Hansard, Monday, 12 August 2013

1 Mr Hri Kumar Nair asked the Prime Minister in light of the recent high profile prosecutions against senior civil servants, whether the Government is taking any steps to address the issue of confidence in our public institutions.

2 Mr Zaqy Mohamad asked the Prime Minister how does the Government plan to address public concerns on the integrity and trust placed with our enforcement departments and what measures are taken to ensure adequate oversight over enforcement units.

3 Mr Yee Jenn Jong asked the Prime Minister (a) since the implementation of the internal disclosure policy in the Civil Service in February 2011, how many reports have been received, including those from Organs of State and Statutory Boards; and (b) what percentage of these reports are serious enough to warrant formal investigations.

4 Mr Ang Wei Neng asked the Prime Minister whether the Government keeps track or has plans to keep track of the number of public servants who possess annual entry passes to the two integrated resorts.

Mdm Speaker, may I have your permission to take the first four questions together?

Yes, please.

Thank you. The Government emphasises very strongly the integrity of the Public Service and the public's trust in public officers. We expect public officers to uphold the highest standards of integrity and professionalism. The Government is thus concerned about the recent spate of cases involving public officers. Although the statistics do not show an uptrend, we are concerned that these cases should not undermine public confidence or convey the impression that standards have slackened over time.

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This is why we are prosecuting the cases vigorously.

We have systems and processes to maintain the integrity of the Public Service. These include robust financial procedures, personnel-related measures, strong enforcement and inculcating sound values. These measures are regularly reviewed and strengthened where needed to address weaknesses or adapt to new circumstances. For example, we are reviewing our financial and audit processes, not just for the officers directly handling money and procurement, but also supervisors and managers who must give command emphasis to proper financial management in their units.

As I informed this House in February 2012, all Government agencies are required to have in place sound accounting practices and internal controls to ensure the integrity of their financial systems. Members have filed a number of questions on audit which the Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam will address later in this session.

We also have checks and safeguards on the suitability of officers. All public officers are required to declare their financial standing when they are first appointed to the Service, and every year thereafter. The purpose is for the Public Service to know whether an officer may become vulnerable due to financial embarrassment. The Service can then assist the officer to overcome his financial difficulties, and thereby protect both the Service and the officer.

Mr Zaqy Mohamad asked about oversight of enforcement units. We have instituted additional measures for enforcement officers and units because they do have a special responsibility to uphold the integrity of the system. For example, the Singapore Police Force (SPF) and the Central Narcotics Bureau (CNB) conduct psychometric testing when they recruit officers. All potential SPF, CNB and Corrupt Practices Investigation Bureau (CPIB) officers also undergo security vetting before their appointments. As a further check, the Police conducts credit bureau screening on all Police officers, and CNB screens officers involved in enforcement and regulatory work. Arising from the recent CPIB case, CPIB has also recently implemented credit bureau screening for its uniformed officers and for civilian officers who handle financial and procurement matters.

Mr Ang Wei Neng asked if the Government has plans to track the number of public officers who possess annual entry passes to the two casinos. The Government currently does not do so. While there is no blanket rule prohibiting public officers from visiting the casinos, agencies have imposed restrictions on officers where there is potential for conflict of interest. For instance, officers

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from the Casino Regulatory Authority are prohibited from visiting the two casinos here, or overseas casinos belonging to the parent companies of these two casinos, except for official duties. Police officers working on law enforcement matters involving the casinos are also prohibited from visiting the casinos, except for official reasons. In addition, Police and CNB officers who are involved with general law enforcement work, as well as CPIB officers, are required to declare their casino visits within seven days of each visit. Other agencies, such as MTI, also require officers working on casino-related issues to declare visits to the casinos.

The Public Service Division (PSD) is studying the application of similar safeguards for officers occupying positions that expose them either to the risk of being suborned and exploited, or to the temptation of misusing their positions to feed, say, a gambling habit.

PSD has also been reviewing the rules and requirements relating to public officers in general visiting casinos, to tighten them. For public officers in general, PSD intends to require those who visit the casinos frequently, or who purchase the annual casino entry levy, to declare these actions. PSD is currently working out the implementation details for these new rules, to strike a balance between strengthening safeguards and imposing too many checks and rules on the system and public officers.

As I informed Members in February 2012, there are several different avenues for public officers to report suspected wrongdoing. An officer can report such cases to his supervisors, or directly to his Permanent Secretary. He may also file a report to the Head of the Civil Service or the Public Service Commission (PSC). Officers may also report to enforcement agencies, such as the Police or CPIB.

Mr Yee Jenn Jong asked about the number of reports made under the Internal Disclosure Framework. Since February 2011, 81 reports of suspected misconduct have been made by public officers. Eighty-six percent, or 70, of these reports led to further investigations. Of these, half, or 35 cases, resulted in some form of disciplinary action. The Government will do more to make all officers, especially new ones, aware of the reporting channels already available to them.

The Public Service does not tolerate wrongdoing and misconduct, and will take firm action in all cases, decisively and transparently. Every case is thoroughly investigated. If need be, a separate agency will conduct the

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investigations to ensure independence and impartiality. For example, in the recent CPIB case, the investigation was carried out by the Commercial Affairs Department of SPF, which then submitted the investigation papers to the Attorney-General's Chambers. In all cases, if investigations reveal wrong-doing, the officer will be charged, regardless of his rank or seniority.

Errant officers who have not broken the law but whose actions are serious enough to constitute misconduct are subject to disciplinary action, either by the Permanent Secretary or PSC. They may be warned, reprimanded, fined or have their increment forfeited, reduced in rank, retired in the public interest or dismissed, depending on the severity of the case.

Madam, strong processes and enforcement must be underpinned by sound values. We expect officers and leaders of the Public Service to uphold the core values of integrity, service and excellence, and to imbue these values in their officers. The core values are also embedded in many processes, such as hiring new officers, training and developing officers, and assessing their performance. For example, an officer's performance and progression are assessed not just based on his intellectual and inter-personal qualities, but also his motivation, commitment and integrity.

All public officers are governed by a Code of Conduct, which sets out key principles expected of public officers. PSD has recently updated the Code of Conduct with guidelines for situations that public officers are likely to encounter in their work. For example, how officers should behave when they deal with suppliers and vendors, and what to do when conflicts of interest could arise. The updated Code will be issued by PSD soon.

Even with the principles, policies and processes in place, we must appoint the right people as Public Service Leaders to ensure that the Public Service is well-led and maintains its integrity. PSC interviews the candidates and exercises its independent judgement in assessing the character and values of these potential public sector leaders, before appointing them to key leadership positions.

The Chairman and members of the PSC are appointed by the President, acting in his discretion, if he concurs with the advice of the Prime Minister. The President also has veto power over the appointment of key officers in the Ministries and Organs of State who may be involved in investigations, prosecutions and the administration of justice, such as the Attorney-General, Auditor-General, Chief Justice and Judges of the Supreme Court,

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Commissioner of Police and the Director of CPIB.

The Director of CPIB, in particular, reports to the Prime Minister. However, if the Prime Minister refuses to give consent to the Director of CPIB to make any inquiries or to carry out investigations into allegations or complaints against any person, the CPIB can still proceed to carry out such inquiries or investigations if the President, acting in his discretion, concurs.

These powers of the President are enshrined in the Constitution. They are important safeguards that this Government, on its own volition, has put in place to maintain the integrity and incorruptibility of the Government and the Public Service.

Our Public Service is internationally recognised as effective and efficient, with zero tolerance for corruption and wrongdoing. This Government is committed to upholding high standards of integrity in our Public Service. This is an endless task that requires continuing effort and commitment of the leadership.

We may have tight processes and systems in place, but there will still be people who try to circumvent them. They may succeed for some time, but sooner or later they will be caught. This is because Singaporeans, including our own public officers, reject corruption. We have prevented corruption from becoming a way of life in Singapore and succeeded in keeping Singapore clean. This differentiates us from many other countries and is a distinctive part of what makes us Singapore.

There are reporting channels for public officers as well as members of the public to report possible wrongdoing. Citizens and public officers will be outraged if they are asked for, or offered, a bribe. The recent court cases demonstrate that the Government will not hesitate to act against any officer who does wrong – no matter how senior he is or what position he holds – even if it causes embarrassment to the Government. We will also continually review our systems and processes and improve them to plug loopholes, address weaknesses or manage new circumstances.

Public officers know that they are held to the highest standards of professionalism and integrity. The vast majority adhere strongly to the Public Service values of integrity, service and excellence as they carry out their duties to serve Singaporeans, every day. I am confident that they will continue to do their best, and in doing so, help to maintain public trust and confidence in the

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Public Service.

Mdm Speaker, supplementary questions, please. I thank the Deputy Prime Minister for his answers. In an organisation as large as the Civil Service, it is inevitable that some officers will, from time to time, be found to have acted inappropriately. The real question, therefore, is one of accountability.

Could the Deputy Prime Minister please clarify under what circumstances the different disciplinary measures he mentioned apply? In particular, there has been mention of public servants being issued letters of warning. What are the consequences of a public servant receiving such a letter of warning? Will this, for example, affect his increment, his bonuses, or his prospects of promotion? And when investigating a public servant's wrong-doing, how far up the command chain does accountability then go?

As I have mentioned, there is a range of punishment and disciplinary actions that are possible. If a public servant is suspected of committing a crime, then that is fully investigated, the papers are referred to the Attorney-General's Chambers and charges will be put out against him, if the Attorney-General so decides. There is a trial in Court and he is subject to the full weight of the law. So, that is in those circumstances.

If, however, there has been no criminal offence but the public officer has still fallen short of what the Service expects of him, either in his supervisory capacity or in adherence to specific rules or the Codes of Conduct in the Public Service, but which does not amount to a criminal offence, then the Public Service will deal with him either departmentally through his Permanent Secretary or, in more serious cases of this type, with PSC. And the whole range is available, including warnings, reprimands and so on. In deciding on what to do, his Permanent Secretary and PSC will take into account all factors, including the severity and culpability of the officer in specific cases and also whether there are any mitigating circumstances, for example, the overall service record of the officer and also what other contributions he may have made, in this particular case. So, those are fully taken into account. And that separates criminal charges versus shortcomings in the officer's performance.

In the case of a person who has been issued with a warning, this enters formally into his record and can have implications on his performance-based pay components, for example, his performance bonuses, his increments, and

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can have an effect on his progression.

I thank the Deputy Prime Minister for the comprehensive reply. It was reported that the recent CPIB Assistant Director who was charged for misappropriation of money and forgery had been involved in heavy gambling. The gambling habit could be the main driving force for him to commit a crime. Would the Deputy Prime Minister reveal how many times had the officer been visiting the Integrated Resorts (IRs) for the past couple of years? When public officers, especially if they are law enforcers, buy annual passes to the IRs, they tend to have a higher tendency to gamble and it is also bad for the image for the law enforcement agencies. So, would the Civil Service consider banning those public officers in the law enforcement agencies from buying the annual entry passes to the IRs?

Mdm Speaker, I am unable to comment on the specifics of the case because the case that the Member referred to is before the courts. But, as I have said earlier in my reply to the main question, what PSD intends to do is this. We already have certain rules in place for enforcement officers, for example, police officers who go to the casinos. Those who are directly involved or who potentially may be directly involved in investigating crimes there are not allowed to. Police officers, in general, have to declare within seven days if they go to the casinos. But PSD is studying the application of further safeguards and, as I said, for public officers in general, PSD intends to require those who visit the casinos frequently or who purchase the annual casino entry levy to declare these actions.

I thank the Deputy Prime Minister for the answers. The Deputy Prime Minister said that there have been 81 reports since February 2011, of which 86% were investigated. I would like to get a sense of how this compares to the total number of cases that were investigated in the same period. What sort of awareness programmes have been put in place to let civil servants know that they can whistle-blow on wrong practices that they see in the Civil Service?

Mdm Speaker, I have outlined in my reply the entire range of reporting processes that civil servants have available to them if they see something that is not right in their department. And that includes reporting to his supervisor, his Permanent Secretary, PSC, the Head of Civil Service, or to the enforcement agencies. By and large, this has worked well. We will make sure that in our introductory courses and in further courses that a civil servant attends, that these reporting channels available are made known to him. And

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this is what we will continue to do.

I do not have a comparison between the 81 cases reported versus all cases because I am not sure what Mr Yee means by all cases, because there can be any number of cases, including cases that are picked up, reported by the public and so on. And I do not have that data fully with me here, because the Public Service receives feedback of all kinds, hundreds of thousands, every year. As for the 81 cases that were reported under the internal disclosure policy since it was announced in February 2011, I can give some sense of what these were. The types of cases reported included things like officers who were engaged in employment outside of their duties without seeking supervisory approval; misuse of staff pass; sexual harassment and assault; falsifying transport claims; inappropriate relationship with subordinates – so a whole range of things.

Mdm Speaker, I want to thank the Deputy Prime Minister for his comprehensive answer. Just to add on to the issue of transparency, because I think most members of the public I speak with always ask this question: who watches the watchman? I also understand, based on the Deputy Prime Minister's reply, most of the reporting chains or whistle-blowing are all within the Civil Service chain. Has the Government considered putting an independent committee or an ombudsman function to oversee the enforcement agencies' officers in their conduct and also the processes and procedures which can improve the way the agencies are run?

I also noted in the Deputy Prime Minister's reply that psychometric testing and credit bureau vetting were done upon recruitment. As many of these officers who have been prosecuted recently have also served for a number of years, are these tests also done on a continuous basis or just upon recruitment?

As I have pointed out in my reply just now, there are a number of oversight channels which are not restricted or limited to within the Civil Service. PSC, for example, is not a Civil Service organisation. It is an independent organisation whose Chairman and Members are appointed with the concurrence of the President. So, it acts independently in terms of appointment, investigations and disciplining of officers. It is quite a separate and independent organisation – an Organ of State – which is provided for under the Constitution for precisely the reasons that Mr Zaqy Mohamad identified.

Apart from that, we also have reporting to organisations which are not within the chain of command of the officer involved, for example, CPIB or the Police, which are not directly involved in the organisation that the person is in.

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The positions of certain specific persons are also protected under the Constitution, and the appointments are also protected, and these include the Judges, the Auditor-General and the Attorney-General. So, these are all independent positions which provide for the kind of independent checks and balances that we are looking for.

Mr Low Thia Khiang.

Madam, the Deputy Prime Minister has not replied to my questions about declarations and vetting.

Declarations and vetting are done on a regular basis. PSD, as I said just now, is looking at them again to see whether we need to tighten up some of these vetting procedures and also whether there are new types of things which we should be looking at, given new circumstances.

Thank you, Madam. A supplementary question. I noted that in this case, the Director of CPIB was replaced. I would like to know why the Director of CPIB was made responsible for this case. Under what circumstances when such corruption cases or whatever cases happen in the Civil Service, and to what extent does the supervisory authority of the officer take responsibility? Under what circumstances would the head of department or head of agency be dealt with?

Mdm Speaker, as explained earlier, each case is unique, and each case has to be considered in the light of the facts and the actions of the individuals, including the supervisors and the heads of the different agencies. In the case of CPIB, the Independent Review Panel found that processes in CPIB had been circumvented, resulting in a loss of funds from 2008. And in 2011, the Director, Mr Tan, introduced new tightened processes which would have uncovered and stopped the losses. However, the tightening was not implemented well, allowing the processes to be circumvented and the continued loss of funds. So, the previous and current Directors of CPIB have been formally warned for weaknesses in CPIB's internal processes. This is the substance of what has happened. Both Directors had supervisory and command responsibilities over the particular unit in CPIB. Both Directors have been issued formal letters of warning for their lapses and have accepted responsibility for them.

The Ministry will consider all relevant factors and, in the case of the two Directors, the Prime Minister's Office considered the supervisory lapses of the

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two Directors and also took into account their past contributions as well as their performance in other aspects of their duties in CPIB, in deciding to issue the warning letters.

5 Assoc Prof Fatimah Lateef asked the Deputy Prime Minister and Minister for Finance following the latest findings by the Auditor-General's Office, what are the strategies that will be implemented to strengthen procurement practices and procedures in Government agencies and Ministries.

