruelty to animals and birds. They must be encouraged to promote the general welfare and improvement of animals and birds, both at home and in the environment as a whole, and, I would add also, prevention of cruelty to animals in the zoo. This will, I believe, make us, as human beings, more caring and compassionate and, hopefully, less selfish and self-centred. One or more of our polytechnics and/or universities should also consider, if found practicable, to introduce veterinary science as a discipline, either as a diploma or degree course, to encourage our young boys and girls to take up this course, so that in the process, it will improve the welfare and care for animals. I would like to bring up another point. As I read section 69H in clause 31 of the Bill, it says, "Protection from liability", and this is actually a general principle that needs to be considered, not just this particular Bill but also quite a lot of statutes that would be relevant. It says in section 69H: "No suit or other legal proceedings shall lie against the Authority, the Director-General or any authorised officer, police officer, officer of customs or any other person acting under the direction of the Authority or Director-General for anything which is in good faith done in the execution or purported execution of this Act or any rules made thereunder."

In a sense, this is a provision to exculpate the State from any form of liability. On the whole, it may be a good provision. But it may be timely to note that if you look at the legal entity called the "Republic of Singapore" or the State, it is the richest legal entity in Singapore. It has also, arguably, the most number of civil servants, staff and legal officers who are competent and well informed to carry out the duties under the Act. Therefore, should they be given the extra privileges of immunity from legal suits, ie, not being able to be sued at all? Unlike private citizens, companies or NGOs, it is something to be reviewed perhaps, although one can well understand the State needs to be protected as much as possible from legal liability. But there must come a time when there is a sense of responsibility and fear of potential legal action for damages or other legal remedy by which then, there would, in all probability, be higher standards of professionalism, and this surely must be good for the State as a whole in the long term. I would urge, therefore, maybe in futuro, that this provision, and provisions of a like nature, be considered in the various statutes of Singapore that we have currently. With that, I support this Bill.

Mr Speaker, Sir, I will reply to Dr Teo Ho Pin's points first and then cover Mr Chandra Mohan's. I would like to start by commending Dr Teo for having obviously gone through this Bill with a fine-tooth comb, and for detecting what he felt were inconsistent provisions in the Bill. I am even more happy to report that my civil servants have gone through this Bill with an even finer tooth comb. I would like to assure him that there are no loopholes. Let me deal with them specifically. Dr Teo was worried about inconsistent definition of the means of transport referred in section 9. Let me first bring him back to sections 7 and 8 of the Act. Section 7 provides that no one can import an animal or bird into Singapore without a licence. In section 8, if and when that person does import such a live organism, he has to report to the AVA. Section 9, which Dr Teo refers to, places an additional burden upon the captain of an aircraft, a ship, or the guard of a train. These are modes of transport which are large and require the officers specifically to board and conduct a more detailed examination and in which we want to place the onus of notification, not just on the importer of these animals or livestock, but on the person in charge of that aircraft, ship or train. This is also related to the fact that in certain cases, livestock may not even be imported into Singapore. They may be transhipped via Singapore. And such a person may say, "Look, I am not importing this animal or bird, and I do not feel that I need to apply for an import licence." Section 9 gives us the specific authority to require that the master or captain of this transportation means will specifically inform us that he has on board such livestock. And if we feel that there are public health concerns, we may then decide that we may need to board to conduct an inspection or, indeed, to confine the animal to that ship, aircraft or train. The next section where he was worried about is the apparent exclusion of the word "train" from vehicle. We have just checked with the Attorney-General's Chambers and I have been informed that when they refer to a vehicle, they mean a conveyance or transmission, especially a structure with wheels in which things or people are transported by land. And I am therefore assured that this includes trains. So there is no loophole in that respect. To move on, he brought up the issue of a balance between human rights and animal rights. Let me, first, assure Members of the House that there are no animal rights. We are not conferring any rights on animals. However, the issue of cruelty has got everything to do with humanity and with social norms. When an animal is abandoned, hurt or stolen, the emotional pain and distress which the owner of that animal feels is very much a human issue. It is not simply an issue of an animal right. Similarly, when a dog is cooked alive with an acetylene torch, as has indeed happened in Singapore, even though that dog is a stray, it offends our social norms, our sensitivities as to what is appropriate in our culture. So I want to reassure the House that when we are talking about cruelty to animals, we are not talking about stomping on a cockroach or killing a mosquito. We are talking about the need to have the ability to intervene when people indulge in acts which go against our social norms, or indulge in acts which will actually cause distress and pain to fellow human beings. So, let me assure the House that it is all about human beings. It is not about animal rights. He then went on to talk about the operational efficiency of the AVA and how we need it. He suggested that all pet animals be licensed and tagged. Let me first tell him that we license all dogs and we tag imported dogs. We do not tag rabbits, chinchillas, guinea pigs and all the other things. In fact, if we were to indulge in that, it will surely raise our fees and it would be something which, I am sure, will not be popular. Our stand is that we will do only what is necessary and what is reasonable. And having put all these licensing requirements in place, the AVA will operate only on a cost recovery basis. We do not intend to make money from this, and we will not indulge in any unnecessary tests, licensing or any other procedures. I would like to move on to the points raised by Mr Chandra Mohan. The issue of cats in HDB flats is not a new issue. Again, I want to stress that it is not about cats. It is about human beings, social norms and public acceptance. To-date, there has been a difference, whether you like it or not, in terms of public acceptance of dogs vis-a-vis cats. It is not a matter of what is right, or what is wrong. There is a difference. In the past, the HDB has incessantly received complaints about cats from other residents who obviously are not cat lovers. There is a difference between a cat and a dog. Cats are nomadic by nature. A cat is not some animal which normally takes kindly to a leash. A cat is not an animal which you can leave in a flat. The moment a window or any opening is available, that cat will move out. The cat is nomadic by nature. The cat has defecation or urinary habits which may aggravate neighbours. The caterwauling of cats is part of their mating ritual, and the veterinarians in the AVA have told me that cats caterwaul in post-coital agony - not post-coital ecstasy - it is also a source of irritation for neighbours. I am not saying that it is a never, never situation with cats. I am just pointing out that there are problems. What the HDB has to do is to strike the appropriate balance between the needs and desires of all, if not most, of the residents. Nevertheless, I am aware that the Cat Welfare Society has submitted a re-appeal, and the Ministry will examine the re-appeal for fresh grounds. And if indeed there is merit in this, or there are ways in which we can be more flexible in our implementation, we will certainly look at it. When he talked about the zoo, I hope he was not implying that there was any cruelty in our zoo. Because I am very, very certain that our zoo is, in fact, a showcase of how animals should be treated and kept and, in fact, looked after in the most appropriate way. And, in fact, it is exactly the educational value of the zoo which, I think, will actually bring about a better attitude of human beings to the proper treatment of animals. On his suggestion of the university running a veterinary science course, this, obviously, is something which the Ministry of Education will have to decide. But, from my perspective, I do not think this will be necessary. Members of this House may be keen to note that it is harder to get into a veterinary school than it is to get into a medical school. The number of veterinarians we need in Singapore is much, much smaller than the number of doctors we need. And if we do not have the critical mass to conduct a good, high quality course, we are better off sending people with this ability and aptitude to appropriate overseas centres for their training. The final point he made is about protection from liability. I think those are generic points, not specific to this Bill itself. But the only thing which I would like to say in reply is that this protects the Authority, the Director-General and public officials who are performing their duties pursuant to directions of the legislation, or to rules passed by Parliament, or the appropriate Executive, and that they are doing this in good faith. If these officers do not perform the task in good faith, they are liable to prosecution, not only by the public, but even internally, subject to our own disciplinary processes and indeed criminal prosecution. I think, as a lawyer, he would agree with that. If members of the public feel that laws are unfair, the appropriate forum for that is this Parliament, and that is why Members scrutinise all legislation which is passed down here, and all rules and subsidiary legislation emanating from that. If the laws have been misapplied, members of the public have a recourse to the legal system. And that is why we have more than adequate lawyers in Singapore. So I think, contrary to your premise, it would be wrong to assume that the State and its public officials and, indeed, outsourced agents, acting on behalf of the State, are suddenly being given a licence to behave in an unfair manner, in an unjustified manner, in a capricious manner. I do not think that is the state of affairs.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Vivian Balakrishnan]. Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, currently, plumbers who are registered with PUB are allowed to carry out plumbing works. There are two types of plumbers, namely, sanitary plumbers and water service plumbers. Sanitary plumbers carry out sanitary works, such as the installation of sanitary fittings in toilets and laying of sanitary pipe work, while water service plumbers carry out plumbing works for the supply of drinking water. Both sanitary and water service plumbers are regulated by PUB. The Sewerage and Drainage (Amendment) Bill seeks to abolish the registration of sanitary plumbers. This deregulation, however, applies only to sanitary plumbers. Water service plumbers will continue to be regulated by PUB. Mr Speaker, Sir, the registration scheme for sanitary plumbers was started in 1976. The scheme was introduced to build up a pool of experienced and qualified sanitary plumbers. Today, there are about 550 sanitary plumbers registered with PUB. To qualify for registration, they must pass the relevant skills courses conducted by the Construction Industry Training Institute and the Institute of Technical Education. However, not all sanitary works require the skills of a fully qualified plumber to do the job. There are two aspects of works carried out by registered sanitary plumbers. One is to carry out minor sanitary works, such as changing and relocating toilet bowls. The other is the construction of the sanitary pipe work in new buildings and developments. Sir, minor sanitary works are not difficult in nature. A normal renovation contractor will have the skills to do a good job. But, currently, a renovation contractor cannot undertake any sanitary work unless he possesses the full qualifications and is registered with PUB. This has resulted in a protected market for the qualified sanitary plumbers even for works that are relatively simple and straightforward. Abolishing the registration of sanitary plumbers will open up the market for other contractors to undertake minor sanitary works and lower the cost of such services. As for the construction of sanitary pipe work in new buildings and developments, the Sewerage and Drainage Act has a provision to require the developer to engage a qualified architect or engineer to be responsible for the proper design and construction of the sanitary works. This aspect of sanitary works will continue to be regulated by PUB which will continue to conduct checks on completed sanitary works. This provision is sufficient to ensure the sanitary facilities in new buildings and developments are properly installed. There is therefore no need for PUB to continue with the registration scheme for sanitary plumbers. However, PUB has been in discussion with the Singapore Plumbing Society (SPS) on its proposed deregulation of registered sanitary plumber scheme. SPS has indicated that it will put up an accreditation scheme for qualified sanitary plumbers. This would allow qualified sanitary plumbers to be recognised and engaged for more complex sanitary piping work required for new buildings and developments. SPS will encourage existing registered sanitary plumbers to become its members. It will also take steps to promote and market their plumbers to serve the public and work with the training institutes to continue to upgrade the skills of the sanitary plumbers. Mr Speaker, Sir, let me now move on to the main provisions in this Bill. The main provision of the Bill is clause 6. It repeals sections 36 and 37, and removes the requirement for registration of sanitary plumbers, hence, opening up sanitary work to other contractors. The other clauses make consequent and minor changes to the Act to effect the deregulation of the Registered Sanitary Plumbers Scheme. The deregulation will benefit house owners and developers, as they will not be restricted to engaging only registered sanitary plumbers to carry out sanitary works. The deregulation will give house owners and developers a wider choice of contractors or plumbers. This will result in lower cost for them to carry out sanitary works. Sir, I beg to move. Question proposed.

