Hansard, 2003-11-10

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: Name From (2003) To (2003) Dr Warren Lee 18 Oct 19 Oct 11 Nov 14 Nov 07 Dec 18 Dec Mrs Lim Hwee Hua 23 Oct 25 Oct 17 Nov 26 Nov 10 Dec 16 Dec Dr John Chen Seow Phun 24 Oct 02 Nov Mr Loh Meng See 24 Oct 27 Oct Dr Michael Lim Chun Leng 24 Oct 26 Oct Assoc. Prof. Koo Tsai Kee 26 Oct 29 Oct Mr Arthur Fong 27 Oct 01 Nov Mr Cedric Foo Chee Keng 28 Oct 03 Nov Mr K Shanmugam 28 Oct 28 Oct 10 Nov 10 Nov 27 Nov 27 Nov Mr Wee Siew Kim 28 Oct 31 Oct 10 Nov 10 Nov Column: 3265 Mr Davinder Singh 29 Oct 10 Nov 12 Nov 14 Nov Dr Amy Khor Lean Suan 30 Oct 01 Nov Dr Tan Boon Wan 30 Oct 31 Oct Mr Goh Chok Tong 31 Oct 03 Nov 18 Nov 25 Nov Mr Hawazi Daipi 31 Oct 02 Nov Mr Lim Hng Kiang 31 Oct 04 Nov Dr Wang Kai Yuen 31 Oct 02 Nov Mr Ang Mong Seng 01 Nov 05 Nov Mr Charles Chong 02 Nov 05 Nov Mdm Ho Geok Choo 02 Nov 05 Nov Mr S Iswaran 02 Nov 14 Nov 17 Nov 19 Nov 07 Dec 14 Dec Mr Yeo Cheow Tong 02 Nov 07 Nov 09 Nov 14 Nov Mr Chew Heng Ching 03 Nov 09 Nov Mr Gan Kim Yong 03 Nov 07 Nov BG George Yong-Boon Yeo 03 Nov 06 Nov 18 Nov 23 Nov Mr Tharman Shanmugaratnam 03 Nov 08 Nov Dr Ahmad Mohd Magad 04 Nov 08 Nov Ms Olivia Lum Ooi Lin 07 Nov 20 Nov Mr Leong Horn Kee 08 Nov 24 Nov 17 Nov 22 Nov 01 Dec 12 Dec Column: 3266 Mr Lim Swee Say 09 Nov 12 Nov 29 Nov 13 Dec Mr Inderjit Singh 10 Nov 15 Nov Mr Lee Kuan Yew 10 Nov 10 Nov Mr Chiam See Tong 11 Nov 21 Nov Mdm Halimah Yacob 11 Nov 21 Nov RAdm Teo Chee Hean 11 Nov 14 Nov Dr Tony Tan Keng Yam 11 Nov 19 Nov Mdm Cynthia Phua 14 Nov 17 Nov Mr Wong Kan Seng 15 Nov 22 Nov Mr David T E Lim 16 Nov 21 Nov 30 Nov 04 Dec Miss Penny Low 17 Nov 21 Nov Prof. S Jayakumar 17 Nov 23 Nov Encik Yatiman Yusof 17 Nov 21 Nov Dr Balaji Sadasivan 18 Nov 21 Nov Mr Khaw Boon Wan 18 Nov 23 Nov Dr Ong Chit Chung 18 Nov 20 Nov 01 Dec 02 Dec Mr Raymond Lim Siang Keat 18 Nov 23 Nov 08 Dec 22 Dec Mr Lim Boon Heng 25 Nov 04 Dec Column: 3267 Mr Seng Han Thong 29 Nov 08 Dec Mr Heng Chee How 03 Dec 10 Dec 14 Dec 18 Dec

ABDULLAH TARMUGI Speaker Parliament of Singapore

The following Bills were assented to by the President of the Republic of Singapore on the dates stated:

27th October,2003 i. The Goods and Services Tax(Amendment) Bill 30th October,2003 ii. The Marital Arts Instruction (Repeal) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Ms Irene Ng Phek Hoong asked the Minister for Defence (a) why, despite the

risks involved, is Singapore committing 192 servicemen and women to Iraq; and (b) what roles will they play in the reconstruction effort.

2. Mr Steve Chia Kiah Hong asked the Minister for Defence what is the rationale for sending 192 Singapore Armed Forces soldiers and equipment to Iraq, considering the high risk involved.

Mr Speaker, Sir, with your permission, I will take the two Questions by Ms Irene Ng and Mr Steve Chia together.

Yes, go ahead.

Mr Speaker, Sir, Singapore has contributed a C-130 transport aircraft and a landing ship tank or LST to the multi-national effort to help rebuild Iraq. Our C-130 detachment, comprising 31 SAF servicemen, will be on a 2-month mission carrying out airlift, transportation and supply missions. Our aircraft will assist coalition forces in carrying supplies and personnel, and also carry humanitarian material and conduct medical evacuation operations. The LST, RSS Endurance, with a crew of 160, is on a 2-month mission undertaking logistical tasks. She will provide replenishment and supplies for other naval vessels operating in the northern Arabian Gulf, and conduct patrols to show maritime presence. RSS Endurance will also provide a platform for helicopter missions and maritime boarding missions by teams from other contributing countries when they inspect ships in the operating area. On her way to Iraq, RSS Endurance also transported humanitarian aid material provided by the Singapore Civil Defence Force to the Iraqi Fire Department.

The international community recognises that the reconstruction of Iraq is an important endeavour. Besides Singapore, some 35 other countries are

deploying forces to make a contribution to the multi-national reconstruction effort. The importance of establishing conditions of stability and security in Iraq was also reflected in the unanimous vote for the United Nations Security Council Resolution 1511 on 16th October 2003 which urged states to contribute assistance, including military forces. Resolution 1511 highlighted the importance of international support to help the Iraqi people govern themselves, freely determine their own political future, and control their own natural resources. Resolution 1511 also urged countries to support the Iraq reconstruction effort and meet the needs of the Iraqi people by providing resources necessary for the rehabilitation and reconstruction of Iraq's economic infrastructure.

As a responsible member of the international community, Singapore has made contributions to the multi-national effort to assist in the reconstruction of Iraq. The C-130 and the LST follow on an earlier contribution of a Singapore Police Force contingent of 32 personnel to help train Iraqi police in the protection of critical installations. The people of Singapore have also responded to the need of the Iraqi people for international assistance by contributing to the Singapore Red Cross Society's appeal for funds for the reconstruction of Iraq. The appeal has now raised a total of $1.4 million, including a contribution of US$250,000 by the Singapore Government.

It is important that Singapore does our part within our means to help the international community see through the reconstruction of Iraq. This will help the Iraqi people to rebuild their lives, facilitate Iraq's reintegration into the global community, and provide the foundation for a better future for the Iraqi people. It is in our interest that this effort succeeds.

Without a stable Iraq, there can be no stability in the Gulf region. Security and stability in the Gulf region has significant implications for issues that are critical to Singapore, such as the supply of oil and the spread of terrorism. We may be geographically distant from Iraq, but how the situation turns out there has a direct bearing on some of our most vital interests.

The Government recognises that the situation in Iraq is still in transition and not yet stabilised, and there will be risks to our SAF servicemen as they carry out their mission to aid Iraq's reconstruction. But the SAF cannot shy away from missions in support of our national interests and our responsibilities as a member of the international community just because the mission carries some risks.

We should also remember that this is not the first time that the SAF has been deployed in a multi-national support mission where our servicemen have faced danger. In UNMISET in Timor Leste, our combat peacekeepers and helicopter detachment were deployed in operational missions. During the one and a half years that the SAF was deployed in UNMISET, our servicemen were involved in a number of dangerous situations dealing with civil unrest and the militia. In 1998, an SAF officer who served as a military adviser in the UN Support Mission to Afghanistan, which was a peace-making mission, was caught in more than one life-threatening situation during the battle for Mazar-e-Sharif. Such missions, including the current one to Iraq, carry an element of risk. But they also allow the SAF to gain useful operational experience.

MINDEF and the SAF mitigate the risks in such missions by making sure that our servicemen are well trained and well equipped to carry out their mission, and to deal with contingencies that may arise. For the deployment to Iraq, our aircraft

and ship are equipped with appropriate defensive systems. For instance, our C-130 is equipped with anti-missile defensive systems for self-protection. These systems are comparable to those of aircraft and ships from other countries which are carrying out similar missions there.

As a responsible member of the international community, Singapore has to make our contribution to multi-national missions, particularly where they safeguard our national interests. There are always risks involved in such missions, as in this deployment to Iraq. MINDEF and the SAF will ensure that our servicemen have the training and equipment necessary for them to carry out their missions, and to defend and protect themselves.

Sir, the British Prime Minister had to go to Parliament to get approval before sending the British troops to Iraq. Yet, why did our Government and our Defence Minister not get the consent of our Parliament before committing the lives of our Singapore soldiers to this high risk in Iraq? What is the role of Parliament if not to debate on important issues like sending our young boys to the war zone where lives are at risk?

Mr Speaker, Sir, there is no requirement in the Constitution or any law in Singapore where Parliament's approval must be obtained before our Armed Forces can be deployed outside our national borders. At the same time, the Constitution allows Singapore to enter into any arrangement with another country or countries where such an arrangement is beneficial or advantageous to Singapore in any way.

The deployment of the SAF overseas is a matter that touches on the defence of Singapore as well as the conduct of our

foreign relations and our larger national interests. These are matters that concern the governance of Singapore and are within the purview of the Prime Minister and the Cabinet. Under the Constitution, the Cabinet has the general direction and control of the Government and shall be collectively responsible to Parliament. On matters that are of great interest and concern to the people as a whole, the Prime Minister and the Cabinet will inform Parliament of its decisions and actions. The Government recognises that this deployment of the SAF to assist in the reconstruction of Iraq is a matter of interest to Singaporeans. Hence, we have this debate in Parliament.

Sir, I agree wholeheartedly with the Minister that we should not flinch from committing our troops, especially when it is in line with our national interests. But I want to ask the Minister whether he thinks the cause is justified in this case because, as we know, the weapons of mass destruction have not been found and the occupation of the US forces has provoked resistance and violence in some quarters by Iraqi groups.

Sir, I would just like to correct myself. What we are having now is a Question raised in Parliament on the issue, and not a debate.

Sir, whether the war in Iraq was authorised on the basis of a continuity of authority from 1990 to 2003 will no doubt be a matter of debate, probably continuing debate. I think the issue at hand now is what to do with the present situation in Iraq, and Singapore is not alone in feeling that countries should contribute to the reconstruction of Iraq. There are 35 other countries which are deploying forces to Iraq to help in the reconstruction and these include countries in the Asia-Pacific region such as Thailand which has 400 troops and the Philippines

which has 177 men there. They also include some countries from the OIC - Albania, Azeberjian and Kazakhstan and also those which were not originally in the coalition for the disarmament of Iraq, such as New Zealand. And, as can be seen from Resolution 1511, which was unanimously approved by the UN Security Council, this resolution calls for countries to contribute forces to help in the reconstruction and stabilisation of Iraq.

Sir, if the situation worsens, bearing in mind that even the International Red Cross has closed its offices in Basra and Baghdad, can the Minister tell us what measures will be taken to ensure a speedy and effective repatriation of our servicemen out of Iraq?

Sir, our servicemen are there to carry out a mission because the situation is uncertain and not stable. I expect that our servicemen should be there for the two-month duration that we said that they will be there.

Sir, the Minister said that sending of our troops to Iraq is in the interest to Singapore. Can I ask him in what way is our sending of troops to Iraq, which he admits is a nation very far away from Singapore, in the interest of Singapore?

Sir, I believe I covered that in my answer. I will, for Mr Chiam's benefit, read that section again:

'It is important that Singapore does our part within our means to help the international community see through the reconstruction of Iraq. This will help the Iraqi people to rebuild their lives, facilitate Iraq's reintegration into the global community, and provide the foundation for a better future for the Iraqi people. It is in our interest that this effort succeeds. Without a

stable Iraq, there can be no stability in the Gulf region. Security and stability in the Gulf region has significant implications for issues that are critical to Singapore, such as the supply of oil and the spread of terrorism. We may be geographically distant from Iraq, but how the situation turns out there has a direct bearing on some of our most vital interests.'

If this is the policy of Singapore, then Singapore should be sending troops to many other countries to make them stable which we can ill afford.

I think that is out of the realm of this Question, Mr Chiam. Can I have the next Question, Dr Chong?

3. Dr Chong Weng Chiew asked the Acting Minister for Manpower if the nominations of beneficiaries of Central Provident Fund (CPF) accounts do not include New Singapore Shares and, if so, whether CPF account holders have been informed of this.

Sir, as the New Singapore Shares (NSS) are not CPF funds, CPF Nomination does not apply. Instead, the NSS forms part of the estate of the deceased, as with other assets. This means that if an NSS owner passes away before 1st March 2007, his or her NSS will immediately be exchanged for cash and handed to the Public Trustee for estate distribution to the dependants.

If the deceased has made a will, the encashed NSS will be distributed according to the beneficiaries nominated by the deceased in his will.

CPF Members were informed of the treatment for distribution of their shares through the NSS website and the booklet

which was sent to all members. These booklets were also available at CPF branches. The treatment of the shares is also stated in the CPF Nomination Handbook.

The CPF Board has received requests from the public for the New Singapore Shares to be distributed according to CPF Nomination. The New Singapore Shares Trust Deed will need to be changed in order to provide for this. The Government is currently looking into this, and will inform the public of the outcome in due course.

4. Mr Arthur Fong asked the Acting Minister for Manpower (a) how many complaints from white collar workers of unfair dismissal were made to the Ministry's mediation unit each year since 1998; (b) what are the profiles of such companies, such as how many were local companies, small and medium size enterprises, multi-national corporations; and (c) whether he can provide a breakdown of the number of union and non-union workers who have lodged complaints against their employers for each of the years since 1998.

) (for the Acting Minister for Manpower): Between 1998 and August 2003, my Ministry received a total of 199 appeals against unfair dismissals by their employers; approximately 30 to 40 appeals each year. The 199 appeals involved 214 employees; of whom, 144 were unionised employees and 70 were not unionised.

25% of the appeals were from MNCs, while 75% were from SMEs and other establishments, such as hospitals, educational institutions and welfare organisations. The majority (59%) of the

appellants were blue collar workers and 41% were white collar workers.

What can the Ministry do in cases where companies rehire their workers under a new contract and under a business name and then terminate their services under a new contract in order that companies avoid paying the benefits had they terminated their staff under the previous employment contract signed that would have required them to pay benefits?

The Ministry will investigate whether it is a fair or unfair dismissal. There are two laws that govern this issue. One is under the Employment Act and the other is under the Industrial Relations Act. Under section 14(2) of the Employment Act and section 35(2) of the Industrial Relations Act, the Ministry will investigate any matter with regard to dismissal and the Minister will have the power to determine whether it is fair or if conciliation fails.

Sir, two follow-up questions. My first question is this. In the case of dismissals in Singapore, employers do not normally state the reasons why the workers are dismissed and part of the reason is that this is not required by the law. In most cases, in many countries, the law requires employers to state the reasons for the dismissal. So my first question to the Parliametary Secretary is whether the Ministry will consider amending the law to require employers to state the reasons for dismissals. This is important to ensure fairness and equity so that the worker knows why he is being dismissed and to put the employers on notice that dismissals must have merits.

The second question that I want to ask is that the Employment Act excludes from its ambit certain categories of employees, executives and confidential staff and, therefore, they do not have

recourse to the appeal procedures for wrongful dismissal stipulated under the law. Will the Ministry consider amending the law to allow those who are now presently excluded from making use of this procedure to enable them to do so, because the present recourse of going to the civil court is too expensive and time-consuming?

Sir, my short answer to the two questions is yes. If it is necessary, we will look into this. But, based on our experience, we find that the current system works, ie, there is recourse for workers to get their grievances heard and we will call both parties, the employers as well as the employees, so that both can be heard, and we try to arbitrate. If it does not work, we will adjudicate and the Minister will determine whether it is a fair dismissal or not and if some form of compensation is required.

Sir, the Parliamentary Secretary has just said that the Ministry will consider if it is a fair dismissal under the present case. But as I understand it, for those excluded from the ambit of the law, the Minister does not have that power. The question is: will the Ministry consider amending the law in order to enable the Minister to have the power to look into the categories that are presently excluded and also to ensure that there is fairness and equity in the treatment of workers who are wrongfully dismissed? Right now, there is no need for the employers to provide any reason whatsoever.

Sir, generally, for workers who are covered under the two Acts, even though the employers may not be required to state the reason, our officers at MOM will investigate. If there is reason to believe that the dismissal is being unfairly meted out, the Ministry will

require the employers to reinstate the employee.

But for workers who are not covered under the law, in future, if there is widespread unfair dismissal amongst these workers, we will take a look at the possibility of amending the law, if necessary.

Sir, with regard to the first issue, I think it is important that we have in place a system which requires the employers to give reasons when a worker is dismissed because not all cases go to the Ministry, judging from the numbers given. I think the numbers are pretty small. And there are also workers who do not know that they have this recourse. But if employers are told that they have to give reasons, that by itself is a deterrent action. At least, they know that they have to think carefully and they have to justify their dismissals.

I would like to urge the Ministry to seriously consider this request that the law requires employers to give reasons for dismissals.

Thank you very much for the suggestion. But from the figures that I gave earlier - out of 199 cases, 129 are union members and 70 are non-union members - it appears that our workers are quite well-informed about their rights. If necessary, we can launch a public education campaign about workers' rights and the unions can of course help in this matter.

But, generally, Sir, we find that workers understand their rights and, based on our experience, some appeals had been settled through conciliation. Let me give some figures. Out of 199 cases referred to MOM from 1998 to August 2003, 182 cases were settled. 92 appeals were settled through conciliation, 53 appeals were withdrawn, 7 appeals were upheld, and 30 appeals were

rejected by the Minister. So what I am trying to say here, Sir, is that the process allows workers to raise their grievances. We will hear them, we will try to conciliate and, as the figures bear out, we find that the majority of the cases were settled amicably through conciliation.

): If employers were required to give reasons that would act as a deterrent to termination of employment, would the Parliamentary Secretary care to comment how that would affect our workforce's flexibility and ability to respond to the vagaries of economic conditions?

Sir, I do not know how to comment on this kind of suggestion. Yes, there will be changes. As there have been changes in employment in Singapore, there will be a lot of workers who will be on contract and there will also be a lot of workers who are working part-time. So the nature of employment in Singapore has changed. We acknowledge that. What I am trying to say is that despite these changes, so far, the system has worked. If there is a need to look at the system to serve our workers better, we will have to look at it.

