Hansard, Tuesday, 9 January 2018

1 Dr Lily Neo asked the Minister for Social and Family Development (a) whether the Ministry identifies and closely supervises cases of intellectually disabled persons who have no familial support or are estranged from their families; and (b) what can be done to prevent such vulnerable persons from being taken advantage of or abused.

Mr Deputy Speaker, the Ministry for Social and Family Development (MSF) recognises the vulnerability of intellectually disabled persons who have no familial support. Some may not have mental capacity or may lose mental capacity for decision-making and judgement. MSF works with community partners such, as the Singapore Police Force (SPF), Social Service Offices (SSOs), Family Service Centres (FSCs), volunteer welfare organisations (VWOs) and disability services providers to identify and help persons with intellectual disabilities with no familial support.

Support for persons with disabilities, including those with intellectual disabilities, range from day care to long-term residential care. The starting point is to see how they can best be supported within the family and within the community. Some of these support services include the following:

children disability homes, which are long-term residential care for children whose caregivers are incapable of caring for them, who have unsafe home environments and/or where their caregivers have passed on;

drop-in disability programmes at Seniors Activity Centres, which provide social and recreational programmes for higher functioning persons with disabilities; and

Day Activity Centres (DACs), which provide day programmes for persons with disabilities to enhance their independence by equipping them with daily and community living skills.

There are 29 DACs islandwide, and 19 cater to persons with intellectual disabilities. We have added another 400 DAC places in 2017 and will add more this year to increase the availability of such services to persons with disabilities. The wider community and public also have a crucial role to play in identifying and protecting these vulnerable individuals and to report any suspected violence or abuse. In this regard, MSF launched last year a three-year "Break the Silence" campaign to encourage bystanders and members of the public who witness or suspect violence to take action and to report. The campaign taps on social media, radio, television and roadshows to reach various segments in the community.

For persons who lack the mental capacity to make specific decisions relating to their personal welfare or property and affairs, a Deputy may be appointed under the Mental Capacity Act (MCA) as a proxy decision maker for that person. One of the key roles of the Public Guardian is to supervise Deputies appointed by the Court for persons who lack mental capacity, which include those with intellectual disabilities. The Public Guardian will also investigate whistleblower complaints on any alleged violation of the MCA provisions, including abuse or ill treatment of individuals without mental capacity, as well as instances of Deputies acting beyond the scope of the powers conferred on them by the Courts. If required, the Public Guardian will take appropriate action to safeguard such individuals, such as applying to the Courts to suspend or revoke an errant Deputy's appointment.

In some situations, persons with intellectual disability, regardless of mental capacity, may be unable to protect themselves from abuse or neglect. One of the additional levers to protect such individuals is the Vulnerable Adults Bill, which we hope to introduce in Parliament this year. The proposed legislation will allow the Government to protect individuals with physical and/or mental disabilities and who cannot protect themselves from abuse, neglect and self-neglect. This will complement existing laws that address violence, maltreatment and abuse against them.

May I ask the Minister whether there is a register for intellectually disabled people, so that they can be followed up with and assistance given to them should they require it? May I also ask the Minister whether MSF could have prevented the unfortunate circumstances that caused the death of Ms Annie Ee? Could she have been put under Public Assistance scheme where she could have received more assistance and need not have to stay with the people who abused her?

I thank the Member for the follow-up questions. On the issue of register, we recognise that for persons with intellectual disability, it is a whole spectrum classified very, very broadly into "mild", "moderate" and "severe" intellectual disability. Many young people who are diagnosed with intellectual disability get support when they are in preschool and when they go to SPED schools, whether they are in special needs education or in mainstream schools.

In that regard, agencies, schools, the community know who they are. For those with more severe needs, FSCs, specialised centres, preschools and schools will refer them, especially after they have graduated, to support services such as DACs. For those with more severe needs, they will be referred to even institutional care, if required.

Caregivers are given the necessary support and grants to undertake training in order to better support family members with intellectual disability.

As for the horrific case of Ms Annie Ee, I would preface to say that it is a very sad case, which caught public attention and caused tremendous unhappiness at what happened to a young lady with intellectual disability who was out there, working and looking after herself. The case had recently been up for sentencing and because there is an opportunity for appeal, I would like to preface by saying I would not talk specifically about the case.

So, I will make general remarks about how as a community and as individuals and how as a network of Government agencies, FSCs and VWOs, we can work together to strengthen the support for persons with disabilities, including persons with intellectual disability.

In this particular instance, we are referring to a case of a person with intellectual disability who went out to work, went to find employment for herself, to look after herself. The importance of having legislation to protect such persons cannot be further emphasised. We have an existing set of laws in the Penal Code that allow us to take actions against abuses. The Vulnerable Persons Bill which we intend to introduce will allow us to intervene even behind closed doors, to reach out to families and to reach out behind families.

But none of these will be effectual unless family members, colleagues, neighbours and passers-by, people who interact and suspect something amiss is happening to not just persons with intellectual disability but to persons with disabilities, to children and to vulnerable adults, step forward, raise the alarm bell and bring their suspicions to the attention of the authorities.

May I ask the Minister how many cases of intellectually disabled people are under Public Assistance, presently? Am I not correct to say that there are about 4,800 Public Assistance recipients, which is about 0.1% of total resident population in Singapore? May I ask the Minister whether MSF can be more compassionate and relax that eligibility criteria for Public Assistance to cover those intellectually disabled people, especially those with no family support?

Deputy Speaker, I do not have the figures that the Member has asked for. If she files a written Parliamentary Question (PQ), I would be happy to see whether the information can be provided. As for whether we can expand Public Assistance scheme to help people who are unable to support themselves, we will continue to review our schemes.

2 Er Dr Lee Bee Wah asked the Minister for Social and Family Development (a) what are the common causes of family violence; (b) whether more can be done to identify at-risk families and prevent such violence especially silent victims; (c) how many cases have reported by non-family members in the past three years; and (d) when will public consultation be held for a Vulnerable Adults Bill.

Mr Deputy Speaker, our Family Services Centres (FSCs) report an average of 1,400 cases a year where family violence is one of the presenting problems. In the past three years, on average, the Family Justice Courts received 2,800 applications for Personal Protection Orders (PPOs), with about 40% or about 1,200 PPOs issued each year.

In the last one year, one in three callers who called the ComCare Hotline on family violence matters were non-family members, that is, third parties. On average, the ComCare hotline receives about 60 calls annually on family violence-related matters. Of course, members of the public and family members may call other numbers, may report to the Police, may approach Family Violence Specialist Centres, may approach FSCs and bring family violence concerns to the attention of the authorities through different channels. I just gave the Member an example of those who call in through the ComCare hotline.

One common cause of family violence stems from the controlling behaviours of one family member over other members, resulting in intimidation or violence. Some families also face difficulties in coping with stressors, such as marital, financial or health challenges.

Family violence is not a private matter. MSF's "Break the Silence Against Family Violence" campaign aims to raise awareness of family violence and to equip bystanders with resources and skills to safely step in to help victims. The National Family Violence Networking System links various agencies and community groups to provide multiple access points for victims to obtain help. Victims of violence have access to hotline services and social service agencies specialising in family violence work. These agencies provide facilities for the application of PPOs through video conferencing, medical services, legal advice and counselling services.

The Penal Code, the Women's Charter and the Protection from Harassment Act provide protection for victims from violence, including family violence. The proposed Vulnerable Adults Bill will be an additional lever to allow statutory intervention in high-risk cases involving maltreatment and abuse of vulnerable adults. Public consultation on the draft Bill was held in the second half of 2016. MSF is finalising the provisions with relevant stakeholders and working through the details and standard operating procedures (SOPs) before introducing the Bill in Parliament this year.

Sir, I have two supplementary questions. For ComCare hotline and other helplines that are available, I would like to ask how does MSF assess risk? Are there any statistics to show how many people had been saved by such calls? I understand that in the United States (US), there are data analysis programmes to better screen the calls and identify the risks even earlier, before they are being harmed or die in the worst case scenario. Do we employ such data analytics technology?

I thank the Member for her questions. As I had said earlier, ComCare hotline is but one of the touchpoints through which victims of family violence, family members, neighbours, colleagues, friends, members of the public and bystanders can reach out to in order to flag possible family violence cases. Because in our view, family violence ought never to be treated as a private matter.

It is the importance of creating a network and continuing to refresh, revitalise and to re-energise the network that is important. So, no hotline operates alone, no agency operates alone when it comes to family violence because if it is not for this network, there is always a risk of a family violence case falling through the gaps.

So, the National Family Violence Networking System, of which the ComCare hotline is one of the entry points, brings a tight network of support and assistance that provides multiple points of contact for those affected by family violence. It links MSF and its partners to ensure sources of help are accessible to victims. The key stakeholders are Singapore Police Force, some people call the Police or go to the Neighbourhood Police Posts (NPPs) or Neighbourhood Police Centres (NPCs) or call 999; hospitals, which see cases of individuals, and sometimes, it could be that they suspect family violence causing the injuries; Family Violence Specialist Centres, who specialise in tackling the complex familial relationships and issues that surround the victims and their oppressors; and Family Service Centres as well as community-based welfare organisations.

So, whether the person calls the ComCare hotline or calls 999, goes to report to the Police or is suspected by a clinician, a doctor or a nurse who is doing triaging as being a potential victim of family violence, the network would kick in. Dialogue groups are held regularly among all the participants of this network to ensure that they are better placed to detect and to know what to do when they identify cases of family violence.

As for the Member's specific question on when people call the ComCare or other hotlines, whether that provides a protective element to the victim, we do not have specific data at this point. But I would say that every time a report comes to the attention of the authorities and the network is able to do its part, we would like to believe that it is an important first step that brings the matter out to the attention of specialists, counsellors, the authorities and the Police, and that would be an important first step to addressing family violence behind closed doors.

3 Assoc Prof Daniel Goh Pei Siong asked the Minister for Manpower how many couples aged 65 years and above are currently supported by only one CPF LIFE payout and how many of the spouses not receiving such payouts are women.

Mr Deputy Speaker, first let me clarify that the Central Provident Fund (CPF) LIFE scheme is only mandatory for cohorts who turned 55 from 2013 or, in other words, those cohorts turning 65 from 2023. Older cohorts can opt in to CPF LIFE on a voluntary basis, but most of them are still under the Retirement Sum Scheme (RSS), which does not provide lifelong payouts.

As CPF accounts are maintained and managed as individual accounts, we do not have data on CPF accounts by households and couples. For those aged 65 in 2018, the average CPF balance when they reached their Payout Eligibility Age of 64 in 2017 was $118,000 for males and $91,500 for females. This could reflect social norms in the past where many women were full-time caregivers and either did not work or worked irregularly and hence, would have less CPF.

I thank the Minister. I should have written the question as a projection.

Will the Ministry consider as a kind of scheme for the future that will allow the transfer of ownership of CPF LIFE from the owner to the spouse, just in case the owner passes on, considering that a lot of spouses, which could be mostly women, would be left without income if the spouse were to pass on early?

To some extent, members can already exercise an option to do so, so that their spouses who they expect to outlive them can have better income streams after they pass on. What we have done is to make it easier for members to transfer their CPF savings and to make cash top-ups to their spouses' accounts, so that the spouses too can get their own stream of income or larger stream of income payouts in retirement.

What I can share with you is that the various enhancements that have been made to the rules surrounding transfers and cash top-ups have had an effect. If you look at the data in 2012, the transfers and top-ups to spouses amounted to about $50 million. And then, if you fast forward to 2016, that amount of cash top-ups and transfers had quadrupled. It is certainly more than $200 million. The number of cash top-ups and transfers received by spouses in 2016 came to about 15,000. A good number of them, as a result of these transfers and top-ups, were able to achieve better retirement adequacy.

To the Member's question, if I understand correctly, what about the remaining stream-outs that a member could have received, had he stayed alive? Can that be transferred? I think from an actuarial standpoint, that would be very difficult. Because then in that sense, what the actuaries will have to take into account is not one person's expected lifespan but two persons' expected lifespans. And that would differ from couple to couple. It is already challenging enough to try and estimate for each person. When you add the complexity of a couple, I think that makes it much harder.

But I think what we will continue to do is to review the rules from time to time and where it is possible to do so, make it easier for people to make cash top-ups or transfers to their spouses.

I should also add that it is not just spouses who can make transfers and cash top-ups. We made it easier for children to do so. This is all part of enhancing the family support for retirement adequacy.

4 Dr Tan Wu Meng asked the Minister for Manpower what measures are being taken to safeguard Singaporean workers from unfair discrimination arising from pre-existing medical history when (i) at the workplace or (ii) seeking confirmation of employment.

Mr Deputy Speaker, Sir, the Tripartite Guidelines on Fair Employment Practices stipulate that employers should recruit and select employees on the basis of merit. They should also treat their employees fairly, with equal opportunities for training and development and pay their salaries based on ability, performance, contribution and experience. Pre-existing medical history should not be a factor if it does not affect the employee's ability to perform the job. The Ministry of Manpower (MOM) will take action against employers found to have engaged in discriminatory practices.

MOM and tripartite partners have also launched the Tripartite Standard on Recruitment Practices in November last year. To date, more than 240 employers with over 245,000 employees have signed up. These employers have committed to use only relevant and objective selection criteria to shortlist and select job applicants.

Mr Deputy Speaker, Sir, the incidence of discrimination based on medical conditions is low. There were only three cases in the last four years, out of a total of 2,100 cases of complaints on unfair employment practices examined by MOM and the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP). Nevertheless, MOM and TAFEP will monitor the situation closely. We will continue to actively engage employers on how to implement fair and progressive recruitment and employment practices. MOM will treat any report of workplace discrimination seriously and take enforcement actions where necessary. We urge workers who face any form of workplace discrimination to report the matter to MOM or TAFEP promptly, so that investigation and enforcement actions can be taken early on the errant employers.

I thank the Minister of State for his answer. In my interactions with my residents, I have come across residents who have recovered from a previous history of mental illness. They may have had a bout of depression when they were younger. They are now very well but, at the same time, they are afraid that if they declare this information to an employer, it may prejudice their employment prospects.

Likewise, I have also met residents who are on dialysis and worry that if the prospective employer becomes aware at an early stage, it may again prejudice their ability to have the job because of the time that needs to be taken out and the flexible work arrangements.

What plans does the Ministry have to continue building awareness of more enlightened human resource (HR) practices in the industry?

I thank the hon Member for sharing his residents' experience. This is something we are also concerned with in MOM.

As mentioned in my earlier report, in the promotion of fair and progressive recruitment and employment best practices, we encourage employers to select and also appoint their employees based on their ability and their skillset rather than using the existing medical history. We have been emphasising this to employers through our interactions with the Singapore National Employers' Federation (SNEF). At the same time, we have also set up an Institute of Human Resource Professionals (IHRP) to encourage and provide a lot of training for HR practitioners and professionals, so that they will go back to their companies and put in place progressive and fair recruitment and employment practices.

In all this aspect, we hope to be able to create a fairer and also non-discriminatory environment where even prospective job applicants who have pre-existing medical conditions will not be discriminated against.

However, for the small number of job applicants who feel that they had been discriminated against, we encourage them to report such discriminatory practices to MOM or TAFEP early, so that we will take immediate intervention to investigate the matters. And if, really, the discrimination is found to be justified, MOM will take strong actions to make sure that the employers will adopt proper recruitment and employment practices.

Just to share a little on what has been going on. As I mentioned earlier, there have been three cases of discrimination reported on medicated conditions, and after our investigations and examination, we realised that, there is no evidence to suggest that there is actual discrimination on the ground. The complaints arose merely because of miscommunication and misinformation. We take comfort in knowing the fact that, on the ground, although there may be some cases of discrimination on medical conditions, for cases that we have received, they are found to be otherwise.

So, I think it is important for any workers or any job applicants, who feel that they have been discriminated against because of their medical conditions should make MOM or TAFEP the first port of call to make a report, so that we will look into the situation and take the necessary intervention.

5 Ms Rahayu Mahzam asked the Minister for National Development (a) how does HDB ensure that the Ethnic Integration Policy (EIP) is adhered to when the flat owners rent out their flats; (b) whether there are rules in place to ensure compliance with this policy when flats are rented out; and (c) if so, whether HDB conducts checks or assessments to ensure that the sanctity of the EIP is maintained.

Mr Deputy Speaker, the Ethnic Integration Policy (EIP) applies to the sale and purchase of all Housing and Development Board (HDB) flats, as well as HDB public rental flats. But tenants who rent HDB flats out on the open market are not subject to the EIP, as their stays are typically temporary in nature and do not affect the ethnic proportions in our public housing estates in the longer term.

Instead, flat owners who rent out their flats to one or more non-citizen tenants are subject to the Non-Citizen Quota. The quota helps to maintain the Singaporean character of our HDB heartlands. All HDB owners are required to seek HDB's approval and ensure that they meet the quota before renting out their flats.

HDB conducts regular inspections of flats to ensure that all flat owners adhere to HDB's regulations. Unauthorised renting out of HDB flats is a serious infringement of the lease, and HDB will take firm action against any errant flat owners.

I thank the Minister for the answer. I raised this question because in my house visits, I had observed where there is a certain demographic of residents in certain flats. Some residents had also given their feedback about their observations in certain flats where you see a certain number of residents of a certain ethnicity. In light of that, I am just wondering what happens in situations where the rental is not actually approved by HDB, how are inspections and enforcement done in those situations? In a situation where there is non-compliance, what are the specific sanctions or penalties that are given for non-compliance? If there are any residents who have observed a certain trend in a particular estate, what recourse do they have in terms of referring this matter to the HDB?

Mr Deputy Speaker, as far as non-compliance with the limits is concerned, as I mentioned earlier, HDB takes this very seriously, and if there are advisors or residents who suspect that there may have been breaches of the quota or the HDB approvals, then please let HDB know. We do enforcement, surprise inspections even, and we will take these errant flat owners to task, as I mentioned earlier.

The quotas that were set for non-citizens were put in place in 2014. In putting in place these quotas, I think we also have to bear in mind and calibrate it carefully because there will be genuine flat owners who want to let out their flats and earn some extra income. If we tighten it too much, then they will find it difficult to rent out their flats, and that may deprive them of some income for their families and households.

So, we have set the quota in place in 2014. So far, there has not been any breach of the quota for the neighbourhood in Bukit Batok East. What we have seen is that the numbers are well within the quotas that we have set. But we will continue to monitor and see, as we progress along, whether there is a need to update and review these limits.

6 Mr Zainal Sapari asked the Minister for National Development (a) how does HDB ensure the racial quota under the Ethnic Integration Policy (EIP) during the selling and buying process to ensure fairness and transparency to all parties; (b) what assistance is provided to sellers who are unable to sell their flat due to the EIP despite the many extensions given for them to sell their flat; and (c) whether HDB can exercise flexibility to allow a sale transaction to go through especially in circumstances where the seller cannot find a suitable buyer for a particular ethnic group.

Mr Deputy Speaker, the Ethnic Integration Policy (EIP) was introduced in 1989 to ensure a balanced mix of ethnic groups living in our Housing and Development Board (HDB) estates, to promote racial harmony and strengthen social cohesion. It applies to the sale and purchase of all HDB flats and is implemented in a fair and transparent manner.

Prospective buyers and sellers of resale flats can check their ethnic eligibility to buy or sell a flat through the HDB InfoWEB. The ethnic proportions are updated on the first day of every month and they apply to all completed resale applications received during that month.

Based on our experience, most flat sellers are able to secure buyers from eligible ethnic groups, given the large number of buyers on the market every year. For those who are unable to sell their flats, HDB may grant them an extension of time and advise them to be realistic with their asking prices. Additionally, HDB has and will continue to exercise flexibility for households of mixed parentage or marriages, or where there are exceptional circumstances.

7 Ms Denise Phua Lay Peng asked the Minister for Education (Schools) (a) what is the rationale for priority admission to co-located primary schools for students in MOE Kindergartens; and (b) what are the responses of parents and other preschools to this policy announcement.

8 Mr Zainal Sapari asked the Minister for Education (Schools) (a) what is the number of Primary schools with MOE Kindergartens; (b) how many MOE Kindergartens will be located in the popular primary schools which have balloting in the last three years for Primary 1 registration; and (c) whether the priority admission for pupils of MOE Kindergartens that are co-located with the primary schools use the procedures and rules as the Primary 1 registration exercise.