Mr Speaker, Sir, I support the proposed amendment to remove the need to register plumbers. May I add that this is long overdue. Sanitary plumbers have been defined just now. I am glad that the definition was clarified. They are neither involved in the design of plumbing systems, including gas, water or sanitary systems, nor in certifying work done. In most cases, architects and engineers are responsible for the design of these systems and, ultimately, responsible for the completed jobs. Sir, doing away with having to pay for a licensed plumber would save cost for property owners, especially private property owners. However, the concern would be the flooding of the market by untrained persons claiming to be qualified plumbers. This will disadvantage the genuine tradesmen and put the public at risk. To further safeguard the interests of the public, the trade should be encouraged to implement self-checks from within itself, to ensure quality work provided. This can be done through the setting up of trade associations. For example, the Singapore Plumbing Society, established since 1959, with members in the plumbing trade, can be encouraged to provide training opportunities to continuously upgrade members of the plumbing trade. Such a set-up would also serve as a forum to keep existing tradesmen abreast of new products and new skills. The training programmes can be conducted jointly with the Construction Industry Development Board or the Institute of Technical Education, and I am glad the Minister has also mentioned that there will be courses to train new plumbers. The Society can also be tasked to register plumbers who abide by their codes of ethics. More emphasis should be placed on plumbers who are qualified members of such an association. Only these should be allowed to practise.

