Lee Yi Shyan
Singapore
“When Prime Minister Lee Hsien Loong opened the Heartbeat@Bedok on 4 February 2018, we unveiled a locally-installed art work named “Pulses”. Singapore is no Florence but we could still envision our version of renaissance. Given this context, would the Minister enlighten us how MCCY views arts and culture development in the community?”
“Sir, I would like to ask the Minister if the Government has a framework to review and reduce outdated and obsolete regulations on a regular basis to keep the regulatory burden light. Would the Ministry consider applying expiry dates or sunset clauses to newly introduced regulations?”
“How would the Ministry encourage Singapore entities to capture the intellectual property created, so that we can monetise them and invest in our future? Does MOT see the need to champion research and development (R&D) activities in intelligent transport technology?”
“How would a wide range of solutions be coordinated amongst different agencies responsible for service delivery? Mr Chairman, just as the Government rolls out the 23 Industry Transformation Maps (ITMs) to transform our industries, is there a similar masterplan to transform our Public Service to be a smarter Government?”
“Now that the region has caught up, China has risen, we need to make continual and further adjustments to our strategy to sharpen our competitiveness. Being multilingual and deeply connected to the regional hinterlands must be our strategic priority. I support the Budget.”
“It is not just physical connectivity that we need to build, but the psychological bridge to understand the world, to reach out to complex issues and to deal with them tenaciously. There is no silver bullet but hard work aplenty. Mr Deputy Speaker, there is great urgency. I support the Budget.”
The complete record
Every one of 438 lines we hold for Lee Yi Shyan, in date order, each linked to its source. Free to read, in full, without an account. Page 8 of 9.
“Sir, in summary, MHA recognises that loansharking remains a scourge on the ground and will lead collective efforts to tackle it. Let all of us in Singapore declare war against loansharks!”
“On Mdm Cynthia Phua's queries, in the first half of this year, 417 persons were arrested for unlicensed moneylending and harassment, an increase of 210 persons, or 101%, compared to the same period last year. So there has also been more arrests. Whilst some of the persons arrested had secret society affiliations, to date, none of the loanshark syndicates was found operating under the control of a secret society. Profits have also not been channelled to benefit any secret society. Mdm Phua raised an important concern when she asked what the average age of the runners was and whether MHA will consider having an outreach programme to educate our young from becoming runners. Youth involvement in loanshark-related crimes is indeed on the rise. Eighty-one youths were arrested for loanshark-related activities in the first half of this year, as compared to 21 youths arrested over the same period last year. Most were impressionable youths, lured by the temptation to make a quick buck. Many were referred to work for loansharks by their friends. By doing so wittingly or unwittingly, these youths put themselves and their loved ones in danger. To counter this development, Police has been working with schools to educate youths on the dangers and consequences of getting involved in loansharking activities. To connect with them more effectively, Police is producing a video, captioned "Confessions 2", where an ex-runner will share his experience and regret over his involvement with loansharks. This video and other materials will be uploaded onto Singapore Police Force's (SPF) Facebook account and Youtube. Parents too can play their part to warn and monitor their children against falling prey to loansharks, either as borrowers or runners, as they will pay a heavy price.”
“On the ground, Police will be relentless in pursuing runners and harassers. There have been a few prominent successful intelligence-led operations the past two months or so. For example, an operation on 9th July led to 10 persons being arrested who were linked to about 500 debtors and responsible for about 1,000 cases of harassment. So far, this year, Police has already crippled nine syndicates, compared to the grand total of nine crippled the whole of last year. At the divisional level, I think, Members have read in the media, Police have also geared up in this fight against loansharks. Over and above enhanced enforcement, Police will work more closely with key partners such as ICA and HDB to track unscrupulous borrowers who do not change their address after selling their flat as well as tenants who shield themselves behind their landlords' address. Police will also work with Town Councils to have the loanshark graffiti removed expeditiously and with grassroots organisations on greater use of CCTVs. On their part, neighbours of homes that are hit can signal their disgust with this abhorrent scourge by banding together to form Neighbourhood Watch Groups (NWGs) to watch out for the runners and harassers. And if they do this, the NPCs will readily render all assistance to help them in this fight against loansharks. Quite a few NWGs have been formed already, but I think more can be done. Sir, for the time being, we will not criminalise borrowing from loansharks. We will closely monitor the cumulative effect of the enhanced measures, I have mentioned earlier, before we assess once again the need to introduce this drastic measure.”
“Sir, we recognise that we are in a battle of wits and nerves with determined loanshark syndicates. Let me say that we are equally determined. So pressing on resolutely, we will not let these syndicates terrorise our neighbourhoods. We will do more to target beyond the syndicate frontline, that is, the "Ah Longs " and runners on the ground as they can be easily replaced. Indeed, we recognise loansharking syndicates for what they really are, not benign unlicensed moneylenders, but a highly pernicious form of organised crime. Advances in communications technology and the ways money can be transferred have led to loanshark syndicates becoming larger, more sophisticated, and more dangerous. Their structure and methods such as a hierarchical membership, a professional administrative centre and a code of behaviour which require loyalty from members when apprehended are features of organised crime. Top leaders shield themselves, leverage on technology and surround themselves with an impenetrable layer of lieutenants. Borrowers who are over-committed in their borrowing and the young, including out-of-school youths and students, are exploited and recruited as runners. Because they are organised groups, the parts which are compromised can be easily replaced. Moreover, some masterminds control their syndicates from overseas. Sir, we will study ways to penetrate these layers more effectively and punish the masterminds. We will further enhance the penalties against loansharks and harassers. In addition, we will also punish anyone who knowingly contributes or facilitates a loansharking operation. We will explore ways to disrupt the flow of money and resources and tackle the financiers who provide them. We will introduce laws to punish loansharking activities conducted overseas.”
“Ho Peng Kee) (for the Deputy Prime Minister and Minister for Home Affairs): Mr Speaker, Sir, before I address Mdm Cynthia Phua’s and Mr Christopher de Souza’s queries, let me update the House on the loanshark situation and share how we intend to deal with the problem moving forward. Sir, we have started to toughen measures against loansharks since 2005. These included enhancing penalties and introducing presumptions under the Moneylenders Act; confiscating assets of convicted loansharks under the Corruption, Drug Trafficking and Other Serious Crimes Act; cancelling passports and imposing a travel ban under the Passport Act and when justified, detaining loansharks under the Criminal Law (Temporary Provisions) Act. Police also worked with agencies such as the Singapore Post to tighten procedures to limit opportunities for exploitation by loanshark syndicates. Sir, we have been closely monitoring the effect of these enhanced measures. There was a temporary respite in 2007 when loansharking and harassment cases dropped by some 4.5% after a continual spike of five years, but unfortunately, the upward trend resumed last year, and into this year. From January to June this year, the number of loanshark and harassment reports rose from 4,759 to 9,395 compared to the same period last year. Loansharks are also now bolder in harassing innocent households. Families who have never borrowed from loansharks have had their property damaged and their safety threatened. Harassment tactics have also becoming increasingly dangerous. These include setting on fire items placed in front of victims’ flats, spraying vehicles with loanshark graffiti and locking innocent victims in their flats.”