Mr Deputy Speaker, may I have your permission to take Question Nos 7 and 8 together?

Yes, please.

The Ministry of Education (MOE) is committed to ensure that every child has a strong start and can access affordable and quality education. We piloted the MOE Kindergartens (MKs) with this in mind, and the take-up rate and reception of parents have been positive.

In reviewing the pilot, MOE found that there are developmental benefits to young children when they remain in a familiar physical, social and educational environment. In addition, we have received feedback from parents who said that they hoped that the number of "transitions" can be reduced. As MKs cater to Kindergarten 1 (K1) and Kindergarten 2 (K2) children, MK children typically transit twice in their early childhood: first, from nursery to MK; and second, from MK to the primary school. From the MK pilot experience, school-based MKs have greater synergies with primary schools which, in turn, better support the children's transition from K2 to Primary 1. Hence, MOE has assessed that it is timely to facilitate a smoother transition of MK children to the primary school that the MK is located within.

This is why we introduced the Phase 2A2 eligibility for MK children as a pilot scheme. This means that MK children will be eligible to register under Phase 2A2 for admission to the primary school that the MK is located within, during the Primary 1 school Registration Exercise, like other Phase 2A2 eligible children, under the same procedures and rules of the Primary 1 Registration Framework.

To serve a larger proportion of Singaporean children, MOE will increase the number of MKs to 50 by 2023. All the new MKs will be located within primary schools. The new MKs will generally be located in estates where there is a higher demand for preschool places and the schools they will be located within are likely to be Government schools. It is too early to say if these schools will ballot in which phase of future Primary 1 Registration Exercises, or whether, indeed, they will face balloting at all. Regardless, MOE ensures that there are sufficient school places on a regional basis so that no child will have to travel long distances to his or her primary school.

Many parents have welcomed MOE's plan to expand the number of MKs, as well as the introduction of the Phase 2A2 admission eligibility. At the same time, some parents have expressed concerns that the admissions eligibility for MK children may bring the stress of primary school admission upstream to the kindergarten years. We are mindful of this and have put in place measures to mitigate it.

We have deliberately calibrated the admission eligibility to be at Phase 2A2, which is below that for younger siblings of students already in the school, which is Phase 1 and children of alumni members in Phase 2A1.

The planned K1 intake for the MKs will be significantly below that of the planned Primary 1 intake of the primary school that the MK is located within, so that there will be sufficient access for children who are not from the MK at the Primary 1 Registration Exercise.

In addition, at least a minimum of 40 places will always be reserved for Phases 2B and 2C at every primary school, to ensure open access to the school.

Some preschool operators have expressed concerns that the admission eligibility for MK children would make their preschools less attractive. But given the growing demand for preschool services, the Government's foremost objective is to ensure that parents have access to quality and affordable preschools for their children, and MKs are part of this strategy, with one-third of MK places reserved for Singaporean children from households with a gross monthly income of $3,500 and below, living within one kilometre of the MK.

Nevertheless, at 50 MKs, MKs will only make up about 20% of the preschool landscape, which means that parents will still have sufficient choice and good preschools that are able to provide quality services that meet the needs and preferences of families will continue to play an important role in this sector. When selecting a preschool for their children, parents consider factors, such as the quality of the programmes and teachers, location and the service model. For example, some parents may prefer their children to be in the same child care centre from their infant years all the way till K2. Hence, we hope that all preschool operators will continue to invest in uplifting quality and to evolve their services to cater to the different needs and preferences of parents.

The introduction of Phase 2A2 admission eligibility for MK children is a pilot scheme. MOE will continually monitor demand and the needs of parents, take in feedback and assess how well the admission eligibility is working in achieving the outcomes. It will be sometime before we will have 50 MKs and we hope to draw on the experience of operating these MKs to do proper refining and review. If necessary, we will always do these refinements as part of our continuing journey to improve the education system.

Ms Denise Phua.

I would like to thank the Minister for his comprehensive answer. I would like to seek clarity from the Minister on the vision of MOE's role in the early childhood education sector. MOE has initially entered this space with these MKs as a pilot to uplift the quality and raise the bar of preschool education in Singapore. I would like to ask if MOE is still doing a pilot with 50 kindergartens or is it now one of the key operators in this space. If so, how does it intend to level the playing field, especially for the preferred operators it has appointed, with MOE having a structural advantage, for example, in being able to implement policies of priority admission of children into co-located primary schools. So, I would like to ask what the vision is.

Secondly, coming back to the original objective of these pilot MKs, as a subject matter expert in this space, how does MOE intend to, and how has it so far been helping the other preschools in uplifting the quality of preschool education so that every child, indeed, whether in MKs or non-MKs, has access to quality education and quality preschool options?

The MKs are going to be expanded to 50. So, we are finished very much with the initial piloting of the 15 MKs. The areas where we have developed appropriate teaching or learning resources, we have started to share with the general early childhood sector. Since 2016, we have made available some of the resources that we have found to be very useful in the children's learning. For example, the "Big Books". When we come to the teaching of languages, we use big books to tell stories to the children to captivate their interest and facilitate their learning both in English and the Mother Tongues.

We have also put into the Nurturing Early Learners Portal some of the best practices in the MKs to make them available online for the early childhood educators' community. Furthermore, MOE participates in various conferences that are organised by the Early Childhood Development Agency or other agencies to share the best practices in early childhood education.

For the question on a level playing field, MK and the Early Years Centre collaboration is a pilot scheme. So, we have finished with the MK pilot, but now we are looking into providing an added option for parents, where they may be looking for a MK education for their children. So, we are looking to partner with some Anchor Operator Preschools (AOPs) to develop this partnering of childcare services from the early years. It may be two to four years old at the AOP childcare, and then to MK. This is an added option in the market.

Having said that, in totality, as I have said earlier, even when we are finished with the 50 MKs, it will be only 20% of the market. So, there is ample space for different operators to participate in this very important pre-school education sector.

But more importantly, from MOE's perspective, the level playing field is for the child. That is why, in all the different programmes that we put forward, as I have mentioned earlier, we ensure that it is affordable and easily accessible for children from lower-income families. Children who are from lower-income families have a reserved one-third of any MK slots. This promotes better social mobility and social mixing in our schools and this is very much the central objective in why we set up MKs as well.

Mr Zainal Sapari.

I just need a clarification or assurance from the Minister that every MK child will be able to secure a place where the MK is located in.

Mr Deputy Speaker, I thank the Member for his question. It is too early to give such guarantees and probably impossible to give such guarantees. But what I can say is that, in the framing of the whole scheme, we have ensured that the number of places in Primary 1 is significantly more than the MK.

From data, we also see that parents do exercise choices other than progressing their children from the MK to the primary school.

So, with a combination of such factors, we think that the likelihood of an MK child progressing through Primary 1 of the same locality will be quite high, but I do not think that I can give a guarantee at this stage.

Mr Ang Wei Neng.

Thank you, Mr Deputy Speaker, we really welcome the introduction of MKs in Singapore. Are there primary schools that are co-located with MKs that have become more popular because of MKs? This is my first question.

The second question is: what is the timeframe to realise the 50 MKs in Singapore?

My third supplementary question is: if one or a few MKs become so popular that the demand outstrips the supply, then what will be the admission criteria for such popular MKs?

Mr Deputy Speaker, I thank the Member for his question, but from the acoustics, I could only make up some parts of it. Could the Member please repeat the earlier two questions?

The first question is: are there primary schools with MKs that have become more popular because of MKs? If such primary schools become more popular because of MK, it is a good impact.

The second question is: what is the timeframe to realise the 50 MKs? MOE is increasing the number from 15 to 50, right? So, what is the timeframe to do so?

The third question is: when certain MKs become so popular where the demand outstrips supply, then what will be the admission criteria for such popular MKs?

I thank the Member for his questions. We do not have the data because we just introduced the MK concept only a few years ago, and we did not monitor whether the primary schools have become more popular because of the MKs. There is a variety of factors, so I do not have the definitive answer to the first question.

On the second question, it will take us up to 2023 to realise the 50 MKs.

On the last question, there is already an MK admission framework that is published on the MOE website. The priorities are clearly listed. Should there be greater demand than supply, a fair and transparent balloting system will take place.

9 Mr Thomas Chua Kee Seng asked the Minister for Trade and Industry (Trade) since the launch of the Global Investor Programme (a) how many employment opportunities have been created for Singaporeans; (b) what is the total local business expenditure generated; and (c) what are the actions taken to prevent abuse of the programme.

Mr Deputy Speaker, the Global Investor Programme (GIP) aims to attract and anchor entrepreneurs and investors of high calibre who can bring quality investments and good jobs to Singapore. From 2011 to 2016, GIP investors brought in $1.8 billion in total business expenditure via direct investments, generating over 6,000 job opportunities in Singapore. Industries that have benefited include infocomm media, engineering and financial services.

To qualify under the GIP, applicants may invest in a business or in a GIP fund that invests in Singapore-based companies. Both options have safeguards to prevent abuse. Each applicant is required to submit detailed plans and supporting documents to the Economic Development Board (EDB). EDB assesses the applicant's track record, business and investment plans, and potential contribution to Singapore. EDB also engages a risk assessment consultancy firm to undertake independent checks and works with relevant agencies for security screening. GIP investors undergo a fresh round of checks before their re-entry permits are renewed.

In addition, GIP funds are carefully assessed by an independent rating agency and a fund selection panel. All GIP fund managers must be incorporated and based in Singapore and be regulated by the Monetary Authority of Singapore (MAS). Investors of GIP funds are subject to the relevant safeguards under MAS' regulatory regime for fund management companies.

Mr Thomas Chua.

Thank you, Deputy Speaker. I would like to ask: what has been the performance of the GIP funds that are set up to invest in Singapore-based companies so far? And, if GIP investors are required to invest in only companies in designated sectors, for example, medtech, aerospace, logistics, infocomm, and so on, what have been the significant contributions of these companies to our sectors to date?

I will take both supplementary questions together. The primary objective of the GIP is for Singapore-based companies to benefit from the injection of capital from GIP funds and tap on the GIP investors' entrepreneurial track record to inject dynamism into our economy.

I can share that, as of 2017, the total GIP funds amount to $1.5 billion, but in terms of the performance, this would vary from fund to fund because each fund would have their respective mandate to invest in different sectors of focus. Furthermore, the GIP funds are invested in less liquid private equity companies, and their investment horizons span over a five- to seven-year time period, so we can effectively talk about the real returns only after it liquidates all its investments.

Mr Chua.

Given the stiff global competition for business talents and investors, how does Singapore's business talent attraction scheme, such as the GIP, compare or compete with those from other countries, for example, Hong Kong?

Quite a number of countries or economies do have these investor residency programmes. In comparison to a number of these programmes, Singapore's GIP would have one of the more stringent qualifying criteria. For example, the minimum investment required under GIP is $2.5 million. This is higher than the minimum required in other locations, such as Australia, the United States (US) and the United Kingdom (UK).

I believe that in Hong Kong, they have an investor entrepreneur scheme that does not state upfront a minimum investment amount. However, to put this into context, the GIP is only one of a very broad range of schemes that the Government employs to promote investment and also to grow our economy.

10 Mr Kok Heng Leun asked the Minister for Home Affairs (a) what is the outcome of the Ministry's review on the criminalisation of attempted suicide; and (b) whether any legislative change will be introduced and, if so, when.

11 Mr Kok Heng Leun asked the Minister for Home Affairs (a) what is the outcome of the Government's review on the issue of marital immunity for rape; and (b) whether any legislative change will be introduced and, if so, when.

Sir, with your leave, can I take both Oral Question Nos 10 and 11 together?

Yes, please.

We set up this Committee in July 2016 to review the Penal Code. Some of the areas that are being looked at by the Committee include attempted suicide, marital immunity for rape, punishments for sex offenders and the need to create new criminal offences to deal with the changing crime environment. In that context, the feedback on these issues, both from Members of this House and outside, have been noted. They are being considered in the review.

In addition to these, the Committee is also undertaking a fairly fundamental review on the principles which underlie our penal laws, including elements of criminal liability, the required mental element, intention, knowledge, the scope of mental health defences, as well as some of the language used in the Penal Code. The Committee aims to complete its work later this year. We will then invite feedback from the public on the recommendations.

Mr Kok Heng Leun.

I thank the Minister for his reply. May I ask that when the Minister is doing the consultation, when he is asking for feedback, that more time be given for the stakeholders to actually have conversations with it? Because in some of my past experience, in terms of dealing with consultations, a lot of times, little time is given for us to actually work on it.

I will reflect it to my officials, but we work fairly quickly and stakeholders must also revert to us quickly. Enough time will be given for feedback but everyone has got to work quite hard on it.

12 Mr Gan Thiam Poh asked the Minister for Education (Higher Education and Skills) (a) what is the number of ITE students who have progressed through polytechnics and university to attain (i) an undergraduate degree and (ii) a post-graduate degree respectively in the last 10 years; (b) what is the employment rate of ITE graduates in the last 10 years; and (c) how successful has the Ministry been in creating multiple paths towards career success for ITE students.

13 Mr Gan Thiam Poh asked the Minister for Education (Higher Education and Skills) (a) how have the present education policies helped to develop each child's potential to the fullest and ensure his success in life; and (b) whether there is a need to enhance the existing policies to ensure multi-paths created for each child that can ensure his success in life.

Mr Deputy Speaker, can I take Oral Question Nos 12 and 13 together?

Yes, please.

The challenges facing education today are very different from those in the past. Our education system then was primarily geared towards equipping young Singaporeans with the necessary literacy and numeracy skills very quickly. Today, our challenge is different. There are greater opportunities, young Singaporeans have more varied aspirations to fulfil and, upon entering the workforce, they must also be equipped with the skills and disposition to be resilient in a fast-changing global economy.

Our education system has changed in tandem. We have moved towards a philosophy of multiple pathways that support each student to go as far as he or she can, in his or her areas of passion and strength. For example, we have adopted subject-based banding in primary and secondary schools, so that students with strengths in particular subjects can be stretched in those subjects, while offering other subjects at a less demanding level.

The Direct School Admissions Scheme for secondary schools seeks to recognise students' specific talents in academic or non-academic areas, and is an alternative avenue to the Secondary 1 Posting Exercise based on Primary School Leaving Examinations (PSLE) results. We similarly introduced aptitude-based admissions at the polytechnic and the Institute of Technical Education (ITE) levels, for up to 15% of their intake, and also in our universities. These changes encourage students to pursue areas that they have the aptitude and interest in, and avoid an excessive focus on examination results at the various different stages of education.

We have also expanded pathways in higher education to offer more pathways for progression. Students in the Normal (Academic) course can now articulate to ITE and polytechnics after their "N" Level examinations, as an alternative to Secondary 5. Today, one in four ITE students already progress to polytechnics after graduation. We recently introduced a new ITE Work-Learn Technical Diploma pathway, to enable them to work towards their diploma while undergoing apprenticeships at good companies. For polytechnic graduates, the establishment of Singapore Institute of Technology has enabled more of them to pursue a degree. Our newest public university, the Singapore University of Social Sciences, caters to those who want to work first and pursue a part-time degree later.

The Member asked further about opportunities for ITE graduates. For the past 10 years, more than eight in 10 ITE graduates actively looking for jobs, found employment within six months upon graduation. The median gross monthly salaries of ITE graduates have also been rising, which is evidence of their strong employment prospects and industry-relevant skills. Some ITE graduates go on to upgrade their qualifications.

Beyond the ITE, polytechnic or university qualification, Singaporeans must also embrace lifelong learning and constantly upgrade themselves after entering the workforce. This is where the SkillsFuture movement comes in.

We will continue to improve the education system and pathways for our students, to continue to develop every child's potential to the fullest and ensure opportunities are available for Singaporeans to succeed in life. We will examine how we can better design the learning landscape, from preschool through to retirement. This is an endeavour that might take a generation, but we are well into our journey.

14 Mr Vikram Nair asked the Minister for Foreign Affairs whether he can explain Singapore's vote in favour of the recent United Nations General Assembly resolution of the 10th Emergency Special Session (ESS) on 21 December 2017 on the Status of Jerusalem, which indirectly criticised the US' decision to recognise Jerusalem as the capital of Israel.

Mr Deputy Speaker, Sir, Singapore voted in favour of the recent United Nations (UN) General Assembly resolution (A/RES/ES-10/19) at the 10th Emergency Special Session (ESS) on the Status of Jerusalem. Our vote in favour of this resolution is consistent with our longstanding position on the unfortunately long-running Israeli-Palestinian conflict. Our position over the years has been based on the principle of seeking peaceful resolution of conflicts by upholding international law and abiding fully with UN Security Council Resolutions.

Jerusalem is a unique city. It has profound religious significance for Muslims, Jews and Christians, and the status of Jerusalem is a very complex and sensitive issue with a very long history, fraught with political and religious dimensions. These special circumstances of Jerusalem have been addressed by numerous UN resolutions, with the most recent instance being the resolution that was voted upon on 21 December 2017. In fact, an almost identical resolution was considered by the UN Security Council, a week earlier, on 18 December 2017. At that UN Security Council session, 14 of the 15 members of the Security Council voted in favour of the resolution, and the United States (US) was the sole member to vote against and ultimately, to cast a veto against the resolution. And that is why the resolution then came to the General Assembly.

The resolution in the General Assembly reaffirms previous UN resolutions and, in particular, it rejected any decisions or actions which purport to alter the character and the status of Jerusalem, and the same resolution calls on all states to comply with existing UN Security Council resolutions on Jerusalem.

Singapore's position on this has been consistent. We do not take sides in the Israeli-Palestinian conflict. Our objective has always been to support a peaceful resolution to this conflict. We have been a steadfast advocate of a negotiated two-state solution, with Israel and Palestine living side-by-side in peace and security. Accordingly, the future status of Jerusalem should be determined through direct negotiations between both sides and any unilateral and premature action that might alter the status of Jerusalem would only serve to further destabilise the region. It would impede progress towards a just and durable solution to the Israeli-Palestinian conflict.

Our vote on the recent resolution is, therefore, consistent with this policy position. It has, at its foundation, a key principle of Singapore's foreign policy, which is the promotion of a rules-based global community, governed by the rule of international law and always seeking peaceful resolution of disputes. It is also in this context that Singapore has always strictly abided by all UN Security Council Resolutions. Indeed, UN Security Council Resolution 478 (1980) specifically calls on all UN member states not to take any action that purport to alter the character and status of Jerusalem.

Singapore's position on this issue is well-known and our vote at the various UN resolutions related to the Israeli-Palestinian conflict have been guided by this same principle, regardless of the positions of others. Although other states, including the bigger powers, may occasionally differ or disagree with certain positions that we take, we maintain a consistent application of this principle and this ability to maintain consistency over the long term has enabled us to be taken seriously and to be regarded as a reliable partner who can play a constructive role in international affairs. Indeed, Singapore remains a steadfast partner of the US, of Israel and of the Palestinian people. Our longstanding bilateral relations with all countries are strong and multifaceted, and our shared interests far exceed differences. At the same time, this gives us access and a strong relationship based on trust with the Palestinians and, indeed, with the Middle East as a whole.

Mr Deputy Speaker, Sir, Singapore's vote in favour of the UN General Assembly resolution on 21 December 2017 was actually a vote for peace and stability.

As a small country with a multiracial and multi-religious population, Singapore, of all countries, fully appreciates that tolerance and the peaceful resolution of disputes are vital for social harmony and for our success as a nation and, indeed, for world peace. We therefore hope that the parties involved will work towards the resumption of direct peace negotiations. This can only be achieved when both sides approach these longstanding sensitive issues in a spirit of good faith and appreciation for each other's beliefs, values, aspirations, hopes and anxieties.

Mr Vikram Nair.

Mr Deputy Speaker, two supplementary questions for the Minister. First, was there a reason Singapore chose to vote in favour of the resolution rather than, say, abstaining because that is clearly taking a position on the matter? And second, Singapore has always advocated a two-state solution and a change in status of Jerusalem, I believe, the Minister was implying would make that more difficult. What steps has Singapore taken to facilitate the two-state solution, given its strong relationships with both sides?

