Hansard, 2008-08-26

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2008) To (2008) Mdm Ho Geok Choo 26 Aug 28 Aug Ms Irene Ng Phek Hoong 26 Aug 31 Aug Mr Lee Kuan Yew 26 Aug 26 Aug Mr Ong Kian Min 26 Aug 27 Aug Mr George Yong-Boon Yeo 21 Sep 16 Oct

ABDULLAH TARMUGI Speaker Parliament of Singapore

1. Mdm Ho Geok Choo asked the Acting Minister for Manpower what interim measures are in place to help the lower income group, especially the older workers, cope with the economic restructuring taking place in Singapore such as outsourcing and a shift towards the service economy.

Acting Minister for Manpower): Sir, as our economy

continues to restructure in response to the changing environment, new jobs will be created that will require new skills. In particular, more jobs will be created in the services sector which will require workers to have service skills.

To help low-wage and less-skilled Singaporeans cope with the changing jobs landscape, the Government has introduced several initiatives under the Workfare programme. The Workfare Income Supplement (WIS) scheme was launched in 2007 to encourage older low-wage workers to work by supplementing their income and improving their retirement savings. So far, about 300,000 workers have received approximately $300 million for work done in 2007.

Another key thrust under Workfare is "Higher Skills for Better Jobs". The aim is to upgrade the skills of low-wage workers so that they can find higher value-added and better-paying jobs. This is done through expanding the Workforce Skills Qualification system (WSQ), promoting training in employability skills and providing more accessible training funding for workers.

For example, WDA has developed the WSQ Certificate in Generic Manufacturing Skills which trains and certifies a set of portable skills that are applicable across the manufacturing industries. This will allow a retrenched worker to certify his existing manufacturing skills, acquire and certify new skills required to transit to other growing areas in the manufacturing sector, such as aerospace, pharmaceuticals and petrol-chemicals.

To help Singaporeans move into the services sector, WDA has launched the Certified Service Professionals (CSP) programme to provide training in foundational service skills. This is especially useful for workers with little or

no experience in the service sector. Furthermore, workers can also tap on the various WSQ training programmes for specific service industries such as tourism, retail, F&B, healthcare and community and social services. A total of 20,878 workers were trained in 2007 under the various WSQ programmes for services.

We have also worked closely with our tripartite partners, NTUC and SNEF, to introduce the Tripartite Advisory on Responsible Outsourcing Practices, which serves as a useful reference for end-user companies to ensure that the workers employed by their third-party contractors, receive basic employment terms, including CPF contributions and minimum employment benefits.

Three supplementary questions. My first question is with regard to the Re-employment Act. I am just wondering whether, as it stands, it is sufficient to protect the older workers. There are fears actually among older workers that they might be discriminated against, especially when it comes to the payment of wages. I would like to have his comments here.

Secondly, I am also wondering how we can actually encourage employers to be more embracing of this older workforce. To date, are there statistics to show that indeed we have been quite successful in encouraging employers across the board to employ the older employees?

The third question really has got to do with the fact that, given the higher illiteracy of those in this higher age group, how are job creation opportunities and the relevant training programmes that are available being communicated to this group of people?

Sir, the Re-employment Act will require companies to

offer jobs to their workers by 2012, once the workers have reached their retirement age. This is promotional effort to encourage companies to do it now. In fact, through the Tripartite partners, we are trying to encourage companies to start doing it now, even before the Act kicks in. This is a long-term view in helping older workers but, in the meantime, there are schemes that are encouraging companies to employ older workers, including those who may not be employed for a long period of time of, say, six months or longer.

How to encourage older workers to be embraced by companies? Again, this is done through promotional efforts but, apart from that, we are also encouraging companies through programme like Flexi-Work, to employ older workers and those who have not been employed for some time, through part-time work. Through this scheme, employers stand to get support of up to $100,000 if they employ workers above 35 and keep them in the job for some time.

How do we communicate to older workers? There are various means through the mass media, in particular, and through self-help organisations and grassroots organisations. One big way in encouraging older workers to remain employed and to keep their job, is through the Workfare Income Supplement (WIS). $300 million dollars has been disbursed to about 300,000 workers. Information has been passed, through grassroots organisations, to encourage those self-employed who have not signed up for WIS to come onboard. Our long-term view is to encourage workers to work, to have a source of income to support their family and at the same time to protect their long-term interest into their retirement. And that is why we would like workers to come to work, encourage them to contribute to their Medisave and have some savings in their CPF and Medisave to see through their retirement.

We will do whatever is necessary to reach out to more workers in future.

Mr Speaker, Sir, I would like to ask a follow-up question of the Senior Parliamentary Secretary. On the WIS scheme, would the Ministry review the scheme so as to exclude the overtime and bonus from the computation of $1,500 salary ceiling? Because including overtime and bonus is actually penalising workers who work hard and it, of course, is a disincentive for low-income and older workers.

Sir, the WIS is a new scheme to replace the old Workfare Bonus Scheme. We said that we will review it in a few years and when it comes, we will take in feedback from MPs and grassroots organisations on what more that can be done, if necessary, to help older low-income workers.

Mdm Ho, last question.

I want to thank the Senior Parliamentary Secretary for his very comprehensive answer. But I just want to check whether we have statistics to show the extent of participation by employers in the re-employment of the older workforce. I appreciate the range of programmes available. It would seem that if there are employers who are keen to take the older workforce, they can go and apply to the available schemes. Is there any demonstrated effort on the part of MOM to engage employers to really "walk the talk", so to speak.

Sir, yes, together with our tripartite partners, NTUC and SNEF, we reach out to employers to employ older workers, to train their older workers and to even employ older workers and those who have not been working for six months or longer, through part-time work. All these things are meant to help the low-income and low-educated Singaporeans who may need extra

assistance by both the employers as well as the Government in making sure that they can be financially independent and can look after themselves after their retirement.

2. Ms Sylvia Lim asked the Acting Minister for Manpower whether easy access to foreign labour in service industries is counterproductive to encouraging employers to upgrade the skills of Singaporeans and undermines Government retraining efforts in service industries.

Sir, Singapore has limited local manpower. Foreign manpower has helped to augment our local workforce and enabled our economy to grow beyond our own indigenous workforce alone can support. Nevertheless, access to foreign labour is regulated. This is done through the dependency ratio as well as through the foreign worker levy. In services, for example, the dependency ratio is 50% with the foreign worker levy up to $450 for unskilled workers.

The presence of foreign workers does not hamper the training of our workers. Based on a survey released by MOM last year, the level of employer-supported training has been rising from 2002 to 2006, a period when foreign employment also grew. In 2006, 72% of private sector establishments provided structured training to their employees, a substantial increase from the 52% in 2002.

As I mentioned in yesterday's reply, the Government has invested heavily in Continuing Education and Training (or CET) programmes to help our local workers to upgrade their skills so that they can take on better jobs. Under the

CET Masterplan, we have started by investing an additional $800 million into the Lifelong Learning Endowment Fund this year to ramp up our efforts significantly by expanding the number of good-quality training places in growth sectors. In 2007, the total number of persons who received training under the Workforce Skills Qualification (WSQ) system was 68,000, more than double the 31,000 persons trained in 2006. More specifically, 21,000 persons were trained in the services sector in areas such as food and beverage, tourism, retail and finance.

Sir, two supplementary questions. In MOM's recent annual report on wages released in 2008, it was reported that there was wage stagnation for the lowest income earners for the last 10 years and the economists attribute the presence of foreign workers as a downward pressure on residents' wages. Does the Minister agree with this assessment or that there is a cause-effect in this relationship?

Secondly, in the Institute of Policy Studies Conference in 2007, economists noted that relaxed policies on foreign workers and the immigration have created a new economy where the lower wage workers are losing out. It was stated that large scale import of unskilled labour has its pros and cons and that we should do a detailed study on the cause and benefits of such policies. Is the Government indeed commissioning an independent study into this question? If so, could we have some details? And if not, why not?

Sir, let me explain. Wages of a job depends on several factors. Firstly, it depends on the value of the job, the skills involved, the knowledge content of the job, and it also depends on the productivity of respective workers, the affordability of a company to pay and the performance of the company. It also

depends on the supply and demand of workers in the particular industry.

For services, let me give an example, since this question was on services. In 2007, total wages went up by 5.9% in the overall economy, and services sector wages went up by 6.5%. And services sector is a sector with a growing number of foreign workers in 2007, and therefore the hypothesis that foreign workers depress wages is a very simplistic conclusion which may not be true.

Secondly, I would also like to share that there were certain segments in our employment market where these sectors tend to have more older people and these sectors include the labourers, cleaners as well as contract workers. And these older workers, in the past, had not been working. If you look at the employment rate of older workers, aged 55 to 64, the employment rate has improved significantly. Over the last three years, it went up by nine over percentage points to 56% last year.

With this increase of supply of older workers who generally have a lower education level and lower skill sets, they tend to take on jobs that are easier to do and have lower entry barrier. As a result, the salary would generally be lower. We hope that we will be able to help these new workers to progress and upgrade. We do that through a number of measures. First, we try to engage these workers and reach out to them. We want to, first, encourage them to work. Therefore we want to provide a relatively easy entry point for these workers to come in and

we give them the minimum skills so that they can start working and earn a decent income. After that, we want to find ways to reach out to them, to give them training and upgrading so that they can upgrade to a better job and earn better income. We also go through job redesign, to help redesign these jobs in the lower wage area – one example is

the cleaning industry and another is the security industry – to enhance the values of these jobs. As I mentioned, wages also depend on the value of the job. And through enhancement and job redesign, we hope that the jobs would be able to pay better.

Finally, even for these lower wage workers, as my Senior Parliamentary Secretary mentioned just now, we also provide Workfare Income Supplement to help them improve their overall takings to support their family income. We have looked at the wage structure of our employment landscape. We think that it is more important for us to focus on training and upgrading. A very important question is, how can we improve our training and upgrading? Continue to press on with our CET, to equip our workers with skills, so that they can continually upgrade themselves and improve their income.

Mr Speaker, Sir, I would like to ask the Minister whether he could update the House on the status of the Train and Place and Place and Train, in particular, with respect to the perception of employers that to recruit our own locals may actually end up in a loss of productive time because of the fact that once the local recruits have entered the workforce, they would have to be sent for training and therefore there is this tendency amongst the employers to go for the foreign workforce.

Sir, in the jobs that require skills, even for foreign workers when they arrive, they will still need to take time to be familiar with the environment. So this does not put our local workers at a disadvantage. In fact, local workers would have gone through some basic training that we provide through WDA and our various programmes. So I think it is important for us to continue to emphasise our Place and Train as well as many other programmes.

One example that I would like to share is something that we have just recently launched. It is called the Step-Out Programme. This is targeted at women at home who have not been working or who have stopped work for some time. They may not be familiar with the working environment, or they may lack some confidence. So going through this programme will help build their confidence and be familiar with the working environment so that they also will be aware of opportunities available. And by doing so, we help to place them into jobs.

Ms Lim, last question.

Sir, the Minister has not answered my second question which was about the call by the economists at the IPS Conference for a detailed study to be done on the pros and cons of our current foreign worker policies, and my question was whether the Government is doing one or considering to do one and, if so, can we have some details. If not, why not?

Sir, I beg your pardon. I forgot about the second question. In fact, the Government has always been monitoring the effect of foreign workers on our overall employment market. We want to make sure that these foreign workers, while adding flexibility to our labour market, will not create problems for our local employees. As we can see, over the last few years, during the recession period, there was a significant reduction in the number of foreign workers and that is in response to the economic cycles. And during the same period, we also see the impact on local employment. Although the local employment has also come down, the extent is much smaller than the impact on foreign workers. So to answer Ms Lim's question specifically, there is no need to do an independent study. In fact,

the Ministry is monitoring and studying the issue continuously because this is something that we need to respond and react quickly when the market changes. It is something that we will continue to monitor.

3. Mdm Halimah Yacob asked the Deputy Prime Minister and Minister for Home Affairs what measures have been taken to address the problem of a severe shortage of officers in the Immigration and Checkpoints Authority.

4. Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Home Affairs how long will the Government's study on Home Team resources take and whether interim measures are being put in place to ease the situation.

5. Ms Sylvia Lim asked the Deputy Prime Minister and Minister for Home Affairs how far has the morale of the Home Team been affected by the recent security lapses and what are the implications of this on the security of Singapore.

Sir, with your leave, if I can take Question Nos. 3, 4 and 5 together?

Yes.

Sir, on 21st July 2008, I had said that the Ministry of Home Affairs has directed that a human factor study be conducted to look at operational fatigue, and the level of workload and resources within the Home Team. The questions raised by Mdm Halimah and Ms Lim on the morale and resource situation in the Home Team can

be answered by looking at what the study has found so far.

In July 2008, the Ministry of Home Affairs formed a committee ("Committee") comprising in-house psychologists and scientists to study the human factor situation within the Home Team.

That Committee found that the fundamentals in Home Team are generally sound. Officers are committed to their work and they believe that they play an important role in keeping Singapore safe and secure. However, over the years, our officers have had to cope with increased workload, in terms of both sheer volume and complexity in the post-September 11 security climate. While work volume was high, many officers still feel that they can cope adequately with the demands of the work. But, in some areas, the Committee found that officers felt overstretched, strained and stressed. Overtime and extra shift work were perpetually required, and officers had to cancel their leave to return to work. Many even had to give up some of their annual leave to meet the exigencies of service.

The Committee also found that some of the most taxed areas of the Home Team are those that deal with the general public. Unfortunately, the experience of the officers has been that, from time to time, they encounter extremely demanding, unreasonable or even abusive members of the public as they discharge their duties.

In general, the growths in population and traffic at the checkpoints have outstripped manpower growth in the Home Team. In some areas, this has taken its toll on our officers. Apart from the sheer volume increase, the Home Team also had to deal with new areas, such as in casino regulation and counter terrorism; and Terminal 3 and the Budget Terminal have added to the demands. Security coverage for major events, such

as the IMF/World Bank Annual Meeting in 2006 and the ASEAN Summit in 2007 has also been very taxing.

In addition to the increased demands that I have listed, another pressure on manpower in the Home Team is that, in recent years, there have been more resignations due to the economic boom. Pay in the private sector became more attractive. However, the 2007 pay review for the civil service has helped to reduce the outflow.

Ms Lim asked about the impact of the security lapses on the morale of the Home Team and the implications on the security of Singapore. Our officers take pride in their work. They know that Singaporeans expect high standards of them. There was disappointment that lapses occurred and a determination and resolve to do better. But there was also a strongly held view that some of the reactions to the errors were not proportionate. I had, on 21st July, tried to give a sense of how important it is to view security in its complexity and always in its operating context. It is important that we be fair to our officers, even as we expect the best from them.

There has been intense scrutiny and at times harsh comments passed on the Home Team. But our officers are resilient. They remain dedicated to their work and are determined to set things right. Time and again, Home Team officers have performed well and risen to challenges under pressure. DPM Wong made an important speech in his recent National Day Observance. He gave his categorical assurance to Home Team officers that all of us appreciate their situation. He added that the Ministry will maintain a pragmatic balance and proper perspective when assessing their performance, rather than simply focusing on lapses only. Our officers have been greatly encouraged to know this.

Mdm Halimah and Ms Lim asked what is being done to deal with the resource shortage. So far, we have tried to cope with the increased demands through outsourcing, introducing technological solutions and other such measures. However, in security work, these cannot be total solutions. People are at the centre of any security system and we need enough good officers to do the job.

In this regard, we have instructed the Home Team Departments to step up recruitment. We are also reviewing our employment criteria and job scopes to see if we can accept new sources of manpower in specific areas. For instance, we have already started re-employing retired officers. They are experienced and attuned to the needs of the organisation. If emplaced in the right jobs, they can start contributing straightaway once they are re-employed.

But the fact remains that we will need more resources to cope with the increased demands. And the Ministry of Home Affairs has discussed this with MOF, and MOF has assured the Ministry of Home Affairs of its full support to ensure that the Home Team has adequate resources to meet these demands.

The Committee of psychologists and scientists has also reviewed behavioural science studies that calibrate appropriate manning levels for various types of operational processes. The idea is to find the point where our officers feel sufficiently challenged and operate at peak efficiency, without feeling overwhelmed and fatigued. This is something which we think will be useful and serve as a basis for resource requisition.

The Committee has also done a best practice survey of the measures that can mitigate human errors and recommended

them to the Home Team Departments. For instance, many industries, such as the US aviation sector, have a near miss reporting system. A near miss is an unplanned event that had the potential to go wrong. Identifying near misses allows problems to be surfaced and improvements to be made early. We are also looking into refining the existing system of "after action reviews" to ensure that mistakes and learning points are transmitted more thoroughly to all the officers on the ground. The Office of Chief Science and Technology Office in the Ministry of Home Affairs has also embarked on a review of system interfaces to make them more user friendly and compensate for human oversight.

In conclusion, Sir, Home Team officers remain dedicated to the mission of keeping Singapore safe and secure. This is reflected in the sacrifices they have made over the years and continue to make every day. I am confident they will rise to meet the challenges ahead.

Sir, the Minister mentioned just now in his answer that attrition among officers has risen due to private market being an alternative career. Has MHA also done any study on push factors that may have caused the officers to resign and what are the key push factors involved? Secondly, Sir, in the Minister's response during the Adjournment Motion at the last sitting, he mentioned the number of overtime hours clocked in by the immigration officers and that came as a surprise to most of us because it seemed quite a large number of overtime hours. Is the Ministry saying that there should actually be a certain number of overtime hours done by the immigration officers and what is the ideal range of overtime hours done or was it something that should have been picked up earlier and perhaps recruitment stepped up earlier?

Sir, when we look at the resignation rate for our officers, for example, if you look at the senior officers, it has gone up from 3.2% to 3.7% and that of junior officers have in fact gone down from 3.7% to 2.3%. We will of course prefer fewer resignations but the situation, in broad terms, remains acceptable and we obviously have to compete with the market. I had said that in 2007, it was a booming market and the pay review has helped, and we believe that with redesignation of job scopes, to try and make it even more attractive and more aggressive recruitment campaign, this issue can be tackled.

Secondly, as regards the overtime hours that have been put in, to some extent, as I have tried to explain in my earlier answer, this has been caused by the exigency of the situation. Some of it could have been planned for. A number of events could not be planned for, for example, our checkpoints are beginning to handle so many passengers, particularly the land checkpoints, that they are probably among the busiest in the world. And a number of the requirements, for example, the Woodlands Checkpoints, imposed on our officers cannot be planned for because the episodic demand surges. So it has resulted in our Home Team officers having to be deployed or for us to look carefully at resource allocations to bring officers from the checkpoints which are less busy to the busy areas, and require our officers to do overtime. That is one of the areas that was studied by the Committee that was set up by the team of psychologists.

In general terms, they have found that the stresses and strains within the system are within acceptable limits. But they have identified a few areas where they feel that we are not optimising the contact point between the stress that is necessary to make any job interesting and, at the same time, making sure that

the officers are not over-stressed, and we will look at those.

Sir, two questions for the Minister.

In augmenting the Ministry's manpower stock, is the Minister also looking into tapping the back-to-work housewives, the programme that was mentioned earlier by the Minister for Manpower?

Of the overtime hours chalked up, I am just wondering whether these OT hours are being evenly distributed across the staff strength of the Home Team or are they attributed to just dedicated teams of people?

Sir, I do not think the Home Team discriminates against housewives, back-to-work or otherwise. But the requirements under the demands of the Home Team uniformed and non-uniformed officers are quite stringent. We will look at all available sources and I cannot give a guarantee targeted at specific sectors of the people who are employable.

As regards the second question as to whether the overtime is restricted to or categorised within specific departments, again, when we are dealing with the thousands of officers that we have in the Home Team spread across so many departments, I think it is difficult to generalise. There will always be areas where overtime would be more, eg, in Immigration, and there would be others where overtime would be less. But the exigencies of work in the Home Team are such that you would not expect routine office hours anyway, regardless of where you work in the Home Team.