6 Ms Tan Su Shan asked the Deputy Prime Minister and Minister for Finance in light of the Auditor-General's Report for FY2012/2013 which showed lapses in procurement processes and oversight of external consultants (a) what remedial action is being taken by these Ministries and Statutory Boards to address the weaknesses; and (b) what are the enhanced controls that are being implemented to ensure that such lapses do not happen again.

7 Mr Gerald Giam Yean Song asked the Deputy Prime Minister and Minister for Finance (a) whether the Auditor-General, on discovery of instances of non-compliance by public sector entities with Government procurement rules and principles, carries out independent investigations in all such instances to determine if any gratification has been paid or received corruptly by the transacting entities; (b) if so, what is the scope of these investigations; and (c) if not, how does the Auditor-General satisfy himself that there is no corrupt gratification involved that necessitates a referral to the CPIB for further investigation.

8 Assoc Prof Tan Kheng Boon Eugene asked the Deputy Prime Minister and Minister for Finance (a) what are the processes and measures put in place to ensure effective follow up on the findings of irregularities and weaknesses indicated in the Report of the Auditor-General for FY2012/2013; (b) how many public officers have been disciplined in the past five years for lapses in proper accounting, management and use of public funds and resources, and non-compliance with the relevant laws and Government Instruction Manual; and (c) how often are Ministries and Statutory Boards audited by the Auditor-General's Office and whether the frequency can be increased.

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9 Mr Pritam Singh asked the Deputy Prime Minister and Minister for Finance in view of the Auditor-General's remarks in the FY2012/2013 Auditor-General's Report that procurement has continued to be an area prone to lapses for the last six years and that annual audits are conducted on a test-check basis and do not reveal all irregularities and weaknesses, whether the Government will immediately direct a thorough one-off audit of all Ministries and Statutory Boards with specific emphasis on procurement-related transactions.

10 Mr Zaqy Mohamad asked the Deputy Prime Minister and Minister for Finance (a) whether the recent procurement lapses have led to increased time required to (i) approve projects within the public sector and (ii) award tenders and contracts to vendors; (b) whether time between the publication of tenders to the time of award has increased in the past year as compared to the previous years and, if so, what are the types and values of these projects; and (c) whether the Ministry has sought feedback from vendors on any added changes or procedures imposed on them due to the tightening of Government's procurement process.

11 Mr Teo Siong Seng asked the Deputy Prime Minister and Minister for Finance whether the latest Report of the Auditor-General which highlights the need for public sector agencies to step up on monitoring of contractors' performance will further increase the compliance costs of private sector companies bidding for public sector contracts.

Mdm Speaker, may I have your permission to take Question Nos 5 to 11 together, please?

Yes, please.

Members are rightly concerned about the lapses highlighted in this year's Report of the Auditor-General (the AGO Report). As Deputy Prime Minister Teo as Minister in charge of the Civil Service has just stated, the Government is determined to uphold the highest standards of integrity and professionalism in the Public Service. This resolve certainly applies to the question of public sector procurements.

Before I get into the specific improvements being made, I want to emphasise that the system of checks and balances in procurement operates as a whole. It is not just about rules to ensure fair competition and value for money in public tenders, but also regular audits to detect lapses, and where

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appropriate, disciplinary actions against those responsible, including supervisors. And where there is any suggestion of corruption or fraud, it is investigated promptly and thoroughly, and the officer faces the full measure of the law, regardless of who he is.

So, it is a whole system, and it is working, which is why Singapore is widely recognised internationally as having one of the cleanest and most efficient systems of government anywhere. Nevertheless, we take each finding of a procurement lapse seriously and take action to minimise recurrence.

Our rules and procedures for procurement are comparable with those in most other reputable jurisdictions, and in line with World Trade Organization standards on open and fair competition.

We review the rules regularly, and especially when we observe weaknesses. Members may recall that in 2010 and 2011, we took major steps to reduce opportunities for procurement fraud. In 2012, we introduced further checks to ensure that single bids offered competitive terms. We also extended the minimum opening period for suppliers to submit bids for quotations from four to seven working days. These are examples of how we review the rules when we see weaknesses and, where it is necessary to tighten, we tighten up.

This year, the AGO Report highlighted that a Statutory Board had procured a service from a related party in a manner that did not comply with our rules. The procurement rules require that any bid by a related party be treated on a strictly arms-length basis, and that a successful bid has to comply with the tender specifications regardless of ownership. The rules are clear. We are nevertheless reviewing if there is a need to further tighten approval processes for transactions involving related parties.

The procurement lapses cited in this year's AGO Report are, in fact, all due to non-compliance with established rules, rather than gaps in the rules. It should also be noted that the majority of the findings concern lapses committed before 2012. This partly reflects AGO's recent focus on Government procurement in its audits, which have included looking at procurements in previous years. Government agencies have since last year made special efforts to improve procurement processes. MOF has also strengthened training programmes for procurement, and developed and disseminated checklists to guide supervisors and officers on what to look out for at the various stages of the procurement process.

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We are doing more to build up capabilities, to help officers and supervisors implement the rules well. That includes having the skills and knowledge to seek value for money, and not just accept the cheapest tender bid. As Minister of State Josephine Teo mentioned during this year's Committee of Supply debate, we are developing a Procurement Specialist Track to build up a strong pool of officers with the skills needed, and with good career progression pathways. The new specialist track will be launched next year. Details will be announced in March.

However, in a system with 80,000 procurements each year, we cannot realistically expect to eliminate all lapses or human error. To seek to do so would be too costly and time-consuming, not just to Government but also to businesses and the public. Our approach, therefore, is to make every reasonable effort to minimise lapses, while undertaking regular audits to check for any that do occur and keeping open channels for suspected irregularities to be reported. Where any lapse is detected, we take actions to minimise recurrence.

MOF has required all Government agencies to ensure that they have an effective system of internal audit and control.

It is crucial that the top management sets the right tone. MOF has reminded the Permanent Secretaries and other Heads of Government agencies to maintain active oversight of Internal Audit. They will also henceforth be required to report to MOF with an assessment of findings on procurement audits and follow-up actions in their agencies each year, as well as pre-emptive plans to avoid future weaknesses. This is a new reporting system which the Permanent Secretaries and Heads of agencies will have to comply with. This would include follow-up actions on audit observations by both their internal auditors and the Auditor-General.

We will also keep up with the latest knowledge and techniques in supervision and audit of procurement, including good practices developed in the private sector. MOF will be making available additional analytical tools to help both auditors and senior management of the various agencies review procurement activities more effectively.

Let me turn next to the external audit of our agencies by the Auditor-General's Office (AGO). AGO conducts annual checks of Ministries with regard to financial statements, as well as internal controls and processes that directly impact on the financial statements. On a less regular basis, AGO also selectively audits other aspects of internal controls in the Ministries, either based on its

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assessment of risks or arising from public feedback. The Statutory Boards are audited annually by private external auditors. In addition, AGO conducts audits of internal controls of nearly all statutory boards at least once every five years.

AGO's resources have been significantly enhanced – its manpower has grown by over 50% over the last five years to about 180 staff currently. AGO has also, as I mentioned earlier, focused particularly on procurement issues in recent years. Every finding by the Auditor-General of a procurement lapse is taken very seriously within Government. It leads to improvements in procurement processes, and an awareness not just in the agency concerned but other agencies of the need to avoid the same problems.

AGO's audits are for practical reasons conducted on a test-check basis. AGO cannot realistically cover all aspects of procurement in all agencies. However, from time to time, the Government does conduct thorough, one-off reviews of specific aspects of procurement across the public sector. For example, before we tightened our procedures in 2012 for handling single bids, we reviewed the procurement transaction data for the entire public sector.

Let me go on to disciplinary actions, which some Members asked about. The cases highlighted in the latest AGO report for fiscal year 2012/2013 were administrative or procedural lapses. There was no evidence of fraud or corrupt intent. That is, in fact, the case with most procurement-related lapses – they are either due to a lack of knowledge, carelessness or poor supervision. But that does not mean that officers are not responsible for their lapses. Agencies will still assess their officers' roles in each of the lapses and take follow-up actions.

In the last two years, 60 officers and supervisors have been counselled, reprimanded or issued warning letters, depending on the severity of the lapse. Where warranted, officers were penalised in their performance bonuses or increments.

There have been cases in previous years where AGO has basis to suspect corrupt or fraudulent intent. It refers all such cases to the Commercial Affairs Department (CAD) or CPIB for further investigation.

Mr Zaqy Mohamad and Mr Teo Siong Seng have asked about the impact of our tightening measures in recent years on procurement efficiency and vendors.

Our main aim is to improve compliance, build capabilities and strengthen audit. These do not impact vendors directly. A number of the rules that were

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refined can, in fact, improve procurement efficiency and benefit vendors. For example, since we introduced new rules last year on single bids, and extended the minimum quotation period from four working days to seven days, the percentage of quotations receiving single bids has decreased to about 4% in 2013 to date, from 15% in 2012.

Mr Zaqy and Mr Teo's questions, however, relate to a broader point. We should not burden Government procurement with ever-increasing rules and procedures. Doing so would slow down the Government's functions and its responses to needs, and often impose higher costs. It can also deter some businesses from participating in Government tenders.

We should keep instead to a sensible balance of rules, audit and enforcement actions, so as to minimise risk of wrong-doing without hindering the vast majority of legitimate procurements, or causing civil servants to become risk-averse and bureaucratic in handling procurements.

We have been taking steps in recent years, Mdm, Speaker, to strengthen the procurement system. However, the public sector's procurement needs will grow and become more diverse in the years to come. We are placing greater emphasis, therefore, on supervision and top-level oversight, by requiring the Heads of Government agencies to assess and report to MOF on follow-up actions where problems are found, and on their pre-emptive plans. MOF itself will monitor the timeliness and effectiveness of these actions, and review further practical ways in which we can preserve the well-functioning of Government procurement.

Madam, I thank the Deputy Prime Minister and Minister for Finance for his comprehensive reply. There were two questions in my Parliamentary Question (PQ) that were not answered: one, whether the amount of time taken to approve papers has increased since these measures were taken; and, two, the time to award tenders, whether it has also increased over the last year since the new measures were put in place. For the public to also better understand the evaluation criteria for each tender, would the Ministry also consider letting the public know the evaluation criteria and tender process for each tender outgoing, such that there is better understanding of how these are going to be evaluated, so that there is less misunderstanding about where there should be lapses and so forth?

There has been some trend for the evaluation periods to go up. I do not think this is a bad thing. On average, the

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evaluation period over the last five years has increased from about two weeks previously – the start of the five-year period – to about three to four weeks currently.

This is not simply because of greater caution. It is also because of the change in the nature of public sector tenders. More tenders are now being specified in terms of outcomes. In other words, rather than specifying things upfront in terms of what the contractors should not do in terms of the technique or the process, you specify an outcome. And you get bids that then provide for different routes of achieving that outcome, sometimes even from the same bidder providing a range of alternatives. This requires more time to evaluate. It is less straightforward than it used to be.

So, four weeks are, to my mind, not excessive, and, indeed, for the large public sector infrastructure projects, it is more than four weeks. I do not think we are in a situation where we have gone past the tipping point and we are now being inefficient because of excessive caution.

Madam, I have three supplementary questions for the Deputy Prime Minister. Firstly, of the many procurement lapses discovered by the Auditor-General in this year's report, were there indications of gratification being paid, given or received by public servants in any of them? Secondly, does the AGO presume that any procurement lapses may involve gratification and, therefore, conducts specific investigations to discover that? Thirdly, if gratification is found to be involved, does the AGO presume that there may be corruption involved, unless the contrary is proven, in accordance with section 8 of the Prevention of Corruption Act?

First, with regard to this year's procurement lapses, there was no basis to suspect gratification. There was certainly no evidence of it; no basis to suspect fraudulent or corrupt intent. Where there is any evidence of gratification, then by definition and presumption, there is corruption. In fact, in some of the cases in the last five years – not this year's report but previous years' – there was reason to suspect that there might be some fraudulent or corrupt intent. In those instances, AGO refers the cases to either CAD or CPIB. That, in fact, is being done.

While I am assured that most of the lapses were due to non-compliance with the rules, the question is: what can the Government do to ensure that there could be

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better compliance? Year in, year out, we get the same sort of issues arising. There is this public concern out there. I would like to ask the Deputy Prime Minister what the Government intends to do to ensure that rules are complied with. Is it because there is a lack of training, an ignorance of the rules, weak enforcement or that the penalties are too light?

This is the usual question that, indeed, is one that we are addressing. We do it each year but we are looking at this very seriously internally.

First, capabilities need to be built up, up and down the procurement chain; not just the officer who is responsible for administering the tender, but the supervisors and top management. So, we are doing two things. First, we are taking significant steps to build up capability, through training in general, and, indeed, there are some agencies, such as MDA, that are requiring all their Division 1 officers to go for procurement training even if they are not directly involved in procurement. That is one aspect.

Secondly, it is important that we have the Procurement Specialist track. It does not mean that everyone doing procurement has to be on the Procurement Specialist track because there is some merit in officers rotating in and out of procurement within an organisation. But you do need a core of people who take pride in being procurement specialists and have a career progression pathway, culminating in being a Chief Procurement Officer within the Government. It is important to build up that core, just as we have done for certain other services.

Thirdly, however, we are placing emphasis on top management responsibility – setting the tone within each agency, as well as overseeing internal audit. The external auditor is not the fulcrum. At the end of the day, supervision within an organisation, the tone that they set and internal audit are critical to a well-functioning procurement system; and we are taking further steps in that regard.

I am heartened to hear about the increased training and the emphasis on procurement standards being lifted. My question is around the use of technology and analytics to surface these issues before they become an issue. Has the Deputy Prime Minister looked at how technology or data analysis can be used to surface these control lapses before they become a control lapse?

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Absolutely. There is an important set of techniques that has been developed, particularly when it comes to larger organisations or common procurements across many organisations and we are making greater use of IT. We are providing these additional tools to our agencies. Some of our agencies, for instance, within the defence establishment, already use these tools quite effectively. It is becoming a bit of a science in the private sector and we are keeping close track of that and trying to make sure that we are never far behind.

Mrs Lina Chiam, last question.

Madam, I thank the Minister for being so patient to answer the questions. My question is directed to the Minister for Finance. What is the role of the auditors? I believe the role of the auditors involves the purchase order, delivery order and the invoice – I believe there should be an auditors' report every year. How come there is no auditors' report? And may I know the names of the auditors?

Well, first, can I just clarify whether Mrs Chiam is talking about internal audit or external audit or are you referring generally to both?

Both.

Okay. First, audit as a norm, not just in our public sector but the private sector and indeed internationally amongst the public sectors, is performed on a test-check basis. Otherwise, if you were to scrutinise every transaction, then audit becomes part of the approval process in the first instance. So, audit is done on a test-check basis, based on where risks are thought to be higher. It is a risk-focused exercise. Not everything needs to be checked every year, or even across a period of years, but focus on where the risks are likely to be.

Occasionally, we would do this very thoroughly and on a very resource-intensive basis. For instance, in 2009, we did a thorough health check of IT. There were some problems we observed and we did a thorough health check of IT in the Government sector. I will tell you how long it took – two to three years – just for audit of IT processes; a very resource-intensive exercise. So, it is not something that you do often.

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The system rests, ultimately, not on waiting for audit, let alone enforcement actions. It rests on having, first, sensible rules not overdone but, very importantly, honest and diligent officers and supervisors with the tone being set at the top.

Ms Sylvia Lim, please keep your question short.

Thank you, Madam. Madam, I have supplementary questions concerning the scope of the Auditor-General's audit. Earlier, the Deputy Prime Minister mentioned that the AGO's capabilities had been beefed up and there have been more staff, but I understand that their audit is limited by the Audit Act, which sets out the nature of the audit that the AGO conducts.

I have done a comparison, for example, with the Malaysian Audit Act. It appears that, in Malaysia, the AGO there has wider powers in terms of the nature of their audit. For example, the AGO can look into whether public properties have been properly disposed, whether there has been waste and extravagance and so on.

So, my question is, one, whether the Deputy Prime Minister can confirm whether, indeed, the scope of AGO is perhaps narrower than some other governments and, secondly, whether the Government has plans to review the scope of the audit done by AGO.