I thank the Member for those two questions. On the first question, when you are faced with a resolution, there is always a choice – you can vote in favour, you can abstain or you can vote against. In fact, there is a fourth choice, which is to be absent. But I think Members of this House will know that that is not Singapore's style. When we are confronted with a question, we face it head-on and we make what we believe is an appropriate choice that is consistent with our position, policy and our values.

We look very carefully at this resolution. As I explained earlier, the real problem or the catalyst for this current resolution, and I am going to say what I am going say now without naming names and without identifying countries, but what really precipitated this was an announcement. An announcement which could be construed as changing the status quo. And hence, in our view, could be unilateral and premature pronouncement which, instead of helping peace, would actually impede the peace process. So, that is why after very careful consideration and consultation, we decided to stand by our principles and say we do not think that this is a good idea and, therefore, we are voting in favour of the resolution.

It is a principled decision because we are actually not taking sides, but not saying one party or the other or its supporters are right or wrong. This relates to the Member's second question. Singapore is not a superpower. We are not a regional power. We are not a key player in the Middle East. For our approach, I would look at it at two levels. First, we do want to be friends with everyone but we want to be not just a fair-weathered friends. We want to be long-term, reliable and principled friends. For that kind of relationship to occur, when you have two parties who have been fighting for thousands of years, you can imagine it is a very difficult role to play. Nevertheless, because both Israelis as well as the Palestinians, and the Arabs and all the other countries in the Middle East know that Singapore does not take sides. They know that we do not bend for the sake of pressure or inducements and that we genuinely stand for peace and for development. So, that gives us special access.

I felt this special access. In April 2016, Prime Minister Lee Hsien Loong made a first visit as an incumbent Prime Minister of Singapore to both Jordon and Israel. Among the various parts of the trip, I think the most significant was when we had a chance to go up to Temple Mount, or the Arabic term, the Al-Haram Al-Sharif, where the Dome of the Rock is and where Al-Aqsa Mosque is. At the risk of being longwinded, let me tell you my sentiments, as the Prime Minister and our delegation, including Minister Masagos and Member of Parliament Dr Intan, went along with us.

The first sense I got was the sense of awe. Whether or not you are religious, if you visit Jerusalem and you go to those sites, you cannot help but feel that this is a special place, a sacred place. A place where heaven and earth seems to come to a confluence. That is the first sense. My second sense was gratitude for being a Singaporean because here we were accompanied by security from both the Israeli and Jordanian sides and they gave us full access. Minister Masagos even had the chance to pray in the cave beneath the Dome of the Rock. And they gave us full access to the Al-Aqsa Mosque and we are not Muslims. But everyone knew we were from Singapore, this is a multi-religious, multiracial group, and we were welcomed and were protected by both parties. So, there was that sense of gratitude, that sense of special access. People talk about the Singapore passport being very powerful. It is not really about the passport but the fact that the world welcomes and trusts us.

The third sentiment I felt during that trip was I thought about thousands of lives that had been lost and all the blood that had been shed on that hill, in the name of race, language and religion. It made me more determined than before to appreciate what we have in Singapore, that when we say we believe in peaceful resolution and we believe in direct, honest negotiations and that we believe in living side by side, even to the point where we need an Ethnic Integration Policy, we are not just describing to the world. We are living a real example of multiracial, multi-religious peace. When we say to live side by side in peace and security, we are a working vision, a working example of that future.

So, that, in a sense, in an anecdotal way, informs our attitude to this issue. So, in any particular resolution, and there have been lots of UN resolutions on this, I will not be able to tell you a priori whether we are going to abstain, vote against or for, but I am sharing with you the principles behind which we will interpret the resolution and then we will vote accordingly.

And from time to time, we will have to take a different position from friends or supporters but I am confident that they know Singapore, they know Singaporeans well and they know that we do not grandstand, we do not take political postures for the sake of posturing. But we do so in all sincerity as a reflection of who we are as a multi-religious society and our longstanding friendship, support and advocacy for peace in the Middle East. That, in a nutshell, is about all that we can do. We are not a superpower.

Asst Prof Mahdev Mohan.

Mr Deputy Speaker, I thank the Minister for his very detailed and heartfelt response to Mr Vikram Nair's questions.

The vote by Singapore was not only an enlightened one, it was fully in accordance with the rule of international law. My only question is, at the time when the vote was cast, were there efforts for the Association of Southeast Asian Nations (ASEAN) to speak with one voice at that vote? I ask this question because I noticed that both Myanmar and the Philippines abstained from the vote.

The short answer is, no, there was no time and no opportunity to cobble together a consolidated ASEAN position. But having said that, I am not even sure that that would have been ideal. As I said, this was a very sensitive and delicate situation, and I think every country had to take a position based on its own analysis of its own national interests. So, this was not an occasion to try to chorale or to put pressure on the individual members of ASEAN.

I say this in full cognisance that there will be, I am sure, future situations and future resolutions where it may be even harder for us to get together and to settle on a common position. So, I would not a priori aim to do that. I do not view that, therefore, as a setback that a couple of ASEAN members state abstained and that all the rest of us voted in favour.

15 Mr Leon Perera asked the Minister for Health whether Singapore's healthcare system has a plan for mobilising and coordinating all healthcare resources in case of a mass casualty incident that is similar to France's national emergency response plan "Plan Blanc".

The Government has a national inter-agency response plan for mass casualty incidents. Under this national response plan, the Ministry of Health (MOH) oversees and coordinates the management of casualties at the incident site, and at public hospitals and polyclinics.

Our national response plan is similar to the French national emergency response plan. It involves the deployment of command and field medical teams to the incident site as well as management of resources and capacity at our healthcare institutions to attend to casualties.

We conduct regular training, exercises and reviews within the healthcare family as well as with other agencies to prepare for such incidents. For instance, in October 2017, MOH participated in Exercise Northstar, a multi-agency exercise.

Mr Leon Perera.

I thank the Parliamentary Secretary for his answer. Just two supplementary questions. Firstly, does this plan aim to integrate both public and private healthcare resources to operate in concert in case of a mass casualty?

Secondly, does MOH actively study the plans of other countries like France to learn from their experience, and that experience is evolving with more and more terrorist incidents, mass casualty incidents and so on. So, is that kind of study being done of the experience of other cities?

I thank the Member for the question. MOH's current plans are to ensure our public hospital capacity is able to cater to such incidents but, from time to time, when the need arises, we do tap on the resources of the private sector and involve them in consultations and our engagements.

With regards to studying other countries, the short answer is, yes, we do. We visit countries. Just last year, I was in London to study some of the practices as well as in Israel. So, yes, we do.

16 Dr Lim Wee Kiak asked the Minister for Health (a) what is the rate of medical inflation in Singapore over the past five years versus the global rate; (b) what is the projected rate of medical inflation for the next three years based on an expected increase in the goods and services tax in the near term; and (c) what is the Ministry doing to help bring down the rate of medical inflation.

Healthcare inflation measures the growth rate of prices for healthcare related goods and services paid by patients after Government subsidies. Between 2011 and 2016, Singapore's average annual healthcare inflation rate was 2.4% compared to the Organisation for Economic Co-operation and Development (OECD) average of 1.6%. Recent policy measures, such as the Pioneer Generation Package, MediShield Life subsidies and the Community Health Assist Scheme (CHAS), have helped to bring it down to about 1.2% between 2013 and 2016.

While it is important to monitor healthcare inflation, it is just as important to look at overall healthcare spending. This is because subsidies are funded from Government revenue, which comes from the people through taxes and duties and the Net Investment Returns Contribution (NIRC) from our Reserves. Hence, overall healthcare spending is a more complete indicator than healthcare inflation alone.

In Singapore, our national healthcare spending has increased by more than 60% from $11.5 billion in 2011 to $18.8 billion in 2015, as we built more healthcare facilities and hired more healthcare workers to meet our growing healthcare needs. With an ageing population, it is inevitable that our total spending on healthcare will increase further. To keep our overall healthcare costs sustainable in the future, we have to focus on ways to transform our healthcare system and prevent healthcare costs from rising too quickly. This requires the collective effort of all stakeholders to work together in close partnership.

Mr Deputy Speaker, the Ministry of Health (MOH) had earlier announced three strategies to transform our healthcare system. Firstly, we are moving beyond healthcare to health by investing upstream in health promotion, disease prevention and health screening to help Singaporeans stay healthy. Secondly, we are shifting care beyond hospitals to the community to enable more patients to receive effective care closer to home. Thirdly, we are moving beyond quality to value for patients to deliver appropriate care to meet their needs. These include initiatives to improve productivity through innovation and process improvements and working in collaboration with private sector and community providers. The above shifts are important to keep our increases in healthcare spending at a more sustainable level as we consider different options to fund our future healthcare and long-term care needs.

Sir, the best approach to managing healthcare cost is for all of us to do our part by keeping ourselves in good health and adopting an active and healthy lifestyle. MOH will continue to invest in this area and work closely together with our industry and community partners.

Dr Chia Shi-Lu.

I would like to thank the Senior Minister of State for his very comprehensive response and I agree that Singapore's healthcare spending is probably the more critical part of this puzzle.

Just one clarification with regard to medical inflation. There are many figures that are bandied around and, sometimes, this does cause unnecessary concern to the public. It depends on where the source of the so-called medical inflation figures come from. But just in terms of clarification, what figures does MOH use when they are looking at medical inflation? Because a large part of expenditure is on private services, auxiliary or allied services, for example, even things like traditional Chinese medicine, which many members of our population actually make use of. For allied health, for example, for an ageing population, what are people spending on daycare, for instance, or other services of this sort? So, what methodology does MOH look at in order to follow medical inflation in Singapore?

Mr Deputy Speaker, I thank Dr Chia for his supplementary questions. I explained in my main answer that healthcare inflation measures the growth of prices paid for a wide range of healthcare-related goods and services, and this is after we have considered Government subsidies. Dr Chia is right that it is important to not only focus on healthcare inflation but to look at the total healthcare spending. So, this is why when we look at it, how do we work on transforming the healthcare system to prevent healthcare costs from rising too quickly? We are not only focusing on healthcare inflation alone but we are taking a more complete view of how we look at ways to help individuals stay healthy and how we look for ways to help our providers and our institutions deliver their services in a more productive and more efficient manner.

There are also many other cost items that add up to the healthcare bill, for example, the cost of drugs and consumables. So, these are all different ways in which, I think, we will have to pay attention to.

Yesterday, in this House, we spoke about fee benchmarks. Both Dr Lim Wee Kiak and Assoc Prof Goh raised questions about how we can best implement fee benchmarks. These are all the different ways. In my answer, I explained that fee benchmarks and fee guidelines is part of a larger strategy. So, it would also include some of these other measures.

One last point I will make, Mr Deputy Speaker, is that, ultimately, whether we are able to effectively and successfully prevent healthcare costs from rising too quickly is not only what the Government can do alone, but what we can do together with our healthcare providers, our healthcare workers, our Labour Movement, our union leaders and also with patients and families. This requires a collective effort from all of us. It is something that is important as we face an ageing population.

17 Mr Dennis Tan Lip Fong asked the Minister for Transport whether the Government can assist Singapore-based vessel-owning companies as well as foreign-based shipping companies employing Singaporeans to comply with social security protection requirements for all crew members serving onboard their ships as required by the Maritime Labour Convention 2006.

Minister, you only have three minutes.

I shall be quick. Singapore is committed to protecting the well-being of seafarers. In 2011, Singapore was the first country in Asia to ratify the Maritime Labour Convention (MLC), which is a comprehensive global labour instrument adopted by the International Labour Organization to provide for the rights and protection of seafarers working onboard vessels.

Our legislation provides for medical care, employment injury and invalidity benefits for all seafarers, Singaporeans or otherwise, employed on Singapore-flagged vessels.

In addition, Singaporean seafarers who enter into employment in Singapore and their employers are generally required to make CPF contributions for the seafarers' retirement needs, regardless of whether they are working on Singapore or foreign-flagged vessels. Singaporean seafarers who are employed by Singapore-based companies are also entitled to compensation for injuries sustained in the course of their work.

The Maritime and Port Authority of Singapore has not come across any cases of Singaporean seafarers who have been denied the requisite social security benefits.

The Government will continue to work with our tripartite partners to ensure that Singaporean seafarers are accorded the social security protection provided for under the MLC.

Thank you, Minister, for the concise reply. Order, end of question time.

[Pursuant to Standing Order No 22(3), provided that Members had not asked for questions standing in their names to be postponed to a later Sitting day or withdrawn, written answers to questions not reached by the end of Question Time are reproduced in the Appendix.]

[(proc text) "to amend the Criminal Law (Temporary Provisions) Act (Chapter 67 of the 2000 Revised Edition) and to make consequential amendments to certain other Acts", (proc text)]

[(proc text) presented by the Second Minister for Home Affairs (Mrs Josephine Teo); read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

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

Senior Minister of State Indranee Rajah.

Mr Deputy Speaker, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time".

The Supreme Court of Judicature (Amendment) Bill introduces amendments in relation to the Singapore International Commercial Court (SICC). First, the Bill makes clear that the SICC has jurisdiction to hear any proceedings relating to international commercial arbitration that the High Court may hear under the International Arbitration Act (IAA). Second, the Bill streamlines the SICC's procedure by removing the option of pre-action certification.

The SICC was established in 2015 as a division of the High Court to hear international commercial disputes, including those governed by foreign law. The underlying objective of the SICC is to be a neutral venue for international commercial litigation for parties with little or no connection to Singapore but who need and value a neutral jurisdiction with strong rule of law, experienced and highly respected judges and access to high quality legal and professional services for their dispute resolution. It is also to broaden the suite of international dispute resolution options available to regional and international parties and to complement our already well-established international arbitration services.

Key features of the SICC include:

flexibility on certain procedures, for example, on rules of evidence and discovery;

its bench which combines highly qualified and experienced local judges with high quality international judges, comprising eminent foreign jurists who can hear disputes governed by foreign law;

the option for parties to engage foreign counsel to represent them before the SICC where the case is an "offshore case", that is to say, matters with no substantial connection to Singapore.

Since its establishment, the SICC has heard 17 cases with diverse subject matters, including construction, investment, banking and finance and shipbuilding, and involving parties from jurisdictions including Japan, Israel, the United Arab Emirates (UAE), Hong Kong, India, Indonesia and Australia. These are all high-value cases. Two of the 17 cases included parties who availed themselves of the option to engage foreign lawyers. In the others, parties were fully represented by Singapore counsel.

The SICC has received positive reviews for the quality and speed of its judgments. For example, the first case heard in the SICC concerned a large-scale industrial project involving business interests in Australia, Indonesia and Singapore. The SICC issued two judgments for the case, which included a claim of about US$750 million and a counterclaim of about US$59 million. The first of the two judgments was described in the Global Arbitration Review as a "masterclass" in how to deal with the rules of interpretation, public policy and the implication of terms. Commentators have noted that the SICC is, and I quote, "…an innovative commercial court designed for international commercial cases… and the option of having their disputes adjudicated by experienced commercial judges from Singapore and international judges from common law and civil law jurisdictions".

It has also been noted, and here I quote again, "despite being in its infancy, the SICC is proving to be a key contributor to international construction law jurisprudence…" Yet another commentator has noted that most judgments were delivered within three months of the date of the last hearing, and some were even handed down less than a month after being argued.

To ensure that the SICC continues to fulfil its objectives, the main amendment in the Bill seeks to make it clear that the SICC also has the jurisdiction to hear the same kind of proceedings relating to international commercial arbitration that the High Court can hear, and which satisfies such conditions as the Rules of Court may prescribe.

Under the IAA, the High Court has jurisdiction over certain matters in relation to international commercial arbitration. For example, parties can apply to the High Court to seek the setting aside of an arbitral award given in Singapore.

Since the SICC was set up as a division of the High Court, it has always been the intention that parties should be able to appear before the SICC for IAA-related matters. Clause 2 of the Bill makes this position clear. Accordingly, parties may choose to commence an action in the SICC for an IAA-related matter, where the conditions in the Rules of Court are satisfied. A case may also be transferred to the SICC from the High Court and vice versa, in accordance with transfer requirements as set out in the Rules of Court.

Parties in these arbitration cases will benefit from the added option of having their applications heard by the SICC judges whose expertise covers a range of civil and common law jurisdictions. These are jurists of the highest calibre, hailing from diverse geographical backgrounds such as Australia, continental Europe, Hong Kong, Japan, the United Kingdom (UK), the United States (US) and Canada. Many of them are also very experienced in arbitration law.

Allowing the SICC to hear matters relating to international commercial arbitration will also increase Singapore's attractiveness as a seat of arbitration, primarily because the widely acknowledged high quality of the bench hearing arbitration-related matters will now be further enhanced by the inclusion of the international judges who sit on the SICC.

Currently, only Singapore-qualified lawyers in Singapore law practices may appear before the High Court for IAA and IAA-related matters. There will be no change to this status quo. The IAA is part of Singapore law, with features that are tailored for the Singapore arbitration landscape, and there is a developed body of local jurisprudence based on our Courts' interpretation and application of the IAA provisions, which Singapore lawyers are well versed in. Hence, parties which have arbitration-related matters heard in the SICC must be represented by Singapore-qualified lawyers.

Foreign lawyers, who may be registered to represent parties in an "offshore case" as defined in the Rules of Court, will not be able to appear before the SICC in respect of IAA matters. This will be so notwithstanding that the foreign lawyers had represented the parties in the original arbitration. The Rules of Court will be amended accordingly to clarify that an "offshore case" does not include matters under the IAA.

Finally, clause 3 of the Bill removes the option of applying for a pre-action certificate. When the SICC was established, it was envisioned that potential parties should have the option of applying for a pre-action certificate to certify that the intended action is international and commercial in nature, and can therefore be heard by the SICC. However, feedback received by the Supreme Court has been that the procedure has been of limited utility. It will therefore be removed.

The SICC's early successes place Singapore in a good position to continue to serve as a leading centre for the resolution of international commercial disputes. We will continuously refine and develop this offering to meet the needs of parties to such disputes. The amendments in the Bill are part of this on-going endeavour. Mr Deputy Speaker, Sir, I beg to move.

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

Mr Murali Pillai.

Mr Deputy Speaker, I declare my interest as a lawyer practising in international commercial disputes, and occasionally dealing with cases heard in the SICC. I support the primary aim behind this Bill.

The launch of the SICC in 2015 was a major move to position Singapore as a neutral dispute resolution centre in Asia in the litigation sphere, in tandem with the arbitration sphere. Leveraging on our existing well-developed legal infrastructure and respected judiciary, which includes not just local judges but eminent jurists drawn from outside Singapore, the establishment of the SICC heralded an exciting change in our legal landscape.

This Bill seeks to amend the Act to clarify that the SICC has the jurisdiction to hear any proceedings relating to international commercial arbitration that the High Court may hear. Given that the SICC's jurisdiction involves hearing commercial actions that are international in nature, there is no reason why the SICC should not also have the jurisdiction to hear proceedings relating to international commercial arbitrations involving foreign parties. This amendment is a timely one that brings clarity to this area.

I do note, as the hon Senior Minister of State mentioned, that SICC's jurisdiction to hear any proceedings relating to international commercial arbitration is proposed to be subject to conditions that will be prescribed in the Rules of Court. One condition that will be prescribed, as stated in the Explanatory Statement, is what constitutes an "international commercial arbitration". Could the Minister please elaborate on other conditions, if any, that are expected to be prescribed in the Rules of Court?

Next, on the issue of the abolishment of the pre-action certificate procedure, during the Second Reading of the Amendment Bill to establish the SICC in late-2014, the hon Law Minister explained that this was an optional step that a party could take in advance of commencing actual proceedings in order to mitigate any uncertainty in whether the dispute falls within the jurisdiction of the SICC. Now that that the SICC has had a few years of experience in administering international commercial disputes heard in that Court, may I ask what has changed that has led to a determination that the pre-action certificate procedure is no longer needed?

In particular, I wish to highlight that the pre-action certification procedure, besides promoting certainty in whether or not an action falls within the jurisdiction of the SICC in terms of whether it is an international commercial case, also assists in promoting certainty as to whether the case may be classified as an offshore case. This is because the pre-action certificate also allows for a determination by the Court at the outset as to whether the case should also be classified as an offshore one, such that foreign representation would be allowed. By doing away with this pre-action certification procedure, the remaining two modes by which the case may be classified as an offshore case only take effect after legal proceedings are commenced, namely, by either party making a unilateral declaration that the case is an offshore case or by either party applying to the SICC after the case has commenced for a determination as to whether it is an offshore case.