Sir, the Minister said that, according to the psychologists who did the study, the stress level is manageable. But according to the feedback I get from the officers, the

stress is actually very stressful. So I would like to ask the Minister's comment on that.

My second question is whether there is a headcount freeze in the civil service. Is that headcount freeze applicable to officers in the ICA such that it affects the staffing requirement as to how many staff can be employed in ICA?

My next question is this: The Minister mentioned that the pull factor seems to be a very strong factor for the high resignation rate in the ICA. Will the Ministry be considering reviewing the terms and conditions of the ICA officers to make it more attractive, since their job scope, according to the Minister's description just now, seems to have expanded considerably compared to the past?

I thank Mdm Halimah for her three questions.

First, I did not quite say that the Committee found that there were no stresses and strains. To be precise, I said that, in general, they found that the stresses and strains and the job demands people felt were acceptable. But there were specific areas where they felt that officers were overstretched and over-stressed beyond what they should be, and we are looking at it. So, it may simply be that Mdm Halimah's feedback comes from those who are indeed over-stressed, and we accept that there are parts which are. That was the whole purpose of doing the study professionally, and we are looking at the findings very carefully.

Second, headcount freeze, I think, applies across the board. The Ministry of Home Affairs has not been an exception to those policies which keep the entire Government machinery lean and tight. However, within the framework of what

has been found, we would obviously have to go back and see the areas where both the complexity of the job has vastly increased and where the volume surge has been such that it is not just quantitative but qualitative, ie, that it is so increased that you do need substantially more people. But do not misunderstand me. The number of people employed in the Home Team has, in fact, increased over a period of time. But the demands on the Home Team probably have outstripped even that increase.

Third, on the question on pull factors and high resignation rate, again, I do not want to be misunderstood. In fact, I thought I said that the percentages were at three-over percent. And within the framework of any organisation, you would expect those sorts of percentages. But we want to reduce that even more because our officers get highly trained, they become very attractive to the private sector, particularly in a booming economy and, obviously, having trained them and chosen people who can meet our stringent criteria and qualities, we do not want to let them go. But this is a free market, and we have to ensure that our terms are such that they would stay with us rather than going into the private sector.

Sir, actually my question is similar to Mdm Halimah's. I had wanted to ask whether the cut in headcount in the civil service four years ago by the Ministry of Finance had actually had an impact on the shortage of staff at MHA.

6. Mdm Cynthia Phua asked the Minister for National Development (a) what is the present status of the HDB Lease Buyback Scheme; (b) what is the profile of lessees whom HDB is targeting; (c) what is the target average years of lease that HDB intends to buy back and

the intended average buy back price per lease year; (d) how is HDB going to address the concern of housing for lessees who outlive the remaining lease and those who live shorter than the remaining lease; (e) what are the common concerns of lessees who have enquired about the scheme; and (f) when is the scheme going to start.

Mr Speaker, Sir, I thank Mdm Phua for her question.

The Lease Buyback Scheme (LBS) is targeted at elderly two-room and three-room flat owners. They are generally of lower income, and need more help to monetise their flats to meet retirement needs. As this scheme is subsidised, beneficiaries must not have enjoyed more than one housing subsidy. We project that 25,000 households would be eligible for LBS. This is 70% of elderly households owning two- and three-room flats. The LBS allows the elderly to receive a lifelong income stream while staying in the same flat. HDB will buy back the remaining flat lease less the first 30 years. Let me explain. In the case of a typical three-room flat with 70 years' lease remaining and, say, priced at $220,000, HDB will buy back the last 40 years of the lease for $95,700, plus $10,000 in subsidy. In other words, about $106,000 in all. Apart from a $5,000 which will be paid upfront as a bonus, the remainder of this amount will be used to purchase a CPF LIFE Plan to secure a lifelong income stream for the flat owner. A commonly-asked question on the LBS concerns the arrangement should the flat-owner outlive the 30-year LBS lease. I want to assure Mdm Phua that no elderly will be left homeless in this scenario. One option is lease extension.

However, we do recognise that not all can afford the full price for such extension. HDB will have to assess the housing options available for each case on an individual basis, and be sensitive to the financial, health and family circumstances of the elderly concerned. On the other hand, if the lease needs to be terminated prematurely because the elderly has passed away, his estate will receive a pro-rated refund on the residual lease.

Another commonly-asked question is when the scheme will be implemented. HDB and the CPF Board are working closely together to implement the scheme by early 2009.

Sir, I have three questions.

With regard to the CPF LIFE of $106,000, what is the monthly instalment payment that the lessee would be able to get?

Since it is to be implemented in January 2009, what are the current interim alternatives that the lessees have? We know that studio apartments are also another alternative for the lower-income families to downgrade to. But currently they are all over-subscribed. What is the HDB's plan on studio apartments?

Is HDB going to build the regular two-room flats? HDB has started to build two-room flats. Are they going to build the regular two-room flats?

Mr Speaker, Sir, Mdm Cynthia Phua asked about the monthly annuity payment out of the CPF Life Scheme. For the amount that I have quoted, we would expect the figure to be around $550 per month.

On the second question as to whether there are other options from now to the time when the scheme is implemented, we think this is really a good solution to

cater to a group of elderly who probably do not have as many options as those who are staying in bigger room flats because they are living in a two- to three-room flat. But they do have a sizeable asset which they can monetise. So, we would prefer this group of elderly to wait for another six to nine months or so for this scheme to be implemented. This will be a better option than to monetise and then probably wait for a public rental flat, which is really not meant for this group who have sizeable assets. Of course, studio apartments are another option and we are building more studio apartments. More studio apartments will be in the pipeline.

On the question whether we are building regular two-room flats, the answer is yes. We are building two-room flats. In many of the new estates that we are building, two-room flats are available. In fact, they are not as well subscribed as the bigger room flats. So, once the flats are ready, they are actually available straightaway.

Sir, I understand that this Lease Buy-back Scheme is limited to those who enjoy not more than one housing subsidy because it is a subsidised scheme. Can I ask the Senior Minister of State to clarify whether this subsidy refers to the $10,000 top-up subsidy and, if so, will this scheme be extended to others who have enjoyed more than one, but without the $10,000 top-up subsidy?

Sir, I thank Mr Baey for the question.

It is correct that the reason why we have limited at this point in time to households that have received only one subsidy is because households which have received a second subsidy meant that they would have upgraded. So,

when they have upgraded from a two- or three-room to a four- to five-room or above, it is likely that they would have more options. For example, they could conceivably rent out a room to allow them to monetise as well. For that purpose, when this scheme is starting up, we are starting with a more targeted group, because this is how we can apply our subsidy to the group that really needs it. So, for the moment, this scheme would come with a $10,000 subsidy. We could consider finetuning the scheme as we go along and after having worked with the scheme for a while.

Mdm Phua. Last question.

Sir, I just want the Senior Minister of State to let us know what is the HDB's building plan in terms of studio apartments and how many are coming on-stream in, say, the next three years, including the two-room flats. If she does not have the answer, please let us know. Basically, this information is really not available in the public domain.

Mr Speaker, Sir, we welcome Members to file a PQ on that question.

7. Dr Muhammad Faishal Ibrahim asked the Minister for National Development (a) if he will provide an update on the number of Singaporeans who have defaulted on their HDB rental payments in the last 12 months, in light of the increasing costs of living; and (b) will he consider increasing the current number of rental payment categories to better reflect the different levels of affordability amongst low-income and needy Singaporeans.

Mr Speaker, Sir, from April 2007 to March 2008, there were on average 4,700 rental households in rental arrears of three months or more. This constitutes about 11% of the total rental households. This is comparable to the same period in 2006/2007.

Our public rental flats are highly subsidised. The rental rates fall into three tiers.

First, eligible households with a monthly income of $800 and below pay a fixed rental rate of $30 per month for a one-room flat. Those with a monthly income of $801–$1,500 pay 30% of market rent at about $110 per month for a one-room flat. For those earning more than $1,500 and are still staying in a rental flat, they pay 50% of the market rent at about $180 per month for a one-room rental flat.

Our rental structure is calibrated to provide subsidy where it is most needed. For the really needy with less than $800 monthly income, the rental rates have been kept very low and have not been revised since 1979. For those earning more, especially those with household income exceeding $1,500 per month, we will encourage them to consider home ownership instead of rental since they should be able to afford to buy a small flat with their CPF contribution together with the monthly rents they are currently paying.

Rental households who face genuine financial difficulty despite the low rents, may approach the Community Development Councils for help under the ComCare schemes.

First, could the Parliamentary Secretary share with us the details of the demographic distribution of those who have defaulted on their rental payments in

the last 12 months, in particular, in terms of age, as well as those PA and non-PA recipients? Secondly, in view of the impending slowdown in the economy, what steps are being taken by the HDB to help needy Singaporeans who have problems paying their rental?

Sir, on the first question, I do not have the detailed demographic profile but, by and large, PA recipients do receive substantial assistance from the Ministry of Community Development, Youth and Sports and I do not think that they form the larger portion of families in rental arrears. The majority of families who are in rental arrears are also those who are paying the fixed rent.

On the question of what HDB will do to help these families, basically, HDB is a housing authority and we continue to provide heavily subsidised and affordable rental flats for the low-income families. Low-income families who have difficulties, as I have mentioned earlier, are encouraged to go to the Community Development Councils to get financial assistance. If they are eligible and they get into schemes, eg, the Workfare Scheme, there are subsidies and assistance with regard to paying for their rentals that are within those schemes.

I would like to ask the Parliamentary Secretary two questions. Firstly, can the Ministry comment on the sudden surge of rental flats in recent months? Secondly, going forward, for those who cannot even afford a rental flat, what alternative accommodation can we provide for these people?

Sir, on the first question on the sudden surge of rental flats, I think Members will probably be experiencing this surge through the MPS cases and, as highlighted by PM at the National Day Rally, there is a surge in

the number of rental flat applicants. I think there could be many reasons, and one of them is, as some have cited, the high cost of living. Others have cited that perhaps the good property market is making people sell their flats and asking for rental flats. Indeed, I think that is one of the possibilities because when we look at the proportion of people who actually apply for rental flats, about two-thirds of them are actually ex-lessees and amongst these two-thirds, another two-thirds actually are not in arrears of their mortgage loans nor are they divorce cases who, under special circumstances, we will consider for rental flats.

So I think, often times, people see this as an option to perhaps monetise their assets given the current situation and they see our heavily subsidised rental flats as an attractive option. It is an attractive option because it is highly subsidised and I think we are very concerned, as PM mentioned, that we do not want to encourage those who are not truly needy to crowd the rental queue. So we are in the process of reviewing the rental applicants to make sure that the subsidies given to these rental housing are targeted at the truly needy.

On the second question of how do we help these cases, as mentioned, those families who are really needy will be assessed and we will continue to help those deserving cases.

8. Mr Liang Eng Hwa asked the Minister for the Environment and Water Resources whether the Ministry will consider scrapping the monthly sanitary appliances fee of $3 per sanitary fitting as there is already a waterborne fee of $0.30 per cubic metre for water used.

PUB currently charges a Sanitary Appliances Fee (SAF) of $3 per month for each sanitary fitting, and a Waterborne Fee (WBF) of $0.30 per cubic metre for domestic customers and $0.60 per cubic metre for non-domestic customers. The WBF alone is insufficient to recover the costs for used water services.

The Minister for the Environment and Water Resources had informed the House at the Committee of Supply 2008 that MEWR and PUB are looking into restructuring used water charges into a single volumetric fee. When we decide to do so, the volumetric rates will be revised taking into account PUB's cost for the maintenance of the used water system and treatment of the used water. We are studying the options and implementation details.

Sir, can the Senior Parliamentary Secretary give an indication whether this restructuring of the fees is likely to lead to an increase in the overall fee for the consumer and whether the PUB can keep any of these fee changes non-inflationary?

I thank the Member for his question. First, I would like to say that our motivation to restructure the used water charges really is to rationalise the current pricing structure. This is to remove some anomaly because some consumers with more sanitary appliances would have to pay more even if they use the same amount of used water. This is also to remove the perception of double-charging as the current pricing structure has got the Sanitary Appliances Fee component and the volumetric Waterborne Fee component.

In addition, a fully volumetric rate with no fixed charges will strengthen our water conservation message because it will be 'you-pay-for-what-you-use'. I think this is also in line with the pricing structure that is adopted in some other developed cities like New York, Los Angeles, Amsterdam, and so on. So the restructuring of the SAF and WBF per se is meant to be revenue neutral. However, the removal of the SAF, when we shift to a new single-volumetric pricing structure, would entail a structural change to the used water fee. So there will inevitably be a sector of consumers who would experience some decline in their bill size, as well as another sector of consumers who would experience some increase in their bill size.

We are mindful of the current cost environment, so we are studying the impact of this new pricing structure on the households very carefully. We have not come to a decision as to the rates to charge, as well as to the implementation date. But I would like to assure the Member and the House that we will definitely consider prevailing cost and economic environment when we decide to move, and we will seek to mitigate any negative impact on the consumers with the view to ensuring that on average most of the water users would be no worse off with the revised price structure.

The Senior Parliamentary Secretary mentioned that some will be paying more and some will be paying less. Is there any indicator of the percentage of those who would expect to pay more or less?

We are looking at the various options, and we are looking at various pricing rates for domestic as well as non-domestic consumers. So the indication really varies, depending on the rates that we will be using. But, like I said, what we will seek to assure the House is that we will mitigate any negative impact on the consumers.

9. Mdm Cynthia Phua asked the Minister for Education in view of many schools requiring students to use laptops in their school work (a) whether there are financial assistance schemes for needy students who cannot afford to pay for the laptops and new computer programs; (b) under what circumstances will these students qualify for free laptops and computer programs from the schools; and (c) whether the Minister can give a breakdown of the financial assistance granted to needy students for purchase of laptops and computer programs during the fiscal year 2006/07 and 2007/08.

Sir, infocomm technologies (ICT) have become an integral part of students' learning in Singapore schools. There are adequate ICT facilities and computers in schools for use during and after school hours. Based on a recent survey by MOE, about 90% of our students indicated that they had access to an Internet-connected computer at home. For students without such access, some schools also loan out notebook computers to them to work on their assignments at home.

At the same time, MOE works closely with the Infocomm Development Authority (IDA) and other community organisations to help needy students gain access to an Internet-connected computer at home.

First, IDA's NEU (NEw and Used) PC PLUS Programme helps needy students to purchase desktop computers or laptops complete with software and three years of broadband access at a subsidised price

of $285 and $730 respectively. All Singapore citizens or Permanent Residents from families with gross monthly income not exceeding $2,000 or per capita monthly income of not more than $500 are eligible for the programme. Since the launch of the NEU PC PLUS Programme in end 2006, a total of about 5,000 students have obtained their computers under this programme, with 1,350 in FY2006 and 3,650 in FY2007.

Second, those who need additional help to pay the subsidised rates can tap on MOE's Opportunity Fund, which was set up in April 2006, and the INSPIRE fund set up by IDA with the industry in November 2007. For the Opportunity Fund, schools decide on the subsidy amount and the eligibility criteria. Under the INSPIRE fund, in lieu of the $285 or $730, they would otherwise have to pay for a PC or laptop, they render six to 12 hours of community service such as helping out at old folks homes and children's homes.

To date, schools have disbursed a total of about $900,000 under the Opportunity Fund and INSPIRE fund for the purchase of computers, with about $66,000 in FY2006 and about $860,000 in FY2007. This is estimated to have benefited some 4,000 students.

Thirdly, students can also seek funding support from agencies such as SINDA, Yayasan Mendaki, and CDAC, as well as their Schools' Advisory Committee and Management Committee, and the Lee Wee Kheng Fund.

In short, MOE, IDA and community organisations have put in place various schemes to ensure that as many of our students as possible have access to computers at home.

10. Dr Muhammad Faishal Ibrahim asked the Minister for Education what are the current initiatives to engage non-citizen students and integrate them within the schools and the community.

Sir, international students expose our local children to different cultures and add to the vibrancy of our schools. Efforts to integrate them within our schools and the community are important to help them cope well in their studies and have a positive experience here.

Our approach is to create an environment where both local and international students feel comfortable interacting with one another, and share common experiences. Our schools and institutions have orientation programmes to help our international students to get used to their new environment. We also create opportunities for them to engage with Singaporeans.

Schools make use of natural vehicles like school activities, co-curricular activities (CCA) and community involvement programmes (CIP) to promote interaction between local and international students. Schools are also given additional resources to mount activities which facilitate integration, including orientation programmes, learning journeys, cultural awareness and English enrichment classes. Through the school curriculum, international students learn about Singapore history and national issues through subjects like History and Social Studies. They also learn about our social diversity and the importance of racial and religious harmony though the celebration of festivals and events like International

Friendship Day, Racial Harmony Day and National Day.

Integration efforts are continued in our polytechnics and universities, typically through the International Student Office that looks after the administrative, academic and welfare needs of international students. These include orientation programmes, buddy schemes, host family programmes and a variety of campus and off-campus activities. There is a good mix of local and international students in the halls of residence to facilitate interaction.

These initiatives and programmes help international students adjust to life in Singapore, form friendships with Singaporeans and feel a sense of belonging here. MOE will continue to monitor the integration of international students, and work with agencies like MCYS and PA to see how integration can be furthered beyond the school setting in the community. Finally, the integration of international students also requires all Singaporeans to play our part, by reaching out to them and making them feel welcomed in Singapore.

Sir, I have two supplementary questions. Firstly, could the Senior Minister of State share with the House on any evaluation that has been done to assess the success of these initiatives or programmes highlighted by her earlier? Secondly, in particular, how have Singaporean students and Singaporeans generally responded to these programmes?

MOE evaluates the success of our integration programmes regularly and we are happy and satisfied with the results, but we are not resting on our laurels. We will continue to improve on the various programmes that we have mentioned. In fact, it is through this regular review process that we have improved on the

number of initiatives, for example, English enrichment and orientation programmes that help the new international students to fit into our school system, are results of such review. Singaporeans generally are accepting international students well and, in fact, in some schools, you see them celebrate their festivities together. International Friendship Day, for example, is really a time when Singaporeans and their counterparts from another country will come together and celebrate their commonality as well as their differences.

11. Mr Gautam Banerjee asked the Minister for Finance (a) what remedial action does the Government take when statutory boards do not present their annual reports and/or audited financial statements to Parliament within the six-month time frame recommended by the Public Accounts Committee; and (b) given that good governance requires timely preparation and submission of annual reports and financial statements to stakeholders, whether this is a key performance indicator in the performance evaluation of senior individuals in charge of Ministries and statutory boards.

12. Mr Gautam Banerjee asked the Minister for Finance (a) what systems are in place to ensure that all statutory boards present their annual reports and/or statements to Parliament within the six-month time frame recommended by Public Accounts Committee; and (b) what were the circumstances behind a statutory board not presenting its audited financial statements to Parliament for the previous two financial years as noted in the Auditor-General’s Report for FY 2007/08.

Mr Speaker, Sir, may I have your permission to take

Question Nos. 11 and 12 together as they are related?

Yes

Most statutory boards are required under their respective statutes to present their annual reports and financial statements to Parliament, as soon as practicable. Ministries and statutory boards have generally been complying with the six-month time frame as recommended by the Public Accounts Committee and this is a good governance practice.

The hon. Member noted from Auditor-General's Report for FY 2007/08 that one statutory board, in fact, did not present its audited financial statements to Parliament for the previous two financial years. The statutory board in question attributed this to the fact that new staff had been unaware that the financial statements had to be submitted together with the annual reports. This is, of course, not a good reason.

My Ministry has therefore issued a circular in May this year directing all statutory boards to submit their annual reports and financial statements within the six-month time frame as recommended by the Public Accounts Committee. All Ministries have also been reminded to ensure that their statutory boards comply with this recommendation in future. The Ministry in charge of the statutory board in question has, in fact, put in place a monitoring mechanism to ensure that the annual reports and financial statements of its statutory boards are submitted within the recommended six-month time frame. MOF will evaluate the situation regularly to see if further actions are needed to ensure compliance.