Mr Speaker, Sir, the Singapore Plumbing Society is in support of this Bill. My Ministry has consulted them. SPS will set up an accreditation scheme similar to the current PUB registration scheme. The existing registered plumbers will be invited to join SPS and be included in the accreditation scheme. For new applicants, SPS will set up a committee to select candidates, conduct oral examinations, issue certificates and maintain a register of sanitary plumbers. SPS will use the same qualification requirements to accredit its sanitary plumbers. After the deregulation, SPS will post a list of its plumbers on the website. Members of the public who want to engage the services of a plumber can visit the SPS website.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Balaji Sadasivan].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the local media play an important nation-building role in our multi-racial and multi-religious society. They need to have a deep appreciation for local sensibilities and sensitivities, and a clear sense of responsibility and commitment to Singapore. This is why we have rules on shareholding limits to ensure that no one can manipulate our local media to undermine our society. However, since the shareholding controls in the Newspaper and Printing Presses Act (NPPA) were first introduced in 1977, there have been many changes in the investment, financing and corporate environment. Investment options, like trust funds, futures and stock options, are now common. New corporate structures involving holding, subsidiary and sister companies have also sprung up. Such changes can have an impact on the ownership and control of newspaper companies. The existing legislation does not cater adequately for these changes. It is therefore possible for some entities to exploit these grey areas to circumvent the shareholding provisions and other controls in the Act, thereby exercising undue influence over our media companies. This Bill, therefore, proposes amendments to the Newspaper and Printing Presses Act to update the shareholding controls in the Act. We are also taking this opportunity to update the penalty scheme in the NPPA and to make other revisions to the Act. I will now speak on these issues in turn. In September 1999, Capital Group Companies Incorporated (or "Capital" in short), an international fund manager, acquired more than 5% of ordinary shares in Singapore Press Holdings (SPH). Technically, Capital did not breach the 3% shareholding limit in the NPPA. This was because, as currently worded, the NPPA only applies to beneficial owners, and not nominee shareholders like Capital. However, certain nominee shareholders can vote on behalf of their clients and, therefore, can exert influence over a company. But the policy intent of the ownership limit in the NPPA is to ensure that no single person or company can exercise undue control over a newspaper company. The shareholding limits should, therefore, also apply to fund managers who have the discretion to exercise voting rights of shares on behalf of the beneficial owners. To ensure that this policy intent is carried out, the Government stated in October 1999 that we would amend the NPPA ownership provisions to adopt the same definition as the ownership provisions in the Banking Act (BA), but retain the 3% figure. This is because the ownership provisions in the BA are more comprehensive, as they are based on the concept of interest in voting shares. This covers any person, other than a bare trustee, who has an interest in a share, such as fund managers like Capital. As the Singapore Broadcasting Authority Act contains ownership provisions that mirror those in the NPPA, corresponding changes would be made to the SBA Act. In preparing the Bill, we noted that as the new definition of "shareholding interest" covers more parties, retaining the original 3% figure may be too restrictive. Such a low limit could affect the fair value of the shares of a listed media company in the stock market by limiting buyers from acquiring a more substantial stake for their portfolios. Taking into account feedback from the investment community and industry players that we consulted, we decided to raise the shareholding threshold figure from 3% to 5%. This 5% figure will address our concerns about undue influence over a media company, while still providing leeway for investors to take a larger stake in a listed media company. Let me now highlight the new provisions on shareholding controls. Clause 3 of the Bill repeals section 10 and inserts new sections 10A to 10H. The current 3% shareholding limit is aligned to the definition of "substantial shareholding" in the Companies Act and the Banking Act, which refer to a 5% interest in voting shares. A new shareholding threshold at 12%, which mirrors that in the BA, has also been introduced. It addresses aggregated shareholdings of a person and his associates, where "associates" includes close relatives. This will address the loophole in the current Act, which does not take into account relationships between shareholders. The new sections will also address passive increases in shareholdings, and shareholders acting in concert. Legislative powers will be introduced for the Minister to direct the transfer and disposal of, and attach conditions to, excess shareholdings and impose penalties for breach of shareholding limits. The maximum penalties for contravening the shareholding provisions are, upon conviction, a fine not exceeding $50,000 or imprisonment for a term not exceeding three years or both. As a deterrent to recalcitrant offenders, a further fine not exceeding $5,000 will be imposed for every day that the offence continues after conviction. Sir, let me now turn to the update of the penalty system in the NPPA. Currently, the substantive penalties for publishers consist of revoking their licences or charging them in court. These penalties are too severe for lesser offences, for example, when publications carry pictures that go beyond acceptable norms. To provide an appropriate penalty for lesser offences, clause 12 inserts new section 33A to empower the Minister to impose composition fines instead, which are out-of-court settlements for offences chargeable in court. For consistency across the NPPA and other legislation, the Bill also introduces amendments to update the scale of fines in the NPPA, as there has not been an across-the-board review of the penalties since the Act was enacted in 1975. The maximum fine under the NPPA will generally be raised from $10,000 to $50,000. Sir, let me now touch on the other amendments to the Act. Currently, the receipt of funds from a foreign source for purposes other than commercial purposes is prohibited, so that no person can subvert our media. However, in today's networked global economy, it is not uncommon or difficult for foreign parties to register a company in Singapore or work through a local agent. Clause 4 of the Bill, therefore, amends section 11 to broaden the current definition of a "foreign source" to include foreign funds channelled through a local agent. The Minister can also declare any local incorporated company or association as a foreign source if it has any foreign directors or members. Finally, clause 13 of the Bill updates the exemption clause in section 34 to be consistent with other legislation. Sir, I beg to move. Question proposed. 6.00 pm

Sir, the print media constitutes an integral part of our daily lives. I need not dwell on the importance and the critical role the print media plays in helping to shape Singapore. We hold in respect the power of the pen held in the hands of our editors, journalists and columnists. Therefore, our control over ownership is important in providing the direction as required by society. The print media has a role to play in the promotion of community values and the arts. We have always spoken of a gracious living society. Enhancement in arts appreciation and community outreach efforts require constant nurturing. The print media is able to fulfil this role well. The print media can be a strong link in a chain of efforts to nurture the arts and promote community outreach programmes. They can provide more coverage on the arts and community. They can give insights, invoke passions, enhance appreciation, and thus push the arts and the community to greater heights. An arts and community supplement, like the Computer Times supplement distributed with the Straits Times, will be a welcome gesture of the print media. Let us pay tribute to the talents and fashion of our arts community and the tens of thousands of volunteers in community service. Let us give them a pat on their backs. Let us help them spread their passion and volunteerism to the thousands who have been moved by the power of the pen to follow in their footsteps. Sir, I support the amendments.

Mr Speaker, Sir, the Newspaper and Printing Presses (Amendment) Bill, together with the SBA (Amendment) Bill, is clear evidence of Government's control over the media. Control comes by way of empowering the Minister to decide who should be allowed to own a substantial number of shares. New section 10A of the Bill prohibits any person to become a substantial shareholder without approval of the Minister. It also prohibits shareholders to act together with other shareholders to exercise their voting rights if together they hold more than 5% of the voting shares. Section 10B further prohibits an indirect controller, by way of having 12% of the shares, or voting power of the company with its associates unless, again, the Minister approves. Sir, it is interesting that in this section, it defines in detail what relationship is considered associate. I think we could also use the same principle to examine, in the future, whether there is a conflict of interest in holding positions in public offices, in private companies and GLCs. The control by the Minister would also now empower him to compel shareholders to dispose of their shares. New section 10E empowers the Minister to do so if, for example, he finds that the shareholder is: (a) not a fit and proper person; and (b) he is a person whose likely influence is to lead the newspaper or broadcasting company to no longer conduct its business prudently. I wonder what does this Bill mean by "a person who is not fit and proper" to hold such shares. Does it mean only persons who are associated with the PAP are considered as fit and proper? I also wonder what is meant by "no longer conduct its business prudently?" What does this refer to? Does it refer to financial prudence or political prudence, or prudence in reports on the Opposition? Sir, do we believe in an open society, market economy and a free exchange of ideas? Or do we believe in control? On the one hand, the PAP Government talks about market economy but requires shareholders, newspaper and broadcasting companies to be subject to approval to own shares. In one breath, the PAP Government talks about openness and transparency. In the same breath, the PAP is empowering Ministers with the wide discretion to control the media by controlling who can own shares and have voting rights in the companies. This effectively ensures that the management of a media company is firmly in the hands of the Government. It echoes what the Government says and toes the Government's line. This, I believe, Sir, would be the underlying cornerstones of remaking Singapore.