These two modes cause some uncertainty, as it appears that there is a lack of clarity as to whether a party who wishes to be represented by foreign counsel should do so from the outset after making a unilateral declaration, given the risk that this may be later set aside by the court.

From another point of view, the other party to the action may be taken by surprise, since it would not be aware as to whether the other party had applied to register foreign counsel because this is an ex-parte application. This means that the other party would not have advance notice of the other party's intention to have foreign representation until it is served with a unilateral offshore declaration. Even if that party were to apply to have the unilateral offshore declaration set aside, the other party's foreign counsel would nonetheless be allowed to act pending the determination of the application. This gives rise to the risk that even if the unilateral offshore declaration is, indeed, later set aside, the Court may nonetheless exercise its discretion to allow foreign representation to continue, as is allowed under the Rules of Court. From the counterparty's perspective, this may be seen as a fait accompli.

To promote greater certainty, it is preferable for any contentions as to whether the case is an offshore case to be raised and disposed of at the outset, either before the action is commenced or before the action is materially progressed. Subject to the points I have raised in my speech, I agree with the proposed amendments and I support the Bill.

Asst Prof Mahdev Mohan.

Mr Deputy Speaker, the SICC was, as we have heard, officially launched on 5 January 2015. And since then, this specialist division of the Singapore High Court has grown from strength to strength. The Court benefits from the best features of our established judicial system in Singapore as well as some novel features, such as having eminent international judges with common law and civil law training and experience who may be designated by the Chief Justice to hear cases in the SICC from time to time.

London may still dominate cross-border commercial litigation but it is no longer the default venue. The SICC has proven that it is able to quickly resolve complex disputes of substantial value and, together with the Singapore International Arbitration Centre (SIAC), and the Singapore International Mediation Centre, is an important component of Singapore's standing as a leading dispute resolution hub of choice in Asia.

It is thus only fitting, Mr Deputy Speaker, that on the third year anniversary since its launch, amendments have been proposed to the Supreme Court of Judicature (Amendment) Bill to clarify that the SICC has jurisdiction over all international commercial arbitration matters. This Court that had prompted the SICC's creation, the London Commercial Court, is perhaps one inspiration on this particular amendment or this particular clarification. As just like the London Commercial Court has a relationship with the London Mercantile Court, the SICC perhaps can be a specialist international court for international arbitration matters as well. The amendments to also abolish pre-action certificates signify that the SICC has come of age.

I welcome these amendments, Sir, but permit me to ask and pose certain questions to the Senior Minister of State.

First, notwithstanding the current avenues for enforcement at common law and under statue, does enforcement remain a challenge for the SICC as far as these judgments are concerned? More specifically, has Singapore's ratification of the Hague Convention on Choice of Court Agreements in 2016, and the passage of enabling legislation by this House just last year, had a positive impact on the enforcement of the Singapore High Court Judgments in general and SICC's judgments in particular? If so, could the Senior Minister of State please elaborate?

In addition to typical commercial arbitration cases which are between two commercial parties, do the amendments also clarify that the SICC can sit, if certain conditions are met, as the supervisory Court in investor-state arbitration cases as well under the International Arbitration Act, particularly section 10 of the International Arbitration Act? It would stand to reason, Sir, that it can do so since the High Court and the Court of Appeal have exercised such jurisdiction in the case of Solomon Investments and Lau, but I ask for this clarification from the Minister as the jurisdictional challenge was recently raised in the 2017 case of the Kingdom of Lesotho and Swissborough Diamond Mines. Further, some scholars believe that the Singapore Court may not have jurisdiction under the IAA to serve as the curial Court in investment arbitration cases.

Four, given the SICC has, strictly speaking, had the jurisdiction to hear cases arising from international commercial arbitration, both when the party so agreed by written agreement as well as when there has been a transfer from the High Court in its original jurisdiction, what may have dissuaded commercial parties from agreeing in their dispute resolution clauses thus far from having all court actions arising from any Singapore-related arbitration to come before the SICC? Are there statistics to show the number of companies perhaps that utilise the existing SICC model dispute resolution clause in their agreements?

Finally, are future innovations in the pipeline, Sir, to enhance the recognition and enforcement of SICC judgments? At the Dubai International Financial Centre (DIFC) Court, I note that money judgments can, at times, be "converted" under their Practice Directions into arbitral awards for the purposes of having recourse to the widely accepted New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. At the DIFC, if the judgment debtor does not have assets in Dubai, a common law country, a Gulf Cooperation Council (GCC) country and/or a country with which the UAE has a bilateral or multilateral treaty on recognition and enforcement, the judgment creditor can nonetheless still commence arbitration under the Arbitration Rules of the DIFC-LCIA Arbitration Centre. It is a combined centre between the London Court of International Arbitration (LCIA) and the DIFC.

While the nature and scope of the DIFC are certainly different from the SICC, is the Ministry of Law (MinLaw) perhaps studying the prospect of anything similar in collaboration with our own SIAC, which itself is recognised as one of the top five arbitral institutions in the world?

Just as an experimental Practice Direction that I mentioned above has opened the door to wider enforcement of DIFC judgements across the UAE, is the Ministry currently looking into the possibility of enhancing the recognition and enforcement of SICC judgments in ASEAN and Asian countries beyond the current avenues of enforcement available at common law and under statute?

Let me end, Sir, by saying perhaps the Senior Minister of State would be the person best poised and in the best position to answer my questions as she herself was a member of the creating committee of the SICC in 2013.

Mr Louis Ng.

Sir, I stand in support of this Bill. This Bill relates to proposed amendments to the Supreme Court of Judicature Act. It deals with matters relating to the operation and jurisdiction of the SICC.

The SICC was officially launched in 2015. The idea behind it was to grow the legal service sector, and to internationalise and export Singapore law. Since its launch, we have seen several cases go through the SICC, and it is important that legislation be updated to promote its efficiency. Similar to the point that Mr Murali Pillai had made, I would like to ask if the Senior Minister of State can confirm the rationale for removing the pre-action certificate and also whether there will be alternative procedures in place available to parties to now obtain early determination of these jurisdictional issues.

Next, the other primary amendment that the Bill seeks to pass relates to section 18D of the Act, which deals with the jurisdiction of the SICC. It is in this context that I seek certain clarification. As currently formulated under section 18 of the Act, the SICC has jurisdiction to hear and try actions that satisfy all of the following conditions: (a) the action is international and commercial in nature; (b) the action is one that the High Court may hear and try in its original civil jurisdiction; and (c) the action satisfies such other conditions as the Rules of Court may prescribe.

Clause 2 of the Bill seeks, among other things, to introduce the following sub-section to section 18D: "Without limiting subsection (1), the Singapore International Commercial Court (being a division of the High Court) has jurisdiction to hear any proceedings relating to international commercial arbitration that the High Court may hear and that satisfy such conditions as the Rules of Court may prescribe."

Within the context of International Commercial Arbitrations, recourse to the High Court is available under the International Arbitration Act. Given that such recourse to the High Court is already provided for in the International Arbitration Act and section 18 of the Act already provides that the SICC has jurisdiction where the High Court has jurisdiction, why is there a need for this amendment?

I note from the Explanatory Statement of the Bill that the amendments sought are to, among other things, "provide for clarity that SICC has jurisdiction to hear any proceedings relating to international commercial arbitration that the High Court may hear", but is this necessary given the current language of section 18D of the Act?

My concern is that the proposed amendments may be interpreted as conferring additional jurisdiction to the SICC when this is not the intention. Can it be clarified that this amendment does not seek to confer additional jurisdiction but simply to clarify the jurisdiction that the SICC already has? If so, to avoid misinterpretation of intent, can I suggest that the following language be adopted instead: "For the avoidance of doubt, the Singapore International Commercial Court (being a division of the High Court) has jurisdiction under subsection (1) to hear any proceedings relating to international commercial arbitration that the High Court may hear and that satisfy such conditions as the Rules of Court may prescribe."

Next, clause 4(b) of the Bill seeks to delete section 80(2A)(c) of the Act and substituting it with the following: "to prescribe, for the purpose of section 18D(2), what constitutes an international commercial arbitration, and any conditions that any proceedings must satisfy before that Court may hear those proceedings." Essentially, within the context of section 80(2A) of the Act, if the amendment is passed, Rules of Court may be made to define what an International Commercial Arbitration is for the purpose of the proposed section 18D(2).

The IAA already has several references to the term "international commercial arbitration". I think it is fairly clear what an arbitration is. Section 5(2) of the IAA sets out when an arbitration is international. Finally, when it comes to defining the term "commercial", the footnote of Article 1(1) of the First Schedule of the IAA mandates a wide interpretation and provides guidance as to what amounts to relationships of a commercial nature.

Given the approach that has been adopted in primary legislation, is there a need for the current amendment whereby Rules of Court may be made to set out what may constitute an International Commercial Arbitration? Is there a possibility that such Rules of Court may adopt a separate definition and create difficulty with the approach taken in the IAA?

Sir, notwithstanding the above clarifications, I stand in support of this Bill.

Senior Minister of State Indranee Rajah.

Mr Deputy Speaker, I thank the Members for their comments and support of this Bill. Let me now address their comments and queries.

I will first address Mr Louis Ng's question regarding why we are amending section 18D of the Supreme Court of Judicature Act and in relation to this, Mr Louis Ng and Prof Mahdev Mohan's questions on the jurisdiction of the SICC.

Mr Louis Ng correctly pointed out that the IAA provides that the High Court is the competent Court to hear matters relating to international commercial arbitration, and that the Supreme Court of Judicature (Amendment) Bill provides that the SICC has the High Court's original civil jurisdiction.

With respect to the wording of section 18D of the Supreme Court of Judicature (Amendment) Bill, although we have felt that it was clear, from time to time, we do get some questions as to the wording and its extent, and really, we felt that rather than have any lingering doubt about this, it would be better to clarify it and make it clear from the outset to avoid unnecessary litigation on this going forward.

And so, to reassure Mr Louis Ng, we are not extending or conferring additional jurisdiction on the SICC. What we are doing is clarifying its existing jurisdiction. This is clear from the explanatory statement of the Bill, which says that the Bill seeks to amend the Supreme Court of Judicature Act, to provide for clarity that the SICC has jurisdiction to hear any proceedings relating to international commercial arbitration that the High Court may hear.

Asst Prof Mahdev Mohan asked if the SICC will now be able to sit as the curial Court in investment arbitration award-related cases under the IAA. The intent of these amendments is for the SICC to hear IAA-related cases that the High Court can hear, subject to the proceedings fulfilling the relevant jurisdictional requirements and conditions. The conditions will be set out in the Rules of Court, which help to define the SICC's jurisdiction, as necessary. The Rules of Court are still in the process of being drafted, and Asst Prof Mahdev Mohan's suggestion will be carefully considered.

This brings me to Mr Louis Ng and Mr Murali Pillai's questions on the conditions and definitions which will be prescribed in the Rules of Court.

Clause 4(b) allows the Rules of Court to prescribe what constitutes an international commercial arbitration and such other conditions that any proceedings must satisfy. The specific Rules of Court are still being drafted. Once they are completed, they will have to go to the Rules Committee which is chaired by the Chief Justice. Whatever the eventual shape and form of the definitions and conditions, the Rules of Court, being subsidiary legislation, cannot enlarge the jurisdiction of the SICC as provided for in the SCJA, they can only serve to define or refine it.

I come now to pre-action certification. Clause 3 of the Bill deals with the removal of the pre-action certification procedure. Mr Louis Ng and Mr Murali Pillai have raised questions about the rationale for removing the procedure.

The pre-action certification was envisaged as an option that parties could use to certify, among other things, that the intended action is international and commercial in nature, and can therefore be heard by the SICC. However, the feedback received from the Supreme Court has been that the procedure has been of limited utility. And it is certainly not the case that the Supreme Court has required that the pre-action certificate be applied for in every SICC case.

Mr Pillai suggested that the pre-action certification procedure helps to promote certainty compared to the other methods for classifying a matter as an "offshore case", as it allows for the classification to be made at an early stage. The need for the pre-action certification procedure was more compelling when the SICC was first established because there was concern that parties might have been uncertain about whether the SICC even had jurisdiction or whether a case was an "offshore case" with no substantial connection to Singapore. Since then, the SICC has generated case law to clarify the requirements of an "offshore case", and there is a greater familiarity with the SICC. Potential users of the SICC can continue to direct their questions, prior to the commencement of the case, to the SICC Registry for general guidance, including on issues relating to jurisdictional criteria, with the caveat that this does not constitute legal advice. They can also refer to the SICC Practice Directions.

Let me round off my response by addressing Asst Prof Mahdev Mohan's other questions and comments in relation to the SICC. The SICC has done well as a trailblazer for dispute resolution in Asia. Since its establishment three years ago, the SICC has broadened the suite of dispute resolution options available to regional and international parties, and established a track record of producing sound and expeditious judgments.

I thank Asst Prof Mahdev Mohan for raising the issue of enforcement, which we recognise is a key ingredient in the success of the SICC. The Ministry continually works with the Supreme Court on arrangements to provide for the recognition of Singapore Court judgments, including SICC judgments, in other jurisdictions. So, for example, Singapore is a party to The Hague Convention on Choice of Court Agreements. The Convention currently has 30 Contracting Parties, including Singapore, Mexico and the European Union and its member states, except for Denmark. Last year, China signed the Convention, joining the US, Ukraine and Montenegro as signatories to the Convention. As the number of Contracting Parties to the Hague Convention grows, the SICC's reach will expand as well. Outside of treaty arrangements, the enforcement of judgments is also possible in many countries, including Singapore, so long as applicable and necessary requirements, for example, jurisdictional requirements, are met.

But these are early days still for the SICC and for international commercial litigation in Asia. I do not have on hand statistics of contracts where SICC clauses have been inserted. But we have heard, anecdotally, of high-profile users inserting SICC clauses into their contracts and are heartened by this. It will take some time, obviously, because the clauses go into the contract at an early stage and you do not know when the dispute will arise. Sometimes, it can be a few years and sometimes even decades before a dispute surfaces. So, it will take some time before we see more reference to the SICC clauses.

Just to illustrate this point about it taking some time, if you look at our success in arbitration as a reference, the SIAC was established in 1991 but it only started to see success years later. Today, of course, it is one of the top arbitral institutions in the world, and this has come about due to the changes in the international landscape and the concerted efforts from the Singapore Government and key stakeholders.

The amendments proposed in this Bill follow our consistent approach in assiduously refining the services that we have to offer. One possibility why the SICC has yet to hear arbitration-related matters could be precisely the uncertainty over whether the SICC has jurisdiction to hear IAA matters. So, we have clarified that and we expect that with these amendments, the users will find Singapore an even more attractive seat for arbitration.

We will continue to support the SICC in its efforts to educate and raise awareness to users on what it has to offer. As awareness of what the SICC has to offer and the SICC's reputation grows, users will become more familiar with the SICC and will be attracted to adopt the SICC jurisdictional clauses.

The SICC will also continue to refine and improve its services to continue to meet the needs of users. And in that respect, I welcome Asst Prof Mahdev Mohan's various suggestions, including the one on the possible "conversion" of money judgments to arbitral awards. We will take into consideration his suggestions as the SICC continues to evolve and grow. It is our belief that we need to keep our ears close to the ground so that we can move quickly and respond to user feedback, as appropriate. And so, I do welcome Asst Prof Mahdev Mohan's feedback as well as that from the businesses, the profession and other stakeholders. Thank you very much. Mr Deputy Speaker, I beg to move.

[(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. – [Ms Indranee Rajah]. (proc text)]

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

Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 4.00 pm.

Sitting accordingly suspended

at 3.38 pm until 4.00 pm.

Sitting resumed at 4.00 pm

[Deputy Speaker (Mr Charles Chong) in the Chair]

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

Minister Grace Fu.

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

Sir, the vision of the Commissioner of Charities is to nurture a well-governed and thriving charity sector with strong public support. To achieve this, the legislation governing charities and charitable fundraising in Singapore should provide a regulatory framework that fosters a safe giving environment, where there is a high level of public trust and confidence. Yet, our framework must be balanced so as not to stifle charitable work.

Since the Act was last amended in 2010, the charity landscape has continued to evolve and develop. We have therefore reviewed the Charities Act to ensure that our regulatory regime remains relevant and effective to support our vision.

As part of the review, the Commissioner consulted charities across the various sectors, stakeholders, such as the Charity Council and our Sector Administrators, as well as the public on the proposed amendments. Dialogue sessions were held with charity representatives to explain the rationale for the amendments and understand their concerns. We are heartened by the interest shown in our proposals and the general support given for them. The Bill before the House today is the outcome of our review and consultation.

Sir, the amendments proposed in the Bill seek to better protect charities and donors through the following two areas.

First, to strengthen the governance, accountability and transparency of charities and fundraisers in Singapore, and second, to enhance the regulatory powers which the Commissioner can invoke so as to maintain a high level of public trust and confidence in the charity sector. Allow me to elaborate on the proposed key amendments.

Sir, the governing board members, as stewards of a charity, are responsible for its operations and accountable to its stakeholders. Together with the key officers and employees, they have a duty to ensure proper management and administration of a charity, including the proper use of charitable assets. Our regulatory regime should therefore ensure that charities are managed by fit and proper persons who can help maintain public trust and confidence in the sector.

The current Charities Act already provides specific grounds to disqualify unfit persons from holding key positions. For instance, a person who has been convicted of an offence involving dishonesty would be disqualified from being a trustee, governing board member or key officer of a charity. The Act also specifies the circumstances under which the Commissioner can remove a person from his position in a charity.

The Bill seeks to update and strengthen the disqualification and removal regimes in the Charities Act.

First, two new grounds for disqualification will be introduced. Presently, after the conclusion of an inquiry, the Commissioner can, with the consent of the Attorney-General, remove trustees, governing board members, officers, agents or employees of charities from the exercise of their office or employment on the ground of any misconduct or mismanagement of a charity. However, only those removed in certain specified capacities, namely trustees, governing board members or key officers, will consequentially be disqualified from assuming key positions in charities. We propose to disqualify any person who has been removed by the Commissioner pursuant to an inquiry, regardless of his position held in a charity.

Next, in this climate of concern about terrorism, the Commissioner is stepping up efforts to counter money laundering and terrorism financing in order to better protect the integrity of the charity sector and its stakeholders. The second proposed new ground for disqualification expressly provides that a person convicted of an offence involving terrorism, terrorism financing or money laundering will be disqualified.

The next amendment expands the list of capacities in which disqualified persons cannot act. In addition to the current capacities that are proscribed, the new provision will disallow a disqualified person from indirectly managing the affairs of a charity by holding a key position in another entity which is a member or governing board member of the charity. This is to ensure that the disqualified person will not participate in key decision-making fora of a charity through another entity. Given this proposed amendment, section 28 of the Act is also proposed to be amended to clarify that it is an offence for a person to act in any capacity from which he is disqualified. The amended section 28 further makes it an offence to contravene an order by the Commissioner to repay moneys received while acting in a disqualified capacity.

Allow me to move on to the proposals relating to the removal regime. First, section 25 will be amended to introduce a new ground for removal, such that the Commissioner can now remove a disqualified person who continues to act as a governing board member or key officer of a charity despite the disqualification. This enables the Commissioner to intervene should a disqualified person refuse to resign from his position in the charity following the disqualification.

Second, we propose to allow the Commissioner to declare a person as someone whom the Commissioner would have removed from his position in a charity, if the person resigns before the Commissioner can order his removal.

Currently, before the Commissioner removes a person, for example, on the ground of mismanagement, the Commissioner will first give the person at least one month's notice and an opportunity to make representations. Should the person resign during this notice period, under the existing provisions, he can no longer be removed by the Commissioner even if there are sufficient grounds to do so. Subsequently, he would be able to return to a key position in that or any other charity. With the proposed amendment, we will enable the Commissioner to, by an order, declare a person as someone whom the Commissioner would have removed if the person resigns from the charity before the Commissioner can order his removal. The order will have the same effect as if the person had not resigned and was removed by the Commissioner. This will better safeguard charities and ensure that they are managed by fit and proper persons.