“Under our legislation, employers who submit false documentation or breach licensing conditions are punishable both by fine and jail. So, in the situation that the Member asked, if the company, having committed offence and having been debarred, goes on to form other companies, we will take them to task according to the legislation and the power that we have. Indeed, MOM, through our Task Force set up earlier this year, has stepped up enforcement paying attention to this kind of companies. ILLEGAL MONEYLENDERS AND RUNNERS 12. Mdm Cynthia Phua asked the Deputy Prime Minister and Minister for Home Affairs (a) how many illegal moneylenders and runners have been arrested and convicted in 2009 and what is the average age of these runners; (b) whether he will consider increasing penalties to deter people from becoming runners; (c) whether there is any link between secret society members and illegal moneylenders/runners; (d) whether there are sufficient small loans licensed moneylenders in the market; (e) what is the status of the study to make borrowing from unlicensed moneylenders illegal; and (f) whether he will consider having an outreach programme to educate our young from becoming runners. 13. Mr Christopher de Souza asked the Deputy Prime Minister and Minister for Home Affairs if he will provide an update on what measures he will take to reduce the incidents of unlicensed moneylending and loanshark harassment and when borrowing from loan sharks will be made an offence. The Senior Minister of State for Home Affairs (Assoc. Prof.”
“Sir, the SPUR programmes have been increased from 200 to 800 this year. Out of the 800 courses, there are about 30 courses that are meant for skills-conversion for PMETs. We intend to increase this number to 50 by the end of the year. There are another 220 courses that are suitable for PMETs to upgrade their skills within their existing industries. So, the industry-coverage is very wide, from manufacturing to healthcare to logistics and even construction. The Member may be interested to know that for the construction industry, we still need professionals and engineers who have special training in Work and Safety so as to become validation and safety engineers on-site. SAF OFFICERS ON BONDS (Application and approval for leaving service) 2. Ms Irene Ng Phek Hoong asked the Minister for Defence (a) whether Singapore Armed Forces officers on bonds can apply to leave the service early and under what circumstances will approval be granted; and (b) how many applications have been made and approvals granted over the years.”
“Well, let me first thank CASE for being a part of the task force. It is a multi-agency task force that considers – similar legislations in other regimes that have such a law – not only having such a law, but how it is implemented, and its effectiveness. We should expect the task force to finalise its report in the next four months or so.”
“Patrons of beauty-related industries would probably be better off if they develop a heightened sense of vigilance and self-defence, which would serve them well both shopping here and overseas. We have also noted the increased number of complaints in the beauty care industry, but the numbers are still much smaller than the time-share industry. This is despite the fact that the beauty care industry is much larger and does not have a mandatory cooling-off period, unlike the timeshare industry. Thus, we believe that consumer education and industry-led accreditation are still the best way forward. In any event, consumers victimised in high pressure selling already have clear recourse under the CPFTA against such unfair practices. Lastly, Mr Yeo asked about the progress of the Lemon Law Taskforce. The Taskforce, co-chaired by CASE and MTI, and comprising representatives from the industries, has been deliberating on the issue. The Taskforce is nearing completion of its work and formal recommendations will be made shortly. 1.45 pm”
“The cooling-off period will be extended from three to five days, and will extend to businesses that claim to help consumers resell their rights under timeshare contracts. We are also stipulating a 60-day refund period for contracts that are cancelled within the cooling-off period. The Police will also investigate if there are allegations of cheating or other criminal offences. We should let these new measures take effect and re-assess the needs for further tightening from there. I must also reiterate the fundamental pillar of our consumer protection framework, which is one based on caveat emptor, free market principles in the provision of goods and services, and the sanctity of contracts. The best protection for consumers is still founded on their ability to discern the best deals for themselves, being vigilant to any unrealistic promises and to walk away from pressure selling with bath towel or otherwise. Mr Lim proposed to extend the cooling-off period to the beauty industry and related industries as well. Before introducing legislation to protect consumers against a particular industry, we will consider whether consumers need protection because (1) the product or service is complex and beyond the reasonable understanding of consumers, (2) the method of selling is complex, or (3) existing provisions are inadequate to protect the customers. In the case of beauty-related products and services, many of the complaints are related to high pressure selling. Consumers victimised by high pressure selling already have clear recourse under the CPFTA against such unfair practices. Members of this committee would probably also agree that facial products and slimming treatments are neither complex nor hard to understand.”
“Such an ability to smell business opportunities and to convert an idea into a commercial proposition is what we would like to see more of amongst our youth. Let me now turn to issues related to consumer protection raised by the Members. Mr Lim Biow Chuan asked for an update on the amendments to the Consumer Protection (Fair Trading) Act (CPFTA). The CPFTA Amendment Bill was passed in Parliament in August last year. Since then, we have been working with agencies and stakeholders to finalise the supporting regulations, taking into account feedback received during the public consultation exercise. The finalised regulations will be published later this month and will come into operation thereafter in April. Mr Lim also recommended that an Investment Fraud Division be set up to deal with fraudulent investment schemes. The Commercial Affairs Department (CAD) of the Singapore Police Force already has the responsibility and power to deal with such scams. Mr Lim suggested that the MoneySENSE programme to deliver financial education be extended to more people through different avenues. MoneySENSE already does this. Besides the various channels mentioned by my Minister in his reply to Ms Penny Low last Thursday, MoneySENSE also partners with the media to arrange print and broadcast programmes. For instance, it had arranged radio programmes which have a total listener-ship exceeding one million. Both Mr Lim and Mr Yeo Guat Kwang suggested introducing laws to regulate the timeshare industry. Based on the feedback from CASE, we are strengthening the CPFTA to give consumers even stronger protection with respect to timeshare contracts.”
“Our Government loan schemes, especially the enhanced $100,000 micro-loan programme, will provide loan assistance to all small enterprises, including start-ups. Recognising that equity capital may also be affected, SPRING recently enhanced the Start-up Enterprise Development Scheme, or SEEDS, in three ways. Funding ratio is now increased from 1:1 to 2:1. We would also allow follow-on funding after the initial investment. The funding cap has also been raised from $500,000 to $1 million per start-up. These enhancements will be available to both new and existing start-ups. Beyond increasing funding options for start-ups, we are also helping nascent start-ups to commercialise their ideas. The Technology Enterprise Commercialisation Scheme (TECS) launched last year provides $50 million to help start-ups create their first prototypes for market trials and acceptance. So far, SPRING has supported 17 such technology projects, providing up to $500,000 for each start-up. Recognising that the spirit of enterprise has to be inculcated from young, SPRING introduced The Young Entrepreneur Scheme or YES! in October last year, providing $4.5 million of funding to help schools develop entrepreneurship learning contents. Under YES!, we would also fund student ventures with a 4:1 matching ratio. One example of a recent YES! start-up is Slow Loris, a manufacturer of designer bags catering to the increasingly environmentally conscious commuter. A recent graduate of the Singapore Management University (SMU), Miss Sarah Yip chanced upon the opportunity when she observed cyclists in Europe sporting stylish messenger bags as a lifestyle accessory.”