In the private sector, there is a

move to expedite the timing of the financial statements, and six months is quite a long period, particularly for the larger statutory boards. Is there a move to prepare financial statements on a more timely basis? Where there are exceptions and statutory boards do not prepare financial statements on a timely basis, what action is taken and what sort of penalties are imposed?

Mr Speaker, Sir, when the Ministry reviewed the reasons for the tardiness in the presentation of the financial statements, there is actually a whole range of reasons. For some statutory boards, for example, like MUIS, they actually have to seek the approval of the Minister in charge of Muslim Affairs as well as the President before they can present the reports. So, that is an actual requirement of time. Others have very specific one-off reasons and yet others have poor organisation, which is not an acceptable reason. So, the Ministry of Finance will work very closely with all the statutory boards. But the Member's point about presenting timely information is a well-taken one.

13. Mdm Ho Geok Choo (West Coast) asked the Minister for Trade and Industry what measures does his Ministry have in place to prepare the potential workforce planning to work in the Integrated Resorts to successfully adapt to the specific mindsets and outlook required by that industry.

Mr Speaker, Sir, the two Integrated Resorts (IRs) will directly create around 20,000 jobs over the next three years. Most will be in the areas of F&B, hotels, gaming and attractions. These jobs require

workers with the skills, knowledge and attitude that are similar to the requirements of tourism establishments in general. The Member has asked how we are preparing for this and the answer is that we have a plethora of initiatives.

WDA and STB have launched the TOurism TALent (TOTAL) plan in October 2007. This is to support employment growth in the tourism industry. The TOTAL plan aims to train 74,000 workers for the next three years with a budget of $360 million. There are three prongs to this plan. The first is the focus on pre-employment training (PET) for students. The second is the continuing education and training (CET) for adults and the third is industry development to attract local workers. There is already early evidence of heightened interest in tourism related courses in our institutions. The polytechnic and ITE student intake for the tourism courses in 2007 was two-and-a-half times that in 2005 and we expect this to grow further in the coming years.

WDA has also made good progress in adult training. Between January 2007 and June 2008, more than 30,000 individuals were upgraded under the Tourism Workforce Skills Qualification (WSQ) programme. These individuals, who represent a good mix of both new entrants to and existing workers in the industry, will help meet the needs of the overall industry as well as the Integrated Resorts.

Customer service is essential for all jobs in these industries. To enhance the focus on service excellence, WDA has put in place its Service Excellence Workforce Skills Qualifications (WSQ) framework. The programme equips trainees with the comprehensive set of skills and attitudes for operational, supervisory and managerial positions. To date, more than 18,000 workers have been trained under the Service Excellence WSQ framework. WDA targets to train a further 50,000 workers under this framework by 2010.

WDA also recently launched the Certified Service Professional (CSP) programme targeted at new entrants into the hospitality industry. It is a five-day intensive training programme aimed at developing the service mindset, passion and qualities required of a service professional. It is done through an experiential process involving many real-life tourism-related service applications. The target is to train 36,000 workers under the CSP programme by 2010. Beyond these broad-based programmes, the IRs could draw skilled and trained workers through these programmes. STB is working directly with tourism establishments to meet their specific training needs through the Training Industry Professionals in Tourism (TIP-iT) scheme. In fact, Resorts World at Sentosa (RWS) will be utilising this scheme to send over 1,300 of their new hires in batches to Genting Highlands and Universal Studios Park for up to three months to gain exposure to casino and theme park operations.

SPRING will also be working with the IRs on a Customer Centric Initiative (CCI) to set and maintain high service standards in the resorts. Under the CCI, SPRING will support efforts by the IRs in assessing service levels and identifying service gaps. This can then form the basis for developing service strategies and service blueprints to bring about effective and efficient service systems and processes. With the Government working closely together with our industries and the IR operators directly, we are confident that our workforce will be ready with the necessary skills, mindsets and outlook needed to work in the IRs and related areas.

Thank you, Minister, for the very comprehensive answer and it is very comforting to know that we will be ready, when the time comes.

Sir, I would like to check to what extent will the local workforce that we are gearing up be sufficient to adequately fill the vacancies needed in the IRs? Secondly, in the event that there is a gap, in terms of the manning levels, how are we to fill up these gaps? Are we opening up to the foreigners and, if we are, how are we going to ensure that these foreigners will come in with the same standard of service that we have been training our people for?

Mr Speaker, Sir, clearly, there is tightness in our labour market and that means that as we generate this new sector with growing demand for workers, there is going to be pressure on supply sources. The work and the programmes which I just elaborated, which are undertaken by STB and WDA, are to really generate the supply to meet the demand from local sources. That basically means, first, for people who are already in the industry but who may want, with some modifications and some training, able to adapt themselves to the opportunities offered by the IRs. The second is, of course, pre-employment training, that is, in schools, our polytechnics and ITEs. The third is also for those who may want to switch from other industries into this area. So those are efforts we have undertaken and we are also hoping that through this process, those who are currently not participating in the workforce, will also come forward through these programmes to get involved in these new opportunities.

Having said that, the market is tight and we do expect that there will be some difficulties for the IR operators to fill all their needs or their assured needs through just local sources. So we will have to work closely with the IR operators to see how well their needs can be met. At this stage, they are on track to meet their requirements and what they have assured

us, through their RFPs, in terms of the local component of the workforce. But we will be monitoring the situation over the next few months and years leading up to the opening of the IRs to see how we can work with them on this.

The Member also asked if we were to bring in foreign workers, how they will be prepared. This is something which the IR operators have as much of a vested interest as we do in maintaining the service quality and standard. Most of them – not just the IR operators but in general tourism and hospitality establishments – put their staff through a regular regime of pre-deployment training to ensure that minimum service standards are met and according to their specification.

14. Mr Hri Kumar Nair asked the Minister for Health (a) what standards are expected of hospitals’ ethics committees in discharging their functions and duties in reviewing applications for organ transfers; and (b) whether the Ministry intends to review past organ transfers to ascertain if the relevant hospitals' ethics committee have properly discharged their functions and duties.

Sir, the Transplant Ethics Committee's primary function is to ensure that a living donor has been fully informed of the nature and the risk involved in the proposed transplant surgery, and that his consent is given freely and not under duress or for any financial gain. They discharge this function through a thorough review of the medical and social history of both the donor and the recipient, the submitted personal documents and statutory declarations. They would also conduct separate

interviews of the donor and the recipient, before they come to any conclusion on the application. If the Committee has any doubt, they should not approve the transplant. If there is evidence of misconduct by any Transplant Ethics Committee, my Ministry will investigate. As the current cases are still before the courts, I should not comment further on them.

Sir, I thank the Minister for his response. I have two supplementary questions. First, is the Minister aware of the Sunday Times' article, following the sitting last month, highlighting a village in a foreign country, where a good number of inhabitants had traded their organs and had operations in Singapore, in particular, highlighting a case where a farmer gave up what he thought was his heart to someone he had never even met before? Second, would such cases not indicate that the procedures currently adopted by the Ethics Committee are not robust enough to ensure that donations are all bona fide?

Sir, in my many years in the health care industry, I have yet to hear of live donations of the heart. But I certainly have read the article about this village, I think in Medan, of people who sell parts of their bodies in exchange for money, and quite pitiful cases. In fact, next month, because I have to go to Manila for a WHO meeting, I am also planning a side trip to one of those villages, where there have been quite a number of those donors.

The recipients may not necessarily be in Singapore but these are donors who, for various reasons, were financially desperate enough to have to part with their kidneys. I intend to have a chit-chat with them to find out what happened after surgery.

I had shared with Members in this House last month that I intend to set up a

proper donor registry so that we can focus on how to protect the welfare and also monitor the health of live donors, including family members of cadaveric donors, where donation is altruistically made. These are some of the most wonderful people on earth and I think society ought to find ways and means to protect the interest of them and their family members.

As to our own Singapore hospital ethics committee, whether it is robust enough, as I said in this House last month, the case is still before the court. Once it is fully wrapped up, we will see whether there are loopholes and, if there are weaknesses, definitely I will fix them. But I do not think we should be recalling cases just because there has been one case and conclude that every past decisions were flawed or wrong. Many of these volunteers are very experienced individuals and they volunteer their time to do a proper job, and I do not think we should assume that all of them have been negligent or there has been misconduct.

Mdm Halimah, last question.

Sir, I would like to ask the Minister whether he does not as an inherent conflict – the fact that the ethics committee of the hospital is appointed by the hospital to approve the organ transfers and the operation is also done by the hospital itself? Is there not an inherent conflict in that arrangement? Could the Minister also share what is the practice in other countries, whether the same practice is adopted or a different practice is adopted to preserve the inherent integrity in the system?

Sir, I will take both supplementary questions together.

Indeed, the system we have here is not uniquely Singapore. It is a very common system adopted in practically all

countries where we leave such decisions to the local hospital ethics committee. And, while there is potential conflict of interest, it can be managed. That is why the composition of the ethics committee is important. We have included members who are outside of the hospital and the individuals who are appointed include not just doctors but also non-doctors. It is not a system which must lead to conflict of interest as it can be managed properly.

As I have said, when we have fully wrapped up the current case, we will see whether there are better ways of doing it. There are options like whether we can have, say, a national ethics committee, which reviews all such cases. But this committee will then be inundated because today, I think, we are doing more than 120 transplants a year. Each case will require many rounds of interviews. The workload is already quite severe and we expect the transplant rate to rise, and we hope the transplant rate will continue to rise. I think the most practical way, as adopted in practically all other countries that I am aware of, is to leave the decisions to the local level but constitute the ethics committee properly. The ethics committee members do not report to the hospital. They report to their own conscience because, if I volunteer as a member in this committee, I know I have to discharge my responsibilities. In this case, it is quite straightforward – have the donors been properly informed, do they know the risk, and have they taken a decision purely based on altruism or is it under duress or being induced by financial compensation? So, their job is to try to make a judgement. But we know that in real life, if a person is determined to lie through sworn statements, it is not easy to pick up there and then. But dishonesty will be exposed, not immediately, but after a while.

15. Mr Baey Yam Keng asked the Minister for Health how will Singapore General Hospital assess Dr Keith Goh's request to utilise the balance of $58,000 in funds that were raised for the Nepalese twins' medical expenses.

Sir, this question is not for the Singapore General Hospital or the Ministry to assess or to decide. The donation fund is managed by the Nepalese Twins Fund Disbursement Committee which includes the Nepalese Honorary Consul General.

The fund is intended for the twins' medical expenses, not just the separation surgery which has already been done, but also post-surgery long-term treatment required as they grow up in Nepal. I assume the Fund Disbursement Committee will want to preserve the fund for as long as possible, and not to allow it to be prematurely depleted. For instance, if any treatment can be competently carried out in Nepal at lower cost, I assume the Committee will prefer that the treatment be carried out there. But this is really something for the Committee to decide.

I am told that the Committee has not received any recent application from Dr Keith Goh or any other doctor for the use of the fund.

I thank the Minister for the answer. I would just like to clarify because reports said that the East Shore Hospital is supposed to apply to SGH to access the funds. So, I now hear from the Minister that there is a separate committee that is in charge of disbursing the fund. If I remember correctly, in 2000 when SGH decided to operate on the twins, that was before public donations poured in and given that now about $660,000 was given with public compassion for the purpose of

treating the twins, is MOH or SGH in any way involved in the process of assessing the application for the use of funds because we are dealing with public donations here?

Sir, like the Member, I have also read the report in the newspaper. Here is an example of not all news reports are factual. So you have to double check and the facts are what I have presented in my reply just now – that the Ministry of Health cannot be involved, in fact it is not involved, in the disbursement of the donation fund. Every time a fund is created, they will have to set up a committee with specific terms of reference and the committee has to operate within the terms of reference.

I think $600,000-odd donation was collected but what is left, I am told, is about $50,000-odd. How it will be spent will be decided by the committee within the terms of reference, which must be for the welfare of the twins. Unfortunately, Ganga has passed away, but Jamuna has survived.

16. Ms Denise Phua Lay Peng asked the Minister for Transport why is the Singapore Mass Rapid Transit (SMRT) operating as a for-profit entity instead of a social enterprise with the goal of providing cheaper, faster and better commute for the public.

I would like to assure Ms Denise Phua that having public transport operators (PTOs) as for-profit entities is not incompatible with providing high-quality and affordable public transport services. Our approach is to ensure that our PTOs are motivated to operate as efficiently as possible, within a regulatory framework that safeguards the interests

of the commuting public, so that the whole system produces the best outcome for commuters.

Ms Phua mentioned cheaper public transport. It is the PTOs' profit motive that drives them to constantly strive for efficiency and productivity improvements to reduce costs. Without the profit motive, the PTOs would have fewer incentives to continuously review their operations and services, and to introduce cost-saving innovations, such as improving manpower rostering and work processes. Experiences in other jurisdictions show that public transport services run by state-owned enterprises without the profit motive tend to have higher costs. For instance, we were informed by the transport authorities in Adelaide that costs fell by some 20% after they privatised their public transport operations. A study in 2006 showed that SMRT had the lowest operating costs per passenger amongst nine other international rail operators, of which eight were state-owned operators.

While motivated to keep costs down, SMRT is also prevented from over-charging to increase its profits by a strong regulatory price control framework. Our public transport fare increases are capped by a fare adjustment formula administered by the Public Transport Council (PTC). This fare adjustment formula has been carefully deliberated and refined over the years to ensure commuters' interests are safeguarded. It is a price cap formula, which takes into account macro-economic factors. It is not a cost-plus formula, where the cost increases of the PTOs are allowed to be passed through. This ensures that the PTOs cannot unilaterally raise fares based on what the market can bear. In fact, the fare formula has a productivity extraction component which allows commuters to benefit from the PTOs' productivity and efficiency enhancements, in the form of lower fare increases in future years. Indeed, our

MRT fares are much lower when compared against major cities such as Hong Kong, London, New York and Tokyo. And this is on a PPP (Purchasing Power Parity) adjusted basis.

Ms Phua also mentioned faster and better public transport services. To ensure that the pursuit of profit is not at the expense of service quality, we have put in place a set of Quality of Service (QoS) Standards for buses, and Operating Performance Standards (OPS) for rail. These standards specify the expected service levels and are reviewed regularly. The Government also works in close partnership with the PTOs to improve services where possible, such as injecting additional train trips during peak hours and lunchtime. The PTOs are also motivated to ensure that their services meet the needs of their customers, as their profitability improves if more commuters make use of their services. This approach has served us well. For example, SMRT recently won the 'Best Passenger Experience Award' at the inaugural Metro Awards 2008, beating other finalists such as Copenhagen Metro and MTR Corporation (Hong Kong).

Ms Phua, you have two minutes left.

Sir, public transport, like education, housing and health, is a basic key essential service that is usually provided by the State and also a key component of cost of living. So, when this is delegated to a listed company, whose objective is always to, I guess, maximise net profit margins, then there will also be tension between generating profit and providing better and cheaper services, hopefully. So, would the Government consider restructuring firms like SMRT to either agencies like HDB or cooperatives like NTUC, to reduce this tension?

In short, the Member is suggesting that public transport operators should really all be social enterprises. I think that is her basic proposition. As I have said in my answer, it is not true that if the PTOs are profit-driven, it will not serve the public interest. In fact it is because it is a commercial entity that gives it the incentive to be efficient, cost-conscious and customer-centric.

What is the public interest here? The public interest here is that you want a public transport system to be affordable and a high quality public transport system. How do you achieve this? We achieve this not by saying that every public transport operator must be a social enterprise but by introducing competition into the framework, contestability which we are doing, and have strong economic and service regulations in place to protect the commuters' interest. In the case of economic regulation, we do not allow the PTOs to profit maximise because we have a price-cap formula. They cannot charge what the market can bear. So what they have to do, because of the price-cap formula, is really to lower down their costs in order to increase their profits. Further, PTC's and LTA's service regulation is what ensures that, in the pursuit of profit, they do not compromise on service standards. Now, food is important. It is an essential. If we follow your argument, then you would say all supermarkets in Singapore should be social enterprises. But we do not have that. Yes, we have NTUC, but we also have Carrefour, Giant, Cold Storage. So, I think we should focus less on the form but on the outcome that we hope to achieve.

Order. End of Question Time.

[Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 19 and 24 on the Order Paper are reproduced in

the Appendix*. Questions Nos. 17-18, 20-23 and 25-35 have been postponed to the sitting of Parliament on 27th August 2008. ]

*Cols. 3271-3274.

Order for Second Reading read.

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

Sir, this Bill amends the Legal Profession Act (LPA) primarily to implement the recommendations of the Committee to Develop the Singapore Legal Sector headed by Justice V K Rajah. The Committee presented its report in September 2007. Specifically, the Committee recommended the liberalisation of the legal sector. The Committee stated that the following benefits will accrue as a result of liberalisation.

Liberalisation will allow the development of a legal infrastructure that is able to support an increasingly sophisticated and knowledge-intensive business environment in Singapore. This will in turn help support the growth of important sectors in the economy, such as banking, corporate finance and maritime industries.

A liberalised competitive environment will also lead to an improved level of legal services as Singapore Law Practices (SLPs) will be encouraged to rise to the levels of global legal service standards and raise service standards to domestic and regional corporate clients.

More foreign law firms will bring to Singapore a greater volume of offshore work that will otherwise not be done here, thus increasing the legal services sector's contribution to our GDP.

Allowing more foreign law firms to set up in Singapore and facilitating them

to use Singapore law will incentivise the greater use of Singapore law in international transactions. This will further boost the development of our exportable legal industry.

Opening up of our legal services sector will partially reverse or slow down the current legal brain drain of Singapore-qualified lawyers, who will be given a choice to do high quality offshore work in Singapore. There will be greater opportunities for young talented Singaporeans. Liberalisation would lead to the growth of the intellectual legal capital of our local lawyers, including in knowledge management, global partnership experience and regional management expertise.

The move to liberalise will enhance and entrench Singapore's image and position as a regional legal centre.

Several of the Committee's recommendations were accepted by the Government in December 2007. The Committee also made recommendations to improve the disciplinary process of lawyers. This Bill seeks, inter alia, to effectuate the proposals that have been accepted by the Government.

Major changes

Sir, now let me explain some of the more important amendments that provide a framework for liberalisation of the legal services sector. Liberalisation of the legal services sector

Repeal and re-enactment of Part IXA

To provide for greater flexibility to respond to changing business needs, clause 53 repeals and re-enacts a substantially amended Part IXA. Part IXA now devolves the details prescribing business conditions from the main Act to the Rules, so that amendments can be

more easily made to respond to developments in the legal market.

Three main initiatives to enhance the offshore legal services pie

In line with the emphasis on flexibility, and to align the various regimes for foreign legal entities, the registration regime applicable to existing foreign legal practice vehicles, which are the Joint Law Venture (JLV), Formal Law Alliance (FLA), Foreign Law Practice (FLP) and Representative Office, has been changed to a licensing regime. For existing registrants, transitional provisions will allow new licences to be issued on terms similar to their current registration.

Members may recall three key changes announced last December.

International Commercial Arbitration. Currently, FLPs are allowed to participate in international commercial arbitration in the context of arbitration proceedings. That is interpreted in practice to refer to the post notice of arbitration period. However, as a result, FLPs which wish to use Singapore as the seat of arbitration, or use Singapore law as the governing law for arbitration, may be discouraged from doing so as they are unable to advise on Singapore law matters before the notice of arbitration is issued. This detracts from our objective to promote Singapore as an international arbitration hub. We will now expand the FLPs' scope of Singapore law work by allowing them to participate wherever arbitration is contemplated through Singapore qualified lawyers. Clause 53 introduces a new section 130E under the revamped Part IXA to allow Rules to be prescribed for this purpose.

