Hansard, 2004-02-06

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: Column: 257 Name From (2004) To (2004) Mr Charles Chong 08 Jan 10 Jan 21 Jan 24 Jan 25 Jan 28 Jan Mr Arthur Fong 11 Jan 19 Jan Mr Lee Hsien Loong 11 Jan 18 Jan 26 Jan 28 Jan Dr Amy Khor Lean Suan 12 Jan 15 Jan Mr Inderjit Singh 12 Jan 18 Jan 29 Jan 31 Jan Mr S Iswaran 12 Jan 17 Jan 02 Feb 06 Feb 23 Feb 27 Feb Mr Ong Kian Min 13 Jan 16 Jan 09 Feb 13 Feb Dr John Chen Seow Phun 14 Jan 17 Jan Dr Ong Chit Chung 15 Jan 15 Jan 11 Feb 13 Feb 23 Feb 25 Feb Mr Gan Kim Yong 16 Jan 18 Jan 04 Feb 05 Feb BG George Yong-Boon Yeo 19 Jan 21 Jan 09 Feb 10 Feb Prof. S Jayakumar 19 Jan 20 Jan 29 Jan 31 Jan 10 Feb 21 Feb Assoc. Prof. Koo Tsai Kee 21 Jan 25 Jan Mr Tharman Shanmugaratnam 21 Jan 31 Jan Mr Chan Soo Sen 22 Jan 25 Jan Mr Othman Haron Eusofe 22 Jan 25 Jan Mr Leong Horn Kee 24 Jan 28 Jan 02 Feb 15 Feb Dr Lily Neo 25 Jan 28 Jan Assoc. Prof. Dr Yaacob Ibrahim 25 Jan 09 Feb Dr Vivian Balakrishnan 28 Jan 28 Jan 02 Feb 04 Feb Dr Wang Kai Yuen 01 Feb 06 Feb Mr Lee Yock Suan 03 Feb 05 Feb Mr Abdullah Tarmugi 04 Feb 04 Feb Mr Davinder Singh 06 Feb 06 Feb Mr K Shanmugam 06 Feb 06 Feb Mr Matthias Yao Chih 06 Feb 08 Feb 13 Feb 17 Feb Dr Michael Lim Chun Leng 06 Feb 08 Feb Mr Tan Soo Khoon 06 Feb 06 Feb RAdm Teo Chee Hean 06 Feb 13 Feb Mdm Cynthia Phua 09 Feb 11 Feb Mr Wee Siew Kim 09 Feb 12 Feb 13 Mar 17 Mar Mr Hawazi Daipi 10 Feb 21 Feb Dr Tan Cheng Bock 14 Feb 24 Feb Mr Mah Bow Tan 15 Feb 17 Feb Dr Warren Lee 24 Feb 29 Feb 09 Mar 22 Mar

ABDULLAH TARMUGI Speaker Parliament of Singapore

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

4th February,2004 (1) Human Organ Transplant (Amendment) Bill (2) High Court (Admiralty Jurisdiction)(Amendment) Bill ABDULLAH TARMUGI Speaker Parliament of Singapore

[Mr Speaker in the Chair]

1. Dr Amy Khor Lean Suan asked the Minister for National Development if he will give an update on (i) the precautions taken and measures that have been put in place to keep the bird flu virus at bay; and (ii) the impact on consumers' demand for poultry products as a result of the ban of imports from affected countries.

2. Dr Amy Khor Lean Suan asked the Minister for National Development if he will state the possible impact of the bird flu virus that is currently affecting many Asian countries on our local economy.

Mr Speaker, Sir, I would like to inform the House that I will be making a Ministerial Statement later on on the Avian flu which will address both Dr Amy Khor's Question Nos. 1 and 2 in greater detail. I will be happy to take questions from Members after that.

3. Dr Ong Chit Chung asked the Minister for Foreign Affairs what is the outcome of the recent visit of the Malaysian Prime Minister to Singapore and the discussions that took place between both sides, in particular, how does it impact Singapore-Malaysia relationship.

Mr Speaker, Sir, the visit by the Prime Minister of Malaysia Abdullah Badawi on 12th January 2004 was his introductory visit, in keeping with the ASEAN tradition of such introductory visits. PM Abdullah, of course, needs no formal introduction as PM Goh and many other Singapore Ministers have known him for many years.

Being an introductory visit, it was not expected that both sides would have substantive discussions to resolve any outstanding issues.

However, PM Goh and PM Abdullah did use the opportunity to have frank and friendly exchange of views on the state of bilateral relations. They resolved to put bilateral ties back on the right track. They agreed that good relations are important, not just for the benefit of Singapore and Malaysia, but also for ASEAN, and that both sides should explore ways to maximise the common areas in order to strengthen our cooperation.

Members will recall that at our sitting on 5th January 2004, I said that there are deadlocked issues from the old era of Dr Mahathir which both sides will have to address and address them in a way that does not reopen the acrimonious paths which we have travelled previously. In the new era, we have to start a new chapter in bilateral relations without being saddled by the deadlocked issues of the old era.

When they met on 12th January, the two Prime Ministers also discussed how to deal with these deadlocked issues. I can do no better than recall what PM Goh said at their joint press conference:

"I told him frankly how I saw we could move our relations forward. I've been at this for many years now, discussing issues with Prime Minister Mahathir, and over the years, the issues which were discussed as a "package" and later on as individual items outside the package had ended up in what I told him as "dead knots". It's like Gordian knots; you can't untie them. So I suggested that maybe for the future, we should refer these "dead knot" issues to third parties to arbitrate or to adjudicate. Then we can look forward to co-operation in many areas and if there are new issues, we will try and resolve them before they become tied in knots which we cannot disentangle.

But Prime Minister Abdullah Badawi prefers that we give it another try. He would like to offer new ideas, he wants to think out of the box, to see how we can resolve the issues. Basically, he prefers discussions before we move them to third party. I listened to him. I told him that I'm agreeable to his approach if he can come up with something that we can consider. So that's the agreement that we have. Let's try and discuss and see how we can resolve the issues and then, if we can't resolve them, both of us will be alert to the danger of tying ourselves in knots again. So, if we can't resolve the issues, we will recognise (it) and then, of course, we will in that point of time refer them to third parties."

Mr Speaker, Sir, in other words, it is Singapore's preference that these issues are referred to third party settlement so that we can move forward with our bilateral relations without being saddled by them. However, since PM Abdullah wanted to attempt another effort at talks, PM Goh agreed.

The understanding therefore is that

PM Abdullah will revert to PM Goh, at a future date, with specific proposals for PM Goh to consider. As PM Abdullah himself said at the Press Conference on 12th January 2004, "€¦then I will come back with some very, very specific issues and some suggestions on how we can resolve these issues".

It was also agreed that these proposals will be first discussed at the Prime Ministers' level, and as Foreign Minister Syed Hamid said recently, "€¦it is up to us [Malaysia] to make our proposals in each issue to find ways to resolve them individually. The leaders will consult each other first and once they have come to some agreement, the officials can come in".

Sir, both Prime Ministers, however, were realistic and agreed to be alert to the problem that if in the process of such discussions, we could not untie the dead knots then, at that point of time, we need to find ways to move forward and refer to third party settlement. And again, I quote from Mr Syed Hamid who said: "We want to avoid dead knots that can harm efforts by Prime Minister (Abdullah) to revitalise ties with Singapore€¦. If no agreements are reached, we will seek third party help. We do not want to stoke controversy."

Sir, this is where matters stand. We look forward to receiving PM Abdullah's proposals on how to resolve bilateral issues and how to move bilateral relations forward.

On another matter, both Prime Ministers stressed the need for greater interaction and contacts between the Ministers and officials from both sides. They agreed that the inter-Ministry games should be resumed. Members will also have read that PM Goh, DPM Lee and several Ministers from Singapore attended the Open House in Johore Bahru at the

invitation of PM Abdullah, and the following day, PM Abdullah and his Ministers came down to Singapore for a social visit.

If I may sum up, these recent events have generated much goodwill and have created a conducive atmosphere within which we can discuss future bilateral cooperation as well as tackle substantive issues.

Sir, Prime Minister Abdullah made reference to resolving some issues first when he said, "We have to pluck some low-hanging fruits and deal with it before the musang comes and takes them away." Can the Minister comment on this approach and what are these low-hanging fruits?

Sir, I do not wish to speculate on what are the "low-hanging fruits" that Prime Minister Abdullah referred to. I prefer to wait till Prime Minister Abdullah reverts to Prime Minister Goh with specific proposals.

And I have said, the deadlocked issues from the Mahathir era are very difficult and, as PM Goh said, are dead knots which are difficult to untie. This is why our preference was to have them settled through third-party settlement.

But since PM Abdullah wanted to give the talks another chance, PM Goh agreed. So in good faith, Sir, we will study the proposals when we receive them. Of course, we can only reach agreement if the proposal is fair and if there is a balance of the benefits on both sides.

If the discussions should make no progress then, as we agreed, we will refer to a third party.

But the important point, Sir, is that both sides want to move on with our bilateral relations. We want to maximise our common areas to strengthen our

cooperation. The outstanding deadlocked issues, in my view, are not the sum total of our relationship. And there is much both countries can benefit from good relations. The recent introductory visit and the two social get-togethers have created the right goodwill and atmosphere to give impetus to this effort.

Sir, can I ask the Minister whether our openness to discussions is based on the understanding of dealing with each issue on its individual merits or are we going back to the package approach, and is water then back on the table for discussion?

I would rather not speculate. As we have heard, because the issues were so intractable and so difficult to untie and since the package was called off, our position was, let us move forward without being shackled by these issues, and those issues, let us refer to third party. But PM Abdullah said that he would prefer to give the talks another chance. Now, what he has in mind, we will have to wait until his proposals come forward.

Sir, I would like to ask the Minister if the Malaysian side has formally raised the issue of the now preferred straight bridge on our side of the Causeway.

They have not raised the issue of the bridge formally with us. I think Members would have read many statements in the press and in the media by various quarters. I think it is counter-productive to speculate on these reports as to what they will send us, what they may propose, and so on. In fact, at this stage, I do not even know for sure whether the bridge will be one of the issues that PM Abdullah will raise with PM Goh. We have to wait for the proposals so when they come, when we receive them, we will study them in good faith and give our reply.

But Members will recall that at the sitting on 5th January 2004 I dealt with this issue of the bridge and I reminded the House that when Singapore reluctantly agreed to the demolition of the Causeway and to build our part of the bridge, it was as part of a package deal which covered several issues, including continued supply of water for another 100 years from 2061. But Malaysia called off the package in October 2002 and, as I said then, building our part of such a full bridge along with related CIQ revisions would cost us over $500 million and, furthermore, would also sterilise the use of the land under the bridge. From our viewpoint, the bridge would not be cost-effective compared to the Causeway.

Now that the package is off, we need to know what is being proposed to Singapore that would justify us agreeing to demolish the Causeway, and build our side of a full bridge at such considerable cost.

As I said just now, we will carefully consider the proposals when we receive them. And it follows that in the spirit of win-win cooperation, there can be an agreement only if the proposals are fair and that both sides benefit, and the benefits are balanced.

4. Mdm Ho Geok Choo asked the Minister for Trade and Industry (a) if he will elaborate on the challenges of the "New World" that the Prime Minister referred to in his recent CNN "Talkasia" interview; (b) whether Singapore has embarked on a new economic blue-print or white-paper to meet these challenges; (c) what measures and programmes are being contemplated to inform and educate Singaporeans, especially the workforce, on the opportunities and the threats of the

"New World"; (d) what are the new programmes to foster the growth of local world class companies and will this become our preferred national strategy.

Mr Speaker, Sir, with the end of the Cold War, countries like China and India are re-joining the global marketplace with a vengeance. Technology has facilitated the movement of goods and capital, of people and ideas. With tariffs coming down world-wide, manufacturing for example has become global in nature. For simpler products, China has now become a giant factory for the world. Services are also increasingly outsourced with India becoming a major supplier. Businessmen have to consider different global options carefully before deciding where to invest. Capital has never been more mobile. All this presents Singapore with new challenges, both threats and opportunities. There is no doubt that the competition has become more intense and positioning Singapore well for the New World PM Goh talked about is critical to the well-being of our economy. The Economic Review Committee under Deputy Prime Minister Lee Hsien Loong addressed these challenges, and we debated at length the recommendations in this House last year.

On economic structure, our tax and wage systems are being reformed in a fundamental way to make our economy more competitive. We have been bringing down our direct taxes, liberalising our economy, especially the services sectors, and making the labour market more flexible. Our FTAs help to expand our external economic space. We are promoting entrepreneurship and innovation on a broad front, with particular emphasis given to smaller companies. The education system is

being revamped to prepare our students for the economy of the future. WDA has been formed to facilitate job matching and worker retraining. We are also investing significant resources in R&D and the build-up of our scientific manpower.

We have been highlighting these challenges to Singaporeans through speeches, media campaigns and public forums. However, there is no greater incentive to learn than the pressure of necessity itself. The economic difficulties of the last few years have done more to alter our mindset than any particular publicity exercise. Just recently, NTUC Secretary General Lim Boon Heng told me how workers now welcome overtime work when only a few years ago there were complaints of too much overtime. IE Singapore has reported a significant increase in interest by small Singapore companies in overseas business missions. Many young Singaporeans are now prepared to work overseas. It is right that we are always worrying about the future, because the greatest danger is complacency. We must not let up on our efforts to alert Singaporeans to the new trends in the world.

We have many programmes to foster the growth of world-class companies. These are broadly in three main areas: capability development, market opportunities and finance.

For capability development, IE Singapore helps companies with branding and design and the training of manpower for internationalisation. Smaller companies identified by SPRING to have growth potential beyond Singapore are passed on to IE Singapore. A*STAR, EDB, IE Singapore and SPRING have also come together to provide comprehensive assistance to companies in the areas of innovation, technology development, operations upgrading and overseas expansion under a scheme called Growing Enterprises with Technology Upgrading (GET-Up).

Second, as for access to market opportunities, we have a number of schemes. Let me highlight just a couple of them. The S$30 million iPartners Programme encourages companies to form alliances in venturing overseas. A market leader becomes the anchor company, drawing on board other companies with complementary products or services. SPRING has recently launched the Business Alert Internet portal, which alerts local enterprises to some 90,000 business opportunities worth S$120 billion each year, including information on Government procurement opportunities in the US. Under the US-Singapore FTA, Singapore companies can compete on an equal basis with US companies for tenders of value greater than US$56,000 put out by the US Federal government. In future, this service will also include tenders by the governments of Australia, New Zealand and other FTA partners.

Third, to help companies secure financing for international expansion, the Regionalisation Financing Scheme under IE Singapore offers loans to Singapore companies when they expand their operations overseas. Last year, IE also launched its iFinance Consulting Programme to help companies get professional advice on the financing of their overseas ventures. In addition, the Government is facilitating efforts by private sector players to set up a private equity exchange, which may become an important additional source of finance.

However, our strategy is not to depend only on the success of our local companies. MNCs will remain the mainstay of our economy. We are also encouraging SMEs from other countries to hub in Singapore with some success so far. Our strategy is to develop a strong economy that is knowledge-intensive, creating a range of good jobs for Singaporeans and conducive to the

growth of entrepreneurship, for which we need to be broad-based and well-connected internationally. It is important for us to diversify our risks and not be overly dependent on particular companies, sectors or markets.

Sir, I would like to clarify with the Minister whether that means that our local companies will never become the main preferred economic strategy for Singapore. My second question is: are there any specific programmes that are geared towards preparing Singaporeans' mindset for the new challenges? Much has been talked about in the education industry and in skills acquisition, but is there any specific programme for mindset change? My third question is with regard to enhancing the customer service skills of Singaporean service providers in this new economy.

Mr Speaker, Sir, I do not think Singapore companies by themselves can ever become the mainstay of our economy. We will always need foreign players in large numbers to operate here. That has always been the history of Singapore and I believe that it will remain the basis of the Singapore economy well into the future.

As to efforts to change the mindset of Singaporeans, I believe this is already happening. Among young Singaporeans now, there is a more realistic assessment of where we stand in relation to present and potential competitors in the future. And this is seen in the growing number of Singaporeans who are prepared to work overseas. As I mentioned earlier, more and more Singapore companies are now taking part in overseas missions and sniffing for prospects and opportunities elsewhere.

As for the Member's third question on

specific programmes, I have mentioned some of them. There are others which she can take up during the Committee of Supply.