While we seek to strengthen the disqualification and removal regimes, we also recognise the spirit of the Yellow Ribbon Project that encourages the rehabilitation of ex-offenders. The Bill proposes to clarify that a person ceases to be disqualified once his conviction for a relevant offence is spent under the Registration of Criminals Act or if he is granted a pardon for the offence. Similarly, going forward, it is proposed that the Commissioner will not be able to initiate a removal of a person from his position on the basis of a spent conviction or an offence for which he has been pardoned.

Sir, with the introduction of references to spent convictions in the Act, the Bill also takes the opportunity to clarify the effects of removals and disqualifications under the Act. First, disqualification will stop once the ground for disqualification ceases. A person convicted of an offence involving dishonesty will cease to be disqualified when his conviction is spent. Likewise, a person who was disqualified because he was an undischarged bankrupt will no longer be disqualified once he is discharged from bankruptcy.

On the other hand, removals, unlike disqualifications, are permanent. Sir, I assure the House that any removal by the Commissioner is a carefully deliberated decision that is undertaken with the aim of protecting a charity and its assets. The permanence of removals is therefore necessary. For example, an employee of a charity who was removed by the Commissioner because he was found responsible for mismanagement of the charity's assets would be permanently barred from returning to that charity as an employee, and from holding key positions in any charity.

Taking another example, should a board member of a charity with frequent interactions with youth be convicted of having sex with a minor and is subsequently removed by the Commissioner, he would be permanently barred from returning to that charity as a board member or a key officer. This remains the case even if the person's conviction later becomes spent. This is because the reason for the removal does not cease to be a concern even after the conviction becomes spent. The person can still serve or be employed in the charity sector in other capacities.

The Charities Act, with the proposed amendments, will provide a strong yet reasonable regulatory framework, one that seeks to ensure that our charities are managed by persons of integrity and that the interests and good reputation of our charities are protected.

Sir, our regime for the regulation of fundraising appeals for charitable, benevolent or philanthropic purposes, whether conducted online or offline, serves to encourage transparency and accountability of fundraisers. It should also provide effective means to address any abuse. This is to safeguard public interest and trust, so that the public can continue to support charitable causes with confidence.

Fundraisers are increasingly going online, turning to social media and crowdfunding platforms to garner support for their charitable initiatives. The reach of such online fundraising appeals can be significant, raising substantial amounts of donations. A recent example reported in the news is the case of a baby who was born with only part of her esophagus and whose parents raised S$1.2 million, largely online, to help her get specialist surgery in the US. It is heartening to see Singaporeans responding generously to these appeals. However, the reach and scale of these online appeals highlight the need for a regulatory regime that promotes transparency and accountability so as to maintain a high level of trust and integrity, including in the online giving environment.

The Bill thus proposes to amend the definition of "fundraising appeal" in the Act to clarify and reflect the current policy position that all fundraising appeals, whether big or small, online or offline, are subject to regulation.

First, this means that fundraisers are subject to basic regulatory requirements, such as the duty to provide clear and accurate information to donors as well as to manage and use donation moneys responsibly.

Second, this means that where there is misconduct in any fundraising activity, the Commissioner can act to protect donors, for example, by prohibiting or restricting that activity.

We have consulted the public and held dialogues with charity representatives on the proposed amendment and have explained our policy position. Like them, we are mindful of the need to refrain from over-regulation, which could stifle charitable efforts as well as charitable giving. I would like to assure the House that the regulatory requirements placed on fundraisers will be reasonable and fair, taking into account the nature and size of the appeals.

We will review our fundraising regulations to minimise administrative burden on small-scale and private fundraising efforts, in particular, appeals for local causes, and exempt them from some of the requirements. For example, we will not expect detailed accounts to be maintained for a small fundraising effort conducted among family and friends for a local cause.

On the other hand, charities and institutions of a public character (IPCs), who count fundraising activity as one of their core functions, will be subject to the regulatory requirements of maintaining proper accounting records and keeping fundraising expenses within the specified limits. These institutions, which enjoy tax benefits for their charity and IPC status, have a public duty to ensure high standards of accountability and good governance in managing their charitable funds.

In relation to the online giving space, I would like to share with the House that we are co-developing with the major crowdfunding platforms in Singapore an industry Code of Practice. The Code will set out recommended practices for fundraising platforms, so that they can be trusted intermediaries for donors and beneficiaries in fundraising for charitable, benevolent and philanthropic purposes.

Sir, most of our charities today file their annual reports and financial statements electronically with the Commissioner via the Charity Portal. These submissions are published online for public access. The proposed amendments to section 48 will formalise this current practice by allowing regulations to be made to mandate the electronic filing of annual submissions and applications. This is part of our efforts to enhance transparency by making information on more charities available online.

As we make this change, we will support the charities in electronic filing. Charities can tap on our voluntary welfare organisations (VWOs)-Charities Capability Fund to purchase computers. We are also working with partners to set up shared services to support smaller charities. Charities will have at least two years' notice before the mandatory electronic filing takes place.

The Bill also introduces and amends various provisions to promote compliance with our regulatory requirements and ensure consistency in the penalties prescribed. Section 18 of the Act is proposed to be amended to make it an offence if a charity, without reasonable cause, fails to preserve accounting records, financial statements and annual reports for five years. The Bill also clarifies that there does not have to be a persistent default before an offence is committed under section 18.

Currently, contravention of some of the IPC regulations result in a penalty that is lighter than that incurred by non-IPC charities. The Bill proposes to amend section 40C of the Act to allow consistency, across both IPC and non-IPC charities, in the penalty for contravention of regulations, other than for wrongful issuance of tax deduction receipts. For that, the existing financial penalty will be retained.

The Bill also proposes amendments to align the penalties for serious offences under the Act. For example, the penalties for a person acting whilst disqualified and for supplying false or misleading information to the Commissioner have been increased to meet the current levels of penalties prescribed for other offences of similar severity, such as for falsely holding out as a registered charity or IPC.

Next, on enhancing regulatory powers of the Commissioner to safeguard public trust and confidence. Allow me to move on to the next set of amendments that seek to enhance the regulatory powers of the Commissioner.

At present, after an inquiry against a charity has been instituted and that the Commissioner is satisfied that there is a need to protect the charity, he may, with the consent of the Attorney-General, suspend a person from the exercise of his office or employment with the charity. However, the suspension is for a maximum of 12 months and this has proven to be insufficient in some cases. For example, in complex cases where investigations into financial transactions over an extended period of time are required, the inquiry may take more than a year to complete. The Bill therefore seeks to protect the charities by allowing the Commissioner, with the consent of the Attorney-General, to extend the suspension beyond 12 months, up to 24 months.

Next, the Bill seeks to enable more timely intervention by the Commissioner. Section 39B of the current Act allows the Commissioner to prohibit or restrict a fundraising appeal in certain circumstances, such as when the appeal is found to be improperly administered. However, such prohibition and restriction orders can only be issued after the completion of investigations. As investigations may take some time, the donating public may be exposed to questionable fundraising activities in the interim.

The proposed amendments to section 39B will allow the Commissioner to order the suspension of a fundraising appeal for a period not exceeding two years, pending the completion of an investigation. This can be done if the Commissioner has reason to suspect, for example, that the appeal is not being properly conducted. The Bill also proposes to make it an offence if the suspension order is contravened. The suspension order is akin to a Stop Work Order while investigations are ongoing, and can be followed up with a prohibition or restriction order if irregularities are indeed found.

Lastly, in relation to the Commissioner's powers to call for documents and information, the Bill proposes to amend section 41A of the Act to clarify that the Commissioner can require a person to provide information and documents that are not only already in the possession or under the control of the person, but which come into the possession or under the control of the person at a future point in time, within a period not exceeding two years after the order is made. This would facilitate the Commissioner's work, such as when conducting ongoing monitoring of a charity under investigation, as there will not be a need to raise a new order each time new documents or information become available.

Sir, in the review of the Act, we have affirmed that the charity sector is an integral part of the Government's "Many Helping Hands" approach. Charities play an important role in our society by meeting the needs of underserved communities, providing essential services and championing causes close to our hearts. They are instrumental in building a caring and cohesive society. It is only with strong public support that the sector can thrive and continue to benefit our community. Reputation is key to the sector, and one bad apple can erode public trust and confidence in the whole sector. The amendments that we are making to the Act, are therefore part of our efforts in ensuring a charity sector that continues to enjoy the trust and support of the community.

We are committed to striking the right balance in maintaining a sound and effective regulatory regime that ensures trust and yet, facilitates the good work carried out by the sector. The enhanced powers of the Commissioner that are proposed by the Bill will not affect the vast majority of charities and fundraisers. These powers will only be used as a last resort or when there is an urgency to act for the protection of charities and donors. Checks and balances are also in place to ensure that these regulatory powers are exercised fairly.

As we enhance our legislation, we will continue to build capacity to strengthen governance across the sector. This will be through the continued partnership between the Government, charities, stakeholders and the community. Together, we will achieve our vision of a well-governed and thriving charity sector with strong public support. Sir, I move the Bill.

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

Ms Chia Yong Yong.

Mr Deputy Speaker, first, I would like to record my thanks to the Minister and the Commissioner, as well as the Ministry for Culture, Community and Youth (MCCY) for moving the amendments. The amendments to the Act are timely. The amendments underscore the importance of upholding the integrity of charities, inter alia, management, reporting and fundraising.

Sir, integrity is more than an honest intention and more than a good heart. It entails a robust set of procedures to ensure compliance, a discipline within the organisation to comply with the procedures, a conviction ingrained in management, staff and board that we are accountable to our funders, our sponsors, our employees and, above all, our clients and their families.

Therefore, I support the Bill, particularly in the broadening of the powers of the Commissioner to protect charities and the enhancement of penalties for certain types of non-compliance. Notwithstanding, I seek a few clarifications from the Minister.

Whilst I support the amendment to section 16, I seek clarification as to why subsections 2 and 3 are sought to be amended to apply to "a registered charity or an exempt charity", as opposed to the other sections, such as sections 12 and 13, which simply apply to "charity".

In principle, I also support the proposed amendments to section 25. However, would the Minister consider making provisions for the extension of the suspension period between 24 months in complex cases, whether exercisable at the discretion of the Commissioner or upon application to court by the Commissioner?

A second clarification sought in relation to section 25 is: whether the Government had considered broadening the scope of section 25 subsection 12 beyond subsection (2)(iv), (v) and (vi), to include compliance with other orders of the Commissioner?

In relation to section 25A, in respect of which I note there is no proposal for amendment, can the Minister clarify the basis for the subsection, which provides that it does not apply to an exempt charity? The application of subsection 5 results in an anomaly in which a key officer who has been removed as such from a registered charity may also be removed as a member of the charity, but a key officer who has been removed as such from an exempt charity may remain as a member of the charity. Considering that exempt charities are universities, educational institutions, hospitals or religious bodies and so on, we would expect that exempt charities be held to equal, if not more stringent requirements.

In relation to suspension, removal or disqualification orders, would the Minister consider making express provision prohibiting acting by proxy and making it an offence for persons to act by proxies?

Finally, in relation to the proposed section 43(7), would the Minister consider providing for service under this subsection to be effected only upon the person's prior written consent?

Sir, having stated my support for the Bill, it is my hope that the next review of the Charities Act will be more comprehensive, more visionary, bolder, catalysing greater vibrancy in the charities sector, for the winds of change are upon us. Our current charities model will not hold. The socioeconomic landscape of Singapore today is beyond what our parents and grandparents envisaged when Singapore became independent, and the future landscape will be beyond what our current charity models can hold.

A rapidly greying population, additional touchpoints and enhanced medical expertise in early intervention, diagnosis and treatment, lifestyle challenges, increased stress points in familial and communal relationships, greater financial uncertainties – there will be an increasing number of people requiring support with more complex needs and more interwoven issues. The demands will be real and, in some cases, loud.

The challenges facing us today are daunting: more clients to be served, more complex needs, more complex issues, more compliance requirements, higher public expectations, higher operating costs, limited revenue, limited technology capabilities, limited manpower and limited funds. In four simple words: more needs, less resources.

I surmise that our future challenges would, in essence, be similar but accentuated and, possibly, with a different complexion. How shall we overcome these challenges? We need to innovate. We need to change our charity mindset. We need to change our charity models before it is too late.

Whilst I do not have the solution, I have a few suggestions.

First and foremost, we need to professionalise the sector. Although the role of volunteers remains integral to the social service sector, the Singaporean society has developed beyond the early days when charities could be run solely by volunteers. The journey of "professionalisation" will be different for every organisation but it must, in every case, begin and it must never end.

Competent, compassionate and committed professionals are key to the welfare of our clients. It is easy to relate this statement immediately to the frontline professionals providing direct services to the clients, such as therapists, social workers, counsellors, teachers, job coaches, medical and allied health workers, and so on.

The truth is, behind them are quiet troops working to ensure that the organisation functions efficiently, meets compliance requirements and governance standards. Quiet troops cleaning the premises, raising funds, conducting public education, engaging community partners and supporting the frontline professionals. Our back-end supporters, they are a critical part of the team, without whom services to our clients will suffer to the ultimate detriment of our clients.

It is in the interests of our clients that we attract, retain and develop our professionals and our employees. To do so, we must treat them fairly, and I refer specifically to remuneration. This is an issue also recognised by the Government and the National Council of Social Services (NCSS). But this is a difficult issue for some members of the public.

Those who work in the charity sector, they too have families, they too have aspirations to provide for their families. Please consider their equity in this matter. It is not reasonable or fair to expect those who serve in the charities sector to take a pay cut relative to their peers. To the public, I request that before we next argue that every cent of all donations must go to the beneficiaries, take a look at our own little child, and ask if Mommy or Daddy should take a pay cut for no reason other than that Mommy or Daddy works in the charities sector. We need good people in the sector and we need to pay them well.

Secondly, we need to tap on the readiness, expertise and skills of our volunteers. They are the ones who started our charities. They are still with us today. They bring with them passion, compassion and skills to the organisation that they serve. Let us be innovative and creative in the way we work with our volunteers. They can supplement our manpower without an increase in our Expenditure on Manpower (EOM). They can provide expertise outside that of our organisation's own professionals. They can inspire our professionals. Give volunteers opportunities to contribute meaningfully, give them a sense of pride as they serve.

Thirdly, collaboration within the sector. According to the 2016 Annual Report of the Commissioner of Charities, there were 2,247 registered charities in 2016, of which only 653 are IPCs. In 2015, 46.2% of the registered charities had annual receipts of less than $250,000. So, almost half of all charities are small charities.

Setting up charities, however small, must continue to be encouraged. This is a good reflection of a healthy, spontaneously caring society, one that is willing to give. A small charity is cosy, warm, agile and more responsive to the needs of its clients. Understandably, however, small charities may have limited resources.

Looking at the numbers, I cannot help but wonder if we could collaborate and what greater impact could be achieved if we collaborated for the benefit of their clients. Collaboration requires us to be vulnerable, for we share our strengths with others. But it will strengthen us as a whole. Collaborate we must, for our clients and, indeed, for the sake of our own organisation. Let us work together towards cohesion in the midst of our diversity.

Fourthly, adopt low tolerance towards low standards. Our clients deserve no less. They and their loved ones have put their well-being in our hands. They trust us to make the change for them.

Our employees deserve no less. There is pride and dignity in their work. We insult them if we expect less of them than we do non-charity employers. They deserve challenges, opportunities and support to grow, to flourish, to accomplish and to serve. Lower tolerance for lower service standards.

Our funders and sponsors deserve no less. They have shared their resources with us. They have believed in our cause. They are walking the journey with our clients and us. Imposing high standards on ourselves is our way of showing our respect to them.

Singapore deserves no less. The community and the Government have rallied around those who need support. We, the charities, should be another pillar of support. We must not continue to be a sector dependent on support.

This brings me to my fifth point: the sustainability of VWOs. I wish to emphasise that this point is limited to the context of VWOs. By a conventional approach, we continue to look within ourselves to streamline work processes, better deploy our personnel, increase productivity and, hopefully, reduce reliance on donations. This conventional approach, while necessary, is not sufficient to see us into the future. Charities are defined as not-for-profit organisations. Must it always be so?

The current charities model relies heavily on Government funding and donations. A very small proportion of the revenue is derived from very low fees or very low revenue from sheltered enterprises, and most sheltered enterprises are loss-making.

The increase in Government funding and donations over the years cannot and will not be able to match the growing rate of needs. Think on this – even the best managed organisation can potentially fall into unsustainable deficit. Can we take that risk? If we fall into an unsustainable deficit, only two things can happen: a bailout because we cannot afford to fail; and that would entail funds from the public, more likely through Government rescue, or a shutdown resulting in a displacement of clients, loss of employment and disruption in the sector.

How much of a risk can we stomach? Here, I submit it is time to change the charities model. Whilst Government funding and donations remain desirable, they should no longer be relied upon to form a significant portion of our receipts.

I have a vision of a VWO that is firmly rooted to its vision, committed to serve all clients, regardless of status and wealth but it also engages in revenue generation with revenue generated being used to execute our mission and our vision. It practices price cross subsidies. Not a new concept, but it is using fees from those who can afford to subsidise fees of those who cannot. The means testing criteria and methodology is updated to align with this key model, leveraging on its competencies. It runs additional programmes for profit generation. It goes regional, it exercises prudence in undertaking appropriate risk management assessment, takes actions to hedge against reasonably anticipated risks.

All throughout, it remains true to its commitment to serve its clients. This is my vision for a future VWO.

If we succeed, we reduce our reliance on public funds. If we fail, we go back to reliance on public funds. But we need the support and understanding of the public that profits are generated for charitable purposes. We need the support of the Government not to remove our IPC status or compromise our charitable status on that count. I trust we can work out a feasible model with sufficient safeguards and sufficient latitude for enterprise.

Such a model could be seeded by donations or social impact bonds. We can consider social impact bonds. It is new to us but we can work on that. But it is not a model that must be sustained only by donations.

Sir, we must not run this model like a conventional social enterprise. If we do not operate more profits, we are doomed to fail. I am arguing, submitting for the need to build a model that is financially sustainable to take us into the future. A model that requires us to rethink and re-examine the requirement for charities to be not-for-profit.

Sixth, ownership of our destinies. It is difficult for us to live with little. Compound that difficulty with little or no education, a disability or more, illnesses, failing marriages, single parenthood, difficult children, ailing parents, estranged relations, difficult employment situations and difficult community situations. Is it surprising that many of us spiral downwards, physically, emotionally, spiritually and financially?

We need help. The Government and the charities, rightly, must step in to help. Intervention must be timely and decisive. The support must be relevant, effective and empowering.

Such intervention and support can, at best, only solve an immediate problem. We must, in the long run, empower and encourage our people to take ownership of their lives so that they can break out of the vicious charity cycle and, in turn, reach out to support others. Instead of scurrying for additional resources to support an increasing number of people, we build a strong network within this community to support each other, more than what money can buy.

Finally, Mr Deputy Speaker, Sir, it is timely to consider renaming ourselves. From a relational perspective, "charity" or "welfare" connotes the dispensation of help from one to the other. It creates a difference in status and widens the social gap. It accentuates the chasm in mobility, socially, physically, economically and politically. It underscores the vulnerability of the person. It is liable to create a sense of low self-worth and helplessness in the other party.

The term "voluntary" masks the need for professionalism in service delivery and in the sector. There is, indeed, growing sentiment on the ground to do away with the "VWO" label. This conversation brought to fore by NCSS in 2016 should continue. What we call ourselves shape what we think of ourselves and shapes our aspirations. A new name, a new future.

In conclusion, Sir, the winds of change are upon us. It is not enough to trim our sails. It is time to change our vessels. I request the Government, our stakeholders and sponsors and members of the public to support us.

Mr Alex Yam.

Mr Deputy Speaker, it is difficult to follow after such a passionate speech, but I shall attempt to do so.

Mr Deputy Speaker, every charity claims to do good work but not all charities are good charities. Some are mismanaged and fail to deliver what they promised to their clients and their donors.

How would you define a charity as a good one? Good governance and management, competence and transparency in the way it handles its operations and in the way it disburses its funds to its clients and serves the community.