Implementation of the Qualifying Foreign Law Practice scheme. For the first time, the amendments allow the award of

Qualifying Foreign Law Practice (QFLP) licences to FLPs. Going forward, FLPs awarded the QFLP licences will be allowed to practise Singapore law through Singapore qualified lawyers in permitted areas of legal practice, defined in section 130A of the revamped Part IXA to refer to all areas of legal practice other than specifically ring-fenced domestic areas to be detailed in the Rules. Traditionally domestic areas, such as litigation, conveyancing, family and probate law, will be excluded. We hope to award the licences by the end of the year.

Enhancement of the Joint Law Venture scheme. At present, a Singapore Law Practice (SLP) may work together with an FLP in either an FLA or a JLV. In line with the Government's announcement last year, the Bill allows a substantially enhanced JLV scheme. The Rules will detail the additional privileges of, firstly, allowing the constituent FLP of a JLV to share up to 49% of the constituent SLP's profits in permitted areas of practice; secondly, allowing the constituent FLP to directly hire Singapore lawyers; and, thirdly, allowing partners from the constituent SLP to concurrently hold partnership and administrative positions in the constituent FLP.

In addition, a new section 130B(11) of the new Part IXA provides for discretion for the Attorney-General, with the approval of the Law Minister, to approve JLV structures that may go beyond the conditions prescribed in the Rules. These enhancements to the JLV scheme will address feedback received on the scheme since the last review in 2005 and make the JLV an even more attractive collaboration between FLPs and SLPs.

Opportunities for Singapore-qualified lawyers

These changes will open new opportunities for international commercial arbitration and, within QFLPs and JLVs,

offer new avenues for Singapore-qualified lawyers. Our lawyers, particularly the younger lawyers, will have far greater opportunities.

Traditionally, the Attorney-General has been the regulator for all lawyers working in foreign legal entities. The Law Society has disciplinary oversight of Singapore-qualified lawyers who hold practising certificates (PCs).

The amendments will now create a new category of Singapore-qualified lawyers who will be allowed to retain their PCs and practise Singapore law in foreign legal entities in the areas outlined earlier. In general, the policy intent is for similar regulatory and other requirements to equally apply to PC holders, regardless of whether they are in SLPs or FLPs. For this new category of Singapore-qualified lawyers, however, it would be quite onerous to subject them to the overlapping disciplinary jurisdictions of both the Law Society and the Attorney-General. Thus, the Attorney-General will have the primary oversight in respect of lawyers working solely within a foreign entity, referring matters where relevant to the Law Society. Lawyers in Joint Law Ventures who are employed by Singapore Law Practices will continue to be the subject to the Law Society's regulation, in relation to their practice in the Singapore law practice.

Enhancement of the disciplinary process

Sir, the other main category of amendments enhances the disciplinary process for lawyers.

Complaint and inquiry procedures

There are a range of amendments to streamline the entire disciplinary process. I will only outline the key changes here. Specific timelines are stipulated for each step of the disciplinary process. To deter frivolous complaints, it will be mandated

that every complaint against a lawyer be made in writing and be supported by a statutory declaration, except when the complaint is made by a public officer. A limitation period of six years, in line with the general limitation in law, will be introduced to prevent stale complaints. The powers of the Inquiry Committee and Disciplinary Tribunal to order costs will be enhanced. Sentencing options will also be enhanced. Judicial review of the Disciplinary Tribunal's decision can only be applied for after the conclusion of the Disciplinary Tribunal's deliberations.

Disciplinary Tribunal

There is one change to the recommendations earlier made by the Committee. The Committee found that the average time taken by the Disciplinary Committee to complete their cases doubled from 7.5 months in 2002 to 15.4 months in 2006. To address the serious problem of delays, the Committee proposed to shorten the disciplinary process by replacing the Disciplinary Committee with a Disciplinary Tribunal. The Tribunal was to be appointed by the Chief Justice and comprised only one member – a Senior Counsel, or a retired Judge or Judicial Commissioner. Clause 34 now revises this to a two-man Disciplinary Tribunal, consisting of a President, who will be a Senior Counsel, a retired Judge or Judicial Commissioner, and a second member, who will be an advocate and solicitor of at least 12 years' standing. Under clause 35, the President will have the casting vote.

This change is in response to strong feedback from the Law Society which had raised concerns about disciplinary matters being decided on by only one person, without the element of "judgement by peers", which is in the current process. The Law Society has given the assurance that it will commit to completing the prosecution of disciplinary cases heard before a Disciplinary Tribunal within nine

months, barring any unforeseen circumstances and cases of unusual complexity. We believe this should adequately address the problem of delay. We will, however, monitor the situation closely.

Mental or physical incapacity

The Bill will provide for the Attorney-General or the Council of the Law Society to adopt certain measures when they are satisfied that a lawyer is incapacitated by any physical or mental condition to such an extent as to be unable to attend to his practice, or that a lawyer's fitness to practise appears to have been impaired by reason of his physical or mental condition.

The Bill also contains various minor amendments requested by the Law Society and other changes of a technical nature.

In conclusion, Sir, the changes to be made through this Bill will, we hope, further develop and enhance the standards of our legal profession and Singapore's position as an international centre for the provision of legal services. But these will not be the only measures that we will need to take. The scene in the legal landscape is fast changing. We must be prepared to make further changes to keep up with developments and ensure that our legal services sector remains vibrant and competitive.

Sir, I beg to move.

Question proposed.

3.13 pm

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

Sir, the proposed Bill seeks to amend three areas of the Legal Profession Act, namely:

Disciplinary processes;

Measures to address a solicitor incapacitated by physical or mental conditions; and

Liberalisation of the legal services sector.

Sir, the Straits Times on 21st August 2008 reported a list of 10 prolific corporate fugitives in Singapore who are on the run. Out of these 10 fugitives, six of them are lawyers who had stolen or misappropriated their clients’ money totalling $27.8 million.

Sir, these breaches of trust and the recent cases of misconduct of lawyers have affected the professionalism and integrity of the legal profession. These rogue lawyers are not just a few black sheeps in the legal profession. There are many other cases of lawyers’ misconduct. I had also received complaints from my residents on the lack of professional services and/or misconduct of lawyers. These include gross overcharging, lack of diligent services, making of misleading statements or misrepresentations.

These increasing trends of lawyers’ misconduct and complaints are indeed disturbing and of concern to the general public, corporate entities, and Government. If I may quote the stinging rebuke which former Chief Justice Yong Pung How made when he dealt with three errant lawyers in August 2005:

“We cannot have lawyers going round telling lies. It is becoming a most naughty profession in the world. What is the profession coming to?”

Sir, these are indeed serious wake-up calls for the legal profession. There is an urgent need to uplift the integrity of our legal profession in Singapore.

Sir, instead of making minor amendments to the Legal Profession Act to streamline the disciplinary processes of lawyers,

the Ministry should take more concrete steps to regulate the professional conduct and services of lawyers. We should not introduce measures as proposed in the Bill to protect lawyers but should instead make provisions to deter misconduct of lawyers.

On the contrary, the Ministry should make more provisions to protect clients or parties affected by the misconduct or unprofessional services of lawyers.

Sir, I do not agree with clause 29(a) which mandates every complaint against a lawyer to be made in writing and supported by a statutory declaration. I understand the rationale for statutory declaration is to deter frivolous complaints, but this has placed undue onus on the complainants or affected parties who can be ordinary citizens. Can the Minister explain why lawyers should be given such protection while the other professionals such as doctors, architects or engineers do not have such provisions to deter frivolous complaints?

Sir, if the legal profession is receiving many frivolous complaints, we should instead address the roots of the problems, and find out why there are such complaints against lawyers. Is it due to unreasonable or demanding clients, lack of communication, or poor professional services?

Sir, complaints or feedback provide good checks and balances on professional conduct and services. The Law Society should be more diligent in addressing complaints against their members; and regulate, maintain and improve the standard of conduct of the legal profession. At the same time, more public education efforts should be made to keep the general public informed of legal

services and professional conduct. This would not only reduce complaints but also enhance solicitor-client relationship.

Sir, we should not set up measures to deter complaints or feedback as it would encourage complacency and increase malpractices in the legal profession. Companies which do not entertain clients' feedback or complaints would never be able to satisfy the needs of their clients in providing quality services. If Singapore aims to be a global legal services hub, we need to set up a professional service framework to better serve our clients in the legal services sector.

Sir, I support clauses 28 to 30 of the Bill which reduce the eligibility criteria for an advocate or solicitor to be appointed as a member of the Inquiry Panel. This would enable more advocates or solicitors to be eligible, thus facilitating the review and inquiry processes of complaints of misconduct made under section 85(1) of the Legal Profession Act.

Sir, clauses 34 and 35 provide for the composition of a 2-member Disciplinary Tribunal which shall comprise a President and an advocate or solicitor. It also states that if the two members of the Disciplinary Tribunal were unable to reach a unanimous consensus on any matter, the President would have the power to decide on the matter.

This provision does not seem to provide a fair hearing as the decision of the Disciplinary Tribunal is essentially made by the President of the Tribunal. Sir, I would like to propose that we form a three-member Disciplinary Tribunal similar to the Court of Three Judges, and all matters should be decided based on a simple majority vote. I hope the Minister could clarify the rationale for a two-member Disciplinary Tribunal.

Sir, clause 34 also provides that every member of a Disciplinary Tribunal and the

secretary of every Disciplinary Tribunal shall be paid such remuneration as the Chief Justice may determine. I wish to clarify with the Minister as to whether it is appropriate to use public funds to pay the Disciplinary Tribunal members and its secretary to address complaints against lawyers in the private practice.

The Law Society is responsible for the professional conduct and discipline of its members. As such, the Law Society should bear all costs and expenses in such Disciplinary Tribunals instead of the State. As a matter of policy and self-management principles, we should not use State funds to resolve complaints against lawyers in the private sector.

Sir, I would like to propose that the costs and expenses of all complaints against lawyers in the private practice be appropriated accordingly among the complainants, lawyers and the Law Society. This would encourage stronger self-management and ownership among all three parties. It will also ensure that complaints are genuine and properly addressed by the Law Society and the Courts.

Sir, I support the amendments to allow qualifying foreign law firms to practise Singapore law in permitted areas such as corporate, banking and maritime law through Singapore law-qualified solicitors. This licensing scheme would attract more investments to Singapore, thus creating more job opportunities for Singaporeans. At the same time, it would build capabilities among Singapore law-qualified lawyers to expand their range of legal services both locally and globally.

Sir, I support the Bill.

3.22 pm

Mr Speaker, Sir, let me begin by disclosing that, apart

from being a partner of a local law firm, I was on the Committee headed by Justice V K Rajah whose report was adopted by the Government in formulating the present amendments. However, the proposed liberalisation of the legal sector will change the landscape so significantly that I feel compelled to add my voice in support of the Bill and to raise some further points for the Minister's consideration.

Before I launch into the main thrust of my speech, I do feel compelled to add my comments after hearing the learned Member Dr Teo's speech in terms of the legal profession. It is my view that the state of the profession is perhaps not as bad as may be painted in some press articles and that the number of cases involving rogue lawyers is a very, very small minority in the context of a profession of over 3,500 practicing lawyers. The Bill does address and streamline the disciplinary process and I believe it is a step in the right direction. It is my considered view that added regulation will not improve the situation and I do believe that the vast majority of the practicing lawyers do behave honourably.

Returning to the main thrust of my speech, the liberalisation of the legal sector is, in my view, unavoidable for Singapore if it is to continue to grow as a financial services centre to become a leading hub not just for Asia, but the world. Underpinning our financial and capital markets are the bankers, accountants and lawyers who service these markets and make them tick. We have the international banks here, the international accounting firms, but the international law firms are restricted in their practice of Singapore law, as opposed to English or New York law.

To support the flourishing activities of the market and to compete with other centres like Hong Kong which are not so

restricted, we do need to provide the widest range of choices for the various players in the market which includes their choice of law firms and their choice of law. In allowing international law firms greater latitude in practising Singapore law, we will also widen the knowledge and acceptance of Singapore law which not only extends the reach of our home-grown lawyers, but enhances the soft power of Singapore as a whole.

So why has it taken so long? The need for caution arises from the fact that the greater size and reach of the international law firms means they could cherry-pick our best lawyers, leaving our Singapore firms as second-tier outfits, unable to participate in the cutting-edge transactions that lead the market. What this also means is that, if owing to recession here or some change in business strategy decided in the head office in London or New York, an international law firm could choose to close down its office here and move their lawyers elsewhere to what is perceived to be a more lucrative market. It is for similar reasons that when liberalising the Singapore banking sector, the Government stressed the importance of having local banks that will stick by Singapore through good times and bad.

This is, in my view, also why we should not allow our local law firms to become simply middle of the road outfits focused essentially on retail business. If a further reason is needed, there is a further reason for upholding the standards and status of our Singapore law firms. This is where we have drawn many of our judges, including our present Chief Justice and even including our present Law Minister. As part of a local law firm, their practice was centred in Singapore and steeped in our home-grown values and culture.

Will we have the same pool of talent to draw on if our best lawyers have all joined

foreign law firms and are practising outside Singapore? I think not. Hence, the need to strike a balance between providing the financial institutions that demand legal advice of the highest quality with the full suite of choices, whether the applicable law is English, New York or Singapore law, and between providing our Singapore law firms not to shield from competition but with the platform to upgrade themselves and participate in the growth of Singapore as a financial centre.

How do we achieve this balance? I believe the Enhanced Joint Law Venture (EJLV) Scheme holds the key. It is the means by which a top international law firm can link up with one of our leading Singapore firms to offer legal services through a common vehicle. In the process, the local law firm will gain exposure to the cutting edge transactions that the international law firms handle, their greater knowledge base and more advanced infrastructure. Put another way, the local law firm gets a transfer of technology and sharpens its competitive edge.

The reason why the earlier JLVs did not do as well as planned was because their financial interests were not aligned, the two partner firms did not share profits and would compete as much as cooperate with each other. This has been addressed in the new EJLV proposal which makes it clear that they can share in the permitted areas of practice up to 49% of profits. The authorities, as the Minister has mentioned, also have the discretion to permit even greater integration between the two partners which can only serve to foster greater cooperation and to facilitate the transfer of technology which will benefit the Singapore law firm in the long run. All this is not to say that the qualifying foreign law practice, or QFLP, proposal is not required.

Indeed, it complements the EJLV Scheme in that it permits a foreign law

firm to practise Singapore law on its own, that is without a local firm as partner, provided it satisfies the authorities that it will bring greater economic benefits to Singapore. This measure recognises that market forces are what drives our economy and that the Government will not attempt to prescribe how a foreign law firm wishes to organise its presence here if overall Singapore would benefit. But the key difference between the EJLV and the QFLP is that in the former, a local law firm has the opportunity to upgrade its skills and experience of its lawyers while the QFLP will doubtless pass on the same benefit to the Singapore lawyers it hires as its employees, the upgrading effect will, by definition, be more limited.

I recognise and agree that the authorities cannot set perimeters for the QFLP Scheme that are so narrow that prospective applicants are put off from applying, nor can it bar firms that could have formed an EJLV from opting to go it alone as a QFLP. If the economic benefits stack up in favour of Singapore, that must be the telling factor but the criteria must not be so relaxed that international law firms see little incentive in pursuing a partnership with local law firms because the QFLP licence is easily attainable. For if that were to happen, one would expect even wider cherry-picking of our best lawyers and the relegation of the Singapore practices from the premier league of law firms here.

It is precisely because Singapore has to have its own representatives in the top tier that we need to pay serious attention to how our law firms can enhance their skills to compete at the highest level.

The liberalisation proposal has my full support. The local Bar does not seek protection from competition, but a platform to upgrade themselves to compete with the best. Therefore, in closing, I do urge the Government when it

comes to implementing the scheme of EJLVs and QFLPs, to have in mind these concerns. In this way, we can make strides towards having the best of both worlds - a leading financial centre served by top-notch law firms but whose ranks would include some of our very own Singapore practices.

3.31 pm

Sir, I would like to remind my colleague, Dr Teo Ho Pin, that one bird does not make a summer. In fact, a majority of the lawyers are people of great integrity and honesty and it is not a contradiction, in turn, to say that, "I am represented by my 'honest' lawyer". But, Sir, I would like to, first of all, declare that I am an advocate and solicitor of the Supreme Court of Singapore and I have an interest in the subject matter which I am about to speak on.

The proposed section 130D of the Legal Profession Act, when passed, will allow a foreign law firm being a Qualifying Foreign Law Practice, to practise Singapore law subject to certain conditions and constraints set by the Attorney-General. This is a significant development in the legal profession. This amendment opens up the practice of Singapore law to foreigners, even though presently it is restricted to certain areas of practice. This is a very unusual development as, in many countries, the practice of local law is often restricted to the local people.

Quite obviously, such a significant development would be of great interest and concern to many lawyers whose practice may be affected by this change of policy. To the extent that a foreign law firm is now able to give legal opinions on local laws in an approved area of practice, it would give rise to a number of issues and implications that I would like to address in this House.

First, there is now a distinct possibility that the local legal practice, at least in the financial services, including the corporate and capital market practices, has the potential to be marginalised by foreign law firms. These firms having had the benefit of a longer history of international practice would be in a better position to attract the best of our lawyers to work for them. The local firms, which are most unlikely to match the pay and service conditions that these foreign firms will offer, will not have the ability to attract top graduates to join them. In the longer term, the quality of services of the local firms will suffer and this will, in turn, make them even less competitive than the foreign firms.

Take a look at Hong Kong. With the dominance of foreign firms, the local firms have been finding it difficult to compete. The outcome unfortunately is that many of these firms that could have grown to become major regional or international players, standing alongside the bigger firms, are increasingly being sidelined. We know it because before, our first preference was to use local firms. Now, we are turning to international firms when it comes to using Hong Kong lawyers for the Hong Kong part of the work.

Secondly, and it follows from the point just made, I am not sure whether such a move will necessarily help Singapore firms to develop and grow an international profile similar to the Magic Circle firms (being the established London firms) or the Wall Street firms. Without the necessary talents and with fewer opportunities to work with these foreign law firms, since there are fewer incentives to form joint law ventures now that foreign firms are allowed to practise local laws, it is very unlikely Singapore law firms will have the potential to become world class practices.

For Singapore, our biggest advantage has always been our people. We know

that our lawyers are highly regarded because of the excellent training that they receive both at the university and in practice. The presence of our human talent would be better felt across the globe if we are presented as Team Singapore through a practice that is firmly rooted in Singapore as opposed to losing our talents to the offices and the hallways of big foreign practices whose interests may not always be aligned to our national interest. Like the local financial institutions, most of the major local law firms have aspirations to become regional and international practices. In order for this to happen, we need to put key policies in place; some of which have been implemented at the moment. These policies include making Singapore law the applicable law that governs the transactions, beginning with financing documents; encouraging the greater use of our capital markets, both on the buy and sell sides to raise capital; the continued encouragement to use Singapore rules as the applicable rules in arbitration proceedings; the promotion of policies that will incentivise the upgrading of knowledge management among the local law firms; and the transfer of know-how that I believe was the main intent when foreign joint law ventures were first mooted. Unfortunately, by allowing foreign law firms to now practise Singapore law, even in limited areas, the Government could well be dealing a fatal blow to the nascent efforts of our local law firms to develop and go regional. Is this what we want for the legal industry?

Thirdly, law and the practice of law is a very unique vocation that occupies a very special place in any society. In its modern context, it is supposed to reflect the values and the choices that represent the will of the people. As lawyers, we are not only advocates of the rights of private citizens but are also officers of the Court. In this regard, lawyers have a special role in that they owe a duty to their clients and are also expected to uphold and

protect the integrity of the application of the laws of the land. It is for this reason that lawyers who mislead the authorities or knowingly break the laws will have to face the censure of the Courts and the Law Society.