Mr Speaker, Sir, can the Minister explain why is he not confident that Singapore companies can be the mainstay of our economy? Can the Minister elaborate as to why it cannot be?

This is because of the limitation of our size and population base. We are a city-state. We run a big economy which is far beyond what a population base of three million by itself can support. It is like cities such as London and New York. The economies of London and New York cannot be based on the native population of London and New York alone. So, it is the same for Singapore. And we have ambitions far greater than what we by ourselves can sustain on our own.

5. Mdm Ho Geok Choo asked the Minister for Transport what are some of the new measures and steps that his Ministry is taking to keep Changi Airport a competitive and leading airport in terms of (i) uniqueness; (ii) costs; and (iii) service levels in the midst of growing competition from Asian capitals developing their airhubs and establishing budget airlines.

Mr Speaker, Sir, as I informed hon. Members late last year, my Ministry's goal is to anchor our existing airline partners here, attract new airlines to use Changi Airport, and position Singapore for the long term. These fundamentals have not changed.

Let me describe some of the key measures to achieve these objectives. Changi Airport has to maintain and even improve upon its unique "Changi Experience" to its passengers and airlines. Passengers using Changi enjoy speedy immigration and other processes, a lively and bustling shopping mall, friendly service, a wide range of passenger facilities and first-rate infrastructure. Surveys have shown that passengers do value this very pleasant experience. To continue to enhance this "Changi Experience", we will continue to innovate and improve our facilities and services. Terminal 2 (T2), which opened in 1990, is now undergoing its first major upgrading at a cost of some $240 million. The upgrading works will be completed by the end of next year. The construction of Terminal 3 (T3) is on schedule. When completed in 2008 at a cost of $1.75 billion, T3 will provide capacity for 20 million additional passengers in an exciting setting. Plans are also underway for the major upgrading of T1, to revitalise it and enhance the range of services available there. We expect to begin upgrading works at the end of 2005, and to complete them in 2008.

The upgrading of T1 and T2 will rejuvenate these buildings and give them a modern, fresh look with its own individual distinctive character. In addition, the current retail areas will be enlarged and re-configured to offer passengers an even wider range of shops and merchandise. They will be given more interesting and appealing shopfronts. There will also be better integration of the shops, F&B outlets and new passenger facilities. All these will give passengers a new and even more interesting and exciting "Changi Experience". The new T3, with its outstanding architectural and interior design, will also provide passengers a brand-new and enjoyable experience in air travel.

Sir, we will continue with our efforts to attract and anchor airlines at Changi Airport. One key factor is our connectivity. Strengthening our connectivity will attract even more airlines to fly here. In the past year alone, Changi welcomed six new airlines, bringing the total number of Changi's airline partners to 69. Our international network has also grown to 150 cities. By facilitating more airlines to build their network to and through Changi Airport, we will also strengthen our status as a regional air hub.

We are also looking at ways to address the needs of low cost carriers (LCCs) at Changi Airport. The success of LCCs hinges critically on their ability to keep their costs low. This, in turn, enables them to keep their air fares low. They do so by doing away with frills. LCCs are a phenomenal success in the US and Europe, and this phenomenon has now arrived in Asia. At home, Valuair and Tiger Airways expect to be flying later this year. To maintain Singapore's position as a regional air hub, we will need to attract not only more of the traditional full service airlines but also the LCCs. CAAS is now studying the feasibility of building a LCC terminal at Changi Airport that will meet the operational requirements of these airlines.

Sir, our efforts to improve Changi's competitiveness focus both on reducing costs and incentivising traffic growth. Last year, we introduced a $210 million Air Hub Development Fund and the SARS relief package which include landing fee and rental rebates to help the airlines through the difficult times. There was also the post-SARS Air Traffic Development Scheme to incentivise the recovery of passenger traffic at Changi Airport. This year, we have put in place a new $40 million Growth Incentive Scheme (GIS) for airlines. This new scheme will operate from 1st January this year to 31st December next year. It will

reward each airline based on its passenger growth, and will be on top of the other incentive schemes or rebates.

Finally, as announced recently, we will be introducing a third ground handling company at Changi Airport. The enhanced competition will improve ground handling services at Changi, and make them more price-competitive. I have just described some of the measures to maintain Changi Airport's status as a leading air hub in the face of the changing, more challenging and competitive environment. These measures are dynamic, and we will continue to evolve them to meet changing circumstances.

At this point, Sir, I would like to declare that I work for SIA Engineering Co.

Sir, what actually is the rationale for the establishment of a third ground handling company? Has the number of foreign carriers or the volume of business activities at Changi grown to warrant the establishment of a third ground handling company? Has the overall business pie grown bigger, or is it the intention to have the three ground handling companies fighting over the same pie? May I ask the Minister: is it a belief that with three ground handling companies, there will be a higher motivation to cut operating costs to survive? If not, would not the existing two ground handling companies have taken the initiative to reduce drastically costs in the first instance when the aviation industry was hit by the downturn last year? Has it been studied that with three ground handling companies, there will be an overall improvement at Changi with better service levels and more attractive pricing for handling of aircraft in Singapore? Will it make Changi a more attractive airport for the operators to fly to? Will there also be a review of the special permission to US carriers to self-handle?

Sir, Mdm Ho asked about the reason for having a third ground handler. As I mentioned very briefly in my reply, it is to ensure that the situation in Changi is more competitive and that the airlines will be able to enjoy better service and, hopefully, better pricing as well.

Sir, Mdm Ho asked whether there has been growth in the passenger load and number of airlines to justify having a third ground handler. Let me bring the hon. Member back to 20-odd years ago, way before her time, when Changi Airport started at T1.

At that time, we only had two ground handlers - today's SATS and CIAS. The passenger traffic at that time was only 8.1 million, compared to 28.9 million in year 2002. She asked whether the passenger load has increased. I would say yes. Since the birth of SATS and CIAS, passenger traffic has more than tripled. In fact, over the next few years, I expect the traffic to quadruple over the 8 million that Changi registered in its first year of business. She asked about the number of airlines. Yes, I am happy to tell her that when we started at Changi, there were only 34 airlines. Today, there are 69.

In terms of cargo, the growth has been phenomenal. When we started in 1981, the cargo volume was only 200,000 tonnes a year. Today, the cargo traffic has gone up to 1.6 million tonnes. That is an increase of eight times. So I would say that the business pie has definitely grown and we expect the business pie to continue growing in the years ahead. I think it would be instructive for me to show the experience elsewhere.

Hong Kong International Airport has a throughput of 27.4 million passengers last year and they have seven passenger handling companies there and three apron handling companies, as well as three flight catering companies. That is in

comparison with our two operators. Amsterdam Schiphol Airport has about 40 million passengers a year. They have four ground handling companies and three flight catering companies. It shows that in Changi, there is plenty of scope for a third operator. The third operator would definitely stimulate the existing two operators to become more innovative, and perhaps come up with new methods of work, improve their productivity and therefore be able to offer a better service and, hopefully, at a better price.

She asked whether we will review the special permission given to US carriers to self handle. Sir, this is part of the bilateral air services agreement that Singapore has with the US and therefore it is something that is entrenched. Although the US carriers have the right, so far, they have not done so because there are other factors involved, such as whether it is more cost-effective for them to do it versus buying services from SATS, CIAS or the third ground handling company that we will be setting up.

Sir, in view of the cheaper alternatives sprouting around us, should not the Minister consider cost reduction as the top priority, rather than simply the upgrading and enhancements as detailed? Also, will this upgrading and enhancements add to the cost for the users?

Sir, if Mr Chia had listened to my answer just now, I did mention that we have embarked on significant cost reductions for the airlines. But, in the first place, Changi Airport is already very cost-effective. Today, Changi Airport is the second least expensive airport in the whole of Asia. So we are already very cost-effective, but we are finding more ways to be even more cost-effective. One of the ways, as I have said, is to make the ground handling market in Changi more competitive. And if the third operator comes in and is able

to stimulate the market and help to reduce ground handling cost, it will make Changi Airport even more attractive.

Mr Chia also asked whether we are spending too much money on enhancements of the airport and whether it will end up costing passengers more. Sir, the situation with regard to the airport facilities is a very competitive one. T1 was built in 1980. T2 was completed in 1990. Between 1990 and now, I think Mr Chia would have realised that many new airports have opened and they are all very modern, very advanced and very attractive. If Changi Airport does not take steps to continue upgrading itself and keep pace with the competition, we are going to be left far behind. So we have no choice but to continue making sure that our facilities and services are tip-top so that passengers would choose to fly through Changi Airport if they have a choice of other airports to fly through.

Will the cost be passed on to the passengers? Sir, as I have mentioned just now, our costs are already kept very low. We will try not to pass on any upgrading cost, but of course, when operating costs are increased, because of manpower cost increase and technology, we may have to pass some of that to the passengers. But, so far, we have tried not to increase our costs to the passengers.

Sir, I would like to ask the Minister whether the Ministry will be opening the position of the third operator to foreign players or is there a plan to set up another Government-linked company as we did in the past.

Sir, in preparation for the appointment of a third operator, CAAS actually went round the world, talking to all the major international players, to alert them to what we are doing and to interest them in bidding for that licence.

Sir, the apparent effect of having three operators is that the third ground handling company will also have its own fleet of equipment. With an increase in the operating equipment and vehicular traffic at Changi, will it not become more hazardous for staff operating at the airport? What measures are being considered to ensure a high level of safety?

I can assure Mdm Ho that all these will be well looked after and that the safety at Changi will definitely be maintained at the highest possible level.

6. Mdm Halimah Yacob asked the Acting Minister for Manpower in view of recent media reports of abuse of workers by some employers, (a) how many workers have filed claims against employers for failure to pay wages or other benefits; (b) how many of these claims were successful and what was the total amount recovered; (c) how many employers have been prosecuted for violations of the Employment Act; and (d) what steps have been taken by the Ministry to enforce the labour laws and prevent abuses and violations.

) (for the Acting Minister for Manpower): Sir, in 2003, a total of 10,232 local and foreign non-unionised workers sought the assistance of the Ministry's Labour Relations Department and filed claims/complaints against their employers for failure to pay wages and other benefits. None were received in the case of unionised workers. This was presumably due to effective

representation on their behalf by their unions.

In the non-unionised sector, a total of 11,321 workers, including those who lodged their claims in 2002, had their cases concluded in 2003. Among these workers, 17% (1,875) of the workers had no valid claims and another 18% (2,078) did not pursue their claims as they were able to reach a private settlement with their employers following consultation with the Ministry, or withdrew their cases for various reasons such as their claims not being provided in their employment contracts or covered by the Employment Act.

Of the remaining 65% (7,368) of the workers, about 60% (4,443) of their claims were successfully resolved by the Ministry and a total of $7.1 million was recovered for the workers. Another 10% (728) of the 7,368 workers had referred their claims for adjudication. The remaining 30% (2,197) of the workers encountered difficulty in securing their payments as their employers were facing cashflow problems or were not successful in their claims as their employers had ceased operations or had become insolvent.

The majority of employers who failed to pay their workers on time heeded the Ministry's advice and made the necessary changes to comply with the law. The Ministry also issues warnings to such employers. If the violation of the Employment Act is serious, the Ministry will consider taking prosecution action against the employers. But employers who violate the law belong to a small minority.

Last year, no company was prosecuted for violation of the Employment Act. Warnings to 279 employers were issued. In 2002, the Ministry prosecuted two

companies for non-payment of salaries to their employees. The Court meted out fines against one company while the other had the charge compounded.

To ensure that the provisions of the Employment Act are complied with, the Ministry adopts the following measures:

Educational and promotional programmes to bring about greater awareness of the law and penalising employers who flout the law to deter other offenders. Generally, employers, especially in the larger companies, comply with the law. Employers who have problems complying with the law are mainly the small and medium-sized companies. Apart from advisories to employers on the relevant provisions of the Employment Act, they are also asked to attend courses on the Employment Act conducted by the Ministry.

Employers who continue to flout the law would be barred from employing foreign workers. This measure is an effective way to deter such employers.

My Ministry also conducts frequent inspections on companies to stamp out any violations of employment terms and conditions prescribed in the Employment Act.

): Sir, the first question is: how long does it take between the time that a worker files a claim and his claim is successfully met, either in terms of adjudication by the Ministry as well as a final payment made to the worker? Secondly, how many inspectors does the Ministry have to do inspection work to ensure compliance with provisions under the Employment Act?

Sir, the Ministry tries to resolve the complaints/claims by employees as quickly as possible. Mdm Halimah surely knows that when we

receive complaints/claims from workers, we will call both the employer and employee to verify the claims. If there is reason for us to believe that the employers have not complied with the Employment Act, we will ask them to comply with it. If, at the end of the process, there is no agreement between the employer and the employee, then, with the agreement of the worker, we can refer the matter for adjudication. It depends very much on whether we get information correctly and quickly from both sides.

Sir, of the workers who have filed complaints, how many of them are foreign workers and how many of them are Singaporeans? Does the Ministry see a trend of employers not being able to pay the foreign workers, especially the foreign domestic maids?

Sir, I do not have the figures as to how many of them are locals and how many of them are foreign workers. As to whether local employers have the money to pay their workers, I think most of them pay their workers promptly and on time. I mentioned earlier that very few employers actually have problems complying with the Employment Act.

I heard the Parliamentary Secretary on the answer given to Ms Ng, but could I just ask the Parliamentary Secretary to give a rough estimate on the numbers? What percentage or what bulk belongs to employees who are Singaporeans and how many are foreigners? The second question that I have is that for the two employers who were prosecuted, what is the status of the employees who were affected? How were they compensated?

Sir, on her first question, I suggest that Ms Mathi file a

question. On her second question on what happens to the workers, they will get their pay. If the employers do not pay up, then the law will take its course of action.

Sir, both of my questions were not answered. My first question was: approximately, how long does it take for a claim to be met, ie, from the time the worker files a claim and, ultimately, the claim is met by the employer?

My second question is: are there sufficient numbers of labour inspectors to do the inspection work? Because the Parliamentary Secretary did mention that labour inspections were done by the Ministry.

My third question to the Parliamentary Secretary would be: how many thousand employers are there in Singapore, and how many labour inspectors are being deployed to do the inspections to ensure compliance with the Employment Act?

Sir, I am sorry I missed the question on the number of labour inspectors. I do not have the figure here. I suggest Mdm Halimah file a question on that.

How long does it take for claims to be resolved? I mentioned earlier that it depends very much on whether we have the information from both employers and employees. What we do is to try to resolve the issues as expeditiously as possible so that the workers, if justified, can get their pay.

Sir, can I also ask the Parliamentary Secretary regarding claims involving foreign workers? What happens if the foreign worker has to be sent back home if his claim is not met or settled yet?

Mr Hawazi Daipi:

Firstly, the Ministry will try to speed up the process of the claim. The employers generally know that they will have to resolve the matter quickly. Otherwise, they will also have to pay more in terms of foreign worker's levy as long as the worker is in Singapore. To answer her question, basically, the Ministry tries to resolve the matter quickly, but that depends very much on whether we have the information from both sides. The worker will remain here to ensure that he gets his pay, but if prosecution is necessary, he will remain here as a witness.

Sir, can the Parliamentary Secretary explain what are the common reasons given by employers for non-payment of CPF, and whether these are the acceptable reasons?

Sir, there are so many reasons why companies cannot pay their workers including their CPF contributions. I would not speculate here. If the Member wants information, we can give him if he files a question.

7. Mdm Ho Geok Choo asked the Acting Minister for Manpower if he will (a) give a status report of the Work Skills Training Programme (WSTP) in terms of (i) the numbers and profiles of jobseekers who have attended the WSTP and (ii) its effectiveness in helping the job seekers change their mindsets, secure employment or pursue other gainful activities; (b) state whether the WSTP purpose of imparting the labour market knowledge and skills to the unemployed and employees of companies and organisations undergoing restructuring is still relevant; and (c) how many job seekers and employees have attended the WSTP in the last three months.

Mr Speaker, Sir, the Work Skills Training Programme (WSTP) was launched in December 2001 to equip Singaporeans with useful job skills that can help them plan their careers, search for jobs effectively and to be able to handle job losses or job changes. A total of 36,601 training places have been achieved under the WSTP for the past two years. Some 1,900 training places have been achieved from October to December 2003. Over 50% of the trainees have secondary and below educational qualifications. About 30% of them are 45 years old and above.