I am always happy to review this, but, as of now, no Government agency perceives the AGO to have a scope that is too limited. In fact, the AGO is – how do I put it – feared. Agencies take very seriously the coming of the AGO for an audit. When you talk about Government financial statements and internal controls and processes that impact on those statements, they can cover anything. They can cover a very wide area because everything, ultimately, comes down to that dollar.

Interpreted correctly, the current ambit of the AGO allows it to look at virtually all the internal controls and processes because everything at the end of the day does have some implication on Government financial services. I do not want to compare too literally with other countries but I think it stands recognised around the world, Singapore is regarded as having a cleaner and more efficient system of government than many others.

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12 Mr Ang Wei Neng asked the Deputy Prime Minister and Minister for Home Affairs in light of the recent case where a senior prison officer was convicted of causing the death of an inmate by a negligent act (a) whether the deceased's next-of-kin will be compensated and, if so, how will they be compensated; and (b) whether there was a delay in the investigation process given that the senior prison officer was charged in Court almost three years after the inmate's death.

13 Mr Gerald Giam Yean Song asked the Deputy Prime Minister and Minister for Home Affairs (a) whether the Singapore Prison Service's restraining methods on inmates pose a continuing risk of fatal or permanent injury; and (b) whether there have been any changes to the restraining methods following the death of an inmate due to positional asphyxia.

14 Mr Pritam Singh asked the Deputy Prime Minister and Minister for Home Affairs regarding the recent case where a senior prison officer is convicted of causing the death of an inmate by a negligent act, why is the Ministry's Committee of Inquiry looking into the circumstances surrounding the inmate's death which occurred in September 2010 only able to submit its report in June 2013.

Mdm Speaker, may I have your permission to take Question Nos 12, 13 and 14 together?

Yes, please.

Madam, all three questions concern the unfortunate death of a prison inmate, Dinesh Raman s/o Chinnaiah, who passed away on 27 September 2010 after he was restrained and relocated to a cell, following his unprovoked attack on a prison officer.

Madam, every case of death in prisons is taken seriously. Apart from the Singapore Prison Service's own investigations, the Police conducts independent criminal investigations to establish the circumstances and cause of death; determine whether any criminal offences have been committed; and identify the persons responsible for the incident. The Police's investigation findings and recommendations are then submitted to the Attorney-General's

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Chambers (AGC) to consider whether prosecutorial action is to be taken.

In addition to the Police's criminal investigations, my Ministry will thoroughly review the incident, especially the actions of all parties involved, and the appropriateness of protocols and processes adopted by the Singapore Prison Service (Prison Service). Our aim is to ensure the safety and security of inmates and prison officers, and to maintain the integrity of our prison system of strict discipline and order.

Madam, let me first set out the timeline of events to put the incident and the actions that followed, in perspective.

Prison Service reported Dinesh Raman's death to my Ministry on 27 September 2010, the same day of the incident. Police commenced criminal investigations immediately. Separately, the Prison Service reviewed their processes and procedures for the use of Control and Restraint (C&R) techniques. The prison officers directly involved in the incident were redeployed from operational to staff duties, pending the outcome of investigations. The Police completed its preliminary investigations and referred its findings to the Coroner, who convened a Mention session on 4 November 2010. The Coroner's Mention formally commences a public inquiry into the circumstances of a death.

On 17 August 2012, the Police submitted its consolidated findings to AGC. On 4 February 2013, after reviewing the findings and further clarification with the Police, AGC decided to take prosecutorial action.

On 1 March 2013, the Police informed Minister for Home Affairs that the investigations had been completed. After being briefed by the Police on its findings, the Minister decided to appoint a Committee of Inquiry (COI) to conduct an independent audit of Prisons' broader systems, processes and protocols for bringing violent inmates under control. On 4 June 2013, Minister for Home Affairs accepted the findings and recommendations of the Committee of Inquiry and directed Prison Service to implement them immediately. All the recommendations have since been implemented, or are in the process of being completed.

The charge against a Senior Prisons Officer, who was the direct supervising officer of the incident, was heard in court on 19 July 2013. DSP Lim Kwo Yin pleaded guilty to the charge of Causing Death by a Negligent Act and was fined $10,000.

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Madam, it took 28 months from the commencement of Police investigations to the Attorney General's decision to prosecute. This was due to the complexity of the case. Let me elaborate.

The Police's investigations included a thorough study of the C&R doctrine, training, protocols and techniques used in prison; it entailed meeting external experts, both domestic and international, to seek professional views and an assessment on the C&R techniques deployed; and it involved interviews with 130 witnesses comprising 72 prison inmates, 23 prison officers, eight prison medical staff, seven police officers, two CISCO officers and Dinesh Raman's next-of-kin. In total, the Police conducted 144 interviews. Police investigators also went to the United Kingdom to consult a C&R expert from the National Tactical Response Group, under the UK Ministry of Justice.

In comparison, the recent Shane Todd case, which took 13 months for the State Coroner to reach a verdict, involved 60 witnesses. That case did not involve criminal charges. Another example is the Yishun Triple Murder case of 19 September 2008, which concluded with a conviction four years later on 20 November 2012 and that involved 68 witnesses.

Madam, the prison environment is complex and the risk of security incidents is real and present. Strict discipline and control is essential to maintain a safe and secure environment, for both inmates and prison officers. While the number of violent incidents in our prisons is low when compared with other jurisdictions, they do happen. Last year, there were 61 assaults by inmates, 40 of which were against other inmates and 21 against prison officers. We have zero tolerance for any violence or abuse that could adversely affect order and discipline in our prisons because it is the foundation for the effective rehabilitation of inmates.

To achieve this, our Prison officers are trained in C&R techniques, which involve using both defensive and control methods, to subdue a violent inmate swiftly, safely and decisively. Our Prison Service adopted these team-based C&R techniques from the UK C&R Training Centre in June 1990. They have been adapted to our local prison environment and are in line with international best practices in the UK, US and Hong Kong. C&R techniques follow a fixed procedure that involves teams of prison officers, each with a specific role or task. The procedure enables prison officers to use reasonable force in a controlled manner to restrain and manage violent inmates and to gain quick control over the incident with minimal injuries to all.

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Over the last four years, our prison officers have had to use C&R techniques 331 times to deal with a range of violent incidents. Prior to the case of Dinesh Raman, no prison inmate had ever died or suffered serious injuries as a result of C&R techniques.

The COI assessed that the C&R techniques are safe, useful and appropriate for managing violent inmates, as long as safety precautions are observed. The COI did not find any malice in the actions of the prison officers involved in restraining Dinesh Raman. However, the COI identified specific areas of improvements, given the way the C&R techniques had been used in this incident. For example, the officers involved did not maintain constant communication with Dinesh Raman as required by the Standard Operating Procedure (SOP), in order to monitor his overall condition. The COI also found that officers should have been more conscious of the risk that the C&R technique might cause positional asphyxia and of how to prevent this from happening.

All our prison officers are trained in C&R techniques. In addition, officers directly managing inmates are required to undergo C&R recertification biennially. In response to the COI recommendations, the Prison Service has reviewed its C&R doctrines, instruction manuals and training materials to place greater emphasis on the risk of positional asphyxiation and preventive measures. The Prison Service has also reviewed its recertification requirement to ensure that all supervising officers are covered, including the superintendents of prisons even though they may not need to directly apply C&R techniques themselves.

In addition, the Prison Service has introduced new protocols, such as applying C&R techniques on violent inmates in a standing position where possible, to reduce the risk of positional asphyxia. These new protocols have been adapted from other jurisdictions, such as the UK Prison System and the Hong Kong Correctional Services.

Following the conviction of the senior prison officer on 19 July 2013, MHA has been in touch with the family of Dinesh Raman and their lawyer to discuss the family's concerns, as well as the matter of compensation. AGC has informed the family and its lawyer in writing that the Government accepts liability and will compensate the family. As discussions are ongoing, I am not able to provide details.

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In closing, the COI has found that the Prison Service's overall system and processes for managing violent inmates are appropriate, safe and effective. The COI made recommendations to improve specific aspects of the C&R techniques, which have since been acted upon.

MHA recognises that maintaining order and discipline for the safety and security of inmates and prison officers, is a difficult and challenging task. Nevertheless, we expect prison officers to perform their duties with integrity and professionalism. It is important that the Prison Service has a team of disciplined and well trained officers who obey the law and manage inmates conscientiously according to rules and procedures.

We take a serious view of any professional misconduct, procedural lapses, neglect or excess of duty by prison commanders and officers, and will take firm action against them according to the law and Civil Service disciplinary processes. This is important in order to maintain public confidence in the institutions and also in the people who continue to serve in them.

With the conclusion of the Court case, MHA has initiated disciplinary action against the superintendent, supervisors and other officers involved in the incident.

Mdm Speaker, firstly, my condolences to the family of the deceased. The mainstream media reportage on this episode has been a little bit varied. For example, one netizen helpfully pointed out that TODAY reported that when Prison Officer Lim tapped the inmate's face, his eyes were open. And then, he proceeded to decontaminate him because there was pepper spray on him. The Straits Times reported a little bit differently, saying that Lim and a number of other officers actually carried out this act to wash away the pepper spray. Lianhe Zaobao said that the prison officer took about 30 minutes to check on Dinesh Raman, while the English papers said he did so in one or two minutes. The Business Times does not say anything —

Madam, a point of order. I am not sure what point the Member is trying to make. He is quoting from various newspapers which I do not think is appropriate. I think he should ask the question.

Mr Singh, can you please put your question? It is not relevant to make those statements.

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Yes, I will put my question. In view of the varied reportage on the death of the inmate, would the Minister order the release of the Committee of Inquiry's Report to assuage public concerns on how Dinesh Raman died?

The second supplementary question: when the Coroner's Bill was read for the Second time in Parliament in 2010, one important reason for the enactment of the Bill was to move to a fact-finding regime, which would better serve the public interests. In this case, while the cause of death has been established as positional asphyxia, the circumstances remain unclear, as evidenced by the varied mainstream media reportage on the issue. As such, would the Government consider re-opening the Coroner's inquiry in the name of public interest?

My third supplementary question: the Second Minister mentioned just now that on 4 November 2010, the Police finished preliminary investigations. Can I just enquire what were the findings of the Police's investigations at that point?

The fourth supplementary question: was the deceased ever found guilty of any minor or aggravated prison offence as defined in the Prison's Act, prior to his death on 27 September 2010?

The final supplementary question: have any of the other seven officers been found to have contravened Prison regulations, specifically Part IV, which covers subordinate officers? What actions is the Ministry considering to take against them?

Before I proceed to ask the Minister to respond, I just want to draw Members' attention to Standing Order 21(1) (j), which says "a question shall not be asked as to whether statements in the Press or of private individuals or bodies of persons are accurate". So, I hope that Members will refrain from doing that in the future.

Thank you, Madam. Madam, the Member has posed a series of questions. I will endeavour to respond directly where appropriate. First, I thought I should address the issue of the Coroner's inquiry, since the Member has raised it. The Member is a lawyer so he would be familiar that the Coroner's Act mandates that the Coroner holds an inquiry for all deaths occurring in official custody and they are held in open Court. Where a Coroner's inquiry is discontinued under the Coroner's Act, this would generally be the result of a criminal proceeding having been concluded. In such an instance, the cause of

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death would have been made known to the Court in the course of the proceedings.

At a pre-inquiry review held on 23 July 2013, the State Coroner noted that the cause and circumstances connected to the death of Dinesh Raman had already been established in the criminal Court and that DSP Lim had pleaded guilty. The State Coroner decided that there was no need for him to continue with the Coroner's inquiry. There was no application by any party to discontinue the Coroner's inquiry. The counsel for Dinesh Raman's next-of-kin was present at the pre-inquiry session and did not object to the discontinuance of the inquiry. I would add that it was also not unprecedented or uncommon for a Coroner's inquiry to be discontinued at the State Coroner's discretion after an accused person had pleaded guilty. There are cases that attest to that.

Madam, the Member has asked a series of other questions. On whether the Committee of Inquiry's Report would be released, I need to specify very clearly that the purpose of the Committee of Inquiry as appointed by the Minister of Home Affairs was not to establish criminal guilt or liability. The purpose of the Committee of Inquiry was to audit the Prison system and its processes to ensure that adequate steps have been taken, or to identify what additional steps need to be taken in order to prevent a recurrence of such an incident. That is the substance of the Report. We have already explained what the recommendations were, and as I said in my reply, those actions have been taken up by the Prisons service.

Whether the deceased had any record of incidents in Prison, I do not propose to go into details but it would suffice to say that there were recorded incidents prior to this where the deceased was involved in various forms of violation of Prison rules, and in one case, particularly serious.

On disciplinary proceedings with respect to the other officers, as I have said in my reply, MHA has initiated disciplinary action against all the officers involved pursuant to the outcome in the Court. That process is now running its course.

Mdm Speaker, I thank the Second Minister for the comprehensive reply and assurance that the Prisons department has taken measures to prevent this kind of incidents from happening again. The mother of the deceased is a resident in my constituency. She had seen me a few times in the course of the last couple of years and she said that the communications by the Prisons department to her were not very consistent.

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She said the Prisons department had not been telling her the full story until the recent Court case. I would like to urge the Minister to consider asking the Prisons department to improve the communications process to family members of the deceased so as to lighten the anguish they are facing.

Secondly, I want to urge the Minister to consider giving a fair compensation to the family for the difficulties they have gone through. The mother is also requiring financial help at the moment.

Madam, I thank the Member for raising the concern on behalf of his constituent – the mother of the deceased. On the point of communications, I think it would be fair to say that Prisons and MHA officers, in general, endeavour to maintain appropriate communication with the parties involved. In this case, I think they would have been constrained by the fact that the matter was still under investigation. I am not sure what inconsistencies the mother of the deceased referred to but clearly, Prison officers would have been constrained in what they could talk about with her with respect to the incident. However, I can assure the Member that throughout the process and certainly after the outcome of the Court case, there has been regular and appropriate communication with the family of the deceased and their legal representative in order to address their concerns and also to take up the matter of compensation.

This takes me to the second point on fair compensation. The matter of compensation will be worked out in accordance with the rules that we have, and it would be a matter that would be settled between the next-of-kin and their legal representative, and the Attorney-General's Chambers and MHA.

Mr Gerald Giam.

I have got three supplementary questions. I would also like to extend my condolences to the family of Dinesh Raman. My reason for asking my original question was because I am concerned that even the approved C&R techniques risk fatal or permanent injuries to inmates. So, my first question is: was the restraining technique that caused the death of inmate Dinesh Raman on 27 September 2010 an approved technique? Secondly, has Prisons factored in the possibility that a combination of C&R techniques, even though they may be individually approved, could cause fatalities? Lastly, will the review of the C&R doctrine in Prisons apply to the Police and other security services so as to ensure that there

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is no repetition of such a tragedy, Government-wide?

I want to thank the Member for his questions. Madam, let me first re-state findings of the Committee of Inquiry, for the record. The findings were that the C&R method used in the Prisons is safe, effective and appropriate. The application in this instance may have had certain aspects that were wanting but the overall system and process were found to be appropriate, safe and effective.

Prisons adopted this system, as I said, from the UK system in 1990, and regularly reviews the system according to our own operating environment and also taking reference from any key developments in other jurisdictions. This is no different. In fact, Prisons reviewed it periodically and adapted one of the techniques in 2005 as a result of some changes in international norms, especially in the UK. So, the C&R technique regime applicable at the time of Dinesh Raman's passing was up-to-date, based on Prisons' active review of the processes. Whether a combination of techniques can lead to an unfortunate outcome, well, this is precisely why I emphasised the point. The purpose of the C&R techniques – the protocols in the regime and the very well-defined roles for individual officers – is precisely to ensure that reasonable force is used in a controlled manner in order to bring a situation under control with minimal injuries to all parties. That is the objective. So, we have to understand the context of the prison environment and what its objective is. As I said, also for the record, we have had no incident since these techniques were adopted since 1990 where the death of a prison inmate, or for that matter, serious injuries were attributed to the use of C&R techniques.

Finally, whether the review of C&R techniques can be shared with other agencies, where appropriate, the Home Team has platforms where our departments share areas which are of common interest.