It is also for this reason that lawyers have through history, and in our case, since colonial times, been closely associated with the development of the law, either in the Courts, the review committees or the law schools. Law firms and law practitioners have always been called upon to perform public service and would readily do so mainly because of the wider interest that their involvement will serve. The firms that they represent, being local firms, as far as I am aware, have seldom placed obstacles in the way even if these lawyers recommend policies that may potentially harm the firm's interest. A clear example of this is the recommendation from local lawyers who form the committee to promote the introduction of Qualifying Foreign Law Practice. Sadly, I am not convinced that these foreign firms necessarily share, nor are they expected to share, these commitments that the local firms have. When the crunch comes, whose interest will they serve? I am much concerned that we will lose much of our heritage and tradition that is very much a part of Singapore's history. Will the likes of Drew and Napier, Allen and Gledhill, Rodyk and Davidson, Wong Partnership, firms that we know well and are products of Singapore, become footnotes in our history books?

In case I am misunderstood, Sir, I am not against competition, and neither am I against the opening up of our market to foreign law firms. I am, however, a firm believer in fair competition and of the principle that we should not pursue economic development at all cost.

In the case of fair competition, we must allow for more time for our local firms to grow and develop the expertise to provide the services that are required to meet the demands of an increasingly sophisticated financial services sector. If we are still committed to the principle of helping our legal sector to grow, we should improve the framework for the transfer of technology. We should, for instance, provide more incentives and opportunities for our young lawyers to be exposed to foreign firms and provide more opportunities for the use of Singapore law as the governing law of the documents, as mentioned earlier. In this regard, if we are prepared to reconsider the principle of non-internationalisation of the Singapore dollar, it would help to promote the use of Singapore law in cross-border loan documentation. Until local firms are ready to face foreign competition, opening up the market will be premature and will work against the interest of the local law firms. The Australians and the Americans on the other hand are not concerned with foreign competition because they have a longer history. That is why you will find only some Magic Circle firms in Australia and the US where they have a relatively modest presence. The market will have to be opened up more slowly if our interest is to be served.

Now, this leads me to the next point. It is my understanding that one of the principal reasons behind the move to allow foreign firms to practise Singapore law is to support the financial services sector. One feedback from financial institutions as to why we are not able to grow our financial services sector fast enough is the inability of the foreign law firms to provide a seamless one-stop service to these financial institutions undertaking cross-border work. However, I am not sure if providing a one-stop service will hasten the development of the financial services sector, and I would like to ask the Minister in this regard to just demonstrate to this House how this will

be so. Be that as it may, even if that were true, it raises a fundamental point and issue of the way we want to take this country forward. In approving this policy, and bearing in mind the potential harm that this may do to our legal profession, the bigger question that we should ask is whether we are now moving towards the principle of economic development at all cost, even if it may harm a key sector of our society?

This has been a difficult question that confronts many societies today. On the one hand, much has been said about liberalising the economy to free trade among countries while breaking down all protective barriers. Yet, at the same time, we are mindful of the social costs that come with free trade and liberalisation. The question is where do we draw the line? Each country will have to decide where that equilibrium is. Even countries such as the US, one of the biggest proponents of free trade, are struggling with finding that equilibrium. Whatever it is, in fact, no country, I dare say, would pursue the policy of economic development at all cost. Yet the one question that some of us will be asking is, are we pursuing the policy of development at all cost with this policy at this time?

One response to this question perhaps is the belief that what is good for Singapore must necessarily be a good policy to adopt. I have alluded to this earlier in my speech that the underlying principle in opening up the profession is to allow for a seamless one-stop service by foreign firms for cross-border services based on the feedback given by the financial services sector. Honestly, I am not convinced that allowing foreign firms to provide that one-stop service to the banking sector will speed up the development of not just the financial services but also the legal services as well. After all, is the joint law venture policy not promulgated much earlier supposed to make that happen? And what

has the record and history of this policy been, having been implemented for a while now? It is my understanding that more, perhaps, could have been done and yet the expected transfer of technology is not taking place, even under the rubric of joint law ventures. What will then happen again with this policy is that the possibility of these firms competing with local firms directly for local work at the higher end, apart from competing for local talent. If that were so, how will this serve to meet the needs of the financial services sector that is not already met by the local firms? How can we say that this is good for Singapore when it is your own people's interest who are put at risk in the process?

Presently, the amendment Bill contemplates that the Attorney-General in permitting a Qualifying Foreign Law Practice to qualify for a licence to practise Singapore law may stipulate certain terms and conditions to these firms. Also, it is envisaged that in order to ensure that there will not be a deluge of foreign firms practising Singapore law, only a limited number of foreign law firms will be permitted to qualify in this category. In considering the application and the terms and conditions to be applied to these firms, it is my hope that a certain balance be struck by the Attorney-General in his wisdom in coming to a decision as to what to permit.

Finally, there is just one other point that I wish to comment on the Bill. Clause 36 introduces a new section 91A which restricts judicial review in any court on any act done or declaration made by the Disciplinary Tribunal. Sir, I am just puzzled as to why the Government should choose this draconian approach in taking away the right of an affected person who is the subject of an administrative law action from seeking redress at our Courts. In the context of our Constitution, the right of an aggrieved person to seek redress at our Courts is fundamental. Restricting this

right would run counter to the spirit of our Constitution even if the restriction itself is not on the face of it, ultra vires the Constitution. I should therefore be grateful if the Minister could explain why this restriction to judicial review in the new section was introduced in the first place.

Subject to the comments above, Sir, I support the Bill.

Thank you, Sir, for allowing me to just clarify. What I mentioned is that I am aware that we have a few thousand good practising lawyers in Singapore, but I am indeed very concerned with this increasing trend of misconduct cases of lawyers in Singapore. It looks like we are in for a long summer.

Sir, it sounds to me that the Government's foreign talent policy has caught up with the legal profession. But I am not speaking on this issue as I believe that the lawyers are more than capable of speaking up for themselves.

Sir, I refer to the proposed amendments to the disciplinary proceedings. A layman's representative used to sit at both the Inquiry Committee as well as the Disciplinary Committee will now be restricted to only the Inquiry Committee. Clause 34 of the Bill amends section 90(1) of the Act to say that the Disciplinary Committee will now consist of only two persons instead of four. The two persons who are dropped from the Committee are the Government legal officer and the layman. Although the Minister has explained briefly the changes in the disciplinary procedures, I think it is useful to recall the reasons why the layman was introduced to the process.

Sir, in 1986, the then Second Minister for Law, Prof. Jayakumar, moved

amendments to the Legal Profession Act to include lay persons to justify his move. He had said, and I quote, "At present, the persons who sit on the Inquiry Committee and the Disciplinary Committee are all lawyers. The errant member is therefore judged entirely by his peers. This is based on a traditional British practice of self-regulation which grew up in guilds of people in a particular trade, historically. In recent times, the permissive attitude of these self-regulating bodies have created doubts in their willingness to police themselves or to discipline members of their own kind." He continued to say that the inclusion of non-lawyers and of people who are regular users of the services of lawyers will help allay some of the apprehensions caused by the present inhouse nature of the disciplinary process. And the inclusion of lay persons or non-lawyers in the Disciplinary Committee would stop the belief that self-help and mutual forgiveness is the way lawyers maintain standards of professional conduct.

Sir, are these concerns for mutual forgiveness and transparency no longer valid now? It is true that under the existing law, the lay persons at the Disciplinary Committee stage cannot vote. Nevertheless, he contributes to the deliberation of the Committee by reminding the Committee of how a client would perceive the event at hand. This would surely provide for a fuller, more informed discussion as to what is fair and just in the circumstances. Let us not forget that the Disciplinary Committee is a very important milestone in the disciplinary process. It is the gatekeeper of whether the lawyer under inquiry should face the Court of Three Judges be struck off or suspended. Care should be taken at such an important stage and the laymen can make important contributions. If our experience has been that the laymen are too busy, perhaps, we should amend the Act to allow more people to qualify as laymen.

3.47 pm

Mr Speaker, Sir, I join my colleagues in the legal profession, Mr Alvin Yeo and Mr Sin Boon Ann, in contradicting the views expressed by Dr Teo Ho Pin about the legal profession. Many in our profession actually feel that, as lawyers, we are over-regulated and under-protected. And the provisions in the Bill are viewed actually as the minimum protection that lawyers accused of wrongdoing should be accorded, as with any other accused in any criminal proceedings.

Mr Speaker, Sir, I rise to support the proposed amendments to the Legal Profession Act. In particular, I wish to speak on the proposed provision whereby a lawyer can be submitted to a medical examination in the event his "fitness to practise" is deemed impaired by any physical or mental condition. The introduction of this new provision which can be meted out on any lawyer deemed physically or mentally unfit has ramifications to the lawyer himself, his family, his firm and his clients. I therefore urge the Minister, in introducing this provision, to take cognizance of the fact that there should be safeguards for the lawyer, his family, his firm and his clients as these are the parties who are affected directly and indirectly as a result of the order or direction for a lawyer to undergo medical examination to see if he is "mentally sound".

We have read newspaper reports that the number of cases of depression in Singapore has been on the rise. Mental illness and impairment affects anyone and is rampant. However, the impairment may be of varying degrees. It is therefore important that the profession is well aware of the standards by which medical practitioners will adjudge whether a lawyer's physical or mental condition has affected his "fitness to practise".

Although what constitutes "fitness for practise" and what sort of "physical and mental conditions" should be displayed will remain to be tested, there is a strong impetus for greater elucidation and clarity in this respect.

For the lawyer and his family, there will be questions on integrity and confidentiality. Inevitably, such a direction to undergo medical examination will pose more than moral stigma to the lawyer and his family. Even if he is finally adjudged to be of sound mind and fit to practise, there are often the unintended consequences of embarrassment and stigma. Moreover, there are instances where the "unfit mental condition" could be a short-term or long-term problem. Especially in cases of remission or where a lawyer has been deemed "fit for practise" after medication and treatment, how easily could he bounce back and continue in the profession remains to be seen, although the answer is obvious.

From a law firm's perspective, I question whether there will be an obligation on fellow partners, directors or colleagues to take steps to prevent an impaired lawyer (at varying stages or degrees of unfitness) in the firm from further acting or appearing on behalf of clients or advising clients. Besides taking steps, will the onus be on fellow colleagues and lawyers to inform the Law Society or the appropriate authority or the impaired lawyer's clients or prospective clients that the lawyer is mentally impaired? Furthermore, there will also be the question of liabilities and obligations that the firm may have when the impaired lawyer leaves the firm or re-joins the firm when he or she recovers. All these are salient considerations which must be addressed so that this new provision will better serve the profession and the people.

Finally, whilst pondering on this proposed amendment, it has set me

thinking on whether similar provisions should be extended to all forms of professional practice, where it is imperative that the practitioner is of sound mind and has a healthy psychological state with good judgement. Otherwise, he or she will not be able to act in the best interest of his or her client and conduct himself or herself properly so as not to denigrate the profession.

With that, I support the Bill.

3.52 pm

Mr Speaker, Sir, first, I declare my interest as a lawyer and a Director of a local law firm.

Sir, the practice of law has always been a challenging one, particularly in the last 20 years or so. A combination of tight deadlines, demanding clients, stiff penalties for failure and long, long hours in the office have contributed to a serious attrition from the profession. So while the Singapore economic pie has grown considerably in the last 10 years, the number of practising lawyers has been stagnant. Despite the claims that great amounts are earned by lawyers, there are many who obviously feel that they are paying too high a price for staying in the profession. Well, to borrow a phrase from the Americans, they ain't seen nothin' yet.

This Bill represents a dramatic transformation of the Singapore legal landscape. And it may leave some Singapore lawyers wondering whether there is future for them in the profession. The most significant change is, of course, the opening up of legal services to foreign law practices, including granting them the right to practise Singapore law, save in certain excluded areas.

Sir, I support the reasons behind opening up the profession. Any move

which benefits Singapore as a whole should be given the highest priority, even if it may adversely affect a particular profession or business. What I believe requires greater explanation from the Minister is the correlation of this move with the growth of the economic pie for all, and not primarily for foreign law firms. Will the Minister give concrete examples of how this will help Singapore as we all move to the next level of economic advancement?

Sir, in my 17 years of practice, dealing with both my fellow members of the profession as well as foreign lawyers, including those from the "magic-circle" firms, I can say with conviction that our best minds are more than a match for theirs. But the glitter and the deep pockets that these foreign firms have will present local firms with serious issues.

First, there will be clients who will engage foreign firms for high-end corporate work simply on the basis of their name and standing. Today, Singapore firms get involved in international deals to advise on Singapore law issues. By this involvement, our local firms build up their skills and expertise. Now, there is a serious risk that they will be bypassed, and I share the concerns expressed by my colleague, Mr Sin Boon Ann. Second, the issue of talent. There will be an outflow of talent, particularly of younger and mid-level lawyers from local to foreign firms. Local firms will not be able to compete with the packages of the large foreign firms. We are seeing this already. I personally know of younger lawyers who have moved from local to foreign firms and who have had their monthly salaries doubled and even tripled. Foreign firms also offer potential recruits stints in their home or overseas offices, and the opportunity to get involved in the larger, sexier deals. It will be difficult for our young, talented lawyers to resist this pull. And this will have a knock-on effect on the Legal Service, which has already

witnessed a brain drain to the local private sector, even without these new players in the market. It is important that we keep good people in the Legal Service. I ask the Minister how the Legal Service proposes to meet this challenge.

I know there are some areas of practice, such as litigation, which will remain the domain of local law firms. But there is no assurance that these will remain protected. More importantly, once foreign firms are permitted to practise Singapore law, there is a serious risk that they will, inadvertently or otherwise, extend into such areas as well. For example, while a foreign firm cannot appear in our local courts, what is to stop them from doing the substantial litigation work in the background, including advising the clients, taking witness statements, overseeing the discovery process and even drafting submissions? Singapore lawyers may eventually be nothing more than the mouthpieces of the foreign firms in our courts. And I hope there will be clear and practical rules in place to ensure that this does not happen.

The effect of these changes may well be the dominance of the foreign firms in the Singapore market, and a gradual diminishing of local firms, both in size as well as the nature of work they perform. I do not believe these are fanciful concerns, and Mr Sin has outlined what has happened in Hong Kong. I will not repeat that. I know it is not the Government’s role to protect local firms or to preserve their livelihood. It is a challenge to our lawyers in the local law firms not to confine themselves to Singapore, but to make themselves relevant in the globalised economy. Some will succeed, others may not. But all must be prepared for change.

On that note, I would like to touch on two specific matters in the Bill. First, the provisions to compel a solicitor to undergo

a medical examination if there are doubts that he is physically or mentally capable of discharging his duties. It is difficult to argue against its rationale. However, I would like to raise a few points.

First, the Bill provides that where an application is made by the Attorney-General or the Law Society Council, and it appears to the Judge that the fitness of the solicitor may be impaired, the Judge shall order the solicitor to be examined by a registered medical practitioner who meets certain criteria as the Judge may specify. However, it is unclear whether the Judge merely specifies the criteria, or identifies the actual medical practitioner. If the former, who selects the medical practitioner?

In this regard, I note a striking dissimilarity with the law governing the medical profession. The Medical Registration Act and its regulations also empower the Medical Council to take steps to deal with doctors who may not be able to discharge their duties on account of their physical or mental condition. In that case, the Complaints or Health Committee may invite the doctor to be examined by at least two medical practitioners to be appointed by the Committee, but the doctor is also entitled to nominate his own medical practitioners to report to the Committee on his fitness to practise.

Sir, there is a more fundamental difference between lawyers and doctors in this regard. Where a doctor refuses medical examination, he risks his practising certificate. Under the Bill, the lawyer who refuses risks not just his practising certificate, he would be in contempt of court as well. There may be many reasons why a person may refuse a medical examination, particularly when the report will be disclosed to the Council (which is made up of his peers) and the Attorney-General. We are not dealing with a public health issue. A lawyer, just like a doctor, should be entitled to refuse

examination without the pain of contempt. He puts his certificate at risk, but that is his choice. And if he chooses to subject himself to an examination, he should, like doctors, be entitled to furnish the report of a physician of his choice as well.

Second, the proposed section 25C(6) spells out that "the solicitor shall bear all costs of incidental to his medical examination …". Could the Minister clarify whether it is intended to include the costs of the legal proceedings to compel the lawyer to undergo the medical examination? In this regard, I hope the intention is to leave such matters, as is usually the case, to the discretion of the Courts.

Sir, on the issue of the penalties and the increased penalties, clause 26(e) of the Bill proposes amending section 82A(12)(d) increasing the monetary penalty that could be imposed on a legal officer or non-practising solicitor from the present of not more than $5,000 to not more than $20,000. Clause 27(a) of the Bill proposes to amend section 83 to allow for the penalty of not more than $100,000 on a practising solicitor.

In both cases, the monetary penalty is but one of the various possible punishments that could be imposed. The questions are: Why the disparity of increase? Why the disparity between $100,000 and $20,000?

The nature of the penalty raises another issue. What is the basis of the new upper limit of $100,000? I note that the upper limit for medical practitioners stands at $10,000. A lawyer may also be suspended for up to five years, while a doctor can only be suspended up to three years. May I ask: why the disparity in treatment, particularly where there is an equally strong, and arguably even higher, public interest in the regulation of doctors? This, of course, does not

address whether there is consistency in the actual penalties given to lawyers and doctors for similar transgressions, but that is a different debate.

There is also proposed a whole slew of changes to streamline the disciplinary process to shorten the time to dispose of cases. I welcome this, as it does the legal profession little credit to have complaints against its members pending or unresolved for any considerable length of time. Such new measures include the step of reducing the Disciplinary Tribunal to just two members, and not requiring unanimity of the Tribunal in making the decisions. So, where there is a disagreement, the decision of the President prevails.

Sir, the fate of the respondent solicitor, therefore, effectively lies in the hands of one person, the President of the Tribunal. I understand that there has been much discussion on this issue with the Law Society, and this is a compromise solution. I will, therefore, not go over the same issues and arguments.

I would, however, like to draw a comparison again with the medical profession. A medical disciplinary committee consists of three registered medical practitioners of at least 10 years' standing, of whom at least two shall be members of the Medical Council. There is a lay observer, but he cannot vote and his presence is not even required. This is a bit odd but, again, I will leave that to a different debate. Therefore, unlike the proposed new law for the legal profession, the doctors are still judged by a majority of his peers. I would imagine, Sir, that any concern over the length of time it takes to dispose of complaints against lawyers would likewise apply to complaints against doctors and other professionals. In the circumstances, can we expect similar amendments to legislation governing the conduct of all other professions?

Finally, Sir, with respect to the remarks by the hon. Member Dr Teo Ho Pin, can I just say this: It is because the vast majority of lawyers are honest and honourable that, when one falls, it makes the news and the public expresses its surprise and outrage. So, let us keep things in perspective. I think we will really be in trouble when lawyers fall and no one really thinks much about it.

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

Sitting accordingly suspended

at 4.05 pm until 4.25 pm.

Sitting resumed at 4.25 pm

Debate resumed.

Mr Speaker, Sir, thank you for allowing me to join in this debate and to lend my support for the Bill. I think our learned and honourable friend, Mayor Teo Ho Pin, has suffered enough, so I will go straight to my point.

Let me start by asking two questions:

What is inferior about the manner in which Singapore Law Practices (SLPs) and Joint Law Ventures (JLVs) presently offer services to clients, both local and international?

Singapore Law Practices are rooted here, they will continue to service their clients, both domestic and international, through financial and economic crises. Can the Minister ensure that foreign legal practices will do the same? In asking this question, I disclose my interest that I am a partner in a Singapore law practice.