5. Mr Leong Horn Kee asked the Minister for National Development whether he will (a) review the existing policy restricting sale and purchase in the open market of HDB flats located in some estates due to the ethnic integration policy, and (b) allow some flexibility for sale by persons who are affected by retrenchment, hardship or other grave circumstances.

Mr Speaker, Sir, the Ethnic Integration Policy (EIP) was implemented in 1989 to promote racial harmony in public housing estates. The policy maintains the proportion of each ethnic group in a neighbourhood and a block within certain limits. It is applicable for the purchase of new flats from HDB as well as resale flats from the open market.

The EIP has worked well in forging ethnic integration and harmony among HDB residents. It has maintained the ethnic balance in our housing estates.

In 1989, 28% of the 125 neighbourhoods had at least one ethnic group which had reached or exceeded the neighbourhood limit. Now, there are 24% of such neighbourhoods, although the total number of neighbourhoods has grown from 125 to 165.

As the EIP is very important in maintaining racial harmony in Singapore, we have to apply it consistently. HDB will maintain this policy.

): I would like to ask the Minister of State whether, for some very special cases, like very difficult hardship cases or even retrenchment cases, the HDB could allow some degree of flexibility, say, just 5% of such cases, whereby a person can be allowed to change?

Mr Speaker, Sir, the EIP is applied consistently. In cases of hardship, we have other avenues to help residents. For those who are having arrears or difficulties making their payments, HDB has schemes for deferred payments, reduced payments, settling the payments by instalments later on and adding another family member onto the list of owners. I think there are sufficient means to address hardship problems and we should not try to subvert or circumvent the EIP policy in

order to address problems of financial hardship.

I fully agree with the fact that EIP is wonderful in promoting racial harmony. I do have an Indian resident who actually bought his flat in 1996 from a Chinese. However, when he wanted to sell his flat now, he could not do so because he was told that he could only sell it to a minority race. I would like to ask if it would be fair for a person from a minority group who bought his flat from a Chinese but is unable to sell it to a Chinese currently, as in the case of my Indian resident.

Thank you for that question. When the neighbourhood or block limit for any ethinc group is not exceeded, then there are absolutely no restrictions on the purchase in the open resale market. That was what probably happened at the time when your constituent bought his flat. However, depending on whether any particular ethnic group has now exceeded that limit, the policy will then come into play. So I think that was what had happened in this case.

The policy has to be applied uniformly and equally across all ethnic groups. The same situation could have arisen for a Malay purchasing a flat from a Chinese, or indeed for a Chinese purchasing a flat from an Indian. The point I want to make here is that the EIP is applied fairly and consistently to all ethnic groups and we do not wish to make exceptions or to circumvent it because that would bring more problems into the equation.

I would like to ask the Minister of State whether MND has done any study to see the unintended impact of EIP on certain sectors of the community,

because we understand that even though the objective and principle behind the EIP is a good one, and we support it, the realty of the market is such that the impact may not be the same on different communities.

The HDB and MND monitor the situation all the time. However, I would say that at this point in time, it is far more important to maintain the policy, perhaps even more important that ever before, to maintain the policy, and to apply the policy fairly and consistently. Yes, there may be problems at certain times, in certain estates, in certain precincts, in certain blocks, and we will have to take time for these things to be resolved. It takes time, it may take a little longer for the flat to be sold, or the person may have to be a bit more flexible in his expectation of the price that he wishes to transact at. But I want to draw attention to the fact that the more important point here is the reason behind the policy. That still stays intact.

The second point is that we must be fair and consistent. If we were to deviate from that, in order to make exceptions or for short term advantage, then we will be going down a slippery slope. Having said that, we are very aware that this sometimes causes inconvenience or problems for our residents. And, if there are ways in which we can ameliorate this, we will. Whilst we are open to suggestions, bear in mind these two principles - maintaining racial harmony and making sure that any system which we have in place is something which can be implemented fairly and consistently across the board, without making exceptions.

Sir, I would like to ask the Minister of State to consider two options. Perhaps in times of difficulty, like we are now facing an economic downturn, we have a short period of one or two years whereby we

allow more flexibility, because during the downturn period the volume of transactions is actually very low and therefore the ability to sell the flat to the right ethnic group would be more difficult. Whereas, in a buoyant economic situation, the volume is higher and therefore the transaction can be easier and a sale can be achieved.

The second option is that if a HDB flat seller cannot find a buyer over a certain period, would HDB be prepared to take back some of the units and resell them at a later period when the market is buoyant?

Thank you for those two suggestions. I do not want to dismiss anything out of hand at this point in time. But right now, the first suggestion, which basically calls for a suspension of the policy at this point in time, is one which I would not favour, primarily because we are all aware that the resale market is still active. In fact, prices are moving up in the composite retail index for HDB flats. The other important point to note is that if we look at transaction volumes by ethnic groups, these are still consistent with national proportions. So it is not as if the market has suddenly dried up for any single ethnic group. As long as there is sufficient liquidity and sufficient volume of transactions in the market, I would be very, very reluctant to suggest that we suspend the policy at this point in time.

The other suggestion about taking back the flat, yes, it is appealing in the short term. It does not solve the long term problem, which is again that we want to maintain an adequate and good mixture of the ethnic groups within our housing estates. Sooner or later, a transaction has to be made.

Coming back to my earlier point, if any of the Member's residents really have financial problems, please use all the other

avenues which are available to help them. This policy is not meant to disadvantage our residents. While we have access to other avenues, all of you as MPs and Advisors, please use these other avenues. Do not look for a quick and easy short-cut which circumvents the policy and opens up a whole new can of worms.

Sir, I have a resident who is a Chinese trying to sell his flat but is unable to find any buyers except Indians, and nobody has come forward to buy. Considering the fact that the EIP is posing a serious financial problem to some families, and the alternatives that are being offered by HDB involve extra expense for them because they have to pay, if it is a deferred payment, they end up actually paying interest for a longer period of time. So it is actually a loss-loss position for the owners of these flats.

So I think we have to find a solution whereby we have to be flexible with this percentage that we have put up and see whether we can accommodate a differential of perhaps 2-3% so that at certain times, like these difficult times, when residents have problems trying to sell off their flats, we can be more accommodating and flexible because many of them are actually trying to downgrade as they are unable to cope with the financial burden that they are facing. So I hope the Ministry can look into some ways of ameliorating the situation because many residents are indeed having problems in not being able to sell their flats.

Mr Speaker, I thank the Member for bringing up this example, because very often people cite the converse. The point which I wish to make is that this is a policy which affects all races. Sometimes you win, sometimes you lose, sometimes it is easier for you, sometimes it is more difficult. So, it proves the point that this applies equally.

With respect to his secondary point about flexibility, whilst I do not want to reveal the exact numbers, I will tell him, however, that there is flexibility in terms of the actual cut-off before the limits kick into place, and these cut-offs do allow for some variation from the national ethnic proportions. So, to the maximum extent possible, we have taken his suggestion. But, again I must appeal to everyone here that this is a policy which we have taken in order to achieve a higher objective, which is to ensure an adequate and good ethnic mix in our estates. Yes, it causes problems. If we can ameliorate those problems, we will do so. If we can get the understanding of all concerned, I think we can move this forward.

6. Dr Teo Ho Pin asked the Minister for National Development (a) how many Housing and Development Board contracts for new flats and Main Upgrading Programmes are in progress; (b) what are the measures taken to ensure that the main contractors are able to complete these projects on time; and (c) what is the contingency plan to minimise inconvenience caused to residents due to the failure of main contractors.

As at 31st October 2003, there are 24 building projects with 15,000 new flats under construction, and 29 Main Upgrading Programme (MUP) precincts with 30,000 flats where upgrading works are in progress.

The HDB monitors the progress of its building and upgrading projects very closely to ensure that they are running

smoothly. Special attention is given to those projects which show any sign of delay. The HDB will monitor the progress of these projects on a daily basis to track things like the number of workers, the amount of materials brought on site and the progress of work done. It will also provide all necessary assistance to the contractors to enable them to expedite their work.

Nevertheless, there may be contractors who are unable to keep within the project schedules despite HDB's assistance. For such cases, the HDB will terminate the employment of the defaulting contractor and proceed to engage a new contractor by fast-tracking the tender procedures, in order to complete the outstanding works expeditiously.

To assist affected flat buyers, the HDB will write to them to inform them of the change in the estimated completion date of their flats, so that they can adjust their housing plans accordingly. Those who are in urgent need of accommodation can request to rent a flat from HDB in the interim or to transfer their flat booking to another completed new flat in the same neighbourhood or indeed anywhere else in Singapore.

In cases where the contractor stops work for MUP projects, the HDB will immediately activate a contingency contractor to perform the essential services, housekeeping works and to complete the outstanding works within the flats. This will minimise inconvenience to the residents. The HDB will also brief the MPs and grassroots leaders on the status of the project and on the actions to be taken to minimise inconvenience to the residents. The residents would also be kept informed of the status through circulars.

Where necessary, HDB will also conduct house-to-house visits to the

affected households to explain and give assurance and assistance to these residents.

7. Dr Teo Ho Pin asked the Minister for National Development (a) what is the construction cost per car park lot for a Housing and Development Board multi-storey car park without a basement as compared to one with a basement; (b) why is there a need to build basement HDB car parks despite its high cost of construction and maintenance; and (c) whether HDB will review its policy on basement car park construction so as to cut waste and save costs.

Mr Speaker, Sir, the average construction cost per lot of a normal HDB multi-storey car park (MSCP), without a basement, is about $11,000. The construction cost per lot of a multi-storey car park, with basement, is higher, and can be higher by between 20-150%. This, of course, depends on the site conditions and whether the basement car park is naturally ventilated or fully enclosed.

The HDB prefers to build normal multi-storey car parks rather than those with a basement. This is because the normal multi-storey car parks are more cost effective, easier to maintain and provide better security.

The HDB will build multi-storey car parks with basements only where there are site constraints and where it needs to optimise land use, for instance, in certain high-density public housing and open green space. Thus, the higher cost of multi-storey car parks with basements is offset, in these cases, by the savings in land cost.

In cases where HDB has to build multi-storey car parks with basements, its first option will be to build naturally ventilated basement car parks, as these are obviously more cost effective than fully enclosed car parks. HDB will consider constructing a fully enclosed basement car park, which will require full-scale mechanical ventilation, only if it has no other choice.

Sir, may I ask the Minister of State why there is really a need to build basement car parks, especially for HDB estates which are normally not on prime land because we can maximise land use by building multi-storey car parks. A lot of the soil condition in Singapore is marine clay and it is very expensive to build basement car parks, especially during temporary work construction and maintenance. The cost can be easily 2-3 times more than the normal multi-storey car parks without basement. By avoiding basement car parks we can actually save millions of dollars in the construction of car parks.

Mr Speaker, Sir, I agree with the hon. Member that, wherever possible, we should not build basement car parks. We would only do so in exceptional circumstances because of site constraints. All the Member's other points about the fact that it is cheaper not to build a basement, it is also cheaper not to have to maintain a basement car park, are valid and he can rest assured that we will consider all these factors before we give approval for a multi-storey car park to be built with a basement.

8. Mr Chiam See Tong asked the Minister for Foreign Affairs what has Singapore done, other than quiet diplomacy, to effect the early release of

the Myanmar opposition leader Aung San Suu Kyi from house arrest.

Mr Speaker, Sir, there are no realistic options other than diplomacy, quiet or otherwise. The reality is that, like it or not, the understanding and cooperation of the Myanmar authorities is essential for change in Myanmar. Public condemnation is likely to be counter-productive and, given the limited integration of Myanmar into the world economy, the effect of sanctions will be only limited. They will only push Myanmar into further isolation.

Singapore has made it clear that we do not believe that the current situation in Myanmar serves Myanmar's interests or the interests of the region as a whole. We have, when we judged it appropriate, made our views known publicly. For example, on 1st October 2003, we told the press clearly that all restrictions on Daw Aung San Suu Kyi should be lifted so as to allow the national reconciliation process to proceed. We are also party to the ASEAN Foreign Ministers' Statement of June 2003. We have also spoken to the Myanmar authorities in private on many occasions. Most recently, Prime Minister Goh Chok Tong met Prime Minister Khin Nyunt on 6th October 2003. While it would not be useful to reveal the details of such private exchanges, let me say that we have made known our concerns.

The Myanmar authorities understand that Singapore has no ulterior motives and that we act in good faith. But, in the final analysis, they have to make their own decisions based on their own assessments of what is in their country's interests. The situation in Myanmar is very complicated. Other countries may have their own views and their own way of approaching the issue. They may also have their own

motives. Singapore must be guided by our own national interests. Singapore will continue to do whatever we can in our own way.

9. Ms Irene Ng Phek Hoong asked the Deputy Prime Minister and Minister for Finance in view of the rising number of bankruptcies, whether (a) there are adequate checks on credit card companies, especially those which have expanded their customer base to families with lower incomes; and (b) there is a need for the consumer credit laws to be reviewed to make sure that borrowers are given clear information on the penalties for late payments on loans and on how interest is charged.

Mr Speaker, Sir, over the past two years, the economic downturn has led to an increase in the number of bankruptcies and a rise in unemployment. In this more difficult economic environment, the number of people defaulting on loans and credit card debt will naturally increase, especially when those who are highly leveraged lose their jobs and, consequently, are unable to service their loans. MAS is keeping a close watch on the growing default rates and the rise in consumer credit card debt.

Ms Ng has asked whether there are adequate checks on credit card companies here and suggests that credit card issuers may be extending credit too easily to those in the lower-income group. Banks and other credit card issuers are supervised by the Monetary Authority of Singapore (MAS), and are expected to behave prudently when extending credit. Currently, MAS permits credit card companies to offer credit cards and unsecured credit facilities only to individuals with a minimum annual income

of $30,000. This is to prevent lower-income individuals from borrowing from financial institutions for consumption, as such individuals are more likely to find themselves unable to service their debts. This policy has served us well thus far, and MAS has no intention of easing our restrictions on credit cards.

Ms Ng has also asked whether consumer credit laws need to be reviewed to ensure consumers have clear information on penalties for late payments on loans and on how interest is charged. MAS' guidelines currently require credit card companies to disclose late payment and finance charges prominently on all monthly statements. The Association of Banks in Singapore (ABS) has also worked on a number of initiatives to improve standards of disclosure. All banks now provide an information leaflet together with the credit card application, highlighting in plain language significant terms and conditions, as well as fees and charges relating to the use of a credit card. ABS is also working to improve its existing Code of Consumer Banking Practice to enhance industry standards in the area of credit cards, and other forms of consumer credit such as housing loans and car loans.

Introducing new regulations for credit is unlikely to solve the problem of rising bankruptcies in Singapore. The long-term solution to a rising incidence of loan defaults and bankruptcies is for Singaporeans to learn how to better manage their finances, including ensuring that they understand all the salient terms and conditions of obtaining credit. To this end, MAS recently launched a national financial education programme, MoneySENSE, to help Singaporeans acquire the skills and knowledge to better manage their finances. Under the programme, Government agencies, industry associations and consumer bodies will work closely together to ensure that consumers get adequate

information on areas such as budgeting, saving and using credit responsibly. MAS will also work with the Association of Banks and the Consumer Association of Singapore (CASE) to educate consumers on the consequences of late payment on credit cards, and how penalties and late interest charges are computed. Ultimately, consumers must be responsible for their own spending, and not live beyond their means. With the MoneySENSE programme, we hope that consumers will avoid imprudent use of credit, manage their finances proactively and become self-reliant.

Sir, the outstanding balance of a credit card attracts a yearly interest rate of 24% and can go up to 36% with the addition of late fees and finance charges. Can the Deputy Prime Minister explain how these charges can be justified?

Mr Speaker, Sir, it is not for me to explain how these charges can be justified. This is a free market. There are many credit card companies. Our responsibility is to make sure that their charges are prominently displayed, and if people want to borrow at these rates, I do not think we should stop them completely. What we have done is to impose restrictions on who can borrow and how much they can borrow. So, we have set a minimum annual income of $30,000 and when you borrow, the maximum amount you can borrow is twice your monthly income per card. Unfortunately, we have not yet found a way to stop people from having multiple cards. I know there are some people who have half a dozen cards and they go for two months each, and that is why they run into trouble. We are studying this matter but I do not think it is easy to solve.

Sir, could I inform the DPM that there is an anomaly? Under the Moneylenders Act, there is a cap of 18%

on the interest that can be charged by moneylenders because, primarily, it is meant to protect the low-end borrowers. But here we have a case of banks extending credit facilities via credit cards to low-end families also, and yet we do not put a cap on the interest rate that these banks charge. Is it not time that MAS relooked at either lifting the cap under the Moneylenders Act so that they can charge any interest they wish to charge or that we bring down the rate that the banks charge to their customers?

Sir, Mr Ravindran has raised an interesting point. Actually, while the moneylenders are lending to low-end customers, the credit card companies are not lending to low-end customers. We have made our rules such that the credit card companies can only lend to people who have a certain reasonable income. We have set it at $30,000 a year. So, that is not a very low-end customer and I think somebody with that income ought to be allowed to make some of his own decisions.

Sir, although the criterion may be $30,000 a year and, as we know, it could fluctuate year to year, and it can go down below $30,000 after that person has got his credit card. Sometimes we see residents coming to us with five credit cards and they are unemployed or they had a huge pay cut and they have huge problems paying the loans. Can I ask the Deputy Prime Minister whether something should be done to clamp down on credit card issuers from being so liberal in giving out cards and, at the same time, to exercise flexibility to those who are caught in this trap and need help to restructure their loans rather than to rush to bankrupt them?

Mr Speaker, Sir, I think we have a ticklish problem, but we

do have to make up our minds whether we want to solve people's problems by lending them more or by lending them less. And if you want to lend them less, then certain stringent rules have to apply. If you want to lend them more, then you must be prepared to accept the possibility that at some point, they will look for the MP after having dug themselves deeper into a hole.

10. Miss Penny Low asked the Deputy Prime Minister and Minister for Finance with respect to the mandatory seven-day cooling-off period for the purchase of unit trust by consumers, (a) whether the consumer will be saddled with the risk of a fall in market price of the unit trust during that seven-day cooling-off period; (b) why is there a difference in the cooling period between 'pure' unit trust and investment-linked unit trust issued by insurers, when the underlying mechanisms and assets for some are similar; (c) whether there is any penalty imposed on a seller who breaches the full disclosure requirements at the point of sale and any specific remedy available to the aggrieved consumer; and (d) in the case of breach of the full disclosure requirements, whether the Government will extend the scheme to allow for full refund so that the consumer will not be at risk of a fall in market price of the unit trust during the cooling-off period.