“Mr Chairman, Mr Inderjit Singh, Miss Penny Low and Mdm Ho Geok Choo have spoken on the importance of entrepreneurship even in this period of downturn. I agree wholeheartedly with them. Start-ups bring renewal and dynamism to our economy, and are the seeds of tomorrow’s large enterprises. Our efforts to promote entrepreneurship will not waver even in the downturn. The Action Community for Entrepreneurship (ACE) is an important initiative in driving entrepreneurship. Over the years, ACE has reached out to 32,000 aspiring entrepreneurs. Together with other entrepreneurship groupings, ACE has created a strong fraternity, promoting a pro-enterprise culture and the sharing of best practices amongst them. More educated and young Singaporeans are now willing to consider entrepreneurial undertaking as so-called "career choices". Our recent survey suggests that 65% of startups’ founders are below 40 years old. And more than one-third of our start-ups are started by graduates. We have created a conducive environment for start-ups. Our smaller companies and start-ups already enjoy the world’s lowest effective tax rates. It takes less than 15 minutes and $300 to register a company in Singapore. Singapore has been ranked by the World Bank as the world’s easiest place to do business for three years running. But we are not contented. Recognising that start-ups too will be affected by this crisis, we have recently enhanced our support in three ways: Providing working capital and equity; encouraging further investments in innovation; providing greater opportunities for student entrepreneurs. In the current economic climate, start-ups, like all enterprises, may be vulnerable to cash flow problems.”
“For instance, the Singapore Furniture Industries Council (SFIC) launched the $1 million Member Assistance Scheme (MAS), which helps eligible members lower business costs and strengthen business capabilities. The funding can also be used to support missions to explore new business opportunities. We agree with Mr Heng Chee How that agencies and industry associations must work together for collective competitiveness. This enhancement to LEAD will allow associations to provide more customised services to their members. Mr Chairman, a large number of our SMEs are in the services industry. The productivity of the service workers, their inclination and ability to serve with excellence, will have a direct impact on Singapore’s aspiration to be an international hub for business and tourism. In fact, as we prepare to welcome several world-class events, such as the F1, APEC meetings and the inaugural Youth Olympic Games, the task of raising our service sector productivity has become even more urgent. To ensure that we are up to the challenge, SPRING, STB and WDA, NTUC and ISES (Institute of Service Excellence) of SMU (Singapore Management University) recently launched a $100 million GEMS-Plus programme to raise the service standard of our industries in some very fundamental ways. The agencies hope that through the funding, applied in three areas; namely, research on service standards and methodologies; two, capability development and adoption of best practices; and three, promotion and recognition of role models, would raise the service standard of our workers, and the productivity of our service firms to new and international levels.”
“SPRING offers a comprehensive range of capability development programmes, ranging from IT upgrading to design, branding and business management systems, process re-engineering and product development. Over the past year, these programmes have helped some 2,600 businesses to upgrade their capabilities. Many have become leaner and stronger. Others managed to increase sales with more effective design and branding. Consider Tungsan Food Industries, a local manufacturer of sauces. With SPRING’s support, it has automated its sauce production process and increased production capacity by 150 per cent. The improved operational efficiency has enabled Tungsan Food Industries to sell more at a lower cost per unit. To help our SMEs stay focused on the long-term capability building, SPRING will launch a new $200 million Business Upgrading Initiatives for Long-Term Development (BUILD) programme as mentioned by Minister Lim. BUILD has two important components. For individual SMEs, SPRING will increase funding support from 50% to 70% under its capability development programmes. For example, with support from SPRING, Nanyang Optical has built up a strong in-house product development capability. As a result, it will be rolling out a new series of mid-range eyewear targeted at trendy and yet budget-conscious consumers. With increased funding levels under BUILD, SPRING hopes to help other SMEs to continue to upgrade their capabilities. For industry-level projects, SPRING will raise funding support from 70 per cent to 80 per cent under the Local Enterprise and Association Development or LEAD programme. Several of our industry associations have been pro-active in responding to this crisis.”
“Government officers seek to supplement, but not supplant the role of bank credit officers in loan credit assessments. I must add, however, that even in this global economic downturn and with declining demand, there remain opportunities for SMEs, so long as they are quick to adapt and able to seize new opportunities. IE Singapore hopes to work through industry and trade associations to help SMEs from different industries to penetrate existing markets and tap new ones. Mr Inderjit Singh has suggested that IE Singapore do more for SMEs which want to export and internationalise. Well, as a matter of fact, of the 35,000 companies supported by IE Singapore last year through its broad-based programmes, more than 80% were SMEs. 1.30 pm As highlighted by Minister Lim, IE Singapore will introduce the Export Development Programme (EDP) to develop export competency of first-timer exporters, especially the SMEs. In addition, IE will be increasing the number of trade missions by more than 55% to 340, benefiting some 5,000 companies. It will step up its efforts to help companies secure trade credit insurance. In particular, IE will subsidise 50 per cent of insurance premiums for SMEs under its new Export Coverage Scheme (ECS) that facilitates access to trade credit. The ECS is expected to benefit 1,000 Singapore based companies and cover up to $4 billion worth of trade insured. As such, addressing Miss Penny Low’s query, we have indeed expanded our efforts in helping export-oriented SMEs. Next, let me re-emphasise the need for SMEs to build new capability and capacity even in this period of downturn. This is, in our view, the best way to stay afloat and plan ahead.”
“For companies that take advantage of the downturn to make capital investments in areas such as renovation and refurbishment, they will get accelerated write-downs. Most importantly, companies that retain their employees will get substantial relief in their wage costs through the Jobs Credit Scheme. For an SME employing 10 workers, this translates to potential savings of as much as $36,000 a year. The Budget also contains enhanced measures to facilitate business financing. Let me emphasise that the main beneficiaries will be SMEs. Mr Seah Kian Peng has asked how SPRING will make known the availability of these credit schemes to SMEs. Since December 2008 SPRING has conducted 14 financial seminars and briefings to date, reaching out to nearly 2,000 participants. Members would have noticed too, SPRING’s advertisements in our local media publicising the many enhanced loan programmes. Miss Penny Low has expressed concerns with the processing of loan applications. To ensure efficient implementation, SPRING helps SMEs in two ways. First, it refers unsuccessful applicants to other participating financial institutions. Second, SPRING makes available experienced financial advisers to advise SMEs on writing up their loan applications and even on alternative financing options and this is for free. Since the launch of this Financial Facilitator Programme (FFP), 285 enquiries have been handled. Of course, I should add that these advisory initiatives are in addition to the many relationship managers from the 14 participating financial institutions, meeting SMEs daily on the ground. But the role of Government can only be facilitative. Miss Penny Low is right that civil servants do not have the experience or the expertise to assess credit worthiness.”