Let us not be numb to the fact that the amendments will quite obviously hurt the bread and butter of many corporate lawyers. So, surely, a case must be made out for liberalisation before it is introduced. In summary, it appears that the major amendments to liberalise the Singapore legal sector are: (1) The amendments allow the award of Qualifying Foreign Law Practice (QFLP) licences to foreign legal practices. These licences will allow them to practise Singapore law in permitted areas through Singapore law-qualified solicitors. (2) The existing JLV scheme will be enhanced – the hon. Member Mr Alvin Yeo calls it E-JLV – firstly, to allow profit sharing of up to 49% of the SLP’s profits in permitted areas of practice, and, secondly, to allow foreign legal practices to hire Singapore lawyers. (3) The scope of areas of Singapore law in which JLVs and QFLPs can practise will be all areas of Singapore law, save for only certain areas that are specifically excluded, such as litigation, conveyancing, family, trusts, wills and probate. In addition, all FLPs may practise Singapore law in areas to be prescribed by the Rules, and the relevant Rules will permit such practice where international commercial arbitration is contemplated. The very fact that we have ringfenced a host of areas of laws shows that there is merit in leaving the practice of some areas to, and solely to, Singapore Law Practices. How are the areas left outside this list different? Why is there a need to retain local practices in some areas of law but push for liberalisation in others? Another concern is that the amendments seem to envision further

liberalisation in the future and that this liberalisation may take place via secondary legislation rather than primary legislation. For example, the amendments to the LPA envision that FLPs may practise Singapore law in areas to be prescribed by the Rules. I would query the reason for the devolution of such issues from Act to Rules since such devolution may mean that there is less debate on such weighty issues. In addition, the Bill provides for discretion for the Attorney-General, with the approval of the Minister for Law, to approve JLV structures that may go beyond the conditions prescribed in the Rules. So it appears that there is room for even further liberalisation, and such liberalisation need not come before this House in the form of primary legislation. I would, therefore, appreciate the Minister’s clarification on the reasons for the devolution of such powers from Act to Rules, and the reason for the inclusion of this discretion for the Attorney-General. In addition, would the Minister clarify if he sees the list of protected, or what the Minister calls "ringfenced" areas of Singapore law shrinking in the future? If so, what we have really is a moving target. This creates an environment where our Singapore-qualified lawyers have to constantly worry about whether the area of law which they practise, eg, matrimonial, criminal, conveyancing, litigation, trusts or otherwise, will be liberalised. If so, they would have to consider the following options: should we join a QFLP, learn a new area of law or, worse still, give up practice? Has the Ministry of Law considered the very real uncertainty these amendments create for the Singapore-qualified practising lawyer, especially if further liberalisation is envisioned? This brings me to another issue. Given the shifting nature of liberalisation

and the potentially shrinking carpet upon which Singapore lawyers can perch their practice, would the Minister care to share what is his vision of Singapore’s legal landscape in the future, say, in 10 or 15 years’ time? What does the Minister

see as the impact of these changes on our legal landscape and our law firms? Will there be room on our shores for our larger law firms and our sole-proprietorships? Or does the Minister see the QFLPs dominating the legal landscape? In fairness to those joining the profession in the future, those currently in practice, and those considering moving to offshore firms, I would urge the Minister to share his vision of Singapore's future legal landscape. This vision will also assist lawyers and law students in planning their future career moves. It also seems that five QFLPs is just the start. Could there be more? If so, how many? Has the Minister considered how a strong QFLP local presence and a migration of younger Singapore-qualified lawyers to them will affect the traditions of our unique legal heritage – to quote the learned Member of Parliament, Mr Sin Boon Ann – and the impact on our local law firms? Also, given that more and more young lawyers may leave to join the QFLPs, which trait has already begun as they are presently joining JLVs and Foreign Law Practices, has the Ministry of Law considered how this will affect recruitment to the Singapore Legal Service, which has the important function of advising and servicing the Government? Also, has the Minister considered whether the migration of lawyers to QFLPs will cause a shrinking of the pool from which the illustrious Supreme Court Bench are appointed? The potential consequences of the amendments should not be underestimated. In supporting the Bill, Mr Speaker, I ask the Minister to paint a vision of what he anticipates the legal landscape will be in future in order to

convince lawyers that this is, in fact, the correct path to take.

4.35 pm

Mr Speaker, Sir, thank you for giving me an opportunity to speak on this Bill. Unfortunately, I am not as forgiving as the hon. Member, Mr Christopher de Souza, and I echo the sentiments of the Members who spoke before against the state of the profession as suggested by Dr Teo Ho Pin. We may have some naughty lawyers but we are not a naughty profession. Before I begin, let me declare my interest as a practising lawyer and a partner in a local law firm.

In my speech, I would like to deal with some of the amendments to the Legal Profession Act (LPA) in so far as disciplinary proceedings are concerned, I have had the benefit of reviewing these amendments and I am heartened to find that there are three main thrusts to these amendments.

Firstly, the amendments aim to make the disciplinary process more efficient in terms of time and costs. Secondly, the aim to put in place measures which would discourage frivolous or vexatious complaints. Thirdly, upon a finding of guilt, they provide a more varied range of penalties which may be handed down and which can be more commensurate with the nature of the misconduct.

I said that I was heartened to find that the amendments had these three main thrusts because I believe that the amendments will make the disciplinary process more just and efficient. This is important for all lawyers. No lawyer relishes a complaint being made against him. When a complaint is made against the lawyer and he is notified of it, his life and practice are gravely affected. The weight of the complaint hangs heavily over his head constantly. For all intents

and purposes, he finds it difficult, if not impossible, to carry on with his practice. Therefore, the speedy and efficient disposal of the complaint is crucial.

I realise that we are one of the few professions that remain self-regulated. With that privilege comes great responsibility. I am not for one moment advocating that we deal with a complaint against a lawyer in a manner which is not just or fair. In fact, I advocate exactly the opposite. I say that all complaints should be dealt with in a just, fair and efficient manner. The unfortunate reality, however, is that under the present provisions in the LPA, the whole disciplinary process, in my view, takes far too long and is rather awkward. For the benefit of Members who are not familiar, I will attempt to give this House a brief description of the process.

A complaint is made by the complainant and submitted to the Council of the Law Society. The Council refers the complaint to the Chairman of the Inquiry Panel. The Chairman of the Inquiry Panel constitutes a Review Committee to review the complaint. There is no time limit for the Review Committee to conduct the review but it can interview the complainant and the lawyer against whom the complaint is made. The Review Committee can dismiss the complaint or refer the complaint back to the Chairman of the Inquiry Panel. If it is referred back to the Chairman of the Inquiry Panel, the Chairman then constitutes an Inquiry Committee to inquire into the complaint. In the course of its inquiry, the Inquiry Committee can interview the complainant, the lawyer against whom the complaint is made and any other relevant witnesses.

At the conclusion of the inquiry, the Inquiry Committee may dismiss the complaint, impose a penalty that commensurates with the misconduct found to have been committed or recommend the matter to be referred to a

Disciplinary Committee. The Council of the Law Society then considers the report and may refer the matter back to the Inquiry Committee if the Council disagrees with the report or requests the Chief Justice to appoint the Disciplinary Committee to investigate the complaint. The process before the Disciplinary Committee is a formal, adversarial hearing where the Law Society appoints a lawyer to prosecute the case, and the lawyer against whom the complaint is made may be represented by Council in his defence of the charge.

At the end of the investigation by the Disciplinary Committee, the Disciplinary Committee may acquit or convict the lawyer against whom the complaint is made and impose a penalty or refer the matter to a Court of Three Judges. If the matter is referred to a Court of Three Judges, the lawyer against whom the complaint is made appears before the Court of Three Judges at an appointed date to show cause why he should not be punished.

In my, what you may call, brief description of the process, I have spared Members from a description of the various permutations which the process may take, depending on the various findings with each of the Committees involved may make. These permutations, in turn, cause the whole process to become somewhat cumbersome.

I note that the proposed amendments to the LPA will facilitate a tighter disciplinary process by reducing the minimum years in practice to seven. The Inquiry Panel will gain a greater pool of lawyers, from which it selects its members. Complaints will have a limitation period of six years from the date of the alleged misconduct. The Review Committee is given a guillotine of four weeks to complete its review. The

Disciplinary Committee, to be renamed the Disciplinary Tribunal, will consist of only two people as opposed to the present four. Any judicial reviews or procedures are reserved to after the Disciplinary Tribunal has made its final decision. At inception, the Law Society can require the complainant to support the complaint with a statutory declaration. Finally, where a complaint is found to be frivolous by either the Inquiry Committee or the Disciplinary Tribunal, the complainant may be ordered to pay the cost of anyone involved in the process. I am certain that these amendments will make a difference to the overall proficiency of the process. In that same spirit, I would like to request that the Minister consider certain other possible changes which may make the disciplinary process more just and efficient.

My first suggestion is to consider the abolition of the Inquiry Committee stage of the process. In so doing, there is a potential to save about six months of time and a considerable amount of duplication of work in the investigative process. Presently, there are three stages when an inquiry or investigation is carried out into the complaint. It begins with the Review Committee. If found to have merit, an Inquiry Committee is convened to inquire into the complaint. And then if so recommended, the Inquiry Committee refers the complaint to the Disciplinary Committee for investigation. Pursuant to the amendments, the Review Committee will now be given four weeks to review the complaint and make its recommendations. However, the provisions relating to the Inquiry Committee remain substantially unchanged. Under the present regime, the Inquiry Committee is given three months from the time it is constituted to complete its inquiry and submit its report. However, where the Inquiry Committee feels that it cannot complete its inquiry within the three months, it can make application to the Chairman of the Inquiry Panel for a further

three months to complete its task. This means that the whole Inquiry Committee process may take a total of six months to complete.

There are arguments which both support having what is in effect three separate investigative stages and arguments which would advocate against it. Those that support such a system argue that the more investigative stages you have, the more likely investigations will be thorough and frivolous complaints will be thrown out early on. In reality, that is not the case. I say this because the subject of each stage of investigation is the same in that each committee is looking at the complaint and the evidence surrounding that complaint. More often than not, the easiest option for the lower Committee, such as the Review Committee and the Inquiry Committee, is to simply refer it to the Disciplinary Committee for investigation. Once that occurs, the Law Society appoints a lawyer to prosecute the case and that lawyer effectively conducts another thorough review to prepare his case and advises the Law Society on the charges to be brought and the best case to prosecute. In effect, this turns into an unofficial fourth stage of investigation.

4.41 pm

In my view, a better approach to the disciplinary process would be for the Review Committee to review the complaint when it is received, with slightly wider powers. These wider powers would enable the Review Committee to consider the complainant's evidence and the defence evidence. If the Review Committee finds that there are prima facie grounds for the complaint, they can then recommend to the Law Society that the complaint be referred to a prosecutor. The prosecutor will proceed to

gather all the relevant evidence and statements with a view to advising the Law Society on whether the complaint ought to be prosecuted before the Disciplinary Tribunal or dismissed outright. If the recommendation is to prosecute, the same prosecutor is used to prosecute the case before the Disciplinary Tribunal. This process will save not only time and cost, but also place the burden of inquiry on the shoulders of only one party. It will obviate the need for an Inquiry Committee to gather and review evidence with a view to making a recommendation. It also avoids any duplication of work that now takes place when the lawyer appointed by the Law Society to prosecute at the Disciplinary Committee stage repeats much of the work that the Inquiry Committee has done.

I would also like to ask the Minister to consider these other areas of concern that I have. As I mentioned earlier, the Inquiry Committee has a maximum of six months to complete its report. However, I have seen cases where the Inquiry Committee has taken in excess of six months to render its report. There is no recourse in the LPA for the lawyer against whom the complaint is made. Its only recourse is to take the matter to Court. Of course, by the time that application comes on for hearing in Court, the Inquiry Committee is likely to have rendered its report. Will the Minister consider providing some recourse for the lawyer against whom the complaint is made in such a situation?

Under the section 86(7) of the LPA where the Inquiry Committee finds that the complaint should be referred to the Disciplinary Tribunal for investigation, the Inquiry Committee will now be required to frame the charges that are preferred against the lawyer in question. Would this not impose considerable constraints on the lawyer appointed by the Law Society to prosecute the case before the Disciplinary Tribunal? What if, during his preparation of the case, he feels that the

charge ought to be a different one? Is he bound to prosecute the precise charge drafted by the Inquiry Committee or is he or the Law Society at liberty to amend the charge? Under section 93(3) of the LPA, the Disciplinary Tribunal has six months to conclude its investigation and submit a report to the Council of the Law Society. If it fails to do so, the Law Society can make an application to the Chief Justice for directions to be given to the Disciplinary Tribunal. But what happens if the Council does not do so? What recourse is open to the lawyer against whom the complaint has been made? Again, my thrust is to ensure that justice is done and seen to be done expeditiously.

Sir, with that, I support the Bill.

4.44 pm

Mr Deputy Speaker, Sir, thank you for allowing me to speak on the Legal Profession (Amendment) Bill. Let me at the outset declare my interest in this Bill.

Sir, while I am not a lawyer, I do have a vested interest in the proposed liberalisation of the legal profession, which is one of the important changes this Bill seeks to achieve. Liberalisation of the legal profession will hopefully spur other professions in Singapore, including the accounting profession to which I belong, to be less protective of its turf and its members and instead be more open and receptive to new ideas, talents and specialist skills.

Sir, I would like to speak on two proposed changes which the Bill seeks to amend, namely, the liberalisation of the practice of law in Singapore and the streamlining of the disciplinary proceedings for errant lawyers.

Today, Singapore is one of the most open economies in the world and over the last few years, we have made huge strides in becoming a regional and, in some cases, global hub for multi-national companies to locate their key functions, such as procurement, supply chain management, finance and treasury operations. Singapore is now the preferred location for investment banks, private equity houses and other financial intermediaries to locate their regional cross-border transaction teams, which cover not only South-east Asia but increasingly India and even the Middle East. These changes in the business landscape have brought about new sophisticated buyers of professional services. But the ability of professionals in Singapore to adapt and innovate to meet the demands of these new buyers of professional services is hampered by the rules and regulations governing professions such as lawyers and accountants, not keeping pace with these changes in the market for their services.

In fact, the legal profession is probably one of the most restricted and protected professions in Singapore. For example, foreign law firms are presently not allowed to set up businesses here except under very limited scenarios. This is an unnecessary hindrance to businesses. It restricts their choice of service providers and could mean that they do not have easy access to specialist skills and domain knowledge. Often they cannot use the international law firm they use in other locations and have to work with new untested advisers. To the extent that this Bill will allow some top quality international law firms to operate locally, it is a positive. But the proposals in the Bill are far too tentative and limited. We could have been much bolder with the liberalisation plans because experience elsewhere has shown that decisions on supply and demand of professionals are better left to the market rather than professional bodies or government departments.

Opponents of further liberalisation, and we have heard a few this afternoon, have argued that if international law firms are allowed to practise here, many local lawyers would join these firms and eventually leave Singapore. This is a very unlikely scenario because international law firms are likely to use Singapore as a hub for the region and we would likely see an inflow rather than an outflow of talent. This is certainly the case with large accounting firms, consultancies and other such organisations. The migration of people and skills from the West to the East has only just begun. In another decade, world-class service organisations will have a lot more of their people in Shanghai, Hong Kong, Singapore, Mumbai and Dubai than today, and this will be at the expense of London, New York and Paris.

However, in Singapore, we have another problem because the supply of both local and foreign qualified lawyers have been very tightly controlled over many years, resulting in the present severe shortage of lawyers. Unfortunately, the Bill does not address this significant problem. I hope the Ministry of Law, working with the legal profession, will liberalise the domestic supply of lawyers and also make it easier for foreign lawyers to practise here because a shortage of qualified lawyers does affect our competitiveness as a centre of business and finance. We must not miss the opportunity of the talent migration from West to East to anchor on our shores.

The second point I would like to raise is that the Bill, in an attempt to deter frivolous complaints, will now require a complainant to furnish a statutory declaration or an affidavit to support a complaint against an errant lawyer and to bear the costs for those involved in the proceedings. The amount of deposit that the Inquiry Committee can ask the

complainant to deposit with the Law Society to cover necessary costs will also be raised from $500 to $1,000. These new proposals will be seen as an unnecessary inconvenience and even intimidating and alarming to many, particularly the man in the street. They may be frightened to take any action, fearing perhaps unnecessary consequences of their action.

Whether complaints are frivolous or not can be determined by the Law Society with its review and inquiry committees. Given that these committees now have timelines to meet to wrap up their work (eg, the Review Committee has to finish its work within four weeks), any complaint, whether frivolous or otherwise, should be dealt with efficiently. This should balance the rights of a person to have access to redress and the innocent lawyer being tied down with a frivolous complaint for a long period of time.

In this open and transparent information age, when most organisations have an established policy on "whistle-blowing" and encourage 360-degree feedback from all employees, why are we making it difficult for clients and others to provide feedback on professionals serving them? Unfortunately, in Singapore, the situation is similar in other professions. For example, in the case of doctors, dentists, accountants, a complaint must also be accompanied by a statutory declaration. Given that we are in fact becoming a global city, we need to revisit this practice, not only in the legal profession but also in the other professions.

Let us look at what happens in other countries.

In Hong Kong, for example, purely as a starting point, if anyone wants to make a complaint against a lawyer, it can usually be done in one of the following

ways: a simple letter to the law firm to which the subject lawyer is attached or a simple letter to the Hong Kong Law Society (Conduct Section). Obviously, if the complainant wishes to have his or her complaint considered by the Hong Kong Law Society, the complainant is probably hoping for the complaint to result in disciplinary action proposed by the Hong Kong Law Society. What practically follows the above-mentioned initial letter to the Hong Kong Law Society is that if the Hong Kong Law Society decides to consider the complaint on a more formal basis, then further documentation will be required, ie, statutory declaration with supporting affidavit.

The UK mechanism is by way of letter of complaint to the Legal Complaints Service, which is part of the Law Society but operates independently. Statutory declaration is not required.

In the US mechanism, the complaint is ordinarily signed by a lawyer, who, by signing, affirms that there is a basis for allegations. The different states can, of course, differ in their practices but the complaint needs to be served and filed.

Sir, I asked that we remove the need for a statutory declaration or an affidavit to accompany every complaint to enable complaints to be made freely and without hassle upfront.

So, once again, thank you for giving me the opportunity to speak on the Legal Profession (Amendment) Bill.

Sir, I thank the hon. Members for their speeches and support for the Bill.

I might as well touch on what Dr Teo said about lawyers, which might provide some light relief to the House. When he was speaking, I was reminded of a survey

that was done in the United States on which were considered the most respected and least respected of professions. The survey went like this: third from bottom were used car salesmen; second from bottom were politicians; and bottom were lawyers. So, I leave that to you and let the lawyer politicians here decide where they belong.

Sir, broadly, in terms of the speeches, the non-lawyers have been more supportive of these amendments. The lawyers, I think it is fair to say, have reservations. That is how the debate has panned out.

Let me deal with those reservations and the points that have been raised. First, of course, the bulk of the comments and passion have been directed at the liberalisation amendments. Mr Hri Kumar, Mr Sin Boon Ann, Mr de Souza and, I think, Mr Palmer touched on it, but he did not quite say too many things.

The following points were raised: are we sure that there are going to be clear economic benefits? What are going to be the consequences to the legal profession? Is there going to be further liberalisation? Have we established a clear rationale for this liberalisation? Because the onus is on those who want the liberalisation to prove that it is needed before we proceed with it.

First of all, Justice Rajah's committee comprising senior practitioners and others looked at the matter carefully last year and made its recommendations based on a number of conclusions, one of which was that the economic sector will indeed grow. I have covered these reasons in some detail in my speech and there is really no point in repeating them. But it is quite important to note that the key people – the non-lawyers who have a stake in our system – particularly the financial sector representatives, have very strongly asked for this. So, I think in our

policy making, we must take that into account. We survive as an economic entity by reason of being open, by reason of being economically competitive, and the financial services sector is one of the key pillars of our economy and we have to listen to the feedback from that sector.

If the legal market is opened to the top global law firms, they will undoubtedly be able to increase the size of their Singapore offices. This will, in turn, help them to undertake more regional work in Singapore. Greater competition will also add to the vibrancy of the local legal market and local law firms will be forced to raise their game. The presence of very strong local and foreign law firms will then further strengthen our reputation as the region's legal services centre.