Mr Pritam Singh, do you have something to say?

I refer to the Minister's reply with regard to the Coroners Act and reference to section 39 with regard to causes and circumstances of the death. Once those were established, then section 39 kicked in. That was the clarification provided by the AGC as well. There is a section in the Coroners Act, section 26, I am referring to subsection (3) which states that "Notwithstanding that proceedings at any inquiry might have been concluded by a Coroner, where it appears to the Public Prosecutor that further investigations are necessary, the Public Prosecutor may direct the Coroner to reopen the inquiry and make

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further investigations" and it goes on.

My case is that there is a lot of confusion as to what were the circumstances of the death. The cause has been established: positional asphyxia. That is quite clear. When I was going through those newspaper reports, in the public eye, there is some confusion as to really what happened. While the Committee of Inquiry Report may not reveal what were the circumstances of the death of the inmate, could there be any additional information that the Ministry can provide so that the public is assuaged as to what exactly happened without having to worry about which newspaper report is saying what.

Madam, the Member has again cited a range of reports in the media. I want to emphasise that the process we have undertaken is a rigorous and thorough one. It involved the Police conducting a detailed investigation which I have elaborated upon; after 28 months submitting its findings to AGC which decided to take prosecutorial action. Separately, the Prisons service has undertaken its own review. Another separate process was initiated with the Committee of Inquiry. The Coroner acted in his own discretion according to the law. There was no application to adjourn the hearing and the facts have all been presented in totality. The Member should take reference from the fact that we have endeavoured to run a robust investigation to make sure the facts are clear to the decision-making bodies and for appropriate action to be taken.

Mdm Speaker, I have two supplementary questions for the Minister and they relate to the same issue of doubt. To what extent was there objective corroboration of the extensive eyewitness testimony that was obtained as part of the investigation, for example, by CCTV footage? Secondly, while the cause of death was established as positional asphyxia, was there any other internal injury that could in any way account for the death?

Madam, I thank the Member for his questions. The post-mortem basically established the facts that the injuries were consistent with the application of C&R techniques but did not correlate them in any particular way to the cause of death. As for objective corroboration, clearly the Police did not just rely on the testimony of eyewitnesses which is why there was a review of, on the one hand, protocols and techniques and processes and training methods; on the other hand, the references to external experts and all other sources of information before arriving at a definitive view on the facts, and the charges

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that were recommended.

15 Mr Laurence Lien asked the Prime Minister how concerned is the Government with the rising household debt and whether new measures are being planned to curb imprudent borrowing by households.

16 Mr Yee Jenn Jong asked the Prime Minister (a) what is the average number of housing loans taken up by over-leveraged borrowers with total debt payments at more than 60% of their income; (b) what is the average total housing loan owed by these over-leveraged borrowers; (c) what percentage of total household debt do the housing loans of over-leveraged borrowers make up; and (d) what estimated percentage of these over-leveraged borrowers can be pushed into forced property sales if the mortgage rates were to rise by 3 percentage points.

Mdm Speaker, I am taking these questions on behalf of the Deputy Prime Minister and Chairman of the Monetary Authority of Singapore (MAS). With your permission, I will take Question Nos 15 and 16 together.

Yes, please.

Madam, Singapore's household balance sheets are, on the whole, in good shape. Even excluding the value of property assets, cash and deposits owned by households exceed household debt in aggregate.

Another indication of the health of household balance sheets is the household debt-to-income ratio. This ratio fell in the second half of the last decade and has since risen because of the strong growth of investments in the property market. However, the debt-to-income ratio, estimated at 2.1 times in 2012, still remains significantly lower than in the middle of the last decade when it peaked at 2.6 times.

Overall, therefore, households are currently not more leveraged than they have been in the past decade. The problem instead lies with a segment of

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borrowers. MAS knows from an examination of banks' credit files that some households are likely to have borrowed too much, lulled by an extended period of low interest rates. These are the borrowers that could be vulnerable when interest rates normalise.

There is no precise measure of over-leverage. A rough guide is to look at the debt service burden, or the proportion of one's monthly income that is used for monthly re-payment of all loans, including the interest payments. By this measure, MAS estimates that about 5% to 10% of borrowers have a monthly debt servicing burden greater than 60% of their monthly income. It will be reasonable to consider them as over-leveraged. Housing loans constitute the bulk of their borrowings.

However, while over-leveraging will cause borrowers difficulty, especially when interest rates rise, this does not mean that they will automatically default on their loans. Most of this group of borrowers with debt service burdens of more than 60% of their income, meaning overly leveraged category. Most of these borrowers have above-average income levels. In other words, their incomes are higher than the median household income of $6,000. Majority have also taken up private housing loans and are currently servicing only one housing loan. Therefore, they are likely to have a larger absolute buffer of income and assets.

Nevertheless, we cannot be complacent about household leverage. More borrowers, including those whose debt service burdens are currently below 60% of income, will face some difficulty when interest rates rise. Fundamentally too, we have to prevent a situation where credit supplied at low interest rates drives property prices, taking prices beyond levels that can be sustained by underlying income growth. This is why the Government has taken a series of proactive measures to restrain borrowings for property purchases.

Apart from housing loans, MAS is also dealing with other components of household debt. As Members would be aware, MAS has reintroduced Loan to Value limits and tenure curbs for car loans. MAS has also proposed new rules on unsecured credit and credit cards to help individuals with credit problems avoid further debt. MAS will continue to encourage prudence in both lending and borrowing and help to keep household debt at a manageable level.

Madam, I thank the Minister for his response. The Minister mentioned the household balance sheet at a macro level and that it looks healthy. Given that the numbers at a macro level

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may not reveal what is happening at the micro level, has the Government done more in-depth analysis of individual household balance sheets to ensure that it is not just that households will remain solvent, but that they are also saving enough for contingencies and retirement?

I thank the Member for the clarification. It is an important one because at the aggregate level, as the Member has observed, our household balance sheets are resilient. That is clear from a wide range of indicators. So, as I indicated in my reply, it is a segment of borrowers who have perhaps fallen into the overly leveraged category. But as I also indicated, if you would look more closely at the profile of these borrowers, they are not necessarily in the vulnerable category. The bulk of them have above-average household income levels.

For the bulk of them – it is close to more than 90% – are servicing private property loans, and more than 80% of them are servicing one loan, not multiple loans so they are owner-occupied. For this category of borrowers, while they have exceeded 60% in terms of Total Debt Servicing ratio, they probably have a larger buffer in terms of their household income and assets, and they would be in a lower risk of default. So, overall, I think both at the macro and micro levels, our situation is quite resilient but we should not be complacent, as I have mentioned, and that is why we have introduced measures recently and we will continue to watch the market closely.

Order. End of Question Time.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 17-23, 28-29, 31-36, 40, 43, 46-52, 54, 56-62, 65-69, 73, 75-76, 81-82 and 84-88 on the Order Paper are reproduced in the Appendix. Question Nos 24-27, 30, 37-39, 41-42, 44-45, 53, 55, 63-64, 70-72, 74, 77-80 and 83 have been postponed to the next available sitting of Parliament.]

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[(proc text) Order for Second Reading read. (proc text)]

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

Madam, the Terrorism (Suppression of Financing) Act (TSOFA) was introduced in 2002 to counter terrorism financing in Singapore. It gives effect to the International Convention for the Suppression of the Financing of Terrorism. It also gives effect to the United Nations Security Council Resolution 1373 (2001), which calls on states to work together to prevent and suppress acts of terrorism, including terrorism financing.

Over the past decade, we have stepped up capabilities to counter the terrorist threat and taken swift action against terrorist groups such as the Jemaah Islamiyah (JI) and its members.

Nevertheless, the threat of terrorism continues to be our top security concern.

At the global level, Al Qaeda and its affiliates have exploited the instability in parts of the Middle East and North Africa in the wake of the "Arab Spring", to extend their operations and establish safe havens. Within the region, JI and other groups have remained resilient and continue to regroup and plot attacks.

Since March 2012, Indonesian police have arrested and killed more than 30 terrorist suspects and disrupted several plots against tourists and diplomatic missions. In July this year, Malaysia also indicated that it had identified at least 15 terror operatives who were recruited in Malaysia to fight in faraway conflict zones, including Syria.

Madam, a robust regime to counter terrorism financing is crucial to our fight against the terrorist threat. In addition, given Singapore's status as a major financial centre in the Asia Pacific region, we must protect the integrity of our banking and financial system and prevent it from being abused by persons seeking to fund terrorist activities.

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This requires us to remain vigilant and to have effective measures to identify and cut off the sources of funding that fuel terrorist operations and networks. This amendment Bill seeks to strengthen our counter terrorism financing regime and enhance our ability to combat terrorism.

Cooperation across nations is essential in countering terrorism financing, given that the movement of funds across borders can be conducted with increasing ease. As a member of the Financial Action Task Force (FATF), Singapore is fully committed towards international efforts to counter terrorism financing. The FATF sets standards for how countries should criminalise and act against terrorism financing as well as cooperate to deny terrorists access to funds and other assets.

The amendments proposed in this Bill will further align our counter terrorism financing regime with the FATF standards. Madam, let me now elaborate on the key amendments.

The TSOFA currently makes it an offence to provide or collect property for terrorist acts, provide property and services for terrorist purposes, use or possess property for terrorist purposes, or deal with property of terrorists.

Clause 3 of the Bill increases the financial penalties for terrorism financing offences to enhance the deterrent effect. The maximum fine for these offences will be raised from $100,000 to $500,000 for individuals and $1 million for entities. This will be in line with the maximum fines for money laundering offences under sections 46 and 47 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA. The maximum imprisonment term for terrorism financing offences will remain unchanged at 10 years.

Due to the serious nature of terrorism financing offences, there must be sufficient deterrence against acts that seek to undermine investigations into terrorism financing offences.

Clause 6 of the Bill introduces a new section 10B, which will make it an offence to disclose information that is likely to prejudice an investigation of a terrorism financing offence under the Act.

The proposed tipping-off provision is similar to section 48 of the CDSA which criminalises tipping-off that prejudices investigations in respect of money laundering offences. The penalty of a fine not exceeding $30,000 or

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imprisonment for a term not exceeding three years, or both, takes reference from the CDSA.

Currently, sections 8 to 10 of the Act require persons with information concerning terrorist property, transactions relating to such property, or any terrorism financing offence to disclose the information to the relevant authorities.

Clause 6 of the Bill introduces a new section 10A to protect the identity of informers against disclosure and discovery during legal proceedings. Similar provisions are currently provided for in other legislation, such as the CDSA, Misuse of Drugs Act and Prevention of Corruption Act to protect informers.

Mdm Speaker, even as we strengthen our laws to fight terrorism, we must also find ways to rehabilitate and re-integrate terrorist detainees and former detainees. While the Act prohibits dealing in property including funds of terrorists, section 7 allows MHA to grant exemptions from the prohibition.

Currently, exemptions are granted for transactions relating to basic expenses, in line with the United Nations Security Council Resolution 1452 (2002). Such basic expenses would include payments for foodstuff, rent or mortgage, medicines and medical treatment, taxes, insurance premiums, and public utility charges.

Clause 4 of the Bill refines the exemption provision under section 7 to facilitate the use of funds by terrorists and their families to meet their basic expenditure needs more adequately.

The refinements are in two areas.

First, the Bill broadens the scope of exemption. Currently, section 7 provides for the Minister to make exemptions only for the offence of dealing with property, but not for providing property and services.

This means that even if the Minister has, for example, granted an exemption to allow the purchase of a HDB flat, the bank is prohibited from providing a bank loan to finance the purchase of the flat.

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Under the new section 7, the Minister may make exemptions to permit the provision of property and services, including financial services like loans.

I would like to assure the House that this exemption will only be invoked to cover cases where the provision of such property or financial services would support the subsistence or rehabilitation of a terrorist, as well as the subsistence of his family. The exemptions granted under the new section 7 will not extend to the provision of property and services for terrorist purposes.

Second, the Bill streamlines the process for granting exemptions for transactions relating to basic expenses.

Currently, the Minister makes a separate exemption order for each transaction that is for the purpose of meeting basic expenses. To streamline the process, a general exemption order will be made by the Minister upfront, with the definition of basic expenses stipulated in the order, to automatically exempt transactions undertaken to meet stipulated basic expenses.

The definition of basic expenses would be consistent with that in the United Nations Security Council Resolution 1452 (2002) which allows funds and resources for such expenses to be exempted from financial sanctions.

To maintain control and oversight of these exempted transactions and monitor the use of the proceeds, the new subsection (3) provides for the Minister to require that a person must first obtain a notice of exemption before the general exemption order can apply to him. The notice of exemption may be obtained from the Minister or a public officer authorised by him.

Finally, the Bill makes amendments for the consolidation of identical terrorism financing provisions across different pieces of legislation.

At present, Singapore's legislative regime for countering terrorism financing consists of the TSOFA, as well as the United Nations (Anti-Terrorism Measures) Regulations, and the Monetary Authority of Singapore (Anti-Terrorism Measures) Regulations.

To streamline the legislative framework and increase administrative efficiency, the overlapping terrorism financing provisions in the UN Regulations and MAS Regulations will be consolidated under the TSOFA.

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Mdm Speaker, the terrorist threat continues to be a real one. To prevent a terrorist attack on Singapore, we have adopted a holistic strategy that not only seeks to harden Singapore against attacks through robust security measures, but also emphasises upstream preventive measures.

This includes working with religious and community leaders to educate Singaporeans against extremist ideologies and to rehabilitate and re-integrate terrorists back into society.

The proposed amendments will boost our fight against terrorism by strengthening our counter terrorism financing regime and supporting our terrorist rehabilitation efforts.

Terrorism is an international threat supported by a global network of terrorism financing operations. This requires close international coordination, supported by international bodies, such as the FATF.

The proposed legislative amendments are in line with international practices and FATF standards and will enhance the Government's effectiveness in countering terrorism financing. Mdm Speaker, I beg to move.

Mdm Speaker, this Bill represents Singapore's continuing resolve towards combatting terrorism and to join hands with the rest of the international community to battle this scourge. I, therefore, welcome this Bill. There are, however, a few points that I would like to raise.

First, a point for clarification. Sections 8 and 10 of the Bill make it mandatory for persons with information about transactions relating to terrorist property or acts of terrorism financing to disclose it to the Police. However, the Bill does not protect the identity of informers. As a result, those who may otherwise aid the authorities may be deterred, for fear of reprisal. The Bill addresses this gap by introducing a new section 10A to protect the identity of informers during legal proceedings. However, the protection given to informers is not absolute. Under the proposed section 10A(3)(b), if the Court is satisfied that justice cannot be fully done between the parties without the disclosure of the name of an informer, the court may permit inquiry and require full disclosure concerning

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the informer. This provision, as broadly phrased as it is, creates some uncertainty. Could the Minister clarify what sort of circumstances would justify the disclosure under section 10A(3)(b)? Furthermore, should further safeguards be implemented to ensure that informers are adequately protected? One way this can be done is to require the Minister's approval before disclosure of the informer's identity is allowed.

My second point concerns clause 4, which refines the scope of exemptions the Minister may make in respect of terrorism financing prohibitions under the Act. It is paramount that the exemption provision is drafted as narrowly as possible, so that there is no possibility of funds being channelled towards terrorist activities. In this regard, section 7(1) may be too broadly drafted. It confers upon the Minister the discretion to exempt any person from section 4(b) and section 6, which prohibit the provision of property and services for terrorist purposes and dealing with property of terrorists respectively, so long as the property or services will not be used by or benefit a terrorist entity.

I urge the Minister to consider drafting the provision more narrowly, perhaps by articulating the precise circumstances in which an exception may be granted. On the same note, I would like to clarify how section 7(1) is intended to operate. At the point when the exemption is granted, how will the Minister be able to determine whether or not the property or services will be used by or will benefit a terrorist entity? Can the Minister revoke the exemption, and, if he does, what is the status of acts already carried out when the exemption was in force?

My third point concerns the scope of the exceptions to the new section 10B, which makes tipping-off an offence. Sub-sections 3 to 6 set out a series of exceptions for advocates, solicitors and legal counsel to ensure that advice rendered, or information disclosed for professional purposes and for the purpose of legal proceedings will not constitute tipping-off.