“Mr Chairman, I would like to add my thanks to the members who spoke passionately on the best ways to support our SMEs during this time of crisis. MTI remains firmly committed to helping our SMEs now and in future. More so than in other countries, our SMEs are closely connected to the global economy. Many of our SMEs play an important role in our key manufacturing clusters like electronics, petrochemicals and precision engineering, supporting larger companies. Many export to overseas markets and some of them have grown to become small multinationals themselves with operations in the region and beyond. Without a doubt, the slowdown is affecting many of our SMEs. In the manufacturing sector, many SME suppliers have seen sharp reductions in their order books. In the services sector, lower tourist arrivals and consumer spending mean slower businesses for hospitality, retail and the F&B business. Operating in an open economy like ours, our SMEs have not been immune to the severe shifts in the global market conditions. Mr Inderjit Singh and Mdm Ho Geok Choo have asked what the Government would do to help our SMEs to ride out this crisis. We will do so through an enhanced SME strategy comprising four pillars. One, alleviate costs and facilitate credit; two, support internationalisation; three, develop capabilities and service excellence; and four, support entrepreneurship. Let me elaborate. The Budget contains many measures that assist all companies, including SMEs, in managing costs and accessing finance. In the area of managing costs, businesses will enjoy as much as $840 million in savings on property and transport related costs through the tax rebates announced.”
“So, in the overall scheme of things, when we want to promote healthy start-ups and new firms formation in Singapore, we have to strengthen the network of mentorship and we encourage experienced mentors with background of investments and business operations to participate in this network. UTILITIES BILLS (Number of households in arrears) 2. Mdm Halimah Yacob asked the Minister for Trade and Industry (a) how many households are currently in arrears of their water and electricity bills for more than three months; (b) how many households are on the Pay-as-You-Use (PAYU) scheme; and (c) whether he will provide an update on the pilot project that was started to help households keep tabs on their energy consumption.”
“Let me answer the second question first. I think Mdm Ho is referring to the professionals and some of the PMETs who might leave the employment sector and go into the business. Many of them have good experiences and good skills. But it really depends on the kind of sector they are going in, they would certainly have to be associated with their professional bodies in order to be more effective in providing the services. For instance, the Institute of Management Consultants, working with SPRING, over the years, has come up with accreditation programme to certify consultants of certain minimum skills. So if the professionals wanting to go into this sector to be consultants, then they too have to learn new skills, in terms of consulting methodology as well as to run a business at the same time. So SPRING's approach has been to work with different professional bodies to raise the standard of their professionalism and, therefore, making them better receptacles and to serve their members at large. On the first point on face-to-face consultation, over the years, with the formation of EDCs as well as our agencies own centres to provide face-to-face consultations to companies that are interested, I think the response has been good. The basic knowledge and information needed to start a business and to discuss the growth operation models of a company or a business can be discussed in the initial period. But we should also understand that helping companies to grow over a sustained period of time is both experience and time-intensive. Therefore, beyond these five centres, we also encourage the network of mentorship to be formed.”
“Mr Deputy Speaker, I do not have the answer on this particular point, but I would check and come back to Mr Siew. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. – [Mr Lee Yi Shyan]. Bill considered in Committee; reported without amendment; read a Third time and passed. PATENTS (AMENDMENT) BILL Order for Second Reading read. 6.10 pm”
“However, this practice should not be used as a means to take unfair advantage of consumers. This is why we intend to introduce regulations to allow consumers to treat all unsolicited goods and services as unconditional gifts from suppliers, unless the consumer has acknowledged in writing his willingness to accept and pay for such goods and services. Now, I want to also touch on Mr Siew's questions on lemon law. This subject of lemon law has been raised before in the previous parliamentary discussions. In our subsequent revision, we would work with CASE to see if introduction of this law would indeed serve the intended benefits of the consumers in Singapore. With regard to the other suggestion by Mr Siew on improving the effectiveness of the Small Claims Tribunals, we welcome the suggestion and would convey these suggestions to the Ministry of Law because the Small Claims Tribunals belong to the Subordinate Courts system. He also asked whether CPFTA is indeed effective against the serial offenders because some of these may close and re-open businesses. For this kind of situation, indeed, we are working with CASE to see how we can have a better oversight of companies or directors behind the companies who are engaged in these unfair practices with other agencies that have supervision over them.”
“Mr Siew Kum Hong also mentioned the seeming contradiction between excluding the financial products and services in the first instance and now including them. The financial products and services were included when the CPFTA was first introduced for good reason. At that time, some of the Acts were very new and they were also to be introduced and in the decision, there were other dispute resolution mechanisms in the financial industry. So it was decided then that it was better for the various mechanisms to function as they were designed to serve consumers and businesses. But having had the experience of the last few years, I think we are ready to incorporate the financial products and services regulated by the MAS and later on to also bring in the other two financial-related products and services under the Ministry of Law. So MAS, therefore, in our view, has already got the power to supervise and regulate the financial institutions under its supervision. So, it is not necessary to specify them as a specified body. Mr Lim also asked about the opt-out regulations – whether the Ministry intends to issue the opting-out feature. We have observed that the suppliers sometimes send goods and services to consumers without their prior consent and subsequently demand payment from them and as a result, some consumers may mistakenly make payment for such goods and services. And sometimes goods and services may also be provided on a free trial basis with or without the consent of the consumers. So this places a burden on consumers to opt-out from the arrangement. Providing unsolicited goods and services and giving consumers free trials may be an effective marketing tool to raise awareness and allow consumers to try out new products and services.”
“We do not think at this point that extending the three-day cooling period is necessary to this industry. In fact, the right approach to solving this type of complaints is to strengthen education and promote best practices among the players in the industry. Mr Yeo also mentioned about the auto-renewal feature, especially in the telecommunications industry. As Members can imagine, thousands of consumers would have their contracts expiring every day, because we have six million mobile users and many other fixed-line subscribers, etc. So, if every single contract has to be renewed without this automatic feature, then we can imagine many consumers suffering from lines dropping and being discontinued. So we are not very sure, in this case, whether we will be doing a service or disservice to consumers by removing this auto-renewal feature. However, we can work with the regulatory agency – in this case, IDA – to also promote best practices among the telco players to, as Mr Yeo suggested, include some kind of reminder feature so that consumers can make their choice towards the end of their contract. I want to thank Mr Lim for his support for the proposed amendments in this Bill. I think he asked for three clarifications. The first one is on FIDRec. He asked whether MAS can be designated as its specified body. MAS today regulates a number of financial-related products and services. MAS has supervisory as well as regulatory authorities over the institutions they licensed. Therefore, if they find that financial institutions are in breach of any rules or laws under them, MAS actually is more powerful than a specified body, in a sense, that they can suspend or stop the operation of the particular financial institution.”