And really which way you go depends on the economic philosophy that you take. More competition, the consumer of legal services benefits, they have got greater choice. As Mr Banerjee pointed out, greater variety of services, young lawyers will have more choices. And if we boil down to the essence of the fears that have been expressed, and do not mistake me, I completely understand the concerns and the fear that underpins some of these concerns, which is really that the parties who will come in will be global giants, very different in size from our large local law firms, would we be able to compete? It is a fair question but the answer does not and cannot depend only on whether our larger local law firms will face more intense competition. They undoubtedly will. And the point is they have to accept the challenge. We must remember that the decision to liberalise was taken because we believe that it is for the overall economic interest of Singapore. It should also benefit the legal services sector as a whole.

Mr Sin Boon Ann raised the possibility of loss of our legal heritage and whether we are pursuing economic interests at any

cost, even to the detriment of our local legal profession. Well, I think clarity of terminology is important. What do we mean by "legal heritage"? Or what does Mr Sin refer to when he says legal heritage? Our legal heritage comprises our common law tradition, including the body of local case law, our judiciary, our legal service, our law firms and individual practitioners, who together comprise the Bar. The changes will not affect large parts of this legal heritage. They will affect the larger law firms if the larger law firms do not prepare themselves for competition, and it will affect the interests of the more senior partners of the top few law firms. I have some sympathy as I have said, for the point that has been made, but we have to consider that against the potential benefits to Singapore as a whole.

Competition can be brutal but can we forever protect our biggest law firms from competition? That is the question. Should we do so? Mr Sin says we need more time. Now, let us look at amount of time that we have had. First of all, it has been more or less completely protected up to now and, secondly, in 1999, the signals were sent that we need to start opening up and the joint-law ventures were introduced. Our law firms, particularly the big ones, have had almost 10 years to deal with the potential opening up.

In December last year, the proposed liberalisation was announced. Another year was given. Licences will only be issued in December this year. So, those who are competitive and prepared will do well in the new environment. Those who do not prepare may find it quite challenging to carry on in the same shape and form without making structural changes.

A further point was made that our local law firms will find it difficult to attract lawyers, young lawyers, because the foreign law firms will pay more and

will attract them. Undoubtedly. But let me ask the reverse question: what is the solution? Is it to put up barriers to make sure that our local young lawyers have no choice but to work in Singapore law firms? Can that be a total solution? From a public policy perspective, when we have to balance the interests of the profession as a whole and Singapore as a whole, including the benefits to the young lawyers, can we put the interests of a few law firms ahead of the interests of the vast majority of younger lawyers? I am not saying that the few law firms do not have a point.

As I said, I have some sympathy for the points that are made. But how long can we continue in a protected environment which, from a non-lawyer's perspective, benefits only a small minority? Can we do that? Would that be equitable? Why should our young lawyers who come out of law school be denied the opportunity to earn two or three times as much as what they might earn in a Singapore law firm and they can improve their skill sets? In this context, we must remember, because we are talking about legal heritage, that it is important to emphasise that a number of areas would continue to be ringfenced – constitutional and administrative law, conveyancing, criminal law, family law, succession law, trust law for individuals and litigation.

Mr Sin Boon Ann asked how would the provision of seamless service help the foreign institutions, the financial institutions which have asked for this. But I think the answer is obvious. First of all, they say that they will benefit, and I assume that they have no vested interest when they make this point. Secondly, from any market perspective, telling the international financial institutions that whenever they want to deal with law in Singapore, they need to use at least two or three law firms and go to a foreign law firm for international law advice and the

Singapore law firm for Singapore law advice and pay two sets of bills, as opposed to going to one-stop centre, I think it is a no-brainer. The real question, as I come back to it, is that our law firms have built to a certain size and have a certain tradition, some of them go back to 100 years. Mr Sin Boon Ann mentioned them, they will face very stiff challenge and if they do not gear up, they may find themselves in a very, very challenging atmosphere. Should we liberalise and take on those challenges and put our law firms through those challenges? What are the benefits? That is a balancing exercise.

I think one can take the view that I have taken. I grant that some can take the view that Mr Hri Kumar and Mr Sin Boon Ann have expressed. But after years and years of looking at this, the balancing exercise is now tilted towards liberalisation.

Mr de Souza asked: are we going to stop at five? Are we going further? What is the direction? Let us be clear that the direction has been set. The speed, the pace of progress, how far we go, how many more licences are issued – those are matters that we must look at carefully. With experience and, as we work through this, with the initial set of licences, we will proceed at a pace that is comfortable. Also, in the context of all the issues that have been raised, we are mindful of the impact on the larger local law firms. It will be a calibrated approach – a limited number of licences, help our firms upgrade themselves, give them a bit more time and, over a period of time, we will see how the market moves.

In this context, Mr Sin Boon Ann mentioned Hong Kong and I think if I am not wrong, Mr Hri Kumar mentioned Hong Kong as well. Hong Kong may not be the best example because Hong Kong was a colony and the English law firms in Hong Kong could not really be considered foreign. They had a substantial number of

benefits. So, that is not a good example. Really, we have to look at it ourselves in Singapore and look at what our local law firms have enjoyed up to now and see how much of that can be preserved while we open up to competition.

Mr Banerjee, in contrast to the Members who made these comments, suggested that we should be even more liberal in opening our legal sector so as to attract more legal talent and international law firms to set up in Singapore. These views show that there is a range of opinions that is possible in this area and we have taken a measured approach. I think it is better for us to proceed cautiously and make sure we get it right. Also, local and foreign firms need to adjust to the new paradigm, and we will see how it works out.

Mr Alvin Yeo spoke about the importance of the joint law ventures in allowing a local law firm to upgrade itself by partnering with an international law firm. He hopes that this will be taken into account in the implementation of the EJLV and QFLP schemes. The Joint Law Venture scheme is an important scheme. It was introduced in 2000, and I certainly and personally believe that they are an excellent way for local firms to upgrade and acquire new skills.

Mr Sin Boon Ann said that it does not really work in the transfer of technology. I think it depends on the law firm. It has worked with some and it has not worked with others. That is a fair statement. The issuing of new QFLP licences does not detract from the EJLV scheme. They offer an additional mechanism for foreign firms which would not want to go into the joint ventures. But the importance of the Joint Law Venture scheme explains why we have significantly enhanced it, and these enhancements were explained in my speech. They are intended to create a more balanced partnership between the local and international law firms in a joint

venture and it should make the joint law venture arrangement even more attractive and, hopefully, persuade more joint law ventures. We will take a very proactive approach towards firms that want to structure the EJLV scheme in a way they prefer and, if it is a sensible structure or a workable structure and they want to go further, we will try and play a proactive and positive role.

Mr Kumar, in the context of speaking about outflow of talent from local law firms, mentioned also the Legal Service and asked what am I going to do about it. I am not sure whether the question was rhetorical, but the fact is both public and private sectors constantly face the challenge of attracting and retaining talent and, undoubtedly, with this opening up and given that there is already a shortage of lawyers in Singapore, that challenge is going to be quite acute. The Legal Service has exceptionally bright officers and many of them are young. It is in this context quite imperative that a lot of attention is paid to attracting, retaining and managing talent within the Legal Service so that the Government gets the kind of advice that the Singapore Government deserves. The Legal Service officers need to know that there is a clear career path for them and the terms of service in the Legal Service have to be competitive with the private sector, particularly, in the new competitive environment. And as the Minister for Law, and insofar as it is within my power to do so, this is an issue that I will be very concerned with.

Dr Teo and Mr Banerjee suggested that it was too onerous to require all complaints to be supported by a statutory declaration. Mr Banerjee suggested that the Law Society should decide which complaints should be referred to the Inquiry Committee. Every letter of complaint or misconduct is referred by the Governing Council of the Law Society to the Chairman of the Inquiry Panel. He

then appoints a two-man Review Committee, comprising a lawyer and a judicial or legal officer, to serve and decide if the complaint is frivolous, vexatious, misconceived or lacking in substance, and submits a written report to the Council if it is so found. The point is, if a complainant believes that he has a legitimate complaint, there is absolutely no reason why he should not put it down by way of a statutory declaration. That way, everyone's mind gets focused and they know that if they complain, they better get the facts right and make a serious complaint. It will deter a large number of people who either do not believe in their facts or it does not really matter to them but they just want to file a complaint. That is the purpose.

Dr Teo asked why lawyers should be given protection over other professionals, such as doctors, architects and engineers. I would like to clarify that complaints against professionals in these professions must, in fact, be supported by statutory declarations. The proposed amendment therefore brings the legal profession in line with these other professions.

Mr Banerjee made the reverse point which is that statutory declarations should be done away with all these professions, but I think that is a matter of judgement, and as a matter of philosophy, I have explained why we believe that there should be statutory declarations. To make a statutory declaration is not a very difficult thing. A complainant needs to only approach one of the Commissioners for Oaths listed on the Law Society's website who will assist him or her to fill in the form, as set out in the First Schedule of the Oaths and Declarations Act. That is certainly not any more difficult than approaching a lawyer in the first place and getting advice, which the complainant is likely to have done. And, really, this requirement should be considered against

the impact of disciplinary proceedings on the lawyer's reputation and livelihood. A complainant who has a genuine complaint is unlikely to be deterred by this requirement.

I move to the issues raised by Mr Palmer on timelines. I agree that undue delay in the process is not desirable. On the other hand, the lawyer himself will want to ensure that a proper process is in place to consider his case. There has to be due process. We are dealing with a quasi criminal process that may destroy reputations and livelihoods, sometimes forever. Justice hurried is justice denied. A balance has to be struck, and we will try to do that.

The Inquiry Panel will be streamlined. First, we are reducing from 12 to seven, the minimum of years standing required for the Chairman and the Deputy Chairman of the Inquiry Panel. This expands the available pool of advocates and solicitors who can be appointed to the Panel and will help to speed up the process. Second, we are allowing members of the Review Committee who did not dismiss a complaint to be appointed to serve on the Inquiry Panel for that complaint. Their familiarity with the complaint and the Review Committee's reasoning will help to expedite the inquiry. Third, we are imposing a number of timelines on the Inquiry Panel for the first time, for example, requiring the Chairman of the Panel to constitute a Review Committee within two weeks of receiving a complaint, and throughout the process, we have imposed timelines. While we have streamlined the Inquiry process, we have not seen the need to do away with the Inquiry Panel, as suggested by Mr Palmer. The Inquiry process involves a lay person. That is important. We do expect to see significant improvement in the disciplinary process but, over time, if the speed does not improve, we will review the process.

In this context, let me deal with the point that Mr Low Thia Khiang made. He said that in 1986, when the amendments were moved by my predecessor, the lay person was for the first time introduced in the Inquiry Committee and the Disciplinary Committee. He said that was necessary for transparency and for it not to be seen as a fix amongst lawyers, so a lay person was introduced. He asked if those reasons are no longer valid and that is why we are doing away with the lay person.

I think he proceeds from a misunderstanding of what is happening with these amendments. First of all, in the past, there was an Inquiry Committee and a Disciplinary Committee and then the Supreme Court took over. What is happening, in order to make the complaint go through faster and, therefore, in fact, help the public and the complainant, we are doing away with the Disciplinary Committee stage. We are having the Inquiry Committee and then moving it straight to the Disciplinary Tribunal. In the Disciplinary Tribunal, the Chairman and the other members are now appointed by the Chief Justice. So, it is a very serious process. It is completely transparent in the sense that the complainant can take part and give evidence, and everything is formal, recorded. Therefore, after the Inquiry Committee's process, the lawyer, who is subject to the complaint, if it moves further, goes straightaway into the Disciplinary Tribunal process. In that process, it does not make sense to inject a lay person, partly because they have found, through experience over 20 years, that that really delays proceedings. Secondly, in such a formalised process, the lawyers would be the best judges. The Chairman has got to be a retired Judge, Judicial Commissioner or a Senior Counsel and he is appointed by the Chief Justice. If anyone is unhappy, he can go further. So the complainant is not shut out.

Dr Teo asked the rationale on the Disciplinary Tribunal, why there is an introduction of a two-man tribunal,

and he himself proposes a three-man tribunal. What all these comments show is that, whichever route we take, there can be no satisfying everyone. Some want a bigger panel, others a smaller one. So, let me try and explain what has been the fundamental driving rationale for us. It is to:

ensure that the complainant's complaint gets heard quickly;

make sure that the hearing takes place with due process and the lawyers' interests are also protected; and

do it all in a way that does not bring the whole process into disrepute.

So, that is what we are trying to do. Members will remember that, in my speech, I pointed out that the original proposal by Justice Rajah's committee was for the tribunal to come down to one-man to make it even faster. But the Law Society was very unhappy about that and, after long discussions with the Law Society, we decided that we will go with a two-man tribunal. We believe that a three-man tribunal is likely to face the same problems with the current four-man tribunal where the hearing times effectively doubled over a few years and we do not want to go back to that. The Law Society understands the importance of making sure that the process is speedily and effectively carried out and has promised that matters would be dealt with in a timely fashion with a two-man tribunal. But, as I said, we will monitor the situation. If it appears to reach a stage where it is really unacceptable, we will have to relook at it.

Dr Teo asked about the remuneration of Disciplinary Tribunal members and he suggested that cost for the tribunal should be shared among the complainants,

lawyers and the Law Society, and that it should not be from public funds. Sir, the President of the Disciplinary Tribunal will be a former Judge or Judicial Commissioner or Senior Counsel, as I said. The second member will be a senior practitioner of 12 years' standing. These are very senior lawyers in the profession who can command premium rates from their clients. They will spend time hearing the trial and writing grounds of decision. That will take a significant amount of time. What is envisaged is not payment of market rates but a very small honorarium to recognise their professional effort in dealing with the Disciplinary Tribunal proceedings. Advocates and solicitors are officers of the Supreme Court. Once the Law Society refers a complaint to the Tribunal, tribunal proceedings are managed by the Supreme Court. In fact, as I said in answer to Mr Low's point, the Chief Justice appoints the President and the other member. The complainant and the Law Society are party to the complaint, and asking them to fund the tribunal that hears the case may cause them to consider the issue of cost as a factor in whether to bring or proceed with a complaint, and we certainly do not want that. There is public interest involved. As I said, advocates and solicitors are officers of the court and, therefore, it is only sensible that the very small honorarium is paid out of public funds, and this has been discussed with the Supreme Court.

Mr Hri Kumar asked about increased penalties. He has noted that there is a disparity in the increased maximum penalties the court may award against legal officers who are non-practising solicitors, as opposed to practising solicitors. He has also made a number of other points about doctors. I will come to that as well. I think it is important to view this in the light of the context in which such lawyers practise. A practising lawyer

deals with and has direct access to much larger sums of money than legal officers who are non-practising solicitors, especially those involved in corporate practice.

Mr Hri Kumar mentioned that the upper limit for doctors stands at $10,000 whereas that for lawyers is $100,000. Mr Kumar has got to go back to the rationale for this. Again, this was considered by the committee last year. They proposed $100,000, and I am not sure whether the Ministry of Health has looked at the issue vis-a-vis doctors. But I am sure, if Mr Kumar raises it with the Ministry of Health, they will look at it and Mr Kumar will be greatly enamouring himself with doctors in the process. But to be more serious about the point, for lawyers, without cross-disciplinary analysis, this has been looked at in the context of lawyers. What is appropriate in the context of the amounts that are dealt with by lawyers, in the context of the practice that lawyers carry on? For example, $100,000 was considered appropriate by the committee, and the Government did not see any reason for taking a different approach.

Mr Kumar also raised the point about why lawyers are subjected to five years' suspension whereas doctors are only subjected to three years' suspension. The point is that a five-year suspension has always been there in the statute books. Again, it is something that the legal profession and the Ministry of Law, together with the Law Society, have considered appropriate. It is the upper limit. I do not think too many lawyers get suspended for that period of time.

Dr Teo queried if these amendments were only minor and more was needed to regulate the conduct of lawyers. In this House, we have heard a variety of views, but I think one point which has consensus amongst everyone except Dr Teo is that this is actually quite a substantial

amendment. It is a major step. It is a paradigm-shifting step. And the changes relating to the disciplinary process are very substantial. The whole disciplinary mechanism has been reviewed. Timelines have been imposed on every step, and parts of the process which have impeded a quick and efficient disposal of the disciplinary process have been removed or streamlined so that it will be seen as effective and responsive.

Dr Teo mentioned specifically The Straits Times report about six rogue lawyers on the run. The new Solicitors' Accounts Rules were significantly tightened in 2007. After the Opening of the Legal Year, the Chief Justice appointed a Judge to chair a working committee to look into the conveyancing system and consulted various stakeholders. I understand that the committee tendered its report to the Chief Justice. These issues require careful consideration. Let us see what they propose. If more changes are necessary, the Government will not hesitate to make them.

Ms Ellen Lee has expressed concern over the amendments for medical examination.

First, let me say that, in moving these amendments, the paramount interest has always been that of the lay client and the general public. The point really is that the general public must have confidence in the legal profession. The Law Society's powers come with adequate safeguards. In cases where the Law Society issues a direction to a solicitor to stop practising until he has submitted himself to a medical examination, the Society is required to make an application to the High Court for an order within seven days. So, the onus is on the Law Society. And if it does not do so, its direction lapses as if no application is made. So, if the Law Society makes a direction against a lawyer, it has to apply within seven days. If it does not apply, then that is the end of the direction.

Second, in deciding on an application of this nature, the High Court Judge has to be satisfied that the solicitor's fitness to practise does indeed appear to have been impaired by reason of his physical or mental condition. Then, the Judge will order the solicitor to submit to a medical examination. The registered medical practitioner concerned must also meet such criteria as a Judge may specify in making his determination. Mr Kumar asked on this point. The Bill is silent on the specific point whether the Judge appoints or the practitioner can specify because discretion is given to the Judge. As in the normal way, parties can nominate a medical practitioner for the Judge to approve. And if he does not feel that that person is appropriate, he can direct the parties to go back and look for someone else, or he can direct a specific medical practitioner. But by and large, I think these issues will be dealt with as a matter of commonsense. A medical practitioner of a certain experience and expertise can be specified and, ultimately, the Judge would have final control.

The Judge can have regard to his observations and he can direct the medical practitioner to look at the solicitor. The doctor can look at the results of any tests he carries out on the solicitor and any facts which are communicated to the medical practitioner by the Attorney-General, the counsel or any other person. The solicitor is also given rights to ensure that he is given the opportunity to state his case. There is a provision for him to apply to the Council or the High Court, as the case may be, if he has any proof of a change in circumstances or any good cause for the direction to be rescinded or the court order to be set aside. In the first place, at the hearing, he can represent himself or get a fellow practitioner to represent and state his case. It is only when the Judge is satisfied that the process moves further.

Ms Ellen Lee has raised several practical issues, such as how the medical practitioner would adjudge fitness to practise and whether there is an onus on law firms to inform the Law Society that a lawyer may be mentally impaired. The issue of fitness to practise would need to be assessed, based on the facts of each case, bearing in mind the type of mental or physical problems the solicitor concerned is facing, and other relevant facts, including the demands on the area of practice. It is not practical to legislate all of these. The safeguard here is that it is the courts which will make the determination concerning the solicitor in question, taking into account all relevant facts, including the assessment of the medical practitioner.

The amendment must be viewed in context. At present, the Act already allows the Law Society to intervene for various good reasons, such as bankruptcy, abandonment of practice and so forth. Now, the Law Society can also intervene if a solicitor is incapacitated by illness or accident to such an extent as to be unable to attend to his practice, or if he is found to be of unsound mind. The proposed amendment is necessary to fill a gap in the range of circumstances and is in sync with the other provisions that are already there.

At least Members from the legal profession here would know of the 2007 case of Law Society vs Chiong Chin May Selena where the Court of Three Judges had to deal with a lawyer who suffered from manic-depressive psychosis. Apparently, her condition was known to some others, but the Law Society had no powers to intervene on grounds of mental illness at that time. Subsequently, she appeared before the Court of Three Judges, accused of breaches of Solicitors' Accounts Rules. She was suspended from

practice for a year. In its judgment, the Court of Three Judges commented that it was timely they considered the amendments for appropriate steps to be taken to examine the fitness of solicitors in sole proprietorships.