Mr Speaker, the Monetary Authority of Singapore (MAS) introduced the cancellation period for unit trusts in July this year. This affords consumers an opportunity to reconsider a hasty investment decision made under the influence of pressure selling tactics of sales advisers. Consumers who exercise their right to cancel will get a full refund of the original sum invested, including the initial sales charges, but subject to any

market loss. The cancellation requirements for unit trusts seek to strike a balance of responsibility among fund managers, distributors and consumers. Fund managers and distributors will have the incentive to ensure that their sales and advisory processes are fair and proper, and that the product features are properly explained to minimise the possibility of consumers changing their minds subsequently. For consumers, having to bear the risk of adverse market movements, in turn encourages them to exercise care and discipline in selecting unit trusts and deters them from frivolously exercising their right to cancel.

The 14-day free-look period for life insurance was implemented in the early 1990s. This longer free-look period is justified for life policies, because these policies can have high early termination penalties. The 14 days will allow consumers sufficient time to understand fully the terms and conditions of the policy. For such policies, consumers will, in general, also not be subject to market risk during these 14 days. However, I agree with Ms Penny Low that investment-linked insurance policies are very similar to unit trusts, apart from the element of death benefit. There may therefore be a case to harmonise the cooling-off or cancellation period requirements for these two types of products. MAS will study this further.

Miss Penny Low has asked whether any penalty is imposed on a seller who breaches the full disclosure requirements at the point of sale, whether any specific remedy is available to the aggrieved consumer; and whether in the case of a breach of the full disclosure requirements, the Government will extend the scheme to allow for full refund, so that the consumer will not be at risk of a fall in market price of the unit trust during the cancellation period. Under the Financial Advisers Act (FAA), when recommending a unit trust, financial institutions are

required to disclose and explain to the consumers certain information about the unit trust. This includes the nature and objective of the fund, details of the fund provider, the consumers' contractual rights, the risks and benefits of the fund, fees and charges to be borne by the consumers, and the cancellation rights of the consumers. Financial institutions are also prohibited from making false and misleading statements or omitting to disclose any material matter about an investment product. A breach of these requirements, including failure to make full disclosure, is an offence under the FAA, which would cause MAS to take appropriate action against the offender.

MAS does not, however, have the power to direct financial institutions to pay compensation to aggrieved consumers. Aggrieved consumers should approach the financial institutions or industry-based dispute resolution mechanisms to resolve their disputes. MAS expects financial institutions to institute a structured internal dispute resolution process, and has encouraged the industry to set up industry-based dispute resolution mechanisms. Consumers may seek legal redress through the courts.

There is no need for MAS to extend the scheme to allow for refund of the original investment sum to consumers. The courts and the industry-based dispute resolution schemes would be well-placed to assess whether the losses suffered by consumers are the result of the non-disclosure and, if so, to direct the financial institution to make good the losses suffered by the consumers.

Sir, will the Deputy Prime Minister give an indication whether the harmonisation would be in favour of 14 days or 7 days?

Mr Speaker, Sir, I have not studied this in detail but, off

hand, I would say we are more likely to harmonise on the unit trust rule because, in fact, investment-linked insurance products are almost entirely investment and only a very small part for insurance.

Sir, given that there have been quite a lot of disputes and unhappiness over the sale of unit trusts and the high pressure sales tactics, would it not be more prudent to harmonise in favour of 14 days?

Mr Speaker, Sir, I think we have to have a set of rules which are fair and which encourage responsibility. When you enter into a contract, it is a serious matter. You have signed. You are an adult. It has been explained to you. There is a procedure. There may even have been a fact-find to ascertain your ability to bear risks and your financial needs. Then you sign on the dotted line. Under normal law, that is settled and you are bound. But because we recognise that consumers sometimes are pressured by high pressure sales tactics and may not fully know what they are doing and may conceivably regret what has happened, we have provided a 7-day cooling off period. But if you have an after-thought, you should have your after-thought quite soon. You cannot look at the way the market moves. When the market moves down, you say, "Oh, dear". Then it is not an after-thought but it looks like you made a bad bet,

and you want to cancel your bet after seeing the cards. I think that is very difficult. So I would not be in favour of having a long free-look period. If you have a long free-look period nobody will want to sell you unit trusts, because I am getting you a free option - market goes up, you are happy; market goes down, you return the deal to me. I think that is a very difficult business to do.

I have recently paid a visit to a personal financial planner just to check out what are the current practices in the market. What I found to my dismay was that even the sellers themselves who sat at the bank counter did not quite know what they were selling. So, in many cases, the ordinary consumers who walk into a bank and are introduced to various types of unit trusts may not know what are the relevant questions to ask. They are given a prospectus and that is, in many cases, considered a full disclosure which may not be adequate. In recent years, many of these products have also become very complicated and difficult to understand. Is the Ministry making some checks on the unit trust sellers as well as requiring a certain basic level of education for financial planners that is over and above what is required today under the FAA?

I would say, firstly, if the Member will tell me in confidence who this financial planner is, I will look into the matter immediately. Secondly, the solution really is financial education for the public. So if they understand what they are doing and they know what they do not know, that is the purpose of the MoneySense programme. We are not trying to make everybody an expert or a financial wizard but at least be aware of what major financial categories we are talking about. Is it an investment, is it a deposit, are you going for an up and down ride, or is it a risk-free investment? So, at least, you must have some basic understanding of what is involved. Thirdly, of course, the most important thing which you must learn when you get your financial education is if you do not understand it, do not put your money in it.

I read last week in the newspapers that somebody received a notice from the Diamond Bank of Nigeria and invested $300,000. I am not sure who his MP is. I feel a bit sorry for him, but perhaps

others will learn from his experience and will be more cautious.

11. Mdm Ho Geok Choo asked the Deputy Prime Minister and Minister for Finance (a) how can his Ministry assure the SMEs and small players that the formation of the Wealth Management Institute (WMI) with Government's money and resources is not an unfair competition over the private and professional parties; and (b) what plans are there to assist the SMEs with such schemes through some sort of funding.

Sir, the purpose of the Wealth Management Institute (WMI) is to expand and develop Singapore's pool of expertise to meet the needs of a growing wealth management industry. It is a concerted effort to bring together existing academic institutions, wealth management institutions and industry associations in a private and public sector collaboration to provide training and development of wealth management professionals.

The WMI is the first of its kind in Asia. It will work with, rather than compete against, professional and private training service providers. The WMI's academic and industry partners are involved in the curriculum-planning, programme development and provision of on-the-ground training to WMI students. Its flagship programme, the Master of Science in Wealth Management, will be conducted by the Singapore Management University in collaboration with the Swiss Banking School. The WMI is prepared to work with relevant SMEs as its training service partners.

As for whether the Government has plans to assist SMEs who can offer suitable training through some sort of funding, SPRING Singapore already has various assistance programmes such as the Local Enterprise Financing Scheme (LEFS) and the Local Enterprise Technical Assistance Scheme (LETAS) which can help SMEs strengthen their capability as training service providers.

Sir, it was reported in the newspapers that it was very difficult for the WMI to justify on a commercial basis initially. I would like to check with the Minister on what basis was it very difficult for the WMI to justify on a commercial basis initially such that the Government has to pump in millions of dollars into this project.

Mr Speaker, Sir, for many of these basic infrastructures for training and development, sometimes you need to kickstart the programme, and the Government finds it very important to be the catalyst, so as to get the industry, the private sector and the other collaborators together. So I think this is the whole idea of the WMI putting together a group of people and kickstarting the programme. And we are confident that as time goes on and as the critical mass of the wealth management professionals develops, the process will be commercially viable.

12. Mr Arthur Fong asked the Minister for Trade and Industry (a) how many small and medium size enterprises (SMEs) had applied for funding assistance in the years 2001, 2002 and 2003 to date; (b) how many of those which applied were approved and what were the total amounts approved for each of the years from 2001 to 2003 (to date); (c) how much of the approved amounts were disbursed for each of the years from 2001 to 2003 (to date); and (d) for those cases

that were approved, how long did it take for the funds to be disbursed.

Mr Speaker, Sir, there are three main financing schemes for SMEs offered by SPRING Singapore. They are the Local Enterprise Finance Scheme (LEFS), the Micro Loan Programme (MLP), and the Loan Insurance Scheme (LIS). These are loan schemes that help SMEs obtain loans from bank and financial institutions.

For FY 2001, there were 2,200 applications for these schemes, of which 2,000 were approved. The amount approved was $420 million. For FY 2002, there were nearly 4,800 applications for the schemes, of which 4,000 were approved. The amount approved was $590 million. For FY 2003 to-date, there have been about 2,200 applications, of which 1,900 were approved. The amount approved is $330 million.

For these financing schemes, the credit assessments and loan disbursements are done by the Participating Financial Institutions (PFIs). The PFIs will disburse the loans to the SME once the loan is approved. Disbursement can take place as quickly as one day after the loan is approved, although this depends on the nature of the loan. The time taken is no different from that of a normal commercial loan.

13. Mdm Halimah Yacob asked the Minister for Trade and Industry (a) what are the implications of Singapore's poor ranking in the World Knowledge

Competitiveness Index; and (b) whether the ranking will affect Singapore's efforts to move up the value chain in the manufacturing and services sectors.

Mr Speaker, Sir, in the World Knowledge Competitiveness Index 2003, Singapore was ranked 90th out of 125 regions compared to 65th out of 90 regions last year. Our low ranking is due to two main reasons. First, our rating has been dragged down by cyclical factors, such as higher unemployment and low productivity due to the current economic slowdown. Second, two-thirds of the 35 new entrants in this year's Index are regions from developed countries such as Japan, Canada and Sweden, which typically have more established knowledge capabilities. Although Singapore's absolute rank has fallen from 65th to 90th, our relative rank has remained unchanged at the 72nd percentile.

Nevertheless, the Index highlights the fact that competition occurs between regions rather than countries, and suggests that Singapore's infant R&D scene still has some way to grow before it can match the concentration of resources and talents in some of the mature centres. Our private sector expenditure on R&D and patent creation are lower when compared to the most competitive regions in the world.

The ranking in the World Knowledge Competitiveness Index does not affect our efforts to move up the value chain in the manufacturing and services sectors. We are already doing many of the things that are necessary for Singapore to move up the value chain, which the Economic Review Committee had recommended. I will elaborate on our efforts to strengthen our knowledge capabilities in the two weak areas highlighted by the World Knowledge Competitiveness Index, namely, education and R&D.

We place great emphasis on education and have been reforming our education system to equip our young with the relevant skills for a knowledge-based economy. For instance, schools are now offering a greater diversity of education programmes that will give their students a strong multi-disciplinary foundation. To encourage life-long learning across all levels of society, we have set up the Workforce Development Agency to champion continuing education and training.

We continue to scale up our R&D efforts and implement initiatives to improve the effectiveness of R&D and translate more scientific discoveries into commercial results. With the launching of Biopolis, the world's first integrated, purpose-built biomedical research complex, biomedical scientific talent and research will have a new focal point in Singapore. The Research Institutes are launching programmes and collaborative projects, with local universities as well as renowned international centres, to take advantage of pooled expertise and resources. For instance, the Institute of Microelectronics (IME) is collaborating with the Tokyo Institute of Technology, NUS and the Institute of High Performance Computing (IHPC) as part of the Nanoscience Initiative to develop the latest generation flash memory devices. Under the recently launched Growing Enterprises Technology Upgrading (GET-Up) programme, our Research Institutes are helping local companies upgrade their technological capabilities through seconding staff as technical advisors and joint development projects.

With these efforts, we hope to improve our knowledge capabilities and close our gap with the more developed regions. This will however be a long-term undertaking.

Sir, first, I would like to thank the Minister of State for his very comprehensive reply. According to the report, one of the reasons why our ranking has gone down is that Government's spending on R&D has gone down, not only private sector investment in R&D. Would the Minister of State please give an explanation on that as well?

Mr Speaker, Sir, I would give some figures so that we have a sense of our spending on R&D. Our gross expenditure on R&D as a percentage of GDP has actually gone up. In 1995, it was 1.15%. In 2002, it was 2.19%. What has actually dragged down our position in the Index, if you look at the breakdown, has really to do with our per capita public expenditure on primary and secondary school education. But this by itself is not a robust indication of the quality of our education. Despite our lower levels of education expenditure compared to some of the more developed countries, as Members all know, our secondary school students are consistently ranked among the best world-wide for Mathematics and Science achievements. Our education system is also well known for developing more fully the potential of students from less resources committed.

14. Mdm Ho Geok Choo asked the Minister for Trade and Industry (a) with the launch of Singapore's Business and Financial Centre (BFC) already postponed twice and with weak investment sentiments in the BFC, what steps will the Government be taking to make BFC a reality; (b) what is his Ministry's reaction to the recent A T Kearny's FDI Survey, where the Confidence Index for Singapore was off the range of major global investors; and (c) what are the plans or

steps being taken to improve this Confidence Index.

The BFC is an important project in the new Downtown that will provide financial institutions and companies with comprehensive integrated facilities. It complements our efforts to attract more of such businesses to invest and grow down here in Singapore.

The Government earlier decided to defer the release of the BFC site due to the acute economic uncertainties induced by the September 11 incident, the Iraq war and the outbreak of SARS.

MND has refined the configuration and phasing plan for the site after consulting both local and overseas developers. In view of the scale of the BFC development, the Government will be structuring the terms of sale of the site to provide the developer with the flexibility to phase the development according to market demand. There have been signs of growing interest from investors in the BFC project. The Government plans to release the BFC site in the first half of 2004, barring any unexpected adverse shocks to the economy.

The A.T. Kearney FDI Confidence Index Survey, which the Member referred to in her question, is based on an annual survey of CEOs, CFOs and other top executives of Global 1000 companies, conducted by A.T. Kearney, which is a consulting firm. This survey measures their feedback on the likelihood of direct investment in a market in the next one- to three- year period.

Singapore's ranking on the index fell below the top 25 in 2003, compared to our 22nd position achieved last year and

13th position achieved in 2001. According to A.T. Kearney, the SARS outbreak and weak economic growth contributed to Singapore's poor showing.

I want to move on to discuss our steps to improve FDI confidence, not so much on the survey itself but on the concrete steps which we are taking to improve and make ourselves more attractive to foreign investors. Firstly, we have to strengthen our competitiveness

and improve our value proposition to investors. We need to keep our costs competitive. Besides ensuring, for instance, that our land prices are not out of line with international norms, we have also liberalised the energy market, which has resulted in lower electricity prices for large users. We are also progressively lowering our income tax. And as manpower cost is the largest single cost component for most businesses, we have also made some changes to our CPF system recently, including reducing employer CPF contribution rates.

Secondly, besides managing cost competitiveness, we need to improve our capabilities. We will continue to invest heavily in education, as well as to step up workers' training and skills upgrading. In addition, we are also raising our science and technology capability through R&D and the development of scientific talent. We are also helping to build strong clusters of supporting industries and supply chain networks, which will provide added draw for investments.

Thirdly, to overcome the constraints of our small domestic market, we are enhancing our economic linkages with other countries through our network of Free Trade Agreements (FTAs). Our FTAs with the US, Japan, Australia, New Zealand, ASEAN and the European Free Trade Association (EFTA) will enable companies located here to enjoy tariff-free access to a much larger international

market of $16 trillion and 1 billion people. We are also working towards a bilateral FTA with India, while an ASEAN-China FTA is being negotiated. These will give us preferred access to two of the world's fastest growing markets. Together with the ASEAN Leaders' recent declaration to build an ASEAN Economic Community, these will improve the attractiveness of ASEAN and of Singapore, in particular, as an investment destination.

Mr Speaker, Sir, we are confident that we will continue to remain a viable and attractive investment destination. Our recent successes in landing major new investments from companies, such as Hewlett-Packard and Panasonic, are a testimony to our continued attractiveness for high value-added activities. Hewlett-Packard recently moved its networking hardware R&D division from California to Singapore. It will invest $55 million over three years in a new facility which will make Singapore the sole global hardware development and manufacturing centre for its ProCurve line of networking products. Panasonic will be upgrading its existing DVD manufacturing and R&D operations in Singapore with $160 million worth of new investments over the next three years. The EDB expects to attract $7.5 billion worth of manufacturing fixed asset investment commitments and $1.9 billion of services total business spending commitments for 2003 alone. We will, nonetheless, address our weaknesses while building on our strengths in order to continue attracting a steady stream of investments to Singapore.

I would like to thank the Minister for a very comprehensive reply. I would just like to comment here that Singapore's data on trade shares was also not impressive.

Mdm Ho, do not make any comment, just ask the question.

Yes. Our own merchandise export has actually risen only by a mere 0.3% to 1.7%, while our exportable services have only increased by 0.1% to 1.8%. During the same period, 1992 to 2002, other service exporters in Asia, such as China, India and South Korea, have almost doubled their respective share of world services exports. Can the Minister kindly comment on this?

Mr Speaker, Sir, these are figures which are cause for concern. But they are not in themselves surprising. We know that our economy has gone through a tough patch over the last couple of years. I want Members instead to focus on what we can do and what we should do in order to improve and get ourselves out of this current trough. I want to urge Singaporeans and Members of Parliament not to indulge in, what I would term, as irrational despondency. We know we have problems. We are aware of our problems. We know the solutions. Some of these solutions are painful. We need to get on with it, do whatever is necessary and then we need time for these measures to bear fruit, and at that appropriate time, we will have proof of the pudding. It is no point now looking backwards and say, "Wah, we haven't done well. We should have done this. We should have done that." Let us focus on what we need to do, get on with it, do it and move on. That is something I would urge all Singaporeans and all Members of Parliament to focus our minds, our energies and our efforts on.

15. Mr Ahmad Khalis Bin Abdul Ghani asked the Minister for Transport with regard to the open skies agreement between Singapore and Australia (a) how will the Singapore economy benefit from it; (b) what is the chance that it will result

in a net loss to Singapore if for instance SIA is unable to take advantage of the Australian airspace rights as much as Qantas can over Singapore's; and (c) how will it help to create more jobs for Singaporeans.

Mr Speaker, Sir, air services play an important role in Singapore's economy by supporting the flow of trade, investment and tourism. Indeed, our superior connectivity is a very strong plus point for foreign investors, be they manufacturers who need to air freight their products world-wide, or service providers who base their HQ, or core management team, in Singapore to serve the region.

On its own, air services bring in business and leisure travellers. They contribute directly to our economy, through their dining, shopping and hotel expenditure. This creates jobs not only in Changi airport, but also in restaurants, the retail sector and hotels, amongst others. Expansion in air services has a significant multiplier effect on our economy. Conversely, the reduction of air services will lead to severe contractions for our economy, as we had recently experienced during the SARS outbreak.