Mr Speaker, Sir, this Act was enacted in 1974 for the licensing of newspaper companies. Newspaper companies are private in nature and not state-owned. There should, therefore, be liberal market forces at play, with regard to ownership of shareholdings in these companies. Take precedents like in USA, England, India and Australia, I wonder if there are similar provisions restricting the shareholdings of shareholders and directors. We are, Mr Speaker, Sir, a democratic nation and there must be freedom of the press and ownership of the press. The Government is here to govern and should be less involved with newspaper companies and about shareholders of such companies, just like other private and public companies, where the Government should be least involved. There should be, preferably, a hands-off approach as the years go by. And let there be more liberal ways so that we have a more vibrant and dynamic newspaper and printing presses industry in the days ahead. If there is abuse or danger posed to the security or well-being of our nation, there are enough laws in Singapore to deal with such potential offenders. Having read the provisions, Mr Speaker, Sir, the provision under clause 12, relating to the compounding of offences, is most welcome, and the Hon. Minister will have the discretion to allow compounding of relevant cases and that will avoid the necessity for prosecution in a court of law. Related to the newspaper industry, Mr Speaker, Sir, may I be permitted also to say that since Independence in 1965, we, in Singapore, I understand, cannot purchase Malaysian newspapers in Singapore. Similarly, Malaysians cannot purchase Singapore newspapers in Malaysia. We in Singapore and Malaysians in Malaysia, have free access to the Internet, foreign newspapers and magazines from all over the world, but not from each other's countries. Information is available and accessible very easily. Then why this restriction between Singapore and Malaysia on the availability of our respective newspapers? There may be political reasons in the 1960s, and perhaps 1970s and 1980s. It shows how suspicious our politicians and Malaysian politicians were and still are, but our citizens may look at things differently. I for one do. We need a set of new thinking amongst our political leaders and Malaysian political leaders. It is about time political leaders from both countries revisited these rules with a genuine interest in building more trustworthy and practical approaches to dissemination of information and political and social issues between our two nations. The political leadership must venture to close the gap and create the right ambience and environment to learn from each other, to respect each other and create positive rapport between the citizens of Singapore and Malaysia. And once the citizens of both countries read each other's newspapers, both sides would appreciate each other's political arguments and rationale for political, economic and social decisions made by our respective leadership. Let us all be more enlightened and progress on with accurate facts, critical arguments and various arguments, and let the citizens and people of both countries decide for themselves and respond genuinely and more positively based on ideas and thoughts, and not manouverings. As a side note relating to the newspapers' ability to educate their readers, may I also encourage our newspapers to cite in their articles or stories, all the relevant websites and articles and Government materials and their websites being relied on by journalists, politicians and civil servants so that the reader would be aware where the sources came from. So, at the end of each article, there must be, almost compulsorily, websites and articles that were relied on, so that the discerning reader would move on to read those articles, and we would find better debates, not just in Parliament but in Singapore as a whole. Our citizens are more intelligent, I would say, and more discerning these days, and let them decide, after analysing the facts and issues as they perceive it.

Mr Speaker, Sir, I thank the speakers who have spoken in support of the Bill. A number of issues have been raised, some of them not directly related to the amendments, but let me take them in any case. Mr Andy Gan has asked that the media encourage the arts by giving it greater coverage. I leave this to the media to follow up on this suggestion. I also hope that they will give more coverage to the arts, since I wear the other hat of being the Minister in charge of the arts in Singapore. But to be fair, I think the coverage of arts has increased over the years, and some of the newspapers are publishing supplements from time to time. Some of them do have enhanced coverage of arts events in Singapore. Mr Chandra Mohan has raised a number of issues and also some suggestions for newspaper companies to cite websites when they write their articles. Again, I leave this to the newspaper companies to take up his suggestion. The power of web technology really is in the connectivity, and I think there are already many of the hyperlinks provided on the news sites that one can visit today. The substantial issues raised about this particular Bill concern control over the media. Mr Chandra Mohan asked whether other countries have also limits on ownership. Indeed, they do. As I know, foreign ownership of newspapers is capped at 20% in the United States. Likewise, in Canada, it is capped at 25%. In France, foreign ownership is not allowed. And I believe there are also ownership restrictions in Australia and UK, although in Australia these are being reviewed at this point in time. So we are not alone in setting ownership restrictions for foreign owners. The reason for this is that it is important that we do not have undue foreign influence in our local media. The controls are put in place so that Singaporeans can decide for themselves what kind of a life they want to have in Singapore, and we can decide for ourselves how our society will develop and grow. The controls are not put in place to silence anyone, nor are they put in place for the Government to tell the media what they can or cannot write. The Government does not tell editors what they should write in their editorials. Journalists can write op-ed pieces and, from time to time, they do write op-ed pieces that are critical of Government policies. They report on the news, sometimes to the chagrin of Ministers or Backbenchers, as they do not quite get the message they want reported. So there is no attempt here to determine how the media should report the news. But our objective is to ensure that we have a credible, a strong and a responsible media. And for this reason, we have put in controls. The control that Mr Low Thia Khiang referred to, as to who can own shares, and why this is up to the Minister to decide, refers only to substantial shareholdings. And there is a big difference here. Mr Low Thia Khiang, Mr Speaker, or any other Member in this House, or any other person in Singapore or elsewhere can buy shares in newspaper companies without any restriction and without any permission from the Minister. But when his aggregate of shares exceeds 5%, then he requires the permission of the Minister. This is to ensure that no one person, company or entity holds a large amount of shares and is therefore able to exercise undue influence over the operations of that newspaper company. Sir, I believe, I have dealt with the issues that Members have raised.

Sir, is the Minister saying that this Bill only restricts foreign ownership, as he just now cited examples of other countries? I think he has not responded to me on what is meant by "fit and proper person" and "prudent" in the running of a company.

Mr Speaker, can I ask Mr Low Thia Khiang exactly which clause he is referring to? If he is referring to new section 10E, there it says that the Minister may serve a written notice of objection on any person referred to in section 10A or 10B if the Minister is satisfied that the person ceases to be a fit and proper person. Is that the clause he was referring to? I am not quite sure of the question, Mr Speaker. I think a person who is "fit and proper" has a proper definition under the Act.

Sir, I am referring to new section 10F which says that if "any person has contravened section 10A, 10B or 10C, ." that he would be directed to dispose of his shares. And it says on many occasions that the person should be a fit and proper person.

Sir, the intent of clause 10F is to ensure that if a person exceeds the provisions of clause 10A and 10B, that is if they exceed the 5%, and the 12%, then the Minister should direct that they dispose of those shares.

What do you mean by "fit and proper person"?

Let me read new section 10F for the Member's benefit. It says: "Without prejudice to section 10G, if the Minister is satisfied that any person has contravened section 10A, 10B, [these two sections are the sections that refer to the 5% control and the 12% control] 10C(4) or 10E(5) or any condition imposed under section 10C(2), [which are basically elaborations of those sections earlier] or if the Minister has served a written notice of objection under section 10E, the Minister, may by notice in writing -

direct the transfer or disposal of all or any of the shares in the newspaper company held by the person or any of his associates.. within such time and subject to such conditions as the Minister considers appropriate;" Sir, I think what Mr Low Thia Khiang is perhaps alluding to is whether "fit and proper person" refers to a particular political affiliation. I give him the assurance that it does not. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr David T. E. Lim]. Bill considered in Committee, reported without amendment; read a Third time and passed.