In particular, my concern is that section 10B(5) is too narrowly drafted. This subsection extends the protection granted under sub-section 4 to legal counsel employed by one of a number of corporations related to each other under section 6 of the Companies Act (CA). This mirrors the language in section128A of the Evidence Act in relation to the scope of legal privilege. But that serves a fundamentally different purpose. The fact of the matter is that there are corporate counsel who advise companies or entities within a group of entities which do not fall within this scope. This would also include Limited Liability Partnerships (LLPs) and their related entities which are not granted any

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protection.

In the 2012 parliamentary debate on the amendments to the Evidence Act, I queried why legal privilege was extended to companies and their related corporations, but not to LLPs and their related entities. The Minister for Law's response was that this was a concession to corporate reality; many MNCs operate under a group of related companies, and the CA has a definition of "related corporation", but no similar definition exists in the Limited Liability Partnership Act. The concern was that the extension of legal professional privilege to related legal entities of a limited liability partnership may run the risk of the privilege being abused to hide communications or material that ought to be disclosed. While this is a legitimate concern, the same rationale does not apply in the present context. Sub-section 5 is an exception to the offence and should be drafted in a wider manner.

In fact, sub-section 5 stands in sharp contrast to the wider exception under sub-section 6. Under sub-section 6, an exception is granted for legal counsel employed by a public agency who renders legal advice to other public agencies as part of his duties of employment, provided that the conditions in sub-section 4 are fulfilled.

The exception under section 10B(5) should, therefore, apply to any legal counsel who provides advice to any entity in the group of companies, provided it is within his job scope to do so. As the legal counsel would still have to fulfill the conditions of sub-section 4, there are adequate safeguards in place to ensure that the provision is not abused. With that, Madam, I support the Bill.

Thank you, Mdm Speaker, for allowing me to speak on the Bill. Many Singaporeans may not remember the collapse of the Bank of Credit and Commerce (BCCI) in 1991. Even professionals in the financial sector and, perhaps, practitioners in the legal and compliance functions of today, may not recall the incident. England's Master of the Rolls, Lord Justice Sir Thomas Bingham, said, and I quote, "I would like to pay a tribute to the Monetary Authority of Singapore for excluding BCCI. Singapore was one of the intelligent countries that did so. That was a shrewd and sound judgement."

As a small country, I am proud to say that we have continually done the right thing, notwithstanding the storm of criticisms levelled at us. In the BCCI

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saga, Singapore was proven right in denying the BCCI the licence to operate in Singapore. More than 60 countries did not and, among those, many were major financial centres.

This prudence and, more so, the calibrated responses that characterise this Government, continues to this day. I would imagine that had we not exercised what Sir Bingham referred to as "shrewd and sound judgement", our financial sector development would not have emerged, progressed and developed into what it is today.

Mdm Speaker, we may have done the right thing in the past and done well by it. It is, however, worth reminding ourselves time and again to be on our guard. The security environment, hyper developments in financial products and the industry, the breakneck speed in innovations in communications, the Internet and computer technology, as well as the interplay of all these factors in transnational crime, are constantly evolving. Governments are worried about these issues. The situation confronting us is much more complex than in 1991 and more so since 11 September 2001. Terrorism and its financing are a clear and present danger.

Singapore is an attractive target for terrorists. Our readiness and resolve in making ourselves a hard target are clear to all. Our anti-terrorism resolve comprises two components. Firstly, we have physical defences, augmented by investments in hardware and software. Secondly, we have the support of a citizenry that knows only too well the vulnerabilities that a small multicultural, multi-religious nation like ours faces. This Bill reflects our readiness and resolve to fight terrorism by suppressing financing for its activities. This also marks our commitment to counter and fight transnational crimes as the Bill will give effect to the United Nations Security Council Resolution 1373 for states to cooperate and prevent and suppress acts of terrorism, including terrorism financing.

We are a major financial centre by many definitions. The financial industry is one of the crucial engines of Singapore's survival. The MAS (Anti-Terrorism Measures) Regulations are clear on how banks and practitioners in the financial industry must act. In this regard, as a banker, I can attest to the strict standards and regulatory requirements placed upon financial institutions, their employees and the users of the services of these institutions. There is no quarter given when it comes to not meeting standards. For example, "tipping-off", in the context of money laundering and/or terrorism financing, is covered in the Act. I applaud the consolidation of some overlapping provisions relating to terrorism financing under the Bill. This is consistent with the Government's bi-focus on the financial regulatory system and the criminal justice system. I believe this is

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also in the spirit of the FATF's 40 recommendations and the nine special recommendations.

Mdm Speaker, the banking industry has been working hard alongside the regulators to erect, enhance, update and strengthen our defences against such crimes covered in both the MAS (Anti-Terrorism Measures) Regulations, the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act and those covered in the TSOFA Bill. The practices of Enhanced Due Diligence, Transaction Trend Monitoring and Suspicious Transactions Reporting will shore up our fight against terrorism financing by our financial institutions. In keeping with our ambitions to be a pre-eminent financial centre, the raft of regulatory changes to address such crimes must persist.

To better meet our international obligations and keep pace with evolving international standards on anti-money laundering and countering financing of terrorism, the regulators have not shied away from doing the necessary. The amendment being proposed in this House, to increase the maximum fine for both individuals and entities, sends a clear signal to all of the serious nature of such acts. The inclusion of "tipping-off" as an offence into the Bill will ensure that all persons or corporations, not only financial sector persons, must be mindful of the consequences of their actions.

I believe that the provision to protect their identity is also an incentive for informers to step forward. This will enhance the effectiveness of prosecuting those associated with such crimes. I am happy to note that while one of the recommendations of the FATF-40 is for countries to adopt the measures set forth in the Vienna and Palermo Conventions, the refinements to the exemption provision in the amendment provides the calibrated approach that I talked about in my opening remarks.

Mdm Speaker, finally, I would like to suggest that the authorities and, perhaps, even the media, educate more of our citizenry on the changes made to this Bill and, for that matter, the significance of the Act. Just as I am an advocate for more of our citizenry being our eyes and ears to suspicious items or situations in our daily lives, we can educate more people on the genesis of the Act. This education is particularly useful as naïve individuals could be used as "mules" in money laundering that potentially may be part of a larger web for terrorism financing. Mdm Speaker, I support the Bill.

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Mdm Speaker, I rise and support the Bill which will update and better coordinate our efforts to tackle terrorist financing. However, I have some queries on the comprehensiveness and effectiveness of the framework which I shall elaborate on later in my speech.

The 9/11 attacks by Al Qaeda in the United States in 2001 and the Bali bombings by the Jemaah Islamiyah (JI) in 2002 awakened the world to the ascendency of terrorists around the globe. Governments worldwide mounted massive and coordinated crackdowns. In Singapore and Malaysia, arrests were made of suspected terrorists in 2001 and 2002 which had been a success to the crushing of JI division in Singapore and Malaysia at that time. Al Qaeda has also been abated by counter-terrorism operations by the US and other governments in Pakistan and Afghanistan. In 2002, this House also passed a parent Bill – the Terrorism (Suppression of Financing) Act – as part of a global effort to tackle terrorist financing.

Just as the situation appeared to be somewhat under control, more recent events showed that terrorist groups may go through periods of melee but are capable of regeneration and resurgence which should not be written off. Within the last two weeks, the US government detected chatter among high-level persons from Al Qaeda in the Arabian peninsula talking about a major attack and leading to the closure of several US embassies and consulates in the Middle East. Close to home, sporadic terror attacks in June and July this year had occurred in Sulawesi and Java by persons who are linked to the JI and Al Qaeda.

It is clear that our counter-terrorism efforts must continue and a key component to tackle is financing. Financing enables terrorist groups to survive and thrive and to fund their recruitment, training, operations and even public outreach. The task of suppressing terrorist financing is a challenging one as such individuals or groups solicit and transfer funds from various channels which are difficult to track. Often, groups get financing through fund companies or legitimate welfare or humanitarian organisations. For instance, JI reportedly received funds from abroad via cash couriers, remittance and gold shops, donations, funds companies making purchases for JI's use and collections from Muslims and Muslim charities.

Given that terrorism financing involves multiple, informal and even the fairest channels, are we able to gauge whether the Act has any tangible effect in suppressing terrorist financing in Singapore since it was enacted more than 10 years ago? For instance, how many prosecutions have been carried out since the Act came into force in 2003? Are there other indicators the Government is

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tracking?

The United Nations Security Council has also acknowledged that the existing sanctions on terrorist financing could be strengthened and has indicated that they will try to do so by June 2014. Is Singapore engaged in this review process? Will the Minister be able to tell us what general directions are being studied by the UN?

I now turn to queries on two clauses in the Bill. Clause 2 of the Bill amends the definition of "terrorist" and "terrorist entities". These will now cover all individuals and groups listed by the UN Security Council in the Al Qaeda Taliban sanctions lists as updated from time to time at the UN's official website. The individuals or groups listed are recommended by the UN to be subject to exit visas, travel bans and arms embargoes as set out in the Security Council Resolution 2083 of 2012. The UN framework also builds in a check-and-balance in the office of ombudsmen who will assess requests for individuals or entities on the list to be de-listed.

Given Singapore's past experience of being a target of JI, it is good to note that the JI is on the UN's Al Qaeda list. The links between Al Qaeda and JI are clear and had been cemented by Hambali, a JI elite who is a member of Al Qaeda. Hambali had arranged for Al Qaeda to fund JI and train them in Pakistan and Afghanistan and to school young members of JI families in radicalised madrasahs in Pakistan. Also on the UN list is the JI's younger cousin, Jemaah Ansharut Tauhid (JAT) which was founded in 2008 by one of the core founders of JI, Abu Bakar Bashir. The JAT has been linked to several terrorist attacks in the past two years in Indonesia.

Madam, I have a concern regarding the comprehensiveness of the UN list. In the wake of the JI arrest in 2001 and 2002, MHA put up a White Paper on the JI in 2003. The White Paper carried a chart showing the links between the Al Qaeda and the JI which also implicated two other groups – the Kumpulan Militan Malaysia (KMM) and the Moro Islamic Liberation Front (MILF).

MHA stated then that KMM had hosted 911 Al Qaeda suicide bombers and helped JI procure ammonia nitrate for making explosives. As for the MILF, MHA stated that they had received funding from Al Qaeda, conducted training of Singapore JI detainees in Mindanao and even directed the Singapore detainees to private US establishments for attack. Given the active and significant role of both KMM and MILF at that time, I was surprised that these groups were not specifically listed in the UN Al Qaeda list. Is there a reason for the exclusion?

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Has the risk threat assessment changed or is evidence to prove the linkage with Al Qaeda insufficient? Would the exclusion make the UN list less effective?

Madam, my last query relates to exemptions given by the Minister under section 7 of the Bill. Clause 4 amends section 7 regarding when the Minister can exempt the person in Singapore or any Singapore Citizen outside Singapore from certain prohibitions against transacting in properties and services involving terrorist individuals or entities. The new section 7 will allow the Minister to also exempt the person from section 4(b), that is, the person may be permitted to provide properties and services to an individual terrorist but not for a terrorist entity.

The explanatory note for the Bill states that the supply to an individual terrorist may be allowed if it is not for a terrorist purpose. The rationale for the change was explained as to allow a terrorist and his family funds for basic necessities as required by the humanitarian exception under the UN Security Council Resolution. Earlier, the Minister also mentioned that part of the rationale was rehabilitation. While the rationale is justified, I would like to ask if there are any safeguards to ensure that the funds of other assets are not channelled to terrorist purposes, especially now that there is an auto-exemption regime. For instance, will there be follow-ups to account for how the money is utilised? Despite the queries I have raised, Madam, I support the Bill.

Mdm Speaker, this Bill seeks to ensure that Singapore strengthens its counter-terrorism measures and continues to give effect to the International Convention for the Suppression of the Financing of Terrorism and the United Nations Security Council resolutions, especially Resolution 1373 (2011).

The main focus of the parent Act and the amendment Bill before us is not about outlawing terrorist acts but it is about criminalising financing of terrorist acts, such as the provision of financing and other resources and support to alleged terrorists. Such precursor acts are essential to the terrorism supply chain by which terrorists commit terrorist acts.

Significantly, the principal Act extends the reach of criminal law to precursor acts or acts preparatory to a terrorist attack. It does not target terrorists per se; instead, it is targeted principally at non-perpetrators of terrorist

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acts.

Although this Bill does not substantively change the law, it is worth bearing in mind that the principal Act has a significant reach. It potentially captures actions that do not constitute attempt, conspiracy, or incitement of a terrorist attack. By moving to the margins of this supply chain and to activities that occur before an act of terrorism, the danger that innocent interactions and everyday transactions could fall within the penumbra of this anti-terrorism legislation is not to be simply brushed away. In short, the impact of such precursor offences on individuals and communities can be significant, given that ethnic communities do transfer funds, not through the usual banking channels.

The threat of terrorism remains real. The fact that there has been no successful terrorist attack in Singapore may give rise to a false sense of security. At the same time, there is an almost irresistible, evocative appeal in the label of "terror", "terrorism", and "terrorist". The mere use of any one or all of these T-words brings us into the realm of the extra-criminal world with all the attendant fears, dangers, moral panic and even a crisis.

Nevertheless, as a society, we cannot allow ourselves to be paralysed by the terrorist threat. This is so even as we treat terrorism as an existential threat. The Government has described Singapore as an "iconic target" for terrorists.

The statutes, including this Bill before this House, that provide special powers to the authorities to deal with the scourge of terrorism, must be properly justified. The use of special powers must be strictly constrained by reference to the needs of policing to prevent terrorist activities and for prosecuting terrorism.

However, in fighting terrorism, it is absolutely essential that this operational imperative must be balanced by the critical need to ensure that the values we hold dear are not compromised or undermined by the operational imperative – values, such as rule of law, due process and protection of fundamental freedoms provided for in our Constitution.

Madam, with those broad remarks as the context to my consideration of the Bill, I now turn to specific clauses in the Bill.

Clause 2 broadens the definition of "terrorist" – primarily through a new First Schedule in which membership of or association with specified "terrorist entities" would automatically make a person fall within the definition of a "terrorist" under the Bill. This is regardless of whether the person participates

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in or facilitates the commission of specific acts of terrorism.

The definition issue was debated in this House in August 2002. But a decade on, it is also apt to revisit the definitions, notwithstanding that defining "terrorist" and "terrorism" is fraught with much difficulty. The transnational dimension of terrorism adds to the complexity.

Madam, because there is yet to be an internationally agreed, binding definition of terrorism, could we be bolder and attempt to fill the definitional void? Clause 2 widens the scope of who is a terrorist to include a person merely by just belonging to or being associated with specified terrorist organisations.

I fear that we would lose some of the moral high ground against terrorism with such a broad application. Put another way, it is like the Government saying, "Trust us, although we can't define them specifically, we know a terrorist, a terrorist act, and terrorism when we see one and so need a broad enough definition for us to act against them."

Why should we be concerned? A broad and tautological definition means that the law is more exposed to the increased possibility of abuse by the Executive, wilfully or otherwise, by over-zealous determination to deal with a perceived threat.

To be sure, the prudent and principled use of discretionary powers by the various executive agencies in our various anti-terrorism legislations will go a long way towards maintaining the legitimacy of the various laws on our statute books.

Mdm Speaker, it is impossible to legislate that those upon whom such discretionary powers are vested will exercise such powers with utmost scruples, responsibility and wisdom. But the need to exercise discretion properly is fundamental in any anti-terrorism legislation, with the Judiciary performing the ultimate check and balance role. Our anti-terrorism laws must be cognisant of the need for fettered discretion.

Clause 3 of the Bill seeks to increase the maximum fine for the various terrorism financing offences under the Act. It proceeds on the premise that fines ought to be aligned with the financial penalty for money laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap 65A). However, given the severity of terrorism in terms of its impact on society, should not the fines and the jail term be heavier than for

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less severe offences, such as money laundering, for non-terrorism offences?

Clause 6 seeks to protect from disclosure the identity of any person who gave information to the authorities under the principal Act under a legal duty. Clause 6 also criminalises the disclosure of information which will likely prejudice the various investigations under the Act.