To maximise the benefits that air services bring to Singapore, we have thus built a wide network of air services at Changi over the years. Today, Changi serves 63 airlines and almost 30 million travellers annually. We are connected to 137 airports throughout the world. This connectivity is self-reinforcing; airports with excellent connectivity are better able to attract airlines due to the network effect. Going forward, we need to continue our efforts to strengthen Changi's wide network of air services.

Going on to the recent air services agreement which we concluded with Australia, Singapore enjoys a good and strong bilateral relationship with Australia. Besides strong economic ties, both countries also share a common liberal view towards air transport policy. Accordingly, both sides have sought to liberalise our air services agreement over the years to ensure that it not only keeps pace with the growth in air traffic, but also provides room for our carriers to plan their growth and expansion. As a result, the aviation industries in Singapore and Australia have flourished and our respective airlines have grown into amongst the best in the world. SIA is a world-class airline and our major partner at Changi. Qantas is also a successful world-class airline and another highly valued partner at Changi. Indeed, Qantas is the largest foreign airline in Changi, in terms of passenger throughput.

While we have not managed to conclude an open skies agreement with Australia this time, we have managed to obtain a significantly liberalised agreement with Australia. Amongst others, we have lifted all existing restrictions on flights between Singapore and Australia. This agreement thus shows the respective governments' commitment to pave the way for the airlines to continue expanding their operations, and to do so with greater flexibility and certainty.

In turn, we hope that the airlines in Singapore and Australia will make use of the new agreement to increase their services between our two countries. We will continue to work closely with all the carriers to facilitate the expansion of their operations in Singapore. The question of which airline would use more of the rights is irrelevant because Singapore benefits from Changi's improved connectivity, regardless of whether the new services are operated by SIA, Qantas, Australian Airlines or any other new carriers. We should not limit the expansion of the

Australian carriers at Changi just because SIA is not able to increase their operations to Australia. Hence, our approach in our Air Services Agreement negotiations is not to be bound by what is ideal for one carrier, but to aim to secure the best deal for Changi. This will, in turn, benefit Singapore's economy and create more jobs. The ultimate beneficiaries are, therefore, Singapore and Singaporeans.

16. Mdm Halimah Yacob asked the Minister for Information, Communications and the Arts in view of Microsoft's recent decision to close its chatrooms worldwide, (a) what measures are in place to prevent internet chatrooms from becoming a haven for sex predators; and (b) whether these measures are adequate given a number of reported cases in Singapore of men using the internet to prey on young girls.

Mr Speaker, Sir, the hon. Member has expressed concern over the possible use of Internet chatrooms by sex predators to prey on the young and questioned whether the safeguards we have in place today are effective.

Sir, the nature of the Internet makes it impossible to insulate users entirely from its contents. Experiences in other countries have shown that regulatory controls by themselves are not effective in preventing the inflow of undesirable content through the Internet. Hence, we have adopted a pragmatic three-pronged approach to safeguard our young from the undesirable content and activities on the Internet, in particular, chatrooms. This involves legal enforcement, industry regulation and public education.

There have been several high-profile cases of men using the Internet to prey on young girls. The Police take a very

serious view of such crimes and, where offences have been committed, they will investigate thoroughly and Police will prosecute the apprehended offenders. While the Police have been successful in this aspect, we recognise that enforcement action only serves as a strong deterrent.

Therefore, we established the National Internet Advisory Council in 1996 to work with the industry to reduce the potential for Internet abuse. Our Internet Service Providers have voluntarily provided their subscribers the option of using Family Access Networks to filter out undesirable sites. Under the Media Development Authority's (MDA) Internet Code of Practice, content providers are required to abide by guidelines on discussion themes when they host the chat facilities. The industry has also taken steps that include moderating popular chatrooms, requiring user registration, taking disciplinary action against abusers, and collaborating with the Police in furnishing information on sex offenders. We see Microsoft's recent closure of unmoderated chatrooms as a positive move. We hope to see more of such industry initiatives and the MDA is prepared to support and work with any industry player to facilitate this.

However, these precautionary measures, while effective, can only work well for a fraction of the chatrooms available on the Internet. The vast majority of chatrooms accessible to Singaporeans are based overseas and beyond our regulation. We cannot prevent the naive and curious from accessing what they wish within their own confines. Therefore the public, in particular, parents must take their own preventive actions to protect their children. Simple skills governing online behaviour, such as not giving out personal details and not meeting strangers acquainted through chatrooms, are all

basic common sense precautions that will go a long way in curtailing the problem. Like many other everyday habits, these must be taught and inculcated by parents and teachers in our schools.

Hence, the Media Development Authority has supported measures to educate the public on online safety. It has made available an Internet Public Education Fund to support projects that raise awareness on the precautions for safe access of the Internet, especially by the young. The fund has supported the work of volunteer organisations, such as the Parents' Advisory Group for the Internet (PAGi) which promotes online safety awareness to parents. Since 1999, the Parents' Advisory Group for the Internet has reached out to more than 62,000 people directly through its outreach activities, including campaigns on MTV and Nickelodeon to educate young viewers on chatroom safety.

3.00 pm

Order. End of Question time.

[Pursuant to Standing Order No. 21(3), Written Answers to Question Nos. 16, 20 and 29 on the Order Paper are reproduced in the Appendix*. Question Nos. 17 to 19, 21 to 28 and 30 have been postponed to the sitting of Parliament on 11th November 2003.]

*Cols. 3399-404

"to amend the High Court (Admiralty Jurisdiction) Act (Chapter 123 of the 2001 Revised Edition)",

presented by the Minister for Law (Prof. S Jayakumar); read the First time; to be read a

Second time on the next available sitting of Parliament, and to be printed.

"to amend the Human Organ Transplant Act (Chapter 131A of the 1988 Revised Edition)",

presented by the Acting Minister for Health (Mr Khaw Boon Wan); 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".

As part of an on-going effort to bring the regulatory framework for the insurance sector to international best practice standards, this Bill amends the Insurance Act to establish a risk-based capital framework for life and general insurance companies, and a regulatory framework to deal with accident and health insurance business. The Monetary Authority of Singapore (MAS) is also putting in place an authorisation framework to strengthen its supervision over the cross-border supply of reinsurance services in Singapore through this Bill.

MAS invited feedback from the industry and the public on the draft Bill in May 2003, and has posted its detailed responses to the comments received during this consultation on its website.

Mr Speaker, Sir, I will now go through the main amendments in the Bill.

Risk-based Capital Framework

The existing statutory valuation and solvency framework uses prescribed valuation methods and bases. In an insurance market that is relatively homogeneous, this approach provides a simple and conservative way to determine the capital adequacy of insurers. This "one-size-fits-all" approach is, however, not always reflective of an insurance company's true financial strength. Increasing volatility, diversity and competition in the financial services sector have resulted in the need for a more transparent and risk-focused capital framework that better reflects the true financial conditions of an insurance company. Banks operate under such a risk-based framework, which is being refined in the Basel II proposals. Insurance companies need something similar. Clause 19 amends section 18 of the Insurance Act to establish the new risk-focused capital regime for insurance companies.

The formula to calculate capital requirements that will be prescribed under the amended section 18 takes into account not only insurance risks undertaken by an insurer, but also risks arising from the way an insurer invests the premiums that it has collected. The amended section 18 will also empower MAS to further adjust capital requirements to capture risks that cannot be quantitatively determined, for example, operational risks.

MAS has also reviewed the operation of insurance funds in developing the new capital regime. Clause 18 amends section 17 to empower MAS to issue rules to clarify what constitutes receipts, income, liabilities or expenses of an insurance fund. This will help protect policyholders' interest from being compromised by unfair practices, for example, charging costs of compensation resulting from the misconduct of an insurer or its intermediaries to insurance funds.

Accident and Health Insurance Regulatory Framework

There is currently no specific provision in the Insurance Act applicable to health insurance business, although there are provisions for general insurance business that apply to health insurance. These provisions are suitable for regulating short-term, yearly-renewable health insurance products. Recognising the needs of consumers for insurance products that provide long-term health insurance coverage, and the long-term obligations that such needs impose on insurers, we are amending the legislation to help ensure that insurers are better able to meet those obligations.

Clause 55 amends the Schedule to define "accident and health benefits" and further differentiates such benefits into those that are long-term and short-term in nature. An insurance policy that contains long-term benefits is one that provides accident and health insurance coverage in excess of five years, without the risk of such coverage being unilaterally cancelled by the insurer. Clause 3 amends section 2 to reclassify policies that contain long-term accident and health benefits, such as those relating to the ElderShield scheme, as part of life insurance business. As funds relating to life insurance business are generally managed with a long-term focus, the reclassification will thus help the insurance industry to better manage premiums collected from long-term accident and health products. To provide the insurance market with more capacity to insure accident and health risks, clause 4 amends section 3 to allow both life insurer and general insurers to underwrite short-term accident and health insurance products.

When consumers purchase health insurance products, it is important to provide them with adequate and clear information disclosure so that they can make informed decisions. In addition, to

help consumers obtain appropriate insurance coverage, insurance intermediaries need to be competent and provide advice on a sound basis. To help achieve these objectives, clauses 28 and 31 amend section 35P and introduce a new section 35TA to empower MAS to specify market conduct requirements, such as those relating to disclosure and the advisory process for an insurance intermediary.

Authorisation Framework for the Cross-Border Supply of Reinsurance

Currently, reinsurance services can be provided on a cross-border basis to Singapore without the service provider establishing a physical presence here.

Clauses 9, 13 and 16 introduce new sections 8A, 12A and 14A to provide for the establishment of an authorisation framework to enhance the effectiveness of MAS' supervisory oversight over such cross-border reinsurers, and their transactions between registered insurers here in Singapore. Details of this framework, which include setting of the minimum financial and reporting requirements for cross-border reinsurers, will be set out in regulations.

Mr Speaker, Sir, health insurance is gaining prominence as a key healthcare financing tool for Singaporeans. Worldwide, in recent years, the financial strength of insurance industry and the lack of effective supervision over the reinsurance sector are coming under intense scrutiny. The amendments proposed in this Bill represent timely improvements to our current regulatory regime. To stay in step with this rapidly-changing market place, MAS will continue to review its regulatory regime so as to develop Singapore as a sound and progressive financial centre.

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".

The global financial and regulatory landscape has undergone significant changes in recent years. The management of risk has become more complex. Changing economic conditions and greater market volatility have also increased the risks faced by financial systems. To enable MAS to meet the operational challenges in this new environment and to carry out its functions more effectively, we need to update and fine-tune the MAS Act. We will do so in two phases, and this amendment Bill is the first phase.

Mr Speaker, Sir, I will now touch on key amendments proposed in the Bill.

Stability and Public Confidence

To safeguard the stability of the financial system and maintain a high level of public confidence, it is prudent to give MAS more operational flexibility to deal with contingencies. Clause 3 of the Bill seeks to update section 6 of the MAS Act

to enable MAS to set aside provisions for contingencies such as market volatilities.

Since inception, MAS has been permitted to set aside provisions for contingencies, such as those which banks usually set aside. However, recent changes in accounting standards have restricted the conditions under which provisions can be set aside. Now, provisions are only allowed where there is some certainty to the outflow and a reliable estimate can be made. This is too restrictive for MAS' purposes. The proposed revision in clause 3 seeks to allow MAS to set aside provisions to deal with contingencies beyond what the accounting standards now allow.

In addition, clause 3 seeks to give MAS the ability to draw on its retained earnings in the General Reserve Fund when making payments to the Government in any given financial year. Clauses 8 and 9 propose changes to sections 23 and 26 to allow MAS greater flexibility in lending to financial entities for the purpose of safeguarding the financial system.

International Practices

Accounting standards

Other central banks and monetary authorities, like the US Federal Reserve Board and the Bank of England, recognise that accounting standards developed for commercial entities have not been formulated for entities with the unique powers and responsibilities of central banks. The example on providing for contingencies beyond what is presently allowed under the accounting standards is a case in point. In line with the practice in other central banks, clause 11 amends section 34 of the Act to allow MAS to comply with accounting standards to the extent that it is appropriate to do so, having regard to its objectives and functions.

Immunity provision

In recent years, international supervisory standards have called for legal protection for both supervisory agencies and their staff. MAS and its officers should be protected from legal suits against them arising from their supervisory actions carried out in good faith. Clause 7 re-enacts section 22 of the Act, which will confer immunity from suits or other legal proceedings to MAS and persons acting on behalf or under the direction of MAS. Clauses 12 and 13 repeal the immunity provisions contained in the various Acts administered by MAS, as these provisions are no longer necessary with the enactment of the new section 22.

Committees and delegation of authority

To discharge their functions more effectively, major central banks and financial regulators have provisions to allow the Board or the Chief Executive to form committees and to delegate authority to such committees. Although it can be inferred from the MAS Act that MAS presently has similar powers, an explicit provision to that effect would provide greater legal clarity and align MAS' legislation with international best practices. Clauses 4 and 6 amend section 9 and insert a new section 13A to clarify that the Authority and the Managing Director may form committees and delegate powers to them or designated officers. Notwithstanding the delegation of any power, function or duty, they remain responsible for and retain control over how the delegated functions are exercised.

Mr Speaker, Sir, these amendments to the MAS Act comprise the more immediate changes to be effected by early 2004. Consequential amendments will also be made to other written laws administered by MAS.

MAS is presently reviewing other operational issues for the second phase amendments to the MAS Act, which are targeted to come into force in 2005. All these changes are intended to enable MAS to carry out its functions more effectively and to meet the operational challenges ahead.

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."

Introduction

Sir, this Bill proposes to create a new section 15A in the Computer Misuse Act. This new section will enable the Minister to empower any person or organisation to take necessary measures to prevent or counter any threat to a computer system, which can affect the national security, essential services, defence or foreign relations of Singapore. This is part of Government's efforts to establish a robust defence

against cyber attacks. In doing so, we join other countries such as the US, UK and Australia which have also strengthened their legislative framework against cyber attacks. In addition, MHA is taking the opportunity to amend the Act to allow certain minor offences to be compounded.

Singapore's vulnerabilities

Like many other countries, our essential and critical services such as water, electricity, gas, telecommunications and transportation are increasingly dependent on computer networks and information systems. This dependence is unfortunately something that terrorists and criminals can exploit. Any attack on our critical infrastructure and essential services will severely disrupt the economy and threaten our national security. Instead of a backpack of explosives, a terrorist can create just as much devastation by sending a carefully engineered packet of data into the computer systems which control the delivery of an essential service, say, for example, a power station, thus causing it to malfunction. The extensive blackouts in northern part of United States, London, Sweden, Denmark and more recently in Italy, underscore the consequences that can occur when there is a failure of essential services. It was fortunate that terrorists and criminals were not behind those incidents. Otherwise, the consequences would have been far worse.

With an increasingly computer-literate population and widespread availability of user-friendly hacker tools, more people around the world now have the necessary skills to carry out cyber attacks. Hackers and computer viruses can flood network connections, steal or tamper with information, and disrupt essential services. The susceptibility and vulnerability of infocommunications infrastructure is illustrated by the damage wreaked by the recent SoBig.F and Blaster worm attacks that occurred in August this year. The damage caused by these attacks is estimated at US$800 million.

Financial networks, government operations, online businesses and even emergency services were disrupted. Another case which highlights the vulnerability of national infocommunications infrastructure is the denial-of-service attack on the White House Website in July 2001. In that case, the Code Red worm was used to cause infected computers to flood the server hosting the White House website on a specific date and time with a massive amount of data, overwhelming it to the point where it could not be accessed.

Closer to home, the Criminal Investigation Department (CID) and the Info-Communications Development Authority (IDA) have noted a marked increase in the number and sophistication of hacking activities and cyber attacks in the last few years. Instances of successful computer hacking cases and unauthorised access with intent to commit an offence rose from 10 cases in 2000 to 19 cases in 2001 and 41 cases last year. In the first half of this year, there were already 24 cases. The number of unsuccessful attempts is probably many times more. Our analysis of website vulnerabilities showed that, in one case, as many as 6,000 hacking attempts were made on the website over a three-month period.

Singapore's current counter cyber-threat capabilities

Sir, the threats are therefore real. What we need to do is to further safeguard our information and communications networks from harm and degradation. As of now, we do have a framework to deal with cyber threats. In the public sector, the Government IT Security Incident Response Team (GITSIR), set up under IDA, coordinates responses to a cyber intrusion. The Technology Crime Investigation Branch (TCIB) of the Singapore Police Force carries out the necessary investigations. As for the private sector, the Singapore

Computer Emergency Response Team, established under the purview of IDA, will assist affected organisations to respond to cyber attacks.

New section 15A

But, these measures by themselves are not enough as they focus primarily on dealing with a cyber attack after it has occurred. We need to empower our security agencies to take pre-emptive steps to prevent a cyber attack on our systems because once it happens, the consequences are dire. The Computer Misuse Act currently does not allow our security agencies to take such pre-emptive measures in the face of an imminent cyber threat. Clause 3 of the Bill corrects this by creating a new section 15A which allows the Minister to authorise any person or organisation to take necessary measures to prevent or counter any threat that may endanger the national security, essential services, defence, or foreign relations of Singapore. The new section 15A would be invoked to deal with situations of an outright cyber attack or where there is specific intelligence received of an imminent cyber attack against our critical infrastructure such as power stations or water filtration plants. An example of a pre-emptive counter-measure would be the use of real-time intrusion detection system to counter any attack on our critical infrastructure. Other common methods to identify vulnerabilities in our computer networks include pre-emptive scanning activities as opposed to investigative scanning after an attack.

Safeguards

The powers given to the Minister under the new section 15A will not be used indiscriminately. The measures that may be taken are restricted to those aimed at preventing or countering any threat to a computer or computer service,

or any class of computers or computer services. The powers would be invoked only to avert threats that may endanger national security, essential services such as any service directly related to communications infrastructure; banking and finance; and defence and foreign relations of Singapore. The powers under the new section 15A would not be invoked to prevent or investigate a criminal offence that does not threaten our national security or essential services. This is unlike the provisions under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act or, as many of us know it, the US PATRIOT Act, for short, and which is also the case under the Council of Europe Cybercrime Convention, both of which allow the wide-ranging new powers to be used in areas other than threats to national security. So ours has a narrower focus. Our security agencies will also be required to satisfy the Minister that the cyber threats are imminent before the powers provided by the new section 15A can be invoked. Relevant industry and security experts would be consulted on the implications before the Minister takes a decision.