Order for Second Reading read. 6.20 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, a short while ago, at the Second Reading of the Newspaper and Printing Presses (Amendment) Bill, I explained the changes to the shareholding provisions of the NPPA to align them with the Banking Act. I stated that corresponding changes would be made to the Singapore Broadcasting Authority Act (SBA Act) as its ownership provisions mirror those in the NPPA. This Bill introduces those changes to the shareholding controls in the SBA Act. Based on the principle of safeguarding against undue influence, the Bill also proposes amendments to extend the provisions on broadcasting companies to their holding companies and make other updates to the Act. As I have already spoken in some detail on the changes to the shareholding controls in the NPPA, which are paralleled in this Bill, I propose to now concentrate on the other changes to the SBA Act. Sir, allow me to first explain that our regulatory regime for media companies takes a differentiated approach. Stricter controls apply to broadcasting companies, because broadcast is a more emotive media than print. In the wrong hands, it can be easily used to manipulate audience's opinion and undermine our hard-earned social harmony and stability. It is with this in mind that we have put in place ownership and management controls for broadcasting companies. However, changes to corporate structures can circumvent this intent. Let me illustrate. In the media business, a holding company with several media subsidiaries is a common ownership structure nowadays, eg, Rupert Murdoch's News Corporation is a holding company of subsidiary media companies like Fox News Channel and Fox Broadcasting Company. Such holding companies may, and in many instances do, have a large influence over the operation of their subsidiaries. However, the SBA Act currently does not apply to such holding companies. This is unlike the Banking Act where the shareholding provisions extend to designated financial holding companies. We therefore need to amend the SBA Act to ensure that no single person or foreign party can buy up majority stakes in a broadcasting holding company and unduly influence their broadcast subsidiaries. Clause 4 of the Bill therefore amends section 43 to extend the definition of a broadcasting company, to include its holding company. The shareholding and management provisions in Part X of the Act will thus also apply to broadcasting holding companies. For existing broadcasting companies, MITA's intention is to grant approval to their holding companies upon application, for the relevant provisions in the Act. Depending on the situation, the Minister may also exempt certain holding companies from the provisions. Sir, I will now go through the other changes to the Act. Clause 3 amends section 20 to provide that no person shall provide a licensable broadcasting service in or from Singapore without a broadcast licence granted under section 20 or a class licence granted under section 21. This corrects the current legal loophole relating to the class licence scheme, where the continued operation of a licensable broadcasting service by a person or group after the application of his or its class licence has been suspended, is not addressed. The changes will not affect the light touch nature of the class licence scheme. Clause 5 of the Bill amends section 44 to clarify that the full Board of Directors, Board Chairman and Chief Executive Officer, of a broadcasting company, are to be approved by the Singapore Broadcasting Authority. It also provides an updated definition of a "Chief Executive Officer". Clause 8 of the Bill amends section 47 to clarify that the 49% foreign ownership limit for a broadcasting company applies to the aggregate of shareholdings by foreign sources. Lastly, sections 46 and 73 of the Act are amended to broaden the definition of foreign source and to widen the exemption clause in the Act respectively. As these provisions are parallel to the Newspaper and Printing Presses Act I shall not elaborate any further. Mr Speaker, I beg to move. Question proposed.

Mr Speaker, Sir, I agree with the amendments to limit foreign ownership in the broadcasting industry and the powers empowered to the Minister. This will ensure that the local media, and in particular the broadcasting media, will not be used by foreign influences and provide necessary checks to avoid undesirable outcomes. However, as in the Newspaper and Printing Presses (Amendment) Bill, I would like to ask the Minister to urge the broadcasting companies to place more emphasis on the promotion of the arts. The recent Arts Festival has drawn to a close. It has been touted as the best festival in its history. But may I ask how many of these programmes, including both local and overseas productions, will reach the households in the heartlands? Some of these productions are extremely rare, and considered gems in the arts community. They are performed by leading and outstanding masters, directors, artistes, musicians, conductors and choreographers. We are indeed privileged to have them perform right here in Singapore, yet it is regrettable that not enough is being done to maximise their presence. On a more regular basis, local professional arts companies, like Singapore Symphony Orchestra, Singapore Chinese Orchestra and Singapore Dance Theatre, have regular performances. These are considered national arts companies. It is unfortunate that their performances and hard work are not telecast in its entirety on television, the reason being broadcasting companies fear they will compromise profitability and viewership. We should ride on well-known personalities and excellent productions to enhance arts appreciation and arts viewership. I am sure that I have the support of the National Arts Council that the media bears a moral responsibility and obligation to promote arts in Singapore. We should encourage the media to increase the broadcast time made available for arts programme and telecast such productions live to households, if not at least a delayed telecast. If we were to look at the programmes on local television channels, arts programmes are almost non-existent. In a week's television programme schedule, only about 5.5 hours of programmes broadcast on Central Channel are arts related programmes. This constitutes about 4.7% of the channel's total broadcast time in a week. If we look at all the local channels, including Channel NewsAsia, Suria, Channels 5 and 8, and Channels I and U, arts programmes make up less than 1%. We should cultivate our local media to broadcast selected arts programmes, especially local productions, bringing them to the heartlanders. The recent exchange of letters in the media between MediaCorp Singapore and Singapore Press Holdings (MediaWorks) on the amount of subsidy each receives has drawn widespread concern on public service broadcasting. Public service broadcasting is television meant to meet diverse needs and interests, including that of our minorities. The society gains as one. Increased broadcast time of arts programmes will act as a catalyst to boost the arts scene and enhance appreciation level. The arts is a sector justifiable as a public service broadcasting. I would like to see revenue derived by the Singapore Broadcasting Authority be put to good use, as subsidies given to broadcasting companies are to encourage them in their efforts to boost our local arts scene. We need to re-position the arts and make it accessible to the heartlanders. I believe the media has an undeniable responsibility in helping Singapore realise that.

Mr Speaker, Sir, this Act was passed in 1994 to regulate dealing in, operation of, and ownership in broadcasting services and broadcasting apparatus. Our Government should, as far as possible, let market forces decide on ownership of broadcasting companies. We should have a more liberal approach to ownership of broadcasting in Singapore and open up to internationalised broadcasting, in line with internationalisation of businesses, professions, cultural activities and sports. The need, therefore, to get approval to appoint the Chief Executive Officer, Chairman or Director from the Singapore Broadcasting Authority seems to go against normal market forces. And I wonder if there have been any negative appointments recently to introduce this strict rule in this proposed Bill. The Broadcasting Authority may also wish to consider and be allowed to have more liberal ways of broadcasting programmes from abroad, especially ASEAN countries. We should broadcast more ASEAN countries' programmes on radio and television, so that we become more educated and enlightened about our neighbours. What do we know about Myanmar, Kampuchea or even Thailand? I will be the first one to admit that I know very little. Perhaps the Broadcasting Authority and the printing presses likewise have a national duty to educate our citizens and leaders. The Internet and modern communication systems traversed by our people abroad would certainly allow them to have more access to broadcasts of these countries. Let us, as Singaporeans, take the initiative of promoting ASEAN broadcasts in Singapore. We could perhaps start with their channels involving culture, songs and sports. In this way, other ASEAN countries too would do likewise. It is important that locally, amongst our people and also in the international arena, we are seen to be more liberal, just like in our other walks of life, including trade, business, professional work, cultural works and sports.