A survey conducted on trainees who attended the WSTP between the period of December 2002 to May 2003 shows that some 42% of professionals and executives found employment after the training, and some 47% of workers in general found employment after the training.

Training for job seekers will have to be customised to the needs of job seekers. For those job seekers who have been retrenched after many years in a certain job and feel that they are not equipped to seek re-employment, work skills such as job search skills and coping with change may help them get started in their job search and regain employment. Those job seekers who already have the necessary job search skills and have the right mindsets may find job related training more useful in helping them regain employment. In recognition of this, WDA has trained the job placement officers in the Distributed CareerLink Network (DCN) of job centres in client profiling and to offer training advice targeted at the needs of job seekers. In addition, the officers attending to the job seekers in the DCN are also trained to provide career coaching and impart to the job seekers work skills such as writing effective resume, interview skills, and understanding the realities of the labour market.

Sir, will the Ministry consider reviewing the place-and-train programme again? Because feedback has it that the present place-and-train programme is actually not reaching out to a segment of the working population that needs more encouragement to change their attitude to acquire skills to enable them to be more employable.

Sir, we will welcome ideas on how we can make it more effective. But based on the figures that we have and the number of people who have benefited from the training, we find that it is quite effective. But if we can have new ideas on how to reach out to those who really need assistance in coping with the changes so that they can be more employable and are better prepared to changes in the world of work, then we will review and see whether it is possible to implement them.

8. Miss Penny Low asked the Minister for Community Development and Sports in view of recent newspaper reports on teenage violence, whether there is (a) a rising trend in teenage violence involving girls; (b) a statistical breakdown of female and male teenage offenders and victims; and (c) a corresponding increase in the helplines and organisations that focus on helping problem teens.

9. Miss Penny Low asked the Minister for Community Development and Sports in view of recent newspaper reports on teenage violence, whether there is any survey or study to ascertain the (i) cause of teenage violence; (ii) income and family profile of offenders; and (iii) relative degree of maternal and paternal care received by offenders.

Sir, can I take Question Nos. 8 and 9 together because they are related?

Yes.

Mr Speaker, Sir, based on the figures of the Police, from 2001 to 2003, 670 male and 86 female juveniles were arrested for violent offences. For the same period, there were a total of 659 male and 983 female juvenile victims of violent crimes. These juveniles are between 7 and 15 years of age.

Reports of such violent crimes tend to be quite sensational. In fact, if Members look at the newspapers, in December 2003 as well as January 2004, there were quite a number of very sensationalised reporting. But it is not correct to conclude therefore that juvenile crimes are out of control. If you look at those reports carefully, about half of these reports are reports of trials of crimes that were committed in 2003 or 2002. In fact, I would like to say that there was a 56% decrease in the number of female juveniles arrested for violent crimes last year as compared to the year before. Therefore, it is definitely not true that crimes involving female juveline delinquents have increased.

On the family profile of young offenders, over 70% of juveniles who are referred to my Ministry for probation come from intact, rather than dysfunctional families. The majority of these juveniles come from families earning a family income below $2,500 per month.

In a study conducted by my Ministry between June 2002 and April 2003, we found that juvenile offenders rated the level of support and supervision rendered by their mothers to be higher than that provided by their fathers.

Juvenile violence can be attibuted to various reasons, and that is why we need a concerted effort by various Governmental bodies, social agencies, community organisations as well as family members to deal with the problem effectively. There is an Inter-Ministry Committee on Youth Crimes (IMYC) chaired by Assoc. Prof. Ho Peng Kee comprising senior representatives from the Ministries of Community Development and Sports, Education and Home Affairs and other agencies, to monitor the youth crime situation and coordinates the programmes of various agencies to tackle this issue. In fact, there are many programmes that have been initiated to tackle and prevent youth crimes. For example, 81 schools initiated the School Community Security Programme which targets at preventing juvenile delinquency. Other measures include the Police-School Liaison System, and the Honorary Volunteer Special Constabulary (School) Scheme.

Also, the Police, together with IMYC and National Crime Prevention Council, developed a Youth-Crime Prevention Roadshow last year. The roadshows were targeted at students and their parents as well as teachers of schools, Institutes of Technical Education (ITEs) as well as polytechnics. Feedback gathered from more than 3,000 students who attended the roadshows indicated that the roadshows achieved the objective of raising greater reflection on crime. For example, 83% indicated that they better understood why youths commonly committed offences, such as simple theft, shop theft and rioting, and an overwhelming 90% recognised the dire consequences of committing a crime.

Although there are many programmes and measures in place to tackle youth crime, I cannot sufficiently emphasise the critical role parents play in instilling

positive values in our youths. Prevention efforts to combat youth violence must begin in the family. Parents who require assistance in parenting can seek help from my Ministry or any voluntary welfare organisation. They can also approach the Family Service Centres near their homes or call the hotline at 1800-838 0100 for assistance. Alternatively, parents can also access the "About Family Life" website at www.aboutfamilylife.org.sg for more information on helping their teenagers cope with peer pressure, disciplining teenagers, parenting, imparting values to and communicating with teenagers.

Sir, I am glad to hear that there is a decreasing trend instead of an increasing trend of juvenile delinquency. But in terms of severity of the crimes, are the crimes committed by juveniles getting more severe?

Sir, I do not know whether I can answer that question with a simple sentence, because what do we mean by "severity of crimes". I can only say that the figures are quite stable. There is no trend to indicate that they are getting more or less severe. There is no untoward kind of tendency that we can see.

10. Dr Amy Khor Lean Suan asked the Deputy Prime Minister and Minister for Finance what is the rationale for the recent relaxation on supplementary cards by the Monetary Authority of Singapore in the light of the recent concern over mounting credit card bad debts and calls for more prudence in spending.

Mr Speaker, Sir, there is no relaxation in the availability of credit to individuals. The recently released regulations on credit and

charge cards preserve the fundamental objective of discouraging Singaporeans from spending beyond their means by curbing the easy availability of consumer credit.

We have removed the limit of two supplementary cards per principal card account. Feedback from card issuers showed that, in practice, the limit has had an unintended effect. Because of the limit, a cardholder who wishes to have more than two supplementary cards tied to his account will need to apply for an additional card from another issuer. As a result, the overall credit available to the cardholder is raised. Therefore, lifting the limit will remove this unintended outcome, while keeping the overall credit limit available to the cardholder unchanged. In any event, a cardholder should exercise discretion when applying for supplementary cards tied to his account, since he is liable for charges incurred by the supplementary cardholders.

We have also allowed a credit or charge card issuer to issue additional cards to its existing principal cardholders without first having received an application. However, there should be no increase in the credit limit granted to the cardholder. For the cardholders' protection, the cardholder must first notify the issuer that he accepts the use of the additional card and its accompanying terms and conditions. Otherwise, the cardholder will not be liable for any amount charged to the card.

Sir, in view of the rising importance of Internet e-commerce, should not lower income earners also be allowed

to own at most one credit card, even if their income falls below the $30,000 minimum? Would the Minister agree with me that allowing lower income earners to have one credit card with only two times the monthly salary credit line is more prudent than having a minimum $30,000 income

criterion but owning many credit cards with many different banks? Should the minimum income qualification not be waived and the maximum amount of cards allowed, based on the income level, be more prudent?

Loong: Mr Speaker, Sir, there are two parts to the question. One for Internet e-commerce, you can do the business without a credit card because you can do it with a debit card. It functions in the same way, except that your account is debited straightaway and there is no credit extended by your bank. And the second question on whether we should not allow lower income individuals to have credit cards and that this is a lower risk than having a $30,000 income individual having many many credit cards, the practical answer is this. We would like to prevent a person from being imprudent with his own money because it gets him into trouble and he has a lot of difficulties, and if we can have him avoid going into debt, I think we save him some trouble for himself. But it is not easy for us to restrict the amount of total borrowing which a person can have because he can borrow from one bank and another bank, one credit card, another credit card source, and even an overseas credit card source. So, what we have said is if you have $30,000 of income, you have one credit. Then, when you borrow on each credit, the credit limit is two months of income. But, we have not been able to find a way to say you are not allowed to get credit from more than one bank.

So, effectively, what we have said is if you have $30,000 of income, we try to make it more difficult for you to be imprudent, but the onus is on you really to look after yourself. If you have below $30,000 of income, then we do not think that the credit card is a wise avenue to open up for this group of people. And that is where we are. It is not an entirely ideal arrangement but it is the best way we have. MPs will know from their meet-

the-people sessions that people who have gotten into trouble because they borrow imprudently are a real problem, and many of them will benefit from our policy.

Suan: Sir, could not the issue of a borrower having too many credit cards and therefore getting into trouble be handled by the credit bureau?

Loong: In principle, it can be done. In practice, we have to look at it. It is quite intrusive and burdensome. We have not yet decided that we need to intervene to this extent. I think if the problem gets worse, we would revisit that question.

11. Ms Braema Mathiaparanam asked the Minister for Home Affairs in view of the reports that Singapore has seen a 120 per cent increase in the number of illegal immigrants apprehended while trying to enter Singapore by sea, (a) what measures will his Ministry put in place to prevent such entries besides placing physical barriers at the Northeast and Northwest coasts of Singapore; and (b) what is the update in the effort to apprehend the traffickers bringing in these illegal immigrants.

Sir, Police arrested 133 illegal immigrants who tried to enter Singapore by sea in 2003 compared to 49 in 2002. As we have stepped up checks at the land checkpoints, more illegal immigrants are now trying to enter Singapore by sea.

This figure may seem alarming, but if we look at the overall immigration offender picture, the situation has actually been improving. Last year, the Home

Team arrested about 11,850 illegal immigrants and overstayers which is 13% fewer than the 13,550 arrested in the year 2002. So, there is a drop. But the numbers are still large and we should not be complacent.

Let me describe the broader strategy that my Ministry has adopted to tackle the problem. Traffickers aid the illegal immigrants by physically conveying them to Singapore in vehicles or boats or by providing forged or tampered passports. This requires our enforcement agencies to be always on the alert at the checkpoints and in our coastal patrols.

Apart from erecting physical barriers at the Northeast and Northwest coasts of Singapore, the Police Coast Guard (PCG) implemented other measures to prevent such entries by sea. It has stepped up the frequency of their coastal patrols, acquired new high-speed patrol boats, and uses advanced equipment such as radar and electro-optical surveillance systems to monitor our waters and to intercept the illegal immigrants.

Our enforcement efforts have resulted in the seizure of 10 boats used by the traffickers last year, which is up from six boats seized in 2002. This has forced the traffickers to adopt desperate measures, such as asking the illegal immigrants to swim across the Straits to enter Singapore.

To detect illegal immigrants being smuggled into Singapore hidden in vehicles, the Immigration and Checkpoints Authority (ICA) conducts visual checks on all vehicles entering Singapore. ICA has also deployed mobile X-ray machines at the land checkpoints to scan cargo vehicles. As a result of the stricter checks, fewer illegal immigrants now try to come in by land. This is reflected in the seizure of 17 vehicles and the arrest of 27 conveyors last year, a significant decrease from the 43 vehicles seized and 51 conveyors arrested in 2002.

ICA has also acquired advanced forgery detection equipment. ICA detected about 1,700 immigration offenders attempting to enter or depart Singapore using forged or tampered passports last year. This is a decrease from the 2,170 detected in 2002, an indication that immigration offenders are now less inclined to risk using forged or tampered passports to enter or depart Singapore, as they know that they would be detected.

In addition, intelligence-led operations to counter forgery syndicates resulted in the arrest of 85 persons last year, compared to 28 persons in 2002. Follow-up investigations have led to the seizure of forged immigration rubber stamps, work passes, travel documents and computer equipment.

The Police and ICA regularly exchange information with their foreign counterparts on the abuse of travel documents, and the modus operandi and trends of human smuggling activities. ICA is an active participant in regional conferences, such as the Pacific Rim Immigration Intelligence Conference, which serves as a platform for members to share strategic and operational intelligence, and promotes international cooperation to combat human smuggling.

Sir, we have also sought the assistance of foreign missions in Singapore to help disseminate information of our strict immigration laws and our enforcement action to their nationals, to discourage them from trying to enter Singapore illegally. Cases of illegal immigrants being cheated by the traffickers are also being shared with the foreign missions to help them warn their nationals.

I cannot over-emphasise the critical role the public can play in helping to

tackle the illegal immigration problem. Members of the public should not make Singapore attractive to immigration offenders by offering them employment or harbouring them. By doing so, more illegal immigrants will be encouraged to risk their lives to enter Singapore.

It is therefore important to spread the message that Singapore will not tolerate immigration offenders. Police and ICA have been working with the local media to raise public awareness of this issue. Our agencies issue media releases regularly when immigration offenders are arrested. We will continue to make use of programmes such as "Crime Watch" to feature the illegal immigration problem in Singapore and highlight the severe penalties imposed on immigration offenders, traffickers, harbourers and employers.

Could I please ask about the specific area of cooperation with the State of Johor because most of them are swimming across and the snakeheads are operating in the coastal villages? The problem must be serious enough for us to erect fences. What is the level of effort there?

The Police has a very good working relationshop with the Royal Malaysian Police, including, of course, its counterparts in Johor. It has been like this all these years, not just in the fight against illegal immigrants but on other fronts as well, and this will continue.

12. Mr Chiam See Tong asked the Minister for Home Affairs if he will (i) investigate the leakage of a police report made at Ang Mo Kio Police Division concerning Mr Steve Chia, NCMP, around December 2003; and (ii) state what

steps will his Ministry take to stop further leaks of police reports while investigations are still going on.

(for the Minister for Home Affairs): Sir, the media reports did not contain information known exclusively to Police investigation officers.

I would like to assure the House that allegations against Police officers breaching confidentiality are treated very seriously. Since the Member has alleged that there is a possible leak of information pertaining to the report made by Mr Steve Chia's wife, Police is now investigating this.

13. Mdm Cynthia Phua asked the Minister for Transport (a) in the past three years, 2001, 2002 and 2003, what is the number of accidents involving school children and school buses; (b) whether LTA will review the need for school bus attendants for buses of 18 seaters or below, especially when these buses are also permitted to carry an additional one third more children; and (c) whether LTA will also review the need for separate buses for lower and upper primary children and for accompanying bus attendants.

Mr Speaker, Sir, the Land Transport Authority (LTA) and Traffic Police have been monitoring the road accident rate of school buses. The statistics show that the accident rate has remained very low over the years. In the past three years, 25 school children suffered minor injuries and no school children were killed or seriously injured while travelling in school buses.

The capacity of a school bus is determined based on a ratio of three children for every two adults. Currently, only school buses with a child-capacity of more than 30 are required to have an attendant on board to look after the safety of the children. School buses that are used to convey children of child care centres or kindergartens are also required to have an attendant regardless of their carrying capacity.

While it is ideal to have attendants on all school buses, this is likely to result in an overall increase in the cost of operation to the school bus owners. This will likely lead to an increase in the school bus fare.

As the accident trend of school buses has been very low and has remained stable, LTA currently does not plan to increase the existing requirement for bus attendants. Nevertheless, schools are free to impose stricter requirements for school bus attendants and the deployment of school buses on the transport service providers they engage for their students, such as having different buses for lower and upper primary school children. This is a more flexible approach.

LTA will continue to work with the Traffic Police, the Ministry of Education and the school bus associations to ensure that school buses continue to be a safe and affordable mode of transport for school children.

Sir, what is the basis that LTA works on in the determination of 30 children for a bus attendant? And does the Minister agree that the agility of children aged 6 and aged 12 differs differently? A child psychologist has once said that a child has no self-restraint before age 10. After an accident in Ang Mo Kio Avenue 3 where a child dashed off from the hands of the parent crossing the road, if he does agree, for enhanced safety, can he review again the appeal for the segregation of

children as well as the guideline for an attendant for young school children?

Sir, I agree with Mdm Cynthia Phua that there is a difference between a 6-year old and a 12-year old. Where schools wish to impose such a segregation of children in school buses and when it is feasible to do so, LTA has no objection.

Sir, I do not know whether I have heard the Minister correctly. He says that the accident rate of school buses is very low and therefore the LTA is not taking any further action. I thought even one more death of a school child is already too many.

Mr Speaker, Sir, what I said was in the last three years, there was no fatality of school children travelling in school buses. We have allowed schools to determine whether additional safety measures are required. Schools will have to discuss with parents on what measures they want to take and the affordability issue before determining that.