Madam, while I appreciate the necessity of protecting identities and disclosures of information in order not to compromise investigative and enforcement actions, I am concerned with the broad wording of clause 6. Given that the liberty of an accused person is at stake, surely he must be given sufficient information on the allegations against him to enable him to mount a proper defence? But the proposed section 10A provides for a blanket non-disclosure regime which makes it difficult for an accused person to mount a proper defence.

Further, there are no safeguards in place to restrict the operation of clause 6 to situations where it is absolutely necessary on operational grounds. Given that criminal sanctions will be imposed on convicted persons under the Act, the Bill does not specifically provide that it would be an offence for a person, such as a law enforcement officer, to wilfully suppress information to the court, or provide information which he knew or believed to be false. The way clause 6 is drafted presupposes that the state could and would do no wrong.

In addition, clause 6 excludes the possibility that, even in the pursuance of a specific operational objective, executive actions would always operate in a just or reasonable manner. Given the broad powers conferred by clause 6, the potential for abuse is always there.

Madam, I am all for equipping the law enforcement agencies with the requisite powers to keep Singapore safe and secure. However, these special powers must be balanced by the appropriate safeguards.

Although not directly under the purview of the principal Act, I would like to ask the Minister whether other measures would be applied to those individuals who are found to be guilty of supporting terrorism financially. Would such supporters of violent extremist ideology be required to undergo counselling similar to that for alleged terrorists?

Finally, I would also like to ask the Minister whether the Government intends to have a comprehensive anti-terrorism legislation, rather than several

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stand-alone legislations, with the omnibus Internal Security Act as the primary legislative tool.

I say this because I find the foundational premise of this Bill to be somewhat conflicted. The principal Act is a criminal legislation but it is also endowed with special powers that take it beyond the criminal law framework. This makes it difficult for the courts to regulate the proper use of the legislation or for an accused person to have the full protection that the criminal law regime normally provides. For me, the heart of the matter is a definitional one in which terrorism is neither completely within nor outside of our criminal law framework. Madam, despite my reservations, I support the Bill.

Mdm Speaker, thank you for allowing me to speak on this Bill that will help to protect the society and strengthen our security against a serious threat.

Terrorism has today become a real and persistent threat in our society. And although it is not new, as acts of terror have been recorded during previous episodes in history, we can all agree that terrorism has now become more audacious in its attempts, both successful and unsuccessful, as well as more permeating due to the sheer volume of the movement of capital, people, goods and services and information, due to globalisation and the IT revolution.

In Singapore, we have been fortunate that we have not directly felt the brunt of this ugly truth but we should not take this for granted. In combating terrorism, addressing its financing is a critical measure.

Arguably, the objective of terrorism is to strike fear in the hearts of societies. I refer to section 2 of the original Act, where a terrorism act has been defined. Although the use of threat has been listed as an act of terror in sub-section (2), it would be useful to expand this definition to include the act of conceptualising such threats. This ensures that the act of actually planning such threats can also be brought under the law and made liable for prosecution.

As has been seen in the recent examples in Singapore as well, individuals make threats to our society as practical jokes, or to satisfy personal vendettas. If the global trend in this can be relied upon, we may see a higher incidence of such threats made in Singapore, that could not only strike fear in the heart of our society, but also to disrupt the provision of essential services, including the

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Police, armed forces, transportation or medical services, to name a few.

I strongly advocate that the Act include a strong deterrent for such individuals to make such threats, even if done in jest or for fun. We must dissuade such individuals in carrying out such irresponsible actions, and the law is one tool we can use, besides other avenues, including education.

In terms of providing property for terrorist purposes, I wonder if it would also be useful to specify clearly in either section 4 or 5 of the Bill that to house a terrorist, or to have reasonable belief that the person is involved in terrorist-related activities, is also an offence prosecutable under the Act.

Clause 3 of the Bill seeks to increase the maximum fine for various terrorism financing activities as set out under the Act. This is to align the fine amounts with the money laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. I would argue that the money laundering offence to aid a terrorism act could potentially lead to grave consequences – and, in many cases, more detrimental impact than in offences to aid corruption or drug trafficking. Without the risk of suggesting a hierarchy in crimes, I would urge the Minister to consider raising the fine amount for the various terrorism financing activities to be higher than the $500,000 proposed in the Bill, based purely on the potential damage this action could cause.

While I am happy that the Bill provides for protection of the identity of the whistle-blower or informant, I also think that a stronger deterrent must be established to complement the incentive of protection. Sub-sections (1) and (2) of section 8 of the Bill lists someone who has possession, custody or control of any property belonging to any terrorist or terrorist entity; or has information about any transaction or proposed transaction in respect of any property belonging to any terrorist or terrorist entity. Therefore, I propose that any person who contravenes these sub-sections, be made liable to pay a fine higher than the proposed $50,000 currently specified in the Bill.

Similarly, the fine penalty for those who disclose information that may prejudice the investigation should be higher than the $30,000 proposed to act as an effective deterrent.

In conclusion, I would like to emphasise that the threat of terror is a serious one and, so, there is every reason that harsher penalties should be considered to act as strong and effective deterrents. Besides increasing this deterrent, it is

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also important that the Bill be expanded to include the act of threats, conceptualising terror and even housing terror suspects. Thank you, Mdm Speaker, I support the Bill.

Order. I propose to take the break now. I suspend the Sitting and will take the Chair at 4.05 pm.

Sitting accordingly suspended

at 3.45 pm until 4.05 pm.

Sitting resumed at 4.05 pm

[Mdm Speaker in the Chair]

Mdm Speaker, thank you for allowing me to join the debate.

According to counter-terrorism experts, it does not cost much to mount a terrorist attack. But money remains critical to meet the broader organisational costs of developing and maintaining a terrorist organisation and network. Terrorists need money to purchase deadly materials, fund strategic and operational planning, facilitate communications and travel, radicalise others and provide for their families. As such, finding means to raise, launder, transfer, store and gain access to funds remains a top priority for all terrorists groups.

The Achilles heel of terrorism financiers may be found in the choke points critical to laundering and transferring funds. Disrupting fund flows constrict the capabilities of terrorists and frustrate their ability to execute attacks. We need to deny terrorists access to financial tools and restrict their flow of funds, forcing them towards more costly, less efficient and reliable means of financing to the point where they are vulnerable to being picked up by intelligence agencies.

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In fact, financial information has come to be one of the most powerful investigative and intelligence tools available to governments. As money moves through the financial systems, it leaves a verifiable trail enabling investigators to obtain critical information that may indicate illicit activity, identify those responsible, and uncover previously unknown links between terrorist operatives. Financial intelligence has helped to disrupt plots and prevent attacks. For example, the British authorities foiled the Summer 2006 liquid-explosive aviation plot, thanks in large part to critical financial intelligence.

Singapore has been tightening its laws to combat the financing of terrorism and money laundering. The Terrorism (Suppression of Financing) (Amendment) Bill, or TSOFA Bill, contains amendments that are timely and necessary to enhance the effectiveness of Singapore's counter-terrorism financial regime and strengthen Singapore's compliance with international standards set by the Financial Action Task Force (FATF).

Mdm Speaker, I support the amendments proposed in the Bill, including increasing the maximum fine for terrorism financing offences, making tipping–off an offence, and protecting the identity of informers. It is also a good move to consolidate all terrorism financing provisions contained in the various regulations under TSOFA, and to refine the exemptions that the Minister for Home Affairs may make to achieve compliance with the UN Security Council Resolution.

However, Madam, in other jurisdictions, such as Canada, Australia and Hong Kong, terrorist financing is criminalised as a money laundering offence under their overall anti-money laundering (AML) regimes, given the similarities of the methods used in money laundering and terrorist financing to mask financial resources and activities from the scrutiny of state authorities.

However, in Singapore, we have two separate legal regimes: TSOFA under the Combating of Financing of Terrorism (CFT) regime; and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA, for all other money laundering offences.

This structure creates the risk that related laws may become inconsistent over time, as well as create ambiguity about which law to apply. For example, the proposed amendment to increase the maximum fine in TSOFA is made to bring the fine amounts for terrorism financing offences in line with those for money laundering offences under CDSA. Both TSOFA and CDSA contain similar clauses on "Duty to disclose" knowledge or suspicion of a suspicious

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transaction. But the penalty for contravention is a fine of $20,000 with no jail term under section 39 of the CDSA, whereas the penalty for a similar failure to disclose under section 8 of the TSOFA is a fine of $50,000 and/or a maximum five-year jail term.

In many instances, it is not possible for the private sector, such as the Financial Institutions, who file Suspicious Transaction Reports (STRs) to know the underlying cause of the suspicious transactions spotted. Moreover, it is common that terrorists raise funds from a range of criminal activities, from low-level fraud to involvement in serious and organised crime, including drugs and arms trafficking and extortion.

As terrorist and criminal activities are often intertwined, it is often difficult to determine whether the funds raised from these activities are destined for terrorist activities or simply the proceeds of general criminal activity. I would like to ask the Minister if there is an opportunity to simplify the legislative framework for AML and CFT to reduce the possible inconsistencies and to help all participants better understand and comply with the law.

Mdm Speaker, financial institutions (FIs) are regulated and required to implement processes to detect sanctionable transactions and report suspicious transactions. Currently, each bank defines its own AML and STR policies and procedures. The procedures for detecting suspicious transactions are far from being an exact science. The MAS recently revealed that it has imposed financial penalties on 22 FIs and issued 47 warnings and reprimands for weak controls. Such incidents reflect that FIs remain vulnerable to money laundering.

To help FIs become more effective in their efforts to guard against money laundering and terrorism financing, I would like to make the following recommendations for the Government's consideration:

First, rather than depend on each bank to define its own policies and procedures for AML and STR, Singapore should consider prescribing a more consistent approach for a minimum set of standards in the industry. Currently, some banks have stronger policies and processes than others, but a country is only as strong as its weakest link. Whilst I acknowledge that we need to allow FIs to operate a control framework that is commensurate with the size and complexity of their business activities, we must ensure that FIs operate at a minimally acceptable standard. Regulators should also encourage collaborations across FIs to share best practices and insights. Meeting AML and CFT standards should not be a competitive issue and banks should join hands

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to safeguard the overall industry from illicit proceeds.

Second, regulators should provide a feedback mechanism to help FIs approach terrorism-financing related issues, such as STR, in a more targeted way. Many practitioners in the industry complain that the Government does not provide enough guidance about what it is looking for so that FIs can better finetune and calibrate parameters to pick up suspicious transactions. Currently, STR filers are unsure whether they are picking up and reporting the right trends, whether their systems are adequately calibrated, and whether they are better at reporting or not. Many are concerned that they are spending huge amounts of money on compliance that may be focused simply on checking the right boxes, but not the overarching objective of combating the financing of terrorism and money laundering.

The relevant authorities can assist the financial sector in its efforts to identify and prevent terrorist financing by sharing intelligence. FIs' understanding of trends, high-risk areas and persons of interest, will enable them to incorporate these into their procedures and risk models designed to identify terrorist financing. A multi-agency forum, similar to the British's "vetted group", comprising experts from law enforcement agencies and the regulated private sector, should be formed to consider sensitive intelligence on new money laundering risks, such that these can be shared as "industry alerts".

Third, when FIs are able to study an aggregated view of a suspicious client's transactions across banks and multiple jurisdictions, it is much more powerful than monitoring simply the transactions through their own banks in a single location, as this helps the FIs to monitor and "join the dots" on that particular client's overall financial activity, to determine if these transactions are suspicious or not. However, there are currently no such database and the regulatory practices in many jurisdictions restrict the flow of clients' information, even within the same bank, across borders.

Madam, to really win this war against terrorism financing, there need to be platforms to enable high-risk transactions to be monitored and information to be shared across banks and transnationally. After all, FIs already pool credit information through credit bureaus, so similar databases should be considered to monitor suspicious segments.

As the noose tightens in the formal financial sector to launder funds, terrorists will be forced to find alternative means. The physical movement of cash is one way terrorists can move funds without encountering the AML and

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CFT safeguards established in FIs. There is evidence that some groups have converted cash into high-value and hard-to-trace commodities, such as gold and precious stones, to move assets outside of the financial system.

It is common industry knowledge that quite a few foreigners visiting Singapore from overseas often pay for their high-end purchases, such as watches and jewellery, here with armfuls of cash. How such individuals are able to bring or obtain such large amounts of cash in Singapore is worrying. In this day and age, persons with legitimate objectives can easily use cheques or credit cards to purchase high-value items, hence, dispensing with the need for cash-settled transactions.

We must guard against would-be terrorists attempting to utilise such means to "cleanse" their dirty deeds here. How aware are Singapore-based high-end art, wine, jewellers, precious stone and metal dealers and retailers of their AML and CFT obligations? How many STRs are filed in total, of which how many have been reported by non-financial institutions? How many end up being investigated and/or prosecuted?

To address this, I suggest that the Minister consider requiring a risk-based assessment of such vulnerable industries to be conducted and imposing industry-specific cash transaction reporting requirements – such that cash purchases above a threshold of, say, $30,000, need to be reported. I also suggest we step up education for vulnerable industries so that they are aware and effectively trained to fulfil their legal obligations.

I also have a question about the application of Singapore's AML and CFT regulations to transactions that take place within the Singapore Freeport, the free trade zone. While there may be no taxes imposed on both residents and non-residents on transactions that occur within the Freeport, it is crucial that AML and CFT regulations be applied and enforced even within the free trade zone to avoid possible abuse of Singapore territory for illicit purposes. Are there reporting requirements for cash-settled transactions within Freeport that exceed a certain threshold? I read from marketing material that there are "simplified customs procedures to preserve client confidentiality" within Freeport – I hope this convenience has been well balanced against our AML and CFT obligations.

I turn yet to another possible avenue of abuse by terrorists − the non-profit sector. According to FATF, "the misuse of non-profit organisations for the financing of terrorism is coming to be recognised as a crucial weak point in the

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global struggle to stop such funding at its source." Charity groups are especially susceptible to abuse by terrorists and their supporters. They offer a veil of legitimacy for terrorist fundraising, attracting unwitting donors who are unaware that the money they donate for humanitarian purposes actually funds terror. The Government should develop strong oversight mechanisms for charities and NGOs, and guard against the possible infiltration of charities by terrorist operatives.

Madam, with globalisation, the volume of international remittance has more than tripled to US$381 billion in 2011 since 2000, making it even more challenging to detect suspect terrorist financing. Technology allows fund transfers by cell phone, transfer and storage of funds via online means, such as cashU, e-gold, bitcoins, while the Internet facilitates communication and radicalisation, logistical arrangements and funding support from potential donors anywhere in the world.

Madam, Singapore is approaching the continued threat of terrorism from a position of strength. Our strict legal and regulatory framework has enabled Singapore to avoid a proliferation of informal financial systems, including unlicensed money remitters, such as "hawalas", cash and chit type of networks and cash carriers that are common in other parts of the globe. We have rules on stored value cards. We have an enviable network of treaty parties to collaborate with in this global fight against terrorism.

We must continue to deny terrorists the money and means to engage in terrorism. I urge all parties to be cognisant of their critical role in keeping Singapore safe as they join hands with law enforcement and intelligence officers in this ongoing battle. Only by working together can we move the needle in this war against terrorism. Mdm Speaker, I support the Bill.

Mdm Speaker, despite more than a decade of counter-terrorism activity and tighter enforcement cooperation around the world, the recent unprecedented closure of US embassies in the Middle East and Africa, and the shock of the Boston Marathon bombings remind us how alive and real the threat of terror still is. Upstream measures, such as tackling and disrupting the financing and support of potential terrorist activity, remain vital in the fight against terror. I, therefore, support the Bill, which aims to strengthen the legal framework against terrorist financing.

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I just have a few points to make for the Minister's consideration.

The first broad point is on clause 3, which introduces higher penalties via the new section 6A.

Previously, an individual who engages in terrorist financing activities prohibited under sections 3 to 6 of the Terrorism (Suppression of Financing) Act ("the TSOFA") would face, per charge, a maximum 10-year jail term, or a maximum fine of up to $100,000, or both. But, for a corporation, it would only face a fine of up to $100,000, although directors or executive officers complicit in the offence would potentially face an imprisonment term.