Mr Speaker, Sir, first, let me deal with what Mr Chandra Mohan has raised on the question as to why we need to approve the appointments of Chairman, CEO and other directors of the Board for broadcasting companies. This has been the policy intent all along. There are provisions under the Newspaper and Printing Presses Act (NPPA) to ensure that we appoint people whom we feel would take on the responsibility of running the newspaper company. Likewise, we should do so for the broadcasting companies. There is no particular reason or trigger point, as Mr Mohan is suggesting, as to why we are doing the amendment at this point in time, except that it is a policy intent, and that we are making the amendments to the Act, and so we have put it in. I have explained earlier the reasons for doing so when I spoke on the NPPA. I emphasised in my Second Reading speech that television broadcast, as a media, is especially potent in the way it arouses emotions. It is one thing to read about a fiery speech in a newspaper, but that only appeals to those with a certain intellect who can absorb the meaning of the words. But when you see this on television, whether or not you understand the words, you read the facial expressions, you read the body language, you see whether the person is animated or not, and you see how the crowd reacts. And all that can create an emotive response. For that reason, we want to be particularly careful about how broadcasting companies operate. And for this reason, we have put in this amendment. Mr Speaker, Sir, Mr Andy Gan has appealed for the broadcast media to play a broader role in promoting the arts, and Mr Chandra Mohan has appealed for the promotion of greater understanding within ASEAN. Both are good suggestions, and it is commendable that we should want to try to do more in these areas. Again, I would leave it to the broadcast companies to consider these suggestions. However, I would just say that while we can put on programmes on the arts or on ASEAN, at the end of the day, it is whether people watch these programmes. Broadcast companies are commercial entities. If we subsidise them with a lot of public funds, then we must be sure that the subsidies bring about a certain benefit. As it is, there are already questions about whether we should collect as much TV or radio licence fees as we do now, and we have explained why this is necessary, why this is important, and how this does benefit society through public service broadcasting on channels such as Suria or Arts Central. The fact that we can enjoy a certain degree of arts programming in Arts Central is because we have such public service broadcast funds. To do more means that we have got to raise more fees. And, again, I do not think that will be popular or acceptable at this point in time. But within the limits, I think we can take up the suggestions of both Mr Andy Gan and Mr Chandra Mohan. But we just need to bear in mind that it is one thing to produce a stage; it is quite another thing to produce the audience.

Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr David T.E. Lim].

Bill considered in Committee; reported without amendment; read a Third time and passed.

Resolved, "That Parliament do now adjourn." - [Mr Mah Bow Tan].

Adjourned accordingly at Eighteen minutes to Seven o'clock pm.

asked the Minister for Law (a) what is the rationale behind the Singapore Land Authority's requirement for 3 months rental deposits or security in lieu from charitable voluntary welfare organisations (VWOs) since the rentals are being paid by their respective ministries; and (b) this being the case, will the Minister consider having this requirement waived as the 3 months' deposits are quite substantial and can be better utilised by the VWOs.

Like other prudent landlords, SLA requires a security deposit to be paid by a VWO renting state premises for the following reasons: (a) firstly, to ensure that the tenant complies with the conditions of the tenancy agreement, (b) secondly, to ensure payment of rental, and, (c) thirdly, to recover the cost of repairs and rectifications in the event of any damages when the tenant vacates the property. As a general practice, SLA collects rental payments directly from the VWO. However, in some cases, the parent agency overseeing the VWO requests to pay the rentals directly to SLA to avoid incurring late payment charges. Even for these cases, the security deposit is still required to ensure that the VWO complies with the conditions of the tenancy agreement as well as to cover the cost of repairs and rectifications arising from any damages to the property. For these reasons, the Singapore Land Authority requires a security deposit, currently set at 3 months. SLA is prepared to waive the deposit for VWOs that have secured a guarantee from a parent agency or ministry. In addition, to ease the cashflow of VWOs, SLA is also prepared to accept other forms of guarantee, such as a banker's or an insurance guarantee, in lieu of upfront cash deposit.

asked the Minister for Law whether he will direct the prosecutor not to reveal the name of the person who is charged with a sexual offence until he/she is proven guilty by a court of law.

Sir, I had responded to a similar query at the Committee of Supply debate in 1996. The Minister for Law does not have the powers to direct the Public Prosecutor not to disclose the names of accused persons. Indeed, there are no legal provisions specifically prohibiting the disclosure of an accused person's identity. Persons accused of sexual offences are not more vulnerable than persons accused of other types of offences. Hence, if we introduce a measure, say, by amending the law, to suppress the identity of an accused person in a molest or rape case until he is found guilty, then, we should similarly adopt the same measure for other types of offences. A person, whether male or female, charged with, say, murder, assault, theft or criminal breach of trust, will potentially face the same sort of embarrassment as a person charged with committing a sexual offence. At a more fundamental level, it is a basic principle of our legal system that, except in extraordinary circumstances, the courts are open to the public. This ensures that court proceedings are transparent and subject to public scrutiny. Hence, the media must generally be free to report what goes on in court. Where a trial is covered by the media, it will usually follow up with a report of the verdict. The publication that a defendant has been acquitted ought to set the record straight. The positions adopted by other countries, for example, the United Kingdom and Canada are largely similar to Singapore's.

asked the Minister for the Environment what are the steps taken by his Ministry to ensure that hawker centre stalls are open for regular daily periods to serve customers.

For stalls on subsidised rental, ENV, HDB and JTC conduct periodic checks on stallholders to see that they operate their stalls regularly to serve the public. Generally, stallholders are expected to operate their stalls for at least a few hours a day for 5 to 6 days a week to serve the public. Those found not operating their stalls regularly or for a prolonged period of time will be asked to resume business, unless they have good reasons for not doing so, for example, due to medical reasons or if they were on overseas trips. Action may be taken to have the tenancy agreements terminated and the stalls repossessed for stallholders who persist in not opening their stalls regularly. In 2001, 170 stallholders were found to have not operated their stalls regularly. All of them resumed business at their stalls, after they were asked to do so. In the last 3 years, only one subsidised stall was repossessed in 1999 because the stallholder did not operate the stall regularly, after repeated reminders and warnings. For stalls paying market rental, the stallholders would normally terminate their tenancy agreements if they are unable to operate their business viably.

asked the Minister for Transport (a) if he will give an update on the preparation of the Airport Logistics Park of Singapore which will operate as a free trade zone in the near future and (b) whether Changi Airport will be seeking to increase its income through business cooperation with other airports around the world.