“In short, the consumer protection framework is one that is evolving with time, responding to the pattern and trends of the new types of consumer dispute cases. This is also a fruit, an outcome of the joint work between the Government, the consumer associations, the specified bodies, businesses and the public in general. Sir, let me now address some of the Members' specific questions. Mdm Ho has raised the question whether the amount of $30,000 could be raised further. I have answered that. Mdm Ho also raised the interesting point about whether we are making it too onerous for suppliers of services. Unlike the other three Members, her concern is that we are creating too much demand in terms of documentation and compliance which will translate into business costs and, in the end, will pass down to consumers, if we are not careful. I want to assure Mdm Ho that in crafting the provisions, we have seriously taken into consideration the balance between protecting consumers at large and targeting the errant suppliers or traders who, we believe, are a small minority. So, any provisions that we propose should not have a negative impact on the large number of suppliers who are honest and professional. Mr Yeo Guat Kwang singled out the beauty industry as an example where there have been many complaints. I am sympathetic to the number of consumers who were taken in by persuasive beauticians or consultants who promised them youth and many different kinds of services. But this is a case where the existing CPFTA has provisions, for instance, in the Second Schedule, for consumers to seek redress if there has been a misrepresentation given to the consumers, such as a "yes" when it is "no", or a "no" when it is "yes". So, our framework does provide avenues for consumers to seek redress.”
“Sir, I want to thank the various Members for speaking passionately and giving good thoughtful suggestions as to how the Act can be further enhanced. Sir, let me first establish the philosophy of the Consumer Protection (Fair Trading) Act that we have here in this country. Unlike the Office of Fair Trading or the Fair Trading Acts in other countries, our Consumer Protection (Fair Trading) Act does not intend to criminalise unfair practices. This is because the more serious offences related to business dealings are already covered by existing legislation. So, aggrieved consumers have actually choices to go to the court and seek civil redress in that manner. The consumer protection framework in Singapore is established to help small and vulnerable consumers. To put things in perspective, when the Small Claims Tribunal was established in the 1970s, the claim limit was only $2,000. Obviously, from today's discussions here, we know that the amount has been raised successively over the years, and now we are proposing to raise it to $30,000. Still, whether $30,000 is an adequate figure or not to cover a whole host of unfair practices, we have to look at it from the point of view of the small consumers with limited ability to seek redress. We also have to consider, as Mr Siew Kum Hong rightly pointed out, the capacity of the dispute resolution mechanism. In this case, we have the Small Claims Tribunals as well as FIDReC, the newly designated dispute resolution scheme. We have to look at their capacity and ability to remain focused on small consumers who require help because, if we overload them with too many cases by raising the claim limits ahead of these groups' dispute claim value, we would inadvertently be doing a disservice to them rather than helping them.”
“To that end, the amendments to the Act aim to inform both businesses and consumers of the desired standards of fair dealing across a broader spectrum of products and services. In the long term, an increase in consumer sophistication remains the first-line and best defence of their interests. Continual consumer education is therefore critical in ensuring that consumers are informed to make smart choices. The proposed amendments in this Bill also reflect a concerted effort by all the stakeholders to make the existing consumer protection framework even more robust. In drafting this Bill, we have taken great care to ensure that it is both pro-consumer and business-friendly. We believe that a sustainable consumer protection framework is also a win-win framework embraced by both consumers and businesses. Sir, I beg to move. Question proposed. 5.24pm”
“Experience has shown that this is insufficient time for specified bodies to build their cases and explore alternatives to litigation such as Voluntary Compliance Agreements with traders. Clause 5 therefore extends the limitation period from one to two years for the specified bodies. Clause 5 also extends the limitation period for consumers from one to two years. In addition, clause 3 allows the Court to stay the proceedings for consumer's action when there is another action by a specified body relating to the same unfair practice. These amendments allow consumers to better rely on the efforts of specified bodies. Burden of proof Sir, traders are often in a better position than consumers to keep proper records of their actions. Clause 6 gives the Minister the power to make regulations to place on suppliers the burden of proving that they have complied with certain requirements of the CPFTA or its regulations. My Ministry intends to apply this in two specific cases. First, timeshare industry and direct selling suppliers must prove that they have given the consumers information notice to inform consumers of their rights in relation to the cooling-off period. Second, motor vehicle dealers must prove that they have informed consumers in writing of their deposit refund policies, and applied for a loan in terms agreed by the consumer. Regulations To operationalise the proposed amendments, my Ministry is finalising the supporting regulations as well as implementing other recommendations made by the review taskforce. We will issue them shortly. In conclusion, Sir, the principle of "caveat emptor" remains fundamental in our overall approach to the regulation of consumer transactions.”
“These involve businesses that claim to help customers or consumers re-sell or dispose of their rights under timeshare contracts, a business model that has emerged in recent years. To address this, clause 2 inserts a definition of timeshare-related contract. My Ministry intends to extend the cooling-off period that currently covers timeshare contracts to these businesses as well. Prescribed claim limit To reflect the increasing claim values of consumer transactions, clause 3 increases the prescribed claim limit from $20,000 to $30,000. With this increase, we believe 99% of CPFTA-related complaints CASE received would be covered. Jurisdiction of Small Claims Tribunal Sir, the Small Claims Tribunals have been an integral part of the dispute resolution mechanism under the consumer protection framework. The Tribunals are designed to handle small and straightforward consumer disputes, and are therefore able to provide consumers with speedy and inexpensive resolutions. We are glad that the Tribunals are able to expand their jurisdiction to cover new areas of consumer disputes. Clause 4 of this will extend jurisdiction to cases related to, firstly, the cancellation of timeshare and timeshare-related contracts during the cooling-off period and, secondly, a deposit paid in motor vehicle sale contract. Clause 9 further extends jurisdiction to claims relating to a dispute arising from a contract to buy or sell foreign currency notes made with a licensed money-changer. Limitation periods Specified bodies currently have to commence an action against errant traders within a year of the last material event on which it is based.”
“With the removal of the exclusion, the CPFTA would be applied to the financial products and services regulated under certain legislation administered by the Monetary Authority of Singapore (MAS) and under the Commodity Trading Act with the commencement of this Bill. This will be followed by the financial products and services that are regulated under the Moneylenders Act and the Pawnbrokers Act in 2009 and 2010 respectively, when the Ministry of Law completes its review of these legislation. By extending the CPFTA to financial products and services, two consequential amendments have become necessary: First, clause 4 requires the Court to consider whether a consumer had sought to resolve a dispute through a specified dispute resolution scheme where available. My Ministry intends to designate the existing Financial Industry Disputes Resolution Centre Limited, or FIDReC in short, as the relevant scheme for disputes relating to financial products and services supplied by FIDReC subscribers. In this way, consumers will be encouraged to resolve their disputes with financial institutions via FIDReC first before going to Courts. Second, clause 7 clarifies how the prescribed claim limit should apply when a consumer commences multiple actions involving the same unfair practice. My Ministry intends to provide that in such cases involving financial institutions, the claim amount for each of the actions should be aggregated for the purpose of applying the prescribed claim limit. Sir, I will now move on to the other main amendments. Regulation of timeshare products Sir, timeshare-related disputes have been an increasing source of complaints.”
“Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Consumer Protection (Fair Trading) Act, or CPFTA, is a major pillar of our consumer protection framework. It provides consumers with legal safeguards against unfair practices, and enables them to have recourse to civil remedies before the Courts. The Act also allows specified bodies to enter voluntary compliance agreements with, or apply for injunction orders against errant traders. Suppliers are required to provide a cooling-off period for direct sales and timeshare contracts. Since the implementation of CPFTA in March 2004, the number of cases arising from the Act has been increasing steadily. In 2007, consumers lodged nearly 750 CPFTA-related complaints with the Consumers Association of Singapore (CASE). CASE also entered into eight Voluntary Compliance Agreements (VCAs) and obtained three injunctions against businesses. This shows that the CPFTA has been effective. In July 2006, MTI and CASE jointly established a taskforce to review the CPFTA to take into account the new trends and patterns of consumer disputes. The taskforce's recommendations, which were accepted by my Ministry, became the basis for wider public consultations with consumer and industry bodies from October last year. We thank the many who contributed generously their suggestions to the improvement of the Amendment Bill. Key amendments Sir, the Bill before us is the outcome of the work mentioned above. Let me now outline the main amendments. Inclusion of financial products and services Clause 8 of the Bill extends the application of the CPFTA to financial products and financial services which are currently excluded.”
“One of the key principles of our agencies in bringing solutions to the SMEs has been to work with the private sector because our agencies realise that they do not have all the competencies in-house and all the resources to cater to many of the SMEs' varying requirements. As Mdm Ho pointed out, SMEs is a very wide sector and, therefore, in devising these solutions, SPRING and WDA will work with professional bodies and HR firms to come up with products that have mass appeal as well as, at the same time, provide customised solutions that can address the companies' needs at the firm level.”
“Sir, I want to thank Mr Yeo for his clarification. The issue of improving and strengthening the CPFTA has been for a while and, indeed, the consensus between MTI and CASE has been established. What is needed right now is for us to work with the Ministry of Law and also MAS to possibly include some other industries that could be included in the amendment at the same time. Without going into all the details, we need a bit of time in these agency discussions as to what is to be included and what is to be excluded. But we hope that in the next few months, by the first half of this year, we could have the CPFTA revised.”
“We thank Mr Singh for his suggestion of looking into financing for growth-stage enterprises. I would, however, add that the Government is also mindful not to intervene in the market unless there is a clear market failure. It is our belief that direct investments into companies are best left to the private sector.”
“I agree with Mdm Ho Geok Choo that the entrepreneurial ethos needs to be cultivated from young. Starting in schools, we need to infuse students with an entrepreneurial zeal. SPRING’s Entrepreneurship Talent Development Fund (ETDF) provides monetary support to young budding entrepreneurs in our universities and polytechnics to start their ventures. To date, this fund has invested $1.4 million in 44 student startups. Promoting entrepreneurship cannot be the Government's responsibility alone. Our entire society must embrace the values of self reliance, resourcefulness and tenacity. For entrepreneurship to take root, our people must learn to take risks, think out of the box and tolerate failures. Realising this, the Action Community for Entrepreneurship (ACE) has sought to build a community of people passionate in and committed to entrepreneurship development. ACE reaches out to a wide sector of the business circle, including entrepreneurs, financiers, lawyers, consultants and educationists. Through the ACE Speakers' Circuit, for instance, successful entrepreneurs share their experiences to inspire students and youths on entrepreneurship. So far, more than 150 Speakers' Circuit sessions have been held, reaching out to about 30,000 students and teachers. Finally, the third prong is to grow innovative startups. Today, we are happy to see many of our SMEs, such as Hyflux, OSIM, Inter-Roller and Breadtalk, establishing themselves regionally and internationally. These companies were once small. But because they are resourceful and innovative, they get to where they are today. New startups are important to us for they may be just a startup today, and could well become a Starbucks, Facebook, Google or YouTube tomorrow.”
“More World System Pte Ltd, better known to Singaporeans as the Waraku chain of restaurants, is the first in Asia to leverage on R&D to develop pasta that cooks in a mere 15 seconds, as compared to 10 minutes. As a result, this has cut down the waiting time for customers significantly. We agree with Mr Teo and Mr Singh that SMEs and startups should have access to various programmes aimed at promoting company-level innovation and R&D. In fact, we share the belief that SMEs and startups are amongst the best places for the new innovations to sprout. To spread the benefits of R&D findings of our Research Institutes, the Technology Innovation Programme (TIP) has seconded 31 A*STAR researchers to SMEs. To encourage SMEs to undertake outsourced R&D, SPRING has established Centres of Innovation (COIs) in four sectors, including Food and Precision Engineering to provide technology consultancy. Mr Inderjit Singh commented that in commercialising our RIs' research findings, the relevant departments should not have profit-maximisation as their goal. We agree. In the case of Exploit Technologies, we want to assure Mr Singh that its goal is to make A*STAR's technologies as widely accessible to the industry as possible. This is in line with the objective to derive economic benefits from our R&D investments. The issue though is not of licensing fees being unrealistically high. The main qualm for many SMEs has been their wanting to have full IP right or exclusive licensing in return for their partial cost-sharing. As such, A*STAR finds it difficult to accede to such requests as it would like to proliferate its technologies to as many enterprises as possible. The second prong to grow innovative enterprises is to create a broad entrepreneurship community.”
“The $5 million MedTech capability development programme, for instance, enables local precision engineering SMEs to develop new process know-how to supply to the medical device industry. The participating SMEs hope to generate $300 million of new sales from the medical devices industry over the next three years. The reason why we have invested so much on upgrading capabilities, and will continue to do so, is to increase SMEs' capacity for value creation. This is more effective in the long run, than providing temporary band-aid solutions to help SMEs cope with the rising business costs, as Ms Jessica Tan reminded us. We should not create artificial conditions that insulate our SMEs from global competition. The responsible strategy for us has to be to continue investments to upgrade our SMEs. Mr Zaqy Mohamad pointed out that we would need to nurture innovative enterprises to create both quality GDP growth and high-value jobs for Singaporeans. I agree with him. Innovative enterprises and knowledge industries are our future. To nurture innovative enterprises, we adopt a three-pronged strategy. The first prong is to encourage greater R&D and innovation by existing enterprises. The newly launched "R&D Incentive for Start- up Enterprise" (RISE) announced by the Minister for Finance is designed for that. Mr Teo Ser Luck questioned if SMEs would benefit from RISE because they tend not to invest much in R&D. Our latest SME development survey shows that a significant 14% of all startups spent between $100,000-$300,000 on R&D in 2007. We certainly hope that, over time, more SMEs will invest more in R&D and make full use of RISE. There is a view that R&D and innovation are only applicable to high-tech industries. This is not necessarily always the case.”