Composition of offences

Sir, let me now move to the topic of composition of offences. Currently, none of the offences under the Computer Misuse Act can be compounded. Clause 2 of the Bill creates a new section 12A to empower Police to offer composition for prescribed offences under the Regulations for amounts up to $3,000. Examples of prescribed offences, which MHA is considering, are minor computer offences such as unauthorised access to computer material and unauthorised disclosure of access code.

In allowing composition of offences under the Computer Misuse Act, we are not softening our stand on computer crimes. By amending the Act to allow composition for certain offences, we extend the range of options available to the prosecution. For example, it may not be desirable to prosecute a young offender who has committed unauthorised access where no harm or damage has been done. On the other hand, letting him off with just a stern warning may be too light a punishment. If composition is offered, the offender can be fined instead of being let off with a warning. This way, the offender will realise the seriousness of the offence he has committed. Composition amounts would be stipulated in the Regulations to reflect the seriousness of the offence.

Conclusion

Mr Speaker, Sir, given the prevailing security climate, this Bill will greatly enhance our security agencies' capabilities to counter cyber threats, in particular, cyber terrorism.

Sir, I beg to move.

Question proposed.

Mr Speaker, Sir, I rise to support the Bill as a necessary measure against threats made to the electronic infrastructure in Singapore. It has been said that the pen is mightier than the sword and indeed it was the case, and probably still is. In the information age, however, the keyboard is now mightier than the pen. A knowledgeable terrorist can literally hack his or her way into critical networks and cause billions of dollars of damage, as well as cause death and serious injury if, for instance, air or land traffic systems or hospital databases are tampered with. The security services may have to deal with electronic terrorists that are not in Singapore at all. It is an awfully difficult task to perform and the security services must be provided with the means to prevent such attacks. We

would want to support our security services in ensuring that Singapore is safe from such attacks.

However, it is a tough call to draw the line between respecting the privacy of ordinary people and preventing a terrorist attack on critical networks. Where national security and public safety are concerned, hardly anyone, I think, would object to the enactment of strong, even draconian, laws that would allow security services to stop such perpetrators. But because such laws are wide-ranging, open ended and, if used indiscriminately, may be an instrument of oppression, it is necessary that this House must scrutinise such extension of State powers very closely and that would mean asking the Minister to assure the House how such powers would be used.

I, therefore, seek clarification on the following matters.

Clause 3, which contains the proposed new section 15A provides the Minister to certify "any person or organisation" to take such measures as necessary to prevent or to obviate the threat, and these persons can exercise the powers under section 15, already in the original section 15, but not restricted to them. The powers conferred in the original section 15 are extremely wide. What, may I ask, are the additional powers that are contemplated which are not within section 15 and why they cannot be specified? For example, it has been said just now by the Senior Minister of State, in explaining the Bill, that the Minister must be satisfied that the cyber-threat must be clear and imminent before the certification will take place. Why cannot such guidelines be contained and included in the Bill? It would prevent the misuse of the Computer Misuse Act.

Secondly, what are the objections to providing the defendant, if any, with the first information report, when we are dealing, as the Bill provides, with civil as well as criminal proceedings? Usually the

provision of the first information report allows an accused person to access how to answer charges against him, or in the case of a civil proceeding, to allow a plaintiff to plead his claims properly.

Thirdly, it is provided in the proposed section15A(3)(b) that "no witness shall be obliged" to disclose the name, address, or other details of an informer. In other words, the informer's identity will be secret. However, may I ask the Senior Minister of State to confirm that it is permissible under this formulation that a witness can still voluntarily disclose the name of the informer, ie, he has the privilege to divulge the identity of the informer. So is this intended?

Fourthly, in civil proceedings, there is always pre-trial discovery. But in the proposed section 15A(4) the situation contemplated is that the book or database or records admitted in evidence "or liable to inspection" can be subject to judicial order to obliterate or conceal the informer's name, but this may be a little bit too late because the document or otherwise may already be disclosed under normal civil procedures, eg, in a demand for further and better particulars. Again, is this intended?

Mr Speaker, Sir, in general, where there is an open trial, and where the liberty or property of a subject is at stake, there should be as little prohibition on the disclosure of information as possible, otherwise it may hamper defences or cause real injustice. Are there special justifications for this provision as to why informers' identities should be kept so confidential? It may, as the Senior Minister of State has already pointed out, raise the spectre of State surveillance on a grand scale in order to combat the electronic terrorists. And where one can be accused by unknown persons, what are the safeguards that can be taken to

ensure that an accused person can conduct a proper defence in open court when there is no chance of knowing one's accuser, let alone confront him?

Sir, I strongly support this Bill, but hope that the Minister can address these issues and assure the House that the powers conferred by this Bill would be used with great care and circumspection.

Sir, I support the passing of the Bill. The Bill aims to take proactive steps to ensure that the security agencies here take preventive and, if necessary, pre-emptive measures, to counter any threat to a computer system which can affect national security, essential services, defence or foreign relations of Singapore. That the threat is real can be seen in various reports emanating overseas, which indicate that there are constant probings by foreign intelligence agencies. On top of that, we have hackers and crackers who tried to infiltrate key infrastructure computer systems on a regular basis.

My concern is how do we ensure that there are adequate safeguards to protect the privacy of law-abiding citizens. The proposed provision gives the decision-making power to the Minister without any external vigilance. In the US, it is the Attorney-General who authorises such power to the investigating agencies. In some cases, a written authorisation has to be obtained from a US Judge. I would like to ask the Minister as to whether he could consider setting up a supervisory committee, comprising at least a High Court Judge, to approve, if not, to review the use of such powers. In addition, I would like to ask the Minister as to how they would handle sensitive, private or corporate information which is innocent at the point of time the investigation is launched, but which is brought to their attention. What happens to such

information subsequently after the investigations are completed? Is such information discarded or will it be kept away for future use?

Perhaps the Minister could share with us how other countries approach these issues or challenges that are faced by their security agencies and also what safeguards are in place to prevent abuse. Sir, whilst I support the Bill, I hope the Minister can assure me that there is in place some checks and balances to ensure that such powers are not abused by our security agencies.

Thank you, Mr Speaker, Sir, for allowing me to participate in this debate. I support the amendments in this Bill, Sir.

Computers have now become one of our very essential tools for our daily work, business and leisure. Together with the Internet, it has changed the way we communicate and do business. Everybody, from students, CEOs and businesses, relies on computer technology as a core means of communication, work and social life. It is therefore imperative that this important tool of our modern lifestyle be well protected against hackers, threats, viruses and spammers. As I understand it, this current amendment does not address a minor but growing computer misuse problem, namely, email spamming, that is rising at an increasing and alarming rate, hampering business efficiency and work productivity.

Spamming emails are junk emails sent into our mailboxes, like what we receive in our normal letterboxes. It takes up bandwidth, space, time and computer resources. It also clogs up the personal mailboxes of the intended recipients with unwarranted advertisements and sales pitch that the intended recipient most often does not want to read. While most junk mails come from outside Singapore, I

see an increasing number of unsolicited junk emails coming from within Singapore businesses. The law in this area must be tightened, in Singapore and also internationally, so as to make it compulsory for email marketing companies to set up an easy opt-out option for those who do not want to receive such unwanted marketing in future. More importantly, the opt-out emails must not be allowed to be collated and resold to other marketers as an active mailbox, as it will surely defeat the purpose of opting out in the first place. This area of law must be clearly established if we want Singapore to continue to thrive as an efficient business and communication centre. As I speak in support of this current amendment, I hope the Ministry will look into establishing new laws on this matter of spam and junk emails as part of the Computer Misuse Act.

I support the amendments in this Bill but I would like to raise four points with regard to the Bill.

First, I refer to the new section15A of the proposed Bill. Indeed it sounds very much like the cyber-space equivalent of the Internal Security Act. As in the ISA, the Minister is empowered to act pre-emptively against imminent attacks on our telecommunications infrastructure and those parts of our networks that may compromise our national security.

While the intent behind this Bill is to be lauded, there are a number of questions that immediately come to mind. Like my hon. colleagues before me, I seek clarifications on how far "far back" would the Minister's power extend and what constitutes an imminent attack. In other words, how does the police cyber crime unit intend to differentiate between a real intent to compromise our national computer networks from those that are merely "wild" talk?

I am inclined to think that perhaps there is other recourse besides the proposed Bill. For example, we could pass a piece of legislation which obligates our enforcement officers to seek warrants of arrest against potential mischief makers or those who harbour a malicious intent to disable or compromise our national computer databases or our telecommunications networks.

Could the Minister also clarify what "proactive preventive" measures mean in the context of the amendment? Does it extend to the powers of arrest? Or is it merely confined to measures like denying potential criminals access to the networks?

Sir, my second point refers to section 12A(1). The proposed power of composition for prescribed minor computer offenders provides for an amount of up to $3,000. Given that the scale and destructive powers of these attacks are often-times vast and extensive, one wonders if $3,000 is too low a level of deterrence. Besides the power of composition, would the Minister consider other measures that may be adopted to rehabilitate and caution minor offenders against such anti-social acts?

Sir, on my third point, I would like to submit that the proposed Bill include a proviso that specifically defines both the acts of those adults who support, train, as well as fund minor offenders, and the stipulated punitive measures that would be meted out against these adults should such an incident occur.

On the fourth point, Sir, I would like to know how does the Minister propose to deal with an act against violations of non-security criminal offences. Would the Bill incorporate a proviso to empower the relevant authorities to act against violations of non-security criminal offences?

Many of us would recall that about a year or so ago, a hacker tried to disable the website of MediaCorp. That act alone cost MediaCorp a few million dollars worth of advertising revenue.

Perhaps the Bill should empower the relevant authorities to act against such offences. I urge the Minister to re-look at such non-security criminal offences and beef up the legislation against such offences as well.

On this note, I support the amendment in this Bill.

Mr Speaker, Sir, I thank the various speakers for speaking up in support of the Bill, many of whom strongly supported the Bill.

Sir, the points raised fall roughly into this matrix. First, the broad strokes. Mdm Ho Geok Choo asked what situations the powers under the Bill may be invoked. Mdm Ho and Prof. Chin asked what measures are contemplated under the new provision and, indeed, Prof. Chin asked whether these can be specified. In particular, Prof. Chin also mentioned the existing section 15, saying that the powers there are quite wide already. So why do we need this new section 15A? Then Mr Ravindran asked about safeguards under this new section. These are the broad strokes. Specifically, Prof. Chin, Mdm Ho and Mr Steve Chia made specific points - Prof. Chin about section 15(3), in particular, the evidentiary process. Mdm Ho asked about the new section 12, in particular, description of composition fines, and Mr Steve Chia asked whether we would introduce laws on spamming.

First, let me address Prof. Chin's point on the new section 15. Sir, the powers under the new section 15A are indeed much wider than the existing powers

under section 15. Really the focus of the two sections are different. The powers under section 15A are narrower because they are basically investigative powers. They can only be exercised by a police officer or a person authorised by the Commissioner of Police and only for the purpose of criminal investigations, subsequent to the commission of an offence.

This is more the traditional approach to crime solving. Moreover, the powers are limited as they can only be applied to a computer that is reasonably suspected or has been used in connection with an offence under the Act or any other criminal offence. Hence, contrary to what Mdm Ho thinks and I am sure Prof. Chin will agree by now, the existing powers that we have, both under the Computer Misuse Act and also other legislation, are definitely inadequate to deal with cyber threats against our national interests. That is why we need this new section.

As I have mentioned earlier in my speech, we need also to be able to take pre-

emptive steps to prevent a cyber attack on our system to safeguard Singapore's national interests. And we do this when we have information of an imminent cyber attack. Mdm Ho asked what constitutes an imminent attack. Essentially, it is an attack which is coming and likely to take place if steps are not taken to avert it. In this very globalised interconnected world, our security agencies are in touch with Interpol and their counterparts in other countries. This is something which all countries face. And as I have mentioned earlier, many other countries have, in fact, enacted laws which are similar to and, indeed, some wider than ours.

Sir, Prof. Chin is indeed correct. The powers are wide. In fact, he asked why the persons who may be asked to take measures should not be prescribed or mentioned. We need a wide approach because it is necessary to take pre-emptive steps. And when these steps are taken, they may be directed not only at law enforcement agencies such as the Police or the Internal Security Department but also regulatory ones such as the MAS, the IDA or indeed also directed at systems and infrastructure owners, such as our banks, the stock exchange, the power supply or our transport operators. I think it is better to give the latitude to the Minister, by certificate under his hand, to set out what the measures are. But the bottom line will be that before the Minister authorises this, there must be grounds to believe that such systems, if attacked successfully, would result in a disruption of Singapore's critical infrastructure and essential services. So that is the focus, and I am sure we will keep this focus in mind. This Bill and the powers enumerated in this Bill will be welcomed not just by this House but all our constituents and residents living in Singapore.

Sir, let me take this opportunity to also assure the House that the powers under this new section 15A will not be invoked lightly or indiscriminately. The section itself circumscribes its use to situations where national security, essential services, defence or foreign relations are threatened. And under section 15(5), essential services are further defined. So the focus is very clear. Hence, these are possible threats at the highest level affecting our national interest, not fanciful or imagined threats and certainly not just threats against the Government. I think Prof. Chin captures this very well in his speech when he says that the keyboard has become mightier than the pen. How true that is. So it is better to be forewarned and prepared, as we are now doing to gear up.

The situation that Mdm Ho mentions are lower level criminal offences which, in fact, can already be dealt with under our existing laws, including existing provisions in the Computer Misuse Act. In fact, in

1998, we beefed up the provisions to tackle some of the offences Mdm Ho mentioned. Indeed, any criminal offence that is disclosed in the course of taking measures under the new section15A will be prosecuted separately.

Prof. Chin asked whether the powers are too wide, and can the measures not be specified. Let me say this. Given the nature of the threats we are facing, I think it is a better approach for the section to be crafted to be as broad as possible without prescribing specific measures or setting out guidelines, as suggested by Prof. Chin. Indeed, what we say in this House will already be guidelines in interpreting the provisions of the Act.

We must not forget that the cyber world is a fast moving one where threat scenarios can change rapidly. I think that is a very basic point. And terrorists are also thinking of new ways to launch attacks. Hence, our security agencies should be given the latitude to take the most appropriate and effective means to mitigate and counter any cyber attack. Having said this, there are safeguards, and that is the point of Mr Ravindran's speech. I am sure all of us in the House want to know what are these safeguards.

Mdm Ho asked whether wild talk could lead to the invoking of section 15A. Essentially, she wants to know when the section will be invoked. Here is where the professionalism and objectivity of our security agencies come into play, and on this, they stand on their record. They must first submit a report to the Minister to convince him that there is an imminent threat to a particular computer system or network that would endanger the national security, essential services, defence or foreign relations of Singapore. The report would have to spell out in detail how and why they came to such a conclusion, and specify the measures they would require. The Minister will then have to, by a certificate under his hand,

authorise these measures which must be practical and reasonable, and he will do this only after careful scrutiny and evaluation. As part of this process, relevant industry and security experts would be consulted on the implications of taking these measures before the Minister makes his decision. So it is a very considered process. Therefore, I think it is not necessary for a supervisory committee that Mr Ravindran suggests. Perhaps he took a leaf from the ISA. I think Mdm Ho does say that there is some parallel there. But unlike the ISA where the liberty of a person is at stake, here it is not quite so. And given the nature of the threat, I think it is better to move fast and decisively, because the threats can also be changing all the time. Indeed, if the threat is imminent, I think the Minister must have the latitude to act decisively and in the best interest of Singapore; of course, supported by the professionalism and objectivity of his security officers. Hence, ultimately, the safeguard must be the judgment of the Minister and the professionalism and integrity of the entire system and especially of the players, the actors, the people working the system.

Prof. Chin and Mdm Ho asked what measures are contemplated. Sir, the measures could be technical, operational and procedural in nature. They could include, for example, perimeter defence devices such as firewalls, vulnerability scanning tools, real time intrusion detection systems as well as systems designed to combat computer viruses, worms and trojan horse programmes. All these form part of the multi-layered defence we have against cyber attacks. These measures will be non-intrusive in nature. For example, any scanning programme deployed would not intrude a subscriber's PC. It would only scan the Internet passively to determine vulnerabilities in the affected network.

Let me assure Mr Ravindran that it has never been our intention to intrude into the privacy of law-abiding citizens. So law-abiding citizens should have no fear. If at all our security agencies come across any private information in the course of taking measures under this new section, such information is protected under the Official Secrets Act. The security agencies do not reveal such private information. And this is indeed no different from the current situation where our law enforcement officers abide by their code of professionalism, and do not reveal or make use of any private information obtained in the course of their duties.

Let me now address the points Prof. Chin mentioned on section 15(3). He referred to that subsection and asked what are the objections to providing the defendant with a first information report when we are dealing with civil as well as criminal proceedings. Sir, this subsection will be invoked when civil or criminal proceedings ensue in relation to an offence disclosed by any measure taken under section 15A. This is intended to protect the identity of the informer and, more importantly, the circumstances in which the measures were invoked. Information on the threat and the specific measures taken cannot be disclosed for obvious reasons, as it will hinder or even jeopardise the very operations taken to neutralise the threat. We may even unwittingly alert the perpetrator or attacker and he could change his plan, divert his tactics or even frustrate the efforts of our agencies. He could also take steps to cover his tracks. We will then have to start afresh, something we can ill afford to do in such dire circumstances of an imminent threat to our national interests.

Having said this, let me assure Prof. Chin that section 15A(3) does not absolve the Police from conducting proper investigations and gathering sufficient

evidence to prove all the elements of the offence. I am sure he is aware of that. For example, the first information report might alert Police to the fact that a certain offender has been hacking into the Internet banking account of bank customers. The Police will, separately, still need to gather the necessary evidence, such as particulars of the hacking, particulars of the victims and any loss or damage suffered. What will be protected from disclosure is the fact that the security agency alerted the Police to the Internet banking hacking offence in the course of taking preventive measures authorised by the Minister. In any case, section 15A(3) is not new. I am sure Prof. Chin knows that there are parallel provisions in the Misuse of Drugs Act and the Prevention of Corruption Act.

Prof. Chin also asked whether section 15A(3)(b) will allow a witness to voluntarily disclose the identity of the informer. Sir, the intention behind this provision is that a witness cannot be compelled to answer any question which may lead to the disclosure of sensitive information or the identity of the informer. The witness in such circumstances is likely to be the investigation officer who received the first information report from the security agency. The investigation officer will be instructed not to disclose the information unless he is authorised to do so by the relevant authority after consulting the security agency. So no other witness is likely, in practice, to be in possession of the sensitive information in question, unless it is received in contravention of the Official Secrets Act.