The Airport Logistics Park of Singapore, or "ALPS" for short, is being developed by CAAS and JTC within Changi Airport's Free Trade Zone (FTZ). ALPS was launched in November 2000 to allow Third Party Logistics service providers (or 3PLs) to export and distribute goods from local and regional manufacturers to the Asia-Pacific market in a cost-effective and timely manner. By siting their operations at ALPS, 3PLs can customise their operations to achieve rapid turnaround time while enjoying an exemption from various Government procedures for goods that do not leave the FTZ. CAAS is responsible for the land and infrastructure works for ALPS. These works will be completed by January 2003. One company has started work on its own building which is expected to be completed by end of this year. Another MNC logistics company has also decided to build its facilities in ALPS. EDB is discussing with several others. With the gradual upturn of the global economy, CAAS, EDB and JTC are stepping up their marketing efforts to attract key logistics players to set up operations in ALPS. When fully operational, ALPS will enhance Singapore's position as a leading transport and logistics hub in the Asia-Pacific region. Mr Gan also asked about CAAS' overseas investments. CAAS is investing in overseas airports as part of a business strategy to diversify its revenue streams. Through its subsidiary, Singapore Changi Airport Enterprise (or "SCAE"), CAAS has a 50% equity stake in Alterra Partners, a London-based airport investment company with Bechtel as the other shareholder. Alterra presently operates airports in London, Costa Rica and Lima. It is actively pursuing airport development and operation projects in Europe, Latin America and Asia including China and India. SCAE also provides consultancy services to airports in the Asia-Pacific region such as airports in the Philippines, Fiji, India and China. Earlier this month, it signed an MOU with Hangzhou Airport in China to provide consultancy services.

asked the Minister for National Development whether the HDB will consider implementing free parking on Saturdays at HDB estates so as to encourage family members and friends to visit one another and to strengthen bonds.

The free parking scheme on Sundays and public holidays operates from 7.00 am to 10.30 pm. It was introduced in 1986 to promote social interaction and foster family ties. HDB is aware that weekends and public holidays are usually the time when families and friends get together. At the same time, HDB has to be mindful of the parking needs of residents. With the current scheme, HDB has received complaints from season ticket holders that they are unable to find parking lots on days when the free parking scheme is in operation. Where there is a severe shortage of parking lots, the free parking scheme on Sundays and public holidays has been withdrawn to ensure that the parking needs of the residents are met. HDB currently has no plans to extend the free parking scheme to Saturdays.

asked the Minister for National Development in view of the HDB, having moved to its new premises in Toa Payoh in June, and having shelved its plans to sell its HDB Centre at Bukit Merah and decided to lease out the property instead (a) what is the occupancy rate of the property now and what will be the projected occupancy rate in the near and mid-term and (b) if the occupancy rate is low, will the HDB consider putting the space to more efficient uses, such as leasing it to Government agencies or leasing it at nominal rates to community, socio-civil or non-profit organisations.

HDB has appointed a panel of 5 marketing agents to help lease out its former premises at Bukit Merah, which are currently unoccupied. HDB expects demand for the office space at its former premises in the near term to be weak. However, HDB will, through its marketing agents, actively market the vacated premises. HDB has approached various Government agencies to take up the office space at the HDB Centre at Bukit Merah. These agencies are currently considering HDB's offer. HDB will also consider renting out the office space to community, social-civil or non-profit organisations.

asked the Deputy Prime Minister and Minister for Finance (a) if he will give a full list of Government linked companies (GLCs) and (b) what happen to the funds raised when these GLCs are sold off.

A listing of all the companies in the Temasek Group will not be meaningful. For example, many of the companies are set up for specific purposes in accordance with industry practice. Thus, each ship of Neptune Orient Lines is owned by a separate company, and every building under development typically comes under a separate company. It will be more meaningful to look at the businesses that the Temasek group of companies are involved in. The main business areas and the major companies in each area are as shown in the table below: Main Businesses Major Companies Finance DBS Group Holdings ECICS Holdings Telecom & media Singapore Telecommunications ST Telemedia1 MediaCorp of Singapore Keppel Corp Multi-industry Singapore Technologies Pte Ltd SembCorp Industries1 Keppel Corp Transport & logistics Singapore Airlines PSA Corp Neptune Orient Lines SMRT Corp SembCorp Logistics1 Property CapitaLand1 Keppel Land Mapletree Investments Infrastructure & ST Engineering1 engineering SembCorp Industries1 Keppel Corp PWD Corp Utilities Singapore Power SembCorp Industries1 Keppel Corp Tuas Power PowerSeraya Senoko Power City Gas Gas Supply Main Businesses Major Companies Others Chartered Semiconductors Manufacturing1 ST Assembly Test Services1 Wildlife Reserves of Singapore Singapore Pools Temasek Management Services 1 Denotes company is held through Singapore Technologies Pte Ltd. When companies in which Temasek has a direct stake are sold off, the proceeds of divestment are returned to the Government.

asked the Deputy Prime Minister and Minister for Defence (a) why was a United States Air Force pilot allowed to fly our Republic of Singapore Air Force fighter aircraft which crashed recently in Arizona in the United States and (b) who will be footing the loss of the aircraft.

The Government of Singapore has an agreement with the United States Government to base Republic of Singapore Air Force (RSAF) F-16 aircraft in Continental United States to facilitate the training of RSAF pilots and technical crew. This arrangement allows the RSAF to overcome Singapore's lack of airspace and provides an opportunity for RSAF to benchmark itself against the United States Air Force (USAF). Such an arrangement also allows the RSAF to draw on the experience of qualified USAF personnel during routine training. For this reason, a selected class of USAF pilots is allowed to fly our F-16 aircraft under the agreement. The USAF pilot involved in the incident is an experienced Instructor Pilot who trains with our RSAF pilots. The issue of claims will depend on the outcome of ongoing investigations to determine the cause of the crash.

asked the Minister for Transport (a) why are the wall tiles, which are in perfect condition at various MRT stations, such as those at Commonwealth, Buona Vista and Clementi, being hacked off and replaced by a coating of cement and paint; (b) what is the purpose of these works and the amount spent; and (c) will these works add to the rising cost and ultimately in higher fares to be borne by commuters.

Heavy-duty ceramic tiles were used for the architectural finish of the exterior of the MRT stations at Redhill, Queensway, Commonwealth, Buona Vista and Clementi. This was an acceptable method of external finishing when the stations were built more than 14 years ago. However, over the past 10 years and as a result of normal wear and tear, some of the tiles have been falling off. To prevent any risk of falling tiles causing injury to commuters, SMRT erected safety nettings. It also carried out a study to determine the extent of the problem and reviewed the possible solutions. The study concluded that the most cost-effective solution is to completely remove the tiles and replace them with a coating of cement and paint. SMRT estimated that this will cost about $900,000. Works have been in progress since mid-2001. SMRT believes that the painted walls will be easier and no more expensive to maintain than the ceramic tiles over the long term.

asked the Minister for Manpower if he will provide statistics of the population for the year 2001 with breakdown figures of citizens and permanent residents, blue-and-white collar employees, the unemployed, the home-makers, the retirees and those not working such as students and the young.