“That our SMEs are internationally oriented is an encouraging sign. This means that their business models are potentially scalable. I would like to assure Mr Singh that IE Singapore plays an active role in assisting SMEs by organising missions, fairs and networking platforms for them to build connections. The International Marketing Activities Programme (IMAP) supports activities organised by trade associations and chambers to help their members market their products and services overseas. In fact, of the 40,000 companies that made use of IE Singapore's services in 2007, 80% were SMEs. 1.45 pm My Minister had earlier spoken on how SME associations were being held at the industry level through the Local Enterprise Association Development (LEAD) programme. At the company level, our agencies have developed many capacity building programmes to cater to the needs of SMEs at different growth stages. In the area of branding and marketing, IE Singapore and SPRING have a joint programme called "BrandPact". One beneficiary of BrandPact is a company called bYSI. bYSI started its first retail outlet in Tiong Bahru in 1998 selling women's clothes. With BrandPact in 2005, bYSI was able to re-define its market niche by focusing on the fashion needs of career women. Its sales have been growing at 30% since. The company currently operates 10 outlets overseas, and is looking to expand further into the Middle East. In December last year, the company won the "Singapore Prestigious Brand Award". To assist SMEs in developing new capabilities in product development and process innovation, SPRING launched the Capability Development Programme (CDP) in four sectors: marine, logistic, F&B and medical devices.”
“Mr Inderjit Singh has contributed greatly through his efforts in the Action Community for Entrepreneurship (ACE). As shown in a SME development survey, obtaining financing is no longer a top concern for SMEs. We thank Mr Inderjit Singh for his excellent leadership in identifying and plugging financial gaps in our system. I agree with Mdm Ho Geok Choo on the importance of manpower development in growing our SMEs. SMEs need capable professionals and strong leaders to succeed. However, with many of our best young talents opting for well-paying careers with multinationals, it is not easy for SMEs to attract and retain good talents. To address this, SPRING has put together a $60 million Business Leaders Initiative (BLI) to nurture current and future business leaders for SMEs. This BLI caters to talent development at three levels: SME leadership, middle managers and young executives. At the apex, the Advanced Management Programme (AMP) focuses on the training of CEOs and senior leadership. The Management Development Scholarship (MDS) targets middle management. Soon, SPRING will launch the Executive Development Scholarship (EDS), an undergraduate scholarship targeted at promising students. Collectively, BLI hopes to train 1,000 CEOs and Senior Managers by 2012. Mdm Ho may be pleased to know that SPRING and Workforce Development Agency (WDA) will also be rolling out the HR Capability Development Programme for SMEs this year. The programme will help SMEs implement good HR systems, practices and procedures. To grow, SMEs cannot rely solely on our domestic markets but must venture abroad. In recent years, we have seen many SMEs making successful forays into overseas markets. A recent survey also shows that 70% of our SMEs derived part of their sales revenue from overseas markets.”
“Thank you, Mr Chairman. I want to thank Members for sharing their thoughtful comments and constructive suggestions on SMEs. Let me assure Members that we share the same sentiments on the importance of the SME sector. MTI is committed to create the most conducive environment for our start-ups and SMEs to thrive. The SME sector is a critical component of our economy. For the past three years, its value-add growth at 11% year-on-year has outpaced the overall GDP growth of 7.7%. In the past three years alone (2004-2007), the SME sector created an additional 330,000 jobs and accounted for 63% of the net employment creation. They were instrumental in reducing our unemployment rate to an all-time low of 2.1%. As a group, the top 500 SMEs had combined profits of more than $665 million dollars last year, compared to only $70 million in 1999. By their sheer entrepreneurship and resourcefulness, our SMEs have grown to be larger, more sophisticated and internationally competitive. In response to Members' enquiries, let me elaborate on the Government's framework in supporting our SMEs. There are four pillars: namely, financing, manpower, markets and capacity building. The guiding principle in the area of financing has been for the Government to catalyse the private sector to create more financial products customised to meet the needs of SMEs. Working with financial institutions, in 2007, SPRING Singapore made available 3,000 loans amounting to $700 million through the Local Enterprise Finance Scheme (LEFS) and the Loan Insurance Scheme (LIS). With further enhancement and lowered premium rates (from 2% to 1.5%), the LIS is expected to catalyse a projected total of $3 billion of private sector loans over the next four years.”
“Sir, may I have your permission to speak a little bit over the time as I have a number of topics to cover.”
“On the supply side, Sir, obviously, we have to increase the supply, whether the bottleneck is in real estate, commercial space or industrial land. I think by increasing supply, we will be able to achieve price stability. The other fact that we should take note of is the fact that Singapore's economy is about two-thirds services and one-third manufacturing. And construction, as I have said, is but 4% of the GDP. Therefore, many of the sub-sectors in the manufacturing and services would each have their cycle and their cycle patterns closely in a world trend. So our job is to make sure that each industry's sub-sector enjoys and maintains its competitiveness with respect to the world. We accept the fact that the various industry sectors will have their own cycles. But if we have a broad-based economy, we will be able to ride through these cycles and yet achieve sustainable growth. TOPPING UP OF CPF RETIREMENT ACCOUNTS (Communication with CPF members) 3. Mdm Halimah Yacob asked the Minister for Manpower in view of the recent amendments made to the CPF Act, what measures have been taken to communicate with CPF members to encourage them and make it easier to top up the Retirement Accounts of their family members as many are still unaware of this flexibility.”
“Mr Speaker, Sir, Mdm Ho has expressed concern that much of our third quarter GDP growth was due to the construction industry. On the contrary, economic performance has been broad-based, with healthy growth by major sectors. Nor has construction been the major source of GDP growth. At less than 4% of the economy, construction accounted for only an estimated 5% of the total GDP growth in the third quarter. Manufacturing, on the other hand, which grew by double digits in the third quarter, accounted for an estimated 35% of the total GDP growth in the third quarter. I would like to point out that the strong growth in construction was not only limited to the two integrated resorts projects, but to a wide range of private sector projects - commercial, industrial and residential. Some examples would include the Shell petrochemical cracker, residential projects - Reflections at Keppel Bay, commercial projects - Orchard Central and Orchard Turn. The growth of the construction sector has reflected the broader growth in economic activity and investment projects. Mr Speaker, Sir, the Singapore economy is more diversified now than it was 10 years ago. The growth of the biomedical and chemical industries has helped to reduce our dependence on electronics. Financial services, business services, transport services, and tourism have become strong engines of growth, while new industries like energy, environment and water technologies, and interactive and digital media are emerging. As our economic base diversifies, our growth will become more stable and sustained.”