I therefore welcome and support the amendments to this Bill. However, I have a few clarifications which I hope the Minister could clarify. First, the objectives of the proposed amendments are rather broad-based, that is, (a) to better protect charities and donors by strengthening the governance, accountability and transparency of charities and fundraisers and (b) enhancing the statutory powers of the Commissioner of Charities to maintain public trust and confidence.

Charities generally work for the good of the society, and they work together with State institutions to ensure that funds are channelled to the right cause or beneficiaries. Without charities − good charities − our society would be poorer.

As Singapore and Singaporeans become more affluent, the culture of paying it forward and giving back to society is gaining greater traction. It is heartening, therefore, to note that fellow Singaporeans are stepping up to help those who have fallen through the cracks and those who are in dire need.

Media reports of Singaporeans coming forward to help and assist, both in Singapore and overseas, is heartwarming and it could take many different forms. There was a recent newspaper report of a senior citizen who was sponsored on a trip to Paris simply for him to see the Eiffel Tower by a very generous but anonymous donor. He came back realising, however, that his own plywood version of the Eiffel Tower that he had spent many months making was, in fact, structurally incorrect. Amusing though the story may be, it highlights the fact that many Singaporeans are willing to give to different needs and different wants. They also do not want to be made known that they are the donors. This, in my view, is perhaps the mark of an altruistic donor.

But it can also lead to abuse by unscrupulous canvassers of donations and the recipients themselves. Perhaps, even worse, the situation may be worse if the person or persons in charge of collecting and disbursing funds is/are caught with their hands in the till!

As an example, many of us in this House, perhaps, have worked with an organisation called Project Awareness, a social initiative for the needy, and they came under the spotlight about four years ago. At that time, its project coordinator, an undischarged bankrupt, had his bank number listed as a repository for donations. Rightfully so, the Commissioner of Charities stepped in at the right moment and made sure that Project Awareness set their house in order, and issued an order to stop them from canvassing for funds while they were rectifying their internal structures. Today, Project Awareness continues to do good work and has a professional team managing their funds. It is, therefore, timely that we ensure that our charities and fundraising efforts are well run, and with their stakeholders exercising and executing their fiduciary duties as per the rules and regulations.

I welcome the amendments, which have been tweaked to prevent person or persons of dubious standing and with integrity issues from holding key positions or indirectly managing the affairs of another charity-linked entity. In this respect, and in view of the global security climate, charities and persons associated with them who are convicted of terrorism or of its financing and/or money laundering, will be disqualified from positions of authority.

However, I would be grateful if the Minister could share with the House if there have been such cases and how many have come under the Ministry's view? How much has been collected by these so-called charities? I am asking this because many Singaporeans may have contributed to such charities or initiatives unwittingly, borne out of emotion and parochialism. Those preying on the naivete of Singaporeans who come forward to share what they have, should be taken to task. Trust should not be penalised.

Fundraising appeals are evolving as quickly as the social landscape. On 31 December, The Sunday Times reported that crowdfunding sites will be issued with a code of practice, and this the Minister had mentioned earlier. But I seek clarification on when, which date this will be specifically issued, and how much force it would have under the law to regulate these sites. By doing so, it will ensure transparency and accountability because much-needed social values when soliciting funds from the public must be upheld.

It will also be made incumbent upon recipients to declare that they are not receiving state funds to alleviate their plight under the new guidelines. A recipient who is getting crowdfunding support in addition to state support may deprive another more deserving client from obtaining funds. That is where accountability and verification of facts come in handy.

The Commissioner of Charities, Dr Ang Hak Seng, had stated very clearly, "If you declared that you did not get Government aid but you did, it is a misrepresentation. You did not tell people the whole picture when you asked for donations. If your need is fake, you bet I will look into the matter." By according the Commissioner of Charities more power, misconduct will and can be prevented, and the people's trust and faith in their fellow Singaporeans will be preserved, and the willingness to share and give more will become more widespread and the Singapore society, in general, will become all the more richer. Thank you very much and I support the amendments.

Mr Dennis Tan.

Mr Deputy Speaker, I would like to declare my interest as a board member of the charity, the WP Community Fund. Mr Deputy Speaker, I support the proposed amendments relating to the disqualifications and removal of persons involved in charities. I have some concerns regarding the changes to the definitions and coverage of key officer and fundraising appeal, which are important.

First, on the definition of key officer. Mr Deputy Speaker, Sir, regarding the proposed expansion in the definition of key officer, I would like to ask the Minister whether all members of the governing board of a charity will be considered as key officers. I am concerned that the onerous liability imposed by the amendments will discourage people who are wanting to serve in charities, especially smaller charities where management resources may be limited, and that, in turn, puts pressure on people wanting to serve. How will the Ministry allay such fears and encourage more volunteers to step up and serve in charities, both big and small?

I next move on to fundraising appeal. Mr Deputy Speaker, I go on to the change in the definition and limits on fundraising appeal in section 39. Under the amendment Bill, the listing of definition of fundraising appeal to members of the public will be deleted and replaced by a new set of definition. It seems to me that the existing scope of fundraising appeal to members of the public will now be expanded quite considerably, beyond the members of the public. In the explanation note to the Bill, the Ministry cited a new example of an appeal by an unincorporated association to its members. The existing law applies to an appeal to members of the public and does not cover private appeal or donations. However, the explanation note in the Bill stops there, without any further elaboration. It does not elaborate adequately on its expanded coverage.

I have some concerns with this change of definition and coverage of fundraising appeal, especially the extent of its scope of coverage. It appears that the coverage may now extend to unsolicited donations, private donations or fundraising in schools, associations and religious organisations.

First, unsolicited donations – the Ministry's comments to public feedback during the public consultation process. The Ministry also stated that this can now include unsolicited donations and appeals to grant-making philanthropic organisations. The explanation note to the Bill does not, however, confirm this or say anything about it. Unsolicited donations, as its name suggests, are donations made purely voluntarily and without any initiative or action on the part of the charity. It is therefore extremely odd to include such donations as part of fundraising appeals.

I would like to ask the Minister why there is a need now to include such a new category into the definition such that its coverage actually exceeds its literal meaning. Is there any particular recent incident which caused the Ministry to think that the expanded coverage is absolutely necessary? If so, will the Minister share with the House some of the details of the incident and how they led the Ministry to propose these changes?

My Deputy Speaker, I would also like to know from the Minister what changes the Ministry will be making to the fundraising regulations, which will apply specifically to unsolicited donations.

Next, grant-making philanthropic organisations. As regards to grant-making philanthropic organisations, may I clarify with the Minister how the amendment affects them and whether we are talking about such organisations making appeals for donations to fund the grants or assistance they render to members of the public?

Next, private fundraising within schools, associations and religious organisations. The Ministry stated in their comments to public consultation feedback that they intended for fundraising to include private fundraising activities within schools, associations and religious organisations. So, it seems that besides grant-making philanthropic organisations, the coverage will be extended to other non-charity fundraisers. The Ministries said that it is important for the Commissioner to be able to stop improper fundraising.

Mr Deputy Speaker, I do not doubt that such new regulations may be able to enable the Commissioner to be in a better position to stop improper fundraising. However, I am concerned that this may also discourage many sincere and well-meaning Singaporeans in their different organisations from raising funds for very good reasons, not to mention the resulting bureaucratic hooks that will be imposed on non-charity fundraisers. Will the Minister also clarify whether this new definition of fundraising appeal and the fundraising appeal regulations to be amended will apply to all types of fundraising by schools, associations and religious organisations, or whether it will cover only a certain limited mode of fundraising? For example, will it apply to religious organisations raising funds by auctions, for example, as we often see during temple or seventh-month dinners?

Next, small fundraising efforts. The Ministry stated in their comments to public feedback during consultation that the Ministry would be reviewing fundraising regulations to make sure that the requirements will not apply to small fundraising efforts. I am not sure if I heard the Minister correctly in her speech just now. May I ask the Minister to elaborate a bit more on the limits of small fundraising efforts, and how small fundraising efforts apply to fundraising in schools, associations and religious organisations, whether they be mosques, churches or temple organisations?

On crowdfunding regime, given the new expanded definition of fundraising appeal, I would also like to ask the Minister to confirm whether the new regulation, the new regime, also applies to online crowdfunding. There are amazing Singaporeans who raise funds and gather volunteers online to carry out acts of charity and kindness, such as providing meal vouchers, food, daily necessities or supermarket vouchers to elderly folks or households who may be struggling financially. I read from press reports that a code of practice for crowdfunding platform will be launched this month by the Commissioner of Charities. But it seems that it will not be mandatory. I do hope that however well-meaning this code may be, the code or any intended regulation will not stifle or discourage Singaporeans from continuing their acts of charity through crowdfunding.

On to my conclusion on the fundraising appeal point. It appears to me that significant amendments will need to be made to the current subsidiary legislations on fundraising regulations to cover the expanded scope of fundraising appeal. I think we should know now, if not later, that sufficient details about what the impending regulatory changes are. I would have preferred that this Bill would have shed more light on these details or the explanatory note in the Bill. The House should, in fact, assess this Bill with the changes the Ministry intends to make in the subsidiary legislations to know what is the ultimate package that the public can expect. Overall, without the benefit of looking at the fine print changes in the fundraising regulations, I am concerned whether the change in the definition of the coverage of fundraising appeal will make it too onerous for charities, especially smaller charities with limited resources or volunteers in these charities, as well as non-charity fundraisers.

Mr Deputy Speaker, I would also like to take the opportunity to ask the Minister for her view on the continuing relevance of the rationale of the 80:20 ratio for persons wishing to conduct fundraising appeals for foreign charitable purposes where 80% of the funds raised must go to a charitable purpose in Singapore. How does the Government see that such a ratio will continue to benefit charities or any organisation raising funds for a foreign charitable cause? How does the Government weigh that against the benefit of our locally-based charity helping to raise funds for a worthy foreign charitable cause? I am aware that there are exceptions to this rule, but for those who are not excluded from the rule application, is it time to review this requirement or just the current ratio?

My Deputy Speaker, in conclusion, I agree that it is good to encourage good governance among our charities, in our fundraising efforts, for example. At the time, I believe that we should also be mindful that requirements are not too impractical or onerous that they create additional or unnecessary burdens on our charities, their staff and volunteers as well as non-charities and well-meaning Singaporeans.

Ms K Thanaletchimi.

Mr Deputy Speaker, Sir, I rise in support of the Bill. The amendments will bring about stronger regulation of charities in order to gain better public trust and confidence. The requirement for accountability would help to ensure that all fundraising activities are subjected to thorough scrutiny and abuses as well as exploitations are avoided.

Sir, though I support the Bill, I would like to seek the following clarifications.

Is there any way to make the usage of the funds more transparent, as the Minister has said it will be regulated, especially for Institutions of Public Character (IPCs)? How can we encourage donations among Singaporeans for a more regulated cause as compared to crowdfunding which is via Internet in an uncontrolled form? For charitable organisations, is there crowdfunding ethics developed for greater transparencies and improved public trust that the funds raised are put to good use and for the intended purpose?

Earlier, Minister had shared there is going to be a Code of Practice on crowdfunding. I welcome this and also wish to know when this will be implemented.

With reference to clause 8(c) section 25(4)(4A) and clause 9(9) section 28, have there been previous cases or incidents where disqualified persons still remained in key positions and have there been any adverse impact or misuse of donations? If so, how have these been managed? It is natural for public to be disappointed and alarmed to hear that such disqualified persons still remain in those key positions or continued to assume key positions in one or more charities without being removed from the position or barred from being in one. And I welcome the changes in this Bill.

In clause 9 section 27(4A), it is laudable that our society is gradually being receptive, inclusive and embracing ex-offenders by giving them second chances, in support of the Yellow Ribbon Project initiatives. However, will there be any exceptional provision where such persons will be barred or disqualified forever, even if their charges are spent?

Section 9(27)(1A)(II) is relating to anti-terrorism. There have been some worrying perceptions on the ground about charities acting as a conduit for money laundering and terrorism, and this may be unfounded. Perhaps, one should take note so as to not overly mention religious charity groups in its publicity, as opposed to other charity groups.

In conclusion, on the whole, this timely change to the Charities Act is a move in the right direction, and I fully support the Bill.

Mr Melvin Yong.

Mr Deputy Speaker, I stand in support of the Bill, which serves to strengthen the governance, accountability and transparency of charities and fundraisers as well as broaden the Commissioner of Charities' (COC) statutory powers to maintain a high level of public trust in the charity sector. However, I would like to seek some clarifications on the Bill.

First, I would like seek clarification on the definition of a "fundraising appeal". With the increasing popularity of online donations, are online crowdsourcing appeals that leverage social media or other online platforms considered as fundraising appeals as defined in the Act? If so, how does the Government regulate such online appeals and ensure that the monies donated do end up helping the intended beneficiaries?

The Charity Council chairman, Mr Gerard Ee, very aptly pointed out in a news article in August 2017 that there are "practical difficulties" for the COC to read through every post online to suss out suspicious campaigns, making it difficult to uncover groups that misuse donations.

Therefore, I would like to ask the Ministry if there were any past cases where the COC had successfully taken action to stop suspicious online campaigns. Are there statistics on how many of such online fundraising campaigns turned out to be misrepresentations or half-truths? Are donors able to get their money back if the cause that they had donated to turned out to be misleading or, worse still, untrue? Would the COC consider establishing a whistleblowing channel for the public to report possible suspicious online campaigns on a timely basis?

Next, I would like to touch on the proposed mandatory electronic filing of annual submissions and other regulatory submissions by charities. While I understand that most charities are already filing their annual submissions electronically via the Charity Portal, I would like to ask how many charities have yet to embrace e-filing. Are there any plans to assist these charities in e-filing before the mandate kicks in?

Mr Deputy Speaker, I am in favour of the proposed amendments in the Bill, which give the COC enhanced statutory powers. However, I am concerned about the impact on the charity as a whole, and more importantly, its beneficiaries if the charity is under investigation due to a handful of rouge individuals. Under the proposed amendments, the COC would be allowed to suspend any fundraising appeals if there is reason to suspect that the appeal is not conducted properly. Does such a clause target the entire charity, causing the organisation to freeze its operations whilst investigations are ongoing? Or will the COC be able to isolate the rogue individuals involved in the suspicious fundraising appeal and suspend them from participating in the charity while they are being investigated? The latter scenario would enable charities to continue to function if there so happens to be a bad apple in the barrel.

In closing, I would like to say that, with the expanding popularity of online fundraising appeals, it is timely for us to review the Charities Act to safeguard the public's trust in the charity sector. While the recent World Giving Index showed that Singaporeans are caring and generous, the sector will need to be well regulated to ensure that we Singaporeans do not and should not grow disillusioned with giving. With that, Mr Deputy Speaker, I support the Bill.

Ms Joan Pereira.

Mr Deputy Speaker, the amendments to raise the requirements for accountability and transparency for charities is timely. No one will dispute the need to disqualify persons with convictions for offences involving fraud and deception.

However, I hope the Ministry would take a firmer stance on what I would call "soft deceptions", that is, efforts to paint misleading pictures of persons or families in distress by charities or social organisations so as to attract more funding. More often than not, whatever information that is not shared in these appeals are actually the vital information. Very one-sided stories about the potential recipients are painted. Potential donors are given the impression that Government agencies and existing help groups are not reaching out to assist such families, which may not be the case.

This should not be taken lightly for a few reasons. First, given the limited amount of resources available, such practices end up diverting the necessary funds and resources from truly needy parties. Second, deliberately or not, they cast doubt on the work and integrity of our Government help agencies and have the potential to undermine them. When people do not have faith in our national help network, they will hesitate to approach them for help. This is clearly undesirable, as any delay could push families in distress into disastrous predicaments.

Social service organisations are an important and integral part of our help system but they must be on the same page as the Government agencies doing similar work. We must require and enable them to perform the necessary background checks on those they desire to assist.

The code of practice for crowdfunding platforms, which will be launched soon, will require such websites to verify the information provided by potential recipients. Very recently, a homeless man in the United Kingdom was hailed as a hero in the aftermath of the Manchester suicide bomb attack and well-wishers raised £52,000 for him on a popular crowdfunding website. It was later revealed that he was a thief who stole from the victims, and the full amount of donations were to be refunded to the donors. If these websites were to be able to verify the information, the above may not have happened.

We should consider making the central databases at MSF and Community Development Councils (CDCs) available to approved and qualified personnel at registered charities. We need better coordination, exchange and sharing of information between both Government and non-Government help entities. However, what about such sites, especially if they are based overseas?

In addition, we should implement stricter criteria for the use of names and photos in connection with fundraising. There should be clearer regulations for how identities and photos can be used in appeals and publicity materials. It is common to see charities using photographs of celebrities or even politicians to boost support for their work. However, support for a particular event cannot be implied as support for fundraising efforts of a charity.

Next, to strengthen the governance of our charities and fundraisers, the Commissioner of Charities should be provided with more powers to assist with the running of a charity in distress, particularly when key personnel have been suspended or removed, or when they are in the midst of internal tussles.

During such crises and power struggles, the operations of the organisation suffers and, expectedly, when things become public, donations will drop. These organisations serve important functions, benefiting many people through the disbursement of rations, healthcare, free meals, bursaries, milk powder, money and so on.

We should have a framework and the resources to help charities experiencing temporary problems to at least continue some of their basic operations so that the people receiving help will not experience any disruptions. There should be time limits imposed on when certain impasse must be resolved, beyond which the Government is allowed to step in. For better governance, the roles and responsibilities of office bearers or key personnel should be clearly defined so that there are curbs and limits on potential abuses.

Lastly, I request for greater control over phishing appeals for donations on websites which can be accessed from Singapore. Technology, such as data analytics and tools to detect how long a user's eye dwells upon certain areas of a website, is being used to help websites push certain advertisements, including donation appeals, to social media users. What measures does the Government have to reduce the abuse of such technologies which may prey on the goodwill of Singaporeans? I conclude with my support for the Bill.

Ms Denise Phua.

Deputy Speaker, Sir, I rise in support of the Charities (Amendment) Bill. I declare that I sit on the board of two large-sized charities serving in the capacity of a volunteer. The CDC of which I am Mayor is also classified as an IPC governed by the Charities Act.

The charity landscape. There are almost 2,300 registered charities in Singapore in 2016. Registered charities are exempted from paying income taxes and property taxes pertaining to properties used for that charity.

The charity landscape is not homogeneous. Charities come in various shapes and sizes. Out of the registered charities in Singapore, about half or more than 1,000 are religious organisations, such as churches and temples. One in five, about 18%, support social and welfare causes and others in health, healthcare, education, sports, animal welfare and others.

Let me give us a sense of the size of the charity sector. The overall annual receipt, that is, Government grants, donations and fees of the charity sector, is $16.4 billion. Out of this, $2.7 billion are donations by the public. This $2.7 billion donation pie is larger than the size of the current budget of MSF, which I know is about $2.5 billion.

The importance of the charity sector cannot be understated. Many of them play a key role in our society. Some of them partner the Government in providing essential services from education to health to social assistance. Some fill the gaps where public goods are lacking. The more organised and larger religious groups fill the spiritual needs of the lives of citizens, command influences over their congregations and play a role in religious harmony in a multiracial, multireligious society, such as ours.

There are several key trends that I have observed in the Singapore society that calls for higher involvement of and greater attention to the charity landscape. These key trends include: (a) a rapidly ageing population resulting in higher demands for healthcare and other services, and fears of retirement inadequacy; (b) the breaking down of the traditional assumption by both children and parents that question if family should be the first port of call when needs arise in a family; (c) the rise in non-traditional family make-ups, such as transnational family members, single parents either widowed, divorced or unwed; (d) the rise in mental health issues; (e) rise in technology and the prevalence of social media as a way of life, therefore online appeals and cashless transactions are some examples; (f) higher societal expectations as a result of a better educated and vocal population; and (g) the rise of religiousity, religious fundamentalism and risk of terrorism in a Singapore that is home to at least 10 religions.

Out of these societal shifts in Singapore arise new causes and areas of passion for which new charities support. There is also a notable rise in the number of large-sized charities with more than $10 million income and a rapid rise of the number of new charities seeking registration, both as charities and as IPCs. Even traditional philanthropists have chosen to register their own charities to tap on public funding and tax-exempt benefits to further their own pet causes.