There were 2,119,700 persons in the labour force in June 2001. The labour force comprised 2,046,700 persons who were employed and 72,900 unemployed. Of the employed persons, professionals, managers and technicians made up 46%, followed by production workers, cleaners and labourers (30%) and clerical, service and sales workers (24%). There were 1,121,100 economically inactive persons aged 15 years and above. Of which, 496,600 (44%) were home-makers, 279,200 were schooling or taking courses (25%) and 159,200 were retired (14%). The figures as at June 2001 are summarised below: Total Workforce (aged 15 years and 2,119,700 above): Employed Persons: 2,046,700 Professionals, Managers & Technicians 933,900 Clerical, Service & Sales 505,500 Production, Cleaners and Labourers 607,300 Unemployed Persons: 72,900 Economically Inactive Persons (aged 15 1,121,100 years and above) Home-makers 496,600 Schooling/Taking Courses 279,200 Retired 159,200 Others 186,100 Source: Report on Labour Force in Singapore.

asked the Minister for National Development (a) what is the extent of the problem of spalling concrete in HDB flats, especially those flats built during the "accelerated programme" years in the 1980s; (b) what are the plans, if any, to help rectify the affected flats; and (c) whether his Ministry will consider extending the HDB grant to subsidise the repair cost of spalling concrete.

Spalling concrete is the result of a deterioration process called carbonation whereby carbon dioxide diffuses into the concrete and forms carbonates when it reacts with the alkalis in the concrete. Carbonation reduces the level of alkalinity in the concrete, thus allowing the steel bars in the concrete to corrode. The corrosion causes the steel bars to expand forcing the concrete surrounding the steel to crack and spall, exposing the steel bar. Spalling concrete is a natural phenomenon and it occurs in all concrete buildings as the buildings age over time. It is not peculiar to any flat type or flats which were built in certain years or during a certain period. HDB flat owners who encounter spalling concrete problems in their flats can report them to their respective HDB Branch Offices. HDB will assist the flat owners to investigate the cause of the problem and recommend appropriate remedial action. For flat owners who have difficulty in finding a suitable repair contractor on their own, HDB will also assist to provide them with a list of repair contractors for them to negotiate with on a private basis. Under the lease, HDB flat owners are responsible for the repair of spalling concrete in their flats. As such, the Government cannot subsidise the repair cost for spalling concrete problems.

asked the Minister for Health (a) whether his Ministry will allow Dry Air Steriliser to be used as a form of sterilization at general practitioners' clinic; and, if not (b) what is the rationale for not allowing this use.

Steam autoclaving is recommended by the Ministry's Advisory Committee on Infection Control as a method for sterilisation of all heat-stable surgical instruments. Dry heat using a hot-air oven is only recommended for materials that might be damaged by moist heat. Examples of such materials include powder and fine instruments used for microsurgery. Dry heat sterilisation process is more difficult to control and monitor because of the following: (i) the long duration of time taken to reach recommended temperatures to achieve optimum sterilisation (time taken may vary from 1/2 hour to 1 hour depending on the make of the hot air oven); (ii) uneven distribution of heat, and therefore proper sterility cannot be assured unless other monitoring devices, such as biological indicators, are used to show that sterility has been achieved. The Ministry's primary concern is patient safety and infection control. Health care institutions should use the recommended method to sterilise reusable heat stable instruments. Alternatively, they could use sterile disposable instruments.

asked the Minister for Health what is the Government's subsidy per attendance at polyclinics for (i) acute illnesses and (ii) chronic illnesses.

asked the Minister for Health what is the amount of his Ministry's payment to general practitioners under the Primary Healthcare Partnership Scheme as compared to the subsidy given to the polyclinics.

asked the Minister for Health whether the Primary Healthcare Partnership Scheme covers chronic illnesses such as hypertension, and if not, why not.

The Government provides 50% subsidy for adult patients and 75% subsidy for child and elderly patients who seek medical treatments at polyclinics. In dollar terms, an adult would receive $10 subsidy per attendance for acute illness and $36 subsidy per attendance for chronic illness. For child and elderly patients, the Government's subsidy is higher, at $15.50 per attendance for acute illness and $54 per attendance for chronic illness. General practitioners (GPs) contracted under the Primary Care Partnership Scheme (PCPS) are subsidised on the same basis as elderly attendance at the polyclinics to cover their operating costs, rental and GST. GPs are paid $18.50 for each elderly patient that they see. PCPS covers common outpatient medical services and dental services. It does not cover chronic conditions such as hypertension. This is because proper management of chronic conditions requires a multi-disciplinary team of healthcare professionals to achieve good treatment outcomes. Polyclinics are in a better position to provide such comprehensive care.

asked the Minister for Health (a) whether the removal of Miss Raja's decayed tooth was necessary before she could go for a liver transplant operation; (b) if so, could the decayed tooth be extracted under anaesthesia; (c) how and when was the information that the decayed tooth could be extracted under anaesthesia communicated to her and her family; and (d) as her condition was already critical and she had finally decided to go for the extraction, why was she made to wait for another two days for it.

The Attorney-General's Chambers have advised that it is not appropriate to release patient information to the public. As these questions pertain to specific information in a patient's personal and confidential medical records, it would not be appropriate to provide detailed replies to all the questions as we do not have the consent of the patient or the next-of-kin. The following reply provides general information about the necessity of performing dental extractions for patients who are scheduled to undergo liver transplants. In any event, Ms Raja was a patient of the National University Hospital, not the Ministry of Health. The NUH is a restructured hospital and is independently managed. MOH does not have access to NUH records except as a regulator. Prior to liver transplantation, it is good clinical practice to treat or remove infected teeth, as these may become potential sources of infection in the patient after the transplant procedure. However, this is not an essential medical requirement, and, as was the case for Ms Raja, would not delay transplantation should a suitable liver become available before the affected teeth are treated. It is a standard practice for the dental extraction to be carried out under local anaesthesia.

asked the Acting Minister for Information, Communications and the Arts why his Ministry did not carry out a simple check with the Inland Revenue Authority of Singapore regarding the tax of S$388 million before paying out the compensation to SingTel and who is going to be responsible for the loss to the Government.

The 1997 compensation to Singapore Telecommunications (SingTel) was for the premature loss of its monopoly rights. Deloitte and Touche, an international accounting firm, was engaged by the Telecommunications Authority of Singapore (now the Info-communications Development Authority of Singapore) to work out the compensation amount. They computed the compensation based on the loss of future earnings as a result of the early expiry of SingTel's monopoly rights. A review committee of civil servants endorsed the sum recommended. As it was based on loss of earnings, and as earnings would normally be subject to tax, the committee worked on the basis that the compensation was taxable. As this was a natural assumption, it never occurred to the committee to ask the Inland Revenue Authority of Singapore (IRAS) for a specific ruling on tax. Unfortunately, subsequent events showed that the committee was mistaken. The chronology confirms that the error was an honest mistake arising from a wrong assumption by the 1997 review committee. While a lesson has been learnt from the error, it would be inappropriate to punish the review committee or any of its members for it. To do so would only encourage a culture where civil servants shy away from taking responsibilities, and avoid making decisions for fear of committing mistakes. This is the opposite of what we are trying to achieve, not just in the civil service but in Singapore society. However, it is no excuse for civil servants not to endeavour to get their facts right, and to check and double-check details and assumptions.