Prof. Chin also asked whether in civil proceedings the identity of the informer could, in fact, be revealed in pre-trial discovery, thus circumventing section 15A(4). Sir, let me, first, explain that civil proceedings are included, because there is a possibility of the victim in a criminal prosecution commencing a civil suit

against the offender for loss and damage suffered as a result of the offence. In such a case, parties may subpoena documents as evidence in a civil suit which may inadvertently disclose the identity of the informer. As I have just mentioned, it is highly unlikely that private parties in civil proceedings will be in possession of sensitive information leading to the discovery of informers. Hence, Prof. Chin's suggestion that pre-trial discovery can be used to ask questions relating to the identity of the informer, whilst technically possible, is, in practice, highly unlikely. But let me assure him that we will consider how this works in practice and fine-tune it, if necessary.

Mdm Ho asked whether the composition fine limit of $3,000 is too low. To put things in context, I think those of you in this House, at this year's Committee of Supply debate, will know that the Ministry of Law is working with other Ministries to see how we can decriminalise minor offences, in particular, regulatory ones. So this is part of this process. Where we can, we will enable the authorities administering Acts to impose composition fines.

Sir, I think all of us will agree with this approach, because there will be more flexibility given to the agencies and, definitely, on a case-by-case basis, eg, if a young offender is involved and it is only a minor offence under the Act, to impose a composition fine. But, as Mdm Ho has mentioned, if an adult is behind that minor's defalcation, then he cannot hide behind that veil. He possibly can be charged for abetting. So, there is no automatic application of this process. This composition fine will also not be used for the new situation that is covered under section 15A. It is for existing offences in the Computer Misuse Act and the less serious ones.

Mdm Ho also suggested beefing up the Act to cover other non-security offences. I have mentioned very briefly just now

that we have done this. In 1998, we amended and beefed up the Act, putting in new sections and also giving the Police more investigative powers. But we will still look at the Act all the time and, if need be, we will further beef it up.

Finally, Mr Steve Chia has mentioned spamming, and asked whether we can introduce laws to make spamming an offence. MITA and IDA are currently reviewing the position with AGC. They are studying how other countries deal with the problem of spamming. We note that in many of these countries, for example, United States, Australia, United Kingdom, a multi-pronged approach is adopted that encompasses, besides legislation, consumer awareness and education, consumer opting-in or opting-out to receive unsolicited mail, anti-spam technical solutions and industry's self-regulation as well. For those countries which have introduced laws against spamming, we are monitoring the efficacy of these laws. Indeed, there are reports that countries with laws against spamming have found that these laws are not entirely effective in eliminating spamming. Thus, in the US, for example, despite the laws, successful suits against spammers are rare and the instances of spamming have not decreased. Therefore, we will study and then choose the way forward that is best suited for Singapore.

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. - [Assoc. Prof. Ho Peng Kee].

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

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.25 pm.

Sitting accordingly suspended

at 4.02 pm until 4.25 pm.

Sitting resumed at 4.25 pm

Order for Second Reading read.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time".

Objective of Bill

The Government intends to accede to the 1988 International Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation, or the Rome Convention as it is commonly known. The proposed Maritime Offences Bill 2003 is to give effect to the provisions of the Rome Convention.

Rationale

Let me begin by providing a brief introduction to the Rome Convention. The Rome Convention was negotiated in the International Maritime Organisation (IMO) as its contribution to international efforts to fight terrorism aboard or against ships. It aims to eliminate safe havens for perpetrators of offences such as seizure of ships and acts of violence against persons on board ships that endanger navigational safety. It does so by requiring parties to take action against alleged offenders in their territories, even

if the alleged offence is committed outside their territorial waters.

As the Members of this House would know, the events of 11 September 2001 and reports of planned maritime terrorism by terrorist groups in the region have highlighted the vulnerabilities of the shipping and port sectors to terrorist attacks. This is compounded by the piracy problem in regional waters. Addressing the challenges of maritime security is of vital importance for the international community in a post-September 11 environment.

As a maritime nation and a responsible member of the international maritime community, Singapore takes a very serious view on maritime security. As part of Singapore's heightened vigilance against all terrorist threats, we have intensified security measures for key areas in our port waters, including increased patrols by the Navy and Police Coast Guard. We have also strengthened coordination among the national maritime agencies to enable a more comprehensive and integrated approach to maritime security. Singapore was also the first Asian country to sign on to the Container Security Initiative which seeks to protect the sea container trade.

On the international front, Singapore is supportive of the new maritime and port security measures adopted at the IMO, and the universal and effective implementation of these measures. Such measures are needed to guard against threats to the security and safety of life at sea and disruptions to seaborne trade. This is especially critical for international waterways such as the Straits of Malacca and Singapore, given their importance to international maritime trade.

In this regard, the Bill before us to give effect to the Rome Convention forms part of Singapore's continuing contributions to the international maritime community's fight against terrorism.

Main Features of the Bill

Let me now touch on the main features of the Bill.

A key aim of the Rome Convention is to eliminate safe havens for perpetrators of crimes at sea by requiring a member State to take action against any such perpetrator found in its territory by prosecuting or extraditing him, whether or not the act was committed within the State's territorial waters.

As such, the acts described in clauses 3 to 7 of the Bill are offences under Singapore law regardless of the alleged offender's citizenship, the state in which the ship

is registered and whether the offence is committed in Singapore or elsewhere. Singapore would establish jurisdiction over such offences.

Let me elaborate on the various offences.

Clause 3 makes it an offence for a person to hijack a ship.

Clause 4 makes it an offence to intentionally destroy or damage a ship or commit on board an act of violence which is likely to endanger its safe navigation.

Clause 5 makes it an offence to intentionally destroy, damage or interfere with the operation of any property used for providing navigation facilities, such as lighthouses and light beacons.

Clause 6 makes it an offence to issue a threat to carry out an act referred to in clause 4 or 5, which might endanger the safe navigation of a ship.

Clause 8 allows the master of a Singapore registered ship to deliver a person to the appropriate authority of another Rome Convention country, if he is

of the opinion that the person has committed certain offences under the Bill.

Mr Speaker, Sir, the importance for Singapore to be a Party to the Rome Convention is clear.

Being a Party would demonstrate Singapore's firm commitment to deal with unlawful acts at sea, such as piracy and maritime terrorism. It also underlines Singapore's active involvement in the global fight against terrorism.

In view of heightened security concerns over possible maritime terrorism and piracy attacks in the region, Singapore cannot afford to take maritime security for granted. Our intention to accede to the Rome Convention would not only strengthen our laws, but would also bring us to higher levels of international cooperation to combat maritime terrorism and piracy.

Sir, I beg to move.

Question proposed.

Sir, I wish to speak in support of this Bill in the name of the Minister for Transport.

This Bill is important and necessary in that it makes clear the offences committed, such as for hijacking or for damage or destruction of ships, and this includes maritime navigational facilities, as pointed out by the Minister just now. It is timely that, given the current concern, especially after 911, about terrorism that we take proper steps to build into our legal system such maritime offences. My question is, given our port's pre-eminence in maritime businesses, why such safeguards have not been done earlier. Hijacking of air passengers, damages to ships and maritime facilities or vessels have occurred too many times. Are there

special reasons for the delay or special circumstances for its urgency? The Minister just now mentioned that the Rome Convention was signed in 1988. It has been quite a number of years since that we are now acceding to this Rome Convention condition. I would like to ask how many countries have signed or ratified the Rome Convention, and the Minister may want to inform the House. No one can quarrel with these safeguards. By this Bill, it would be an offence, irregardless of his citizenship, the registry of the ship, or regardless of where the acts are committed.

This Bill, however, makes no mention of damages to people on board the vessel. Is it the passengers or crews? I refer particularly to theft or robbery at sea by pirates. We have quite a bit of this as reported in the press. Does the Minister not see it fit to include acts of injury, robbery, or theft, to passengers or crews of vessels who ply our neighbouring waters? It is not clear to me whether any of these provisions in the Bill covers this aspect of danger to navigation of the sea lanes around us.

Clause 3 provides for any person who unlawfully uses force or by threats seize a ship or control a ship and shall be guilty of an offence, whatever his nationality or citizenship, whatever the state in which the ship is registered and whether the ship is in Singapore or elsewhere. This makes it an offence under the Bill for any offence of this nature committed by anyone on any ship anywhere. While we can agree to the spirit of its intent, are we able to enforce legal proceedings as such on anyone, any ship, anywhere, as clauses 3 and 4 seem to imply?

I hope the Minister can clarify these points.

Mr Speaker, Sir, I stand in support of the Maritime Offences Bill.

This Bill is long overdue and it is important that it be implemented early. Since the early days of maritime activities when sailing ships plied the trade routes, the security of these vessels had been threatened by criminal or terrorist elements, either in port or at sea. Today, a large and vital part of the global trade passes through the ASEAN countries. 80% of the world's goods are moved by sea and about 47% of the world's trade taking place within APEC. The Southeast Asian region is the area of convergence of most maritime activities in ASEAN, particularly the Straits running through Malaysia, Indonesia and Singapore.

Having visible maritime law enforcement patrol is vital to maritime safety, as deterrence is the key element in preventing the conduct of any criminal activities whether on land or at sea. As such, Singapore must play its part in tackling illegal maritime activities by having appropriate legal powers to deal with these threats. Clause 3 of the Bill deals with hijacking of ships which is a bigger threat than just ordinary robbery at sea. The South China Morning Post in Hong Kong on 17th May 2003 states that vessel hijacking rose to 25 last year from 16 the year before. Some had their markings repainted and super structures altered to conceal the identities when they went back to sea. Only a few had been recovered. Goverments in the region had been holding their breath for fear that Southeast Asian terrorists would join the hijackers and create a giant blockage to disrupt Asian trade. The International Maritime Bureau said that the terrorist attack on the French supertanker, Limburg, off Yemen in October 2002 showed maritime terrorism has become a reality.

The fear among ship owners and port authorities is that it is a matter of time before an oil tanker, or a large ship, is left running without guidance because its crew members are killed, kidnapped or

locked up. This fear of unchecked piracy has become a reality on Sunday, 2nd November this year when, for the first time, an oil tanker nearing the busy Singapore Straits sailed unmanned for nearly an hour after pirates tied up the crew. Had there been a collision, an inevitable environmental disaster would have taken place. Clause 4(1) states that any person who unlawfully and intentionally (1) destroys a ship; (2) damages a ship or its cargo so as to endanger, or to be likely to endanger, the safe navigation of the ship; or (3) commits on board a ship an act of violence which is likely to endanger the safe navigation of the ship, shall be guilty of an offence. This clause seems to cover a broad range of possible intentions by a guilty person. However, a rash act by a person may also lead to the same consequences and may fall out of the law by pleading unintentional acts. I feel that this clause should also cover persons who are reckless in their behaviour, thus causing danger to the ship or safe navigation of the ship.

Clause 4(2) states that any person who unlawfully and intentionally places, or causes to be placed, on a ship any device or substance that is likely to destroy or damage a ship or its cargo and endanger its safe navigation shall be guilty. In many instances, maritime terrorism has been committed using small arms, grenades and rocket launches, or other improvished weapons that have been in common use in land based terrorist activities. Arms of various types may also be used and concealed in cargo or baggage and timed to detonate while in port or when it is already inside a vessel and at sea. I call for a more specific reference to any device or substance that is likely to destroy or damage a ship to be included in clause 4(2). In other words, anyone other than a peace officer engaged in the execution of his duty who takes on board a ship an offensive

weapon or any explosive substance shall be guilty of an offence under this Bill.

Clause 5, I am happy to note, covers offences committed in relation to damages and interferences to operational navigation facilities on land that could result in serious interference to maritime safety. Such indirect threats would require strong preventive measures and legal deterrence in the fight against destructive elements. However, clause 5, on the other hand, should also state that any reasonable acts to protect the person, ship, or offshore installation, against piracy or maritime violence shall not itself be an offence, as defined under the Maritime Offences Bill.

Clause 5(3) states that it is an offence to give false information that endangers the safe navigation of a ship and is liable to life imprisonment. This, I see, is a double edged sword. The harsh penalty proposed will act as a deterrent against would-be hoaxers but might discourage the public from coming forward for fear that they might run foul of the law.

Clause 9 of the Bill states that any person guilty of an offence under the Act shall be liable on conviction to be punished with imprisonment for life. In today's context, we need to draw a difference between sea robbery and maritime terrorism. The latter has a political objective and has far-reaching consequences as compared to the former which is purely for personal gain. Should we not consider imposing different penalties in accordance with the severity of the offence? I propose that penalties should not be restricted to jail terms but also include the forfeiture of ships, cargoes, goods, or equipment employed during the offence or had facilitated the offence.

What is noticeably absent from the Bill is with regard to the disposal of cargo or loot derived from the offence. The Bill should make provision to penalise those who are responsible for disposing of such content. The effectiveness of any law enforcement agency in curbing maritime offences will depend greatly on cooperation among governments as piracy respects no territorial waters. Since 1992, Singapore has signed bilateral agreements with Indonesia and Malaysia to coordinate periodic anti-piracy exercises in the Malacca and Singapore Straits. Under these agreements, navy and marine police units from the three countries coordinate their activities and exchange more information on piracy. To be more effective, our laws and neighbours must have the powers to allow our coastal patrols to apprehend culprits who seek shelters on the waters of another country and have the flexibility to overcome such legal constraints and uncertainties.

Sir, combating maritime violence is now as much a part of national security, as is defence against military threats. Such efforts will facilitate Singapore's cooperation with the international community in suppressing maritime violence and terrorism, and in ensuring safe passage for ships which ply our waters.

Sir, I support the Bill.

Mr Speaker, Sir, I wish to thank the two Members for supporting the Bill.

Mr Andy Gan has given examples of piracy and terrorism on the seas. Singapore takes a very serious view of maritime security. As part of our heightened vigilance against terrorist threats, we have intensified security measures for key areas in our port waters, including increased patrols by the Navy and Police Coast Guards. Singapore

is also active in implementing the new maritime and port security measures adopted at the International Maritime Organisation which guard against threats to the security and safety of life at sea and disruptions to seaborne trade. The accession to the Rome Convention is part of Singapore's continuing contributions to the global fight against terrorism. We are not the first country to accede to the Convention.

Mr Chay wanted to know how many countries have acceded to the Convention.

95 countries have done so. They include Asian countries, such as China, India and Japan. In Southeast Asia, we are the third country after Vietnam and Myanmar. Nevertheless, our ascension to the Convention now in this heightened security environment will increase safety in this region. It will enhance Singapore's ability to deal with and deter maritime security threats.

Mr Chay also asked that the Maritime Offences Bill offer protection for passengers and crews of ships and the enforceability of its provisions. The provisions in the Bill reflect the requirements for countries that are parties to the Rome Convention. The Bill does not only protect ships and navigational equipment, it also covers acts of violence against passengers and crews, in conjunction with offences committed under the Bill.

Both Mr Chay and Mr Andy Gan were concerned whether piracy was covered by this. The Rome Convention covers piracy. Mr Chay is right in pointing out that the effectiveness of the Rome Convention would depend on the cooperation between countries that are parties to the Convention. If the offender is found in another country, we will not be able to prosecute him even though the law allows for this, unless the other country has signed the Convention. The fight against maritime terrorism and piracy ultimately requires a multi-lateral

approach. Hence, we would like to see more countries in the region accede to the Rome Convention, as part of the multi-lateral cooperation to deal with the unlawful acts at sea.

In acceding to the Rome Convention, the details of the Bill in Singapore are similar to other countries'. Hence, there is a clear distinction between reckless acts at sea and terrorism, and the Rome Convention does not cover reckless acts at sea.

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.

4.48 pm

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, for some years now, the Consumers Association of Singapore (CASE), as well as several Members of this House, have advocated the enactment of a fair trading law. This is because while some particularly offensive practices like cheating or intimidation are prohibited under our criminal laws, many errant sales tactics, such as bait advertising, misrepresentation, and hard selling, are not clearly covered by any of our existing laws. In 2001, a joint private and public taskforce, co-led by CASE and MTI, was formed to study this issue. In

2002, the Government accepted the recommendation of the taskforce to enact a Fair Trading Act.

Based on the taskforce's recommendation, my Ministry has drafted a Consumer Protection (Fair Trading) Bill, and conducted two rounds of public consultations in October last year and July this year. MTI also held dialogue sessions with various industry and business associations, and conducted with CASE about 10 educational seminars. We received many good suggestions and feedback to improve the draft Bill. These have been incorporated into the final Bill. We thank all those who have provided feedback for their useful inputs.

Key Provisions of the Bill

The Bill now before the House is principally designed to accord better protection to consumers by allowing them to seek civil redress against traders engaging in unfair practices. The primary focus is on small consumers who lack the expertise and resources to fend for themselves against unfair practices.

Clause 4 of the Bill defines what constitutes an unfair practice, and 20 such examples are listed in the Second Schedule. The trader must not mislead the consumer. He should provide the consumer with all relevant and material information in order that the consumer can make an informed decision.

Clause 6 of the Bill allows consumers aggrieved by unfair practices to obtain civil remedies from the trader before the court. They can do so within one year of the discovery of the unfair practice. As the Act is intended primarily to protect small consumers, the claim amount will be capped at $20,000. We expect most

claims to be filed in the Small Claims Tribunal.

In determining whether or not the trader has engaged in an unfair practice, the court will consider the reasonableness of the trader's actions in the circumstances surrounding the unfair practice. The court shall also have regard to whether or not the consumer made a reasonable effort to resolve the dispute with the trader, and to minimise any loss or damage resulting from the unfair practice. These provisions are in clauses 5 and 7 of the Bill.

Some traders may persist in unconscionable practices which are detrimental to consumers and the reputation of our retail sector. Clause 9 of the Bill therefore provides for a District Court or a High Court, on the application of a specified body, to grant an injunction against a trader. CASE and the Singapore Tourism Board will be appointed as specified bodies under the Act to look after the interests of local consumers and tourists respectively. Before filing an injunction, the specified bodies must obtain the endorsement of an Injunction Proposals Review Panel. This Panel will review whether there is a public interest to be safeguarded through the injunction, and serve as an objective and independent check on the specified bodies.

To minimise legal proceedings and costs, clause 8 of the Bill allows a specified body to offer a non-litigious alternative to an errant trader before the trader faces an injunction application in court. This will be in the form of a voluntary compliance agreement (VCA), whereby the trader agrees not to engage in an unfair practice. The trader can, however, choose not to enter into a VCA and, instead, face the injunction application in court.

There have been many complaints against high-pressure sale tactics for time share and direct sales. As such, under clauses 11 and 20 of the Bill, regulations will be made to allow consumers to cancel time share and direct sales contracts within a 3-day cooling-off period, excluding Saturday, Sunday and public holidays.