Mr Speaker, Sir, the Minister of State has not answered the question. What is the basis that LTA works on in the determination of 30 children for a bus attendant? I would still like to ask the Minister to explain that. The second question is: if the basis is based on affordability of the children, when was this requirement set down? And can a review be made again?

The 30 students cut-off was determined because it was felt that below 30 students, the cost of an attendant would be prohibitive on the parents. However, where the school bus caters to kindergartens and childcare centres, we have imposed that restriction.

If schools wish to impose that restriction for children above the age of 6, LTA does not object to it, and we are willing to review the rules again.

Pardon my ignorance here. Can I just check with the Minister of State whether seat belts are compulsory on these buses? If not, would we consider this?

Seat belts are not compulsory, and we will be willing to review that.

Mr Speaker, Sir, the Minister of State has said that the determination of 30 children is based on affordability. When was this determined? The affordability has changed over time, and for enhanced safety of the children, I would like to appeal again that the Ministry review this requirement.

Sir, if the school feels that it is now affordable, individual schools can impose a rule on the requirement. As for the exact date when this rule was implemented, I would take that information up - I do not have it with me now - and give it to the Member.

I think school transport is under the jurisdiction of the Ministry of Transport (MOT). Most schools would comply with the requirement of MOT. They would not on their own establish a new requirement and especially so if the parents ---

What is your question, Mdm Phua?

Can the Minister consider reviewing this requirement because MOT is regulating the bus transport system?

We will consider and review the issue and we will work with MOE closely.

14. Mdm Cynthia Phua asked the Minister for Transport (a) what is the LTA's guideline for boarding and alighting of children from school buses and private vehicles on the main road in front of schools; and (b) in order to avoid traffic congestion and provide some road safety for parents and children using roads fronting schools, whether the use of slip road, as adopted by the French school in Ang Mo Kio Avenue 3, can also be adopted by all schools.

Mr Speaker, Sir, roads fronting schools should be clear of stationary vehicles to allow the main traffic to flow smoothly. This is especially so during peak hours. Students should alight and board within the school compound for their safety. However, we also acknowledge the schools' operational needs, and that some of the school compounds are not big enough to accommodate a large number of parents who drive their children to school.

To provide a balance between these needs, LTA works closely with the schools and relevant agencies, such as Traffic Police, Neighbourhood Police and sometimes the grassroots organisation, to put in place effective traffic management schemes in the vicinity of schools. Adequate and appropriate warning signs are also installed to warn motorists of students using the roads.

The proposal of a slip road for parents to drop off their kids is a good concept, especially along a busy road, but would require more land to be set aside. It would therefore not be practical or possible to do so for all schools. However, where there is land available either within the school or just outside it,

LTA would work with the school to consider incorporating this facility.

Can the Minister of State confirm that currently there is no requirement for schools to provide alighting or boarding points for students within the school compound and outside on the public road? Why is that so? Because most buildings are required to submit plans to the Ministry of Transport for any of the access points and also even the requirement for car park lots.

Mr Speaker, Sir, the safety of students alighting in schools is paramount to LTA and LTA works with schools to try to ensure that we can make it as practicable and safe as possible. But there are several factors that determine safety, besides just slip roads, points where cars should stop and students should alight. As every school in Singapore is slightly different, in terms of its entrance, the kind of traffic around it, this solution has to be individualised to the school. Hence, where the school needs LTA to change the rules around the schools, LTA does so.

Let me give you an example. At Anderson Primary School, there is a traffic crossing and there is a central railing. The children did not use the signalised crossing and they were bypassing the railing because it was not long enough. And when the school brought this up to LTA, LTA extended the railing so that the children had to use the crossing. In this way, LTA will work with schools to help schools ensure safety. So if any school were to request LTA to restrict part of the road so that cars do not stop there, LTA will put up signs, if it is possible, to ensure that no car stops there and that children do not alight. But we have to work with the principals of the schools so that we have a practical solution on safety in schools.

Can the Minister

of State explain how he works with MOE on the alighting and boarding points for schools? Is it only after an accident or after the school is built? Is it only feasible for alighting and boarding points at the planning stage? Since there is no requirement for schools to submit plans to the Ministry of Transport for the alighting and boarding points for school students, how does MOT work with MOE on such provision?

Sir, as I said, there are many factors that involve safety at schools with regard to students alighting from their cars. School principals are in the best position to know what is practical, what do parents want and what is needed for the school. LTA will consider all requests in changing the traffic around the schools as well as putting up signs to prevent cars from stopping if the principal, or the school, or MOE, requests for it.

Mr Speaker, Sir, can the Minister of State explain why is there no such guideline by MOT about alighting and boarding points for school students, whether it is within the school or outside the school on the public road. Does the Minister of State agree that it is very dangerous for young children to board and alight school buses on a public road, especially when the young ones are fighting with each other while going up or down the buses?

Mr Speaker, Sir, if the school requests that a "No Stopping" sign be placed in front of the school, so that no cars can stop in front of the school and children do not alight, that can be done. But we will do it if the school requests for it.

Mr Speaker, Sir, it is a daily affair that many parents send their children to school. They need to alight their children at the school. So why is there no such guideline and provision by

either the Ministry of Education, or Ministry of Transport, for such a provision as basic as this facility to ensure that the safety of the children is taken care of?

Dr Balaji, would you like to answer that?

Mr Speaker, I think she has asked that question before and I have said that school principals know best what is practical around their schools. Any request that they make, we will consider.

Mr Speaker, Sir, it is repeatedly mentioned that if any school principal were to ask for arrangement to be made for "No Stopping" signs, this would be looked into. I have a similar problem in my constituency and the grassroots leaders and advisors have repeatedly written in to ask if something could be done, but apparently zigzag lines, and all that, could not be done. We face a lot of difficulties. Could the views of grassroots leaders and advisors also be considered?

I hope the grassroots leaders and the Member of Parliament have brought this up with the school and reached a consensus on the issue with the school principal and teachers and they could then bring the matter up with LTA. It would be easier for us to come up with a solution.

15. Mdm Halimah Yacob asked the Acting Minister for Education (a) how many primary one school children have been placed on the Learning Support Programme this year; (b) what is their family profile; and (c) if these children have younger siblings will his Ministry consider working with self-help groups

and other grassroots organisations to assist them before entering primary one.

Mr Speaker, all Primary 1 pupils are screened at the start of the year to identify pupils who are weak in language and literacy skills for support in the Learning Support Programme (LSP). If we take last year, based on the screening test and recommendations from teachers, 9,586 Primary 1 pupils (that is about 20% of cohort) received additional support through the Learning Support Programme.

Analysis of the family profiles of the Learning Support Programme pupils showed that 24% of them were from 1 to 3 room HDB flats, 45% from 4-room HDB flats, 24% from 5-room/HUDC/Executive flats; and 7% from private housing. 60% were from Chinese families; 28% from Malay families; 10% from Indian families and 2% from others.

MOE recognises the merits of engaging the self-help groups (SHGs) and the community in complementing the Learning Support Programme in our schools. We have briefed all the self-help groups on the programme, and provided opportunities for them to publicise their services, for example, at the Zonal Meetings that we have for the specialist teachers on the Learning Support Programme, our Learning Support Coordinators (LSCs). Several sessions have in fact been conducted by the self-help groups for the Learning Support Coordinators to raise awareness of what they each provide. These meetings have led to closer working relationships between the self-help groups and the Learning Support Coordinators, which we encourage.

We in fact encourage the Learning Support Coordinators to refer families

who they think are in some difficulty to the self-help groups and the Family Service Centres. These organisations can help to provide support and advice to the families, both in the interests of the Primary 1 child as well as younger siblings, if any. MOE will continue to engage the self-help groups and the community in reaching out to families of students who are underperforming.

I would like to ask the Acting Minister whether the Ministry has any figures on whether the children on Learning Support Programmes have been attending kindergarten classes or they have not been attending kindergarten classes. How many percent has not been attending? The other question is: would the MOE consider providing information to self-help groups on the siblings of these children who are currently in the Learning Support Programmes so that the self-help groups can take pre-emptive action in reaching out to the siblings from those who are on LSP?

You have 1 1/2 minutes, Mr Shanmugaratnam.

Thank you. On the first question, I do not have the data offhand. It is something which we can look into. On the second question, it is a useful suggestion. I think it is best done on a pilot basis. We can choose a few schools and let the coordinators find out from the parents if there are younger siblings and work with the self-help groups on a focused basis.

3.00 pm

Order. End of Question time.

[Pursuant to Standing Order No. 21(3), Written Answers to Question Nos. 18 and 20-22 on the Order Paper are reproduced in the Appendix*. Question Nos. 16-17

and 19 have been postponed to the next sitting of Parliament on 27th February 2004.]

*Cols. 391-6

Mr Speaker, Sir, Avian Flu is a viral disease infecting poultry. The current outbreak of Avian Influenza caused by the influenza A H5N1 sub-type, which is highly contagious in poultry, has so far affected 10 Asian countries, excluding Malaysia and Singapore. It has been reported that 17 people who had close contact with infected chickens have died from the disease. More than 50 million chickens have been culled. I would like to brief the House on what steps the Government has taken to prevent the disease spreading to Singapore and, if it does, to eradicate it.

Sir, Singapore is free of Avian Influenza. All our tests on local farms, imported chickens, migratory and local birds at Sungei Buloh and the Bird Park have consistently yielded negative results. Common birds like crows, pigeons and mynahs are not known to spread the disease. However, we are doing more tests on them to be doubly safe.

While we cannot be complacent, there are some significant factors in our favour. Firstly, we stopped slaughtering live poultry in wet markets 12 years ago. This means that the public generally does not come into contact with live chickens.

Secondly, we only have five chicken farms and two quail farms with a population of 2.1 million birds. These are all modern commercial farms with proper protection against outside sources of infection.

Thirdly, Avian Influenza remains a disease that affects only poultry. In rare

cases, people who come into close contact with infected chickens without adequate protection may be infected. There is until now no evidence of human-to-human transmission. WHO and the Ministry of Health have assessed that even if human-to-human transmission of Avian Flu is possible, such transmission is limited and inefficient.

Precautionary measures

Let me now inform the House of the precautions that the Government has taken to keep Avian Influenza out of Singapore. We have stepped up the inspection and tests on imported chickens and poultry products to ensure that they are safe. We immediately suspended the import of live birds and poultry products from all countries affected by Avian Influenza. We have tightened the biosecurity of our farms and stepped up disease surveillance of migratory birds. We are removing or have removed the free-ranging chickens from Pulau Ubin's backyard farms, which lack the protective measures necessary to keep out Avian Influenza. The poultry slaughter houses have expressed interest in buying the entire stock of poultry. I believe that since last night they have already reached an agreement to do so. Nevertheless, the farms and the residents on Pulau Ubin will be allowed to keep a few poultry in cages as pets.

At the same time, we have introduced measures to protect the workers in the poultry industry, ie, those who are working in the farms as well as in the slaughter houses. So, we require everyone working with live poultry in the farms and at the abattoirs to wear protective gear, such as masks, to follow strict hygiene practices and to undergo daily temperature checks. Workers are being vaccinated against human influenza. This will prevent people who are down with human flu from also becoming

infected with bird flu, therefore, avoiding the risk of genetic mixing of the Avian flu and human flu viruses to form a new virus strain which may be transmissible between humans.

State of preparedness

Sir, while we are confident that our measures will keep the disease out, we cannot be complacent. In addition to MND and AVA, other Government agencies are on high alert and monitoring the situation closely. In case Avian Influenza slips through our tight defences, we will act swiftly to contain and eradicate the disease. A Ministerial Committee for Avian Influenza, comprising Ministers from relevant Ministries and supported by an Executive Group, has been set up to oversee our preparations and to decide on the contingency measures necessary if the disease appears in Singapore.

Culling plans

If Avian Influenza is detected in imported poultry in the abattoirs, import will cease immediately and all birds imported on that day will be slaughtered and safely disposed of. Poultry from earlier consignments in the day will be recalled.

The seven local farms that I mentioned earlier are all clustered in the Lim Chu Kang, Murai and Sungei Tengah areas, within close proximity of each other. If the Avian Influenza hits any one of these farms, all the 2.1 million birds in all seven farms will be culled and safely disposed of.

We will start the culling as soon as clinical signs of the Avian Influenza appear and we have supporting post-mortem findings and laboratory tests of Type A Influenza. We will not wait for

laboratory confirmation that it is the H5N1 strain, which will take another five to seven days. All the farms will be "sealed up" during the culling. No poultry and eggs will be allowed in or out, and strict controls will be imposed over human and vehicular movements. The eggs produced during this period will be destroyed.

Such quick and comprehensive action is necessary to eradicate the disease, safeguard public health, and maintain the confidence of our people as well as visitors.

The Government will make ex-gratia payments to the owners of the farms for the live poultry that are culled.

Coordinated Government response

The Ministry of Health and Government agencies, such as the Singapore Police Force, the Singapore Civil Defence Force and the National Environment Agency, are all ready to assist the AVA in the culling operations.

Food safety and supply

I would now like to talk about food safety and supply. I wish to assure the House that poultry and poultry products in Singapore are safe to eat. We have a stringent accreditation and surveillance regime to ensure that the food imported into Singapore is safe. As the virus is destroyed by heat, properly-cooked poultry and eggs, and canned and processed poultry products are safe to eat.

With regard to poultry supply and prices, as the Avian Influenza hits more areas in Asia, sources of poultry supply will be affected and we expect prices to go up temporarily. Fortunately, we do not require much of the world's supply, so I do not foresee any major problems with getting enough poultry for our needs. Frozen poultry is a good substitute for

freshly slaughtered poultry, and we have large supply sources from non-affected countries like Brazil and the USA.

For eggs, Malaysia is our main supplier, providing 70% of our needs. In the event that these egg imports have to be suspended, we can turn to other accredited countries, such as Australia and New Zealand. However, eggs from these countries are more expensive. So, consumers may decide to switch to substitutes, such as liquid or powdered eggs, which are commonly used by the food manufacturers and hotels.

Economic impact

Let me turn to the economic impact. The impact of an Avian Influenza outbreak on Singapore's economy should be minimal if the fallout from the disease is contained within the poultry industry. According to the Pacific Asia Travel Association (PATA), the Avian Influenza will not have the same effect on the tourism industry as the SARS crisis did last year. This is because, unlike SARS, the virus is not transmitted from one human being to another. It is mainly transmitted through close contact with infected chickens. The World Health Organisation has not issued travel advisories on Avian Influenza. A 10-country meeting of ministers and health experts in Bangkok on 28th January also concluded that travel advisories are not necessary.

So far, there has been no significant adverse impact on our tourist arrivals. Nevertheless, if the situation worsens in the coming weeks, the psychological impact could dampen regional tourism, including Singapore's. The worst-case scenario would be that of a viral mutation that allows human-to-human transmission. The economy, particularly the travel and tourism-related sectors, such as airlines, hotels and retailers, would be badly affected in such circumstances. As of

now, this remains very unlikely.

Let me conclude by saying that Avian Influenza is still primarily a disease affecting poultry. It does not pose a public health threat. We have implemented measures to keep it out. But we are vigilant and on high alert. We have worked out contingency plans and are ready to take decisive action should Avian Influenza appear in Singapore. Poultry and eggs in Singapore are safe to eat. I advise the public to stay calm but to remain alert. The Government will continue to keep the public informed of developments, in an open and transparent manner.

Sir, I would like to ask the Minister three supplementary questions. Firstly, what is the probability of human-to-human transmission and how prepared are the hospitals and our public healthcare system if this should happen? Secondly, how long will it take for the egg farms to restart operations and production, if they were to be shut down, and what would be the impact on supply and demand, and would this shutdown period be taken into account when determining ex-gratia compensation for the farmers? Finally, can the Minister update us on the situation in Pulau Ubin, as I have heard that some farmers are unhappy over the need to get rid of their ducks and chickens? Would they be allowed to restart operations in future?

First of all, on the question of human-to-human transmission, I believe the medical experts in WHO and the scientists have assessed that while there is a theoretical possibility of such transmission happening, which in turn depends on the mutation of the virus, the assessment at this stage is that such a possibility is very low. They are not able to put a number to it but, based on what they know at this point in time, such a possibility is low. Nevertheless,

because the implication of something like this happening is very significant, all agencies involved - WHO, OIE, FAO - plus the various countries, are very concerned about this. Therefore, we must take action to ensure that such a possibility remains a remote one. And this is the reason why we are vaccinating all the workers who are involved in the poultry farms and abattoirs and, if ever there is a need for culling, they would also be vaccinated. This is to prevent any possible cross-genetic mutation of the virus.