As to whether law firms have the responsibility to inform the Law Society that any solicitor under their employ may be mentally impaired and the attendant issues of liability and obligations, these are practical and indeed ethical issues which the Law Society should work through in consultation with the law firms. The key concern here is to strike the right balance between protecting the rights of the solicitor concerned and ensuring that the Law Society can deal with situations where the malfeasance of a member of the profession may affect public confidence in the legal profession as a whole.

Mr Hri Kumar asked why a lawyer should be in contempt of court if he should refuse an examination, and he contrasted it with the situation of doctors. Lawyers are not the same as doctors in this particular context. A lawyer is an officer of the court and subjected to the discipline of the court. The courts always have the power to decide who can appear before them, what the framework should be and what the conduct of that lawyer should be. Therefore, if it appears to a judge that an advocate and solicitor, an officer of the court, is of an unsound mind or requires medical treatment and the doctor refuses, then the judge should have the power to give such a direction. If the lawyer wishes, I suppose what the lawyer could do is to say, "Look, I will give up my certificate voluntarily. Would you please consider not making this order against me, in return for which I will not practise?" The Act does not preclude that. What we have done is to give a substantial amount of discretion to the judges.

Mr Sin Boon Ann asked why do we have clause 36 which restricts judicial review. In fact, he said "ousted" judicial review. "It is an important constitutional safeguard. Why are we doing this?" I would clarify that judicial review is not "ousted". What we are doing is deferring it, because what has happened in the past is that even before the tribunal proceedings and disciplinary proceedings are over, there were repeated applications for judicial review, which then dragged on and delayed the entire proceedings, vastly contributing to delays. So, the approach has been to finish with the process, then you go for judiciary review. Anyway, when you go before the Court of Three Judges, you can raise all

the arguments that you could have raised during the judicial review. So the lawyer is, to that extent, not in any worse-off position but what he cannot do now is to try and interrupt or delay the ongoing proceedings.

Mr Christopher de Souza asked why allow rule-making and move it away from Parliament. Sir, this is a very considered decision. The principles have to be debated here and they are all in the Act. What is moved into rule-making is the day-to-day conditions of running a business. It does not make sense to invite all these law firms, give them a licence, prescribe the conditions, and we cannot pretend that we can today envisage the changing business environment as it moves month-to-month and year-to-year. And when they move, the Attorney-General must have the flexibility to move quickly to deal with the changed circumstances, and, therefore, deal with them as part of the licensed conditions because he is now regulating the conduct of their business that needs a light touch, a flexible touch, and it cannot be done through an Act of Parliament, which may require frequent amendments. That does not make sense and it will not allow them to create the most optimal conditions under which the law firms can operate.

Mr Sin Boon Ann again asked if we are pursuing economic benefit at any cost. I do not think the answer is we are pursuing economic benefit at any cost. I have already identified the calibrated approach we are taking, and the overall cost benefit analysis, and what goes into the equation. Ultimately, I agree with him that it is a question of judgment. In this case, our judgment happens to be different from his. I will put it that way.

Mr de Souza asked me what is my vision of the legal landscape, going forward. Let me try and summarise it this way. We want our local lawyers in Singapore law firms, in foreign law firms, we want them to be world-class and we want them to get the best training and exposure possible. We would like a vibrant, cosmopolitan legal sector where foreign law firms and Singapore law firms compete on even terms and add to the vibrancy and the potential of our status as an international legal market. We want all of these to create a situation where our economy receives a boost and the kind of support that it deserves from the legal profession, which the professionals and the financial services sector say they are not getting now.

Some of them are getting it and some of them are not getting it, and the whole point is try and move further, to make sure that nothing holds back the growth of this entire sector and making sure, at the same time, that lawyers in our legal profession benefit by increasing their legal and technical expertise by accessing the best knowledge in the world.

Whether or not you accept that vision, contrast that with what would be the case if we do not open up. It will continue to be a protected legal market. The primary beneficiaries would be a few people. We will prevent our young lawyers from being able to work in

Singapore for the top law firms in the world and we will continue to receive complaints, whether rightly or wrongly, from international financial institutions that they are not able to access the best legal expertise in Singapore. So, those are the two contrasts. One is current, it is not a scenario I am painting. That is the current situation. The scenario is: by making these changes, can we move to this vision?

Sir, I think I have answered all the questions. But this move should not be seen as being against any particular sector, group or law firm. As I said, and I firmly believe, that if our law firms can compete, they will survive and prosper.

5.36 pm

Sir, I would like to thank the Minister for his very comprehensive reply and response to the comments that have been made earlier in relation to the Bill. I just have a couple of clarifications or comments, if you may, Mr Deputy Speaker.

The first point relates to competition or lack of it, and the point that was made was that by opening up the sector to competition, it will lead to improvement of the legal services in our sector. Sir, if you recall, in my speech earlier, I am not against competition. My point was essentially one of fair competition and it was acknowledged by the Minister in his speech that if we open up the legal services, can we be sure that the competition or the playing field itself will be fair?

One significant point that comes to mind immediately is competition for talent. It is essentially a no-brainer that a young law graduate looking at prospects and options will be more inclined to join

up with foreign firms that offer better pay, better perks, better opportunities, travel or otherwise, and advancement in his career. What kind of impact or knock-on effect will this have on local firms to hire these talents from our law schools and how will this affect our future development and, above all, our competitiveness and ability to then compete with these bigger firms? So, that is essentially a point that we have to think about when we talk about competition. As I said earlier, I am not against competition. My only question is: can the Government be sure that, in doing this at this time, in moving at such haste and speed, we are basically ensuring that all will be fair at the end of the day?

The second point that was made by the Minister is that young lawyers, because of the present set-up and situation, are not given the option. I think the truth of what is happening in the market at the moment is that we are seeing an increasing migration of young lawyers with a few years' experience to other jurisdictions – China and Hong Kong – and, in itself, Singapore firms are having to compete to retain these talents. So it is not as if these lawyers are not given the options to go into foreign firms to widen their exposure, training and sharpen their cutting edge in legal practice. And increasingly, speaking for my firm alone, we are losing many, many good lawyers to these foreign firms. As it is now, without opening up the legal profession to foreign firms or competition, we are not able to keep these talents within our shores. So I am not sure whether young lawyers, as said by the Minister, have restricted options in their career choices in choosing which firm to practise.

Thirdly, there was a point made about the transfer of technology and the seamless provision of services in cross-border work. If I recall, some years back when we –

Order. Mr Sin, please make the clarification rather than debating it.

Sir, I think that it is important that I touch on these few points. I think it is quite clear that seamless provision of services –

Order. Mr Sin, please make your clarification.

Yes. Will the Minister please clarify that seamless provision of services was contemplated in the Joint Law Venture policy when it was first mooted, and, perhaps, the Minister would wish to enlighten us on this.

The next point essentially has to do with legal heritage. Is the Minister not aware, or perhaps the Minister would clarify, that the law firms which have a long and illustrious history in Singapore play a very important role in the development of legal knowledge, tradition, practice, where there is a very close bond and relationship between law firms, practices, law schools, law committees, review committees and public service work? Can the Minister be sure that these same time-honoured traditions will be maintained by these foreign firms who may be totally alien to our culture and practice?

The last point of clarification is the question of whether or not we are a protected profession. I would say that, increasingly, the local law firms are moving with the changing times. We are facing competition ourselves when we go out to places like China and India, and having to compete the same. It is not as if time has stood still for these law firms. They are also putting their acts together and trying to meet the demands of globalisation and changing practices. Perhaps the Minister may wish to note that as well.

On the first point about competition, would it be fair, Mr Sin Boon Ann said that foreign law firms offer better pay, better conditions and, therefore, it is a no-brainer that Singapore lawyers will gravitate towards the foreign law firms. I should take that point with the third point he made, which is that there is no restriction on young lawyers because those who want to go overseas have plenty of options. They want to work for a foreign firm, they can go overseas. It is not as if they do not have options and, therefore, why open up?

I think there is a logical conundrum that Mr Sin Boon Ann is falling into and it is this: by making the point that when we open up, the foreign law firms will be more attractive in Singapore to Singapore lawyers. He recognises that by way of the current regulations, we are actually preventing it, which means we are restricting the options for the Singapore lawyers. So, it does not jive with his point which he made later on – what is the problem for the young lawyers? They can go overseas. That is precisely the point. If they want to work for a foreign law firm now, they have to leave Singapore. We are forcing them to leave Singapore. Why should we do that? He recognises that foreign law firms in Singapore will pay more, will give better conditions, and it will be more attractive. How do we, at the same breath, then say that all of that should be denied? It is a logical fallacy on his part, I am afraid.

So, the point really is: where does the balance in policy making lie? Do we protect the local law firms in their current structure and deny, if necessary, the opportunities for the younger lawyers, and deny the request of the consumers, in order to preserve the existing benefits? Or do we move in a way that we hope the local law firms are able to compete and, at the same time, open up the choices for the consumers and the younger lawyers? Where the balance lies, as I said, is a question of judgment.

Let me deal with his final point before I deal with whether we are moving with too much haste and speed. Mr Sin Boon Ann, by way of his questions, is making the point that the major law firms contribute significantly to the legal heritage, to the Singapore legal scene and in a variety of ways they have enriched the legal culture in Singapore. I would be the last person who would disagree with that. Mr Sin can hardly expect me to say that is not correct. That is indeed so. But when you deal with these policy issues, I think one has to leave aside emotion and look at it in terms of the benefit to the public in public policy terms – where the benefits to Singapore lie. Do they lie in the continued pre-eminence of Drew and Napier, Allen and Gledhill, Wong Partnership and Rajah and Tann, to name the four largest law firms, and the benefit of the crop of senior partners in those law firms and the attendant benefits that come with a number of large law firms contributing to the legal scene? Or does Singapore's interest really lie in opening up the market and allowing broader competition and allowing a broader choice to our young lawyers and hoping that, one day, both the foreign law firms and Singapore law firms will have a substantial number of Singapore qualified lawyers at management positions and, as a result, create a more vibrant, economic legal market? When that calculation comes through, it cannot be dominated by emotions.

On haste and speed, are we moving with too much haste and too much speed? I do not want to repeat, but I think I have made the point.

It is 10 years since we first started the move. It will be a year since we announced it. Some say we are moving too slowly; some say we are moving too fast. We take the approach that we think it is right, based on the calculation and judgment of a number of

factors which cannot be objectively quantified.

I would like to thank the Minister for his bold vision of what he predicts the landscape in the legal profession will be in 10 to 15 years' time. I think, if I could take one certainty out of that bold vision, it is that there will be further liberalisation and that is my concern. Would the Minister clarify what he deems or predicts will be the further liberalisation in those areas that are excluded in the current form? For example, in litigation, will the litigation Bar, often cited as a very strong and well-qualified Bar, be reduced to mere voice boxes in the Court where QFLPs or JLVs do almost all the preparatory work and the Bar just argues in Court? I asked for this clarification, bearing in mind that, under current law, there is a very high threshold the party must meet in order for that party to have a QC represented in Court. This illustrates that we deem our litigation Bar to be very strong. Will the QFLPs endanger that? May I have the Minister's clarification?

Well, at least the vision is bold. It is far worse if we do not have a vision and we move. So, I think, Members and I are in agreement that we are moving in the right direction or, at least, we have identified the right kind of vision. While there may be disagreements as to whether we will get there with the current process, he understands where we want to go. What is now excluded, would it, in future, be included in the opening up? Sir, in this sort of policy areas, I think it is very wrong for the Government or the Minister to lay down in concrete terms, these are the tramlines which we will not cross. We have identified the current situation, and we say these are the areas that we believe should continue to be

ringfenced. We have, and for good reasons, not said this will be opened up, nor have we said this will not be opened up. I think, really, one must assess it. It is feeling your way through a new situation, you open up those areas where the consumer demand has been the greatest, look at it, and as you work with this new paradigm, our experiences would tell us what further we ought to do or ought not to do. That is the best answer I can give to Mr de Souza. We do not, today, have a policy of saying that these areas will further be opened up, nor have we said these will never be opened up.

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 Shanmugam].

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

Order for Second Reading read.

5.51 pm

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

Sir, we announced during the Budget statement this year our intention to restructure the Skills Development Levy (SDL) as part of our strategy to develop a first-class Continuing Education and Training (CET) system in Singapore so that we will be better positioned for the future. This will broaden the base of SDL and strengthen the support for our workers to upgrade their skills through their working lives and to take advantage

of new job opportunities. This Bill amends the Skills Development Levy (SDL) Act to achieve this.

Proposed change to SDL structure

At present, the SDL is levied on employers for workers earning up to $2,000 a month, at a levy rate of 1% of gross remuneration or $2, whichever is higher. We announced in February this year that effective 1st October 2008, the SDL will be applied to all employees instead. With the broader base, we will reduce the levy rate from 1% to 0.25 % on the first $4,500 of every employee's gross monthly remuneration or $2, whichever is higher.

The SDL was introduced in 1979 to encourage employers to upgrade their low-skilled workers. Levy collections were channelled into the Skills Development Fund (SDF), from which employers could apply for reimbursement of the cost of training. Employers can claim up to 80% of the course fees as well as a portion of the employee's salary when he goes for training. In the case of employees aged 40 and above, holding A-level qualifications or lower, the course fee subsidy is 90%.

The levy rate has been progressively lowered from 4% in 1979 to 1% presently, while the monthly salary ceiling has been raised from $750 in 1979 to $2,000 presently, in tandem with the rising wages and increasing demand for training reimbursements.

Building a CET Scheme for a globally competitive workforce

Sir, the need to invest in our low-skilled workers and upgrade their skills has not changed. In fact, it has become even more important as industries restructure and move up the value chain. At the same time, with economic restructuring, faster skills obsolescence

and shorter job tenures, every worker, regardless of educational or skills level, must continually upgrade and update his skills in order to stay relevant and do his work better. Some may need to acquire new skills to change careers and seize emerging opportunities from the new growth industries. Hence, going forward, our CET system will have to cater to workers of all levels. In the past few years, we have already begun to broaden the scope of our CET system to cover not just the low-skilled workers but also those with higher qualifications.

The Workforce Skills Qualifications (WSQ) framework, a key component of our CET system, offers qualifications from the certificate level all the way up to the diploma level, and even graduate diplomas for certain industries. For example, under the Landscape WSQ, there are certificates in landscape operation for technicians and supervisors as well as diplomas in landscape management for managers. The Singapore Workforce Development Agency (WDA) has also recently introduced scholarships for adult workers to obtain a Masters in Landscape Architecture at the NUS, thus providing opportunities for aspiring landscape architecture professionals who wish to upgrade themselves further. This is what we mean by, in Chinese, "学无止境" (xue wu zhi jing).

Our CET system is also being progressively broadened to cover more industries. So far, WSQ courses are being offered in industries such as retail, tourism, business administration, interactive media, banking and finance, and supply chain management. Employers and workers can look forward to even more CET offerings in growth areas such as aerospace, precision engineering, process manufacturing, logistics, allied healthcare, and community and social services.

Besides addressing the current needs of the economy, we need to also prepare for the future workforce. In 2020, we estimate that nearly 60% of our resident workforce will have at least a diploma qualification, compared to 36% today, and 22% just 10 years ago. Many entrants into the workforce will have degrees. This is already showing up in our statistics. In FY2007, 32% of the training places, supported by SDF, were for employees having at least a diploma qualification, up from just 20% in FY2000. This proportion will grow as more of our workforce become better educated and more highly skilled. It is, therefore, timely to restructure the SDL and ensure that employers contribute to the SDF for all their employees, so that we can have broad-based support for our CET framework and provide training opportunities for all workers.

The CET Masterplan - More opportunities for all

As mentioned in this year's Budget debate, we are on track to building a first-class CET system under the CET Masterplan. Our CET system will be a key institution that sharpens the skills of our workers, undergirds our competitiveness and creates new opportunities for our people to have better careers and better lives. It will cater to all workers from the rank-and-file to professional managers, executives and technicians (or PMETs). The number of training places will be quadrupled from about 60,000 currently to 240,000 in the next few years.

To support the CET Masterplan, the Government have topped up the Lifelong Learning Endowment Fund (LLEF) by another $800 million this year, bringing the LLEF to $3 billion currently. We will continue to invest more, by topping up the LLEF eventually to reach $5 billion. These additional resources for the CET demonstrate Government’s firm commitment to invest in the future of our

workers, our companies and our economy. However, as the Government devotes more resources to CET, it is important that employers also play their part in supporting CET. The SDL institutionalises employers’ commitment to the CET.

Impact of the change in SDL structure and benefits to employers and workers

Sir, the restructuring of the SDL is to position our workforce for the future. These changes will be broadly revenue-neutral. That is why with the restructuring of SDL to cover all workers, we have also lowered the levy rate from 1% to 0.25%. This is a significant cut which we have calibrated so that the total SDL collection will remain approximately the same as under the previous formula.

I urge employers to tap on the SDF to send their workers for CET, so that the workers can improve their skills and productivity, thereby enhancing their employability. This will eventually translate into better overall business performance of the companies.

Sir, the SDL is an important framework that institutionalises the role of employers in CET and embodies the principle of tripartism with the Government, employers and workers each playing their part in the CET. With the changes, the SDL will be repositioned to better support the CET system that we are building - one which will help all workers, regardless of age, skill or education level, to upgrade and seize new opportunities as they progress in their careers.

Sir, I beg to move.

Question proposed.

5.59 pm

Mr Deputy Speaker, Sir, the

amendment to the Skills Development Levy Bill is timely as it complements the various initiatives put in place to expand adult training and education under our 10-year National Masterplan. I believe it will further strengthen the message of how important it is for our workforce to be continually trained, skilled and re-skilled to meet the changes and demands of a continually changing economic landscape.

In terms of dollars and cents, the amendment will particularly benefit small and medium-sized companies while bigger companies, especially those with higher qualified employees with salaries higher than $2,000, will have to shoulder higher levies monthly. However, the amount will not be drastically high as the levy rate has been reduced from 1% to 0.25%, as the Minister has clarified, and is subjected to the first $4,500 of an employee's salary. This signals a shift towards recognising the need for training to cover all levels of working personnel and not just the rank and file. This is critical as our labour productivity rate declined by 0.9% in 2007. This is unhealthy and needs to be arrested as quickly as possible to prevent it from sliding further in the coming years.

So far, a lot of emphasis has been given to lower-income and lower-skilled workers to go for training and skills upgrading programmes. I agree with the Minister that this should continue and, in fact, should continually be emphasised. However, the increasing shift of the economy towards higher-end and value creation activities has also made it necessary for higher paid skilled and educated workers to attend training and retraining programmes. In line with this, I would like to know what plans the Ministry of Manpower has in changing the mindsets of professionals that being better educated and having higher skills do not preclude them from having to regularly upgrade their skills as they too may face the prospect of becoming

irrelevant in the face of a fast changing economy.

While skills training and upgrading clearly contribute to the well-being of both workers and employers, it often also translates to employers, especially the smaller ones, having to make do with less manpower for the period their employees undergo training. It may also lead to higher turnover rates as losing their employee to another competitor in the industry does happen after the employee undergoes training and becomes more qualified. I would like to ask the Minister if specific mechanisms could be put in place to help employers, especially smaller ones, retain their trained staff after the investment they put in to develop their employees. Having such mechanisms will certainly go a long way in uplifting the productivity of the companies and, correspondingly, the nation.

Widening the base of workers needing to go for training may also mean that higher skilled and salaried workers may have even higher expectations than the quality of training programmes. It is imperative that the Ministry and the WDA closely monitor the quality of training programmes conducted by training institutions. Naming and honouring good training providers and blacklisting bad ones could be one way.

Sir, I join the call for the setting up of Lifelong Learning Accounts which are portable in Singapore. These accounts, such as those in the United States, encourage employer-employee contributions and can be used for education and training throughout one's lifetime. The Government then steps in by giving tax incentives to both working individuals and employees who make their contributions to the fund. However, we must not forget that as we broaden the base to encourage higher skilled workers to go for training, it