Clause 3 raises the maximum fines for individuals to half a million dollars and, for corporations, up to $1 million.

While this enhancement is definitely in the right direction, given that these terrorist financing offences are carried out with the intention or with the knowledge that terrorist acts will be carried out, I would share Mr Dhinakaran's point made earlier, that the maximum penalties are still considered low.

Firstly, the Ministry says that it wishes to bring the penalties in line with the general money laundering offences in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA for short. While there are certainly similarities between both types of offences, my view is that terrorist financing activities are, without doubt, far more serious than general money laundering offences, and should, therefore, be treated as such.

Secondly, I looked at some foreign legislation. In the United States, under Title 18 of the US Code, the maximum penalty for financing terrorism is a jail time of up to 20 years, or double our maximum, or fine, seemingly indeterminate, or both.

Thirdly, given how open Singapore's economy and financial system are, the number of foreign corporations and financial institutions operating here, and the difficulty of detecting terrorist financing activity, given the speed and complexity of the world of finance, I think the maximum penalties against corporate entities are still considered low. Some may well be prepared to run the risk, in light of the gains that may potentially be made dealing with funds of murky origin.

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I, therefore, urge the Minister to further review the overall penalty framework at the next amendment. For instance, let the court determine the amount of fine based on the circumstances, rather than prescribing an artificial ceiling. Or, if a ceiling is preferred, let it be $X or a multiple of the value of the assets involved or profits gained or potentially gained out of such activities, whichever is higher. And let the gains be separately disgorged and confiscated in their entirety, over and above these fines, through quasi-civil action.

I move on to my second broad point, which is this: tough and rigorous laws such as these are important, but what is far more important is the ability of our security forces to detect violations and to prove them evidentially before our courts.

A few sub-questions: firstly, how extensive and rigorous is our sentinel watch over financing activity taking place in Singapore, as well as through Singapore? Apart from the typical financial institutions, such as banks, finance companies and insurance companies, do we also monitor moneylenders, pawnbrokers, remittance agencies, informal and traditional money transfer agents, property agents, and so on? Both Ms Sylvia Lim and Ms Foo Mee Har have earlier described the complex and imaginative ways in which financiers seek to move funds across borders. How confident are we in our financial centres in Singapore that money flowing into Singapore to finance terrorism here or in the region will be caught? Do we impose requirements that these entities conduct checks and screenings and put in place due diligence systems to weed out suspicious transactions?

Secondly, is the Minister able to share with this House how many investigations and convictions have taken place under the TSOFA or similar terrorist financing offences under the United Nations (Anti-Terrorism Measures) Regulations?

Thirdly, how do other countries rate Singapore's ability to tackle this problem of terrorist financing? How have our latest mutual evaluation results been under the FATF framework? Are there any major gaps identified through mutual evaluation that we need to plug in the context of anti-terrorist financing, as well as our compliance with the Special Recommendations?

My third point is about terrorism and the Internet. So many examples of Internet self-radicalisation and Internet-based fermenting of hate abound that policymakers around the world worry over how to effectively tackle this problem. How will we in Singapore handle this? Can we proactively block

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access or make access to such sites that promote terrorist self-radicalisation difficult? And would funding, financing or establishing such websites amount to a violation of TSOFA?

[Deputy Speaker (Mr Seah Kian Peng) in the Chair]

My last point is a more general one. It has been more than a decade since the 2001 New York Twin Towers bombings and the uncovering of the Yishun MRT bomb plot right here in Singapore. Terrorists look for soft targets to achieve maximum dramatic effect, and, like any other city in the world, we have so many of such soft targets. While we continue to actively police and protect such installations, can I ask the Minister the following:

Firstly, how can we continue to exercise the highest levels of diligence and alertness day-after-day when we protect and police civilian areas, such as MRT stations, airports, bus depots, shopping malls and so on? How do we prevent complacency or a false sense of security from setting into our people and our security forces?

Secondly, what is the state and level of Singapore's cooperation and engagement with key law enforcement and anti-terrorism agencies worldwide? As we would all know, we cannot, in Singapore alone, contain the problem of terrorism. It is a global effort.

Finally, how ready and how resilient are we in Singapore in the event of catastrophe? Are our contingency plans ready, comprehensive and fully practised? With that, Sir, I support the Bill.

Mr Deputy Speaker, I stand in support of the Bill. I also stand as someone who has been up close and personal with victims and casualties of acts of terrorism. I was in Afghanistan treating casualties after September 2001. I also managed casualties from the Bali bomb blast and the Jakarta bomb blast, for example. Therefore, understandably, I support the stricter penalties. We, indeed, have to put forth our stand that we mean business and are extremely serious on matters related to terrorism.

Pertaining to the fines and penalties for the terrorism funding offences, can I just clarify the following? What will happen if the funding comes from an

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overseas entity or institution? What will be the processes involved? Do we have any arrangements in ASEAN for cross-border cases? As countries which are a party to the International Convention for the Suppression of the Financing of Terrorism, are there certain courses of action, cooperation, legal assistance or even extradition that we have with other states?

Also, what are the platforms for countries, signatory to the Convention, to share best practices? Do we share some common electronic reporting filing system, collate resources and perform surveillance on suspicious activities related to the subject?

I also feel it is crucial for the Ministry to engage financial entities and institutions with regular and systematic audits and visitations or seminars to help educate and create awareness and, hopefully, deterrence.

Our local policies and MAS' guidelines and audits are certainly steps in the right direction. Reinforcements are certainly necessary, and compliance and proper behaviour in accordance with these are also important to be reinforced at appropriate times. For the community and the public at large, groups, such as the religious rehabilitation group, can certainly help with education.

Also, Sir, how are we preparing and adapting to the use of more cyber techniques and channels in abusing financial institutions, organisations and individuals in terrorism-related offences?

Finally, I would like to bring up a point pertaining to the 2012 Country Reports on terrorism and the comments made on our counter-terrorism cooperation with other countries. It was described as "inconsistent and masked by a transactional mindset". The report also criticised our bilateral and multilateral engagements on counter-terrorism intelligence and law enforcement cooperation. I personally feel this is inaccurate and an unfair view which reflects the lack of depth of understanding of our approach and strategies which focus on mutual trust and respect between nations. In fact, Sir, by debating and passing this Bill today through Parliament for implementation, it is yet another platform to show our alignment, commitment and how we are a party to the global counter-terrorism efforts, from every angle and perspective. With that, once again, I support the Bill.

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Mr Deputy Speaker, first, let me thank all the Members who have spoken, for their considered views on the Bill and also for their general support for the Bill and its policy objectives.

Members have raised a number of points which fall into three broad areas.

The first relates to the importance of international cooperation in combating terrorism financing. The second relates to the need for an effective enforcement regime. Finally, Members have also raised questions on specific provisions in the Bill. I will address these in turn.

Ms Foo Mee Har and Assoc Prof Fatimah Lateef spoke on the need for countries to work closely together to combat terrorism financing. Specifically, Assoc Prof Fatimah asked about the cooperation mechanisms among countries that are parties to the International Convention on the Suppression of Financing of Terrorism. The Terrorism (Suppression of Financing) Act (TSOFA) includes provisions that allow the Convention to serve as a basis for mutual legal assistance under our Mutual Assistance in Criminal Matters Act (MACMA) and for extradition under our Extradition Act. We are, therefore, able to make and accommodate requests for mutual legal assistance and extradition involving other convention parties.

Our law enforcement agencies work closely with their foreign counterparts to share best practices and exchange information to investigate and disrupt any terrorist plot or terrorist financing activity. For example, the Suspicious Transactions Reporting Office (STRO) in the Commercial Affairs Department (CAD) has signed Memoranda of Understanding (MOUs) with its Financial Intelligence Unit counterparts in other countries, such as Hong Kong, Japan, Malaysia, United Kingdom and United States, for the purpose of combating money laundering, terrorism financing and related criminal activities. These MOUs allow Financial Intelligence Units of different countries to share financial intelligence with one another.

Regarding Assoc Prof Fatimah Lateef's question on the processes to deal with funding from an overseas entity, it is an offence under the TSOFA to deal with funds belonging to terrorist or terrorist entities, regardless of where the funds originate, locally or overseas. If the financial institutions detect funds which they know or have reason to believe may be from terrorists or terrorist entities, they are prohibited from dealing in such funds, and are required to make a report to the law enforcement authorities for investigations to be

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conducted.

Sir, the transnational nature of the terrorism threat makes cooperation across countries all the more important. We are fully committed towards working with the global community in the fight against terrorism financing. While Singapore is not directly involved in the review of Al Qaida sanctions by the United Nations Security Council mentioned by Ms Sylvia Lim, we will, as a member of the UN and a major financial centre, review and refine our regime in line with new developments, including any enhancement of sanction measures by the UN Security Council.

Mr Desmond Lee asked how we fared relative to other countries in tackling terrorism financing. Singapore did well at our last Financial Action Task Force (FATF) Mutual Evaluation in 2008. Singapore was rated either Compliant or Largely Compliant for the FATF's Special Recommendations on Terrorist Financing. Our results were on par with those of the United States and United Kingdom. The amendments in this Bill will further strengthen our compliance with the FATF standards.

Let me now turn to the enforcement regime. Domestically, we have also put in place a robust regime against terrorism financing and money laundering. As various Members − Mr Desmond Lee, Assoc Prof Fatimah Lateef and Ms Foo Mee Har − had mentioned, having tough laws alone is not enough. We must be able to detect and enforce against violations, as well as engage key stakeholders in various sectors to raise awareness and strengthen capabilities.

Section 39 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) requires any person to file a Suspicious Transaction Report (STR) if he has reasonable grounds to suspect that any property is linked to criminal conduct, and such suspicion arose in the course of employment or business. This requirement applies to all persons in Singapore, including financial institutions and entities in other sectors. This would also apply to any person working in the Freeport facility in Singapore highlighted by Ms Foo.

Mr Arthur Fong and Ms Foo Mee Har spoke on the important role that our financial institutions play in preventing and detecting suspected terrorism financing activities. We fully agree with a mutually reinforcing approach to fight against the scourge. Besides the filing of STRs, financial institutions are also required by MAS to perform ongoing monitoring of their customers. MAS conducts regular on-site inspection and off-site supervision to ensure

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compliance. Financial institutions which fail to put in place the necessary measures are subject to a range of supervisory actions, including sanctions for serious breaches.

Ms Foo made a point about risk-based approach and being more targeted, and we agree with that, because a one-size-fits-all approach does not work when you talk about risk management and transactions monitoring. Instead, MAS supervises the financial institutions, including money changers and remittance agents, to assess that the robustness of their systems is commensurate with the scale and complexity of their operations, and the risk profiles of their customers. So, it is a calibrated approach and it takes into account the risk. MAS also provides supervisory guidance to financial institutions to rectify any weaknesses, including in their processes for STR filing. Regular outreach is conducted, together with industry partners, to raise awareness. The STRO has been engaging various persons and entities that have filed STRs on an ongoing and regular basis to provide feedback on their STRs. So, this is part of the education process that several Members spoke about.

Besides financial institutions, STRO also works through business associations and regulatory bodies to broaden the reach to businesses and professions from other sectors, such as real estate agents, lawyers, accountants and jewellers. The appropriate relevant regulatory agencies will continue to review and enhance the regulation of these sectors to mitigate the evolving terrorism financing and money laundering risks. But the outreach is an ongoing effort. These efforts have resulted in more suspicious transaction reports being filed by industry players. In 2012, STRO received nearly 18,000 STRs, of which more than 2,000 were filed by non-financial institutions. STRO has also assessed that the quality of these reports has improved over the years. We will continue the outreach efforts to the various sectors to strengthen the STR reporting regime.

Mr Desmond Lee and Ms Sylvia Lim asked about the number of investigations and convictions for terrorism financing offences. We have investigated a number of cases, but there has not been any prosecution thus far. This is because most cases involved terrorists who were self-financed and the issue of third-party financing did not arise. Swift action was taken to detain the terrorists. As a matter of course, where there are suspected financing activities, provisions under the Criminal Procedure Code may be used to seize the funds. Once it is confirmed that it involves terrorist activity and the person is deemed a terrorist, section 6 of the TSOFA applies to prohibit dealing in terrorist assets. Notice is then served on institutions and counterparties not to

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transact with the terrorist which, essentially, freezes his assets.

Mr Deputy Speaker, Singapore operates a rigorous regime against terrorism financing and money laundering. The proposed amendments in this Bill, such as the increased penalties and new provisions to protect informers and criminalise tipping-off, will further strengthen our enforcement regime against terrorism financing.

I will now move on to specific questions that Members have on TSOFA and the proposed amendments in the Bill.

Ms Foo Mee Har asked whether the legislative framework to counter terrorism financing and money laundering, which is currently found in two different Acts – the TSOFA and CDSA − should be simplified to reduce possible inconsistencies.

Sir, the objectives of the TSOFA and the CDSA are somewhat different. The CDSA focuses on depriving criminals of their proceeds from a criminal offence. The TSOFA, on the other hand, can be pre-emptive – it seeks to cut off the resources available to terrorists, so as to prevent the commission of terrorist acts in the first instance. While there may be some similarities, such as in terms of methods used to carry out money laundering and terrorism financing, there is merit in having two different legal regimes which allows us to take a more calibrated and targeted approach, depending on the nature of the offence.

MHA is reviewing the CDSA, including the penalties provided within the Act. Where it is necessary to align certain provisions or penalties with the TSOFA, we will do so.

Ms Foo commented that it may be difficult for the bank to establish whether the suspicious transaction or funds is for terrorist financing or other criminal activities, and, therefore, whether to make a report under TSOFA or CDSA. In practice, we would require just one report from the institution. The authorities will then follow up with the investigations and assess whether an offence under TSOFA or CDSA has been committed.

Assoc Prof Eugene Tan was concerned that the definition of "terrorist" in the Bill was too broad. On the other hand, Ms Sylvia Lim asked if there were concerns that certain terrorist groups were not listed and identified specifically. The Bill defines a terrorist to include any person who commits, attempts to commit, participates in, or facilitates the commission of any terrorist act. It also

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includes any person set out in the First Schedule of the Bill. So, even if he is not in the Schedule, if he fits the definition, then he is caught by the Bill.

Mr Deputy Speaker, our definitions of "terrorist" and "terrorist act" are consistent with the legislation of other jurisdictions, such as Hong Kong. It is also in line with the International Convention on the Suppression of Financing of Terrorism. We have taken reference from international standards and comparable jurisdictions.

The provision to specify persons as terrorists in the First Schedule is intended to enable us to meet our international obligations under the UN Security Council (UNSC) Resolutions, which require financial sanctions to be imposed on individuals and entities designated by the UNSC Committees.

This Schedule is currently set out in the United Nations (Anti-Terrorism Measures) Regulations and will be moved to the TSOFA with the consolidation of the overlapping terrorism financing provisions.

This Bill does not change the existing definition of "terrorist" in the Act.

Mr Dhinakaran suggested expanding the definition of "terrorist act" in the TSOFA to criminalise the act of planning or conceptualising a terrorist threat. The TSOFA does not criminalise terrorist acts but the financing of terrorism. We have to be clear about the intent of the Act.

The commission of terrorist acts is criminalised under other statutes, such as the Terrorism (Suppression of Bombing) Act, Hostage Taking Act and Maritime Offences Act. The planning and agreement to commit such acts would be an offence of criminal conspiracy under section 120B of the Penal Code.

Mr Desmond Lee, Assoc Prof Eugene Tan and Mr Dhinakaran also asked whether the penalty for terrorism financing offences should be set higher than for money laundering offences, given the severity of terrorism acts. I appreciate the sentiment behind the questions and the proposals.

The penalties that have been proposed for the terrorism financing offences are in line with those of other jurisdictions. For example, Canada, Hong Kong, Germany, Switzerland and United Kingdom impose a maximum imprisonment term ranging from five to 14 years. The Member mentioned the US legislation, where the maximum imprisonment term is 20 years. So, there is a spectrum

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and we think 10 years is a reasonable reference point at this stage.