As for the preparedness of the hospitals, MOH has already sent out advisories to all medical personnel, all doctors, including the Chinese sinsehs, to be on the alert for any possible evidence of such infections in humans. The hospitals have also been placed on alert. All the precautionary measures that we put in place for SARS, eg, temperature checking of infected people coming in, are also still in place. So, if ever there is a need for us to activate, we can do so.

In so far as restarting production is concerned, frankly, at this point in time, our priority is to make sure that the Avian Influenza virus does not hit Singapore, and all our attention is focused on this aspect of it. We have not really thought about the restarting of egg production right now. But in a theoretical situation, if a farm were to be infected, the first thing after we have culled is to make sure that the farm is thoroughly disinfected. It would also take some time for us to make sure that the viral load in the farms is totally eliminated. This can take anything from three months to six months. So, it is not easy for the farms to restart production. And this is why I believe it is important for us to make sure that our farms do not get infected. If they do get infected and if they have to take a long time to restart, then obviously the farmers

would have to take an economic decision whether they wish to restart the farm. But this is something that they would have to decide for themselves.

The Member also asked about the situation in Pulau Ubin. The reason why AVA went into Pulau Ubin was because all the information that they had, suggested that the threat usually would come from the backyard farms, ie, those that are not biosecured. All the farms that are in Singapore have been required to put in place extensive biosecurity measures, eg, bird proofing, putting nets to make sure that the migratory birds do not come into contact with their chickens, disinfection, quarantine facilities, etc. But it is extremely difficult and expensive for the backyard farmers to put in place similar measures. And this is the reason why AVA decided that they would persuade the farmers, buy the chickens from them in order to make sure that this does not become a backyard entry, as it were, for the bird flu. We wanted to make sure that that is not the weak link in the chain

in making sure that Singapore remains free from Avian flu.

I am happy to inform the House that the Poultry Association and members of the public have agreed to purchase most, if not, all the poultry from the farmers. As of last night, I believe that they have come to an agreement. The farmers are now quite satisfied with the outcome. Initially, they were a little bit concerned but, thereafter, when they realised, with explanation, what this is all about, they have, by and large, given AVA their cooperation.

Sir, I have three questions for the Minister. So far, those who have died from Avian flu are mainly children. May I ask the Minister why are children more susceptible to this disease and what is his advice for children in Singapore? The second question is: is the Ministry

prepared to provide resources to the grassroots organisations or CDCs and work out an emergency plan to cope with any disease outbreak? Third, can the Ministry consider broadcasting the key messages of the Ministerial Statement in the various media in four languages so that we can have a maximum outreach, in terms of conveying the messages to the public?

Dr Teo asked why children are more susceptible. I am not a doctor but I dare say that children are by nature more susceptible. Generally, they are weaker and they normally would be susceptible to any virus or bacteria that affects humans or any pathogens for that matter.

My advice for children is the same advice for all, whether children or adults - do not get into close contact with chickens, avoid them at this point in time. As a result of that, all the farms have been told not to accept any visitors. The bird park has stopped its bird shows which involve close contact between visitors and their birds. So have the schools, the zoo and Sentosa, etc. While it is acceptable, and AVA has advised that it is acceptable, for families to keep chickens as pets, please keep them caged so that they do not come into contact with migratory birds and also make sure that they themselves limit the interaction or contact with the chickens. This is an advice I will give to everybody, and not just children, although children are, by nature, more susceptible to disease.

On whether we will work with the CDCs on emergency plans, yes, that is the intention. In particular, we will be briefing the grassroots leaders and the advisers to the constituencies that would be affected directly if Avian flu were to hit us. By that, I mean those constituencies where the farms and slaughter houses are located. We will certainly need the cooperation of the

grassroots leaders and the farmers themselves to make sure that the culling process is carried out smoothly and effectively. Yes, we will be very happy to work with them.

Finally, as to broadcasting of the key messages in the various media, we will be briefing the grassroots leaders of all the constituencies. I will be meeting them sometime next week to pass these key messages to them, namely, that we do not have the bird flu virus and we intend to keep it that way. If it does come, we have measures in place to control and eradicate it. In the meantime, the Government will be open and transparent in the way it deals with this, as it did with SARS, because we definitely believe that it is the most effective way of tackling this. Yes, those key messages will be put across in as many different ways as possible, and I will certainly ask the media to help us to pass these messages across to as many people as possible.

Sir, in view of the need to eat properly cooked food, will the Ministry be implementing measures, such as sending out food inspectors to ensure that the chicken rice chicken are well-cooked and not bloody as they should be? Or will they be issuing advisory to these hawkers? Another question is whether the Minister will be issuing advisory on avoidance of half-boiled eggs sold at popular joints, like Ya Kun and Kopitiam?

The third question is with reference to children staying away from chickens which are normally kept as pets. Will the Ministry also be issuing advisory to schools to discourage them from keeping chickens as part of their science education programme?

Could I inform the Member that as far as the keeping of chickens in schools is concerned, yes, we know, for a fact, that many schools keep chickens as part of their nature study

classes. Our advice to the schools is (a) keep the chickens in cages; and (b) avoid or minimise contact between the chickens and the children. Last week, MOE has sent out an advisory to all the schools and kindergartens to remind the teachers and supervisors that they should avoid such close contact, and to also keep the chickens in cages. That has already been done.

As far as cooked food is concerned, let me reiterate that this virus is not a food-borne virus. It transmits and infects through close contact with faecal material or mucus from infected poultry. So there is really no danger from eating well-cooked and well-prepared food. This is the first point that we should remember. Eating half-cooked chicken and half-boiled eggs has always carried a certain risk, because if we do not fully cook something, it automatically carries a certain risk. Such risks include things like salmonella and all the other bad bacteria that are crawling around. The fact that we do not have such a problem in Singapore is because AVA does such a good job in making sure that the foods that come in in the first place - the eggs, poultry, and so on - do come from accredited sources. They are properly farmed and transported in cold chains, etc. When they come into Singapore, there is random checking. Now, there is 100% checking. That is the assurance that we can give. Anytime we eat something that is half-cooked or raw, we are running a risk.

Sir, I would like to raise two points. First, is there any plan to temporarily close the Jurong Bird Park? How should we handle the birds and chickens in the Mandai Zoo? The second question is: is there any special symptom when a person is affected by the bird flu so that the public can pay attention to?

There is no need to close the Jurong Bird Park. There are two reasons. The first reason is that the bird flu virus infects mostly poultry like chickens, ducks and geese. It does not infect the other birds that are kept in the Jurong Bird Park. There is no reason for us to shut down the Jurong Bird Park or get rid of the birds there. We are nevertheless taking precautions to make sure that there is no possibility of other birds coming in and creating havoc in the Jurong Bird Park, which is a valuable asset to us. The Jurong Bird Park has taken steps to make sure that the Jurong Bird Park area is protected. Also, to minimise contact with visitors, they have also stopped all shows which involve carrying a parrot on your shoulders, etc. The expert advice is that it is not necessary to close Jurong Bird Park. Nevertheless, we are on the alert to make sure that the Jurong Bird Park is not infected.

As far as the symptoms are concerned, they are similar to the flu symptoms - fever, cough, muscle ache, lung infection, etc. It is a flu virus. It is just a different strain of the flu virus. All the symptoms, I believe, are similar to the normal flu.

Sir, first, I would like to ask the Minister what can be done to prevent profiteering, because there are some indications that prices of eggs have increased and not necessarily because the supply itself has been unduly restricted. My second question is that there is a report that 30 birds suddenly dropped dead in Hougang yesterday, and that had caused some fears. Could the Minister please enlighten us as to whether that has anything to do with the Avian flu or nothing at all?

I wonder which part of Hougang! Was it in the Opposition Member's constituency? Sir, as far as I know, the birds that were found to be dead in that particular part of Singapore

was a result of some routine culling operations undertaken by the Town Council. There is really no cause for concern. There is a normal programme to keep the population of the wild birds, like crows and mynahs, down. This is part of our regular culling operations.

As far as profiteering is concerned, the most effective way for us to counter profiteering is to make sure that there are sufficient alternative sources of supply. For example, if Malaysia gets infected, we will be short of live chickens and eggs because the bulk of our supply of eggs comes from Malaysia. As far as the supply of live chickens is concerned, we have, in place, alternative supplies. There are plenty of frozen chickens available, both in stock as well as they can be ordered from overseas quite easily.

In the case of eggs, there is a slight problem because the supply will be restricted. But we never know how prices are going to move. It does not necessarily follow that if they raise prices, they will be able to benefit, because it may well be that because of this that the demand for eggs and poultry will drop. In that case, the supply and demand situation may well be a glut rather than a shortage. I would not be so concerned about profiteering because I know that there are alternative sources available, both for the chickens as well as for the eggs. In that sense, we are quite sure that although prices will go up, they will not be excessive.

Sir, the Minister mentioned that the workers in Pulau Ubin have been vaccinated. Can I ask the Minister whether there is any evidence so far that flu vaccines or anti-virus drugs are effective against H5N1 virus? My second question is: are we working towards developing a vaccine that will be effective against this virus? My third question involves pigs. There is a

concern that this virus mutates quite quickly and can spread to humans through pigs. Is the Ministry concerned about this?

As at this point in time, there are no flu vaccines against that particular strain, H5N1 strain, either for birds or for humans. But the WHO is actively working on it. They are coordinating a group of laboratories to produce such a flu vaccine, specifically for H5N1. But at this point in time, such vaccines are not available. But there is an anti-viral drug that is available called Tamiflu. Tamiflu is a drug that is able to prevent as well as to treat the bird flu in humans. This is the reason why, as part of our precautionary measures, we are increasing our stock of Tamiflu, although it is a very expensive drug. It is an anti-viral drug which has been proven to be effective for H5N1.

As far as pigs are concerned, the veterinarians are always very worried about the pigs because they are a very good reservoir for viruses of all kinds. In fact, they get infected by human viruses and bird viruses. The concern really is that the pigs can actually become a melting pot, as it were, where the bird viruses and the human viruses can mix and mutate. We are monitoring the situation very carefully so far as the import of pigs is concerned. All our pigs are imported from Pulau Bulan. So AVA has kept a close watch on the situation there as well, precisely to guard against such a situation happening.

Sir, I would like to ask the Minister three questions. The first question is on vaccination of chickens. I understand from a report that they are even considering vaccinating the healthy chickens and only culling the affected chickens. Since ours are not infected, why is vaccination not considered?

The other question relates to Pulau Ubin. Judging from the long queues that were formed yesterday at Pulau Ubin, free-range chickens remain very popular. Would the farmers be allowed to rear chickens

and ducks again when this whole episode blows over?

My third question relates to ex-gratia payment for egg farmers should their chickens be culled. How would this be determined? And as I noted earlier, consideration should be given to waive land rentals payable, property tax, etc, in order to help them restart operations in future, as the Minister has hinted that it may not be economically viable.

Sir, as far as vaccination of chickens is concerned, yes, it is true that the WHO and the OIE, when they met in Rome just a few days ago, did issue an advisory which appears to state that we should be vaccinating the chickens instead. I have read the advisory in greater detail and discussed this with my officials in AVA. I would like to clarify this point. It is very clear that they are not talking about vaccination instead of culling. In fact, what they are saying is: "stamping out or culling is the preferred control option for an outbreak of H5NI, which is the bird flu, and it should be used for all flocks exhibiting clinical diseases. It has been highly effective in controlling outbreaks of H5NI where there is limited spread and low risk of reintroduction."

Basically, the position really is that if you can cull, you should do so, because that is still the best way of eradicating the disease. This is what Hong Kong did in 1997. They culled 1.5 million birds and, effectively, stopped the outbreak from spreading.

However, I think what they are saying now is for situations where it is not

practical or perhaps economic cost is high for culling all chickens. Obviously, if you are talking about Indonesia or China, it is practically impossible for such a method to be effective. How can you cull all the chickens in China or all the chickens in Indonesia? It is just not practical. What I think they are trying to say is that in such a situation where you can cull the infected birds and those around them, do so. For the rest, you vaccinate. But in our case, the situation is quite different. Our farms are all located very close together. We do not have such a large population as in those countries. We are actually able to cull and use this more effective method of eradication of the disease, and this is what we prefer to do. So we will cull completely in the event of an outbreak. And if we do so, it is not just to eradicate the disease effectively, it also ensures that there is no reservoir of the disease remaining so that public health is safeguarded. Equally important, it increases or maintains the confidence of our own people and visitors to Singapore if we can do that.

Yes, you can vaccinate if you cannot cull completely. But if you can cull completely, please do so. This is how we read the FAO and WHO advice.

On the Pulau Ubin situation, yes, there were long queues. Let us put things in perspective. We are talking about maybe 700 chickens altogether in Pulau Ubin. I do not think we can take the risk of letting the disease come in via these 700 chickens and putting the two million odd birds in Singapore at risk. That is the reason why AVA went in to Pulau Ubin.

Finally, on ex-gratia payment, the principle of this is that if there is an infection and we have to cull. The chances are that all the birds will be infected and will be destroyed anyway. Ex-gratia payment allows us to move in quickly and take pre-emptive measures. So what do we do? We will pay what we

believe to be the market rate for the layers. But beyond this point, I think it is difficult for us to completely or totally compensate the farmers on loss of business and all the other expenses involved. I accept that there will be many other expenses involved. In the same way, when we compensated the Pasir Panjang Wholesale Centre, we were not able to compensate them fully for the loss of business. In fact, there was some unhappiness there. We have to explain that we are prepared to compensate on an ex-gratia basis. This is an indication that Government is willing to share part of the cost with them. But it is not our intention nor is it correct for Government to fully compensate them for all the losses that they would incur as a result of this. The best thing that we can do is to make sure that it does not come. And for that, I think we are putting in a lot of effort and a lot of money to make sure that it does not hit us.

The farmers have also been asked to cooperate and I am happy to say that they themselves realise that their livelihood is at stake and they are cooperating fully on that.

Mr Speaker, Sir, we have often heard that migratory birds are responsible for spreading the Avian flu. How real and widespread is this phenomenon? And where is the closest incident of such an infection by migratory birds within this region? Also, how real is the risk of migratory birds bringing Avian flu to Singapore's shores? Last but not least, does the Minister see the need to further reduce the number of birds, ie, on top of the normal culling process, such as crows and mynahs in Singapore? And what plan does he have in mind?

Sir, as far as the risk from migratory birds is concerned, yes, that is one of the possible causes of the very fast, rapid and extensive spread of the bird flu throughout Asia. They have

been nailed as one of the prime suspects in this. It is well known that migratory birds are carriers of Avian flu viruses. Whether they carry the H5N1 or other strains of the virus needs to be checked. As far as being carriers are concerned, it is well known that they are carriers. AVA as well as NParks, in fact, many years ago started a surveillance programme to check all the birds that come to Singapore as part of their migratory flight. They stop over in Sungei Buloh. They stay for a few months and then they move on. That is a possible source of danger. But I am glad to inform the House that over the last five years, since they started the surveillance programme, there has been no evidence of such migratory birds being infected. So far, no Avian flu virus has been detected. That is good news.

The other fact which Members may wish to know is that the Avian flu virus appears to be found in certain types of birds - the migratory swans and ducks, for example - not so much the shore birds which visit us. For some reasons, the ducks, geese and swans avoid Singapore. They do not come here. So far, for the last many years, we have not seen them here. They come from Siberia and they bypass Singapore and they go to Indonesia, the Philippines and other places, and then they go down south. I am not sure why. The fact remains that they do not come here, which is another blessing in disguise. Migratory birds are being watched very carefully.

As for mynahs, crows, etc, as I indicated earlier in my reply to Mdm Halimah, such free-flying wild birds are not known to be transmitters of the Avian flu virus. Nevertheless, as I indicated in my statement, we are monitoring them. We are catching them and checking them to make sure that this is indeed so. There is an active programme to cull them, because I know that many of our residents find them a nuisance - noise, droppings, etc. So there is an active

programme to cull them. But that has got nothing to do with the bird flu situation.

Sir, four supplementary questions. (1) Can the Minister confirm that our poultry and abattoir workers are covered by the Workmen's Compensation Act against Avian flu, especially when they are called for duty to cull the affected chickens when it happens? (2) Will the SARS Relief Fund also be used to pay out compensation for these workers if they become infected in the process of culling these affected chickens? (3) In view of the rising incidents of animal disease transmission, is it necessary for Singapore to maintain chicken farms, especially considering the dung smell that farms emit to nearby residents after rain? (4) Will those mountain chickens that are found in the wild in Pulau Ubin and the nature reserves also be culled?