Along with the rise in the number of charities are also high profile controversial cases, starting from the 2005 National Kidney Foundation (NKF) saga, Ren Ci and then the City Harvest Church and, recently, the Bone Marrow Donor Programme. This has given rise to public concern and higher scrutiny by the charity watchdogs and most likely contributed also to the review of the Charities (Amendment) Bill today.

Four focus areas. Now, after studying the provisions in the Bill, I would like to raise four areas for the Ministry to consider. One, an Industry Transformation Map; two, on enforcement; three, on the protection of those who acted in good faith; and fourth, the cost of governance.

First, on Industry Transformation Map (ITM). Sir, the rapid changes in Singapore's society place a greater onus on the Office of the Commissioner of Charity (COC) and its partners to beware of "conducting business as usual". In particular, I refer to the COC's aspiration to be a "proactive charity advisory" as stated in its Annual Report. So, more than tweaking the Charities Act, the charity "industry" needs a better landscape study and I think an ITM is in order, much like what the Future Economy committees are doing to keep up with the times.

In developing the ITM, we need a better differentiation of charities. The charities landscape is too diverse to segment the players based on the size of their budgets, which is the current way by which the Charities Act is implemented through the Code of Governance. Charities should be differentiated and treated, even nurtured, according to the different nature, priority, strengths and pitfalls in the different sectors in the charity landscape. Some charities, such as the step-down community hospitals and special schools, were set up to respond to the call of the Government to meet the needs of target beneficiaries. Surely, the governance of and support of such healthcare and social charities which are developed to complement Government's efforts should be different from those, say, in the religious sector or charities which are just private endeavours.

A more empathic and nurturing hand and touch ought to be provided to those who are the Government's partners, for example, in healthcare, education and other social challenges. It is too limiting to police these partners through stringent codes of governance only. Efforts ought to be made to help future-proof them and ensure their skills and competencies are updated to survive or even thrive in a society that is affected by technological and other social disruptions.

The current code of governance applied to all charities according to the tier in which the size of their budgets fall smacks of, to me, a bit simplistic cookie cutter perspective of charities and does not take into account the impact and contribution of different charities to society. So, there ought to be a better differentiation of charities, and more should be done for those who are the Government's partners in service delivery in the social landscape especially.

Secondly, an ITM, if developed, should also provide better clarity and direction. As a "proactive charity advisory", the aspiration of the COC and its partners should also provide greater clarity and direction on the different sectors in the charity landscape. There ought to be published mini-blueprints of the state of the union in each sector's landscape, strengths, the concerns, areas of needs and strategies to plug any gaps that the Government has not or will not step in. Potential charities can then be advised by the COC and its partners or even incentivise to direct and deploy resources to where the needs might be.

I can think of emerging and critical needs, such as home-based healthcare services for the elderly, transnational family challenges, services for adults with disabilities and coordination of overlapping services in elderly support, and other areas of needs that I see are less than met. I can also think of instances by which the COC and its partners can more effectively advise on areas where there are already duplicate or overlapping services to scale down fundraising appeals.

An ITM for the sector should also support the diversity of income generation. A "proactive charity advisory" should not only look at policing the authenticity of fundraising appeals. Effective charities have long been encouraged to be more self-reliant and diversify their income streams so that they do not become over-reliant on only donation appeals. Where they can, charities should develop and learn to develop relevant services that are needed by their beneficiaries and generate other income streams. This may come in the form of social enterprises or the trading arms of the charities.

Hence, although policing of fundraising appeals is important in order to retain public trust in charities, future reviews of the Charities Act should look at how the COC might support, for example, new developments like social enterprises or other forms of income streams in the charities.

I would like to touch next on the enforcement of the Charities Act. It is well and good to set up a strict regime of governance for the charities. But it is another altogether to effectively enforce it. It is not uncommon to hear of suspect fundraisers in public places touting for donations. It is also not uncommon to sight charities who were already put on, say, restrictive orders by the COC to still carry on its activities per normal. In one of the shops selling religious artefacts in my constituency at Waterloo Mall, I have had complaints by constituents about a business owner collecting donations for themselves in a box next to legitimate donation boxes for the Community Chest.

As online fundraising appeals become more common, how does the COC plan to verify the authenticity of the appeals and how donations are disbursed? Sir, in order for the Charities Act to have teeth and in the midst of even more charity applications and fundraising appeals, ways must be found by which the COC, the Sector Administrators and other partners can effectively communicate to the public and work with the public to enforce the provisions of the Act.

Next, on protection of those who acted in good faith. The Charities (Amendment) Bill seeks to strengthen the regulatory framework of the COC and to further empower the Commissioner to bring any "Key Persons" to task; all this to make charities more accountable to the public and to its funders. The Bill proposes that section 2 of the Charities Act be amended to broaden the definition of "Key Persons" who can be brought to task should things go wrong. As a result, members of a charity who, I quote, "provides advice to the charity on the control and management of the administration of the charity" are now also made accountable.

Whereas section 46A of the Charities Act protects the Commissioner, his Deputy Commissioner, his Assistant Commissioner or any officers appointed by the Commissioner, or any Sector Administrator, by guaranteeing "no action, suit or other legal proceedings shall be taken" for anything done in good faith. There is no corresponding protection for the "Key Persons", some of whom are volunteers, which includes key staff and board members who have acted in good faith.

Sir, we should take care that the powers of the Commissioner must not make the participation of individuals so onerous so as to discourage the participation of potential contributors to the charities. Bearing in mind that many board members are busy people, volunteers with their own day jobs and many key staff in charities do their best within the constraints of the charities, surely, the Ministry should provide some assurance in the Act that they would be protected from liability if they prove to have acted in good faith and also perhaps consider liability insurance as an industry practice for board members and key officers.

Next, on cost of governance. Both poor and good governance comes with a cost. Charities with poor governance standards often find themselves paying the ultimate price of not just having their key officers and board members taken to task by the law, but also the potential closure of the charities, impacting the lives of its beneficiaries. Good governance, on the other hand, does not come free either and, in many cases, paid out of the funders or other donors of the charity.

The cost of governance includes internal and external audits, legal advice for both strategic and operational issues, costs to comply with constitutional and statutory requirements, and even risk management analysis, which can take a lot of time and effort, not to mention the time expended by the staff, the management and board members of the charity.

In one of the larger-sized charities that I am involved in, the cost of governance can rise to as high as more than $90,000, and that is not including the pro bono legal services and secretariat services that it obtains from its board members and the time spent to work with the internal and external auditors or professionals. Each fundraising event also carries the cost of an audit of the financial statements of each event. There are also additional hidden costs when charities, for example, run services funded sometimes by more than one funder and then are obliged to produce multiple reports for one same programme as a condition for receiving the grants. All these items add to the operational cost of both large and small charities.

I therefore urge the COC to conduct a study of the different sectors under its Administrators to determine if the costs of governance in each of its sector is too low, just nice or too high, and then to provide the necessary support and to rectify the situations as needed.

In conclusion, getting the governance just right. In the UK, Pilotlight Group helps UK charities and social enterprises thrive by harnessing the skills of business leaders. In 2015, the group offers yet another angle to measure the effectiveness of governance using a self-assessment thermometer to determine if governance might be too heavy or too light. The scale that it develops test if the board members are too engaged or too unengaged; if the structures and procedures of the charities are too restrictive or too loose, if trustee skills are too narrow or too generic to be of use, and so forth. The COC may wish to study this simple tool to help getting governance just right, in addition to its "comply or explain" and "yes/no" governance checklist.

Mr Deputy Speaker, Sir, there is more to charities than just keeping their operations solvent and in line with the Charity Commission's governance standards, especially in a time such as this and in view of the increasing significance of some charity players.

Over-governance is costly and stifling. Under-governance, on the other hand, puts the charity and its core mission at risk. The Charities (Amendment) Bill is a good attempt to update the governance regulations to keep up with the times. There is much more to do than to get the governance just right. I hope the COC and its partners will consider my suggestion for the development of an ITM and I hope that the next review of the Charities Act will be more transformational, more visionary and reflective of the vibrancy and the high potential charities can value-add to society.

I offer, in conclusion, the COC my fullest support and assistance if required and I fully support the Bill.

Mr Louis Ng.

Sir, this Bill is timely to restore the public's trust in Singapore's charity sector, after a few high-profile scandals in the past years, which shocked the nation. I am heartened to see that there is constant review of the Charities Act, with the last one just seven years ago, and that we continually seek to strengthen accountability in this sector.

I have the privilege of starting my own charity 17 years ago when I was a little boy. Animal Concerns Research and Education Society (ACRES) has a gone a long way since our birth in 2001 in my bedroom in my parents' house. I actually never told my parents I used our home address as the first ACRES address but I guess now is a good time to tell them.

I can tell you that it is not easy starting and running a charity in Singapore and, in fact, many said I would fail when I first started ACRES.

As a charity fully dependent on donations, I am aware of the difficulties local charities face in raising funds to sustain their operations. It would be a great pity to see a rare few black sheep wreak distrust in the charity sector, hampering the necessary work of more than 2,000 registered charities in Singapore.

Fundraising success depends on the goodwill of the public, and goodwill is often very fragile, dependent on the level of trust held by the public that the dollar donated makes a positive impact on the lives of the beneficiaries. Trust hangs by a thread and, once broken, is terribly difficult to restore. Thus, I am encouraged that constant reviews and amendments of the Charities Act help to prevent errant behaviour and ultimately, protect the good work of the vast majority of charities in Singapore.

However, parts of the Bill may have the contrary effect of hampering the charity sector due to the lack of clarity.

First, the revised definition of "fundraising appeal" as proposed in clause 10 may have a dampening effect on funding for the charity sector. Based on feedback I received and also via Reaching Everyone for Active Citizenry @ Home (REACH), there were questions raised about whether an "appeal" includes unsolicited funds.

There were also questions on what "a confined group of persons" mean. Would this refer to private fundraising activities? I understand the Minister had provided some examples earlier but how do we define small-scale private fundraising? And these small-scale private fundraising activities are commonplace in the charity sector, for example, a bake sale at a company event, or a birthday party. Surely, the law will not extend to these cases as well. I hope that the Ministry be clear on certain types of fundraising appeals which can be exempted from which provisions in this Act.

Furthermore, charities raising funds for foreign purposes need to apply for a permit, and this requirement now extends to private events. Application permits are an administrative hassle and, unless the application process can be simplified, I fear that this may not bode well for charities which conduct activities abroad, such as humanitarian charities.

As I mentioned in my Budget cut last year, "The Government is providing funds to help firms scale-up and internationalise and helping build capabilities to operate overseas. We should do the same for our IPCs. We should support our local IPCs who internationalise, who fly the Singapore flag proudly overseas and who lend a helping hand to our neighbours. Let us not be seen to just venture into other countries to compete, to take but also to give and to help."

Many of these charities and IPCs depend on volunteers and donations from private fundraising activities. There may be a dampening effect on fundraising for these charities, often already faced with additional barriers to fundraising, such as the 80:20 rule. These charities promote the Singapore spirit of generosity in some of the most difficult places, and should receive our fullest support.

I also raise the issue of crowdfunding, which has proven to be an effective platform for the needy, but have also suffered a few cases of malpractice. I understand that the Commissioner will be issuing a new code of practice for crowdfunding, but I would like to ask the reason for not including these changes into the Charity Act and thus making them mandatory.

On support for charities, I refer to the recent Charity Transparency Awards, noting that only 41 out of the possible hundreds or even thousands of charities assessed by the Charity Council made the cut on disclosure and transparency. This suggests that there is room for the majority of charities in Singapore to enhance their performance in the criteria assessed, such as financial management, internal control, fundraising management and conflict of interest. I suspect that this is because most charities are resource-strapped. Just like ACRES, we often rely on volunteers, a very small pool of full-time staff members and limited funding, and are often busy fighting day-to-day fires. Has the Ministry looked at ways we can better support charities, other than those that the Minister had mentioned in the Opening speech, especially the smaller ones?

Finally, I would like to commend MCCY for its efforts to engage the public which I hope will become commonplace. I have read the Ministry's response to feedback received through REACH and have found it to be very comprehensive. Each comment received a detailed reply. It also showed that feedback received from the public was well-researched and proved to be constructive. I hope that more Bills will undergo similar public engagement, something that I firmly believe will help us to draft the best Bill.

Sir, these changes will strengthen accountability and public trust in our charity sector, and can only reap benefits for beneficiaries that we are trying to support. I stand in support of the Bill, and I am sorry, Sir, I forgot to declare at the onset. I declare my interest as the Chief Executive of a charity.

Mr Gan Thiam Poh.

Deputy Speaker, Sir, I welcome the amendments to strengthen Government oversight and raise governance standards of the charities sector. If our charities sector is to grow, we must ensure that donations are utilised as intended and reach their targeted clients.

To increase transparency and boost accountability, the Bill proposes to mandate the electronic filing of annual submissions. I would like to recommend that we go a step further by requiring charities to submit their accounts on a quarterly basis. These accounts should, of course, be publicly available for scrutiny.

Besides meeting submission criteria and standards required by auditors of the COC, these numbers should be accompanied by brief notes in simple English so that donors and interested parties can have a clear idea of how the funds are used. The directors' and key management's fees, as well as all related party transactions, if any, must be laid out to ensure arms' length transactions.

I do not think such requirements are too onerous nor tedious. Good housekeeping and the provision of regular updates are key to sustainability and a small price to pay towards gaining the trust of donors in a charity. A good growing reputation will attract even more funds to support its cause.

To this end, I would also suggest that we require charities to maintain separate accounts for operations and for the charities fund accounts, similar to practices by law firms. We can consider setting ratios where a certain percentage of each dollar raised must be deposited into the charities' fund account for the approved and designated use. Such controls will help reduce incidences of where disproportionate amounts of money are used to pay for commissions, salaries, fees and purposes other than direct assistance for the intended beneficiaries and so on.

Next, the amendments seek to clarify the definition of a fundraising appeal to ensure that all such appeals are subject to regulatory requirements. However, I feel that we can do more to address the proliferation of online fundraisers. In particular, how does the Government intend to monitor and ensure compliance from entities not based in Singapore, even as they reach out to Singaporeans and residents for funds?

At the very least, for online fundraisers based here, we should consider requiring them to be registered in Singapore and for the accounts to be maintained in Singapore, and at least two of the directors should be Singaporeans. With that, I conclude my support for the Bill.

Minister Grace Fu.

Mr Deputy Speaker, Sir, please allow me to thank Members who have spoken on this Bill for their broad support and comments. Let me now address some of the comments raised.

Members have raised several points on the scope of the regulation of fundraising appeals. Mr Louis Ng and Mr Dennis Tan have made certain enquiries about the scope of fundraising appeals. The amendments that we have proposed in this Bill, Mr Deputy Speaker, serve to clarify the definition, not extend its scope.

All fundraising appeals, whether online or offline, whether for local or foreign purposes, have been and continue to be subject to the Act. The Act also imposes obligations on persons and organisations raising funds or receiving the funds raised.

A person raising funds via an online fundraising platform for a needy family will contravene the law if the funds raised are not applied to the said cause. A charity that is in the service of providing nursing care for the elderly has an obligation under the law to ensure that any unsolicited donation it receives is applied to the said object. Therefore, the examples that Mr Louis Ng and also the point raised by Mr Dennis Tan about small-scale private fundraising activities and unsolicited donations are therefore bound by the Act.

However, we are mindful not to stifle giving while safeguarding public interest. We recognise that fundraising appeals come in a wide range of scale and complexity, from bake sales to nationwide campaigns. As explained in my earlier speech, we regulate fundraising activities through the Charities (Fundraising Appeals for Local and Foreign Charitable Purposes) Regulations 2012 in a risk-adjusted approach. In practice, we have exempted all appeals for local causes from the requirement to apply for permits. This exemption has also been extended to appeals for donations-in-kind for foreign causes.

We are revising our Regulations to keep up with the needs of the charity sector. We intend to exempt small-scale and private fundraising appeals from certain requirements. We will review the administrative requirements on fundraising, including for foreign causes, an issue that was raised by Mr Ng. This framework of scoping the regulatory requirements through the regulations allow us to be nimble and responsive to the needs of the sector and the public.

Mr Louis Ng referred to the 80:20 rule as a barrier to fundraising for foreign causes. The 80:20 rule stipulates that with regard to fundraising for foreign charitable purposes, at least 80% of funds collected by the fundraiser must go towards charitable purposes in Singapore. This ensures that resources are not collected from the public for overseas causes at the expense of local needs. Mr Dennis Tan also asked for my views on this matter. We have reviewed this and we felt that at this point in time, the 80:20 rule will remain for now.

I will also like to point out that the Commissioner can and does, on a case-by-case basis, waive this rule to support, for example, appeals in aid of providing immediate humanitarian and disaster relief.

Many Members, Mr Gan Thiam Poh, Mr Louis Ng, Ms Denise Phua, Mr Melvin Yong, Ms Joan Pereira and Ms Thanaletchimi, have spoken on the proliferation of online fundraising appeals and asked how we regulate these appeals. Allow me to explain that the Act is not of extraterritorial application. If the appeal is conducted by an individual residing overseas and it is not targeted at residents in Singapore, the appeal may not be deemed to be carried out in Singapore. Such appeals are not regulated by the Commissioner as we do not have extraterritorial jurisdiction. The same applies to crowdfunding intermediaries.

Where a fundraising appeal falls under our purview, the Commissioner will investigate if contravention of our regulations is suspected. This includes investigating cases of alleged misrepresentation or half-truths that Members spoke about. Members of the public should report suspicious fundraising appeals to the Commissioner. Where irregularities are found, the Commissioner can stop the appeal and direct a fund raiser to refund donations collected, a point that Mr Melvin Yong has asked.

Members have called for greater regulation in the online sphere. We recognise that online platforms bring convenience to donors and have the potential to expand the reach and impact of fundraising campaigns. Given the ease of conducting online fundraising appeals and the speed with which funds are raised, the online channels are proliferating. Coupled with the anonymity of the Internet, regulating the online fundraising sector is a complex and difficult task.

Our approach is one of co-regulation, where a safe online giving environment is a shared responsibility. We are collaborating with the sector, specifically the crowdfunding intermediaries. By co-developing a practical and workable Code of Practice, we aim to set an industry standard of good practices that will instil transparency and accountability in the sector. We will create greater awareness and nudge both intermediaries and fundraisers in the online sphere towards complying with the Code of Practice. The best practices in the Code include conducting due diligence to ensure the legitimacy of appeals, providing up-to-date information on funds raised and fees charged, and maintaining proper records of donations received and disbursed.

Under the Code, crowdfunding platforms will require fundraisers to declare their awareness and compliance with key regulatory requirements when using their platforms. This serves to remind fundraisers of their duties and obligations of providing information that is complete and true, and ensure that funds raised are used only for the declared objectives.

While the Code of Practice will not be made mandatory, the Commissioner will lend weight to promote its adoption. The Commissioner will publish the list of compliant platforms and encourage the public to donate through these intermediaries.

While we put in place regulations and guidelines on the fundraisers, donors have a part to play in practising safe giving, both in the online and offline spheres. We are stepping up public education efforts to empower the public with the knowledge and skills to better differentiate legitimate appeals from those that are not. We will customise our safe giving guidance for different segments of the population to ensure effective communication. This could range from hardcopy infographics for the elderly, to posts and references on social media.

Members have raised several suggestions on enhancing governance, transparency and accountability of charities. We agree that these attributes are key to gaining the trust of donors. However, we are mindful of the compliance costs that are imposed on charities, a point that Ms Denise Phua has raised. We are therefore constantly weighing the benefits and costs of regulations to be imposed and seeking to strike the right balance, the right balance that she has talked about. About 50% of charities in Singapore have annual receipts of less than $250,000. The majority of our charities conduct their activities responsibly. So, we agree totally with Ms Chia's point.

Given the profile of our charities, we have assessed that an annual reporting requirement is adequate for the sector. This is in response to Mr Gan's point. Charities are required to submit an annual report containing a review of their activities as well as their financial statements, which are published for public access. For IPCs and larger charities, they are subject to more stringent requirements, such as audits by a public accountant and disclosure requirements in line with accounting standards. This includes disclosures in the charity's financial statements on related party transactions, as well as explanatory notes on the use of funds. If there is a reason, such as in the case of a charity being investigated, the Commissioner will require more frequent updates on its activities and financials.