Balance between consumers and traders

Sir, in drafting this Bill, we are mindful of the need to balance the interests of the consumers and traders. On the one hand, the Act must provide adequate safeguards for consumers and allow them legal recourse to claim against unfair practices. On the other hand, we do not want to over-regulate and add to business costs. Amongst traders, those who engage in unfair practices are a minority. It will be unfair to impose undue regulatory costs on the majority who conduct business ethically. This would also be bad for consumers, for such costs will in the end be passed back to them.

We have also chosen not to criminalise unfair practices. This is because the more serious offences are already covered by existing legislation. There are no criminal sanctions in our proposed legislation. Instead the Bill will hold traders accountable for unfair practices by making them liable for civil restitution. This will empower consumers to seek civil remedies against errant traders, without having to rely on or wait for the Government to take action. Besides allowing for quick redress, this approach of self-reliance will encourage greater consumer responsibility and pro-activity.

To minimise the need for litigation, MTI will work closely with CASE and business associations to educate consumers and traders, and encourage the development of alternative dispute resolution mechanisms.

CASE's contributions

Sir, MTI would like to place on record our appreciation of CASE for championing the enactment of this Bill to advance the consumer cause. In particular, we wish to acknowledge the tireless efforts of the past and present Presidents of CASE, including Dr Toh See Kiat, Dr Teo Ho Pin and, especially Mr Yeo Guat Kwang, for their contributions to this legislation. CASE has played a major role in the formulation of the Bill and has provided very useful inputs. It has also organised several seminars and dialogues to reach out to both traders and consumers to address concerns, as well as improve the understanding of this Act.

Sir, our overall approach of 'caveat emptor' to consumer protection has served us well, and remains the best defence for consumers. However, despite the best care, consumers may still fall prey to unfair practices. The Consumer Protection (Fair Trading) Act will thus accord better protection to consumers. It will also benefit honest traders by weeding out the errant ones. This will help develop consumer sophistication and raise the standard of the retail sector. The outcome will be a fairer and more equitable marketplace, but without undue regulatory burden on businesses.

Sir, I beg to move.

Question proposed.

Mr Speaker, Sir, I wish to congratulate the Government and the Minister in charge for finally tabling in Parliament this Consumer Protection (Fair Trading) Bill. It has been long awaited.

The Bill serves to regulate fair trading between traders and purchasers, and to protect the small buyers against cheating and intimidation, as the Minister of State has said. It also prohibits certain undesirable selling tactics. I would like to say that the Bill, besides giving protection

to consumers, would also help to enhance Singapore's reputation as an excellent and enjoyable shopping place for tourists.

With regard to various provisions in the Bill, I have some comments to seek clarifications from the Minister.

4.57 pm

First, the approach adopted by the Ministry is on the principle of "caveat emptor". There is no policing body to check on the merchants. The consumers, therefore, have to police the market themselves. It seems to place the onus on the consumer to seek redress for any unfair practice by going to court. Going to court is often an obstacle and a big step for an aggrieved consumer to take. To many people, they have a mental block about going to court. They could be hesitant to take the trouble, time and money to bring errant traders to court. This is one reason why so many people turn to CASE for assistance. The same applies to tourists who are here only for short stays. They generally do not have the time, patience or energy to take errant merchants to court.

So, why not take a more pro-active approach? I wish to suggest that it would help consumers if the Ministry of Trade and Industry would set up a Fair Trading Office (FTO) to police and take action against errant merchants.

I wish, therefore, to enquire why the Minister has not considered the idea of having a FTO for aggrieved consumers to take their complaints to. The answer could be that there are more costs to be incurred by the Ministry to set up a FTO. But I would contend that, without an FTO, there are still costs being incurred,

just that the costs being incurred are now transferred from the FTO to the courts. Consumers taking cases to court will also cause heavy costs to be incurred by the courts. There is the added cost to be passed on, which will also take up the time of our judges who are perhaps more preoccupied with serious cases. Therefore, would it not be less cumbersome and save much time of the courts if consumer protection cases are dealt with and resolved by a FTO?

I would like to ask the Minister what is new

and would make things easier for consumers under this new Bill that is different from the past. Apart from the stated schedule of 20 unfair practices, how has the process or manner of added protection for the consumer improved? Without this Bill, the consumer likewise could take the errant trader to court. Therefore, my greatest lament on the Bill is that there are no real teeth or bite in the Bill.

Mr Deputy Speaker, Sir, my next question is why limit the claim to a cap of $20,000 on the value of a claim. I believe that this cap is a little low. We all know that consumer products can be very expensive nowadays, and items like electronic gadgets, furniture and jewellery can cost a lot of money.

I note that the cap is on the value of the claim, that is, not on the entire value of the products or services. However, there could be many occasions when the consumer wants a total refund. In such cases, therefore, the value of the claim is equal to the value of the products. Moreover, there are also instances when the claim for redress goes beyond the value of the product, such as a claim against medical costs incurred due to aggravation, distress and additional costs incurred on recovery of transportation.

To avoid the complications I have mentioned above, I suggest that the cap

can be set against the total value of the product or service, instead of setting it against the value of the claim. This will remove the ambiguity of the concept of basing on the value of the claim. Perhaps a total value of a higher limit of, say, $100,000 can be set for the value of the products that are under dispute.

Mr Deputy Speaker, Sir, my next point is to enquire about the role of CASE within this Bill. It is not clear what added roles or responsibility CASE will take on in this fight for consumer protection under this Bill. CASE has been doing a great job to publicise errant trade practices and take unscrupulous traders to task. Should we not take this opportunity to give more teeth and bite to CASE, as a watchdog for the consumers? Why not empower CASE to have the authority to hear and arbitrate minor cases, such as for claims that are below $5,000 or less? Could the Minister elaborate on the roles of CASE under this Bill?

Under this Bill, a specified body such as CASE or the Singapore Tourism Board (STB) can apply to the courts for an injunction against a supplier. Prior to the filing of the injunction, the specified body has to refer the matter to an Injunction Proposals Review Panel. I presume that in this process, a consumer or group of consumers must first send a complaint to CASE or STB. I would like to know whether this process can in fact be abused by traders to fight against their competitors through using deterrent trade tactics. For example, they can file a complaint, in the guise of an aggrieved consumer, thereby resulting in a voluntary compliance agreement or an injunction order being taken against another competitor.

Sir, I like the idea of a 3-day cooling-off period for certain transactions that involve high pressure selling tactics, such as direct sales contracts and time share. I would like to ask the Minister whether he

would consider to include this 3-day cooling-off period for other transactions, where although there is lesser pressure selling tactics the consumers do not have the opportunity to examine the goods closely at the time of the purchase. These are in cases of catalogue sales, Internet sales, telephone sales and such likes. I think it is fair that for such transactions, the consumers can be given three days after receipt of the actual goods before he decides whether he really wants to buy them or not.

In this regard, I would urge the Minister to designate the 3-day cooling-off period from the date of receipt of the goods, instead of 3 days from the date of sale. In some cases, the delivery of the goods can take longer than 3 days, or the suppliers can intentionally deliver after 3 days, so as to extend beyond the mandatory 3-day cooling-off period.

Mr Deputy Speaker, Sir, I support the Bill.

Mr Deputy Speaker, Sir, CASE, the Consumers Association of Singapore, has been doing its best to discourage unfair practices that work against the interest of consumers. CASE can only do this successfully with the support of consumers and the Government. Other than getting backing from consumers and the Government, we strongly believe that the third critical factor is to have a good legislative framework to set minimum ground rules for all concerned parties to work on. With a suitable legislative environment, CASE and the consumers will not be just blowing hot air, but will be able to act against cases of unfair practices, and it will ensure that the standard of service improves over time. Therefore, CASE is firmly convinced that we need a fair trading legislation to promote a fairer and more equitable marketplace. Government's intervention

is necessary and CASE lobbied strongly for it for many years.

Let me take this opportunity, Mr Deputy Speaker, Sir, to recount the key milestones.

In January 1979, the late Mr Ivan Baptist, then President of CASE, urged the Government at the Debate on the President's Address to consider a fair trading legislation along the lines of the UK and Australian Act, and properly modified to suit our context. He told the House that Singapore consumers will benefit from the legislation, and it would give additional boost to the tourist industry in Singapore.

Three years later, during the Debate on the President's Address in January 1992, Prof. Ho Peng Kee, then Vice-President of CASE, reiterated that there were retailers in Singapore who dealt unfairly with consumers, whether Singaporeans or tourists. He said that it was unacceptable in Singapore that prides itself as a shopping paradise. He urged the Government to set up an office with some of the functions of the Office of Fair Trading in the UK to deal with such errant retailers.

At the debate on the Cost Review Committee's Report on 13th October 1993, Prof. Koo Tsai Kee, the then President of CASE, once again urged the Government to look closely at New Zealand's Fair Trading Act which was implemented in 1986. He said, and I quote:

"There are unfair trading practices here. The Fair Trading Act is an Act to give consumers and tourists a fair deal. Specifically, it prohibits misleading and deceptive conduct, false representations and unfair practices."

In May 2000, in response to Dr Toh See Kiat's query, the Minister for Trade

and Industry informed the House that MTI would study CASE's proposal for a Fair Trading Act for Singapore. On 8th March 2001, in this House, the Senior Minister of State for Trade and Industry, Mr Peter Chen, suggested to Dr Teo Ho Pin that CASE and MTI jointly form a taskforce to explore the possibility of enacting a Fair Trading Act.

Sir, significant progress was made early last year. In April last year, the joint taskforce, co-chaired by MTI and CASE, set up to study the feasibility of a Fair Trading Act concluded its report. We decided to adopt a different approach from a number of jurisdictions. The key difference is that traders who commit such unfair trade practices will not be subject to criminal sanction. Principally, we want to introduce a legislation to protect consumers but without adding onerous burdens to businesses, including costs. What my team and I proposed was to empower the consumers, to give them the avenue to take up their own case. There will be no policeman, ie, there will be no Fair Trading Office. This will create a more robust and sustainable system to keep unfair trade practices in check.

This is a step in the right direction. The Act empowers consumers to take action themselves. Just like the unions act as facilitators to help workers in a dispute under the Employment Act, CASE can be a facilitator to empower consumers under the fair trading legislation. We recommended that the Act set out a list of unfair trading practices. Consumers will be able to seek remedies by showing that traders have committed these practices.

Sir, over the years, CASE has come across numerous instances where consumers sought our help when they fell victims to unscrupulous business tactics. Each year, CASE received more than 10,000 such complaints. The unfortunate thing is that all these

complaints fell in the grey areas and there was not very much we could help. By and large, consumers do not have the expertise or bargaining power to negotiate a fair transaction or contract. The introduction of this Bill today is a major step for consumerism in Singapore.

In the last seven months after the Minister for Trade and Industry, BG George Yeo, announced during the Budget Debate that the Bill will be tabled for enactment into law by the end of this year, CASE, in collaboration with MTI, AG's Chambers and various business groups, has organised more than 10 discussion and dialogue sessions with the business community and consumers. Through these sessions, we managed to generate greater awareness and provide a platform where businesses and consumers could raise issues on the proposed legislation. Such sessions were meant to create opportunities for discussions and participation in a consultative atmosphere so that all relevant parties could better understand and fine-tune the proposed fair trading legislation.

In the discussions and dialogues that we held, we found two common misperceptions on consumer protection laws. The first misperception is that a consumer protection law hurts businesses. The second misperception is that having a consumer protection law alone is sufficient and nothing else needs to be done. These misperceptions must be dispelled.

First, a consumer protection law protects both consumers and businesses. Many members of the business sector were concerned about how a Fair Trading Act would affect their businesses. To them, I would say that it is not in the consumers' interest to have a regime which will create an onerous burden on traders, or which will straitjacket them with a host of red tape. To be truly effective and meaningful, a consumer

vprotection law must take into account the concerns of fair traders. Amongst traders, those who are engaged in unfair trade practices are a minority. It will be unfair to impose undue regulatory costs on the majority of those who observe ethical business practices. It will not be in the interest of consumers if such costs are passed on to the consumers ultimately.

Although the manner in which the law protects business may be less evident to some, it is no less pertinent. Such an Act will weed out errant business practices and discourage dishonest trading. This will level the playing field for all the business players in Singapore. Unethical tactics used by black sheep hurt others and consumers. By weeding out the black sheep who give the industry a bad name, the entire industry can grow. This is one way in which the Consumer Protection (Fair Trading) Act will benefit both consumers and businesses. Businesses do not have to worry about the Act as long as their conduct is legitimate and their practices above board. In addition, if business practices are more transparent, customer's confidence will increase and, in turn, businesses will grow.

Second, while a consumer protection law provides protection, it has to be complemented by consumer education. While a Fair Trading Act provides the legal framework to protect consumers, it alone is not sufficient. For the law to be fully effective, there has to be consumer education so that consumers are aware of their rights and legal remedies should they fall victim. In this regard, CASE will actively pursue an education programme on the Consumer Protection (Fair Trading) Bill. I hope MTI will give full support for such an educational drive. Further, our consumers are our eyes and ears on the ground. They can alert us to businesses that break the law.

They can help us to be vigilant. CASE plans to explore how

we can tap on the vast consumer network to make the law more effective.

Sir, over the years, CASE has established sound working relationship with several business associations. We believe that we can continue to work together with businesses while protecting consumer rights at the same time. Such partnerships provide the foundation on which we can work with business associations when the Consumer Protection (Fair Trading) Act is in place. I would like to stress that with the new legislation the business associations can play an important role in educating their members and working with their members to ensure that their practices do not break the law. CASE hopes to see more trade associations take initiatives to put in place measures to self-regulate and we are prepared to work even closer with them to achieve that, eg, the CASETRUST scheme can be expanded. The scheme provides an avenue for business to voluntarily set consumer policy and adhere to minimum business standards. This will complement the new Act in a very meaningful manner.

At this point, Sir, I would like to raise the following suggestions for MTI to consider amending the proposed Act:

1. On Injunction Proposals Review Panel, it is noted that there is no provision as to how long it is allowed for the Panel to make the endorsement. There should be a time frame, perhaps not more than one month, for the Panel to make a decision once the matter is referred to them.

2. In the first draft of the Bill put up for public consultation by MTI, the Bill covered personal credit. Many members of CASE felt that personal credit should still be included in the scope of this Bill.

3. There is now no provision protecting CASE volunteers from being sued. The Bill should provide similar protection to CASE as given to the Review Panel in clause 10(10) of the Bill.

4. The provision on limitation action has been redefined. We are happy about that. However, CASE is concerned that the time taken for mediation or other dispute resolution mechanism to take its course will eat into the one-year time limitation period.

Sir, today I am very happy to speak in support of the Second Reading of this Bill. It could not have been timelier. The proposed Act will bring about significant changes to the business and retail landscape. It will bring about changes in both consumer behaviour and business practices. These changes are for the better. I am confident that we can work together - CASE, business associations and the Government - to make the implementation of this legislation a success and make it work for consumers. It will bring about a more consumer-friendly environment and will make Singapore a better place to shop and to do business.

Sir, I support the Bill.

Mr Deputy Speaker, first I would like to say that I support this Bill as it represents a good development in the Government's efforts to provide better protection to consumers against unfair market practices. There is now a mechanism which consumers can invoke to seek redress against the whole plethora of unscrupulous acts on the part of manufacturers, suppliers and retailers. However, if the objective of this Bill is to be met, there must be meaningful and workable provisions that will help consumers to seek redress and to prevent unfair practices on the part of businesses. Reading the Bill, however, gives me the impression that consumers

will continue to face difficulties in protecting themselves against unfair practices. In this regard, Sir, I have three short specific points to raise.

Under the Bill, consumers can pursue their claims under the Small Claims Tribunal. However, the value of the claim must be below $10,000 or, by agreement, $20,000. This limits the type of claims that consumers can bring without a huge cost burden to themselves. Moreover, there is also a limit on the types of claims that the Small Claims Tribunal can hear as the jurisdiction of the Small Claims Tribunal has not been expanded. Clause 7(2), for instance, clearly stipulates that the Small Claims Tribunal does not have the jurisdiction to hear any action relating to a hire purchase agreement, a time-share contract or rental or sale of immovable property. So, Sir, a consumer who was made to purchase furniture, through some unfair practice for instance, will have to go to the civil court to seek redress even though the claim may only be a few hundred dollars. And this consumer, as he is buying something on hire purchase, is obviously a consumer who can ill-afford to bring the matter to court through normal civil litigation. To me, Sir, these restrictions limit the effectiveness of the Bill in helping consumers.

The second point, Sir, which I wish to raise is with regard to the efficacy of the process stipulated under the Bill for the specified body to stop unfair practices. Under clause 9, the specified body can seek a declaration and an injunction from the High Court or District Court to prevent a supplier from engaging in unfair practices. However, the specified body can do so only after obtaining an endorsement from the Injunction Proposals Review Panel. In my view, if this procedure is followed, by the time the specified body makes the application to the Panel and then gets an injunction from the Court, the damage would already have

been done, or the supplier could have stopped the unfair practice or even removed all evidence of such practices. So I feel, Sir, that the procedure is time-consuming and cumbersome and will not help in stopping unfair practices.

A related and final point, Sir, which I wish to raise is with regard to the provision for a specified body to pursue actions against suppliers for unfair practices. It is unclear, Sir, how the specified body will be appointed and the effectiveness of such a mechanism, although powers have been given to the Minister to prescribe regulations for this purpose.

The point on whether there is a need to have a fully-funded fair trading agency, Sir, has been raised before. I think there are merits to this argument, as the experience in the United Kingdom, with the establishment of the Fair Trading Office, has shown positive results. We need the body, Sir, that would be able to act quickly and is impartial and authoritative. Ensuring that there is an effective body to deal with suppliers who indulge in unfair practices, is to my mind, part of the critical framework to ensure that the objective of this Bill is achieved.

Sir, save for those comments, I fully support the Bill.

Resolved,

That the proceedings of 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 Deputy Speaker, a few years ago, I was in the United States and telephoned a number of car rental agencies to ask about their rental rates. After enquiring about the rates with the receptionist of a particular company, I thanked her and said I would consider her quote and would call her again when I had decided. She immediately responded that if I could confirm the reservation then and there, she would throw in a $20 petrol voucher into the package. The company knew very well that once they lose that contact with me, a potential customer, the chances of making the sale are reduced drastically. But, if I am influenced by the petrol voucher and succumb to the selling tactics, accept the offer and later regret my decision, should I be entitled to complain?