The workers who are directly in contact with the chickens - the poultry farm workers, abattoir workers, and so on - are being protected physically through wearing of protective gear, vaccination, and so on. And I believe that they should also - I see no reason why they should not - be covered by workmen's compensation if, in the course of their duty, they do fall ill. I really do not see why they should not be covered, but, of course, I stand corrected by the Manpower Ministry.

As for the SARS Relief Fund, I think the Fund is for a very specific purpose. I do not think we should complicate matters. Let us deal with the bird flu one step at a time. As I keep emphasising, the first step is to make sure that it does not come here.

Whether we should maintain chicken farms, I think this is a decision which has

to be taken by the farmers. We do not have a large chicken supply. We, in fact, do not have any breeders in Singapore. All our chickens for the table come from either Malaysia's live chickens or frozen chickens from Brazil mainly, and from the US. The only chickens that we have are the layers. They are the ones who produce 30% of our eggs. So the question really is whether we need to be self-sufficient in eggs. Off-hand, I would say no, because there is really no reason why we cannot get sources of supply from other countries, and there are many, many sources of supply. But having said that, I think this is a decision which we would have to discuss and consider several steps down the road. Our first priority is to make sure that our farms are biosecure and that it does not hit us. Thereafter, I think we can consider all these other issues.

As for wild chickens, it depends on how you define "wild chickens". If he is talking about pet chickens, keep them in cages. If they are found roaming around, somebody may actually catch them and eat them because people like to eat wild chickens.

May I ask the Minister how sure are we that the farms we import live chickens from are not affected by Avian flu? Is there a confirmation of the possible human-to-human Avian flu transmission in Vietnam involving the family cluster of 2 sisters, the brother and his wife? Are we taking enough precautions to prevent the outbreak of human Avian flu here? Could the Minister also elaborate on the contingency plan for such an eventuality?

The Minister earlier mentioned that there are now 10 countries in Asia reported to have Avian flu. May I ask him whether he will advise Singaporeans travelling to such affected areas to be protected by getting vaccinated with the available vaccines and to take Tamiflu

tablets? The Minister also earlier said that his Ministry is stockpiling Tamiflu. No wonder there is a short supply of Tamiflu in the market. May I request the Minister to monitor and ensure that there is enough supply of Tamiflu in the market to give to Singaporeans travelling to affected areas for preventive purposes? Is it not an important consideration to ensure that we do not get imported cases of Avian flu from Singaporeans travelling abroad, and also to prevent travelling Singaporeans coming down with Avian flu?

Dr Lily Neo's first question is about the farms, how safe they are. I think she would know that the farms that we import the live chickens from in Malaysia are all accredited farms. In other words, we do not import from any farm or every farm in Malaysia. Only those farms that are accredited by AVA are allowed to export to Singapore. The reason is that we want to be able to do those things that she is talking about. In other words, to check the farms to make sure that the farms are biosecure, to make sure that the procedures are in place, and to make sure that the farm workers are following good hygienic practices, etc.

I am able to inform her that AVA is indeed stepping up its checks on these farms. So far, it has been satisfied that all the necessary precautions are taken. In fact, AVA is working very closely with its counterparts in Malaysia, which is the Department of Veterinary Science, to monitor, to exchange information, and to check as thoroughly as possible. Do not forget that their livelihoods are at stake too. They have a big industry and I think it is in their interest, and they realise it, that they have to be extra vigilant. So they have been doing the checks. We are also doing the checks and as another level of check, when the chickens come to Singapore at the Second Link, and they all come in through one point, they are checked again. And on top of that, apart from physical checking of the symptoms,

random checks are done, birds are taken off the trucks, sent to the laboratory, checked again. So there are various levels of checks to make sure that the chickens that we import into Singapore, that are slaughtered here, that we eat here, are free from the bird flu.

What about a travel advisory? So far, the health authority (WHO) has not seen it necessary to issue any travel advisory. The Health Ministers have met, and they have also not issued any travel advisory. So there is really no need for any country to issue a travel advisory. But commonsense precautions must be taken when you go to these countries. And there are situations, for example, they do have markets where live poultry is being sold, and you should avoid close contact with poultry. You should also, if you feel it necessary, get a flu jab, but this is again something that we are not advising everybody to do.

As for taking of Tamiflu, again this is something which I do not think should be taken unless it is necessary. It is not a vaccine. Unless you think that you are going to be placed in a position where you are going to be in contact with a farm worker or somebody who is going to be engaged in the culling operations, in that situation, yes, take the Tamiflu, and we will give them Tamiflu. But, otherwise, I do not see any necessity for doing so. The stocks that we are carrying really is meant for those people who are going to be involved in the culling operations. We want to make sure that they are all protected.

Mr Speaker, the Minister mentioned about the random checks or testing. Can I ask, ever since the outbreaks in other countries, how much more intense have we been in doing these random checks, and what percentage of the poultry that we import are being checked? Secondly, can these tests

actually detect the viruses in the carrier birds, rather than just the infected birds?

The physical inspections of birds imported from Malaysia are now being carried out every day. In every consignment, there are about 60 trucks a day carrying 120,000 birds every day. And they come in, as I said, through the second link. Our AVA inspectors are stationed there. When the lorries come in, they are directed to a certain bay away from the immigration people. They are separately checked. Birds are pulled out from there on a random basis, and random testing has been stepped up. So far, it has not shown any sign of the bird flu in the birds coming in.

Are the tests effective? Yes, of course, they are. What we are doing is to test them for H5N1. We would test them for type A first. The H5N1 virus strain needs a bit longer to identify. But once you get a type A occurrence, that would already trigger off the actions that we have mentioned earlier.

Mr Speaker, Sir, as I understand it, workers that are vaccinated and called to cull the chickens are currently not protected by any form of financial compensation if they get infected by the Avian flu. Will the Ministry concerned look into financial protection for these workers who are called to do national duty?

Sir, I am not aware that if they are vaccinated, they will not be covered by workmen's compensation. I would have to check that point up and revert to the Member.

"to repeal and re-enact with amendments the Buildings and Common Property (Maintenance and Management) Act (Chapter 30 of the 2000 Revised Edition) so as to provide for proper maintenance and management of buildings, and to make consequential amendments to the Land Titles (Strata) Act (Chapter 158 of the 1999 Revised Edition) and to make certain other written laws",

presented by the Minister for National Development (Mr Mah Bow Tan); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.20 pm.

Sitting accordingly suspended

at 3.57 pm until 4.20 pm.

Sitting resumed at 4.20 pm

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

Sir, this Bill collates a number of minor amendments to several Acts. They are mostly technical amendments, but let me highlight the key ones.

Amendment to the Community Mediation Act

First, the Community Mediation Act. Clause 3 amends section 15 of the Community Mediation Act to enhance the power of a Magistrate to refer complaints to a Community Mediation Centre for mediation.

Section 128 of the Criminal Procedure Code provides for a person seeking redress against another whom he believes has committed an offence, to appear before a Magistrate to make a complaint, called a Magistrate's Complaint. Section 15 of the Community Mediation Act currently empowers the Magistrate to refer appropriate complaints to the Community Mediation Centres for mediation, but only if the disputing parties agree.

The proposed amendment will enable the Magistrate to refer appropriate cases to the Community Mediation Centres, even when both parties do not agree, especially where the cases relate to neighbourly and community-related disputes. This is already the approach adopted by established jurisdictions such as Australia and Canada. We are making this amendment, bearing in mind feedback received from our volunteer mediators, Members of Parliament and members of the public who had experienced such disputes.

As is currently the case, in deciding whether a case should or should not be referred to mediation at the Community Mediation Centres, the Magistrate would bear in mind various factors such as the nature of the dispute, their previous attempts to resolve the matter and the appropriateness of sending the parties to mediation given the facts of the case. The order to attend mediation will only restrict the parties in so far as it relates to process. In other words, the parties are free to decide the outcome of their case when they meet at the mediation table. Hence, no one will be compelled into a settlement. If the mediation is unsuccessful, parties may proceed to have their day in court. But it is good to strengthen our processes to at least have the parties talk it over before an impartial, trained mediator. This way, we hope that more disputes on the ground, especially

those between neighbours, can be settled amicably.

Amendment to the Criminal Procedure Code

Many Acts of Parliament have express provisions that allow selected offences under the respective Acts to be made compoundable. Sir, this is in regard to the amendment to the Criminal Procedure Code. Such a power allows public authorities the discretion to compound offences where it is not sufficiently serious to warrant prosecution.

A review by Government agencies has identified several Acts that have offences which are suitable for composition, but which do not have the required provisions to allow the offences to be compounded. Clause 4 amends the Criminal Procedure Code to provide a general power to the relevant authorities to make offences compoundable, by specifying the offences through subsidiary legislation. This will obviate the need to amend multiple Acts to insert the power to compound the offences.

The composition amount that an authority may impose under this clause is capped at half of the maximum fine prescribed for the offence, or $2,000, whichever is lower. The power conferred under this clause does not extend to Acts which already have provisions relating to the composition of offences.

Sir, this amendment is part of MinLaw's initiative to encourage regulatory agencies to decriminalise minor offences, especially regulatory ones, and promote the use of non-criminal sanctions. Although the offences where composition may be offered remain as criminal offences, offenders are given the opportunity to avoid prosecution and possible criminal conviction if they pay the composition fine offered by the authorities.

Amendment to the Bankruptcy Act

Next, the Bankruptcy Act. Currently, bankrupts have to notify both the Official Assignee and the Immigration and Checkpoints Authority (ICA) when they change their residential address. Clause 2(a) amends the Bankruptcy Act to deem notice of a change of address to the ICA as notice to the Official Assignee. The Official Assignee can use information from the National Registration Office of the ICA for service of notices on bankrupts. Bankrupts will henceforth no longer need to separately notify the Official Assignee once they have notified the change to the ICA or any Neighbourhood Police Centres or Police Posts.

Clause 2(b) amends the Bankruptcy Act to remove the requirement for the Official Assignee to make annual publications of the list of bankrupts. This is because the Official Assignee now provides an online enquiry service which enables the public to enquire as to the bankruptcy status of individuals.

Miscellaneous amendments

Sir, let me wrap up now by taking the House briefly through the remaining key provisions of the Bill which are in the nature of facilitating better administration of the Acts.

Amendment to the Land Transport Authority of Singapore Act

Clause 5 amends paragraph 5(a) Part I of the Fourth Schedule of the Land Transport Authority Act to replace the phrase "in contravention of any written law" with "without the contravention of any written law".

Sir, this is to give effect to the intention of the LTA to pay compensation for the removal, pursuant to LTA's

instructions, of only structures that were legally erected and maintained. The current wording, resulting from a 1997 amendment, creates the impression that LTA compensates the cost of removing structures that were erected and maintained illegally. This was not the intention.

Amendment to the Legal Aid and Advice Act

Clause 6 amends the Legal Aid and Advice Act to remove a reference to the Rent Conciliation and Tenants Compensation Board, which is no longer functioning following the repeal of the Controlled Premises (Special Provisions) Act in the year 2002.

Amendment to the Private Hospitals and Medical Clinics Act

Clause 7 repeals section 4 of the Public Hospitals and Medical Clinics Act which provides for the prohibition of trading in blood. This provision was made redundant when the Human Organ Transplant Act was enacted which also provides for a similar prohibition.

Amendment to the Probate and Administration Act

Clause 8 amends the Probate and Administration Act to replace several references to the Official Assignee with the Public Trustee.

Sir, this is because over the years, administration has become more specialised such that there is now a clear distinction between the functions of the Official Assignee and the Public Trustee even though the two positions are currently held by the same person. The Public Trustee deals mainly with administration of a deceased's estate, whereas the Official Assignee deals with bankruptcy matters. In addition, there is the possibility that if the Official Assignee

handles a deceased person's estate when he is not a bankrupt, the public may get the wrong impression that the deceased was a bankrupt.

Amendment to the Street Works Act

And finally, Sir, clause 9 amends section 32A of the Street Works Act to enable the Land Transport Authority to delegate to authorised officers of the Urban Redevelopment Authority (URA) the power to take enforcement measures against obstructions on certain footways. URA has agreed to the delegation as it wants to ensure that such footways are kept obstruction-free, so that building linkways remain pedestrian-friendly.

Sir, I beg to move.

Question proposed.

Sir, I rise to support the Bill. But there is a question relating to clause 3 of the Bill which relates to the change in the law on mediation. Mediation usually relates to consensual cases, meaning that both parties must consent to go to the Mediation Centre. The proposal is to change the law relating to that. I have a couple of questions to ask the Senior Minister of State concerning how this amendment would operate.

First of all, what would happen if a hostile complainant refuses to attend a mediation session but insists on the Magistrate taking up the complaint? Secondly, if we allow non-consensual mediation cases to be referred

to CMCs, will there be a sufficient number of mediators to assist in these cases and to take them up? Also, the training for the mediators now relates to how to settle disputes between two consenting parties. Now, of course, they will have a rather different situation where the parties are hostile. Will there be new or improved

training for these mediators to cope with such situations?

Sir, first of all, let me clarify that it is not all the cases that will be sent for mediation before the community mediators. Having worked the system for six years, the Magistrates have gleaned enough experience to know, bearing in mind certain factors like the nature of the dispute, the stance taken by the parties, the attitude of the parties, whether or not this case ought to go for community mediation. I think that is an important point. It is with the hindsight and experience of all these years that we have decided to move.

Like I have said, the parties are not forced into a settlement. What they only need to do is attend the mediation. Really, I do not see a situation where a party who is in dispute will refuse to go for mediation because, if he does so, he will be in contempt of court. It is an order of the court for them to go for mediation. All the parties need to do is go for mediation. No one is forced into a settlement. They can still come back to the court after that and say, "We have had a day before the mediator. Now, please settle the dispute."

But what is more important is that we have decided to move now in this way because of feedback from the ground. Many of our volunteer mediators in fact tell us that it is good to get the parties to at least talk. Sometimes, one party may be reticent or not prepared to do so. But if he is persuaded to do it, just talking through - some of these disputes, like I have said, not all and sundry but those relating to neighbours fighting, relational disputes between family members - even if they cannot be mediated, the opportunity just to air their grievances will help the parties understand the problem better.

Of course, that also is related to Prof. Chin's second point, which is the key role played by mediators. I am very happy to report to this House that over these five or six years, we have now trained a group of very committed and dedicated mediators, many of whom are grassroots leaders of Members of this House. There are about 160 of them. Many of them are very excited about what they are doing. We have also made their roles more fulfilling because we have given them some sort of career upgrading. So, we have appointed 60 of them as Master Mediators, those who have done a certain number of mediations and have done very well.

Sir, let me assure the House that even though the case load will increase, the work that the CMC now is doing within the entire framework of settling disputes in Singapore will not be adversely affected by the increased workload. On the contrary, I should think that CMCs will continue to make Singapore a more harmonious society.

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 for Second Reading read.

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

The Fire Safety Act was last amended in 2000. Since then, the threat from terrorism has required us to put regulatory control on flammable materials under the Singapore Civil Defence Force (SCDF). Building designers have also requested that more flexibility be given to them to design fire safety solutions. The SCDF has introduced new operating procedures, which require the delegation of more powers to their junior officers.

To achieve this, MHA is now proposing several key amendments to the Act to enable:

the adoption of a performance-based approach towards fire safety;

extension of regulatory control to flammable materials, including petroleum; and

provision for other changes relating to fire safety in buildings and the extension of SCDF powers.

Performance-based approach to fire safety

I shall first touch on the proposed performance-based approach to fire safety.

The Fire Safety Act provides for the fire safety regulations and effective enforcement of fire safety standards. Currently, fire safety standards for buildings in Singapore are governed by the Code of Practice for Fire Precautions in Buildings, commonly known as the "Fire Code". The Fire Code, first introduced in 1974 and last revised in 2002, prescribes specific fire safety requirements and measures without stating the intention or desired outcome.

The prescriptive approach is rigid and restricts flexibility in building designs, as requirements specified in the Fire Code have to be strictly adhered to. For example, the types of construction

materials and fire protection systems to be used are specified in the Fire Code and the Qualified Person, who is the registered architect or professional engineer, has to follow these specifications strictly.