The Bill will also raise the maximum fine for terrorism financing offences to the same level as for money laundering offences, that is, $500,000 in the case of individuals and $1 million in the case of entities. This is a significant increase – five-fold for individuals and 10-fold for entities – and it should provide a strong deterrence. I recognise the point that Mr Lee made about corporations and the sum of $1 million may not be significant. But we have to look at it in totality. Once an entity is the subject of such action, the reputational damage and the limitations that will affect its operational capabilities will also have a significant sobering effect.

We have made this move to significantly enhance the penalties. We will monitor the effectiveness of these enhanced penalties and we are not averse to the idea of reviewing them if necessary.

Besides increasing penalties for terrorism financing offences, the Bill also seeks to strengthen our counter-terrorism financing regime through the inclusion of a new section 10A to protect informers.

Assoc Prof Eugene Tan was concerned that section 10A may make it difficult for the accused to mount a defence. Mr Deputy Speaker, we need to strike a balance in the public interest between giving the accused unlimited access to all available information for his defence, and protecting informants so that they will not be afraid to provide much needed intelligence to prevent terrorist attacks. This does not absolve our enforcement agencies from conducting proper investigations and gathering the requisite evidence to prove all the elements of the offence. But the key point here is this balance is an important one and this Bill seeks to strike a balance in the context of what we have experienced in Singapore today.

Mr Hri Kumar also spoke on the circumstances that would permit disclosure of the informer's identity and safeguards available.

Disclosure is permitted in limited circumstances specified in sub-section (3). Disclosure is allowed in criminal proceedings if the court is satisfied that an informer had wilfully made a material statement which he knew or believed to be false. In other proceedings, disclosure is permitted only if the Court is satisfied that justice cannot be fully done between the parties without the disclosure.

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This exception is intended as a safeguard against injustice resulting from protecting the identity of informers. In such situations, the Court will assess whether to lift the protection after weighing the interest of protecting the informer's identity.

This is an established system. We have experience in this and it has generally worked well for us. Other statutes, such as the Misuse of Drugs Act, contain similar provisions to protect informers.

Assoc Prof Eugene Tan was also concerned about witnesses providing information which they knew or believed to be false during court proceedings. Although the TSOFA itself does not have a specific provision to criminalise such acts, they can be dealt with under the Penal Code.

Under section 193 of the Penal Code, for example, if a person intentionally gives or fabricates false evidence in a judicial proceeding, he is liable to a fine or an imprisonment term of up to seven years, or both.

I will now move on to the comments from Members on the new section 10B which criminalises tipping-off that prejudices an investigation under TSOFA.

Mr Hri Kumar has raised some questions on the scope of the legal privilege in the new section 10B. As Mr Kumar has pointed out and, as the Minister for Law can attest to, the scope of this privilege was explained when the Evidence Act was amended in 2012.

The reasons for limiting the scope of the privilege apply equally to the use of legal privilege as a defence to the offence of tipping-off. Given the gravity of the offence of terrorism financing, we see no justification, in this instance, for a wider defence, especially since we want to safeguard against abuse of legal professional privilege.

The Bill also refines the exemption provision in section 7 to support our terrorist rehabilitation efforts. Mr Hri Kumar suggested that section 7(1) should be drafted more narrowly to spell out the precise circumstances in which an exemption may be granted.

Under the General Exemption Order for basic expenses to be made under section 7(1), the definition of "basic expenses" will be clearly specified so that only transactions, such as payment for foodstuff, rent, mortgage, medicine and public utility charges that fulfil this definition, will automatically be exempted.

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Outside of the General Exemption Order for basic expenses, there may be other legitimate circumstances that warrant an exemption order to be made. It is not feasible to spell these out precisely or comprehensively, given that the nature and type of such transactions or activities may vary and evolve over time. But let me assure the House that our agencies will carefully examine the merits of each case before granting any such exemption.

As for the question on revoking of exemptions, an exemption order can be revoked by the Minister. If an exemption order has been breached, then the exemption may not apply and the person exempted will be guilty of the offence for which he is exempted.

Mr Hri Kumar and Ms Sylvia Lim asked about the safeguards to ensure that funds will not be channelled towards terrorist activities. Again, I want to assure Members that there are procedural safeguards in place.

Our law enforcement agencies will conduct a thorough investigation at the point of application for such an exemption to ensure that the transaction is for a legitimate purpose before any exemption is granted, and these exemptions can and will include conditions and requirements, such as regular reporting. Our agencies will also monitor the exempted transactions or activities to ensure that the property and services are utilised for the declared purposes.

The Government works closely also with the community on the rehabilitation of terrorists and to counter the spread and influence of extremist ideology in Singapore.

Assoc Prof Eugene Tan asked whether persons who are found guilty of terrorism financing offences will be required to undergo counselling. All terrorism-related cases, including terrorism financing, will be thoroughly investigated. Subjects who are found to be ideologically indoctrinated to support terrorism activities will be encouraged to undergo counselling as part of their rehabilitation.

Mr Desmond Lee asked about the levers to block access to and funding of websites that promote radicalisation. The TSOFA makes it an offence to provide funds for terrorist purposes, which would include the funding of extremist websites. Under the Broadcasting Act, MDA is also able to require Internet Service Providers to block access to such sites.

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Mr Deputy Speaker, I believe I have substantively covered the points that have been raised by various Members in the course of this debate. I want to stress that terrorism continues to pose a significant security threat, both globally and in the region.

Singapore has consistently taken a strong stance against terrorism. As a responsible member of the international community, Singapore is committed to supporting international efforts to combat terrorism, including terrorism financing.

The proposed amendments will align our regime with the practices of other jurisdictions. They will also bring us into greater compliance with international standards, as well as strengthen Singapore's competitiveness and status as a trusted financial hub.

I urge Members of the House to give your support to the Terrorism (Suppression of Financing) (Amendment) Bill.

Are there any clarifications for the Second Minister? Ms Sylvia Lim.

Thank you, Sir. I have two clarifications for the Second Minister. Earlier, the Second Minister mentioned that, so far, there have been no prosecutions under the Act. I wonder if he is concerned about that because the Act has been in force for about 10 years now. How does he read the fact that there has been no prosecution so far?

Secondly, it is in relation to the UN listing, a point which I raised earlier about the two groups which ISD identified as active in Singapore in collaboration with Al Qaeda and JI. I agree with what he mentioned about the definition being an inclusionary one, so it is not just whether you are on the list but also whether you are engaged in such activities. My follow-up question is whether Singapore, as a member state of the UN, had tried to get these two groups listed because, I think, under the procedure, member states are allowed to do so. I would like his clarification on that.

Sir, the fact that there were no prosecutions under the Act per se is not a cause for concern. As I stated earlier, and I will explain again, it

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is because the overwhelming majority of cases in our context have been cases of terrorists who were self-financed. So, the issue of third-party financing does not arise. However, once it is confirmed that there is terrorist activity and the persons are deemed terrorists, the appropriate notifications will be served on the financial institutions and other relevant parties, to ensure that they understand that transacting with these individuals or entities would constitute an offence under TSOFA.

Ultimately, the real test is whether we have been able to pre-empt such incidents from occurring in Singapore. So far, the record is good, but we need to continue to be vigilant and not take things for granted. And many of the provisions in this Bill are really intended to strengthen our ability to counter this form of activity.

On the UN listing and whether Singapore specifically made an effort to list these two entities, I am not aware of the details of the effort on our part. I will provide clarifications on this issue to the Member later. But substantively, I think the point is that regardless of the list in the Schedule, we are not constrained. As long as an entity or an individual is identified as a terrorist threat, then the appropriate provisions of this Bill, and, indeed, any other related Acts covering the issue of terrorism, will come into force.

Sir, I would like to ask the Second Minister whether the Government has any plans to have a comprehensive anti-terrorism legislation and, if not, why not.

Sir, at this stage, we do not have a plan for a comprehensive Act for terrorism. As I have enumerated in the course of my Second Reading speech and the response to Members, we have a range of Acts and provisions across different pieces of legislation that enable us to act against terrorism, whether it is pre-emptively or on an ex-post basis. And, indeed, one could argue that whilst this may not be elegant from a legislative point of view, it does give us the flexibility to take calibrated and targeted action, depending on which piece of legislation is most appropriately used in the context of the actions that are required. Having said that, I will not rule this out but it is certainly not on the agenda at this point.

Are there any more clarifications from hon Members?

[(proc text) Hon Members indicated none. (proc text)]

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[(proc text) Question put, and agreed to. (proc text)]

[(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)]

[(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mr S Iswaran]. (proc text)]

[(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]

[(proc text) Order for Second Reading read. (proc text)]

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

The Bill deals with the legal parenthood and status of children conceived through assisted reproduction technology, or ART. This is now being introduced because of the increased use of ART treatment in Singapore.

We have been studying possible legislation in this area. We consulted the public last November on a draft Bill. That followed earlier consultation with family law experts and religious groups in 2011. We studied the Law Reform Committee's 1997 Report on the status of children conceived through ART. We also looked at and discussed the legal position and practices of other jurisdictions, including the United Kingdom, Australia and New Zealand.

Having undertaken this review of the legal and socio-cultural issues, both locally as well as abroad, we settled on a new legislative regime which embraces the unique realities of families and children in Singapore.

The Bill really represents the culmination of these efforts. It attempts to do three things: (a) clarify the legal parenthood and status of children conceived through ART; (b) clarify the legal parenthood and status of children conceived where the wrong egg, sperm or embryo was used in the fertilisation procedure;

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and (c) modernise laws relating to legitimacy and evidence of paternity.

The Bill does not go into or seek to regulate the provision of ART services in Singapore. Neither does it seek to deal with surrogacy issues. These will continue to be regulated by MOH.

I will now take the House through the main provisions of the Bill. The premise of the Bill is that a child conceived through ART should have at least one legal parent. The status of legal motherhood is governed by clause 6. The gestational or birth mother will be treated in law as the mother of the child. Clauses 7 and 8 govern legal fatherhood.

The Bill provides for several broad scenarios. Clause 7 deals with the situation where the gestational mother is married. The gestational mother's husband will be regarded as the legal father of the child where the husband is: (a) the genetic father of the child; (b) not the genetic father, but had consented to the ART procedure. Consent is presumed unless the contrary is proven; or (c) not the genetic father, did not consent to the ART procedure, but accepted the child as a child of the marriage, knowing that the child is genetically not his.

Clause 8 deals with the situation where the gestational mother is in a relationship with a man, as if he were her spouse. The Bill terms this man her "de facto partner". In such cases, legal fatherhood is premised on a court declaration of parenthood, not the operation of law. The "de facto partner" will not be treated as the legal father of the child, unless an application is made to the Court, and the Court so declares under clause 8.

The circumstances under which such Court declarations may be made are similar to those governing the legal fatherhood relating to husbands under clause 7. In terms of what the Court has to consider, the welfare and best interests of the child is the Court's primary consideration when exercising its discretion.

Clause 10 sets out a list of factors which the Court may have regard to when considering what is in the welfare and best interests of the child. These include the child's wishes and the bond developed between the child and any of the parties to the proceedings. If the gestational mother subsequently marries her de facto partner after the ART treatment, the rules on legal fatherhood pertaining to husbands under clause 7 will also apply.

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As for the position of gamete donors, clause 5 dissociates parenthood from biological descent. Sperm or egg donors are not to be automatically treated as parents of the child except as provided for by the Bill.

Let me now turn to the legal parenthood and status of children conceived as a result of an ART mix-up. The wrong egg, sperm or embryo used in the fertilisation procedure as a result of mistake, negligence, recklessness or fraud could take place. The Bill sets out the default position to ensure certainty, in the interests of the child. Absent an application to Court, legal parenthood would be determined as if the mix-up had not taken place. But any interested party – for example, the other sets of parents in the mix-up – can apply to Court for a declaration that he or she be declared as the parent of the child. This particular provision is unique to Singapore. Through this, we seek to achieve two objectives: (a) ensure that the child will not be left parentless if no one wants to take care of the child after discovery of the mix-up; and (b) give the Court flexibility to declare parenthood where a different result would be in the best interests of the child.

We also seek to make amendments to the Evidence Act and Legitimacy Act. These are relevant to all children, whether conceived naturally or through ART. Let me turn, first, to the Evidence Act. Amendments to the Evidence Act will modernise our laws relating to evidence of paternity. Clause16 repeals and re-enacts section 114 of the Evidence Act. This enables relevant scientific evidence, for example, DNA evidence, to be produced before a Court to displace the presumption of paternity under that section.

If you turn to the Legitimacy Act, clause 17 amends section 3(1) of the Legitimacy Act. This was a suggestion of the Singapore Academy of Law (SAL) Law Reform Committee. Previously, an illegitimate child whose father is domiciled in Singapore at the date of marriage can be legitimised by the subsequent marriage of his parents. Now, this rule is extended to children whose mothers are domiciled in Singapore at the date of marriage. The effect is legitimation of the child where either the father or mother has a strong connection to Singapore. Mr Deputy Speaker, I beg to move.

[(proc text) Question proposed. (proc text)]

Mr Deputy Speaker, I support this Bill. Science and technology have improved our lives and enabled us to live

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in a manner our forefathers could not even conceive. And every time we think we have reached our capacity, we are often reminded that that capacity may well be limitless.

So it is with Assisted Reproduction Technology (ART). It is a cold, clinical term. What it really represents is HOPE – hope for childless couples around the world and in Singapore to bear children, to hold their own flesh and blood in their arms, and to experience the joys of parenthood. It has been said that life affords no greater responsibility, no greater privilege, than the raising of the next generation. As a father myself, I cannot agree more. Becoming a parent is a life-changing and humbling experience.

It is, therefore, no wonder that many have turned to ART in the hope of becoming parents. And the Government has supported the hopes of such couples. In 2008, the ART treatment co-funding scheme was introduced to subsidise the cost of ART. This scheme was further enhanced earlier this year. As of March 2012, a total of 3,841 couples had benefited from the subsidy. And I have no doubt that the numbers will continue to rise. All this has resulted in more births in Singapore using ART – from 720 in 2006 to 1,308 in 2010. It is the same story around the world, with reported increases in countries where such facilities are readily accessible. In Japan, for example, there were 26,680 babies born through IVF in 2009, compared to just 11,119 in 1999. So, more than double in 10 years.

When this Bill was introduced, some raised concerns about the ethical issues it gives rise to and such concerns are inevitable. This Bill deals with controversial issues, such as conferring parental rights to a man even if he is not the sperm donor. It also gives a man parental rights where he is not married to the mother at the time of the procedure. There will be concerns that we are sanctioning ART for single women and compromising the family unit.

As difficult as these issues may be, it bears reminding that this Bill is intended to tackle real life problems. ART exists and ART procedures are being carried out. And there are real situations and circumstances where the law is unclear or unsettled on paternal rights and legitimacy of the child. One example is where the husband or partner of the gestational mother has not given consent to the use of his sperm. Another example is where the wrong egg or sperm is used in the fertilisation procedure, as has happened in Singapore.

As the use of ART becomes more prevalent, we will have to confront disputes similar to those which have arisen elsewhere. Let me cite a few

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examples around the world.

In the United Arab Emirates (UAE), a lady became pregnant after her divorce, using her ex-husband's previously-stored sperm from a failed IVF treatment. The man applied to disown the child because the woman did not obtain his consent for the procedure and he failed in court.

If this Bill becomes law, and a similar dispute arises in Singapore, the ex-husband would not be the legal father of the child, given that he was neither married to the lady nor her "de facto partner" at the time of the fertilisation procedure, and he was not her "de facto partner" after the procedure.

In Australia, a couple lived together for six months before breaking up in 2002. They remained friends and began IVF treatment in 2008 after the man agreed to donate his sperm. The man attended the birth of the child and visited him regularly, until the relationship between him and the mother broke down in 2011. A Family Court judge awarded the man equal parental shared responsibility of the two-year-old boy.

Should a similar dispute arise in Singapore after this Bill is passed, the man would not be the legal father of the child, given that he was neither married to the mother nor was he her "de facto partner" at the time of the fertilisation procedure and he was not her "de facto partner" after the fertilisation procedure either. Further, the man may not even be able to make an application to determine parenthood under section 10 since he does not fall within the ambit of section 10(2).