Sir, on the other hand, compare that to a situation I came across in our Orchard Road Lucky Plaza. I had a foreign visitor and she wanted to buy a video camera. I recommended her to a friend who sold consumer electronics and she bought a Sony videocam for $1,500. That was the best price my friend could offer her. The next day, while she was shopping in Lucky Plaza, she saw the same model of video-camera in the shop window and asked for the price. The man straightaway quoted her $1,400. Of course, she was upset, called me and complained that my friend had cheated her. She said the walk-in opening quote, even before bargaining, was below what she had paid for. I called my friend and asked whether he had over-charged. He told me that if I could buy the same video-camera for $1,400, he would gladly buy it from me. So, the next day, I went with my tourist friend to that Lucky Plaza shop. True enough, when I asked the shopkeeper, he quoted me $1,400. But when we said we were interested and would like to buy that camera, the shopkeeper said the model we wanted

was an old model and tried to persuade us to buy another model but of a different brand which he could offer us for the same price. But when we insisted on the Sony one, he said he had no stock in the shop and had to order from the agent which could take 3 days. When we said we could wait, he warned us that at that price, the camera would not come with any warranty.

The sales tactic is obvious. Many tourists go shopping for a good price. They know what they want to buy and go around many shops looking for the best price. So, these shopkeepers quote the enquiring tourist a very low price on the item that he is looking for so as to entice him into the shop. After that, they persuade him to buy something else that is inferior but which would give the shop a fat profit. Now, if the customer finds that he has been over-charged, could he complain?

Sir, there is a fine line between a bad bargain and an unfair bargain, and the difficulty is where to draw that line and where to set the balance. This Bill is a good start and seeks to make that line clearer as to what is to be considered undesirable trade practices. This Bill is a result of many years of study, initiated by the Consumers Association of Singapore, several Members of this House and the Ministry of Trade and Industry, into the feasibility of having fair trading legislation in Singapore. Sir, it is a timely one. This Bill, when passed will further enhance consumer protection as well as complement existing legislation such as the Multi-level Marketing and Pyramid Selling (Prohibition) Act and the Multi-level Marketing and Pyramid Selling (Excluded Schemes and Arrangements) Order 2000.

However, Sir, I have a number of questions on the Bill. First, I would like to ask how will the Act be administered and who will administer it? We should

not look to CASE alone to monitor fair trading for three reasons. The first is that the term "fair trading" compels us to address both the interests of the business and the consumer to bring about better economic performance and an improved marketplace.

The second reason is that CASE is primarily concerned with the interest of the consumer, not the supplier.

The third reason is that CASE is a non-profit organisation dependent on grants, sponsorship, donations, volunteers and members' subscriptions. It does not have the same clout as a Government body. In places like the UK, Melbourne, New South Wales, Queensland, there are Offices of Fair Trading set up by the government that ensure compliance and enforced legislation. For instance, the New South Wales Office of Fair Trading safeguards consumer rights and advises traders on fair and ethical practices. In addition, it investigates unfair practices and provides a licensing system. Will there be an official Government body that will be able to administer the new Act? An Office of Fair Trade set up by MTI can look into the interests of both businesses and consumers. It can work together with CASE, Singapore Tourism Board and various other bodies to provide information, advice and education. It can be in a better position to ensure due compliance, conduct market studies, fine-tune and improve business-consumer confidence.

Secondly, the First Schedule lists the transactions excluded from the Bill. I note that the professions, such as legal services, medical practices, accountancy, and other professional services, are not excluded from the application of this Act. These professions are already regulated by their own respective governing statutes and have their own governing bodies and rules. For example, any

complaint regarding the conduct of a lawyer can be brought up to the Law Society who will investigate and, if found to be true, has the power to censure and even disqualify the lawyer concerned. Therefore, including such professions in the Consumer Protection (Fair Trading) Act would lead to duplication of channels and give the consumer the right to seek remedies by complaining to one governing body or to the other, and I think this is onerous on the professions and undesirable in general.

Thirdly, the Bill provides a framework for consumers to have civil remedies. However, we all know that prevention is better than cure. First and foremost, I agree with Mr Yeo Guat Kwang that the emphasis should be on the education of both the consumers and suppliers. Hopefully, education on fair trade practices will lessen the likelihood of time-consuming and potentially expensive disputes.

Such education will also stretch beyond legal rights and remedies. The recent publicity of e-mail and time-share resale scams show that consumers will benefit from some lessons in business savviness so that they will not fall prey to unscrupulous dealings of deception. Legislation may help consumers get their money back but education will help prevent the loss from happening in the first place.

Sir, the education process should also not leave the suppliers out. If the suppliers are equipped with a thorough knowledge of their obligations under the new legislation, there will be a win-win situation for themselves, the consumers and the economy.

Fourthly, CASE is working to expand its mediation centre in anticipation of a greater need for mediation once the Bill is enacted. There may be a slew of disputes that may seek mediation. Will the

mediation centre of CASE alone be enough to serve the function? What will MTI do to encourage the development of alternative dispute resolution mechanisms, and how swiftly will this take place?

Fifthly, with regard to the cancellation of time-share and direct sales contracts, I would like to ask if a cooling-off period of more than three days, excluding Saturday, Sunday and public holidays, will be considered. For the purpose of comparing the duration of the cooling-off period, the New South Wales Door-to-Door Sales Act allows for a cooling-off period of 10 days, while the UK Consumer Credit Act provides for a cooling-off period of five days. After entering into a transaction, a timeframe of the contemplated three days, excluding weekends and public holidays, for the consumer to consider his purchase, find out more about the transaction, perhaps seek some advice and go through the motion to cancel the contract seems a little short. In fact, the Code of Ethics and Conduct drawn up by the Direct Selling Association of Singapore requires its members to give the consumer a 7-day cooling-off period to cancel the contract without penalty. Sir, for practical reasons, I feel that the present Bill should allow for a cooling-off period of at least five days, excluding weekends and public holidays.

Sir, lastly, I am not sure about the rationale for imposing a monetary cap of $20,000 on the value of a claim for unfair practice under this Act. The reason cited is that this Act is intended to protect the small consumers. But, if a supplier uses a trade practice that is specifically cited in this Act as errant and unfair to secure a sale in a consumer transaction, no matter how large the value is, surely he should be held accountable. If a consumer entered into a consumer transaction, eg, he bought a very expensive watch. as a victim of the unfair trade practice of the supplier, and that

unfair practice is covered by this Act, but not under any other existing criminal laws or statutes, what remedies would he have against the supplier? In other words, if the supplier's malpractice falls within the Penal Code, the Unfair Contract Terms Act, the Misrepresentation Act or other existing laws, the customer has the right of restitution against the supplier no matter how small the value of the claim. But if the unfair practice is not covered under any existing laws other than this Act, and the value of the claim is above $20,000, the customer would then not have any recourse against the supplier, whether under the Consumer Protection (Fair Trading) Act or any other existing laws.

Sir, I hope the Minister will take the above comments into consideration. I support the Bill.

Mr Deputy Speaker, Sir, I rise in support of the Bill.

The proposed Consumer Protection (Fair Trading) Bill marks a significant step forward for both consumers and businesses as it protects both consumers and businesses against unconscionable conduct. It will promote fair trading in our marketplace where consumer transactions can take place fairly between consumers and businesses. The Bill will provide added protection to vulnerable consumers who, in the past, had little protection against unfair business practices.

Many consumers, especially the elderly, illiterate and children, had fallen prey to various scams in Singapore resulting in much financial loss. Some had lost their life savings to investment scams or other unconscionable practices of businesses. At the same time, good businesses are also losing out to the "cowboys" who are undercutting them, as these cowboys often do not have proper business infrastructure or marketing

costs. As such, some good businesses also suffer an "image problem" when grouped under the same industry as these cowboys. For example, industries which receive many complaints of unfair practices include pyramid selling, time-share, renovation, telecommunications, door-to-door sales, travel, furniture, motor vehicle, electrical, investment schemes and many Internet scams.

All these are set to change with this win-win piece of legislation which, it is believed, will bring in a third win to the Government, as the legislation aims to weed out "cowboys" and tackle unconscionable behaviour head on resulting in the creation of a fair trading marketplace in Singapore. The Act will also boost confidence among consumers, especially tourists, who come from countries where Fair Trading Act exists such as the UK, US, Australia or New Zealand. Consumers no longer lament that there is a lack of teeth for them to bring unconscionable traders to the book. For businesses, it would mean that they can now be assured that there will be a more level playing field to conduct their businesses in Singapore. This may further encourage more bona fide businesses to enter the marketplace and add more vibrancy and diversity in Singapore.

Sir, while the Act has given teeth to consumers, I am not sure whether consumers will be able to bite and seek justice against unfair trade practices. I understand that the Ministry will continue to encourage greater consumer responsibility through the principle of caveat emptor. But, we must always understand that unconscionable traders are increasingly using more sophisticated means to con consumers.

Sir, let me cite two examples of scams from this book Little Black Book of Scams, published by the working group for the Ministerial Council on Consumer Affairs, Australia. Example 1, I quote:

"Hello, this is Jim from ABC bank. We have had trouble with the bank's computer systems, so to protect your funds we are going to transfer all your money to a special bond account. In order to transfer the money I will need to get your bank account details and a verbal authorisation to transfer the funds."

Example 2, I quote:

"Hello, this is Bonnie from Smatercard. In order to make your credit card compliant with our new system we are going to send all our customers a sticker that you will need to affix to your card. So can I just have your credit card number for verification?"

Sir, unfortunately, these common scams are not covered in this Bill and consumers will have difficulty obtaining redress under such circumstances.

Clause 8 of the Bill empowers any specified body (to be appointed by notification in the Gazette by the Minister) to enter into a voluntary compliance agreement, as it has reasonable grounds of unfair trade practices. May I ask the Minister what are the criteria for appointing this specified body and whether the specified body will be a neutral and independent body that will help resolve the unfair practices between consumers and businesses? Is there any cost involved in entering into such an agreement? Furthermore, is the specified body empowered to take any further action against the unfair trader who refuses to enter into the voluntary compliance agreement?

Sir, in practice, this arrangement is not effective in weeding out unfair practices. Very often, traders who engage in unfair practices would not enter into such an agreement. Based on CASE's experience in mediating consumer disputes, it is often the good businesses that will respond to such calls to resolve disputes. "Cowboys" often disregard CASE's call to

seek redress or resolve the disputes. Thus, I hope the Minister can assure the House that this "voluntary compliance agreement" can weed out unfair trade practices in Singapore.

Clause 12 of the Bill also specifies limitation periods for actions under the Act. Although one year may seem to be a reasonable period, there are many instances where the quality of a product can only be tested through usage and time. For example, water-proofing for toilets, material used for sofa infills, car parts in concealed locations of car engines. The majority of consumers will have little knowledge till the failure of these components and thus suffer consequential losses. Although the Bill states that the starting date may be postponed till the earliest date when the consumer might reasonably have knowledge that the supplier had engaged in unfair practice, I feel the onus should rest on the supplier to provide evidence that he has made correct and transparent representation of his product to the consumer during the business transaction. Otherwise, the protection of consumers will be reduced by this limitation period.

Sir, finally, I would like to urge the Ministry to seriously consider setting up a Fair Trading Office to enforce this Act. Without a Fair Trading Office, it is like having traffic rules without traffic police. Experiences from many countries with Fair Trading Act have shown that it is vital to have an enforcement body, which is empowered to take action against unconscionable traders. The presence of a Fair Trading Office serves as a good deterrence against unfair trade practices. It also keeps a close watch on potential "cowboys" in the marketplace. The Act must be more proactive to avoid disputes in our marketplace instead of focusing on consumer protection and redress. To

make Singapore a fair trading marketplace, we must have a comprehensive set of fair trading legislation, an effective enforcement agency, good business practices and a well-informed consumer base.

While the Bill further enhances consumer protection in Singapore, I am concerned that vulnerable consumers, such as the elderly, illiterate and children, may need further protection. The Ministry must provide more resources to constantly educate and update consumers to make more informed choices and avoid scams.

Sir, I support the Bill.

Sir, I welcome the Bill as it provides a first comprehensive set of rules as well as practices which oblige traders and consumers. I, however, want to cover three main points on the Second Schedule which specifies a list of unfair practices. They relate to (1) overcharging, (2) representation, and (3) quality of goods and services delivered. For some of these categories of overcharging, I think the rules and regulations for certain trades may be difficult to judge. Specifically, as has been mentioned just now, in areas of professional services, eg, doctors or lawyers, they have their own professional bodies. If there are cases of complaints about overcharging by doctors/GPs and lawyers, then there may be problems in trying to figure out the quality aspects of such services, so that judgment on their fees and so on may be difficult. In cases like these, what happens?

Another example is that many people would have experienced charges of service by plumbers. It varies. I personally have experienced plumbers who charged me $100 for 10 minutes of service. That kind of situation, I think, is quite obvious. There again, if you want

to prove it, I am not sure whether the existing process in the Small Claims Tribunal would allow for this. I hope the Minister would want to consider the suggestions brought forward by many of my colleagues about policing by the Fair Trading Office, which could help patrol some of these practices.

The existing proposed mechanism of the Small Claims Tribunal (1) and (2) specified body approach

does not seem to be very clear to me how one, through the Small Claims Tribunal system, would be able to effect this claim. Two is through a specified body, and through the specified body getting the Injunction Proposals Review Panel to work.

I agree with the Member of Parliament, Mdm Halimah, just now that the approach to do it must be simple enough so that the effect of the action is felt. If the procedure is too difficult or too long-winded, then the efficiency and effectiveness for consumers to complain and to get the results of the action will be difficult.

I want to clarify one more point. With regard to some of these market shop operators who sell financial futures or whatever, what is the recourse for consumers who fall prey to these practices, and what are the resources of claim that they have? Very often, this kind of financial scams or financial schemes which are marketed by cowboys, or what we call bucket shop operators, may actually cause more damage, and $20,000, as they claim, is admissible under this Consumer Protection (Fair Trading) Bill.

Finally, I would want to compliment the Ministry for coming up with this Bill. I can agree it is difficult to administer. But the first step is being taken. For many big retailers of brand names in Singapore, I do not think that there is a problem to comply. For a lot of smaller operators, ie,

market shop operators, I think they will have to really start cracking. But even for many retailers or suppliers with established names, they will have to really think about some of the consequences of the claims that they make, the discounts that they promise and the quality of their goods. And I think that in that direction, the Consumer Protection (Fair Trading) Bill will let them take more considered actions to even improve further.

In general, I support the Bill.

(In Mandarin): Mr Deputy Speaker, Sir, I am a consumer myself. In my many years as a Member of Parliament, I have come across a lot of cases where consumers were victimised by unscrupulous traders with unfair practices. Yet there is hardly any law in Singapore to protect our consumers. The only thing they could do is to go to CASE. Under pressure from CASE and fearing adverse publicity, some of these errant traders may compromise and pay some damages. Some house-owners who have refused to pay their contractors because the renovation work was not carried out according to the agreed conditions were sued by the contractors, and ordered by the court to pay damages to the contractors.

Thus, it is necessary for some legislation to be enacted to protect the consumers. This Consumer Protection (Fair Trading) Bill before us is indeed a very timely piece of legislation, I am fully in support of this legislation.

The new law is to provide for the victims of unfair practices to claim against the errant traders and to prevent these traders from perpetrating the unfair practices. But, the definition of "unfair practices" under this Bill is quite narrow, as it covers only deceit, misleading, and cover-up acts. Unfair trading should include other types of transaction where

the consumers are visibly placed in a disadvantaged position.

First, the banks, credit card companies, insurance companies or even big electrical shops often practise forced selling, and mislead their customers into signing some lengthy contracts printed in grey colour and using very small print. The consumers were asked to sign those documents without much time in digesting the contents and under some rather suspicious conditions. Once the contract is signed, the unsuspecting consumer will have to honour the terms of the condition, whether they like it or not. In my view, this is an unfair transaction for the consumer.

Secondly, the parking coupons, cash cards and ez link cards which we use are also examples of unfair practices. All these coupons and pre-paid stored-value cards are the means deployed by their respective operators to take advantage of the motorists and commuters. They are operated under a monopoly, and cater mainly for the convenience and easy administration of the operators. There is no law to compel them to pass on the savings from these devices to the consumers. In parking, the motorists are made to do the work for the car-park attendants. The motorists have to tear the tabs in the coupons to indicate the time of commencement of their parking. When the wrong tab is torn, the coupon is immediately invalidated, and no refund on the unused coupon will be entertained. If a mistake is made on the time or date on the coupon, the consumer has to face the punishment of paying car parking fine. When the parking rates are adjusted, the old coupons showing the old rates will no longer be valid if he does not exchange the old coupon for a new one. Coupon-parking is a device aimed at cutting car park operation cost for the URA and the HDB. But the savings are never passed

down to the consumers. Consumers are doing the job of the car-park attendants, free of charge, and any mistake made in the process will render the coupon invalid, and they have to face punishment if they make a mistake and they also will have to suffer the loss incurred if the coupons become invalid. To me, this is a form of unfair practice!

In the case of cash card and the ez link card, consumers have to pay upfront and store the value in the cards. According to my estimate, the total value stored in all these cards in circulation in Singapore is more than $100 million. The operators are getting all the cash, free of interest. On top of it, they save on labour cost, but what do the consumers get? The operators do not pass on the benefits to the consumers. Take the ez link card, for example. The consumers are asked to pay for the cost of the ez link cards. For every card they purchase, they have to pay $5. That means the consumers have to pay EZ Link in helping the MRT and bus companies to save on their operational cost. I think this is very unfair. If the card malfunctions, the consumer loses all the value stored in it, as the card company will confiscate all the remaining money stored in the card. How does this differ from an act of daylight robbery? On one occasion, when I put my trousers in the washing machine, I forgot to take out the cash card from the pocket. The cash card was damaged. I filled up an application form and sent my cash card, together with the form, to the cash card company. The company never responded and the cash card, together with all the remaining money stored in it, was gone forever. The cash cards and ez link cards are designed for the benefit of the companies and it is unfair for the consumers to pay for the cost of the card and lose the money stored in the card, if it should be damaged.

All these instances which I have mentioned are not covered by this Bill. I

hope, and I believe, that this law will soon come up for review, and I hope that those unfair practices which I have illustrated would be covered in the new amendment Bill.

There is no provision in the Bill to punish those traders who are involved in unfair practices. If these unscrupulous traders continue to indulge in this kind of unfair practices, should not they be punished? Otherwise, they will just simply ignore the law and do as they please.

While I fully support the Bill, I hope that the authority will consider the points that I have mentioned, and incorporate some provisions in future amendment Bill to deal with such unscrupulous traders.

Resolved,

That the debate be now adjourned. - [Mr Mah Bow Tan].

Resumption of debate, what day?

Tomorrow, Sir.

So be it.

Mr Deputy Speaker, Sir, I beg to move,