Such rigid requirements have led to feedback and requests from building designers and owners for more flexibility. In fact, some have hired Qualified Persons to propose alternative solutions that still meet the fire safety standards, and sought waivers from compliance with the Fire Code requirements. Examples of buildings where performance-based solutions have been used include the Singapore Expo and the Esplanade.

In recent years, the trend overseas is towards adopting a performance-based approach towards fire safety. Countries that have adopted the performance-based approach include New Zealand, Australia, Sweden, USA, UK and Japan.

In view of the feedback and developments in other countries, SCDF consulted the relevant professional bodies, such as the Singapore Institute of Architects and the Institute of Engineers, Singapore, as well as the academia, and has recommended the adoption of a performance-based approach towards fire safety in Singapore.

The Fire Code will be amended to incorporate the performance provisions, which would specify the desired fire safety objectives. It would then be up to the fire safety engineers to devise fire safety solutions that meet these objectives. The proposed fire safety engineering approach will not compromise the current high standards and levels of fire safety, and is in line with the Government's approach to reducing over-regulation and be business-friendly. In some instances, there could be cost savings as well.

Sir, I would like to emphasise that the

prescriptive measures will be maintained in the Fire Code because it will still be used in designing buildings that have less scope for design flexibility, eg, residential houses, apartments and offices. Developers who do not wish to incur extra costs in engaging fire safety engineers can also follow the prescriptive measures in the Fire Code.

I shall now elaborate on the amendments required to introduce the performance-based approach.

Duties and responsibilities of Fire Safety Engineers

Clause 9 specifies that only Qualified Persons trained in fire safety engineering may design performance-based fire safety solutions. A Qualified Person who is not a fire safety engineer must be supervised by a fire safety engineer in the preparation of the plans.

Clause 9 also requires the appointment of a peer reviewer. The job of the peer reviewer is to assess whether the performance-based solution proposed by the fire safety engineer satisfies the requirements of the Fire Code. This review by an independent and competent party acts as a safeguard to ensure that the fire safety standards are maintained. This peer review system is similar to the Building and Construction Authority's accredited checker system, where an accredited checker would check the calculations done by the structural engineer and conduct a separate analysis to verify if the structural design is sound before the structural plans are submitted to BCA. To ensure the integrity of the independent review, the peer reviewer must not have any professional or financial interest in the fire safety works he reviews.

Registration of Fire Safety Engineers

Clause 9 provides that a person with

the necessary educational qualifications in the field of fire safety engineering and has at least five years of practical experience in the design of fire safety works can be registered as fire safety engineers. These criteria would be prescribed in the regulations.

Formation of the Investigation Committee

Clause 9 also empowers the Commissioner SCDF to take disciplinary actions against a fire safety engineer should a complaint be received against him. To ensure professionalism and independence in the investigation process, the Commissioner SCDF may form an Investigation Committee. Members of this committee will be drawn from the Fire Safety Engineers Discipline Panel, which the Minister will appoint, and comprise fire safety engineers and officers of the SCDF. For consistency, clause 5 amends the existing appointing authority or persons on the Inquiry Panel for registered inspectors from the Commissioner SCDF to the Minister.

Amendments to extend regulatory control to flammable materials

Sir, I will now move on to other amendments. The Act currently regulates the transportation and storage of petroleum-based flammables but does not include non-petroleum flammable materials, eg, magnesium and hydrogen. Presently, there are more than 2,000 companies handling hazardous materials, or Hazmat, in Singapore. This number is expected to increase with the rapid growth of our petrochemical, pharmaceutical and specialty chemicals industries on Jurong Island and other parts of Singapore. The rise of international terrorism has added a further dimension to the Hazmat threat. Terrorists could hijack vehicles transporting flammable materials for use as improvised weapons of mass

destruction. It is, therefore, necessary to address this threat arising from this fast-growing industry.

To better deal with these threats, MHA proposes to extend its regulatory control to encompass other flammable materials. Clause 16 repeals and re-enacts section 35 with two new sections 35A and 35B to extend the regulation of transport and storage of petroleum to import, transport and storage of petroleum and flammable materials. The new section 35 disallows any person to store any flammable material unless the premises are licensed and the quantities stored are in accordance with the prescribed conditions in the licence.

Section 35A requires a person importing any class of petroleum or any flammable material to hold a valid licence to import petroleum or flammable material. To ensure that Hazmat transportation drivers are security cleared and trained in handling emergencies while on the road, section 35B requires the drivers of road vehicles transporting any class of petroleum or flammable materials to hold a valid licence to transport such materials and a permit to drive the vehicle. It also requires the vehicles used to transport the petroleum or flammable materials to be licensed by the Commissioner SCDF.

The Petroleum Act will be repealed consequentially as a result of these proposed amendments. It is obsolete as most of its provisions are already covered under the Maritime and Port Authority of Singapore Act.

Extension of Fire Certificate scheme

Sir, I will now move on to the amendments concerning fire safety in buildings. The Act currently requires offices and other commercial buildings to engage a Professional Engineer to certify that the fire safety systems in their

buildings are in good working condition before Fire Certificates can be issued. This requirement currently does not extend to industrial buildings.

Fires in industrial buildings have increased over the years. In 1998, 34 cases of fires were reported. It doubled in 1999 and 2000, reaching a high of 130 cases. For the year 2003, there were 93 cases. These industrial fires since 1998 have resulted in four deaths and 66 injuries. Therefore, there is a need to ensure that the fire systems in industrial buildings are functioning properly, so that life and property are not put at risk. For this reason, MHA proposes that the Act be amended

to extend the Fire Safety Certificate scheme to industrial buildings to ensure that the owners carry out regular performance testing of all fire safety components within their buildings. Although it means an additional business cost to owners, it is a small price to pay to ensure that the fire safety systems in these industrial buildings are in good working condition.

Fire safety requirements in Government-owned buildings

MHA is also amending the Act to cover the fire safety works in Government-owned buildings. Currently, the Act requires plans to be submitted to SCDF for fire safety works done in any building, except those owned or occupied by the Government. Although Government-owned and occupied buildings submit plans of fire safety work, SCDF is not empowered to take action against the Qualified Persons engaged for Government-owned buildings if they fail to comply with the fire safety requirements or do not build according to the approved plans. To plug this loophole, the proposed amendment makes it clear that any building that is wholly or partially owned or occupied by the Government is also subject to the provisions of the Act and empowers the

SCDF to take action against Qualified Persons or fire safety engineers who do not comply with the fire safety requirements.

Extension of powers

Sir, the Act currently empowers any authorised SCDF officer ranked Second Lieutenant and above, with other members under his command, to take necessary action in the event of a fire, for example, entering or breaking into premises to prevent the spread of fire.

The employment of advanced and more mobile fire fighting equipment by the SCDF, for example, its two-men fire bike teams, means that junior officers may arrive at the scene of the fire ahead of the main team and the senior officers. As quick action can make a difference in life and death situations, it is important to empower them to be able to take quick action at the scene of the fire. The proposed amendment empowers all SCDF officers to take the necessary actions in the event of a fire.

Likewise, the Act empowers any authorised SCDF officer ranked Second Lieutenant and above to arrest without warrant, any persons whom he suspects to have committed an offence under the Act, for example, obstructing any SCDF officer from carrying out his duty in fighting fires. Such powers of arrests are necessary as calling for Police assistance may unnecessarily slow down the fire fighters in the performance of their duties. The perpetrator may also escape before the arrival of the Police. The proposed amendments will extend the powers of arrest to SCDF officers holding the rank of Warrant Officers and above.

Mr Speaker, Sir, the proposals that I have presented today are necessary to ensure that the Act remains relevant to our needs. They will enable us to maintain our high fire safety standards

while offering design flexibility in buildings. The amendments will also allow us to maintain a high level of security by preventing flammable goods from being misused by terrorists.

Sir, I beg to move.

Question proposed.

Sir, this is an important piece of legislation for the safety of the public from fire and chemical hazards. From that perspective, it is to be particularly welcomed.

The important issue, however, is to convince the public that the costs, which will be necessarily incurred, as referred to by the Minister, will need to be made. He said that it was a small cost to improve the safety of the public. But I think it has to be demonstrated that this scheme will definitely be necessary to upgrade the safety of institutions and buildings in Singapore.

Sir, my questions, therefore, on the Bill, relate to the measures to be taken to implement these provisions, rather than the policies behind the Bill. One preliminary question is whether existing industrial buildings, which hitherto were not subject to fire regulations, may require to satisfy the new regulations under the Fire Safety Bill once enacted. That is my first preliminary question, ie, will the existing industrial buildings be subject to the new regulation and, if so, when will they have to satisfy such regulations?

Secondly, the Bill provides for the setting up of a body of fire safety engineers. As I understand it, this is not a type of engineer that has hitherto been recognised. There is a new body of fire safety engineers to be put in place. The Minister has referred to some of the qualifications necessary for such

engineers, to be called fire safety engineers. But I wonder whether there are actually enough fire safety engineers in Singapore to carry out the purposes of the Bill.

Thirdly, SCDF is now to take over the regulation of storage, transport and import of flammable materials. Does that mean that SCDF has the overall authority to prescribe conditions and give licences for such activities? And if so, what is the extent of this new regulatory scheme? For example, does this mean that even delivery vans of cooking gas cylinders will be subject to licensing by SCDF? If this is the case, does that really mean that more paperwork and more licensing authorities to go to, because such operators will now have to go to both LTA and SCDF to get such certification and licensing?

Finally, the Minister mentioned that there will be extended powers of arrest without warrant extended to all SCDF Warrant Officers. What are the reasons for this? Will there be prescribed procedures to make sure that such powers of arrest, which are very wide, should be used with circumspection?

Sir, I support the Bill.

Sir, I have something to clarify. I refer to new section 22A of the Bill, which deals with fire safety engineers, and how to ensure the integrity and independence of the peer reviewer appointed to review or assess whether any alternative solutions to satisfy any fire performance requirements. In subsection (7)(b) of this section, it states that "in the case of a husband and wife living together, the interest of one spouse shall, if known to the other, be deemed to be also an interest to the other." Sir, I wonder why the Bill specifically states a husband and wife living together. Is there a special meaning to it, or does it mean that if they are husband and wife, but not living together,

it does not fall within this section if there is a conflict of interest or whatever? I would like the Minister to clarify.

Sir, the question of cost, of course, is always a big concern among our building owners and others who may have to spend money to improve or provide for fire safety. I think the cost should be justifiable, because we are talking about saving lives. Whatever measure that is needed to prevent a fire is a necessary measure that will prevent harm being done to unsuspecting individuals who may be victims of fire caused by whatever reasons. We have to take that into account when we talk about saving lives.

Regarding industrial buildings that are already there now, the question is whether we immediately require them to put in all these fire safety measures or not. Through a period of inspections, I am sure our SCDF officers will visit industrial buildings to ensure that they have good fire safety measures in place. But we will not apply the Act retroactively to require all building owners to comply immediately. But, over time, through inspections we will give advice and require industrial building owners to comply with the new measures in protecting lives in their buildings.

Prof. Chin said that the fire safety engineers is a new term. But actually it is not new. It is new perhaps to Singapore. In other countries, they have fire safety engineering courses. The SCDF has been working in conjunction with the University of Western Sydney to prepare for our people to take such a course. So far, 40 fire safety engineers have been trained and they have received their Masters degree from the University of Western Sydney. Another 21 have just taken their examinations and awaiting the results. Another 18 are on the first-year course and 18 on the second-year course. In November this year, they are going to

have the next intake of another 20 students. Taking into account the need for fire safety engineers to deal with performance-based fire safety regulations, this should be adequate, because we expect the number of building plans that will use the performance-based fire safety approach will be a small one. We are talking about complex buildings, difficult to design buildings, etc. From our calculations, based on past plans, it is about 5% of the plans submitted. The number of engineers should be adequate to meet this demand. Over time, more will be trained and also others who have gone to courses overseas on their own and have returned, they will also form part of the pool of expertise.

As regards the SCDF's extension of powers to regulate flammable materials, we are not extending to all kinds of vehicles. The Member was talking about the gas cylinders used for domestic cooking. Currently, these are already licensed under the Fire Safety Petroleum Regulations. It is not part of the new extended measures under this amendment Bill. It is also not practical to control small quantities of flammable materials or petroleum. We talk about reasonable bounds beyond a certain quantity that will be subject to these new prescriptions. I think there is no need to worry about the SCDF chasing all vehicles to make sure that they comply. But for those that convey LPG for home domestic uses or to our hawker centres, etc, they are already subject to regulation.

As to whether we should make it easier and convenient for people so that there will not be too many places to apply for licences, currently there are only two authorities inspecting vehicles. One is done by the SCDF for vehicles that carry Hazmat and one is by LTA on the vehicle itself. We will work with LTA to see whether both inspections can be carried out at the same time.

As regards the powers of the officers, I have explained in my speech that, with the two-men operation on fire bikes, most of the time, that will be adequate to deal with some situations, particularly the HDB flat fires or HDB rubbish chute fires. There is no need to have a big turnout of fire-fighters. But in case there is a fire in a flat and the SCDF fire bikes are the first to approach and they cannot get access to it because the officers are too junior and do not have the powers to enter, that is the precise reason why we are providing for this measure so that they can do their duties before the arrival of the senior team. It is for the good of the flat owner who is affected because many a time, we find that the more junior officers are the first to arrive.

On the powers of arrest, I have mentioned in my speech that only Warrant Officers and above are empowered to do the arrest. This is not different from equivalent levels of ranks in the other uniformed services, like the Police. We need to give them the powers because right now, it is only granted to the Lieutenant. That is an extension to enable more officers to exercise their powers, just in case in the performance of their duties, our more junior officers are obstructed by people who want to prevent them from doing their job.

I missed Mr Low's first point on section 22A. Can he please repeat?

It is in page 8 of the Bill, new subsection (7)(b).

It says, "In the case of husband and wife living together, the interest of one spouse shall if known to the other be deemed to be also an interest of the other." My explanation on this is subject to clarification. Sometimes, we may have a situation where the husband denies that the wife knows

about it. So we have to deem that they know what the other party knows.

Does it mean that if the husband and wife are not living together, it is all right to claim that they do not know what happened?

I would presume that should be the case.

Is that the purpose of the Bill?

I would presume that should be the case.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. - [Mr Wong Kan Seng].

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

Resolved,

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

Order for Second Reading read.

5.05 pm

Mr Speaker, Sir, I beg to

move, "That the Bill be now read a Second time".

Background

Currently, the Registry of Companies and Businesses (RCB) is responsible for the incorporation of companies and the registration of businesses. It seeks to ensure that companies and businesses comply with the relevant laws, and maintain a repository of financial reports and business information. The Public Accountants Board (PAB) registers and regulates public accountants who are qualified to sign off companies' accounts as auditors. It also maintains professional auditing standards.

Rationale for merger

As part of our efforts to promote a more conducive business environment, we have been moving towards a disclosure based regime for business regulation. This requires enhancing our regulatory framework for monitoring and enforcing companies' compliance with disclosure requirements and accounting standards.

Sir, it is with this objective that the Government announced its plans to merge RCB and PAB in May last year. The merger will achieve synergies between the monitoring of companies' compliance with disclosure requirements and the regulation of public accountants performing statutory audit. This merger will consolidate within a single Government entity the expertise to carry out these functions effectively.

Accounting and Corporate Regulatory Authority

The Accounting and Corporate Regulatory Authority Bill provides for the formation of this new statutory board on 1st April 2004. To reflect its role as a regulator of corporate entities, businesses and public accountants, the statutory

board will be called the Accounting and Corporate Regulatory Authority, or ACRA for short.

ACRA's mission will be, "to provide a responsive and forward looking regulatory environment for companies, businesses and public accountants, conducive to enterprise and growth in Singapore." ACRA will maintain a strong focus on issues concerning businesses, such as developing the corporate law framework, accounting, and corporate governance. It will also register and regulate public accountants who act as auditors of companies.

As a regulatory agency, a substantial part of ACRA's work will be to ensure that companies, businesses and auditors observe relevant standards and comply with legal requirements. However, an effective enforcement regime cannot rely solely on tough penalties for offenders. ACRA will promote greater awareness and understanding of the requirements and standards. It will engage its stakeholders regularly through public consultations.

Another important aspect of ACRA's work is to promote a business-friendly environment. This is fundamental to our drive to make Singapore an attractive global hub for business. ACRA will support the work of the Council on Corporate Disclosure and Governance, a private-sector led committee set up to prescribe accounting standards in Singapore and advise the Government on corporate governance and disclosure matters. ACRA will also work closely with other Government agencies as well as professional organisations such as the Institute of Certified Public Accountants of Singapore and the Singapore Institute of Directors to maintain high auditing standards and to help companies adopt good disclosure and corporate governance practices.