“Mr Speaker, Sir, World Bank's survey on the ease of doing business is but one of the many surveys that are done by international organisations. We take all these various surveys seriously. Whenever we identify opportunities for improvement, we will work tirelessly with different agencies to improve the measurement. Sir, I think many of these surveys point to the fact that it is important for us to continue to remain responsive and to continue to receive input from the private sector, from the businesses we are serving. I think the other important conclusion that we can find of course is also the fact that our overall competitiveness depends not on one Ministry but on many regulatory bodies whose policy may have an impact on business cost and business efficiency. So MTI's role would be to work with the various agencies to channel the right input to the regulatory bodies to make improvement or incremental steps at times, and to make fundamental changes if we deem necessary. GROSS DOMESTIC PRODUCT GROWTH IN CONSTRUCTION INDUSTRY 2. Mdm Ho Geok Choo asked the Minister for Trade and Industry given that much of our Q3 2007 performance was due to the construction industry, whether Singapore is now overly-reliant on this industry vis-a-vis the other traditional growth industries (manufacturing and services) and, if so, how sustainable is this strategy especially after the integrated resorts are built and a possible cooling of the construction industry arises.”
“Sir, I beg to move, (1) In page 15, line 15, after "will", to insert "not"; and (2) In page 15, line 28, after "has", to insert "not". Sir, clause 8 proposes for a non-infringement decision to be made upon the acceptance of commitment. The amendments are necessary to rectify the typographical errors created by the omissions of the word "not". Amendments agreed to. Clause 8, as amended, ordered to stand part of the Bill. Clauses 9 to 24 inclusive ordered to stand part of the Bill. Bill reported with amendments; read a Third time and passed. Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.10 pm. Sitting accordingly suspended at 3.50 pm until 4.10 pm. Sitting resumed at 4.10 pm [Mr Speaker in the Chair] GAS (AMENDMENT) BILL Order for Second Reading read.”
“The Board is made up of lawyers, including a few senior counsel and former High Court judges, economists, accountants and representatives from the banking and business sectors. The Chairman of the Board is Mr Thean Lip Ping, who was previously a Judge of Appeal. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Lee Yi Shyan]. Bill considered in Committee. [Mr Speaker in the Chair] Clauses 1 to 7 inclusive ordered to stand part of the Bill. Clause 8 –”
“I would like to assure the Member that the appropriate safeguards have been built into the Act. For example, the CCS must have reasonable ground to suspect an infringement before it can invoke its powers to require information or documents. The CCS also is mindful of the need to minimise unnecessary inconveniences to businesses when it conducts its investigations. As such, it will generally take copies of documents and will leave the originals with the business owners and, if the originals are taken, the parties will be allowed to make copies for their use. Mr Inderjit Singh also raised concerns about procedural fairness with regard to the appeal process and legal privilege. I should clarify that the Competition Appeal Board can order the suspension of a CCS decision while reviewing an appeal. As for legal privilege, the Act clearly states that the power to require disclosure does not extend to communication between a lawyer and its client. Although the CCS has the power to require the name and address of the client, this is only to allow the CCS to ascertain that the communication was indeed privileged and to ascertain if the client wishes to waive legal privilege. As for his suggestion to appoint a specialist judge at the Subordinate Courts or even perhaps at the High Court to hear competition-related matters, this is something that is best left to the courts to decide. I should mention, however, that appeals against CCS' decisions are heard in the first instance by the Competition Appeal Board, which is a panel of persons appointed by MTI for their expertise and experience in competition-related matters.”
“The Commission can examine market abuses as and when they occur even in the case of mergers that have been approved. Sir, I will now touch on the sectoral exclusions from the Competition Act. Mr Inderjit Singh suggested that we should consider integrating the regulatory framework in the telecommunications sector within the fold and framework of the generic Competition Act. This indeed is our longer term goal. When the Competition Act was enacted in 2004, the number of sectoral authorities and respective regulatory frameworks had already been established. To acknowledge their continued operations, the Competition Act has provided exclusions from sections 34 and 47 in the Third Schedule and exclusions from section 54 are given in the Fourth Schedule of the Act. The Government then explained that the sectoral regulators, such as the Info-Comm Development Authority, will continue to have oversight of their respective sectors. This is because these regulators are in a better position to handle competition issues in their sectors. Nonetheless, the Government remains committed to the goal of alignment and coordination of the various competition regimes. An inter-agency committee has been operating since 2005 to coordinate the application of competition law at the different sectors in Singapore. The Ministry of Trade and Industry had also earlier indicated that it will review sectoral exclusions under the Competition Act three years after the Act has been enforced, ie, in 2009. Finally, I will touch on the queries relating to how the Competition Act is generally enforced. Mr Inderjit Singh expressed concerns that the CCS' powers of investigations are rather extensive and that taking documents during the investigation may be disruptive to business activities.”
“Sir, I shall now move on to address the procedural aspects of the merger regime raised by Mr Inderjit Singh. Before I do so, I should mention that the procedures have been designed to provide as much certainty and transparency to businesses while balancing the need for fairness and flexibility. Mr Inderjit Singh suggested that limits be set for the Commission to revert its decision on anticipated mergers. I agree. The CCS adopts a two-phase approach in assessing notified mergers. Mergers that clearly do not pose competition concerns will be cleared within phase one which is expected to last no more than 30 working days, and only mergers that can potentially pose competition concerns will undergo a more in-depth phase-two assessment which is expected to last no more than 120 working days. These indicative timeframes are comparable to the international best standards and the CCS will publish the time norms and other procedural details in its guidelines to be issued shortly when the Bill has been passed. The CCS will also be fair and transparent in its processes. Where it is practical to do so, it will publish reasons for its decisions, including why a merger falls within an exclusion from the Act. If it intends to remove the immunity conferred by a favourable decision, the CCS will consult the relevant parties and give them opportunity to make representations. Again, this will be included in CCS' guidelines to be published. Mr Inderjit Singh suggested that CCS should, upon approving the merger, make the merger parties aware that the Commission will continue to scrutinise the merger parties' business practices. Sir, we agree. The CCS will identify competition concerns during the assessment of the merger and communicate with the parties concerned.”
“The Notice will address typographical errors in the Bill and will clarify Mr Inderjit Singh's query on allowing a merger to proceed where the Commission accepts a commitment that will address competition concerns. Mdm Ho Geok Choo asked how net economic efficiencies will be treated in the merger regime and whether there are any safeguards if the efficiencies cannot be sustained. Sir, as a general policy, it may be unfair to require merger parties to unwind a merger cleared by the CCS if it is subsequently found to be anti-competitive due to unforeseen changes in its operating environment. The CCS may only re-visit its decision if, among other reasons, the information on which it based its decision was materially incomplete, false or misleading. Let me assure Members that a merger must meet a set of strict conditions before it can qualify for the net economic efficiencies exclusion. The merger parties must show verifiable evidence of the benefits that are likely to materialise within a reasonable period of time as a direct consequence of the merger. Furthermore, the efficiencies must be sufficient to outweigh any competitive harm caused by the merger. In addition, the benefits, such as lower cost, greater innovation or choice, or higher quality products, must flow to the markets in Singapore. Mergers that only create profits for themselves alone will not qualify for the efficiency argument. To ensure that the merger entity does not engage in anti-competitive behaviour, the other provisions under the Competition Act, ie, the provision against anti-competitive agreements and the abuse of dorminant position, will still apply to it even after it has been cleared on grounds of efficiencies.”