I would like now to clarify on certain points raised by Members on the reporting requirements for registered charities and exempt charities, a point that Ms Chia Yong Yong has raised. As part of the review, the Commissioner also took the opportunity to clarify the regulatory requirements that would apply to registered charities and exempt charities which enjoy tax benefits. In response to Ms Chia, we do have charities which are not successful in their application for registration as they do not meet certain requirements, such as having a purpose that is substantially beneficial to the community in Singapore. So, there are certain reporting requirements that do not apply to these charities that have not been successful in registration.

In addition to regulatory requirements, the Code of Governance for Charities and IPCs applies. The Code of Governance serves as a best practices guide in key areas of governance and management, and comprises tiered guidelines depending on the status and size of the charity.

To accommodate the diversity in governance structures across charities, we believe that the current "Comply or Explain" principle is relevant. Charities' reasons for non-compliance with the Code will be published. The Commissioner takes into account the reasons for non-compliance with the Code in assessing a charity's application for IPC status and in selecting charities for review.

On Members' concerns about controls on the use of funds raised, points mentioned by Mr Gan Thiam Poh and Ms Thanaletchimi, charities are currently required to cap their fundraising expenses in any given year to not more than 30% of total funds raised. The board members of a charity have a fiduciary duty to ensure that the charity is governed and managed responsibly by ensuring that funds are used prudently and in accordance with the intended purposes.

Nevertheless, we agree with the Members that more can be done so that stakeholders have greater clarity on how a charity's funds are used. The Commissioner will be developing a guide to help all charities, big and small, put out key information, both financial and non-financial, in a manner that will help donors and other stakeholders understand the financial position, use of donations and activities of a charity.

Several Members have raised points on the powers and provisions relating to the protection of charities, donors and charitable assets. Ms Chia Yong Yong, Mr Melvin Yong, Ms Joan Pereira, Ms Thanaletchimi, Mr Alex Yam and Ms Denise Phua have raised some points. In proposing amendments to the Act, due consideration is given to ensure that the powers given to the Commissioner are fair, reasonable and essential, with sufficient safeguards in place.

The Bill proposes to allow the Commissioner to extend the suspension of persons from their positions in a charity and suspend improper fundraising appeals. The total period of such suspensions, including any extensions of the suspensions, are proposed to be capped at 24 months. Ms Chia has asked whether such suspensions should be extended to 24 months in the first instance, while Mr Yong is concerned with the potential disruption to the charity during the suspension.

We have assessed the proposed increase from 12 to 24 months to be fair and reasonable. It should be noted that when the Commissioner orders a charity to suspend an improper fundraising appeal, the suspension does not prohibit the charity from conducting other fundraising appeals. So, for example, if the fundraising appeal in question is for the building of a new facility, the charity can continue to raise funds for its operations while the questionable appeal is being suspended. During any period of suspension, as with any serious situation requiring the Commissioner's intervention, the Commissioner will work closely with the governing board of the charity to ensure the continuity of its operations and services. We may review the necessity to extend the suspension period further later.

On the disqualification and removal regimes, our objective is to ensure that charities are managed by fit and proper persons who will help maintain public trust and confidence in the sector. Hence, to strengthen the regime, the Bill proposes to explicitly provide that persons convicted of terrorism, terrorism financing or money laundering will be disqualified.

Ms Thanaletchimi asked if the risk is real. The Financial Action Task Force (FATF), which is an intergovernmental standard-setting body for combating money laundering and terrorism financing has, in recent years, noted the increasing role of non-profit organisations in terrorism financing. FATF has recorded over 100 cases worldwide of alleged abuse of charities for terrorism financing. The risk is, therefore, real and increasing, and that is the reason for us to strengthen our legislation in this regard. And I will take note of Ms Thanaletchimi's advice for us not to stress that this only relates to charities with an object in religion.

Mr Alex Yam queried about the number of money laundering or terrorism financing cases that the Commissioner has investigated. While we have not taken action under the Act against charities for money laundering or terrorism financing-related offences, the Commissioner has carried out targeted reviews and worked closely with the law enforcement agencies to monitor the vulnerabilities that the charity sector may be exposed to. It would only take one case of a charity in Singapore being involved in money laundering or terrorism financing to shake public confidence in the charity sector as well as in the wider sector, including the financial sector. The proposed amendment, therefore, seeks to strengthen our regulatory regime in light of emerging risks and signals our commitment to ensure that charities are not misused to provide a front for such unlawful activities.

The Member has also asked about the permanence of disqualifications where spent convictions are involved. As mentioned in my earlier speech, where a person is disqualified under the Act on the ground of a criminal conviction, such as for an offence involving dishonesty, the disqualification ceases once the conviction becomes spent, or the person receives a pardon for the offence.

Removals under the Act, on the other hand, are permanent. If a person is removed on the ground of a criminal conviction of an offence involving moral turpitude, he will be permanently barred from returning to that charity as a board member or key officer. The permanence is intended as the cause for removal is serious in respect of the charity that he is serving, and it is a result of deliberate consideration. In the case of removal after inquiry for mismanagement or misconduct, the removed person is barred from key positions in the rest of the sector.

On the protection of charities' governing board members, as raised by Ms Denise Phua, we acknowledge the responsibility placed on the governing board members of our charities. As trustees of public funds, they must act with reasonable care and skill to lead charities to do good work well. The law protects those who have acted honestly and reasonably from personal liability.

And in response to Mr Dennis Tan's point earlier about the difference between board members and key officers, these are two separate groups of persons, as mentioned in the Act. Board members would include all board members. Key officers would be officers in the company or in the charity that have influence on key decisions and are involved in the control of management and operations of the company. Some board members could also be assuming key officer roles, but they are two separate categories altogether. So, it does not mean that a key officer who is not a board member will be relieved of his obligations. A key officer will be restricted, as we defined it, to a few persons who have management control of the outfit. So, typically, in a very small charity, that probably would relate to the General Manager or the Chief Executive Officer.

We echo Members' call for greater support for charities. The Commissioner supports charities on three fronts.

First, on capability building, we are working closely with the Centre for Non-profit Leadership to reach out to professionals with the heart to serve and pair them up with charities who need help. Ms Chia Yong Yong and Ms Denise Phua have made a very strong and convincing case about the need for the sector to attract talent and to professionalise the sector. We totally agree with them. The Commissioner will work with partners, including professional bodies, to engage charities and share know-how. Townhall sessions and the annual Charity Governance Conference are some examples of capability building efforts. In 2017, more than 1,600 participants attended our learning events.

Second, on processes, the Commissioner is looking at simplifying regulatory reporting, with a focus on effective reporting. This will be particularly helpful to smaller charities.

Third, on cost, the Commissioner is working with partners, such as the apex organisations, to set up shared services that charities can tap on. Ms Joan Pereira has spoken about it. Ms Chia Yong Yong has called for collaboration. These shared services may explore the suggestions brought up by these Members to assist charities which are experiencing either temporary problems or to help strengthen their compliance, governance and effectiveness. Charities can also tap on the VWOs-Charities Capability Fund to support their efforts in improving their governance and management capabilities.

On electronic filing, in response to Mr Melvin Yong's question, fewer than 100 of our registered charities are still filing hardcopy submissions. So, the large majority of the rest of the 2,200 or so charities have already gone on to electronic filing. To assist these charities, we provide support via the VWOs-Charities Capability Fund for the purchase of computers. They may also tap on the shared services facilities mentioned earlier.

Next, working with our stakeholders and customising our regulatory approach. Ms Denise Phua made a wonderful speech calling for greater customisation of our regulatory approach. We recognise that the charity sector is diverse and reaches out to different parts of the society. To this end, the Commissioner works closely with different stakeholders to achieve our shared vision. The Commissioner is assisted by the five Sector Administrators in various Ministries and agencies − MOH, MOE and MSF − who will best understand the needs of their respective sectors, including which ones are working closely with them, providing essential services that are required to serve the needs of the community. They serve as points of contact for the charities in their sector and work closely with the Commissioner to ensure consistency in the regulatory stance and effective regulation.

Many of our capability building initiatives are also tailored based on the needs of the respective sectors. For instance, following the launch of the refined Code of Governance in April 2017, we worked with different partners, including apex organisations for different sectors, to conduct sharing sessions on the Code for their respective sectors. We will continue to assess how to better customise in our future reviews.

Mr Deputy Speaker, I would like to thank the Members for raising many good suggestions, including on the powers of the Commissioner to better protect charities, the specifics on the electronic transactions service, the regulatory approach towards charities and an ITM and preparing for a new sector where a new model of charities should be envisaged and implemented. We are fully supportive of these suggestions. We will take them into consideration for the next round of the review.

I would like to conclude by thanking Members once again for their support for the Bill and for their valuable comments.

As fellow Members have rightly expressed, trust is key for the charity sector. The underlying objective of our proposed legislative amendments is to enhance this trust. In proposing the amendments, we have also held fast to our commitment of a balanced regulatory framework. We want to have a charity sector that not only has the trust and confidence of the public, but also one that is healthy and thriving. It is our goal to nurture a charity sector that remains driven by the community. We will continue to encourage co-regulation and a culture of transparency, and our regulatory approach will reflect this.

Sir, everyone has a role to play in achieving this goal. We will continue to work with partners, such as the Charity Council and professional bodies, to help charities strengthen their capabilities and governance. We are encouraged by the vision that leaders of the sector, such as Ms Chia Yong Yong and Ms Denise Phua, have painted for us and we are committed to supporting such ground-up initiatives. We will step up public education efforts to empower donors to give wisely and to donate with both the head and heart. Charities, too, need to ensure that they are well-governed and accountable to win the trust of the public, especially their donors and volunteers. Together, our efforts will help the charity sector flourish. A healthy and vibrant charity sector is the bedrock to a caring and cohesive Singapore. Mr Deputy Speaker, Sir, I beg to move.

[(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. – [Ms Grace Fu Hai Yien]. (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)]

Senior Minister of State Sim Ann.

Mr Deputy Speaker, Sir, on behalf of the Minister for Culture, Community and Youth, I beg to move, "That the Bill be now read a Second time".

Co-operative societies, also known as "co-ops", are membership-based business entities that operate on the principles of self-help and mutual assistance to achieve common economic and social objectives. At present, there are 85 credit and non-credit co-ops in Singapore.

Credit co-ops provide thrift and loan services to its members, who typically come from the same workplace, industry or community. There are 24 credit co-ops serving 140,000 members. As at 31 December 2016, members' deposits in credit co-ops amounted to $820 million, and loans to members amounted to $209 million.

There are also 61 non-credit co-ops spanning various sectors, including retail and social services. This includes the large-scale NTUC co-ops, which serve the general public, and moderate the cost of essential goods and services. There are also other smaller co-ops which serve specific communities, ranging from different professions to ethnic or religious communities and even schools.

The Co-operative Societies Act was last amended in 2008 to enhance the governance and accountability of co-ops in view of their increasing membership and more complex operating environments. We also introduced a risk-focused supervisory framework to accord more regulatory oversight of credit co-ops due to their deposit-taking function. Following the amendments, we implemented prudential requirements on credit co-ops, which included requirements on minimum liquidity and capital, as well as loan restrictions and investment limits.

Credit co-ops in general have since made good progress in meeting these requirements and improving their financial prudence. Social enterprises are also adopting the co-op model as they consider it to be an effective means to bring together like-minded individuals to address social needs. For example, the Runninghour Co-op, which promotes well-being and integration of persons with special needs through sports, as well as the Silver Caregivers Co-op, which aims to improve the quality of life of caregivers and to build their capabilities.

As part of our regular process, my Ministry has conducted policy reviews with the following two key objectives. First, protect the members' interests by strengthening co-ops' competency and regulatory oversight. This is to ensure that risks are better managed, and members' deposits are better protected. Second, ensure that our legislation continues to support the operation and development of co-ops.

Sir, the Bill before the House seeks to implement the recommendations arising from our policy reviews, as well as following several rounds of consultations with the sector. We also sought feedback from the public. We are adopting three strategies to meet the two key objectives. First, to strengthen the competency and governance standards of the people running co-ops. Second, to enhance regulatory powers to enable swift intervention in distressed or errant co-ops, so as to better protect co-op members' interests. Third, to facilitate co-op operations, by updating or clarifying regulatory requirements.

Allow me to elaborate on the first strategy, which is to uplift the competency and governance standards of co-op officers.

Sir, the primary responsibility for the governance and oversight in a co-op rests on its elected Committee of Management, as well as its key employees. Notwithstanding that many of the key officers in co-ops are volunteers, it is necessary that they possess the requisite competencies to manage their co-ops in a prudent and sustainable manner. They are also required to implement adequate risk management policies and internal controls.

To ensure that suitably qualified individuals oversee co-ops, the Bill allows the Minister to make Rules to prescribe mandatory qualification and training requirements for the Committee of Management members and key employees. The primary focus at this juncture is on credit co-ops, given that they receive members' deposits and disburse loans.

The Registry of Co-operative Societies has designed a training programme to ensure that key officers are equipped with the necessary knowledge to discharge their duties. Except with the Registrar's approval, an individual who fails to complete such training will be ineligible to be re-elected or co-opted into the Committee of Management.

Through subsidiary legislation, we will also issue minimum competency standards on some specified roles. The requirements take into consideration both work experience and academic qualifications, and will be tiered according to the size of the credit co-op. They will be categorised as either small, medium or large, depending on their total assets and membership size. While the new requirements will kick in immediately upon effective date of the Rules for new hires, existing officers who are unable to meet the requirements will be given a transition period to undergo training and upgrade their skills. The Registry will guide and assist the credit co-ops in this journey of transformation and progress.

Sir, currently, co-ops elect their Committee of Management at the annual general meeting (AGM) and may co-opt individuals into the Committe of Management only when a vacancy arises. Furthermore, they can only co-opt individuals from their membership base. Some co-ops have given feedback that they are unable to find suitable individuals with the required competencies from among their members. Hence, to further enable co-ops to strengthen their Committee of Management, the Bill will allow co-ops to appoint up to two individuals into the Committee of Management even if there is no vacancy, and up to the next AGM. These individuals need not be members of the co-op. This will facilitate the induction of individuals with relevant skills and knowledge to strengthen the Committee of Management capabilities. If a co-op is unable to find suitable candidates to fill the Committee of Management positions, especially to meet the required competencies, or should the Registrar deem necessary, the Bill also empowers the Registrar to appoint up to two individuals into the Committee of Management.

Mr Deputy Speaker, I will now move on to the second set of amendments aimed at enhancing the Registrar's powers to better protect co-op members' interests. These are intended primarily to facilitate swift intervention in weak, distressed or errant co-ops. Allow me to highlight the key amendments in this section.

The first relates to credit co-ops which fail to meet prudential requirements. The Bill enables the Registrar to impose a cap on such a co-op's dividends to members to ensure that most of its net surplus goes towards building up its institutional capital and strengthening its financial position. However, if a credit co-op persistently fails to meet any of the prudential requirements, the credit co-op would be putting members' deposits at risk. Hence, the Bill also empowers the Registrar to stop such errant credit co-ops from receiving any new deposits for such period as may be determined. If the credit co-op still fails to rectify its situation, the Registrar may, as a last resort, cancel its registration as a credit co-op.

Sir, there may also be instances in which the Registrar has to inspect the books of a co-op, institute an inquiry or conduct an examination. These may be necessary to discharge the Registrar's duties under the Act, to investigate possible mismanagement, or on application of a co-op's creditor. The Bill updates the Registrar's powers in these areas to ensure necessary access to the co-op's premises, documents, as well as individuals with the relevant information. Further to this, offence provisions in the Act have also been broadened to include new offences, such as the provision of false and misleading information to the Registrar, obstructing the Registrar's duties or wilful falsification of records.

Sir, there may also be instances where the Registrar is required to intervene in a co-op if the Committee of Management is not performing its duties properly, if there has been misconduct or mismanagement, or if it is necessary to protect members' interests or the co-op's property.

The Bill ensures that the Registrar is equipped with the necessary powers to take adequate and swift intervention in such scenarios. Beyond current powers to suspend the activities of a co-op and remove one or more Committee of Management members, the Bill broadens the Registrar's powers to, among other things, suspend a co-op officer for a period not exceeding 24 months, appoint a statutory adviser to advise the Committee of Management or order the co-op to take such remedial action or refrain from doing any act, should there be a misconduct or mismanagement. The Bill also specifies that an individual who has been removed or suspended by the Registrar shall not be eligible to be a Committee of Management member of any co-op or a key employee of a credit co-op, except with the Registrar's approval.

The powers described in this section will only be used as a last resort to protect the co-op or its members. In the case of a credit co-op, for example, the Registrar's intervention may be necessary to maintain members' confidence, stabilise the co-op and prevent a run on deposits. In addition, these powers will be exercised after due process and with a channel of appeal to the Minister.

After all means to save a co-op have been exhausted, it may prove necessary to wind up the co-op if members' interests are at significant risk. Currently, the Registrar may issue a winding up order after an inquiry or examination and when the Registrar is of the opinion that a co-op ought to be wound up. The Act also empowers the Registrar to wind up a co-op should it fail to meet basic requirements, such as the minimum number of members or repeatedly failing to conduct an annual general meeting or submit audited financial statements. The Bill broadens the circumstances in which the Registrar can wind up a co-op, to include insolvency, inability to meet financial obligations or if it is no longer in the interest of its members for the co-op to continue its operations.

Sir, this brings me to the third and final set of amendments, which aim to facilitate co-op operations. While we strengthen governance standards and enhance regulatory powers, we have also reviewed our legislation to ensure that it supports and facilitates the operations and development of co-ops.

At the Ministry of Culture, Community and Youth (MCCY), we see the inherent value of the co-operative model in building social capital and nurturing a more caring and resilient Singapore. Hence, we have reviewed the registration process and eligibility of membership in co-ops to make them more facilitative. For example, we have lowered the number of individuals required to form a co-op. The Act currently requires at least 10 applicants; the Bill reduces this number to five. This would make it easier for Singaporeans to form co-ops and achieve social objectives.

There are also existing prohibitions on persons with disabilities, bankrupts or ex-offenders, from being members of co-ops. The Bill removes these outdated prohibitions to ensure a more inclusive co-op movement. We are also reducing the minimum age to become a Committee of Management member, from 21 to 18 years of age. This will especially help to facilitate the participation of tertiary students in joining a Committee of Management of co-ops.

On the issue of capital, members' shares in co-ops are redeemable in nature. The Bill expands co-ops' sources of capital by introducing a new class of "Permanent Shares". This would enable co-ops to further build their capital base or meet any applicable capital requirements. This class of shares may only be issued to Institutional Members, who are better placed to permanently lock in their funds as compared to individual members. The Permanent Shares may, however, be transferred to other Institutional Members or bought back by the issuing co-op.

To provide co-ops with more clarity on the keeping of records and documents, the Bill introduces a five-year retention period and specifies the types of documents that must be retained.

Sir, the authority of a co-op is vested in a general meeting of its members. Hence, as owners of co-ops, members are expected to play an active role at the AGM and to hold their elected officials accountable. In order to ensure that members are adequately informed of the co-op's affairs, the Bill specifies that the documents that must be made available to members prior to the AGM include the Audited Financial Statements and the Annual Report. Further to this, the Bill also stipulates that the Annual Report must be prepared in such format as may be prescribed by the Registrar to ensure adequate disclosure and transparency to its members.

The Bill also introduces other amendments to make technical edits or to update or clarify administrative processes and timelines. These include, for example, the period by which a co-op shall inform the Registrar and its creditors of a change in its address or in its officers' particulars.

Sir, co-ops have a long history of over 90 years in Singapore. They have contributed in many ways, big and small, to a stronger social fabric by meeting different social and economic needs.

This Bill today reflects our balanced approach towards the sector. On the one hand, we seek to strengthen our regulatory oversight of credit co-ops in view of their fiduciary duty over members' deposits. We also seek to enhance regulatory powers to enable us to better protect members' interests, especially in the case of distressed or errant co-ops. On the other hand, we acknowledge that there is room for co-ops to grow in the social services sector. Co-ops are an effective ground-up structure for individuals to form a business to address needs in society or to champion causes they support. Further to our proposed amendments in this Bill, we will continue to review our administrative processes to help facilitate the operations and development of co-ops.