To achieve its mission and meet the

challenges ahead, the ACRA Board will comprise private sector representatives and professionals as well as people from the public sector and academia.

Main povisions in the Bill

Sir, I shall now highlight the main features of the Bill. Parts I and II of the Bill establish ACRA as a statutory board under the purview of the Ministry of Finance. Specifically, clause 5 empowers the Minister to appoint up to a maximum of 16 Board members, with two appointed in their capacity as representatives from the Institute of Certified Public Accountants of Singapore.

Part III sets out ACRA's functions and powers which are essentially those already undertaken by RCB and PAB today. In addition, ACRA will represent the Government internationally on matters relating to the registration and regulation of business entities and public accountants, and promote public awareness on new business structures, compliance requirements, and corporate governance practices.

Part IV of the Bill sets out the provisions for the appointment of the Chief Executive and officers of the Board. It also gives protection from personal liability to an officer or employee in discharging his duties in good faith.

Part V specifies that ACRA will be set up as a self-funding statutory board with full revenue retention. Clause 16 of the Bill requires ACRA to submit a copy of all annual estimates and supplementary estimates to the Minister for Finance, and to publish a summary of the estimates in the Gazette.

Part VI of the Bill provides for the transfer of property, assets, liabilities and employees to ACRA. Existing staff of RCB

and PAB will be transferred to ACRA at no worse-off terms than today. Part VII contains legal provisions for the effective functioning of the Authority.

Sir, in closing, let me reiterate that the formation of ACRA will synergise the expertise of RCB and PAB. ACRA will be well placed to advance our corporate governance, financial reporting, and disclosure standards.

Sir, I beg to move.

Question proposed.

Mr Speaker, Sir, I stand in support of the Accounting and Corporate Regulatory Authority Bill.

In these days of complex business environment governed by various laws and regulations and, in some ways, confusing to our new businesses, it will be convenient for corporations to refer to one authority for answers on company matters and for accountants to refer to it for clarification when circumstances require it. Since businesses have to follow the frequent changes to the Companies Act as well as the rules governing accounting and its reporting, the Accounting and Corporate Regulatory Authority should be the agency to reach out to for clarification.

The formation of ACRA will also help the Authority understand the business risks that accountants and businessmen take, as well as the regulatory web that businesses have to go through in their pursuit for profits. This is now possible as clause 6(1)(a) allows ACRA to administer both the Accountants Act and the Companies Act together.

Reaction to changes in the Companies Act will influence the way accountants advise their clients, especially when it comes to external reporting. Complying

with the latest standards in financial reporting would be easier to encourage when it becomes enforceable under the powers possessed by ACRA. In the United Kingdom, statutory standards in accounting are set by the Companies Act, which provides detailed provisions governing accounting and auditing of companies. Such close correlation between the Companies Act and its reporting requirements makes it easy to respond to market changes and demands.

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The formation of ACRA will mean that the Government regulatory arm will be far-reaching in respect of influencing how businesses report their financial performance and as to how businesses govern their affairs. The collapse of corporate icons of Enron and WorldCom has shown that corporate disclosures in the US and other jurisdictions are lacking and that there is plenty of room for improvements. Furthermore, the ACRA will no doubt be emphasising more on matters such as corporate disclosure in response to the introduction of the Sarbanes-Oxley Act of 2002 in the US. The next question on everyone's mind would now be on the style and manner which ACRA would take in influencing changes and enforcement of regulatory requirements.

Public reporting is a public interest activity and places the responsibility on all participants in the process. These include corporate management and board of directors who have the primary responsibility in public reporting. Auditors, standard setters

and regulators all have a part to play to improve the information process to the public. Let us also not forget the lawyers, investment bankers, analysts and credit agencies. It is only when everyone places primary

importance on this role, and subsequently a change in attitude to responsibilities, will the credibility of financial information be raised. Such recognition will also lead towards better business ethics and a strengthened business culture.

Sir, I would like to suggest further that the Singapore approach to greater responsibilities in public reporting be much less dependent upon regulation, but to try to strike a balance between regulation imposed by authorities and reliance on market mechanisms. Legal requirements should be viewed as a necessary minimum, while self-regulation should still be encouraged wherever possible. Statutory regulation still has a part to play but should not be the mainstay of the new Authority. Primary legislation, for example, should contain a general (rather than a specific) obligation on the part of listed companies to make continuous disclosures. All these can also lead to less bureaucratic costs when transparency is not via the legalistic route but instead by self-regulatory market mechanisms.

There is also the question of speed in introducing new laws. It has been known that lawmakers and standard setters have been engaging in a catch-up game in the mushrooming use of innovative derivative products. While the time taken to produce innovative derivative financial instruments may only take months, the time taken to implement new security legislation to govern their use, and accounting rules to determine how one should report them in the company accounts, can take years. Thus, putting excessive confidence in a legalistic approach may lead to a less innovative business environment when corporations fear using new instruments without the comfort of the law.

Furthermore, under the legalistic approach, there may be a reduction in performance reporting from companies to investors as they do not try to understand

what information is needed to communicate to investors, in order to most effectively explain their business model. Instead, they focus on what regulators have set out as important to investors. In such a reporting environment, there is little room for best practice since satisfying regulatory requirements is all that is needed.

Looking at the countries around us and the competition posed, we have to ask, how much attention will East Asia play to the rush to be more transparent and to take corporate governance seriously. I believe that a lot will depend on the political will of each government. But the introduction of this Bill will hasten the need for other countries to follow suit, not because it is a legal requirement but because good corporate governance will help to draw new capital. Take, for example, when CalPERS (California Public Employees Retirement System), one of the largest institutional investors, in February 2002 pulled their investments out of companies in Indonesia, Malaysia, Thailand and the Philippines, citing concerns over corporate governance, badly needed capital dried out. I believe that the competition for new capital will push the need for good corporate governance among the countries in this region.

Finally, when ACRA exercises its role in the marketplace, we must not allow it to remove the risks associated with investing. Capital market works well with the presence of risks, and ACRA should instead ensure that every corporation play by the rules with investors having access to reliable information needed to make prudent decisions, and that everyone who violates the law is held accountable.

Sir, I look forward to a more dynamic marketplace with the passing of this Bill.

Sir, with the introduction of ACRA, I would envisage that the authority will enhance and improve the grounds for greater corporate governance that is the order of the day. I hope that an enlarged entity will provide the requisite resources that will further the development and encourage a culture of good governance and reward systems for good behaviour in the regulation of companies. This will result in immense benefit to the corporate and business scene in Singapore. Furthermore, potential synergies or other efficiencies that will arise from the merger of the various functions may provide for a more efficient regulatory and administrative service.

I would like to express my support for the proposed Accounting and Corporate Regulatory Authority Bill. However, Mr Deputy Speaker, Sir, there are some areas that I would like to seek further clarification from the Minister.

The former Registry of Companies and Businessess served a mainly administrative function. But it appears from the provisions that the new authority is meant to be granted greater policing powers. I would like to know how the authority is meant to exercise its powers in a regulatory manner when other bodies, like the SGX and SIC, already administer and enforce certain elements of the aforementioned Bill. How is the authority supposed to complement the existing regulatory authorities with regard to the Bill?

Second, although I understand that the administration of a company is very much linked to that of accounting practices, I would like to hear from the Minister the specific advantages for merging an accounting regulatory body with a corporate regulatory body. At first glance, these roles are as different as chocolate and cheese. I would like to ask the Minister how he proposes to

implement these two distinct roles into one body.

The other point I would like to seek some clarification on is the fact that there is specific legislation in the proposed Bill that grants an officer or employee of the authority certain police powers. In addition, the Bill provides that when an offence under the proposed Bill is committed by a body corporate and is later proven to have been committed with the consent, connivance or neglect of a director, manager, secretary or similar officer of that body corporate, that officer of the company will be guilty of an offence. I would like to know whether this means that, firstly, the protection offered by the corporate veil has been lifted in respect of these offences committed under the law; and, secondly, whether the authority now has certain police powers and may bring proceedings against individuals as well as companies. And, if this is the case, to what extent are the officers of the authority allowed to exercise their authority, and exactly how does this fit in with the existing policing activities such as the Corrupt Practices Investigation Bureau? Does this mean that two separate police regimes will exist with regard to companies and their officers? And will offenders be liable to be charged under two separate bodies?

I would further like to ask the Minister what it means for the authority to be able to conduct its own proceedings as stated in clause 33 of the Bill. Does this mean that the authority may hold its own court and convict an individual or company for offences committed under the Bill which the authority is meant to administer? And if the authority is allowed to conduct its own court proceedings, would this not be taking away some of the authority of our judicial courts and the Attorney-General? At any rate, it would be good to understand the position of the authority and where it fits in with that of our judicial courts and the Attorney-General,

and whether the Bill might take away, perhaps inadvertently, some of the inherent authority of these two legal bodies. If there are two separate regimes of enforcement, will offenders likely to be charged two times and receive two penalties?

The last issue I would like to raise is related to the fact that under the new Bill, the authority is allowed to form companies and enter into stakeholdings with existing companies. Given the fact that the authority is supposed to administer and police the Companies Act and related Acts, I would like to ask what is the rationale behind allowing the authority to enter into such transactions. How will the authority police companies in which it has an interest? Natural justice dictates that no appearance of bias should be present and therefore to allow the authority to enter into such transactions and police such companies itself may seem to be a case of conflict of interest.

Mr Deputy Speaker, Sir, save for the further clarifications and understanding I have sought from the Minister, I would support the efficiency that is brought about by the creation of ACRA.

Mr Deputy Speaker, first, I would like to thank the Members for their support and for raising the concerns and clarifications.

First, let me assure the House that the setting up of ACRA will not in itself lead to the imposition of more regulations or greater enforcement actions on companies and businesses. That is not our intention. Our intention of combining the two entities really is because we see complementarity in the way they execute their functions and therefore it makes greater sense to put the two entities together. Putting the two entities together will enable us to create a statutory board of about 100 people, which gives us a decent size to attract

talent, provide better career development and have a repository of expertise to follow international developments, keep up with best practices and so maintain the right regulatory environment for Singapore.

I would like to assure Dr Gan that all the concerns that she has about greater policing powers and offences, prosecution of offenders and ACRA conducting its own court proceedings are unfounded. The whole idea of merging these two is to get the efficiency and to make sure that we are able to keep up with international practices more speedily, like what Mr Andy Gan suggested. So, putting the two entities will not create more onerous responsibilities on the companies or businesses. What we want is a single entity, as Mr Andy Gan alluded to, that allows companies to refer to, interact with, for interpretation of the Companies Act, for we will have a single entity to champion the changes that we need to keep up with the developments around the world.

Where would the complementarity or synergies be derived? As I said, if we have two separate groups, we in fact have two very small entities - the Registry of Companies and Businesses and the Public Accountants Board. In fact, they need people from the small background - accountants, lawyers, professionals - and putting them together gives us a better structure to manage the career development and the professional training and upgrading of their staff. We also need a mechanism by which the single entity can interact with the private sector through committees, councils and public consultations, so that the private and public sector work closely together in dealing with the new and changing global environment. As Mr Andy Gan pointed out, there is greater competition, and for Singapore to succeed as a hub for global

businesses, if we are able to establish clear rules, a very conducive pro-business environment, good practices, good corporate governance, I think that will add to our competitive advantage.

So that is the whole idea of ACRA. ACRA will work with the private sector and make sure that we strike this balance of having the right regulatory rules in place, proper observance and compliance of these rules, and at the same time not making it too onerous

so as to make sure that we have a very competitve environment.

So I think, with this assurance, I hope both Members will feel that the creation of this entity would lead to further promotion of business in Singapore and not be seen as a further obstacle.

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 Lim Hng Kiang].

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

Order for Second Reading read.

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

Introduction

This Bill before the House seeks to repeal and re-enact with amendments the Accountants Act (Cap. 2), in conjunction with the establishment of the Accounting and Corporate Regulatory Authority, or ACRA.

Public Accountants Oversight Committee

ACRA will be responsible for administering the Accountants Act. This includes the registration of public accountants, accounting corporations and accounting firms, as well as the regulation of the auditing practice.

Part II of the Bill sets up a Board committee, to be called the Public Accountants Oversight Committee, or PAOC for short. The Committee will comprise representatives from the public and private sectors, including at least one public accountant. The PAOC will assist and advise the main ACRA Board on matters pertaining to the regulation of public accountants. The main ACRA Board will focus on strategic and policy-related issues.

Regulatory framework for public accountants, accounting corporations and accounting firms

Parts III to VII of the Bill strengthen the regulatory framework for the audit profession in Singapore.

Accounting firms

First, this Bill sets up a Register of Public Accounting Firms, in line with the regulatory framework already in place for individual public accountants and accounting corporations. It allows ACRA to take disciplinary action against errant accounting firms. This is consistent with the practices in leading jurisdictions, such as the US and UK.

Second, the new Accountants Act will require only two-thirds, rather than all, of the partners of an accounting firm to be public accountants. This allows firms that engage in tax or corporate secretarial work, in addition to audit work, to register as accounting firms. As long as two-thirds of the partners in their firms are already registered as public accountants, partners

who do not perform audit work no longer need to register as public accountants.

Third, this Bill deregulates the "Certified Public Accountant", or "CPA" title. All accountants, including public accountants, will be free to use titles indicating membership of professional organisations or accountancy degrees. As a safeguard against fraudulent representation, the Accountants Act will prohibit a person, body corporate or firm who is not registered by ACRA from practising as, or holding out to be, a public accountant, accounting corporation, or accounting firm.

Registration criteria for public accountants

The registration criteria for public accountants will continue to include qualifications, practical experience and membership in a professional association. With regard to membership in a professional association, the Institute of Certified Public Accountants of Singapore, or ICPAS, will be the only professional association recognised for this purpose, at least for the time being.

ICPAS will transit from a statutory body to a non-statutory society for the accounting profession in Singapore. This is consistent with the practices in other leading jurisdictions such as the UK, the US and Australia, and will be similar to the approach that we have adopted for other professionals, including the architects, doctors and engineers. The Bill transfers ICPAS's assets, liabilities, employees and members to its successor entity. To further facilitate the transition, the current ICPAS Council will serve as the interim governing committee of the successor entity until new elections are held.

Practice monitoring programme

Part V of the Bill formalises the Practice Monitoring Programme, or PMP.

This is a key provision in strengthening the regulatory framework for public accountants. Through the PMP, the PAOC will monitor the professional standards and practice of public accountants.

Clause 34 provides for the establishment of a Practice Monitoring Sub-committee to assist the PAOC in designing and implementing the PMP. PAOC will have the powers to take action against public accountants who fail PMP reviews, including the recommendation of remedial steps to improve professional practice, restriction of practice, suspension and de-registration. The Bill also provides public accountants an avenue of appeal to the High Court against decisions of the PAOC.

Two-tier disciplinary process

Let me now turn to the two-tier disciplinary process. Part VI of the Bill sets up a two-tier disciplinary process comprising the Complaints Committee and the Disciplinary Committee to process complaints against public accountants. The improved disciplinary process is modelled after the legal and medical professions in Singapore.

All complaints will first be evaluated to determine if a prima facie case has been established for the setting up of a Complaints Committee. The Complaints Committee will review the case to determine whether the case is to be dismissed or whether it necessitates a letter of advice or warning to the errant public accountant, accounting corporation or accounting firm. If the case requires further investigation, the Complaints Committee will recommend to the PAOC to constitute a Disciplinary Committee to hold a formal inquiry. The Disciplinary Committee will recommend to the PAOC the appropriate disciplinary action, including de-registration, suspension,

restriction of practice, imposition of penalty and censure.

Penalties on professional misconduct

The Bill increases the maximum penalty that may be imposed on an errant public accountant, from $5,000 to $10,000. In addition, the Bill sets at $100,000 the maximum penalty that may be imposed on an errant accounting firm. The higher penalties are necessary to serve as a deterrent against professional misconduct.

Conclusion

Sir, in closing, I would like to thank the Institute of Certified Public Accountants of Singapore for giving valuable feedback in the drafting of the Accountants Bill. ACRA will continue to work with all its stakeholders to ensure a smooth transition and to uphold a forward looking regulatory framework for the auditing profession.

Sir, I beg to move.

Question proposed.

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